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BINDING  LIST  FEB  1  5  1923 


\  5ci 

The 
American  Economic  Review 


VOLUME  XII 


BOARD  OF  EDITORS 

B.  H.  HiBBABD  D.   A.   McCabe  C.  C.  Plfiix 

G.  A.  Kleexe  J.   H.  Pakmelee  O.  M.  W.  Sprague 

MANAGING  EDITOR 
Davis   R.   Dewey 


NEW  HAVEN,  CONN. 
AMERICAN   ECONOMIC   ASSOCIATION 
1922 


Copyright  1922 
American  Economic  Association 

HB 
I 

cop,2t 


CONTENTS 
ARTICLES:  PAGE 

Business  Teaching  by  the  Case  System    Wallace  B.  Doxham 53 

Cooperation,  The  Economic  Philosophy  of   E.    G.    Nocrse 577 

Credit,   A   Popular   Theory   of.   Applied   to   Credit 

Policy     Axka    YorxGMAN 417 

'Econoinic  Theory,  A  Unique  Situation  in   O.    Feed    Boccke 598 

-Economist's   Spiral,   The    Jacob    H.    Hollander 1 

Elementary  Economics,  The  Course  in Joiix    Ise    614 

Foreign  Trading  Zones  in  Our  Seaports   Edwix  J.  Clapp    2G2 

German  War  Finance— A  Review    Fred  Rogers   Fairchild.  .  .  246 

Guild  Socialism:     A  Two  Years'  Test    Asiv    Hewes     209 

Memorial  to  Former   President  Hcnrv  C.  Adams ^^^ 

Monev,   The   Circuit    Flow   of    ". William   T.   Foster 460 

National  Finances,  The  State  of  Our   Edwix    R.    A.    Seligmax..  21 

Public    Utility    Valuation    and    Regulation,    Some 

Recent   Problems    in Shirley  D.  Soi'thworth.  .  606 

Revenue  Act  of   1921,  The    Uoy  G.   Blakey    75 

Russia,  The  Commercial  Importance  of   Alox/.o  F'xglebert  Taylor  447 

Social    Studies    in    Secondary    Schools,    Proposed 

Program  of    '. Committee   ox   Teachixg   ok   Economics  66 

Volume  of  a  Country's  International  Trade,  What 

Determines    the     Herbert  Feis 238 

COMMUNICATIONS: 

Grain   Standardization    D.    A.    MacGibbox 272 


ARTICLES  IN  PROCEEDINGS  (MARCH,  1922):  (in  Supplement  to  No.  1) 

American  Trade  Unionism,  The  Present  Position 

of George    E.    B.vRxr.rr 4^  ' — 

Constitutional  Government  in  American  Industries  W.    M.   Leisersox 56 

Crisis    of    1920    and    the    Problem    of    Controlling 

Business    Cycles    Wesley   C.    Mitchell 20 

Crisis  of  1920  in  the  United  States   Warrex    M.    Persoxs 5 

Economics  and  Ethics,  The  Relation  between — Round  Table  Conference   192 

Elementary  Economics,  The  Teaching  of — Hound  Table  Conference    177 

Federation    in    Central    America,    The     Economic 

Basis    of Harry-  T.   Collixgs 168 

Industrial    Accident   and   Compensation    Statistics  Charles    H.    Verrili 137 

Marketing — Tlie  Chain   Store  Grocer — Round  Table  Conference    186 

Railroad  Problem,  The  Core  of  the Logax    G.    McPhersox.  .  .  .  108 

Railroad   Situation,   The    Walker    D.    Hixes 97 

Workmen's    Compensation    in    the    United    States, 

The  Present  Status  of   E.   H.   Dowxey 129 

HANDBOOK  OF  THE  AMERICAN  ECONOMIC  ASSOCIATION,  1922 

(Supplement   to  No.  2) 

REVIEWS  OF  BOOKS: 

Abel,  Successful  Family  Life  on  the  Moderate  Income.     By  F.  H.  StreightoflF  666 

Axgas,  Reparations,  Trade  and   Foreign   Exchange.     By  M.  J.  S 517 

Archbald,  The  Four-Hour  Day  in  Coal 488 

Armstroxg,  Essentials  of  Industrial  Costing.     By  J.  H.  Jackson 295 

Askwith,  Industrial  Problems  and  Disputes.     By  D.  A.  McCabe 655 

Bachi,  L'ltalia  Economica  nel  1920.     By  R.  F.  Foerster 481 

Baldy',  Les  Banques  d'AfFaires  en  France  depuis  1900.     By  R.  R.  W 661 

Bass  and  Moultox,  America  and     the  Balance  Sheet  of  Europe.     By  W.   F. 

Gephart     479 

Bell,  Accounting  Principles.     By  J.   H.  Jackson 296 

BEMA>f,  Current  Problenxs  in  Taxation.     By  R.  S.  Tucker 520 

Bexedict,  The  Larger  Socialism.     By  G.  B.  L.  Arner 339 

BiDou,  Les  Consequences  de  la  Guerre.     By  R.  R.  Whitehead 418 

Blzzell,  Farm  Tenantry  in  the  United  States.     By  A.  E.  Cance 285 

Blaxchard,  The  Essentials  of  Advertising.     By  C.  L.  Stone 297 

iii 


PAOB 

BOK..TX,  En^ployers'  Associations  in  the  United  States.     B>^.r  R  Jensen         652 
BoucKE,  Development  of  Economics   1750-1900      By   Cx.   A.   f>'f\!?^-.    -^l  627 

Bo.a.K:  Lemons 'de  Sociologie  sur  I'Evolutmn  des  ^^^^J^  G.  A    Kleene  627 

BouxiATiAX,  Les  Crises  Economiques.     B\   R.  R.  AV  hiteheaa ^^^ 

BowLEY,  Official  Statistics.     By  H.  Secnst.  •■•■;■•••■,■•  -^ ooa 

Boirilural  Problems  in  the  United  States      By  G    M.  Janes 328 

Bradley,  The  Story  of  the  Santa  Fe      By  I.  ^ ;W ''«■'>;!■■•■■.•  ^ ^JJ 

Browne,  What's  What  in  the  Labor  Movement.     By  (..  M.  Janes dU7 

Burns,  Government   and    Industry.     By    H.    Feis.^.  .  _^. 

Carver,  Principles  of  National  Economy.     By  L.   E.   1  .._. ^ 

Cassel,  The  World's  Monetary  Problems.     By  N.  R.  Whitney 815 

Clark,  Health  Service  in  Industry.     By  C.  L.  S. 

Clopper.  Rural  Child  Welfare.     By  G.  B.  Mangold   J^ 

Cole,  Fundamentals  of  Accounting.     By  J.  H.  Jackson .    i^ 

CoNYNGTON,  Financing  an  Enterprise.     By  S.  E    HowarcL  . ^»< 

Cooper.  Foreign  Trade  Markets  and  Methods.     By  H.  R.  Tosdal 49+ 

CossA,  Premiers  Elements  d'Economie  Politicpie.     By  R.  R.  W ^^' 

Daggett,  Historv  of  the  Southern   Pacific.     By   I.   Lip])incott WH 

Davies,  Introduction  to  Economic  Statistics.     By  W.  I.  King 5^^ 

Delemer,  Le  Bilan  de  I'Etatisme.     By  R.  R.  W 678 

Dixon,  Railroads   and  Government.     By  E.  J.   Rich 6d5 

Drever,  The  Psychology  of  Industry.     By  C.  L.  Stone 298 

Dunn,  Scientific  Selling  and  Advertising.     By  C.  L.  Stone 6+6 

Edie,  Practical  Psychology  for  Business  Executives.     By  C.  E.  Stone 646 

,  Principles  of  the  New  Economics.     By  E.  W.  Goodhue 624 

EiNAUDi,'  II  Regolamento  per  I'Avocazione  dei  Profitti  di  Guerra   alio  Stato. 

By    R.    F.    Foerster 153 

Ellwood,  The  Reconstruction  of  Religion 668 

Englanuer,  Bestimmungsgriinde  des   Preises.     By  O.   F.  Boucke 475 

EucKEN,  Socialism:  an  Analysis.     By  G.  B.  Arner 630 

Experience  with  Trade   Union  Agreements — Clothing   Industries.     By   D.   A. 

McCabe     l*? 

Feis,  The  Settlement  of  Wage  Disputes.     By  F.  E.  Wolfe 304 

Franklin,  The  Economics  of  Laissez  Falre'.     By  D.  S.  Tucker 112 

Friedman,  International  Finance  and  Its  Reorganization.     By  W.  F.  Gcphart  478 

Gamble  and  Burgess,  Peking,  A  Social  Survey.     By  A.  P.  Winston 482 

Gibson  and  Kirkaldy,  British  War  Finance.     By  E.  M.  Friedman 313 

Gide,  Premieres  Notions  d'Economie  Politique.     By  G.  A.  Kleene 476 

Gilbert  and  Pogue,  America's  Power  Resources.     By  I.  Lippincott 125 

GiLLiN,  Poverty   and  Dependencv.     Bv  G.   B.   Mangold 334 

GoMPKRs  and  Walling,  Out  of  Their  Own  Mouths.     By  G.  B.  L.  Arner 160 

Gregory,  Tariffs:  A  Study  in  Method.     By  F.  W.  Taussig 152 

Grilli,  II  Protezionismo  dopo  la  Guerra.     By  R.  R.  W 521 

Haeniscii,  Some  Cost  Problents  in  the  Hawaiian  Sugar  Industry 506 

Haney,  Railway  Traffic  and  Rates.     Bv  J.  H.  P 290 

Hantos,  Die  /ukunft  des  Geldes.     By  E.  Schwiedland 317 

Hayes,  Rural  Community  Organization.     By   B.   H.   H 329 

Hazard,  Organization  of  the  Boot  and  Shoe  Industry.     By  I.  Lippincott....   283 

Hecht,  Tlie  Real  Wealth  of  Nations.     By  W.   I.   King. .  .' 279 

Hersent,  L'Outillage  Economique  de  la  France.     By  R.  R.  Whitehead 483 

HiBBAJU),  Marketing  Agricultural   Products.     By  J.   D.   Black 130 

HiLLduiT,  From  Marx  to  Lenin.     By  G.  B.  L.  Arner 161 

HouRwiCH,  Immigration   and  Labor.     By   H.   P.   Fairchild 523 

HoYNE,  Speculation.     By  J.   E.   Boyle 497 

HuEBNER,  The  Stock  Market.     By  W.  E.  Lagerquist 499 

Hunter,  Outlines  of  Public  Finance.     By  F.  T.  Stockton 320 

Ingalls,  Wealth  and  Income  of  the  American  People.     By  A.  J.  Hettinger..   679 

IvEY,  Principles  of  Marketing.     By  A.  E.  Swanson 647 

Jenks  and  Lauck,  The  Immigration  Problem.     By  H.  P.  Fairchild 523 

Jennings,  The  American  Embargo,  1807-1809.     By  I.  Lippincott 483 

Jones,  Taxation,  Yesterday  and  Tomorrow.     By  R.  S.  Tucker 321 

Keller,  Die   Behandlung   des   Kriegsrisikos   in   der   Lebensversicherung.     By 

R-      R-      W g^g 

KiTSON,  The  Mind  of  the  Buyer.     By  C.  L.  Stone 140 

Knight,  Risk,  Uncertainty  and  Profit.     By  W.  C.  Mitchell. 274 

iv 


PAGE 

Km.wjjs,    Industriiil    Houslnp.    Rv   J.    Ford 669 

LAumurisr,   Invrstnitrit    An.ilv>is.'    ]\y   j.    p     Ebersole 117 

I.AViNGTo.v.   Tlu-   Trade   Cyclt-:     Uv    A.    H.    Hanstn.  ....'!!! ". 641 

I.K  Hun,  Tlu-  World  in  Htvolt.     Hv  .1.  C.  Brooks 330 

I.KHKKiirr.  National   K.sourrt-s  of  South  Africa.     liv  W.  I    Kinp «7 

I.K.vT,  (.rundriss  der  Friiwilli^rrn  (k-richtslmrkeit.     lU    U    U    W         507 

LKHoewui.NoL.   What   is  Socialism?     Ih    H.    E.    Mills..'..  i6> 

Ltvf.H,  A  Primer  of  Taxation.     By  U".  S.  Tucker 323 

LiEKWA.VN    Die  Kommiinistischin  Cu-mcindon  in  Nordamcrika.  By  R.  R    W        678 
J.I.VCOI..V,  Prohl.rns  in  Business  Finance.     Bv  S.   K.  Howard  '    '    IK) 

I.oBiA.  I  Kondamcnti  Sci.ntifici  d.lla  Riform'a  Kconomica.     By  R    R    W 6»H 

l.owr..   International    Protection   of   I.ahor.     By    D.    A.    McC  "  '  "    308 

MacKlwkk   ami    H.rrfH,   Kconomic   Aspects  of  the  Great    Lakcs-sV.   Lawrence 

Shij)  (  anal.      By   C.   ( ).    Uu>.'>.'l«s ^92 

Mack.    Introduction   to   Kconomic   Problems.     By    E.   W.  Goodhue e>5 

MA.vts,   Xersicherunjrs-Staatshetrieh  im    Ausland!     By   H.  J.    H..    .  33» 

— ,    Versicherunfrswesen.      Bv    U.    H.    BlancharJl 67^^ 

Maxoold.  Children   Born  out  of   Wedlock.     Bv   A.   B.    Wolfe  669 

-March,  Prohlenies  Actuels  de  lEconomique.     Bv  R.   R.  Whitehead!!!! 5>7 

Mi.:k»:h    Work  of  the  SttR-k   E.xchanpe.      By   W.   K.  Lu^'cniuist '  '  '    499 

Milk  and   Milk    Products.     Bv   B.   H.   Hibhard  288 

MinuKi,..  The  Rise  of  Cotton  Mills  in  the  South.     Bv  I.  LIppincott 119 

MiTciiKii..  KiNu.  Macailky  and  K.VAfTH,  Income  in  the  United  States.     Bv 

G.    P.    >\  atkms •    ... 

Montah.vai..  Traite  Prati(iue  du  Contentieux  Commercial.      Bv   R     R     W 519 

Mo.vKioMKKv.    Income  Tax    Procedure-  l«tl>-J.      By   C.   C     Plehii  3->4 

Moon    Labor  Problem  and  the  Social  Catholic  Movement  in  France.     By  D.  A. 

■*^^ *)0H 

MoHTAHA.  Prospettive  Economiche  1!»_'2.     By  R.  F.  Foerster '±hi 

MriH.  Liberalism   and    Industry.      Bv   (;.    B."   L.    \rner  •«! 

-Ml  NsoN,  The  Manajrement  of  Men. '    Bv  C.   L.  Stone    300 

Ml  Ri'iiv.  Wood,  and  Ackkrman,  The  liousinp  Famine.     Bv  J.  Ford 670 

(  f:RT.MANN    Die  Geschaftsjrrundlape;  ein  neuer  Rechtsbeirriff.     Bv   R     R     W      507 
()s*;.K.n.  A   History  of  Industry.     Bv  A.  C.  Ford .  oil 


284 
Park    and    Biboess,    Introduction    to    the    Science    of' Swrcrio^n."' By    G^    a! 


w'^i':"'^.!*.'..!"^'^*''^"^'*^''^*"''  ''•  'l!'"'*''^  t>"  Cours  de  1914  a  1920.     By  R.  R.  W.  662 


'^''•*'"f    280 

VON    PiiiLippovicii   and  Sommahy.  Grundris.s  der   Politischen   Oekonomie.  Bv 

l'-    A.    K •     ^,^ 

Pri-KNco.  La  Ix^frislation  Sovii^tique  et  la  C.mfercnce  de  la  iVave.     Bv  r'  R  W    678 

wM,'^"     '■"'''■'■'■*""*■''     ^■"•"t"fnipe     und     Wahruntrsrefo'rm.      Bv     R      r' 

>\  lutehead     '  rin 

P0WE1.1..    Ihe   Railroads  of   Mexico.      Bv    I.   Lippincott !!!!!!!!! ''.K, 

1  rotit  Sharin):  by   .\merican    Emplovers.     Bv  J.    Ford  TJjj 

Public  Opinion  and  the  Slcel  Strike  of  1919. '   Bv  G.   M    Janes 14^ 

Rasor,  Mathematics  for  Students  of  Apriculture.      Bv  B.   H.  Hibbard 301 

Kuci,   II    Fallimento  della    Politica   Anncmaria.      Bv    R.    F.    Foerster  115 

RUILVHD8.  F^xperience  (Iradinp  and  Ratinp  Schedule.     Bv  R.  H.  Blanchard!!   *« 
RK11.MOND.  What   IS  S.K-ial   Case   Work?      Bv   G.    B.    Manpold...  397 

KivKT.   Etude  de  la   Loi   Portant    Fixation   Definitive  de  la   Ixpislation   .sur  Ics 

L«>yer.s.     By     U.    K.     w '^  ^.^ 

RoBB.  The  Guaranty  of  Bank  Deposits.     Bv  W.  A    Scott 6.59 

R0BER.STON.   Money.      By   N.    U.   Whitnev ..." 66'^ 

RoscHEH,  Economic  Industrielle.     Bv  A.   P.   Usher nl 

RowNTHEE.  The   Human   Factor  in   Business.     Bv   D.   A.   McCabc! ! ! 510 

Sabsovich,    Adventures    in    Idealism ' 634 

St.  Lewinski.  The  Founders  of  Political  Economv.     Bv  g!  a!  K.! 6'>8 

Savage,  Industrial   Unionism  in   .Vmerica.     Bv   F'.  T.  Stockton 6.54 

Savorgnan.  Demoprafia  di  Gucrra  e  Altri  Sa'gpi.     Bv  R.  F    Foerster 5^5 

ScELLE.  Le  Droit   Ouvrier.     By   R.   R.   W ". 6.56 

ScHAiB  and  Isaacs.  The  Law  in  Business  Problems.     Bv  s!  W'.  Gilraan !  ! !  !  !       649 
Scott  and  Hayes,  Science  and  Common  Sense  in  Working  with  Men.     Bv  C    L 

Stone    •       ■         1 1.7 

Secbist,  A  Business  Barometer  for  Retailers.     Bv  r!  wV  Baboon 649 

Seligmax,  Essays  in  Taxation.     By  C.  C.  Plehn ' !  !  ! !   325 

V 


-,  Principles  of  Economics.     By  C.  E.  P. 


_  281 

'  The  Shifting  and  Incidence  of  Taxation.     By  C.  C.  Plehn 325 

SiiARFMAX,  Tiie  American  Railroad  Problem.     By  E.  J.   Rich 127 

SiMPsox.  Economics  for  the  Accountant.     By  M.  J.  Shugrue 281 

Stamp.  Wealth  and  Taxable  Capacity.     By  W.  I.  King 531 

Statistical  Work.     By  B.  I>.  Altman 344 

Stieda,  Hildebrand  Veckinchusen.     By   H.   W.   Farnam 120 

Stocktox,  International  Holders  Union  of  North  America.     By  G.  M.  Janes  512 

Stone,  A  History  of  Labour.     By  D.  A.  McC 6-57 

Strobel.  Socialisation  in  Theory  and  Practice.     By  J.  E.  LeRossignol 676 

Strong,  Psychology  of  Selling  Life  Insurance.     By  C.  L.  Stone 508 

Study  in  Labor  Mobility.     By  D.  A.  McCabe 658 

Sullivan,  American  Corporations.     By  S.  E.  Howard 304 

SzEPEsi,  Cost  Control  and  Accounting  for  Textile  Mills.     By  J.  H.  Jackson..   642 

Taussig,  Principles  of  Economics.     Vol.  I.     By  C.  E.  P 114 

,  Principles  of  Economics.     Vol  II.     By  C.  E.  Persons 474 

,  Readings  in   International  Trade  and  Tariflf  Problems.     By   G.   O. 

Virtue     325 

TAYI.OR,  Principles  of  Economics.     By  C.  E.  Persons 109 

Thornton,  The  Nation's  Financial  Outlook.     By  W.  B.  Belknap 154 

ToDMAN,  Wall  Street  Accounting.     By  M.  J.  Shugrue 302 

TosDAL,  Problems  in  Sales  Management.     By  V.  H.  Pelz 292 

ToTOMiANTz,  Histoire  des  Doctrines  Economiques  et  Sociales.     By  R.  R.  W..   629 

Travers-Borgstroem,  Mutualism,  a  Synthesis.     By  G.  B.  L.  A 340 

Turner,  Ricardian   Rent  Theory   in   Early   American   Economics.     By   C.    O. 

Fisher    ! " '. 275 

Turpin,  Le  Probleme  International  du  Chomage.     By  R.  R.  AVhitehead 495 

Van  Metre,  Economic  History  of  the  United  States.'    By  A.  C.  Ford 122 

Veiller,  a  Model  Housing  Law.     By  J.  Ford 671 

Vernon,  Industrial  Fatigue  and  Efficiency.     By  C.  L.  Stone 657 

Waddell,  Economics  of  Bridge  Work.     By  F.  A.  Fetter 643 

Wall,   Analytical   Credits.     By   M.  J.   Shugrue 142 

Walton  and  Finney,  Mathematics  of  Accounting  and  Finance.     By  M.  J.  S.  302 

Waters,  School  Economic  History  of  England.     By  A.  C.  Ford 122 

W^ ATKINS,   Electrical   Rates.     By    J.    Bauer 501 

Watts,  Introduction  to  the  Psychological   Problems   of  Industry.     By   C.   L. 

Stone    143 

Webi!,  Consumers'  Cooperative  Movement.     By  J.  G.  Brooks 337 

Wells,  Industrial  History  of  the  United  States.     By  A.  C.  Ford 633 

Westerfieli),  Banking  Principles  and  Practice.     By  W.  W^.  Stewart 309 

White,  Market  Analysis.     By  A.  E.  Swanson ....'. 650 

WiLHRANHT,    Oekonomie.     By    E.    Schwiedland 629 

AViLLLs  and  Edwards,  Banking  and  Business.     By  G.  W.  Dowrie 514 

WiPHii),  Federal  Farm  Loan  System  in  Operation.     By  G.  E.  Putnam 319 

WooD.s,  Rural  Industries  Round  Oxford.     By  W.  L.  Davis 287 

ZiM.MERMANN,  Ocean  Shipping.     By  C.   O.   Ruggles 639 

ZizEK,  Grundriss  der  Statistik.     By  E.  Schwiedland 343 

TITLES  OF  NEW  BOOKS: 

Accounting,   Investments,  and   the   Exchanges 139,  295,  504,  645 

Agriculture,    Mining,    Forestry,    and    Fisheries 124,  285,  488,  634 

(\apitai    and    Capitalistic    Organization 145^  303,  509,  653 

Economic    History    and    Geography 117,  282,  481,  630 

General    Works,   Theory    and    Its  "  History Ill,  278,'  476^  626 

Insurance  and  Pensions I59,  332,  529,  673 

Labor    and    Labor    Organizations U6,  307,  511,  655 

Manufacturing    Industries     126    491 

Money,    Prices,   Credit,    and    Banking I49,  316,  517'  661 

Pauperism,  Ciiarities,  and  Relief  Measures '         '  335'  574 

Population    and    Migration 156,  327,  525^  666 

i^  uhlic   Finance,    1  axation,  and  Tariff I53,  393    520    664 

Socialism    and    Cooperative    Enterprises I60'  339!  53o!  678 

Social    Problems    and    Reforms 156    328,  525,  666 

Statistics    and    Its    Methods 163,  343    533    ggl 

1  rade,  Commerce  and  Commercial  Crises 132,  291    494    641 

Transportation    and    Communication [  I29'  288'  49l'  638 

vi 


FAOE 

DOCUMENTS,  REPORTS,  AND  LEGISLATION: 

Branch  Banking  Controversy,  The  Present AV.  F.  Gephaht 728 

Corporations     ' 197,  377,  565,  722 

Demography     738 

Industries  and  Commerce    195,  376,  564,  720 

Insurance  and   Pensions 379 

Insurance  and  Workmen's   Compensation 737 

Labor    198,  377,  565,  727 

Money,  Prices,  Credit,  and  Banking 199,  378,  566,  728 

Public    Finance    200,  378,  567,  736 

Shoe  and  Leather  Costs  and  Prices,  Report  of 

Federal  Trade  Commission  on Abraham  Berglcnd 195 

Taxation  and  Retrenchment,  Report  of  the  [New 

York]  Special  Joint  Committee  on Rufus  S.  Tucker 567 

Transportation,  The  Report  of  the  Joint  Commission 

of  Agricultural  Inquiry M.  O.  Lorexz 722 

PERIODICAL  ABSTRACTS: 

Accounting.     By    Martin   J.    Shugrue 180,  356,  5 17,  700 

Agricultural   Economics.     By   A.   J.   Dadisman 172,  349,  539,  693 

Business    Management 54.9,  701 

Commerce.     By    H.    R.    Tosdal 176,  353,  545,  697 

Economic    History,    Foreign 170,  538,  690 

Economic  History',  United  States.     By  Amelia  C.  Ford 167,  348,  536,  688 

Insurance   and   Pensions.     By   Henry  J.   Harris 189,  371,  559,  713 

Labor  and  Labor  Organizations.     By  David  A.  McCabe 181,  357,  549,  702 

Money,  Prices,  Credit,  and  Banking.     By  N.  R.  Whitney '  362,  551,  705 

Pauperism,   Charities.     By   George    B.    Mangold 190,  374,  561,  715 

Population   and   Migration.     By   A.   B.   Wolfe 187,710 

Public    Finance.     By   Charles    P.    Huse 185,  369,  557,  709 

Public   Utilities.     By   Charles   S.   Morgan 177,  354,  545,  698 

Railways  and  Transportation.     By  Julius   H.   Parmelce 173,  350,  540,  694 

Shipping.     By   E.   S.   Gregg ." 3.52,  543,  696 

Socialism    and    Cooperative    Enterprises 191,  716 

Statistics.     By     Horace    Secrist 191,  374,  561,  716 

Theory.     By   Walton    H.    Hamilton 165,  346,  683 

NINETEENTH  LIST  OF  DOCTORAL  DISSERTATIONS  IN  POLIT- 
ICAL   ECONOMY    380 

NOTES    202,  393,  569,  739 

CONTRIBUTORS 

Leading  articles  are  marked  (a);  communications  (c)  ;  papers  read  at  the  annual 
meeting,  publisiied  in  the  Supplement  separately  paged,  are  marked  (s)  ;  document 
notes  (d)  ;  periodical  abstracts  (p)  ;  and  all  others  are  reviews. 

Altman,  B.  L.,  344.  Committee    on    Teaching    of    Economics, 
Arner,  G.  B.  L.,  160,  161,  331,  339,  340,  66    (a). 

530.  Cooley,  C.  H.,  408   (a). 

Babson,  R.  W.,  649.  Dadisman,  A.  J.,  172   (p),  349    (p),  539 
Barnett,  G.  E.,  44  (s).  (p),  693   (p). 

Bauer,  J.,  501.  Davis,  W.  L.,  287. 

Belknap,  W.  B.,  154.  Deibler,  F.  S.,  87  (s). 

Berglund,    A.,    195    (d).  Dixon,   F.   H.,  409    (a). 

Black,  J.  D.,  130.  Donham,  W.  B.,  .53  (a). 

Blakev,  R.  G.,  75   (a).  Downev,  E.  H.,  129   (s). 

Blanciiard,  R.  H.,  333,  672.  Dowrie',  G.  W.,  514. 

Bogart,  E.   L.,  51    (a).  Ebersole,  J.  F.,  137. 

Boucke,  O.  F.,  475,  598   (a).  Ely,  R.  T.,  402  (a). 

Bovle,  J.  E.,  497.  Fairchild,  F.  R.,  246   (a). 

Brooks,  J.  G.,  330,  337.  Fairchild,  H.  P.,  523. 

Cance,  A.  E.,  285.  Farnam,  H.  W.,  120. 

Clapp,  E.  J.,  262   (a).  Feis,  H.,  238   (a),  674. 

Clark,  J.  B.,  413  (a).  Fetter,  F.  A.,  643. 

Collings,  H.  T.,  168   (s).  Fisher,  C.  O.,  275. 


Foerster,  R.  F.,  115,  153,  481,  484,  525. 
Ford,  A.  C,  122,  122,  167   (p),  284,  348 

(p),  536   (p),  633,  688   (p). 
Ford,  J.,  163,  669,  670,  671. 
Foster,  W.  T.,  460   (a). 
Friday,  D.,  411    (a). 
Friedman,  E.  M.,  313. 
Gephart,  W.  F.,  478,  479,  728   (d). 
Giddings,  F.  H.,  414  (a). 
Gilrnan,  S.  W.,  649. 
Goodhue,  E.  W.,  624,  625. 
Gregg,  E.  S.,  352  (p),  543  (p),  696  (p). 
Hamilton,  W.  H.,  165   (p),  346   (p),  683 

(P)- 
Hammond,  M.  B.,  82   (s). 

Hansen,  A.  H.,  641. 

Hapgood,  P.,  153  (s). 

Harris,    H.    J.,    189    (p),    332,   371    (p), 

559  (p),  713  (p). 
Hettinger,  A.  J.,  Jr.,  679. 
Hewes,  A.,  209   (a). 
Hibbard,  B.  H.,  288,  301,  329. 
nines,   W.  D.,  97    (s). 
Holdsworth,  J.  T.,  47  (a). 
HoUander,  J.  H.,  1    (a),  401    (a). 
Hoolcstadt,  C,   158    (s). 
Howard,  S.  E.,  140,  297,  304. 
Huse,  C.  P.,  185  (p),  369   (p),  557   (p), 

709    (p). 
Ise,  J.,  614  (a). 

Jackson,  J.  H.,  134,  295,  296,  642. 
Janes,  G.  M.,  148,  307,  328,  512. 
Jensen,  J.  P.,  652. 
King,  W.  I.,  279,  487,  531,  533. 
Kleene,  G.  A.,  278,  280,  476,  477,  627, 

628. 
Krecli,  A.  W.,  44  (a). 
Lagerquist,  W.  E.,  499. 
Leiserson,  W.  M.,  56  (s). 
LeRossignol,  J.  E.,  676. 

Lippincott,  I.,  119,  125,  283,  288,  290, 
483,  638. 

Lorenz,  M.  O.,  122   (s),  722  (d). 

McCabe,  D.  A.,  147,  181  (p),  80  (s), 
308,  308,  357  (p),  510,  549  (p),  655, 
657,  658,  702  (p). 

MacGibbon,  D.  A.,   272    (c). 

McPherson,  L.  G.,  108  (s). 

Mangold,  G.  B.,  190  (p),  327,  334,  374 
(p),  526,  561   (p),  715   (p). 

Mills,  H.  E.,  162. 

Mitchell,  W.  C,  20  (s),  274. 


Morgan,   C.    S.,   177    (p),    354    (p),   545 

(p),  698   (p). 
Nourse,  E.  G.,  577  (a). 
Parmelee,  J.  H.,  173  (p),  124   (s),  290, 

350    (p),   540    (p),   694    (p). 
Pelz,  V.  H.,  292. 

Persons,  C.  E.,  109,  112,  114,  281,  474. 
Persons,  W.  M.,  5  (s). 
Plehn,   C.   C,   324,  325,   325. 
Putnam,  G.  E.,  319. 
Rich,  E.  J.,  127,  635. 
Rovensky,  J.  E.,  41    (a). 
Ruggles,  C.  O.,  492.  639. 
Sakolski,  A.  M.,  120   (s). 
Sargent,  N.,  91  (s). 
Schulter,  W.  C,  36   (s). 
Schwiedland,  E.,  317,  343,  629. 
Scott,  W.  A.,  659. 
Secrist,  H.,  191    (p),  374   (p),  651   (p), 

681,  716  (p). 
Seligman,  E.  R.  A.,  21   (a),  403  (a). 
Sharfman,  I.  L.,  412   (a). 
Shugrue,  M.  J.,  142,  180   (p),  281,  302, 
302,  356   (p),  517,  547   (p),  700   (p). 
Southworth,  S.  D.,  606  (a). 

Stewart,  W.  W.,  40  (s),  309. 

Stockton,  F.  T.,  320,  654. 

Stone,  C.  L.,  140,  142,  143,  297,  298,  300, 
508,  646,  657,  667. 

Stone  N.  I.,  33  (s). 

Streightoff,  F.  H.,  666. 

Swanson,  A.  E.,  647,  650. 

Taussig,  F.  W.,  152. 

Taylor,  A.  E.,  447  (a). 

Tosdal,  H.  R.,  176  (p),  353  (p),  494, 
545    (p),  697    (p). 

Tucker,  D.   S.,  112. 

Tucker,  R.  S.,  321,  323,  520,  567  (d). 

Usher,  A.  P.,  114. 

Verrill,  C.  H.,  137  (s). 

Virtue,   G.   O.,   325. 

Watkins,  G.  P.,  341. 

Wliitehead,  R.  R.,  291,  481,  483,  495, 
507,  519,  521,  527,  627,  628,  629, 
656,  661,  662,  671,  673,  678,  678. 

Wliitney,  A.  W.,  161  (s),  362  (p),  515, 
551  (p),  662,  705  (p). 

Winston,  A.  P.,  482. 

Wolfe,  A.  B.,  187   (p),  669,  710   (p). 

Wolfe,  F.  E.,  304. 

Youngman,  A.,  417  (a). 


r 


The  , 

American  Economic  Review 

VOL.  XII  MARCH,  1922  No.  1 

THE  ECONOMIST'S  SPIRAL' 

The  historian  of  another  age  is  likely  to  appraise  our  own  day  as 
disturbed  in  thought,  no  less  than  restless  in  action.  The  shock  of 
the  Great  War  brought  mental  bewilderment  with  dislocated  affairs. 
Accepted  creeds  were  cliallenged  as  smug  conventions,  ami  primary 
faiths — wrenched  from  traditional  security — groped  for  firm  stands. 
Theology,  politics,  philosophy,  economics,  felt  this  upheaval.  Like 
Serapion,  the  pious  believer  lamented  the  old  anchorage  and  cried  for 
a  new  god. 

It  was  the  basic  social  concept — the  trend  of  human  affairs — that 
suffered  most.  Seven  years  ago  the  doctrine  of  progress  might  have 
been  fairly  described  as  a  scientific  verity.  Barring  the  pessimism  of 
a  philosophical  cult,  the  receding  postulates  of  Marxism  and  the  occa- 
sional rationalist  crj'ing  in  the  wilderness,  there  was  no  formal  dissent 
from  the  principle  of  progressive  betterment  in  human  affairs.  The 
pendulum  was  to  swing  far.  In  1919  a  regius  professor  of  history, 
in  the  detachment  of  doctrinal  review  could  declare:*  "The  progress 
of  humanity  belongs  to  the  same  order  of  ideas  as  Providence  or  per- 
sonal immortality.  It  is  true  or  false,  and  like  them  it  cannot  be 
proved  either  true  or  false.     Belief  in  it  is  an  act  of  faith." 

From  this  frank  agnosticism  there  developed  two  variants.  The 
one,  an  extreme  rebound  from  implicit  acceptance,  was  naturally 
enough  sheer  negation.  Not  progress  but  blind  chance — even  worse, 
outright  retrogression — is  the  order  of  social  movement.  A  century 
and  a  half  ago,  Adam  Smith — as  after  him,  the  whole  train  of  classical 
economists  through  John  Stuart  Mill — had  indeed  fashioned  the  con- 
cept of  a  retrograde  as  against  a  progressive  or  a  stationary  society. 
But  the  blight  was  specific  and  remediable:  "the  sensible  decay"  of 
"the  revenue  and  stock  of  its  inhabitants"  making  up  "the  funds 
destined  for  the  maintenance  of  labor."'  The  older  economics,  any 
more  than  the  older  philosophy,  had  no  place  for  a  necessitarian 
doctrine  of  social  decline. 

War  gave  waj'  to  Reconstruction,  and  the  menace  of  arms  yielded 

^Presidential  address  delivered  at  the  Thirty-fourth  Annual  Meeting  of  the  Ameri- 
can Economic  Association  held  in  Pittsburgh,  December  27,  1921. 
*Bury,  The  Idea  of  Progress  (1920),  p.  4. 
^Th^  Wealth  of  Nations  (ed.  Cannan),  vol.  I,  pp.  73-7.5. 


2  Jacob  H.  Hollander  [March 

to  the  dislocation  of  peace.  With  the  change,  philosophical  depres- 
sion was  succeeded  by  historical  retrospect.  The  sensible  form  became 
a  revival  of  the  age-old  concept  of  cyclical  return.  Less  naive  than  the 
Stoic's  doctrine  of  periodic  destructions  and  rebirths,  more  complex 
than  Vico's  principle  of  reflux,  less  mystic  than  Nietzsche's  vision  of 
eternal  recurrence— the  essence  of  this  new  creed  is  that  the  course 
of  human  affairs  follows  not  a  trajectory  but  a  spiral. 

The  composite  origin  of  the  doctrine  appears  in  its  two  phases :  the 
spiral  may  be  horizontal  or  vertical.  The  one,  with  ear-mark  of  re- 
action, assumes  a  recurrent  swing  bringing  man  back  again  and  again 
to  the  point  from  wliich  he  started;  the  other,  still  linked  with  the 
old  optimism,  pictures  a  spiral  ascent,  wherein  "each  stage  of  an 
upward  progress  corresponds  in  certain  general  aspects  to  a  stage 
which  has  already  been  traversed."'  Both  are  insistent  that  normal 
forces  working  in  essentially  like  settings  beget  similar  phenomena. 

Color  and  warmth  have  been  lent  to  this  "neo-spiralism"  by  historic 
parallel.  In  particular,  the  accompaniments  and  sequels  of  the  other 
"great  war"  of  a  hundred  years  ago  disclose  resemblances  so  startling 
that  a  recent  investigator  observes:  "A  student  conversant  with  the 
earlier  period  often  has  an  uncanny  feeling  of  having  previously  lived 
through  current  events."^  In  currency  disorders,  in  price  fluctuations, 
in  industrial  disputes,  in  agricultural  unrest,  in  trade  depression,  in 
social  reaction — this  likeness  appears :  "Everything  goes,  everything 
returns,  eternally  does  the  wheel  of  being  roll." 

The  parallelism  in  economic  facts  has  been  at  least  partially  ex- 
plored ;  but  the  likeness  in  economic  thought  has  received  little  atten- 
tion. Invoking  the  principle  of  historical  relativity,  an  exhibit  of 
resemblance  might  be  expected.  Opinion  is  an  interpretation  of  life. 
Given  corresponding  conditions,  like  doctrines  may  be  anticipated — 
differing  only  as  the  personal  equation  shades  the  image  or  as  new 
instruments  of  precision  render  it  more  exact. 

The  role  of  the  political  economist  in  the  Napoleonic  contest  and  its 
aftermath  was  not  influential,  certainly  not  distinguished.  Adam 
Smith's  death  three  years  before  the  outbreak  of  hostilities  had  made 
"less  impression  than  the  death  of  a  bustling  divine."  The  public  re- 
garded the  Theory  of  Moral  Sentiments  as  "a  far  superior  work"  to 
the  Wealth  of  Nations,  and  calmly  accepted  the  latter  as  "a  sensible 
book."' 

*Bury,  op.  cit.,  p.  27. 

•Buer,  "The  Trade  Depression  Following  the  Napoleonic  Wars,"  Economica,  May, 
(1921),  p.  159. 

'Nietzsche,   "Zarathustra",   III,  xiii,   §2;   cited   in    Salter,   Nietzsche    the    Thinker 
(1917),  p.  169. 
Ttac,  Life  of  Adam  Smith  (1895),  pp.  435-6. 


1922]  The  Economist's  Spiral  3 

A  decade  before,  indeed,  tradition  has  it  that  Pitt  had  come  under 
Smith's  influence,  and  thereafter  "always  confessed  himself  as  one  of 
Smith's  most  convinced  disciples."'  Mr.  Rae  has  written  of  the  young 
statesman  "reforming  the  national  finances  with  the  Wealth  of  Xations 
in  his  hand,"  and  Buckle  long  ago  cited  Pulteney's  appeal  to  "the 
authority  of  Dr.  Smith  who,  it  was  well  said,  would  persuade  the 
present  generation,  and  govern  the  next."*  But  recent  studies  have 
tended  to  qualify  this  wholesale  ascription.  Hose  insists  that  the  in- 
fluence of  Adam  Smith  upon  Pitt  has  been  exaggerated ;"  Rees  main- 
tains that  even  in  his  administrative  reforms  Pitt  was  influenced  "less 
b}'  Adam  Smith  than  by  the  Committee  of  Public  Accounts  (of  17H5),"" 
and  Kennedy,  contesting  the  view  that  the  Wealth  of  Nations  brought 
to  the  world  a  new  revelation  of  the  principles  of  taxation,  declares 
bluntly  that  Smith  merely  "gave  a  wide  intellectual  sanction  to  a  set 
of  opinions  already  very  influential"  and  that  "all  the  large  changes 
(in  taxation)  since  his  day.  .  .  .  have  been  made  independently,  or  in 
sj)ite  of  the  influence  of  his  ideas."" 

Certainly,  with  the  alarms  of  war,  economic  philosophy  vielded  to 
economic  opportunism.  From  1793  on,  through  Pitt's  death  in  1806, 
up  to  the  end  of  the  great  struggle,  the  impress  of  Adam  Smith — 
whatever  it  may  have  been — was  felt  in  the  world  of  thought,  not  in 
the  domain  of  aff'airs. 

Adam  Smith's  mantle  descended  upon  Dugald  Stewart.  lint  with  it 
came  no  direct  access  of  jiractical  influence.  Reaction,  born  of  the 
Terror,  was  in  the  air;  and,  discriminating  critic  and  eloquent  expos- 
itor though  he  might  be,  Stewart  was  not  temperamentally  of  the 
stuff  of  academic  martyrs.  "I  have  been  so  uniformly  impressed  with 
a  sense  of  the  im})ortance  of  my  situation"  (as  professor  of  moral 
philosophy  at  Edinburgh) — he  wrote  in  apologetic  reply  to  Lord 
Abercromby's  alarm — "that  among  all  the  interesting  questions  which 
have,  during  the  last  nine  years,  divided  our  political  parties,  I  have 
never  introduced  the  slightest  reference  to  any  of  them  excepting  in 
the  single  instance  of  the  African  trade,  on  which  I  formerly  expressed 
myself  with  some  warmth; — and  even  these  expressions  I  dropped  from 
my  course,  as  soon  as  it  became  matter  of  public  discussion."" 

Apart  from  Adam  Smith  and  Dugald  Stewart  we  search  vainlv  in  the 
period  before  1800  for  any  considerable  influence  of  economic  opinion 

'Ibid.,  p.  404.. 

^History  of  Civilization  in  England,  vol.  I,  ch.  4,  p.  61. 

^"William  Pitt  and  National  Revival  (1912),  p.  183. 

"^  Short  Fiscal  and  Financial  History  of  England,  ISlo-lDlR  (1921),  p.  11. 

"English  Taxation,  1640-1799   (1913),  pp.  141-2;  in  Rees,  op.  cit.,  p.  225. 

■Mohn  Veitch,  A  Memoir  of  Dugald  Stewart  in  Collected  Works  of  Dugald 
Stewart  (ed.  Hamilton),  vol.  X,  Ixxiv. 


4  Jacob  H.  Hollander  [March 

upon  public  policies.  Massic,  never  widely  read,  had  long  since  been 
forgotten.  Hume's  Political  Discourses  had,  a  generation  before,  en- 
tered into  the  general  equipment  of  the  publicist  and  become  mere 
common  sense.  Sir  James  Stewart's  stately  volumes  gathered  dust 
on  the  shelves.  Godwin's  Political  Justice — destined  to  exercise  a  pro- 
found impress  upon  a  succeeding  generation — ^was  accorded  the  ne- 
glect Mhich  Pitt  observed  could  be  safely  imputed  a  work  that  sold 
for  three  guineas.  Bentham,  writing  from  the  first — in  Dumont's 
phrase — "never  as  the  historian  but  always  as  the  legislator," — had 
shown  his  mettle,  but  hardly  more.  The  Essay  on  the  Principle  of 
Population,  two  years  after  its  publication,  was  still  a  sacrilegious 
lampoon  for  which  its  anonymous  author,  one  Rev.  Thomas  Robert 
Malthus,  should  have  been  unfrocked. 

There  was,  as  there  had  been  for  a  century  earlier,  a  succession  of 
economic  compositions — some  not  without  practical  result.  Young, 
Sinclair  and  Anderson  made  themselves  felt  in  agricultural  policies. 
Eden  contributed  to  clearer  thinking  as  to  social  conditions.  Richard 
Price  could  point  to  the  sinking  fund  with  something  akin  to  proprie- 
tary interest.  Yet  the  first  decade  of  the  Napoleonic  struggle  ended 
with  the  oconomist,  as  such,  neither  prominent  nor  important. 

The  turn  came  in  the  second  half  of  the  war  with  the  increasing 
acuteness  of  economic  disorders  and  the  greater  interest  in  economic 
study.  The  Bank  Restriction  of  1798  and  the  ensuing  derangement 
of  the  exchanges  brought  forth  a  flood  of  pamphlets  in  polemic  criti- 
cism and  defense,  culminating  in  the  Bullion  Report  and  in  Ricardo's 
definitive  tracts.  The  price  of  corn  fluctuated  wildly  with  the  inter- 
ru])tions  of  war — intensifying  crop  variations — and  an  "inquiry  into 
the  causes  and  remedies  of  the  late  and  present  scarcity  and  high  price 
of  provisions"  became  a  literary  habit.  Pitt's  fiscal  necessities  and  the 
reluctant  adoption  of  the  income  tax  in  1799  precipitated  a  contro- 
versial war.  Malthus  took  formal  place  as  the  best  abused  man  of  his 
day.  The  Berlin  and  jNIilan  decrees  revived,  in  new  phase,  an  old 
discussion  as  to  commerce  and  national  well-being.  The  sinking  fund 
was  alternately  magnified  as  a  fiscal  panacea  and  reviled  as  a  national 
calamity. 

Substantial  as  was  this  body  of  economic  writing  it  lacked  contin- 
uity and  integration.  Like  the  currency  debate  of  the  seventeenth 
century  and  the  trade  controversy  of  the  eighteenth,  pre-Ricardian 
literature  of  the  nineteenth  century  figures,  with  bare  exceptions,  as  the 
output  of  tract-writers  and  pam})hleteers. 

The  saving  elements  were  the  concurrent  growth  of  scientific  con- 
sciousness and  the  vogue  of  economic  study — tendencies  associated 
with  the  name  of  Dugald  Stewart.     Unimportant  in  doctrinal  contri- 


1922]  The  Economist's  Spiral  5 

bution,  negligible  in  practical  influence,  the  notable  service  of  Stewart 
was  in  preserving  the  concept  of  economic  science  and  in  transmitting 
an  ardent  enthusiasm  for  its  pursuit. 

The  small  groups  who  from  1799  on  gathered  at  Edinburgh  in 
attendance  upon  his  "separate  course" — James  Mill,  J.  R.  McCulloch, 
Thomas  Chalmers,  the  Earl  of  Lauderdale,  Henry  Brougham,  Francis 
Horner,  Francis  Jeffrey,  Macvey  Napier,  Sydney  Smith,  Archibald 
Alison — were  the  men  who  contributed  most  as  text-writers,  as  reviewers 
and  as  journalists  to  the  revival  of  economic  study  in  England  in  the 
decade  then  beginning. 

But  the  largest  product  of  Dugald  Stewart's  lecture  room  was  the 
prominence  of  economic  criticism  in  the  newly  founded  Edinburgh 
Review.  The  project  was  from  the  first  designed  to  effect  practical 
reform  rather  than  to  afford  philosophical  exercise.  Undertaking  to 
oppose  in  politics,  in  economics,  and  in  jurisprudence  that  "timorous 
acquiescence  in  the  actual  system,"  which  Walter  Bagehot  calls  a  habit 
of  the  early  nineteenth  century,  the  Review  became  something  more 
than  "the  doctrinal  organ  of  the  whigs."  In  the  field  of  economic 
relations,  its  editors  attempted  nothing  less  than  the  formation  and 
spread  of  a  sound  public  opinion.  Issue  after  issue  appearing  with 
essay-like  critiques  from  Francis  Horner,  Richard  Jeffrey,  Sydney 
Smith,  Henry  Brougham — a  little  later  Malthus,  James  Mill,  and 
McCulloch — the  Review  became  the  rostrum  from  which  olympian 
judgment,  sometimes  biased,  often  truculent  but  rarely  incompetent, 
appraised  the  economic  writings  and  happenings  of  the  period. 

From  the  new  consciousness  proceeded  scientific  dignity  and  popular 
interest.  Adam  Smith  had  used  the  term  the  "science"  of  political 
economy  and  in  the  next  generation,  thanks  to  Stewart's  teaching  and 
Say's  writing,  the  phrase  had  come  into  easy  use.  But  from  1810 
on  it  acquired  meaning  and  force.  The  fourth  edition  of  the  Encyclo- 
paedia Britannica  in  that  very  year  carried  an  expository  article  on 
"Political  Economy."  A  coterie  gathered  about  Ricardo's  breakfast 
table,  and  personal  regard  cemented  intellectual  sympathy.  Doctrinal 
controversies  were  initiated  and  conducted  with  spirit — a  remarkable 
exhibit  of  this  activity,  the  long  missing  and  much  desired  manuscript 
of  Ricardo's  Notes  on  Malthus  having  happily  been  recovered  during 
the  past  summer  and  being  now  in  process  of  publication." 

Academic  recognition,  anticipated  in  Malthus'  appointment  at 
Haileybury  in  1807,  was  more  fully  accorded  by  Pryme's  lectureship  at 
Cambridge  in  1816  "to  facilitate  the  study  of  a  science  hitherto  inacces- 
sible without  the  most  arduous  perseverance,"  even  though  subject  to 
the  condition,  indeed,  that  the  lectures  be  not  given  at  an  earlier  hour 

"See  paragraph  under  Notes  of  this  issue  of  the  Review. 


6  Jacob  H.  Hollander  [March 

than  twelve  o'clock,  lest  they  should  interfere  with  other  fixtures." 
Finally,  in  1821,  the  Political  Economy  Club — to  whose  honored  cen- 
tenary this  Association  within  the  last  month  has  sent  its  message  of 
congratulation — was  organized  nominally  to  support  the  Merchants' 
Free  Trade  Petition  of  1820,  but  really,  as  its  first  resolutions  set 
forth,  to  efTect  the  formation  of  a  society  for  promoting  the  knowledge 
of  political  economy. 

The  counterpart  of  scientific  consciousness  was  popular  vogue.  In 
1811,  Boileau  compiled  his  Introduction  to  the  Study  of  Political 
Economy  "particularly  for  those  to  whom  rank  or  fortune  hold  out 
the  noble  prospect  of  being  one  day  called  to  legislate  for  their  fellow- 
subjects.""  At  the  other  extreme  Mrs.  Marcet,  a  few  years  later,  pre- 
sented her  Conversations  in  Political  Economy — destined  to  run 
through  many  editions — in  order  to  bring  the  science  within  the  reach 
of  any  "intelligent  young  person,  fluctuating  between  the  impulse  of 
her  heart  and  the  progress  of  her  reason,  and  naturally  imbued  with 
all  the  prejudices  and  popular  feelings  of  uninformed  benevolence." 

Maria  Edgeworth  recorded  in  1823  that  political  economy  was 
displacing  the  ordinary  disciplines  as  the  necessary  equipment  of 
nursery  governesses  and  that  "it  had  become  high  fashion  with  blue 
ladies  to  make  a  great  jabbering  on  the  subject.""  In  1823  McCulloch 
trumpeted :  "The  time  cannot  be  far  distant  when  a  knowledge,  or  at 
least  some  little  attention  to,  Political  Economy  will  be  considered  as 
necessary  for  a  legislator  as  a  knowledge  of  Greek" — in  itself  no  mean 
exhibit  of  the  economist's  spiral,""  And  almost  at  the  same  time  an 
anonymous  author  presented  "to  the  enlightened  ideas,  and  acute  per- 
ception of  the  American  people"  A  Treatise  of  Political  Economy 

in  the  form  of  a  Romaunt,  for  the  more  pleasing  accommodation  of 
readers;  wherein  the  subject  "presumed  to  be  considered  upon  strict 
philosophical,  mathematical,  and  geometrical  principles"  is  explained 
in  a  series  of  letters  to  Aristippus  from  Aristander,  "perceived  in  a  deep 
\asion."'^ 

The  reflex  of  scientific  pursuit  and  popular  favor  was  practical 
effect.  In  the  five  years  that  followed  Waterloo — roughly,  the  period 
of  post-bellum  reconstruction — political  economy  exercised  a  practical 
influence  never  before  equalled.  In  every  phase  of  the  nation's  life 
there  was  enactment  or  repeal  in  accord  with  "the  verdict  of  the  econ- 

"^Inlobiographic  Recollections  of  George  Pryme  (1870),  p.  121. 

^"Polilicnl  Economy  Club:  Minutes  of  Proceedings,  etc.,  (1921),  p.  1. 

"Preface,  p.  v. 

"Preface,  p.  ix. 

"Life  and  Letters  of  Maria  Edgeworth  (ed.  Hare,  1895),  vol.  II,  p.  65. 

^Autobiographic  Recollections  of  George  Pryme,  p.  127. 

"Baltimore,  1824. 


1922]  The  Economist's  Spiral  7 

omists" — sometimes  even  in  vindication  oi  rejected  advocacies.  The 
income  tax  which  in  1798  Pitt  had  imposed  and  in  1803  reimposed 
was  in  1816  repealed  and  the  very  assessment  records  burned.  The 
sinking  fund  after  two  decades  of  financial  legerdemain  was  recon- 
sidered in  1819  and  reconstituted  in  1823.  The  House  of  Commons 
in  1811  solemnly  recorded  its  dissent  from  the  conclusions  of  the 
Bullion  Report,  only  with  equal  solemnity  in  1819  to  reverse  its  action. 
Tooke's  draft  of  the  Merchants'  Petition,  favorably  received  by  Lord 
Liverpool's  government  in  1820,  established  the  political  rallying  point 
for  "the  principles  of  a  Free  Trade  policy"  which  a  generation  before 
Adam  Smith  had  regarded  "as  absurd  as  to  expect  that  an  Oceana  or 
Utopia  should  ever  be  established"  in  Great  Britain. 

How  from  this  high  estate,  political  economy  in  the  next  decade  fell 
to  disregard  and  neglect  is  a  familiar  but  painful  chapter  in  the  history 
of  our  science.  Inquiry  gave  way  to  dogmatism  and  analysis  was 
displaced  by  disputation.  Intellectual  independence  was  sapped  and 
scientific  doctrine  degenerated  into  barren  dialectics,  even  into  class 
advocacy.  Cobbett,  Place,  Owen  and  the  sturdy  group — lately  come 
into  its  own  as  the  "English  Socialist  School" — exposed  "the  inherent 
defects  and  injustice  of  the  existing  system."  Mallet  could  write  of 
accuracy  and  minuteness  of  definition  as  part  of  "the  coxcombry  of 
the  Political  Economists" ....  continuing  thereafter,  in  Elia's  phrases, 
"their  minds  are  never  caught  in  undress  or  by  glimpses ;  their  stocks 
of  ideas  are  in  perfect  order  and  completeness.  You  cannot  cry  halves 
to  anything  they  find.  Between  the  affirmative  and  negative  there  is 
no  border  land  with  them.      Their  conversation  is  a  book."^ 

It  was  before  this  august  company  that  McCulloch  could  assert 
"that  there  could  not  be  a  farthing  more  capital  in  the  country  if  the 
national  debt  had  not  been  incurred"  ;^  that  Tooke  could  propose  "tea 
as  a  perfect  object  of  taxation,  because  it  would  hardly  be  considered 
as  a  necessary  of  life,  and  the  quantity  required  by  each  individual  is  so 
small"  ;"^  that  Senior  could  maintain  in  opposition  to  the  Factory  bill 
of  1837  that  the  profits  of  the  operators  accrued  onl}'  in  the  final  hour, 
and  that  "the  Factor^'  bill  was  altogether  mischievous."'" 

The  influence  extended  beyond  "The  Caledonians."  In  1833  Harriet 
Martineau  assured  early  Victorianism  that  "The  case  of  those  wretched 
factory  children  seems  desperate ;  the  only  hope  seems  to  be  that  the 
race  will  die  in  two  or  three  generations,  by  which  time  machinery  may 

''^Political  Economy  Club:  Minutes  of  Proceedings,  etc.,  vol.  VI,  p.  273. 
='76id.,  p.  226. 
"Ibid.,  p.  223. 
'^Ibid.,  p.  274. 


8  Jacob  H.  Hollander  [March 

be  found  to  do  their  work  better  than  their  miserable  selves."''  And 
James  StirHng — one  of  "the  popular  advisers  of  the  middle  class" — 
writing  a  little  later  but  reflecting  a  like  spirit,  could  look  forward 
to  a  time  when  "the  fanatical  faith  of  the  working  classes  in  the 
artificial  mechanism  of  combination  will  give  place  to  trust  in  the  wiser, 
because  more  natural,  system  of  individual  competition ;  and  the  hiring 
of  labor,  like  the  exchange  of  commodities,  will  be  set  free,  to  be  regu- 
lated by  the  Heaven-ordained  laws  of  Supply  and  Demand."" 

II 

Let  us  turn  from  this  century-old  story  to  consider  the  role  of  the 
economist — of  the  American  economist — in  our  own  Great  War,  and  in 
its  aftermath.  The  first  fact  to  arrest  attention  is  the  deeper  conscious- 
ness, the  more  articulate  form,  the  larger  recruitment  of  the  science. 
In  1917  political  economy  in  the  United  States  could  fairly  rank  with 
any  of  its  sister  sciences  in  the  definiteness  of  its  aim,  in  the  detail  of 
its  exposition,  in  the  range  of  its  influence,  in  the  ardor  of  its  devotees. 

In  outright  numbers  and  in  relative  competence  the  fraternity  had 
made  notable  advance.  Compactl}"^  organized  in  scientific  association, 
supplied  as  to  assembled  material  and  equipped  as  to  technical  jour- 
nals, animated  with  high  sense  of  public  responsibility,  established  in 
academic  office  with  large  student  groups  affording  apprentices  and 
offering  discipleship — the  economist  had  come  to  fill  a  distinctive  place 
in  the  nation's  life.  Increasing  requisition  by  public  service  and  sensa- 
tional bidding-up  by  private  enterprise  had  so  far  dissipated  the  old 
seclusion  that  pros})ective  scientific  impoverishment  rather  than  pres- 
ent public  neglect  constituted  his  concern.  With  the  greater  special- 
ization of  social  effort  nation,  state,  and  city  were  utilizing  the  econo- 
mist's counsel  and  enlisting  his  personnel.  In  Washington  this  was 
physically  manifest.  The  Cosmos  Club,  like  Piccadilly  Circus,  was 
the  point  at  which  one  might  stand  and  see  his  world  pass. 

The  permanent  Census  Office,  the  reconstituted  Department  of 
Labor,  the  rehabilitated  Tariff  Commission,  the  enlarged  Department 
of  Commerce,  the  reorganized  Federal  Trade  Commssion,  the  expand- 
ing Department  of  Agriculture  were  so  many  stages  in  the  economist's 
])rogrcss.  Not  always  as  expertly  staffed  as  might  be,  hampered  often 
by  j)olitical  exigency,  they  reflected  a  widening  infiltration.  There 
were  positive  triumphs  too.      Workmen's  compensation  had  become  a 

^AntohUxjraphu  (cd.  Chapman,  1877),  vol.  Ill,  p.  87;  cited  in  Webb,  Industrial 
Democracy  (1897),  vol.  II,  p.  608,  n. 

'"Trade  Unionism  (1869),  p.  55;  cited  in  Webb,  ludiisfrial  Democracy,  vol.  II,  p. 
653. 


1922]  The  Economist's  Spiral      .  9 

part  of  our  industrial  scheme.  Mediation  and  arbitration  were  finding 
use  in  systematized  form.  Collective  bargaining,  at  least  as  a  phrase, 
had  entered  into  business  terminology.  The  income  tax  had  been  in- 
corporated into  the  national  revenue  system.  The  theory  of  monopoly 
price  was  definitely  accepted  as  to  the  regulation  of  non-competitive 
industry.  The  Federal  Reserve  act  had  repaired  the  glaring  defects 
in  our  banking  organization.  The  Federal  Farm  Loan  project  gave 
assurance  that  agricultural  credit  was  to  become  available. 

At  our  entry  into  the  war  the  opportunity  would  thus  seem  to  have 
been  present  for  the  exercise  of  a  large  influence  upon  afl'airs.  The 
course  of  the  struggle  had  made  it  evident  that  eventually  the  race 
must  be  to  the  economically  strongest ;  and  the  experiences  of  the 
belligerents  had  shown  the  penalty  of  economic  bungling. 

In  the  physical  sciences  there  was  swift  mobilization  and  quick  tender 
and  ready  acceptance  of  scientific  guidance.  As  to  the  economists 
there  is  a  different  story.  There  had  been  no  preparedness  in  the  three 
fateful  years  that  preceded  our  entry  into  the  World  War,  and  there 
was  no  collective  proffer  after  we  had  entered.  Even  more,  there  was 
at  the  outset  no  instinctive  recourse  to  the  economist  on  the  part  of 
public  authority,  and  but  slow  and  half-hearted  requisition  of  his 
services  thereafter. 

The  results  were  twofold — both  unfortunate.  On  the  one  hand, 
failing  systematic  mobilization,  a  wasteful  individualism  prevailed. 
The  American  economist  either  ate  his  soul  out  in  enforced  inactivity ; 
or,  the  situation  becoming  intolerable,  accepted  subordinate,  often 
clerical  position,  rather  than  do  nothing  at  all.  And  on  the  other 
hand,  his  proper  role  was  taken  over  in  part  by  a  group  of  transmuted 
men  of  affairs ;  in  part  by  a  corps  of  business  technicians,  distinguished 
from  the  economic  investigator  by  the  more  austere  title  "statistician." 

Of  the  whole  company  of  American  economists,  including  all  of  those 
whose  names  we  delight  to  honor,  not  a  single  figure  was  in  the  first 
instance  chosen  or  was  thereafter  permitted  to  exercise  formative, 
determining  influence  in  the  economic  conduct  of  the  war.  Services 
of  great  usefulness,  of  high  importance,  were  rendered  by  almost  every 
member  of  our  body,  and  I  sliould  fail  lamentably  in  my  purpose  did  I 
seem  to  be  insensible  of  this.  But  nowhere  and  at  no  time  was  the 
opportunity  afforded  to  shape  and  direct.  And  on  the  other  hand,  in 
instance  after  instance,  constructive  discretion  and  responsible  leader- 
ship were  vested  in  men  whose  excellencies,  high  as  the  heavens,  were 
yet  marked  by  absence  of  those  qualities  which  we  insist  distinguish  the 
scientificall}^  equipped  economist. 

This  is  no  light  statement.  But  it  has  not  been  hastily  conceived 
nor  recklessly  phrased.     Over  and  above  the  great  company  of  those 


10  Jacob  H.  Hollander  [March 

usefully,  but  administratively,  engaged — one,  two,  perhaps  three  names 
come  to  mind  as  of  economists  who  by  circumstance  or  designation 
may  seem  to  have  been  permitted  to  exercise  what  I  have  ventured  to 
call  formative  influence.  But  closer  scrutiny  will  establish  even  as  to 
these,  that  the  notable  service  which  each  in  his  respective  field  was 
able  to  render  was  not  because  but  in  spite  of  the  range  of  discre- 
tionary power. 

This  dispossession  of  the  economist  would  have  resolved  itself  into  a 
mere  slighting  of  sensibilities,  had  it  been  justified  of  the  result.  But 
the  exhibit  here  is  unmistakable.  If  we  refuse  to  be  flattened  out  by 
the  "we  won  the  war"  argument,  garnished  with  its  "hells"  and 
"damns,"  and  survive  the  more  subtle  "it  was  necessary  under  the 
circumstances"  fallacy,  with  its  aura  of  officialdom,  the  unpleasing 
fact  stands  forth  that  the  history  of  the  war  discloses  a  series  of 
costly  economic  errors  that  expert  guidance  should  have  avoided. 

The  four  great  areas  of  economic  intervention  in  our  war  activities 
were: 

1.  Labor  adjustment. 

2.  Pi-ice-fixing. 

3.  Revenue  provision. 

4.  Banking  administration. 

In  each  of  these,  government  practice  w^as  shaped — either  by  deliberate 
policy  or  opportunist  drift — independent,  even  in  disregard  of  the 
economist's  opinion.  In  the  execution  of  such  practices  the  economist 
was  utilized  and  his  influence  was  exercised.  But  the  formative  policy 
was  elsewhere  initiated  and  the  controlling  guidance  was  elsewhere 
lodged. 

The  particulars  may  be  briefly  reviewed : 

1.  The  liistory  of  labor  adjustment  in  the  war  is  a  complex  of 
opportunist  adaptation  of  a  peace-time  mechanism,  imperfectly  com- 
prelicndcd,  to  a  war-time  requirement,  inadequately  visualized — the 
whole  sliot  with  a  premature  idealism. 

In  1917  tlic  labor  world  was  still  the  least  well-understood  part,  in 
structu)-e  and  function,  of  our  economic  organization.  The  simpler 
magnitudes — distribution,  unionization,  wage  levels,  were  imperfectly 
enumerated,  and  the  deeper  elements — the  interaction  of  workers  as  to 
unionism,  localities,  and  trades — were  not  even  apprehended.  Where 
the  expert  would  have  trodden  cautiously,  the  amateur  rushed  in  un- 
hesitatingly. There  resulted  a  scries  of  wasteful  ventures,  out  of 
which  the  bare  concept  of  a  solution — a  common  labor  policy  in  all 
war  industry — did  not  emerge  until  the  war  was  half  over  and  the 
actual  realization  of  wliich  was  still  unattained  when  the  war  was  over. 

Just  as  the  problem  of  labor  distribution  was  met  with  an  unin- 


1922]  The  Economisfs  Spiral  11 

formed  empiricism,  so  the  problem  of  labor  remuneration  was  ap- 
proached with  a  premature  idealism.  From  insistence  that  the  out- 
break of  war  must  not  serve  as  a  pretext  to  sweep  away  accredited 
industrial  defences,  to  endeavor  that  the  exigencies  of  war  be  used  to 
elevate  wage  levels  to  an  imperfectly  ascertained,  inexpertly  administer- 
ed standard  of  comfort — this  is  a  far  cry,  the  sharp  echoes  of  which 
were  certain  to  ring  in  the  nation's  ears  long  after  the  event. 

2.  Price-fixing  has  been  recently  described  as  "one  of  the  most 
important  economic  novelties  that  resulted  from  the  war."'  It  was 
novel  not  in  the  sense  of  a  new  and  untried  device:  but  rather, 
in  that  it  jettisoned  accredited  economic  opinion.  No  rubric  in  our 
creed  seemed  more  secure,  none  more  safely  an  induction  from  historical 
experience,  nor  more  firmly  buttressed  upon  primary  economic  axioms 
than  the  unwisdom  of  a  legal  price  maximum. 

An  appeal  to  doctrinal  authority  is  no  sufficient  logic  in  the  political 
economy  of  war.  Inter  arma  silent  leges  may  be  invoked  as  to  opinion 
as  well  as  to  affairs — when  the  nation's  existence  is  in  the  balance. 
A  distinguished  leader  in  the  financial  world  has  defended  a  somewhat 
like  election  in  an  epigram :  "It  was  j^atriotism  that  for  the  time 
being  displaced  or  disregarded  economic  laws  or  principles." 
Obviously,  we  have  to  do  here  with  the  fineness  of  our  scientific  texture. 
Even  patriotism  may  not  flout  the  conservation  of  energy  or  the 
combustion  of  gases  or  bacterial  incubation.  Certainly  economic  uni- 
formities, even  the  best  of  them,  are  not  as  the  corner-stones  of  physics, 
chemistry  and  biology.  But  before  propulsion  into  the  outer  darkness 
they  are,  at  least,  entitled  to  a  day  in  court  with  counsel  for  the 
defense  from  their  own  exponents.  And  this  as  to  the  adoption — ■ 
adoption,  remember,  not  operation — of  the  policy  of  price-fixing  Avas 
denied  the  economist. 

A  competent  participant,  judicial  but  sympathetic,  has  said  in  re- 
view :  "Government  price-fixing  during  the  war  was  not  uniform  in 
its  objects,  and  was  little  guided  by  principles  or  deliberate  policies. 
In  the  main,  it  was  opportunist,  feeling  its  way  from  case  to  case."'" 
This  concerns  a  later  matter,  into  which — tempting  as  is  the  invitation 
— it  is  not  permitted  to  enter.  But  however  faint  the  praise  as  to 
practice,  incomparably  less  even  than  this  maj^  be  said  as  to  the  spirit 
of  entry.  There  were  definite  ends  to  be  attained:  the  protection  of 
the  public  in  fuel  and  food ;  the  protection  of  the  government  in  essen- 

^^Simpson,  "Price  Fixing  and  the  Theory  of  Profit"  in  Quarterly  Journal  of  Econo- 
mics, November,  1919,  p.  138. 

-"James  B.  Forgan,  in  American  Ecoxo^iic  Review,  March,  1920,  Supplement, 
pp.  17T-8. 

^"Taussig,  "Price-Fixing  as  seen  by  a  Price-Fixer,"  in  Quarterly  Journal  of  Eco- 
nomics, February,  1919,  p.  238. 


12  Jacob  H.  Hollander  [March 

tial  materials.  To  these  ends  there  were  alternative  means:  adminis- 
trative bargaining  on  patriotic  basis ;  commandeering,  potential  or 
actual;  non-inflationary  financing;  hcensing  of  fuel  supply;  control 
of  transport  facilities;  appropriation  of  war  profits.  It  is  by  no 
means  clear  that  the  objects  in  view  would  have  been  better  served — 
even  as  well  served — by  any  or  all  of  these  methods  as  by  direct  price- 
fixing.  But  a  statement  to  the  contrary  is  quite  as  unwarranted.  Until 
there  has  been  a  fuller  inquest — attended  by  more  than  ordinary  dif- 
ficulties— in  which  will  be  weighed  the  consequences  of  what  was  done, 
compared  with  the  possible  results  of  what  might  have  been  done — 
the  final  verdict  must  be  withheld. 

That,  however,  which  is  certain,  is  that  the  determination  of  policy — 
or,  if  a  less  conscious  procedure  be  emphasized,  the  initial  step — in 
essence,  a  radical  departure  from  accepted  economic  opinion  and  prac- 
tice— was  taken  deliberately,  almost  leisurely,  without  either  that  ex- 
pert canvass  of  the  problem  or  that  consultative  regard  for  scientific 
opinion  which  even  in  war  time  is  the  requisite  of  administrative 
efficiency, 

3.  The  nation  approached  its  war  financing  with  the  fairest  pros- 
pect of  actual  practice  conforming  to  sound  theory.  The  necessity 
of  revenue  provision  on  a  vast  scale  had  been  admitted ;  the  policy  of  a 
relatively  large  ratio  of  taxes  to  loans  had  been  adopted ;  the  danger 
of  "the  very  serious  hardship  which  would  be  likely  to  arise  out  of 
inflation"  had  been  set  forth  in  a  presidential  utterance ;  expert  counsel 
had  been  summoned  in  the  preparation  of  the  tax  schedule. 

Definite  adherence  to  this  program  would  have  meant  sound  war 
financing.  But  at  an  early  stage  the  straight  hard  road  of  taxation 
and  funding  Avas  left  for  the  treacherous  ease  of  "finance  by  bank 
credits,"  Thereafter  our  war  financing  had  primary  regard  for  fiscal 
convenience  and  business  advantage  to  the  neglect  of  general  well- 
being.  To  supply  the  exchequer  readily  and  painlessly  with  ample 
funds,  bank  credit  was  utilized  in  the  form  of  certificate  borrowing — 
with  the  consequences  of  deposit  and  note  inflation,  rising  prices  and 
social  injustice.''' 

A  careful  student  of  "the  political  economy  of  war"  has  pointed 
out  that  "finance  by  bank  credits" — "inherently  bad"  and  to  be  re- 
stricted "witliin  the  narrowest  possible  limits,"  though  it  be — is  likely 
to  be  resorted  to  even  by  strong  governments  at  war,  because  of  "the 
fear  of  popular  resentment  against  high  taxation  in  an  overt  form" 
and  "the  fear  that  an  offer  of  very  high  interest  upon  loans  might 
make  upon  neutrals  an  impression  of  financial  weakness."'^ 

"Cf.  the  present  writer's  "Inflation"  in  The  Annals  (Phila.),  May  1920, 

''Pigou,  The  Political  Economy  of  War  (1921),  pp.  110-1. 


1922]  The  Economises  Spiral  13 

Neither  of  these  factors  was  present  in  our  experience  to  a  degree 
sufficient  to  justify  resort  to  bank  credit  financing.  The  possible  atti- 
tude of  neutrals  did  not  even  figure ;  while  public  disposition  towards 
increased  tax  burdens  was  grim  acceptance,  tinctured  with  nothing 
worse  than  that  degree  of  grumbling  which  in  matters  of  taxation  is 
the  mark  of  a  decent  self-respect.  In  so  far  as  our  necessary  resort 
to  inflation  financing  can  be  explained  at  all,  it  is  traceable  to  that 
"borrow  cheap"  policy,  born  of  false  analogy,  fiscal  absolutism  and 
neglect  of  expert  opinion,  which  in  the  Civil  War  lashed  us  with  fiat 
currenc}",  and  in  this  war  scourged  us  with  fiat  credit. 

The  amazing  feature  of  this  process  is  the  completeness  with  which 
it  remained  unavowed  by  its  sponsors  and  undiscerned  by  the  public. 
The  certificate  of  indebtedness  which  in  the  seven  weeks  interval  between 
the  Revenue  act  of  March  3,  and  the  First  Liberty  Loan  act  of  April 
24,  1917,  passed  from  its  traditional  role  as  a  short-time  investment 
obligation  issued  in  anticipation  of  the  proceeds  of  a  funded  loan 
designed  to  meet  extraordinary  expenditure,  to  an  habitual  device  for 
the  extension  of  bank  credit  in  the  form  of  government  deposits  by  sub- 
scribing financial  institutions,  continued  to  be  officially  described  as  a 
mere  convenient  mode  of  avoiding  monetary"  strain,  with  never  an  inti- 
mation of  wider  significance. 

The  device  of  permissive  "payment  b}'  credit,"  worked  out  we  are 
told,^^  in  connection  with  the  First  Liberty  Loan  at  a  Sunday  conference 
in  May,  1917,  between  representatives  of  the  Treasury,  of  the  Federal 
Reserve  Board  and  of  the  New  York  Libert}'  Loan  Committee,  was 
extended  to  certificate  borrowing  as  a  whole,  with  consequences  of  the 
utmost  gravity,  almost  by  administrative  tolerance. 

There  was  no  intimation  that  in  essence  a  new  borrowing  policy  had 
been  inaugurated,  with  neither  specific  authorization  nor  general  com- 
prehension; that  the  certificate  of  indebtedness  had  been  transformed 
into  the  British  Treasury  Bill  on  Ways  and  Means  Advance,  unknown 
and  untried  in  our  experience,  and  that  by  its  lavish  use  we  were  head- 
ing straight  for  the  evils  which  the  CunlifTe  Commission  a  year  before 
had  explored  and  made  public,  as  brilliantly  as  its  great  predecessor 
the  Bullion  Committee  had  done  a  century  earlier  as  to  a  related 
problem.^ 

'^Cf.  the  present  writer's  War  Borro-wing  (1919),  ch.  II. 

'*R.  C.  Leffingwell  in  "Proceedings  of  Academy  of  Political  Science''  (New  York), 
June,  1920,  p.  29. 

^^Mr.  Paul  M.  Warburg,  formerly  a  member  of  the  Federal  Reserve  Board,  in  an 
interesting  paper  on  "Inflation  as  a  World  Problem"  {Proceedings  of  Academy  of 
Political  Science,  New  York,  June,  1920,  p.  117)  has  dissented  from  contentions 
similar  to  the  above,  expressed  by  me  in  another  connection  (ibid.,  p.  62),  and 
has  expressed  doubt  as   to  whether   "a  certificate   of  indebtedness   in   itself,  is   an 


14  Jacob  H.  Hollander  [March 

An  advocate  of  our  war  financing  has  written  of  such  development 
as  "tendencies  of  which  the  Treasury  officials  themselves  were  probably 
only  dimly  aware.""  Ricardo,  to  a  like  plea  in  extenuation,  reviewing 
the  entrenched  stolidity  of  the  directors  of  the  Bank  of  England  during 
the  first  decade  of  the  Restriction,  made  ringing  answer :  "I  do,  there- 
fore, acquit  them  of  being  influenced  by  interested  motives  but  their 
mistakes,  if  they  are  such,  are  in  their  efl'ects  quite  as  pernicious  to  the 
community,"^ 

4.  Beginning  with  the  flotation  of  war  loans  at  an  artificially  low 
rate,  the  Treasury  was  driven  to  support  the  "borrow  cheap"  policy 
both  as  to  the  bond  buying  and  certificate  issue  by  insuring  a  low 
preferential  discount  rate  at  the  federal  reserve  banks.  Made  possible 
by  political  domination  of  an  essentially  non-political  institution,  this 
misuse  of  the  federal  reserve  system  as  the  handmaiden  of  the  Treasury 
was  attended  with  severe  penalties. 

There  was  injected  into  the  exchange  mechanism  of  the  country  a 
great  body  of  deposit  and  note  currency  entirely  unrelated  to  com- 
mercial needs  and  serving  fiscal  rather  than  monetary  purposes.  With 
inflation  came  gross  depreciation  in  the  monetary  standard  and  dis- 
tress-causing rise  in  living  costs.  Higher  prices  of  materials  and  ser- 
vices added  to  the  cost  of  war  and  weighted  its  overhang.  Excessive 
gains  were  reaped,  unrelated  to  valid  enterprise.  Undeserved  losses 
were  sufl'ercd  by  the  depreciation  of  public  loans.  Worst  of  all,  cheap- 
ened credit  stimulated  extensive  speculation,  with  still  further  rise  in 
prices  and  capital  shortage. 

instrument  of  inflation  and  the  funded  debt  is  not."  As  practical  a  financier  as 
Mr.  Warburg  must  however  recognize  that  the  question  in  issue  is  not  as  to  hypo- 
thetical possibility  but  as  to  the  positive  occurrence.  That  certificate  borrowing  at  an 
artifically  low  rate  "by  credit,"  and  therefore  of  necessity  from  the  banks,  was 
responsible,  during  the  war  and  more  particularly  after  the  armistice,  for  a  vastly 
greater  degree  of  inflation  than  would  have  attended  funding  operations,  at  rates 
dictated  by  the  market  valuation  of  capital  and  in  forms  designed  for  investment 
absorption — is,  I  fear,  a  conclusion  wliich  the  inquiries  of  the  Cunliffe  Commission, 
the  penetrating  analyses  of  Professor  Pigou,  and  a  mass  of  evidence  in  England  and 
the  United  States,  remove  from  further  controversy. 

As  to  Mr.  Warburg's  statements  that  our  borrowing  machinery  was  "the  best 
that  could  have  been  devised"  and  that  "no  other  way  was  open  to  pay  for  the  war" 
— valuable  as  are  such  opinions  coming  from  one  "right  in  the  midst  of  it" — I  can 
only  anticipate  the  views  developed  below,  that  scientific  verity  and  not  assumed 
expediencj'  is  the  ultimate  standard  by  which  fiscal  policy  even  in  war-time,  must 
be  appraised. 

^E.  L.  Bogart,  in  Political  Science  Qnarterhj,  March,  1920,  p.  160. 

^'Works  (ed.  McCulloch),  p.  288. 

'"Cf.  the  present  writer's  "Fiat  Credit  and  High  Prices"  in  New  York  Times, 
October  28,  1919;  also  "Federal  Reserve  Notes  and  High  Prices"  in  Magazine  of 
Wall  Street,  January,  1920. 


1922]  The  Economist's  Spiral  15 

The  Federal  Reserve  Board,  shorn  of  its  essential  power  to  control 
expansion  at  a  critical  stage,  thus  became  an  impotent  witness  to  an 
orgy  of  credit  and  currency  inflation,  which  the  belated  resort  to 
higher  discount  rates — literally  compelled  by  the  imminence  of  a 
threatened  gold  standard — was  able  to  correct  only  through  the  wastes 
and  losses  of  an  imperative  deflation. 

Free  supply  of  bank  credit  in  connection  with  our  borrowing  in  the 
period  of  belligerency  may  perhaps  be  explained — though  not  justified 
— by  the  exigencies  of  war.  But  not  even  this  plea  is  admissible  to  the 
resumption  of  such  policies  after  the  Armistice  and  the  continued 
maintenance  of  artifically  low  discount  rates.  Designed  originally  to 
facilitate  the  anticipation  of  war  loans  and  taxes,  the  preferential  dis- 
count rate  operated  during  the  war  as  an  instrumentality  for  "financ- 
ing by  bank  credit,"  After  the  war,  it  degenerated  into  a  device  for 
salvaging  the  "borrow  cheap"  entanglement  and  for  masking  the  exis- 
tence and  staving  off  the  maturity  of  a  huge  floating  debt. 

The  procedure  of  credit  issues  to  balance  current  budgets,  so  violent- 
ly reprobated  in  the  case  of  European  states,  continued  in  essence  our 
practice  during  the  post-Armstice  months.  Instead  of  using  both  fiat 
currency  and  fiat  credit  we  restricted  ourselves  to  the  more  insidious 
form.  The  demoralizing  efl'ect  of  the  two  methods  upon  the  social 
structure  has  differed  only  in  degree. 

Ill 

In  the  security  of  retrospect  it  is  tempting  to  indulge  in  counsel  of 
perfection.  The  din  has  quieted,  the  fever  subsided  and  practices  for 
which  precedent  was  lacking  and  occasion  was  imperative  are  likely 
to  be  estimated  in  the  wisdom  of  hindsight.  John  Bright  declared  of 
his  opponents :  "They  always  have  been  wrong ;  they  always  will  be 
wrong  and  when  they  cease  to  be  wrong  they  will  cease  to  be  the  Tory 
party."''  It  is  right  to  guard  against  this — to  forego  outright 
stricture  and  to  temper  absolute  valuation  by  relative  allowance.  But 
withal  there  must  be  just  weight  and  measure.  It  would  be  reckless  to 
assert  that  the  intricate  problems  of  our  war  economy  would  have  been 
fully  served  or  properly  solved  by  the  scientist  in  responsible  control. 
The  economist  will  not  wish  to  be  charged  with  Canning's  criticism  of 
Lord  Sidmouth:  "Carrying  into  politics  the  indefinable  air  of  a 
physician  inspecting  the  tongue  of  the  state."  There  is  always  the 
rare  statesman  like  Peel  who  "in  three  cases  out  of  four  knew  a  thing 
just  in  time,  after  it  was  known  to  the  philosophers,  before  it  was 

^'Alington,  Twenty  Years  (1921),  p.  22. 
^"Ibid.,  p.  32. 


16  Jacob  H,  Hollander  [March 

known  to  the  empirics.""  But  it  remains  certain  that  the  economist's 
grasp  of  the  immediate  subject-matter,  his  acquaintance  with  compar- 
able experience,  his  mental  habit  in  social  valuation  give  him  distinctive 
equipment  for  the  formative  service  which  was  denied  liim. 

Divested  of  the  opportunity  to  shape  economic  policies — partly 
through  his  own  inertia,  partly  through  political  neglect — the  role 
of  the  political  economist  becomes  that  of  a  constructive  critic.  Reso- 
lute against  the  negative  quibbling  of  the  embittered  faultfinder, 
watchful  against  the  soporific  emanations  of  the  throne — his  mission 
must  be  fearless,  unequivocal  assertion  of  the  verities  of  his  science,  as 
against  the  prejudice  of  the  moment,  the  pressure  of  class  interest,  or 
the  quietism  of  office. 

He  must  seek,  increasingly,  to  lay  bare  the  mistakes  that  have  been 
made  and  impute  them  to  the  proper  source,  whether  of  practices  or  of 
persons — this  in  no  vindictive  sense  but  in  order  that  there  may  be  a 
strict  assignment  of  responsibility,  to  the  end  of  abandoning  unsound 
practices,  of  devising  appropriate  remedial  measures  and  of  avoiding 
like  pitfalls  in  the  future. 

The  finest  traditions  of  his  past  enjoin  this :  It  is  the  call  of  Adam 
Smith,  inveighing  in  behalf  of  freedom  of  trade  against  "the  clamorous 
importunity  of  partial  interests."  It  is  the  summons  of  Malthus 
denouncing  the  poor  laws  of  England  as  a  set  "of  grating,  inconvenient 
and  tyrannical  laws."  It  is  the  insistence  of  Ricardo,  protesting 
against  the  misuse  of  the  sinking  fund.  It  is  the  acridity  of  John 
Stuart  IMill,  in  condemnation  of  the  inflationist  proposals  of  the  Bir- 
mingham currency  school. 

In  this  sense,  the  restraint  of  the  American  economist  in  the  war 
period  is  not  exhilarating:  a  record  of  substantial  practical  service 
in  many  directions,  rendered  with  fidelity,  devotion  and  efficienc}',  but 
service  essentially  contributory  and  acquiescent.  Of  that  resolute 
intractibility  against  scientific  error,  uncompromising  and  outspoken, 
which  must  distinguish  the  economist  as  sentinel  and  critic — there  is 
in  the  period  of  actual  belligerency  little  evidence. 

This  involves  no  charge  of  intellectual  cowardice.^"  In  the  cynicism 
of  world  collapse,  George  Brandes  has  lately  revived  an  epigram  im- 
puted to  Frederick  the  Great :  "I  begin  by  taking.  Then  I  always 
find  men  of  science  to  prove  the  justice  of  m^'  claim."  The  possibility 
is  peculiar  neither  to  time  nor  place.  There  is  danger  of  scholarship 
becoming  official  in  a  democrac}^  no  less  than  in  an  absolutism.  Public 
passion  cracks  as  sharp  a  whip  as  any  despot,  and  the  applause  of  the 

''Ibid.,  p.  194. 

"Cf.  the  prcsiMit  writer's  "Do  Government  Loans  Cause  Inflation?"  in  Annals 
(Philadelphia),  January,  1918. 


1922]  The  Economist's  Spiral  17 

market-place  is  as  grave  a  menace  to  independent  thought  as  the  favor 
of  the  throne. 

Of  these  things  the  American  economist  stands  absolved.  Less  clear 
is  the  extent  to  which  he  held  resolute  for  scientific  verity  as  against 
practical  compromise.  "The  function  of  science  is  to  expose  the  naked 
facts,"  a  recent  scholar  has  declared.  "It  is  for  politicians  to  decide 
how  to  resist  developments  which  are  judged  to  be  economically  unde- 
sirable."" In  the  economics  of  war,  governmental  policy  is  beset  by 
two  opposed  forces.  On  the  one  hand  is  opportunism  and  practi- 
cability :  opportunism  in  using  the  stress  of  war  need  to  accomplish 
ends  in  doubt ;  practicability  in  meeting  the  war  strain  with  least 
trouble  and  resistance.  On  the  other  hand  is  scientific  proof  and 
economic  law,  rugged  and  dure,  straight  and  narrow,  serving  the  public 
need  with  measures  conceived  solely  with  respect  to  the  social  calculus, 
and  hewing  to  this  line  even  with  struggle  in  making  and  difficulty  in 
carrying  out. 

Something  of  our  opportunity  here  was  surrendered  by  prematurity 
of  pronouncement ;  something  was  frittered  away  by  indulgence  in 
insecure  dicta.  In  the  main,  however,  it  is  true  that  the  war-time 
reserve  of  the  economist  proceeded  from  that  ready  assent  to  the 
policy  and  practices  of  authority  which,  in  time  of  great  national  peril, 
is  the  instinct  of  democracy.  At  a  time  when  "public  opinion  could 
largely  be  disregarded  because  public  assent  could  be  assumed,"  the 
economist  as  alert  scientist  was  submerged  in  the  economist  as  docile 
citizen. 

For  the  post- Armistice  period  there  is  a  different  story  to  tell.  The 
war  won,  the  economist  regained  his  poise.  Realizing  that  the  doc- 
trine of  practical  necessity  can  do  yeoman  service  in  defense  of  unsound 
war-time  policies,  but  that  it  may  not  be  as  securely  invoked  in  the 
calmer  years  that  follow ;  supplied  with  data  before  lacking  or  inacces- 
sible— he  became  vigilant  and  articulate. 

Analysis  established  the  clear  fact  that  the  United  States  had 
financed  the  war  and  its  aftermath  largely  by  reliance  upon  bank  credit. 
Inflation,  theretofore  "a  high-brow  fancy  of  the  professors" — to  be 
tolerantly  ignored  by  the  public,  to  be  summarily  dismissed  by  men 
of  affairs,  and  to  be  held  forth  bogey-fashion  as  a  warning  against 
non-adoption  of  official  policies — was  exposed  as  an  avoidable  evil  of 
our  post-war  economy,  contributing  to  high  prices,  business  profiteer- 
ing, speculative  excesses  and  social  disquiet.  The  Federal  Reserve 
Board's  belated  recourse  to  higher  discount  rates  in  correction  of  an 
overextended  credit  structure  was  indicted.  The  naive  assumption  of 
industrial  underproduction — dearly  beloved  of  financial  column  writers 
^'M.  Elsas,  in  Economic  Journal,  September,  1921,  p.  333. 


18  Jacob  H.  Hollander  [March 

— was  cut  olT  in  its  prime  by  definitive  statistical  exhibit.  The  obscu- 
rities of  the  Pittman  Silver  Purchase  act  were  illumined  and  the  con- 
sequences, actual  and  prospective,  of  that  remarkable  measure  ex- 
posed. The  importance  of  prompt  return  to  normal  distributive 
methods  and  ordinary  price  mechanism  was  emphasized — in  face  of 
strong  resistance.  The  penalties  of  emotionalism  in  governmental 
labor  policies  were  made  clear,  and,  at  the  same  time,  bar  put  to  the 
exploitation  of  trade  depression  in  behalf  of  anti-unionism.  Emphatic 
as  to  the  error  of  retaining  blunderbuss  war  taxes  in  a  peace-time 
economy,  there  was  insistence  that  the  ideals  of  fiscal  justice — confused 
by  the  shrill  chorus  of  the  market  place,  even  shaken  by  uncertain  tones 
from  our  own  spokesmen — must  determine  the  nation's  revenue  system. 
In  short,  the  economist  has  h!led  formal  caveat  against  recourse  to 
the  argument  of  assumed  expediency  and  momentary  opportunism  in 
defense  of  war  policies  which  are  theoretically  vulnerable.  He  has 
insisted  that  expediency  is  a  subjective  and  relative  term,  which  one 
man  regards  as  such  and  another  will  deny,  and  that  as  soon  as  we 
leave  the  safe  moorings  of  that  which  is  scientifically  sound — we  are 
adrift.  He  recalls  that  Secretary  Chase  doubtless  deemed  the  green- 
back unsound  "in  theory,"  but  justified  it  as  a  practical  expedient. 
So  too  Mr.  Bryan's  silver  proposals  and  a  hundred  dangerous  ventures 
with  which  we  have  from  time  to  time  been  tempted.  His  position  is, 
in  a  word,  that  for  an  administrator  to  engage  in  a  theoretically 
unsound  practice  and  to  defend  it  on  the  score  of  practical  necessity 
reduces  the  matter  to  a  rigid  calculus,  as  to  which — until  the  final  out- 
come— official  opinion  is  worth  as  much,  but  only  as  much,  as  that 
emanating  from  any  other  equally  competent  quarter. 

IV 

The  economist's  task  is  far  from,  done ;  but  it  enters  upon  a  new 
phase.  In  the  political  economy  of  war,  as  of  peace,  time  holds  the 
bank.  Whatever  the  lapse,  in  the  end  truth  comes  into  its  own.  Too 
late  to  change  the  outcome,  all  the  more  is  the  true  prophet  acclaimed. 
The  clear  errors,  even  the  hard  reactions  of  mistaken  war  and  post-war 
policies  have  begun  to  appear.  Much  more,  perhaps,  awaits.  With 
tlie  disclosure  must  come — unless  all  signs  fail — a  wider  interest  in 
t'ooiiomic  study,  a  tremendous  gain  in  the  scientist's  repute.  The 
})rophet  as  seer  ma}'  be  without  honor;  but  not  the  prophet  as  victor. 
The  market  place,  smarting  in  its  hurt,  is  quick  to  magnify  the  virtue 
of  liim  whose  neglected  counsel,  it  comes  to  appear,  might  have  softened, 
perhaps  warded  off,  the  blow. 

More  tlian  once,  economic  experience  has  developed  the  inconvenient 


1922]  The  Economist's  Spiral  19 

habit  of  exalting  the  horn  of  "the  professors,"  and  of  vindicating 
scientific  opinion  as  against  economic  opportunism.  But  this  time  the 
issues  have  been  larger,  the  alternatives  sharper,  the  penalties  costlier. 
It  will  be  surprising  if  the  rebound  is  not  greater. 

Political  economy  reached  its  hej^day  in  the  decade  following  the 
Napoleonic  struggle.  It  did  so  because  great  economic  and  social 
problems — the  dislocation  of  world  upheaval — pressed  imperatively 
for  settlement  upon  a  world  disillusioned  by  bitter  experience  as  to  the 
wisdom  of  its  practical  men,  and  expectant  in  the  light  of  justified 
forecast  as  to  the  reasoning  of  its  economic  thinkers.  Public  opinion 
became  sensible  as  never  before  that  the  principle  of  general 
causation  figured  in  the  business  of  getting  a  living;  that  times 
were  bad  not  merely  by  chance;  that  high  prices,  falling  ex- 
changes, agricultural  distress,  industrial  unemployment,  burdensome 
taxes,  resulted  from  the  pursuit  or  from  the  neglect  of  positive  policies ; 
that  a  group  of  inoffensive  tractarians,  then  barely  beginning  to  call 
themselves  "political  economists,"  had  given  specialized  study  to  such 
matters  and  had  time  and  again  sounded  warning  note,  and  that  there- 
fore it  might  be  a  prudent  thing  to  learn  what  this  was  about  and  to 
pay  some  greater  regard  to  the  spokesmen. 

So,  too,  in  the  later  aftermath  of  another  cataclysm  the  world 
stands,  irresolute  and  hesitant  perhaps,  but  none  the  less  receptive 
for  economic  counsel.  The  public  mind  is  in  scapegoat-making  mood 
— and  the  empiricist  is  its  sin-offering.  As  false  priests  are  expelled 
from  the  temple,  new  ones'  will  be  installed.  Tested  as  acolyte,  the 
economist  awaits  induction. 


Uninfluential  in  formative  policy,  uncompromising  as  scientific  pro- 
tcstant,  vindicated  by  outright  event,  to  be  acclaimed  as  guide  and 
prophet — the  spiral  holds.  One  final  phase  remains — relapse  into 
formalism.  Will  the  parallelism  obtain  even  here?  Shall  we  be  wit- 
nesses to,  even  participants  in,  another  classical  political  economy — 
with  all  the  excesses  that  the  term  implies? 

The  answer  turns  upon  the  degree  to  which  conscious  purpose  will 
deflect  the  normal  trend.  If  the  economist,  heady  with  larger  place, 
foregoes  his  birthright — the  horoscope  is  cast.  Larger  practical  in- 
fluence, wider  popular  interest,  artificial  rigidity  of  utterance,  relapse 
into  paradox-like  dicta,  proneness  to  definite  forecast,  intentness  upon 
doctrinal  vindication,  dullness  to  new  evidence — these,  as  a  century 
before,  will  be  the  stages  in  his  undoing.     From  class  advocacy  in  its 


20  Jacob  H.  Hollander  [March 

vulgar  sense  he  will  be  saved ;  from  the  more  subtle  contagion  of  post- 
war reaction  he  will  not  be  immune. 

But  this  need  not  be  so.  If  the  economist,  tutored  by  his  past, 
maintain  his  full  scientific  stature,  toiling  laboriously  in  the  assembly 
of  data,  formulating  trial  hypotheses  with  caution,  abstaining  relig- 
iously from  armchair  theorizing,  subjecting  tentative  uniformatives 
to  rigid  verification,  fearless  in  the  knowledge  that  is  power — he  will 
preserve  his  scientific  vantage  with  widening  range  and  profounder 
impress.  By  the  sheer  virtue  of  his  scholarship,  will  he  prevail  upon 
alTairs. 

Jacob  H.  Hollander. 

Johns  Hopkins  University. 


THE  STATE  OF  OUR  NATIONAL  FINANCES' 

In  considering  the  state  of  our  finances,  we  must  be  continually 
mindful  of  the  interaction  between  fiscal  and  financial  affairs,  that  is, 
between  public  and  private  finance.  The  relation  is  reciprocal.  Obvi- 
ously, governmental  finance  is  always  profoundly  affected  by  the 
general  economic  situation.  Oscillations  of  the  economic  pendulum 
from  good  to  bad  times,  from  prosperity  to  adversity,  inevitably  exert 
an  influence  upon  public  revenues  and  budgetary  conditions.  Govern- 
ment revenues  must  always  stand  in  a  certain  relation  to  the  social 
income,  and  any  expansion  or  curtailment  of  the  latter  is  at  once 
reflected  in  corresponding  fluctuations  of  the  former.  There  is  also 
an  intimate  relation  in  the  opposite  sense.  Just  as  economic  theory, 
while  at  bottom  an  expression  of  the  facts  of  the  economic  environment, 
often  succeeds  in  setting  in  motion  a  train  of  thought  which  molds 
the  attitude  of  men  to  economic  phenomena  and  thus  helps  in  a  certain 
measure  to  alter  them,  so  the  fiscal  activity  of  government  may  make 
or  mar  the  canvas  upon  which  the  economic  activity  of  the  people 
puts  the  pigments  and  the  broad  touches  of  business  life.  While,  then, 
we  are  to  address  ourselves  primarily  to  the  public  phase  of  the  subject, 
this  mutual  interrelation  justifies  dwelling,  for  a  moment  at  least,  upon 
the  private  phase. 

In  adverting,  by  way  of  introduction,  to  this  aspect  of  the  problem, 
we  are  struck  by  two  commanding  facts.  The  one  is  that  we  are 
living  through  a  period  of  deflation,  the  other  is  our  credit  situation. 
A  word  as  to  each  of  these.  One  of  the  most  hopeful  signs  on  the 
horizon  is  the  growing  recognition  by  the  community  at  large  of  the 
existence,  so  long  familiar  to  the  student,  of  the  business  cycle;  of 
these  alternate  periods  of  vivid  anticipations  and  shattered  hopes  that 
we  associate  with  the  crest  and  the  trough  of  the  billowy  ocean  of 
economic  life.  Whatever  be  the  explanation  of  high  wages  and  ex- 
aggerated profits  as  contrasted  with  the  prevalent  unemployment  and 
business  losses — whether  or  not  we  are  to  agree  with  Jevons  of  a 
former  generation  and  with  my  valued  colleague,  Henry  L.  Moore,  at 
present,  in  seeking  the  reason  proximately  in  variations  of  agricul- 
tural production  or  more  fundamentally  in  meteorological  and  astro- 
nomical facts — it  remains  none  the  less  true  that  since  these  dynamic 
changes  reflect  themselves  in  social  conditions,  they  are  susceptible, 
within  a  certain  measure  at  least,  of  social  control.  Civilization  itself 
consists  of  the  successful  endeavor  to  enchain  the  forces  of  nature: 
within  broad,  even  though  obvious,  limits  progress  results  from  control 

^This  paper  was  read  at  the  Thirty-fourth  Annual  Meeting  of  the  American 
Economic  Association  held  in  Pittsburgh,  December  28,  1921. 


22  Edwin  R.  A.  Seligman  [March 

and  intelligent  guidance  of  natural  forces.  The  most  encouraging 
aspect  of  the  President's  Conference  on  Unemployment  was  a  recogni- 
tion of  the  fact  that  there  is  here  a  problem  worthy  of  study  and 
susceptible  of  possible  solution  in  the  future. 

The  gravity  of  our  present  economic  situation  is,  however,  accen- 
tuated by  the  fact  that  in  addition  to  the  cyclical  movement  we  are 
living  in  the  aftermath  of  the  most  gigantic  world  conflict  ever  known. 
To  put  a  familiar  situation  in  economic  terms,  we  may  say  that  the 
recent  conflict  marks  for  the  first  time  in  history  the  application  to 
war  conditions  of  a  situation  hitherto  familiar  only  in  peace.  The 
factory  system,  as  a  result  of  the  industrial  revolution,  has  for  some 
decades  dominated  normal  economic  life:  now  for  the  first  time  the 
factory  system  has  become  a  characteristic  of  the  abnormal  condition 
that  we  call  war.  The  consequence  has  been  that  instead  of  the 
militia  or  mercenaries  of  former  days,  the  entire  nation  has  been  drawn 
into  the  operations  of  war,  either  at  the  front  or  behind  the  lines  at 
home.  In  the  second  place,  the  substitution  of  the  unproductive  con- 
sumption of  war  for  the  normal  surplus  of  productive  consumption  in 
peace  has  proceeded  at  such  a  terrific  pace  as  to  trench  seriously 
upon  the  social  capital  and  the  social  income — to  such  an  extent,  even, 
as  almost  to  imperil  the  structure  of  civilization.  Putting  it  in  finan- 
cial terms,  it  has  meant  such  an  inflation  and  such  a  prodigious  rise 
in  the  price  level,  with  the  familiar  concomitants  of  irredeemable  or 
inconvertible  paper  money,  as  even  to  transcend  the  ravages  of  the 
continental  currency  in  the  American  Revolution  and  the  effects  of  the 
assignats  in  France. 

The  evils  of  such  a  situation  have  been  recently  depicted  in  a  passage 
which  I  venture  to  quote: 

The  prosperity,  we  have  said,  is  illusory.  With  the  rapid  rise  of  prices, 
those  who  have  no  commodities  to  dispose  of  suffer  severely.  The  creditor 
is  in  an  unhappy  position  and  the  recipients  of  fixed  incomes  are  compelled 
to  resort  to  all  manner  of  unworthy  expedients  in  order  to  make  both  ends 
meet.  The  continual  fluctuations  of  price  introduce  an  uncertainty  in 
business  which  is  only  temporarily  masked  by  the  advance.  The  oppor- 
tunities of  a  sellers'  market  irresistibly  lead  to  profiteering  and  its  attendant 
evils.  The  sudden  increase  of  the  paper  income  produces  private  extrav- 
agance and  public  prodigality.  The  exaggerated  rise  of  wages,  coupled 
with  the  unceasing  demand  for  labor,  engenders  a  demoralization  which 
soon  returns  to  plague  the  industry.  The  habits  of  thrift,  painfully  built  up 
during  a  lifetime,  are  abruptly  discarded.  The  kaleidoscopic  mutations  of 
paper  fortunes,  amassed  almost  over  night,  beget  a  spirit  of  speculation  and 
of  peculation.  The  feverish  activity  of  the  market  destroys  the  habits  of 
orderliness  and  sobriety,  and  the  brilliant  prospects  of  suddenly  acquired 
wealth  create  in  the  public  a  delirium  of  improvidence  and  the  sense  of 
living  in  a  veritable  golden  age. 


1922]  The  State  of  Our  National  Finances  23 

The  day  of  reckoning,  however,  soon  follows.  When  the  wave  rises  to  a 
crest,  it  breaks  with  an  overwhelming  force;  when  the  fever  subsides,  the 
resulting  weakness  is  intense.  As  the  paper  finally  loses  its  value,  fortunes 
are  now  suddenly  wiped  out,  and  many  of  the  supposedly  wealthy  find 
themselves  beggared.  With  the  collapse  of  demand,  unsalable  stocks  deplete 
the  business  inventory  and  failures  are  the  order  of  the  day.  Those  who 
have  habituated  themselves  to  an  extravagant  mode  of  life  are  faced 
with  the  grim  necessity  of  immediate  retrenchment.  The  laborer  resists 
to  the  uttermost  any  lowering  of  his  wages,  however  necessary  it  may  be  to 
the  reestablishment  of  the  new  equilibrium.  The  government  finds  itself 
embarrassed  by  the  drying  up  of  the  sources  of  its  revenue.  The  prudent 
and  the  patriotic,  who  have  undergone  sacrifices  in  order  to  invest  in 
government  paper,  suffer  for  their  patriotism.  The  splendors  of  the  former 
prospects  are  now  seen  to  have  been  only  a  mirage.  The  golden  age  of 
inflation  turns   out  to   have  been  after   all  nothing  but   a  gilt-paper   age." 

That  we  have  been  in  a  measure  exempt  from  these  deplorable  con- 
sequences is  due  in  part  to  the  fact  that  we  were  so  late  in  joining  the 
fray.  Toward  the  end  of  the  conflict,  however,  our  expenditures 
were  so  much  greater  than  those  of  any  other  belligerent  that  even  a 
short  continuance  of  the  war  would  have  brought  us,  like  our  Allies, 
to  the  very  brink  of  ruin. 

The  second  favorable  factor  in  the  situation  consists  of  the  condi- 
tions of  credit  to  which  reference  has  been  made  above.  When  the 
economic  history  of  the  Great  War  comes  to  be  written,  it  will  be  real- 
ized that  we  were  saved  primarily  by  two  fortuitous  occurrences.  The 
one  was  the  passage  of  the  sixteenth  amendment  without  which  we 
should  have  been  unable  adequately  to  tap  the  abundant  streams  of 
social  income.  The  second  was  the  enactment  of  the  Federal  Reserve  law 
which  enabled  us  to  utilize  new  and  most  elastic  possibilities  of  a 
gigantic  expansion  of  credit  with  only  a  moderate  degree  of  inflation 
and  without  recourse,  as  in  every  other  country,  to  what  was  virtually 
fiat  money.  Our  escape  is  due  in  large  measure  to  the  farsightedness 
of  Mr.  Paul  M.  Warburg,  whose  brain  first  conceived,  and  whose 
untiring  efforts  helped  to  achieve,  the  system  upon  which  our  modern 
credit  life  rests.  To  the  student  of  financial  science,  the  name  of 
Warburg  will  be  linked  with  that  of  Lord  Overstone  in  the  annals  of 
banking  reform. 

But  while  so  much  was  accomplished  during  the  war  by  the  existence 
of  a  combined  or  united  reserve,  the  recent  experience  of  both  inflation 
and  deflation  discloses  the  desirability  of  a  second  reform  in  our  system, 
almost  as  imperative  as  the  first.  Most  of  the  attentive  students  of 
the  problem  have  been  aware  of  the  fact  that  perhaps  the  most  im- 

^Edwin  R.  A.  Seligman,  Currency  Inflation  and  Public  Debts  (New  York,  1921), 
pp.  59-60. 


24  Edwin  R.  A.  Seligman  [March 

portant  contributing  element  in  the  upward  speculative  movement  of  a 
boom  period  is  not  alone  the  assistance,  but  the  additional  impulse, 
coming  from  the  banks.  While  no  one  can  read  the  illuminating  testi- 
mony of  Governor  Strong  of  the  Federal  Reserve  Bank  of  New  York, 
before  the  recent  Joint  Commission  of  Agricultural  Inquiry,  without 
realizing  the  remarkable  accomplishments  of  that  particular  institu- 
tion, it  remains  none  the  less  true  that  under  actual  conditions  our 
banks  as  a  whole  often  expand  credit  when  they  ought  to  restrict, 
and  restrict  credit  when  they  ought  to  expand.  The  reason  for  this 
credit  inflation  when  nearing  the  crest  of  a  boom  period  is  to  be 
sought  largely  in  a  continuance  of  the  competitive  conditions  among 
our  thirty  thousand  American  banks.  What  we  need  more  than  any- 
thing else  in  this  countr}^  at  present  is  a  campaign  of  education  de- 
signed to  familiarize  the  public  with  the  desirability  of  branch  banking, 
whereby  the  multiplicity  of  competitive  institutions  may  be  converted 
into  a  chain  of  cooperative  banks  working  together  rather  than  at 
cross-purposes,  and  affording  the  business  community  equal  facilities 
in  normal  times  and  a  greater  protection  in  abnormal  times.  Despite 
the  deep-seated  feeling  of  opposition  to  branch  banking  which  is  still 
mistakenly  entertained  b}^  our  local  financiers,  I  venture  to  aflSrm  that 
the  substitution  of  cooperation  for  exaggerated  competition  in  credit 
is  second  in  importance  only  to  the  substitution  of  united  for  scattered 
reserves  that  has  been  brought  about  by  the  federal  reserve  system. 

II 

In  considering  the  present  situation  of  our  public  finances,  we  cannot 
avert  a  glance  from  the  immediate  past.  While  the  war  finance  policy 
of  the  United  States  has  naturally  engendered  not  a  little  criticism, 
and  has  in  turn  evoked  a  defense  on  the  part  of  our  former  government 
officials,  it  may  be  said  that  on  the  whole  we  passed  through  those 
trying  years  with  a  minimum  of  avoidable  discomfort  and  with  a  record 
of  official  intelligence  and  foresight  which  is  in  marked  contrast  to  the 
ineptitude  of  the  programs  of  our  previous  war  periods,  such  as  the 
War  of  1812  and  the  Civil  War.  There  are  only  two  points — albeit 
important  ones — in  which  serious  errors  were  committed ;  and  we 
can  defend  ourselves  against  the  charge  of  hindsight,  rather  than 
foresight,  because  in  both  these  respects  we  had  the  privilege  of  warn- 
ing the  Secretary  of  the  Treasury  and  the  Senate  Finance  Committee 
at  the  time. 

The  first  point  was  the  refusal  of  the  government  to  listen  to  any 
suggestion  to  pay  the  market  rate  of  interest  on  the  government  loans, 
as  was  done  abroad.     The  natural  result  was  not  only  to  affix  to  the 


1922]  The  State  of  Our  National  Finances  25 

loans  the  character,  in  part  at  least,  of  a  compulsory  contribution, 
but — what  is  much  more  serious — to  depend  so  largely  upon  the  banks, 
as  well  as  upon  the  issue  of  the  temporary  loan  certificates,  as  seriously 
to  accentuate  the  evils  of  inflation.  The  second  point  was  to  rely  to 
such  an  exaggerated  extent  upon  taxes  on  wealth  rather  than  in  part 
upon  taxes  on  consumption,  as  to  incur  two  evils.  One  of  these  was  the 
failure  to  bring  about  an  adequate  restriction  of  social  consumption — a 
failure  which,  had  the  war  continued,  would  have  inevitably  meant  the 
adoption  of  the  rationing  system.  The  other  error,  of  a  double 
character,  was  in  connection  with  the  income  and  profits  taxes.  In  the 
income  tax  there  was  fastened  upon  us  the  policy  of  tax  exemption  which 
is  returning  to  plague  us  at  present.  And,  on  the  other  hand,  the 
excess-profits  tax,  however  defensible  in  principle  as  a  method  of  tap- 
ping war  gains,  was  so  arranged  as  not  only  to  create  the  greatest 
inequalities  at  the  very  beginning,  but  to  prove  an  unendurable  burden 
as  soon  as  the  war  was  over.  These  points  were  fully  explained  in  the 
report  of  the  war  finance  committee  of  this  Association,  of  which  I  had 
the  honor  to  be  chairman ;  and  they  had  already  been  intimated,  long 
before  that  report,  to  the  responsible  authors  of  our  war  finance  policy. 
Our  skirts,  at  least,  are  clear. 

What  we  are  concerned  with,  however,  is  not  so  much  the  past  as 
the  present  and  the  future.  From  this  point  of  view,  let  us  consider 
first  the  expenditure  side  of  our  balance  sheet,  present  and  prospective, 
and  then  the  revenue  side.  The  first  point  on  the  expenditure  side 
is  the  evident  necessity  of  cutting  down  the  total  outlay  of  the 
government.  When  expenditures  rise  from  a  pre-war  level  of  about 
one  billion  to  a  post-war  level  of  over  four  billions,  the  need  of  re- 
trenchment, even  after  making  allowance  for  the  change  in  the  value 
of  money,  is  self-evident.  Two  plans  have  indeed  recently  been  sug- 
gested which  will  in  some  degree  remedy  the  situation :  the  one  is  the 
proposed  reduction  in  our  naval  armament,  the  other  is  the  adoption 
of  the  new  budgetary  system.  But  even  these  are  by  no  means 
adequate;  they  must  be  followed  by  other  measures  which  will  secure 
economy  without  sacrificing  efficienc3\ 

Of  these  problems,  the  most  immediate,  and  by  no  means  the  least 
unimportant,  is  the  debt  problem.  Here  we  are  faced  with  the  huge  item 
of  well  over  one  and  a  quarter  billion  dollars  for  the  annual  contribution 
to  interest  charges  and  amortization.  As  to  the  interest  charges,  there 
can  of  course  be  no  question.  But  the  plan  of  a  compulsory  sinking 
fund,  of  such  a  magnitude  as  that  upon  which  we  have  entered,  is  of 
more  doubtful  expediency.  It  goes  without  saying  that  the  payment 
of  a  debt  is  on  general  principles  highly  desirable ;  and  it  is  also  true 
that  the  best  time  to  start  the  payment  of  a  war  debt  is  during  the 


26  Edwin  R.  A.  Seligman  [March 

period  of  comparatively  high  prices,  when  the  final  deflation  has  not 
jet  occurred.  Where  the  public  debts,  however,  aggregate  such  gigantic 
figures  as  at  present,  the  ultimate  question  is  always  as  to  the  com- 
parative effects  of  the  pressure  of  taxation  required  to  meet  these  pay- 
ments. Where,  as  at  present,  the  burdens  of  an  excessive  war  taxa- 
tion are  still  so  serious  as  to  impair  the  replenishment  and  the  increase 
of  the  social  capital,  the  question  arises  whether  it  would  not  be 
desirable  to  introduce  more  elasticity  into  the  process  of  debt  payment. 
It  is  familiar  that  the  compulsory  sinking  fund  instituted  in  the  Civil 
War  was  soon  disregarded  by  the  authorities  and  that  the  reduction 
of  the  debt  proceeded  on  different  principles,  comparatively  small 
amounts  being  paid  while  the  pressure  of  taxation  was  great  and  cor- 
respondingly larger  amounts — far  more  than  was  required  by  the  com- 
pulsory sinking  fund  provision — when,  despite  the  lighter  pressure  of 
taxation,  the  revenue  became  more  abundant.  In  other  words,  a  sound 
debt-payment  policy  will  compare  the  advantages  of  a  rapid  diminution 
of  the  debt  burden  with  the  corresponding  advantages  of  a  rapid 
decrease  of  the  tax  burden,  and  with  the  possibility  of  adjusting  the 
tax  system  to  fundamental  principles.  We  may  indeed  not  be  com- 
pelled to  resort  to  the  shifts  to  which  Great  Britain  finds  herself 
reduced  this  ^^ear — that  of  borrowing  money  in  order  to  keep  up  the 
sinking  fund — for  there  is  scarcely  anything  more  absurd  than  that ; 
but  we  may  see  ourselves  exposed  to  the  hazard  of  retaining  undesirable 
forms  or  rates  of  taxation  in  order  to  carry  out  the  provisions  of  a 
law  which  ought  not  to  have  been  put  in  so  rigid  a  form.  A  successful 
■debt-payment  program  should  possess  the  quality  of  elasticity,  rather 
than  rigidity. 

The  second  problem  of  immediate  importance  is  that  of  the  Allied 
indebtedness.  Perhaps  in  no  part  of  the  entire  subject  is  there  more 
need  of  clear  thinking  and  of  public  enlightenment.  This  is  true  on 
both  the  ethical  and  the  economic  phases  of  the  subject.  I  have  little 
patience  with  those —  undoubtedly  still  a  majority  in  this  country — 
who  consider  it  a  just  debt.  For,  after  all,  what  is  the  real  situation? 
There  is  indeed  much  to  be  said  for  the  plan  followed,  both  by  Great 
Britain  and  by  ourselves,  in  putting  our  assistance  to  the  Allies  in  the 
form  of  loans  rather  than  of  gratituities.  For  the  plan  of  making 
free  gifts  to  the  Allies,  permitting  them  to  spend  the  funds  as  they 
liked,  would  have  involved  a  serious  risk  of  extravagance  and  waste, 
as  exemplified  in  the  scandals  of  the  Russo-Japanese  War.  A  loan,  on 
the  other  hand,  would  not  only  permit  of  more  control  on  the  part  of 
the  lender,  but  would  superinduce  more  care  on  the  part  of  the  bor- 
rower.    We  arc  always  more  careful  in  spending  our  own  money  than 


1922]  The  State  of  Our  Xational  Finances  27 

that  of  some  one  else.  The  policy  of  loans  rather  than  gifts  undoubt- 
edly contributed  to  a  more  effective  prosecution  of  the  war. 

Much  the  same  may  be  said  of  the  second  element  in  the  inter- 
Allied  financial  policy  of  the  war — the  principle,  namely,  that  each 
nation  should  be  charged  with  the  expenses  incurred  in  behalf  of  its 
own  citizens,  no  matter  when  or  where  incurred.  In  virtue  of  this 
principle,  we  paid  Great  Britain  for  the  transport  of  our  troops  and 
reimbursed  France  for  the  cost  of  the  To's  which  were  so  desperately 
needed  by  our  troops.  Any  other  plan  would  have  led  to  confusion, 
to  prodigality,  and  to  interminable  disputes.  Only  by  making  each 
nation  responsible  for  the  cost  of  its  own  forces  could  we  have  hoped  to 
secure  even  a  measurable  degree  of  economy. 

It  can,  however,  not  be  too  strongly  emphasized  that  these  were 
matters  of  expediency,  calculated  to  achieve  the  greatest  efficiency 
in  the  conduct  of  the  war.  From  the  point  of  view  of  justice,  they 
cannot  be  defended  for  a  moment.  It  is,  in  fact,  exceedingly  doubtful 
whether  it  was  ever  expected  at  the  time  that  the  loans  would  be  repaid. 
At  all  events,  this  is  true  of  the  loans  made  by  Great  Britain  to  her 
Allies.  If  the  war  was  a  joint  enterprise,  carried  on  for  a  common 
purpose,  there  is  as  little  reason  to  separate  the  financial  contribution 
as  the  human  contribution.  When  we  finally  put  our  army  under 
the  orders  of  Foch,  we  fused  our  efforts  with  those  of  our  Allies  and 
gave  an  indelible  stamp  to  our  common  efforts.  If  we  are  to  charge 
France  and  Italy  for  the  wheat  that  kept  their  forces  alive,  for  the 
uniforms  that  kept  their  soldiers  warm,  we  might  as  well  charge  them 
so  much  per  man  of  the  American  army.  Do  we  desire  to  put  ourselves 
on  the  level  of  the  Hessian  rulers  who  supplied  Great  Britain  with  the 
mercenaries  during  our  Revolution.^ 

What  actually  happened  was  that  the  Allies  furnished  a  huge  armed 
force  which  only  with  difficulty  withstood  the  onset  of  the  enemy.  In 
this  huge  force  the  human  element  was  represented  primarily  by  France 
and  Italy;  the  materials  were  furnished  largely  by  Great  Britain; 
and  the  food  was  contributed  chiefly  by  the  United  States,  All  three 
elements  were  indispensable  to  the  wininng  of  the  war;  the  absence  of 
any  of  them  would  have  spelled  disaster.  The  mere  fact  that  our  chief 
contribution  was  rendered  in  the  shape  of  book  credits  must  not  be 
permitted  to  obscure  the  facts.  As  Mr.  Trauton  says  in  the  article 
designed  to  show  the  impolicy  of  the  attempt  on  the  part  of  Great 
Britain  to  collect  the  debts  owing  to  it  by  the  Allies  :^  "Now  that  the 
conflict  is  over,  one  section  of  the  group  should  not  attempt  to  transfer 
part  of  the  burden  of  the  war  already  borne  by  it  to  another  section 
which   has    already    borne    a    greater    burden.      Those    sections    which 

^The  Economic  Journal,  March,  1921,  p.  43. 


28  Edwin  R.  A.  Seligman  [March 

have  suffered  least  from  the  devastation  and  the  loss  of  life  entailed  by 
the  war  should,  if  anything,  bear  a  correspondingly  greater  proportion 
of  the  financial  burden  than  that  borne  by  those  crippled  by  the  loss 
of  many  lives.  Yet,  should  pajnnent  of  inter-Allied  debts  be  exacted, 
the  ver}^  reverse  would  be  the  case." 

And,  as  he  says  in  another  passage :  "It  would  be  almost  impossible 
to  elaborate  a  scheme  which  would  distribute  the  burden  of  the  war 
equitably  among  the  Allies.  But  undoubtedly  the  most  unjust  way 
imaginable  would  be  for  the  present  creditors  to  extort  payment  of 
their  debts  from  the  present  debtors." 

To  this  consideration,  which  applies  to  Great  Britain  as  well  as  to 
ourselves — for  Great  Britain  loaned  to  the  Allies  about  as  much  as  she 
borrowed  from  us — there  is  a  further  consideration  which  is  peculiar 
to  the  United  States. 

It  is  true  that  we  entered  the  contest  with  clean  hands  and  with 
clean  hearts :  we  poured  out  lavishly  our  treasures  and  the  lives  of  our 
soldiers ;  we  had  nothing  material  to  gain  from  victory ;  and  we 
sedulously  refrained  from  even  advancing  any  claim  to  a  division  of 
the  spoils.  So  far,  so  good.  But  consider  the  other  side  for  a  moment. 
How  are  we  to  explain  the  almost  simultaneous  appearance  of  war- 
profits  taxes  in  every  country  if  not  on  the  ground  of  conviction  that 
it  is  illicit  for  an  individual  to  make  profits  out  of  the  blood  and  misery 
of  his  fellow  countrymen  in  so  fearful  a  crisis.  But  if  it  is  indefensible 
for  a  private  individual  to  retain  all,  or  even  a  large  part  of,  such 
profits,  why  is  not  the  same  rule  applicable  to  a  nation?  What  moral 
right  have  we  to  retain  the  profits  that  have  been  gained  indeed,  but 
not  really  earned,  in  such  a  warfare.^ 

The  revolution  which  converted  us  from  a  debtor  to  a  creditor 
nation,  and  which  made  us  at  a  blow  the  economic  arbiter  of  the  world, 
is  due  to  the  fact  that  for  two  and  one  half  years  Ave  made  these 
enormous  profits.  Had  Ave  been  in  the  Avar  from  the  beginning,  Ave  also 
should  now  have  been  hovering  on  the  brink  of  bankruptcy:  instead 
of  being  able  to  count  the  ten  billions  as  assets,  our  government  Avould 
probably  have  been  in  a  position  of  oAving  ten  times  ten  billions,  as  our 
share  of  the  cost  of  the  Avar. 

And  noAv,  after  having  escaped  all  these  dangers,  after  having  made 
untold  billions  of  profits  out  of  the  contest,  after  haA'ing  emerged  as 
the  real  beneficiary  of  the  Avar,  Ave  have  the  hardihood  to  say  that  our 
relatively  insignificant  cash  contribution,  all  of  AA'hich,  incidentally, 
Avas  expended  in  this  country  and  Avent  to  enrich  our  people,  constitutes 
a  debt  which  Ave  have  the  moral  right  to  exact  from  those  who  fought 
by  our  side  and  Avho  suffered  for  the  common  cause — that  is,  for  our 
cause — sacrifices  incalculably  greater  than  our  own ! 


1922]  The  State  of  Our  National  Finances  29 

No — even  Mr.  Vanderlip  is  wrong:  the  Allied  debt  is  not  a  just  debt, 
if  we  interpret  justice  in  the  onl}-  legitimate  sense  of  the  term.  We 
advanced  the  money,  indeed,  in  the  form  of  loan,  and  legally  our  posi- 
tion is  impregnable.  What  we  actually  did,  however,  was  to  defray 
our  share  of  a  common  burden  which,  if  it  were  to  be  adjusted  on  a 
truly  equitable  basis,  would  make  us  not  the  creditor  but  the  debtor 
of  the  Allied  group.  To  insist  now  on  our  pound  of  flesh  is  to  take 
the  part  of  a  Shylock,  not  of  a  high-minded  partner  in  a  joint  and 
common  enterprise.  The  Allied  debt  is  not  a  just  debt ;  and  the  sooner 
that  this  is  realized  by  our  people,  wearied  by  the  bickerings  of  the 
European  nations  and  still  confused  by  the  acerbities  of  the  recent 
presidential  campaign,  the  better  for  all  concerned. 

Even,  however,  if  the  Allied  debt  were  a  just  debt,  the  economic 
consequences  of  insisting  upon  the  payment  would  be  disastrous,  not 
alone  to  our  Allies,  but  more  especially  to  us.  For  how  can  the  debt, 
or  the  interest  on  the  debt,  be  paid?  Even  if  the  Europeans  had  the 
gold  with  which  to  discharge  the  debt,  the  only  result  of  an  influx 
of  coin  would  be  to  start  us  again  on  that  period  of  currency  and 
credit  inflation  which  would  soon  create  its  own  nemesis  in  a  gigantic 
disaster.  If  the  debts  cannot  be  paid  in  gold,  they  will  have  to  be 
paid  in  goods.  How  absurd,  however,  in  a  period  when  we  are  strain- 
ing every  nerve  again  to  set  the  wheels  of  industry  revolving,  to  create 
a  situation  which  will  destroy  our  foreign  market,  whether  for  raw 
materials  or  for  finished  products !  In  a  normal  situation,  imports 
are  paid  for  by  exports  and  trade  is  mutually  profitable.  But  where 
goods  are  imported  as  a  payment  for  some  past  indebtedness,  they 
do  not  and  cannot  create  any  demand  for  exports  in  return. 

Let  us  take  a  leaf  out  of  the  experience  of  Great  Britain.  The 
British  government  thought  that  it  was  acting  shrewdly  in  compelling 
Germany  two  or  three  years  ago  to  hand  over  virtually  its  entire 
mercantile  marine.  This  immense  increase  of  tonnage,  however,  had 
two  unexpected  results :  freight  rates  fell  so  abruptly  as  to  convert 
the  profits  of  the  shipping  companies  into  great  losses,  as  well  as  to 
bring  the  shipbuilding  industry  to  a  standstill,  with  consequent  un- 
employment on  a  huge  scale.  Analogous  results  ensued  when  France 
insisted  upon  the  coal  payment  in  kind  from  Germany.  In  proportion 
as  the  surplus  of  coal  was  sold  by  France  to  Italy  and  other  countries, 
it  destroyed  the  British  market  to  such  an  extent  as  to  produce  the 
coal  strike  and  the  prodigious  losses  which  ensued. 

Let  us  look  the  facts  squarely  in  the  face.  The  Allied  indebtedness 
is  primarily  that  of  France,  of  Italy,  and  of  the  other  countries  that 
are  in  an  even  more  parlous  condition.  For  while  Great  Britain  owes 
us  almost  a  half  of  the  debt,  that  amount  is  more  than  covered  by  the 


30  Edwin  R.  A.  Seligman  [March 

sums  owing  to  Great  Britain  from  France,  Italy  and  the  other  AUies. 
A  general  remission  of  war  indebtedness,  therefore,  will  not  particularly 
help  Great  Britain,  except  to  the  extent  that  a  doubtful  asset  is  wiped 
out  to  counterbalance  a  very  certain  liability. 

Whether  it  may  be  desirable  to  accept  Mr.  Vanderhp's  solution  and 
to  induce  the  foreign  countries  to  devote  their  indebtedness  to  pro- 
ductive purposes,  is  a  question.  For  where  these  countries  continue 
to  remain  in  the  slough  of  despond,  there  is  not  much  use  in  asking 
them  to  devote  to  such  purposes  sums  which  are  not  in  existence.  Let 
us  not  try  to  sugarcoat  the  pill;  let  us  recognize  frankly  and  spread 
it  broadcast,  that  for  us  to  insist  on  the  payment  of  the  debt,  at  all 
events  in  any  immediate  future,  is  to  cast  a  boomerang  which  will 
injure  us  far  more  than  our  debtors.  Let  us  inaugurate  a  campaign 
of  education  to  explain  to  the  American  people  what  is  the  real 
economic  situation.  You  cannot  increase  trade  by  impoverishing  your 
customers ;  you  cannot  increase  production  by  destroying  your  outlets. 

It  may  indeed  not  be  the  part  of  wisdom  to  cancel  the  existing 
indebtedness.  It  may  be  more  statesmanlike  to  let  the  debts  remain 
on  the  books,  and  in  due  time  to  affix  certain  conditions  to  their  remis- 
sion. It  may  even  be  desirable  to  ask  our  debtors  to  consent  to  a 
certain  quid  j)ro  quo  of  a  political,  an  economic,  or  a  cultural  nature. 
It  would  not  be  difficult  to  make  a  catalogue  of  such  possible  com- 
pensations :  free  scholarships  for  American  students  abroad,  free 
scholarships  for  foreign  students  here,  a  revision  of  the  terms  of  re- 
})aration,  a  political  readjustment  in  the  interests  of  international 
amity  and  good-feeling.  But  whether  we  attach  conditions  to  a  remis- 
sion of  the  debt  or  simply  cancel  it  outright,  let  us  not  commit  the  folly 
of  cutting  off  our  nose  to  spite  our  face.  Let  us  frankly  recognize 
the  fact  that  to  insist  upon  the  immediate  or  even  the  speedy  payment 
of  the  debt  will  constitute  an  economic  blunder  of  the  first  magnitude, 
the  unfortunate  results  of  which  will  be  felt  in  every  town  and  hamlet, 
in  every  business  and  occupation,  in  every  class  and  rank  of  our 
people.  Even  if  the  American  people  prove  obdurate  to  the  ethical 
implications  of  the  problem,  let  them  not  blind  their  eyes  to  the 
economic  aspect. 

Ill 

When  we  come  now  to  the  revenue  side  of  the  problem,  we  find  our- 
selves in  the  difficult  situation  of  tax  readjustment  which  always  follows 
war.  The  situation  is  peculiarly  difficult  because  of  the  need  of  a 
greatly  increased  permanent  revenue.  We  have  become  keenly  con- 
scious of  the  pressure  of  taxation  and  the  controversy  has  now  assumed 


1922]  The  State  of  Our  National  Finances  31 

the  form  of  contrasting  the  social  and  economic  efl'ects  of  taxation 
with  the  principle  of  individual  faculty  or  ability  to  pay.  The  old 
discussion  as  to  the  relative  merits  of  direct  and  indirect  taxes  has 
been  replaced  by  the  newer  debate  as  to  the  merits  of  taxes  on  wealth 
compared  with  taxes  on  consumption,  of  taxes  on  savings  compared 
with  taxes  on  spendings,  of  taxes  on  earnings  or  income  as  compared 
with  taxes  on  sales  or  transactions. 

As  to  this  controversy,  which  must  be  settled  before  our  fiscal  system 
assumes  its  permanent  form,  it  may  be  said  that  recent  years  have 
afforded  us  considerable  enlightenment  as  to  the  unintended  effects  of 
taxation.  Our  excess-profits  tax  had  at  least  three  unfortunate  results: 
it  was  repressive,  in  that  it  rendered  unavailable  large  sums  which 
would  otherwise  have  gone  towards  strengthening  and  expanding  the 
business ;  it  led  to  extravagant  and  wasteful  expenditure  in  the  shape 
of  undue  advertising,  lavish  repairs,  and  over-generous  salaries ;  it 
engendered  more  or  less  unsound  changes  in  business  practice  by  put- 
ting a  premium  on  overcapitalization.  The  analogous  British  tax  led 
not  only  to  the  direct  reduction  of  output,  as  when  the  owners  of  the 
rubber  plantations  postponed  the  tapping  of  their  trees,  but  it  pro- 
duced an  unhealthy  traffic  in  near-bankrupt  concerns  which  had  been 
fairly  prosperous  before  the  war  because,  when  several  concerns  com- 
bined, the  pre-war  records  of  both  together  formed  the  standards  which 
served  as  the  basis  of  the  tax.  Our  exaggerated  surtax  rates  on 
incomes  undoubtedly  operated  somewhat  to  check  investment  in  new 
enterprises,  although  if  the  truth  be  told  it  was  not  so  much  the  high 
rate  as  the  tax-exemption  feature  which  contributed  to  this  result. 

What  is  often  forgotten,  however,  is  that  excessive  taxes  on  wealth 
and  industry,  while  producing  their  repressive  effect  on  enterprise, 
indirectly  but  none  the  less  surely  react  upon  the  wider  classes  of  the 
community  whose  prosperity  is  more  or  less  intimately  bound  up  with 
business  activity.  An  exaggerated  tax  on  industry  and  commerce 
which  accentuates,  even  if  it  does  not  create,  business  lethargy  and 
inactivity  and  which  helps  to  prevent  full  employment  and  higher 
wages,  may  be  as  disastrous  for  the  workman  as  an  indirect  tax  on  his 
expenditure  or  a  direct  tax  on  his  wages.  There  is  much  reason  to 
believe  that  our  post-war  system  of  taxation  has  exerted  a  very  per- 
ceptible effect  on  business  enterprise  and  has  helped  to  intensify  the 
prevalent  depression,  with  its  aftermath  of  unemployment  and 
suffering. 

But  while  there  is  this  undoubted  danger  in  exaggerated  taxes  on 
wealth,  we  must  not  forget  that  there  are  equally  great,  if  not  greater, 
dangers  in  the  natural  reaction  of  the  business  community  which 
seeks  to  make  consumption  or  expenditure  the  criterion  of  tax  liability. 


32  Edwin  R.  A.  Seligman  [March 

Expenditure  is  an  unsatisfactory  criterion  of  taxable  capacity.  The 
danger  here  consists  in  the  neglect  of  the  modern  principle  of  faculty 
or  ability  to  pay.  In  the  first  place,  even  assuming  that  all  individ- 
uals consume  the  same  relative  proportion  of  what  they  produce, 
a  tax  on  consumption  does  not  lend  itself  to  a  realization  of  the 
democratic  demand  for  graduated  taxation,  unless  indeed  the  tax 
be  limited  to  an  impost  on  purely  luxurious  expenditures.  Secondly, 
while  some  individuals  must  consume  all  that  they  produce,  others, 
under  our  present  economic  system,  spend  only  a  small  part  of 
the  wealth  that  they  acquire.  To  the  extent  that  expenditures 
deal  with  necessaries,  or  even  with  comforts,  taxes  on  expenditure 
not  only  prevent  relatively  greater  burdens  on  the  rich  in  keeping 
with  their  relatively  greater  capacity  as  measured  by  their  wealth, 
but  actually  impose  a  relatively  greater  burden  on  the  poor,  thus 
creating  an  upside-down  progressive  system.  This  has  been  so 
universally  recognized  that  every  democratic  movement  in  taxation 
has  taken  the  form  of  an  attempt  to  reduce  taxes  on  general  expendi- 
ture. 

Finally,  from  the  wider  economic  point  of  view,  expenditure  could 
serve  as  a  satisfactory  criterion  of  taxable  faculty  only  in  case  it 
were  desirable,  as  a  general  principle,  to  reduce  consumption.  In  times 
of  emergency,  indeed,  it  may  become  indispensable  to  check  consump- 
tion, in  order  to  have  all  efforts  converge  on  the  purposes  of  the 
war  itself.  But  in  normal  economic  life  the  better  way  to  secure  the 
social  surplus  which  forms  the  basis  of  civilization  is  to  increase  pro- 
duction rather  than  to  decrease  consumption.  The  increase  in  wants 
and  in  consumption  furnishes  the  stimulus  to  the  augmented  production 
which  spells  progress. 

In  this  contest,  then,  between  repressive  taxes  on  enterprise  and 
general  taxes  on  expenditure,  a  proper  balance  must  be  struck.  The 
attempt  to  secure  the  entire,  or  well-nigh  the  entire,  revenue  from 
wealth,  as  wo  came  very  near  doing  during  the  war,  engenders  not  only 
grave  administrative  difficulties  but  the  hazard  of  a  general  retardation 
of  economic  progress.  The  endeavor,  on  the  other  hand,  to  lighten  the 
burden  of  wealth  to  a  degree  that  it  will  be  actually  less,  or  at  all 
events  no  greater,  than  the  burden  on  consumption,  will  create  still 
more  objectionable  results.  What  is  far  more  deplorable,  it  will 
breed  in  great  sections  of  the  community  the  belief  that  the  fundamental 
principles  of  equality  have  been  forgotten.  If  we  need,  as  we  undoubt- 
edly do,  some  revenue  from  consumption  or  expenditure,  in  order  to 
reduce  an  otherwise  extravagant  burden  on  wealth,  let  us  limit  the 
system  either  to  imposts  where  non-fiscal  conditions  are  paramount, 
as  in  the  case  of  the  customs  tariff,  or  to  taxes  on  a  few  commodities 


1922]  The  State  of  Our  National  Finances  33 

of  wide  but  not  necessary  consumption,  where  the  administrative  diffi- 
culties are  at  a  minimum  and  where  the  risks  of  a  more  or  less 
popular  reaction  are  almost  non-existent. 

Although  our  taxes  on  wealth  during  the  war  yielded  over  70  per 
cent,  and  at  one  time  over  80  per  cent,  of  the  entire  tax  revenue,  it 
became  necessary  to  secure  a  large  return  also  from  a  multiplicity  of 
taxes  on  expenditure,  including  the  so-called  nuisance  taxes.  While, 
however,  every  one  realizes  the  necessity  of  diminishing  the  excessive 
post-bellum  taxes  on  wealth,  the  instinct  of  the  people  was  undoubtedly 
correct  in  opposing  the  general  tax  on  sales.  For  this  would  have 
unduly  depressed  the  balance  so  as  to  impose  an  exaggerated  burden 
on  expenditure.  A  general  sales  tax,  whether  as  a  part  of  the  per- 
manent revenue  system,  or  even  as  a  means  of  swinging  the  con- 
templated soldiers'  bonus,  sins  at  once  against  the  administrative,  the 
economic,  and  ethical  canons  of  taxation.  The  new  revenue  law, 
with  its  total  anticipated  reduction  of  over  800  millions,  has  divided 
the  reduction  about  equally  between  wealth  and  expenditure,  taking 
off  about  260  millions  in  the  repeal  of  the  excess-profits  tax,  about 
150  millions  at  the  top  and  the  bottom  of  the  income  tax,  about  270 
millions  in  the  repeal  of  the  transportation  taxes  and  about  135 
millions  in  the  miscellaneous  nuisance  taxes.  The  next  tax  revision 
law  ought  to  follow  in  general  the  same  plan;  for,  as  our  needs  of 
revenue  diminish,  there  is  still  need  for  the  abolition  of  certain  burden- 
some taxes  on  expenditure,  while  at  the  same  time  making  a  further 
reduction  in  the  taxes  on  wealth.  When  in  the  course  of  a  few  years 
the  normal  situation  arrives,  it  will  be  time  enough  to  limit  our  con- 
sumption taxes  to  the  tariff  and  a  few  great  imposts  like  those  on 
tobacco,  alcohol  and  gasolene,  and  to  draw  the  rest  of  the  needed 
revenue  from  taxes  on  wealth  and  business,  which  ought  not  then  to  be 
high  enough  to  exert  any  seriously  depressing  influences. 

While  the  demand  for  a  tax  on  expenditure  or  general  sales  is  limited 
in  this  country  to  some  of  the  industrial  and  financial  interests  that 
seem  to  attach  more  importance  to  particular  considerations  of  puta- 
tive business  progress  than  to  general  considerations  of  a  wider  eco- 
nomic and  social  policy,  a  few  students  have  recently  made  an  endeavor 
to  rejuvenate  the  long-discarded  theory  of  Mill  as  to  the  desirability 
of  exempting  savings.  The  elaborate  attempt  of  Einaudi,  a  decade 
ago,  met  with  very  little  favor  at  the  hands  of  his  compatriots.  The 
more  recent  effort  of  Professor  Adams,  even  though  seconded  by  Con- 
gressman Mills,  is  still  less  promising.  This  is  due  largely  to  the  inade- 
quate analysis  of  the  effect  of  taxation  on  savings.  Since  all  wealth 
must  be  either  spent  or  saved,  the  effect  of  taxes  on  savings  might 
be    considered    the    opposite    of    the    effect    of    taxes    on    spending. 


34  Edwin  R.  A.  Seligman  [March 

It  is  undoubtedly  true  that  high  war  taxes  on  consumption  may 
produce  such  an  enforced  economy  as  to  liberate  the  surplus  of 
increased  savings  for  war  purposes.  It  is  difficult,  however,  to  say 
how  much  of  war  economy  is  compulsory  and  how  much  is  voluntary 
and  due  to  patriotic  reasons.  At  all  events,  it  would  be  hazardous  to 
lay  down  any  general  rule  as  to  the  normal  effects  of  taxation  on 
savings,  because  of  the  disparate  elements  in  the  process. 

Some  people  save  for  one  reason,  some  save  for  another.  Where 
the  saving  is  for  life  insurance  or  for  a  rainy  day,  or  for  the  future 
education  of  children,  a  tax  which  does  not  exempt  such  sums  would 
no  doubt  have  an  unfortunate  effect.  But  where  the  saving  is  for  the 
purpose  of  mere  accumulation,  everything  depends  upon  the  relative 
tax  burden.  This  is  contingent,  however,  not  alone  on  the  rate  of 
the  tax  but  on  the  amount  of  the  income.  At  one  end  of  the  economic 
scale  are  those  whose  incomes  are  so  scanty  that  almost  no  saving  is 
possible;  at  the  other  end  are  those  with  such  enormous  incomes  that 
they  cannot  well  help  saving.  In  the  one  case,  saving  is  extremely 
difficult ;  in  the  other,  largely  automatic.  A  tax  which  will  completely 
destroy  saving  in  the  first  class  will  have  practically  no  effect  on  the 
other.  It  is  only  when  the  tax  becomes  so  great  as  to  impair  the 
margin  between  income  and  outgo  aud  thus  to  prevent  savings  out  of 
superfluity,  that  it  will  affect  the  capacity  to  save.  Where  the  capital 
fund  of  society  is  replenished,  as  in  modern  times,  chiefly  by  the  surplus 
earnings  of  business,  the  rate  of  tax  must  be  still  higher  before  savings 
will  be  perceptibly  affected.  For  while  even  a  moderate  tax  will  un- 
doubtedly reduce  business  earnings,  if  we  assume  that  the  proceeds 
of  the  tax  are  also  spent  for  productive  purposes,  as  ought  to  be  the 
case  under  normal  conditions,  the  result  will  be  a  change  in  the  form 
of  capital  rather  than  in  the  rate  of  accumulation.  It  is  only  when 
the  tax  is  so  high  as  to  check  enterprise  and  to  retard  production  that 
the  surplus  will  decrease  and  the  growth  of  the  national  dividend  be 
checked.  In  a  more  general  way,  the  distinction  may  be  declared  to 
be  one  between  productive  and  unproductive  expenditure.  In  final 
analysis,  the  effect  of  taxation  upon  savings  is  to  be  judged  by  the 
possible  changes  in  the  creation  or  in  the  unproductive  consumption 
of  wealth.  If  taxation  is  not  so  excessive  as  to  diminish  the  rate  of 
production,  it  makes  comparatively  little  difference  to  the  wealth  of 
the  community  as  a  whole  whether  savings  are  taxed  or  not ;  for  the 
income  of  one  individual  is  the  expenditure  of  another. 

While  the  general  framework  of  our  revenue  system  may  therefore 
be  expected  to  remain  very  much  as  it  now  exists — that  is,  composed 
in  major  part  of  taxes  on  wealth  and  in  much  smaller  part  of  taxes  on 
consumption — and  while  there  is  no  need  or  prospect  of  making  any 


1922]  The  State  of  Our  Natioiial  Finances  35 

fundamental  change  involving  a  transition  from  the  policy  of  taxing 
earnings  to  that  of  taxing  spendings,  there  still  remains  a  real  problem 
in  the  existence  of  such  high  rates  of  income  surtaxes  as  we  have 
at  present  and  the  continuation  of  which  in  normal  times  it  is  not  easy 
to  defend.  There  are  three  ways,  however,  in  which  this  problem  can 
be  attacked. 

The  first  line  of  attack  consists  in  the  abolition  of  our  unfortunate 
system  of  tax  exemption.  It  is  true,  indeed,  that  the  inequality  is 
not  so  great  as  appears  at  first  blush  to  those  who  overlook  the 
question  of  incidence.  For,  so  far  as  new  purchasers  are  concerned, 
this  inequality,  like  all  similar  fiscal  inequalities,  tends  to  be  eliminated 
through  the  operation  of  the  principle  of  capitalization.  The  pur- 
chaser of  a  tax-exempt  security  must,  in  other  words,  pay  so  much 
more  for  the  security  that  what  he  gains  by  an  exemption  from  the 
annual  tax  is  counterbalanced  by  his  lower  rate  of  return  on  the  invest- 
ment. The  purchaser  of  tax-free  securities  is  therefore  in  a  truer 
sense  of  the  term  not  tax-free. 

The  objection  to  tax-exempt  securities  is,  however,  nevertheless  valid. 
For,  in  the  first  place,  this  amortization  of  burden  is  never  complete. 
Capitalization  depends  upon  the  expectation  of  a  regularly  recurring 
normal  tax.  Where  the  rate  varies,  any  increase  above  the  normal 
is  not  susceptible  of  amortization,  so  that  freedom  from  the  excess 
to  that  extent  constitutes  a  real  exemption.  Furthermore,  the  un- 
certainty of  the  future  often  causes  a  discrepancy  in  the  capitaliza- 
tion, so  that  the  government  may  not  gain  as  much  from  an  increased 
price  for  the  bonds  when  issued  as  it  ultimately  loses  from  the  non- 
receipt  of  the  annual  tax.  Again,  where  the  tax-exempt  securities  con- 
sist not  only  of  federal  but  of  state  and  local  securities,  subject  to  a 
variety  of  different  taxes,  there  is  no  necessary  correlation  between  tax 
burden  and  tax  amortization.  Above  all,  the  existence  of  graduated 
taxation  vitiates  the  conclusions  which  are  applicable  only  to  propor- 
tional taxation.  With  our  surtax  running  up  to  65  per  cent,  it  is 
plainly  impossible  to  predict  the  rate  of  tax  to  which  the  owner  of  any 
particular  security  would  be  subject.  The  utmost  that  could  by  any 
possibility  be  capitalized  would  be  the  8  per  cent  normal  tax.  And 
even  this  possibility  is  modified  by  the  preceding  considerations.  So 
that  it  still  remains  true  that  the  inequality  due  to  tax  exemption  is 
not  ironed  out  by  the  process  of  capitalization.  There  is  accordingly 
ample  reason  to  believe  that  the  abolition  of  tax  exemptions  would 
conduce  not  only  to  greater  equality  but  to  a  substantial  increase  of 
revenue.  This  would  not  only  permit  of  a  reduction  in  the  income 
tax  rate,  but  would  remove  a  festering  sore  on  our  body  economic. 

Well-nigh   a   decade   ago   we  pointed    out   that    the   supreme   court 


36  Edwin  R.  A.  Seligman  [March 

decisions  on  this  point  were  based  on  misapprehension  of  the  economic 
reasoning  underlying  Marshall's  great  decision  in  the  Bank  case. 
Although  the  matter  has  for  some  inscrutable  reason  not  been  present- 
ed anew  to  the  court,  some  distinguished  lawyers  are  of  the  opinion 
that  if  the  case  is  ever  properly  presented  it  will  be  recognized 
that  the  later  decisions  rest  upon  an  insecure  economic  foundation. 
Even,  however,  if  a  reversal  or  distinction  of  the  earlier  decision  cannot 
be  secured,  the  path  of  constitutional  amendment  is  open  and  ought  in 
consonance  with  the  recommendation  in  the  President's  message  to  be 
pursued. 

The  second  method  of  securing  a  desirable  reduction  in  the  income 
tax  is  connected  with  the  taxation  of  corporations.  I  have  more  than 
once  indicated  that  we,  in  common  with  some  other  countries,  started 
out  on  an  erroneous  path  in  regarding  corporations  as  purely 
fictitious  personalities  to  be  considered  from  the  fiscal  point  of  view 
primarily  as  convenient  agencies  for  collecting  the  tax  from  the  share- 
holders. We  distinguished  between  the  individual  income  tax  and  the 
corporate  income  tax  and  levied  the  latter  at  a  rate  roughly  calcu- 
lated to  be  an  equivalent  for  the  normal  tax  on  individuals,  permitting 
shareholders  then,  for  the  purpose  of  the  normal  rate,  to  deduct  their 
dividends  from  their  taxable  income.  In  the  course  of  time,  this  puta- 
tive equivalence  was  destroyed ;  for  as  the  rate  of  normal  personal  tax 
was  reduced,  the  rate  of  corporate  income  tax  was  increased,  in  order 
to  bring  about  an  equality  between  corporations  and  partnerships 
as  well  as  to  compensate  for  a  repeal  of  the  excess-profits  tax.  There 
is  therefore  now  not  even  a  pretence  of  an  equivalence  between  the 
corporate  income  and  the  individual  income  tax.  And  even  if  there 
were  any  such  pretence,  it  would  manifestly  be  impossible  to  secure 
any  real  equality  between  the  two.  For  in  order  to  accomplish  this 
we  should  have  to  make  an  elaborate  calculation  based  on  the  surtax 
rate,  and  should  have  to  know  not  only  how  much  of  the  corporate 
revenue  is  actually  distributed  in  dividends — which  it  is  possible  to 
ascertain — but  also  how  much  other  income  was  received  by  every 
shareholder,  as  well  as  how  many  shares  were  owned  by  each  taxpayer — 
facts  which  it  is  impossible  to  ascertain. 

What  is  clearly  demanded  by  the  situation  is  to  abandon  the  dis- 
tinction between  individual  and  corporate  taxation  and  to  replace 
it  Avith  one  between  a  personal  income  tax  or  income  tax  proper  and 
a  business  tax  based  on  net  earnings.  A  business  tax  would  possess 
the  inestimable  advantage  that  it  would  apply  to  all  businesses,  whether 
corporate  or  non-corporate,  and  that  it  could  consequently  be  levied 
at  so  moderate  a  rate  as  to  constitute  no  real  check  to  business 
enterprise.     Furthermore,  it  would  apply  to  all  profits,  whether  dis- 


1922]  The  State  of  Our  National  Finances  37 

tributed  or  not ;  by  no  longer  permitting  the  deduction  of  di\'idends 
from  individual  income,  it  would  so  augment  the  yield  of  the  personal 
income  tax  as  to  permit  of  a  considerable  reduction  in  rate. 

To  this  proposition  two  objections  will  be  raised.  The  first  is  that 
the  shareholder  suffers  a  double  tax,  in  that  he  would  pay  not  only 
the  corporate  tax  but  also  the  personal  income  tax.  This  objection, 
however,  is  ill-founded  if  it  is  remembered  that  he  would  be  in  no  worse 
position  than  any  one  else.  We  do  not  call  it  double  taxation,  or  at 
all  events  illegitimate  double  taxation,  for  a  New  Yorker  to  pay  his 
real  estate  tax — state  as  well  as  local — and  again  to  pay  an  income 
tax  in  which  the  income  from  the  real  estate  is  included ;  we  do  not 
call  it  illegitimate  double  taxation  for  the  same  New  Yorker  to  pay 
his  corporate  tax,  whether  on  earnings  or  any  other  element,  and  again 
to  pay  his  income  tax  on  the  dividends  from  these  corporations.  The 
reason  is  that  a  tax  on  corporate  profits  which  reduces  dividends,  like 
a  tax  on  land  which  reduces  the  rent  roll,  is  capitalized  into  a  lower 
selling  value  of  the  principal.  The  purchaser  of  a  piece  of  land  takes 
account  of  the  tax  when  he  buys  the  land ;  the  purchaser  of  a  corporate 
share  will  pay  for  it  a  price  which  reflects  the  net  yield  and  which 
takes  account  of  the  tax.  To  subject  the  corporation  to  a  tax 
does  not  impose  any  burden  upon  the  individual  who  purchases  stock 
subsequent  to  the  original  imposition  of  the  tax. 

The  other  objection  is  that  the  individual  business  or  the  partner- 
ship is  put  at  a  disadvantage  as  compared  with  the  corporation,  in 
that  the  member  of  a  partnership  has  to  pay  not  only  the  flat  business 
tax  but  also  the  graduated  personal  income  tax.  This  objection,  how- 
ever, is  also  in  part  at  least  invalid.  We  must  not  compare  an  imper- 
sonal tax  on  the  business  with  a  personal  tax  on  the  individual.  A 
flat  tax  on  business  profits  alTects  all  businesses  alike — corporate  or 
non-corporate.  The  fact  that  the  individual  as  such  is  subject  to 
additional  personal  taxes  does  not  alter  the  situation.  For  the 
equality  between  personal  and  impersonal  taxation,  which  it  is  im- 
possible to  bring  about  at  first  directly,  will  tend  to  be  effected  ulti- 
mately. It  is  true  that  in  the  case  of  a  corporation,  the  shareholder 
will  pay  his  personal  tax  only  on  the  dividends,  while  the  partner  will 
pay  on  the  entire  earnings.  But  the  attempt  to  create  an  equality 
by  putting  a  tax  on  the  undistributed  corporate  earnings  is  both 
illusory  and  unnecessary.  It  is  illusory  because  a  flat  rate  on  undis- 
tributed earnings  of  the  entity  called  the  corporation  cannot  possibly 
be  made  equivalent  to  a  graduated  tax  on  the  individual  recipient 
of  the  earnings.  How  can  a  15  per  cent  tax  on  undistributed  earnings, 
for  instance,  be  equilibrated  with  a  tax  which  in  the  case  of  the 
individual  recipient  of  the  earnings  may  vary  from  8  per  cent  to  65 


38  Edwin  R.  A.  Seligman  [March 

per  cent,  according  to  the  amount  of  his  income?  Moreover,  a  tax 
on  undistributed  earnings  will  not  alone  fail  to  produce  equality,  but 
will  be  apt  to  engender  unsound  business  practices  in  forcing  the 
perhaps  premature  distribution  of  earnings. 

The  attempt  to  create  equality  is  also  in  great  part  unnecessary. 
For  the  government  will  ultimately  secure  its  rightful  share  of  the 
undistributed  earnings.  One  of  three  things  must  happen:  first,  the 
surplus  accumulated  in  a  good  year  will  be  utilized  to  reduce  the  deficit 
in  a  bad  year,  and,  especially  with  a  tax  system  which  employs  the 
method  of  averages  over  a  number  of  years,  will  operate  finally  to 
give  the  government  its  due.  Second,  the  accumulation  of  a  surplus 
beyond  a  certain  point  will  be  apt  to  be  prevented  by  the  pressure  of 
the  stockholders  to  receive  dividends,  so  that  if  the  rate  of  taxation 
remains  fairly  constant  there  will  be  little  advantage  in  delay.  Third, 
with  every  accumulation  of  surplus  the  stock  will  become  more  valuable, 
so  that  when  it  is  sold  the  government  will  secure  its  share  in  the 
taxation  either  of  capital  profits  or  of  periodical  income.  This 
assumes,  of  course,  that  realized  capital  profits  are  to  be  included  in 
the  concept  of  income. 

The  only  real  hazard  in  the  proposition  is  that  individuals  will 
attempt  to  incorporate  themselves  and,  by  refraining  from  a  distribu- 
tion of  the  corporate  earnings,  evade  the  graduated  tax.  But  this 
danger  can  be  avoided  by  treating  the  stockholders  of  such  dummy 
corporations  precisely  like  the  members  of  a  partnership  and  subject- 
ing them  also  to  personal  taxes  on  the  entire  earnings.  If  this  seems 
to  be  attended  with  insuperable  practical  difficulties,  a  compromise 
solution  might  be  reached  by  making  the  corporate  business  taxable  at 
a  somewhat  higher  rate  than  the  unincorporated  business — a  proposi- 
tion which  can  be  defended  on  other  grounds  as  well. 

Even  this  compromise,  however,  will  not  avail  to  obscure  the  desirable 
distinction  between  an  impersonal  tax  on  the  business  and  a  personal 
tax  on  the  income  of  the  individual.  The  most  logical  plan  is  that 
followed  by  France,  whose  new  system  of  income  taxation  is  based 
upon  no  less  than  five  impersonal  taxes  or  taxes  upon  the  sources  of 
income:  ownership  of  land,  agricultural  enterprise,  business,  invest- 
ments, and  professions ;  superimposed  upon  which  there  is  a  general 
graduated  personal  income  tax.  Such  a  detailed  system  would  be  for 
many  reasons  botli  unnecessary  and  impracticable  for  us  ;  but  we  should 
at  least  accept  the  fundamental  distinction  between  an  impersonal 
business  tax  and  a  personal  income  tax. 

There  remains  the  third  method  of  reducing  the  income  surtaxes, 
even  if  we  desire  to  retain  the  same  total  and  relative  revenue  from 


1922]  The  State  of  Our  National  Finances  39 

wealth  as  compared  with  that  from  expenditure.  This  consists  in  an 
increase  in  the  inheritance  tax. 

We  do  not  indeed  share  the  opinions  of  those  who,  regarding  the 
inheritance  tax  simply  as  a  capitalized  income  tax,  yet  deem  it  prefer- 
able because  of  the  less  repressive  effects  on  saving.  Mr.  Carnegie, 
for  instance,  believed  that  an  inheritance  tax  exerts  no  influence  on 
savings,  and  even  Profesor  Cannan  holds  that  "death  duties  discourage 
accumulation  somewhat  less  than  annual  taxes."  Professor  Pigou  shares 
this  conclusion  not  only  because  "the  stimulus  to  accumulation  consists 
in  the  hope  of  the  distinction  afforded  by  dying  very  rich,"  but  also 
because,  inasmuch  as  future  taxes  are  like  all  future  events  discounted, 
the  delay  in  the  levy  will  have  "a  smaller  restrictive  influence  upon  the 
quantity  of  waiting  supplied"  by  the  investors.  But  this  consideration 
which  leads  to  the  superiority  of  postponed  over  immediate  taxes  is 
offset,  as  Sir  Josiah  Stamp  has  recently  pointed  out,  by  the  fact  that 
most  people  will  be  more  apt  "to  curtail  expenditure  to  meet  an  annual 
income  tax  and  to  keep  on  saving  and  thus  in  the  long  run  add  more 
to   capital   than   would   be   the   case   under   the  death   duty   regime."* 

From  the  point  of  view  of  savings,  there  is  accordingly  but  little  to 
choose  between  the  two  methods.  There  are,  however,  two  sets  of 
arguments  that  make  for  an  increased  revenue  from  the  inheritance 
tax.  The  first  is  that  the  discrepancy  in  both  the  rate  and  the  yield 
of  the  inheritance  tax,  as  compared  with  the  income  tax,  is  at  present 
too  great.  In  Great  Britain  the  maximum  rates  are  about  40  per 
cent  and  60  per  cent  respectively ;  with  us,  they  are  25  per  cent  and 
73  per  cent  respectively.  The  discrepancy  in  the  yield  is  still  greater: 
150  to  200  millions  from  the  inheritance  tax,  as  compared  with 
about  800  millions  from  the  personal  income  tax.  If  it  be  objected 
that  these  figures  take  no  account  of  the  additional  state  taxes  on 
inheritance,  we  may  retort  that  they  also  take  no  account  of  the 
additional  state  taxes  on  income  and  on  property.  Adding  state  to 
federal  taxes  would  make  the  discrepancy  still  greater. 

The  other  set  of  arguments  that  make  for  an  increased  revenue 
from  inheritance  taxes  are,  first,  the  administrative  simplicity  and 
the  avoidance  of  so  many  of  the  complications  connected  with  the 
attempt  to  ascertain  income.  Secondly,  in  the  United  States,  a  further 
argument  is  found  in  the  fact  that  a  federal  inheritance  tax  of  slightly 
more  generous  proportions  than  at  present  composed,  as  is  the  case 
in  so  many  foreign  countries,  of  both  an  estate  tax  and  a  tax  on 
shares,  would  also  render  possible  the  disappearance  of  the  serious 
evil  of  double  taxation  now  so  common  with  us.  We  can  therefore 
not  agree  with  the  Secretary  of  the  Treasury  when  he  puts  a  suggested 

^Sir  Josiah  Stamp,  Principles  of  Taxation  (1921),  p.  154. 


40  Edwin  R,  A.  Seligman  [March 

reduction  of  the  federal  estate  tax  on  a  par  with  that  of  the  income 
tax.  A  rate  of  tax  considerably  lower  than  the  maximum  40  per  cent 
of  Great  Britain  or  the  80  per  cent  of  France  would  not  only  permit 
each  state  in  the  Union  to  receive  more  than  it  is  now  securing  from 
its  own  independently  levied  inheritance  tax,  but  would  yield  such  an 
abundant  surplus  to  the  federal  government  as  to  ensure  a  substantial 
reduction  in  the  rate  of  the  income  tax. 

The  fiscal  system  of  the  future  may  therefore  already  be  visualized 
in  its  main  outlines.  Government  expenditures  before  the  war  were, 
exclusive  of  postal  expenditures,  somewhat  less  than  three  quarters 
of  a  billion.  If  we  allow  for  the  change  in  the  value  of  money,  and 
for  a  corresponding  leveling  up  of  government  salaries,  which  has  by 
no  means  as  yet  been  attained,  our  normal  expenditures,  exclusive 
of  postal  and  debt  charges,  should  not  be  more  than  one  and  one-half 
billions.  This  assumes,  indeed,  that  the  mad  race  of  naval  competi- 
tion will  have  been  checked ;  and  for  this  assumption  we  now  have 
well-grounded  hopes.  The  allotment  for  interest  charge  and  a  liberal 
amortization  of  the  war  debt,  without  counting  on  the  repayment  of 
the  debt  from  the  Allies,  would  be  about  one  and  a  quarter  billions. 
Allowing  for  contingencies,  we  thus  have  a  total  annual  outlay  of  well 
under  three  billions. 

How  do  we  stand  now  on  the  revenue  side.''  From  a  revised  tarifT 
which  already  now  yields  three  hundred  and  fifty  millions  we  may  well 
expect  five  hundred  millions.  From  three  individual  sources,  namely 
tobacco,  non-beverage  alcohol,  and  automobiles  or  gasoline,  we  can 
easily  secure  another  half  billion,  as  in  fact  we  are  already  now  doing. 
With  a  slight  increase  of  stamp  taxes  and  the  suggested  increase  in 
tJic  rates  of  the  inheritance  tax,  it  will  be  relatively  simple  to  secure 
another  half  billion.  This  leaves  less  than  one  and  one-half  billions 
to  be  derived  from  profits  and  income  taxes.  The  general  business  tax 
tiiat  has  been  suggested  should  under  normal  circumstances  proride 
about  three  quarters  of  a  billion,  leaving  approximately  the  same 
amount  to  come  from  the  income  tax.  With  a  more  generalized  con- 
ception of  income,  so  as  to  include  dividends,  and  with  a  change  in  the 
awkward  situation  which  permits  a  complete  deduction  for  capital 
losses,  while  making  incomplete  provision  for  capital  gains,  we  can 
look  forward  to  a  personal  income  tax  with  considerably  reduced  sur- 
tax rates  and  moderately  reduced  normal  rates.  And  if  it  should  be 
found  expedient  slightly  to  retard  the  tempo  of  debt  payment  in  order 
to  spread  over  a  somewhat  longer  period  the  gigantic  burden  of  the 
war,  it  would  be  possible  still  further  to  lower  both  the  surtax  and  the 
normal  rates  of  the  income  tax  or  to  go  somewhat  slower  in  the  sug- 
gested increase  of  the  inheritance  tax. 


1922]  The  State  of  Our  Xational  Finances  41 

Such  a  prospect  is  a  reasonably  cheerful  one.  It  implies  a  fiscal 
system  which  will  exert  little  repressive  influence  on  enterprise,  which 
will  put  no  burden  on  the  consumption  of  necessaries  or  of  comforts, 
which  will  render  unnecessary  a  resort  to  the  sales  or  the  spendings  tax, 
which  will  turn  a  deaf  ear  to  those  who  in  advocating  a  remission  of 
the  tax  on  savings  are  in  reality  working  toward  a  remission  of  the 
tax  on  wealth,  and  which  will  finalU'  respond  to  the  demands  of  demo- 
cratic justice  without  incurring  the  hazards  of  administrative  ineffi- 
ciency. With  a  stoppage  of  the  mad  race  for  armaments,  with  a  more 
successful  emphasis  on  budgetary  economy,  and  with  a  fuller  recogni- 
tion of  the  fundamental  principles  involved,  we  may  look  forward  with 
hopeful  anticipation  to  a  sound  and  sensible  fiscal  system. 

Edwix  R.  a.  Seligmax. 
Columbia  University. 

DISCUSSION. 

John  E.  Rovensky. — Professor  Seligman's  excellent  paper  is  divided 
into  three  parts:  the  first  is  introductory  in  character;  the  second  deals 
with  our  present  debt  situation  and  the  expenditure  side  of  our  balance 
sheet;  the  third  deals  with  our  revenue  problem. 

I  shall  confine  myself  largely  to  the  second  part,  but,  before  proceeding, 
I  cannot  pass  Professor  Seligman's  conclusions  on  branch  banking  without 

voicing  my   disagreement.      He   states  that   "the   reason   for credit 

inflation  when  nearing  the  crest  of  a  boom  period  is  to  be  sought  largely  in 
a  continuance  of  the  competitive  conditions  among  our  thirty  thousand 
x\merican  banks"  and  recommends  branch  banking  which  he  believes  would 

convert   "the  multiplicity  of   competitive   institutions into   a   chain 

of  cooperative  banks  working  together."  It  seems  to  me  that  Professor 
Seligman  overlooks  the  fact  that  inflation  increases  only  while  a  majority 
of  the  captains  of  industry  and  finance  are  of  the  opinion  that  commodity 
prices  are  likely  to  advance,  i.  e.,  that  really  dangerous  inflation  does  not 
exist.  As  soon  as  they  begin  to  recognize  the  existence  of  dangerous 
inflation  and  to  doubt  the  stability  of  commodity  price  levels  the  crisis 
becomes  imminent.  If  this  is  true,  then  I  fail  to  see  how  fewer  banking 
institutions  would  remedy  the  matter.  So  long  as  the  managers  of  the 
fewer  banks  proposed  by  Professor  Seligman  believed  that  commodity  prices 
are  on  a  safe  basis  and  that  dangerous  inflation  does  not  exist,  they  would 
continue  to  extend  credit  within  the  limits  that  they  deemed  safe  just  as 
banks  do  at  present.  I  believe  that  the  history  of  banking  in  countries 
having  branch  banking  systems  fully  bears  out  this  conclusion. 

Furthermore,  I  don't  believe  that  competition  caused  banks  to  grant 
excessive  credit  during  the  period  of  advancing  prices.  The  comparatively 
small  losses  suffered  by  commercial  banking  institutions  are  evidence  of  that. 
Individual  institutions  are  careful  not  to  jeopardize  their  capital  by  unwise 


42  John  E.  Rovenslcy  [March 

credit  extensions  and  they  seldom  let  competition  overcome  their  natural 
cautiousness. 

That,  however,  is  but  a  relatively  unimportant  part  of  the  whole  question 
of  the  desirability  of  branch  banking.  I  shall  not  take  the  time  to  go 
into  it  at  length  and  I  believe  that  a  vast  majority  of  American  bankers 
will  agree  with  me  that  the  remarkable  development  of  this  country  during 
the  past  fifty  years  would  not  have  taken  place  under  a  branch  banking 
system  that  vests  the  control  of  credit  in  a  comparatively  small  number  of 
men  located  in  centers  far  away  from  the  points  that  require  the  greatest 
amount  of  attention.  The  close  personal  attention,  the  local  interest  and 
the  sympathetic  feeling  of  the  interior  banker  have  been  powerful  factors 
in  the  development  of  our  country. 

The  fact  that  branch  banking  exists  in  other  countries  is  not  a  valid 
argument  in  favor  of  its  adoption  here.  Geographically  as  well  as  politi- 
cally our  banking  system  is  harmonious  with  our  surroundings  and  is  best 
fitted  for  our  needs.  Branch  banking  in  our  country  should  be  confined 
to  operations  in  a  single  community.  To  such  branches  the  objections  I 
have  here  stated  obviously  do  not  apply. 

Passing  to  the  second  part  of  Professor  Seligman's  paper — that  dealing 
with  our  present  debt  situation  and  the  expenditure  side  of  our  national 
balance  sheet — I  wish  to  compliment  the  author  on  the  clear  and  logical 
treatment  of  his  subject.  I  agree  with  many  of  his  conclusions  and  shall 
not  mention  a  number  of  points  where  I  find  myself  in  disagreement  with 
him,  because  in  some  instances  the  points  are  not  important  and  in  others 
the  degree  of  disagreement  is  not  sufficiently  great  to  be  entitled  to  space 
within  the  limited  time  at  my  disposal. 

I  agree  with  Professor  Seligman  that  it  would  be  advisable  to  introduce 
more  elasticity  into  the  process  of  retiring  our  national  debt.  Future  gener- 
ations will  unquestionably  derive  far  more  benefit  from  the  objects  attained 
by  incurring  our  present  debt  and  it  seems  to  me  that  the  present  generation 
is  weighed  down  with  taxes  to  the  point  where  it  is  having  a  serious  influence 
on  our  business  activities.  However,  if  more  elasticity  is  introduced  into 
our  program  it  will  be  our  problem  to  see  that  this  actually  results  in  a 
reduction  in  taxation  and  not  increased  expenditure  in  other  directions. 

Professor  Seligman  states  that  "undoubtedly  still  a  majority  in  this 
country"  consider  the  debt  of  our  Allies  to  this  country  a  just  debt.  That 
may  be  true,  but  if  so,  I  am  glad  to  place  myself  beside  Professor  Seligman 
in  the  minority  that  does  not  believe  so.  To  say  that  the  Allied  debt  to  us 
is  a  just  debt  is  to  ignore  colossal  facts  of  human  history  and  take  our 
stand  on  the  basis  of  mere  bookkeeping  figures. 

When  France,  bled  white  by  her  efforts  prior  to  our  entry  into  the  war, 
sent  forward  a  regiment  of  her  men  to  figlit  for  our  common  cause  and  we 
furnished  a  part  of  their  equipment,  we  booked  the  price  of  the  equipment 
as  a  loan.  But  when  we  sent  forward  a  regiment  of  our  own  men — thus  fur- 
nishing not  only  the  relatively  unimportant  equipment  but  also  the  precious 
human  element — we  booked  tliat  as  an  expenditure.  How  absurd — if  any 
relation  of  debtor  and  creditor  was  created  between  France  and  ourselves 


1922]  The  State  of  Our  National  Finances  43 

in  the  two  foregoing  examples  it  is  the  reverse  of  the  technical  bookkeeping 
results. 

Czecho-Slovak  soldiers,  drafted  against  their  will  into  the  Austrian  army, 
rebelled  and  went  over  to  the  Allied  side;  when  Russia  failed  the  Allies 
they  fought  their  way  through  thousands  of  miles  of  bolshevik  chaos 
and  finally  at  the  earnest  request  of  the  Allies  (including  the  U.  S.  A.) 
maintained  an  Allied  front  in  frozen  Siberia — half  way  round  the  globe 
from  their  homes,  in  a  desolate  country  in  which  they  had  no  interest  save 
as  our  Allies.  And  when  they  needed  food  and  clothing  to  perform  the  task 
to  which  we  and  our  Allies  assigned  them  we  "loaned"  the  required  amount 
to  their  government — a  government  that  possessed  at  that  time  absolutely 
no  revenues.      Is  that  a  debt  in  the  usual  sense  of  the  word? 

Professor  Seligman  states  that  there  is  "great  need  of  clear  thinking  and 
of  public  enlightenment  on  this  subject."  I  am  certain  that  the  American 
people,  if  the  facts  are  placed  clearly  before  them,  will  after  due  considera- 
tion arrive  at  the  same  conclusion  as  Professor  Seligman — that  these  debts 
are  not  the  kind  that  give  us  the  right  to  rigidly  demand  payment  but  that 
they  are  merely  bookkeeping  results  that  ought  to  be  reviewed  in  the  light 
of  the  vastly  more  important  human  facts. 

Professor  Seligman  clearly  states  the  reasons  why  we  originally  placed 
our  assistance  to  the  Allies  in  the  form  of  loans  rather  than  direct  contri- 
butions and  points  out  the  greater  economy  and  efficiency  that  was  probably 
obtained  thereby. 

He  proceeds  to  show  that  even  if  the  Allied  debt  was  a  just  debt  it  would 
be  disastrous  to  ourselves  to  demand  payment  of  either  principal  or  interest 
at  this  time.  His  reasoning  seems  sound  to  me.  Without  going  into  details 
the  net  facts  are  that  Europe  hasn't  the  gold  with  which  to  pay  us  and  it 
would  be  disastrous  for  us  to  accept  it  if  she  had — and  it  would  be  almost 
equally  disastrous  if  she  attempted  to  pay  us  in  merchandise. 

If  a  demand  was  made  today  for  the  payment  of  any  considerable  part 
of  the  principal  or  interest  of  the  debt,  the  immediate  effect  would  be  a 
marked  falling  of  foreign  exchange  rates.  The  Allies,  not  having  sufficient 
gold  for  the  purpose  of  paying  us,  would  be  compelled  to  purchase  dollar 
exchange  thus  forcing  up  dollar  exchange  rates  in  proportion  to  the  amount 
demanded.  This  would  accentuate  the  undesirable  effects  of  the  present 
foreign  exchange  situation — American  goods  would  be  forced  out  of  South 
American  countries  and  other  neutral  fields  by  goods  produced  in  countries 
with  lower  exchange  rates  even  to  a  greater  extent  than  at  present,  and, 
if  we  persisted  in  pressing  our  claims,  foreign  goods  would  finally  force 
their  way  into  our  home  markets  over  any  tariff  wall  that  we  may  erect. 
In  connection  with  the  latter,  I  may  state  that  collecting  an  import  tariff 
while  demanding  payment  of  our  debt  would  be  the  ethical  equivalent  of 
the  action  of  a  creditor  who  insists  upon  the  amount  of  his  claim  being 
brought  to  his  house  and  then  charges  an  admission  fee  at  the  door. 

Professor  Seligman  states  his  conclusions  regarding  this  whole  matter  in 
the  form  of  a  number  of  questions.  Shall  certain  conditions  be  fixed  for 
the   remission   of  the  Allied  debt?      Shall  we   ask   our  debtors   to  give  us 


44  A.  W.  Krech  [March 

some  consideration  of  a  political,  economic,  or  cultural  nature  for  such 
remission?     Shall  the  whole  matter  be  left  in  abeyance  for  the  time  being? 

The  important  thing,  however,  at  the  present  time  is  that  we  frankly 
recognize  the  fact  that  to  "insist  upon  immediate  or  even  speedy  payment 
of  the  debt  would  constitute  an  economic  blunder  of  the  first  magnitude." 
In  all  this  I  heartily  concur. 

The  task  before  us,  as  I  see  it,  is  to  impress  upon  the  American  people 
the  really  important  facts  with  respect  to  the  origin  of  the  debt  and  the 
inevitable  results  of  any  attempt  on  our  part  to  demand  any  considerable 
payment  in  the  proximate  future. 

A.  W.  Krech. — It  is  not  an  easy  task  to  beat  the  economists  at  their  own 
game,  and  I  feel  that  it  would  be  much  too  perilous  for  me  to  attempt  to 
storm  the  professors'  strong  entrenchments  on  University  Heights.  But 
I  should  like  to  be  allowed  to  give  you  the  point  of  view  of  a  mere  banker 
who  cannot  help  feeling  that  if  the  learned  economists  are  having  a  bully 
good  time  diagnosing  the  ills  and  troubles  of  the  country,  it  is  because  the 
bankers  and  business  men  are  having  a  very  tough  time  trying  to  readjust, 
as  the  well-worn  phrase  goes,  their  own  affairs  to  prevailing  conditions. 

First,  I  would  like  to  say  a  few  words  about  the  business  cycle.  There  is 
no  doubt  that  there  are  ups  and  downs  in  the  affairs  of  men  and  nations, 
and  that  fat  years  have  never  been  remarkable  for  their  staying  powers. 
It  seems  also  to  me  that  a  reasonable  explanation  of  the  musty  bromide, 
"The  higher  the  crest,  the  deeper  the  trough,"  is  to  be  found  in  psychopathy. 
If  we  were  perfectly  sane,  perfectly  balanced,  perfectly  poised,  perfectly 
rational,  the  ups  and  downs  of  business  would  probably  be  less  accentuated, 
but  you  know  that  it  is  quite  normal  for  us  to  be  abnormal,  and  it  is  to  be 
feared  that  for  many  years  to  come  a  very  unreliable  nervous  system  will 
remain  in  control  of  our  poor  human  flesh.  But  I  am  not  speaking  before  a 
congress  of  psychopathists,  and  I  must  return  to  the  economic  fold.  I 
only  hope  that  a  psychopathist  who  is  also  an  economist  (and  since  every- 
body nowadays  is  more  or  less  dabbling  in  economics,  such  a  psychopathist 
may  well  exist)  will  write  on  this  interesting  subject  a  book  whose  title, 
inspired  by  Krafft-Ebbing's  famous  work,  should  be  "Psychopathia  In- 
dustrialis." 

But  I  should  hesitate  to  claim  that  business  cycles  are  scientifically 
established  phenomena,  which  may  eventually  be  brought  under  the  control 
of  all-knowing  and  all-understanding  men.  Periods  of  plenty  and  periods 
of  depression  are  conditioned  b}'  innumerable  causes,  which  can  hardly  be 
foreseen  or  even  catalogued.  One  instance  may  help  to  make  my  point 
clear  to  you.  Switzerland  is  at  present  blessed  with  the  not  enviable  honor 
of  having  her  franc  quoted  above  par  in  New  York,  and  as  a  result  her 
hotels  are  empty,  because  the  tourists  have  gone  to  the  Black  Forest  or  the 
Italian  Lakes,  or  the  Riviera  where  their  pounds  and  their  dollars  have 
a  much  greater  buying  power.  I  wonder  whether  you  can  ascribe  Switzer- 
land's present  position  to  the  business  cycle.  No,  the  economic  destinies 
of  a  nation  or  of  a  group  of  nations  or  even  of  the  world  are  shaped  by  so 


1922]  The  State  of  Our  National  Finances  45 

many  ever-changing  factors  that  it  is  hardly  possible  to  explain  by  a  so- 
called  business  cycle  the  appearances  of  periods  of  bad  business  or  good 
business. 

One  thing  is  more  or  less  sure,  and  that  is  that  our  economic  destinies 
are  to  a  very  great  extent  moulded  by  ever-recurring  factors:  thus  there 
are  ever-recurring  wars,  ever-recurring  plagues,  ever-recurring  droughts, 
ever-recurring  periods  of  saturation,  ever-recurring  periods  of  speculation 
or  what  I  shall  call  business  exhilaration.  In  Egypt  of  old,  the  Nile  drew 
the  curves  which  the  economic  investigators  of  the  Pharaohs  recorded  on 
their  charts;  in  India  the  monsoon  is  the  great  economic  arbiter;  in  Turkey 
it  is  the  cholera ;  in  a  wine-growing  region  it  is  the  phylloxera. 

Now  these  ever-recurring  factors  may  to  a  certain  degree  be  controlled; 
one  can  dam  a  river,  or  irrigate  the  countryside,  or  despatch  doctors  and 
nurses  to  a  threatened  region,  or  call  a  peace  conference  to  avert  a  war,  or, 
since  economists  should  be  put  to  some  useful  purpose,  create  a  bureau 
whose  duty  it  would  be  to  warn — let  us  say — prospective  automobile  manu- 
facturers, that  the  point  of  saturation  has  been  reached  in  the  automobile 
industry.  To  that  extent,  business  vagaries  may  more  or  less  be  corrected, 
but  I  am  afraid  that  I  am  not  ready  as  yet  to  accept  the  all-explaining 
business  cycle  theory  as  a  possible  remedy  to  our  economic  ills  without  a 
very  liberal  helping  of  salt. 

Professor  Seligman  has  pronounced  an  eloquent  plea  for  the  cancellation 
of  the  Allied  debt.  His  noble  idealism  is  traditional  in  the  great  university 
of  which  he  is  one  of  the  most  honored  masters,  but  I  cannot  help  feeling 
that  he  defends  his  point  of  view  with  a  passion  kindled  much  more  by 
his  heart  than  by  his  reason.  First  of  all,  I  think  that  it  is  not  right  to 
brand  the  debt  as  an  unjust  debt.  The  debt  is  a  most  honorable  debt  both 
for  the  debtor  and  the  creditor.  It  was  an  honor  for  us  to  rush  to  our 
embattled  Allies  our  material  help,  and  it  is  an  honor  for  the  Allies  to  owe 
a  debt  which  wrought  victory.  After  all  we  should  not  forget  that  our 
share  in  the  war  is  not  represented  only  by  the  ten  billion  dollars  advanced 
by  our  Treasury.  To  say  that  our  debt  is  unjust  is  almost  tantamount  to 
saying:  The  Allies  gave  their  blood,  America  can  well  afford  to  forget 
her  dollars.  When  we  pegged  the  franc  and  the  pound  sterling,  we  were 
not  precisely  mindful  of  our  dollars.  Tremendous  sums  of  money  were 
spent  in  France  and  in  England  by  the  A.  E.  F.  If  we  had  not  pegged  the 
franc  and  the  pound,  we  would  probably  have  obtained  much  more  for  our 
dollars.  The  sums  we  advanced,  it  is  true,  enabled  our  Allies  to  feed  and 
clothe  their  soldiers,  but  on  the  other  side,  did  we  not  pay  for  everything 
our  army  bought  overseas.^  I  hope  you  will  understand  that  I  am  not 
oblivious  of  the  admiration  and  gratitude  we  owe  to  our  Allies,  but  I  feel 
that  it  is  my  duty  to  explain  to  you  why  I  cannot  regard  our  debt  as  unjust. 

But  now  arises  the  question:  Shall  we  or  shall  we  not  cancel  the  debt? 
I  believe  that  the  moment  is  ill  chosen  to  bring  the  question  in  so  uncom- 
promising a  manner  before  our  people.  Economically  speaking  we  are  at 
present  a  very  much  harassed  people:  the  burden  of  the  taxes,  the  diffi- 
culties and  hardships  brought  upon  us  by  deflation  make  it  very  hard  for 


4.(5  A.  W.  Krech  [March 

the  people  at  large  to  examine  so  important  a  question  in  the  right  spirit. 
Therefore    I  propose  that  we  should  take  a  leaf  out  of  Secretary  Hughes 
book,  and' declare  a  holiday  of  ten  years  during  which  the  debt  would  be 
considered  as  non-existent.     After  the  ten  years  have  elapsed,  the  question 
of  the  cancellation   should  be   taken  up   again.      I   believe   that  these  ten 
years  of  an  absolute   suspension  of  the  effects   of  the  debt,  would  create 
an  atmosphere  of  judicious  aloofness.     We  should  then  be  in  a  much  better 
position  and  also  in  a  much  better  mood  to  approach  so  vast  a  proposition. 
Besides,  let  it  not  be  forgotten  that  the  nations  have  not  as  yet  found  their 
bearings,  they  are  still  uncertain  as  to  which  roads,  political  or  economic, 
they  should  follow,  there  is  still  much  to  be  done  and  much  to  be  undone. 
The  actual  burden  of  the  debt  should  be   removed  during  these  difficult 
years,  and  we  should  say  to  our  debtors :     "You  must  have  but  one  thought 
in  mind;  that  is  to  put  your  own  house  in  order,  and  you  shall  not  during 
the  next  ten  years  be  hampered  in  your  efforts  by  the  demands   of  your 
creditors."     After   all   it  will   be   granted  that   in    1931,   things   may  look 
pretty  different  from  what  they  are  now.     Our  debtors  are  hardy  people 
who  have  weathered  more  than  one  storm,  and  ten  years  should  witness 
great  changes  for  the  better  in  their  affairs.     But  the  point  is  not  so  much 
to  wait  ten  years  in  the  hope  that  then  our  Allies  may  be  in  a  position  to 
pay  easily  their  debt;  my  proposition  is  not  a  veiled  moratorium.      I  con- 
ceived it  in  the  hope  that  ten  years  hence,  conditions  both  in  this  country 
and  abroad  will  have  prepared  a  better  terrain  for  the  discussion  of  the 

problem. 

It   would   take    more    than   the   ten   minutes   which   are    allotted   to    the 
gentlemen  who  come  on  the  program  under  the  heading  "Discussions"  to 
go  more  deeply  into  the  examination  of  my  proposition.      I   shall  merely 
ask  you  to  have  in  mind  that  when  all  has  been  said  and  done,  the  reorganiza- 
tion of  Europe,  in  spite  of  many  admirable  and  even  successful  efforts,  is 
still  in  its  first  stages.     The  reparations  which  have  so  often  been  revised, 
have  not  as  yet  taken  on  a   definite   form.      The  Allied  world,  and  more 
especially   London   and   Rome,  begin   to   realize   that   German   reparations 
may  under  certain  conditions  become  a  curse  in  disguise.     Walter  Rathenau 
speaking  in  Munich  on  September  28,  at  a  meeting  of  the  Association  of 
German    Industries,    boldly    declared:     "Complete    fulfilment    of    all    the 
demands  made  upon  us  by  the  Versailles  Treaty  and  the  ultimatum,  would 
injure  the  world's  economic  system  to  a  far  greater  extent  than  it  would 
us."   It  is  not  for  Germany  to  say  we  cannot  pay;  the  world's  economic 
system  "will  one  day  utter  a  no7i  possumus,  and  we  in  Germany  shall  live 
to  see  that  day."     And  it  must  be  conceded  that  these  words  in  the  mouth 
of  the  able  member  of  the  cabinet  of  fulfilment,  whose  earnest  desire  to 
come  to  some  kind  of  an  agreement  at  Wiesbaden  was  acknowledged  by 
M.  Loucheur,  carry  a  good  deal   of  significance.      Rathenau  advocated  at 
Wiesbaden  that  Germany  pay  in  kind,  but  in  his  Munich  speech  he  says: 
"The  fact  that  Germany  has  to  produce  goods  on  this  unprecedented  scale, 
and    throw    thorn    on    the    world's    markets,   causes    unemployment    not    to 
diminish,  but  to  increase."     And  there   is   a  terrible  hint   for  the  rest  of 


1922]  The  State  of  Our  National  Finances  47 

the  world  in  Rathenau's  statement  that  there  is  no  unemployment  in 
Germany.  No  wonder  that  there  is  plenty  of  work  in  Germany  if,  as  we 
read  the  other  day,  the  Spanish  government  has  a  good  deal  of  its  printing 
done  in  Berlin.  In  Belgium  there  is  an  outcry  against  German  imports. 
The  Messagero  claims  that  the  steady  rise  in  German  imports  threatens  to 
ruin  the  struggling  Italian  industries. 

But  then  if  Germany  is  to  pay,  she  must  pay  with  goods.  Rathenau 
may  be  right  when  he  says  that  Germany  won  her  great  economic  position 
not  by  wealth,  not  by  her  geographical  situation,  but  by  organization,  dis- 
cipline, advanced  scientific  knowledge,  and  work.  Germany  instead  of 
paying  in  gold,  which  is  impossible,  may  well  be  in  a  position  to  make 
payment  in  kind,  but  the  question  remains :  Can  the  world  afford  to 
accept  such  payments  in  kind.^  I  am  afraid  that  the  Vergilian  line  Timeo 
Danaos  et  dona  ferentes  could  be  written  across  many  a  reparation  clause: 
"I  fear  the  Germans  bearing  reparations." 

Before  leaving  this  platform,  I  should  like — ladies  and  gentlemen  of  the 
American  Economic  Association — to  express  my  appreciation  for  the  work 
you  are  performing.  We  men  of  the  business  world  have  our  eyes  fixed 
upon  the  few  concrete  business  propositions  which  claim  our  attention. 
Your  gaze,  on  the  contrary,  seeks  a  higher  aim:  The  weal  of  the  com- 
munity. We  see  a  few  trees,  you  see  the  forest.  You  must  guide  us.  You 
are,  if  I  may  use  the  beautiful  old  English  expression,  the  keepers  of  the 
business  man's  conscience. 

J.  T.  HoLDswoRTH. — In  the  brief  time  I  have  had  to  examine  Professor 
Seligman's  admirable  paper,  I  find  myself  in  general  accord  with  his 
analysis  of  the  nation's  finances  in  so  far  as  it  has  to  do  with  the  domestic 
situation.  Surely  there  will  be  no  dissent  from  his  conclusion  as  to  the 
effectiveness  or  the  providential  availability  of  an  elastic  currency  and 
credit  system  in  the  most  trying  period  of  our  existence.  Though  the 
federal  reserve  system  has  been  much  lauded  in  some  quarters — and  because 
of  the  tirades  recently  directed  against  it  by  one  of  its  former  ex-officio 
administrators  it  has  to  that  extent  raised  itself  above  the  level  of  honest 
criticism — the  public  at  large  does  not  yet  adequately  appreciate  the  won- 
derful achievements  of  the  system  during  the  period  of  war  inflation  and 
no  less  the  period  of  deflation  since  the  war. 

In  general,  too,  assent  will  be  accorded  Professor  Seligman's  contention 
as  to  the  danger  inherent  in  unrestrained  competition  among  our  numerous 
banks,  though  there  may  be  a  division  of  opinion  as  to  the  wisdom  of  branch 
banking,  or,  at  least,  as  to  the  unlimited  creation  of  branch  banks.  It  does 
seem  probable,  however,  that  a  limited  measure  of  branch  banking  is  inevi- 
table in  our  American  system. 

While  there  may  be  room  for  difference  of  opinion  as  to  the  wisdom  or 
intelligence  of  our  war  finance  policy.  Professor  Seligman  puts  his  finger 
upon  some  of  the  obvious  errors  in  that  policy.  The  consequences  of  the 
government's  refusal  to  pay  the  market  rate  of  interest  on  government  loans 
as  foreign  countries  did,  and  of  the  overdependence  upon  taxes  on  wealth, 


48  J.  T.  Holdsworth  [March 

with  accompanying  tax  exemption  and  the  iniquitious  excess-profits  tax, 
are  very  logically  and  interestingly  set  forth  in  Professor  Seligman's 
paper. 

He  is  equally  happy  in  his  insistence,  when  discussing  the  expenditure 
side  of  our  national  balance  sheet,  upon  the  need  for  retrenchment  and  for 
a  policy  which  will  secure  economy  while  still  assuring  efficiency.  The 
adoption  of  a  new  budget  system  gives  promise  of  initial  control  over 
expenditures  that  will  facilitate  national  economy,  but  the  promise  of  this 
new  reform  will  fail  of  realization  unless  there  is  everywhere  throughout 
the  nation  a  supporting  attitude  of  retrenchment  and  economy  and  a  vigor- 
ous, organized  public  opinion  to  fortify  every  advance  thus  made  in  the  line 
of  budgetary  control. 

Coming  now  to  the  discussion  of  the  Allied  indebtedness  I  find  that  I 
cannot  follow  so  unreservedly  his  arguments  and  conclusions.  He  has 
little  patience  with  those  who  consider  this  a  just  debt  and  less,  apparently, 
with  those  who  would  seek  to  defend  such  payment  on  economic  grounds. 
In  considering  the  justness  of  the  debt  Professor  Seligman  would  explain 
the  almost  simultaneous  appearance  of  war  profits  taxes  in  every  country 
"on  the  ground  of  conviction  that  it  is  illicit  for  an  individual  to  make 
profits  out  of  the  blood  and  misery  of  his  fellow-countrymen  in  so  fearful 
a  crisis."  But  it  may  be  questioned  whether  this  was  the  dominating 
motive — or,  rather,  was  it  that  war-profits  taxes  were  resorted  to  as  one 
of  the  easiest  and  most  immediately  available  sources  of  revenue  for  the 
government  ? 

Is  it  strictly  true  that  "the  revolution  which  converted  us  from  a  debtor 

to  a  creditor  nation is   due   to   the   fact  that   for   two   and   one-half 

years  we  made  these  enormous  profits".'*  What  if  we  had  remained  out  of 
the  war,  "too  proud  to  fight,"  and  still  made  loans  and  sold  war  supplies 
to  the  Allies;  or  what  if  we  had  entered  the  war  in  1914,  making  loans 
and  sales  of  material  to  the  Allies  in  even  larger  amounts.''  If  it  is  just 
to  cancel  the  Allied  debt  should  not  Liberty  bond  holders  likewise  cancel 
their  individual  claims  upon  the  government?  The  fact  that  our  govern- 
ment is  better  able  to  pay,  though  payment  of  the  principal  may  be  longer 
deferred,  to  individual  bondholders  than  are  the  Allied  governments  to  pay 
our  government,  surely  does  not  affect  the  principle  here  involved. 

Again,  Professor  Seligman  says  that  had  we  been  in  the  war  from 
the  beginning — as  we  should  have  been,  in  which  case  it  would  have  been 
shortened  by  many  months  and  the  total  war  expenditure  correspondingly 
reduced — we  should  not  have  had  10  billions  of  assets  to  count  but  ten 
times  10  billions  of  the  debt  as  our  share  of  the  cost  of  the  war.  But  this 
probable  bill  would  be  owed  largely  to  our  own  people.  Would  we  then 
consider  tlie  repudiation  of  these  obligations  ?  Or  would  repudiation  apply 
only  to  those  holders  of  the  debt  who  did  not  don  khaki,  or  who  got  into 
the  fight  late,  or  who  did  not  get  overseas.''  Waiving  the  question  of 
whether  we  "emerged  as  the  real  beneficiary  of  the  war,"  but  doubting 
whether  any  nation  ever  can  emerge  from  modern  warfare  a  beneficiary, 
we  inquire  hoAV  this  can  affect  the  justice  of  the  debt? 


1922]  The  State  of  Our  National  Finances  49 

Turning  to  the  economic  aspects  of  payment  of  the  Allied  debt^  the  ground 
seems  equally  debatable.  Indeed,  Professor  Seligman  admits  that  it  may 
not  be  the  part  of  wisdom  to  cancel  the  existing  indebtedness.  The  fact 
that  the  Allies  cannot  now  pay  in  gold  and  that  such  payment  if  available 
would  be  disastrous  alike  to  them  and  to  us,  does  not  close  the  case.  The 
bulk  of  the  debt  must  be  paid  largely  as  all  international  indebtedness  is 
settled,  in  goods  and  services.  But  it  may  be  urged  that  the  heavy  trade 
balance  due  us  annually  from  abroad  as  a  consequence  of  the  predominance 
of  our  exports  over  imports  will  render  it  impossible  to  discharge  the 
debt  by  means  of  commodity  exports. 

In  view  of  the  unsettled  condition  of  European  industry  and  finance,  of 
the  depreciated  and  fluctuating  exchanges,  and  of  the  enormously  heavy 
tax  burdens,  existing  or  prospective,  pressure  for  prompt  payment  of  either 
principal  or  interest  at  any  early  date  would  be  most  unwise.  But  eventual 
payment  under  a  generously  elastic  funding  arrangement  is  both  possible 
and  probable.  Despite  the  vmconscionable  hesitation  and  delay  of  Congress, 
provision  is  slowly  being  evolved  to  effect  such  arrangement.  Granting 
the  restoration  of  normal  economic  activity  in  Europe,  partially  relieved 
as  a  consequence  of  the  Disarmament  Conference  of  the  huge  financial 
burden  of  preparation  for  future  wars,  given  a  decade  of  economy  and 
retrenchment,  and  the  Allied  governments  will  be  in  a  position  to  begin 
the  regular  payment  of  interest  and  to  amortize  the  principal  of  their  debt 
to  the  United  States.  The  burden  of  settling  for  past  wars  will  be  less 
irksome  than  that  of  earlier  days  devoted  to  preparation  for  future  wars, 
and  the  disturbance  to  the  international  money  markets  and  exchange  long 
since  stabilized  will  be  inconsiderable. 

In  passing  it  should  be  noted  that  much  of  the  contention  for  cancellation 
of  the  foreign  debts  rests  upon  the  doubtful  assumption  that  the  present 
balance  of  trade  so  heavily  in  favor  of  the  United  States  will  continue. 
During  the  past  few  months  the  tide  of  our  export  trade  has  ebbed  markedly 
with  corresponding  rise  in  imports.  There  are  those  who  believe  that  the 
not  distant  future  will  witness  a  reversal  of  our  international  status  when 
imports  will  exceed  exports,  when  our  huge  horde  of  gold  now  swollen 
to  45  per  cent  of  the  world's  total  will  be  required  to  meet  our  debtor 
obligations,  and  when  the  heavy  investments  which,  in  the  very  nature  of 
the  international  situation  we  will  make  in  foreign  countries  in  the  next  few 
years,  will  have  to  be  made  available  for  the  settlement  of  unfavorable 
trade  balances,  as  has  been  the  case  with  England  for  decades  past.  It 
must  be  said,  however,  that  such  an  evolution — call  it  devolution  if  you 
will — will  be  checked,  and  the  whole  operation  of  debt  payment  be  made 
exceedingly  difficult  if  the  apparent  purpose  of  Congress  to  erect  high 
and  yet  higher  tariff  barriers  against  the  trade  of  our  debtors  and  the 
rest  of  the  world  becomes  effective. 

Finally,  let  it  be  said  that  in  the  interest  of  world  peace  these  war  obliga- 
tions should  remain  inviolable.  If  denied,  what  nation  will  be  able  in  the 
event  of  attack  by  a  stronger  foe  to  obtain  financial  aid  from  a  non- 
combatant  ?     Where,    for    example,    would    England,    attacked    fifty    years 


50  J.  T.  Holdsworth  [March 

hence  by  Russia  or  China,  turn  for  a  loan?  Were  not  the  obligations  of 
earlier  war  loans  remitted  or  cancelled  with  resulting  increase  of  the  tax 
burden  for  years  upon  those  who  advanced  the  loans?  Who  then  will 
buy  the  bonds  of  a  country  which  history  records  as  having  sought  or 
received  cancellation  of  its  obligations?  Is  the  financial  integrity  of  a 
government  less  sacred  than  that  of  its  citizens? 

Great  Britain  has  arranged  to  begin  payment  of  the  debt  owed  to  the 
United  States  at  the  rate  of  50  million  pounds  yearly,  and  Sir  Robert 
Home,  Cliancellor  of  the  Exchequer,  has  recently  said :  "Our  attitude 
in  regard  to  our  debts  must  be  that  what  we  owe  we  shall  always  be  pre- 
pared to  pay,  and  that  we  shall  meet  our  obligations  however  hard  and 
difficult  the  circumstances  may  be."  The  continued  talk  of  cancellation 
of  these  debts  has  certainly  not  enchanced  faith  in  European  credits.  With 
the  appointment  of  the  commission  to  arrange  for  their  settlement  all  such 
talk  should  now  cease  and  the  debtor  nations  should  act  upon  the  assumption 
that  they  will  be  required  to  pay.  The  clearing  away  of  this  cloud  of  uncer- 
tainty should  go  far  toward  restoring  international  confidence  and  improving 
the  international  credit  situation. 

Reverting  to  the  domestic  aspects  of  the  problem  of  national  finance,  I 
feel  that  Professor  Seligman  is  on  familiar  and  firmer  ground,  where 
because  of  his  recognized  authority  it  may,  perhaps,  be  presumptuous  to 
follow.  He  clearly  illuminates  the  sliifting  of  the  tax  controversy  from 
the  merits  of  direct  versus  indirect  taxes  to  those  of  consumption  taxes 
versus  taxes  upon  wealth,  or  savings,  or  income. 

The  war  has  left  no  more  forbidding  trail  than  that  of  heavily  increased 
tax  burdens  which  even  our  children's  children  must  follow.  And  the  trail 
winds.  The  complexities  of  the  post-war  situation  make  it  difficult  to  lay 
out  a  straiglit  road  of  taxation  upon  the  basis  of  fairness  and  justice.  Yet 
we  have  the  experience  of  the  past  to  guide  and  the  mistakes  of  the  war 
period  to  warn  in  shaping  our  course.  We  shall  not  soon  repeat  the 
egregious  blunders  of  the  excess-profits  tax,  but  it  does  not  seem  that  our 
legislative  engineers  have  learned  anything  from  past  mistakes  in  the 
matter  of  oppressive  surtaxes  or  of  the  repressive  policy  of  "soaking  the 
rich."  Whatever  may  be  said  of  the  expediency  or  wisdom  of  taxing 
excess  profits  in  time  of  war,  a  fiscal  policy  which  in  times  of  peace  and  of 
post-war  business  deflation  seeks  or,  by  indirection  such  as  arises  from 
the  exemption  of  securities  from  taxation,  accomplishes  the  paralysis  of 
business  enterprise,  is  nothing  short  of  economic  stupidity.  That  business 
must  continue  to  carry  a  very  heavy  burden  of  taxation  seems  assured; 
that  business  skill,  enterprise,  and  initiative  shall  still  be  subjected  to  the 
palsy  of  the  dead  hand  reflects  upon  America's  reputation  for  solid  common 
sense.  As  Professor  Seligman  points  out,  excessive  taxes  upon  wealth  and 
industry,  and  particularly  the  virus  of  tax-exemption  of  increasingly  huge 
masses  of  securities,  will,  if  continued,  destroy  that  business  virility  upon 
which  continuous,  economical  production  essential  to  the  resumption  of 
national  pros])erity  so  largely  depends. 

While    agreeing    with    Professor    Seligman    that    dangers    lurk    in   wide- 


1922]  The  State  of  Our  National  Finances  51 

spread  consumption  taxes,  and  that  the  principle  of  ability  to  pay  must 
be  preserved  as  the  mainspring  of  our  revenue  system,  and  admitting  that 
a  general  sales  tax  violates  "the  economic  and  ethical  canons  of  taxation," 
it  may  be  urged  that  as  a  temporary  measure  a  sales  tax  has  much  to  com- 
mend it  in  the  existing  fiscal  situation.  It  is  probable  that  an  income  tax 
simplified  in  form,  equitable  in  its  incidence,  and  lighter  in  its  burden 
upon  those  of  small  means,  has  become  a  fixture  in  our  revenue  system. 
In  order  to  lighten  the  tax  burden  now  pressing  with  undue  weight  upon 
wealth  and  business,  it  seems  necessary  and  expedient  until  a  more  nearly 
normal  order  be  restored  to  distribute  the  burden  over  a  wider  group  area 
by  resort  to  a  sales  tax.  With  a  decreasing  national  budget  the  spread  of 
this  tax  may  in  time  be  gradually  restricted  and  eventually  replaced  bv 
consumption  taxes  through  import  duties  and  excise  dues  upon  the  small 
group  of  articles  familiar  before  the  war. 

The  solution  Professor  Seligman  proposes  of  the  problem  existing  in  the 
high  rates  of  surtaxes  is  feasible  and  commendable.  The  tax  upon  in- 
heritances can  be  materially  increased  without  injustice  to  the  several  states 
imposing  similar  taxes,  without  arousing  general  opposition,  and  without 
stirring  up  anew  the  controversy  as  to  whether  the  inheritance  tax  should 
be  regarded  merely  as  a  capitalized  income  tax.  Not  the  least  commendable 
feature  of  the  inheritance  tax  is  the  comparative  simplicity  and  economy 
of  its  administration. 

Regarding  the  taxation  of  corporations  as  a  means  of  securing  reduction 
in  the  income  tax,  it  should  be  frankly  recognized  that,  with  the  evolution 
of  our  income  tax  system,  the  attempt  to  sustain  equivalence  between  the 
tax  upon  corporate  and  that  upon  individual  income  must  be  abandoned. 
Recognizing  their  essential  difference,  the  problem  becomes  one  of  devising 
a  fair  workable  business  tax  based  upon  net  earnings,  applicable  to  all 
business  enterprises  and  to  all  profits,  distributed  or  undistributed. 

We  return  once  more  and  in  conclusion  to  the  pressing  question  of  tax 
exemption  of  securities.  Without  attempting  a  recapitulation  of  the  argu- 
ments now  generally  understood  against  the  exemption  of  securities  from 
taxation,  emphasis  should  be  laid  upon  tlie  necessity  of  arousing  public 
opinion  to  the  growing  menace  in  this  situation.  The  tax-free  investment 
affords  shelter  and  peace  to  the  business  man  and  the  man  of  means 
harassed  by  the  worries,  uncertainties  and  inequities  of  excessive  surtaxes. 
This  combination  of  evils  not  only  works  inequality  in  the  tax  burden  and 
reduction  of  revenue  for  the  government,  but  more  it  tends  to  stifle  those 
qualities  of  business  enterprise  and  courage  which  have  made  American 
industry  great  and  which  if  now  released  and  encouraged  will  make  her  still 
greater  in  business  achievement  and  in  her  service  to  the  world. 

E.  L.  BoGART. — I  am  glad  to  align  myself  with  Professor  Seligman  and 
Mr.  Rovensky  on  the  subject  of  the  cancellation  of  our  foreign  indebtedness. 
But  in  taking  this  stand  I  should  like  to  emphasize,  not  the  ethical  argu- 
ments, but  the  economic  ones  in  favor  of  such  action.  And  in  doing  this  I 
should  like  to  present  the  matter  from  the  point  of  view  of  the  effect  of 


52  E.  L.  Bogart  [March 

payment  upon  the  debtor  nations  of  Europe  rather  than  of  the  effects  upon 
the  United  States,  especially  since  these  latter  have  been  so  forcibly 
presented  by  Professor  Seligman. 

This  foreign  indebtedness  might  be  paid,  in  the  first  place,  by  the  ship- 
ment to  this  country  of  gold.  But  the  debtor  nations  have  not  got  the  gold 
to  ship,  and  if  they  had  it,  it  would  be  economically  unwise  of  us  to  demand 
it  of  them.  The  reestablishment  of  the  gold  standard  by  them  will  be 
possible  only  if  the}'  not  only  retain  this  gold,  but  also  add  to  their  holdings. 
Such  a  consummation,  with  the  attendant  correction  of  disordered  foreign 
exchanges,  would  certainly  be  to  the  advantage  of  the  United  States,  and 
nothing  should  be  done  by  us  which  would  prevent  an  early  realization 
of  this  end.  The  world  is  too  much  of  a  piece  today  for  the  injury  of  one 
part  not  to  hurt  the  others. 

If  the  debtor  nations  cannot,  or  ought  not,  pay  in  gold,  then  they  must 
pay  in  goods  and  services.  Whether  it  be  true,  as  Professor  Seligman 
urges,  that  we  do  not  wish  these  foreign  goods  to  flood  this  country,  or  not, 
I  do  not  intend  to  argue.  I  wish  rather  to  emphasize  the  point  that  it  is  not 
to  our  interest  to  deprive  Europe  at  this  time  of  these  goods  and  services. 
The  United  States  is  vitally  interested  in  the  speedy  restoration  of  European 
industry  and  economic  well-being.  Our  industries  are  even  now  suffering 
because  of  the  lessened  purchasing  power  of  some  of  our  best  customers 
in  that  part  of  the  world.  Our  first  efforts,  as  those  of  the  recent  bellig- 
erents themselves,  must  be  the  speedy  and  complete  economic  rehabilitation 
and  reconstruction  of  Europe.  On  this  point  Mr.  Vanderlip's  recent  pro- 
posal has  the  merit  of  going  to  the  very  heart  of  the  problem.  The  labor 
and  capital  of  Europe  can  be  better  applied  to  repair  the  ravages  of  war 
than  to  pay  their  debts  to  us,  and  such  a  procedure  will  profit  not  only 
themselves  but  us  as  well.  Even  if  the  debtor  nations  could  pay,  it  would 
be  unwise  to  insist  upon  payment.  But  at  present  and  probably  for  a  long 
time  to  come  they  are  and  will  be  unable  to  pay.  What  we  cannot  collect 
we  may  therefore  forgive. 

Though  advocating  the  cancellation  of  this  foreign  indebtedness,  I  should, 
however,  endeavor  to  make  it  at  the  same  time  an  instrument  of  reform. 
We  might  fairly  demand,  in  return  for  a  gradual  and  progressive  cancel- 
lation of  these  debts,  that  the  debtor  nations  balance  their  budgets,  that 
they  stop  the  further  emission  of  paper  money  and  that  they  apply  their 
resources  to  economic  purposes  rather  than  to  armament.  Cancellation 
might,  therefore,  be  made  a  means  of  obtaining  financial  stability  and  eco- 
nomic progress,  without  the  future  complications  involved  in  a  scheme  of 
postponment  such  as  Dr.  Holdsworth  suggests. 


BUSINESS  TEACHING  BY  THE  CASE  SYSTEM' 

Fifty  years  ago  when  Professor  Langdell  introduced  the  use  of 
selected  reported  decisions  of  the  courts  into  the  Harvard  Law  School 
as  the  basis  of  classroom  instruction,  his  idea  was  not  received  with 
the  greatest  confidence,  nor  was  it  immediately  adopted  by  other  law 
schools.  For  years  after  the  case  system  was  first  introduced  its 
acceptance  at  other  institutions  was  slow  and  it  continued  to  arouse 
active  controversy.  Now  very  little  is  written  about  it.  The  ortho- 
dox method  of  teaching  law  today  is  the  case  system.  In  law  schools 
of  the  highest  standards,  it  is  used  almost  universally  and  success- 
fully, having  displaced  the  more  rapid  but  less  thorough  textbook 
and  lecture  method  of  approach.  It  is  a  fair  generalization  that 
to  a  greater  extent  than  any  other  process,  the  case  system  develops 
those  powers  of  analysis  and  synthesis  which  are  essential  to  the 
practice  of  law.  Yet,  notwithstanding  this  extraordinary  success,  the 
method  has  never  established  itself  generally  outside  the  teaching  of 
law. 

A  study  of  the  case  system  as  it  now  is  used  in  the  law  schools  of 
this  counti-y  reveals  certain  limitations  of  the  system  and  its  applica- 
tion which  no  doubt  account  for  its  use  having  been  most  successful 
only  in  law  schools  of  the  highest  grade.     Mr.  Alfred  Z.  Reed    says: 

Three  conditions  are  essential  to  the  successful  working  of  the  case 
method.  The  first  is  that  the  bulk  of  the  students  should  not  be  boys,  but 
men,  hardened  by  their  previous  training  to  undergo  the  rigors  of  severe 
intellectual  labor more  indispensable  than  this,  however,  is  the  neces- 
sity that  the  students  should  have  time  to  study  their  cases  in  preparation 
for  the  classroom  discussion.  Finally,  although  any  method  of  teaching 
presupposes,  for  its  successful  operation,  an  efficient  corps  of  teachers, 
this  condition  is  peculiarly  necessary  when  the  students'  ultimate  guide  is  a 
man  and  not  a  book. 

Whatever  weight  is  given  to  tliose  points  there  are  certain  limitations 
which  may  affect  the  application  of  the  case  method  of  teaching  to 
other  fields.  Primarily,  it  appears  to  be  applicable  only  where  the 
principal  effort  is  to  develop  the  students'  power  of  analysis  and 
synthesis.      Secondly,  the  substance  of  the  method  depends  upon  the 

'The  appearance  in  the  last  two  years  of  several  case  books  in  business  has  raised 
tlie  question  as  to  what  extent  the  case  system  of  the  law  schools  is  applicable 
to  other  teaching  and  particularly  to  instruction  in  business.  Since  I  have  had 
experience  only  in  the  application  of  the  case  method  to  business  instruction  I  am 
confining  this  discussion  to  that  particular  field.  The  principle  may  or  may  not 
have  wider  application  but  I  have  not  sufBcient  knowledge  of  other  fields  to  make, 
or  even  suggest,  its  application. 

^The  Carnegie  Foundation  for  Advancement  of  Teacliing,  Training  for  the  Public 
Profession  of  Law,  bulletin  no.  15. 


54  Wallace  B.  Donham  [March 

ability  of  the  instructor  to  draw  upon  a  wide  variety  of  written  cases. 
The  field  in  which  it  is  to  be  applied,  moreover,  must  be  thoroughly 
classified.  Another  serious  objection  to  the  case  system  is  that  it  is 
not  a  rapid  method  of  transmitting  facts. 

If  the  difficulties  which  these  limitations  raise  cannot  be  adjusted  it 
is  obvious  that  the  method  cannot  be  extended  into  further  types  or 
fields  of  teaching.      Some  of  the  limitations  are  probably  fundamental. 
For  example,  it  would  be  very  unwise  to  attempt  to  apply  the  case 
system  to  any  branch  of  teaching  where  analysis  and  synthesis  do  not 
have  a  major  part,  nor  would  it  be  wise  to  attempt  to  cover  an  ex- 
tremely broad  field  in  a  limited  length  of  time.     Where  speed  is  of  the 
essence,  or  where  the  end  desired  is  the  easy  acquisition  of  facts  as 
distinguished  from  an  effective  command  over  the  use  of  such  facts, 
the  case  system  is  clearly  not  adapted  for  the  purpose.     Even  in  the 
teaching  of  law  the  method  has  not  proved  itself  in  schools  which  exist 
primarily  as  "cramming"  schools.      This  type  of  limitation  is,  how- 
ever, no  more  serious  and  of  no  wider  application  in  the  teaching  of 
business  than  it  is  for  the  teaching  of  law.      In  each  of  these  fields  the 
training  of  the  student  is  of  little  value  to  him  unless  it  gives  him 
command  over  new  concrete  situations  through  his  ability  to  reason 
back  from  these  situations  to  the  principles  involved ;  and  unless  he  can 
apply  to  new  facts  the  lessons  of  similar  events  in  the  past.     Although 
the  other  limitations  raise  very  serious  and  difficult  problems,  these  are 
perhaps  not  impossible  of  solution.      A  careful  analysis  may  lead  to 
the  conclusion  that  the  difficulties  of  extending  the  method  to  the  teach- 
ing of  business  are  practical  rather  than  fundamental ;  and,  indeed, 
such  experimenting  as  has  been  done  appears  to  suggest  this  result. 
So  far  as  can  be  seen  all  the  obstacles  which  are  encountered  yield  to 
study    and    research.      Frequent   modification    and    limitations    of    the 
technique  of  the  law  school  prove  both  desirable  and  practical,  but  the 
essentials  remain  unchanged.     The  following  brief  discussion  of  prob- 
lems which  are  met  in  applying  the  method  is  limited  to  the  teaching  of 
business. 

Anabasis  of  the  Case  Sijstem  of  Teaching  Law 

Early  in  the  study  of  the  problem  it  is  necessary  to  analyze  and 
state  the  case  system  as  it  has  been  developed  in  teaching  law,  for 
without  such  an  analysis  it  is  impossible  to  separate  the  essential  cle- 
ment from  the  mass  of  teclniical  material  and  practices  which  are 
customary  in  the  teaching  of  law.  Five  points  appear  to  stand  out  in 
sucli  an  analysis. 

First,  tlie  case  system  of  teaching  law  in  its  present  form  is  made 
possible  by  the  centuries  of  rcjjorted  decisions  which  form  the  heritage 


1922]  Business  Teaching  by  the  Case  System  56 

of  the  common  law.  Professor  Langdell  would  not  have  developed 
his  method  if  there  had  not  been  reported  cases ;  or  if  the  doctrine  of 
stare  decisis  had  never  developed ;  or  if  the  lawyer  searching  for  light 
on  his  law  problems  customariU^  focussed  his  attention  on  the  re- 
actions of  the  treatise  writer  instead  of  on  the  decisions  of  the  court. 
The  case  system  of  the  teacher  of  law  is  dependent  on  the  reported 
decisions  of  the  courts  and  the  extension  of  the  method  into  other 
subject-matters  will  depend  on  the  creation  of  effective  substitutes  for 
these  cases. 

Second,  the  case  sj'stem  in  practical  operation  is  based  upon  a 
thorough  classification  of  the  subject-matter  made  by  the  instructor. 
It  assumes  that  the  common  law  is  a  science  developed  by  the  courts 
from  the  precedents.  Yet  the  law  is  far  from  being  an  exact  science. 
In  fact  it  has  been  developed  by  the  method  of  trial  and  error  to  per- 
haps a  greater  extent  than  economics.  To  the  extent  that  a  scientific 
basis  is  essential  to  the  use  of  the  case  system,  economics  probably  has 
at  the  present  time  an  advantage  in  this  respect  over  business.  As  a 
matter  of  fact,  however,  all  of  these  subjects — law,  business,  and  eco- 
nomics— ma}^  broadly  be  considered  sciences  based  in  part  on  prece- 
dents and  customs  and  in  part  on  natural  and  economic  laws.  The 
underlying  principles  may  in  numerous  instances  be  discovered  by  anal- 
ysis and  applied  to  new  facts.  After  all,  the  assumption  underlying  the 
teaching  of  all  such  subjects  (except  historically)  is  that  they  are  not 
haphazard  but  that  they  are  capable  of  systematic  presentation.  If 
so,  the  principles  may  be  iaught  by  an  inductive  method  and  in 
numerous  instances  the  inductive  teaching  of  economics  is  already 
being  acomplished.  The  extension  of  this  inductive  method  into  a  true 
case  system  of  teaching  business  does  not  present  insuperable  difficulties 
arising  out  of  the  nature  of  the  subject. 

Third,  the  system  is  made  practicable  by  compilations  of  books  con- 
taining a  limited  number  of  cases  chosen  by  the  editor  because  in  his 
opinion  they  best  illustrate  or  help  to  develop  the  legal  principles  he 
wishes  to  teach.  Given  the  raw  material,  such  compilations  may 
readily  be  made  in  other  fields.  We  already  possess  several  such  case 
books  of  business. 

Fourth,  the  collected  cases  of  the  law  customarily  include  (a)  the 
statement  of  facts,  (b)  the  limitation  to  an  issue  or  legal  problem, 
(c)  the  opinion  of  the  court,  (d)  the  decision.  All  of  these  elements 
or  effective  substitutes  may  be  supplied  in  a  business  case  to  such 
extent  as  turns  out  to  be  desirable.  It  is  of  course  impossible  that 
business  discussions  of  business  problems  should  possess  an  authority 
comparable  to  the  opinion  of  the  court  or  that  the  decision  arrived  at 
with  reference  to  a  business  problem  should  have  weight  comparable  to 


56  Wallace  B.  Donham  [March 

the  decisions  of  a  court,  but  these  limitations  in  practice  often  add  to 
the  vivacity  of  a  classroom  discussion.  Indeed,  experience  clearly 
indicates  that,  although  frequently  wise,  neither  an  opinion  nor  a 
decision  is  essential  to  the  successful  classroom  use  of  a  business  case. 

As  the  technique  of  presenting  business  cases  develops,  ways  of 
including  elements  similar  to  the  opinions  of  the  court  are  constantly 
suggested.  It  is  clear  that  models  of  analytical  methods  of  attacking 
business  problems  may  be  employed  in  such  a  manner  that  they  fulfil 
the  teaching  function  of  the  opinion  of  the  court. 

Fifth,  the  general  principles  involved  in  a  law  case  or  cases  are 
developed  through  the  discussion  of  concrete  decisions  reached  by 
the  court  on  facts  which  actually  occurred.  This  classroom  discussion 
largely  or  wholly  displaces  the  lecture  as  a  medium  for  the  presenta- 
tion of  principles.  In  operation  the  burden  of  the  systematic  devel- 
opment of  the  subject  by  and  through  such  discussion  rests  heavily  on 
the  instructor.  The  development  of  thought  under  the  case  system 
is  always  from  the  concrete  to  the  abstract,  from  the  particular  situa- 
tion to  the  broad  principle.  The  distinguishing  characteristic  which 
makes  the  case  system  of  teaching  law,  in  the  hands  of  a  competent 
instructor,  an  instrument  of  great  power  is  the  fact  that  it  arouses 
the  interest  of  the  student  through  its  realistic  flavor  and  then  makes 
him  under  the  guidance  of  the  instructor  an  active  rather  than  a 
passive  participant  in  the  instruction.  Under  this  participation  he 
analyzes  and  thinks  systematically  on  legal  subjects.  Experience  dem- 
onstrates that  this  element  of  aggressive  interest  on  the  part  of  the 
student  in  practice  develops  from  the  consideration  of  a  good  business 
case  to  an  extent  not  surpassed  in  the  teaching  of  law. 

The  characteristics,  therefore,  which  appear  to  be  typical  of  the 
case  s^'stem  of  the  law  are:  the  vast  number  of  published  decisions, 
the  thorough  classification  of  the  subject,  published  case  books,  the 
elements  in  the  typical  law  case,  and  the  development  of  general  prin- 
ciples from  the  discussion  of  individual  cases.  Of  these  elements  it 
appears  clear  that  all,  with  the  exception  of  the  reported  cases  them- 
selves, exist  already  or  may  be  supplied  for  teaching  business.  The 
problem  of  extending  the  system  to  teaching  business  becomes,  there- 
fore, the  problem  of  securing  the  facts  about  properly  classified 
business  situations  or  cases  and  presenting  them  in  such  form  that 
they  may  be  used  effectively  as  the  basis  for  classroom  discussion. 

Securing  Cases  for  Teaching  Business 

Clearly  in  no  other  subdivision  of  knowledge  is  there  a  mine  of 
publislied  material  comparable  to  the  reported  cases  of  the  common 
law.      This  lack  of  published  cases  outside  the  law  coupled  with  the 


1922]  Business  Teaching  hy  the  Case  System  57 

extreme  difficulty  of  getting  material  of  a  similar  nature  in  other 
subjects  appears  to  be  the  basic  reason  for  the  failure  of  the  case 
system  to  extend  generally  into  other  fields. 

Case  material  for  teaching  business  is  to  be  obtained  only  through 
research  undertaken  solely  because  of  the  value  of  such  cases  for  the 
teaching  of  business.  These  business  cases'  are  not  to  be  found  ready 
made.  The  business  case  is  of  course  not  generally  a  litigious  situa- 
tion but  rather  a  practical  set  of  facts  out  of  which  arises  a  problem 
or  problems  for  determination  by  the  man  in  business.  When  such 
cases  are  prepared  for  classroom  use  they  must  generally  be  disguised 
so  that  the  particular  concern  involved  may  not  be  identified.  The 
cases  may  also  be  consciously  adapted  to  the  needs  of  teacliing  by 
varying  the  facts  if  these  adaptations  are  made  in  such  a  way  that  the 
reality  of  the  situation  is  preserved.  This  plastic  nature  of  the  ma- 
terial will  surely  prove  a  distinct  asset  in  the  future,  although  at  the 
present  time  it  constitutes  one  of  the  most  troublesome  and  at  the 
same  time  interesting  of  difficulties.  The  gathering  of  cases  for 
teaching  business  is  arduous,  the  technique  of  presentation  is  still 
in  an  early  experimental  stage  and  a  rapidly  changing  point  of  view 
inevitably  develops  both  as  to  the  acquisition  and  the  presentation  of 
such  material. 

A  selection  of  cases  for  teaching  law  may  be  made  by  a  competent 
man  in  any  good  law  library,  but  since  no  library  of  executive  cases  or 
situations  as  they  occur  in  business  is  in  existence,  the  author  of  a  case 
book  for  teaching  business  must  either  personally  or  through  research 
assistants  go  directly  to  business  men  for  his  facts  and  his  problems. 
Collected  extracts  from  leading  articles  and  treatises  on  business 
subjects,  sometimes  referred  to  as  problem  books,  in  no  way  fill  the 
requirements  for  such  a  business  case  book  because  if  the  value  of 
the  business  case  used  for  teaching  is  to  be  realized  the  case  must  be 
stated  specifically  as  it  comes  to  the  business  executive,  rather  than  in 
generalized  form  as  it  has  been  reacted  upon  by  the  business  economist. 
The  search  for  an  actual  business  case  to  illustrate  a  particular  point 
needed  for  the  systematic  treatment  of  a  subject  is  aided  b}'  no  well- 
edited  index  or  encyclopedia  such  as  the  teacher  of  law  finds  available, 
and  may  be  both  long  and  discouraging.  Nevertheless,  this  search 
must  be  successfully  carried  out  if  the  problems  used  are  to  possess  the 
flavor  and  detail  of  reality  without  which  they  fail  to  interest  or  con- 
vince the  student. 

^I  use  the  word  "case"  rather  than  "problem"  because  the  latter  fails  to  connote 
the  actuality  and  the  realistic  detail  which  must  surround  the  specific  situation 
If  it  is  to  start  with  the  flavor  of  life.  The  case  always  includes  one  or  more 
problems. 


58  Wallace  B.  Donham  [INIarch 

Points  of  Difference  between  Law  and  Business  Cases 
It  is  evident  in  other  ways  that  cases  collected  for  teaching  business 
must  differ  as  a  type  from  the  court  decisions  of  the  law  case  book. 
The  material  in  the  law  cases  is  not  as  the  client  brings  it  to  the  law 
office,  for  it  has  been  sorted  and  analyzed  three  times,  once  by  counsel 
for  each  party  and  once  by  the  court,  and  its  scope  is  limited  by  the 
technical  requirements  of  litigation.  The  large  field  of  discretion  for 
the  lawyer  preceding  or  preventing  litigation ;  the  questions  involved  in 
finding  the  facts  of  a  situation  for  use  in  or  out  of  court ;  the  problem 
whether  to  settle  a  controversy  rather  than  to  litigate ;  the  need  for 
considering  the  psycholog}^  of  the  court,  of  the  jury,  and  recently 
of  governmental  agents ;  the  miscellaneous  constructive  work  of  the 
law  office  which  never  gets  into  court ;  all  of  these  elements  in  the  prac- 
tice of  the  lawyer  are  largely  outside  the  usual  scope  of  the  case  books 
used  in  teaching  law.  Yet  the  business  case  book  must  be  made  up 
mainly  of  just  such  types  of  executive  problems,  if  it  is  to  give  the 
student  any  adequate  conception  of  his  future  or  training  for  it. 

Such  cases  when  collected  and  arranged  should  be  printed  in  case 
books  or  be  otherwise  made  available  to  the  student  for  his  considera- 
tion and  discussion  prior  to  the  classroom  exercise  at  which  they  are 
used.  If  this  is  not  done,  much  classroom  time  is  wasted  in  prolonged 
statements  of  facts  and  the  views  expressed  by  the  student  are  of 
oft-hand  opinions  rather  than  of  reasoned  conclusions  available  in 
advance.  The  instructor  cannot  assume  the  existence  of  a  common 
basis  for  discussion  in  the  classroom  and  the  interest  and  initiative  of 
the  student  is  not  aroused  to  the  maximum  extent. 

But  notwithstanding  the  difficulties,  one  thing  is  encouraging.  As 
more  and  more  cases  arc  developed  the  teaching  of  business  gets  very 
close  to  business  itself.  Practically  all  business  not  of  a  routine  nature 
may  be  reduced  to  the  making  of  decisions  based  on  specific  sets  of 
facts.  Often  these  decisions  must  be  made  from  insufficient  premises 
and  under  pressure.  An  educational  method  which  compels  the  stu- 
dent to  decide  similar  problems  from  day  to  day  in  and  oub  of  the 
classroom  must  certainly  be  better  preparation  for  general  executive 
work  than  any  method  based  primarily  on  telling  the  student  how 
to  do  business.  '^J'he  overwhelming  complexity  of  modern  business  and 
social  organization  makes  it  almost  certain  that  some  new  variable, 
some  new  combination  of  facts,  will  distinguish  the  new  situation  from 
tlie  old.  The  business  school  sliould  furnish  a  background  of  facts  and 
general  principles  upon  which  the  mind  trained  in  the  solution  of 
executive  problems  by  the  educational  processes  of  the  school  may 
react,  and  the  training  is  of  far  greater  importance  than  the  back- 
ground.     The  case  system  is  peculiarly  adapted  to  these  ends. 


1922]  Busijiess  Teaching  by  the  Case  System  59 

Inevitably  in  a  development  of  this  nature  many  interesting  ques- 
tions of  technique,  method,  and  substance  arise.  These  naturally 
group  themselves  around  the  gatiiering  of  this  new  type  of  material, 
its  presentation  in  form  for  classroom  use,  and  the  actual  use  of  the 
material  for  teaching. 

In  gathering  material,  the  teacher  may  use  two  methods.  Of  course 
the  customary  plan  by  which  the  staff  of  any  school  gathers  its  own 
material  will  obviously  be  always  available.  The  job  of  gathering 
cases  is,  however,  large,  and  requires  so  much  traveling  from  place  to 
place  that  results  will  be  obtained  in  this  way  much  more  slowly  than 
when  the  search  is  organized  with  paid  research  assistants  or  field 
agents.  Organized  research,  however,  can  be  conducted  only  where 
funds  are  made  available  to  support  it,  and  such  research  is  inevitably 
inefficient  and  expensive  until  a  background  of  experience  in  methods 
has  been  developed  and  an  organization  trained.  It  is  believed  that 
such  research  will  be  most  efficient  when  it  can  be  centralized. 

Various  methods  have  been  tried  experimentally  before  research 
methods  developed  to  a  point  where  the  cost  is  within  reasonable  bounds. 
The  largest  results  are  obtained  from  the  least  expenditure  when  the 
field  agent  goes  to  the  business  men  with  a  fully  developed  outline 
of  subjects  which  he  wishes  illustrated  by  cases,  and  where  possible 
with  specific  suggestions  from  the  instructor  as  to  the  type  of  problem 
which  the  particular  business  man  may  be  in  a  position  to  furnish. 
He  should  be  ready  to  provide  the  business  man  with  illustrative  cases 
to  show  the  type  of  material  needed.  In  such  organized  research, 
though  the  work  must  be  done  for  the  instructor,  according  to  his 
general  directions  and  under  a  classification  of  the  subject  adopted  by 
him,  the  skill  and  technique  developed  by  the  research  organization 
while  working  in  other  fields  is  of  course  available,  and  an  interchange 
of  valuable  methods  is  brought  about  without  sacrifice  of  individuality. 

Presentation  of  Cases  for  Classroom  Use 

In  presenting  cases  for  classroom  use  a  variety  of  methods  and 
approaches  is  being  worked  out  with  no  immediate  effort  at  uniformity. 
A  study  of  the  several  case  books  already  published  will  illustrate  the 
wide  differences  in  approach  adopted  by  different  teachers  and  within 
the  subject-matter  of  each  case  book  the  various  types  of  material 
and  methods  of  presentation  included.'     Only  prolonged  experience  in 

^Among  illustrations  may  be  mentioned  Copeland's  Marketing  Problems,  Schaub 
and  Isaacs'  The  Law  in  Business  Problems,  Lincoln's  Problems  in  Business  Finance, 
Dewing's  pamphlet  of  Problems  to  accompanj'  his  Financial  Policy  of  Corporations, 
Tosdal's  Problems  in  Sales  Management,  and  David's  Retail  Store  Manageihent 
Problems.  While  the  material  for  these  case  books  is  both  original  in  conception  and' 
novel  in  the  technique,  much  of  it  was  nevertheless  before  publication  tried  out  in 


60  Wallace  B.  Donliam  [March 

actual  teaching  can  tend  to  standardize  types,  and  such  experience 
may  bring  out  the  necessity  for  more  kinds  of  problems  rather  than 
fewer.  A  few  points,  however,  stand  out.  In  the  first  place,  much  of 
interest  is  gained  by  including  enough  facts  in  a  problem  so  that  the 
case  has  the  atmosphere  and  detail  of  reality.  Moreover,  in  most 
fields  of  business,  on  acount  of  the  infinite  complexity  of  detail,  the 
student  cannot  in  general  afford  time  to  study  facts  considered  merely 
as  facts.  There  are  far  too  many  of  them.  One  advantage  of  the 
case  system  is  that  problems  properly  presented  furnish  an  oppor- 
tunity for  the  student  to  acquire  a  broad  acquaintance  with  both 
technical  and  general  information  about  diverse  fields  of  industry, 
not  by  the  study  of  dissociated  facts  but  as  an  incident  in  the 
intellectual  process  of  working  out  decisions.  This  easy  and  natural 
way  of  acquiring  information  is  wholly  consistent  with  the  more  im- 
portant task  of  training  the  mind  to  analyze  and  reach  decisions. 

No  cases  are  found  ready-made.  Although  every  question  that  in- 
volves decision  by  an  executive  is  a  case,  nevertheless  the  business  man 
has  not  crystallized  these  questions  into  the  form  of  a  case.  The 
instructor  or  field  agent  must  obtain  facts  which  form  the  basis  for 
and  illustrate  each  point  that  it  is  desired  to  bring  out.  Then  these 
facts,  with  the  identity  of  the  firm  disguised,  are  worked  into  case 
form.  The  cases  have  been  of  three  general  types:  (1)  the  deter- 
mination of  major  policies,  such  as  those  that  involve  the  business  as  a 
whole  or  its  relations  to  other  businesses,  to  the  general  public,  or  to 
the  economic  and  social  background  of  business ;  (2)  the  determination 
of  internal  policies,  such  as  the  policy  to  be  followed  in  a  single  depart- 
ment; (3)  the  interpretation  and  application  of  policies  to  individ- 
ual cases. 

In  numerous  cases  it  is  advisable  to  include  both  relevant  and 
irrelevant  material,  in  order  that  the  student  may  obtain  practice  in 
selecting  the  facts  that  apply  to  the  case  in  hand.  Such  training  is 
essential.  The  case  ordinarily  should  not  require  the  student  to  collect 
new  facts  not  included  in  the  statement.  The  material  or  known  facts 
in  the  main  should  be  stated  and  the  study  of  the  case  should  involve 
the  analysis  and  use  of  the  facts.  Moreover,  the  statement  of  facts 
must  include  nuicli  material  which  the  business  man  assumes  as  a  matter 
of  course,  for  tlie  student  lacks  this  background.  The  importance  of 
these  points  becomes  increasingly  evident.  We  are  constantly  made 
aware  that  greater  emphasis  must  be  placed  on  the  presentation  of  facts 
in  cases  used  for  teaching  business  than  in  cases  used  in  teaching  law. 

classroom  in  tlie  form  of  mimeographed  sheets  before  publication.  The  extent  of  this 
experimental  work  is  perhaps  best  illustrated  by  the  fact  that  94,954  of  such  sheets 
wore  prepared  for  distribution  by  the  Harvard  Business  School  between  November 
1,  1920,  and  July  1,  1921. 


1922]  Business  Teaching  by  the  Case  System  61 

The  compiler  of  a  law  case  book  is  interested  mainh^  in  teaching  the  law, 
and  has  in  mind  the  legal  method  of  thought,  with  its  large  measure 
of  dependence  on  precedent  and  authority  for  the  handling  of  new 
legal  problems.  Facts  may  be  needed,  but  may  be  determined  by  -fiat. 
They  are  therefore  often  summarized  in  a  brief  statement  or  disposed 
of  by  the  finding  of  a  court  or  jury.  In  teaching  business,  practices 
and  precedents  have  no  weight  of  authority  behind  them,  but  every 
fact  of  business  which  can  be  brought  in  is  an  asset  to  the  student, 
giving  him  a  broader  foundation  for  executive  judgment.  He  must, 
moreover,  come  to  realize  the  extreme  difficulty  of  really  determining 
facts  and  of  giving  them  proper  relative  weight.  A  case  adequately 
stated,  in  the  discussion  of  which  it  is  possible  for  the  student  to  say : 
"But  I  can't  make  out  what  the  facts  are.  Why  did  this  party  to  the 
negotiation  say  what  he  did.^" — such  a  case  may  be  most  effective  in 
teaching  the  art  of  negotiation. 

Certain  types  of  business  cases  are  much  more  difficult  to  put  into 
shape  for  teaching  than  others.  For  example,  factory  management 
cases,  with  their  infinitely  varied  industrial  background  and  with  the 
limitations  imposed  by  the  factory  building  and  equipment,  are  diffi- 
cult to  present  in  such  a  way  that  the  student  may  visualize  the  facts 
clearly.  There  is  much  less  difficulty  in  stating  a  case  in  marketing 
or  in  banking,  because  it  requires  no  stretch  of  the  imagination  for  the 
student  to  obtain  a  clear  conception  of  the  case  from  a  printed  page. 
This  is  the  ordinary  medium  for  stating  such  facts.  For  these  reasons 
the  descriptive  material  for  cases  in  factory  management  and  industrial 
accounting  must  be  much  more  elaborate  and  much  more  carefvillv 
prepared  than  similar  material  in  other  subjects.  Such  difficulties 
suggest  the  necessity  of  developing  outlines  and  descriptions  of  in- 
dustrial processes  in  book  form  in  a  wide  variety  of  fields  to  accompan^T^ 
case  books.  In  this  direction,  however,  enough  has  been  accomplished 
to  demonstrate  that  the  difference  between  marketing  and  factory 
management  is  one  of  degree  only,  and  that  cases  in  factory  manage- 
ment may  be  stated  effectively  if  effort  enough  can  be  put  into  the 
research  behind  the  preparation  and  presentation  of  them. 

Use  of  Cases  for  Teaching  Business 

In  the  use  of  business  cases  in  teaching,  certain  differences  appear 
as  compared  with  the  teaching  of  law.  The  business  case  generally 
differs  from  the  law  case  in  that  it  contains  no  statement  of  the  actual 
decision  reached  by  the  business  man.  Moreover,  the  methods  of 
approach  by  which  decisions  are  reached  are  in  most  instances  not 
included  in  any  reasoned  opinion  similar  to  the  opinion  of  the  court. 


62  •  Wallace  B.  Donham.  [March 

and  generally  business  cases  admit  of  more  than  one  solution.  Enough 
careful  analyses  should  be  incorporated  in  the  cases  as  stated  to  guide 
the  student  in  method.  In  using  such  cases  it  is  clearly  undesirable 
to  include  comprehensive  analyses  in  all  or  even  in  most  instances,  but 
recent  classroom  experience  with  business  cases  leads  to  the  conclusion 
that  an  increasing  use  of  analytical  material  is  higlily  desirable.  These 
differences  caused  some  concern  in  the  beginning,  and  in  practice  they 
clearly  impose  on  the  teacher  of  business  a  definite  obligation  to  finish 
the  classroom  discussion  of  each  case  with  a  clean-cut  summary  of  the 
reasons  and  analogies  which  appeal  to  him  as  most  important  for  its 
solution.  When  this  is  done,  the  frequent  complete  absence  of  analyt- 
ical guides  in  the  cases  has  important  advantages.  Among  these  is 
the  practical  compulsion  to  independent  thought  by  the  student  before 
the  problem  is  taken  up  in  class.  Unquestionably  both  the  technique 
of  presenting  cases  for  classroom  purposes  and  classroom  methods 
will  develop  through  experience  into  something  quite  different  from 
present  practice.  It  is  nevertheless  clear  that  the  case  system  as  we 
now  know  it  represents  a  substantial  advance  over  our  previous  meth- 
ods, and  that  it  should  be  extended  rapidly  into  nearly  all  business  sub- 
jects. The  accomplishment  of  this  purpose  requires  the  expenditure 
of  considerable  sums  of  money  or,  in  the  alternative,  an  otherwise 
unnecessary  delay  of  years. 

The  case  system  of  teaching  law  has  been  criticised  on  the  ground 
that,  as  a  result  of  the  primary  emphasis  on  analytical  training  and  of 
the  slower  nature  of  the  Socratic  process  as  compared  with  the  text- 
books and  the  lecture,  much  less  ground  is  covered ;  and  that  in  fact 
the  content  of  the  law  is  unduly  subordinated  to  this  training  of  the 
mind.  There  is  hardly  room  to  doubt  that  the  adoption  of  the  case 
approach  to  teaching  any  subject  will  rapidly  and  inevitably  change 
the  emphasis  from  giving  the  student  a  content  of  facts  to  giving  him 
control  of  the  subject.  This  result  in  legal  teaching,  the  exponents 
of  the  system  consider  one  of  the  most  desirable  effects  obtained.  The 
criticism  appears  to  have  even  less  weight  as  applied  to  business  teach- 
ing than  to  legal,  for  it  is  clearly  impossible  by  any  method  of  training 
to  transmit  to  the  student  more  than  a  comparatively  small  fraction 
of  the  facts  of  business.  But  certainly  if  a  business  school  fails  to 
give  a  training  which  fits  the  student  for  the  handling  of  new  business 
facts  and  new  relationships,  it  fails  to  justify  its  existence.  More- 
over, it  is  at  least  questionable  whether  the  informational  content  of 
business  cases  may  not  be  developed  to  such  an  extent  that  the  student 
in  a  natural  and  even  incidental  way  gains  a  real  comprehension  of 
more  business  facts  and  practices  than  he  could  gain  by  any  of  the 
ordinary  methods. 


1922]  Business  Teaching  hy  the  Case  System  63 

The  Effect  of  the  Case  System  on  the  Student  of  Business 

Unquestionably,  under  the  case  system,  unless  a  comprehensive  group 
of  general  introductory  lectures  on  the  law  as  a  whole  and  on  its  more 
important  principles  is  placed  at  the  beginning  of  the  curriculum,  the 
student  passes  through  a  period  of  uncertainty  and  confusion,  and  he 
may  never  secure  a  general  perspective  of  the  subject.  There  is 
danger  that  the  forest  may  be  lost  in  the  trees.  This  criticism  is  not 
considered  seriously  by  most  exponents  of  the  case  system  in  teaching 
law,  but  as  applied  to  teaching  business,  it  is  well  taken,  and  in  any 
adaptation  of  the  case  system  to  this  field,  it  should  be  met  effectively. 

Two  approaches  appear  possible.  For  one,  an  introductory  course 
on  the  scope  and  principal  divisions  of  business  may  be  inserted  early 
in  the  course  of  study.  For  the  other,  however,  it  appears  probable 
from  existing  experiments  that  the  problem  may  be  more  effectively  met 
by  an  adaptation  of  the  case  system  itself.  One  of  the  advantages  of 
the  plastic  nature  of  the  material  of  business  cases  is  the  ease 
with  which  such  experiments  may  be  tried  out. 

In  our  own  experience  even  before  the  case  system  was  started,  it 
was  evident  that  new  students  did  not,  until  they  had  spent  at  least 
a  year  studying  business,  come  to  realize  its  nature  as  a  correlated 
subject.  On  the  contrary,  the  typical  first-year  man  at  the  end  of 
the  year  seemed  to  have  studied  his  individual  courses  with  little  con- 
ception of  their  interrelation.  Accounting  was  to  him  simply  account- 
ing, and  finance  only  finance.  He  had  no  clear  understanding  of  the 
usefulness  of  factory  management  training  for  the  accountant.  He 
wished  in  far  too  many  cases  to  make  himself  into  a  narrow  specialist. 

This  failure  to  see  the  interrelations  of  business  was  not  noticeable 
to  anj'  considerable  extent  in  the  second-year  group,  largely  through 
the  effect  of  a  course  in  Business  Policy  which  has  always  been  given 
on  the  case  system.  This  course  consists  of  a  long  series  of  problems 
presented  by  business  men  who  are  unaware  of  the  arbitrary  divisions 
of  the  subject-matter  of  business  adopted  for  convenience  in  teaching 
and  who  therefore  submit  problems  which  customarilv  go  across  the 
subject-matter  of  various  courses.  Out  of  such  problems  the  men 
rapidly  gain  a  conception  of  the  interdependence  of  business  subjects. 

By  including  in  the  first  year  an  introductory  course  on  the  scope 
of  business  this  situation  might  be  changed.  Such  a  course  is  not 
practicable  with  us  because  of  the  pressure  of  more  important  courses. 
Yet  there  is  great  need  that  men  should  from  the  beginning  of  their  work 
build  toward  a  coordinated  structure  of  training  rather  than  toward 
isolated  units  whose  interrelationship  is  beyond  their  vision.  In  the 
effort  to  bring  about  this  condition  we  give  the  first-year  class  imme- 


64  Wallace  B.  Donham  [March 

diately  after  their  arrival  a  very  complicated  business  case  which 
should  for  its  solution  depend  upon  the  subject-matter  of  a  large  part 
of  the  courses  given  in  the  school.  Of  course  such  a  problem  is  beyond 
the  capacity  of  every  man  in  the  class.  It  nevertheless  is  presented  for 
their  consideration  and  after  a  careful  study  by  them  discussed  by  the 
instructor.  This  discussion  serves  as  an  object  lesson  in  the  prelimi- 
nary analysis  of  a  complicated  business  problem,  and  at  the  same  time 
brings  out  the  relation  of  the  problem  to  the  different  courses.  In  this 
way  the  student  at  once  realizes  how  the  individual  courses  in  the 
school  work  together  as  a  preparation  for  the  solution  of  a  single  exec- 
utive problem  while  at  the  same  time  he  acquires  a  more  adequate  con- 
ception of  the  general  and  interlocking  nature  of  business  problems. 

Similarly  it  is  probable  that  scope  problems  may  be  devised  as 
introductions  to  specialized  courses,  so  that  the  student,  before  he 
begins  studying  cases  which  are  developed  under  a  detailed  classifica- 
tion of  a  subject,  may  see  the  subject  as  a  whole  in  a  general  per- 
spective. Moreover,  in  this  way  a  problem  of  large  and  almost  un- 
wieldy scope  may  be  presented  in  perspective  before  it  is  divided  for 
detailed  consideration  into  a  group  of  cases  under  a  classified  outline. 
Promising  beginnings  have  been  made  in  this  direction.  If  this  per- 
spective view  of  a  whole  curriculum  or  of  a  whole  subject  is  practic- 
able, the  saving  of  time  and  the  increase  in  interest  over  the  approach 
to  the  same  object  through  introductory  lectures  will  be  considerable. 
So  far  as  tlic  students  are  concerned,  our  experiments  with  the  case 
system  have  resulted  in  the  development  of  an  intensified  interest  in 
their  work  and  far  greater  personal  initiative  in  thinking  out  business 
problems. 

The  case  system,  therefore,  is  as  clearly  desirable  in  teaching  business 
as  in  teaching  law,  and  it  is  probable  that  in  the  long  run  the  necessity 
of  creating  teaching  material  instead  of  taking  it  ready-made  from 
reported  decisions  will  find  its  compensations  in  the  ultimate  greater 
ease  of  adapting  the  material  to  educational  ends. 

There  remains  the  problem  of  the  teacher.  Unquestionabl}^  the 
give  and  take  of  classroom  discussion,  with  a  class  intensely  alive  to 
the  subjects  involved,  places  on  the  instructor  a  corresponding  but 
exceedingly  stimulating  burden.  It  is  also  clear  that  the  lack  of 
authoritative  discussion  and  conclusions  like  the  opinions  of  the  law 
courts  burdens  him  with  a  definite  obligation  to  summarize  the 
cogent  arguments  which  impress  him  as  most  important.  Otherwise 
the  discussion  will  lack  definition  and  the  student  will  fail  to  benefit 
to  the  utmost.  Analytical  manuals  to  accompany  case  books  in  busi- 
ness should  be  made  available  for  teachers.  These  manuals  will 
probably  be  most  effective  if  they  suggest  topics  for  discussion  under 


1922]  Business  Teaching  hy  the  Case  System  65 

the  several  cases  rather  than  if  they  attempt  to  give  direct  and 
dogmatic  solutions.  Since  business  cases  in  particular  will  in  most 
instances  lend  themselves  to  several  types  of  approach,  it  is  generally 
desirable  to  avoid  any  claim  to  ex  cathedra  conclusions.  Teaching 
under  the  case  system  is  in  fact  very  like  business  conference,  where 
the  leader  is  endeavoring  through  discussion  with  his  associates  to 
arrive  at  a  sound  conclusion.  It  is  this  realistic  element  which  is 
largely  responsible  for  the  interest  both  of  the  instructor  and  of  the 
students.  In  our  experience,  the  teaching  difficulties  are  for  most  men 
less  serious  than  the  difficulties  of  effective  lecturing. 

Wallace  B.  Donham. 
Graduate  School  of  Business  Administration, 
Harvard  University. 


A  PROPOSED  PROGRAM  OF  SOCIAL  STUDIES  IN  THE 
SECONDARY  SCHOOLS 

The  committee  of  the  American  Economic  Association  on  the  teach- 
ing of  economics  presents  as  a  basis  of  discussion  by  members  of  the 
Association  a  proposal  for  social  studies  in  the  secondary  schools/ 
The  members  of  the  committee  hope  that  they  will  receive  many  crit- 
icisms and  suggestions,  and  that,  guided  by  these,  they  may  be  able  to 
continue  their  study  to  better  advantage. 

The  committee  has  chosen  to  present  for  discussion  a  program 
which  refers  primarily  to  the  work  of  the  junior  high  school.  It 
has  emphasized  this  one  field  because  of  its  belief  that  a  single,  clear- 
cut  proposal  will  facilitate  discussion  of  fundamental  issues  rather 
better  than  several  proposals.  It  has  chosen  this  particular  field 
partly  because  the  6-3-3  organization  seems  likely  to  be  the  dominant 
secondary  school  organization  of  the  future  and  partly  because  the 
coming  in  of  the  6-3-3  organization  gives  an  opportunity  to  work  out  a 
plan  in  the  junior  high  school  that  will  not  be  too  greatly  hampered  by 
custom  and  tradition.  Then,  too,  it  is  not  difficult  to  derive  a  pro- 
gram for  the  orthodox  four-year  high  school  from  the  program  of  the 
six-year  junior-senior  high  school  in  case  one  is  primarily  interested 
in  the  four-year  plan.  The  committee  has,  indeed,  made  certain  sug- 
gestions on  page  74,  for  a  four-year  program. 

It  will  facilitate  study  of  the  proposal  of  the  committee  to  set  forth 
at  this  time  the  considerations  which  were  in  mind  during  its  formula- 
tion.    Briefly  stated,  these  considerations  were  as  follows: 

1.  The  organization  of  social  studies  in  the  public  schools  should 
be  in  terms  of  the  purpose  of  introducing  those  studies.  Their  purpose 
is  that  of  giving  our  youth  an  awareness  of  what  it  means  to  live 
together  in  organized  societ}',  an  appreciation  of  how  we  do  live 
together,  and  an  understanding  of  the  conditions  precedent  to  living 
together  well,  to  the  end  that  our  youth  may  develop  those  ideals, 
abilities,  and  tendencies  to  act  which  are  essential  to  effective  partici- 
pation in  our  society.  The  range  of  this  statement  is  very  broad. 
For  example:  the  contribution  of  knowledge  and  physical  environment 
to  our  social  living  is  quite  as  worthy  of  attention  as  are  the  principles 
of  economics  or  government.  Parenthetically,  it  may  be  noted  that 
"awareness,"  "appreciation,"  and  "understanding"  come  only  when 
descriptive  facts  are  presented  in  their  relationships. 

^The  membership  of  this  committee  is  as  follows:  E.  L.  Bogart,  E.  E.  Day,  J.  E. 
Hagerty,  W.  H.  Hamilton,  W.  H.  Kickhofer,  W.  D.  Lewis,  M.  S.  Wildman,  L.  C. 
Marshall  (Chairman).  Messrs.  Hamilton  and  Wildman  were  not  able  to  be  present 
at  the  conference  of  the  committee. 


1922]  Social  Studies  in  the  Secondary  Schools  67 

2.  The  question  should  not  be  "how  to  put  the  social  studies  into 
our  curricula"  but  "how  to  organize  our  curricula  around  social 
objectives."  The  social  studies  should  be  the  backbone  of  secondary 
education,  with  which  all  other  studies  and  school  activities  should  be 
closely  articulated  according  to  their  contributions  to  the  social 
objectives  of  education.  Since  each  individual  must  be  a  citizen  and  as 
such  must  participate  in  group  action,  the  social  studies  should  be 
represented  in  each  grade  of  education,  and  every  pupil  should  have 
at  least  one  unit  of  social  study  in  every  year  of  the  school  course.  As 
for  the  specific  junior  high  school  courses  mentioned  below  on  pages 
69-73,  there  is  no  attempt  to  decide  whether  they  should  be  unit 
courses  or  half-unit  courses.  Possibly  they  should  be  so  drawn  as  to 
make  either  arrangement  possible  according  to  local  needs  and  re- 
sources. 

It  is  essential  that  we  free  our  minds  from  any  such  issue  as  the 
claims  of  history  vs.  those  of  economics,  vs.  those  of  government,  vs. 
those  of  sociology.  Those  claims  will  largely  disappear  in  any  vital 
discussion  of  the  contribution  of  social  studies  to  our  social  living. 
These  branches  of  social  study  are  not  separable,  save  for  the  purpose 
of  emphasizing  some  particular  point  of  view  on  social  living. 

3.  The  social  studies  should  be  directed  toward  an  understanding 
of  the  physiology  rather  than  the  pathology  of  social  living.  This 
does  not  mean  that  pathology  is  to  be  disregarded,  but  it  does  mean 
that  it  should  not  occupy  the  center  of  attention.  Such  a  position 
does  not  reject  the  "problem  method"  of  instruction.  That  method 
should  be  quite  freely  used ;  but  it  should  be  directed  toward  under- 
standing the  physiology  of  society.  The  center  of  attention  should  be 
our  social  living  in  this  country  and  how  it  came  to  be  what  it  is.  Just 
what  should  occupy  this  center  of  attention  is  the  essence  of  the 
problem.  There  will  presumably  be  put  in  the  background  of  atten- 
tion (but  it  is  still  in  the  field  of  attention)  some  material  now  occupy- 
ing a  prominent  place  in  our  social  studies.  Such  background  material 
should  be  presented  (a)  in  required  courses  only  to  the  extent  to 
which  it  contributes  significantly  to  the  understanding  of  our  social 
living  and  (b)  in  elective  courses. 

4.  Any  program  of  social  studies  which  hopes  to  be  successful 
must  be  drawn  with  consideration  for  vocational  curricula.  This 
suggests  no  conflict  of  interests.  Men  work  together  in  organized 
society.  Vocational  training  will  be  greatly  improved — even  as  a 
"money-making"  matter  for  the  individual — by  the  right  kind  of  social 
study  backbone. 

5.  The  program  of  social  studies  which  is  drawn  with  recognition 
of  the  great  losses  in  our  student  constituency  in  certain  years  seems 


68 


Committee  on  Teaching  of  Economics 


[March 


likely  to  accomplish  the  greatest  good  for  the  greatest  number,  pro- 
vided this  does  not  mean  too  great  weakening  of  basic  training.  It 
will  be  found  that  the  program  later  suggested  is  drawn  with  this  situa- 
tion in  mind  and  that  it  docs  not  neglect  to  provide  for  continuity  and 
progression. 

6.  The  reorganization  which  is  now  in  process  in  our  educational 
system  (which  opens  up  the  seventh  and  eighth  grades  for  the  intro- 
duction of  new  material)  justifies  a  somewhat  daring  attempt  to  think 
through,  as  a  coherent  whole,  our  presentation  of  secondary  social 
studies,  without  too  much  regard  for  traditional  claims  or  customary 
practices.  More  specifically,  there  is  here  an  opportunity  to  intro- 
duce social  study  rather  than  specialized  branches  of  social  studies. 
This  reorganization  also  makes  it  wise  for  us  to  plan  our  curricula 
so  as  to  enable  us  to  realize  the  educational  possibilities  of  the  new 
organization.  Properly  understood,  this  so-called  6-3-3  or  6-6  arrange- 
ment or  any  other  comparable  plan  means  far  more  than  the  adminis- 
trative device  of  taking  two  years  away  from  the  elementary  school 
and  bestowing  them  upon  the  high  school.  It  contemplates  the  entire 
reorganization  of  the  curriculum  to  the  end  that  without  loss  of  train- 
ing (its  advocates  claim  there  will  be  a  gain)  two  years  of  time  may  be 
saved  and  students  may  be  carried  by  the  end  of  the  twelfth  grade  to 
approximately  the  position  now  reached  by  the  end  of  the  sophomore 
year  in  college. 


Grades  1  tot 

;             8            9 

10                II                12 

Elementary 

Junior  Hign  School 

---"/_"_"."-*  rizzzz:::. 

Senior  High  School 

College  and  Professional  School 

Clearly  enough,  the  movement  is  on  and  is  on  vigorously  and  the 
educational  system  which  seems  likely  to  result  may  be  crudely  repre- 
sented by  the  above  diagram.  A  fairly  coherent  and  unified  system  of 
training  in  fundamental  jjrocesses  in  the  elementary  schools  will  be 
followed  by  the  junior  high  school,  in  which  it  is  at  least  desirable  that 
the  basic  consideration  shall  be  training  in  citizenship,  with  the  begin- 
nings of  specialization  occurring  only  in  the  later  stages  of  that  school. 
This  will  be  followed  by  the  senior  high  school  in  which,  parallel  with 
the  college-preparatory  course  so  called,  will  certainly  go  very  con- 
siderable  ranges   of   vocational   training.     The   college   and   the   pro- 

'Preliminary  cxperimonts  have  already  been  conducted  in  this  field  with  the  result 
of  saving  one  year  of  time,  and  experiments  are  well  under  way  to  bring  about 
the  saving  of  another  year. 


1922]  Social  Studies  in  the  Secondary  Schools  69 

fessional  school  will  receive  the  graduates  of  the  senior  high  school,  who 
will  bring  an  equipment  comparable  with  that  possessed  by  the  present 
junior  in  college,  if  the  reorganization  works  out  successfully. 

7.  An  effective  program  of  social  studies  will  be  organized  in  terms 
of  the  psychology  of  learning.  The  average  child  of  the  seventh  grade 
is  at  least  beginning  to  have  a  social  consciousness.  His  mind  is  reach- 
ing out  to  understand  his  relationships  to  other  people  and  to  society 
as  a  whole.  The  fact  that  he  is  not  aware  of  his  developing  attitude 
does  not  interfere  with  making  use  of  this  interest. 

The  unfolding  of  the  social  studies  should  not  be  too  rapid  to 
allow  the  student  to  build  up  an  apperceptive  basis  for  his  thinking. 
Accordingly  the  program  suggested  passes  (1)  from  a  seventh  grade 
discussion  of  types  of  social  organization  and  some  conditioning 
factors  of  the  types,  (2)  through  an  eighth  grade  survey  of  the  develop- 
ment and  practices  of  our  modern  social  organization,  (3)  to  a  ninth 
grade  discussion  of  principles  of  social  organization,  and  (4)  ultimate- 
ly to  a  senior  high  school  discussion  of  social  science  material  in  some- 
what more  specialized  terms.  Such  a  development  will  contribute 
markedly  to  "giving  our  youth  an  awareness  of  what  it  means  to  live 
together  in  organized  society,  an  appreciation  of  how  we  do  live 
together,  and  an  understanding  of  the  conditions  precedent  to  living 
together  well,  to  the  end  that  our  youth  may  develop  those  ideals, 
abilities  and  tendencies  to  act  which  are  essential  to  effective  participa- 
tion in  our  society." 

8.  The  program  of  social  studies  which  is  drawn  in  such  a  way 
as  to  minimize  administrative  difficulties  will,  other  things  being  equal, 
be  most  rapidly  introduced. 

So  much  for  background  considerations.  As  a  statement  prefatory 
to  the  junior  high  school  proposal,  it  is  assumed  that  in  the  first  six 
grades  students  have  acquired  certain  tools  and  methods  of  study,  and 
that  they  have  been  given  a  body  of  material  in  history,  community 
civics,  and  geography  which  will  serve  as  a  foundation  for  the  studies 
suggested  below.  It  is  recognized  that  the  successful  introduction  of 
such  a  junior  high  school  program  as  is  sketched  below  would  in  time 
influence  rather  profoundly  the  work  of  the  first  six  grades.  But  that 
is  another  story. 

A  Summary  View  of  the  Proposed  Junior  High  School  Program. 

It  will  facilitate  later  discussion  to  present  at  this  point,  without 
explanation  or  supporting  argument,  a  summary  view  of  the  proposal 
as  a  whole.  This  summary  view  will  present,  in  specific  terms,  only  the 
work  in  social  studies. 


70  Committee  on  Teaching  of  Economics  [March 

A.  The  seventh  grade: 

1.  Geographic  bases  of  United  States  development 

2.  Social  science  survey  (types  of  social  organization) 

(a)  Simple  industry  and  simple  society 

(b)  The  transforming  effects  of  scientific  knowledge 

3.  Other  studies,  correlated  so  far  as  may  be  practicable  with 

the  social  study  material. 

B.  The  eighth  grade : 

1.  The  opening  of  the  world  to  the  use  of  man 

2.  Vocational  survey  (presented  in  functional  terms  so  that 

it  may  contribute  to  an  understanding  of  our  type  of 
social  organization) 

3.  Other  studies,  correlated  so  far  as  may  be  practicable  with 

the  social  study  material. 

C.  The  ninth  grade : 

1.  The  history  of  the  United  States  (presented  with  "citizen- 

ship material"  occupying  the  center  of  attention) 

2.  Principles    of    social    organization     (economic,    political, 

social) 

3.  Other  studies,  correlated  so  far  as  may  be  practicable  with 

the  social  study  material 

A  Detailed  View  of  the  Work  of  the  Seventh  Grade 

The  work  of  this  grade  sets  out  consciously  to  "give  our  youth  an 
awareness  of  what  it  means  to  live  together  in  organized  society,  an 
appreciation  of  how  we  do  live  together,  and  an  understanding  of  the 
conditions  precedent  to  living  together  well."  Its  emphasis  is  upon 
the  first  and  third  of  these  propositions,  without  at  all  neglecting  the 
second.  The  survey  of  types  of  social  organization  in  simple  societies 
emphasizes  the  first;  the  survey  of  the  transforming  effects  of  scientific 
knowledge,  the  work  in  geography,  and  the  work  in  science  (which 
will  presumably  be  given  in  this  grade)  emphasize  the  third.  Of 
course,  there  is  no  intention  of  making  a  sharp  differentiation  in 
treatment.  The  foregoing  statement  of  purpose  may  be  stated  differ- 
ently. The  work  of  this  grade  seeks  to  sweep  together,  into  a  some- 
what organic  whole,  the  social  study  work  of  the  first  six  grades,  and 
to  take  a  further  step  in  generalized  thinking  in  the  field. 

The  work  in  geographic  bases  of  United  States  development  is 
designed : 

1.  To  bring  into  an  organic  whole  the  preceding  work  in  history, 

civics  and  geography  in  such  a  way  as  to 

2.  Show  the  importance  of  physical  environment  with  respect  to 

conditions  precedent  to  living  together  well  and  to 

3.  Prepare  the  way,  in  terms  of  principles,  for  the  work  of  the 

next  two  grades  and  to 


1922]  Social  Studies  in  the  Secondary  Schools  71 

4.      Give  the  student  who  can  go  no  farther  a  significant  contri- 
bution to  his  "appreciation  of  how  we  live  together  and 
understanding  of  the  conditions  precedent  to  living  well." 
The  social  science  survey  of  types  of  social  organization  is  designed : 

1.  To  bring  into  an  organic  whole  the  preceding  work  in  history, 

civics  and  geography  in  such  a  way  as  to  prepare  the  way, 
in  terms  of  principles,  for  the  work  of  the  next  two  grades, 

2.  To  lay  a  comparative  basis  for  the  later  more  careful  survey 

of  the  evolutionary  development  of  the  functioning  social 
structure. 

3.  To  give  the  student  who  can  go  no  farther  a  significant  con- 

tribution to  his  "awareness  of  what  it  means  to  live  to- 
gether in  organized  society,  appreciation  of  how  we  do 
live  together  and  understanding  of  the  conditions  precedent 
to  living  together  well." 
The  suggested  method  of  presenting  this  social  science  survey  ma- 
terial is  as  follows : 

1.      Present  a  series  of  snapshots  of  simple  types  of  social  organ- 
ization as  the  life  of  neolithic  man;  the  life  of  the  Iroquois; 
the  life   of   nomads ;   life  in   a   medieval   manor ;   life  in   a 
medieval  town ;  life  in  a  modern  secluded  mountain  district ; 
life  in  a  frontier  mining  camp ; 
in  which  the  student  can  see  how  such  matters  as  education,  religion, 
health,  social  control,  economic  activities,  etc.,  (these  are  only  samples) 
were  cared  for  and  can  begin  to  see  wherein  our  ways  of  caring  for  such 
matters  are  different,  if  different. 

This  comparative  study  should  be  directed  toward  bringing  out 
certain  concepts,  of  which  the  following  may  be  taken  as  samples, 
(they  are  only  samples)  : 

self  sufficiency  vs.  interdependence 
customary'  vs.  competitive  methods 
non-exchange  vs.  exchange  society 
non-industrial  vs.  industrial  society 
the   shifting  emphasis   in   social   control 
the  modern  cooperation  of  specialists 
with  the  idea  of  leading  the  student  to  "generalize"  his  knowledge  and 
with  the  further  idea  of  preparing  him  for  the  study  of  "principles" 
in  the  ninth  grade. 

2.  The  latter  part  of  the  grade  is  to  be  devoted  to  showing  the 
contribution  of  knowledge  "to  our  living  together  welV^  and  how  that 
reacts  upon  the  type  of  social  organization.  This  should  be  no  mere 
threadbare  account  of  the  Industrial  Revolution ;  it  should  be  an 
account  of  the  transforming  effects  of  science  on  our  ways  of  living 
together.  Notice  that  the  way  has  been  prepared  by  the  student's 
work  in  science,  if  science  is  also  presented  in  this  grade. 


72  Committee  on  Teaching  of  Economics  [March 

A  Detailed  View  of  the  Work  of  the  Eighth  Grade 
There  is  presumably  no  need  for  a  detailed  statement  of  the  general 
purpose  of  the  work  of  this  grade.  It  is  obvious  that,  in  addition  to 
caring  properly  for  those  who  must  drop  out  at  the  end  of  the  year, 
this  grade  must  (a)  begin  to  give  many  students  a  rational  basis  for 
selection  of  vocations  and  (b)  continue  the  preparation  for  the  more 
generalized  social  study  of  the  ninth  grade. 

The  work  in  "The  opening  of  the  world  to  the  use  of  man"  is 
designed : 

1.  To  knit  together  and  to  build  upon  the  social  science  survey 

and  geography  of  the  preceding  grade  in  such  a  way  that 
the  student  will  get  as  a  part  of  his  mental  machinery — 
as  tools  of  which  he  will  make  conscious  use — concepts  of 
change,  development,  and  continuity. 

2.  In  respect  to  factual  background,  to  give  the  student  some 

appreciation  of  the  long  hard  trail  the  human  race  has 
climbed ;  to  let  him  see  the  emergence  of  western  civilization, 
its  spread  over  the  earth  and  its  contacts  with  other  civili- 
zations. 

3.  To  give  the  student  the  "world  background"  against  which 

the  history  of  his  own  country  (ninth  grade)  may  be  seen 
in  perspective ;  and  to  make  him  "cosmopolitan"  and  "inter- 
national" in  a  wholesome  sense  of  those  words. 
The  vocational  survey  is  designed: 

1.  To  give  the  student  an  opportunity  (upon  which  their  experi- 

ence has  caused  so  many  school  men  to  insist)  to  think 
through  in  specific  terms  his  own  possible  contribution  to 
social  living.  Whether  this  results  in  his  actually  "choos- 
ing a  vocation"  matters  little,  if  at  all.  Out  of  it,  he  should 
get  a  clearer  notion  of  the  qualities  making  for  individual 
success  in  the  process  of  social  living. 

2.  To  give  this,  however,  not  as  a  set  of  maxims  and  preachments 

and  not  as  a  set  of  "job  analyses"  but  as  a  survey  of  the 
activities  (emphasizing  here  economic  activities  without 
neglecting  political  and  social  considerations)  which  are 
carried  on  in  our  type  of  social  organization  and 

3.  To  do  this  in  such  a  way  that  he  will  get  a  glimpse  of  an 

economic  organization  in  which  activities  are  in  terms  of 
social  purposes.  By  way  of  illustration,  the  student  who 
sees  the  "undifferentiated"  medieval  trader  split  up  as  time 
goes  on  into  transporter,  insurer,  financier,  seller,  etc.,  will 
have  a  different  conception  of  the  work  of  railroads,  insur- 
ance companies,  banks,  etc.,  from  the  one  he  would  have 
had  after  an  unconnected  study  of  occupations.  In  other 
words,  the  vocational  survey  is  designed  to  give  the  student 
a  more  thorough  and  specific  conception  of  our  social 
organization  as  it  actually  operates  in  our  living  together. 


1922]  Social  Studies  in  the  Secondary  Schools  73 

A  Detailed  View  of  the  Work  of  the  Ninth  Grade 

Here,  also,  a  detailed  statement  of  general  purpose  may  be  omitted. 
Looking  back  over  the  junior  high  school  curriculum,  this  year's  work 
seeks  to  knit  together  the  preceding  work  (a)  in  terms  of  principles 
and  (b)  in  terms  of  their  application  to  citizenship  in  our  own  country. 
Looking  forward  to  the  work  of  the  senior  high  school,  this  year's 
work  seeks  to  pave  the  way  for  the  more  specialized  presentation  of  the 
social  sciences. 

The  work  in  the  history  of  the  United  States  (presented  with  "citi- 
zenship material"  occupying  the  center  of  attention)  is  self-explana- 
tory, if  it  be  kept  in  mind  that  the  ideal  is  that  of  bringing  the  social 
science  work  of  the  preceding  grades,  as  well  as  that  of  this  ninth 
grade,  to  a  focus  in  this  account  of  the  development  of  our  own  social 
living  together.  Such  a  statement  indicates  the  kind  of  history  which 
is  to  be  presented. 

The  work  in  principles  of  social  organization  assumes  that  the 
student  has  been  given  sufficient  factual  background  and  has  attained 
a  sufficient  maturity  to  enable  him  to  view  our  social  living  in  terms 
of  principles  rather  than  in  terms  of  types  or  of  practices.  It  asks  the 
student,  to  do,  as  a  conscious  matter,  a  most  fundamental  thing, 
namely,  seek  relationships  on  a  scale  which  will  give  him  an  organic 
view  of  our  social  living.  He  is  asked  (so  far  as  he  may  now  be  able) 
to  formulate  consciously  the  principles  of  social  living  which  should 
guide  him  in  later  years.  It  is  to  be  noticed  in  passing  that  no  such 
opportunity  now  exists  in  any  stage  of  our  school  curriculum.  It  is 
conceivable  that  the  first  draft  of  this  will  have  to  be  in  three  parts : 
(1)  economic  organization,  (2)  political  organization,  (3)  social 
organization  not  otherwise  handled.  But  it  is  hoped  and  expected  that 
it  may  be  done  not  as  three  parts  but  as  one  unified  whole. 

A  Hint  of  the  Program  of  the  Senior  High  School 

The  foregoing  presents  the  material  on  which  the  committee  particu- 
larly covets  discussion.  It  is,  however,  desirable  to  show  something 
of  the  possibilities  of  such  a  plan  as  the  student  goes  on  to  the  senior 
high  school.  It  is  assumed  that  in  each  year  of  the  senior  high  school, 
some  social  study  work  will  be  required  and  that  the  work  will  be  pre- 
sented in  more  specialized  (scientific?)  form  than  it  was  in  the  earlier 
grades. 

The  following  statement  gives  merely  a  suggestion  of  possible  courses 
in  the  fields  of  economics  and  business.  Our  larger  high  schools,  at 
least,  might  in  time  offer  considerable  choice  of  courses  in  the  fields 
that  we  now  designate  as  political  science,  history,  psychology  and 
sociology.  ^  ^^__J 


74  Committee  on  Teaching  of  Economics  [March 

1.  The  Financial  Organization  of  Society  and  the  Manager's 
Administration  of  Finance. 

2.  The  Market  Organization  of  Society  and  the  Manager's  Admin- 
istration of  the  Market. 

3.  The  Position  of  the  Worker  in  Our  Society  and  Personnel  Ad- 
ministration. 

4.  The  Evolution  of  Our  Economic  Society  (note  that  this  is  vastly 
more  than  a  "History  of  Commerce"  and  vastly  more  than  the  typical 
"Industrial  History"). 

5.  Accounting  (not  merely  as  bookkeeping  but  also  as  an  instru- 
ment of  control  in  the  hands  of  the  executive). 

6.  Business  Law  (as  a  manifestation  of  social  control  of  business 
activity  and  as  a  facilitating  aid  of  business). 

7.  Such  technical  courses  as  may  be  expedient.  An  illustration  is 
Shorthand  and  Typewriting. 

8.  Theories  of  Value  and  Distribution. 

A  Four-Year  High  School  Program 

The  Committee  desires  to  emphasize  its  presentation  of  a  possible 
six-year  junior-senior  high  school  program  of  social  studies,  and 
it  therefore  passes  by  the  four-year  program  (notwithstanding  the 
fact  that  the  8-4  form  is  still  the  dominant  type  of  our  educational 
organization)  with  no  comment  other  than  the  suggestion  that  valuable 
material  for  a  four-year  course  of  social  study  could  be  selected  from 
the  junior  high  school  program  sketched  in  the  preceding  pages.  Just 
what  would  be  selected  might  well  vary  from  place  to  place  according 
to  what  had  been  accomplished  in  the  first  six  grades. 


THE  REVENUE  ACT  OF  1921 

The  Revenue  act  of  1921  became  law  November  23,  1921.  It  repeals 
the  federal  excess-profits  tax,  the  transportation  taxes,  some  luxury 
and  other  taxes,  reduces  slightly  the  maximum  surtaxes  upon  individ- 
ual incomes  and  increases  somewhat  the  personal  exemptions  of  heads 
of  families  and  dependents,  permits  net  losses  of  one  year  to  be  offset 
against  net  income  of  following  years,  and  provides  for  the  final 
settlement  of  tax  cases  besides  making  some  other  changes  in  the 
previous  statute.  The  new  act  is  the  result  of  a  rather  long  and 
spirited  contest  between  those  who  desired  to  reduce  the  rates  of  the 
Revenue  act  of  1918  upon  large  incomes,  profits  and  wealth  and  those 
who  opposed  such  reductions  or  who,  at  least,  opposed  the  shifting  of 
greater  burdens  upon  the  masses  through  sales  and  other  taxes. 

The  passing  of  the  Revenue  act  marked  the  end  of  the  extraordinary 
session  of  Congress  which  President  Harding  called  to  meet  Api'il  11, 
1921,  for  the  purpose  of  revising  the  federal  revenue  and  tariff  laws. 
Twice  before,  President  Wilson  had  urged  Congress  to  revise  the 
Revenue  act  of  1918  but  his  words  fell  upon  the  ears  of  a  Congress 
dominated  by  a  hostile  party  which  evidently  decided  that  it  could 
enact  revenue  and  tariff  laws  to  its  own  liking  much  better  after  it  had 
secured  control  of  the  executive  as  well  as  of  the  legislative  branch  of 
the  government.  With  the  Republican  landslide  of  November,  1920, 
the  desired  control  became  overwhelming  and  soon  after  the  inaugura- 
tion in  March  the  extra  session  was  called. 

Before  Congress  met  there  was  disagreement  as  to  whether  the 
revenue  or  the  tariff  bill  should  be  taken  up  first.  The  agricultural 
and  industrial  depression  had  become  very  serious  and  the  complaints 
of  the  business  classes  about  heavy  taxes,  particularly  about  excess- 
profits  taxes,  were  growing  in  magnitude.  The  urgent  request  for  the 
revision  of  the  revenue  law  had  been  made  not  only  by  the  preceding 
Democratic  President  and  his  Secretaries  of  the  Treasury  and  now  by 
the  new  Republican  President  and  his  Secretary  of  the  Treasury  but 
also  by  nearly  all  of  the  Republican  leaders  in  and  out  of  Congress, 
the  press  of  the  country,  and  an  organized  propaganda  that  appeared 
to  have  the  unlimited  financial  backing  and  moral  support  of  the 
business  interests  of  the  nation. 

But  notwithstanding  all  of  this  pressure  for  tax  revision,  the  Ways 
and  Means  Committee  postponed  the  introduction  of  a  new  revenue 
measure  until  the  House  had  drafted,  debated  and  passed  not  only 
the  Emergency  Tariff  but  also  the  so-called  "Permanent"  Tariff  bill. 
Those  conversant  with  the  personnel  of  the  Ways  and  Means  Com- 
mittee and  the  interests  which  it  represents  could  easily  have  guessed 


76  Roy  G.  Blahey  [March 

that  the  tariff  would  be  taken  up  before  matters  of  internal  revenue 
in  view  of  the  then  prevailing  circumstances.  Significant  among  these 
circumstances  were  the  economic  depression  weighing  especially  heavily 
upon  the  farmers  and  the  persistence  of  the  belief  among  the  "Old 
Guard"  and  their  naive  disciples  that  the  tariff  is  the  panacea  for 
economic  ills. 

Consequently,  it  was  not  until  August  15  that  Chairman  Fordney 
introduced  the  revenue  bill  into  the  House.  It  was  referred,  as  a 
matter  of  form,  to  the  Ways  and  Means  whose  chairman  had  intro- 
duced it,  the  next  day  it  was  reported  back  to  the  House,  without 
change,  and  four  days  later  it  was  passed  by  the  House.  Shortly 
thereafter  Congress  recessed  for  four  weeks  and  the  Senate  Finance 
Committee  took  up  the  consideration  of  the  bill. 

The  progress  of  the  bill  through  the  Senate  was  quite  different  from 
that  in  the  House.  In  the  first  place,  the  Senate  Finance  Committee 
shelved  the  consideration  of  the  "Permanent"  Tariff  bill  and  undertook 
to  rewrite  the  revenue  bill.  Most  of  its  changes  were,  however,  merely 
in  matters  of  form  and  phraseolog3^  When  the  bill  reached  the  floor 
of  the  Senate,  a  real  contest  began.  A  number  of  western  Republican 
senators  together  with  Democrats  representing  agricultural  and  allied 
interests  foi'med  what  is  generally  known  as  the  "agricultural  bloc" 
or  the  "progressive  and  agricultural  bloc."  This  bloc  in  combination 
with  the  nearly  solid  Democratic  minority  in  the  Senate  refused  to 
accept  the  bill  as  passed  by  the  House  or  as  proposed  with  minor 
changes  by  the  Finance  Committee.  The  chief  contests  were  over  the 
rates  of  the  surtax  upon  individual  incomes,  the  maximum  rates  of  the 
tax  upon  estates,  the  rates  of  the  income  tax  upon  corporations,  the 
repeal  of  the  excess-profits  tax  and  the  adoption  of  a  comprehensive 
sales  tax.  This  bloc  forced  its  amendments  upon  the  Senate  and 
won  over  the  support  of  the  House  on  the  surtax  rates  in  spite  of  the 
urgent  but  contrary  recommendations  of  the  President  and  the  Secre- 
tary of  the  Treasury. 

Had  this  stage  been  reached  early  in  the  session,  the  contest  might 
not  have  been  interrupted  with  adjournment.  But  senators  and  repre- 
sentatives wore  doubtless  weary  and  had  little  hope  of  a  much  more 
satisfactory  compromise  at  that  time.  Furthermoi-e,  it  was  time  that 
both  taxpayers  and  administrative  officers  should  know  certainly  what 
taxes  were  to  be  levied  upon  income  and  profits,  at  least,  upon  those 
of  1921.  Another  possible  consideration  was  that  a  few  more  days 
would  have  run  the  extra  session  into  the  regular  session  with  less 
excuse  for  the  Congressional  mileage  of  20  cents  per  mile  between 
Washington  and  the  homes  of  the  respective  members.  Consequently, 
the  Senate  accepted  the  conferees'  report,  the  President  approved  it 


1922]  The  Revenue  Act  of  1921  77 

and  Congress  adjourned  on  the  eve  of  Thanksgiving.  The  leaders 
of  each  of  the  contesting  parties  as  well  as  the  nation  at  large  had 
cause  to  be  thankful  that  the  law  was  no  worse  than  it  was. 

It  was  generally  understood  by  everybody  even  before  the  elections 
of  1920  that  federal  expenditures  and  tax  burdens  were  to  be  reduced. 
There  was  no  real  problem  in  reducing  taxes  if  expenditures  could  be 
kept  down  but  nobody  seemed  able  or  willing  to  cut  expenditures  to 
such  a  point  that  taxes  would  be  light.  The  interest  on  the  war  debt 
alone  amounts  to  nearly  a  billion  dollars  a  year,  more  than  the  current 
ordinary  expenditures  of  the  federal  government  before  the  war.  Not 
only  the  Navy  and  the  War  Departments,  but  nearly  every  branch 
of  the  government  had  expanded  very  greatly  during  the  war  and 
few  have  been  got  back  to  the  pre-war  status.  Nor  is  there  much 
probability  that  many  of  them  will  ever  be  got  back  to  such  a  status. 

The  total  ordinary  expenditures  prior  to  the  war  were  about  a 
billion  dollars  or,  if  postal  expenditures  which  were  offset  by  postal 
receipts  are  excluded,  about  three  quarters  of  a  billion  dollars  a  year. 
In  the  fiscal  year  of  1920  ordinary  expenditures  were  nearly  G^/o 
billions,  and  in  1921  over  5  billions  of  dollars.'  On  April  30,  1921, 
Secretary  ^Mellon  estimated  that  the  total  ordinary  disbursements 
for  the  fiscal  year  1922  would  be  $4,565,877,033,  of  which  it  was 
estimated  that  $3,700,000,000  should  be  raised  by  internal  revenues. 
Accompanying  these  estimates  were  recommendations  that : 

(1)  The  excess-profits  tax  should  be  repealed  and  the  loss  in  revenue 
made  good  by  increasing  the  tax  on  corporations  by  o  per  cent  and  repealing 
their  exemption  of  $2000, 

(2)  The  combined  normal  and  surtaxes  upon  incomes  be  reduced 
to  about  40  per  cent  for  1921  and  to  about  33  per  cent  thereafter^ 

(3)  The  miscellaneous  specific-sales  taxes  and  excise  taxes,  including 
the  transportation  tax,  the  tobacco  taxes,  the  tax  on  admissions  and  the 
capital-stock  tax  be  retained  but  that  the  minor  so-called  "nuisance"  taxes 
on  fountain  drinks,  etc.,  be  repealed, 

(4)  New  or  additional  taxes  such  as  stamp  taxes,  or  a  license  tax  on  the 
use  of  automobiles,  be  imposed  so  as  to  bring  total  receipts  from  internal 
revenues  up  to  $4',000,000,000,  unless  Congress  cut  expenditures  $250,000,- 
000  to  $350,000,000,  or  levied  additional  levies  upon  staple  imports, 

(5)  The  administrative  provisions  of  the  law  be  simplified  and  pro- 
vision made  for  the  final  determination  and  settlement  of  tax  cases. 

On  August  4,  the  tariff  bills  having  been  passed  by  the  House  and 
the  revenue  bill  being  under  consideration  by  the  Committee  on  Ways 
and  Means,  Secretary  Mellon  appeared  before  the  committee  with 
revised  estimates  and  recommendations.  In  the  meantime  the  Budget 
bill  had  been  passed  and  General  Dawes  had  been  appointed  Director 

^Annual  Report  of  the  Secretary  of  the  Treasury  for  1921,  p.  154. 


78  Roy  G.  Blakey  [March 

of  the  Bureau  of  the  Budget.  The  new  estimate  of  expenditures  for 
1922  was  practically  the  same  as  that  of  April  30  though  it  was 
suggested  that  if  a  revised  tariff  bill  should  become  effective  about 
December  31,  1921,  it  might  increase  revenues  by  about  $70,000,000 
over  the  $300,000,000  that  was  expected  from  the  existing  law  in 
1922  and  by  about  $150,000,000  in  1923,  fiscal  years  in  each  case. 
Secretary  Mellon  repeated  his  former  recommendations  about  surtaxes, 
corporation  taxes,  taxes  on  ice  cream,  soda  fountain  drinks,  etc.,  but 
changed  his  recommendations  relative  to  transportation  taxes  which 
he  now  suggested  might  be  reduced  one  half  by  Jan.  1,  1922,  and 
repealed  entirely  a  year  later.  At  the  same  time,  he  recommended 
additional  taxes,  increased  documentary  stamps,  a  stamp  tax  of  2 
cents  on  bank  checks,  an  increase  of  first-class  postage  from  2  to  3 
cents  per  ounce,  an  annual  federal  license  tax  upon  motor  vehicles 
to  average  about  $10  per  vehicle  and  to  be  graded  according  to  power, 
and  increases  in  the  taxes  upon  cigarettes  and  other  tobacco  products. 

These  recommendations  brought  a  storm  of  protest  from  the  coun- 
try. President  Harding,  Secretary  Mellon,  Chairman  Fordney  and 
other  party  leaders  held  a  conference  on  August  9  and  the  next  day 
Secretary  Mellon  sent  Chairman  Fordney  a  new  set  of  estimates 
which  reduced  those  of  the  week  before  by  $350,000,000  and  which 
also  suggested  that  the  Treasury  would  borrow  $170,000,000  through 
certificates  of  indebtedness  and  also  try  to  increase  its  receipts  from 
the  salvaging  of  war  material,  particularly  in  the  War  Department, 
the  Navy  Department  and  the  Shipping  Board.  The  hope  was  also 
expressed  that  additional  receipts  might  be  got  from  a  new  tariff  law  to 
become  effective  by  December  31,  1921,'  and  that  $3,000,000,000  from 
internal  revenue  would  be  adequate  for  the  calendar  year  1922. 

Senator  Simmons  of  the  Finance  Committee  characterized  the 
Treasurer's  suggestion  of  borrowing  .$170,000,000  in  order  to  cut 
down  taxes  as  "unbusinesslike,"  "unstatesmanlike,"  "a  smart  expedi- 
ency," a  "subterfuge,"  and  a  "reprehensible  method  of  meeting  the 
financial  obligations  of  the  government."  Referz'ing  to  the  further 
cut  of  $350,000,000  in  expenditures  as  outlined  in  the  conference  of 
administration  leaders  he  charged  that  tlie  authorized  appropriations 
still  stood,  that  no  revocation  of  the  authorization  for  the  paj^ment  of 
these  amounts  had  been  proposed  and  that  it  was  safe  to  assume 
that  thev  would  be  expended,  and  that  if  any  technical  savings  were 
realized  that  they  would  have  to  be  taken  care  of  in  a  deficiency  bill.' 

-The  "Permanent"  Tariff  has  not  yet  been  passed.  Changes  in  economic  and 
international  conditions  make  the  problem  a  very  difficult  one  and  party  councils 
have  been  divided  as  to  what  is  wise  politically  in  view  of  the  approaching  elections. 

'Senate  Report,  no.  27.5,  67  Cong.  1  Sess.,  part  2,  p.  5. 


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80  Roy  G.  BlaTicy  [March 

Senator  Penrose'  estimated  that  the  bill  as  agreed  to  in  conference 
and  later  approved  would  yield  $3,216,100,000  in  the  fiscal  year  1922 
and  $2,611,100,000  in  the  fiscal  year  1923.  He  estimated  that  the 
receipts  would  exceed  expenditures  by  $16,000,000  in  1922  but  said  it 
was  impossible  to  make  an  accurate  forecast  for  1923.°  The  accom- 
panying table  shows  the  actual  receipts  and  expenditures  for  three 
pre-war  years,  for  1920  and  1921,  and  also  the  estimates  of  the 
Secretary  of  the  Treasury  for  the  fiscal  years  1922  and  1923.' 

The  Revenue  act  of  1921  follows  very  closely  the  Revenue  act 
of  1918.  As  has  been  said,  the  latter  act  "was  repealed  with  certain 
exceptions  and  then  reenacted  with  certain  changes."  Senator  Smoot, 
although  dissatisfied  with  the  bill,  said  in  criticizing  its  critics,  "When 
the  bill  becomes  law  it  will  be  the  present  revenue  baby  merely  dressed 
in  pink  instead  of  red."'  A  comparison  of  the  main  sections  or  "titles" 
into  which  the  two  laws  are  divided  shows  no  complete  changes  and 
partial  changes  in  only  three  of  the  fourteen  titles. 

A  brief  discussion  of  some  of  the  more  important  changes  in  each 
of  the  several  titles  or  sections  may  be  of  profit. 

Title  I — General  definitions.  Some  references  to  the  "present  war" 
which  were  contained  in  the  Revenue  act  of  1918  are  omitted  from  the 
new  act  but  no  very  significant  changes  appear  to  have  been  made. 

Title  II — Income  tax  rates.  Perhaps  the  hardest  fought  contest 
during  the  entire  session  of  Congress  was  over  the  surtax  rates  of  this 
title.  The  rates  of  the  normal  tax,  8  per  cent  upon  net  incomes  in 
excess  of  $4000  per  year  and  4  per  cent  on  smaller  ones,  remain 
unchanged,  though  there  was  some  attempt  to  lower  them.  The  in- 
crease of  the  personal  exemption  for  the  heads  of  families  from  $2000 
to  .$2500  where  family  net  income  does  not  exceed  $5000  and  of  that 
for  children  under  eighteen  and  other  dependents  from  $200  to  $400 
per  year  does  in  effect,  however,  result  in  reducing  normal  taxes  but 
not  surtaxes.  It  is  estimated  that  the  former  will  reduce  Treasury 
receipts  by  $40,000,000  and  the  latter  by  $30,000,000  a  year.' 

As  mentioned  above  Secretary  Mellon  recommended  that  the  maxi- 
mum of  the  combined  income  tax  rates  be  cut  from  73  per  cent 
(8  per  cent  normal  plus  65  per  cent  surtax)  to  40  per  cent  for  the 
current  fiscal  year  and  to  33  per  cent  for  succeeding  years.  With  the 
retention  of  8  per  cent  as  a  normal  rate,  this  would  mean  a  surtax  of 
32  per  cent  for  the  current  year  and  25  per  cent  thereafter.      Senator 

^Senator  Penrose  died  Dec.  31,  1921,  after  this  was  written. 

^Congressional  Record,  Nov.  22,  1921,  pp.  8992ff. 

'^Annual  Report  of  the  Secretary  of  the  Treasury  for  1921,  p.  12. 

'Cong.  Record,  Nov.  23,  1921,  p.  9073. 

'House  Report,  no.  S.'jO,  67  Cong.,  1  Sess.,  p.  3. 


1922]  The  Revenue  Act  of  1921  81 

Smoot  stated  that  the  rate  of  32  per  cent  was  not  merely  guessed  at 
but  that  it  was  a  scientific  rate  or,  rather,  "a  mathematical  calculation. 
The  reason  is  because  32  per  cent  is  the  difference  between  the  income 
from  a  tax-exempt  security  and  one  that  is  taxable  on  the  basis  of 
today's  money  market,""  The  Ways  and  Means  Committee,  the  House 
and  the  Senate  Finance  Committee  accepted  this  recommendation  which 
it  was  estimated  would  cause  a  loss  of  $90,000,000  in  Treasury  re- 
ceipts. The  Secretary  of  the  Treasury  and  others  argued,  both 
before  and  after  the  law  was  passed,  that  this  reduction  in  rates  would 
ultimately  cause  no  Treasury  loss  but  rather  a  gain  because  of  its 
effect  upon  business. 

In  spite  of  the  reductions  which  had  been  agreed  to  before  the  bill 
came  up  for  debate  in  the  Senate,  the  agricultural  bloc  forced  the 
Finance  Committee  and  the  Senate  itself  to  raise  the  maximum  surtax 
rate  from  32  per  cent  on  the  bracket  of  incomes  over  $66,000  to  50 
per  cent  on  the  bracket  over  $200,000.  The  Senate,  under  the  com- 
pulsion of  the  bloc,  changed  only  slightly  the  House  rates  on  incomes 
of  less  than  $66,000  which  were  exactly  the  same  as  the  rates  on  those 
brackets  under  the  act  of  1918,  but  it  did  thus  materially  modify  rates 
on  the  brackets  of  income  above  $66,000  and  it  also  postponed  for  one 
year  the  time  for  the  new  rates  to  take  effect,  leaving  the  rates  of  the 
old  law  effective  for  incomes  received  in  the  calendar  year  1921  upon 
which  taxes  are  paid  in  the  calendar  year  1922.  When  the  bill  was  sent 
to  conference,  the  majority  managers  for  the  Senate  let  the  majority 
managers  for  the  House  know  that  they  would  be  willing  to  accept 
a  compromise  of  a  40  per  cent  maximum  for  surtaxes.  These  Senate 
managers  were  really  not  in  sympathy  with  the  majority  of  the  Senate 
which  they  were  supposed  to  represent  and  it  would  have  been  easy 
to  have  thus  accomplished  their  own  desires  by  a  compromise  had  it 
not  been  that  by  this  time  the  sentiment  in  the  House  had  changed  in 
favor  of  higher  surtaxes  than  had  originally  been  voted  in  that  body. 
Consequently,  the  House  instructed  its  conferees  to  recede  from  its 
proposed  maximum  of  32  per  cent  and  to  accept  the  Senate  proposal  of 
50  per  cent,  in  spite  of  very  strong  pressure  from  President  Harding 
and  other  administration  leaders  for  a  lower  rate. 

In  the  debates  on  this  and  other  sections  of  the  bill  there  were 
many  charges  of  attempting  to  "soak  the  rich"  or,  on  the  other  hand, 
of  favoring  the  rich  with  low  rates.  The  Senate  Finance  Committee 
stated  its  argument  in  part  as  follows: 

Your  committee  recommends  a  reduction  of  the  maximum  surtax  from 
66  per  cent  to  32  per  cent  in  the  belief  that  in  the  near  future  the  lower 
surtax  will,  by  stimulating  sales  and  profit  taking,  and  by  making  possible 

'Cong.  Record,  Nov.  23,  1921,  p.  9074. 


82 


Roy  G.  Blakey 


[March 


transactions  now  blocked  by  excessive  surtax  rates,  not  only  facilitate 
needed  business  readjustments  but  actually  increase  the  revenue.  In  the 
long  run  in  the  opinion  of  your  committee  the  32  per  cent  rate  will  yield 
more  revenue  than  the  65  per  cent  rate.  The  effect  of  excessive  surtaxes 
in  forcing  the  investment  of  capital  in  tax-free  securities  and  in  encouraging 
taxpayers  to  avoid  the  tax  through  the  device  of  gifts,  division  of  their 
income,  refraining  from  profitable  sales,  and  placing  their  money  in  invest- 
ments which  promise  well  for  the  future,  but  yield  no  immediate  return,  is 
clearly  brought  out  in  Table  B  following,  which  shows  the  decline  in  incomes 
over  $300,000  from  the  year  1916  to  the  year  1919.  During  this  period 
the  number  of  taxpayers  and  the  amount  of  net  income  returned  by  the 
general  body  of  taxpayers  greatly  increased.  But  this  was  not  true  of  the 
wealthier  classes.^" 

Table  B. — Decline  of  Incomes  over  $300,000.* 


1916 
1917 
1918 
1919 


Number 
of  returns 


All 
classes 


437,036 
3,472,890 
4,425,114 
5,332,730 


Incomes 

over 
$300,000 


1,296 

1,015 

627 

679 


Net  income 


All 
classes 


$6,298,577,620 
13,652,383,207 
15,924,639,355 
19,859,491,448 


Incomes 

over 
$300,000 


$992,972,986 
731,372,153 
401,107,868 
440,011,589 


Income  from  dividends, 
interest,  and  investments. 


All 

classes 


53,217,348,030 
3,785,557,955 
3,872,234,935 
3,954,553,925 


Incomes 
over 
$300,000 


$706,945,738 
616,119,892 
344,111,461 
314,954,884 


'Senate  Report,  no.  275,  67  Cong.,  1  Sess.,  p.  5. 

Secretary  Mellon  presses  the  argument  still  further  in  his  annual 
report  for  1921."     He  says: 

If  we  take  the  taxable  income  from  interest,  exclusive  of  interest  on 
government  obligations,  the  decline  is  still  more  striking,  the  figures  being 
as  follows: 


Fiscal 
year 

Incomes 

Over  $300,000 

$100,000  to  $300,000 

$50,000  to  $100,000 

1916 
1917 
1918 
1919 

$165,733,900 

111,468,127 

74,610,507 

60,087,093 

$158,870,428 

119,539,786 

91,030,392 

91,467,182 

$93,280,583 
75,375,484 
65,784,062 
68,814,933 

The  foregoing  brackets  represent  the  incomes  subject  to  surtaxes  under 
the  Revenue  act  of  1918,  respectively,  at  63  to  65  per  cent,  52  to  63  per  cent 
and  29  to  48  per  cent.  To  these  figures  should  be  added  the  normal  tax  of 
8  per  cent  in  order  to  find  the  total  tax  obligation. 

"Senate  Report,  no.  275,  67th  Cong.,  1  Sess.,  pp.  4  and  5. 

"P.  21. 


1922]  The  Revenue  Act  of  1921  83 

In  view  of  these  figures,  is  it  not  clear  that  these  high  surtax  rates  are 
rapidly  ceasing  to  be  productive  of  revenue  to  the  government?  And  is  it 
not  equally  clear  that  their  effect  has  been  to  divert  into  unproductive 
channels  not  merely  the  income  on  old  investments,  but  to  force  a  large 
part  of  the  old  investment  capital  into  unproductive  channels? 

In  reply  to  a  previous  but  similiar  statement  of  Secretary  Mellon, 
Mr.  Kitchin,  the  ranking  Democratic  member  of  the  Ways  and  Means 
Committee,  made  the  following  typical  statement  in  his  minority  report 
to  the  House : 

Let  no  man  be  deceived  by  this  statement.  The  last  report  of  his 
Commissioner  of  Internal  Revenue  of  July  12  shows  that  it  is  absolutely 
untrue.      The   fact   is  that  for  each   year  since   1916,   including  the   years 

1918  and  1919,  when  the  existing  high  surtax  rates  applied,  there  has  been 
a  gradual  increase  of  millions  in  collection  of  taxes  from  incomes  from 
$50,000  upward.  In  1919,  with  the  existing  high  rate  on  big  incomes 
were  collected  $283,000,000  more  on  incomes  of  $.50,000  and  up  than  were 
paid   in    1917,   with   lower    surtaxes,   and   collected   $586,000,000   more    in 

1919  than  in  1916,  with  still  lower  surtax  rates.  Another  reason  he  and 
the  Republicans  give  for  the  reduction  is  that  the  millionaires  and  multi- 
millionaires with  big  incomes,  on  account  of  the  high  surtaxes  invested 
their  money  in  tax-free  securities  such  as  state  and  municipal  bonds,  and 
thus  reduce  the  taxes  on  incomes  from  bonds,  etc. 

Let  no  one  be  misled  by  this  statement  and  argument.  The  fact  is,  that 
according  to  the  reports  of  the  Commissioner  of  Internal  Revenue  since 
January  1,  1916,  including  the  report  of  the  present  Commissioner  of 
Internal  Revenue  of  July  12,  in  1919,  with  the  existing  high  surtax  rates, 
the  total  net  income  from  "interest  on  bonds,  notes,  etc.,"  ~ccas  ■$564,000,000 
more  than  in  1917,  with  much  lower  surtax  rates,  and  $500,000,000  more 
than  in  1916,  with  still  lower  surtaxes.  So  it  seems  that  with  high  surtax 
rates  we  have  had  an  increased  income  from  interest  on  bonds,  etc.  How- 
ever, even  if  the  millionaires  and  multimillionaires  were  putting  their  sur- 
plus income  into  state,  county,  and  municipal  bonds,  are  not  the  people  of 
the  states  and  counties  and  municipalities  thereby  benefited  by  getting  a 
higher  price  for  such  bonds,  and  do  not  the  proceeds  from  these  state  and 
municipal  bonds  go  more  directly  for  the  benefit  of  the  people  than  the 
taxes  of  the  federal  government  ?  "With  the  proceeds  do  not  they  build 
public  roads,  which  the  people  in  the  states,  counties,  and  cities  see  and 
use  every  day;  do  they  not  go  to  build  public  schools  all  over  the  states, 
counties,  and  cities,  which  the  people  directly  use;  and  do  they  not  go  to 
the  building  and  maintaining  of  the  eleemosynary  institutions  of  the  states, 
which  benefit  the  people  directly  more  than  in  spending  the  money  from 
federal  taxes  for  large  standing  armies  and  big  navies  ?^' 

Surtax  rates  adopted.  The  surtax  rates  adopted  in  the  new  law 
for  incomes  received  beginning  January  1,  1922,  start  at  1  per  cent, 
upon  the  amount  by  which  the  net  income  exceeds  $6,000   and  does 

"House  Report,  no.  350,  67  Cong.,  1  Sess.,  part  2,  pp.  10-11. 


84  Roy  G.  Blakey  [March 

not  exceed  $10,000.  With  the  exceptions  that  there  is  no  7  per  cent 
or  14  per  cent  rate  and  that  the  15  per  cent  bracket  consists  of  the 
$4,000  between  $32,000  and  $36,000,  the  surtax  rates  increase  by 
steps  of  1  per  cent  upon  each  income  bracket  of  $2,000  until  they 
reach  a  rate  of  47  per  cent  upon  the  bracket  between  $98,000  and 
$100,000.  Then  the  brackets  become  much  larger,  the  taxes  being 
48  per  cent  on  the  bracket  $100,000  to  $150,000,  49  per  cent  on  the 
bracket  $150,000  to  $200,000  and  50  per  cent  on  the  net  income  in 
excess  of  $200,000." 

Following  are  some  of  the  other  more  important  changes  under 
Title  II. 

Dividends.  The  new  law  states  specifically  that  a  stock  dividend 
shall  not  be  subject  to  tax,  thus  conforming  to  the  decision  of  the 
supreme  court  in  the  case  of  Eisner  vs.  Macomber.  The  same  section 
(201)  "provides  a  general  rule  for  distributions  in  liquidation  and  all 
other  distributions  otherwise  than  out  of  earnings  accumulated  since 
February  28,  1913.  The  rule  is  that  such  distributions  shall  be 
treated  as  a  partial  or  full  return  of  cost  to  the  distributee  of  his 
stock  or  shares,  and  if  the  stockholder  receives  more  than  the  cost 
price  of  the  stock,  he  is  taxable  under  section  202  [excess  of  receipts 
over  cost  price]  with  respect  to  the  excess  in  the  same  manner  as 
though  such  stock  had  been  sold.""*  Gains  accruing  prior  to  March  1, 
1913,  the  approximate  date  when  the  income  tax  amendment  became 
a  part  of  the  Constitution,  are  not  to  be  included  in  taxable  income 
when  stock  is  sold.  It  is  further  provided  that  a  taxable  distribution 
shall  be  included  in  gross  income  as  of  the  date  when  the  cash  or  other 
property  is  unqualifiedly  made  subject  to  the  demands  of  the  distrib- 
utee. In  other  words,  such  distributions  are  not  taxable  to  the 
individual  distributee  as  of  the  date  earned  if  control  is  retained  in 
the  hands  of  the  corporation  until  a  later  date.** 

Property  acquired  before  March  1,  1913.  Because  of  the  supreme 
court  decisions  in  the  cases  of  Goodrich  vs.  Edwards  and  Walsh  vs. 
Brewster  (decided  March  28,  1921)  the  new  law  states  definitely  the 
rule  for  determining  gain  or  loss  in  the  case  of  property  which  was 
acquired  before  but  sold  after  March  1,  1913.  Prior  to  these  deci- 
sions, the  value  as  of  March  1,  1913,  regardless  of  original  cost,  was 
considered  the  basis  for  determining  gain  or  loss  in  case  of  a  sale. 

"For  rates  applicable  to  the  income  received  in  1921  and  preceding  calendar 
years  see  the  June,  1919,  issue  of  this  Review,  pp.  217  and  218. 

^^52  U.  S.,  189. 

^Report  of  the  Senate  Finance  Committee,  Senate  Report,  no.  275,  67  Cong., 
1  Sess.,  pp.  9-10. 

"See  Senate  Report,  no.  275,  67  Cong.,  1  Sess.,  pp.  9-10. 


1922]  The  Revenue  Act  of  1921  85 

The  concession  of  the  Solicitor  General  in  the  above  cases,  adopted  by 
the  court,  was  to  the  ejTect  that  gain  or  loss  in  every  case  is  to  be 
determined  upon  the  basis  of  cost  or  acquisition  value  and  not  by  the 
March  1,  1913,  value  of  the  property,  the  gain  or  loss  accruing  before 
that  date,  however,  being  excluded  for  purposes  of  computing  the  net 
income  subject  to  tax/' 

The  new  law  is  more  liberal  to  the  taxpayer  in  providing  that  cost 
price  or  fair  value  as  of  March  1,  1913,  whichever  is  the  more  favor- 
able to  the  taxpayer,  shall  be  taken  as  the  basis  for  determining 
gain  or  loss  except  that  "if  the  amount  realized  therefor  is  more 
than  such  basis  [cost]  but  not  more  than  its  fair  market  price  or 
value  as  of  March  1,  1913,  or  less  than  such  basis  [cost]  but  not 
less  than  such  fair  market  price  or  value,  no  gain  shall  be  included 
in  and  no  loss  deducted  from  gross  income.""  An  exception  is  the  case 
of  property  which  should  be  included  in  the  inventory  where  the  basis 
is  the  last  inventory  value. 

Sale  of  gifts.  A  new  rule  has  been  made  also  for  determining  gain 
or  loss  from  the  sale  of  gifts.  Heretofore  the  ruling  of  the  Commis- 
sioner of  Internal  Revenue  has  made  the  value  at  the  time  of  acquisition 
the  basis.  It  is  alleged  that  this  has  enabled  many  persons  to  evade 
taxes  by  giving  property  which  has  appreciated  in  value  to  wives, 
relatives,  or  others  shortly  before  making  a  sale.  The  new  rule  is 
that  the  basis  for  determination  of  gain  or  loss  in  the  case  of  property 
acquired  by  gift  after  December  31,  1920,  shall  be  the  same  as  if  the 
property  were  sold  by  the  last  preceding  owner  by  whom  it  was  not 
acquired  by  gift.  The  former  ruling  seems  to  hold  and  to  be  con- 
firmed by  statute  in  the  case  of  inheritances,  however,  the  phraseology 
of  the  new  law  being:  "In  the  case  of  such  property,  acquired  by 
bequest,  devise,  or  inheritance,  the  basis  shall  be  the  fair  market  price 
or  value  of  such  property  at  the  time  of  such  acquisition."  This 
exception  may  be  justified  on  the  ground  that  such  property  may  be 
subject  to  the  inheritance  tax  and  that  there  is  no  prima  facie  evidence 
of  a  donation  for  the  purpose  of  evading  the  income  tax. 

Exchanges  of  property.  The  recent  act  makes  another  provision 
that  is  more  favorable  to  the  taxpayer,  also,  in  certain  cases  where 
property  is  exchanged  for  other  similar  property,  especially  where 
the  property  received  in  exchange  has  no  readily  realized  market  value 
or  where  the  conversion  is  more  or  less  compulsory  as,  for  example, 
in  case  of  fire,  shipwreck,  or  condemnation  of  property  for  public  use. 

Capital  gain.     Another  change  is  the  definition  of  and  the  special 

"See  Senate  Report,  no.  275,  67  Cong.,  1  Sess.,  pp.  9-10. 
^Revenue  act  of  1921,  sec.  202  (b). 
"^Ihid.,  sec.  202  (a)    (3). 


86  Roy  G.  Blahey  [March 

provision  for  the  taxation  of  capital  gain  or  the  deduction  of  capital 
loss.  During  1921  the  United  States  District  Court  of  Connecticut^ 
ruled  that  an  appreciation  in  capital  assets,  inasmuch  as  it  was  merely 
an  increase  in  capital  rather  than  income,  was  not  taxable  as  income 
under  the  federal  income  tax  amendment.  This  decision  was  in  con- 
formity with  British  practice  and  some  American  economists  support- 
ed it  but,  if  it  had  been  upheld,  the  administration  of  the  income  tax 
would  have  been  thrown  into  utter  chaos.  No  one  knows  how  many 
millions  of  back  taxes  that  had  already  been  paid  and  spent  would 
have  been  thrown  into  litigation.  The  effect  upon  government  finances 
and  credit  might  have  been  exceedingly  serious.  But  the  supreme 
court  soon  reversed  the  decision  of  the  Connecticut  court,"  rightly  in 
the  opinion  of  the  writer,  and  the  Revenue  act  of  1921  definitely 
recognizes  and  defines  the  difference  between  "capital  gain"  and  "ordin- 
ary net  income"  from  the  latter  of  which  all  items  of  capital  gain, 
capital  loss,  and  capital  deductions  are  excluded. 

The  ruling  of  the  Commissioner  of  Internal  Revenue  has  been  that 
a  gain  such  as  is  now  termed  a  capital  gain  should  be  taxable  in  its 
entirety  as  of  the  date  when  the  sale  is  made,  although  the  property 
might  have  been  held  and  the  actual  gain  might  have  accrued  gradually 
through  a  number  of  years.  If  the  payment  in  case  of  sale  was  a 
relatively  small  one,  that  is,  not  substantial  enough  to  assure  a  closed 
transaction — for  example,  if  it  was  less  than  25  per  cent  of  the  total 
price,  the  gain  might  be  apportioned  over  the  various  years  in  which 
installment  payments  were  made.  It  is  obvious  that  if  a  sale  was 
made  in  a  year  in  which  tax  rates  were  very  high,  especially  if  the 
seller  had  a  large  income  which  subjected  him  to  the  higher  surtax  rates, 
a  large  part,  (possibly  as  much  as  73  per  cent  or  more)  of  the  entire 
increase  between  cost  and  selling  price  might  be  taken  in  one  year's  tax, 
even  though  much  of  the  gain  might  be  nominal  rather  than  real  because 
of  differences  in  the  purchasing  power  of  money.  As  a  consequence 
many  sales  have  been  held  up,  business  has  been  hindered,  and  the 
government  has  failed  to  get  taxes  where  substantial  revenue  might  have 
been  obtained  if  the  rates  had  been  lower. 

To  remed}^  this  situation  in  part,  the  new  law  provides  that  capital 
net  gains  of  individuals  may  be  taxed  at  121^  per  cent  instead  of  at 
the  higher  surtax  rates  which  are  applicable  to  ordinary  net  incomes 
that  reach  the  higher  brackets,  provided  that  any  one  who  elects 
to  have  his  capital  gains  taxed  at  1214  jjer  cent  shall  in  no  case  pay 
less  than  121^  per  cent  upon  his  entire  net  income.  In  other  words, 
this  limitation  on  the  taxation  of  capital  gains  is   of  benefit  to   no 

^^  Walsh  vs.  Brewster,  268  Fed.  20T. 

''^Supreme  Court  Reporter,  vol.  41,  no.  13,  p.  392,  (May  1,  1921.) 


1922]  The  Revenue  Act   of  1921  87 

individual  having  a  net  income  of  less  than  $31,000,  for  such  a  person 
would  have  to  pay  less  than  an  average  of  1214  per  cent  any  way. 
The  Senate  bill  provided  that  only  40  per  cent  of  capital  gains  should 
be  taxed.  This  would  have  been  of  advantage  to  people  of  small 
means  as  well  as  to  those  with  large  incomes  but  this  provision  was 
defeated  in  conference  and  the  provision  stated  above  substituted. 
Senator  Jones  of  New  Mexico,  whom  few  would  characterize  as  one  of 
the  radical  Democrats  of  intemperate  speech,  said  of  the  conferees' 
change :  "Can  Senators  imagine  a  more  stupendous  infamy  than  such 
a  proposition  as  that?  At  the  time  the  conferees  of  the  Senate  were 
appointed,  the  Senate  wanted  all  to  participate  alike  in  the  reduction 
of  taxation  upon  capital  gain;  but  as  I  think  the  Senate  and  the 
country  will  believe  the  conferees  carried  out  the  purpose  to  grant 
relief  through  this  bill  only  to  those  who  are  profiteering  upon  the 
country,  who  have  high  incomes,  and  to  put  the  burden  upon  those 
who  are  less  able  to  pay."''  Apparently  the  law  does  nothing  to 
modify  the  ruling  which  allots  for  tax  purposes  all  of  the  capital 
gain  to  the  year  realized  upon,  regardless  of  when  or  how  long  it  was 
accruing. 

Deductions  and  exemptions.  In  the  main,  the  new  law  allows  the 
same  deductions  from  gross  income  to  arrive  at  taxable  net  income 
as  did  the  previous  law.  A  minor  exception  is  in  the  case  of  traveling 
expenses  where  the  taxpayer  may  deduct  the  entire  amount  expended 
for  meals  and  lodging  while  ^way  from  home  in  the  pursuit  of  a  trade 
or  business.  Only  a  part  of  such  living  expenses  was  deductible 
under  the  ruling  of  the  Commissioner  prior  to  the  passage  of  the 
present  law. 

Building  and  loan  association  dividends.  Another  deduction  per- 
missible for  individuals  for  each  of  the  five  years  beginning  January  1, 
1922,  is  that  of  $300  of  interest  or  dividends  received  from  domestic 
building  and  loan  associations  operated  exclusively  for  the  purpose 
of  making  loans  to  members.  This  provision  was  severely  criticised 
as  a  discrimination  in  favor  of  investments  in  building  and  loan  asso- 
ciations and  against  investments  in  Liberty  bonds,  savings  deposits, 
etc.  The  House  bill  had  proposed  an  exemption  of  $500  a  year  in 
such  cases.  Commenting  upon  the  exemption  of  the  smaller  amount, 
Senator  Smoot,  one  of  the  conference  managers  for  the  Senate,  said : 
"I  think  it  is  an  outrage.  It  is  unjust.  It  cannot  be  defended,  in 
my  opinion;  but  we  had  to  yield  [to  the  House  conferees]  or  have  no 
report.  This  is  what  it  means :  Six  per  cent  on  .$5000  is  ,$300. 
Therefore,  if  a  man  and  his  wife  and  six  children  want  to  invest  .$5000 

^■Cong.  Record,  Nov.  23,  1921,  p.  9071. 


88  Roy  G.  Blahey  [March 

each  in  these  associations,  they  can  have  an  exemption  of  the  income 
from  $40,000."'' 

Income  of  huilding  and  loan  asociations.  The  above  has  reference 
to  parts  of  individual  incomes  received  from  building  and  loan  associa- 
tions. In  the  part  of  the  law  that  deals  with  taxes  on  corporations, 
domestic  building  and  loan  associations  are  exempt  from  the  corpora- 
tion income  tax  if  substantially  all  of  their  business  is  confined  to 
making  loans  to  members.  The  rather  general  exemption  of  building 
and  loan  associations  under  previous  income  tax  laws  has  led  to  much 
complaint  on  the  part  of  savings  banks  and  others,  especially  in  Ohio 
and  surrounding  states  where  such  associations  carry  on  more  or  less 
of  what  is  usually  considered  banking  business.  The  new  law  attempts 
to  remove  this  discrimination  which  was  more  or  less  difficult  to  handle 
by  mere  rulings  of  the  Commissioner  of  Internal  Revenue. 

Annual  net  losses  carried  forward.  A  much  more  important  provi- 
sion of  the  new  law  than  those  allowing  increased  deductions  in  con- 
nection with  traveling  expenses  and  building  and  loan  association  divi- 
dends is  that  which  allows  the  net  losses  of  a  business  incurred  in  one 
year  to  be  deducted  from  the  taxable  net  income  of  the  following  year 
or  years,  effective  beginning  January  1,  1921.  There  was  a  provision 
somewhat  like  this  in  the  act  of  1918  for  any  taxable  year  beginning 
after  October  31,  1918,  and  ending  prior  to  January  31,  1920,  which 
was  meant  to  take  care  of  the  extraordinary  inventory  and  similar 
losses  which  were  expected  to  result  from  the  post-war  adjustments. 
But  the  general  rule  heretofore  has  been  to  consider  the  income  of  one 
year  as  a  unit  by  itself,  entirely  unrelated  to  the  income  of  other  years 
for  tax  purposes.  Over  a  term  of  years  the  net  losses  of  an  individual 
or  of  a  business  concern  might  exceed  the  total  of  net  gains  for  the 
more  prosperous  years ;  nevertheless,  under  most  former  laws,  taxes 
would  have  to  be  paid  upon  the  incomes  of  the  prosperous  years.  This 
practice  is  evidently  a  discrimination  against  businesses  and  individuals 
with  fluctuating  incomes  as  compared  with  those  having  equivalent  but 
regular  incomes  from  year  to  year.  The  British  have  met  this  situa- 
tion in  part  by  using  as  a  base  for  tax  purposes  the  average  income 
of  the  last  three  years  instead  of  one  year  only.  The  change  in  the 
act  of  1921  is  a  real  improvement  because  the  chopping  of  income  into 
units  of  a  year  is  purely  arbitrary  and  merely  for  convenience.  There 
does  not  seem  to  be  sufficient  reason,  however,  for  confining  this  pro- 
vision to  losses  resulting  from  the  operation  of  trade  or  business 
regularly  carried  on  by  the  taxpayer.  It  should  apply  to  all  losses 
where  the  corresponding  gain  is  taxable.  The  same  might  be  said  of 
the  new  provision  wliich  prohibits  the  deduction  of  losses  in  case  of 

"Co7?<7.  Record,  Nov.  23,  1921,  p.  9066. 


1922]  The  Revenue  Act  of  1921  '         89 

"wash  sales,"  that  is,  where  stocks  are  sold  to  establish  losses  for 
income  tax  purposes  and  are  then  repurchased  within  thirty  days. 

Liberty  bond  interest.  In  concluding  the  comments  upon  changes 
and  proposed  changes  in  deductions  and  exemptions  under  the  new  law 
it  might  be  mentioned  that  the  Senate  Finance  Committee  eliminated 
from  the  House  bill  the  provision  exempting  from  the  income  tax  the 
salaries  of  the  President  and  federal  judges;^*  also,  that  a  slight 
amendment  has  been  made  for  the  purpose  of  simplifying  the  very  com- 
plex exemption  privileges  accorded  to  interest  on  Liberty  bonds  under 
the  various  Liberty  Loan  and  Revenue  acts. 

Returns.  A  new  requirement  is  that  a  return,  or  statement  of 
income,  must  be  made  by  "every  individual  having  a  gross  income  for 
the  taxable  year,  of  $5000  or  over,  regardless  of  the  amount  of  his 
net  income."  This  requirement  applies  also  if  the  aggregate  income 
of  husband  and  wife  is  $5000  or  over.  The  provision  of  the  former  law, 
which  is  included  in  the  new  law,  is  that  a  return  shall  be  made  by 
every  unmarried  individual  and,  also,  by  every  married  individual 
who  does  not  live  with  husband  or  wife,  whose  net  income  for  the  taxable 
year  is  $1000  or  over,  and  by  heads  of  families  whose  income  is  $2000 
or  over.  Where  the  aggregate  net  income  of  husband  and  wife  is 
$2000  or  over,  or  where  the  aggregate  gross  income  is  .$5000  or  over, 
each  may  make  a  separate  return  or  they  may  make  one  combined 
return.  In  practice,  if  the  aggregate  is  large  enough  to  be  subject 
to  surtax  rates,  two  returns  are  likely  to  be  made  in  order  that  all  or  a 
part  of  the  surtaxes  may  be  evaded. 

Title  II — Income  tax — Corporations. 

Title  III — War-profits  and  excess-profits  tax  for  1921.  The  in- 
come tax  on  corporations  which  is  a  part  of  Title  II  and  the  excess- 
profits  tax  which  applies  to  corporations  only  and  which  forms  Title 
III  can  be  most  profitably"  discussed  together  for  the  reason  that  the 
principal  change  in  the  former  is  made  in  lieu  of  the  change  in  the 
latter.  In  other  words,  the  corporation  income  tax  is  increased  from 
10  per  cent  to  12^  per  cent  in  lieu  of  the  repeal  of  the  excess-profits 
tax,  both  changes  applicable  to  income  received  after  December  31, 
1921. 

It  will  be  recalled  that  the  Revenue  act  of  1918  was  practically 
framed  before  the  signing  of  the  Armistice  on  November  11,  1918, 
though  a  number  of  changes  were  incorporated  after  that  date  and 
before  the  final  approval  on  February  24,  1919.  On  May  20,  1919, 
soon  after  his  return  from  the  Paris  Peace  Conference  and  only  three 
months  after  the  Revenue  act  of  1918  became  law.  President  Wilson 
in  his  message  to  Congress  urged  the  early  revision  of  the  tax  laws 

^Commercial  and  Financial  Chronicle,  Sept.  1921,  p.  1207. 


90  Roy  G.  Blaliey  [March 

and  mentioned  in  particular  that  excess-profits  tax  rates  which  were 
appropriate  for  war  years  were  not  appropriate  for  a  permanent 
peace  time  system.  He  was  not  in  favor  of  repealing  the  excess- 
profits  tax,  however,  saying:  "I  take  it  for  granted  that  its  [our  tax 
system's]  mainstays  will  henceforth  be  the  income  tax,  the  excess-profits 
tax,  and  the  estate  tax."  In  his  annual  message  of  December  7,  1920, 
he  again  urged  "immediate  consideration  of  the  revision  of  our  tax 
laws.  Simplification  of  income  and  profits  taxes  has  become  an  imme- 
diate necessity."  At  least  nine  months  before  this  latter  date,  his 
Secretary  of  the  Treasury,  Mr.  Houston,  suggested  to  Chairman  Ford- 
ney  the  "fundamental  modification  or  repeal  of  the  excess-profits  tax 
at  the  earliest  possible  future  date."^° 

Professor  T.  S.  Adams  has  been  the  principal  treasury  expert  and 
adviser  of  Secretaries  of  the  Treasury,  Ways  and  Means  Committees, 
and  Finance  Committees  on  matters  of  revenue  legislation  not  only 
during  the  previous  Democratic  administration  of  eight  years  but  also 
during  the  present  administration  to  date.  Before  the  American 
Economic  Association,  Professor  Adams  had  previously  discussed  the 
excess-profits  tax  as  a  new  important  and  permanent  source  of  revenue, 
but  by  1920  or  before  he  was  evidently  convinced  that  it  should  be 
repealed — chiefly  because  it  worked  unequally  as  between  different 
business  organizations  and  because  its  administration  clogged  the 
internal  revenue  machinery  and  indeed  threatened  its  breakdown.'* 
That  Professor  Adams'  influence  has  been  remarkable  is  evidenced 
by  the  recommendations  both  of  President  Wilson's  Secretaries  of  the 
Treasury  and  also  of  President  Harding's  Secretary  as  well  as  by  the 
bill  of  the  Ways  and  Means  Committee  and  also  the  bill  of  the  Finance 
Committee,  and  this  is  especially  noteworthy  in  view  of  the  over- 
whelming political  revolution  following  the  somewhat  bitter  election 
campaign  of  1920.  Not  all  of  these  recommendations  and  bills  have 
conformed  exactly  to  Professor  Adams'  published  articles  but  the 
internal  evidence  of  his  influence  is  strong  in  each  case. 

It  will  be  recalled  that  the  Revenue  act  of  1918  provided  for  a  cor- 
poration tax  of  10  per  cent  upon  net  income,  after  an  exemption  of 
$2000,  in  addition  to  the  excess-profits  tax.  The  excess-profits  tax 
exempted  $3000  plus  8  per  cent  upon  invested  capital  and  then  took 
one  fifth  of  the  net  income  in  the  bracket  between  the  exemption  and  a 
profit  of  20  per  cent  on  invested  capital,  and  two  fifths  of  profits  in 
excess  of  20  per  cent.      In  arguing  for  the  repeal  of  the  excess-profits 

^Annual  Report  for  1920,  p.  32. 

^Needed  Tax  Reform  in  the  United  States,  a  series  of  ten  articles  published  in 
the  New  York  Evening  Post  in  the  summer  of  1920  and  later  reprinted  in  pamphlet 
form,  is  one  of  the  most  informing  brief  discussions  that  has  been  published. 


1922] 


The  Revenue  Act  of  1921 


91 


tax,  Professor  Adams  had  suggested  as  a  partial  substitute  a  tax  of 
20  per  cent  upon  the  undistributed  earnings  of  corporations  and  also 
upon  other  investments  or  savings.  In  conformity  with  his  suggestion, 
Secretary  Houston  in  a  letter  of  March  17,  1920,  to  Chairman  Fordney 
and  again  in  his  Annual  Report  for  1920  recommended  a  20  per  cent 
rate  upon  corporate  net  income,  but  suggested  also  the  possible  desir- 
ability of  25  per  cent  for  the  first  fiscal  year,  20  per  cent  the  second 
and  15  per  cent  thereafter.  It  has  been  noted  above  that  Secretary 
Mellon  recommended  that  the  corporation  income  tax  rate  be  increased 
5  per  cent,  thereby  making  it  15  per  cent  instead  of  10  per  cent.  The 
House,  however,  put  the  rate  at  12^/0  per  cent.  Chairman  Fordney 
estimated  that  the  repeal  of  the  excess-profits  tax  would  reduce  revenues 
by  $450,000,000  but  that  the  increase  of  the  corporation  tax  by 
214  per  cent  would  make  up  for  $133,750,000  of  the  loss. 

Repeal  of  excess-profits  tax.  The  Senate  Finance  Committee  recom- 
mended a  15  per  cent  corporation  tax  but  the  repeal  of  the  capital 
stock  tax  of  $1  per  $1000  of  capital.  In  recommending  the  repeal  of 
the  excess-profits  tax,  it  assumed  that  everyone  was  convinced  of  the 
desirability  of  such  a  change  because  "whatever  may  be  its  theoretical 
merits,  in  practice  it  exempts  the  overcapitalized  corporation,  falls 
more  heavily  upon  corporations  of  small  or  moderate  size  than  upon 
larger  corporations,  penalizes  business  conservatism,  and  places  upon 
the  Bureau  of  Internal  Revenue  tasks  beyond  its  strength."  In  con- 
firmation of  this  statement  the  committee  presented  the  following  table 
based  upon  the  latest  Treasury  statistics  covering  all  corporations 
which  made  full  returns  of  invested  capital : 

Table  A. — AvEiaAGE  Rate  of  Excess-profits  and  Incojie  Taxes  upon  Coeporations 

OF  Different  Sizes.' 
(Average   size  of  corporations — measured   by   invested   capital — earning   different 
rates  of  profit;  corporation  returns  made  in  1919.) 


Per  cent 

Per  cent 

of  net  income 

Number 

Average 

income  and 

to  invested 

of 

Invested 

invested 

profits  tax 

capital 

corporations 

capital 

capital 

to  net  income 

Less  than  5 

10,689 

$14,104,248,246 

$1,319,511 

10.99 

5  to  10 

21,869 

15,925,632,944 

729,229 

11.93 

10        15 

22,684 

8,962,689,034 

395,111 

21.60 

15       20 

17,388 

5,482,627,463 

315,311 

33.99 

20       25 

11,987 

3,251,948,260 

271,290 

41.51 

25       30 

7,743 

3,785,581,785 

488,904 

51.22 

30       40 

9,050 

2,421,28.5,621 

267,545 

53.38 

40        50 

4,807 

1,2.32,173,122 

256,329 

57.58 

50  ■     75 

4,911 

784,2.54,745 

159,693 

62..30 

75  ■     100 

1,734 

205,744,478 

118,653 

64.24 

100  and  over 

2,194 

133,853,470 

61,009 

67.40 

Total 

115,056 

$.56,290,0.39,168 

$489,240 

37.86 

'Senate  Report  no.  275,  67  Cong.,  1  Sess.,  p.  4. 


92  Roy  G.  Blahey  [March 

The  recommendations  of  the  majority  of  the  Ways  and  Means 
Committee  and  also  those  of  the  majority  of  the  Finance  Committee 
were  violently  attacked  by  the  opposition.  In  his  minority  report 
Mr.  Kitchin  stated: 

An  analysis  of  the  statistics  contained  in  the  detailed  report  as  to  cor- 
poration incomes  and  income  and  excess-profits  taxes  in  the  report  of  the 
commissioner  for  the  calendar  years  1917  and  1918 — the  1918  report  being 
the  first  and  only  one  containing  the  details  of  corporate  income  and  income 
and  excess-profits  taxes  arranged  in  classes  according  to  the  amount  of 
profits  each  class  made — shows  thai  180  corporations  making  annually  from 
$5,000,000  up  to  $300,000,000  and  over  (the  Steel  Corporation  made  over 
$500,000,000  net  profits  in  1918)  had  a  net  income  of  $2,554,000,000, 
and  while  paying  only  $203,000,000  income  tax  paid  $848,000,000  excess- 
profits  taxes,  while  the  over  300,000  corporations  making  from  nothing  up 
to  $100,000  net  income  yearly  paid  only  $285,000,000  excess-profits  taxes. 

One  thousand  and  twenty-six  corporations,  with  a  net  income  of  $4,255,- 
000,000,  more  than  one  half  of  the  total  corporate  net  income  of  all  the 
317,559  corporations,  while  paying  only  $333,000,000  income  tax,  paid 
$1,422,000,000  of  excess-profits  tax;  that  is,  paid  over  one  half,  or  nearly 
two  thirds,  of  the  entire  excess-profits  tax,  and  $344,000,000  excess-profits 
tax  more  than  the  remaining  316,500  other  corporations. 

An  analysis  of  the  returns  as  detailed  in  the  reports  of  the  Commissioner 
of  Internal  Revenue  since  January  1,  1916,  up  to  and  including  the  present 
commissioner's  report  of  July  12,  1921,  will  show  that  corporations  in  the 
United  States  made  net  profits  to  January  1,  1921,  in  round  numbers 
$50,000,000,000 — to  be  more  exact,  $47,000,000,000.  After  deducting  all 
the  taxes  they  paid  since  January  1,  1916,  income,  excess-profits  tax,  and 
other  war  taxes,  they  have  a  clear  profit  left  of  $38 ,000 ,000 ,000 ,  more  than 
four  fifths  of  which  was  made  by  less  than  10,000  corporations,  and  more 
than  half  of  which  was  made  by  1,026  of  the  big  profiteering  corporations, 
which  includes  the  Steel  Trust,  the  Bethlehem  Steel  Co.,  the  Dupont  com- 
panies, the  various  Standard  Oil  Companies,  the  coal  combine,  the  woolen 
trust,  the  meat  packers,  etc. 

/  trust  no  Democrat  will  join  xvith  the  Republicans  in  this  monstrous 
scheme.  The  12^/2  per  cent  flat  tax  on  corporations,  even  retaining  the 
present  exemption  of  $2,000,  will  increase  the  tax  of  the  smaller  and 
weaker  corporations  (which  number  about  250,000)  making  6,  7,  and  8  and 
10  per  cent  on  invested  capital  at  least  50  per  cent  and  decrease  the  taxes 
of  these  big  profiteering  corporations  from,  33  1-3  to  over  50  per  cent  which 
make  20,  30,  40,  and  50  per  cent,  and  over,  on  invested  capital,  which 
corporations  number  less  than  10,000.^' 

Many  others  in  both  House  and  Senate  made  statements   of  similar 
tenor. 

The  motion  of  Senator  Reed  of  Missouri  to  retain  the  excess-profits 
tax  was  rejected  by  a  vote  of  39  to  28,  24  Democrats  and  4  Republicans 

^'House  report,  no.  350,  67  Cong.,  1  Scss.,  part  2,  pp.  2-4. 


1922]  The  Revenue  Act  of  1921  93 

voting  for  it.  The  Senate  next  rejected  a  motion  to  retain  the  tax  at 
about  half  the  former  rates.  On  October  26,  the  Senate  voted  to 
repeal  this  tax  upon  income  received  after  December  31,  1921,  instead 
of  making  it  effective  on  the  income  received  in  1921  as  favored  by  the 
leaders  of  the  Finance  Committee  and  many  others.  All  Democrats 
and  six  Republicans  voted  against  this  repeal.  Senator  Reed  then  pro- 
posed that  there  be  an  excess-profits  tax  of  20  per  cent  on  the 
bracket  of  profits  between  15  per  cent  and  50  per  cent  and  a  40  per 
cent  tax  on  profits  over  50  per  cent.  This  was  rejected,  42  to  31, 
whereupon  he  proposed  a  tax  of  20  per  cent  upon  profits  in  excess  of 
50  per  cent.  This  was  rejected  42  to  33,  eight  Republicans  voting 
for  it.^  About  the  time  the  American  Legion  was  in  session  at 
Kansas  City,  Senator  Reed  sustained  his  reputation  as  gadfly  of  the 
Senate  by  proposing  to  retain  the  excess-profits  tax  in  order  to  finance 
a  soldiers'  bonus.  This  probably  caused  some  senators  uneasiness 
about  their  records  but  was  rejected,  39  to  28. 

Corporation  tax  rate.  The  rate  of  the  corporation  tax  was  more 
in  doubt  when  Congress  began  revenue  revision  than  that  the  excess- 
profits  tax  would  be  repealed.  Senator  Jones  of  New  Mexico  proposed 
that  instead  of  a  15  per  cent  flat  rate  there  should  be  a  graduated 
tax  on  the  undistributed  profits  of  corporations,  8  per  cent  on  the 
first  10  per  cent  of  net  income  with  rates  gradually  increasing  up  to 
56  per  cent  on  amounts  of  income  over  60  per  cent.  This  was  rejected, 
45  to  24,  four  Middle  Western  Republicans  voting  for  it  and  three 
Democrats  opposing  it.  Then  Senator  Simmons  proposed  that  in 
addition  to  a  flat  tax  of  15  per  cent,  there  should  be  a  graduated  tax 
averaging  about  9  per  cent  on  the  undistributed  profits  of  corporations 
which  he  estimated  would  yield  about  $60,000,000.  Senator  Walsh, 
Democrat  of  Massachusetts,  proposed  a  graduated  tax  of  • 

10  per  cent  on  the  first  $100,000  of  corporate  net  income 
15     "     "      "     "    next    200,000  "  "  "        " 

20     "     "       "    all  over    300,000   "  "  "        " 

This  and  another  somewhat  similar  amendment  were  rejected  by  verv 
close  votes,  33  to  32  in  the  first  case.  Such  a  provision  would  not  have 
required  the  determination  of  invested  capital  which  was  one  of  the 
greatest  difficulties  under  the  act  of  1918.'° 

A  more  or  less  general  sales  tax  was  another  substitute  that  was 
proposed  in  lieu  of  excess-profits  tax  instead  of  increased  corporation 
income  taxes.  This  proposal  had  the  support  of  an  immense  propa- 
ganda in  the  press  of  the  country ;  in  fact,  this  propaganda  appears  to 
have  almost  unlimited  financial  backing.      Secretary  Mellon  in  his  letter 

'■^Commercial  and  Financial  Chronicle,  Oct.  29,  1921,  p.  1837. 
^Commercial  and  Financial  Chronicle,  Nov.  5,  1921,  p.  1937. 


94  Roy  G.  Blakey  [March 

of  April  30,  1921  to  Chairman  Fordney  stated  that  he  was  not 
prepared  to  advocate  a  sales  tax,  but,  shortly  before  the  Finance  Com- 
mittee took  up  the  consideration  of  the  bill.  Senator  Smoot  proposed  a 
manufacturers'  sales  tax  of  3  per  cent.  This  was  not  something  new ; 
in  1918  he  had  proposed  a  one  per  cent  sales  tax  upon  consumption 
goods  which  he  estimated  would  raise  practically  our  entire  revenue. 
In  his  proposal  of  last  August  the  sales  tax  was  not  to  take  a  role 
quite  so  important  and  exclusive  as  in  his  previous  proposal,  but  even 
in  this  case  it  was  to  be  the  largest  of  his  six  sources  of  taxation. 
His  plan,  which  would  so  simplify  our  complex  revenue  laws  that  "any- 
body can  make  out  his  tax  return,"  which  would  "do  away  with  about 
two  thirds  of  the  employees  in  the  revenue  service"  and  thus  result  in 
a  saving  of  perhaps  $25,000,000,  was  as  follows :'" 

Income  taxes   (maximum  rate  32  per  cent) $830,000,000 

10  per  cent  on  net  corporation  profits 445,000,000 

Tobacco   taxes    (present   rates) 225,000,000 

Estate  taxes    150,000,000 

Import  taxes   (tariff)   400,000,000 

Manufacturers'  sales   tax    (3   per  cent) 1,200,000,000 

Collection  of  unpaid  taxes,  salvage,  etc 615,000,000 

$3,895,000,000 

Senator  ]Moses  in  urging  the  adoption  of  the  Smoot  manufacturers' 
sales  tax  said  that  it  would  "strike  down  the  vicious  principle  of 
graduated  taxation  which  appears  in  the  pending  tax  bill,  and  which 
is  but  a  modern  legislative  adaptation  of  the  Communistic  doctrine  of 
Karl  Marx."" 

This  proposal  met  so  much  opposition,  especially  from  the  agricul- 
tural bloc,  that  Senator  Smoot  reduced  the  rate  from  3  per  cent  to 
1  per  cent.  This  was  rejected  November  3  by  a  vote  of  43  to  25,  all 
voting  in  favor  being  Republicans  while  the  opposition  was  made 
up  of  17  Republicans  and  26  Democrats.  The  next  day  Senator 
Smoot's  substitute  of  a  business  sales  tax  of  one  half  of  one  per  cent 
on  gross  sales  exceeding  $6000  a  year  was  rejected  by  a  vote  of  46  to 
25.  This  time  the  Democrats  in  opposition  were  joined  by  22  Repub- 
licans. "According  to  Washington  press  dispatches  this  was  regarded 
as  ending  the  effort  to  include  a  sales  tax  provision  in  the  pending 
revenue  measure."'"  In  what  was  termed  Senator  Smoot's  "final  plea" 
for  the  adoption  of  his  amendment  he  said  that  three  fourths  of  the 
people  of  the  United  States  were  in  favor  of  the  sales  tax.     This  state- 

""Commerclal  and  Financial  Chronicle,  Sept.  3,  1921,  p.  1005;  and  Oct.  8,  1921,  p. 
1529. 

'^Ibid.,  Oct.  22,  1921,  p.  1728. 

"Commercial  and  Financial  Chronicle,  Nov.  5,  1921,  p.  1937. 


1922]  The  Revenue  Act  of  1921  95 

ment  was  challenged  by  Senator  Lenroot  of  Wisconsin  who  declared 
that  the  farmers  and  organized  labor  were  against  it  and  that  the 
manufacturers  would  be  against  it  when  once  they  understood  the 
proposition.  He  forecasted  and  later  Chairman  Fordney  confirmed 
his  statement  that  a  sales  tax  would  be  introduced  during  the  regular 
session  of  Congress  as  a  means  of  financing  a  soldiers'  bonus.^ 

But  those  who  thought  the  sales  tax  was  dead  did  not  know  Senator 
Smoot  very  well.  "At  Monday's  session  of  the  Senate  (November  T) 
which  was  extended  to  the  early  morning  hours  of  the  8th,  Senator 
Smoot  again  brought  up  his  sales  tax  plan,  this  time  offering  his 
original  proposal  calling  for  a  3  per  cent  manufacturers'  levy,  with  a 
10  per  cent  corporation  tax,  a  32  per  cent  maximum  income  tax  and  a 
capital  stock  tax.""  Earlier  he  had  argued  that  since  a  sales  tax  was 
to  be  adopted  in  connection  with  the  soldiers'  bonus,  he  thought  it 
would  be  wise  to  put  it  into  effect  now  in  order  to  determine  the  rate 
that  would  be  necessary  to  yield  the  money  needed.  This  last  pro- 
posal was  rejected  without  a  record  vote. 

Shortly  after  the  rejection  of  this  midnight  proposal  (at  1:35  a.  m. 
November  8)  the  Senate  passed  its  revenue  bill  which  was  then  sent 
to  conference.  In  lieu  of  the  repea.1  of  the  excess-profits  tax  it  agreed 
to  raise  the  corporation  income  tax  from  10  per  cent  to  15  per  cent, 
both  changes  effective  on  income  received  after  Dec.  31,  1921.  In 
the  conference,  however,  the  Senate  managers  receded  and  accepted 
the  House  bill  rate  of  12^  per  cent  though  the  House  conferees  accept- 
ed the  Senate  proposal  to  withdraw  the  specific  exemption  of  $2000 
in  case  of  corporations  having  net  incomes  in  excess  of  $25,000. 
Senator  Jones  in  criticizing  this  action  said  that  there  was  no  reason 
why  the  wealthy  could  not  now  incorporate  and  never  pay  more  than 
a  12^2  per  cent  tax,  though  in  introducing  the  bill  Senator  Penrose 
made  a  special  point  in  his  report  that  it  provided  that,  if  any  corpo- 
ration is  formed  or  availed  of  for  the  purpose  of  evading  the  surtax 
upon  its  stockholders  by  permitting  profits  to  accumulate  instead  of 
being  distributed,  the  stockholders  shall  be  taxed  in  the  same  manner 
as  partners.^  The  administration  of  such  a  provision  is  obviously 
very  uncertain  and  difficult. 

Though  the  new  law  follows  the  old  law  substantially  in  most  other 
matters  relating  to  corporations,  there  are  a  few  other  changes  and 
proposed  changes  that  will  be  mentioned. 

Foreign  traders.  The  Senate  Finance  Committee  retained  the  pro- 
posal of  the  House  bill  to  tax  American  "foreign  traders"  and  "foreign 

^Uhid.,  Nov.  5,  1921,  p.  1937. 
^*Ihkl..  Nov.  12,  1921,  p.  2037. 
^See  Senate  Report,  no.  275,  67  Cong.,  1  Sess.,  p.  16. 


96  Roy  G.  Blakey  [March 

trade  corporations"  only  on  income  derived  from  sources  within  the 
United  States.  Both  the  Ways  and  Means  Committee  and  the  Finance 
Committee  explained  in  their  reports  that  the  income  of  such  traders 
was  taxed  both  at  home  and  abroad  and  that  this  resulted  not  only  in 
unjust  double  taxation  but  also  in  inability  to  compete  with  foreign 
traders  of  other  countries  in  China  and  elsewhere.  This  proposal 
provoked  a  contest  on  the  floor  of  the  Senate.  Senator  Simmons 
claimed  that  the  suggestion  came  from  sources  "profoundly  interested 
in  advancing  the  interests  of  consolidated,  coordinated,  combined  and 

predatory  wealth and  it  would  have  been  nothing  more  or 

less  than  a  present  out  of  the  Treasury  of  the  United  States  to  that 
class  of  great,  powerful  people  who  control  our  foreign  commerce,  sell 
our  exports  abroad,  and  buy  our  imports  abroad,  to  say  nothing  of 
the  great  international  banks  of  the  country,  of  something  near 
$300,000,000."'*  The  provision  was  defeated  by  a  narrow  majority 
of  the  Senate  but  when  it  got  to  conference  the  Senate's  action  would 
have  been  overturned,  according  to  Senator  Simmons,  had  not  he  and 
Senator  La  Follette  made  a  strenuous  fight  to  prevent  "the  slaughter 
which  had  been  prepared  for  it."" 

Life  insurance  companies.  The  new  law  modifies  the  provisions  of 
the  former  law  with  reference  to  taxes  on  life  insurance  companies. 
There  has  been  much  litigation  under  the  previous  law  and  it  is  claimed 
that  the  taxes  which  these  companies  paid  are  inadequate.  The  new 
law  provides  that  for  1921  and  thereafter  they  shall  be  taxed  upon 
their  investment  income  from  interest,  dividends,  and  rents  much  the 
same  as  are  other  corporations  upon  their  net  income  received  after 
December  31,  1921,  except  that  the  life  insurance  companies  are 
relieved  of  the  capital  stock  tax. 

Partnerships  and  personal  service  corporations.  As  in  previous 
laws,  partnerships  are  not  taxed  as  corporations  but  each  of  the  part- 
ners is  taxed  under  the  individual  income  tax  sections  of  the  law.  Per- 
sonal service  corporations,  that  is,  those  whose  income  is  derived  chiefly 
from  the  services  of  the  chief  stockholders,  or  where  the  income  derived 
from  invested  capital  is  not  a  material  part  of  the  total,  were,  under 
the  previous  law,  treated  as  partnerships  instead  of  being  taxed  as 
corporations.  The  new  law  continues  this  arrangement  for  income 
received  prior  to  January  1,  1922,  after  which  these  corporations 
are  to  be  taxed  like  other  corporations.  If,  however,  partnerships 
or  individuals  in  business  prefer  to  be  taxed  as  corporations  for  1921 

'^"Cong.  Record,  Nov.  23,  1921,  pp.  8994,  8995. 
^'Cong.  Record,  Nov.  23,  1921,  pp.  8994,  8995. 

^'Ilouse  Report,  no.  860,  67  Cong.,  1  Sess.,  p.  14,  and  Revenue  act  of  1921, 
sec.  242ff. 


1922]  The  Revenue  Act  of  1921  97 

and  succeeding  calendar  years  rather  than  as  individuals,  they  may 
be  so  taxed,  provided  they  incorporate  within  four  months  after  the 
passage  of  the  act,  that  is,  prior  to  March  23,  1922;  provided 
further,  that  the  taxable  net  income  for  1921  was  not  less  than  20 
per  cent  of  the  invested  capital ;  and,  provided  further,  that  the 
capital  stock  tax  of  $1  per  $1000  of  invested  capital  is  also  paid.  This 
provision  removes  one  of  the  weightiest  criticisms  of  the  act  of  1918 
because  under  that  act  the  amount  of  the  tax  payable  often  depended 
very  much  upon  the  form  of  the  organization  as  well  as  upon  the 
amount  of  profits.  Secretary  Houston  in  his  letter  of  March  17, 
1920,  to  Chairman  Fordney  of  the  Ways  and  Means  Committee, 
mentioned  as  one  illustration  of  the  necessity  of  revision  of  the  act 
of  1918  a  well-known  partnership  which  paid  in  1918  nearly  $1,125,000 
more  taxes  than  it  would  have  paid  had  the  business  been  organized 
as  a  corporation.  On  the  other  hand  corporations  have  frequently 
paid  more  than  if  they  had  been  organized  as  partnerships.^' 

Publicity  of  returns.  One  contest  that  developed  some  heat  was 
over  the  publicity  of  returns.  All  previous  income  tax  laws  from 
1913  on  have  provided  that  returns  shall  be  open  to  inspection  only 
upon  the  order  of  the  President,  though  provision  was  made  for  the 
officers  of  states  having  a  state  income  tax  to  inspect  corporation 
returns  and  for  stockholders  to  examine  annual  income  returns  of  the 
corporations  in  which  they,  as  stockholders  of  record,  own  1  per  cent 
or  more  of  the  outstanding  capital  stock.  Senator  La  Follette  made 
at  least  two  attempts  to  make  returns  open  to  public  inspection  and 
the  vote  in  one  case  was  rather  close,  35  to  33.  Senator  Reed  pro- 
posed that  returns  should  be  open  "at  the  request  of  either  House  of 
Congress."  The  Senate  adopted  this  amendment  but  it  was  struck 
out  in  conference.  Few  acts  of  the  conferees  were  subject  to  more 
scathing  criticism  than  was  this." 

Title  IV — Estate  tax.  The  rates  of  the  federal  estate  tax  are  not 
changed  by  the  act  of  1921,  despite  a  spirited  contest  in  the  Senate 
which  led  to  a  night  session  and  the  doubling  of  the  maximum  rates  on 
the  larger  estates  by  a  Senate  vote  of  44  to  15.  It  will  be  recalled 
that  the  act  of  1918  exempts  the  first  $50,000  in  order  to  arrive  at  the 
taxable  "net  estate"  and  then  begins  with  a  tax  of  1  per  cent  on  the 
next  $50,000.  The  rate  increases  until  it  reaches  25  per  cent  on 
the  part  of  a  taxable  "net   estate"  in  excess   of  $10,000,000.     The 

^'See  Annual  Report  of  the  Secretary  of  the  Treasury  for  1920,  p.  32. 
*^Cong.  Record,  Nov.  22,  1921,  pp.  8996  and  8997,  and  Nov.  23,  1921,  p.  90-59. 


98  Roy  G.  Blakey  [March 

Senate  bill  did  not  change  these  rates  except  those  on  "net  estates" 

in  excess  of  $15,000,000,  as  follows : 

"Net  estates"  Rate  of 

(in  millions  tax  proposed. 

of  dollars)  Per  cent 

15—25  30 

25—50  35 

50—100  40 

100— more  50 

The  Senate  also  adopted  by  a  vote  of  31  to  35  an  amendment  of 
Senator  Walsh  of  Massachusetts  to  tax  gifts  at  the  same  rates  at 
which  "net  estates"  are  taxed  under  both  1918  and  1921  acts,  except 
that  no  deduction  of  $50,000  was  allowed  and  the  one  per  cent  tax 
began  on  gifts  in  excess  of  $20,000.  A  new  schedule  of  estate  tax 
rates  reaching  a  maximum  of  50  per  cent  on  estates  in  excess  of 
$30,000,000  was  proposed  by  Senator  La  Follette.  This  was  rejected, 
as  were  his  and  Senator  Kenyon's  proposals  to  tax  at  10  per  cent  and 
15  per  cent  respectively  the  transfer  of  certain  tax-exempt  securities 
forming  parts  of  estates.  Senator  Kenyon  proposed  that  his  amend- 
ment apply  only  to  securities  issued  six  months  after  the  passage  of 
the  act  and  it  was  barely  rejected,  the  vote  being  a  tie,  32  to  32. 
Senator  Penrose  reported  that  the  Senate  conferees  yielded  "to  the 
persuasive  arguments  and  persistent  demands  of  the  House  conferees" 
on  the  Senate  amendments,  both  as  regards  the  higher  rates  on  estates 
and  also  as  regards  any  tax  on  gifts.  He  stated  that  the  proposed 
increased  rates  would  not  bring  an}^  additional  revenue  before  the 
fiscal  year  1924,  that  they  would  cause  the  distribution  of  estates 
before  death  in  order  to  escape  the  tax  and,  furthermore,  that  some 
states  already  have  inheritance  taxes  exceeding  25  per  cent.  The 
rejection  of  the  higher  estate  taxes  by  the  conferees  was  then  given 
as  a  reason  for  the  rejection  of  the  tax  on  gifts.  These  concessions 
on  the  part  of  the  Senate  conferees  were  attacked  as  inconsistent  and 
as  a  surrender  to  wealth  by  Senator  Jones  of  New  Mexico  and  others.*^ 
Neither  the  House  nor  Senate  changed  these  or  any  other  provisions 
agreed  to  by  the  conference. 

A  new  administrative  provision  of  this  title  permits  an  executor  or 
administrator  to  file  application  for  discharge  from  personal  liability 
for  any  estate  tax  not  assessed  within  one  year  after  the  filing  of  the 
application,  but  such  discharge  does  not  release  the  estate  from  the 
lien  of  any  tax.  Under  the  previous  law  executors  have  been  held 
personally  liable  for  estate  taxes  assessed  long  after  the  closing  of 

*^ Commercial  4"  Financial  Chronicle,  Nov.  5,  1921,  p.  1937;  Nov.  12,  p.  2037; 
Cong.  Record,  Nov.  22  and  23,  pp.  8992  and  9072. 


ki 


1922]  The  Revenue  Act  of  1921  99 

estates.*^  An  attempt  has  been  made  in  the  new  law  also  to  prevent 
discrimination  in  taxing  the  estates  of  missionaries  merely  because 
they  reside  in  foreign  countries. 

Title  V — Tax  on  telegraph  and  telephone  messages.  {Transporta- 
tion tax  omitted.)  The  most  significant  change  in  this  title  is  the 
omission  of  the  tax  on  transportation.  It  will  be  recalled  that  under 
the  Revenue  act  of  1918  amounts  paid  for  freight  were  taxed  3  per 
cent,  amounts  paid  for  express  shipments  1  cent  for  each  20  cents  or 
fraction  thereof,  amounts  paid  for  passenger  and  Pullman  tickets 
8  per  cent,  and  amounts  paid  for  transportation  of  oil  by  pipe  line 
also  8  per  cent. 

It  has  been  noted  above  that  Secretary  Mellon  at  first  opposed  the 
removal  of  the  tax  on  transportation  unless  Congress  could  find  a 
suitable  substitute  because  he  said  it  yielded  about  $330,000,000  a  year 
in  revenue.  The  Administration  later  seemed  inclined  to  do  all  it 
could  for  the  railroads  on  the  theory  that  the  revival  of  their  finances 
and  facilities  was  the  key  to  general  economic  improvement.  Conse- 
quently, after  the  conference  of  Administration  leaders  on  August  9, 
Secretary  Mellon  advocated  repeal  of  half  the  transportation  taxes 
January  1,  1922,  and  the  other  half  a  year  later.  The  Senate  accepted 
this  recommendation  but  the  conferees  accepted  the  House  provision 
to  repeal  transportation  taxes,  effective  January  1,  1922.  Mr. 
Fordney  estimated  that  this  action  would  cause  a  loss  in  revenue 
of  .$262,000,000. 

This  title  retains  the  tax  &f  o  cents  upon  telephone,  telegraph,  cable 
and  radio  messages  upon  which  the  charge  is  15  to  50  cents  and  10 
cents  where  the  charge  is  greater,  as  well  as  the  tax  of  10  per  cent 
on  the  amounts  paid  for  leased  wires  but  it  omits  the  provisions  relative 
to  the  taxes  on  insurance. 

Title  VI — Tax  on  beverages.  This  title  has  to  do  not  onlv  with 
soft  drinks  but  also  with  alcoholic  liquors  diverted  to  beverage  pur- 
poses or  for  use  in  manufacture.  In  order  to  aid  in  the  enforcement 
of  the  law  the  Treasury  Department  suggested  and  the  Senate  bill 
provided  for  doubling  the  tax  on  liquors  diverted  to  unlawful  purposes. 
It  also  provided  for  the  concentration  of  liquors  in  fewer  government 
warehouses.  Senator  Willis,  Republican  of  Ohio,  charged  that,  in 
the  bill  as  adopted  by  the  conferees  and  as  later  enacted  into  law, 
the  "conferees  have  agreed  absolutely  to  wipe  out  the  amendments 
that  were  written  by  the  Senate  and  to  adopt  the  House  provision." 
Senator  Smoot  explained  that  the  Senate  conferees  were  forced  to 
accede  to  the  House  conferees  because  the  latter  "did  not  want  to  tax 
whiskev  sold  by  a  drug  store  as  a  beverage,  because  they  designated  it 

"House  Report  no.  350,  67  Cong.,  1  Sess.,  p.  15. 


100  J^oy  G.  Blakey  [March 

as  medicine.""  As  the  law  stands,  it  provides  for  a  tax  of  $2.20  per 
gallon  upon  spirits  in  bond  or  upon  those  produced  in  or  imported  into 
the  United  States,  and  $4.20  additional  if  diverted  to  beverage  pur- 
poses or  for  use  in  manufacture. 

Light  manufacturers'  taxes  are  imposed  upon  sirups  and  carbonated 
gas  used  in  the  production  of  soda  fountain  drinks  and  similar  prep- 
arations in  lieu  of  the  so-called  "nuisance  taxes"  levied  by  the  former 
law  upon  soda  fountain  drinks,  ice  cream,  sundaes,  etc.  The  old 
taxes  were  difficult  to  administer  and  it  was  estimated  that  dealers 
held  back  from  the  government  30  per  cent  of  the  amounts  due. 
Chairman  Fordney  estimated  that  the  change  in  the  House  bill  meant 
a  yearly  loss  of  $24,000,000,  but  he  counted  on  $10,000,000  from  a 
license  tax  of  $10  on  each  seller  of  soft  drinks,  a  provision  eliminated 
by  the  Senate. 

Title  VII — Taxes  on  cigars,  tobacco,  and  manufactures  thereof. 
This  title  of  the  old  law  is  reenacted  substantially  without  change. 

Title  VIII — Tax  on  admissions  and  dues,  is  also  substantially  a 
reenactment  of  the  corresponding  title  in  the  former  law  except  that 
under  the  new  law  the  exemption  from  the  tax  is  extended  to  a  larger 
class  of  benefit  performances  and,  furthermore,  no  tax  is  collected  from 
persons  admitted  free  and  those  admitted  at  reduced  rates  are  taxed 
on  the  basis  of  the  amount  paid. 

Title  IX — Excise  taxes.  The  new  law  takes  the  tax  off  of  some 
sporting  goods,  chewing  gum,  cosmetics,  proprietary  medicines  and 
some  other  goods ;  reduces  the  tax  on  candy  from  5  to  3  cents  per 
pound  and  in  general  cuts  the  tax  from  10  per  cent  to  5  per  cent  on 
the  excess  price  of  expensive  carpets,  clothing,  lighting  fixtures,  etc., 
besides  eliminating  some  articles  and  changing  the  basis  for  others. 
The  most  renumerative  taxes,  are  retained,  namely,  those  on  automo- 
biles, motorcycles,  tires,  and  accessories.  Many  inconsistencies  appear 
in  this  title,  for  example,  why  should  candy  be  taxed  and  chewing  gum 
be  exempted,  or  cameras  be  taxed  and  billiard  balls  be  exempted,  or 
automatic  slot-device  vending  machines  be  taxed  5  per  cent  while 
automatic  slot-device  weighing  machines  are  taxed  10  per  cent.  Pro- 
fessor Adams  and  Senator  Smoot  have  pointed  out  not  only  these  but 
other  inconsistencies.  In  a  title  which  deals  with  such  a  miscellany  as 
does  this,  only  typical  cases  can  be  mentioned  here. 

Title  X — Special  taxes  07i  miscellaneous  occupations,  tobacco  manu- 
facturers,  narcotics,  etc.,  has  not  been  greatly  ciianged.     The   first 
section  of  this  title  provides  for  the  same  capital  stock  tax  as  that 
in  the  former  law,  namely,  $1  for  each  $1000  of  the  fair  average  value 
'^Cong.  Record,  Nov.  23,  1921,  pp.  9067  and  9068. 


1922]  The  Revenue  Act  of  1921  101 

of  capital  stock  in  excess  of  $5000,  The  Ways  and  Means  Committee 
proposed  a  limitation  of  fifteen  months  for  the  assessment  of  this  tax, 
and  the  Finance  Committee  proposed  to  eliminate  it  entirely,  but  the 
Senate  restored  it  after  a  contest  and  it  was  retained  by  the  con- 
ference. 

Title  XI — Stamp  taxes,  and  Title  XII — Tax  on  employment  of 
child  labor,**  are  substantially  reenactments  of  corresponding  titles. 

Title  XIII — General  administrative  provisions.  At  least  one 
change  of  much  importance  is  provided  for  under  this  title. 

Final  determination.  One  of  the  most  serious  indictments  against 
the  excess-profits  tax  of  1918,  though  not  the  one  commonly  empha- 
sized, is  the  clogging  of  the  administration  of  all  income  and  profits 
taxes  because  of  the  difficulty  of  determining  invested  capital  upon 
which  these  taxes  depend.  The  Bureau  of  Internal  Revenue  has  had 
its  burdens  increased  enormously  by  tax  laws  of  recent  years,  and,  in 
spite  of  the  great  expansion  of  its  staff,  it  has  not  been  able  to  keep 
up  with  its  work.  Part  of  this  is  due  to  the  fact  that  it  has  a  rapid 
turnover  of  personnel  because  many  of  those  whom  it  has  trained  have 
resigned  for  much  more  lucrative  positions  in  private  practice.  Fur- 
thermore, whenever  a  court  decision  or  a  ruling  of  the  Commissioner 
reversed  some  former  ruling,  thousands  of  cases  that  were  supposed  to 
have  been  settled  were  reopened  and  the  process  of  settlements  was  then 
begun  all  over  again.  As  a  result  no  one  has  known  when  any  assess- 
ment was  finally  settled  and  the  Bureau  has  fallen  almost  hopelessly 
behind  with  its  work.  The  new  law  makes  provision  for  the  final  deter- 
mination of  tax  cases  by  agreement  between  the  taxpayer  and  the 
Commissioner  so  that  they  will  not  be  reopened  by  later  rulings 
except  upon  showing  of  fraud,  malfeasance  or  misrepresentation  ma- 
terially affecting  the  case.  This  change  may  work  some  injustice  but 
doubtless  it  will  lessen  much  injustice,  also.  That  it  is  really  one  of 
the  major  changes  brought  about  by  the  new  law  may  be  indicated  by 
the  accompanying  tables  which  show  how  far  the  Bureau  of  Internal 
Revenue  got  behind  with  the  administration  of  the  taxes. 

**The  question  of  the  constitutionality  of  this  title  of  the  former  law  is  now  before 
the  Supreme  Court. 


102 


Roy  G.  Blakey 


[March 


Statement  of  Condition  of  Work,  Income- Tax  Unit^  Aug.  31,  1921.^ 


Total 

returns 

filed 

or  to  be 

handled 

Total  returns  audited 

Balance  to 

be  audited 

Number 

Per  cent 

Number 

Per  cent 

Personal  ■} 
1917 
1918 
1919 
1920 

830,000 
660,000 
850,000 
890,000 

827,702 

627,227 

285,953 

168 

99.7 
95.0 
34.0 

2,298 

32,773 

564,047 

889,832 

0.3 

5.0 

66.0 

100.0 

Total 

Corporation : 

1917 
1918 
1919 
1920 

3,230,000 

323,138 
368,290 
368,222 
349,500 

1,741,050 

305,417 
278,323 
133,351 
...  2,734 

54.0 

94.5 

75.6 

36.2 

.8 

1,488,950 

17,721 

89,967 

234,971 

346,766 

46.0 

5.5 

24.4 
63.8 
99.2 

Total 

1,409,250 

719,825 

51.1 

689,425 

48.9 

-The  personal  returns  do  not  include  the  smaller  returns  which  are  handled  largely 
in  the  collectors'  offices.  Many  of  the  returns  shown  as  "to  be  audited"  were  in 
various  stages  of  progress. 


Claims  Pending,  Oct.  21,  1921.^ 


Number 

Amount 

Abatement  of  taxes  assessed  but  not  paid 

Credit  claimed  on  account  of  alleged  previous  over- 
payments  

Refund  of  taxes  paid 

27,519 

26,146 
79,612 

$615,181,744 

148,097,506 
253,689,606 

Total 

163,277 

1,006,968,856 

^Annual  Report  of  the  Secretary  of  the  Treasury  for  1921,  pp.  27,  28. 

Tax  SimpUfication  Board.  This  title  provides  also  for  a  Tax 
Simplification  Board  to  consist  of  three  members  to  represent  the 
public  and  to  be  appointed  by  the  President  and  three  officers  or 
employees  of  the  Bureau  of  Internal  Revenue.  They  are  to  investigate 
the  procedure  of,  and  the  forms  used  by,  the  Bureau  and  make  recom- 
mendations for  simplification.  The  members  of  the  board  are  to 
serve  without  pa^^  and  the  board  is  to  cease  to  exist  December  31,  1924. 

Unnecessary  investigations.  One  section  of  this  title  attempts  to 
meet  the  complaints  of  taxpayers  relative  to  unnecessarily  frequent 
examinations  and  investigations  by  revenue  agents  by  prohibiting  more 
than  one  inspection  of  the  taxpayer's  books  a  year,  except  by  special 
written  order  of  the  Commissioner  of  Internal  Revenue. 


1922]  The  Revenue  Act  of  1921  103 

Mention  has  been  made  elsewhere  of  other  administrative  changes, 
for  example,  of  those  relative  to  the  consolidation  of  Liberty  bond  tax 
exemptions,  the  requirement  of  returns  from  all  having  gross  incomes 
of  $5000  or  over,  regardless  of  the  amount  of  net  income,  and  the 
relief  from  personal  liability  granted  executors  of  estates  under  certain 
conditions. 

Title  XV — General  provisions,  contains  a  miscellany  of  sections 
technically  repealing  the  titles  of  the  former  law,  increasing  the  Victory 
note  authorization  from  $7,000,000,000  to  $7,500,000,000  as  an 
aggregate  that  may  be  outstanding  at  any  one  time,  and  increasing  the 
Treasury  Savings  Certificate  limit  so  that  an  individual  may  pur- 
chase $5,000  instead  of  only  $1,000  of  such  securities  in  a  year.  The 
new  issues  of  these  securities  bear  about  ^I'o  per  cent  interest  and  are 
exempt  from  taxation,  hence,  persons  with  large  incomes  are  not 
permitted  to  buy  them  in  unlimited  amounts. 

Comments  and  Conclusions 

Except  as  noted  in  the  opening  paragraph  of  this  article,  the 
Revenue  act  of  1921  does  not  change  greatly  the  Revenue  act  of  1918. 
It  is  a  distinct  disappointment  to  the  chiefs  of  the  party  which  controls 
overwhelmingly  both  houses  of  Congress,  as  well  as  the  other  branches 
of  the  federal  government,  especially  in  that  it  does  not  lower  substan- 
tially the  high  surtax  rates  upon  individual  incomes.  This  is  due  to  the 
influence  exerted  by  agricultural  and  labor  interests  upon  a  sufficient 
number  of  Republican  senators  to  force  compromises  upon  the  leaders, 
though  the  latter  succeeded  in  nullifying  several  such  compromises  in 
the  joint  conference  of  Senate  and  House  representatives.  The  leaders 
were  successful,  however,  in  repealing  the  much  abominated  excess- 
profits  tax,  in  reducing  the  tax  on  capital  gains  of  those  having  net 
incomes  in  excess  of  $31,000,  in  providing  for  offsetting  net  losses 
of  one  year  against  net  gains  of  following  ^^cars,  in  providing  for  the 
final  settlement  of  tax  cases,  and  in  making  numerous  other  changes 
of  more  or  less  significance. 

Though  income  and  profits  taxes  will  not  hereafter  hold  the  same 
relative  importance  among  federal  revenues  that  they  have  held  during 
the  past  few  years,  they  still  remain  the  mainstay  of  the  system.  The 
tariff  has  been  raised,  it  is  true,  but  there  is  no  prospect  that  con- 
sumption taxes  will  again  form  practically  the  entire  source  of  federal 
receipts  as  they  did  prior  to  1913.  The  sixteenth  amendment  is  only 
one  reason  for  this ;  another  very  important  one  is  that  the  needs  of 
the  government  are  now  so  much  greater  than  they  were  before  the 
war  that  such  revenues  are  entirely  inadequate  unless  we  shall  adopt 


104  Boy  G.  Blakey  [March 

some  general  sales  tax  such  as  one  of  the  proposals  of  Senator  Smoot. 
Many  business  interests  apparently  favor  such  taxes  and  sometimes 
the  propaganda  for  them  seems  about  as  strong  as  that  for  the  repeal 
of  the  excess-profits  tax,  but  the  opposition  from  the  laboring  classes 
and  the  farmers  will  probably  be  more  active  and  effective  in  this  case 
than  it  was  for  the  retention  of  the  profits  tax.  It  is  possible,  how- 
ever, that  the  soldiers'  bonus  can  be  used  to  overcome  this  opposition, 
in  fact,  there  is  no  telling  in  what  various  ways,  and  for  how  many 
purposes,  the  proposed  bonus  is  to  be  used  as  stalking  horse.  Beer, 
as  well  as  a  sales  tax,  has  already  been  proposed. 

Despite  the  fact  that  few  changes  have  been  made  in  the  new  revenue 
law,  some  of  them  are  notable  improvements.  That  providing  for 
final  settlement  of  tax  cases  by  agreement  between  the  taxpayer  and  the 
Commissioner  has  been  recommended  by  the  Treasury  Department  for 
several  years  and  will  do  much  to  unclog  the  administrative  machinery. 
Very  important,  also,  and  eminently  just  is  the  allowing  of  net  losses 
of  one  year  to  be  offset  against  net  income  of  future  years.  These  two 
changes  and  the  limitation  of  the  tax  on  capital  gain  to  12^  per  cent 
in  certain  cases  will  do  much  to  unburden  business  and  to  remove 
the  serious  check  upon  transfers  of  property.  The  allowing  of  6  per 
cent  interest  upon  overpayments  of  taxes  in  the  hands  of  the  govern- 
ment during  settlement  of  claims  and  the  arrangement  for  determining 
loss  or  gain  in  involuntary  cases  of  exchange  of  property  are  much 
more  fair  to  the  taxpayer  than  were  the  former  practices.  The  new 
law  does  not,  however,  go  nearly  so  far  as  the  British  act  of  August 
1921  which  provides  for  refunding  taxes  on  paper  excess  profits  that 
later  proved  to  be  in  excess  of  real  profits  when  goods  were  sold 
at  much  below  former  inventory  prices,  upon  which  profits  of  earlier 
years  had  been  based.  The  provision  for  the  relief  of  executors  and 
administrators  from  personal  liability  for  the  tax  after  due  notice  is 
reasonable.  The  requirement  of  returns  from  all  having  gross  incomes 
of  $5000  or  over,  regardless  of  amount  of  net  income,  ought  to  prevent 
some  evasion  and  the  Simplification  Board  should  be  able  to  suggest 
some  improvements  in  administration.  Numerous  cases  formerly  left 
to  the  rulings  of  the  Commissioner  of  Internal  Revenue  are  specifically 
provided  for  in  the  new  statute  so  that  this,  with  the  repeal  of  the 
excess-profits  tax  which  occasioned  a  large  part  of  the  "Commissioner- 
made  law,"  will  narrow  the  scope  of  that  official's  rulings  somewhat 
but  still  leave  it  relatively  large. 

The  increased  personal  exemptions  for  heads  of  families  and  de- 
pendents will  be  welcome  to  all  taxpayers,  especially  the  smaller  ones, 

"What  possibilities  this  suggests  for  a  slogan  in  the  fall  elections  this  year,  for 
example,  "Bonus,  beer  and  sales  taxes !" 


1922]  The  Revenue  Act  of  1921  105 

and  are  probably  not  without  political  significance.  The  exemption 
of  $300  in  dividends  and  interest  from  building  and  loan  associations 
is  of  doubtful  propriety  though  not  very  important.  The  failure  to 
tax  large  gifts  as  much  as  inheritances,  as  provided  by  the  Senate  bill 
but  struck  out  in  conference,  leaves  a  large  opportunity  for  the  evasion 
of  the  estate  tax,  an  opportunity  which  is  great  in  any  case.  The 
similar  fate  of  the  Treasury's  proposal  with  reference  to  increased 
taxes  on  liquors  withdrawn  from  warehouses  for  unlawful  purposes  is 
a  sad  comment  not  only  upon  the  violators  but  also  upon  the  makers 
of  the  law. 

One  very  noteworthy  feature  in  the  preparation  and  enactment  of 
the  new  law  was  the  almost  constant  consultation  by  the  Treasury  and 
also  by  the  revenue  committees  with  a  well-known  and  able  authorit}' 
on  taxation,  Professor  T.  S.  Adams,  who  had  served  in  a  similar 
capacity  during  the  preceding  administration.  Another  fact,  not  so 
complimentary  to  those  responsible  for  procedure,  was  that  the  ma- 
jority of  the  Ways  and  Means  Committee  excluded  all  m.embers  of  the 
minority  party  from  its  sessions  while  framing  the  bill,  entirely  con- 
trary to  the  procedure  of  the  same  committee  under  the  control  of 
the  other  party  during  the  previous  administration.  Another  practice 
exhibited,  not  new  but  none  the  less  reprehensible,  was  that  of  nullifying 
in  the  conference  committee,  whose  sessions  are  more  or  less  secret 
and  without  record,  the  will  of  the  majority  which  the  conferees  are 
supposed  to  represent.  It  was  charged  and  it  appears  that  in  one 
instance  after  another  the  majority  members  of  the  Senate  conferees 
reversed  the  action  of  the  Senate,  not  because  they  were  hard  pressed 
by  the  House  conferees,  but  because  they  were  not  in  sympathy  with 
the  modifications  which  the  agricultural  bloc  had  forced  upon  them. 
It  appears  that  in  the  case  of  the  surtax  rates  they  were  prevented 
from  thus  receding  only  by  virtue  of  the  fact  that  the  House  reversed 
its  own  vote  and  instructed  its  representatives  to  accept  the  Senate 
amendment. 

The  real  contests  in  the  recent  tax  revision  were  over  the  taxes  upon 
wealth,  including  taxes  upon  corporations.  If  government  expendi- 
tures could  be  reduced  to  a  pre-war  basis  of  three  quarters  of  a  billion 
dollars  a  year,  excluding  postal  expenditures  balanced  by  postal  re- 
ceipts, revenue  revision  would  be  a  comparatively  delightful  task.  But 
despite  reductions  which  have  been  made  and  further  ones  which  will  be 
made,  notably  in  connection  with  War  and  Navy  Departments,  the 
Shipping  Board,  and  federal  control  of  transportation,  our  expendi- 
tures will  probably  be  several  billions  annually  for  some  time  to 
come.  The  interest  on  our  war  debt  alone  is  nearly  a  billion  dollars, 
or  greater  than  the  total  net  expenditure  before  the  war,  and  there  is 


106  Roy  G.  Blakey  [March 

no  present  prospect  of  repa^mient  of  the  European  debt,  even  if 
that  were  desirable.  No  one  knows  how  much  more  the  United  States 
government  is  going  to  be  called  on  to  aid  the  railroads  and  the 
farmers  of  the  country,  not  to  mention  European  peoples  or  nations 
and  others  who  may  need  help.  In  any  case,  it  appears  that  large 
revenues  will  probably  be  necessary  for  some  years  and  taxes  will  con- 
sequently be  what  we  call  heavy,  though  really  very  light  as  compared 
with  those  in  European  countries.  Furthermore,  the  economic  de- 
pression reduces  the  yields  of  taxes,  especially  income,  profits,  and 
luxury  taxes,  without  any  reduction  of  rates.  As  a  result,  the  repeal 
of  taxes  cannot  go  very  far  without  the  necessity  of  substituting  other 
taxes  to  meet  requirements.  The  rub  comes  when  it  is  suggested  that 
anybody  pay  higher  taxes  in  these  troublous  times. 

Whether  the  excess-profits  tax  should  have  been  repealed  or  revised 
is  a  debatable  question,  though  the  weight  of  authority  was  on  the 
side  of  repeal.  There  is  no  doubt  that,  as  in  force  under  the  law  of 
1918,  it  was  inequitable  as  between  under-capitalized  and  over-capi- 
talized corporations,  also,  as  between  corporations  and  partnerships 
or  individual  businesses  in  some  cases.  It  also  caused  extravagance, 
especially  in  connection  with  high  surtaxes  in  cases  of  distribution  of 
income,  and  made  the  law  difficult  of  administration,  because  of  the 
complexities  of  determining  invested  capital  and  a  proper  assessment. 
The  tax  is  correct  in  principle,  however,  and  the  amendments  of  the 
new  law  regarding  final  determination  of  tax,  the  offsetting  of  losses 
of  one  year  against  gains  of  succeeding  years,  the  permissions  of  part- 
nerships to  incorporate  in  order  to  reduce  their  taxes  and  other 
provisions  go  a  long  way  toward  removing  the  grounds  for  some 
criticisms  against  it.  Other  defects  could  be  eliminated  and  the  ex- 
perience and  records  accumvilated  in  the  past  few  years  ought  to  make 
its  administration  progressively  more  satisfactory  and  equitable.  The 
writer  is  in  some  doubt  as  to  how  much  weight  should  be  given  to  what 
are  admitted  to  be  grave  administrative  reasons  for  its  repeal.  The 
experience  and  arguments  of  Professor  Adams  and  others  are  worthy 
of  much  consideration  but  the  propaganda  for  repeal  has  been  so 
widespread,  so  prolonged  and  apparently  so  well-financed  and  inter- 
ested, that  disinterested  advocates  of  repeal  must  have  been  really 
embarrassed  by  the  support  which  their  views  have  received.  Much 
the  same  might  be  said  with  reference  to  the  propaganda  for  a  sales 
tax  and  for  reduction  of  the  surtax.  It  is  worthy  of  note  that  the 
propaganda  against  the  excess-profits  tax  enlisted  the  support  of  the 
great  majority  of  smaller,  as  well  as  of  larger,  corporations  and 
businesses,  although  the  partial  substitute  for  it,  the  increase  in  the 
corporation  income  tax,  results  in  heavier  taxes  upon  practically  all 


1922]  The  Revenue  Act  of  19^1  107 

corporations  making  less  than  10  per  cent.  In  times  like  these,  it  is 
probable  that  many  corporations  will  net  less  than  this,  though  per- 
haps some  of  them  would  rather  pay  heavier  taxes  now  than  take  the 
risk  of  excess-profits  taxes  in  more  prosperous  years. 

In  his  annual  report  for  1921,  published  after  the  passage  of  the 
revenue  law,  Secretary  Mellon  argues  at  unusual  length  against  high 
surtaxes  and  estate  taxes.  The  arguments  are  the  usual  ones.  By 
being  high  these  taxes  defeat  themselves  as  producers  of  revenue  and, 
furthermore,  they  militate  against  saving,  hinder  business  and  in  the 
long  run  hurt  the  masses  even  more  than  the  wealthy.  It  is  stated,  for 
instance,  that  such  taxes  increase  the  rents  of  the  poor  as  well  as  of 
everybody  else,  because  mortgage  loans  are  not  tax-exempt  and  con- 
sequently funds  for  building  are  not    available  in  sufficient  quantities. 

Secretary  Mellon  estimates  that  there  are  $10,000,000,000  of  tax- 
exempt  securities  in  the  United  States  into  which  the  well-to-do  may 
invest  rather  than  pay  the  higher  surtaxes.  Others  have  made  much 
higher  estimates.  It  is  evident  that  no  one  paying  73  per  cent  or  even 
58  per  cent  upon  the  upper  bracket  of  his  income  will  invest  in  6  per 
cent  or  even  10  per  cent  taxable  railroad  or  industrial  securities  so 
long  as  5  per  cent  state  and  municipal  tax-exempt  bonds  may  be 
bought  at  par  or  thereabouts.  He  suggests  a  constitutional  amend- 
ment, but  it  will  probably  be  some  time  before  three  fourths  of  the 
state  legislatures  can  be  prevailed  upon  to  ratify  a  federal  provision 
that  would  weaken  so  materially  the  credit  of  themselves  and  of  their 
various  municipalities.  The  present  writer  is  not  entirely  certain 
that  the  Supreme  Court  would  now  hold,  since  the  adoption  of  the 
sixteenth  amendment,  that  the  federal  government  cannot  tax  the 
income  from  state  and  municipal  bonds  and  also  the  income  received 
by  employees  of  states  and  their  subdivisions.^  If  this  is  not  to  be 
tested  and  if  an  amendment  cannot  be  adopted,  it  is  almost  futile  or 
worse  to  attempt  to  collect  the  higher  surtaxes  of  the  present  law. 

Aside  from  the  matter  of  Treasury  receipts,  there  is  some  truth, 
though  of  course  no  one  knows  just  how  much,  in  the  contention  that 
high  income  and  inheritance  taxes  check  thrift,  prevent  the  expansion 
of  business  and  thus  hurt  all  classes  of  people.  Secretary  Mellon 
says  the  small-propertied  classes  are  injured  more  than  those  who  pay 
the  taxes.  There  is  certainly  great  need  for  additional  capital  now, 
especially  in  Europe  and  the  undeveloped  parts  of  the  world  though, 
unfortunately,  neither  we  nor  Europe  seem  able  to  make  proper  use 
of  what  capital  we  already  have.  Both  could  greatly  increase  pro- 
duction with  existing  capital  if  our  industrial  forces  and  credit  were 
effectively  organized  and  still  more  if  we  diverted  less  to  destructive 

*'See  arguments  in  Seligman's  Income  Tax,  especially  chapters  5  and  6. 


108  Roy  G.  Blakey  [March 

purposes.  Frankly,  the  present  writer  is  in  doubt  as  to  what  are 
proper  rates  for  income  and  inheritance  taxes  under  present  circum- 
stances. The  rates  of  the  act  of  1918  are  not  excessive  from  the 
standpoint  of  ability  to  pay,  but  the  surtax  rates  are  not  practical 
administratively,  especially  with  the  existing  situation  in  respect  to 
tax-exempt  securities.  While  not  agreeing  with  all  that  Secretary 
Mellon  says,  it  is  believed  that  he  is  within  the  truth  when  he  says  that 
combined  income  tax  rates  of  40  per  cent  for  1922  and  of  33  per  cent 
for  1923  and  thereafter  are  sufficiently  high. 

Who  shall  bear  the  burden  of  taxes  and  in  what  proportion  is  a 
perennial  question  and  the  answer  depends  much  upon  who  holds  the 
reins  of  power.  There  has  been  a  revolution  in  this  control  in  the 
United  States  since  the  last  law  was  enacted,  though  not  as  much  of  a 
revolution  as  some  seemed  to  think.  Just  how  far  further  changes  will 
be  made  during  the  regular  session  of  Congress  will  depend  in  large 
part  upon  how  far  the  leaders  think  they  can  go  without  causing  too 
much  reaction  and  this,  in  turn,  will  depend  much  upon  the  weather 
in  the  West  and  in  Europe. 

Roy  G.  Blakey. 

University  of  Minnesota. 


REVIEWS  AND  NEW  BOOKS 

General  Works,  Theory  and  Its  History 

Principles  of  Economics.  Bj^  F.  M.  Taylor.  (New  York:  The 
Ronald  Press  Company.  1921.  Pp.  ix,  577.) 
All  those  charged  with  the  administration  of  our  enormous  courses 
in  general  theory  of  economics  have  been  greatly  interested  in  the 
experimental  methods  of  text-writing  and  teaching  which  Professor 
Taylor  has  carried  on  at  the  University  of  Michigan.  This  is  the 
first  edition  of  his  book  offered  to  the  general  public,  though  its  proto- 
type was  first  used  in  that  university  some  fifteen  years  ago  and  it  has 
been  revised  almost  annually  since.  This  experimental  "trial  and 
error"  process  the  author  proposes  to  continue  for  some  time  to  come. 
As  stated  in  the  preface  the  body  of  doctrine  presented  "is,  on  the 
whole,  rather  markedly  orthodox."  The  fact  that  a  text  so  developed 
should  show  this  result  is  hardly  without  significance — especially 
since  a  "small  army  of  young  men  have  assisted  in  teaching  it"  during 
its  period  of  growth.  It  is  "intended  only  for  use  as  a  textbook"  and 
interest  in  its  content  deepens  when  it  is  remembered  that  not  only 
has  it  been  sixteen  years  in  the  making  while  subject  to  the  test  of 
actual  classroom  use,  but  its  author  has  had  long  teaching  experience, 
thirty-four  years  in  elementary  economics  and  twenty-eight  in  advanced 
courses  in  economic  theory. 

As  a  textbook,  then,  the  volume  contains  much  less  introductory 
and  historical  matter  than  is  generally  offered.  It  plunges  almost  at 
once  into  a  survey  of  the  existing  economic  order.  We  are  told  that  at 
Ann  Arbor  it  is  the  practice  to  use  a  supplementary  book  on  economic 
organization.  Again  the  familiar  chapters  on  practical  problems  are 
lacking.  The  book  "is  intended  to  perform  just  one  special  function 
in  the  student's  economic  education,  namel\^,  helping  him  to  master 
the  body  of  principles,  mostly  quite  abstract,  which  are  generally  held 
by  economic  authorities."  The  preface  claims  for  it  the  further  merit 
that  it  differs  from  most  other  texts  in  laying  "more  stress  on  securing 
for  the  student  a  very  definite  mastery  of  the  accepted  body  of 
economic  principles — such  mastery  as  the  student  of  Chemistry  or 
Physics  is  expected  to  acquire." 

The  proportions  of  the  book  may  be  brieflj^  indicated.  The  pre- 
liminary analysis  of  the  factors  of  production,  of  money,  banking, 
speculation,  and  insurance,  covers  the  first  225  pages ;  the  discussion 
of  value  and  price  is  assigned  150  pages;  monetary  theory,  45  pages; 
the  theory  of  distribution,  65  pages ;  a  critique  of  the  present  order, 
60  pages.      It  will  be  noted  that  the  treatment  of  distribution  is  very 


110  Reviews  and  New  Books  [March 

brief,  almost  a  summary  one.  Rent,  interest,  wages,  and  profits  march 
by  at  an  average  rate  of  12  pages  each.  By  contrast  the  treatment 
of  value  and  price  makes  heavy  demands  on  space  as  it  does  on  the 
patience  and  sustained  interest  of  the  student.  The  critical  chapters 
carry  a  conclusion  favorable  to  existing  institutions : 

The  results  are  certainly  below  the  best  conceivable.  Nevertheless,  while 
great  improvements  are  needed,  are  possible,  and  ought  to  be  effected,  we 
must  still  hold  that  a  verdict  for  the  substantial  soundness  of  the  system 
is  practically  inevitable.  We  may  add  that  a  thoroughly  humane  despot 
with  power  to  substitute  any  other  system  thus  far  proposed,  might  very 
probably — if  he  took  all  the  facts  into  consideration — decide  that  the 
system  now  operating  was  on  the  whole  the  very  best  one  possible. 

Judged  as  a  text,  doubts  of  its  effectiveness  are  aroused  by  consider- 
ation of  the  unreal  character  of  some  of  the  illustrations  employed. 
Thus  on  page  127  we  have  a  table  with  eight  columns  and  twenty-seven 
lines  to  illustrate  varying  conditions  of  return  in  production.  It  con- 
tains "the  assumed  conditions  and  the  assumed  general  results  of  our 
series  of  imaginary  experiments."  Yet  this  highly  artificial  table 
serves  as  the  basis  of  discussion  in  at  least  three  chapters.  Again  in 
the  treatment  of  value  and  price  carried  through  seven  chapters,  we 
begin  by  impressing  the  student  with  its  "abstract  and  hypothetical 
character."     We  make  large  assumptions : 

First,  that  each  man  taking  place  in  the  exchange  process  is  an  ideal  or 
perfect  economic  man.  His  feelings  and  motives  are  predominantly,  if 
not  wholly,  concerned  with  getting  the  maximum  of  satisfactions  for  him- 
self and  they  consistently  remain  so  from  day  to  day  and  year  to  year, 
all  other  motives  such  as  charity  and  sympathy  being  shut  out.  The  man 
has  also  full  knowledge  of  market  conditions  and  excellent,  not  to  say 
perfect,  judgment  in  making  decisions.  And  his  actions  are  entirely  free 
of  caprice,  passion,  and  prejudice,  so  that  he  would  naturally  buy  always 
in  the  cheapest  market  and  sell  in  the  dearest  (p.  249). 

This  perfect  man  operates  then  in  a  perfect  market  where  perfect 
competition  prevails  and  "is  supposed  to  carry  the  principles  of  com- 
petition to  its  logical  conclusion — to  continue  competing  so  long  as 
there  is  a  surplus  of  immediate  economic  advantage  over  the  sacri- 
fices made."  It  should  be  added  that  the  discussion  of  price  proceeds 
from  these  assumptions  through  three  stages:  the  immediate  process 
of  price  determination — market  price;  the  intermediate  process — 
normal  price;  and  the  ultimate  processes.  The  present  reviewer  can 
see  no  necessity  for  and  no  pedagogic  gain  arising  from  such  a  wide 
departure  from  the  real  world  and  actual  market  conditions.  It  makes 
a  vast  demand  on  the  student  intellect  of  "but  limited  reach  and  power" 
to  imagine  clearly  such  hypothetical  conditions  which  have  no  place 
in  his  personal  experiences  and  it  calls  for  a  prolonged  maintenance 


1922]  General  Works,  Theory  and  Its  History  111 

of  the  class  interest  and  capacity  for  sustained  logical  assault  on 
difficulties  to  carry  these  artificially  created  men,  markets  and  competi- 
tive conditions  through  seven  chapters  and  three  stages  of  reasoning. 
Such  hypothetical  reasoning  smacks  of  the  pliilosopher  and  the  study 
rather  than  of  the  economist,  the  factory,  and  the  market  place.  Will 
not  a  mastery  of  economic  principles  similar  to  that  of  the  student  in 
physics  and  chemistry  be  best  acquired  by  similarly  concrete  realistic 
methods.'*  The  "abstract  principles"  of  our  subject  are  based  on  the 
facts  of  industry,  not  on  philosophical  abstractions  and  assumptions. 
And  they  are  most  useful  when  this  essential  relation  is  positively 
presented  throughout  the  introductory  course.  Only  through  this 
method  of  approach  do  they  become  usable  guides  to  conduct  for  the 
business  man  and  the  citizen  in  the  turmoil  of  industrial  and  political 
life. 

There  are  numerous,  rather  elaborate  diagrams  which  do  not  illus- 
trate actual  industrial  conditions,  but  are  helpful  through  analogy, 
if  at  all.  Extensive  use  is  made  of  problems  and  examples  for  student 
solution.  These  are  frequently  inserted  in  the  chapters.  They  are 
obviously  very  carefully  considered  and  selected  and  make  up  quite 
the  best  collection  the  writer  has  examined.  Frequently,  however,  he 
has  felt  doubtful  as  to  the  possibility  of  their  solution  on  the  basis 
of  the  matter  previously  presented.  Seemingly,  the  intent  is  to  arouse 
the  student's  interest  in  further  difficulties  as  well  as  sustain  and  clarify 
his  attack  on  present  problems. 

Throughout  the  book  there  is-  a  sturdy,  sustained  and  effective  attack 
on  persistent,  current  economic  fallacies  to  which  every  war-worn 
teacher  of  elementary  economics  will  give  ungrudging  praise.  If  we 
could  throw  down  and  obliterate  these  hoary  "old  men  of  the  sea," 
our  efforts  would  be  justified.  If  this  book  carries  out  its  promise 
in  aiding  that  endeavor,  the  labor  expended  on  its  development  will  be 
deemed  well  spent. 


Chakles  E.  Persons. 


College  of  Business  Administration 
Boston  University 


NEW  BOOKS 

Amoroso,  L.     Lezioni  di  economie  matematica.      (Bologna:  Zaniehelli.  1921. 
Pp.  472.) 

Lezioni  di  matematica  finanziaria,  raccolte  delta  Professora 
Emma  Sciolette.     Vol.  I.      (Naples:  Gennaro  Mago.      1921.      Pp.   208.) 

Arndt,    p.      Wie    studiert    man    Nationalokonomie?      (Frankfurt    a.     M. : 
Biazek  &  Bergmann.      1921.      Pp.  28.) 

Bastiat,  F.     Economic  sophisms.     Translated  by  P.  J.  Stirling.      (New 
York:     Putnam.      1921.      Pp.  xii,  230.      $1.75.') 


112  Reviews  and  Nero  Books  [March 

VON  Bohm-Bawerk,  E.  Kapital  unci  Kapitalzins.  Three  vols.  Fourth 
edition   (Jena:     Fischer.      1921.) 

Carver,  T.  N.  Principles  of  national  economy.  (Boston:  Ginn.  1921. 
Pp.  vi,  773.     $3.00.) 

This  is  an  amplification  of  Professor  Carver's  Principles  of  Political 
Economy  reviewed  in  the  December,  1919,  issue  of  this  Review,  pages 
796-797.  Together  with  Elementary  Economics  reviewed  in  the  June 
issue,  1921,  pages  274-277,  it  comprises  a  series  of  texts  the  general 
content  and  philosophy  of  which  are  alike.  As  compared  with  the  text 
first  mentioned,  the  present  volume  is  divided  into  the  same  eight  parts 
and,  except  in  parts  one  and  two,  the  chapter  headings  are  generally 
identical.  There  are  additional  chapters  on  taxation:  The  shifting  of 
taxation  and  the  minimum  sacrifice  theory  of  taxation  based  on  pre- 
viously published  papers  of  the  author,  and  the  concluding  chapters 
include  labor  programs  and  the  limits  of  state  interference  The  sub- 
stance of  the  first  will  be  familiar  to  followers  of  Professor  Carver's 
writings. 

Other  changes  are  confined  to  amplification  of  previous  discussions  or 
a  presentation  of  later  developments.  Examples  are  found  in  a  compli- 
mentary reference  to  the  eighteenth  amendment,  in  an  enlarged  discussion 
of  the  functioning  of  the  federal  farm  loan  system,  and  in  the  favorable 
consideration  of  our  restrictive  immigration  policy.  Key  chapters  such 
as:  The  balancing  of  the  factors  of  production;  The  battle  of  the 
standards ;  and  Constructive  liberalism  suffer  no  significant  changes.  A 
few   critically   evaluated   titles   for   collateral   reading   follow   each   part. 

C.  E.  P. 

Fradenburgh,  a.  G.  Elements  of  economics.  (New  York:  Scribner's. 
1921.      Pp.  xvi,  364.) 

Franklin,  H.  G.  The  economics  of  laissez  faire.  A  new  exposition  of 
the  present  economic  regime.  Part  I.  (Buffalo,  N.  Y. :  Author.  1920. 
Pp.  164.) 

The  author  of  this  tiny  sexto-decimo  volume  sets  before  himself  two 
tasks:  (1)  to  add  to  our  knowledge  of  the  causes  of  the  cycles  of  alter- 
nate prosperity  and  depression;  and  (2)  to  contribute  to  current  theories 
of  distribution.  The  first  of  these  tasks  is  performed  in  a  way  that  is 
interesting  and  suggestive,  though  quite  unsupported — in  this  volume  at 
least — by  any  statistical  evidence.  The  second  of  these  tasks  is  to 
demonstrate  the  error  of  the  marginal-productivity  theories  of  wages  and 
interest.  In  the  latter  part  of  his  book  he  thus  deviates  far  from  the 
orthodox  economics  which  most  of  us  accept. 

The  portion  of  the  book  likely  to  prove  of  greatest  value,  to  orthodox 
economists  at  least,  consists  of  chapters  2  and  3.  In  these  the  author 
ascribes  industrial  depressions  to  the  increase  of  industrial  equipment  at 
a  rate  greater  than  the  increase  of  labor  supply.  The  financing  of  the 
construction  of  this  excessive  equipment  by  bank-loans  instead  of  by 
individual  or  corporate  savings  from  income  leads  to  price  increases  and 
ultimately  to  panics.  Tbe  author's  method  of  explaining  why  the  prices 
of  goods  rise  more  than  wages  will  prove  to  be  a  genuine  contribution,  if 
verified. 

The  book  as  a  whole  represents  an  effort  to  analyze  the  demand  side 
of  economic  phenomena.      It  is,  therefore,  unfortunate  that  the  author's 


1922]  General  Works,  Theory  and  Its  History  113 

apparent  unfamiliarity  with  economic  literature  and  method  should  have 
led  him  into  errors  that  are  both  so  numerous  and  so  glaring.  The 
obviousness  of  these  various  incidental  errors  is  likely  to  prevent  the 
essay  from  receiving  the  attention  which  it  otherwise  merits. 

Donald  S.  Tucker. 

GiDE,  C.     Premieres  notions  d'economie  politique.      (Paris:  Michel.      1921. 

Pp.  185.) 
GouGH,  G.  W.      Wealth  and  work.      (London:  Philip.  1921.      Pp.  260.) 
DE  GreeFj  G.     L'economie  sociale  d'apres  la  methode  historique  et  au  point 

de  vue  sociologique.      (Brussels:     OfBce  de   Publicite.      1921.      Pp.   534. 

30  fr.) 

Hayes,  H.  G.  Problems  and  exercises  to  accompany  Clay's  "Economics 
for  the  general  reader,"  and  Ely's  "Outlines  of  economics."  (New  York: 
Macmillan.      1921.      Pp.  x,  67.      50c.) 

The  problems  were  prepared  for  the  use  of  students  at  Ohio  State 
University.  The  arrangement  follows  the  order  of  assignment  in  the 
two  books. 

Hecht,  J.  S.  The  real  Health  of  nations.  (Yonkers-on-Hudson,  N.  Y. : 
World  Book  Co.      1921.     Pp.  x,  350.     $2.40.) 

HelleRj  W.  Die  Grundprobleme  der  theoretischen  Volkstoirtschaftslehre. 
(Leipzig:     Quelle  &  Meyer.      1921.     Pp.  104.) 

Jahn,    G.      Grundziige    der    Volksrcirtschaftslehere.      (Leipzig:    Teubner. 

1921.  Pp.  123.      6.10  M.) 

Lewinski,  J.  S.  The  founders  of  political  economy.  (London:  King. 
1921.) 

Lewis,  P.  G.  Scientific  economics,  establishing  the  sciences  of  money, 
human  labor  and  industrialization  for  social  progress.  (Milwaukee: 
Pabst  Pub.  Co.      1921.     Pp.  107.) 

Maciver,  R.  M.  The  elements  of  social  science.  (New  York:  Dutton. 
Pp.  vi,  186.      1921.      $2.50.) 

Michels,  R.      La  theorie  di  Marx  de  la  miserie  crescente.      (Turin:  Bocca, 

1922.  Pp.  244.) 

Muhs,  K.  Materielle  und  psychische  TVirtschaftsauffassung.  (Jena:  Gustav 
Fischer.      1921.      Pp.  iv,  96.      12  M.) 

Muller,  O.  Die  Entzcicklung  der  Volksrcirtschaft.  (Munich:  Volksver- 
eins-Verlag.      1921.      Pp.   104.      7  M.) 

Pareto,  v.  Lezioni  di  scienza  economica  razionale  e  sperimentale.  (Rovigo: 
Industrie  Grafiche.      1921.      Pp.  907.) 

Park,  R.  E.  and  Burgess,  E.  W.  Introduction  to  the  science  of  sociology. 
(Chicago:  Univ.  of  Chicago  Press.      1921.      Pp.  xxi,  1040.     $4.50.) 

Penson,  H.  The  economics  of  everyday  life.  Part  II.  (Cambridge, 
Eng.:  Univ.  Press.  1921.      Pp.  111.     4s.") 

PiGou,  A.  C.  The  political  economy  of  war.  (New  York:  Macmillan. 
1921.      Pp.  ix,  251.      $3.25.) 

Prall,  D.  "VV.  a  study  in  the  theory  of  value.  (Berkeley,  Cal. :  Univ.  of 
California.      1921.      Pp.  290.      $1.25.) 


114  Reviews  and  New  Books  [March 

Roe,  F.  W.  The  social  philosophy  of  Carlyle  and  Ruskin.  (New  York: 
Harcourt.      1921.      Pp.  vii,  335.     $8.) 

RoscHER,  W.  Economic  industrielle.  Vol.  II.  Translated  into  French  by 
P.  Hallier.  Eighth  edition.  (Paris:  Giard.  1921.  Pp.497.  22  fr.) 
New  paragraphs  and  notes  were  added  to  Roscher's  original  text  in  the 
seventh  edition  (1899),  but  in  the  eighth  edition  the  work  of  revision  was 
carried  much  farther.  The  paragraphs  of  Roscher's  text  have  been 
altered,  and,  in  some  instances,  practically  rewritten  in  order  to  bring 
them  into  harmony  with  current  thought  and  legislation.  The  new  para- 
graphs of  the  preceding  edition  have  been  substantially  expanded.  There 
seem  to  be  no  additions  to  the  German  text  of  1913  in  the  present  edition. 

A.  P.  Usher. 

Schmidt,  M.  Grundriss  der  ethnologischen  Volkswirtschaftslehre.  Vol.  I, 
Die  soziale  Organisation  der  menschlichen  Wirtschaft.  Vol.  II,  Der 
soziale  JVirtschaftsprozess  der  Menschheit.  (Stuttgart:  Ferdinand  Enke. 
1921.      Pp.  viii,  222;  viii,  226.) 

Seligman,  E.  R.  a.  Principles  of  economics.  Ninth  edition  revised.  (New 
York:  Longmans.      1921.      Pp.  711.     $3.) 

Simpson,  K.  Economics  for  the  accountant.  (New  York:  Appleton.  1921. 
Pp.  xi,  206.     $2.) 

Smith,  A.  Wealth  of  nations.  Introduction  by  William  Robert  Scott. 
Two  vols.      (London:  Bell.      12s.) 

SoMMARiN  E.  Teoretisk  Nationalekonomi.  (Lundi:  Gebers  F'orlag.  Pp.  x, 
186.) 

Spann,  O.  Fundament  der  T'olkstvirtschaftslehre.  Second  edition  re- 
vised.     (Jena:  Fischer.      1921.      Pp.  xvi,  372.) 

Taussig,  F.  W.  Principles  of  economics.  Vol.  I.  Third  edition  revised. 
(New  York:  Macmillan.      1921.      Pp.  xxiii,  545.) 

The  most  important  changes  in  this  revision  "are  those  necessitated 
or  suggested  by  the  events  of  the  Great  War.  The  treatment  of  the 
banking  system  of  the  United  States  has  been  entirely  rewritten  in 
view  of  the  great  and  rapid  changes  that  took  place  during  its  course. 
That  of  paper  money  has  been  extended  so  as  to  include  an  account  of 
the  war  issues."  In  this  rewriting,  the  chapter  on  "Some  problems  of  legis- 
lation in  banking"  has  been  omitted,  though  sections  from  it  find  place 
elsewhere.  Sections  have  been  omitted  in  the  discussions  of  bimetallism 
and  in  the  description  of  foreign  currencies.  A  new  chapter  at  the 
close  of  Book  III,  Proposals  for  monetary  reform,  discusses  in  turn: 
the  multiple  standard;  control  of  prices  through  the  alternate  expansion 
and  contraction  of  government  paper  currency;  and  the  stabilized  dollar, 
with  conclusions  adverse  to  each,  mainly  on  the  basis  of  the  unpredicta- 
bility of  the  results,  popular  misunderstanding  and  the  resulting  danger 
of  ill-advised  political  action,  and  the  additional  uncertainties  which  such 
schemes  would  inject  into  domestic  and  international  business  relations. 
The  final  statement  reads  that  the  simple  gold  standard  "is  not  a  perfect 
arrangement;  but  it  is  the  best  workable  one  that  is  available." 

There  is  new  terminology  in  the  discussion  of  market  value  and  in  the 
treatment  of  value  and  marginal  utility.  The  phrase  "marginal  vendi- 
bility" is  introduced  since  "the  common  formulation  by  economists  that 


1922]  Economic  History  and  Geography  115 

price  depends  on  marginal  utility  tacitly  ignores  the  effects  of  inequality. 
The  term  "vendibility"  points  to  the  dominant  position  of  the  price  at 
which  the  last  item  is  sold,  and  makes  no  implication  concerning  the 
satisfactions  secured  by  the  person  who  pays  this  price"  (p.  123).  In 
the  discussion  of  elasticity  and  inelasticity  of  demand,  the  phrase  "elas- 
ticity of  demand  is  unity"  is  applied  to  the  case  in  which  the  total 
spent  for  a  commodity  remains  unaltered  irrespective  of  price  changes. 
The  increased  precision  of  statement  thus  made  possible  will  be  welcomed 
by  all  users  of  the  text.  C.  E.  P. 

Weber,  M.  Grundriss  der  Sozialokonomik.  III.  Abt.  I  Die  Wirtschaft 
und  die  gesellchaftlichen  Ordnungen  und  Mdchte.  (Tiibingen:  Mohr. 
1921.      Pp.  viii,  180.      26.40  M.) 

Worms,  R.  La  sociologie:  sa  nature,  son  contenu,  ses  attaches.  (Paris: 
Giard.      1921.      Pp.   164.      5   fr.) 

Political  Economy  Club  founded  in  London,  1821 :  Centenary  volume. 
(London:  Macmillan.      1921.      21s.) 

Der  wirtschaftliche  Wiederaufhau.      (Berlin:  K.  Block.      1921.      90  M.) 

Economic  History  and  Geography 

II  FaUimento  delta  Politica  Annonaria.  By  Umberto  Ricci.  (Flor- 
ence: "La  Voce."      1921.      Pp.493.) 

Among  the  books  which  look  back  upon  the  period  of  the  war  and 
seek  to  assess  the  jDolicics  and  conduct  of  those  in  charge  of  our  govern- 
ments, this  work  may  take  toda}^  an  important  place.  Whether  its 
moral  was  or  was  not  in  the.  author's  mind  before  he  undertook  his 
study — its  critics  would  surely  say  that  it  was — the  book  collects  and 
interprets  so  many  precise  data  of  a  significant  sort  that  it  may  fairly 
claim  to  be  reckoned  with. 

First  discarding  popular  explanations  of  the  cause  of  high  prices, 
the  author  points  to  the  increased  issue  of  paper  money  in  Italy  and 
the  reduced  store  of  commodities,  covering  familiar  ground  in  describ- 
ing their  evil  effects.  He  then  sets  about  to  dissect  unsparingly  the 
powers  of  both  national  and  provincial  governments  for  remedying 
a  situation  for  which  he  regards  the  national  government  as  largely  to 
blame.  The  provincial  governments,  when  they  forbade  exportation 
of  various  goods  to  other  provinces,  brought  about  a  waste  of  goods 
and  reduced  the  utility  to  be  derived  therefrom.  When  the  central 
government  granted  favors  to  consumers'  cooperatives,  which  were 
trying  to  fight  the  middlemen,  it  indicated  its  preference  for  inexpert 
as  against  expert  management.  In  general,  every  act  of  interference 
by  the  state  soon  had  to  be  followed  by  more  interference.  Every  en- 
forced reduction  in  the  price  of  an  article  tended  to  increase  the  con- 
sumption of  it  directly  or  indirectly  and  to  decrease  the  production 
of  it. 


116  Reviews  and  New  Books  [March 

The  system  of  rationing  he  especially  attacks.  It  required  or  at 
least  involved  a  meddlesome  control  over  crops.  It  compelled  a  level- 
ing of  tastes — not,  for  instance,  till  the  very  end  of  the  war  were  desir- 
able exceptions  made  in  the  interest  of  the  sick — and  an  equalization 
of  quantities  consumed.  The  well-to-do  could  always  evade  the  laws 
by  eating  as  often  as  they  wished  at  restaurants.  While  one  person 
might  have  more  meat  and  less  sugar  than  he  wished,  another  would 
have  more  sugar  and  less  meat.  Consumers  turned  to  substitutes,  the 
increased  demand  for  which  sent  their  prices  up  to  a  height  much 
beyond  that  reached  by  comparable  commodities.  To  illustrate  this 
situation  the  author  cites  impressive  figures. 

Largel}^,  the  book  is  an  attack  on  the  bureaucracy,  the  numbers  of 
whom  were  enormously  increased  in  the  war  time.  They  were  careless, 
incompetent,  inexperienced ;  the  machine  of  which  they  formed  a  part 
became  too  complicated  to  manage.  Meat,  cereals,  etc.,  got  lost,  went 
into  hiding;  expensive  methods  were  devised  to  recover  them.  While 
goods  were  in  the  government's  mismanaging  hands,  loss  and  deterio- 
ration ensued.  Hence  the  consumer's  rightful  expectations  were  not 
met.  Whoever  violated  the  rules  was  subject  to  various  penalties, 
costly  to  administer  and  ineffective. 

The  effects  on  producers  were  not  less  disturbing.  Their  costs  re- 
maining high  while  the  prices  of  their  products  were  fixed,  they  lessened 
production  of  the  very  things  most  in  request.  Prices  are  interde- 
pendent. Every  blow  is  reflected.  Calves  were  killed  young,  though 
secrecy  was  necessary,  or  a  lie.  When  the  price  of  olive  oil,  the  food, 
was  fixed  low,  more  oil  was  diverted  to  industrial  uses.  Farm  hands 
could  not  be  forced  to  work  and  would  turn  to  other  employments  when 
wages  were  threatened.  In  agriculture,  in  shipping,  on  the  railroads, 
government  control  brought  annoyance  and  disorganization.  Contra- 
dictory orders  appeared  when  control  became  excessive  and  got  out  of 
hand.  A  law,  for  example,  permitted  the  exportation  of  cheese,  if  an 
amount  twice  as  great  was  imported.  A  dealer  could  import  10,000 
quintals  if  he  could  prove  that  he  had  exported  5,000,  and  could 
export  5,000  if  he  could  prove  that  he  had  imported  10,000!  The 
remedy  for  this  absurdity  proved  almost  as  bad  as  the  absurdity  itself. 

In  general,  the  service  of  supplying  what  the  people  needed  was 
costly,  because  bungling.  The  rural  sections,  in  particular,  were 
burdened  for  the  sake  of  the  city ;  producers  were  persecuted  and  pro- 
duction fell.  Tlie  corruption  of  the  bureaucracy  took  on  many  forms. 
The  initial  error,  however,  and  the  constant  error,  was  that  the  govern- 
ment insisted  on  drastic  control  when  a  system  of  economic  liberty, 
especially  for  the  fixing  of  prices,  would  have  been  of  vastly  greater 
benefit  to  the  people. 

Carefully  as  the  book  is  written,  skilful  as  its  arguments  are,  its 


1922]  Economic  History  and  Geography  117 

tone  often  challenges  opposition.  The  reviewer,  for  one,  would  like 
to  examine  the  case  for  the  negative  stated  by  a  protagonist  as  skilful 
as  Professor  Ricci. 

Robert  F.  Foerster, 

new  books 

Andree,  K.  Geographic  des  Welthandels.  Vols.  Ill  and  IV.  (Vienna: 
Seidel  &  Sohn.     1921.     Pp.  x,  572;  xv,  680.      110  M.) 

Atkinson,  M.,  editor.  Australia:  economic  and  political  studies  by  various 
writers.      (Melbourne:  Macmillan.      1921.) 

Barnes,  H.  E.  The  social  history  of  the  world.  An  outline  syllabus. 
(New  York:  Appleton.      1921.      Pp.  xii,  126.     $1.25.) 

Beutler,  a.  Die  Entwicklung  der  sozialen  und  tcirtschaftlichen  Lage 
der  Weber  im  sdchsischen  Vogtland.  Greifswalder  Staatswissenchaft- 
liche  Abhandlungen,  Nr.  6.  (Greifswald:  L.  Bamberg.  1921.  Pp.  viii, 
134.) 

BoERGER,  A.  Sieben  La  Plata-Jahre.  Arbeitsbericht  und  wirtschaft- 
politischer  Ausblick  auf  die  Welthornhammer  am  Rio  de  La  Plata. 
(Berlin:  Verlag  von  Paul  Parey.      1921.      Pp.  44-7.) 

Brandt,  L.  R.  Social  aspects  of  Greek  life  in  the  sixth  century  B.  C. 
(Philadelphia,  Pa.:  T.  C.  Davis  &  Sons,  506  Race  St.      1921.     Pp.  108. 

$2.) 

Brenier,  H.  French  points  of  view,  being  letters  to  the  British  press  and 
others.      (Marseille:  Comite  de  Relations  Internationales.    1921.    Pp.  62.) 

Brinckmeyer,  H.  Hugo  Stinnes:  the  Czar  of  the  new  Germany.  Trans- 
lated by  A.  B.  Kuttner.      (New  York:  Huebsch.      1921.) 

Brunhes,  J.  and  Vallaux,  C.  La  geographic  de  rhistoire.  (Paris: 
Alcan.  1921.      Pp.  716.) 

Carman,  H.  J.  and  Graper,  E.  D.  Record  of  political  events  from  July 
1,  1920  to  June  30,  1921.  Supplement  to  the  Political  Science  Quarterly, 
vol.  XXXVI,  no.  3.  (New  York:  Academy  of  Political  Science,  Columbia 
Univ.      1921.      Pp.  96.      $1.) 

Channing,  E.  a  history  of  the  United  States.  Vol.  V,  The  period  of 
transition,  1815-1848.  (New  York:  Macmillan.  1921.  Pp.  623. 
$4.50.) 

Contains  chapters  on  the  First  labor  movement  and  the  Bank  and  the 
panic  of  1837. 

Chisholm,  G.  G.  Handbook  of  commercial  geography.  New  and  revised 
edition.      (New  York:  Longmans.      1921.) 

Christiancy,  G.  a.  C.  The  reparations  question  and  its  effect  upon 
industry.  (New  York:  Hirsch,  Lilienthal  &  Co.,  165  Broadway.  1921. 
Pp.  7.) 

Colby,  C.  C.  Source  book  for  "The  economic  geography  of  North 
America."      (Chicago:  Univ.  of  Chicago  Press.      1921.  Pp.  418.     $4.) 

Danckwortt,  p.  W.  Ein  Riickblick  und  Ausblick  auf  Handel  tind  In- 
dustrie Sibiriens.      (Leipzig:  Teubner.      1921.      Pp.  xii,  271.      12  M.) 


118  Reviews  and  New  Books  [March 

DoPSCH,  A.  JVirtschaftliche  und  soziale  Grundlagen  der  europdiscken 
Kulturentwicklung.  A  us  der  Zeit  von  Casar  his  auf  Karl  den  Grossen. 
Parts  I  and  II.  (Vienna :  L.  W.  Seidel  &  Sohn.  1920.  Pp.  xi,  404,  xi, 
542.      80  M.) 

.      Die    Wirtschaftsentwicklung   der  Karolingerseit   vornehm- 

lich    in   Deutschland.     Part    I.      Second    edition,    revised    and    enlarged. 
(Weimar:  Hermann  Bohlaus  Nachf.      1921.      Pp.  xiv,  402.) 

Dove,  K.  Allgemeine  Verkehrsgeographie.  (Berlin:  Vereinigung  Wissen- 
schaftlieher  Verleger.      1921.      Pp.  95.       4.20  M.) 

Fairgrieve,  J.      Geography  and  xcorld  power.      (New  York:  Button.    1921. 

$2.) 

Farnham,  D.  T.  America  vs.  Europe  in  industry.  (New  York:  Ronald. 
1921.      Pp.  492.     $4.) 

FoLWELL,  W.  W.  A  history  of  Minnesota.  Vol.  I.  (Saint  Paul:  Minne- 
sota Historical  Society.      1921.      Pp.  xvii,  533.) 

To  be  completed  in  four  volumes.      Chapter  12  is  entitled  "Territorial 
Railroad  Miscarriage." 

Foster,  W.  The  English  factories  in  India.  Vol.  X.  (Oxford:  Claren- 
don Press.      1921.      Pp.  440.) 

Includes  documents  of  the  period  1655-1660. 

Friedman,  E.  International  finance  and  reorganization.  (New  York: 
Button.  1921.) 

GoTziNGER,  W.  Handels — und  Verkehrsgeographie,  mit  hesonderer  Be- 
riicksichtigung  des  schweizerischen  Aussenhandels.  (Ziirich:  Schulthess. 
1921.      Pp.  viii,  199.      5  fr.) 

Hahnsen,  F.  Geschichte  der  Kieler  Haiidicerksamter.  Ein  Beitrag  zur 
Schlesxcig-Holsteinischen  Gewerbegeschichte.  Mitteilungen  der  Gesell- 
schaft  fiir  Kieler  Stadtgeschichte,  Nr.  30.  (Kiel:  Kommissionsverlag  von 
Lipsius  &  Tischer.      1921.      Pp.  xv,  467.) 

Harris,  M.  B.  A  social  and  industrial  history  of  England  before  the 
Industrial  Revolution.      (London:  Collins.      1921.      Pp.  227.) 

Hasse,  a.  R.  Index  to  economic  material  in  documents  of  the  states  of  the 
United  States,  1790-1904.  Pennsylvania.  Bepartment  of  economics 
and  sociology  of  the  Carnegie  Institution  of  AVashington.  Part  2,  F  to 
Railroads.      (Washington:  Carnegie   Institution.      1921.) 

Hatsciiek,  J.  Britisches  und  romisches  JVcltreich.  Eine  sozialic'issen- 
schaftliche  Parallele.      (Munich:  R.  Oldenbourg.      1921.) 

HiCKMAXN.  Geographisch  statistischer  Universal-Atlas.  Revised  by  Alois 
Fischer.      (Vienna:  G.  Freytag  &  Berndt.      1921.      Pp.110.       40  M.) 

Kotzschke,  R.  Grundziige  der  Deutschen  JVirtschaftsgeschichte  bis  zum 
17.  Jahrhundert.  Second  revised  edition.  (Leipzig:  Teubner.  1921. 
Pp.   194.      12  M.) 

Kuhles.      Die  Wirtschaftsprohleme  von  heute.      (Berlin-  Friedenau:  Verlag 

Freie  Wirtschaft.      1920.      Pp.  84.) 
Ki'HNERT,  H.      QueUenheft  zur  JVirtschaftsgeschichte  von   Grossthiiringen. 

(Jena:  Jenaer  Volksbuchhandlung.      1921.      Pp.72.      8  M.) 


1922]  Economic  History  and  Geography  119 

LeEj  M.  p.  The  economic  history  of  China,  rcith  special  reference  to 
agriculture.  Columbia  University  studies  in  history,  economics  and 
public  law,  vol.  XCIX,  no.  1.  (New  York:  Longmans.  1921.  Pp.  461. 
$4.50.) 

Leist,  E.  Die  Ein~iCirkungen  des  Weltkrieges  und  seiner  Folgen  auf  die 
deutsche  SpiritusproduJction.  Kolner  wirtschafts-  und  sozialwissenschaft- 
liche  Studien.     Vol.  I.      (Cologne:  Paul  Neubner.      1921.) 

Lethbridge,  a.  B.  Germany  as  it  is  today.  (London:  Eveleigh  Nash  Co. 
1921.      Pp.  XXXV,  282.) 

LoRiA,  A.  Aspetti  sociali  ed  economici  della  Guerra  Mondiale.  (Milan: 
Vallars.      1921.) 

LuTGENS,  R.  Spezielle  Wirtschaftsgeographie  auf  landschaftshundlicher 
Grundlage.  Mitteilungen  der  Geographischen  Gesellschaft  in  Hamburg, 
vol.  XXXIII.      (Hamburg:  L.  Friederichsen  &  Co.      1921.      Pp.  22.) 

MacMillan,  a.  a.,  editor.  Financial  independence.  (Sherbrooke,  Que- 
bec:  A.  MacMillan.      1921.      Pp.17.) 

Matschoss,  C.  Preussens  Gewerheforderung  und  ihre  grossen  Manner. 
(Berlin:  Verlag  des  Vereins  Deutscher  Ingenieure.      1921.      Pp.  165.) 

Melville,  L.      The  South  Sea  Bubble.      (London:  D.  O'Connor.  1921.  25s.) 

Mitchell,  B.  The  rise  of  cotton  mills  in  the  South.  (Baltimore,  Md. : 
Johns  Hopkins  Univ.  Press.      1921.       Pp.  vii,  281.) 

The  author  dates  the  beginning  of  cotton  manufacture  in  the  South 
at  about  1880.  "The  return  to  specie  payments,  bringing  confidence  to 
enterprise,  showed  itself  in  the  veritable  boom  of  the  fall  of  1879,  precip- 
itating events  in  the  South  as  all  over  the  nation.  In  1880,  southern 
railway  building  took  on  new  life,  roads  in  financial  difficulties  being 
reorganized  and  narrow  gauge  being  changed  to  broad  gauge.  Southern- 
ers were  accumulating  a  little  surplus  cash,  as  was  indicated  by  their 
ability  to  go  again  to  Saratoga  and  other  watering  places"  (p.  74). 
By  1895,  "the  industry  carried  its  own  excuse  for  being,  and  nothing 
more  than  economic  motives  were  necessarv  to  its  encouragement" 
(p.   151). 

Many  factors  were  involved  in  the  new  development.  Sometimes  mills 
built  before  1880  had  a  social  bearing  attracting  to  the  industry  enter- 
prise and  communities  with  no  former  manufacturing  tradition.  Proxim- 
ity to  raw  materials,  unremunerative  farming  during  the  early  eighties, 
quest  for  new  sources  of  profit,  low  prices  of  materials,  exemption  of 
factories  and  of  machines  from  taxation,  the  desire  to  give  occupation 
to  the  unemployed  labor  of  the  regions,  and  many  other  factors  functioned 
as  causes. 

Regarding  the  early  employment  of  child  labor  the  author  says: 
"Search  has  failed  to  reveal  one  instance  of  protest  against  their  working, 
but,  on  the  other  hand,  cotton  manufacturing  was  hailed  as  a  boon 
especially  because  it  gave  means  of  livelihood  to  women  and  children. 
Poverty-stricken,  the  South  was  mustering  every  resource  to  stagger  to 
its  feet"  (p.  95).  Not  onU^  was  the  enterprise  which  inaugurated  the 
new  industry  largely  local,  but  it  was  contributed  by  men  from  many 
walks  of  life.  Thus  the  muster  roll  of  enterprise  included  "lawyers, 
bankers,  farmers,  merchants,  teachers,  preachers,  doctors,  public  officials 


120  Reviews  and  New  Books  [March 

— any  man  who  stood  out  among  his  neighbors^  or  whose  economic  posi- 
tion allowed  him  a  little  freedom  of  action,  was  likely  to  be  requisitioned 
into  service  or  to  venture  for  himself"  (p.  106).  Capital  also  was  largely 
contributed  by  the  South,  usually  in  small  quantities  at  first,  and  for 
small  ventures.  "In  the  East  the  cotton  mill  is  built  from  the  capital  of 
the  rich ;  in  the  South  it  is  built  from  the  combined  capital  of  many  of 
little  means"  (p.  233). 

The  volume  is  well  documented,  and  is  further  enriched  by  an  abun- 
dance of  quotations  from  many  sources  which  are  inaccessible  even  to  the 
student  of  economic  history.  Isaac  Lippincott. 

Parkman,  M.  R.  Conquests  of  invention:  Cyrus  H.  McCormich,  Elias 
Howe,  Thomas  A.  Edison,  William  Murdoch,  Robert  Fulton,  Guglielmo 
Marconi,  Charles  Goodyear,  George  Westinghouse,  Eli  Whitney,  George 
Stephenson,  James  Watt,  Wilbur  and  Orville  Wright,  Alexander  Graham 
Bell.      (New  York:  Century.      1921.      Pp.  xiv,  413.     $2.) 

PoHLE,  R.  Sibirien  als  Wirtschaftsraum.  Eine  Einfiihrung  in  das  Leben 
Sibiriens.      (Bonn:  Kurt  Schroeder.      1921.      Pp.  viii,  QQ.      8  M.) 

Ralph,  F.  H.  and  Griffith,  W.  J.  A  digest  of  British  economic  history. 
(London:  Murray.      1921.      5s.) 

Raymond,  D.  N.  British  policy  and  opinion  during  the  Franco-Prussian 
War.  Columbia  University  studies  in  history,  economics  and  public  law, 
vol.  C,  no.  1.      (New  York:  Longmans.      1921.      Pp.  435.     $4.50.) 

Rees,  J.  F.  A  short  fiscal  and  financial  history  of  England,  1815-1918. 
(London:  Methuen.      1921.      Pp.  246.      6s.) 

ScHLEUTKER,  H.  T)ie  volkswirtschaf  tUche  Bedeutung  der  Koniglichen  See- 
handlung  von  1772-1820.  (Padcrborn:  F.  Schoningh.  1920.  Pp.  xvii, 
219.      24  M.) 

See,  H.  Esquisse  d'une  histoire  du  regime  agraire  en  Europe  aux  XVIIIe 
et  XIXe  siecles.      (Paris:  Giard.      1921.      Pp.276.      15  fr.) 

ScHMiTT,  F.  A.  Die  Volkswirtschaf t  im  neuen  Deutschland.  Betracht- 
ungen  sur  Wirtschaftlichen  Lage  nach  dem  Londoner  Ultimatum.  (Mu- 
nich: Franz  A.  Pfeiffer  &  Co.      1921.     Pp.  64.) 

ScHULZE,  F.  Die  Handxverher organisation  in  Freiberg  in  Sachscn  bis  sum 
Ende  des  16.     Jahrhunderts.      (Freiberg:  Craz  &  Gerlach.      1920.) 

SiEVEKiNG,  H.  Griindziige  der  netieren  Wirtschaftsgeschichte  vom  17. 
Jahrhundert  bis  sur  Gegenwart.  Third  edition.  (Leipzig:  Teubner. 
1921.      Pp.  110.      14  M.) 

.      Wirtschaftsgeschichte.     II,  Vom  Ausgang  der  Antike   bis 

sum  Beginn  des  19.  Jahrhunderts.  (Leipzig:  Teubner.  1921.  Pp. 
136.     6.80  M.) 

Stieda,  W.,  editor.  Hildebrand  T^eckirichusen.  Briefxcechsel  eines  deutschen 
Kaufmanns  im  15.  Jahrhundert.  (Leipzig:  Verlag  von  S.  Hirzel.  1921. 
Pp.  Ivii,  560.) 

As  far  back  as  1879,  Professor  Stieda,  then  of  Dorpat,  now  of 
Leipzig,  discovered  in  the  archives  of  the  town  of  Reval  a  remarkable 
collection  of  letters,  dating  from  the  fourteenth  and  fifteenth  centuries. 
He  copied  these  at  the  time,  but  was  delayed  by  many  untoward  circum- 


1922]  Economic  History  and  Geography  121 

stances,  including  the  war,  in  his  plans  for  printing  them.  He  has  now 
given  them  to  the  public,  together  with  an  interesting  introduction  of 
fifty-seven  pages,  in  which  he  summarizes  in  modern  German  the  story 
told  by  these  unique  documents  in  the  Low  German  of  five  centuries  ago. 
The  collection  as  now  edited  consists  in  the  main  of  letters  written 
between  two  brothers,  Hildebrand  and  Sivert  Veckinchusen,  but  a  number 
of  other  documents,  such  as  wills,  are  added.  There  are  no  less  than  544! 
separate  pieces,  and  they  range  in  date  from  1395  to  the  beginning  of 
the  second  third  of  the  fifteenth  century.  These  letters  relate  not  only 
to  business,  but  to  family  affairs  and  political  events,  and  form,  therefore, 
a  unique  source  of  information  regarding  the  life  of  the  Hanseatic  mer- 
chants of  the  early  fifteenth  century.  It  is  unnecessary  to  go  into  the 
personal  history  of  the  two  brothers,  although  the  letters  reveal  lives 
not  only  of  unremitting  industry,  but  also  of  daring  speculative  activity, 
and  some  tragedy.  Hildebrand,  after  carrying  on  his  business  success- 
fully in  Bruges  for  many  years,  became  involved  in  debt  through  too 
great  daring  in  his  ventures,  and  was  thrown  by  his  creditors  into  a 
debtors'  prison,  where  he  languished  for  four  years.  His  brother  Sivert, 
who  lived  in  Liibeck,  was  for  a  time  exiled  from  his  home  and  obliged 
to  live  in  Cologne  on  account  of  the  democratic  movement  of  the  me- 
chanics' gilds  to  capture  the  city  government. 

American  readers  will  be  especially  interested  in  the  facts  which  illus- 
trate the  conditions  under  which  commerce  was  carried  on  in  those  primi- 
tive days.  Communication  was  very  slow,  as  there  was  no  regular  postal 
service,  and  letters  had  apparently  to  be  sent  by  special  messenger. 
Robbers  were  plentiful  both  on  land  and  sea.  Nevertheless,  these  enter- 
prising merchants  of  the  North  Sea  dealt  actively  in  bills  of  exchange 
and  carried  on  their  trade  as  far  as  Bergen  in  the  north,  Novgorod  in 
the  east,  and  Venice  in  the  south.  They  dealt  in  a  great  variety  of 
commodities,  such  as  butter  and  wax,  salt  and  figs,  almonds,  currants, 
hazel  nuts,  ginger,  pepper,  spices,  soap,  furs  and  cloth,  silk  and  copper, 
rye  and  codfish,  iron  and  lead,  and  rosaries.  The  latter  played  a  con- 
siderable part  in  the  trade  with  Venice.  It  seems  at  first  sight  odd  to 
find  "Brazilienholz"  mentioned  as  an  article  of  trade  some  80  years 
before  Columbus  discovered  the  western  hemisphere.  But  the  German 
word  for  logwood  is  not  derived  from  the  fact  that  it  was  discovered  in 
Brazil;  on  the  contrary,  it  was  because  Bois  du  Bresil  was  found  to  grow 
freely  in  South  America  that  its  name  was  given  to  the  largest  state  on 
the  southern  continent. 

Henry  W.  Farxam. 

Stocks,  M.  D.  The  industrial  state.  A  social  and  economic  history  of 
England.      (London:  Collins.      1921.      Pp.  319.      4s.) 

Stolper,  G.  Deutschosterreich  als  sozial  und  icirtschafts  Problem. 
(Munich:  Drei  Marken.      1921.      Pp.  320.) 

Swing,  R.  Industrial  conditions  and  phases  of  life  in  Germanij  today. 
(New  York:  Sun  Herald  Corp.      1921.      Pp.  47.) 

TuRBERviLLE,  A.  S.  and  Howe,  F.  A.  Great  Britain  in  the  Latest  Age. 
From  laisser  faire  to  state  control.  (London:  Murray.  1921.  Pp.  vii, 
342.      7s.  6d.) 

Van  Brunt,  W.,  editor.  Duluth  and  St.  Louis  County,  Minnesota;  their 
story  and  people.      (Chicago:  Am.  Historical  Soc.      1921.) 


122  Reviews  and  New  Books  [March  i 

Vandenberg,  a.  H.      The  greatest  American,  Alexander  Hamilton.      (New 

York:  Putnam.      1921.      Pp.  xx,  353.      $2.50.)  i 

Van  der  Essen,  L.      Contribution  a  I'histoire  du  Port  d'Anvers  et  du  com-  ' 

merce  d'exportation  des  Pays-Bas  vers  I'Espagne  et  le  Portugal  a  I'epoque  ' 
de  Charles-Quint.      (Antwerp:  Imp.  E.  Secelle.      1921.      Pp.  30.) 

Van  Metre,  T.  W.  Economic  history  of  the  United  States.  (New  York:  I 
Henry  Holt  &  Co.  1921.  Pp.  viii,  672.)  | 
The  first  interesting  feature  in  this  new  secondary  text  is  the  absence  ; 
of  lists  of  reading  references.  The  author  believes  that  students  are  \ 
likely  "to  derive  much  more  benefit  from  hunting  for  the  information  than  : 
from  the  information  itself,"  and  that  they  should  therefore  be  taught  ; 
to  compile  their  own  bibliographies  for  the  indispensable  further  reading.  1 
He  does,  however,  append  a  suggestive  list  of  fiction,  travel,  description,  | 
and  biography,  whereby  the  average  student  may  widen  his  acquaintance  '; 
with  such  works.  The  book  also  marks  off  somewhat  different  periods  j 
of  economic  growth  from  those  ordinarily  made.  It  starts  as  usual  with  I 
a  sketch  of  our  natural  resources  and  historic  beginnings,  and  agrees  ' 
with  the  conventional  practice  in  making  the  colonial  era  our  first  eco- 
nomic period,  and  in  dividing  the  changes  since  1873  into  two  periods,  ; 
the  first  characterized  by  large-scale  production  and  competition,  and  the 
second  by  industrial  combination  and  government  regulation.  The  varia-  j 
tion  appears  in  the  treatment  of  the  interval  between  colonial  days  and  | 
recent  times,  which  the  autlior  separates  into  the  following  three  epochs:  ' 
from  1763  to  1819,  during  which  years  foreign  trade  formed  the  economic  i 
activity  of  chief  concern;  from  1819  to  1810,  when  the  "American  system"  ] 
predominated;  and  from  1810  to  1873,  when  westward  expansion  con-  ! 
stituted  the  controlling  economic  influence  that  unified  these  decades. 
These  sections  are  named,  "The  new  nation,"  "The  American  system," 
and  "The  occupation  of  the  Great  West."  Most  of  the  periods  receive 
practically  the  same  amount  of  space,  the  largest  number  of  pages  being  | 
devoted  to  the  development  since  1893.  Our  four  chief  wars  have  been  j 
subordinated  as  phases  of  this  or  that  period;  and  the  aftermath  of  each  1 
one  is  gathered  up  as  a  part  of  the  era  in  which  the  Avar  occurred.  The  j 
economic  aspects  of  the  World  War  are  discussed  witli  considerable  j 
fullness.  I 
Professor  Van  Metre  has  shown  skill  in  subduing  that  irrepressible  ; 
conflict  between  politics  and  economics  that  arises  from  trying  to  deal 
with  both  within  a  single  volume.  The  historical  background  is  not  i 
unduly  condensed.  Some  of  the  paragraphs  indirectly  teach  worthwhile  j 
citizenship.  At  the  end  of  each  chapter  are  a  few  questions  and  topics  '• 
that  one  would  like  to  quote  from  liberally;  and  scattered  through  the  ! 
book  are  maps,  charts,  and  many  illustrations.  The  appendix  contains  j 
a  set  of  statistics  for  use  in  making  charts  and  graphs.  j 

Amelia   C.    Ford. 

ViEiRA  DA  Rocha.      Lc  Portugal  au  travail.      (Paris:  Roger  &  Cie.      1921. 
Pp.  318.) 

VisvEsvARAVA,  M.      Reconstructing  India.      (London:  King.   1921.  Pp.  340. 
7s.  6d.) 

Waters,    C.    M.      A    school    economic    history    of    England.      (New    York: 
Oxford  Univ.  Press.      1920.      Pp.815.) 

It  would   seem   that  economic  history   is   not  yet  generally  taught  in 


1922]  Economic  History  and  Geography  123 

English  secondary  schools.  According  to  the  preface  English  teachers 
are  showing  signs  of  a  desire  to  have  less  political  history  and  more  of 
the  life  and  business  of  the  common  people,  but  textbooks  suitable  for 
students  in  the  secondary  and  continuation  schools  are  lacking.  This 
book  has  been  written  to  meet  this  need.  The  work  covers  the  economic 
development  of  England  from  the  Norman  Conquest  down  to  1750. 

From  the  Conquest  as  a  starting  point,  the  material  is  grouped  accord- 
ing to  centuries,  those  singled  out  for  study  being  the  eleventh,  the 
thirteenth,  the  fourteenth  and  fifteenth  taken  together,  then  the  follow- 
ing ones  in  order  down  to  1750.  As  modern  economic  history  in  England 
begins  in  the  sixteenth  century,  the  most  space  is  given  to  that  period.  In 
each  topic,  the  discussion  follows  three  lines :  the  country,  the  town,  and 
government  policies ;  occasionally  overseas  trade  is  touched  upon,  and 
once  the  medieval  church.  The  book  is  organized  with  the  extremest 
care.  The  chief  ideas  are  so  introduced,  numbered  and  lettered,  and 
summarized  at  the  end  of  each  chapter  that  good  memory  work  ought  to 
make  a  master  of  the  contents.  There  is  an  impressive  list  of  valuable 
illustrations,  many  of  them  early  woodcuts  from  ancient  books.  Most 
of  the  information  included  on  the  position  of  women  at  different 
periods  is  from  yet  unpublished  researches. 

Amelia  C.  Ford. 

Wendel,  H.  C.  M.  The  evolution  of  industrial  freedom  in  Prussia  18J^5- 
1849.      (New  York:  N.  Y.  Univ.  Press.      1921.      Pp.   114.     $3.) 

WiLBUscHEWiTscH,  N.  The  industrial  development  of  Palestine.  Trans- 
lated by  Eden  and  Cedar  Paul.  (London:  Trade  and  Industry  Dept., 
Central   Bureau  of  the  Zionist  Organization.      1921.      Pp.    5i.      2s   6d.) 

Williams,  A.  R.  Through  the  Russian  revolution.  (New  York:  Boni  & 
Liveright.      1921.      Pp.  viii,  311.     $2.) 

William,  M.  The  social  interpretation  of  history.  (Long  Island  City, 
N.  Y.:  Sotery  Pub.  Co.      1921.     Pp.397.     $3.) 

WiLMoT-BuxTON,  E.  M.  A  social  history  of  England.  (New  York:  Button. 
1921.     $2.) 

Anglo-South  American  handbook  for  1921,  incorporating  Mexico  and  Cen- 
tral America.  Edited  by  W.  H.  Koebel.  (London:  Federation  of  British 
Industries.      1921.      Pp.  cxiv,  929.) 

Austria  to-day.  Supplement  to  the  Annals,  November,  1921.  (Phila- 
delphia, Pa.:  Am.  Academy  of  Polit.  and  Social  Science.      1921.      Pp.  74.) 

Economic  development  of  the  Argentine  Republic  in  the  last  fifty  years. 
(Buenos  Aires:  Ernesto  Tornquist  &  Co.      1919.      Pp.  xix,  328.) 

Economic  rights  in  mandated  territories :  correspondence  between  H.  M.'s 
Government  and  the  United  States  ambassador.  ^lisc.  no.  10.  (London: 
H.  M.  Stationery  Office.      1921.      13s.  2d.) 

Hageland.  Zijne  plattelandsche  bevolhing  in  de  XIXe  eeuxc.  (Brussels: 
Lamertin-Hayez.      1921.      Pp.  490.) 

A  half  century  of  achievement;  a  booh  commemorating  the  fiftieth  anniver- 
sary of  the  establishment  by  F.  P.  Sheldon  of  the  firm  now  known  as 
F.  P.  Sheldon  4^  Son.  (Providence,  R.  I.:  F.  P.  Sheldon  &  Son.  1921. 
Pp.  101.) 


124)  Reviews  and  New  Book's  [March 

Heaton's  annual.  The  commercial  handbook  of  Canada  and  Board  of  Trade 
register.  Seventeenth  year.  (Toronto,  Canada:  Heaton's  Agency.  1921. 
Pp.  550.      $2.) 

Liberal  year  book  for  1921.  Seventeeiith  year.  (London:  Liberal  Publi- 
cation Dept.      1921.      Pp.  300.      Is.  6d.) 

O^ir  situation  today — a  country-wide  economic  survey.  (New  York:  Am. 
Bankers  Assoc.      1921.      Pp.  84.) 

Proceedings  of  the  Hague  Peace  Conferences.  The  Conferences  of  1907. 
Vol.  II,  Meetings  of  the  First  Commission.  Vol.  Ill,  Meetings  of  the 
Second,  Third,  and  Fourth  Commissions.  Publications  of  the  Carnegie 
Endowment  for  International  Peace,  James  Brown  Scott,  director. 
(New  York:  Oxford  Univ.  Press.      1921.      Pp.  Ixxxi,  1086,  1162.) 

Reports  presented  to  the  General  Congress  of  Russian  Manufacturers  and 
Merchants.      (Paris:  Imp.  Rirachovski,  5,  Rue  des  Gobelins.      1921.) 

Die  Sanktionen  der  Ruin  des  Rheinischen  Wirtschaftslebens.  (Cologne: 
Buchdruckerei  von  J.  B.  Helmann.      1921.) 

Statistical  view  of  ninety-one  years'  progress  in  Western  Australia,  1829 
to  1920.      (Perth,  Western  Australia:  Fred  Simpson.      1921.     9s.) 

T>.  A.  Thomas,  Viscount  Rhondda.  By  his  daughter  and  others.  (London: 
Longmans.      1921.      21s.) 

His  record  as  a  coal  owner,  Mr.  David  Evans  says,  "resumes  the 
industrial  development  of  the  period;  illustrates  the  movement  of  capit- 
alism towards  combination,  as  well  as  the  struggles  between  Capital  and 
Labour  that  marked  the  transition.  To  Labour  in  South  Wales  D.  A. 
Thomas  stood  for  capitalism  as  no  other  man  did." 

Treaties  and  agreements  with  and  concerning  China,  189Jf.-1919.  Vol.  I, 
Manchu  period  (189^-1911).  Vol.  II,  Republican  period  (1912-1919). 
Compiled  and  edited  by  John  V.  A.  MacMurray.  Publications  of  the 
Carnegie  Endowment  for  International  Peace,  Division  of  International 
Law.      (New  York:  Oxford  Univ.  Press.      1921.      Pp.  xli,  928;   800.) 

Contains  many  documents  relating  to  commercial  conventions  and 
agreements.  These  include  treaties  and  agreements  of  other  countries 
as  well  as  the  United  States  and  China. 

Agriculture,  Mining,  Forestry  and  Fisheries 

NEW    BOOKS 

Barker,  A.  The  British  corn  trade  from  the  earliest  times  to  the  present 
day.      (New  York:  Pitman.      1921.      Pp.  viii,  132.) 

BizzELL,  W.  B.  Farm  tenantry  in  the  United  States.  A  study  of  farm 
tenantry  and  its  economic  and  social  consequences  on  rural  welfare  with 
special  reference  to  conditions  in  the  South  and  Southtvest.  (College 
Station,  Texas :  Tex.  Agri.  Experiment  Station.  Division  of  Farm  and 
Rancli  Economics,  bull.  278.      1921.      Pp.  408.) 

BoRET,  V.      Pour  et  par  la  terre.      (Paris:  Payot.      1921.) 

Bowles,  C.  E.  The  petroleum  industry.  (Kansas  City,  Mo.:  Schooley 
Stationery  &  Printing  Co.      1921.      Pp.  xv,  189.) 


1922]  Agriculture,  Mining,  Forest ry,  and  Fisheries  125 

Boyle,   J.    E.      The   laxv   of   supply    and   demand   and   the   wheat    market. 

(Washington:  Dept.   of  Agri.,  Bureau  of  Markets  and  Crop   Estimates. 

1921.) 
Boyle,   J.    E.     Rural   problems   in    the    United   States.      (Chicago:    A.    C. 

McClurg.      1921.      Pp.  142.      $1.) 

Derrick,  S.  M.  Farm  tenure  in  South  Carolina.  Bull.  no.  89.  (Colum- 
bia, S.  C:  University  of  South  Carolina.      1920.      Pp.  32.) 

Doyle,  K.  D.  Agriculture  and  irrigation  in  continental  and  tropical 
climates.      (New  York:  Dutton.      1921.      Pp.  xv,  268.     $7.50.) 

EucKEN,  W.  Die  Sticktsoffversorgung  der  Welt.  Eine  volksrvirtschaft- 
liche   Untersuchung.      (Berlin:   Deutsche   Verlags-Anstalt.      1921.) 

Gilbert,  C.  G.  and  Pogue,  J.  E.  America's  power  resources:  the  economic 
significance  of  coal,  oil,  and  water-power.  (New  York:  Century.  1921. 
Pp.  xiv,  325.     $2.50.) 

Waste  of  power  resources  occurs  not  only  in  losses  in  mining  and 
transportation,  nor  in  the  improper  methods  of  consumption  in  home  and 
factory,  but  in  the  lack  of  coordination  of  the  uses  of  power  resources, 
and  in  the  failure  to  develop  ancillary  industries  which  might  employ 
other  valuable  products  which  are  contained  in  these  substances.  Coal 
is  something  more  than  stored-up  energy ;  it  is  the  source  of  a  multitude 
of  products,  which  now  largely  go  to  waste  because  of  the  single  use  to 
which  the  raw  material  is  put.  The  "present  utilization  of  coal,  there- 
fore, involves  a  very  low  recovery  of  the  energy  content  and  an  almost 
total  loss  of  the  commodity  values  present.  This,  of  course,  necessitates 
the  production,  transportation,  and  distribution  of  a  much  larger  quantity 
than  would  otherwise  be  required"  (p.  65).  It  also  "requires  the 
imports  of  materials  which  might  be  manufactured  from  the  non-energy 
components;  holds  back  the  development  of  latent  possibilities  of  coal 
products ;  besmears  with  dirt  and  smoke  an  untold  wealth  in  civic  im- 
provements"  (p.  65). 

This  problem  is  also  connected  with  the  distribution  of  power,  the  local- 
ization of  industries,  and  with  coordination  of  the  enterprises  of  the 
country.  As  the  result,  "we  have  permitted,  unchecked,  the  development 
of  harmful  concentrations  of  industrial  activities  in  limited  areas  favored 
with  fuel,  to  the  creation  and  aggravation  of  labor  problems  that  seem 
insolvable"  (p.  313).  What  is  needed,  therefore,  is  a  coordinated  devel- 
opment of  our  energy  resources,  a  system  of  production  for  our  energy 
materials  which  will  be  in  harmony  with  the  geographical  occurrence  of 
the  varied  power  resources,  the  development  of  a  common-carrier  svstem 
for  energy  transportation,  a  revision  of  methods  of  utilization  of  energy 
materials  to  insure  both  a  higher  recovery  of  the  energy  content  and  of 
the  latent  commodity  values,  and  a  "weaving  together,  a  coordination,  of 
the  entire  field."  This  is  not  a  matter  of  government  ownership  or 
operation.  "No  single  formula  will  suffice"  (p.  316).  "The  real  need 
is  for  a  revision  in  the  basic  economics  of  energy  supply,  not  for  a  mere 
shifting  of  control  from  one  set  of  hands  to  another"  (p.  318).  Far  from 
encouraging  the  concentration  which  is  necessary  to  bring  about  the 
desirable  results,  the  policy  of  the  government  thus  far  has  opposed  this 
end. 

The  volume  presents  a  new  point  of  view  on  the  utilization  of  resources. 
It  is  a  treatment  of  the  broader  aspect  of  the  conservation  problem  as 


126  Reviews  and  New  Books  [March 

applied  to  energy.  The  treatise  is  both  interesting  and  stimulating,  and 
should  be  read  by  those  who  are  concerned  with  the  devising  of  the 
economic  policy  of  the  country. 

Isaac  Lippincott. 

GoNNARD,  R.  La  reforme  agraire  dans  les  pays  de  I'Europe  centrale. 
(Paris:  Bureaux  de  la  Revue  Politique  et  Parlementaire.     1921.    Pp.  21.) 

GooDALE,  S.  L.,  compiler.  Chronology  of  iron  and  steel.  Edited  by  J.  R. 
Speer.  (Pittsburgh,  Pa.:  Pittsburgh  Iron  &  Steel  Foundries  Co.  1920. 
Pp.  294.) 

Gray,  L.  C.  Helping  landless  farmers  to  own  farms.  Yearbook  separate 
844.      (Washington:  Dept.  of  Agri.      1921.      Pp.   17.      5c.) 

Matthews,  F.  Commercial  commodities.  (New  York:  Pitman.  1921. 
Pp.  vii,  319.     $2.50.) 

Osborne,  S.  Die  oherscldesische  Frage  und  das  deutsche  Kohlenproblem. 
Second  edition.      (Berlin:  Georg  Stilke.      1921.      Pp.  304.) 

PoGUE,  J.  E.  The  economics  of  petroleum.  (New  York:  Wiley.  1921. 
Pp.  ix,  375.     $6.) 

RousH,  G.  A.      The  mineral  industry.      (New  York:  McGraw-Hill.      1920. 

Pp.  938.     $10.) 

Wilson,  C,  compiler.  Wilson's  mining  laws.  United  States;  Arizona,  Cali- 
fornia, Colorado,  Nevada,  Oregon  and  Utah.  (Los  Angeles,  Calif. : 
Fletcher  Ford  Co.      1921.     Pp.  240.) 

Woods,  K.  S.  The  rural  industries  round  Oxford.  A  survey  made  on 
behalf  of  the  Institute  for  Research  in  Agricultural  Economics.  (Ox- 
ford: Clarendon  Press.      1921.      Pp.  180.) 

Commercial  atlas  of  foreign  countries.  Second  edition.  (Chicago:  Rand 
McNally.      1921.     $35.) 

Fur  farms,  1920.  (Ottawa,  Canada:  Dominion  Bureau  of  Statistics.  1921. 
Pp.  23.) 

Raw  material  situation  in  the  United  States.  (Paris:  International  Cham- 
ber of  Commerce,  33,  Rue  Jean  Goujon.      1921.      Pp.  20.) 

The  Swedish  agricultural  laborer.  (Stockholm:  Swedish  Government  Dele- 
gation for  International  Collaboration  in  Social  Politics.      1921.   Pp.  94.) 

United  States  Department  of  Agricidture,  Yearbook,  1920.  (Washington: 
Dept.  of  Agri.      1921.      Pp.  888.) 

Manufacturing  Industries 

NEW   BOOKS 

AvREs,  L.  P.  The  automobile  industry  and  its  future.  (Cleveland,  Ohio: 
Cleveland  Trust  Co.      1921.      Pp.  32.) 

Forrester,  R.  B.  llie  cotton  industry  in  France:  a  report  to  the  electors 
of  the  Gartside  scholarships.  With  an  introduction  by  D.  H.  Mac- 
Gregor.      (New  York:  Longmans.      1921.      Pp.  xvi,  142."    $3.75.) 

LiPsoN,  E.  The  history  of  the  woollen  and  rcorsted  industries.  (London: 
A.  and  C.  Black.      1921.      Pp.  x,  273.) 


1922]  Transportation  and  Communication  127 

Transportation  and  Communication 

The  American  Railroad  Problem,  a  Study  in  War  and  Reconstruction. 
By  I.  Leo  Sharfmax.  (New  York:  The  Centur>^  Company. 
1921.     Pp.  ix,  474?.     $3.00.) 

After  a  brief  review  of  the  conditions  under  which  railroads  were 
constructed,  operated,  and  regulated  prior  to  the  Great  War,  Professor 
Sharfman  develops  in  great  detail  and  with  illuminating  comment  the 
difficulties  under  which  the  railroads  operated  under  private  manage- 
ment during  the  first  year  of  the  war ;  the  problems  confronting  the 
government  in  its  operation  during  the  war,  and  the  way  the  difficulties 
were  met.  Then  follows  a  discussion  of  the  essential  elements  under- 
lying a  reconstructive  policy,  with  an  analysis  of  the  Transportation 
act  of  1920. 

There  are  three  outstanding  features  in  his  review:  first,  a  just 
appreciation  of  the  importance  of  the  labor  problem  in  solving  the 
railroad  problem ;  secondly,  the  development  of  the  fundamental  prob- 
lem of  the  relation  of  rates  and  finance  to  service,  the  ultimate  function 
of  transportation;  and  thii-dly,  the  tendency  of  regulation  as  it 
becomes  more  extended  to  usurp  the  functions  of  railroad  management, 
with  the  result  of  a  tendency  towards  unification  of  practices  and 
perhaps  the  eventual  nationalization  of  railroads. 

The  discussion  of  labor  is  the  most  important  contribution  to  the 
subject  of  railroad  adjustments.  The  author  very  rightly  calls  atten- 
tion to  the  fact  that  the  labor  problem  has  not  received  the  attention 
which  it  ought  to  receive  in  Avorking  out  any  constructive  program  of 
regulation.  The  problem  of  labor  was  thrust  upon  the  Railroad  Ad- 
ministration at  the  outset,  and  the  author  gives  a  very  interesting 
and,  on  the  whole,  accurate  account  of  the  part  which  labor  played 
during  government  control.  No  function  of  the  Railroad  Administra- 
tion has  been  more  criticised  than  its  handling  of  the  labor  problem. 
The  writer  shows,  however,  that  the  wage  advances  were  practically  all 
determined  by  an  independent  wage  board,  of  which  Secretary  Lane 
was  chairman.  It  is  not  the  basic  rate  of  wages  which  has  come  in 
for  the  greatest  amount  of  criticism,  but  rather  the  so-called  national 
agreements  regulating  the  conditions  of  labor.  Many  of  the  agree- 
ments with  labor  were  unjustifiable,  and  were  adopted  under  conditions 
which  reflect  little  credit  upon  the  Railroad  Administration.  The  Ad- 
ministration was  represented  in  its  negotiations  with  the  organizations 
by  labor  men,  some  of  whom  were  on  leave  of  absence  from  their  brother- 
hoods. The  point  of  view  of  management  was  not  represented,  and 
it  is  no  wonder  that  labor  got  about  what  it  wanted.  The  author  makes 
no  mention  of  this.  The  deceptive  nature  of  the  Adamson  law  and  the 
circumstances  under  which  it  was  enacted  are  treated  altogether  too 


128  Reviews  and  New  Books  [March 

tenderly.  The  act  purports  to  regulate  the  hours  of  service,  whereas 
in  fact  it  simply  is  a  means  of  regulating  wages.  Even  President 
Wilson  attempted  to  defend  it  as  an  hours-of-service  act.  As  a  matter 
of  fact  it  simply  made  eight  hours  as  the  basis  for  a  day's  pay. 

The  general  treatment  of  the  important  place  which  the  labor  prob- 
lem should  have  in  any  general  regulatory  system  is  most  timely  and 
the  conclusions  are  wise.  Labor  must  be  treated  fairly  and  there  must 
be  an  opportunity  to  refer  complaints  to  an  independent  tribunal.  The 
greatest  care  and  thought  must  be  given  to  the  organization  of  such  a 
tribunal.  With  the  establishment  of  a  trusted  and  efficient  labor  board 
"the  transportation  workers  must  definitely  accept  the  necessity  of 
curtailing  their  absolute  freedom  of  action  in  the  railroad  industry." 

The  second  important  feature  which  is  developed  was  the  inadequacy 
of  regulation  to  establish  the  credit  of  the  railroads  prior  to  the 
passage  of  the  Transportation  act.  Regulation  has  been  repressive 
and  corrective  rather  than  constructive  and  helpful.  To  the  extent 
that  it  was  framed  for  the  elimination  of  evils  it  has  been  successful; 
but  it  has  offered  nothing  in  the  way  of  a  constructive  policy  looking 
to  the  strengthening  of  service.  The  real  problem,  namely,  that  of 
the  weak  and  the  strong  roads  is  fully  developed  and  various  remedies 
discussed,  and  the  use  of  excess  earnings  of  the  strong  roads  to  assist 
the  weak  roads  is  justified.  The  Transportation  act  is  based  upon  this 
fundamental  conception,  but  the  business  and  traffic  conditions  have 
been  so  abnormal  since  its  passage  that  its  effectiveness  has  had  no 
opportunity  to  be  demonstrated. 

The  advocates  of  government  operation  will  not  be  greatly  displeased 
with  the  book,  and  somehow  when  one  has  finished  reading  it  he  has  a 
feeling  that  it  is  not  going  to  be  long  before  the  author  becomes  an 
advocate  of  nationalization  of  railroads.  Apparently  he  is  tending  in 
this  direction  not  because  of  any  crude  theory  of  the  right  of  the 
public  to  operate  its  utilities,  but  by  the  logic  of  events.  Competition 
is  wasteful ;  competition  has  been  tried  but  is  gradually  being  re- 
strained. With  the  gradual  elimination  of  competition  comes  the 
necessity  for  stricter  public  supervision,  so  that  now  the  regulatory 
bodies  are  becoming  managers  as  well  as  regulators  of  railroads.  The 
reason  for  private  ownership  is  that  better  results  are  secured  by  the 
full  operation  of  private  initiative.  By  the  extension  of  regulation 
private  initiative  is  greatly  lessened,  and  thus  the  principal  reason  for 
private  operation  becomes  weaker  and  weaker.  This  is  the  language, 
too,  of  the  railroad  executive,  Avho  claims  that  he  has  no  freedom  of 
action ;  that  his  income  is  regulated  by  the  public  and  that  his  expenses 
are  largely  regulated  in  the  same  way. 

It  is  quite  the  trend  of  economic  thought  to  favor  the  elimination 
of  competition  in  the  operation  of  public  utilities.     Unquestionably, 


1922]  Transportation  and  Communication  129 

we  desire  monopoly  in  the  telephone  service  and  in  the  operation  of 
localized  utilities,  but  full  appreciation  is  not  given  to  the  benefits  of 
competition  in  transportation.  If  we  can  restrain  destructive  competi- 
tion and  at  the  same  time  maintain  helpful  competition,  which  is  largely 
competition  in  service,  we  shall  still  give  a  field  for  the  operation  of 
private  initiative.  We  should  resolutely  face  the  problem  of  strength- 
ening private  initiative,  even  if  thereby  we  have  to  relax  the  rigors 
of  public  regulation.  Professor  Sharfman  is  quite  right  in  pointing 
out  the  inevitable  tendency  towards  nationalization  and  government 
operation  unless  something  is  done  to  increase  the  enterprise  of  the 
railroad  managers. 

The  book  deals  with  matters  of  railroad  operation  during  the  last 
few  years  presenting  information  which  is  not  easily  accessible,  but 
more  fundamental  is  the  calm  and  thoughtful  comment  running  through 
the  entire  historical  development.  The  book  is  timely,  adequate,  and 
immensely  helpful  in  comprehending  our  great  railroad  problem. 

Edgar  J.  Rich. 

XEW    BOOKS 

Atterbury,  W.  W.  Let  railroad  men  run  the  railroad  business.  (Phila- 
delphia: Pennsylvania  Railroad  System.      1921.      Pp.   14.) 

Clapp,  E.  J.  Charleston  port  survey,  1921.  (New  York:  Author,  50 
Vanderbilt  Ave.      1921.      Pp.  288.) 

Groener.  Die  Eisenbahn  als  Faktor  der  Politik.  (Stuttgart:  Ferdinand 
Enke.      1921.     Pp.  13.     3.60  M.) 

VON  KiENiTZ,  R.  Technik  mid  RechtsJcundc  in  der  Eisenbahnverzcaltung. 
(Berlin:  Julius  Springer.      1921.      Pp.  30.) 

Lane,  F.  Van  Z.  Motor  truck  transportation.  The  principles  governing 
its  success.      (New  York:  N.  Y.  Univ.  Press.      1921.      Pp.  159.     $2.) 

McKay,  C.  W.  Telephone  rates  and  values.  (Boston:  Cornhill  Pub.  Co. 
1921.      Pp.  245.) 

MiLLAUD,  R.     Les  chemins  de  fer.      (Paris:   Hachette.      1921.      Pp.    189.) 
Olariaga,  L.     La  cuestion  de  las  tarifas  y  el  problema  ferroviario  Espanol. 
(Madrid:  Calpe.      1921.      Pp.243.) 

Oldham,  J.  E.  A  j)lan  for  railroad  consolidations,  including  a  discussion 
of  their  purpose  and  practicability.  (Chicago:  Investment  Bankers 
Assoc,  of  America.      1921.      Pp.  64.) 

ToLLEY,  H.  R.  and  Church,  L.  M.  Motor  trucks  on  eastern  farms. 
Farmers'  bull.  1201.  (Washington:  Dept.  of  Agriculture.  1921.  Pp. 
23.) 

Walden,  C.  F.,  compiler.  Freight  traffic  guide:  compilation  of  the  rides, 
regulations,  laxvs,  and  practices  tchich  govern  interstate  transportation 
of  freight,  express,  and  parcel  post.  (New  York:  Y.  M.  C.  A.  Press. 
1921.      Pp.  xxxvi,  361.) 

— — — .      Fundamentals  of  transportation.      (New  York:  Y.  M.  C.  A. 

Press.      1921.      Pp.  xv,  157.) 


130  Reviews  and  New  Books  [March 

Williams,  H.  G.  and  Fagg,  C.  J.,  compilers.  The  freight  traffic  red  book 
for  those  actively  engaged  in  traffic  work.  1922  edition.  (New  York: 
The  Traffic  Pub.  Co.,  150  Lafayette  St.      1922.     $6.) 

ZiMMERMANN,  E.  W.  Zimmermann  on  ocean  shipping.  (New  York:  Pren- 
tice-Hall.     1921.      Pp.  691.) 

Eleventh  annual  report  on  the  statistics  of  express  companies  in  the  United 
States,  December,  1920.  (Washington:  Interstate  Commerce  Commis- 
sion, Bureau  of  Statistics.     1921.     Pp.  12.) 

The  Interstate  Commerce  act,  including  text  of  related  sections  of  various 
acts,  revised  to  August  1,  1921.  (Washington:  Interstate  Commerce 
Commission.      1921.     20c.) 

Port  of  Baltimore.  (Baltimore,  Md. :  Export  and  Import  Board  of  Trade, 
106  S.  Gay  St.     1921.     Pp.  63.) 

Ship  operating  costs  at  the  port  of  Baltimore.  (Baltimore,  Md. :  Export 
and  Import  Board  of  Trade.      1920.      Pp.  5.) 

The  Shipping  Board  and  our  merchant  marine.  (New  York:  Mechanics  & 
Metals  National  Bank.     1921.     Pp.  35.) 

Telephone  service.  Circular  no.  112.  (Washington:  U.  S.  Bureau  of 
Standards.      1921.      Pp.  214.) 

Traffic  geography.  Fourth  edition.  (Chicago:  American  Commerce  Assoc. 
1921.      Pp.  xi,  321.) 

Trade,  Commerce,  and  Commercial  Crises 

MarJceting  Agricultural  Products.  By  Benjamin  Horace  Hibbard. 
(New  York:  1).  xVppleton  and  Company.  1921.  Pp.  xv,  389. 
$2.50.) 

A  certain  foreign  student  of  agricultural  marketing  who  last  year 
spent  several  months  out  in  the  states  among  the  farmers  and  county 
agents,  brought  back  the  report  that  in  Wisconsin  he  found  more 
healthy  sentiment  and  honest  understanding  with  respect  to  marketing 
problems  than  in  almost  any  other  state  he  visited.  Foremost  among 
the  reasons  for  this  is  the  fact  that  during  the  past  nine  years  probably 
a  thousand  young  men  have  gone  out  into  the  state  as  farmers,  teachers 
and  extension  workers  who  have  taken  lectures  on  marketing  at  the 
University  of  Wisconsin  under  Professor  Hibbard.  The  present  book 
is  the  outcome  of  a  course  which  for  many  years  Professor  Hibbard 
gave  under  the  name  of  Codpcration  and  Marl'eting.  Like  the  course 
itself,  the  book  really  gives  major  emphasis  to  farmers'  movements  and 
to  cooperation.  Marketing  as  such  occu})ies  onl}'  the  first  one  hundred 
and  eighty  ]iagcs  of  the  book. 

No  doubt  tlie  reason  tliat  Professor  Hibbard  has  given  so  much 
attention  to  the  history  of  farmers'  movements  (part  II)  in  a  course 
and  a  treatise  on  marketing  is  that  he  believes  that  the  story  of  the 
various  attempts  and  failures  of  the  farmers  to  solve  their  marketing 


1922]  Trade,  Commerce,  and  Commercial  Crises  131 

problems  in  the  past  is  the  most  valuable  instruction  anywhere  to  be 
obtained.  History  shall  not  repeat  itself.  There  will  be  many,  how- 
ever, who  will  hold  that  the  limited  space  available  in  a  book  of  less 
than  four  hundred  pages  would  be  better  utilized  if  more  of  it  was 
devoted  to  the  principles  of  marketing.  And  yet,  as  indicated,  Pro- 
fessor Hibbard's  method  seems  to  have  given  good  results  in  the 
classroom  and  at  large. 

Part  III  is  devoted  to  cooperative  marketing.  The  general  form 
and  the  essential  characters  of  the  successful  cooperative  organization 
are  well  analyzed.  The  last  five  chapters  discuss  the  organization  and 
business  practices  of  the  cooperative  agencies  marketing  grain,  live- 
stock, and  the  other  farm  products.  Considerable  of  the  material  pre- 
sented in  these  chapters  is  the  same  as  is  included  in  chapters  on  the 
marketing  of  grain,  or  livestock,  or  wool  in  the  regular  textbooks. 

No  field  in  economics  is  generally  recognized  by  economists  as  more 
important  than  marketing.  However,  thus  far  it  has  attracted  rela- 
tively few  students.  To  the  truth  of  this  statement  anyone  will 
testify  who  has  recently  been  looking  for  properly  trained  young  men 
ready  and  willing  to  work  in  this  field.  In  despair,  a  number  of  im- 
portant departments  of  economics  have  fallen  back  upon  men  who  have 
come  into  the  field  through  journalism,  advertising,  salesmanship,  or 
practical  experience.  When  encouraged  to  work  in  marketing,  our 
promising  graduate  students  in  economics  have  frequently  told  us  that 
the  subject  seemed  to  them  to  be  largely  descriptive,  and  to  present  no 
important  theoretical  problems. 

Hence  it  is  with  peculiar  interest  that  one  reads  in  Professor  Hib- 
bard's preface:  "The  facts  and  descriptions  of  the  marketing  process 
are  more  readily  obtainable  than  are  discussions  of  principles.  It  has 
been  my  purpose  to  discuss  principles,  using  facts  and  descriptions  as 
needed  for  illustrative  purposes."  And  one's  expectations  are  in  part 
realized.  Part  I  is  in  considerable  measure  a  presentation  of  prin- 
ciples. In  fact,  one  can  go  so  far  as  to  say  that  it  is  by  all  means 
the  most  complete  discussion  of  the  principles  of  marketing  that  has 
thus  far  appeared.  This  book  easily  does  more  to  win  the  respect  of 
economists  for  the  subject  of  marketing  than  any  book  written  in  this 
country  on  the  subject. 

But  here  one  must  stop.  No  part  of  economic  theory  is  more  under 
attack  than  the  theory  of  price.  Any  important  contribution  to  the 
theory  of  price  must  necessarily  come  from  a  study  of  the  market. 
Chapters  14  and  15  devote  twenty  pages  to  the  subject  of  price, 
presenting  for  the  most  part  various  practical  programs  for  the  con- 
trolling of  price,  or  certain  ordinary  observations  with  respect  to  the 
relation  between  costs  and  price.  Little  is  said  of  anything  which 
bears   upon   the   moot    points    of   price   theory.     Another   theoretical 


132  Reviews  and  New  Books  [March 

consideration  of  great  interest  is  the  incidence  of  various  marketing 
costs.  Chapter  6  has  several  pages  of  analysis,  excellent  as  far  as  it 
goes,  of  just  one  of  these  costs — transportation.  Nothing  would  be 
more  welcome  to  marketing  men  at  the  present  moment  than  a  thorough- 
going analysis  of  marketing  organization  in  the  abstract.  The  con- 
troversy recently  waged  as  to  integrated  marketing  has  to  do  with  only 
one  of  a  large  number  of  problems  in  this  field.  Nearly  all  that  is  said 
on  this  subject  in  the  present  volume  is  introduced  as  a  phase  of  co- 
operative organization. 

One  could  ver^^  easily  be  unfair  to  the  author  of  Marketing  Agricul- 
tural Products  in  the  respects  just  mentioned.  For  the  most  part, 
the  theoretical  analysis  we  should  like  has  not  yet  been  developed. 
Furthermore,  no  one  man  working  in  the  field  of  marketing  is  likely  to 
develop  more  than  a  part  of  it.  What  is  proper  to  say  here  is  that 
one  can  only  regret  that  Professor  Hibbard  has  not  expanded  the  one 
hundred  and  eighty  pages  of  discussion  of  principles  into  a  whole 
volume,  leaving  his  discussion  of  farmers'  movements  and  the  like  for 
another  occasion.  Until  this  is  done,  those  who  are  interested  in  the 
teaching  of  marketing  as  a  body  of  principles  will  probably  resort  to 
using  part  I  of  the  present  volume  as  a  general  framework,  filling 
in  the  gaps  from  whatever  sources  are  available. 

Is  it  proper  to  remark  at  this  point  that  perhaps  with  this  volume 
we  have  had  enough  for  a  while  of  general  treatises  on  marketing.'^ 
What  we  need  now  is  a  large  number  of  careful,  detailed  studies  of 
various  phases  of  marketing,  particularl}?^  the  three  above  mentioned. 
Until  this  is  done,  it  is  doubtful  if  anyone  else  can  improve  greatly 
upon  what  we  now  have.  There  is  no  use  in  repeating  in  one  textbook 
after  another  the  old  generalizations  about  marketing.  Even  Professor 
Hibbard's  fresh  easy  style  docs  not  entireU^  save  the  present  volume 
from  sounding  platitudinous.  Fundamental  to  a  program  such  as 
just  indicated  is  a  large  amount  of  careful  research  work.  It  begins 
to  look  as  if  we  were  at  last  going  to  get  research  work  of  the  type 
needed  from  the  now  reorganized  United  States  Bureau  of  Markets. 

John  D.  Black. 

University  of  Minnesota, 

NEW    BOOKS 

Berliner,  S.  Organisation  und  Betrieb  des  Export-Geschcifts  in  China. 
I,  Allgemeiner  Tcil  und  Buchfiihrung.  Two  vols.  (Hanover:  Hahn.  1920. 
Pp.  167,  131.     21;  16.80  M.) 

Blum,  O.  Der  Wclivcrhehr  vnd  seine  Technik  im  20.  Jahrhundert.  Vols. 
I  and  II.  (Stuttgart:  Deutsche  Verlagsanstalt.  1921.  Pp.  viii,  300; 
vi,.  309.      72  M.) 

Booker,  W.     Drr    W cltxcarenliandel    nnd    seine    jtiristisch-rvirtschaftliche 


1922]  Trade,  Commerce,  and  Commercial  Crises  133 

Gestaltung.      (Berlin:    Puttkammer   &    Miihlbrecht.      1921.      Pp.    iv,    96. 
16.50  M.) 

Cole,  E.  W.  Fundamental  principles  in  marketing  farm  products.  (Austin, 
Texas:  State  Dept.  of  Agri.,  Bureau  of  Markets.      1921.) 

Danos,  G.  L'idee  de  I' autarchic  economique  et  les  statistiques  du  commerce 
exterieur.      (Paris:  Recueil  Sirey.      1921.      Pp.  92.) 

Gervais,  p.  and  Gouy,  P.     L'exportation  des  vins.      (Paris:  Payot.  1921.) 
Hough,   B.   O.     Practical   exporting;   a  handbook   for  manufacturers   and 

merchants.     Seventh   edition.      (New   York:   Johnston   Export   Pub.    Co. 

1921.      Pp.  529.) 

IvEY,  P.  W.  Principles  of  marketing.  A  textbook  for  colleges  and  schools 
of  business  administration.      (New  York:  Ronald.      1921.     Pp.  351.) 

Lehfreund,  L.  Die  Entxcicklung  der  deutsch-russischen  Handelsbezieh- 
ungen.      (Leipzig:  Bitterling.      1921.      Pp.  105.      10  M.) 

Marizis,  J.  Les  societes  cooperatives  de  reconstruction.  (Paris:  Tail- 
landier.      1921.     2  fr.) 

Mathies,  O.  Die  stdndigen  Schiedsgerichte  des  Hamburger  Grosshandels. 
(Braunschweig:  Georg  Westermann.      1921.      Pp.  204.) 

Mayr,  R.  Lehrbuch  der  Handelsgeschichte  auf  Grundlage  der  Sozial-  und 
Wirtschaftsgeschichte.  Fifth  edition.  (Vienna:  Alfred  Holder.  1921. 
Pp.  297.     24  M.) 

Pesl,  L.  D.  Das  Dumping.  Preisunterbietungen  im  Welthandel.  (Mu- 
nich: J.  Schweitzer  Verlag.      1921.      Pp.  vii,  139.) 

Possberg,  H.  Die  neuere  Entwicklung  des  Kohlenmarktes  in  Deutschland. 
(Berlin:  Verlag  Deutsche  Kohlenzeitung.      1921.      Pp.  140.) 

Rawley,  R.  C.  The  silk  industry  and  trade.  (London:  King.  1921. 
10s.  6d.) 

Robertson,  J.  Robertson's  universal  method.  Q.  E.  D.  For  export  and 
import  trade.  (London:  Scott,  Armstrong  &  Co.,  79  Coleman  St.,  E.  C. 
2.      1921.     2s.  6d.) 

Sieger,  R.  and  others.  Produktion,  Verkehr  und  Handel  in  der  Weltxvirt- 
schaft.      (Vienna:  Seidel.      1921.      Pp.  xv,  680.      110  M.) 

Smith,  A.  M.  The  British  in  China  and  Far  Eastern  trade.  (New  York: 
Button.      1921.     $7.) 

White,  P.  Market  analysis,  its  principles  and  methods.  (New  York: 
McGraw-Hill  Book  Co.     1921.     Pp.  340.     $3.50.) 

Anuario  de  la  America  Latina.  Vols.  I  and  II.  Third  year.  (Barcelona: 
Bailly-Bailliere-Riera.      1921.      Pp.  1332,  1002.) 

Foreign  commerce  and  navigation  of  the  United  States  for  the  calendar  year 
1920.  U.  S.  Dept.  of  Commerce,  Bureau  of  Foreign  and  Domestic  Com- 
merce. (Washington:  Gov.  Prtg.  Office,  Supt.  Docs.  1921.  Pp.  viii, 
624.     $1.25.) 

The  governor  and  company  of  adventurers  of  England  trading  into  Hud- 
son's Bay  during  ttco  hundred  and  fifty  years,  1G70-1920.  (London: 
Hudson's  Bay  Co.      1920.      Pp.  129.) 


134  Reviews  and  New  Books  [March 

The  International  Chamber  of  Commerce.  Constitution  and  rules.  An 
explanation  of  its  purpose,  plan,  and  scope.  (Paris:  Intern.  Chamber  of 
Commerce,  33,  Rue  Jean-Goujon.      1921.     Pp.  24;  17.) 

The  international  directory  of  leaders  in  world  trade  of  all  countries; 
an  annual  who's  who.  1921  edition.  (Washington:  American  Bureau  of 
Trade  Extension,  Inc.      1921.      Pp.  728.) 

International  trade.  International  Financial  Conference,  paper  no.  6. 
Printed  for  the  League  of  Nations.  (London:  Harrison  &  Sons.  1921. 
Pp.  68.     2s.) 

Latin  American  foreign  trade  in  1919,  general  survey.  Reprinted  from 
the  January,  1921,  issue  of  the  Bulletin  of  the  Pan  American  Union. 
(Washington:  Gov.  Prtg.  Office,  Supt.  Docs.     1921.     Pp.  12.) 

Stockhohns  handel  och  sjofart,  Statistisk  oversikt  av.  Arg  XIX.  (Stock- 
holm: Beckman.      1921.      Pp.  10,  7.      2  Kr.) 

Trade  of  India  in  1919-1920.  Department  of  Statistics,  India,  no.  1319. 
(Calcutta:  Supt.  Gov.  Printing,  India.      1921.     Pp.  vi,  89.     12  annas.) 

Accounting,  Business  Methods,  Investments,  and  the 

Exchanges 

The  Fundamentals  of  Accounting.  By  William  Morse  Cole.  (Bos- 
ton: Houghton  Mifflin  Company.  1921.  Pp.  xi,  434.  $3.50.) 
Instructors  and  students  of  accounting,  who  are  interested  in  more 
than  the  mechanics  of  the  subject,  will  be  delighted  in  the  publication 
of  this  new  and  comprehensive  text.  The  method  of  the  book,  as  stated 
by  the  author,  is  philosophical.  In  some  ways  the  subject  is  treated  as 
in  Philosophy  of  Accoutits  by  the  late  Professor  Sprague.  Inasmuch 
as  the  book  deals  entirely  with  fundamentals  very  little  new  material 
is  presented,  but  old  material  is  presented  in  a  new  and  pedagogically 
sound  way.  In  contrast  with  the  method  used  in  his  previous  volume, 
entitled  Accounts:  Their  Construction  and  Interpretation,  the  author 
has  chosen  the  balance-sheet  method  of  presenting  the  subject.  By  use  of 
"ownership-claim"  to  represent  both  external  and  proprietary  liabili- 
ties, he  works  out  clearly  all  types  of  changes  that  take  place  in  the 
balance  sheet.  In  the  second  chapter  the  author  explains  the  theory  of 
double  entry  and  shows  its  relation  to  these  changes.  Debit  and  credit 
are  discussed  in  the  third  and  fourth  chapters.  At  this  stage  the  "ac- 
count" is  introduced,  and  the  author  shows  the  application  of  the  prin- 
ciples of  double  entry  to  accounts  and  to  the  balance  sheet,  but  not  to 
the  books  of  original  entry.  The  method  used  in  presenting  the  theory 
of  debit  and  credit  is  unique,  and  enables  the  student  to  understand  the 
philosophy  or  real  principles  involved  instead  of  leaving  him  satisfied 
with  mechanical  rules  only.  Yet  working  rules  are  not  omitted,  and 
the  student  may  obtain  thorough  practice  in  applying  those  rules  to 
concrete  transactions. 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       135 

In  chapter  five  the  simple  statement  of  profit  and  loss  is  introduced 
to  explain  the  changes  that  have  taken  place  in  the  balance  sheet.  In 
other  words,  the  income  statement  is  presented  only  when  the  need  of 
additional  statistical  information  is  necessary  to  explain  the  changes  in 
proprietorship.  The  next  two  chapters  discuss  the  operating  state- 
ment, first,  under  cost-accounting  methods,  and,  second,  under  in- 
ventory methods.  The  author  perhaps  over-emphasizes  the  momentary 
accuracy  of  a  balance  sheet,  for  most  accountants  believe  that  in  case  of 
manufacturing  or  mercantile  businesses  a  balance  sheet  can  at  best  be 
only  an  approximation  to  facts.  Therefore,  the  distinction  must  not 
be  too  finely  drawn  that  a  balance  sheet  reflects  the  true  financial  condi- 
tion of  a  business  as  of  a  given  moment  of  time,  but  that  it  fails  to  do 
so  immediately  after  additional  transactions  have  taken  place.  The 
author  bases  his  presentation  of  the  principles  of  accounting  on  the 
premise  "that  expenditures  are  not  made  ordinarily  in  vain,  but  for  a 
return,  and  that  therefore  the  assets  given  up  in  one  form  are  received 
back  in  another"  through  conversion  by  business  processes.  This  is 
true  not  only  in  manufacturing,  but  also  in  all  business  activities.  By 
such  an  approach  the  fundamental  principles  of  accounting  are  pre- 
sented through  what  is  ordinarily  termed  the  cost-accounting  method. 

The  almost  complete  elimination  of  nominal  accounts  has  dispensed 
with  one  of  the  most  difficult  problems  that  confronts  the  average 
student  or  instructor  in  accounting.  It  is  to  be  regretted,  however, 
that  the  author  has  continued  the  mixed  merchandise  account,  which 
accountants  generally  have  ceased  to  use.  A  writer  on  accounting  may 
either  follozv  current  practice,  or  he  may  advocate  principles  in  antici- 
pation of  future  practice ;  in  the  treatment  of  notes  receivable  dis- 
counted and  of  the  allowance  for  depreciation  the  author  is  in  advance 
of  much  current  practice. 

Not  until  chapter  nine  is  the  mechanics  of  bookkeeping  introduced. 
There  are  three  main  principles  in  bookkeeping,  (a)  the  distinction 
between  debit  and  credit,  (b)  the  principle  of  the  labor-saving  device, 
and  (c)  the  distinction  between  charges  to  capital  and  charges  against 
revenue.  The  principles  of  debit  and  credit  have  been  presented  in  the 
preceding  chapters,  but  in  chapter  nine  the  books  of  original  entry 
are  first  introduced.  In  the  chapters  immediateh'  following,  the  author 
introduces  the  use  of  the  trial  balance,  labor-saving  devices  in  books  of 
original  entry,  labor-saving  devices  in  ledgers,  and  highly  developed  or 
specialized  labor-saving  devices,  such  as  cash  discount  columns,  contra 
entries,  combined  books,  tabular  ledgers,  and  the  voucher  system.  The 
technique  of  closing  the  books  is  presented  in  chapter  fourteen.  The 
journal  entry  method  makes  possible  either  the  conversion  of  operating 
accounts  into  nominal  accounts,  or  the  conversion  of  operating  ac- 
counts into  real  accounts.     Both  methods  are  illustrated.     Whether 


136  Reviews  and  New  Books  [March 

the  journal  entry  method  or  the  direct  cross  entry  method  in  the  ledger 
is  used  may  depend,  as  the  author  states,  less  on  a  matter  of  principle 
than  of  taste  or  adaptation  to  circumstances ;  however,  the  author 
should,  we  believe,  take  some  definite  stand  as  to  the  method  to  be  used. 
Auditors  have  experienced  very  great  difficulty  in  tracing  fraud  if 
cross  entries  have  been  used  in  the  ledger;  for  this  reason  most  public 
accountants  and  many  instructors  in  accounting  have  taken  a  definite 
stand  in  favor  of  the  journal  entry  method  of  closing.  In  chapter 
fifteen  the  author  discusses  other  mechanical  devices,  giving  particular 
attention  to  such  auxiliary  records  as  petty  cash,  the  bill  and  note 
books,  accounts  receivable  and  payable  books,  ticklers,  and  other 
special  statistical  records. 

Some  peculiarities  of  corporation  accounts  are  presented  in  chapter 
sixteen.  Among  the  topics  discussed  are  the  nature  of  capital  ac- 
counts, the  distinction  between  the  issue  and  the  sale  of  capital  stock, 
stock  issued  and  reacquired  by  the  treasury,  and  capital  stock  of  no 
par  value.  The  author  seems  to  take  the  stand  that  treasury  stock 
should  be  shown  in  the  balance  sheet  as  an  asset.  This  is  not  accepted 
as  the  best  practice;  it  is  permissible  when  the  item  of  treasury  stock 
is  substantially  small  in  amount  and  is  held  as  a  temporary  investment 
only.  As  a  general  rule,  all  stock  in  the  possession  of  the  corporation 
which  issues  it  should  be  deducted  from  the  liabilities  side  of  the 
balance  sheet  so  as  to  set  forth  the  number  of  shares  in  the  under- 
taking which  have  really  been  issued  to  and  remain  in  the  hands  of 
the  public  as  of  the  date  of  the  balance  sheet.  Again,  it  would  seem 
that  in  the  discussion  of  no  par  value  stock  the  term  "invested  capital" 
is  not  so  applicable  as  "capital  stock  of  no  par  value,"  or  similar  title, 
because  the  former  term  has  come  to  have  a  very  definite  meaning 
for  taxation  purposes.  Neither  should  it  be  said  that  surplus  will 
always  represent  the  excess  of  net  assets  above  such  investment,  for  the 
reason  that  tlie  shares  are  usually  given  a  nominal  value  and  in  actual 
practice  the  company  often  shows  a  large  capital  surplus  paid  in  at  the 
time  of  the  stock  issue. 

In  chapter  seventeen,  entitled  "Where  do  profits  begin,"  cost  is 
defined,  for  acounting  purposes,  as  "outlay"  and  as  "the  disappearance 
of  value  in  the  acquisition  of  other  value."  It  would  appear,  therefore, 
that  the  author  contradicts  himself  when  in  chapter  twenty-two  he 
endeavors  to  prove  that  interest  on  investment  is,  for  accounting  pur- 
poses, a  part  of  cost.  In  this  volume,  however,  the  author  does  state 
that  the  real  necessit}'  for  including  in  cost  the  interest  on  investment 
is  not  a  financial  reason,  but  in  order  that  comparative  costs  or  statis- 
tical figvires  may  be  obtained  as  between  different  departments  or 
between  different  plants  within  a  composite  organization. 

In  the  remaining  chapters  the  author  discusses  the  problems  of  de- 


1922]  Accounting,  Business  Methods,  divestments.  Exchanges       13T 

preciation  and  maintenance,  showing  the  necessity  of  usually  consider- 
ing depreciation  and  maintenance  together,  the  disposition  of  profits, 
the  interpretation  of  financial  statements,  in  which  ultimate  and  imme- 
diate solvency  is  differentiated,  and  the  effect  of  interest  on  values.  The 
balance  sheets  presented  in  chapter  twenty  are  particularly  clear,  and 
business  organizations  would  do  well  to  adopt  the  form  of  financial 
statements  here  outlined.  The  four  short  appendices  discuss  drafts, 
simple  interest  and  bank  discount,  compound  interest  and  annuities, 
and  single  entry. 

The  book  contains  a  full  table  of  contents,  and  is  well  indexed.  The 
text  is  artistically  displayed  and  is  easy  to  read ;  each  paragraph  in 
the  entire  volume  is  given  a  bold-face  heading.  At  the  conclusion  of 
each  chapter  are  problems  and  exercises  which  will  further  assist  in 
its  use  as  a  text.  An  answer  book  has  been  prepared  which  will  also  be 
an  aid  to  the  instructor.  The  style  is  pleasing,  and  the  work  possesses 
a  literary  finish  not  ordinarily  found  in  a  text  on  accounting. 

J.  Hugh  Jacksox. 

With  Price,  Waterhouse  4"  Co.,  New  York. 

Investment  Analysis.  By  Walter  Edwards  Largerquist.  (New 
York:  The  Macmillan  Company.      1921.      Pp.  xviii,  772.) 

In  672  pages  of  text,  100  pages  of  appendices,  and  18  pages  of 
index,  the  author  has  arranged  a  comprehensive  survey  of  the  subject 
from  the  point  of  view  of  the  conservative  investor.  The  volume  is 
divided  into  four  books. 

The  first  book  discusses  the  general  considerations  pertaining  to  all 
investments,  such  as :  the  criteria  for  analyzing  the  investor  and  the 
investment ;  the  terminology  and  classes  of  bonds  and  mortgages ;  the 
structure  and  analysis  of  a  typical  corporation  report ;  the  essential 
elements  in  mortgage  securing  bonds ;  the  rules  and  customs  regarding 
the  underwriting,  issuance,  and  transfer  of  securities ;  net  yields  and 
the  use  of  bond  tables ;  a  discussion  of  bank  reserves  and  interest  rates 
as  they  affect  the  prices  of  bonds  cyclically ;  the  regulations  of  blue- 
sky  legislation  and  the  problem  of  taxation  and  tax  exemption  of 
bonds. 

The  second  book  describes  all  important  forms  of  corporation  bonds 
topically  as  follows :  railroad,  railroad  equipment,  street  and  inter- 
urban  railways,  electric  light  and  power,  gas,  hydro-electric  power, 
water,  telephone  and  telegraph.  Great  Lakes  steamship,  industrial,  and 
timber  bonds.  A  similar  topical  arrangement  in  book  three  discusses 
real  estate  mortgages,  real  estate  bonds,  Federal  Land  Bank  farm-loan 
bonds,  irrigation  securities,  and  drainage  and  levee  district  bonds.  Book 
four  treats  of  civil  loans  including  those  to   the  L^nited   States   and 


138  Reviews  and  New  Books  [March 

foreign  governments,  state,  county,  city,  town,  and  special  assessment 
districts  in  the  broader  functional  method. 

When  this  volume  is  compared  with  all  the  other  works  brought 
forth  on  this  subject  during  the  last  fifteen  years,  it  excels  unquestion- 
ably as  to  comprehensiveness,  although  the  treatment  of  preferred 
stock  as  a  possible  investment  is  relegated  to  an  isolated  page  or  two; 
and  the  treatment  of  foreign  government  bond  issues  is  somewhat 
skimped  in  view  of  their  current  and  impending  importance.  The  value 
of  this  chapter  would  be  enhanced  by  specific  reference  to  and  com- 
ment upon  the  larger  loans  current  in  the  United  States  of  the  principal 
borrowing  countries.  Thoroughness  characterizes  the  work  of  the 
author  and  the  treatment  of  some  phases  is  carried  to  the  point  of 
meeting  specialists'  needs.  Indeed,  the  implications  of  the  subject  in 
accounting,  law,  corporation  finance,  and  business  cycles  are  rather 
thoroughly  covered.  This  may  not  be  particularly  pleasing  to  the 
teachers  of  accounting  and  other  courses,  but  it  is  highly  desirable  for 
the  student  who  has  a  vocational  or  pecuniary  aim  in  pursuing  this 
particular  subject.  By  the  liberal  use  of  quotations  from  other 
writers,  the  appropriate  use  of  footnotes,  and  the  exhaustive  classified 
bibliography  in  one  of  the  appendices,  the  author  has  satisfactorily 
introduced  the  reader  to  the  literature  of  the  subject. 

In  his  expressions  of  opinion,  the  author  carefully  avoids  the  fiats 
that  characterize  less  academic  writers  in  this  field.  On  the  other 
hand,  he  appears  to  possess,  in  the  opinion  of  the  reviewer,  an  excess 
of  confidence  (1)  in  the  good  judgment  and  disinterestedness  of  bond- 
house  managers;  (2)  in  the  improbability  of  repudiation  of  modern 
civil  loans;  and  (3)  in  the  unmodified  permanence  of  the  present  funda- 
mental philosophy  of  capitalistic  debt.  Some  of  the  statements  reflect- 
ing these  ideas  follow : 

"It  is  only  when  the  investor  has  a  full  appreciation  of  the  require- 
ments of  sound  investments  that  he  will  always  seek  the  advice  of  his 
banker,  and  then  follow  this  advice  when  given"  (p.  3).  Would  an 
intelligent  investor  have  taken  the  bankers'  advice  to  bu}^  external 
Russians  in  1916  or  external  French  in  1921? 

"Many  writers undoubtedly  have  overemphasized  the  import- 
ance of  the  repudiation  of  state  debt  which  occurred  fifty  and  seventy- 
five  years  ago"    (p.  603).      "Since  the  middle  of  the  last  century  a 

number  of  repudiations  of  national  bond  issues  have  been  made 

A  number  of  repudiated  national  securities  which  have  been  issued 
prior  to  this  period  still  are  considered  as  representative  of  foreign 
bonds  by  the  larger  part  of  the  American  investing  public"  (pp.  663-4). 
" ....  It  is  indeed  rare  for  a  municipality  to  attempt  repudiation" 
(p.  604).     A  prolonged  depression  of  international  scope  would  soon 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       139 

convince  investors  that  history  has  lessons  not  to  be  overlooked  because 
of  their  remoteness. 

"Whether  Sovietism  maintains  or  is  replaced,  the  government  in 
power,  if  it  is  to  retain  its  place,  must  eventually  pay"  (p.  665). 
Would  the  same  conclusions  attach  to  France  and  England  who  now 
owe  us  about  eight  billion  dollars  with  interest  already  in  defavilt  for 
two  years?  Will  not  the  general  difficulty  of  payment  make  some 
"adjustment"  conventional?  With  regard  to  the  smaller  nations,  is 
it  not  true  that  the  British  navy  has  been  the  fundamental  fact  in  the 
payment  of  most  foreign  bonds  in  the  past  century?  Who  will  act  as 
the  sheriff  for  us  during  the  next  century?  Is  any  foreign  investment 
really  safe  without  a  strong  League  of  Nations,  or  its  equivalent  ? 

J.  F.  Ebeesgle. 

University  of  Minnesota. 

NEW    BOOKS 

Adams,  E.  K.  Women  professional  "workers.  A  study  made  for  the 
Women's  Educational  and  Industrial  Union.  (New  York:  Macmillan. 
1921.      Pp.  xiv,  467.     $2.50.) 

Amelotte,  J.  In  navy  yards,  "what  is  overhead  to  productive  labor? 
(Lynn,  Mass.:  Author,  14  N.  Franklin  St.  Court.      1921.      Pp.  44.  2.5c.) 

AuGHiNBAUGH,  \V.  E.  Advertising  for  trade  in  Latin- Am  eric  a.  (New 
York:  Century.      1921.      Pp.  300.     $3.) 

Beach,  F.  L.  Twenty  twenty-minute  lessons  in  bookkeeping.  (New  York: 
Ronald.      1921.      Pp.  90.     $1.50.) 

Blackford,  K.  M.  and  Newcomb,  A.  The  job,  the  man,  the  boss.  Re- 
vised edition.      (Garden  City,  N.  Y.:  Doubleday.      1921.     Pp.  xxvii,  272.) 

Britton,  W.  E.  and  Bauer,  R.  S.  Parts  of  cases  on  business  law.  (Cham- 
paign, 111.:  Student  Supply  Store.      1921.      Pp.  302.) 

Bassett,  W.  R.  The  organization  of  modern  business.  (New  York:  Dodd, 
Mead.     1921.     Pp.  271.     $2.) 

Bull,  A.  E.  Conducting  a  mail  order  business.  (New  York:  Pitman. 
1921.      Pp.  vii,  198.      75c.) 

Carruth,  C.  B.  and  Jacobson,  H.  I.  Cost  finding  for  warehousemen. 
(Pittsburgh,  Pa.:  American  Warehousemen's  Assoc.,  General  Committee 
on  Central  Bureau.     1921.     Pp.  39.     $1.) 

CoNYNGTON,  T.,  Knapp,  H.  C.  and  Pinkerton,  p.  W.  Wills,  estates,  and 
trusts:  a  manual  of  law,  accounting,  and  procedure,  for  executors,  admin- 
istrators, and  trustees.  Two  vols.  (New  York:  Ronald.  1921.  Pp. 
825.     $8.) 

Corbin,  a.  L.  Cases  on  the  law  of  contracts  selected  from  decisions  of 
English  and  American  courts.  (St.  Paul,  Minn.:  West  Pub.  Co.  1921. 
Pp.  xxiv,  1514.) 

Dyer,  E.  Shoes:  merchandise  information  for  sales-people.  (Pittsburgh, 
Pa.:  Carnegie  Institute  of  Technology.      1921.      Pp.  iii,  61.     $2.) 


140  Reviews  and  New  Books  [March 

GanOj  D.  C.      Gano's  commercial  law.     Revised  by  Ralph  E.  Rogers  and 

Clyde  O.  Thompson.      (New  York:  American  Book  Co.     1921.     Pp.  vi, 

409.) 
Greenough,  a.     Short-time  bond  values  tables.      (Boston:  Financial  Pub. 

Co.     1921.      Pp.  462.     $12.) 
Grimshaw,  R.     The  modern  foreman.      (New  York:  Biddle  Business  Pub., 

Inc.      1921.      Pp.  xiv,  190.) 

Heath,  F.  R.  Business  forms  and  financial  institutions.  Revised  by 
Louis  B.  Moffett.  Eighth  edition  of  the  Peircc  manual  of  business 
administration.      (1921.   "Pp.  viii,  195.     $1.50.) 

Hills,  A.  T.  Commercial  laxv:  a  practical  textbooh  for  schools  and  a 
valuable  book  for  reference.  (Cleveland,  O. :  Practical  Text  Book  Co. 
1921.      Pp.  308.     $1.20.) 

Hotchkiss,  G.  B.  and  Kilduff,  E.  J.  Advanced  business  correspondence. 
(New  York:  Harper.     1921.     Pp.  x,  513.) 

Hungerford,  E.  a.  How  to  get  on  two  pay-rolls:  a  manual  of  personal 
and  family  finances.  (Indianapolis,  Ind. :  Bobbs-Merrill.  1921.  Pp.  25. 
$1.) 

KiTsoN,  H.  D.  The  mind  of  the  buyer.  (New  York:  Macmillan.  1921. 
Pp.  211.     $1.50.) 

After  explaining  the  scientific  methods  in  advertising  and  selling, 
the  statistical,  the  laboratory,  and  the  historical,  the  author  treats  each  of 
the  stages  in  the  sale:  attention,  interest,  desire,  confidence,  decision  and 
action,  and  satisfaction.  The  material  in  each  chapter  is  adequate,  well 
illustrated,  and  interesting.  Probably  for  the  layman  too  much  em- 
phasis is  placed  on  the  explanation  of  psychological  principles,  a  diffi- 
culty which  somewhat  interferes  with  easy  assimilation  and  continuity 
of  understanding.  Charles  Leonard  Stone. 

Knox,  J.  S.  The  science  and  art  of  selling.  (Cleveland,  O. :  Knox  Busi- 
ness Book  Co.      1921.      Pp.  380.) 

Lee,  J.  Management:  a  study  of  industrial  organisation.  (New  York' 
Putnam.      1921.      Pp.   vii,   125.     $2.) 

Lincoln,  E.  E.  Problems  iri  business  finance.  (Chicago:  Shaw.  1921. 
Pp.  1,  515.      $5.) 

Designed  primarily  for  the  use  of  academic  students,  this  is  a  "case 
book"  in  business  finance.  Its  more  important  features  are:  (1)  An  outline 
in  topical  form  (pp.xxvii-xxxiv)  for  a  general  course  in  business  finance. 
Such  an  outline  is  very  useful  as  a  means  of  giving  continuity  to  the 
stud}^  of  the  "case"  materials.  (2)  A  classified  bibliography  (pp.  xxxv- 
1)  of  reference  materials,  organized  on  the  general  plan  of  the  outline 
and  of  the  arrangement  of  the  "case"  materials.  (3)  "Case"  problems 
(pp.  29-484)  covering  financial  and  general  considerations  involved  in 
beginning  a  business :  the  raising  of  fixed  capital,  with  some  special 
attention  to  customer  ownership  and  employee  ownership;  the  raising  of 
working  ca])ital ;  financial  aspects  of  purchasing,  producing,  and  selling 
goods;  the  administration  of  earnings;  and  financial  involvements,  adjust- 
ments, receiverships,  bankruptcies,  and  reorganizations.  The  author  has 
collected  the  problem  materials  from  numerous  sources  covering  many 
different  kinds  of  business  enterprise.     They  are  for  the  most  part  calcu- 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       141 

lated  to  provoke  class  discussion  of  principles  and  policies,  and  while 
some  knowledge  of  accounting  is  presupposed  the  problems  are  not  of 
the  type  calling  for  exact  mathematical  solution.  The  several  chapters 
open  with  lists  of  specific  bibliographical  references  and  with  very  brief 
textual  comment  upon  the  topics  covered  therein.  Chapter  1,  preceding 
the  problems  as  a  whole  (pp.  7-28),  entitled  "Introduction — General 
survey  of  the  field,"  consists  of  a  series  of  comments  upon  all  the  chapters 
following.  In  view  of  the  author's  statements  (p.  28)  that  "the  rules 
of  the  game  are  after  all  very  simple — so  simple  that  comparatively  few 
recognize  them,"  and  that  "probably  little  new  light  on  the  fundamentals 
of  business  finance  has  been  discovered  for  many  generations,"  it  is 
hard  to  explain  the  appearance  of  these  comments  as  a  separate  chapter. 
They  might,  perhaps,  better  have  been  broken  up  and  combined  with 
the  introductory  remarks  under  each  chapter  of  problem  work.  (4)  A 
statistical  appendix  (pp.  487-525.)  The  tables  presented  here  have 
been  compiled  from  both  public  and  private  sources  of  information  with 
a  view  to  giving  the  student  easy  access  to  the  facts  of  business  experience, 
by  the  use  of  which  he  may  draw  conclusions  regarding  sound  policy  in 
individual  "cases." 

Stanley  E.  Howard. 
Princeton  University. 

LoREE,  L.  F.  The  relations  of  the  accounting  officers  with  the  operations 
of  the  road.  An  address  delivered  at  the  thirty-third  annual  meeting  of 
the  Railway  Accounting  Officers  Assoc.  (Washington,  D.  C. :  Associa- 
tion, 1116  Woodward  Bldg.      1921.      Pp.  8.) 

MacElwee,  R.  S.  and  Taylor,  T.  R.  Wharf  mayiagement,  stevedoring, 
and  storage.      (New  York:  Appleton.      1921.      Pp.  xix,  330.     $5.) 

McGrath,  T.  Mine  accounting  and  cost  principles.  (New  York: 
McGraw-Hill.      1921.      Pp.  xiv;  257.     $4.) 

McKiNSEY,  J.  O.  Bookkeeping  and  accounting.  Vol.11.  (Cincinnati,©.: 
South-Western  Pub.  Co.      1921.      Pp.  xiii,  505-1084.) 

McNeel,  R.  W.  Beating  the  stock  market.  (Boston:  Author,  171  Tre- 
mont  St.      1921.      Pp.  155.     $2.) 

The  author  is  financial  editor  of  the  Boston  Herald. 

Marshall,  L.  C.  Business  administration.  Part  I.  (Chicago,  111.:  Univ. 
of  Chicago  Press.      1921.      Pp.  xiii,  384.     $4.20.) 

Mattoon,  W.  R.  and  Barrows,  W.  B.  Measuring  and  marketing  farm 
timber.  Farmers'  bull.  1210.  (Washington:  Dept.  of  Agri.  1921. 
Pp.  61.) 

Meyer,  B.  H.  Some  accounting  problems  under  the  Transportation  act. 
An  address  delivered  at  the  thirty-third  annual  meeting  of  the  Railway 
Accounting  Officers  Association.  (Washington:  Association,  1116  Wood- 
ward Bldg.      1921.      Pp.  16.) 

Minster,  L.  Retail  profits,  turnover  and  net  xvorth.  New  York:  U.  P.  C. 
Book  Co.,  Inc.      1921.     Pp.  48.) 

Nash,  A.  The  golden  rule  in  business.  (Boston:  Murray  Press,  359 
Boylston  St.      1921.      Pp.  32.) 

Parsons,  F.  A.  The  art  appeal  in  display  advertising.  (New  York: 
Harper.      1921.      Pp.  xxvii,  132.      $4.50.) 


142  Reviews  and  New  Books  [March 

Perrin,  H.  L.  and  Babb,  H.  W.  Commercial  law  cases.  Vol.  I,  Con- 
tracts-sales agency.  Vol.  II,  Negotiable  instruments — partnerships — 
corporations.      (New  York:  Doran.      1921.   Pp.  xxi,  356;  xv,  414.  $7.50.) 

Powell,  J.  E.     Payment  by  results.      (New  York:  Longmans.      1921.) 

E.AMSAY,  R.  E.  Effective  direct  advertising:  the  principles  and  practice 
of  producing  direct  advertising  for  distribution  by  mail  or  otherwise. 
(New  York:  Appleton.     1921.     Pp.  xiii,  640.) 

RowNTREE,  B.  S.  The  human  factor  in  business.  (New  York:  Longmans. 
1921.      Pp.  xii,  176.     $2.) 

Ryan,  F.  C.  Profit  percentage  table,  based  on  selling  prices.  (Bradford, 
Ontario,  Canada:  Author.      1921.      Pp.  15.     $5.) 

Scott,  W.  D.  and  Hayes,  M.  H.  S.  Science  and  common  sense  in  working 
with  men.      (New  York:  Ronald  Press.      1921.      Pp.  154.     $2.) 

Written  in  an  attractive  style  and  suffused  with  concrete  illustrations, 
this  book  deals  with  the  problems  of  selection,  placement,  and  adjust- 
ment of  employees.  A  clear  explanation  of  the  various  types  of  mental 
tests,  the  differential  diagnostic,  the  trade  test,  the  Munsterberg  type, 
and  the  mental  alertness  test,  presents  to  us  both  the  uses  and  the  limita- 
tions of  each.  There  is  an  interesting  discussion  of  the  relation  of 
monotony  and  variety  to  satisfaction  and  dissatisfaction,  one  of  the 
many  illustrations  of  the  unwillingness  of  the  authors  to  dismiss  a  subject 
with  an  inaccurate  generality.  The  latter  pages  are  an  appeal,  based 
on  practical  psychology,  for  a  more  genuine  recognition  of  the  instincts 
of  the  worker  and  for  a  freedom  of  opportunity  wherein  the  whole  man 
may  be  satisfied,  utilized,  and  efficient. 

For  a  fuller  treatment  of  some  of  the  topics  embraced  in  this  com- 
prehensive volume,  Link's  Employment  Psychology,  Chapman's  Trade 
Tests,  Yoakum  and  Yerkes'  Army  Mental  Tests,  and  Munsterberg's 
Psychology  and  Industrial  Efficiency  may  be  consulted. 

Charles  Leonard  Stone. 

Sherwood,  D.  A.  Public  accounting  and  auditing.  Vol.  II.  (Cincin- 
nati, Ohio:  South-Western  Pub.  Co.     1921.     Pp.  iv,  262.) 

Spencer,  W.  H.  Law  and  business.  Vol.  II,  Law  and  the  market;  law 
and  finance.      (Chicago:  Univ.  of  Chicago  Press.      1921.      Pp.  xviii,  670. 

$4.50.) 

Spring,  S.  Laws  controlling  the  investment  of  insurance  funds.  (Boston: 
Financial  Pub.  Co.     1921.) 

SwARTHouT,  A.  V.  and  Bexell,  J.  A.  A  system  of  accounting  for  cotton 
ginneries.  Contribution  from  the  Bureau  of  Markets  and  Crop  Esti- 
mates. Dept.  bull.  985.  (Washington:  Gov.  Prtg.  Office,  Supt.  Docs. 
1921.      Pp.  42.      10c.) 

Tessier,  C.  O.  The  patent  business:  a  comprehensive  instruction  course  in 
ten  lessons.  (New  York:  Prtg.  Dept.,  Salvation  Army.  1921.  Pp. 
155.) 

Wall,  A.  Analytical  credits.  A  study  in  brief  of  the  methods  used  to 
accumulate,  tabulate  and  analyse  information  for  the  protection  of  loans 
and  credit  extensions.  (Indianapolis,  Ind. :  The  Bobbs-Merrill  Co. 
1921.      Pp.  258.     $3.) 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       143 

In  the  field  of  credit  analysis  Mr,  Wall's  ideas  are  new  and  are 
centered  about  the  hypothesis  that  it  is  reasonable  to  apply  the  law  of 
averages  to  a  particular  credit  statement.  In  other  words,  by  knowing 
the  facts  for  a  large  number  of  establishments  in  any  industry  it  is 
possible  to  arrive  at  more  satisfactory  conclusions  in  regard  to  the  credit 
conditions  of  a  given  business  firm.  Other  material  covered  in  this  book 
includes  the  genesis  of  credit,  collections,  illustrations  of  46  collection 
letters,  acceptances,  commercial  paper  and  credit  ethics. 

On  the  subject  of  credit  analysis  the  author  emphasizes  what  he  con- 
siders ought  to  be  done  rather  than  an  explanation  of  actual  practice. 
Apart  from  the  matter  of  content  the  work  is  to  be  criticised  for  not 
presenting  the  data  in  a  better  organized  and  more  correlated  fashion. 

Martin  J.  Shugrue. 

Watts,  F.  An  introduction  to  the  psychological  problems  of  industry. 
(New  York:  Macmillan.      1921.      Pp.  240.     $5.) 

It  is  difficult  to  sum  up  in  a  few  sentences  the  meaning  of  this  excellent 
volume.  The  table  of  contents,  which  lists  for  us  such  a  range  of  topics 
as  fatigue,  motion  study,  vocational  selection,  scientific  management,  in- 
dustrial unrest,  and  the  creative  impulse  in  industry,  might  lead  us  to 
expect  a  reference  book  dealing  with  the  adjacent  fields  of  psycho- 
physical and  instinct  problems.  The  book  does  present  a  great  deal  of 
material  indicating  the  progress  along  both  these  lines.  But  the  domi- 
nant feature  of  the  work  is  its  analysis  of  the  psychology  and  sociology, 
as  well  as  of  the  economics  of  the  various  problems  discussed.  Not  only 
in  the  directness  and  coherence  of  presentation,  but  also  in  clearness  of 
perspective,  the  volume  shows  a  sane  and  thorough  organization.  The 
author  presents  to  us  clearly  and  ably  both  the  merits  and  the  defects 
of  the  contributions  of  such  men  as  Taylor,  Gilbreth,  Darwin,  Munster- 
berg,  and  Freud. 

Some  of  the  instances  of  the  author's  thorough  analysis  of  industrial 
measures  are  his  references  to  the  quality  of  the  rest-pause,  exercise  of 
the  total  body  and  the  total  personality,  the  mental  tempo  of  civilization, 
and  the  stereotyping  of  mental  contacts.  He  makes  us  realize  keenly* 
the  cost  of  our  blind  depersonalization  of  industry,  particularly  em- 
phasizing the  threatened  atrophy  of  creativeness  and  the  breeding, 
physically  and  socially,  of  an  inferior  class.  "Far  too  many  of  our  people 
today  are  living  mechanical  lives  on  the  big  slag  heaps  which  we  call 
our  centers  of  industry,  cut  off  from  culture  in  every  form,  the  dullness  of 
their  existence  broken  occasionally  only  by  bursts  of  pathological  ex- 
citement." In  desperate  protest,  Watts  calls  our  attention  to  the  fre- 
quent employment  of  young  people  "under  conditions  which  in  time 
would  render  them  unfit  for  responsible  citizenship  and  make  their  sub- 
sequent permanent  inefficiency  or  vagabondage  inevitable."  Both  for 
the  welfare  of  the  future  of  industry  and  for  the  unquestionable  rights 
and  necessity  of  mankind,  the  author  pleads  eloquently  for  the  extension 
of  education  to  supply  the  worker  with  both  technical  skill  and  general 
culture. 

As  supplementary  to  the  forepart  of  the  book  Muscio's  Lectures  in 
Industrial  Psychology  may  prove  useful ;  as  supplementary  to  the  latter 
chapters,  Tead's  Instincts  in  Industry  and  Veblen's  Instinct  of  Work- 
manship.    But  in  the  union  of  the  economic,  psychological,   and  socio- 


l-is-i  Reviews  and  New  Books  [March 

logical    points    of    view,    and    in    general    excellence    of    treatment,    this 
volume  is  admirably  distinctive. 

Charles  Leonard  Stone. 

WatsoNj  p.  a.  National  Investors'  guide.  (Lansing,  Mich. :  National  In- 
vestors' Service  Bureau.      1921.      Pp.  126.) 

Whitehead,  H.  How  to  run  a  store.  (New  York:  Crowell.  1921.  Pp. 
vi,  296.     $2.50.) 

Woodward,  K.  W.  The  valuation  of  American  timberlands.  (New  York: 
Wiley.      1921.      Pp.  vii,  253.     $3.) 

Buildings  and  store  equipment,  merchandise  sold,  store  methods,  and 
accounting  practices.  Costs,  merchandising  practices,  advertising  and 
sales  in  the  retail  distribution  of  clothing,  vol.  VI.  Issued  by  North- 
western University,  School  of  Commerce,  Bureau  of  Business  Research. 
(New  York  City:  Prentice-Hall.      1921.      Pp.  499-622.) 

Business  accounting.     Five  vols.      (New  York:  Ronald.     1921.) 

Commercial  laxv.      (New   York:   American   Inst,    of   Banking.      1921.      Pp. 

480.) 

A  composite  picture  of  business  America  as  seen  through  the  eyes  of  Jf.310 
men  of  affairs.  Second  edition.  (New  York:  Harris,  Winthrop  &  Co., 
52  Broadway.      1920.      Pp.  84.) 

Credit  man's  diary  and  manual  of  commercial  laws  for  1922.  (New  York: 
National  Assoc,  of  Credit  Men,  41  Park  Row.      1922.     $3.50.) 

Employment  management,  wage  systems  and  rate  setting.  (New  York: 
Industrial  Press.      1921.      Pp.  ii,  103.     $1.) 

Future  trading.  Hearings  before  the  House  of  Representatives,  QQ  Cong. 
3  Sess.      (Washington:  Gov.  Prtg.  Office.     1921.     Pp.  1070.) 

Handbook  of  the  Building  Trades  Employers'  Association  of  the  City  of 
New  York,  1921.      (New  York:  Association.      1921.      Pp.  176.) 

Industrial  stability:  report  of  the  seventh  national  convention  of  the  Society 
of  Industrial  Engineers.      (Chicago:  The  Society.      1921.      Pp.  425.  $2.) 

Manual  for  the  oil  and  gas  industry  under  the  Revenue  act  of  1921. 
(Washington:  Guv.  Prtg.  Office,  Supt.  Doc.      1921.     25c.) 

The  Merchants'  Association  of  New  York  year  book,  1921.  (New  York: 
Association,  233  Broadway.      1921.      Pp.  338.) 

The  metric  versus  the  English  system  of  weights  and  measures.  Research 
report,  no.  42.  (New  York:  National  Industrial  Conference  Board. 
1921.      Pp.  261.) 

Other  people's  money.  By  a  trustee.  (London:  Mills  &  Boon.  1921. 
Pp.  127.      2s.  6d.) 

Positions  of  responsibility  in  department  stores  and  other  retail  selling 
organisations.  A  study  of  opportunities  for  women.  Bull.  no.  5.  (New 
York:  Bureau  of  Vocational  Information,  2  West  43rd  Street.  1921. 
Pp.  126.) 

Synopsis  of  decisions  and  recommendations  relating  to  freight,  passenger, 
disbursement  and  terminal  accounting,  July,  1888  to  June  1921.  (Wash- 
ington: Railway  Accounting  Officers  Assoc.      1921.      Pp.  385.     $1.) 


1922]  Capital  and  Capitalistic  Organization  145 

What  industrial  engineering  includes;  for  industrial  executives;  101  things 
to  do,  1001  residts  others  secured.  (New  York:  C.  E.  Knoeppel  &  Co. 
1921.      Pp.  543.) 

Workers  education  in  the  United  States;  report  of  proceedings  first  national 
conference  on  workers'  education  in  the  United  States.  (New  York  City: 
Workers'  Education  Bureau  of  America.      1921.      Pp.  144.) 

Capital  and  Capitalistic  Organization 

NEW    BOOKS 

BoGERT,  G.  G.  Handbook  of  the  law  of  trusts.  (St.  Paul;,  Minn. :  West 
Pub.  Co.      1921.      Pp.  xii,  675.) 

Fleischmann,  E.  Das  Getreidemonopol  in  der  Schweiz.  Seine  recht- 
lichen,  wirtschaftlichen  und  geschichtlichen  Grundlagen.  (Zurich:  Albert 
Muller.      1921.      Pp.  192.) 

Fletcher,  W.  M.  Cyclopedia  of  the  law  of  private  corporations.  Vol.  X. 
(Chicago:  Callaghan  &  Co.     1921.     Pp.  xi,  1010.) 

Lavington,  F.  The  English  capital  market.  (London:  Methuen  &  Co. 
1921.      Pp.  297.      18s.) 

Leitner,  F.  Privatwirtschaftslehre  der  Unternehmung.  Third  edition. 
(Berlin:  Vereinigung  Wissenschaftlicher  Verleger.  1921.  Pp.  vi,  283. 
30  M.) 

LiEFMANN,  R.  Beteiligungs — und  Finanzierungsgesellschaften.  Eine  Stu- 
die  iiber  den  modernen  Effektenkapitalismus  in  Deutschland,  den  Vereinig- 
ten  Staaten,  der  Schweiz,  England,  Frankreich  und  Belgien.  Third 
edition.      (Jena:  Fischer.      1921.     Pp.  viii,  582.      100  M.) 

.     Kartelle    und    Trusts.      (Stuttgart:    Moritz.      1921.      Pp. 

310.) 

Sears,  J.  H.  Trust  estates  as  business  companies.  Second  edition.  (Kan- 
sas City,  Mo.:  Vernon  Law  Book  Co.      1921.     Pp.  xx,  782.) 

SuDEKUM,  A.  Kapital-  und  Gewinnbeteiligung  als  Grundlage  planmdssi- 
ger  Wirtschaftsfiihrung.      (Berlin:  Springer.      1921.      Pp.  38.      4.40  M.) 

Sullivan,  J.  J.  American  corporations.  The  legal  rules  governing  cor- 
porate organization  and  management  with  forms  and  illustration.  (New 
York :  Appleton.      1921.      Pp.463.      $2.75.) 

Varga,    E.     Die    Krise    der    kapitalistischen    Weltwirtschaft.      (Hamburg: 

Hoym.      1921.      Pp.  v,  64.      1.50  M.) 
WiLLETT,    G.      The    corporation    laws    of    the    District    of    Columbia,    with 

annotations,  index  and  forms.      (Washington:  Bryne  &  Co.      1921.      Pp. 

115.) 
hist  of  bibliographies  on  public  utilities,  including  regulation,  valuation  and 

municipal   ownership.      (Washington:   Library   of   Congress,    Division   of 

Bibliography.      1921.      Pp.  11.) 
Organisationen  der  deutschen  Landwirtschaft,  der  Forstwirtschaft,  des  Gar- 

tenbaus,  der  Fischerei  und  der  landwirtschaftlichen  Nebengewerbe.     Els- 


146  Reviews  and  New  Books  [March 

ners  Betriebsbiicherei,  vol.  14.      (Berlin:  Otto  Eisner.      1921.      Pp.  287. 
24  M.) 

Issued    by    Dr.    Walter    v.    Altrock    in    conjunction    with    Dr.    Franz 
Mendelson  and  Dr.  Kurt  Schleising. 

Public  utilities  reports,  containing  decisions  of  the  Public  Service  Com- 
missions and  of  state  and  federal  courts.  Edited  by  Henry  C.  Spurr. 
(Rochester,  N.  Y.:  Public  Utilities  Reports,  Inc.     1921.     Pp.  xli,  968.) 

Labor  and  Labor  Organizations 

NEW    BOOKS 

Bunting,  J.  H.  Is  trade  unionism  sound?  A  suggestion  for  outflanking 
the  power  of  capital.      (London:  Benn  Brothers.      1921.      Pp.  x,  98.   6s.) 

Desmond,  S.  Labour:  the  giant  with  the  feet  of  clay.  (New  York: 
Scribner's.      1922.) 

Drysdale,  C.  V.  Wages  and  cost  of  living.  (London:  The  Malthusian 
League.      1921.      Pp.  48.      6d.) 

Foster,  W.  Z.  The  railroaders'  next  step.  (Chicago:  The  Trade  Union 
Educational  League.      1921.     Pp.  47.     25c.) 

Lloyd,  C.  M.  Trade  unionism.  Second  edition,  revised  and  enlarged. 
(London:  A.  and  C.  Black.      1921.      5s.) 

MacDonald,  J.  R.  The  history  of  the  I.  L.  P.  (London:  I.  L.  P.  Infor- 
mation Committee.      1921.  6d.) 

Oates,  M.  B.  and  Reynoldson,  L.  A.  Standards  of  labor  on  the  hill 
farms  of  Louisiana.  Bull.  no.  961.  (Washington:  Dept.  of  Agri.  1921. 
Pp.  27.) 

Papa,  D.  II  parlamento  syndicale.  (Naples:  Ceccoli  e  Figli  Editori.  1921. 
4  1.) 

Passano,  E.  B.  The  Baltimore  plan  of  industrial  relationship,  proposing 
to  organize  The  American  Guild  of  the  Printing  Industry.  (Baltimore, 
Md.:  American  Guild  of  the  Printing  Industrv,  1325  Munsey  Bldg.  1921. 
Pp.  13.) 

Powell,  J.  E.  Payment  by  results.  With  a  treatise  on  ratefixing.  (New 
York:  Longmans.      1921.) 

Renold,  C.  G.  Workshop  committees.  (London:  Pitman.  1921.  Pp.  44. 
is.) 

Slesser,  H.  H.  The  law  relating  to  trade  unions.  Four  lectures  de- 
livered for  the  Council  of  Legal  Education,  Michaelmas  Term,  1920. 
(London:  Labour  Pub.  Co.      1921.      Pp.  vii,  152.      5s.) 

Stern,  E.  La  legislation  ouvriere  tcheco-slovaque.  (Prague:  "Orbis" 
Printing,  Publishing  and  Publicity  Co.      1921.      Pp.  70.) 

Stone,  G.     A  history  of  labour.      (London:  Harrap.      1921.      Pp.  416.) 

Thompson,  L.  A.,  compiler.  Recent  literature  on  unemployment  with  par- 
ticular reference  to  causes  and  remedies.  (Washington:  Library,  Dept. 
of  Labor.      1921.      Pp.  35.) 


1922]  Labor  and  Labor  Organizations  147 

TuRPiN,  H.  Le  probleme  international  du  chomage.  (Paris:  Giard,  1921. 
Pp.  115.) 

Vernon,  H.  M.  Industrial  fatigue  and  efficiency.  (London:  Routledge. 
1921.      12s.  6d.) 

Weil,  F.  Sozialisierung.  Versuch  einer  begrifflichen  Grundlegung  nebst 
einer  Kritik  der  Sozialisierungspldne.  (Berlin-Flitchtenau:  Verlag  Ge- 
sellschaft  und  Erziehung.      1921.     Pp.124.      11  M.) 

Williams,  W.     Full  up  and  fed  up.      (New  York:  Scribner's.   1921.  $2.50.) 

Agricultural  workers'  wages.  The  Labour  party's  fight  for  the  Agricul- 
tural Wages  Board.      (London:  Labour  Party.      1921.      Pp.  30.) 

British  labour  replacement  and  conciliation,  1914^-1931.  Being  the  result 
of  conferences  and  investigations  by  the  Economics  Section  of  the  British 
Association.      (London:  Pitman.      1921.     Pp.  268.     10s.  6d.) 

Conciliation  and  arbitration.  Report  including  particulars  of  proceedings 
under  the  Conciliation  act,  1896,  the  Coal  Mines  act,  1912,  the  Wages  acts, 
1918  and  1919,  the  Restoration  of  Pre-War  Practices  act,  1919.  (Lon- 
don: H.  M.'s  Stationery  Office.     1921.     Pp.  iv,  462.     3s.  6d.) 

Experience  with  trade  union  agreements — clothing  industries.  National  In- 
dustrial Conference  Board,  research  report  no.  38.  (New  York:  Cen- 
tury.     1921.      Pp.  iv,  134.     $1.50.) 

The  subject-matter  indicated  in  the  title  is  handled  in  Ittle  more  than 
outline  fashion  in  this  report.  One  can  hardly  expect  more  from  an  at- 
tempt to  cover  in  123  pages  of  text  the  collective  bargaining  experience 
of  employers  with  the  many  separate  unions  in  the  clothing  industries, 
seven  of  them  national  unions  and  all  but  one  of  them  unions  in  which 
the  agreements  are  made  locally.  Nearly  all  of  the  text  is  concerned 
with  the  history  and  operation  of  agreements  in  selected  localities.  The 
workings  of  the  agreements  with  the  Amalgamated  Clothing  Workers 
and  the  Ladies'  Garment  Workers  respectively,  in  the  chief  clothing 
centers,  take  up  half  the  report.  The  agreements  with  the  United  Gar- 
ment Workers  (in  the  overall  industry),  the  Journeymen  Tailors,  the 
Fur  Workers,  Cloth  Hat  and  Cap  Makers,  and  the  United  Hatters 
receive  most  of  the  remaining  space.  There  is  also  a  short  chapter  of 
summary  and  conclusions. 

The  report  brings  out  little  that  is  new.  The  most  distinctive  feature 
of  the  work  is  the  presentation  of  testimony  from  employers  who  have 
been  parties  to  the  agreements  as  to  their  working,  particularly  with  ref- 
erence to  effects  upon  output  and  discipline,  the  observance  of  the  agree- 
ment by  the  union,  and  the  degree  of  freedom  from  strikes.  There  are 
evidences  throughout  of  a  desire  to  be  fair  in  statement  and  appraisal. 

D.  A.  McC. 

II  contratto  di  lavore  in  Lombardia.  Issued  by  the  Federazione  Industriale 
Lombarda.  (Milan:  Officine  Grafiche  Fratelli  de  Silvestri.  1921.  Pp. 
146.     3.75  1.) 

The  employment  of  women  in  5  and  10  cent  stores  in  the  state  of  New 
York.     Doc.  109.      (Albany,  N.  Y. :  Dept.  of  Labor.      1921.) 

Legislation  ouvriere  et  prevoyance  sociale  en  Suede.  Official,  1921.  (Stock- 
holm: Swedish  Gov.  Publication.) 


148  Reviews  and  New  Books  [March 

Open  shop  encyclopedia  for  debaters.  (New  York:  National  Assoc,  of 
Manufacturers  of  the  U.  S.  A.      1921.      Pp.  248.) 

Public  opinion  and  the  steel  strike  of  1919.  Supplementary  reports  to  the 
Commission  of  Inquiry,  Interchurch  World  Movement.  (New  York: 
Harcourt.      1921.      Pp.  346.      $1.50.) 

This  book  is  a  supplementary  volume  to  the  Report  on  the  Steel  Strike 
of  1919  reviewed  by  the  present  writer  in  the  issue  of  this  magazine  for 
December,  1920.  The  reports  in  this  volume  are,  however,  not  merely 
supporting  documents  to  the  Steel  Report  but  are  separate  and  fuller 
studies  of  special  phases  within  the  scope  of  the  general  investigation. 
The  idea  emphasized  is  the  relation  between  public  opinion  and  the 
strike  and  the  endeavor  is  to  show  how  that  public  opinion  was  formed, 
checked,  controlled,  and  even  warped  by  the  press ;  the  relations  of  in- 
dustrial companies  to  the  organs  of  civil  government  in  industrial  com- 
munities ;  the  opinion  of  groups  of  workers ;  opinion  as  influenced  by  the 
reports  of  spies ;  and  opinion  as  to  the  conceptions  or  misconceptions  of 
foreign-speaking  communities. 

The  reports  included  are  as  follows:  (1)  "Under-cover  men"  by 
Robert  Littell;  (2)  "The  Pittsburgh  newspapers  and  the  strike"  by  M.  K. 
Wisehart;    (3)   "Civil  rights  in  western  Pennsylvania"  by  Gorge  Soule; 

(4)  "The   mind   of   the    immigrant   communities"    by   David   J.    Saposs; 

(5)  "Welfare  work  of  the  U.   S.  Steel   Corporation"  by  George  Soule; 

(6)  "The  Pittsburgh  pulpit  and  the  strike"  by  M.  K.  Wisehart;  (7)  "The 
steel  report  and  public  opinion"  by  Heber  Blankenhorn. 

These  reports  show  conclusively  that  the  strike  did  not  involve  any- 
thing within  hailing  distance  of  social  revolution  and  that  grievances  con- 
cerning wages,  hours,  working  conditions,  and  arbitrary  control  were  the 
issues  involved.  The  twelve-hour  day  and  the  seven-day  week  are  a 
social  menace  and  are  shown  to  be  unnecessary.  The  book  contains  much 
unpleasant  reading  concerning  the  work  of  spies,  the  denial  of  civic 
rights,  the  use  of  force,  and  the  perversion  of  public  opinion  during  and 
after  the  strike.  A  wide  dissemination  of  facts,  however,  is  the  first 
step  in  bringing  about  better  conditions. 

George  M.  Janes. 

Report  of  the  President's  Conference  on  Unemployment,  Sept.  26  to  Oct.  IS 
1921.  Herbert  Hoover,  Chairman.  (Washington:  Gov.  Prtg.  Office, 
Supt.  Docs.      1921.      Pp.  178.      20c.) 

Rulings  of  the  Industrial  Board  pertaining  to  toomen  in  industry.  Rules  xv-l 
to  rv-20  inclusive.  (Harrisburg,  Pa.  :Dept.  of  Labor  and  Industries. 
1920.      Pp.  15.) 

Die  Tarifvertrdge  im  Deutschen  Reich  am  Ende  des  Jahres  1919,  nebst 
Anhang:  die  Reichstarifvertrcige  am  Ende  des  Jahres  1920.  Prepared 
in  the  Employment  Exchange  Department  of  the  Ministrj^  of  Eabor. 
(Berlin:  Reim'ar  Hobbing.      1921,      Pp.  91.      36  M.) 

Wages  in  Great  Britain,  France  and  Germany.  Research  Report  no.  40. 
(New  York:  National   Industrial  Conference  Board.      1921.      Pp.   110.) 

Work  of  the  employment  exchanges;  minutes  of  evidence  taken  before  the 
Committee  of  Enquiry.  Ministry  of  Labour.  (London:  H.  M,'s 
Stationery  Office.      1921.      Pp.  iv,  461.      5s.) 


1922]  Money,  Prices,  Credit,  and  Banking  149 

Money,  Prices,  Credit,  and  Banking 

NEW    BOOKS 

Arrus,  O.  F.  Nuestro  prohlema  del  cambio  y  el  poder  adquisitivo  de  la 
moneda.  (Lima:  Oficina  Tipografica  "La  Opinion  National."  1921. 
Pp.  26.) 

Arthuys,  J.  Le  probleme  de  la  monnaie.  (Paris:  Nouvelle  Librairie  Na- 
tional.     1921.      Pp.  192.      6.50  fr.) 

Babelon,  E.  Les  monnaies  grecques.  (Paris:  Payot.  1921.  Pp.  180. 
4  fr.) 

Bays,  A.  W.  Law  of  negotiable  instruments.  Second  edition.  (Chicago: 
Callaghan  &  Co.      1921.      Pp.253.) 

Chapters  have  been  added  on  banking  and  suretyship,  with  text  of 
Uniform  Negotiable  Instruments  law,  and  questions  and  problems. 

Borden,  W.  E.  and  Hooper,  C.  L.  Banking  and  business  ethics.  Edited 
by  Frank  L.  McVey.  (Chicago:  Rand,  McNally.  1921.  Pp.  viii, 
223.) 

Bastian,  E.  Banhen,  Sparhassen  und  Genossenschaften.  Hire  Beamten, 
ihr  Aufbau  und  ihr  Arbeitsfeld.  (Stuttgart:  Muth.  1921.  Pp.  80. 
11  M.) 

Brunton,  J.  Bankers  and  borrowers.  Introduction  by  Ernest  Sykes. 
(Birmingham,  Eng. :  Edward  Arnold  &  Co.      1921.      7s.  6d.) 

"A  practical  explanation  of  the  limitations  placed  by  statute  or  by 
the  common  law  on  the  borrowing  powers  of  a  very  wide  class  of  bor- 
rowers." 

Copeland,  D.  B.  Currency  and  prices  in  Australia.  The  Joseph  Fisher 
lecture  in  commerce.      (Adelaide:  G.  Hassell  &  Son.      1921.) 

Diehl,  K.  Ueber  Fragen  des  Geldwesens  und  der  Valuta  wahrend  des 
Krieges  und  nach  dem  Kriege.  Second  edition.  (Jena:  Fischer.  1921. 
Pp.  vi,  204.      24  M.) 

Doring,  H.  Die  Geldtheorien  seit  Knapp.  Ein  dogmenhistorischer  Ver- 
such.      (Greifswald:  Bamberg.      Pp.  viii,  239.      21   M.) 

Durrenger,  R.  La  circulation  monetaire  dans  les  pays  occupes  au  cours 
de  la  guerre  par  les  Empires  centraux.  (Strasbourg:  Heitz.  1921.  Pp. 
154.) 

Elster,  K.  Die  deutsche  Not  im  Lichte  der  TVahrungstheorie.  Gesam- 
melte  Aufsdtze.      (Jena:  Fischer.      1921.      Pp.  iv,  124.      16  M.) 

Englander,  O.     Bestimmungsgriinde  des  Preises      (Reichenberg:   Stiepel. 

1921.      Pp.  300.      52  M.) 
Eppich,  E.      Geld,  eine  sozialpsychologische  Studie.      (Munich:  Rosl.  1921. 

Pp.  138.) 

Feitelberg,  M.  Das  Papiergeldwesen  im  Rdte-Russland.  Statistische 
Beitrdge  zur  JVdhrungsfrage  Russlands.  (Berlin:  R.  L.  Prager.  1920. 
Pp.  51.) 

Franz,  R.  Die  deutschen  Banken  im  Jahre  1919,  zugleich  eine  vollstdndige 
Statistik    der    deutschen    Banken    seit    dem    Jahre    1883.      Revised    by 


150  Reviews  and  New  Books  [March 

Eggebrecht,      (Berlin:   "Der   Deutsche   Oekonomist."     1921.     Pp.    4'4. 
7.50  M.) 

Hantos,  E.  Die  Zuku7ift  des  Geldes.  (Stuttgart:  Ferdinand  Enke.  1921. 
Pp.  76.      11.20  M.) 

Heyn,  O.  Ueber  Geldschopfung  und  Inflation.  (Stuttgart:  Ferdinand 
Enke.      1921.      Pp.  79.      12  M.) 

.     Die    Noteninflation     als     Krankheitserscheinung     unseres 

Wirtschaftslehens.      (Munich:  B.  Heller.      1920.      Pp.  42.      2  M.) 

HoLDswoRTH,  J.  T.     Acceptance  syndicate  plan  for  financing  exports. 

An  address  delivered  before  the  annual  convention  of  the  Association 
of  Reserve  City  Bankers.  (Pittsburgh,  Pa.:  Author,  Bank  of  Pittsburgh 
N.  A.      1921.      Pp.  27.) 

Johnson,  J.  F.  Money  and  currency,  in  relation  to  industry,  prices,  and 
the  rate  of  interest.      (Boston:  Ginn.      1921.      Pp.  x,  425.     $3.) 

The  first  edition  was  published  in  1906.  New  material  is  now  added 
bringing  the  review  of  monetary  and  banking  legislation  up  to  date. 
An  analysis  is  made  of  the  Federal  Reserve  act  and  the  effects  of  its 
operations  are  considered.  Banking  and  price  statistics  are  added  for 
recent  dates. 

Johnston,  W.  B.  A  federal  hank  in  every  county  seat.  (Kansas  City,  Mo.: 
W.  B.  Johnston  Co.     1921.     Pp.  123.) 

Knapp,  G.  F.  Staatliche  Theorie  des  Geldes.  Third  edition,  revised. 
(Munich:  Duncker  &  Humblot.      1921.      Pp.  xvi,  262.     45  M.) 

Kniffin,  W.  H.  American  banking  practice.  A  treatise  of  the  practical 
operation  of  a  bank,  intended  for  students,  bank  employees  and  others 
zcho  "would  know  of  the  conduct  of  a  bank  under  recognized  American 
practice,  with  which  is  combined  the  Negotiable  Instruments  law,  uniform 
in  forty-six  states.  (New  York:  McGraw-Hill.  1921.  Pp.  xii,  389. 
$3.50.) 

Krebs,  E.  and  Goetz,  B.  Geschichte  des  Bankhauses  J.  A.  Krebs  in 
Freiburg  im  Breisgau  1721-1921.  (Freiburg  i.  Br.:  Herder  &  Co.  1921. 
Pp.  vii,  47.) 

Levy,   R.    G.     L'initation   fnanciere.      (Paris:    Librairie    Hachette.      1921. 

7  fr.) 

LoKiiR,  J.  Das  deutsche  Bankxcesen.  (Munieli:  J.  Schweitzer.  1921. 
Pp.  171.      22  M.) 

MiTRA,  J.  C.  A  state  bank  for  India.  (Calcutta:  Mitra  and  Sons.  1921. 
Pp.  20.      8  annas.) 

Paton,  T.  B.,  Jr.  Digest  of  legal  opinions  of  Thomas  B.  Paton,  general 
counsel  of  the  American  Bankers  Association,  190S-1921,  with  a  digest 
and  legal  citations.  Complete  edition,  1921.  (New  York:  American 
Bankers  Assoc.      1921.) 

PiNERo,  N.      La  moneda,  el  credito  y  los  bancos  en  la  Argentina.      (Buenos 

Aires:  J.  Menendez.      1921.      Pp.  400.) 
PiNHEiRO,  N.      Fiscalica^ao  bancaria.      (Rio  de  Janeiro:  Typ.  Alba.      1921. 

Pp.  228.) 


1922]  Money,  Prices,  Credit,  and  Banking  151 

RoBB,  T.  B.  The  guaranty  of  hank  deposits.  (Hart,  Schaffner  &  Marx 
prize  essays.      (Boston:  Houghton  Mifflin.      1921.      Pp.  xii,  225.     $2.50.) 

Schmidt-Essen,  A.  Valutafibel.  Eine  Einfuhrung  in  die  Fragen  des  Geld- 
wesens.      (Jena:  Fischer.      1921.      Pp.  vii,  100.) 

Steiner,  F.  Die  Wdhrungsgesetzgehung  der  Sukzessionsstaaten  Oster- 
reich-Ungarns.  Eine  Sammlung  einschldgiger  Gesetze,  Verordnungen 
und  behordlicher  Verfilgungen  von  1892  bis  1920.  Vol.  II.  (Vienna: 
Verband  Osterreichischer  Banken  und  Bankiers.      1921.      Pp.   367-679.) 

Stoll,  Sir  Oswald.  Broadsheets  on  national  finance.  (London:  W.  J. 
Roberts.      1921.      Pp.   130.      Is.  6d.) 

.     Danger  ahead:  being  notes  on  the  British  Bankers'  Appeal 

to  the  Government.      (London:  W.  J.  Roberts.     1921.     Pp.  22.) 

Tadouant,  J.  Les  rapports  de  la  Banque  de  France  et  de  I'Etat  pendant 
la  guerre  de  1914-      (Paris:  Librairie  Rousseau.      1921.      12.50  fr.) 

TiLLYARD,  F.  Banking  and  negotiable  instruments.  A  manual  of  prac- 
tical law.  Sixth  edition,  thoroughly  revised.  (London:  A.  and  C.  Black. 
1921.      10s.  6d.) 

Thomas,  S.  E.  The  principles  and  arithmetic  of  foreign  exchange.  (Lon- 
don: Macdonald  &  Evans.      1921.      Pp.  209.      7s.  6d.) 

DE  ToMAZ,  R.  and  Coeylas,  R.  L' organisation  du  credit.  Problemes 
d'apres-guerre.      (Paris:  Giard.      1921.      7  fr.) 

Westerfield,  R.  B.  Banking  principles  and  practice.  I,  Elements  of 
money,  credit  and  banking.  II,  The  banking  system  of  the  United  States. 
Ill,  Domestic  banking — cash  and  deposit  operations.  IV,  Domestic  bank- 
ing— earning  assets.  V,  The  foreign  division.  (New  York:  Ronald. 
1921.      Pp.  1370.     $12.) 

Willis,  H.  P.  American  banking.  Revised  edition.  (Chicago:  La  Salle 
Extension  Univ.     1921.     Pp.  x,  336.) 

Banken-Organisation.  I,  Organisation  einer  Grossbank,  by  Carl  Porges. 
II,  Organisation  einer  Volkshank,  by  W.  Rehmer.  Ill,  Buchhdlterische 
Einrichtungen  in  einem  mittleren  Bankbetriebe,  by  E.  Schach.  Third 
edition.      (Stuttgart:  C.  E.  Poeschel.      1921.      Pp.  vii,  245.      28  M.) 

Changes  in  the  cost  of  living,  July,  191Jf — July,  1921.  Research  report  no. 
39.      (New   York:    National    Industrial    Conference    Board.      1921.      Pp. 

25.) 

Den  Danske  Landmandsbank  Hypothek-og  Vekselbank  Aktieselskab,  1871- 
1921.      (Copenhagen:  Offices  of  the  Bank.      1921.) 

Exchange  stabilization.  Hearings  before  the  Committee  on  Banking  and 
Currency  of  the  House  of  Representatives  on  bill  H.  R.  8404-  (Wash- 
ington :  Gov.  Prtg.  Office,  Supt.  Docs.      1921.      Pp.  51,  with  charts.) 

Guttag's  foreign  currency  and  exchange  guide.  (New  York:  Guttag  Bros., 
52  Wall  Street.      1921.      Pp.  130.      $1.50.) 

The  monetary  outlook.  The  Garton  Foundation.  (London:  Harrison  & 
Sons.      1921.      Pp.  76.      Is.) 

Monetary  policy:  being  the  report  of  a  Sub-committee  on  Currency  and  the 
Gold  Standard.  British  Association  for  the  Advancement  of  Science. 
(London:  King.      1921.      Pp.  75.      2s.  6d.) 


152  Reviews  and  New  Books  [March 

Standard   hanking.      (New    York   City:   American  Inst,  of  Banking.     1921. 
Pp.  480.) 

Svenska  Handelsbanken  1871-1921.     A  retrospect.      (Stockholm:  Offices  of 
the  Bank.      1921.) 

Public  Finance,  Taxation,  and  Tariff 

Tariffs:   A   Study   in  Method.     By   T.   E.    G.   Gregory.      (London: 
Charles  Griffin  &  Company,  Ltd.      1921.     Pp.  xi,  518.) 

Mr.  Gregory's  book  is  different  from  anything  on  the  subject  which 
I  have  come  across.  It  is  entitled  "A  Study  in  Method,"  but  is  not 
at  all  one  of  those  inquiries  on  the  methodology  of  economics  with 
which  we  are  familiar.  It  is  concerned  not  with  the  substantive 
effects  of  tariff  measures,  or  the  methods  by  which  those  effects  can  be 
ascertained,  but  with  the  administrative  and  legislative  ways  of  carry- 
ing out  a  given  policy.  It  deals  with  the  forms  of  tariffs,  questions 
of  customs  administration,  the  classification  of  commodities,  specific 
and  ad  valorem  duties,  free  ports,  frontier  trade,  and  the  like.  Allied 
to  questions  of  this  sort,  but  having  an  interest  of  a  somewhat  different 
kind,  are  a  number  of  chapters  on  commercial  treaties,  reciprocity 
relations,  retaliation,  colonial  preferences,  the  preferential  system  of 
the  British  Empire.  There  is  a  brief  but  excellent  appendix  upon 
the  tariff  as  a  revenue  instrument. 

A  book  of  this  sort,  well  done,  is  of  no  little  interest  to  the  economist, 
and  of  the  highest  value  to  the  legislator  and  administrator,  and  it  is 
very  well  done  indeed.  There  is  no  source  in  which  the  wide  range 
of  information  here  given  can  be  conveniently  found.  Much  of  the 
information  is  so  scattered,  and  has  been  unearthed  by  Mr.  Gregory 
from  such  obscure  and  inaccessible  sources,  that  it  is  made  available 
virtually  for  the  first  time.  Every  student  of  tariff  problems  owes 
a  debt  of  gratitude  to  ]\Ir.  Gregory  for  his  painstaking  and  able  work. 

It  is  inevitable  that  a  book  of  this  sort,  largely  informational  in 
character,  should  be  complete  only  up  to  the  moment  of  its  publication. 
The  constant  changes  in  legislation  add  new  and  pertinent  matter 
from  day  to  day.  Within  a  few  years  a  new  edition  will  be  called 
for.  By  way  of  example  of  the  impossibility  of  bringing  and  keeping 
such  a  book  always  up  to  date,  I  note  the  description  (pp.  221-225) 
of  the  abortive  anti-dumping  bill  in  Great  Britain  (unfortunately 
referred  to  in  the  text  as  an  "act")  which  has  now  been  superseded 
by  the  act  finally  passed  in  1921. 

Mr.  Gregory's  discussion  of  the  various  questions  of  legislation  and 
administrative  policy  is  well  done  throughout.  So  far  as  I  have 
been  able  to  check  the  statements  of  the  text,  they  are  accurate  as  well 
as  judiciously  selected.  What  he  says  of  the  classification  and  special- 
ization, of  specific  and  ad  valorem  duties,  of  valuation,  is  fair  minded 


1922]  Public  Finance,  Taxation,   and  Tariff  153 

and  discriminating.  The  same  is  true  of  his  chapters  upon  tariff 
treaties  and  colonial  preferences.  These  probably  will  be  of  most 
interest  to  economists,  for  they  give  in  compact  form  a  statement  of 
the  situation  as  it  now  stands  and  is  likely  to  endure  for  a  considerable 
time.  It  is  due  to  Mr.  Gregory  also  to  remark  that  while  in  general 
he  abstains  from  a  consideration  of  the  economic  questions  involved, 
he  gives  clear  evidence  of  his  capacity  to  deal  with  them.  His  discus- 
sion of  retaliation,  on  pages  247-250,  gives  abundant  evidence  of  his 
ability  to  handle  questions  of  economic  principle. 

F.  W.  Taussig. 
Harvard  University. 

NEW    BOOKS 

Bernis,  F.  Catedrdtico  dc  la  Universidad  de  Salamanca,  La  Hacienda 
Espanola.      (Barcelona:  Editorial  Minerva,  S.  A.      Pp.  360.      4  pesos.) 

BoNNARD,  R.  Les  f.nances  locales  et  la  reforme  des  impots  nouveaux. 
(Paris:  Giard.      1921.      4  fr.) 

Bonnet,  G.  and  Auboin,  R.  Les  finances  de  la  France.  I,  Le  mecanisme 
financier  frangais:  budget  et  impots.  II,  La  situation  financiere  en  1921. 
Ill,  La  restauration  des  finances  de  la  France.  (Paris:  Payot.  1921. 
7.50  fr.) 

BoQUET,  L.  La  reforme  des  impositions  locales.  (Paris:  Tenin.  1921. 
Pp.  61.) 

von  Breunig,  G.  and  von  Lewinskv,  K.  Kommentar  zum  Gesetz  iiber  das 
Reichsnotopfer  vom  31.  Dezember  1919 — 30.  April  1920.  (Berlin:  Otto 
Liebmann.      1921.      Pp.  xxxii,  598.) 

Cliff,  A.  B.     Imperial  taxation.      (London:  Estates  Gazette,  Ltd.      1921.) 

Combat,  F.  J.  La  taxe  sur  le  chiffre  d'affaires  et  la  taxe  de  luxe.  Comp- 
tabilite,  obligations  des  commergants,  plan  comptable.  (Paris:  Berger- 
Levrault,  5  Rue  des  Beaux-Arts.) 

CoMSTOCK,  A.  State  taxation  of  personal  incomes.  Columbia  University 
studies  in  history,  economics  and  public  law,  vol.  CI,  no.  1.  (New  York: 
Longmans.      1921.      Pp.  246.     $2.50.) 

Einaudi,  L.  II  Regolamento  per  VAvocazione  dei  Profitti  di  Guerra  alio 
Stato.      (Rome.      1921.      Pp.  13.) 

Relazione  delta  Commissione  Parlamentare  Consultiva  per  VApplicazione 
delta  Legge  2Jf.  Septembre  1920,  N.  1298  sidl'  Avocazione  dei  Profitti  di 
Guerra  alio  Stato.      (Rome:  Camera  dei.      Deputati.      1921.      Pp.  136.) 

Two  years  after  the  armistice  was  signed,  Italy  enacted  a  measure 
drastically  taxing  war  profits  reckoned  as  earnings  in  excess  of  the 
supposedly  normal  returns  of  two  pre-war  years.  Senator  Einaudi  was 
a  member  of  the  Advisory  Commission  which  elaborated  the  principles 
to  govern  application  of  the  law  itself,  and  he  wrote  its  report.  Criticism 
of  the  law  itself,  however,  appears,  not  therein,  but  in  a  separate 
pamphlet  published  over  his  own  name.  There  are  stressed  a  number  of 
serious  defects   in  the  legislation:  its  failure,   for  example,  to  make  the 


154  Reviews  and  New  Books  [March 

necessary  allowance  for  currency  inflation;  its  tendency  to  ignore  earn- 
ings due  to  increased  war-time  effort  and  diligence;  and  in  general  the 
grave  danger  that,  in  future  emergencies,  producers,  seeing  no  prospect 
of  gain,  will  relax  their  efforts.  Robert  F.  Foerster. 

FiTZPATRicK,  J.  T.,  editor.  Tax  law  of  the  state  of  New  York.  (Albany, 
N.  Y.:  Bender  &  Co.      1921.     Pp.  iii,  314.) 

Flora,  F.  Manuele  della  scienza  delle  finanze.  Sixth  edition.  (Leghorn: 
Guisti.      1921.      Pp.  936.) 

FoLDES,  B.  Finanzwissenschaft.  (Jena:  Fischer.  1920.  Pp.  xiv,  686. 
33  M.) 

Hoffman,  J.  H.  and  Wood,  D.  M.  Taxation  of  federal,  state  and  munic- 
ipal bonds.      (New  York:  Wilbur  &  Hastings.      1921.      Pp.  xiv,  116.) 

Hunter,  M.  H.  Outlines  of  public  finance.  (New  York:  Harper.  1921. 
Pp.  533.) 

Janniot,  a.  Les  valeurs  mobilieres  etrangeres  et  les  trois  taxes.  (Paris: 
Dunod.      1921.      Pp.  xx,  258.      18  fr.) 

Jastrow,  J.  Finanzen.  Textbiicher  zu  Studien  iiber  Wirtschaft  und 
Staat,  vol.  6.  (Berlin:  Vereinigung  Wissenschaftlicher  Verleger.  1921. 
Pp.  vii,  116.      10  M.) 

Jeze,  G.  Cours  de  science  et  de  legislation  financieres.  (Paris:  Giard. 
1921.      30  fr.) 

Meda,  F.  La  riforma  generalle  della  imposte  dirette  sui  redditi.  (Mail- 
and:  Fratelli  Treves.      1920.     Pp.  436.     8  1.) 

Melchior,  C.  Deutschlands  finanzielle  V erpflichtungen  aus  dem  Friedens- 
vertrdge.      (Berlin:  Hans  Robert  Engelmann.      1920.      Pp.  26.) 

DE  Nava,  G.  Brief  notes  on  the  situation  of  the  budget  and  of  the 
treasury.      (Rome:  Prtg.  Office,  Chamber  of  Deputies.      1921.      Pp.  18.) 

Ounsworth,  J.  L.  Income  tax  handbook.  (London:  Collins.  1921.  2s. 
6d.) 

Palmer,  H.  W.  Income-tax  guide.  1921  edition,  revised.  (London: 
Financial  Times,  Ltd.      1921.      Is.) 

Pfau,  E.  F.  Industriepolitische  Gesichtspunkte  in  der  Besteuerung. 
(Stuttgart:  Ferdinand  Enke.      1921.      Pp.  148.      22.60  M.) 

Seligman,  E.  R.  a.  Essays  in  taxation.  (New  York:  Macmillan.  1921. 
Pp.  806.) 

Smith,  R.  Tax  reform  in  South  Carolina,  xcith  summary  of  the  report  of 
the  Joint  Special  Committee  on  Revenue  and  Taxation.  Bull.  no.  101. 
(Columbia,  S.  C:  Univ.  of  South  Carolina.      1921.      Pp.  51.) 

Stamp,  Sir  Josiah.  Wealth  and  taxable  capacity.  The  Newmarch  lec- 
tures of  1920-1921.      (London:  King.      1921.      I'Os.  6d.) 

Thornton,  A.  B.  The  nation's  financial  outlook.  (London:  King.  1921. 
2s.  6d.) 

Since  the  war  England  lias  been  particularly  interested  in  American 
financial  affairs,  private  and  public.  Conversely,  America  is  today  vitally 
interested  in  affairs  British.      Bv  far  the  best  book  I  have  found  so  far 


1922]  Public  Finance,   Taxation,  and  Tariff  155 

on  the  British  conditions  is  this  short  and  popular  treatise  by  Mr. 
Thornton.  After  stating  clearly  but  briefly  the  national  debt  situation 
and  analyzing  the  budget — past,  present  and  future — and  considering 
local  government  finances,  Mr.  Thornton  proceeds  to  give  figures  on  the 
national  wealth  and  the  taxable  capacity  of  the  nation.  He  then  outlines 
a  taxation  policy.  His  idea  is  that  the  budget  may  be  balanced  at 
approximately  1,000,000,000  pounds.  Since  he  gives  the  total  taxable 
income  as  3,700,000,000,  this  seems  a  very  high  figure.  What  he  does 
not  point  out  specifically — though  it  is  easily  deduced — is  that,  since 
approximately  half  of  this  is  on  account  of  internal  debt,  it  is,  so  far  as 
the  nation  is  concerned,  really  a  bookkeeping  entry.  If  we  deduct 
500,000,000  pounds  from  each  side  we  get  a  tax  of  500,000,000  approxi- 
mately, coming  from  a  national  income  of  3,200,000,000  pounds.  This  is 
not  a  very  different  result  from  present  figures  showing  the  proportion 
of  public  expenditures  to  private  income  in  the  United  States. 

The  ai'thor  also  briefly  considers  the  effects  on  the  budget  of  the 
Irish  problem,  the  railway  situation,  and  the  housing  program.  He 
does  not  think  the  separation  of  Irish  finances  will  greatly  affect  England 
but  admits  that  housing  losses  and  railway  losses  have  added  a  real 
burden.      He  does  not  approve  a  capital  levy  nor  a  sales  tax. 

After  considering  deflation,  the  foreign  outlook  and  overseas  trade  and 
the  reparations  question  he  devotes  a  short  chapter  to  warning  the  Eng- 
lish people  of  the  gravity  of  their  situation,  and  in  his  final  chapter  he 
sums  up  his  conclusions.  His  principal  suggestions  are  that  foreign 
trade  be  pursued  with  renewed  vigor ;  that  wealth  submit  gracefully  to 
the  inevitable;  that  industry  be  not  employed  as  a  tax-collecting  medium; 
that  taxation  be  direct  in  order  to  avoid  shifting  and  waste;  that  the 
inheritance  taxes  be  increased  to  double  their  present  yield;  and  that  a 
financial  census  be  taken. 

All  of  this  is  little  more  thart  a  pamphlet  that  can  be  read  in  a  couple 
of  hours.  It  is  remarkably  well  done.  The  only  noticeable  flaw  is  the 
suggested  table  of  inheritance  tax  changes,  which  is  too  complicated  to 
be  practical.  All  of  the  other  statistical  tables  and  charts,  both  as  to 
form  and  content,  are  typical  of  the  high  standard  of  scholarship  set  by 
that  estimable  British  body,  the  Surveyors'  Institute.  The  book  is  worth 
reading  and  worth  keeping. 

W.  B.  Belkxap. 

ToLLEY,  C.  H.  Income  tax,  excess  profits  duty,  corporation  profits  tax, 
super  tax,  etc.,  chart  of  rates,  alloxcances,  and  abatements  for  1921-1922, 
and  seventeen  previous  years.  Sixth  edition.  (London:  Waterlow  & 
Sons.      1921.      2s.  6d.) 

VINCENT,  G.  L'impot  sur  le  ckiffre  d'affaires.  Traite  theorique  et  pra- 
tique.     (Paris:  Lib.  Roustan.      1921.      Pp.  172.      10  fr.) 

Wende.  Die  Tarifvertrage  im  Deutschen  Reiche  am  Ende  des  Jahres 
1919.  Nebst  einem  Anhange:  die  Reichstarifvertrdge  am  Ende  des 
Jahres  1920.  Bearbeitet  im  Reichsamt  fiir  Arbeitsvermittlung.  (Berlin: 
Reimar  Hobbing.      1921.      Pp.  45,  58.) 

WiLKE,  G.  Die  Entwicklung  der  Theorie  des  staatlichen  Steuersystems  in 
der  deutschen  Finanzwissenschaft  des  19.  Jahrhunderts.  (Stuttgart: 
Cotta.      1921.      Pp.  108.) 


156  Reviews  and  New  Books  [March 

British  finance  during  and  after  the  war,  191Jf-1921.  Being  the  result  of 
investigations  and  materials  collected  by  a  committee  of  the  Economics 
Section  of  the  British  Association.  (London:  Pitman.  1921.  Pp.  479. 
15s.) 

Imperial  preference.  Chronological  statement  of  the  progress  of  the  move- 
ment. Published  for  the  Tariff  Commission.  (London:  King.  1921. 
6d.) 

Taxation  and  cost  of  living.  Second  interim  report  of  the  Joint  Committee 
on  the  Cost  of  Living,  Parliamentary  Committee,  Trades  Union  Con- 
gress.     (London:  Cooperative  Prtg.  Soc.      1921.      Pp.  47  Is.) 

Population  and  Migration 

NEW   BOOKS 

Capek,  T.  The  Czech  (Bohemian)  community  of  New  York;  with  intro- 
ductory remarks  on  the  Czecho-Slovaks  in  the  United  States.  (New 
York:  America's  Making,  Inc.      1921.      Pp.  93.) 

Drysdale,  C.  V.  The  Malthusian  doctrine  and  its  modern  aspects.  (Lon- 
don: The  Malthusian  League.      1921.      Pp.  68.) 

Grotjahn  :  Gehurte?iriickgang  und  Gehurtenregelung.  Second  edition. 
(Berlin:  Oskar  Coblenz.      1921.      Pp.  378.     25  M.) 

Sartorius  von  Waltershausen,  a.  Die  Vereinigten  Staaten  als  heutiges 
und  kiinftiges  Eintcanderungsland.  (Stuttgart:  Ferdinand  Enke.  1921. 
Pp.  70.      10.20  M.) 

von  Wassermann,  R.  V olkswirtschaftliche  Betrachtungen  zur  Steigerung 
der  Tuber ktdosesterblichkeit  wdhrend  des  Krieges.  Greifswalder  staats- 
wissenschaftliche  Abhandlungen,  no.  4.  (Greifswald:  L.  Bamberg.  1920. 
Pp.  88.      20  M.) 

Admission  of  aliens  in  excess  of  percentage  quotas  for  June.  Hearings  be- 
fore the  Immigration  and  Naturalization  Committee,  June  10,  1921. 
Serial  4.      (Washington:  Gov.  Prtg.  Office,  Supt.  Docs.      1921.        Pp.  ii, 

50.) 

Colored  xvomen  as  industrial  workers  in  Philadelphia.  (Philadelphia: 
Consumers'  League  of  Eastern  Pennsylvania,  814  Otis  Bldg.  1921. 
Pp.  47.) 

Emergency  immigration  legislation.  Hearings  before  Committee  on  Immi- 
gration, U.  S.  Senate,  GG  Cong.,  3  Sess.,  on  II.  R.  14461.  Parts  6-12. 
(Washington:  Gov.   Prtg.  Office,  Supt.   Docs.      1921.      Pp.  289-579.) 

Social  Problems  and  Reforms 

NEW    BOOKS 

AsKEW,  J.  B.  Pros  and  cons;  a  newspaper  reader's  and  debater's  guide  to  I 
to  the  leading  controversies  of  the  day,  political,  social,  religious,  etc.  i 
Sixth  edition."      (New  York:  Dutton.      1920.      Pp.  vii,  200.     $1.50.) 

Babson,  R.  W.  Enduring  investments.  (New  York:  Macmillan.  1921. 
Pp.  190.      $1.50.) 


1922]  Social  Problems  and  Reforms  157 

Part  I  is  a  discussion  of  the  sources,  uses,  abuses,  and  dangers  of 
wealth.  In  the  second  part  "another  slant  is  given  to  the  word  enduring. 
Instead  of  stock  and  bond  investments,  human  souls,  Christian  educational 
institutions,  and  various  forms  of  benevolences  are  emphasized  as  the 
only  truly  enduring  investments." 

Brandt,  L.  How  much  shall  I  give?  (New  York:  The  Frontier  Press, 
100  West  21st  Street.      1921.      Pp.  153.) 

Breckinridge,  S.  P.  New  homes  for  old.  (New  York:  Harper.  1921. 
Pp.  366.     $2.50.) 

Brown,  C.  R.  Social  rebuilders.  (New  York:  The  Abingdon  Press.  1921. 
Pp.  188.) 

BuLLARD,  A.  The  A  B  C's  of  disarmament  and  the  Pacific  problems. 
(New  York:  Macmillan.      1921.      Pp.  viii,  122.) 

Contains  a  chapter  on  "The  vital  interests  of  Japan — economic." 

Campbell,  J.  C.  The  southern  highlander  and  his  homeland.  (New  York: 
Russell  Sage  Foundation.      1921.      Pp.  xxii,  405.) 

Donham,  S.  a.  Spending  the  family  income.  (Boston:  Little,  Brown. 
1921.     Pp.  xi,  174.     $1.75.) 

DooLEY,  W.  H.  Principles  and  methods  of  industrial  education.  (London: 
Harrap.      1921.      Pp.  xi,  257.) 

Eaves,  L.  Gainful  employment  for  handicapped  women.  Cooperative 
social  research  by  Simmons  College  School  of  Social  Work,  Boston  Coun- 
cil of  Social  Agencies  and  the  Women's  Educational  and  Industrial  Union, 
report  no.  1.  (Boston,  Mass.:  Women's  Educ.  and  Ind.  Union.  1921. 
Pp.  32.     25c.) 

.      Old-age  support  of  women   teachers.     Provisions  for  old 

age  made  by  women  teachers  in  the  public  schools  of  Massachusetts. 
Studies  in  economic  relations  of  women,  vol.  XI.  (Boston,  Mass.: 
Women's  Educ.  and  Ind.  Union.      1921.      Pp.  122.      75c.) 

Faraday,  W.  B.  Democracy  and  capital.  (London:  John  Murray.  1921. 
Pp.  314.      8s.) 

Critical  of  socialism  and  radical  trade-unionists. 

Frank,  J.  C.  Vice  and  health;  problems — solution.  (Philadelphia,  Pa.: 
Lippincott.      1921.      Pp.   174.     $1.50.) 

Gamble,  S.  D.  and  Burgess,  J.  S.  Peking:  a  social  survey,  conducted 
under  the  auspices  of  the  Princeton  University  Center  in  China  and  the 
Peking  Young  Men's  Christian  Association.  (New  York:  Doran.  1921. 
Pp.  538.     $5.) 

GoDDARD,  H.  H.  Juvenile  delinquency.  (New  York:  Dodd,  Mead.  1921. 
Pp.  120.     $1.50.) 

Grace,  A.  G.  Immigration  and  community  Americanization.  (Minne- 
apolis, Minn.:     Acme  Prtg.  and  Pub.  Co.      1921.      Pp.  94.) 

Hayes,  A.  W.  Rural  community  organisation.  (Chicago:  Univ.  of  Chicago 
Press.      1921.      Pp.  128.      $1.50.) 

Hayes,  B.  T.  American  democracy ;  its  history  and  problems.  (New 
York:  Holt.      1921.      Pp.  xxxvi,  405.     $1.56.) 


158  Reviews  and  New  Books  [March 

HoBHousE,  L.  T.  The  rational  good.  (New  York:  Holt.  1921.  Pp. 
xxii,  237.) 

Holmes,  S.  J.  The  trend  of  the  race:  a  study  of  present  tendencies  in  the 
biological  development  of  civilized  mankind.  (New  York:  Harcourt. 
1921.     $4.) 

Kallen,  H.  M.  Zionism  and  world  politics.  Edited  by  William  James. 
(Garden  City,  N.  Y.:  Doubleday,  Page.      1921.) 

Kaufmann,  H.  Das  Deutsche  W ohnungsprogramm  1921  his  1925.  (Ber- 
lin: Industriebeamtenverlag.      1921.     Pp.  36.      3.50  M.) 

Mangold,  G.  B.  Children  born  out  of  wedlock:  a  social  study  of  illegiti- 
macy, with  particular  reference  to  the  United  States.  (Columbia,  Mo.: 
Univ.  of  Missouri.      1921.     Pp.  209.) 

March,  L.  and  others.  Problemes  actuels  de  I'economique.  Numero 
special  de  la  Revue  de  Metaphysique  et  de  Morale.  (Paris:  Librairie 
Armand  Colin.      1921.      Pp.  vi,  477.      20  fr.) 

MuiR,  R.  Liberalism  and  industry.  Towards  a  better  social  order. 
(Boston:  Houghton  Mifflin.      1921.      Pp.  xii,  208.     $1.75.) 

Newsholme,  a.  Prohibition  in  America  and  its  relation  to  the  problem 
of  public  control  of  personal  conduct.      (London:  King.      1921.      Pp.  68. 

2s.  6d.) 

Rainwater,  C.  E.  The  play  movement  in  the  United  States.  (Chicago: 
Univ.  of  Chicago  Press.      1921.      Pp.  350.     $2.75.) 

Robinson,  L.  N.  Penology  in  the  United  States.  (Philadelphia,  Pa.: 
John  C.  Winston.      1921.      Pp.  340.      $3.) 

Weyl,  W.  E.  Tired  radicals,  and  other  papers.  (New  York:  Huebsch. 
1921.      Pp.  223.) 

Includes  essays  on  The  only  truly  revolutionary  class.  The  new  wealth. 
The  conquering  Chinese,  Japan's  thwarted  emigration,  Japan's  menacing 
birth-rate,  The  clash  of  the  races. 

Wood,  J.  N.  Democracy  and  the  will  to  power.  Introduction  by  H.  L. 
Mencken.  The  free  lance  books,  V.  (New  York:  Knopf.  1921.  Pp. 
245.      $2.) 

Woolley,  H.  T.  and  Hart,  H.  Feeble-minded  ex-school  children.  A  study 
of  children  who  have  been  students  in  Cincinnati  special  schools.  (Cincin- 
nati, Ohio:  Helen  S.  Trounstine  Foundation,  25  East  Ninth  Street.  1921. 
Pp.  264.      50c.) 

Woolston,  H.  B.  Prostitution  in  the  United  States.  Vol.  I,  Prior  to  the 
entrance  of  the  United  States  into  the  World  War.  (New  York:  Century. 
1921.      Pp.  xiii,  360.     $2.50.) 

Child  welfare.  The  Annals  of  the  American  Academy  of  Political  and 
Social  Science,  vol.  VCVIII.  no.  187.  (November,  1921).  (Phila- 
delphia, Pa.:  Editorial  Office,  39th  Street  and  Woodland  Avenue.  1921. 
Pp.  222.      $1.) 

Division  of  housing  and  town  planning,  annual  report,  1920.  Pub.  Doc. 
103.      (Boston.  Mass.:  Dept.  of  Public  Welfare.      1921.      Pp.  42.) 

Health  problems  of  xconien  in  industry.  Bull.  no.  18.  (Washington: 
Women's  Bureau.'    1921.      Pp.  11.) 


1922]  Insurance  and  Pensions  159 

Industrial  welfare  commission  report  to  August  31,  1920.  (Austin,  Texas: 
Commission.      1921.      Pp.  44.) 

Infant  mortality.  Statistical  report  for  1920  in  519  cities  of  the  United 
States.      (New  York:  American  Child  Hygiene  Assoc.      1921.      Pp.   16.) 

Physical  standards  for  working  children.  Children's  Bureau  pub.  79. 
(Washington:  Gov.  Prtg.  Office,  Supt.  Docs.      1921.     Pp.  24.) 

Plans  for  vocational  education  in  Texas.  Bull.  no.  125.  (Austin,  Texas: 
State  Board  for  Vocational  Education.      1920.      Pp.  74.) 

Rural  and  small  community  recreation.  (New  York:  Community  Service. 
1921.      Pp.  152.) 

Rural  organization.  Proceedings  of  the  third  National  Country  Life  Con- 
ference, Springfield,  Mass.  (Washington:  Univ.  of  Chicago  Press. 
1921.     Pp.  vii,  242.) 

Section  d'Hygiene  Urbaine  et  Rurale  et  de  Prevoyance  Sociale  du  Musee 
Social.  Proces-verhaux  des  seances  191Jf.-1916.  (Paris:  Musee  Social. 
1921.      Pp.  234.) 

Workers  education  in  the  United  States.  Report  of  proceedings,  first  Na- 
tional Conference  on  Workers  Education  in  the  United  States,  held  at 
the  New  School  for  Social  Research.  (New  York:  Workers  Education 
Bureau  of  America,  465  West  23d  Street.      1921.      Pp.144.      50c.) 

Insurance  and  Pensions 

NEW    BOOKS 

BossiERE,  R.  E.  Le  reglement  d'avaries  du  grand  abordage.  (Paris: 
Rousseau.      1921,     Pp.  36.) 

Burnet,  P.  Commodity  prices  and  life  insurance  in  the  United  States, 
1860-1920.  (Wilmington,  Del. :  Continental  Life  Insurance  Co.  1921. 
Pp.  9.) 

Cohen,  J.  L.  Insurance  against  unemployment.  With  special  reference 
to  British  and  American  conditions.      (London:  King.      1921.      Pp.   546. 

18s.) 

Eaufmann,  p.  Neue  Ziele  der  Sozialversicherung.  (Munich-Gladbach: 
Volksvereins  Verlag.      1921.      Pp.  16.) 

Lister,  T.  D.  Medical  examination  for  life  insurance.  (New  York:  Long- 
mans.     1921.      Pp.  viii,  168.     $3.75.) 

Richards,  E.  G.  The  experience  grading  and  rating  schedule.  A  system 
of  fire  insurance  rate-making  based  upon  average  fire  costs.  Revised 
edition.      (New  York:  Van  Nostrand  Co.      1921.      Pp.  157.) 

Stier-Somlo,  F.  Rechtsfragen  zur  Monopolisierung  des  Versicherungs- 
wesens.      (Berlin:  W.  Kohlhammer.      1921.      Pp.  59.     4.80  M.) 

Willard,  C.  E.  The  A  B  C  of  life  insurance.  Revised,  enlarged  and 
rewritten  by  Millard  Keyes.  Sixth  edition.  (New  York:  Spectator 
Co.      1921.      Pp.  104.) 

Fire  insurance  laws,  taxes  and  fees.  Twenty-first  annual  edition,  revised 
to  September  1,  1921.      (New  York:  Spectator  Co.      1921.      Pp.  586.) 


160  Reviews  and  New  Books  [March 

Gain  in  life  expectancy  of  insured  xvage-earners  as  a  result  of  health  service. 
Statistical  Bull.,  vol.  II,  no.  9.  (New  York:  Metropolitan  Life  Insurance 
Co.      1921.      Pp.  11.) 

The  Metropolitan  Life  Insurance  Company,  a  public  institution.  (New 
York:  Metropolitan  Life  Insurance  Co.      1921.      Pp.  42.) 

Reprinted  from  the  Eastern  Underxvriter  of  Netv  York,  April  8,  1921. 

Premiums  and  losses  in   the  various  states  of  the   United  States,  Alaska, 
District    of    Columbia    and   Haxvaii,    etc.,   1917-1919    and    1920.      (New     | 
York:  Thomas  Clagdon  Prtg.   Co.,  Inc.      1921.      Pp.   190.)  | 

Reports  of  fire  insurance  companies,  for  year  ending  December  31,  1920.     \ 
Sixteenth  annual  edition,  compiled   from  official  reports.      (New  York: 
Spectator  Co.      1921.      Pp.  384.      $5.) 

Workmen's  compensation  law  of  Arizona,  effective  May  31,  1921;  of  North  ' 
Dakota,  revised  with  amendments,  March  1921;  of  South  Dakota,  re-  i 
vised  with  amendments  and  supplementary  laws.  May,  1921.  (New  j 
York:  F.  R.  Jones,  80  Maiden  Lane.      1921.      Pp.   54,  24,  40.     $1,  $1,    i 

75c.)  j 

New  Jersey   workmen's  compensation  act  and  decisions  of  the   courts   of     l 
common    pleas,   with    references    to   negligence   and    compensation    cases 
annotated.      (Chicago:  Callaghan.      1921.      Pp.  51.)  \ 

Pennsylvania  xcorkmen's  compensation  act  and  decisions  of  the  Workmen's  .i 
Compensation  Board,  with  references  to  negligence  and  compensation  \ 
cases  annotated.      (Chicago:  Callaghan.      1921.      Pp.  62.)  . 

Workmen's  compensation  laws  of  Rhode  Island.  (Providence,  R.  I.:  E.  L.  , 
Freeman  Co.      1921.      Pp.  46.) 

Socialism  and  Co-operative  Enterprises 

j 

NEW    BOOKS 

BiANCHi,  U.  La  socialiszazione  del  sottosuolo  e  dell'  industria  mineraria.  | 
Biblioteca  di  Studi  Rivoluzionaria.  (Florence:  R.  Bemporad  &  Figlio.  ( 
1921.      Pp.  181.      5  1.)  ; 

BoRCHARDT,  J.,  editor.  The  people's  Marx.  (London:  International  Book-  | 
shops.      1921.      2s.  6d.)  j 

CuNow,  H.  Die  Marxsche  Geschichts-,  Gesellschafts-,  und  Staatstheorie.  | 
Grundziige  der  Marxschen  Soziologic,  vol.  I.  (Berlin:  Buchhandlung  fl 
Vorwarts.      1920.      Pp.   346.      42.50  M.)  li 

Davies,  a.  E.,  and  Evans,  D.  Land  nationalisation,  a  practical  scheme.  \ 
(London:  Fabian  Society.      1921.      4s.    lOd.)  j 

Drahn,    E.     Marx-Bibliographie.     Ein    Lebensbild    Karl    Marx'    in    bio-       I 
graphisch-bibliographischcn     Daten.      (Charlottenburg:     Deutsche     Ver- 
lagsgesellscliaftfiir  Politik  und  Geschichte.      1920.      Pp.56.     9  M.) 

Eucken,  R.      Socialism:  an  analysis.      (London:  T.  Fisher  Unwin.      1921. 

12s.  6d.) 
GoMPERs,  S.  and  Walling,  W.  E.      Out  of  their  oxen  mouths,  a  revelation 

and  an  indictment  of  sovietism.      (New  York:     Dutton.      1921.      Pp.  xx, 

265.      $2.) 


1922]  Socialism  and  Cooperative  Enterprises  161 

In  striking  contrast  to  Mr.  Hillquit's  scholarly  and  effective  criticism 
of  the  bolshevik  government,  noted  below,  is  the  violent  and  partisan 
attack  on  bolshevism  made  by  Gompers  and  Walling.  The  book  is  a 
continuation  of  Mr.  Walling's  Bolshevism  according  to  the  bolshevists. 
It  is  made  up  of  selected  quotations  from  speeches  and  documents  con- 
nected by  a  running  comment  in  Mr.  Walling's  most  caustic  style.  It  is 
an  appeal  to  prejudice,  thinly  masked  in  the  form  of  a  source  book. 

G.  B.  L.  Arner. 

Hahn,  W.  Streifzuge  durch  Sowjetrussland.  Eigene  Erlehnisse  und 
Erfahrungen  aus  dem  Lande  der  Bolschewihen.  (Vienna:  Moritz  Perles. 
1921.     Pp.  94.     8  M.) 

Hamilton,  M.  A.  The  principles  of  socialism.  (London:  I.  L.  P.  Infor- 
mation Committee.     1921.     6d.) 

HiLLQUiT,  M.  From  Marx  to  Lenin.  (New  York:  Hanford  Press.  1921. 
Pp.  157.     50c.) 

The  Russian  revolution,  as  Mr.  Hillquit  says,  is  "beyond  doubt  the 
greatest  event  in  the  history  of  socialism."  "With  one  blow  it  has  trans- 
ferred the  socialist  ideal  from  the  abstract  and  speculative  realms  of 
Utopia  to  the  solid  ground  of  reality."  It  has  "forced  a  critical  re- 
examination of  the  theoretical  bases"  of  socialism.  To  this  task  Mr. 
Hillquit  makes  a  real  contribution.  He  first  discusses  the  revolution 
itself,  the  theoretical  soviet  organization  and  the  actual  "dictatorship  of 
the  proletariat"  in  the  light  of  established  theory.  Although  he  is  sympa- 
thetic in  his  attitude,  he  feels  that  the  bolsheviki  have  attempted  an 
impossible  leap  from  feudalism  to  socialization.  In  the  final  chapters 
he  comments  on  the  relation  of  the  new  Russia  to  western  Europe  and 
America,  with  particular  attention  to  the  international  organization  of 
the  socialist  movement.  The  disruptive  tactics  of  the  leaders  of  the 
"Third  International"  are  shown  to  be  real  obstacles  to  an  effective  re- 
organization of  international  socialism.  G.  B.  L.  Arner. 

Hyndman,  H.  M.  The  economics  of  socialism.  (Boston:  Small,  Maynard 
&  Co.      1921.      Pp.  xvi,  286.) 

Kelsen,  H.  Sozialismus  und  Staat.  (Leipzig:  C.  L.  Hirschfeld.  1920. 
10  M.) 

Larin,  I.  and  Kritzmann,  L.  Wirtschaftslehen  und  wirtschaftlicher  Auf- 
bau  in  Soxvjet-Russland  1917-1920.  (Berlin:  A.  Seehof.  1921.  Pp. 
177.      15  M.) 

Lassalle,  F.  Nachgelassene  Briefe  und  Schriften.  Vol.  I,  Briefe  von 
und  an  Lassalle  his  181f8,  herausgegehen  von  Gustav  Mayer.  (Berlin: 
Deutsche  Verlagsanstalt.      1921.      Pp.  x,  357.      50  M.) 

Lavin,  p.,  translator.  A  B  C  of  communism.  Vol.  I.  (Detroit,  Mich.: 
The  Marxian  Educ.  Soc,  5941  Jos.  Campau  Avenue.      1921.      50c.) 

Lederer,  E.  Deutschlands  Wiederaufhau  und  xceltwirtschaftliche  Neuein- 
gliederung  durch  Sosialisierung.  (Tiibingen:  Mohr.  1920.  Pp.  120. 
12.25  M.) 

Lenz,  F.  Staat  und  Marxismus.  Grundlegung  und  Kritik  der  marxistis- 
chen  Gesellschaftslehre.  (Stuttgart:  J.  G.  Cotta.  1921.  Pp.  xxiv,  175. 
16  M.) 


162  Reviews  and  New  Books  [March 

LeRossignol,  J.  E.  What  is  socialism}  (New  York:  Crowell.  1921. 
Pp.  X,  267.     $2.) 

Many  of  the  chapters  in  this  revised  reprint  and  rearrangement  of  the 
author's  Scientific  Socialism  (1907)  show  only  minor  changes.  Two  or 
three  new  chapters  are  expansions  of  matter  in  the  earlier  book.  The 
most  important  new  material  consists  of  a  chapter  on  the  Sects  of  So- 
cialism describing  rather  superficially  the  different  schools  of  socialists 
(Fabianism  having,  for  example,  about  200  words  and  guild  socialism 
under  400),  a  chapter  on  Bolshevism  and  an  appendix  on  The  Non- 
partisan League.  The  title  is  rather  misleading,  for  about  three  chapters 
tell  what  socialism  is  and  the  other  ten  are  almost  entirely  an  argument 
against  the  doctrines  of  Marxian  socialism. 

H.  E.  Mills. 

Masaryk,  T.  G.  Sur  le  holchevisvie.  (Geneva:  Sonor,  46,  Rue  du  Stand. 
1921.      Pp.  38.) 

MicHELS,  R.  Le  proletariat  et  la  bourgeoisie  dans  le  mouvement  socialiste 
italien.      (Paris:  Giard.      1921.     20  fr.) 

Price,  G.  McC.  Socialism  in  the  test-tube;  a  candid  discussion  of  the 
principles,  the  relations,  and  the  effects  of  socialism.  (Atlanta,  Ga.: 
Southern  Pub.  Assoc.      1921.      Pp.   128.) 

PuECH,  J.  L.  La  tradition  socialiste  en  France  et  la  Societe  des  Nations. 
(Paris:  Gamier.      1921.      Pp.  230.) 

Radek,  K.  Proletarian  dictatorship  and  terrorism.  Translated  by  P.  Lavin. 
(Detroit,  Mich.:  The  Marxian  Educ.  Soc,  5941  Jos.  Campau  Avenue. 
1921.     20c.) 

ScHLOESSER,  R.  Dcr  Konsument  im  Rdtesystem.  Die  Interessenvertre- 
tung  der  V erbraucher  und  ihre  Einfiigung  in  die  organisatorische  Wirt- 
schaft.  (Berlin-Fichtenau:  Verlag  Gesellschaft  u.  Erziehung.  1921. 
Pp.  128.) 

Stroebel,  H.  Socialisation:  its  methods  and  assumptions.  Translated 
(London:  King.      1921.) 

ToTOMiANTZ,  V.  T.     Anthologie  cooperative.      (Paris:  J.  Povolozky  &  Cie. 

1921.      Pp.  253.      15  fr.) 
Webb,  S.  and  Webb,  B.      The  consumers'  cooperative  movement.      (London: 

Longmans.      1921.      Pp.  xv,  504.      18s.) 

Werner-Kautzsch.  Umsturz  und  SoziaUsmus.  Eine  sozialgeschichtliche 
Studie  bis  sum  Ausbruch  der  Revolution  von  1918.  (Berlin:  Natur  u. 
Gesellschaft  Verlag.      1921.      Pp.  248.     6  M.) 

William,  M.  The  social  interpretation  of  history:  a  refutation  of  the 
Marxian  economic  interpretation  of  history.  (Long  Island  City,  N.  Y. : 
Sotcry  Pub.  Co.      1921.      Pp.  432.      $3.) 

Zagorski,  S.  La  Republique  des  Soviets  (Bilan  Economique).  (Paris: 
Payot.      1921.      Pp.  352.) 

The  fifty-third  annual  cooperative  congress,  1921.  (Manchester,  Eng. : 
Cooperative  Union,  Ltd.,  Holyoake  House,  Hanover  Street.      1921.) 

The  policy  of  guild  socialisjn.  A  statement  prepared  and  issued  in  accord- 
ance   "with    the    instructions    of    the    annual    conference    of    the    National 


1922]  Statistics  and  Its  Methods  163 

Guilds  League.      (London:  Labour  Pub.  Co.,  6  Tavistock  Square,  W.  C. 
1921.     Pp.  23.     6d.) 

Profit  sharing  by  American  employers.  Examples  from  England.  Types 
in  France.  A  report  of  the  profit  sharing  department  of  the  National 
Civic  Federation.  Third  revised  edition.  (New  York:  Dutton.  1921. 
Pp.  416.     $8.) 

This  is  the  third  edition  of  the  book  originally  published  in  1916, 
and  revised  in  1920.  It  covers  more  than  200  profit-sharing  plans  in 
operation  in  the  United  States,  describing  them  fully  as  they  were  in 
1916,  and  submitting  supplementary  statements  of  their  condition  in 
1919  and  of  their  changes  in  method  or  policy  during  the  intervening 
years.  Firms  are  classified  under  the  headings  "Percentage  of  profits" 
plans,  "Special  distribution"  plans,  "Exceptional  plans,"  "Production 
bonus"  plans,  and  "Stock  ownership  plans."  Under  each  heading  firms 
are  listed  alphabetically  and  statements  varying  in  length  from  a  para- 
graph to  several  pages  are  submitted  on  each.  The  book  incorporates 
brief  articles  by  George  W.  Perkins,  Charles  W.  Eliot,  Ralph  M.  Easley, 
and  J.  W.  Sullivan.  The  report  is  not  a  systematic  or  analytical  treatise 
like  the  volume.  Profit  sharing:  its  principles  and  practice,  published  in 

1918  by  Burritt,  Dennison,  Gay,  Heilman,  and  Kendall,  and  it  will  in  no 
sense  displace   the   former  book.      Its   supplementary  data   for  the  year 

1919  are  brief  but  useful.  James  Ford. 

The  Russian  revolution.  Labor  Herald  library,  no.  2.  (Chicago:  The 
Trade  Union  Educ.  League,  118  N.  La  Salle  Street.  1921.  Pp.  115. 
50c.) 

Statistics  and  Its  Methods 

NEW    BOOKS 

Andrews,  F.  Handbook  of  foreign  agricultural  statistics.  Bull.  no.  987. 
(Washington:   Dept.   Agri.      1921.      10c.) 

Ayres,  L.  p.  Statistical  work.  A  study  of  opportunities  for  women. 
(New  York:  Bureau  of  Vocational  Information.      1921.     60c.) 

Baldwin,  B.  T.  The  physical  growth  of  children  from  birth  to  maturity. 
(Iowa  City,  la.:  Univ.  of  Iowa.      1921.      Pp.  411.     $3.) 

Bisset-Smith,  G.  T.  The  census  and  some  of  its  uses:  outlining  plain 
philosophy  of  population.  (Edinburgh,  Scotland:  W.  Green  and  Son. 
1921.      Pp.  xi,  228.) 

GiGON,  A.  and  Mangold  F.  Neue  Indexziffern.  Schweizerischer  Minimal 
Erndhrungsindex.      (Berne:  Stampfli.      1921.      Pp.  40.) 

HoFMAN,  E.  Indexziffern  im  Inland  und  im  Ausland.  Eine  kritische 
Studie.     (Karlsruhe  i.  B.:  G.  Braun.     1921.     Pp.  127.     20  M.) 

Jahn,  G.  Statistikkens  Teknik  og  Metode.  (Kristiana:  Aschehoug.  1920. 
Pp.  257.) 

JuLiN,  A.  Principles  de  statistique  theorique  et  appliquee.  Vol.  I,  Statis- 
tique  theorique.      (Paris:  Marcel  Riviere.      Pp.  xxiv,  712.) 

Kahn,  E.  Die  Indexzahlen  der  Frankfurter  Zeitung.  Preise,  Lohne, 
Valuten,  Borsenkurse.   Staatsfinanzen,  Bankausweise,  Produktionszahlen, 


164  Reviews  and  New  Books  [March 

Aussenhandel.     Fourth   and   fifth   editions.      (Frankfurt   a.    M. :   Frank- 
furter Sozietats-Druckerei.      1921.     Pp.  64.     3.30  M.) 

LuzzATTi,  G.  Metodologia  statistica.  (Padua:  Lit.  Edit.  Universitaria. 
1921.      14.50  1.) 

MoRTARA,  G.     Lemons  de  statistique  economique  et  demographique.    (Rome: 

Athenaeum.      1920.) 
NicEFORo,   A.     Les   indices   numeriques   de   la   civilisation   et   du   progres. 

(Paris:  Flammarion.      1921.      Pp.  211.      50  fr.) 

Rasor,  S.  E.  Matheviatics  for  students  of  agriculture.  (New  York:  Mac- 
millan.      1921.      Pp.  viii,  290.) 

Tivaroni,  J.     Statistica.      (Padua:  Lit.  Edit.  Universitaria.     1921.     18  1.) 

WiCKSELL,  S.  D.  Elementen  av  statistikens  teori  med  sarskild  hdnsyn  till 
befolkfiings-statistiken.  (Stockholm:  Svenska  Forsakringsforeningens 
Forlag.      1920.     Pp.  viii,  176.      12  Kr.) 

ZizEK,  F.  Grundriss  der  Statistik.  (Munich:  Duncker  &  Humblot.  1921. 
Pp.  vii,  470.      90  M.) 

ZucKERMANN,  S.  Statistischer  Atlas  zum  Welthandel.  Part  I,  Text  und 
Tabellen.  Part  II,  Graphische  Tafeln.  (Berlin:  Otto  Eisner.  1921. 
Pp.  xvi,  191;  156.     600  M.) 

Anuario  estadistico  de  Espana.  Aho  VI — 1919.  (Madrid:  Ministerium 
de  Instruccion  Publica  y  Bellas  Artes.  Direccion  General  del  Instituto 
Geografico  y  Estadistico.      1921.      Pp.  vii,  559.) 

The  Canada  year  book  1920.  (Ottawa:  Dominion  Bureau  of  Statistics. 
1921.      Pp.  xviii,  768.) 

A  first  course  in  statistics.      (London:  Bell.      1921.      Pp.  286.      15s.) 

Live  stock  and  animal  products  statistics,  1909-1919.  (Ottawa,  Canada: 
Bureau  of  Statistics.      1921.      Pp.  131.) 

Population  and  its  distribution,  compiled  from  the  figures  of  1920  United 
States  census,  including  distribution  of  retail  and  xvholesale  dealers 
compiled  from  trade  sources.  Third  edition.  (New  York:  J.  Walter 
Thompson  Co.      1921.      Pp.  335.) 

Year  book  of  the  American  Bureau  of  Metal  Statistics.  (New  York:  Am. 
Bureau  of  Metal  Statistics,  115  Broadway.  1921.  Pp.  62.  $2.  Subs, 
only.) 


PERIODICALS 

The  Review  is  indebted  to  Robert  F.  Foerster  for  abstracts  of  articles  in  Italian 
periodicals,  and  to  R.  S.  Saby  for  abstracts  of  articles  in  Danish  and  Swedish 
periodicals. 

Theory 

(Abstracts  by  Walton  H.  Hamilton) 

Ayees,  C.  E.  Instinct  and  capacity:  (1)  The  instinct  of  belief -in-instinct  s ;  (2)  Homo 
domesticus.    Journ.  Phil.,  Oct.  13,  27,  1921.     Pp.  5,  7.     "Human  nature  is  not  an 

organic  nature,  but  a  social  nature It  is  a  field  wholly  apart  from  animal 

behavior ;  it  is  the  behavior  of  civilization The  social  scientist  has  no  need 

of  instinct;  he  has  institutions." 

Barnes,  H.  E.  Some  contributions  of  sociology  to  modern  political  theory.  Am. 
Pol.  Sci.  Rev.,  Nov.,  1921.  Pp.  47.  A  scholarly  survey  of  the  recent  literature 
of  the  nature  and  functions  of  the  state  as  a  social  institution. 

BmcK,  L.  V.  Den  tekniske  Basis  for  Loren  om  "increasing"  og  "decreasing  return." 
Nationalok.  Tids.,  2-4  Hefte,  1921.  Pp.  97.  A  theoretical  study  of  increasing 
and  decreasing  returns  interpreted  mainly  along  the  lines  of  proportionality. 

Brinkmakx,  C.  Schmollers  Ornndriss.  Weltwirtsch.  Archiv,  July,  1921.  Pp.  9. 
A  review  of  Gustav  Schmoller's  Grundriss  der  allgemeinen  Volkswirtschaftslehre. 

BaowN,  W.  J.  Law,  industry,  and  post-war  adjustments.  Harvard  Law  Rev.,  Jan., 
1922.  Pp.  22.  "If  today  we  are  to  have  less  fighting  and  more  remuneratively 
productive  work,"  "two  obsessions  must  be  gotten  rid  of — one,  the  obsession  of 
distribution  as  a  sort  of  end  in  itself;  the  other,  the  obsession  of  production  by 
methods  which  cannot  command  the  allegiance  of  the  average  citizen  of  today." 
"Cooperation has  become  an  imperative  necessity." 

BuEDiCK,  K.  The  meaning  of  police  power.  North  Am.  Rev.,  Aug.,  1921.  Pp.  8. 
The  development  of  the  economic  and  social  system  makes  necessary  a  restriction 
of  the  liberty  of  the  individual  and  an  enlargement  of  the  police  power  of  the 
state. 

Camp,  W.  R.  Proposed  reforms  in  the  system  of  Ford  distribution.  Journ.  Polit. 
Econ.,  Nov.,  Dec,  1921.  Pp.  11,  22.  "To  the  extent  that  the  business  system 
subordinates  human  needs,  comfort,  and  welfare  to  consideration  of  price — as  is 
especially  evident  in  the  present  period  of  price  depression  and  curtailed  pro- 
duction— to  that  extent  it  falls  short  of  maximum  social  efficiency." 

Cox,  A.  B.  Cost  of  production:  its  relation  to  price.  Texas  State  Circ,  26,  1920. 
Pp.  9. 

Ely,  R.  T.  Land  economics  and  business  executives.  Administration,  Dec,  1921. 
Pp.  8.  "Land  economics  is  that  division  of  economics,  theoretical  and  applied, 
which  is  concerned  with  the  land  as  an  economic  concept  and  with  the  economic 
relations  which  grow  out  of  land  as  property." 

Evans,  A.  P.  The  problem  of  control  in  medieval  industry.  Pol.  Sci.  Quart., 
Dec,  1921.  Pp.  16.  Points  out  certain  significant  features  of  the  problem  of 
industrial  control  in  the  Middle  Ages. 

Fisher,  L.  Health  and  economics.  Contemp.  Rev.,  Oct.,  1921.  Pp.  8.  "We  ought 
not  to  expect  to  maintain,  as  in  actual  fact  we  do  maintain,  a  vast  mass  of 
people  whose  ill-health  renders  them  incapable  of  wholly  maintaining  themselves 

Considering  the  wealth  of  nations,  and  the  causes  upon  which  that  wealth 

depends,  all  this  is  waste,  complete  and  deplorable." 


166  Periodicals  [March 

Friday,  D.  The  accumulation  of  capital.  New  Repub.,  Dec.  14,  1921.  Pp.  4. 
Capital  accumulation  for  1921  will  amount  to  more  than  eight  billion  doUars. 
"The  industrial  depression  with  its  curse  of  unemployment  and  its  curtailment 
of  production  has  not  impeded  seriously  the  flow  of  investment  funds  to  the 
security  market." 

Hamiltox,  W.  H.  Economic  opinion.  Civilization  in  the  U.  S.,  1922.  Pp.  16. 
Summary  of  the  various  types  of  economic  opinion  in  the  United  States,  pro- 
fessional and  lay. 

Hansen,  A.  H.  The  technological  interpretation  of  history.  Quart.  Journ.  Econ., 
Nov.,  1921.  Pp.  12.  A  criticism  of  Marx's  "technological  (not  economic)  view 
of  history,"  a  recognition  of  the  importance  of  the  technical  factor,  and  a  protest 
of  making  "a  dogma"  of  "the  technological  interpretation  of  history." 

Hart,  H.  Science  and  sociology.  Am.  Journ.  Soc,  Nov.,  1921.  Pp.  20.  "The 
scientific  achievements  of  sociology  have  been  disappointing.     Sociology  is  properly 

a  utilitarian  science In  it  five  inductive  methods   of  seeking  truth  may  be 

considered";    viz.,    "the    common-sense,"    "the    historical,"    "the    museum,"    "the 
laboratory,"  and  "the  statistical." 

Heaton,  H.  The  basic  wage  principle  in  Australian  wages  regulation.  Econ. 
Journ.,  Sept.,  1921.  Pp.  11.  An  account  of  "important  recent  developments"  in 
Australian  wage  policy  resting  upon  "the  two  aims":  "(1)  the  preservation  of 
industrial  peace";  and  "(2).... the  payment  to  even  the  least  skilled  male 
adult  worker  of  a  wage  which  will  enable  him  to  keep  himself  and  those  dependent 
upon  him  in  some  degree  of  frugal  comfort." 

Herbert,  A.  S.  Unemployment  and  the  remedy:  the  socialization  of  industry. 
Fortn.  Rev.,  Dec,  1921.  Pp.  11.  A  plea  for  eliminating  the  irregularities 
of  the  economic  cycle  by  resolving  "to  go  forward  resolutely  and  courageously, 
but  prudently  and  experimentally,  with  the  socialization  of  industry." 

Inge,  W.  R.  The  dilemma  of  civilization.  Edinburgh  Rev.,  July,  1921.  Pp.  21. 
A  review  of  Lyer's  Uistory  of  Social  Development  and  Freeman's  Social  Decay 
and  Regeneration.  "Mechanism  by  its  reactions  upon  man  and  his  environment 
is  antagonistic  to  human  welfare." 

Knight,  F.  H.  Cassel's  "Theoretische  Socialokonomie."  Quart.  Journ.  Econ.,  Nov., 
1921.     Pp.  9.     A  review. 

Knoop,  D.  The  problem  of  unemployment.  Discovery.  Nov.,  1921.  Pp.  5.  A 
discussion  of  the  problem  as  one  of  economic  malorganization  with  reference  to 
"the  characteristics  and  causes  of  ups  and  downs  in  trade." 

Kuo,  Z.  Y.  Giving  up  instincts  in  psychology.  Journ.  Phil.,  Nov.  24,  1921. 
Pp.  20.  "It  is  not  only  superfluous  but  harmful  to  our  genuine  understanding  of 
human  behavior  to  assume  the  existence  of  any  specific  instinct." 

Lloyd,  C.  M.  Politics  and  economics.  London  Mercury,  Nov.,  1921.  Pp.  4.  A 
review  of  a  number  of  books  on  economics.  In  the  language  of  one  of  his  reviews 
the  matter  with  the  economist  is  that  "he  argues  that  efficiency  is  the  test.  It  is 
true  that  he  talks  of  the  interdependence  of  efficiency  and  well-being,  but  be 
leaves  us  with  the  impression  that,  if  we  look  after  the  efficiency,  the  well- 
being  will  look  after  itself." 

MiLi,ER,  H.  A.  The  group  as  an  instinct.  Am.  Journ.  Sociol.,  Nov.,  1921.  Pp.  10. 
"Instinct  is  a  product  of  evolution.  We  do  not  know  that  we  belong  to  com- 
plicated groups We  react  to  the  group  relationship  unconsciously  because  it 

is  normal  and  natural." 


1922]  Economic  History  (United  States)  167 

PiGOTJ,  A.  C.  Unemployment.  Contemp.  Rev.,  Dec,  1921.  Pp.  6.  "The  greater 
part  of  the  evil  associated  with  an  industrial  depression  could  be  removed  almost 
in  an  instant  if  confidence  could  return,  touch  all  industries  with  its  magic  wand, 
and  make  them  continue  their  production  and  their  demand  for  the  wares  of 
others." — Marshall. 

Pound,  A.  The  iron  man  and  wages.  Atlantic  Mo.,  Dec,  1921.  Pp.  8.  The  auto- 
matic tool  tends  to  level  the  wages  of  the  young  and  the  old,  the  skilled  and  the 
unskilled,  the  factory  worker  and  the  ofBce  employee.  In  fact,  it  tends  to  a 
general  leveling  of  wages  and  of  salaries. 

Rew,  H.     The  agricultural  wage.     Nineteenth  Cent.,  Oct.,  1921.     Pp.  15. 

RoBERTSox,  D.  H.  Economic  incentive.  Economica,  Oct.,  1921.  Pp.  15.  "The 
love  of  comfort  and  of  power  will  probably  lead  the  rich  to  stand,  without 
giving  up  in  disgust  the  job  of  being  rich,  a  good  deal  more  pressure  than  some 

would  have  us  believe An  excessive  preoccupation  with  incentive 

sometimes  tends  to  darken  counsel,  in  some  ways  an  undue  optimism,  in  others 
an  undue  pessimism,  about  the  prospects  of  improving  the  state  of  the  world." 

Saxik,  E.  Zu  ilethode  und  Aufgabe  der  Wirtschafts-geschichte.  Schmollers  Jahrb., 
2  Heft,  45  Jahrg.,  1921.     Pp.  2t. 

Schmidt,  M.  Die  Wirtschaftsformen  hei  den  Naturvolkern.  Blatter  f.  Vergleich- 
ende  Rechtswis.  u.  Volkswirts.,  Apr.-Oct.,  1921.     Pp.  10. 

Spkagce,  O.  M.  W.  The  efficiency  of  credit.  The  Annals,  Jan.,  1922.  Pp.  4. 
"Credit  serves  a  productive  purpose  by  facilitating  the  transfer  of  capital  assets 
and  of  goods  in  process  of  production  and  marketing.  But  when  business  is 
active  and  people  are  already  fully  employed,  additional  doses  of  credit  do  not 
result  in  a  larger  physical  output  of  goods." 

Steigl,  R.  Der  Kapitalzins  ah  Residual-Rente.  Archiv  f.  Sozialwis.  Sozialpolitik., 
Aug.,  1921.  Pp.  33.  A  critical  review  of  the  literature  with  particular  reference 
to  the  views  of  Clark  and  of  the  Austrians. 

Steuve,  P.  L'id4e  de  loi  naturelle  dans  la  science  econornique.  Rev.  d'Econ.  Pol., 
May-June,  July-Aug.,  1921.  Pp.  20,  24.  "En  vertu  du  dualisme  fundamental, 
inherent  au  processus  social  econornique,  I'activite  libre  et  rationalle  de  la  volonte 
humaine  depassant  les  cadres  de  Teconomie  domestique  fermee,  implique  son  con- 
traire  qui  est  en  meme  temps  son  pendant  necessaire:  la  loi  naturelle,  resident 
dans  le  systeme  des  interdependances  economiques." 

Words,  F.  A.  Democracy  and  the  human  equation.  Journ.  of  Heredity,  May, 
1921.  Pp.  4.  A  review  of  Allyne  Ireland's  book  bearing  the  above  caption, 
with  a  statement  of  the  biological  facts  to  be  faced  by  the  champion  of  democracy 
in  politics  or  industry. 

The   economic   curricula  at   Oxford  and  at    Cambridge.     Econ.   Journ.,   Sept.,    1921. 

Pp.  7.     A  presentation  of  the  curricula  "of  the  new  Honor  School  of  Philosophy, 

Politics,  and  Economics  at  Oxford"  and  of  the  "lately  revived"  regulation  for  the 

economic  Tripos  at    Cambridge. 
A  plea  for  an  economic  conference.     Nation  and  Athenaeum,  Nov.  26,  1921.     Pp.  2. 

"We  can  only  urge  that  this  concerted  action  of  all  the  European  States  appears 

to  be  the  only  way  of  pulling  up  in  the  road  to  ruin." 

Economic  History  (United  States) 

(Abstracts  by  Amelia  C.  Ford) 

Alcock,  F.  J.  Past  and  present  trade  routes  to  the  Canadian  Northwest.  Geog. 
Rev.,  Aug.,  1920.     Pp.  27.     An  account  of  the  development  of  the  trade  between 


168  Periodicals  [March 

St.  Paul  and  the  Red  River  Valley,  and  the  Influence  of  this  trade  upon  western 
Canada.     Illustrated. 

Austin,  O.  P.  Economic  development  of  the  United  States,  I846  to  1921.  Bankers 
Mag.,  Sept.,  1921.  Pp.  6.  Outlines  our  growth  in  area,  means  of  communication, 
production,  banking,  and  exports  in  last  seventy-five  years;  has  a  table  of 
statistics  showing  development  of  some  important  factors. 

Blegen,  T.  C.  The  early  Norwegian  press  in  America.  Minn.  Hist.  Bull.,  Nov., 
1920.  Pp.  13.  Calls  attention  to  the  existence  and  location  of  files  of  some  early 
Norwegian-American  newspapers,  especially  the  Emigranten  which  contains  ma- 
terial on  the  economic  development  of  the  Northwest  in  the  decade  preceding 
the  Civil  War. 

BoNNEY,  W.  P.  Naming  Stampede  Pass.  Wash.  Hist.  Quart.,  Oct.,  1921.  Pp.  7. 
Gives  information  as  to  the  financing  and  building  of  the  Northern  Pacific 
railroads. 

Bradlee,  F.  B.  C.  The  Boston,  Revere  Beach,  and  Lynn  Narrow  Gauge  Railroad. 
Essex  Inst.  Hist.  Collections,  Oct.,  1921.  Pp.  8.  Narrates  the  origin  and  early 
operation  of  this  road. 

.     History    of    the    Boston   and   Maine   Railroad    (concluded).     Essex 

Inst.  Hist.  Collections,  Apr.,  1921.  Pp.  28.  Summarizes  the  financial  collapse  of 
this  road  after  its  absorption  by  the  New  York,  New  Haven,  and  Hartford 
system.     Continued  from  the  January  number. 

Beennan,  M.  K.  Pioneer  reminiscences  of  Delta  County.  Mich.  Hist.  Mag.,  Jan., 
1920.  Pp.  12.  Throws  a  little  light  on  transportation  and  early  industries  in  the 
Michigan  upper  peninsula  between  1840  and  1870. 

Cochran,  W.  C.  Perils  of  river  navigation  in  the  sixties.  Miss.  Valley  Hist.  Rev., 
Nov.,  1921.  Pp.  16.  Discusses  a  long  list  of  steamboat  disasters  on  the  Miss- 
issippi, with  reasons  for  them. 

Cole,  A.  H.  The  domestic  and  foreign  wool  manufacturers  and  the  tariff  problem. 
Quart.  Journ.  Econ.,  Nov.,  1921.  Pp.  34.  Compares  changes  in  the  American  and 
foreign  wool  manufacturing  industries  in  the  last  decade;  considers  little  is 
being  done  to  put  the  domestic  industry  in  the  way  of  progress;  finds  the  situa- 
tion discouraging  to  those  who  disapprove  of  tariff  aid  indefinitely  "for  any 
industry  which  shows  no  real  prospect  of  ultimate  self-suflBciency." 

Collins,  M.  S.  D.  Neia  Albany  and  the  Scribner  family.  Indiana  Mag.  of  Hist., 
Sept.,  1921.  Pp.  32.  Shows  what  methods  of  transportation  and  land  prices 
were  in  Indiana  in  pioneering  days. 

Davis,  W.  M.  Lower  California  and  its  natural  resources,  a  review.  Georg.  Rev., 
Oct.,  1921.  Pp.  12.  Chiefly  geographical  but  mentions  a  few  small  economic 
opportunities  in  the  peninsula;  concludes  that  it  "will  probably  long  remain  a 
better  field  for  the  explorer  than  for  the  settler." 

Greensfelder,  a.  p.  The  construction  industry — the  vital  part  it  plays  in  the 
life  of  a  great  city.  Journ.  Engg.  Club  of  St.  Louis,  July-Sept.,  1921.  Pp.  15. 
Describes  the  growth  of  this  business,  particularly  in  St.  Louis,  and  the  factors 
and  problems  involved  in  it. 

Hicks,  J.  D.  The  political  career  of  Ingnatius  Donnelly.  Miss.  Valley  Hist.  Rev., 
June-Sept.,  1921.  Pp.  53.  Discusses  agrarian  discontent  in  the  80's  and  90's, 
Donnelly's  championship  of  granger  ideas,  and  his  activities  as  anti-monopolist. 


1922]  Economic  History  (United  States)  169 

greenbacker,  and  populist  in  a  long  fight  against  the  railroads   and  the  money 
power.     In  his  early  congressional  career  he  secured  favors  for  the  railroads. 

Hill,  J.  J.  The  Old  Spanish  Trail.  Hispanic  Am.  Hist.  Rev.,  Aug.,  1921.  Pp.  30. 
Details  the  purposes,  results,  and  routes  of  various  expeditions  that  show  the 
gradual  extension  of  Spanish  and  Mexican  trade  northwest  from  New  Mexico  to 
the  Great  Basin  and  California. 

HmscH,  A.  H.  The  construction  of  the  Miami  and  Erie  Canal.  Miss.  Valley  Hist. 
Rev.,  Nov.,  1921.  Pp.  14.  Tells  of  the  financing  and  building  of  this  Ohio 
canal  in  1837-1842. 

King,  "W.  I.  Pellagra  and  poverty.  Survey,  Sept.  1,  1921.  Pp.  4.  Believes  that 
Inadequate  diet  due  to  poverty  is  the  main  cause  of  pellagra,  and  therefore  that 
the  only  remedy  for  the  disease  is  the  elimination  of  the  causes  of  poverty  by 
education  in  the  broadest  sense  of  the  word. 

KoLHMEiEH,  A.  L.  The  undertow  of  Puritan  influence.  Miss.  Valley  Hist.  Rev., 
Nov.,  1921.  Pp.  6.  Believes  that  puritanism  has  contributed  as  much  to  the  ma- 
terialism of  the  American  people  as  to  their  idealism,  and  gives  three  reasons  for 
this  seeming  paradox. 

Marye,  W.  B.  The  Baltimore  County  "Garrison"  and  the  old  garrison  roads. 
Maryland  Hist.  Mag.,  June,  1921. 

Mitchell,  B.  Two  industrial  revolutions.  South  Atlantic  Quart.,  Oct.,  1921. 
Pp.  17.  Emphasizes  the  fundamental  distinctions  and  similarities  between  the  rise 
of  industrialism  in  the  Southern  States  and  that  in  Great  Britain  a  century  earlier. 

Paeish,  J.  C.  Three  men  and  a  press.  The  Palimpsest,  Aug.,  1920.  Tells  the 
history  of  the  printing  press  on  which  the  first  newspaper  in  Iowa  and  in 
Minnesota  were  printed. 

Parkinson,  J.  B.  Memories  of  Early  Wisconsin  and  the  gold  mines.  Wis.  Mag. 
of  Hist.,  Dec,  1921.  Pp.  22.  Tells  of  prices  and  conditions  of  life  and  labor, 
first  in  Wisconsin  in  the  40's,.  and  later  in  California  in  1852. 

Putnam,  G.  G.  Salem  vessels  and  their  voyages.  Essex  Inst.  Hist.  Collections, 
Apr.,  1921.  Pp.  24.  Lists  the  cargoes  and  duties  of  vessels  engaged  in  the 
Sumatra  trade  in  the  years  following  the  Revolution.  Continued  in  the  following 
numbers. 

Ruff,  J.  The  joys  and  sorrows  of  an  emigrant  family.  Mich.  Hist.  Mag.,  Apr.- 
July,  1920.  Pp.  45.  Includes  scattered  references  to  wages,  hours,  food  prices, 
in  Buffalo  and  Michigan  during  the  50's. 

ScHAFEE,  J.  Documenting  local  history.  Wis.  Mag.  of  Hist.,  December,  1921. 
Pp.  18.  Has  a  statistical  statement  of  the  agricultural  history  of  the  Wisconsin 
town  of  Newton,  and  of  the  rise  of  other  industries. 

SioussAT,  St.  G.  L.  Andrew  Johnson  and  the  early  phases  of  the  Homestead  bill. 
Tenn.  Hist.  Mag.,  July,  1920.  Pp.  32.  Shows  that  the  Homestead  bill  had  its 
origin  in  a  fusion  of  the  demands  of  western  settlers  with  the  radical  land 
reform  doctrines  of  eastern  labor  leaders,  and  analyzes  the  part  played  by 
Andrew  Johnson  in  forcing  this  legislation  on  Congress. 

Stocking,  W.  Detroit  commercial  organizations.  Mich.  Hist.  Mag.,  April-July, 
1920.  Pp.  43.  Recounts  the  various  activities  of  the  Detroit  boards  of  trade, 
especially  for  the  improvement  of  the  waterways  between  the  Lakes  and  the 
Atlantic  Ocean. 


170  Periodicals  [March 

ViOLETTE,  E.  M.  The  Missouri  and  the  Mississippi  railroad  debt.  Missouri  Hist. 
Rev.,  Apr.,  1921.  Pp.  32.  The  first  of  a  series  of  monographs  dealing  with  the 
aid  given  by  cities  and  counties  to  railroad  companies  for  the  construction  of 
roads  just  after  the  Civil  War.  These  studies  will  explain  certain  restrictive 
features  in  the  Missouri  constitution.     Fully  documented. 

Annual  report  of  the  librarian  of  the  Connecticut  Historical  Society.  1921.  Lists 
among  manuscript  accessions  the  following:  Letters  to  Franklin  G.  Comstock  of 
Hartford  in  1835-1837,  relating  to  the  silk  industry;  Shipping  and  other  papers 
of  Ralph  Bulkley,  1810-1830;  Account  books  of  business  firms  and  individuals 
in  the  eighteenth  and  nineteenth  centuries. 

Documents  relating  to  a  proposed  Swiss  and  German  colony  in  the  western  part  of 
Virginia.  Va.  Mag.  of  Hist,  and  Biog.,  July,  1921.  Pp.  5.  Sets  forth  the 
economic  advantages,  among  others,  of  such  a  colony  to  the  mother  country. 
Concluded  in  this  number. 

The  elimination  of  waste  in  industry.  An  abstract  of  the  report  of  the  committee 
of  the  Federated  American  Engineering  Societies.  Journ.  Engg.  Club  of  St. 
Louis,  July-Sept.,  1921.  Pp.  30.  Finds  waste  due  to  production  being  low  or 
interrupted  or  restricted  or  lost,  and  discusses  under  seven  heads  the  responsi- 
bility and  opportunity  for  removing  the  sources  of  these  conditions. 

Major  William  Williams'  journal  of  a  trip  to  Iowa  in  1849.  Annals  of  Iowa,  Apr., 
1920.  Records  impressions  of  the  embryo  settlements,  economic  conditions,  and 
the  "people  pushing  up  for  the  new  territory"  in  Minnesota  and  Iowa. 

Economic  History  (Foreign) 

Arana,  J.  J.  D.  Legislacion  social  y  economica.  Boletin  del  Museo  Social  Argen- 
tino,  Oct.  25,  1921. 

Ashley,,  Sm  William.  The  place  of  rye  in  the  history  of  English  food.  Econ. 
Journ.,  Sept.,  1921.     Pp.  25. 

vox  Backerath,  H.  Kriifte,  Kiele  und  Gestaltungen  in  der  deutschen  Industrie- 
wirtschaft.     Weltwirtsch.  Archiv,  July,  Sept.,  1921.     Pp.  35,  35. 

Bhatnager,  B.  G.  Industrial  organisation  in  medieval  India.  Journ.  Indian  Econ. 
Soc,  Sept.,  1921.     Pp.  7. 

BuNGE,  A.  E.  Formacion  del  sentido  economico  de  la  mujer.  Rev.  de  Economia 
Argentina,  Oct.,  1921. 

CoHN,  E.  Oekonomiske  Oversigter,  1.  Juli  1918 — 1.  April  1921.  Nationalok. 
Tids.,  2-1,  1921.  Pp.  42.  A  concise  summary  of  a  Danish  survey  of  the  financial 
condition  of  the  state  of  the  communes,  money  and  exchange,  regulation  of  con- 
sumption and  prices,  industry  and  labor,  commerce  and  other  economic  questions 
during  the  period  1918-1921. 

Collet,  O.     La  situation  iconomique  des  Indes  Orientates  n4erlandaises.     Rev.  Econ. 

Intern.,  year  13,  vol.  II,  no.  1,  1921.     Pp.  30. 
CoppEL,  E.   G.  and   others.     Compulsory   acqtiisition  of  land  in  Australia.     Journ. 

Comp.  Legis.  and  Intern.  Law,  third  series,  vol.  Ill,  part  IV. 
Davis,  J.  S.     Charles  Rist  on  Germany's  war  finances.     Quart.  Journ.  Econ.,  Nov., 

1921. 

Garci'a,  E.  E.  Las  industrias  argentinas,  ante  les  nuevas  modalidades  del  commercio 
internacional  y  las  organizaciones  extranjeras.  Rev.  de.  Econ.  Argentina,  Sept. 
1921. 


1922]  Economic  History  (Foreign)  171 

GahdneRj  J.  The  outlook.  I,  British  industry  and  finance.  II,  The  rest  of  the 
•world.     Finan.  Rev.  Rev.,  Dec,  1921.     Pp.  7. 

Geii.1,1,  C.  "L'ltalia  Economica"  di  Riccardo  Bachi  e  le  "Prospettive  Economiche" 
di  Giorgio  Mortara.  Riv.  Internaz.,  July,  1921.  Pp.  5.  The  services  rendered  by 
two  surveys  of  Italian  economic  conditions. 

Gtjbskt,  N.     The  land  settlement  of  Russia.    Econ.  Journ.,  Dec,  1921.     Pp.  10. 

Hoffman,  F.  L.  American  business  opportunities  in  Bolivia.  Econ.  World,  Oct.  15, 
1921. 

Jacq,  F.  Les  difficultes  de  la  liquidation  4conomique  de  la  guerre.  Monde  Econ., 
Dec  10,  1921.     Pp.  2. 

KiLPi,  O.  K.  Die  weltwirtschaftlichen  Beziehungen  Finlands.  Weltwirts.  Archiv, 
Oct.,  1921.     Pp.  16. 

Lesctjee,  J.  Situation  economique  et  financiere.  Rev.  Econ.  de  Bordeaux,  July, 
1921. 

Mappin,  G.     The  development  of  Brazil.     Finan.  Rev.  Rev.,  Dec,  1921.     Pp.  5. 

Menabs,  O.  L' Alsace-Lorraine:  sa  population,  son  agriculture.  L'Econ.  Fran^., 
Sept.  24,  1921. 

Metznee,  M.  Verbdnde  und  Kartelle  der  Baumwoll-  und  Leinenwirtschaft.  Kartell- 
Rundschau,  9-10  Heft,  19  Jahrg.     Pp.  18. 

Mulee,  M.  S.     Cooperation  in  Russia.     Economica,  Oct.  1921. 

MoESE,  H.  B.  The  supercargo  in  the  China  trade  about  the  year  1700.  Eng.  Hist. 
Rev.,  Apr.,  1921. 

MouLTON",  H.  G.  The  economic  necessity  for  disarmament.  Yale  Rev.,  Jan., 
1921.     Pp.  15. 

Mouree,  B.  La  crise  de  1920-1921  et  ses  causes.  Rev.  d'Econ.  Pol.,  Sept.-Oct.,  1921. 
Pp.  23. 

MiJLLER,  H.  Das  Genossenschaftswesen  und  seine  gesetzUche  Regelung  im  demo- 
kratischen  Rechtsstaat.  Zeitsch.  f.  Schweizerische  Statistik  u.  Volkswirtschaft., 
2  Heft,  57  Jahrg. 

OuALiD,  W.  L'evolution  industrielle  de  l' Alsace-Lorraine  et  de  la  France  de  1871  a 
1914.    Journ.  Soc  de  Statis.  de  Paris,  Nov.,  1921.     Pp.  30. 

Newhall,  R.  a.  The  war  finances  of  Henry  V  and  the  Duke  of  Bedford.  Eng. 
Hist.  Rev.,  Apr.,  1921. 

PoMMEEYj  L.  La  reconstitution  industrielle  des  regions  devastees.  Journ.  des 
Economistes,  Oct.  15,  1921.     Pp.  12. 

Spencee,  a.  F.     Siberia  in  1919.     Economica,  Oct.,  1921. 

TuBNEEj  E.  R.  English  coal  industry  in  the  seventeenth  and  eighteenth  centuries. 
Am.  Hist.  Rev.,  Oct.,  1921.     Pp.  23. 

VictTNA,  S.  M.     La  mineria  en  Chile  y  Peru.     Rev.  de  Econ.  Argentina,  Sept.  1921. 

ViRGim,  F.  Des  dommages  economiques  mondiaux  causes  par  la  guerre.  Scientia, 
Dec,  1921.     Pp.  12. 

Watjen,  H.  Der  Zucker  im  Wirtschaftsleben  Latein-amerikas  von  der  Kolonialzeit 
bis  zur  Gegenwart.     Weltwirts.  Archiv,  Oct.,  1921.     Pp.  16. 


172  Periodicals  [March 

Werner-Kautzsch.  Abwehr  oder  Recktfertigung  der  Steinerschen  Dreigliederung? 
Natur  u.  Gesells.,  Dec,  1921. 

Whitney,  A.  L.  Scandinavian  countries  and  Finland — labor  unrest  Mo.  Labor 
Rev.,  Oct.,  1921. 

The  agrarian  reform,  (Greece).     Intern.  Rev.  Agri.  Econ.,  Aug-Sept.,  1921. 

Federation  of  Central  America.     Commerce  Mo.,  Dec,  1921.     Pp.  8. 

Tendency  toward  large  capital  organization  in  Great  Britain.  Commerce  Mo.,  Dec, 
1921.     Pp.  11. 

Agricultural  Economics 

(Abstracts  by  A.  J.  Dadisman) 

BiDWELL,  P.  W.  The  agricultural  revolution  in  New  England.  Am.  Hist.  Rev., 
July,  1921.  Pp.  20.  The  author  traces  the  agricultural  developments  in  New 
England  during  the  last  century. 

BizzELL,  W.  B.  Farm  tenantry  in  the  United  States.  Tex.  Sta.  Bull.,  278,  Apr., 
1921.  Pp.  408.  An  historical  discussion  of  farm  tenancy,  analysis  of  the  economic 
and  social  aspects,  suggested  helps,  and  a  good  bibliography. 

Cooper,  M.  R.  and  Washburn,  R.  S.  Cost  of  producing  wheat.  U.  S.  Dept.  Agri. 
Bull.  943,  Apr.,  1921.  Pp.  59.  Analysis  of  detailed  costs.  Data  from  survey 
records  of  481  farms  in  the  principal  wheat-growing  states.     Thirty-seven  tables. 

DoucET,  R.  La  loi  de  huit  heures  et  V agriculture.  Monde  Econ.,  Nov.,  1921.  Pp.  3. 
An  argument  opposing  the  eight  hour  day  in  agricultural  work. 

Ernle,  Lord.  Agriculture  during  two  great  wars:  1793-1815  and  1914-1918.  Jour. 
Min.  Agr.  (London),  vol.  27,  no.  3,  June,  1920.  Pp.  14.  General  agricultural 
conditions  in  England  in  the  two  periods  are  compared. 

.     The  inclosure  of  open-field  farms.     Jour.  Min.  Agr.   (London),  vol. 

27,  no.  2,  Dec,  1920.     Pp.  11.     A  survey  of  conditions  leading  to  the  inclosure. 
Falconer,  J.  I.     Methods  of  renting  land  in  Ohio.     Ohio  Sta.  Bui.  348,  May,  1921. 

Pp.  29.     The  nature  of  farm  rental  contracts  as  they  e.rist  in  Ohio  with  suggestive 

improvements  and  forms  of  lease  contracts. 

Haxl,  D.  Our  national  food  supply.  Journ.  Min.  Agr.  (London),  vol.  27,  no.  2, 
May,  1920.  Pp.  5.  A  discussion  of  needs  and  possibilities  of  Great  Britain's 
producing  a  greater  part  of  her  food  supply  in  the  home  country. 

HiBBARD,  B.  H.  Farm  tenancy  in  1920.  Jour.  Farm  Econ.,  Oct.,  1921.  Pp.  8.  A 
study  of  the  status  and  problems  of  tenancy  in  several  sections  of  the  United 
States. 

HiBBARD,  B.  H.,  Foster,  L.  G.,  and  Davis,  D.  G.  Wisconsin  livestock  shipping  asso- 
ciations. Wis.  Sta.  Bull.  314,  Aug.,  1920.  Pp.  22.  History  and  methods  of  con- 
ducting shipping  associations  in  Wisconsin<  with  suggested  constitution  and  by- 
laws. 

Holmes,  J.  C.  Cooperative  wool  marketing.  S.  Dak.  Ext.  Cir.  34,  June,  1921. 
Pp.  15.     A  description  of  methods  of  handling  South  Dakota's  wool  cooperatively. 

HoYT,  H.  R.  Comparison  of  rotations,  crop  costs,  and  net  receipts  per  acre.  Ohio 
Sta.  Bull.  344,  June,  1921.     Pp.  2.     Detailed  costs  of  five  rotations. 

Hunter,  B.  Preliminary  report  on  farm  organization  in  Twin  Falls  and  LataJi 
counties.     Idaho  Sta.  Bull.  123,  Feb.,  1921.     Pp.  11.     Progress  report.     A  summary 


1922]  Railways  and  Transportation  173 

of  the  average  business  on  200  farms  in  1919,  data  from  survey  records,  witti  five 
tables. 

LiESSEj  A.  La  jouTTiee  de  huit  heurs  dans  Vagriculture.  L'Econ.,  Fran9.,  Nov., 
1921.  Pp.  3.  An  argument  opposing  the  eight  hour  day  for  agricultural  workers 
in  France. 

McFail,  R.  J.  The  balance  between  agriculture  and  industry.  Annalist,  Nov., 
1921.     Pp.  3.     A  comparison  of  the  trends  of  agriculture  and  industry. 

Madsex-Mygdal,  H.  Landbruget  gennem  Krigsaarene.  Nationalok.  Tids.,  2-3, 
1921.  Pp.  23.  A  survey  of  the  economic  conditions  confronting  the  Danish 
farmer  during  and  after  the  war. 

MuaEAY,  N.  C.  The  trend  of  prices.  Journ.  Farm  Econ.,  Apr.,  1921.  Pp.  9.  A 
consideration  of  seasonal  cycles,  yearly  average  prices,  and  general  price  levels 
as  affecting  prices  of  farm  products. 

Peck,  F.  W.  Methods  of  conducting  cost  of  production  and  farm  organization 
studies.  U.  S.  Dept.  Agr.  Bull.  994,  Nov.,  1921.  Pp.  47.  A  carefully  prepared 
handbook  describing  methods  of  collecting  and  analyzing  data. 

Ruixi,  M.  Le  possibilita  agrarie  d'ltalia.  Riv.  di  Polit.  Econ.,  no.  VI,  1921. 
Pp.  20. 

Sacco,  I.  M.  La  regolamentazione  del  lavoro  agricolo  e  la  II  conferenza  interna- 
zionale  del  lavoro.     Riv.  Internaz.,  Sept.,  1921.     Pp.  10. 

ScHEiFLEY,  W.  H.  The  father  of  French  agriculture.  Sewanee  Rev.,  Dec,  1921. 
Pp.  5.     A  brief  biography  and  outline  of  the  work  of  Oliver  de  Serres. 

Tayloe,  H.  C.  The  adjustment  of  the  farm  business  to  declining  price  levels. 
Journ.  Farm  Econ.,  vol.  3,  no.  1,  Jan.,  1921.  Pp.  9.  A  discussion  of  readjustment 
problems  from  the  farmers'  view  point. 

WiLSOx,  Sm  Jajies.  The  world's  wheat.  Journ.  Royal  Stat.  Soc,  May,  1921.  Pp.  63. 
Production  and  consumption,  exports  and  imports,  of  wheat  of  fifty-nine  countries 
with  pre-war,  war-time,  and  after  war  averages,  fourteen  tables  and  discussions. 

Cost  of  producing  staple  farm  products.  An.  Rept.  Neb.  Sta.,  Feb.,  1920.  Pp.  2. 
Some  general  results  of  recent  studies  in  Nebraska. 

Leasing  systems  in  Wisconsin.  Wis.  Sta.  Bull.  319,  Sept.,  1920.  Pp.  2.  A  summary 
of  lease  contracts  in  Wisconsin. 

Mixed  farming  and  apple  growing  in  Ontario.  Ontario  Dept.  Agr.  Bull.  282,  Feb., 
1921.  Pp.  23.  A  comparative  study  of  the  farm  business  of  165  mixed  farms 
and  3.5  apple  farms  from  survey  records,  twenty-one  tables. 

Some  phases  of  English  agricultural  policy.  Intern.  Lab.  Rev.,  Oct.,  1921.  Pp.  13. 
A  discussion  of  government  regulation  to  encourage  home  production  by  fixing 
prices  and  wages,  three  tables. 

Railways  and  Transportation 

(Abstracts  by  Julius  H.  Parmelee) 

AcwoRTit,  W.  How  British  look  at  rail  rate  problem.  III.  Central  Mag.,  Nov., 
1921.  Pp.  0.  Reprint  from  the  London  Times.  The  basis  of  trafiBc  and  rate 
classifications,  with  possible  future  modifications. 

Allix,  G.  Les  progr^s  realises  dans  les  chemins  de  fer  depuis  I'armistice.  Rev. 
Pol.  et  Pari.,  Oct.  10,  1921.     Pp.  21. 


174  Periodicals  [March 

Baker^  B.  Railroad  wages.  Independent,  Oct.  29,  1921.  Pp.  2.  Facts  taken  from 
September  payrolls  of  an  eastern  trunk  line. 

BuTTERWoRTH,  W.     Railroad  labor  pay — and  mine.    Nation's  Bus.,  Jan.,  1922.  Pp.  2. 

CanseYj  W.  B.  Central  Europe's  roads  need  fuel  and  equipment.  Ry.  Age,  Nov. 
12,  1921.     Pp.  4.     With  map  and  illustrations. 

Chambers,   E.     The    trans-Continental   freight    rate    situation.     Ry.    Age,    Nov.   26, 

1921.  Pp.  4.     Effect  of  Panama  Canal  competition. 

Chixes,  G.  S.  Effect  of  car  weight  and  speed  on  coal  consumption.  Ry.  Rev.,  Oct. 
29,  1921.     Pp.  4. 

Cutler,  T.  D.     The  real  problem  of  the  railroads.     Ry.  Rev.,  Nov.  5,  1921.     Pp.  3. 

Davis,  J.  C.  The  legal  status  of  a  railroad  strike.  Ry.  Age,  Nov.  19,  1921.  Pp.  4. 
Address  by  Director  General  of  Railroads. 

Dunn,  S.  O.  The  railway  situation  and  general  business.  Ry.  Age,  Dec.  31,  1921. 
Pp.  4.  Premature  rate  reductions  will  eventually  cost  shippers  more  than  the 
immediate  benefit. 

Dunn,  S.  O.  Will  the  railways  be  consolidated?  Rev.  Rev.,  Jan.,  1922.  Pp.  4. 
Analysis  of  tentative  plan  of  Interstate  Commerce  Commission. 

GiORDONO,  A.  A  review  of  the  Italian  railway  situation.  Ry.  Age,  Jan.  7,  1922. 
Pp.  3.     Capital  the  great  need. 

Goldstein,  J.  M.  America's  wealth  due  largely  to  railway  e&pansion.  Ry.  Age, 
Nov.  5,  1921.     Pp.  5.     Graphic  study  by  a  Russian  economist. 

.     Soviets    demoralize    already    inadequate    system.     Ry.    Age,    Jan.    7, 

1922.  Pp.  2.     Russian  railways  utterly  demoralized. 

Gregg,  E.  S.  Failure  of  the  Merchant  Marine  act  of  1920.  Am.  Econ.  Rev., 
Dec,  1921.     Pp.  15. 

Gronde,  J.  The  Swiss  railways  in  the  year  1921.  Ry.  Age,  Jan.  7,  1922.  Pp.  3. 
Large  deficit  in  operation.  Tourist  travel  restricted  by  high  rates  of  exchange 
for  Swiss  money. 

Griffin,  M.  T.  South  African  railways  progress  despite  deficits.  Ry.  Age,  Jan.  7, 
1922.     Pp.  2. 

Gutot,  Y.     Le  nouveau  regime  des  chemins  de  fer.     Journ.   des.   Econ.,   Nov.   15, 

1921.  Pp.  10. 

Hersiiberger,  D.  C.  The  Chilean  railroad  problem  and  its  solution.  Ry.  Age,  Jan. 
21,  1922.  Pp.  5.  Question  of  electrification  because  of  topography  and  character 
of  resources.     With  map,  profile,  etc. 

HiNES,  W.  D.  Ford  is  right — and  wrong.  Nation's  Bus.,  Dec,  1921.  Pp.  2. 
Analysis  of  operations  of  the  D.  T.  &  I.  under  Henry  Ford's  management. 

Hombehger,  L.  Die  Wirtschaftliche  Lage  der  Deutschen  Reichsbahn.  Archiv. 
f.  Eisenbahnw.,  Nov.-Dec,  1921.     Pp.  20. 

HowsoN,  E.  T.     The  federal  valuation  is  entering  new  stages.     Ry.   Age,  Jan.   7, 

1922.  Pp.  3. 

Kraeger,  F.  W.  Freight  car  orders  during  1921  lowest  on  record.  Ry.  Age,  Jan. 
7.  1922.     Pp.  4.     Only  23,346  cars  ordered,  compared  with  84,207  in  1920. 

.     Locomotive  market  in  quiescent  state  during  1921.     Ry.  Age,  Jan.  7, 

1922.     Pp.  3.     Only  239  orders  placed,  compared  with  1,998  in  1920. 


1922]  Railways  and  Transportation  175 
.     Passenger  car  purchase  small  during  1921.     Ry.  Age,  Jan.  7,  1922. 


Pp.  2.     Orders  totaled  246,  compared  with  1,781  in  1920. 

Kruttschxitt,  J.  Railroad  efficiency:  past  and  present.  Atlantic  Mo.,  Jan.,  1922. 
Pp.  10.  Review  of  railway  development,  financial  difficulties,  and  present  methods 
of  operation. 

Laxe,  H.  F.  Five  years  of  freight  traffic  growth  is  lost.  Ry.  Age,  Jan.  7,  1922. 
Pp.  6.  Freight  traffic  in  1921  less  than  in  any  year  since  1915.  With  charts  and 
tables. 

.     General  railroad  developments   during   the  year.     Ry.   Age,  Jan.   7, 


1922.     Pp.  6.     Review  of  the  railway  year  1921. 
.     Status  of  railroad  accounts  with  the  government.     Ry.  Age,  Jan.  7, 


1922.     Pp.  4.     Payments  by  government  to  date,  loans,  unpaid  balances,  etc. 

LoEix,  H.  Le  projet  de  reorganisation  des  chemins  de  fer  helvetiques.  Rev.  Pol. 
et  Pari.,  Dec.  10,  1921.     Pp.  18.     Analysis  of  the  Swiss  railway  problem. 

Lyne,  J.  G.  Nor  do  South  America's  roads  escape  adversity.  Ry.  Age,  Jan.  7, 
1922.     Pp.  3.       High  costs  coupled  with  inadequate  earnings. 

MuHLFiELD,  J.  E.  An  analysis  of  the  freight  car  situation.  Ry.  Age,  Nov.  19,  1921. 
Pp.  3.  Number,  condition,  and  performance  of  railway  cars.  With  statistics  and 
chart. 

Oldham,  J.  E.  A  plan  for  railroad  consolidations.  Ry.  Rev.,  Nov.  19,  26,  1921. 
Pp.  5,  5. 

Pahkes,  H.  Progress  towards  normalcy  in  railway  labor  field.  Ry.  Age,  Jan.  7, 
1922.     Pp.  5.     Railway  labor  developments  in  1921. 

PaemeleEj  J.  H.  An  analysis  of  the  railway  statistics  for  1921.  Ry.  Age,  Jan.  7, 
1922.  Pp.  6.  Decline  in  traffic  in  1921  greatest  in  American  railway  history. 
Analysis  of  earnings,  wages,  and  traffic. 

Pasvoxsky,  L.     The  railroad  situation  in  soviet  Russia.     Annalist,  Dec.  5,  1921.  P.  1. 

Payxe,  J.  L.  The  Canadian  railways  are  in  a  bad  way.  Ry.  Age,  Jan.  7,  1922. 
Pp.  3.     Year  1921  worst  in  Canadian  railway  history. 

Peschaud,  M.     Agreement  on  reorganization  of  French  railways.     Ry.  Age,  Dec.  31, 

1921.  Pp.  4.     French  railway  reorganization  under  new  Railway  act. 

.     High  lights  in  the  French  railway  situation.     Ry.  Age,  Jan.  7,  1922. 

Pp.  4.     Large  deficits.     New  law  of  1921  will  be  helpful. 

Reder,  G.  German  railways  operating  under  difficulty.  Ry.  Age,  Jan.  7,  1922. 
Pp.  2.     Large  deficits,  but  some  physical  progress  in  1921. 

Remy.  Die  Geschichte  der  serbischen  Eisenbahnen.  Archiv  f.  Eisebahnw.,  Nov.- 
Dec,  1921.     Pp.  44. 

Thayer,  R.  E.  The  Indinn  railways  face  a  serious  problem.  Ry.  Age,  Jan.  7,  1922. 
Pp.  2.     Financially  prosperous,  but  physically  inadequate. 

.     Railway   situation   in  other  European  countries.     Ry.   Age,   Jan.   7, 

1922.  Pp.  2.     Railway  results  for  1921  in  Norway,  Sweden,  Spain,  and  Belgium. 

.     Review   of   English   railways   during   1921.     Ry.   Age,   Jan.   7,   1922. 


Pp.  5.     Difficult  financial   and  consolidation   problems   being  faced.     New  law   in 
effect. 


176  Periodicals  [March 

Wai,keHj  R.  The  regulation  of  securities  under  section  20-a.  Ry.  Age,  Jan.  7, 
1922.     Methods  and  results  under  one  provision  of  Transportation  act. 

Waterman,  R.  Regrouping  the  railroads.  Nation's  Bus.,  Nov.,  1921.  Pp.  2.  Sum- 
maries of  the  I.  C.  C.  and  Oldham  plans. 

Whyte,  F.  M.  Unifying  the  railway  gages  of  Australia.  Ry.  Age,  Jan.  7,  1922. 
Pp.  4.     With  maps. 

Chinese  railways  experience  normal  year  in  1921.     Ry.  Age,  Jan.  7,  1922.     Pp.  3. 

Die  bulgarischen  Eisenhahnen  in  den  Rechnungsjahren  1914-1918.  Archiv  f.  Eisen- 
bahnw.,  Nov.-Dec,  1921.     Pp.  13. 

Die  Eisenhahnen  Griechenlands  vor  und  nach  dent  Krieg.  Archiv  f.  Eisenbahnw., 
Nov.-Dec,  1921.     Pp.  7. 

Die  Eisenhahnen  Japans  1914-1915  to  1918-1919.  Archiv  f.  Eisenbahnw.,  Nov.-Dec, 
1921.     Pp.  7. 

Indian  Railway  Committee,  1920-1921.  Ry.  Gaz.  (London),  Sept.  23,  30;  Oct.  7, 
14,  1921.  Pp.  4,  4,  4,  2.  Summary  of  report  and  recommendations  of  committee 
of  inquiry  on  the  Indian  railway  system. 

Prices  still  much  higher  than  railway  rates.  Ry.  Age,  Dec.  3,  1921.  Pp.  4.  Based 
on  average  of  years  1890-1899  as  100.     With  graphs. 

Commerce 

(Abstracts  by  Harry  R.  Tosdal) 

Anderson,  B.  M.  Our  trade  relations  with  Europe  from  the  economist's  point  of 
view.  Econ.  World,  Oct.  22,  1922.  Pp.  2.  Since  manufacturing  countries  were 
the  ones  to  suffer  because  of  the  war,  they  must  be  revived  by  imports  of  their 
products  to  the  United  States  in  order  to  restore  the  equilibrium  of  trade.  Opposes 
tariff"  wall. 

Bavin,  T.  R.  Price-fixing  in  Australia  during  the  war.  Journ.  Comp.  Legis.  and 
Intern.  Law,  third  series,  vol.  Ill,  part  IV.  Pp.  10.  Provisions  and  accomplish- 
ments of  federal  and  state  price-fixing  legislation  in  Australia  during  war. 

Camp,  W.  R.  Proposed  reforms  in  the  system  of  food  distribution.  Journ.  Pol. 
Econ.,  Nov.,  Dec,  1921.  Pp.  10,  22.  I,  Consideration  of  abuses  existing  in  fruit, 
dairy  products,  and  vegetable  industries  and  proposals  for  reducing  the  cost  of 
distribution  as  factor  in  cost  of  living.  II,  Gives  proposals  of  Federal  Trade 
Commission  to  remedy  conditions  in  packing  industry.  States  that  the  Commis- 
sion overlooks  industrial  advantages  of  system  built  up  by  packers  and  that  their 
reforms  "leave  all  discretionary  power  as  to  distribution  in  hands  of  owners  of 
surplus  products  and  therefore  essentially  continue  the  present  conflict  of  interests 
between  the  distributors  and  the  final  users  of  those  products." 

Dennis,  A.  P.  The  United  States  and  Great  Britain  as  competitors  in  the  world's 
coal  trade.  Econ.  World,  Oct.  29,  1921.  Pp.  4.  Reprinted  from  Commerce 
Reports.  Discusses  the  relative  advantages  and  disadvantages  of  United  States 
and  Great  Britain,  our  greatest  competitor  for  world  trade. 

Happold,  H.  Englische  Entscheidungen  iiber  die  ratenweisen  Leiferungen  der 
Waren.  Blatter  f.  Vergleichende  Rechtswis.  u.  Volkswirtsch.,  Apr.-Oct.,  1921. 
Pp.  7.  Brief  examination  of  English  decisions  upon  what  constitutes  legal 
delivery  of  goods. 


1922]  Public  Utilities  177 

KiELSTRA,  J.  G.  Die  hollandischen  Kolonien  und  der  Freihandel.  Weltwirtsch. 
Archiv,  July,  1921.  Pp.  13.  Traces  history  of  commercial  policy  of  Dutch 
colonies,  concluding  that  free  trade  is  favorable  to  development  of  new  colonies. 

Payejt,  E.  L' aluminium:  sa  production,  ses  emplois.  L'Econ.  Frang.,  Dec.  3,  1921. 
Pp.  2.  Digest  of  remarks  of  various  speakers  at  exposition  and  series  of  con- 
ferences held  in  summer  of  1921  to  discuss  production  and  uses  of  aluminium. 

.     Le  cafe:  sa  production  et  sa  consommation.     L'Econ.   Fran^.,   Nov. 

12,  1921.  Pp.  2.  Statistical  report  of  production  and  consumption  of  coflFee. 
Recommends  that  France  develop  proposal  of  growing  coffee  in  her  colonies. 

.     Le  magnesium:  sa  production,  son  emploi,  ses  perspective.     L'Econ. 

Fran^.,  Dec.  10,  1921.  Pp.  2.  Gives  information  concerning  production,  uses, 
and  commercial  possibilities  of  magnesium:  based  on  lecture  of  Professor  Flusin 
of  University  of  Grenoble. 

Staubach,  C.  p.  Sales  quotas.  Bull.  Taylor  Soc,  Oct.,  1921.  Pp.  7.  Paper  on 
certain  aspects  of  use  of  sales  quotas  in  valuating  market  possibilities  of  terri- 
tories presented  at  meeting  of  Taylor  Societj^,  February,  1921. 

Vandehbltje,  H.  B.  The  functional  approach  to  the  study  of  marketing.  Journ. 
Pol.  Econ.,  Oct.,  1921.  Pp.  7.  Illustrates  by  reference  to  work  of  Shaw,  Weld, 
Cherington,  Duncan,  and  others  the  development  of  functional  basis  for  study  of 
marketing. 

The  artificial  silk  industry  in  the  United  States  and  Europe.  Econ.  World,  Nov.  5, 
1921.  Pp.  7.  Statistical  report  giving  history  of  growth  of  industry  and  showing 
its  large  possibilities  of  development. 

A  national  cooperative  wheat-marketing  scheme  (United  States).  Intern.  Rev. 
Agri.  Econ.,  Aug.-Sept.,  1921.  Pp.  5.  Description  of  objects  and  methods  of 
United  States  Grain  Growers,  Inc. 

Reports  of  sales  research  committee.  Bull.  Taylor  Soc,  Oct.,  1921.  Pp.  3. 
"Abstract  of  a  preliminary  report  of  the  Committee  on  Sales  Questionnaire  pre- 
sented at  the  annual  meeting  of  the  Taylor  Society,  New  York,  Dec.  3,  1920." 

Public  Utilities 

(Abstracts  by  Charles  S.  Morgan) 

Andrews^  H.  L.  Bus  and  car  costs  compared.  Elec.  Ry  Journ.,  Oct.  29,  1921. 
Pp.  3.  A  criticism  of  two  recent  studies  of  the  respective  fields  of  the  rail  car, 
the  trolley  bus  and  the  gasoline  bus. 

Bauer,  J.  Deadlock  in  public  utility  regulation.  II,  Nothing  ever  settled.  Nat. 
Munic.  Rev.,  Oct.,  1921.  Pp.  4.  After  twenty  years  of  commission  regulation 
there  is  such  indefiniteness  about  fair  value,  fair  rate  of  return,  proper  elements 
of  cost,  etc.,  that  confusion  and  delay  still  attend  the  regulatory  process.  Ill, 
Inefficient  service.  Ibid.,  Nov.  1921.  Pp.  5.  Commission  regulation  has  failed 
to  develop  a  program  of  requiring  a  high  degree  of  efficiency  in  utility  operation 
and  of  assisting  in  the  promotion  thereof.  IV,  The  character  of  the  commissions, 
and  what  should  be  done.  Ibid.,  Jan.,  1922.  Pp.  6.  Despite  its  shortcomings 
regulation  is,  in  general,  preferable  to  municipal  ownership  or  service-at-cost.  It 
should,  however,  be  rendered  more  effective  by  improving  the  personnel  of  the 
commissions,  a  problem  calling  for  appointments  on  the  basis  of  technical  fitness 
rather  than  political  expediency. 


178  Periodicals  [March 

Blood,  W.  H.,  Jr.  The  passing  of  "depreciated  value"  in  rate  cases.  Stone  & 
Webster  Journ.,  Dec,  1921.  Pp.  22.  In  valuation  of  a  utility's  plant  for  rate- 
making  purposes  no  deduction  should  be  made  for  "accrued  depreciation"  where 
plant  is  in  one  hundred  per  cent  operating  condition.  Citation  of  recent  deci- 
sions supporting  this  view. 

BuDENZ,  L.  F.  Befogging  the  transit  issue.  Nation,  Nov.  16,  1921.  Pp.  2.  The 
Transit  Commission's  plan  for  the  reorganization  of  New  York  City's  trans- 
portation agencies  does  not  protect  the  public  from  high  fares  or  arbitrary 
control,  and  is  in  no  sense  genuine  municipal  ownership. 

Caer,  H.  F.  Regulation  of  public  utilities.  Nat.  Elec.  Light  Assoc.  Bull.,  Nov., 
1921.  Discussion  of  the  origin,  development  and  present  problems  of  commission 
regulation. 

Chamonard.  Les  abonnements  telephoniques.  Le  Monde  Econ.,  Oct.  15,  1921. 
Pp.  2.  Report  made  to  Chamber  of  Commerce  of  Lyons  approving,  as  a 
temporary  measure  only  and  with  certain  specified  reservations,  of  a  projected 
change  from  the  usual  flat-rate  basis  to  a  graduated  basis  of  charging  for  tele- 
phone service  in  France.     Automatic  telephony  preferred. 

Dana,  E.  8ervice-at-cost  contract  franchise  and  state  regulation.  Elec.  Ry.  Journ., 
Oct.  8,  1921.  Pp.  2.  Advantages  of  service-at-cost  franchises  over  commission 
regulation,  with  particular  reference  to  Boston  Elevated  Railway. 

EiCHEL,  E.     Railway  situation  in  Berlin.     Elec.  Ry  Journ.,  Nov.   5,  1921.     Pp.  3. 

Brief  account  of  problems  encountered  in  operation  of  Berlin's  railways. 
E.  C.  G.     Rates  fixed  by  municipality  under  power  to  regulate  and  fix  rates.     Mich. 

Law  Rev.,   Dec,   1921.     Pp.   3.     Brief  statement  of  principles   of  law   developed 

to  date  in  widespread  controversy  over  power  of  municipalities  to  establish  binding 

rates. 

Geuiil,  E.  The  traction  industry  today  and  four  years  ago.  Elec.  Ry.  Journ., 
Oct.  8,  1921.  Pp.  4.  "The  difficulties  confronting  the  industrj^  are  as  acute  today 
as  they  were  at  the  beginning  of  the  four-year  period."  Need  for  further  efforts 
looking  to  the  final  readjustment  of  the  industry. 

HoBEiNj  C.  A.  Public  utility  invested  capital.  Annalist,  Nov.  14,  1921.  Pp.  2. 
Valuation,  which  should  be  based  on  the  historical  cost  of  the  property,  is  rela- 
tively less  important  than  that  the  return  thereon  should  be  sufficient  to  maintain 
securities  at  a  market  value  commensurate  with  the  capital  investment  which 
they  represent.     Formula  for  determination  of  such  a  rate  of  return  is  presented. 

N.  M.  What  is  admissible  evidence  of  value  in  eminent  domain?  Harvard  Law 
Rev.,  Nov.,  1921.  Pp.  2.  Summary  of  recent  federal  court  decisions  in  which  a 
further  extension  of  the  principle  of  eminent  domain  is  established,  while  the 
cost  of  reproduction  method  of  valuation  is  limited  by  what  a  "reasonably  jirudent 
man  would  purchase  or  undertake  the  construction  of  the  property  for." 

Mathews,  N.  The  valuation  of  property  in  the  early  common  lata.  Harvard  Law 
Rev.,  Nov.,  1921.  Pp.  16.  Examination  of  early  cases  and  commentaries  shows 
that,  despite  frequent  and  diversified  instances  of  valuation  practice,  there  was  no 
development  of  principles  of  valuation  until  about  the  middle  of  the  nineteenth 
century. 

MuHPHT,  E.  J.  The  present  trend  of  business.  Aera,  Dec,  1921.  Pp.  3.  Sta- 
tistics, here  presented,  of  operating  revenues  and  expenses  of  72  representative 
electric  railways  for  the  first  nine  months  of  1920  and  1921  give  evidence  of  effects 
on  this  industry  of  the  prevailing  business  depression. 


1922]  Public  Utilities  179 

Nash,  R.  R.  The  worth  of  a  car  ride.  Stone  &  Webster  Journ.,  Oct.,  1921.  Pp.  8. 
The  value  of  the  service  rendered  by  a  public  utility  has  not  been  and  can  not  be 
definitely  determined.  Therefore,  this  stricture  on  the  "cost  of  service"  basis 
of  rates  is,  in  general,  unwarranted. 

Newman,  J.  K.  The  future  of  street  railway  financing.  Elec.  Ry.  Journ.,  Oct.  8, 
1921.  Pp.  2.  Discussion  of  proper  financial  structure  for  companies  operating 
under  service-at-cost  franchises. 

Pehhy,  J.  A.  Appeal  for  reason  in  utility  regulation.  Elec.  World,  Oct.  29,  1921. 
Pp.  2.  President  of  National  Association  of  Railway  and  Utilities  Commissioners 
sounds  warning  against  regulation  which  does  not  look  to  a  proper  development 
of  utilities. 

Phillips,  A.  I.  Effect  of  English  btu  standard.  Gas  Age-Record,  Nov.  12,  1921. 
Pp.  3.  Judging  from  British  experience  with  the  Gas  Regulation  act  of  1920, 
this   American   engineer   favors   "the   removal   of   all   heating   value    restrictions," 

"rates    being    "fixed    in    accordance    with    our    recognized    principles    of 

regulation." 

Slees,  G.  C.  The  wrangle  over  public  utilities  in  Illinois.  Nat.  Munic.  Rev.,  Nov., 
1921.     Pp.  2.     Brief  survey  of  recent  legislation  in  Illinois. 

W.  R.  V.  Coal  mining  affected  with  a  public  interest.  Yale  Law  Journ.,  Nov., 
1921.  Pp.  4.  Broadening  of  concept  of  industries  "affected  with  a  public 
interest." 

Wehle,  L.  B.  Low  street  railway  fares  with  the  help  of  the  landowner.  Nat. 
Munic.  Rev.,  Oct.,1921.  Pp.  4.  The  landowner  benefited  by  increased  land  values 
as  the  result  of  the  extension  of  transit  facilities  should  bear,  through  taxation, 
a  proportion  of  the  initial  cost  of  construction  of  such  facilities. 

Advantages  of  a  superpower  system.  Elec.  World,  Nov.  5,  1921.  Selections  from 
a  recent  government  report  showing  In  detail  the  savings  to  be  accomplished  by  a 
superpower  system  between  Boston  and  Washington. 

Analysis  of  weekly  pass  at  Youngstown.  Elec.  Ry.  Journ.,  Dec.  24,  1921.  Pp.  5. 
Instructive  interpretation  of  results  obtained  in  this  apparently  successful  attempt 
to  built  up  traffic. 

California  public  utility  regulation.  Gas  Age-Record,  Dec.  24,  1921.  Pp.  2.  Por- 
tions of  last  annual  report  of  California  Railroad  Commission,  showing  some  of 
the  methods  and  effects  of  regulation. 

City  takes  Toronto  Railway.  Elec.  Ry.  Journ.,  Sept.  10,  1921.  P.  1.  Formal 
transfer  will  be  consummated  by  about  January  1,  1922. 

Commission's  tentative  plan  criticized.  Elec.  Ry.  Journ.,  Dec.  17,  1921.  P.  1. 
President  of  Brooklyn  Rapid  Transit  Company  objects  principally  to  the  holding 
company  feature  of  the  New  York  Transit  Commission's  proposed  reorganization 
of  the  city's  rapid  transit  system  and  proposes  a  substitute  therefor. 

Constitutional  methods  of  regulating  jitneys.  Yale  Law  Journ.,  Dec,  1921.  Pp.  4. 
Consideration  of  constitutionality  of  recent  Connecticut  legislation. 

Features  of  Des  Moines  franchise.  Elec.  Ry.  Journ.,  Dec,  10,  1921.  Pp.  2.  Sum- 
mary of  this  recent  service-at-cost  franchise. 

Hearings  completed  for  year.  Elec.  Ry.  Journ.,  Dec.  24,  1921.  Pp.  3.  Summary  of 
testimony  on  proposed  reorganization  of  New  York  City's  railways,  particularly 
with  reference  to  financial  aspects  of  the  plan. 


180  Periodicals  [March 

One  year  of  service  at  cost  at  Rochester.  Elec.  Ry.  Journ.,  Dec.  24,  1921.  P.  1. 
Better  public  feeling  and  improved  service  have  been  accomplished. 

Ownership  and  operation  of  utilities.  Elec.  World,  Nov.  12,  1921.  P.  1.  Committee 
on  public  ownership  and  operation  of  utilities  of  National  Association  of  Railway 
and  Utilities  Commissioners  reports  that  public  ownership  is  undesirable  in  theory 
and  unsuccessful  in  practice. 

Regulation  of  utilities  in  Wisconsin.  Elec.  Ry.  Journ.  Oct.  29,  1921.  Pp.  4. 
Interesting  description  of  work  of  Wisconsin  Railroad  Commission,  especially  its 
efforts  to  strengthen  the  companies  it  regulates. 

8ervice-at-cost  sound.  Elec.  Ry.  Journ.,  Dec.  31,  1921.  P.  1.  A  significant  state- 
ment, abstracted  from  a  recent  report  of  Cleveland  Street  Railway  Commissioner, 
of  the  results  accomplished  in  last  six  years  and  of  certain  problems  now  being 
faced. 

Statistics  of  New  York  railways.  Elec.  Ry.  Journ.,  Nov.  26,  Dec.  17,  1921.  Pp.  4,  4. 
Extended  presentation  of  Transit  Commission's  statistics  on  various  aspects  of  the 
city's  railways. 

Utility  commissioners  discuss  motor  buses.  Elec.  Ry.  Journ.,  Oct.  29,  1921.  Pp.  3. 
Views  of  various  commissioners  on  the  proper  sphere  of  the  motor  bus  in  local 
transportation. 

What  the  public  utility  commissioners  think  about  important  rate  questions.  Pub. 
Service  Manag.,  Jan.,  1922.  A  particularly  important  report  of  committee  on 
rates  of  National  Assoc,  of  Railway  and  Utilities  Commissioners. 

Accounting 

(Abstracts  by  Martin  J.  Shugrue) 

BossERT,  H.  Newspaper  accounting.  Journ.  Account.,  Dec,  1921.  Pp.  22.  De- 
scription of  the  operation  of  a  newspaper  plant  and  its  accounting  requirements. 

Bowman,  J.  H.  Electric  railway  cost  accounting.  Elec.  Ry.  Journ.,  Oct.  15,  1921. 
Pp.  4. 

Cook,  W.  W.  Stock  without  par  value.  Am.  Bar  Assoc.  Journ.,  Oct.  1921.  Pp.  3. 
Consideration  of  this  new  device  of  corporate  financing;  of  the  dangers  it  may 
involve,  and  of  additional  steps  needed  to  protect  creditors  and  purchasers. 

Gkaham,  D.  Should  a  small  bank  analyze?  Journ.  Am.  Bankers  Assoc,  Oct.,  1921. 
Pp.  2.  The  answer  is  probably  "yes"  with  reservations.  Discusses  the  small 
account  problem,  the  large  account  that  is  a  source  of  loss  and  other  difficulties 
to  which  depositor  may  subject  his  bank. 

Joyce,  H.  W.  The  traveling  auditor.  Journ.  Account.,  Nov.,  1921.  Pp.  4.  How 
his  efficiency  may  be  judged. 

Knight,  M.  A.  The  operation  of  the  analysis  department.  Bankers  Mag.,  Nov., 
1921.  Pp.  5.  Intended  for  the  consideration  chiefly  of  bankers  doing  business 
in  smaller  cities.     Illustrated  with  specimen  forms. 

Myer,  E.  M.     Lumber  freight.     Journ.  Account.,  Dec,  1921.     Pp.  6. 

Oakey,  F.  Auditing  federal  reesrve  banks.  Journ.  Account.,  Nov.,  1921.  Pp.  8. 
Outlines  the  steps  which  must  be  followed  in  conducting  an  audit  of  this  kind. 

Pritdden,  R.  F.  Bank  credit  investigator.  Bankers  Mag.,  Oct.,  Nov.,  1921.  Pp.  10. 
Fifth  and  sixth  in  a  series  of  articles  dealing  with  the  work  of  the  credit  depart- 


1922]  Labor  and  Labor  Organizations  181 

ment   of   a   bank.     The   last   of   the   series    deals    particularly    with   trade    terms 
and  discounts,  trade  acceptances  and  summarizing  the  investigation. 

Putijam:,  G.  E.  Unit  costs  as  a  guiding  factor  in  buying,  operations.  Journ.  Pol. 
Econ.,  Oct.,  1921.  Pp.  13.  Shows  that  the  packer's  cost-accounting  system  per- 
forms one  of  its  chief  functions  in  indicating  the  maximum  price  that  can  profit- 
ably be  paid  for  live  stock  rather  than  in  determining  the  minimum  selling  price; 
and  incidentally  that  a  cost  system  performs  essentially  the  same  functions  in 
many  other  industries. 

Wall,  A.  A  profitable  account.  Bankers  Mag.,  Oct.,  1921.  Pp.  5.  A  discussion 
of  method  by  which  the  profit  or  loss  on  a  checking  account  may  be  obtained 
with  fairness  to  both  banker  and  customer. 

Wn-LiAMs,  C.  B.  Treatment  of  costs  during  periods  of  varying  volumes  of  pro- 
duction. Journ.  Account.,  Nov.,  1921.  Pp.  1.3.  Believes  that  manufacturing  cost 
should  not  be  affected  by  variations  in  the  volume  of  production  but  that  it 
should  be  based  upon  normal  volume  of  production. 

WrLsox,  C.  N.  A  system  of  accounts  for  cheese  factories.  Wis.  Div.  Markets  Bull, 
no.  5.,  1920.  Pp.  16.  The  suggested  accounting  blanks  and  forms  and  a  brief 
text  are  presented  for  the  purpose  of  assisting  the  standardization  of  business 
methods  in  the  cheese  industry  of  Wisconsin. 

WiLsojf,  C.  N.  A  system  of  accounts  for  cooperative  warehouses.  Wis.  Div. 
Markets  Bull.,  no.  5,  1920.  Pp.  30.  The  system  outlined  in  this  bulletin  is 
offered  to  enable  cooperative  warehouses  to  comply  with  requirements  of  the 
law  and  to  facilitate  the  making  of  income-tax  returns. 

Wood,  J.  The  preparation  of  the  annual  accounts  of  a  farm.  Accountants'  Mag. 
(Edinburgh),  Nov.,  1921.  Pp.  8.  Fourth  in  a  series  of  articles  dealing  with 
farmers'  accounts.     Illustrated  with  statement  forms. 

Accounting  for  legislative  appropriations  for  state  institutions.  Pace  Student, 
Dec,  1921.  Pp.  5.  Outline  of  accounting  requirements  illustrated  with  journal 
entries  and  typical  forms  for  records. 

Cost  accounting  work  in  trade  organizations.  Pace  Student,  Nov.,  1921.  Pp.  2. 
Contains  correspondence  on  this  subject  between  Chamber  of  Commerce  of  the 
United  States  and  the  Federal  Trade  Commission. 

Notes  on  balance-sheets.  Bankers'  Mag.  (London),  Nov.,  Dec,  1921.  Pp.  5,  6. 
I,  An  elementary  explanation  of  what  a  balance  sheet  is  and  how  its  items  are 
classified  and  also  briefly  how  it  may  be  analyzed.  II,  Analyzes  three  credit 
statements:  a  good  balance  sheet,  a  second  class  risk,  and  a  statement  of  a 
company  in  poor  financial  condition.     To  be  continued. 

Valuation  of  debts  in  a  merchant's  balance-sheet.  Accountants'  Mag.  (Edinburgh), 
Nov.,  1921.  Pp.  9.  Mainly  concerned  with  the  valuation  for  balance-sheet  pur- 
poses of  debts  on  open  account. 

Labor  and  Labor  Organizations 

(Abstracts  by  David  A.  McCabe) 

Aixisox,  B.  D.     Labor  education  in  Germany.     Survey,  Oct.  8,  1921.     Pp.  2. 

Andrews,  J.  B.  The  President's  Conference  on  Unemployment — success  or  failure? 
Am.  Labor  Legis.  Rev.,  Dec,  1921.  Pp.  4.  Answer  depends  on  degree  to  which 
the  manufacturers  take  steps  to  reduce  inequalities  of  employment  within  their 
own  establishments. 


182  Periodicals  [March 

AsKwiTH,  Lord.  The  executive  section  of  industry.  Fortn.  Rev.,  Nov.,  1921. 
Pp.  6.  The  brain-workers  are  organizing  and  may  join  the  trade  union  movement 
unless  the  employers  treat  them  with  sympathy  and  tact. 

Barker^  J.  E.  Unemployment:  its  cause  and  only  remedy.  Fortn.  Rev.,  Nov.,  1921. 
Pp.  9.     The  cause  is  the  extortionate  and  restrictive  policies  of  labor. 

Barton,  D.  M.  Women's  minimum  wages.  Journ.  Royal  Stat.  Soc,  July,  1921. 
Pp.  41.  Comparison  of  wages  fixed  by  trade  boards  and  those  fixed  by  voluntary 
agreement;  the  boards  have  undoubtedly  raised  the  wages  of  the  lower-paid 
workers,  without  preventing  agreements  for  higher  rates  being  made.  Paper  is 
followed  by  discussion. 

BiNG,  A.  M.  The  British  building  guilds.  Survey,  Oct.  29,  1921.  Pp.  5.  Results 
to  date  and  prospects. 

Bmo,  F.  H.  The  cost  of  living  as  a  factor  in  wage  adjustments  in  the  book  and 
job  branch  of  the  Chicago  printing  industry.     Am.  Econ.  Rev.,  Dec,  1921.     Pp.  21. 

Blankenhorn,  H.  The  temper  of  the  coal  miners.  Survey,  Oct.  22,  1921.  Pp.  2. 
Review  of  1921  convention  of  United  Mine  Workers. 

Burns,  G.  H.  The  vital  question  of  building  trades  wages.  Annalist,  Dec.  26, 
1921.  Pp.  2.  Drastic  wage  cuts  are  inadvisable  with  present  level  of  living  costs; 
the  solution  is  increased  output  by  the  individual  workers. 

Carlton,  F.  T.  Drifting  stockholders:  floating  workers.  Survey,  Dec.  31,  1921. 
Pp.  3.  Looks  toward  control  of  industry  by  the  resident  managers  and  the 
workers. 

Chenery,  W.  L.  The  storm's  passing.  Survey,  Nov.  5,  1921.  Pp.  2.  The 
calling-ofi'  of  the  threatened  railroad  strike. 

Clynes,  J.  R.  Labour  and  unemployment.  Nineteenth  Cent.,  Nov.,  1921.  Pp.  11. 
An  analysis  of  the  causes  and  a  program.  The  writer  is  one  of  the  leaders  of  the 
Labour  party. 

Cole,  G.  D.  H.  Labour  in  war  and  peace.  Fortn.  Rev.,  Dec,  1921.  Pp.  14.  A 
review  of  the  developments  from  1913  to  date.  Two  significant  new  movements 
are  the  building  guilds  and  the  working-class  education  movement.  Trade  unions 
are  now  on  the  defensive,  however,  owing  to  the  unemployment  situation. 

.     Labor  prospects  in  Oreat  Britain.     No.  Am.  Rev.,  Oct.,  1921.     Pp.  12. 

.     Non-manual  trade  unionism.     No.  Am.  Rev.,  Jan.,  1922.     The  growth 

of  organization  among  supervisory  and  technical  workers;  the  future  course  of 
industrial  organization  depends  largely  on  whether  they  throw  in  their  lot  with 
the  unions  of  manual  workers. 

CoNDLn'TE,  J.  B.  Wage  arbitration  in  New  Zealand  under  falling  prices.  Econ. 
Journ.,  Dec,  1921.  Pp.  7.  The  court  has  not  raised  real  wages  in  times  of 
prosperity  and  would  doubtless  hold  them  up  in  the  period  of  falling  prices,  but 
reductions  in  nominal  wages  are  unpopular  and  the  court  is  facing  a  severe  test. 

Cooke,  M.  L.  Unemployment  within  ernployment.  Intern.  Lab.  Rev.,  Dec,  1921. 
Pp.  11.  Deals  with  idleness  among  workers  who  are  employed.  A  paper  read 
before  the  Taylor  Society,  May  9,  1921. 

Cox,  G.  V.  The  English  building  guilds:  an  experiment  in  industrial  self-govern- 
ment. Journ.  Pol.  Econ.,  Dec,  1921.  Pp.  15.  Organization,  nature  of  the 
contracts,  financing,  results  in  output  and  cost,  elements  of  strength,  and  relation 
to  guild  socialist  principles. 


1922]  Labor  and  Labor  Organizations  183 

Feig,  J.  The  right  of  association  among  agricultural  workers  in  Germany.  Intern. 
Labor  Rev.,  Dec,  1921.     Pp.  9.     Causes  of  increase  in  organization  and  strikes. 

FiNDLAY,  Sm  John.  Industrial  peace  in  New  Zealand.  Intern.  Lab.  Rev.,  Oct., 
1921.     Pp.  16.     The  achievements  outweigh  the  disappointments. 

Francke,  E.  The  new  spirit  in  German  labour  legislation.  Intern.  Lab.  Rev., 
Oct.,  1921.  Pp.  7.  The  new  legislation  is  based  on  the  principle  of  the  equality 
of  rights. 

GiSBOTTBXE,  F.  a.  W.  The  recoil  of  the  living  wage  in  Australia.  Nat.  Rev.,  Aug., 
1921.     Pp.  14.     System  had  to  fail  because  based  on  wrong  principles. 

Godwin,  F.     The  rise  of  Japanese  labor  consciousness.     Nation,  Oct.  26,  1921.   Pp.  4. 

GoMPEHS,  S.  The  unemployment  conference — a  picture.  Am.  Fed.,  Nov.  1921. 
Pp.  7. 

Greenwood,  E.  Labor  at  Geneva.  Survey,  Dec.  17,  1921.  Pp.  2.  The  results  of 
the  third  annual  conference  of  the  International  Labor  Organization  of  the  League 
of  Nations. 

Griffith,  S.  Productive  unemployment  in  Germany.  Survey,  Dec.  24,  1921.  Pp.  3. 
The  unemployed  are  put  to  work  in  government  enterprises  or  on  private  work 
of  recognized  public  utility,  with  funds  advanced  by  the  government. 

Hansen,  A.  H.     Cycles  of  strikes.     Am.  Econ.  Rev.,  Dec.  1921.     Pp.  5. 

Herbert,  A.  S.  Unemployment  and  the  remedy:  the  socialisation  of  industry. 
Fortn.  Rev.,  Dec,  1921.     Pp.  11. 

Hunt,  E.  E.  Action — an  account  of  the  measures  that  have  arisen  out  of  the 
President's  Conference  on  Unemployment.  Survey,  Dec,  17,  1921.  Pp.  3.  Writer 
was  secretary  of  the  conference. 

Hctchins,  B.  L.  The  present  position  of  industrial  women  workers.  Econ. 
Journ.,  Dec,  1921.  Pp.  10.  Unemployment  is  increasing  and  wage  reductions 
are  threatened.  The  Trade  Board  plan  must  be  retained,  economies  must  be 
introduced  by  employers,  and,  if  necessary,  combinations  to  keep  up  prices 
organized. 

Krause,  L.  Dismissal  of  workmen  in  the  new  German  labor  legislation.  Am. 
Fed.,  Dec,  1921.     Pp.  3. 

.     Trade  union  movement  in  Austria  and  Hungary.     Am.   Fed.,  Oct., 


1921.     Pp.  3. 

Lane,  W.  D.     The  labor  sky  in  West  Virginia.     Survey,  Oct.  22,  1921.     Pp.  3. 

.     West    Virginia — The   civil  war  in   its   coal  fields.     Survey,   Oct.   29, 

1921.     Pp.  7. 

Laski,  H.  J.     England's  unemployed.     Survey,  Oct.  1.5,  1921.     Pp.  2. 

Madia,  G.  L'aumento  dei  salari  dal  1914  al  1921.  Giorn.  d.  Econ.,  Oct.,  1921. 
Pp.  10. 

Neumann,  S.  International  Arbejderlovgivning.  Nationalok.  Tids.,  2-3,  1921. 
Pp.  7.  Outlines  the  attempts  made  to  bring  about  uniform  international  regula- 
tion of  labor  conditions  and  looks  for  progress  under  the  provisions  of  the 
treaty  of  Versailles. 


184  Periodicals  [March 

PiGou,.  A.  C.  Unemployment.  Contcmp.  Rev.,  Dec,  1921.  Pp.  6.  An  analysis 
of  the  causes  of  the  present  situations;  a  restoration  of  confidence  is  essential 
to  recovery. 

QuiNBY,  R.   S.     A    study   of  industrial  absenteeism.     Mo.   Labor   Rev.,   Oct.,   1921. 

Pp.  9. 
RosEWATER,  V.     Wages,  budgets,  cost  of  living.     Am.  Econ.  Rev.,  Dec,  1921.     Pp.  4. 

RowNTREE,  B.  S.  The  future  of  industry.  Survey,  Dec  3,  1921.  Pp.  3.  Five 
points  which  employers  must  concede  to  labor  to  secure  industrial  peace. 

.     Prevention  and  compensation  of  unemployment.     Intern.  Lab.  Rev., 

Dec,    1921.     Pp.    13.     Deals    with    the    general    problem    rather    than    with    the 
present  emergency. 

.     Unemployment    compensation,    an    aid    to    economic    security.     Am. 


Labor  Legis.  Rev.,  Dec,  1921.     Pp.  4. 

Shadwell.  The  war  of  the  mines.  Quart.  Rev.,  July,  1921.  Pp.  19.  The  causes 
of  the  struggle  are  to  be  found  largely  in  the  policies  pursued  by  the  government 
in  all  the  big  mining  disputes  for  the  past  ten  years.     Favors  a  national  pool. 

TucKWELL,  G.  M.  The  story  of  the  Trade  Board's  acts.  Contemp.  Rev.,  Nov., 
1921.     Pp.  7.     Constructive  criticism. 

TuRNERj  V.  B.  Labor  conditions  and  legislation  in  New  Zealand.  Mo.  Labor 
Rev.,  Dec,  1921.     Pp.  15. 

.     Labor  unrest  in  Australia  and  South  Africa.     Mo.  Labor  Rev.,  Nov., 

1921.     Pp.  32. 

Waggaman,  M.  T.  Some  developments  in  the  movement  for  "family  wages." 
Mo.  Labor  Rev.,  Oct.,  1921.     Pp.  12.     Covers  foreign  countries. 

Walsh,  F.  P.  Wall  Street's  control  of  railroad  labor  policy.  Nation,  Nov.  2,  1921. 
Pp.  2. 

Warner,  A.  Fighting  unionism  with  martial  law.  Nation,  Oct.  12,  1921.  Pp.  2. 
Refers  to  conditions  in  coal  fields  of  Mingo  County,  West  Virginia. 

West,  G.  P.  A  100-per  cent  American  strike.  New  Repub.,  Oct.  19,  1921.  Pp.  2. 
A  strike  of  oil-well  workers  in  San  Joaquin  Valley,  California;  the  strikers  will 
probably  be  defeated. 

Whitney,  A.  L.  Labor  unrest  in  Scandinavian  countries  and  Finland.  Mo.  Labor 
Rev.,  Oct.,  1921.     Pp.  17. 

British  Trades  Union  Congress — synopsis  of  proceedings  of  the  fifty-third  annual 
convention  at  Cardiff.     Lab.  Gaz.  (Canada),  Oct.,  1921.     Pp.  4. 

Control  of  the  employment  of  children  in  agriculture  in  Canada  and  the  United 
States.  Intern.  Lab.  Rev.,  Oct.,  1921.  Pp.  25.  Tabular  summary  of  laws  of 
provinces  and  states. 

Control  of  the  employment  of  children  in  agriculture  in  Europe.  Intern.  Lab.  Rev., 
Nov.,  1921.     Pp.  37. 

Decisions  of  the  Railroad  Labor  Board  on  overtime.  Mo.  Labor  Rev.,  Oct.,  1921. 
Pp.  4.  Rules  of  general  application  adopted  by  the  Board  for  the  six  shop 
crafts.  These  are  compared  in  parallel  columns  with  the  rules  on  the  same 
subject  in  the  "national  agreement"  made  between  the  Railroad  Administration 
and  the  shop  crafts  federation. 


1922]  PubUc  Finance  185 

Decisions  of  the  Railroad  Labor  Board.     Mo.  Labor  Rev.,  Dec,  1921.     Pp.  4.     The 

decision  of  the  Board  further  amending  the   "national  agreements"   of  the   shop 

crafts. 
The  eight-hour  day  in  Japan.     Intern.  Lab.  Rev.,  Oct.,  1921.     Pp.  4. 
The  employment  situation  in  Russia  since  the  bolshevik  revolution,  II.     Intern.  Lab. 

Rev.,  Oct.,  1921.     Pp.  15. 
Fourth  convention  of  National   and  Catholic    Unions.     Lab.   Gaz.    (Canada),   Oct., 

1921.     Pp.  4.     Synopsis  of  proceedings. 
Further    action    toward    the    alleviation    of    unemployment    conditions    in    Canada. 

Lab.  Gaz.  (Canada),  Oct.,  1921.     Pp.  5. 

Orowth  of  trade  unionism  since  1913.  Intern.  Lab.  Rev.,  Dec,  1921.  Pp.  4.  Supple- 
ment to  article  under  same  title  in  the  July-August,  1921,  number. 

Joint  industrial  councils  in  Great  Britain.     Intern.  Lab.  Rev.,  Dec,  1921.     Pp.  16. 

Juvenile  employment  service  in  Canada  and  other  countries.  Lab.  Gaz.  (Canada), 
Nov.,  1921.     Pp.  4. 

Labor  legislation  of  1921.     Am.  Labor  Legis.  Rev.,  Dec,  1921.     Pp.  7.5. 

Minimum  wage  legislation  for  low-paid  industries  in  Europe.  Intern.  Lab.  Rev., 
Nov.,  1921.     Pp.  31. 

President's  Conference  on  Unemployment ,  Washington,  D.  C.  Mo.  Labor  Rev., 
Nov.,  1921.     Pp.  9. 

Profit-sharing  and  co-partnership  in  Great  Britain.  Intern.  Labor  Rev.,  Oct.,  1921. 
Pp.  12. 

Progress  of  the  English  building  guilds.     Mo.  Labor  Rev.,  Dec,  1921.     Pp.  7. 

Recommendations  of  the  President's  Conference  on  Unemployment.  Survey,  Oct. 
22,  1921.     Pp.  3. 

Sixteenth  congress  of  the  Confederation  Ginerale  du  Travail,  France.  Mo.  Labor 
Rev.,  Oct.,  1921.     Pp.  4. 

The  threatened  railroad  strike.  Mo.  Labor  Rev.,  Dec,  1921.  Pp.  15.  Record  of 
events,  with  texts  of  important  statements. 

The  trade  union  movement.  Intern.  Labor  Rev.,  Oct.,  1921.  Pp.  11.  Chiefly  con- 
cerned with  international  movements. 

Wage  award  by  Judge  Landis  in  Chicago  building  trades,  September  7,  1921. 
Mo.  Labor  Rev.,  Oct.,  1921.     Pp.  5.     Text  of  the  award. 

Workers'  education  in  Great  Britain.     Intern.  Lab.  Rev.,  Nov.,  1921.     Pp.  18. 

Public  Finance 

(Abstracts   by   Charles   P.   Huse) 

Andersox,  W.  Income  tax:  corporation  profits  tax  and  super  tax.  Scottish 
Bankers  Mag.,  Oct.,  1921.  Pp.  20.  Traces  the  history  of  the  British  income  tax, 
giving  the  changes  made  in  1920. 

Badulesco,    V.     Le    preUvement    sur   le    capital    en    Autriche.     Rev.    Sci.    et    Legis. 

Finan.,  July-Sept.,  1921.     Pp.  1.32.     Gives  the  history  and  text  of  the  act. 
Branchini,  M.  and  Scialoja,  A.     Note  e  noterelle  di  politica  doganale.     Riv.   di 

Pol.     Econ.,  no.   VI,   1921.     Pp.    12.     Five   controversial   articles   on   the   current 

Italian  tariff  situation. 


186  Periodicals  [March 

Brown,  H.  G.  The  shifting  of  taxes  on  sales  of  land  and  capital  goods  and  on  loans. 
Journ.  Pol.  Econ.,  Oct.,  1921.  Pp.  11.  Considers  many  possible  effects  of  such 
taxes. 

Clarke,  P.  L.  Classified  taxation  in  Kentucky.  Bull.  Nat.  Tax.  Assoc,  Nov.,  1921. 
Pp.  4.     The  reform  has  brought  good  financial  and  moral  results. 

CoMSTOCK,  A.  Lessons  of  the  French  turnover  tax.  Annalist,  Dec.  12,  1921.  Pp.  2. 
Possibilities  of  evasion  and  inequality  of  application  to  agricultural  and  business 

classes. 

CoRBiNo,  E.  Un  caso  dl  protezionismo  marittimo  a  rovescio.  Giorn.  d.  Econ., 
Sept.,  1921.     Pp.  4. 

DiNGLEY,  E.  N.  Refunding  foreign  obligations.  Protectionist,  Dec,  1921.  Pp.  7, 
Gives  the  history  of  the  foreign  loans  and  considers  the  chances  of  repayment  by 
the  various  countries. 

Dudley,  A.  S.  State  classification  and  the  commerce  clause.  Bull.  Nat.  Tax 
Assoc,  Nov.,  1921.  Pp.  6.  Considers  the  constitutionality  of  the  Montana  law 
which   taxes   railroad   property   at   a   higher   rate   than   land   of   the   same   value. 

Fairchild,  F.  R.  The  futures  of  state  and  local  taxation.  Bull.  Nat.  Tax  Assoc, 
Dec,  1921.  Pp.  7.  Proposes  as  an  ultimate  goal  the  use  of  the  income  tax, 
supplemented  by  a  tax  on  physical  wealth  and  possibly  a  business  tax. 

Grilli,  C.  II  protezionismo  dopo  la  guerra.  Riv.  Internaz.,  Aug.,  Sept.,  1921. 
Pp.  8,  21. 

Grossman,  E.  Les  finances  publiques  de  la  Suisse  de  1914  «  19W.  Rev.  Sci.  et 
Legis.  Finan.,  July-Sept.,  1921.  Pp.  37.  Shows  the  effects  of  the  war  upon  Swiss 
expenditures,  both  central  and  local,  and  the  measures  taken  to  meet  them. 

Haig,  R.  M.  The  crisis  in  state  and  local  taxation  of  banks.  Journ.  Am.  Bankers 
Assoc,  Oct.,  1921.  Pp.  4.  A  recent  decision  of  the  supreme  court  apparently 
makes  a  revision  of  state  laws  imperative. 

Haristoy,  J.  L'impot  sur  le  revenu  (suite).  Rev.  Sci.  et  Legis.  Finan.,  July- 
Sept.,  1921.  Pp.  12.  Tells  of  recent  developments  in  the  administration  of  the 
French  income  tax. 

Hayes,  F.  M.  Inheritance  taxes  and  how  to  provide  for  them.  Econ.  World, 
Oct.  8,  1921.  Pp.  3.  To  prevent  injury  to  the  estate,  life  insurance  should  be 
carried. 

HoRwiLL,  H.  W.  Problems  of  local  taxation  in  England.  Pol.  Sci.  Quart.,  Dec, 
1921.     Pp.  12.     Local  rates  have  risen  to  an  average  of  17  shillings  in  the  pound. 

Houston,  D.  F.  I,  Where  our  taxes  go,  and  whi/.  H,  What  you  need  to  know 
about  federal  taxation.     World's  Work,  Sept.,  Oct.,  1921. 

Howe,  S.  T.  The  determination  of  a  tax  levy.  Bull.  Nat.  Tax  Assoc,  Nov.,  1921. 
Pp.  4.     Minimum  rates  combined  with  valuation  at  selling  value  should  be  adopted. 

Kaiin,  O.  H.  The  effect  of  tax  revision  on  prosperity.  An  open  letter.  Finan. 
Rev.  Rev.,  Dec,  1921.     Pp.  6.     A  plea  for  a  reduction  in  the  surtaxes. 

Liesse,  a.  Le  budget  de  1922;  les  Economies  et  le  rendemcnt  des  impofs.  L'Econ. 
Frang.,  Oct.  1.5,  1921.  Pp.  3.  The  finance  commission  of  the  chamber  of  deputies 
reports  against  heavier  taxes  and  in  favor  of  economies. 

Mann,  F.  K.     Die  Finanzlage  der  Schweiz.    Weltwirtsch.  Archiv,  July,  1921.    Pp.  10. 


1922]  Population  187 

The  war  has  brought  about  a  tremendous  increase  in  the  Swiss  debt  and  compelled 
resort  to  very  heavy  taxes. 

MarioNj  M.  Le  produit  des  contributions  indirectes  pendant  I'anee  1920.  L'Econ. 
Fran^.,  Nov.  5,  1921.  Pp.  5  Gives  figures  comparing  the  productivity  of  the 
various  taxes  in  1919  and  1920. 

Mills,  O.  L.  The  spending  tax.  Bull.  Nat.  Tax  Assoc,  Oct.,  1921.  Pp.  3.  Out- 
lines a  new  tax  which  he  believes  should  take  the  place  of  the  surtaxes. 

Oneto,  S.  La  discriminazione  qualitativa  fra  ricchezze  soggette  ad  imposta. 
Giorn.  d.  Econ.,  Sept.,  1921.     Pp.  20. 

Pearson,  E.  N.  Federal  income  tax  law.  Investment  Bankers  of  Am.  Bull.,  Sept. 
30,  1921.     Pp.  3.     Explains  procedure  in  case  of  tax-free  covenants. 

Rice,  J.  I.  The  inconsistencies  and  shortcomings  of  the  tax  lazes  of  South  Carolina. 
Bull.  Nat.  Tax  Assoc,  Nov.,  1921.  Pp.  2.  Classification  can  only  follow  the 
adoption  of  a  constitutional  amendment. 

Schneider,  S.  Das  Steuerkapital  der  Kantone  und  die  Steuerbelastung.  Zeitsch.  f. 
Schweizerische  Statistik  u.  Volkswirtsch.,  2  Heft,  57  Jahrg.  Pp.  19.  A  study  of 
capital  taxation  in  Switzerland  including  the  inheritance  tax. 

ScHULTHESs.  The  Swiss  tariff  policy.  Protectionist,  Dec.  5,  1921.  Switzerland 
has  been  forced  by  business  depression  to  adopt  a  higher  tariff. 

Smith,  G.  P.  The  doubtful  constitutionality  of  the  federal  estate  tax  on  life 
insurance  payable  to  specified  beneficiaries.  Econ.  World,  Nov.  5,  1921.  Pp.  2. 
Argues  that  such  policies  are  not  a  part  of  decedent's  estate,  citing  decisions  of 
state  courts  in  support. 

Stamp,  J.  C.  The  taxable  capacity  of  Ireland.  Econ.  Journ.,  Sept.,  1921.  Pp.  14. 
Discusses  the  principles  which  should  be  followed  in  measuring  this  taxable 
capacity. 

Vakh,  C.  N.  Our  fiscal  policy.  Journ.  Indian  Econ.  Soc,  Sept.  1921.  Pp.  21. 
Deals  largely  with  tariff  history. 

ViGORELLi,  R.  La  difesa  fiscale  e  giuridica  delta  piccola  proprieta.  Riv.  Internaz., 
July,  1921.     Pp.  10. 

YvES-GuYOT.  La  riforme  sociale  et  les  finances  britanniques.  Journ.  des  Econ., 
Oct.  15,  1921.  Pp.  14.  Believes  that  England's  social  legislation  will  bring  back 
the  evils  removed  by  the  poor  law  reform  of  1834. 

American  valuations.  Protectionist,  Nov.,  1921.  Pp.  9.  Favors  plan  because  of 
its  protective  and  revenue  features. 

Population 

(Abstracts  by  A.  B.  Wolfe) 

Adami,  G.  The  true  aristocracy.  Sci.  Mo.  Nov.  1921.  Pp.  15.  Advocates  the 
widespread  establishment  of  mental  and  physical  tests  for  the  improvement  of 
the  national  stock  "by  scientific  and  democratic  means,  irrespective  of  wealth  and 
influence."     Address  before  the  Second  International  Congress  of  Eugenics. 

Andeeades,  a.  De  la  population  de  Constantinople  sous  les  empereurs  byzantins. 
Metron,  Dec,  1920.     Pp.  46. 

Andreades,  M.  and  others.     La  population  de  l' Empire  britannique  aprbs  la  guerre: 


188  Periodicals  [March 

le  recensement  anglais  du  19  juin  1921.     L'Econ.   Franc.,  Xov.  26,   1921.     Pp.  3. 
Discussion  before  the  Societe  d"Economie  Politique  de  Paris. 

AuEoussEAu,  M.  The  distribution  of  population:  a  constructive  problem.  Geog. 
Rev.,  Oct.  1921.  Pp.  30.  A  valuable  contributive  article  relative  to  ratio 
between  population  and  resources.  Article  shows  how  geographical  science  should 
be  brought  to  the  aid  of  economics  in  solving  the  problem  of  the  distribution  of 
population. 

Batesox,  W.  Common  sense  in  racial  problems.  Eugenics  Rev.,  Apr.  1921.  Pp.  14. 
Equality  of  political  power  has  been  bestowed  upon  the  lowest  elements  of  our 
population  and  we  are  nearing  the  final  stage  of  democratic  decay.  Biological 
truth  has  been  recognized  too  late. 

Bal-r,  E.  Die  bioJogische  Bedeutung  der  Auszcanderu7ig  fiir  Deutschland.  Archiv 
f.  Frauenkunde,  July,  1921.     Pp.  3.     Deteriorating  influence  of  emigration. 

Bertelsex,  a.  So7ne  statistics  on  the  native  population  of  Greenland.  Metron. 
Sept.,  1921.     Pp.  5. 

Bloch,  L.  Occupations  of  immigrants  before  and  after  coming  to  the  United 
States.  Quart.  Pub.  Am.  Stat.  Soc,  June,  1921.  Pp.  15.  A  statistical  study 
originally  prepared  for  the  Carnegie  Americanization  study.  The  available 
statistics  indicate  that  on  the  whole  neither  the  immigrant  agricultural  workers 
nor  the  immigrant  skilled  workers  follow  their  former  occupations  to  a  large 
extent  after  the  coming  to  the  United  States. 

Cestre,  C.  The  family  extra  xcage  in  France.  Survey,  Nov.  12,  1921.  Pp.  2.  Out- 
line of  one  of  France's  neo-mercantUistic  repopulation  devices. 

Cox.  H.     The  problem  of  population.     Dial,  May,  1921.     Pp.  7. 

Darwix,  L.  The  field  of  eugenic  reform.  Sci.  Mo.,  Nov.  1921.  Pp.  14.  A  general 
but  pointed  presentation  of  some  fundamental  problems  in  eugenics  policy. 
Address  before  the  Second  International  Congress  of  Eugenics. 

D.\rwin-,  L.  Population  and  civilization.  Econ.  Jour.,  June,  1921.  Pp.  8..  "We 
want  another  Malthus  to  arise  who  would  avail  himself  of  all  the  knowledge 
reaped  during  the  last  hundred  years  and  who  would  face  these  intricate  problems 
with  the  same  courage  displayed  by  his  great  predecessor." 

Ehler,  J.  Bevolkerungsbewegung  in  den  pretissischen  Grosstddten  im  Jahre  1920. 
Jahrb.  f.  Nat.  Ockon.,  July,  1921.     Pp.  3. 

Fisher,  I.  Impending  problems  of  eugenics.  Sci.  Mo.,  Sept.  1921.  Pp.  18.  Presi- 
dential address  before  the  Eugenics  Research  Association. 

GuRADZE,  H.  Berlins  Bevolkerungsbewegung  in  und  nach  dem  Weltkriege.  Jahrb. 
f.  Nat.  Oek.  u.  Statistik,  June,  1921.     Pp.  3. 

Hail,  P.  F.     The  present  and  future  of  immigration.     No.   Am.   Rev.,  May,   1921. 

Keelogg,  V.     Race  and  A/nericanization.     Yale  Rev..  July,  1921.     Pp.  12. 

Kellor,  F.     Future  immigration.     No.  Am.  Rev.,  July,  1921     Pp.  8. 

KxiBBS.  G.  H.  The  theory  of  large  population — aggregates.  Metron,  July,  1920. 
Pp.  13.  Popular  statement  of  some  of  the  author's  mathematical  theories  of  popu- 
lation. 

March,  L.  The  consequences  of  war  and  the  birth  rate  in  France.  Sci.  Mo.,  Nov., 
1921.     Pp.  21.     An  indirect  argument  for  France's  repopulation  policy.     Rejects 


1922]  Insurance  and  Pensions  189 

the  Malthus  analysis  on  the  ground  that  no  one  law  can  be  formulated  for 
population  growth.  An  address  before  the  Second  International  Congress  of 
Eugenics. 

Peabi,  R.  The  biology  of  death.  VII,  Natural  death,  public  health,  and  the  popu- 
lation problem.  Sci.  Mo.  Sept.,  1921.  Pp.  21.  Concluding  number  of  Prof. 
Pearl's  noteworthy  series  of  articles.  In  this  his  mathematico-biological  theory  of 
the  ultimate  limit  of  population  in  any  country  is  presented.  The  limit  for  the 
United  States  is  put  at  197^/4  millions. 

-.     A    biological   classification   of   the   causes   of   death.     Metron,   April, 


1921.     Pp.  9. 

ScHrLiEE,  F.  S.  C.  Eugenics  versus  civilization.  Eugenics  Rev.,  July,  1921.  Pp.  13. 
Civilization  need  not  be  unfavorable  to  eugenical  quality  of  the  human  stock. 

TtraPEAUj  J.  La  natalite.  Monde  Econ.,  Nov.  26,  1921.  Pp.  4.  A  laudatory 
review  of  Auburtin's  La  Natalite. 

WaixiSj  W.  D.  The  Mexican  immigrant  in  California.  Pacific  Rev.,  Dec,  1921. 
Pp.  11.     Characteristics  and  eflfects. 

Westenhofer,  Dr.  Auswanderung  und  Heimat-Siedlung  vom  eugenetischen  Stand- 
punkt.     Archiv  f.  Frauenkunde.     July,  1921,  Pp.  23. 

Birth  control  in  France.     Survey,  Jan.  7,  1922.     Pp.  1. 

Le  mouvement  de  la  population  en  France  en  1920.  L'Econ.  Frang.,  Aug.  20-27, 
1921.  Pp.  2.  Recent  demographic  statistics  from  the  Journal  Officiel,  July  31, 
1921. 

La  population  de  la  Belgique.     L'Econ.  Frang.,  Oct.  1,  1921.     P.  I. 

Insurance  and  Pensions 

(Abstracts  by  Henry  J.  Harris) 

DE  Berxoxviele,  D.  Chronique  des  questions  ouvrieres  et  des  assurances  sur  la  vie. 
Journ.  Soc.  Stat.  Paris,  Dec,  1921.  Pp.  7.  Summary  data  on  unemployment, 
cost-of-living  indices,  wages  and  digest  of  bill  on  social  insurance. 

BuRXET,  P.  The  relation  between  commodity  prices  and  life  insurance  in  the  United 
States,  1860-1920.     Econ.  World,  Oct.  22,  1921. 

Cabell^  H.     The  automobile  insurance  situation.     Econ.  World,  Oct.  1.5,  1921. 

Leal,  J.  R.  Is  a  reliable  sickness  experience  table  necessary  in  personal  health  and 
accident  insurance?  Econ.  World,  Nov.  12,  1921.  Pp.  2.  Seven  eighths  of  the 
companies  doing  business  have  compiled  no  data  which  are  essential.  Can  be 
compiled  on  the  plan  used  by  the  life  investigations. 

MowBRAT,  A.  H.  Competition  and  regulation  of  rates  for  casualty  insurance. 
Econ.  World,  Nov.  26,  1921.  Pp.  2.  Unrestricted  competition  increases  costs  and 
rates  and  tends  to  unfair  discrimination.  Experts  should  work  out  standards  to 
guide  official  regulation. 

de  Nouviox,  G.  Les  assurances  sociales  obligafoires.  Journ.  des.  Econ.,  Oct.  15, 
1921.  Pp.  16.  Bill  introduced  in  French  Parliament,  March  22,  1921.  Provisions 
of  bill,  history  of  social  insurance  in  Germany,  and  views  of  the  mutual  aid 
societies  are  given.  Author  concludes  that  bill  is  not  wanted  by  the  wage-earners 
and  that  it  will  bring  financial  embarrassment. 


190  Periodicals  [March 

Preus,  J.  A.  C.  A  government  experiment  vs.  life  insurance  principles.  Econ. 
World,  Dec.  17,  1921.  Pp.  5.  The  North  Dakota  experiments  are  socialistic; 
life  insurance  is  based  on  cooperation  and  is  the  only  sound  plan  for  solving  the 
economic  problems  of  the  Northwest. 

Winter,  W.  D.  Legitimate  and  illegitimate  uses  of  marine  insurance.  Econ. 
World,  Nov.  12,  1921.     Reprinted  from  the  Nov..  1921,  issue  of  Credit  Monthly. 

Woodward,    J.    H.     Industrial    retirement    system    based    on    the    money-purchase 
principle.     Econ.  World,  Dec.  3,  10,  1921.     Pp.  4,  2.    Basis  of  pension,  types  of 
benefits,    age    at    retirement,    costs,    contributory    and    non-contributory    plans, 
,  carriers  and  legal  status  of  insured. 

WoRLEY,  A.  Insurance:  its  origins  and  its  relation  to  commerce.  Econ.  World, 
Nov.  19,  1921.     Pp.  5.     Evolution  from  earliest  times  to  the  present. 

The  favorable  mortality  experience  of  American  life  insurance  companies  in  1921, 
Econ.  World,  Dec.  10,  1921. 

Pauperism,  Charities,  and  Relief  Measures 

(Astracts  by  George  B.  Mangold) 

Bowers,  P.  E.  The  necessity  for  sterilization.  Journ.  Delinquency,  Sept.,  1921. 
An  unusually  strong  argument  in  favor  of  the  sterilization  of  defectives. 
Hereditary  defectiveness  is  responsible  for  so  many  of  our  social  ills  that  some 
method  of  preventing  reproduction  must  be  devised.  Sterilization  is  not  con- 
sidered a  predatory  measure,  but  one  of  the  best  methods  of  treatment  which 
society  has  at  her  command  for  the  improvement  of  the  human  race. 

NoETHCOTT,  C.  H.  Unemployment  relief  in  Great  Britain.  Pol.  Sci.  Quart.,  Sept., 
1921.  The  principal  measure  designed  to  reduce  unemployment  in  Great  Britain 
was  the  Unemployment  Insurance  act  passed  in  1920.  This  act  extends  the 
benefits  to  nearly  all  the  trades  and  also  increases  contributions  beyond  those 
allowed  in  the  act  of  1911.  The  long  continued  period  of  unemployment  has, 
however,  made  it  difficult  to  carry  out  the  act.  Among  other  proposed  measures 
were  schemes  for  the  building  of  roads  and  plans  for  the  development  of  parks 
and  public  works.  An  attempt  was  also  made  to  place  ex-service  men  in  the 
building  trades,  but  this  measure  has  been  temporarily  abandoned. 

Richmond,  W.  An  industrial  institute  survey.  Journ.  Delinquency,  Sept.,  1921. 
This  is  a  survey  of  the  Wyoming  Industrial  Institute,  a  school  for  delinquent 
boys.  The  writer  reaches  conclusions  similar  to  those  obtained  in  other  studies 
of  institutions.  He  finds  that  two  thirds  of  the  children  are  below  average 
intelligence,  that  1.5  per  cent  arc  definitely  feeble-minded  and  21  per  cent  are 
border-line  cases.  Only  10  per  cent  out  of  the  total  number  were  regarded  as 
promising  material. 

Smith,  D.  S.  Adoption  of  children  in  New  Zealand.  Journ.  Comp.  Legis.  and 
Intern.  Law,  third  series,  vol.  Ill,  part  IV.  Consists  largely  of  an  analysis  of 
the  adoption  laws  in  New  Zealand  and  of  the  historical  steps  leading  up  to  the 
present  laws.  The  adopted  child  is  now  given  the  status  of  a  child  born  in 
lawful  wedlock  to  the  adopting  parents.  The  value  of  the  law  is  evident  from 
the  fact  that  in  95  per  cent  of  the  cases  handled  the  proceedings  applied  to 
illegitimate  children. 

Zeutiien,  F.  Fremtidens  Forsogelsesvasen.  Nationalok.  Tids.,  4,  1921.  Pp.  26. 
A  constructive  criticism  of  a  recently  published  Danish  government  report  looking 
toward  improvements  in  charity  and  relief  administration  and  theory. 


1922]  Socialism  and  Co-operative  Enterprises  191 

Socialism  and  Co-operative  Enterprises 

Neumaxx,  a.  Die  Entwicklung  der  sozialistischen  Frauenhewegung.  Schmollers 
Jahrb.,  3  Heft,  45  Jahrg.,  1921. 

OkeaLj  J.     The  socialists.     Their  strength.     Forum,  Aug.,  1921, 

RenaeDj  G.  La  question  sociale:  elargissons  le  socialisme.  Scientia,  Dec,  1921. 
Pp.  5. 

RiGGS,  E.  G.     The  socialists.     Their  weakness.     Forum,  Aug.,  1921. 

ScHUiiPETER,  J.  Sozialistische  Moglichkeiten  von  heute.  Archiv.  f.  Sozialwis.  u. 
Sozialpolitik,  2  Heft,  48  Bd.,  1921.     Pp.  55. 

Statistics 

(Abstracts  by  Horace  Secrist) 

Antoxelli,  E.  Une  enquite  r^gionale  sur  le  coiit  de  la  vie.  Rev.  d'Econ.  Pol., 
Sept.-Oct,  1921. 

BachIj  R.  Numeri  indici  dei  prezzi  delle  merci  nel  commercio  all'  ingrosso  in  Italia 
nel  mese  de  guigno  1921.  L'Economista,  July  24,  1921.  Pp.  6.  Index  numbers  of 
wholesale  prices  in  Italy,  given  as  arithmetic  means,  compared  with  those  for 
previous  months.  Similar  current  studies  are  presented  in  subsequent  issues  of 
L'Economista. 

.     Sulla  rilevazione  statistica  del  movimento   dei  forestieri.     Giorn.   d. 

Econ.,   Aug.,   1921.     Pp.    13.     The   statistical  determination   of  the  extent   of   the 
tourist  movement  in  Italy. 

Baenett,  G.  E.  a  critique  of  cost-of-living  studies.  Quart.  Pub.  Am.  Stat.  Assoc, 
Sept.,  1921. 

Beichee,  R.  R.  Estimates  of  the  population  of  the  United  States  for  intercensal 
years.  Quart.  Pub.  Am.  Stat.  Assoc,  Dec,  1921.  Pp.  4.  "An  analysis  of  avail- 
able statistics  on  births,  deaths,  immigration,  and  emigration  during  the  period 
from  1910  to  1920  has  been  found  to  provide  a  fairly  satisfactory  basis  for 
estimating  the  population  growth  for  the  intervening  years.  The  purpose  of  this 
paper  is  to  present  the  results  of  that  analysis  and  to  suggest  a  method  which 
can  be  applied  to  the  estimation  of  growth  during  the  period  prior  to  the  taking 
of  the  1930  census." 

BeetelseXj  a.  Some  statistics  on  the  native  population  of  Greenland.  Metron, 
Sept.,  1921,     Pp.  5. 

Beveeidge,  W.  H.  Weather  and  harvest  cycles.  Econ.  Journ.,  Dec,  1921.  Pp.  24. 
A  further  analysis  of  the  relation  of  weather  and  harvest  cycles,  based  upon 
yearly  fluctuation  of  wheat  prices  in  Western  and  Central  Europe  from  1500  to 
1869.  Concludes  in  part  as  follows:  "the  yield  of  harvest  in  Western  and  Central 
Europe  from  the  middle  of  the  sixteenth  to  the  opening  of  the  twentieth  century 
has  been  subject  to  a  periodic  influence  or  combination  of  such  influence  tending  to 
produce  bad  harvests  at  intervals  of  about  15.3  years,  the  first  epoch  falling  in 
1556.     This  proposition  is  about  as  certain  as  harmonic  analysis  can  make  it." 

Bowxey,  a.  L.     The  labour  report  on  the  cost  of  living.     Econ.  Journ.,  Sept.,  1921, 

Beadfoed,  E,  S.  Methods  used  in  measuring  unemployment.  Quart.  Pub.  Am. 
Stat.  Assoc,  Dec,  1921.  Pp.  12.  A  review  of  methods  of  measuring  unemploy- 
ment and  an  estimate  of  the  amount  at  the  close  of  1921. 


192  Periodicals  [March 

Burnet,  A.  R.  Trade  associations  and  btisiness  statistics.  Administration,  Dec, 
1921.     Pp.  17. 

Cabvee,  H.  C.  The  mathematical  representation  of  frequency  distributions.  Quart. 
Pub.  Am.  Stat.  Assoc,  Sept.,  1921. 

Clougii,  H.  W.  Note  on  methods  for  indicating  and  measuring  correlation,  with 
examples.  Mo.  Weather  Rev.,  Sept.,  1921.  Pp.  2.  "Indicates  methods  for 
securing  approximate  values  of  r  (Pearsonian  correlation  coefficient)  with  less 
labor  of  computation,  also  other  methods  of  measuring  both  correlation  and 
dispersion  or  scatter  of  data,  and  the  analytical  relations  between  them  on  the 
basis  of  a  very  large  number  of  observations." 

CopELAND,  M.  T.  The  readjustment  of  operating  expenses.  Rev.  Econ.  Stat.,  Oct., 
1921.  Pp.  5.  A  review  of  the  data  from  the  Harvard  and  the  Northwestern 
University  Bureaus  of  Business  Research  on  the  operating  expenses  in  retail  shoe, 
grocery,  hardware,  jewelry,  and  clothing  stores. 

Crum,  W.  L.  a  measure  of  dispersion  for  ordered  series.  Quart.  Pub.  Am.  Stat. 
Assoc,  Dec,  1921.  Pp.  7.  Calls  attention  "to  the  inadequacy  of  the  standard 
deviation  for  the  study  of  the  dispersion  of  a  statistical  series  the  terms  of 
whicli  are  ordered  relative  to  a  given  variable,"  examines  "certain  considerations 
bearing  upon  the  dispersion  in  such  series,"  and  "sets  up  tentatively  a  new  mea- 
sure particularly  applicable  to  ordered  series." 

Davis,  R.  M.  Electrical  statistics  as  a  barometer  of  industrial  activity.  Quart. 
Pub.  Am.  Stat.  Assoc,  Sept.,  1921. 

DeLeeuw,  a.  L.  Applying  "moving  average"  charts  to  industry.  Manag.  Engg., 
Dec,  1921.     Pp.  6. 

Dewing,  A.  S.  //  statistical  test  of  the  success  of  consolidations.  Quart.  Journ. 
Econ.,  Nov.,  1921.  Pp.  18.  This  study  of  data  concerning  thirty-five  industrial 
combinations  (chosen  in  conformity  with  six  conditions)  indicates  that  the  first 
year  earnings  after  consolidation  were  less  than  the  earnings  of  the  separate 
plants  before  consolidation,  and  that  earnings  gradually  diminished  until  they 
were  no  more  than  during  the  first  year  of  consolidation. 

Douglas,  P.  H.  An  examination  of  the  wage  statistics  of  the  National  Industrial 
Conference  Board.     Quart.  Pub.  Am.  Stat.  Assoc,  Sept.,  1921. 

Faulkner,  R.  P.  Uses  and  perils  of  business  graphics.  Administration,  Jan.,  1922. 
Pp.  5.  Points  out  some  of  the  simpler  limitations  of  graphs  and  warns  against 
their  sole  or  major  use  in  statistical  studies. 

Fisher.,  R.  A.  On  the  "probable  error"  of  a  coeficient  of  correlation  deduced 
from  a  small  sample.     Metron,  Sept.,  1921.     Pp.  30. 

George,  E.  E.  Details  of  index  number  construction  and  comparison  of  indices. 
Engg.  and  Contracting,  Nov.  9,  1921.     Pp.  3. 

GiusTi,  U.  Methods  of  recording  retail  prices  and  measuring  the  cost  of  living  in 
Italy.  Intern.  Labor  Rev.,  Nov.,  1921.  Pp.  18.  The  subject  is  divided  into: 
(a)  the  collection  of  prices;  (b)  methods  of  calculating  index  numbers; 
(c)  methods  by  which  wages  may  be  adjusted  to  variations  in  the  cost  of  living; 
and,  finally,  (d)  criticisms  and  conclusions. 

Goldenweiser,  E.  a.  The  effect  on  the  reserve  ratios  of  changes  in  reserves  and 
in  liabilities.     Quart.  Pub.  Am.  Stat.  Assoc,  Sept.,  1921. 


1922]  Statistics  193 

IIuBBAKD,  J.  B.  The  Aberthaw  index  of  building  costs.  Rev.  Econ.  Stat.,  Oct.,  1921. 
Pp.  3. 

Huntington,  E.  V.  A  new  method  of  apportionment  of  representatives.  Quart. 
Pub.  Am.  Stat.  Assoc,  Sept.,  1921.     Pp.  12. 

HtTHLiN,  R.  G.     Three  decades  of  employment  fluctuation.     Annalist,  Oct.  24,  1921, 

Kellet,  T.  L.  Certain  properties  of  index  numbers.  Quart.  Pub.  Am.  Stat.  Assoc, 
Sept.,  1921.  Pp.  15.  A  mathematical  analysis  whereby  index  numbers  are  con- 
sidered in  relation  to  the  correlation  between  their  constituent  items. 

Mangold^  F.  Zur  Frage  einer  schweizerischen  Erndhrungsindexziffer.  Zeitsch.  f, 
Schweizerische  Statistik  u.  Volkswirtsch.,  2  Heft,  27  Jahrg. 

Mann,  L.  B.  A  national  index  of  retail  trade.  Quart.  Pub.  Am.  Stat.  Assoc,  Dec, 
1921.     Pp.  2. 

Maech,  L.  Les  modes  de  mesure  du  mouvement  general  des  prix.  Metron,  Sept., 
1921.     Pp.  35. 

Meeker,  R.  On  the  best  form  of  index  number.  Quart.  Pub.  Am.  Stat.  Assoc, 
Sept.,  1921. 

Meerwarth,  R.  Uber  die  Bedeutung  der  Teuerungsziffern.  SchmoUers  Jahrb.,  3 
Heft,  45  Jahrg.,  1921. 

Menzler,  F.  a.  a.  The  census  of  1921.  Some  remarks  on  tabulation.  Journ. 
Inst.  Actuaries,  Apr.,  1921.  Pp.  43.  A  discussion  of  the  census  of  1921,  with 
special  reference  to  the  tabulation  of  items  of  interest  to  the  actuarial  profession, 
together  with  a  description  of  the  tabulation  of  the  1911  census. 

Mitchell,  W.  How  you  can  use  "the  business  cycle."  System,  Dec,  1921.  Pp.  2. 
Stresses  the  necessity  for  the  business  man  to  study  his  own  business  in  the  light 
of  known  factors  of  the  business  cycle. 

Moore,  H.  L.  The  origin  of  the  eight-year  generating  cycle.  Quart.  Journ.  Econ., 
Nov.,  1921.  An  attempt  is  made  to  place  the  cause  of  the  eight-year  generating 
cycle. 

Nerlove,  S.  H.  The  time  element  in  labor  turnover  computation.  Journ.  Pol. 
Econ.,  Dec,  1921.     Pp.  5. 

Newcomber,  M.  Physical  development  of  Vassar  College  students.  Quart.  Pub. 
Am.  Stat.  Assoc,  Dec,  1921.  Pp.  7.  Purpose  of  study  is  to  determine  whether 
women  are  becoming  larger;  based  on  data  covering  Vassar  College  women  and 
extends  over  37  years. 

Newsholme,  a.  The  better  use  of  vital  statistics  in  public  health  administration. 
Quart.  Pub.  Am.  Stat.  Asoc,  Sept.,  1921.  Pp.  11.  Sketches  the  difficulties  of 
securing  in  the  United  States  accurate  vital  statistics.  Concludes  among  other 
things  that  "vital  statistics  can  have  no  higher  value  than  that  of  the  individual 
death  certificates  on  which  they  are  based;  that  no  conjuring  with  classifications 
will  render  indefinite  and  dubious  data  other  than  they  are." 

Owens,  F.  W.  On  the  apportionment  of  representatives.  Quart.  Pub.  Am.  Stat. 
Assoc,  Dec,  1921.  Pp.  11.  Reviews  various  methods  of  apportioning  repre- 
sentatives already  suggested  and  used  and  proposes  another,  based  on  the  theory 
of  least  squares. 

Persons,  W.  M.  and  Coyle,  E.  S.  A  commodity  price  index  of  business  cycles. 
Rev.  Econ.  Stat.,  Nov.,  1921.     Pp.  18.     Purpose  is  to  construct  an  index  of  whole- 


194  Periodicals  [March 

sale  prices  to  secure  an  index  of  business  cycles.  Uses  a  geometric  mean  of  10 
commodities  "varied  in  nature,  important  in  industry,  unusually  sensitive  in  price, 
not  greatly  affected  by  the  seasons,  and  similar  with  respect  to  their  main 
cyclical  price  movements." 

The    iron    and   steel    industry    during    business    cycles.     Rev.    Econ. 


Stat.,  Dec,  1921.  Pp.  5.  Brings  together  the  significant  material  showing  the 
fluctuations  of  the  iron  and  steel  industry  during  periods  of  business  prosperity 
and  depression. 

PoouE,  J.  E.  A  price  index  of  oil  stocks.  Quart.  Pub.  Am.  Stat.  Assoc,  Dec, 
1921.  Pp.  5.  Concludes  that  "the  geometric  mean  of  fixed-base  relatives"  is  a 
"satisfactory  type  of  index  number  for  the  price  of  oil  shares." 

Snyder,  C.     Barometers  of  production.     Bull.  Taylor  Soc,  Oct.,  1921. 

Sydenstricker,  E.  and  King,  W.  I.  The  measurement  of  the  relative  economic 
status  of  families.  Quart.  Pub.  Am.  Stat.  Assoc,  Sept.,  1921.  Pp.  16.  An 
explanation  of  Drs.  King's  and  Sydenstricker's  method  of  rating  families  in  terms 
of  "fammains"  and  of  some  of  its  applications. 

ToMLiNsoN,  M.  C.  W.  The  influence  of  weather  on  coal  consumption.  Manag. 
Engg.,  Dec,  1921.     Pp.  6. 

WiCKSELL,  S.  D.  An  exact  formula  for  spurious  correlation.  Metron,  Sept.,  1921. 
Pp.  8. 

YtTLE,  G.  U.  On  the  time  correlation  problem,  with  especial  reference  to  the 
variate-difference  correlation  method.     Journ.  Royal  Stat.  Soc,  July,  1921. 

Fluctuations  in  retail  prices  and  in  the  cost  of  living.  Intern.  Lab.  Rev.,  Oct.,  1921. 
Pp.  12.  A  comprehensive  account  of  the  cost  of  living  in  Central  and  Eastern 
Europe. 

Labour  coinnnttee  on  the  cost  of  living:  criticisms  of  Ministry  of  Labour  Sta- 
tistics. Lab.  Gaz.  (London),  Sept.,  1921.  An  answer  by  the  Ministry  of  Labour 
to  the  "Criticism  of  the  Ministry  of  Labour's  Retail  Prices  Index  Number" 
issued  by  the  Joint  Committee  appointed  by  the  Trades  Union  Congress,  the 
Labour  party,  and  the  Cooperative  Union  and  other  organizations  to  investigate 
the  cost  of  living. 

New  index  numbers  of  wholesale  prices.  Intern.  Lab.  Rev.,  Oct.,  1921.  Pp.  23. 
A  comprehensive  account  of  the  index  numbers  of  wholesale  prices  in  the  United 
Kingdom,  Italy,  Germany,  Switzerland,  Sweden,  Norway,  and  Denmark. 

Price  and  wage  indices — their  composition  and  characteristics.  Engg.  and  Contract- 
ing, Oct.  26,  1921.     Pp.  3. 

Wholesale  prices  in  various  countries.     Intern.  Lab.  Rev.,  Oct.,  1921.     Pp.  12. 


DOCUMENTS,  REPORTS,  AND  LEGISLATION 
Industries  and  Commerce 

Report  of  Federal  Trade  Commission  on  Shoe  and  Leather  Costs 
AND  Prices.  This  report  was  prepared  in  pursuance  to  a  resolution  of 
the  House  of  Representatives,  directing  the  Commission  "to  inquire  into 
the  increase  in  the  price  of  shoes ;  to  ascertain  the  cause  and  necessity 
for  the  increase;  to  ascertain  the  manufacturers'  cost  price  and  selling  price 
and  the  retailers'  cost  price  and  selling  price  for  the  years  1918  and  1919."* 
In  complying  with  this  resolution  it  was  deemed  necessary  by  the  Commis- 
sion to  include  the  hide  and  tanning  industries,  as  well  as  the  shoe  industry. 
The  inquiry,  therefore,  covered  much  of  the  ground  included  in  a  similar 
report  submitted  in  August,  1919." 

During  1919  the  prices  of  shoes,  leather  and  hides  increased  more  than 
in  any  year  of  the  war  period.  In  1920  this  rapid  rise  was  followed  by  a 
corresponding  decline  in  the  prices  of  hides,  a  less  rapid  and  less  extensive 
fall  in  the  prices  of  leather  and  a  still  smaller  decline  in  the  retail  prices 
of  shoes.  The  upward  movement  of  prices  began  immediately  after  the 
relinquishment  of  government  control  of  hide  prices  in  January,  1919, 
culminating  in  the  case  of  hides  and  leather  in  the  late  summer  and  early 
fall  of  1919,  and  in  the  case  of  shoes  in  the  spring  of  1920. 

During  the  period  of  increasing  prices,  costs  were  also  rising.  Wages, 
supplies,  and  general  expenses  increased  at  every  stage  of  production  and 
distribution.  The  most  important  feature,  however,  was  the  increase  in 
the  cost  of  materials,  namely,  hides  and  skins  for  the  tanning  industry  and 
leather  for  the  shoe  industry.  The  short  supply  of  material,  coupled  with 
an  extremely  active  demand,  resulted  in  a  more  rapid  rise  in  prices  at  each 
stage  of  production  than  in  costs,  thus  allowing  large  profits  for  tanners, 
shoe  manufacturers,  wholesalers  and  retailers. 

The  conclusions  reached  in  the  inquiry,  as  summed  up  by  the  Commission, 
are  that  the  high  prices  of  shoes  in  1918  and  the  great  increase  in  1919 
appear  to  have  been  the  effect  of  abnormal  conditions  of  demand  and  supply 
arising  from  the  war,  which  were  both  economic  and  psychological.  Large 
margins  of  profit  were  taken  by  tanners,  shoe  manufacturers,  wholesalers, 
jobbers,  and  retailers.  The  advance  in  shoe  prices  was  terminated  by  the 
"buyers'  strike"  in  the  spring  of  1920.  The  failure  of  leather  prices  and 
shoe  prices  to  decline  as  extensively  as  did  hide  prices  after  the  "buyers' 
strike"  is  attributed  to  two  factors,  (1)  that  other  costs  had  not  declined  as 
much  as  had  raw  material,  and  (2)  that  there  was  an  apparent  tendency 
to  base  selling  prices  on  replacement  costs — a  policy  inconsistent  with  that 
applied  in  1919  when  prices  were  advancing.  With  reference  to  the  first 
it  may  be  further  pointed  out  that  the  "other  costs"   formed  a  relatively 

'House  Resolution,  217,  66  Cong.,  1  Sess. 
'Report  on  the  Leather  and  Shoe  Industries. 


196  Documents  and  Notes  [March 

more  important  part  in  total  costs  as  the  stage  of  production  advanced  than 
did  raw  material  costs. 

It  is  unfortunate  that  the  year  1920  could  not  have  been  included  in  the 
Congressional  resolution  and  was,  therefore,  only  partially  covered  in  the 
report.  The  prices  of  shoes  kept  on  advancing  several  months  after  hides 
and  leather  prices  had  ceased  to  increase.  The  "buyers'  strike"  of  1920 
halted  the  advance  in  shoe  prices,  but  hides  and  leather  prices  were  being 
affected  by  other  conditions  whose  further  analysis  would  have  been  in- 
structive. 

One  interesting  feature  of  the  report  is  the  influence  of  style  on  prices. 
Multiciplicity  of  styles  and  changes  in  style  operate  against  the  best 
interests  of  manufacturers,  distributors  and  consumers  alike.  Added  costs 
for  leather  suitable  for  particular  styles,  for  labor  and  overhead  accumulate, 
bearing  heavily  upon  both  producers  and  consumers. 

Abraham  Berglund. 

From  the  United  States  Tariff  Commission  have  been  received: 

Fifth  Amiual  Report,  1921   (Washington,  1922,  pp.  101). 

Tariff  Information  Series,  No.  24,  Production  Costs  in  the  Lithopone 
Industry,  First  Six  Months  of  1921  (1921,  pp.  12). 

Tariff  Information  Surveys  on  Steel  (pp.  125);  Musical  Instruments  and 
Phonographs  (pp.  32)  ;  Asbestos  (pp.  56)  ;  Fur  Hats,  Bonnets,  or  Hoods 
(pp.  29);  Hair  and  Manufactures  of  Hair  (pp.  29);  Ftirs  and  Fur  Goods 
(pp.  43)  ;  Feathers,  Artificial  Floxvers,  and  Millinery  Ornaments  (pp.  27)  ; 
Toys  and  Games  (pp.  31);  Cork  (pp.  23);  Bristles  and  Brushes  (pp.  58); 
Brooms  and  Broom  Corn  (pp.  19);  Straw  Hats  (pp.  50);  Beads,  Jewelry, 
and  Precious  and  Semi-Precious  Stones  (pp.  69)  ;  Iron  Ore,  Pig  Iron,  and 
Scrap  (pp.  103)  ;  Machinery,  I  and  II,  (pp.  164,  95)  ;  Pens  and  Penholders 
(pp.  21);  Watches  and  Clocks  (pp.  59);  Lead  (pp.  63);  Antimony  (pp. 
76) ;  Aluminum,  Magnesium,  Calcium,  Barium,  Sodium,  and  Potassium 
(pp.  80)  ;  Anvils,  Blacksmiths'  Hammers,  Nippers,  and  Pliers  (pp.  23)  ; 
Quicksilver  (pp.  30)  ;  The  Zinc  Industry  (pp.  82)  ;  Ores  of  Ferro- Alloys 
(pp.  96);  Logs,  Timber,  Lumber,  and  Other  Wood  Products  (pp.  118); 
Miscellaneous  I  (pp.  67). 

The  Annual  Report  of  the  Federal  Trade  Commission  for  1921  (Wash- 
ington, pp.  174)  contains  a  summary  of  proceedings  pending  and  disposed 
of  (pp.  98-174).  The  Commission  has  also  issued  Milk  and  Milk  Products, 
1914-1918  (Washington,  June,  1921,  pp.  234). 

Hearings  before  the  Senate  Committee  on  Agriculture  and  Forestry  on 
the  Farmers'  Export  Financing  Corporation,  held  in  June,  1921,  have  been 
received  (Washington,  1921,  pp.  134);  also  Agricultural  Inquiry,  hearings 
before  the  Joint  Commission  of  Agricultural  Inquiry  (67  Cong.,  1  Sess.), 
held  June  15,  1921,  part  5   (pp.  68). 

The  United  States  Department  of  Agriculture  has  recently  issued  the 
following  bulletins: 


1922]  Corporations  197 

No.   963,  Cost  of  Producing  Sugar  Beets  in   Utah  and  Idaho,  1918-1919, 
by  L.  A.  Moorehouse,  and  S.  B.  Nuckols  (Washington,  Sept.  17, 
1921,  pp.  41). 
No.   982,  Market  Statistics,  by  C.  J.  West  and  L.   B.   Flohr   (June,   1921, 

pp.  279). 
No.   987,  Handbook    of   Foreign    Agricultural    Statistics,    by    F.    Andrews 
(Nov.  9,  1921,  pp.  69). 

The  federal  Department  of  Commerce  has  issued  Special  Agents  Series, 
No.  210,  Switzerland:  A  Commercial  and  Industrial  Handbook,  by  H.  L. 
Groves  (Washington,  pp.  128). 

A  preliminary  summary  of  Mineral  Resources  of  the  United  States  in 
1920  has  been  prepared  by  the  United  States  Geological  Survey  (Wash- 
ington, July,  1921,  pp.  123);  also,  reprints  from  the  Mineral  Resources 
of  the  United  States  (1919)  on  Cement  in  1919  (pp.  387-40i)  ;  Copper  in 
1919  (pp.  537-614)  ;  Iron  Ore,  Pig  Iron  and  Steel  in  1919  (pp.  621-652). 

The  Board  of  Engineers  for  Rivers  and  Harbors,  War  Department,  has 
begun  the  publication  of  a  Port  Series.  Number  1  relates  to  the  port  of 
Portland,  Maine. 

The  Master  Builders  Association  of  Boston  has  issued  an  interesting 
chart  on  Modern  Industrial  Conditions  and  Tendencies,  prepared  by  Mr. 
F.  A.  Wilson,  Nahant,  Mass. 

The  Mechanics  and  Metals  National  Bank  of  New  York  has  prepared  a 
pamphlet  on  the  Shipping  Board  and  Our  Merchant  Marine  (New  York, 
pp.  35). 

The  Shepperson  Publishing.  Company,  Inc.,  has  issued  Cotton  Facts, 
edition  of  November,  1921  (New  York,  pp.  180).  This  contains  data  on 
crops,  receipts,  stocks,  exports,  imports,  prices,  consumption,  and  manu- 
facturing output. 

There  has  been  received  from  the  U.  S.  Grain  Growers,  Inc.,  a  pamphlet 
on  the  Grain  Marketing  Plan  of  the  Committee  of  Seventeen.  The  plan 
is  designed  to  stabilize  market  prices,  eliminate  speculation  and  manipula- 
tion and  furnish  credit  to  farmers  (59  East  Madison  St.,  Chicago,  pp.  56). 

The  Dominion  Bureau  of  Statistics  of  Canada  has  published  Dairy 
Factories  1920  (Ottawa,  1921,  pp.  65)  and  Fisheries  Statistics,  1920  (pp. 
128). 

Corporations 

The  Interstate  Commerce  Commission  has  prepared  a  new  edition  of  the 
Interstate  Commerce  Act  and  Related  Sections  of  Other  Acts,  revised  to 
August  1,  1921   (Washington,  pp.  298). 

Hearings  before  the  Senate  Committee  on  Interstate  Commerce  (67 
Cong.,  1  Sess.)  upon  matters  relating  to  Revenues  and  Expenses  of  Rail- 
roads have  appeared  in  three  volumes.  Vol.  I  contains  the  hearings  from 
May  10  to  June  1,  1921;  vol.  II,  from  June  2  to  July  1;  and  vol.  Ill, 
October  13  and  15,  and  November  25  to  December  3  (Washington,  pp. 
1596).     Vol.  Ill  contains  charts,  prepared  by  Mr.  Frank  J.  Warne. 


198  Documents  and  Notes  [March 

The  National  Association  of  Owners  of  Railroad  Securities  has  printed 
in  a  separate  pamphlet  the  statement  of  the  Hon.  Edgar  E.  Clark  before 
the  Committee,  (Nov.  19,  1921;  Baltimore,  pp.  29);  also  the  statement  of 
S.  Davies  Warfield  before  the  Committee  (Dec.  17,  1921,  pp.  13). 

The  Thirty-fifth  Annual  Report  of  the  Interstate  Commerce  Commission 
was  published  under  date  of  December  1,  1921   (Washington,  pp.  226). 

The  Corporate  Securities  Act  of  California,  providing  for  the  regulation 
and  supervision  of  companies,  brokers  and  agents,  and  sales  of  securities, 
has  been  reprinted  as  a  separate  by  the  State  Corporation  Department 
(Sacramento,  Calif.,  pp.  16). 

The  Department  of  Transportation  and  Communication,  Chamber  of 
Commerce  of  the  United  States,  has  printed  The  Railroad  Question  before 
Congress  as  Viewed  from  Various  Standpoints :  .11,  Testimony  of  Railroad 
Security  Owners  (Washington,  pp.  32). 

The  eighteenth  issue  of  Raihvay  Statistics  of  the  United  States  of  America 
for  1920,  and  Recent  Statistics  for  Foreign  Railways,  has  been  prepared 
by  the  Bureau  of  Railway  News  and  Statistics  under  the  direction  of  Slason 
Thompson  (Chicago,  pp.  147). 

The  following  state  reports  have  been  received: 

Atmual  Report  of  the  Department  of  Public  Utilities  of  Massachusetts 
for  year  ending  Nov.  SO,  1920,  two  vols.  (pp.  430,  550). 

Reports  of  the  Board  of  Public  Utility  Commissioners  of  the  State  of 
New  Jersey,  vol.  VIII,  March  16,  1920  to  December  21,  1920  (Trenton, 
1921,  pp.  630). 

Eleventh  Annual  Report  of  the  Board  of  Public  Utility  Commissioners  of 
New  Jersey,  for  1920  (Trenton,  1921,  pp.  121). 

Ninth  Annual  Report  of  the  Public  Utilities  Commission  of  Rhode  Island, 
for  1920  (Providence,  1921,  pp.  120). 

Labor 

The  United  States  Department  of  Labor  has  issued  in  the  series  of 
bulletins  of  the  Bureau  of  Labor  Statistics: 

No.   286,   Union  Scale  of  Wages  and  Hours  of  Labor,  May  15,  1920  (Wash- 
ington, 1921,  pp.  280). 
No.   288,   Wages  and  Hours  of  Labor  in  Cotton-Goods  Manufacturing,  1920 

(Sept.,  1921,  pp.  125). 
No.   289,   Wages  and  Hours  of  Labor  in  Woolen  and  Worsted  Goods  Manu- 
facturing, 1920  (Sept.,  1921,  pp.  87). 
No.   299,  Pemonnel    Research    Agencies,    a    Guide    to    Organized   Research 
in  Employment  Management,  Industrial  Relations  Training,  and 
Working  Conditions,  by  J.  D.  Thompson  (Nov.,  1921,  pp.  207). 
The  Women's  Bureau  of  the  federal  Department  of  Labor  has  issued: 
No.    16,  State  Laws  Affecting  Working  Women,  1921   (pp.  49)  with  charts 
and  exhibits  of  miniinura  wage  legislation  and  maps  of  the  United 
States    illustrating   legal    working    hours    for    women,    night    work 
laws  for  women,  minimum  wage  laws,  and  mothers'  pension  laws. 


1922]  Money,  Prices,  Credit,  and  Banking  199 

No.   18,  Health  Problems  of  Women  in  Industry  (1921,  pp.  9). 
No.    19,  lozca  Women  in  Industry  (1922,  pp.  73). 

The  following  state  reports  dealing  with  labor  have  been  received: 

Fourth  Biennial  Report  of  the  Bureau  of  Labor  and  Statistics  of  Ark- 
ansas, 1919-1920  (Little  Rock,  1921,  pp.  138). 

Fourth  Report  of  the  Industrial  Commission  of  Colorado,  for  1920 
(Denver,  pp.  126). 

Twenty-ninth  Report  of  the  Bureau  of  Labor  Statistics  of  Connecticut 
for  the  two  Years  ending  November  30,  1920  (Hartford,  1921,  pp.  86). 

Thirty-fifth  Annual  Report  of  the  Bureau  of  Labor  and  Industry  of 
Kansas,  1920   (Topeka,  1921,  pp.  67). 

Twenty-ninth  Annual  Report  of  the  Maryland  State  Board  of  Labor  and 
Statistics,  1920  (Baltimore,  1921,  pp.  429). 

Twenty-fourth  Annual  Report  of  the  Bureau  of  Labor  and  Industrial 
Statistics  of  Virginia,  1921  (Richmond,  pp.  139). 

Third  Biennial  Report  of  the  Commissioner  of  Labor  of  Nevada,  1919- 
1920  (Carson  City,  1921,  pp.  122). 

Labour  Legislation  in  Canada  as  Existing  December  31,  1920  (Ottawa, 
Dept.  of  Labour,  1921,  pp.  844). 

General  Report  of  the  Minister  of  Public  Works  and  Labour  of  the 
Province  of  Quebec  (Quebec,  1921,  pp.  173). 

The  Library  of  the  United  States  Department  of  Labor  has  prepared 
a  Supplementary  List  of  References  of  the  Kansas  Court  of  Industrial 
Relations  (pp.  5). 

The  Metropolitan  Life  Insurance  Company  has  prepared  a  number  of 
neostyled  pamphlets  on:  The  Training  of  Foremen;  Factory  Floor  Space 
and  Storage  Facilities  in  the  United  States  and  Canada;  Industrial  Lighting 
Lay  Outs;  Foundry  Practices  to  Increase  Safety;  Employees'  Incentive  or 
Bonus  Plans;  Employees'  Thrift  and  Savings  Plans;  Use  of  Psychological 
Tests  in  the  Selection  of  Office  Employees;  Rating  of  Foremen;  Absen- 
teeism and  Tardiness;  Company  and  Cooperative  Stores;  Cost  of  Living  in 
New  York  City;  A  "Shut  Dozen"  Vacation  Plan;  Conducting  a  Safety 
Campaign;  Fire  Drills;  Experience  zcith  the  Five  Day  Week  based  upon  a 
Questionaire  sent  to  Forty  Manufacturing  Concerns. 

Money,  Prices,  Credit,  and  Banking 

The  third  edition  of  the  pamphlet  on  Commercial  Banking  Practice  under 
the  Federal  Reserve  Act  has  been  published  by  the  National  Bank  of  Com- 
merce, New  York,  revised  to  October,  1921   (pp.  178). 

The  statement  of  Mr.  H.  N.  Lawrie,  of  the  American  Mining  Congress, 
before  the  House  Committee  on  Banking  and  Currenc}^  on  bill  H.  R.  8404, 
To  Investigate  the  Foreign  Exchange  Problem  for  the  Purpose  of  Deter- 
mining the  Means  that  may  best  be  Employed  for  the  Stabilizing  of  Ex- 
change, in  a  hearing  held  October  8,  1921,  has  been  printed  (pp.  51). 

Hearings  before  the  Subcommittee  of  the  House  Committee  on  Banking 
and  Currency  on  Rural  Credit  and  Multiple  Insurance  contains  the  state- 


200  Documents  and  Notes  [March 

ments  of  Mr.  R.  C.  Milliken,  of  the  National  Society  of  Record  Associations, 
and  Mr.  W.  J.  Spillman,  editor  of  the  Far7n  Journal  (Washington,  1921, 
pp.  66). 

The  Fourth  Annual  Report  of  the  War  Finance  Corporation,  for  the 
Year  ending  November  30,  1921,  gives  a  summary  of  recent  work  of  the 
corporation  with  a  reprint  of  the  act  and  amendments. 

The  Stable  Money  League  in  December,  1921,  issued  the  first  leaflet  of  a 
series  which  it  hopes  to  continue  (New  York,  2  Rector  Street). 

A  letter  from  the  Postmaster  General,  published  as  H.  D.  133  (167  Cong., 
2  Sess.)  on  the  Operation  of  the  Postal  Savings  System  gives  the  latest 
statistics  in  regard  to  postal  savings  funds. 

A  reprint  has  been  published  by  the  American  Institute  of  Mining  and 
Metallurgical  Engineers  (29  West  39th  Street,  New  York  City)  of  an 
article  by  Cornelius  F.  Kelly,  president  of  the  Anaconda  Copper  Mining 
Company,  entitled  The  Position  of  Silver  under  the  Pittman  Act. 

The  following  banking  reports  and  documents  have  been  received: 

The  Bank  Act  of  the  State  of  California  as  Amended  1921  (Sacramento, 
State   Banking   Dept.,  pp.    187). 

Second  Annual  Report  of  the  State  Bank  Commissioner  of  Delaware, 
1920  (Dover,  pp.  79). 

Tiventy-second  Annual  Report  of  the  Kansas  Building  and  Loan  Asso- 
ciations for  1920  (Topeka,  Kansas  Bank  Commissioner,  1921,  pp.   106). 

Annual  Report  of  the  Commissioner  of  Banks  of  Massachusetts  for  the 
Year  ending  October  30,  1920.  Part  I,  Relating  to  Savings  Banks,  Insti- 
tutions for  Savings,  Trust  Companies  and  Foreign  Banking  Corporations, 
Pub.  Doc.  8  (Boston,  Dept.  of  Banking  and  Insurance,  1921,  pp.  Ixiv,  702). 

A  series  of  pamphlets  published  by  the  Commissioner  of  Banks  of  Massa- 
chusetts, containing  the  statutes  of  the  Commonwealth  of  Massachusetts 
corrected  to  June  1,  1921,  relating  to  Deposits  with  Others  than  Banks 
(Boston,  Office  of  the  Commissioner  of  Banks,  pp.  34) ;  Credit  Unions 
(pp.  37)  ;  Cooperative  Banks  (pp.  47)  ;  Trust  Companies  (pp.  48)  ;  Savings 
Banks  and  Institutions  for  Savings  (pp.  56). 

Thirteenth  Biennial  Report  of  the  State  Bank  Commissioner  of  Missouri 
(Jefferson  City,  1921,  pp.  li,  540). 

Annual  Report  of  the  Board  of  Bank  Commissioners  of  New  Hampshire 
for  the  Year  ending  August  31,  1920  (Concord,  1920,  pp.  434). 

Annual  Rejiort  of  the  Comviissioner  of  Banking  and  Insurance,  New 
Jersey,  Relative  to  Savings  Banks,  Trust  Companies  and  State  Batiks  of 
Discount  and  Deposit,  1920  (Trenton,  1921,  pp.  xii,  41). 

Public  Finance 

A  revised  and  corrected  compilation  of  hearings  on  Internal-Revenue 
Revision  before  the  House  Committee  on  AVays  and  Means,  together  with 
certain  portions  of  the  proceedings  of  the  Committee  in  executive  session 
held  in  July,  1921,  has  been  published  (Washington,  pp.  475). 

The  Senate  Committee  on  Finance  has  printed  the  Supplemental  Briefs 


1922]  Public  Finance  201 

-which  were  submitted  at  the  first  session  of  the  Sixty-seventh  Congress  on 
the  proposed  Revenue  act  of  1921  (Washington,  pp.  46). 

A  Resume  of  the  Laws  under  which  Loans  were  made  to  Foreign  Govern- 
ments during  and  since  the  War  has  been  published  as  H.  D.  86  (67  Cong., 
2  Sess.)  under  date  of  December  6,  1921   (Washington,  pp.  388). 

The  Equitable  Trust  Company  of  New  York  has  published  the  complete 
text  of  the  Revenue  Act  of  1921  (New  York,  pp.  243). 

The  American  Producers  of  Cuban  Sugar  has  issued  several  circulars 
relating  to  the  taxation  of  sugar  (New  York,  123  Front  Street). 

The  International  Chamber  of  Commerce  (33  Rue  Jean  Goujon,  Paris) 
has  published  several  pamphlets  relating  to  international  finance,  as  follows: 
Digest  No.  1,  Fixing  Germany's  War  Debt;  No.  2,  The  Payment  of  the 
German  Indemnity,  The  Wiesbaden  Agreement;  No.  4,  European  Problems 
from  an  American  Standpoint. 

The  following  state  documents  relating  to  taxes  have  been  received: 

Information  Relative  to  the  Assessment  and  Collection  of  Taxes  in  Con- 
necticut, 1921  (Hartford,  Tax  Commission,  pp.  22). 

Assessors'  Manual,  Including  Assessment  Laws  with  Questions  and 
Answers  Relating  Thereto,  issued  by  the  Minnesota  Tax  Commission  (St. 
Paul,  1921,  pp.  115). 

Third  Biennial  Report  of  the  State  Tax  Commission  of  New  Mexico, 
1918-1920  (Santa  Fe,  1921,  pp.  162). 

Thirty-first  Annual  Report  of  the  New  York  Tax  Reform  Association, 
1921,  briefly  summarizing  recent  tax  legislation  and  discussing  the  taxation 
<of  banks  and  moneyed  capital  and  also  some  of  the  defects  of  the  income  tax. 


NOTES  ! 

\ 

The  following  names  have  been  added  to  the  membership  of  the  American        '■■ 

Economic  Association  since  the  first  of  August:  I 

Adams,  J.  P.,  Brown  University,  Providence,  R.  I.  '| 

Armstrong,  G.  S.,  60  Marteuse  St.,  Brooklyn,  N.  Y.  j 

Baird,  R.  A.,  Northwestern  Bell  Telephone  Co.,  Omaha,  Neb.  | 

Baker,  F.  S.,  1313  S.  Wichita  St.,  Wichita,  Kans.  I 

Bean,  D.  P.,  5750  Ellis  Avenue,  Chicago,  111.  "  : 

Beckman,  T.  M.,  Ohio  State  University,  Columbus,  O. 

Bennett,  W.  W.,  Graduate  College,  Princeton,  N.  J.  , 

Benton,  A.  H.,  Manitoba  Agricultural  College,  Winnipeg,  Manitoba,  Can.  ' 

Berman,  E.,  University  of  Illinois,  Urbana,  111.  ; 

Bloor,  W.  F.,  Goodyear  Tire  &  Rubber  Co.,  Akron,  O. 

Boyce,  W.  S.,  Rolla,  Mo. 

Breyer,  R.  F.,  University  of  Pennsylvania,  Philadelphia,  Pa. 

Buck,  R.  M.,  629  N.  Waller  Ave.,  Chicago,  111. 

Burton,  E.  R.,  Brown  University,  Providence,  R.  I.  J 

Cahon,  P.  D.,  219  East  Liberty  St.,  Ann  Arbor,  Mich.  t 

Chamberlin,  E.  H.,  532  Thompson  St.,  Ann  Arbor,  Mich.  !lj 

Clark,  L.  E.,  Ohio  State  University,  Columbus,  O.  J 

Cooper,  L.  W.,  Lake  Forest  College,  Lake  Forest,  111.  1 

Copeland,  M.  A.,  230  Linden  Ave.,  Ithaca,  N.  Y.  ^ 

Cover,  J.  H.,  435  West  119th  St.,  New  York  City. 

Crockatt,  P.  C,  University  of  Oregon,  Eugene,  Oregon. 

Crum,  W.  L.,  38  Yale  Station,  New  Haven,  Conn. 

Derry,  G.  H.,  206  Rosa  Road,  Schenectady,  N.  Y. 

Eliot,  W.  G.,  3d,  25  Divinitv  Hall,  Cambridge,  Mass. 

Evans,  G.  E.,  197  Watson  Blvd.,  Pittsburgh,  Pa. 

Feis,  H.,  University  of  Kansas,  Lawrence,  Kans. 

Finlay,  S.  W.,  548  Orange  St.,  New  Haven,  Conn. 

Forster,  G.  W.,  3436  Mt.  Pleasant  St.,  N.  W.,  Washington,  D.  C. 

Foth,  H.  J.,  416  Davis  St.,  Kalamazoo,  Mich.  |! 

French,  C.  E.,  Johns  Hopkins  University,  Homewood,  Baltimore,  Md.  ..  I 

Hara,  K.,  Gotenvama,  Shinagawa,  Tokyo,  Japan.  j 

HauflF,  E.  G.,  2530  N.  Eighth  St.,  Philadelpliia,  Pa. 

Hauslein,  J.,  Yale  Station,  New  Haven,  Conn. 

Heiner,  M.  K.,  University  of  Chicago,  Chicago,  111.  | 

Hermann,  C.  C.,  504  East  John  St.,  Champaign,  111.  ,  | 

Hijakata,  S.,  Ichibancho,  Kojimachi-ku,  Tokvo,  Japan.  | 

Holtzclaw,  H.  F.,  A.  &  M.  College,  Stillwater,  Okla. 

Hoyt,  H.,  Chapel  Hill,  N.  C.  ; 

Hsiao,  C,  110  Hitt  St.,  Columbia,  Mo.  j 

Hudson,  W.  M.,  613  E.  Anderson  St.,  Greencastle,  Ind.  | 

Hunt,  B.  C,  Dalhouise  University,  Halifax,  N.  S.  H 

Jepson,  L.  M.,  3131  Broadway,  New  York  City.  ( 

Jones,  M.,  University  of  Pittsburgh,  Pittsburgh,  Pa.  ) 

Jordan,  F.  F.,  84  East  Randolpli  St.,  Chicago,  III.  |j 

Kawashima,  K.,  323  West  108th  St.,  New  York  City.  'I 

Lavadia,  P.  C,  Pagsanjan,  Laguna,  P.  I. 

Ivcvin,  S.  M.,  4423  Brush  St.,  Detroit,  Mich. 

Long,  T.  G.,  811  Edison  Ave.,  Detroit,  Mich. 

Lucas,  A.  F.,  Box  311,  Princetown,  N.  J.  ■, 

Malinskv,  W.,  11  Harvard  St.,  Maiden,  Mass.  i 

Mayer,  J.,  10  East  39th  St.,  New  York  City.  ' 

Meyers,  R.  A.,  1017  Farmington  Ave.,  West  Hartford,  Conn. 

Mitchell,  B.,  Johns  Hopkins  Universitv,  Baltimore,  Md. 

Mussey,  H.  R.,  2021  Klingle  Road,  Wasliington,  D.  C. 

NuflFort,  W.,  900  South  Ifith  St.,  Newark,  N.  J. 

Rams])erger,  II.  G.,  400  Allaire  Ave.,  I-eonia,  N.  J. 

Ricliter,  F.  E.,  81  Twenty-eighth  St.,  Elmhurst,  L.  I.,  N.  Y. 

Robb,  T.  B.,  Universitv  of  Missouri,  Cohunbia,  Mo. 

Russell,  C.  J.,  1000  Chestnut  St.,  Philadelphia,  Pa. 

Sidlo,  T.  L.,  1307  Union  National  Bank  Bldg.,  Cleveland,  O. 


1922]  Xotes  20S 

Smith,  R.  R.,  The  Macmillan  Company,  66  Fifth  Avenue,  New  York  City. 

Southworth,  S.  D.,  146  Graduate  College,  Princeton,  X.  J. 

Staples,  F.  S.,  192  Knapp  St.,  Milwaukee,  Wis. 

Stewart,  B.  M.,  112  Argjie  Road,  Ottawa,  Ontario,  Can. 

Stimson,  E.  S.,  Ohio  State  University,  Columbus,  O. 

Taylor,  O.  F.,  15  Canonburv  Road,  Jamaica,  L.  I.,  N.  Y. 

Tead,  O.,  3T0  Fifth  Ave.,  McGraw-Hill  Co.,  New  York  City. 

Thomas,  R.,  State  Teachers  College,  Springfield,  Mo. 

Todd,  A.  J.,  415  S.  Franklin  St.,  Chicago,  111. 

Uriburn,  E.,  Corrientes  .34-3,  Buenos  Aires,  Argentina. 

Vickers,  L.,  10  East  39th  Street,  Nev,-  York  Citv. 

Walters,  R.  G.,  Grove  City  College,  Grove  City,' Fa. 

Wanlass,  W.  L.,  Agricultural  College,  Logan,  Utah. 

Whitney,  E.  L.,  College  of  William  and  Mary,  Williamsburg,  Va. 

Wickware,  F.  G.,  D.  Appleton  &  Co.,  New  York  City. 

Young,  E.  J.,  Madison,  Wis. 

A  new  Handbook  of  the  American  Economic  Association  will  be  published 
in  1922,  possibly  as  a  supplement  to  the  June  Reviexc.  The  Secretary 
asks  that  all  changes  of  address  be  reported  to  him  promptly,  in  order  that 
the  list  of  members  may  be  as  complete  and  accurate  as  possible. 

At  the  annual  meeting  of  the  American  Economic  Association,  the  execu- 
tive committee  voted  that  the  Articles  of  Organization  of  the  University 
Center  for  Research  in  Washington  be  printed  in  the  American  Economic 
Review.     The  articles  read  as  follows: 

The  undersigned  hereby  associate  themselves  for  the  establishment  and 
conduct  of  an  organization  to  be  known  as  the  University  Center  for  Re- 
search in  Washington. 

The  purpose  of  the  University  Center  for  Research  in  Washington  shall 
be  to  promote  and  facilitate  research  in  archives,  libraries  and  other  col- 
lections located  in  the  District  of  Columbia,  on  the  part  of  students  in  the 
graduate  departments  of  American  and  foreign  universities  and  of  others. 

The  control  of  the  University  Center  shall  be  in  the  Board  of  Research 
Advisers. 

The  Board  of  Research  Advisers  shall  in  the  first  instance  consist  of  the 
signatories  of  this  association.  It  shall  hereafter  consist  of  at  least  fifteen 
residents  of  the  District  of  Columbia,  and  shall  have  power  to  add  to  its 
numbers,  to  fill  vacancies  in  its  membership,  and  to  name  Associate  Research 
Advisers  to  assist  in  the  performance  of  its  functions. 

The  Board  of  Research  Advisers  shall  meet  at  least  once  a  year  in  the 
District  of  Columbia.  It  shall  choose  annually  a  presiding  ofiicer  who  shall 
be  known  as  President. 

The  Board  of  Research  Advisers  shall  be  organized  in  a  Committee  of 
Management,  and  Technical  Divisions,  of  which  the  following  are  now 
established:  Division  of  History.  Division  of  Political  Science.  Division 
of  International  Law  and  Diplomacy.  Division  of  Economics.  Division  of 
Statistics. 

The  Committee  of  Management  shall  include  representatives  of  the  Na- 
tional Research  Council  and  of  the  American  Council  of  Learned  Societies 
and  at  least  three  members  appointed  by  the  American  Council  on  Education 
and  shall  constitute  a  committee  of  the  latter  body.  It  shall  choose  its  own 
chairman. 


204  Notes  [March 

Each  technical  division  shall  be  presided  over  by  a  chairman  who  shall  be 
chosen  annually  by  the  members  of  the  Division. 

The  functions  of  the  Committee  of  Management  shall  be  to  correspond 
with  university  authorities  respecting  students  who  come  to  Washington  to 
work  under  the  auspices  of  the  University  Center,  to  formulate  the  regula- 
tions under  which  students  may  be  admitted  to  work  under  such  auspices,  to 
register  such  students,  to  assign  them  to  the  appropriate  technical  divisions, 
and  to  furnish  to  the  university  authorities  such  reports  on  their  work  as 
may  be  required. 

The  functions  of  the  technical  divisions  shall  be  to  advise  such  students 
as  may  be  assigned  to  them,  to  facilitate  their  access  to  the  material  which 
the  nature  of  their  work  may  require,  and  to  furnish  reports  on  their  work 
to  the  Committee  of  Management.  The  technical  divisions  shall  also  facil- 
itate the  researches  of  other  investigators. 

The  Board  shall  prepare  an  annual  report  which  shall  be  presented  to 
the  American  Council  on  Education,  the  National  Research  Council,  the 
American  Council  of  Learned  Societies,  and  to  such  organizations  and  insti- 
tutions as  may  be  determined. 

The  foregoing  articles  may  be  amended  from  time  to  time  by  a  majority 
vote  of  the  full  Board. 

(Signed)  L.  S.  Rowe,  James  Brown  Scott, 
Francis  Walker,  Julius  Klein,  Winthrop  M.  Daniels,  Herbert  Put- 
nam, Joseph  A.  Hill,  H.  Barrett  Learned,  Paul  S.  Reinsch,  Balthasar 
H.  Meyer,  Gaillard  Hunt,  Chas.  Cheney  Hyde,  Waldo  G.  Leland, 
S.  P.  Capen,  W.  F.  Willoughby,  Charles  Moore,  Richard  A.  Rice,  J.  F. 
Jameson,  George  F.  Zook. 

The  Food  Research  Institute  offers  for  1922-1923  four  fellowships  with 
stipends  of  $600  to  $1200.  The  holders  are  to  devote  at  least  half  time 
to  research  under  direction  of  the  Institute,  and  the  balance  to  work  in 
related  departments  of  Stanford  University.  Applications  are  due  by  May 
1.  Full  information  is  obtainable  from  the  Institute,  Stanford  Univer- 
sity, California. 

Students  of  the  classical  political  economy  will  rejoice  to  learn  that 
the  long  missing  and  much  desired  manuscript  of  David  Ricardo's  "Notes 
on  Malthus"  has  been  recovered,  and  that  through  the  fine  courtesy  of 
Frank  Ricardo,  Esq.,  of  Bure  Homage,  Christchurch — a  great-grandson 
of  the  economist — tliis  work  is  about  to  be  made  accessible  in  convenient 
reprint.  Written  in  the  autumn  of  1820  as  a  commentary  upon  Malthus' 
Principles  of  Political  Economy,  the  "Notes"  were  designed  by  Ricardo  as 
an  appendix  to  the  third  edition  of  his  own  Principles,  then  preparing. 
The  counsel  of  James  Hill  that  Ricardo  should  avoid  giving  his  treatise 
too  controversial  a  character,  however,  prevailed:  the  manuscript,  after 
having  been  read  by  Mill,  Malthus,  INIcCulloch,  and  Trower,  was  withheld 
from  publication,  and  the  commentary — tantalizing  references  to  which  are 
present  in  Ricardo's  correspondence  and  in  McCulloch's  prefatory  memoir 
to  the  Works — lias  remained  an  important  desideratum  in  the  study  of  the 
Ricardian    economics.      The    "Notes"    consist    of   412    folios,    estimated   by 


1922]  Notes  205 

Ricardo  as  likely  to  "occupy  about  150  pages  if  printed."  The  whole  wQl 
be  issued  with  convenient  student  apparatus  during  the  coming  year  by  the 
Johns  Hopkins  Press,  under  the  editorial  care  of  Professor  J.  H.  Hollander, 
of  the  Johns  Hopkins  University,  and  T.  E.  Gregory,  D.  Sc,  of  the  London 
School  of  Economics. 

At  the  annual  meeting  of  the  American  Statistical  Association,  held 
December  29,  1921,  W.  S.  Rossiter  was  elected  president,  and  L.  I.  Dublin, 
E.  W.  Kemmerer,  and  M.  C.  Rorty,  vice  presidents. 

The  Official  Report  of  the  eighth  National  Foreign  Trade  Convention, 
held  at  Cleveland,  May  4-7,  1921,  contains  addresses  relating  to  foreign 
trade  education  by  J.  A.  de  Haas  and  W.  S.  Tower  (pp.  47-68 ;  O.  K. 
Davis,  Secretary,  National  Foreign  Trade  Council,  New  York  City). 

At  the  fifteenth  annual  meeting  of  the  American  Association  for  Labor 
Legislation,  T.  L.  Chadbourne  was  elected  president. 

The  Economic  Journal  for  December  notes  that  the  Laveleye  prize  for 
1921  has  been  awarded  to  Dr.  Alfred  Marshall.  This  is  a  quinquennial 
prize  "bestowed  on  some  distinguished  publicist  for  having  made  important 
progress  in  political  economy  and  social  science." 

The  Hart  Schaffner  &  Marx  prizes  for  1921  have  been  awarded  as 
follows : 

Class  A,  first  prize  $1000  to  Miss  Hazel  Kyrk  for  a  study  entitled  "A 
theory  of  consumption" ;  second  prize  $500  to  Charles  S.  Morgan  for  a 
study  entitled  "The  regulation  and  management  of  public  utilities";  honor- 
able mention  to  Miss  Mollie  Ray  Carroll  for  a  study  entitled  "The  attitude 
of  the  American  Federation  of  Labor  toward  legislation  and  politics." 

Class  B,  first  prize  $300  to  Paul  T.  Nutting,  Oberlin  College,  for  a 
study  on  "Public  problems  of  bituminous  coal" ;  second  prize  $200  to 
William  J.  Schultz,  Columbia  University,  for  a  study  on  "Six  years  of 
inflation,  1914-1920";  honorable  mention  to  Harry  Nadell,  Harvard  Univer- 
sity, for  a  study  on  "Conditions  of  employment  in  the  United  States  Postal 
Service." 

The  November  issue  of  the  Journal  of  Political  Economy  contains 
several  articles  on  business  training,  as  follows:  "Corporation  training 
schools  for  college  men,"  by  W.  A.  Rawles;  "Coordination  of  instruction  in 
collegiate  schools  of  business  with  corporation  training  courses,"  by  J.  T. 
Madden,  R.  C.  McCrea,  and  W.  R.  Gray;  and  "The  corporation  school  and 
its  place  in  a  scheme  of  business  education,"  by  L.  S.  Lyon. 

The  American  Council  on  Education  announces  the  appointment  of  a  com- 
mission to  conduct  an  investigation  of  educational  finance  in  the  United 
States.  Dr.  George  D.  Strayer,  of  Columbia  University,  has  been  selected 
as  chairman  of  the  commission  and  director  of  the  work  of  its  inquiry. 
The  other  members  of  the  comission  are  as  follows:  Samuel  P.  Capen, 
Ellwood  P.  Cubberley,  Edward  C.  Elliott,  Thomas  E.  Finegan,  Robert  M. 
Haig,  Victor  Morawetz,  and  Henry  C.  Morrison. 

The  September  number  of  The  Economic  Journal  contains  a  description 
of  the  economic  curricula  at  Oxford  and  Cambridge  (pp.  400-406). 


206  Notes  [March 

Bulletin  no.  43,  1921,  of  the  federal  Bureau  of  Education  is  entitled 
"Business  Training  and  Commercial  Education,"  by  Glen  L.  Swiggett 
(pp.  17). 

The  American  Library  Association  has  prepared  a  brief  list  of  books  on 
Thrift  (78  East  Washington  St.,  Chicago). 

The  Department  of  Agriculture  has  begun  a  new  weekly  publication 
entitled  Weather,  Crops  and  Markets.  This  supersedes  the  three  bulletins 
previously  published.  Weather  Reporter,  Monthly  Crop  Reporter,  and 
Market  Reporter. 

The  American  Express  Company,  Travel  Department,  announces  a  for- 
eign trade  tour  to  Europe,  June  8  to  August  12,  in  charge  of  J.  Anton 
de  Haas,  of  New  York  University,  and  Harry  R.  Tosdal,  of  the  Graduate 
School  of  Business  Administration,  Harvard  University. 

Indiana  University  will  shortly  begin  work  on  the  construction  of  a 
$250,000  building  for  the  School  of  Commerce  and  Finance. 

Appointments   and  Resignations 

Mr.  Edmund  Brown,  Jr.,  formerly  an  examiner  in  the  Economic  Division 
of  the  Federal  Trade  Commission,  now  has  charge  of  the  School  of  Business 
Administration  at  the  University  of  Richmond. 

Dr.  Alexander  E.  Cance,  head  of  the  department  of  agricultural  economics 
at  the  Massachusetts  Agricultural  College,  is  on  leave  of  absence  in  order 
to  organize  the  research  work  of  the  federal  Bureau  of  Markets.  His 
efforts  will  be  confined  chiefly  to  the  great  body  of  valuable  material  which 
has  already  been  collected  by  agents  of  that  bureau  and  which  has  not  yet 
been  published  or  made  available  in  any  form  for  general  use.  Dr.  Cance 
also  served  as  a  member  of  President  Harding's  Conference  on  Agriculture, 
which  convened  on  January  23. 

Miss  Irene  Sylvester  Chubb  is  now  the  Washington  representative  of  the 
American  Association  for  Labor  Legislation. 

Dr.  John  L.  Coulter  assumed  the  position  of  president  of  the  North 
Dakota  Agricultural  College  at  the  beginning  of  the  college  year. 

Mr.  Clyde  J.  Crobaugh  has  been  appointed  assistant  professor  of  econo- 
mics at  Indiana  University. 

Professor  Ira  B.  Cross,  of  the  University  of  California,  is  away  on 
sabbatical  leave  this  year,  preparing  certain  manuscripts  for  publication. 

Mr.  William  S.  Culbertson  has  been  designated  by  President  Harding 
as  vice-chairman  of  the  United  States  Tariff  Commission  for  the  year  begin- 
ning January  15,  1922.  Mr.  Culbertson  has  been  a  member  of  the  Commis- 
sion since  its  organization  in  1916. 

Professor  F.  A.  Fetter  will  teach  next  summer  at  Northwestern  Univer- 
sity, giving  graduate  courses  on  the  history  of  economic  thought  and  on 
problems  of  distribution. 

Mr.  Harold  H.  Keefe,  of  the  loss  department  of  Chubb  &  Son,  has  been 


1922]  Notes  207 

appointed  lecturer  in  marine  losses  in  the  Wall  Street  Division  of  New 
York  University. 

Professor  E.  W.  Kemmerer,  of  Princeton  University,  sailed  for  Rio  de 
Janeiro  February  2.  He  will  proceed  from  Brazil  to  Argentina,  and 
during  the  summer  will  visit  in  turn  all  the  countries  on  the  west  coast 
of  South  America,  making  a  special  study  of  questions  of  currency  and 
banking. 

Professor  William  Leslie,  of  the  University  of  California,  has  for  the 
past  month  been  in  Washington,  D.  C,  as  a  member  of  a  special  committee 
appointed  by  the  United  States  Shipping  Board  to  investigate  marine 
insurance. 

Mr.  Samuel  McClintock  has  joined  the  Bureau  of  Foreign  and  Domestic 
Commerce  of  the  federal  Department  of  Commerce.  The  reorganization 
and  expansion  of  the  Bureau  under  the  direction  of  Mr.  Hoover  and  Dr. 
Klein  offer  scope  for  the  publishing  of  material  of  the  Bureau  through 
Commerce  Reports,  handbooks  and  special  treatises,  not  heretofore  available. 

Dr.  Robert  J.  McFall  is  giving  the  courses  of  Professor  Cance  at  Massa- 
chusetts Agricultural  College  during  the  absence  of  the  latter. 

Professor  John  T.  Madden,  formerly  head  of  the  department  of  account- 
ing, has  been  appointed  assistant  dean  in  the  School  of  Commerce  Accounts 
and  Finance,  New  York  University. 

Mr.  Thomas  O.  Marvin  has  been  designated  by  President  Harding  to  be 
chairman  of  the  United  States  Tariff  Commission  for  the  year  beginning 
January  15,  1922.  Mr.  Marvin  has  been  a  member  of  the  Commission 
since  March,  1921. 

Mr.  Mark  C.  Mills  has  been  appointed  an  instructor  in  economics  at 
Indiana  University. 

Mr.  Robert  Hargrove  Montgomery  has  been  appointed  instructor  in 
economics  at  the  University  of  Kansas. 

Professor  Emery  E.  Olson,  assistant  director  of  the  College  of  Com- 
merce and  Business  Administration  of  the  University  of  Southern  Cali- 
fornia, has  been  granted  a  leave  of  absence  for  the  second  semester,  for  the 
purpose  of  pursuing  advanced  graduate  studies  at  the  University  of  Wis- 
consin. 

Dr.  Thomas  Walker  Page,  whose  term  as  chairman  of  the  United  States 
Tariff  Commission  expired  last  January,  has  been  succeeded  by  Mr.  Thomas 
O.  Marvin.  Dr.  Page  for  the  present  will  continue  his  connection  with  the 
Commission. 

Mr.  Gordon  C.  Poole,  credit  manager  of  the  E.  I.  du  Pont  de  Nemours 
Export  Company,  has  been  appointed  special  lecturer  in  foreign  financing 
in  the  Wall  Street  Division  of  New  York  University. 

Dr.  Howard  H.  Preston,  associate  professor  of  business  administration, 
University  of  Washington,  has  been  granted  leave  of  absence  for  the  winter 
and  spring  quarters,  in  order  to  accept  a  temporary  appointment  as  lecturer 
in  economics  at  the  University  of  California,  during  the  absence  of  Professor 
Cross. 


208  Notes  [March 

Professor  Arthur  H.  Rosenkampff,  formerly  assistant  in  the  department 
of  accounting  at  New  York  University,  is  now  head  of  the  department. 

Mr.  William  A.  Russell  has  been  made  acting  instructor  in  money  and 
banking  at  the  University  of  Washington. 

Miss  Helen  G.  Sternau  is  a  recent  addition  to  the  staff  of  the  American 
Association  for  Labor  Legislation. 

Miss  Ruth  Ware,  of  the  University  of  California,  is  a  new  meinber  of  the 
research  staff  of  the  American  Association  for  Labor  Legislation. 

Mr.  Shelley  D.  Watts  has  been  appointed  assistant  professor  in  the  de- 
partment of  economics  and  sociology  at  Indiana  University. 

Dr.  John  H.  Williams  has  been  appointed  economist  of  the  Economic 
Policy  Commission  of  the  American  Bankers  Association.  Dr.  Williams 
will  retain  his  position  in  Harvard  University  as  assistant  professor  of 
economics. 


The 
American  Economic  Review 


.f 


VOL.  XII  JUNE,  1922  No.  2 

GUILD  SOCIALISM:  A  TWO  YEARS'  TEST 

The  time  has  come  when  the  recent  guild  projects  and  performances 
in  England  may  be  viewed  with  some  perspective.  Within  a  few  years 
a  term  belonging  to  the  town  economy  of  the  middle  ages  has  come 
into  current  use  to  indicate  a  projected  industrial  order.  The  move- 
ment for  national  guilds  has  produced  an  extensive  literature,  won 
the  serious  consideration  of  the  trade  unions  and  the  Labor  party, 
caught  the  attention  of  the  daily  press,  and  gained  recognition  from 
the  government  itself. 

The  persuasive  volumes  of  the  guild  writers  have  followed  one 
another  from  the  press  in  quick  succession,  but  they  give  little  account 
of  actual  accomplishments.  At  the  very  moment  when  the  first  build- 
ing guilds  were  taking  shape  in  England,  the  theoretical  guildsmen 
were  distracted  by  discussions  of  the  proper  guild  interpretation  of 
events  in  Russia.  The  trade  unionist  converts  were  captured  by  the 
vision  of  a  new  day  and  many  of  them  preferred  to  look  far  ahead 
to  its  dawning  rather  than  to  discuss  precise  administrative  arrange- 
ments. 

Nevertheless  a  new  cooperative  effort  in  production  has  been  on 
trial  for  the  last  two  years.  Its  impetus  came  in  part  from  outside 
the  circle  of  guild  writers.  New  currents  have  long  been  stirring  in 
the  trade  union  world.  From  the  vantage  point  of  a  freshly  entrenched 
position  labor  put  forth  new  claims  at  the  close  of  the  war.  Instead 
of  aiming  merely  for  the  right  of  collective  bargaining,  the  leaders 
boldly  declared  that  there  was  no  successful  course  for  labor  which 
did  not  include  a  share  in  the  management  of  industry.  The  majority 
of  the  labor  leaders  in  England  and  America  went  no  further.  In  both 
countries  temperament,  disposition,  and  the  tradition  of  political 
democracy  opposed  violent  and  revolutionary  methods.  The  programs 
of  the  miners,  the  railway  men,  and  the  postal  and  telegraph  clerks 
in  England  indicated  the  change. 

The  guildsmen  proposed  an  even  wider  departure  from  the  established 
order  and  advocated  placing  upon  the  workers  the  entire  responsibility 
for  production.  They  looked  forward  to  establishing  national  organ- 
izations of  workers  which  would  include  technical  and  administrative 
experts.      These  associations,  or  guilds,  were  to  be  distinguished  from 


210  Amy  Hewes  [June 

trade  unions  by  the  fact  that  their  chief  concern  was  not  the  safe- 
guarding of  the  standard  of  life  of  their  members,  but  the  entire 
control  and  management  of  industry. 

Practical  experimentation  was  begun  in  England  in  January,  1920, 
with  the  organization  of  a  building  guild  in  Manchester.  The  movement 
spread  rapidly  within  the  industry,  and  at  the  close  of  1921  more  than 
100  building  guild  committees  were  at  work,  guild  dwelling  houses  had 
been  completed  and  opened,  and  affiliated  industries  were  adopting  the 
guild  type  of  organization.  Furniture  guilds  followed  the  building 
guilds  in  Manchester  and  London;  packing-case,  vehicle  and  tailoring 
guilds  appeared ;  agricultural  and  horticultural  guilds  were  organized ; 
and  initial  steps  were  taken  in  the  engineering  trades  and  in  the  postal 
service. 

The  experience  of  the  two  years  has  given  to  much  of  the  prolonged 
earlier  discussions  merely  an  academic  interest.  The  projects  have 
been  on  a  relatively  small  scale  and  have  been  carried  on,  not  "in  con- 
junction with  the  state,"  as  the  early  writers  anticipated,  but  with 
unique  government  relationships.  The  experience  should  react  upon 
guild  theory  and  clarify  it.  Whether  guilds  prove  to  be  successes  or 
failures,  the  guild  policies  as  they  were  first  phrased  by  the  theoretical 
guildsmen  should  be  recast. 

The  first  part  of  the  present  paper  deals  with  the  development  of 
guild  theory  through  its  literature  and  its  propaganda  organization, 
the  National  Guilds  League.  The  second  part  contains  a  summary 
of  the  work  of  the  building  guilds,  which  have  now^  completed  the  first 
two  years  of  their  history. 

The  Development  of  Guild  Theory  from  1906  through  1921 

The  English  guild  movement  is  an  exception  to  the  rule  that  an  econ- 
omic experiment  is  usually  well  under  way  before  a  mass  of  theoretical 
literature  develops.  Eight  years  of  discussion  of  the  nature  and  function 
of  the  guild  state  preceded  the  organization  of  the  first  active  guild.' 
Volume  after  volume  by  self-styled  "guildsmen"  found  a  ready 
market.  The  voracity  of  the  reading  public  for  this  form  of  literature 
is  not  difficult  to  explain,  in  spite  of  the  fact  that  much  of  the  material 
shows  signs  of  hurried  work  and  that  the  later  volumes  contain  little 
which  is  new.  The  ofi*er  of  a  Utopia,  upon  this  planet  or  any  other, 
exercises  a  fascination  which  few  can  resist. 

'January,  1922.  The  other  guilds  noted  have  been  organized  for  only  a  few 
months. 

'Niles  H.  Carpenter,  "The  Literature  of  Guild  Socialism,"  Quarterly  Journal  of 
Economics,  August,  1920;  Helen  Reynard,  "The  Guild  Socialists,"  Economic  Journal, 
September,  1920. 


1922]  Guild  Socialism:  A  Two  Years"  Test  211 

The  rise  of  guild  theory  in  England  is  commonly  dated  from  1912, 
when  S.  G.  Hobson  contributed  to  the  New  Age,  edited  by  A.  R.  Orage, 
a  series  of  articles  which  have  since  appeared  in  the  volume  Xafional 
Guilds.^  Mr.  G.  D.  H.  Cole  attributes  the  earliest  manifestation  of 
the  guild  idea  to  Mr.  Arthur  J.  Penty/  Avho  published  a  work  on  The 
Restoration  of  the  Gild  System  in  1906,  in  which  modern  commer- 
cialism was  criticized  as  inferior  to  the  earlier  guild  methods  of  pro- 
duction. In  the  following  year  Mr.  A.  R.  Orage,  in  an  article  in  the  Con- 
temporary/ Review^  made  the  suggestion  that  guild  organization  was 
indispensable  for  the  future  of  industry.  ]Mr.  Orage  was  at  that  time 
an  active  member  of  the  Fabian  Society,'  which  was  advocating  the 
form  of  organization  which  Mr.  Penty  derisively  calls  "state  commer- 
cialism," and  he  seems  not  to  have  pushed  the  guild  idea  further  until 
he  undertook  the  publication  of  ^Ir.  Hobson's  articles  in  1912. 

Penty's  volume  on  The  Restoration  of  the  Gild  System  is  an  exposi- 
tion of  the  defects  of  the  present  industrial  system  and  the  contrasting 
beauties  of  craftsmanship.  Penty,  an  architect  by  profession,  was 
influenced  by  the  workmanship  of  the  middle  ages  as  seen  in  archi- 
tecture, and  impressed  by  the  conspicuous  aesthetic  failures  of  later 
periods.  The  first  chapter  of  the  book  was  devoted  to  a  fiery  attack 
on  the  whole  modern  economic  structure.  The  di"vnsion  of  labor  was 
described  as  a  "pernicious  system"  and  universal  trade  as  "harmful." 
The  use  of  machinery  involved  a  loss  to  society.  "There  are  few 
things  which  machinery  can  do  as  well  as  hand  labour,  and  so  far  as 
my  personal  knowledge  extends,  there  is  nothing  it  can  do  better."' 

"In  production the  only  net  use  of  machinery  to  the  community 

is  that  in  certain  heavy  work  it  saves  labour,  which,  considered  from 
the  point  of  view  of  the  physique  of  the  race,  is  of  very  questionable 
advantage;  or  that  it  reduces  the  cost  of  production.  This  again, 
however,  is  a  doubtful  advantage,  since  the  increase  of  material  posses- 
sions beyond  a  certain  point  is  extremely  undesirable." 

Penty  showed  scant  patience  with  the  "collectivism"  of  the  Fabians, 
which  he  classed  as  merely  state  commercialism.  It  was  necessary  to 
go  back  to  the  middle  ages,  he  thought,  to  find  the  superior  system. 

^National  Guilds:  An  Enquiry  into  the  Wage  System  and  the  Way  Out,  edited 
by  A.  R.  Orage.  (London,  G.  Bell  and  Sons,  1914.)  The  volume  in  its  most 
recent  edition  (1919)  bears  Mr.  Hobson's  name. 

*Cole,  Chaos  and  Order  in  Industry,  p.  49. 

'Contemporary  Reviexv,  vol.  XLI,  no.  498   (June,  1907). 

'A  description  of  Mr.  Orage's  position  at  this  time  is  given  in  Mr.  Niles 
Carpenter's  article,  "The  Literature  of  Guild  Socialism,"  in  the  Quarterly  Journal 
of  Economics,  vol.  XXXIY,  no.  4  (August,  1920),  pp.  763-776. 

Tenty,  op.  cit.,  p.  19. 

*Ibid.,  p.  20. 


212  Amy  Hewes  [June 

Penty  evidently  considered  himself  a  follower  of  Ruskin  and  Morris, 
and  believed  that  he  was  simply  carrying  their  ideas  to  a  logical  conclu- 
sion. Much  of  the  evidence  of  the  "marvelous  and  universal  beauty" 
of  the  life  of  the  middle  ages  must  be  taken  on  faith  by  the  reader,  for 
the  historically-minded  student  finds  the  summary  of  the  rules  of  the 
cloth  weavers  of  Flanders  (taken  at  second-hand  by  Pent}')  a  slender 
basis  upon  which  to  reconstruct  a  civilization. 

During  the  next  six  years  little  guild  literature  appeared.  Penty's 
reading  public  was  apparently  unconvinced,  or  at  least  inactive. 
"Collectivism"  and  "social  reform"  had  their  day  in  England,  almost 
undisputed.  In  other  parts  of  tlie  world  new  and  more  aggressive 
doctrines  were  penetrating  the  ranks  of  labor,  England  itself  under- 
went a  series  of  epoch-making  strikes.  By  1912  fertile  ground  was 
ready  for  the  seeds  of  the  new^  movement.  Mr.  G.  D.  H.  Cole,  then 
fellow  at  Oxford  and  leader  of  the  Oxford  group  of  Fabians,  accepted  j 
the  main  tenets  of  the  articles  appearing  in  the  New  Age  although  | 
he  did  not  definitely  call  himself  a  guildsman  until  1914.°  The  World  \ 
of  Labour,  j)ublishcd  by  Mr.  Cole  in  1913,  contains  studies  of  the  j 
labor  movement  in  the  principal  industrial  countries,  and  suggests  i 
that  a  kind  of  guild  organization  must  be  the  solution  of  the  problems  ! 
discussed.  Ultimately  the  unions  are  to  have  control  of  the  industrial  •! 
world.  The  state,  the  great  organization  of  consumers,  will  in  the  | 
end  delegate  this  control  to  the  union  (the  producers). 

In  1914  Mr.  Hobson's  articles  first  appeared  in  collected  form."  , 
The  volume.  National  Guilds,  contains  a  vigorous  indictment  of  the  ( 
wage  system  and  of  the  British  socialist  movement,  "an  amazing  com- 
pound of  enthusiasm,  and  intellectual  cowardice,"  which  has  committed  : 
itself  to  that  system.  The  wage  system  is  expected  to  go  down  with  'I 
more  or  less  of  a  crash,  and  the  guild  system  to  install  itself  almost 
automatically  in  its  place.  The  guild  is  then  to  supplant  the  capitalist  i 
class,  to  assume  the  state's  responsibility  for  its  members,  to  direct  , 
industry,  and  to  hold  machinery  and  products  in  trust. 

Mr.  Cole  meanwhile  was  making  an  unsuccessful  attempt  to  instil  i 
guild  ideas  into  the  Fabian  Society.  Failing  in  this,  lie  withdrew  from  ( 
the  society  and  in  1915  orgjinized  the  National  Guilds  League.  In 
the  same  year  he  publislied  Lahoiir  in  War  Time,  which  marked  little 
advance  from  his  earlier  theoretical  writing.  In  1917,  in  Self-Govern- 
ment  in  Industry,  Mr.  Cole's  detailed  theory  of  guild  socialism  ap- 
peared. The  true  function  of  the  state  in  a  democratic  community, 
according  to  INIr.  Cole,  is  that  of  an  association  of  "users"  or  "con 
"Cole,  ChnoK  avd  Order  m  Indui^fri/.  p.  52. 
^"National  Guilds,  edited  by  A.  R.  Oragc  (1914.). 


-\ 


1922]  Guild  Socialism:  A  Two  Years'  Test  213 

-sumers."  Trade  unions,  on  the  other  hand,  represent  associations 
of  producers ;  they  are  co-sovereign  with  the  state,  and  hence  cannot 
be  regarded  as  deriving  their  right  to  exist  from  the  state/^ 

Men  produce  in  common,  and  all  sorts  of  association  from  the  medieval 
guild  to  the  modern  trust  and  the  modern  trade  union,  spring  from  their 
need  to  cooperate  in  production:  they  use  and  enjoy  in  common,  and  out 
of  their  need  for  common  action  and  protection  in  their  use  and  enjoyment 
spring  the  long  series  of  States,  the  various  phases  of  cooperation,  the 
increasing  developments  of  local  government. 

Guild  socialists  postulate  a  double  organization — the  National  In- 
dustrial Guild  on  the  part  of  the  producers,  and  the  Municipal  Council 
on  the  side  of  the  consumers,  with  Parliament  as  the  supreme  territorial 
consumers'  association.  Neither  Parliament  nor  the  Guild  Congress 
can  ultimateh^  claim  to  be  sovereign.  Where  a  single  guild  has  a 
quarrel  with  Parliament,  the  final  decision  ought  to  rest  with  a  body 
representative  of  all  the  organized  consumers  and  all  the  organized 
producers. 

The  guild,  acording  to  ]\Ir.  Cole,  is  to  grow  out  of  the  trade  union, 
but  improvements  in  organization  must  be  brought  about.  The 
structure  of  trade  unionism  must  become  industrial,  with  the  workshop 
as  the  unit.  The  reorganized  trade  union,  that  is,  the  guild,  must 
assure  to  the  worker  the  following  things :" 

1.  Recognition  and  payment  as  a  human  being,  and  not  merely  as  the 
mortal  tenement  of  so  much  labour  power  for  which  an  efficient  demand 
exists. 

2.  Consequently,  payment  in  employment  and  in  unemployment,  in  sick- 
ness and  in  health  alike. 

3.  Control  of  the  organization  of  production  in  cooperation  with  his 
fellows. 

4.  A  claim  upon  the  product  of  his  work,  also  exercised  in  cooperation 
with  his  fellows. 

In  demolishing  the  wage  s^'stem,  labor  must  obtain  control  first,  of 
the  process  of  production,  and  second,  of  the  product  itself.  Capitalism 
must  be  made  "socially  functionless" ;  that  is,  labor  must  take  over 
or  destroy  its  functions  of  (1)  investment,  (2)  buying,  and  (3)  selling. 

By  1917  Mr.  Penty  was  ready  with  a  fresh  presentation  of  his 
"medievalist"  guild  theory.  Old  Worlds  for  New,  published  in  that 
year,  is  in  large  part  a  restatement  of  his  earlier  position.  In  some 
ways,  however,  his  original  indignation  against  the  modern  commercial 
system  has  been  modified,  particularly  with  regard  to  the  use  of 
machinery.  "We  can  isolate  a  small  machine,  because  we  can  turn 
it  off  or  on  at  will,  as  is  the  case  with  the  sewing  machine.     Such  a 

"Cole,  Self-Government  in  Industry,  pp.  80,  81. 

"Ibid.,  p.  81. 

^'Ibid.,  p.  155. 


214  Amy  Hewes  [June 

machine  can  he  used  to  reduce  the  amount  of  drudgery  that  is  done^' 
and  enable  us  to  pursue  more  interesting  work.  But  when  machinery 
is  used  on  large  scale  it  is  different.""  But  "every  time  a  machine 
is  invented  to  do  useful  and  necessary  work  which  hitherto  was  done 
by  hand,  it  transfers  a  certain  number  of  men  from  useful  to  useless 
occupations  !"'*  "The  final  test  as  to  whether  a  man  is  a  Collectivist 
or  a  Guildsman  is  to  be  found  in  his  partiality  for  the  Leisure  or  the 
Work  State."" 

The  doctrines  of  the  different  schools  of  guildsmen  were  by  this  time 
becoming  more  clearly  defined.  Mr.  Cole's  later  volumes,  which  suc- 
ceeded one  another  with  impressive  rapidity,"  contain  little  of  Penty's 
glorification  of  the  medieval  guilds,  but  they  support  his  antipathies 
to  the  collectivists. 

Cole  looks  toward  the  future  and  away  from  the  past,  but  he  looks 
through  a  haze  of  political  philosophy  which  dims  the  outlines  of  things 
as  they  are  and  at  times  entirely  obscures  them  from  view.  Of  Chaos 
and  Order  in  Industry  he  says,  "This  book  is  not  an  account  of  Na- 
tional Guilds,  but  an  attempt  to  apply  Guild  socialist  principles  to  the 
present  economic  situation,""  but  it  proves  to  be  almost  wholly  a 
discussion  of  control  in  various  industries,  with  little  analysis  of  the 
essential  nature  of  that  which  is  to  be  controlled.  For  example,  the 
character  of  the  workers  (whether  skilled  or  unskilled)  in  the  various 
engineering  and  shipbuilding  industries  is  regarded  as  determining 
the  relative  degree  of  ease  with  which  guild  organization  may  be 
effected,  but  the  sources  of  raw  materials,  the  purchase  and  use  of 
machinery,  and  the  disposition  of  the  products  of  these  industries,  as 
compared  with  similar  questions  arising  in  other  industries  which  may 
be  brought  under  the  guild  form  of  organization,  go  unnoted !  Even 
as  Mr.  Cole  wrote  these  chapters,  the  building  guilds  of  England,  in 
the  throes  of  their  first  experiment,  were  wrestling  with  the  actual 
economic  questions  of  production,  with  the  theoretical  aspects  of  organ- 
ization ignored  and  forgotten. 

Mr.  Cole's  failure  to  express  the  complexities  of  the  economic  life 
of  today  is  one  of  the  most  conspicuous  characteristics  of  his  writing. 
Paradoxically,  he  seems  more  familiar  with  historical  and  economic 

"Italics  the  writer's. 

"Penty,  Old  Worlds  for  New,  pp.  83,  84. 

^'Ibid.,  p.  91. 

"Ibid.,  p.  175. 

^'^Trade  Unionism  on  the  Railways  (1917);  An  Introduction  to  Trade  Unionism 
(1918);  The  Payment  of  Wages  (1918);  Labor  in  the  Commonwealth  (1919); 
Social  Theory  (1920);  Chaos  and  Order  in  Industry  (1920);  Guild  Socialism 
Restated  (1920). 

"Cole,  Chaos  and  Order  in  Industry,  p.  60. 


1922]  Guild  Socialism:  A  Two  Years'  Test  215 

literature  than  Mr.  Penty  or  :\Ir.  Hobson,  but  the  material  at  his 
command  is  unutilized.  He  is  by  temperament  a  political  and  philosoph- 
ical writer.  The  tides  of  domestic  and  foreign  trade  and  exchange, 
the  complications  of  modern  manufacturing  processes,  the  forces 
underlying  consumption  never  touch  him.  In  fact,  it  is  production 
that  is  a  matter  of  "economics,"  while  consumption  is  a  matter  of 
"politics" !  The  state,  as  the  supreme  organization  of  consumers, 
and  the  guild,  as  the  supreme  organization  of  producers,  must  divide 
the  powers  vertically,  not  horizontally.  That  is,  the  old  separation 
of  legislation  and  administration  must  go.  "A  balance  of  power  is 
essential  if  individual  freedom  is  preserved ;  but  no  balance  is  possible 
unless  it  follows  the  natural  division  of  powers  in  the  Society  of  today. 
Politics  and  economics  aflord  the  only  possible  line  of  division,  and 
between  them  the  power  of  legislation  and  administration  can  only  be 
divided  on  the  basis  of  function."™ 

In  a  lecture  delivered  to  members  of  the  Fabian  Society  and  others 
late  in  1919,''  Mr.  Cole  dwelt  on  credit  and  taxation  under  guild  pro- 
duction. At  the  same  time  that  the  guilds  provide  for  a  way  of  divid- 
ing national  income  with  approximate  economic  equality  and  fairness, 
they  must  provide  for  the  making  and  accumulation  of  fresh  capital, 
so  that  the  national  production  from  year  to  year  will  be  divided  into 
two  parts,  one  of  which  is  directed  towards  satisfying  the  immediate 
needs  of  the  population,  and  the  other  of  which  goes  toward  replenish- 
ing the  capital  fund  and  making  future  production  possible.  Mr.  Cole 
stated  that  under  the  guilds  "saving  becomes  a  business  for  the  com- 
munity as  a  whole,  and  not  for  the  separate  individuals  in  the  com- 
munity." In  such  a  system  it  becomes  the  business  of  those  who 
budget  for  the  community  to  decide  on  the  distribution  of  a  certain 
sum  to  the  members  of  the  community  and  to  reserve  the  remainder  for 
future  productive  development. 

These  generalizations  as  to  the  function  of  saving  in  the  commu- 
nity and  the  means  by  which  it  is  to  be  accomplished  contain  a  super- 
ficial resemblance  to  credit  proposals  which  were  shortly  to  attract 
attention  from  guildsmen  and  others ;  as  a  matter  of  fact,  Mr.  Cole 
proved  to  be  out  of  sympathy  with  a  credit  system  which  was  not  co- 
extensive with  the  guild  itself,  and  the  resemblance  is  only  apparent. 

In  the  same  lecture  Mr.  Cole  suggested  the  methods  of  taxation 
under  the  guilds.  The  guild  system  was  to  provide  the  easiest  possible 
basis  for  taxation,  for  it  would  facilitate  taxation  at  the  source  for 
the  various  industries  or  guilds.  Incidentally,  the  method  would  pro- 
vide a  useful  v.ay  of  remedying  any  inequality  which  might  remain 

^"Cole,  Self-Government  in  Industry,  p.  99. 

"'Cole,  Guild  Socialism,  Fabian  Tract  no.  192,  March,  1920,  p.  15. 


216  Amy  Hewes  [June 

between  the  various  guilds  after  the  community  had  fixed  the  prices 
of  their  respective  products. 

In  1920  Mr.  Hobson,  the  chief  exponent  of  a  now  more  clearly 
defined  branch  of  guild  theory,  restated  his  position  in  National  Guilds 
and  the  State.  Mr.  Hobson's  theoretical  differences  with  Mr.  Cole 
and  his  followers  are  less  striking  than  Mr.  Cole's  separation  from  the 
historical  school  as  represented  by  Mr.  Penty.  Mr.  Hobson's  chief 
argument  with  Mr.  Cole  concerns  the  nature  of  the  state.  While  Mr. 
Cole  would  have  the  state,  as  the  organization  of  consumers,  paralleled 
by  the  guild,  as  the  organization  of  producers,  with  a  joint  council 
to  coordinate  the  two,  Mr.  Hobson  sees  the  state  as  supreme,  but 
having  the  industrial  guilds  as  the  most  important  group  of  organiza- 
tions to  which  power  is  delegated.  The  other  powers  delegated  by 
the  state,  those  of  administration  or  govermnent,  of  the  judiciary,  and 
of  the  army  and  navy,  are  of  minor  importance.  "I  want  National 
Guilds  to  be  absolutely  masters  in  their  own  house  and  within  their 
defined  function — a  function  upon  which  they  would  naturally  agree 
with  the  State,  from  which  they  obtain  their  charter.  In  plain  terms, 
the  producers  shall  be  masters  of  production — a  principle  essential 
to  good  craftsmanship."" 

The  second  and  larger  part  of  the  volume  contains  a  survey  of  the 
factors  of  transition  from  the  capitalist  to  the  guild  state.  Like  Mr. 
Cole,  Mr.  Hobson  believes  the  workshop  to  be  the  unit  of  labor  organ- 
ization of  the  future.  Even  as  he  wrote,  Mr.  Hobson  believed  that  he 
saw  "a  strong  blast  of  new  ideas"  sweep  through  the  workshop,  driv- 
ing the  half-awakened  workers  from  the  partial  control  already  obtain- 
ed to  complete  exclusive  control  of  production.  In  the  end  a  transfer 
of  capital  must  be  arranged  by  the  state.  Apparently  "legal  com- 
pensation" of  the  original  possessors  of  property  would  be  considered 
out  of  the  question,  but  the  "principle  of  consideration"  would  be 
applied  to  those  who  would  otherwise  suffer  through  dispossession.  In 
the  process  the  whole  conception  of  capital  value  would  vanish  and  the 
"real  value"  of  the  time  and  effort  involved  in  the  creation  of  a  sub- 
stitute for  the  property  under  consideration  would  become  the  mea- 
sure of  its  worth,  according  to  the  author.^' 

^leanwhile  the  historical  or  medievalist  school  of  guildsmen,  for  a 
considerable  time  represented  in  guild  literature  by  Penty  alone,  was 
developing  another  exponent,  Mr.  G.  R.  Stirling  Taylor.  The  Guild 
State,  published  in  1919,  rivals  Penty's  Restoration  of  the  Gild 
System  in  its  reverential  allusions  to  the  middle  ages.  The  author 
continually  pleads  for  "facing  the  facts"  of  the  older  society.  "Whether 

"Hobson,  National  Guihln  ami  the  State,  p.  126. 
'Ubid.,  p.  288. 


i 


1922]  Guild  Socialism:  A  Two  Years'  Test  217 

we  like  its  beauty  and  sanity  or  not,  the  Medieval  Age  in  its  main 
features  had  a  s\'mmetry  of  order  which  very  clearly  distinguishes  it 
from  the  social  order,  or  disorder,  that  governs  us  today. "^*  It  is 
particularly  important  to  remember,  according  to  Mr.  Taylor,  that 
government  in  the  middle  ages  was  purely  local.  "The  people  who  talk 
in  terms  of  great  National  Guilds  have  missed  the  whole  essence  of  the 
creed."  A  very  slight  state  structure  may  suffice,  in  his  opinion, 
to  support  the  guild  organs,  although  the  possibility  that  the  structure 
may  be  a  substantial  one  is  not  denied. 

In  Mr.  Ta^dor's  opinion  the  transition  to  the  guild  state  is  to  be  a 
peaceful  one.  "Only  the  illiterate  still  believe  in  the  Revolution  as  a 
mode  of  social  advance.""'  The  guilds  will  compete  with  one  another, 
but  competition  will  be  "sane."  Power  and  wealth  will  be  democratic- 
ally distributed,  but  equality  of  reward  will  not  necessarily  be  a  part 
of  the  system. 

Mr.  Taylor's  irritation  with  the  present  society  as  compared  with 
the  middle  ages  is  perhaps  best  expressed  in  the  concluding  chapter \' 
"We  are  offered  unmitigated  nonsense  for  something  that  at  least  had 
romance  and  beauty  and  an  unaffected  common-sense ....  Wh  en  men 
say  that  they  are  talking  sense  when  they  are  flying  in  the  face  of  all 
the  facts,  then  it  is  time  to  show  a  little  dignity." 

A  new  prophet  of  economic  reform  appeared  in  1919  to  bring  con- 
fusion into  guild  doctrines.  Economic  Democracy  (1919)  and  Credit 
Power  and  Democracy  (1920);  the  work  of  Major  C.  H.  Douglas,  an 
English  engineer  who  had  been  engaged  on  aircraft  construction  during 
the  war,  contain  proposals  for  the  vesting  of  credit  control  in  the 
community  rather  than  in  the  hands  of  the  financiers.  Major  Douglas 
holds  that  such  a  transfer  of  industrial  control  as  the  guildsmen  advo- 
cate would  not  bring  about  real  democracy  in  industry;  for  present 
control  is  not  actually  exercised  by  the  entrepreneurs,  but  by  the  finan- 
ciers who  advance  the  funds  for  the  carrying  on  of  industry.  It  is  in 
this  field  that  effective  reform  must  come.  Two  types  of  cost  enter 
into  the  production  of  every  article :  payments  to  individuals  as  wages, 
salaries,  and  dividends — payments  which  go  out  to  the  community  as 
purchasing  power — and  payments  for  intermediate  instruments  (raw 
materials,  bank  charges,  and  similar  expenses) — j^^y^^^^r^ts  which  go 
to  the  financiers.  The  purchasing  power  of  the  community  is  therefore 
less  than  the  amount  necessary  to  purchase  the  product.  Having 
described    the    stiuation    in    this    way,    Major    Douglas    suggests    the 

"Taylor,  The  Guild  State,  p.  21. 
'^Ibid.,  p.  85. 
^'Ibid.,  p.  96. 
-Ubid.,  p.  152. 


218  Amy  Hewes  [June 

remedy :  the  community,  which  is  the  source  of  credit,  should  control  it. 
The  difference  between  the  "just  price"  of  a  commodity  (the  exact 
equivalent  of  the  purchasing  power  distributed  in  the  course  of  its 
production)  and  the  "economic  price"  should  be  made  up  to  the  manu- 
facturers by  the  public,  and  commodities  should  be  exchanged  at 
exactly  their  "just  prices."  The  establishment  of  labor  banks 
in  the  various  industries  would  give  the  real  control  of  credit  to  the 
community.  The  basis  of  credit  in  these  banks  should  be  labor  power. 
The  weekly  wages  and  salaries  distributed  in  an^^  industry  should  be 
paid  into  its  labor  bank,  which  should  finance  future  capital  expendi- 
tures jointly  with  the  proprietors,  in  the  ratio  of  wages  and  salaries 
to  dividends. 

These  proposals  for  a  change  in  the  credit  system,  with  the  sug- 
gestion of  labor  banks  like  those  proposed  for  the  building  guilds, 
attracted  the  serious  attention  of  guildsmen  from  the  time  of  their 
first  appearance  in  a  series  of  articles  in  the  New  Age.  A  committee 
consisting  of  A.  E.  Baker,  A.  J.  Penty,  M.  B.  Reckitt,  W.  G.  Taylor, 
and  Emily  Townshend  at  once  presented  a  preliminary  summarizing 
report  to  the  executive  committee  of  the  National  Guilds  League."* 
The  majority  of  the  guildsmen  seemed  to  approach  the  subject  under 
compulsion,  with  reluctance  and  distaste.  In  fact,  the  analysis  of  the 
present  and  potential  financial  structure  of  economic  life  had  been 
airily  ignored  in  the  bulk  of  guild  literature.  One  of  the  members  of 
the  committee,  Mr.  Reckitt,  commented  rather  bitterly  on  the  indiffer- 
ence of  his  fellow-guildsmen:" 

There  seems  to  be  a  curious  impression  abroad,  in  Guild  circles,  that 
while  it  is  essentially  practical  (as  of  course  it  is)  to  talk  about  the  work- 
shop, it  is  purely  visionary  and  unreal  to  examine,  or  even  call  attention 
to,  the  existence  of  the  Stock  Exchange  and  the  banks.  Yet  in  my  view 
it  is  unpractical  to  discuss  workshop  problems  while  remaining  oblivious  to, 
or  at  least  silent  upon,  the  whole  financial  apparatus  of  existing  society.  . . . 

At  the  special  conference  of  the  National  Guilds  League  in  December, 
1920,  the  report  of  the  committee  was  presented  and  the  credit  pro- 
posals were  again  talked  over.  Mr.  Penty  characteristically  opposed 
a  prolonged  discussion  of  the  subject,  thinking  that  "there  was  a 
danger  in  dwelling  exclusively  on  subjects  like  Currenc}^,  which  were  a 
mere  reflection  of  reality ;  people  who  reasoned  too  much  on  Credit 
went  mad."'"  Mr.  Hobson  challenged  Douglas'  assumptions  of  antag- 
onism between  financiers  and  industrialists.  Mr.  Ewer  attacked  the 
credit  scheme  on  the  ground  that  it  implied  a  continuance  of  rent, 
interest,    and    profits.     Mr.    Baker's    defense    of    the   Douglas    credit 

'^"Credit  Enquiry,"  The  Ouildsman,  no.  45  (September,  1920),  pp.  8-10. 

=^Lettcr  to  The  OuiJdnman,  no.  48  (December,  1920),  p.  11. 

^"The  Guihlsman.  no.  49   (January,  1921),  p.  5. 


1922]  Guild  Socialism:  A  Two  Years'  Test  219 

proposals   was    almost    without    effect,   and    the    report    favoring   the 
credit  scheme  was  rejected  by  a  large  majority. 

In  February,  1921,  Mr.  Cole  presented  a  wholesale  condemnation 
of  Major  Douglas'  proposals. ^^  In  a  review  of  Credit  Power  and 
Democracy  the  scheme  is  pronounced  "unworkable  practically,  unsound 
economically,  and  undesirable  morally."  The  plan  is  held  to  be  un- 
workable practicall}'  because  it  implies  enlisting  the  services  of  the 
state  in  a  program  hostile  to  capitalism ;  unsound  economically,  be- 
cause it  confers  upon  the  possessing  class  a  vast  mortgage  upon  the 
productive  power  of  the  workers ;  and  undesirable  morally,  because 
it  destroys  the  moral  basis  of  the  socialist  case  by  recognizing  the 
right  to  interest  on  the  part  of  the  present  holders  of  capital.  Finally, 
Mr.  Cole  spurns  Major  Douglas  as  a  guildsman: 

Indeed,  the  truth  is  out.  Major  Douglas  is  in  no  sense  a  Guildsman. 
He  is  simply  a  distributivist,  and  one  who  believes  that  control  should 
rest  with  the  consumer,  exercising  power  through  the  expert,  and  not  with 
the  producers  in  a  self-governing  industrial  democracy.  "Economic  democ- 
racy," in  the  Douglas  sense,  is  the  direct  opposite  of  the  industrial 
democracy  of  Guild  Socialism. 

Mr.  Hobson,  more  receptive  to  discussions  of  the  financial  structure 
of  society,  possibly  on  account  of  the  practical  aspects  of  the  Man- 
chester building  guild  projects,  calls  the  early  articles  in  the  ^ew  Age 
"an  important  adventure  in  theory"  and  implies  that  the  credit 
proposals  are  the  only  important  adventure  of  that  kind  which  has 
been  undertaken  since  1912.''  On  the  whole  INIajor  Douglas  is  to  be 
regarded  as  a  near-ally  of  the  Hobson-Orage  school  of  guildsman, 
although  the  credit  proposals  represent  a  new  branch  of  guild  theory. 

A  work  which  is  not  easil}-  classified  as  that  of  any  one  of  the  three 
schools  of  guildsmen  is  Reckitt  and  Bechhofer's  Meaning  of  Xational 
Guilds,  which  appeared  in  1918  and  in  revised  form  in  1920.  The 
authors  are  clearly  adherents  of  the  "national  guilds  idea,"  however, 
rather  than  of  the  medievalist  guild  theory.  In  the  midst  of  the 
theoretical  and  abstract  discussion  with  wliicli  the  guild  movement 
has  been  surrounded,  the  book  stands  out,  especialh*  in  the  form  of 
its  second  edition,  as  almost  alone  in  its  historical  account  of  guild 
operations  up  to  the  date  of  writing  and  in  its  analysis  of  related 
industrial  problems  of  the  day.  The  nature  of  the  state,  that  main- 
stay of  guild  doctrine,  appears  to  interest  the  writers  very  little. 
The  possibilities  of  control  which  exist  in  the  present  labor  movement 
occupy    the    greater    part    of    the    discussion.      The    keynote    of    the 

''Cole,  (Review)  "Credit  Power,"'  The  Guildsjnan,  no.  50  (February,  1921),  pp. 
9-10. 

^^Hobson,  National  Guilds  and  the  State,  preface,  p.  xiii. 


220  Amy  Hewes  [June 

workers'  struggle  towards  the  guilds  must  be  the  maxim  "encroaching 
control,"  according  to  the  authors."  This  encroaching  control  will 
atrophy  the  power  of  capitalism  and  expel  its  authority,  "The  capi- 
talists will  have  their  industrial  functions  stripped  from  them  until 
they  become  no  better  than  parasites  upon  industry — to  be  knocked 
off  at  last  as  easily,  it  may  be,  as  a  rotten  apple  from  a  bough." 
The  later  edition  of  the  volume  gives  a  simple  and  clear  analysis  of  the 
Douglas  credit  proposals,  with  a  sympathetic  viewpoint  which  fore- 
shadows the  later  work  of  Mr.  Reckitt  on  the  committee  of  the  National 
Guilds  League. 

In  1921  Mr.  Penty  returned  to  the  attack  upon  industrialism  in  his 
short  volume  on  Guilds,  Trade  and  Agriculture.  Always  a  consistent 
medievalist,  he  subordinates  questions  of  control  and  government  of 
guilds  to  the  maintenance  of  an  industrial  system  based  on  "just 
price."  The  frenzied  search  for  wider  markets  should  cease  and  atten- 
tion should  be  turned  to  a  great  revival  in  agriculture.  The  Douglas 
credit  scheme  is  called  a  "mere  re-shufRing  of  the  cards"  in  an  emer- 
gency which  demands  a  fundamental  upheaval. 

A  reviewer  and  critic  of  guild  literature  at  the  present  juncture  is 
in  danger  of  underestimating  or  overestimating  its  importance,  at  one 
and  the  same  time.  JMr.  Penty  and  Mr.  Cole  are  undeniably 
right  in  their  claim  that  "collectivism"  has  failed  to  satisfy  the  longings 
and  ambitions  of  the  British  workman  of  today.  A  body  of  theory 
which  has  a  chance  of  winning  their  approval  and  guiding  their  efforts 
is  not  to  be  lightly  dismissed.  It  may  be  that  the  guild  idea  can 
enter  where  collectivism  has  failed  and  win  a  new  loyalty.  On  the 
other  hand,  guild  literature  is  so  surfeited  with  theory,  theory  based 
upon  a  knowledge  of  the  sum  total  of  economic  society  which  is  far 
from  profound,  that  it  is  almost  uniformly  pale  and  shadowy — a 
sufferer  from  chronic  malnutrition.  In  the  words  of  a  critic  who  would 
have  been  a  sympathetic  reader  if  his  thorough  scholarship  had  not 
found  itself  unsatisfied,  "it  has  that  fine  contempt  of  ugly,  little  facts 
which  Huxley  explained  to  be  vital  to  a  general  hypothesis."  The  reader 
finds  in  the  end  that  the  lack  of  "present-mindcdness"  is  due  not  so 
nmch  to  ignorance  as  to  a  })rofound  distaste  for  the  type  of  thorough, 
painstaking,  intellectual  endeavor  which  happens  to  be  represented  in 
Enghind  by  those  arch-bogeys  of  guildsmen,  the  Webbs ;  and  according 
to  his  temperament,  he  is  the  less  or  the  more  tolerant  of  the  short- 
comings of  the  literature  on  that  account. 

With  all  their  obvious  and   pervasive  inadequacies,  the  volumes  of 
guild  theory  represent  the  ambitious  and  single-minded  efforts  of  men 

^Mteckitt  and  Bechhofer,  Meaning  of  National  Guilds  (1920),  p.  168. 

^Ibid.,  p.  173. 


1922]  Guild  Socialism:  A  Two  Years'  Test  221 

who  dream   of  a  better  and  happier  social  order,  and  as   such  they 
deserve  a  permanent  place  in  the  history  of  social  movements. 

The  Work  of  Propaganda  and  the  National  Guilds  League 

The  guild  writers  were  not  slow  to  recognize  the  fact  that  if  the 
doctrines  of  guild  socialism  were  to  be  reflected  in  a  reorganization  of 
industrial  society,  a  constituency  to  support  them  must  be  built  up  as 
rapidly  as  possible.  They  saw  that  it  would  be  necessary  to  engage 
in  active  propaganda  work  for  the  purpose  of  making  their  program 
widely  known  and  understood.  The  particular  necessity  was  that  of 
converting  the  rank  and  file  of  the  labor  movement,  which  was  favor- 
ably disposed  towards  "collectivism"  or  "state  socialism"  at  the  time 
when  the  guild  movement  had  its  inception. 

Mr.  Orage  and  Mr.  Hobson  were  in  fact  setting  to  work  seriously 
upon  this  task  when  they  collaborated  in  1908  in  the  series  of  articles 
which  appeared  in  the  New  Age.  In  the  words  of  Mr.  G.  D.  H.  Cole, 
these  articles  "gave  the  National  Guilds  movement  a  definite  shape,  and 
made  it  for  the  first  time  a  practical  and  constructive  force. "^^  Mr.  Cole 
himself  is  actually  responsible  for  much  of  the  organized  propaganda 
which  eventually  gained  a  wide  hearing  for  the  guilds.  In  1914  he 
began  a  series  of  articles  with  Mr.  W.  Mellor,  in  the  London  Daily 
Herald,  the  aim  of  which  was  "to  popularize  Guild  propaganda  and 
bring  it  into  the  fullest  possible  relation  with  the  everyday  work  of 
the  trade  union  movement."''^  Mr.  Cole  realized  that  the  appeal  of 
the  guild  idea  had  remained  almost  purely  intellectual,  and  that  the 
bulk  of  the  labor  movement  remained  unaffected  and  even  unaware  of 
the  program.  Guild  theories  had  sifted  into  the  Fabian  Society,  but 
had  found  favor  only  with  the  younger  members.  The  growing  unrest 
in  the  industrial  world  had  helped  to  make  the  time  ripe  for  a  further 
development. 

In  spite  of  the  outbreak  of  the  war  in  the  summer  of  1914-  the 
leaders  of  the  movement  believed  that  the  guild  idea  had  won  interest 
and  possible  support,  and  that  a  step  in  advance  could  be  taken.  At 
a  small  conference  held  in  December,  1914,  a  long  statement  was  drawn 
up  in  which  the  theory  of  national  guilds  and  the  description  of  the 
necessary  stages  in  their  realization  were  formulated.  A  second  con- 
ference was  held  at  Oxford  early  in  1915,  and  it  was  decided  that  a 
permanent  organization  should  be  formed  for  the  dissemination  of 
guild  ideas.     At  Easter,  1915,  a  third  and  larger  conference  was  held 

''Cole,  Chaos  and  Order  in  Industry,  p.  49. 

''Ibid.,  p.  52. 


222  Amy  Hewes  [June 

in  London,  and  an  organization  which  was  to  become  widely  known  as 
the  National  Guilds  League  was  founded." 

The  constitution  of  the  League  states  that  its  objects  are  "the 
abolition  of  the  Wage  System,  and  the  establishment  by  the  Workers 
of  Self-Government  in  Industry  through  a  democratic  system  of  Na- 
tional Guilds  working  in  conjunction  with  a  democratic  State."  Its 
"methods"  are  "(a)  Propaganda  of  Guild  Socialism  by  Means  of 
Lectures,  Meetings,  and  Publications,"  and  "(b)  Enquiry  into  Sub- 
jects Connected  with  National  Guilds."  Membership  was  opened  to 
all  who  accepted  the  rules  of  the  League. 

In  pursuance  of  the  objects  which  its  founders  set  before  themselves 
in  1915,  the  League  has  published  a  large  number  of  pamphlets  on 
various  subjects  connected  with  guilds  and  has  reprinted  others  which 
bear  upon  guild  matters.  Since  1917  it  has  published  a  monthly 
organ,  The  Guild  Socialist  (formerly  The  Guildsman),  of  which  Mr. 
G.  D.  H.  Cole  and  Margaret  Cole  have  been  the  editors  since  1920.  It 
has  provided  for  scries  of  lectures  by  a  variety  of  speakers,  not  all 
of  whom  have  been  guildsmen.  "Guild  groups"  have  been  set  up  in 
various  parts  of  the  country,  to  act  as  centers  for  the  further  dissem- 
ination of  guild  ideas. 

Mr.  Hobson,  writing  with  a  perspective  on  the  work  of  the  National 
Guilds  League  obtained  through  his  connection  with  the  practical 
operations  of  the  Manchester  Building  Guild,  prophesied  that  the 
growth  of  the  guild  movement  would  be  in  a  manner  independent  of 
the  development  of  the  theoretical  bases  of  guild  socialism  through 
such  agencies  as  the  League."  "National  Guilds  can  never  be  realized 
save  by  economic  action  and  by  industrial  associations.  Primarily, 
it  is  the  Trade  Unions  who  must  constitute  the  driving  force.  The 
National  Guilds  League,  therefore,  with  the  Guild  writers,  must  con- 
tent themselves  with  the  development  and  dissemination  of  ideas.  ,  .  . 
Truth  to  tell,  most  of  us,  whose  names  are  associated  with  National 
Guilds  propaganda,  are  undeniably  of  middle-class  origin." 

Recognizing  itself  as  the  proper  instrument  for  the  formulation  of 
new  guild  policies,  the  National  Guilds  League  has  been  confronted 
with  the  necessity  of  defining  its  stand  upon  four  questions,  none  of 
which  loomed  large  at  the  time  of  the  early  development  of  guild  theory: 
(1)  By  what  administrative  arrangements  were  agricultural  opera- 
tions to  be  carried  on  in  the  guild  state.?  (2)  What  role  belonged  to 
professional  associations?  (3)  What  relation  with  the  cooperative 
movement  should  the  guilds  assume?  (4)  What  significance  had  the 
soviet   system   for  the  development   of   the  guild   state?     Substantial 

"Cole,  Chaos  and  Order  in  Industry,  p.  62. 

"Hobson,  National  Guilds  and  the  State  (1920),  preface,  p.  vi. 


1922]  Guild  Socialism:  A  Txco  Years'  Test  223 

agreement  was  attained  for  the  first  two  questions.  The  third  proved 
controversial  and  the  fourth  was  the  rock  upon  which  guild  organiza- 
tion almost  foundered. 

The  agricultural  situation  was  brought  before  the  annual  conference 
of  the  National  Guilds  League  in  1920  in  the  form  of  a  resolution  of 
the  executive  committee,  which  asked  that  it  be  instructed  to  prepare 
a  pamphlet  defining  the  League's  principles.  These  principles  were 
stated  as  public  ownership  of  all  land,  direct  management  of  all  large 
farms  by  an  agricultural  guild,  and  the  extension  of  the  powers  of 
cooperative  organizations  which  were  eventually  to  be  fused  with  the 
agricultural  guild.  At  that  time  the  League  lacked  an  agricultural 
constituency  and  the  proceeding  was  wholly  academic  in  character. 
In  1921  two  agricultural  guilds  were  organized.  The  New  Town 
Agricultural  Guild  at  Welwyn,  in  Hertfordshire,  was  created  for  the 
development  of  a  rural  zone  around  the  garden  city  at  Welwyn.  The 
organization  was  on  a  small  scale  and  up  to  the  close  of  1921  no 
opportunity  had  been  given  for  the  application  of  the  larger  princi- 
ples of  the  National  Guilds  League.  The  second  agricultural  guild  is 
known  as  the  Lea  Valley  Co-operative  Nursery.  It  is  run  on  self- 
government  principles  by  the  workers  themselves,  and  distributes  no 
profits. 

The  question  of  guild  organization  among  professional  groups  was 
disposed  of  at  the  1920  conference  by  the  passage  of  the  following 
resolution  with  only  one  dissenting  vote : 

That  this  conference  regards  the  organization  of  technical,  professional, 
supervisory,  and  administrative  workers  on  Trade  Union  lines  as  being  an 
essential  and  urgent  step  on  the  road  to  Guild  Socialism  and  regrets  the 
attitude  of  mutual  suspicion  which  retards  the  recognition  of  the  common 
economic  interests  of  all  workers. 

That,  while  this  conference  welcomes  the  recent  developments  in  the 
organization  of  professional  workers,  it  is  convinced  that  a  complete  fusion 
into  a  single  organization  of  workers  of  all  grades  is  necessary  for  the 
revolutionary  object  of  establishing  Guild  Socialism. 

The  plans  of  the  building  guilds  were  already  showing  up  the  direct 
importance  of  the  participation  of  technicians  and  other  professionals 
in  their  schemes.  It  will  be  seen  later  that  the  sympathetic  attitude 
of  the  architects  was  a  factor  of  real  value  in  their  inauguration. 

The  following  resolution,  framed  by  the  executive  committee,  brought 
the  subject  of  cooperation  before  the  Conference: 

This  Conference,  holding  that  a  closer  alliance  between  Cooperation  and 
Trade  Unionism  is  urgently  required,  and  can  be  secured  only  on  the  basis 
of  a  realised  community  of  policy  and  ideals,  decides  to  work  for  such  an 
alliance  on  the  following  lines: 

(a)     An  emphatic  dissociation  of  the  Cooperative  Movement  from  capi- 


224  Amy  Hewes  [June 

talistic  methods  and  an  enlightened  and  democratic  attitude  on  the  part  of 
Cooperators  toward  their  employees. 

(b)  The  recognition  of  the  Cooperative  Movement  as  capable  of  de- 
veloping into  a  desirable  form  of  Consumers'  representation  in  a  Guild 
Society  in  regard  to  those  Industries  and  Services  which  are  principally 
engaged  in  producing  and  distributing  commodities  intended  for  personal 
or  domestic  use. 

(c)  The  recognition  of  the  Cooperative  Movement  as  the  social  repre- 
sentative of  the  consumers  in  relation  to  those  industries  and  services,  and 
as  therefore  destined  to  form  an  integral  part  of  the  structure  of  Guild 
Society. 

(d)  The  recognition  of  Guild  organization  as  no  less  applicable  to  the 
industries  owned  by  the  Cooperative  Movement  than  to  others. 

(e)  The  advocacy  of  the  fullest  extension  of  industrial  self-government 
to  the  workers  in  the  Cooperative  Movement,  with  a  view  to  the  control  of 
the  industries  and  services  concerned  by  the  workers  in  conjunction  with 
the  Cooperative  Movement. 

(f)  The  promotion  of  the  fullest  possible  arrangements  for  mutual 
assistance  by  the  two  Movements  in  bringing  about  the  overthrow  of 
Capitalism  and  the  establishment  of  a  Guild  Society. 

The  support  of  this  resolution  by  the  Conference  fails  to  indicate 
the  real  diversity  of  aim  between  the  cooperative  movement  and  the 
national  guilds.  Possibly  it  was  because  the  Co-operative  Wholesale 
Society  was  just  on  the  point  of  coming  forward  with  the  financial 
assistance  Avhich  made  possible  the  first  operations  of  the  building  guilds 
that  the  existing  differences  did  not  stand  out  as  sharply  as  usual  in 
the  minds  of  the  members.  A  careful  reading  of  the  resolution  how- 
ever shows  important  reservations.  The  discussion  did  bring  out  a 
protest  on  behalf  of  the  Manchester  group  "on  the  ground  that  the 
resolution  dealt  too  leniently  with  the  serious  shortcomings  of  the 
Cooperative  Movement  as  it  now  exists."  The  amendment  embod3'ing 
this  objection  was  later  withdrawn,  however,  "on  the  understanding 
that  the  points  raised  in  the  course  of  the  discussion  would  receive  full 
consideration  in  the  preparation  of  a  detailed  scheme." 

The  fourth  question  upon  which  the  National  Guilds  League  found 
it  necessary  to  define  its  position  during  the  year  1920  was  that  of  its 
attitude  towards  the  bolshevik  regime.  Eventually  the  question  made 
a  sharp  division  in  the  ranks  of  guildsmcn  in  the  same  way  in  which 
it  brought  about  a  split  in  organized  labor.  It  became  clear  in  the 
meeting  of  the  League  in  May,  1920,  that  there  was  among  guildsmen 
a  distinct  "left  wing"  with  strong  sympathy  for  soviet  Russia.  The 
members  of  this  group  prophesied  early  revolution  at  home,  and  wel- 
comed the  prospect  of  the  upheaval  on  account  of  their  belief  that 
the  coming  of  revolution  would  mean  the  advent  of  national  guilds, 
even  though  "a  considerable  mess"  in  the  way  of  a  dictatorship  of  the 
proletariat,  conscription  of  labor,  and  Taylorism  were  necessary  as- 


1922]  Guild  Socialism:  A  Two  Years'  Test  225 

pects  of  the  transition.  The  right  wing,  on  the  other  hand,  declared 
themselves  to  be  "gradualists,"  insisting  that  the  road  to  guilds  lay 
through  trade  unions  and  professional  associations.  It  would  not  be 
necessary  to  "overthrow  capitalism"  for  capitalism  was  already  totter- 
ing; but  it  was  imperatively  necessary  to  continue  the  educational 
propaganda  of  the  guild  movement  and  in  this  way  to  prepare  for 
the  guild  state.  They  called  the  attention  of  the  "lefts"  to  the  newly 
established  Communist  party  in  England  and  maintained  that  their 
efforts  belonged  there  rather  than  in  the  National  Guilds  League. 

The  cause  of  the  prolonged  discussion  of  the  soviet  sj^stem  at  this 
meeting  was  the  presentation  of  three  resolutions  on  "Soviets  and 
Democracy."  The  first  resolution,  which  was  introduced  by  the  exec- 
utive committee  and  the  London  group,  gave  approval  to  the  soviet 
system  itself  but  contained  reservations  as  to  its  applicability  to 
Great  Britain.  It  was  passed  by  a  close  vote.  The  passage  of  this 
resolution  was  regarded  as  a  hardwon  victory  for  the  "lefts"  in  the 
guild  movement,  but  the  votes  on  other  matters  showed  that  the  newly 
evolving  party  lines  among  guildsmen  had  great  flexibility. 

The  second  resolution,  introduced  by  the  "rights"  would  have  bound 
the  conference  of  the  League  to  reject  the  solution  of  the  industrial 
struggle  contained  in  the  phrase  "the  dictatorship  of  the  proletariat" 
on  the  ground  that  it  is  "not  merely  impracticable  but  essentially  fatal 
to  all  the  social  values  for  which  the  League  has  always  stood."  The 
resolution  was  lost  by  a  small  majority,  and  the  "lefts"  were  again  in 
the  ascendency. 

The  third  resolution,  known  as  the  "democracy  resolution"  was 
introduced  by  the  executive  committee  but  passed  in  the  form  of  an 
amendment  framed  by  the  Manchester  group.  The  resolution  as 
passed  was  an  indictment  of  the  parliamentary  system  but  a  qualified 
endorsement  of  political  action  for  the  purpose  of  hampering 
capitalism. 

An  even  sharper  conflict  between  right  and  left  wings  took  place  at 
a  special  conference  held  in  London  in  December,  1920.  After  the 
committee  appointed  at  the  May  conference  had  brought  in  its  "Pro- 
gramme of  Action,"  or  "Soviet  Report,"  and  Mr.  Cole  had  presented 
a  "Policy  Pamphlet,"  the  six  members  of  the  right  wing  of  the  executive 
committee  resigned.  The  conference  showed  its  left-ward  tendencies 
by  an  endorsement  of  the  Programme  of  Action  and  by  a  refusal  to 
endorse  the  Douglas  credit  scheme,  which  had  come  to  be  known  as  the 
"Orage-Douglas  plan."  In  the  annual  conference  held  in  March,  1921, 
the  Policy  Pamphlet  was  endorsed.  The  1921  conference  left  the 
National  Guilds  League  in  a  critical  condition.  Although  a  few  of 
the  right-wing  members  had  been  won  back,  several  of  the  local  guild 


226  A7ni/  Hewes  [June 

groups  had  been  alienated,  the  membership  had  suffered,  and  the  finan- 
cial condition  of  the  League  had  become  so  serious  that  it  was  neces- 
sary to  put  the  organization  on  a  voluntary  basis. 

At  the  close  of  1921  the  National  Guilds  League  had  failed  to  win 
back  its  former  self-confidence.  Writing  in  a  recent  issue  of  the 
Labour  Monthly^  Mr.  W.  Mellor,  a  member  of  the  League,  states  that 
"since  1917  Guild  Socialism  has  been  constantly  and  progressively 
waning  in  power."  He  attributes  its  difficulties  to  a  policy  of  com- 
promise. 

The  eyes  of  the  National  Guilds  League  are  still  fixed  or  what  is  going 
to  happen  the  day  after  the  revolution;  how  exactly  it  proposes  to  work 
for  the  revolution  it  has  not  made  up  its  mind.  It  talks  of  Soviets,  but  is 
careful  to  explain  that  Soviets  are  probably  not  applicable  to  Great  Britain. 
It  has  dropped  its  whole-hearted  support  of  the  state,  but  still  clings  to 

democratic    institutions Guild    Socialism,    in    so    far    as    it    has    any 

standing  at  all,  has  answered  the  needs  neither  of  the  left  nor  of  the  center, 
though  it  has  tried  to  placate  both. 

It  would  be  a  gross  error  to  measure  the  success  or  failure  of  the 
guild  movement  in  England  by  following  solely  the  fortunes  of  the 
National  Guilds  League.  The  very  existence  of  this  League  is  unknown 
to  some  of  the  trade  unions  who  have  formed  building  guilds.  Fur- 
thermore, the  working  guilds  have  no  formal  affiliation  with  the  Na- 
tional Guilds  League.  Without  minimizing  the  contributions  which  the 
League  has  made,  it  should  be  recognized  that  its  membership  is  made 
up  largely  of  the  "intellectuals,"  not  the  wage-earners,  and  that  its 
interest  and  influence  have  been  felt  only  slightly  outside  the  field  of 
theory  and  propaganda. 

The  Housing  Shortage  and  the  Guilds^  Opportunity 

While  guild  theory  was  developing  and  while  the  National  Guilds 
League  was  building  up  its  affiliated  groups,  a  guild  movement  of  an- 
other kind  was  going  on  in  the  north  of  England.  The  contrast  be- 
tween the  pro2)aganda  movement  and  the  appeal  made  in  a  concrete 
form  to  the  trade  unionists  in  the  north  could  hardly  have  been  greater. 
The  workingmen  whose  apathy  and  ignorance  had  discouraged  the 
guildsmen  who  were  in  the  midst  of  discussions  of  the  nature  of  the 
guild  state  were  easily  enlisted  when  a  working  proposition  was  sub- 
mitted. 

A  housing  shortage,  serious  in  Great  Britain  even  before  the  war 
and  alarming  at  its  close,  was  the  occasion  of  the  rise  of  the  new  part 
of  the  guild  movement.     The  hardships  which  had  resulted  from  the 

'"W.  Mellor,  "A  Critique  of  Guild  Socialism,"  Labottr  Monthly,  November,  1921, 
pp.  397-404.. 


1922]  Guild  Socialism:  A  Two  Years'  Test  227 

scarcity  of"  houses  were  felt  not  only  by  the  working  people  but  by  all 
classes,  and  housing  was  recognized  as  a  national  problem. 

The  government  hastened  to  meet  the  situation  with  desperate  reme- 
dies which  brought  no  adequate  relief.  Since  the  business  of  house 
building  had  become  so  unprofitable  that  the  master  builders  had  ceased 
to  undertake  it  and  had  gone  over  to  other  types  of  construction  work, 
the  government  tried  the  expedient  of  offering  subsidies  in  an  effort  to 
bring  builders  back  into  the  field.  The  subsidies  ran  as  high  as  £260 
per  house  for  the  individual  builder.  In  order  to  afford  relief  to 
tenants  from  the  pressure  of  ever-rising  rents,  the  government  also  un- 
dertook a  policy  of  rent  restriction,  and  in  so  doing  partially  nullified 
the  inducement  to  builders.  In  July,  1919,  a  Housing,  Town  Plan- 
ning act  was  passed,  according  to  the  terms  of  which  the  government 
offered  to  assist  cities  and  towns  in  building  houses  by  lending  them 
money  and  b}^  stipulating  that  it  would  make  up  losses  incurred  which 
were  not  covered  by  the  rate  of  a  penny  in  the  pound  in  the  local  area. 
It  was  in  connection  with  this  last  endeavor  that  the  building  guilds 
were  formed  and  began  operations.  With  two  of  three  exceptions,  all 
of  the  early  guild  contracts  had  to  do  with  the  plans  of  municipal 
councils  for  the  construction  of  artisans'  dwellings. 

The  inauguration  of  a  guild  system  was  full  of  difficulties.  The 
problem  was  to  find  a  foothold  in  an  established  industrial  system  and 
to  compete  with  great  modern  units  of  production  in  highly  organized 
centers.  The  program  required  both  organizing  ability  and  the  skill 
of  men  who  were  trained  in  the  work  of  actual  building.  With  the  im- 
portant exception  of  Mr.  S.  G.  Hobson,  one  of  the  first  writers  on  guild 
theory,  the  development  of  the  Manchester  guild  was  almost  wholly  in 
the  hands  of  men  of  the  latter  type.  ]Mr.  Hobson  was  the  first  secre- 
tary of  the  Manchester  Building  Guild,  and  was  influential  in  securing 
the  approval  of  the  ^Ministry  of  Health  for  the  form  of  contract  by 
which  the  first  houses  were  constructed.  He  gave  the  impetus  which 
resulted  in  the  formation  of  the  first  guild  equipped  for  house  building 
in  the  form  of  a  suggestion  made  to  the  Operative  Bricklayers  Society 
in  January,  1920,  a  proposal  to  break  the  housing  deadlock  through  a 
guild  which  should  hold  the  monopoly  of  building  labor. 

The  plan  of  establishing  a  guild  was  referred  to  the  Manchester 
Branch  of  the  Federation  of  Building  Trades  Operatives.  This  body 
endorsed  the  proposal  without  a  dissenting  vote  and  referred  it  on  to 
the  District  and  Branch  Management  Committees,  representing  all  the 
organized  building  workers  of  the  Manchester  district.  This  group  of 
committees,  in  turn,  approved  the  scheme  at  their  meeting  on  January 
20,  1920.      It  was  then  unanimously  resolved: 

That  this  meeting.  .  .heartily  approves  of  the  Building  Guild  Committee, 


228  Amy  Hewes  [June 

and  hereby  pledges  its  support,  and  agrees,  to  nominate  and  elect  a  direct 
representative  of  each  trade  union  on  the  Building  Guild  Committee. 

The  trade  unions  claimed  that  their  ability  to  supply  the  necessary 
labor  element  in  the  production  of  houses  constituted  as  good  a  guaran- 
tee for  the  performance  of  the  contract  as  a  deposit  of  gold.  They 
proposed  to  exploit  the  possibilities  of  group  credit  based  on  the  power 
to  produce,  as  a  substitute  for  bank  credit  based  on  the  purchasing 
power  of  money.  The  difference  in  their  own  position  and  that  of 
the  ordinary  contractor  was  thus  explained : 

A  builder  on  signing  a  contract  may  properly  be  asked  to  give  security, 
because  his  financial  stability  is  the  essential  thing.  He  must  have  financial 
resources,  because  he  cannot  control  the  supply  of  labor.  On  the  other 
hand,  whatever  its  financial  arrangements,  the  Building  Guild  Committee 
has  an  ample  supply  of  labor,  perhaps  even  a  monopoly  of  it.  Therefore, 
they  argued,  the  nature  of  the  guarantee  required  from  them  is  not  primarily 
financial,  but  fundamentally  a  guarantee  that  the  labor  would  be  forth- 
coming and  the  house  built.  A  builder  may  fail  to  build  the  houses,  not 
because  he  is  financially  unsound,  but  because  he  cannot  obtain  the  labor; 
the  City  Council  may  insist  upon  its  pound  of  flesh,  but  the  houses  remain 
unbuilt.  Finance,  in  short,  plays  a  subsidiary  part.  But  the  Building 
Guild  Committee  can  build  the  houses,  which  is  the  essential  thing,  and  full 
guarantees  on  this  head  can  be  given. 

As  a  matter  of  fact,  however,  the  problem  of  guarantee  was  actually 
settled  when  the  contracts  were  made,  by  the  introduction  of  the  Co- 
operative Wholesale  Society  as  a  third  party  to  the  contract  with  the 
functions  of  furnishing  the  materials  and  guaranteeing  performance. 

The  Manchester  Building  Guild  Committee  was  speedily  set  up.  It 
at  once  began  negotiations  with  the  Council  of  the  City  of  Manchester 
for  the  construction  of  workingmen's  houses. 

With  the  housing  situation  as  it  has  been  described,  the  Ministry  of 
Health  could  not  turn  a  deaf  ear  to  a  scheme  which  promised  easy 
mobilization  of  the  necessary  labor.  The  building  guild  tenders  were, 
however,  subjected  to  a  long  series  of  negotiations  lasting  from  January 
until  July,  1920,  before  an  understanding  was  reached.  As  the  summer 
wore  to  a  close,  and  the  end  of  the  best  building  weather  drew  nearer, 
the  guild  leaders  lost  patience  and  roundly  expressed  their  belief  that 
private  building  interests  were  successfully  stalling  their  plans.  The 
Ministry,  on  the  contrary,  expressed  its  own  position  in  a  press  state- 
ment issued  in  June.*"     It  was  claimed  that : 

The  attitude  of  the  Ministry  of  Health  toward  the  building  guild  princi- 
ple has  from  the  start  been  one  of  sympathy ;  but  several  difficulties  pre- 
sented themselves  for  solution  before  the  Ministry  could  feel  fully  justified 
in  approving  it. 

In  a  conversation  with  the  writer,  a  representative  of  the  Ministry 
said  that  the  guilds  were  not  ready  with  the  necessary  organization  for 
*°London  Times,  June  7,  1920. 


1922]  Guild  Socialism:  A  Tzco  Years'  Test  229 

house  building,  and  that  they  were  slow  to  convince  the  Ministry  that 
they  had  the  experience  sufficient  to  insure  a  steady  progression  of  the 
successive  operations  necessary  to  house  building. 

The  situation  was  greatly  changed  through  assistance  given  by  the 
Co-operative  Wholesale  Society,  and  in  July,  1920,  the  following  memo- 
randum of  conversation  was  issued  by  the  Ministry : 

It  is  agreed  that  the  following  arrangements  would  be  satisfactory  to  the 
Guild  and  to  the  Ministry : — - 

1.  The  Guild  will  give  an  estimate  of  the  cost  of  each  type  of  house, 
which  estimate  must  be  agreed  as  reasonable  between  the  parties  and  ap- 
proved by  the  Ministry. 

2.  The  Guild  will  be  paid  a  lump  sum  of  ^40  per  house  in  respect  of 
remuneration  for  disposal  by  the  Guild  to  provide  for  continuous  pay  to 
those  employed  on  Guild  contracts,  or  for  otber  purposes  of  the  Guild. 

3.  The  Guild  will  be  paid  6  per  cent  of  the  cost  (subject  to  par.  5 
below)  to  cover  plant  and  all  overhead  charges,  salaries  of  buyers,  head- 
office  expenses,  and  salaries  of  supervising  staff  not  wholly  employed  on  the 
site  of  the  individual  housing  schemes. 

4.  Any  surplus  under  pars.  2  or  3  to  be  devoted  to  improvement  of  the 
service. 

5.  The  charge  of  6  per  cent  to  cover  the  purpose  mentioned  in  par.  3 
will  be  paid  on  increased  cost  due  to  increases  in  the  rate  of  wages,  but 
not  on  increases  in  the  cost  of  materials. 

6.  (a)  If  the  estimated  cost  is,  say,  ^900  and  the  actual  cost  proves  to 
be,  say,  ,£800,  the  actual  cost  will  be  paid  by  the  local  authority  plus  6  per 
cent  for  overhead  charges  (subject  to  any  modification  due  to  par.  5)  and 
£40  as  above,  (b)  If  the  actual  cost  should  prove  to  be  say,  £1000,  that 
cost  would  be  paid  plus  6  per  cent  on  the  estimated  net  cost  of  £900  only 
(subject  to  any  modifications  due  to  par.  5)  and  £40  as  above. 

7.  The  Co-operative  Wholesale  Society  may  be  associated  in  the  con- 
tract for  the  purchase  of  materials.  This  position  to  be  clearly  defined  to 
the  satisfaction  of  all  concerned. 

8.  The  contract  to  include  a  "break  clause,"  which  shall  not  take  effect 
for  three  months  from  the  commencement,  allowing  the  contract  to  be  term- 
inated if  the  costs  exceed  the  estimate  plus  any  increases  in  the  rates  of 
wages  and  standard  costs  of  materials  which  may  have  taken  place  since 
the  making  of  the  estimate. 

9.  The  Co-operative  Wholesale  Society  will,  on  being  satisfied  with  the 
contract,  insure  the  local  authority  against  loss  under  the  contract  for  a 
payment  of  2s.  6d.  per  £1000. 

10.  A  satisfactory  costing  system  shall  be  arranged. 

It  was  not,  however,  until  the  beginning  of  September  that  the  draft 
form  of  contract  was  finally  adopted.  Conforming  to  the  July  memo- 
randum, this  provided  for  the  construction  of  houses  by  the  guilds  for 
the  actual,  net  prime  cost  of  materials  and  labor  at  standard  rates 
plus  £40  per  house  and  6  per  cent  of  the  estimated  cost  as  given  in 
the  guild  tender. 

*^The  Building  Guild,  pamphlet  published  by  the  Co-operative  Press  Agency,  Man- 
chester (July,  1920). 


230  Amy  Hewes  [June 

The  London  group  proceeded  almost  independently  of  the  Man- 
chester operations.  On  April  20,  1920,  the  London  District  Council 
of  the  National  Federation  of  Building  Trades  Operatives  unanimously 
voted  to  establish  the  London  Guild  of  Builders.  This  organization 
came  into  being  as  a  cooperative  society  registered  under  the  Industrial 
and  Provident  Societies  act.  Unlike  the  Manchester  guild,  it  did  not 
aim  to  create  a  monopoly  of  labor.  It  declared  itself  ready  to  under- 
take private  work  as  well  as  public  contracts.  As  far  as  its  form  of 
business  organization  is  concerned,  it  was  merely  an  example  of  co- 
partnership or  cooperative  production  in  the  building  industry.  Its 
personnel  was  precisely  the  same  as  that  of  the  District  Council  of 
the  Federation,  but  the  guild  was  to  do  the  work,  whereas  the  function 
of  the  trade  union  organization  remained  merely  the  regulation  of  in- 
dustrial conditions.  In  jNIay  the  London  District  Council  sent  out  a 
prospectus  under  the  title,  An  Industry  Cleared  for  Action.  In  this 
pamphlet  the  guild  organization  was  outlined  and  an  appeal  for  volun- 
teer service  was  made. 

The  moving  spirit  in  the  London  guild  was  Mr.  Malcolm  Sparkes, 
who  stands  in  much  the  same  relation  to  the  movement  in  the  south  as 
Mr.  Hobson  to  the  JNIanchester  guild.  Both  of  Quaker  stock,  both 
indefatigable  enthusiasts  with  capacity  to  communicate  their  enthusi- 
asm, they  developed  building  guilds  from  different  points  of  view. 
"Up  in  Manchester,"  said  Mr.  Sparkes,  when  the  London  guild  was 
getting  under  way,  "they  are  still  talking  about  the  class  struggle 
and  the  abolition  of  the  wage  system.  In  London  we  talk  about 
democratic  control  of  a  public  service.  We  have  psychology  on  our 
side,  but  as  yet  no  history."  Mr.  Sparkes  staked  everything  on  the 
spirit  which  makes  men  respond  to  an  ideal.  This  faith  is  expressed 
in  the  motto  of  the  London  guild : 

We  are  convinced  that  what  we  can  see  others  can  see,  and  nothing  will 
persuade  us  tliat  the  world  is  not  ready  for  an  ideal  for  which  we  are 
ready. 

Mr.  Sparkes  was  behind  the  London  guild  from  the  time  when  it 
was  first  proposed,  and  when  it  was  finally  organized  he  became  its 
general  manager  and  secretary.  A  stream  of  literature  came  from  his 
pen,  under  such  titles  as  The  Call  of  the  Guild  of  Builders,  and  An 
Industry  Cleared  for  Action,  the  pamphlet  noted  above.  Thousands 
of  building  trades  o])eratives  bought  copies  and  read  such  words  as  the 
following: 

The  great  trade  unions,  no  longer  defensive  and  resistive,  are  awakening 
to  a  new  eonception  of  their  funetions;  a  new  vision  of  creative  service, 
which  tlie  building  industry  of  Great  Britain  has  now  put  into  practical 
shape  in  the  form  of  the  new  Guild  of  Builders It  is  the  first  in- 
dustrial organization  in  history  that  is  set  up  to  give  service  rather  than  to 
get  it. 


1922]  Guild  Socialism:  A  Two  Years'  Test  231 

Mr.  Hobson's  tactics  were  contrastingly  militant.  Labor  must  be 
made  a  monopoly  and  become  the  "first,  not  the  last,  charge  on  industry. 
Mr.  Hobson  brought  to  guild  projects  a  seasoned  cosmopolitan  ex- 
perience gained  in  two  hemispheres.  Nothing  that  he  contributed  to 
the  guilds  was  worth  more,  however,  than  his  own  unshakable  faith  in 
the  soundness  of  the  venture.  No  less  than  Mr.  Sparkes,  he  is  at  heart 
an  idealist.  The  real  ends  of  the  two  groups  of  guilds  are  much  the 
same.  A  common  idealism,  a  common  faith  that  high  standards  of 
workmanship  can  become  the  property  of  the  ordinary  man,  and  a 
self-sacrificing  devotion  to  the  guild  movement  were  contributed  by 
the  two  leaders. 

At  the  annual  conference  of  the  National  Federation  of  Building 
Trades  Operatives  held  in  1920,  Mr.  Hobson  stated  that  there  were 
already  fifty  committees  affiliated  to  the  guild,  in  addition  to  the 
London  Guild  of  Builders.      The  following  resolution  was  passed  :*^ 

That  this  annual  conference  of  the  National  Federation  of  Building 
Trades  Operatives  observe  with  interest  the  advent  of  the  Building  Guild, 
and  regard  it  as  a  valuable  experiment  to  improve  the  conditions  and  status 
of  Building  Trades  Operatives,  and  as  the  position  develops  undertake  to 
consider  the  possibilities  of  establishing  the  movement  on  national  lines,  and 
further  suggest  to  the  local  guilds  that  in  their  constitutions  they  shall  make 
provision  for  such  contingency. 

Although  no  contracts  were  secured  for  several  months,  the  move- 
ment spread  with  great  rapidity.  Guild  committees  sprang  up  not 
only  in  Lancaster  but  also  in  other  parts  of  England  and  Wales. 
Some  of  these  found  the  attitude  of  the  local  authorities  so  discourag- 
ing that  no  practical  program  seemed  possible,  but  the  majority  con- 
tinued to  present  tenders  for  the  construction  of  houses  and  some  were 
successful  in  securing  private  work. 

The  financing  of  the  building  operations  was  made  possible  by  the 
willingness  of  the  Co-operative  Wholesale  Society  to  become  a  party 
to  the  plan.  In  the  first  schemes  the  local  authorities  were  counted  on 
to  provide  and  deliver  building  materials,  leaving  to  the  guilds  the  mo- 
bilization of  labor  and  the  control  of  actual  operations.  In  the  early 
conferences,  however,  it  developed  that  the  local  authorities  could  pro- 
vide no  guarantee  that  the  building  materials  would  be  delivered 
promptly  at  the  lowest  prices.  They  had  little  experience  in  buying 
and  no  organization  for  purchasing  to  meet  the  requirements.  Without 
such  a  guarantee  it  was  realized  that  the  whole  plan  would  be  imperiled. 

It  was  at  this  juncture  that  the  building  department  of  the  Co-opera- 
tive Wholesale  Society  and  the  Co-operative  Wholesale  Bank  came 
forward  with  the  offer  of  special  facilities  in  the  providing  of  materials 

*^Minutes  and  Notes  of  the  Annual  Conference  of  the  Federation  of  Building 
Trades  Operatives,  at  Scarborough,  August  19-21,  1920. 


232  Amy  Hewes  [June 

and  the  extension  of  credit.  The  Co-operative  Wholesale  Society  per- 
mitted the  guilds  to  overdraw  their  accounts  with  the  bank  to  about 
two  per  cent  of  the  amount  of  the  contracts.  The  guilds  were  thus 
enabled  to  acquire  the  necessary  plant  with  which  to  begin  operations. 
The  advantages  secured  in  this  way  were  unique.  With  the  single 
exception  of  the  government,  the  building  department  of  the  Co-opera- 
tive Wholesale  Society  is  the  largest  dealer  in  building  materials  in  the 
kingdom.  It  can  guarantee  deliveries  impossible  to  the  ordinary  con- 
tractor." Finally  the  Co-operative  Insurance  Society  agreed  to  insure 
the  performance  of  the  contract  with  a  liability  limited  to  one  fifth  of 
the  cost. 

Through  these  relations  with  the  Co-operative  Wholesale  Society  and 
through  the  contribution  of  its  vast  business  experience,  there  was 
given  a  practical  guarantee  to  the  experiment  which  transformed  it 
from  a  dream  into  a  serious  business  undertaking.  Mr.  Hobson  de- 
scribes the  significance  of  the  alliance  in  the  following  terms." 

The  arrangement  thus  reached  with  the  C.  W.  S.  marked  an  important 
and  vital  stage  in  the  history  of  the  Guild.  Whatever  theoretical  differ- 
ences there  may  be  between  Guild  and  Cooperative  principles,  it  is  certain 
that  the  Cooperative  leaders  saw  in  the  Guild  movement  a  practical  emana- 
tion of  working-class  spirit  comparable  only  to  their  own  activities  from  the 
days  of  the  Rochdale  Pioneers.  As  an  example  of  industrial  statesmanship, 
this  action  of  the  C.  W.  S.  stands  out  clear  and  massive  compared  with  the 
characteristic  niggling,  doubts,  and  hesitations  of  capitalistic  society.  In 
this  alliance,  amongst  other  possibilities,  we  may  discover  the  way  to  break 
the  rings  and  combines  that  now  so  remorselessly  hold  to  ransom  the  whole 
building  industry. 

Building  Operations 

A  new  chapter  opened  when  the  draft  form  of  contract  was  finally 
approved  by  the  Ministry  of  Health  in  September,  1920.  The  guilds 
were  now  ready  to  begin  public  work.  On  November  1,  1920,  in 
answer  to  questions  asked  in  the  House  of  Commons,  the  Minister  of 
Health  stated  that  eight  contracts  between  local  authorities  and  build- 
ing guilds,  providing  for  1,003  houses,  had  been  approved.  He  added  r"^ 

These  contracts  form  part  of  certain  experimental  proposals,  in  which 
the  guilds  take  the  contract  for  the  whole  work,  the  number  of  which  will 
be  limited  until  the  guild  system  has  been  shown  to  be  satisfactory. 

At  the  end  of  1920  the  contracts  accepted  and  sanctioned  by  the 
Ministry  of  Health  were  as  follows : 

"It   nevertheless   proved   desirable   in   some   cases   to  buy   materials   in   the   open 
market. 
**The  BuihUng  Guihh  The  Co-operative  Press  Agency,  Manchester   (1920). 
*^Housinff,  Nov.  22,  1920,  p.  152. 


1922]  Guild  Socialism:  A  Two  Years'  Test  233 

Building  Guild,  Ltd.,  Manchester 

Manchester  100  houses 

Worsley  261 

Bedwellty  100 

Tredegar  100 


Wigan 

135  houses 

Rotherham 

200 

Wilmslow 

100 

Halifax 

200 

jondon),  Ltd 

400 

houses 

190 

'• 

Walthamstow  U.  D.  C. 
Greenwich  Borough  Council 

The  appearance  of  formidable  opposition  is  often  a  reliable  gauge 
of  the  growing  strength  of  a  new  movement.  With  the  opening  of  1921 
the  building  guilds  could  claim  the  distinction  of  being  taken  seriously. 
In  the  early  weeks  of  their  existence  an  official  of  the  National  Federa- 
tion of  Building  Trade  Employers  prophesied  that,  given  a  long 
enough  rope,  the  guilds  would  hang  themselves ;  but  before  the  first 
year  was  over  the  Federation's  president,  Mr.  Stephen  Fasten,  express- 
ed his  apprehension  lest  the  guilds  should  "drive  ordinary  building  con- 
tractors out  of  the  field"  if  the  policy  of  the  Ministry  of  Health  in 
dealing  with  them  was  not  changed. 

The  first  blow  was  the  decision  of  the  Ministry  not  to  approve  fur- 
ther contracts  until  the  terms  were  changed.  This  was  right-about- 
face  on  the  part  of  the  government,  and  the  guilds  felt  it  to  be  a 
deliberate  move  to  deprive  them  of  a  chance  to  engage  in  house  building. 
They  made  vigorous  protests.  The  change  of  front  was  attributed 
directly  to  the  influence  of  the  master  builders.  The  advent  of  the 
guild  had  brought  a  reduction  in  the  tendered  prices  of  houses  and  this 
roused  the  hostility  of  all  other  contractors.  The  secretary  of  the 
Manchester  guild  claimed  that  it  was  building  houses  from  £150  to 
<£200  cheaper  than  the  master  builders. 

Mr.  Fasten  had  held  the  post  of  Honorary  Director  of  Building  Pro- 
duction under  the  Ministry,  as  well  as  the  office  of  President  of  the 
Builders'  Federation,  and  in  resigning  from  the  former  post  he  voiced 
the  opinion  of  his  fellow  members  in  the  Federation  that  the  terms  of 
the  guild  contract  were  unfair.  The  guild  contracts  included  a  grant 
of  <£40  per  house  to  cover  the  expenses  of  full-time  payment  ("con- 
tinous  pay")  to  the  workers  engaged  on  the  job.  This  <£40  had  been 
adopted  as  the  Ministry's  substitute  for  a  percentage  basis.  In  addi- 
tion, six  per  cent  was  allowed  the  guilds  for  plant  and  administrative 
expenses.  Mr.  Easten's  statements  tended  to  obscure  the  fact  that  the 
employer's  contracts  contained  the  same  provision  of  =£40  per  house 
but  left  undetermined  the  manner  in  which  it  should  be  spent.  It  con- 
stituted, of  course,  the  employer's  profit. 

In  reply  to  Mr.  Easten  the  two  forms  of  contracts  were  compared 


234  Aviy  Hexves  [June 

by  Mr,  Sparkcs  in  the  columns  of  the  Morning  Post    (January  10, 
1921 ): 

The  guild  receives  6  per  cent  on  the  estimated  cost,  and  out  of  this  it  has 
to  provide  for  the  whole  of  its  head-office  expenses,  including  all  salaries, 
and  also  for  the  necessary  plant  and  maintenance  properly  to  equip  the  job. 
There  is  no  figure  exactly  parallel  with  this  in  the  employer's  contracts. 
Light  plant  is  charged  at  £7  per  house,  heavy  plant  is  charged  at  2  per  cent 
per  month,  establishment  charges  are  1^2  pcr  cent,  and  all  maintenance  is 
charged  up  under  the  contract.  From  this  you  will  see  that  it  is  really 
impossible  to  say  which  of  the  two  forms  of  the  contract  is  better  from  the 
point  of  view  either  of  the  builder  or  of  the  building  owner.  One  serious 
misstatement  must  be  corrected  here.  The  guild  fee  of  6  per  cent  does  not 
increase  with  any  increase  in  cost.  Under  the  employer's  contract  the  con- 
tractor gets  a  share  of  any  saving  he  effects.  Under  the  guild  contract  the 
local  authority  gets  the  whole  of  the  savings  effected  by  the  guild. 

In  the  opinion  of  the  guild  leaders  a  compromise  on  the  fundamental 
principle  of  continuous  pay  was  a  step  which  would  be  fatal.  A 
guarantee  of  pay  for  bad  weather,  holidays,  and  a  short  vacation  was 
one  of  the  foundations  of  the  guild  program.  Convinced  that  the 
Ministry  of  Health  was  influenced  in  its  opposition  by  the  building 
contractors  who  feared  guild  competition,  the  building  guilds  adopted 
a  policy  of  no-compromise,  and  reconciled  themselves  as  best  they 
could  to  the  loss  of  their  opportunities  for  work  on  artisans'  houses 
under  community  auspices.  It  soon  became  necessary  to  recast  very 
thoroughly  the  plans  for  guild  work.  The  entire  policy  of  the  Ministry 
of  Health  was  so  changed  as  to  make  altogether  improbable  the  carry- 
ing out  of  the  national  housing  program  on  anything  like  the  extensive 
scale  on  which  it  had  been  projected.  The  guilds  sought  repair  work 
and  houses  for  private  purchasers  as  a  necessit3\ 

Perhaps  the  withdrawal  of  the  promising  opportunity  for  public 
work  expedited  the  closing  of  the  guild  ranks  for  a  united  drive  for- 
ward. In  July,  1921,  the  same  month  in  which  the  government  an- 
nounced its  abandonment  of  the  housing  subsidies,  a  National  Building 
Guild  was  formed.  A  joint  Reconstruction  Committee  met  in  Man- 
chester and  resolved :  "that  the  Building  Guild  Limited  and  the  Guild 
of  Builders  (London)  Limited  be  herewith  amalgamated."  Under  the 
new  organization  building  work  of  every  description  was  undertaken. 
Two  forms  of  contract  were  offered  to  customers :  according  to  the 
first,  the  customer  pays  actual  cost  plus  a  fixed  fee  for  guild  service 
and  gets  the  benefit  of  any  saving  effected  by  guild  organization ; 
according  to  the  second,  the  guild  guarantees  that  the  price  will  not 
exceed  a  stated  maximum,  but  shares  with  the  customer  any  saving 
made  on  a  fifty-fifty  basis,  the  guild's  share  of  which  goes  to  the  guild 
contingency  fund. 

On  December  15,  1921,  a  new  monthly  organ,  The  Building  Guilds- 


1922]  Guild  Socialism:  A  Two  Years"  Test  235 

man,  appeared.  It  is  edited  from  Manchester  for  the  National  Build- 
ing Guild  and  devoted  to  discussion  of  the  policies  and  practical  prob- 
lems of  the  Guild.  The  first  number  announced  the  undertaking  of  a 
loan  of  £150,000  from  guild  members  and  sympathizers — money  needed 
"not  because  we  have  failed  but  because  we  have  succeeded." 

It  seemed  evident,  however,  that  the  success  achieved  was  of  a  sober- 
ing kind.  With  it  came  a  realization  of  the  difficulties  both  within  and 
without.  In  the  first  number  of  Tlie  Building  Guildsman  ]\Ir.  Hobson 
wrote : 

We  cannot  stand  alone ;  other  industries  must  follow  our  example  or  our 
task  may  become  impossible.  A  democratic  experiment  in  industry  sur- 
rounded by  capitalism  is  a  tremendous  adventure.  Two  years  ago  the 
building  operatives  of  Manchester  determined  to  buy.      The  rest  is  history. 

A  part  of  that  history  is  summed  up  in  the  announcement  of  con- 
tracts in  excess  of  £2,000,000  in  December,  1921,  and  receipts  in  cash 
for  work  done  and  material  supplied  amounting  to  £600,000.  There 
was  also  reason  for  genuine  and  justifiable  satisfaction  in  the  reports 
of  large  savings  effected  in  the  construction  of  guild  houses  completed 
at  Bentley,  Walthamstow,  and  Wigan.  An  American  builder  testified 
to  the  fact  that  the  guild  workmen  were  doing  a  better  day's  work  in 
the  summer  of  1921  that  most  of  the  men  on  private  builders'  con- 
tracts.^ 

With  this  substantial  evidence  that  the  guild  had  taken  its  place  as 
a  going  concern  came  very  naturally  the  realization  of  practical  diffi- 
culties of  administration.  Important  among  these  at  the  beginning 
of  1922  was  the  need  for  agreement  upon  a  definite  sphere  of  action 
for  the  works  committees.  These  committees,  formed  on  a  basis  of 
section  and  craft  representation,  sprang  into  existence  and  took  part 
in  actual  operations.  With  no  place  provided  for  them  in  the  national 
constitution,  they  were  at  first  limited  to  such  functions  as  the  care 
for  canteen  arrangements,  sick  benefits,  and  sports,  but  they  pressed 
for  more  important  administrative  opportunity  and  insisted  that  it 
belonged  to  them  by  right  of  the  guild  principle  of  control  at  the 
point  of  production.  They  recommended  a  definition  of  function  which 
should  give  over  to  them  the  adjustment  of  grievances  and,  together 
with  the  general  foreman,  the  right  to  discuss  and  decide  upon  the 
methods  of  discipline,  time  keeping,  conditions  of  work,  and  mainte- 
nance of  good  fellowship.  They  also  sought  representation  on  the 
guild  committee. 

Another  administrative  problem  arose  in  the  question  of  trade  union 
jurisdiction.  Trade  union  rules  gave  prominence  to  craft  representa- 
tion, yet  it  was  urged  as  the  duty  of  a  works  committee  "to  stamp  out 
craft  prejudice  and  strive  for  a  'One  and  All'  movement."     Instances 

*A.  M.  Bing,  "The  Building  Guilds,"  Survey,  Oct.  29,  1921,  p.  170. 


236  Amy  Hewes  [June 

were  reported  "where  the  guild  committee  and  the  works  committee 
were  at  a  deadlock  pending  the  decision  of  the  trade  union,"  and  this 
notwithstanding  the  fact  that  the  Building  Guild  is  a  trade  union  body 
throughout  its  entire  structure.  Difficulties  of  this  kind  are  not  new 
in  trade  union  history,  but  their  continuance  might  easily  imperil  the 
success  of  the  building  guilds. 

The  Building  Guild  extended  all  possible  help  and  encouragement 
to  the  furniture,  packing-case,  and  vehicle  guilds  which  were  established 
in  Manchester  early  in  1921.  By  the  end  of  the  year  the  London 
guild  was  engaged  in  building  a  house  "planned  entirely  by  guildsmen 
and  carried  through  by  members  of  the  guild."  It  had  secured  the 
site  and  completed  plans  for  a  first-class  joinery  works  at  Paddington 
for  the  manufacture  of  all  kinds  of  woodwork  and  was  looking  forward 
hopefully  to  the  opening  of  its  own  factories  as  marking  a  real  re- 
vival in  craftsmanship.  The  autumn  of  1921  also  saw  the  extension 
of  the  building  guild  movement  to  Ireland  and  its  endorsement  by  AE 
(George  Russell)  who  wrote: 

I  hasten  to  express  my  delight  at  hearing  that  unions  connected  with  the 
building  trade  in  Ireland  are  uniting  to  form  a  Guild  of  Builders.  For 
many  years  I  liave  thought  the  emancipation  of  labour  could  be  brought 
about  most  speedily  by  workers  transforming  their  unions  into  cooperative 
productive  societies,  or  guilds  of  workers,  undertaking  as  unions  the  con- 
tracts hitherto  monopolized  by  the  capitalist  exploiter  of  labour.*' 

Two  years  of  difficult  traveling  have  been  weathered  by  the  building 
guilds  and  the  third  begun  with  unshaken  confidence  and  a  determina- 
tion to  triumph  over  the  old  obstacles  which  are  undeniably  still  block- 
ing the  way  but  which  are  now  more  clearly  seen  and  understood. 

The  Outlook 

It  is  difficult  to  estimate  the  potential  importance  of  the  building 
guilds  of  today.  They  have  succeeded  in  establishing  some  of  their 
principal  contentions  in  the  face  of  great  opposition.  When  the  very 
existence  of  the  guilds  was  threatened  in  January,  1921,  by  the 
government's  refusal  to  grant  further  contracts,  they  adhered  to  their 
principle  of  continuous  pay  and  proved  that  it  was  practicable  for  the 
building  industry.  The  guilds  have  established  their  contention  that 
they  can  build  more  cheaply  than  private  builders.  Impartial  ob- 
servers have  testified  to  the  fact  that  guild  workmen  render  a  better 
day's  work  than  others  on  the  same  jobs.  Financial  soundness  has 
been  adequate  to  gain  the  confidence  of  the  Co-operative  Wholesale 
Society  as  a  seller  of  materials  and  as  an  insurance  agency.  Loyalty 
and  a  high  grade  of  workmanship  have  been  obtained.  Finally,  the 
movement  has  spread  widely  during  the  two  years  of  agitation. 
*'Quoted  from  the  "Voice  of  Labour"  in  the  Guild  Socialist,  Nov.,  1921,  p.  8. 


1922]  Guild  Socialism:  A  Two  Years'  Test  237 

The  building  guilds  must  now  prove  their  ability  to  withstand  the 
ups  and  downs  of  business  affairs.  The}'  have  made  their  beginnings 
under  exceptionally  favorable  circumstances.  The  building  industry 
itself  offered  a  good  opportunity  for  experiment,  for  only  a  small 
amount  of  capital  is  required  to  begin  operations  and  the  enterprises 
have  a  semi-public  character.  It  would  be  difficult  for  the  opposition 
to  bring  about  a  concerted  hold-up  of  building  materials.  It  happened 
that  the  whole  industrial  situation  as  well  favored  the  building  guilds. 
They  began  their  work  when  general  efficiency  was  low.  Possibly  they 
may  not  compare  so  well  with  private  workmen  in  other  times.  In  the 
second  place,  the  demand  for  houses  was  pressing  and  there  was  little 
fear  of  unemployment.  When  the  building  situation  is  less  acute, 
the  guild  workers  who  are  not  needed  or  who  are  among  the  less  effi- 
cient will  undoubtedly  be  loath  to  give  up  their  work ;  and  yet,  if  they 
retain  it,  costs  will  rise  and  the  competitive  situation  of  the  building 
guilds  will  be  injured.  The  question  of  adequate  training  for  manage- 
ment and  administration  is  yet  to  be  solved. 

Mr.  Hobson  sees  the  questions  of  the  immediate  future  as  those  of 
credit.  In  his  article  in  the  Guild  Socialist  for  December,  1921,  he 
says  : 

I  venture  a  prediction.  Within  the  next  twelve  months,  the  workers  will 
realize  that  the  money  and  credit  required  must  be  extracted  from  sources 
other  than  ordinary  wage-savings.  Where,  then,  must  we  look?  In  my 
opinion  there  are  two  sources  that  can  be  tapped— insurance  and  rent  con- 
trol. There  we  can  find  our  millions,  and  it  is  an  easier  adventure  than 
the  foundation  of  the  Building  Guild.  The  deliberate  movement  for  control 
implies  a  new  labour  orientation,  the  first  stage  being  conscious  class  con- 
solidation in  industry  and  credit. 

Meanwhile  guild  theorists  seem  to  be  marking  time.  In  these  two 
years  the  only  significant  contribution  has  been  the  Douglas  credit 
proposals.  Once  again  the  intellectualists  have  languished  in  leader- 
ship and  the  advances  are  left  to  explorers  in  the  field  of  actual  pro- 
duction and  its  everyday  business  relations. 

Amy  Hewes. 

Mount  HolyoTce  College. 


WHAT  DETERMINES  THE  VOLUiAlE  OF  A  COUNTRY'S 
INTERNATIONAL  TRADE 

The  purpose  of  this  article  is  to  analyze  the  influences  which  govern 
the  volume  of  the  merchandise  exports  and  imports  of  a  country.  The 
elements  of  the  theoretical  reasoning  which  is  used  have  long  been 
familiar  to  students.  In  the  course  of  the  article,  the  effect  upon  the 
volume  of  merchandise  trade  produced  by  other  international  trans- 
actions, such  as  security  sales,  immigrant  remittances  and  the  like, 
will  be  left  out  of  consideration ;  it  will  be  assumed  that  none  such  take 
place.  That  is  permissible  because  the  manner  in  which  they  com- 
plicate the  results  is  well  understood. 

In  order  to  get  a  correct  light  on  the  problem,  it  is  necessary  to 
restate  some  well-established  first  principles.  In  illustration  we  will 
use  two  such  countries  as  economists  conjure  up  in  preference  to  deal- 
ing with  existing  countries.  For  arbitrar}^  conditions  must  sometimes 
be  introduced  to  simplify  the  reasoning,  and  that  is  best  done  with 
imaginary  examples.  Then  too  only  those  instances  will  carry  us 
further  which  settle  one  quarrel  without  opening  another.  Let  us 
then  imagine  two  countries,  country  A  and  country  B  ;  let  us  suppose 
that  they  are  on  a  gold  standard  basis.  Furthermore,  the  expense 
of  transportation  from  one  country  to  another  may  be  regarded  as  an 
expense  of  production  in  the  country  of  origin.  The  merchants  of 
country  A  and  country  B  meet  for  the  first  time.  Upon  comparing 
their  wares  it  turns  out  that  the  merchants  of  B  can  quote  lower  prices 
than  the  merchants  of  A  for  wine  and  cloth.  The  merchants  of  A 
cannot  quote  lower  prices  than  those  of  B  on  any  commodities.  A  will 
import  both  wine  and  cloth.  Since  payment  is  not  made  in  commodi- 
ties, gold  would  flow  out  of  A  into  B.  This  flow  of  gold,  if  steadily 
continued  under  the  conditions  outlined,  would  in  time  be  likely  to 
produce  an  upward  movement  of  income  and  price  levels  in  B,  and  down- 
ward movement  in  A.  In  the  course  of  these  changes  the  prices  of  wine 
and  cloth  would  rise  in  B.  This  would  continue,  let  us  say,  until  the 
price  the  merchants  of  B  can  make  for  cloth  rises  above  the  price  which 
the  merchants  of  A  make  for  the  same  product,  the  merchants  of  B 
being  still  able  to  quote  lower  prices  for  wine.  A  would  begin  to  export 
cloth  instead  of  importing  it.  When  the  value  of  the  cloth  exported 
by  A  equalled  the  value  of  the  wine  imported  by  her,  gold  movement 
would  cease. 

In  the  language  long  applied  to  the  subject,  a  balance  of  inter- 
national merchandise  payments  will  have  been  struck.  B  would  be 
exporting  the  commodity  in  which  she  possessed  the  greatest  compara- 
tive advantage,  which  is  a  way  of  saying  that  B  Avould  be  exporting 
wine  to  A  because  the  diflerencc  of  eff"ectiveness  between  B  and  A  was 


1922]  Volume  of  a  Country's  International  Trade  239 

greater  in  the  production  of  wine  than  in  the  production  of  any  other 
commodit3\  B  had  more  decided  advantage  over  A  in  wine  production 
than  in  any  other  direction.  A  would  be  exporting  the  connnodity — 
cloth — in  which  she  had  the  smallest  comparative  disadvantage.  The 
generalization  that  may  be  made  from  this  instance  is  that  the  long 
continued  course  of  international  trade  brings  about  an  endless  series 
of  comparisons  between  the  effectiveness  of  each  and  every  country  in 
the  production  of  all  commodities.  Those  commodities  are  exported 
by  each  which  come  out  relatively  best  in  this  series  of  comparisons. 
Another  feature  of  the  situation,  as  Taussig  has  emphasized,  is  that 
each  country  will  be  exporting  those  commodities  which  are  low  in 
price  within  her  borders  as  compared  with  the  price  of  the  same  com- 
modities in  the  other  countries.' 

So  much  for  first  principles.  Let  us  turn  to  our  illustration  and 
seek  to  analyze  the  conditions  which  determine  whether  a  large  or  a 
small  volume  of  commodities  is  exchanged  between  A  and  B.  The  first 
general  conclusion  that  may  be  stated  is  as  follows :  that  any  cause 
which  operates  to  increase  the  effectiveness  of  production  of  the  export 
industries  in  any  country,  as  compared  with  the  effectiveness  in  the 
other  industries  in  the  same  country,  will  increase  the  volume  of  trade 
between  countries,  and  vice  versa. 

The  soundness  of  this  conclusion  may  be  established  by  consideration 
of  the  illustration  just  used.  Let  us  look  at  the  matter  from  the  point 
of  view  of  B,  and  study  the  effects  of  some  cause  which  operates  to 
increase  the  effectiveness  of  production  in  B's  export  industries,  as 
contrasted  with  the  rest  of  B's  industries.  Assume,  for  example,  that 
there  is  a  falling  off  in  effectiveness  of  all  kinds  of  labor  required  in 
many  industries  in  B,  while  it  remains  the  same  in  the  industries  in 
which  B  already  has  the  great  comparative  advantage  (her  export  in- 
dustries). Because  of  the  fall  in  effectiveness  of  labor  in  a  consider- 
able range  of  industries,  one  of  two  series  of  events  will  take  place. 

Money  incomes  may  remain  the  same  despite  the  fact  that  fewer 
commodities  than  before  are  now  being  produced  with  the  same  labor 
in  many  industries.  In  that  case  prices  in  all  these  industries  (the 
non-exporting)  will  rise.  Or,  if  prices  in  these  industries  do  not  rise, 
money  incomes  throughout  the  country  will  fall  because  of  the  decrease 
in  the  effectiveness  of  production  over  a  wide  range  of  industries.  If 
the  first  chain  of  events  occurs — that  is,  if  prices  in  the  non-exporting 
industries  rise — fewer  of  their  products  will  be  demanded  than  before 
and  more  imported  commodities  will  be  demanded,  since  their  prices 
have  remained  unchanged.  There  would  probably  also  be  an  increased 
demand  at  home  for  the  products  of  the  export  industries,  since  their 
prices  are  likewise  unchanged.   But  that  fact  may  be  disregarded  on  the 

^Cf.  Taussig,  Some  Aspects  of  the  Tariff  Question,  ch.  1. 


240  Herbert  Feis  [June 

supposition  of  constant  cost.  With  the  rise  in  price  of  many  domestic 
commodities  and  steadiness  in  price  of  the  imports,  there  will  be  some 
transfer  of  demand  to  the  imports.  How  great  the  transfer  of  demand 
will  be  will  depend  upon  the  extent  of  the  rise  in  the  prices  of  the  non- 
exporting  industries  in  B.  The  growth  in  the  volume  of  imports  will, 
if  the  accepted  theory  of  international  trade  is  correct,  tend  to  produce 
an  increase  in  the  volume  of  exports. 

The  outcome  will  be  the  same  if  the  second  possible  chain  of  events 
takes  place — that  is,  if  we  reason  on  the  supposition  that  the  prices  in 
the  non-exporting  industries  in  B  remain  the  same  as  before  the  fall  in 
effectiveness,  while  money  incomes  fall.  For  in  that  case  expenses  of 
production  in  the  export  industries  would  decrease,  since  their  effective- 
ness has  remained  unchanged.  And  this  fall  in  the  expense  of  pro- 
duction would  tend  to  cause  a  lowering  of  the  prices  of  their  products, 
which  in  turn  would  mean  that  more  of  their  products  would  be  demand- 
ed by  other  countries.  In  either  event  it  seems  clear  that  the  enlarging 
of  the  difference  of  effectiveness  between  those  industries  already  pos- 
sessing the  greatest  comparative  advantage  (the  export  industries) 
and  the  other  industries  within  the  country  will  result  in  an  increase  in 
the  country's  merchandise  exports  and  imports.  The  opposite  will 
result  from  the  opposite  change. 

If  this  conclusion  is  sound,  a  country  in  which  a  few  important  in- 
dustries possessed  unusual  advantages  in  production  as  compared, 
firstly,  with  the  advantages  of  the  rest  of  the  world  in  the  same  direction 
and,  secondly,  with  the  other  industries  within  the  country,  should 
carry  on  a  heavy  import  and  export  commerce.  Certain  tropical 
countries  are  probably  in  that  condition.  They  are  endowed  by  nature 
with  certain  natural  resources,  which  enable  them  to  excel  the  world 
greatly  in  the  production  of  a  few  commodities.  On  the  other  hand, 
the  effectiveness  of  production  in  general  in  those  countries  is  low. 
Thus  real  wages  and  also  money  wages  in  those  countries  are  very  low, 
and  form  only  a  comparatively  small  obstacle  of  expense  to  the  export 
industries,  which  can  therefore  offer  their  products  at  low  price.  The 
volume  of  such  a  country's  exports  and  imports  will  be  greater  than 
it  would  be  if  the  conditions  described  were  not  present.  In  this  re- 
spect a  country  like  the  United  States  is  in  the  opposite  position.  Here 
labor  is  applied  effectively  in  a  great  many  fields.  There  is  probably 
no  great  difference  of  effectiveness  between  labor  in  the  export  industries 
and  in  many  other  industries.  As  a  result  the  difference  in  compara- 
tive advantage  between  the  export  industries  and  other  industries  is 
smaller  than  it  would  be  otherwise. 

This  influence  upon  the  volume  of  international  trade  of  a  country 
may  be  summarized  by  saying  that  the  volume  will  be  the  greater,  the 
more  unique  and  decided  the  advantages  possessed  by  export  industries 


1922]  Volume  of  a  Country's  International  Trade  241 

(those  which  have  the  greatest  comparative  advantage,  or  smallest  dis- 
advantage) in  each  and  any  country  over  all  other  industries  in  the 
same  country. 

There  is  one  point  in  particular  at  which  the  correctness  of  the  pre- 
ceding analysis  may  seem  open  to  question.  It  has  been  assumed  that 
the  demand  for  imported  commodities  is  equally  urgent  with  the  demand 
for  the  commodities  produced  within  the  country.  I  know  of  no  way 
of  putting  this  assumption  concerning  demand  more  satisfactorily  by 
the  use  of  more  technical  terms.  What  is  meant  is  that  it  has  been 
assumed  that  the  imported  commodities  occupy  as  important  a  place 
in  the  consumption  habits  of  the  community  as  the  domestic  ones ;  and, 
thus,  that  any  change  in  their  relative  prices  would  result  in  a  transfer 
of  purchasing  power  to  those  which  had  become  relatively  the  cheaper. 
This  supposition  was  made  when  it  was  reasoned  that,  if  the  prices  of 
the  commodities  produced  by  the  non-exporting  industries  in  B  rose 
while  the  price  of  imported  commodities  remained  the  same,  a  transfer 
of  demand  to  the  imported  commodities  would  result  and  the  value  of 
B's  imports  would  increase.  So  also  it  was  made  in  reasoning  about 
the  second  possible  course  of  events. 

No  such  result  would  take  place  if  the  demand  within  the  country 
for  domestic  commodities  was  much  more  urgent  than  that  for  the 
imports — if  the  purchase  of  domestic  commodities  would  fall  off  but 
little  or  not  at  all  as  a  result  of  an  increase  in  their  price.  For  under 
such  circumstances  the  rise  in  the  price  of  domestic  commodities,  even 
though  it  led  to  some  decrease  in  the  consumption  of  them,  might  mean 
that  more  purchasing  power  was  spent  upon  them  than  before.  In 
this  case  less  could  be  spent  for  imported  commodities  than  before.  Such 
would  be  the  fact  if  the  commodities  produced  within  the  country  were, 
in  general,  necessities  either  of  life  or  industry,  while  those  which  were 
imported  were  not.  On  the  other  hand,  if  the  demand  for  domestic 
commodities  was  not  as  urgent  as  that  for  imports,  a  more  marked 
transfer  of  demand  to  imports  than  would  otherwise  occur  would  take 
place.  Such  would  be  the  fact  if  the  domestic  commodities  were  on 
the  whole  not  essentials  of  life  or  industry,  and  the  imports  were. 

It  is  plain  that  the  relative  strength  of  demand  for  the  products  of 
domestic  industries  and  for  imported  commodities  is  a  factor  in  deter- 
mining whether  the  volume  of  international  trade  carried  on  by  a  coun- 
try is  large  or  small.  The  influence  may  be  expressed  as  follows :  that  the 
more  strong  and  insistent  the  demand  of  each  and  every  country  for 
foreign  products  as  compared  with  the  demand  in  the  same  country 
for  the  products  of  its  own  industries,  the  larger  the  volume  of  imports 
and  exports  of  any  country  will  be. 

The  significance  of  this  factor  of  relative  demand  can  be  seen  in  still 
another  way  by  turning  again  to  our  illustration.     Countries  A  and  B 


242  Herbert  Feis  [June 

are  trading  with  each  other.  A  is  exporting  cloth  to  B,  and  is  import- 
ing wine  from  B.  A  balance  of  international  payments  has  arisen — 
the  value  of  the  cloth  exported  by  A  being  equal  to  that  of  the  wine 
imported  by  her.  Let  us  again  take  the  point  of  interest  of  country  B, 
and  assume  that  a  change  takes  place  in  B  which  greatly  increases  the 
strength  of  demand  on  the  part  of  B's  inhabitants  for  the  products  of 
domestic  industries  as  compared  with  the  strength  of  their  demand  for 
cloth  from  A.  Imagine,  for  example,  that  a  new  resource,  coal,  was 
discovered  in  B,  and  that  this  filled  an  important  want.  Imagine,  fur- 
ther, that  at  the  price  at  which  it  could  be  produced  a  considerable 
volume  of  it  is  bought ;  in  other  words,  that  its  discovery  has  led  to  a 
new  and  powerful  demand  for  a  home  product.  For  the  sake  of  clear- 
ness, add  that  A  has  no  use  for  coal  and  that  thus  it  would  not  become 
an  export,  and  disregard  furthermore,  its  possible  revolutionary  effect 
upon  industry. 

The  result  of  the  change  in  relative  demand — the  fact  that  the  new 
and  important  demand  for  a  home  product  had  arisen — would  be  to 
bring  about  a  reduction  of  B's  exports  and  imports  for  two  reasons. 
First,  the  new  demand  for  coal  would  lead  to  some  reduction  in  demand 
for  other  commodities.  The  demand  for  imported  goods  among  others 
would  be  reduced,  it  is  safe  to  reason.  Secondly,  the  new  industry 
would  compete  with  those  already  established  in  B,  including  the  export 
industries,  for  the  use  of  the  available  supply  of  the  agents  of  pro- 
duction. If  production  was  carried  on  in  coal-mining  with  greater 
effectiveness  than  in  some  of  the  other  industries,  a  rise  in  money 
incomes  would  tend  to  result.  This  would  form  a  fresh  obstacle  to  the 
export  industries,  and  the  prices  of  their  commodities  would  tend  to 
rise.     The  result  would  be  a  decrease  in  the  volume  of  exports.^ 

The  opposite  case  may  be  illustrated  more  briefly.  Let  us  assume 
that,  because  of  a  change  in  consumption  habits,  B's  demand  for  cloth 
increased  while  it  remained  unchanged  in  other  respects.  More  cloth 
would  be  imported  at  the  same  price.  The  familiar  reasoning  on  the 
subject  concludes  that  an  increase  in  B's  exports  would  tend  to  result. 
The  cause  of  the  change  would  be  the  change  in  the  relative  demand  of 
B's  inhabitants  for  home  products  and  imported  products. 

The  part  played  by  this  factor  of  relative  demand  upon  the  volume 
of  a  country's  exports  and  imports  has,  indeed,  always  been  recognized 
in  the  reasoning  on  the  subject.  It  helps  to  explain,  for  example,  why 
a  small  country,  such  as  Switzerland,  is  likely  to  conduct  a  large  inter- 
national trade.  The  resources  of  a  small  country  are  almost  in- 
variably limited  in  variety.  Many  of  the  things  it  desires  most  it  is 
unable  to  produce  at  all.     The  relative  strength  of  its  demand   for 

'This  conclusion  is  based  on  the  assumption  that  demand  in  A  for  the  products 
of  home  industries  is  as  urgent  as  the  demand  for  the  commodities  imported  from  B. 


1922]  Volume  of  a  Country^s  International  Trade  243 

foreign  products  is  great ;  the  volume  of  its  imports  large,  its  exports 
correspondingly  so.  In  this  respect  a  country  like  the  United  States 
is  in  the  opposite  position.  Its  great  area,  variety  of  natural  re- 
sources, and  industrial  and  commercial  adaptability  enable  it  to  pro- 
duce a  far  greater  number  of  essential  products  than  most  countries. 
The  factor  of  comparative  advantage,  as  briefly  explained  at  the  be- 
ginning of  this  article,  may  bring  about  that  it  imports  many  of  them. 
For  all  that,  the  great  variety  and  expanse  of  our  resources  does  ex- 
plain why  our  demand  for  foreign  products  is  not  stronger  than  it  is. 
If,  for  example,  all  the  coal  resources  of  the  North  American  continent 
lay  on  the  other  side  of  the  Canadian  border,  our  demand  for  foreign 
products  as  compared  wth  that  for  our  own  would  be  stronger  than  it 
is  now,  and  the  volume  of  American  imports  and  exports  greater.  These 
statements  are  entirely  in  accord  with  the  common  observation  that  any 
country  which  is  dependent  upon  others  for  such  important  products 
as  coal,  iron  ore,  grain,  oil,  and  the  like  must  and  does  carry  on  a 
considerable  volume  of  foreign  trade.  From  the  point  of  view  of  any 
one  country  it  can  be  said  that  its  merchandise  exports  and  imports  will 
be  great  provided  it  is  dependent  upon  other  countries  for  products 
of  great  importance  either  to  the  life  of  its  inhabitants  or  to  the  exis- 
tence of  its  industry.  Likewise  they  will  be  great,  provided  other 
countries  are  dependent  upon  it  for  commodities  of  this  nature. 

This  conclusion  becomes  self-evident  after  short  reflection.  If  all 
parts  of  the  world  were  substantially  alike — if  all  races  of  men  were 
of  the  same  character  and  had  the  same  faculties,  and  if  all  countries 
had  the  same  natural  resources — no  exchange  would  take  place  between 
the  separated  places  in  the  world.  For  in  no  country  would  there  be  a 
demand  for  the  product  of  others.  But  the  differences  in  men's  abili- 
ties and  character  and  the  natural  differences  between  parts  of  the 
globe  bring  it  about  that  each  country  desires  greatly  many  products 
of  others. 

One  other  important  influence  upon  the  volume  of  the  export  and 
import  trade  of  a  country  remains  to  be  considered.  Up  to  the  present 
our  reasoning  has  simply  taken  as  given  the  general  level  of  effectiveness 
in  production  of  the  countries  of  the  globe — of  countries  A  and  B  in 
our  illustration.  But  the  volume  of  export  and  import  trade  is  greatly 
affected  by  this  element.  To  phrase  the  matter  in  terms  of  the  illustra- 
tion, the  volume  of  the  commodity  exports  and  imports  between  A  and 
B  will  vary  directly  with  the  level  of  effectiveness  that  characterizes 
production  in  either  country,  and  so  of  both  countries.  The  correct- 
ness of  this  conclusion  can  be  readily  demonstrated. 

Assume  that  as  a  result  of  war  all  industry  is  disorganized  in  B, 
much  capital  destroyed,  and  many  able  workmen  killed.  Assume  that 
previous  to  this  calamity  a  balance  of  international  payments  between 


244  Herbert  Feis  [June 

A  and  B  had  been  struck,  that  the  war  did  not  produce  any  change  in 
the  consumption  or  industrial  habits  of  the  people  of  either  country, 
and  that  they  still  desire  each  other's  products  as  keenly  as  before. 
Nevertheless,  the  volume  of  goods  exchanged  would  be  less  than  before 
the  war.  For  the  great  fall  in  effectiveness  of  production  in  B  would 
produce  a  fall  in  real  incomes  in  B.  The  people  of  B,  although  they 
desired  as  much  of  A's  products  as  before,  could  not  buy  as  much.  For, 
due  to  the  decrease  in  their  incomes,  they  could  buy  fewer  of  all  com- 
modities, imported  commodities  included.  The  result,  leaving  all  possi- 
ble complicating  influences  out  of  consideration,  would  be  a  decline  in 
imports,  which  gradually  would  bring  about  a  decline  in  exports. 

The  significance  of  this  conclusion  need  hardly  be  emphasized  at  the 
present  time,  when  certain  of  the  nations  of  the  world  which  are  in  the 
most  dire  need  can  import  little,  while  in  certain  others  there  is  un- 
employment in  the  former  export  industries.  The  situation  is  directly 
due  to  the  fact  that  in  the  present  state  of  European  economic,  finan- 
cial, and  political  disorganization,  European  labor  and  capital  suc- 
ceed in  producing  little  in  any  of  their  applications.  The  people  of 
Europe  find  all  commodities  dear,  because  their  labor  yields  them  but 
little ;  they  thus  can  buy  few  imports.  And  as  a  result  American  and 
English  export  industries  find  themselves  unable  to  secure  a  market  for 
all  their  products.  The  exchange  situation  which  is  usually  referred  to 
as  the  chief  explanation  of  this  situation  is  but  a  secondary  phase  in  it, 
and  one  that  would  remedy  itself  (I  do  not  mean  to  imply  that  neces- 
sarily it  should  be  left  to  do  so)  if  European  industry  again  attained 
its  former  producing  powers. 

The  bearing  of  the  foregoing  upon  the  question  we  set  out  to  con- 
sider may  be  summarized  as  follows :  All  other  things  being  the  same, 
the  volume  of  export  trade  carried  on  by  any  country  will  be  the  great- 
er, the  more  productive  all  industry  is  within  its  borders,  and  in  every 
other  country,  and  vice  versa.  The  volume  of  international  trade  of 
any  one  country  will  tend  to  be  great  if,  in  all  or  almost  all  countries 
of  the  world,  effort  results  in  a  great  quantity  of  economic  goods.  A 
sort  of  economic  interdependence  between  all  countries  of  the  world  is 
implied  in  this  fact.  In  much  recent  writing  the  nature  of  this  inter- 
dependence has  been  carelessly  portrayed ;  in  spite  of  the  indication  of 
it  yielded  by  the  preceding  analysis,  it  is  not  as  simple  as  is  often 
made  out.  Its  significance  for  different  countries  varies.  It  is  great- 
est for  those  in  which  the  export  industries  employ  a  large  part  of  the 
country's  labor,  and  which  are  dependent  upon  other  countries  for 
many  essential  products.  For  these  countries  naturally  suffer  most 
from  a  destruction  of  international  trade.  This  subject,  however,  is 
too  great  and  important  to  permit  incidental  generalization. 

One  closing  reflection  is  justified  by  the  nature  of  the  forces  which. 


1922]  Volume  of  a  Country's  International  Trade  245 

we  have  seen,  tend  to  govern  the  volume  of  a  country's  export  and 
import  trade ;  that  is,  how  limited  is  the  extent  to  which  any  one  nation 
can  control  that  volume.  A  multitude  of  conditions  completely  out  of 
its  grasp  may  have  a  more  potent  effect  than  all  its  carefully  planned 
campaigns. 

Herbert  Feis. 
University  of  Kansas. 


GERMAN  WAR  FINANCE— A  REVIEW 

Note:  This  article  is  based  upon  Les  Finances  de  Ouerre  de  I'Allemagne,  by 
Charles  Rist,  Professeur  a  la  Faculte  de  Droit  de  Paris.  (Paris:  Payot  &  Cie. 
1921.  Pp.  294.  15  fr.)  Page  references  in  parentheses,  unless  otherwise  designated, 
refer  to  this  volume. 

No  record  of  modern  warfare  is  complete  without  an  account  of  the 
part  played  by  finance.  Indeed,  the  whole  complicated  machine  rests 
upon  finance.  It  is  by  finance  that  the  resources  and  energies  of  a 
nation  are  diverted  from  their  normal  channels  and  directed  to  the 
purposes  of  war.  Never  has  this  principle  been  so  fully  recognized 
and  so  consciously  applied  as  by  the  Germans  in  the  World  War.  In 
their  careful  preparation  for  war,  finance  was  not  overlooked.  In  the 
conduct  of  the  war,  financial  successes  were  achieved  and  financial  re- 
verses suffered  no  less  significant  than  those  in  the  military  field.  And 
in  the  final  disaster,  financial  collapse  went  hand-in-hand  with  military 
defeat.  Certain  financial  achievements  of  the  Germans  must  be  ac- 
knowledged as  nothing  less  than  works  of  genius.  On  the  other  hand, 
financial  blunders  were  made  which  at  first  sight  are  all  but  unbelievable. 
The  record  of  Germany's  war  finance  need  only  be  properly  written  to 
furnish  a  story  of  profound  significance  and  surpassing  interest. 

To  say  that  Professor  Rist  has  given  us  such  a  record  is  no  exag- 
geration. That  we  have  it  thus  early  is  especial  matter  for  congratu- 
lation. The  book  has  been  written,  not  for  the  professional  expert,  but 
for  the  general  reader.  The  discussion  is  simple  and  non-technical.  It 
is  based  on  original  German  sources,  handled  with  scientific  judgment 
and  calm  impartiality. 

In  the  opinion  of  the  reviewer,  the  best  way  to  appraise  this  book  is 
to  make  it  the  basis  of  a  brief  account  of  the  war  finance  of  Germany. 
This  account  will  properly  begin  with  an  analysis  of  Germany's  borrow- 
ing operations. 

Scarcely  a  month  from  the  beginning  of  hostilities  the  first  war  loan 
was  made  (September,  1914).  After  that  the  loans  followed  each 
other  twice  a  year,  in  March  and  September,  with  a  regularity  and  a 
constant  success  that  are  impressive.  The  ninth  and  last  loan  was 
made  in  September-October,  1918,  in  the  very  face  of  the  military 
collapse.  The  first  loan  brought  subscriptions  of  four  and  a  half 
billion  marks.  The  second  doubled  this  amount.  No  loan  thereafter 
fell  below  ten  billions,  the  climax  being  reached  by  the  eighth  loan 
(INIarch,    1918),   which    yielded    nearly    fifteen   billions.     Nearly    100 


1922]  German  War  Finance — A  Review  247 

billion  marks  were  thus  obtained  up  to  the  end  of  1918.'  When  it  is 
recalled  that  in  the  Franco-Prussian  war  of  1870-71  Germany's  total 
receipts  from  war  loans  were  only  350  million  marks,  one  begins  to 
realize  what  progress  the  world  has  made  in  a  generation  and  a  half. 

In  no  department  of  the  German  war  effort  was  success  so  conspic- 
uous as  in  the  great  war  loans.  The  magnitude  of  this  success  was  a 
surprise  to  everybody,  including  the  Germans  themselves.  There  was 
among  the  Allies  during  the  war  a  tendency  to  belittle  it,  to  charge  that 
it  was  merely  an  illusion,  the  result  of  skilful  but  dishonest  juggling. 
Nothing  could  be  farther  from  the  truth.  If  there  was  in  connection 
with  the  German  war  loans  anything  in  the  nature  of  jugglery  it  was  in 
no  fundamental  respect  different  from  the  practices  of  all  the  other 
belligerents  (pp.  65-66). 

One  naturally  asks,  whence  came  these  gigantic  sums?  In  answer 
Professor  Rist  notes  as  the  first  and  most  obvious  source  the  sale  of 
foreign  securities,  a  resource  availed  of  by  every  belligerent.  The 
mobilization  and  sale  of  foreign  securities  (particularly  American)  was 
quickly  resorted  to  by  the  British  government.  France  also  was  able 
to  make  good  use  of  this  resource  (p.  197).  The  German  position  was 
not  so  strong.  Whereas  the  people  of  England  and  France  had  before 
the  war  large  investments  abroad,  Germany  had  use  at  home  for  most 
of  her  capital.  Indeed,  she  was  employing  in  her  industries  a  very 
considerable  contribution  of  foreign  capital,  particularly  French.  This 
situation  was  one  of  the  elements  of  weakness  in  the  German  banking 
situation  which  dictated  a  pause  in  the  Agadir  crisis  of  1911  and  whose 
correction  the  Emperor  is  said  to  have  demanded  in  no  uncertain  terms. 
The  German  statisticians  estimated  their  total  holdings  of  foreign 
securities  at  the  beginning  of  the  war  at  sixteen  to  twenty  billion  marks. 
A  considerable  part  of  this  portfolio  obviously  was  not  realizable.  The 
amount  invested  in  the  industries  of  Germany's  allies,  Austria-Hun- 
gary, Turkey,  Bulgaria,  and  in  Roumania  was  estimated  at  five  billions 
(pp.  68,  198).''     Investments  in  the  enemy  countries,  France,  England, 

^The  following  table   (p.  95)   shows  the  amount  of  the  subscriptions  to  each  of 
the  nine  war  loans: 

First  loan  September,  1914  4,460  million  marks 

Second  "  March,  1915  9,060 

Third  "  September,  1915  12,101 

Fourth  "  March,  1916  10,712 

Fifth  "  September,  1916  10,652 

Sixth  "  March,  1917  12,978 

Seventh  "  September,  1917  12,457 

Eighth  "  March,  1918  14,766 

Ninth  "  September,  1918  10,433 


Total  97,619  million  marks 

'C/.  also  Keynes,  Economic  Consequences  of  the  Peace,  American  edition,  pp.  174- 


182. 


248  Fred  Rogers  Fairchild  [June 

Russia,  Italy,  were  equally  unavailable.  They  were  estimated  at  seven 
or  eight  billions.  This  left  only  the  Scandinavian  countries,  South 
America,  the  United  States,  and  Japan.  Investments  in  these  countries, 
realizable  in  spite  of  the  war,  were  calculated  at  seven  or  eight  billion 
marks. 

It  is  estimated  that  some  three  billions  of  these  foreign  securities 
were  disposed  of  in  the  early  years  of  the  war.  The  German  public  was 
urged  to  this  course  by  the  government,  speaking  through  the  voice 
of  the  press  and  the  bankers'  propaganda  with  the  slogan  "fremde 
Eflfekten  heraus."  But  by  the  latter  part  of  1916  the  government 
policy  had  changed.  In  September  it  was  decided  to  make  use  of  the 
German-owned  securities,  not  for  sale,  but,  following  the  example  ot 
France  and  England,  as  security  for  foreign  loans  sought  for  the  sake 
of  sustaining  the  foreign  exchanges  (pp.  68-69). 

Apart  from  the  modest  aid  from  such  sources  as  this.  Professor  Rist 
finds  the  real  foundation  of  the  war  loans  in  what  he  calls  the  "normal 
savings  of  war,"  permitting  one  to  say  with  truth  that  "war  supports 
war."  He  here  brings  to  the  fore  a  truth  often  overlooked  by  those 
who  paint  the  picture  of  the  awful  economic  waste  of  war.  In  the 
early  years  of  the  present  century  it  was  a  common  belief  that  the 
gigantic  cost  of  modern  warfare  had  well-nigh  rendered  further  war- 
fare impossible ;  or,  if  not  going  to  that  extreme,  that  future  wars  were 
bound  to  be  short,  sharp,  and  decisive.  No  nation  could  stand  for 
more  than  a  few  months  the  staggering  cost  of  modern  warfare.  If  the 
threat  of  economic  exhaustion  did  not  suffice  to  prevent  war,  its 
actuality  would  cut  short  the  term  of  any  war  once  entered  on. 

Of  the  gigantic  cost  of  modern  war  there  was  no  exaggeration.  But 
there  was  general  failure  to  appreciate  the  economic  power  of  nations  to 
sustain  this  burden  for  years,  indeed  almost  indefinitely,  provided  only 
that  the  people  will  it.  It  was  not  economic  exhaustion  that  brought 
defeat  to  Germany,  but  the  moral  exhaustion  and  revolt  of  her  people 
in  combination  wth  her  increasing  military  weakness. 

Germany  presented  the  most  perfect  example  in  modern  history  of  a 
nation  completely  devoted  to  war:  a  people  imbued  with  the  spirit  of 
war  and  conquest ;  a  government  supreme  in  its  power  over  the  people 
and  with  an  organization  of  extraordinary  completeness  and  perfection 
built  up  and  directed  with  the  single  purpose  of  success  in  war.  When 
such  a  nation  goes  to  war,  the  expenditures  of  war  are  not  a  net  addi- 
tion to  its  cost  of  living.  While  engaged  in  the  various  activities  of  war, 
the  people  of  necessity  forego  many  of  the  instruments  of  peace,  thus 
setting  free  resources  available  to  meet  the  needs  of  war.  The  war 
largely  cut  oft'  Germany's  foreign  trade.  Many  things  formerly  im- 
ported were  now  neither  needed  nor  obtainable.  Hence  a  possible  source 
of  saving.     Germany's  merchant  marine  found  itself  out  of  employ- 


1922]  German  War  Finance — A  Review  249 

ment,  and  many  of  the  other  industries  that  had  supplied  the  needs  of 
peace  were  idle.  Capital,  thus  temporarily  unemployed,  was  ready  to 
support  the  war,  assuming  only  the  proper  credit  machinery  to  make 
it  available. 

On  the  other  side  came  the  huge  government  demand  for  war  ma- 
terials, giving  profitable  employment  to  capital  and  labor  just  as  fast 
as  it  could  make  the  shift  from  its  former  peace  employment.  Business 
during  the  war,  as  in  other  countries,  was  generally  prosperous.  The 
nation's  industry  Avas  diverted,  more  quickly  and  more  completely  in 
Germany  than  in  any  other  nation,  to  the  ends  of  war.  The  state 
became  the  one  great  customer.  And,  as  is  usual,  the  state  paid  well. 
To  it  the  prime  consideration  was  to  obtain  the  goods ;  it  did  not  higgle 
overmuch  as  to  price.  War  profits  were  a  well-known  phenomenon  in 
every  belligerent  nation,  but  nowhere  so  conspicuous  as  in  Germany. 
Professor  Rist  gives  a  few  examples  in  the  automobile  industry.  The 
Benz  company  distributed  dividends  of  12  per  cent  the  first  year  of 
the  war  and  20  per  cent  each  year  thereafter.  In  addition  to  a  bonus 
of  10  per  cent,  its  net  profits  rose  from  Sl/o  million  marks  in  191-1  to 
over  15  millions  in  1917,  upon  a  capital  of  20  millions.  The  Daimler 
Motors  broke  the  record.  With  a  capital  of  8  million  marks,  it  made 
profits  of  12  millions  in  1916,  as  compared  with  31/4  millions  in  1913. 
Its  annual  dividend  rates  in  the  years  since  1913  were  14  per  cent, 
16  per  cent,  28  per  cent,  and  35  per  cent  respectively.  It  increased 
its  surplus  from  5^/^  to  8  millions.  It  amortized  all  its  real  property, 
entering  it  in  its  balance  sheet  at  one  mark.  Finally  in  1917  it  quad- 
rupled its  capital,  giving  for  each  share  held  the  right  to  subscribe 
for  three  new  shares  at  107,  the  market  price  being  about  900  (pp.  73- 
74). 

That  the  automobile  industry  was  not  alone  in  the  good  graces  of  the 
war  god  is  shown  by  a  table  of  the  dividends  of  the  corporations  quoted 
on  the  Frankfurt  exchange,  published  in  the  Frankfurt  Gazette  of 
November  6,  1917,  as  follows  (p.  74)  : 

28  manufacturers  of  machinery  14  per  cent 
22  electrical  manufacturers  8 

29  collieries  13 
18  chemical  concerns  17 

8  textile  corporations  '  8 

15  banks  7 

By  no  means  the  least  of  the  causes  of  this  prosperity  was  the 
monetary  inflation  and  the  consequent  rise  of  prices.  On  this  point 
more  will  be  said  later.  Here  it  is  sufficient  to  recall  (1)  the  fact  that 
currency  inflation  was  one  of  Germany's  chief  instruments  of  war 
finance  and  (2)  the  well-known  economic  principle  that  currency  infla- 


250  Fred  Rogers  Fairchild  [June 

tion  and  rising  prices  tend  always  to  stimulate  industry  and  cause 
business  profits. 

So  Germany  made  war  a  profitable  thing  to  "big  business."  Her 
captains  of  industry  were  kept  prosperous  and  in  good  humor.  Their 
support  could  be  counted  on  by  the  government.  That  cruel  injustice 
was  being  done  to  the  mass  of  the  common  people,  whose  cost  of  living 
was  raised  without  corresponding  increase  of  income,  can  scarcely 
have  been  unknown  to  the  financial  leaders.  Patriotism  and  docile 
obedience  to  inspired  propaganda  were  doubtless  counted  on  to  keep 
the  people  quiet.  In  the  meantime  industry  flourished  and  the  war 
was  kept  going — till  at  last  the  people  would  stand  no  more. 

Proof  of  war  profits  is  to  be  found  in  the  huge  sums  which,  after 
the  first  flurry  of  uneasiness  at  the  war's  beginning,  flowed  into  the 
savings  banks,  the  cooperative  credit  associations,  the  great  deposit 
banks,  and  the  stock  market.  The  growth  in  savings-bank  deposits 
is  truly  astonishing.  Before  the  war  the  annual  excess  of  deposits 
over  withdrawals  at  the  savings  banks  seldom  exceeded  500  or  600 
million  marks.  In  the  first  five  months  of  the  war,  in  spite  of  the 
sudden  heavy  withdrawals  at  its  beginning,  the  amount  rose  to  800 
millions.  In  1915  the  excess  of  deposits  reached  the  enormous  figure 
of  3I/0  billion  marks.  It  was  the  same  in  1916,  4  1/^  billions  in  1917, 
and  6  billions  in  1918.  It  should  be  noted  that  the  German  savings 
banks  do  not  confine  themselves  so  closely  to  the  service  of  the  small 
depositors  as  is  the  case  in  England,  France,  and  America,  and  fur- 
ther that  they  perform  more  of  an  actual  banking  business  (pp.  76-77). 

The  German  cooperative  credit  associations  perform  an  important 
service  as  agents  of  saving  and  investment.  The  agricultural  societies, 
of  the  RailTeisen  type,  had  deposits  of  79  million  marks  on  December 
31,  1913.  This  had  risen  to  the  extraordinary  figure  of  429  millions 
on  December  31,  1917  (p.  78).  During  this  time  the  societies  had 
subscribed  660  millon  marks  to  the  first  seven  war  loans. 

As  for  the  banks  proper,  the  example  is  cited  of  the  seven  great 
banks  of  Berlin,  whose  standing  deposit  accounts  grew  from  4  y^  billion 
marks  on  December  31,  1913,  to  over  19  billions  on  December  31,  1918 
(p.  80). 

There  is  not  space  to  discuss  further  evidence  presented  by  the 
author,  such  as  the  lively  speculation  on  the  stock  markets,  the  creation 
of  new  corporations,  and  the  increase  of  the  capital  stock  of  others, 
to  which  the  banks  were  often  heavy  subscribers.  In  all  of  which  is 
clearly  seen  the  eff'cct  of  war  profits  and  frequently  the  evident  desire 
to  conceal  the  same.  Indeed,  the  magnitude  of  these  new  capital  issues 
aroused  the  alarm  of  the  government,  which  feared  the  competition 
with  its  own  loans.  An  edict  of  March  8,  1917,  required  that  authority 
be  obtained  for  all  further  issues,  an  arrangement  found  necessary  also 


1922]  German  War  Finance — A  Review  251 

by  the  United  States  and  other  belligerents.  In  this  policy  the  govern- 
ment had  the  aid  of  the  banks  and  the  exchanges  (pp.  82-83). 

Thus  we  find  the  chief  source  of  the  German  war  loans  in  the  normal 
savings  and  business  profits  of  the  war.  It  was  the  government's  busi- 
ness to  lay  its  hand  upon  all  these  resources.  That  it  succeeded  is 
proved  by  the  results  of  the  war  loans  already  cited.  The  means  by 
which  it  accomplished  its  ends  will  now  be  examined. 

The  loan  policy  of  the  imperial  government  comprised  three  princi- 
pal features:  (1)  to  permit  the  war  savings  of  the  people  to  accumu- 
late through  the  normal  channels  of  savings,  (2)  to  absorb  these 
savings  into  the  imperial  treasury  by  the  issue,  to  the  banks,  the  sav- 
ings banks,  the  cooperative  credit  associations,  and  the  large  capital- 
ists (both  indivduals  and  corporations),  of  the  government's  short- 
time  treasury  bills  {unverzinsliche  Schatzanweisungen) ,  and  (3)  every 
six  months  to  fund  this  floating  debt  by  means  of  a  great  war  loan. 

In  carrying  out  this  policy  the  government  called  to  its  service,  by 
a  masterpiece  of  skilful  organization,  all  the  regular  institutions  of 
saving,  banking,  and  finance,  foremost  among  which  naturally  stood 
the  Reichsbank.  From  beginning  to  end,  the  imperial  bank,  under  the 
leadership  of  its  president,  Havenstein,  furnished  the  direction  and  the 
push  of  the  government's  financial  policy.  At  the  Reichsbank  were 
placed  the  bulk  of  the  imperial  treasury  bills,  part  being  subsequently 
passed  on  to  the  other  banks  and  savings  institutions.  Treasury  bills 
and  current  claims  against  the  government  soon  composed  the  bulk  of 
the  portfolios  of  the  Reichsbank  and  the  other  banks.  The  former 
had  almost  ceased  to  furnish  credit  to  private  business  and  had  become 
virtually  the  credit  agent  of  the  imperial  government.  The  treasury 
bills  and  other  drafts  of  the  government  were  discounted  by  the 
Reichsbank  at  its  official  rate  of  41/^  or  5  per  cent.  Their  title,  "non- 
interest-bearing  bills,"  must  therefore  not  be  understood  to  imply  that 
through  their  use  the  government  was  able  to  finance  its  expenses 
without  the  payment  of  interest. 

At  no  time  have  the  proceeds  of  the  war  loans  been  sufficient  to 
redeem  the  entire  amount  of  treasury  bills  outstanding.  Although  a 
considerable  reduction  followed  each  loan,  the  floating  debt  increased 
steadily  throughout  the  war.  The  portfolio  of  the  Reichsbank,  which 
it  is  agreed  was  composed  almost  entirely  of  treasury  bills  and  other 
government  advances,  amounted  to  4,712  million  marks  on  September 
30,  1914,  after  the  close  of  subscriptions  to  the  first  loan.  On  October 
7  it  had  dropped  to  3,300  millions.  By  March,  1915,  the  time  of  the 
second  loan,  it  had  risen  to  6,860  millions,  followed  by  a  drop  to  4,341 
millions.  So  after  each  loan  the  succeeding  increase  started  from  a 
higher  point.     The  progression  became  rapid  in  the  last  half  of  the 


252  Fred  Rogers  Fairchild  [June 

war,  and  in  October,  1918,  the  portfolio  was  just  short  of  19  billion 
marks. 

By  these  means,  thus  briefly  sketched,  the  imperial  government  was 
able  to  draw  to  its  own  uses  the  surplus  capital  and  the  savings  of  the 
people,  with  a  magnitude,  a  regularity,  and  a  lack  of  disturbance  to 
the  money  market  which  enabled  the  German  press  (not  without  reason) 
to  make  each  succeeding  war  loan  the  occasion  of  triumphant  rejoicing. 

The  success  of  the  imperial  loan  policy  required  not  only  the  organ- 
ization of  the  banks  and  financial  institutions.  It  was  necessary  also 
to  arouse  in  the  people  the  desire  to  lend  and  to  furnish  the  credit 
machinery  to  make  lending  easy.  Of  the  nature  of  German  propa- 
ganda, at  home  and  abroad,  the  world  is  by  now  well  aware.  Pro- 
fessor Rist  gives  an  interesting  account  of  the  means  employed  to 
arouse  popular  enthusiasm  and  support  for  the  war  loans.  Space 
does  not  permit  its  further  discussion  here.  But  it  reached  every 
corner  of  the  land  and  every  owner  of  capital,  from  the  banks  and 
savings  institutions,  the  great  corporations  and  wealthy  business  men, 
fat  with  war  profits,  down  to  the  poorest  of  the  common  people.  The 
number  and  amount  of  the  very  small  subscriptions  to  each  loan  fur- 
nish instructive  evidence  of  the  success  of  propaganda  {of.  the  in- 
teresting table  on  p.  95).  Every  nation  employed  such  propaganda 
in  aid  of  its  war  loans.  Germany  stands  out  only  in  the  degree  of 
completeness  and  energy  with  which  its  campaign  was  organized  and 
carried  out. 

What  more  particularly  demands  our  attention  is  the  means  em- 
ployed to  make  liquid  the  possessions  of  the  people,  so  as  to  make 
lending  easy.  Here  again  every  existing  agency  was  impressed  into 
service,  banks,  savings  institutions,  insurance  companies  (which  loaned 
to  their  policy  holders  upon  their  policies),  and  all  the  rest.  But  the 
institution  that  stands  out  above  all  the  others,  as  perhaps  the  most 
original  and  remarkable  of  all  Germany's  war  devices,  is  the  system 
of  imperial  loan  bureaus  (Darlehnskassen) .  These  credit  institutions 
had  their  origin  in  Prussia  in  1848  and  were  revived  during  the  wars 
of  1866  and  1870.  At  the  beginning  of  the  war  in  191-i,  provisions 
for  the  establishment  of  these  offices  all  over  the  country  were  quickly 
made.  Ninety-nine  offices  were  established  (p.  45).  Their  purpose 
was  to  supply  easy  credit  by  making  loans  on  securities  or  merchants' 
stocks.  They  made  advances  to  merchants,  manufacturers,  banks, 
savings  banks,  cooperative  credit  associations,  and  finally  to  individ- 
uals. They  soon  came  to  be  the  principal  source  of  credit  for  all 
classes  of  borrowers,  including  the  banks  themselves  and  even  the  cities 
and  the  separate  states,  which  had  been  forbidden  to  make  appeal  to 
to  the  public  savings  in  competition  with  the  imperial  loans.  This 
explains  how,  as  mentioned  above,  the  Reichsbank  was  able  to  sever 


1922]  German  War  Finance — A  Review  253 

so  completely  its  connection  with  the  nation's  industry.  It  was  the  loan 
bureaus  that  supplied  the  credit  needs  of  every  agency  except  the  im- 
perial government.  To  its  exclusive  service  the  Reichsbank  devoted 
itself. 

The  means  by  which  the  imperial  loan  bureaus  made  their  loans  was 
through  the  issue  of  their  own  notes  (Darlehnskassenscheine) .  These 
notes  were  the  most  original  and,  as  the  event  has  shown,  the  weakest 
stone  in  the  German  credit  structure.  In  character  they  were  similar 
to  the  imperial  treasury  notes  (Reichskassenscheine) ,  which  were  in 
existence  in  moderate  amount  (generally  not  exceeding  half  a  billion 
marks)  before  and  during  the  war  but  which  were  not  relied  upon  for 
war  financing.  The  loan-bureau  notes  were  issued  in  denominations 
as  low  as  one  mark.  They  were  not  legal  tender,  but  the  fact  that  they 
were  receivable  at  their  face  value  at  all  public  offices  of  the  empire 
and  the  federated  states  assured  their  circulation.  And  finally,  where 
appears  the  true  inwardness  of  their  nature,  they  could  be  counted  by 
the  Reichsbank  as  part  of  the  cash  reserve  against  its  own  notes. 

The  procedure  now  becomes  simple  enough.  Through  all  the  chan- 
nels of  propaganda,  so  skilfully  used  by  the  imperial  leaders,  the  people 
were  urged  to  borrow  freely  of  the  Darlehnskasscn  in  order  to  sub- 
scribe to  the  war  loans.  The  operation  was  pictured  as  profitable  on 
account  of  the  slight  difference  between  the  rate  of  yield  on  war-loan 
bonds  and  the  rate  of  discount  charged  by  the  loan  offices — 5.36  per 
cent  and  5.25  per  cent  respectively  (pp.  104-5).  Even  more  strongly 
was  the  operation  urged  as  a  patriotic  duty.  The  loan  offices  made 
lending  easy.  Credit  could  be  obtained  on  a  great  variety  of  securities 
without  the  necessity  of  suffering  the  heavy  loss  involved  in  sale  upon 
the  disordered  stock  market.  No  possessor  of  capital  not  actually 
used  in  his  own  business  had  any  excuse  for  failure  to  subscribe  to  the 
extent  of  his  investments. 

At  first  sight  it  seems  very  strange  that  trouble  should  have  been 
taken  to  set  up  all  this  elaborate  machinery  for  performing  what  was 
after  all  a  simple  banking  function,  which  it  would  seem  might  have  been 
handled  by  the  Reichsbank  in  cooperation  with  the  other  banks  of  the 
country.  The  explanation  of  this  anomaly  gives  us  an  insight  into 
the  essentially  hypocritical  character  of  the  German  credit  currency. 
Two  considerations  must  be  noted.  In  the  first  place  it  is  to  be  re- 
membered that  the  German  law  permitted  its  banks  of  issue  to  emit 
notes  only  on  the  security  of  cash  or  commercial  paper,  though  the 
law  was  changed  so  as  to  permit  loans  to  the  state  (pp.  45-6).  The 
imperial  loan  bureaus  on  the  other  hand  were  permitted  and  expected 
to  loan  freely  upon  securities  and  merchants'  stocks,  and  they  could 
issue  their  own  notes  to  meet  their  loans.  The  second  consideration  is 
even  more  significant.     The  Reichsbank's  rule  requiring  a  cash  reserve 


254  Fred  Rogers  Fairchild  [June 

of  33  X4  per  cent  against  its  note  issue  was  held  in  high  repute  by  the 
financial  leaders  of  the  empire,  who  considered  its  preservation  during 
the  war  a  matter  of  the  utmost  importance.  But  the  war  plans  re- 
quired assistance  to  the  imperial  treasury  in  the  form  of  credit  currency 
far  in  excess  of  the  power  of  the  Reichsbank  to  issue  while  keeping  this 
reserve  ratio  intact.  Hence  the  ingenious  device  of  the  Darlehns- 
kassenscheine,  whereby  it  was  easy  to  eat  the  fiduciary  cake  and  have 
it  too.  The  loan  bureaus  could  issue  their  notes  virtually  without 
limit  as  to  amount  or  cash  reserve.  A  large  part  of  their  notes  was 
not  issued  to  their  customers  at  all  but  exchanged  in  advance  with  the 
Reichsbank  for  the  notes  of  the  bank.  In  fact  it  was  the  notes  of  the 
Reichsbank  that  were  issued  to  the  public  and  went  into  circulation. 
The  loan-bureau  notes  served  as  cash  reserve  for  the  Reichsbank  (law 
of  Aug.  4,  1914)  and  so  permitted  the  issue  of  its  own  notes  in  any 
desired  amount  without  sacrificing  the  sacred  one-third  ratio. 

By  this  original  device  the  imperial  authorities  undertook  to  con- 
ceal the  real  nature  of  the  monetary  inflation  upon  which  they  relied 
for  financial  support  of  the  government.  And  the  inflation  thus  made 
easy  was  one  of  the  chief  causes  of  Germany's  loss  of  the  war  and  her 
present  low  state.  The  figures  of  the  monetary  inflation  are  appalling. 
On  July  23,  1914,  the  fiduciary  circulation  amounted  to  2,095  million 
marks,  made  up  of  1,890  million  Reichsbank  notes  and  205  million 
imperial  treasury  notes."  Just  before  the  close  of  hostilities,  November 
7,  1918,  the  circulation  had  reached  the  huge  total  of  27,418  millions, 
consisting  of  17,454  millions  of  Reichsbank  notes,  354  millions  of 
treasury  notes,  and  9,610  millions  of  loan-bureau  notes.*  The  reckless 
issue  of  paper  money  was  not  checked  by  the  armistice.  On  December 
31,  1919,  the  amounts  outstanding  were:  Reichsbank  notes,  35,698 
millions ;  imperial  treasury  notes,  332  millions ;  and  loan-bureau  notes, 
13,598  millions ;  making  a  total  of  49,628  millions,  24  times  the  amount 
at  the  beginning  of  the  war  (pp.  146-7). 

The  authorities  were  hard  put  to  it  to  explain  this  enormous  increase 
of  the  fiduciary  circulation,  particularly  in  face  of  the  rising  price 
level  and  the  decline  in  German  exchange.  Various  excuses  were  alleged, 
such  as  the  need  of  currency  to  replace  the  gold  turned  into  the  Reichs- 
bank by  the  public  since  the  beginning  of  the  war,  the  need  of  currency 
for  the  occupied  territories,  the  notes  absorbed  by  the  troops  in  the 
field,  and  the  growing  habit  of  the  people  to  make  payments  in  cash — 
every  reason,  in  fact,  except  the  real  one,  the  steadily  increasing  ad- 
vances of  the  Bank  to  the  Treasury.  The  comparison  with  the  enemy 
countries  was  disquieting  and  had  to  be  explained  away.  The  contrast 
with  England,  where  inflation  was  kept  within  narrow  bounds,  was 

*The  Economist,  Aug.  8,  1914,  p.  292. 
*Ibid.,  Nov.  30,  1918,  p.  738. 


1922]  German  War  Finance — A  Review  255 

brushed  aside  with  mere  reference  to  the  different  habits  of  the  British 
as  to  payments.  Even  in  France,  where  inflation  was  by  no  means 
modest,  the  notes  of  the  Bank  of  France  had  increased  only  from  5,433 
million  francs  on  July  31,  1914,  to  30,617  millions  on  December  31, 
1919,  an  increase  of  only  51/2  times. 

The  common  impression  that  by  means  of  the  Darlehnskassenscheine 
a  way  was  early  provided  for  an  expected  unlimited  issue  of  Reichs- 
bank  notes  was  a  mistake.  Actually  the  Reichsbank  at  the  first  re- 
garded this  as  an  expedient  to  be  used  only  in  case  of  dire  necessity. 
It  took  care  in  its  balance  sheet  to  distinguish  meticulously  its  metallic 
money  from  its  paper  money.  It  made  it  a  point  of  honor  not  to 
count  the  paper  in  its  reserve  or  to  issue  more  notes  than  would  be  law- 
ful on  the  basis  of  its  metallic  reserve  only.  This  up  to  the  end  of 
1916.  Even  here  there  was  a  certain  lack  of  sincerity,  through  failure 
to  count  in  the  notes  outstanding  the  imperial  treasury  notes  and  the 
Darlehnskassenscheine.  Including  these  items,  the  metallic  reserve  fell 
below  the  one-third  ratio  at  the  end  of  1915  and  at  the  end  of  1916 
was  scarcely  over  22  per  cent.  But  on  December  23,  1916,  even  the 
Reichsbank  notes  were  beyond  the  line,  7,735  million  marks  being 
covered  by  2,519  millions  of  metallic  reserve,  a  ratio  of  321/0  per  cent 
(pp.  146-8).  During  1917  the  sacred  ratio  was  definitely  lost,  and 
after  that  the  collapse  was  rapid  and  complete.  The  metallic  reserve 
stood  at  22  per  cent  on  December  31,  1917,  10  per  cent  on  the  last 
day  of  1918,  and  3  per  cent  on  December  31,  1919.  The  importance 
attached  to  the  one-third  metallic  ratio  is  clearly  evident  in  the  failure 
to  acknowledge  its  loss.  From  that  time  the  journals  discontinued 
completely  the  publication  of  the  ratio  of  metallic  reserve  to  notes, 
so  religiously  calculated  theretofore  (pp.  148-9). 

Monetary  inflation  brought  in  its  train  rising  prices  and  falling 
exchanges.  Professor  Rist  devotes  two  interesting  chapters  (chapters 
5  and  6)  to  this  subject.  As  in  other  situations,  the  authorities  sought 
by  propaganda  to  put  a  good  face  on  the  matter.  The  rise  of  prices, 
when  no  longer  to  be  denied,  was  explained  as  due  to  natural  causes 
quite  unconnected  with  the  fiduciary  circulation.  It  was  stoutly  as- 
serted by  the  pliant  authorities  and  editors  that  the  German  mark  was 
worth  exactly  as  much  as  before  the  war.  Other  circumstances,  the 
government  demand,  the  British  blockade,  etc.,  had  caused  the  high 
prices  at  home  and  the  low  value  of  mark  exchange  abroad.  There 
were,  it  is  true,  those  who  could  not  accept  this  explanation.  The 
German  economists  for  years  before  the  war  were  much  interested  in 
questions  of  the  economic  theory  of  money.  Now  these  discussions 
broke  out  anew ;  our  old  friend,  "the  quantity  theory,"  had  its  hour 
in  the  spotlight,  and  there  were  vigorous  polemics,  in  the  good  old 


256  Fred  Rogers  Fairchild  [June 

German  style,  between  the  "metallists"  and  the  "anti-metallists"  (pp. 
137-8,  149-55). 

The  Reichsbank,  while  studiously  denying  depreciation  of  the  mark, 
was  nevertheless  taking  urgent  measures  to  maintain  its  value.  Its 
first  care  was  to  build  up  its  gold  reserve.  This  policy  was  initiated 
before  the  war,  notably  after  the  Agadir  crisis  in  1911.  It  was  carried 
on  vigorously  till  the  year  1916.  The  bank  bought  foreign  gold.  A 
vigorous  campaign  gathered  in  the  gold  from  general  circulation,  aided 
by  authority  to  issue  Reichsbank  notes  in  denominations  of  20  and  50 
marks;  before  the  war  the  limit  was  100  marks.  The  public  was  edu- 
cated to  make  payments  in  notes  rather  than  gold  and  responded 
obediently.  By  such  means  400  million  marks  were  added  to  the 
Reichsbank's  gold  reserve  in  the  two  years  1912  and  1913.  The  last 
statement  before  the  war  (July  23,  1914)  surpassed  all  hopes.  Against 
a  note  issue  of  1,890  million  marks  the  bank  held  a  reserve  of  1,756 
millions,  of  which  1,691  millions  was  in  metal,  a  metallic  reserve  of 
nearly  90  per  cent  (p.  33). 

Almost  immediately  after  the  beginning  of  hostilities  the  bank  sus- 
pended gold  payments,  and,  thanks  to  the  voluntary  delivery  of  gold  by 
the  public,  the  gold  reserve  continued  to  mount  steadily,  reaching  the 
remarkable  figure  of  two  and  a  half  billions  in  the  summer  of  1917 
(June  15).  This  was  the  maximum.  The  force  of  public  contribu- 
tions had  now  spent  itself,  and  from  this  date  the  gold  reserve  declined. 
In  the  meantime,  the  note  issue  was  increased  prodigiously.  A  billion 
marks  were  added  in  the  last  week  of  July,  1914,  and  another  billion 
in  the  first  week  of  August,  thus  starting  an  avalanche  of  notes  destined 
to  continue  all  through  the  war  and  down  to  the  present  day  (pp.  36- 
37,  140).  In  spite,  therefore,  of  the  absolute  increase  in  the  gold 
reserve,  the  ratio  of  gold  to  notes  fell  swiftly  from  the  90  per  cent 
on  July  23,  1914,  to  less  than  the  legal  33  y^  per  cent,  in  December, 
1916. 

Now  the  policy  changed.  A  nation-wide  campaign  to  educate  the 
people  in  the  use  of  checks  was  inaugurated.  This  meant  a  revolution 
in  habits,  payments  having  been  made  almost  exclusively  in  notes  and 
coin.  The  results  were  slow  but  material.  For  example,  the  number 
of  checking  accounts  rose  from  133,000,  with  an  average  of  270  marks 
on  deposit,  at  the  beginning  of  1916,  to  275,000,  averaging  979  marks, 
in  September,  1918.  The  government  also  changed  its  policy  by  ob- 
taining its  advances  from  the  Reichsbank  in  deposit  credit  in  prefer- 
ence to  notes  (p.  164). 

The  officers  of  the  Reichsbank  and  of  the  government  must  have 
understood  perfectly  that  this  substitution  of  one  form  of  credit  cur- 
rency for  another  was  powerless  to  relieve  the  monetary  situation. 
Clearly  the  policy  was  aimed  solely  at  allaying  the  uneasiness  of  the 


1922]  German  War  Finance — A  Review  257 

public,  who,  ignorant  of  the  essential  identity  of  notes  and  deposits, 
would  take  courage  from  the  decline  of  notes  while  overlooking  the  rise 
of  deposits.      Of  course,  all  this  had  no  effect  on  prices. 

Finally,  measures  were  taken  to  reduce  the  circulation  by  bringing 
back  from  the  occupied  territories  of  Belgium  and  Poland  the  large  vol- 
ume of  Reichsbank  notes  put  into  circulation  there  as  part  of  the 
earlier  policy.  When  Roumania  was  later  occupied,  Reichsbank  notes 
were  not  circulated  there  (pp.  155-160). 

The  weakest  feature  of  the  German  war  finances  was  the  lack  of  a  ^ 
vigorous  tax  policy.  P'or  a  generation  before  the  war  Germany  had 
held  a  leading  place  among  the  nations  of  the  world  in  the  development 
of  tax  technique.  Yet  the  burden  of  taxation  was  lighter  in  Germany 
than  in  most  other  countries.  The  total  of  all  taxes,  national,  state, 
and  local,  in  Prussia  in  1902  was  estimated  at  42.50  marks  per  capita. 
In  France  it  was  79.57  marks  and  in  Great  Britain,  101.44  marks. 
During  the  decade  preceding  the  war,  the  burden  increased  in  Germany 
faster  than  in  France,  but  the  comparison  still  favored  the  German  tax- 
payer. In  1913  the  average  Prussian  subject  paid  33  marks  in  taxes 
to  the  empire,  17  to  the  state,  and  18.40  to  the  commune  and  the  circle, 
68.40  marks  in  all,  estimated  at  10  per  cent  of  his  income.  The  French 
taxpayer  paid  135  francs  (101  to  the  state  and  34  to  the  department 
and  the  commune)  being  15  per  cent  of  his  income.  It  is  scarcely  nec- 
essary to  remind  the  reader  that  Germany's  moderation  in  taxes  did 
not  mean  a  niggardly  budget.  Receipts  from  industrial  enterprises  < 
furnished  30  per  cent  of  the  imperial  gross  revenue  and  67  per  cent 
of  the  revenue  of  the  federated  states,  besides  contributing  handsomely 
to  local  needs  (pp.  111-115). 

The  German  plan  of  war  finance  had  evidently  been  carefully  worked 
out  in  advance.  It  was  clearly  stated  by  Helfferich  in  his  budget 
speech  to  the  Reichstag  on  March  10,  1915  (p.  118).  Taxes  were 
not  to  be  relied  upon  except  in  so  far  as  they  might  be  required  to  meet 
interest  on  the  war  loans.  The  cost  of  war  was  to  be  covered  entirely 
by  loans  and  the  issue  of  notes  by  the  Reichsbank. 

One  recognizes  here  the  so-called  "Gallatin  plan"  of  war  finance, 
first  definitely  formulated  by  the  United  States  Secretary  of  the  Treas- 
ury during  the  War  of  1812,  adopted,  with  disastrous  results,  in  that 
war,  and  justly  regarded  since  then  as  a  policy  of  weakness.  That  the 
German  authorities,  with  their  long  and  thorough  study  of  every  aspect 
of  war  economy,  with  their  meticulous  prevision  of  every  detail  of  their 
policy  of  loans  and  currency,  should  have  fallen  so  completely  into  the 
pitfall  of  a  weak  tax  policy  has  seemed  an  anomaly  difficult  to  explain. 
The  answer  is  to  be  found  in  two  considerations,  one  well  known,  the 
other  little  appreciated  outside  the  circle  of  students  of  public  finance. 

As  to  the  first,  everyone  knows  that  all  the  German  plans  were  pre- 


'I 


258  Fred  Rogers  Fairchild  [June 

dicated  upon  the  assumption  of  a  quick,  decisive  victor}^  on  the  field  of 
battle.  The  war  was  to  be  a  short  and  extraordinary  effort,  demand- 
ing the  utmost  of  every  department  of  the  national  life  and  quickly 
crowned  with  victory.  The  disturbing  element  of  war  taxes  was  to  be 
avoided.  It  would  not  be  necessary;  loans  would  furnish  the  sinews 
of  war.  After  the  victory  would  be  time  enough  to  count  the  cost 
and  make  suitable  settlement.  An  indemnity  would  assist  and,  in  any 
event,  the  joy  of  victory  would  sugar-coat  the  pill  of  taxation,  so  far 
as  that  bitter  medicine  might  prove  necessary.  The  sole  concession 
was  to  provide  by  taxation  for  interest  on  the  war  loans.  This  policy 
had  just  one  chance  of  success.  In  default  of  the  expected  quick 
victory,  it  was  foredoomed  to  failure.  Moreover,  the  lesson  of  history 
gave  clear  warning  against  over-optimistic  hopes.  The  United  States 
made  that  mistake  in  the  Civil  War.  So  did  Great  Britain  in  the 
South  African  War.  Each  nation  paid  dearly  for  her  optimism.  And 
so  it  befell  with  the  German  war  plans.  The  conflict  dragged  on.  Even 
the  requirements  of  interest  on  war  loans  reached  before  the  end  the 
huge  sum  of  Sl/o  billion  marks  (p.  119).  And  ultimately  the  great 
credit  machine  broke  down  under  the  impossible  burdens  placed  upon  it. 

The  meaning  of  all  this  is  clear  enough.  It  was  understood  before 
the  war  by  the  leaders  in  every  other  nation.  Great  Britain  made  un- 
precedented demands  upon  her  taxpayers  from  the  start.  The  United 
States  was  equally  courageous.  Even  France,  handicapped  by  a  weak 
and  obsolete  tax  system  and  with  no  love  of  taxes,  did  not  turn  her 
back  upon  taxation  in  the  German  fashion.  It  is  impossible  to  believe 
that  the  German  authorities  were  ignorant  of  these  simple  principles 
of  war  finance.  It  is  at  least  difficult  to  believe  that  they  would  thus 
have  staked  their  all  upon  one  long  chance  unless  compelled  thereto  by 
some  other  powerful  consideration. 

In  the  opinion  of  the  reviewer  the  explanation  is  to  be  found  in  the 
constitutional  weakness  of  the  imperial  government  in  the  matter  of 
taxation,  and  Professor  Rist  brings  the  point  out  clearly  (p.  121). 

When  the  empire  was  established,  difficulty  was  experienced  in  find- 
ing for  it  a  revenue  system  of  sufficient  magnitude  and  independence. 
The  several  states  had  already  appropriated  to  themselves  the  most 
fruitful  sources  of  revenue  and,  in  spite  of  the  important  functions 
assigned  to  the  new  imperial  goverment,  the  states  were  unwilling  to 
make  any  material  concessions.  So  the  constitution  marked  out  the 
financial  boundary :  direct  taxation  and  industrial  earnings  to  the 
states,  indirect  taxes  to  the  empire.  Deprived  thus  of  the  most  effective 
sources  of  revenue,  the  empire  has  faced  a  continual  struggle  to  make 
both  ends  meet.  The  states,  the  ancient  stronghold  of  reaction  and 
privilege,  fought  every  move  to  strengthen  the  imperial  finances  at 
their  expense.     The  empire  was  forced  by  growing  expenses  to  cultivate 


1922]  German  War  Finance — A  Review  259 

to  the  utmost  the  field  of  indirect  taxes.  Only  twice  was  the  empire 
permitted  to  invade  the  sacred  domain  of  direct  taxation.  In  1906, 
the  succession  taxes  were  given  over  to  the  empire,  and  in  1913,  with 
a  boldness  that  should  have  advertised  Germany's  war  plans  to  the 
world,  the  Wehrheitrag  (extraordinary  defense  contribution)  and  the 
Vermoegenszuwachssteuer  were  established  (p.  123). 

So  Germany  girded  herself  for  war,  seemingly  prepared  at  every 
point,  but  with  one  fatal  weakness  in  her  armor,  the  inability  to  levy 
direct  contribution  upon  the  wealth  and  incomes  of  her  people.  With 
the  public  already  restive  under  the  burden  of  multiplied  indirect  taxes, 
with  the  states  still  obstinately  defending  their  ancient  monopoly  of 
direct  taxation,  necessity  pointed  the  path  for  the  imperial  govern- 
ment.    Borrowing  was  the  only  recourse. 

To  the  American  student  this  lesson  is  of  especial  interest,  on  account 
of  our  own  similar  experience.  The  Constitution  of  the  United  States 
virtually  deprived  the  federal  government  of  recourse  to  direct  taxation 
through  the  rule  that  such  taxes  must  be  apportioned  among  the  states 
according  to  their  population.  Up  to  the  time  of  the  Civil  War, 
indeed,  the  government  had  failed  to  make  effective  use  even  of  indirect 
taxation  outside  of  customs  duties  on  imports.  Hence  it  is  not  sur- 
prising that  the  financing  of  the  Civil  War,  as  of  the  War  of  1812, 
grounded  on  the  rocks  of  insufficient  taxation.  Direct  taxes,  under 
the  Constitution  rule,  were  tried  and  failed.  A  new  system  of  indirect 
taxes  did  not  get  well  started  till  near  the  war's  close.  It  is  an  in- 
teresting, though  uncomfortable,  exercise  to  speculate  upon  the  prob- 
able fate  of  our  national  finances  in  the  World  War  if  the  sixteenth 
amendment  had  not  just  in  the  nick  of  time  led  to  the  establishment 
of  an  efficient  federal  income  tax. 

The  imperial  German  budget  during  the  war  was  divided  into  two 
parts,  the  extraordinary  war  budget,  to  be  covered  entirely  by  loans, 
and  the  ordinary  budget,  including  interest,  which  it  was  hoped  would 
be  met  by  taxes.  In  spite  of  economy  in  other  ordinary  expenditures, 
the  rapid  growth  of  the  interest  charge  soon  made  impossible  the  task 
of  balancing  the  budget  without  asking  any  contribution  from  the  tax- 
payer. But,  in  spite  of  alarming  deficits,  the  original  plan  was  not 
abandoned  till  1917,  with  the  resort  to  direct  taxation  in  the  form  of 
the  Kriegsteucr.  Other  taxes  followed,  which  are  described  in  detail 
by  Professor  Rist  (pp.  125-136),  but  which  must  be  passed  over  here. 
The  change  of  policy  came  too  late  to  save  the  day,  already  lost  in  the 
flood  of  paper  money.  The  evidence  as  to  the  yield  of  taxes  is  obscure 
and  conflicting.  Professor  Rist  estimates  that  at  the  very  outside  the 
per  capita  burden  of  all  taxes  did  not  much  more  than  double  between 
1914  and  1918,  during  which  period  the  imperial  taxes  were  certainly 
not  more  than  trebled.      Considering  the  easy  position  of  the  German 


260  Fred  Rogers  Fairchild  [June 

taxpayer  in  1914*   and   the  depreciated  currency  in  which   the   1918 
figures  are  expressed,  this  is  moderate  indeed. 

For  the  future  the  most  significant  result  of  Germany's  tax  ex- 
perience was  the  final  triumph  of  the  empire  over  the  states.  In  the 
new  Constitution,  following  the  military  debacle  and  the  political  rev- 
olution, we  find  the  financial  revolution  accomplished.  Henceforth 
the  imperial  government  has  sole  authority  in  the  field  of  direct  taxa- 
tion, including  the  income  tax,  formerly  the  backbone  of  the  state  tax 
systems.  And  the  railroads,  once  the  chief  source  of  industrial  earn- 
ings, are  likewise  taken  from  the  states  and  bestowed  upon  the  imperial 
government.  Henceforth  the  states  and  communes  must  occupy  the 
position  of  financial  dependence,  supported  by  fixed  shares  in  the  great 
imperial  direct  taxes. 

From  the  beginning  the  German  leaders  looked  forward  to  war  indem- 
nities as  the  means  by  which  the  vanquished  should  pay  the  victor's 
war  costs,  the  role  of  victor  being  of  course  played  by  Germany.  In 
an  interesting  chapter  devoted  to  this  subject.  Professor  Rist  sum- 
marizes the  writings  of  various  German  authorities  before  and  during 
the  war,  whose  happy  anticipations  in  1915  were  illustrated  by  the 
exclamation  of  Lamprecht  and  List:  "It  is  a  joy  to  be  living  in  these 
times  of  ours."  To  this  the  author  remarks  dryly  that  "since  1915 
the  joy  of  living  has  considerably  diminished  in  Germany"  (p.  216). 

The  most  important  part  of  this  chapter  is  that  which  deals  with  the 
prospects  of  German  reparation  payments  to  France.  On  this  topic 
Professor  Rist  speaks  with  such  sound  common  sense  and  such  clear 
understanding  of  economic  principles  that  one  could  wish  his  book  had 
more  influence  upon  French  public  opinion. 

The  futility  of  expecting  a  huge  indemnity  in  gold  is  shown.     Aside 
from   a   moderate    stock    of   gold    and    foreign    securities,    Germany's 
capital  consists  of  her  lands  and  buildings,  her  factories  and  mines. 
Even  though  title  to  these  be  given  to  the  Allies,  the  capital  itself  is    i 
not  physically  removed.     The  titles  are  good  only  to  the  extent  that    I 
the  product  of  German  industry  is  sufficient  to  pay  interest  and  divi-    i 
dends.     Only  in  German  products  can  Germany  pay   an  indemnity.    i 
And   the   Allies    can   receive   payment   in   only   two    forms,    either   in    ( 
German  products  or  in  bills  of  exchange  on  other  countries  to  which    ^ 
German  products  have  been  sold.      In  either  case  Germany's  ability  to    I 
pay  is  dependent  upon  her  foreign  trade.     The  "boycott"  of  German    i 
goods  is  incompatible  with  the  collection  of  indemnity.     The  "economic    | 
war"  may  be  a  useful  diplomatic  weapon  in  time  of  war;  it  has  no 
place  after  the  enemy's  defeat  except  to  serve  the  selfish  interests  of 
individuals.     And  this  leads  directly  to  the  obvious  conclusion  that 
protectionism  and  indemnity  can  not  work  in  double  harness.     The 


1922]  German  War  Finance — A  Review  261 

absorption  of  this  uncomfortable  economic  principle  is  one  of  the  first 
steps  necessary  to  the  world's  economic  recovery. 

The  last  chapter,  "Since  the  Armistice,"  and  the  appendix  describing 
"Germanj-'s  Financial  Situation  in  July,  1920,"  are  interesting  read- 
ing, in  particular  the  discusson  of  the  ambitious  and  courageous  plans 
by  which  the  ill-fated  Erzberger  hoped  to  restore  financial  order.  This, 
however,  is  really  part  of  another  story,  whose  end  is  not  yet  in  sight. 
Detailed  review  of  Professor  Rist's  discussion,  already  partly  out  of 
date,  would  not  be  worth  while.  The  two  outstanding  features  of 
Germany's  post  helium  finances  are  the  failure  to  balance  the  budget 
and  the  reckless  issue  of  paper  money.  The  budget  for  1920,  ac- 
cording to  the  official  figures  presented  by  Finance  Minister  Wirth 
to  the  National  Assembly  on  April  26,  1920,  showed  expenditures  of 
55  billion  marks  and  receipts  of  25  billions,  an  expected  deficit  of  30 
billions  (pp.  276-8).  A  summary  of  the  1921  budget  made  in  Decem- 
ber' indicated  total  expenditure  of  234  billion  marks,  revenues  of  72 
billions,  and  a  consequent  deficit  of  162  billions  to  be  covered  by  loans. 
A  preliminary  estimate  of  the  budget  for  1922  made  in  February'  shows 
a  deficit  to  be  covered  by  credit  operations  amounting  to  the  enor- 
mous sum  of  183  billion  marks.  If  past  experience  is  any  guide,  this 
figure  is  very  likely  to  be  increased. 

As  we  should  expect,  the  accompaniment  of  this  deficit  financing  is 
reckless  paper-money  inflation.  The  circulation  of  Reichsbank  notes 
before  the  war  was  less  than  two  billion  marks  (1,890  million  marks  on 
July  23,  1914).  At  the  close  of  hostilities  the  circulation  was  171/2 
billions  (on  November  7,  1918).  During  the  next  year  this  huge  sum 
was  doubled  (35,698  million  marks  on  December  31,  1919).  It  doubled 
again  in  1920  (68,805  million  marks  on  December  31,  1920)  and  all 
but  maintained  the  geometrical  progression  in  1921,  the  figure  standing 
at  113,639  mUlions  on  December  31,  1921.'  On  February  15,  1922, 
the  sum  of  115,755  millions  had  been  reached.*  The  increase  from  two 
to  sixteen  billions  during  the  war  was  impressive  enough.  But  that  was 
only  a  beginning.  Scarcely  more  than  three  years  of  peace  have 
witnessed  an  eightfold  increase  of  the  unprecedented  figure  of  October, 
1918.  The  final  chapter  of  Germany's  war  finance  is  a  record  of  un- 
balanced budgets  and  paper-money  inflation.  What  the  end  will  be 
remains  to  be  seen. 

Fred  Rogers  Fairchild. 

Yale  University. 

'■The  Economist,  Dec.  17,  1921,  p.  1067. 
"Ibid.,   Feb.  18,  1922,  p.  279. 
Uhid.,  Jan.  14,  1922,  p.  62. 
Hhid.,  Feb.  25,  1922,  p.  427. 


FOREIGN  TRADING  ZONES  IN  OUR  SEAPORTS 

(Free  Zones;  Free  Ports) 

A  foreign  trading  zone  is  a  section  of  a  seaport  established  and 
equipped  to  facilitate  the  transhipment  and  reexport  trade.  The 
operation  of  customs  regulations  and  the  supervision  of  customs 
officials,  in  our  ports  as  at  present  constituted,  hinders  the  free  move- 
ment of  goods  simply  transhipped  at  the  port  on  their  way  from  one 
foreign  country  to  another.  Still  more  do  these  factors  hinder  the 
repacking,  reconditioning  and  mixing  operations  involved  in  the  reex- 
portation of  goods  that  once  enter  our  warehouses. 

The  foreign  trading  zone  is  a  part  of  the  port  surrounded  by  a 
customs  barrier.  In  this  section  are  piers  and  warehouses.  Here, 
without  customs  supervision,  ships  can  dock,  discharge,  load ;  and 
goods  be  transhipped  or  put  into  store,  rchandlcd,  and  later  exported. 
Only  when  the  merchandise  leaves  the  zone  for  the  American  interior, 
is  it  inspected  and  its  duty  assessed.  These  piers  and  warehouses  are 
as  little  concern  to  the  customs  as  if  they  were  in  Nassau.  The  zone 
is  treated  as  it  if  were  foreign  territory^  In  it  the  freedom  from 
customs  supervision  hastens  the  turn-around  of  ships,  stimulates  the 
transhipment  and  reexport  business,  provides  the  basis  for  the  develop- 
ment of  an  international  consignment  market  as  at  London,  increases 
the  volume  of  the  ocean-borne  cargo  to  and  from  the  port,  and  so 
improves  its  steamship  services.  The  foreign  trading  zone  is  a  neces- 
sary tool  of  the  seaport  in  a  protectionistic  country  if  it  desires  to 
act  as  middleman  handling  traffic  moving  between  foreign  lands. 

The  advocacy  of  foreign  trading  zones  in  our  country  is  ten  years 
old.  It  started  with  the  "discovery"  of  the  Hamburg  Free  Port,  which 
had  been  in  operation  thirty  years.  Free  ports  were  demanded  here. 
The  movement  found  opposition  from  the  protectionists,  who  inter- 
preted the  name  free  ports  to  mean  the  opening  of  entire  ports  like 
New  York  to  the  unrestricted  entrance  of  foreign  goods.  The  ad- 
vocates changed  the  name  to  free  zones,  indicating  that  only  part  of 
the  port  would  be  thus  privileged.  But  free  zones  were  still  accused 
of  being  related  to  free  trade.  So  the  name  free  was  dropped  entirely 
and  today  the  name  is  foreign  trading  zone.  The  term  free  zone  is  less 
unhandy  and  will  be  used  herein. 

Most  of  what  is  said  and  written  of  free  zones  is  based  upon  the 
operation  of  the  Hamburg  Free  Zone  before  the  war.  The  institution 
was  invented  in  1882;  it  arose  as  the  solution  of  a  crisis  which  in  that 
year  came  u})on  the  city-state  of  Hamburg. 

Although  it  had  become  a  member  of  tiie  German  Empire,  formed 
ten  years  earlier,  Hamburg  had  never  entered  the  German  Customs 


1922]  Foreign  Trading  Zones  in  Our  Seaports  263 

Union.  Hamburg's  trade  with  Germany  was  no  larger  than  its  trade 
with  the  Baltic,  a  business  that  had  its  roots  several  centuries  back. 
If  Hamburg  entered  the  German  Customs  Union,  which  in  1879  adopt- 
ed a  high  protective  tariff,  all  goods  landed  at  the  port  would  then  be 
subject  to  the  payment  of  duties  under  the  German  tariff.  No  system 
of  bonded  warehouses  or  refunds  of  duties  paid  was  deemed  adequate 
to  remove  the  handicaps  which  this  customs  procedure  would  place 
upon  the  transhipment  and  reexport  trade  with  the  Baltic,  precari- 
ously developed  in  competition  with  London.  That  is  why  Hamburg 
remained  aloof  from  the  German  Customs  Union. 

Bismarck  wanted  Hamburg  in  the  Customs  Union  and  he  finally  had 
his  way.  But  it  was  not  until  Hamburg  had  developed  a  scheme  for 
retaining  the  same  advantages  for  her  commerce  and  her  transhipment 
that  she  had  enjoyed  before  1882.  That  scheme  was  the  free  zone. 
Bismarck  allowed  Hamburg  to  reconstruct  her  port  as  a  free  zone, 
and  the  Empire  contributed  forty  million  marks  to  the  reconstruction. 
When  the  free  zone  was  completed,  it  was  the  Port  of  Hamburg,  com- 
prising over  1200  acres  of  land  and  water  with  a  complete  equipment 
of  piers,  sheds,  cranes,  warehouses,  basins,  railroads  tracks  and  yards, 
roadways  and  manufacturing  sites.  The  entire  district  was  surround- 
ed by  customs  barriers.  On  the  land,  this  barrier  consisted  of  a  stock- 
ade with  openings  for  railroad  tracks  and  roadways,  guarded  by 
customs  officials.  On  the  Avater,  the  barrier  was  a  floating  palisade 
with  openings  through  which  water-carriers  might  pass,  likewise 
guarded  by  the  customs.  Nearly  all  of  the  free  zone  was  on  the  left 
bank  of  the  Elbe.  The  city  of  Hamburg  itself  was  on  the  right  bank 
and  hence  in  the  German  Customs  Union. 

The  German  customs  officials  had  no  more  to  say  about  what  went 
on  in  the  Hamburg  Free  Zone  than  they  had  to  say  about  what  went 
on  in  Long  Island.  In  the  free  zone  goods  could  be,  with  complete 
freedom,  transhipped  from  one  vessel  to  another  for  further  carriage 
— all  Hamburg  lines  found  it  to  their  advantage  to  be  in  the  free  zone. 
Or  merchandise  could  be  mixed,  packed,  cleaned,  manipulated,  and 
branded.  It  could  be  held  in  warehouse  subject  to  the  demands  of 
markets  at  home  or  abroad.  Even  manufacturing  in  the  free  zone 
was  permitted,  though  this  never  attained  a  large  development  save 
in  shipbuilding  and  ship-supply  industries  such  as  biscuit  factories. 
The  point  is  that  all  these  operations  went  on  innocent  of  any  customs 
interference,  supervision,  or  regulation. 

When  dutiable  goods  that  had  been  landed  in  the  free  zone  to  be 
stored,  handled,  or  manufactured  were  trucked  across  the  river  to 
Hamburg  or  forwarded  inland  by  rail  or  river  barge,  they  were  assess- 
ed the  standard  German  customs  duties,  whether  they  were  raw  ma- 


264)  Edwin  J.  Clapp  [June 

terials  or  finished  products.  Under  the  operation  of  the  free  zone  the 
Empire  lost  nothing  in  the  collection  of  revenue.  Duties  were  collect- 
ed as  soon  as  any  goods  were  determined  for  German  consumption  and 
forwarded.  But  the  process  of  assessing  this  revenue  was  concen- 
trated upon  the  few  points  of  egress  of  the  free  zone,  not  dispersed 
over  all  the  piers  in  the  port,  as  is  the  case  in  this  country,  where 
customs  officials  descend  upon  every  ship  that  enters,  their  meticulous 
procedure  bringing  expense  and  delay  upon  the  discharging  of  the  ship 
and  the  removal  of  its  cargo  from  the  pier. 

The  British  ports  have  not  needed  free  zones  because  Great  Britain 
has  been  a  free  trade  country.  No  device  was  required  to  eliminate 
harassing  British  customs  regulations.  The  free  zone  is  not  necessary 
for  Great  Britain.  It  was  designed  to  enable  a  port  in  protectionistic 
Germany  to  compete  on  an  equal  footing  with  British  ports  in  the 
transhipment  and  reexportation  trade. 

During  the  European  war  there  was  much  speculation  regarding  an 
increase  of  our  proportion  of  the  world's  trade  after  the  conflict. 
There  Avas  also  much  talk  of  New  York  replacing  London  as  the 
financial  center  of  the  world.  This  involves  replacing  her  as  inter- 
national middleman  and  the  world's  consignment  market  for  raw  ma- 
terials. Merchants  at  once  explained  that  our  customs  procedure 
interfered  with  any  such  development  here.  Investigations  showed 
how  Hamburg  by  means  of  the  free  zone  had  reconciled  a  high  pro- 
tective tariff  with  a  facility  equal  to  England's  in  the  development  of 
a  consignment  market  and  reexport  trade. 

In  1917  and  1918  the  United  States  Tariff  Commission  held  hear- 
ings throughout  the  country  on  the  subject  of  free  zones  and  rec- 
ommended to  Congress  that  it  pass  permissive  legislation  authoriz- 
ing the  creation  of  a  free  zone  in  each  port  of  entry.  Both  Senate 
and  House  committees  have  held  hearings  on  the  subject,  and  in  both 
branches  of  Congress  there  have  been  bills  providing  for  such  per- 
missive legislation  at  every  session  since  1918. 

There  is  no  subject  more  earnestly  and  constantly  discussed  than 
the  problem  of  increasing  the  volume  of  our  oversea  trade  and  supply- 
ing larger  cargoes  to  the  steamship  lines  originated  by  our  new  mer- 
chant marine.  The  free  zone  project  is  an  attempt  to  increase  our 
oversea  trading  in  a  direction  in  whicli  it  has  been  particularly  de- 
ficient. It  is  interesting  to  examine  just  what  a  free  zone  would  do 
for  an  American  port,  considering  what  free  zones  have  done  for  ex- 
ports elsewhere,  notably  in  Hamburg  and  Copenliagen. 

A  free  zone  is  usually  cliaracterized  as  a  facility  designed  to  aid  the 
reexport  trade.  The  ])riniary,  and  perhaps  most  important,  of  the 
benefits  which  it  confers  upon  a  port  is  little  mentioned  in  the  Ameri- 


1922]  Foreign  Trading  Zones  in  Our  Seaports  265 

can  discussions  of  the  subject.  First  of  all,  the  freedom  from  customs 
supervision  in  a  free  zone  hastens  the  unloading  of  ships  and  hence 
their  turn-around. 

Customs  regulations  prescribe  in  minute  detail  the  procedure  to  be 
followed  by  vessels  entering  or  clearing  at  our  ports.  Penalties  for 
failure  to  observe  this  procedure  often  fall  heavily  upon  tramp  cap- 
tains. Captains  and  agents  of  regular  lines  frequenting  a  port  can 
reduce  the  initial  delay  to  a  few  hours.  A  separate  set  of  customs 
inspectors  must  be  endured  by  each  vessel.  Only  by  taking  out  a  bond 
and  by  paying  double  compensation  for  the  overtime  of  the  customs 
employees,  is  it  possible  to  unload  at  night,  or  on  Sundays  and  holi- 
days. And  this  permission  to  unload  over  hours,  is  given  only  to 
vessels  that  have  been  designated  as  common  carriers  by  the  Secretary 
of  the  Treasury. 

^Vhen  dutiable  merchandise  has  left  the  ship,  it  cannot  be  removed 
from  the  pier  forthwith  to  make  space  for  other  cargo.  It  cannot  be 
removed  until  it  has  been  weighed,  sampled,  or  gauged  by  the  customs 
officials  and  until  the}^  have  given  permits  for  its  removal.  The  con- 
gestion thus  caused  slows  up  the  discharge  of  the  steamer.  The  Tariff 
Commission  heard  much  testimony  of  the  handicap  which  the  customs 
regulations  place  upon  the  economical  use  of  the  steamship  piers. 

Contrast  this  procedure  with  what  would  happen  to  a  ship  in  a  free 
zone  of  an  American  port.  The  pilot  would  bring  the  vessel  from  the 
open  sea  to  her  berth  at  the  free  zone.  Once  thus  berthed,  the  vessel 
would  discharge  by  day  or  night,  overside  or  on  the  pier,  and  there 
would  be  no  limitation  upon  her  hours  of  discharge,  whether  she  were 
tramp  or  common  carrier.  Dutiable  goods  could  discharge  upon 
trailers  and  these  be  moved  directly  to  the  supporting  warehouses  back 
of  the  pier.  The  pier's  floor  could  be  cleared  as  rapidly  as  the  ship 
discharged.  There  would  be  an  increase  in  the  handling  capacity  of 
these  berths  compared  with  those  outside  the  free  zone.  The  turn- 
around of  every  ship  there  would  be  expedited.  On  the  average,  60 
per  cent  of  the  operating  cost  of  voyage  lies  in  the  terminal  expenses. 
Reduce  these  largely  by  giving  the  ships  better  service  in  the  free  zone, 
and  few  lines  could  afford  not  to  berth  there,  other  things  being  equal. 

Another  element  that  would  make  the  free  zone  a  desirable  berthing 
place  is  that  its  facilities  would  be  modern,  in  many  cases  a  newly 
constructed  port  unit.  In  contradistinction  to  the  old  parts  of  the 
port,  the  piers  would  be  of  size  adequate  to  take  the  large  cargoes  of 
modern  liners  and  would  all  be  served  by  a  belt  line  connecting  with  all 
rail-carriers  of  the  port.  There  would  be  modern  freight-handling 
machinery  to  hasten  the  transfer  between  pier,  shed,  and  vessel.  There 
would  be  adequate  supporting  warehouses  adjacent  to  the  piers.  This 


266  Edwin  J.  Clapp  [June 

latter  facility  is  one  whose  absence  is  almost  iinexplainable  in  many 
American  ports.  At  Baltimore  and  Philadelphia  there  are  no  ware- 
houses within  a  long  distance  of  the  oversea  piers.  There  are  none  in 
New  York,  excepting  at  the  great  private  ocean  terminals  at  Long 
Island  and  Staten  Island.  So  the  free  zone,  furnishing  the  excuse  for 
the  construction  of  modern  terminal  units,  will  further  cheapen  and 
hasten  the  turn-around  of  vessels  in  the  port. 

There  has  long  been  a  superstition  that  our  bonded  warehouse  sys- 
tem has  sufficiently  served  our  needs  in  the  reexport  trade.  A  mer- 
chant can  place  dutiable  goods  in  such  a  warehouse,  give  the  govern- 
ment a  bond  equal  to  double  the  duties  assessable  thereon,  and  pay 
duty  on  such  goods  only  when  he  withdraws  them  from  bond.  If  he 
sells  them  abroad,  he  can  load  them  on  a  steamer  and  escape  the  pay- 
ment of  any  duty  whatever. 

There  are  many  things  which  a  merchant  would  like  to  do,  forbidden 
him  under  bonded  warehouse  regulations.  For  example,  he  is  forbidden 
to  alter  the  original  package  in  which  the  goods  were  placed  in  bond. 
At  the  hearings  before  the  Tariff  Commission,  a  New  York  importer 
of  Swiss  laces  told  his  experience.  He  imported  his  goods  in  heavy 
cases  and  had  them  in  bond  in  New  York.  Making  sales  to  South 
America,  he  desired  to  repack  the  goods  in  lighter  covering,  since  they 
were  to  pass  customs  duties  that  were  levied  on  the  gross  weight  of  the 
importation,  package  as  well  as  goods.  As  this  repacking  was  forbid- 
den in  bonded  warehouses  in  New  York,  he  was  obliged  to  forward  his 
cases  to  a  British  West  Indies  port,  where  the  repacking  was  per- 
formed. 

Before  the  war  a  large  volume  of  Argentine  tobacco  went  to  the 
Hamburg  Free  Zone  and  was  there  sorted  and  repacked  and  reshipped 
back  to  South  America,  to  United  States  and  all  parts  of  the  world.  It 
was  impossible  to  get  that  business  for  New  York  because  of  the  opera- 
tion of  the  bonded  warehouse  system.  Tobacco  as  it  comes  from  the 
Argentine  is  badly  done  up ;  it  must  be  cleaned  and  repacked  or  it  will 
rot.  Our  regulations  forbid  it  being  repacked  in  bond.  If  it  is  clear- 
ed— that  is,  if  the  customs  duties  are  paid  on  it — it  can  be  cleaned, 
repacked  and  exported,  and  a  drawback  collected  from  the  government 
equal  to  99  per  cent  of  the  duty  paid.  But  the  duty  is  paid  on  the 
gross  weight  of  the  tobacco  brought  in.  The  drawback  is  collected 
on  the  net  weight  sent  out,  the  spoiled  tobacco  having  been  in  the 
meantime  thrown  away,  unfit  to  export. 

In  the  British  ports,  and  in  Hamburg  before  the  war,  there  has 
always  been  a  heavy  reexport  trade  based  upon  such  operations  as  the 
mixing  of  teas  and  coffees,  the  cutting  of  wines,  the  packing  and 
bottling  of  foreign  goods  under  British  and  German  brands,  and  their 


1922]  Foreign  Trading  Zones  in  Our  Seaports  267 

subsequent  reexportation.  The  bonded  warehouse  system  makes  no 
provision  for  such  operations.  At  the  hearings  regarding  the  free 
zone,  American  merchants  testified  as  to  various  uses  they  would  make 
of  it,  impossible  now.  It  would  be  possible  there  to  clean  and  improve 
grades  of  corn  and  colfee  too  low  to  be  permitted  importation  into 
the  country  at  the  present  time.  They  would  not  then  come  into  the 
country;  they  are  not  in  this  country  until  they  cross  the  customs  line. 
The  lowest  grades  could  be  reexported  to  Central  American  countries 
whose  standards  are  less  exacting  than  ours.  Soya  beans,  pepper, 
matches,  and  gum  from  the  Far  East  could  likewise  be  graded  and 
sent  into  the  American  interior  or  reexported  according  to  the  condi- 
tions of  the  market.  Rice  could  be  cleaned,  conditioned,  and  similarly 
disposed  of. 

Somewhat  different  from  the  reexportation  trade  is  the  tranship- 
ment trade:  merchandise  that  does  not  pass  through  warehouses  at 
all  but  simply  moves  in  transfer  from  one  ocean  carrier  to  another  at 
the  port.  Such  transfer  movements  within  a  free  zone  would  be  con- 
ducted with  greater  freedom  than  attends  these  movements  by  means 
of  bonded  car,  truck,  or  lighter  within  an  American  port  today. 

Beyond  doubt  London's  rise  as  the  great  consignment  market  for 
the  raw  materials  of  the  world  was  due  largely  to  the  fact  that  Great 
Britain  was  the  chief  manufacturing  nation  and  hence  the  chief  mar- 
ket for  such  materials,  and  to  the  fact  that  London  was  a  money 
market  able  to  finance  the  holding  of  this  merchandise.  These  vital 
factors  in  the  location  of  the  consignment  market  at  London  might 
not  have  prevailed  if  the  goods  thus  consigned  had  faced  the  pros- 
pect of  being  locked  up  in  bonded  warehouses  upon  arrival,  subject 
to  inspection  only  at  the  pleasure  of  the  customs  guard  and  forbidden 
rehandling.  A  necessary  element  in  a  consignment  market  is  that 
merchants  and  buyers,  domestic  and  foreign,  shall  have  free  disposi- 
tion over  the  merchandise  therein.  Free  zones  will  create  the  basis  for 
such  a  consignment  market  in  this  country. 

The  technique  of  the  London  consignment  market  is  well  known. 
Many  raw  products  of  the  colonial  and  the  less  developed  countries 
come  upon  the  market  during  a  harvest  period  of  from  one  to  three 
months.  Their  consumption  is  spread  over  the  entire  year.  Some- 
where they  must  be  held  during  the  period  from  production  to  con- 
sumption. British  merchants,  British  financial  power,  British  ship- 
owners, concentrated  them  at  London,  where  they  were  graded  and 
sold  to  all  the  world.  The  producer  put  his  goods  on  board  ship, 
cabled  a  London  merchant  or  broker,  drew  on  him  for,  say,  80  per  cent 
of  the  current  value  of  the  merchandise,  and  received  the  balance  upon 
sale.     Thus  there  was  concentrated  in  the  warehouses  of  London  a 


268  Edwin  J.  Clapp  [June 

large  proportion  of  the  world's  supply  of  Argentine  and  Australian 
wool,  Egyptian  and  Indian  cotton,  East  Indian  and  Brazilian  rubber, 
rice  from  Indo-China,  tea  from  Ceylon  and  China ;  mahogany,  ivory  and 
palm  oil  from  the  West  Coast  of  Africa. 

Every  interest  in  Great  Britain  profited  from  the  concentration  of 
raw  materials  at  London.  British  brokers,  dealers,  and  banks  made 
money  from  this  international  trade  that  passed  through  their  hands. 
The  British  manufacturer  got  his  pick  of  materials.  He  bought  by 
direct  inspection,  not  by  description  or  grade.  He  bought  in  small 
quantities ;  he  had  no  necessity  of  carrying  heavy  stocks.  He  bought 
cheaper  than  his  rivals  abroad,  for  they  paid  his  price  plus  the 
freight  rate  from  England. 

The  British  shipowners  profited  by  carrying  these  products  to  Eng- 
land, and  again  carrying  them  from  England  when  they  had  been 
bought  at  the  auctions  of  the  consignment  market  by  purchasers  from 
foreign  lands.  Great  Britain  enjoyed  a  better  equipment  of  ocean  ser- 
vices, because  of  its  consignment  market  and  its  reexport  trade.  More 
ships  were  required  to  bring  the  materials  inbound  to  England  than 
if  they  had  been  bringing  only  English  supplies.  More  ships  sailed 
outbound  from  England  because  the  cargo  that  offered  was  not  only 
England's  products,  but  also  these  reexports  from  other  lands. 

The  volume  of  Great  Britain's  reexports,  before  the  war,  averaged 
20  per  cent  of  her  domestic  exports.  In  1913  her  domestic  exports 
were  £525,254,000;  reexports  were  £109,567,000.  That  is.  Great 
Britain  as  an  international  middleman  contributed  one  fifth  as  much 
to  the  total  volume  of  trade  as  did  Great  Britain  as  a  producer.  That 
proportion  was  maintained  in  1919,  but  in  1920  the  enormous  spurt 
of  British  domestic  exports  set  a  pace  too  rapid  for  reexports,  whose 
proportion  dropped  from  1 :  5  to  1 :  6.  In  1919  Great  Britain's  domestic 
exports  amounted  to  £798,635,000.  "Foreign  and  colonial"  exports 
amounted  to  £164,749,000.  In  1920  the  domestic  exports  were 
£1,335,569,000;  the  reexports,  £222,405,000. 

Great  Britain's  statistics  of  her  exports  to  us  show  how  largely  her 
trade  with  us  consists  of  reexports  from  other  lands.  In  1919  (latest 
figures)  she  sent  us  £33,913,000  of  domestic  British  products.  Her 
exportation  to  us  of  "foreign  and  colonial"  products  amounted  to 
£31,600,000.  The  leading  items  of  these  reexports  to  us  were  rubber, 
£6,790,000;  cotton,  £5,906,000;  liides  and  skins,  £4,285,000;  wool, 
£2,832,000.  The  few  available  1920  figures  show  that  Great  Britain 
in  that  year  sent  us  £15,640,000  of  cotton,  £6,310,000  of  wool, 
£6,890,000  of  rubber. 

Our  own  figures  of  reexportation  seem  rather  insignificant  in  com- 
parison.     In  the  fiscal  year  1914,  our  reexports  amounted  to  $35,000- 


1922]  Foreign  Trading  Zones  in  Our  Seaports  269 

000,  out  of  a  total  export  trade  of  $2,365,000,000.  The  reexports 
were  thus  about  1.5  per  cent  of  the  total.  In  the  calendar  year  1919, 
our  reexports  had  risen  to  $170,000,000,  which  was  slightly  over  2 
per  cent  of  the  total  exports  of  $7,920,000,000.  In  the  calendar 
year  1920,  our  reexports  of  $148,000,000,  were  well  under  2  per 
cent  of  our  total  exports  of  $8,229,000,000.  All  this  time  Great 
Britain's  reexports  have  remained  about  20  per  cent  of  her  domestic 
exports.  No  sign  here  that  we  are  replacing  her  as  the  financial  and 
commercial  center  of  the  world. 

Our  transhipment  trade  is  included  in  the  caption  "in-transit  and 
transhipment  trade"  in  the  government  figures.  If  we  subtract  from 
the  total  of  these  figures  the  merchandise  moving  to  or  from  Canada 
(in  transit)  the  remainder  is  the  true  transhipment  trade.  Such  sub- 
traction decimates  the  figures.  Our  transhipment  trade  thus  ascer- 
tained amounted  to  $21,000,000  in  1914,  $44,000,000  in  1918, 
$44,000,000  in  1919,  and  $76,000,000  in  1920. 

The  question  arises  whether  a  reconsignment  market  could  not  de- 
velop in  an  American  port  without  the  creation  of  free  zones.  It  could 
if  the  raw  materials  which  are  the  subject  of  such  a  market  were  duty 
free.  But  many  of  the  most  important  of  these  materials  are  subject 
to  duty ;  among  them  wool,  rice,  hides  and  skins.  Only  the  abolition 
of  customs  control,  as  in  a  free  zone,  can  provide  for  these  articles 
the  basis  of  a  consignment  market  in  freedom  in  grading,  cleaning, 
reconditioning,  mixing,  inspecting. 

The  opponents  of  free  zones  contend  that  the  United  States  has  not 
the  strategic  location  of  Hamburg  or  Copenhagen  with  respect  to 
adjacent  foreign  countries.  These  ports  lie  across  the  through  routes 
between  oversea  and  lands  on  the  Baltic  or  in  the  European  interior. 
It  is  an  act  of  stopping-in-transit  for  Hamburg  to  hold  and  distrib- 
ute merchandise  moving  in  this  trade.  For  goods  to  be  warehoused 
in  American  ports,  and  thence  reexported,  would  mean  an  unnatural 
diversion  of  through  routes.  But  if  there  is  not  a  saving,  a  com- 
mercial advantage,  in  the  use  of  American  free  zones,  they  will  not  be 
used.  Our  unstrategic  location  with  respect  to  the  reexport  trade  is 
more  apparent  than  real.  A  glance  at  the  Great  Circle  routes  used 
by  ships  shows  that  our  North  Atlantic  ports  have,  with  respect  to 
the  trade  between  Europe  and  the  West  Indies  and  the  Caribbean, 
a  position  comparable  with  that  of  Hamburg  with  respect  to  the  trade 
between  the  Baltic  and  oversea.  We  too  have  adjacent  countries  on 
the  same  continent  whose  trade  we  should  like  to  handle:  Canada  and 
Mexico. 

It  is  contended  that  free  zones  will  facilitate  the  entrance  of  Euro- 
pean manufactures  into  our  market  by  providing  them  with  convenient 


270  Edwin  J.  Clapp  [June 

duty-free  storage,  whence  they  can  promptly  be  forwarded  into  our 
interior  or  sent  to  ruin  our  trade  with  adjacent  countries.  Free  zones 
will  promote  commerce  at  the  expense  of  manufacturing.  There  is 
truth  in  this  argument.  Yet  Europe  will  export  to  us  and  to  nearby 
American  countries,  free  zones  or  no  free  zones.  That  is,  Europe 
will  thus  export  or  she  will  die.  If  her  exports  to  other  American 
countries  can  be  intercepted  in  our  free  zones,  our  merchants,  bankers 
and  shipowners  can  profit  from  the  trade.  In  the  reverse  direction, 
the  free  zone  will  intercept  raw  materials  and  foodstuffs  going  to 
Europe.  Europe's  industrial  recovery  will  require  much  American 
financial  aid.  It  is  not  hard  to  imagine  such  aid  in  connection  with 
the  shipment  of  merchandise  to  the  New  York  free  zone,  for  storage 
and  disposal  as  the  market  dictates. 

Some  free  zone  opponents  take  the  position  that  free  zones  are  not 
needed  and  would  not  be  used ;  others  hold  that  they  would  be  used 
and  would  injure  our  export  trade.  Both  contentions  are  probably 
wrong.  Free  zones  would  be  used ;  they  w^ould  not  largely  injure  our 
export  trade ;  rather  they  would  aid  in  the  creation  of  a  new  form  of 
export  trade,  now  lacking. 

If  Congress  passes  the  permissive  legislation,  the  realization  of  free 
zones  need  not  await  the  construction  of  new  port  terminals.  The 
Government  Army  War  Bases  in  various  Atlantic  and  Gulf  ports,  have 
been  or  are  being  turned  over  to  public  corporations  for  commercial 
use.  Each  of  these  bases  is  a  self-contained  unit  of  piers  and  ware- 
houses. It  need  only  be  surrounded  by  a  fence  to  become  a  free  zone. 
Army  bases  ideally  suitable  for  such  use  exist  at  Boston,  New  York, 
Philadelphia,  Norfolk,  Charleston  and  New  Orleans.  At  some  of  these 
a  free  zone  can  go  into  operation  within  a  few  weeks  after  the  bill 
becomes  law. 

The  experiment  is  worth  trying.  The  most  recent  bills  in  Congress 
authorize  the  Secretary  of  Commerce  to  grant  to  a  public  corporation 
in  each  port  of  entry  the  right,  at  its  own  expense,  to  establish  a 
foreign  trading  zone,  wherein  merchandise  may  "be  brought  into  a  zone 
and  there  stored,  exhibited,  broken  up,  repacked,  assembled,  distrib- 
uted, refined,  cleaned,  mixed  with  foreign  or  domestic  merchandise  or 
otherwise  mani})ulatod  and  reexported."  The  Secretary  of  the  Treas- 
ury is  to  assign  to  tlie  zone  the  necessary  customs  officials  and  guards. 
The  established  duties  are  to  be  collected  on  all  merchandise  brought 
inland  from  the  zone.  No  persons  are  allowed  to  reside  there  except 
those  officials  whose  resident  presence  is  deemed  necessary  by  the 
Secretary  of  Commerce.  No  retail  trade  is  to  be  conducted  within  the 
zone.  The  privilege  of  manufacturing  within  the  free  zone,  contained 
in  the  earlier  bills,  is  omitted  in  this  one.      The  advantage  of  the  manu- 


1922]  Foreign  Trading  Zones  in  Our  Seaports  271 

facturing  privilege,  of  course,  is  that  it  enables  a  plant  to  work  im- 
ported raw  materials  into  a  product  for  export  without  the  difficul- 
ties and  red  tape  that  now  beset  manufacturers  who  pay  duties  on  such 
imported  raw  materials  and  attempt  to  collect  drawbacks  upon  ex- 
portation. However,  few  American  manufacturers  could  afford  to 
locate  in  the  free  zone.  On  all  products  seeking  the  American  mar- 
ket they  would,  on  passing  the  customs  line,  pay  the  high  duty  on 
finished  products,  while  their  rivals  inland  would  pay  the  lower  duty 
on  imported  raw  materials. 

In  the  fog  of  discussion  as  to  means  of  improving  our  foreign  trad- 
ing position,  the  free  zone  looms  up  like  a  beacon. 

Edwin  J.  Clapp. 

New  York  City. 


COMMUNICATION 
Grain  Standardization 

The  American  Economic  Review  for  June,  1921,  contains  a  short 
article  on  Grain  Standardization,  part  of  a  paper  read  at  Atlantic  City, 
December  29,  1920,  by  Mr.  H.  Bruce  Price.  There  is  one  aspect  of  grain 
standardization  that  this  does  not  examine  though  it  may  have  been  covered 
in  a  part  of  the  paper  that  was  not  published.  In  a  general  way  there 
is  a  presumption  that  the  grain  that  is  graded  as  of  the  highest  quality 
according  to  the  standards  of  inspection  is  really  the  best  suited  for  eco- 
nomic use.  Now  this  is  not  necessarily  true.  Wheat  that  may  have  all  the 
external  appearances  of  being  of  the  first  quality  may  yet  be  lacking  in 
the  vitality  that  will  make  it  actually  a  first-class  milling  commodity.  The 
subtle  influences  of  climate  and  soil  composition  may  give  the  kernel  hard- 
ness, color,  fullness,  weight — in  short,  may  endow  it  with  all  the  appear- 
ances that  would  commonly  be  taken  as  the  indicia  of  quality.  Yet  quality 
may  be  lacking.  Nor  is  this  peculiar.  A  moment's  reflection  will  remind 
one  that  the  finest  looking  apple  of  a  particular  variety  may  not  equal  in 
its  distinctive  excellencies  a  less  handsome  specimen  of  the  same  variety 
grown  under  different  conditions.     Wheat  offers  a  parallel  illustration. 

The  significance  of  this  fact  has  been  revealed  in  the  laboratories  that 
are  becoming  a  recognized  adjunct  of  the  larger  milling  establishments. 
The  great  milling  companies  are  finding  it  pays  them  to  have  made  a  careful 
analysis  of  the  wheat  that  comes  from  different  districts  of  a  supply 
territory,  in  order  to  guide  more  successfully  their  buying  policy.  In 
certain  mills  by  carefully  compiled  card-index  systems  kept  through  a 
number  of  years  these  companies  are  able  to  form  very  definite  conclusions 
as  to  the  actual  quality  of  wheat  grown  in  certain  districts,  no  matter  what 
official  grade  may  be  placed  upon  it.  The  result  is  that  grain  from  some 
districts  sells  at  a  premium,  even  though  its  technical  grade  would  not 
appear  to  warrant  it.  Buyers  are  sent  into  this  territory  or  the  cars  are 
"spotted"  in  the  railway  yards  at  inspection  centers  and  selected  for 
purchase.  On  the  other  hand  carloads  from  other  districts  are  given  a 
wide  berth.  They  are  sold  on  their  official  grading  but  they  pass  on  to  the 
export  market  or  go  to  mills  less  alert  or  less  scientific  in  the  management 
of  their  business. 

The  wider  aspects  of  this  economic  classification  working  beneath  the 
official  system  open  up  problems  too  fundamental  to  be  dealt  with  in  a 
short  note,  however  worthy  they  may  be  of  consideration.  (1)  As  yet  I 
do  not  think  there  is  any  ground  for  complacency  as  to  the  efficiency 
of  the  methods  of  grain  standardization.  The  system  is  too  crude,  is 
necessarily  rough  and  ready,  and  does  not  get  close  enough  to  the  essential 
value-creating  element  in  tlie  grain.      (2)    If  in  any  really  large  degree  the 


19P.2J  Grain  Standardization         275 

milling  companies  are  combing  thn  officially  graded 
supplies  and  selecting  therefrom  the  best  for  their  ovn 
mills,  vrhat  about  the  quality  of  grain  that  is  exported 
from  the  American  continent?  Must  not  its  repute 
suffer?  Parenthetically,  I  may  add  that  I  aia   not  in  a 
position  to  estliaate  the  extensiveness  of  the  practice. 
There  is  no  doubt  that  it  takes  place.   (5)  How  far  are 
official  standards  reflected  in  the  value  of  wheat 
lands?  Values  in  certain  districts  rest  largely  upon 
the  ability  of  the  soil  to  produce  year  after  year 
wheat  of  the  first  quality  according  to  official 
classification.  Yet  this  particular  wheat  may  be  lack- 
ing in  the  best  oualities  for  which  it  is  intended  to 
be  used.  Factitious  values  in  wheat  lands  may  be 
created  by  imperfect  methods  of  classification. 

D.  A.  MacGibbon 
The  University  of  Alberta. 


274   (a)  REVIEIJS  AND  NSI-f  BOOKS 

General  Works,  Theory  and  Its  History 

Risk,  Uncertainty  and  Profit.  By  Frank  H.  Knight.  Hart 
Schaffner  and  Marx  Prize  Essays,  XMI.  (Boston: 
Houg-hton  Mifflin  Company,  1921.  Fv.   ir/,  581. 
$3.00.) 
The  chief  contribution  which  Professor  Knight  makes 
to  the  stock  of  ideas  current  in  economic  theory  is  a 
distinction  between  ^'risk"  and  ''-uncertainty. "  The 
term  risk  as  commonly  used 

really  covers  two  things  which,  =  .  .in  their 

casual  relations  to  the  phenomena  of  economic 

organization,  are  categorically  different 

The  essential  fact  is  that  "risk*  means  in  some  cases 
a  quantity  susceptible  of  measur-^ment,  while  at  othsr 
times  it  is  something  distinctly  not  of  this 

character a  measurable  uncertainty,  or 

■'risk"  proper, is  so  far  different  from  an 

unmeasurable  one  that  it  is  not  in  effect  an  un- 
certainty at  all  (pp.  19,:20)  . 

This  distinction  between  uncertainties  that  can  and 
that  can  not  be  measured  Professor  Knight  raises  to 
high  theoretical  importance  by  a  clever  exposition  of 
pure  economics.  Note  the  steps  in  his  argument: 
Economics  is  the  study  of  a  particular  form  of 
organization  of  human  want- satisfying  activity. . . — 
called  free  enterorise  or  the  comoetitive  system 
(p.  9). 

The  primary  attribute  of  competition is  the 

''tendency"  to  eliminate  profit  or  loss,  and  bring 
the  value  of  economic  goods  to  equality  with  their 

cost But  in  actual  society,  cost  and  value 

only  "tend'  to  equality; they  are  usually 

separated  by  a  margin  of  "'profit,"  positive  or 
negative  (pp.  18,19) . 

The  fundamental  difference  between  ''the  perfect 
competition  of  theory  and  the  remote  approach  to  it 
which  is  made  by  the  actual  ccxapetition  of,  say, 
twentieth-century  United  States"  is  the  absence  in  the 
first  case  and  the  presence  in  the  second  case  of  un- 
certainty, properly  defined.  Hence  the  dominating 
importance  of  this  concept  for  econo^iic  theory.   Along 
with  the  characteristics  which  differentiate  the  world 
of  pure  theory  from  the  world  of  experience,  un- 
certainty supplies  the  explanations  of  interest  and 


^74  (b) 
General  Works,  Theory  and  Its  History 

profits. 

Anyone  acquainted  -^-rith  the  exposition  of  economic 
theory  from  Jevons  and  Clark  to  Wicks teed  and 
SchiiGipeter  can  forecast  the  course  of  the  discussion 
which  follows.  First  comes  the  "analytical  construc- 
tion of  a  perfectly  competitive  society"  (p.  174). 
Then  the  suppositions  in  this  construction  which 
diverge  from  "real  life"  are  modified  or  dropped  one 
by  one.  Of  course  most  of  the  time-h'-.nored  issues 
of  economic  theory  come  up  for  comment  in  the  course 
of  the  journey,  and  on  each  of  them  the  writer  has 
somethinp;  to  say — some- 

(contined  on  p.  275) 


1922]  General  Works,  Theory  and  Its  History 


'liO 


thing  which  must  be  classified  and  catalogued  by  the  erudite  sojourn- 
ers in  this  land  of  speculation.  As  chapter  succeeds  chapter, 
the  sophisticated  reader  gains  a  pleasant  sense  of  traversing  familiar 
country  with  a  guide  who  has  found  new  by-paths  and  who  selects  a 
novel  pausing-point  from  which  to  survey  each  of  the  well-known  land- 
scapes. And  Professor  Knight  has  the  merit,  common  among  "pure 
theorists,"  of  always  knowing  where  he  is  and  telling  where  he  is  going 
ne^t.  As  he  says  in  the  preface,  this  book  "represents  an  attempt 
to  state  the  essential  principles  of  the  conventional  economic  doctrines 
more  accurately,  and  to  show  their  implications  more  clearly,  than 
has  previously  been  done.      That  is,  its  object  is  refinement." 

Whether  this  characterization  will  excite  or  deaden  interest  depends 
upon  the  make-up  of  the  reader.  But  even  those  who  prefer  a  very 
different  type  of  economic  theory  should  taste  the  book  before  putting 
it  aside.  For  the  distinction  between  risk  and  uncertainty  is  not  less 
valid  to  the  realistic  economist  than  to  the  pure  theorist.  Moreover, 
Professor  Knight  plays  tlie  dialectical  game  with  delightful  skill.  His 
book  is  thoroughly  organized  as  a  whole,  well  written  in  detail,  and 
not  over  long.  It  is  the  fresh  work  of  a  young  man  of  marked  ability 
who  has  profited  by  the  teaching  of  Alvin  Johnson,  Allyn  Young, 
Herbert  Davenport,  and  ^Maurice  Clark — a  young  man  interested 
in  economic  history  and  philosophy,  and  one  who  has  had  the  self- 
control  to  rewrite  his  disquisition  twice  before  going  to  press.  Anyone 
who  wishes  to  see  what  can  still  be  accomplished  in  economics  along 
the  conventional  lines  of  pure  theory  will  scarcely  find  a  better  or 
pleasanter  sample  to  study.  And  anyone  who  wishes  himself  to  culti- 
vate pure  theory  will  find  here  abundant  provocation  of  the  sort  he 
likes.  With  a  little  ingenuity  he  can  make  as  many  occasions  for 
differing  from  Knight's  "rigorous  thinking"  (p.  vii)  as  Knight  makes 
for  differing  from  Clark  and  Fisher,  Fetter  and  Davenport. 

Wesley  C.  Mitchele. 

The    Ricardian    Rent    Theory    in    Early    American    Economics.     By 
John  Roscoe  Turxek.      (New  York:  Xew  York  University-  Press. 
1921.      Pp.  xix,  201.) 
Professor  Turner  has  examined  critically  the  economic  writings  of 
Raymond,  Everett,   Phillips.  McMckar,   Cooper,   Newman.   Wayland, 
Vethake,   Cordoza.   Tucker.   Carey.   Bowen.   Ba;.cora.   Amasa   Walker, 
Perrv,  and  some  lesser  economists.      He  has  explored  a  mine  of  interest- 
ing contributions  which  has  been  practically  neglected  by  American 
economists  of  this  generation.      And  this  neglect  of  their  own  by  the 
American  economists  has  resulted  in  a  similar  neglect  on  the  part  of 
foreign   economists.      Gide   and   Rist,   in   their   History   of  Economic 
Doctrines,  mention  only  four  of  the  fifteen  economists  whose  writings 


276  Reviews  and  New  Books  [June 

Turner  discusses  in  detail.  And  even  in  these  instances  there  is  usually 
a  bare  reference  to  the  name  of  the  economist,  the  work  of  Carey  alone 
receiving  extensive  consideration.  For  example,  Dr.  Ncill's  work  on 
Raymond  is  mentioned  in  a  footnote  (p.  277).  But  Gide  and  Rist 
do  not  credit  Raymond  with  sole  responsibility  for  the  inspiration  of 
List's  national  system  of  political  economy.  Similarly,  McVickar  is 
mentioned  on  page  349  as  quoted  by  Seager.  A  footnote  on  page  550 
indicates  a  reference  made  to  Amasa  Walker  by  F.  A.  Walker.  Except- 
ing for  the  theories  of  Carey,  Gide  and  Rist  ignore  the  work  of  the 
early  American  economists. 

Even  Hancy,  in  his  Historu  of  Economic  Thought,  refers  to  only 
eight  of  the  fifteen  economists  in  question.  And  the  majority  of  these 
are  mentioned  only  incidentally,  Carey  again  being  the  only  one 
selected  for  detailed  discussion.  Raymond  is  barely  mentioned  (p.  239, 
297)  ;  Everett's  book  is  listed  in  a  bibliography  (p.  211)  ;  Wayland's 
name  is  given  as  one  of  the  writers  in  a  specific  period  (p.  514)  ;  Bowen, 
Amasa  Walker  and  Perry  are  named  as  critics  of  the  laAv  of  diminishing 
returns  and  of  the  INIalthusian  theory  of  population  (p.  511,  n). 
Bowen  is  named  as  one  of  those  influenced  by  Carey  (p.  249)  and  as  a 
professor  at  Harvard  (p.  516).  Perry,  along  with  Walker  and  Bas- 
com,  is  called  a  product  of  the  Civil  War  period  (p.  514)  and  is 
referred  to  as  a  professor  at  Williams  (p.  516).  All  in  all,  the  early 
American  economists  have  not  received  adequate  study  either  by  the 
European  or  by  the  American  economists.  Had  Professor  Turner 
done  nothing  more  than  focus  attention  on  these  contributions,  in- 
teresting alike  for  their  historical  bearing  and  for  the  keenness  of  the 
analyses,  his  work  would  have  justified  itself. 

In  his  introduction  to  Turner's  book.  Professor  Fetter  explains  this 
neglect  of  the  early  economists  on  the  ground  that  the  learning  of  the 
economists  in  America  suffered  by  contrast  with  that  of  their  English 
contemporaries  and  also  because  of  the  "dominance  of  Ricardian 
economics  in  America"  (p.  viii). 

Professor  Turner  gives  an  explanation  for  the  tardy  development 
of  economics  as  a  science  in  America  as  contrasted  with  its  earlier 
scientific  formulation  in  England.  Our  institutions  of  learning  em- 
phasized the  classics  in  their  curricula  and  our  public  men  centered 
their  attention  mainly  upon  the  tariff,  currency,  and  political  issues 
to  the  neglect  of  economics  as  a  science  (p.  5).  Further,  the  severe 
industrial  problems  which  gave  rise  to  the  study  and  development  of 
economics  as  a  science  in  England  were  not  present  in  America  where 
prosperity  and  an  outwai'd  look  featured  the  life  of  the  people.  The 
question  of  distribution  was,  therefore,  not  such  a  vital  one  in  America 
as  in  England  (p.  4.). 


1922]  General  Works,  Theory  and  Its  History 


277 


In  his  introductory  chapter  Turner  subjects  the  Ricardian  theory 
to  a  critical  analysis,  Ricardo,  he  holds,  approached  the  rent  problem 
through  his  theory  of  yalue,  a  labor-cost  theory.  This  necessarily 
forced  liim  to  exclude  rent  from  the  elements  constituting  cost  and  led 
to  the  view  of  rent  as  a  surplus,  a  theory  wliich  Turner  does  not 
accept.  Turner  approaches  rent  through  the  capitalization  process 
and  regards  ail  cultiyated  land  as  valuable  and  thus  as  rent-bearing 
(p.  12).  He  classifies  land  as  one  of  the  forms  in  which  capital  is 
invested,  in  this  respect  placing  himself  definitely  with  that  group  of 
modern  economists  which  has  rejected  the  classical  trilogy. 

Ricardo's  rent  theory,  according  to  Turner,  is  obscured  by  liis 
sliifting  from  commodity  rent  to  money  rent  and  by  a  confusion  of 
the  individual  and  the  national  points  of  view  (p.  18).  But  the  whole 
Ricardian  analysis  is  to  be  explained  by  the  industrial  conditions  of 
England  at  the  time  he  wrote.  Ricardo  was  influenced  by  his  desire 
to  make  out  a  case  against  the  landlord  class.  He  based  his  analysis 
upon  historical  diminisliing  returns.  Carey,  on  the  other  hand,  held 
a  dynamic  view  as  opposed  to  the  static  one  of  Ricardo.  Thus  there 
was  really  no  clash  between  the  two ;  they  merely  posited  different 
conditions,  and  it  is  not  true,  as  commonly  held,  that  Carey  rejected 
the  Ricardian  theory.  Care3''s  problem  was  simply  one  of  propor- 
tionality (p.  140). 

In  like  manner.  Turner  holds  that  Amasa  Walker  in  his  rejection  of 
the  Malthusian  theory  of  population  was  assuming  a  dynamic  state, 
whereas  Malthus  was  reasoning  from  a  static  point  of  view  (p.  173). 
Turner  rejects  the  prevailing  opinion  that  Walker  accepted  the 
Ricardian  rent  theory  and  shows  that  the  former  considered  land 
as  one  form  of  capital  (p.  177). 

In  general.  Turner  explains  the  rejection  of  the  Malthusian  and  the 
Ricardian  theories  by  the  peculiar  economic  conditions  in  the  newer 
countr}'.  Here  population  was  the  scarce  factor  and  land  was  the 
one  present  in  bountiful  suppU'.  The  economic  view  of  America  was 
one  of  optimism  and  prosperity ;  that  of  England  one  of  economic 
ills  and  pessimism.  The  outstanding  conclusion  wliich  one  derives 
from  an  examination  of  Professor  Turner's  book  is  that  the  economists 
in  any  country  usually  reflect  in  their  theories  the  environment  in  which 
they  live.  The  book  might  well  have  been  called  "an  economic  inter- 
pretation of  economic  theory." 

To  the  reviewer  it  appears  that  the  title  of  the  book  does  not  indicate 
clearly  the  scope  of  the  work.  True,  it  is  a  critical  examination  of  the 
Ricardian  rent  theory,  but  it  is  something  more  than  that.  The  em- 
phasis is  placed  on  rent  but  the  author  subjects  to  critical  analysis 
the  other  economic  doctrines  held  b}^  the  men  whose  works  are  studied. 


278  Reviews  and  Nero  Books  [June 

The  biographical  notes  given  in  the  case  of  each  economist  furnish  a 
background  on  which  his  theories  stand  out  in  bold  relief.  In  so  far 
as  his  own  views  are  concerned,  Professor  Turner  takes  here  the  same 
position  which  he  championed  in  his  Introduction  to  Economics,  a  book 
in  which  he  shows  himself  to  be  a  representative  of  that  American 
school  of  economists  some  of  the  outstanding  members  of  which  are 
Professors  Irving  Fisher,  Fetter,  and  Davenport.  The  book  is  a  real 
contribution  to  economic  literature  and,  it  is  to  be  hoped,  will  act  as  a 
stimulus  for  further  studies  in  which  the  other  cardinal  principles  of 
the  early  American  economists  will  be  considered  in  detail. 

Clyde  Olin  Fisher. 
Wesleyan  University. 

NEW    BOOKS 

BiRCK,  L.  V.  The  theory  of  marginal  value.  Studies  in  economics  and 
political  science,  no.  63,  London  School  of  Economics  and  Political 
Science.  (London:  Routledge.  New  York:  Button.  1922.  Pp.  viii, 
351.      14s.) 

BoxjcKE^  O.  F.  The  development  of  economics  1750 — 1900.  (New  York: 
Macmillan.      1921.      Pp.  348.) 

The  value  of  an  liistorical  survey  of  the  tlieories  concerning  some  par- 
ticular economic  problem  has  often  been  demonstrated,  most  notably  in 
Bohm-Bawerk's  great  work.  As  background  to  such  special  studies  the 
student  needs  a  general  view  of  the  development  of  the  principal  schools 
of  economic  thought  and  the  relations  between  them.  For  this,  however, 
principles  of  selection  and  arrangement  are  not  easily  determined,  and 
none  have  been  consistently  followed  in  the  general  histories  of  economics. 
Indeed  the  standpoints  and  specific  doctrines  of  every  important  period, 
in  their  diversity,  defy  classification. 

Professor  Boucke  has  achieved  some  imity  by  putting  forward  the 
philosophical  and  psychological  preconceptions  of  the  different  systems 
of  economic  thought  and  his  book  merits  attention  on  that  account.  It 
treats  not  of  "individual  writers  or  small  groups  of  them,"  but  of  "cur- 
rents of  thought  as  a  whole,"  the  entire  development  from  1750  to  1900 
being  considered  under  four  heads — Naturalism,  Utilitarianism,  His- 
torism,  and  Marginism.  Tlie  reduction  to  four  groups  is  something  of  a 
tour  de  force  and  strict  adherence  to  it  could  obviously  not  be  achieved. 
Thus,  in  the  chapters  on  Naturalism,  it  became  necessary  to  treat  of 
Adam  Smith  apart  from  the  Physiocrats.  His  inclusion  under  Naturalism 
brings  him  nearer  to  the  Physiocrats  than  to  the  classical  school  of 
English  economists  and  there  are  some  things  to  be  said  for  this  grouping. 
But  would  it  not  have  been  better  to  give  him  a  chapter  to  himself.^  In 
the  chapter  on  Utilitarianism  there  is  of  necessity  mention  of  a  consider- 
able number  of  writers  wlio  are  not  utilitarians  and  who  follow  inde- 
pendent lines  of  thought.  Under  Historism  we  have  a  discussion  of  both 
Collectivism  (in  a  very  broad  sense)  and  tlie  Historical  School  proper. 
It  would  seem  wiser  to  take  the  collectivists  by  themselves,  to  differ- 
entiate more  clearly  between  the  earlier  and  the  later  historical  schools, 
and  perhaps  also  to  give  a  separate  treatment  of  the  Romantic  school, 


1922]  General  Works,  Theory  and  Its  History  279 

whose  significance  in  the  history  of  German  economics  is   beginning  to 
attract  attention. 

The  book  touches  on  too  many  problems  to  be  summarized  within  the 
bounds  of  a  review.  Professor  Boucke  allows  himself  so  little  space 
for  his  wide  survey  of  economic  systems  and  their  philosophical  back- 
grounds that  it  is  impossible  for  him  to  satisfy  the  critical  reader.  Vague 
generalizations,  indeed,  are  pretty  well  avoided,  but  in  the  effort  to  make 
condensed  and  yet  explicit  statements,  our  author  becomes  cryptic.  That 
he  can  write  clearly  and  forcibly  appears  when  he  forgets  the  limits 
imposed  on  himself  and  allows  his  discourse  to  expand.  He  has  obviously 
matter  for  a  good  book  of  more  than  twice  the  size  of  the  one  which  he 
has  written.  Unlike  most  writers  he  might  be  counselled  to  amplify 
rather  than  contract. 

G.  A.  Kleene. 

Trinity  College. 

BouGLE,  C.  Legons  de  sociologie  sur  I'evolution  des  valeurs.  (Paris: 
Lib.  Armand  Colin.      1922.      Pp.  xv,  287.      7  fr.) 

Conrad,  J.  Leitfaden  zum  Stadium  der  politischen  OeJconomie.  Part  I, 
Nationalokonomie.  Second  edition.  (Jena:  Fischer.  1921.  Pp.  viii, 
137.     9  M.) 

Edie,  L.  D.  Principles  of  the  new  economics.  (New  York:  Crowell.  1922. 
Pp.  550.     $2.75.) 

Eppich,  E.  Die  philosophischen  Grundlagen  der  Nationalokonomie.  (Mu- 
nich: Rosl.      1921.      Pp.  138.      10  M.) 

Fetter,  F.  A.  Modern  economic  problems.  Vol.  II.  Second  edition,  re- 
vised.     (New  York:  Century.      1922.      Pp.  611.     $2.75.) 

GiDDiNGs,  F.  H.  Studies  in  the  theory  of  human  society.  (New  York: 
Macmillan.      1922.      Pp.  vi,  308.     $3.) 

GoNNARD,  R.  Histoire  des  doctrines  economiques  de  Platon  a  Quesnay. 
(Paris:  Nouvelle  Lib.  Nationale.      1922.) 

Hecht,  J.  S.  The  real  wealth  of  nations,  or  a  new  civilization  and  its 
economic  foundations.  (Yonkers-on-Hudson,  N.  Y. :  World  Book  Co. 
1921.      Pp.  X,  350.      $2.40.) 

In  two  ways  this  book  resembles  the  famous  work  the  name  of  which  is 
paraphrased  in  the  title :  first,  the  author  begins  with  a  foundation  laid 
in  the  eighteenth  century  and  virtually  constructs  thereupon  a  completely 
new  system  of  economics ;  second,  a  goal  is  fixed  toward  which  most  of 
the  reasoning  leads.  However,  the  trend  of  Mr.  Hecht's  argument  is 
exactly  opposite  to  that  followed  by  Adam  Smith ;  for  while  "The  Father 
of  Political  Economy"  sought  to  demonstrate  the  superiority  of  laissez 
faire  over  all  other  systems,  and  especially  the  advantages  of  freedom 
of  trade,  Mr.  Hecht  believes  strongly  in  regulating  almost  every  phase 
of  economic  activity  and,  most  of  all,  in  controlling  foreign  trade  and 
exchange. 

Throughout  the  book,  orthodox  economic  theory  is  roundly  condemned. 
Economics  is  treated  as  a  branch  of  ethics,  and  the  book  is  devoted  to  de- 
scribing what  ought  to  be  done  under  each  set  of  circumstances  mentioned. 
Values  based  upon  supply  and  demand  are  denounced  as  unethical, 
and,    as    a    substitute,    Mr.    Hecht    would    compel    all    exchanges    to    be 


280  Reviews  and  New  Books  [June 

made  upon  the  basis  of  relative  costs  as  measured  in  terms  of  days' 
supplies  of  necessaries  consumed  by  the  workers  during  the  process  of 
production.  Much  stress  is  laid  upon  the  distinction  between  neces- 
saries and  luxuries ;  also  upon  the  difference  between  skilled  and  unskilled 
labor.  All  advance  in  civilization  is  ascribed  to  the  superior  skill  of  some 
of  the  workers,  especially  the  entrepreneurs.  It  is  contended  that  a 
nation's  economic  policy  should  be  so  framed  as  to  strengthen  industries 
employing  much  skilled  labor  and  to  protect  the  reserves  of  national 
resources. 

The  author  seems  to  have  taken  pains  to  include  in  his  creed  as  many  as 
possible  of  the  popular  theories  which  orthodox  economists  believe  to  be 
exploded  fallacies.  Trade  is  placed  without  the  pale  of  production  and 
merchants  are  therefore  considered  to  be  annoying  parasites — though 
withal  somewhat  necessary.  "Intrinsic"  values  are  deemed  to  be  un- 
changeable qualities  of  commodities.  Most  problems  of  population  as 
well  as  those  of  money  and  finance  are  lightly  waved  aside  as  unworthy 
of  serious  consideration.  The  book  is  characterized  throughout  by  broad 
assertions  supported  by  relatively  little  evidence.  The  theory  evolved 
gives  the  impression  of  having  been  woven  by  a  very  loose  process  of 
reasoning  from  a  warp  consisting  of  newspaper  and  street-corner  eco- 
nomics and  ethics  and  a  woof  composed  of  hazy  impressions  garnered  from 
the  writings  of  various  economists.  The  conclusions  based  upon  this 
quality  of  principles  necessarily  fail  to  convince  the  reader  of  their 
validity. 

Such  strength  as  the  book  possesses  lies  in  the  fact  that  it  contains 
many  good  illustrations  of  accepted  economic  truths  and  that  it  empha- 
sizes such  fundamental  ideas  as  the  necessity  of  maintaining  production 
and  of  conserving  natural  resources. 

WiLLFORD  I.  King. 

HoBHOUSE,  L.  T.  The  elements  of  social  justice.  (London:  Allen  & 
Unwin.      1922.      Pp.  ix,  208.) 

HussLEiN,  J.  C.  Work,  wealth  and  wages.  (Chicago:  Matre  &  Co.  1921. 
Pp.  xiii,  159.) 

KiEKHOFER,  W.  H.  An  outline  of  the  elements  of  economics.  Fourth  re- 
vised edition.      (Menasha,  Wis.:  George  Banta  Pub.  Co.      1921.   Pp.  135. 

$1.25.) 

Lauck,  W.  J.  Economics  and  human  welfare.  Address  before  conference 
on  governmental  efficiency.  (Richmond:  Virginia  League  of  Women 
Voters.      1921.      Pp.  11.) 

Magee,  J.  D.  Problems  in  economics.  (New  York:  Scribner's.  1922. 
$2.50.) 

Matich,  H.  Die  Entrcicklung  der  vergleichenden  JVirtschaftstheorie. 
(Essen:  G.  D.  Baedeker.      1921.      Pp.  viii,  69.      14-  M.) 

MoELLEn,  H.  Die  socialokonomische  Kategorie  des  Wertes.  (Vienna: 
Franz  Deuticke  Verlag.      1922.      Pp.  100.      25  M.) 

MuKERJEE,  R.  Principles  of  comparative  economics.  Two  vols.  (London: 
King.      1921.      Pp.  364-;    152.      15s;   18s.) 

Park,  R.  E.  and  Burgess,  E.  W.  Introduction  to  the  science  of  sociology. 
(Chicago:  Univ.  of  Chicago  Press.      1921.      Pp.  xxi,  1040.     $4.50.) 


1922]  General  Works,  Theorjj  and  Its  Hisiorij  281 

This  book  of  readings,  skilfully  woven  together  by  introductory  and 
interpretative  passages,  will  prove  a  welcome  aid  to  those  called  upon  to 
administer  general  sociology  to  the  undergraduate.  It  presents  an 
abundance  of  interesting  material  grouped  under  the  titles.  Human  nature. 
Society  and  the  group,  Isolation,  Social  contacts.  Social  interaction, 
Social  forces,  Competition,  Conflict,  Accommodation,  Assimilation,  Social 
control,  Collective  behavior.  Progress.  Most  of  it  is  drawn  not  from 
literature  labelled  "sociology,"  but  from  the  writings  of  specialists  in 
other  fields  and  particularly  from  the  investigators  and  observers  of 
psychological  phenomena.  One  almost  gets  the  impression  that  soci- 
ologists let  other  people  do  the  work  and  merely  contribute  an  impressive 
and  suggestive  terminology.  The  editors  are  members  of  the  depart- 
ment of  sociology  of  the  University  of  Chicago. 

G.  A.  Kleexe. 

Phelps,  F.  W.  and  Mvrick,  J.  B.  Utilitarian  economics ;  a  series  of  fifty 
utilitarian  values.  (Seattle,  Wash.:  School  of  Utilitarian  Economics,  826 
Seaboard  Bldg.      1921.      Pp.  261.     $2.) 

VON  Philippovich,  E.  and  Somary,  F.  Grundriss  der  politischen  Oehonomie. 
Vol.  II,  Volkstcirtschaftspolitik.  Part  II.  Tenth  edition  revised.  (Tiibin- 
gen:  Mohr.      1921.      Pp.  343.      75  M.) 

Roberts,  G.  E.,  editor.  Economics  for  executives.  (New  York:  Ameri- 
can Chamber  of  Economics,  Inc.      1921.) 

Seligman,  E.  R.  a.  Principles  of  economics,  teitJi  special  reference  to 
American  conditions.  Ninth  edition  revised.  (New  York:  Longmans, 
Green  and  Co.     Pp.  liv,  711.     $3.) 

This  volume  is  substantially  a  reprint  of  the  eighth  edition,  published 
in  1919.  Chapters  and  paragraphs  in  the  table  of  contents  are  identical 
and  the  paging  has  been  preserved.  The  work  of  revision  has  been 
limited  to  an  extension  of  some  charts  and  tables  of  statistics  to  cover  the 
intervening  two  years.  Considering  the  intensity  of  student  and  public 
interest,  the  stimulating  character  of  the  materials  involved,  and  the 
supreme  importance  of  a  correct  apprehension  of  the  issues,  it  seems 
deeply  regrettable  that  the  widely  popular  text  is,  as  yet,  so  slightly 
affected  bv  the  events  of  the  Great  War. 

C.  E.  P. 

Simpson,  K.  Economics  for  the  accountant.  (New  York:  Appleton.  1921. 
Pp.  xi,  206.     $2.) 

The  accountant  and  the  economist  deal  with  substantially  the  same 
data,  though  from  different  perspectives  and  for  different  purposes.  The 
economist  views  things  mainly  from  the  broader  social  aspect,  but  the 
accountant  is  interested  for  the  most  part  in  facts  as  they  affect  the 
individual  employer  or  entrepreneur.  Necessarily,  the  accounant's  use- 
fulness will  be  greatly  handicapped  unless  he  has  a  thorough  under- 
standing of  the  functioning  of  the  economic  system  of  which  his  concern 
is  part. 

An  attempt  is  made  in  this  brief  text  to  summarize  for  the  benefit  of 
the  accountant  the  general  principles  of  economics.  As  far  as  it  goes 
it  does  very  well  in  outlining  the  subject-matter  and  pointing  out  the 
fundamentals.  However,  as  might  be  expected  from  such  a  short  treatise, 
much  to  be  desired  has  been  left  undone  or  covered  only  to  a  very  limited 


282  Reviews  and  New  Books  [June 

degree.  For  instance,  distribution  has  been  covered  in  twelve  pages, 
rent  as  a  cost  item  in  two  pages,  depreciation  as  a  cost  item  in  three 
pages,  good-will  in  tliree  pages,  valuation  of  capital  goods  in  six  pages, 
and  taxation  in  nine  pages. 

M.  J.  Shugrue. 

Taussig,  F.  W.  Principles  of  economics.  Vol.  II.  Third  revised  edition. 
(New  York:  Macmillan.      1921.      Pp.  576.) 

Von  Koch,  F.  M.  On  the  theories  of  free  trade  and  protection:  a  survey 
and  a  criticism.      (London:  King.      1922.      Pp.  34.      Is.) 

Property,  its  deities  and  rights  historically,  philosophically  and  religiously 
regarded.  Essays  by  various  writers  with  an  introduction  by  the  Bishop 
OF  Oxford.  New  edition.  (New  York:  Macmillan.  1922.  Pp.  xxiv, 
243.      $2.) 

Economic  History  and  Geography 

NEW  BOOKS 

Alzona,  E.  Some  French  contemporary  opinions  of  the  Russian  Revolu- 
tion of  1905.  Columbia  University  studies  in  history,  economics,  and 
public  law,  vol.  C,  no.  2.  (New  York:  Longmans  Green.  1921.  Pp. 
117.) 

Babelon,  E.  C.  F.  Les  monnaies  grecques;  apergu  historique.  (Paris: 
Payot.      1921.      Pp.  100.      4  fr.) 

BiDou,  H.  and  others.  Les  consequences  de  la  guerre.  Conferences  organ- 
ized by  the  society  of  former  pupils  of  I'Ecole  Libre  des  Sciences  Poli- 
tiques.      (Paris:  Lib.  Felix  Alcan.      1921.      Pp.  189.      7  fr.) 

Boissonade,  B.  The  travail  dans  I'Europe  chretienne  au  moyen  age.  (Paris: 
Lib.  Felix  Alcan.      1921.      18  fr.) 

Brand,  R.  H.  War  and  national  finance.  (New  York:  Longmans  Green. 
1921.      Pp.  xii,  287.     $5.) 

Brinckmeyer,  H.  Hugo  Stinnes.  Translated  by  A.  B.  Kuttner.  (New 
York:  Huebsch.      1921.      Pp.  ix,  150.     $1.50.)' 

Contains  cliapters  on  the  Mining  Trust  and  the  Electro  Mining  Trust. 
Final  two  cliapters  are  entitled  "Stinnes  and  the  socialization  of  in- 
dustries" and  "The  significance  of  Stinnes  in  German  economic  develop- 
ment." 

Bryce,  J.  International  relations.  Eight  lectures  delivered  in  the  United 
States  in  August,  1921.  (New  York:  Macmillan.  1922.  Pp.  xii,  275. 
$2.50.) 

Lecture  III,  entitled  "Non-political  influences  affecting  international 
relations,"  discusses  connnercial  and  economic  interests,  as,  for  example, 
international  trade,  tariff,  fishery  rights,  international  finance. 

Ernst,  R.  Die  Eingliederung  der  verlriehenen  Elsass-Lothringer  in  das 
deutsche  Wirtschaftslehen  im  Augenblick  seines  Tiefstandes.  (Berlin: 
Vereinigung  Wissenschaftlicher  Verlegcr.      1921.      Pp.  viii,  187.      20  M.) 

Fisher,  O.  P.  Autobiography  of  Orrin  Paid  Fisher,  banker  and  financier. 
(San  Francisco:  San  Francisco  Pub.  Co.      1921.      Pp.  vii,  347.) 


1922]  Economic  History  and  Geography  283 

FouRNiER,  J.  La  Chamhre  dc  Commerce  de  Marseille  et  ses  representants 
permanents  a  Paris  1599-1875.      (Marseilles:  Barlatier.   1920.   Pp.334.) 

Fuller,  W.  D.     American  industries.      (New  York:  Macmillan.      1922.) 

Gilbert,  B.  Old  England,  a  God's-eye  view  of  a  village.  (London: 
Collins.      1922.      20  s.) 

Harper,  W.  H.,  editor.  Chicago,  a  history  and  forecast.  (Chicago:  Chicago 
Assoc,  of  Commerce.      1921.      Pp.  256.) 

Hazard,  B.  E.  The  organization  of  the  hoot  and  shoe  industry  in  Massa- 
chusetts before  1875.  (Cambridge,  Mass.:  Harvard  Univ.  Press.  1921. 
Pp.  X,  293.     $3.50.) 

The  author  has  made  a  careful  study  of  the  genesis  and  development 
of  the  boot  and  shoe  industry  in  Massachusetts  to  1875.  An  interesting 
feature  of  the  volume,  imposed  upon  the  author  for  want  of  printed 
material,  is  the  record  of  oral  sources  obtained  from  some  thirty  or  more 
persons  born  from  eighty  to  one  hundred  years  ago,  all  of  whom  were 
engaged  at  one  time  or  another  in  the  shoe  business.  In  addition.  Miss 
Hazard  had  access  to  record  and  account  books,  as  well  as  to  the  custom- 
ary range  of  newspapers  and  histories.  The  adequacy  of  these  sources, 
and  the  care  in  the  treatment  of  the  material,  render  the  volume  a  valuable 
contribution  to  the  history  of  one  of  our  most  important  industries.  An 
appendix,  covering  upwards  of  half  the  volume,  contains  extracts  from  a 
number  of  inaccessible  sources.  The  history  of  the  industry  is  traced 
in  order  through  the  various  phases  of  home  and  handicraft  manufacture, 
and  in  the  domestic  and  factory  stages.  A  final  chapter  is  devoted  to 
The  Human  Element  in  the  Boot  and  Shoe  Industry. 

According  to  the  author,  the  information  gathered  in  her  research  seems 
to  confirm  "inductively  and  with  definite  evidence  of  the  transitions,  the 
stages  of  evolution  set  forth  by  Karl  Biicher,"  with  the  qualification  that 
"although  the  stages  are  distinct  as  to  characteristics  and  essential 
features,  they  are  not  so  as  to  time,  for  overlaps  and  survivals  occur." 
Apparently  there  were  two  phases  of  the  home  stage,  namely,  purely 
home-made  boots  and  itinerant  cobbler's  work.  Likewise,  the  handicraft 
stage  is  marked  by  two  phases,  namely,  bespoke  work,  and  extra-sale 
work.  These  features  are  studied  in  connection  with  the  development  of 
the  industry  in  New  England  towns. 

Three  phases  are  noted  in  the  domestic  stage.  The  first,  covering  the 
years  from  1760  to  1810,  is  the  putting-out  system.  The  second,  dating 
from  about  1810  to  1837,  is  characterized  chiefly  by  "specialization  in 
processes  and  the  rise  of  the  central  shop."  The  third  phase,  covering 
the  years  from  1837  to  1855,  is  distinguished  by  various  characteristics, 
including  the  growth  of  distinct  boot  and  shoe  centers,  the  expansion  of 
the  business  to  secure  new  markets  and  new  classes  of  trade,  and  hence 
the  introduction  of  new  styles  and  of  a  great  variety  of  shoes.  The 
California  and  frontier  trade  begins  to  have  a  pronounced  effect  on  the 
industry.  Meanwhile,  "a  new  stage  of  organization  came  in  the  boot 
and  shoe  industry,  bringing  to  an  end  not  only  the  third  phase  but  the 
main  life  of  the  domestic  stage,  where  the  putting-out  system  had  prevail- 
ed and  the  entrepreneur  had  worked  in  his  central  shop  while  the  domestic 
workers  labored  in  their  'ten-footers.'  Only  the  'making,'  i.e.,  lasting 
and  bottoming,  of  sewed  shoes  continued  to  be  done  by  domestic  workers 
far  into  the  next  period,  until  the  McKay  machine  for  sewing  soles  and 


284  Reviews  and  New  BooKs  [June 

finally  the  Goodyear  welting  machine  put  an  end  to  this  last  survival  of 
the  domestic  system."  Under  phase  one  of  the  factory  stage,  covering 
the  years  from  1855  to  1875,  the  author  discusses  the  growth  of  the  new 
organization,  of  new  financial  problems,  the  effect  of  the  Civil  War  on 
the  boot  and  shoe  industry,  the  rise  of  modern  labor  problems,  and  other 
subjects  peculiar  to  this  period. 

Isaac  Lippincott. 

Hebert,  F.  Forty  years  prospecting  and  mining  in  the  Black  Hills  of 
South  Dakota.  (Rapid  City,  S.  D. :  Rapid  City  Daily  Journal.  1921. 
Pp.  199.) 

Hersent,  G.  and  others.  L'otitillage  economique  de  la  France.  Confer- 
ences organized  by  the  society  of  former  pupils  of  I'Ecole  Libre  des 
Sciences  Politiques'.      (Paris:  Lib.  Felix  Alcan.      1921.      Pp.237.     8  fr.) 

Keynes,  J.  M.  A  revision  of  the  treaty.  Being  a  sequel  to  The  economic 
consequences  of  the  peace.  (New  York:  Harcourt,  Brace  &  Co.  1922. 
Pp.  viii,  242.      $2.) 

Landau-Aldanov,  M.  A.  Lenin.  Authorized  translation  from  the  French. 
(New  York:  Button.      1922.      Pp.  ix,  241.     $3.) 

Osgood,  E.  L.  A  history  of  industry.  (Boston:  Ginn.  1921.  Pp.  430. 
$1.72.) 

As  this  handy  text  traces  human  industry  from  the  time  of  the  stone 
age  to  the  present,  including  the  countries  of  the  ancient  Orient,  Europe, 
and  America,  each  subject  is  necessarily  treated  in  the  briefest  possible 
paragraphs.  The  title  is  somewhat  misleading;  this  is  not  true  history, 
as  it  records  results  mainh^,  not  the  causes  also  which  produced  those 
results.  It  is  a  broad  survey  or  outline  of  the  chief  phases  of  industrial 
development.  It  aims  to  show  to  high-school  students  economic  laws 
in  action  in  the  past  as  a  preliminary  to  a  short  course  in  economics  in 
which  they  can  apply  these  laws  to  the  problems  of  today.  A  sketch 
of  the  whole  field  of  industry  in  the  United  States  occupies  the  last 
quarter  of  the  volume.  The  colonial  period  is  handled  in  two  chapters, 
one  setting  forth  general  industrial  conditions  in  the  colonies,  the  other 
describing  the  various  industries  and  trades  carried  on.  Next,  the  devel- 
opment between  1808  and  1865  is  summarized  in  twenty  pages  under  the 
heading  The  Industrial  Revolution.  A  short  chapter  of  eight  pages 
states  the  effects  of  the  Civil  War  on  economic  conditions,  and  the  last 
thirty  pages  deal  with  industry  since  1865.  The  illustrations  are  exceed- 
ingly well  chosen;  for  these  the  Metropolitan  Museum  of  Art  has  been 
largely  drawn  upon.  The  autlior's  teacliing  experience  appears  in  the 
excellent  arrangement  of  the  material,  and  in  the  use  of  bold-face  type 
to  indicate  leading  subjects  and  italics  for  the  sub-divisions.  There  are 
the  usual  topics  for  discussion  and  reading  references. 

Amelia  C.  Ford. 

Parker,  E.  H.  China,  her  history,  diplomacy,  and  commerce  from  the 
earliest  times  to  the  establishment  of  the  Chinese  Republic  in  1917.  (New 
York:  Button.      1922.      $5.) 

Pasvolsky,  L.  Russia  in  the  Far  East.  (New  York:  Macmillan.  1922. 
Pp.  ix,  181.      $1.75.) 

Pettigrew,     R.     F.      Triumphant     plutocracy.      The     story     of     American 


1922]  Agriculture,  Mining,  Forestry  and  Fisheries  285 

public  life  from  1870  to  1920.      (New  York:  Direct  Sales  Book  Agency, 
31  Union  Square.      1922.      Pp.  445.     $1.) 

Prout,  H.  G.     a  life  of  George   Westinghouse.      (New  York:  Scribner's. 

1921.  Pp.  xi,  375.     $2.50.) 

Stewart,  W.  J.  Keir  Hardie:  a  biography.  With  an  introduction  by 
J.  Ramsay  MacDonald.      (London:  Cassell.      1922.      Pp.387.      15  s.) 

Welbourne,  E.  a  social  and  industrial  history  of  England.  Modern 
times.      (London:  Collins.      1922.      Pp.  212.) 

The  American  Jewish  year  booh,  5682,  October  3,  1021,  to  September  22, 

1922.  Vol.    XXIII.     Edited    by    H.    Schneiderman.      (Philadelphia: 
Jewish  Pub.  Soc.  of  America.      1921.      Pp.  x,  423.) 

The  proceedings  of  the  Hague  Peace  Conferences.  The  conferences  of 
1899  to  1907,  index  volume.  Division  of  International  Law  of  the  Car- 
negie Endowment  for  International  Peace.  James  Brown  Scott,  director. 
(New  York:  Oxford  Univ.  Press.      1921.     Pp.  viii,  272.) 

The  revival  of  American  business.  Edited  by  C.  H.  Crennan.  (Phila- 
delphia: Am.  Academy  of  Polit.  and  Soc.  Sci.      1921.      Pp.  xxviii,  196.) 

The  Westover  journal  of  John  A.  Selden,  Esqr.,  1858-1862.  Edited  by 
J.  S.  Bassett  and  S.  B.  Fay.  Smith  College  studies  in  history,  vol.  VI, 
no.  4.  (Northampton,  Mass.:  Smith  College,  Dept.  of  History.  1921. 
Pp.  257-330.) 

Year  book  of  the  state  of  Colorado,  1021.  (Denver:  State  Board  of  Immi- 
gration.     1921.      Pp.  145.) 

Agriculture,  Mining,  Forestry  and  Fisheries 

NfiW  BOOKS 

Adams,  R.  L.  Farm  management;  a  textbook  for  student,  investigator,  and 
investor.      (New  York:  McGraw-Hill.      1921.      Pp.  xx,  671.) 

Bailey,  L.  H.  Cyclopedia  of  farm  crops.  (New  York:  Macmillan.  1922. 
Pp.  xvi,  699.     $6.) 

Bizzell,  W.  B.  Farm  tenantry  in  the  United  States.  A  study  of  farm 
tenantry  and  its  economic  and  social  consequences  on  rural  welfare  with 
special  reference  to  conditions  in  the  South  and  Southxoest.  Bulletin  278. 
(College  Station,  Texas:  Texas  Agri.  Experiment  Sta.,  Division  of  Farm 
and  Ranch  Economics.      1921.      Pp.  408.) 

After  an  introduction  of  more  than  one  hundred  pages,  in  which  the 
author,  finding  the  origin  of  farm  tenantry  in  the  feudal  system,  traces 
its  development  through  the  centuries  to  the  United  States,  he  sum- 
marizes the  theories  of  the  principal  early  economists  on  the  subject 
and  gives  a  classification  of  the  practical  forms  of  land  tenure  today. 

The  chief  problems  of  tenantry  in  this  country  are  stated  as  follows : 
"The  effect  of  agricultural  production  on  cultivation  of  land  by  a  number 
of  tenants  out  of  due  proportion  to  actual  farm  owners ;  the  undesira- 
bility,  from  the  standpoint  of  agricultural  production,  of  a  large  farm 
population  composed  of  farm  tenants  who  have  abandoned  hope  of  acquir- 
ing a  farm  home ;  the  undesirability,  from  the  standpoint  of  the  good  of 
the  rural  community,  of  a  large  farm  population  composed  of  tenants  who 


286  Reviews  and  New  Books  [June 

are  economically  and  socially  indifferent  to  community  betterment;  the 
inadequacy  of  farm  tenantry  as  a  moral  and  religious  asset." 

The  indicated  social  effects  of  farm  tenantry  may  be  summarized:  a 
lower  intellectual  standard  of  living,  causing  a  decreased  interest  in 
education  and  lowering  the  moral  standard  of  tenants ;  indifference  to 
religious,  civic  and  social  affairs  of  the  community. 

Economic  effects  of  the  system  are  given  as  follows :  " (I)  depletion  of 
soil  fertility;  (2)  impossibility  of  maintaining  proper  rotation  of  crops 
and  the  application  of  other  scientific  methods  under  a  transient  tenantry 
system;  (3)  a  general  reduction  in  the  average  farm  income;  (4)  eco- 
nomic income  influences  to  a  large  degree  standards  of  living  and  cultural 
opportunities.  The  average  income  of  the  farm  tenant  is  too  low  to 
secure  these  advantages." 

The  chief  interest  of  the  author  is  in  the  problems  of  the  farm  tenant, 
which  he  considers  in  the  light  of  the  inadequate  labor  income,  the  influ- 
ence of  land  values,  of  crop  production,  and  of  size  of  farms ;  the  form 
of  lease ;  the  methods  of  financing  tenant  farm  operations ;  the  influence 
of  immigration. 

The  all-inclusive  problem  of  the  farm  tenant,  the  author  points  out,  is 
the  attainment  of  farm  ownership.  The  chief  factors  in  this  problem  are 
(1)  an  inadequate  labor  income;  (2)  speculation  in  land  values;  (3)  un- 
satisfactory credit  facilities.  To  aid  in  the  solution  of  this  problem,  the 
author  suggests  (1)  compensation  for  improvements  made  by  the  tenant 
upon  the  farm  that  he  occupies;  (2)  taxation  of  land  value  in  the 
form  of  a  graduated  tax,  as  an  encouragement  to  ownership;  (3)  improve- 
ment of  agricultural  credit  facilities  by  means  of  state  legislation  to 
supplement  the  Federal  Farm  Loan  act;  (4)  suitable  land  settlement 
policies  for  the  encouragement  of  private,  semi-private,  and  state-aided 
colonization;  (5)  the  establishment  of  legal  agencies  to  prevent  specu- 
lation in  land  values;  (6)  the  reform  of  the  present  system  of  land  trans- 
fers; (7)  the  establishment  of  a  more  attractive,  wholesome,  and  comfort- 
able rural  home  life. 

The  conclusions  are  the  best  part  of  the  book,  the  body  of  the  text 
showing  little  internal  evidence  of  original  research  on  the  subject;  but 
the  author  has  made  good  use  of  a  large  number  of  studies  on  the  various 
aspects  of  tenancy  throughout  the  country.  There  is  a  helpful  bibli- 
ography. 

Alexander  E.  Cance. 

Bradley,  W.  W.  California  mineral  production  for  1920;  with  countt/ 
maps.  (San  Francisco:  Calif.  State  Mining  Bureau,  Ferry  Bldg.  1921. 
Pp.  217.) 

Chisholm,  G.  G.  HandbooJc  of  commercial  geography.  Ninth  edition, 
revised.      (New  York:  Longmans,  Green.      1922.) 

DuRAN,  L.  Raw  silk:  a  practical  handbook  for  the  buyer.  Second  revised 
edition.      (New  York:  Silk  Pub.  Co.,  1123  Broadwav.      1921.      Pp.  216. 

$3.) 

Garside,  a.  H.  editor.  Standard  cotton  mill  practice  and  equipment,  1921. 
(Boston:  National  Assoc,  of  Cotton  Mfrs.,  45  Milk  St.      1921.     Pp.  180.) 

Guest,  G.  An  introduction  to  English  rural  history.  (London:  Workers' 
Educational  Assoc.      1920.      Pp.68.) 


1922]  Agriculture,  Mining,  Forestry  and  Fisheries  287 

Jenkins,  J.  T.  History  of  the  whale  fisheries.  (London:  Witherbv.  1922. 
Pp.  336.) 

Johnson,  C.  A.  Coal,  oil,  gas  and  electricity;  our  natural  resources. 
(McKeesport,  Pa.:  Author,  324  Fifth  Ave.      1921.      Pp.   107.     $5.) 

Keatings,  G.  Agricultural  progress  in  Western  India.  (New  York: 
Longmans,  Green.      1922.      Pp.  xii,  253.     $2.) 

McAdam,  D.  J.  Coal,  government  ownership  or  control;  government  owner- 
ship of  navy  coal  land  and  control  of  the  coal  industry.  (New  York: 
Authors  &  Publishers'  Corporation,  440  Fourth  Ave.  1921.  Pp.  188. 
$2.) 

NiEMi,  S.  Mesabi  iron  range  of  Minnesota;  a  bibliography.  (Eveleth, 
Minn. :  Eveleth  Pub.  Library.      1921.      Pp.  18.) 

Prothero,  R.  E.  English  farming  past  and  present.  Third  edition.  (New 
York:  Longmans,  Green.      1922.     $4.) 

Rew,  Sir  R.  H.  The  story  of  the  agricultural  club.  (London:  King. 
1922.) 

Smedley,  G.  B.  Oil  and  gas  laws  of  Texas.  1921  edition.  Oil  and  gas 
rights  in  state  lands.      (Dallas:  Martin  Stationery  Co.      1921.) 

Woods,  K.  S.  The  rural  industries  round  Oxford.  A  survey  made  on 
behalf  of  the  Institute  for  Research  into  Agricultural  Economics,  Univer- 
sity of  Oxford.      (Oxford:      Clarendon  Press.      1921.      Pp.   180.) 

This  study  was  made  in  a  district  which  lies  within  thirty  miles  of 
Oxford,  England,  and  includes  an  area  of  some  fifty  miles  square.  Ac- 
count is  given  of  several  industries,  including  the  woodland  occu- 
pations, barrel-hoop  making,  cooperage,  the  besom  industry,  hurdle  mak- 
ing, chair-leg  turnery  and  chair  manufacture,  osier  cultivation  and  basket 
making,  leather  dressing,  ready-made  clothing,  machine  and  hand-knit- 
ting, and  the  lace-making  industry.  The  inquiry  includes  the  crafts 
practiced  in  the  homes  and  small  work-shops  and  factories,  where  little 
capital  is  invested.  "The  object  of  the  study  was  to  ascertain  what  rural 
industries  existed,  the  reasons  for  their  localization,  their  present  po- 
sition, and  prospects  for  future  development." 

The  report  shows  that  there  are  certain  localities  where  land  unsuited 
for  agriculture  does  yield  raw  materials  suitable  for  use  in  local  crafts 
and  industries ;  that  there  exists  skill  in  producing  useful  commodities ; 
and  that  there  are  people  residing  in  these  localities  who  have  time 
and  inclination  to  apply  to  manufacture  of  many  different  commodities 
for  a  local  market.  It  is  quite  impossible,  however,  for  these  local  re- 
sources to  compete  with  large-scale  production  for  a  general  market. 
Rural  organization  for  production  and  marketing  is  lacking,  and  trans- 
port facilities  are  poor  and  cost  of  carriage  high.  There  is  a  deplorable 
lack  of  educational  facilities,  and  wretched  local  government  in  town  and 
country.  Wherever  large-scale  production  exerts  an  influence,  organ- 
ized labor  is  entering  to  affect  hours  of  work  and  wages.  The  better 
classes  of  young  workers  are  being  drawn  away  to  the  industrial  centers 
and  even  unskilled  laborers  are  able  to  receive  high  wages,  which  makes 
them  unwilling  to  serve  apprenticeships  in  the  local  crafts  and  trades. 
As  a  remedy,  the  two  most  necessary  lines  for  development  are  better 
facilities  for  education  and  improved  means  for  transportation.      It  is  not 


288  Reviews  and  New  Books  [June 

considered  desirable  to  stimulate  household  industries  to  supplement  the 
family  income  of  those  who  are  unable  to  follow  other  occupations,  for 
this  leads  to  low  wages  and  the  sweating  system.  Lace  making,  knitting, 
ready-made  clothing,  dressmaking  industries,  while  not  economically 
profitable  as  whole-time  occupations,  may  be  profitable  to  those  otherwise 
unemployed  or  unemployable,  as,  for  example,  the  old,  the  unfit,  and 
the  young  who  are  still  at  home. 

William  Lloyd  Davis, 
University  of  Wisconsin. 

Annual  report  on  the  mineral  production  of  Canada,  1920.  (Ottawa: 
Dept.  of  Mines.      1921.     Pp.  80.) 

Education  in  forestry.  Educational  bull.  44,  1921.  (Washington:  Supt. 
of  Docs.,  Gov.  Prtg.  Office.      1921.      10c.) 

Milk  and  milk  products.  Report  of  the  Federal  Trade  Commission,  1914- 
1918.      (Washington:  Gov.  Prtg.  Office.      1921.      Pp.  234.) 

This  report  undertakes  to  present  the  leading  facts  pertaining  to  costs, 
prices,  profits,  and  various  business  practices  in  the  milk  and  milk 
products  industries  during  the  war.  Particular  attention  is  given  to  the 
condensed  and  evaporated  milk  market  and  it  is  shown  that  the  profits 
in  these  businesses  were  rather  large,  though  not  exceptionally  so  as 
compared  with  many  other  businesses. 

The  marketing  of  butter,  the  profits  made  by  the  trade,  the  arrount 
paid  the  farmer,  the  relative  merits  of  the  cooperative  and  the  centralized 
creamery  are  carefully  discussed.  A  brief  study  of  market  milk  is  given. 
The  last  chapter  deals  with  government  control. 

B.    H.    HiBBARD. 

The  Missouri  year  book  of  agriculture,  1921.  (Jefferson  City:  State  Bd. 
of  Agri.      1921.      Pp.  475.) 

The  production  of  coal  and  coke  in  Canada,  1920.  (Ottawa:  Dept.  of 
Mines.      1921.      Pp.   36.) 

The  relation  of  land  tenure  to  the  use  of  the  arid  grazing  lands  of  the  south- 
western states.  Dept.  Agri.  bull.  1001.  (Washington:  Supt.  Docs., 
Gov.  Prtg.  Office.     1922.      15c.) 

World  atlas  of  commercial  geology.  Part  II,  Water  power  of  the  world. 
(Washington:  U.  S.  Geological  Survey.      1921.) 

Transportation  and  Communication 

NEW  BOOKS 

Atterburv,  W.  W.  The  public  can  secure  the  railroad  service  it  wants. 
(Philadelphia:  Author,  Pa.  System.      1922.      Pp.  17.) 

Bradley,  G.  D.  The  story  of  the  Santa  Fe.  (Boston:  Richard  C.  Badger, 
The  Gorham  Press.      1920.      Pp.  288.     $3.) 

In  this  volume  Professor  Bradley  traces  the  history  of  the  Santa  Fe 
from  its  beginning  about  1864  to  1887.  For  several  reasons  the  author 
selected  the  latter  date  as  the  concluding  year  for  his  narrative:  "It  was 
in  this  3'ear  tliat  the  Santa  Fe  built  its  line  into  Chicago  and  thereby 
became  a  transcontinental  system;  it  was  in  1887  that  the  passage  of 
the  Interstate  Commerce  act  marked  a  new  era  in  railroad  history;  and 


1922]  Transportation  and  Commumcat'ion  289 

it  was  in  this  year  that  the  Santa  Fe  completed  the  colonizing  of  its 
land-grant.  In  fact  the  really  interesting  and  romantic  history  of  the 
road  ends  with  this  eventful  date  when  the  system  attained  substantially 
to  its  present  size."  As  this  quotation  suggests,  the  author  set  for  him- 
self the  task  of  telling  an  interesting  story.  In  fact,  the  cover  page 
contains  the  subtitle,  "A  Romance  of  American  Enterprise."  Consider- 
ing the  author's  purpose  the  book  is  interesting  and  admirably  well  done. 

The  title,  however,  scarcely  does  justice  to  the  contents  of  the  volume; 
for  it  contains  much  historical  detail  which  may  be  used  to  advantage  by 
the  student  of  American  railways  who  reads  for  cold  facts  rather  than 
for  satisfaction  of  a  "romantic"  interest.  The  author's  access  to  the 
records  of  the  company  gave  him  an  exceptional  advantage  in  obtaining 
accurate  information.  Professor  Bradley  did  not  go  out  of  his  wav  to 
select  only  the  events  in  the  history  of  the  road  which  would  make  inter- 
esting reading,  but  boldly  faced  dry  facts  wherever  it  was  necessary  to 
give  substance  to  the  story.  Thus  the  volume  contains  a  very  good  ac- 
count of  the  early  methods  of  financing  the  road,  its  land  and  coloni- 
zation policy,  the  development  of  branch  lines,  the  expansion  policy,  the 
struggle  for  the  critical  passes  in  the  Rocky  Mountains,  and  problems  of 
extension  to  the  Pacific  ocean  and  to  Chicago.  The  first  chapter  is  de- 
voted to  the  Old  Santa  Fe  Trail,  and  gives  an  account  of  the  origin,  de- 
velopment, organization  and  volume  of  the  trade.  Mr.  Cyrus  K.  Holli- 
day,  described  as  "The  Man  with  a  Big  Idea,"  is  given  credit  for  the 
conception  of  the  idea  which  led  to  the  founding  and  early  development 
of  the  system,  and  a  chapter  is  devoted  to  his  work. 

Some  additions  might  have  been  made  to  the  book  without  impairing 
the  interest  for  the  general  reader — additions,  by  the  way,  which  would 
have  enhanced  its  value  for  the  student.  A  shortcoming  is  the  absence 
of  maps ;  in  fact,  the  volume  contains  only  one,  and  this  is  not  of  the  road 
but  of  one  of  the  routes  of  the  Santa  Fe  trail.  It  is  rather  difficult  to 
follow  the  author's  narrative  of  the  expansion  of  the  system  without 
graphic  illustrations.  Moreover,  interesting  and  instructive  chapters 
might  have  been  added  containing  as  subject-matter  such  topics  as  con- 
struction and  operation  methods  and  problems,  the  part,  if  any,  that 
this  road  took  in  the  railroad  evils  of  the  times,  the  work  of  construction 
companies,  the  Santa  Fe's  experience  with  early  attempts  at  railway 
regulation.  The  volume  contains  suggestions  of  struggles  between  the 
Santa  Fe  directorate  and  such  financial  geniuses  as  Gould  and  Hunting- 
ton, but  these  features  are  not  developed.  Isaac  Lippincott. 

Brosseau,  a.  J.  Is  highivay  transport  an  aid  to  the  railroads?  (New 
York:  National  Automobile  Chamber  of  Commerce,  366  Madison  Ave. 
1922.      Pp.  8.) 

An  address  before  the  Shippers  Conference  of  Greater  New  York  at 
the  Merchants  Association,  reprinted  from  Commercial  Vehicle,  Jan.  15, 
1922. 

CowLES,  W.  G.  What  is  the  matter  ivith  the  automobiles?  (New  York: 
The  Insurance  Soc.  of  N.  Y.      1922.      Pp.  25.) 

Daggett,  S.  History  of  the  Southern  Pacific.  (New  York:  Ronald.  1922. 
Pp.  vi,  470.     $5.) 

Dixon,  F.  H.  Railroads  and  government:  their  relations  in  the  United 
States,  1910-1921.      (New  York:  Scribner's.      1922.   Pp.  xvi,  384.  $2.25.) 


290  Reviews  and  New  Books  [June 

Gartner,  K.  K.  Commentaries  on  the  Interstate  Commerce  act.  (New 
York:  Traffic  Pub.  Co.,  150  Lafayette  St.      1921.      Pp.  173.     $3.) 

Green,  G.  A.  Fundamentals  in  the  operation  of  motor  bus  lines.  (New 
York:  National  Automobile  Chamber  of  Commerce,  366  Madison  Ave. 
1922.      Pp.  7.) 

Hanauer,  J.  J.  What  railroad  earning  power  does  the  public  interest 
require?  Testimony  before  the  Interstate  Commerce  Commission,  Jan- 
uary 18,  1922.  (New  York:  Assoc,  of  Railway  Executives,  61  Broadway. 
1922.      Pp.  29.) 

Haney,  L.  H.  Raihoay  traffic  and  rates.  (New  York:  La  Fayette  Insti- 
tute, Inc.      1921.      Pp.  44.) 

This  pamphlet  may  pass  muster  as  a  single  unit  in  a  series  of  lecture 
texts,  but  is  by  no  means  a  complete  discussion  of  a  rather  ambitious 
subject.  It  is  subdivided  under  the  following  principal  heads:  classi- 
fication of  freight,  freight  rates,  and  rate  structures  in  representative 
freight  territories.  There  is  also  a  discussion  of  certain  general  sub- 
jects covering  diversion,  reconsignment,  demurrage,  claims,  and  the  like, 
which  hardly  belongs  under  the  general  head  where  it  appears.  The  last 
three  pages  are  devoted  to  a  brief  description  of  the  Transportation  act 
of  1920. 

There  are  some  important  omissions.  For  example,  nothing  is  said  re- 
specting waybills,  interline  billing,  etc.  A  number  of  technical  terms 
are  used  which,  unless  defined,  would  be  puzzling  to  a  layman  in  railroad 
traffic  matters.  What,  for  example,  is  an  "order  notify"  shipment.^ 
There  are  several  inaccuracies,  perhaps  the  most  important  of  which  is 
the  statement  on  page  43  that  the  section  of  the  Transporation  act  pro- 
viding for  the  "recapture"  of  one  half  the  excess  earnings  over  six  per 
cent  did  not  go  into  effect  for  two  years,  or  until  March  1,  1922.  As  a 
matter  of  fact,  the  provision  was  operative  from  March  1,  1920,  for 
railways  that  did  not  accept  the  government  guarantee,  and  from  Sept- 
ember 1,  1920,  for  railways  that  did  accept  that  guarantee.  On  page 
22  the  author,  while  discussing  the  principles  of  government  rate 
regulation,  makes  a  statement  that  seems  to  run  counter  to  his  general 
thesis  and  also  to  the  logic  of  the  discussion.  He  says:  "Rates  should 
be  adjusted  as  between  commodities,  so  that  in  each  case  the  least  that 
shippers  will  pay  just  balances  the  viost  that  the  railways  must  charge." 
The  two  words  I  have  italicized  appear  to  be  transposed,  for  the  author's 
thought,  as  developed  in  the  context,  is  that  the  most  the  shippers  will 
pay  should  balance  the  least  the  railway  must  charge. 

J.  H.  P. 

Hoover,  H.  Economic  factors  in  raihvay  rate  adjustment.  Statement 
before  the  Interstate  Commerce  Commission,  Feb.  3,  1922.  (Washing- 
ton: Gov.  Prtg.  Office,  Supt.  Docs.      1922.      Pp.  16.) 

Johnson,  E.  R.  and  Van  Metre,  T.  W.  Principles  of  railroad  transporta- 
tion.    New     edition.      (New     York:     Appleton.      1921.      Pp.     xix,     617. 

$3.5) 

Powell,  F.  W.  The  railroads  of  Mexico.  (Boston:  The  Stratford  Co. 
1921.      Pp.  vii,  226.     $2.) 

The  material  is  grouped  under  three  captions.  Part  I  is  concerned 
with  tlie  railroad  jiolicy  of  the  present  and  during  the  period  following 


1922]  Trade,  Commerce,  and  Commercial  Crises  291 

the  Diaz  regime.  In  this  section  the  purpose  is  to  present  the  facts 
upon  which  a  present  judgment  of  railway  policy  in  Mexico  may  be 
based.  Part  II  deals  chiefly  with  the  transportation  history  of  the 
country.  In  part  III  are  presented  certain  of  the  underlying  conditions 
affecting  the  railway  growth  of  the  country.  The  titles  of  the  two 
chapters  of  this  section  suggest  the  subject-matter,  namely,  "Relations 
with  the  government,"  and  "Results,  political  and  economic."  The 
volume  contains  a  very  good  railway  map  of  Mexico,  which,  incidentally, 
gives  some  idea  of  the  relation  of  these  roads  with  those  of  the  United 
States.  An  ample  index  affords  easy  reference  to  the  contents  of  the 
volume.  In  addition,  the  author  has  provided  a  selected  list  of  refer- 
ences on  Mexico. 

Part  III  will  probably  be  of  the  most  interest  to  American  readers, 
for  it  is  in  that  part  that  the  author  discusses  the  railroad  policy  of  the 
country,  together  with  the  peculiarities  of  Mexican  law  in  the  administra- 
tion of  affairs  of  local  concern  and  in  their  relation  to  outsiders.  "In 
Mexico,  a  railroad  concessionaire  receives  what  is  in  effect  a  lease,  for  a 
definite  term  of  years,  of  the  line  which  he  proposes  to  build,  largely  or 
wholly  out  of  private  funds;  and  the  public  authority  in  the  end  auto- 
matically assumes  proprietorship  over  all  fixed  properties  and  an  option 
upon  those  of  a  movable  nature"  (p.  167).  An  analogy  in  English  law 
is  the  terminable  leasehold  system,  common  in  London  and  not  unknown 
in  some  of  the  older  American  cities,  with  the  important  difference  that 
ground  rent  falls  in  the  domain  of  private  law. 

Government  control  of  railroads  has  been  the  policy  from  the  begin- 
ning. The  period  from  1837  to  1880  was  one  of  special  legislation,  the 
respective  rights  of  the  nation  (or  state)  and  of  the  concessionaires  being 
set  forth  in  detail  in  the  concession.  In  1880  was  inaugurated  a  period 
of  general  legislation.  Following  the  new  policy,  the  president  was 
authorized  to  amend  contracts  made  for  the  construction  of  interoceanic 
and  international  railways.  At  this  time  an  attempt  was  made  to  establish 
a  consistent  principle  to  govern  all  future  concessions.  Considering  the 
investment  point  of  view,  the  author  says ;  "Shareholders  are  on  a  specu- 
lative basis." 

Isaac  Lippincott. 

Walden,  C.  F.      Tariff  interpretation  and  rate  construction.      (New  York: 

Y.  M.  C.  A.  Press.      1921.     Pp.  v,  146.) 
Interstate    Commerce    Commission    reports.     Vol.     61,    Decisions    of    the 

Interstate  Commerce  Commission,  March-May,  1921.  (Washington:  Gov. 

Prtg.  Office,  Supt.  Docs.      1922.     $1.50.) 
Railway    statistics   for   1920.      (Ottawa,    Canada:     Dominions    Bureau    of 

Statistics.     1921.     Pp.  308.) 
The  reorganisation  of  British  raihvays.      The  Railways'  act,  1921.  (London: 

Railways  Clerks'  Assoc.      1922.     6d.) 

Trade,  Commerce,  and  Commercial  Crises 

NEW  BOOKS 

BouNiATiAN,  M.  Les  crises  economiques.  Essai  de  morphologic  et  theorie 
des  crises  economiques  periodiques  et  de  theorie  de  la  conjoncture 
economique.  Translated  from  the  Russian  by  J.  Bernard.  (Paris: 
Giard.     1922.     Pp.  xvii,  388.     25  fr.) 


292  Reviews  and  New  Books  [June 

The  author  is  well  equipped  to  analyze  the  causes  and  conditions  of 
economic  crises,  having  already  published  The  History  of  Economic  Crises 
in  England,  16JfO  to  181^0,  in  German  (Munich,  1907).  The  thesis  of 
the  book  is  an  extension  of  that  of  Rodbertus  that  capital  takes  a  con- 
stantly increasing  proportion  of  the  annual  production  of  any  country, 
that  the  capitalists  have  to  invest  a  large  part  of  their  profits  in  new 
capitalistic  enterprises,  that  effective  demand  for  commodities  does  not 
increase  at  the  same  rate,  and  that  under  the  present  regime  there  must 
therefore  recur  times  of  over-capitalization  and  over-production  ending  in 
a  crisis. 

The  introduction  contains  an  able  criticism  of  parts  of  the  writings  of 
Sismondi,  Malthus,  Lauderdale,  and  others  who  have  treated  of  crises. 
Part  I  gives  the  analysis  of  different  kinds  of  crises;  part  II  deals  with 
the  causes  of  crises,  and  the  author  remarks  "a  crisis  of  the  bourse  con- 
stitutes the  culminating  point  of  an  economic  crisis ;  in  reality  it  is  an 
external  phenomenon  arising  at  the  same  time  as  deep  disturbances  in 
the  processes  of  production  and  distribution."  Part  III  deals  with  ex- 
cessive capitalization.  The  book  will  repay  study  for  the  reasonableness 
of  its  contentions  and  the  careful  analysis  of  crises  which  is  given  in 
support  of  them.  It  is  a  pity  that  the  author  cannot  give  more  statistics 
on  which  to  base  his  closely  reasoned  arguments.  The  book  contains 
acute  criticisms  and  appreciations  of  Lescure,  Turgan-Baranowski,  Afla- 
lian,  and  others  who  have  written  on  the  same  subject  in  recent  years.  It 
also  gives  many  interesting  items  by  the  way,  for  instance,  that  one  of 
the  criteria  of  crises  is  to  be  found  in  the  amount  of  unemployment,  and 
that  this  amount  does  not  reach  its  maximum  until  at  least  four  years 
after  the  crises  began.  Ralph  R.  Whitehead. 

Cooper,  C.  S.  Foreign  trade  markets  and  methods.  (New  York:  Apple- 
ton.      1922.      Pp.  XV,  440.     $3.50.) 

DiETZ,  A.  Frankfurter  Handelsgeschichte.  (Frankfurt:  Kaiserplatz,  18, 
1921.      80  M.) 

Canada  as  a  field  for  British  branch  industries.  (Ottawa:  Dept.  of  Trade 
and  Commerce,  Commercial  Intelligence  Service.      1922.      Pp.  132.) 

Is  the  Middle  West  interested  in  foreign  trade?  (St.  Louis,  Mo.:  National 
Bank,  Research  and  Statistical  Dept.      1922.      Pp.  6.) 

Official  report  of  the  seventh  National  Foreign  Trade  Convention.  (New 
York:  N.  F.  T.  C.  Headquarters.      1920.      Pp.  xxxv,  863.) 

Accounting,  Business  Methods,  Investments,  and  the 

Exchanges 

Problems  in  Sales  Management.  By  Harry  R.  Tosdal.  (Chicago: 
The  A.  W.  Shaw  Company.     1921.     Pp.  637.     $5.) 

The  author  defines  sales  management,  as  distinguished  from  the 
broader  field  of  marketing,  by  stating  that  "sales  management  is  not 
coextensive  with  marketing,  for  the  reason  that  it  deals  only  with 
those  functions  whicli  are  necessary'  for  the  distribution  of  goods  manu- 
factured or  purchased  for  resale." 

The  problems  included  in  the  book  are  grouped  logically  in  nine 
divisions : 


1922]       Accounting,  Business  Methods  and  the  Exchanges  293 

(1)  General  administrative  policies  which  may  affect  sales  manage- 
ment itself. 

(2)  The  building  or  reshaping  of  the  sales  organization,  in  accord- 
ance with  particular  conditions,  the  relations  of  sales  to  other  depart- 
ments, and  the  selection  of  personnel. 

(3)  Research  and  planning  as  a  basis  both  for  sales  policies  and 
sales  operation. 

(4)  Sales  policy,  relating  to  the  product,  to  methods  of  distribu- 
tion, to  prices — discounts,  maintenance,  and  guarantee  against  de- 
cline,— to  credit,  to  advertising  and  to  cancellations,  allowances  and 
dealer  helps. 

(5)  Methods  used  in  carrying  out  these  policies. 

(6)  Managing  the  sales  force — training,  compensation,  supervi- 
sion, cooperation  and  stimulation. 

(7)  The  control  of  sales  operation  through  accounts,  records, 
statistics  and  reports. 

(8)  The  financing  of  sales. 

(9)  The  delivery  of  the  orders. 

To  a  field  which  is  marked  by  extreme  deficiency  of  organized  ma- 
terial suitable  either  for  classroom  use  or  for  the  guidance  of  the  sales 
executive,  this  volume  makes  two  distinct  contributions.  It  supplies, 

first  of  all,  the  problem  material  which  is  so  valuable  for  the  teaching 
of  the  subject,  and  which  is  often  difficult  to  obtain  in  sufficient  range. 
As  stated  by  the  author : 

To  develop  the  habit  of  passing  judgment  and  taking  action  upon  the 
basis  of  tangible  and  intangible  facts  in  accordance  with  correct  principles 
is  the  goal  of  scientific  business  training.  It  is  our  conviction  that  this 
training — this  habit  of  making  decisions  upon  facts  and  evidence  rather 
than  upon  guesswork — can  be  best  acquired  through  considering  and  dis- 
cussing problems  of  the  type  which  actually  confront  the  business  man  in 
the  course  of  his  activities. 

Second,  there  is  presented  to  the  reader,  in  organized  fashion,  a 
great  deal  of  information  of  a  descriptive  sort,  concerning  the  sales 
practices  of  a  large  number  of  firms  in  various  industries.  Hitherto 
such  information  has  been  available,  with  very  few  exceptions,  only  as  it 
has  been  scattered  through  current  business  literature.  This  lack  of 
organized  information  has  handicapped  teachers  who  did  not  have 
extensive  business  contacts,  and  has  forced  many  sales  managers  to 
depend  too  much  upon  personal  experience,  instead  of  having  accessible 
the  experiences  of  others  in  similar  situations.  Supplementing  the 
material  itself  is  a  complete  and  carefully  prepared  outline  (sum- 
marized above)  of  the  entire  field  of  sales  management. 

The  weaknesses  of  the  work  are  due  primarily  to  its  being  an  initial 


294<  Reviews  and  New  Books  [June 

effort  of  its  kind.  The  most  serious  of  these  is  that  in  many  of  its 
problems  the  data  given  are  insufficient  to  enable  the  reader  to  visualize 
clearly  the  situation  which  actually  existed.  It  is  difficult  therefore, 
to  perceive  all  of  the  factors  which  entered  into  the  final  decision. 
The  result  is  that  the  "solution"  to  such  a  problem  resolves  itself  into 
a  statement  of  advantages  and  disadvantages,  which,  while  valuable, 
does  not  compel  the  reader  (or  student)  to  reach  a  decision.  The 
necessity  of  having  all  essential  facts  is  particularly  important  in 
those  cases  in  which  the  solution  may  justifiably  be  an  alternative 
one,  dependent  only  upon  personal  judgment,  and  in  those  cases  in 
which  decisions  may  ultimately  hinge  upon  some  seemingly  minor  points. 

The  same  sort  of  difficulty  is  involved  in  some  problems  in  which 
variable  practice  is  revealed  among  firms  in  the  same  industry,  without 
any  statement  of  the  reasons  for  variation.  For  example,  in  one 
problem  (number  211)  statements  are  made  of  the  practice  of  ten 
automobile  companies  concerning  the  conditions  on  which  dealer's 
advertising  allowance  is  based,  no  two  methods  being  exactly  alike. 
The  student  is  then  asked  which  plan  an  eleventh  company  should 
use.  The  answer  will  of  course  depend  upon  assumptions  which  the 
student  will  be  forced  to  make,  a  process  which  at  once  robs  the  situa- 
tion of  its  reality,  and  so  weakens  to  some  extent  its  usefulness  as  an 
exercise  of  judgment. 

From  the  viewpoint  either  of  the  teacher  or  the  sales  executive,  the 
value  of  these  problems  would  be  greatly  enhanced  if  the  actual  solu- 
tions thereof  were  available,  although  the  difficulty  already  mentioned 
would  not  necessarily  be  overcome.  If  such  a  key  (the  publishers 
have  intimated  that  it  is  forthcoming,  obtainable  wherever  the  book 
is  used  as  a  text)  contains  any  additional  factors  to  be  considered, 
these  should  be  embodied  in  the  text.  Also,  for  the  benefit  either  of 
the  student  or  the  sales  manager,  a  statement  of  the  reasons  why  a 
certain  decision  was  reached,  would  be  of  exceeding  value. 

This  situation  might  have  been  partly  met  by  specific  footnote  refer- 
ences to  published  sources,  wherever  these  were  available.  Similarly, 
the  bibliography,  particularly  the  list  of  pertinent  articles  in  period- 
icals, could  have  been  made  of  more  assistance  by  the  simple  device  of 
classifying  the  items  listed  according  to  subject-matter. 

Another  question  which  may  be  raised  is  whether  sufficient  attention 
has  been  given  to  sales-management  problems  arising  out  of  the  read- 
justment period,  a  period  which  for  many  firms  has  meant  a  complete 
overhauling  of  organization,  policies,  methods  and  personnel.  Some  of 
the  problems  arc  concerned  specifically  with  situations  of  this  kind, 
and  a  great  many  others  indirectly,  but  sales  executives  who  read  the 
book  will  liardly  find  as  much  suggestion  as  they  might  reasonably 
expect  for  their  individual  problems  of  readjustment. 


1922]        Accounting,  Business  Methods  and  the  Exchanges  295 

Notwithstanding  these  criticisms  this  is  a  noteworthy  contribution 
to  the  field  of  sales  management,  and  is  the  most  usable  single  text 
available  at  present. 

ViCTOE  H.  Pelz. 

University  of  Wisconsin. 

NEW  BOOKS 

Allen,  C.  R.  The  foreman  and  his  job.  A  handbook  for  foremen  and  for 
leaders  of  foremen's  conferences.  (Philadelphia:  Lippincott.  1921. 
Pp.  526.      $3.50.) 

Contains  chapters  on  "The  foreman  and  the  plant,"  "The  departmental 
and  the  work  job  analysis,"  "Putting  over  the  supervisory  job,"  "The 
analysis  of  the  distribution  of  the  working  force  block  into  specific  and 
detailed  responsibilities,"  "The  analysis  of  the  human  factor  block," 
"The  detaded  analysis  of  the  term  relations  block,"  and  "The  instructing 
job." 

Armstrong,  G.  S.  Essentials  of  industrial  costing.  (New  York:  Apple- 
ton.      1921.      Pp.  xiii,  297.     $5.) 

Essentials  of  Industrial  Costing  treats  of  "the  principles  and  methods 
by  means  of  whicli  the  cost  of  production  may  be  derived."  The  volume 
contains  little  that  is  new,  but  rather  attempts  to  present  the  subject- 
matter  so  that  it  may  be  easily  understood  and  applied.  After  presenting 
briefly  the  necessity,  the  purpose,  and  the  functions  of  costing,  the  author 
reviews  the  general  types  of  cost  systems  and,  as  well,  the  methods  of 
accumulating  the  costs  against  the  product.  Separate  and  well-written 
chapters  discuss  the  costing  of  materials  and  of  labor,  and  several 
chapters  are  given  to  the  collection,  allocation,  and  distribution  of  ex- 
pense. Illustrations  throughout  the  volume  assist  in  clarifying  the  text, 
while  typical  expense  statements  show  how  the  various  expenses  are 
brought  together,  and  how  the  distributions  are  proved  to  be  in  agreement 
with  the  aggregate  expense  first  obtained. 

The  author  maintains  that  theoretical  economics  differs  from  the 
technique  of  business  practice,  and  that  for  accounting  purposes  interest 
on  capital  owned  is  not  a  part  of  production  cost.  Of  this  most  account- 
ants are  thoroughly  convinced ;  many  accountants  will  not,  however,  agree 
with  Mr.  Armstrong  that  depreciation  for  cost  purposes  includes  decline 
in  the  market  value  of  plant  or  equipment.  Depreciation,  for  cost  pur- 
poses, represents  expired  capital  outlay,  and,  regardless  of  market  ap- 
preciation or  decrease  in  value  of  plant  or  other  manufacturing  equipment, 
the  product  of  a  given  unit  of  plant  must  absorb  the  orginal  cost,  less 
residual  value,  of  that  equipment.  Market  appreciation  or  fall  in  price 
should  not  enter  into  the  computation  for  costing  purposes. 

The  tables  of  horsepower  requirements  of  machine  motors,  of  steam 
consumption,  and  of  the  annual  horsepower  costs  in  factory  steam-power 
plants  are  interesting,  and  should  many  times  prove  of  real  value  to  the 
cost  accountant. 

One  of  the  most  important  and  most  interesting  considerations  in 
all  costing  has  to  do  with  the  over-absorption  or  under-absorption  of 
burden  due  to  abnormal  production.  The  author  provides  an  "abnormal 
business"  account  which  is  credited  for  the  monthly  or  periodical  over- 
absorption   of  burden,   and   is   debited   for   the   under-absorption   of   the 


296  Reviews  and  New  Books  [June 

manufacturing  expense.  But  shall  we  agree  with  Mr.  Armstrong  that  the 
balance  of  this  abnormal  business  account  is  to  be  written  off  through 
profit  and  loss  at  the  close  of  each  fiscal  period.^  Is  it  not  preferable  to 
recognize  the  longer  business  cycle,  and  to  use  this  account  as  the  equal- 
izer of  cost  fluctuations  during  this  business  cycle  ?  The  National  Associ- 
ation of  Electrical  Manufacturers,  the  United  Typothetae  of  America, 
and  other  leading  manufacturers'  associations  are  recognizing  this  factor 
and  are  providing  for  it  through  their  uniform  cost-finding  systems. 
The  United  Typothetae,  for  instance,  provides  a  reserve  for  overhead 
account  for  this  purpose ;  this  account  is  carried  along  from  year  to  year, 
and  if  the  estimates  have  been  made  properly  will  eventually  clear  itself. 
To  safeguard  against  lean  years,  the  commercial  printer  is  urged  to  build 
up  a  credit  balance  in  this  account,  and  to  carry  in  it  continually  "a  safe 
reserve  to  be  kept."  If  cost  accounting  is  to  mean  anything  in  the 
modern  business  life  of  the  country,  it  must  recognize  and  provide  not 
only  for  the  monthly  and  fiscal  periods,  but  also  for  the  longer  and  some- 
what uncertain  business  cycle. 

The  final  cost  statements  and  the  relation  of  the  cost  records  to  the 
financial  books  are  discussed  and  illustrated.  The  control  of  the  cost 
records  by  the  general  financial  records  is  emphasized — only  as  business 
generally  comes  more  fully  to  recognize  this  need  will  cost  accounts  in- 
crease in  accuracy  and  value.  The  author  has  in  this  volume  brought 
us  a  fresh  outlook  and  a  new  contact  with  cost  accounting,  and  the  book 
is  a  welcome  addition  to  the  already  existing  literature  on  the  subject. 

J.  Hugh  Jackson. 

Bays,  A.  W.  The  larv  of  partnerships,  with  questions,  problems  and  forms, 
and  text  of  Uniform  Partnership  act,  and  Uniform  Limited  Partnership 
act.  American  commercial  law  series.  Second  edition.  (Chicago: 
Callaghan  &  Co.      1921.      Pp.156.)     ' 

Bell,  S.  Accounting  principles.  Their  iise  in  business  management, 
(New  York:  Macmillan.      1921.      Pp.  xii,  482.     $3.) 

In  the  words  of  the  author,  the  aim  of  this  book  is  "to  present  the 
principles  of  accounting  in  their  relation  to  business  management."  After 
reading  the  book  one  must  feel  that  the  title  does  not  define  the  subject- 
matter  of  the  volume.  Rather,  about  one  half  of  the  text  deals  with 
elementary  accounting  principles,  while  the  remaining  portion  might 
properly  be  termed  elementary  bookkeeping. 

Professor  Bell  apjjroaches  the  subject  from  the  balance-sheet  view- 
point, and  follows  the  discussion  of  the  balance  sheet  with  the  intro- 
duction of  the  income  statement.  Most  instructors  in  accounting  will 
agree  that  this  is  a  sound  pedagogical  approach  to  the  science  of  accounts. 
The  books  of  final  and  of  original  entry  are  then  introduced  in  their 
natural  sequence. 

The  discussion  of  depreciation  and  maintenance,  of  the  methods  of 
calculating  time,  and  of  the  managerial  uses  of  the  financial  and  income 
statements,  though  elementary,  is  very  good.  The  position  of  the  item 
of  deferred  expenses  in  tlie  balance  slicct,  and  of  discounts  on  purchases 
and  on  sales  respectively  in  the  income  statement  may  be  criticised, 
though  it  should  be  remembered  that  there  is  considerable  difference  of 
opinion  regarding  this.  We  believe  most  practising  accountants  would 
disagree  with  the  author's  entries  in  chapter  11 — the  reversal-entry 
method  finding  little  favor  with  many  accountants. 


1922]        Accounting,  Business  Methods  and  the  Exchanges  297 

The  real  criticism  of  the  book,  however,  is  in  regard  to  its  general  ar- 
rangement. The  author  mixes  intermittently  chapters  dealing  with  the 
more  advanced  principles  of  accounting  and  those  dealing  with  the  most 
elementary  bookkeeping  practice.  Thus,  chapter  9  contains  a  very  good 
discussion  of  depreciation,  involving  the  use  of  logarithms  in  computing 
the  annual  depreciation  allowances,  while  chapter  10  is  given  over  to  the 
relatively  simple  matter  of  the  opening  and  closing  entries  in  the  trans- 
fer of  a  business.  Again,  in  chapters  12,  13,  and  14<,  where  the  author 
discusses  very  well  the  analysis,  interpretation,  and  managerial  uses  of 
the  balance  sheet  and  of  the  income  statement,  we  are  led  to  hope  that 
at  last  we  have  got  past  the  bookkeeping  practice — only  to  find  chapters 
15,  16,  and  17  given  over  to  such  elementary  topics  as  controlling  accounts 
and  special  columns,  the  bill  book,  and  to  simple  transactions  illustrating 
their  uses.     And  so  it  continues  to  the  end  of  the  volume. 

The  subject-matter  is  clearly  expressed  and  the  book  is  well  printed. 
It  contains  a  very  usable  table  of  contents  and  is  fairly  well  indexed. 

J.  Hugh  Jackson. 

Blanchard,  F.  L.  The  essentials  of  advertising.  (New  York:  McGraw- 
Hill.      1921.      Pp.  vii,  322.) 

The  title  of  this  book  is  rather  misleading,  for  although  the  contents 
of  the  volume  may  be  necessary  to  the  equipment  of  a  writer  of  adver- 
tising, the  student  will  find  little  to  aid  him  in  getting  his  ideas  success- 
fully incorporated  into  an  advertisement.  The  volume  is  really  an  in- 
formation manual  dealing  with  the  problems  and  mechanics  of  the  princi- 
pal advertising  mediums  and  with  the  organization  of  advertising  person- 
nel.     In  this  province  there  is  an  abundance  of  facts  and  suggestions. 

The  layman  will  find  the  volume  an  excellent  survey  of  advertising 
problems  and  their  mechanics.  The  practical  student  of  advertising  will 
find  all  this  of  value,  but  will  want  to  specialize  his  reading,  to  which 
end  the  book  appends  a  bibliography  of  nearly  seventy  titles. 

Charles  Leonard  Stone. 

Cheel,  E.  C.  Cooperative  accouting.  Part  I,  Store  records  and  accounts 
as  worked  out  by  Henry  F.  Christensen.  Part  II,  Cooperative  book- 
keeping. (New  York:  Cooperative  League  of  America.  1920.  Pp.  15. 
50e.) 

Clark,  F.  E.     Principles  of  marketing.      (New  York:  Macmillan.      1922.) 

Cole,  W.  M.  and  Geddes,  A.  E.  Solutions  and  answers  for  fundamental 
accounting.      (Boston:  Houghton  Mifflin.      1921.      Pp.  108.) 

Converse,  P.  D.  Marketing,  methods  and  policies.  (New  York:  Prentice- 
Hall.      1921.      Pp.  XX,  650.      $3.) 

Conyngton,  H.  R.  Financing  an  enterprise.  Vol.  I,  The  enterprise 
(pp.  1-228).  Vol.  II,  The  organization  (pp.  229-43t).  Vol.  Ill,  The 
financing  (pp.  435-651).      (New  York:  Ronald.      1921.     $7.) 

This  is  the  fifth  edition  (other  editions  in  1906,  1907,  1909  and  1915) 
of  a  work  of  the  same  title  liitherto  published  under  the  nom  de  plume 
of  "Francis  Cooper."  The  general  plan  of  the  work  is  the  same  as  for 
the  earlier  editions.  Changes  are  chiefly  those  caused  by  the  expansion 
of  the  discussion.  In  this  process  of  expansion  a  few  new  chapters 
have  been  added  here  and  there  to  permit  the  presentation  of  certain  con- 
siderations in  greater  detail  tlian  formerly  and  to  permit  the  more 
extensive  use  of  illustrative  materials. 


298  Reviews  and  New  Books  [June 

These  books  do  not  constitute  a  general  work  on  corporation  finance, 
as  the  title  might  be  considered  to  indicate.  Rather,  they  deal  with  the 
promotion,  including  financing,  of  new  enterprises.  The  point  of  view 
is  that  of  the  man  experienced  in  promotion  procedure,  and  the  work  is 
replete  with  illustrations  of  and  suggestions  and  advice  concerning  matters 
of  all  degrees  of  importance  from  the  investigation  of  fraudulent  schemes 
of  the  sea-water-gold-process  type  to  the  personal  conduct  and  manners 
in  New  York  of  the  out-of-town  man  with  an  idea  to  sell.  Many,  per- 
haps most,  of  the  illustrations  make  very  interesting  reading.  But  there 
is  danger,  in  the  use  of  such  material,  of  confounding  principles  with 
details  that  are  not  fundamental.  And,  of  course,  the  reading  of  books 
can  not  remedy  a  serious  deficiency  of  business  acumen  or  of  pleasing 
personality  on  the  part  of  the  would-be  enterpriser  or  promoter. 

These  volumes  are  written  from  the  private,  acquisitive  point  of  view, 
rather  than  from  the  social  or  public-policy  point  of  view.  This  fact 
appears  clearly  in  the  discussion  of  the  capitalization  problem.  For  ex- 
ample, in  discussing  overcapitalization,  the  author  says  (p.  377)  :  "Just 
what  constitutes  overcapitalization  is  too  large  a  subject  for  discussion 
here.  Unquestionably,  any  enterprise  is  entitled  to  capitalize  up  to  its 
actual  value  as  a  going  concern  and  as  much  beyond  as  is  necessary  to 
provide  for  legitimate  present  and  future  needs.  It  is  usually  entitled  to 
capitalize  any  real  profit  probabilities.  It  may  expand  its  capitalization 
to  cover  profit  possibilities.  Any  capitalization  on  which  it  can  reason- 
ably expect  to  pay  a  fair  dividend,  after  all  proper  reservations  have 
been  made,  is  hardly  open  to  censure.  Anything  beyond  this  is  over- 
capitalization." And  to  cite  another  instance,  Mr.  Conyngton  states 
(p.  363)  that  the  owners  of  a  public  utility  "having  secured  their  fran- 
chise, whether  by  gift,  purchase,  or  other  means  (the  italics  are  the 
reviewer's),  are  by  law  and  custom  entitled  to  regard  it  and  capitalize 
it  as  they  would  any  other  private  property."  If  this  is  so,  what  are 
the  functions  of  our  public  utility  commissions  } 

Stanley  E.   Howard. 

David,  D.  K.  Retail  store  management  problems.  (Chicago:  A.  W. 
Shaw  Co.      1922.      Pp.  xxix,  1050.     $6.75.) 

Drever,  J.  The  psychology  of  industry.  (New  York:  Button.  1921. 
Pp.  xi,  148.      $2.50.) 

"There  is  a  great  deal  of  talk  just  now  about  a  'new'  psychology.  The 
reference  is  usually  to  Freudian  psychology.  But  the  real  new  psychology 
is  much  wider  than  the  Freudian  and  kindred  developments.  Some  of 
these  developments  may  be  'new,'  but  they  are  certainly  not  psychology." 
Much  of  this  pseudopsychology  has  been  devoted  to  the  problems  of  in- 
dustry ;  even  some  reputable  psychology  dealing  with  this  field  either  has 
been  too  technical  for  easy  comprehension  or  has  been  devoid  of  economic 
appreciation.  Drever's  comprehensive  volume  combines  the  virtues  of 
science  and  simplicity.  Tliroughout  the  book  there  is  caution  against 
overstatement  or  hasty  conclusion,  but  no  indulgence  in  pedantic  psycho- 
logical discussion.  The  book  can  be  readily  understood  bj'  the  layman 
who  knows  no  psychology. 

The  autlior's  organization  of  his  material  is  admirable.  He  postulates 
his  problems  clearly  and  systematically ;  and  in  the  discussion  following, 
he  quotes  and  describes  in  an  attractive  and  interesting  manner  a  number 
of  experiments  and  studies  quite  unusual  for  the  size  of  the  book.     In  his 


1922]        Accounting,  Business  Methods  and  the  Exchanges  299 

discussion  of  the  problems  of  the  worker,  the  problems  of  the  work,  and 
the  problems  of  the  market,  Drever  does  not  attempt  an  elaboration  of 
any  one  subject.  Rather,  he  aims  to  show  in  specific,  concrete  instances 
the  varied  and  valid  applicability  of  a  scientific  psychology  to  the  many 
fields  and  problems  of  industry. 

Charles  Leonard  Stone. 

Edgerton,   E.    I.   and    Bartholomew,   W.    E.     Business   mathematics.     A 
textbook  for  schools.      (New  York:  Ronald.      1921.      Pp.  305.) 

Eggleston,  D.  C.     An  ideal  accounting  system  for  a  retail  bookstore.  (New 
York:  National  Assoc,  of  Book  Publishers,  334  Fifth  Ave.      1922.   Pp.  8.) 

Fletcher,  W.   L.     How  to  get   the   job   you   xcant.      (Boston:    Houghton 
Mifflin.      Pp.  X,  449.     $3.) 

Forbes,   W.    C.      The   romance    of   business.      (Boston:    Houghton    Mifflin. 
1921.      Pp.  vi,  258.     $1.65.) 

Frothingham,  F.  E.     Electric  raihoay  finance.      (New  York:  Am.  Electric 
Railway  Assoc.      1921.      Pp.   10.) 

Gardner,  E.  H.     Nezo  collection  methods.      (New  York:   Ronald.      1921. 
Pp.  467.     $5.) 

Gilbreth,  F.   B.  and  L.   M.     Process  charts.      (New  York:  Am.   Soc.   of 
Mechanical  Engineers,  29  West  39  St.      1921.      Pp.  17.) 

Gillette,  H.  P.  and  Dana,  R.  T.      Construction  cost  keeping  and  manage- 
ment.     (New  York:   McGraw-Hill.      1922.      Pp.    572.     $5.) 

Hawes,  a.  F.     a  cooperative  marketing  of  woodland  products.     Farmers' 
bull.  1100.      (Washington:  Gov.  Prtg.  Office,  Supt.  Docs.      1922.      5c.) 

Hill,  O.     House  property  and  its  management.      (New  York:  Macmillan. 

1921.  Pp.  95.     $1.25.) 

Hiscox,  W.  J.  Factory  administration  in  practice.  (London:  Pitman. 
1922.) 

HuEBNER,  S.  S.  The  stock  market.  (New  York:  Appleton.  1922.  Pp. 
XV,  496.     $3.) 

Kavanaugh,  T.  J.  Bank  credit  methods  and  practice.  (New  York: 
Bankers  Pub.  Co.      1921.      Pp.  241.     $2.50.) 

Kiggen,   H.   J.     Practical    business   arithmetic.      (New    York:    Macmillan. 

1922.  Pp.  xi,  404.     $1.40.) 

Ladd,  C.  E  .  A  system  of  farm  cost  accounting.  Revised  by  J.  S.  Ball. 
Farmers'  bull.  572.  (Washington:  Gov.  Prtg.  Office,  Supt.  Docs.  1922. 
Pp.  23.) 

Loomis,  W.  W.  Neivspaper  lata;  a  digest  of  court  decisions  on  commercial 
and  legal  advertising,  subscriptions,  contracts,  official  papers,  libel,  lot- 
teries, contempt  and  copyright,  classified  and  indexed  for  quick  reference. 
(La  Grange,  111.:  Citizen  Pub.   Co.      1921.      Pp.   112.) 

Mairet,  G.      Principles  and  practice  of  business.      (New  York:  Macmillan. 

1921.  Pp.  viii,  301.     $1.60.) 

Meeker,  J.  E.      The  work  of  the  stock  exchange.      (New  York:   Ronald. 

1922.  Pp.  xxiii,  633.      $5.) 


300  Reviews  and  New  Books  [June 

Montgomery,  R.  H.  Auditing  theory  and  'practice.  Vol.  I,  General 
principles.  Third  edition  revised  and  enlarged.  (New  York:  Ronald. 
1922.      Pp.  xviii,  730.     $6.) 

MooRE,  W.  C.  Complete  course  in  advertising  and  advertisement  writing; 
twenty-two  practical  lessons.  (Philadelphia:  Warehouse  Co.  1921.  Pp. 
30.) 

MuNSON,  E.  L.  The  management  of  men,  a  handbook  on  the  systematic 
development  of  morale  and  the  control  of  human  behavior.  (New  York: 
Holt.      1921.      Pp.  801.) 

General  Munson  has  itemized  here  in  elaborate  detail  the  factors,  con- 
ditions, and  principles  aifecting  morale  in  the  American  army.  As  such, 
the  book  is  a  very  complete  study,  presenting  an  abundance  of  concrete 
illustrations  and  much  interesting  data. 

The  first  two  chapters  discuss  the  meaning  of  morale  and  the  principles 
of  morale  control,  with  much  material  which  might  be  applicable  to  mili- 
tary situations  but  with  little  or  none  applicable  to  industry.  The  next 
five  chapters,  embodying  some  two  hundred  pages,  discuss  psychological 
principles,  the  basic  instincts,  and  other  psychological  qualities.  The 
value  of  this  section  of  the  book  transferable  to  industry  is  minimized  by 
two  factors — the  specific  explanation  of  each  topic  in  terras  of  military 
experience,  and  the  nature  of  the  psychology  itself,  a  mosaic  of  the 
speculative  psychology  of  McDougall,  Le  Bon,  and  Freud.  Several 
chapters  follow  on  the  organization  and  mechanics  of  morale,  profusely 
detailed  for  the  military  situation,  but  with  no  suggestions  of  industrial 
utility.  The  remainder  of  the  book  up  to  the  final  chapter  deals  with 
army  leadership,  the  education,  recreation,  training,  and  health  of 
soldiers,  and  with  military  rewards,  punishment  and  deliquency.  A  final 
chapter  on  industrial  morale  endeavors  to  present  an  analogy  between 
industry  and  the  army.  Even  here  we  find  an  absence  of  concrete 
suggestions. 

The  author  and  the  publishers  would  remove  themselves  from  mis- 
understanding and  from  the  criticism  of  economists  if  they  would  omit  the 
occasional  references  to  industry  and  rename  the  book  The  Management 
of  Soldiers.  For  it  is  clearl}^  apparent  that  military  officers  will  find 
the  book  interesting  and  useful,  but  that  "the  executive  man  of  affairs 
who  is  to  apply  its  teachings"  will  find  little  to  apply. 

Charles  Leonard  Stone. 

Newlove,  G.  H.  C.  p.  a.  accounting.  Vol.  I,  Theory,  questions,  and 
problems.  Vol.  II,  Theory,  auditing,  and  problems.  (New  York: 
Y.  M.  C.  A.      Press.      1921.      Pp.  xiii,  367;  xii,  331.) 

Newman,  J.  K.  The  future  of  street  railway  financing.  (New  York: 
Am.  Electric  Railway  Assoc.      1921.     Pp.  13.) 

Oertmann,  p.  Die  Geschdftsgrundlage;  ein  neuer  Rectsbegriff.  (Leipzig: 
A.  Deichert'sche  Verlagsbuchhandlung.      1921.      Pp.   179.     21  M.) 

Polakov,  W.  N.  Mastering  poxver  production.  (New  York:  Engineering 
Mag.  Co.,  120  West  32nd  St.  1922.      Pp.  455.      $5.) 

Procter,  A.  W.  Principles  of  public  personnel  administration.  Publica- 
tions of  the  Institute  for  Government  Research.  (New  York:  Appleton. 
1921.      Pp.  xi,  211-.     $3.) 


1922]        Accounting,  Business  Methods  and  the  Exchanges  301 

Racine,  S.  F.  Estate  accounts.  (Seattle,  Wash.:  Western  Inst,  of  Ac- 
countancy, Commerce  and  Finance.      1921.) 

Rasor,  S.  E.  Mathematics  for  students  of  agriculture.  (New  York: 
Macmillan.      1921.      Pp.  viii,  290.) 

The  standards  that  have  been  set  up  regarding  the  duty  of  the  school, 
college,  or  university  toward  the  question  of  mathematics  for  agricultural 
students,  must  be  used  in  judging  this  book.  Agricultural  colleges  have 
no  standard  by  any  means  generally  accepted,  or,  it  may  be  added,  ac- 
ceptable. Shall  the  student  take  advanced  algebra,  solid  geometry,  and 
trigonometry  in  college?  If  so  he  will  take  two  or  three  semesters  of 
exacting  work  and  will  not  yet  be  introduced  to  applied  mathematics. 
There  will  still  remain,  hardly  touched,  the  whole  field  of  graphs,  survey- 
ing and  mechanics. 

Professor  Rasor  attempts  to  bring  into  one  course  of  a  semester,  or 
a  year,  first,  a  review  of  all  the  fundamentals  of  mathematics  together 
with  a  little  advanced  work,  and  second,  the  application  of  the  principles 
to  all  manner  of  things  including  surveying,  graphing,  annuities  and 
depreciation,  elementary  statistics  and  mechanics. 

There  are  many  who  believe  a  course  in  mathematics  of  this  sort  is 
valuable  and  desirable.  Such  courses  are  being  offered.  To  those  with 
these  views  the  book  will  prove  useful.  It  is  clear  and  logical.  How- 
ever, an  attempt  to  review  algebra  in  25  pages  suggests  strongly  the 
question  of  how  algebra  is  handled  in  the  high  schools  of  the  country. 
If  it  is  being  well  done  the  25  pages  may  be  helpful,  though  not  indis- 
pensable. If  it  is  not  being  well  done  a  review  of  this  length  will  be 
inadequate.  Probably  two  thirds  of  the  book  is  of  high  school  grade. 
Whether  or  not  it  will  ultimately  prove  desirable  to  take  a  practical 
view  of  the  purpose  of  mathematics  and  select  from  the  field  usually 
covered,  say  in  two  or  three  years,  the  essentials,  and  crowd  them  into  a 
single  year,  or  less,  remains-  to  be  demonstrated.  In  this  case  what  the 
author  attempts  to  do,  he  seems  to  have  done  well.  Curriculum  com- 
mittees are,  however,  not  through  with  their  work  on  what  should  be 
given  in  mathematics  to  students  of  agriculture. 

B.    H.    HiBBARD. 

University  of  Wisconsin. 

Reed,  R.  R.  and  Washburn,  L.  H.  Blue  sky  lazes,  analysis  and  text. 
(New  York:  Clark  Boardman  Co.      1921.      Pp.  xxxii,  172.) 

Richards,  W.  H.  Pushing  a  retail  business;  one-volume  course  in  both 
advertising  and  salesmanship.  (Chicago:  Richards  School  of  Adver- 
tising.     1921.      Pp.  384.) 

Rogers,  R.  Teacher's  handbook  to  accompany  Gafio's  "Commercial  Law." 
(New  York:  American  Book  Co.      1921.      Pp.  96.      1921.      60c.) 

Seward,  G.  M.  A  B  C  of  stocks,  bonds  and  mortgages.  (Chicago:  G.  B. 
Williams  Co.     1921.     Pp.  69.) 

Smith,  J.  G.  Organized  produce  markets.  (New  York:  Longmans,  Green. 
1922.) 

Spilker,  J.  B.  and  Cloud,  P.  G.  Real  estate  business  as  a  profession. 
(Cincinnati,  O. :  Ebbert  &  Richardson  Co.      1921.      Pp.  77.) 


302  Reviews  and  New  Books  [June 

ToDMAN,  F.  S.  Wall  Street  accounting.  A  description  of  the  business  of 
brokerage,  its  accounting  records  and  procedure.  (New  York:  Ronald. 
1921.      Pp.  XV,  352.      $6.) 

An  enlargement  and  complete  revision  of  the  author's  Brokerage 
Accounts,  published  in  1916,  is  presented  here.  The  business  of  broker- 
age, its  accounting  records  and  the  technique  of  trading  in  the  stock  and 
commodity  markets  comprise  the  contents.  It  should  be  of  service, 
therefore,  not  only  to  accountants,  but  also  to  traders  and  investors.  The 
author  is  to  be  commended  for  the  good  arrangement  and  concise  pre- 
sentation of  his  material.  Part  I  deals  with  the  New  York  stock  ex- 
change; part  II,  with  the  New  York  cotton  exchange;  part  III,  with 
the  New  York  produce  exchange,  the  New  York  coffee  and  sugar  ex- 
changes, and  the  Chicago  Board  of  Trade ;  and  part  IV,  with  the  auditing 
of  stock  and  cotton  brokerage  books. 

An  appendix  of  about  thirty  pages  contains  general  instructions  for 
stock  tax  returns.  New  York  stock  exchange  commission  rates,  rules  and 
regulations  of  the  stock  clearing  corporation  of  the  New  York  stock 
exchange,  the  New  York  Cotton  Excliange  Clearing  Association  rules, 
the  clearing  house  regulations  of  the  Cliicago  Board  of  Trade  and  general 
instructions  for  internal  revenue  returns  for  dealers  in  future  contracts 
in  commodities. 

M.  J.  Shugrue. 

Van  Deventer,  J.  H.,  editor.  Planning  production  for  profit.  (New 
York:  Engineering  Mag.  Co.      1921.      Pp.  xii,  333.) 

Vernon,  H.  M.  Industrial  fatigue  and  efficiency.  (New  York:  Dutton. 
1921.      Pp.  viii,  264.      $5.) 

Wadleigh,  F.  R.  a  coal  manual  for  salesmen,  buyers  and  users.  (Cin- 
cinnati, O. :  National  Coal  Mining  News.      1921.      Pp.   181.) 

Walton,  S.  and  Finney,  H.  A.  Mathematics  of  accounting  and  finance. 
(New  York:    Ronald.      1921.      Pp.   ix,   274.      $4.) 

There  are  many  school  texts  on  commercial  arithmetic,  but  for  the 
most  part  they  are  too  rudimentary  to  be  of  much  value  to  others  than 
those  who  have  not  gone  beyond  the  elementary  and  fundamental  pro- 
cesses of  mathematics.  The  present  book  has  been  prepared  as  a  manual 
of  business  calculations  and  is  intended  to  be  useful  particularly  to  per- 
sons engaged  in  accounting  and  in  the  various  lines  of  finance.  The 
earlier  chapters  deal  with  a  number  of  short  processes  and  offer  practical 
sugestions  that  may  be  applied  in  many  different  routine  computations. 
In  the  central  portion  attention  has  been  given  to  special  applications  of 
arithmetical  principles  and  short  methods  to  the  problems  of  individual 
lines  of  business.  The  last  chapters  explain  in  simple  terms  convenient 
ways  of  using  logarithmic  and  actuarial  methods  of  solving  business 
problems  relating  to  compound  interest,  investments,  annuities,  bond  dis- 
count and  premium,  effective  bond  rates,  leaseholds  and  depreciation. 
Many  of  these  matters  are  covered  in  a  very  brief  manner  but  the  book 
on  the  whole  is  of  decided  practical  service.  M.  J.  S. 

WiLi-ARD,  R.  D.  System  building  and  constructive  accounting.  (New 
York:  McGraw-Hiil.      1922.      Pp.  viii,  307.     $4.) 

Wyckoff,  R.  D.  How  I  trade  and  invest  in  stocks  and  bonds.  (New 
York:  Mag.  of  Wall  St.,  42  Broadway.      1922.     $5.) 


1922]  Capital  and  Capitalistic  Organization  303 

The  advertising  year  book  for  1921-1922.  Published  for  the  Associated 
Advertising  Clubs  of  the  World.  (Garden  City,  N.  Y. :  Doubleday,  Page. 
1922.) 

Facts  for  salesmen;  Raynsters;  information  for  salesmen  of  the  clothing 
division  of  the  United  States  Rubber  Co.  (New  York:  U.  S.  Rubber  Co. 
1921.      Pp.  59.) 

Law,  banking  and  business.  Six  vols.  (Chicago:  American  Institute. 
1921.) 

MacGregor's   booh   of   bank   advertising.      (New   York:   Bankers    Pub.    Co. 
1921.      Pp.  388.     $5.) 

Modern  foremanship  and  production  methods.  Cost  control  in  the  shop; 
Wages  and  incentives;  What  is  production  and  why?  Tenth,  eleventh, 
and  twelfth  work  manuals.  (Chicago:  La  Salle  Extension  Univ.  1921. 
Pp.  vii,  62;  vii,  77;  vii,  70.) 

Operating  expenses  in  retail  shoe  stores  in  1920.  Publications  of  the 
Graduate  School  of  Business  Administration,  Harvard  University,  vol. 
VII,  no.  4.  Bulletin  no.  28,  Bureau  of  Business  Research.  (Cambridge: 
Harvard  Univ.  Press.      1921.      Pp.  27.     $1.) 

Proceedings  of  the  National  Association  of  Office  Managers,  1921  confer- 
ence. (Springfield,  Mass. :  Mr.  F.  L.  Rowland,  Sec,  Gilbert  &  Barker 
Mfg.  Co.      1922.      Pp.  55.     $1.) 

Proceedings  of  the  tenth  annual  convention  of  the  Investment  Bankers 
Association  of  America.  (Chicago:  Frederick  R.  Fenton,  Sec,  111 
Monroe  St.      1921.     Pp.   415.) 

Stumme's  time  calcidator ;  an  accurate  time  calculator  for  time  and  discount. 
(Readlyn:  la.:  E.  C.  Stumme  .&  Co.      1921.      Pp.  367.     $7.50.) 

Suggested  methods  of  handling  plant  operating  income  and  expense  accounts. 
(Chicago:  Inst,  of  Am.  Meat  Packers,  22  W.  Monroe  St.  1921.  Pp. 
iii,  53.) 

The  teaching  of  commercial  subjects.  (New  York:  Pitman.  1921.  Pp. 
vii,  128.      75c.) 

Capital  and  Capitalistic  Organization 

NEW    BOOKS 

BoNNETT,  C.  E.  Employers'  associations  in  the  United  States.  (New 
York:  Macmillan.      1922.     $4.) 

Chamberlain,  A.  H.  and  J.  F.  Thrift  and  construction.  (Philadelphia: 
Lippincott.      1922.      Pp.  272.      $1.40.) 

Rees,  J.  M.  Trusts  in  British  industry,  191Jf.-1921.  (London:  King. 
1922.) 

RosBROOK,  A.  I.  A  treatise  on  the  law  of  corporations  in  New  York,  based 
on  the  reported  decisions  and  written  in  connection  with  the  statutes  regu- 
lating corporations,  as  amended  to  January  1,  1922.  (Albany,  N.  Y. : 
M.  Bender  &  Co.      1922.      Pp.  cxlvi,  1264.) 


304  Reviews  and  New  Books  [June 

Sullivan,  J.   J.     American   corporations:    the   legal   rules   governing   cor- 
porate   organization    and    management,    with    forms    and    illustrations.       \ 
Second   edition,   revised   and   enlarged.      (New   York:   Appleton.      1921.       ] 
Pp.  xiii,  463.     $2.75.)  j 

The  first  edition  of  this  book  (1910)   was  reviewed  in  this  journal  in      1 
1911  by  Professor  John  H.  Gray  (American  Economic  Review,  vol.  I, 
Dec,  1911,  pp.  841,  842).     The  present  reviewer  in  examining  the  re- 
vised   edition    finds    no    reason    to    take    exception    to    Professor    Gray's     .  \ 
general  comments.  i 

This  is  not  primarily  a  book  on  economics,  but  rather  a  combined  I 
elementary  text  and  reference  book  in  the  field  of  corporation  law.  The 
topics  handled  are  arranged  in  an  orderly  manner.  Their  treatment  is  j 
very  brief.  Usually  the  author  states,  with  little  or  no  critical  comment,  ! 
the  particular  legal  fact  or  rule  in  question  and  then  summarizes  a  court  ' 
case  or  two  to  illustrate  the  point.  These  cases  are  selected,  apparently, 
for  their  usefulness  in  illustrating  the  detailed  legal  points,  not  with  any  I 
view  to  presenting  the  development  of  judicial  doctrines  as  applied  to  | 
important  questions  of  public  policy.  There  is  no  list  of  cases  cited,  an  ! 
unfortunate  omission  in  a  book  of  this  type. 

There  are  two  chapters  (ch.  25,  Merger  of  Corporate  Charters,  and  j 
ch.  26,  The  Control  of  One  Corporation  by  Another)  dealing  with  the  ; 
"trust"  problem.  In  chapter  26,  an  exception  to  the  author's  usual  | 
procedure,  not  a  single  court  decision  is  summarized  or  even  cited.  The  | 
author  thinks  that  "the  problem  of  regulating  them  [the  trusts]  has  | 
been  pretty  well  solved"  (p.  297);  and  that  "most  of  this  [state  anti-  ! 
trust]  legislation  is  experimental,  and  much  of  it  is  so  crude  as  to  do  i 
more  harm  than  good"  (p.298).  The  Sherman  Anti-Trust  act  is  dis-  | 
missed  in  less  than  one  paragraph,  nearly  two  thirds  of  which  consists  i 
of  verbatim  quotation  from  the  law.  The  final  word  on  this  subject 
is  that  "the  Clayton  Anti-Trust  act  of  October  15,  1914,  and  other  I 
federal  legislation  also  operate  to  prevent  the  formation  of  trusts"  (p. 
299).  * 

Stanley  E.  Howard. 

Arnold's  guide  for  New  York  business  corporations.  Seventh  edition,  re-  | 
vised  and  enlarged,  with  notes  and  forms.  (New  York:  Baker,  Voorhis  ; 
&  Co.      1921.      Pp.  xxxviii,  543.) 

Labor  and  Labor  Organizations  "• 

The  Settlement  of  Wage  Disputes.     By  Hekbert  Feis.      (New  York:  | 
Tlie  Macmillan  Company.      1921.     Pp.  xv,  289.     $2.25.) 

Professor  Feis  ventures  upon  the  difficult  task  of  outlining  a  uniform 
system  of  settling  wage  disputes  in  all  important  industries.     The  book 

falls  into  two  parts,  the  first  giving  an  account  of  the  factors  wliich  j 

govern  wage  levels  in  the  present  industrial  situation,  and  the  second  | 

setting  fortli  directly  a  series  of  principles  drawn  from  wage-disputes  ( 

experience  to  serve  as  the  basis  of  a  unified  policy  for  future  guidance.  \ 

The  problem  is  to   elucidate  or  invent  methods   and   principles  in  l 

accordance  with  which  the  product  of  industry  miglit  be  shared  among  j 

the  wage  earners  and  tlie  other  participants  with  relative  peace  and  '! 


1922]  Labor  and  Labor   Organizations  305 

satisfaction.  No  policy  will  work  successfully  unless  it  accomplishes 
two  ends:  (1)  It  must  represent  convincingU^  the  effort  to  divide  the 
product  of  industry  so  as  to  satisf}^  the  most  widely  held  conceptions 
of  justice  in  the  industrial  system.  (2)  It  must  contribute,  wherever 
it  is  a  factor,  to  such  an  adjustment  of  industrial  relations  as  will 
command  the  voluntary  support  of  all  groujDs  whose  cooperation  is 
necessary  for  the  maintenance  of  industrial  peace. 

Certain  conditions  are  stipulated  as  essential  to  the  policy  to  be 
formulated.  Private  ownership  and  ojjeration  of  industries  are  as- 
sumed, but  the  policy  would  not  be  unsuitable  if  some  industries  became 
publicly  owned.  Unqualified  acceptance  of  collective  bargaining  is 
posited,  as  well  as  the  necessity  to  recognize  labor  unions,  and  to 
give  encouragement  to  some  form  of  labor  organization  where  none 
exists.  The  policy  must  aim  to  effect  a  distribution  of  the  product  of 
industry  in  which  the  return  to  the  owners  of  accumulated  capital 
does  not  exceed  a  point  to  be  determined  by  considering  the  service  of 
capital  in  production,  the  sacrifice  involved  in  much  accumulation,  the 
need  of  assuring  capital  accumulation,  and  the  evil  effects  of  inequality 
of  wealth.  The  policy  must  also  give  indirect  encouragement  to  the 
growth  of  such  industrial  beliefs  and  institutions  as  will  enable  the 
wage  earners  to  participate  in  the  control  over  the  conditions  of 
production.  These  broad  tests  of  policy'  represent  a  rather  hopeful 
fusion  of  conservatism  of  established  interest  with  the  liberalism  of 
desirable  change. 

The  first  basic  principle  calls  for  standard  rates  of  wages  in  ever}^ 
important  industry.  Wage  standardization  would  make  possible  a 
clear  knowledge  of  the  economic  position  of  the  various  classes  of  Avage 
earners,  the  accurate  measurement  of  wage  change,  and  simplicity 
and  uniformity  in  the  application  of  changes.  The  principle  of  a 
living  wage  to  insure  the  subsistence  of  the  worker  and  his  family  in 
health  and  comfort  is  upheld  in  the  second  place  for  use  in  determining 
wages  for  the  least  favorably  placed  groups  of  workers.  The  possible 
objections  to  standard  rates  and  to  minimum  living  wages  are  con- 
sidered, but  in  the  judgment  of  the  author  the  existing  evidence  war- 
rants the  extension  and  application  of  these  two  principles. 

With  the  aim  of  gradually  evolving  an  ordered  scheme  of  wage 
relationship,  upheld  by  common  consent,  prevailing  wage  levels  and 
differentials  are  to  be  accepted  with  provision  for  reconsideration  of 
the  differentials  in  the  light  of  affirmed  principles.  In  constructing 
such  a  scheme  two  central  doctrines  must  be  applied:  first,  the  doc- 
trine of  the  unity  of  the  wage  income  and  of  the  wage  earners,  which 
when  applied  means  that  the  same  wage  should  be  paid  throughout 
industry  for  work  which  requires  the  same  human  qualities  and  makes 
approximately  the  same  demands  upon  the  individual ;  secondly,  the 


306  Reviews  and  New  Books  [June 

doctrine  of  special  reward,  in  practice,  to  mean  that  certain  groups 
of  wage  earners  should  receive  higher  wages  than  other  groups,  because  j 
the  work  they  perform  is  deemed  to  require  considerably  higher  individ-  j 
ual  qualities  or  to  make  considerably  greater  demands  upon  the  indi-  j 
viduals  engaged  upon  it.  Practical  and  theoretical  difficulties  in  the  j 
way  of  applying  these  doctrines  are  anticipated  and  in  no  wise  mini- 
mized by  the  author. 

In  order  to  prevent  changes  in  the  distributive  situation  which  may 
result   from    price   movements,   and   which   are   undesirable,   all   wages 
according  to  the  policy  outlined  should  be  promptly  adjusted  to  move- 
ments in  the  general  price  level.   The  measures  of  price  change  should  be     i 
a  new  index  number  based  upon  all  the  important  commodities  produced    | 
within  the  country  with  a  weight  of  50  per  cent  given  to  food,  rent,    j 
and  clothing.      In  order  to  bring  about  such  a  distributive  outcome 
as  will  recommend  the  policy  of  wage  settlement  to  the  wage  earners 
and  to  the  comnumit^^  in  general,  it  is  proposed  that  some  test  should    ; 
be  devised  to  measure  the   share  in  the  product  of  industry  that  is    ] 
taking  the  form   of  profits.      Whenever  the  general   range   of  profits    | 
exceeds  that  profits   return  which  is   considered  just  and  sound,  the    j 
wages  of  all  groups  of  workers  should  be  increased  in  an  attempt  to    ! 
transfer  the  extra  profits  to  the  wage  earners.      To  apply  such  a  profits    \ 
test  it  would  probably  be  necessary  to  enforce  standardized  accounting    | 
methods  in  all  industries.      It  is  contemplated  to  control  profits  only 
indirectly,  however,  through  the  forces  of  industrial  competition,  trade 
union  activity,  public  opinion,  and  government  regulation.  ■ 

Finally,  the  policy  would  give  encouragement  to  the  organization 
of  labor,  recognizing  existing  trade  unions  and  dealing  with  the  repre- 
sentatives  of  groups   of  workers   in   all  wage   settlements.      It  would    I 
foster  the  establishment  of  joint  councils  and  boards  of  employers  and    i 
employees.     The  final  power  to  render  decisions,  once  a  dispute  has    j 
passed  out  of  the  hands  of  local  bodies,  would  rest  intact  with  a  central 
authority  which   should  presumably  be  politically  responsible  for  en- 
forcing the  unified  wage  policy.  I 

The  author  frankly  avoids  the  whole  question  of  the  central  polit-    i 
ical   authority   indispensable   for  putting   any   policy   into   effect,   be-    ' 
cause  its  consideration  would  have  complicated  the  inquirj'.      He  docs    ! 
indicate  that  whatever  policy  is  put  into  force  will  be  administered 
by  a  government,  with  and  by  the  consent  and   support  of  both  the 
wage  earners  and  the  employers.      Avoidance  of  this  important  phase   \ 
of  the  problem  makes  one  doubt  whether  such  a  comprehensive  and   : 
forward-looking  ])olicy  of  wage  determination  is  practicable  and  feas- 
ible for  adoption,  especially  in  view  of  the  present  post-war  period  of 
reaction  against  labor  unions  and  of  restoration  of  the  dominant  power 
of    employers    in    matters    of    industrial     relations.      This    doubt    is 


i 


1922]  Labor  and  Labor  Organizations  307 

strengthened  by  a  frequently  observed  note  of  idealism   and   hopeful 
optimism  which  the  author's  proposals  sound. 

The  book  draws  much  from  accepted  theory  as  to  wage  incomes, 
but  makes  its  contribution  that  of  bringing  together  in  a  unified 
scheme  the  essential  principles  with  accompanying  proposals  for  set- 
tling wage  disputes  constructively.  The  author  is  liberal  in  his  phil- 
osophy, and  sympathetic  with  labor.  This  work  will  be  serviceable  to 
all  students  of  the  labor  problem,  and  should  greatly  aid  those  directly 
interested  in  the  problems  of  industrial  government.  More  than  a 
dozen  typographical  errors  could  have  been  avoided.  The  word  "data" 
is  used  incorrectly  throughout  as  a  singular  form.  The  second  para- 
graph on  page  243  is  unintelligible  through  inexcusably  faulty  proof- 
reading. With  these  minor  corrections  the  book  makes  a  distinctly 
favorable  impression. 

F.  E.  Wolfe. 

University  of  Nebraska. 

NEW    BOOKS 

Browxe,  W.  R.,  compiler.  What's  what  in  the  labor  movement.  A  dic- 
tionary of  labor  affairs  and  labor  terminology.  (New  York:  Huebsch. 
1921.      Pp.  vii,  578.      $4.) 

The  whole  range  of  the  labor  movement  in  its  development  and  present 
conditions  is  here  described  by  direct  explanations  and  definitions.  The 
social,  economic,  legal,  and  historical  factors  of  modern  industrialism  are 
also  brought  out.  The  compiler  has  endeavored  to  provide  a  convenient, 
concise,  and  accurate  reference  book  on  the  subject.  One  might  question 
some  statements ;  for  example,'  in  regard  to  Malthusianism  it  is  hardly 
true  to  say  that  "it  now  occupies  a  prominent  place  in  the  economic  dis- 
card." The  redundant  population  and  recurrent  famines  in  India  and 
China  show  the  contrary.  A  rejection  of  the  wage-fund  theory  does 
not  involve  a  rejection  of  the  population  principle.  To  the  checks  on 
too  rapid  population  educed  by  Malthus  has  been  added  that  of  standard 
of  living  and  its  influence  on  the  birth  rate. 

George  M.  Janes. 

Burns,  C.  D.      Government  and  industry.    (New  York:  Oxford  Univ.  Press. 

1921.  Pp.  315.) 

Catchings,  W.  Our  common  enterprises :  a  xcay  out  for  labor  and  capital. 
(Newton,  Mass.:  Pollak  Foundation  for  Economic  Research.  1922. 
Pp.  23.) 

Reprinted  from  Atlantic  Monthly,  February,  1922. 

Chenery,  W.  L.      Industry  and  human  icelfare.      (New  York:  Macmillan. 

1922.  Pp.  xii,  169.      $1.75.) 

Contains  chapters  on  The  Pioneer  Nation,  The  Rise  of  Industry, 
Wages  in  Industry,  Regularity  of  Employment,  The  Hazards  of  Industry, 
and  The  Status  of  the  Workers. 

Lauck,  W.  J.  and  Watts,  C.  S.  The  industrial  code.  (New  York:  Funk 
&  Wagnalls.      1922.     $4..) 


308  Reviews  and  New  Books  [June 

Lewisoiin,  S.  a.  and  Moon,  P.  T.,  editors.  Constructive  experiments  in 
industrial  cooperation  hetxveen  emploi/ers  and  emploijees.  Proceedings 
of  the  Academy  of  Political  Science,  Columbia  University,  vol.  IX,  no.  4. 
(New  York:  The  Academy.      1922.      P)).   25(5.      $1.) 

Lowe,  B.  E.  The  international  protection  of  labor.  (New  York:  Mac- 
millan.      1921.      Pp.    xliii,    1.39.      $2.50.) 

Tlie  body  of  this  book  is  a  history  of  the  development  of  international 
action  in  the  field  of  labor  legislation  down  to  1914.  The  material  for 
this  part  of  the  work  was  submitted  by  the  author  in  1919  to  the  United 
States  Bureau  of  Labor  Statistics,  and  a  large  part  of  it  was  published 
by  the  Bureau  in  its  bulletin  2G8,  Historical  survei/  of  international  action 
affecting  labor.  The  text  of  the  labor  clauses  of  the  Treaty  of  Versailles 
and  of  the  draft  conventions  and  reeoinmendations  of  the  Labor  Organ- 
ization of  the  League  of  Nations  through  1920  are  added  as  a  supplement 
and  their  content  very  briefly  treated  in  the  introduction.  There  is  one 
chapter  in  which  the  objections  to  labor  legislation  through  international 
agreement  are  outlined  and  almost  as  briefly  rebutted  and  another  chapter 
in  which  the  necessity  of  the  adhesion  of  the  United  States  to  the  inter- 
national legislative  movement  is  strongly  urged.  The  appendices,  supple- 
ment and  an  extensive  bibliography  take  up  over  half  tlie  book. 

D.  A.  McC. 

Moon,  P.  T.  The  labor  problem  and  the  Social  Catholic  movement  in 
France.      (New  York:  Maemillan.      1921.      Pp.  xii,  399.      $3.25.) 

The  center  of  the  author's  interest  is  the  Social  Catholic  movement, 
not  the  labor  problem.  From  among  the  many  countries  in  which  this 
movement  has  manifested  itself,  France  is  the  one  he  has  chosen  for  this 
study.  Inasmuch  as  the  conditions  which  the  "Social  Catholics"  are 
seeking  to  have  reformed  are  for  the  most  part  labor  conditions,  or  arise 
out  of  conditions  of  labor,  the  movement  is  concerned  with  standards  of 
employment  and  with  the  spirit  in  which,  and  the  agencies  through 
which,  the  desired  results  are  to  be  striven  for.  The  first  half  of  the 
book  is  given  over  to  a  sketch  of  the  historical  background  of  the  pro- 
gram and  methods  of  the  present-day  movement.  The  influence  upon  it 
of  Catholic  leaders  and  Catholic  groups  in  other  coimtries  is  weighed  and 
a  decisive  effect  is  attributed  to  the  eneyelieal  Rerum  Novarum,  issued 
by    Pope   Leo   XIII    in    1891. 

The  presentation  of  the  views  of  individual  leaders,  of  the  social  teach- 
ings of  the  Roman  Catholic  Church  and  of  programs  for  dealing  with 
the  labor  ])r()blem  is  sujijilemented  by  a  description  of  tlie  forms  and 
activities  of  the  various  organizatitms  now  working  for  the  adoption  of 
the  Social  Catholic  ])latforni.  But  a  large  part  of  tlie  contemporary 
description  is  devoted  to  the  political  party  which  has  adopted  the  Social 
Catholic  program,  the  Popular  Liberal  party  (Action  Liberale  Populaire). 
The  tendency  to  turn  the  spotlight  on  Catholic  political  parties  and  their 
positions  on  issues  not  strictly  economic  is  also  pronounced  in  the  his- 
torical   narrative. 

The  author  is  obviously  in  sympathy  with  the  movement  he  is  describ- 
ing and  impressed  with  its  importance.  This  does  not  ])revent  him 
from  giving  its  oj)})one!its  their  day  in  court.  Extracts  from  the  speeches 
of  leaders  favorable  and  unfavorable  to  the  movement  are  numerous. 
There  is  much   in   the  book  of   value  to   the   student  of   principles   and 


1922]  Money,  Prices,  Credit,  and  Bnnhing  309 

methods  applied  to  the  labor  problem.  But  the  author  is  in  error  in  his 
assumption  that  Cardinal  Gibbon's  memorial  to  the  Holy  See  in  1887  on 
the  Knights  of  Labor  was  presented  to  secure  a  reversal  of  papal 
condemnation  of  the  Knights  in  the  United  States.  That  organization  had 
been  proscribed  in  Canada,  not  in  the  United  States.  What  the  Cardinal 
succeeded  in  securing  was  not  the  revocation  of  a  condemnation  but  the 
prevention  of  a  condemnation  of  the  Knights  of  Labor  in  the  United 
States.  D.  A.  McC. 

Parker,  C.  S.  Working  with  the  xvorking  xvoman.  (New  York:  Harper. 
1922.      Pp.  246.      $2.) 

Slesser,  H.  H.  Trade  unionism.  Second  edition,  revised.  (London: 
Methuen.      1921.      Pp.  130.      5s.) 

Stockton,  F.  T.  The  International  Holders  Union  of  North  America. 
Johns  Hopkins  University  studies  in  history  and  political  science, 
series  XXXIX,  no.  3.  (Baltimore,  Md. :  Johns  Hopkins  Univ.  Press. 
1921.      Pp.  ix,  222.      $1.50.) 

Young,  E.  W.  Comments  on  the  Interchurch  Report  on  the  Steel  Strike 
of  1919.      (Boston:  Badger.      1921.      Pp.88.      $1.50.) 

Canada  and  the  International  Labour  Conference.  Industrial  relations 
series,  bull.  no.  5.      (Ottawa:  Dept.  of  Labour.      1922.      Pp.  33.) 

Codification  of  the  Shipbuilding  Labor  Adjustment  Board  awards,  decisions, 
and  authorization — with  amendments  and  special  ridings  annotated. 
(Washington:  Gov.  Prtg.  Office,  Supt.  Docs.      1922.      50c.) 

The  international  labour  directory.  (Geneva:  International  Labour  Office. 
1922.) 

Negro  women  in  industry.  Bulletin  of  the  Women's  Bureau,  no.  20.  (Wash- 
ington: Gov.  Prtg.  Office,  Supt.  Docs.      1922.      Pp.  65.) 

The  unemployment  problem.  Research  report  no.  43.  (New  York: 
National  Industrial  Conference  Board.      1921.      Pp.  91.) 

Wages  and  hours  of  labour  in  Canada,  September,  1920,  and  September, 
1921.     Report  no.  3.      (Ottawa:  Dept.  of  Labour.      1922.      Pp.  27.) 

Money,  Prices,  Credit,  and  Banking 

Banking  Pririciples  and  Practice.      I,  Elements  of  Money,  Credit  and 
Banking.     II,  The  Banking  System  of  the  United  States,     III, 
Domestic  Banking — Cash  and  Deposit  Operations.     IV,  Domestic 
Banking — Earning  Assets.     V,  The  Foreign  Division.     Five  vols. 
By  Ray  B.  Westerfield.      (New  York :  The  Ronald  Press.   1921. 
Pp.  1370.     $12.) 
The  chief  obstacle  to  a  comprehensive  treatment  of  the  principles 
and  practice  of  banking  is  similar  to  the  difficulty  which  confronts  all 
attempts   to  discuss   realistically   the  bearing   of   economic   principles 
upon  business  policy.      The  common  experience  with  courses  in  busi- 
ness is  that  the  beginner,  in  the  absence  of  guiding  principles,  gets  lost 
in  an  entanglement  of  facts ;  while,  if  he  specializes  in  the  principles 


310  Reviews  and  New  Books  [June 

alone,  with  appropriate  hypothetical  illustrations,  he  acquires  a  set 
of  abstractions  which  have  little  bearing  on  problems  of  policy.  The 
purposes  in  this  field  of  teaching  seem  to  require  the  inculcation  of 
principles  and  the  communication  of  useful  information  at  the  same 
time,  though  the  best  method  of  achieving  such  a  combination  is  not 
yet  clear. 

Professor  Westerfield's  method  of  overcoming  this  difficulty  is  to 
move  from  the  general  to  particulars,  from  a  statement  of  under- 
lying principles  to  a  description  of  the  administrative  organization 
and  routine  practice  of  banking.  Thus  the  first  volume  sets  forth 
the  accepted  fundamentals  of  money,  credit,  and  banking;  the  second 
volume  furnishes  a  brief  historical  survey  of  commercial  banking  in 
the  United  States,  including  a  description  of  the  federal  reserve  system ; 
and  the  three  remaining  volumes  give  a  detailed  account  of  the  internal 
organization  and  operations  of  a  bank,  covering  both  domestic  and 
foreign  business.  This  indicates  the  scope  of  the  discussion  and  the 
distribution  of  emphasis  as  well  as  the  order  of  presentation.  Even 
thirteen  hundred  pages  is  a  limitation  in  covering  so  wide  a  range  of 
topics,  and  so  the  author  has  skimped  on  the  theoretical  aspects  of 
banking  and  given  fuller  treatment  to  banking  practice. 

The  exposition  is  greatly  facilitated  by  the  use  of  a  simple  structural 
plan  and  by  a  style  of  unusual  clarity  and  conciseness.  In  the  state- 
ment of  principles  the  structure  which  determines  the  order  of  topics 
and  their  proportional  importance  is  that  familiar  in  classical  theory — 
money,  government  and  bank  credit,  bank  notes  and  deposits,  reserves, 
prices ;  in  the  discussion  of  the  banking  system  the  framework  is  adapt- 
ed from  the  laws  establishing  and  regulating  national  banks  and  the 
federal  reserve  banks ;  and  in  the  description  of  banking  practice  the 
internal  administrative  organization  of  the  bank  sets  the  chapter  head- 
ings. The  direct  and  simple  statement  of  principles,  the  avoidance 
of  controversial  issues,  the  apt  use  of  historical  illustration,  and  the 
concrete  references  to  banking  operations  make  the  discussion  move 
forward  easily  and  smoothly. 

So  smoothly,  in  fact,  does  the  discussion  develop  that  the  attention 
is  hardly  arrested  at  those  })oints  where  the  conclusions  may  be  open  to 
question  or  qualification.  Thus,  for  example,  the  relation  of  credit  to 
prices  is  briefly  disposed  of  by  the  use  of  "the  equation  of  exchange," 
without  indicating  the  limitations  of  that  device  as  a  means  of  ])redict- 
ing  price  movements.  Now,  from  the  standpoint  of  clarity,  compact- 
ness, and  logical  completeness,  the  quantity  theory  is  unrivalled  as  a 
statement  of  the  mechanical  forces  operating  on  the  price  level,  under 
given  assumptions;  it  already  has  behind  it  an  interesting  and 
checkered  career,  and  it  doubtless  has  a  long  and  eventful  life  ahead  of 
it.      For  these  reasons  the  student  sliould  get  well  acquainted  with  the 


1922]  Money,  Prices,  Credit,  and  Banking  311 

theory.  But  as  a  guide  to  action  in  a  world  where  the  necessary 
assumptions  are  contradicted  by  actual  experience  the  theory  has 
certain  shortcomings.  The  process  by  which  credit  expansion  accompa- 
nies rising  prices  and  liquidation  ensues  when  prices  decline,  carries 
with  it  such  serious  consequences  for  the  banker,  the  borrower,  and  the 
community  that  the  process  should  be  fully  described,  with  such 
generalizations  as  are  possible.  Even  at  best  the  present  state  of 
our  knowledge  does  not  permit  complete  explanations  or  confident 
predictions,  but  is  it  not  wiser  to  specify  these  limitations  than  to 
preserve  the  appearance  of  giving  a  solution  by  an  appeal  to  an  ulti- 
mate principle? 

The  best  results  in  securing  really  vital  connections  between  princi- 
ple and  practice  are  at  those  points  where  Professor  Westerfield's 
analysis  oversteps  the  boundaries  of  the  stricter  theory  and  goes 
directly  to  a  consideration  of  the  bearing  of  facts  upon  public  regu- 
lation or  business  policy.  Instances  of  this  are  in  the  discussions  of 
banking  statistics  as  business  barometers ;  the  methods  of  increasing 
reserves ;  the  liquidity  of  the  banking  system  as  a  whole ;  factors  in- 
fluencing the  discount  policy  of  the  Federal  Reserve  Board ;  the  charac- 
ter of  the  collateral  loan  market  and  the  determination  of  call  loan 
rates ;  the  control  of  gold  movements  and  the  influence  of  currency 
inflation  on  foreign  exchange  rates.  The  mere  citation  of  these  topics 
shows  how  much  of  their  discussion  would  necessarily  fall  outside  the 
over-simplified  statements  which  are  presented  in  the  first  volume  as 
the  fundamental  principles  of  banking. 

These  topics  admit  that  economic  events  are  only  partially  under 
the  control  of  men  and  that  one  purpose  in  studying  them  is  to 
establish  a  more  adequate  control.  Contrast  their  discussion  with  that 
usual  introductory  statement  of  principles  which  leaves  the  impression 
that  our  financial  machinery  is  already  working  so  convenientlv  and 
automatically  as  to  hardly  require  more  than  an  occasional  oiling. 
Thus,  money  serves  as  a  medium  of  exchange  and,  by  overcoming  the 
diflSculties  of  barter,  makes  possible  an  increase  in  the  division  of  labor. 
Credit  instruments  serve  as  substitutes  for  money,  and  "as  standard 
money  facilitates  exchange  over  the  barter  economy,  so  credit  facili- 
tates exchange  over  the  money  economy."  Also,  credit  makes  "fixed 
wealth  rapidly  transferable  and  marketable  so  that  it  may  be  diverted 
to  that  operator  who  can  make  best  use  of  it."  Governments  and 
banks  both  furnish  credit  money,  but  experience  proves  that  govern- 
ments cannot  be  trusted  to  issue  paper  money  while  bankers  can.  "If 
no  limitations  are  laid  by  law  on  credit  issues  the  bankers  will  of  their 
own  accord  normally  provide  elastic  note-issues  and  elastic  deposit 
currency."  The  quantity  of  money  and  of  credit  substitutes  deter- 
mines the  level  of  prices.  "The  price  level  varies  directly  as  the  quantity 


312  Reviews  and  New  Books  [June 

of  money  and  the  velocity  of  circulation  and  inversely  as  the  volume 
of  goods  traded." — All  of  this  may  or  may  not  be  true;  and,  if  true, 
may  or  may  not  be  relevant ;  but,  in  any  case,  why  regard  these  prover- 
bial sayings  as  peculiarly  fundamental,  more  trustworthy  than  other 
generalizations  drawn  immediately  from  the  facts,  principles  par  ex- 
cellence ? 

One  way  to  make  certain  that  principles  have  a  bearing  upon 
practice  is  to  see  to  their  origin:  catch  them  young.  Rules  of  action 
seem  to  harden  into  principles  as  they  grow  old,  to  crystallize  into  a 
body  of  doctrine  and  to  become  a  thing  apart  and  aloof  from  action. 
Most  of  them,  at  the  time  of  their  birth,  played  a  part  in  the  contro- 
versies of  their  day ;  many  of  them  are  kept  alive  by  their  relevancy 
to  recurring  situations ;  doubtless  not  a  few  will  live  to  fight  another 
day.  But,  as  time  passes,  the  tendency  is  for  men  of  another  gener- 
ation to  treat  these  older  rules  of  action  as  ultimate  principles  upon 
which  the  mind  may  rest.  The  perpetuation  is  harmless  enough  unless 
in  the  meantime  new  and  pressing  problems  arise  which  call  for  action ; 
then  these  ancient  rules  are  as  likely  to  inliibit  as  they  are  to  help.  The 
final  proof  of  their  irrelevance  is  furnished  whenever  more  can  be  seen 
with  the  naked  eye  than  by  looking  through  the  spectacles  of  doctrine. 

The  upheaval  in  monetary  and  financial  afl'airs  brought  about  by 
the  war  has  seriously  upset  those  relationships  which  standard  theory 
has  regarded  as  normal.  As  a  consequence  the  conclusions  deduced 
from  these  principles  must  either  be  qualified  and  supplemented  or  the 
theorist  must  make  a  more  direct  appeal  to  the  facts.  As  was  indi- 
cated in  the  topics  cited.  Professor  Westerfield  has  not  put  more 
reliance  than  is  customar^^  upon  the  guidance  which  the  older  princi- 
ples can  offer  under  these  new  and  untried  circumstances.  But  a 
comprehensive  modernization  of  principles  is  too  large  a  task  to 
undertake  singlehanded.  All  students  of  monetary  theory  must  recog- 
nize that  for  at  least  a  decade  ahead  the  facts  concerning  the 
international  fiow  of  gold,  the  discount  policies  of  central  banks,  the 
determination  of  foreign  exchange  rates,  and  the  adjustments  between 
price  levels  in  various  countries  will  not  fit  into  a  pattern  which  assumes 
normal  (pre-war)  relations.  Would  it  not  be  a  wise  economy  during 
such  a  ])eriod  for  all  those  interested  in  banking  theory  and  practice 
to  declare  a  holiday,  guarantee  for  ten  years  the  status  quo  in  classical 
principles,  and  use  the  vacation  in  taking  a  look  at  the  facts  .^  A 
theory  more  relevant  to  present  problems  might  arise  out  of  the  facts 
tiiaii  has  come  down  to  us  out  of  the  past. 

Walter  W.  Stewart. 

Amherst  College. 


1922]  Money,  Prices,  Credit,  and  Banking  ."313 

British  War  Finance  During  and  After  the  War  101Ji.-1921.     Being 
the  Result  of  Investigations  and  Materials  Collected  hij  a  Com- 
mittee of  Section  F    (Economics  and  Statistics)    of   the  British 
Association.      Coordinated  by  A.  H.  Gibson  and  edited  by  A.  W. 
KiRKALDY.      (London:  Sir  Isaac  Pitman  &  Sons.      1921.  Pp.  vi, 
474.) 
The  British  Association  for  the  Advancement  of  Science  has  pro- 
duced in  this  a  book  of  reference  which  will  remain  unsurpassed  for 
many  years.      It  is  the  sequel  or  rather  the  summary  of  the  financial 
portions  of  previous  compilations  on  the  economics  of  the  war,  skil- 
fully edited  by  Professor  Kirkaldy  like  the  preceding  volumes,  Credit 
Industry  and  the  War  (1915),  Labor  Finance  and  the  War  (1916), 
Industry  and  Finance  (1917).      Except  for  a  concluding  chapter  of 
ten  pages  by  Mr.  Gibson,  the  book  differs  from  works  on  British  war 
finance  by  Foxwell,  Nicholson,  Pigou,  and  Scott  in  primarily  stressing 
the  statistical  facts  rather  than  advocating  policies.      It  is  expository 
rather  than  argumentative. 

The  range  of  subjects  covered  is  wide.  Public  debts,  domestic  and 
foreign  borrowings,  and  foreign  loans  are  treated  rather  fully,  down 
to  such  details  as  copies  of  circulars  of  war  loans.  The  discussion  of 
taxation  leaves  much  to  be  desired.  The  survey  of  British  banking  and 
credit  during  the  war  is  probably  the  best  that  has  thus  far  appeared. 
The  effect  of  the  war  on  the  London  security  market  and  on  the  foreign 
exchanges  is  adequately  presented.  Prices  are  discussed  both  from  the 
point  of  view  of  the  quantity  theory  of  money  and  from  that  of  the 
problem  of  supplies,  and  an  attempt  is  made  to  analyze  conditions  that 
would  affect  the  future  course  of  prices.  The  war  legislation  affecting 
finance,  government  aid  to  banks,  and  the  official  financial  reports  are 
the  subjects  of  one  chapter  each,  and  the  appendices  of  about  64  pages 
give  the  text  of  important  legislation  and  reports  not  readily  available 
in  the  original  to  the  average  reader.  The  book  also  has  numerous 
tables  and  several  good  graphs.  It  would  greatly  benefit  by  an 
analytical  table  of  contents,  which  would  furnish  a  bird's-e^'e  view  of 
the  enormous  amount  of  data  presented,  and,  more  seriously  still,  it 
completely  lacks  references  to  official  sources  and  documents  which 
would  be  welcomed  by  students  in  the  years  to  come. 

The  author  makes  the  interesting  point  (page  10)  that  "the  Bank 
act  was  suspended  only  for  a  very  short  period  of  time"  and  that 
(page  24)  "the  holder  of  a  currency  note  is  entitled  to  obtain  on 
demand  payment  in  gold  coin.  The  public  are  ignorant  of  the  con- 
vertibility of  the  note  into  gold."  Probably  the  leading  defects  of  the 
British  handling  of  the  banking  situation  during  the  war  is  the  fact 
that  the  issue  of  currency  notes  was  authorized.  Instead  of  having  the 
government  print  fiat  money  with  very  slight  gold  cover,  a  primitive 


314  Reviews  and  New  Books  [June 

form  of  war  finance,  the  same  advantage  miglit  have  been  obtained 
had  the  Bank  of  England  been  authorized  to  issue  notes  in  small  de- 
nominations, backed  by  its  relatively  larger  gold  cover.  The  problem 
of  incorporating  the  currency  note  account  into  the  Bank  of  England 
statement,  as  recommended  by  the  Committee  on  the  Currency  and  the 
Foreign  Exchanges,  would  not  have  arisen.  However,  banking  tra- 
ditions seem  inflexible.  The  theory  that  the  Bank  of  England  note 
should  be  convertible  pound  for  pound  into  gold  was  maintained  at  the 
cost  of  the  huge  inflation  by  means  of  government  paper  money. 

The  deflation  of  the  currency  notes  is  proceeding  satisfactorily. 
On  February  25,  1922,  the  currency  notes  outstanding  were  about 
£296,000,000  as  compared  with  a  high  record  of  £368,000,000  on 
December  22,  1920.  The  author  is  of  the  opinion  "that  the  limi- 
tation on  the  issue  of  currency  notes  will  doubtless  for  many  years  tend 
to  maintain  high  bank  rates  and  that  the  limitation  on  the  fiduciary 
portion  of  the  currency  note  issue  will  have  at  times  to  be  temporarily 
suspended."  Financial  prophecy  is  usually  dangerous ;  a  London 
cable  to  the  New  York  Evening  Post  of  February  18  states  that  the 
discount  rate  has  been  reduced  to  4l^  per  cent  as  compared  with  7 
per  cent  on  April  15,  1920,  and  Sl/o  per  cent  on  July  21,  1921.  Evi- 
dently falling  prices  have  freed  huge  supplies  of  credit  and  resulted 
in  the  decline  of  the  bank  rate. 

Probably  the  most  vulnerable  part  of  the  recommendations  of  the 
Committee  on  the  Currency  and  the  Foreign  Exchanges  is  that  refer- 
ring to  the  proposed  change  in  the  constitution  of  the  Bank  of  England. 
As  far  back  as  1891  Viscount  Goschen,  and  more  recently  (1918) 
Sir  Edward  Holden,  recommended  that  the  Bank  of  England  note 
issues  be  based  not  exclusively  on  gold,  pound  for  pound,  but  that  the 
procedure  of  the  German  Reichsbank,  and  more  recently  that  of  the 
federal  reserve  bank  system,  be  adopted  of  issuing  bank  notes  against 
gold  and  against  commercial  bills  in  some  ratio.  The  official  committee 
rejected  the  Holden  proposal. 

It  is  the  belief  of  many  bankers  that  had  the  Bank  of  England 
notes  been  issued  on  such  cover,  it  would  have  been  possible  to  avoid 
establishing  a  moratorium  and  certainly'  to  avoid  issuing  government 
paper  money.  Incidentally  it  might  be  added,  that  under  such  a 
scheme  the  issue  department  and  the  banking  department  of  the  Bank 
of  England  might  be  consolidated  so  that  its  balance  sheet  would 
resemble  and  its  reserve  ratio  be  comparable  to  that  of  the  other 
central  banks  of  issue. 

In  order  to  make  the  Bank  of  England's  existing  ratio  comparable 
to  that  of  the  federal  reserve  banks,  for  instance,  it  is  necessary  to 
merge  not  only  the  balance  sheets  of  the  issue  and  banking  depart- 
ments, but  also  to  include  the  Currency  Note  Account,  as  was  explained 


1922]  Money,  Prices,  Credit,  and  Banking  315 

by  the  reviewer  in  his  International  Finance  and  Its  Reorganization 
(pp.  198-201). 

Perhaps  the  most  interesting  chapter  of  the  book  to  the  American 
reader  is  that  concerning  the  foreign  loans  of  Great  Britain  and  its 
borrowings  from  the  United  States.  The  author  remarks  (page  19), 
"Unfortunately,  a  large  part  of  the  British  loans  made  to  foreign 
countries  during  the  recent  war  will  never  be  recovered.  Present  indi- 
cations point  not  only  to  loss  of  interest,  but  also  to  loss  of  capital." 
The  author  thus  reiterates  the  remark  of  Austen  Chamberlain  that  the 
British  Exchequer  figured  the  loans  of  Great  Britain  to  her  Allies  at 
50  per  cent  of  their  face  value. 

With  reference  to  the  borrowings  from  the  United  States  the  author 
tells  us  (page  18T)  "that  the  entry  of  the  United  States  of  America  into 
the  war  and  the  subsequent  granting  of  loans  by  the  United  States 
government  to  the  Allied  governments,  rendered  unnecessary  any  fur- 
ther deposit  of  securities  as  collateral  for  new  loans  raised  in  America 
by  the  British  government."  In  other  words,  had  the  United  States 
government  not  made  these  advances,  the  British  investor  would  have 
been  called  on  to  surrender  additional  securities  for  mobilization,  either 
for  sale  in  the  United  States  or  for  security  on  new  borrowings  from 
private  investors  in  the  United  States. 

The  author  quotes  (page  188)  the  reply  of  the  Chancellor  of  the 
Exchequer  to  a  parliamentary  query  in  March,  1921,  to  the  elTect 
that  there  were  at  that  time  returned  or  under  notice  for  return  to 
private  investors  about  £384,000,000  of  dollar  and  other  securities, 
and  that  there  remained  free  about  £65,000,000.  A  study  of  the  rate 
of  resale  to  American  investors  of  stocks  in  the  United  States  Steel 
Corporation,  of  the  shares  of  the  American  Telephone  and  Telegraph 
Company  and  of  the  New  York  Central  Railroad  Company,  indicates 
that  there  was  continuous  liquidation  until  April,  1917,  practically 
none  during  the  period  of  United  States  government  advances  to  the 
Allies,  and  renewed  liquidation  after  March,  1919,  when  the  "peg" 
was  released.  The  underlying  figures  are  given  in  the  reviewer's 
International  Finance  and  Its  Reorganization  (pp.  353-357). 

Whatever  may  be  the  moral  aspects  of  the  issue  of  the  cancellation 
of  the  debts  of  the  Allied  governments  to  the  United  States  govern- 
ment, one  fact  remains  clear — investors  in  Great  Britain  at  least,  and 
perhaps  also  in  France,  have  a  supply  of  foreign  securities  which,  if 
mobilized  as  they  were  in  Great  Britain  during  the  war,  could  be  utilized 
for  the  payment  of  interest  and  amortization  on  the  debt  to  the  United 
States  government.  Great  Britain's  mobilization  of  foreign  securi- 
ties was  a  unique  experiment  in  relating  private  wealth  and  public 
debt,  or  the  assets  of  the  population  with  the  liabilities  of  the 
nation.     France  attempted  the  scheme  but,  as  in  other  phases  of  war 


316  Reviews  and  New  Books  [June 

finance,  showed  little  aptitude  in  following  the  brilliantly  successful 
financial  policy  of  great  Britain.  To  what  extent  the  ineptitude  of  the 
French  Ministry  of  Finance,  in  controlling  that  part  of  the  40,000,- 
000,000  francs  of  foreign  investments  of  the  French  public  outside 
of  Russia  and  Mexico,  will  be  an  effective  reason  for  permitting  her 
to  postpone  payment  of  the  inter-Allied  debt,  and  for  discriminating 
against  England  because  she  is  better  able  to  carry  out  her  financial 
program,  is  a  point  for  the  American  Committee  on  the  Funding  of 
the  Debt  to  ponder. 

With  reference  to  the  field  of  taxation,  it  is  unfortunate  that  the 
author  did  not  amplify  his  presentation,  even  at  the  expense  of  the 
treatment  on  the  war  loans.  The  British  policy  of  war  taxation 
stands  out  in  striking  distinction  to  that  of  her  continental  allies,  by 
reason  of  the  large  percentage  of  direct  taxation  as  against  indirect 
taxation.  Direct  taxation  is  not  only  politically  democratic  but 
financially  productive  and  readily  expansible.  The  present  sound 
financial  position  of  Great  Britain  and  the  present  plight  of  her  conti- 
nental allies  hinges  very  largely  upon  this  difference  in  tax  policy. 
Mr.  Gibson,  however,  falls  into  an  error  which  was  very  prevalent  in 
this  country  also  until  it  was  exposed  by  T.  S.  Adams  from  first- 
hand evidence  as  treasury  adviser  on  tax  matters.  Mr.  Gibson  states 
that  the  excess-profits  tax  added  to  the  prices  of  goods.  This  state- 
ment implies  that  the  profiteers  were  soft-hearted  and  raised  prices 
only  because  they  had  to  pay  taxes.  In  fact  what  they  did  was  to 
charge  all  the  traffic  would  bear,  and  when  prices  began  to  decline 
in  1921,  even  the  excess-profits  tax  was  unable  to  maintain  prices  at 
profiteers'  levels.  The  criticism  of  Mr.  Gibson  in  his  concluding 
chapter  (page  -iOl)  that  "it  should  have  been  possible  to  set  a  limit 
to  wages  and  profits,  and  more  or  less  to  conscript  industry"  reflects 
his  liberal  leanings  but  is  in  square  contradiction  with  the  fact  that 
he  cites  on  page  208,  that  "the  Munitions  was  a  100  per  cent  tax  on 
profits  over  a  certain  amount  and  practically  failed  as  a  revenue-pro- 
ducing measure.      Its  enemy  was  human  nature." 

Mr.  A.  H.  Gibson  is  a  banker,  the  Bradford  manager  of  the  Anglo- 
South  American  Bank  and  had  suggested  the  raising  of  war  loans  by 
means  of  day-to-da\'  borrowing,  generally  associated  with  the  name 
of  Sir  Drummond  Fraser.  His  labor  in  economic  science  is  worthy 
of  emulation  by  his  professional  confreres. 

Elisha  M.  Friedman. 

NEW     BOOKS 

Anderson,  B.  M.  Artificial  siahilization  of  exchange  condemned — outline 
of  a  fundamental  solution.  Tlic  Chase  Economic  Bulletin,  vol.  II, 
no.  1.      (New  York:  The  Chase  National  Bank.      1922.      Pp.  53.) 


1922]  Money,  Prices,  Credit,  and  Banking  317 

Angas,  L.  L.  B.  Reparations,  trade  and  foreign  exchange.  (London: 
King.      1922.      Pp.   351.      12s.   6d.) 

Baldy,  E.  Les  hanques  d'affaires  en  France  depuis  1900.  (Paris:  Lib. 
Generale  de  Droit  et  de  Jurisprudence.      1922.      Pp.  391.     25  fr.) 

Bastian,  E.  Lexikon  des  Geld-,  Bank-  und  Borsenwesens.  Begriffe, 
Ausdrucke  und  Vorgdnge  des  tdglichen  Geschdftsverkehrs  in  ihrer  Bedeu- 
tung  und  Anwendung.      (Stuttgart:  Muth.      1921.      Pp.  140.      19.80  M.) 

Blodgett,  H.  a.  Double  your  savings;  it  can  he  done.  (St.  Paul,  Minn. : 
Harvey  Blodgett  Co.,  Bank  Business  Bldg.      1921.      Pp.  97.      $1.) 

Cassel,  G.  The  world's  monetary  probleins,  tivo  memoranda.  (London: 
Constable.      1921.      Pp.   154.      3s.   6d.) 

Decamps,  J.  Les  changes  Strangers.  (Paris:  Lib.  Felix  Alcan.  1922. 
20  fr.) 

DoLLE,  C.  F.  The  law  of  business  paper  and  security.  (Chicago:  T.  H. 
Flood  &  Co.      1922.      Pp.   423.) 

Gephart,  W.  F.  The  Ter  Meulen  credit  plan.  Reprinted  from  the  North 
American  Review,  March,  1922.  (New  York:  North  Am.  Rev.  Corp. 
1922.      Pp.   7.) 

Gilbert,  A.  De  la  hausse  des  prix  en  France  a  la  suite  de  la  guerre  de 
1914.      (Poitiers:  Imp.  Masson.      1920.      Pp.  114.) 

Hantos,  E.  Die  Zukunft  des  Geldes.  (Stuttgart:  Enke.  1921.  Pp.  76. 
11.20  M.) 

The  title  does  not  describe  the  contents  of  this  book.  It  treats  not  of 
the  future  of  money,  but  of  the  future  of  the  monetary  standards  in 
Europe  during  the  next  ten  years.  The  author  is  firmly  convinced  that 
the  world  must  return  to  sound  principles  of  banking  but  he  expects 
that,  in  consequence  of  the  liavoc  wrought  by  inflation  in  Europe,  an 
era  of  the  gold  standard  can  only  come  again  when  gold  has  become 
an  article  of  commerce,  and  is  freely  bought  and  sold. 

According  to  the  author,  who  was  formerly  Hungarian  State  Secretary 
of  Commerce,  the  causes  of  the  monetary  weakness  of  the  countries  in 
Europe  are  to  be  found  not  only  in  the  enormous  increase  of  paper 
money,  but  in  the  slowing  down  of  its  circulation  in  consequence  of  the 
rise  in  price  of  all  commodities.  In  addition  to  that  there  is  the  de- 
struction of  goods  caused  by  the  war,  the  difficulties  of  transport  and  of 
procuring  raw  materials  and  machines,  the  lack  of  labor,  and  the  high 
cost  of  production.  As  a  result  too  few  goods  are  produced  which 
interest  foreign  buyers  and  lead  them  to  buy  the  currency  of  the  European 
countries.  The  most  important  thing  is,  however,  to  get  rid  of  the  dis- 
parity between  currency  and  goods,  by  contracting  the  former  and  in- 
creasing the  latter. 

The  weak  countries  will  have  to  be  content  with  a  currency  based  on 
a  certain  stock  of  gold  held  for  this  purpose,  but  without  a  free  inter- 
change of  notes  for  gold  (gold-nucleus  currency),  or  with  an  even 
more  modest  currency,  that  is,  of  such  a  nature  that  in  the  bank  of  issue 
there  is  no  gold  reserve  but  instead  of  that  a  stock  of  bills  of  exchange, 
checks,  demand  notes,  etc.,. payable  in  other  countries  in  which  there  is  a 
gold  basis  to  the  currency  (gold-bill  of  exchange  currency).  In  a 
pamphlet  (Monefar^  and  Currency  Standards,  Vienna,  1921)  I  have  desig- 


318  Reviews  and  New  Books  [June 

nated  such  systems  as  forms  of  paper  currency.  For  the  rest  I  agree 
with  the  author  that  the  main  object  of  the  weak  countries  must  be  to 
attain  such  a  level  of  value  of  their  currency  as  is  moderately  stable, 
and  to  increase  their  industrial,  agricultural  and  mining  production,  and 
their  exports. 

Vienna.  E.  Schwiedland. 

Harding,  W.  P.  G.  The  federal  reserve  system  as  related  to  American 
business.  (Philadelphia:  Federal  Reserve  Bank  of  Philadelphia.  1922. 
Pp.  28.) 

Hare,  L.  A  study  of  exchange  direct  and  through  the  medium  of  currency. 
(London:  King.      1921.     2s.  6d.) 

Hauptmann,  M.  Le  credit  apres  la  guerre.  (Louvain:  Imp.  Ceuterick. 
1921.      Pp.  30.) 

Just,  R.  Die  Geldinflation  mit  hesonderer  Beriicksichtigung  der  Geld- 
politik  der  Schxoeiz  wdhrend  des  Weltkrieges.  (Jena:  Fischer.  1921. 
Pp.  iv,  114..      18  M.) 

Kavanaugh,  T.  J.  Bank  credit  methods  and  practice.  (New  York: 
Bankers  Pub.  Co.      1921.      Pp.  241.     $2.50.) 

Kemeny,  G.  Die  fremden  Wechselkurse  und  die  Umxvdlzung  der  interna- 
tionalen  Wirtschaftsheziehtingen.  (Essen:  Baedeker.  1921.  Pp.  124. 
16  M.) 

Kerschagl,  R.  Die  Lehre  vom  Gelde  in  der  Wirtschaft.  (Vienna: 
Manz.     1921.     10  M.) 

Kniffin,  W.  H.  American  hanking  practice.  (New  York:  McGraw-Hill, 
1921.      Pp.  xii,  389.     $3.50.) 

The  purpose  of  this  book  is  to  furnish  a  simple  and  complete  state- 
ment of  the  operations  of  a  bank.  It  describes  the  functions  of  the 
receiving  teller  and  the  paying  teller;  the  methods  of  collecting  checks; 
the  organization  of  information  used  in  making  loans ;  the  character  of 
the  various  kinds  of  loans ;  the  procedure  in  bank  accounting ;  and  the 
administration  of  the  bank.  Illustrations  of  credit  instruments  and  of 
forms  used  in  bank  transactions  are  presented.  The  Uniform  Negotiable 
Instruments  law  is  printed  as  an  appendix. 

Montarnal,  H.  Traite  pratique  du  contentieux  commercial  de  la  banque 
et  de  la  bourse.      (Paris:  Marcel  Riviere.      1922.) 

Morgan,  G.  W.  and  Parker,  A.  J.  Banking  laze  of  New  York,  chapter  2 
of  consolidated  laws,  chapter  369,  latvs  of  lOlJf.  Sixth  edition.  (New 
York:  Banks  Law  Pub.  Co.      1921.) 

Renard,  G.     La  vie  chere.      (Paris:  O.  Doin.      1921.      Pp.  252.) 

Robertson,  D.  H.     Money.      (London:  Nesbets.     1922.     5s.) 

Selioman,  E.  R.  a.  Currency  inflation  and  public  debts.  (New  York: 
Equitable  Trust  Co.      1921.'    Pp.  8G.) 

Smith,  J.  A.  Sidelights  on  banking.  (Los  Angeles,  Calif:  Bankers  Ser- 
vice Co.,  811  Garland  Bldg.      1922.      Pp.  32.) 

SuBERCASEAUX,  G.  El  sistctna  monetario  i  la  organizacion  hancaria  de 
Chile.      (Santiago,  Chile:  Soc.  Imp.  i  Lit.  Universo-      1920.      Pp.  404.) 


1922]  Money,  Prices,  Credit,  and  Banking  319 

Towers,  G.  F.  Financing  foreign  trade.  (Montreal:  Royal  Bank  of 
Canada,  Head  Office.      1921.      Pp.95.) 

Valgren,  V.  N.  and  Exglebert,  E.  E.  Farm  mortgage  loans  by  banks, 
insurance  companies,  and  other  agencies  (bull.  no.  1047).  Bank  loans 
to  farmers  on  personal  and  collateral  security  (bull.  no.  10  i8).  (Wash- 
ington: Gov.  Prtg.  Office,  Supt.  Docs.      1921.      5c  each.) 

Willis,  H.  P.  and  Edwards,  G.  W.  Banking  and  business.  (New  York: 
Harper.      1922.       Pp.  x,  573.     $3.50.) 

Wiprud,  a.  C.  The  federal  farm  loan  system  in  operation.  (New  York: 
Harper.      1921.      Pp.  xix,  280.      $2.) 

The  first  hundred  pages  of  this  book,  written  by  the  vice  president 
of  the  Federal  Land  Bank  of  Saint  Paul,  contain  a  semi-popular  presenta- 
tion of  the  manner  in  which  federal  land  banks  and  national  farm-loan 
associations  function,  the  purpose  being  to  set  forth  the  "real  object 
and  worth"  of  the  new  rural  credit  system  "in  its  cooperative  aspects." 
Special  attention  is  given  to  an  analysis  of  the  cooperative  features  of 
the  Farm  Loan  act,  and  "the  cooperative  spirit  which  permeates  the 
federal  farm-loan  system."  There  is  also  an  introductory  chapter  con- 
tributed by  Ex-secretary  of  the  Treasury  W.  G.  McAdoo. 

The  remainder  of  the  book  consists  of  an  appendix  which  contains  a 
brief  chapter  on  the  joint-stock  land  banks,  a  text  and  index  of  the 
Federal  Farm  Loan  act  (covering,  in  all,  118  pages),  a  bibliography  of 
public  documents  and  writings  favorable  to  the  system,  and  the  recent 
opinion  of  the  United  States  Supreme  Court  in  upholding  the  constitu- 
tionality of  the  Farm  Loan  act. 

The  author  heartily  endorses  the  position  taken  by  Ex-secretary 
McAdoo  in  his  introductory  chapter  that  in  the  case  of  farm-loan  bonds 
"tax  exemptions  must  be  maintained  because  they  are  absolutely  neces- 
sary if  the  farmers  are  to  be  assured  an  ample  supply  of  long-time  credits 
at  reasonable  rates  of  interest"  (p.  xvii).  Nothing  is  said  concerning 
the  other  side  of  the  question,  namely,  the  effects  of  tax  exemption  under 
a  regime  of  graduated  income  taxes.  The  author  seeks  to  justify  the 
exemption  of  farm-loan  bonds  on  the  ground  that  there  are  many  other 
kinds  of  tax-free  securities  in  the  market,  also  that  tax  exemption  is  a 
subsidy  which  the  American  farmer  needs  (p.  45).  It  would  be  difficult 
to  find  many  economists  who  would  take  this  view  of  the  matter.  While 
few  would  object  to  the  exemption  of  farm-loan  bonds  from  the  personal 
property  taxes  of  the  various  states,  practically  all  would  agree  that  the 
income  from  all  securities,  whether  federal,  state,  municipal,  etc.,  should 
be  subject  to  federal  income  taxes.  Unfortunately,  the  tax-exemption 
policy  now  in  force  tends  to  nullify  the  purpose  of  graduated  income 
taxes,  and  to  shift  the  tax  burden  more  and  more  to  those  having  rela- 
tively small  incomes. 

The  book  should  prove  to  be  a  convenient  source  of  information  on 
matters  pertaining  to  the  farm-loan  system.  But  the  author's  defense  of 
the  tax-exemption  and  cooperative  features  of  the  Federal  Farm  Loan 
act  is  far  from  convincing. 

George  E.  Putnam. 

Commercial  banking  practice  under  the  Federal  Reserve  act.  Third  edition, 
revised  to  October,  1921.  (New  York:  National  Bank  of  Commerce. 
1921.     Pp.  178.) 


320  Reviews  and  New  Books  [June. 

Depreciated  exchange  and  international  trade.  (Washington:  U.  S.  Tariff 
Commission.      1922.      Pp.   118.      15c.) 

The  federal  reserve  si/stem — its  purpose  and  work.  The  Annals,  vol. 
XCIX,  no.  188.  (Philadelphia:  Am.  Academy  of  Political  and  Social 
Science.      1922.      Pp.  229.     $1.) 

Proceedings  of  the  forty-second  annual  meeting  of  the  Building  Associa- 
tion League  of  Illinois.  (Chicago:  Am.  Building  Assoc.  News  Pub.  Co. 
1921.      Pp.  110.) 

Public  Finance,  Taxation,  and  Tariff 

Outlines  of  Public  Finance.  By  Meklin  Harold  Hunter.  (New 
York:  Harper  &  Brothers.      1921.      Pp.  xviii,  533.     $3.25.) 

Teachers  of  public  finance,  who  have  long  been  restricted  in  the 
choice  of  texts,  will  doubtless  welcome  this  addition  to  the  field  of  short 
general  treatises  on  the  subject.  The  book  is  written  in  straight- 
forward, clear  language.  It  possesses  unusually  good  section  head- 
ings given  in  concise  sentence  form.  The  arrangement  of  subject- 
matter  and  the  judgment  exercised  in  leaving  certain  things  out  and 
putting  other  things  in  will  doubtless  not  please  everyone,  but  the 
general  results  are  commendable.  The  content  is  strictly  up-to-date, 
including  such  items  as  the  new  federal  budget  law  and  discussion  of 
the  proposed  sales  tax.  Generally  speaking,  confusing  technical  de- 
tails and  space-filling  tables  have  been  omitted.  Perhaps  the  carping 
critic  can  find  some  excuse  for  tearing  the  volume  to  shreds,  but  the 
reviewer  believes  that  it  is  a  book  well  adapted  to  class  instruction  and 
to  the  uses  of  the  general  reader  engaged  in  private  study. 

The  main  divisions  of  the  subject  follow  the  standardized  order  of 
discussion,  namely,  expenditure,  revenue,  public  indebtedness,  the  ad- 
ministration of  public  funds,  and  "financing  an  emergency."  There  is 
nothing  particularly  new  or  startling  in  the  two  chapters  given  to  ex- 
penditure. However,  the  characteristics  and  the  classification  of  ex- 
penditures are  attractively  presented.  Sixt}^  per  cent  of  the  reading 
matter  in  the  book  is  devoted  to  revenue;  fifty  per  cent,  to  taxation. 
Public  debts  and  fiscal  administration  are  restricted  to  one  fairly  short 
chapter  each.  In  connection  with  the  latter  subject,  attention  should 
be  called  to  the  sections  on  state  budget  systems  and  the  administration 
of  municipal  finance.  Following  the  discussion  of  emergency  finance, 
there  is  a  brief  chapter  on  the  cost  of  war  which  every  militarist  could 
read  with  profit.  While  this  topic  might  have  been  considered  under  ex- 
penditures at  the  beginning  of  the  book,  it  forms  a  fitting  conclusion 
to  the  study  of  war  finance. 

The  author  follows  Bastable  in  discussing  shifting  and  incidence 
prior  to  explaining  the  nature  and  history  of  the  various  kinds  of  taxes. 
This  scheme  has  its  merits  in  that  it  gives  the  reader  a  better  back- 


1922]  Public  Finance,  Taxation,  and  Tariff  321 

ground  for  judging  the  virtues  of  different  taxes  than  is  the  case  where 
the  arrangement  is  reversed.  If  we  investigate  such  questions  as  pro- 
gression in  taxation,  the  faculty  theory,  and  the  canons  of  taxation 
before  we  examine  the  details  of  a  tax  system,  why  not  complete  the 
foundation  work  by  surveying  the  general  principles  of  shifting  and 
incidence  ? 

The  order  in  which  taxes  are  treated  is  apparently  largely  a  matter 
of  convenience  since  most  classifications  are  held  to  be  of  little  value 
in  providing  air-tight  compartments  for  taxes  as  they  actually  func- 
tion. Chapters  are  given  to  customs  duties,  property  taxes,  income 
taxes,  inheritance  taxes  and,  in  addition,  there  are  the  long-needed 
chapters  on  property  tax  reform,  the  taxation  of  corporations,  and 
the  single  tax.  To  secure  condensation,  and  not  at  all  because  they 
are  related,  excises,  capitation  taxes,  and  business  taxes  are  thrown 
together  in  a  single  chapter.  The  excess-profits  tax  is  treated  very 
briefly  under  war  finance. 

On  controversial  matters  the  author  avoids  extremes.  For  example, 
he  states  that  while  "the  extensive  use  of  taxes  has  much  to  commend 
it,"  yet  "the  proper  combination  of  loans  and  taxes  forms  the  best  war 
finance  policy."  Again,  he  has  no  sympathy  for  a  single  tax  of  any 
kind,  although  he  acknowledges  the  value  of  agitation  for  a  single  tax 
on  economic  rent  in  so  far  as  it  has  emphasized  the  defects  in  our 
fiscal  system.  Other  illustrations  of  this  kind  might  be  given  in  con- 
nection with  his  discussion  of  shifting  and  incidence,  the  separation  of 
state  and  local  tax  sources,  and  customs  duties.  The  even  temper  of 
the  book  will  not  be  relished  by  the  propagandist,  but  it  should  be  of 
material  help  to  the  student  who  is  just  beginning  to  grope  his  way 
through  the  intricacies  of  fiscal  policy. 

Frank  T.  Stockton. 

University  of  South  Dakota. 

Taxation,  Yesterday  and  Tomorrow.  By  Robert  Jones.  (London: 
P.  S.  King  &  Son.  1921.  Pp.  147.  3s.  6d.) 
"This  little  volume,"  says  the  preface,  "is  not  written  as  a  textbook, 
though  it  contains  textbook  material."  It  seems  to  have  been  written 
in  an  attempt  to  present  the  newest  leveling  theories  of  taxation  in  a 
favorable  light  to  those  unacquainted  with  them,  but  whether  intended 
more  to  educate  the  stolid  conservative  or  to  stimulate  the  radically 
inclined  reader  is  not  apparent.  The  writer  is  a  disciple  of  the  Webbs 
and  is  already  known  as  the  author  of  The  Nature  and  First  Principle 
of  Taxation.  He  has  a  warm  sympathy  with  most  of  the  "liberal" 
fiscal  proposals  of  the  day,  which  leads  him  at  times  into  statements 
that  are  certain  to  excite  suspicion  or  provoke  opposition.  This  is 
especially  true  of  the  first  half  of  the  book. 


322  Reviews  and  New  Books  [June 

Examples  are  the  following:  on  page  5  the  author  states  that  if  the 
British  government  had  received  all  the  rent  of  British  land,  no  taxes 
would  have  been  necessary  before  the  war;  he  states  (p.  43)  that  Henry 
George's  maxims  of  taxation  are  decidedly  better  than  Adam  Smith's ; 

he  speaks    (p.  49)   of  the  "diminution  of  taxes    by  State  and 

municipal  enterprises"  as  a  modern  development,  as  if  it  were  an 
unquestioned  fact  that  such  enterprises  have  generally  enabled  taxes 
to  be  diminished.  Of  course,  some  of  these  provoking  statements  are 
matters  of  opinion  concerning  which  the  author  may  be  right,  but  the 
dogmatic  style  in  which  they  are  made  neither  convinces  nor  conciliates. 

Another  instance  may  also  be  mentioned,  not  very  important  in 
itself,  but  nevertheless  an  example  of  misleading  inference — that  is, 
tlie  description  of  Solon's  income  tax  (if  it  was  an  income  tax)  as 
steeply  progressive.  Inasmuch  as  the  highest  rate  went  into  effect 
when  the  income  reached  500  medinnii,  or  850  bushels  of  grain,  it  must  ' 
be  considered  a  degressive  tax,  not  a  progressive  one.  Such  a  yield  i 
can  easily  be  obtained  from  a  sixty-acre  farm ;  it  could  hardly  have  \ 
been  the  equivalent  in  purchasing  power  of  more  than  ,$2000  of  present-  | 
day  money  income.  Moreover,  the  amount  of  tax  collected  from  each  ! 
class  is  not  known,  nor  whether  it  was  an  annual  tax  or  an  extra-  ; 
ordinary  levy.  : 

On  tlie  other  hand,  the  later  chapters  of  this  book  deserve  to  be  j 
liighly  recommended.  That  on  justice  in  taxation  is  very  good  indeed, 
largely  because  it  takes  into  account  opposing  views,  and  endeavors 
to  explain  and  reconcile  them.  There  is  a  very  interesting  passage  on  [ 
the  psychology  of  ethical  standards  leading  to  the  conclusion  that  ' 
changes  must  come  by  steps  rather  than  by  leaps  and  that  men's  \[ 
"reasonable  expectations"  should  be  secured  as  far  as  possible.  ^i 

Like  nearly  all  recent  Englisli  writers  on  finance,  INIr.  Jones  considers  I 
the  capital  levy  and  its  alternatives,  of  which  he  favors  a  ten-year  ' 
scheme  involving  increased  super-taxes  and  inheritance  duties — in  fact  j; 
a  deliberate  attenq)t  to  take  all  "unproductive  surpluses"  for  the  public  | 
use.  He  would  even  establish  an  absolute  maximum  of  £10,000  for  J 
inheritances.  "There  is  no  case,"  he  says  (p.  118),  "in  economics  H 
or  in  ethics,  for  the  inheritance  of  any  but  moderate  fortunes."  I 

Mr.   Jones   submits   his   proposals   not   as   part   of   a   revolutionary      i 
program,  but  as  an  alternative  to  violent  revolution.     As  such  they     ]\ 
deserve  careful  consideration,  and  in  fact  should  be  nmch  less  seriously      \ 
opposed  by  economists  than  by  readers  not  acquainted  with  theories 
of  margins  and  surpluses. 

RuFus  S.  Tucker. 
Harvard  Univcrsifij.  i 


1922]  Public  Finance,  Taxation,  and  Tariff  323 


NEW    BOOKS 


Andrews,  A.  B.  Per  capita  cost  of  courts.  Revised  addendum  of  Jan- 
uary 6,  1922.  (Raleigh,  N.  C. :  Author,  239  Fayetteville  St.  1922. 
Pp.  16.) 

Barton,  W.  E.  and  Browning,  C.  W.  Federal  income  tax  laws;  cor- 
related and  annotated,  including  the  act  of  1921.  (Washington:  John 
Bryne  &  Co.      1922.      Pp.  525.     $10.) 

Beman,  L.  T.,  compiler.  Selected  articles  on  current  problems  in  taxation. 
(New  York:  H.  W.  Wilson  Co.      1921.      Pp.  vii,  350.      $2.25.) 

Brand,  R.  H.  War  and  national  finance.  (New  York:  Longmans,  Green. 
1922.      Pp.  xii,  287.      $5.) 

DiETZ,  F.  C.  English  government  finance,  lJf85-1558.  Studies  in  the 
social  sciences,  vol.  IX,  no.  3.  (Urbana,  111.:  Univ.  of  Illinois.  1922. 
Pp.  235.     $2.25.) 

Fassett,  C.  M.  Handbook  of  municipal  government.  (New  York:  Crowell. 
1922.      Pp.  viii,  192.     $1.50.) 

Fastout,  a.      Une  politique  financiere.      (Paris:  G.  Cres.      1922.  4.50  fr.) 

Grilli,  C.  II  protezionismo  dopo  la  guerra.  (Rome:  Author,  Viale  della 
Regina  86.      1921.      Pp.   1921.) 

Hawtrey,  R.  G.  The  exchequer  and  control  of  expenditure.  (New  York: 
Oxford  Univ.  Press.      1921.      Pp.  72.     $1.) 

Lever,  E.  A.  A  primer  of  taxation:  an  introduction  to  public  finance. 
(London:  King.      1922.      Pp.   106.      2s.  6d.) 

This  little  pamphlet  is  a  simply  written  introduction  to  public  finance, 
intended  to  enable  the  common  British  voter  to  understand  the  taxing 
system  of  his  country,  both  national  and  local.  There  are  also  chapters 
on  public  expenditure,  the  budget  and  the  public  debt.  There  is  nothing 
startling  in  the  theories  stated.  The  only  serious  error  is  one  of  which 
J.  S.  Mill  was  equally  guilty,  viz.,  the  denial  of  any  element  of  voluntari- 
ness in  indirect  taxes.  Neither  of  these  writers  perceives  the  great 
difference  between  avoiding  the  payment  of  a  tax  by  dispensing  with  the 
taxed  article,  if  the  tax  is  imposed  on  a  dispensable  commodity,  and  on 
the  other  hand  merely  saving  an  amount  sufficient  to  pay  the  tax  by 
dispensing  with  some  luxury,  if  the  tax  is  a  direct  one.  Aside  from  this, 
the  book  is  very  well  adapted  to  its  purpose. 

RuFus  S.  Tucker. 

Lhote,  J.  La  douane  en  France  et  a  I'etranger.  (Poitiers:  Lib.  P.  Oudin. 
1922.) 

Mayers,  L.  The  federal  service:  a  study  of  the  system  of  personnel  adinin- 
istration  of  the  United  States  government.  The  Institute  for  Govern- 
ment Research  studies  in  administration.  (New  York:  Appleton.  1922. 
Pp.  xvi,  607.     $5.) 

Deals  largely  with  the  personal  force  of  the  government,  with  chapters 
on  "Selection  of  employees,"  "Classification  and  standardization  of 
salaries,"  and  "The  maintenance  of  individual  efficiency." 

Moehlman,  a.  B.,  Thomas,  J.  F.  and  Anderson,  H.  W.  An  analysis  of 
the  1922-1923  budget  requests  of  the  Board  of  Education  of  the  City  of 
Detroit.  The  Detroit  Educational  Bulletin,  no.  8,  Feb.,  1922.  (Detroit, 
Mich. :  Bd.  of  Education.      1922.      Pp.61.) 


324  Reviews  and  New  Books  [June 

Montgomery,  R.  H.     Income  tax  procedure — 1922.      (New  York:  Ronald 
1922.      Pp.  xxi,  1911.      $10.) 

With  the  enactment  of  the  new  income  tax  law  comes  a  new  edition  of 
Montgomery's  handbook.  As  stated  last  year  a  new  edition  at  least  once 
every  year  is  necessary  on  account  of  the  multitude  of  new  rulings.  The 
1922  edition,  while  retaining  the  many  excellent  features  noted  in  the 
reviews  of  earlier  editions  published  in  the  American  Economic  Review, 
has  had  to  be  in  large  part  rewritten  not  only  on  account  of  the  new 
statute  but  to  give  consideration  to  the  important  court  rulings  and 
Treasury  decisions. 

The  Revenue  act  of  1921  was  analyzed  by  Professor  Roy  G.  Blakey 
in  the  American  Economic  Review  for  March  1922,  so  it  is  unnecessary 
to  present  in  this  connection  any  outline  of  the  changes  made  by  the 
new  law. 

Montgomery  expresses  bitter  disappointment  over  the  new  law.  "It 
is  long  and  complicated";  it  denies  "discretion  to  Commissioner  of  Inter- 
nal Revenue";  "it  omits  reference  to"  certain  "items  of  income"  and  "fails 
to  deal  with"  certain  "items  of  deductions";  "it  neglects  to  specify  how 
the  Commissoner  shall  settle  the  omitted  items,  and  then  comes  chaos." 
"The  truth  of  the  matter  is  that  Congress  did  not  have  the  courage  to 
face  the  issue  and  exact  an  understandable  law."  The  author  is  in 
accord  with  many  others  that  we  ought  to  have  and  probably  will  have 
another  new  law  soon. 

Congress  seems  to  be  moving,  slowly  indeed,  to  a  recognition  of  the 
fact  that  all  gains  and  profits  are  not  income.  The  establishment  by  the 
new  law  of  a  new  category  of  gains  (Montgomery  mistakenly  calls  them 
"income")  known  as  "capital  gains"  may  be  hailed  as  the  first  step  toward 
a  definition  of  income  more  nearly  in  accord  wtih  the  common  man's  ideas. 
Montgomery  still  runs  his  hobby  that  earned  income  is  discriminated 
against  and  that  investment  income  should  be  still  more  heavily  taxed 
than  it  now  is.  It  seems  a  little  strange  that  he  cannot  see  that  income 
from  real  estate  has  paid  in  property  taxes  the  equivalent  of  an  income 
tax  of  from  20  to  30  per  cent  before  the  federal  income  tax  descends  upon 
it;  that  income  from  corporations  by  reason  of  the  property  and  other 
state  and  local  taxes  has  likewise  paid  a  tax  equal  to  an  income  tax 
of  20  to  ;iO  per  cent,  that  furthermore  the  federal  income  tax  on  corpo- 
ration profits  is  now  121/)  per  cent  straight  or  above  14  per  cent  on  divi- 
dends and  that  these  burdens  ranging  from  20  per  cent  to  44  per  cent 
are  in  addition  to,  in  many  if  not  all  cases,  the  4  per  cent  or  8  per  cent 
normal  tax  and  surtaxes  which  alone  the  earners  are  required  to  pay. 
Montgomery  makes  the  naive  suggestion  that  "where  the  real  estate  tax 
is  already  inordinately  taxed  the  remedy  should  be  sought  in  a  reform 
of  the  state  as  well  as  the  local  tax  system."  It  may  well  be  pointed  out 
that  to  provide  any  material  relief  the  reduction  in  the  property  tax 
would  have  to  be  drastic  indeed. 

One  great  merit  of  Montgomery's  treatise  is  that  he  never  forgets  that 
there  are  five  income  tax  laws  all  more  or  less  in  force.  He  not  only 
informs  his  readers  of  the  "former  procedure"  in  separate  paragraphs, 
but  in  the  general  discussion  points  out  the  changes  in  as  simple  a  manner 
as  is  possible  in  dealing  with  so  intricate  a  subject. 

Carl    C.    Plehn. 

University  of  California. 


1922]  Public  Finance,  Taxation,  and  Tariff  325 

Seligman,  E.  R.  a.     Essays  in  taxation.      Ninth  edition  completely  revised 
and  enlarged.      (New  York:  Macmillan.      1921.      Pp.  806.) 

In  the  new  edition  of  the  Essays  in  Taxation,  we  find  some  of  the 
earlier  essays  brought  down  to  date  and  five  new  chapters  added.  The 
new  chapters  consist  of  addresses  and  papers  published  since  1913,  the 
date  of  the  last  previous  edition. 

One  of  the  five  is  on  The  Next  Step  in  Tax  Reform  and  discusses  the 
classification  of  property  and  the  income  tax.  This  was  the  presidential 
address  at  the  ninth  annual  conference  of  the  National  Tax  Association 
(San  Francisco,  1915).  Another  is  on  The  Relations  of  Federal,  State 
and  Local  Revenues,  a  combination  of  two  papers,  one  read  before  the 
Second  Pan-American  Congress,  1915,  and  another  before  the  New  York 
State  Tax  Association,  1917.  Another  is  on  The  War  Revenue  Acts  and 
consists  of  an  article  published  in  the  Political  Science  Quarterly  in  1918. 
This  one  has  been  amplified  by  notes  and  appendices.  Another  is  on 
Loans  versus  Taxes  in  War  Finance,  reprinted  from  the  volume  on 
Financing  the  War  in  the  Annals  of  the  American  Academy  of  Politics 
and  Social  Science,  1918.  The  remaining  one  is  on  The  Cost  of  the  War 
and  How  it  Was  Met,  from  the  American  Economic  Review,  1919. 

It  is  well  worth  while  to  have  these  essays,  together  with  those  pre- 
viously assembled,  all  in  one  volume. 

Carl  C.  Plehn. 

The  shifting  and  incidence  of  taxation.      Fourth  edition  revised. 


(New  York:  Columbia  Univ.  Press.      1921.     Pp.  xii,  431.) 

The  changes  in  this  edition  of  the  volume  on  Shifting  and  Incidence 
are  comparatively  slight.  There  are  a  dozen  or  so  additions  to  the 
discussion  of  the  older  literature,  and  some  changes  in  the  presentation 
of  the  theory  of  capitalization  and  of  the  incidence  of  taxes  on  profits 
and  surplus.  The  changes  as  to  capitalization  consist  of  footnote  refer- 
ences to  more  recent  discussions,  mostly  to  those  which  arose  from  the 
new  British  land  taxes,  and  of  an  additional  illustration  of  the  effect  of 
unequal  taxes  on  like  capital  items.  The  changes  with  reference  to  the 
tax  on  profits  are  two  new  footnotes.  Professor  Seligman  still  considers 
that  the  "real  problem"  *  *  *  "is  to  ascertain  the  conditions  according 
to  which  a  tax  is  shifted  forward,  backward,  or  not  at  all,"  and  stops 
when  he  has  ascertained  "on  whom  the  tax  ultimately  falls"  without  going 
on  to  consider  the  "effects  produced  by  the  pressure  of  taxation  on  the 
various  classes  or  individuals." 

Carl   C.   Plehn. 

Shah,  K.  T.     Sixty  years  of  Indian  finance.      (London:  King.  1922.      21s.) 

Taussig,  F.  W\      Selected  readings  in   international   trade  and  tariff  prob- 
lems.     (Boston:  Ginn.      1921.      Pp.  x,  566.) 

This  most  recent  volume  of  readings  for  the  use  of  students  of  eco- 
nomics, compiled  by  Professor  Taussig  for  the  study  of  international 
trade  and  tariff  problems,  invites  comparison  with  the  editor's  earlier 
collection  of  materials  published  thirty  years  ago.  The  present  volume 
is  wider  in  scope  than  the  State  Papers  Relating  to  the  Tariff.  In  part 
III,  about  100  pages,  are  compressed  the  essentials  of  the  documents  and 
speeches  found  in  the  earlier  volume  with  some  additional  material, 
chiefly  speeches,  relating  to  the  American  tariff  controversy.  It  is 
significant  that  nothing  in  the  utterances  of  public  men  on  this  subject 


32(5  Reviews  and  New  Books  [June 

since  the  first  administration  of  Governor  Cleveland  seems  to  have  been 
found  of  sufficient  importance  to  warrant  their  inclusion. 

Part  I,  dealing  mainly  with  the  theory  of  international  trade,  contains 
selections  from  Ricardo,  J.  S.  Mill,  Cairnes,  and  Taussig,  and  also  the 
excellent  study  of  the  balance  of  trade  of  the  United  States  since  1821 
by  Professors  Bullock,  Williams,  and  Tucker,  and  Professor  Taussig's 
Quarterly  Journal  article  on  the  probable  future  of  our  trade. 

While  the  reprinting  of  these  selected  readings  will  prove  a  great 
convenience  for  purposes  of  class  instruction,  it  is  the  group  of  readings 
in  part  III  that  will  be  of  most  service  to  American  students,  to  whom 
they  have  hitherto  for  the  most  part  been  inaccessible.  They  deal  with 
the  practical  tariff  problems  of  European  states.  Reference  is  made 
particularly  to  Professor  Alfred  Marshall's  Meinoranduin  on  the  Fiscal 
Policy  of  International  Trade  (1903)  and  M.  Meline's  report  of  the 
French  tariff  commission  of  1892;  but  above  all,  to  the  group  of  transla- 
tions from  the  writings  of  Wagner,  Bretano,  and  Richard  Schiiller  on  the 
grave  problems  with  which  the  German  people  were  confronted  about 
the  beginning  of  the  century,  when  they  thought  they  still  had  a  choice 
between  the  abandonment  of  the  policy  of  self-sufficiency  and  the  accept- 
ance of  the  perils  of  an  industrial  state.  With  this  phase  of  commercial 
and  industrial  statesmenship,  our  publicists  fortunately  have  never  had, 
seriously,  to  concern  themselves;  Hamilton's  brush  with  the  agrarians  of 
his  day  was  purely  academic.  A  perusal  of  these  selections  will  give 
American  students  a  keener  appreciation  of  the  gravity  of  European 
tariff  and  trade  problems  and  doubtless  lead  to  the  conclusion  that  our 
own  tariff  problems  have,  by  comparison,  been  rather  petty. 

George    O.    Virtue. 

Budget  1932-1924,  Commonwealth  of  Virginia.  (Richmond,  Va. :  Gov- 
ernor's Office.      1922.      Pp.  404.) 

Digest  of  constitutional  provisions  regarding  the  limitations  of  municipal 
indebtedness.      (Madison,  Wis.:   Legislative   Reference   Library.      1921.) 

Federal  income  tax;  summary  of  the  law  applicable  to  individuals  including 
income  tax  exemptions  of  Liberty  bonds.      (New  York:  Columbia  Trust 

■    Co.      1921.) 

Federal  income  taxes  for  1921.  (New  York:  Standard  Statistics  Co.,  Inc. 
1921.      Pp.  64.) 

Federal  taxes  for  1921,  the  Revenue  law  of  1921,  public  no.  98.  (New 
York:  Federal  Trade  Information  Service,  175  Fifth  Ave.  Pp.  v,  127. 
75c.) 

Handy-digest,  federal  income  tax.  1922  edition.  (Baltimore,  Md. :  A. 
Brown  &  Sons.      1921.      Pp.   63.) 

Internal  revenue  regulations  1/8  (^revised  Dec.  1921)  relating  to  the  excise 
taxes  on  xcorks  of  art  and  jewelry,  under  sections  902  and  905  of  the 
Revenue  act  of  1921.  (Washington:  Gov.  Prtg.  Office,  Supt.  Docs.  1922. 
6c.) 

Practical  questions  and  ans7cers  on  the  federal  tax  laws  (^individuals,  part- 
nerships and  corporations).  Revenue  act  of  1921.  (New  York:  Irving 
National  Bank.      1922.      Pp.   144.) 

Revenue  act  of  1921.  Complete  text,  reference  notes,  tables  and  index. 
(New  York:  National  Bank  of  Commerce.      1922.      Pp.  288.) 


1922]  Social  Problems  and  Re  forms  327 

Population  and  Migration 

NEW    BOOKS 

AuBERTiN,  F.     La  natalite.      (Paris:  G.  Cres.      1922.      9  fr.) 

HouRVTiCH,  I.  A.  Immigration  and  labor:  the  economic  aspects  of  Euro- 
pean immigration  to  the  United  States.  (New  York:  Huebsch.  1922. 
Pp.  xxxii,  574.) 

JoHNSEN,  J.  E.,  compiler.  Selected  articles  on  the  negro  problem.  (New 
York:  H.  W.  Wilson  Co.      1921.      Pp.  xxxv,  370.     $2.25.) 

MossELL,  S.  T.  The  standard  of  living  among  one  hundred  negro  migrant 
families  in  Philadelphia.  (Philadelphia:  Am.  Academy  of  Social  and 
Political  Science.      1921.      Pp.  50.) 

A  thesis  presented  to  the  faculty  of  the  Graduate  School  of  the  Univer- 
sity of  Pennsylvania  in  partial  fulfillment  of  the  requirements  for  the 
degree  of  Doctor  of  Philosophv.  Reprinted  from  The  Annals,  vol. 
XCVIII,  Nov.,  1921. 

Savorgnan,  F.  Dernografia  di  guerra  e  altri  saggi.  (Bologna:  Nicola 
Zanichelli.      1921.      Pp.  219.      12  1.) 

Population  and  its  distribution;  compiled  from  the  figures  of  1920  United 
States  census;  including  distribution  of  retail  and  icholesale  dealers. 
Third  edition.  (New  York:  J.  Walter  Thompson  Co.,  214  Madison 
Ave.      1921.     Pp.  X,  335.      $5.) 

Social  Problems  and  Reforms 

What  is  Social  Case  Work?  An  Ititroductory  Description.  By  Mary 
E.  Richmond.  (New  York:  Russell  Sage  Foundation.  1922. 
Pp.  268.  $1.00.) 
A  book  which  analyzes  social  case  work  and  reveals  more  of  the 
method  is  always  welcome.  In  spite  of  the  parts  that  are  confusing 
and  obscure  this  book  has  in  it  so  much  that  is  fine,  useful,  and  con- 
structive that  it  represents  a  real  contribution  to  social  work  litera- 
ture. The  earlier  chapters  present  six  different  types  of  problems 
and  are  valuable  both  for  teaching  purposes  and  for  the  wholesome 
philosophy  which  they  present.  The  main  theme,  however,  is  the  mean- 
ing of  social  case  work.  After  laboring  somewhat  heavily  on  the 
word  personality  the  author  concludes  that  "social  case  work  consists 
of  those  processes  which  develop  personality  through  adjustments  con- 
sciously effected,  individual  by  individual,  between  men  and  their  social 
environment."  The  development  of  personality  is  made  the  essential 
characteristic  of  case  work.  The  reader  is  greatly  astonished  to  dis- 
cover on  a  later  page  that  "social  case  work  includes  those  social  and 
useful  adjustments  which  are  made  with  and  for  individuals,  whether 
or  not  they  lead  directly  to  the  development  of  personality."  In  fol- 
lowing the  thought  of  the  book  the  reader  must  realize  that  much 
water  has  flowed  by  in  recent  years  but  this  discussion  makes  one  wish 


328  Reviews  and  New  Books  [June 

that  the  author  had  repeated  her  previous  definition  of  case  work  pre- 
sented in  1915  instead  of  this  new  definition  so  unceremoniously  de- 
prived of  its  supporting  pillars.  The  definition  apparently  sub- 
stitutes a  part  for  the  whole;  it  is  a  sort  of  sociological  synecdoche, 
for  no  doubt  the  development  of  personality  is  an  important  function 
of  social  case  work. 

The  field  of  social  case  work  is  carefully  circumscribed  by  the  author 
and  due  recognition  is  given  to  the  importance  of  other  forms  of  social 
work.  In  fact  so  much  caution  is  exercised,  so  often  is  the  term 
"mass  action"  used  and  the  pretensions  of  social  case  work  repressed, 
that  a  much  better  understanding  of  each  other  by  the  various  groups 
of  social  workers  will  inevitably  follow.  The  value  of  social  case  work, 
both  to  group  work  and  to  social  research,  might  have  been  further 
stressed. 

The  reader  realizes  that  a  new  day  has  dawned  when  he  glimpses 
such  statements  as,  "it  is  perilously  easy  for  case  workers  to  assume  a 
rather  selfish  autocratic  role."  "A  man  can  become  so  weakened  by 
unfavorable  conditions  that  it  is  impossible  for  him  to  want  progres- 
sively." "What  man  does  for  himself  counts  for  more  toward  his 
permanent  well-being  than  the  things  that  are  done  for  him."     "The 

most  successful  social  work  policies  are (also)   the  fullest 

possible  participation  of  the  client  in  all  plans." 

The  author  wisely  says  that  an  intelligent  person  with  tact  and  good 
will  might  perform  any  one  of  a  long  list  of  tasks  but  only  a  trained 
person  would  succeed  with  a  combination  of  these  services — a  state- 
ment which  gives  vitality  to  the  demand  for  trained  workers.  The 
challenge  to  the  student  of  heredity  to  make  an  equally  thorough  study 
of  the  mental  and  social  life  of  man  is  most  pertinent.  The  latter  part 
of  the  book  deals  with  several  concrete  forms  of  social  case  work,  such 
as  those  relating  to  the  home,  the  school,  the  workshop,  the  hospital  and 
the  court.  There  is  also  an  appreciation  of  the  possibilities  of  govern- 
ment as  a  case  work  agency. 

G.  B.  Mangold. 

NEW    BOOKS 

Boyle,  J.  E.      Rural  problems  in  the   United  States.      The   national  social 
science  series.      (Chicago:  McClurg.      1921.      Pp.  1  t2.     $1.) 

Professor  Boyle  cmpliasizcs  in  this  book  the  point  of  view  that  a 
community  can  know  itself  and  can  make  certain  very  definite  choices 
whicli  will  affect  its  well-being.  He  believes  that  what  the  farmer 
really  needs  is  definite  and  eonstruetive  thinking  and  inspiration  that 
leads  to  self-lielp  and  tliat  it  is  an  illusion  that  legislation  can  cure  all 
the  economic  and  soeial  ills  of  the  farnitr.  In  various  ehajiters  are  dis- 
cussed such  questions  as  the  food-sujjply.  rural  eonditions  and  rural 
needs,  the  rural  home,  the  rural  school,  the  country  church,  the  country 
store,  the   country   bank,   the   country   newspaper,   and   farm   and   home 


1922]  Social  Problems  and  Reforms  329 

bureaus.  The  soul  of  the  rural  community  is  considered  in  the  final 
chapter.  The  various  problems  are  treated  in  an  interesting  and  sug- 
gestive way  and  the  conclusions  advanced  are  based  on  sound  economic 
and  practical  knowledge.  George  M.  Janes. 

Clopper,  E.  N.  Rural  child  welfare.  (New  York:  Macmillan.  1922. 
Pp.  355.     $3.) 

Cotton,  H.  A.  The  defective,  delinquent,  and  insane;  the  relation  of 
focal  infections  to  their  causation,  treatment,  and  prevention.  (Prince- 
ton, N.  J.:  Princeton  Univ.   Press.      1921.      Pp.   xvi,  201.) 

Crane,  C.  D.  Tobacco  an  assassin  of  liberty;  the  whole  story.  (Dayton, 
O.:  Author,  box  724.      1921.      Pp.   127.      50c.) 

Darby,  J.  E.  Jestis  an  economic  mediator;  God's  remedy  for  industrial 
and  international  ills.      (New  York:   Revell.      1922.      Pp.   256.     $1.50.) 

Ellwood,  C.  a.  The  reconstruction  of  religion.  (New  York:  Macmillan. 
1922.) 

Emerson,  G.  The  new  frontier:  a  study  of  the  American  liberal  spirit, 
its  frontier  origin,  and  its  application  to  modern  problems.  (New  York: 
Holt.      1920.      Pp.  xii,  314.) 

Contains  chapters  on  "Public  opinion  and  the  industrial  problem," 
and  "The  need  for  fifty  million  capitalists." 

Fassett,  C.  M.  Assets  of  the  ideal  city.  (New  York:  Crowell.  1922. 
Pp.  XV,  177.     $1.50.) 

Contains  chapters  on  public  utilities,  transportation,  and  health. 

Finney,  R.  L.  Causes  and  cures  for  social  unrest,  (New  York:  Mac- 
millan.     1922.     $2.50.) 

Gillette,  J.  M.     Rural  sociology.      (New  York:  Macmillan.      1922.) 

Hayes,  A.  W.  Rural  community  organisation.  (Chicago:  Univ.  of  Chicago 
Press.      1921.      Pp.   128.     $1.50.) 

"This  study  is  an  attempt  to  arrive  at  the  proper  local  unit  which  lends 
itself  to  comprehensive  community  organization."  "In  a  discussion  of 
rural  organization  and  allied  fields  the  lack  of  a  central  guiding  policy 
becomes  evident."  These  two  sentences,  the  opening  words  of  the  pre- 
face and  the  first  chapter  respectively,  show  at  once  the  author's  purpose 
and  the  limitations  which  have  characterized  work  of  this  kind  in  the 
past. 

In  searching  for  a  red  thread  running  through,  or  perhaps  it  might 
better  be  said  running  around,  a  country  community.  Dr.  Hayes  con- 
siders the  trade  area,  the  small  school  district,  the  consolidated  school, 
and  ways  and  means  of  organization.  Very  noticeably  the  author  holds 
the  belief  that  community  problems  are  to  be  worked  out  around  the 
school  as  a  nucleus.  B.  H.  H. 

Healy,  W.  The  practical  value  of  scientific  study  of  juvenile  delinquents. 
Children's  Bureau  pub.  no.  96.  (Washington:  Gov.  Prtg.  Office,  Supt. 
Docs.      1922.      Pp.  31.) 

Horwood,  M.  P.  Public  health  surveys;  what  they  are,  how  to  make  them, 
how  to  use  them.      (New  York:  Wiley.      1921.'    Pp.  xxii,  403.      $4.50.) 

Jacob,  C.  L.,  compiler.     Bibliography  on  vocational  guidance ;  a  selected 


330  Reviews  and  A^ew  Books  [June 

list  of  vocational  guidance  references  for  teachers.  Federal  Board  for 
Vocational  Education,  bull.  no.  66.  (Washington:  Gov.  Prtg.  Office, 
Supt.  Docs.  1921.      Pp.  35.) 

KoLB,  J.  H.  Rural  primary  groups:  a  study  of  agricultural  neighborhoods. 
Research  bull.  51.  (Madison,  Wis.:  Univ.  of  Wisconsin,  Agri.  Experi- 
ment Sta.      1921.      Pp.  81.) 

Le  Bon,  G.  The  rvorld  in  revolt.  A  psychological  study  of  our  times. 
(New  York:  Macmillan.      1921.      Pp.  256.     $4.) 

For  exposition  and  interpretation  of  world  perplexities,  psychology  is 
overworked.  Dr.  Le  Bon  found  many  grateful  readers  for  his  methods  as 
applied  to  crorcds.  But  five  years  ago,  in  an  atmosphere  dangerously 
inflamed,  he  explained  to  us  the  psychology  of  the  Great  War,  obviously  a 
far  more  hazardous  task.  The  author  was  generous  in  this,  that  he  did 
not  acquit  western  peoples  from  some  share  of  guilt.  His  use  of  "mysti- 
cism" made  this  and  many  another  difficulty  easy.  Mysticism  carries  our 
race  ideals.  It  is  far  more  powerful  than  the  flickering  processes  of 
reasoning.      Kultur  was  such  an  ideal  to  the  Germans. 

In  the  present  volume,  which  is  a  "study  of  our  times"  this  mystical 
factor  is  so  incessantly  on  hand  as  to  excite  misgivings  in  the  friendliest 
reader. 

We  are  told  that  "the  majority  of  political,  military,  economic  or  so- 
cial questions  belong  to  the  province  of  psychology.  Statesmen,  generals 
and  manufacturers  even  invoke  its  services  daily."  We  learn  that  while 
psychology  was  very  uncertain  in  the  past,  the  science  now  "becomes 
capable  of  throwing  light  on  the  most  difficult  problems."  The  World 
War,  in  fact,  was  a  vast  laboratory  of  experimental  psychology.  While 
raising  no  objection  to  this  claim,  it  is  disconcerting  to  have  this  mysti- 
cal handy-man  so  constantly  on  the  job.  Five  times  on  a  single  page 
(p.  15)  we  read  of  "mystic  forces,"  "mystic  ideals,"  "mystic  influences," 
"mystic  illusions,"  and  the  like. 

Elsewhere  we  have  "the  mystic  ideal  of  hegemony,"  "mystic  propa- 
ganda," "mystic  forces,"  on  page  85.  "Mystic  logic"  does  service  at  the 
very  point  where  we  want  anything  in  the  world  except  "the  mystic." 
Our  hesitation  at  this  appeal  seems  further  justified  bv  the  fact  that 
the  author's  more  distinctive  "points,"  suggestions,  or  proposals,  as  well 
as  the  main  criticisms,  have  become  very  familiar  to  us  through  writers 
like  Brailsford,  Angell,  Lowes,  Dickinson,  Russell,  and  others,  who  in- 
struct us  quite  as  well  in  simpler  ways. 

The  volume  falls  into  seven  books:  The  Mental  Evolution  of  the 
People;  Conflicting  Principles  in  Modern  Warfare;  Influence  of  Psycho- 
logical P'actors  in  Battle;  The  Propagation  of  Beliefs  and  the  Orientation 
of  Opinions;  The  New  Revolutionary  Tempest;  Political  Illusions  of 
Today;  Political  Disorganization  of  Europe.  There  is  much  acute  criti- 
cism of  the  Great  State  idea,  but  singularly  little  constructive  suggestion 
about  measures  necessary  to  tlic  creation  and  maintenance  of  smaller 
communities.  He  notes  the  disastrous  inefficiency  of  the  government 
control  of  railways  in  the  United  States  during  the  war:  "They  were 
then  ruined  and  almost  bankrupt,"  as  if  railway  authorities  and  banking 
interests  before  the  war  were  witliout  tlieir  share  of  blame  in  this  unhappy 
result.  John  Graham  Brooks. 


1922]  Social  Problems  and  Reforms  331 

LiNDEMAN,  E.  C.  The  communitii ;  an  introduction  to  the  study  of  com- 
munity leadership   and  organization.      (New  York:   Y.    M.    C.   A.    Press. 

1921.  Pp.  ix,  222.) 

MacGarr,  L.  The  rural  community.  (New  York:  Macmillan.  1922. 
Pp.  236.) 

Mum,  R.  Liberalism  and  industry:  tozc-ards  a  better  social  order.  (Boston: 
Houghton.      1921.      Pp.  xii,  208.     $1.7-5.) 

"Liberalism  is  a  hahit  of  mind,  a  point  of  view,  a  way  of  looking  at 
things,"  says  Mr.  Muir.  Therefore  the  attitude  of  the  English  liberal 
must  be  restated  with  every  great  change  in  political  and  industrial  con- 
ditions. Mr.  Muir  does  not  attempt  to  formulate  a  definite  program  of 
action,  but  he  does  define  clearly  the  ends  and  ideals  of  liberals  in  the 
period  of  reconstruction.  It  is  a  point  of  view  which  reflects  the  en- 
lightened self  interest  of  the  middle-class  business  and  professional  man. 
We  are  not  surprised  to  learn  that  the  liberal  favors  a  wide  distribution 
of  capital  ownership,  anti-trust  legislation,  free  trade  and  general  effi- 
ciency in  administration.  In  America,  however,  the  advocacy  of  indus- 
trial councils  for  the  control  of  industry,  nationalization  of  natural  mo- 
nopolies, land  value  taxation,  and  income  taxes  graduated  up  to  75  per 
cent,  would  be  looked  upon  as  radical  rather  than  liberal. 

G.   B.   L.  Arxer. 

Odum,  H.  W.  Attainable  standards  in  municipal  programs.  Report  of 
first  regional  conference  of  Torcn  and  County  Administration.  (Chapel 
Hill,  N.  C:  Univ.  of  North  Carolina,  Extension  Div.  1921.  Pp.  130. 
60c.) 

Ogawa,  G.  Conscription  system  in  Japan.  Carnegie  Endowment  for  In- 
ternational Peace.      (New  York:  Oxford  Univ.  Press.      1921.      Pp.  245.) 

Pettigrew,  R.  F.  Triumphant  plutocracy.  (New  York:  Rand  Book 
Store.      1922.      $1.) 

Toops,  H.  A.  Trade  tests  in  education.  (New  York:  Teachers  College, 
Columbia  Univ.      1921.      Pp.   118.     $1.50.) 

Webb,  S.  and  Webb,  B.  English  prisons  under  local  government.  (New 
York:  Longmans,  Green.      1922.) 

WiLSOX,  J.      The  labor  movement  and  the  church.      (Boston:  Stratford  Co. 

1922.  Pp.  73.      $1.50.) 

WiNSLOW,  L.  L.  Elementary  industrial  arts.  (New  York:  Macmillan. 
1922.      Pp.  xiv,  335.      $1.20.) 

Woofter,  T.  J.,  Jr.  and  Fisher,  L,  editors.  Cooperation  in  southern  com- 
munities; suggested  activities  for  county  and  city  inter-racial  committees. 
(Atlanta,  Ga. :  Commission  on  Inter-racial  Cooperation.      1921.      Pp.  66.) 

ZiMAND,  S.  Modern  social  movements.  (New  York:  H.  W.  Wilson  Co. 
1921.      Pp.  260.      $1.80.) 

Contains  summaries  and  bibliographies  on  trade  unionism,  the  coopera- 
tive movement,  copartnership,  national  industrial  councils,  the  Plumb 
plan,  the  single  tax,  socialism,  guild  socialism,  syndicalism,  bolshevism, 
and  anarchism. 

American  Child  Hygiene  Association,  eleventh   annual   meeting,  St.   Louis, 


332  Reviews  and  New  Books  [June 

1920.  (Baltimore,   Md. :   Association,    1211    Cathedral    St.      1921.      Pp. 
440.) 

Eye  conservation  in  industry;  part  of  the  study  of  waste  in  industry  con- 
ducted under  the  auspices  of  the  Federated  American  Engineering 
Societies.  (New  York:  Eye  Sight  Conservation  Council  of  America, 
Times  Bldg.      1921.      Pp.  29.      25c.) 

English  prisons  today:  being  the  report  of  the  Prison  System  Enquiry 
Committee.      (New  York:   Longmans,  Green.      1922.     $8.50.) 

Maternity  and  child  care  in  selected  rural  areas  of  Mississippi.  Child 
welfare  series,  no.  5.      (Washington:  Gov.  Prtg.  Office,  Supt.  Docs.  1922.) 

Physical  and  vocational  rehabilitation  of  disabled  men  and  women  who  are 
seriously  injured  ivhile  under  the  protection  of  the  Workmen's  Compen- 
sation law  of  Oregon.  (Portland,  Oregon:  State  Industrial  Accident 
Commission.      1922.      Pp.  31.) 

Seventh  annual  report  of  the  City  Planning  Board.  (Boston:  City  Plan- 
ning Bd.      1921.      Pp.  29.) 

State-wide  social  service  in  Massachusetts.  (Boston:  Dept.  of  Public  Wel- 
fare.     1921.      Pp.  11.) 

Whittier  social  case  history  manual.  Research  bull.  no.  10.  (Whittier, 
Calif. :   California  Bureau  of  Juvenile  Research,  Whittier  State  School. 

1921.  Pp.  98.     25c.) 

Insurance  and  Pensions 

NEW    BOOKS 

Cahill,  J.  C.  and  Jones,  B.  Negligence  and  compensation  cases  annotated, 
with  pleadings  and  forms.  Vol.  XX.  (Chicago:  Callaghan.  1921.  Pp. 
xlii,  1050.) 

Cox,  R.  L.  National  health  in  the  life  insurance  mirror.  Address  de- 
livered at  tlie  fifteenth  annual  meeting  of  the  Association  of  Life  Insur- 
ance Presidents.      (New  York:  Author,  Metropolitan  Life  Insurance  Co. 

1922.  Pp.  12.) 

GiRARD,  J.  Elements  d'assurances :  incendie,  vie,  accidents.  (Paris:  Dulac 
Freres,  Lib.  des  Assurances,  8,  Rue  Lamartine.      1921.) 

HoBBs,  C  .W.  The  powers  of  casualty  insurance  companies.  Address  de- 
livered before  the  one  hundred  and  sixty-first  meeting  of  the  Insurance 
Society  of  New  York.  (Boston:  Commissioner  of  Insurance.  1922. 
Pp.  11.) 

Manes,  A.  Versichcrungs-Staatsbetricb  im  Ausland.  Ein  Beitrag  zur 
Frage  der  Sozialisierung.  Third  edition.  (Berlin:  Sigismund.  1919. 
Pp."  128.     4.80  M.) 

This,  the  third  edition  of  Professor  Manes'  book  on  the  nationalization 
of  insurance,  was  written  as  an  answer  to  the  claim  tliat  insurance  in  all 
its  branches  was  "ripe"  for  taking  over  by  tlie  state  and  for  creating  a 
national  monopoly  of  the  institution.  The  study  covers  the  experience 
of  all  countries  of  the  world  and  reviews  tlie  results  secured  in  conducting 
state  insurance  in  life,  accident,  transportation,  fire,  hail,  cattle,  industrial. 


1922]  Insurance  and  Pensions  333 

re-insurance,  etc.  In  practically  all  of  these  fields  the  author  finds  that 
but  indifferent  success,  if  not  complete  failure,  has  attended  the  experi- 
ments.     He  sums  up  his  conclusions  in  the  following  three  statements: 

(1)  The  experience  of  all  state  ventures  in  the  field  of  insurance  (ex- 
cluding compulsory)  is  that  attempts  in  competition  with  private  com- 
panies have  at  best  produced  only  moderately  successful  results  and  only 
in  very  exceptional  cases  have  they  surpassed  the  private  institutions. 
(2)  State  monopoly  institutions,  in  which  only  voluntary  insurance  is  pro- 
vided, show  even  less  success  than  the  preceding,  most  probably  on  ac- 
count of  the  lack  of  competition.  (3)  State  monopolies  in  which  insur- 
ance is  compulsory  have  produced  favorable  results  as  regards  property 
fire  insurance,  but  in  other  fields  the  results  have  been  varying  though 
for  the  most  part  unfavorable. 

The  reasons  that  led  foreign  countries  to  adopt  state  insurance  sys- 
tems were  not  financial ;  they  did  not  expect  to  derive  revenue  from  this 
source.  In  some  instances  it  was  to  prevent  foreign  companies  from 
taking  out  of  the  country  large  sums  of  money,  in  others  to  aid  in  intro- 
ducing certain  social  insurance  branches,  in  others  to  advance  agriculture, 
in  others  to  provide  forms  of  insurance  that  private  companies  did  not 
offer,  etc.  The  author  closes  his  study  with  the  suggestion  that  the  solu- 
tion of  the  problem  lies  rather  in  making  insurance  ripe  for  heavier  tax- 
ation than  for  nationalization.  H.  J.  H. 

Richards,  E.  G.  The  experience  grading  and  rating  schedule.  A  system 
of  fire  insurance  rate-making  based  iipon  average  fire  costs.  Revised 
edition.      (New  York:  Van  Nostrand.      1921.      Pp.  157.) 

The  revised  edition  of  The  Experience  Grading  and  Rating  Schedule 
does  not  differ  fundamentally  from  the  first  edition  published  in  1915. 
Some  changes  in  detail  have  been  made;  there  is  proposed  a  new  plan 
for  measuring  the  "moral  hazard"  in  terms  of  individual  credit  standing 
and  fire  record ;  and  the  exposition  has  been  rearranged  and  decidedly 
improved. 

Rating  methods  in  the  fire  insurance  business  have  changed  but  slightly 
since  1915  and  the  author  continues  his  arraignment  of  existing  fire 
insurance  rates  which  are  the  result  of  personal  judgment,  bargaining 
power  and  business  expediency.  His  principal  thesis,  that  rates  should 
be  made  by  classes  on  the  basis  of  ascertained  loss  experience,  is  of  real 
interest  to  economists.  He  proposes  to  allocate  the  social  cost  of  fire 
losses  in  such  a  way  that  the  fire  insurance  expense  connected  with  each 
class  of  property  shall  accurately  reflect  the  fire  hazard  of  the  class. 
The  "schedule"  is  a  statistical  plan  for  allocating  the  cost  of  fires.  Prop- 
erty is  to  be  classified  by  industries,  construction,  geographical  location, 
adequacy  of  protection,  surroundings,  etc.,  and  on  each  class  the  fire  loss 
and  insurance  written  are  to  be  compiled.  The  fire  loss  per  one  hundred 
dollars  of  insurance  carried  on  each  class  of  property  is  to  furnish  the 
basis  for  insurance  premium  rates. 

This  volume  is  a  valuable  contribution  to  the  literature  of  rate  making. 
Experience,  statistically  ascertained,  should  unquestionably  enter  largely 
into  the  calculation  of  fire  insurance  rates.  In  practical  application  it 
would  probably  be  necessary  to  modify  considerably  the  details  of  Mr. 
Richards'  scheme,  but  the  significance  of  his  proposal  is  found  not  so 
much  in  these  details  as  in  the  thesis  that  experience  should  be  the  de- 
termining factor  in  calculating  rates.      More  general   insistence  on   this 


334  Rcvicrvs  and  Nciv  Books  [June 

principle  may  be  expected  as  time  g-oes  on,  particularly  if  gov'ernmental 
supervision  of  rates  is  extended,  as  it  seems  likely  to  be. 

Accumulation  of  a  sufficient  body  of  experience  for  rate-making  pur- 
poses would  require  at  least  a  decade.  It  therefore  behooves  students 
of  the  business  carefully  to  examine  proposed  statistical  plans  and  to 
formulate  a  method  of  ascertaining  experience  which  gives  promise  both 
of  furnishing  adequate  data  and  of  freedom  from  defects  in  practical 
operation.  The  length  of  time  required  for  accumulation  of  fire  insur- 
ance experience  makes  changes  in  a  plan  peculiarly  difficult  and  inadvis- 
able. Hence  the  necessity  of  careful  formulation  in  the  first  instance. 
Even  with  such  careful  formulation  application  will  in  practice  indicate 
the  necessity  of  changes.  A  plan  is  to  be  desired  which,  at  the  start, 
offers  the  greatest  flexibility  in  application  without  making  impossible  the 
combination  of  experience  accumulated  before  and  after  its  revision.  The 
Richards  "schedule"  outlines  the  basic  features  of  such  a  plan. 

Ralph  H.  Blanchard. 

Columbia  University. 

Valgren,  V.  N.  Crop  insurance :  rishs,  losses,  and  principles  of  pro- 
tection. Dept.  Agri.  bull.  no.  lO^S.  (Washington:  Gov.  Prtg.  Office, 
Supt.  Docs.      1922.      Pp.  27.      5c.) 

Digest  of  zcork men's  compensation  laxcs  in  the  United  States  and  terri- 
tories, xvith  annotations.  Seventh  edition,  revised  to  Dec.  1,  1921.  Com- 
piled by  F.  R.  Jones.  (New  York:  Workmen's  Compensation  Publicity 
Bureau.      1921.      Pp.   389.) 

Fire  insurance  in  Nexo  England  for  ten  years,  December  31,  1911,  to  Decem- 
ber 31,  1920,  inclusive.  Twenty-second  edition.  (Boston:  The  Stand- 
ard Pub.  Co.      1921.      Pp.  301.y 

Lengthening  life  through  insurance  health  zcork.  A  study  of  the  trends 
of  mortality  among  policy-holders  in  the  Metropolitan  Life  Insurance 
Company,  Industrial  Department,  and  the  United  States  registration 
area,  1911  to  1920.  (New  York:  Metropolitan  Life  Ins.  Co.  1922. 
Pp.  11.) 

Sixteenth  annual  report  of  the  President  and  of  the  Treasurer  of  the  Car- 
negie Foundation  for  the  Advancement  of  Teaching.  (New  York:  The 
Foundation,  522  Fifth  Ave.      Pp.  205.) 

Part  VI  deals  with  pension  systems  and  pension  legislation  including 
a  brief  discussion  of  industrial  pensions. 

Pauperism,  Charities,  and  Relief  Measures 

Poverty  and  Dcpcndcncij:   Their  Relief   and  Prevention.     By   John 
Lewis    Gillin,      (New    York:    The    Century    Company.      1921. 
Pp.  707.     $4.00.) 
Professor  (iillin  has  added  a  very  valuable  book  to   the  literature 
on  problems  of  poverty.      It  is  a  careful  digest  of  the  material  in  this 
field  and  is  thoroughly  permeated   with   a   sane  and   progressive  phi- 
losophy.     Povcrtij  and  Depeudnic/j  is  much  more  comprehensive  than 
the  title  implies.      It  is  divided  into  five  parts  dealing  respective!}^  with 
the  Problems  of  Poverty,  Causes  of  Poverty,  Methods  of  Relief,  Special 


1922]  Pauperism,  Charities,  and  Relief  Measures  335 

Classes  of  Dependents,  and  a  Program  of  Preventive  Work.  A  very 
valuable  feature  of  the  book  consists  of  the  well-stated  definitions  given 
to  the  various  terms  emplo3^ed  by  the  author.  These  furnish  an  ex- 
cellent starting  point  for  the  discussion  of  each  problem.  After  the 
approach  to  the  question  is  definitely  stated  the  causes  of  poverty  and 
dependency  are  classified  and  tlie  analysis  sliould  prove  most  helpful 
and  illuminating  to  the  student. 

The  book  contains  a  well-organized  account  of  the  development  of 
the  various  phases  of  relief  work,  including  a  frank  discussion  of  their 
failures  and  successes.  It  also  employs  the  characteristic  method  of 
presenting  arguments  for  and  against  a  particular  program  of  action. 
Uusually  the  reader  is  not  allowed  to  remain  adrift,  but  Dr.  Gillin 
comes  to  the  rescue  by  presenting  his  own  viewpoint.  The  careful 
student  of  the  book  will  be  impressed  with  the  painstaking  efforts  made 
to  present  historical  backgrounds  and  to  link  up  the  past  with  the 
present.  Possibly  some  of  this  material  was  not  needed  to  give  the 
book  the  necessary  degree  of  completeness.  The  writer  discusses  the 
place  and  function  of  the  almshouse  in  our  American  relief  system. 
Frequently  he  refers  to  the  institution  as  the  "poorhouse."  Lack  of 
facts  unfortunately  make  it  difficult  to  complete  the  discussion  of  out- 
door relief,  and  later  statistics  than  those  given  would  strengthen  the 
chapter  on  the  subject.  Nevertheless,  the  sympathetic  handling  of 
the  problem  will  aid  greatly  in  developing  a  sound  public  opinion.  The 
state  control  of  charitable  agencies  constitutes  another  controversial 
issue.  The  book  outlines  the  functions  of  state  boards  of  charities  and 
state  boards  of  control,  together  with  the  weaknesses  of  each  of  these 
organizations.  The  discussion  at  this  point  might  have  been  strength- 
ened through  additional  attention  to  the  system  of  centralized  control, 
such  as  that  which  has  appeared  in  Illinois,  and  more  recently  in  Massa- 
chusetts. 

In  part  four,  dealing  with  special  classes  of  dependents,  the  princi- 
pal chapters  relate  to  the  aged  dependent,  the  insane,  the  epileptic,  the 
feeble-minded,  dependent  children,  drug  addicts,  mothers'  pensions,  the 
unemployed,  and  the  soldiers,  sailors  and  marines.  Each  of  these 
chapters  confines  itself  largely  to  methods  of  treatment,  although  the 
extent  of  the  problem  is  discussed  in  reference  to  several  of  these  groups 
of  cases  and  the  causes  of  unemployment  are  briefly  outlined.  This 
part  of  the  book,  however,  specializes  on  methods  of  care  and  treat- 
ment. There  is  a  comprehensive  discussion  of  old-age  pensions,  follow- 
ed by  the  conclusion  that  the  non-contributory  system  is  desirable,  and 
alternative  suggestions  are  presented  for  the  care  of  persons  not  eligi- 
ble to  such  attention.  A  new  chapter  in  books  of  this  character  is  the 
one  presenting  the  problem  of  the  child  born  out  of  wedlock.  The 
chapter  is  timely  and  also  presents  a  considerable  program  of  action. 


336  Reviews  and  Nexv  Books  [June 

In  spite  of  their  past  failures,  mothers'  pensions  have  come  to  stay 
and  the  problem  before  us  is  more  efficient  administration.  The  pro- 
gram for  preventing  unemployment  follows  standard  lines  of  thought, 
but  the  author  also  adds  the  features  of  a  proposed  unemployment- 
prevention  law  recently  introduced  into  the  Wisconsin  legislature.  The 
book  does  not  deal  with  the  problem  of  disaster  relief  which  it  seems 
should  have  been  entitled  to  a  chapter.  Nor  do  we  find  a  discussion  of 
endowments  or  community  trust  funds.  Furthermore,  the  discussion 
of  sterilization  omits  reference  to  the  interesting  developments  in  Cali- 
fornia in  recent  years. 

The  strength  of  the  book  culminates  in  an  able  discussion  of  a  pre- 
ventive program.  No  modern  text  on  this  subject  would  be  complete 
if  it  did  not  place  emphasis  on  this  point.  The  program  as  outlined 
aims  not  only  to  prevent  poverty  but  other  social  ills  as  well.  There 
are  chapters  on  a  number  of  very  important  subjects.  Our  health 
program  must  be  socialized  and  a  system  of  compulsory  health  insur- 
ance should  eventually  be  adopted.  Increasing  emphasis  must  also 
be  placed  on  a  program  of  health  education.  The  compact  chapter 
on  Socialized  Neighborliness  presents  the  function  and  opportunity 
of  the  social  settlement,  and  Socialized  Religion  has  long  since  deserved 
a  chapter  in  books  which  outline  a  plan  of  social  improvement.  So- 
cialized Property  brings  to  the  student  an  understanding  of  the  limi- 
tations that  may  wisely  be  placed  on  the  institution  of  private  property. 
In  addition  the  function  of  education,  recreation,  and  efficient  govern- 
ment in  improving  our  social  life  is  outlined.  The  author  recognizes 
that  the  increase  of  population  is  a  serious  factor  and  needs  to  be 
controlled  but  he  deals  rather  cautiously  with  a  projected  program. 
Many  will  regret  the  omission  of  a  chapter  dealing  with  other  phases 
of  the  economic  program  necessary  for  the  prevention  of  dependency. 
They  are  not  covered  adequately  in  the  chapter  on  Socialized  Property. 

The  book  is  adapted  for  use  in  college  and  university  classes.  The 
array  of  topics  included  and  the  volume  of  subject-matter  make  it  a 
valuable  guide  for  the  student.  It  is  one  of  a  few  books  that  can 
be  used  for  tiiis  purpose  and  because  of  its  organization  and  scope  it 
should  command  a  leading  place.  Its  omissions  are  relatively  minor 
and  can  be  supplemented  by  the  competent  teacher. 

George  B.  Mangold. 
Missouri  School  of  Social  Economy.  d 

NEW    BOOKS 

Devine,  E.   T.   and  Brandt,   L.     American  social   work  in   the   twentieth 
century.      (New  York:  The  Frontier  Press.      1921.      Pp.  62.) 

"Expanded  from  an  article  contributed  by  tlie  authors  to  the  Encyclo- 
-pacdia  Br'itannica." 


1922]  Socialism  and  Co-operative  Enterprises  337 

Kelso,  R.  W.  The  history  of  public  poor  relief  in  Massachusetts,  1620- 
1920.      (Boston:  Houghton  Mifflin.      1922.      Pp.  200.     $2.50.) 

Kerby,  W.  J.  The  social  mission  of  charity;  a  study  of  points  of  view  in 
Catholic  charities.      (New  York:  Macmillan.      1921.      Pp.  xv,  196.) 

Slingerland,  W.  H,  Child  welfare  work  in  Colorado;  a  study  of  public 
and  private  agencies  and  institutions,  and  conditions  of  service,  in  the 
care  of  dependent,  delinquent  and  defective  children.  Extension  series 
no.  43.      (Boulder,  Colo.:  Univ.  of  Colorado.      1922.      Pp.  viii,  174.) 

Springer,  E.  M.  Children  deprived  of  parental  care:  a  study  of  children 
taken  under  care  by  Delaware  agencies  and  institutions.  Children's 
Bureau  pub.  no.  81.  (Washington:  Gov.  Prtg.  Office,  Supt.  Docs.  1921. 
Pp.  96.) 

Watson,  F.  D.  The  charity  organization  inovement  in  the  United  States. 
(New  York:  Macmillan.      1922.     $3.50.) 

Socialism  and  Co-operative  Enterprises 

The  Consumers^  Cooperative  Movement.  By  Sydney  and  Beatrice 
Webb.  (London:  Longmans,  Green  &  Company.  1921.  Pp. 
XV,  504-.     $6.50.) 

This  most  recent  volume  from  the  Webbs  is  by  far  the  most  com- 
plete and  satisfactory  statement  yet  made  of  what  we  understand  by 
consumers'  cooperation.  It  is  the  work  of  ardent,  life-long  friends  of 
the  movement,  but  there  are  warnings  and  admonitions  in  plenty,  even 
criticism  all  the  more  severe  because  of  the  authors'  outright  champion- 
ship of  the  cause. 

In  six  long  chapters — nearly  500  pages  in  all — we  are  given,  first, 
enough  historic  detail  to  interpret  later  developments :  the  rise  of 
federal  institutions — wholesalers,  banking,  and  insurance;  the  strife 
over  the  employees  and  their  relation  to  consumers'  administration; 
the  hopeful  yet  disturbing  issues  arising  from  the  war ;  remedial  de- 
fects and  shortcomings ;  and  finally  much  acute  speculation  as  to  the 
future.  Thirty  years  of  intensive  work  on  trade  unions,  cooperation, 
labor-copartnership  and  local  government  precede  this  final  survey. 
No  one  should  welcome  it  more  than  those  who  oppose  socialism.  Never 
has  the  socialist  objective  been  outlined  with  more  lucidity  or  with  less 
compromising  qualification.  The  authors  maintain  that  consumers' 
cooperation  is  to  supersede  the  capitalist  system.  This  system  is 
toppling  as  feudalism  toppled  and  fell.  Cooperation  is  to  take  produc- 
tion and  distribution  out  of  the  hands  of  individual  profit-makers.  The 
private  rent-receiver  is  to  fare  no  better.  We  see  thus  why  the  authors 
so  cleanly  cut  out  labor  copartnership,  cooperative  credit  banks, 
together  with  producers'  associations  like  those  of  Denmark  and  Sir 
Horace  Plunkett.  They  do  not  undervalue  these,  but  will  not  have 
them  an  integral  part  of  the  consumers'  movement.      This  latter  pro- 


338  Reviews  and  New  Books  [June 

duces  and  distributes  solely  for  use.  We  are  told  roundly  and  re- 
peatedly that  this  motive  must  be  under  democratic  direction  without 
"the  stimulus  of  pecuniary  gain."  The  chapters  are  packed  with 
what  are  believed  to  be  solid  proofs  that  this  more  disinterested  motive 
has  not  only  worked  but  is  working  with  rapidly  increasing  efficiency. 
In  the  entire  exposition  of  this  evidence  there  is  an  almost  pitiless 
record  of  blunders,  apathies  and  shortcomings — all  the  friction  from 
overlapping  and  that  between  employees  and  those  who  manage  stores 
and  factories.  The  trade  unions  fighting  for  higher  pay,  better  con- 
ditions, and  a  shorter  day  do  not  see  eye  to  eye  with  employees  in- 
terested first  in  cheapened  products  and  the  "divvy."  That  one  section 
of  labor  is  here  pitted  against  those  representing  other  sections  of 
labor  has  become  as  painfully  clear  as  in  the  outside  capitalist  world. 
Equally  clear  is  the  tendency  everywhere  to  sag  toward  the  old  familiar 
method  of  the  competitive  system.  In  spite  of  efforts,  a  great  deal 
of  credit  has  still  to  be  granted  or  trade  goes  elsewhere.  Frequent 
strikes  have  occurred  and  more  are  threatened.  The  "melancholy  fact" 
is  noted  that,  as  cooperation  has  grown,  apathy  toward  every  earlier 
ideal  hangs  like  an  incubus  on  the  movement. 

Too  often  "management  committees" — together  with  the  less  ener- 
getic officials — "actually  prefer  an  apathetic  membership."  "Agita- 
tors" here  are  as  offensive  as  elsewhere. 

These  conceded  laxities  would  be  very  deceptive  if  it  were  not  added 
that  the  authors  hold  stoutly  to  the  faith  that,  at  every  point,  the 
evils  are  fewer  and  more  easily  removed  than  corresponding  ones  in 
capitalism.  The  relentless  competition  of  the  private  profit-maker, 
we  are  told,  drives  the  cooperator  to  most  of  these  backslidings. 

There  is  nothing  better  in  the  volume  than  the  insistence  that  as 
cooperators  are  in  neck-to-neck  rivalry  with  capitalism,  their  only 
hope  or  justification  is  a  distinctly  superior  service  to  the  consuming 
public.  Against  capitalism  "it  has  perpetually  to  compete  for  raw 
materials,  for  service  of  brain-workers  and  skilled  operators,  for  cus- 
tomers and  trade.  Except  in  so  far  as  it  can  effect  a  genuine  improve- 
ment or  economy  of  management"  it  should  go  to  the  wall.  It  is  a 
fair  challenge. 

The  real  value  rendered  by  the  authors  is  in  their  abundant  and 
detailed  evidence  of  enormous  growth  both  in  mass  and  variety  of 
services.  No  review  of  this  length  can  give  the  least  adequate  account 
of  the  thoroughness  and  excellence  which  the  Webbs  have  brought  to 
this  task. 

The  writer  asked  Lord  Bryce  before  his  recent  departure  from  this 
counti-y  for  an  opinion  on  their  works.  He  spoke  with  unqualified 
praise,  ending  "they  arc  very  able,  very  able." 

John  Graham  Brooks. 


1922]  Socialism  and  Co-operative  Enterprises  339 

NEW    BOOKS 

Benedict,  B.  The  larger  socialism.  (]Sew  York:  Macmillan.  1921, 
Pp.  243.     $2.50.) 

With  the  catastrophe  of  the  war  and  the  collapse  of  the  old  social 
order  in  Russia,  the  socialist  movement  in  Europe  was  brought  down 
out  of  the  clouds  of  Marxian  dialectics  to  face  the  realities  of  a  period 
of  social  revolution.  In  this  country,  however,  the  Socialist  party  still 
clings  to  its  old  theories  and  tactics  in  the  face  of  a  steadily  decreasing 
vote  and  membership.  Mr.  Benedict,  himself  still  a  party  member, 
appeals  in  this  book  for  a  broader  conception  of  the  socialist  ideal  and 
a  revision  of  tactics  which  would  amount  to  a  revolution  within  the  party. 

The  Socialist  party  in  more  than  twenty  years  of  active  propaganda 
has  never  been  able  to  poll  seven  per  cent  of  the  vote  in  a  presidential 
election,  and  its  local  successes  have  been  confined  to  a  few  cities  where 
the  foreign  born  population  is  large.  This  weakness  is  at  least  partly 
due  to  the  failure  of  its  leaders  to  understand  the  American  voter.  So- 
cialist writers  and  speakers  have  insisted  on  viewing  social  phenomena 
in  the  light  of  Marxian  theory  and  basing  their  appeal  on  self  interest 
and  class  interest,  when  an  ethical  appeal  to  right  and  justice  would 
have  been  more  effective.  Within  the  party  a  strange  distrust  of  each 
other  has  led  the  members  to  establish  and  maintain  an  unwieldy  form  of 
organization  in  which  endless  debates  and  referenda  absorb  their  energies 
and  enthusiasm.  The  results  of  doctrinaire  thinking  and  clumsy  party 
machinery  were  shown  in  the  crisis  of  the  war.  Since  no  action  could 
be  taken  without  a  referendum  vote,  the  convention  which  was  expected 
to  protest  against  the  declaration  of  war  could  not  meet  until  after  war 
was  a  fact.  Then  a  tactless  and  exaggerated  platform  was  adopted 
which  had  no  effect  except  to  bring  the  party  into  conflict  with  the 
authorities. 

With  all  its  criticism  of  party  methods,  the  book  is  essentially  con- 
structive. The  author  appeals  for  a  broader  conception  of  socialism 
which  will  include  all  the  highest  ideals  of  a  regenerated  world.  His 
goal  is  social  justice,  social  efficiency,  peace,  and  progress.  He  believes 
that  the  Socialist  party  can  be  reorganized  and  its  tactics  so  changed 
that  it  can  unite  the  widespread  radical  sentiment  in  America  and  be- 
come the  political  instrument  through  which  the  ideal  of  a  better  world 
may  be  realized. 

G.  B.  L.  Arner. 

Bekker,  G.  TLe  mouvement  cooper atif  en  Russie  et  la  renaissance  de  la 
Russie.  Travaux  de  I'lnstitut  de  Sociologie,  Instituts  Solvay.  (Brussels: 
Maurice  Lamertin,  Rue  Coudenberg,  58-62.      1921.      Pp.  v,  175.      12  fr.) 

Cascaden,  G.  Shall  unionism  die?  Report  on  "Red"  Union  International 
Congress  held  in  Moscotc,  Russia.  (Detroit,  Mich.:  John  Kiviniemi, 
5330  Rohns  Ave.      1922.      Pp.  96.      20c.) 

Dorzbacher,  Die  deutsche  Sozialdemokratie  und  die  nationale  Machtpo- 
litik  bis  1914..      (Gotha:  Perthes.      1920.) 

Gaumont,  J.  Histoire  abregee  de  la  cooperation  en  France  et  a  letranger. 
(Paris:  F.  Rider  et  Cie,  7,  Place  Saint-Sulpice.      1922.      Pp.  196.) 


340  Reviews  and  New  Books  [June 

Kameneff,  L.     Dictatorship  of  the  proletariat.      (Detroit,  Mich.:  Marxian 
Educational  Society.      1921.      Pp.16.      10c.) 

Landau-Aldanov,  M.  a.     Lenin.     Authorized  translation  from  the  French. 
(New  York:  Button.      1922.      Pp.  ix,  241.     $3.) 

Contains  biographical  material  and  description,  with  chapters  on  the 
tlieorics  of  the  social  revolution,  fundamental  ideas  of  bolshevism,  plat- 
form of  the  French  Socialist  party,  and  the  socialism  of  the  near  future. 

Laski,  H.  J.     Karl  Marx:  an  essay.      (London:  Fabian  Society.      1922.1s.) 

Lenin,  N.      Great  initiative.      (Detroit,  Mich.:  Marxian  Educational  Soc. 
1921.      Pp.   32.      15c.) 

Left  wing  cormrtunism.      (Detroit,  Mich.:  Marxian  Educational 


Soc.      1921.      Pp.  118.      50c.) 

LippMANN,  W.  Public  opinion.  (New  York:  Harcourt,  Brace  &  Co.  1922. 
Pp.  ix,  427.) 

Chapter  19  is  entitled  "The  old  image  in  a  new  form:  guild  socialism." 

Louis,  P.  La  crise  du  socialisme  mondial  de  la  lie  a  la  Ille  Internationale. 
(Paris:  Lib.  Felix  Alcan.      1922.      8  fr.) 

LozovsKY,  A.  Trade  unions  in  soviet  Russia.  (Detroit,  Mich.:  Marxian 
Educational  Soc.      1920.      Pp.  92.      50c.) 

MicHELS,  R.  La  teoria  di  Marx  della  miseria  crescente.  (Turin:  Fratelli 
Bocca.      20  1.) 

Rowan,  J.  The  I.  JV.  JV.  side  of  the  himher  industrt/  and  its  autocratic 
control  over  labor.  (Seattle,  Wash.:  Raymer's  Old  Book  Store,  1330 
First  St.      1921.      Pp.  64.      25c.) 

STRoi:BEL,  H.  Socialisatio7i  in  theorji  and  practice.  Trans,  by  H.  J. 
Stenning.      (London:  King.      1922.) 

SzAGORSKY,  S.  La  Republique  des  Soviets,  bilan  economique.  (Paris: 
Payot.      1922.) 

Travers-Borgstroem,  a.  Mutualism,  a  sipithesis.  (London:  Macmillan. 
1921.      Pp.  xxvi,  97.) 

A  preliminary  sketch  of  the  author's  plan  for  social  readjustment  is 
given  here.  By  mutualism  is  meant  a  partnership  between  the  individual 
and  the  state  for  the  control  of  land  and  capital.  Land  would  be  owned 
by  the  state  and  assigned  in  permanent  leaseholds  to  bona-fide  cultivators 
for  a  percentage  of  the  product.  Ca]Mtal  would  also  be  held  by  the  state 
subject  to  "mutualistic"  control.  The  author's  presentation  is  not  al- 
ways clear  and  he  admits  that  he  has  not  been  able  to  work  out  all  of  the 
necessary  details  of  the  plan.  In  the  introduction  the  Travers-Borg- 
stroem Foundation  at  the  University  of  Berne  announces  for  1924  liberal 
prizes  for  the  best  essavs  on  the  nationalization  of  credit.       G.  B.  L.  A. 

The  theses  and  resolutions  of  the  third  world  congress  of  the  Communist 
International.  (New  York:  Lyceum-Literature  Dept.,  Workers  Party 
of  America,  799  Broadway.      1922.      Pp.200.) 


1922]  Statistics   and  Its   MetJiods  3il 

Statistics  and  Its  Methods 

Income  in  the  United  States,  its  Amount  and  Distribution,  1909-1919. 
Vol.  I,  Summary.  By  the  staff  of  the  National  Bureau  of  Eco- 
nomic Research,  Inc. :  Wesley  C.  Mitchell,  Willford  I.  Kixg, 
Frederick  R.  Macaulay,  and  Oswald  W.  Kxauth.  (New 
York:  Harcourt,  Brace  and  Company.  1921.  Pp.  xvi,  152. 
$1.25.) 

The  first  volume  of  the  Bureau's  report  on  income  is  a  summary  in- 
tended for  general  use.  In  conformity  with  this  purpose  it  does  not 
discuss  details  of  method,  at  least  not  to  the  extent  of  justifying  them 
to  the  statistician  and  of  offering  him  the  opportunity  to  check  up  re- 
sults or  to  use  the  same  data  in  a  dift'erent  way.  The  detailed  statisti- 
cal basis  and  method  of  the  estimates  are  to  appear  in  a  second  volume. 
Doubtless  the  extent  of  use  of  the  work  will  be  much  increased  by  this 
means.  At  the  same  time  the  reviewer  is  cut  off  from  opportunity  to 
find  fault.  Not  that  there  is  occasion  to  complain  of  this  plan  of 
publication,  which  is  well  considered.  Indeed,  it  may  properly  be  ex- 
pected with  the  appearance  of  the  second  volume  to  give  the  statis- 
tician more  in  the  way  of  technical  details  that  will  enable  him  to  pass 
judgment  upon  the  estimates  than  he  would  otherwise  obtain. 

The  plan  of  the  authors  is  comprehensive  and  they  have  covered  the 
ground  adequately.  The  book  is  therefore  a  highly  important  contri- 
bution to  economic  statistics  or  quantitative  economics  (as  the  reader 
may  prefer),  and  will  doubtless  supersede  any  previous  works  on  this 
subject  for  the  United  States.  The  following  review  of  the  chapters 
shows  what  is  attempted: 

The  introductory  chapter  states  the  questions  to  be  answered,  sug- 
gests available  materials  and  methods  and  indicates  the  two  ways  pur- 
sued in  estimating  the  national  income  (one  by  sources  of  production 
and  the  other  by  incomes  received).  The  size  of  the  national  income 
is  dealt  with  in  the  second  chapter,  the  results  obtained  by  the  two 
methods  being  stated,  the  composition  of  the  two  totals  indicated, 
their  combination  effected,  the  amounts  reduced  to  terms  of  pre-war 
values,  and  comparisons  made  with  other  countries.  The  third  chapter 
deals  with  the  distribution  of  national  income,  including  its  distribu- 
tion between  employees  and  others,  amounts  and  numbers  above  and 
below  the  $2,000  line,  and  finally  its  distribution  among  individuals. 
The  final  chapter  briefly  summarizes  the  conclusions.  There  are  also 
29  tables  and  31  charts,  all  within  the  compass  of  the  149  small  pages 
of  the  body  of  the  report. 

Perhaps  one  should  say  this  shows  what  has  been  done  rather  than 
attempted.  But  the  proof  of  this  pudding  is  not  in  tlie  eating  of  this 
volume.      Meanwhile  the  authors  show  themselves  sophisticated  in  mat- 


342  Reviews  and  New  Books  [June 

ters  of  statistical  metliod  and  technique.  The  presumption  is  that, 
Avhcn  we  arc  told  more  than  that  this  is  Mr.  King's  result  and  that  Mr. 
Knauth's,  we  shall  find  the  basis  of  the  estimates  acceptable. 

There  are  some  limitations  upon  the  significance  of  the  results 
which  are  worth  stating,  even  though  it  is  not  intended  to  suggest  that 
the  study  has  not  gone  far  enough  for  the  present.  Such  a  limitation 
(or  several  of  them)  is  involved  in  accepting  money  (for  the  purposes 
of  this  study)  as  a  final  measure  of  income.  The  income  of  farmers 
is  for  this  reason  comparable  with  that  of  the  rest  of  the  population 
only  with  qualifications.  Probably  farmers  did  not  produce  any  more 
(relatively  to  the  total  product)  in  1919  than  in  1910,  but  they  prob- 
ably received  much  more  (again  relatively).  In  1920  they  received 
less  than  in  1919  partly  because  they  produced  more^  Monetary 
terms  are  not  adequate  to  the  quantitative  economics  involved  in  such 
situations.  Let  us  hope  that  it  will  be  possible  ultimately  to  obtain 
something  more  adequate  than  merely  pecuniary  means  of  measuring 
the  material  foundations  of  welfare. 

The  measurement  of  income  by  sources  of  production  suggests  a  re- 
lated qualification  as  to  the  significance  of  certain  sorts  of  apparently 
productive  effort.  The  effort  may  be  Avasted,  as  in  the  construction 
of  a  building  that  collapses  before  completion.  Is  there  income  in 
such  a  case.'*  The  effort  may  be  that  of  bucket-shop  touts  or  sellers 
of  fraudulent  stocks.  It  may  be  that  of  personal  servants  whose  time 
is  at  the  disposal  of  a  woman  whose  life  is  merely  parasitic.  Is  there 
an  income-product  in  these  cases?  Those  occupied  in  such  ways  re- 
ceive income,  but  it  is  derivative  merely,  and  those  who  nominally  earn 
it  produce  neither  material  goods  nor  appreciable  net  utility.  Similar 
questions  might  be  raised  as  to  the  significance  for  income  of  the  large 
increase  in  the  number  of  government  employees  during  the  war.  These 
things  are  mentioned  as  involving  further  problems,  suggested  by, 
rather  than  properly  included  in,  the  present  study.  We  have  not 
received  answers  to  all  important  questions  regarding  income  until 
we  are  told  the  extent  of  potentially  productive  effort  that  is  diverted 
by  means  of  derivative  income  into  channels  of  waste. 

Dr.  Macaulay  criticizes,  and  thinks  he  reverses,  the  interpretation 
given  to  the  slope  of  the  curve  of  income  as  drawn  to  a  double  loga- 
rithmic scale  by  previous  writers  (p.  123,  footnote).  This  statement 
calls,  at  least,  for  further  explanation." 

'The  reviewer  here  refers  to  the  production  of  goods,  not  of  cxchanfre  value. 

"The  reviewer  has  been  able  to  refer  only  to  Pigou,  but  from  his  remarks  it  appears 
that  both  Pareto  and  liowley  draw  the  curve  to  a  vertical  scale  for  income  and 
to  a  horizontal  scale  for  number  of  jicrsons — the  opposite  of  the  plan  of  similar 
lurves  in  the  book  under  review — which  fact  should  have  some  bearing  on  what  is 
iiieant  by  steepness   and  slope.     The   section   of  the  curve  of   income   on   which  most 


1922]  Statistics   and  Its   Methods  343 

The  book  is  an  important  contribution  to  quantitative  economics  in 
a  field  where  progress  in  economics  is  conspicuously  needed.  It  is  a 
long  step  in  the  direction  of  a  quantitative  theory  of  the  distribution 
of  income  to  individuals,  or  to  groups  and  classes  of  individuals,  which 
will  be  of  more  scientific  as  well  as  practical  value  than  certain  familiar 
discussions  of  distinctions  between  rent  and  interest. 

It  is  an  interesting  example  of  a  composite  product  which  appears 
to  have  benefited  by  its  multiple  authorship.  It  is  to  be  noted  also 
that  this  is,  in  another  sense,  not  a  product  of  individual  endeavor. 
It  comes  from  a  statistical  organization.  Productive  scholarship 
along  statistical  lines  needs  the  assistance  of  computers  and  tabulators 
and  calculating  machines  and  other  devices.  If  our  university  pro- 
fessors are  to  be  expected  to  be  productive  along  such  lines,  it  would 
seem  that  their  statistical  departments  should  be  provided  with  funds 
for  such  work.  The  occasional  work  of  professors  in  government 
bureaus  does  not  meet  the  needs  of  the  situation.  The  machines  will 
naturally  cost  relatively  less  than  the  books  made  available  in  the 
university  libraries  and  the  tabulating  and  computing  personnel  should 
be  expected  to  cost  relatively  more  than  the  library  cataloguers  and 
messengers. 

G.  P.  Watkins. 

Washington,  D.  C. 

NEW    BOOKS 

Davies,  G.  R.  Introduction  to  economic  statistics.  (New  York:  Century. 
1922.) 

Hansen,  A.  H.  Cycles  of  prosperity  and  depression  in  the  United  States, 
Great  Britain  and  Germany.  A  study  of  monthly  data,  1902-1908. 
(Madison,  Wis.:  Univ.  of  Wisconsin.      1922.      Pp.   112.     $1.) 

HuBNER,  O.  Geographisch-statistische  Tahellen  alter  Lander  der  Erde. 
66.  Jahrg.      (Vienna:  L.  W.  Seidel  &  Sohn.      1921.   Pp.  xv,  158.      15  M.) 

Ingalls,  W.  R.  Wealth  and  income  of  the  American  people.  A  survey 
of  the  economic  consequences  of  the  war.  (York,  Pa. :  G.  H.  Merlin  Co. 
1922.      Pp.  xiv,  321.) 

March,  L.  International  Statistical  Commission  report,  with  annexes. 
(Geneva:  League  of  Nations.      1921.     Pp.  35.) 

Marshall,  W.  C.  Graphical  methods  for  schools,  colleges,  statisticians, 
engineers  and  executives.  (New  York:  McGraw-Hill.  1921.  Pp.  vii, 
253.     $3.) 

ZizEK,  F.  Grundriss  der  Statistik.  (Munich:  Duncker  &  Humblot.  1921. 
Pp.  480.) 

Professor  Zizek  sets  out  to  teach  us  how  to  construct  statistics  whicli 

are  to  be  depended  on  and  of  which  the  meaning  is  unmistakable.  He  is 

light  is  thrown  by  available  statistics  also  has  a  bearing  upon  the  meaning  of  the 
slope. 


344  Reviews  and  New  Books  [June 

a  man  of  learning  who  studied  in  Paris,  and  then  was  a  practical  statisti- 
cian in  Vienna,  and  later  professor  in  the  department  of  statistics  at 
Frankfurt. 

The  book  is  a  large  one.  The  first  part  describes  at  length  the  method 
of  statistics :  the  collection  of  materials,  the  manipulation  of  them  by 
building  them  up  into  groups,  the  working  out  of  relations  and  averages, 
the  search  for  empirical  uniformities  which  can  be  derived  from  the 
figures,  and  so  on.  The  second  part  contains  the  material  part  of  sta- 
tistics: tables  relating  to  the  population,  economic  relations  and  culture 
of  the  nations.  In  his  presentation  of  these  the  author  constantly  reaches 
back  to  his  first  part  containing  the  principles  of  his  science,  and  seeks 
the  method  which  gives  the  best  results  on  the  questions  of  political 
economy  or  sociology.  The  statistics  of  political  economy  are  specially 
dealt  with — production,  distribution,  transportation,  consumption,  and 
some  orders  of  facts  which  have  not  hitherto  been  treated  statistically, 
such  as  the  statistics  of  banking,  of  stocks  and  shares,  and  balances.  Im- 
portant sections  also  deal  with  the  statistics  of  labor  and  finance. 

E.    ScHWIEDLAND. 

Vienna. 

Criminal  statistics  for  the  year  ended  September  30,  1920.  (Ottawa, 
Canada:  Dominion  Bureau  of  Statistics.      1921.      Pp.  xviii,  326.      30c.) 

Family  budgets  of  American  wage-earners;  a  critical  analysis.  (National 
Industrial  Conference  Board,  research  report  no.  41.  (New  York:  Cen- 
tury.     1921.      Pp.  viii,  97.     $1.) 

Index-numbers  des  prix  du  commerce  de  gros  en  Belgique.  (Brussels: 
Ministere  de  I'lndustrie,  du  Travail  et  du  Ravitaillement.  1921.  Pp. 
12.) 

Official  year  book  of  New  South  Wales,  1920.  (Sydney:  Bureau  of  Sta- 
tistics.     1921.     Pp.  157.) 

Resultats  preliminaires  due  recensement  de  la  population  du  Fevrier  1921. 
Republique  Tchecoslovaque.  (Prague:  L'Office  de  Statistique.  1921. 
Pp.  xl,  63.      24  C.) 

Resumen  anual  de  estadistica  municipal  (^ano  XVIII,  1920).  (Montevi- 
deo, Uruguay:  Direccion  de  Censo  y  Estadistica  de  Montevideo.  1921. 
Pp.  324.) 

Statistical  work:  a  study  of  opportunities  for  women.  (New  York:  The 
Bureau  of  Vocational  Information,  2  West  43rd  St.  1921.  Pp.  154. 
60c.) 

This  volume  is  the  second  in  a  series  of  studies  in  occupations  made  by 
the  Bureau  of  Vocational  Information.  Its  purpose,  as  the  title  indi- 
cates, is  to  direct  attention  to  the  opportunities  for  women  in  statistical 
work. 

The  discussion  covers:  (1)  the  nature  and  use  of  statistics;  (2)  statis- 
tical methods;  (3)  kinds  of  positions;  (4)  fields  in  which  statistical 
workers  are  employed;  (5)  i)reparation  advisable;  (6)  vocational  con- 
siderations; and  (7)  sketches  from  the  experience  of  workers.  The  first 
two  parts  are  composed  of  a  series  of  quotations,  somewhat  sketchy,  from 
various  authors.  These  sections  are  altogether  unsatisfactory.  The  sub- 
ject-matter and  the  method  of  treatment  are  inadequate  to  give  the  unin- 


1922]  Statistics   am]   Its   Methods  345 

initiated  an  understanding  either  of  the  nature  and  use  of  statistics  or  of 
statistical  methods,  while  the  contents  cover  familiar  ground  without 
adding  anything  new  for  those  who  already  have  some  knowledge  of  the 
subject.  Parts  three  and  four  outline  the  types  of  positions  now  filled 
by  women  statistical  workers  in  government  departments,  business,  sta- 
tistical service  organizations,  education,  and  social  work.  Brief  descrip- 
tions of  work  done  by  different  women  in  the  various  fields  are  given  from 
time  to  time.  These,  however,  must  be  interpreted  as  individual  instances 
and  not  as  representative  samples  of  the  statistical  work  in  general  for 
each  organization.  These  parts,  together  with  the  later  discussion  of 
the  preparation  deemed  advisable  by  those  already  in  the  field,  and  of  the 
advantages  and  limitations  of  this  type  of  service,  will  be  of  considerable 
value  to  college  students  and  to  vocational  guidance  bureaus. 

The  volume  may  well  be  called  a  handbook  of  information  for  those 
who  are  equipped  to  tabulate  figures  and  draw  diagrams.  It  offers  little 
to  those  who  have  passed  through  this  preliminary  stage  and  are  trained 
to  interpret  results  and  present  conclusions. 

Blanche  L.  Altman. 

Northwestern  University. 

Statistics  of  municipal  finances.  Fourteenth  annual  report  for  city  and 
town  fiscal  years  ending  between  November  30,  1919  and  March  31,  1920, 
Commonwealth  of  Massachusetts.  Pub.  doc.  79.  (Boston:  Commis- 
sioner of  Corporations  and  Taxation.      1921.) 


PERIODICALS 

The  Review  is  indebted  to  Robert  F.  Foerster  for  abstracts  of  articles  in  Italian 
periodicals,  and  to  R.  S.  Saby  for  abstract  of  articles  in  Danish  and  Swedish 
periodicals. 

Theory 

(Abstracts  by  Walton  H.  Hamilton) 

AxsiArx,  M.  Le  pMnomene  de  Vinterft  et  son  explication.  Rev.  de  I'lnst.  de 
Soc,  July,  1921.  Pp.  12.  A  study  of  the  Marxian  and  the  Austrian  theories  of 
interest  and  an  inquiry  of  a  place  for  the  theory  of  capitalization  in  the  latter. 

Bahxes,  H.  E.  Sojtje  typical  contributions  of  English  sociology  to  political  theory. 
Am.  Journ.  Soc,  Jan.,  Mar.,  1922.  Pp.  44,  15.  A  scholarly  survey  of  the  recent 
literature  of  the  nature  and  functions  of  political-social  institutions. 

Bohm-Baweek,  E.  Zur  Zinstheorie  Marshall's.  Ek.  Tids.,  no.  12,  1921.  Pp.  10. 
A  criticism  of  Marshall's  theory  of  rent. 

vox  BoRTKiEWCZ,  VOX  L.  Objektivismiis  unci  Subjcktivisiiius  in  der  Werttheorie. 
Ek.  Tids.,  no.  12,  1921.  Pp.  23.  A  study  of  the  objective  and  subjective  factors 
in  the  theory  of  value. 

Carveh,  T.  N.  The  equilibrium  wage.  Annals  Am.  Ac.  Pol.  and  Soc.  Sci.,  Mar., 
1922.  Pp.  3.  "The  only  wage.  .  .that  needs  to  be  based  upon  the  cost  of  living.  .  . 
is  the  minimum  wage  below  which  we  do  not  consider  it  decent  to  allow  anyone 
to  live.''  As  for  others  "the  equilibrium  of  demand  and  supply  would  be  a 
better  indication  than  anv  figures  that  anv  bodv  of  experts  would  be  likely  to 
find." 

Feis,  H.  The  resquisites  of  a  policy  of  wage  settlement.  Annals  Am.  Ac.  Pol.  and 
Soc.  Sci.,  Mar.,  1922.  Pp.  6.  "Any  policy  of  wage  settlement  will  have  to  reckon 
with  a  large  number  of  difficult  requirements,  which  cannot  be  wholly  reconciled 
with  each  other.  No  single  principle  such  as  that  of  'relative  rating'  will  suffice 
to  meet  them  all." 

Feedebick,  J.  G.  Our  new  economic  levels.  Pacific  Rev.,  Mar.,  1922.  Pp.  16. 
"The  relation  between  money,  time,  merchandise,  and  progress  of  every  kind  is 
bending  and  changing  because  of  the  war." 

Feiday,  D.  An  e.vtension  of  value  theory.  Quart.  Journ.  Econ.,  Feb.,  1922.  Pp.  23. 
"Once  we  recognize  that  all  valuation  is  purposive  we  have  a  test  for  the  validity 
and  sufficiency  of  any  institution  of  pecuniary  valuation  like  the  market  or  the 
court  sitting  in  a  rate  case." 

Hollax^deh,  J.  H.     The  economist's  spiral.     Am.  Econ.  Rev.,  Mar.,  1922.     Pp.  20. 

Ioteyko,  J.     La  productivite  et  la  duree  du  travail.     Rev.  de  I'lnst.  de  Soc,  July, 

1921.  Pp.  32.  An  attempt  to  state  the  questions  involved  in  "the  organization 
and  the  administration  of  labor'  as  a  theoretical  problem,  having  physiological, 
psychological,  industrial,  social,  economic,  and  juristic  aspects." 

Kaxtoe,  J.  R.  An  essay  towards  an  institutional  conception  of  social  psychology. 
Am.  Journ.  Soc,  Mar.,  1922.  Pp.  17.  There  is  "an  imperative  need  for  an 
adequate  psychological  conception,  because  social  phenomena  consist  in  part  at 
least  of  psychological  facts  and  because  most  current  psychological  conceptions 
are  worthless  for  the  interpretation  of  social  facts.'' 

LiEFMAXX,  R.     The  chief  problem  of  economic  theory.     Quart.  Journ.  Econ.,  Feb., 

1922.  Pp.  8.  A  reply  to  Kleene's  review  of  his  Grundsatze  der  Volkszenrtschafts- 
lehre. 

LovEJOY,  A.  ().  The  paradox  of  the  thinking  behaviorist.  Philos.  Rev.,  Mar.,  1922. 
Pp.    13.     "To   maintain   even    a   decent    semblance    of  consistency,   the   behaviorist 


1922]  Theory  347 

should  at  least  refrain  from  professing  to  know  anything.  Behaviorism,  in  short, 
belongs  to  that  class  of  theories  which  become  absurd  as  soon  as  they  become 
articulate." 

Mitchell,  T.  W.  The  determination  of  wage  rates.  Annals  Am.  Ac.  Pol.  and 
Soc.  Sci.,  Mar.,  1922.  Pp.  15.  "The  wage  question  is  a  question,  first,  of  the 
productivity  of  industry,  second,  of  proportion  between  the  income  of  different 
groups  of  workers  and  not  of  division  between  workers  and  employers." 

Ogbukx,  W.  F.  and  Thomas,  D.  Are  inventions  inevitable.  Pol.  Sci.  Quart.,  Mar., 
1922.  Pp.  17.  "The  distribution  of  mental  ability... is  such  that  there  is  great 
possibility  of  considerable  frequency  of  exceptional  native  ability.  The  manifest 
native  abilitj'  necessary  to  produce  may  be  rare  because  the  native  ability  has  not 
been  trained.  .  .A  specific  invention  depends  upon  a  certain  cultural  preparation 
and  could  not  be  made  without  the  existence  of  the  constitutent  cultural  elements." 

Ohlin',  B.  H.  S.  Collins  betydelse  for  den  svenska  penningteoriens  utveckling.  Ek. 
Tids.,  no.  10-11,  1921.  Pp.  .3.  A  critical  estimate  of  the  contributions  of  Collins' 
brochure  written  in  1829  on  monetary  theory  in  Sweden. 

Oechasd,  J.  E.  Rent  of  mineral  lands.  Quart.  Journ.  Econ.,  Feb.,  1922.  Pp.  29. 
"After  nationalization  of  mineral  rights,  if  the  government  operates  the  mines, 
a  part  of  all  of  the  present  royalties  can  be  passed  along  to  the  consumer  or  to  the 
laborer."  If  rights  are  leased  "to  private  operators,  neither  the  consumer  nor  the 
laborer  can  benefit  directly.  ..  .If  all  royalties  are  abolished  and  free  mining  is 
permitted,  the  consumer  and  laborer  can  benefit  only  to  the  amount  of  the  mar- 
ginal royalty.  The  more  fertile  mines  will  continue  to  yield  a  surplus  and  that 
surplus  will  go  to  operator." 

Paheto,  V.  La  question  sociale.  Scientia,  Jan.  1,  1922.  Pp.  10.  The  "social  prob- 
lem" involves  the  organization  for  the  production  of  wealth  as  well  as  for  its 
distribution. 

Pattersost,  E.  M.  Factors  determining  real  wages.  Annals  Am.  Ac.  Pol.  and  Soc. 
Sci.,  Mar.,  1922.  Pp.  7.  "Labor  is  one  of  the  countributors  to  a  joint  product, 
but... the  part  it  has  produced  is  indeterminate.  Instead  of  deluding  ourselves 
with  the  belief  that  it  can  be  ascertained.  .  .we  should  concern  ourselves  more  over 
the  effective  functioning  of  industry." 

Plehx,  C.  C.  Income  in  the  United  States.  U.  of  Cal.  Chronicle,  Apr.,  1922.  Pp.  5. 
A  review  of  the  recent  study  of  Income  in  the  United  States  by  Mitchell,  Knauth, 
Macaulay,  and  King. 

PouxD,  A.  The  iron  man  and  the  job.  Atlantic  Mo.,  Mar.,  1922.  Pp.  6.  The  intro- 
duction of  the  machine  tends  to  the  promotion  of  personal   economic  insecurity. 

.     The   iron  man  and  the   mind.     Atlantic   Mo.,   Feb.,   1922.     Pp.   11.     "We 

must  take  account  of  the  tendencies  of  our.  ..repetitive  industries  to  eliminate  the 
creative  instinct  in  the  workers,  to  narrow  the  fields  of  craftsmanship,  to  discard 
entirely  the  contributions  that  could  be  had  from  their  minds." — Herbert  Hoover. 

RiGXAXO,  E.  A  liberal  socialistic  program.  Monist,  Jan.,  1922.  Pp.  11.  "This 
reform  in  the  law  of  succession,  which  would  finally  permit  of  the  beginning  of 
the  much  desired  nationalization,  by  pacific  and  legal,  but  at  the  same  time  rapid, 
means,  might  and  ought  to  represent.  .  .the  minimum  program  of  socialistic  action 
that  is  capable  of  ...attracting  to  itself  the  very  large  majority  of  the  working 
and  popular  classes." 

RisT,  C.  Quelques  definitions  de  Vepargne.  Essai  de  critique.  Rev.  d'Econ.  Pol., 
Dec,  1921.  Pp.  24.  A  criticism  and  a  subtle  and  articulate  restatement  of  the 
theory  of  "provision  for  the  future." 

Somebville,  B.  H.  The  economics  of  utility.  Monist,  Jan.,  1922.  Pp.  8.  An 
example:  "In  choosing  one's  work,  one  should  give  equal  consideration  to  two 
things:  the  usefulness  of  the  work,  and  one's  ability  to  do  the  work." 


348  Periodicals  [June 

SoMMABiN,  E.  Kapifalrdnta.  Ek.  Tids.,  no.  12,  1921.  Pp.  12.  Concerning  the 
word  "interest"  and  its  use  in  economic  terminology. 

SouLE,  G.  The  relation  between  wages  and  national  productivity.  Annals  Am.  Ac. 
Pol.  and  Soc.  Sci.,  Mar.,  1922.  Pp.  6.  "Those  engaged  in  the  distributive  process 
have  apparently  been  receiving  during  the  past  twenty  years  an  increasing  share 
of  the  national  product.  This  encroachment  has  been  chiefly  at  the  expense  of 
the  wage-earners." 

WoTHKRSPooN,  H.  J.  Labor  as  service.  Constructive  Quart.,  Mar.,  1922.  Pp.  13. 
A  typical  statement  of  a  popular  homiletical  solution  of  all  economic  problems. 

Economic  History  (United  States) 

(Abstracts  by  Amelia  C.   Ford) 

Bek,  W.  G.  Folloivers  of  Duden.  Missouri  Hist.  Rev.,  Jan.,  1922.  Pp.  19.  Con- 
tains references  to  the  farming  methods  and  living  customs  of  the  first  settlers. 

Bone,  S.  C.  The  land  that  Uncle  Sam  bought  and  then  forgot.  Rev.  Rev.,  Apr., 
1922.  Pp.  9.  Discusses  Alaska's  shrinkage  in  population,  her  coal  resources,  and 
the  government  railroad. 

Brittox,  W.  Pioneer  life  in  south-west  Missouri.  Missouri  Hist.  Rev.,  Oct.,  1921. 
Pp.  44.  Describes  the  mining  and  farming  operations  of  the  early  days;  also 
pioneer  food  and  clothes.     Continued  in  the  January  number. 

Connor,  L.  G.  A  brief  history  of  the  sheep  industry  in  the  United  States.  Annual 
Report  of  the  Am.  Hist.  Assoc,  for  the  year  1918.  Pp.  77.  Finds  the  American 
sheep  industry  characterized  by  three  features:  (1)  the  adoption  of  wool  growing 
and  the  development  of  the  Spanish  merino  as  a  wool-bearing  animal  by  earlier 
flockmasters ;  (2)  the  decline  of  the  eastern  wool  industry  and  the  westward 
migration  of  the  wool  sheep;  and  (3)  the  change  to  mutton  types  both  on  the 
farm  and  the  range. 

Ford,  W.  C.  Earliest  years  of  the  Dutch  settlement  of  New  Netherland.  Proc. 
of  the  N.  Y.  State  Hist.  Assoc,  vol.  XVII,  1919. 

Hajlsey,  F.  W.  The  beginnings  of  daily  journalisrn  in  New  York  City.  Proc.  of 
the  N.  Y.  State  Hist.  Assoc,  vol.  XVII,  1919. 

JoPLiNG,  J.  E.     Brief  history  of  the   Cleveland-Cliffs  Iron  Company.     Mich.   Hist. 

Mag.,    Jan.-Apr.    1921.     Pp.    23.     Sketches    conditions    of    labor,    transportation, 

profits,  etc.,  in  one  of  the  earliest  and  largest  iron-mining  enterprises  in  the  Lake 

Superior  field. 
MoEEisoN,  A.  J.     The  commerce  of  the  prairies  and  Dr.  Oregg.     Texas  Rev.,  Oct., 

1921. 
Nichols,  J.    P.     Advertising   and   the   Klondike.     Wash.    Hist.   Quart.,   Jan.,    1922. 

Pp.   7.     Describes   the   advertising  campaign   carried   on   by   the   Seattle   business 

men  in  rivalry  with  the  other  Pacific  coast  cities  to  secure  profit  and  growth  from 

the  Klondike  rush. 

NoTZ,  W.  Die  amerikanischen  trade  associations.  Weltwirtsch.  Archiv,  Jan.,  1922. 
Pp.  19.  Traces  the  recent  rapid  growth  and  four  chief  functions  of  trade  associ- 
ations, points  out  certain  tendencies;  concludes  that  this  movement  has  had  an 
exceedingly  favorable  influence  on  American  economic  life. 

Ramsdell,  C.  W.  The  control  of  manufacturing  by  the  Confederate  Government. 
Miss.  Valley  Hist.  Rev.,  Dec,  1921.  Pp.  49.  Describes  the  military  regulation 
of  the  shoe  and  clothing  shops  for  army  supplies,  the  efforts  to  check  profiteering, 
and  the  selfish  policy  of  the  state  authorities. 

Randall,  J.  G.  George  Rogers  Clark's  service  of  supply.  Miss.  Valley  Hist.  Rev., 
Dec,  1921.  Pp.  14.  Details  the  administrative  difficulties  of  Clark's  campaign  in 
regard  to  provisi»)ns  and  equipment. 


1922]  Agricultural  Economics  349 

Schmidt,  L.  B.  Internal  grain  trade  of  the  United  States:  1860-1890.  la.  Journ. 
of  Hist,  and  Polit.,  Jan.,  1922.  Pp.  62.  Discusses  the  competitive  struggle  after 
the  Civil  War  between  the  lake  and  rail  routes  for  the  western  grain  and  flour 
traffic.     Third  article  in  series. 

Smythe,  W.  E.  a  new  homestead  policy  for  America.  Rev.  Rev.,  March.,  1922. 
Pp.  6.  Summarizes  the  plans  for  extending  the  reclamation  service  to  cut-over 
lands  and  abandoned  districts  in  all  sections  of  the  nation. 

Stimson,  G.  K.  Bail  growth  of  Michigan's  capital  city.  Mich.  Hist.  Mag.,  July- 
Oct.,  1921.     Pp.  32.     Traces  railroad  development  in  Michigan. 

Sweet,  F.  G.  Story  of  Battle  Creek's  first  bank.  Mich.  Hist.  Mag.,  July-Oct.,  1921. 
Pp.  9.     Indicates  the  methods  of  a  wild-cat  bank. 

Trimble,  W.  Historical  aspects  of  the  surplus  food  production  of  the  United 
States,  1862-1902.  Annual  Report  of  the  Am.  Hist.  Assoc,  for  the  year  1918. 
Pp.  17.  Sets  forth  the  economic  and  social  consequences  upon  both  Europe  and 
America  of  the  development  of  quantity  production  for  a  world  market;  also  the 
factors  in  the  United  States  that  caused  this  development. 

True,  R.  H.  Early  days  of  the  Albermarle  Agricultural  Society.  Annual  Report 
of  the  Am.  Hist.  Assoc,  for  the  year  1918.  Pp.  17.  Describes  the  leaders,  organ- 
ization, and  activities  of  this  society  of  which  Thomas  Jefferson  was  a  member. 

Minute  book  of  the  Albermarle  (Fa.)  Agricultural  Society.  Annual  Report  of  the 
Am.  Hist.  Assoc,  for  the  year  1918.  Pp.  87.  Records  the  various  undertakings 
of  the  society  to  "promote  the  interests  of  agriculture  and  rural  economy." 

Agricultural  Economics 

(Abstracts  by  A.  J.  Dadisman) 

Bhatnagar,  R.  p.  The  ideal  system  of  land  tenure.  Indian  Journ.  of  Econ.,  Dec, 
1920.     Pp.  14.     Fundamental  principles  of  land  tenure  are  discussed. 

Bjorkman,  T.  Priserna  pa  jordbruksfastlghefer  i  Torna  och  Bara  hdrader  i  Skdne, 
1914-1920.  Ek.  Tids.,  no.  10-11,  1921.  Pp.  7.  A  study  of  land  values  and  of  the 
changes  in  price  levels  in  the  different  commodities  used  and  produced  on  the 
farms  of  two  rural  districts  in  Sweden,  1914-1920. 

DoiN,  P.  Des  limites  dans  lesquelles  se  conqoit  en  France  une  politique  agraire. 
Reforme  Soc,  Nov.-Dec,  1921.  Pp.  16.  A  discussion  of  agricultural  development 
in  France  with  examples  from  other  countries. 

DuRAND,  E.  D.  Agriculture  in  Eastern  Europe.  Quart.  Journ.  of  Econ.,  Feb.,  1922. 
Pp.  28.     Development  of  agricultural  conditions,  and  the  present  problems. 

Ely,  R.  T.     The  National  Agricultural  Conference.     Am.   Rev.  Rev.,  March,   1922. 

Frame,  B.  H.  The  costs  of  crop  production  in  Missouri  1921.  Mo.  Sta.  Bull.  190, 
Dec,  1921.  Pp.  15.  Detailed  costs  of  producing  wheat,  oats,  corn  and  hay; 
data  from  cost  accounts  and  questionaires.  Additional  data  on  cost  in  relation 
to  yield.     Fourteen  tables. 

Friday,  D.  Agriculture  and  the  business  revival.  New  Repub.,  Dec,  1921.  Pp.  3. 
The  interrelation  of  agriculture  and  other  business. 

Frissell,  S.  The  southern  farmer  tries  cooperative  marketing.  Am.  Rev.  Rev., 
Jan.,  1922.  Pp.  5.  An  example  of  successful  cooperative  marketing  of  cotton, 
tobacco,  and  peanuts. 

Gray,  L.  C.  Helping  landless  farmers  to  own  farms.  U.  S.  Dept.  Agri.  Yr.  Book 
1920.  Pp.  18.  A  study  of  opportunities  and  methods  of  obtaining  farm  land. 
Two  figures. 

Macek,  J.     Czechoslovakia:  agrarian   reform.     Intern.   Rev.   of   Agri.   Econ.,   Dec, 


350  Periodicals  [June 

1921.  Pp.  11.  A  discussion  of  recent  legislation  aimed  at  breaking  up  large 
holdings  and  establishing  small  land  owners. 

Mkad,  E.  The  new  foi-ti/-niner.t.  Survey,  Jan.  28,  1922.  Pp.  9.  An  account  of 
methods  and  progress  of  California  land  settlement. 

Mp:yer,  E.,  Jr.  Emergency  credit  for  agriculture.  Survey,  Jan..,  1922.  Pp.  4. 
How  the  War  Finance  Corporation  has  helped  to  provide  money  for  agriculture. 

Ohlin,  B.  Til  fragan  om  akogarnax  omlofptid.  Ek.  Tids.,  no.  12,  1921.  Pp.  26. 
An  attempt  to  discover  economic  principles  underlying  the  management  of  forests. 

Peck,  F.  W.  The  cost  of  a  bushel  of  wheat.  U.  S.  Dept.  Agri.  Yr.  Book  1920. 
Pp.  8.     An  analysis  of  the  cost  of  producing  wheat.     Two  figures. 

RoiiTi.iEB,  C.  De  slumrande  mUjnnernas  varde.  Ek.  Tids.,  no.  12,  1921.  Pp.  10. 
Natural  resources  are  valueless  till  they  can  be  developed  and  utilized.  The 
author  fears  that  state  appropriation  will  retard  effective  utilization. 

RuiNi,  M.     Le  industrie   e   le   esportazioni  alimentari.     Riv.   dl   Pol.   Econ.,   no.   9, 

1921.  Pp.  23.  The  problems  involved  in  the  restoration  of  the  pre-war  scale  of 
food  production  in  Italy;  suggested  modes  of  action. 

Valgren,  V.  N.  and  Engelbert,  E.  E.  Farm  mortgage  loans  bg  banks,  insurance 
companies,  and  other  agencies.  U.  S.  Dept.  Agri.  Bull.  1047,  Dec,  1921.  Pp.  23. 
A  study  of  farm  mortgage  loans,  their  costs  and  methods  of  repayment,  from 
data  obtained  by  questionaires.     Ten  pages  of  tables. 

.     The  credit  association  as  an  agency  for  rural  short-time  credit.     U.  S. 

Dept.  Agri.  Cir.  197,  Oct.,  1921.  Pp.  24.  Development  and  features  of  the  associ- 
ation are  discussed  and  a  suggestive  state  law  given.  Four  tables  and  three 
figures. 

Welliver,  J.  C.  The  agricultural  crisis  and  the  "bloc."  Am.  Rev.  Rev.,  Feb.,  1922. 
Pp.  8.     The  attitude  of  congress  towards  the  agricultural  crisis. 

Cooperative  land-holding  societies  in  Italy.  Inter.  Rev.  Agri.  Econ.,  Oct.,  1921. 
Pp.  16.  The  general  plan  of  organization  and  management  of  the  principal  types 
is  described. 

The  progress  of  land,  settlement  in  Australia.  Intern.  Rev.  Agri.  Econ.,  Oct.,  1921. 
Pp.  12.  State  laws,  special  sales,  leases,  and  land  holdings  are  discussed.  Eight 
tables  are  presented. 

The  steps  taken  during  the  war  to  replace  mobilized  fartners  and  farm  workers  in 
France.  Intern.  Rev.  Agri.  Econ.,  Oct.,  1921.  Pp.  19.  Sources  from  which  farm 
laborers  were  drawn  and  methods  of  handling  the  laborers. 

Railways  and  Transportation 

(Abstracts  by  Julius   H.   Parmelee) 

AcwoRTii,  W.  M.  Can  the  railroads  earn  a  fair  return?  Ry.  Age,  Jan.  28,  1922. 
Pp.  2.  If  rates  do  not  yield  a  reasonable  revenue,  the  balance  should  be  made 
\ip  by  taxation. 

ArtranDj  T.  p.     If  ore  federal  I'aluation  of  the  roads  may  be  used.     Ry.  Age,  Feb.  4, 

1922.  Pp.  2.  Uses  under  the  law;  also  a  check  on  tlie  balance  sheet,  on  financial 
conditions,  on  purciuises  on  taxation,  and  on  government  purchase. 

Bakkk,  J.  E.     Railroading  in  China.     Proc.  Pacific  Ry.  Club,  Mar.,  1922.     Pp.  7. 

BoKiiLER,  E.  Die  englisrhe  Eisenbahnpolitik  der  letzten  vicrzig  .Tahre  {1882-1922). 
Arehiv  f.  Eisenbahnw.,  Jan.-Fcb.,  1922.     Pp.  52. 

BoLTZER,  Die  chinesischcn  Eiscnbahncn  im  .Tahr  1919.  Arehiv  f.  Eisenbahnw.,  Jan.- 
Fcb.,  1922.     Pp.  8. 


1922]  RaAlways   and   Transportation  351 

Clapp,  E.  J.  An  American  transportation  system.  I,  Railroads.  II,  Merchant 
marine.  Ill,  Seaports.  New  Repub.,  Feb.  1,  Mar.  15,  Apr.  5,  1922.  Pp. 
4,  4,  2.  Lack  of  system  in  railroad  terminal  location  and  operation.  Total  lack 
of  system  in  marine  rates  and  operation.  A  coordinated  American  transporta- 
tion system  needed. 

CoRBiNO,  E.  II  protezionismo  niaritfimo  in  Italia.  Giorn.  d.  Econ.,  Nov.,  1921. 
Pp.  20,  44.     The  history  of  Italian  shipping  and  ship  subsidies  to  1895. 

Daggett,  S.  The  railroad  labor  controversy  of  1921.  U.  of  Cal.  Chronicle,  Jan., 
1922.     Pp.  22. 

Dunn,  S.  O.     Will  the  railways  be  consolidated?     Am.  Rev.  Rev.,  Jan.,  1922.  Pp.  4. 

Haguet,  J.  La  revision  des  tarifs  de  transports.  Journ.  des  Transports,  Feb.  4, 
1922.     Pp.  4. 

Hoover,  H.  C.  Real  program  of  railroad  construction  needed.  Ry.  Age,  Feb.  11, 
1922.     Pp.  4. 

HuNGERFORD,  E.  An  American  railroad  program.  Century,  May,  1922.  Pp.  9. 
The  regional  system  of  railway  consolidation. 

.  French  and  English  railroads.  Century,  Apr.,  1922.  Pp.  6.  Coordi- 
nation, consolidation,  and  administration  as  worked  out  on  the  French  and  British 
railway  systems. 

What's  the  matter  with  the  railroads?     Century,  Jan.,  Feb.,  Mar.,  1922. 


Pp.  9,  9,  10.     In  three  parts:     I,   The  problem  defined;  II,   The   human  factor; 
III,  Competition,  efficiency,  and  economy. 

HuTCHiNS,  F.  L.     A  study  in  railroad  costs.     Annalist,  Feb.  6,  1922.     Pp.  2. 

Jackman,    W.    T.     Problem    of    the    government    railways    in    Canada.     Ry.    Age, 
Mar.  11,  18,  1922.     Pp.  4,  4. 

King,   P.     Henry   Ford — marplot.     Forum,    Feb.,    1922.     Pp.    11.     Critical    analysis 
of  operations  of  Detroit,  Toledo  &  Ironton  R.  R.  under  Ford  management. 

LisMAN,   F.   J.     The   consolidation   of  freight    terminals.     Ry.    Age,   Feb.   25,   1922. 
Pp.  3.     Not  desirable  for  many  reasons,  but  terminal  efficiency  must  be  increased. 

MacMillan,   E.   a.     The   railroad   transportation   situation  in  soviet    Russia.     Ry. 
Rev.,  Feb.  18,  1922.     Pp.  6. 

Paish,  G.     The  future  of  British  railways.     Journ.  Inst,  of  Transport.,  Jan.,  1922. 

Pp.  7. 
Parmelee,  J.  H.     Maintenance  in  1921  failed  to  meet  railway  needs.     Engg.  News 

Record,  Mar.  9,   1922.     Pp.   3.     Three  standards   applied:   expenditures,   physical 

work  done,  and  comparative  physical  condition. 

Parsons,  F.  W.     Are  we  coming  to  synthetic  railroads?     World's  Work,  Feb.,  1922. 
Pp.  6.     Question  of  railway  consolidation. 

Peck,  C.  B.     Factors  in  the  business  of  owning  locomotives.     Ry.  Age,  Feb.,  1922. 
Pp.  4.     Work  of  motive  power  and  operating  departments  of  a  railway. 

Quick,   H.     America   an   experiment   in    transportation.     Sat.    Eve.    Post,    Feb.    25, 
1922.     Pp.  5.     Historical  considerations. 

.     Transportation  possibilities  and  responsibilities.     Sat.  Eve.   Post,  Mar. 

4,  1922.     Pp.  6.     Electrical  power  as  a  solution  to  operating  difficulties. 

RiPLET,  W.   Z.     The   problems   of   the   railroads.     Ry.   Rev.,    Feb.   4,    1922.     Pp.   6. 
Regulation,  labor,  consolidation,  and  other  problems. 

Whyte,  F.  M.     Australia  and  its  railways.     Proc.  N.  Y.   Railroad  Club,   Feb.   17, 

1922.     Pp.  17.     With  maps. 
Die  bayerischen  Staatseisenbahnen  in  den  Jahren  1917  und  1918.     Archiv.  f.  Eisen- 

bahnw.,  Jan.-Feb.,  1922.     Pp.  10. 


352  Periodicals  [June 

Competition  jeopardizes  railroad  earnings.  Mag.  of  Wall  Street,  Apr.  1,  1922. 
Pp.  4.     Interview  with  Chairman  Julius  Kruttschnitt  of  Southern  Pacific  Co. 

Die  Eisenbahnen  in  Norwegen  in  den  Jahren  1018-1910  und  1910-1020.  Archiv.  f. 
Eisenbahnw.,  Jan.-Feb.,  1922.     Pp.  8. 

Die  Eisenbahnen  der  Schweiz  in  den  Jahren  1018  und  1919.  Archiv.  f.  Eisenbahnw., 
Jan.-Feb.,  1922.     Pp.  10. 

A  freight  conductor's  story.  Nation,  Mar.  8,  1922.  Pp.  2.  Comparative  earnings 
in  1920  and  1921. 

The  French  railway  problem — and  its  solution.  Ry.  Gaz.  (London),  Jan.  27,  1922. 
Pp.  2.  The  new  scheme  now  in  operation,  with  common  fund  for  all  lines,  bonuses 
for  efl5cient  lines,  and  share  of  employees  in  management  and  profits. 

Die  Grtippierung  der  englischen  und  nordamerikanischen  Eisenbahnen.  Archiv  f. 
Eisenbahnw.,  Jan.-Feb.,  1922.  Pp.  8.  Railway  consolidation  in  England  and  the 
United  States. 

Italian  railways.  Ry.  Gaz.  (London),  Apr.  18,  1922.  Pp.  28.  Historical  sketch, 
with  map  and  diagrams,  and  statistics. 

Die  italienischen  Staatsbahnen,  IOI4-IOI6.  Archiv.  f.  Eisenbahnw.,  Jan.-Feb.,  1922- 
Pp.  16. 

Die  Suitschang-Bahn    {China).     Archiv   f.   Eisenbahnw.     Jan.-Feb.,   1922.     Pp.   6 

Shipping 

(Abstracts  by  E.  S.  Gregg) 

BoGERT,  J.  L.  A  vital  factor  in  economy  of  ocean  transportation.  Pacific  Marine 
Rev.,  Feb.,  1922.  A  brief  but  forceful  statement  of  the  extent  to  which  the 
character   and  direction  of  trade   influences   ocean   shipping. 

Hill,  N.  Reduced  overseas  carrying  trade.  Shipbuilding  and  Shipbuilding  Record, 
Feb.  16,  1922.  Pp.  3.  An  analysis  by  the  able  secretary  of  the  Liverpool  Steam- 
ship Owners'  Association. 

Idek,  V.  G.  Equalizing  seamen's  wages.  Annalist,  Mar.  6,  1922.  An  account  of 
recent  changes  in  wages  and  seamen's  organizations. 

.     What  is  the   emergency  fleet   costing?     Annalist,   Mar.   20,   1922.     An 

analysis  of  the  fiscal  operation  of  the  Emergency  Fleet  Corporation,  containing 
facts  that  should  be  given  wide  publicity. 

MoNTELL,  R.  R.  The  handwriting  on  the  wall.  Pacific  Marine  Rev.,  Feb.,  1922. 
Pp.  6.  A  brief  in  favor  of  the  adoption  of  the  motorship  as  the  backbone  of  our 
merchant  marine,  and  a  criticism  of  the  proposed  subsidy  bill  for  ignoring  this 
type.     A  good,  though  partisan,  article. 

Pierce,  J.  Australia's  government.  Annalist,  Mar.  20,  1922.  Pp.  5.  A  clear 
account  of  the  experience  of  the  Australian  Commonwealth  in  the  ownership  and 
operation  of  shipping. 

Potter,  C.  H.  More  tramp  tonnage  essential  to  the  upbuilding  of  America's  mer- 
chant marine.  Nautical  Gaz.,  Mar.  25,  1922.  Pp.  16.  Not  convincing,  but  an 
article  which  economists  sliould  read  to  get  an  idea  of  how  the  mind  of  a  practical 
shipping  man  works. 

Rioos,  S.  G.  How  much  .thipping  can  we  support?  Annalist,  Jan.  23,  1922. 
Pp.  2.  A  questionable  theory  of  shipping  from  the  viewpoint  of  national  economy, 
based  on  an  analysis  of  the  character,  direction,  and  volume  of  trade  of  the  United 
States,  Great   Britain,  Spain,  and  other  countries. 

SiNOH,  St.  N.  The  development  of  Japanese  shipping.  Wealth  of  India,  Dec, 
1921.     Pp.  4. 


1922]  Commerce  353 

Wateeburt,  I.  C.  The  world's  shipjnng  dilemma.  Annalist,  Jan.  2,  1922.  Pp.  2.  A 
miscellany  of  facts  and  figures. 

American  ships  in  our  foreign  trade.  Commerce  Reports,  Dec.  12,  1921 ;  Jan.  2,  9 
16,  1922.  Pp.  1,  2,  2,  2.  The  first  analysis  of  the  volume  of  our  foreign  trade' 
in  long  tons  with  bulk  oil  and  Great  Lakes  cargo  dilferentiated  and  with  the 
percentage  participation  of  U.  S.  independent.  Shipping  Board,  and  foreign  ton- 
nage given. 

Fluctuations  in  shipping  values;  Earnings  of  British  shipping;  Angler's  steam  ship- 
ping report,  1921.  Fairplay,  Jan.  5,  1922.  Pp.  4,  4,  6.  Primary  raw  material 
without  a  knowledge  of  which  an  intelligent  understanding  of  the  shipping  situa- 
tion is  impossible. 

The  progress  of  the  motor  ship.  Syren  and  Shipping,  Jan.  4,  1922.  Pp.  41.  A 
good  account,  with  illustrations,  of  the  development  of  this  type  of  ship  which 
seems  destined  to  lower  the  cost  of  overseas  transportation. 

Commerce 

(Abstracts   by   Harry   R.   Tosdal) 

Bernhardt,  J.  Was  decontrol  of  sugar  in  the  United  States  advisable?  Journ.  Pol. 
Econ.,  Feb.,  1922.  Pp.  8.  In  getting  back  to  a  normal  basis,  the  sugar  market 
would  have  suffered  similar  vicissitudes  even  if  under  federal  control. 

Bradford,  E.  A.  One  price  associations.  Annalist,  Mar.  20,  1922.  Pp.  2.  Criti- 
cizes attitude  of  Department  of  Justice  with  regard  to  open  price  associations 
and  discusses   recent  supreme  court  decision   in   Hardwood   Manufacturers'  case. 

Chandler,  H.  A.  E.  Domestic  trade  and  our  international  economic  relations. 
Commerce  Mo.,  Jan.,  1922.  Pp.  9.  Discusses  various  factors  determining  rela- 
tive importance  of  foreign  and  domestic  commerce  to  show  that  significance  of 
foreign  trade  is  much  greater  than  statistical  data  seem  to  indicate. 

Daxpoff,  J.  Interskandinavisk  Handelsstatistik  1912-1918.  Nationalok.  Tids.,  no. 
5-6,  1921.  Pp.  9.  The  three  Scandinavian  countries  have  published  a  compre- 
hensive statistical  account  of  inter-Scandinavian  trade  relations  during  the  period 
1912-1918,  which  the  author  of  this  article  discusses. 

Domvilxe-Fife,  C.  Anglo-South  American  commerce :  its  organization  and  expan- 
sion. Bus.  Org.  and  Manag.  (London),  Oct.,  1921.  Pp.  8.  Gives  brief  sug- 
gestions for  handling  trade  with  Latin-America. 

Gutteridge,  H.  C.  Law  relating  to  "received  for  shipment"  bills  of  lading.  Econo- 
mica,  Jan.,  1922.  Pp.  11.  Gives  legal  status  of  "received  for  shipment"  bills  of 
lading  in  Great  Britain. 

Horst,  E.  C.  Reorganization  of  America's  commerce.  Annalist,  Jan.  2,  1922.  Pp. 
3.  "Proposes  to  demonstrate  that  with  but  few  exceptions  our  foreign  trade  is  the 
diseased  portion  of  our  business"  and  that  "in  properly  planned,  greatly  reduced 
foreign  trade,  both  exports  and  imports,  is  to  be  found  the  solution  of  America's 
present  serious  problems  in  unemployment,  farm  and  factory  production,  domestic 
commerce  and  finance." 

Maini,  a.  D.  O.  Organizacion  internacional  del  comercio  (continued).  Rev.  Econ. 
de  Argentina,  Nov.,  1921.  Pp.  9.  Continuation  of  previous  article  upon  interna- 
tional commercial  organization,  dealing  with  the  Edge  law  and  its  operation  and 
concluding  with  reference  to  International  Chamber  of  Commerce. 

MuRCHisoN,  C.  T.  The  latest  work  on  price  maintenance.  Annalist,  Feb.  13,  1922. 
P.  1.  Describes  present  legal  status  of  price  maintenance,  giving  special  atten- 
tion to  supreme  court  decision  in  Beechnut  case. 

Payen,  E.  Le  jute:  sa  production  et  ses  prix.  L'Econ.  Franc,  Mar.  4,  1922.  Pp. 
2.    Statistical  survey  of  the  jute  industry. 


354  Pn-iodic(iIs  [June 

Williams.  J.  H.  German  trade  and  tlu  reparation  pat/ments.  Journ.  Am.  Bankers 
Assoc.  Mar..  1922.  Pp.  5.  '•Substantial  payments  not  likely  until  her  pre-war 
eastern  European  markets  are  opened  up."" 

Petroleum  production.  Commerce  Mo.,  Feb.,  1922.  Pp.  7.  Condensed  statistical 
report  upon  petroleum  production  of  the  world  with  particular  reference  to  the 
United  States. 

Public  Utilities 

(Abstracts  by  Charles  S.  Morgan) 

Ayleswohth.  M.  H.  Evohition  of  interconnected  power  lines  and  effect  on  utility 
reputation.  Elec.  World,  Feb.  18,  1922.  Pp.  2.  Greater  territorial  spread  of 
electric  utilities  has  rendered  "home  rule"'  impracticable.  State  regulation  should, 
however,  be  "progressive""  rather  than  "merely  corrective"  in  character. 

Bahtlett,  L.  Municipal  enterprise.  Pacific  Municipalities,  Feb.,  1922.  Pp.  10. 
Reasons  advanced  by  mayor  of  Berkeley,  Calif.,  why  efforts  being  made  in 
California  to  develop  hydro-electric  projects  by  public  means,  through  a  state 
water  and  power  commission,  should  be  given  general  support. 

Bauee.  J.  Deadlock  in  public  utiliti/  regulation.  V,  The  right  of  cities  to  appear 
for  the  people  in  public  utUity  actions.  Nat.  Munic.  Rev.,  Mar.,  1922.  Pp.  3. 
The  right  of  cities  to  appear  before  state  commissions  in  behalf  of  the  general 
bodv  of  consumers,  which  was  denied  in  a  recent  Xew  York  case,  should  be  firmly 

established  by  such  amendment  of  the  law  as  is  necessary. 

Beckett.  E.  J.  Financina  the  biggest  job  facing  California.  Gen.  Elec.  Rev., 
Mar.,  1922.  Pp.  5.  How  a  billion  dollars  will  be  raised  for  hydro-electric  develop- 
ments west  of  Rocky  Mountains  in  next  ten  years. 

Beabaxt.  E.  J.  VahMtion  of  public  utilities  for  taxation.  Elec.  Ry.  Journ.,  Apr.  8, 
1922.  Pp.  3.  Statistician  of  Wisconsin  Tax  Commission  explains  methods  used 
in  valuation  of  public  utilities  in  that  state.  Fair  value  of  rate  making  is  not  a 
valuation  but  a  finding  of  cost  or  investment,  while  for  purposes  of  taxation  the 
market  value — "the  actual  value"" — is  that  which  is  sought. 

Clabk,  H.  C.  The  New  York  transit  plan.  Aera,  Mar.,  1922.  Pp.  2.  Good,  brief 
statement  of  principal  provisions  of  this  plan  and  of  the  individual  likelihood  of 
their  being  realized. 

CoxwAY,  T.,  Jr.  Valuation  for  rate  making.  Aera,  Jan.,  Feb.,  1922.  Pp.  6,  6.  A 
review  of  current  valuation  practice,  with  emphasis  on  necessity  for  fully  protect- 
ing prudent  investments. 

Davies,  W.  a.  Rates  levied  in  various  tozcns,  1921-1922.  Munic.  Journ.  (London), 
Jan.  13,  1922.  Pp.  2.  Annual  statistics  of  tax  rates  and  rates  for  domestic 
supplies  of  gas,  electricity  and  water  in  some  two  hundred  English  cities. 

Edgeetox,  E.  O.  Municipal  utility  regulation.  Gas  Age-Record,  Feb.  4,  1922. 
Pp.  2.  The  conditions  which  prompted  state  regulation  of  private  utilities  now 
prompt  and  require  such  regulation  of  municipally  owned  utilities. 

FaiDAT,  D.  ^71  extension  of  value  theory.  Quart.  Journ.  of  Econ.,  Feb.,  1922. 
Pp.  23.  Value  theory  should  be  extended  to  embrace  an  explanation  of  certain 
pecuniary  valuations  which  are  independent  of  the  market  and  go  beyond  a  price 
theory.  One  class  of  such  pecuniary  valuations  relates  to  the  valuation  of 
property  for  rate-making  purposes.  Need  for  recognition  of  fact  that  value  in 
this  case  is  "an  entirely  new  and  distinct  value,""  and  one  "\vhich  shall  express  in 
pecuniary  terms  all  the  equitable  considerations  bearing  upon  the  determination 
of  the  mutual  rights  of  public  and  owners."' 

Jeffeby,  R.  T.  Publicly  owned  and  operated  power  plants.  Pacific  Municipalities, 
Feb.,  1922.  Pp.  7.  Explanation  of  development  of  and  results  accomplished  by 
Ontario  Hvdro-Electric  Power  Commission. 


1922]  Public  Utilities  355 

JoHxsox,  F.  B.  John  H.  Madden — whoever  he  may  be.  New  Repub.,  Apr.  19, 
1922.  Pp.  3.  Chief  engineer  of  New  York  Transit  Commission  recommends  use 
of  "original  cost  less  the  expenditures  necessary  to  put  the  property  in  first-class 
operating  condition"  as  fair  basis  of  valuation  of  New  York  traction  properties. 

MuEPHY,  E.  J.  Operating  conditions  improving.  Aera,  Feb.,  1922.  Pp.  4.  Sta- 
tistics here  presented  show  a  considerable  increase  in  net  income  and  a  moderate 
decline  in  operating  ratios  of  64  electric  railway  companies  reported  on.  "Costs 
of  operation  are  decreasing  faster  than  revenues,  even  in  a  period  of  shrinking 
traffic." 

Reed,  D.  A.  Hozv  a  municipal  plant  kept  down  the  cost  of  gas  and  water.  Am. 
City,  Apr.,  1922.  Pp.  2.  Statement  of  reasons  for  the  success  achieved  in  opera- 
tion of  municipal  gas  and  water  plant  at  Duluth. 

Shoup,  p.  There  can  be  no  coordination.  Aera,  Apr.,  1922.  Pp.  6.  One  of  a 
number  of  discussions  by  utility  operators  of  place  of  motor  bus.  Experience  in 
California  said  to  have  shown  that  coordination  between  bus  and  electric  railways, 
other  than  the  rendering  of  auxiliary  service  where  electric  railways  for  time 
being  can  not  extend  their  lines,  is  impossible,  owing  to  destructively  competitive 
character  of  the  service  rendered  by  the  two  agencies. 

SiMMOx,  K.  A.  Trackless  transportation  versus  rail  transportation.  Elec.  Ry. 
Journ.,  Feb.,  11,  1922.     Pp.  4.     Advantages  and  disadvantages  of  each  type. 

TuEXER,  D.  L.  How  can  the  New  York  transit  problem  be  solved.  Elec.  Ry.  Journ., 
Feb.  18,  1922.  Pp.  3.  Development  of  New  York  railways  has  in  past  followed 
"traffic  in  sight"  rather  than  "area  served."  A  coordinated  system,  publicly 
owned  but  privately  operated,  and  a  careful  laying  out  of  new  lines,  will  solve  the 
problem. 

Whitmax,  E.  B.  Coordination  of  service.  Aera,  Mar.,  1922.  Pp.  6.  Member  of 
Maryland  Public  Service  Commission  advises  the  existing  transportation  agency 
in  any  locality  to  develop  a  coordinated  system,  with  busses  and  trackless  trolleys, 
if  necessary,  rather  than  to  allow  such  development  to  be  undertaken  by  an  out- 
side agency.  Citizens  of  an  undeveloped  section  might  well  protect  electric  rail- 
way against  loss  for  a  stated  period. 

WooLFOLK,  W.  G.  The  preparation  and  presentation  of  rate  cases  before  com- 
missions. Am.  Gas.  Assoc.  Mo.,  Dec,  1921.  Pp.  10.  A  deftly  put  criticism  of 
the  work  of  the  accountant,  the  economist,  the  engineer  and  the  lawyer  in  rate 
cases.  The  existing  indefiniteness  of  principle  and  lack  of  coordination  in  prac- 
tice must  be  overcome  if  a  proj>er  presentation  of  the  basic  elements  of  the  utilities 
case  is  to  be  made. 

American  Gas  Association — current  list  no.  50.  Am.  Gas.  Assoc.  Mo.  Mar.,  1922. 
Pp.  3.  One  of  monthly  lists  of  changes  in  gas  rates  in  American  towns  and  cities. 
In  this  instance  the  changes  are  nearly  all  decreases. 

Courts  vs.  Commissions.  Elec.  Ry.  Journ.,  Feb.  11,  1922.  P.  1.  Portions  of  report 
of  judiciary  committee  to  New  York  Legislature,  dated  Jan.  4,  1922,  in  which 
strong  condemnation  is  visited  upon  tendency  of  state  utility  commissions  to 
make  final,  judicial  determinations. 

Eight-cent  law  declared  void.  Gas  Age-Record,  Mar.  11,  1922.  Pp.  2.  The  New 
York  eight-cent  gas  law  of  1906  held  by  United  States  Supreme  Court  to  be  con- 
fiscatory as  to  gas  sold  during  1918  and  1919.  Impounded  funds,  aggregating 
$20,000,000,  released. 

Energy  output  for  1921  estimated  at  43^00,000,000  k.  w.  h.  Elec.  World,  Jan.  7, 
1922,  Pp.  3.  Brief  presentation  of  statistics  of  operation  of  central  electric  sta- 
tion industry  for  1921,  showing,  among  other  things,  a  decline  of  about  ten  per 
cent  in  operating  ratio  as  compared  with  1920. 

Gas  industry  statistics  for  1920.  Gas  Age-Record,  Feb.  4,  1922.  Pp.  1.  Brief 
summary  of  more  complete  statistics  prepared  by  American  Gas  Association. 


356  Periodicals  [June 

Hydro-electric  nt/ntem  of  Province  of  Ontario  investigated.     Elec.  World,  Mar.  11, 

1921.  Pp.  4.  Report  by  W.  S.  Murray  on  Ontario's  extensive  hydro-electric 
undertaking,  recently  made  public  by  National  Electric  Light  Association,  is 
unfavorable. 

Improved  financial  conditions  established.  Elec.  Ry.  Journ.,  Jan.  7,  1922.  Pp.  4. 
Maximum  extent  of  railway  receiverships  occurred  in  1919.  List  of  1921  receiver- 
ships and  comparison  with  earlier  years. 

19S1.  Electrician  (London),  Jan.  6,  1922.  Pp.  4.  A  survey  of  developments- 
technical,  legal,  regulatory — in  electricity  supply  industry  in  England  in  1921. 

Per  capita  tise  of  electricity,  gas  and  water;  general  averages  of  such  use  classified 
by  size  of  city  and  geographical  location.     Public  Works,  Oct.  22,  1921.     Pp.  2. 

San  Francisco  municipal  railway  gets  undeserved  praise.  Public  Service,  Manag., 
Feb.,  1922.     Pp.  2. 

Toronto  takes  over  street  railways.  Elec.  Ry.  Journ.,  Mar.  25,  1922.  Pp.  7.  De- 
scription of  property  taken  over  by  city  in  September,  1921. 

Accounting 

(Abstracts  by  Martin  J.  Shugrue) 

Bailey,  M.  Accounting  for  depletion  of  minerals.  Journ.  Account.,  Mar.,  1922. 
Pp.  9. 

Bennett,  V.  E.  Naval-stores  accounting.  Journ.  Account.,  Feb.,  1922.  Pp.  10. 
Description  and  classification  of  accounts. 

Bergman,  N.  B.  Accounting  for  pig  iron  production.  Journ.  Account.,  Feb.,  1922. 
Pp.  10.     Brief  description  of  operations  and  cost  data  of  a  blast  furnace. 

Bliss,  J.  H.  Costs  and  accounting  methods  in  the  packing  industry.  Administra- 
tion, Mar.,  1922.  Pp.  12.  Clear  explanation  illustrated  with  diagrams  and  math- 
em,atical  examples. 

BtTRLEiGH,  N.  G.  The  effect  of  burden  rate  on  sales  and  manufacturing  programs. 
Administration,  Mar.,  1922.  Pp.  4.  Concrete  problem  and  solution  relating 
overhead  to  the  amount  of  production.     Illustrated  with  chart  and  actual  figures. 

Castenholz,  W.  B.  Cost  of  production  standards.  Journ.  Account.,  Feb.,  1922. 
Pp.  6.     Uses  of  cost  and  production  standards. 

Fritz,  A.  E.     Municipal  accounting.     Minnesota  Munic,  Oct.,   1921.     Pp.   6. 

Fitch,  S.  G.  H.     Deflation  in  relation  to  cost  accounting.    Journ.  Account.,  Jan., 

1922.  Pp.  11.  Why  it  is  good  business  to  retain  a  cost  department  under  present 
conditions  of  depression. 

Greenwood,  G.  W.  On  what  should  selling  prices  be  based?  Administration,  Mar., 
1922.     Pp.  2. 

Hall,  A.  D.  Simple  cost  accounts  for  fanners.  Journ.  Min.  Agrl.  (London),  no.  3, 
1921.     Pp.  8. 

Hammett,  C.  E.  The  accounting  of  banking.  Administration,  Jan.,  1922.  Pp.  10. 
Describes  how  transactions  are  handled  and  recorded  by  the  various  departments 
of  a  large  bank. 

Henderson,  T.  B.  G.  Yield  on  plant  investment.  Administration,  Mar.,  1922.  Pp.  5. 
How  to  correctly  figure  percentage  of  profit  on  plant  investment. 

Ingham,  II.  M.  Accounting  for  contracts.  Journ.  Account.,  Feb.,  1922.  Pp.  3. 
How  to  handle  payments  received  on  account  of  uncompleted  contracts. 

Jackson,  J.  H.  Choosing  a  profession — accounting.  Journ.  Account.,  Mar.,  1922. 
Pp.  5. 


1922]  Labor  and  Labor   Organizations  357 

Lahkix,  W.  W.  Cocoanuf  oil  manufacturing.  Journ.  Account.,  Mar.,  1922.  Pp.  9. 
General  accounting  requirements. 

Manxixg,  a.  B.  Fixed  property  accounting.  Administration,  Jan.,  1922.  Analysis 
of  plant  and  equipment  values  and  the  distribution  of  depreciation.  Concretely 
presented  and  well  illustrated  with  forms  and  exhibits.  Ibid.,  Mar.,  1922.  Illus- 
trated with  numerous  forms  of  ledger  accounts  and  other  records. 

Newmax,  E.  W.  Present-day  costing  problems.  (1)  Costing  accounts:  their  place 
and  value  in  business  administration.  Bus.  Org.  and  Manag.  (London),  Oct., 
1921.  Pp.  12.  Shows  why  cost  accounting  is  of  far  greater  value  than  the 
ordinary  form  of  financial  accounts,  which  have  serious  limitations. 

Oewik,  C.  S.  The  control  of  farm  management  and  some  fundamental  principles  in 
agricultural  costing.     Journ.  Min.  Agri.   (London),  no.  3,  1921.     Pp.  6. 

Paton,  W.  a.  Inventory  valuation.  Administration,  Mar.,  1922.  Pp  12.  Diffi- 
culties and  procedure  in  taking  an  inventory.  Rough  and  ready  methods  no  longer 
satisfactory. 

Prageh,  M.  E.     Capital  assets,  capital  gains  and  losses  under  the   revenue   law  of 

1921.  Administration,  Mar.,  1922.     Pp.  3. 

Ross,  N.  F.  Bad  debts  under  the  new  tax  law.  Annalist,  Jan.  16,  1922.  P.  1.  The 
income  tax  law  now  allows  deductions  for  doubtful  accounts  although  they  may 
not  have  proved  as  yet  an  actual  loss. 

Saxiers,  E.  a.  Should  obsolescence  be  capitalized.  Journ.  Account.,  Feb.,  1922. 
Pp.  10.  Discussion  of  the  accounting  principles  involved  in  dealing  with  obsoles- 
cence. 

Staubach,  C.  p.  Apportioning  sales  overhead.  Bull.  Taylor  Soc,  Feb.,  1922.  Pp.  7. 
Territory  valuation  (the  quota)  superior  to  territory  sales  as  a  basis  of  appor- 
tionment. 

Stock,  A.  F.  Advantages  and  disadvantages  of  the  estimated  cost  system.  Adminis- 
tration, Jan.,  1922.  Pp.  5.  The  cost  accountant's  problem  today  is  not  to  preach 
the  needs  of  cost  accounting,  but  rather  to  preach  the  simplest  system  to  get 
results. 

Thibodeatt,  T.  a.  Allocation  of  costs  to  specific  products  in  the  petroleum  refining 
industry.  Pace  Student,  Feb.,  1922.  Pp.  4.  Presents  a  method  of  allocating 
costs  to  the  various  products  obtained  from  the  refining  of  crude  petroleum. 

Accounting  for  electric-light  and  power  industries.  Journ.  Account.,  Mar.,  1922. 
Pp.  10.  Shows  wherein  the  accounts  of  the  electric  light  and  power  industry 
follow  the  ordinary  accounting  procedure  of  any  simple  type  of  factory  and 
wherein  they  differ. 

Accounting  for  special  industries  and  trades.  Lib.  and  Bureau  of  Information, 
special  bull.  no.  11,  Dec,  1921.     Pp.  17. 

Cost  periods.  Administration,  Mar.,  1922.  Pp.  2.  Advantages  and  disadvantages 
of  four-week  period. 

The  New  York  valuation  discussion  has  now  begun.     Electric  Ry.  Journ.,  Feb.  25, 

1922.  Pp.  2. 

Labor  and  Labor  Organizations 

(Abstracts  by  David  A.  McCabe) 

Adler,  E.  The  Works  Councils  act  in  Australia.  Intern.  Lab.  Rev.,  Mar.,  1922. 
Pp.  26.  The  author  is  Ministerial  Councillor  in  the  Ministry  for  Social  Adminis- 
tration.    Holds  that  the  difficulties  which  have  appeared  will  be  overcome. 

BLAiTKEiTHOBir,  H.     Solvation  vs.  guns  in    West    Virginia.     New   Repub.,   Feb.   15, 


358  Periodicals  [June 

1922.     Pp.  2.     Comment   on   the    report   of   the   Senate   Committee   on    Labor   and 
Education. 
Brophy,  J.     The   miners'   program.     Survey,    Mar.   2.5,    1922.     Pp.    4.     Author    is    a 
district  president  of  the   United  Mine   Workers. 

Brisman,  a.  Attafimarslagen.  Ndgrn  eksonomiska  .ti/npiinkfer.  Ek.  Tids.,  no. 
12,  1921.     Pp.  10.     Docs  not  consider  the  eight-hour  day  economically  desirable. 

BtJDisH,  J.  M.  Piece  ■work — opening  wedge  to  the  sweatshop.  Labor  Age,  Dec,  1921. 
Pp.  2.     Has  reference  to  the  ladies'  garment  industry  in  New  York. 

BuRNETT-HiiRST,  A.  R.  Snggestions  for  labor  legislation  in  India.  Indian  Journ. 
Econ.,  Dec,  1920.  Pp.  18.  Made  with  particular  reference  to  the  application  of 
the  draft  conventions  adopted  by  the  Washington  Conference  of  the  International 
Labor  Organization  to  India. 

Catchings,  W.  0^^r  common  enterprise — a  wag  out  for  labor — and  capital.  At- 
lantic Mo.,  Feb.,  1922.  Pp.  12.  Fair  terms  of  employment  are  questions  of  fact, 
to  be  determined  in  joint  conference;  the  terms  should  not  be  left  to  collective 
bargaining. 

Cestre,  C.     The  split  in  French  labor.     Survey,  Jan.  14,  1922.     Pp.  2. 

CiiENERYj  W.  L.  The  President's  Conference  and  unemployment  in  the  United 
States.     Intern.  Lab.  Rev.,  Mar.,  1922.     Pp.  19. 

Cole,  G.  D.  H.  British  labor  solz'es  the  housing  problem — workers'  building  guilds 
cut  high  costs  by  doing  jobs  themselves.     Labor  Age,  Dec,  1922.     Pp.  2. 

Building  houses  without  private  profit.     Labor  Age,  Jan.,  1922.     Pp.  3. 


The  guild  movement. 
.     A  final  word  on  the  building  guilds.     Labor  Age,  Feb.,  1922.     Pp.  2. 


Commons,  J.  R.  VnempJoyment  prevention.  Am.  Labor  Legis.  Rev.,  Mar.,  1922. 
Pp.  10.  Unemployment  insurance  is  the  only  way  to  place  the  responsibility  on 
the  business  men  who  alone  are  in  a  position  to  prevent  it. 

Das,  R.  K.     Rise  of  factory  labor  in  India.     Mo.  Labor  Rev.,  Mar.,  1922.     Pp.  20. 

Dennison,  H.  S.  Depression  insurance:  a  suggestion  to  corporations  for  reducing 
unemployment.  Am.  Labor  Legis.  Rev.,  Mar.,  1922.  Pp.  6.  Description,  by  the 
president  of  the  company,  of  the  plan  of  the  Dennison  Company  for  regularizing 
employment. 

.     Regularization   of   industry    against   unemployment.     Annals    Am.    Ac. 

Pol.  and  Soc  Sci.,  Mar.,  1922.     Pp.  4. 

De  Silver,  A.  The  injunction — a  weapon  of  industrial  power.  Nation,  Jan.  25, 
1922.     Pp.  3.     An  unfavorable  review  of  recent  decisions.* 

DiETz,  P.  E.     The  builders'  guild  of  Cincinnati.     Am.  Fed.,  Mar.,  1922.     Pp.  3. 

Dobbin,  M.     Labor  unrest  in  South  America.     Mo.  Labor  Rev.,  Jan.,  1922.     Pp.  21. 

Edstrom.  The  international  labour  conferences.  Intern.  Labor.  Rev.,  Mar.,  1922. 
Pp.  4.  Contains  some  unfavorable  criticism  of  the  International  Labour  Office. 
The  author  was  employers'  delegate  from  Sweden  and  one  of  the  vice-presidents 
of  the  third  conference. 

Feis,  IL     Kansas  miners  and  the  Kansas  court.     Survey,  Feb.  25,  1922.     Pp.  6. 

FiTcii,  J.  A.  Shall  strikes  become  crimes?  The  "industrial  court"  movement  and 
what  it  means.     Labor  Age,  Mar.,  1922.     Pp.  3. 

Fox,  F.  The  trade  unions  and  the  mischief  makers.  National  Rev.,  Mar.,  1922. 
Pp.  9.  Legal  j)rivileges  given  to  Britisli  unions  for  collective  bargaining  purposes 
are  used  to  j)romote  revolution. 

GoMi'ERS,  S.  Abolish  unemployment — it  can  and  must  be  done;  labor's  remedy. 
Am.  Fed.,  Jan.,  1922.     Pp.  13. 


1922]  Labor  and   Labor   Organizations  359 

How   malignity    hnn   found   its    Waterloo — McAdoo    disproves    railroad 


manager's  falsifications.     Am.   Fed.,  Mar.,  1922.     Pp.  16.     A  review  of  the  labor 
policy  of  the  Railroad  Administration  during  Mr.  McAdoo's  incumbency. 

Farm    and   factory   workers    shall    not    be    drawn   into    hostile    camps. 


Am.  Fed.,  Mar.,  1922.     Pp.  10.     The  position  of  organized  labor  on  issues  raised 
in  the  recent  agricultural  conference  at  Washington. 

Greenwood,  A.  How  British  labor  plans  to  curb  unemployment.  Labor  Age, 
Mar.,  1922.     Pp.  3. 

Griffith,  S.     The  German  trade  union  bloc.     Survey,  Feb.  18,  1922.     Pp.  2. 

Haring,  H.  a.  What  is  the  "check-of"?  Annalist,  Feb.  20,  1922.  Pp.  2.  Strongly 
opposed  to  this  system  in  coal-mining. 

Henderson,  A.  The  character  and  policy  of  the  British  Labour  party.  Intern. 
Journ.  of  Ethics,  Jan.,  1922.     Pp.  5. 

HowAT,  A.  The  Howat  case — Kansas  stands  for  freedom.  Labor  Age,  Dec,  1921. 
Pp.  2. 

JoTJHAUx,  L.  The  work  of  the  Geneva  conference.  Intern.  Lab.  Rev.,  Mar.,  1922. 
Pp.  4.  The  author  is  General  Secretary  of  the  Confederation  General  du  Travail, 
and  was  workers'  delegate  from  France  and  one  of  the  vice-presidents  of  the 
conference.  Holds  that  the  International  Labor  Organization  deserves  the  confi- 
dence of  the  workers. 

Kanttngo,  S.  V.  Suggestions  for  the  improvement  of  the  conditions  of  Indian 
labor.  Indian  Journ.  Econ.,  Dec,  1920.  Pp.  11.  Specific  suggestions  by  the 
Secretary  of  Commerce  and  Industry  Department,  Indore  State. 

Lackland,  G.  Colorado  tries  to  outlaw  strikes — how  the  industrial  commission 
works.     Labor  Age,  Mar.,  1922.     Pp.  3. 

.     The    black  avalanche.     Survey,   Mar.   25,   1922.     Pp.    7.     Conditions   in 

the  West  Virginia  coal  fields. 

Lane,  W.  D.  West  Virginia.  Survey,  Feb.  4,  1922.  Pp.  2.  Comment  on  the 
report  of  the  Senate  Committee  on  Labor  and  Education. 

Lauck,  W.  J.  The  coal  crisis — tlie  demands  of  the  miners.  Survey,  Mar.  25,  1922. 
Pp.  2. 

.     What  the  railway  workers  face.     Labor  Age,  Jan.,  1922.     Pp.  2. 

Lesher,  C.  E.  The  coal  crisis — the  position  of  the  operators.  Survey,  Mar.  25, 
1922.     Pp.  2. 

Low,  C.  E.  India  and  the  Washington  Conference.  Intern.  Lab.  Rev.,  Jan.,  1922. 
Pp.  10.  The  difficulties  in  applying,  and  the  action  of  the  government  on,  the 
recommendations  and  draft  conventions. 

Lyons,  H.  W.  A  subsistence  wage.  Indian  Journ.  Econ.,  Dec,  1920.  Pp.  11. 
The  laboring  classes  of  Indore  are  not  receiving  a  subsistence  wage  according  to 
the  standards  here  given. 

McCauley,  T.  W.  Industrial  arbitration  in  Queensland.  Intern.  Lab.  Rev.,  Mar., 
1922.     Pp.  25.     Issues  and  results.     The  author  is  president  of  the  court. 

MacGibbon,  D.  a.  The  revolutionary  cycle  in  syndicalism.  Journ.  Pol.  Econ.,  Feb., 
1922.  Pp.  11.  The  development  of  moderate  policies  in  the  Confederation 
G6n6ral  du  Travail  and  the  rise  of  a  new  revolutionary  party  in  France. 

Mack,  W.  J.  Safeguarding  employment :  the  "Cleveland  plan"  of  unemployment 
compensation.  Am.  Labor  Legis.  Rev.,  Mar.,  1922.  Pp.  6.  Account  of  plan  of 
reciprocal  guarantees  of  j)roduction  and  employment  adopted  l)y  employers  and 
the  union  in  ladies'  garment  industry  of  Cleveland.  The  author  is  the  impartial 
chairman  in  the  industry. 


360  Periodicals  [June 

Madia,  G.  L'aumento  del  salari  dal  1914  «'  19SJ.  Glorn.  d.  Econ.,  Nov.,  1921.  Pp. 
13.  The  increase  in  wages  in  Italy  in  the  war  years  and  after  was  not  disporpor- 
tionate  to  the  increase  in  prices. 

Manly,  B.  M.  Arbitration  and  industrial  justice.  Survey,  Apr.  8,  1922.  Pp.  3. 
Unfavorable  to  arbitration. 

Mills,  J.  S.  Unemploi/ment  and  the  empire.  Contemp.  Rev.,  Mar.,  1922.  Pp.  7. 
Surplus  population  of  Great  Britain  should  be  transferred  to  the  dominions. 

Mitchell.  T.  W.,  editor.  The  determination  of  wage-rates.  Annals  Am.  Acad. 
Pol.  and  Soc.  Sci.,  Mar.,  1922.  Pp.  82.  A  symposium.  There  are  four  papers  on 
special  plans  for  wage  determination  and  nine  papers  on  basic  principles. 

MoxTAGTTE,  R.  The  Kansas  Industrial  Court.  Pacific  Rev.  Dec,  1921.  Pp.  10. 
Answers  objections  to  the  law. 

MoTT,  R.  L.  The  political  theory  of  syndicalism.  Pol.  Sci.  Quart.,  Mar.,  1922. 
Pp.  16.  Includes  a  discussion  of  the  present  position  of  the  Confederation  General 
du  Travail  and  the  functions  of  the  Confederation  in  the  proposed  syndicalistic 
state. 

Murray,  P.  Unemployment  in  the  coal  industry.  Am.  Labor  Legis.  Rev.,  Mar., 
1922.  Pp.  4.  The  extent  of  unemployment  and  suggestions  for  meeting  the 
problem.     The  author  is  vice-president  of  the  United  Mine  Workers. 

Naxda,  G.  L.  Labor  unrest  in  India.  Indian  Journ.  Econ.,  Dec,  1920.  Pp.  21. 
Its  nature  and  causes  and  suggestions  for  its  cure. 

Olivetti,  G.     Collective  agreements  in  Italy.     Intern.  Lab.  Rev.,  Feb.,  1922.     Pp.  20. 

Parsons,  F.  W.  The  coal  outlook.  Am.  Rev.  Rev.,  Apr.,  1922.  Pp.  5.  Unfavor- 
able to  the  miners'  position. 

PiRou,  G.  The  theory  of  the  collective  labour  contract  in  France.  Intern.  Lab. 
Rev.,  Jan.,  1922.  Pp.  15.  The  existing  status  of  collective  agreements  in  the  law 
and  the  proper  degree  of  state  intervention. 

Ripley,  W.  Z.  Longshore.  Survey,  Feb.  25,  1922.  Pp.  4.  Conditions  and  labor 
problems  among  the  longshoremen. 

Ryan,  J.  A.  A  bill  of  rights  for  labor.  Catholic  Charities  Rev.,  Mar.,  1922.  Pp.  3. 
Highly  favorable  review  of  the  industrial  code  included  in  the  Kenyon  bill  for 
the  establishment  of  a  tribunal  in  coal-mining. 

.     Labor  and  the  law.     Catholic  Charities  Rev.,  Jan.,  1922.     Pp.  5.     The 

courts  do  not  yet  accord  labor  organizations  full  justice  in  interpreting  general 
constitutional  limitations  and  the  common  law  as  to  conspiracy. 

RowE,  J.  W.  F.  The  ball  warpers:  the  policy  of  their  unions  and  its  results. 
Economica,  Jan.,  1922.  Pp.  5.  Study  of  the  results  of  the  union  policies  as  to 
wages  and  entrance  to  the  trade  in  a  small  branch  of  the  British  cotton  industry. 
Concludes  that  wages  were  artificially  raised. 

RowNTEEE,  R.  S.  Unemployment  and  its  alleviation.  Annals.  Am.  Acad.  Pol.  and 
Soc.  Sci.,  Mar.,  1922.     Pp.  7. 

Salomon.  A.  Women  in  German  trade  unions.  Forum,  Feb.,  1922.  Pp.  8.  Rea- 
sons for  the  great  increase  in  the  number  and  membership  of  women's  unions. 

Saposs,  D.  J.     The  packers  bnak  the  peace.     Labor  Age,  Jan.,  1922.     Pp.  3. 

Sayre,  F.  B.     The  picketing  decisions.     Survey,  Jan.  7,  1922.     Pp.  3. 

ScHLESiNOER,  B.  The  issues  in  the  big  cloak  strike.  Labor  Age,  Dec,  1921.  Pp.  2. 
The  author  is  president  ol'  the  Ladies'  Garment  Workers  Union. 

Searles,  E.  The  Ilowat  cas< — the  interjiotional's  position.  Labor  Age,  Dec,  1921. 
Pp.  2.     Author  is  editor  of  the  United  Mine  Workers'  Journal. 


1922]  Labor  and  Labor  Organizations  361 

Shattcck,  H.  L.  Vnemploijment  insurance  legislation  in  Massachusetts.  Am.  Labor 
Legis.  Rev.,  Mar.,  1922.  Pp.  -5.  Outline  of  a  bill  and  an  argument  for  it,  by  the 
member  of  the  legislature  who  introduced  it. 

Shaw,  S.  A.  "Hitting  the  trail"  in  industry — an  appraisal  of  the  golden  rule  prin- 
ciple as  applied  in  the  Nash  clothing  factory.     Survey,  Mar.  18,  1922.     Pp.  5. 

Shields,  A.     Fighting  the  industrial  court  in  Kansas.     Labor  Age,  Feb.,  1922.  Pp.  3. 

Stolbehg,  B.     The  stock-yards  strike.     Nation,  Jan.  25,  1922.     Pp.  2. 

.     The  tragedy  of  coal.     Nation,  Mar.  22,  1922.     Pp.  3. 

Trtok,  F.  G.  and  McKexxey,  W.  F.  The  broken  year  of  the  bituminous  miner. 
Survey,  Mar.  2.5,  1922.     Pp.  5. 

Waggamax,  M.  T.  Efforts  to  regularize  employment  in  seasonal  trades.  Mo.  Labor 
Rev.,  Jan.,  1922.     Pp.  12. 

Wai-lixg,  W.  E.  British  labor's  proposed  solution  of  the  unemployed  problem. 
Am.  Fed.,  Jan.,  1922.     Pp.  3. 

Warxee,  G.  N.  The  problem  of  fatigue  and  output.  Bus.  Org.  and  Manag. 
(London),  Oct.,  1921.     Pp.  4. 

Weld,  L.  D.  H.  and  S.\poss,  D.  J.  Two  sides  of  the  packers'  controversy.  Survey 
Jan.  14,  1922.     Pp.  2. 

West,  G.  P.     American  labor's  political  strategy — a  failure.     Nation,  Mar.  29,  1922. 

Pp.  2. 
WoLMAJf,  L.     Evading  the  coal  question.     New  Repub.,  Mar.  29,  1922.     Pp.  2. 

Woods,  A.  The  unemployment  emergency.  No.  Am.  Rev.,  Apr.,  1922.  Pp.  10. 
Outlines  some  of  the  methods  adopted  to  meet  the  emergency.  The  author  is 
chairman  of  the  Committee  on  Civic  and  Emergency  Measures  of  the  Presidents' 
Unemployment  Conference. 

Action  of  government  in  India  on  labor  problems.     Labor   Gaz.    (Canada),   Dec, 

1921.     Pp.  2. 
An  arbitrary  arbitrator.     Survey,  Feb.  11,  1922.     Pp.  2.     Adverse  criticism  of  Judge 

Landis'  course  and  decision  in  the  Cliicago  building  trades  arbitration. 

Bibliography  no.  18:  unemployment  {since  1908).  Bull.  British  Lib.  of  Pol.  Sci., 
Feb.,  1922.     Pp.  7. 

The  British  government  and  recommendations  of  International  Labour  Organization 
— action  on  the  Washington  and  Genoa  conventions.  Lab.  Gaz.  (Canada),  Dec, 
1921.     Pp.  3. 

Decision  of  the  Railroad  Labor  Board — clerks.     Mo.  Labor  Rev.,  Mar.,  1922.     Pp. 

11. 
Factory   inspectors'  reports   on   operation  of   German   works    councils.     Mo.    Labor 

Rev.,  Feb.,  1922.     Pp.  12. 

Hours  of  labor  in  the  mercantile  marine.     Intern.  Lab.  Rev.,  Feb.,  1922.     Pp.  8. 

Important  judicial  decision  respecting  picketing — decisions  of  the  Superior  Court 
of  Quebec  and  the  Supreme  Court  of  the  United  States.  Lab.  Gaz.  (Canada), 
Jan.,  1922.     Pp.  10. 

International  labor  conference  at  Geneva.     Mo.  Labor  Rev.,  Jan.,  1922.     Pp.  6. 

International  survey  of  the  growth  of  trade  unionism  since  1913.  Mo.  Labor  Rev., 
Jan.,  1922.     Pp.  11. 

Labour  conditions  in  Japanese  coal  mines.     Intern.  Lab.  Rev.,  Feb.,  1922.     Pp.  14. 

Labour  Legislation  in  Canada  in  1921.     Lab.  Gaz.   (Canada),  Feb.,  1922.     Pp.  8. 

Labour  legislation  in  1921.     Lab.  Gaz.  (London),  Dec,  1921.     Pp.  2. 


362  Periodicals  [June 

League  of  naflons  international  labour  organization,  third  general  conference.  Lab. 
Gaz.  (Canada),  Jan.,  1922.     Pp.  20. 

Methods  of  adjustment  of  industrial  disputes  in  Germany.  Intern.  Lab.  Rev.,  Jan., 
1922.     Pp.  15. 

Progress  of  the  labour  movement  in  Japan.     Intern.  Lab.  Rev.,  Mar.,  1922.     Pp.  18. 

Railroad  labor  board  decision  on  railroad  shop  rules  and  working  conditions.  Mo. 
Labor  Rev.,  Jan.,  1922.     Pp.  25. 

Report  of  Board  of  Arbitration  in  dispute  between  various  government  railways 
and  certain  employees.  Lab.  Gaz.  (Canada),  Dec,  1921.  Pp.  12.  Issue  was 
whether  the  reduction  granted  by  United  States  Railroad  Labor  Board  should  be 
followed  on  these  Canadian  roads. 

Third  international  labour  conference.     Intern.  Lab.  Rev.,  Feb.,  1922.     Pp.  30. 

Wage  conditions  in  American  agriculture.     Mo.  Labor  Rev.,  Feb.,  1922.     Pp.  4. 

Money,  Prices,  Credit,  and  Banking 

(Abstracts  by  N.  R.  Whitney) 

Annis,  C.  Currency  and  credit  problems.  Bankers'  Map.  (London),  Dec,  1921. 
Pp.  13.  Correct  remedy  for  the  economic  crisis  in  England  lies  in  the  return  to 
the  pre-war  gold  standard. 

Akerman,  G.  Inflation,  penningmdngd  och  rant  a.  Nat.  ok.  Tids.,  no.  9,  1921. 
Pp.  20.  After  an  outlined  study  of  inflation,  money  and  interest,  the  author 
proposes  a  reformulation  of  the  quantity  theory  of  money:  under  otherwise  similar 
circumstances  the  quantity  of  money  and  prices  vary  in  the  same  direction  and 
proportionally. 

Anderson,  B.  M.  Banking  policy  through  the  crisis  and  depression.  Annalist, 
Jan.  9,  1922.     Pp.  2. 

.     Replacing  worthless  currencies,  with  some  comments  on  Mr.   Vander- 

Up's  plan  for  a  reserve  bank  of  Europe.  Econ.  World,  Jan.  14,  1922.  Pp.  3. 
The  Vanderlip  ])lan  criticized  on  the  ground  that  note  issues  would  be  inadequately 
secured  and  that  the  amount  of  capital  required  could  not  be  obtained. 

Arrus,  O.  F.  El  problema  del  cambio  en  el  Peru  y  el  aha  del  cambio  sabre  Nueva 
York.     Rev.  de  Econ.  Argentina,  Jan.,  1922.     Pp.  17. 

Basu,  p.  The  gold  e.rchange  standard  (as  a  remedy  for  the  present  exchange 
debacle  in  Europe).  Journ.  Indian  Econ.  Soc,  Sept.,  Dec,  1921.  Pp.  10,  18. 
Suggests  an  international  exchange  standard  based  upon  gold  reserves  protected 
by  international  guarantee.     For  internal  commerce  token  coins  might  be  used. 

Baudin,  L.  L'or  du  Transvaal.  Rev.  d'Econ.  Pol.,  Jan.-Feb.,  1922.  Pp.  26.  Gold- 
mining  companies  are  in  a  position  to  increase  the  volume  of  production  of  gold 
in  accordance  with  the  demand. 

Baitf.r,  G.  F.  Equalizing  cvchange  duties  to  solve  tariff  problems.  Annalist,  Nov. 
28,  1921.  P.  1.  Values  of  foreign  currencies  are  lower  in  the  United  States 
than  they  are  at  home.  The  difference  works  to  the  disadvantage  of  producers 
of  competing  commodities  in  the  United  States.  It  is  suggested  that  duties  be 
levied  to  the  extent  of  such  differences. 

Bernackh,  G.  Dos  cuestiones  de  actualidnd.  Rev.  Nacional  de  Econ.,  XI,  1921. 
Pp.  13.  They  are — (1)  the  privilege  of  emission  in  the  new  bank  law  of  Spain; 
(2)  the  new  tariff  law  and  its  relation  to  excliange. 

BiLGRAM,  H.  The  <iiiantily  theory  scrutinized.  Journ.  Pol.  Econ.,  Nov.,  1921.  Pp. 
10.  Criticizes  the  mathematical  and  iiistorical  foundations  for  the  quantity  theory. 
Asserts  tliat  the  war  time  price  increase  was  not  due  to  inflation,  and  that  the 
trouble  with  business  now  is  too  little  money. 


1922]  Money,    Prices,    Credit,   and   Banking  363 

Blakewell,  W.  B.  Factors  affecting  the  rate  of  interest  on  real  estate  mortgages. 
Econ.  World,  Dec.  24,  1921.     Pp.  2. 

vox  BoRTKiEwicz,  L.  Neuc  Schriften  iiber  die  Natitr  und  die  Zukunft  des  Geldes. 
Schmollers  Jahrb.,  Jahr^r.  45,  Heft  3,  4,  1921.  Pp.  27,  44.  I,  A  review  of  Elster's 
"Die  Seele  des  Geldes";  of  twelve  essays  dealing  with  the  German  difficulties  as 
related  to  the  theory  of  money  standards  by  Elster;  of  Sinorer's  "Das  Geld  als 
Zeichen";  and  of  Schmidt-Essen's  "Valutafibel".  Elster,  according  to  the  reviewer, 
offers  little  for  the  expert  on  the  theory  of  money.  Singer  is  criticized  as  being 
full  of  errors;  he  is  charged  with  misinterpreting  and  even  misquoting  other 
authorities.  "Valutafiber'  is  intended  as  a  textbook  but  is  useless  for  such 
purposes.  II,  Reviews  the  following:  Kaulla — "Die  Grundlagen  des  Geldwertes"; 
Cohn — "Kann  das  Geld  abgeschafft  werden?";  Engel — "Geldgestaltung  und  Ein- 
kommensgestaltung";  Kerschagl — "Die  Lehre  com  Gelde  in  der  Wirtschaft";  and 
Doring — "Die  Geldtheorien  seit  Knapp".  The  last  is  described  as  a  conscientious 
study  of  the  thought  content  of  German  money  literature  from  190.3  to  1920. 

Bradford,  E.  A.  Denationalizing  our  currency.  Annalist,  Mar.  27,  1922.  Pp.  2. 
Advantages  of  the  par  collection  system  of  the  federal  reserve  banks,  and  a  review 
of  the  opposition  of  the  banks  in  certain  parts  of  the  country  to  the  plan. 

BrxGE,  M.  El  cambio  y  la  crisis.  Rev.  de  Econ.  Argentina,  Dec,  1921.  Pp.  10. 
Contends  that  unfavorable  exchange  promotes  the  well-being  of  the  masses. 

Canna2t,  E.  The  application  of  the  theoretical  apparatus  of  supply  and  demand 
to  units  of  currency.  Econ.  Journ.  (London),  Dec,  1921.  Pp.  9.  An  examina- 
tion of  the  influences  which  affect  the  supply  and  demand  for  money.  A  con- 
tinuance of  rapid  change  of  the  value  of  money  in  either  direction  will  cause  a 
currency  to  go  out  of  use,  since  stability  of  value  is  one  of  the  most  important 
requisites  of  useful  currency. 

CoHX  E.  Oekonomiske  Oversigfer,  1  Juli,  1918—1  April,  1921.  Nat.  ok.  Tids., 
no.  5-6,  1921.  Pp.  22.  Gives  an  account  of  the  Danish  exchange  and  of  finance 
regulations  during  the  period  mentioned. 

Crissinger,  D.  R.  States  have  varied  experiences  under  guaranty  of  bank  deposits. 
Northwestern  Banker,  Apr.,  1922.  Pp.  2.  A  review  of  deposit  guaranty  legisla- 
tion in  North  Dakota,  South  Dakota,  Nebraska,  Washington,  Mississippi,  and 
Oklahoma. 

Daggett,  S.  Hozc  the  modern  iiniversity  trains  future  bankers  and  business  men. 
Northwestern  Banker,  Apr.,  1922.  P.  1.  Tenth  article  in  a  series  written  by 
different  men  describing  the  commerce  departments  in  their  several  universities. 

Dasgupta,  B.  B.  The  problem  of  Indian  exchange.  Journ.  Indian  Econ.  Soc, 
Sept.,  1921.     Pp.  6. 

Davidsox,  D.  Gtddfraagan.  Nat.  ok.  Tids.,  no.  2,  1921.  Pp.  10.  A  study  of  the 
gold  standard  in  the  light  of  recent  experiences. 

Davis,  J.  S.  World  banking,  currency,  and  prices,  1920-1921.  Rev.  Econ.  Stat., 
Sept.,  1921.     Pp.  22. 

Dodge,  H.  J.  Changing  the  fundamental  structure  of  the  federal  reserve  system. 
Annals  Am.  Ac.  Soc.  and  Pol.  Scl.,  Sept.,  1921. 

Elster,  K.  Vom  Werte,  den  das  Geld  nicht  hat.  Jahrb.  f.  Nationalok.  u.  Stat., 
June,  1921. 

Estcourt,  R.  The  relation  of  foreign  exchange  to  currency.  Annalist,  Nov.  21, 
1921.  Pp.  2.  "The  exchange  of  each  country  adjusts  itself  to  the  exchange  of 
other  countries  in  proportion  to  the  dilution  of  its  currency,  currency  being  taken 
to  include  every  form  of  medium  of  exchange  except  gold." 

Foster,  W.  T.  Money  as  suspended  purchasing  poioer.  Annalist,  Mar.  13,  1922. 
Pp.  2.     The  owner  of  money  is  a  holder  of  a  convenient  store  of  suspended  pur- 


364  Periodicals  [June 

chasing  power,  and  is  in  a  position  therefore  to  control  production  schedules  and 
to  a  large  extent  the  price  level. 

Fbjday,  D.  The  federal  reserve  board  and  the  farmer.  New  Repub.,  Mar.  8,  1922. 
Pp.  2.  Defends  the  federal  reserve  board  against  the  accusation  that  it  was 
responsible  for  the  agricultural  depression. 

Geiile,  F.  W.  Why  the  gold  standard  must  he  restored  and  preserved.  Trust 
Companies,  Nov.,  1921.  Pp.  4.  Suggestions  for  the  abandonment  of  the  gold 
standard,  or  for  substitutions  for  it,  overlook  the  fact  that  the  world  has  come 
to  the  general  adoption  of  gold  as  the  standard  of  value  after  trying  a  great 
variety  of  other  materials  with  unsatisfactory  results.  Efforts  to  restore  the 
gold  standard  will  necessitate  a  redistribution  of  some  of  the  gold  now  lodged  in 
the  United  States.  Hence,  bankers  should  be  very  cautious  not  to  expand  credit 
on  the  basis  of  this  surplus  gold  supply. 

Graham,  F.  D.  International  trade  under  depreciated  paper.  The  United  States, 
1862-1870.  Quart.  Journ.  Econ.,  Feb.,  1922.  Pp.  63.  A  statistical  verification 
of  Professor  Taussig's  theory  of  the  movement  of  international  trade  under 
depreciated  paper. 

Hahn,  a.  Handelshilanz — Zahlungsbilanz — Valuta-Oiit erpreise.  Archiv.  f.  Sozialwis. 
u.  Sozialpolitik,  Band  48,  Heft.  3.     Pp.  18. 

Hardino,  W.  p.  G.  The  federal  reserve  system  as  related  to  American  business. 
Econ.  World,  Dec.  31,  1921.  Pp.  4.  A  r6sum6  of  the  economic  causes  of  the 
business  depression. 

.     Principles   governing   discount    rate    policy    of  federal    reserve    banks. 

Trust  Companies,  Nov.,  1921.  Pp.  5.  A  summary  of  the  prevailing  views  as 
to  what  should  determine  the  Federal  Reserve  Board  policy  in  establishing  dis- 
count rates.     Recommendations  on  this  subject  by  the  federal  advisory  council. 

Hare,  L.  Excessive  multiplication  of  the  world's  currencies — its  effect  upon  the 
investor.     Finan.  Rev.  Rev.,  Mar.,  1922.     Pp.   10. 

Heckscher,  E.  F.  Verkan  av  for  lag  rlintefot.  Ek.  Tids.,  no.  12,  1921.  Pp.  8. 
A  theoretical  discussion  of  the  economic  effects  of  a  too  low  interest  rate. 

Helffericii,  K.  El  pago  de  los  primeros  mil  millones  en  oro.  Rev.  de  Econ.  Argen- 
tina, Nov.,  1921.  Pp.  8.  In  view  of  the  sacrifices  required  in  making  the  first 
reparations  payments,  it  is  asserted  that  Germany  will  be  unable  to  pay  the 
complete  bill  unless  she  is  economically  denationalized. 

Holt,  J.  G.  The  organization  and  training  of  the  staff  of  a  large  bank.  Journ. 
Inst,  of  Bankers   (London),  Nov.,  1921.     Pp.  21. 

Innes,  a.  M.     The  Ter  Meulen  scheme.     Econ.  Journ.   (London),  Dec,  1921,  Pp.  4. 

JosEPiissoN,  A.  Oemensamma  styrelseledamoter  i  banker  och  ovriga  bolag  i  Sverige. 
Ek.  Tids.,  no.  12,  1921.  Pp.  12.  Shows  clearly  the  tendency  in  Sweden  toward 
a  common  control  of  banking  and  other  corporate  interests. 

Ker.schagl,  R.  Ueberblick  iiher  das  Schrifttum  des  Oeldwesons  von  1914  bis  1920. 
Zeitsch.  f.  Volkswirts.  u.  Sozialpolitik,  Band  I,  Heft  3,  1921.  Pp.  12.  Reviews 
twenty-six  books  published  during  this  period. 

Kibe,  M.  V.     Currencies  in  Indian  States.     Indian  Journ.  Econ.,  Dec,  1920.     Pp.  10. 

KrrcHiN,  J.     The  position  of  gold.     Rev.  Econ.  Stat.,  Aug.,  1921.     Pp.  7. 

Krech,  a.  W.  Currency  inflation  and  public  debts.  Trust  Companies,  Dec,  1921. 
Pp.  2. 

IviESSEE,  A.  Les  projets  contrc  I'inflalion  en  Allcmagne :  un  procid^-  oblique: 
I'emprunt  force.  L'Econ.  Frani^.,  Feb.  18,  1922.  Pp.  3.  As.serts  that  a  forced 
loan  would  be  a  fia.sco  in  Germany. 


1922]  Money,   Prices,   Credit,    and  Banking  365 

A  propos  de  Vinflation  fiduciare  en  Allemagne:  la  reforme  de  la  Reichs- 


bank.     L'Econ.    Franc.,    Feb.   25,    1922.     Pp.   3.     Relieving   the    Reichsbank    from 
government  domination  migiit  serve  as  a  remedy  for  inflation. 

LoHix,  J.  Principaux  comptes  de  quinze  banques  francaises  de  depot  de  1913  d 
1920.  Rev.  d'Econ.  Pol.,  Sept-Oct.,  1921.  Pp.  3.  Statistical  summary  of  the 
growth  of  the  leading  banks  of  deposit  in  France. 

McAvoT,  W.  The  economic  importance  of  the  commercial  paper  house.  Journ. 
Pol.  Econ.,  Feb.,  1922.     Pp.  10. 

Madox,  B.  F.  Review  of  report  of  currency  committee.  Indian  Journ.  Econ., 
Dec,  1920.     Pp.  12. 

Maetxer,  D.  Sobre  el  problema  de  la  converai6n  en  Chile.  Rev.  de  Econ.  Argen- 
tina, Oct.,  1921.  Pp.  11.  Urges  the  substitution  of  the  gold  exchange  standard 
for  paper  money  in  Clille.  To  make  the  transition  practicable  the  establishment 
of  a  conversion  bank  is  suggested.  Argentina  has  possessed  such  a  bank  since 
1899  and  it  has  put  its  monetary  system  on  a  very  satisfactory  basis.  Free  con- 
vertibility of  paper  pesos  into  gold  and  vice  versa  is  provided  for  and  the  bank 
carries  metallic  reserve  equal  to  about  80  per  cent  of  the  paper  issues.  It  is 
asserted  that  Chile  possesses  sufficient  gold  to  set  up  a  reserve  in  a  conversion 
bank  large  enough  to  take  care  of  its  paper  money,  there  being  a  reserve  of 
approximately  140  million  pesos  of  gold  as  compared  with  300  millions  pesos  in 
paper.  To  maintain  an  adequate  gold  reserve  requires  a  permanent  and  satis- 
factory source  of  revenue.     An  income  tax  is  recommended  for  this  purpose. 

Meter,  E.,  Jr.  Work  of  the  War  Finance  Corporation.  Journ.  Am.  Bankers 
Assoc,  Jan.,  1922.     Pp.  8. 

MixTY,   L.     The   corporate   trust   department   of  an   American   bank.     Journ.    Inst. 

Bankers,    Mar.,    1922.     Pp.    10.     Review    of   the    activities    and    services    of    such 

departments. 
MoxDET,   N.     Chronique    de    Vinflation.     Journ.    des    Econ.,   Jan.    1.5,    1921.     Pp.    7. 

Comments  on  the  great  disparity  between  specie  reserves  and  note  issues  in  various 

countries.     Thinks   it  unlikely   that  the   monetary  units   of   Central   and   Eastern 

Europe  will  ever  come  back  to  pre-war  parity. 

.     Chronique  de  Vinflation.     Journ.  des  Econ.,  Feb.  15,  1921.     Pp.  14. 

MouLTOx,  H.  G.  The  limitations  of  foreign  credits.  Journ.  Pol.  Econ.,  Dec,  1921. 
Pp.  15.  A  review  of  our  experience  in  making  loans  to  Europe  to  aid  in  buying 
our  exports.  Thinks  it  unlikely  that  the  United  States  is  permanently  in  the 
creditor  class.  Our  own  needs  will  limit  further  credit  extension  on  our  part. 
Questions  whether  additional  credits,  even  if  we  could  grant  them,  would  be 
effective  in  rehabilitating  Europe.     What  Europe  needs  is  work  and  thrift. 

Ml'xx,  G.  G.  The  twenty  per  cent  rule,  or  why  banks  keep  a  part  of  the  money 
they  loan.  Bankers  Mag.,  Jan.,  1922.  Pp.  5.  Asserts  that  the  rate  of  interest 
on  loans  does  not  cover  all  expenses  of  making  such  loans  with  a  profit  and  that 
therefore  the  20  per  cent  rule  is  made  use  of  to  obtain  a  supplementary  income 
to  meet  these  expenses. 

NoRTOx,  J.  E.  The  Bank  of  England  and  the  money  market.  Pol.  Sci.  Quart., 
Sept.,  1921.  Pp.  21.  With  the  development  of  joint-stock  banks,  the  power  of 
the  Bank  of  England  over  the  money  market  has  greatly  diminished.  War 
finance  contributed  to  this  decline  in  power.  It  is  predicted  that  the  money 
market  in  the  future  will  be  controlled  by  a  combination  of  joint-stock  banks, 
with  a  certain  amount  of  deference  to  the  wishes  of  the  Bank  of  England. 

.     Bank  rate  and  the  money  market  in  the  United  States.     Econ.  Journ., 

(London),  Dec,  1921.     Pp.  14.     An  analysis  of  the  machinery  furnished  by  the 
federal  reserve  system  for  regulating  the  credit  supply  and  the  discount  rate. 

Oakwood,  J.     The  world's  greatest  gold  movement.     Annalist,  Jan.  9,  1922. 


366  Periodicals  [June 

Ohlin,  B.  Naaffot  om  frUstegrlng,  inflation  och  vnlutapolitik.  Nat.  ok.  Tids., 
No.  3,  1921.     Pp.  15. 

.     Vaxelkursernan    jamviktsldffe.     Nat.    Tids.,    No.    2,    1921.     Pp.    9.     A 

theoretical  presentation  of  laws  governing  international  rates  of  exchange. 

Paillard,  G.  La  convention  clu  9  (Ucembre  1921  et  le  probUme  de  I'Union  latine 
vu  de  Suisse.     Rev.  d'Econ.  Pol.,  Jan.-Feb.,  1922.     Pp.   11. 

Prestox,  H.  H.  Crisis  in  deposit  guaranty  in  the  state  of  Washington.  Quart. 
Journ.  Econ.,  Feb.,  1922.  Pp.  6.  The  failure  of  one  large  bank  has  practically 
brought  to  an  end  the  system  of  deposit  guaranty;  of  120  member  banks  all  but 
seven  had  withdrawn  from  the  system  by  the  close  of  1921. 

Putnam,  G.  E.  Recent  developments  in  the  federal  farm  loan  .^iystem.  Am.  Econ. 
Rev.,  Sept.,  1921.     Pp.  12. 

Riu,  E.  La  ordenacion  hancaria.  Rev.  Nat.  de  Econ.,  X,  1921.  Pp.  16.  A  dis- 
cussion of  the  new  Spanisli  banking  law,  especially  as  it  relates  to  the  regulation 
of  monetary  circulation  and  the  application  of  laws  covering  suspension  of  pay- 
ments and  bankruptcy.  It  is  asserted  that  private  banks  have  been  converted 
from  free  private  institutions  into  bureaucratized  industries. 

Robins,  K.  N.  Opportunity  for  private  enterprise  in  agricultural  finance.  Trust 
Companies,  Jan.,  1922.  Pp.  4.  The  federal  farm  loan  system  cannot  hope  to  be 
more  than  one  of  many  agencies  engaged  in  financing  the  farmer.  A  good  oppor- 
tunity therefore  exists  for  private  companies  to  carry  on  trust  and  banking 
functions  together  with  mortgage  financing.  Such  companies  could  buy  up 
mortgages  and  then  sell  to  private  individuals  bonds  based  upon  these  mortgages. 

Sakolski,  a.  M.  Employers'  cooperation  with  savings  banks  in  promotion  of 
thrift.  Administration,  Mar.,  1922.  Pp.  7.  Preferable  that  encouragement  of 
thrift  among  workmen  be  provided  by  cooperation  with  existing  savings  institu- 
tions rather  than  by  offering  stock  bonuses  or  "right  to  subscribe,"  or  similar 
plans,  which  tie  up  savings  of  employees  with  the   fortunes  of  their  companies. 

ScHELLE,  G.     Inflation  et  deflation.     Journ.  des  Econ.,  Oct.   15,  1921.     Pp.  3. 

Schumacher,  H.  Die  Wuhrungsfrage  als  weltwirtschaf tliches  Problem.  Schmollers 
Jahrb.,  Jahrg.  45,  Heft  4.  Pp.  18.  Necessity  for  restoring  world  market  for 
conmiodities.  This  requires  that  the  buying  power  of  Central  Europe  be  restored. 
Gold  is  one  of  the  requisites  for  restoring  balanced  world  markets.  Germany 
should  seek  to  develop  its  foreign  trade  and  should  impose  heavy  taxes  on  its 
citizens. 

Seltzer,  L.  H.  and  Horner,  S.  L.  Bank  reserves  and  the  call  money  loan  rate. 
Journ.  Pol.  Econ.,  Feb.,  1922.     Pp.  11. 

Shaw,  W.  A.  Is  an  automatic  bank  rate  possible?  Bankers'  Mag.,  Jan.,  1922. 
Pp.  8.  The  great  joint-stock  banks  control  the  credit  fund  of  the  country,  and 
should  therefore  decide  on  the  administration  of  the  fund.  These  banks  should 
uuet  weekly  under  the  leadership  of  tlie  Bank  of  England  to  decide  on  the  dis- 
count rate  and  the  extension  of  credit.  Such  action  sliould  bind  the  Treasury  as 
well  as  private  firms  or  individuals.  It  is  asserted  that  tlie  Bank  of  England  rate 
is  jjractically  useless  as  a  regulator  of  credit  extension.  The  bankers  acting 
together  and  not  the  government  should  regulate  the  use  of  credit. 

Sh-verstolpe,  G.  Vexelkursernas  periodiska  flnktuationer.  Ek.  Tids.,  no.  12,  1921. 
Pp.  14.     A  study  of  the  periodic  fiuctuations  of  exchange  rates. 

Strakosch,  H.  The  stabilising  of  exchanges.  Bankers'  Mag.  (London),  Nov., 
1921.  Pp.  9.  The  disequilibrium  of  the  exchanges  is  due  to  the  existence  of 
deep-seated  economic  derangement.  Obstacles  to  improvement  are  money  infla- 
tion, unstable  political  conditions,  governmental  interference  in  economic  life  of 
the  people,  maintenance  of  barriers  in  tlie  way  of  freedom  of  international 
exchange  of  goods,  and  the  existence  of  huge  national  debts. 


1922]  Money,   Prices,   Credit,   and  Banking  367 

Testis,  Les  banques  anglnises  dcpuh-  191//.  L'Econ.  Fran<j.,  Dec.  24,  1921.  Pp.  2. 
Marked  tendency  toward  consolidations. 

TiKNES,  D.  J.  The  fair  dollar.  Quart.  Journ.  of  U.  of  No.  Dakota,  Oct.,  1921. 
Pp.  8.  Criticizes  Fisher's  method  of  computing  an  index  for  the  purpose  of 
stabilizing  the  dollar,  and  objects  that  the  adjustment  intervals  are  too  far  apart. 

TiKSLEY,  J.  F.  An  industrial  savings  plan.  Journ.  Am.  Bankers  Assoc,  Feb., 
1922.  Pp.  2.  A  pay-roll  deduction  plan  of  saving  for  employees  of  the  Crompton 
and  Knowles  Loom  Works,  Worcester. 

Vakderlip,  F.  a.     Allied  indebtedness  to  the  United  States.     Bankers  Mag.,  Dec, 

1921.  Pp.  9.  Funds  obtained  by  repayment  of  allied  debt  should  be  used  in 
part  as  a  revolving  fund  of  credit  for  accomplishing  specific  economic  improve- 
ments in  European  countries.  The  establishment  of  a  world  gold  reserve  bank 
with  branches  in  the  various  nations  proposed. 

.     A  suggested  plan  for  a  gold  reserve  bank  of  the  countries  of  Central 

Europe.  Econ.  World,  Nov.  19,  1921.  Pp.  3.  A  detailed  statement  of  the 
author's  plan  to  remedy  some  of  the  financial  ills  of  Europe. 

ViLLEY,  E.  Le  probUme  monetaire.  Deflation  ou  stabilisation.  Rev.  d'Econ. 
Pol.,  Dec,  1921.     Pp.  7. 

VoGEL,  E.  H.  Stabilisierung  oder  Valutahebung  als  Ziel  Wahriingsreform.  Zeitsch. 
f.  Volkswirts.  u.  Sozialpolitik,  Heft  4-6,  1921.  Pp.  20.  Gradual  deflation  should 
be  the  process  for  rehabilitation  in  Austria. 

VoiGT,  A.  Die  Oekonomik  des  Geldverkehrs.  Zeitz.  f.  Sozialwissens.,  Heft  1-2, 
1921. 

Warbuhg,  p.  M.  "Barking  up  the  wrong  tree."  Survey,  Jan.  28,  1922.  Pp.  5.  A 
defense  of  the  federal  reserve  system  against  the  charge  of  the  responsibility  for 
the  depression. 

.     Political   pressure   and  future    of   the   federal    reserve   system.     Trust 

Companies,  Feb.,  1922.  Pp.  4.  Suggests  amendments  and  modifications  to  reduce 
the  danger  of  political  domination. 

Warne,  C.  E.  Enforced  par  remittance  under  the  federal  reserve  system.  Quart. 
Journ.  Econ.,  Feb.,  1922.  Pp.  15.  A  review  of  the  par  remittance  experience 
under  the  federal  reserve  system.  It  is  predicted  that  the  dream  of  universal 
par  remittance  will  be  unrealized.  The  number  of  banks  on  the  par  list  has 
slowly  diminished  during  the  past  year. 

Wecksell,  K.  Inflation,  penningmdngd  och  riinta.  Ek.  Tids.,  no.  10 — 11,  1921.  Pp.  5. 
A  criticism  of  a  recent  article  by  Akerman  on  inflation,  quantity  of  money  and 
interest. 

Weener-Kautzsch.     Geldentwertung    und     Verarmung.     Natur    u.    Gesells.,    Jan., 

1922.  Pp.  7.  Manipulation  is  responsible  for  the  decline  in  the  mark.  This  is 
traceable  to  Berlin  speculators  who  are  permitted  by  the  government  to  operate. 

.     Staatsbankrott    oder  neue    Wahrung?     Natur   u.    Gesells.,   Mar.,    1922. 

Pp.  7. 
Williams,  A.     Bankers'  advances  on  produce  and  the  documents  of  title   thereto. 

Journ.  Inst.  Bankers,  Jan.,  Mar.,  1922.     Pp.  12,  12.     Ixicture  I    (Jan.)    describes 

the  procedure   followed  and   the   documents   used   in   financing   the   purchase   and 

sale  of  commodities. 

Williams,  J.  H.  Foreign  exchange  under  depreciated  paper.  Journ.  Am.  Bankers 
Assoc,  Jan.,  1922.  Pp.  3.  A  criticism  of  Cassel's  doctrine  of  purchasing  power 
parity. 

Willis,  H.  P.  Seventy-five  years'  progress  in  American  banking.  Bankers  Mag., 
Sept.,    1921.     Pp.    5.     Banking    practice    in    America    has    contributed    to    world 


368  Periodicals  •  [June 

progress  in  finance  tlirough  its  demonstration  of  the  soundness  of  "free  banking," 

througli   tlie   development   of   scientific   metliods   of   credit   analysis,    through   the 

insistence    on    shortening    the    terms    of    credit,    and    through    emphasis    upon    the 

public  service  nature  of  the  banking  business. 
WiTTiCH,  W.     L'introduction  du  franc  en  Alsace  et  en  Lorraine   (d  suivre).     Rev. 

d'Econ.  Pol.,  Jan.-Feb.,  1922.     Pp.  25. 
Wright   I.     Interest  and  rediscount  rates  in  relation  to  farmers'  commercial  credit. 

Bankers  Mag.,  Mar.,  1922.     Pp.  3. 
Young,  J.  P.     Central  American  currencies.     Annalist,  Dec.   19,   1921.     P.   1.     The 

problem   faced  by   Guatemala  and   El   Salvador   in   adopting   the   gold   standard. 

Ibid.,  Dec.  26.     P.  1.     The  transition  from  a  silver  to  a  gold  basis  by  Honduras, 

Nicaragua  and  Costa  Rica. 

YouNOMAN,  A.  Efficacy  of  changes  in  the  discount  rates  of  the  federal  reserve 
banks.     Am.  Econ.  Rev.,  Sept.,  1921.     Pp.  21. 

YvES-GuYOT.  Le  compte  rendu  de  la  Banque  de  France  et  la  situation  Sconomique. 
Journ.  des  Econ.,  Feb.  15,  1922.     Pp.  12. 

ZuviRiA,  G.  M.  El  dolar  contra  el  peso — Conviene  ahora  abrir  la  Caja  de  Con- 
version? Rev.  de  Econ.  Argentina,  Dec,  1921.  Pp.  14.  Argentina  benefits  from 
an  unfavorable  rate  of  exchange  since  it  stimulates  exporting  and  diminishes 
importing. 

The  agricultural  bank  of  Paraguay.  Intern.  Rev.  Agri.  Econ.,  Oct.,  1921.  Pp.  8. 
An  account  of  the  organization  and  powers,  of  the  bank.  Includes  also  a  sum- 
mary of  its  operations  from  1915  to  1919. 

Criticism  of  the  federal  reserve  system.  Bankers  Mag.,  Nov.,  1921.  Pp.  2.  Cur- 
rent criticism  largely  the  result  of  political  hostility.  Main  basis  for  hostility 
lies  in  large  profits  earned  by  the  reserve  banks. 

Currency  values  at  home  and  abroad.  Index  (N.  Y.  Trust  Co.,)  Dec,  1921.  Pp.  4. 
A  comparison  of  the  external  and  internal  purchasing  power  of  depreciated 
currencies. 

Les  discussions  de  la  SocUt4  d'Economie  Politique  de  Paris:  la  stabilisation  du 
change.  L'Econ.  Fran^.,  Dec  17,  1921.  Pp.  4.  A  plea  for  anchoring  the  monetary 
system  of  France  to  a  fixed  axis — gold.  The  instability  of  exchange  is  the  result  of 
instability  of  prices.  The  rate  of  exchange  is  merely  a  reflection  of  economic 
conditions  since  prices  themselves  are  determined  by  imderlying  economic  forces. 
The  correction  of  these  economic  conditions  is  an  international  matter.  The  gold 
standard  is  the  axis  around  which  the  whole  economic  macliinery  revolves.  Three 
suggestions  for  improving  the  exchange  situation  have  been  made  in  France. 
(1)  Immediate  devaluation — the  stabilization  of  paper  money  at  its  present  value. 
This  would  be  accomplished  by  scaling  down  the  value  of  paper  and  restoring 
the  gold  standard.  (2)  Gradual  devaluation.  Both  of  these  are  rejected  on  the 
score  that  they  would  be  ruinous  to  French  credit  and  would  force  further  de- 
preciation of  the  franc.  Foreign  creditors  would  be  defrauded.  (3)  Restore  the 
franc  to  its  former  gold  value  by  progressive  advance  in  economic  productivity. 
Tills  is  recommended  as  the  only  plan  which  will  be  satisfactory. 

Federal  Reserve  Board  under  fire.     Bankers  Mag.,  Feb.,  1922.     Pp.  5. 

The  practical  facts  about  federal  foreign  banking.  Econ.  World,  Dec.  10,  1921. 
Pp.  4.  The  "Edge  law"  bank  of  today  is  in  some  respects  not  the  type  of  institu- 
tion the  framers  of  the  law  had  in  mind.  The  Federal  Reserve  Board  has  dras- 
tically modified  the  powers  to  do  what  is  described  in  the  act  itself,  and  the 
unsettled  conditions  affecting  international  trade  and  finance  have  forced  changes 
and  adaj)tations.  It  has  not  been  tliougiit  wise  to  undertake  some  of  the  activities 
authorized  by  the  law. — For  example,  it  has  been  practically  impossible  thus  far 
to  establish  the  "debenture"  form  of  institution.     The  existing  type  is  the  liquid 


1922]  Public    Finance  369 

commercial  bank  that  finances  by  means  of  bankers'  acceptances.  The  First 
Federal  Foreign  Banking  Association  finances  export  and  import  merchandise 
credits  of  all  lengths,  from  sight  to  a  year.  It  arranges  special  kinds  of  financing, 
such  as  to  cover  the  exportation  of  one  commodity  to  Europe,  the  credit  running 
a  considerable  time  and  being  secured  by  warehoused  stocks  of  other  commodities 
of  local  production.  It  has  financed  the  purchase  of  raw  materials  in  one  country, 
their  transportation  to  another  for  fabrication,  and  finally  their  importation  as 
finished  goods  into  the  United  States,  or  elsewhere.  In  short,  tlie  bank  is  ready 
to  consider  all  kinds  of  export  and  import  credit  problems  with  a  view  to  working 
out  special  methods  of  handling  each  transaction. 

Revival  of  unsound  money  agitation.  Bankers  Mag.,  Mar.,  1922.  Pp.  4.  Com- 
ment on  currency  proposals  of  Ford  and  Edison. 

Socialstyrelsens  forslag  rorande  en  aUmfin  levnadskosfnadsundersokning.  Soc.  Med- 
delanden,  no.  3,  1922.  Pp.  8.  The  Swedish  labor  administration  presents  a  plan 
for  general  investigation  of  living  costs  in  Sweden. 

Public  Finance 

(Abstracts  by  Charles  P.  Huse) 

BADrLEsco.  M.  V.  Le  preUvement  sur  le  capital  en  Allemagne.  Rev.  de  Sci.  et  de 
Legis.  Finan.,  Oct.-Dec,  1921.  Pp.  9.  The  new  law  of  July  6,  1921,  modifies  in 
details  only  the  laws  of  1919  and  1920. 

Bucket,  R.  G.     The  Revenue  act  of  1921.     Am.  Econ.  Rev.,  Mar.,  1922.     Pp.  35. 

Brigham,  W.  E.  The  manufacturers'  tariff  convention.  Protectionist,  Mar.,  1922. 
Pp.  8.     The  American  valuation  conference  at  Washington. 

.  The  Reynolds  report  on  American  and  foreign  valuations.  Protec- 
tionist, Feb.,  1922.  Pp.  4.  Based  on  study  of  foreign  prices,  importing  costs,  and 
American  prices. 

Clat,  H.  The  report  of  the  Oeddes  Committee  on  economy  in  British  governmental 
expenditures.  Econ.  World,  Mar.  11,  1922.  Pp.  2.  Republished  from  the  March  8 
issue  of  the  N.  Y.  Evening  Post. 

Commons,  J.  R.  A  progressive  tax  on  bare-land  values.  Pol.  Sci.  Quart.,  Mar., 
1922.  Pp.  28.  Discusses  a  Wisconsin  bill  to  impose,  in  addition  to  existing 
property  taxes,  a  progressive  tax  on  large  land  values  in  single  holdings,  after 
exempting  fertility  value  and  improvements. 

De  Gaetako,  F.  La  riforma  del  trihuti  locali.  Riv.  di  Pol.  Econ.,  no.  X,  1921. 
Pp.  8. 

DoDD,  W.  F.  Legislative  notes  and  reviews:  .'itate  too:  legislation  in  1921;  budgetary 
legislation  in  1921.  Am.  Pol.  Sci.  Rev.,  Feb.,  1922.  Pp.  26.  Need  for  revenue 
is  responsible  for  taxes  on  gasoline,  petroleum,  cement,  gypsum  and  mineral  ores. 
California  adopted  ten-dollar  poll  tax  on  alien  male  inhabitants,  and  Rhode  Island 
extended  poll  tax  to  include  women. 

Fletcher,  F.  N.  Budget  and  state  taxes  in  Nevada.  Bull.  Nat'l  Tax  Assoc,  Jan., 
1922.  Its  sparse  population  accounts  for  the  highest  per  capita  state  tax  in  the 
country. 

Grilu,  C.  II  protezionismo  dopo  le  guerra.  Riv.  Intern.,  Dec,  1921.  Pp.  32. 
The  anti-dumping  argiiment  in  its  post-war  forms. 

Grossmax,  E.  Die  Erbschaftssteuerkontigente  und  ihre  statistischen  Grundlagen. 
Journ  Stat,  et  Rev.  Econ.  Suisse,  no.  3,  1921.  Pp.  11.  Points  out  ways  of  securing 
statistics  needed  as  basis  for  studying  inheritance  tax  problems. 

GtrticK,  L.  New  revenues  for  city  government.  Nat.  Munic  League,  Jan.,  1922. 
Pp.  4.     The  committee  of  the  League  recommends  more  use  of  the  special  assess- 


370  Periodicals  [June 

ment,  taxation   of  signboards   according  to   location,   removal   of   tax  limits,   and 
better  methods  of  assessment. 

Hagerman,  J.,  Jr.  The  federal  estate  tax.  Am.  Bar.  Assoc.  Journ.,  Feb.,  1922. 
Pp.  i.     The  theory,  practice  and  desirable  modifications. 

Harriman,  E.  a.  Taxatinn  of  stock  dividends.  Bull.  Nat.  Tax  Assoc,  Jan.,  1922. 
Pp.  2.  Is  a  stock  dividend,  payable  to  one  class  of  stockholders  only,  taxable  as 
income? 

.     Taxation  of  tax  exemptions.     Am.  Bar.  Assoc.  Journ.,  Feb.,  1922.  Pp.  3. 

Discusses  the  taxation  of  the  franchise  right  conferred  in  tax  exemption — a  novel 

tax. 
HoLCOMB,   A.   E.     Conference   on  national   bank   taxation.     Bull.    Nat.   Tax    Assoc, 

Jan.,  1922.     Pp.  5.     Gives  a  brief  statement  of  the  problem  and  the  text  of  the  bill 

recommended  by  the  conference. 

Jeze,  G.  Le  controle  de  Vengagement  des  depenses  en  Belgique.  Rev.  de  Sci. 
et  de  Legis.  Finan.,  Oct.-Dec,  1921.  Pp.  11.  The  waste  during  the  war  has  led 
to  a  change  in  the  Belgian  system  of  control  over  expenditures. 

.     Les    doubles   impositions    en    Angleterre.     Rev.    de    Sci.    et    de    Legis. 

Finan.,  Oct.-Dec,  1921.     Pp.  8.     Deals  with  double  taxation  as  considered  by  the 
income  tax  commission. 


.     La   r^'forme    budgHaire    aux   Etats-Unis.     Rev.    de    Sci.    et    de    Legis. 

Finan.,  Oct.-Dec,  1921.     Pp.  29.     A  brief  history  of  the  reform  and  the  text  of 
the  law. 

Leake,  P.  D.  The  taxable  capacity  of  a  nation:  a  new  conception.  Bus.  Org. 
and  Manag.  (London),  Oct.,  1921.  Pp.  12.  Advocates  a  ten  per  cent  production 
tax  in  place  of  present  British  income   tax. 

Lewis,  R.  A.,  Jr.  The  government's  budget.  World's  Work,  Mar.,  1922.  Pp.  5. 
Explains  its  aims  and  methods. 

LiEssE,  A.  Une  experience  fiscale:  Vimpot  sur  le  revenu.  L'Econ.  Franc;.,  Jan.  21, 
1922.  Pp.  3.  Finds  the  French  income  tax  has  brought  neither  justice  nor 
adequate  revenues. 

.  Sur  les  taux  d'int^rets.  L'Econ.  Fran?.,  Mar.  4,  1922.  Pp.  3.  Con- 
siders the  causes  leading  to  the  reduction  in  rates  on  government  loans. 

LiNDAiiL,  E.  Intressepricipens  tillampning  inom  kommunalbeskattningen.  Ek.  Tids., 
no.  12,  1921.  Pp.  18.  Advocates  a  greater  degree  of  local  freedom  in  taxation 
to  meet  local  needs. 

LocKiiART,  O.  C.  The  revised  income  tax.  Bull.  Nat.  Tax  Assoc,  Jan.,  1922.  Pp.  3. 
The  complicated  provisions  may  be  improved  in  administration  by  the  new  tax 
simplification  board. 

Montgomery,  R.  H.  The  new  income  tax  law.  Administration,  Jan.,  1922.  Pp.  1. 
Points  out  its  merits  and  defeats. 

Newcomb,  H.  T.  Inequalities  of  federal  income  and  estate  taxes.  Trust  Companies, 
Jan.,  1922.  Pp.  2.  Twenty-five  states  bear  about  six  sevenths  of  the  federal 
taxes. 

Oneto,  S.  La  discrimijwzione  qualitativa  fra  ricchezze  soggette  ad  imposta.  Giorn. 
d.  Econ.,  Sept.,  1921.     Pp.  20. 

Phinney,  S.   H.     Detailed  revenues   in   New  Jersey   cities.     Am.   City,   Mar.,    1922. 

Pp.3. 
Quail,    J.     Taxation    and    unemployment.     Finan.    Rev.    Rev.,    Mar.,    1922.     Pp.    7. 

Great  Britain  and  the  United  States  are,  excepting  Russia,  the  countries  suflFering 

the  most  from  unemployment,  are  likewise  the  countries  that  have  taxed  themselves 

the  most  for  war  purposes. 


1922]  Insurance  and  Pensions  371 

RoTONDi,  M.  Riforme,  discussioni  e  proposte  in  materia  d'imposta  sulle  successioni. 
Rif.  Soc,  Oct.-Dec,  1921.  Pp.  41.  Recent  inheritance-tax  history  in  Italy  and 
its  bearings  on  proposed  new  tax  legislation. 

Seligmak,  E.  R.  a.  The  state  of  our  national  finances.  Am.  Econ.  Rev.,  Mar., 
1922.     Pp.  20. 

Smith,  G.  P.  Federal  estate  tax  on  life  insurance  policies.  Trust  Companies,  Feb., 
1922.     Pp.  3.     Considers  it  unjust  and  unconstitutional. 

Taft,  R.  a.  a  proposed  revision  of  the  Smith  law.  Bull.  Nat.  Tax  Assoc,  Feb., 
1922.  Pp.  5.  A  revision  of  the  Ohio  law  in  the  direction  of  greater  centralized 
control  of  local  expenditures. 

Thompson,  C.  D.  The  tax  system  under  the  reforms.  Indian  Journ.  Econ.,  Dec, 
1920.  Pp.  17.  Indian  taxes  are  fairly  well  distributed  as  between  individuals, 
but  there  should  be  a  better  division  of  taxing  powers  and  revenues  between 
central  and  local  governments. 

Vakil,  C.  N.  Our  fiscal  policy.  Journ.  Indian  Econ.  Soc,  Dec,  1921.  Pp.  24. 
India's  customs  system,  formerly  dominated  by  Lancashire  cotton  interests,  has 
become  more  important  as  a  result  of  the  necessities  of  war. 

VoGEL,  E.  H.  Zur  Systematik  der  Finanzwissenschaft  in  der  neuesten  Literatur. 
Zeitsch.  f.  Volkswirts.  u.  Sozialpolitik,  Heft  4-6,  1921.  Pp.  22.  The  new  works 
by  Tyszka  and  Foldes  and  the  revisions  of  Eheberg  and  Conrad  are  encouraging 
in  this  time  of  national  distress. 

Williams,  J.  H.  What  should  we  do  with  the  allied  debt?  Journ.  Am.  Bankers 
Assoc,  Feb.,  1922.  To  demand  immediate  payment  of  interest  would  unsettle 
exchanges  and  cause  shrinkage  in  our  export  trade. 

Wood,  J.  P.  Hearings  on  the  Fordney  Tariff  bill  before  Senate  Finance  Committee. 
Bull.  Nat.  Assoc  Wool  Manufacturers,  Jan.,  1922.  Pp.  48.  Includes  statistical 
tables. 

Refunding  our  loans  to  foreign  governments.  Commerce  Mo.,  Mar.,  1922.  Pp.  3. 
Gives  arguments  for  and  against  cancellation. 

Special  assessments.  Nat.  Mun.  Rev.,  Feb.,  1922.  Pp.  16.  A  report  of  a  committee 
of  the  League,  describing  American  practice  and  indicating  the  best  methods. 

Taxes  and  incomes.  New  Repub.,  Mar.  8,  1922.  Pp.  3.  Favors  reenactment  of 
excess-profits  tax,  if  the  bonus  is  granted. 

Insurance  and  Pensions 

(Abstracts  by  Henry  J.  Harris) 

Bonnet,  H.  Societe  d'economie  sociale — les  projets  de  loi  sur  les  assurances 
sociales.  Ref.  Soc,  Jan.-Dec,  1922.  Pp.  26.  Paper  and  discussion  before  the 
society,  generally  adverse  to  the  bill. 

Boon,  R.  L.  The  theory  and  practice  of  cargo  insurance.  Econ.  World,  Feb.  25, 
Mar.  4,  1922.     Pp.  5,  2.     Review  of  whole  subject  by  a  British  authority. 

BouLTON,  S.  Lloyd's:  its  history,  its  organization  and  its  activities.  Econ.  World, 
Dec.  31,  1921.     Pp.  4.     Popular  statement. 

Broeckeh,  H.  Die  gegenwartigcn  Kapitalanlagen  der  Versicherungsgesellschaften. 
Zeitschr.  f.  d.  ges.  Vers.-Wis.',  Jan.,  1922.  Pp.  9.  At  the  end  of  1919,  the  invest- 
ments of  life  companies  consisted  of:  mortgages,  64;  bonds  of  public  bodies,  14; 
securities,  14;  policy  loans,  6  per  cent.  Since  1914  tiiere  has  been  a  moderate 
increase  in  securities  and  public  bonds,  with  corresponding  decrease  in  mortgages. 

Bhown,  H.  G.  The  incidence  of  compulsory  insurance  of  workmen.  Journ.  Pol. 
Econ.,    Feb.,    1922.     Pp.    11.     Concludes    that    the    incidence    of    the    charge    for 


372  Periodicals  [June 

workers'  insurance,  imposed  first  on  employers,  is  likely  to  rest  for  the  most  part 
on  wage-earners  and  that,  other  things  being  equal,  it  will  entirely  so  rest. 

Cammack,  E.  E.  Premmms  and  reserves  for  non-cave  ell  able  accident  and  health 
policies.  Proc.  Cas.  Act.  Soc,  May,  1921.  Pp.  34.  In  view  of  the  lack  of  pub- 
lished sickness  tables  compiled  from  American  experience,  use  may  be  made  of 
the  Manchester  Unity,  classes  A.  H.  J.,  tables.  Gives  valuable  tables  recently 
compiled. 

Crawford,  W.  S.  Outstanding  features  of  fire  insurance  in  the  United  States  during 
1921.  Econ.  World,  Feb.  4,  1922.  Pp.  3.  Republished  from  N.  Y.  Journal  of 
Commerce,  Jan.  23,  1922.  The  deflation  period  of  1921  put  the  business  on  a 
sound  basis.  Has  been  a  decrease  in  premiums,  moral  hazard  a  serious  problem, 
e.xpenses  were  high,  but  business  generally  good. 

Dennisoij^,  H.  W.  Depression  insurance:  a  suggestion  to  corporations  for  reducing 
unemploiiment.  Am.  Labor  Legis.  Rev.,  Mar.,  1922.  Pp.  6.  Prevention  more 
important  than  relief;  by  regularization,  which  is  perfectly  feasible,  this  can  be 
secured.  Gives  experience  of  Dennison  Company.  Proposes  a  plan  of  mutual 
insurance  among  employers  to  carry  burden  of  depressions. 

Ely,  E.  Automobile  property  damage  insurance.  Econ.  World,  Feb.  18,  1922. 
Pp.  4.  This  form  protects  the  assured  in  case  of  damage  to  property  of  others, 
including  loss  of  use.     Writer  also  discusses  collision  insurance. 

Epps,  G.  S.  W.  Superannuation  funds.  Notes  on  some  post-war  problems,  III. 
Journ.  Inst.  Act.,  Oct.,  1921.  Pp.  40.  Treats  the  increase  of  salaries,  changes  in 
interest  rate,  eifect  of  new  entrants,  depreciation  of  securities  and  methods  of 
caring  for  deficiencies.     Gives  table  of  pensioners'  mortality  rates. 

Garino-CaninAj  a.  Le  assicurazioni  sociali  in  Italia  nel  periodo  post-bellico.  Rif. 
Soc,  Oct.-Dec,  1921.     Pp.  12. 

Gi'iNTiiER,  E.  Die  Tarife  in  der  deutschen  Sozinlversicherung.  Schmollers  Jahrb., 
Heft  4,  Jahrg.  45.  Pp.  42.  Scientifically  constructed  tariffs  fundamental  in  any 
system  of  insurance.  The  new  laws  on  social  insurance  are  so  lacking  in  system, 
so  badly  constructed  that  they  simply  produce  social  injustice  and  will  later  have 
to  be  supplanted. 

HoRH,  A.  R.  Can  trust  companies  and  life  insurance  companies  be  neighbors  with- 
out quarreling?  Econ.  World,  Feb.  11,  1922.  Pp.  3.  Analyzes  recent  develop- 
ments in  the  creation  of  trusts  during  applicant's  life  time,  savings  accounts  com- 
bined with  life  insurance,  etc.  Cooperation  will  increase  business  of  both  life  and 
trust  companies. 

Jewktt,  M.  E.  Automobile  liability  insurance :  "personal  injury"  coverage.  Econ. 
World,  Jan.  28,  1922.  Pp.  3.  The  nine  million  cars  caused  about  nine  thousand 
deaths  in  1920. 

Kkate,  H.  The  history  and  practice  of  general  average  in  marine  underwriting. 
Econ.  World,  Jan.  21,  1922.     Pp.  3.     Explanation  and  definition  of  terms. 

Kexciiingtox,  C.  W.  Modern  developments  in  the  methods  of  industrial  assurance 
valuations.  Journ.  Inst.  Act.,  Oct.,  1921.  Pp.  24.  Use  of  mechanical  tabulation, 
the  approximate  check  method,  etc. 

Laird,  J.  M.  Non-cancellable  accident  and  health  insurance  underwriting  problems. 
Proc.  Cas.  Act.  Soc,  May,  1921.  Pp.  31.  Reviews  development  in  this  field 
and  discusses  such  features  as  policy  coverage,  disability  rates,  premiums,  reserves, 
etc 

Lock,  F.  The  National  Association  of  Insurance  Agents  and  the  fire  insurance 
business  in  the  United,  States.  Econ.  World,  Mar.  18,  1922.  Pp.  4.  Agency  quali- 
fications, the  status  of  the  broker,  underwriters'  agencies,  mutual  and  reciprocal 
competition,  overhead  writing,  etc.,  are  discussed. 


1922]  Insurance  and  Pensions  373 

Mack,  W.  J.  Safeguarding  employment:  the  "Cleveland  plan"  of  unrmploi/iuent 
compensation.  Am.  Labor  Legis.  Rev.,  Mar.,  1922.  Pp.  6.  In  the  ladies'  gar- 
ment industry  of  Cleveland,  an  agreement  exists  by  which  the  employers  guarantee 
the  regular  workers  20  %veeks  of  employment  in  each  six  months;  if  employment 
is  not  so  provided,  then  each  worker  receives  two-thirds  of  his  minimum  wage. 

MicHELBACHER,  G.  F.  Distribution  of  "slwck"'  losses  in  zaorkmen's  compensation 
and  liability  insurance.  Proc.  Cas.  Act.  Soc,  May,  1921.  Pp.  31.  The  distribu- 
tion of  the  burden  caused  by  a  large  number  of  injuries  or  a  heavy  verdict  is 
effected  by  a  reinsurance  pool,  by  coinsurance,  by  reinsurance,  or  by  sharing  the 
insurance.     Description  of  organizations  now  operating. 

MoRHis.  E.  B.  Some  new  problems  affecting  life  insurance.  Econ.  World,  Dec. 
24,  1921.  Pp.  4.  Survey  of  actuarial  aspects  of  group  insurance,  life  policies 
placed  with  aid  of  employer,  home-building  contracts,  savings  combinations, 
raising  endowments  for  institutions,  etc. 

MowBRAT,  A.  H.  The  Casualty  Actuarial  Society  as  an  educational  institution. 
Proc.  Cas.  Act.  Soc,  May,  1921.  Pp.  7.  Achievements  of  society  with  plans  for 
future. 

XoLLEX,  H.  S.  Recent  fluctuations  in  life  insurance  policy  loans  in  the  United 
States.  Econ.  World,  Dec.  24,  1921.  Pp.  3.  There  was  a  rise  during  the  23 
years  preceding  191.5,  when  the  maximum  was  reached,  followed  by  a  sudden  de- 
cline 1914  to  1919  when  the  ratios  began  rapidly  to  increase. 

Orb,  L.  P.  The  peace  and  life  assurance.  Econ.  World,  Jan.  14,  1922.  Pp.  4. 
Events  since  the  armistice — depreciated  securities,  higher  interest  rates,  lower 
death  rates,  increased  administrative   costs,  etc. 

Palme,  S  Ein  Beitrag  zum  Stiidiunii  der  Sterblichkeit  minderwertigen  Leben. 
Zeitschr.  f.  d.  ges.  Vers.-Wis.,  Jan.,  1922.  Pp.  9.  Useful  tables  showing  the 
influence  of  various  diseases,  hereditary  influences,  etc.,  on  death  rates.  Data 
secured  from  16  Swedish  life  companies. 

Rato,  A.  El  regimen  de  retires  obreros  en  las  diferentes  legislaciones  europeas. 
Rev.  Xac.  de  Econ.,  XI,  1921.  Pp.  31.  Description  of  old  age  pensions  systems 
now  in  operation  in  Europe. 

Rexfee,  H.  Die  Verkehrsmittel-Unfallrersicherung.  Zeitschr.  f.  d.  ges.  Vers.- 
Wis.,  Jan.,  1922.     Pp.  16.     Survey  of  travelers'  accident  insurance  in  Europe. 

Rydee,  a.  Forms  of  automobile  coverage  and  determination  of  rates.  Econ.  World, 
Mar.  4,  1922.  Pp.  4.  Must  be  a  separate  rate  for  each  coverage  and  this  rate 
must  vary  in  the  different  sections  of  the  country;  must  also  be  different  for  each 
make  of  car. 

Shattuck^  H.  L.  Unemployment  insurance  legislation  in  Massachusetts.  Am. 
Labor  Legis.  Rev.,  Mar.,  1922.  Pp.  5.  Provisions  of  bill  introduced  into  Massa- 
chusetts legislature  in  January,  1922. 

Stier-Somlo,  F.  Die  "vorldnfige"  Arbeitslosenversicherung.  Zeitschr.  f.  d.  ges. 
Vers.-Wis.,  Jan.,  1922.  Pp.  13.  Critique  of  the  government's  plan  for  a  system 
of  unemployment  insurance  for  Germany,  as  announced  in  Reichs-Arbeitsblatt  of 
1921,  number  24,  p.  839  ff. 

Vermont,  H.  La  loi  d'assurances  sociales.  Ref.  Soc,  Jan.,  1922.  Pp.  24.  General 
principles  of  the  proposed  law  for  France,  critical  analysis  of  its  provisions, 
answer  to  arguments  in  favor  of  the  proposal,  etc.  Concludes  by  opposing  the 
bill  as  not  adapted  to  French  conditions. 

Whitney,  A.  W.  A  study  of  schedule  rating.  Proc.  Cas.  Act.  Soc,  May,  1921. 
Pp.  9.     Development  of  formula. 

Workmen's  compensation  for  the  District  of  Columbia.  Am.  Labor  Legis.  Rev., 
Mar.,  1922.  Pp.  9.  Report  of  House  Committee  on  District  of  Columbia,  re- 
commending exclusive  state  fund. 


374  Periodicals  [June 

Pauperism,  Charities,  and  Relief  Measures 

(Abstracts  by  George  B.  Mangold) 

Hexry,  M.  B.  N ear-dcVmqucnt g  in  the  public  acJiools.  Joiirn.  Deliquency,  Nov., 
1922.  This  study  considers  fifty  cases  of  children  in  the  public  schools  and 
analyzes  their  social  and  individual  backgrounds.  In  conclusion  the  article  sug- 
gests the  development  of  a  system  of  supervision  of  those  children  whose  parents 
are  incapable  of  accepting  proper  responsibility. 

Nelson,  D.  E.  Instituciones  de  prevision  locial  en  la  lucha  contra  la  delincuencia 
infantil.  Boletin  del  Museo  Soc.  Argentino,  Jan.  25,  1922.  Deals  with  methods 
of  supervising  and  caring  for  juvenile  delinquents.  Draws  heavily  upon  the 
methods  that  have  been  developed  in  the  United  States  and  to  some  extent  in 
England  and  suggests  the  desirability  of  apj)lying  some  of  these  methods  to  the 
situation  in  the  Argentine. 

NoRTiicoTT,  C.  H.     Unemployment  relief  in  Oreat  Britain.     Pol.  Sci.  Quart.,  Sept., 

1921.  Discusses  three  governmental  proposals  for  the  relief  of  unemployment. 
Two  deal  with  development  of  various  forms  of  public  work.  The  third  plan 
consists  of  an  endeavor  to  promote  a  housing  construction  program.  The  article 
also  discusses  briefly  tlie  Unemployment  act. 

Statistics 

(Abstracts  by   Horace  Secrist) 

Amark,  K.  En  svensk  prishixtorisk  studie.  Ek.  Tids.,  no.  12,  1921.  Pp.  24.  A 
study  of  prices  in  Sweden  from  1732  and  on.  Annual  index  numbers  for  the 
entire  period  are  given  and  a  diagram  shows  the  price  index  curve  by  five-year 
periods. 

Beai.es,  Le  V.  The  negro  enumeration  of  1920.  Sci.  Mo.,  Apr.,  1922.  Pp.  10.  A 
defense  of  the  accuracy  of  the  enumeration  of  the   negroes   at   the   last  census. 

Bereidoe,  W.  a.  Employment  and  the  husineast  cycle.  Rev.  Econ.  Stat.,  Jan.,  1922. 
Pp.  40.  An  epoch-making  study  of  the  available  data  on  employment  in  their 
relation  to  the  business  cycle. 

BuRNHAM,  G.   H.     The  weather  element    in   railroading.     Mo.    Weather   Rev.,  Jan., 

1922.  Pp.  7. 

Cabjolsky,  H.  Prodiiktionsstatintik  iin  Maschinenhau.  Technik  u.  Wirtsch.,  Apr., 
1921. 

Davies,  G.  R.  Social  aspects  of  the  business  cycle.  Quart.  Journ.,  U.  of  No. 
Dakota,  Jan.,  1922.  Pp.  15.  A  curious  mixture  of  statistical  methods  in  their 
application  to  social  data. 

Dublin,  L.  I.  The  mortality  of  foreign  race  stocks.  Sci.  Mo.,  Jan.,  1922.  Pp.  11. 
A  restatement  of  the  conclusions  from  two  earlier  articles  of  the  author  relative 
to  the  .seemingly  increased  mortality  rate  of  the  American  people  after  the  age 
of  45. 

.     A   program  fur  the  statistics  of   the  venereal   diseases.     Soc.    Hygiene, 

Oct.,  1921.  Pp.  12.  An  analysis  of  the  data  on  the  prevalence  of  dcatlis,  together 
with  a  critical  analysis  of  the  limitations  of  the  data  available.     Bibliograjihy. 

liecords    of    jiublic    health    inirsiiig    unit    lluir    service    in    case    work, 


administration  and  research.  Uei)rint  from  the  I'lihlic  Health  Nurse.  Five  lec- 
tures delivered  before  the  dejiartiuent  of  nursing  and  health.  Teachers'  College, 
Columbia  University,  April,  1921. 

Falkner,  R.  p.     Uses  and  perils  of  business  graphics.     Administration,  Jan.,  1922. 
P]>.    5.     "While    the    graphic    reprtscntation    of    business    facts    has    its    uses,    it    is 


1922]  Statistics  375 

not  an  instrument  of  universal  validity,  and  while  it  may  eflfectively  supplement 
the  tabular  presentation  of  statistical  facts,  it  cannot  supplant  it." 

Gu3iBEi.,  E.  J.  Ein  Versuch  eines  mafhemafischen  "Gesetzes  der  Bevdlkerungs- 
zunahme."     Deutsches  Stat.  Zentrallblatt,  Mar.-Apr.,  1921. 

Holmes,  B.  E.  The  ratio  chart  applied  to  inventory  control.  Indus.  Manag.,  Apr., 
1922.     Pp.  3. 

DE  Leexer,  G.  Notes  sur  les  parts  de  profits  et  des  salaires  dans  I'industrie  beige. 
Rev.  de  I'lnst.  de  Sec,  July,  1921.     Pp.  30. 

Lowhet,  L.  G.  Statistical  classifications  as  applied  to  the  work  of  temporary  care 
institutions.     Bull.  Mass.  Dept.  of  Mental  Diseases,  Jan.,  1921.     Pp.  6. 

McPheksox,  J.  B.  An  estimate  of  the  world's  sheep  and  wool  product.  Annual 
Wool  Rev.,  1921.     Pp.  3. 

MouREE,  Bahox.  Les  crises  et  leurs  signes  caracteristiques  aux  Etats-Unis  de  1882 
a  1921.  Journ".  Soc.  Stat,  de  Paris,  Jan.,  1922.  Pp.  20.  The  study  is  divided 
into  two  parts.  The  first  has  to  do  wath  a  description  of  the  various  crises 
through  which  the  United  States  has  passed;  the  second,  with  the  comparison  of 
the  statistical  measures  of  crises. 

Peake,  E.  G.  The  formation  of  a  central  bureau  of  information.  Bankers'  Mag. 
(London),  Mar.,  1922.  Pp.  3.  Plea  for  the  organization  of  a  research  bureau 
with  the  object  of  collecting  information  after  the  manner  of  the  Board  of  Trade, 
and  examining  it  in  the  light  of  the  new  statistical  methods,  discovered  by  Karl 
Pearson  and  others,  "with  a  view  to  discovering  relationships,  in  the  nature  of 
cause  and  effect  and  to  measure  definitely  the  closeness  of  such  relationships  as 
are  already  known." 

Persoxs,  W.  M.  An  index  chart  based  on  prices  and  money  rates.  Rev.  Econ. 
Stat.,  Jan.,  1922.  Pp.  5.  Presents  and  compares  "series  for  stock  prices,  com- 
modity prices,  and  money  rates."  "Cyclical  movements  of  stock  prices  are  fol- 
lowed in  point  of  time  by  similar  movements  of  commodity  prices,  and  these,  in 
turn,  by  similar  movements  of  money  rates." 

Prixzix-g,  F.  Die  deutschen  un.d  die  international  en  Todesurachenverzeichnisse. 
Deutschs  Stat.  Zentrallblatt,  Mar.-Apr.,  1921. 

Rew,  H.  The  progress  of  British  agriculture.  Journ.  Royal  Stat.  Soc,  Jan.,  1922. 
Pp.  26. 

Rusher,  E.  A.  The  statistics  of  industrial  morbidity  in  Great  Britain.  Journ. 
Royal  Stat.  Soc,  Jan.,  1922.     Pp.  60. 

Seltzer,  L.  H.  and  Horxeh,  S.  L.  Bank  reserves  and  the  call  money  loan  rate. 
Journ  Pol.  Econ.,  Feb.,  1922.  Pp.  11.  Analysis  of  data  for  1901-1909  by  J.  P. 
Norton's  method  and  by  supplementing  it  by  a  more  detailed  analysis. 

Stewakt,  E.  Trend  of  employment  in  the  manufacturing  industries  in  the  United 
States.  Mo.  Labor  Rev.,  Mar.,  1922.  Pp  7.  A  study  of  data  on  employment 
from  the  U.  S.  Bureau  of  Labor  Statistics,  N.  Y.  Dept.  of  Labor,  Wis.  Industrial 
Commission,  and  Mass.  state  census  in  the  light  of  normal  growth  of  employment 
in  manufacturing  in  the  United  States  for  the  purpose  of  establishing  "if  possible 
a  level  of  employment  volume,  that,  if  adhered  to,  will  prevent  the  industrial  col- 
lapse that  results  from  unintelligent  overstimulation." 

Vakagxac.  Les  statistiques  du  Conseil  d'Etat  en  mati^re  contentieuse  depuis  nivose 
an  VIII  (D^cembre  1799).     Journ.  Soc.  Stat,  de  Paris,  Mar.,  1922.     Pp.  10. 

Winkler,  W.  Von  den  statistischen  Massen  und  ihrer  Einteilung.  Jahrb.  v. 
Nationalok.  u.  Stat.,  Apr.,  1921. 


DOCUMENTS,  REPORTS,  AND  LEGISLATION 
Industries  and  Commerce 

The  United  States  Tariff  Commission  has  published,  in  its  Tariff  Infor- 
mation Surveys,  revised  editions  of  descriptive  matter  on  the  sections  of  the 
Tariff  act  of  1913  for  the  following  groups:  Cyrolite,  Graphite,  and  Mag- 
nesite  (pp.  65);  Tin  (pp.  45);  Eggs  and  Egg  Products  (pp.  65);  Yarns, 
Threads,  and  Cordage  of  Vegetable  Fibers  other  than  Cotton  (pp.  HI); 
Jute  Cloths   (pp.  82). 

The  Commission  has  also  published: 

Sujumarii  of  Tariff  Information,  19'21,  a  revision  of  an  earlier  publication 
under  a  similar  title  used  by  the  Ways  and  Means  Committee  of  the  House. 
The  articles  and  provisions  discussed  are  arranged  according  to  the  para- 
graphs and  sections  in  the  Fordney  bill  (H.  R.  7456). 

Sheep  and  Wool  Production  in  Argentina,  with  special  reference  to  cost  of 
production,  1918  and  1919  (pp.  35). 

In  the  Miscellaneous  Series  of  the  Bureau  of  Foreign  and  Domestic  Com- 
merce, has  appeared  No.  109,  Trade  of  the  United  States  with  the  World, 
1919-1920 ■■  Imports  (^p.  128). 

The  Bureau  of  the  Census  has  issued  Bull.  147,  Cotton  Production  and 
Distribution,  Season  of  1920-1921   (Washington,  1921,  pp.  138). 

Part  II  of  the  summary  of  report  of  the  Federal  Trade  Commission  on 
the  Pacific  Coast  Petroleum  Industry  deals  with  Prices  and  Competitive 
Conditions  (Washington,  1921,  pp.  21). 

The  Federal  Trade  Commission  has  adopted  a  plan  of  printing  its  deci- 
sions as  separates,  each  decision  being  a  pamphlet  in  itself.  These  separates 
begin  with  No.  137. 

Part  I  of  the  report  of  the  Joint  Commission  of  Agricultural  Inquiry  is 
entitled  The  Agricultural  Crisis  and  Its  Causes.  This  appears  as  H.  R. 
408,  67  Cong.,  1  Sess.  (Washington,  1921,  pp.  240).  It  contains  a  large 
amount  of  statistical  material  illustrated  by  charts.  Among  the  chapter 
headings  are  to  be  noted  "The  farmer's  dollar  in  1920-21,"  "Relative  growth 
of  agriculture  and  other  industries  in  quantity  production,"  "Production 
and  consumption  of  farm  products  and  their  relation  to  prices,"  "Farm 
mortgages,"  "Farm  tenancy,"  and  "Transportation."  Part  II  is  on  Credit 
(pp.  159).  Considerable  space  is  devoted  to  federal  reserve  policy  in  rela- 
tion to  agricultural  interests. 

The  Bureau  of  Markets  and  Crop  Estimates  of  the  federal  Department 
of  Agriculture  has  issued  Bull.  1002  on  Open  Types  of  Public  Markets,  by 
McFall  Kerbey  (pp.  18). 

The  Bureau  of  the  Census  has  issued  a  bulletin  on  agriculture  entitled 
Summary  of  the  Census  of  Agriculture  for  the  United  States,  1919  and 
1920  (pp.  76). 

The  Portland  Chamber  of  Commerce  has  for  circulation  a  quarto 
pamphlet  entitled  General  Survey,  Columbia  River  Gateway  Country.  This 
contains   many   interesting   maps   and   charts    comparing   the    Pacific    coast 


1922]  Labor  3TT 

with  the  Atlantic  coast,  population  distribution,  trade  territory  analysis, 
railroads  of  the  Pacific  coast,  Pacific  Ocean  traffic,  manufacturing  plants, 
and  financial  standing  of  the  Pacific  coast  cities. 

There  has  been  received  from  the  Chamber  of  Commerce  of  the  United 
States  (Washington)  a  mimeographed  statement  dealing  with  the  investi- 
gation of  the  retail  meat  trade  and  an  advance  report  of  an  investigation 
which  has  been  made  by  the  Bureau  of  Markets  of  the  United  States  Depart- 
ment of  Agriculture  on  this  subject. 

From  the  Special  Delegation  of  the  Far  Eastern  Republic  to  the  United 
States  several  pamphlets  have  been  received,  among  which  may  be  noted 
The  Fur  Industry  of  the  Far  Eastern  Republic  (pp.  13),  and  The  Forest 
Resources  (pp.  12).     Address,  2016  O  Street,  N.  W.,  Washington,  D.  C. 

Attention  should  have  been  earlier  directed  to  the  valuable  report  of  the 
New  York  and  New  Jersey  Trade  and  Harbor  Development  Commission, 
made  in  1920.  This  report  contains  a  large  amount  of  economic  data  deal- 
ing with  the  history  of  shipping  and  railroad  development  in  New  York, 
motor  truck  service,  warehousing,  markets,  and  food  distribution  (pp.  495). 

Corporations 

The  National  Association  of  Owners  of  Railway  Securities  (Baltimore) 
has  published  an  Analysis  of  the  United  States  Supreme  Court  Decision, 
Wisconsin  Rate  Case,  by  S.  Davies  Warfield  (pp.  24). 

The  National  Coal  Association  (Washington,  D.  C.)  prints  in  pamphlet 
form  Statement  of  J.  D.  A.  Morroxv  before  the  Interstate  Commerce  Com- 
mission in  the  Hearing  on  Railroad  Rates,  Fares  and  Charges,  January  19, 
1922  (pp.  29). 

President's  Conference  Committee  (737  Commercial  Trust  Building,  Phil- 
adelphia, Pa.)  has  printed  a  statement  prepared  by  Frederick  H.  Lee  on 
the  Developments  in  Connection  ivith  Federal  Valuation  (January  20,  1922, 
pp.  16).  In  this  connection,  attention  may  be  called  to  the  statement  of 
Mr.  Charles  Hayden,  chairman  of  the  Board  of  Directors  of  the  Chicago, 
Rock  Island  and  Pacific  Railway  Company,  to  the  stockholders  under  date 
of  January  7,  1922,  in  regard  to  the  federal  valuation  of  the  company's 
physical  property. 

Labor 

The  federal  Bureau  of  Labor  Statistics  has  issued  the  following  bulletins : 

No.  287,  National  War  Labor  Board,  containing  a  history  of  its  forma- 
tion and  activities,  together  with  its  awards  and  the  documents  of 
importance  in  the  record  of  its  development  (Washington,  1922, 
pp.  324). 

No.  291,  Carbon-monoxide  Poisoning,  by  Alice  Hamilton   (1922,  pp.  47). 

No.  292,  Labor  Legislation  of  1920,  by  Lindley  D.  Clark  (pp.  152). 

No.  294,  Wages  and  Hours  of  Labor  in  the  Slaughtering  and  Meat-pack- 
ing Industry,  1921   (February,  1922,  pp.  93). 


378  Documents  and  Notes  [June 

The  Bureau  of  Mines  of  the  Department  of  the  Interior  has  prepared 
summaries  on  Quarry  Accidents  in  the  United  States  during  1920  (Wash- 
ington, 1922,  pp.  6Q),  and  Metal-mine  Accidents  in  1920  (pp.  99).  These 
two  reports  are  prepared  by  William  W.  Adams. 

The  United  States  Public  Health  Service  has  for  circulation  a  small 
pamphlet.  Sickness  Frequency  among  Industrial  Employees.  This  is  a 
reprint  of  No.  624,  originally  published  in  December,  1920  (Washington, 
1921,  pp.  12). 

From  the  United  States  Railroad  Labor  Board  has  been  received  Average 
Daily  and  Monthly  Wage  Rates  of  Railroad  Employees  on  Class  1  Carriers, 
October,  1921  (Chicago,  1922,  pp.   13,  with  table). 

The  Coal  Age,  (Tenth  Ave.  and  36th  St.,  New  York  City)  is  publishing  a 
series  of  bulletins  dealing  with  the  coal  crisis. 

No.  4,  vol.  II,  Wisconsin  Safety  Revietc,  published  in  October,  1921, 
deals  with  General  Accident  Statistics  for  Wisconsin  (pp.  124).  This 
commission  in  Wisconsin  Labor  Market,  published  monthly,  January,  1922, 
calls  attention  to  the  "all-inclusive  employment  index"  which  it  has  pre- 
pared. 

The  University  Extension  Division  of  the  University  of  Wisconsin  has 
issued  supplementary  sheets.  Circular  no.  9,  Industrial  Housing,  and  Cir- 
cular no.  10,  Government  in  Industry. 

Money,  Prices,  Credit,  and  Banking 

The  First  Federal  Foreign  Banking  Association  (40  Wall  St.,  New  York) 
is  issuing  a  series  of  bulletins  dealing  with  organization  of  foreign  credit. 

The  Fifth  Annual  Report  of  the  Federal  Farm  Loan  Board  has  appeared 
as  H.  R.  Doc.  no.  147,  67  Cong.,  2  Sess.  (Washington,  1922,  pp.  10). 

The  Federal  Reserve  Bank  of  New  York  has  for  distribution  a  pamphlet 
entitled  "Better  Banking  under  the  Federal  Reserve  System."  These  may 
be  obtained  in  quantity  for  class  use  at  one  cent  apiece. 

Public  Finance 

The  United  States  Internal  Revenue  Office  of  the  Treasury  Department 
has  compiled  Statistics  of  Income  for  1919  (Washington,  1922,  pp.  131). 

From  the  office  of  the  Director  of  the  Bureau  of  the  Budget  (Washington, 
D.  C.)  have  been  received  three  pamphlets,  as  follows:  Message  of  the 
President,  transmitting  the  budget  for  the  fiscal  year  ending  June  30,  1923, 
and  the  Report  of  the  Director  of  the  Bureau  of  the  Budget;  Addresses  of 
the  President  and  the  Director  at  the  second  semi-annual  meeting  of  the 
Business  Organization  of  Government,  held  February  3,  1922;  and  the 
Report  to  the  President  by  the  Director,  transmitting  reports  of  the  chief 
coordinator,  general  supply,  and  the  chairmen  of  the  coordinating  boards. 

Tlie  Chicago  Bureau  of  Public  Efficiency  (315  Plymouth  Court)  has  pub- 
lished two  pamphlets  entitled,  A  Protest  Against  the  Proposed  Nezn'  County 


1922]  Insurance  and  Pensions  379 

Road  Tax  (pp.  8),  and  Suggestions  for  Avoiding  an  Unnecessari/  Increase 
in  School  Taxes  (pp.  6). 

Report  of  the  Commissioners  of  Taxes  and  Assessments  of  the  City  of 
New  York  (1921,  pp.  59)  has  appeared. 

The  following  state  reports  dealing  with  taxes  have  been  received : 

Indiana  Laxv  Relating  to  the  Assessment  and  Taxation  of  Property  Con- 
cerning the  Duties  and  Powers  of  Taxing  Officers  (Indianapolis,  1922, 
State  Board  of  Tax  Commissioners,  pp.  28.5). 

Tenth  Annual  Report  of  the  Colorado  Tax  Commission  (Denver,  1921, 
pp.   123). 

Illinois  Transfer  Tax  Law,  in  Force  July  1,  1921   (Springfield,  pp.  17). 

Eleventh  Annual  Report  of  the  New  Hampshire  State  Tax  Commission, 
1921  (Concord,  pp.  95). 

Sixth  Annual  Report  of  the  State  Board  of  Taxes  and  Assessment  of  New 
Jersey,  1921    (Trenton,  pp.   334). 

Annual  Report  of  the  New  York  State  Tax  Commission,  1920  (Albany, 
1921,  pp.  382). 

Bulletin  no.  9  of  the  Rhode  Island  Tax  Officials  Association,  giving  an 
account  of  the  Proceedings  of  the  Tenth  Annual  Meeting  and  a  brief  state- 
ment in  regard  to  tax  legislation  in  1921    (pp.  22). 

Annual  Report  of  the  Tax  Commission  of  the  State  of  South  Dakota, 
1920-1921  (Pierre,  pp.  111). 

The  Inheritance  Tax  Lazes  of  Wisconsin  (Madison,  1921,  Wisconsin  Tax 
Commission,  pp.  64). 

Insurance  and  Pensions 

Relating  to  workmen's  compensation  are  to  be  noted : 

Fifth  Annual  Report  of  the  United  States  Employees  Compensation 
Commission,  1920-1921   (Washington,  pp.  108). 

Colorado  Workmen's  Compensation  Law  of  1919,  as  amended  in  1921 
(Denver,  pp.  29). 

Ninth  Annual  Report  of  the  Industrial  Commission  of  Wisconsin  on 
Workmen's  Compensation   (Madison,  pp.  90). 

Eleventh  Annual  Report  of  the  United  States  Steel  and  Carnegie  Pension 
Fund,  1921  (Pittsburgh,  pp.  9). 

Senate  document  no.  283  of  the  Massachusetts  Legislature  contains  a 
report  of  the  commission  appointed  in  1921  to  report  on  the  expediency  and 
necessity  of  establishing  a  minimum  standard  of  net  valuation  on  life  insur- 
ance policies  (Boston,  pp.  12). 


NINETEENTH  LIST  OF  DOCTORAL  DISSERTATIONS  IN  POLITICAL 
ECONOMY  IN   PROGRESS   IN   AMERICAN   UNI- 
VERSITIES AND  COLLEGES 

Students  whose  period  of  continuous  non-residence  exceeds  three  years  are  omit- 
ted from  the  list.     The  last  date  given  is  the  probable  date  of  completion. 

The  first  list  of  this  kind  was  dated  January  1,  1904,  and  was  sent  to  all  mem- 
bers, but  not  regularly  bound  in  the  publications.  The  subsequent  lists  have  ap- 
peared in  the  publications  as  follows: 

Second  list,  1905,  in  third  series,  vol.  iv,  p.  737. 

Third  list,  1906,  in  third  series,  vol.  vii,  no.  3,  supplement,   p.  43. 

Fourth  list,  1907,  in  third  series,  vol.  viii,  no.  2,  supplement,  p.  42. 

Fifth  list,  1908,  in  the  BitUettn  for  April,  1908,  p.  69. 

Sixth  list,  1909,  in  the  Bulletin  for  April,  1909,  p.  16. 

Seventh  list,  1910,  in  the  BuUetin  for  March,  1910,  p.  12. 

Eighth  list,  1911,  in  the  Review  for  March,  1911,  p.  212. 

Ninth  list,  1912,  in  the  Review  for  June,  1912,  p.  519. 

Tenth  list,  1913,  in  the  Review  for  June,  1913,  p.  527. 

Eleventh  list,  1914,  in  the  Review  for  June,  1914,  p.  524. 

Twelfth  list,  1915,  in  the  REvaEw  for  June,  1915,  p.  476. 

Thirteenth  list,  1916,  in  the  Review  for  June,  1916,  p.  499. 

Fourteenth  list,  1917,  in  the  Review  for  June,  1917,  p.  485. 

Fifteenth  list,  1918,  in  the  Review  for  June,  1918,  p.  459. 

Sixteenth  list,  1919,  in  the  Review  for  June,  1919,  p.  433. 

Seventeenth  list,  1920,  in  the  Review  for  September,  1920,  p.  692. 

Eighteenth  list,  1921,  in  tlie  Review  for  June,  1921,  p.  388. 

Theory  and  Its  History 

S.  J.  A.  Braxdenburg,  A.  B.  Miami  University,  1904;  Ph.  M.,  Chicago  University, 
1909.  Contributions  of  earlier  economists  to  thought  on  agricultural  economics. 
1922.     Wisconsin. 

Dorothy  Miles  Brown,  A.  B.,  Michigan,  1911;  A.  M.,  1914.  The  theory  of  a 
normal  rate  of  profit.     1922.     Michiyan. 

Carl  Addington  Dawson,  A.  B.,  Acadia,  1912;  B.  D.,  Chicago,  1921.  Social  nature 
of  thinking.     1922.     Chicago. 

Arthur  L.  Faubel,  B.  S.,  New  York  University,  1919;  A.  M.,  Columbia,  1920; 
A.  M.,  Princeton,  1921.     Price  fixing  and  competitive  prices.     1923.     Princeton. 

Joseph  Bradley  Hubb^vkd,  A.  B.,  Wisconsin,  1912;  A.  M.,  1913.  Economic  thought 
in  the  early  middle  ages.     1924.     Harvard. 

Fay  Berger  K^vrpf,  A.  B.,  Northwestern,  1915.  American  social  psychology.  1922. 
Chicago. 

A.  J.  Mertzke,  a.  B.,  Wisconsin,  1916.  Devcloi)ment  of  economics  in  the  South 
prior  to  the  Civil  War.      Wisconsin. 

Ralph  W.  Nelson,  A.  B.,  Phillips,  1915;  A.  M.,  Kansas,  1916;  B.  D.,  Yale,  1918. 
Elements  of  the  social  theory  of  Jesus.     1923.     Chicago. 

Francis  Lester  Patton,  A.  B.,  Ohio  State,  1913;  A.  B.,  Oxford,  1916;  A.  M., 
Oxford,  1919.     Diminishing  returns.     1922.     Columbia. 

Shirley  Donald  Southworth,  A.  B.,  Princeton,  1918;  A.  M.,  1921.  A  history  of 
the  interest  rate  since  1879.     1923.     Princeton. 

Marjorie  Tappan,  A.  B.,  Cornell.     Time  and  the  economic  process.    1922.    Columbia. 

John  B.  Washburn,  A.  B.,  Whitman  Collego,  1910.  The  definition  of  income.  1922. 
California. 


1922]  Doctoral  Dissertations  381 

Economic  History  and  Geography 

Fannie  Fekn  Andrews,  A.  B.,  Radcliffe,  1902;  A.  M.,  1920.  The  mandatory 
System.     Radclife. 

Mandell  Morton  Bober,  S.  B.,  Montana,  1918;  A.  M.,  Harvard,  1920.  The  economic 
interpretation  of  history.     1923.     Harvard. 

Kathleen  Eveleth  Bruce,  A.  B.,  Radcliffe,  1918;  A.  M.,  1919.  The  iron  industry 
in  Virginia  to  1914,  an  historical  study.     1922.     Radclife. 

Roth  Clausing,  A.  B.,  Ohio  Wesleyan,  1912;  A.  M.,  Columbia,  1917.  Theories  of 
the  colonate.     1923.     Columbia. 

C.  Dittmer,  Ph.  B.,  Hamline  University,  1910;  A.  M.,  Wisconsin,  1918.  A  socio- 
economic survey  of  living  conditions  in  North  China.     1923.     Wisconsin. 

Wayland  Fuller  Dunaway,  A.  B.,  A.  M.,  Richmond;  B.  D.,  Th.  M.,  Crozier 
Theological  Seminary;  A.  M.,  Chicago.  History  of  the  James  River  and  Kanawha 
Company.     1922.     Columbia. 

Herbert  Field,  A.  B.,  Union  Theological  Seminary,  1909;  A.  M.,  Columbia,  1921. 
The  anti-rent  movement  in  New  York.     1922.     Columbia. 

Joseph  A.  Geddes,  A.  B.,  Brigham  Young  College,  1907;  A.  M.,  Columbia,  1913. 
Some  economic  aspects  of  the  settlement  and  growth  of  Franklin  County,  Idaho. 
1923.     Columbia. 

Frances  E.  Gillespie,  A.  B.,  George  Washington,  1906;  A.  M.,  Chicago,  1918. 
The   political   history  of  the    English  workingman,    1850-1880.     1922  .    Chicago. 

Wilson  L.  Godshall,  B.  S.,  Pennsylvania,  1919;  A.  M.,  1920.  The  Shantung 
question  in  its  international  relations.     1922.     Pennsylvania. 

Cyril  D.  Hill,  A.  B.,  Washington,  1921.  Origin  of  community  property  system 
in  relation  to  the  property  rights  of  husband  and  wife.  1924.  University  of 
Washington. 

Irving  Jackson.     Russia  and  anarchism.     1924.     California. 

Henry  Francis  Jajies,  Ph.  B.,  Wisconsin,  1915;  Ph.  M.,  1920.  Geography  of  the 
Allegheny  plateau.     1924.     Pennsylvania. 

Samuel  Hagop  Jamgochl?s.n,  S.  T.  B.,  Yale,  1919;  A.  B.,  Amherst,  1920;  A.  M., 
Columbia,  1921.     Future  industries  of  Armenia.     1923.     Columbia. 

Freas  Frederick  Jordan,  S.  B.,  Pittsburgh,  1919;  A.  M.,  Chicago,  1921.  Industrial 
and  commercial  history  of  Pittsburgh.     1923.     Chicago. 

Irving  Stoddard  Kull,  A.  B.,  Beloit,  1909;  A.  M.,  Indiana,  1911.  The  Presbyterian 
Church  and  slavery.     1922.     Chicago. 

Chiang  Liu,  A.  B.,  Cornell  College,  1920;  A.  M.,  Iowa,  1921.  Isolation  and  contact 
as  factors  in  the  cultural  evolution  of  China,  Korea  and  Japan,  before  1854. 
1923.     Iowa. 

Isabel  McKenzie,  A.  B.,  Barnard,  1912;  A.  M.,  Columbia,  1914.  Social  activities 
of  English  Friends  in  the  period  of  industrial  revolution.     1923.     Columbin. 

Walter  Evert  Myer,  A.  B.,  Southwestern,  1910;  A.  M.,  Chicago,  1913.     The  social 

history  of  Kansas.     1922.     Chicago. 
J.  Edwin  Pomfret,  A.  B.,  Pennsylvania,  1920.     France   after  the   restoration  with 

special  reference  to  the  relations  with  the  United  States.     1923.     Pennsylvania. 

Lowell  Joseph  Ragatz,  A.  B.,  Wisconsin,  1920;  A.  M.,  1921.     Economic  decline  of 

the  British  West  Indies.     1923.     Pennsylvania. 
Hannah  Grace  Roach,  A.  B.,  Brown,  1918;  A.  M.,  Radcliffe,  1919.     Sectionalism 

in  American  politics  from  the  reconstruction  period  to  1890.     1922.     Radcliffe. 


382  Doctoral  Dissertations  [June 

Louise  Bertha  Roberts,  A.  B.,  RadcliflFe,  1917;  A.  M.,  1920.  The  diplomatic 
history  of  the  War  of  the  Polish  Succession.     Radcliffe. 

Leo  Rooin,  A.  B.,  Rutgers,  1916.  The  relation  between  farm  and  labor  movements 
since  the  Civil  War.     1923.     Columbia. 

William  Charles  Schluter,  A.  B.,  Iowa  State,  1915;  A.  M.  Columbia,  1916.  Causes 
of  the  business  depressions  1910-11  and  1913.     1922.     Columbia. 

H.  L.  Scott,  Ph.  B.,  Denison,  1911.  The  social  influence  of  oversea  expansion  on 
France,  to  1785.     1922.     Columbia. 

Mark  Anson  Smith,  A.  B.  Dartmouth,  1910;  A.  M.  Wisconsin,  1913.  The  re- 
cent history  of  the  wool  industry.     1923.       Harvard. 

Ruth  Tomlinson,  A.  B.,  Smith,  1911;  A.  M.,  Radcliffe,  1916.  Worcester  County 
economic  history.     1924.     Radcliffe. 

Mart  Allouiz  Waldron,  A.  B.,  Indiana,  1920;  A.  M.,  1921.  History  of  social 
legislation  in  Indiana.     1923.     Indiana. 

Carl  Oscar  Williams,  S.  B.,  Valpariso,  1916;  A.  M.,  Chicago,  1918.  The  history  of 
slavery  in  Iceland.     1922.     Chicago. 

Helen  Russell  Wright,  A.  B.,  Smith,  1912.  Labor  party  politics  in  England  since 
1880.     1922.     Chicago. 

.  Agriculture,  Mining,  Forestry  and  Fisheries 

E.  G.  Aquino,  A.  B.,  Philippines,  1917;  A.  M.,  Yale,  1921.  Agricultural  legislation 
of  the  Philippines.     1924.      Wisconsin. 

F.  A.  Buechel,  Ph.  B.,Wisconsin,  1909;  Ph.  M.,  Wisconsin,  1912.  Relation  of  agri- 
cultural land  rents  to  land  values  in  theory  and  practice.     1923.     Wisconsin. 

Claude  F.  Clayton,  A.  B.,  Missouri,  1915;  A.  M.,  1916.  Price  as  a  factor  in  the 
determination  of  the  choice  of  certain  Minnesota  farm  enterprises.  1924.  Minne- 
sota. 

Paul  Eke,  A.  B.,  Wisconsin,  1920;  A.  M.,  1921.  The  history  of  agriculture  in  Rush 
County.     1923.     Wisconsin. 

Eric  Englund,  B.  S.,  Oregon  Agricultural  College,  1918;  B.  A.,  Oregon,  1919; 
M.  A.,  Wisconsin,  1920.  The  relation  of  free  land  to  American  agriculture; 
historical  study  and  critical  estimate.     Wisconsin. 

Louis  F.  Garey,  M.  S.,  Nebraska,  1916.  The  economic  basis  of  beef  and  pork 
production  in  Minnesota.     1925.     Minnesota. 

R.  L.  GiLLETT,  B.  S.,  Cornell,  1917.     A  study  of  farm  labor  in  Seneca  County,  New 

York.     1922.     Cornell. 
W.  E.  Grimes,  B.  S.,  Kansas  Agricultural  College,  1913.     Measures  of  farm  income. 

1923.      Wisconsiji. 
George  Bradbury  Hill,  A.  B.,  Wisconsin,  1908;  A.  M.,  Columbia,  1920.     A  study  of 

the   statistics  of  agricultural   production.     1923.     Columbia. 

John  Abel  Hopkins,  Jr.,  S.  B.,  Delaware  College,  1917.  The  depression  and  read- 
justment in  agriculture  in  the  United  States  in  1920-1921.     1928.     Harvard. 

A.  W.  Jamison,  B.  S.,  Princeton,  1897;  M.  S.,  Princeton,  1899.  The  agriculture  of 
Illinois.     1923.     Wisconsin. 

P.  E.  McNall,  B.  S.,  Kansas  State  Agricultural  College,  1909;  B.  S.,  1915. 
The  relation  of  the  prices  of  farm  products  to  land  values.     1923.     Wisconsin. 

Berni'ard  Ostrolenk,  B.  S.,  Massachusetts  Agricultural  College,  1911;  A.  M.,  Penn- 
sylvania, 1919.  Social  aspects  of  the  food  surplus  in  the  United  States.  1922. 
Pennsylvania. 


1922]  Doctoral  Dissertations  383 

S.  W.  Shear,  B.  S.,  Wisconsin,  1918;  M.  S.,  1920.  Land  utilization  and  settlers' 
progress  in  northern  Wisconsin.     1923.     Wisconsin. 

George  Ward  Stocking,  A.  B.,  Texas,  1918;  A.  M.,  Columbia,  1921.  Oil  production 
and  the  competitive  system.     1922.     Columbia. 

R.  P.  Teele.     Irrigation  in  the  United  States.     1922.     California. 

G.  S.  Wehrwein,  B.  S.,  Wisconsin,  1913;  M.  S.,  Wisconsin,  1920.  Land  ownership 
and  tenancy  in  the  United  States.     Wisconsin. 

Manufacturing  Industries 

John  C.  Patitz,  A.  B.,  Northwestern,  1916.  The  development  of  manufactures  in 
the  Great  Lakes  Basin.     1922.     Columbia. 

Lawrence  Howard  Seltzer,  A.  B.,  Michigan,  1920;  M.  A.,  Michigan,  1921.  A  finan- 
cial history  of  the  automobile  industry  in  the  United  States.     1923.     Michigan. 

Wn,HAM  George  Sutcliffe,  A.  B.,  British  Columbia,  1919.  The  United  States 
glass  and  pottery  industry.     1923.     Harvard. 

Transportation  and  Communication 

Elizabeth  Cable  Brook,  A.  B.,  Kansas,  1912;  A.  M.,  1913.  The  struggle  for  the 
Interstate  Commerce  Commission.     1922.     Chicago. 

Harcourt  Lenhart  Caverlt,  a.  B.,  Michigan,  1919.  Financial  aspects  of  federal 
railroad  control;  January  1,  1918 — March  1,  1920.     1922.     Michigan. 

Edward  M.  Earle,  B.  S.,  Columbia,  1917;  A.  M.,  1918.  The  Bagdad  Railway  re- 
considered.    1923.     Columbia. 

Hugh  Campbell  Frame,  A.  B.,  Dalhouise,  1917;  A.  M.,  Harvard  1920.  The  division 
of  joint  freight  rates.     1923.     Harvard. 

H.  S.  Gabriel,  B.  S.,  Cornell,  1915;  M.  S.,  Cornell,  1920.  The  transportation  and 
distribution  of  grapes.     1923.     Cornell. 

V.    B.    Hart,    B.    S.,    Cornell,    1&16.     Farm    motor    trucks    in    New    York    state. 

1922.  Cornell. 

James  Noble  Holson,  A.  B.,  Butler  College,  1917;  A.  M.,  Indiana,  1920.  Trans- 
portation rates  and  regional  farm  prices.     1923.     Princeton. 

Joseph  B.  Kenkel,  A.  B.,  St.  Joseph's  College,  1913.  Cooperative  grain  marketing 
at  country  points  in  the  north  central  states.     1922.     Catholic  University. 

Elbert  A.  Kincaid,  A.  B.,  Washington  State,  1910;  A.  M.,  Harvard,  1911.  Federal 
land  grants  to  Central  Pacific  Railway.     1922.     California. 

Raymond  H.  Kinney,  A.  B.,  Oregon,  1920.  Highway  transportation.  1924. 
Pennsylvania. 

Roland  L.  Kramer,  B.  S.,  Pennsylvania,  1919;  A.  M.,  1921.  The  history  of  export 
and  import  railroad  rates  and  their  effect  upon  the  foreign  trade  of  the  United 
States.     1923.     Pennsylvania. 

Andrew  J.  Newman,  A.  B.,  Washington,  1910;  A.  M.,  Missouri,  1911.     The  port  of 

San  Francisco.     1922.     California. 
Marius  Ranson,  a.  B.,  Cincinnati,  1913.     The  cyclization  of  the  railroad  industry. 

1923.  Columbia. 

Mary  E.  Stewart,  B.  S.,  Pennsylvania,  1918;  A.  M.,  1919.  History  of  the  inter- 
nationalizing of  European  rivers.     1922.     Pennsylvania. 

Frank  E.  Williams,  A.  B.,  Wisconsin,  1910;  A.  M.,  1912.  The  port  of  Philadelphia. 
1923.     Pennsylvania. 


384  Doctoral  Dissertations  [June 

Trade,  Commerce,  and  Commercial  Crises 

HiLDiNG  Edward  Anderson,  B.  S.,  Wisconsin,  1917;  A.  M.,  1920.  The  New  York 
butter  market.     1922.     Columbm. 

Theodore  N.  Beckman,  A.  B.,  Ohio  State,  1920.  The  wholesale  dry  goods  trade. 
1924.     Ohio  State. 

William  Arthur  Berridge,  A.  B.,  Harvard,  1914;  A.  M.,  1919.  Unemployment 
and  its  relation  to  the  business  cycle  in  the  United  States  and  the  United  Kingdom. 
1922.     Harvard. 

Norman  S.  Buck,  A.  B.,  Yale,  1913.  The  organization  of  Anglo-American  trade  in 
the  first  half  of  the  nineteenth  century.     1922.     Yale. 

W.  L.  Davis,  Ph.  B.,  Wisconsin,  1904.  Social  effects  of  the  development  of  the  art 
of  selling.     1923.     Wisconsin. 

Henry  L.  Deimel,  Jr.,  A.  B.,  California,  1920.  Survey  of  export  commerce  of  the 
port  of  San  Francisco  in  last  ten  years.     1923.     California. 

John  Truman  Horner,  A.  B.,  Oklahoma,  1909;  B.  S.  and  A.  M.,  1916.  Principles 
of  agricultural  marketing.     1923.     Columbia. 

Thomas  Powderly  Martin,  A.  B.,  Leland  Stanford,  1913;  A.  M.,  California,  1914. 
The  effect  of  trade  on  Anglo-American  relations,  1840-1865.     1922.     Harvard. 

Robert  Louis  Masson,  A.  B.,  Iowa,  1912;  A.  M.,  1915.  The  international  trade  of 
Australasia.     1923.     Harvard. 

Harold  Howard  Maynard,  A.  B.,  Iowa  State  Teachers  College,  1912;  A.  M.,  Iowa, 
1915.     The  marketing  of  northwestern  boxed  apples.     1922.     Iowa. 

W.  E.  Zuech,  a.  B.,  Lenox  College,  1913;  A.  M.,  Clark  University,  1916.  The  credit 
economy  and  the  business  cycle.     1922.     Wisconsin. 

Accounting,  Business  Methods,  Investments,  and  the 

Exchanges 

Paul  Moody  Atkins,  A.  B.,  Yale,  1914;  A.  M.,  1915.  The  business  manager's 
administration  of  production.     1922.     Chicago. 

Joseph  Charles  Bartley,  A.  B.,  Villanova,  1916;  A.  M.,  1917.  Government  con- 
trol over  prices  by  the  food  administration.     1922.     Catholic  University. 

Edmund  William  Bradwin,  A.  B.,  Queen's  University,  1914.  Contract  system 
on  railroad  construction.     1922.     Columbia.. 

Edward  Taylor  Bullock,  A.  B.,  Michigan,  1910;  A.  M.,  1912.  The  financial  aspects 
of  highway  construction.     1923.     Harvard. 

Clyde  Ray  Chambers,  A.  B.,  Missouri,  1916;  A.  M.,  Minnesota,  1917.  Farm  land 
valuation.     1923.     Harvard. 

John  Higson  Cover,  A.  B.,  Columbia,  1916;  A.  M.,  1919.  The  economics  of  adver- 
tising.    1923.     Columbia. 

Wallace  M.  Cunningham,  A.  B.,  Roanoke,  1902;  A.  M.,  Princeton,  1903.  The 
automobile  finance  company.     1922.     Pennsylvania. 

H.  B.  Dorau,  a.  B.,  Lawrence  College,  1919;  A.  M.,  Wisconsin,  1920.  The  credit 
of  public  service  corporations.     1923.     Wisconsin. 

Kenneth  Duncan,  A.  B.,  Wabash  College,  1910;  A.  M.,  Wisconsin,  1915.  Equip- 
ment trust   obligations.     1923.     Michigan. 

Paul  F.  Gemmill,  A.  B.  Swarthmore,  1917.  Promotions  in  industry.  1922.  Penn- 
sylvania, 


1922]  Doctoral  Dissertations  385 

G.  Casper  Haas,  B.  S.,  Minnesota,  1921 ;  A.  M.,  1922.  Factor  of  safetv  in  apprais- 
ing land  for  purposes  of  loans.     1924.     Minnesota. 

LuTHEE  A.  Harr,  B.  S.,  Pennsylvania,  1918;  A.  M.,  1920.  Economic  factors  involved 
in  the  formulation  of  the  corporate  mortgage  providing  for  the  issue  of  bonds  in 
series.     1923.     Pennsylvania. 

Julius  Hendel,  B.  S.,  Cornell,  1921.  The  relation  between  the  cash  and  future 
price  of  wheat.     192-t.     Minnesota. 

Albert  Claire  Hodge,  Ph.  B.,  Chicago,  1914.  The  functional  approach  to  account- 
ing problems.     1922.     Chicago. 

Henry  Keller,  B.  S.,  Pennsylvania  State  College,  1920;  M.  S.,  Wisconsin,  1921. 
The  development  of  farm  accounting.     Wisconsin. 

AuDiE  J.  Lyxn,  a.  B.,  Indiana,  1917;  A.  M.,  Toledo,  1919.  Accounting  as  related 
to  farm   administration.     1923.     Chicago. 

Robert  Rockwood  McCormick,  A.  B.,  College  of  Idaho,  1915;  A.  M.,  Columbia, 
1921.     The  financial  support  of  American   private  colleges.     1923.     Columbia. 

Nina  Miller,  A.  B.,  Wisconsin,  1915;  A.  M.,  Columbia,  1918.  Analysis  of  financial 
reports.     1923.     Columbia. 

A.  F.  O'DoNNELL,  B.  S.,  Massachusetts  Institute  of  Technology,  1918.  Financing 
of  hydro-electric  companies  in  California.     1923.     California. 

Frank  Parker,  B.  S.,  Pennsylvania,  1911.  The  cost  of  obtaining  money  to  public 
utilities.     1923.     Pennsylvania. 

W.  E.  Paulson,  Ph.  B.,  Wisconsin,  1917.  Method  of  selling  cherries  in  Door  County. 
1924.     Wisconsin. 

John  Freeman  Pyle,  Ph.  B.,  Chicago,  1917;  A.  M.,  1918.  Commercial  arbitration 
courts.     1923.     Chicago. 

Lloyd  Lorenze  Shaulis,  A.  B.,  Harvard,  1915;  M.  B.  A.,  1921.  The  Boston  produce 
market.     1923.     Harvard. 

John  McKee  Stratton,  LL.  B.,  Colorado,  1917.  A  comparative  study  of  modern 
business  organizations.     1923.     Columbia. 

Robert  Emmett  Taylor,  A.  B.,  Michigan,  1912;  A.  M.,  1913;  LL.  B.,  St.  Louis, 
1917;  LL.  M.,  1920.     Municipal  accounting.     1923.     Chicago. 

Nelson  Clark  Tisdel,  A.  B.,  Missouri,  1920.     Capitalization.     Harvard. 

Warren  C.  Waite,  B.  S,.  Minnesota,  1919;  A.  M.,  1921.  Organization  of  the 
Twin  City  Central  Market.     1924.     Minnesota. 

HsuAN  Wang,  A.  B.,  Syracuse,  1919;  A.  M.,  1920.  Federal  regulation  of  railroad 
securities.     1923.     Columbia. 

Kenneth  Waldie  Webb,  A.  B.,  Haverford,  1918;  A.  M.,  Harvard,  1920.  A  study 
of  the  control  of  management  of   American  business  organization.     Harvard. 

Capital  and  Capitalistic  Organization 

Pembroke  Holcomb  Brown,  A.  B.,  Illinois,  1915;  A.  M.,  1917.  The  expansion 
of  a  corporation  through  profits.     1923.     Illinois. 

Richard  H.  Lansburgh,  B.  S.,  Pennsylvania,  1915;  A.  M.,  1916.  Methods  of  in- 
dustrial organization.     1923.     Pennsylvania. 

William  Harvey  Reeves,  A.  B.,  Pennsylvania,  1916;  A.  M.,  1919.  Federal  and  .state 
regulation  of  corporate  business.     1923.     Columbia. 

Rexford  G.  Tugwell,  B.  S.,  Pennsylvania,  1915;  A.  M.,  1916.  A  definition  of  public 
utility — an  interpretation  of  the  doctrine  of  public  interest  in  economics  and  law. 
1922.     Pennsylvania. 


386  Doctoral  Dissertations  [June 

Labor  and  Labor  Organizations 

Arthur  Emile  Albrecht,  A.  B.,  College  of  the  City  of  New  York,  1916;  A.  M., 
George  Washington,  1917.  The  history  and  organization  of  the  International 
Seamen's  Union  of  America.     1923.     Columbia. 

James  R.  Beverly,  A.  B.,  Texas,  1922.  The  study  of  the  United  States  Railroad 
Labor  Board.     1924.     Texas. 

Lucy  Branham,  A.  B.,  Washington,  1911;  A.  M.,  Johns  Hopkins,  1914.  The  history 
of  labor  and  politics  in  New  York.     1922.     Columbia. 

Elizabeth  Rhodes  Butler,  A.  B.,  Vassar,  1918;  A.  M.,  Columbia,  1919.  Labor 
struggle  between  journeymen  and  master  under  the  guild  system  in  England. 
1923.     Columbia. 

EwAK  Clague,  a.  B.,  Washington,  1917;  A.  M.,  1921.  The  labor  movement  of 
Seattle  and  the  state  of  Washington.     1924.     Wisconsin. 

Jesse  D.  Clarkson,  A.  B.,  Williams,  1918;  A.  M.,  Columbia,  1920.  Labor  and 
nationalism  in  Ireland.     1922.     Columbia. 

Edward  M.  Cohen,  A.  B.,  College  of  the  City  of  New  York,  1918;  A.  M.,  Columbia, 
1921.     The  Independent  Labor  Party.     1922.     Columbia. 

Maurice  C.  Cross,  A.  B.,  Ohio  State,  1915;  A.  M.,  1920.  Government  control  of  labor 
disputes  in  railroads,  public  utilities,  tmd  coal  mines.     1922.     Ohio  State. 

Whitney  Coombs,  A.  B.,  Bowdoin,  1919;  A.  M.,  Columbia,  1921.  The  wages  of 
unskilled  labor  since  1890.     1923.     Columbia. 

Horace  Bancroft  Davis,  A.  B.,  Harvard,  1921.  Conditions  of  building  labor  in  the 
middle  ages.     1923.     Columbia. 

Jean  Davis,  A.  B.,  Bryn  Mawr,  1914;  A.  M.,  Wisconsin,  1920.  Collective  bargain- 
ing in  the  men's  ready  made  clothing  industry.     1922.     Wisconsin. 

William  G.  Eliot,  3rd,  A.  B.,  Reed  College,  1919;  A.  M.,  Harvard,  1920.  Re- 
striction of  output.     1923.     Harvard. 

Herman  Feldman,  A.  B.,  College  of  the  City  of  New  York,  1915;  A.  M.,  Columbia, 
1917.     Seasonal   regularization  of  employment.     1922.     Columbia. 

Carroll  E.  French,  A.  B.,  Monmouth  College,  1916.  The  shop  committee  in  the 
United   States.     1922.     Johns  Hopkins. 

Augusta  Emilie  Galster,  A.  B.,  Illinois,  1918;  A.  M.,  1919.  Women  in  the  labor 
movement  in  Philadelpliia.     1923.     Illinois. 

laiDOR  GiNSBUKG,  A.  B.,  Columbia,  1918.  The  beginnings  of  the  industrial  unionist 
movement  in  twentieth  century  British  Labor.     1923.     Columbia. 

Chari.es  Adams  Gulick,  Jr.,  A.  B.,  Texas,  1918;  A.  M.,  1919.  History  of  the  labor 
policy  of  the  United  States  Steel  Corporation.     1923.     Columbia. 

Alfred  P.  Haake,  A.  B.,  Wisconsin,  1914;  A.  M.,  1916.  Wage  measurement  and 
the  management  of  labor.     1922.     Wisconsin. 

Francis  J.  Haas,  A.  M.,  Marquette  University,  1919.  Shop  collective  bargaining  in 
the  men's  garment  industry.     1922.     Catholic  University. 

Elmo  Paul  Hoiiman,  A.  B.,  Illinois,  1916;  A.  M.,  1917;  A.  M.,  Harvard,  1920. 
Marine  labor  organizations    (seamen's  unions).     1923.     Harvard. 

Cloice  R.  Huwu,  a.  B.,  McKiniiville  College,  1912;  Labor  background  of  the  lumber 
industry  of  the  northwest.     1922.     California. 

Charles  Paddock  Johnson,  A.  B.,  Trinity,  1916;  A.  M.,  Princeton,  1917.  Collective 
bargaining  in  the  New  York  building  trades.     1923.     Princeton. 

Carl  Smith  Joslyn,  A.  B.,  Harvard,  1920.  The  prevention  of  unemployment.  1923. 
Harvard. 


1922]  Doctoral  Dissertations  38T 

Sylvia  Beatrice  Kopald,  A.  B.,  Barnard,  1920;  A.  M.,  Columbia,  1921.  The  in- 
surgent movement  among  the   United  Miners.     1923.     Columbia. 

ViifCEKT  Wesley  Lakfear,  A.  B.,  Texas,  1917;  A.  M.,  1919.  Effect  of  the  recent 
business  cycle  on  the  American  labor  movement.     1923.     Columbia. 

IsADOR  LuBiif,  B.  A.,  Clark,  1916.     Wages  in  the  railroad  industry.     Michigan. 

H.  L.  McCrackex,  B.  S.,  Penn  College,  19U;  B.  S.,  Haverford  College,  1915;  A.  M., 
Penn  College,  1916.  Labor  theories  of  unemployment  and  the  business  cycle. 
1922.     Wisconsin. 

Georgiaxa  Putxam  McEn-tee,  A.  B.,  College  of  Mt.  Saint  Vincent,  1912;  A.  M., 
Columbia,  1919.  The  labor  problem  and  the  social  Catholic  movement  in  Great 
Britain.     1923.     Columbia. 

Earl  Joyce  Miller,  A.  B.,  Simpson,  1916;  A.  M.,  Illinois,  1921.  Shop  committee 
systems  in  industry.     1922.     Illinois. 

RoLASTD  McLeod  Miller.  Labor  legislation  and  its  administration  in  California 
since    1908.     1924.     California. 

Edward  W.  Morehouse,  A.  B.,  Amherst,  1918;  A.  M.,  Wisconsin.  Working  rules 
of  the  clothing  industry.     192-1.     Wisconsin. 

Victor  Pierpoxt  Morris,  A.  B.,  Oregon,  1915;  A.  M.,  1920.  Oregon  Minimum 
Wage   law.     1923.     Columbia. 

Michael  A.  Mulcaihe,  A.  B.,  Notre  Dame,  1917.  The  International  Brotherhood 
of  Electrical  Workers.     1923.     Catholic    University. 

Hazel  Graxt  Ormsbee,  A.  B.,  Cornell,  1915.  The  juvenile  labor  exchange,  in  the 
United  States  and  England,  with  a  statistical  analysis  of  records  in  the  Phila- 
delphia Bureau  of  Compulsory  Education.     1923.     Bryn  Mawr. 

Jacob  Perlmax.     Industrial  government  on   American   railways.     Wisconsin. 

Stuart  A.  Rice,  A.  B.,  Washington,  1912;  A.  M.,  1915.  The  influence  of  class 
mores  upon  the  possibilities  of  labor-agrarian  politics  in  America.     1922.  Columbia. 

Alfred  Rive,  A.  B.,  University  of  British  Columbia,  1921.  History  of  labor  in 
British   Columbia.     1924.     California. 

Nathax  Schaviho,  a.  B.,  Chicago,  1914.  The  effect  of  unemployment  on  the 
policies  of  labor  organizations.     1923.     Columbia. 

H.  H.  Smith,  A.  B.,  Iowa,  1909;  A.  M.,  Washington  University,  1915.  History 
of  the  Western  Federation  of  Miners.     Wisconsin. 

WiLLiAii  Fraxklix  Spafford,  a.  B.,  Rochester,  1915;  A.  M.,  Columbia,  1922. 
Development  of  the  government's  policy  toward  railroad  labor.     1923.     Columbia. 

Marvel  M.  Stockwell,  A.  B.,  Cornell  College,  1920.  History  of  United  States 
Department  of  Labor.     1923.     California. 

Earl  D.  Stroxg,  A.  B.,  Grinnell,  1909;  A.  M.,  Wiconsin,  1912.  Joint  organization 
in  men's  clothing  industry.     1922.     Columbia. 

Paul  S.  Taylor,  A.  B.,  Wisconsin,  1917;  A.  M.,  California,   1920.     The  seamen  of 

the  Pacific.     1922.     California. 
Jexkie  M.  Turxer,  Ph.  B.,  Chicago,  1908;  Ph.  M.,  Wisconsin,  1913.     The  right  to 

organize.     1922.     Wisconsin. 
Rexe  E.  G.  Vaillaxt,  Bachelier  es  Lettres,  Lille,  1908;  LL.  B.,  LL.,  M.,  1910-1911. 

Unemployment  in  France.     1923.     Columbia. 
Frederick  Cortlaxd  Wagxer,  S.   B.,  Columbia,  1914;   A.   M.,  1916.     Incorporation 

of  unions.     1923.     Chicago. 
David  A.   Weiss,  A.  B.,   Wisconsin,   1919;  A.  M.,   Wisconsin,   1920.     The  principles 

of  industrial  arbitration.     1923.     California. 


388  Doctoral  Dissertations  [June 

Sidney  W.  Wilcox,  B.  L.,  Pacific  School  of  Religion,  1905;  S.  T.  B.,  1910.     History 
of  labor  In  Nevada.     1923.     California. 

Alfred  H.  Williams,  B.  S.,  Pennsylvania,  1915;  A.  M.,  1916.     Collective  bargaining 
in  the  Philadelphia  carpet  industry.     1923.     Pennsylvania. 

V.  J.  Wyckoff,  a.  B.,  Johns  Hopkins,  1920.     Wage  policies  of  labor  organizations 
in  periods  of  industrial  depression.     1923.     Johns  Hopkins. 

Grace  E.  Zohbaugh,  A.  B.,  Western  Reserve,  1898;  A.  M.,  Wisconsin,  1921.     Labor 
policy  of  financial  interests.     1923.     Wisconsin. 

Money,  Prices,  Credit,  and  Banking 

James  W.  Angell,  A.  B.,  Harvard,  1918;  A.  M.,  1921.     International  price  levels. 
1923.     Harvard. 

Charles    E.    Artman,    A.    M.,    Columbia,    1918.     Gold    movements    in    relation    to 
foreign  credit  during  the  Great  War.     1923.     Columbia. 

Thomas  Andrew   Beal,  A.   B.,   University  of   Utah,   1906;   A.   M.,   Columbia,   1910. 
The  importance  of  trade  and  bankers'  acceptances  in  business.     1923.     Columbia. 

Haggott  Beckhart,  a.  B.,  Princeton,  1919;  A.  M.,  Columbia,  1920.     The  discount 
policy  of  the  federal  reserve  system.     1923.     Columbia. 

S.  R.  Black,  A.  B.,  Colby,  1921.     Savings  banks  in  the  United  States.     1924.     Johns 
Hopkins. 

John  Ross  Burns  Byehs,  B.  S.,  Pittsburgh,  1918;  M.  S.,  Columbia,  1920.     Banking 
practice.     1923.     Columbia. 

J.  Ray  Cable,  A.  B.,  Missouri,  1913;  A.  M.,  Chicago,  1917.     The  bank  of  Missouri. 
1923.     Columbia. 

Lino  Juan  Castillejo,  A.  B.,  George  Washington   University,   1916;   A.   M.,   1920. 
Pliilippine  currency  during  the  Spanish  rt^'gime.     1923.     Princeton. 

John  Martin  Chapbian,  A.  B.,  Indiana,  1917;  A.  M.,  Columbia,  1920.     Exercise  of 
the  fiscal  functions  of  federal   reserve   banks.     1923.     Columbia. 

J.  B.  Dennison,  B.  S.,  Lenox  College,  1912;  A.  M.,  Wisconsin,  1915.     Land  and 
credit.     1923.     Wisconsin. 

G.    H.    Evans,    Jr.,    A.    B.,    Johns    Hopkins,    1920.     Federal    reserve    notes.     1923. 
Johns  Hopkins. 

Adelbert   Anton    Friedrich,   A.    B.,   Beloit,    1917.     Currency    elasticity    under    the 
federal  reserve  system.     1923.     Chicago. 

Bartow  Griffiss,  A.  B.,  Johns  Hopkins,  1920.     Call  money  rates  on  the  New  York 
money  market.     1923.     Johns  Hopkins. 

Seymour   E.    Harris,   A.   B.,   Harvard,    1920.     A    history   of   the   English   currency 
notes  (Bradburies).     1923.     Princeton. 

Ruth   Jaeger,   A.    B.,   Radcliffe,    1920;    A.    M.,    1921.     Stabilization    of    the    foreign 
exchanges.     1922.     Columbia. 

Clarence    A.    Kulp,    B.    S.,    Pennsylvania,    1917;    A.    M.,    1921.     The    discounting 
function  of  organized  security  markets.     1923.     Pennsylvania. 

Robert   G.    Merhrk,   A.    B.,   Johns    Hopkins,    1917.     The    place   of    the   commercial 
credit  company  in  modern  finance.     1922.     Johns  Hopkins. 

Harry  E.  Miller,  A.  B.,  Boston  University,  1919;  A.  M.;  Harvard,  1920.     History 
of  banking  theory  in  the   United  States  before  the  Civil   War.     1923.     Harvard. 

Waldo  F.  Mitchell,  A.   B.,  Indiana  State  Normal,  1912;   A.  M.,  Wisconsin,  1913. 
Bank  loans  under  the  federal  reserve  system.     1922.     Chicago. 


1922]  Doctoral  Dissertations  389 

JoHx  Devasahayam  Savariroyax  Paul,  A.  B.,  University  of  Madras,  1916;  A.  M., 
Yale,  1921.     The  gold  exchange  standard,  1837-1914.     1923.     Yale. 

F.  A.  Pearson,  B.  S.,  Cornell,  1912.     Agricultural  prices.     1922.     Cornell. 

Hexry  Schexck,  a.  B.,  Harvard,  1903;  A.  M.,  Columbia,  1919.     Dollar  exchange. 

1922.  Columbia. 

Waiter  E.  Spahr,  A.  B.,  Earlham,  1914;  A.  M.,  Wisconsin,  1917.  Clearings  and 
collection  of  checks  in  the  United  States.     1923.     Columhin. 

Eahle  Sylvester  Sparks,  A.  B.,  Texas,  1919;  A.  M.,  1920.  Agricultural  credit. 
Harvard. 

Leland  Spencer,  B.  S.,  Cornell,  1918.  Use  of  store  credit  by  farmers.  1923. 
Cornell. 

Wen  Kai  Takg,  A.  B.,  Carleton,  1919;  A.  M.,  Chicago,  1920.  Banking  concentra- 
tion in  the  United  States.     1923.     Columbia. 

Charles  Sanfohd  Tippetts,  Litt.  B.,  Princeton,  1916.  State  banks  and  the  federal 
reserve  system.     1923.     Princeton. 

Alvik  Samuel  Tostlebe,  A.  B.,  Iowa  State  Teachers  College,  1916;  A.  M.,  Columbia, 

1920.  The  bank  of  North  Dakota;   and  experiment   in   agrarian  banking.     1923. 
Columbia. 

John  Parke  Young,  A.  B.,  Occidental  College,  1917;  A.  M.,  Columbia,  1919;  A.  M., 
Princeton,  1920.     Central  American  currency  and  finance.     1922.     Princeton. 

Public  Finance,  Taxation,  and  Tariff 

A.  J.  Altmeyer,  a.  B.,  Wisconsin,  1914;  A.  M.,  1920.     Recent  applications  of  the 

theory  of  special  assessments.     1923.     Wisconsin. 
Ray  C.  Atkinson,  A.  B.,  Western  Reserve,  1917.     One  per  cent  tax  law  in   Ohio. 

1923.  Columbia. 

E.  C.  Bancroft,  A.  B.,  Acadia,  1914;  A.  B.,  Yale,  191.5.  The  financial  history  of 
Connecticut  since  1861.     1923.     Yale. 

Andries  Johannes  Bruyere,  A.  B.,  Victoria  College,  191.5;  A.  M.,  Harvard,  1921. 
Protection   in   South   Africa.     1922.     Pennsylvania. 

F.  F.  Bltitchett,  A.  B.,  North  Dakota,  1920.  Incidence  of  excess  profit  tax.  1923. 
California. 

Albert   Sa_muel    Keister,   A.    B.,   Otterbein,    1910;    A.    M.,    Columbia,    1911.     High 

school  text  in  finance.     1923.     Chicago. 
MiCHiEL  Hendrich  de  Kock,  a.   B.,  Cape  of  Good   Hope,  1915;  A.   M.,   Harvard, 

1921.  The  finances  of  South  Africa,  1910-1920.     1922.     Harvard. 

Chuan  Shih  Li,  A.  B.,  Beloit,  1920;  A.  M.,  Chicago,  1921.  Fiscal  relations  be- 
tween the  central,  the  provincial,  and  the  local  governments  in  China.  1922. 
Columbia. 

Ting  Mien  Liu,  A.  B.,  Michigan,  1920;  A.  M.,  Ohio  Wesleyan,  1921.  A  compara- 
tive study  of  the  tariff  systems  of  the  Powers.     1923.     Columbia. 

Chunjien  Pao,  a.  B.,  Pekin,  1919;  A.  M.,  Columbia,  1921.  The  business  tax. 
1923.     Columbia. 

Harvey  WiirrEFiELD  Peck,  A.  M.,  Yale,  1907;  Ph.  D.,  1913.  Contemporary  fiscal 
theories.     1922.     Columbia. 


Population  and  Migration 


Gladden  Whetstone  Baker,  A.  B.,  Washburn  College,  1916;  A.  M.,  Yale,  1920. 
Race  and  nativity  as  factors  in  the  mortality  of  New  York  state  and  Pennsylvania. 
1922.     Yale. 


I 


390  Doctoral  Dissertations  [June 

Nyok  Zoe  Dong,  A.  B.,  Smith  College,  1920.  The  Chinese  families  of  Philadelphia. 
1924.     Bryn  Mawr. 

Marcus  Lkk  Hansen,  A.  B.,  Iowa,  1916;  A.  M.,  1917.  The  problem  and  distribution 
of  immigration,  1820-1860.     1922.     Harvard. 

George  E.  Hartmann,  A.  B.,  Cincinnati,  1917.  Race  consciousness:  a  function  of 
race  prejudice,  with  particular  reference  to  the  American  negro.     1923.     Chicago. 

Vivien  Kellems,  A.  B.,  University  of  Oregon,  1918;  A.  M.,  1921.  Social  control  of 
population.     1923.     Columbia. 

Clemens  Niemi,  A.  B.,  Minnesota,  1915;  A.  M.,  Chicago,  1919.  The  Finish  element 
in  the  American  population.     1922.     Chicago. 

Chables  Wooten  Pipjvin,  a.  B.,  Henderson-Brown,  1918;  A.  M.,  Vanderbilt,  1919. 
The  social  history  of  the  negro  in  Arkansas  and  Tennessee,  with  a  suggested 
program  for  the  social  policy  of  the  future.     1922.     Harvard. 

Edward  G.  Pttnke,  B.  S.,  Hastings,  1916.  The  effects  of  industrial  depressions  on 
marriage  and  birth  rates.     1922.     Pennsylvania. 

JoHANN  TiioRSTEN  Sellin,  A.  B.,  Augustaua,  1915;  A.  M.,  Pennsylvania,  1916. 
Marriage  and  divorce  legislation  in  Sweden.     1922.     Pennsylvania. 

B.  M.  Stewart,  B.  M.,  A.  M.,  Queen's,  1911.  Immigration  and  settlement  in 
Canada  before  confederation.     1922.     Columbia. 

Shuiciiio  Sugiyama,  a.  B.,  Waseda,  1919;  A.  M.,  Valparaiso,  1920;  A.  M.,  1921. 
The  Japanese  in  California.     1923.     Indiana. 

W.  R.  Tylor,  a.  B.,  Swarthmore,  1911;  A.  M.,  Wisconsin,  1916.  The  natural  in- 
crease of  contemporary  populations.     1923.     Wisconsin. 

Social  Problems  and  Reforms 

Gordon  Willard  Ai.lport,  A.  B.,  A.  M.,  Harvard.  An  experimental  study  of  the 
traits  of  personality  with  applications  to  the  jjroblem  of  social  diagnosis.  1922. 
Harvard. 

Ray  E.  Bauer,  A.  B.,  Campbell  College,  1913;  A.  M.,  Wisconsin,  1920.  Changes  in 
the  size  of  American  families.     1923.     Wisconsin. 

Elizabeth  Faulkner  Baker,  B.  L.,  California,  1914;  A.  M.,  Columbia,  1920.  Pro- 
tective legislation  for  women  in  the  state  of  New  York.     1923.     Columbia. 

Joseph  D.  Decker,  A.  B.,  Routt  College,  1920;  A.  M.,  Catholic  University.  The 
problem  child  in  the  home  and  schools  of  Washington,  D.  C.  1923.  Catholic 
University. 

Martin  Hayes  Bickham,  A.  B.,  Pennsylvania,  1908;  A.  M.,  Chicago,  1917.  The 
social  evolution  of  democracy.     1922.     Chicago. 

Lloyd  E.  Blauch,  A.  B.,  Goshen,  1915;  A.  M.,  Chicago,  1917.  History  of  federal 
legislation  for  industrial  education.     1923.     Chicago. 

Viva  Belle  Boothe,  A.  B.,  Texas,  1918;  A.  M.,  Pennsylvania,  1920.  The  political 
party — a  social  process.     1923.     Pennsylvania. 

Emerson  O.  Bradshaw,  Ph.  B.,  Ciiicago,  1910;  A.  M.,  1911.  Social  forces  affecting 
the  life  of  the  industrial  community.     1922.     Chicago. 

Beulah  Belle  Briley,  B.  S.,  Iowa  State,  1917;  M.  S.,  1918;  A.  M.,  Iowa,  1920. 
The  economic  efficiency'  of  the  single  family  as  a  household  unit.     1922.     Iowa. 

Alice  S.  Cheyney.  A.  B.,  Vassar,  1909.  A  definition  of  social  work.  1922. 
Pennsylvania. 

WiLLiAsi  Fisher  Byron,  B.  S.,  Pennsylvania,  1914.  Case  studies  of  juvenile  de- 
linquents with  institutional  experience.     1923.     Chicago. 


1922]  Doctoral  Dissertations  391 

Hahmon  O.  DeGraff.  B.  DI.,  Iowa  State  Teachers  College,  1908;  A.  B.,  Iowa,  1916; 
A.  M.,  1918.     Juvenile  delinquency  in  Iowa.     1922.     Iowa. 

Ctphian   Emaxuel.     The   social   work   of   Saint   Vincent   de   Paul.     1922.     Catholic 

University. 
Louis   J.    Fries.     Truancy   in    the    parochial    schools    of    Washington,   D.    C.     1923. 

Catholic  University. 
Warner  E.  Gettts,  A.  B.,  Hiram,  1914;  A.  M.,  Ohio  State,  1916.     The  Malabites: 

a  study  of  degenerates.     1922.     Ohio  State. 

H.  B.  Hawthork,  B.  S.,  Iowa  State,  1914;  M.  S.,  191.5.  The  comparative  psychic 
efficiency  of  rural  social  groups.     1923.     Wisconsin. 

Norman  Sylvester  Hayner,  A.  B.,  Washington,  1920;  A.  M.,  Chicago,  1921.  The 
hotel  population  of  Chicago:  an  aspect  of  the  housing  problem.     1923.     Chicago. 

Maurice   Beck    Hexter,   A.    B.,   Cincinnati,   1912.     Community   organization.     1923. 

Harvard. 
Margaret    Hodgen,   B.    L.,    California,    1913.     Workers'    education    in    history    and 

theory.     1922.     California. 

Elizabeth  Pixney  Hunt,  A.  B.,  Bryn  Mawr,  1912;  A.  M.,  1920.  Infant  and 
maternity  care  in  relation  to  the  state.     1924.     Bryn  Mawr. 

Helen  Rankin  Jeter,  A.  B.,  California,  1917;  A.  M.,  Chicago,  1920.  The  Chicago 
Juvenile  Court.     1922.     Chicago. 

William  Henry  Jones,  A.  B.,  Washburn,  1918;  A.  M.,  Chicago,  1919;  D.  B., 
Chicago  Theological  Seminary,  1921.  Negro  vice  in  the  city  of  Chicago.  1923. 
Chicago. 

Russell  R.  Kletzing,  A.  B.,  Northwestern,  1914.  The  place  of  the  Church  in 
growth  of  the  functional  idea  of  economic  distribution.     1924.     Chicago. 

Oswald  Rothsay  Layers,  A.  B.,  Queen's,  1913;  A.  M.,  Chicago,  1920.  The  social 
significance  of  housing.     1923.     Chicago. 

Ernest  Russell  Mowrer,  A.  B.,  Kansas,  1918;  A.  M.,  Chicago,  1921.  Family  dis- 
organization.    1923.     Chicago. 

S.  Howard  Patterson,  B.  S.,  Pennsylvania,  1914;  A.  M.,  1916.  Family  desertion  and 
non-support — a  study  of  court  cases  in  Philadelphia  from  1916  to  1920.  1922. 
Pennsylvania. 

Clifford  Ray  Shaw,  A.  B.,  Adrian,  1919.     Juvenile  delinquency.     1924.     Chicago. 

Ernest  Hugh  Shideler,  A.  B.,  Ottawa,  1915;  A.  M.,  Chicago,  1917.  Social 
heredity.     1923.     Chicago. 

Amy  Eaton  Watson,  A.  B.,  Brown,  1907;  A.  M.,  Pennsylvania,  1910.  Social  treat- 
ment of  illegitimate  mothers.     1922.     Bryn  Mawr. 

Francis  M.  Wetherill,  A.  B.,  Pennsylvania,  1906;  A.  M.,  1911.  Self-government 
in  penal  institutions.     1923.     Pennsylvania. 

Donald  R.  Young,  A.  B.,  Lafayette,  1919;  A.  M.,  Pennsylvania,  1920.  Motion 
pictures — a  study  in  social  legislation.     1923.     Pennsylvania. 

Erle  Fiske  Young,  Ph.  B.,  Chicago,  1917;  A.  M.,  1920.  Race  prejudice.  1922. 
Chicago. 

Insurance  and  Pensions 

Olga  Halsey.,  a.  B.,  Wellesley,  1912;  A.  M.,  1916.     Unemployment  insurance.     1923. 

Wisconsin. 
Harry  J.  Loman,  B.  S.,  Pennsylvania,  1919.     Credit  insurance.     1923.  Pennsylvania. 

Edward  L.  McKenna,  A.  B.,  Columbia,  1913;  A.  M.,  Illinois,  1914.  Title  insurance. 
1923.     Pennsylvania. 


392  Doctoral  Dissertations  [June 

Pauperism,  Charities,  and  Relief  Measures 

Ralph  P.  Holbex,  A.  B.,  Franklin  and  Marshall,  1913.  Poverty  in  its  relation  to 
education.     1922.     Pennsylvania. 

Samuel  Caleb  Ratcliife,  A.  B.,  Mount  Allison,  1909;  A.  M.,  D.  B.,  Alberta,  1918. 
The  historical  development  of   poor-relief  legislation   in   Illinois.     1922.     Chicago. 

Socialism  and  Co-operative  Enterprises 

Samuel  Berksteix,  A.  B.,  College  of  the  City  of  New  York,  1919;  A.  M.,  Columbia, 
1920.     The  origins  of  the  guild  socialist  movement  in  England.     1922.     Columbia. 

Paul  L.  Miller,  A.  B.,  Hiram  College,  1913;  A.  M.,  Michigan,  1915.  The  principles 
of  cooperation  with  special  reference  to  agriculture.     1923.     Minnesota. 

Statistics  and  Its  Methods 

Frank  Clyde  Baker,  A.  B.,  Oberlin,  1886;  B.  D.,  Yale,  1890;  LL.  B.,  New  York 
University,  1900;  LL.  M.,  1907.  A  statistical  study  of  the  local  distribution  of 
voting  on  constitutional  amendments  by  the  population  of  New  York  City.  1922. 
Columbia. 

Edgar  Paul  Herman,  A.  B.,  Illinois,  1913.     Business  statistics.     1923.     Chicago. 

John  Randolph  Riggleman,  A.  B.,  Cornell  College,  1918;  M.  B.  A.,  Harvard,  1920. 
Graphic  methods  in  the  analysis  and  presentation  of  business  statistics.  1923. 
Harvard. 

Frank  Alexander  Ross,  Ph.  B.,  Yale,  1908;  A.  M.,  Columbia,  1913.  Illiteracy  and 
school  attendance;  a  statistical  analysis.     1922.     Columbia. 


NOTES 

The  Executive  Committee  has  voted  to  hold  the  annual  meeting  of  the 
American  Economic  Association  next  December  in  Chicago. 

The  following  names  have  been  added  to  the  membership  of  the  American 
Economic  Association  since  the  first  of  February: 

Aburagi,  H.,   No.   6  Zoshigawa,   Koishikawa,   Tokyo,  Japan. 

Barnes,  H.  E.,  Clark  University,  Worcester,  Mass. 

Butterbaugh,  W.  E.,  Svracuse  Universitv,  Svracuse,  N.  Y. 

Case,  H.  C.  M.,  43.3  W.'Cilman  St.,  Madison,'Wis. 

Chase,  W.  D.,  Plantsville,  Conn. 

Chen,  P.  C,  336  John  St.,  Ann  Arbor,  Mich. 

Clav,  C.  M.,  Yale  Club,  Vanderbilt  &  44th  St.,  New  York  City. 

Cleveland,  W.  C,  1470  Emerson  St.,  Beloit,  Wis. 

Collier,  G.  W.,  Svcamore,  111. 

Collins,  S.  D.,  Public  Health  Service,  Washington,  D.  C. 

Crampton,  H.,  3187  N.  Ridgewav  Ave.,  Chicago,  111. 

Dodd,  D.  L.,  349  W.  121st  St.,  New  York  City: 

Donnan,  E.,  Welleslev  College,  Welleslev,  Mass. 

Dreyfus,  E.  D.,  807  West  Penn  Bide.,  Pittsburg,  Pa. 

Eisner,  M.,  17  East  42d  St.,  New  York  City. 

Engel,  E.,  Woolworth  Bldg.,  New  York  City. 

Epstein,  R.  C,  Northwestern   Universitv,  Evanston,  111. 

Fining,  J.  N.,  1001  Arcade  Bldg.,  St.  Louis,  Mo. 

Gillman,  J.  M.,  University  of  Pittsburgh,  Pittsburgh,  Pa. 

Ginko,  C.  K.,  c-o  Osaka  Higher  Commercial  School,  Osaka,  Japan. 

Gottlieb,  L.  R.,  116  West  r26th  St.,  New  York  City. 

Griffith,  A.  O.,  30-5  Commerce  Bldg.,  Champaign,  111. 

Guyot,  Y.,  9.5  Rue  de  Seine,  Paris,  France. 

Guest,  H.  W.,  106  E.  Chalmers  St.,  Champaign,  111. 

Halfant,  D.  M.,  804  W.  Illinois  St.,  Urbana,  111. 

Ham,  F.  L.,  La  Salle  Extension  Universitv,  Chicago,  111. 

Hasek,  Professor  Carl  W.,  Box  .560,  State  College,  Pa. 

Helming,  O.  C,  715  East  Third  St.,  Northfield,  Minn. 

Hess,  E.,  12471/2  Kentucky  St.,  Lawrence,  Kans. 

Holden,  O.  F.,  .301  W.  Magnolia  St.,  Austin,  Tex. 

Horner,  J.  T.,  East  Lansing,  Mich. 

Johnson,  M.  C.,  2151  Sherman  Ave.,  Evanston,  111. 

Karelsen,  F.  E.,  Jr.,  35  West  96th  St.,  New  York  City. 

Kilborn,  R.  D.,  Hanover,  N.  H. 

Kono,  H.,  Meiji  University,  Kanda,  Tokyo,  Japan. 

Law,  W.  W.,  Jr.,  State  Tax  Commission,  Albany,  N.  Y. 

Mathewson,  P.,  The  Business  Bourse,  347  Fifth  Ave.,  New  York  City. 

Matsudaira,  Y.,  Yanagi,  Kami-Megaro-Mura,  Ebara-Gun,  Tokyo-Fu,  Japan. 

Mitroff,  v.,  68a  Lincolns  Inn  Fields,  Kingsway,  W.  C.  2,  London. 

Moorhouse,  L.  A.,  State  Agricultural  College,  Fort  Collins,  Colo. 

Morrow,  C.  H.,  12  Pleasant  St.,  Waterville,  Me. 

Morse,  C.  K.,  Curtis,  Neb. 

Myers,  W.  R.,  Universitv  of  Minnesota,  Minneapolis,  Minn. 

Nelson,  R.  W.,  824  E.  College,  Iowa  City,  la. 

Odegard,  S.  L.,  726  E.  Gorham  St.,  Madison,  Wis. 

Ostrolenk,  B.,  Farm  School,  Pa. 

Pantaleoni,  M.,  4  Via  Giulia,  Rome,  Italy. 

Plowman,  E.  G.,  99  Garden  St.,  Cambridge,  Mass. 

Rai,  A.,  The  Tilak  School  of  Politics,  Lahore,  India. 

Rederscheid,  W.,  2390  Creston  Ave.,  New  York  City. 

Reed,  E.  F.,  Miami  University,  Oxford,  Ohio. 

Reynolds,  D.  M.,  First  National  Bank,  Los  Angeles,  Calif. 

Rubins,  M.,  219  Groveland  Ave.,  Minneapolis,  Minn. 

Rufener,  L.  A.,  West   Virginia   University,  Morgantown,  W.   Va. 

Russell,  W.  A.,  University  of  Washington,  Seattle,  Wash. 

Santo,  H.,  157  University  Sta.,  Urbana,  111. 

Shaffer,  H.,  97  Carew  Bldg.,  Cincinnati,  Ohio. 


394  Notes  [June 

Shelton,  H.  G.,  Fisk  University,  Nashville,  Tenn. 

Shenehon,  E.  N.,  1413  Mass.  Ave.,  N.  W.,  Washington,  D.  C. 

Simons,  H.  C,  Jr.,  University  of  Iowa,  Iowa  City,  la. 

Simonds,  A.  T.,  470  Main  St.,  Fitchburg,  Mass. 

Starbuck,  W.  D.  L.,  2  Rector  St.,  New  York  City. 

Thorne,  H.  W.,  536  Roscoe  St.,  Chicago,  111. 

Vernam,  C.  C,  79  Seventh  Ave.,  New  York  Citv. 

Watson,  F.  D.,  Haverford,  Pa. 

Weidler,  W.  C,  Ohio  State  University,  Columbus,  O. 

Wieser,  F.,  XIX |4  Sandgasse  13,  Vienna,  Austria. 

Williams,  D.  O.,  Victoria  Universitv  College,  Wellington,  N.  Zealand. 

Willock,  H.  A.,  54th  St.,  Pittsburgh,  Pa. 

Wolff,  L.  S.,  12  East  70th  St.,  New  York  City. 

Wood,  D.  R.,  Victoria  University  College,  Wellington,  N.  Zealand. 

Zorbaugh,  G.  S.  M.,  206  N.  Murray  St.,  Madison,  Wis. 

The  monograph  by  the  late  Professor  H.  C.  Adams,  "Relation  of  the  State 
to  Industrial  Action,"  published  in  1886  by  the  American  Economic  Associ- 
ation, First  Series,  Vol.  I,  No.  6,  has  long  been  out  of  print.  Its  reprinting 
has  been  suggested,  and  the  executive  committee  of  the  Association  will  be 
glad  to  authorize  this  if  there  be  a  sufficient  demand.  Any  reader  of  this 
note,  therefore,  who  may  wish  to  purchase  a  copy  is  invited  to  notify  Pro- 
fessor Ray  B.  Westerfield,  Secretary  of  the  Association,  Yale  University, 
New  Haven,  Connecticut. 

At  the  fifteenth  annual  meeting  of  the  Mississippi  Valley  Historical 
Association,  held  at  Iowa  City,  May  11-12,  a  paper  was  read  on  "The  Real 
Estate  Bank  of  Arkansas  in  1836,"  by  Dallas  H.  Herndon  of  the  Dallas 
Historical  Commission. 

The  Pollak  Foundation  for  Economic  Research  (William  T.  Foster, 
Director,  Newton,  Mass.)  has  announced  prizes  for  essays  submitted  in  1921 
as  follows:  first  price  of  $1,000,  William  A.  Berridge,  of  Harvard  Univer- 
sity, "Unemployment  and  the  business  cycle";  first  prize  of  $500  for  the 
best  essay  by  a  high  school  student,  Edgar  H.  Ailes,  Northern  High  School, 
Detroit,  Michigan,  "The  advantages  and  defects  of  compulsory  adjudica- 
tion of  industrial  disputes";  second  prize  of  $250  for  the  best  essay  by  a 
college  student,  Bernard  H.  Haggin,  of  the  College  of  the  City  of  New 
York,  "Causes  of  unemployment  and  remedies."  In  all,  209  essays  were 
received.  The  study  of  "Unemployment  and  the  business  cycle,"  by  Mr. 
Berridge,  will  be  published  by  the  Pollak  Foundation.  No  prizes  are 
offered  in  1922. 

The  Academy  of  Political  Science  in  the  City  of  New  York  devoted 
its  semi-annual  meeting,  April  28,  to  the  subject  of  railroads  and  business 
prosperity. 

The  Joint  Census  Advisory  Committee  of  the  American  Statistical  and 
the  American  Economic  Associations  has  printed  its  Third  Report  of  Pro- 
gress under  date  of  December,  1921  (pp.  19).  This  also  appears  in  the 
Journal  of  the  American  Statistical  Association,  March,  1922,  page  82. 

Announcement  has  been  made  of  the  formation  of  a  Financial  Library 
Association  to  be  located  in  Cambridge.  The  title  to  the  library  is  to  be 
vested  in  a  board  of  five  trustees.  It  is  planned  to  issue  200  shares  in  this 
association.      The  cost  of  each  share  will  be  $500.      It  is  expected  that  com- 


1922]  Notes  395 

mercial  and  savings  banks,  investment  banking  partnerships,  stock  exchange 
houses,  insurance  companies,  educational  institutions  and  others  having  an 
interest  in  financial  matters  will  become  members.  The  library  will  be 
administered  by  the  board  of  trustees,  of  whom  one  will  be  Dean  of  the 
Harvard  Graduate  School  of  Business  Administration,  and  the  other  four 
will  be  elected  by  the  shareholders  of  the  association.  There  are  already 
available  for  acquisition  several  private  collections  of  material  essential 
for  the  foundation  of  a  financial  library.  One  collection  contains  a  file  of 
financial  documents  on  over  100,000  corporations. 

Plans  are  under  way  for  the  further  development  of  the  Babson  Institute 
at  Wellesley  Hills,  Mass.  The  extension  is  being  conducted  by  a  board  of 
trustees  of  which  Mr.  George  W.  Coleman  is  chairman.  A  220  acre  plot 
has  been  purchased  and  five  buildings  are  in  process  of  construction,  among 
which  may  be  noted  an  auditorium  to  hold  1800,  where  trade  associates  and 
engineering  societies  may  hold  meetings ;  a  building  for  economics ;  a  build- 
ing for  research  work,  which  will  contain  an  economic  library;  a  building 
to  be  used  as  a  dormitory ;  and  a  fifth  building  to  be  used  as  a  business  office. 
For  the  economic  library,  a  large  European  library  has  been  purchased. 
State  buildings  are  contemplated,  where  products  of  different  sections  of  the 
country  are  to  be  exhibited.  Donations  for  this  purpose  have  already  been 
made.  The  Institute  will  serve  as  a  conference  ground  for  agencies  engaged 
in  production  and  direct  distribution,  and  the  architect's  plans  call  for  two 
campuses,  one  for  production  and  one  for  distribution.  The  Institute  has 
a  paid-in  endowment  of  $250,000,  which  Mr.  Babson  expects  will  shortly 
be  increased  to  $1,000,000.  The  enterprise  is  a  non-profit-making  one,  all 
surplus  receipts  being  turned  into  this  educational  work. 

Dr.  Frederick  L.  Hoffman,  formerly  of  the  Prudential  Insurance  Com- 
pany, has  joined  the  staff  of  the  Babson  Institute,  and  will  have  charge 
of  the  department  of  research,  including  library  facilities. 

A  National  Council  for  the  Social  Studies  completed  its  organization  in 
Chicago  on  February  25.  Its  purpose  is  to  lay  the  foundations  for  training 
democratic  citizens  through  an  adequately  supported  system  of  teaching  in 
the  elementary  and  secondary  schools.  An  advisory  board  was  set  up  com- 
posed of  representatives  of  (1)  the  five  associations  of  scholars  most  near- 
ly related  to  the  purpose  of  the  National  Council — historians,  economists, 
political  scientists,  sociologists,  and  geographers;  (2)  the  national  organ- 
izations of  educational  investigators  and  administrators —  elementary  and 
high  school  principals,  teachers  of  education,  normal  school  principals,  and 
superintendents;  and  (3)  regionary  associations  of  teachers  of  history  and 
civics.  The  function  of  this  advisory  board  is  to  bring  into  the  National 
Council  the  points  of  view  of  the  organizations  represented  by  its  members 
and  to  insure  a  development  of  the  social  studies  which  will  be  in  harmony 
with  the  best  educational  thought  as  well  as  based  on  the  best  present 
practice. 

The  following  officers  were  elected  for  the  year  1922-1923:  L.  S. 
Marshall,  professor  of  economics  in  the  University  of  Chicago,  President; 
Henry  Johnson,  professor  of  history  in  Teachers  College,  Vice-President; 


396  Notes  [June 

Edgar   Dawson,   professor   of   government   in    Hunter    College,   Secretary- 
Treasurer;  E.  U.  Rugg,  Lincoln  School,  New  York,  Assistant  Secretary. 

Persons  who  are  interested  in  the  wholesome  development  of  the  social 
studies,  whether  teachers  or  others,  and  if  teachers,  whether  teachers  of 
the  social  subjects  or  of  some  other  subject,  are  urged  to  communicate  at  the 
earliest  convenient  moment  with  the  secretary  of  the  National  Council, 
Edgar  Dawson,  671  Park  Avenue,  New  York  City. 

A  statement  concerning  the  Food  Research  Institute  of  Stanford  Univer- 
sity, referred  to  in  the  American  Economic  Review,  March,  1922,  page 
204,  has  been  printed,  and  copies  can  be  obtained  from  the  Institute  upon 
application. 

The  American  Association  of  Social  Workers  is  publishing  a  bulletin 
entitled.  The  Compass  (130  East  22nd  St.,  New  York  City).  This  associa- 
tion is  a  professional  organization  of  social  workers.  The  December,  1921, 
issue  of  The  Compass  contains  proposals  made  to  establish  standards  in 
social  work. 

The  New  York  School  of  Social  Work  will  hold  a  summer  session,  June 
29-August  10  (105  East  22  St.,  New  York  City). 

The  National  Bureau  of  Economic  Research  (175  Ninth  Ave.,  New  York 
City)  announces  that  it  has  in  preparation  a  report  on  Distribution  of 
Income  hij  States.  At  the  request  of  Secretary  Hoover,  the  bureau  is  also 
conducting  a  statistical  study  of  unemployment.  This  forms  the  first  part 
of  the  bureau's  projected  study  of  business  cycles. 

Goucher  College,  Baltimore,  is  developing  a  plan  whereby  the  students 
in  the  elementary  course  in  economics  will  be  brought  into  direct  contact 
with  the  modern  methods  of  production  in  factories.  Stores  are  to  be  asked 
to  aid  in  the  use  of  their  plants  as  practical  aids  to  class  discussions  of  the 
theories  of  the  distribution  of  commodities. 

The  department  of  economics  and  sociology,  Ohio  State  University,  has 
been  divided  into  five  distinct  departments  with  separate  heads:  Accounting, 
Professor  George  W.  Eckelberry;  Business  Organization,  Professor  Clyde 
O.  Ruggles;  Economic  and  Social  Geography,  Professor  Clifford  C.  Hunt- 
ington; Economics,  Professor  Matthew  B.  Hammond;  Sociology,  Professor 
James  E.  Hagerty. 

On  May  1  the  headquarters  of  the  Division  of  Analysis  and  Research  of 
the  Federal  Reserve  Board  were  transferred  from  New  York  to  Washington, 
D.  C.  Dr.  H.  Parker  Willis  has  tendered  his  resignation  as  director  of  the 
division,  effective  July  1,  and  Dr.  W.  H.  Steiner  has  been  designated  acting 
chief.  Dr.  Willis  has  been  appointed  consulting  economist  by  the  Board. 
Mr.  H.  W.  Van  Pelt  has  been  designated  assistant  chief  and  will  surpervise 
the  foreign  work  of  the  division.  In  this  work  he  is  assisted  by  several 
research  assistants,  each  of  whom  devotes  attention  to  a  special  group  of 
countries.  These  include  Mr.  Robert  B.  Warren,  formerly  associate  editor 
of  the  Amercan  Citij  Magazine;  Mr.  G.  B.  Slierwell,  formerly  assistant 
manager  of  the  foreign  department  of  the  Battery  Park  National  Bank  of 
New    York;    Mr.    M.    Nadler;    and    Miss    Ruth    Peterson.      The    work    on 


1922]  Notes  397 

domestic  business  conditions  will  be  under  the  supervision  of  Mr.  L.  B. 
Mann.  The  work  of  the  division  will  thus  continue  along  substantially  the 
same  lines  as  heretofore,  principal  consideration  being  given  to  the  per- 
fection of  the  regular  services  in  each  of  these  two  fields,  while  special 
studies  on  topics  of  interest  will  be  made  from  time  to  time  as  deemed 
desirable. 

For  some  time  the  League  of  Nations  has  been  interested  in  the  problem 
of  international  public  finance  and  especially  in  the  very  controversial 
question  of  double-taxation.  The  International  Chamber  of  Commerce 
held  a  meeting  in  London  in  June,  1921,  to  consider  the  question.  Since 
then  several  additional  meetings  have  been  held.  At  the  last  meeting  on 
March  1,  1922,  in  Paris,  the  seat  of  the  international  headquarters,  the 
committee  on  double-taxation  of  the  International  Chamber  of  Commerce 
requested  the  finance  committee  of  the  League  of  Nations  to  take  up  the 
matter  and  to  consider  the  advisibility  of  calling  an  international  conference 
or  series  of  interstate  conferences.  The  committee  further  reported  that 
it  was  inviting  the  national  committees  of  fifteen  countries  of  the  Interna- 
tional Chamber  of  Commerce  to  submit  concrete  plans. 

In  the  meantime,  the  finance  committee  of  the  League  of  Nations  had 
already  decided  to  take  up  the  matter  and  resolved  to  submit  the  entire 
question  to  a  committee  of  four  experts.  The  experts  chosen  were  Sir 
Josiah  Stamp,  to  represent  England;  Professor  and  Senator  Luigi  Einaudi, 
to  represent  Italy;  Dr.  G.  W.  J.  Bruins,  of  the  Rotterdam  University  of 
Commerce,  and  one  of  the  five  economic  experts  at  the  Brussels  conference 
in  1920,  to  represent  the  Netherlands;  and  Professor  Edwin  R.  A.  Seligman, 
of  Columbia,  to  represent  the  United  States.  The  terms  of  reference  to 
the  committee  are  as  follows :  • 

(1)  What  are  the  economic  consequences  of  double-taxation  from  the 
point  of  view:  (a)  of  the  equitable  distribution  of  burdens;  (b)  of  inter- 
ference with  economic  intercourse  and  with  the  free  flow  of  capital.  To 
what  extent  are  these  consequences  similar  in  the  different  types  of  cases 
commonly  described  as  double-taxation. 

(2)  Whether  any  general  principles  can  be  formulated  as  the  basis  for 
an  international  convention  to  remove  the  evil  consequences  of  double 
taxation,  or  whether  conventions  should  be  made  between  particular  coun- 
tries, limited  to  their  own  immediate  acquirements ;  and,  in  the  latter  alter- 
native, whether  such  particular  conventions  can  be  so  framed  as  to  be 
capable  ultimately  of  being  embodied  in  a  general  convention. 

(3)  How  far  the  principles  of  existing  arrangements  for  avoiding  double- 
taxation,  whether  between  independent  nations  {e.  g.,  the  Rome  Convention) 
or  between  the  component  portions  of  a  federal  state,  are  capable  of  applica- 
tion to  new  international  conventions. 

(4)  Whether  or  to  what  extent  a  remedj^  can  be  found  in  an  amendment 
of  the  taxation  system  of  each  individual  country,  independently  of  any 
international  agreement. 

(5)  To  what  extent  the  Conventions  on  the  subject  of  double-taxation 
should  establish  an  international  control  to  prevent  fraudulent  claims. 


398  Notes  [June 

The  so-called  committee  of  experts  lias  begun  its  work  and  there  has 
already  been  a  considerable  interchange  of  material  and  correspondence. 
It  is  hoped  that  a  report  may  be  made  in  the  course  of  the  year. 

E.  R.  A.  S. 

The  Journal  of  Political  Economy  for  February,  1922,  contains  an  article 
on  "The  psychology  course  in  business  education,"  by  Professor  Z.  Clark 
Dickinson,  of  the  University  of  Minnesota;  also  material  for  a  "Program 
for  psychology  in  a  college  of  commerce  and  administration,"  signed  by 
F.  Richardson-Robinson,  F.  A.  Kingsbury,  and  E.  S.  Robinson,  of  the 
University  of  Chicago.  The  same  issue  contains  the  report  of  the  Com- 
mission of  the  Association  of  Collegiate  Schools  of  business  on  "Social 
studies  in  secondary  schools."  This  has  also  been  printed  in  book  form 
(Univ.  of  Chicago  Press,  1922,  pp.  117).  The  latter  contains  a  bibli- 
ography of  nearly  50  pages. 

The  Journal  of  Applied  Sociology  for  December,  1921  (Los  Angeles) 
contains  an  article  on  "Problems  in  teaching  sociology,"  by  Professor  Emory 
Bogardus. 

The  University  of  California  Press  has  issued  a  pamphlet  of  a  series  of 
descriptive  articles  of  more  than  fifty  libraries,  including  private,  public, 
technical,  business,  scientific,  religious  and  other  types,  edited  by  R.  L. 
Power,  associate  professor  of  economics  at  the  University  of  Southern 
California   (3474  University  Ave.,  Los  Angeles,  price  $1). 

In  Education  for  November,  1921,  is  an  article,  "Beginnings  of  the  Com- 
mercial School,"  by  C.  G.  Reigner.  This  is  an  historical  sketch  of  com- 
mercial schools  in  the  United  States. 

The  Bureau  of  Business  Research,  Northwestern  University  School  of 
Commerce,  will  soon  issue,  through  Prentice-Hall,  Inc.,  New  York  City,  a 
volume  on  Selling  Expense  and  Expense  Ratios  in  the  Retail  Distribution 
of  Clothing.  This  study  is  of  the  same  general  type  as  are  the  six  volumes 
on  the  analysis  of  "Costs,  Merchandising  Practices,  Advertising  and  Sales 
in  the  Retail  Distribution  of  Clothing." 

The  office  of  the  Commissariato  Generale  dell'  Emigrazione,  Rome,  has 
printed  a  pamphlet,  In  Memoria  di  Luigi  Bodio,  containing  at  the  end  a 
bibliography  of  his  writings  (pp.  20). 

Wirtschaft  und  Statistik  is  the  title  of  a  new  periodical  issued  quarterly 
by  Der  Statistische  Reichsamt,  Berlin. 

The  Economic  Journal  (London)  notes  that  "under  the  direction  of  his 
widow,  a  collection  of  the  minor  writings  of  Gustav  von  Schmoller,  the 
noted  economist  and  parliamentarian,  has  been  published  under  the  title 
"Zwanzig  Jahre  Deutscher  Politik,  1897-1917,"  (Munich,  Duncker  und 
Humblot,  1921,  pp.  vi,  206)." 

Librairie  Garnier  Freres,  6  Rue  des  Saints-Peres,  Paris,  announces  the 
publication  of  a  social  information  series,  under  the  editorship  of  Professor 
M.  C.  Bougie,  professor  of  economic  history  at  the  Sorbonne. 


1922]  Notes  399 

Appointments  and  Resignations 

Professor  John  D.  Black,  of  the  University  of  Minnesota,  has  been 
granted  leave  of  absence  until  July.  He  is  associated  with  Dr.  H.  C. 
Taylor  in  the  United  States  Department  of  Agriculture. 

Dr.  Roy  G.  Blakey,  of  the  University  of  Minnesota,  will  spend  his 
sabbatical  year,  1922-1923,  in  Europe. 

Mr.  Henry  Clay,  Fellow  of  New  College,  Oxford,  has  been  appointed 
Stanley  Jevons  professor  of  political  economy  and  Cobden  lecturer  in  the 
University  of  Manchester. 

Professor  Z.  Clark  Dickinson,  of  the  School  of  Business  of  the  Univer- 
sity of  Minnesota,  will  give  courses  in  economic  theory  at  the  summer 
session  of  the  University  of  Pennsylvania. 

Dr.  Clyde  Olin  Fisher,  for  the  past  two  years  associate  professor  of 
economics  in  Wesleyan  University,  has  been  appointed  to  a  full  professor- 
ship in  that  institution. 

Mr.  Elisha  M.  Friedman,  is  now  associated  with  the  Overseas  Securities 
Corporation,  14  Wall  Street,  as  Vice-President,  for  which  he  sailed  on 
May  6  on  a  business  trip  to  Central  and  Western  Europe. 

Professor  N.  S.  B.  Gras,  of  the  School  of  Business,  University  of  Minne- 
sota, will  conduct  courses  in  economic  history  at  the  University  of  California 
this  summer. 

Dr.  L.  C.  Gray,  economist  in  charge  of  land  economics.  United  States 
Department  of  Agriculture,  is  a  delegate  representing  the  United  States  at 
the  general  assembly  of  the  International  Institute  of  Agriculture,  con- 
vening May  8  at  Rome.  Dr.  Gray  will  spend  the  summer  studying  land 
problems  and  land  policies  in  various  countries  of  Europe. 

Mr.  Harry  G.  Guthmann  has  been  given  the  rank  of  assistant  professor  of 
finance  and  insurance  in  the  College  of  Business  Administration  at  Syracuse 
University. 

Professor  M.  B.  Hammond,  of  Ohio  State  University,  is  to  give  courses  in 
economics  at  Columbia  University  during  the  present  summer  term. 

Mr.  Chu  Hsiao,  an  instructor  during  this  academic  year  in  the  department 
of  economics  at  the  University  of  Missouri,  will  continue  his  graduate  study 
at  Harvard  University  next  year. 

Professor  Emily  J.  Hutchinson,  of  the  department  of  economics,  Barnard 
College,  Columbia  University,  has  returned  after  a  year's  leave  of  absence 
spent  in  Europe  in  study  of  the  recent  developments  in  the  labor  movement 
and  the  woman's  movement. 

Mr.  Walter  T.  Layton  has  been  appointed  editor  of  the  Economist. 

Professor  James  Mavor  has  been  granted  leave  of  absence  in  1922-1923 
from  the  University  of  Toronto,  and  will  retire  as  head  of  the  department 
of  political  science  at  the  end  of  that  time. 

Professor  Wesley  C.  Mitchell  has  been  appointed  to  a  permanent  pro- 
fessorship at  Columbia  University,  where  he  will  devote  himself  primarily 
to  business  cycles  and  to  the  history  of  modern  economic  theory. 


400  Notes  [June 

Dr.  Bruce  D.  Mudgett,  professor  of  statistics  at  tlie  University  of  Minne- 
sota, will  give  work  in  his  field  at  the  Columbia  University  summer  session. 

Professor  H.  R.  Mussey  has  been  appointed  professor  of  economics  at 
Wellesley,  and  began  work  there  the  second  half-year. 

Professor  Robert  Riegel,  of  the  University  of  Pennsylvania,  will  give 
a  course  in  insurance  and  one  in  statistics  at  Northwestern  University  in 
the  1922  summer  school. 

Mr.  Victor  Rosewater  is  assistant  to  the  president  of  the  Sesqui-Centen- 
nial  Exhibition,  Philadelphia,  1776-1926. 

Professor  Horace  Secrist,  of  the  Northwestern  University  School  of 
Commerce,  has  been  serving  on  the  advisory  board.  Distribution  Division, 
of  the  Joint  Commission  of  Agricultural  Inquiry,  United  States  Congress. 

Dean  F.  T.  Stockton,  of  the  University  of  South  Dakota,  will  teach  at 
the  Johns  Hopkins  University  during  the  summer  session. 

Professor  Harold  J.  Stonier,  of  the  College  of  Commerce  and  Business 
Administration  of  the  University  of  Southern  California,  has  been  appoint- 
ed director  of  the  university's  newest  department,  the  Extension  Division. 
This  department  will  consolidate  the  various  extension  activities  which  have 
hitherto  been  carried  on  by  the  several  colleges  of  the  university. 

Professor  Walter  C.  Weidler,  of  Ohio  State  University  is  to  give  courses 
in  marketing  at  Northwestern  University  during  the  present  summer  term. 

Arthur  Raffalovich,  formerly  the  representative  in  France  of  the  Russian 
ministry  of  finance,  and  well  known  for  his  writings  on  economic  subjects, 
died  in  December,  1921. 


i^- 


I 


The  '^'^ 

American  Economic  Review 

VOL.  XII  SEPTEMBER,  1922  No.  3 

MEMORIAL  TO  FORMER  PRESIDENT  HENRY  C.  ADAMS' 
President  Jacob  H.  Hollander,  Presiding 

Professor  J.  H.  Hollander. — One  of  the  penalties  of  advancing 
years  in  the  life  of  an  association,  as  of  an  individual,  is  that  we  see 
those  who  have  been  with  us  in  earlier  days,  pass.  Thirty-four  years 
is  a  longer  period  in  the  life  of  a  learned  society  than  of  its  members. 
Those  who  enter  are  already  at  manhood,  and  the  span  of  their  scien- 
tific affiliation  is  inevitably  briefer.  One  looks  back  Avith  dismay  as  one, 
insensibly,  passes  into  the  ranks  of  elder  statesmen.  It  seems  not  so  very 
long  ago  since  I  attended  my  first  meeting.  It  was  a  very  much  smaller 
company  than  this,  hardly  more  than  one  hundred ;  for  the  Associa- 
tion was  not  a  fourth  of  its  present  strength.  At  that  meeting,  as  at 
many  thereafter,  one  figure  stood  out  clearly — Henry  Carter  Adams. 
It  was  a  pleasant  figure,  for  he  was  good  to  look  upon — his  manner 
debonair,  his  voice  delightful,  his  bearing  grave  and  courteous. 

Then,  as  always,  my  regard  for  Adams  was  not  only  scientific  admira- 
tion but  institutional  pride;  for  he  was  a  Johns  Hopkins  man.  Our 
"first  graduate"  we  called  him,  in  a  playful  sense.  He  had  been  one 
n^  the  brilliant  company  of  young  scholars  who  gathered  in  Baltimore 
♦vuen  the  doors  of  Johns  Hopkins  were  thrown  open,  and  the  circum- 
stance of  alphabetical  arrangement  placed  his  name  first  in  the  roster 
of  our  alumni.  His  days  at  Johns  Hopkins  were  happy  and  profitable, 
a>:d  we,  on  our  part  have  been  proud  of  his  achievements.  We  wel- 
comed his  return  to  Baltimore  from  time  to  time,  on  great  occasions, 
as  one  whom  we  delighted  to  honor,  and  his  visits  were  memorable  by 
some  message  of  weight  and  distinction.  At  one  time  it  seemed  likely 
chat  he  might  complete  his  academic  career  in  Baltimore;  but  the 
demands  made  upon  his  time  by  public  service  precluded  complete 
transfer  to  academic  duties,  and  he  remained  in  the  forefront  of  our 
most  distinguished  graduates. 

It  is  right  that  a  science  should  honor  its  leaders,  and  it  is  in  this 
spirit  that,  in  the  midst  of  our  scientific  deliberation,  we  have  paused 
for  a  brief  moment,  to  pay  our  devoted  respect  to  Adams'  life  and 
work,  as  it  may  be  told  by  those  who  in  one  relation  or  another  stood 
closest  to  him. 

^Meeting  of  friends  of  Dr.  Adams  at  the  annual  meeting  of  the  American  Economic 
Association  held  in  Pittsburgh^  December  29,  1921. 


402  American  Economic  Association  [September 

Professor  R.  T.  Ely. — Mr.  President  and  friends :  Like  Hollander, 
I  have  always  thought  of  Professor  Adams  as  a  man  of  most  pleasing 
personality.  There  are  two  words  that  occur  to  me  as  I  think  of  him 
— sweetness  and  light.  His  was  an  amiable  and  lovable  personality. 
No  one  could  come  in  contact  with  him  as  I  did  and  not  feel  him  to 
be  a  true  friend.  He  was  cultured ;  he  was  refined ;  he  loved  beautiful 
things ;  he  was  a  seeker  after  truth ;  he  was  one  of  the  younger  pro- 
gressive group  at  the  time  this  Association  was  established.  Adams 
was  always  ready  to  do  his  part  in  any  common  undertaking  and  he  did 
not  think  about  any  reward  or  honor  that  might  come  to  him.  He 
was  never  a  seeker  after  office.  Every  office  that  came  to  him  came 
unsought. 

The  early  days  of  this  Association  were  days  of  struggle.  Only 
those  who  were  closely  associated  with  the  work,  perhaps,  have  any 
idea  how  severe  that  struggle  was.  There  were  many  organizations 
coming  into  existence  and  it  was  not  by  any  means  a  foregone  conclu- 
sion that  the  American  Economic  Association  would  be  the  one  to 
survive. 

I  was  the  secretary  for  the  first  seven  years  of  the  life  of  this  Asso- 
ciation. At  that  time  it  seemed  necessary  that  one  or  two  persons 
should  hold  office  until  the  Association  was  thoroughly  established 
and  on  a  firm  foundation,  and  on  that  account  and  that  account  alone 
I  remained  secretary  for  the  first  seven  years.  On  that  account  and 
that  account  alone.  President  Walker  remained  president  for  seven 
years.  We  did  not  have  any  "finances"  to  speak  of — we  often  did  not 
know  where  "the  next  dinner"  was  coming  from,  but  in  some  way  we 
managed  to  pull  through.  Now,  I  mention  that  in  order  to  emphasize 
the  services  of  Adams  in  those  days  of  struggle,  for  your  secretary 
even  with  the  help  of  General  Walker  could  not  have  "carried  on" 
without  the  whole-hearted  cooperation  of  men  like  H.  C.  Adams. 

When  we  were  getting  up  our  first  volume  for  publication  it  seemed 
to  me  important  that  we  should  have  a  monograph  from  Professor 
Adams,  so  I  asked  him  to  put  into  shape  an  address  that  he  had  given 
and  the  result  was  "Relation  of  the  State  to  Industrial  Action,"  which 
has  had  a  profound  influence  upon  economic  thought  and  economic 
legislation.  Perhaps  no  one  of  us  would  agree  with  all  his  thoughts 
today ;  I  doubt  if  he  would  himself  agree  with  all  of  them  today.  But 
some  things  stand  out  very  clearly  in  that  monograph  and  there  was 
one  plirase  which  I  tliink  reflected  his  ambition;  that  was  "to  raise 
the  level  of  competition  to  a  higher  level."  That  was  something  he  had 
in  mind  and  something  he  ardently  desired. 

He  was  a  thinker  first  of  all — and  I  remember  a  discussion  that  we 
had  years  ago.  It  was  in  Philadelphia,  probably  at  one  of  our  meet- 
ings or  walking  through  the  street,  and  I  expressed  some  doubt  as  to 


1922]         Memorial  to  Former  President  Henry  C.  Adams  403 

certain  phases  of  life.  Adams  replied :  "If  we  only  think  right  we 
should  not  worry  about  the  rest."  And  I  think  that  was  characteristic 
of  the  man — straight  thinking  is  what  he  was  anxious  should  be  attain- 
ed.    Action  would  then  take  care  of  itself. 

It  is  hard  to  express  what  one  feels  on  an  occasion  like  this.  I  did 
not  know  until  a  short  time  ago  that  I  was  to  be  called  upon  to  speak 
but  I  do  desire  to  say  of  him  that,  as  economists,  we  can  be  proud  of 
him.      His  life  was  excellent  and  his  aims  were  high. 

Professor  E.  R.  A.  Seligmax, — It  is  a  great  privilege  to  be  permit- 
ted to  take  part  in  this  tribute  to  a  man  who  Avas  so  universally  re- 
spected and  beloved.  Henry  Carter  Adams  was  born  in  Iowa,  Decem- 
ber 31,  1851,  and  died  on  August  11,  1921.  He  came  of  New  England 
Puritan  stock  on  both  sides.  One  of  his  ancestors  on  the  paternal 
side  settled  at  Cambridge  in  1623.  His  father,  Ephraim  Adams,  was 
a  member  of  that  enthusiastic  group  of  Andover  theological  students 
who  went  in  1842  almost  on  foot,  we  might  say,  from  New  England  to 
the  wilderness  as  it  existed  in  Iowa  in  those  early  days,  in  order  to 
spread  the  gospel.  It  was  this  little  "Iowa  band"  of  Congregation- 
alists  that  was  largely  instrumental  in  founding  Grinnell  College,  the 
first  college  in  Iowa.  Because  of  a  last  liberal  donation  from  a  Mr. 
Carter  of  New  England,  which  made  possible  the  starting  of  the  college, 
Henry  received  the  middle  name  of  Carter. 

Reared  in  the  intense  religious  and  intellectual  atmosphere  of  Puritan 
missionary  life,  he  was  destined  for  the  ministry.  He  was  delicate  as 
a  boy,  and  at  one  time  it  was  even  doubtful  whether  he  could  endure 
the  rigor  of  the  Iowa  winters  and  the  discomforts  of  frontier  life.  He 
was  compelled  on  account  of  his  physical  condition  to  live  much  in  the 
open  and  for  years  he  traversed  the  rolling  prairies  with  a  gun  and  a 
horse,  seeking  to  acquire  the  strength  which  was  so  sorely  needed  and 
laying  the  foundation  for  that  passionate  love  of  nature  which  charac- 
terized him  in  later  life.  As  a  consequence,  his  early  education  con- 
sisted almost  entirely  of  the  training  in  the  languages  that  his  father 
was  able  to  impart  to  him — Greek,  Latin,  and  Hebrew.  He  was  almost 
nineteen  years  of  age  before  he  received  his  first  formal  instruction. 
In  1869,  however,  he  was  able  to  enter  Denmark  Academy,  and  later  to 
attend  Grinnell  College,  from  which  he  graduated  in  1874.  At  that 
time  he  still  intended  to  devote  himself  to  the  ministry,  and  accordingly 
after  a  year's  teaching  at  Nashua,  Iowa,  he  entered  Andover  Theo- 
logical Seminary  in  1875.  Then,  however,  moved  by  the  spirit  of  the 
age,  he  had  his  attention  turned  to  economic  and  social  questions  and 
he  determined  to  study  economic  science,  not  so  much  for  itself  as  con- 
stituting an  avenue  through  which  to  reach  his  goal  of  ethical  reform. 

It  was  now  that  by  chance  he  heard  of  the  founding  of  a  new  insti- 


404  American  Economic  Association  [September 

tution  at  Baltimore,  the  Johns  Hopkins  University.  Having  deter- 
mined to  enter  it,  he  wrote  on  a  few  days'  notice  an  article  in  competi- 
tion for  one  of  the  new  fellowships  and  he  was  fortunate  in  being  one 
of  the  ten,  among  more  than  three  hundred  applicants,  to  receive  a 
fellowship.  This  took  him  to  Johns  Hopkins  and  to  Baltimore,  which 
was  a  revelation  to  him.  There  it  was  that  he  mingled  with  the  galaxy 
of  remarkable  men  Avho  were  associated  together  as  teachers ;  there  it 
was  that  he  first  saw  something  of  the  life  of  the  factory  worker;  there 
it  was  that  he  revelled  in  the  opportunities  for  music  and  art,  for  which 
he  had  been  silently  longing  but  which  he  had  been  unable  to  find  in  his 
country  home.  Thus  he  developed  into  the  man  as  he  was  when  we  came 
to  know  him  a  few  years  later.  After  attaining  his  doctor's  degree  in 
1878 — the  first  one  conferred  by  the  young  university — he  decided 
to  do  what  the  rest  of  us  did,  namely,  to  go  abroad  in  order  to  secure 
his  advanced  training  in  economics  and  social  science.  Without  any 
funds,  he  attracted  the  interest  and  affection  of  President  Gilman  to 
such  an  extent  that  the  money  was  soon  provided.  He  studied  at 
Oxford,  at  Paris,  at  Berlin,  and  at  Heidelberg  for  two  years,  and  he 
there  acquired  a  familiarity  with  the  newer  methods  and  the  newer 
outlook  which  were  to  differentiate  the  young  acolytes  of  economics  on 
their  return  to  this  country. 

Curiously  enough,  he  was  started  on  his  career  through  a  mistake. 
Andrew  D.  White  was,  at  that  time,  American  Minister  to  Berlin,  and 
was  exceedingly  kind  to  all  of  us  younger  students  who  were  pursuing 
our  work  in  Germany.  He  had  met  Adams  there,  but  only  casually; 
and,  when  at  a  watering  place  in  Germany,  he  sent  for  Adams  in  order 
to  discuss  with  him  the  possibility  of  doing  some  work  at  Cornell.  He 
had  intended  to  send  for  the  other  Adams — Herbert  B.  Adams,  the 
historian — and  it  was  only  after  some  little  time  that  Henry  discovered 
that  he  was  the  wrong  man.  I  mention  this  because  it  was  only  a  few 
years  ago  that  he  was  again  mistaken  for  another  Adams.  Here,  how- 
ever, to  his  relief,  he  found  he  was  the  wrong  man.  For  when  Secre- 
tary McAdoo,  thinking  that  he  was  talking  to  Thomas  S.  Adams, 
offered  Henry  a  position  in  the  Internal  Revenue  Department,  Henry 
was  both  complimented  and  embarrassed,  as  he  was  disinclined  to 
accept.  In  1878,  however,  although  he  soon  discovered  the  error,  he 
did  not  give  up  the  fight.  Mr.  White  was  at  that  time  also  interested 
in  economic  questions  and  when  Adams  said  he  thought  he  had  a  mes- 
sage to  give  and  he  could  say  something  to  the  boys  at  Ithaca,  Mr. 
White  asked  him  to  draw  up  a  syllabus.  Adams  worked  all  night  and 
handed  in  his  syllabus  in  the  morning,  with  the  result  that  when  he 
returned  to  this  country,  he  received  an  invitation  to  deliver  lectures 
not  only  at  Cornell,  but  also  at  Johns  Hopkins  and  Michigan. 

It  was  during  these  years  that  he  still  pursued  his  main  quest  of  get- 


1922]         Memorial  to  Former  President  Henry  C.  Adams  405 

ting  economics  and  ethics  in  some  way  or  other  to  align  themselves 
together.  And  yet,  you  will  ask,  how  did  it  happen  that  his  first  book 
should  be  devoted  to  the  uninteresting  subject  (as  it  seemed  at  that 
time)  of  public  debts.  He  told  me  the  story  once.  It  was  this :  Adams 
was  very  ambitious  and  eagerly  desired  to  make  a  reputation.  At  the 
same  time  he  knew  that  his  views  on  social  problems  were  not  wholly 
approved  by  a  great  number  of  people.  He  therefore  determined  to 
seek  a  topic  about  which  nobody  else  in  the  country  would  know  any- 
thing, and  which  would  not  involve  any  questions  of  radicalism  in  social 
policy.  He  cast  about  for  some  time  and  finalh*  selected  this  partic- 
ular subject.  That  explains  why  he  started  out  with  public  finance, 
and  after  five  years  of  strenuous  work  he  made,  as  he  had  hoped,  a  ten- 
strike  with  his  admirable  book  on  public  debts. 

In  the  meantime,  he  had  never  forgotten  his  first  love ;  the  very  paper 
to  which  Professor  Ely  has  referred  was  originally  an  address  which 
was  delivered  before  a  club  in  New  York  in  trying  to  make  the  lawyers 
and  business  men  realize  the  close  connection  of  economics  and  ethics. 
The  point  that  Professor  Ely  has  emphasized  as  characteristic  of 
Adams  is  the  cardinal  one  in  the  interpretation  of  his  personality.  It 
was  his  desire  to  make  people  realize  that  they  move  upward  and 
onward  solely  through  moral  achievement.  This  can  be  illustrated  by 
an  important  episode.  During  the  early  days  of  the  Gould  railroad 
strike  in  1886,  there  was  to  be  at  Cornell  University  a  discussion  of  the 
subject.  The  engineer  who  had  been  invited  could  not  be  present,  and 
at  a  moment's  notice  Adams  was  asked  to  step  into  the  breach  and 
address  the  students.  He  spoke  in  his  accustomed  lucid  way,  and,  as 
he  afterwards  said,  it  was  the  first  time  he  had  ever  talked  to  so  large 
an  audience  with  a  realization  that  he  was  making  an  impression,  and 
that  his  audience  was  being  influenced  b}'  his  opinions.  Unfortunately, 
the  daily  papers  took  the  matter  up  and  in  their  usual  fashion,  gave  a 
distorted  version  of  his  talk.  The  upshot  was  that  Mr.  Henry  Sage, 
the  great  benefactor  of  Cornell,  came  to  President  White  and  said: 
"This  young  man  must  go.  He  is  undermining  the  very  foundation  of 
society."  President  White  very  reluctantly  concluded  that  he  had  no 
alternative  but  to  acquiesce.  The  alumni  at  once  desired  to  make  a 
test  case.  But  Adams  refused  to  allow  this.  It  is  to  the  everlasting 
credit  of  President  Angell  that  immediately  after  this  episode  he  ex- 
tended to  Adams  an  invitation  to  associate  himself  permanently  with 
the  University  of  Michigan.  As  a  consequence  Adams  packed  his  tents 
and  withdrew  silently  from  Cornell.  It  is  interesting  to  note  that  in 
1890  he  was  asked  by  a  unanimous  vote  of  the  Cornell  authorities,  of 
which  Mr.  Henry  Sage  was  still  a  member,  to  return  to  Cornell.  But 
Adams'  logalty  to  Michigan  was  now  so  great  that  he  declined  the 
flattering  ofl'er. 


406  American  Economic  Association  [September 

Adams'  subsequent  career  was  a  distinguished  one.  It  was  now 
that  he  gatliered  about  liim  a  band  of  students  wlio  admired  and  loved 
him.  But  lie  was  soon  called  upon  to  render  very  important  public 
service.  When  tlie  Interstate  Commerce  Commission  was  organized  in 
1887  and  Chief  Justice  Cooley  was  called  to  the  head,  Cooley  saw 
that  one  of  the  fundamental  objects  to  be  accomplished  was  the  col- 
lection of  statistics.  He  accordingly  summoned  his  young  colleague, 
Adams,  to  Washington.  As  we  all  know,  by  the  end  of  the  century 
virtually  the  only  thing  that  remained  of  the  vast  volume  of  work 
attempted  by  the  Commission  during  the  first  decade  of  its  existence 
was  the  work  that  Adams  had  accomplished.  Although  section  20  of 
the  new  law  required  annual  reports  from  the  railways  and  prescribed 
the  items  that  should  be  included,  the  Supreme  Court  held  that  there 
was  no  procedure  provided  to  enforce  compliance  with  the  section  and 
no  penalty  for  refusal  to  comply.  Moreover,  each  carrier  was  keeping 
its  own  accounts  in  a  different  Avay  and  it  became  exceedingly  difficult 
to  formulate  any  accurate  summaries  on  such  disparate  material. 
When  the  railway  bill  of  1906  was  under  discussion  in  Congress,  Pro- 
fessor Adams  succeeded  in  inserting  a  much  more  drastic  provision. 
Almost  no  attention  was  directed  to  this  point,  as  the  discussion  in 
Congress  was  centering  around  the  far  more  important  question  of  the 
rate-making  power.  When  the  law  Avent  through,  the  railways  found, 
to  their  consternation,  that  reports  had  now  to  be  submitted  under 
oatli  with  severe  penalties  for  non-compliance.  Above  all,  the  com- 
mission was  now  given  power  to  establisli  a  uniform  accounting  system 
for  all  tlie  railways  and  to  create  the  board  of  examiners  to  see  that 
the  accounting  regulations  were  obeyed.  The  achievements  of  Adams 
in  this  regard  will  be  more  full}^  treated  by  Professor  Dixon. 

So  great  was  the  reputation  that  Adams  acquired  in  this  way  that 
he  was  summoned  a  few  years  later  by  the  Chinese  government  to  act 
as  its  adviser  in  w'orking  out  for  them  a  system  of  accounting  adapted 
to  the  Chinese  system  of  railroads.  Adams  went  to  China  in  1913  and 
remained  for  four  years.  I  understand  that  the  Chinese  government 
intends  to  put  a  moiunnent  on  his  grave,  together  with  a  memorial 
tablet,  expressing  the  government's  appreciation  of  his  services. 

Notwithstanding  his  busy  life  as  a  college  instructor  and  as  govern- 
ment adviser,  Professor  Adams  always  remained  true  to  his  original 
inclinations,  as  is  evident  from  the  fact  tliat  for  several  summers  he 
delivered  lectures  on  ethics  and  economics  in  the  Plymouth  School  of 
Apjilied  Ethics,  connected  with  the  Society  for  Ethical  Culture.  Adams 
})erhaps  contributed  as  mucli  to  the  success  of  tliat  school  as  any  of  the 
more  specifically  ethical  teachers.      No  one  could  associate  with  him, 

n'he  exercises  eoiineetcd  with  tlie  jil.ieing  of  lliis  tablet  are  referred  to  below, 
p.  411. 


1922]         Memorial  to  Former  President  Henry  C.  Adams  407 

even  for  a  short  time,  without  being  profoundly  influenced  by  his  fine 
personality.  We  must  also  not  forget  his  papers  on  the  social  move- 
ments and  on  the  social  ministry  of  wealth  contributed  to  the  Inter- 
national Journal  of  Ethics. 

A  word  finally  as  to  his  scientific  achievements  in  public  finance. 
His  doctoral  dissertation,  Taxation  in  the  United  States,  1789-1816, 
was  the  first  study  in  this  field  and  at  once  attracted  attention.  His 
book  on  Public  Debts,  published  in  1887,  quickly  became  a  classic. 
But  it  was  now  followed  by  a  more  comprehensive  work.  Adams  was 
the  first  American  scholar  to  write  a  treatise  on  that  topic.  It  is  true, 
indeed,  that,  influenced  by  his  continental  training,  he  made  an  unsuc- 
cessful attempt  to  rechristen  the  subject,  calling  his  book,  after  con- 
tinental precedents.  The  Science  of  Finance.  Today  we  wisely  dis- 
tinguish between  public  finance  and  private  finance.  So  far  as  the  con- 
tent of  the  work  is  concerned,  however,  it  was  a  remarkable  perform- 
ance, and,  like  its  predecessor  on  Public  Debts,  shot  through  with  the 
American  spirit.  Adams  here  again  very  clearly  showed  that  he  was, 
above  all,  a  thinker.  This  was  so  widely  recognized  that  his  colleagues 
elected  him,  after  John  Bates  Clark,  to  the  presidency  of  the  American 
Economic  Association,  thus  confirming  the  general  verdict  that  he  was 
after  Clark  the  ablest  thinker  of  the  time  in  this  country.  So  his  book 
on  finance  is  an  eminently  thoughtful  book.  Written  a  generation  ago, 
it  is  now  somewhat  out  of  date,  but  at  the  time  it  was  a  pathfinder. 
Had  Adams  had  the  opportunity,  had  his  attention  not  been  diverted 
to  this  other  more  insistent'  work  to  which  allusion  has  been  made, 
he  would  have  continued  in  his  chosen  field.  For  although  we  must 
not  forget  the  admirable  practical  work  that  he  did  in  connection  with 
the  Tax  Commission  of  Michigan,  and  the  valuation  for  tax  purposes 
of  the  Michigan  railroads,  he  was  able  to  give  only  a  small  part  of  his 
time  to  public  finance.  Even  recently,  he  told  me — as  we  talked  over 
his  plans  together — of  his  project  for  a  new  edition  of  his  book.  He 
never  lost  interest  in  the  problems  of  public  finance.  He  felt  convinced 
that  they  were  the  most  important  problems  that  confronted  us.  Yet 
because  of  his  other  pressing  engagements,  he  was  unable  to  maintain 
in  the  science  the  primacy  which  he  so  quickly  achieved. 

Yet  as  I  look  back  upon  the  many  years  of  intimate  association  with 
him,  I  should  say  that  far  more  important  than  the  scientist  was  the 
man.  He  possessed  remarkable  qualities  as  a  friend — not  to  speak  of 
those  as  a  husband  and  as  a  father.  He  endeared  himself  to  everyone 
who  knew  him,  and  his  students,  above  all,  had  the  greatest  possible 
afl'ection  for  him.  This  will  no  doubt  be  made  evident  by  some  of  the 
succeeding  speakers. 

When  the  history  of  economics  comes  to  be  written,  I  think  it  may 
be  said  without  peradventure  of  doubt  tliat  Adams  will  occupy  a  place 


408  American  Economic  Association  [September 

in  the  forefront  of  the  ranks  of  American  economists.  In  public 
finance,  in  railroad  transportation,  in  industrial  regulation  he  made 
notable  and  permanent  contributions  to  economic  science.  To  those 
who  were  privileged  to  enjoy  his  friendship,  Henry  Carter  Adams  will 
ever  remain  the  embodiment  of  all  that  is  gracious  and  loyal  and  fine. 

Professor  C.  H.  Cooi.ey. — There  was  something  about  Mr.  Adams 
which  it  is  hardly  possible  to  describe  and  yet  I  am  conscious  that  it 
was  this,  more  than  anything  else  perhaps,  tliat  gave  him  his  very 
great  influence,  at  least  over  me.  I  refer  to  what  I  may  call  the  dis- 
tinction of  his  personality,  somewliat  in  the  French  sense  of  the  word 
distinction— something  unique  and  provocative.  There  is  possibly 
no  man  that  I  have  known  who  would  be  so  inadequately  described  by 
any  mere  enumeration  of  his  private  virtues  or  public  services.  I  might 
almost  use  the  word  "romantic"  in  regard  to  Adams ;  I  think  that  his 
attitude  toward  life  was  essentially  adventurous.  He  seemed  to  accept 
the  precept  of  Emerson — "Always  do  what  you  are  afraid  to  do."  He 
might  hesitate,  but  he  was  very  likely  after  all  to  go  ahead  and  do 
the  thing  he  feared,  and  it  very  often  succeeded.  He  had  the  highest 
aspirations  and  ideals  of  what  he  would  like  to  bring  to  pass  and  what 
American  life  ought  to  be,  ideals  and  aspirations  which  he  very  im- 
perfectly realized.  Consequently,  those  who  knew  him  well  were  aware 
that  he  suffered  constantly  from  moods  of  self-depreciation  and  dis- 
couragement regarding  his  work ;  but  tliese  very  moods  were,  in  a  way, 
inspiring,  because  tliey  were  the  reaction  from  a  higli-minded  struggle 
with  life. 

Mr.  Adams  had  faults  and  weaknesses,  but  they  were  faults  and 
weaknesses  that  were  very  closely  associated  with  something  in  him 
that  was  not  far  from  genius.  His  aspirations  and  ideals  were  im- 
mense. He  was  also  remarkable  for  a  great  sensitiveness  about  every- 
thing that  was  fine  in  conduct  and  about  every  possible  claim  upon 
him  of  a  personal  nature.  I  remember  tliat  when  he  and  I  were  together 
in  Switzerland  (when  I  was  a  boy  and  he  a  young  man),  we  stopped  one 
night  at  a  little  Swiss  inn.  We  had  breakfast  at  the  inn  the  next 
morning  and  then  got  on  our  way.  We  liad  traveled  several  miles  when 
Adams  suddenly  remembered  that  he  had  forgotten  to  tip  the  chamber- 
maid for  some  trivial  service  she  had  rendered  him.  He  almost  suffered 
remorse  because  he  liad  forgotten  this  tip ;  indeed  lie  was  much  inclined 
to  return  and  give  it  to  her. 

There  was  something  in  his  nature,  and  I  think  all  who  knew  him. 
well  will  agree,  that  was  almost  fominine.  I  think  I  may  say  that  in 
my  judgment  his  important  conclusions  were  intuitive,  rather  than 
logical.  I  am  aware  that  no  one  could  give  a  better  account  of  his 
intellectual  processes  than  Mr.  Adams,  but  I  am  inclined  to  think  that 


1922]         Memorial  to  Former  President  Henry  C.  Adams  409 

his  real  method  was  to  see  a  thing  first  by  inspiration  or  imagination. 
He  saw  it  vividl}',  so  that  it  was  quite  impossible  to  shake  his  belief 
in  anything  he  did  see  in  that  way,  and  then  he  would  devise  a  logical 
approach  to  this  point  which  he  had  already  reached  by  what  we  might 
call  a  higher  method. 

Such  traits  of  a  finer  spirit  as  I  have  mentioned  may  account,  even 
more  than  his  tangible  achievements,  for  the  almost  fascinating  influ- 
ence that  Mr.  Adams  exercised  over  those  of  us  who  knew  him  well. 

Professor  F.  H.  Dixon. — My  association  with  Mr.  Adams  began 
very  soon  after  I  entered  the  University  of  Michigan  in  1887  and  con- 
tinued almost  without  interruption  until  his  death.  In  connection  with 
our  intimate  relationship,  there  are  many  things  that  I  might  say  con- 
cerning his  ideals,  his  aspirations,  his  influence.  But  I  have  been  asked 
to  say  something  of  his  connection  with  the  development  of  railway 
regulation. 

As  has  already  been  said,  Mr.  Adams  was  asked  by  Judge  Cooley, 
the  first  chairman  of  the  Interstate  Commerce  Commission,  to  come  to 
Wasliington,  for  a  part  of  his  time  only,  for  the  purpose  of  organizing 
a  statistical  bureau  in  the  newly  created  regulating  agency.  He  un- 
dertook the  task  somewhat  reluctantly,  and  with  the  understanding 
that  his  connection  was  to  be  but  temporary.  But  the  larger  aspects 
of  the  problem  appealed  to  him  and  as  his  conviction  concerning  public 
regulation  developed,  he  found  himself  too  genuinely  devoted  to  his 
plans  for  the  future  to  consider  any  abandonment  of  his  task.  And 
he  remained  in  this  part-time  relationship  for  over  twenty  years. 

When  he  undertook  the  task,  little  if  anything  had  been  done  along 
national  statistical  lines.  Aside  from  beginnings  made  by  a  national 
organization  of  state  railroad  commissioners,  and  by  the  Association 
of  American  Railway  Accounting  Officers,  he  found  little  upon  which 
to  build.  Section  20  of  the  new  law  required  annual  reports  from  the 
railways  and  prescribed  the  items  that  should  be  included. 

Mr.  Adams  immediately  set  about  to  make  this  report  as  complete 
as  possible.  But  he  at  once  encountered  obstacles.  Railways  had  not 
become  accustomed  to  laying  their  affairs  openly  before  the  public. 
Some  of  them  asserted  that  they  lacked  the  information.  Others  de- 
clared that  it  was  impossible  to  compile  it,  because  of  expense  or  its 
relative  inaccessibility.  Some  flatly  denied  the  right  of  the  Commis- 
sion to  ask  for  it.  Mr.  Adams  met  this  difficulty  by  carrying  the  ques- 
tion to  the  courts.  But  the  Supreme  Court  held  that,  under  tlie  law  as 
it  then  stood,  there  was  no  procedure  provided  to  enforce  compliance 
with  section  20  and  no  penalty  for  refusal  to  comply. 

Again  it  developed  that  the  carriers  were  keeping  their  accounts  in 
varying  fashion  and  that  accurate  summaries  could  not  be  built  up  on 


410  American  Economic  Association  [September 

foundations  of  such  diverse  material.  He  realized  that  the  real  prob- 
lem lay  deeper  and  that  the  Commission  must  have  the  authority  to 
prescribe  the  accounting  systems  of  the  railways. 

With  the  amendments  of  1906  came  the  ojDportunity  to  correct  the 
many  weaknesses  in  tlie  law,  and  the  statistical  and  accounting  sections, 
through  Mr.  Adams'  efforts,  were  then  put  upon  their  present  sound 
basis.  Reports  had  to  be  submitted  under  oath  and  penalties  were 
provided  for  non-compliance.  Moreover,  the  Commission  was  given 
power  to  establish  a  uniform  accounting  system  for  all  the  roads,  and 
to  create  a  board  of  examiners  to  see  that  the  accounting  regulations 
were  obeyed. 

Then  began  that  long  series  of  conferences  with  the  Committee  of 
Twenty-five  of  the  American  Railway  Accounting  Officers'  Association 
out  of  which  gradually  emerged  the  uniform  accounting  system  for  the 
railways  of  the  country.  I  attended  a  good  many  of  these  meetings. 
The  discussions  were  frequentW  very  earnest  and  the  tension  Avas  often 
severe.  But  always  at  the  crucial  point  in  the  discussion  Mr.  Adams 
would  inject  the  right  word  and  would  restore  the  temperature  of  the 
room  to  normal.  Such  was  his  kindly  tact  and  so  great  Avas  the  respect 
of  the  members  for  his  judgment  and  his  singleness  of  purpose  that  he 
almost  always  carried  his  point.  The  accounting  system  has  since 
been  extended  to  other  utilities,  and  into  other  jurisdictions,  but  the 
regulations  have  all  been  based  upon  this  pioneer  work.  The  accounting 
system  for  public  utilities  is  the  work  of  Mr.  Adams  and  the  service 
that  this  system  now  performs  for  the  nation  is  a  monument  to  his 
labors. 

Mr.  Adams  had  the  misfortune  that  his  work  was  never  fully  appre- 
ciated by  the  Commission  during  his  years  of  service.  But  he  never 
faltered  in  his  purpose  or  in  his  conviction  as  to  the  significance  of  his 
work.  It  was  his  belief,  amply  justified  since,  that  the  success  of 
administrative  regulation  rested  upon  sound,  intelligible,  uniform  stand- 
ardized accounts.  The  Commission  realizes  this  now  and  calls  con- 
stantl}'  upon  its  Bureau  of  Statistics  and  Accounts  to  aid  in  the 
solution  of  its  problems  of  regulation. 

I  could  describe  many  other  activities  along  the  same  line  in  which 
Mr.  Adams'  farsighted  genius  has  made  permanent  contributions.  But 
I  will  merel}'^  mention  them  for  lack  of  time.  The  Michigan  appraisal, 
in  which  Mr.  Adams  laid  down  some  principles  concerning  valuation, 
was  a  pioneer  undertaking  which  has  guided  many  a  valuation  since. 
Mr.  Adams'  services  have  been  highly  prized  and  frequently  drafted 
in  valuation  proceedings. 

He  was  called  into  the  service  of  the  Ciiinese  government  to  devise 
an  accounting  system  for  its  government  railways.  So  greatly  was 
his  work  appreciated  that  the  Chinese  delegation  in  attendance  upon 


1922]         Memorial  to  Former  President  Henry  C.  Adams  411 

the  Disarmament  Conference  was  imposed  with  the  duty  of  bringing  a 
tablet,  the  gift  of  the  Chinese  government,  to  be  placed  on  his  grave  in 
Ann  Arbor  in  recognition  of  his  services. 

Some  years  ago  in  an  address  on  taxation,  Mr.  Adams  took  up  the 
problem  of  the  "weak  and  strong  road"  which  compete  in  the  same 
territory  and  must  necessarily  charge  the  same  rates,  and  advised  that 
rates  should  be  made  high  enough  to  keep  the  weak  road  in  business, 
and  that  the  excess  earnings  of  the  more  prosperous  road  should  be 
taken  through  taxation.  The  project  was  denounced  as  radically 
socialistic,  yet  this  is  in  substance  the  provision  in  the  present  Trans- 
portation act  of  1920.  These  are  all  but  illustrations  of  that  pioneer 
type  of  mind  that  saw  into  the  future  and  saw  clearly. 

I  cannot  leave  this  platform  without  expressing  my  own  keen  sense 
of  obligation  to  him  for  the  influence  he  exerted  over  his  students, 
particularly  in  directing  their  thoughts  to  the  importance  of  public 
service.  And  his  public  service  ideals  were  practical  ones,  for  he  put 
them  into  very  definite  concrete  form  in  his  many  suggestions  concern- 
ing public  regulation.  It  is  difficult  to  estimate  the  breadth  of  his 
influence  in  this  respect  as  it  is  being  spread  through  the  agency  of 
the  students  that  have  come  into  contact  with  him. 

Mr.  Cooley  has  referred  to  the  intuitive  character  of  Mr.  Adams' 
thinking.  I  am  constrained  to  give  one  interesting  instance  of  this 
that  came  under  my  own  observation  when  I  was  assisting  him  in  his 
course  in  English  economic  history.  As  he  was  one  day  lecturing, 
he  paused  after  making  an  unusually  brilliant  generalization  and  re- 
marked audibly,  "That's  pretty  good ;  I  never  thought  of  that  before." 
The  remark  illustrates  what  to  me  was  another  striking  characteristic 
of  Mr.  Adams.  That  was  his  extreme  modesty  and  self-depreciation. 
After  his  retirement  from  the  university,  lie  received  many  letters  from 
alumni,  expressing  appreciation  of  his  services  to  the  university  and 
of  his  influence  upon  them,  and  these  letters  always  were  read  with  the 
shock  of  pleased  surprise.  He  felt,  particularly  at  the  end  when  his 
body  failed  to  respond  to  tlie  urgings  of  his  will  and  depression  fre- 
quently overcame  him,  that  his  life  had  been  a  failure.  We  all  know 
I  otherwise  and  I,  for  one,  am  glad  to  have  this  opportunity  to  pay 
tribute  to  him  and  to  his  influence  and  his  achievements. 

Professor  D.  Friday. — I  belong  to  very  nearly  the  last  generation 
of  students  who  studied  vinder  Professor  Adams.  I  later  had  the 
privilege  of  working  with  him  in  a  good  deal  of  his  public  and  private 
practice.  Like  every  admiring  student,  I  have  sought  from  time  to 
time  to  praise  his  achievements  and  I  have  come  to  say  one  thing  of 
him  and  to  add  my  story  to  the  things  other  people  have  said  about 
him.      In  thinking  of  his  attainments  m}^  mind  alwa3^s  reverts  to  the 


412  American  Economic  Association  [September 

early  8()'s.  He  conceived  tlie  idea  that  we  sliould  never  have  any 
adequate  control  of  the  railroads  until  we  controlled  their  statistics. 
That  was  not  a  popular  opinion  at  the  time  he  conceived  it  and  he  was 
vilified  for  it  in  the  extreme.  It  is  very  difficult  for  us  to  imagine  how 
much  he  was  abused  for  that  action.  His  diplomacy  and  pleasing 
formality,  and  twenty  years  of  hard  work,  enabled  him  to  bring  order 
out  of  chaos,  and  his  system  of  accounting  for  railroads  is  a  monument 
to  his  woi'k.  That,  to  mj'^  mind,  is  his  great  achievement ;  that  is  the 
attainment  that  impressed  the  student  of  later  years  most.  It  will 
stand  there  as  a  monument  to  his  life  as  civilization  endures. 

Another  thing  that  he  did,  especially  for  those  of  us  who  were 
students,  was  to  give  us  an  insight  into  his  high  ethical  vision.  I  can 
recall  one  instance  when  a  group  of  us  were  sitting  about,  visiting,  in 
tlie  wee  small  hours,  and  the  discussion  ran  to  Adams.  Some  one  re- 
marked about  his  wonderful  influence,  and  Alvin  S.  Johnson  said  that 
the  cause  of  this  influence  was  not  far  to  seek — that  no  knight  of  the 
Middle  Ages  had  ever  fouglit  more  valiantly  than  Adams  fought  for 
the  coming  man. 

His  career  to  me  is  one  of  the  peculiarly  romantic  things  that  Am- 
erica has  brought  forth.  Professor  Cooley  says  he  was  essentially 
romantic  in  his  outlook,  and  to  this  I  would  add  that  to  me  he  exempli- 
fied sweetness,  frankness,  and  sympathy. 

Professor  I.  L.  Sharfman. — However  little  I  can  add  to  what  has 
already  been  said,  Avith  such  sincere  conviction,  concerning  the  life  and 
work  of  Professor  Adams,  I  deem  it  a  great  privilege  to  testify  on  this 
occasion  to  his  delightful  personality,  to  the  breadth  of  his  outlook, 
to  the  great  influence  he  always  exercised  upon  all  who  came  into  con- 
tact with  him.  Professor  Dixon  mentioned  his  modesty  of  spirit. 
This  modesty  was  one  of  the  elTective  sources  of  the  sweetness  of  his 
relatioiislii})  with  the  men  who  came  under  his  influence.  I  recall  seeing, 
in  a  book  of  clippings  relating  to  the  episode  at  Cornell  which  Pro- 
fessor Selignian  described,  an  addendum  in  his  own  handwriting  to  the 
effect  that  this  was  the  flrst  time  he  had  realized  that  anything  he  said 
"might  possibly  be  of  some  importance."  He  believed  not  only  in 
liberty  in  the  larger  sense,  but  in  personal  freedom — for  his  students 
as  well  as  for  himself  and  his  colleagues.  Impatient  of  undue  student 
supervision,  particularly  in  scholastic  matters,  he  was  ambitious  to 
arouse  genuine  intellectual  interests  in  university  men  and  women.  I 
remember  his  telling  me  once  how  it  came  about  that  he  entered  into  the 
field  of  economics.  His  explanation  was  quite  simple.  Destined  for  the 
ministr}',  as  many  distinguislied  scholars  and  ])ublicists  had  been  before 
him,  he  was  early  convinced  that  clear  thinking  was  of  greater  im- 
portance than  effective  exhortation.      For  him,  it  was  clear  thinking 


1922]         Memorial  to  Former  President  Henry  C.  Adams  413 

in  the  fundamentals  of  social  living  tliat  made  the  strongest  appeal. 
His  approach  was  that  of  a  social  philosopher  rather  than  of  an  econo- 
mist in  the  technical  sense.  Practically  all  of  his  academic  achieve- 
ments reflected  this  vital  concern  with  basic  human  relationships.  Yet, 
in  spite  of  this  outstanding  quality,  when  the  opportunity  came,  he 
devoted  most  of  a  period  of  twenty-five  years,  as  statistician  of  the 
Interstate  Commerce  Commission,  to  careful,  technical  work,  and  there- 
by established  a  solid  structure  for  the  control  of  transportation 
agencies  through  accounting  and  statistical  procedure ;  and  when  called 
to  China,  where  the  circumstances  under  which  he  was  to  apply  his 
ideas  dilTered  essentially  from  the  situation  in  the  United  States,  he 
once  again  found  himself  capable  of  putting  into  effective  practice  the 
general  accounting  principles  Avhich  he  deemed  indispensable  for  the 
adequate  control  of  railroad  transportation.  But  to  the  very  end,  the 
larger  questions  of  social  organization  and  industrial  relationships 
held  his  primary  interest.  When,  only  about  a  3'^ear  before  he  left  our 
midst,  he  was  host  to  his  club  composed  of  university  colleagues,  and 
followed  the  usual  practice  of  discussing  a  problem  of  special  personal 
interest  to  the  speaker,  he  selected  Bertrand  Russell's  Proposed  Roads 
to  Freedom  as  the  subject  of  his  paper.  For  a  number  of  years  he 
was  dreaming  of  returning  to  a  study  of  the  labor  problem.  Although 
he  would  have  reached  the  patriarchal  age  of  seventy  had  he  lived 
to  the  end  of  this  month,  his  intellectual  powers  were  at  their  height 
and  he  was  actively  planning  to  carry  his  work  forward.  Those  of  us 
who  have  been  in  intimate  contact  with  him  during  the  last  ten  years 
of  his  life  are  not  only  overcome  by  a  keen  sense  of  personal  bereave- 
ment, but  are  deeply  conscious  of  a  tremendous  loss  to  economic  scholar- 
ship.    We  recall  in  fond  memory  his  gentle  spirit  and  great  powers. 

Professor  J.  B.  Clark. — To  all  economists  the  death  of  Professor 
Henry  C.  Adams  means  the  loss  of  an  eminent  co-worker,  whose  name 
has  stood  for  deep  learning,  clear  thinking  and  patriotic  service.  To 
the  older  economists  of  America  it  means  a  break  in  what  was  like  a 
family  circle  united  bj^  personal  ties  of  sympathy  and  affection.  He 
was  a  founder  of  the  American  Economic  Association,  its  first  vice- 
president  and,  at  an  early  date,  its  president.  He  contributed  greatly 
to  the  success  of  the  Association  itself  and  of  the  sound  but  liberal 
thought  which  it  represented.  He  lived  to  see  opinions  which  in  some 
quarters  had  been  branded  as  heretical  and  even  dangerous  universally 
accepted  and  incorporated  into  public  policy.  "Younger  economists" 
was  the  term  sometimes  used  to  describe  the  founders  of  the  organiza- 
tion which  now  includes  almost  every  economist  in  America.  Older 
economists  they  are  today,  and  they  look  backward  over  a  long  period 
in  every  year  of  which  the  Association  has  grown  from  strength  to 


414  American  Economic  Association  [September 

strength  and  served  with  increasing  effect  the  thought  and  life  of  the 
world.  Seen  today  are  nations  that  have  undergone  violent  trans- 
formations and  seen  also  are  their  concerted  efforts  to  avert  further 
ruin  and  start  tlie  movement  of  recovery.  Unseen  is  the  power  of 
economic  truth  to  make  recovery  possible. 

As  armies  and  navies  have  gained  by  applied  science  an  undreamed 
of  ])o\vcr  of  destruction,  so  international  conferences  and  courts  and 
the  great  League  of  Nations  itself  may  gain,  in  a  similar  way,  a  power 
of  restoration.  Tliese  great  and  new  organs  of  peaceful  and  prosper- 
ous living  will  succeed  or  fail  according  as  they  are  or  are  not  guided 
by  basic  truths  concerning  the  economic  life  of  the  world.  Has  Am- 
erica had  a  share — even  a  leading  share — in  discovering  and  applying 
such  truths.''  If  so,  it  is  largely  due  to  the  movement  that  began  in 
Saratoga  in  1885 — the  creating  of  the  American  Economic  Association 
— and,  in  this,  pars  magna  fuit  Henry  Carter  Adams.  His  memory 
will  be  honored  everywhere,  he  will  be  held  in  deep  affection  by  all  who 
have  personally  known  him  and  his  work  will  live  after  him  and  after  all 
his  associates.      "The  things  that  are  not  seen  are  eternal." 

Professor  F.  H.  Giddings. — Henry  Carter  Adams  was  one  of  those 
many-sided  men  avIio  cannot  be  pigeonholed.  A  scientific  intellect  con- 
trolled all  his  methods,  but  a  deep  humanity  inspired  all  his  undertak- 
ings. Men  admired  him  and  also  they  loved  him.  His  life  was  de- 
voted to  public  service  and  to  the  discovery  of  truth,  but  he  had  time 
for  friendships  and  for  all  things  beautiful. 

Professor  J.  H.  Hollander. — Our  simple  ceremony  is  at  an  end. 
A  certain  solemnity  has  come  and  grown  with  the  hour.  It  is  not 
entirely  the  sense  of  scientific  achievements  and  of  public  service,  but 
something  vaguer  and  higlier.  In  shadowy  outline  there  looms  the 
fineness  of  character.  We  number  him  among  the  gallant  company 
of  our  departed ;  but  our  minds  drift  to  the  meaning  of  Mackintosh's 
phrases :  "I  have  known  Adam  Smith  slightly,  Ricardo  well,  Malthus 
intimately.  Is  it  not  something  to  say  for  a  science  that  its  three 
great  masters  were  about  the  three  best  men  I  ever  knew.''" 

A  Chinese  Tribute  to  Professor  H.  C.  Adams^ 

One  of  the  most  affecting  and  deeply  significant  ceremonies  Ann 
Arbor  ever  witnessed  took  place  at  the  grave  of  the  late  Professor 
Henry  C.  Adams  on  Washington's  birthday.  This  was  the  placing  of 
a  monument  and  tablet  on  Professor  Adams'  grave  by  Dr.  F.  Chang,  a 
member  of  the  Chinese  delegation  to  the  Arms  Conference  at  Washing- 
ton. 
'Reprinted  from  the  Michigan  Alumtms,  March  9,  1922. 


1922]  Memorial  to  Former  President  Herirtj  C.  Adams  415 

Some  time  ago  the  Ministry  of  Communications  of  the  Chinese 
government  asked  permission  to  send  a  memorial  to  be  placed  at  the 
grave  of  Professor  Adams,  in  recognition  of  the  services  he  rendered 
the  Chinese  republic,  during  the  four  years  from  1913-1917,  when  he 
acted  as  its  adviser  in  working  out  for  them  a  s^'stem  of  accounting 
adapted  to  the  Chinese  system  of  railroads.  It  was  this  monument, 
brought  to  America  by  the  Chinese  delegation  at  Washington,  that  was 
officially  set  up  on  February  22. 

Only  a  group  of  the  friends  and  associates  of  Professor  Adams  and 
a  number  of  Chinese  students  in  the  University  Avitncsscd  the  cere- 
mony, which  was  very  brief,  but  marked  by  the  depth  of  emotion  and 
sincerity  of  the  members  of  the  Chinese  delegation. 

After  a  brief  introductory  speech  by  Mr.  Chen,  the  president  of  the 
Chinese  Students'  Club,  Mr.  Chang  delivered  the  address,  a  beautiful 
tribute  to  the  services  Professor  Adams  had  rendered  his  native  land. 
Among  other  things  Professor  Adams  gave.  Dr.  Chang  said : 

the  benefit  of  his  mature  knowledge  and  wisdom  in  the  service  of  a  country 
in  which  the  problems  of  accounting  relating  to  the  Chinese  Government 
Railways,  built  and  operated  under  the  terms  of  different  foreign  loans  and 
systems,  were  most  perplexing  and  were  offering  great  impediments  to  the 
future  development  of  railways  in  China.  During  the  four  years  from  1913 
to  1917,  when  he  acted  as  adviser  to  the  commission  on  the  unification 
of  the  acounting  systems  of  the  Chinese  Government  Railways,  he  served 
with  singleminded  scientific  devotion  to  the  task  before  him,  and  succeeded 
in  the  formulation  of  a  body  of  rules,  which  were  adopted  and  are  in  force 
today,  unifying  the  systems  of  accounts  of  the  Chinese  Government  Rail- 
ways. The  significance  of  this  work  cannot  be  fully  appreciated  without 
a  knowledge  of  the  peculiar  conditions  besetting  those  railways.  The  fruits 
of  his  labor  have  laid  a  foundation  for  the  future  development  of  railways  in 
China  and  their  increasing  value  can  only  be  revealed  by  the  growing  test 
of  time.  In  honor  of  him  and  in  recognition  of  his  signal  services,  the 
Chinese  government  twice  decorated  him. 

No  estimation  of  his  services  can  be  final  without  making  mention  of  the 
unique  nature  which  characterized  them  and  which  flowed  from  the  high 
purpose  and  noble  character  of  the  man.  China  has  had  many  and  varied 
advisers,  who  have  served  relatively  longer  periods.  Their  results,  however, 
have  not  been  so  monumental,  and  in  some  cases  have  been  not  happy. 
Professor  Adams,  on  the  other  hand,  worked  with  and  advised  the  Chinese 
members  of  the  Commission  on  the  Unification  of  Accounts,  helped  them  in 
the  production  of  a  body  of  rules,  and  left  the  work  entirely  in  the  hands 
of  the  Chinese.  Such  disinterested  service  and  achievement  commands 
universal  respect  and  the  love  of  the  Chinese  people. 

Though  the  problems  of  China  were  new  to  liim,  3'et  with  his  scientific 
grasp  and  weight  he  had  a  thorough  comprehension  of  them.  He  was  also 
not  lacking  in  human  sympathies.  He  had  such  an  understanding  of  the 
Chinese  mind  and  ways  that  he  readily  sympathized  with  them  and  found 


416  American  Economic  Association  [September 

working  with  them  congenial  and  productive  of  good.  His  eflforts  and 
contacts  so  endeared  him  to  those  with  whom  he  worked  that  they  not  only 
revered  his  knowledge  but  also  loved  him  as  a  man.  In  view  of  China's 
financial  and  economic  problems,  had  he  been  alive,  the  Chinese  govern- 
ment would  have  occasion  to  seek  his  services  again. 

The  relation  between  America  and  China  has  always  been  friendly,  and 
the  feeling  between  the  two  peoples  has  always  been  cordial  and  kind. 
Professor  Adams  will  stand  out  in  history  as  one  who  has  strengthened  those 
bonds  which  unite  these  two  nations,  who  has  induced  the  feeling  of  confi- 
dence between  nations  and  set  the  example  for  international  cooperation 
and  advancements. 

At  the  conclusion  of  his  address  Dr.  Chang  read  in  Chinese  the  in- 
scription on  the  tablet,  and  then  gave  the  following  translation: 

In  the  memory  of  Professor  Henry  Carter  Adams,  this  monument  is 
erected  by  his  colleagues  of  the  Ministry  of  Communications,  Republic  of 
China,  this  tenth  month  of  the  tenth  year  of  the  Republic,  where,  as  adviser, 
his  wisdom  and  kindly  temperament,  his  knowledge  of  economics  and  rail- 
way statesmanship  were  effective  in  unifying  the  accounting  systems  of  the 
Chinese  Government  Railways.  We,  strangers  in  the  land,  come  in  mourn- 
ing to  his  grave.  Our  tears  pay  tribute  to  his  honest  and  able  help  in  our 
time  of  need.     We  commend  his  example  to  future  generations. 

The  monument  is  typically  Chinese.  The  pedestal  in  marble  re- 
presents the  traditional  sacred  tortoise  of  China  bearing  upon  its  back 
the  tablet,  on  one  side  of  which  is  the  Chinese  inscription  and  on  the 
other  the  Englisli  translation.  The  two  faces  of  the  tablet  are  blackened, 
as  in  Chinese  stones,  where  the  practice  of  taking  rubbings  eventually 
produces  the  characteristic  darkened  surface.  The  old  dragon  em- 
blem of  the  Empire,  wliich  formerly  surmounted  all  stones  of  this 
type,  has  been  omitted  since  the  inauguration  of  the  Republic. 


A  POPULAR  THEORY  OF  CREDIT  APPLIED  TO 
CREDIT  POLICY 

A  preceding  paper^  was  devoted  chiefly  to  a  discussion  of  the  ques- 
tion whether  the  rise  in  the  rediscount  rates  of  the  federal  reserve 
banks  had  been  instrumental  in  bringing  about  the  credit  contraction 
which  followed  the  post-war  expansion.  An  attempt  was  made  to 
show  that  rate  changes  per  se  had  not  been  efficacious,  and  it  was 
furthermore  pointed  out  that  many  obstacles  lay  in  the  way  of  the 
development  of  an  efficacious  system  of  rate  control  by  the  federal 
reserve  banks.  Since  the  date  of  writing  (June,  1921)  much  addi- 
tional evidence  has  been  afforded  of  the  lack  of  connection  between 
the  rates  charged  by  the  federal  reserve  banks  to  member  banks,  and 
the  rates  charged  by  the  latter  to  their  customers.  It  was  observed 
that  during  the  period  when  reserve  bank  rates  were  being  advanced, 
many  member  banks  were  unaffected  by  the  rise,  because  their  charges 
were  already  far  above  the  rediscount  rates.  Subsequent  reductions 
in  rediscount  rates  likewise  have  had  little  or  no  influence  upon  the 
charges  of  many  member  banks  located  in  sections  of  the  country 
where  8,  10,  or  12  per  cent  is  a  customary  rate.  In  short,  over  con- 
siderable portions  of  the  United  States  it  is  a  fiction  to  suppose  that 
interest  rates  are  either  competitively  fixed  or  responsive  to  the  influ- 
ence of  changing  demands  from  borrowers.  Recognizing  this  fact,  the 
article  to  which  reference  has  been  made  above  stressed  the  limited 
efficacy  of  any  policy  of  rate  control,  however  vigorous,  under  the 
conditions  now  existing.  But  it  was  suggested  that  in  the  leading 
money  market  centers  a  more  effective  control  over  rates  could  be 
secured  by  the  federal  reserve  banks  through  an  extension  of  open 
market  operations  with  a  view  to  equalizing  the  rates  charged  by 
member  banks  on  different  classes  of  loans,  as  well  as  with  intent  to 
bring  about  an  expansion  or  contraction  in  the  total  amount  of  credit 
accommodation  available. 

This  type  of  discussion  takes  for  granted,  or  at  least  ignores,  gen- 
eral questions  of  a  much  more  fundamental  sort.  It  does  not  ask, 
for  example,  whether  it  is  desirable,  if  possible,  for  rate  control  to  be 
exercised  by  a  central  banking  system  as  an  instrument  of  credit 
control.  Nor  does  it  ask  to  what  extent  such  rate  control  is  a  matter 
of  volition  on  the  part  of  the  central  bank  management.  It  does  not 
attempt  to  decide  whether  changes  in  central  bank  rates  can  be  arbi- 
trarily enforced  or  whether  they  merely  register  a  policy  of  conformity 
to  some  external  guide  or  guides  variously  designated  as  the  real  or 
true  rate  of  interest,  the  market  price  for  capital,  the  natural  rate, 

^The  Efficacy  of  Changes  in  the  Discount  Rates  of  the  Federal  Reserve  Banks," 
American  Economic  Review,  Sept.,  1921. 


418  Anna  Youngmaji  [September 

etc.  To  put  these  questions  is  to  show  how  necessary  it  is  to  make 
clear  at  the  start  the  theoretical  presuppositions  upon  which  any  dis- 
cussion of  discount  policy  is  to  be  based.  A  theory  of  mechanical  or 
automatic  fixation  of  interest  rates  through  the  unhampered  operation 
of  the  forces  of  demand  for  and  supply  of  capital  (variously  defined) 
makes  untenable  any  concept  of  an  independently  initiated  discount 
policy  as  a  beneficent  means  of  credit  control.  The  sole  aim  of  credit 
policy  in  that  case  would  consist  in  somehow  determining  the  nat- 
ural, competitively  fixed  rates  and  then  making  them  a  guide  to 
conduct.  As  a  matter  of  fact,  however,  undei'lying  most  discussions 
of  discount  and  credit  policy  there  is  an  assumption,  tacit  if  not  ex- 
pressed, tliat  banks  (and  central  banks  in  particular)  are  formative 
institutions,  not  merely  instruments  for  the  automatic  execution  of 
certain  processes  of  exchange  over  which  they  have  no  control.^  It  is 
not  necessary  to  attribute  omnipotence  to  a  banking  system  in  order 
to  conceive  of  it  as  an  active  agent  in  the  direction,  stimulation,  oi 
repression  of  industrial  processes.  But  if  there  is  to  be  any  recogni- 
tion of  a  problem  of  credit  policy,  it  is  necessary  to  conceive  of  banks 
as  something  more  than  passive  agents  recording  market  decisions  and 
merely  responding  mechanically  to  demands  made  upon  them. 

The  limits  of  the  control  exercised  by  any  banking  system,  assum- 
ing it  to  be  centralized  and  unified  to  a  high  degree,  can  perhaps  be 
illustrated  by  analogy  with  those  encountered  by  a  monopolist  who  has 
been  able  to  engross  a  necessity  of  life.  The  monopolist  by  his  ability 
to  control  the  supply  of  a  particular  commodity  has  a  control  over 
price  that  enables  him  within  limits  to  stimulate  or  to  discourage  con- 
sumption. He  cannot,  however,  fix  his  price  without  reference  to  de- 
mand on  pain  of  overreaching  his  aim  either  by  selling  too  little  at  too 
high  a  price  or  a  great  deal  at  too  low  a  price.  Similarly,  to  say  that 
a  banking  system,  to  the  extent  that  it  can  manipulate  the  supply  of 
credit  available  in  the  market,  exercises  a  positive  control  over  in- 
dustry is  not  to  say  that  it  can  ignore  the  fact  that  it  works  within  an 
industrial  environment  in  which  needs,  "ever-changing  in  direction  and 
intensity,  are  the  motivating  forces  which  condition  all  industrial  acti- 
vity."    Nevertheless,  tlie  banking  system  of  a  modern  industrial  com- 

'C/.,  liowever,  testimony  of  Governor  Harding  before  the  Joint  Commission  of 
Agricultural  Inquiry.  Me  says  on  p.  362,  part  13  of  the  Hearings:  "The  banks 
have  to  go  along  with  the  tide.  I  do  not  believe  that  banks  can  create  conditions 
to  the  extent  that  people  seem  to  think  they  can;  I  think  the  banks  have  to  adjust 
themselves    to  conditions."     Yet   on   p.   3()3   he   is   vi^illing   "to   admit   that   if   it   had 

been  possible  for  the  Federal  Reserve  Board  to  advance  its  rates  before  it  did 

in  my  opinion  this  runaway  movement  could  possibly  liavc  been  cliecked  to  a  certain 
extent."  Even  with  nil  the  reservations  that  are  inserted,  the  statements  remain 
irreconcilable. 

Cf.  Hearings  before  the  Joint  Conunission  of  Agricultural  Inquiry,  part  13, 
August  2-11,  1921. 


1922]     A  Popular  Theory  of  Credit  Applied  to  Credit  Policy         419 

munity  so  organized  as  to  give  power  of  direction  into  the  hands  of  a 
central  bank  management  is  in  a  position  to  control  tlie  sale  of  a 
most  important  commodity:  namely,  credit.  The  prices  charged  for 
the  use  during  a  given  period  of  time  of  the  credit  or  purchasing 
power  furnished  by  the  banks  (in  other  words  the  discount  or  interest 
rates)  will  depend  upon  the  amount  of  accommodation  the  banking 
system  is  prepared  to  sell,  tliat  is,  upon  the  supply  of  credit.  This 
supply  is,  with  the  reservations  just  indicated,  determined  by  policy 
in  so  far  as  law  or  custom  does  not  interfere.  And  as  additional  sup- 
plies are  often  produced  with  only  a  negligible  immediate  cost,  it  is 
evident  that  the  influence  of  policy  upon  supply  is  exceptionally  direct 
and  unliampered.  But  just  as  the  monopolist  has  to  experiment  with 
prices  to  find  out  whether  a  given  supply  can  be  sold  at  a  particular 
price,  so  a  banking  system  desiring  to  sell  the  use  of  credit  must 
experiment  with  discount  rates.  If,  at  the  rate  fixed,  the  demand  of 
those  willing  to  pay  exceeds  the  amount  of  purchasing  power  that  the 
banking  system  deems  it  politic  to  sell,  either  the  rate  must  be  raised 
still  more  or  else  refusal  or  restriction  of  loans  must  ensue.  On  the 
other  hand,  a  reduction  of  rates  with  a  view  to  stimulating  the  sales 
or  rather  the  hire  of  purchasing  power  may  fail  of  its  purpose  or  meet 
with  very  feeble  response.  Hence,  even  under  conditions  in  which  con- 
trol of  rates  is  absolute,  it  by  no  means  follows  that  control  of  the 
amounts  of  credit  supplied  (the  fundamental  objective)  can  always  be 
secured.  Only  under  conditions  in  which  demand  is  sufficiently  sensi- 
tive to  enable  the  banking  system  to  dispose  of  as  much  or  as  little 
credit  as  it  desires  by  varying  discount  charges,  is  it  possible  to  enforce 
a  credit  policy  through  the  instrumentality  of  discount  rates  alone. 

Implicit  in  all  discussion  of  credit  policies  are  theories  as  to  the 
nature  of  capital,  credit,  and  interest.  To  avoid  confusion,  these  con- 
cepts need  to  be  expressly  defined  and  consistently  adhered  to,  as  the 
most  serious  obstacles  to  a  lucid  treatment  of  discount  and  credit 
policies  have  grown  out  of  the  tendency  to  use  the  terms  in  one  sense 
for  purposes  of  discussing  money  market  phenomena  and  then  to  shift 
over  to  certain  esoteric  concepts  for  purposes  of  general  economic 
theory.  The  position  here  taken  is  that  the  only  definition  of  capital 
which  has  any  validity  for  the  purposes  of  a  discussion  of  discount  and 
credit  policy  is  a  definition  which  makes  the  terms  capital  and  credit 
interchangeable  and  identifies  them  with  the  purchasing  power  sold  or, 
more  exactly,  hired  out  by  banks  to  borrowers  who  want  credit  for  all 
sorts  of  purposes.^     Whether  this  purchasing  power  is  taken  in  the 

'The  opening  sentence  of  the  second  paragraph  (p.  471)  of  the  article  in  the 
American  Ecokomic  Review  referred  to  above  seems,  if  taken  alone,  to  be  directly 
opposed  to  the  position  maintained  in  this  paper.  The  subsequent  discussion,  how- 
ever, makes  it  evident  that  the  statement  was  directed  against  the  vao-ueness  of  a 


420  Anna  Youngman  [September 

form  of  cash,  bank  notes,  or  checks  against  deposits  is  irrelevant  from 
the  point  of  view  of  the  present  discussion.  Practicall}^  speaking,  one 
can  ignore  any  direct  loans  made  by  individuals  in  possession  of  hoard- 
ed money,  and  all  other  loans  are  made  through  utilization  of  the  funds 
provided  by  the  banking  system.  Even  savings  deposits  whose  dis- 
position is  subject  to  the  control  of  individual  investors  can  only  be 
utilized  in  the  form  of  purchasing  power  transferred  to  borrowers 
through  the  medium  of  banks.  Interest  has  already  been  defined  as 
the  price  paid  for  the  use  of  the  purchasing  power  furnished  by  banks 
to  buyers  or  borrowers  for  a  period  of  time. 

The  above  definitions  at  least  have  the  virtue  of  recognizing  the  fact 
that  a  study  of  money  market  phenomena  has  to  proceed  in  terms  of 
wliat  is  actually  bought  and  sold  on  that  market.  This  usage  receives 
conventional  support,  too,  from  the  growing  disposition  among  econo- 
mists to  accept  definitions  of  capital  and  interest  based  upon  money 
market  terminology  as  theoretically  valid  for  a  fundamental  discussion 
of  the  problems  of  credit  policy.  There  are,  of  course,  countless 
illustrations  of  thoughtless  acceptance  of  this  terminology  found  in 
textbooks  on  money,  banking  and  general  economics,  but  the  writers 
are  not  concerned  with  recognizing  all  the  implications  of  their  defini- 
tions and  using  them  to  test  the  validity  of  their  views  concerning  dis- 
count policy  and  credit  control.  H.  J.  Davenport  is  conspicuous 
among  American  economists  for  unequivocal  assertions  of  his  belief  in 
the  theoretical  soundness  of  definitions  of  capital  and  interest  conceived 
entirely  in  terms  of  the  money  market.  Unfortunately  he  has  touched 
only  incidentally  and  briefly  upon  the  application  of  his  definitions  to 
questions  of  credit  policy.  In  an  article  published  in  the  Annalist, 
for  February  28,  1916,  entitled  "Divergent  VieAvs  of  Interest,"  how- 
ever, he  leaves  tlie  reader  in  no  doubt  concerning  his  belief  in  the 
power  of  a  banking  s^^stem  to  function  as  an  instrument  of  credit 
control.  Having  denied  emphatically  that  there  is  any  measurable 
connection  between  the  amount  of  the  "capital,"  "cash,"  "funds,"  which 
the  business  man  borrows,  and  the  productive  equij^ment  of  a  communi- 
ty (which  Davenport  calls  the  economist's  capital),  he  goes  on  to 
say :  "Equally  clear  is  it  that  the  available  loan  fund  at  any  time 
is  chiefly  a  matter  of  the  disposition  of  the  banks  to  do  this  discount- 
ing; and  this  disposition  is  determined  mainly  by  the  ease  of  their 
reserves  and  not  at  all,  or  only  remotely  and  partially,  by  the  amount 

particular  type  of  approach  to  the  subject.  The  concluding  sentences  of  the  para- 
graph, in  which  it  is  said  that  the  borrower  buys  the  services  of  the  bank,  and  that 
the  rate  is  the  expression  of  a  greater  or  less  inclination  on  the  part  of  the  bank 
to  sell  its  services,  are  in  general  conformity  with  the  arguments  set  forth  in  this 
paper.  But  the  earlier  statement  is  itself  open  to  a  charge  of  vagueness  due  to 
the  failure  unequivocally  to  identify  the  services  sold  with  purchasing  power. 


1922]     A  Popular  Theory  of  Credit  Applied  to  Credit  Policy         421 

of  machinery  and  raw  material  in  the  country."  If  concrete  wealth 
is  related  to  the  case  at  all,  he  holds,  it  is  merely  as  bearing  upon  the 
amount  of  accommodation  that  banks  Avill  grant  to  applicants. 
Interest  rates,  then,  "report  merely  the  condition  of  the  loan  market 
— not,  even  in  the  main,  the  volume  of  the  existing  supplies  of  loan 
funds,  but  rather  the  power  and  the  disposition  of  the  banks  to  create 
new  funds.  Credit  has  its  cost  of  production  as  truly  as  wheat — 
costs  varying  under  varying  conditions  of  actual  reserves  and  of 
estimated  risks," 

Another  consistent  spokesman  for  the  theoretical  soundness  of  the 
popular  notion  that  capital,  credit,  and  interest  are  money  market 
phenomena  is  Schumpeter."  In  his  Theorie  der  wirtscliaftlichen  Ent- 
wicklung  he  asserts  that  money  market  rates  are  the  only  interest 
rates ;  that  the  money  market  is  the  same  thing  as  the  capital  market 
and  that  there  is  no  other;  that  the  capital  market  is  the  market  in 
which  purchasing  power  is  bought  and  sold.  Capital  creation,  he 
holds,  is  the  creation  or  new  creation  of  credit  means  of  payment,  and 

■•J.  Schumpeter,  Theorie  der  wirtschaftlichen  Entwicklung  (Leipzig,  1912).  See 
especially  the  section  entitled  "Der  Geldmarkt,"  and  chapter  5,  "Der  Kapitalzins." 
Schumpeter's  treatment  offers  many  invaluable  suggestions  to  a  student  of  credit 
policy,  even  if  one  is  willing  to  accept  his  highly  unrealistic  concepts  of  static  and 
dynamic  societies,  and  to  think  of  interest  as  a  sort  of  tax  upon  entrepreneurial 
profits  growing  out  of  new  productive  combinations — a  dynamic  phenomenon. 
Schumpeter's  emphasis  is  all  placed  upon  this  entrepreneurial  demand  for  pur- 
chasing power  which  arises  because  of  the  possibility  of  utilizing  it  in  new  ways. 
In  a  static  society,  or  one  in  which  producers  owned  all  the  goods  that  they 
required,  there  would  be  no  interest,  according  to  his  characteristic  use  of  that  term. 
However,  he  concedes  that  even  in  his  static  society,  premiums  might  be  paid  either 
by  borrowers  or  by  lenders  in  connection  with  particular  transfers  of  purchasing 
power,  according  to  whether  the  desire  of  the  parties  to  the  bargain  happened  to 
be  stronger  for  present  purchasing  power  or  for  the  assurance  of  future  purchas- 
ing power.  Schumpeter  admits  that  in  point  of  fact  the  so-called  static  as  well  as 
dynamic  demands  for  purchasing  power  influence  the  actual  rate  of  interest  in 
the  money  market  but  he  regards  the  former  as  unimportant.  It  is  obvious,  how- 
ever, that  no  realistic  theory  of  interest  can  ignore  or  even  minimize  the  influence 
of  non-industrial  demands.  Especially  at  the  present  time  it  is  evident  that  a 
working  definition  of  capital  or  credit  cannot  conceive  of  it  as  purchasing  power 
sold  chiefly  to  entrepreneurs  who  are  the  determinant  factors  on  the  demand  side 
in  the  fixation  of  interest  rates.  For  an  understanding  of  the  problems  of  the 
money  market,  it  is  necessary  to  remember  that  funds  are  loaned  to  all  sorts  of 
customers  irrespective  of  the  uses  to  which  the  borrower  expects  to  put  them. 
Davenport  has  done  good  service  in  pointing  out  time  and  again  that  loans  may  be 
obtained  for  the  purpose  of  bribing  a  city  council  as  well  as  for  paying  wages,  or 
buying  machinery.  It  is  evident  from  the  brief  outline  given,  that  Schumpeter 
assigns  to  banks  as  the  "producers  of  and  dealers  in  purchasing  power,"  the  deter- 
minant role  on  the  supply  side  in  that  money  market  in  which  interest  rates  are 
fixed.  He  says,  p.  275:  "We  can  see  then  in  practice  the  working  of  both  factors 
in  the  market;  in  the  case  of  the  most  developed  money  markets,  quite  clearly;  in 
other  instances,  less  so.  We  can  see  how  the  industrial  need  for  credit  is  expressed, 
and  how  the  institution  of  banking  sometimes  supports  and  encourages  it,  some- 
times tries  to  restrain  it,  sometimes  refuses  to  give  it  further  satisfaction." 


422  Anna  Young  man  [September 

interest  is  the  price  paid  for  this  purchasing  power  as  a  means  of 
control  over  production  goods. 

Gustav  Cassel  in  his  Theoretische  Sozialokonomie  (Leipzig,  1918) 
and  in  more  recent  articles  intended  for  popular  consumption  has  at- 
tracted world-wide  attention  to  his  proposals,  which  have  made  a 
forceful  appeal  because  he  has  tried  to  apply  a  consciously  held  theory 
of  capital  and  interest  to  a  solution  of  the  problems  of  discount  policy 
and  its  corollary,  credit  control.  He  too  takes  the  position  that 
interest  is  a  price  paid  to  secure  control  over  "capital"  for  a  period 
of  time  (cf.  pp.  167  and  174,  Theoretische  Sozialokonomie).  And 
capital  (Kapital)  he  has  previously  defined  (p.  44)  in  terms  of 
"money,"  as  opposed  to  Realkapital,  which  consists  of  material  goods 
still  found  in  or  concerned  in  the  production  process  (p.  167)  (die 
sich  noch  im  Produktionsprozess  befinden).  Subjected  to  analysis, 
however,  Cassel's  definition  of  capital  seems  to  be  dissociated  from 
reality  quite  as  much  as  a  definition  which  conceives  of  capital  in 
terms  of  material  goods  already  adapted  to  the  purposes  of  production 
— a  concept  which  he  has  subjected  to  destructive  criticism.  Cassel 
entertains  the  idea  that  there  is  somewherq  a  true  rate  of  interest  and 
that  it  should  be  the  aim  of  banking  policy  to  bring  bank  rates  into 
conformity  with  this  true  "capital"  rate.  His  assumption  is  that 
borrowed  funds  are  devoted  chiefly  to  purchasing  durable  production 
goods,  and  the  true  rate  of  interest  seems  to  be  that  rate  at  which 
demand  will  take  off  the  supply  of  savings  in  pecuniary  form.  But 
how  can  this  true  rate  be  determined.'^  Cassel  admits  that  it  is  immedi- 
ately and  powerfully  influenced  by  bank  rates  of  interest.  He  attempts, 
however,  to  show  the  deleterious  social  effects  of  keeping  bank  rates 
of  interest  below  the  true  rate,  and  comes  to  the  conclusion  that  if  the 
banks  only  hit  upon  a  rate  or  rates  that  leave  prices  unchanged  that 
will  be  tlie  true  rate.  It  will  be  observed  that  this  true  rate  can  only 
be  reached  by  definition  since  it  has  no  existence  in  fact. 

^See  cspooially  pp.  213  and  214.  One  is  puzzled  to  know  just  what  role  the 
banks  play  in  Cassel's  money  market,  especially  as  he  says  later  (p.  378)  that  "the 
bulk  of  the  funds  available  (die  Ilauptniasse  der  Kapitaldisposition)  for  taking 
over  concrete  capital  {licalkapital)  is  furnished  by  savings  capital.  Only  a  small 
part  of  this  need  for  ca])ital  funds  (Kapifaldh-ponition)  can  be  furnished  by  the 
banks  by  the  giving  out  of  bank  currency."  Now  Realkapital  as  previously  defined 
includes  circulating  as  well  as  iixed  capital,  and  even  the  most  uncompromising 
opponents  of  the  practice  of  lending  bank-created  funds  as  opposed  to  savings  for 
the  purpose  of  securing  control  over  durable  capital  goods,  would  concede  their 
utilization  in  the  purchase  of  circulating  capital.  It  is  probable,  however,  from 
statements  previously  made  (cf.  pp.  213-14,  cited  above)  that  Cassel  is  thinking  of 
demand  for  funds  with  which  to  buy  durable  capital  goods  as  set  off  against  supply 
in  the  form  of  pecuniary  savings.  The  rate  that  will  suffice  to  take  oflF  these 
savings  is  then  the  true  rate  to  be  aimed  at. 

"Cf.  p.  380  especially.  The  cifect  upon  prices  of  a  failure  to  keep  actual  bank 
rates  in  line  with  true  rates  as  here  defined  is  explained  as  follows.     The  policy  of 


1922]     A  Popular  Thcorij  of  Credit  Applied  to  Credit  Policy         423 

Notwithstanding  the  notable  exceptions  to  which  attention  has  been 
called,  the  majority  of  economists  are  certainly  not  yet  inclined  to 
make  the  money  market  the  point  of  departure  for  an  investigation 
of  the  nature  of  credit  phenomena.  But  the  majority  of  bankers  and 
business  men  seldom  employ  any  other  terminology  in  their  discussions 
of  such  problems.  Indeed,  to  talk  effectively  in  other  terms  would  often 
be  impossible.  To  be  sure,  the  Federal  Reserve  Board  and  the  reserve 
banks  have  rather  consciously  tried  in  their  official  pronouncements  to 
place  emphasis  upon  the  things  that  credit  will  buy,  to  conceive  of 
credit  as  but  a  reflex  of  the  demand  for  productive  goods  and  ser- 
vices— as  dependent  somehow  upon  the  phj^sical  volume  of  goods  and 
in  no  sense  a  creation  resulting  from  policy.  Nevertheless,  Governor 
Strong  testifying  before  the  Joint  Commission  of  Agricultural  Inquiry 
stated  quite  positively  his  belief  that  "credit  is  a  commodity  just  as 
any  thing  else  that  is  bought  and  sold  and  commands  a  price  which 
is  fixed  by  the  laws  of  supply  and  demand."  The  statement  is  quoted 
because  it  is  typical,  representative  it  is  believed,  of  the  views  of  a 
majority  of  bankers  and  of  the  lay  public,  and  in  accord  with  the 
position  which  this  paper  tries  to  maintain.  It  may  be  added,  how- 
ever, that  such  statements  are  seldom  supplemented  by  adequate 
analyses  of  the  nature  of  the  supply  of  and  demand  for  credit. 

In  the  discussion  of  discount  and  credit  policy  one  gets  nowhere  by 
the  use  of  definitions  couched  either  in  terms  of  goods  and  techno- 
logical processes,  or  in  terms  of  abstinence.  Granted  that  demand  for 
credit  usually  grows  out  of  a  conviction  that  the  purchasing  power 
desired  can  be  used  "productively"  {i.  e.,  profitably),  it  may  not  be; 
and  discount  policy  determines  whether  the  attempt  shall  be  made 
or  not.  The  marginal  demand  may  come  from  a  man  who  thinks 
mistakenly  that  he  can  use  a  loan  profitably.  Below  the  margin  may 
be  overcautious  potential  borrowers  who  could  have  used  funds  with 

the  banks  of  placing  out  their  funds  at  the  old  rate  when  profits  are  rising  will, 
it  is  said,  send  up  the  prices  of  capital  goods,  thereby  shunting  purchasing  power 
toward  those  goods  to  the  detriment  of  consumption  demands.  The  apportionment 
of  the  purchasing  power  of  society  between  capital  goods  and  consumption  goods 
is  in  this  case  altered  just  as  if  a  growing  disposition  to  save  had  arisen  in  the 
community.  So  far  as  one  can  see,  what  is  being  said  here  is  that  the  amount  of 
purchasing  power  directed  toward  all  purposes  except  immediate  satisfaction  should 
find  its  limit  in  the  amount  of  the  savings  of  the  community.  Certainly  no  counsel 
could  be  more  vague  or  seem  less  related  to  reality.  And  to  repeat,  it  is  hard  to 
see  how  the  banks,  theoretically  speaking,  can  perform  their  characteristic  functions 
at  all  without  being  regarded  as  intrusive,  disturbing  factors.  Yet  the  conformity 
of  bank  rates  of  interest  to  an  elusive  true  rate  of  interest  is  to  constitute  a  method 
of  stabilizing  the  price  level.  Cassel  is  naturally  fully  cognizant  of  tlie  fact  that  the 
general  price  level  is  not  determined  exclusively  by  monetary  factors,  but  never- 
theless he  is  disposed,  especially  in  his  later  popularized  writings,  to  minimize  the 
influence  of  incalculable  factors  on  the  demand  side  and  to  talk  as  if  changes  in 
the  price  of  credit  acting  through  supply  could  be  counted  upon  to  effect  the 
most  delicate  and  instantaneous  adjustments. 


424  Anna  Youngman  [September 

profit.  The  demand  for  loans  comes  from  the  ill-informed,  as  well  as  the 
astute — it  may  be  characterized  by  over-optimism  or  over-pessimism. 
On  the  other  hand,  no  explanation  of  the  supply  of  loanable  funds  can 
be  related  to  individual  rates  of  abstinence.  Such  funds  may  represent 
in  part  purchasing  power  withheld  from  the  market  by  acts  of  indi- 
vidual self-denial.  But  the  supply  will  also  be  augmented  by  created 
banking  credits.  Indeed,  as  the  banking  system  is  capable  of  supply- 
ing funds  by  creation  of  claims,  it  can  take  from  some  and  give  to 
others,  thereby  reducing  immediate  ability  to  consume  of  people  who 
are  not  consciously  saving.  War  loans  are  an  obvious  and  extreme 
illustration  of  enforced  saving,  when  financed  by  means  of  credit  infla- 
tion. 

Theories  that  base  concepts  of  capital  upon  categories  of  goods, 
that  conceive  of  savings  as  existing  in  the  form  of  such  goods,  and 
think  of  interest  as  payments  in  goods,  dependent  either  upon  a  some- 
how defined  capital  productivity  or  reflecting  a  universalized  rate  of 
time  preference,  fail  therefore  to  make  any  convincing  connection  with 
the  facts  of  the  money  market.  It  is  obvious  that  one  gets  nowhere 
with  productivity  theories  of  interest,  unless  they  are  conceived  in 
terms  of  price ;  and  price  changes  bear  no  measurable  relation  to 
physical  magnitudes.  Neither  have  theories  of  interest  based  on  time 
preference  any  value  for  purposes  of  the  present  inquiry,  even  if  they 
have  metaphysical  content.  No  light  is  thrown  on  the  causes  of  the 
fluctuations  in  call  loan  rates,  for  example,  by  saying,  as  does  Fetter, 
that  "the  market-rate  of  interest  (after  due  allowance  for  risk  and 
other  deductions)  registers  a  prevailing  price  for  timeliness,  which  per- 
vades the  whole  economic  structure  of  society."^  Nor  does  Fisher  help 
to  clarify  the  discussion  or  to  relate  it  in  any  convincing  fashion  to 
the  money  market  when  he  says :  "The  rates  of  preference  of  different 
individuals  must  be  equal  to  each  other  and  to  the  rate  of  interest  in 

the  market The  rate  of  interest  must  be  such  as  will  equalize 

supply  and  demand,  or  exactly  clear  the  market."' 

To  be  sure,  the  money  market  functions  as  part  of  a  complex  eco- 
nomic organization  for  the  production,  exchange,  and  distribution  of 
goods  and  services.  It  cannot  be  conceived  of  as  working  in  isolation; 
but  on  the  supply  side,  the  connnodity  which  it  ofl"ers  for  sale — namely, 
purchasing    power — is    subject    to    control    through    policy .*     Hence 

'C/.  F.  A.  Fetter,  Economic  Principles,  vol.  I,  p.  312. 

^Cf.  I.  Fisher,  The  Rate  of  Interest,  p.  150. 

»In  an  article  by  C.  A.  Phillips  on  "Control  of  Bank  Credit,"  published  in  The 
Annals  of  the  American  ylrademif  of  Political  and  Social  Science,  January,  1922,  an 
attenii)t  is  made  to  distini^uish  between  actual  and  natural  rates  of  interest  by 
dofinin}>:  the  former  in  terms  of  money  and  the  latter  in  terms  of  goods.  It  is  said 
(p.  If)8)  that  "too  little  effort  has  been  made  to  bring  the  market  rate  into  harmony 
with  what  may  be  called  the  natural  rate  of  interest,  the  natural  rate  being  the  rate 


1922]     A  Popular  Theorij  of  Credit  Applied  to  Credit  Policy         425 

prices  charged,  that  is,  interest  rates,  are  influenced  by  policy,  al- 
though many  factors  of  a  material  and  personal  sort  affect  the  demand 
for  purchasing  power  coming  from  borrowers.  Banks  may  as  a  mat- 
ter of  precaution,  and  usually  do,  test  the  desirability  of  transferring 
purchasing  power  to  a  borrower  by  determining  whether  he  is  in 
possession  of  goods  awaiting  transfer,  transformation,  or  utilization. 
But  it  is,  to  repeat,  a  matter  of  policy  whether  an  underlying  basis  of 
goods  is  insisted  upon  in  granting  a  loan  and  whether  conditions  are 
made  in  connection  with  the  loans,  such  as  that  the  borrower  must 
control  salable  goods  or  have  expectation  of  receipts  from  goods  al- 
ready sold. 

In  the  definitions  of  capital  and  of  interest  accepted  for  purposes 
of  the  present  inquirj^,  there  has  been  no  attempt  to  distinguish  be- 
tween the  uses  to  which  borrowed  funds  are  to  be  put,  or  to  diff'erenti- 
ate  according  to  the  length  of  time  for  which  funds  are  wanted, 
because  it  is  not  thought  that  a  definable  distinction  can  be  made. 

at  which  the  supply  of  and  demand  for  loanable  capital  goods,  as  distinct  from 
'money,'  may  be  equated."  What  meaning  inheres  in  this  distinction?  What  are 
loanable  capital  goods?  There  are  at  any  instant  of  time  certain  available  sup- 
plies of  goods,  some  of  which  are  in  condition  cither  to  be  turned  over  to  con- 
sumers or  to  be  used  in  furthering  productive  processes,  while  other  goods  may 
already  be  definitely  adapted  to  specific  needs,  productive  or  otherwise.  There  are 
also  stocks  of  raw  materials  that  may  serve  a  great  variety  of  purposes.  But 
even  if  one  accepts  a  distinction  between  capital  and  non-capital  goods,  there  is 
nowhere  at  any  time  a  determinable  supply  of  capital  goods  waiting  to  be  taken 
off  by  demand,  somehow  defined  in  terms  of  goods.  It  may  be  asked  whether  de- 
mand for  "loanable  capital  goods"  can  possibly  be  defined  in  any  but  monetary 
terms.  And  if  demand  is  conceived  of  in  terms  of  purchasing  power,  is  it  not  an 
effective  demand  irrespective  of  the  way  in  wliich  it  has  been  secured?  The  next 
sentence  concedes  the  elusiveness  of  these  natural  rates  for  loanable  capital  goods 
by  saying  that  "although  it  is  impossible  always  accurately  to  ascertain  what  the 
natural  rate  of  interest  is,  it  is  not  difficult  to  detect  a  wide  disparity  between  the 
market  and  natural  rates."  And  since  the  "natural"  rate,  just  as  Cassel's  "true" 
rate,  escapes  measurement,  the  writer  shifts  his  ground  and  by  implication  re- 
defines the  natural  rate  as  a  rate  which  will  prevent  price  changes.  He  says: 
"The  disparity  between  the  market  and  the  natural  rates  during  the  early  period 
of  credit  expansion  under  the  operation  of  the  Federal  Reserve  act,  was  due 
measurably  to  an  inflationistic  policy  with  a  low  rate  of  rediscount  as  its  central 
feature." 

"The  attempts  of  the  Federal  Reserve  Board  in  its  rulings  to  distinguish  between 
a  commercial  loan  and  an  investment  are  ingenious,  but  not  always  convincing. 
Time  cannot  be  made  the  test,  because  every  loan  made  by  a  federal  reserve  bank 
is  for  a  short  period.  The  commodities  bought  or  handled  with  the  funds  obtained 
cannot  be  the  test.  The  tests  are  related  to  motives  of  borrowers  and  sometimes 
external  tests  whose  logic  it  is  hard  to  follow.  For  example,  in  an  article  on 
"Eligibility  for  Discount,"  by  C.  L.  Powell,  The  Annals,  Jan.  1922,  p.  109,  it  is 
said:  "A  note,  the  proceeds  of  which  is  used  for  tilling  or  draining  farms,  may  be 
classed  as  agricultural  paper  and  is  eligible  for  discount."  But  "silos  are  per- 
manent improvements,  and  notes  given  for  their  purchase  are  not  eligible  for 
discount." 

"A  note  given  for  the  purchase  of  a  motor  truck  by  a  farmer  is  clearly  held  to  be 
eligible   for  discount,  as   agricultural  paper,  but  notes  or   trade  acceptances   given 


426  Anna  Youngman  [September 

Yet  a  good  many  economists  who  are  prepared  to  talk  exclusively  in 
terms  of  money  and  purchasing  power  when  discussing  short-time 
loans,  and  who  are  furthermore  willing  to  concede  that  rates  charged 
for  short-time  funds  can  be  regulated  by  policy,  shift  their  position 
when  investigating  the  influences  regulating  long-time  interest  rates — 
the  rates  at  which  they  conceive  the  values  of  durable  goods  to  be 
capitalized."  It  is  believed,  however,  that  the  method  of  approach  to 
the  problem  of  long-time  rates  should  be  substantially  the  same.  Prob- 
lems of  policy  arise  in  this  field  also — indeed,  such  problems  are  but 
variants  of  the  general  problem  of  credit  policy  which  should  be  viewed 
as  a  wliolc,"  The  so-called  long-time  rate  has  no  existence  apart 
from  the  money  market  any  more  than  have  short-time  rates.  It  is  a 
derived  rate  based  on  an  average  of  day-to-day  rates  actually  charged 
in  various  long-time  contracts  negotiated  in  the  market.  Such  aver- 
ages are  the  ones  applied  to  the  valuation  of  income  bearers  and  it  is 
not  believed  that  rates  of  capitalization  exist  apart  from  the  rates 
actually  paid  in  the  money  market.  At  least,  if  they  do,  they  are 
realities  that  are  without  tangible  expression.  The  so-called  long-time 
interest  rates  (and  the  distinction  between  long  and  short  is  of  course 
arbitrary)  have  been  made  the  subject  of  many  unwarranted  general- 
izations by  contrast  with  short-time  rates.  Not  only  have  long-time 
rates  usually  been  accorded  a  metaphysical  reality  denied  to  short- 
time  rates,  but  even  when  tlie  discussion  has  proceeded  in  market 
terms  they  have  been  differently  conceived,  thought  of  as  averages  over 
a  period  of  time,  rather  than  as  prices  constantly  changing.  It  may 
be  conceded  that  fluctuations  of  rates  in  long-time  contracts  are  as  a 
rule  less  extreme  than  fluctuations  of  call  loan  rates  but  comparisons 

in  the  purchase  of  motor  trucks  of  a  corporation  engaged  in  the  business  of  fur- 
nishing motor  transportation  are  not  eligible  for  discount,  as  such  trucks  repre- 
sent in  a  large  extent  the  corporation's  capital  investment." 

"Cf.,  for  example,  D.  Friday,  Profits,  Wages  and  Prices,  chapter  on  "The  Rate  of 
Interest." 

"In  this  connection  it  may  be  noted  that  it  is  hard  to  see  how  any  question  of 
credit  policy  can  arise — apart,  that  is,  from  the  necessity  of  maintaining  legal  re- 
serves— if  one  holds  that  all  genuine  commercial  loans  are  self-liquidating  and  that 
banks  should  confine  their  operations  to  loans  of  such  type.  The  only  question 
then  becomes  one  of  rigid  scrutiny  of  the  paper  offered  or  investigation  to  deter- 
mine whether  proceeds  are  intended  for  current  uses,  in  cases  where  the  paper  does 
not  reveal  the  type  of  transaction.  If  paper  is  unimpeachable,  or  so  appears, 
ought  not  loans  and  discounts  to  be  made  as  a  matter  of  course?  What  should  be 
the  policy  of  central  banks  under  such  circumstances?  The  belief  sometimes  ex- 
pressed that  the  federal  reserve  banks,  for  instance,  should  accept  all  "good" 
paper  offered  to  them,  would,  if  made  the  basis  of  policy,  deprive  the  system  of 
every  vestige  of  effective  control.  Policy  has  in  fact  led  to  refusal  to  grant  loans, 
and  the  graduated  discount  rates  imposed  upon  certain  member  banks  in  some 
sections  were  a  timid  substitute  for  downright  refusal  to  grant  more  credit,  irre- 
spective of  the  type  of  paper  being  offered  for  discount.  These  graduated  rates, 
reviled  as  an  instrument  of  exploitation,  were  actually  a  concession  to  the  clamor  for 
more  credit. 


1922]     A  Popular  Thcorij  of  Credit  Applied  to  Credit  Policy         427 

are  seldom  made  in  proper  fashion.  Long-time  interest  rates  change 
perpetually  as  do  call  rates,  and  such  changes  are  only  known  by  the 
interest  which  the  borrower  of  purchasing  power  agrees  to  pay  at  the 
time  the  contract  is  made.  Not  only  will  the  long-time  interest  rate 
of  today  be  something  different  tomorrow  but  its  fluctuations  depend 
upon  and  likewise  influence  other  market  rates.  Any  investment  banker 
knows  that  the  call  loan  rate  will  affect  the  terms  on  which  long-term 
loans  can  be  effected.  And  long-time  financing  operations  contrari- 
wise affect  call  rates.  It  is  hardly  necessary  to  call  attention  to  the 
effects  of  policy  in  reducing  the  long-term  rates  at  the  time  of  the 
Liberty  Loan  flotations,  yet  there  persists  this  disposition  to  believe 
that  long-term  (investment)  rates  are  largely  determined  by  forces 
conceived  to  be  "natural"  in  the  sense  of  being  divorced  from  money 
market  influences. 

There  is,  however,  another  reason  why  investment  activity  is  usually 
excluded  from  the  field  of  credit  policy,  even  by  writers  who  think 
of  all  forms  of  credit  in  terms  of  purchasing  power.  There  exists  a 
widespread  belief  that  a  reliable  measure  of  the  amount  of  purchasing 
power  that  can  be  safely  loaned  for  long  periods  of  time  is  found  in 
existing  time  or  savings  deposits  of  all  sorts  and  that  all  that  banks 
or  financial  institutions  need  to  do  is  to  act  as  intermediaries  in 
transferring  purchasing  power  from  those  who  save  to  those  who  want 
to  spend  such  purchasing  power  in  a  particular  way.''  L^sually  it  is 
felt  that  this  purchasing  power  should  be  directed  toward  durable 
production  goods.  This  attitude  assumes  a  rigid  segregation  of  sav- 
ings deposits  from  other  bank  deposits  which  notoriously  does  not 
exist.  But,  after  all,  back  of  the  question  whether  such  a  policy  of 
segregation  is  possible,  there  lurks  a  more  fundamental  question  as  to 
whether  it  is  always  desirable  to  devote  savings  deposits  exclusively 
to  the  purchase  of  those  classes  of  goods  whose  utilization  will  expand 
industrial  equipment  and  whether  all  "created"  banking  deposits  shall 
be  rigidly  diverted  from  such  cases.  Xow  every  analysis  of  the  nature 
of  investment  demand  on  the  technological  side  encounters  complexities 
that  elude  solution.  There  are  greater,  socially  speaking,  more  signi- 
ficant differences  existing  between  various  types  of  recognized  invest- 
ment demand  than  between  certain  types  of  investment  demand  and 
certain  tj^pes  of  commercial  demand  for  credit.  Purchasing  power 
that  is  directed  toward  the  purchase  of  production  goods  in  durable 

"As  a  matter  of  fact  it  is  very  hard  to  say  what  proportion  of  time  and  savings 
deposits  actually  represent  a  long-time  abstention  from  purchasing  on  the  part  of 
their  owners.  A  considerable  portion  of  such  deposits  is  likely  at  any  time  to  be 
heavily  withdrawn  and  devoted  to  immediate  purchasing  of  all  sorts.  The  in- 
sistence that  savings  institutions  shall  become  investors  in  short-time  paper,  such  as 
acceptances,  as  a  means  of  protection  against  unexpected  withdrawals  is  evidence  of 
the  fact  that  such  deposits  are  in  part  regarded  by  their  owners  as  demand  deposits. 


428  Anna  Youngman  [September 

form  has  a  very  different  effect  from  purchasing  power  directed  toward 
the  raw  materials  out  of  wliich  such  goods  are  to  be  made,  or  directed 
toward  control  of  the  services  of  land  and  labor  to  be  used  in  con- 
nection with  productive  activities.  Loans  obtained  against  mortgages 
on  land,  when  used  to  buy  more  land,  are  in  a  very  different  category 
from  loans  against  mortgages,  whose  proceeds  are  used  to  improve  the 
land.  Given  the  fact,  therefore,  that  formal  classification  throws  so 
little  light  on  the  social  and  economic  results  of  lending  operations,  it 
may  be  concluded  that  a  credit  policy  cannot  be  restricted  to  a  formal- 
ly defined  field  of  borrowing,  if  it  is  to  be  really  effective  in  the  control 
and  distribution  of  credit,  and  if  it  is  to  prevent  price  maladjustments 
resulting  from  undue  borrowing  by  certain  elements  in  the  community. 
Suppose,  for  example,  that  a  hard  and  fast  rule  of  using  all  savings 
to  purchase  limited  categories  of  production  goods  were  practicable 
and  enforceable.  It  might  lead  to  overstimulation  of  the  buying  de- 
mand for  such  goods  at  the  expense  of  the  markets  for  raw  materials 
and  finished  goods.  On  the  other  hand,  the  amount  of  savings  might 
be  so  limited  as  to  restrict  unduly  the  demand  for  production  goods. 
In  either  case,  the  results  would  be  disastrous  not  only  to  investment 
but  to  commercial  banking  interests  whose  "liquid"  loans  are  only 
liquid  to  the  extent  that  fixed  capital  functions,  "circulating"  capital 
circulates,  and  both  productive  consumers  and  ultimate  consumers  buy 
as  expected. 

Before  the  war,  German  writers  on  finance  perpetually  complained 
that  in  Germany  long-time  loans  carried  unduly  high  interest  rates 
as  compared  with  short-time  loans.  What  was  the  explanation.''  Pur- 
chasing power  created  by  the  banks  and  used  in  the  market  for  short- 
term  loans  had  been  sufficiently  plentiful  to  meet  demands  on  the  basis 
of  low  rates.  But  in  the  market  for  long-term  investments,  the  supply 
of  purchasing  power  offered  for  sale  had  been  more  or  less  limited  by 
reference  to  the  amounts  of  savings  deposits,  so  far  as  they  could  be 
estimated.  At  an}^  rate,  the  relatively  extreme  divergence  of  rates 
indicated  a  hindrance  of  some  sort  to  the  competitive  shifts  that 
would  otherwise  have  tended  to  reduce  the  unusual  spread  existing  be- 
tween long  and  short-term  rates.  As  a  matter  of  fact,  this  situation 
was  tending  to  correct  itself  by  a  growing  policy  among  the  banks  of 
extending  short-time  accommodation  to  favored  borrowers  who  wanted 
it  for  long-time  purposes.  This  tendency  was  an  inevitable  outgrowth 
of  a  maladjustment  which  it  served  to  correct.  Hence  it  is  curious  to 
find  Herr  Heiligenstadt,  president  of  the  Preussenkasse,  deploring  the 
tendency  and  at  the  same  time  calling  attention  to  the  unfortunate 
social  and  economic  effects  of  an  undue  spread  between  long  and  short- 


1922]     A  Popular  Theorij  of  Credit  Applied  to  Credit  Policy         429 

time  rates."  In  an  article  on  "Der  deutsche  Geldmarkt,"  (pp.  76-77), 
he  says :  "In  any  given  condition  of  industry,  there  must  exist  a  de- 
finite   relation   between    fixed    and    circulating    capital Against 

every  violation  of  this  economically  necessary  relationship  between 
fixed  and  circulating  capital  the  money  market  will  eventually  react 
with  the  greatest  force The  weakening  of  the  national  cir- 
culating capital  is  the  root  of  our  economic  embarrassment."  That 
is,  the  writer  thinks  the  tendency  has  been  to  put  too  much  of  the 
national  circulating  capital  which  ought  to  be  maintained  in  liquid 
form  into  fixed  investments.  But,  to  repeat,  since  the  saving  disposi- 
tion of  a  people  is  not  particularly  amenable  to  policy,  an  evening-up 
process  either  involves  encouraging  the  practice  complained  of,  or  else 
limiting  as  a  matter  of  policy,  the  supply  of  purchasing  power  offered 
for  short  periods  of  time.  J.  Plenge,  in  a  book  on  discount  policy 
published  in  1913,  at  least  touches  upon  the  possibility  of  modifying 
the  spending  and  saving  habits  of  a  people  to  make  possible  a  more 
rapid  creation  of  "capital"  and  thereby  bring  about  an  equalization 
of  long  and  short-time  interest  rates. ^° 

It  must  be  admitted  that  even  in  countries  having  highly  centralized 
commercial  banking  systems,  the  control  of  the  direction  of  savings 
funds  is  not  so  immediately  subject  to  the  decision  of  bankers  as  are 
short-time  funds,  because  individuals  have  a  greater  direct  voice  in 
dictating  the  disposition  to  be  made  of  their  savings.  But  after  all, 
their  choices  are  determined  .by  the  opportunities  for  investment  offered 
by  investment  bankers  and  financing  agencies  dependent  in  their  turn 
upon  loans  furnished  by  the  commercial  banking  system.  Consequent- 
ly individual  savings  are  in  good  part  forced  into  predetermined 
channels.  There  are  innumerable  points  of  inevitable  contact  more- 
over between  long-time  and  short-time  lending  operations.  Attention 
may  be  called  to  some  of  the  best-known  types.  Surpluses  of  corpora- 
tions, intended  eventually  to  be  used  in  permanent  investment  expan- 
sion, find  temporary  utilization  in  purchases  of  bills  or  other  short- 

"C/.  C.  Heiligenstadt,  "Der  deutsche  Geldmarkt,"  Schmoller's  Jahrbuch,  March, 
1907;  also,  Fragen  des  Geldmarktes  (Berlin,  1906). 

^°J.  Plenge,  Von  der  Diskontpolitik  zur  Herrschaft  iiber  den  Geldmarkt.  (Berlin, 
1913),  p.  222.  "Precisely  as  involuntary  and  unplanned  is  the  equalization  of  the 
capital  market  in  each  of  its  chief  reservoirs.  No  care  is  taken  that  this  year,  the 
perhaps  growing  capital  needs  of  state  and  municipality  or  the  demands  of  industry 
facing  new  technological  tasks,  shall  be  satisfied  by  increased  savings.  No  effort  is 
made  in  decades  of  increasing  capital  demand  to  see  that  the  consumptive  habits  of 
the  people  make  it  possible  to  bring  about  a  more  rapid  creation  of  capital.  On  the 
other  hand,  just  as  little  attempt  is  made  in  a  period  of  very  rapid  increase  in  the 
supply  of  credit  capital,  to  see  that  the  need  for  circulating  capital  in  trade  and 
industry  correspondingly  increases,  with  the  inevitable  result  that  the  introduction 
of  this  new  capital  which  is  at  the  same  time  new  money,  would  bring  about  inflation 
in  its  true  sphere  of  efPecting  the  actual  transfer  of  goods,  which  however,  it  does 
not  do  when  it  flows  off  partially  into  investment  channels." 


430  Anna  Youngman  [September 

time  securities.  Securities  may  be  bought  with  savings  or  their  pur- 
chases may  be  financed  through  the  proceeds  of  call  loans.  Funds 
transferred  to  a  borrower  who  expects  to  use  them  for  long-time 
purchases,  may  be  temporarily  reloaned  in  the  short-term  market.  And 
there  is  also  the  familiar  procedure  of  borrowing  for  short  periods 
of  time  with  every  intention  of  eventually  funding  the  short-term 
obligations  into  long-term  loans,' 

Despite  recognition  of  the  prevalence  of  this  practice  of  perpetually 
shifting  purchasing  power  between  long  and  short-time  investments, 
there  is  a  widely  held  belief  that  inflation  is  sure  to  result  unless  in- 
vestment operations  can  be  limited  to  or  be  measured  by  the  savings  of 
individuals.  That  leads  one  to  a  consideration  of  how  inflation  is 
brought  about  and  whether  it  necessarily  results  from  an  extension  of 
commercial  banking  operations  into  the  investment  field.  Sometimes  it 
is  said  that  the  latter  type  of  loan  is  inflationistic  because  it  is  a  claim 
on  wealth  in  general  instead  of  being  a  claim  upon  specific  goods  passing 
through  various  production  stages.  The  answer  to  this  is  that  credit 
of  every  sort  is  a  claim  on  wealth  in  general  in  the  sense  that  it  is  pur- 
chasing power  which  can  be  used  to  buy  things,  no  matter  what  the 
nature  of  the  transaction  to  which  it  is  ostensibly  tied  or  what  the 
type  of  property  upon  the  security  of  which  the  bankers  have  been 
willing  to  transfer  the  use  of  purchasing  power  either  for  longer  or 
shorter  periods  of  time.  Long  and  short-term  credit  is  in  essence 
the  same.  It  is  easy  to  think  of  a  long-time  loan  as  a  succession  of 
short-time  loans,  renewed  at  intervals.  And  such  loans  can  in  indi- 
vidual cases  gencrall}^  be  "liquidated"  at  any  instant  by  transfer  of  the 
property  bought  with  the  proceeds  of  loans  even  if  it  is  in  fixed  capital 
form.  Of  course,  such  liquidation  cannot  go  beyond  customary  pro- 
portions. On  tlie  other  hand,  short-term  loans  are  often  long-term 
loans,  technically  })ayable  at  intervals.  And  in  any  case,  even  when 
the  proceeds  of  loans  have  been  used  to  buy  so-called  circulating 
capital  goods  as,  for  example,  raw  materials  which  are  to  be  worked 
up  and  transferred  by  sale,  or  commodities  which  are  merely  to  be 
shifted  unchanged  from  one  distribvitive  stage  to  another,  it  does  not 
follow  that  liquidation  can  be  forced  any  more  than  it  can  be  in  the 
investment  field.  The  conclusion  is  that  credit  of  one  sort  is  not  of 
necessity  any  more  inflationistic  than  credit  of  an}'  other  sort.  Infla- 
tion follows  when  tiie  ex})ansion  of  credit  (purchasing  power)  in  toto, 
no  matter  how  used,  proceeds  at  a  rate  so  rapid  that  the  efl'ective 
pecuniary  deniand  directed  toward  all  sorts  of  goods,  durable  and 
transient,  and  toward  all  kinds  of  services  is  more  than  suflficient  to 
take  ofl'  supplies  of  these  things  at  current  prices.      It  is  undeniably 

"Cf.  J.  Plengc,  Von  dcr  Ditikontpolitik  zur  Ilerrschaft  iiber  den  Oeldmarkt,  pp. 
2 19-226. 


1922]     A  Popular  Theory  of  Credit  Applied  to  Credit  Policy         431 

true  that  the  disposition  to  extend  credit  to  persons  prepared  to 
pledge  property  which  they  have  no  desire  or  intention  of  selling  has 
an  inflationistic  tendency  so  long  as  new  forms  of  such  property  are 
being  brought  into  the  credit  system  and  used  to  serve  as  a  basis  upon 
which  to  request  loans/'  The  difficulty  with  such  loans  is  that  con- 
siderations of  individual  safety  rather  than  questions  of  general  policy 
are  likely  to  determine  whether  they  shall  be  granted  or  not.  The 
amount  of  such  applications  should  of  course  be  controlled,  irre- 
spective of  the  excellence  of  the  underlying  security.  And  tlie  pur- 
poses to  which  the  proceeds  are  to  be  devoted  should  be  scrutinized, 
as  in  the  case  of  other  types  of  loans. 

Another  sort  of  theoretical  objection  to  the  attempt  to  apply  a 
credit  policy  to  the  market  for  long-time  loans  has,  curiously  enough, 
been  raised  by  H.  G.  Moulton,  the  economist  who  has  done  so  much  to 
show  the  intimate  dependence  of  investment  operations  upon  the  com- 
mercial banking  system  as  it  is  commonly  conceived  of.  He  believes 
that  a  discount  policy  intended  to  control  inflation  by  raising  rates 
will  have  the  effect  of  raising  the  rents  of  goods  of  a  durable  sort  such 
as  buildings,  for  example.  He  argues  that  a  scarcity  of  such  goods 
will  follow  because  of  increased  expenses  of  production  growing  out 
of  the  higher  interest  rates  that  have  to  be  paid  for  borrowed  funds." 
This  flies  in  the  face  of  the  facts  of  valuation  as  applied  to  durable 
goods  in  a  period  of  rising  interest  rates  and  appears  to  be  theoreti- 
cally invalid  for  the  following- reasons.  First,  the  interest  on  borrowed 
purchasing  power  is  not  an  invariable  element  in  cost  of  production 
and  cannot  be  directly  determinant  of  price.  Changes  in  interest  rates 
exert  an  importance  according  to  the  more  or  less  of  borrowed  purchas- 

"C/.  J.  A.  Hobson,  Gold,  Prices  and  Wages  (p.  91):  "Only  when  the  bulk  of 
the  industrial  world  is  so  far  standardized  in  its  business  structure  that  the  greater 
part  of  those  forms  of  wealth  capable  of  supporting  credit  have  been  brought  into 
the  credit  system,  is  there  any  sure  prospect  of  a  reduction  in  the  pace  of  growth 
of  credit  acting  on  world  prices." 

"Cy.  H.  G.  Moulton,  "Banking  Policy  and  the  Price  Situation,"'  Papers  and 
Proceedings  of  the  Thirty-second  Annual  fleeting  of  the  American  Economic 
Association,  p.  170:  "While  an  increase  in  the  rates  of  rediscount  would  curtail 
the  volume  of  outstanding  loans,  it  should  not  be  overlooked  that  it  will  accomplish 
other  things  as  well.  For  instance,  it  will  increase  the  costs  of  conducting  business 
all  along  the  line.  This  increase  in  costs  must  be  reflected  either  in  increased 
prices  or  in  decreased  profit  margins.  It  is  necessary  that  we  clearly  perceive  that 
one  result  of  the  increase  in  rediscount  rates  will  therefore  be  to  curtail  the  possi- 
bilities of  business  expansion  during  the  coming  year.  There  is  a  tremendous  need 
for  the  construction  of  additional  houses,  additional  railroads,  additional  public 
utilities,  and  additional  industrial  equipment  in  order  to  permit  us  to  recover  from 
the  effects  of  the  curtailment  of  construction  operations  during  the  war.  To  raise 
the  rates  of  discount  at  the  present  time  will  increase  the  cost  of  such  construction 
at  a  moment  when  such  building  operations  are  already  being  seriously  retarded  in 
consequence  of  the  enormously  high  cost  of  construction. 

Cf.  Criticism  of  this  contention,  ibid.,  p.  181,  by  G.  W.  Dowrie. 


432  Anna  Youngman  [September 

ing  power  employed.  The  effect  upon  price  is  indirect.  Higher  interest 
rates  per  se  tend  to  make  for  lower  values  of  building  materials,  to  the 
extent  that  the  higher  prices  charged  for  the  use  of  purchasing  power 
restrict  demands  for  such  materials.  The  uses  of  completed  build- 
ings may  remain  dear  under  such  circumstances  because  of  scarcity 
of  the  use-bearers  but  the  higher  rates  will  not  hinder  but  rather  help 
to  overcome  this  scarcity  by  reducing  the  costs  of  new  buildings. 
Hence  a  discount  policy  which  aims  to  control  price  inflation  in  the 
case  of  goods  intended  for  a  rapid  turnover  ought  to  be  applicable 
to  goods  which  are  to  be  embodied  in  more  permanent  forms. 

The  general  conclusions  that  have  been  reached  are  merely  prelimi- 
nary to  a  consideration  of  the  special  problems  of  policy  that  con- 
front the  federal  reserve  system.  Since  the  grant  of  credit  is  in- 
evitably and  in  the  nature  of  the  case  a  matter  of  policy,  it  should  be 
conscious  and  unified,  and  for  that  reason  there  should  be  a  wide  power 
of  direction  and  control  lodged  in  the  hands  of  the  management  of  any 
central  banking  system.  To  be  fully  effective,  furthermore,  this  con- 
trol nmst  embrace  the  market  for  investment  loans  as  well  as  for 
short-time  loans.  If  tliis  responsibility  is  recognized  and  accepted, 
the  existing  mechanism  must  be  adapted  to  this  end.  Hampering 
customary  or  legal  restrictions  nmst  be  abrogated  or  else  the  central 
bank  authorities  must  disavow  the  responsibility  that  the  public 
uncritically  insists  upon  placing  on  them.  If  the  contention  pre- 
viously advanced  is  a  correct  one,  namely,  that  it  should  be  the  aim  of 
policy  to  maintain  a  balance  between  investment  and  short-time  lending 
operations,  the  federal  reserve  banks  ought  to  have  some  means  of 
influencing  the  apportionment  of  credit  supplies  between  these  uses. 
In  that  case  if  the  interest  rates  for  long  and  for  short  periods  showed 
a  marked  spread,  it  would  be  a  signal  for  interference.  To  illustrate: 
suppose  the  reserve  banks  were  permitted  both  to  rediscount  and  to 
lend  directly  against  stock  and  bond  collateral.  The  reserve  institu- 
tions would  then  be  in  a  position  to  make  their  influence  felt  in 
the  general  investment  market,  since  they  could  at  discretion  raise 
or  lower  rates  charged  for  carrying  loans  of  this  type,  in  relation  to 
other  classes  of  loans.  The  problem  of  credit  control,  is  after  all,  not 
simply  a  matter  of  increasing  or  decreasing  the  credit  supply  in  toto 
but  of  seeing  that  it  is  apportioned  adequately  among  the  various 
grou})s  of  borrowers.  Undul}'^  high  or  unduly  low  rates  charged  for 
particular  types  of  loans  may  bring  about  nmch  worse  maladjustments 
than  either  too  great  liberality  or  too  great  niggardliness  of  an  im- 
partial sort.  It  is  recognized  of  course  that  at  present  the  control  of 
the  federal  reserve  system  is  not  only  imperfect  in  relation  to  the 
existing  membership  but  also  incomplete,  as  a  result  of  the  existence 


1922]     A  Popular  Theory  of  Credit  Applied  to  Credit  Policy         433 

of  large  numbers  of  non-member  banks  that  have  but  remote  con- 
nections with  the  system.  It  should  not  be  forgotten,  however,  that  the 
distinction  between  members  and  non-members  is  not  based  upon  differ- 
ences between  banks  doing  a  primarily  commercial  business  on  the  one 
hand,  and  investment  institutions  on  the  other.  Many  banks  doing  an 
extensive  commercial  business  are  excluded,  while  large  trust  com- 
panies whose  investment  activities  are  of  preponderant  importance 
have  been  taken,  indeed  urged,  into  the  system."" 

Color  has  been  given  to  the  belief  that  credit  policy  can  only  be 
effective  in  the  market  for  short-time  loans  by  the  fact  that  in  the 
case  of  European  central  banks,  discount  policies  have  been  conscious- 
ly tested  out  in  central  money  markets,  and  the  literature  on  the 
subject  has  been  confined  chiefly  to  a  description  of  the  methods 
employed  in  controlling  a  very  limited  class  of  operations  carried  on 
by  the  large  banks  and  credit  middlemen  in  immediate  contact  with 
the  central  banks.  The  bill  market  in  large  financial  centers  (and 
New  York  City  is  no  exception)  offers  an  extreme  case  of  sensitive 
response  to  central  bank  rate  changes.  But  that  is  no  reason  why 
attempts  to  influence  outside  market  dealings  should  be  confined  to 
that  limited  field.  In  New  York  City,  for  example,  dealers  in  accept- 
ances, as  distinct  from  accepting  banks,  operate  almost  exclusively 
with  borrowed  funds.  Their  profits  consist  in  acting  as  intermedi- 
aries in  shifting  loans  from  one  lender  to  another  (i.  e.,  from  the 
accepting  bank  that  grants  credit  by  accepting  to  another  bank  that 
is  willing  to  purchase  the  acceptance).  If  the  dealer  who  buys  the 
bills  as  a  means  of  effecting  these  transfers  has  to  pay  as  high  a  rate 
on  the  funds  borrowed  for  that  purpose  as  he  subsequently  pays  in 
reconverting  his  loan  into  purchasing  power,  he  makes  no  profits.  And 
it  is  very  easy  to  suffer  losses  in  such  transactions.  Hence  dealers  are 
in  a  position  where  every  change  in  rates  on  call  money,  with  which 
they  usually  operate,  is  a  matter  of  grave  importance,  and  the  scope 
of  their  operations  is  immediately  influenced  by  such  changes.  When, 
as  in  the  New  York  market,  dealers  are  often  dependent  upon  loans 
obtained  directly  from  the  federal  reserve  bank,  the  open  market  rates 
of  the  latter  directly  determine  the  extent  of  such  dealings.^  It  is 
admittedly  a  far  cry  from  this  type  of  control  to  the  sort  of  control 
that  is  concerned  with  the  amount  of  credit  to  be  granted  to  manu- 
facturers for  expanding  industrial  equipment  or  to  farmers  and  stock- 
men for  growing  crops  or  raising  live  stock.  The  problem  of  how  to 
establish  such  control  is  a  very  different  one  and  a  difficult  one,  but 
that  is  not  saying  that  it  ought  not  to  be  done.  The  question  is — 
how  best  to  do  it. 

"Note  also  provisions  of  Edge  act   (1919). 

"'Sales  made  under  15-day  repurchase  agreements  are  thinly  disguised  loq^^ 


434<  Anna  Youngman  [September 

It  might  as  well  be  admitted  that  such  an  all-embracing  type  of 
credit  policy  seems  highly  improbable  of  attainment  under  existing 
conditions,  given  the  fact  that  the  federal  reserve  banks  have  had  such 
limited  powers  of  control  even  within  the  restricted  field  assigned  to 
them  by  law.  But  unless  a  goal,  no  matter  how  remote  it  may  seem, 
is  consciously  set,  tliere  arc  no  consistent  standards  by  which  to  judge 
the  expediency  or  significance  of  proposed  modifications  of  law  and 
policy  that  will  have  to  be  considered  from  time  to  time.  Some  of  the 
immediate  obstacles  in  the  way  of  control  over  member  bank  rate 
charges  have  already  been  alluded  to.  Proposals  designed  to  over- 
come this  lack  of  responsiveness  sliould  fit  into  a  general  scheme  of 
policy,  instead  of  being  opportunistic  devices  to  meet  the  needs  of  the 
moment.  The  evidence  goes  to  prove  a  very  general  lack  of  relation- 
ship between  rediscount  rates  and  the  rates  paid  by  the  public  to  mem- 
ber banks.  In  some  instances,  member  banks  are  in  the  position  of 
minor  monopolists  who  charge  what  the  traffic  will  bear ;  and  there  are 
sections  of  the  country  in  which  it  will  bear  10,  12  or  14  per  cent. 
In  parts  of  the  country  where  it  is  not  feasible  to  put  the  rediscount 
rates  of  the  federal  reserve  banks  above  rates  charged  by  member 
banks,  there  should  be  a  steady  drive  against  such  rates  in  the  form 
of  a  refusal  to  rediscount  for  banks  making  excessive  charges,  or 
else  in  the  shape  of  direct  loans  to  overcharged  borrowers,  because  a 
rediscounting  agency  such  as  the  federal  reserve  system  cannot  have 
any  effective  control  over  credit  policy,  even  in  a  period  of  credit 
expansion,  so  long  as  it  has  no  influence  over  the  rates  charged  to  the 
general  public.  When  the  member  banks  have  surplus  reserves,  it  is 
quite  obvious  that  a  pure  rediscounting  agency  loses  all  control  over 
the  amount  of  credit  supplied  to  the  public  and  over  the  rates  at  which 
it  is  furnished.  The  conclusion  is  that  a  rediscounting  agency  as 
such  can  never  control  a  credit  situation  through  rate  changes,  when  it 
sells  its  credit  at  rates  below  the  rates  charged  to  the  public.  Under 
such  circumstances,  its  only  method  of  control  in  a  period  of  expanding 
business,  is  rationing.  In  a  period  of  declining  business  its  role  is 
passive.  In  order  to  enforce  its  policies,  therefore,  the  federal  re- 
serve system  must  extend  the  scope  of  its  direct  dealings  with  the 
public  (^.  e.,  its  open  market  operations).  It  was  suggested  in  a  pre- 
vious paper  that  the  bill  market  was  not  the  only  one  to  which  the 
resources  of  the  system  could  be  safely  and  elTectively  applied.  It  was 
contended  that  commercial  paper  and  loans  against  salable  securities 
might  very  well  be  added  to  the  category  of  paper  obtained  directly, 
not  with  a  view  simply  to  employing  the  resources  of  the  system  but 
with  intent  to  put  it  in  a  position  more  effectively  to  influence  member 
bank  activities  and  to  bring  about  equitable  rate  adjustments  when 
the  market  mechanism  was  not  working  adequately  and  it  was  felt 


1922]    A  Popular  Theory  of  Credit  Applied  to  Credit  Policy        435 

that  particular  groups  of  borrowers  were  either  undersupplied  or 
oversupplied  with  funds.  It  is  not  without  significance  in  this  con- 
nection to  note  that  the  Federal  Reserve  Board  in  its  annual  report 
for  1921  emphasizes  its  lack  of  direct  dealings  with  the  public  in 
refuting  critics  who  have  imputed  to  it  responsibility  for  deflation  and 
business  depression/'  This  lack  of  direct  contact  with  the  borrowing 
public  must  be  recognized  as  a  very  real  limitation  upon  the  responsi- 
bility of  the  board  either  for  credit  expansion  or  for  contraction. 
But  this  ver}^  fact  is  an  argument  for  the  extension  of  direct  dealings 
and  for  that  reason  strong  objection  can  be  made  to  a  recent  statement 
of  the  Advisory  Council  (January,  1922)  to  the  effect  that  "the 
federal  reserve  system must  not  be  permitted  to  deal  with  cus- 
tomers direct  and  thereby  incur  the  risk  of  immobilizing  its  funds  in 
credits  that  may  conceivably  become  frozen.  Whatever  relief  the 
federal  reserve  banks  may  furnish  must,  therefore,  be  granted  through 
the  intermediary  and  under  the  responsibility  of  banking  channels." 

As  a  matter  of  fact,  the  question  whether  the  direct  lending  activi- 
ties of  the  federal  reserve  system  ought  to  be  extended  has  been  more 
or  less  debated  in  connection  with  a  discussion  of  agricultural  credits. 
The  bill  now  pending  in  Congress  which  seeks  to  meet  the  demand  for 
an  intermediate  type  of  agricultural  loans  does  not,  however,  provide 
for  any  direct  grant  of  loans  by  the  reserve  banks.  On  the  contrary, 
it  would  remove  them  one  step  farther  away  from  the  borrowing  public 
so  far  as  this  particular  type  of  agricultural  lending  is  concerned. 
The  bill  provides  for  the  establishment  of  credits  departments  in  the 
federal  land  banks  whose  function  it  will  be  to  furnish  farmers  and 
live-stock  men  with  loans  running  from  6  months  to  3  years.  Paper 
taken  by  these  credits  departments  from  banks,  incorporated  live-stock 
companies,  and  cooperative  associations  of  agricultural  producers  is 
made  eligible  for  rediscount  with  the  federal  reserve  banks  when  it  is 
within  six  months  of  maturity.  The  reserve  banks  may  also  buy 
debentures  issued  by  the  federal  land  banks  still  having  six  months  to 
run.  Although  these  provisions  of  the  bill  are  permissive,  not  manda- 
tory, there  is  no  arrangement  made  for  subordinating  the  activities  of 
the  new  organizations  in  a  way  to  make  them  conform  to  the  general 
policies  of  the  federal  reserve  system.  It  would  indeed  be  entirely 
possible  for  the  two  groups  of  institutions  to  work  in  opposition  to 
each  other. 

The  Agricultural  Conference  which  held  sessions  in  Washington  in 
January  gave  its  support  to  more  radical  recommendations  which 
would  permit  the  federal  reserve  banks  to  make  direct  loans  to  agri- 
culturists without  intervention  of  intermediaries  and  to  buy  short-time 
"C/.  Eighth  Annual  Report  of  the  Federal  Reserve  Board,  pp.  90-99. 


436  Anna  Youngman  [September 

debentures  without  the  restrictive  six-months  provision.  But  these 
recommendations  are  no  more — even  less — acceptable  than  the  ones 
just  discussed,  because  they  are  definitely  discriminatory.  The  pro- 
posal to  make  such  direct  loans  is  not  part  of  a  general  policy  of 
expanding  open  market  operations.  It  has  the  character  of  a  special 
favor,  granted  to  particular  classes  of  producers  and,  as  such,  would 
be  liable  to  lead  to  abuse  of  privileges  and  misdirection  of  credit 
grants.  In  this  plan  also  there  is  no  hint  of  a  desire  to  subordinate 
the  federal  land  bank  system  to  the  federal  reserve  system  with  a  view 
to  developing  a  harmonious  policy. 

Prussian  experience  in  attempting  to  provide  credits  on  a  suitable 
and  reasonable  basis  to  agriculturists  and  also  to  small  business  in- 
terests offers  many  valuable  suggestions  for  the  solution  of  the  Ameri- 
can problem  of  agricultural  credits.  The  Prussian  agriculturist  was 
provided  with  a  subsidized  centralized  government  agency,  the  Preus- 
senkasse,  as  a  means  of  access  to  the  credit  facilities  of  the  banks  in 
the  leading  money  centers  for  the  financing  of  his  short-time  credit 
needs.  This  government  lending  agency  was  not  only  in  possession  of 
funds  provided  by  the  government,  but  it  was  able  to  dispose  of  paper 
of  the  various  cooperative  unions  subsidiary  to  it  and  in  that  way 
obtain  funds  at  reasonable  rates  for  the  use  of  its  membership.  It 
furtliermorc  at  times  rediscounted  with  or  obtained  loans  from  the 
Ileichsbank  when  the  outside  market  was  not  favorable.  There  was  a 
good  deal  of  complaint  to  the  effect  that  the  bills  rediscounted  by  it 
with  the  Reichsbank  were  purely  in  the  nature  of  accommodation  bills 
and  represented  fairly  long-term  loans.  The  Reichsbank,  however, 
was  not  ruined  by  its  practice  of  taking  such  paper;  neither  did  the 
credit  structure  of  the  country  collapse.  But  there  was  undeniably 
friction  due  to  tlie  fact  tliat  the  president  of  the  Preussenkasse  was 
entirely  independent  of  the  Reichsbank  management,  and  that  his 
operations  were  at  times  calculated  to  interfere  with  the  Reichsbank 
])olicv.  There  was  also  complaint  at  times  from  the  industrialists 
that  the  agriculturists  could,  as  a  result  of  governmental  policy  as 
made  effective  tlirough  the  Preussenkasse,  get  loans  at  stable  and  low 
i-ates  even  wlien  tlie  big  industrialists  and  speculators  were  paying 
high." 

The  lesson  of  German  experience  appears  to  be  that  it  is  possible 
to  make  adecjuate  and  cheap  provision  for  agricultural  loans  but  that 
responsibility  for  the  provision  of  such  credits  ouglit  not  to  be  given 
over  to  an  institution  that  is  independent  of  the  central  bank  manage- 
ment. In  the  T^nited  States  the  establishment  of  a  special  central 
organization  to  care  for  agricultural  needs  would  be  even  more  pro- 

^Cf.  W.  Prion,  D«.f  dcutsche  Wechseldiskontgeschdft  (Leipzig,  1907),  sections  re- 
lating to  Preussenkasse. 


1922]     A  Popular  Theory  of  Credit  Applied  to  Credit  Policy         437 

vocative  of  trouble  than  in  Germany  for  many  reasons.  The  Preus- 
senkasse,  for  example,  did  business  with  unions  composed  of  coopera- 
tive groups  organized  for  the  purpose  of  obtaining  loans  that  they 
were  not  able  to  secure  directly.  They  were  not  reached  by  the  large 
powerful  banks  and  the  country-side  was  not  provided  with  small  in- 
dependent banks  of  the  type  found  throughout  the  United  States. 
There  was  more  reason  for  building  up  a  separate  organization  under 
such  circumstances  than  there  would  be  in  this  country  where  the 
organization  of  farmers  into  cooperative  credit  associations  is  a  slow 
and  difficult  task,  rendered  all  the  harder  by  the  fact  that  banks  in 
the  United  States  actually  provide  much  of  the  relatively  long-time 
and  very  long-time  credits  needed  by  the  farmer.""  Any  central  agri- 
cultural lending  agency  that  may  be  established  under  government 
auspices  in  the  United  States  will  therefore  have  to  do  its  principal 
business  with  the  banks  that  rediscount  with  the  federal  reserve  banks. 
Its  operations  in  any  case  ought  to  be  conducted  within  the  limits  set 
by  a  general  policy  and  this  becomes  especially  necessary  wlien  it  has 
the  same  class  of  customers  as  have  the  central  banks. 

An  emergency  institution,  such  as  the  War  Finance  Corporation, 
for  example,  has  had  to  conduct  its  operations  chiefly  by  lending  to 
banks  instead  of  by  making  direct  loans,  and  the  lack  of  a  definite 
agreement  with  the  federal  reserve  banks  has  led  to  certain  inevitable 
abuses.  Complaint  has  been  made  with  some  evidence  to  support  it, 
that  banks  have  borrowed  from  the  Corporation  in  order  to  pay  their 
debts  to  the  reserve  banks,  and  have  shown  no  disposition  to  become 
any  more  generous  in  their  dealings  with  the  public.  Some  of  them 
have  undoubtedly  unloaded  slow  loans  upon  the  Corporation  which 
they  could  have  continued  to  carry.  In  certain  cases,  the  law  designed 
to  give  the  borrower  the  benefit  of  lower  rates  by  providing  that  loans 
obtained  through,  the  agency  of  banks  shall  be  negotiated  at  an  ad- 
vance not  exceeding  2  per  cent,  has  also  been  evaded  through  the 
addition  of  extra  commissions.  Control  of  credit  by  a  method  of 
indirection  through  intermediar}-  lending  agencies  is  difficult  at  best. 
It  becomes  well-nigh  impossible  if  such  intermediaries  are  permitted 
to  obtain  funds  from  two  independent  institutions  that  may  be  work- 
ing to  neutralize  each  other's  activities.  For  administrative  purposes 
only,  a  formal  segregation  from  the  federal  reserve  system  of  the 
agencies  designed  to  bring  about  a  more  equitable  distribution  of  agri- 
cultural credit  may  be  deemed  desirable.  But  it  is  very  undesirable, 
if    it    involves    independent    policies    in   making    loans,    whether    those 

^^C'/.  Letter  of  Secretary  of  Treasury  Transmitting  Fifth  Anmutl  Report  of  the 
Federal  Farm  Loan  Board.  On  p.  6  complaint  is  made  that  numerous  farm  loan 
associations  have  pursued  a  selfish  policy.  The  original  members  having  satisfied 
their  own  needs  become  virtually  a  closed  corporation  or  else  cease  to  function. 


438  Anna  Youngman  [September 

loans  are  long-time  mortgage  loans  or  relatively  short-time  credits. 
In  the  case  of  mortgage  loans,  flotations  of  new  issues  need  to  be 
carefully  planned  at  convenient  seasons  and  to  be  put  out  in  amounts 
and  under  conditions  pleasing  to  the  central  bank  authorities.  In 
making  provision  for  the  intermediate  type  of  loans,  problems  re- 
lating to  seasonal  needs  have  also  to  be  faced.  Unless  an  agricultural 
lending  agency  is  to  keep  possession  of  unused  resources  during  a  part 
of  the  year,  it  must  be  in  a  position  to  rediscount  or  to  obtain  loans 
directly  from  other  banks  in  the  money  centers.  Hence  the  provision 
that  the  proposed  credits  departments  of  the  federal  land  banks  shall 
be  permitted  to  rediscount  paper  with  the  reserve  banks.  It  is  believed 
that  this  privilege  should  be  accorded,  subject  to  rigid  control  by  the 
rediscounting  agencies.  In  other  words,  the  proposal  is  endorsed  in 
so  far  as  it  is  virtually  a  seasonal  expansion  of  operations  on  the 
part  of  the  central  banks  themselves  through  the  medium  of  subor- 
dinate and  only  formally  segregated  agencies. 

Reference  has  already  been  made  to  problems  of  credit  control  in 
relation  to  loans  against  stock  and  bond  collateral.  Through  direct 
dealings  in  and  rediscount  of  loans  collateraled  by  securities,  the  re- 
serve banks  could  make  their  influence  felt  most  efl'ectively  in  the 
general  investment  field.  They  would  be  enabled  at  discretion  to  curb 
or  to  encourage  a  diversion  of  purchasing  power  in  that  direction  by 
raising  or  lowering  the  rates  charged  for  carrying  investment  securi- 
ties in  relation  to  other  types  of  loans.  It  is  sometimes  hard  to  see 
the  reason  for  the  prejudice  against  such  loans.  It  appears  again 
and  again  even  in  the  comments  of  those  who  concede  the  advantages 
growing  out  of  the  existence  of  organized  security  markets  which  are 
dependent  upon  such  loans.  But,  it  is  asserted,  undue  accommoda- 
tion of  this  sort  leads  to  excessive  speculation.  Admitting  that  undue 
speculation  in  securities,  as  well  as  undueness  in  all  things,  is  evil,  it  is 
highly  illogical  to  concede  the  advantages  offered  by  the  organized 
security  markets  to  investors  as  well  as  speculators  and  then  to  treat 
the  loans  which  make  such  activities  possible  as  shameful  things — to 
feel  that  apologies  must  be  made  for  granting  them.  The  truth  is 
that  an  efficacious  credit  policy  can  be  easily  developed  in  this  field. 
The  effect  of  a  policy  of  withdrawing  or  adding  to  credit  supplies  is 
startlingly  apparent  in  its  effect  upon  call  rates,  and  volume  of  stock 
exchange  turnover.  Under  ordinary  conditions  it  is  fairly  safe  to 
assume  that  stable  and  reasonable  rates  will  keep  speculative  demands 
within  limits  although,  in  a  boom  period,  control  may  have  to  be 
enforced  b}^  resort  to  more  drastic  methods.  If  speculation  is  socially 
useful,  a  proper  policy  should  see  that  funds  are  supplied  on  reason- 
able terms  in  reasonable  amounts.  If  the  nature  of  the  demand  is  such 
that  the  banks  can  and  do  take  advantage  at  times  of  the  speculator, 


1922]     A  Popular  Theory  of  Credit  Applied  to  Credit  Policy         439 

it  is  to  the  detriment  not  onU'  of  the  latter  but  of  the  rest  of  the  com- 
munity. The  federal  reserve  banks  should  take  as  much  interest  in 
proper  provision  of  funds  to  meet  this  demand  as  any  other.  They 
could  aid  in  making  that  provision  when  necessary  through  open 
market  operations,  if  legally  permitted  to  do  so. 

The  discussion  of  credit  policy  has  so  far  dealt  with  rate  variations 
chiefly  in  relation  to  control  of  the  total  amounts  of  credit  supplied. 
It  may  now  be  asked  whether  it  should  be  the  polic}'  of  the  federal  re- 
serve system  to  attempt  to  maintain  a  low  level  of  rediscount  rates, 
and  whether  it  ought  to  aim  at  uniformity  and  stability  of  such  rates. 
So  far  as  long-time  movements  are  concerned,  the  question  resolves 
itself  into  a  discussion  of  the  best  means  of  credit  control.  The  reserve 
banks  may  at  times  have  to  restrain  expansion  by  rationing,  for  ex- 
ample, but  if  they  eventually  are  put  in  a  position  to  influence  market 
rates,  they  may  normally  be  able  to  influence  credit  movements  by  vary- 
ing their  rediscount  rates.  In  such  case,  upward  and  downward  rate 
movements  are  to  be  expected.  As  regards  seasonal  or  sectional  rate 
variations,  however,  the  problem  is  a  distinctly  different  one.  To 
the  exent  that  seasonal  demands  for  credit  are  regular  and  can  be 
anticipated,  the  ends  sought  to  be  achieved  by  the  establishment  of  a 
central  banking  system  with  an  "elastic"  currency  are  defeated,  if  the 
seasonally  increased  demands  are  accompanied  by  rate  increases.  Ad- 
ditional credit  supplies  to  meet  regularly  recurrent  needs  ought  not  to 
involve  additional  expense  to  borrowers. 

It  is  believed,  too,  that  uniformity  of  rediscount  rates  as  between 
districts  should  be  aimed  at  by  the  federal  reserve  system,  although  it 
is  recognized  that  the  present  imperfect  control  over  member  banks  in 
high-interest  districts  may  make  it  desirable  to  postpone  the  consum- 
mation of  any  such  ideal.  However,  this  is  not  a  very  strong  argu- 
ment, for  in  such  districts  the  supply  of  credit  which  the  reserve 
banks  are  prepared  to  furnish  is  the  significant  factor,  and  it  is 
well  known  that  rediscount  rates  have  often  been  lower  in  districts 
where  member  bank  rates  on  the  average  were  very  high  than  in 
sections  of  the  country  where  interest  rates  were  relatively  low.  In- 
deed it  has  never  been  possible  to  find  a  logical  explanation  for  the 
dilTerences  in  the  rates  actually  enforced  in  the  several  districts,  and 
it  is  notorious  that  relatively  high  rediscount  rates  in  some  districts 
induce  member  banks  to  borrow  through  their  correspondents  in  other 
districts. 

The  relation  of  changes  in  discount  rates  to  changes  in  the  general 
level  of  prices  is  another  question  that  has  to  be  considered  in  any 
discussion  of  banking  policy,  especially  as  stabilization  of  the  price 
level  has  been  so  frequently  urged  by  Cassel  and  other  writers  as  the 
objective  of  a  right  discount  policy.      It  is,  however,  impossible  to  see 


440  Anna  Young  man  [September 

how  any  direct  connection  between  the  rates  of  the  reserve  banks  and 
the  general  level  of  prices  can  be  postulated,  so  long  as  member  bank 
rates  fail  to  register  changes  in  rediscount  rates.  But  even  if  member 
bank  rates  were  responsive,  it  is  not  believed  that  there  would  ever 
be  that  instantaneous,  predicable  response  to  rate  changes  which  ap- 
pears to  be  taken  for  granted  by  those  who  urge  that  price  indexes  shall 
be  employed  as  a  guide  to  discount  policies.  In  the  first  place,  an 
endeavor  has  already  been  made  to  show  that  the  amount  of  credit 
wanted  does  not  always  adjust  itself  readily  to  changes  in  the  price 
charged  for  its  use.  In  other  words,  demand  is  very  imperfectly 
amenable  to  control  through  changes  in  discount  rates.  With  apathy 
on  the  part  of  borrowers,  low  rates  may  not  stimulate  sales  of  credit, 
whereas,  when  demand  is  feverish,  it  may  require  drastic  advances 
to  bring  about  the  desired  reduction.  Furthermore,  without  alter- 
ing the  general  price  level  so  far  as  indexes  reveal  it,  credit  may  be 
turned  into  new  channels,  so  that  new  price  relationships  will  be 
established  which  will  react  upon  the  demand  for  credit. 

It  is  not  intended  to  deny  that  in  a  period  of  over-rapid  development 
of  business  and  speculative  activity,  the  rediscount  rates  of  the  reserve 
banks  might  be  raised  high  enough  to  place  an  effective  check  upon 
further  credit  expansion.  But  it  has  been  pointed  out  that  in  many 
parts  of  the  United  States,  the  interest  rates  charged  by  member  banks 
to  their  customers  are  at  all  times  maintained  at  high  levels.  There- 
fore, in  order  to  put  a  stop  to  the  rediscounting  activities  of  such  banks 
in  a  period  of  growing  business  demand,  the  rates  charged  by  the  re- 
serve banks  would  have  to  be  in  excess  of  what  would  be  economically 
expedient  (leaving  out  of  consideration  the  obstacles  that  would  be 
raised  by  public  hostility  to  the  policy).  When  member  bank  charges 
are  too  excessive  to  make  it  practicable  to  put  rediscount  charges  on 
a  level  with  them  or  above  them,  the  alternative  method  of  controlling 
the  amount  of  credit  supplied  is  by  rationing  or  refusal  to  lend. 
When  the  rediscounting  facilities  of  the  reserve  banks  are  not  in 
demand,  the  central  banking  system  will  not  in  any  case  be  enabled  to 
enforce  a  credit  policy  by  changes  in  rediscount  rates.  Under  such 
circumstances,  it  can  only  exert  an  influence  upon  the  outside  market, 
if  permitted  to  engage  in  direct  lending  operations  as  previously  in- 
dicated. 

At  best,  changes  in  discount  rates  are  but  a  means  employed  to 
control  the  amount  of  credit  supplied.  The  vital  question  is  to  decide 
how  much  credit  shall  be  furnished.  It  may  be  asked  whether  formal 
reserve  requirements  are  a  good  test  for  this  purpose.  Certainly 
such  requirements  are,  theoretically  speaking,  irrelevant  from  the 
standpoint  of  those  economists  who  conceive  of  credit  as  a  refined  form 
of  barter  which,   if   used   in   the   process    of   exchanging   goods,    can 


1922]     A  Popular  Theory  of  Credit  Applied  to  Credit  Policy        441 

never  become  excessive.  If  one  looks  simply  to  goods,  which  means 
goods  values,  loans  can  be  continually  enlarged  with  excellent  conscience 
by  bankers,  during  periods  of  prosperity.  No  canons  of  sound  bank- 
ing need  be  violated  and  the  banker  cannot  be  blamed  for  resultant 
price  rises.  In  the  past,  rigid  reserve  requirements  have  at  least 
limited  this  upward  movement  and  that  is  why  they  have  a  certain 
value  despite  their  arbitrariness. 

At  the  present  time,  the  credit  supply  of  the  United  States  is,  for 
all  practical  purposes,  unlimited  so  far  as  reserve  requirements  are 
concerned.  These  requirements  do  not  restrict  the  activity  of  member 
banks  since  reserves  can  be  expanded  so  long  as  the  federal  reserve 
banks  consent  to  rediscount.  Moreover,  fear  that  cash  payments  may 
be  demanded  in  excess  of  ability  to  pay  (ordinarily  a  constraining 
factor  even  if  there  are  no  legal  reserve  regulations)  no  longer  exists, 
since  rediscounts  can  be  obtained  in  the  form  of  reserve  note  issues. 
The  law  does  place  a  limit  to  the  expansion  of  the  liabilities  of  the 
federal  reserve  banks  themselves  on  the  basis  of  reserves  held,  but  the 
limitation  is  not  absolute  although  it  might  under  circumstances  be 
useful  as  a  protection  against  political  importunity.  At  present  the 
reserves  of  the  system  are  so  abundant,  however,  that  they  are  a 
menace  rather  than  a  protection  to  a  conservative  credit  policy. 

The  relation  of  discount  policy  to  the  control  of  gold  movements  is 
also  of  no  practical  importance  at  this  time,  although  in  the  past 
European  discount  policy  .has  been  chiefly  devoted  to  attempts  to 
control  international  gold  movements.  Perhaps  that  is  the  reason 
why  a  study  of  central  bank  practice  in  other  countries  has  thrown  so 
little  light  on  problems  of  domestic  credit  policy.  If  the  views  already 
set  forth  are  accepted,  it  must  be  conceded  that  control  of  gold  move- 
ments comes  to  be  a  subordinate  affair.  If  or  when  the  gold  standard 
is  reestablished  in  international  dealings,  the  best  policy  for  the  federal 
reserve  banks  to  pursue  would  be  to  ignore  minor  gold  movements  in 
the  belief  that  the  system  has  enough  surplus  gold  to  Avithstand  tempo- 
rary drains.  If  heavy  withdrawals  of  a  persistent  sort  occur,  the 
question  of  discount  policy  becomes  a  different  and  more  formidable 
one.  A  movement  of  this  sort  resulting  from  domestic  inflation  which 
has  stimulated  imports  and  discouraged  exports  calls  for  higher  rates 
in  the  interest  of  credit  contraction,  but  such  higher  rates  should  be 
imposed  not  because  of  the  gold  movement  but  because  the  gold  move- 
ment is  an  index  of  the  need  for  credit  restriction  within  the  country. 

If  the  manipulation  of  discount  rates  with  a  view  to  stabilizing  the 
general  price  level  appears  to  be  an  unworkable  formula,  if  reserve 
requirements  have  lost  any  significance  they  may  have  possessed,  and  if 
gold  movements  have  become  of  subordinate  importance,  is  there  any 


442  Anna  Youngman  f September 

guide  to  credit  policy  that  can  be  adopted  ?  There  is  certainly  no  rule 
or  set  of  rules  that  can  be  applied  mechanically  because  the  problem 
is  too  complex  and  too  tremendous.  What  is  needed  first  of  all  is  a 
fuller  knowledge  and  better  analysis  of  the  physical  facts  of  industry, 
and  until  that  is  achieved,  there  is  no  device  known  to  credit  policy 
that  will  greatly  mitigate  the  evils  due  to  the  periodical  ups  and 
downs  characteristic  of  a  credit  economy.  How  can  a  complex  in- 
dustrial society  almost  entirely  dependent  upon  the  use  of  credit  be 
intelligently  guided  or  controlled  when  the  basic  facts  concerning 
current  production  and  current  needs  are  so  imperfectly  known?  A 
beginning  has  been  made  with  the  systematic  collection  of  production 
statistics  and  the  organization  of  business  reporting  services  on  a 
disinterested,  scientific  basis.  But  the  information  made  available  can 
hardly  have  offered  much  help  to  bankers  as  a  guide  to  credit  policy 
because  so  far  reporting  services  have  either  been  confined  to  statistics 
of  production  without  adequate  analysis  of  markets  or  else  they  have 
had  a  fatalistic  aspect,  predicting  what  is  going  to  happen  on  the 
basis  of  past  experience  (for  that  is  all  that  is  achieved  by  plotting 
lines  of  secular  trend).  So  far  as  this  latter  type  of  reporting  service 
is  concerned,  it  may  be  conceded  that  it  is  interesting  to  forecast  on 
tlie  basis  of  a  careful  assembling  and  analysis  of  facts  about  what 
stage  has  been  reached  in  the  cycle  of  prosperity  or  depression  through 
which  business  is  passing.  But  a  business  reporting  service  to  be  of 
use  to  the  public,  to  industry,  and  to  the  banks  must  offer  something 
more  than  solace  to  the  inquiring  mind.  Business  statistics  are  not 
particularly  valuable  merely  as  an  aid  to  guessing  where  we  are  in  the 
business  cycle  or  as  a  means  of  enabling  the  astute  either  to  take 
chances  successfully  or  to  get  out  from  under.  If  business  conditions 
reports  are  to  be  used  as  a  guide  to  credit  policy  they  will  have  to 
disseminate  information  with  a  view  to  mitigating  the  violence  of 
industrial  ups  and  downs  by  preventing  productive  maladjustments 
due  to  ignorance  of  market  conditions. 

Reporting  services  that  emphasize  only  the  productive  facts  of  in- 
dustry are  equally  unable  to  meet  this  need.  During  a  period  of 
business  expansion,  a  Avonderful  showing  may  be  made  in  volume  as 
well  as  in  value  of  output.  It  was  made  during  the  recent  months  of 
prosy)crity.  Business  conditions  reports  dealing  in  production  and 
sales  figures  radiated  enthusiasm.  Scarcity  and  the  need  for  increas- 
ing output  were  everywhere  emphasized.  Complaints  of  the  inade- 
quacy of  permanent  equipment  and  admonitions  to  save  to  provide 
that  equipment  were  the  stock  in  trade  of  the  business  moralist.  The 
trouble  with  all  these  sales  and  production  figures  was  that,  although 
real  enough  and  sceminglA'  substantial  even  allowing  for  inflated  values, 
they  were  an  index  to  expectations — they  had  still  to  stand  the  test 


1922]     A  Popular  Theory  of  Credit  Applied  to  Credit  Policy         443 

of  effective  final  demand.  Such  statistics  need  to  be  judged  in  the 
light  of  an  elaborate  study  of  markets."^  It  is  necessary  to  know  not 
only  how  much  has  been  produced  but  whether  there  is  likelihood  of 
the  demand  being  great  enough  to  take  off  the  supply  at  a  profitable 
price.  Likewise  in  case  of  a  sudden  failure  of  demand,  it  is  necessary 
to  face  the  vexing  question  of  how  far  it  is  legitimate  to  withhold  sur- 
plus supplies  from  market  for  the  sake  of  higher  prices  later.  The 
solution  of  this  problem  requires  a  knowledge  that  goes  beyond  pro- 
duction statistics.  Suppose,  for  example,  that  the  supply  of  a  certain 
commodity  is  "normal"  but  some  ill  chance  renders  a  good  part  of  the 
usual  demand  ineffective.  Confusion  of  counsel  results.  One  group 
of  advisers  says  sales  must  be  forced  and  debts  paid — to  delay  is  to 
speculate  for  a  price  rise.  Another  group  urges  holding  with  a  view  to 
obtaining  eventually  the  prices  originally  hoped  for,  irrespective  of 
the  nature  of  the  causes  that  have  destroyed  the  market  demand.  The 
dangers  of  yielding  to  either  type  of  extreme  counsel  are  perfectly 
obvious.  In  the  one  case,  forced  sales  on  an  already  falling  market 
bring  crushing  and  undeserved  losses  to  certain  groups  of  producers. 
In  the  other  case,  holding,  if  successful,  may  mean  a  policy  of  re- 
striction of  supply  at  the  expense  of  the  whole  community  with  the 
result  of  turning  over  a  greater  part  of  the  social  income  to  a  par- 
ticular group.      If  the  withholding  is  carried  to  an  unreasonable  extent 

^*It  is  interesting  to  note  the  insistence  of  members  of  the  Agricultural  Confer- 
ence (Washington,  January,  1922)  upon  the  need  for  full  and  frequent  statistics 
relating  not  only  to  agricultural  production  but  also  giving  information  as  to  the 
stabilization  of  the  markets  for  products.  This  points  to  a  general  recognition 
of  the  fact  that  no  plan  to  stabilize  prices  of  particular  commodities  can  hope  to 
succeed  simply  by  enlarging,  changing,  or  liberalizing  the  existing  credit  system. 
So  long  as  the  supply  of  agricultural  commodities  is  in  excess  of  demand  at  remuner- 
ative prices,  it  is  recognized  that  any  attempt  at  stabilization  is  capable  of  only 
limited  application  at  best.  So  long  as  producers  are  ignorant  of  the  markets  open 
to  them  and  unable  to  estimate  the  scope  of  the  consumptive  demand,  sharp  advances 
and  declines  in  prices  are  certain  to  occur.  It  is  admittedly  difficult  to  adjust  pro- 
duction to  demand  in  the  case  of  agricultural  products  which  are  so  greatly  affected 
by  circumstances  over  which  the  producer  has  no  control,  but  there  has  come  to  be 
a  very  general  recognition  of  the  fact  that  more  adequate  statistics  would  at  least 
give  a  greater  measure  of  control  over  output  and  prices.  Therefore  the  Confer- 
ence expressed  its  conviction  that  there  was  need  for  a  knowledge  of  foreign  as 
well  as  domestic  buying  demand  and  endorsed  participation  in  a  conference  looking 
toward  the  economic  and  financial  reconstruction  of  Europe.  The  recommendations 
of  the  Committee  on  Agriculture  and  Price  Relations  stated  among  other  things 
that,  "owing  to  the  large  volume  of  American  agricultural  products  which  must 
necessarily  be  sold  upon  foreign  markets,  it  is  impossible  to  formulate  a  satisfactory 
policy  for  American  agriculture  without  a  complete  knowledge  of  the  course  and 
direction  of  recovery  of  agricultural  production  abroad."  It  recommended  therefore 
that  the  Department  of  Agriculture  proceed  to  make  periodically  available  informa- 
tion with  respect  to  production  and  demand.  The  Conference  also  approved  thirty- 
seven  recommendations  of  the  Committee  on  Crop  and  Market  Statistics  requesting 
the  compilation  and  distribution  of  returns  on  production,  stocks,  condition,  prices, 
and  other  factors  entering  into  the  marketing  of  crops  and  live  stock. 


444  Anna  Youngman  [Septembei* 

it  not  only  penalizes  all  consumers  of  such  products  but  may  defeat 
its  own  ends  by  merely  deferring  the  day  of  reckoning.  Such  problems 
are  much  more  complicated  in  a  period  of  general  but  unequal  price 
declines  than  they  are  when  limited  to  particular  commodities.  In  the 
latter  case  there  are  usually  standards  of  fairness  and  reasonableness 
whose  maintenance  can  be  urged.  In  the  former  case  the  only  stand- 
ards are  those  of  relativity.  If  therefore  any  reasonable  guide  to 
action  is  to  be  found,  there  must  be  a  painstaking  study  of  all  the 
factors  involved.  Not  only  must  supply  on  hand  and  in  prospect  be 
appraised,  but  demands  must  be  forecast.  An  effort  must  be  made  to 
find  out  whether  reduction  in  buying  demand  is  of  a  temporary  or  of  a 
permanent  sort — whether  it  is  limited  by  physical  needs  or  responsive 
to  price  changes.  Only  then  can  a  policy  of  price  equalization  by 
means  of  credit  extension  be  intelligently  undertaken  with  a  view  to 
spreading  price  losses  over  the  community  as  a  whole.  IVIistakes  can- 
not be  avoided  as  only  omniscience  could  prevent  their  being  made,  but 
at  least  the  policy  adopted  will  not  be  haphazard. 

The  untenable  results  reached  by  insistence  upon  the  desirability  of 
physical  increase  in  production  without  reference  to  the  relation  of 
production  to  effective  demand  is  strikingly  illustrated  in  the  answer 
of  the  Federal  Reserve  Board  to  the  Senate  resolution  of  May,  1920, 
asking  what  steps  were  being  taken  to  control  inflation.  In  its  answer 
the  Board  stated :  "Every  effort  should  be  made  to  stimulate 
necessary  production,  especially  of  food  products,  and  to  avoid  waste. 
Planting  operations  in  many  sections  have  been  delaA^ed  because  of 
adverse  weather  conditions,  and  should  there  be  an  inadequate  yield 
of  crops  this  year  the  necessity  for  conservation  and  conservatism  will 
be  accentuated.  War  waste  and  war  financing  result  inevitably  in 
diminished  supplies  of  goods  and  increased  volume  of  credits.  The  nor- 
mal relationshij)  between  tlie  volume  of  goods  and  the  volume  of  money 
and  credits  thus  unsettk'd  can  be  restored  in  either  of  two  ways — one, 
the  drastic  method  of  contraction  of  credit,  and  the  other,  by  far  the 
more  desirable  way,  increased  production.  In  the  same  way  ])rogress 
toward  the  restoration  of  tlie  normal  relationship  may  be  made  by  re- 
ducing credit  more  rapidly  than  })r()duction  is  diminished,  or  by  increas- 
ing })ro(iucti()n  at  a  greater  rate  than  credit  is  expanded.  If  it  should 
prove  impracticabk"  in  the  existing  circumstances  to  increase  essential 
})roduction,  tiien  we  must  through  economy  in  consumption  and 
through  moderation  in  the  use  of  credit  check  the  tendency  toward  a 
further   w  ichiiiiig  of   the  margin   between   goods   and   credit."        When 

"Elsewhere  in  this  same  statement  it  is  made  to  appear  that  trade  and  industry 
must  after  all  "accommodate  themselves  to  the  actual  supply  of  capital  and  credit 
available."  Capital  in  this  connection  probably  means  savings  deposits,  as  the  pre- 
ceding sentence  says:     "There  is  a  world-wide  lack  of  capital,  and  with  calls  upon 


1922]     A  Popular  Theory  of  Credit  Applied  to  Credit  Policy         445 

this  statement  was  made,  the  problem  of  disposing  of  surplus  stocks 
of  commodities  at  prevailing  prices  was  already  becoming  acute.  The 
hope  here  expressed  that  large  crops  will  be  raised  is  in  sharp  contrast 
with  the  rejoicings  over  the  short  cotton  crop  of  the  past  year. 

But  quite  apart  from  the  question  whether  it  is  desirable  to  pro- 
duce more,  the  statement  contains  a  fallacy  in  that  it  appears  to 
indicate  that  production  can  as  a  matter  of  volition  be  increased  or 
decreased  while  the  volume  of  bank  credit  remains  stationary  or  else 
expands  or  contracts  at  quite  different  rates.  So  far  as  bank  policy 
is  concerned,  however,  the  effect  on  production  of  increasing  credit 
supplies  can  only  be  felt  through  price  changes  in  particular  goods 
due  to  the  diversion  to  their  purchase  of  more  credit  or  purchasing 
power.  By  raising  the  prices  of  such  goods  in  relation  to  other  goods, 
banks  stimulate  the  production  of  specific  kinds  of  commodities.  But 
only  to  the  extent  that  these  shifts  of  purchasing  power  bring  about  a 
better  adjustment  of  productive  factors,  is  any  influence  exerted  on 
the  sum  total  of  produced  output.  That  is  why  accelerated  activity 
in  lending  usually  reflects  itself  in  price  increases.  Only  as  factors 
over  which  policy  has  little  or  no  control  increase  or  decrease  the 
volume  of  physical  output,  is  this  tendency  to  price  increase  counter- 
acted or  enhanced.  Among  such  factors  may  be  mentioned  good 
weather  or  bad,  making  for  large  or  small  crops ;  industrious  appli- 
cation or  negligence,  making  for  more  or  less  output  per  worker ;  rate 
of  growth  in  population;  pace  of  invention,  etc.  Consequently  it  is 
useless  to  urge  increased  production  as  an  alternative  to  credit  con- 
traction as  a  means  of  correcting  the  ravages  of  inflation.  If  inflation 
is  to  be  stopped,  it  has  to  be  at  some  cost.  It  is  always  accompanied 
by  undue  stimulation  of  some  types  of  productive  activity  and  when 
policy  calls  a  halt,  sharp  drops  in  prices  of  such  commodities  will 
occur,  which  will  have  as  a  corollary  the  demoralization  of  the  markets 
for  other  goods  and  services.  The  policy  of  extending  credit  to  the 
holders  of  surplus  stocks  may  for  a  time  enable  their  owners,  so  to 
speak,  to  escape  loss  by  purchasing  their  own  goods.  But  eventually 
the  fact  of  maladjustment  will  have  to  be  faced.  It  will  have  to  be 
recognized  that  there  is  no  outside  market  to  absorb  goods  at  prevail- 
ing prices.  If  through  policy  it  were  possible  to  enlarge  supplies  of 
goods  at  such  a  time  on  the  theory  that  the  possession  of  goods  consti- 
tutes an  effective  demand  for  goods,  the  confusion  would  be  worse 
confounded.  Prevention  through  knowledge — not  succor  following 
disaster — is  the  goal  of  a  successful  credit  policv. 

the  investment  market  which  cannot  be  met  there  is  an  unprecedented  demand  for 
bank  credits."  Tliis  suggestion  that  capital  and  credit  are  fixed  quantities  is  surely 
in  contradiction  to  the  admonition  to  manipulate  the  amounts  outstanding  in  order 
to  introduce  new  relationships  between  goods  and  credit. 


446  Anna  Youngman  [September 

An  effective  credit  policy  in  the  nature  of  the  case  implies  a  measure 
of  monopolistic  control.  Hence  there  is  need  for  delegating  that  power 
of  control  to  a  disinterested  central  banking  management,  whose  policy 
is  unhampered  by  considerations  of  profit.  The  provision  of  credit  in 
economically  advanced  countries  has  come  to  be  as  public — possibly 
more  public  in  its  nature — as  the  issue  of  money  by  governments. 
Hence  there  is  no  escaping  the  demand  that  a  credit  system  shall  be 
managed  in  the  interest  of  all  the  people,  that  credit  supplies  shall  be 
available  on  equitable  terms  to  all  sections  and  to  all  economic  groups. 
A  central  banking  system  which  tries  to  limit  its  operations  to  particu- 
lar types  of  credit  advances  is  only  functioning  imperfectly.  The 
credit  policy  of  the  future  must  recognize  responsibility  for  seeing 
that  a  balance  is  maintained  among  all  types  of  demand  for  credit. 

In  conclusion,  the  chief  points  covered  may  be  summarized  as 
follows:  (1)  An  attempt  is  made  to  define  capital  and  interest  in  a 
workable  and  consistent  manner  with  a  view  to  making  the  definitions 
valid  for  the  purposes  of  a  discussion  of  discount  and  credit  policy. 
(2)  The  position  is  taken  that  banks  are  creative  institutions  that  do 
not  function  automatically  in  a  ready-made  economic  milieu,  although 
their  activities  are  necessarily  conditioned  by  environment.  (3) 
Reasons  are  given  to  support  the  belief  that  a  credit  policy  to  be  effi- 
cacious must  embrace  all  types  of  credit  operations,  both  long-time  and 
short-time  (investment  and  commercial).  (4)  Limits  to  the  efficacy 
of  changes  in  discount  rates  are  discussed,  both  in  general  and  more 
particularly  in  the  case  of  the  federal  reserve  banks ;  and  it  is  main- 
tained that  the  influence  of  rate  changes  as  a  means  of  credit  control 
has  been  exaggerated.  (5)  The  defects  of  various  proposed  guides 
to  credit  policy  are  reviewed  and  the  need  for  fuller  information  in 
regard  to  the  facts  of  industry  is  stressed. 

Anna  Youngman. 


THE  COMMERCIAL  IMPORTANCE  OF  RUSSIA 

Russia  is  as  prominent  on  the  map  of  discussions  as  in  the  atlas. 
The  import  of  breakdown  of  industry  and  transportation  in  Russia 
has  been  underestimated ;  the  meaning  of  famine  has  been  overstressed 
in  the  economic  sense,  though  hardly  possible  of  exaggeration  in  the 
human  sense.  The  problem  of  Russia  is  not  merely  an  internal  situa- 
tion involving  a  catastrophic  experiment  in  communism ;  it  is  a  prob- 
lem in  international  commerce.  It  is  my  purpose  to  undertake  an 
appraisal  of  the  utility  of  Russian  commerce  to  the  nations  with  which 
she  traded  and  to  determine  in  what  ways  and  to  what  extent  a  func- 
tioning Russia  is  important  to  her  western  neighbors  and  to  oversea 
countries. 

It  will  be  advantageous  to  state  in  the  beginning  the  conclusion  to 
which  a  consideration  of  the  pre-war  affairs  of  Russia  leads,  namely, 
that  Russian  commodities  are  of  greater  importance  to  the  world  as 
expressions  of  buying  power  than  for  their  physical  and  chemical  quali- 
ties. The  commodities  that  before  the  war  originated  in  Russia  can  be 
found  elsewhere  in  the  world,  but  the  trade  relations  are  not  repro- 
duced when  this  is  accomplished.  It  is  natural  to  exaggerate  the 
physical  importance  of  commodities.  Economic  processes  are  not 
visible  in  the  same  way.  It  is  difficult  to  secure  a  panoramic  view  of 
world  trade  in  which  the  utilities  of  commodities  in  barter  are  revealed 
in  perspective.  We  exaggerate  the  physical  importance  of  commodi- 
ties that  used  to  be  obtained  from  Russia  and  underestimate  the  ex- 
change processes  of  which  the  commodities  were  the  material  aspects. 

Let  the  facts  be  first  established.  Consider  Europe  before  the  war, 
including  the  United  Kingdom,  as  separate  from  Russia  and  engaged 
in  trade  with  Russia  on  the  one  hand  and  oversea  countries  on  the 
other.  It  is  difficult  to  make  exact  comparisons  between  pre-war  and 
present  conditions,  because  of  the  secession  of  Finland,  the  East  Baltic 
States,  Congress  Poland  and  Bessarabia,  but  the  evaluations  may  be 
carried  through  without  substantial  error.  Although  Europe,  thus  de- 
fined, contained  states  that  were  food  exporters,  most  of  the  countries 
were  food  importers.  Of  pre-war  European  countries,  Austria-Hun- 
gary, Bulgaria,  Roumania,  and  Serbia  produced  more  food  than  was 
consumed  within  their  borders  and  exported  more  than  they  imported. 
The  other  nations  of  Europe  produced  less  than  their  requirements  and 
imported  more  than  they  exported.  Considered  as  a  unit,  Europe  was 
a  huge  importer  of  food,  feeds  and  raw  materials.  These  imports 
came  from  Russia  or  from  oversea  countries  (disregarding  Algeria  and 
the  other  adjacent  Mediterranean  areas).  The  importations  of  Europe 
from  the  two  sources,  Russia  and  overseas,  were  delicately  balanced. 


448  Alonzo  Englebert  Tai/lor  [September 

The  datum  line  of  price  was  Liverpool ;  the  final  place  of  cancellation 
of  bills  of  exchange  was  London. 

Europe  did  not  pay  for  imports  of  commodities  with  exports  of 
commodities.  Imports  exceeded  exports.  The  excess  of  imports  over 
exports  of  goods  was  rising  before  the  war ;  the  standard  of  living  was 
being  expanded  more  rapidly  than  production.  Tlie  annual  difference 
between  imports  and  exports  of  goods  was  paid  for  with  returns  on 
foreign  investments,  services  rendered  in  shipping,  insurance  and  other 
directions,  remittances  of  emigrants  and  expenditures  of  tourists.  Net 
new  savings  in  Europe  were  falling  before  the  war,  and  had  possibly 
declined  to  a  figure  below  that  of  income  from  foreign  investments. 
In  so  far  as  the  balance  of  imports  over  exports  of  goods  may  have 
been  paid  for  by  returns  on  foreign  investments,  this  meant  that  the 
standard  of  living  of  Europe  was  in  excess  of  current  earnings  and 
was  being  maintained  out  of  the  savings  of  previous  generations. 

Many  factors  of  income  and  outgo  cooperated  to  produce  the  posi- 
tion of  equilibrium  that  characterized  the  trade  of  each  year.  What 
each  nation  imported  was  the  expression  partly  of  the  goods  it  had  to 
export  in  payment,  parth^  of  physical  need,  partly  of  the  intensity  of 
the  psychological  factors  of  valuation,  and  partly  of  the  requirements 
of  plant  and  tool  expansion  to  correspond  to  increase  in  population. 
What  Russia  and  the  oversea  exporting  countries  had  to  offer  Europe 
was  less  the  expression  of  their  productive  capacity  than  of  the  con- 
sumptive capacity  of  Europe.  The  consumptive  capacity  of  Europe, 
the  buying  power  of  European  commodities  and  invisible  resources, 
were  the  determining  factors  in  production  in  Russia  and  in  the  over- 
sea countries,  in  so  far  as  related  to  trade  with  Europe,  and  not  with 
each  other  and  with  other  portions  of  the  world.  The  trade  with 
Europe  was  however  the  largest  fraction  of  international  trade. 

Russia  and  the  oversea  exporting  countries  had  many  character- 
istics in  common.  Like  South  Africa,  Australia,  Argentina,  Canada, 
and  to  some  extent  the  western  LTnited  States,  Russia  was  in  the  ex- 
tractive state  of  development.  She  exported  raw  materials  largely 
and,  with  the  exception  of  cotton,  imported  principally  manufactured 
goods.  She  required  each  year  increments  of  foreign  capital,  to  be 
paid  for  out  of  excess  of  exports  over  imports  of  commodities.  The 
most  intensive  area  of  industrialism  in  pre-war  Russia,  Congress  Po- 
land, is  no  longer  contained  Avithin  Russia.  In  the  next  years  Russia 
will  be  an  extractive  country  to  a  greater  extent  than  before  the  war. 
She  will  compete  with  Canada,  Argentina,  and  Australia  for  capital  on 
the  basis  of  efficiency  of  production  of  agricultural  and  other  raw 
materials,  if  undisturbed  by  political  conditions. 

I  have  said  that  the  output  of  Russia  and  the  oversea  countries 
supplying  materials  to  Europe  were  not  expressions  or  measures   of 


1922]  Commercial  Importance  of  Russia  449 

their  productive  capacities,  but  responses  to  the  consumptive  capacity 
of  Europe.  The  limitations  lay  with  the  buyers.  These  countries 
could  have  produced  far  more  materials  had  a  larger  European  market 
been  available.  When  any  one  country  supplying  Europe  with  goods 
underwent  an  eclipse,  for  any  reason,  it  lay  within  the  power  of  the 
other  exporting  countries  promptly  to  replace  the  deficit. 

The  following  tables  present  figures  for  the  average  imports  and 
exports  of  Russia  in  the  five  years  before  the  war.  No  claim  of  exact- 
ness is  made  for  these  estimates.  It  is  impossible  in  the  trade  statis- 
tics of  the  different  countries  of  Europe  clearly  to  separate  transit 
trade  from  importation  for  consumption.  The  trade  of  Russia  with 
the  oversea  countries  is  not  fully  expressed  in  the  figures,  for  the  reason 
that  oversea  commodities  were  obtained  by  her  through  European 
countries.  Students  of  international  trade  statistics  are  fully  aware 
of  tiie  difficulties  encountered  in  estimating  the  balance  of  trade  in 
commodities.  If  one  takes  tiie  figures  of  a  particular  country  for 
values  of  goods  imported  and  exported,  a  certain  figure  in  balance  is 
obtained.  If,  however,  one  truces  the  imports  back  to  the  countries 
of  origin  and  the  exports  forward  to  the  countries  of  destination  and 
obtains  in  these  countries  the  figures  for  the  values,  he  secures  a 
difi'erent  result.  Governmental  statisticians  seem  agreed  that  the 
figures  of  a  country  for  import  are  more  reliable  than  the  figures  for 
export  in  terms  of  value;  and  that  in  general  a  fairer  balance  of  trade 
is  obtained  bj'  using  for  imports  the  figures  of  the  country  and  for 
exports  the  values  placed  upon  them  b}'  the  countries  of  destination. 
That  these  considerations  cannot  be  neglected  is  shown  in  the  attempt 
to  fix  a  figure  for  the  balance  of  trade  of  Russia.  Accepting  Russian 
data  on  imports  and  exports,  we  secure  the  following  figures  for  aver- 
age imports  and  exports  of  commodities  in  the  five  years  before  the 
war. 

Russo-EuROPEAN  Trade 

(in  million  dollars)  , 

Exports  from  Russia G70 

Imports  into  Russia    421 

Positive  balance  of  trade 249 

If  we  accept  the  figures  of  countries  of  origin  for  imports  into  Russia 
and  of  countries  of  destination  for  exports  from  Russia,  we  obtain  the 
following  figures : 

Exports  from  Russia    988  , 

Imports  into  Russia    311 

Positive  balance  of  trade    677 


450  Alonzo  Englehert  Taylor  [September 

If  now,  adopting  the  experience  of  governmental  statisticians,  we 
accept  the  Russian  data  for  imports  and  for  exports  the  data  of  coun- 
tries of  destination,  we  secure  the  following  figures : 

Exports  from  Russia   988 

Imports  into  Russia 421 

Positive  balance  of  trade 567 

The  figure  for  value  of  exports  is  too  high.  The  German  figures  for 
imports  from  Russia  are  f.  o.  b.  point  of  departure  in  Russia,  while 
British  figures  for  imports  from  Russia  are  c.  i.  f.  port  of  destina- 
tion in  the  United  Kingdom.  In  the  figure  of  988  million  dollars  is 
included  therefore  an  indeterminate  figure  for  services  in  freight  and 
insurance  due  Great  Britain  and  other  countries  also. 

Considering  now  the  oversea  trade  of  Russia  (including  Japan  and 
China  but  not  a  number  of  little  states  that  comprehend  less  than  five 
per  cent  of  the  trade)  we  secure  the  following  picture.  Taking  the 
Russian  data  for  imports  and  exports  we  arrive  at  the  following: 

Russian  Oversea  Trade 
(in  million  dollars) 

Imports  into  Russia 97 

Exports  from  Russia   24 

Negative  balance  of  trade 73 

If  we  employ  the  data  of  countries  of  origin  and  of  destination,  we 
secure  the  following  figures : 

Imports  into  Russia 70 

Exports  from  Russia    34 

Negative  balance  of  trade 36 

Employing  now  the  Russian  data  for  imports,  and  for  exports  the 
data  of  the  importing  countries  of  destination,  we  secure  the  following 
figures : 

Imports  into  Russia 97 

Exports  from  Russia    34 

Negative  balance  of  trade 63 

Combining  the  figures  for  positive  balance  of  trade  with  Europe,  567 
million  dollars,  with  that  for  negative  balance  of  oversea  trade,  63 
million  dollars,  we  secure  a  figure  expressing  the  final  balance  of  Russian 
foreign  trade,  50-i  million  dollars.  The  debacle  in  Russia  has  com- 
pelled Europe  to  attempt  to  transfer  this  trade  with  Russia  to  oversea 
countries. 

This  figure  looks  high.  It  may  be  a  hundred  million  too  high. 
Russia    li.ul    few    invisible    resources.      Russian    emigrants    dispatciied 


1922]  Commercial  Importance  of  Russia  451 

small  remittances.  Tourists  spent  little  money  there.  To  other 
countries  she  rendered  few  services  of  the  nature  of  shipping  and  in- 
surance. Russians  had  few  investments  abroad.  For  practical  pur- 
poses, therefore,  we  may  disregard  her  invisible  resources  and  thus 
her  commodity  exports  represent  her  total  exports.  In  each  year, 
however,  Russia  borrowed  abroad  more  money  for  improvement  of 
transportation,  development  of  industries,  military  purposes,  and  to 
pay  interest  charges.  Russia  was  the  site  of  many  foreign  investments. 
She  had  been  the  recipient  of  large  foreign  loans,  governmental  and 
private.  She  used  considerable  foreign  shipping  and  insurance. 
Russian  resources  were  employed  abroad  to  an  extensive  but  indeter- 
minate extent  in  developing  foreign  political  policies.  Russian  profli- 
gates wasted  considerable  sums  in  riotous  living  abroad.  A  large  but 
indeterminate  part  of  the  visible  balance  of  trade  was  used  to  pay  for 
armament,  military  equipment  of  all  kinds.  Military  supplies  in  large 
part  were  not  included  in  the  imports  of  Russia.  These  were  pur- 
chased abroad  on  secret  contracts,  at  grossly  extravagant  rates,  often 
including  a  heavy  graft.  The  balance  of  exports  over  imports  of 
commodities  was  employed  principally  to  pay  fixed  charges  on  foreign 
capital  (interest  and  amortization)  loaned  to  or  invested  in  Russia. 

The  figures  for  Russian  commerce,  like  those  for  Russian  production, 
are  unsatisfactory.  Any  estimate  of  the  total  balance  of  trade  is  to  be 
regarded  as  approximate  and  inconclusive.  It  is  regretable  that  a 
more  clear-cut  presentation  is  not  possible ;  but  in  the  nature  of  the 
data  available,  a  more  scientific  statement  is  not  warranted. 

The  foreign  trade  of  Russia  before  the  war  was  nearly  four  per 
cent  of  total  international  trade  in  terms  of  value.  Russia  ranked 
sixth  in  the  order  of  exporters,  ninth  in  the  order  of  importers,  and 
seventh  in  the  order  of  monetary  value  of  total  foreign  trade.  Germany 
had  the  largest  commerce  with  Russia.  She  supplied  one  third  of 
Russian  imports  and  took  one  fourth  of  Russian  exports.  The  United 
States  ranked  third  as  exporter  to  Russia,  but  imported  little  from 
Russia. 

The  products  of  a  large  country  like  Russia  are  naturally  diversified. 
Most  of  her  activities  Russia  shared  with  other  countries.  In  one 
product  (platinum)  she  possessed  a  monopoly;  in  another  (flax),  a 
position  of  preeminence.  An  appraisal  of  the  material  utility  of 
Russian  products  must  rest  upon  a  survey  of  the  products  of  other 
countries.  We  have  first  to  measure  the  commodities  freely  produced 
elsewhere  in  the  world  as  well  as  in  Russia ;  and  finally  to  consider  the 
particular  commodities  in  whose  production  Russia  occupied  a  pre- 
dominating position  and  determine  to  what  extent  new  sources  of  supply 
elsewhere  in  the  world  have  been  uncovered  and  to  what  degree  the 
articles  have  been  replaced  by  substitution. 


452  Alonzo  Englehert  Taylor  [September 

The  chief  items  of  export  were  products  of  the  soil.  Of  the  total 
exports,  cereals  represented  more  than  half  in  value.  The  following 
table  indicates  the  average  exports  in  the  five  years  before  the  war. 

Barley    167  million  bushels 

Wheat    161 

Oats    63 

Rye    29 

Corn    26 

Potatoes   7 

Flaxseed,  sunflower  seed  and  other  oil-seeds .  .  600,000  tons 

The  figures  for  cereals  are  more  certain  than  for  oil-seeds.  The 
exportation  of  oil-seeds  and  derivatives  was  an  important  fraction  of 
Russian  trade.  In  values  and  calories  the  oil-seeds  exceeded  oats,  rye, 
or  maize  and  indeed  almost  equaled  the  three,  being  surpassed  only  by 
barley  and  wheat.  The  chief  buyers  of  Russian  grains  and  oil-seeds 
were  Germany,  the  United  Kingdom,  the  Netherlands  and  France,  in 
the  order  named.  The  table  serves  to  illustrate  the  large  contribu- 
tions made  by  Russian  agriculture  to  man  and  beast  in  Europe. 

War  and  communism  have  erased  for  the  time  being  the  surplus- 
export  productivity  of  Russia  and  her  export  functions  have  been 
taken  over  by  other  countries.  I  am  well  aware  that  statements  as  to 
replacement  of  Russian  grain  and  oil-seeds  by  grains  and  oil-seeds 
grown  elsewhere  in  the  world  stand  in  contradiction  to  numerous 
gloomy  forebodings  with  respect  to  limitation  of  world  agriculture. 
It  is  however  established  in  fact  and  clear  in  theory  that  the  world  has 
by  no  means  reached  the  limits  of  available  acres.  There  is  still  a 
reserve  in  world  agriculture  that  is  responsive  to  demand  on  the  basis 
of  price.  A  comparison  of  the  total  acreage  under  cultivation  in  the 
United  States,  Canada,  Argentina,  Australia,  and  India  during  the 
pre-war  period,  during  the  war  and  since  the  war  will  illustrate  the 
capacity  for  expansion  that  has  become  actual  in  response  to  demand. 
The  danger  of  Europe  lies,  first,  in  the  fact  that  the  elimination  of  one 
large  surplus-producing  countr}^,  like  Russia,  increases  the  hazard  of 
crop  failure  elsewhere  in  the  world ;  and,  secondly,  in  the  fact  that  the 
continued  operation  of  increased  acreage  overseas  from  year  to  year 
must  be  maintained  by  such  growers'  prices  as  are  regarded  as  remu- 
nerative. Australia,  Argentina,  Canada,  and  the  United  States  are 
able  to  take  over  and  regularly  contribute  the  two  hundred  million 
bushels  of  bread-grains  that  Russia  used  annually  to  send  to  Europe. 
Naturally,  the  farmers  would  like  to  know  how  long  the  enlarged  de- 
mands are  prospectively  to  be  continued,  in  order  to  plan  acreage. 
This  enlarged  operation  would  represent  no  burden  to  the  agriculture 
of  these  countries,  if  prices  were  remunerative  and  unusual  crop  fail- 
ures did  not   iiitervtiu'.      During  the  years  19()7-191'1,  we  exported  a 


1922]  Commercial  Importance  of  Russia  453 

net  average  of  3,130,000  long  tons  of  bread  grains  and  flour;  during 
the  years  1915-1921  the  average  net  export  was  6,425,000  long  tons. 
Before  the  war  the  average  annual  export  of  Russia  was  about 
5,000,000  tons.  Thus  the  United  States  alone  has  taken  over  two- 
thirds  of  the  task  of  replacing  the  Russian  bread-grains. 

The  same  situation  applies  to  feed-grains  and  oil-seeds.  No  one 
can  olTer  Europe  the  barley  she  secured  from  Russia ;  but  since  this 
was  feed-barley,  it  could  be  replaced  by  other  feed-grains.  The  United 
States  and  Argentina  have  corn  and  oats  enough  to  replace  the  barley, 
oats  and  corn  exports  of  Russia.  Europe  has  not  taken  them.  To 
replace  the  oil-seeds  of  Russia,  the  tropics  olTer  cocoanut,  peanut,  cot- 
ton seed  and  soya  bean  in  quantities  that  are  relatively  unlimited. 

So  far  as  grains  and  oil-seeds  are  concerned,  therefore,  the  agri- 
culture of  oversea  countries  has  completely  replaced  the  exportable 
surplus  of  Russia.  Whether  this  continues  in  1922  and  farther,  de- 
pends on  crop  hazards  and  prices.  If  we  have  a  crop  failure  in  the  North 
American  wheat  belt  this  year,  if  the  exportable  surpluses  of  Aus- 
tralia and  Argentina  are  much  lower  than  forecasted,  if  wheat  farmers 
in  the  four  principal  exporting  countries  find  the  price  unremunerative 
and  reduce  acreages,  then  it  may  develop  in  the  winter  of  1922-1923, 
or  later,  that  the  export  wheat  supplies  of  the  world  do  not  equal  the 
requirements  of  Europe.  Barring  an  unusual  coincidence  of  crop  fail- 
ure in  northern  and  southern  hemispheres,  the  danger  of  wheat  short- 
age from  limitation  of  acreage  through  price  considerations  exceeds 
danger  of  shortage  through  hazard.  On  account  of  conditions  in  the 
growing  of  oil-seeds,  a  shortage  through  hazard  or  reduction  of  opera- 
tions is  not  to  be  feared. 

One  of  the  principal  exports  of  Russia  was  flax,  of  which  in  good 
crop  years  before  the  war  upwards  of  a  quarter  million  tons  were 
exported.  Russian  flax  was  for  the  largest  part  coarse  and  not  of 
superior  commercial  grade.  Outside  of  Russia  it  was  used  to  a  lessen- 
ing extent  in  wearing  apparel  and  in  the  home,  linens  of  finer  grade 
produced  in  other  countries  being  preferred.  It  was,  however,  im- 
portant for  many  technical  uses.  Russian  flax  was  worked  into  goods 
largely  in  factories  in  the  United  Kingdom,  and  these  have  been  hard 
hit  by  lack  of  the  raw  material.  The  lapse  of  Russian  flax  has  not 
been  made  good  by  replacement  with  flax  from  elsewhere  in  the  world. 
In  Argentina,  Canada  and  in  our  country  flax  is  cultivated  for  the 
seed,  and  these  countries  have  not  attempted  to  replace  the  Russian 
fibre.  At  the  high  price  of  linen,  substitution  has  been  actively  under- 
taken. Efforts  to  imitate  linen  by  processing  of  cotton  have  been  so 
successful  in  Germany  that  technical  tests  are  required  to  distinguish 
the  two  fibres.  Coarse  grades  of  flax  have  been  replaced  by  hemp, 
manila  and  jute.     Long-fibre  cotton  is  able  to  replace  linen  in  many 


454  Alonzo  Englcbcrt  Taylor  [September 

uses.  Finer  grades  of  linen  have  been  replaced  by  mercerized  cotton 
and  silk.  In  part,  the  deficiency  remains  and  the  world  is  making  the 
best  of  it.  It  would  be  stretching  the  word  essential  to  denominate 
Russian  flax  as  essential  to  the  industry  of  the  world  today ;  desirable 
it  would  be  at  a  price,  but  not  essential.  What  has  been  said  of  flax 
holds  for  the  less  valuable  hemp. 

Butter,  eggs,  and  poultry  occupied  an  unusually  prominent  position 
among  Russian  exports.  The  value  of  the  export  of  these  products 
exceeded  considerably  that  of  petroleum.  Russia  exported  consider- 
able timber,  though  much  of  it  came  from  Finland.  Unquestionably  in 
the  distant  future  the  forest  resources  of  Russia  will  prove  of  partic- 
ular importance  to  Europe,  but  they  are  dispensable  in  the  imme- 
diate future.  Russia  was  an  exporter  of  sugar,  but  there  is  no  shortage 
of  sugar.  Furs,  bristles,  wool,  caviar  and  tobacco  were  particular 
exports.     The  world  has  dispensed  with  these  or  replaced  them. 

Three  particular  exports  remain  to  be  considered.  Russian  petro- 
leum has  enjoyed  a  prominence  in  world  trade  out  of  proportion  to  the 
quantity  involved.  The  Russian  oil  fields  were  approaching  exhaustion 
with  current  methods  of  mining.  Crude  oil  may  become  scarce  in  a 
decade ;  but  existing  stocks  and  the  plane  of  production  elsewhere 
indicate  that  for  the  immediate  future  the  output  of  Russia  is  not 
essential. 

Russia  was  once  an  iinportant  source  of  manganese  ore.  During 
the  war  development  of  manganese  was  greatly  enlarged  and  the  mines 
of  Brazil  and  India  are  more  than  competent  to  cover  the  require- 
ments of  the  steel  industry  of  the  world.  It  is  questionable  whether 
Russian  manganese  at  the  production  costs  of  ten  years  ago  could 
compete  with  Brazilian  manganese  in  the  market  of  today. 

The  Ural  Mountains  contain  invaluable  deposits  of  precious  metals. 
The  output  of  gold  had  fallen  before  the  war  to  a  small  figure  com- 
pared to  the  output  of  the  world.  But  it  is  important  to  Russia  as  a 
basis  for  her  circulating  medium.  Before  the  war  Russia  supplied  nine 
tenths  of  tlie  platinum  of  the  world,  the  output  being  from  twelve  to 
fifteen  tliousand  pounds.  During  the  last  three  years  of  the  war, 
platinum  deposits  were  uncovered  and  developed  elsewhere  in  the  world. 
The  pre-war  platinum  production  of  Russia  would  probably  now  con- 
stitute three  fourths  of  the  platinum  production  of  the  world  at 
comparable  price.  During  the  war  the  world  was  combed  for  platinum 
and  at  the  close  of  hostilities  relatively  lai-ge  amounts  were  in  the 
hands  of  the  allied  governments.  The  price  was  controlled  during  the 
war;  the  present  price  of  jilatinum  is  something  more  than  double  the 
pre-war  figure.  With  respect  to  the  uses  of  platinum  in  the  arts, 
sciences  and  industries,  it  may  be  said  that  the  art  use  of  platinum 
is  being  expanded,  particularly  in  jewelry,  while  the  technical  use  is 


1922]  Commercial  Importance  of  Russia  455 

receding.  By  this  I  mean  that  year  after  year  cheaper  alloys  are 
devised,  capable  of  replacing  platinum  for  particular  uses.  There  are 
places  where  platinum  is  scarcely  replaceable,  as  on  the  Wheatstone 
bridge.  The  best  magneto  breaker  points  are  platinum.  It  is  widely 
used  as  electrode  and  catalyzer.  Its  use  as  a  chemical  reagent  is 
restricted.  In  some  manufacturing  processes  it  is  irreplaceable ;  in 
other  uses,  a  question  of  price.  The  disappearance  of  Russian  pla- 
tinum has  not  made  platinum  expensive  in  the  world,  contrasted  with 
the  index  number  of  wholesale  prices  in  general,  on  account  of  stocks 
accumulated  during  the  war.  The  present  consumption  of  platinum 
is,  however,  greatly  in  excess  of  production,  and  at  some  time  in  the 
near  future  the  price  of  platinum  will  rise.  At  a  certain  price,  substi- 
tution will  occur  to  such  an  extent  as  to  check  further  advance.  Im- 
portant as  platinum  is,  it  is  not  criticalh"  essential  to  the  world  in  the 
sense  that  if  the  Russian  mines  are  not  reopened  this  year  or  next,  the 
world  will  face  a  catastrophe  in  the  arts,  sciences  and  industries. 

The  chief  pre-war  import  into  Russia  was  cotton,  raw  and  manu- 
factured. More  than  half  the  cotton  came  from  the  United  States. 
The  second  large  item  was  metal  goods — hardware,  tools,  wire,  nails, 
corrugated  iron,  agricultural  implements,  and  machinery  of  all  sorts. 
The  leading  source  of  supply  was  Germany.  A  third  important  import 
was  tea  from  China  and  India,  controlled  by  the  British  trade. 

The  exports  of  Russia  having  lapsed,  her  imports  must  lapse  unless 
paid  for  with  gold  or  concessions,  or  secured  through  credits.  Despite 
appreciable  imports  within  recent  months  that  were  paid  for  with  gold, 
Russian  imports  have  remained  on  a  level  utterly  insufficient  to  her 
needs.  Empty  trains  have  come  to  the  ports  of  the  Baltic  to  carry 
in  the  meagre  volume  of  imports.  The  reported  exportation  of  goods, 
exclusive  of  gold,  from  Russia  in  1921  amounted  to  a  little  over  eight 
million  dollars. 

When  one  surveys  the  importations  of  the  several  countries  of 
Europe  during  the  past  three  years,  one  observes  that  the  materials 
previously  imported  from  Russia  have  been  secured  from  overseas. 
The  volume  of  wheat  and  rye  imported  into  Europe  last  year  approx- 
imated the  normal,  but  the  countries  of  origin  were  different.  Im- 
portations of  feed-grains  and  oil-seeds  have  however  remained  much 
below  the  pre-war  volume.  As  a  result,  the  average  output  of  milk 
and  meat  per  unit  animal  in  Europe  is  much  below  the  pre-war  figures. 
Europe  marshals  her  imports  in  a  certain  order.  The  buying  power 
of  wheat  in  Europe  has  been  very  high  and  this  has  favored  importation 
of  wheat.  Preference  for  wheat  over  feed-grains  corresponds  to  prior- 
ity of  bread  over  meat,  though  lack  of  feed-grain  and  scarcity  of 
mill-feed,  due  to  high  extraction  in  milling,  have  resulted  in  reduction 
of  dairy  products,  whose  scarcity  is  severely  felt. 


456  Alonzo  Englehert  Taylor  [September 

Since  Europe  is  securing  from  overseas  the  same  volume  of  bread- 
grains  tliat  she  used  to  secure  frojn  overseas  and  Russia,  what  differ- 
ence is  it  to  Europe  whence  the  source  of  these  supplies?  If  Russia 
were  producing  feed-stuffs  and  oil-cakes  available  for  export,  would 
Europe  be  able  to  buy  them  from  Russia  in  larger  volume  than  she 
is  now  importing  them  from  oversea  countries  that  have  them  in  abund- 
ance? Europe  would  prefer  to  buy  from  Russia  200  million  bushels 
of  bread-grains  and  from  overseas  350  million  bushels  rather  than  to 
purchase  from  overseas  the  entire  550  million  bushels.  Europe  would 
be  able  also  to  purchase  from  Russia  feeding-stuffs  that  she  is  unable 
to  purchase  from  overseas.  Her  power  of  paying  Russia  with  com- 
modities is  a  different  thing  from  her  power  of  paying  oversea  coun- 
tries with  additional  commodities.  Russia  was  the  natural  market 
for  the  manufactures  of  central  and  western  Europe.  The  people  of 
Russia  are  in  serious  need  of  goods  previously  obtained  from  Europe, 
whose  manufacturing  plants  possess  the  tools  necessary  to  produce 
goods  in  accordance  with  customary  Russian  specifications.  Oversea 
countries  are  not  in  serious  need  of  more  commodities  from  Europe. 
Germany  could  exchange  metal  goods  for  sunflower  seed  from  Russia 
much  more  easil}"^  than  she  can  exchange  metal  goods  for  cotton  seed 
from  the  United  States.  Nor  is  it  readily  possible  to  effect  these 
exchanges  through  substitution  of  triangular  or  quadrangular  trades. 
It  is  today  not  possible  for  Germany  to  buy  cotton  seed  from  the  United 
States,  send  textiles  to  Russia,  and  have  Russia  pay  the  United  States 
for  the  cotton  seed  with  flax  and  platinum.  The  trade  of  the  world 
is  still  disorganized,  and  triangular  and  quadrangular  transactions 
that  used  to  be  effected  at  a  central  point  of  exchange  are  not  yet  work- 
ing normally.  Australia,  Canada,  Argentina,  and  the  United  States 
have  tlie  wheat,  rye  and  feeding-stuffs  required  by  Europe  and  could 
furnish  them  all,  instead  of  joining  with  Russia  in  the  supply  of  the 
needs  of  Europe,  as  was  the  case  before  the  war.  The  needs  of  the 
oversea  countries  for  the  goods  that  Europe  is  equipped  to  offer  are 
limited.  The  needs  of  Russia  for  the  goods  that  Europe  is  equipped 
to  offer  arc  very  great. 

Tlie  differences  between  Europe's  power  of  paying  Russia  and  her 
power  of  paying  oversea  countries  are  qualitative  and  quantitative. 
In  the  qualitative  sense,  Russia  has  certain  requirements  in  goods  that 
could  be  supplied  by  Europeans,  for  the  manufacture  of  whicli  they 
are  tooled  up  and  to  which  their  processes  are  adapted.  Additional 
commodities  that  might  be  acceptable  to  the  United  States,  Canada, 
Australia,  and  xVrgentina  would  be  different.  Europe  is  not  in  posi- 
tion to  cater  to  new  needs  of  these  countries  as  she  would  be  able  to 
cater  to  the  old  needs  of  Russia.  In  the  quantitative  sense,  the  cen- 
tralization of  the  trade  of  Europe  becomes  excessive.     From  oversea 


1922]  Commercial  Importance  of  Russia  457 

countries  Europe  must  buy  copper,  nickel,  zinc,  petroleum,  tin,  wool, 
rubber,  silk  and  cotton,  to  mention  only  important  goods,  and  two 
thirds  of  her  import  cereal  needs.  To  add  to  this  bill  of  imports  a  huge 
additional  sum  to  cover  all  her  import  cereal  needs,  exceeds  the  capacity 
of  Europe  to  focus  her  commerce.  If  the  oversea  countries  are  to 
bear  the  total  burden  of  supplying  grain  to  Europe,  they  must  develop 
a  consumptive  capacity  for  available  European  commodities  with  which 
these  may  be  paid.  Such  consumptive  capacity  exists  naturally  in 
depleted  Russia,  whose  plane  of  consumption  is  low.  But  suddenly  to 
add  further  increments  to  the  consumptive  capacities  of  the  United 
States,  Canada,  Argentina,  and  Australia,  where  the  standards  of 
living  are  already  high,  is  difficult  and  not  to  be  achieved  in  a  day. 
Unless  these  nations  can  use  the  goods  which  Europe  is  equipped  to 
offer  in  return  for  grain  or  dispose  of  them  elsewhere  in  the  world, 
they  would  be  saturated  with  customary  European  commodities  for 
the  time  being.  The  more  the  sources  of  supply  for  Europe  are  cen- 
tralized, the  more  focussed  becomes  the  export  trade.  What  Europe 
requires  is  diversification  of  trade,  not  centralization,  because  diver- 
sification means  a  wider  export  market. 

The  fundamental  relationship  can  be  illustrated  specifically  with 
two  commodities,  tea  and  cotton.  If  Russia  buys  no  tea  from  India 
and  China,  these  countries  buy  less  of  British  cottons.  Spindles  stand 
idle,  men  are  unemployed,  the  imports  of  cotton  from  Egypt  and  the 
United  States  are  reduced,  British  shipping,  insurance  and  banking 
decline,  and  cotton  dams  back  in  producing  countries.  The  illustra- 
tions with  cotton  can  be  carried  farther.  The  farmers  of  Argentina 
by  planting  the  easily  available  acres  are  able  to  increase  their  exporta- 
tion of  wheat,  let  us  say,  60  million  bushels,  one  third  of  what  Russia 
used  to  furnish  Europe.  Can  these  farmers,  or  indeed  the  entire 
people  of  Argentina,  at  once  develop  a  consumptive  capacity  corres- 
ponding to  the  increment  of  wheat  production?  Does  Argentina, 
when  replacing  Russia  to  this  extent,  increase  her  consumption  of 
cotton  to  the  extent  of  one  third  of  the  usual  Russian  import  of  cotton? 
Certainly  not.  Before  the  war  cereals  formed  one  half  of  Russia's 
exports,  and  cotton  one  sixth  of  her  imports.  The  countries  that 
have  replaced  Russia  in  furnishing  cereals  to  Europe  have  not  in- 
creased their  use  of  cotton  to  the  extent  represented  in  the  volume 
previously  taken  by  Russia.  If  the  peasants  of  Russia,  not  producing 
a  normal  crop  and  existing  on  a  plane  of  living  subnormal  even  for 
them,  were  this  year  to  produce  an  increment  of  100  million  bushels  of 
wheat  for  export,  they  would  display  immediately  a  corresponding  con- 
sumptive capacity  in  cotton.  When  Russia  exported  160  million 
bushels  of  wheat,  she  expected  to  be  paid  in  commodities.  When  Canada, 
Argentina,    Australia,    and    the    United    States    expand    160    million 


458  Alonzo  Englehert  Taylor  [September 

bushels,  they  expect  to  be  paid  in  gold.  The  proposition  remains 
fundamental,  whether  applied  to  a  whole  country  or  to  an  individual. 
The  consumptive  capacity  that  corresponds  to  the  wheat  required  by 
Europe  annually  will  be  difficult  to  maintain  in  the  United  States, 
Canada,  Argentina,  and  Australia  on  top  of  the  customary  conditions 
of  living.  If  the  situation  were  to  be  permanent,  Europe  might  de- 
velop new  goods  to  meet  new  needs ;  but  consumption  of  traditional 
European  goods  is  not  easily  expanded.  The  corresponding  con- 
sumptive capacity  (the  market)  stands  waiting  in  Russia. 

Surveyed  either  from  the  comparative  standpoint  of  total  values  or 
by  articles,  it  is  clear  that  what  the  world  misses  today  is  not  Russian 
production  but  Russian  consumption.  The  Russian  wheat  is  more 
valuable  as  money  than  as  bread-grain.  The  importance  of  Russia 
to  the  world  lies  primarily  in  her  consumptive  capacity  and  second- 
arily in  the  commodities  that  have  lapsed.  The  world  has  replaced  the 
commodities  themselves  with  relatively  little  difficulty ;  the  consumptive 
capacity  is  replaced  with  great  difficulty.  In  particular,  the  cultiva- 
tion of  additional  consumptive  capacity  in  the  world  is  difficult  when 
passing  down-grade  on  a  business  cycle.  The  eflfect  of  raising  more 
grain  in  countries  that  are  already  heavy  exporters  does  not  extend 
widely  outside  the  industrial  life  of  those  countries.  But  the  with- 
drawal from  the  trade  of  the  world  of  the  buying  power  represented 
by  200  million  bushels  of  wheat  and  rye  in  Russia,  not  to  mention  the 
feeding-stuffs,  extends  through  a  network  of  ramifications  that  enter 
every  civilized  country. 

Russia,  previously  contributing  160  million  bushels  of  wheat  to 
Europe,  cannot  import  a  reciprocal  volume  of  goods  because  she  has 
no  wheat  as  payment.  The  countries  that  have  raised  an  additional 
160  million  bushels  of  wheat  find  it  hard  to  market  the  grain  because 
their  consumptive  capacities  in  imports  have  not  been  expanded  in 
])roportion.  Because  Russia  has  not  500  million  dollars'  worth  of 
exportable  grain  and  oil-seeds,  she  cannot  purchase  goods  to  that 
value  from  producers  and  manufacturers  the  world  over.  Russia  has 
been  easily  replaced  as  a  producer;  she  is  to  a  material  extent  irre- 
placeable as  a  consumer. 

The  countries  of  western  Europe  (ex-allied,  ex-enemies  and  neutrals 
alike)  seem  united  in  the  view  that  the  desired  economic  restoration 
of  Russia  predicates  the  recovery  of  Russian  production  of  foods, 
feeds  and  industrial  raw  materials,  but  docs  not  include  the  revival 
of  Russian  manufactures.  The  desire  of  Europe  contractually  to 
restrict  Russia  to  ])roduction  of  raw  materials  is  in  agreement  with 
the  thesis  of  this  presentation,  whatever  may  be  thought  of  the  policy 
from  the  standpoint  of  political  morality.  We  may  expect  to  see 
capital  advances  denied  Russia  for  purposes  of  industrial  rehabilitation 


1922]  Commercial  Importance  of  Russia  459 

and  extended  to  her — in  some  directions  in  return  for  concessions — 
for  restoration  of  agriculture,  forestry  and  mining.  The  time  element 
is  of  especial  importance.  If  Russia  is  to  recover  soon,  that  will  indi- 
cate one  kind  of  policy  for  Europe  and  the  oversea  exporting  countries. 
If  recovery  is  to  be  long  delayed,  that  will  involve  a  different  policy 
for  both.  Immediate  returns  cannot  be  counted  upon,  even  if  recon- 
struction of  Russia  were  at  once  got  under  vray  through  cooperation 
of  European  capital  with  the  present  Russian  government.  For  rea- 
sons that  have  been  illuminatingly  and  judiciously  stated  in  the  article 
by  E.  Dana  Durand  in  the  February  number  of  the  Quarterly  Journal 
of  Economics,  material  surpluses  for  export  will  not  be  easily  attained 
during  the  next  few  years,  either  in  Russia  or  in  Eastern  Europe. 

Aloxzo  Exglebert  Taylor. 
Food  Research  Institute, 
Stanford  University. 


THE  CIRCUIT  FLOW  OF  MONEY 

The  daily  expenditures  by  consumers  for  new  consumers'  goods,  upon 
which  business  stability  largely  depends,  are  determined  in  part  by  the 
total  volume  of  money  in  circulation,  in  part  by  other  factors  including 
the  frequency  with  which  that  money  is  returned  to  consumers.  The 
flow  of  money,  therefore,  from  use  in  consumption  to  another  use  in 
consumption  should  not  be  overlooked  in  studies  of  the  causes  and 
conditions  of  business  fluctuations.  It  is  the  purpose  of  this  paper 
to  describe  certain  aspects  of  this  circuit  flow  of  money,  to  raise  the 
question  whether  it  does  not  deserve  more  attention  that  it  has  yet 
received  in  our  analyses  of  business  cycles,  and  to  suggest  pertinent 
lines  of  investigation.  Unfortunately,  the  statistics  upon  which  the 
most  important  conclusions  concerning  this  subject  must  be  based  are 
not  at  hand  and  are  not  likely  to  be  for  a  long  time  to  come.  The 
following  discussion  will  have  served  its  purpose  if  it  stimulates  further 
inquiry  in  profitable  directions  and  helps  to  hasten  the  day  when  the 
necessary  statistics  are  available. 

There  are  streams  of  goods  and  streams  of  money  which,  in  a  literal 
sense,  are  constantly,  though  not  steadily,  moving  in  opposite  direc- 
tions. By  "money"  we  mean  throughout  this  discussion  all  forms  of 
currency  and  also  bank  deposits  subject  to  check;  by  "goods"  we  mean 
new  commodities.  For  the  most  part,  raw  materials  are  grown,  ex- 
tracted and  graded,  moved  on  to  factories  and  prepared  for  final  con- 
sumers, moved  on  to  wholesalers,  thence  distributed  to  retailers  and 
finally  turned  over  to  consumers.  At  the  same  time,  streams  of  money 
arc  moving  in  the  opposite  direction — a  main  stream  becoming  smaller 
and  smaller  as  it  flows  from  consumers  to  retailers,  from  retailers  to 
wholesalers,  from  wholesalers  to  manufacturers,  from  manufacturers  to 
producers  of  raw  materials,  and  thence,  mainly  in  the  form  of  pay- 
ments for  personal  services,  back  once  more  to  consumers.  From 
various  places  in  this  main  stream,  smaller  streams  take  part  of  the 
money  directly  or  indirectly  back  to  consumers.  This  circuit  move- 
ment is  one  great  difference  between  the  flow  of  money  and  the  flow  of 
goods.  When  goods  get  into  the  hands  of  the  consumers,  they  are 
usually  disposed  of,  and  thus  they  arc  withdrawn  forever  from  the 
stream.  On  the  contrary,  most  of  the  money  that  reaches  the  con- 
sumer is  paid  by  him  to  retailers  and  to  others;  and  thence  it  pro- 
ceeds around  the  circuit. 

The  stream  of  money  from  use  in  consumption  of  new  goods  back  to 
use  in  consumption  of  new  goods,  we  shall  call  the  circuit  flow  of  money. 
The  average  time  taken  by  money  in  making  this  round  through  the 
various  streams,  we  shall  call  the  circuit  time  of  money.     Its  rate  of 


1922]  The  Circuit  Flow  of  Money  461 

flow  we  shall  call  the  circuit  velocity  of  mone}'.  The  circuit  velocity 
is  the  reciprocal  of  the  circuit  time.  If,  for  example,  the  circuit  velo- 
city is  two  times  a  year,  the  circuit  time  is  one  half  year. 

We  are  not  now  speaking  of  what  economists  call  the  velocity  of 
money.  By  that  term,  they  mean  the  frequency  with  which  money  is 
used  for  any  purpose  whatever,  that  is,  its  turnover  within  a  given 
period  of  time.  Obviously,  without  due  consideration  of  the  velocity  of 
money,  no  discussion  of  monetary  problems  is  complete ;  for  one  dollar 
spent  ten  times,  if  spent  on  the  same  day  and  for  the  same  purpose, 
has  about  the  same  effect  as  ten  dollars  spent  once.  In  any  given 
period  of  time,  the  amount  of  money  actually  spent  is  the  product  of 
the  quantity  of  mone}'^  and  its  velocity.  But  before  we  can  determine 
exactly  how  the  movements  of  money  affect  business,  we  must  consider 
certain  phases  of  the  circulation  of  money — particularlv,  the  circuit 
velocity  of  money — that  may  be  as  significant  as  the  velocity  of  money 
as  a  whole.  If  the  volume  of  new  consumers'  goods  moving  into  con- 
sumers' hands  maintained  a  definite  ratio  to  the  total  volume  of  goods 
in  circulation,  the  circuit  velocity  of  money  would  tend  to  bear  a  defi- 
nite ratio  to  the  velocity  of  money  as  a  whole.  In  that  case  we 
should  have  no  special  interest  in  the  circuit  velocity  of  money.  But 
our  entire  discussion  is  based  on  the  assumption  that  these  definite 
ratios  are  not  maintained  for  any  considerable  time.  We  assume, 
on  the  contrary,  that  all  periods  of  major  business  disturbances  are 
characterized  by  an  upsetting  of  the  ratios  that  hold  in  times  of  rela- 
tive business  stability. 

The  equation  of  exchange  which  takes  into  account  only  the  velocity 
of  money  in  general  takes  no  account  of  some  of  the  specific  causes  of 
business  fluctuations.  For  some  purposes,  the  general  equation 
MV^LpQ  is  not  as  useful  as  the  equation  MC=Zpq,  in  which  C  is  the 
circuit  velocity  of  money  and  q  is  the  volume  of  new  consumers'  goods 
sold  to  consumers.  We  should  consider  separately  changes  in  the 
velocity  of  money  spent  for  consumers'  goods  and  changes  in  the 
velocity  of  money  used  in  other  ways.  Money  is  not  spent  more  fre- 
quently in  retail  markets  merely  because  it  is  spent  more  frequently 
in  other  markets.  Money  may  work  faster  in  order  to  pass  woolen 
goods  through  more  hands  on  their  way  to  clothiers'  shops,  without 
passing  more  garments  through  the  shops.  In  otlier  words,  additional 
middlemen  may  make  use  of  money  without  making  additional  sales 
to  consumers.  Both  velocity  and  quantity  of  money  might  remain 
constant — that  is  to  say,  people  might  have  the  same  amount  of  money 
and  spend  it  as  rapidly  as  ever — and  yet  the  markets  might  sense 
trouble.  For  if  people  decreased  the  amount  spent  for  new  goods 
within  a  given  period  of  time,  and  to  the  same  extent  increased  the 
amount   spent    in   other  ways,   they   would   thus   decrease   the   circuit 


462  William  T.  Foster  [September 

velocity  of  money ;  and  they  might  thereby  temporarily  depress  busi- 
ness, witliout  decreasing  the  velocity  of  money.  Under  certain  condi- 
tions, therefore,  the  turnover  of  money  as  a  whole  may  have  less  to  do 
with  business  fluctuations  than  the  turnover  of  money  in  its  particular 
function  of  moving  goods  into  the  hands  of  consumers. 

It  is  manifestly  impossible  to  predict  the  course  which  a  given  coin 
will  take  from  use  in  consumption  back  to  another  use  in  consumption. 
Even  if  we  knew  exactly  what  course  it  had  just  taken,  we  could  not 
know  what  course  it  might  next  take.  And  it  would  be  exceedingly 
difficult  to  find  out.  To  follow  accurately  a  single  circuit  of  even  a 
small  part  of  our  currency — our  silver  dollars,  for  instance — would 
require  much  of  the  time  of  the  entire  population  and  thus  interfere 
with  their  circulation.  We  can,  however,  study  the  factors  that  tend 
to  change  the  circuit  velocity  of  money  as  a  whole. 

Money  is  in  circulation,  in  our  use  of  the  term,  as  long  as  it  is  in  the 
possession  of  somebody.  The  unused  lending  power  of  banks  is  not 
money  in  circulation,  for  it  is  not  available  for  expenditure.  It  be- 
comes money  only  through  the  joint  act  of  a  bank  and  a  borrower. 
The  lending  power  of  banks  is  like  gold  in  the  mines ;  it  is  not  money 
until  somebody  puts  it  where  it  can  be  used  as  money.  All  bank  de- 
posits subject  to  check  are  money  in  circulation,  no  matter  what  pro- 
portion of  these  deposits  are  checked  out  in  any  given  month,  just  as 
all  pocket  money  is  in  circulation  regardless  of  the  amount  that  is 
spent  on  any  given  day.  Within  how  long  a  period  of  time  a  volume 
of  money  equal  to  the  total  volume  in  circulation  will  be  spent  by 
consumers  depends  upon  the  circuit  time  of  money.  In  other  words, 
whether  the  money  spent  in  consumption  is  more  or  less  than  the  total 
volume  of  money  in  existence  depends  on  the  length  of  the  period  we 
are  considering.  In  a  certain  sense,  it  is  true,  all  money  is  idle  except 
when  it  is  actually  being  used  in  exchange ;  but  in  that  sense  only  one 
dollar  out  of  many  thousands  is  active,  and  all  the  rest  are  idle,  in  any 
given  minute.  It  is  only  a  matter  of  convenience  which  definition  we 
employ.  Either,  if  used  consistently,  leads  us  to  the  same  conclusions 
as  the  other. 

Diagram  of  the  Flow  of  Money 

The  diagram  on  the  opposite  page,  similar  in  plan  and  purpose  to 
one  devised  by  Mr.  M.  C.  llorty,  represents,  in  a  general  way,  the 
circuit  flow  of  money.  To  find  fault  with  this  diagram  from  an 
engineering  standpoint  would  not  be  difficult ;  neither  would  it  be 
sensible.  All  we  should  ask  of  these  reservoirs  and  pipes  is  that  they 
serve  the  purpose  at  hand.  In  the  main,  subject  to  certain  qualifica- 
tions to  be  made  presently,  this  diagram  does  serve  our  purpose.  It 
pictures  the  flow  of  money  when  business  is  relatively  stable. 


THE  CIRCUIT  FLOW  OF  MONEY 


INCOME    FROM  CAPITAL  INTEREST 
DIVIDENDS   AND   PROFITS  23% 


INCOME  FROM  PERSONAL 
SERVICES  70% 


INCOME   FROM   NATURAL 
RESOURCES   7% 


S\ 


(r 


fr 


Cr 


QljjsyMmilFjipB  I 


(r^^ 


^ 


COMMODITIES 


^ 


POLLAK  FOUHDATION 


464  William  T.  Foster  [September 

The  double  reservoir  at  the  top  shows  the  amount  of  money  in  the 
hands  of  individuals  and  available  for  expenditure  in  consumption.  This 
is  what  we  have  previously  called  the  consumers'  fund.  The  reservoir 
is  divided  into  two  parts  in  oi'der  graphically  to  represent  the  fact  that 
a  large  part  of  the  money  received  by  individuals  is  income,  most  of 
which  is  spent  in  consumption;  while  a  smaller  part  is  money  received 
from  the  sale  of  real  estate,  bonds  and  stocks,  most  of  which  is  re- 
invested. The  two  parts  of  the  reservoir,  however,  are  connected  with 
pipes,  in  order  to  take  account  of  the  fact  that  some  income  is  invested 
and  some  money  received  from  the  sale  of  securities  is  spent  in  con- 
sumption. These  connecting  pipes  are  important.  We  must  bear  in 
mind  that  they  are  alwaj^s  partly,  and  never  wholly,  clogged.  By  their 
aid,  we  may  visualize  the  fact  that  we  have  no  means  of  knowing  how 
much  of  the  consumers'  fund  actually  will  be  spent  in  consumption  in 
any  given  period  of  time. 

Into  the  right-hand  section  of  the  consumers'  fund,  three  large  pipes 
are  emptying:  one  represents  the  large  proportion  of  individual  in- 
comes, about  70  per  cent,  which  is  derived  from  personal  services ; 
the  others  represent  the  smaller  proportion,  about  30  per  cent, 
derived  from  management  and  property,  including  rentals,  royalties, 
interest  and  dividends.  These  percentages  are  the  averages,  in 
round  numbers,  of  the  figures  for  1909-1918,  found  in  the  admirable 
study  of  Income  in  the  United  States,  published  in  1921  by  the  National 
Bureau  of  Economic  Research.  The  sizes  of  some  of  the  pipes  in  the 
diagram,  however,  are  based,  necessarily,  on  much  rougher  estimates. 
No  dependable  study  has  yet  been  made  of  tlie  proportions  of  indi- 
vidual incomes  which  are  spent  for  new  goods,  services,  real  estate  and 
investments. 

Leading  out  of  the  reservoir  of  consumers'  incomes  are  various  pipes 
which  represent  expenditures  for  rent,  taxes,  clothes,  food,  sundries 
and  wages.  The  relative,  estimated  amounts  spent  for  these  various 
purposes  are  indicated  approximately  by  the  size  of  the  pipes.  It  will 
be  observed  that  most  of  the  individual  incomes  are  paid  at  once  to 
those  who  are  engaged  in  the  distribution  of  finished  commodities.  These 
distributors,  in  turn,  pay  much  of  the  money  they  receive  directly  to 
manufacturers,  wlio,  in  turn,  pay  much  of  the  money  they  receive 
directly  to  producers  of  raw  materials.  All  along  the  way  some  of  the 
money,  mainly  in  the  form  of  wages,  profits  and  interest,  gets  into  the 
hands  of  individual  consumers  and  is  spent  for  consumers'  goods,  thus 
completing  the  circuit  flow. 

Some  of  the  money  completes  the  circuit  quickly,  some  of  it,  slowly. 
As  sliown  in  the  diagram,  a  part  of  the  consumers'  income  is  spent 
directly  for  personal  services  and  a  part  is  paid  to  individuals  for 


1922]  The  Circuit  Flow  of  Money  465 

second-hand  automobiles  and  other  "old  goods,"  and  is  thus  passed 
directly  from  one  consumer  to  another.  Most  of  the  money  spent  by 
consumers,  however,  takes  a  longer  course  before  it  finds  its  way  back 
to  the  consumers'  fund.  Part  of  the  money  that  is  spent  for  "new 
goods" — a  pair  of  shoes,  for  example — goes  to  the  wholesaler ;  part 
of  that  money  goes  to  the  manufacturer ;  part  of  that  money  goes  to 
the  tanner ;  part  of  that  money  goes  to  the  farmer  who  raised  the 
stock ;  part  of  that  money  goes  to  the  producer  of  harvesting  ma- 
chinery; part  of  that  money  goes  to  mechanics  in  the  factory,  and  is 
thus  returned  to  the  consumers'  fund.  During  the  circuit  from  con- 
sumer back  to  consumer,  some  of  the  money  spent  for  the  pair  of  shoes 
passed  through  more  hands  than  in  our  illustration;  some  of  it  passed 
through  fewer  hands.  The  part  that  the  retail  shoe  dealer  paid  imme- 
diately in  weekly  wages  to  his  clerks  made  the  circuit  quickly.  The 
part  that  was  set  aside  in  cash  as  undivided  profits  of  the  shoe  manu- 
facturer may  have  taken  a  long  time  to  make  the  circuit.  It  is  the 
average  time  taken  by  all  the  money  in  the  flow  from  one  use  in  con- 
sumption to  another  use  in  consumption  that  we  have  called  the  circuit 
time  of  money. 

The  Flow  of  Money  and  the  Flow  of  Goods 

Upon  the  rate  of  flow  of  money  into  the  reservoir  of  personal  incomes 
depends  the  even  flow  of  goods  from  producer  to  consumer.  The 
stream  of  money  is,  in  fact,  a  line  of  communication.  Money  has 
often  been  compared  with  roads.  Adam  Smith  even  went  so  far  as 
to  anticipate  this  age  of  aeroplanes :  he  called  money  "a  sort  of  wagon 
way  through  the  air."  He  emphasized  the  fact  that  money  is  unlike 
factories  and  stores.  Rather,  it  is  like  railroads  and  telephones ;  for 
its  function  is  not  to  produce  or  to  exchange  goods,  but  to  facilitate 
their  production  and  exchange.      It  is  only  a  means  to  an  end. 

Nevertheless,  anything  that  happens  to  any  of  our  lines  of  commu- 
nication so  as  to  disturb  the  even  flow  of  goods  can  retard  the  pro- 
duction and  distribution  of  goods.  Our  railroad  lines  are  obviously 
of  crucial  importance.  At  times  some  of  our  freight  cars  get  side- 
tracked and  lie  idle;  some  get  diverted  from  more  essential  to  less 
essential  uses.  Now  and  then  a  bridge  falls  down  and  traffic  is  held  up. 
Sometimes  transportation  facilities  fail  to  meet  increasing  needs,  as 
they  did  throughout  the  United  States  during  the  car  shortage  of  1920. 
Whatever  thus  prevents  the  orderly  movement  of  goods  tends  to  pre- 
vent the  further  production  of  goods. 

Similarly,  whatever  interferes  with  the  monetary  lines  of  commu- 
nication— that  is  to  say,  whatever  retards  the  even  flow  of  money  from 
consumers  back  to  consumers — tends  to  retard  the  flow  of  goods  and 
thus  to  disturb  business  as  a  whole.     Some  money  gets  side-tracked  in 


466  William  T.  Foster  [September 

hoards,  in  cash  balances,  even  in  banks,  and  is  unemployed  for  an 
unusually  long  time;  some  money  gets  diverted  at  times  from  more 
essential  to  less  essential  uses.  Now  and  then  a  bank  fails,  and  there 
is  a  sudden  stoppage  of  the  trade  movements  that  were  dependent  upon 
the  tied-up  funds  of  the  bank.  Sometimes  the  consumers'  fund  is 
increased  out  of  proportion  to  increased  production,  as  in  most 
countries  in  the  years  following  the  World  War.  At  other  times,  not 
enough  money  flows  into  the  consumers'  fund  to  maintain  the  pro- 
duction-consumption equation:  the  volume  of  finished  goods  increases 
more  rapidly  than  the  volume  of  consumers'  expenditures.  In  short, 
whatever  happens  to  the  medium  of  exchange  at  once  affects  the  whole 
industrial  world  in  some  way ;  whatever  prevents  the  circulating  pur- 
chasing power  from  moving  goods  to  final  consumers  interferes  with 
the  further  production  of  goods. 

Variations  in  the  Rate  of  Flow 

What  it  means  to  business  to  have  variations  in  the  rate  of  flow  of 
money  into  the  consumers'  fund  may  be  seen  if  we  continue  to  think 
of  this  fund  as  water  in  a  vast  reservoir.  The  simile  need  not  mislead 
us  if  we  have  in  mind  that  it  proves  nothing,  and  if  we  take  care  not 
to  work  it  too  hard  even  for  purposes  of  illustration.  Let  us  observe, 
then,  that  some  of  the  water  in  the  reservoir  moves  through  conductors 
to  the  turbines  of  electrical  plants,  whence  power  is  transmitted  to 
distant  cities  where  it  moves  street  cars,  lifts  elevators,  runs  washing- 
machines,  cures  diseases,  illuminates  buildings  and  in  a  thousand  other 
ways  sustains  the  activities  of  our  complicated  modern  life.  Some  of 
the  water  moves  through  irrigating  ditches  to  innumerable  farms  where 
it  turns  barren  wastes  into  fields  of  wheat.  Some  of  the  water  runs 
through  mills  where  it  moves  machines  that  make  the  wheat  into  flour. 
Some  of  the  water  moves  in  river  beds  where  it  has  its  part  in  carrying 
the  wheat  and  the  flour  from  those  who  have  a  surplus  to  those  who 
have  none.  Thus,  at  all  times,  a  large  part  of  this  current  supply  of 
water  is  doing  economic  work. 

A  part  of  this  water  supply,  on  the  other  hand,  has  no  share  in  the 
production  and  distribution  of  goods — does  no  economic  work  what- 
ever. At  times,  some  of  it  stays  on  the  surface  of  the  reservoir  in 
the  form  of  ice;  it  is  seasonally'  unemployed.  Some  of  the  water,  after 
turning  the  wheels  of  industry  at  one  place,  moves  on  down  the  river 
until  it  breaks  through  tlie  bank  and  comes  to  a  stop  in  a  dead  basin. 
Thus  it  is  withdrawn  from  the  channels  of  commerce;  it  can  do  no 
more  economic  work  until  somehow  it  is  released  and  again  set  in 
motion.  There  is  another  portion  of  the  supply  in  the  reservoir  that 
is  completely  lost  to  industry;  it  evaporates  before  it  has  been  used  in 
any  way.     And  there  is  still  another  portion  that  evaporates  along 


1922]  The  Circuit  Flow  of  Money  467 

the  routes  of  commerce,  after  it  has  played  a  part  in  the  world's  work. 
Whatever  thus  disappears  by  evaporation  is  subtracted  from  the  cur- 
rent supply  of  power;  the  loss  is  made  good  onW  when  the  power  is 
re-created,  as  it  is  when  the  rain  falls  and  the  water  flows  again  into 
the  reservoir. 

Stability  in  production,  as  far  as  it  depends  on  this  water  supply, 
is  concerned  only  with  the  rate  of  flozv.  Nothing  that  happens  to  the 
water  supply  can  upset  production  schedules  provided  the  net  result  is 
an  even  flow  of  power,  day  in  and  day  out,  in  the  same  channels,  per- 
forming an  unvarying  amount  of  work.  How  much  or  how  little  of  the 
water  supply  evaporates,  or  leaks  from  the  pipes,  or  remains  frozen  in 
the  reservoir,  or  is  held  back  in  dead  basins,  is  of  no  consequence,  pro- 
vided the  total  volume  thus  withheld  from  industry  and  its  distribution 
remain  the  same.  Only  changes  count.  Until  there  are  changes  in  the 
rate  of  flow,  the  work  done  will  be  plotted  on  the  graphic  chart  as  a 
straight  line. 

Similarly  business  stability,  as  far  as  it  depends  on  money,  is  con- 
cerned primarily  with  the  rate  of  flow  of  money  into  the  consumers' 
fund.  As  far  as  stability  is  concerned,  it  does  not  necessarily  make 
any  difl'erence  how  much  money  is  in  government  vaults,  or  is  frozen  in 
loans,  or  is  idle  in  hoards,  or  is  carried  in  pockets  and  tills  as  daily 
cash  balances,  provided  the  volume  of  money  thus  withheld  and  the 
volume  of  goods  coming  upon  the  markets  remain  the  same  from  day 
to  day.  Only  changes  count.  When  money  that  has  been  idle  is  put 
to  work,  or  money  that  has  been  at  work  retires  temporarily  from 
business,  it  changes  the  rate  of  flow  of  money  from  consumption  back 
into  consumption:  that  is  to  say,  it  changes  the  circuit  velocity  of 
money.  At  any  stage  of  the  business  cycle,  a  change  in  the  circuit 
velocity  of  money  tends  to  cause  a  change  in  the  state  of  business. 

Whether  the  change  is  good  or  bad  for  business  depends  on  the 
state  of  business  at  the  time.  This  appears  to  be  overlooked  in  much 
that  is  said  about  "economizing  credit,"  "making  money  more  efficient," 
and  "bringing  hoards  out  of  hiding."  The  usual  assumption  seems 
to  be  that  anything  that  increases  the  velocity  of  money  in  general,  or 
the  amount  spent  by  consumers,  is  advantageous  to  business  in  general. 
It  may  be  good  or  bad  for  business.  It  all  depends  on  economic  condi- 
tions at  the  time  and  the  nature  of  the  transactions  which  are  alTected 
by  the  increased  "efficiency"  of  money. 

The  Circuit  Time  of  Money 

How  long  does  it  take,  on  the  average,  for  each  dollar  to  make  this 
round  from  one  use  in  consumption  to  another  use  in  consumption.? 
What  are  the  factors  which  retard  or  accelerate  the  flow.?  What  are 
the  efl'ects.  of  these  fluctuations  on  the  state  of  business  activity.?  What 


468  William  T.  Foster  [September 

are  the  correlations  between  changes  in  the  velocity  of  money  and 
changes  in  the  circuit  velocity  of  money?  We  shall  now  venture  to 
open  up  the  discussion  of  these  questions  in  a  preliminary  way,  though 
it  may  be  many  years  before  research  will  answer  these  questions  as 
definitely  as  they  must  be  answered  before  anyone  can  account  in  full 
for  the  ups  and  downs  of  business. 

What  is  the  circuit  time  of  money?  The  available  statistics  are 
not  a  sufficient  basis  for  an  answer  to  this  question.  If  we  use  Pro- 
fessor Fisher's  estimate  of  the  volume  and  velocity  of  money  in  the 
United  States,  in  the  year  1909,  and  if  Ave  then,  from  the  estimate  of 
the  National  Bureau  of  Economic  Research  for  the  income  of  that  year, 
guess  at  the  value  of  new  goods  bought  by  consumers,  we  arrive  at  an 
estimate  of  the  circuit  time  of  money.  If  the  total  money  transactions 
for  that  year  were  $400,000,000,000,  and  the  total  amount  of  money 
in  circulation  was  ,$8,680,000,000,  the  average  velocity  of  money  was 
approximately  46.  If  consumers  spent  $20,000,000,000  for  new  goods 
during  that  year,  the  circuit  time  of  money  was  8,680,000,000  divided 
by  20,000,000,000,  Avhich  gives  .434  years,  or  158.4  days.  On  the 
basis  of  these  figures,  the  circuit  velocity  of  money,  the  reciprocal  of 
the  circuit  time  of  money,  would  be  approximately  2.3.  This  would 
mean  that  for  every  dollar  spent  by  a  consumer  for  new  consumers' 
goods  during  1909,  approximately  nineteen  dollars  were  used  for  other 
transactions.  That  is  to  say,  although  each  dollar  was  used  about 
once  in  every  eight  days  for  some  purpose  or  other,  it  was  used  only 
once  in  158  days  for  the  purpose  of  passing  new  goods  into  the  hands 
of  consumers.  Looking  back  at  our  diagram,  we  may  visualize  these 
statistics  of  exchange  by  thinking  of  the  dollars  that  leave  the  con- 
sumers' fund  at  the  top  through  the  new  goods  pipes  as  being  used,  on 
the  average,  nineteen  times  elsewhere  in  the  circuit  (including  parts  of 
the  flow  of  money  that  are  not  shown)  before  they  are  again  used  in  con- 
sumption. But  there  is  so  much  guessing  in  these  figures  that  they 
are  useful  only  for  purposes  of  illustration.  If  the  turnover  of  bank 
deposits  subject  to  check  is  now  about  twenty-five  times  a  year,  as 
estimated  by  the  statistical  division  of  the  Federal  Reserve  Bank  of 
New  York,  tlic  figures  for  velocity  in  our  illustration  are  probably  far 
from  right.  Our  research  agencies,  no  doubt,  will  provide  us  some 
day  with  more  dependable  estimates  than  any  now  available  for  the 
velocity  of  money  and  the  annual  expenditures  of  consumers  for  new 
consumers'  goods. 

Defects  in  the  Diagram 

Evidently,  in  order  to  represent  all  the  uses  of  money  in  the  course 
of  its  journey  from  consumer  back  to  consumer,  we  should  need  a  much 
more  complicated  diagram.      It  would,  in  fact,  be  so  complicated  that, 


1922]  The  Circuit  Floxc  of  Money  469 

without  a  vast  amount  of  study,  it  would  be  confusing  rather  than 
clarifying.  For  that  reason,  we  have  not  shown  man}"  of  the  money 
movements  of  minor  importance. 

Nor  have  we  shown  all  the  movements  that  are  of  major  import- 
ance. The  reader  has  already  observed,  no  doubt,  that  the  diagram 
overlooks  the  fact  that  nearly  all  money,  on  its  way  from  consumer  to 
consumer,  passes  through  banks.  Up  to  this  point,  we  have  directed 
attention  to  the  place  in  the  circuit  flow  of  money  where  it  is  spent  by 
consumers.  We  have  made  this  the  center  of  our  interest  because  con- 
sumption is  the  end  for  which  goods  are  created ;  and  because  we  wish 
to  raise  the  question  whether  anything  that  happens  to  monev  in  any 
other  part  of  the  circuit  can  cause  a  major  disturbance  in  business,  as 
long  as  just  enough  money  continues  to  be  spent  in  consumption  to 
take  away  the  goods  without  a  change  in  the  price  level.  There  is 
good  reason,  however,  for  paying  special  attention  to  that  part  of  the 
circuit  in  which  money  flows  through  the  banks ;  for  it  is  literallv 
true  that  most  of  the  money  that  is  spent  in  consumption  begins  and 
ends  its  career  in  a  bank.  When  a  farmer  who  is  waiting  for  his  wheat 
to  mature  applies  to  the  bank  for  a  loan  of  ten  thousand  dollars,  the 
bank  increases  its  deposits  to  that  extent,  minus  the  discount.  The 
total  volume  of  money  in  circulation  is  thereby  increased.  As  soon  as 
the  farmer  spends  the  money,  it  proceeds  on  its  way  around  the  circuit. 
In  due  time,  if  all  goes  well,  the  farmer  sells  his  wheat  and  pays  the 
loan  at  the  bank,  thereby  reducing  the  amount  of  money  in  circulation 
by  ten  thousand  dollars.  Thus,  in  a  certain  sense,  most  of  our  money 
is  created  and  extinguished  in  the  banks. 

It  is  sometimes  said  that  the  money  is  not  extinguished  b}'  the  pay- 
ment of  a  loan  since  the  bank  is  at  liberty,  the  moment  the  loan  is  paid, 
to  lend  precisely  the  same  amount  to  another  borrower.  The  fact  that 
the  bank  passes  on  the  purchasing  power  by  means  of  different  pieces 
of  paper  is  said  to  make  no  difference.  When  a  bank  loan  is  paid, 
however,  the  amount  of  the  loan  is  actually  withdrawn  from  the  cir- 
cuit flow  of  money ;  and  an  equal  amount  is  returned  to  the  stream  only 
by  a  new  joint  act  of  the  bank  and  a  borrower.  Unless  we  think  of 
bank  deposits  as  being  thus  created,  and  extinguished,  and  re-created, 
we  leave  out  of  account  one  of  the  chief  causes  of  fluctuations  in  con- 
sumers' incomes.  If  all  the  money  that  flowed  into  the  banks  flowed 
out  again  at  a  constant  rate,  the  banks  could  be  omitted  from  the 
diagram,  because  they  would  neither  retard  nor  accelerate  the  flow  of 
money  into  the  consumers'  fund.  But  the  banks  must  be  taken  into 
account  because  they,  in  conjunction  with  their  customers,  cause 
changes  in  both  the  quantity  of  money  in  circulation  and  in  the  circuit 
time  of  money.  No  diagram  is  complete,  therefore,  which  ignores 
these  changes. 


470  William  T.  Foster  [September 

A  similar  defect  in  our  diagram  is  the  failure  to  make  allowance  for 
the  action  of  the  government  in  clianging  the  amount  of  money  in 
circulation.  Our  system  of  reservoirs  and  pipes  makes  no  provision 
for  putting  any  niore  money  into  the  stream  or  taking  any  money  out. 
All  the  money  flowing  into  the  public  treasury  at  the  bottom  of  the 
page  is  represented  as  coming  directly  or  indirectly  from  individual 
incomes.  A  complete  diagram,  however,  would  take  account  of  the 
fact  that  governments — not  infrequently,  as  the  world  has  recently 
observed — coin  money  or  print  money  or  otherwise  supply  the  defi-, 
ciencies  in  the  government  reservoir,  whenever  money  is  flowing  out 
through  expense  conduits  faster  than  it  is  flowing  in  through  taxation 
conduits. 

Factors  that  Alter  the  Circuit  Time  of  Money 

Our  next  question  is,  what  are  the  factors  which  retard  or  accelerate 
the  flow  of  money  from  consumer  back  to  consumer.''  This  question 
would  not  concern  us  if  money  actually  flowed  through  the  channels 
of  connnerce  as  steadily  as  in  our  diagram.  Here  we  have  pictured 
all  the  pipes  as  unobstructed,  free  from  leaks,  and  unvarying  in  size. 
If  the  circuit  flow  of  money  were  such,  day  in  and  day  out,  that  we 
could  accurately  represent  it  by  means  of  such  a  simple  and  static 
])icture,  and  if  the  flow  of  goods  were  equally  steady,  industry  would 
be  perfectly  stable.  There  would  be  no  business  cycles.  But  money 
never  does  flow  tli rough  tlie  arteries  of  trade  as  steadily  as  this.  The 
rate  of  flow  changes  from  time  to  time,  often  so  slowly  that  the 
ordinary  observer  notices  no  change  at  all;  sometimes  so  rapidly 
that  nearly  everybody  is  aware  that  something  has  happened,  tliough 
few  know  that  it  has  happened  to  money,  and  fewer  still  know 
exactly  what  it  is  that  has  liappened  to  money.  Furthermore,  varia- 
tions in  the  rate  of  flow  come  more  ra])idly  in  some  parts  of  the 
circuit  than  in  others.  These  facts  might  be  suggested  by  means  of 
gate-valves  in  all  the  ])ipes,  subject  to  the  control  of  individuals. 
Nothing  but  a  motion  })icture,  however,  could  show  all  these  nmlti- 
farious  and  kal(.'i(l().sc()j)ic  changes.  Our  simple  diagram  can  help 
us  only  in  a  general  way  to  visualize  the  major  movements.  Not  until 
we  consider  in  what  s])eciflc  respects  this  diagram  fails  to  depict  what 
actually  happens  to  momy  during  the  circuit  are  we  likely  to  account 
for  business  instability. 

As  a  means  of  suggesting  ])rofltal)lc'  Hc^lds  for  research  in  coiniection 
with  the  eiicuit  tinu-  of  money,  wc  may  emunerate  some  of  the  causes 
that  accelerate'  and  soiiu'  of  the  causes  that  retard  the  circuit  flow. 
P'or  the  j)urposi's  of  this  numu'ration,  we  shall  assume,  first,  that  the 
total  money  in  circulation  nniains  the  same  and,  second,  that  the 
eil't'ct  of  each  cause'  is  not  oll'st't  by  the  opci'ation  of  other  causes. 


1922]  The  Circuit  Flow  of  Moneij  471 

The  circuit  time  of  money  is  ordinarily  decreased — that  is  to  say, 
money  moves  around  the  circuit  faster — under  the  following  conditions : 

( 1 )  When  there  is  an  increase  in  the  total  amount  paid  as  wages ; 
since  wage-earners  spend  a  larger  proportion  of  their  money  for  goods 
than  do  other  groups  of  consumers. 

(2)  When  taxes  are  decreased;  since  ordinarily  money  paid  in 
taxes  comes  from  the  consumers'  fund,  but  finds  its  way  back  slowly. 

(3)  When  there  is  a  general  belief  that  prices  are  about  to  rise; 
for  then  it  appears  that  the  quicker  we  spend  our  money,  the  more 
we  get  for  it.  Consequently,  we  carry  smaller  average  cash  balances, 
and  spend  a  larger  proportion  of  our  money  for  goods. 

(4)  When  there  is  general  expectation  of  higher  wages  and  higher 
profits ;  for  at  such  times  people  spend  money  in  consumption  more 
quickly  and  more  freely. 

(5)  When  people  save  less  than  usual;  since  thrifty  people  usually 
have  on  hand  some  money,  intended  for  their  savings  banks,  which  they 
have  not  yet  deposited.  As  the  total  savings  of  the  country  decrease, 
there  is  a  corresponding  decrease  in  this  money  waiting  to  be  invested. 

(6)  When  there  is  an  increase  in  the  amount  of  money  borrowed 
by  consumers  for  use  in  consumption. 

(7)  When  a  larger  proportion  of  exchanges  are  made  by  means 
of  bank  checks ;  since  consumers  who  pay  their  bills  by  check  are 
likely  to  make  most  of  their  payments  very  soon  after  most  of  their 
income  is  received,  usually  on  the  first  few  days  of  the  month,  and  there 
is  therefore  less  need  for  keeping  money  on  hand.  Whereas  people 
who  pay  all  their  bills  with  currency  usually  distribute  their  payments 
over  longer  periods  of  time;  and,  in  order  to  do  so,  tliey  carry  larger 
average  daily  cash  balances  in  proportion  to  their  expenditures. 

(8)  When  pay  days  come  more  frequently.  As  a  rule,  those  who 
sell  their  services  or  lend  their  money  collect  their  pay  at  fixed  intervals 
of  time ;  and,  as  a  rule,  what  they  receive  on  one  pay  day  they  spend 
before  the  next  pay  day.  For  the  most  part,  wages  that  are  received 
weekly  are  spent  weekly ;  salaries  that  are  received  monthly  are  spent 
monthly ;  rents  and  dividends  that  are  received  quarterly  are  spent 
quarterly.  All  this  in  turn  afl'ects  the  receipts  and,  therefore,  the 
expenditures  of  those  who  sell  goods.  Therefore,  more  frequent  pay- 
ments of  wages,  salaries,  or  dividends  mean  more  rapid  circulation  of 
money  from  use  in  consumption  back  to  use  in  consumption. 

(9)  When  goods  pass  through  fewer  hands  on  tlie  way  to  the 
consumer;  because  of  the  elimination  of  some  of  tlie  middlemen,  for 
example,  through  the  vertical  integration  of  industry. 

(10)  When  there  is  a  decrease  in  the  amount  of  money  used  to 
transfer  real  estate,  stocks,  bonds,  etc. ;  since  money,  while  in  use  for 
such  purposes,  is  not  used  in  consiunption. 


472  William  T.  Foster  [September 

(11)  When  the  volume  of  undivided  profits  hitherto  carried  in  the 
form  of  money  is  decreased. 

Under  all  these  conditions,  ordinarily,  the  circuit  flow  of  money  is 
accelerated:  under  the  opposite  conditions,  it  is  retarded. 

The  influence  of  most  of  these  factors  on  the  velocity  of  money 
has  been  considered  by  various  writers,  notably  by  Professor  Irving 
Fisher,  in  The  Purchasing  Power  of  Money.  But  changes  in  these 
factors  do  not  affect  velocity  and  circuit  velocity  in  the  same  degree 
or  even,  in  all  cases,  in  the  same  direction.  How  important  these 
differences  in  degree  and  in  direction  may  be,  as  factors  in  the  price 
level  and  the  state  of  business  activity,  we  cannot  tell  without  addi- 
tional research.  The  last  tlirec,  at  least,  of  the  conditions  enumerated 
above  appear  to  merit  much  further  study .^ 

But  throughout  this  enumeration  we  have  assumed  that  the  total 
volume  of  money  in  circulation  remains  the  same;  whereas  we  are  well 
aware  of  the  fact  that  the  volume  does  not  remain  exactly  the  same 
for  any  two  days,  and  that,  at  times,  the  volume  changes  rapidly. 
To  take  this  fact  into  account,  however,  we  have  only  to  change  our 
conclusions  slightly.  Instead  of  saying,  for  example,  that  money  flows 
faster  when  there  is  an  increase  in  the  total  amount  paid  as  wages,  we 
must  say  "when  there  is  an  increase  in  the  proportion  disbursed  as 
wages  of  the  total  volume  in  circulation."  Similarly,  we  must  make 
some  of  our  other  statements  relative  rather  than  absolute. 

We  cannot  dismiss  so  easily  our  assumption  that  the  effect  of  each 
cause  is  not  offset  by  other  causes.  We  are  not  at  all  sure,  for  in- 
stance, of  the  exact  effect  of  increased  taxes  on  undivided  profits,  or  on 
wages,  or  on  stock  exchange  transactions.  We  do  know  that  the 
nature  of  the  taxes  will  make  a  vast  difference,  and  that  we  are  not  pre- 
pared fully  to  explain  business  fluctuations,  or  thorough]}^  to  under- 
stand national  monetary  policies,  until  we  have  the  aid  of  further  re- 
search concerning  the  effects  of  various  forms  of  taxation,  under 
various  conditions,  on  the  circuit  time  of  money.  We  need  further 
research,  as  well,  concerning  fluctuations  in  the  daily  balances  of  indi- 
viduals in  pocket  and  in  bank.  Before  we  can  determine  the  influence 
of  these  fluctuations  at  different  stages  of  the  business  cycle,  we  must 
correlate  them  with  fluctuations  in  wages,  prices,  unemployment,  and 
volume  of  trade.  We  must  also  find  the  correlations  among  other 
factors  that  influence  the  circuit  flow  of  money.  One  conclusion,  how- 
ever, we  can  safely  draw  without  further  investigation:  variations  in 
the  factors  enumerated  above  are  to  sucli  a  large  extent  independent 
of  each  other  that  there  is  virtually  no  chance  that  these  variations 

'This  question  and  most  of  the  others  that  are  raised  in  this  paper  are  further 
considered  in  Nonii)  in  the  World's  Work,  a  volume  now  in  press,  of  which  "The 
Circuit  Flow  of  Money"  is  one  chapter. 


1922]  The  Circuit  Floxc  of  Money  473 

would    counterbalance.     The    circuit    time    of    money    is    constantly 
changing. 

Conclusions 

In  order  to  forecast  business  fluctuations,  or  even  to  explain  those 
that  have  alread}^  occurred,  we  should  know  more  than  we  now  know 
about  conditions  that  determine  fluctuations  in  the  amount  of  money 
spent  in  consumption,  including  factors  that  alter  the  circuit  time 
of  money.  How  little  we  actually  know  is  shown  by  the  amazement 
among  men  generally  over  the  way  in  which  retail  sales  were  sustained 
during  the  depression  of  1921.  Business  as  a  whole  was  totally  un- 
prepared for  the  efl'ective  consumers'  demand  that  continued  after 
the  slump  in  wholesale  markets.  Yet  nothing  magical  happened. 
Every  dollar  spent  by  consumers  came  from  somewhere,  went  some- 
where, and  left  a  record  of  some  sort,  nearly  every  time  it  was  spent. 
These  records,  it  is  true,  are  not  all  that  they  should  be.  Measures 
of  the  flow  of  money  through  the  various  channels  are  not  as  compre- 
hensive, or  as  accurate,  or  as  detailed,  or  as  readily  available  as  we 
should  make  them.  Yet  even  such  records  as  we  now  have  for  1921,  if 
assembled,  correlated,  interpreted,  and  tested  for  error,  by  approved 
statistical  methods,  would  undoubtedly  go  far  toward  explaining  what 
appears  to  be  a  mysterious  persistence  of  consumers'  demand.  Even 
without  such  records  for  1921,  the  consumers'  demand  for  that  year 
might  not  have  seemed  at  all  mysterious,  if  similar  records  of  previous 
business  cycles,  similarly  interpreted,  had  been  available  and  generally 
understood  by  leaders  in  commerce  and  finance.  For  it  is  probable 
that  the  various  forces  that  determined  the  volume  of  daily  sales  in 
1921  operated  in  about  the  same  way,  in  varying  and  measurable  ex- 
tents, as  in  previous  periods  of  depression.  It  is  possible,  further- 
more, that  had  we  known,  in  the  years  following  the  World  War,  as 
much  as  we  might  readily  have  known  about  the  circuit  flow  of  money 
in  previous  years,  in  relation  to  the  flow  of  consumers'  goods,  there 
would  have  been  neither  the  extreme  business  expansion  of  1919  nor 
the  disastrous  contraction  that  followed.  For  the  major  causes  of 
the  expansion  and  the  contraction  were  monetary  and  subject  to  human 
control  in  a  far  greater  degree  than  has  hitherto  been  deemed  possible. 

William  T.  Fostee. 


REVIEWS  AND  NEW  BOOKS 
General  Works,  Theory  and  Its  History 

Principles  of  Economics.  By  Frank  W.  Taussig.  Volume  II.  Third 
edition  revised.  (New  York:  The  Macmillan  Company.  1921. 
Pp.  xix,  576.) 

This  is  a  tlioroughgoing  revision  of  this  well-known  Avork.  The 
chapter  on  The  General  Property  Tax  has  been  omitted.  Account  has 
been  taken  of  recent  publications  and  legislation.  For  example,  the 
general  conclusions  of  the  study  on  Income  in  the  United  States  by  the 
National  Bureau  of  Economic  Research  have  been  included  in  the 
chapter  on  Inequality  and  Its  Causes  and  a  section  has  been  added 
giving  the  essential  features  of  the  Transportation  act  of  1920. 

Those  familiar  with  the  earlier  editions  will  find  the  fundamental 
theories  unchanged  but  will  note  increased  emphasis  on  the  facts  and 
consequences  of  inequality  and  a  clearer  expression  of  the  spirit  of 
social  sympathy.  This  is  well  illustrated  by  the  discussion  in  the  newly 
added  chapter,  "The  Wages  System.  Strikes  and  the  Right  to  Strike." 
The  wages  system  necessarily  restricts  the  liberty  of  "the  individual 
workman."  "He  must  obey  orders."  This  involves  drawbacks  of  two 
kinds,  material  and  spiritual.  The  first  means  slackness  of  effort. 
The  interest  of  the  workman  in  the  output  is  remote.  The  results 
must  be  attained  through  the  "drive"  method.  The  spiritual  loss 
has  received  more  attention  of  late  years.  "We  are  slowly  becoming 
awake  to  the  plain  and  simple  fact  that  the  happiness  of  all  men  is 
immensely  promoted  if  their  daily  work  be  made  interesting  and  pleasur- 
able." 

As  to  the  right  to  strike,  emphasis  is  laid  on  the  power  of  discharge 
and  its  terrible  consequences  to  the  workman.  "No  general  state- 
ments can  picture  adequately  the  ordinary  states  of  feeling:  constant 
uneasiness,  easily  intensified  to  terror,  on  the  part  of  the  men;  con- 
sciousness of  power  and  determination  to  hold  power  among  the  so- 
called  masters"  (p.  290).  And  again:  "If  the  public  wishes  to  secure 
the  gains  which  accrue  from  private  property  and  private  manage- 
ment, it  must  accept  tlie  offsets  which  arise  from  strife  and  stoppage. 
To  restrict  the  right  to  strike  and  leave  absolute  control  of  employment 
to  private  managers  is  to  give  strength  to  one  side  and  take  it  away 
from  the  other"  (p.  293).  It  is  only  when  this  power  of  discharge 
has  been  materially  modified  and  the  workman  assured  of  a  fair  hearing 
of  grievances  that  the  public  "is  entitled  to  protect  itself  against 
efforts  to  stay  the  operation  of  vital  industries."  Too  much  is  not  to 
be  expected  from  the  device  of  employee  representation.  The  ground 
is  not  yet  prepared  for  its  full  effects,  for  the  indispensable  prerequisite 


1922]  General  Works,  Theory  and  Its  History  475 

of  "a  real  spirit  of  meeting  the  men  on  their  own  ground  and  with  a 
frank  recognition  of  their  own  methods  of  joining  together  for  their 
own  ends"  has  not  yet  been  accepted  by  the  employers.  Nor  have 
workmen  as  a  class  developed  to  the  stature  required  for  real  sharing 
in  problems  of  management.  This  is  evidenced  by  the  extraordinary 
rarity  of  the  success  of  plans  for  cooperative  production.  Employee 
representation  will  not  prove  "a  cure-all  for  the  social  ills,  but  of 
promise  toward  smoothing  the  working  of  the  industrial  system  as  now 
established"  (p.  297). 

C.  E.  Persons. 
Boston  University. 

Bestimmungsgriinde  des  Preises.     By  Oskar  Englander.      (Reichen- 
bergrGebruder  Stiepel.      1921.     Pp.300.      52  K.) 

As  experienced  readers  know,  the  date  of  publication  of  a  book 
does  not  always  tell  us  what  period  of  thought  it  represents.  The 
two  may  go  far  apart.  Englander's  volume  is  an  illustration  of  this 
point.  Though  published  last  year,  it  expounds  in  the  main  an  econo- 
mic subjectivism  that  originated  a  generation  or  more  ago.  We  find 
again  a  qualitative  price  analysis  within  a  system  of  catallactics,  of 
statics,  of  frictionless  competition  which  permits  only  one  price  for 
each  article  on  the  market.  There  is  Menger's  classification  of  goods 
into  those  of  first,  second,  and  third  order;  the  distinction  between 
reproducible  and  non-reproducible  goods ;  and  the  imaginary  case  of 
first  one  buyer,  then  several-  buyers,  and  finally  of  buyers  and  sellers 
bidding  against  one  another.  Costs  are  shown  to  be  either  expenses 
(which  begs  the  question)  or  else  other  facts  altogether  out  of  place 
in  catallactics.  Wants  are  contrasted  with  purchasing  power,  which 
as  usual  is  assumed  to  be  first  equal,  then  unequal  for  different  buyers. 
Thus  price  is  determined  at  bottom  by  demand  alone,  i.  e.,  by  personal 
valuations  in  conjunction  with  purchasing  power,  no  attempt  being 
made  to  relate  these  facts  quantitatively  to  supply. 

Now,  all  this  is  of  course  an  old  story  and  cannot  be  the  raison 
d'etre  for  the  book  at  this  time.  If  therefore  it  is  to  be  judged  aside 
from  its  excellent,  but  quite  conventional,  presentation  of  subjectivistic 
economics,  it  must  be  on  the  score  of  certain  minor  corrections.  Eng- 
lander, that  is  to  say,  follows  on  the  one  hand  Wieser  and  Zucker- 
kandl — which  accounts  for  his  mode  of  approach  to  the  problem.  But 
he  has  also  borrowed  from  F.  Brentano  and  O.  Kraus,  rejecting  hedon- 
istic sensationalism.  Wants  and  gratification  are  discussed  without 
reference  to  morality  or  the  supremacy  of  an  "economic  man."  What- 
ever the  processes  of  valuation  (and  Englander  apparently  is  not  influ- 
enced by  the  most  recent  psychological  and  philosophical  developments 
in  this  field)  the  springs  of  human  action  are  not  considered  a  subject 


476  Reviews  and  New  Books  [September 

for  economists  as  such.  In  the  second  place,  the  decisive  role  of  the 
margin  in  price  determination  is  flatly  denied.  Psychic  margins, 
though  real  and  inevitably  connected  with  orders  of  preference,  are  not 
truly  reflected  in  exchange  rates.  We  have  marginism  without  mar- 
gins !  The  existence  of  consumers'  rents  is  cited  as  proof  of  intra- 
marginal  prices ;  while  unequal  rates  of  diminishing  utility  for  difl'erent 
goods  are  held  to  prevent  an  equalization  of  the  margins  of  gratifica- 
tion. In  the  third  place,  the  odious  question  of  the  relation  between 
consumption  and  production  goods  is  got  rid  of  by  declaring  for  a 
non-causal  interdependence  of  the  two  groups  of  goods. 

Whether  this  sort  of  compromise  between  the  old  subjectivism  and  a 
strictly  objective,  quantitative  analysis  of  economic  data  is  worth 
while  need  not  here  be  debated.  To  the  reviewer  the  admissions  of 
Englander  that  valuations  per  se  are  non-economic  facts,  that  income 
profoundly  modifies  the  measurement  of  utilities,  and  that  psychic 
events  are  incommensurable,  seem  most  damaging.  It  is  right  however 
to  detach  viewpoints  from  quality  of  workmanship.  And  so  it  should 
be  repeated  that  of  its  kind  Englander's  is  a  meritorious  piece  of  work. 
Students  of  the  rise  and  fall  of  marginism  may  find  it  both  instructive 
and  interesting. 

O.  Feed  Boucke. 

NEW   BOOKS 

Briggs^  M.     a  textbook  of  economics.      (London:  Clive.      1921.     Pp.  627.) 

Dow,  G.  S.     Society  and  its  problems.     An  introduction  to  the  principles 
of  sociology.      (New  York:  Crowell.      1922.      Pp.  xiv,  594.     $2.75.) 

GmE,  C.     Premieres  notions  d'economie  politique.      (Paris:  Albin  Michel. 
Pp.  186.) 

This  little  masterpiece  is  the  first  of  a  petite  bibliotheque  de  culture 
generale  announced  by  the  publisher.  Its  literary  charm,  its  gentle  humor 
and  its  appeal  to  the  imagination  make  it  almost  unique  among  economic 
publications.  Not  at  all  the  usual  ])rinier  of  economic  theory,  it  is  rather 
a  survey  of  the  evolution  of  our  principal  economic  institutions.  After 
pointing  out  some  of  the  indications  of  economic  life  in  the  behavior  of 
animals,  it  presents  a  series  of  rapid  sketches  of  commerce,  money,  proper- 
ty and  its  inlicritance,  land  leases,  loans  at  interest,  the  wages  and  profits 
system,  competition  and  cooperation.  It  was  apparently  written  during 
the  war,  altliough  it  is  entirely  free  from  the  rancors  of  that  unfortunate 
time.  In  view  of  the  government's  enormous  borrowing  Professor  Gide 
predicts  tliat  everj^one  will  become  a  rentier  but  that  few  if  any  will  be 
able  to  live  on  their  rentes.  One  wonders  how  many  liave  already  been 
driven  by  want  to  sell  the  rentes  they  bought  during  the  war.  In  the 
last  chapter  the  author  indicates  the  unsatisfactory  results  of  competition 
and  declares  his  faith  in  cooperation  and  solidaritv. 

G.  A.  K. 

GoETSCHEL,  E.      Gut,  Geld  mid  Kopital.      Ein  Beitrag  zur  Bohm-Bawerk'- 
schcn  Theorie.      (Bern:  Paul  Ilaupt.      1921.      Pp.  156.      17  M.) 


1922]  General  Works,  Theory  and  Its  History  477 

Haney,  L.  H,  History  of  economic  thought;  a  critical  account  of  the 
origin  and  development  of  the  economic  theories  of  the  leading  thinkers  in 
the  leading  nations.  Revised  edition.  (New  York:  Macmillan.  1921. 
Pp.  xix,  677.     $3.50.) 

Henderson,  H.  D.  Supply  and  demand.  (New  York:  Harcourt,  Brace  & 
Co.      1922.     Pp.  X,  181.) 

Magee,  J.  D.  Introduction  to  economic  problems.  (New  York:  Scribner's. 
1922.      Pp.  ix,  363.) 

Marx,  K.  Theorien  iiber  den  Mehrxoert.  Fourth  edition.  (Berlin:  Karl 
Kautsky.      1922.      80  M.) 

VON  Philippovich,  E.  and  Somary,  F.  Grundriss  der  politischen  Oekon- 
omie.  Vol.  II,  Volkswirtschaftspolitik.  Part  II.  Tenth  edition  revised. 
(Tubingen:  Paul  Siebeck.      1921.      Pp.343.) 

This  is  a  revision  by  Dr.  Somary  of  a  part  of  the  late  Professor  Philip- 
povich's  encyclopaedic  work,  bringing  it  up  to  date.  It  covers  the  topics 
of  transportation,  commerce,  banking  and  speculation,  and  Einkommens- 
politik  (including  under  that  title  the  problem  of  the  unemployed,  work- 
ingmen's  insurance,  poor  relief,  methods  of  industrial  remuneration,  wages 
boards  and  housing).  The  section  of  transportation  strikes  the  reviewer 
as  especially  well  done,  although  the  two  pages  of  fine  type  on  American 
railway  experience  contain  several  errors,  e.  g.,  that  there  was  no  stock 
exchange  speculation  in  railway  securities  before  1898.  The  section 
on  banking  seems  too  condensed  to  be  intelligible  to  the  beginner,  and 
treats  some  controversial  matters  too  briefly.  Einkommenspolitik  covers 
somewhat  over  one  half  of  the  book.  Dr.  Somary  states  that  the  revision 
emphasizes  more  than  the  earlier  editions  the  dependence  of  social  policy 
on  productive  power.  Menaced  by  the  prospective  bankruptcy  of  im- 
portant central  and  east  European  governments,  Sozialpolitik  can  be 
continued  at  all  only  in  so  far  as  it  does  not  diminish  the  national  divi- 
dend. 

G.  A.  K. 

Schelle,  G.  Oeuvres  de  Turgot  et  documents  le  concernant.  With  biog- 
raphy and  notes.     Vol.  IV.      (Paris:  Alcan.      1922.     40  fr.) 

ScHULTZ,  E.  Die  Zerriittung  der  Weltwirtschaft.  (Stuttgart:  W.  Kohl- 
hammer.      1922.      75  M.) 

Southerns,  L.  Physical  economics:  an  essay  on  fundamental  principles. 
(London:  Labour  Pub.  Co.      1921.      Pp.  67.     2s.  6d.) 

Turnor,  C.      The  land  and  its  problems.      (London:  Methuen.      1921.     Pp. 

254.) 
Von  Koch,  F.  M.      On  the  theories  of  free  trade  and  protection.      (London: 

King.      1922.      Pp.  34.      Is.) 

Weber,  M.  Grundriss  der  Sozialokonomik.  III.  Abt. :  Wirtschaft  u. 
Gesellschaft.  II.  Typen  der  V ergemeinschaftung  und  V ergesellschaftung. 
2.  Tell.      (Tubingen:  Mohr.      1921.      Pp.  iii,  181-356.      30  M.) 


478  Reviews  and  New  Books  [September 

Economic  History  and  Geography 

International  Finance  and  Its  Reorganization.  By  Elisha  M.  Fried- 
man. (New  York :  E.  P.  Button  &  Company/  1921.  Pp.  xli,  702. 
$7.00.) 

In  this  financial  history  of  the  World  War,  as  it  might  properly  be 
termed,  the  author  has  admirably  accomplished  his  purpose  of  pre- 
senting a  precise  account  of  the  financial  changes  in  Europe  during 
and  since  the  war,  together  with  a  summary  of  the  various  proposals 
for  financial  reconstruction.  The  book  is  divided  into  two  parts,  sec- 
tion A  covering  the  effects  of  the  war,  and  section  B,  the  financial 
reorganization. 

In  section  A  such  subjects  as  public  debt  and  taxation,  currency 
and  credit,  and  foreign  exchange  are  discussed.  Although  nothing 
particularly  new  has  been  added,  the  author  has  unquestionably  ren- 
dered a  service  by  the  able  manner  in  which  he  has  approached  the  loan 
and  taxation  theories  of  war  finance.  Good  judgment  has  been  shown 
in  exposing  at  the  very  beginning  the  fallacy  contained  in  the  idea 
that  war  burdens  can  be  shifted  to  future  generations  by  means  of 
loans.  The  author  has  also  done  much  to  clear  the  atmosphere  of 
some  of  the  popular  misconceptions  regarding  the  external  and  internal 
debts  of  nations.  The  following  quotation  from  page  22  summarizes 
his  views  in  this  regard : 

A  foreign  debt  requires  annual  interest  payments  which  may  be  effected 
by  an  exportation  of  goods,  and  to  that  extent  the  debt  represents  a  diminu- 
tion of  the  real  wealth  of  a  country.  But  an  internal  debt  is  a  paper  debt; 
it  does  not  diminish  the  wealth  of  the  nation  as  a  whole.  Repudiation  of 
the  internal  debt,  a  capital  levy,  or  a  scaling  down  of  values,  would  leave 
the  nation's  wealth  unaffected  although  it  might  disturb  the  economic  condi- 
tion of  tlie  country.  A  pajier  debt,  held  internally,  never  ruined  a  country. 
During  the  Revolution,  France  repeatedly  repudiated  her  debt,  and  yet  at 
the  end  of  the  period  was  undoubtedly  richer  than  at  the  beginning. 

In  section  B  the  author  discusses  the  factors  in  the  financial  reorgan- 
ization, taking  up  the  capital  lev}',  national  bankruptcy',  inter-allied 
debts,  the  German  indemnity,  international  loans,  and  New  York  and 
I^ondon  as  financial  centers.  The  author  devotes  considerable  space 
to  a  capital  levy.  He  approaches  this  problem  from  the  same  angle 
as  that  taken  in  discussing  the  loan  method  of  war  finance.  He  cour- 
ageously attacks  the  problem  from  the  social  point  of  view  and  as  a 
consequence  simplifies  it  and  at  the  same  time  clears  away  many  of  the 
popular  misconceptions  surrounding  it.  In  substance,  he  shows  that 
through  a  capital  levy  society  merely  acknowledges  that  individual 
assets  which  are  social  liabilities  serve  no  beneficial  purposes  when  they 
exist  in  exceptionally  large  volume.  He  points  out  that  a  recognition 
of  their  true   status   through   an   attempt   to   apportion   the   existing 


1922]  Economic  History  and  Geography  479 

burden  on  some  equitable  basis  is  not  necessarily  a  revolutionary  step 
nor  a  social  burden.  It  readjusts  an  existing  burden  but  adds  no 
new  one.  The  inter-allied  debt  controversy  is  impartially  presented 
with  a  comprehensive  review  of  the  various  opinions  expressed  on  this 
subject  by  all  of  the  principal  countries  involved. 

In  appraising  New  York  and  London  as  financial  centers,  the  author 
is  of  the  opinion  that  while  New  York  will  not  replace  London  as  the 
world's  financial  center,  it  will  assume  a  position  of  increasing  im- 
portance in  future  international  financial  operations.  Although  London 
sufTered  as  a  banking  center  because  of  the  war,  New  York  cannot 
supplant  it  because  it  lacks  the  machinery  and  personnel  necessary 
really  to  serve  as  the  world's  banking  center.  Lentil  New  York  can 
develop  a  wide  market  for  both  international  acceptances  and  foreign 
securities,  it  has  little  chance  to  compete  effectively  with  London. 

This  book  constitutes  a  real  contribution  to  current  economic  dis- 
cussion. The  author  has  gathered  together  and  made  a  careful  selec- 
tion of  the  huge  mass  of  material  that  has  been  written  upon  the  subject 
of  national  and  international  finance  in  recent  years.  Through  orderly 
and  logical  arrangement,  the  most  important  material  has  been  pre- 
sented in  an  interesting  manner.  As  a  source-book  and  history  of  the 
financial  ills  of  the  world  growing  out  of  the  war,  it  is  undoubtedly  the 
most  comprehensive  work  that  has  yet  appeared.  The  book  will  prove 
serviceable  not  only  to  the  student  but  to  the  layman. 

W.  F.  Gephart. 

America  and  the  Balance  Sheet  of  Europe.  By  Johx  Foster  Bass 
and  Harold  Glexx  Moultox.  (New  York:  The  Ronald  Press 
Company.  1921.  Pp.  361.  $3.00.) 
"The  situation  as  it  really  is,"  "The  reparations  dilemma,"  and 
"Remedies — proposed  and  real"  are  the  titles  of  the  three  parts  of 
this  book.  In  part  I  are  discussed  depreciated  exchange,  national 
debts  and  budgets,  and  the  European  and  German  monetary  situation. 
The  fundamental  principles  involved  in  such  questions  have  not  changed 
since  the  book  was  written,  and  the  authors'  discussions  of  the  out- 
standing features  are  as  pertinent  now  as  when  the  book  was  written. 
Part  II,  on  the  reparations  dilemma,  considers  Germany's  ability  to 
pay  and  the  amount  that  the  Allies  are  willing  to  receive.  The  chief 
value  of  the  authors'  discussion  of  this  question  is  the  manner  in  which 
they  show  the  political  and  economic  aspects  of  the  reparations  ques- 
tion, much  of  which  the  Europeans  themselves  either  do  not  under- 
stand or  are  not  willing  to  recognize  as  facts  in  the  situation.  In  part 
III  the  authors  describe  the  many  plans  which  have  been  advanced  on 
the  assumption  that  Europe  could  be  restored  at  once  to  normal  eco- 


480  Reviezos  and  New  Books  [September 

nomic  wealth.  They  very  properly  view  all  such  efforts  as  vain.  Since  the 
book  has  appeared,  one  of  the  most  promising  plans,  "the  ter  Meulen 
Plan,"  has  been  abandoned  and  many  other  visionary  plans  have  been 
long  since  laid  aside. 

It  is  in  the  concluding  chapter,  under  the  heading,  "The  way  out," 
that  the  authors  abandon  their  well-performed  task  of  describing  the 
chief  features  in  the  European  problem,  and  proceed  in  this  last  chapter 
to  decide  what  are  the  basic  requirements  for  the  restoration  of  Europe 
to  normal  industrial  and  financial  existence.  In  their  opinion,  there 
are  four  basic  considerations.  First,  the  increase  of  domestic  prod- 
ucts ;  second,  the  balancing  of  international  trade ;  third,  the  restora- 
tion of  the  gold  standard ;  and  fourth,  the  balancing  of  international 
budgets. 

Under  the  topic  of  balancing  international  trade,  the  subject  of 
canceling  debts  as  well  as  abolishing  trade  barriers  is  taken  up,  and 
a  better  understanding  of  the  fundamentals  of  international  trade 
is  urged.  This  is  doubtless  all  very  true,  but  there  is  as  little  promise 
now  as  there  has  been  for  the  past  century  that  the  rank  and  file  of 
people,  either  in  this  country  or  in  Europe,  will  abandon  their  national- 
istic beliefs  regarding  the  importance  of  carefully  restricting  and 
regulating  trade  so  that  their  own  country  will  receive  the  chief  benefit. 
Most  of  us  are  yet  mercantilists  in  our  thinking  on  international  trade. 

In  regard  to  maintaining  the  gold  standard,  the  authors  point  out 
the  necessity  of  a  redistribution  of  the  gold  supply  of  the  world,  and 
describe  the  ways  in  which  this  may  be  brought  about.  Throughout 
the  book  there  is  an  emphasis  upon  the  necessity  of  a  campaign  of 
education,  especially  for  the  people  of  the  United  States,  with  a  view 
to  securing  a  more  correct  comprehension  of  the  interest  of  the  United 
States  in  international  questions  and  an  understanding  of  how  or  why 
our  own  industrial  prosperity  is  dependent  upon  a  more  internationally 
minded  viewpoint. 

The  task  of  reviewing  a  book  of  this  character  is  comparatively 
simple.  The  authors  evidently  have  set  as  their  task  a  description 
of  the  more  important  phases  of  the  European  industrial  and  financial 
problems  as  they  are  related  to  the  United  States.  Not  only  has  there 
been  a  most  excellent  selection  of  material,  discussed  in  very  brief 
compass,  but,  what  is  of  equal  importance,  the  volume  is  written  in  an 
interesting  manner.  It  has  had  a  large  sale  since  its  publication,  as  it 
deserves,  strictly  on  its  merits  as  an  interesting  description  of  the 
important  European  economic  problems. 

W.  F.  Gephart. 

Washington  University. 


1922]  Economic  History  and  Geography  481 

NEW    BOOKS 

Adler,  C.  Jacob  Henry  Schiff,  a  biographical  sketch.  (New  York: 
American  Jewish  Committee.      1921.     Pp.  69.) 

Anderson,  B.  M.  Germany  and  Russia,  a  chapter  of  uncertainties.  Chase 
Economic  Bull.,  vol.  II,  no.  2.  (New  York:  Chase  National  Bank.  1922. 
Pp.  40.) 

Bachi,  R.  L'ltalia  economica  nel  1920.  Annuario  delta  vita  comvierciale, 
industriale,  agraria,  bancaria,  financiaria  e  della  politica  economica.  (Citta 

.    di  Castello:  Casa  Tip.-Ed.  S.  Lapi.      1921.      Pp.  xii,  512.) 

This  volume,  the  twelfth  in  its  series,  deals  intensively  with  economic 
conditions  and  changes  in  1920,  and  broadly  with  those  of  1921.  Part  I 
has  to  do  with  conditions,  part  II  with  control,  organization,  policy. 
Trade,  prices,  banking  and  the  other  usual  economic  categories  are  prom- 
inent, but  in  part  II  special  topics  like  municipal  economic  activities, 
cooperation  and  housing  also  appear.  One  appendix  considers  the  devel- 
opments of  1921;  another,  considerably  longer,  the  work  of  Professor 
Del  Vecchio,  deals  with  the  economic  crisis  which  overtook  Julian  Venetia, 
Fiume  and  Zara,  when,  after  the  war,  these  regions  were  detached  from 
their  old  contexts. 

R.    F.    FoERSTER. 

Barton,  R.  F.  Ifugao  economics.  Publications  in  American  archaeology 
and  ethnology,  vol.  XV,  no.  5.  (Berkeley:  University  of  California 
Press.      1922.     $1.) 

BiDou,  H.  and  others.  Les  consequences  de  la  Guerre.  (Paris:  Alcan 
1921.     Pp.  189.      7  fr.) 

This  is  a  collection  of  lectures  given  in  1919  by  eminent  public  men 
in  France  on  the  military,  financial,  and  economic  results  of  the  war. 
Although  much  has  happened  since  1919,  certain  basic  facts  and  national 
feelings  of  that  time  have  still  to  be  taken  into  account.  There  is  a  very 
interesting  lecture  on  the  French  view  of  the  Near  East  by  General 
Malleterre;  another  on  the  economic  consequences  of  the  war  by  M. 
Liesse ;  and  one  on  the  financial  consequences  by  M.  Guebhard.  The 
other  lectures  are  by  MM.  Bidou,  Tardieu,  and  Tessier. 

R.   R.   Whitehead. 

BoGARDUS,  E.  S.  A  history  of  social  thought.  (Los  Angeles:  University 
of  Southern  California  Press.      1922.      Pp.  510.     $3.50.) 

Bourdeaux,  J.  Tolstoi,  Lenine  et  la  Revolution  russe.  La  Bibliotheque 
d'Histoire  Contemporaine,  vol.  I.      (Paris:  Alcan.      1922.      8  fr.) 

Burger,  O.  Venezuela.  Ein  Fiihrer  durch  das  Land  und  seine  TVirt- 
schaft.  (Leipzig:  Dieterich'sche  Verlagsbuchhandlung.  1922.  Pp.  vii, 
272.     60  M.) 

Daskaljuk,  O.  W.  Die  Ukraine  als  Arbeitsfeld  filr  Deutsche  und  deut- 
sches  Kapital.      (Berlin:  Georg  Stilke.      1922.      Pp.80.      15  M.) 

Dingle,  E.,   editor.      The   netv  atlas   and   commercial   gazetteer   of   China. 

Compiled  by  the  Far  Eastern  Geographical  Establishment.      (New  York: 

Dutton.      1922.     $160.) 
Drahn,  E.      Friedrich  Engels.     Ein  Lebensbild  zu  seincm  100  Geburtstage. 

(Vienna:  Verlag  Arbeiter-Buchhandlung.      Pp.  51.) 


482  Reviews  and  New  Books  [September 

DuBOSCQj  A.  L'evolution  de  la  Chine,  politique  et  tendances  (1911-1921). 
(Paris:  Ed.  Bossard.     Pp.  190.      9  fr.) 

Earle,  E.  M.  An  outline  of  the  economic  development  of  the  United  States. 
(New  York:  Am.  Inst,  of  Banking,  15  W.  37th  St.      1921.      Pp.  44.  75c.) 

VON  Engeln,  O.  D.  Inheriting  the  earth,  or  the  geographical  factor  in 
national  development.  (New  York:  Macmillan.  1922.  Pp.  xvi,  379. 
$2.) 

FiSKE,  B.  A.  Invention,  the  master-key  to  progress.  (New  York:  Button. 
1921.      Pp.  ix,  356.     $4.) 

Gamble,  S.  D.  and  Burgess,  J.  S.  Peking,  a  social  survey,  conducted  under 
the  auspices  of  the  Princeton  University  Center  in  China  and  the  Peking 
Young  Men's  Christian  Association.  (New  York:  Doran.  1921.  Pp. 
638.     $5.) 

In  some  centuries  of  books  on  China  there  has  hitherto  been  not  one 
exhibiting  on  a  basis  of  intelligent,  statistical  inquiry  and  with  fair 
approach  to  comprehensiveness  the  facts  fundamental  to  Chinese  life, 
such  as  family  earnings  and  expenditure,  the  prevalence  of  disease,  rates 
of  marriage,  birth  and  death,  the  activity  of  government  as  it  affects  the 
moral  and  material  condition  of  the  masses.  The  greater  completeness 
and  exactness  of  the  present  work  has  resulted  partly  from  the  commend- 
able efforts  and  intelligence  of  a  small  number  of  foreigners,  but  it  is  also 
itself  a  product  of  the  profound  revolution  now  fairly  begun  under  the 
vigorous  stimulation  of  foreign  aggression  as  well  as  foreign  instruction 
and  destined  to  alter  the  whole  life  of  China.  The  foreigners  could  not 
have  done  this  work  without  the  cooperation  of  Chinese  awake  to  the 
value  of  such  an  inquiry.  The  book  is  full  of  suggestions  of  the  probable 
depth  and  scope  of  that  revolution,  as  it  has  begun  to  touch  the  penal 
system,  the  position  of  women,  the  ancient  literature,  the  monopoly  of 
the  gilds,  the  power  of  the  bureaucracy  now  threatened  by  the  mercantile 
class. 

The  opinion  that  poor  relief,  while  not  properly  organized,  is  tolerably 
sufficient  in  the  amount  of  money  available  (pp.  303-4)  will  surprise  those 
readers  who  have  been  taught  that  the  Chinese  are  indifferent  to  the 
sufferings  of  the  poor.  Another  opinion  common  among  foreigners,  that 
smallpox  is  not  a  serious  malady  among  Chinese,  is  set  aside  by  a  report 
that  in  1917  fifty-four  per  cent  of  such  cases  were  fatal.  The  vital  sta- 
tistics here  reported  are  admittedly  questionable,  though  their  apparent 
abnormality  may  be  due  to  the  unrepresentative  character  of  the  popula- 
tion of  the  capital.  In  1917  the  police  reports  indicated  a  birth  rate  of 
11.8  per  1000  persons,  32.6  per  1000  females,  51.1  per  1000  females  of 
16-50  years  of  age  (p.  31).  This  is  less  than  the  rate  in  European  as 
well  as  in  other  Asiatic  countries.  The  births  per  1000  females  are  less 
than  the  births  per  1000  persons  of  both  sexes  in  Japan,  India,  Ceylon, 
the  Philippines  and  Korea,  as  well  as  among  the  Chinese  in  Formosa 
and  in  the  Japanese  leased  territory  of  Kwantung — although  the  women 
in  Peking  above  thirty  seem  to  be  practically  all  married.  The  Peking 
death  rate  is  reported  (p.  116)  as  ranging  in  a  series  of  five  years  from 
18.8  to  25.8  per  1000.  These  ratios  are  not  far  from  those  officially 
reported  for  Japan  (20),  India  (28.7),  and  Korea  (18  or  19).  It  is 
evidentlv  improbable  that  the  death  rate  either  in  Peking  or  among  anj' 
of  the  other  oriental  populations  just  mentioned  should  have  been  even 


1922]  Economic  History  and  Geography  483 

for  one  year  about  equal  to  the  average  in  England  1891-1900  (18.2)  or 
that  the  Peking  maximum  for  five  years  should  have  been  less  than  26, 
which  is  not  far  from  the  average  of  Italy,  Bavaria  and  Saxony  in  the 
years  1891-1900  (24.2,  25.4  and  24  respectively),  and  it  seems  probable 
that  in  Peking  as  well  as  the  other  cases  the  returns  are  at  fault.  It  is 
one  of  the  merits  of  this  extremely  valuable  work  that  difficulties  of  this 
class  have  been  met  with  caution  and  discernment. 

A.  P.  Winston. 

Guest,  G.  An  introduction  to  English  rural  history.  (London:  Workers' 
Educational  Assoc.      1920.     Pp.  68.) 

Gregory,  W.  M.  and  Guitteau,  W.  B.  History  and  geography  of  Ohio. 
(Boston:  Ginn.      1922.      Pp.  vi,  282.) 

Hall,  H.  Classified  list  of  agrarian  surveys  in  the  Public  Record  Office. 
(London:  London  School  of  Economics.      1922.      Pp.  23.) 

Hauger,  a.  Zur  romischen  Landzvirtschaft  und  Haustierzucht.  (Han- 
over: Schaper.      1921.     29  M.) 

Heaton,  H.  Modern  economic  history.  With  special  reference  to  Aus- 
tralia, (Adelaide,  Australia:  Workers'  Educational  Assoc.  1921.  Pp. 
288.) 

Heitland,  W.  E.  Agricola:  a  study  of  agriculture  and  rustic  life  in  the 
Greco-Roman  world  from  the  point  of  view  of  labour.  (Cambridge,  Eng- 
land:  University  Press.      (New  York:   Macmillan.      1921.      Pp.   x,  492. 

47s.  6d.  $16.) 

Hersent,  G.  and  others.  L'outillage  economique  de  la  France.  (Paris: 
Alcan.      1921.      Pp.  237.      8  fr.) 

A  collection  of  lectures  on  the  resources  of  France:  M.  Colson  advocates 
a  more  rational  extension  of  the  railroad  system;  M.  Hersent  urges  the 
development  of  larger  docks ;  M.  Colson  writes  of  the  possibilities  of  the 
development  of  water  power  for  which  capital  is  at  present  lacking; 
M.  Barety  tells  of  Le  Tourisme  under  which  he  sums  up  all  those  attract- 
ions which  cause  such  a  large  number  of  American  dollars  to  be  spent  in 
France  that  they  form  a  substantial  item  helping  to  reestablish  a  better 
exchange;  M.  Metayer  tells  of  the  mineral  and  metallurgical  resources 
of  the  country. 

R.  R.  Whitehead. 

Jennings,  W.  W.  The  American  embargo,  1807-1809.  With  particular 
reference  to  its  effect  on  industry.  (Iowa  City:  University  of  Iowa. 
1921.      Pp.  242.     $1.50.) 

This  intensive  study  of  the  period  of  the  embargo  is  one  of  a  series 
in  the  University  of  Iowa  Studies  in  the  Social  Sciences  (vol.  VIII,  no.  1). 
Chapters  are  devoted  to  American  Commerce,  1798-1807,  Foreign  Re- 
strictions on  Commerce,  The  Embargo  in  Legislation,  Congressional  De- 
bate and  Diplomacy,  The  Economic  Effects  of  the  Embargo  on  the  War- 
rino-  Nations  with  Particular  Reference  to  England  and  Her  Colonies, 
Attitude  of  the  United  States  towards  the  Embargo,  Growing  Opposition 
to  the  Embargo;  also  chapters  on  the  effect  of  the  embargo  on  manu- 
factures, commerce  and  agriculture.  A  valuable  contribution  of  this 
work  is  the  special  study  made  of  the  economic  effects  of  this  legislation. 
The  author  draws  the  conclusions  which  many  writers  have  reached  with- 


484  Reviews  and  New  Books  [September 

out  investigation  that  "the  demand  for  American  manufactured  goods  in- 
creased, for,  with  the  curtailment  of  foreign  trade,  many  of  our  citizens 
had  to  buy  at  home  or  do  without."  Professor  Jennings'  research  shows 
that  the  effects  on  foreign  trade  were  most  disastrous.  Shipbuilding  de- 
clined; many  unemployed  marines  m.igrated  to  Canada  or  took  service 
under  a  foreign  flag;  and  those  who  remained  at  home  faced  unemploy- 
ment and  of  these  some  merely  "swelled  our  charity  or  prison  population." 
Farmers  likewise  suffered  greatly,  particularly  those  who  had  been  wont 
to  look  to  the  foreign  market  to  consume  a  part  of  their  surplus.  Prices 
of  many  of  the  staples  declined  greatly  during  this  period,  debts  of  the 
farmers  increased,  mortgaging  of  property  increased,  and  with  it  the 
inevitable  foreclosures.  The  author  has  drawn  abundantly  upon  the 
literature  of  the  time  to  prove  his  various  propositions.  The  volume  is 
well  documented;  it  is  provided  with  an  ample  bibliography  and  with  a 
very  good  index. 

Isaac  Lippincott, 

KiJHNERT,  H.  Entxoicklungsgeschiclite  der  IVirtschaft  in  Thiiringen.  Ein 
volkstiiinlich-soziologischer  Ueberblick.  Part  I.  (Jena:  Jenaer  Volks- 
buchhandlung.      1922.      Pp.  45.      10.80  M.) 

Lanier,  H.  W.  A  century  of  banking  in  New  York,  1822-1922.  (New 
York:  Doran.      1922.      Pp.  x,  335.     $5.) 

Lehfeldt,  R.  a.  The  national  resources  of  South  Africa.  (Johannesburg: 
University  of  Witwatersrand.  London:  Longmans,  Green  &  Co.  1922. 
Pp.  79.) 

LicHTNER,  O.  C.  The  history  of  business  depressions;  a  vivid  portrayal 
of  periods  of  economic  adversity  from  the  beginning  of  commerce  to  the 
present  time.  (New  York:  Northeastern  Press,  119  Nassau  St.  1922. 
Pp.  454.      $4.) 

Mackail,  J.  W.  The  life  of  William  Morris.  New  impression,  two  vols, 
in  one.      (New  York:  Longmans,  Green  &  Co.      1922.     $3.50.) 

Macmillan,  a.,  compiler.  The  red  book  of  the  West  Indies:  historical 
and  descriptive,  commercial  and  industrial  facts,  figures,  and  resources. 
(London:  W.  H.  &  L.  Collingridge.      1922.      Pp.  424.) 

Mauer,  H.  Die  private  Kapitalanlage  in  Preussen  ivdhrend  des  IS.  Jahr- 
hundert.      (Mannheim:  Bensheimer,      1921.      20  M.) 

Meeker,  E.  Seventy  years  of  progress  in  Washington.  (Seattle,  Wash.: 
Author.      1921.      Pp.  ix,  381.) 

Mortara,  G.  Prospettive  economiche  1922.  (Citta  di  Castello:  Soc.  Tip. 
"Leonardo  da  Vinci."      1922.      Pp.  xx,  384.) 

By  far  the  larger  portion  of  the  treatment  of  each  topic  considered  in 
this  volume  is  concerned  with  conditions,  circumstances  and  developments 
of  the  past,  generally  of  1921.  In  a  very  few  lines,  sometimes  as  few 
as  four,  is  given  the  author's  outlook,  or  expectation  of  developments,  for 
1922;  analysis  or  argument  does  not  appear  here,  and  prediction  is  dis- 
claimed. As  it  is  to  these  lines  that  most  persons  who  consult  the  book 
will  turn,  the  book  appropriately  takes  its  title  from  them.  The  chapters 
take  up  such  topics  as  grain,  wine,  silk,  cotton,  wool,  iron,  electrical 
energy,  transportation  by  land  and  sea,  public  finance,  money,  labor. 

R.  F.   Foerster. 


1922]  Economic  History  and  Geography  485 

MoscHELEs,  J.  Wirtschaftsgeographie  der  tschechosloxcakischen  Republik. 
(Vienna:  A.  Haase.      1921.      Pp.  162.     43.70  M.) 

Mueller,  H.  R.      The  Whig  party  in  Pennsylvania.     Columbia  University 
studies  in  history,  economics  and  public  law,  vol.  CI,  no.  2.      (New  York: 
Longmans,  Green  &  Co.      1922.      Pp.  271.     $2.75.) 
Contains  a  chapter  on  Texas  and  the  Tariff,  1844-1846. 

MuiR,  R.  A  short  history  of  the  British  Commonxvealth.  Vol.  I,  The 
islands  and  the  first  empire  (to  1783).  (Yonkers-on-Hudson,  N.  Y.: 
World  Book  Co.      1922.      Pp.  xvi,  824.     $8.) 

Odate,  G.  Japan's  financial  relations  with  the  United  States.  Columbia 
University  studies  in  history,  economics,  and  public  law,  vol.  XCVIII, 
no.  2.      (New  York:  Longmans,  Green  &  Co.      1922.      Pp.  136.     $1.25.) 

Parker,  E.  H.  China,  her  history,  diplomacy  and  commerce  from  the 
earliest  times  to  the  establishment  of  the  Chinese  Republic  in  1917.  (New 
York:  Button.      1922.     $5.) 

Paulus,  N.  Indulgences  as  a  social  factor  in  the  middle  ages.  Trans, 
by  J.  E.  Ross.      (New  York:  The  Devin-Adair  Co.      1922.      Pp.  121.) 

Perchot,  J.  Fer*  le  libre  relevement  economique  et  financier  de  la  France. 
Discours  prononces  an  Senat,  1916-1920.  (Paris:  Alcan.  1921.  Pp. 
330.      6.75  fr.) 

Peck,  A.  S.  Industrial  and  commercial  South  America.  (New  York: 
Button.      1922.     $5.) 

Radford,  A.  Industrial  and  commercial  geography.  (London:  Collins. 
1922.      3s.  6d.) 

Reimes,  W.  Ein  Gang  durch  die  JVirtschaftsgeschichte.  (Stuttgart: 
Bietz.      1922.     24  M.) 

Rew,  H.  The  story  of  the  Agricultural  Club,  1818-1921.  (London:  King. 
1922.      Pp.  XV,  205.      10s.  6d.) 

St.  Lewinski,  J.  The  founders  of  political  economy.  (London:  King. 
1922.      Pp.  173.      6s.  6d.) 

VON  Scheven,  W.  Die  JVechselwirkting  zwischen  Staats-  und  Wirtschafts- 
politik  in  den  schxceizerisch-franzosischen  Beziehungen  der  Restaura- 
tionszeit.      (Bern:  Ernst  Bircher.      1921.      Pp.  95.      5  fr.) 

ScHiFF,  M.  L.  Europe  in  March,  1922.  (New  York:  Author,  52  William 
St.      1922.      Pp.  41.) 

ScHLEsiNGER,  A.  M.  N ew  viewpoints  in  American  history.  (New  York: 
Macmillan.      1922.      Pp.  x,  299.) 

The  author  is  professor  of  history  in  the  University  of  Iowa.  Con- 
tains chapters  on  the  Influence  of  Immigration  on  American  History, 
Economic  Influences,  Radicalism  and  Conservatism,  and  Economic  As- 
pects of  the  Movement  for  the  Constitution. 

Schmidt,  F.  A.  Die  Volkswirtschaft  im  neuen  Deutschland.  Betrach- 
tungen  zur  xvirtschaftlichen  Lage  nach  dem  Londoner  Ultimatum.  (Mu- 
nich: Verlag  d.  Polit.  Zeitfragen,  F.  A.  Pfeiffer  &  Co.      1921.      Pp.  64. 

10  M.) 


486  Reviews  and  New  Books  [September 

Steiner,  B.  C.  Life  of  Roger  Brooke  Taney,  Chief  Justice  of  the  United 
States  Supreme  Court.      (Baltimore:  Williams  &  Wilkins  Co.      1922.) 

VON  Stern,  E.  Sozial-xvirtschaftUche  Bewegungen  und  Theorien  in  der 
Antike.      (Halle:   Niemeyer.      1921.     4   M.) 

Stone,  G.  A  history  of  labour.  (New  York:  Macmillan.  1922.  Pp. 
416.) 

Vanderlip,  F.  a.  What  next  in  Europe?  (New  York:  Harcourt,  Brace  & 
Co.      1922.      Pp.  vi,  308.      $2.) 

DEL  ViLLAR,  E.  H.  El  valor  geogrdfico  de  Espana.  (Madrid:  Sucesores 
de  Rivadeneyra.      1921.      Pp.  300.) 

William,  M.  The  social  interpretation  of  history.  (Long  Island  City, 
N.  Y. :  Sotery  Pub.  Co.      1922.     $3.) 

Accessions  of  manuscripts,  broadsides,  and  British  transcripts,  July  1, 
1920 — December  31,  1921.  Library  of  Congress,  Division  of  Manu- 
scripts.     (Washington:  Gov.  Prtg.  Office,  Library  Branch,  1922.  Pp.  53.) 

Blue  book  of  the  state  of  Illinois,  1921-1922.  (Springfield,  111.:  L.  L. 
Emerson,  secretary  of  state.      1921.      Pp.  xi,  935.) 

Business  prospects  year  book,  1922.  Edited  by  D.  W.  Lloyd  and  A.  P. 
Barnett.  (Cardiff,  England:  Business  Statistics  Co.  1922.  Pp.  373. 
10s.) 

The  city  of  Nexv  York.  A  few  briefly  stated  facts  of  an  economic,  historical, 
and  descriptive  character  about  the  city  of  Nero  York.  (New  York: 
Chamber  of  Commerce,  65  Liberty  St.      1922.      Pp.  44.) 

Commercial  situation  in  Portuguese  East  Africa,  October,  1921.  (London: 
King.      1922.     6d.) 

Commercial  situation  at  Siam,  September,  1921.  (London:  King.  1922. 
3d.) 

Economic  and  financial  conditions  in  Germany  to  March,  1922.  Report  by 
the  Commercial  Secretary  to  H.  M.  Embassy,  Berlin.  (London:  King. 
1922.      5s.) 

Economic  and  financial  conditions  in  Paraguay,  September,  1921.  (London: 
King.      1922.      Is.  3d.) 

Economic  and  financial  conditions  in  Uruguay,  November,  1921.  (London: 
King.      1922.      Is.) 

The  greatest  highway  in  the  xvorld ;  historical,  industrial  and  descriptive  in- 
formation of  the  towns,  cities  and  country  passed  through  between  New 
York  and  Chicago  via  the  Neiv  York  Central  lines;  based  on  the  Ency- 
clopaedia Britannica.  (New  York:  N.  Y.  Central  Railroad  Co.,  Pub- 
licity Dept.      1921.      Pp.  iii,  130.) 

The  Russian  states:  a  description  of  the  various  political  units  cristing  on 
Russian  territory.  Compiled  from  material  supplied  by  the  British  Trade 
Mission  in  Moscow.      (London :  King.      1922.     9d.) 

Situation  economique  de  la  Belgique,  2me  semestre,  1921.  (Liege:  Minis- 
tere  des  Affaires  Etrangeres.      1922.      Vyt.  122.) 

Venezuela   en   el   centenario   de   su   independencia   1811-1911.      Publicacion 


1922]  xigricuUnre,  Mining,  Forcstr/j,  and  Fisheries  487 

hecha  de  orden  del  Ciudadano  General  Juan  Vincents  Gomez.  Vols. 
I  and  II.  (Caracas:  Tipografia  Americana.  1922.  Pp.  xxii,  583; 
593.) 

Agriculture,  Mining,  Forestry,  and  Fisheries 

The  National  Resources  of  South  Africa.  By  R.  A.  Lehfeldt.  (Lon- 
don: Longmans,  Green  &  Company.      1922.      Pp.  79.) 

Since  South  Africa  is  famous  for  its  production  of  diamonds  in  the 
rough,  we  may  well  expect  to  find  something  of  the  sort  in  a  study  of 
the  income  of  that  region  made  by  a  teacher  in  the  infant  University 
of  the  Witwatersrand — an  infant  still  less  than  a  year  old.  One  is 
much  surprised,  then,  to  find  the  product  not  a  rough  stone  but  a 
polished  gem  of  the  first  water.  Too  many  of  the  works  on  the  subject 
of  income  are  characterized  either  by  a  labored  and  tiresome  style 
or  by  a  careless  analysis  of  the  problems  involved.  Professor  Lehfeldt 
has  accomplished  the  difficult  task  of  presenting  his  subject  in  a  pleas- 
ing, readable  form ;  and  he  possesses  such  a  good  grasp  of  economic 
principles  and  has  analyzed  his  problem  so  carefully  that  the  reviewer 
has  been  able  to  detect  surprisingly  few  flaws  in  the  reasoning  given. 

The  book  is  worth  reading  not  only  as  an  example  of  scientific 
analysis  but  also  for  the  facts  presented  therein.  Comparisons  are 
made  throughout  with  conditions  in  the  United  States,  England,  and 
Australia.  The  computation  of  the  total  income  of  South  Africa  is 
complicated  by  the  fact  that-  a  large  fraction  of  South  African  prop- 
ert}'^  is  held  abroad.  The  income  of  the  average  white  inliabitant  of 
South  Africa  is  shown  to  be  less  than  two  thirds  as  great  as  that  of  the 
average  inhabitant  of  the  United  States,  There  is,  however,  a  strik- 
ing difference  between  the  average  income  of  the  whites  and  the  average 
income  of  the  whole  population  of  South  Africa,  for  four  fifths  of  the 
inhabitants  of  this  region  are  colored  and  the  per  capita  income  of  this 
great  majority  of  the  inhabitants  is  estimated  at  the  unbelievably  small 
amount  of  £5l/o  per  annum.  South  Africans  must,  then,  be  considered 
as  economically  much  worse  off  than  the  people  of  the  United  States. 

Mining,  of  course,  plays  a  much  more  important  and  manufacturing 
a  much  less  important  role  in  South  Africa  than  in  the  United  States. 
That  the  foreign  trade  of  the  former  is  a  matter  of  the  first  moment 
is  evidenced  by  the  fact  that  the  value  of  exports  equals  half  of  the  net 
value  of  goods  produced — a  proportion  nearly  ten  times  as  great  as 
that  normally  prevailing  in  the  United  States.  Gold,  diamonds,  and 
wool  are  the  leading  exports.  It  will  surprise  most  American  readers 
to  know  that  South  Africa  is  a  food  importing  rather  than  a  food 
exporting  region. 

Despite  the  differences  in  average  per  capita  income  and  the  racial 
composition  of  the  population,  Professor  Lehfeldt  finds  that  in  South 


488  Reviews  and  Nero  Books  [September 

Africa,  just  as  in  England  and  the  United  States,  wages  and  salaries 
account  for  about  two  thirds  of  the  national  income.  He  endorses 
the  views  previously  set  forth  by  Professor  Bowley  and  by  the  present 
reviewer  that  it  is  not  feasible  to  improve  materially  the  condition  of 
the  wage-earning  classes  by  any  process  of  redistribution  but  that 
appreciable  betterment  can  only  be  brought  about  by  methods  which 
will  give  greater  per  capita  production. 

Protectionism  is  apparently  rampant  in  South  Africa  as  well  as  in 
this  country,  but  Professor  Lehfeldt,  like  most  economists,  has  little 
faith  that  this  panacea,  if  put  into  operation,  will  accomplish  as  much 
good  as  harm. 

This  review  may  well  close  with  tlie  words  of  Premier  J.  C.  Smuts, 
who  writes  the  preface  to  tlie  little  volume — "The  student  of  eco- 
nomics, the  legislator,  and  the  average  citizen  will  read  this  book  with 
profit,  and  I  commend  the  autlior's  views  to  the  serious  consideration 
of  all." 

W1LI.F011D  I.  King. 

NEW    BOOKS 

Apostol,  p.  and   Michelson,  A.     La  hitte  pour  le  petrole  et  la  Russie. 
(Paris:  Payot.      1922.      Pp.  224.) 

Archbald,   H.      The  four-hour  dai/   in   coal.      (New  York:   H.   W.   Wilson 
Co.      1922.      Pp.  xiii,   148.     $1.50.) 

Eight  compact  chapters,  entitled  Grievances,  Coal  Mining,  The  Mine 
Foreman  and  His  Problem,  Time  for  the  Miner,  Amount  of  Work  for 
the  Miner,  Record  of  Complaints  in  Illinois,  Discouragements  and  the 
Lack  of  Thrift,  and  The  Engineering  Need,  constitute  this  study  of  bitu- 
minous coal  mining.  The  introductory  note  is  by  the  Bureau  of  In- 
dustrial Research,  and  there  are  twenty-two  charts  and  tables.  Long 
experience  as  a  mining  engineer  enables  Mr.  Archbald  to  analyze  lucidly 
the  problems  of  coal  mining — its  intermittent  character,  the  technical 
difficulties  of  routing  empty  cars  to  avoid  wasting  the  miners'  time,  the 
ineflFcctual  struggles  of  poorly  paid  foremen  against  too  much  detail,  all 
resulting  in  an  average  daily  outi)ut  of  scarcely  four  tons  instead  of  six 
or  eight.  The  industry  is  speculatively  overdeveloped,  and  some  100,000 
miners  too  many  are  kept  on  hand  (idle  piece-workers  costing  the  mines 
notliing)  thus  reducing  the  opportunities  for  work  for  all.  When  miners 
actually  mine  coal  during  only  a  quarter,  perhaps,  of  possible  working 
hours  in  a  year,  it  is  imperative  that  the  price  paid  per  ton  be  high. 

The  book  is  written  without  bitterness,  and  offers  no  easy  solution.  No 
distinction  is  made  between  conditions  in  imion  and  non-union  mines, 
excc])t  in  stating  tliat  the  latter  lack  means  of  redress  for  grievances,  such 
as  the  union  mines  obtain  through  adjustment  hoards  and  union  con- 
tracts. 

VON    Braun,    E.     Die    Hehung    der    landtvirtschaftlichen  Production    als 

Grundlage  des  deuischen   Wiedcraufhaus.      Finanz-  imd  volkswirtschaft- 

lichc  Zeitfragen,  Heft  78.      (Stuttgart :  Ferdinand  Enke.  1921.      Pp.16. 
3  M.) 


1922]  Agriculture,  Mining,  Forestry,  and  Fisheries  489 

BuRCHARD,  E.  F.  Cement  in  1930.  Mineral  resources  of  the  United 
States,  1920.  Part  II.  Issued  by  the  Geological  Survey.  (Washington: 
Gov.  Prtg.  Office,  Supt.  Docs.      1922.) 

Copland,  D.  B.  Wheat  production  in  New  Zealand.  A  study  in  the  eco- 
nomics of  Netv  Zealand  agriculture.  (Melbourne:  Whitcombe  &  Tombs. 
1922.      Pp.  xviii,  311.) 

Cronshaw,  H.  B.  Silver  ores.  Imperial  Institute  monographs  on  mineral 
resources  with  special  reference  to  the  British  Empire.  (London:  John 
Murray.      1921.     Pp.  ix,  152.     6s.) 

Day,  J.  D.  Cotton  industry  of  the  Pacific-Southwest.  (Los  Angeles, 
Calif.:  First  National  Bank,  Research  Dept.      1922.) 

Jermstad,  a.  Das  Opium.  Seine  Kultur  und  Verwertung  im  Handel. 
Chemischtechnische  Bibliothek,  368.  Bd.  (Vienna:  A.  Hartleben.  1921. 
Pp.  208.      24  M.) 

Jevons,  H.  S.  The  economics  of  tenancy  law  and  state  management. 
(Allahabad,  India:  University  Press.      1921.      Pp.  114.) 

JiLLSoN,  W.  R.  The  coal  industry  in  Kentucky;  an  historical  sketch. 
(Frankfort,  Ky.:  Kentucky  Geological  Survey.      1922.      Pp.87.     $2.) 

.      The  conservation  of  natural  gas  in  Kentucky.      (Louisville, 

Ky.:     J.  P.  Morton  &  Co.      1922.      Pp.   152.) 

KuNHARDT,  J.  C.  G.  An  analysis  of  the  statistical  position  of  rubber. 
(London:  Rickinson  &  Son.      1922.      Pp.  44.     2s.  6d.) 

Meyer,  E.  Agricultural  and  live  stock  conditions  and  finance.  A  report 
to  the  President.  (Washington:  War  Finance  Corporation.  1922.  Pp. 
12.) 

MiTZAKis,  M.     Oil  encyclopedia.      (London:  Chapman  &  Hall.     1922.21s.) 

MoRATH,  R.  Der  deutsche  Kalibergbau.  (Nieder-Ramstadt:  Carl  Mal- 
comes.      1921.      Pp.  65.      11.60  M.) 

Orwin,  C.  S.  Farming  costs.  New  edition.  (Oxford,  Eng. :  Clarendon 
Press.      1921.      Pp.  141.) 

OxHOLM,  A.  H.  Forest  resources,  lumber  industry  and  lumber  export  trade 
of  Norway.  Bureau  of  Foreign  and  Domestic  Commerce,  Special  agents' 
series  211.      (Washington:  Gov.  Prtg.  Office,  Supt.  Docs.      1922.      30c.) 

Page,  T.  W.  Suggested  reclassification  and  revision  of  sections  of  the 
tariff  relating  to  agricultural  products  and  provisions.  (Washington: 
Gov.  Prtg.  Office,  Supt.  Docs.      1921.      Pp.  ii,  226.) 

Peek,  G.  N.  and  Johnson,  H.  S.  Equality  for  agriculture.  (Moline,  111. 
Howard  W.  Harrington,  Moline  Plow  Co.      1922.      Pp.  32.     25c.) 

Penzer,  N.  M.  The  tin  resources  of  the  British  Empire.  Raw  materials 
of  industry.      (London:  William  Rider  &  Son.      1921.      Pp.  x,  358.      15s.) 

Pfeiffer,  K.  C.  T.  Geschichte  des  Zuckerrilhenbaues  und  der  Riibensucker- 
industrie  in  der  Rheinprovinz.      (Leipzig:  Kurt  Shroeder  Verlag.     1922.) 

Redwood,  B.  Petroleum:  a  treatise  on  the  geographical  distribution  and 
geological  occurrence  of  petroleuvi  and  natural  gas,  etc.  Three  vols. 
(London:  Charles  Griffin  &  Co.      1922.     Pp.1353.      105s.) 


490  Reviews  and  New  Books  [September 

Shepard,  C.  W.  Uncle  Saiii's  free  farms  and  ranches.  (Colony,  Wyo. : 
Author.      1921.      Pp.  18.) 

Skalweit,  a.  Die  Pacht  in  ihrer  volkswirtschaftlichen  Bedeutung.  (Leip- 
zig: Kurt  Schroeder  Verlag.      1922.) 

Stebbins,  E.  p.      The  forests  of  India.     Two  vols.  Vol.  I.      (London:  John 

Lane.      1922.      42s.) 
Ward,  J.  S.  M.      Cotton  and  wool.      Raw  materials  of  industry.      (London: 

William  Rider  &  Son.      1921.      Pp.  270.      10s.  6d.) 

Agriculture.  Provision  of  allotments  by  local  authorities  in  Great  Britain. 
Report  of  Departmental  Committee.      (London:  King.      1922.  6d.) 

Annual  wool  review,  1921.  Domestic  wool  clip,  imports  of  wool  and  manu- 
factures and  other  statistical  tables.  (Boston:  National  Assoc,  of  Wool 
Manufacturers.      1922.      Pp.  220.      50e.) 

Issued  as  a  supplement  to  the  January  Bulletin. 

Deutsches  Baumwollhandbuch.  Jdhrliches  Merk-  und  Nachschlagebuch 
fiir  die  Interessenten  des  Baumxvollhandels  und  der  Baumwollindustrie. 
(Bremen:  Debeha-Verlag.      1921.      Pp.  viii,  223,  107.) 

Farm  census  of  the  United  States,  1919  and  1920.  United  States  totals 
with  comparative  figures  from  the  census  of  1910.  (Washington:  Gov. 
Prtg.  Office,  Supt.  Docs.      1922.      Pp.  15.) 

Fur  production  of  Canada,  season  1920-1921.  (Ottawa:  Dominion  Bureau 
of  Statistics,  Fur  Branch.      1922.      Pp.  10.) 

Fisheries  of  the  Far  Eastern  Republic.  Published  by  the  Special  Delega- 
tion of  the  Far  Eastern  Republic  to  the  United  States  of  America.  (Wash- 
ington: Delegation.      1922.      Pp.  35.) 

Irrigation,  1919  and  1920.  Fourteenth  censiis  of  the  United  States.  (Wash- 
ington: Gov.  Prtg.  Office,  Supt.  Docs.      1922.      Pp.  38.) 

Mineral  resources  of  the  United  States,  1918.  Part  I — Metals.  By  the 
United  States  Geological  Survey.  (Washington:  Gov.  Prtg.  Office,  Supt. 
Docs.      1921.      Pp.  149A,  109fi.      $1.) 

Petroleum.  Prepared  jointly  by  H.  M.  Petroleum  De])artment  with  the 
cooperation  of  H.  B.  Cronshaw.  Imperial  Institute  monographs  on 
mineral  resources  with  special  reference  to  the  British  Empire.  (London: 
John  Murray.      1921.      Pp.  x,  110.      5s.) 

Production  de  la  soie  en  France  et  a  I'etranger.  Recoltes  de  1916,  1917, 
1918  et  1919.  (I>yon:  Union  des  Marchands  de  Soie  de  Lyon.  1921. 
Pp.   18.) 

Reports  on  jute  and  silk.  Imperial  Institute  Indian  trade  enquiry.  (Lon- 
don: John  Murray.      1921.      Pp.  ix,  90.      5s.) 

Statistical  report  of  the  California  Board  of  Agriculture  for  the  year  1920. 
(Sacramento,  Calif.:  Board  of  Agri.      1921.     Pp.  xiv,  375.) 

Summary  report  of  investigations  made  by  the  Mines  Branch  during  1920. 
(Ottawa,  Canada:  Dept.  of  Mines.      19*22.      Pp.  87.) 

Technical  survey  of  agricultural  questions.  International  Labour  Con- 
ference, third  session.  (Geneva:  International  Labour  Office.  1921. 
Pp.  X,  623.) 


1922]  Manufacturing  Indus  fries  491 

Wheat  supplies.  First  report  of  the  Royal  Commission.  (London:  H.  M.'s 
Stationery  Office.      1921.      Pp.  vi,  95.      5s.) 

Manufacturing  Industries 

NEW    BOOKS 

Garside,  a.  H.,  compiler.  Standard  cotton  mill  practice  and  equipment, 
1921.  (Boston:  National  Assoc.  Cotton  Manufacturers,  15  Milk  St.  1921. 
Pp.  180.) 

Grew,  W.  F.  The  cycle  industry.  Its  origin,  history  and  latest  develop- 
ments.     (London  and  New  York:  Pitman.      1921.      Pp.  x,  123.      3s.) 

Michel,  H.  Die  hausindustrielle  Weherei  Deutschlands.  Entxvicklung, 
Lage  und  Zukunft.      (Jena:  Fischer.      1921.      Pp.  vii,  141.     20  M.) 

Reyneau,  p.  O.  and  Seelve,  H.  P.  Economics  of  electrical  distribution. 
(New  York:  McGraw-Hill.      1922.      Pp.  viii,  209.     $2.50.) 

SiMox,  A.  L.  Wine  and  the  wine  trade.  (New  York:  Pitman.  1921.  Pp. 
xi,  110.     $1.) 

Arkansas  marketing  and  industrial  guide.  (Little  Rock,  Ark.:  State  Bureau 
of  Markets.      1921.      Pp.  215.) 

Directory  of  Massachusetts  manufacturers.  Issued  under  the  editorial 
supervision  of  the  Associated  Industries  of  Massachusetts.  (Boston: 
Sampson  &  Murdock  Co.,  377  Broadway.      1922.     Pp.  674.     $6.) 

Facts  and  figures  of  the  automobile  industry,  1922.  (New  York:  National 
Automobile  Chamber  of  Commerce,  366  Madison  Ave.      1922.      Pp.  96.) 

The  story  of  flour.  (Minneapolis,  Minn.:  Pillsbury  Flour  Mills  Co.  1922. 
Pp.  28.) 

Twentieth  annual  meeting  of  the  National  Lumber  Manufacturers  Associa- 
tion, and  fourth  American  lumber  congress.  (Washington:  Wilson  Comp- 
ton,  Secretary,  Southern  Bldg.      1922.      Pp.    100.) 

Year  book,  1922.      (Chicago:  Commonwealth  Edison  Co.      1922.      Pp.  32.) 

Transportation  and  Communication 

new   books 

Duncan,  C.  S.  Getting  railroad  facts  straight — about  -wages;  about  main- 
tenance; about  valuation.  (New  York:  Assoc,  of  Railway  Executives, 
61  Broadway.      1922.      Pp.  51.) 

An  answer  to  Frank  J.  Warne,  witness  for  the  railroad  unions  before 
the  United  States  Senate  Committee  on  Interstate  Commerce. 

Ellis,  W.,  compiler.  A  cumulative  edition  of  the  Interstate  Commerce  act. 
Two  vols.      (Washington:  Cumulative  Services.      1921.     $14.) 

HuNGERFORD,  E.      Our  railroads  tomorrow.      (New  York:  Century.      1922. 

Pp.  332.      $2.50.) 
Huntington,  W.  C.      Analysis  of  French  railroad  situation.      Department 

of   Commerce,  trade   information   bulletin   no,    17.      (Washington:   Supt. 

Docs.      1922.      Pp.  24.      5c.) 


492  Reviews  and  Nexv  Boole s  [September 

Kennan,  G.  G.  E.  Harriman,  a  hiographi/.  Two  vols.  (Boston:  Hough- 
ton Mifflin.      1922.      Pp.  xvi,  421;  421.) 

In  addition  to  biographical  data,  this  work  is  of  permanent  value  for 
chapters  on  railroad  development  and  finance.  Describes  in  detail  Harri- 
man's  connection  with  the  Illinois  Central,  Union  Pacific,  Southern  Pacific, 
Kansas  City  Southern,  Erie  and  other  railways.  Several  chapters  are 
devoted  to  the  struggle  to  obtain  possession  of  the  Chicago,  Burlington 
and  Quincy.  In  chapter  27,  the  author  again  returns  to  the  criticisms  of 
Harriman  made  b}'  Professor  Ripley  in  the  North  American  Review  in 
1916  and  answers  them  seriatim. 

Langenbeck,  W.  Geschichte  des  Norddeutschen  Lloyd.  (Leipzig:  Paul 
Schraepler.      1921.      Pp.  122.      14  M.) 

Lee,  E.  What  is  ahead  for  our  railroads?  Address  before  the  Transporta- 
tion Club,  New  York  City,  May  15,  1922.  (Philadelphia:  Pennsylvania 
Railroad  System.      1922.) 

MacElwee,  R.  S.  and  Ritter,  A.  H.  Economic  aspects  of  the  Great 
Lakes-St.  Lawrence  Ship  Canal.  (New  York:  Ronald.  1921.  Pp. 
291.     $4.) 

Much  interesting  information  has  been  brought  together  in  this  volume 
(which  is  referred  to  in  the  preface  as  a  report)  concerning  a  proposed 
Lakes  to  Ocean  Ship  Canal.  Attention  is  given  to  the  character  of  water 
transportation  needed  for  the  commerce  of  the  Northwest ;  to  the  naviga- 
tion conditions  on  the  St.  Lawrence  route;  to  a  comparison  of  the  St. 
Lawrence  with  other  ocean  routes ;  to  a  comparison  of  navigation  facili- 
ties on  the  Great  Lakes  with  those  of  ocean  ports ;  to  the  depths  required 
for  the  accommodation  of  vessels  engaged  in  maritime  trade;  to  the  type 
and  sizes  of  vessels  which  carry  the  world's  commerce,  including  a  study 
of  vessels  passing  through  the  Panama  Canal  between  July  1,  1919,  and 
June  30,  1920. 

There  is  a  discussion  of  the  cost  of  transportation  between  Upper 
Lake  ports  and  Liverpool ;  of  the  areas  commercially  tributary  to  the 
Great  Lakes-St.  Lawrence  waterway;  of  production  of  the  tributary 
area ;  of  return  loads ;  of  the  commerce  of  the  Great  Lakes ;  of  the  volume 
of  commerce  which  would  be  affected  by  the  proposed  waterway ;  of  the 
possible  development  of  shipbuilding  on  the  Great  Lakes  and  the  possi- 
bilities of  power  development  in  connection  with  the  waterway.  The 
volume  contains  many  interesting  tables,  charts,  and  maps  concerning 
the  production  and  possible  traffic  of  the  Great  Lakes  region. 

The  authors  state  (preface,  p.  3)  that  "prior  to  making  this  investi- 
gation, they,  like  many  others,  had  formed  an  immature  judgment  that 
ocean  vessels  on  this  route  could  not  compete  with  existing  routes  serving 
the  Northwest";  that  a  "study  of  the  factors  affecting  the  costs  and  ad- 
vantages of  the  various  available  routes  and  methods  of  transportation 
has  served  to  dispel  the  impressions  derived  largely  from  reports  submit- 
ted many  years  ago  when  the  conditions  and  costs  of  transportation,  as 
well  as  the  needs  of  the  vast  territory  served  by  the  Great  Lakes,  were 
very  different  from  what  they  are  at  the  present  time." 

They  contend  (p.  53)  that  the  elimination  of  excessive  terminal  costs 
and  the  avoidance  of  losses  sustained  by  American  shippers  through  in- 
ability to  carry  out  their  contracts  will  alone  result  in  annual  savings 
equal  to  the  total  cost  of  the  proposed  waterway.     Again  (p.  290)  it  is 


1922]  Transportation  and  Communication  493 

claimed  that  "the  saving  on  grain  will  amount  to  from  8  to  10  cents  a 
bushel"  and  that  "this  saving  will  affect  not  only  the  grain  which  actually 
moves  for  export  but  practically  all  that  produced  within  the  area  tribu- 
tary to  the  Great  Lakes,"  that  "this  saving  will  amount  annually  to 
approximately  the  entire  cost  of  the  improvement  required  to  admit 
ocean  vessels  into  the  Lakes;  also  (p.  291)  that  the  water-power  develop- 
ment will  "afford  a  revenue  which  will  maintain  the  improvement  and 
amortize  the  full  cost  within  a  reasonable  period."  It  is  maintained  that 
the  "railroads  cannot  afford  to  provide  the  excess  equipment  and  the 
excess  facilities  at  terminals  to  meet  the  heavy  traffic  burdens  during 
crop-moving  periods."  But  it  is  stated  (p.  31)  that  "the  opening  of  the 
Great  Lakes  to  ocean  vessels  would  provide  a  dependable  outlet  for  the 
products  of  our  chief  surplus-producing  areas  and  would  decrease  by 
fully  50  per  cent  the  average  rail  haul  to  and  from  ship  side" ;  that  "it 
would  constitute  an  effective  regulator  of  rail  rates  and  traffic." 

No  suggestions  are  made  as  to  the  mode  of  financing  the  project.  It 
is  not  clear  that  it  will  be  to  the  interest  of  the  region  bordering  on  the 
Great  Lakes  to  finance  the  improvement,  for  if  it  is  to  cheapen  the  cost 
of  transportation  of  grain  materially  this  region  might  suffer  from  the 
competition  of  the  far  Northwest.  The  building  of  railroads  in  the 
Mississippi  valley  in  the  sixties  and  seventies  lowered  the  value  of 
Eastern  farms,  and  seriously  affected  English  farmers  and  the  peasantry 
of  Western  Europe.  If  the  interests  not  normally  tributary-  to  the  area 
affected  are  to  finance  the  project,  it  will  be  necessary  to  show  that  the 
investment  will  yield  an  adequate  return;  if  it  is  expected  that  the  govern- 
ment will  subsidize  the  improvement  it  will  be  necessary  to  consider  the 
obligation  already  assumed  under  the  Transportation  act  of  1920,  by 
which  freight  rates  are  to  be  fixed  so  as  to  give  an  adequate  return  to 
carriers.  The  plan  suggested  by  the  authors  that  the  new  waterway 
would  provide  "an  effective  regulator  of  rail  rates,"  would  appear  to 
belong  to  that  period  of  our  transportation  development  when  dependence 
was  placed  on  competition  rather  than  on  government  regulation  of  rates. 

There  does  not  appear  to  be  sufficient  evidence  presented  in  the  volume 
to  warrant  the  conclusions  the  authors  have  reached.  There  are  no  facts 
concerning  recent  estimates  of  the  cost  of  the  project.  Indeed,  it  is 
stated  (p.  7)  that  "study  of  the  engineering  features  of  the  proposed 
improvement  is  in  progress."  C.  O.  Ruggles. 

McIntyre,  L.  E.  Preliminary  topical  outline  of  the  economics  of  highcvay 
transport.  (Washington:  Highway  and  Highway  Transport  Education 
Committee,  Willard  Bldg.      1922.  '  Pp.  59.     25c.') 

Pratt,  E.  A.  British  railzi.-ays  and  the  Great  War.  In  ten  parts.  (Lon- 
don: Selwyn  and  Blount.      1921.      3s.  6d.  each.) 

RocHELEAU,  W.  F.  Transportation.  The  great  American  industries  series, 
fourth  book.      (Chicago:  A.  Flanagan  Co.      1922.      Pp.  v,  275.) 

Index-digest  of  decisions  of  the  United  States  Railroad  Labor  Board. 
Compiled  by  Bureau  of  Information  of  the  Southeastern  Railways. 
(Washington:  Railway  Accounting  Officers  Assoc,  116  Woodward  Bldg. 
1922.      Pp.  327.      50c.) 

International  and  Great  Northern  Railxcay:  position  under  the  reorgan- 
ization plan  of  June  1,  1922.  (New  York:  W^ood,  Struthers  &  Co.  Pp. 
19.) 


494  Reviews  and  New  Books  [September 

Rates  of  freight  in  the  Neic  Zealand  trade.  Report  of  the  Imperial  Ship- 
ping Committee.  (London:  H.  M.'s  Stationery  Office.  1921.  Pp.  23. 
6d.) 

Record  of  American  and  foreign  shipping.  (New  York:  American  Bureau 
of  Shipping.      1922.      Pp.1600.) 

Statistics  on  the  automobile ,  motor  truck,  motor  cycle,  1922.  (Des  Moines, 
la.:  Motor  List  Co.      1922.      Pp.  32.) 

What  ails  business?  Catechism  on  the  sources  of  buying  poxver  and  a  way 
to  restore  national  prosperity  through  the  resumption  of  railway  pur- 
chases. (Chicago:  Arthur  Wyman,  1420  MeCormick  Bldg.  1922.  Pp. 
24.) 

Trade,  Commerce,  and  Commercial  Crises 

NEW     BOOKS 

Alexander,  J.  S.  Why  tee  must  have  foreign  trade.  (New  York:  National 
Bank  of  Commerce."    1922.      Pp.  23.) 

Cooper,  C.  S.  Foreign  trade  markets  and  methods.  (New  York:  Appleton. 
1922.      Pp.  XV,  440.      $3.50.) 

The  appearance  of  another  book  by  a  writer  whose  opportunities  to 
come  in  contact  witli  the  realities  of  foreign  trade  have  been  unusual, 
should  arouse  interest  in  the  minds  of  students  who  have  been  searching 
in  vain  for  a  work  upon  foreign  trade  which  would  present  a  more 
thorough  analysis  of  one  or  more  of  its  phases  than  has  hitherto  appeared. 
According  to  Mr.  Cooper's  statement,  an  attempt  is  made  to  present 
somewhat  si^ecifically  the  "how  and  where"  of  foreign  trade.  Over  one 
half  of  the  book  is  devoted  to  chapters  upon  the  "how"  of  export  trade, 
the  chapter  headings  such  as  Foreign  Trade  Requirements,  Knowing  the 
Export  Business,  Foreign  Salesmanship  as  a  Career,  Export  Advertising, 
Training  for  Foreign  Correspondence,  Literature  and  Study  Courses  for 
Foreign  Trade  Representatives,  American  Shipping,  Marine  Insurance, 
Cables,  Financing  Foreign  Trade,  Definitions  of  Foreign  Trade  Terms, 
indicating  in  general  the  type  of  material  included  and  the  sequence  of 
thought,  if  there  be  any  definite  logic  in  the  arrangement.  The  latter 
})art  of  the  work  contains  discussions  of  actual  and  potential  markets 
for  American  goods,  eom])rising  mainly  a  series  of  running  comments 
derived  from  travel  and  ex])criences  of  the  author. 

The  volume  is  written  in  popular  style  and  quotations  are  abundant; 
but,  as  a  whole,  the  result  is  superficial,  though  interesting.  The  charge 
of  superficiality  is  supported  as  respects  the  "how"  of  foreign  trade  by 
the  fact  that  export  organization  is  given  only  five  or  six  pages,  while 
there  is  practically  no  discussion  of  the  export  department,  types  of  ex- 
port departments  and  their  relationships  to  other  activities  of  the  business. 
Export  })o]icies  necessary  for  tlie  conduct  of  any  business  are  hardly 
touched  upon.  No  mention  is  made  of  methods  of  management  and  con- 
trol of  sales  operations,  a  weakness  which  is  not  confined  to  Mr.  Cooper's 
book  and  is  probably  the  result  of  the  general  viewpoint  of  those  writing 
for  the  American  business  man  upon  foreign  trade.  In  short,  a  book  upon 
the  "how"  of  foreign  trade  should  take  the  viewpoint  of  the  private 
business   enterprise.      The    conduct    of    tliat    private    enterprise    is    deter- 


1922]  Trade,  Commerce,   and  Commercial  Crises  495 

mined  largely  by  external  conditions;  nevertheless,  within  the  limitations 
imjDOsed  by  external  conditions  lies  the  whole  field  for  individual  manage- 
ment. The  reviewer  agrees  wholeheartedly  with  the  statement  made  by 
the  author  that  "world  markets  must  be  won  by  men  prepared  in  the  new 
school  of  business,  men  whose  geographical  knowledge  of  and  grasp  of 
world  politics  are  equal  to  their  knowledge  of  particular  lines  of  trade," 
but  he  would  add  that  the  men  who  are  to  win  must  have  not  only  all 
the  broad  knowledge  of  external  conditions  and  the  knowledge  of  their 
trade,  but  also  knowledge  of  the  broader  business  principles  upon  which 
all  selling  is  conducted. 

Harry  R.  Tosdal. 

Grain,  G.  D.,  Jr.  Market  data  hook  and  directory  of  class,  trade  and 
technical  publications.  Second  edition.  (Chicago:  Author,  537  Soutli 
Dearborn  St.      1922.      Pp.  456.) 

Grunfeld,  E.  Die  deutsche  Aussenhandels-Kontrolle.  (Leipzig:  Kurt 
Schroeder  Verlag.      1922.      Pp.  viii,  100.      20  M.) 

Henderson,  H.  D.  The  Cotton  Control  Board.  (Oxford:  Clarendon 
Press.      1922.      Pp.  74.) 

Lavington,  F.  The  trade  cycle.  An  accotint  of  the  causes  producing 
rhythmical  changes  in  the  activity  of  business.  (London:  King.  1922. 
Pp.   113.      3s.  6d.) 

LiGHTNER,  O.  C.  The  history  of  business  depressions.  (New  York: 
Northeastern  Press,  119  Nassau  St.      1922.     $*i.) 

Mombert,  p.  Einfuhrung  in  das  Studium  der  Konjunktur.  (Leipzig: 
G.  A.  Gloeckner.      1921.      Pp.   226.      40   M.) 

Newman,  A.  J.  The  commercial  industries ;  a  syllabus  tcifh  bibliographies, 
references  and  study  outline.  (Lawrence,  Kan.:  Dept.  of  Journalism 
Press,  Univ.  of  Kansas.      1921.     $1.) 

Smith,  J.  G.  Organized  produce  markets.  (New  York:  Longmans,  Green. 
1922.      Pp.  ix,  238.      $4.) 

TuRPiN,  H.  Le  probleme  international  du  chomage.  (Paris:  Giard.  1921. 
Pp.    116.      2    fr.) 

An  analysis  of  the  causes  of  unemployment  by  one  of  the  chief  men 
in  the  cooperative  glass-works  at  Albi.  Like  M.  Bouniatian  in  Les  Crises 
Economiques,  the  author  attributes  the  crises  which  precede  so  much  un- 
employment to  the  want  of  purchasing  power  on  the  part  of  the  mass  of 
the  people,  the  growing  wealth  of  the  richer  classes  causing  them  to  rein- 
vest their  surplus  income  as  capital  for  the  production  of  further  commodi- 
ties. The  author's  remedy  is  cooperative  industry  and  production  for  use 
instead  of  for  profit,  and  the  elimination  of  the  enormous  waste  caused 
by  the  present  ways  of  distribution,  of  advertising,  and  of  speculation. 
He  advocates  that  the  state  should  give  the  cooperative  industries  the 
right  to  issue  paper  currency  on  a  certain  percentage  of  their  real  posses- 
sions in  goods,  materials  and  factories,  subject  to  state  control,  and  he 
explains  in  what  respect  this  differs  from  the  issuing  of  assignats. 

R.    R.   Whitehead. 

WiNGEN,  O.  Deutschlands  kiinftige  Stellung  auf  dem  Weltmarkt.  (Nieder- 
Ramstadt:  Carl  Malcomes.      1921.      Pp.  92.      15  M.) 


496  Reviews  and  New  Books  [September 

Annual  statement  of  the  foreign  trade  of  Egypt  during  1920.  Compiled  by 
the  Statistical  Department,  Cairo.  (Cairo:  Gov.  Press.  1921.  Pp. 
cxli,  299.) 

Annual  statement  of  the  trade  and  covnnerce  of  Saint  Louis  for  1921.  (St. 
Louis,  Mo.:  Merchants'  Exchange.     1922.     Pp.  217.) 

Chile  and  the  United  States,  reciprocal  resources.  (New  York:  Chile- 
American  Assoc.      1921.     Pp.  20.) 

Commerce  de  la  Belgique  avec  les  pays  Strangers.  Annee  1920.  (Brussels: 
Ministere  des   Finances.      1921.      Pp.   631.) 

Comercio  exterior  de  la  Repuhlica  de  Colombia.  Ano  de  1917.  (Bogota: 
Imprenta  Nacional.      1921.      Pp.  xl,  388.) 

Commerce  du  Royaume  de  Bulgarie  avec  les  pays  etrangers.  Importation, 
exportation,  entrepot  et  transit  pendant  les  annees  1913,  1911/.  et  1915. 
(Sofia:  Imprimerie  de  I'Etat.      1921.     Pp.  xvii,  586.     215  Lei.) 

Danmarks  vareindforsel  og  -udforsel  i  aaret  1920.  Udgivet  af  det  Statis- 
tiske  Departement.  (Copenhagen:  Gyldendalske  Boghandel,  Nordisk  For- 
lag.      1922.      Pp.   259.      4   Kr.) 

Glassware  trade.  Final  report  by  a  subcommittee  appointed  by  the  Stand- 
ing Committee  on  Trusts  (Profiteering  acts,  1919  and  1920).  (London: 
H.  M.'s  Stationery  Office.     1921.     Pp.  12.     2d.) 

Imported  merchandise  entered  for  consumption  in  United  States,  and  duties 
collected  thereon  for  calendar  year  1921.  Annual  report  of  foreign  com- 
merce and  navigation  for  year  ending  1921,  table  no.  9.  (Washington: 
Supt.  Docs.     1922.     lOc.j 

Imports  of  merchandise  into  the  United  States,  by  articles  and  countries 
during  the  year  ending  June  30,  1913  and  calendar  years,  1918-1921. 
Annual  report  on  commerce  and  navigation  for  1921,  table  no.  3.  (Wash- 
ington: Supt.  Docs.      1922.      10c.) 

Latin  American  foreign  trade  in  1920;  general  survey.      (Washington:  Supt. 

Docs.      1922.) 
Report  on  the  grain  trade  of  Canada,  1921.      (Ottawa:  Dominion  Bureau  of 

Statistics,  Internal  Trade  Branch.      1922.      Pp.   153.) 

Report  on  iron  and  steel  products.  Cut  nails,  bolts  arid  nuts,  and  horse 
nail  trades  {Profiteering  acts,  1919  and  1920).  (London:  H.  M.'s  Sta- 
tionery Office.      1921.      Pp.   12.     2d.) 

Republica  Portuguesa.  Commercio  e  navegacao.  Anno  de  1918.  (Lisbon: 
Imprensa  Nacional.      1921.     Pp.  Ixxxviii,  375.) 

Sea-borne  trade  of  British  India  ivith  the  British  Empire  and  foreign  coun- 
tries. Annual  statement  for  the  year  ending  March  31,  1920.  Vol.  II, 
Abstract  and  detailed  tables  of  the  trade  and  shipping  with  each  country. 
Fifty-fourth  issue.      (Calcutta:  Supt.  Gov.  Prtg.      1921.) 

Trade  of  India  in  1920-1921.  (Calcutta:  Supt.  Gov.  Prtg.  1921.  Pp.  vi, 
101.      12  annas.) 

Trade  of  the  United  Kingdom  with  foreign  countries  and  British  possessions, 
1920.  Annual  statement.  Vol.  II  and  III.  (London:  H.  M.'s  Sta- 
tionery Office.      1921.      Pp.  iv,  8i9;  iii,  586.     2£;  l£  7s.  6d.) 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       497 

Accounting,  Business  Methods,  Investments  and  the 

Exchanges 

Speculation.     Its  Sound  Principles  and  Rules  for  Its  Practice.     By 
Thomas   Temple   Hoyxe.      (Chicago:   Economics   Feature   Ser- 
vice, 1014  South  Michigan  Avenue.     1922.     Pp.  279.     $2.50.) 
This  book  is  exactly  vrhat  it  purports  to  be,  namely,  a  discussion  of 
both  the  theory  and  the  practice  of  organized  speculation.     The  main 
strength  of  the  book — and  it  has  many  strong  points — is  the  author's 
familiarity  with  both  the  literature  and  the  concrete  facts  of  his  sub- 
ject.     He  writes  of  speculation  as  one  "on  the  inside."     Perhaps  the 
chief  weakness  of  the  book,  if  it  be  a  weakness,  is  the  controversial  ele- 
ment introduced  by  his  long  discussion  of  "Professor  Fisher's   mad 
dollar"  and  the  rather  long  and  caustic  remarks  about  the  farmers' 
cooperative  grain-selling  movement. 

The  material  in  the  book  is  well  organized,  and  is  presented  with 
literary  finish.  Part  I  (122  pages)  treats  of  Speculation  and  Eco- 
nomic Fallacies.  Price  and  value,  speculation  and  gambling  receive 
a  very  full  treatment.  "Speculative  force,"  says  the  author,  "is  that 
tendency  in  man  to  act  in  regard  to  the  production,  acquisition  or 
distribution  of  wealth  in  accordance  with  his  speculative  theorizing 
concerning  the  future,  the  attribute  which  above  all  others  distin- 
guishes him  from  the  brute.  It  is  the  tendency  to  translate  into  ad- 
vantageous action  the  result  of  using  his  brains."  This  speculative 
force,  the  author  claims,  expresses  itself  in  exchange,  and  economics 
is  primarily  the  science  of  exchange. 

Speculation  and  gambling  are  contrasted.  Gambling  is  an  amuse- 
ment ;  speculation  is  an  occupation  that  confers  a  benefit  upon  society. 
(In  another  connection  the  author  defines  speculation  as  that  kind 
of  exchange  which  records  the  effort  to  increase  the  capital  involved 
in  making  it  without  any  necessity  for  labor  or  service.)  In  specula- 
tion both  parties  may  profit  or  both  lose,  or  one  may  profit  and  one 
may  lose.  In  gambling  there  must  be  a  loss  for  every  gain.  Specula- 
tion confers  some  economic  benefit  upon  society,  but  gambling  does  not. 
The  author's  discussion  of  price  and  value  shows  very  keen  analysis 
of  this  hard  problem.      Some  quotations  will  suffice  to  give  his  views : 

Value  is  an  idea — an  opinion — of  what  price  should  be.  It  is  not  the 
estimation  of  any  one  individual,  but  is  the  opinion  of  what  that  definite 
amount  of  money  is — always  unknown  in  most  cases — which  theoretically 
would  be  reached  as  a  price  by  a  compromise  of  all  those  persons  qualified 
to  judge  in  the  particular  instance,  if  they  sat  in  joint  consideration. 
Furthermore,  presuming  that  such  an  imaginary  conclave  did  actually  gather 
and  did  set  the  value  on  any  article  in  the  world,  that  value  would  not,  in 
all  probability,  remain  fixed  for  any  protracted  period  of  time.  It  might 
change  the  very  next  instant.      This  is  because  value  is  merely  opinion. 


498  Reviezvs  and  New  Books  [September 

Value,  then,  as  I  understand  and  define  the  term,  is  the  ideally  true 
ratio  for  exchange  hetween  money  and  the  thing  valued.  This  true  ratio 
is  always  a  difficult  relation  to  discover  (perhaps  in  no  case  can  it  be  cer- 
tainly discovered),  and  individual  opinion  concerning  what  it  is  almost 
invariably,  but  not  always,  differs,  no  matter  what  the  thing  under  consid- 
eration may  be. 

The  quest  for  true  values,  true  ratios  of  exchange,  says  the  author, 
constitutes  the  fascination  and  romance  of  business.  Differing  opinions 
are  reflected  in  bids  and  offers,  finally  culminating  in  price;  and  since 
opinions  differ,  prices  fluctuate.  Panaceas  to  prevent  price  fluctua- 
tion, therefore,  the  author  characterizes  as  "Alice-in-Wonderland  ab- 
surdities." In  this  category  he  places  Fisher's  "mad  dollar"  and  the 
United  States  Grain  Growers'  wheat  pool. 

"To  suggest,"  says  the  author,  "that  a  money  standard,  or  a  mone- 
tary system,  or  a  'cooperative'  plan  can  be  devised  that  will  practically 
eliminate  changes  in  value,  and  hence  changes  in  price,  and  thus  put 
an  end  to  speculation  is  no  more  nor  less  than  to  suggest  a  device  for 
making  the  opinions  of  mankind  agree  and  remain  immutable.  Such 
a  suggestion  contemplates  extracting  from  human  nature  its  dominant 
characteristic — difference  of  individual  opinion  concerning  the  un- 
known." 

Part  II  of  the  book  (126  pages)  can  be  briefly  summed  up.  It  con- 
tains the  rules  of  speculation — how  to  make  an  art  of  it.  The  author 
first  gives  the  historic  background  of  speculation,  characterizing  it  as 
the  natural  and  unconscious  development  by  economic  society  of  aids 
to  better  distribution.  He  considers  the  problem  of  distribution  as 
greater  than  the  problem  of  production. 

An  organized  speculative  market,  a  broad  market,  according  to  the 
author,  is  the  nearest  realization  we  can  have  of  the  bringing  together 
and  making  identical  in  each  exchange  of  the  price  and  value  of  the 
articles  dealt  in,  and  this  kind  of  a  speculative  market  has  added  value 
by  being  liquid,  and  by  stabilizing  values.  The  rules  for  making  a 
success  of  speculation,  elaborated  very  fully,  are  reduced  to  these  four : 
(1)  Do  not  over-trade.  (2)  Always  definitely  fix  the  amount  of  profit 
sought  in  a  speculation  and  the  amount  of  loss  that  will  be  submitted 
to.      (3)  Think  for  yourself.      (4)  Do  what  you  have  decided  to  do. 

Economists  will  doubtless  find  it  interesting  and  wholesome  to  read 
what  a  "practical  man"  has  to  say  about  them  and  their  field  of  work. 
In  the  opinion  of  the  reviewer  Mr.  Hoyne  has  done  notably  con- 
structive work  in  helping  us  forward  towards  a  better  statement  of 
our  theories  of  value  and  price. 

James  E.  Boyle. 

Cornell  University. 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       499 

The  Stock  Market.     By  S.  S.  Huebner.      (New  York :  D.  Appleton  & 

Company.      1922.     Pp.  xv,  496.     $3.00.) 
The  Work  of  the  Stock  Exchange.     By  J.  Edward  Meeker.      (New 
York:  The  Ronald  Press  Company.   1922.  Pp.  xxiii,  633.  $5.00.) 

A  long  time  has  elapsed  since  a  publication  of  an  authoritative  char- 
acter has  been  written  upon  the  stock  exchange.  A  large  part  of  the 
literature  in  this  field  has  been  written  by  individuals  possessing  a  gift 
of  clever  phrasing  and  one  or  two  hackneyed  ideas  rather  than  any  real 
understanding  of  the  problem.  As  a  result,  in  no  field  of  economic 
literature  have  we  had  so  much  of  writing  and  so  little  of  value  pub- 
lished. It  is  consequently  refreshing  to  have  the  simultaneous  appear- 
ance of  two  well  organized  and  scholarly  treatises  on  the  stock  ex- 
change. 

Professor  S.  S.  Huebner's  book,  The  Stock  Market,  was  originally 
announced  in  the  syllabus  of  the  Investment  Bankers'  Association  on 
The  Stock  Exchange  Business  in  1918.  The  excellent  and  compre- 
hensive outline  contained  in  the  references  to  the  chapter  headings  of 
Professor  Huebner's  book  in  this  syllabus  aroused  our  interest  in  its 
publication.  The  waiting  has  been  worth  while.  The  formulation 
and  organization  of  the  book  represents  seventeen  years  of  teaching  in 
the  Wharton  School  of  Commerce.  Mature  deliberation  and  careful 
organization  is  evidenced  throughout  the  book. 

The  subject-matter  of  the  book  is  divided  into  four  parts:  (1) 
Services  Rendered  by  the  Organized  Stock  Market;  (2)  Organization 
and  Operation  of  the  Market;  (3)  Factors  Affecting  Security  Prices 
and  Values;  and  (4)  Legal  Principles  Governing  the  Stock  Exchange 
Business.  These  divisions  are  subdivided  into  twenty-five  well-bal- 
anced chapters  which  make  the  book  well  adapted  for  textbook  pur- 
poses. On  the  other  hand,  though  the  book  is  developed  along  textbook 
lines,  thus  avoiding  the  inherent  tediousness  of  a  mere  reference  work, 
it  is  sufficient  in  its  detail  to  be  used  as  a  handbook  in  actual  practice. 
In  all  of  the  practices  and  regulations  governing  the  stock  exchange 
constitution  and  by-laws,  the  author  has  followed  rather  closely  tl-.e 
order  followed  in  these  instruments. 

Under  the  "Services  rendered  by  the  organized  stock  market"  of 
Part  I,  the  general  economic  functions  of  a  stock  market  are  explained. 
In  this  group  of  chapters,  particular  emphasis  is  given  to  the  nature 
of  the  market,  the  discounting  function  and  the  function  and  defense 
of  short  selling.  This  is  followed  by  a  discussion  of  the  regulations 
of  the  brokers'  conduct  and  relation  to  the  customer.  This  chapter 
is  followed  in  turn  by  chapters  explaining  the  character  of  options 
and  arbitrating.  Just  why  this  order  has  been  followed  in  the  last 
four  chapters  of  Part  I,  is  not  quite  clear  to  the  reviewer.  Under 
the  group  of  chapters  in  Part  II,  the  technical  character  of  the  stock 


500  Revieivs  and  New  Books  [September 

exchange  organization  and  the  method  by  which  securities  are  listed, 
bought  or  sold  and  transferred  through  tlie  stock  exchange  by  its 
members,  are  treated.  Special  chapters  are  also  devoted  to  the  short 
sale,  the  conversion  of  securities  and  privileged  subscriptions  of  rights. 
This  section  of  the  book  will  without  question  be  the  most  valuable 
for  practical  reference.  Part  III  is  devoted  to  the  factors  affecting 
security  prices.  As  this  is  the  least  understood,  yet  the  most  im- 
portant phase  of  the  security  market,  the  treatment  in  this  section 
seems  rather  meager.  Of  course,  a  complete  treatment  of  this  aspect 
of  the  problem  would  engage  an  entire  volume  in  itself  and  in  order 
to  confine  the  complete  discussion  of  the  stock  market  in  one  volume 
the  author  could  well  claim  justification  for  this  brief  discussion.  For 
example,  no  use  has  been  made  of  Wesley  Mitchell's  extensive  studies 
on  Business  Cycles  or  such  studies  as  are  now  being  carried  on  by  the 
Harvard  Bureau,  though  the  latter  has  by  no  means  entirely  proved 
its  method  of  predicting  market  movements  as  far  as  the  security 
market  is  concerned.  The  more  pertinent  objection  to  including  such 
material,  needless  to  say,  would  be  the  rather  impossible  task  of  re- 
ducing such  statistical  and  highly  technical  data  to  the  comprehensive 
basis  in  a  few  chapters  of  a  textbook,  without  the  sacrifice  of  scientific 
accuracy  and  completeness.  Part  IV  gives  an  unusually  good  brief  sum- 
mary- of  "the  legal  principles  and  usages  governing  the  stock  and  bond 
market."  This  discussion  includes  as  well  an  interpretation  of  the 
leading  court  cases  which  govern  the  relations  and  obligations  between 
broker  and  customer. 

This  book,  which  is  clearly  a  textbook  on  the  stock  market,  deserves 
the  highest  commendation.  No  book  yet  written  in  the  field  of  stock 
market  operations  and  organization  so  well  adapts  itself  to  classroom 
purposes,  and  instructors  who  have  been  offering  work  in  the  field 
of  security  markets  will  more  than  welcome  Professor  Huebner's  book. 

While  Huebner's  book  on  the  stock  market  is  primarily  a  textbook, 
J.  E.  Meeker's  book  is  more  particularily  a  technical  handbook  on 
stock  exchange  operations.  This  does  not  imply  that  the  contents  of 
Mr.  Meeker's  volume  are  above  the  understanding  of  the  average  reader. 
It  is  an  exceptionally  readable  book  on  a  highly  technical  subject.  Mr. 
J.  Edward  Meeker,  as  economist  of  the  New  York  Stock  Exchange, 
has  been  in  an  unusual  position  to  secure  personal  information  which 
is  so  valuable  in  the  compilation  of  a  book  of  this  character.  The 
author  states,  however,  that  "the  present  study  is  in  no  sense  an 
ofl'icial  publication  of  the  stock  exchange,  nor  does  it  bear  any  official 
indorsement  by  that  body." 

The  book  is  a  very  complete  and  a  very  detailed  study  of  the  ma- 
chinery, operations  and  economic  functions  of  the  stock  exchange. 
The  text  has  numerous  photographic  illustrations  and  a  large  number 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       501 

of  forms  used  by  brokerage  houses  and  the  stock  exchange  clearing 
house.  An  extensive  appendix  of  valuable  technical  material  is  in- 
cluded which  is  of  value  to  both  teacher  and  broker.  A  very  large 
amount  of  new  material  hitherto  not  published  has  been  issued  for  the 
first  time.  This  applies  particularly  to  the  material  on  odd  lot  traders, 
floor  trader  specialists,  collateral  loan  market  and  the  stock  exchange 
clearing  house. 

The  method  of  approach  followed  by  Mr.  Meeker  to  the  problem 
of  the  stock  market  materially  differs  from  that  of  Professor  Huebner. 
The  former  reverses  the  order  of  approach  of  the  latter,  i.  e.,  the  organ- 
ization and  technique  of  operations  are  first  covered  and  followed  by  a 
discussion  of  the  functions  of  the  organized  exchange  market.  In 
this  latter  are  included  a  consideration  of  the  dangers  of  speculation 
and  the  regulations  of  the  exchange  in  protecting  the  buyer  and  the 
seller. 

The  author  has  purposely,  as  he  again  states  in  his  preface,  shunned 
controversial  questions,  yet  all  moot  questions  have  not  been  avoided 
as,  for  example,  that  of  incorporation  of  the  exchange  (p.  349), 
though  in  all  such  cases  the  author  has  quite  closely  adhered  to  a 
brief  statement  of  the  historical  facts.  It  would,  however,  seem  de- 
sirable to  the  reviewer  to  have  included  a  considerable  discussion  of 
such  problems  as  the  auditing  of  member  accounts,  recently  adopted 
in  modified  form  by  the  New  York  stock  exchange.  Where  the  author 
has  been  obliged  to  deal  with  a  moot  question,  he  treats  his  problem 
with  fairness,  though  a  conscious  effort  seems  to  have  been  made  to 
set  forth  only  those  things  which  could  be  praised  and  omit  all  others. 
On  the  other  hand,  as  implied  in  the  comments  on  Professor  Huebner's 
book,  strong  objection  can  be  raised  against  the  inclusion  of  much  of 
the  temporary  controversial  material,  too  often  merely  political,  and 
of  passing  interest  in  a  purely  scientific  work. 

Where  more  extended  courses  are  given  in  the  subject  of  stock 
exchanges,  Mr.  Meeker's  book  should  prove  to  be  an  excellent  com- 
panion and  reference  book  to  Huebner's  text.  The  detailed  method, 
however,  in  which  Mr.  Meeker  has  treated  operations  and  transactions 
will  necessitate  rather  frequent  revision  as  changes  in  the  governing 
rules  of  the  stock  exchange  are  frequently  made. 

Walter  E.  Lageequist. 

Northwestern  University. 

Electrical  Rates.      By  G.  P.  Watkins.      (New  York :  D.  Van  Nostrand 

Company.      1921.     Pp.  228.) 

The  electrical  business  has  developed  with  leaps  and  bounds  during 

the  past  twenty  years.      This  has  been  especially  true  during  the  past 

ten  years,  with  the  introduction  of  larger  and  much  more  economical 


502  Reviews  and  New  Books  [September 

central  station  generating  units  and  with  the  great  improvements  in 
transmission  over  long  distances  from  the  central  stations. 

This  technological  or  physical  development  has  brought  about  a 
corresponding  importance  in  the  economic  phases  of  the  business  re- 
lating to  investment,  operating  costs,  rates,  and  return  on  invest- 
ment. Dr.  Watkins  in  the  present  volume  has  devoted  himself  es- 
pecially to  the  economic  problem  of  rate  making.  Unfortunately, 
electrical  rates  have  become  established  largely  through  more  or  less 
haphazard  business  expediency,  modified  by  political  considerations, 
with  comparatively  little  direct  regard  for  the  economic  background  of 
sound  rate  policy.  Dr.  Watkins  has  thus  performed  a  signal  service 
in  presenting  and  discussing  the  economic  phases  of  electrical  rate 
making. 

The  book  contains  eight  chapters,  also  a  number  of  diagrams  and 
curves  representing  electric  supply  and  conditions  of  electrical  rate , 
systems.  A  detailed  analysis  cannot  be  made  for  lack  of  space.  The 
subject  is  so  technical  and  complicated  tliat  a  reliable  comprehensive 
summary  of  the  content  and  point  of  view  is  difficult.  The  scope  of 
the  book  is  indicated  by  the  chapter  headings :  The  peculiar  interest 
and  importance  of  electrical  rates ;  Types  and  elements  of  electrical 
rates  described ;  The  reimbursement  of  separable  or  prime  cost ;  Class 
rates  and  rate  differentiation ;  Load-factor  rates ;  Wholesale  rates  and 
quantity  discounts ;  The  general  theory  of  differential  rates ;  Suggest- 
ions for  a  model  rate  schedule. 

The  author  describes  the  principal  classes  of  rates  ordinarily  em- 
ployed in  the  electrical  business  and  analyzes  them  from  the  economic 
background.  Perhaps  a  fair  general  statement  of  his  view  of  a  desir- 
able system  of  rates  is  that  each  consumer  or  group  of  consumers 
should  pay  as  nearly  as  possible  the  so-called  "separable"  or  "direct" 
or  "prime"  cost  which  is  incurred  directly  for  the  consumer  or  the 
group,  and  in  addition  should  contribute  to  the  remaining  "non- 
separable"  or  "joint"  or  "fixed"  costs,  including  return  on  investment, 
upon  such  "differential"  bases  as  will  obtain  the  maximum  economical 
utilization  of  the  plant  and  distribution  system. 

Rate  schedules  have  been  fixed  more  or  less  clearly  on  theories  of 
complete  cost  analysis,  with  the  general  effect  of  merely  pro-rating 
or  apportioning  the  non-separate  or  joint  costs  on  the  basis  of  assumed 
relative  demand  on  the  investment  in  plant  capacity.  This  is  usually 
determined  by  the  maximum  kilowatt  required  by  each  consumer  com- 
pared with  the  total  maxinmm  kilowatt  demand  upon  the  central 
station,  provided  for  directl}^  or  indirectly  by  a  "maximum  demand" 
charge.  Dr.  Watkins  distinguishes  such  maximum  demand  rates 
based  upon  cost  a])])ortionnient  from  differentiation,  which  has  in  view 
the  maximum  utilization  of  the  investment  and  seeks  the  apportion- 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       503 

ment  of  all  joint  costs  above  the  direct  or  separable  costs  with  the 
purpose  of  obtaining  such  maximum  economical  utilization. 

Dr.  Watkins  recognizes,  however,  that  in  special  instances  the  maxi- 
mum demand  of  the  consumer  is  a  proper  factor  in  rate  making:  where 
such  demand  actually  adds  correspondingly  to  the  peak  load  of  the 
system  and  requires  a  proportionate  additional  investment  in  plant 
capacity.  In  such  instances,  however,  the  demand  factor  becomes  in 
reality  a  separable  cost  chargeable  directly  to  the  consumer  and  not  a 
joint  cost  subject  to  differential  rate  grouping.  For  the  most  part, 
however,  individual  maximum  demands  have  little  relative  significance 
except  as  they  coincide  with  the  peak  load;  but  even  in  such  cases 
they  may  improve  the  load  factor  of  the  system  and  thus  diminish  the 
joint  costs  in  proportion  to  the  killowatt  hour  output.  But  if  the 
individual's  maximum  demand  does  not  coincide  with  the  system  peak, 
then  it  does  not  add  proportionately  to  the  central  station  require- 
ments and  does  not  furnish  a  direct  measure  of  joint  costs  with  which 
it  should  be  properly  charged.  If  it  comes  off  the  peak  entirely  it 
deserves  even  favorable  consideration  in  the  allocation  of  joint  cost. 
Moreover,  in  the  case  of  the  mass  of  small  consumers  there  is  no  prac- 
ticable measure  of  the  maximum  demand. 

The  system  as  a  whole  is  as  much  interested  in  filling  up  the  valley 
of  its  load  curve  as  in  keeping  down  the  peak.  A  controlling  con- 
sideration, therefore,  in  developing  a  system  of  differential  rates  is 
to  obtain  the  greatest  density  of  use  with  the  maximum  leveling  of 
the  load  curve.  A  proper  system  of  rates  would  thus  include  (1)  all 
direct  or  separable  costs  partly  as  a  consumer  or  meter  charge  and 
partly  as  a  flat  kilowatt  hour  charge  and  (2)  such  a  proportion  of  the 
joint  or  non-separable  costs  as  will  best  develop  the  business  to  maxi- 
mum utilization,  providing  however  that  all  joint  costs  incurred  by  the 
system  are  absorbed  by  the  total  charges  to  all  classes  of  consumers. 
A  model  rate  schedule  is  outlined  in  the  concluding  chapter.  This 
provides  for  a  maximum  demand  charge  for  large  consumers  where  the 
maximum  can  actually  be  measured  by  meter.  For  the  small  con- 
sumers, there  is  a  meter  charge  and  a  rather  low  kilowatt  hour  charge, 
with  a  discount  for  contribution  to  density  (a  measure  which  is  out- 
lined). Provision  is  made  also  for  special  rates  to  meet  practical 
conditions  which  cannot  be  provided  for  in  a  general  schedule. 

Dr.  Watkins  practically  adopts  the  common  policy  underlying 
railway  freight  rates,  although  because  of  the  character  of  the  busi- 
ness he  employs  an  altogether  different  group  of  technical  terms.  In 
effect  he  would  classify  the  service  on  the  basis  of  the  ability  of  each 
class  to  absorb  the  joint  or  non-separable  costs.  This  is  the  underlying 
technical  view  of  railway  freight  classifications  and  charging  "what  the 
traffic   will   bear."     This    appears    to   be   sound    principle;    it    avoids 


504  Reviews  and  New  Books  [September 

arbitrary  assignment  of  costs  to  particular  groups  of  service,  which 
may  retard  the  economical  utilization  of  the  plant  and  equipment  and 
would  result  in  greater  joint  costs  to  be  absorbed  by  all  other  classes 
of  consumers.  The  statement  of  principle,  however,  is  one  thing,  but 
practical  application  is  quite  another.  Differentiation  readily  shades 
into  discrimination  and  unjustified  rate  competition,  which  in  the  past 
characterized  the  railway  freight  rates  and  has  by  no  means  been 
absent  from  the  electrical  business.  This  danger,  however,  is  clearly 
recognized  by  Dr.  Watkins ;  but  with  clear  understanding  of  the 
danger  and  with  readiness  to  adjust  rates  that  prove  to  be  uneconom- 
ical, the  principle  of  rate  differentiation  appears  to  be  sound  and  should 
control  in  the  establishment  of  electrical  rate  schedules.  In  any  event, 
the  principle  can  be  worked  out  only  through  a  very  large  amount  of 
practical  experimentation. 

The  book  will  undoubtedly  be  read  chiefly  by  specialists  interested 
in  electrical  rate  making.  It  should  be  of  interest  and  great  value, 
however,  also  to  the  general  economist  in  that  in  presents  the  diffi- 
culties of  price  making  in  a  great  modern  industry.  It  furnishes  an 
excellent  opportunity  to  match  up  very  carefully  one's  ideas  of  mar- 
ginal utility  or  supply  and  demand  in  determining  actual  prices  charged 
in  the  sale  of  an  important  service. 

John  Bauer. 

New  York  City. 

NEW   BOOKS 

AsPLEY,  J.  C.  How  to  sell  quality;  a  resume  of  methods  successfully  used 
by  proviinent  salesmen  to  meet  price  competition;  hold  customers  for  the 
future  and  to  cement  good-will.  Second  edition.  (Chicago:  Dartnell 
Corporation.      1922.      Pp.    111.      $1.10.) 

.      What  a  salesman  should  knoxv  about  credits.      Third  revised 


edition.      (Chicago:  Dartnell  Corporation.      1921.      Pp.  v,  102.     $1.10.) 

Bassett,  W.  R.  Getting  a  profit  out  of  low  prices.  Tlie  Sphinx  Talks, 
May,  1922.  (New  York:  Miller,  Franklin,  Bassett  &  Co.,  3i7  Madison 
Ave.      1922.      Pp.  15.      10c.) 

Batakdon,  1j.  Traite  pratique  des  socictes  commerciales  au  point  de  vue 
comptable,  juridiquc  ct  fiscal.  (Paris:  Lib.  Dunod.  1922.  Pp.  890. 
55  fr.) 

Benson,  P.  A.  and  North,  N.  L.,  Jh.  Real  estate  principles  and  prac- 
tices.     (New  York:  Prentice-Hall.      1922.      Pp.  x,  312.) 

Black,  H.  C.  A  treatise  on  the  law  and  practice  of  bankruptcy,  under  the 
act  of  Congress  of  hS!>S,  and  its  amcndtnenis.  Third  edition.  (Kansas 
City,  Mo.  :  Vernon  Law  Book  Co.      1922.) 

Bull,  A.  E.  Buying  goods;  the  commercial  buyer  and  his  work.  (New 
York:  Pitman.      1922.      Pp.  vii,  9G.) 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       505 

BuRCHELL,  D.  E.  Industrial  accounting.  (Cambridge,  Mass.:  Author. 
1921.) 

Calkins,   E.    E.      The    advertising    man.      (New    York:    Scribner's.      1922. 

Pp.  205.      $1.25.) 
Cannons,    H.    G.    T.      Bibliography    of    industrial    efficiency    and   factory 

management.      (New  York:  Dutton.      1922.      $5.) 

Chaffee,  F.  E.  and  Kerby,  M.  Self-service  in  the  retailing  of  food  pro- 
ducts. Department  of  Agriculture  bull.  no.  1044.  (Washington:  Supt. 
Docs.      1922.      Pp.  52.      10c.) 

Charters,  W.  W.  IIoic  to  sell  at  retail.  (Boston:  Houghton  Mifflin.  1922. 
Pp.  viii,  326.     $3.) 

The  method  employed  in  the  writing  of  this  volume  is  "that  of  finding 
out  practical  difficulties  of  salesmen,  collecting  the  practical  methods  used 
by  expert  salespeople  in  meeting  these  difficulties,  and  using  the  princi- 
ples to  explain  the  methods."  Sixty  difficulties  encountered  by  retail 
salespeople  are  listed.  Twenty-five  people  were  trained  in  the  methods 
of  interview,  after  which  training  they  had  conferences  with  three  hundred 
expert  salespeople  selected  from  large  department  stores.  By  this  means 
methods  used  by  from  thirty  to  one  hundred  and  ten  experts  in  handling 
each  difficulty  have  been  gathered  and  organized  in  the  text. 

Clark,  W.  I.  Health  service  in  industry.  (New  York:  Macmillan.  1922. 
Pp.  ix,  168.) 

Coleman,  E.  J.  Cost  accounting  in  the  canning  industry.  Official  publi- 
cations, vol.  Ill,  no.  17.  (New  York:  National  Assoc,  of  Cost  Account- 
ants.     1922.      Pp.  19.      75c.) 

CoNYNGTox,  T.,  Bennett,  R.  J.  and  Pinkerton,  P.  W.  Corporation  pro- 
cedure; laiv — finance — accounting.  (New  York:  Ronald.  1922.  Pp. 
XX,  1689.     $10.) 

CoNYNGTON,  T.,  Knapp,  H.  C,  and  Pinkerton,  P.  W.  Wills,  estates,  and 
trusts:  a  manual  of  law,  accounting,  and  procedure,  for  executors,  admin- 
istrators, and  trustees.  Two  vols.  (New  York:  Ronald.  1921.  Pp. 
825.     $8.) 

Two  members  of  the  New  York  Bar,  Messrs.  Thomas  Conyngton  and 
Harold  C.  Knapp,  and  an  associate  of  the  American  Institute  of  Ac- 
countants, Mr.  Paul  W.  Pinkerton,  have  cooperated  in  the  publication 
of  these  two  volumes.  The  purpose  is  to  provide  a  working  manual  for 
executors,  administrators,  and  trustees.  The  subject-matter  is  grouped 
as  follows:  part  I,  Transfer  of  property  by  death;  part  II,  Settlement  of 
estates;  part  III,  Taxes;  part  IV,  The  law  of  trusts;  part  V,  Banks  and 
trusts  companies  as  trustees ;  part  VI,  Accounting  for  estate  of  decedents ; 
part  VII,  Forms. 

Curry,  P.  E.  and  Rubert,  V.  M.  Business  arithmetic.  (Cincinnati,  O.: 
South-western  Pub.  Co.      1922.      Pp.  320.     $1.32.) 

Edgerton,  E.  I.  and  Bartholomew,  W.  E.  Business  mathematics.  A 
textbook  for  schools.      (New  York:  Ronald.      1921.      Pp.  305.) 

Contains  chapters  on  Sales  and  Profits,  Statistics,  Pay-roll  Calcu- 
lations, Interest,  Depreciation,  Insurance,  Exchange,  Taxes,  Interest  on 
Bank  Accounts,  Graphical  Representation,  Averages,  Commercial  Appli- 
cations of  Logarithms. 


506  Reviews  and  Nexv  Books  [September 

EsQUERRE,  p.  J.  Practical  accounting  problems,  theorij,  discussion,  and 
solutions.      Part  II.      (New  York:  Ronald.      1922.) 

Fleming,  A.  P.  M.  and  Pearce,  J.  G.  Research  in  industry;  the  basis  of 
economic  progress.      (New  York:  Pitman.      1922.      Pp.  xv,  244.) 

Frothingham,  F.  E.  Muscle  Shoals  from  the  banker's  point  of  view. 
(Boston:  Author,  Coffin  &  Burr.      1922.      Pp.   12.) 

Gertsenberg,  C.  W.  The  lata  of  bankruptcy.  (New  York:  Prentice-Hall. 
1922.      Pp.  200.      $2.50.) 

Haenisch,  F.  a.  Some  cost  problems  in  the  Hawaiian  sugar  industry. 
Official  publications,  vol.  Ill,  no.  4.  (New  York:  National  Assoc,  of 
Cost  Accountants.      1921.      Pp.  16.      75c.) 

The  fifty  or  so  plantations  are  controlled  by  the  Hawaiian  Sugar 
Planters'  Association.  The  cost  accounting  of  the  industry  is  being 
standardized  more  and  more,  and  is  here  discussed  under  headings  in- 
cluding Labor  (the  most  important  item,  and  that  involving  the  greatest 
problems).  Operating  Expenses,  The  Cultivating  Contract,  Pay  Roll 
Analysis,  Manufacture  and  Shipment  of  Sugar,  By-Products,  Indirect 
Expenses,  and  Fixed  Charges.  The  last  includes  the  "bonus"  which  is 
paid  on  the  basis  of  the  price  of  sugar  in  New  York,  regardless  of  the 
profit  or  loss  of  the  individual  plantation  paying  the  bonus. 

Hayward,  W.  R.  and  Price,  I.  Progressive  problems  in  bookkeeping  and 
accountancy.      (New  York:  Macmillan.      1922.      Pp.  viii,  149.      80c.) 

Hazell,  W.  H.  H.  Costing  for  manufacturers.  (London:  Nisbet.  1922. 
Pp.  161.      12s.  6d.) 

Hoenig,  L.  J.  Modern  methods  in  selling;  a  book  for  every  man  and 
woman  in  business.      (Indianapolis:  Bobbs-Merrill  Co.    1922.      Pp.  299.) 

Howe,  J.  A.  Iowa  probate  law;  the  settlement  of  estates,  legal  duties  of 
executors,  administrators,  guardians  and  trustees.  (Des  Moines,  la.: 
Registers  and  Tribune  Job  Office.      1922.      Pp.125.) 

Hysell,  II.  The  science  of  purchasing.  (New  York:  Appleton.  1922. 
Pp.  xi,  261.      $2.50.) 

Jesness,  O.  B.  Cooperative  marketing.  Circular  no.  115.  (Lexington, 
Ky. :  Univ.  of  Kentucky,  College  of  Agriculture,  Extension  Div.  1922. 
Pp.  22.) 

KoKiNs,  I.  W.  The  scrap  problem.  (New  York:  National  Assoc,  of  Cost 
Accountants.      1922.) 

Krause,  L.  B.  Better  business  libraries;  talks  with  executives.  (Chicago: 
The  Indexers  Press,  5526  S.  Park  Ave.      1922.      Pp.  97.      $1.30.) 

Lauck,  W.  J.  and  Watts,  C.  S.  The  industrial  code.  A  survey  of  the 
post-war  industrial  situation,  a  review  of  wartime  developments  in  in- 
dustrial relations,  and  a  proposal  looking  to  permanent  industrial  peace. 
(New  York:  Funk  &  Wagnalls.      1922.      Pp.  v,  571.      $4.) 

Lent,  F.  Grundriss  der  Freiwilligen  Gerichtsbarkeit.  (Leipzig:  Deit- 
chertsche  Verlagsbuchhandlung.      1922.      Pp.   108.      110   M.) 

A  minute  account  of  the  conditions  of  'voluntary   arbitration'  of  civil 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       507 

cases  in  Germany  and  of  the  proceedings  in  them,  with  a  classification  of 
such  cases  as  are  within  the  competence  of  the  courts  of  arbitration. 

R.  R.  W. 

LoNCEL,  E.  Calcul  du  rendement  des  obligations  ci  long  terme.  (Paris: 
Boyveau  et  Chevillet.      1922.      Pp.  88.) 

Lord,  I.  E.  Getting  your  money's  worth;  a  booh  on  expenditure.  (New 
York:  Harcourt,  Brace  &  Co.      1922.      Pp.  vi,  210.) 

Marshall,  L.  C.  Cases  and  problems.  No.  1,  The  Noel  Slate  and  Manu- 
facturing Company.  Materials  for  the  study  of  business.  (Chicago: 
Univ.  of  Chicago  Press.      1922.      Pp.   52.      52c.) 

MuNN,  G.  G.  The  paying  teller's  department.  (New  York:  Bankers  Pub. 
Co.      1922.      Pp.    144.) 

Oertmanx,  p.  Die  Geschdftsgrundlage;  ein  neuer  Rechtsbegriff.  (Leip- 
zig:  Deichertsche  Verlagsbuchhandlung.      1921.      Pp.    179.      150   M.) 

A  discussion  of  the  conditions  of  business  contracts  and  of  obligations 
under  testaments,  and  of  the  cases  in  which,  owing  to  a  change  of  circum- 
stances, such  obligations  mav  be  annulled  according  to  German  law. 

R.  R.  W. 

Parsons,  T.  Laws  of  business  for  all  the  states  and  territories  of  the 
Union  and  the  Dominion  of  Canada.  New  enlarged  edition.  (New  York: 
Doran.      1922.      Pp.  xix,  961.     $6.) 

Pilling,  E.  W.  Premium  bond  values  tables;  showing  values  of  and 
yields  from  bonds  redeemable  at  a  price  other  than  par.  (Boston:  Finan- 
cial Pub.  Co.      1922.      Pp.  75.     $7.50.) 

PiXLEY,  F.  W.,  editor.  The  accountant's  dictionary.  Two  vols.  Vol.  L 
(New  York:  Pitman.      1922.      Pp.  495.     $18.) 

Robert,  U.  and  Mulhern,  J.  J.  Cost  accounting  in  the  oil  refining  in- 
dustry. Official  publications,  vol.  Ill,  no.  18.  (New  York:  National 
Assoc,  of  Cost  Accountants.      1922.      Pp.   12.      75c.) 

Phases  of  oil  refining  operations,  organization  of  the  cost  department, 
classification  of  accounts,  accumulation  of  costs  by  processes  and  depart- 
ments, apportionment  of  process  costs,  and  delivery  cost  records  are 
described. 

Sapiro,  a.  Addresses  on  cooperative  marketing.  (Toronto,  Ontario:  On- 
tario Dept.  of  Agri.      1922.      Pp.  39.) 

She.\ffer,  W.  a.  Metropolitan  system  of  bookkeeping,  embracing  theory 
and  practice  of  bookkeeping  and  accounting  for  high  schools,  parochial 
schools,  academies  and  all  other  schools  teaching  the  subject.  New 
edition.      (Chicago:  Metropolitan  Text  Book  Co.      1921.      Pp.  208.) 

Shrubsall,  F.  W.  Efficient  salesmanship;  the  organization  and  manage- 
ment of  the  sales  department.  (New  York:  Pitman.  1922.  Pp.  ix, 
117.      85c.) 

SouRiAU,  M.  Notions  de  sociologie  appliquee  a  la  morale  et  a  I'education. 
(Paris:  F.  Nathan.      1921.      Pp.  141.) 

Spencer,  W.  H.  Law  and  business.  Vol.  Ill,  Laic  and  risk-bearing ;  law 
and.  labor;  law  and  the  form  of  the  business  unit.  (Chicago:  Univ.  of 
Chicago   Press.      1922.      Pp.   xviii,   653.      $4.50.) 


508  Reviews  and  New  Books  [September 

Spilker,  J.   B.   and   Cloud,   P.   G.     Real  estate  business  as  a  profession. 
(Cincinnati,  O. :  Stewart,  Kidd  Co.      1922.) 

Stockder,  a.    H.     Business   oumership   organization.      (New  York:   Holt. 
1922.      Pp.  xvii,  612.) 

Strong,  E.  K.  Jr.      The  psychology  of  selling  life  insurance.      (New  York: 
Harper  Bros.      1922.      Pp.  xii,  489.      $i.) 

The  author's  intention  to  present  a  "psychology  that  would  explain  in 
non-technical  language  the  principles  of  selling  life  insurance"  has  been 
effectively  and  interestingly  accomplished.  He  replaces  the  customary 
elaborate  description  of  supposed  states  of  mind  with  definite  functional 
facts ;  he  replaces  salesmanship  deduced  from  theoretical  psychology 
with  practical  psychology  induced  from  actual  sales  experiences.  The 
complete  quotation  of  several  of  these  sales  experiences  serves  in  general 
as  the  nucleus  of  the  volume,  and  in  particular  drives  home  the  author's 
reiteration  that  the  salesman  must  think  out  concretely  and  specifically 
his  "strategy  of  selling"  for  each  individual  prospect.  The  book  is  so 
definitely  and  concretely  organized,  and  so  profuse  with  forceful  illus- 
trations that  it  cannot  but  stimulate  any  salesman  to  a  more  vigorous 
service.  Charles  Leonard  Stone. 

SzEPEsi,  E.  Cost  control  and  accounting  for  textile  mills.  (New  York: 
Bragdon,  Lord  &  Nagle  Co.      1922.      Pp.  xxiv,  441.) 

Tipper,  H.  Hitman  factors  in  industry,  a  study  in  group  organization. 
(New  York:  Ronald  Press  Co.      1922.      Pp.  280.     $2.) 

Virgin,  R.  Z.  Mine  managevient;  a  practical  handbook  for  use  in  voca- 
tional schools,  mining  colleges  and  universities.  (New  York:  D.  Van 
Nostrand  Co.      1922.      Pp.  xi,  109.     $2.) 

Waite,  J.  B.  The  latv  of  sales.  (Chicago:  Callaghan.  1921.  Pp.  xii, 
385.) 

Walter,  F.  W.,  editor.  The  retail  charge  account.  Prepared  under  the 
direction  of  the  educational  committee  of  the  Associated  Retail  Credit 
Men  of  New  York  City,  Inc.  (New  York:  Ronald.  1922.  Pp.  xiii, 
204.     $3.) 

Whitehead,  E.  J.  The  laxo  of  real  property  in  Illinois.  (Chicago:  B.  J. 
Smith  &  Co.      1922.) 

WiLLARD,  R.  E.  Simple  farm  accounts;  a  textbook  and  guide.  (Fargo, 
N.  D.:  Author.      1922.      Pp.  100.      $1.75.) 

ZoELLER,  K.  W.  Merchandising  the  plumbing  busitiess.  (Chicago:  Dom- 
estic Engg.  Co.      1921.      Pp.  107.) 

Commercial  libraries  and  the  department  of  commerce.  (Washington: 
Special  Libraries  Assoc.      1922.      Pp.  23.) 

Cooperative  competition.  Twenty-five  illuminating  articles  on  trade  asso- 
ciations tcith  an  introductory  article  by  Herbert  Hoover.  (New  York: 
Evening  Post.      1922.) 

Course  in  textile  production  methods.  Vol.  I,'  Team  leadership.  (New 
York:  Business  Training  Corporation.      1922.      Pp.   138.) 


1922]  Capital  and  Capitalistic  Organization  509 

The  ethics  of  the  professions  and  of  business.  The  Annals,  vol.  XI,  no. 
190.      (Philadelphia:  Am.  Academy  Pol.  and  Soc.  Sci.      1922.      Pp.  315. 

$1.) 

Forty-seventh  annual  report  of  the  council  of  the  Corporation  of  Foreign 
Bondholders.  For  the  year  1920.  (London:  Corporation.  1921.  Pp. 
370.     2s.  6d.) 

A  general  charter  for  trade  associations.  (New  York:  Federal  Trade 
Information  Service.      1922.      Pp.   46.     25c.) 

Handbook  of  listed  foreign  bonds.  (New  York:  McKinley  &  Morris.  1921. 
Pp.  55.     $1.) 

Hiring  men  because  they  control  accounts.  (New  York:  Am.  Assoc,  of 
Advertising  Agencies.      1922.      Pp.  22.) 

Method  in  merchandising.  (Grand  Rapids,  Mich. :  Welch-Wilmarth  Com- 
panies.     1922.     Pp.  48.) 

Operating  accounts  for  retail  shoe  stores.  Harvard  University  Bureau  of 
Business  Research,  bull.  no.  2.  Third  edition.  (Cambridge:  Harvard 
Univ.  Press.      1921.      Pp.  47.     $1.) 

Operating  expenses  in  the  wholesale  grocery  business,  in  1921.  Harvard 
University  Bureau  of  Business  Research,  bull.  no.  30.  (Cambridge: 
Harvard  Univ.   Press.      1922.      Pp.   39.     $1.) 

Psychological  tests  in  industry.  Bull.  no.  49.  (New  York:  Russell  Sage 
Foundation  Library.      1921.'     Pp.4.     10c.) 

Retail  grocery  stores.  A  study  of  certain  problems  of  the  retail  grocer 
in  New  York  City  including  the  results  of  investigations  conducted  during 
the  war  period  by  the  New' York  Federal  Food  Board  and  the  New  York 
State  Food  Commission.  (Albany:  N.  Y.  State  Dept.  of  Farms  and 
Markets.      1922.      Pp.  29.) 

Selected  professional  and  business  books.  (Boston:  Scovell,  Wellington  & 
Co.      1922.     Pp.  25.) 

System  of  stock-keeping  for  retail  shoe  stores.  Harvard  University  Bu- 
reau of  Business  Research,  bull.  no.  7.  Revised  edition.  (Cambridge: 
Harvard  Univ.  Press.      1922.      Pp.  22.     $1.) 

Capital  and  Capitalistic  Organization 

NEW     BOOKS 

Ettinger,   R.    p.      Corporation   lazes   of  New    York:   reprint   of   the   New 

York  laws  governing  corporations,  partnerships  and  associations.      (New 

York:  Prentice-Hall.      1921.      Pp.  374.) 
Isaac,  C.  P.      The  menace  of  money  power.      (London:  Cape.      1921.     Pp. 

294.) 
LoEB,   C.    G.     Legal   status   of   American    corporations    in    France.      (New 

York:  N.  A.  Phemister  Co.,  42  Broadway.      1922.      Pp.  578.     $12.) 

McCoy,  W.  A.  Business  trust  agreements  and  declarations  of  trust.  (Pitts- 
burgh, Pa. :  McCoy's  Organizing  Bureau.      1922.     Pp.259.     $10.) 


510  Reviews  and  New  Books  [September 

Murray,  W.  S.  Government  oxvned  and  controlled,  compared  with  pri- 
vately oxvned  and  regulated  electric  utilities  in  Canada  and  the  United 
States.      (New  York:  National  Electric  Light  Assoc.      1922.      Pp.  223.) 

Rees,  J.  M.  Trusts  in  British  industry,  191Jf-1921.  (London:  King. 
1922.) 

The  federal  antitrust  laws  with  amendments.  (Washington:  Supt.  Docs. 
1922.      10c.) 

New  York  lazes  affecting  business  corporations;  revised  to  May  1,  1922. 
Edited  by  .L  B.  R.  Smith.  (New  York:  U.  S.  Corporation  Co.,  65  Cedar 
St.      192*2.      Pp.  xxxii,  260.     $2.) 

Labor  and  Labor  Organizations 

The  Human  Factor  in  Business.  By  B.  Seebohm  Rowntree.  (Lon- 
don: Longmans,  Green  and  Company.      1921.  Pp.  ix,  176.  $2.00.) 

Mr.  Rowntree  has  given  us  in  this  book  both  a  description  of  the 
many-sided  plan  of  industrial  relations  in  the  famous  Cocoa  Works  at 
York — and  a  statement  of  his  own  views  on  many  aspects  of  the  labor 
problem.  His  viewpoint  is  that  of  the  social  reformer,  but  the  personal 
experience  on  which  he  draws  is  that  of  a  large  employer  and  a  public 
official  in  intimate  contact  with  the  problems  which  he  discusses.  His 
primary  purpose  is  to  describe  the  ways  in  which  his  company  has 
attempted  to  meet  the  human  needs  of  the  workers  and  the  results 
which  have  been  obtained.  This  has  led  him  to  discuss  in  a  general 
way  what  these  needs  are  and  how  far  and  through  what  means  they  can 
be  met  in  modern  industry. 

The  descriptive  material  and  much  of  the  general  discussion  is  ar- 
ranged under  the  five  headings  of  wages,  hours,  security  of  life,  joint 
control  and  good  working  conditions.  The  last  topic  includes  training 
of  the  workers,  medical  service,  and  kindered  phases  of  "welfare  work." 
This  chapter  is  the  longest  of  the  book,  occupying  almost  half  of  the 
156  pages  of  text.  In  the  determination  of  wages  and  hours,  the 
system  of  employee  representation  within  tiie  plant  is  coordinated  with 
trade-union  participation  in  control  and  with  the  joint  regulation  of 
the  whole  industry  by  the  Interim  Industrial  Reconstruction  Com- 
mittee. It  is  interesting  to  see  how  these  three  types  of  workers'  parti- 
cipation in  control  function  in  relation  to  each  other.  The  chapter 
on  security  of  life  reveals  the  inadequacy  of  the  state  system  of  social 
insurance  and  siiows  how  it  has  been  supplemented  by  contributory  and 
non-contributory  (from  the  workers)  provision  for  unemployment, 
sick,  invalidity  and  death  benefits  and  old  age  and  widows'  pensions. 

Mr.  Rowntree  presents  his  conclusions  as  to  needs,  ideals,  and  possi- 
bilities of  achievement  in  the  fields  of  labor  conditions,  control,  and 
rewards,  with  modesty  and  open-mindedness.  He  is  impressed  by  the 
limitations  imposed  by  cost  and  by  the  necessity  of  increasing  pro- 


1922]  Labor  and  Labor  Organizations  511 

duction  if  the  standard  of  living  of  tlie  workers  is  to  be  raised  to  the 
level  which  he  advocates.  This  comes  out  clearly  in  the  conclusion  that 
hours  should  not  be  reduced  below  forty-eight  a  week  in  most  industries 
unless  the  reduction  is  necessary  for  the  preservation  of  health  or  can 
be  made  without  materially  increasing  the  cost  of  production.  "We 
are  so  much  nearer  the  ideal  as  regards  hours  than  wages,"  he  writes, 
"that  the  latter  should  take  precedence  over  the  former  where  the 
claims  of  the  two  conflict."  It  is  characteristic  of  the  book  that  he 
then  goes  on  to  report  that  the  reduction  of  hours  to  forty-four  a 
week  in  his  own  plant  was  followed  by  no  reduction  in  the  output  of  the 
hand  workers  and  by  a  pro-rata  reduction  for  only  a  part  of  the  ma- 
chine tenders,  whereas  the  effect  on  the  health  of  the  employees  was 
decidedly  beneficial. 

D.  A.  McCabe. 
Princeton  University. 

NEW    BOOKS 

Amar,  J.  The  human  motor:  the  scientific  foundations  of  labor  and  in- 
dustry.     (New  York:  Button.      1922.     $10.) 

Anderson,  G.  J.  Labor  policy  in  the  bituminous  coal  industry.  (New 
York:  Author;  Curtis,  Fosdick  &  Belknap,  Wool  worth  Bldg.      1922.      Pp. 

41.) 

AssAN,  G.  G.  La  question  du  controle  ouvrier  en  Italic,  avec  un  apergu 
dans  les  autres  pays.      (Paris:  Giard.      1922.      Pp.   177.      10  fr.) 

Bloch,  L.  The  coal  miners'  insecurity.  Facts  about  irregularity  of  em- 
ployment in  the  bituminous  coal  industry  in  the  United  States.  (New 
York:  Russell  Sage  Foundation.      1922.      Pp.  50.      oOc.) 

Bowie,  J.  A.  Sharing  profits  with  employee;  a  critical  study  of  methods 
in  the  light  of  present  conditions.      (London:  Pitman.      1922.      10s.  6d.) 

Broda,  R.  Les  resultats  de  I'appUcation  du  salaire  minimum  pendant  et 
depuis  la  guerre.      (Bern:  Ernest  Bircher.      1922.      Pp.  .'J9.      10  fr.) 

Clay,  A.      Syndicalism  and  labour.      (New  York:  Button.      1922.      $3.) 

Brew,  W.  Building  and  the  public.  No.  51.  (New  York:  National 
Assoc,  of  Manufacturers,  50  Church  St.      1922.      Pp.   23.) 

BuBLiN,  L.  I.  and  Leiboff,  P.  Occupation  hazards  and  diagnostic  signs. 
A  guide  to  impairments  to  be  looked  for  in  hazardous  occupations.  Bureau 
of  Labor  Statistics,  bull.  no.  306.  (Washington:  Supt.  Bocs.  1922. 
Pp.   31.      5c.) 

Gilchrist,  R.  N.  Conciliation  and  arbitration.  Bulletins  of  Indian  in- 
dustries and  labor,  no.  23.  (Calcutta:  Supt.  Gov.  Prtg.  1922.  Pp. 
237.) 

Hapgood,  p.  In  non-union  mines.  Diary  of  a  coal  miner  in  rvestern  Penn- 
sylvania. (New  York:  Bureau  of  Industrial  Research,  289  Fourth  Ave. 
1922.      50c.) 


512  Reviews  and  New  Books  [September 

HuGGiNS,  W.  L.  Labor  and  democracy.  (New  York:  Macmillan.  1922. 
Pp.  xii,  213.     $1.25.) 

Macrae-Gibson,  J.  H.      The  Whitley  system  in  the  civil  service.      (London: 

Fabian  Soc.      1922.      Is.) 
Morrow,  E.  H.      The  Lynn  plan  of  representation.      (Lynn,  Mass.:  General 

Electric  Co.      1922.) 

Pic,  p.  Traite  elementaire  de  legislation  industrielle.  Les  lois  ouvrieres. 
(Paris:  Lib.  Arthur  Rousseau.      1922.      Pp.  1044.      35  fr.) 

PiCARD,  R.  Le  controle  ouvrier  sur  la  gestion  des  entreprises.  (Paris: 
Marcel  Rivieres.      1922.      Pp.  280.     4.50  fr.) 

Phillips,  M.  The  young  industrial  worker.  (London:  Oxford  Univ. 
Press.      1922.      4s.  6d.) 

Roger,  F.  La  reforme  du  regime  fonder  en  France.  (Paris:  Lib.  Marchal 
et  Billard.      1922.      Pp.  250.      10  fr.) 

Sargent,  N.  Hoxv  the  open  shop  brings  prosperity.  No.  50.  (New 
York:  National  Assoc,  of  Manufacturers,  Open  Shop  Department,  50 
Church  St.      1922.      Pp.  23.) 

Savoy,  E.  La  charte  internationale  du  travail.  (Fribourg:  Saint  Paul. 
1921.      Pp.  31.) 

Stockton,  F.  T.  The  International  Molders  Union  of  North  America. 
(Baltimore:  Johns   Hopkins   Press.      1921.      Pp.   222.     $1.50.) 

This  monograph  is  a  detailed  study  of  one  of  the  oldest  of  American 
trade  unions.  Organized  in  1859,  the  molders  union  has  always  been  a 
militant  one  and  reflects  in  its  development  and  policies  the  changing 
conditions  in  American  industry.  After  the  first  two  chapters  on  the 
rise  of  the  early  local  unions  and  the  founding  of  the  international  union, 
which  are  mainly  chronological.  Dr.  Stockton  develops  his  subject  along 
topical  lines.  Separate  chapters  on  government,  jurisdiction,  member- 
ship, finance,  mutual  insurance,  the  control  of  strikes,  national  collective 
bargaining,  the  standard  rate,  molding  machinery,  and  the  closed  shop, 
the  label  and  the  boycott  show  how  and  why  certain  developments  and 
policies  have  come  about.  Some  aspects  of  the  union's  development  are, 
however,  not  mentioned,  as,  for  example,  the  movement  for  cooperative 
production  under  President  Sylvis  from  1866-1868  which,  because  it 
failed,  led  to  renewed  emphasis  on  trade-union  policies.  The  mono- 
graph is  thoroughly  documented  and  while  not  affording  new  viewpoints, 
the  details  brought  out  enlarge  our  knowledge  of  trade  unionism. 

George  M.  Janes. 

SuTCLiFFE,  J.  T.  A  history  of  trade  unionism  in  Australia.  (Melbourne: 
Macmillan.      1921.      Pp.   194.) 

Wilson,  J.  M.  C.  The  labor  movement  and  the  church.  (Boston:  Strat- 
ford Co.      1922.      Pp.  73.) 

Constructive  experiments  in  industrial  cooperation  betxceen  employers  and 
employees.  A  series  of  addresses  and  papers  presented  at  the  annual 
meeting  of  the  Academy  of  Political  Science  in  the  City  of  New  York, 
November  4-6,  1921.  Proceedings,  vol.  IX,  no.  4.  (New  York:  The 
Academy,  Columbia  Univ.     1922.     Pp.  vii,  256.) 


1922]  Labor  and  Labor  Organizations  513 

The  cost  of  living  among  "wage  earners,  anthracite  region  of  Pennsylvania, 
February,  1922.  Special  report  no.  21.  (New  York:  National  Indus- 
trial Conference  Board.      1922.      Pp.  41.) 

Experience  with  zcorks  councils  in  the  United  States.  Research  report  no. 
50.  (New  York:  National  Industrial  Conference  Board.  1922.  Pp. 
190.     $2.00.) 

Individual  differences  in  the  output  of  silk-weavers.  Reports  of  the  Indus- 
trial Fatigue  Research  Board.      (London:  King.      1922.      Is.  6d.) 

The  International  Labor  Organisation  of  the  League  of  Nations.  Research 
report  no.  48.  (New  York:  National  Industrial  Conference  Board.  1922. 
Pp.  160.     $2.) 

Joint  Board  of  Sanitary  Control  in  the  Cloak,  Suit  and  Skirt  and  Dress  and 
Waist  Industries,  eleventh  annual  report,  1922.  (New  York:  Board, 
131  E.  17th  St.     1922.     Pp.  32.) 

Labour  legislation  in  Canada  for  1921.  (Ottawa:  Dept.  of  Labour.  1922. 
Pp.  96.) 

Labour  organization  in  Canada  for  1921.  Eleventh  annual  report.  (Ottawa: 
Dept.  of  Labour.      1922.      Pp.  302.) 

Manual  of  the  labor  laws  enforced  by  the  Department  of  Labor  and 
Industries,  November,  1921.  (Boston:  Mass.  Dept.  of  Labor  and  Indus- 
tries.     1922.     Pp.  xiv,  162.) 

New  York  labor  lazes  enacted  in  1922.  Special  bull.  no.  111.  (Albany: 
State  Dept.  of  Labor.      1922.     Pp.  38.) 

Plan  of  employee  representation.      (New  York:  N.  Y.  Telephone  Co.  1922.) 

Railroad  wages  and  working  rules.  Research  report  no.  46.  (New  York: 
National  Industrial  Conference  Board.      1922.      Pp.  viii,  130.     $2.) 

Report  of  the  Department  of  Labour  for  the  fiscal  year  ending  March  31, 

1921.  (Ottawa:  Dept.  of  Labour.      1921.      Pp.  135.) 

The  third  International  Labour  Conference,  October-November,  1921. 
(Geneva:  International  Labour  Office.      1922.      Pp.  36.) 

Trade  boards.  Report  of  Departmental  Committee  on  the  working  and 
effects  of  the  trade  boards  acts.      (London:   H.   M.'s   Stationery  Office. 

1922.  2s.) 

Unemployment;  a  selected  bibliography.  Bull.  no.  50..  (New  York: 
Russell  Sage  Foundation  Library.      1921.     Pp.  4.       lOe.) 

Wages  and  hours  in  anthracite  mining,  June,  191^ — October,  1921,  inclu- 
sive. Research  report  no.  47.  (New  York:  National  Industrial  Con- 
ference Board.      1922.      Pp.  67.      $1.50.) 

Wirtschaftliches  Arbeitnehmer-Taschenbuch.  (Stuttgart:  Volksverlag  fiir 
Wirtschaft  und  Verkehr.      1922.      Pp.  208.) 

Women  in  Georgia  industries:  a  study  of  hours,  wages,  and  working  condi- 
tions. Bull,  of  the  Women's  Bureau,  no.  22.  (Washington:  Supt.  Docs. 
1922.      Pp.  89.) 


514  Reviews  and  New  Books  [September 

Money,  Prices,  Credit,  and  Banking 

Banking  and  Business.  By  H.  Parker  Willis  and  George  W. 
Edwards.  (New  York:  Harper  and  Brothers.  1922.  Pp.  x, 
573.     $3.50.) 

It  is  the  belief  of  the  authors  of  Banking  and  Business  that  the 
orthodox  metliod  of  introducing  the  prospective  business  executive  to 
the  financial  aspects  of  his  job  is  ineffective.  Almost  without  ex- 
ception, the  books  which  have  been  designed  for  use  in  the  introductory 
course  in  business  finance  have  begun  with  an  account  of  the  evolution 
of  media  of  exchange,  proceeded  to  the  traditional  presentation  of 
the  theory  of  money  and  prices,  and  ended  with  a  discussion  of  the 
nature  of  banking  organization  and  operations,  with  special  reference 
to  the  relation  of  these  operations  to  the  mechanism  of  exchange. 

The  present  volume  contains  only  a  modicum  of  monetary  theory,  in- 
troduced largely  for  the  sake  of  throwing  light  upon  certain  points 
in  the  discussion  of  banking  operations.  After  a  brief  first  part  de- 
voted to  general  preliminary  topics  such  as  the  nature  of  exchange, 
credit  and  credit  instruments,  and  the  classification  of  banking  insti- 
tutions, the  extended  discussion  of  commercial  bank  organization  and 
methods  is  taken  up.  The  financial  needs  of  the  business  man  rather 
than  the  profits  of  the  banker  or  the  public  aspects  of  finance  are  the 
primary  concern  of  the  authors,  although  consideration  is  given  to 
some  of  the  broader  aspects  of  public  regulation  and  to  banking  poli- 
cies and  practices  abroad.  In  part  three  are  grouped  the  so-called 
non-commercial  banking  institutions :  the  bond  house,  the  savings  bank, 
and  the  trust  company.  For  part  four  have  been  reserved  those  "more 
theoretical  and  historical  sides  of  the  subject"  which  usually  precede 
the  discussion  of  organization  and  methods.  Here  the  student  is  intro- 
duced to  the  principal  foreign  banking  systems,  to  the  history  of 
American  banking,  the  organization  and  functions  of  the  federal  re- 
serve system  and  the  relation  of  banking  and  government.  Very  brief 
consideration  is  also  given  to  tlie  question  of  tlie  value  of  money,  the 
relation  of  banking  to  the  medium  of  exchange  and  to  the  theory  of 
prices. 

A  somewhat  unusual  feature  is  the  addition  of  a  series  of  appendices 
containing  su})plementary  readings  and  a  group  of  foreign  bank 
statements  for  use  in  connection  with  the  appropriate  part  of  the 
main  text. 

The  book  is  tlioroughly  readable  and  undoubtedly  will  prove  as 
thoroughly  teachable.  In  tlie  opinion  of  the  reviewer,  its  chief  de- 
fects are  (1)  its  failure  to  im])ress  upon  the  reader  the  fact  that  the 
various  financial  institutions  are  ])arts  of  an  interrelated  system;  that 
they  are  all  eiigagid  in  various  phases  of  a  common  task,  viz.,  providing 


1922]  Money,  Prices,  Credit,  and  Banking  515 

an  adequate  supply  of  spendable  funds  to  business  enterprises.  (2) 
Although  the  order  of  presentation  adopted  by  the  authors  undoubt- 
edly more  readily  arouses  the  interest  of  the  student,  the  orthodox 
order  is  superior  in  that  it  follows  the  natural  evolution  of  the  present 
mechanism  of  exchange  and  thus  develops  the  subject  in  a  more  orderly 
manner.  (3)  It  would  be  deplorable  indeed  if  students  were  graduated 
from  a  college  of  commerce  with  no  more  contact  with  monetary  princi- 
ples and  problems  than  are  offered  in  the  few  cut  and  dried  propositions 
set  forth  in  Banking  and  Business.  Some  recent  astonishing  utterances 
of  prominent  men  upon  monetary  questions  convince  the  reviewer  of  the 
error  of  the  author's  statement  that  "discussion  of  the  abstractions  of 
monetary  science  should  be  largely  avoided."  (4)  The  long-drawn- 
out  discussion  of  the  various  measures  which  formed  a  part  of  the  back- 
ground of  the  federal  reserve  is  uninteresting  and  in  fact  confusing  to 
the  beginning  student  in  finance  and  therefore  should  be  reserved  for 
advanced  students  who  are  interested  in  an  intensive  study  of  the  sys- 
tem. 

George  W.  Dowrie. 

The  University  of  Minnesota. 

The  World's  Monetary  Problems.  By  Gustav  Cassel.  (London: 
Constable  &  Company.      1921.      Pp.154.      3s.  6d.) 

The  volume  contains  two  memoranda,  written  in  response  to  the  in- 
vitation of  the  League  of  Nations,  the  first  for  the  International  Finan- 
cial Conference  in  Brussels,  1920;  the  second  for  the  meeting  of  the 
Financial  Committee  of  the  League  of  Nations  in  September,  1921. 

The  first  memorandum  deals  with  inflation,  the  second  with  deflation. 
In  the  first,  the  dangers  of  inflation  are  emphasized  and  the  author 
urges  that  restrictions  be  set  up  against  further  indulgence  in  that 
direction.  In  the  second,  however,  he  attributes  the  breakdown  in 
production  and  the  widespread  existence  of  unemployment  to  what  he 
characterizes  as  a  drastic  policy  of  deflation.  Professor  Cassel's  words 
in  this  connection  have  given  aid  and  comfort  to  the  many  advocates  of 
"soft"  money  in  this  country. 

According  to  the  memorandum,  inflation,  due  first  to  the  creation  of 
credit  currency — loans  made  in  excess  of  real  savings — has  been  fur- 
thered by  huge  government  expenditures,  heavy  taxation,  and  b\^  cer- 
tain elforts  to  counteract  the  evils  of  previous  inflation.  When  taxes 
become  a  heav}^  burden,  tax  payers  are  forced  to  borrow  from  the  banks 
to  make  their  payments.  This  increases  the  volume  of  credit  currency 
without  increasing  the  stock  of  commodities,  thus  causing  further 
inflation.  Likewise  attempts  on  the  part  of  governments  to  supply 
their  people  with  goods  at  prices  below  cost  of  production;  to  pay 
subsidies,  bonuses,  allotments  and  allowances,  most  of  which  are  at- 


516  Reviews  and  New  Books  [September 

tempts  to  compensate  for  the  ill  effects  of  previous  inflation,  all  neces- 
sitate the  creation  of  additional  credit  currency  and  thus  enliance  in- 
flation. 

The  effect  of  inflation,  with  its  concomitant  depreciation  of  cur- 
rency has  been  to  drive  gold  out  of  most  countries  and  into  the  bank 
vaults  of  one  or  two  others,  notably  the  United  States.  This  increase 
in  the  sui)ply  of  gold  in  such  countries  has  lessened  its  value  in  com- 
parison with  commodities. 

Throughout  the  world,  currencies  of  all  kinds  have  thus  depreciated. 
For  most  countries  it  is  useless,  and  is  even  a  serious  hindrance,  to 
speak  of  normal  parities  with  gold,  since  these  countries  do  not  possess, 
nor  are  they  likely  to  obtain  at  any  time  in  the  future,  sufficient  gold  to 
restore  the  old  relationships.  The  important  thing  after  all,  he  con- 
tends, is  the  purchasing-power  parity.  If  that  can  be  stabilized,  the 
business  of  the  world  can  go  forward.  Rates  of  exchange  are  disturb- 
ing to  international  trade  only  in  so  far  as  they  deviate  from  pur- 
chasing-power parities.  Valuations  which  are  put  on  foreign  money 
depend  upon  the  relative  purchasing  power  of  the  currencies  of  both 
countries. 

Professor  Cassel  discredits  the  explanation  of  the  anti-quantity 
theorists  that  the  rise  in  prices  was  caused  by  a  scarcity  of  commodities, 
and  that  this  resulting  rise  in  the  level  of  prices  necessitated  an  increase 
in  the  quantity  of  money.  The  shortage  in  commodities  should  have 
led  to  a  decrease  in  currency  since  there  was  then  less  money  work  to 
be  done.  But  since  the  quantity  of  money  was  not  decreased  to  cor- 
respond with  the  reduced  supply  of  commodities,  the  money  supply 
was  redundant  and  the  price  level  rose.  Hence  it  was  really  inflation 
which  was  at  the  bottom  of  the  demand  for  further  inflation.  Infla- 
tion is  the  sole  cause  of  depressed  exchanges  which  are  anything  more 
than  temporary  in  their  nature.  Hence  depressed  exchanges  cannot 
be  corrected  by  adjustment  of  the  trade  balance.  Nor  can  the  money 
standards  be  improved  by  increasing  the  gold  reserves,  so  long  as  the 
currency  is  redundant.  Furthermore,  improvement  in  govermnent 
credit  cannot  usually'  give  a  higher  value  to  its  money  standard.  "In- 
ternational purchasing  power  altogether  depends  on  the  limitation  of 
the  supply  of  money."  Further  inflation  causes  additional  fluctuations 
in  exchange.  It  is  this  instability  however,  and  not  the  level  of  the 
exchanges,  that  delays  recovery.  The  first  step  toward  recovery 
therefore  is  to  stop  further  inflation. 

Professor  Cassel  occupies  the  somewhat  unusual  position  of  recog- 
nizing the  evils  of  inflation  and  of  opposing  further  adventures  in  that 
direction,  but  at  the  same  time  objecting  to  the  process  of  deflation. 
Changes  either  upward  or  downward  he  desires  to  avoid.  Indeed  he 
goes  so  far  as  to  suggest  that  special  steps  be  taken  by  the  nations 


1922]  Money,  Prices,  Credit,  and  Bariking  ■  517 

of  the  world  to  prevent  gold  from  rising  again  in  value.  In  this  con- 
nection he  suggests  the  following  alternatives — (1)  progressive  re- 
duction in  the  monetary  demand  for  gold;  (2)  immediate  abandon- 
ment of  the  use  of  gold  as  a  monetary  standard. 

It  is  asserted  that  the  desire  to  restore  the  pre-war  gold  basis  for 
currency  rests  upon  no  logical  grounds,  and  to  attain  such  result  great 
hardship  and  national  bankruptcy  would  have  to  be  faced.  Since  few 
of  the  European  countries  can  hope  to  restore  the  pre-war  value  of 
their  currencies,  their  problem  becomes  that  of  stabilizing  dollar  ex- 
change at  some  definite  figure.  But  of  course  this  difficulty  is  aggra- 
vated if  the  United  States  raises  the  value  of  the  dollar  by  a  program 
of  deflation.  The  deflation  policy  of  the  United  States  thus  forces 
deflation  upon  those  countries  which  desire  to  see  their  currencies  im- 
prove or  even  hold  their  own  in  the  international  market.  The  efl'orts 
of  the  United  States  to  get  back  to  a  solid  foundation  for  its  own 
financial  structure  impose  a  heavier  burden  upon  the  struggling  Euro- 
pean nations.  It  seems  to  be  largely  this  feeling  which  is  responsible 
for  Professor  Cassel's  sharp  criticism  of  our  deflation  policy. 

N.  R.  Whitney. 

University  of  Cincinnati. 

NEW     BOOKS 

Angas,   L.    L.    B.     Reparations,    trade    and   foreign    exchange.      (London: 
King.      1922.      Pp.  351.      12s.  6d.) 

Economic  aspects  of  the  indemnity  present  great  difficulties  affecting 
the  interests  of  British  industries.  The  gist  of  the  author's  thesis  is  to 
this  general  effect:  (1)  The  indemnity  cannot  be  paid  with  money  and 
will  involve  a  transfer  of  goods  from  Germany  to  England.  (2)  These 
goods  will  compete  with  English  products,  thus  causing  stagnation  and 
unemployment  in  British  plants.  (3)  This  situation  cannot  be  avoided 
by  a  triangular  trade  arrangement,  such  as  a  plan  by  which  there  would 
be  German  dumping  in  Spain  and  Spanish  dumping  in  England.  The 
suggestion  that  Germany  should  pay  with  non-German  securities  is  on 
the  whole  considered  good;  it  has  decided  limitations,  however,  and  there 
is  no  escaping  the  conclusion  that  the  indemnity  for  the  most  part  must 
be  paid  in  commodities. 

From  the  present  viewpoint  of  unemployment,  the  book  is  most  valuable 
in  pointing  out  obstacles  and  dangers  in  the  way  of  home  business.  It 
would  seem,  nevertheless,  that  the  author  overemphasizes  the  disad- 
vantages accruing  to  British  industry  from  competition  of  foreign  goods 
paid  for  directly  or  indirectly  by  the  reparations.  The  same  objections 
might  be  made  to  importations  in  general  or  to  trading  with  a  country  that 
has  just  begun  to  develop  manufacturing  on  a  successful  basis. 

Other  matters  to  which  attention  is  given  include  the  problem  of  inter- 
allied indebtedness,  foreign  exchange  and  inflation,  with  special  refer- 
ence to  unemplovment. 

M.  J.  S. 


518  Reviews  and  Neio  Books  [September 

Arnaune,  a.  La  monna'ie,  le  credit  ct  le  change.  I,  La  circulation  et  ses 
instruments,  son  mecanisme.  Sixth  edition.  (Paris:  Felix  Alcan.  1922. 
15  fr.) 

DiESEN,  E.  Norshanh-Aarhooh  1921.  Iste  del:  Aktiekreditbanker.  (Christ- 
iania:  A|S  Okonomisk  Literatur.      Pp.  xxxii,  202.      10  Kr.) 

Ekstrom,  Y.  Oryi  Svensk  hankverksamhet  och  dess  teknik.  I,  Betalnings- 
och  kreditmedel.  (Stockholm:  Svenska  Bankmannaforeningens  Series- 
krift.      1921.      Pp.   160.      8  Kr.) 

Fischer,  C.  A.  Ziir  Lehre  voin  Staatsbankrott,  (Karlsruhe:  G.  Braun. 
1921.      Pp.  viii,  129.     20  M.) 

Fowler,  C.  N.  The  United  States  reserve  bank;  the  fundamental  defects 
of  the  federal  reserve  system  exposed  and  the  necessary  remedy.  (Wash- 
ington: D.  C.  Hamilton  Book  Co.      1922.      Pp.  88.) 

Fraser,  Sir  Drummond.  International  credits  (the  ter  Meulen  bond 
scheme^.      (London:  Harrisons.      1922.) 

FuRNiss,  E.  S.  Foreign  exchange.  The  financing  mechanism  of  inter- 
national   commerce.      (Boston:    Houghton    Mifflin.      1922.      Pp.    x,    409. 

$2.50.) 

GoLDSBOROUGH,  T.  A.  Stabilising  the  purchasing  power  of  money.  Speech 
delivered  in  the  House  of  Representatives,  May  23,  1922.  (Washington: 
Supt.  Docs.      1922.      Pp.  8.) 

Heymann,  H.  Die  Welt-  Kredit-  und  Finanzreform.  Fin  Augruf  zum 
Solidarismus.      (Berlin:  Ernst  Rowohlt.      1921.      Pp.   141.     20  M.) 

Holdsworth,  J.  T.  America's  foreign  loan  policy.  (Pittsburgh,  Pa.: 
Author,  Bank  of  Pittsburgh.      1922.      Pp.  23.) 

Kaeferlein,  H.  T)er  Bankkredit  und  seine  Sicherungen.  Third  edition. 
(Nurnberg:  Carl  Koch.      1921.      Pp.  xx,  576.     45  M.) 

Kaemmerer,  G.  H.  Geld.  Fine  genetische  Studie.  (Berlin:  Puttkam- 
mer.      1921.      Pp.  48.) 

Kent,  F.  I.  Factors  that  xcill  help  the  exchange  situation.  (New  York: 
Bankers  Trust  Co.      1922.      Pp.  31.) 

A  reprint  of  two  addresses,  one  delivered  before  the  National  Foreign 
Trade  Convention  in  Philadelphia  on  ISIay  12,  1922,  and  the  other  before 
the  American  Academy  of  Political  and  Social  Science  in  Philadelphia,  on 
May  13,  1922. 

Kiddy,  J.  G.  Country  banker's  handbook  to  the  rules  and  practices  of  the 
Bank  of  Fngland,  London  Bankers'  Clearing  House,  and  the  stock  ex- 
change. Seventh  edition,  enlarged  and  revised  to  April,  1922.  (Lon- 
don: Waterlow  &  Sons.      1922.      5s.) 

Koch,  A.  Der  Warcnkredit  der  Banken  tind  seine  Sicherstellung.  (Jena: 
Fischer.      1922.      Pp.  vii,  125.      21   M.) 

KoNio,  H.  Die  Befestigung  der  Kaufkraft  des  Geldes.  (Bonn:  Kurt 
Schroeder  Verlag.      1922.      20  M.) 

KuRZ,  H.  Die  Grossbanken  im  schxceizerischen  IVirtschaftslehen.  (Ziirich: 
Art.  Institut  Orel  Fiissli.      1922.      Pp.  60.      4  fr.) 


1922]  Money,  Prices,  Credit,  and  Banking  519 

Lanier,  H.  W.  A  century  of  hanking  in  Nexc  York,  1822-1022.  (New 
York:   Doran.      1922.      Pp.   x,   335.      $5.) 

Lanoir,  p.      Le  credit  de  la  France.      (Paris:  Giard.      1922.      2.50  fr.) 

Lassar-Cohn.  Geld-  und  Papiergeld.  Die  Bedeutung  dcr  Geldwdhrung 
im  Leben  der  Gegenxvart.      (Leipzig:  Voss.      1922.      8  M.) 

Menzel,  C.  Die  russische  Bauernagrarhank.  Text  der  Satzung  von  1012 
nebst  Einleitung.  (Berlin:  Deutsche  Verlagsbuchhandliing.  1921.  Pp. 
36.     4.50  M.) 

Montarnal,  H.  Traite  praiiqtie  du  contentieux  commercial  de  la  banque 
et  de  la  bourse.      (Paris:  Riviere.      1922.     Pp.  462.      18  fr.) 

This  is  an  account  of  the  legal  aspects  of  the  transactions  of  banks 
and  of  the  stock  exchange  in  France.  It  is  a  guide  for  bankers,  brokers, 
trustees  and  others  as  to  points  on  which  litigation  might  occur.  The 
work  is  very  carefully  done  by  one  of  the  heads  of  a  department  of  the 
Credit  Lyonnais.  R.  R.  W. 

MuNN,  G.  G.  The  paying  teller's  department.  (New  York:  Bankers 
Pub.  Co.      1922.) 

PoHLE,  L.  Geldentwertung,  Valutafrage  und  Wdhrungsreform.  (Leipzig: 
Deichertsche  Verlagsbuchhandlung.      1920.      Pp.  56.     30  M.) 

The  author,  who  is  a  professor  of  economics  at  the  University  of 
Leipzig,  discusses  with  much  acumen  the  present  state  of  the  monetary 
troubles  in  Germany,  the  causes  which  led  to  them  and  the  possible  means 
of  relief.  He  finds  that  the  weakness  of  the  German  exchange  is  caused 
not  only  by  the  balance  of  trade  being  against  Germany,  but  even  more 
by  the  depressed  purchasing  power  of  the  mark  in  Germany  itself,  this 
being  of  course  due  to  the'  enormous  issue  of  paper  currency.  In  the 
beginning  of  1920  the  purchasing  power  of  the  mark*  was  only  one 
eighth  of  what  it  had  been  in  1914.  The  value  of  the  mark  abroad  has 
not  always  followed  the  ups  and  downs  of  its  purchasing  power  at  home, 
although  in  the  end  it  does  depend  on  the  latter.  As  shown  by  statistics 
of  the  English  home  market  the  rise  in  prices  is  not  always  caused  by  the 
shortage  of  production,  for  this  shortage  in  1919  as  compared  with  the 
average  of  the  five  years  preceding  the  war  amounted  to  only  10  per 
cent,  whereas  the  rise  of  prices  amounted  to  277  as  compared  with  100. 
The  author  agrees  with  Cassel  as  to  the  soundness  of  the  quantitative 
theory  of  money,  and  with  the  latter 's  statement  of  the  "purchasing- 
power  parity."  The  rcestablishmcnt  of  the  German  exchange  depends 
on  two  things :  the  improvement  in  the  balance  of  foreign  trade  and  the 
checking  of  the  inflation  caused  by  the  issue  of  paper  money.  The  author 
is  in  favor  of  preserving  tlic  gold  basis  of  the  currency,  at  least  for  the 
present,  and  in  a  careful  discussion  of  deflation  advocates  the  reduction 
of  the  amount  of  gold  represented  by  the  mark. 

R.   R.  Whitehead. 

ScHWiEDLAND,  E.      Geld  und  W  aJiruug.      (Vienna:  Author.      1921.      Pp.29. 

20  Kr.) 
Spalding,   W.    F.      Foreign   exchange   and  foreign    bills   in    theory   and   in 

practice.      Fourth  edition.      (London:  Pitman.      1921.      Pp.  246.  7s.  6d.) 

Steinberg,  J.  Das  Geldkapital.  (Bonn:  Kurt  Schroeder  Verlag.  1922. 
Pp.  viii.  111.     20  M.) 


520  Reviews  and  New  Books  [September 

Strover,  C.  Monetary  reconstruction.  (Chicago:  Author,  133  W.  Wash- 
ington St.      1922.     Pp.  xiii,  91.     $1.50.) 

VON  Waechter,  S.  Der  Kampf  urn  die  JVcihrung.  Die  wichtigsten  TVdh- 
rungsformen  der  letzten  Jahrzehente  und  das  V alutaprohlem  der  Gegen- 
wart.      (Berlin:  Griinewald,  Rothschild.      1922.      24  M.) 

Ward,  W.  American  commercial  credits.  (New  York:  Ronald.  1922. 
Pp.  xiii,  278.     $2.50.) 

White,  B.  The  currency  of  the  Great  War.  (London:  Waterlow.  1921. 
Pp.  104.) 

The  bankers'  almanac  and  year  book,  for  1921-1922.  (London:  Waterlow. 
1921.     42s.) 

Bank  of  Finland  1914.-1920.  Vol.  I.  (Helsingfors:  Bank  of  Finland, 
Statistical  Dept.      1921.     Pp.  vii,  171.) 

Les  banques  suisses  en  1920.  Publication  du  Bureau  de  Statistique  de  la 
Banque  Nationale  Suisse,  lev  fascicule.  (Zurich:  Art.  Inst.  Orell  Fiissli. 
1921.      Pp.  116.) 

Building  and  loan  associations.  (Washington:  U.  S.  Chamber  of  Com- 
merce, Civic  Development  Dept.     1922.     Pp.  6.) 

Changes  in  the  cost  of  living,  July,  191J{. — March,  1922.  Research  report 
no.  49.  (New  York:  National  Industrial  Conference  Board.  1922. 
Pp.  73.      75c.) 

Die  deutschen  Banken  im  Jahre  1920.  Zugleich  eine  vollstdndige  Statistik 
der  deutschen  Banken  seit  dem  Jahre  1883.  (Berlin:  Verlag  "Der 
Deutsche  Oekonomist."      1922.      Pp.   45.     20   M.) 

Eighth  annual  report  of  the  Federal  Reserve  Board,  covering  operations 
for  the  year  1921.      (Washington:  Supt.  Docs.      1922.      Pp.  ix,  720.) 

Gold  (war  period,  1913-1919).  Report  of  the  Imperial  Mineral  Re- 
sources Bureau.      (London:  King.      1922.     6s.) 

Negotiable  instruments.      (New  York:  Am.  Inst,  of  Banking.      1922.      Pp. 

480.) 

Proceedings  of  the  third  national  conference  of  mutual  savings  banks. 
Savings  Bank  Journal,  vol.  Ill,  no.  3.  (New  York:  National  Assoc, 
of  Mutual  Savings  Banks  of  the  U.  S.  1922.      Pp.  226.) 

Das  schxoeizerische  Banktvesen  im  Jahre  1919.  Bearb.  im  Statistischen 
Bureau  der  Schxceizerischen  Nationalbank.  (Bern:  Stampfli.  1921.  Pp. 
81.) 

Public  Finance,  Taxation,  and  Tariff 

NEW    BOOKS 

Badulesco,  V.  V.  Le  prelevement  extraordinaire  sur  le  capital  dans 
I'Empirc  allemand.      (Paris:  Giard.      1922.      Pp.  xxxii,  543.      25  fr.) 

Beman,  L.  T.,  compiler.  Selected  articles  on  current  problems  in  taxation. 
(New  York:  Wilson.      1921.      Pp.  viii,  350.      $2.25.) 

This  compilation  of  selected  readings  is   divided  into  three  parts,  of 
which  the  first  and  briefest  is  concerned  with  the  general  principles  of 


1922]  Public  Finance,  Taxation,  and  Tariff  521 

taxation,  while  the  other  two  are  devoted  to  the  sales  tax  and  the  state 
income  tax.  These  two  sections  are  arranged  as  debaters'  manuals,  with 
briefs  for  and  against  each  tax.  In  general  the  quotations  are  well 
chosen,  those  in  the  first  part  being  mainly  from  standard  writers,  in  the 
second  from  contemporary  publicists,  and  in  the  third  from  state  commis- 
sions. It  is  no  fault  of  the  compiler  that  most  of  the  selections  opposed 
to  the  state  income  tax  are  dated  prior  to  1916;  good  recent  references  on 
that  side  are  hard  to  find.  There  are  useful  detailed  bibliographies.  Part 
I  is  too  brief  and  elementary  to  be  of  much  use  in  a  college  course,  but 
parts  II  and  III,  especially  III,  would  make  very  good  collateral  read- 
ing. Even  part  I  would  be  very  desirable  to  place  in  the  hands  of  public 
speakers  and  editorial  writers,  or  anyone  else  who  is  in  the  habit  of 
expressing  his  views  on  matters  connected  with  taxation  without  having 
studied  the  fundamental  principles. 

RuFus  S.  Tucker. 

Black,  H.  C.  1922  supplement  to  "Black  on  Federal  Taxes,"  January 
1922.  Fourth  edition.  (Kansas  Citv,  Mo.:  Vernon  Law  Book  Co.  1922. 
Pp.  194.) 

Buck,  A.  E.  Budget  making.  A  handbook  on  the  forms  and  procedure  of 
budget  making  with  special  reference  to  states.      (New  York:  Appleton. 

1921.  Pp.  234.     $3.) 

Copper,  R.  L'impot  liberateur.  (Paris:  Author,  66  Rue  de  la  Roche- 
foucauld.     1922.) 

Ely,  R.  T.     The  taxation  of  land.      (Madison,  Wis.:  Author.     1922.     Pp. 

Reprinted  from  Proceedings  of  the  National  Tax  Association,  vol.  XIV. 

Grilli,  C.  II  protezionismo  dopo  la  guerra.  (Rome:  Author,  Viala  della 
Regina  86.      1921.      Pp.  96.) 

The  author  protests  against  the  attempts  at  "protection"  made  by  this 
country  and  Great  Britain  since  the  war.  He  attributes  them  to  two 
causes:  (1)  the  desire  to  foster  key  industries;  and  (2)  to  prevent 
"dumping."  The  reader  may  find  it  interesting  to  supplement  the  au- 
thor's analysis  of  the  latter  by  a  study  of  the  graphs  representing  the 
possibilities  of  "dumping"  given  by  Barone  in  Les  Problemes  Actuels  de 
I'Economie  (Paris,  1921).  The  author  agrees  with  Marshall  that  in 
most  cases  a  direct  subsidy  to  an  industry  is  less  injurious  to  the  common 
weal  than  a  protective  duty.  He  discusses  and  seems  to  approve  Cassel's 
theory  of  "purchasing-power  parities." 

R.   R.  W. 

HouDAiLLE,  J.  La  dette  anglaise  et  la  guerre  de  191^.  (Paris:  Jouve  et 
Cie.      1922.) 

KixMiLLER,  W.  and  Baar,  A.  R.  1922  United  States  income  and  war  tax 
guide  based  on  Revenue  act  of  1921  and  1921  regulations.  (Chicago: 
Authors.      1921.      Pp.   128.) 

VON  Mehring,  O.  Gedanken  zur  Reichsfinanzreform  im  Jahre  1921. 
(Jena:  Fischer.      1921.      Pp.  94.      15  M.) 

Mombert,  p.     Besteuerung  und  Volkswirtschaft.      (Karlsruhe:  G.  Braun. 

1922.  Pp.  105.      18  M.) 


522  Reviews  and  New  Books  [September 

Needham,  R.  W.  Income  tax  evasion:  the  taxpayer's  position.  (London: 
Gee  &  Co.      1922.     2s.) 

NicoLAi,  E.  Etude  historique  et  critique  sur  la  dette  publique  en  Belgique. 
(Brussels:  M.  Lamertin,  M.  Hixyez.      1921.      Pp.  458.) 

NoRMAND,  G.  L'ahime  financier,  en  sortirons-nous?  (Paris:  Maison  Fran- 
9aise  d'Art  et  d'Edition.      1922.      7.50  fr.) 

Powell,  H.  M.  Taxation  of  corporations  and  personal  income  in  New 
York.  Vol.  II,  Personal  income.  Fourth  edition.  (New  York:  Boyd 
Press.      1922.      Pp.  xii,  436.     $6.) 

Rheinstrom,  H.  and  Baucknkr,  A.  Die  direJcten  Reichssteuern.  (Leipzig: 
G.  A.  Glockner.      1921.      Pp.116.      12  M.) 

Rossmoore,  E.  E.  Federal  income  tax  problems — 1922.  (New  York: 
Dodd,  Mead.      1922.      Pp.  xvi,  541.     $5.) 

Schmidt,  P.  H.  Der  neue  Zolltarif.  (Rorschach:  E.  Lopfe-Benz.  1921. 
Pp.  22.) 

SiLBERT,  C.  Federal  income  tax  primer  based  on  Revenue  act  of  1921  and 
on  1922  regtdations.      (Boston:  Financial  Pub.  Co.      1922.      Pp.  vii,  45.) 

Teillard,  J.  Les  emprunts  de  guerre.  (Paris:  Alcan.  1922.  Pp.  392. 
25  fr.) 

VoN  KocH,  F.  M.  On  the  theories  of  free  trade  and  protection.  (London: 
King.      1922.      Is.) 

The  city  bond  issues  to  be  voted  upon  June  5,  1922.  Vote  "no"  on  both 
propositions.      (Chicago:  Bureau  of  Public  Efficiency.      1922.      Pp.   11.) 

Committee  on  National  Expenditure  (Geddes  Committee)  :  First  interim 
report;  Second  interim  report;  Third  report.  (London:  H.  M.'s  Station- 
ery Office.      1922.     4s;  3s;  4s.) 

The  Corporation  Trust  Company's  1921-1922  Nezc  York  state  income  tax 
service.      (New  York:  Corporation  Trust  Co.,  37  Wall  St.      1921.      $30.) 

JIandbuch  der  dcutschcn  Ausf uhrabgaben-Kontrolle .  Vol.  I.  Metallindus- 
trie.      (Wittenberg:  A.  Ziemsen.  '   1922.      Pp.   164.      50  M.) 

Internal  revenue  regulations  no.  Jj3,  part  I,  relating  to  the  tax  on  admissions 
under  the  Revenue  act  of  1921.  Revised,  January,  1922.  (Washington: 
Supt.  Docs.      1922.      10c.) 

Labour  and  national  "economy."  A  comprehensive  and  critical  analysis 
of  the  Report  of  the  Geddes  Committee  on  National  Expenditure  and  the 
government's  policy  on  "economy."  (London:  National  Joint  Council, 
33  Eccleston  Square.      1922.      6d.) 

The  National  Joint  Council  represents  the  General  Council  of  the 
Trades  Union  Congress,  the  Executive  Committee  of  the  Labor  party, 
and  the  Parliamentary  Labor  party. 

/yflw  relating  to  the  assessment  and  taxation  of  property  in  Indiana,  the 
duties  and  poxcers  of  taxing  officers,  and  an  appendix  containing  forms 
and  general  information.  (Indianapolis,  Ind. :  State  Board  of  Tax  Com- 
missioners.     1922.) 


1922]  Population  and  Migration  523 

National  debt,  liabilities  of  the  state,  estimated  assets  and  exchequer  bal- 
ances, 1875-76  to  1920-21.  (London:  H.  M.'s  Stationery  Office.  1922. 
9d.) 

New  York  state  income  tax  law:  practical  questions  arid  answers.  (New 
York:  Irving  National  Bank.      1922.      Pp.  46.) 

Prentice-Hall  federal  tax  course.  (New  York:  Prentice-Hall.  1922.  Pp. 
274.     $6.) 

Report  of  the  Special  Joint  Committee  on  Taxation  and  Retrenchment,  sub- 
mitted March  1,  1922.      (Albany:  Committee.      1922.      Pp.  383.) 

Revenue  act  of  1921.      (New  York:  Guaranty  Trust  Co.      1921.      Pp.  220.) 

The  Revenue  act  of  1921.  Complete  text,  interleaved.  (New  York:  Equit- 
able Trust  Co.      1921.      Pp.  235.) 

Tax  reform  in  South  Carolina.  Bull.  no.  104.  (Columbia,  S.  C. :  Univ.  of 
South  Carolina,  Extension  Dept.      1922.      Pp.   185.) 

Russia's  foreign  indebtedness.  Correspondence  xoith  M.  Krassin.  (Lon- 
don: H.  M.'s  Stationery  Office.     1921.     Pp.  6.     3d.) 

Taxes  on  tobacco,  snuff,  cigars,  and  cigarettes,  and  purchase  and  sale  of 
tobacco.  Internal  revenue  decisions,  regulations  no.  8,  revised  February, 
1922.      (Washington:  Supt.  Docs.      1922.      10c.) 

Treasury  decisions,  under  internal  revenue  laws  of  United  States.  Internal 
revenue  decisions,  vol.  XXIII,  January  to  December,  1921.  (Wash- 
ington: Supt.  Docs.      1922.     $1.50.) 

Population  and  Migration 

The  Immigration  Problem.     A  Study  of  American  Immigration  Condi- 
tions and  Needs.      By  Jeremiah  W.  Jenks,  and  W.  Jett  Lattck. 
Fifth  edition  revised  and  enlarged  by  Rufus  D.  Smith.      (New 
York:  Funk  and  Wagnalls.     1922.     Pp.  xxvii,  655.     $3.00.) 
hnmigration  and  Labor;   the  Economic  Aspects  of  European  Immi- 
gration to  the  United  States.     By  Isaac  A.  Hourwich.      (New 
York:  B.  W.  Huebsch,  Inc.     1922.     Pp.  xxxii,  574.     $6.00.) 
New  editions  have  appeared  of  two  important  books  on  immigra- 
tion, Jenks'  and  Lauck's  The  Immigration  Problem,  and  Hourwich's 
Immigration  and  Labor.     The  former  has  long  been  recognized  as  the 
accepted  semi-official  digest  of  the  Report  of  the  Immigration  Com- 
mission.    It  contains  an  interpretation  of  the  data  assembled  by  the 
commission  which  the  commission  itself  did  not  have  time  to  prepare. 
The  present  edition  has  been  revised  and  brought  up  to  date  by  Pro- 
fessor Rufus  D.  Smith,  who  is  also  primarily  responsible  for  some  im- 
portant new  chapters  dealing  with  the  immigration  policies  of  other 
countries,  the  race  problem   of   the  Pacific,   and   the   new   temporary 
percentage  restriction  law. 

The  chapter  on  tlie  immigration  policies   and  legislation   of   other 
countries  gives  the  student  a  much  needed  basis  for  comparing  our 


524  Reviews  and  New  Books  [September 

handling  of  immigration  affairs  Avith  that  of  other  nations  whose  prob- 
lems are  similar  to  ours  in  their  broad  features  but  differ  in  significant 
details.  Heretofore  it  has  been  difficult  to  get  concise  data  on  this 
question  in  accessible  form.  So,  too,  the  treatment  of  the  race  problem 
of  the  Pacific  helps  to  broaden  one's  outlook  on  the  subject,  and  to 
place  the  understanding  of  the  question  firmly  on  the  basis  of  the 
essential  principles  involved.  Particularly  happy  is  the  insistence  that 
the  problems  of  the  relationships  of  diverse  races  are  to  be  settled  not 
on  the  basis  of  inferiority  or  superiority,  but  of  difference. 

In  its  new  form  this  book  will  continue  to  be  an  invaluable  handbook 
for  all  students  of  immigration.  The  authors  have  chosen  wisely  in 
saving  space  by  omitting  a  considerable  portion  of  the  statistical  mat- 
ter in  the  appendix,  which  was  of  such  a  detailed  character  that  it  was 
not  likely  to  be  used  by  any  students  except  those  who  could  well  enough 
resort  to  the  commission's  report  itself. 

The  new  portions  of  Dr.  Hourwich's  book  consist  mainly  in  a  chapter 
on  the  lessons  of  the  war  and  an  addition  to  the  appendix  consisting 
of  an  answer  to  some  of  the  criticisms  of  the  first  edition.  The  au- 
thor's interpretation  of  the  facts  of  the  war  may  be  briefly  summarized 
as  follows:  During  the  war  immigration  was  reduced  to  a  negligible 
quantity;  at  the  same  time  the  real  wages  of  the  American  laborer 
declined  somewhat,  due  to  the  fact  that  prices  rose  faster  and  higher 
than  money  wages ;  therefore  a  cessation  of  immigration  does  not  help 
the  American  Avage-earner  and  immigration  has  no  unfavorable  effect 
on  the  standard  of  living  of  American  labor.  This  argument  is  an 
example  of  the  peculiar  statistical  method  which  runs  through  the 
whole  book,  and  which  justifies  the  reader  in  subjecting  every  conclu- 
sion to  the  closest  scrutiny.  Even  assuming  the  correctness  of  the 
major  premise  with  reference  to  the  effect  of  the  war  on  real  wages — 
which  is  at  least  open  to  question  in  the  light  of  such  authoritative 
data  as  are  presented  in  the  recent  study  of  the  National  Bureau  of 
Economic  Research — it  is  obvious  that  it  is  fallacious  to  draw  con- 
clusions with  reference  to  normal  conditions  from  the  war  period,  when 
all  social  forces  were  upset,  and  the  government,  as  Dr.  Hourwich  him- 
self observes,  "assumed  the  function  of  regulating  wages  in  the  leading 
industries."  The  same  may  be  said  of  tlie  author's  answer  to  his 
critics.  The  methods  used  in  replying  to  the  criticisms  of  some 
reviewers  of  the  first  edition  are  exactly  the  same  as  those  objected  to 
by  the  reviewers  in  tlie  volume  itself.  To  point  out  the  fallacy  of  these 
methods  in  their  particular  applications  would  be  too  extended  a  task 
for  a  brief  review. 

Henry  Pratt  Fairchild. 

New  York  University. 


1922]  Social  Problems   and   Reforms  525 

NEW    BOOKS 

Caldwell,  A.  B.,  editor.  History  of  the  American  negro.  Vol.  V.  Vir- 
ginia edition.      (Atlanta,  Ga. :  Caldwell  Pub.  Co.      1921.      Pp.  630.) 

Egidi,  p.  Ricerche  sulla  populazione  dell'  Italia  Meridionale  nei  secoli 
XIII.  e  XIV.      (Lucca:  Baroni.      1920.) 

Savorgnan,  F.  Demografia  di  guerra  e  altri  saggi.  (Boloona:  Zanichelli. 
1921.      Pp.  221.      12  1.) 

During  the  war  years  and  after,  the  author  was  a  frequent  contributor 
to  various  periodicals  of  articles  on  vital  statistics,  now  reprinted  in  this 
volume.  One  of  the  longer  of  these  articles  discusses  the  forces  which 
make  for  differences  in  the  movement  of  population  in  different  times  and 
places.  It  serves  as  a  kind  of  introduction  to  the  rest.  Several  con- 
troversial articles  on  the  nationality  of  peoples  in  the  disputed  Adriatic 
countries  are  so  bound  up  with  the  contemporary  war  situation  that  the 
value  of  reprinting  them  may  be  questioned.  A  discussion  of  infant 
mortality  during  the  year  of  the  war  is  of  more  enduring  interest.  This 
also  may  be  said  of  several  of  the  nine  succeeding  short  articles.  They 
reveal,  for  example,  the  relative  immunity  of  the  English  population 
from  destructive  war  influences,  the  decline  of  the  population  of  France, 
the  continued  expansion  of  the  population  of  Italy. 

R.     F.     FoERSTEU. 

Princeton  University. 

Sutherland,  H.  G.  Birth  control:  a  statement  of  Christian  doctrine 
against  the  7ieo-Malthusians.  (New  York:  P.  J.  Kenedy.  1922.  Pp. 
X,  160.      $1.75.) 

Der  Bevdlkerungsriickgang  in  den  tropischen  Kolonien  Afrikas  iind  der 
Siidsee.  Seine  Ursachen  und  seine  Bekampfung.  (Ebenda.  Pp.  96. 
10  M.) 

Increasing  life  span  in  the  United  States,  1901-1920.  Statistical  Bull., 
vol.  Ill,  no.  5.  (New  York:  Metropolitan  Life  Ins.  Co.  1922.  Pp. 
12.) 

Immigracion  movimiento  de  pasajeros,  Republica  de  Cuba,  1920.  (Havana: 
Secretaria  de  Hacienda.      1921.     Pp.   24.) 

United  States:  composition  and  characteristics  of  the  population.  Four- 
teenth census  of  the  United  States,  Department  of  Commerce,  Bureau  of 
the   Census.      (Washington:   Supt.   Docs.      1922.      Pp.    12.) 

Social  Problems  and  Reforms 

NEW    BOOKS 

Ames,  E.  W.  and  Arvie,  E.      Community  civics.      (New  York:  Macmillan. 

1921.      Pp.  387.      $1.48.) 
Atwood,  W.   H.      Civic  and  economic   biology.      (Philadelphia:   P.    Blakis- 

ton's  Son  &  Co.      1922.      Pp.  xv,  470.) 
Ayres,    L.    p.      The    Cleveland    survey    of    the    administration    of    criminal 

justice.     An    address    delivered    before    the    City    Club    of    Cleveland, 

(Cleveland,  O.:  Cleveland  Trust  Co.      1922.      Pp.'  23.) 


526  Reviews  and  New  Books  [September 

Broderick,  J.  T.  Pulling  together.  (Schenectady,  N.  Y.:  Robson  &  Adee. 
1922.      Pp.  Ml.      $1.) 

BuRCH,  H.  R.  and  Patterson,  S.  H.  Problems  of  American  democracy, 
political,  economic,  social.      (New  York:  Macmillan.      1922.   Pp.  x,  601.) 

Cestre,  C.  L'usine  et  I'hahitation  ouvriere  aiix  Etats-Unis.  (Paris: 
Ernest  Leroux.      1921.      Pp.  xxxvi,  301.      5  fr.) 

Chenery,  W.  L.  Industry  and  humaii  welfare.  (New  York:  Macmillan. 
1922.      Pp.  xii,  169.) 

Clark,  W.  I.,  Jr.  Health  service  in  industry.  (New  York:  Macmillan. 
1922.      Pp.  ix,  168.      $2.) 

Clopper,  E.  N.  Rural  child  welfare.  An  inquiry  by  the  National  Child 
Labor  Commitee  based  upon  conditions  in  West  Virginia.  (New  York: 
Macmillan.      1922.      Pp.   355.      $3.) 

Child  welfare  is  the  subject  of  a  series  of  surveys  made  by  the  National 
Child  Labor  Committee,  of  which  this  is  the  first  one  dealing  exclusively 
with  the  rural  problem.  It  is  based  on  conditions  existing  in  West  Vir- 
ginia. The  principal  subjects  handled  are  the  Rural  Home,  Child  Labor 
on  Farms,  Rural  School  Attendance,  Dependency  and  Delinquency,  Taxa- 
tion and  the  Child,  and  Child  Welfare  Laws.  The  book  is  filled  with 
much  useful  illustrative  material  and  makes  excellent  summaries  as  well 
as  recommendations  for  constructive  work.  The  introductory  chapter 
is  a  valuable  statement  of  standards  of  child  welfare,  while  the  con- 
cluding chapter  outlines  a  program  of  child  welfare  legislation. 

That  conditions  in  rural  districts  are  in  serious  need  of  improvement 
is  clearly  demonstrated  by  the  facts  presented,  and  that  an  adequate 
program  of  constructive  work  has  heretofore  not  been  attempted  is 
equally  evident.  The  recommendations  on  the  whole  seem  well  adapted 
to  the  needs  of  the  state,  but  it  is  imfortunate  that  the  National  Child 
Labor  Committee  should  be  sponsor  for  a  statement  such  as  the  following 
in  regard  to  the  unmarried  mother:  "If  the  mother  does  not  care  to 
have  the  court  declare  the  name  of  the  father  of  her  illegitimate  child,  it 
should  remain  undeclared  forever."  A  number  of  valuable  tables  are 
given  in  the  appendix.  The  survey  should  be  valuable  not  only  to  West 
Virginia,  but  to  other  American  states  as  well,  in  that  conditions  presented 
in  the  book  are  without  doubt  very  similar  to  those  that  may  be  found  in 
other  parts  of  the  country. 

George  B.  Mangold. 

Curry,  C.  F.  Alien  land  laxcs  and  alien  rights.  H.  R.  doc.  no.  89,  67 
Cong.,  1   Sess.      (Washington:  Supt.   Docs.      1921.      Pp.   85.) 

Dart,  H.  M.  Maternity  and  child  care  in  selected  rural  areas  of  the 
Mississippi.  Dejiartment  of  Labor,  Children's  Bureau,  Rural  child 
welfare  series  no.  5.      (Washington:  Supt.  Docs.      1921.      Pp.  60.      10c.) 

Eddy,  S.  America:  its  problems  and  perils.  (New  York:  Doran.  1922. 
Pp.  30.      10c.) 

Farmer,  G.  L.  A  form  of  record  fur  hospital  social  work,  including  sug- 
gestions on  organization.      (Philadelphia:  Lippincott.      1921.      Pp.  81.) 

Fastout,  A.      Une  politique  financier e.      (Paris:  G.  Cres.      1922.     4.60  fr.) 


1922]  Social  Problems   and  Reforms  527 

Groszmann,  M.  p.  E.  Humanizing  justice.  Public  service  series,  no.  10. 
(Philadelphia:  Municipal  Court.      1922.      Pp.  31.) 

A  brief  study  of  the  Municipal  Court  of  Philadelphia  under  the  auspices 
of  the  National  Association  for  the  Study  and  Education  of  Exceptional 
Children.  The  court  is  described  as  an  object  lesson  and  an  inspiration. 
"It  represents  a  coordinated  system";  "its  judges  are  in  a  measure  the 
administrative  and  executive  officers  of  the  court";  "the  entire  machinery 
of  the  court  procedure  is  a  living  organism  rather  than  a  mechanical  de- 
vice." 

Inman,  S.  G.  Problems  in  Pan  Americanism.  (New  York:  Doran.  1921. 
Pp.  xii,  415.) 

Kahn,  O.  H.  a  plea  for  prosperity.  (New  York:  Committee  of  Ameri- 
can Business  Men,  354<  Fourth  Ave.      1922.) 

McKiNNEY,  J.  and  Simons,  A.  M.  Success  through  vocational  guidance; 
occupation  analysis.  (Chicago:  American  School,  Drexel  Ave.  1922. 
Pp.  270.     $2.) 

March,  L.  and  others.  Problemes  actuels  de  I'economique.  (Paris:  Colin. 
1921.      Pp.  vi,  477.      20  fr.) 

A  number  of  economic  questions  in  which  the  interest  of  the  public 
has  been  aroused  since  the  war  are  discussed  by  prominent  Frenchmen  in 
this  collection  of  essays:  the  use  of  statistics  by  L.  March;  a  statement 
of  the  marginal  utility  theory  of  value  by  J.  Moret;  the  monetary  situa- 
tion in  Europe  by  R.  G.  Hawtrey;  "consumption"  with  some  remarks  on 
cooperation  and  production  for  use  by  C.  Gide;  "the  rhythm  of  economic 
life"  by  A.  Aftalion,  whose  analysis  of  crises  and  their  recurrence  sug- 
gests many  of  the  points  made  by  M.  Bouniatian  in  Les  Crises  Econo- 
miques;  syndicates  and  trusts  by  E.  Barone,  with  some  very  interesting 
graphs  explanatory  of  the  possibility  of  combines  and  of  "dumping." 
The  remaining  essays  are  by  Rist,  Lazard,  Auge-Laribe  and  Duge  de 
Bernonville. 

R.  R.  Whitehead. 

Platt,  C.  The  psychology  of  social  life;  a  materialistic  study  with  an 
idealistic  conclusion.      (New  York:  Dodd,  Mead.      1922.    Pp.  284.  $2.50.) 

Pound,  A.  The  iron  man  in  industry ;  an  outline  of  the  social  significance 
of  automatic  machinery.  (Boston:  Atlantic  Monthly  Press.  1922.  Pp. 
xiv,  230.) 

Pound,  R.  Criminal  justice  in  the  American  city — a  siimmary.  (Cleve- 
land, O.:  Cleveland  Foundation.      1922.      Pp.  viii,  94). 

Reed,  T.  H.  Loyal  citizenship.  (Yonkers,  N.  Y. :  World  Book  Co.  1922. 
Pp.  viii,  333.     $1.40.) 

A  book  for  training  pupils  for  citizenship.  Has  chapters  on  "Social 
and  Economic  Fundamentals,"  including  chapters  on  Cooperation  in 
Work;  Capital,  the  Partner  of  Labor;  Getting  Capital;  the  Function  of 
Money;  and  Demand,  Supply,  and  Competition. 

RiSLER,  G.     La  crise  du  logement.      (Paris:   Plon-Nourrit  &   Cie.      1922. 

2fr.) 
Robinson,  C.  C.      The  find  yourself  idea;  a  friendly  method  of  vocational 

guidance    for    older    boys   for    the    use    of    adult    leaders.      (New    York: 

Y.  M.  C.  A.  Press.     1922.     Pp.  viii,  134.) 


528  Reviews  and  New  Books  [September 

Ryan,  J.  A.  and  Millar,  M.  F.  X.  The  state  and  the  church.  Written 
and  edited  for  the  Department  of  Social  Action  of  the  National  Catholic 
Welfare  Council.      (New  York:  Macmillan.      1922.      Pp.  vi,  331.) 

Sabsovich,  K.  Adventures  in  idealism:  a  personal  record  of  the  life  of 
Professor  Sabsovich.  (New  York:  Author,  Room  1715,  80  Maiden  Lane. 
1922.      Pp.  viii,  208.) 

Sadder,  W.  S.  Race  decadence:  an  examination  of  the  causes  of  racial 
degeneracy  in  the  United  States.  (Chicago:  McClurg.  1922.  Pp.  x, 
421.) 

Williams,  E.  H.  Opiate  addiction;  its  handling  and  treatment.  (New 
York:  Macmillan.      1922.      Pp.  xxv,  194.     $1.75.) 

Annual  report  of  the  Massachusetts  Department  of  Public  Welfare,  1920. 
In    three    parts.      Pub.    doc.    17.      (Boston:    Dept.    of    Public    Welfare. 

1921.  Pp.  151,  343,  107.) 

Child  welfare  laws  of  the  state  of  Oregon.  Revised  to  include  later  amend- 
ments and  laws,  1922.      (Salem,  Ore.:  State  Child  Welfare  Commission. 

1922.  Pp.   100.) 

A  church  and  community  survey  of  Pend  Oreille  County,  Washington. 
Committee  on  Social  and  Religious  Surveys.  (New  York:  Doran.  1922. 
Pp.  vii,  51.     60c.) 

A  half  century  of  public  health;  jubilee  historical  volume  of  the  American 
Public  Health  Association,  in  commemoration  of  the  fiftieth  anniversary 
celebration  of  its  foundation.  Edited  by  M.  P.  Ravenel.  (New  York: 
Am.  Public  Health  Assoc.      1921.) 

Housing  corporations  in  the  United  States.  A  brief  report  on  the  organiza- 
tion and  methods  of  operation.  (New  York:  Metropolitan  Life  Ins.  Co. 
1922.) 

Illinois  manual  of  laws  affecting  women  and  children.  Issued  by  the 
Juvenile  Protective  Association  of  Chicago.  Compiled  and  revised  by 
H.  E.  Smoot.      (Chicago:  G.  H.  Seery  &  Co.      1922.      Pp.  189.) 

Industrial  home  work  of  children.  A  study  made  in  Providence,  Paw- 
tucket  and  Central  Falls,  R.  I.  Department  of  Labor,  Children's  Bureau 
pub.  no.  100.      (Washington:  Supt.  Docs.      1922.      Pp.  80.      10c.) 

List  of  bibliographies  on  crime  and  criminals.  (Washington:  Library  of 
Congress.      1922.      Pp.  21.) 

A  list  of  references  on  the  housing  problem.  Compiled  by  L.  H.  Bolander. 
(New  York:  Municipal  Reference  Library.      1922.      Pp.  41.) 

Plan  of  Next'  York  and  its  environs.  The  meeting  of  May  10,  1922.  (New 
York:  Russell  Sage  Foundation.      1922.) 

Promotion  of  the  xoelfare  and  hygiene  of  maternity  and  infancy.  Text 
of  act  of  November  23,  1921,  and  maximum  amounts  available  to  the 
states.  U.  S.  Department  of  Labor,  Children's  Bureau  pub.  no.  95. 
(Washington:  Supt.  Docs.      1921.      Pp.  5.) 

Report  of  the  United  States  Interdepartmental  Social  Hygiene  Board,  for 
the  fiscal  year  ended  June  30,  1921.  (Washington:  Supt.  Docs.  1921. 
Pp.  198.) 


1922]  Insurance  and  Pensions  529 

Social  hygiene  education;  report  on  a  social-hygiene  program  given  at 
Teachers  College  in  the  summer  session  of  1920.  (New  York:  Teachers 
College,  Columbia  Univ.      1921.      Pp.  22.) 

Insurance  and  Pensions 

NEW    BOOKS 

Brewster,  A.  The  Brewster  fire  insurance  digest.  (New  York:  Author. 
1922.     Pp.  78.      1922.     $1.) 

Chamberlin,  W.  F.  Industrial  relations  management  as  affected  by  group 
insurance.      (Hartford,  Conn.:  The  Travellers.      1922.) 

HuRD,  H.  B.  Lectures  on  marine  insurance.  Under  the  auspices  of  the 
Association  of  Underwriters  and  Insurance  Brokers  in  Glasgow.  (Lon- 
don: Effingham  Wilson.      1922.      3s.   6d.) 

iNGENHiJTT,  H.  Das  Viehversicherungswesen  in  der  Rheinprovinz.  (Leip- 
zig: Kurt  Schroeder  Verlag.      1922.) 

Keller,  M.  Die  Behandlung  des  Kriegsrisikos  in  der  Lebensversicherung 
unter  dem  Einfluss  des  JVeltkrieges.  (Berlin:  E.  S.  Mittler  &  Sohn. 
1922.      Pp.  88.      30  M.) 

Louge,  J.  L'assurance  maritime  et  les  risques  terrestres.  (Paris:  Lib. 
Generale  de  Droit  et  de  Jurisprudence.      1921.      Pp.  ix,  140.) 

Manes,  A.  Versicherungswesen.  Vol.  I — Allgemeine  V ersicherungslehre. 
Vol.  II — Besondere  T^  ersicherungslehre.  Third  edition.  (Leipzig: 
Teubner.      1922.      Pp.  xiv,  231;  xiv,  357.     $3.70.) 

May,  E.  C.  A  vision  of  life  insurance.  (Peoria,  111.:  E.  Hine  &  Co.  1921. 
Pp.  300.) 

Parker,  A.  J.,  editor.  Insurance  law  of  New  York,  being  chapter  28 
of  the  Consolidated  Laws,  and  chapter  33  of  1900  including  all  amend- 
ments of  1921.  (New  York:  Banks  Law  Pub.  Co.  1922.  Pp.  506. 
$6.) 

Ramsay,  W.  T.  and  Tead,  O.  Report  of  investigation  into  the  operation  of 
the  British  Health  Insurance  act.  (New  York:  Tead,  O.,  N.  Y.  School 
of  Social  Work.      1922.      Pp.  47.) 

Schneider,  W.  R.  The  law  of  workmen's  compensation,  rules  of  proce- 
dure, tables,  forms,  synopses  of  acts.  (St.  Louis,  Mo.:  Thomas  Law 
Book  Co.      1922.) 

Stevenson,  J.  A.  Selling  life  insurance.  (New  York:  Harper.  1922. 
Pp.  xi,  296.) 

Insurance  code  of  Arizona.  (Phoenix,  Ariz.:  Corporation  Commission,  In- 
surance Dept.      1922.) 

List  of  recent  references  on  unemployment  insurance.  (Washington: 
Library  of  Congress,  Div.  of  Bibliography.      1921.      Pp.   12.) 

Ordinances  governing  pensions  of  civil  employees.  (Providence,  R.  I.: 
Legislative  Reference  Bureau.      1922.      Pp.  6.) 

Workmen's  compensation  act  of  the  state  of  Indiana,  reprinted  April,  1921, 
with    amendments,    supplementary    acts    and    annotations ;    of    Missouri, 


530  Reviews  and  New  Books  [September 

effective  Sept.  1,  1921;  of  New  Mexico,  revised  with  amendments,  April, 
1921,  amendments  effective  June  11,  1921.  (New  York:  F.  R.  Jones,  80 
Maiden  Lane.      1921.      Pp.  43,  40,  32.      75c,  75c,  $1.) 

Socialism  and  Co-operative  Enterprises 

Socialism:  an  Analysis.  By  Rudolf  Eucken.  Translated  by  Joseph 
McCabe.  (New  York:  Charles  Scribner's  Sons.  1922.  Pp. 
188.     $2.75.) 

After  all  these  years  of  heated  controversy  it  has  remained  for  the 
philosopher  to  write  the  most  searching  and  effective  criticism  of  the 
socialist  ideal.  Professor  Eucken  does  not  pretend  to  be  an  economist, 
and  does  not  write  in  the  language  of  economics,  but  he  shows  that 
back  of  its  outward  aspects  socialism  comprises  an  ideal  of  life  which 
it  is  within  the  province  of  the  philosopher  to  analyze. 

The  first  half  of  the  book  is  devoted  to  a  statement  of  the  socialist 
ideal  which  is  eminently  fair,  and  which  presents  socialism  in  a  very 
favorable  light.  The  philosophical  criteria  by  which  this  ideal  must 
be  judged  are  then  outlined  in  a  short  chapter,  after  which  the  ideal 
is  subjected  to  critical  examination,  as  to  (1)  the  unity  and  harmony 
of  life,  (2)  the  socialist  idealism,  (3)  the  socialist  conception  of  history, 
(4)  the  limits  of  socialist  equality,  (5)  the  problem  of  socialization, 
and  (6)  a  criticism  of  economism.  Under  the  first  two  heads  Professor 
Eucken  finds  socialism  too  superficial.  It  is  unable  to  give  life  a 
sufficient  meaning  and  value.  Its  conception  of  history  is  inadequate. 
Its  equality  is  in  danger  of  becoming  injustice  and  bringing  about  a 
condition  without  spirituality  or  culture.  Socialism  has  no  inner 
power  to  bind  men  in  socialization,  therefore  the  structure  "must  fall 
apart  and  end  in  a  struggle  of  each  against  all."  The  economic  task 
cannot  be  taken  as  the  greatest  of  all  without  injuring  and  stunting 
man's  inner  life.  "The  external  would  dominate  the  internal."  In 
short  the  fundamental  weakness  of  socialism  is  its  materialism  and  its 
reliance  on  economic  conditions.  It  has  been  valuable  to  society  as  a 
criticism  of  existing  evils  but  it  is  lacking  on  the  constructive  side. 

It  is  of  course  Marxian  socialism  which  Professor  Eucken  thus  con- 
demns. There  are  perhaps  outside  of  Germany  some  schools  of  social- 
ist thought  which  would  not  merit  such  severe  condemnation,  but  the 
challenge  is  so  vigorous  that  all  forms  of  socialism  are  put  on  the 
defensive. 

G.  B.  L,  Arnee. 

NEW    BOOKS 

Bebel,  a.  and  Bernstein,  E.     Der  Briefwechsel  zwischen  Friedrich  Engels 
und  Karl  Marx,  18U  bis  1888.     Four  vols.      1922.      100  M.) 

Brand,  E.  and  Walecki,  H,     Der  Kommunismiis  in  Polen.     Drei  Jahre 


1922]  Statistics  and  Its  Methods  531 

Kampf   auf    vorgeschobenem    Posten.      (Hamburg:    Carl    Hovm    Nachf. 

1921.  Pp.  85.     4  M.) 

De  Leon,  D.  La  reconstruccion  socialista  de  la  sociedad  (el  voto  indus- 
trial).     (New  York:  El  Partido  Socialista  Obrero,      1922.      Pp.  75.) 

Dell,  R.      Socialism  and  personal  liberty.      (New  York:  Thomas  Seltzer. 

1922.  Pp.   160.     $1.75.) 

Doughty,  W.  H.,  Jr.  Socialism  and  the  average  man.  (New  York:  Put- 
nam.     1922.      Pp.  xiii,  238.     $2.50.) 

Hopkins,  O.  T.  Working  expenses  in  retail  distributive  cooperative  so- 
cieties.     (Manchester:  Co-operative  Union.      1921.      Pp.  .38.      Is.  6d.) 

Jaszi,  O.  Erxvin  Szabo  und  sein  WerJc.  (Leipzig:  Archiv.  f.  d.  Geschichte 
des  Sozialismus  u.  der  Arbeiterbewegung.      1921.) 

Knief,  J.  Lassalle.  (Leipzig:  Archiv.  f.  d.  Geschichte  des  Sozialismus 
u.  der  Arbeiterbewegung.      1921.) 

Lenz,  F.  Kant  und  Marxismus.  Grundlegung  und  Kritik  der  Marxist. 
(Stuttgart:  S.  Cottasche  Buchhandlung  Nachf.      1921.      Pp.175.      16  m.) 

Liefmann,  R.  Die  kommunistischen  Gemeinden  in  Nordamerika.  (Jena: 
Fischer.      1922.      Pp.  95.      12  M.) 

Mayer,  G.  Neue  Beitrage  zur  Biographic  von  Karl  Marx.  (Leipzig: 
Archiv  f.  d.  Geschichte  des  Sozialismus  u.  der  Arbeiterbewegung.      1921.) 

MoRizET,  A.  Chez  Lenine  et  Trotsky,  Moscou,  1921.  (Paris:  La  Re- 
naissance du  Livre.      1922.      7  fr.) 

Repka,  W.  Die  Sozialisierung  des  Reiches.  (Hamburg:  Unionverlag. 
1921.      Pp.  100.) 

Sass,  a.  Marx'  Beziehungen  zu  Bartholomdus  von  Szemere.  (Leipzig: 
Archiv  f.  d.  Geschichte  des  Sozialismus  u.  der  Arbeiterbewegung.     1921.) 

Savage,  M.  D.  Industrial  unionsim  in  America.  (New  York:  Ronald 
Press  Co.      1922.      Pp.  344.     $2.25.) 

Sturt,  H.  Socialism  and  character.  (London:  Allen  &  Unwin.  1922. 
Pp.  214.      7s.  6d.) 

WiZNiTZER,  A.  Marx  und  die  irische  Frage.  (Leipzig:  Archiv  f.  d. 
Geschichte  des  Sozialismus  u.  der  Arbeiterbewegung.      1921.) 

Cooperation;  a  selected  bibliography.  Bull.  no.  48.  (New  York:  Russell 
Sage  Foundation.      1921.      Pp.  4.) 

Cooperative  congress  1919  and  1920.  The  fifty-first  and  the  fifty-second 
annual  congress.  (London:  Co-operative  Union.  1921.  Pp.  xl,  814; 
xl,  824.) 

Statistics  and  Its  Methods 

Wealth  and  Taxable  Capacity.     By  Sir  Josiah   Stamp.      (London: 
P.  S.  King  &  Son.     1922.     Pp.  195.     10s  6d.) 
In  a  manner  both  scientific  and  readable  this  collection  of  lectures 
analyzes  the  recent  wealth  and  income  statistics  of  the  United  King- 
dom.    Dr.  Stamp's  evident  familiarity  with  the  available  data  is  re- 


532  Reviexvs  and  New  Books  [September 

vealed  so  clearly  that  the  reader  is  at  once  given  confidence  in  the  con- 
clusions reached. 

The  discussion  of  the  value  of  the  national  wealth  points  out  simply 
and  clearly  the  different  definitions  which  may  be  applied  to  this  con- 
cept and  the  Avide  discrepancies  in  the  results  obtained  by  following 
these  various  definitions.  In  only  one  respect  does  Dr.  Stamp's  analy- 
sis appear  to  be  materially  incomplete.  He  fails  to  show  that  the 
value  attached  to  the  tangible  wealth,  since  it  is  necessarily  derived 
from  the  interaction  of  subjective  estimates,  is  wholly  psychological; 
and  hence  may  change  greatly  with  waves  of  optimism  or  pessimism, 
even  though  no  change  occurs  in  the  stock  of  physical  goods  on  hand. 
While  the  device  of  multiplying  income  by  some  constant  factor  is  a 
most  useful  method  of  obtaining  a  first  approximation  to  a  total  of 
physical  wealth,  the  fact  should  be  more  clearly  brought  out  that  this 
procedure  gives  a  result  which  is  likely  to  differ  much  from  the  current 
value  placed  upon  the  total  existing  stock  of  goods. 

The  picturing  of  the  annual  national  income  as  a  great  heap  of 
goods  against  which  individual  income  recipients  are  constantly  being 
given  claim  checks  is  a  very  forceful  way  of  presenting  to  the  public 
a  much  misunderstood  phenomenon.  The  difficult  question  of  dealing 
with  interest  on  loans  for  consumption  purposes  is  less  adroitly  han- 
dled. The  author  apparently  overlooks  the  fact  that  the  borrower,  by 
obtaining  goods  when  he  wishes  them,  may  thereby  gain  an  additional 
service  equalling  in  value  the  interest  that  he  pays.  Is  it  not  reason- 
able to  include  the  value  of  this  additional  service  in  the  total  of  the 
national  income?  In  his  discussion  of  tax  payments  Dr.  Stamp  no- 
where touches  upon  what  seems  to  be  the  crux  of  the  whole  matter: 
namely,  the  fact  that  the  government  gives  in  return  for  taxes  two 
kinds  of  services ;  assistance  to  business  and  direct  consumption  goods. 
Evidently,  the  tax  bill  covering  the  first  class  of  services  is  deductible 
from  the  total  of  individual  incomes ;  while  taxes  going  to  buy  direct 
enjoyment,  as  for  example  the  use  of  city  water  or  parks,  are  no  more 
deductible  than  are  pa3'^ments  for  groceries  or  theatre  tickets.  He 
also  seems  to  overlook  the  fact  tliat  the  victory  over  Germany  was 
largely  a  service  of  the  latter  class. 

In  enumerating  various  methods  of  measuring  the  national  income, 
the  author  does  not  mention  that  one  which  is  perhaps  the  easiest: 
namely,  that  of  ascertaining  the  total  paj^ments  by  industries  to  indi- 
viduals made  in  such  forms  as  wages,  salaries,  rents,  interest,  dividends, 
etc. 

The  recent  studies  made  by  Mr.  Frederick  Macaulay  seem  to  indi- 
cate that  Parcto's  so-called  law  is  entitled  to  somewhat  less  confidence 
than  that  given  to  it  by  Dr.  Stamp,  even  though  it  doubtless  has  dis- 
tinct merit  as  a  means  of  detecting  gross  errors. 


1922]  Statistics  and  Its  Methods  533 

The  conclusion  reached  that  the  slope  of  the  curve  representing  dis- 
tribution of  income  has  remained  much  the  same  for  120  years  is  one 
of  the  most  interesting  things  in  the  book.  It  is  distinctly  in  harmony 
with  the  evidence  previously  cited  by  the  present  reviewer  of  the  general 
tendency  of  the  distribution  of  wealth  to  be  very  similar  at  widely 
separated  times  and  in  different  countries.  Is  there,  then,  a  "natural 
law"  of  distribution  of  wealth  and  income  based  upon  the  distribution 
of  human  ability?  Another  conclusion  of  importance  is  that  the  net 
savings  of  the  British  people  tend  to  be  about  one  sixth  of  their  total 
income.  This  fraction  corresponds  very  closely  to  a  recent  estimate 
for  the  United  States  made  by  the  present  reviewer. 

The  analysis  of  the  forces  affecting  the  taxable  capacity  of  a  nation 
is  one  of  the  chief  contributions  of  the  book  and  is  well  worthy  of  the 
attention  both  of  economists  and  of  students  of  public  finance,  as  is 
also  the  chapter  on  "The  effect  of  changing  price  levels  upon  profits 
and  wages."  This  last  section  would  be  strengthened  slightly  were 
the  fact  brought  out  that  wholesale  prices  are  affected  largely  by  opti- 
mism and  pessimism  concerning  the  business  outlook  as  well  as  by 
changes  in  the  quantity  of  the  medium  of  exchange. 

On  the  whole,  this  book,  whether  considered  from  the  theoretical 
point  of  view  or  merely  in  respect  to  the  statistics  pertaining  to  the 
United  Kingdom,  is  entitled  to  rank  with  the  best  of  works  dealing 
with  wealth  and  income  and  their  relation  to  taxation. 

WiLLFORD  I.  King. 

National  Bureau  of  Economic  Research. 

NEW    BOOKS 

BoDDiNGTON,  A.  L.     Statistics  and  their  application  to  commerce.      (Lon- 
don: H.  Foulks  Lynch  &  Co.     1921.     Pp.  xv,  220.) 

Davies,  G.  R.     Introduction  to  economic  statistics.      (New  York;  Century 
Co.      1922.      Pp.  vi,  163.) 

This  latest  addition  to  the  rapidly  increasing  number  of  elementary 
texts  on  statistical  method  is  written  to  meet  the  demand  of  tliose  who 
desire  to  teach  the  subject  in  conjunction  with  economic  problems  and 
to  have  text  and  laboratory  exercises  combined  in  one  volume.  For  the 
teacher  who  is  compelled  to  give  a  hasty  review  of  statistics  in  a  single 
semester,  with  only  a  meager  amount  of  time  available  for  laboratory 
work,  such  a  text  has  distinct  advantages  and  this  type  of  demand  is 
so  common  that  the  book  will  doubtless  serve  a  large  constituency. 

The  amount  of  space  devoted  to  the  study  of  abstract  basic  principles 
has  been  reduced  to  a  minimum  and  the  student  is  introduced  almost 
at  once  to  the  field  of  practical  problems.  As  a  rule,  these  are  well  set 
forth,  though  in  some  instances  clarity  has  been  sacrificed  to  brevity. 
That  important  subject,  the  correct  method  of  constructing  table  forms, 
has  been  passed  over  very  lightly  and  the  student  is  soon  introduced  to 
frequency  tables  and  averages.  The  bulk  of  the  work  is  devoted  to  the 
treatment  of  historical  data,  much  space  being  given  to  index  numbers  of 


534  Reviews  and  Nero  Books  [September 

wages  and  prices.  Descriptions  of  the  methods  involved  are  frequently 
illustrated  by  examples  of  existing  price  index  series.  The  ways  in 
which  these  indices  are  derived  are  explained  admirably  but  the  princi- 
ples underlying  the  different  types  of  index  numbers  are  not  always  so 
clearly  set  forth. 

The  reviewer  regrets  to  see  Professor  Davies  endorse  the  Chinese- 
like plan  of  putting  the  last  date  first  and  the  rather  unscientific  pro- 
cedure of  forcing  percentages  to  add  up  to  100.  Another  feature  of  the 
book  which  is  subject  to  criticism  is  the  form  of  the  charts.  The  numbers 
on  the  vertical  scales  are  frequently  misplaced  and  scale  titles  are  often 
either  missing  or  inadequate.  The  discussion  of  the  methods  used  in 
determining  the  trends  of  historical  variables  is  characterized  by  un- 
usual simplicity  and  clarity.  Just  what  tlie  trend  is  intended  to  portray 
is  not,  however,  so  clearly  brought  out.  The  treatment  of  correlation 
likewise  is  strong  in  description  of  the  process  but  somewhat  weak  in 
analysis  of  the  fundamental  principles  involved.  The  book  includes 
clear  directions  for  laboratory  practice,  an  admirable  bibliography,  and 
a  simple  table  of  squares  and  cubes  with  the  corresponding  roots.  It 
also  contains  no  inconsiderable  amount  of  valuable  statistical  data.  On 
the  whole,  the  work  reflects  distinct  credit  on  its  author. 

WiLLFORD  I.   Kino. 

Day,  E.  E.,  editor.  Statistical  record:  1921.  Monthly  data.  Review  of 
Economic  Statistics,  Supplement,  April,  1922.  (Cambridge:  Harvard 
Econ.  Service.      1922.      Pp.   141.) 

Fisher,  A.  The  mathematical  theory  of  prohahilities  and  its  application 
to  frequency  curves  and  statistical  methods.  Vol.  I,  Mathematical  proh- 
ahilities, frequency  curves,  homograde  and  heterograde  statistics.  Second 
edition,  greatly  enlarged.      (New  York:  Macmillan.      1922.     $5.) 

GiLBRETH,  F.  B.  and  Gilbreth,  L.  M.  Process  charts.  Presented  at  the 
annual  meeting  of  the  American  Society  of  Mechanical  Engineers,  Decem- 
ber, 1921.  (Montclair,  N.  J.:  F.  B.  Gilbreth,  58  Eagle  Rockway.  1922. 
Pp.  17.) 

Laplace,  P.  S.  Essai  philosophique  sur  les  prohahilites.  (Paris:  Gau- 
thier-Villars.      1922.     6  fr.) 

Persons,  W.  M.  Interpretation  of  the  index  of  general  hiisiness  conditions. 
(Cambridge:  Harvard  Econ.   Service.      1922.      Pp.   11.) 

Saitzew,  M.  Die  Motorenstatistik,  ihre  Methode  und  ihre  Ergehnisse. 
Eine  Studie  aus  dem  Gehiete  der  internationalen  Wirtschaftsstatistik. 
(Zurich:  E.  Rascher.      1922.      Pp.  vii,  275.) 

Symiand,  F.      Statistique   et  experience.     Remarque  de   methode.      (Paris: 

Riviere.      1922.) 
Zuckermann,  S.      Statisticher  Atlas  zum   W elthandel.      Part  I.      Text  und 

Tahellen.     Part    II:     Graphische    Tafeln.      (Berlin:    O.    Eisner.      1922. 

Pp.  xvi,  191;  166.      600  M.) 

Age-grade  and  nationality  survey  by  the  Bureau  of  Statistics  and  Reference. 
Research  bull.  no.  7.  (Detroit,  Midi.:  Detroit  Educational  Bulletin,  Bd. 
of  Education.      1922.      Pp.   27.) 

Empire  du  Japon  pendant  Van  VII  de  Taisho — 1918.  Statistique  des 
causes  de  dices  de  I'Empire.      Vol.  I — En,  Ken  et  Hokkaido  ou  districts. 


1922]  Statistics  and  Its  Methods  636 

Vol.    II — Shi   et   Ku    ou    grandes    cites   de   plus   de   50,000    inhabitants. 
(Tokio:  Dept.  Imperial  de  Recensement.      1921.     Pp.  vi,  493;  ii,  335.) 

Official  year  hook  of  the  Commonwealth  of  Australia,  1901-1920.  No.  14. 
(Melbourne:  Commonwealth  Bureau  of  Census  and  Statistics.  1921.  Pp. 
xxxviii,  1228.) 

Results  of  a  census  of  the  Dominion  of  New  Zealand,  April  17,  1921. 
Part  I,  Population.  With  appendices  A,  B,  C,  D,  E,  and  F.  (Well- 
ington: Census  and  Statistics  Office.      1921.      Pp.  91,   15,   15,  12.) 

Resumenes  del  censo  de  las  Provincias  de  Lima  y  Callao,  1920.  (Lima, 
Peru:  Imp.  Tonne  Aguinne,      1921.     Pp.  200.) 

Statistical  abstract  of  Peru,  1920.  (Lima:  Bureau  of  Statistics.  1921. 
Pp.  133.) 

Statistics  of  private  commercial  and  business  schools,  1919-1920.  Bureau 
of  Education,  bulletin,  1922,  no.  4.  (Washington:  Supt.  Docs.  1922. 
Pp.  11.  5c.) 

Statistics  of  raihvays  in  the  United  States,  1919.  (Washington:  Inter- 
state Commerce  Commission.      1922.      Pp.   819.) 

Statistish  aarbog  1921.  Udgivet  af  det  Statistiske  Departement.  (Copen- 
hagen: Gyldendalske  Boghandel.      1922.      Pp.  xxiv,  236.     2  Kr.) 

Statistical  year  book  of  Quebec,  1921.  (Quebec:  Bureau  of  Statistics. 
1921.      Pp.  vii,  576.) 

Statistisk  Arsbok  for  Finland  ny  serie  Nittonde  Argdngen,  1921.  {Hel- 
singfors:  Statsradets  Tryckeri.      1921.      Pp.  294.) 

Trade  of  the  United  States  in  1921  stated  in  the  international  statistical 
classification.  (Supplement  to  Commerce  Reports,  Department  of  Com- 
merce, July  12,  1922.  Trade  information  bull.  no.  30.  (Washington: 
Bureau  of  Foreign  and  Domestic  Commerce.      1922.      Pp.  9.) 

United  States  life  tables,  1890,  1901,  1910,  and  1901-1910.  Explanatory 
text,  mathematical  theory,  computations,  graphs,  and  original  statistics, 
also  tables  of  United  State  life  annuities,  life  tables  of  foreign  countries, 
mortality  tables  of  life  insurance  companies.  Issued  by  the  Bureau  of 
Census.      (Washington:  Supt.  Docs.      1922.     $1.25.) 

Western  Australia  statistical  register  for  the  year  1920-1921  and  previous 
years.  Part  II  and  III:  Public  finance  and  accumulation;  V:  Land 
settlement,  agriculture,  live  stock,  and  meteorological  statistics;  VI:  In- 
dustrial establishments  (exclusive  of  mines);  VII:  Mineral  statistics  and 
water  conservation.  (Perth:  Fred  W.  Simpson.  1922.  Pp.  16,  71,  23, 
II.) 

Die  Wirtschaftskurve.  Mit  Indexzahlen  der  Frankfurter  Zeitung.  (Frank- 
furt: Verlag  der  Frankfurter  Societatsdruckerei.     1922.     Pp.  80.  15  M.) 

Year  book  of  the  state  of  Indiana,  1921.  (Indianapolis,  Ind. :  Governor's 
Office.      1922.      Pp.  1213.) 


PERIODICALS 

The  Review  is  indebted  to  Robert  F.  Foerster  for  abstracts  of  articles  in  Italian 
periodicals,  and  to  R.  S.  Saby  for  abstracts  of  articles  in  Danish  and  Swedish 
periodicals. 

Economic  History  (United  States) 

(Abstracts  by  Amelia  C.  Ford) 

Applegate,  L.  Notes  and  reminiscences  of  laying  out  and  establishing  the  old 
Emigrant  Road  into  South  Oregon  in  the  year  I846.  Ore.  Hist.  Soc.  Quart.,  Mar., 
1921.  Pp.  34.  Relates  hardships  and  Indian  dangers  endured  while  blazing  out 
a  route  to  the  Far  West;  refers  to  opposition  from  the  Hudson  Bay  Co. 

Arneson,  E.  p.  The  Bryan-Hayes  correspondence ;  early  irrigation  in  Texas.  South- 
western Hist.  Quart,  Oct.,  1921. 

BuFFiNGTON,  A.  H.  The  policy  of  Albany  and  English  westward  expansion.  Miss. 
Valley  Hist.  Rev.,  Mar.,  1922.  Pp.  40.  Discusses  the  methods  of  the  Albany  fur 
traders  in  the  17th  century;  believes  these  Dutch  burghers  were  in  a  position  to 
strike  for  the  fur  trade  of  the  continent  had  they  had  imagination  and  willingness 
to  take  risks. 

BuRNHAM,  G.  H.  Economic  effects  of  New  England's  ice  storm.  Journ.  of  Geog., 
May,  1922.  Pp.  9.  Tells  of  the  havoc  wrought  on  all  forms  of  wire  service  in 
the  vicinity  of  Worcester,  Mass.,  and  how  the  damage  was  repaired. 

Connolly,  J.  C.  Quitrents  in  colonial  New  Jersey  as  a  contributing  catise  for  the 
American  Revolution.     Proc,  N.  J.  Hist.  Soc,  Jan.,  1922. 

CoTTERiLL,  R.  S.  The  beginnings  of  railroads  in  the  Southwest.  Miss.  Valley  Hist. 
Rev.,  Mar.,  1922.  Pp.  9.  Describes  the  efforts  of  rival  southern  cities  in  the 
30's  to  tap  the  New  Orleans'  trade  with  the  west,  and  the  resultant  railroad 
schemes. 

Graham,  F.  D.  International  trade  under  depreciated  paper:  the  United  States, 
1862-70.  Quart.  Journ.  Econ.,  Feb.,  1922.  Pp.  54.  A  statistical  study  of  prices 
in  the  U.  S.  during  the  greenback  period;  a  test  and  substantial  verification  of 
Professor  Taussig's  theory  as  to  international  trade  under  depreciated  currency. 

Harlan,  E.  R.  Transportation  in  Iowa  before  the  railroads.  Annals  of  Iowa,  July, 
1921.  Pp.  7.  Describes  the  course  followed  by  early  travel  in  Iowa,  particularly 
the  Mormon  Trail';  includes  an  advertisement  of  the  ferry  at  Council  Bluffs. 

Hatcher,  M.  A.  Conditions  in  Texas  affecting  the  colonization  problem,  1795-1801. 
Southwestern  Hist.  Quart.,  Oct.,  1921. 

Jn.LSON,  W.  R.  A  history  of  the  coal  industry  in  Kentucky.  Register  of  Ky.  State 
Hist.  Soc,  Jan.,  1922.  Pp.  25.  Outlines  the  development  of  the  coal  mines,  labor 
troubles,  improvements  in  mining  methods,  markets,  statistics  of  annual  pro- 
duction.    Illustrated. 

Kuykendai.l,  R.  S.  An  American  shipbuilder  for  Spanish  California.  Hispanic 
Am.  Hist.  Rev.,  Feb.,  1922.  Pp.  3.  Tells  of  a  contract  made  in  1788  with  a 
master  sliipbuildor  of  Boston  to  go  to  the  Calif ornias  and  of  the  rejection  of  this 
"foreigner"  by  the  viceroy  who  demanded  a  shipbuilder  from  Spain  since  none 
was  to  be  had  in  Havana. 

Martin,  H.  C.  Provincial,  continental,  and  federal  revenues  of  Lancaster  County. 
Papers  read  before  the  Lancaster  Co.  Hist.  Soc,  Feb.,  1921. 

Meima,  R.  C.  a  forgotten  city.  Mich.  Hist.  Mag.,  July-Oct.,  1921.  Pp.  13.  Tells 
of  the  outlay  in  1835-37  of  vast  sums  to  construct  on  Pigeon  River,  Michigan,  a 
metropolis  for  the  whole  Mississippi  Valley,  and  of  the  ruin  of  the  scheme. 


1922]  Economic  Historij  (United  States)  537 

MoBHisoN,  A.  J.  Virginia  Indian  trade  to  1673.  William  and  Mary  College  Quart. 
Hist.  Mag.,  Oct.,  1921. 

Mtjbdock,  F.  R.  Some  aspects  of  Pittsburgh's  industrial  contribution  to  the  World 
War.     Western  Penn.  Hist.  Mag.,  Oct.,  1921. 

O'Hahha,  C.  C.  Some  early  pictures  of  the  Black  Hills  Country.  Pahasapa  Quart., 
published  by  the  So.  Dakota  School  of  Mines,  Feb.,  1921.  Pp.  9.  An  important 
function  of  the  Custer  expedition  of  1874  was  the  search  for  gold;  gives  a  picture 
of  the  first  quartz  mill  brought  into  the  Black  Hills,  Sept.,  1876.  The  mill  is 
described  by  Capt.  C.  V.  Gardner  in  the  Deadwood  Times,  August,  1888. 

Peattie,  R.  Hiinting  oil  in  Oklahoma.  Atlantic  Mo.,  May,  1922.  Pp.  12.  De- 
scribes living  conditions  in  the  oil  country  and  certain  aspects  of  the  oil  business. 

ScHAFER,  J.  The  microscopic  method  applied  to  history.  Minn.  History  Bull.,  Feb.- 
May,  1921.  Pp.  18.  Sets  forth  the  plan  of  writing  a  pioneer  history  of  every 
township  in  Wisconsin,  with  plates  showing  the  farms  and  their  owners  from 
the  beginning  up  to  1870. 

.     Wisconsin's  Farm  Loan  law.  1849-1863.     Proc.   Wis.   State   Hist.   Soc, 

Oct.,  1920.  Pp.  36.  A  comprehensive  discussion  of  the  state's  policy  in  handling 
its  school  lands  and  the  funds  arising  from  their  sale  during  1849-1863;  a  loan 
feature  in  this  policy  worked  hardships  and  losses. 

Seabs,  L.  M.  The  middle  states  and  the  embargo  of  1808.  So.  Atlantic  Quart.,  Apr., 
1922.  Pp.  18.  Analyzes  the  attitude  of  each  of  the  middle  states  towards  the 
embargo — a  median  attitude,  on  the  whole ;  considers  the  conflict  of  sentiment  in 
Philadelphia  offers  an  important  clue  to  the  sources  of  national  action  during 
the  embargo  period. 

Shahp,  M.  J.  The  3/.  S;  M.  Railroad.  Palimpsest,  Jan.,  1922.  Pp.  15.  Sketches 
the  building  of  the  Mississippi  and  Missouri  Railroad  in  Iowa,  18.54-55,  and  its 
final  fall  into  a  receiver's  hands. 

Simpson,  C.  Reminiscences  of  early  Pittsburgh.  Western  Penn.  Hist.  Mag.,  Oct., 
1921. 

Strobel,  H.  F.  Coal  and  other  things.  Stone  &  Webster  Journ.,  June,  1922.  Pp.  21. 
Sketches  the  two  chief  matters  at  issue  in  the  coal  miners'  strike,  the  character 
of  our  bituminous  coal  resources,  and  methods  of  working  the  mines. 

An  early  description  of  Pennsylvania.  A  letter  written  in  1724  by  Christopher 
Sower,  describing  a  voyage  from  Europe  and  conditions  in  Philadelphia  and 
vicinity.  Penn.  Mag.  Hist.  &  Blog.,  July,  1921.  Pp.  12.  Includes  facts  as  to 
wages,  house  rent,  prices  of  commodities  in  Philadelphia  in  1724. 

Diary  of  a  journey  through  Massachusetts,  Vermont,  and  New  York  in  1800.  Vt. 
Hist.  Soc,  Proc.  for  1919-1920. 

Journal  of  William  .Johnson.  Proc.  N.  J.  Hist.  Soc,  Jan.,  1922.  Describes  a 
journey  by  way  of  Pittsburgh  and  the  Mississippi  to  New  Orleans,  1800-1801. 
The  journal,  which  will  be  continued,  extends  to  1813. 

Letters  of  a  railroad  builder:  Isaac  Lane  Usher.  Palimpsest,  Jan.,  1922.  Pp.  13. 
Edited  by  John  C.  Parish.  Devoted  chiefly  to  the  financial  details  of  railroad 
construction  work  in  Iowa  during  18.33-1855,  to  prices  of  land,  and  business  con- 
ditions. 

Letters  of  Sieur  Terrisse  de  Ternan,  1737-1731,  from  the  Cabildo  Archives,  New 
Orleans.  La.  Hist.  Quart.,  Oct.,  1920.  Pp.  34.  Contain  various  references  to 
the  trade  carried  on  between  French  settlements  on  the  Mississippi  and  New 
Orleans  before  the  Revolution. 

Westover  Journal  of  John  A.  Selden,  Esq.,  1858-1862.  Smith  College  Studies  in 
History,  vol.  VI,  no.  4,  July,  1921.  Introduction  and  notes  by  Professor  John  S. 
Bassett. 


538  Periodicals  [September 

Economic  History  (Foreign) 

Addis,  C.  Financial  conditions  and  outlook.  Scottish  Bankers  Mag.,  Jan.,  1922. 
Pp.  15. 

Alvarez,  F.  M.  La  clausula  dela  Nacion  m,ds  favorecida  y  nuestra  politica  comer- 
cial.     Rev.  de  Ciencias  Econ.,  Feb.,  1922.     Pp.  18. 

Arminjon,  p.  Situation  4conomique  de  VEgypte  au  moment  de  la  guerre.  Rev. 
Econ.  Intern.,  vol.  II,  no.  2,  1921.     Pp.  30. 

Ashley,  W.  The  place  of  rye  in  the  history  of  English  food.  Econ.  Journ.,  Sept., 
1921. 

Barthe,  a.  Las  herencias  en  Espana.  Rev.  Nacional  de  Econ.,  Tomo  X,  1921. 
Pp.  13. 

Besnieh,  M.  Le  commerce  du  plomb  a  IVpoque  romaine  d'aprks  les  lingots  estam- 
pilUs.     Rev.  Archeologique,  Nov.-Dec,  1920. 

Bezakson,  a.  Early  use  of  the  term  Industrial  Revolution.  Quart.  Journ.  Econ., 
Feb.,  1922.     Pp.  6. 

Birck,  L.  V.  Krigens  Fallitbo.  Nat.  ok.  Tids.,  no.  5-6,  1921.  Pp.  49.  Discusses 
the  disastrous  economic  conditions  following  the  war,  paying  special  attention  to 
dumping,  inflation,  deflation  and  state  indebtedness. 

Birkett,  M.  S.     The  British  iron  and  steel  industry.     Economica,  June,  1922. 

BuLLAHD,  W.  I.  The  financial  debacle  of  central  Europe.  Stone  &  Webster  Journ., 
Jan.,  1922. 

Casenave,  M.     The  economic  situation  of  France.     Bankers  Mag.,  Feb.,  1922.     Pp.  7. 

Chandler,  H.  A.  E.  Some  significant  aspects  of  the  German  problem.  Commerce 
Mo.,  Apr.,  1922. 

Chapot,  V.  L'histoire  iconomique  de  la  Gr^ce.  Rev.  de  Synthase  Historique,  Jan.- 
July,  1921. 

Chen,  T.  Prices  and  cost  of  living  in  Japan  and  China  since  the  World  War.  Mo. 
Labor  Rev.,  Dec,  1921. 

Ctjvelier,  J.  Un  capitaliste  du  XlVe  sidcle.  Bull.  CI.  Lettres  et  Sciences  Mor.  et 
Pol.,  no.  2,  1921. 

Davidson,  D.  Till  frdgan  om  den  rddande  depressions  genesis.  Ek.  Tids.,  no.  12, 
1921.  Pp.  6.  Discusses  the  disposition  of  the  larger  war  supplies  and  banking 
policies  as  factors  in  the  economic  depression  following  the  war. 

Davis,  J.  S.  Recent  developments  in  world  finance.  Rev.  Econ.  Stat.,  April,  1922. 
Pp.  25. 

DoucET,  R.    La  France  de  1796,  VAllemagne  de  1922.     Monde  Econ.,  May  20,  1922. 

Gihault,  a.  La  situation  financiire  de  Madagascar.  L'Econ.  Frang.,  Apr.  8,  1922. 
Pp.  3. 

Haix,  H.  Classified  list  of  agrarian  surveys  to  the  public  record  office  {London). 
Economica,  Jan.,  1922.     Pp.  19. 

Hammond,  J.  L.  The  agricultural  laborer  in  the  early  nineteenth  century.  Journ. 
Min.  Agri.   (London),  no.  7,  1921.     Pp.  11. 

Hashaoen,  J.  Die  Vereinigten  Staaten  und  Ostasien  vor  der  Erschliefung  Japans. 
Weltwirtsch.  Archiv,  Jan.,  1922. 

Hertz,  F.     Austria's  financial  breakdotiyn.     Nation,  Jan.  18,  1922.     Pp.  2. 

Kiddy,  A.  W.  Britain's  financial  and  commercial  position  after  the  war.  Bankers 
Mag.,  Apr.,  1922. 


1922]  Agricultural  Economics  539 

Agricultural  Economics 

(Abstracts  by  A.  J.  Dadisman) 

Caveht,  W.  L.  Far7n  lease  contracts.  Minn.  Sta.  Ext.  Bull.  51,  Oct.,  1921.  Pp.  8. 
A  summary  of  points  to  consider  in  leasing  farms. 

Ely,  R.  T.  A  national  policy  for  land  utilization.  Pacific  Rev.,  Mar.,  1922.  Pp.  9. 
An  argument  favoring  a  national  land  policy  based  upon  classification  of  land. 

Gray,  L.  C.  and  TtraNEB,  H.  A.  Buying  farms  with  land-bank  loans.  U.  S.  Dept. 
Agri.  Bull.  968,  July,  1921.  Pp.  27.  An  analysis  of  the  methods  used  in  obtaining 
land  by  2700  farmers  who  borrowed  through  the  federal  farm  loan  banks. 

IIakdschik,  W.  F.  Research  in  farm  economics  and  farm-  management.  Journ. 
Farm  Econ.,  Jan.,  1922.  Pp.  12.  An  analysis  of  the  chief  needs  at  the  present 
time. 

Hepburn,  W.  M.,  compiler.  Agricultural  books  of  1921.  Special  Libraries,  June, 
1922.     Pp.  3.     A  list  of  thirty-seven  books  with  brief  comments  on  each. 

HoAG,  E.  F.  The  national  influence  of  a  single  farm  community.  U.  S.  Dept.  Agri. 
Bull.  984,  Dec,  1921.  Pp.  55.  A  study  of  the  activities,  at  home  and  abroad,  of 
the  families  of  a  rural  community  in  northern  New  York.  Fifteen  tables  and 
twenty-three  figures. 

HoLDswoBTH,  J.  T.  Farm  credits.  Journ.  Farm  Econ.,  Jan.,  1922.  Pp.  6.  An 
argument  in  favor  of  better  facilities  for  agricultural  credit. 

Jensen,  W.  C.  The  cost  of  production  of  farm  products.  So.  Carolina  Exp.  Sta. 
Ext.  Bull.  49,  Dec,  1921.  Pp.  29.  An  analysis  of  costs  of  growing  the  principal 
farm  crops  and  an  outline  of  method  of  cost  accounting. 

KiLBY,  L.  G.  Cotton  growing  within  the  British  Empire.  Econ.  World,  June,  1922. 
Pp.  4.  A  review  of  recent  developments  in  cotton  growing  countries  of  the  empire 
and  possible  future  development. 

Mehabry,  C.  L.  Some  factors  of  success  in  cornbelt  farming.  Journ.  Farm  Econ., 
Jan.,  1922.     Pp.  12.     A  discussion  of  factors  of  success  from  practical  experiences. 

MooEEHOusE,  L.  A.  and  Juve,  O.  A.  Labor  and  material  requirements  of  field  crops. 
U.  S.  Dept.  Agri.  Bull.  1000,  Dec,  1921.  Pp.  56.  A  statistical  and  graphic 
presentation  of  costs  of  producing  fifteen  principal  crops.  Forty-two  tables  and 
sixteen  figures. 

Rew,  R.  H.  The  progress  of  British  agriculture.  Journ.  Royal  Stat.  Soc,  Jan., 
1922.     Pp.  19.     A  statistical  study  of  the  land  area  and  agricultural  production. 

ScHEL,  G.  B.  Modern  land  settlement.  California  Journ.  Agri.,  Mar.,  1921.  Pp.  4. 
Seven  fundamental  principles  are  discussed. 

Wehrwein,  G.  S.  Who  owns  the  agricultural  land  in  the  United  States.  Journ. 
Farm  Econ.,  Jan.,  1922.  Pp.  8.  A  discussion  of  the  problems  in  connection  with 
the  ownership  of  agricultural  land. 

Whitbeck,  R.  H.  Geographical  relations  in  the  development  of  Cuban  agriculture. 
Geographical  Rev.,  Apr.,  1922.  Pp.  18.  A  study  of  the  present  agricultural  de- 
velopment and  future  possibilities  in  Cuba.     Seven  figures. 

Wright,  I.  The  federal  farm  loan  system.  Illinois  Sta.  Cir.  259,  June,  1922.  Pp.  20. 
An  outline  of  the  organization  and  operation  of  the   federal   farm   loan  system. 

The  agricultural  credit  provided  by  the  bank  of  Naples  and  the  bank  of  Sicily. 
Intern.  Rev.  Agri.  Econ.,  Nov.,  1921.  Pp.  9.  Detailed  methods  used  and  results 
obtained. 


540  Periodicals  [September 

Railways  and  Transportation 

(Abstracts  by  Julius   H.  Parmelee) 

AisHTON,  R.  H.  What  railroads  are  doing  to  increase  economy  and  efficiency  of 
operation.     Proc.  Acad.  Pol.  Sci.,  July,  1922.     Pp.  3. 

Allix,  G.  La  sitiiation  des  chemins  de  fer  franqais.  Rev.  Pol.  et  Pari.,  May  10, 
1922.     Pp.  11.     Workings  of  the  new  French  railway  act. 

Baker,  B.  The  basis  of  railroad  wage  settlements.  Annalist,  July  3,  1922.  Pp.  2. 
Analysis  of  living  wage  principle. 

■ .     Railroad  wages  and  cost-of-living   budgets.     Annalist,   June   19,   1922. 

Pp.  2. 
BoEHLER,  E.     Die  englische  Eisenbahnpolitik  der  letzten  vierzig  Jahre  (1883-1922). 

Archiv  f.  Eisenbahnw.,  May-June,  1922.     Pp.  21.     Second  of  a  series,  the  first  of 

which  was  noted  in  June  issue. 

Brisler,  H.  J.  The  French  railway  problem..  Pol.  Sci.  Quart.,  June,  1922.  Pp.  16. 
Steps  leading  up  to  French  railway  act  of  1921. 

Chittendek,  G.  E.     a   summary  of  world  progress  in  railway   electrification.     So. 

African  Rys.  &  Harbours  Mag.,  May,  1922.     Pp.  25.     With  elaborate  statistical 

tables  by  A.  M.  Evans.     Text  covers  Great  Britain,  America,  France,  Switzerland, 

Italy  and  other  countries  in  detail. 
Clapp,   E.   J.     An  American   transportation   system.     New   Repub.,   July    12,    1922. 

Pp.  4.     Final  article  in  series  of  four.     Waterway  problem  treated. 

Cunningham,  W.  J.  How  the  railroads  may  render  maximum  service.  Proc. 
Acad.  Pol.  Sci.,  July,  1922.     Pp.  8. 

Daniel,   H.     The  romance   of  world  communications.     World's   Work,  June,   1922. 

Pp.  9.     The  interlocking  service  of  railways,  ships,  telephone,  telegraph,  cables, 

and  radio. 
Davis,  J.  C.     The  aftermath  of  federal  control.     Proc.  Western  Ry.  Club,  May  15, 

1922.     Pp.  10.     Address  by  the  Director  General  of  Railroads.     Also  appeared  in 

Railway  Review  for  May  20,  1922. 

.     Liquidation  of  federal  railroad  control.     Am.  Bar  Assoc.  Journ.,  June, 

1922.     Pp.  6.     Address  by  Director  General  of  Railroads. 

Dixon,  F.  H.  Functions  and  policies  of  the  Railroad  Labor  Board.  Proc.  Acad. 
Pol.  Sci.,  July,  1922.     Pp.  10. 

DoAK,  W.  N.  Labor  policies  of  the  Transportation  act  from  the  point  of  view  of 
railroad  employees.     Proc.  Acad.  Pol.  Sci.,  July,  1922.     Pp.  10. 

Dunn,  S.  O.  America's  railway  fallacy.  No.  Am.  Rev.,  June,  1922.  Pp.  12.  That 
public  service  corporations  should  be  held  down  to  the  lowest  rate  that  avoids 
confiscation. 

.     International   congress    considers   many   subjects.     Ry.    Age,    May    13, 

1922.  Pp.  5.  Review  of  program  of  ninth  congress  of  International  Railway 
Association  at  Rome,  May,  1922. 

.     Rome  congress  adopts  interesting  conclusions.     Ry.  Age,  May  20,  1922. 

Pp.  6.     Summary  of  conclusions  reached  at  ninth  International  Railway  Congress. 

.     Some  observations   on  European  railway   service.     Ry.   Age,   May   27, 

1922.     Pp.  3. 

DuNNELL,  R.  F.  Transport  law.  Journ.  Inst.  Transport  (London),  March,  1922. 
Pp.  11.     Development  of  transportation  law  in  England. 

Emerson,  H.  The  railway  target — how  to  hit  the  bull's  eye.  Proc.  N.  Y.  Railroad 
Club,  Apr.  21,  1922.  Pp.  II.  Discussion  of  standards  by  which  to  judge  railway 
financial  results,  with  statistics  and  charts. 


1922]  Railways  ajid  Transportation  541 

A  simplified  analysis  of  the  railroad  problem.     Ry.  Age,  Apr.  29,  1922. 


Pp.  4.     Normal   relation   between   investment,   earnings,   operation   expenses,   and 
perpetuation  expenses. 

EsTcouRT.  R.     The  value  of  railroad  stock.     Annalist,  Apr.  24,  1922.     Pp.  2. 

Ferhin,  a.  W.  The  government-owned  railroads  of  Australia  and  the  operating 
results  shown  by  them.    Econ.  World,  Apr.  22,  1922.     Pp.  2. 

FiNNiGAN,  G.  P.  Is  train  control  more  desirable  than  signals?  Ry.  Rev.,  Apr.  29, 
1922.     Pp.  4.     An  argument  for  automatic  train  control. 

Foss,  C.  W.  Mexican  railways  prepared  for  improved  business.  Ry.  Age,  May  6,  13, 
1922.     Pp.  5,  3. 

Hale,  R.  L.  Rate  making  and  the  revision  of  the  property  concept.  Columbia 
Law  Rev.,  Mar.,  1922.     Pp.  8. 

Heisebman,  C.  B.  Labor  policies  of  the  Transportation  act  from  the  point  of  view 
of  railway  management.     Proc.  Acad.  Pol.  Sci.,  July,  1922.     Pp.   10. 

Hikes,  W.  D.     The  new  basis  of  rate  making.     Proc.  Acad.  Pol.  Sci.,  July,  1922. 

Pp.  8. 
Hook,  C.   R.     The   transportation  cost   in  a  basic  industry — steel  products.     Proc. 

Acad.  Pol.  Sci.,  July,  1922.     Pp.  4. 

Hopkins,  H.  C.     Natal  raihoays.     So.  African  Rys.  &  Harbours   Mag.,  May,  1922. 

Pp.  6.     Historical  sketch. 
Hoy,  W.  W.     Railway  electrification  in  South  Africa.     So.  African  Rys.  &  Harbours 

Mag.,  May,  1922.     Pp.  6.     With  map  and  tables. 

HuNGERFORD,  E.  A  casc  for  the  steam  locomotive.  Sat.  Eve.  Post,  Mar.  25,  1922. 
Pp.  5.     Steam  and  electric  motive  power  compared. 

Hunt,  H.  T.  Railroad  policies  of  the  Transportation  act  from  the  standpoint  of 
the  public  group.     Proc.  Acad.  Pol.  Sci.,  July,  1922.     Pp.  11. 

HuTCHiNS,  F.  L.  Are  the  railroads  over-equipped?  Annalist,  May  15,  1922.  Pp.  2. 
By  charts  and  statistics  the  question  is  answered  in  aflarmative. 

Jackman,  W.  T.  The  critical  position  of  the  Canadian  railways.  Queen's  Quart., 
Jan.-Mar.,  1922.  Pp.  20.  Increased  costs  and  deficits  of  Canadian  lines  other 
than  Canadian  Pacific. 

Johnson,  T.  R.  Railway  problems  in  Australia  and  China.  Journ.  of  Inst.  Trans- 
port (London),  May,  1922.     Pp.  9. 

Kenyon,  T.  a.  Railway  statistics  in  Oreat  Britain.  L.  &  N.  W.  Ry.  Gaz.,  Mar., 
Apr.,  1922.     Pp.  4,  4. 

Knaijss,  R.  Die  Neuordnung  des  franzosischen  Eisenbahnwesens.  Archiv  f.  Eisen- 
bahnw.,  May-June,  1922.  Pp.  51.  Historical  sketch  of  French  railway  legisla- 
tion down  to  the  new  law  of  1921. 

KoLLER,  P.  Trois  annees  d'existence  des  chemins  de  fer  tcMcoslovaques.  Rev. 
Gen.  des  Chemins  de  Fer,  Apr.,  1922.     Pp.  15.     With  map  and  statistics. 

McLean,  S.  J.  The  Railway  Commission  and  nature  of  its  work.  Proc.  Canadian 
Ry.  Club,  Apr.,  1922.  Pp.  16.  History  and  work  of  the  Canadian  Railway  Com- 
mission. 

Markham,  C.  H.  What  small  customers  can  do  for  a  business.  System,  June,  1922. 
Pp.  5.     The  relation  of  railways  to  their  customers — shippers  and  travelers. 

Morrow,  J.  D.  A.  The  transportation  factor  in  the  price  of  coal.  Proc.  Acad.  Pol. 
Sci.,  July,  1922.     Pp.  12. 

DE  NounoN,  G.  Les  comptes  des  chemins  de  fer  de  I'Etat  en  1920.  Journ.  des 
Econ.,  Apr.  15,  1922.     Pp.  6.     Operating  deficit  of  477  million  francs  in  1920. 


542  Periodicals  [September 

Les  grandes  compagnics  de  chemins  de  fer  en  1921.     Journ.  des  Econ., 


May   15,   1922.     Pp.   29.     Operation   of   the   new   law   of   1921,   and   effect   on   the 

several  companies. 
Pahmelee,  J.  H.     The  present  railroad  situation  under  the  Transportation  act  of 

1920.     Administration,    July,    1922.     Pp.    8.     Summary    of    railway    results    since 

March  1,  1920. 
Payen,  E.     Les  grandes  compagnies  de  chemins  de  fer  en  1921.     L'Econ.  Fran^., 

May  27,  1922.     Pp.  3.     The  five  large  private  French  railway  companies  all  showed 

increased  revenues  in  1921  over  1920. 

.     Les  grandes   compagnies   de   chemins   de  fer   en  1921.     Les   depenses. 


L'Econ.  Fran?.,  June  3,  1922.     Pp.  3. 
Peschaud,   M.     Le    nouveau    regime    des    chemins    de    fer   de    la    Orande-Bretagne. 

Rev.  Gen.  des  Chemins  de  Fer,  Jan.,  1922.     Pp.  4.     Summary  of  British  Railways 

act,  1921. 
.     Le  r6seau  ferr6  Marocain.     Rev.  Gen.  des  Chemins  de  Fer,  Mar.,  1922. 

Pp.  11.     With  map  and  statistical  tables. 

Les  resultats  de  V exploitation  des  cinq  Grandes  Compagnies  de  Chemins 


de  fer  en  1021.     Rev.  Gen.  des  Chemins  de  Fer,  July,  1922.     Pp.  16. 

Results  of  operation  of  French   railways  in  1921.     Ry.   Age,  July   1, 


1922.     Pp.    5.     Improvement    over    1920,    but    total    deficit    in    1921    was    about 
$260,000,000,  computed  on  basis  of  current  rates  of  exchange. 

La  situation  des  chemins  de  fer  italiens.     Rev.  Gen.  des  Chemins   de 


Fer,  Apr.  1922,  Pp.  4. 

PosTLETHWArrE,  J.  R.  Regional  offices  for  the  1.  C.  C.  Ry.  Rev.,  June  10,  1922. 
Pp.  3.  Suggestions  based  in  part  on  report  of  Joint  Congressional  Commission  of 
Agricultural  Inquiry. 

PaiNGLE,  J.  W.     "Safety"  in  railway  operation.     Ry.  Gaz.   (London),  May  26,  1922. 

Pp.  3. 
QuiCKj  H.     Solution  of  the  railroad  problem.     Sat.  Eve.  Post,  Mar.  11,  1922.     Pp.  6. 

The  advantages  of  electrification  of  railway  motive  power. 

RicHBEHO,  D.  R.  A  perm,anent  basis  for  rate  regulation.  Yale  Law  Journ.,  Jan., 
1922.     Pp.  20. 

Seaoer,  H.  R.  Railroad  labor  and  the  labor  problem.  Proc.  Acad.  Pol.  Sci.,  July, 
1922.     Pp.  4. 

Stolbero,  B.  Labor  and  the  rail  labor  board.  New  Repub.,  July  5,  1922. 
Pp.  3.  Summary  of  railway  labor  legislation,  with  critical  analysis  of  latest  wage 
decisions  of  Railroad  Labor  Board. 

Van  Metre,  T.  W.  Railroad  regulation  under  the  Transportation  act.  Proc.  Acad. 
Pol.  Sci.,  July,  1922.     Pp.  10. 

Wallace,  H.  C.  The  farmers  and  the  railroads.  Proc.  Acad.  Pol.  Sci.,  July,  1922. 
Pp.  14. 

Wang,  C.  Administration  of  Chinese  Oovernment  Railways.  Ry.  Rev.,  April  29, 
1922.     Pp.  6. 

WiLLARD,  D.     Transportation  act  of  1920.     Proc.  Acad.  Pol.  Sci.,  July,  1922.     Pp.  10. 

British  railways  in  1921.  Ry.  Gaz.  (London),  June  16,  30,  1922.  Pp.  3,  4.  The  new 
act,  railway  grouping,  operating  returns. 

The  Brotherhood.  R.  R.  Trainman,  May,  1922.  Pp.  3.  Historical  sketch  of  Brother- 
hood of  Railroad  Trainmen. 

Canadian  railway  operation  in  1921.     Ry.  Rev.,  Apr.  1,  1922.     Pp.  2. 

The  effect  of  traffic  fluctuations  on  operating  expenses.  Ry.  Age,  July  1,  1922. 
Pp.  2.     The  relationship  between  traffic  and  war-hours. 


1922]  Skipping  543 

Historical  sketch  of  the  Brotherhood  of  Locomotive  Firemen  and  Enginemen. 
B.  of  L.  F.  &  E.  Mag.,  May  1,  1922.     Pp.  21. 

International  Railway  Congress  at  Rome.     Ry.  Gaz.  (London),  Apr.  28,  1922.  Pp.  5. 

Railroad  gross  and  net  earnings  for  the  calendar  year.  Com.  &  Finan.  Chron.,  June 
17,  1922.     Pp.  7.     Summary  of  the  railway  year  1921. 

Relations  of  transportation  to  agriculture.  Ry.  Age,  July  1.5,  1922.  Pp.  6.  Digest 
of  report  on  transportation  of  Joint  Commission  of  Agricultural  Inquiry. 

Die  sachsischen  Staatseisenbahnen  in  den  Jahren  1918  und  1919.  Archiv  f.  Eisen- 
bahnw.,  May-June,  1922.     Pp.  12. 

Statistique  des  chemins  de  fer  allemands  pour  Vexercice  1919-20.  Rev.  Gen.  des 
Chemins  de  Fer,  Mar.,  1922.     Pp.  2. 

Die  vereinigten  preussischen  und  hessischen  Staatseisenbahnen  im  Rechnungsjahr 
1919.     Archiv  f.  Eisenbahnw.,  May-June,  1922.     Pp.  25. 

Shipping 

(Abstracts  by  E.  S.  Gregg) 

Abell,  W.  Merchant  navies  of  today  suffer  great  alterations.  Journ.  Commerce 
(N.  Y.),  World  Reconstruction  supp.  2,  sec.  2,  May  27,  1922.  An  analysis  of 
world  tonnage  figures  by  the  chief  surveyor  of  Lloyd's  Register  of  Shipping. 

AcKEESox,  J.  L.  Prospects  of  American  shipbuilding.  Pacific  Marine  Rev.,  July, 
1922.  Pp.  2.  "Fair  but  not  alluring"  is  the  conclusion  of  the  vice-president  of 
the  Merchant  Shipbuilding  Corporation. 

BoGEET,  J.  T.  The  fundamental  need  of  America's  merchant  marine.  Pacific  Ma- 
rine Rev.,  June,  1922.     Pp.  2.     The  problem  of  interesting  the  trader  in  shipping. 

BoTJissox,  F.  France's  chief  maritime  interest  in  Mediterranean.  Journ.  Com- 
merce (N.  Y.),  World  Reconstruction  supp.  2,  sec.  2,  May  27,  1922. 

Caldee,  W.  M.  St.  Lawrence  canal  a  masquerader.  Journ.  Commerce  (X.  Y.), 
World  Reconstruction  supp.  2,  sec.  2,  May  27,  1922. 

Chambeelaix,  E.  T.  French  colonial  ocean  mail  subsidy.  Commerce  Reports,  May 
8,  1922.  Pp.  3.  The  detailed  terms  of  the  new  subsidy  policy  of  the  French 
government  with  reference  to  the  services  of  the  Messageries  Maritimes. 

.     Vessels  in  American  overseas  trade  in  1D20.     Commerce  Reports,  Apr. 

17,  1922.  Pp.  3.  An  excellent  and  detailed  analysis  of  the  number,  excluding 
duplications,  and  the  type  of  vessels  trading  with  the  United  States  in  the  peak 
year  1920. 

Clapp,  E.  J.  An  American  merchant  marine.  New  Repub.,  Mar.  1.5,  1922.  Pp.  4. 
The  lack  of  logical  ocean  rate  structures  as  a  deterrent  to  shipping  and  trade. 
See  also,  for  same  view  expanded  in  a  different  way,  Commerce  Reports,  May  1, 
1922,  p.  302,  and  July  3,  1922,  p.  44. 

CuNo.  Hard  to  judge  prospects  of  German  merchant  marine.  Journ.  Commerce 
(X.  Y.),  World  Reconstruction  supp.  2,  sec.  2,  May  27,  1922. 

DoLLAB,  R.  Shipping  still  in  depressed  state.  Journ.  Commerce  (X.  Y.),  World 
Reconstruction  supp.  2,  sec.  2,  May  27,  1922. 

Edmoxds,  G.  W.  Revised  ship  subsidy  bill  analyzed.  Marine  Engg.,  July,  1922. 
Pp.  2.  Explanations  by  the  main  sponsor  of  the  proposed  subsidy  bill  in  the 
House  of  Representatives.  The  complete  text  of  the  revised  bill  is  given  on  pages 
415-419. 

Fahley,  E.  p.  United  States  only  nation  mith  public  fleet.  Journ.  Commerce 
(X.  Y.),  World  Reconstruction  supp.  2,  sec.  2,  May  27,  1922. 


544  Periodicals  [September 

Gow,  C.  and  Merrill,  H.  F.  The  Great  Lakes-St.  Lawrence  tidewater  project. 
Current  Affairs,  Apr.  3,  1922.  Pp.  7.  The  former  presents  a  case  in  favor  of  the 
project,  the  latter  against  it. 

Gbegg,  E.  S.  a  case  against  discriminating  diUies.  Journ.  Pol.  Econ.,  June,  1922. 
Pp.  8. 

.     How   ships   help   to    build   trade.     Journ.   Commerce    (N.    Y.),   World 

Reconstruction  supp.  2,  sec.  2,  May  27,  1922. 

Heile,  G.  Black  Sea  shipping  faces  great  post-war  obstacles.  Journ.  Commerce 
(N.  Y.),  World  Reconstruction  supp.  2,  sec.  2,  May  27,  1922. 

HtTLDEEMANN,  VON  B.  Skipping  and  commerce  increase  in  Baltic  waters.  Journ. 
Commerce  (N.  Y.),  World  Reconstruction  supp.  2.,      sec.  2,  May  27,  1922. 

Is-serlis,  L.  Shipping  statistics  show  farreaching  changes.  Journ.  Commerce 
(N.  Y.),  World  Reconstruction  supp.  2.,  sec.  2,  May  27,  1922.  An  analysis  of 
pre-war  and  post-war  tonnage  statistics  by  type  and  speed. 

McKiNLEY,  W.  B.  Middle  West  needs  sea  outlet.  Journ.  Commerce  (N.  Y.),  World 
Reconstruction  supp.  2,  sec.  2,  May  27,  1922. 

Marvin,  W.  L.  American  farmers  and  American  ships.  Marine  Engg.,  July,  1922. 
Pp.  3.  Reasons  why  the  farmers  should  support  the  proposed  slup  subsidy,  by 
the  vice-president  of  the  American  Steamship  Owners  Association. 

.     The  aim  of  our   merchant  marine.     Protectionist,  Apr.,   1922.     Pp.   6. 


Money,  Sir  Leo  Chiozza.  London:  World's  greatest  shipping  center  today.  Journ. 
Commerce (N.  Y.),  World  Reconstruction  supp.  2,  sec.  2,  May  27,  1922. 

Parsons,  H.  The  St.  Lawrence  ship  canal  needs  further  study.  Greater  New  York, 
Apr.  10,  1922.     Pp.  7. 

RiGGS,  S.  G.  Ship  subsidy  needless  and  costly.  N.  Y.  Evening  Post,  June  14,  1922. 
Pp.  6.  A  discussion  of  the  tliree  main  lines  of  argument  advanced  in  support 
of  the  ship  subsidy  are:  (1)  Since  the  5-5-3  naval  agreement  the  value  of  a 
merchant  marine  as  an  auxiliary  in  time  of  war  is  greatly  enhanced.  (2)  The 
time  has  now  come  when  the  United  States  must  have  a  merchant  marine  to  pro- 
tect its  domestic  industries.  (3)  The  only  way  to  get  the  government  out  of 
shipping  is  to  pay  someone  to  take  the  ships. 

New  merchant  marine   bill  for  old.     Annalist,  Apr.   17,   1922.     Pp.  2. 


A  detailed  analysis  of  the  proposed  subsidy  bill  with  the  conclusion  that  it  is 
"a  conglomeration  of  all  conceivable  direct  and  indirect  forms  of  aid  not  pre- 
viously provided  for  with  bait  held  out  on  all  sides  to  attract  support." 

Robertson,  D.  H.  Shipping  and  shipbuilding  suffer  world-wide  slump.  Journ. 
Commerce  (N.  Y.),  World  Reconstruction  supp.  2,  sec.  2,  May  27,  1922. 

SissoN,  F.  H.     American  shipping  problems.     Shipping,  Mar.  10,  1922.     Pp.  2. 

Large  import  traffic  carried  by  Mississippi  River  barge  lines.  Commerce  Reports, 
June  12,  1922.  Tliis  article  brings  to  date  an  earlier  and  more  comprehensive  one 
on  the  same  subject.     See  Commerce  Reports,  Nov.  28,  1921,  p.  782. 

New  York  state  barge  canal  as  an  aid  to  foreign  trade.  Commerce  Reports,  June  19, 
1922.  Pp.  2.  A  statement  of  the  kind  and  quantity  of  traffic  on  this  important 
inland  waterway. 

Ocean  freight  rates  from.  United  States  and  European  ports.  Commerce  Reports, 
June  19,  1922.  A  comparison  of  ocean  freight  rates  on  many  of  the  principal 
articles  entering  foreign  trade  from  United  States  and  European  ports  to  the 
main  competitive  markets  of  the  world. 


1922]  Commerce  545 

Commerce 

(Abstracts  by  Harry  R.  Tosdal) 

Clapp,  E.  J.  Foreign  trading  zones  in  our  seaports.  Am.  Econ.  Rev.,  June,  1922. 
Pp.  10. 

Gbeame,  p.  L.  Empire  trade  development.  United  Empire,  Apr.,  1922.  Pp.  8. 
Traces  development  of  British  imperial  trade  from  1800-191.3. 

HoLLiDAY,  W.  T.  The  Federal  Trade  Commission.  Am.  Bar  Assoc.  Journ.,  May, 
1922.  Pp.  6.  "Jurisdiction  and  powers  of  body  as  set  forth  in  act  creating  it, 
orders  issued,  and  decisions  of  courts  on  various  provisions  of  Clayton  and  Trade 
Commission  acts." 

Klute,  F.  Neue  Verkehrswege  in  Afrika.  Weltwirtsch.  Archiv,  Apr.,  1922.  Pp.  18. 
Describes  recent  developments  of  railway  routes  and  systems  in  Africa. 

Maixi,  a.  Organizaciun  internacional  del  comercio  (conclusion).  Rev.  de  Econ. 
Argentina,  Feb.,  1922.  Pp.  11.  Concludes  description  of  the  participation  of 
Argentina  in  the  International  Congresses. 

Patterson,  A.  M.  The  reparation  dyestuffs  situation.  Bull.  Nat.  Assoc.  Wool 
Mfrs.,  Apr.  1922.  Pp.  17.  Gives  articles  of  Treaty  of  Versailles  affecting  dye- 
stuffs,  traces  steps  taken  by  the  Textile  Alliance  to  import  dyes  under  the  "Herty 
Option,"  and  describes  dye  cartel  in  Germany. 

Spencee,  W.  H.  Recent  cases  on  price  maintenance.  Journ.  Pol.  Econ.,  Apr., 
1922.  Pp.  12.  Discusses  problem  of  "how  far  a  trader  may  in  the  exercise  of  his 
'undoubted  right'  to  choose  his  own  customers  legally  control  the  resale  price 
of  his  goods,"  as  illustrated  in  recent  Colgate  and  Beechnut  cases. 

Walsh,  J.  Is  price  cutting  a  crime?  National  Bus.,  Apr.,  1922.  P.  1.  Discusses 
legal  status  of  various  forms  of  price  cutting. 

Williams,  J.  H.  German  foreign  trade  and  the  reparation  payments.  Quart. 
Journ.  Econ.,  May,  1922.  Pp.  22.  Describes  reasons  for  Germany's  economic 
paradox;  says,  "the  causal  sequence  appears  to  have  run  as  follows:  reparation 
payments,  depreciating  exchange,  rising  export  and  import  prices,  rising  internal 
prices,  budgetary  deficits  and  increased  private  demand  for  credit,  increased  note 
issue." 

Important  recent  developments  in  Polish-Russian  trade.  Econ.  World,  Apr.  15,  1922. 
Pp.  2.  Reprint  from  Poland,  April,  1922.  Summarizes  recent  information  re- 
garding rapid  increase  of  trade  between  Poland  and  Russia. 

Public  Utilities 

(Abstracts  by  Charles  S.  Morgan) 

Banksox,  E.  E.  Water  rates  for  industrial  consumers.  Journ.  Am.  Water  Works 
Assoc,  May,  1922.  Pp.  6.  Water  rates  for  large  industrial  consumers  may 
be  fixed  at  a  point  below  the  total  cost  of  the  service,  if  by  so  doing  the  remaining 
consumers  can  obtain  water  at  lower  rates  than  otherwise. 

Bauer,  J.  Deadlock  in  public  utility  regulation.  VI,  Municipal  action  to  break  the 
deadlock.  Nat.  Munic.  Rev.,  May,  1922.  Pp.  4.  Cities  cannot  rely  on  state  commis- 
sions to  initiate  policies  looking  to  the  advancement  of  the  interests  of  the  cities. 
To  press  their  cases  most  effectively  the  cities  should  cooperate  in  obtaining  the 
necessary  information  and  in  formulating  policies. 

Burgess,  K.  F.  Compulsory  construction  of  new  lines  of  railroad.  Mich.  Law 
Rev.,  May,  1922.  Pp.  16.  Constitutionality  and  practical  wisdom  of  this  feature 
of  Transportation  act  of  1920  questioned.  The  monopolistic  franchises  of  local 
public  utilities,  on  the  other  hand,  require  that  they  "furnish  adequate  service 
within  the  territorial  limits  of  their  monopoly." 


546  Periodicals  [September 

Burke,  W.  F.  The  street  raihvay  situation  from  the  business  man's  viewpoint. 
Stone  &  Webster  Journ.,  Apr.,  1922.  Pp.  23.  An  interesting  account,  along 
familiar  lines. 

Cooke,  M.  L.  Ontario  Hydro-electric.  New  Repiib.,  June  21,  1922.  Pp.  3.  Criti- 
cism of  recent  unfavorable  report  of  National  Electric  Light  Association  on  On- 
tario Hydro-electric  Power  Commission. 

Criddle,  E.  B.  How  much  should  consumers  be  charged  for  electric  service?  Journ. 
of  Electricity,  May  15,  1922.  Pp.  5.  Questions  and  answers  on  various  aspects 
of  rate  making,  prepared  for  presentation  to  Pacific  Coast  Electrical  Association. 

Fischer,  A.  Michigan's  experiences  demonstrate  folly  of  competition  in  street  rail- 
way business.  Public  Service  Mag.,  June,  1922.  Pp.  3.  Experiences  of  several 
Michigan  cities  in  establishing  the  proper  function  of  the  bus. 

Gray,  H.  L.  The  proper  charges  for  fire  protection.  Engg.  &  Contrg.,  Feb.  8, 
1922.     Pp.  3. 

GuiFF.uiT,  M.  Tramway  conditions  in  France.  Elec.  Ry.  Journ.,  May  6,  1922.  P.  1. 
Straitened  circumstances  of  French  tramways  have  led  to  a  considerable  degree  of 
subsidization. 

Haxe,  R.  L.  Rate  making  and  the  revision  of  the  property  concept.  Col.  Law 
Rev.,  March,  1922.  Pp.  8.  In  rate  regulation  "we  are  experimenting  with  a  legal 
curb  on  the  power  of  property  owners.  In  applying  that  curb,  we  have  to  work 
out  principles  or  working  rules — in  short  a  new  body  of  law." 

Hazen,   a.     Water   rates.     Journ.    Am.    Water    Works    Assoc,    May,    1922.     P.    1. 

Suggests  a  three-part  water  rate:  service  cost,  cost  of  water,  and  cost  of  distribu- 
tion. 
Heilman,  R.     Valuation  of  public  utilities.     Aera,  July,   1922.     Pp.   9.     One   of   a 

series  of  articles,  intended  for  electric   railway   employees,   dealing   with   various 

aspects  of  utility   regulation  and  operation. 
Johannsen,  F.     Drift  af  offentlige  Virksomheder.     Nat.  iik.  Tids.,  no.  1,  1922.     Pp. 

26.     In   the   management   of   state   enterprises   honest   business   methods   must   be 

followed  and  not  ordinary  political  methods. 
Johnson,  G.  A.     The  business  of  water-works  management.     Am.  City,  May,  June, 

1922.     Pp.  3,  3.     Brief  treatment  of  water  rates. 
McBride,  R.  S.     Important  trends  in  gas  industry.     Gas  Age-Record,  June  10,  1922. 

Pp.  3.     Statistics  for  1920,  showing  magnitude  and  scope  of  gas  industry. 

P.  A.  M.  The  constitutionality  of  emergency  legislation  under  the  police  power. 
Pa.  Law  Rev.,  Nov.,  1921.  Pp.  3.  The  United  States  Supreme  Court,  in  Block  v. 
Hirsh,  1921,  has  held  that  legislation  resulting  in  the  regulation  of  private  property 
"affected  with  a  jjubllc  interest"  (in  the  instant  case,  rented  real  estate)  may  be 
constitutional  when  enacted  for  an  emergency  only. 

Mees,  C.  a.  Economics  of  water-power  development.  Mech.  Engg.,  Julj',  1922. 
Pp.  4.  An  Illuminating  consideration,  by  an  engineer,  of  factors  involved  in  the 
production  and  sale  of  water  power,  including  effects  of  regulation. 

Mi.RPHY,  E.  J.  Operating  conditions  improving.  Aera,  May,  1922.  Pp.  7.  Net 
Income  of  180  companies,  representing  apjjroxiniately  one-half  of  the  earning 
power  of  the  electric  railway  industry,  increased  IHG  per  cent  in  1921  over  1920 
and  operating  ratio  declined  1.1  per  cent.  Average  rate  of  fare  increased  from 
6.7  cents  to  7.3  cents  or  9  per  cent. 

W.  H.  N.  .Jurisdiction  of  public  service  commissions  over  inter-utility  contracts. 
Pa.  Law  Rev.,  Nov.,  1921.  Pp.  3.  Jurisdiction  over  such  contracts  depends  on 
whether  or  not  it  is  held  that  the  public  interest  is  adversely  aifected  by  them. 

Pahso.v.  F.  W.  You  and  the  public  utilities.  World's  Work,  May,  1922.  Pp.  8. 
The  magnitude  and  Importance  of  public  utilities  entitle  them  to  a  real  public 
appreciation  of  their  problems  and  needs. 


1922]  Accounting  54i7 

Reed,  D.  A.  How  a  municipal  plant  kept  dozen  the  cost  of  gas  and  water.  Ameri- 
can City,  Apr.,  1922.     Pp.  3. 

RiCHBERG,  D.  R.  A  permanent  basis  for  rate  regulation.  Yale  Law  Journ.,  Jan. 
1922.  Pp.  20.  Valuation  can  be  only  a  reflection  of  earning  power.  The  essen- 
tial consideration  in  utility  regulation  is  the  value  of  the  service.  This  in  turn  is 
to  be  measured  by  the  cost  of  producing  the  service.  The  latter  furnishes  a  definite 
basis  of  rate  regulation,  inasmuch  as  it  consists  simply  of  operating  costs  plus  the 
prevailing  return  on  the  capital  necessarily  invested. 

Rogers,  S.  A  new  golden  age  in  Philadelphia.  Outlook,  Apr.  12,  1922.  Pp.  3. 
Interesting  account  of  success  of  Mitten  administration  of  Philadelphia  street 
railways,  particularly  in  securing  maximum  cooperation  of  employees. 

Sibley,  R.  California  should  profit  by  experience  of  Ontario.  Journ.  of  Electri- 
city, Mar.  15,  Apr.  1,  1.5,  1922.  Pp.  5,  .3,  3.  Comparison  of  results  achieved  by 
Ontario  Hydro-electric  Power  Commission  and  those  achieved  by  private  enter- 
prise in  California  in  last  twenty  years  held  to  be  unfavorable  to  former. 

SiMPSox,  J.  Recent  cases  on  rates  and  return.  Gas  Age-Record,  Apr.  22,  1922. 
Pp.  3.     Digest  of  recent  cases. 

Sijipsox,  N.  W.  Missouri  utility  commissioner  praises  state  regulation  of  public 
service  corporations.  Pub.  Service  Mag.,  July,  1922.  Pp.  2.  State  regulation 
should  be  put  on  a  firmer  constitutional  basis.  Prudent  investment  basis  of  valua- 
tion upheld. 

DEL  Valle,  C.  MunicipaUzacion  de  servicios  publicos.  Revista  de  Ciencias  Ec6no- 
micas,  Feb.,  1922.  Pp.  19.  Description  of  municipal  functions,  including  those 
commonly  performed  by  public  utilities  in  this  country,  and  discussion  of  prin- 
ciples guiding  the  exercise  of  them. 

All  Detroit  lines  now  municipally  owned.     Elec.  Ry.  Journ.,  May  20,  1922.     Pp.  3. 

Commission  rebukes  political  interference.  Pub.  Service  Mag.,  May,  1922.  P.  1. 
California  Railroad  Commission  shows  that  successful  regulation  requires  abso- 
lute fairness  to  utility  as  well  as  to  the  public. 

Peustel  Philadelphia  valuation  presents  valuable  analytical  and  cost  data.  Elec. 
Ry.  Journ.,  June  13,  1922.  Pp.  4.  City  expert  favors  historical  investment  as 
against  reproduction  cost.     Valuation  and  historical  data  presented. 

Lower  court  is  upheld  in  Galveston  fare  case.  Elec.  Ry.  Journ.,  Apr.  29,  1922. 
Pp.  4.  Text  of  recent  decision  of  United  States  Supreme  Court,  in  which  several 
important  developments  in  utility  regulation  were  made,  particularly  with  refer- 
ence to  allowance  for  going-concern  value. 

Measuring  the  service  in  Memphis.  Elec.  Ry.  Journ.,  May  13,  1922.  Pp.  4.  De- 
scription of  operation  of  Memphis  service-at-cost  franchise,  particularly  its 
prescription  of  service  standards. 

Suggestion  that  taxpayers  share  cost  of  improvements.  Elec.  Ry.  Journ.,  May  27, 
1922.     Pp.  2.) 

Zone  passes  for  Beaver  Valley.  Elec.  Ry.  Journ.,  Apr.  22,  1922.  Pp.  3.  Descrip- 
tion of  use  of  weekly  passes  in  connection  with  a  zone  system  of  fares. 

Accounting 

(Abstracts   by   Martin  J.   Shugrue) 

Bell,  W.  H.  Depreciation  and  retirement  of  property.  Journ.  Account.,  Apr., 
1922.  Pp.  6.  The  proper  accounting  entries  to  make  when  a  machine  or  other 
fixed  asset  is  retired  from  use. 

Comet  R.  H.  Why  I  consider  costs  basic  in  shaping  my  policies.  Factory, 
Apr.',  1922.     Pp.  3.     Costs  are  at  the  root  of  practically  all  sound  business  policies. 


548  Periodicals  [September 

EsTCouHT,  R.  Income  in  the  United  States.  Annalist,  May  8,  1922.  Pp.  2.  Dis- 
cusses work  of  the  National  Bureau  of  Economic  Research  on  the  problem  of  the 
amount  and  distribution  of  income  in  the  United  States. 

Haugh,  L.  C.  Inventories  and  their  valuation  for  income  tax  purposes.  Adminis- 
tration, June,  1922.  Pp.  5.  Practical  discussion  of  questions  and  problems  in- 
volved in  inventory  appraisals  for  tax  purposes. 

HuRLET,  R.  E.  A  budget  plan  which  controls  costs.  Factory,  Apr.,  1922.  Pp.  2. 
Believes  the  budget  system  with  necessary  changes  can  be  applied  to  any  plant. 
Describes  an  actual  system. 

Jackson,  J.  H,  Treatment  of  redemption  funds.  Journ.  of  Account.,  June,  1922. 
Pp.  14.  How  to  handle  accounts  for  funds  created  to  redeem  debts  and  callable 
stocks  or  to  provide  for  depreciation. 

Levin,  S.  B.  Simplified  manufacturing  accounts.  Administration,  Feb.,  1922.  Pp. 
17.  Primarily  for  the  so-called  small  manufacturer  whose  business  does  not 
warrant  an  augmented  oflSce  force  or  system  involving  minute  detail.  Illustrated 
with  many  forms. 

Lowe,  H.  I.  Method  of  procedure  in  export  accounting.  Pace  Student,  May, 
1922.     Pp.  4.     Description  of  an  accounting  system  for  an  export  house. 

Manning,  A.  B.  Fixed  property  accounting.  Administration,  Apr.,  1922.  Pp.  8. 
Concerned  with  the  rates  and  method  as  well  as  the  kinds  of  depreciation.  Con- 
tains a  schedule  of  normal  depreciation  rates  for  various  items  of  property. 

MoLER,  A.  L.  The  accountant's  report.  Administration,  Feb.,  1922.  Pp.  11.  What 
the  accountant's  report  should  show  the  banker. 

NoLE,  O.  Accounting  procedures  for  steamship  companies.  Pace  Student,  Apr., 
1922.     Pp.  2. 

O'Hara,  J.  L.  Industrial  depression  and  cost  manipulation.  Administration,  May, 
1922.  Pp.  14.  Many  recent  proposals  to  modify  arbitrarily  cost  figures  are 
unsound  and  are  made  simply  for  the  purpose  of  bringing  costs  into  alignment 
with  market  prices. 

Perkins,    L.     Plant    accounts    in    invested    capital.     Journ.    Account.,    May,    1922. 

Pp.  7.     Problems  involved  in  computing  invested  capital  for  purposes  of  federal 

taxes. 
Piper,  A.  A.     Accounts  of  cotton  hosiery   manufacturers.     Journ.   Account.,   May, 

1922.     Pp.  6. 
PoLAKOv,  W.  N.     Distributing  overhead  to  alloxv  lower  sales  prices.     Factory,  Apr., 

1922.     Pp.  3.     Some  concrete  examples  of  how  to  figure  overhead  in  determining 

sales  price. 

Roberts,  C.  C.  Planning  an  audit  of  an  industrial.  Journ.  Account.,  Apr.,  1922. 
Pp.  12.     Outline  of  procedure  to  be  followed. 

Saliers,  E.  a.  Production  method  of  charging  depreciation.  Administration,  May, 
1922.  Pp.  4.  Advocates  varying  depreciation  rates  for  different  quantities  of 
production  but  points  out  that  depreciation  can  safely  be  diminished  only  within 
rather  narrow  limits. 

Suffern,  E.  L.  Municipal  accounting  in  New  Jersey.  Journ.  Account.,  May,  1922. 
Pp.  9.  New  Jersey  is  trying  to  establish  a  system  of  uniform  accounting  for  all 
municipalities.     Results  of  last  five  years'  work  set  forth. 

SwARTHOUT,  A.  V.  and  Bexell,  J.  A.  A  system  of  accounting  for  cotton  gin- 
neries.    U.  S.  Dept.  Agr.  Bui.  985  (1921).     Pp.  42. 

Trisko,  F.  B.  Cost  systems  for  road  building.  Administration,  June,  1922.  Pp.  6. 
How  properly  to  classify  and  record  costs  on  highway  construction. 


1922]  Business  Management  549 

WiEGAND,  W.  B.  Fire  insurance  company  accounting.  Administration,  June,  1922. 
Pp.  10.  Illustrated  with  statement  forms  and  samples  of  books  of  record.  Diffi- 
culties in  obtaining  uniform  system. 

Williams,  J.  H.  A  technique  for  the  chief  executive.  Bull.  Taylor  Soc,  Apr.,  1922. 
Pp.  22.  A  definite  responsibility — a  definite  procedure — a  definite  measure  of  re- 
sults. Deals  with  budgets,  forecasts,  quotas,  and  unit  costs.  Concretely  illus- 
trated. 

Some  hank  credit  problems.  Bankers  Mag.,  May,  1922.  Pp.  3.  Questions  and 
answers  dealing  with  meaning  of  working  capital,  and  method  of  handling  in  the 
credit  statement  quick  assets  which  have  been  pledged. 

What  the  banker  expects  from  the  accountant.  Bankers  Mag.,  Apr.,  1922.  Pp.  8. 
Sets  forth  very  concretely  why  many  audited  statements  are  inadequate  or  mis- 
leading and  fail  to  serve  the  banker  who  wants  his  facts  straight. 

Business  Management 

Babtlett,  M.  B.  a  workable  organization  plnn  for  the  small  plant  manager. 
Factory,  June,  1922. 

Bennett,  G.  E.     The  budget.     Construction  Accounting,  1920.     Pp.  17. 

Frazer,  G.  E.     Budget  control.     Bull.  Taylor  Soc,  June,  1922. 

GiLBRETH,  F.  B.  and  L.  M.     Super  standards.     Bull.  Taylor  Soc,  June,  1922. 

Goodwin,   J.   P.     Gross   profits   as   a   basis   of   sales   commissions.     Administration, 

June,  1922. 
HoLCOMBE,  J.  M.,  Jr.     A  case  of  sales  research.     Bull.  Taylor  Soc,  June,  1922. 
Jackson,  W.  M.     Organization  of  the  personnel.     Administration,  June,  1922. 

MiNTY,  L.  Am,erican  methods  of  recruiting,  training  and  promoting  bank  per- 
sonnel.   Journ.  Inst.  Bankers,  May,  1922. 

Wayman,  E.  L.     7he  factory  cure  for  slow  sales.     Factory,  June,  1922. 

Weber,  C.  O.     The  psychology  of  employment.     Administration,  June,  1922. 

Whitten,  H.  J.  Buying  for  a  medium-size  manufacturing  establishment.  Ad- 
ministration, June,  1922. 

A  budget  that  meets  the  test  of  changing  volume.     Factory,  June,  1922. 

Labor  and  Labor  Organizations 

(Abstracts  by  David  A.  McCabe) 

Atkins,  W.  E.  The  personnel  policies  of  the  A.  Nash  Company.  Journ.  Pol. 
Econ.,  Apr.,  1922.  Pp.  17.  A  description  of  and  appraisal  of  the  results  of  the 
labor  policies  of  the  company. 

Bain,  H.  F.  Accident  prevention  by  the  United  States  Bureau  of  Mines.  Intern. 
Rev.,  May,  1922.     Pp.  8.     Author  is  Director  of  the  Bureau. 

Blankenhorn,  H.     After  West  Virginia — Somerset.     Survey,  May  13,  1922.     Pp.  3. 

.     Liberty   and  union  in   the   coal  fields.     Nation,   May   17,   1922.     Pp.   3. 

The  coal  strike  and  attempts  to  defeat  it,  in  Somerset  county,  Pennsylvania. 

Callahan,  D.  F.  Criminal  syndicalism  and  sabotage.  Mo.  Labor  Rev.,  Apr.,  1922. 
Pp.  9.     Recent  American  statutes  and  court  decisions. 

Chen,  Ta.     Shipping  strike  in  Hong  Kong.     Mo.  Labor  Rev.,  May,  1922.     Pp.  7. 

Clark,  E.  Textile  force  vs.  textile  facts.  Nation,  Apr.  19,  1922.  Pp.  2.  Favor- 
able to  the  New  England  textile  strikes. 


11 


550  Periodicals  [September 

Commons,  J.  R.  Tendencies  in  trade  union  development  in  the  United  States. 
Intern.  Lab.  Rev.,  June,  1922.     Pp.  32. 

CoNTNGTON,  M.  BuUdinff  Trades-Unions'  Construction  and  Housing  Council  of 
Boston.     Mo.  Labor  Rev.,  May,  1922.     Pp.  4. 

Derry,  K.,  and  Douglas,  P.  H.  The  minimum  wage  in  Canada.  Journ.  Pol.  Econ., 
Apr.,  1922.     Pp.  34.     Comparative  .study  of  minimum  wage  laws  of  five  provinces. 

Fox,  G.     Coal  miners  their  own  storekeepers.     New  Repub.,  Apr.  19,  1922.     Pp.  2. 

Fret,  J.  P.  A  thirty-year  experience  in  industrial  democracy.  Intern.  Labor 
Rev.,  Apr.,  1922.  Pp.  14.  The  joint  agreement  in  the  stove-molding  trade. 
The  author  is  editor  of  the  union  journal. 

Garfield,  H.  A.     The  public  interest  in  the  coal  strike.     Survey,  May  6,  1922.     Pp.  3. 

Griffith,  S.  Russian  factory  wheels  in  motion.  Survey,  July  1,  1922.  Pp.  5. 
Labor  conditions  and  the  attitude  of  the  workers. 

Hansen,  A.  H.  The  buying  power  of  labor  during  the  war.  Journ.  Am.  Stat. 
Assoc,  March,  1922.     Pp.  11. 

Hewes,  a.  Russian  wage  systems  under  communism.  Journ.  Pol.  Econ.,  Apr., 
1922.     Pp.  5. 

Hooker,  G.  E.  Industrial  war  in  Chicago.  New  Repub.,  June  7,  1922.  Pp.  4. 
L^nfavorable  criticism  of  the  Landis  award  in  the  Chicago  building  trades  and 
comment  on  subsequent  developments. 

Krause,  L.  Reform  of  the  new  German  labor  laxa  since  the  revolution.  Am.  Fed., 
Apr.,  1922.     Pp.  3. 

Lair,  M.  La  rSglementafion  international e  du  travail  en  agriculture.  Rev.  d'Econ. 
Intern.,  Mar.  25,  1922.  Pp.  31.  Reasons  for  French  opposition  to  proposals 
made  at  Geneva  Conference  of  International  Labor  Organization  of  the  League  of 
Nations  for  the  regulation  of  agricultural  labor. 

Liesse,  a.  La  journ/'e  de  huit  heures  et  la  situation  gcnirale.  L'Econ.  Fran^., 
Apr.  15,  1922."  Pp.  3.  The  eight-hour  law  of  April  23,  1919,  has  kept  up  the 
cost  of  living  and  has  hampered  France  in  international  competition. 

.     La  journee  de  huit:  ses  consequences;  modifications  ndcessaires.  L'Econ. 

Fran^.,  Apr.  22,  1922.  Pp.  3.  Favors  an  amendment  allowing  administrative 
authority  to  suspend  the  eight-hour  law  and  a  fixing  of  hours,  after  inquiry,  on  the 
basis  of  effects  on  the  health  of  workers  and  comparison  with  foreign  laws  actually 
enforced. 

Mark,  M.  L.,  and  Croxton,  F.  E.  Unemployment  survey  in  Columbus,  Ohio.  Mo. 
Labor  Rev.,  Apr.,  1922.     Pp.  10. 

Martna,  W.  The  position  of  the  agricultural  laborer  in  Esthonia.  Intern.  Lab. 
Rev.,  May,  1922.     Pp.  8. 

Matiierly,  W.  J.     Costs  of  labor  turnover.     Administration,  Apr.,  1922.     Pp.  5. 

Nary,  E.  R.  Discrimination  in  wage  cuts.  Factory,  May,  1922.  Pp.  4.  How  an 
average  reduction  of  ten  per  cent  was  distributed  among  employees  in  varying 
percentages  according  to  the  relative  merits  of  the  individual  employees. 

Newcomb,  E.  D.  Industrial  welfare  work  in  Great  Britain.  Intern.  Lab.  Rev.,  Apr., 
1922.     Pp.  19. 

Ripley,  W.  Z.  Bones  of  contention.  Survey,  Apr.  29,  1922.  Pp.  5.  Experiences 
of  an  arbitrator. 

.     The  job  at  Babels.     Survey,  July   1,  1922.     Pp.   7.     Instances   of  how 


industrial  relations  are  complicated  by  diverse  racial  factors. 


1922]  Money,  Prices,  Credit,  and  Banking  551 

Sayer,  H.  D.  Women  rcJw  wnrk.  N.  Y.  Dept.  of  Labor  Bull.,  Apr.  1922.  Number, 
occupations,  hours,  trade-union  membership,  and  position  under  workmen's  com- 
pensation law,  with  particular  reference  to  New  York  state. 

Sayre,  F.  B.     The,  Coronado  decision.     Survey,  June  15,  1922.     Pp.  2. 

Searles,  E.  Giving  stahUity  to  the  coal  industry.  Am.  Rev.  Rev.,  June,  1922.  Pp.  4. 
Editor  of  the  United  Mine  Worker's  Journal  advocates  a  permanent  fact-finding 
commission,  without  power  to  fix  wages  or  prices. 

Shaw,  A.  Organized  stitching.  Survey,  April  29,  1922.  Pp.  5.  Joint  adjustment 
in  the  Chicago  clothing  industry. 

Shaw,  S.  A.  Fruit  of  the  loom — the  shift  from  feudalism  to  capitalism,  in  the 
Pawtuxet  Valley.  Survey,  July  1,  1922.  Pp.  8.  Living  and  working  conditions 
in  the  textile  mill  villages  concerned  in  the  strike. 

SorLE,  G.  Can  a  living  wage  he  paid?  New  Repub.,  May  3,  1922.  Pp.  3.  If  it 
cannot,  the  first  consideration  in  industry  should  be  the  production  of  means  of 
life,  not  the  payment  of  return  on  capital. 

Stewart,  E.  Trend  of  employment  in  the  manufacturing  industries  in  the  United 
States,  June,  1914  to  December,  1021.     Mo.  Labor  Rev.,  Mar.,  1922.     Pp.  7. 

ViExiLLE,  M.  Faut-il  reviser  la  lot  de  huit  heures?  Reforme  Soc.  Mar.-Apr.,  1922. 
Pp.  58.  A  paper  in  which  injurious  effects  of  French  eight-hour  law  of  April  23, 
1919,  are  emphasized,  followed  by  discussion. 

Collective  agreements  in  Germany.     Intern.  Lab.  Rev.,  Apr.,  1922.     Pp.  16. 

The  maintenance  of  the  supply  of  agriculttiral  labour  in  England  and  Wales  during 
the  war.     Intern.  Rev.  Agri.  Econ.,  Jan.-Feb.,  1922.     Pp.  22. 

Recent  decisions  of  the  railroad  labor  board.     Mo.  Labor  Rev.,  Apr.,  1922.     Pp.  20. 

Storlockouten  i  Danmark.  Soc.  Medd.,  no.  5,  1922.  Pp.  6.  An  account  of  the  big 
lockout  in  Denmark  which  lasted  from  February  15  until  April  8,  1922. 

Sveriges  ofentliga  arbefsformedling'.  Soc.  Medd.,  no.  5,  1922.  Pp.  2.  A  summary 
of  Swedish  official  unemployment  statistics  for  March,  1922. 

The    third   International   Trade    Union   Congress.     Intern.    Labor    Rev.,   June,    1922. 

Pp.  17. 
Wages  and  hours  of  labor  in  anthracite  coal  mining  in  Pennsylvania  in  Jan.,  1922. 

Mo.  Labor  Rev.,  May,  1922.     Pp.  8. 
Wages  and  hours  of  labor  in  bituminous  coal  mining  in  the  fall  and  winter  of  1921- 

1922.     Mo.  Labor  Rev.,  Apr.,  1922.     Pp.  8. 

Money,  Prices,  Credit,  and  Banking 

(Abstracts   by   N.   R.  Whitney) 

Amoxx,  a.  Das  Ziel  dcr  Wahrungspolitik.  Zeitschr.  f.  Volkswirts.  u.  Sozialpolitik, 
7-9  Heft,  1922.  Pp.  30.  The  goal  should  be  stabilization  of  moneys  in  inter- 
national exchange.  Stability  is  of  more  importance  than  the  level  of  the  value 
of  a  particular  money.  There  should  be  a  general  introduction  of  the  gold 
standard  or  some  other  metallic  standard. 

Anderson,  B.  M.  A  fundamental  solution  of  the  foreign  exchange  problem. 
Bankers  Mag.,  Apr.,  1922.  Pp.  6.  Restoration  of  actual  gold  payments  essential. 
Tliis  can  only  be  brought  about  by  (1)  balancing  governnwnt  expenditures  and 
revenues;  (2)  building  up  the  credit  of  the  European  states;  (3)  establishing  a 
new  gold  par  within  reach;  (4)  reducing  floating  debts  of  the  states;  (5)  curtail- 
ing paper  money  issues;  (6)  accumulating  reserves  of  gold  in  the  banks;  (7) 
canceling  debts  between  allies;  (8)  offering  of  loans  by  the  United  States  and 
England. 


552  Periodicals  [September 

Armin.ion,  p.     Le  change  Eqyptien  depuis  la  guerre.     Rev.  d'Econ.  Pol.,  May-June, 

1921.  Pp.  16. 

Austin,  O.  T.  Rise  and  fall  of  world  prices,  1913-W22.  Bull.  Nat.  City  Bank  of 
N.  Y.,  June  3,  1922.  Pp.  4.  Tables  showinj;  average  price  per  pound  of  principal 
articles  imported  and  exported  during  years  1913  to  1922. 

Bardiani,  F.  Impoverished  Europe  craves  a  new  gold,  standard.  Annalist,  June 
12,  1922.  Pp.  2.  A  suggestion  for  "a  gold  standard  international  money  to  be 
exchanged  for  national  currencies  on  a  self-stabilizing  basis.  It  calls  for  the  free 
participation  of  all  the  civilized  states  of  the  world,  proportionally  to  their  wealth 
in  gold,  and  the  service  of  their  actual  banking  machinery." 

Bahrows,  F.  B.  The  country  hank's  substitute  for  "exchange."  Bankers  Mag., 
June,  1922.  Pp.  8.  Abolition  by  the  federal  reserve  system  of  the  indirect  "ex- 
change" charge  on  check  collection  justified.  It  is  proposed  that  a  similar  charge 
be  levied  with  a  definite,  direct  incidence  on  the  drawer  and  on  the  depositor. 

Baudin,  L.  La  liquidation  de  la  crise  et  la  question  des  rSparations  d'aprh  les 
banquiers  anglais.     Rev.  d'Econ.  Pol.,  Mar.-Apr.,  1922.     Pp.  16. 

Behnsen,  H.     Die  internationale    Wahrungsfrage.     Preussische   Jahrb.,  Jan.,   1922. 

Bernard,  G.     Inflation  in  Germany  and  the  German  banks.     Econ.  World,  Apr.  29, 

1922.  Pp.  2.  Reprinted  from  Journal  of  Commerce  and  Commercial  Bulletin, 
Apr.  21,  1922.  The  financial  system  of  the  Reich  is  responsible  for  inflation  in 
Germany. 

BicKERDiKE,  C.  F.  Internal  and  external  purchasing  power  of  paper  currencies. 
Econ.  Journ.,  Mar.,  1922.  Pp.  11.  If  a  change  in  the  volume  of  money  is  the 
only  influence  operating,  the  internal  and  external  purchasing  power  of  incon- 
vertible paper  money  should  be  equal  and  should  reflect  the  change  in  the  volume 
of  money.  However,  there  are  other  influences  operating.  The  external  pur- 
chasing power  may  be  afl'ected  by  a  change  in  the  demand  for  foreign  goods;  by  a 
change  in  the  conditions  of  supply  of  goods  available  for  export;  or  by  the 
necessity  for  payment  of  foreign  debts.  The  external  purchasing  power  of  con- 
tinental currencies  is  low  as  compared  with  their  internal  purchasing  power,  be- 
cause of  impoverishment  resulting  from  the  war.  In  the  case  of  marks  it  is 
due  in  part  to  bear  speculators.  If  further  issues  of  paper  were  stopped  and  the 
central  bank  acquired  holdings  of  sterling  or  dollar  securities  or  commercial  paper 
which  could  be  put  on  the  market  when  exchange  is  unduly  depressed,  some  ap- 
proach to  stability  might  be  obtained. 

BiRCK,  L.  V.  Hvor  er  vor  Beholdning  af  Sedler  og  Skillmont.  Nat.  ok.  Tids.,  no.  1, 
1922.  Pp.  7.  On  January  11,  1922,  there  was  an  official  count  of  the  money, 
paper  and  coin,  to  be  found  in  all  Danish  financial  institutions.  This  article  sum- 
marizes the  results  with  their  implications. 

Bonar,  J.  Knapp's  theory  of  money.  Econ.  Journ.,  Mar.,  1922.  Pp.  8.  A  review 
of  Knapp's  Staatliche  Theorie  des  Geldes.  The  historical  portions  of  the  book 
arc  praised  highly;  the  desirability  of  adopting  his  terminology  is  questioned;  and 
his  fiat  theory  of  money  is  rejected.  The  absence  of  any  discussion  of  the  theory 
of  value  is  unusual,  but  according  to  the  reviewer,  Knapp  regards  the  theory  of 
money  as  a  political  rather  than  an  economic  matter. 

Cannan,  E.  Recent  memoirs  on  currency  policy.  Econ.  Journ.,  Mar.,  1922.  Pp.  8. 
Notes  on  Seligman's  Currency  Inflation  and  Public  Debts;  Cassel's  The  World's 
Monetary  Problems;  and  Monetary  Policy:  Being  the  Report  of  a  Sub-Committee 
on  Currency  and  the  Gold  Standard,  by  Clapham  et  al. 

Cannan,  E.,  Ross,  W.  D.,  Bonar,  J.,  and  Wicksteed,  P.  H.  Who  said  "barren 
metal"/  Economica,  June,  1922.  Pp.  6.  A  symposium  on  the  origin  of  the 
phrase  "barren  metal." 


1922]  Money,  Prices,  Credit,  and  Banking  553 

Decamps,  M.  J.  Les  aspects  actuels  du  prohUme  monetaire.  Ref.  Soc,  Mar.-Apr., 
1922.  Pp.  19.  Most  of  the  trouble  has  been  caused  by  large  Issues  of  paper 
money.  Restoration  of  pre-war  monetary  conditions  desired,  but  this  restoration 
must  take  place  gradually. 

Elsas,  M.  The  internal  purchasing  power  of  the  German  mark  (II).  Econ. 
Journ.,  Mar.,  1922.  Pp.  7.  A  comparison  of  the  value  of  the  mark  and  the  rise 
in  the  cost  of  living  at  various  dates,  as  compiled  by  several  observers. 

EsTCotjRT,  R.  Stabilizing  or  improving  the  exchanges.  Annalist,  June  12,  1922. 
Pp.  2.  Indicates  several  "fallacies"  in  Keynes  proposal  for  stabilization  of  the 
exchanges. 

EvEHSOLE,  S.  Facts  worth  knowing  about  women  savers.  Bankers  Mag.,  June,  1922. 
Pp.  3.  An  analysis  of  the  ocaipations,  ages  and  balances  of  2000  self-supporting 
women  depositors  in  four  mutual  savings  banks  in  Boston.  Data  obtained  during 
last  ten  days  in  November,  1921.     Graphs  and  tables  included. 

Foster,  W.  T.  Money  as  a  medium  of  exchange.  Annalist,  June  12,  1922.  Pp.  2. 
As  a  medium  of  exchange  money  has  been  the  "indispensable  means"  by  which  the 
modern  social  organization  and  a  comparatively  high  standard  of  living  for  the 
"rank  and  file"  has  been  achieved.  Any  improvement  in  our  economic  order  must 
be  made  on  a  monetary  basis.     A  return  to  barter  is  out  of  the  question. 

.     Money  in  relation  to  goods.     Annalist,  May  1,  1922.     Pp.  2.     The  supply 

of  money,  including  bank  credit,  may,  and   frequently   does,  vary   independently 
of  the  need  for  it,  as  indicated  by  the  supply  of  goods  to  be  exchanged. 

Gabrieli,  G.  Letteratura  bancaria.  Riv.  Intern.,  Jan.,  1922.  Pp.  5.  The  purposes 
and  character  of  publications  by  banking  houses. 

Hahk,  a.  Zur  neueren  geldtheoretischen  Literatur  IV.  Archiv  f.  Sozialwis.  u. 
Sozialpolitik,  Mar.,  1922.  Pp.  5.  Reviews  of  Heyn's  Zur  Valutafrage,  and 
Gesell's  Internationale  V aluta-Assoziation. 

Heckscher,  E.  F.  Den  nordiska  myntunionen.  Nat.  ok.  Tids.,  no.  1,  1922.  Pp.  20. 
An  address  on  the  Scandinavian  monetary  union  and  results  brought  about  by  war 
conditions. 

Hope,  G.  A.  Federal  reserve  notes  as  hank  reserves.  Journ.  Am.  Bankers  Assoc., 
June,  1922.  P.  1.  Many  state  banks  count  these  notes  as  part  of  their  lawful 
reserve.  This  is  undesirable,  because  they  are  in  part  credit  instruments.  It  also 
prevents  the  notes  so  used  from  returning  to  the  issuing  bank  for  retirement,  and 
thus  impedes  the  contraction  of  note  issues. 

.     How  the  reserve  banks  clear  by  wire.     Bankers  Mag.,  May,  1922.  Pp.  6. 

The    gold   settlement    fund    and    telegraphic    transfers    have    contributed    greatly 
toward  securing  complete  fluidity  of  funds  throughout  the  country. 

Laughlix,  J.  L.  The  German  monetary  situation.  Am.  Rev.  Rev.,  May,  1922. 
Pp.  5.  German  monetary  troubles  arise  from  the  overissues  of  inconvertible 
paper,  the  emission  of  which  must  be  halted  before  real  progress  can  be  made. 
The  huge  demand  debt  should  then  be  funded  into  long-term  bonds  to  be  ex- 
changed only  for  paper  marks.  The  bonds  might  bear  no  interest  for  the  first 
year  or  two,  then  one  per  cent  and  so  on,  gradually  increasing.  The  exchange  for 
marks  could  be  offered  at  a  rate  slightly  above  their  current  value,  the  price  to  be 
raised  as  the  mark  rises  in  value. 

Ledereh,  E.  Zur  neueren  geldtheoretischen  Literatur  III.  Archiv  f.  Sozialwis.  u. 
Sozialpolitik,  Mar.,  1922.  Pp.  5.  A  review  of  Gustav  Cassell's  Das  Geldproblem 
der  Welt. 

Legros,  J.  B.  Chronique  de  I'inflation.  Journ.  des  Econ.,  Apr.  15,  May  15,  1922. 
Pp.  14,  9.  The  financial  commission  at  the  Geneva  conference  urged  the  follow- 
ing  as    requisites    for    improvement:     (a)    central   banks    should    be    freed    from 


554  Periodicals  [September 

political  control;  (b)  European  moneys  should  be  placed  on  a  common  standard — 
gold;  (c)  governments  should  definitely  announce  their  intention  to  reestablish 
the  gold  standard;  (d)  budgets  must  be  balanced;  (e)  further  paper  issues  should 
be  stopped;  (f)  all  artificial  regulation  of  exchanges  should  be  abolished. 

Lescure,  J.  Bancos  de  deposit o,  hancos  de  emision  y  bancos  de  reserva.  Rev. 
de  Ciencias  Econ.,  Feb.,  1922.  Pp.  5.  Translated  and  adapted  from  the  Revue 
d'Economie  Politique.  Description  of  the  functions  of  different  types  of  banks. 
A  reserve  bank  should  be  at  the  same  time  a  bank  of  emission  and  a  bank  of 
deposit  in  order  to  furnish  maximum  elasticity. 

LiEssE,  A.  La  "stabilisation"  des  changes  et  la  cooperation  des  banques  d'emission. 
L'Econ.  Frang.,  May  20,  1922.  Pp.  3.  Representatives  from  the  various  banks  of 
emission  throughout  the  world  should  meet  to  devise  practical  means  to  stabilize 
exchange.     Gold  should  be  adopted  as  the  common  monetary  standard. 

McCaleb,  W.  F.  Scope  and  mission  of  cooperative  banking  by  organized  labor. 
Trust  Companies,  Apr.,  1922.  Pp.  3.  An  outline  of  the  principles  upon  which  the 
Brotherhood  of  Locomotive  Engineers  Cooperative  National  Bank  of  Cleveland  is 
founded,  together  with  a  statement  of  the  progress  thus  far  made  by  this  institu- 
tion. 

Mayer,  H.  Untersuchung  zu  dem  Orvndgesetz  der  •wirtschaftlichen  Wertrechnung. 
Zeitschr.  f.  Volkswirtsch.  u.  Sozialpolitik,  7-9  Heft,  1922.  Pp.  28.  An  attempt 
to  arrive  at  a  definition  of  value  by  examining  and  comparing  definitions  of  other 
writers.     Article  to  be  continued. 

Meyer,  E.,  Jr.,  The  War  Finance  Corporation  and  agricultural  finance.  Bankers 
Mag.,  June,  1922.  Pp.  6.  A  description  of  the  post-war  operations  of  the  War 
Finance  Corporation  by  the  managing  director;  his  recommendations  for  further 
legislation;  and  a  statistical  presentation  of  the  work  of  the  corporation  from 
January  4,  1921,  to  April  29,  1922. 

MiNTY,  L.  The  work  and  organization  of  an  American  trust  company.  Scottish 
Bankers  Mag.,  Apr.,  1922.     Pp.  13. 

Oakwood,  J.  India's  menace  to  world  gold  standard  restoration.  Annalist,  May 
29,  1922.  Pp.  2.  India  is  absorbing  practically  all  new  South  African  gold 
arriving  in  London,  and  is  drawing  substantial  amounts  from  the  United  States. 
Gold  going  to  India  is  practically  lost  for  monetary  purposes. 

Oakwood,  J.  The  new  swing  in  the  world's  gold  currents.  Annalist,  Apr.  3,  1922. 
Pp.  2.  Exports  of  gold  from  London  to  United  States  have  fallen  off;  they  have 
increased  sharply  to  India  and  to  Switzerland.  Imports  from  South  Africa  to 
London  have  shown  considerable  decrease  as  a  result  of  labor  troubles  in  the 
Transvaal. 

O'Farrell,  H.  H.     Prices  and  productivity.     Fortn.  Rev.,  Nov.,  1921. 

Paret,  L.  V.  La  nueva  ley  del  Banco  de  Espana.  Rev.  Nacional  de  Econ.,  Tomo 
XI,  33.  Pp.  21.  Criticizes  the  Bank  of  Spain  on  the  ground  that  it  is  organized 
and  operated  with  an  eye  to  obtaining  greatest  possible  profits.  Profits  should 
not  be  the  chief  aim  of  banks  of  emission — they  are  distinctly  public  service 
agencies.  The  dividends  of  the  Bank  of  Spain  have  uniformly  exceeded  those  of 
other  European  central  banks. 

Prebisch,  R.  Anotaciones  sobre  nuestro  medio  circulante.  Rev.  de  Ciencias  Econ., 
Feb.,  1922.  Pp.  37.  An  account  of  the  Banco  Nacional  and  the  Banco  de  la 
Provincia  during  the  period  from  1872-1899.  This  traces  the  operations  of  the 
banks  through  the  crises  of  1881,  culminating  in  the  collapse  of  1884-1885,  and  a 
second  crisis  in  1890,  due  to  the  inflation  and  speculation  just  preceding  1890. 

Price,  L.  L.  Reconstruction  and  monetary  reform.  Econ.  Journ.,  Mar.,  1922.  Pp.  6. 
Suggests  that  the  time  is  ripe  for  the  adoption  of  Professor  Fisher's  plan  to 
stabilize  the  dollar. 


1922]  Money,  Prices,  Credit,  and  Banlcing  555 

Rasix,  a.  What  Czechoslovak  in  has  done  to  strengthen  her  currenc;/.  Econ.  World, 
Mar.  23,  1922.  Pp.  2.  Immediately  after  the  revolution  of  October,  1918,  a  state 
bank  was  established  separate  from  the  Austro-Hun^arian  Bank.  Borrowing 
money  on  war  loans  was  forbidden  and  the  emission  of  uncovered  notes  was  limited. 
Good  harvests,  increased  taxation,  lowerintr  of  the  wajres  and  the  number  of  state 
employees,  railway  tariffs,  all  aided  in  maintaining  the  position  of  the  Czechoslo- 
vakian  crown.  A  policy  of  deflation  has  been  undertaken  but  it  is  difficult  to 
carry  out,  owing  to  economic  conditions  in  neighboring  countries. 

RussEL,  A.  W.  Banking,  a  new  conception  of  an  old  science.  Annalist,  June  19, 
1922.  Pp.  2.  First  of  a  series  of  articles  promised  on  this  subject.  The  "new 
conception"  is  apparently  reserved  for  subsequent  articles. 

Sheewell,  G.  B.  Banking  and  trading  with  Mexico.  Journ.  Am.  Bankers'  Assoc, 
Apr.,  1922.  Pp.  5.  Peculiarities  of  Mexican  negotiable  instruments  laws;  pro- 
cedure in  financing  imports  in  Mexico.  Currency  is  scarce,  rates  of  interest  are 
high,  and  there  is  need  for  an  efficient  banking  service.  Great  opportunities  await 
American  bankers  and  merchants. 

Slater,  G.  Indian  exchange  and  currency.  Wealth  of  India,  Mar.,  1922.  Pp.  3. 
A  review  of  K.  C.  Mahindra's  book  of  this  title.  Approval  is  expressed  for  the 
author's  suggestion  that  India  should  adopt  Porfessor  Fisher's  plan,  with  modi- 
fications, to  stabilize  the  purchasing  power  of  the  rupee. 

Sterxheim,  a.  De  international e  Geldmarkt.  De  Economist,  May,  1922.  Pp.  8. 
A  survey  of  the  present  international  money  market. 

Sykes,  E.  Mr.  R.  G.  Hawtreg  on  the  efficacy  of  the  rate  of  discount.  Journ.  Inst. 
Bankers,  Apr.,  1922.  Pp.  5.  Discussion  of  a  paper  on  "The  Federal  Reserve 
System  of  the  United  States,"  read  by  R.  G.  Hawtrey  before  the  Royal  Statistical 
Society.  It  is  contended  that  Hawtrey  ascribes  too  great  importance  to  the 
efficacy  of  the  discount  rate  in  the  United  States,  and  that  a  great  fall  in  prices 
was  bound  to  occur  after  the  war-time  speculation  regardless  of  the  rate  of 
discount. 

Tj.  G.  Over  Betalingen  in  Binnenen  Buitenland.  De  Economist,  May,  1922.  Pp.  5. 
Concerning  the  payment  of  internal  and  of  foreign  obligations  by  the  Dutch  under 
post-war  conditions. 

Ward,  W.  Commercial  letters  of  credit  as  trade  weapons.  Administration,  May, 
1922.  Pp.  8.  The  use  of  commercial  letters  of  credit  is  essential  to  the  main- 
tenance and  extension  of  our  foreign  trade.  There  is  little  need  for  better  bank- 
ing facilities,  but  rather  for  better  banking  risks.  Two  main  objections  have  been 
advanced  against  the  use  of  commercial  letters  of  credit — (1)  the  cost;  and  (2) 
the  request  for  a  letter  of  credit  reflects  upon  the  financial  standing  of  the  buyer. 
The  cost  should  be  regarded  as  an  insurance  premium  against  loss,  and  as  such 
might  be  borne  by  the  seller.  As  to  the  second  objection,  the  request  for  a  letter 
of  credit  really  implies  that  the  buyer's  credit  rating  is  satisfactory  in  his  own 
locality,  where  he  is  best  known. 

Wertheim,  M.  Gold  loans  for  Europe?  Bankers  Mag.,  May,  1922.  Pp.  4.  The 
United  States  government  .should  make  gold  loans  to  European  countries  to 
enable  them  to  establish  the  gold  standard.  But  this  should  not  be  done  until — 
(1)  budgets  are  balanced;  (2)  further  inflation  is  stopped;  (3)  the  amount  of  the 
reparations  is  definitely  fixed;  and  (4)  interallied  loans  are  canceled. 

Willis,  H.  P.  Salaries  of  federal  reserve  bank  officers.  Journ.  Am.  Bankers 
Assoc,  Apr.,  1922.  Pp.  3.  Salaries  are  higher  than  those  paid  to  the  head 
officers  of  the  central  banks  of  Europe,  but  are  lower  than  similar  services  com- 
mand in  the  principal  member  banks  in  the  United  States. 

Wilson,  J.  The  rise  in  value  of  the  pound  sterling.  Scottish  Bankers  Mag.,  Apr., 
1922.     Pp.  6.     Has  been  due  to  a  reduction  in  government  paper  currency  and  to 


556  Periodicals  [September 

a  feclinp  of  confidence  that  this  reduction  will  be  carried  further.     Advocates  the 
restoration  of  an  unrestricted  market  for  jrold  at  the  earliest  moment  possible. 

WooDwoRTH,  L.  D.  Twenty-five  plans  for  increasing  savings.  Journ.  Am.  Bankers 
Assoc,  Apr.,  1922.     Pp.  3. 

Wright,  A.  K.  Current  banking  prohlem^s  in  relation  to  the  state  of  trade.  Scot- 
tish Bankers  Map.,  Apr.,  1922.  Pp.  18.  Amount  and  method  of  paying  German 
reparations;  the  stabilization  of  currencies;  the  provision  of  loans  to  restore 
industrial  activity  in  Europe;  and  the  promotion  of  thrift  among  all  peoples. 

Bank  acceptances  in  foreign  trade.  Commerce  Mo.,  May,  1922.  Pp.  2.  The  Federal 
Reserve  Board  has  recently  revised  its  repiilation  governing  the  rediscount  by 
federal  reserve  banks  of  bank  acceptances  growing  out  of  foreign  trade.  The 
chief  change  Is  the  elimination  of  what  practically  amounted  to  a  requirement 
that  all  accepted  bills  growing  out  of  foreign  trade  must  be  documentary  or 
secured  in  order  to  be  eligible  for  rediscount.  The  new  regulation  gives  the 
federal  reserve  banks  greater  discretion  In  determining  the  eligibility  of  any 
particular  bill  for  rediscount  or  purchase. 

Better  banking  under  the  federal  reserve  sgstem.  Stone  &  Webster  Journ.,  May, 
1922.  Pp.  11.  A  review  of  the  weaknesses  existing  in  our  banking  system  prior 
to  the  establishment  of  the  federal  reserve  system,  and  a  sketch  of  the  improve- 
ments effected  by  the  establishment  of  the  reserve  banks. 

The  development  of  agricultural  credit  in  Italy  during  the  war.  Intern.  Rev. 
Agrl.  Econ.,  Jan.-Feb.,  1922.  Pp.  25.  A  review  of  the  measures  adopted,  with  a 
description  of  pre-war  agricultural  credit  organization. 

The  foreign  exchanges.     Edinburgh  Rev.,  Jan.,  1922. 

Levnadskostnader  under  forsfa  kvarkalet  1922.  Soc.  Medd.,  no.  5,  1922.  Pp.  27. 
A  tabulated,  detailed  study  of  the  cost  of  living  in  different  parts  of  Sweden 
during  the  period  1911-1922  with  special  details  for  the  first  quarter  of  the  vear 
1922. 

Le  mouvement  des  priiv  et  la  ditninution  du  cont  de  la  vie.  Journ.  des.  Econ., 
May  15,  1922.  Pp.  7.  Index  numbers  for  prices  and  cost  of  living  for  1920  and 
1921,  compared  with  1914  as  the  base.  Tables  show  a  declining  tendency  for  prices 
during  1921. 

National  banks  and  the  business  cycle.  Commerce  Mo.,  July,  1922.  Pp.  5.  A  study 
of  the  relation  between  the  trend  in  business  during  the  past  two  years  and  the 
loans  and  discounts,  demand  deposits,  and  the  borrowings  of  national  banks. 
"The  high  point  in  the  volume  of  loans,  deposits  and  borrowings  In  each  case  came 
several  months  after  the  high  point  in  the  volume  of  general  business.  Deposits 
tended  to  fall  off  more  rapidly  than  loans,  and  earlier  indicated  a  tendency  to 
increase.  In  general,  licpiidation  in  city  banks  began  earlier  and  moved  toward 
completion  more  rapidly  than  in  country  banks." 

Progress  of  banking  in  Great  Britain  and  Ireland  during  1921.  Bankers  Mag., 
June,  1922.  Pp.  13.  The  tendency  toward  amalgamation  of  banks  through  the 
ownership  of  share  capital  has  become  more  pronounced  than  outright  fusion, 
which  was  the  most  common  method  of  amalgamation  during  previous  years. 
1921  was  the  first  year  which  showed  a  decline  in  deposits  as  compared  with 
the  preceding  year. 

Proper  functions  of  the  federal  reserve  system.  Bankers  Mag.,  Apr.,  1922.  P.  1. 
The  system  should  be  truly  a  reserve  system,  the  discount  facilities  to  be  drawn 
upon  only  in  case  of  real  need.  Hence,  its  discount  rate  should  be  kept  above  the 
market  rate. 

Proposed  legislation  and  agricullural  credit.  Commerce  Mo.,  June,  1922.  Pp.  6. 
Presents  evidence  collect* d  by  the  Federal  Reserve  Board  and  by  the  Department 
of  Agriculture,  both  showing  that  farmers  were  favored  rather  than  discriminated 


1922]  Public  Finance  557 

against  during  the  period  1918-1920.  Existing  agencies  supply  fairly  satis- 
factorily the  needs  for  long-term  (5  years)  capital  funds.  But  no  agency  exists 
to  handle  loans  between,  say,  six  months  and  two  or  three  years. 

Public  Finance 

(Abstracts   by   Charles    P.    Huse) 

Barhiol,  a.  and  Brociiu,  I.  Emprunt  du  credit  national  en  1922.  Journ.  des 
Econ.,  Mar.  15,  1922.     Pp.  5.     Calculates  the  rates  of  return. 

Burks,  J.  Income  tax  changes.  Finan.  Rev.  Rev.,  June,  1922.  Pp.  9.  Among  the 
changes  in  the  British  tax  are  the  reduction  in  the  rate  of  the  ordinary  tax  and  a 
more  liberal  method  of  determining  the  profits  of  farmers. 

CoMSTOCK,  A.  New  financial  poUcieti  of  Russia.  Annalist,  May  1,  1922.  Pp.  1. 
Tells  of  concessions  made  to  Western  Europe. 

CoirrKGTON,  M.  Effect  of  the  tax  exemption  ordinance  in  New  York  City  on  housing. 
Mo.  Labor  Rev.,  Apr.,  1922.  Pp.  10.  Gives  a  history  of  the  law  and  an  analysis 
of  its  results. 

Coppola  d'Axxa,  F.  Sul  cosidetto  "valuta-dumping"  e  sui  provvedimenti  doganali 
contro  i  paesi  a  valuta  deprezzafa.  Riv.  di  Pol.  Econ.,  no.  11-12,  1921.  Pp.  16. 
Post-war  tariff  legislation  aiming  to  cope  with  the  collapse  and  fluctuations  of 
exchange  rates  has  been  poorly  contrived. 

Cox,  H.  Reluctance  to  receive.  Bankers  Mag.,  May,  1922.  Pp.  19.  A  discussion 
of  the  problem  of  the  allied  debts. 

Craig,  C.  L.  The  finances  of  the  city  of  New  York.  Real  Estate  Mag.  of  N  .Y., 
May,  1922.     Pp.  10. 

DoAXE,  W.  F.  Cole's  "The  Domestic  and  Foreign  Wool  Manufactures  and  the 
Tariff  Problem."  Quart.  Journ.  Econ.,  May,  1922.  I*p.  21.  A  review  dealing 
with  comparative  labor  costs,  industrial  technique  and  the  tariff. 

Edmonds,  W.  L.  How  will  Canada's  preferential  tariff  work?  Annalist,  June  5, 
1922.     P.  1.     A  brief  description  of  the  recent  changes. 

Fairchild,  F.  R.  German  war  finance — a  review.  Am.  Econ.  Rev.,  June,  1922. 
Pp.  16. 

Fernaxd-Jacq.  Le  calcul  de  I'impot  gfn^ral  sur  le  revenu.  Monde  Econ.,  Mar.  18, 
1922.     Pp.  4.     Describes  the  method  of  determining  the  amount  of  the  tax. 

VAN  Gljn,  a.  De  Stoat sfinancien  na  den  Oorlog.  De  Economist,  May,  1922.  Pp.  21 
An  account  of  Dutch  state  finances  after  the  World  War. 

High,  I.     New  basis  for  taxation.     Nat.  Real  Estate  Journ.,  Mar.  13,  1922.     Pp.  32. 

Jeze,  G.  L'emprunt  ford.  Rev.  de  Sci.  et  de  Leg.  Finan.,  Jan.-Mar.,  1922.  Pp.  51. 
The  theory  and  history  of  the  forced  loan. 

JoRDAX,  C.  A.  The  sales  tax.  Bull.  Nat.  Tax  Assoc,  Mar.,  1922.  Pp.  3.  Points 
out  that  the  tax  will  bear  more  heavily  on  the  poor  than  on  the  rich. 

Keirstead,  W.  C.  Succession  duties  in  Canadian  provinces.  Journ.  Pol.  Econ., 
Apr.,  1922.     Pp.  18.     Canadian  .system  shows  British  influence. 

Law,  W.  W.  Law  on  bank  tax.  Bull.  Nat.  Tax  Assoc,  Mar.,  1922.  Pp.  3. 
Gives  a  summary  of  arguments  used  in  hearings  on  the  McFadden  bill,  relative  to  a 
tax  on  national  banks. 

LocKHAHT,  O.  C.  Taxable  interest  on  government  obligations.  Bull.  Nat.  Tax 
Assoc,  Apr.,  1922.  Pp.  2.  The  requirement  for  a  statement  of  holdings  by 
periods  is  very  troublesome. 


558  Periodicals  [September 

Miller,  R.  N.  Administration  of  the  federal  income  tax.  Bull.  Nat.  Tax  Assoc, 
Apr.,  1922.  Pp.  4.  Would  be  improved  by  the  payment  of  better  salaries  to 
officials  and  by  the  simplification  of  the  law. 

Neyexs,  a.  Les  impotn  dans  le  Orand-BucM  de  Luxembourg.  Rev.  de  Sci.  et  de 
L6g.  Finan.,  Jan.-Mar.,  1922.  Pp.  34.  Having  survived  the  war  with  her  in- 
dustrial and  agricultural  equipment  intact,  Luxembourg  hopes  soon  to  place  her 
finances  on  a  sound  basis. 

Peano,  L.  L'imposta  suUa  cifra  degli  affari.  Riv.  di  Pol.  Econ.,  no.  11-12,  1921. 
Pp.  4. 

RiGHTOE,  C.  E.     Your  tax  dollar.     American  City,  Apr.,  1922.     Pp.  2. 

RiNDLER,  M.  Corporations  under  the  new  tax  law.  Administration,  Feb.,  1922. 
Pp.  7.     Small  corporations  will  probably  pay  more  and  large  corporations  less. 

RoLNiK,  M.  Amortization — often  overlooked  in  tax  returns.  Annalist,  Apr.  3,  1922. 
P.  1.     Discusses  recent  changes  in  the  income  tax  law. 

Roper,  D.  C.  Administrative  problems  in  United  States  internal  taxation.  So. 
Atlantic  Quart.,  Apr.,  1922.  Pp.  12.  Sliows  the  need  of  simplicity  and  per- 
manency in  incom,e  tax  legislation. 

Stutz,  J.  G.  Citi/  tax  rate  bulletin  for  lOSl.  Kansas  Municipalities,  Apr.,  1922. 
Pp.  16. 

Vaughan,  G.  The  severance  tax.  Bull.  Nat.  Tax  Assoc,  May,  1922.  Pp.  8.  De- 
scribes this  unique  tax  on  mineral  output  already  adopted  by  several  states. 

ViNEE,  J.  Textbooks  in  (/overnment  finance.  Journ.  Pol.  Econ.,  Apr.,  1922.  Pp.  16. 
A  review  of  Plehn  and  Hunter  leads  to  the  conclusion  that  there  is  urgent  need  of 
the  writing  of  textbooks. 

VmoiLii,  F.  II  riordinamento  del  slstema  tributario  italiano.  Riv.  di  Pol.  Econ., 
no.  11-12,  1921.     Pp.  14. 

Virtue,  G.  O.  New  phases  of  the  classified  property  tax.  Bull.  Nat.  Tax  Assoc, 
Apr.,  1922.  Pp.  3.  Instead  of  having  a  uniform  rate  on  intangibles  throughout 
the  state,  Nebraska  has  adopted  a  method  of  doubtful  expediency  which  fixes  the 
rate  at  twenty-five  per  cent  of  the  rate  on  tangible  property  in  each  district. 

Weber,  A.  Deutschlands  finanzielle  Leistungsfahigkeit  jezt  und  kiinftig.  Archiv 
f.  Sozialwis.  u.  Sozialpolitik,  May,  1922.  Pp.  33.  Germany  can  regain  her  finan- 
cial standing  if  she  is  permitted  to  rebuild  her  shattered  economic  structure. 

W^iLLiAMS,  W.  M.  J.  La  perspective  des  finances  nationales  britanniques.  Journ. 
des  Econ.,  Apr.  15,  1922.  Pp.  11.  In  spite  of  economies,  the  loss  of  revenue  from 
excess  profits  and  sales  of  war  material  makes  the  prospect  of  tax  reduction 
uncertain. 

The  burden  of  real  estate  taxation  in  New  York.  Bull.  Nat.  Tax  Assoc,  May,  1922. 
Pp.  ().  The  recent  committee  on  taxation  deplores  in  its  report  the  rapid  growth 
of  the  rates  on  real  estate. 

Income  tax  statistics — report  of  New  York  income  tax  bureau.  Bull.  Nat.  Tax 
Assoc,  Apr.,  1922.  Pp.  5.  The  low  rates  have  contributed  to  the  success  of  the 
New  York  tax. 

Japanese  public  finances.     Bankers  Mag.,  Apr.,  1922.     Pp.  4. 

Stati.itics  of  foreign  indebtedness.  Bankers  Mag.,  Apr.,  1922.  Pp.  5.  If  Great 
Britain  and  France  could  eolU-ct  their  debts,  the  problem  of  paying  the  United 
States  would  be  simplified. 

Wool  and  manufactures  of.     Schedule  11  of  the  Fordney-McCumber  Tariff  bill  as 
reported   by   the  Senate   Committee   on  Finance.     Bull.   Nat.   Assoc.    Wool   Mfrs 
Apr.,  1922.     Pp.  6.  '  " 


1922]  Insurance  and  Pensions  559 

Insurance  and  Pensions 

(Abstracts  by  Henry  J.  Harris) 

Bellinger,  C.  The  development  of  accident  and  health  insurance  In  the  United 
States.  Econ.  World,  May  13,  1922.  Pp.  4.  Evolution  of  the  policy  with  tend- 
ency to  more  liberal  terms,  but  lack  of  standardization. 

Bureau,  C.  Beitriige  zur  Theorie  und  Praxis  der  Versicherung  ausser  der  Lebens- 
versicherung.  Zeitschr.  f.  d.  ges.  Vers-Wis.,  Apr.,  1922.  Pp.  11.  Use  of  mathe- 
matical formulas,  etc.,  in  accident,  fire,  etc.,  insurance. 

DoxALD,  W.  J.  Insuring  management.  Administration,  Apr.,  1922.  Pp.  7.  Various 
methods  of  using  life  policies  to  prote<;t  concerns  from  loss. 

FoRGEEOx,  L.  Le  mecanisme  technique  et  les  charges  iventualles  du  project  d'assur- 
ances  sociales.  Journ.  des  Econ.,  Mar.  15,  1922.  Pp.  19,  Detailed  analysis  of 
the  biU. 

Gahrisox,  F.  S.  Burglary,  theft  and  robbery  insurance.  Econ.  World,  Apr.  15,  22, 
1922.  Pp.  3,  4.  Terms  of  the  policies  and  recent  experiences  in  the  fields  of 
residence,  mercantile  open  stock,  mercantile  safe,  bank,  and  messenger,  pay- 
master, and  office  or  store  robbery. 

HuEBKER,  S.  S.  Marine  insurance  in  its  relation  to  the  American  merchant  marine. 
Econ.  World,  Mar.  25,  1922.  Pp.  2.  Undeveloped  business  in  this  country;  or- 
ganizations created  to  carry  Shipping  Board  risks  and  do  salvage  work.  Govern- 
ment insurance  system  would  be  unwise. 

.     The  model  marine  insurance  law  recently  enacted  by  Congress.     Econ. 

World,  May  27,  1922.  Pp.  4.  The  act  of  Congress  of  March  4,  1922,  regulating 
marine  insurance  in  the  District  of  Columbia,  was  drafted  in  the  hope  of  having 
it  used  as  a  model  by  the  various  states,  much  of  whose  legislation  affects  adversely 
the  development  of  marine  business.  Terms  of  the  act  and  reasons  for  provi- 
sions explained. 

Kaskel,  W.  Entmicklungstendenzen  der  deutschen  Sozialversicherung.  Zeitschr. 
f.  d.  ges.  Vers.-Wis.,  Apr.,  1922.  Pp.  8.  Original  laws  were  straight  insurance, 
having  benefits  proportioned  to  the  contributions.  Gradually  state  relief  is 
supplanting  insurance. 

KiHKPATRicK,  A.  L.  The  development  of  public  liability  insurance  rates  for  auto~ 
mobiles.  Proc.  Cas.  Act.  Soc,  Nov.,  1921.  Pp.  19.  The  National  Workmen's 
Compensation  Service  Bureau  has  compiled  the  experience  in  this  field.  The 
present  basis  for  rate  making  is  the  cost  of  the  car,  but  conditions  are  changing 
so  rapidly  that  improvements  will  probably  be  introduced  shortly. 

Leslie,  W.  Distribution  of  surplus  by  casualty  companies  writing  participating  in- 
surance. Proc.  Cas.  Act.  Soc,  Nov.,  1921.  Pp.  23.  Reviews  existing  dividend 
systems,  principles  underlying  a  sound  basis  of  dividends;  uses  experience  of  the 
State  Compensation  Insurance  Fund  of  California. 

MacLeod,  N.  Some  observations  on  profits  insurance.  Econ.  World,  Apr.  29,  1922. 
Pp.  8.     Loss  of  profits  due  to  fire.     Methods  of  computing  profits. 

MoRTLEY,  R.  S.  Participating  vs.  non-parlicipating  life  insurance  in  Canada  during 
and  since  the  war.  Econ.  World,  Apr.  1922.  Pp.  2.  Reprinted  from  The  Mone- 
tary Times,  Apr.  14,  1922.  The  war  losses,  coming  at  the  same  time  as  the  much 
heavier  influenza  deaths,  together  with  the  increases  in  cost  of  doing  business, 
have  made  it  necessary  to  reduce  dividends;  probably  reduction  will  continue  until 
1925. 

Mowbray,  A.  H.  Classification  of  risks  as  the  basis  of  insurance  rate  making  with 
special  reference  to  workmen's  compensation  insurance.  Proc.  Cas.  Act.  Soc, 
Nov.,  1921.  Pp.  16.  States  five  fundamentals  of  classification  of  risks  and 
presents  program  for  the  study  and  review  of  the  present  manual. 


560  Periodicals  [September 
.     Competition    and    regulation   of    rates   for    casualty    insurance.     Proc. 


Cas.  Act.  Soc,  Nov.,  1921.  Pp.  9.  The  regulative  powers  of  state  officials  enable 
them  to  insist  on  favorable  terms  for  their  localities.  Proper  standards  are  the 
remedy. 

Page,  C.  R.  Factors  to  be  considered  in  rate  making  in  marine  insurance.  Econ. 
World,  June  10,  1922.  Pp.  4.  Principal  factor  is  management — its  probity  and 
efficiency.  In  cargo  insurance  factors  include  voyage,  nature  of  cargo,  human 
element,  etc. 

Ramon,  G.  C.  The  social  insurance  bill  of  the  French  government.  Intern.  Lab. 
Rev.,  June,  1922.     Pp.  21.     Statement  of  its  provisions,  with  comment. 

Stahl,  J.  M.  Why  not  insure  farm  crops?  Am.  Rev.  Rev.,  May,  1922.  Pp.  3. 
Average  annual  crop  damage  during  eleven  years  was  $2,620,000,000.  The  govern- 
ment has  insured  ships,  also  soldiers  and  sailors;  it  would  be  of  much  more 
value  to  the  country  to  protect  the  farmers. 

Stoddard,  F.  R.,  Jr.  An  official  explanation  of  the  provisions  of  the  recently 
enacted  insurance  rating  law  of  New  York.  Econ.  World,  June  17,  1922.  Pp.  3. 
Explanation  and  interpretation,  by  the  state  superintendent  of  insurance,  of  act 
of  April  13,  1922;  forms  chapter  660  of  laws  of  1922,  amending  section  141  and 
adding  sections  141a  and  141b  to  the  insurance  law. 

Studensky,  p.  Pensions  in  public  employment.  Nat.  Munic.  Rev.,  Apr.,  1922. 
Pp.  28.  Report  prepared  for  the  Committee  on  Pensions  of  the  National  Muni- 
cipal League.  Begins  by  pointing  out  the  defects  of  existing  systems,  especially 
the  retirement  system  for  federal  employees.  Urges  that  multiplicity  of  small 
funds  be  avoided  and  gives  a  classification  of  employees  based  on  occupation.  A 
pension  fund  should  be  based  on  statistical  and  actuarial  investigation  just  as 
other  systems  of  insurance  are  and  an  adequate  reserve  is  essential.  Such  sys- 
tems work  best  on  the  joint  contributory  principle.  The  benefits  provided  should 
be  based  primarily  on  age,  with  due  consideration  of  salary  and  length  of  service. 
Separation  from  the  service  should  mean  refund  of  contributions  with  compound 
interest.  The  administration  should  provide  for  representation  of  the  insured 
and  have  frequent  actuarial  valuations.  Autlior  gives  description  of  sound  sys- 
tems now  in  operation.  A  convenient  synopsis  of  the  problem,  especially  useful 
for  municipalities. 

Turner,  G.  E.  The  state  of  Ohio  and  workmen's  compensation  insurance.  Econ. 
World,  Apr.  29,  1922.  Pp.  4.  The  state  fund  of  Ohio  has  not  given  better  service 
than  the  private  companies  elsewhere. 

Unsain,  a.  M.  Reforma  de  la  ley  9688,  de  accidentes  de  trabajo.  Boletin  del 
Museo  Soc.  Argentino,  Jan.  10,  1922.  Pp.  12.  Proposals  for  amending  the  law; 
wage  limit  is  too  low,  agriculture,  etc.,  should  be  included. 

Vei.ay,  J.  Considerations  nouvelles  sur  les  pensions  de  guerre.  Journ.  des  Econ., 
Apr.  15,  1922.  Pp.  7.  To  secure  a  reduction  in  the  heavy  expenditures  for  war 
pensions,  author  proposes  that  pensioners  be  given  option  of  accepting  smaller 
pensions  at  present,  with  higher  pensions,  actuarially  equivalent  at,  say,  age  65. 

Wendt,  J.  Sterblichkeitstabellen  der  deutschen  V olksversicherung.  Zeitschr.  f.  d. 
ges.  Vers.-Wis.,  Apr.,  1922.  Pp.  14.  Tables  showing  a  leading  industrial  (in- 
stalment) company. 

Woodward,  J.  H.  Industrial  retirement  systems  based  on  the  money-purchase 
principle.  Proc.  Cas.  Act.  Soc,  Nov.,  1921.  Pp.  22.  Retirement  pension  plans 
must  be  secure,  equitable,  and  must  be  in  the  form  of  a  contract.  Author  suggests 
that  pension  systems  of  industrial  establishments  be  supervised  by  state  author- 
ities. 

Credit  insurance.  Fed.  Reserve  Bull.,  June,  1922.  Pp.  11.  A  study  of  the  use 
of  "credit  insurance  in  the  United  States  and  the  methods  by  which  it  is  written." 


1922]  Pauperism^  Charities,  and  Relief  Measures  561 

Reinsurance  as  a  necessary  practice  in  modern  fire  insurance.     Econ.  World,  Apr.  8, 

1922.     Pp.  3.     Its  jiature  and  object,  and  its  necessity  in  the  practical  conduct 

of  the  fire  business. 
Unemployment    insurance.     The    bankers'    special    scheme.     Journ.    Inst.    Bankers, 

May,  1922.     Pp.  3.     Details  of  the  plan  for  organizing  the  banking  industry  for 

this  insurance. 

Pauperism,  Charities,  and  Relief  Measures 

(Abstracts  by  George  B.   Mangold) 

Bronner,  a.  E.  The  apperceptive  abilities  of  delinquents.  Journ.  Delinquency, 
Jan.,  1922.  The  author  has  made  a  study  of  the  1043  cases,  of  which  729  are 
repeated  offenders.  The  evidence  indicates  that  apperceptive  ability  is  not  closely 
correlated  with  intelligence.  Nevertheless,  there  seem  to  be  some  direct  relations 
to  delinquency. 

Clark^  W.  W.  Home  conditions  and  native  intelligence.  Journ.  Delinquency,  Jan., 
1922.  The  relationship  between  the  two  pictures  is  not  clear.  The  author  has 
evidence  "to  indicate  a  moderate  tendency  for  degree  of  intelligence  to  be  related 
to  quality  of  the  home."  But  there  are  other  features  the  precise  bearing  of 
which  has  not  been  ascertained. 

GoLDBLATT,  M.  E.  The  history  of  juvenile  court  laws  in  New  York  state.  Journ. 
Delinquency,  Jan.,  1922.  A  brief  account  of  the  juvenile  court  laws  passed  in 
New  York  state — gives  particular  attention  to  the  laws  applying  to  different 
cities.     It  also  contains  suggestions  for  the  future. 

JoHxsox,  F.  R.  Public  relief  of  unemployment.  Survey,  Apr.  8,  1922.  Pp.  2. 
This  article  is  a  brief  account  of  the  relief  used  in  Detroit  in  1921.  An  elaborate 
program  was  developed  and  trained  social  workers  were  used  to  carry  it  out. 
Many  positions  were  secured  and  many  jobs  provided,  in  exchange  for  relief.  The 
writer  is  most  hopeful  about  the  work. 

KoHS,  S.  C.  An  ethical  discrimination  test.  Journ.  Delinquency,  Jan.,  1922.  The 
writer  has  developed  a  set  of  tests  with  which  he  hopes  to  "open  up  new  fields  of 
investigation  in  the  realm  of  moral  education  as  well  as  of  responsibility.  These 
tests  are  expected  to  have  greater  value  as  individual  than  as  group  tests. 

Statistics 

(Abstracts  by  Horace  Secrist) 

Austin,  O.  P.  Use  of  statistical  publications  of  the  government  in  working  out 
problems  of  commercial  investigation.  Administration,  Apr.,  1922.  Pp.  4.  A 
useful  list  of  statistical  publications  of  the  United  States  government,  together 
with  helpful  critical  comments. 

Aybes,  L.  p.  The  nature  and  status  of  business  research.  Journ.  Am.  Stat.  Assoc, 
March,  1922.  Pp.  9.  Holds  that  the  job  of  the  business  statistician  is  to  look  into 
the  future,  and  sets  up  his  qualifications.  Inasmuch  as  it  is  his  function  to  fur- 
nish those  in  position  of  control  with  "a  fact  basis  for  their  thinking  and  acting" 
his  training  must  be  broad,  his  acquaintanceship  with  statistical  method  sound, 
and  his  knowledge  of  economic  principles  comprehensive. 

Berridge,  W.  a.  Cycles  of  employment  and  unemployment  in  the  United  States. 
Journ.  Am.  Stat.  Assoc.,  March,  1922.  Pp.  14.  A  contribution  to  statistical 
method  in  its  application  to  social  data.  Makes  use  both  of  employment  and 
unemployment  data  drawn  from  state  and  national  sources  in  order  to  construct 
a  continuous  index;  and  not  to  estimate  the  volume  of  unemployment. 

BiRKETT,  M.  S.  The  British  iron  and  steel  industry.  Economica,  June,  1922.  Pp.  112. 
An  historical  review — tables.  Concludes:  "We  are  the  only  steel-producing 
country  with  suitable  coal  supplies  on  the  coast  to  which  foreign  ore  can  be 
brought  by  sea  and  the  product  re-shipped." 


562  Periodicals  [September 

BrviNs,  P.  A.  Charting  as  an  aid  in  stabilizing  profits.  Indus.  Manag.,  July,  1922. 
Pp.  9.  Addressed  primarily  to  commodity  prices — the  third  of  a  series  of  Interest- 
mg  applications  of  graphics  to  business  problems. 

BowLEY^  A.  L.  British  economic  conditions:  an  index  of  British  economic  condi- 
tions, 1919-1922.  Rev.  Econ.  Stat.,  June,  1922  (supp.  2).  Pp.  12.  Prepared  at 
the  London  School  of  Economics  and  Political  Science.  Communicated  by  Dr. 
Arthur  L.  Bowley,  professor  of  statistics  in  the  University  of  London. 

Davis,  J.  S.  Index  numbers  of  foreign  exchange.  Quart.  Journ.  of  Econ.,  May, 
1922.  Pp.  7.  A  critical,  and  on  the  whole,  an  unfavorable  account  of  the  indexes 
of  foreign  exchange  first  published  by  certain  foreign  journals,  and  later  elabor- 
ated by  the  Federal  Reserve  Board  and  printed  in  its  Bulletin.  "The  objection  to 
the  elaboration  of  such  index  numbers  is  not  alone  to  the  waste  of  labor  which 
they  entail  in  preparation  and  in  amateur  efforts  at  interpretation,  and  to  the 
discredit  which  they  reflect  upon  useful  statistical  devices,  but  to  the  unsound 
reactions  they  imply  or  support." 

Dennison,  H.  S.  Management  and  the  business  cycle.  Journ.  Am.  Stat.  Assoc, 
Mar.,  1922.  Pp.  13.  A  stimulating  statement  of  the  way  in  which  statistical 
data  of  prices,  sales,  stocks,  etc.,  may  be  used  to  guide  business  through  the 
different  phases  of  the  business  cycle.  "Management  can  make  practical  use  of  a 
study  of  cycles." 

Fisher,  R.  A.  On  the  interpretation  of  X^  from  contingency  tables,  and  the  calcula- 
tion of  P.     Journ.  Royal  Stat.  Soc,  Jan.,  1922.     Pp.  7. 

Hansen,  A.  H.  The  buying  power  of  labor  during  the  war.  Journ.  Am.  Stat. 
Assoc,  Mar.,  1922.  Pp.  11.  A  discussion  of  the  meaning  of  "buying  power"  and 
the  method  of  measuring  it.  Concludes  from  his  analysis  that  "the  per  capita 
buying  power  of  tlie  wage-earning  class  (in  the  United  States)  during  the  years 
1916  to  1918  appears,  then,  to  have  been  on  tlie  average  8.5  per  cent  above  the 
normal  per  capita  buying  power  of  labor  in  pre-war  days." 

Hawtrey,  R.  H.  The  federal  reserve  system  of  the  United,  States.  Journ.  Royal 
Stat.  Soc,  Mar.,  1922.    Pp.  31.     An  historical  resum6. 

Macrosty,  H.  W.  Some  current  financial  problems.  Journ.  Royal  Stat.  Soc,  Mar., 
1922.     Pp.  30.     Primarily  concerned  with  credit  and  currency  problems. 

Penson,  J.  H.  The  Polish  mark  in  1921.  Econ.  Journ.,  June,  1922.  Pp.  7.  A 
study  of  the  depreciation  of  the  mark.  Course  due  to  excessive  issues  of  money 
with  metallic  backing  and  to  violent  outside  political  movements. 

Perry,  S.  J.  On  the  relation  between  the  course  of  wholesale  prices  of  commodities 
and  the  market  value  of  various  classes  of  securities.  Journ.  Inst.  Actuaries,  Mar., 
1922.  Pp.  22.  An  examination  of  the  relation  of  wholesale  prices  (in  England) 
to  the  market  value  of  various  types  of  securities  in  relation  to  the  problem  of 
investing  insurance  funds.  Concludes:  "There  would,  from  the  foregoing,  appear 
to  be  a  sound  case  for  periodical  revision  of  investment  policy  in  accordance 
witli  any  decided  change  that  may  occur  in  the  course  of  commodity  price  levels. 
However,  it  must  be  admitted  tliat  any  attempt  exactly  to  forecast  the  future 
is   fraught  with  danger." 

Persons,  W.  M.  and  Berridge,  \V.  A.  British  economic  conditions:  an  index  of 
conditions  for  1903-14.     Rev.  Econ.  Stat.,  June,  1922  (supp.  2).     Pp.  16. 

Roorback,  G.  B.  Europe  and  the  development  of  American  foreign  trade.  The 
Annals,  July,  1922.  Pp.  8.  A  statistical  study  of  the  relation  of  European 
trade  to  the  financial  and  business  recovery  of  the  United  States  and  of  Europe. 

Rusher,  E.  A.  The  statistics  of  industrial  morbidity  in  Great  Britain.  Journ. 
Royal  Stat.  Soc,  Jan.,  1922.  Pp.  44.  Urges  extended  use  of  data  on  occupational 
incidence  and  causes  of  niorbidity,  and  insists  that  in  order  to  measure  scienti- 


1922]  Statistics  563 

fically  morbidity,  standard  tables  of  sickness  are  required.  Out  of  mass  experi- 
ence, standards  for  industrial  population  of  a  country  could  be  procured.  Biblio- 
graphy. 

White,  E.  Income  fluctuation  of  a  selected  group  of  personal  returns.  Journ. 
Am.  Stat.  Soc,  Mar.,  1922.  Pp.  15.  Use  of  returns  from  statistics  of  income 
to  measure  the  dispersion  of  incomes  of  1240  "persons,"  from  1914  to  1919,  who 
reported  in  any  of  the  years  net  income  of  .$.300,000  and  over. 

WixKLER,  W.  Die  statistischen  V  erhdltniszahlen.  Zeitschr.  f.  Volksvvirtsch.  u. 
Sozialpolitik,  10-12  Heft,  1  Band.     Pp.  24. 

Yule,  G.  U.  On  the  application  of  the  X^  method  to  association  and  contingency 
tables,  with  experimental  Illustrations.     Journ.  Royal  Stat.  Soc,  Jan.,  1922.  Pp.  10. 

Bollettino  di  statistica  del  comune  di  Roma.  L'Ufficio  Munic.  del  Lavoro  di  Roma, 
Boll.  Mens.,  Dec,  1921.     Pp.  24.     Current  civil  and  economic  statistics  of  Rome. 

The  gold  and  silver  situation.  Fed.  Reserve  Bull.,  June,  1922.  Pp.  7.  A  statistical 
review  of  the  situation  in  the  principal  countries  of  the  world.  Contains  tables 
and  charts. 

Methods  of  determining  the  cost  of  living.  Manag.  Engg.,  April,  1922.  Pp.  5.  A 
review  of  the  methods  used  by  the  United  States  Bureau  of  Labor  Statistics, 
National  Industrial  Conference  Board,  American  Rolling  Mills,  and  Holt  Manu- 
facturing Company. 

Paving  statistics  for  1921.     Public  Works,  Feb.  18,  1922.     Pp.  10. 

Rate  of  turnover  of  bank  deposits.  Mo.  Rev.  of  Credit  and  Business  Conditions,  2nd 
Fed.  Reserve  Dist.  (N.  Y.),  Apr.,  1922.  P.  1.  A  new  index  of  business  activity 
in  the  rapidity  of  turnover  or  velocity  of  bank  deposits.  Data  for  New  York  Citj^, 
Albany,  Bufifalo,  Rochester,  Syracuse,  Chicago,  and  San  Francisco.  Data  and 
charts. 

A  statistical  abstract  of  ports  of  the  South.     Gulf  Ports  Mag.,  Mar.,  1922.     Pp.  11. 

Statistics  of  the  unemploijed.  Intern.  Lab.  Rev.,  Feb.,  1922.  Pp.  7.  A  comparison 
for  United  States  (Massachusetts)  and  the  chief  European  countries.  "In  no 
case  can  an  accurate  statement  be  made  as  to  whether  unemployment  is  greater 
or  less  in  one  country  or  another,  because  the  nature  of  the  figures  in  each  case 
is  very  diverse  and  the  methods  of  compilation  so  different.  At  the  very  best  the 
figures  are  only  comparable  in  each  country  by  itself  over  the  period  of  years  and 
months  indicated." 

Wholesale  prices  of  commodities  in  1021.  Journ.  Royal  Stat.  Soc,  Mar.,  1922. 
Pp.  22.  The  "Statist's"  index  numbers,  in  continuance  of  Mr.  A.  Sauerbeck's 
figures. 


DOCUMENTS,  REPORTS  AND  LEGISLATION 
Industries  and  Commerce 

The  United  States  Tariff  Commission  has  recently  published: 

The  Foreign  Trade  of  Japan,  zvith  Special  Reference  to  Trade  with  the 
United  States  (Washington,  1922,  pp.  viii,  229;  six  charts;  25c).  This 
monograph  contains  chapters  relating  to  the  development  of  Japan's  foreign 
trade  prior  to  the  war,  trade  since  1913,  trade  by  groups  of  commodities,  and 
trade  between  the  United  States  and  Japan. 

Colonial  Tariff  Policies  (pp.  869). 

The  Federal  Trade  Commission  has  issued  its  report  on  Canned  Foods, 
1918  (Washington,  1922,  pp.  86).  Court  decisions  of  cases  which  involve 
questions  brought  before  its  jurisdiction  are  being  published  by  the  Com- 
mission ;  copies  of  these  decisions  are  to  be  obtained  by  application  to  the 
Publication  Section. 

The  Bureau  of  Foreign  and  Domestic  Commerce  has  issued — 
Miscellaneous  Series: 

No.   107,  The  Import  and  Export  Schedule  of  Belgium  (pp.  28). 
No.   108,   Vegetable    Oils    and    Oil    Materials    in    International    Commerce 

(pp.  25). 
No.   110,  Import  and  Export  Schedules  of  Cuba  (pp.  19). 

Special  Agents  Series: 

No.   211,  Forest  Resources,  Lumber  Industry  and  Lumber  Export  Trade 

of  Nortcay,  by  Axel  H.  Oxholm  (pp.  136). 
No.   213,  Electrical  Goods  in  British  India  and  Ceylon,  by  R.  A.  Lundquist 

(pp.  121). 
Trade  Information  Bulletins: 

No.     9,  Cotton  Textile  Industry  of  Germany,  by  Donald  L.  Breed  (pp.  8). 
No.    11,   The   Steel-Making   Facilities    of    Great   Britain,   by    H.    B.    Allin 

Smith  (pp.  9). 
No.  21,  Export   Trade   of  the    United  States   and   Germany,   Comparative 
Figures  for  1913,  1920,  and  1921,  bv  Joseph  N.  C.  Reagan   (pp. 
17). 

The  report  of  the  Committee  of  Finance  on  the  tariff  bill  submitted  by 
Senator  McCumber  has  been  printed  as  Senate  Report  no.  595,  67  Cong., 
2  Sess.  (pp.  20). 

The  Domestic  Distribution  Department  of  the  Chamber  of  Commerce  of 
the  United  States,  Washington,  is  publishing  cyclostyled  sheets  of  charts 
and  notes  on  retail  and  wholesale  trade. 

The  Port  of  New  York  Authority  has  issued  a  supplementary  Report  xvith 
Plans  for  the  Comprehensive  Development  of  the  Port  of  New  York 
(Albany,  1921,  pp.  56,  with  maps). 

Notice  has  been  received  from  the  Census  and  Statistics  Office  of  New 
Zealand  that  in  lieu  of  the  present  Annual  Statistics  of  New  Zealand, 
appearing  in  four  volumes,  there  will  hereafter  be  published  nine  Statistical 
Reports,  each  containing  in  addition  to  the  tables,  a  certain  amount  of  intro- 
ductory letter-press.     A  charge  henceforth  will  be  made  for  all  publications. 


1922]  Corporations     '  565 

r.«      Corporations 

The  Senate  Committee  on  Interstate  Commerce  has  printed  Extracts  from 
Hearings  on  Railway  Revenues  and  Expenses  (Washington,  1922,  pp.  1597- 
1909).  This  contains  the  statements  of  Walker  D.  Hines,  William  G. 
McAdoo,  J.  F.  Anderson,  F.  J.  Manion,  H.  J.  Chapman,  Henry  T.  Hunt, 
J.  J.  Forester. 

The  Presidents'  Conference  Committee  (737  Commercial  Trust  Bldg., 
Philadelphia)  has  printed  a  statement  prepared  by  Frederick  H.  Lee, 
Secretary  of  the  Developments,  on  Federal  Valuation  of  the  Railroads  in 
the  United  States  as  of  May  12,  1922  (pp.  9). 

The  New  York,  New  Haven  and  Hartford  Railroad  Company  (New 
Haven,  Conn.)  under  date  of  July  3,  1922,  has  issued  a  pamphlet  dealing 
with  the  wage  questions  at  issue. 

From  the  United  States  Railroad  Labor  Board  have  been  received 
Decisions : 

No.      982,  Railway  Employes'  Department,  A.  F.  of  L.   (Federated  Shop 
Crafts)  vs.  Indiana  Harbor  Belt  Railroad  Company    (Chicago, 
1922,  pp.  12). 
No.    1028,  Alabama    Sf    Vicksburg    Railway    Company    et    al.    vs.     United 
Brotherhood   of   Maintenance    of    Way    Employes    and   Railway 
Shop  Laborers  et.  al..  Effective  July  1,  1922  (pp.  45). 
No.    1036,  Alabama    ^    Vicksburg   Railway    Company    et    al.    vs.    Railway 
Employes*  Department,  A.  F.  of  L.   (Federated  Shop   Crafts) 
et  al..  Effective  July  1,  1922  (pp.  45). 
No.    1074,  Alabama  t^-  Vicksburg  Railway  Company  et  al.  vs.  Brotherhood 
of  Railway  and  Steamship   Clerks,  Freight  Handlers,  Express 
and  Station  Employes  et  al..  Effective  July  1,  1922  (pp.  67). 
The  following  public  utility  reports  have  been  received : 
Tenth  Annual  Report  of  the  Public  Utilities  Commission  of  Connecticut 
(Hartford,  1922,  pp.  795). 

Eighth  Annual  Report  of  the  Public  Utilities  Commission  of  Idaho,  from 
July  1,  1920  to  June  30,  1921  (Boise,  1921,  pp.  250). 

Report  of  the  Public  Service  Commission  of  Maryland  for  the  Year  1921 
(Baltimore,  1922,  p.  518). 

Report  of  the  Public  Service  Commission  for  the  First  District  of  the 
State  of  New   York  for  the   Year  Ending  December  31,  1918.     Vol.   II, 
Statistics  of  Public  Service  Corporations  (New  York,  pp.  979). 

Labor 

The  federal  Bureau  of  Labor  Statistics  has  issued: 
No.   290,  Decisions   of   Courts   and   Opinions   Affecting  Labor,   1919-1920, 

by  Lindley  D.   Clark  and  Martin  C.   Frincke,  Jr.    (Washington, 

pp.  477). 
No.   293,   The  Problem  of  Dust  Phthisis  in  the  Granite-Stone  Industry,  by 

Frederick  L.  Hoffman  (pp.  178). 


566  Documents  and  Notes  [September 

No.  297,  Wages  and  Hours  of  Labor  in  the  Petroleum  Industry,  1920 
(pp.  163). 

No.  301,  Comparison  of  Workmen's  Compensation  Insurance  and  Adminis- 
tration, by  Carl  Hookstadt  (pp.  194). 

No.  303,  Use  of  Federal  Power  in  Settlement  of  Railway  Labor  Disputes, 
by  Clyde  Olin  Fisher  (pp.  121).  Gives  an  historical  survey  of 
the  law  of  1888,  Pullman  strike  of  1894,  the  Erdman  and  New- 
lands  acts,  the  Adamson  law,  and  the  Transportation  act  of  1920. 
The  Children's  Bureau  of  the  United  States  Department  of  Labor  has 

published : 

No.      98,  Child  Labor  and  the    Work   of  Mothers   in    Oyster   and   Shrimp 
Canning  Communities  on  the   Gulf  Coast,  by  Viola   I.   Paradise 
(pp.  114). 
No.   102,  Children  of  Wage-Earning  Mothers,  a  Study  of  a  Selected  Group 
in  Chicago,  by  Helen  Russell  Wright  (pp.  92). 

The  Women's  Bureau  of  the  United  States  Department  of  Labor  has 
issued  bulletin  no.  21,  Women  in  Rhode  Island  Industries,  a  Study  of  Hours, 
Wages,  and  Working  Conditions  (pp.  73). 

Among  state  reports  dealing  with  labor  are  to  be  noted: 

Fourth  Annual  Report  of  the  Minimum  Wage  Board  of  the  District  of 
Columbia,  for  the  Year  Ending  December  31,  1921  (Washington,  1922, 
pp.  46). 

Eleventh  Biennial  Report  of  the  Department  of  Commissioner  of  Labor 
and  Industrial  Statistics  of  the  State  of  Louisiana,  1921-1922  (New  Orleans, 
1922,  pp.  193). 

Anmial  Report  of  the  Department  of  Labor  and  Industries  of  Massa- 
chusetts for  1921  (Boston,  1922,  pp.  108). 

Trcenty-eighth  Annual  Report  of  Factory  Inspection  for  Rhode  Island 
(Providence,  1922,  p.  79). 

Money,  Prices,  Credit,  and  Banking 

The  United  States  Department  of  Labor  announces  that  a  complete  re- 
vision has  been  made  of  its  series  of  index  numbers  showing  changes  in 
the  level  of  wholesale  prices.  This  revision  consists  in  (1)  a  regrouping  of 
the  commodities  and  the  addition  of  a  considerable  number  of  ordinary 
articles;  (2)  the  use  of  the  1919  census  data  for  weighting  purposes  in 
place  of  the  1909  census  data  formerly  employed.  The  Bureau  of  Labor 
Statistics  has  issued  cyclostjded  sheets  showing  revised  index  numbers. 

Better  Banking  under  the  Federal  Reserve  System  is  a  fourteen  page 
pamphlet  distributed  at  a  nominal  price  by  all  federal  reserve  member  banks, 
which  should  be  found  useful  in  connection  with  elementary  courses  in 
economics.  In  simple  language  the  essential  features  of  banking  under  the 
federal  reserve  system  are  described.  The  services  banks  render  their 
customers;  the  aid  the  twelve  federal  reserve  banks  extend  to  their  member 
banks  and  to  each  other;  the  functions  of  the  Federal  Reserve  Board;  the 
reasons  why  we  formerly  had  money  panics  and  why  we  need  fear  them  no 


1922]  Public  Finance  567 

longer;  and  other  vital  elements  of  the  American  banking  business  are 
described  and  illustrated  with  admirable  clearness.  Teachers  who  appre- 
ciate the  value  of  supplementary  material  for  their  classes  will  find  this 
pamphlet  particularly  well  adapted,  in  its  limited  field,  to  such  use. 

The  First  Joint  Stock  Land  Bank  of  New  York  has  issued  in  pamphlet 
form  Bankers  Endorse  Joint  Stock  Land  Banks,  a  reprint  from  United 
States  Investor,  June  10,  1922;  and  a  pamphlet  showing  how  borrowing  is 
made  easy  and  profitable  for  the  land  owner  (New  York,  61  Broadway). 

The  July  number  of  Commerce  Monthly  published  by  the  National  Bank 
of  Commerce  in  New  York,  contains  some  interesting  tables  prepared  by 
Mr.  O.  C.  Lockhart,  tracing  the  movement  of  banking  figures  during  the 
recent  crisis.  These  figures  are  assembled  for  country  banks  by  geo- 
graphical districts.  The  conclusion  is  that  the  generalizations  made  by  Pro- 
fessor Mitchell  in  his  book  on  Business  Cycles  that  "the  changes  experienced 
or  initiated  by  banks  are  less  prompt  and  less  considerable  in  the  country 
than  in  the  urban  centers"  are  justified  by  the  crisis  of  1920. 

The  London  Joint  City  and  Midland  Bank,  Ltd.  (5  Threadneedle  St., 
London,  E.  C.  2)  publishes  a  Monthly  Review  which  contains  valuable  data 
in  regard  to  banking  and  trade  movements. 

There  has  recently  been  established  the  publication  of  Bidetinul  Insti- 
tutului  Economic  Romdnesc,  under  the  editorship  of  Dr.  Gheron  Netta 
(Banca  Nationala  a  Romaniei,  Bucuresti). 

Among  state  reports  dealing  with  banking  are  the  following: 

Third  Annual  Report  of  the  State  Bank  Commissioner  of  Delaware,  1921 
(Dover,  pp.  80). 

Banking  Law  in  the  State  of  Illinois  (Springfield,  1921,  pp.  11). 

Annual  Report  of  the  Superintendent  of  Banks  Relative  to  Savings  Banks, 
Trust  Companies,  Investment  Companies,  Safe  Deposit  Companies,  Per- 
sonal Loan  Companies  and  Personal  Loan  Brokers,  for  1920  (Albany,  1921, 
pp.  771). 

Report  of  the  Bank  Commissioner  of  Vermont,  1921  (Montpelier,  pp. 
255). 

Public  Finance 

Report  of  the  {New  Tor/i]  Special  Joint  Committee  on  Taxation  and 
Retrenchment,  Submitted  March  1,  1922.  Legislative  Document  (1922) 
no.  72   (Albany,  pp.  383). 

Originally  appointed  in  1919,  this  committee  has,  with  the  aid  of  Pro- 
fessor R.  M.  Haig  and  a  dozen  other  well-known  economists  and  tax-lawyers, 
prepared  an  excellent  report  on  the  revenue  system  of  New  York  state. 
It  is  in  two  parts,  of  which  the  first  is  a  critical  survey,  with  recommenda- 
tions for  changes  both  in  the  kinds  of  taxes  and  the  metliods  of  assessment 
and  collection,  while  the  second  part  is  a  statistical  investigation  of  the 
tax  burden  on  corporations  of  various  sorts. 

As  a  result  of  their  investigation,  the  committee  concludes  that  public 
utilities,  except  steam  railways,  and  most  kinds  of  financial  institutions  have 


668  Documents  and  Notes  [September 

been  paying  in  taxes  a  larger  proportion  of  their  net  income  than  has  been 
required  of  business  corporations ;  and  that  the  distribution  of  the  burden 
has  been  very  unequal  even  within  each  separate  class  of  corporations. 
Small  financial  institutions  seem  to  have  been  more  heavily  taxed  than 
larger  ones,  and  electric  railways  more  heavily  than  other  public  utilities. 

To  remedy  these  inequalities,  as  well  as  to  simplify  and  make  more  pro- 
ductive the  whole  tax  system,  the  committee  makes  sixteen  recommendations 
for  immediate  action,  besides  others  not  so  urgent.  The  object  they  have 
in  mind  is  to  tax  real  estate  for  local  purposes  only;  and  to  derive  the 
state's  revenue  from  taxes  on  the  net  income  of  individuals,  supplemented 
by  business  taxes  also  imposed  on  net  income  except  in  the  case  of  public 
utilities,  where  gross  earnings  are  to  be  the  principal  basis  for  the  sake  of 
simplicity  and  steadiness  of  yield.  Of  course  the  inheritance  tax  is  to  be 
retained,  and  other  special  taxes  such  as  those  on  automobiles  and  stock 
transfers.  Part  of  the  proceeds  of  the  state-collected  taxes  is  to  be  appor- 
tioned to  the  localities  to  replace  their  present  sources  of  revenue  (special 
franchises  and  personal  property).  A  constitutional  amendment  is  pro- 
posed for  the  purpose  of  establishing  larger  tax  districts  and  centrally 
supervised  assessments.  The  collection  of  school  taxes  levied  on  the 
property  of  public  utilities  is  to  be  centralized. 

The  committee  recommends  several  changes  in  the  personal  income  tax 
law,  such  as  allowing  net  losses  to  be  set  off  in  subsequent  years,  and 
proposes  that  a  minimum  tax  of  perhaps  one  dollar  should  be  collected  from 
every  citizen  as  a  prerequisite  for  voting  or  employment.  They  do  not 
favor  the  recent  federal  charges  with  regard  to  capital  gains,  personal 
exemptions,  appreciation  in  the  value  of  gifts,  and  exchanges  of  property 
other  than  for  cash.  The  business  tax  on  net  incomes  is  to  be  imposed  on 
unincorporated  businesses  as  well  as  on  corporations,  although  the  corpora- 
tions pay  at  a  higher  rate.  Banks  also  should  be  subjected  to  this  tax  if 
the  federal  statute  is  changed  to  permit  this ;  otherwise  it  will  be  necessary 
to  reimpose  a  property  tax  on  all  moneyed  capital  at  a  uniform  rate — a 
horrid  prospect!  Even  in  the  case  of  public  utilities,  net  income  is  to  be 
considered  in  fixing  the  rates. 

It  is  proposed  to  adopt  the  Uniform  Vehicle  Tax  law,  and  in  addition 
put  a  tax  of  one  cent  per  gallon  on  gasoline.  Such  a  tax  is  now  imposed 
in  fourteen  states. 

Although  the  word  "retrenchment"  occurs  in  the  committee's  title,  the 
only  suggestions  along  that  line  are  for  economy  in  the  collection  of  fran- 
chise and  inheritance  taxes.  A  thorough  study  is  recommended  of  local 
revenues  and  expenditures,  as  it  is  thought  that  the  chief  saving  can  be 
effected  there  rather  than  in  the  state  budget. 

There  is  a  useful  digest  of  laws  of  various  states  relating  to  methods  of 
taxing  public  utilities,  and  much  other  information  of  value  to  non-residents 
of  New  York.  Citizens  of  that  state  will  be  fortunate  if  the  committee's 
recommendations  are  speedily  enacted. 

.        RuFus   S.    Tucker. 


NOTES 

The  following  names  have  been  added  to  the  membership  of  the  American 
Economic  Association  since  the  first  of  May:  . 

Amos.,  H.  N.,  98,  The  Terrace,  Wellington,  New  Zealand. 

Ball,  L.  C,  Oregon  Agricultural  College,  Corvallis,  Ore. 

Beckhart,  B.  H.,  526  West  122d  St.,  New  York  City. 

Burgess,  G.  S.,  Claremont,  Calif. 

Butt,  W.  E.,  110  West  Nittany  Ave.,  State  College,  Pa. 

Chapman,  H.  H.,  University,  Ala. 

Condit,  K.,  Tenth  Ave.  at  36th  St.,  New  York  City. 

Cooper,  F.  S.,  Box  56,  Rome,  Ga. 

Cutler,  F.  M.,  University  of  Porto  Rico,  Rio  Piedras,  P.  R. 

Dailey,  D.  M.,  822  Foster  St.,  Evanston,  111. 

Davison,  E.,  Ohio  State  University,  Columbus,  O. 

Epley,  J.  F.,  Silver  City,  New  Mexico. 

Horning,  F.  J.,  Dominion  Bureau  of  Statistics,  Ottawa,  Ont.,  Canada. 

Liming,  M.  D.,  177  Milk  St.,  Boston,  Mass. 

Loonie,  T.  J.,  HoUey,  N.  Y. 

McCort,  W.,  Anson,  Kans. 

McGoldrick,  J.,  10.58  Lafayette  Ave.,   Brooklvn,  N.   Y. 

McGuire,  C.  E.,  1520  H  St.,  Washington,  D.  C. 

Oda,  J.  K.,  1749  Sutter  St.,  San  Francisco,  Calif. 

Rai,  A.,  The  Tilak  School  of  Politics,  Lahore,  India. 

Rankin,  R.  G.,  61  Broadwav,  New  York  Citv. 

Reed,  E.  G.,  19  South  Liberty  St.,  Elgin,  111. 

Richardson,  I.  G.,  Atlas  Portland  Cement  Co.,  25  Broadway,  New  York  City. 

Rist,  C,  18  Rue  du  Pare  le  Clagny,  Versailles,  France. 

Taylor,  O.  H.,  975  Universitv  Ave.,  Boulder,  Colo. 

Turnbull,  T.,  Jr.,  835  Western  Ave.,  Pittsburgh,  Pa. 

VV^allace,  W.,  Linfield  P.  O.,  Alberta,  Canada. 

White,  W.  L.,  860  Twelfth  St.,  Boulder,  Colo. 

At  a  special  meeting  of  the  American  Statistical  Association  held  in  New 
York  City,  June  16,  discussion  was  devoted  to  the  subject,  "Some  Problems 
of  Business  Research."  Among  those  taking  part  were  Joseph  E.  Pogue, 
"Statistics  as  an  Aid  to  Management" ;  Raymond  B.  Prescott,  "A  Method  of 
Forecasting  Demand";  Walter  N.  Polakov,  "Statistical  Aids  to  Pro- 
duction"; Carl  Snyder,  "Business  Forecasting." 

Announcement  has  been  made  of  the  nineteenth  competition  for  the  Hart 
Schaffner  &  Marx  prizes,  to  be  awarded  in  1923.  Information  may  be 
obtained  from  Professor  J.  Laurence  Laughlin,  University  of  Chicago. 

Brown  University  announces  the  organization,  in  cooperation  with  the 
Providence  Chamber  of  Commerce,  of  Brown  Bureau  of  Business  Research, 
with  Professor  H.  B.  Gardner  as  a  vice-chairman  and  Professor  Ralph  E, 
Badger  as  secretary-treasurer. 

The  College  of  Agriculture  of  the  University  of  California  announces 
courses  for  the  training  of  men  for  cooperative  organization  work. 

The  Babson  Statistical  Organization,  at  Wellesley  Hills,  Mass.,  is  under- 
taking an  investigation  of  the  "path  of  business  depression"  and  the  "path 
of  business  prosperity."  This  organization  is  also  engaged  in  a  study  of 
the  proper  location  of  distribution  centers,  including  sales  offices  and  ware- 
houses for  different  lines  of  merchandise.  Among  other  activities  is  a  survey 
of  the  motion  picture  industry,  conducted  by  the  Babson  Statistical  Organ- 


570  Notes  [September 

ization  in  conjunction  with  Columbia  University  and  Motion  Picture  News. 
Over  13,000  questionnaires  have  been  sent  out.  The  staff  of  this  organiza- 
tion is  also  planning  an  extensive  price  study  of  agricultural  products  in 
an  attempt  to  ascertain  the  prospective  increase  or  decrease  in  the  purchasing 
power  of  agricultural  sections  during  the  coming  fiscal  year.  Constructive 
suggestions  in  regard  to  these  various  investigations  will  be  welcome. 

The  organization  of  the  New  England  Research  Council  to  encourage 
and  coordinate  research  work  in  problems  of  marketing  and  the  food  supply 
was  completed  on  July  29  at  Massachusetts  Agricultural  College.  Kenyon  L. 
Butterfield,  president  of  Massachusetts  Agricultural  College  was  chosen 
president  of  the  council,  and  Laurence  Bevan,  secretary  of  the  committee 
on  agriculture  of  the  Boston  Chamber  of  Commerce  was  chosen  recording 
secretary.  Colleges  and  universities,  state  departments  of  agriculture,  the 
United  States  Department  of  Agriculture  and  other  organizations  actively 
engaged  in  prosecuting  studies  in  marketing  or  the  food  supply  are  eligible 
to  membership.  The  Bureau  of  Agricultural  Economics  of  the  United 
States  Department  of  Agriculture  will  provide  a  high-grade  investigator  as 
executive  secretary,  who  will  have  headquarters  in  Boston  and  will  become 
a  sort  of  clearing  house  for  the  cooperating  agencies.  This  executive  secre- 
tary will  be  the  representative  of  the  United  States  Department  of  Agri- 
culture on  the  council.  Probably  the  first  problem  to  engage  the  attention 
of  the  council  will  be  a  study  of  the  food  supply  of  Boston.  The  basis  of 
this  study  is  a  comprehensive  outline  prepared  under  the  direction  of  Dr. 
Alexander  E.  Cance  by  the  department  of  agricultural  economics  of  Massa- 
chusetts Agricultural  College.  It  is  expected  that  Dr.  R.  J.  McFall, 
extension  professor  of  agricultural  economics,  will  begin  active  work  on  this 
study  very  soon.  The  Massachusetts  state  director  of  markets,  W.  A. 
Munson,  in  cooperation  with  Harvard  University  and  the  United  States 
Department  of  Agriculture,  has  already  conducted  some  preliminary  studies 
on  the  Boston  market. 

This  summer  the  economics  department  of  the  University  of  Wisconsin 
conducted  an  Industrial  Relations  Conference  in  charge  of  Professor  John 
R.  Commons  and  his  staff,  assisted  by  the  Industrial  Commission  of  Wis- 
consin. Among  the  subjects  considered  were  the  Origin  and  Development 
of  tlie  Industrial  Commission,  Accident  Compensation,  Industrial  Rehabili- 
tation, Accident  Prevention,  Child  Labor  Laws,  Apprenticeship  Laws,  Em- 
ployment work  of  the  Public  Employment  Offices,  and  Mediation  in  Labor 
Disputes. 

Tlie  Kingsley  Trust  Association  has  recently  given  to  Yale  University 
a  large  library  known  as  the  William  H.  Brown  collection.  This  comprises 
between  20,000  and  25,000  pamphlets,  consisting  of  railroad,  public  utility 
and  industrial  corporation  mortgages,  leases,  reorganization  plans  and 
agreements,  protective  committee  deposit  agreements,  subscription  agree- 
ments, annual  reports,  etc.  These  pamphlets  were  collected  by  William  H. 
Brown  over  a  period  of  thirty  years. 

The  Russell  Sage  Foundation  is  engaged  upon  a  comprehensive  regional 
plan  of  New  York  and  its  environs.      Printed  and  cyclostyled  material  in 


1922]  Xotes  571 

regard  to  this  study  may  be  obtained  upon  application  to  Mr.  Flavel  Shurt- 
leff,  assistant  secretary  to  the  committee. 

The  Williams  and  Wilkins  Company,  Baltimore,  is  beginning  on  behalf 
of  the  Personnel  Research  Federation  the  publication  of  the  Journal  of 
Personnel  Research,  of  which  the  first  issue  appeared  in  May,  1922.  Among 
the  articles  in  the  first  number  are  "Reasons  for  Personnel  Research,"  by 
President  Angell,  of  Yale  University;  "Development  of  Personnel  Re- 
search," by  Alfred  D.  Flinn;  "Basic  Experiments  in  Vocational  Guidance," 
by  C.  S.  Yoakum. 

Beginning  with  January  of  this  year  there  appeared  the  Economic  Bulletin 
of  Cuba,  published  monthly  at  Havana  (61  Obrapia  Street;  price,  $'4-.00 
per  annum). 

London  Municipal  Xotes  has  been  merged  with  The  Ratepayer,  "the 
journal  of  the  ratepayers',  municipal,  and  kindred  associations  whose 
object  is  economy  in  local  government"  (Palace  Chambers,  Bridge  Street, 
Westminster,  S.  W.  1). 

Administration  for  May,  1922,  has  an  article  entitled  "Executive  Train- 
ing and  the  Engineering  School,"  by  John  S.  Keir,  of  the  Carnegie  Insti- 
tute of  Technology. 

The  Journal  of  Political  Economy,  April,  1922,  contains  a  memorial 
address  on  the  late  Professor  Henry  Carter  Adams,  presented  to  the  Senate 
of  the  University  of  Michigan  by  S.  Lawrence  Bigelow,  I.  Leo  Sharfman, 
and  R.  M.  Wenley.  There  is  appended  a  bibliography  of  Professor  Adams' 
writings. 

The  National  Association  of  Cost  Accountants  (130  West  i2nd  Street, 
New  York  City)  has  cyclostyled  sheets  showing  the  list  of  its  publications 
which  are  now  available. 

The  Williams  and  Wilkins  Company,  of  Baltimore,  proposes,  if  sufficient 
support  is  forthcoming,  to  publish  the  proceedings  of  the  second  Inter- 
national Congress  of  Eugenics.  The  titles  of  the  proposed  volumes  are: 
I,  Eugenics,  Genetics,  and  the  Family;  II,  Eugenics  in  Race  and  State.  It 
is  estimated  that  $10,000  will  be  needed  to  finance  the  undertaking.  Those 
interested  in  the  publication  are  invited  to  communicate  with  the  publishers. 

D.  Appleton  and  Company  announces,  among  the  new  books  to  be  pub- 
lished for  the  Institute  for  Government  Research,  volumes  on  the  United 
States  Tariff  Commission,  the  Federal  Trade  Commission,  the  Employees 
Compensation  Commission,  and  the  Federal  Board  for  Vocational  Educa- 
tion. 

The  Institute  for  Research  in  Land  Economics  at  the  University  of  Wis- 
consin, of  which  Dr.  Richard  T.  Ely  is  director,  is  planning  a  number  of 
publications,  one  of  which  is  a  three  volume  work  in  the  land  economics 
series.  The  titles  of  the  volumes  are:  I,  Character  and  Classification  of 
Land;  II,  Costs  and  Income  in  Land  Utilization;  III,  Land  Policies.  These 
volumes  are  bound  in  mimeograph  form  so  that  they  can  be  used  tliis  coming 
year.  The  Institute  already  has  prepared  a  volume  entitled  Land 
Economics. 


572  Notes  [September     i 

The   University   of   Chicago    Press    announces    the   early   publication   of 
The  Technique  of  Business  Communication,  by  Nathaniel  W.  Barnes;  Com- 
mercial  Banking  Policies,  by  Harold  G.  Moulton;  Managerial  Accounting, 
by  J.  O.  McKinsey;  The  Manager's  Administration  of  Finance,  by  C.   O. 
Hardy  and  S.  P.  Meech;  The  Manager's  Administration  of  Risk  and  Risk-      \ 
Bearing,  by  C.  O.  Hardy;  The  Manager's  Administration  of  the  Market;     | 
by  N.  W.  Barnes,  L.  S.  Lyon  and  L.  C.  Sorrell ;  The  Worker  in  Modern 
Economic  Society,  by  P.  H.  Douglas,  C.  N.  Hitchcock  and  W.  E.  Atkins;      ' 
and  Education  for  Business,  by  Leverett  S.  Lyon.  ; 

The  Bankers  Publishing  Company  of  New  York  announces  the  early  | 
publication  of  the  reminiscences  of  Thomas  P.  Kane,  deputy  comptroller  ! 
of  the  currency,  who  has  been  for  forty  years  in  the  service  of  that  bureau. 

The  United  States  Department  of  Commerce  has  published  in  pamphlet  < 
form  a  new  edition  of  the  List  of  Publications  of  the  Department  Available  | 
for  Distribution.  ; 

Harcourt,  Brace,  and  Company  announces  the  preparation  of  volumes  on  ! 
The  Distribution  of  Wealth,  by  G.  F.  Shove,  Kings  College,  Cambridge;  ' 
Public  Finance,  by  M.  C.  Robinson,  Manchester  University;  The  Control  of  \ 
Industry,  by  Barbara  Wootton,  Girton  College,  Cambridge;  and  Population,  ' 
by  Harold  Wright,  Pembroke  College,  Cambridge.  These  volumes  are  i 
under  the  general  editorship  of  John  Maynard  Keynes.  j 

The  Chicago,  Rock  Island,  and  St.  Paul  Railroad  is  preparing  a  history     \ 
of  that  road  in  connection  with  the  celebration  of  the  seventieth  anniversary 
of  the  operation  of  the  first  train  west  from  Chicago,  in  October,  1852.  | 

I 
Appointments  and  Resignations  * 

Mr.  Juan  R.  Acevedo  comes  this  fall  to  Boston  University,  College  of  ' 
Business  Administration,  as  an  assistant  in  foreign  trade  and  secretary  to  \ 
the  economics  department. 

Mr.   Adolph  H.   Armbruster,  of   Price,  Waterhouse   Company,  has   been 
made  assistant  professor  of  accounting  at  Yale  University. 

Dr.  Abraham  Berglund,  special  expert  of  the  United  States  Tariff  Com-    | 
mission,  has  accepted  an  appointment  as  associate  professor  of  commerce  and 
business  administration  at  the  University  of  Virginia. 

Dr.  William  A.  Berridge  has  been  appointed  assistant  professor  of  eco- 
nomics at  Brown  Universitv,  and  will  teach  statistics  and  insurance.  I 
Dr.   F.   Stuart  Chapin,  professor   of   economics    and    sociology    at   Smith     i 
College   and   formerly  director   of  the  Smith    College   Training   School   for    ; 
Social  Work,  has  resigned  to  accept  an  appointment  as  professor  of  soci- 
ology, chairman  of  the  department,  and  director  of  the  training  course  for 
social  and  civic  work  at  the  University  of  Minnesota. 

Professor  John  Maurice  Clark,  of  the  University  of  Chicago,  has  been  ; 
promoted  from  the  rank  of  associate  professor  to  a  full  professorship. 

Dr.   Harry   T.   Collings,  of  the   University  of   Pennsylvania,   spent   the 
summer  in  Mexico  doing  work  for  the  Department  of  Commerce. 


1922]  Notes  573 

Professor  H.  W.  Cordell  has  been  made  head  of  the  department  of  history 
and  economics  in  the  State  College  of  Washington. 

Mr.  Arthur  C.  Coons,  of  the  University  of  Pennsylvania,  has  resigned  his 
instructorship  to  return  to  his  home  in  California. 

Mr.  Walter  J.  Couper  comes  to  Yale  University  as  instructor  in  political 
economy. 

Mr.  Thomas  S.  Craig  has  been  appointed  instructor  in  economics  at  the 
Massachusetts  Institute  of  Technology. 

Mr.  Morgan  Cushing,  instructor  in  finance  at  the  University  of  Phila- 
delphia, has  resigned  in  order  to  teach  economics  at  Bowdoin  College. 

Professor  Clive  Day,  of  Yale  University,  is  taking  a  year's  leave  of 
absence  and  expects  to  spend  most  of  it  in  travel  in  Europe. 

Dr.  Samuel  H.  De  Vault,  recently  employed  by  the  Bureau  of  the  Census 
as  an  expert  special  agent,  has  been  chosen  assistant  professor  of  agricul- 
tural economics  at  the  Agricultural  College  of  Maryland. 

Professor  Arthur  Stone  Dewing,  formerly  assistant  professor,  has  been 
given  the  rank  of  associate  professor  of  finance  at  the  Graduate  School  of 
Business  Administration,  Harvard  University. 

Dr.  Z.  C.  Dickinson,  of  the  University  of  Minnesota,  gave  courses  in 
economics  in  the  summer  school  at  the  University  of  Pennsylvania. 

Mr.  E.  F.  Dummeier  has  been  raised  to  the  rank  of  assistant  professor 
of  economics  at  Washington  State  College. 

Mr.  C.  R.  Fay,  fellow  of  Christ's  College,  Cambridge,  has  been  appointed 
professor  of  economic  history  in  the  University  of  Toronto. 

Mr.  H.  M.  Fletcher,  instructor  at  Princeton  University  during  the  past 
year,  will  be  a  graduate  student  in  Stanford  University  this  year. 

Mr.  Joseph  K.  Folsom  has  been  appointed  assistant  professor  of  economics 
at  Dartmouth  College. 

Mr.  L.  E.  Garwood,  of  Coe  College,  has  been  appointed  lecturer  in  polit- 
ical economy  at  the  University  of  Chicago. 

Professor  A.  P.  Haake,  of  the  University  of  W^isconsin,  will  begin  his 
work  as  professor  of  economics  in  Rutgers  College  this  month. 

Professor  C.  O.  Hardy  has  resigned  his  position  at  the  University  of 
Chicago  in  order  to  accept  a  professorship  in  the  School  of  Commerce  and 
Administration  of  the  University  of  Iowa. 

Mr.  S.  E.  Harris,  instructor  during  the  past  year  at  Princeton  Univer- 
sity, is  joining  the  tutorial  staff  at  Harvard  University. 

Mr.  Albert  J.  Hettinger,  Jr.,  instructor  in  the  Graduate  School  of 
Business  Administration,  Harvard  University,  has  been  promoted  to  the 
rank  of  assistant  professor  of  statistics. 

Mr.  Frank  N.  Houghton  has  been  appointed  instructor  in  economics  at 
the  Massachusetts  Institute  of  Technology. 

Dr.  M.  H.  Hunter  has  been  promoted  from  assistant  professor  to  asso- 
ciate professor  of  economics  at  the  University  of  Illinois. 


574  Notes  [September 

Mr.  Olin  Ingraham  has  been  appointed  instructor  in  economics  at  the 
Massachusetts  Institute  of  Technology. 

Mr.  W.  D.  Jordan  has  been  made  instructor  in  political  economy  at  Yale 
University. 

Professor  F.  H.  Knight,  of  the  University  of  Iowa,  has  been  raised  from 
the  rank  of  associate  professor  of  economics  to  a  full  professorship. 

Mr.  V.  W.  Lanfear,  formerly  adjunct  professor  at  the  University  of 
Texas,  has  been  appointed  assistant  professor  of  political  economy  at  Yale 
University. 

Mr.  Chester  F.  Lay,  instructor  in  the  School  of  Commerce  and  Adminis- 
tration of  the  University  of  Chicago,  has  accepted  an  appointment  to  a 
professorship  at  Robert  College,  Constantinople,  vphere  he  will  have  charge 
of  the  courses  in  business  administration. 

Mr.  Ray  V.  Leffler  returns  to  Dartmouth  College  as  assistant  professor 
of  economics,  after  a  year  spent  in  teaching  at  Yale  University. 

Mr.  D.  P.  Locklin,  of  Harvard  University,  has  been  made  instructor  in 
economics  at  the  University  of  Illinois. 

Professor  H.  L.  Lutz,  of  Oberlin  College,  served  as  special  adviser  to 
the  committee  on  tax  revision  of  the  state  of  Washington  during  the  early 
summer,  and  gave  courses  at  Stanford  University  during  the  summer  quarter. 

Mr.  Jolm  E.  McDonough  has  been  appointed  instructor  in  political 
economy  at  Yale  University. 

Professor  J.  G.  McKay  has  left  the  University  of  Wisconsin  to  begin 
work  as  director  of  higliway  economics.  Bureau  of  Public  Roads,  Depart- 
ment of  Agriculture. 

Dr.  George  B.  Mangold,  of  the  Missouri  School  of  Social  Economy,  has 
been  lecturing  on  problems  of  child  welfare  and  constructive  social  work 
at  the  University  of  California  during  the  summer  session. 

Professor  H.  H.  Maynard,  of  Washington  State  College,  gave  courses  in 
economics  at  the  summer  session  of  the  State  University  of  Iowa. 

Dr.  E.  J.  Miller  has  been  appointed  instructor  in  the  department  of 
economies  at  the  University  of  Illinois. 

Mr.  Waldo  F.  Mitcliell,  of  the  University  of  Chicago,  has  been  made  head 
of  the  newly  establislicd  department  of  economics  and  business  administra- 
tion at  Evansville  College,  Evansville,  Indiana,  with  the  rank  of  professor. 

Mr.  John  Morris,  of  the  University  of  Pennsylvania,  has  resigned  his 
instructorship  in  economics  to  accept  one  in  merchandising. 

Dr.  William  A.  Morris  has  been  promoted  from  the  rank  of  associate 
professor  to  that  of  professor  of  English  history  in  the  University  of  Cali- 
fornia. 

Professor  H.  G.  Moulton,  of  the  University  of  Chicago,  has  resigned  to 
accept  an  appointment  as  director  of  the  Institute  of  Economics,  founded 
by  the  Carnegie  Corporation.  He  will  assume  his  duties  in  Washington, 
D.  C,  in  September. 


1922]  Notes  575 

Dr.  M.  N.  Nelson  has  resigned  his  instruetorship  in  marketing  at  the 
University  of  Minnesota  in  order  to  accept  a  position  as  instructor  in 
economics  at  the  University  of  Illinois. 

Professor  Leo  D.  O'Neil,  director  of  the  Havana  Branch  of  Boston  Uni- 
versity, College  of  Business  Administration,  is  returning  to  Boston  as  head 
of  the  department  of  foreign  trade. 

Dr.  Thomas  Walker  Page,  former  chairman  of  the  United  States  Tariff 
Commission,  and  until  recently  head  of  the  department  of  economics  of  the 
University  of  Virginia,  has  resigned  from  the  University  of  Virginia  to 
join  the  staff  of  the  Institute  of  Economics  at  Washington,  D.  C. 

Dr.  E.  M.  Patterson  was  selected  by  the  American  Academy  of  Political 
and  Social  Science  to  make  a  study  of  the  Genoa  Conference  and  European 
conditions.  He  obtained  leave  of  absence  from  his  work  at  the  University 
of  Pennsylvania  and  sailed  for  Europe  in  April,  returning  the  first  of 
September. 

Dr.  Howard  Patterson,  of  the  University  of  Pennsylvania,  has  been 
promoted  from  instructor  to  assistant  professor  of  economics. 

Dean  C.  A.  Phillips,  of  the  college  of  Commerce  of  the  State  University 
of  Iowa,  gave  courses  at  the  summer  session  of  Columbia  University. 

Dr.  H.  H.  Preston  has  been  raised  to  the  rank  of  full  professor  in  the 
College  of  Business  Administration  at  the  University  of  Washington, 
Seattle. 

Professor  E.  A.  Ross,  of  the  University  of  Wisconsin,  returns  in  Sep- 
tember from  Mexico  where  he  has  been  spending  the  summer  making  a  study 
of  the  country  and  the  people. 

Mr.  William  A.  Schoenfeld  has  been  appointed  agricultural  economist  in 
the  Federal  Bureau  of  Agricultural  Economics.  He  will  have  supervision 
of  the  research  work  in  marketing,  correlating  the  activities  of  the  various 
divisions. 

Dr.  Karl  W.  H.  Scholz,  of  the  University  of  Pennsylvania,  spent  the 
summer  in  Germany  studying  German  taxation. 

Mr.  Merrill  E.  Shoup  has  been  made  instructor  in  the  department  of 
economics  at  Brown  University,  and  will  teach  in  the  field  of  industrial 
relations. 

Dr.  Earl  R.  Sikes  has  been  appointed  assistant  professor  of  economics 
at  Dartmouth  College. 

Dr.  Norman  J.  Silberling,  formerly  a  member  of  the  economics  staff  in 
Dartmouth  College,  has  been  appointed  associate  professor  of  economics 
in  the  University  of  California. 

Dr.  Mark  Smith,  special  expert  of  the  United  States  Tariff  Commission, 
has  resigned  from  the  commission  to  join  the  staff  of  the  Institute  of  Econo- 
mics at  Washington,  D.  C. 

Professor  W.  H.  Spencer,  of  the  University  of  Chicago,  has  been  raised 
to  the  rank  of  associate  professor. 

Professor  Charles  Strong  will  return  to  the  department  of  economics  of 


576  Notes  [September 

Boston  University,  College  of  Business  Administration,  carrying  work  in 
marketing  and  commercial  resources. 

Professor  Harry  R.  Tosdal,  of  the  Graduate  School  of  Business  Adminis- 
tration, Harvard  University,  has  been  promoted  from  assistant  professor 
to  professor  of  marketing. 

Mr.  J.  B.  Trant,  of  Howard  College,  Birmingham,  Ala.,  has  been  appoint- 
ed instructor  in  economics  at  the  University  of  Illinois. 

Dr.  Donald  S.  Tucker,  of  the  Massachusetts  Institute  of  Technology, 
has  been  promoted  from  the  rank  of  assistant  professor  to  that  of  asso- 
ciate professor  of  economics. 

Professor  Abbott  Payson  Usher,  who  for  the  past  two  years  has  had 
charge  of  the  work  in  industrial  history  at  the  College  of  Business  Adminis- 
tration of  Boston  University,  has  accepted  an  appointment  in  his  field  with 
Harvard  University. 

Dr.  Kossuth  M.  Williamson,  of  Wesleyan  University,  has  been  promoted 
from  the  rank  of  associate  professor  of  economics  to  a  full  professorship. 

Dr.  Joseph  Willits,  of  the  University  of  Pennsylvania,  has  been  teaching 
during  the  summer  at  the  University  of  California. 

Dr.  Philip  G.  Wright,  special  expert  of  the  United  States  Tariff  Com- 
mission, has  resigned  from  the  commission  to  join  the  staflf  of  the  Institute 
of  Economics  at  Washington,  D.  C. 

Mr.  W.  E.  Zeuch,  who  has  been  in  charge  of  research  work  on  the  business 
cycle  at  the  University  of  Wisconsin  during  the  past  year,  has  accepted 
a  position  as  instructor  in  economics  at  the  University  of  Illinois. 

Mr.  E.  H.  Downey  was  drowned  on  July  9,  1922.  Mr.  Downey  received 
his  doctorate  degree  at  the  University  of  Wisconsin  and  has  since  been 
active  in  the  field  of  workmen's  insurance.  At  the  time  of  his  death  he 
was  actuary  for  the  Pennsylvania  Compensation  Bureau. 


y'^'^ 


The 
American  Economic  Review 

VOL.  XII  DECEMBER,  1922  No.  4 

THE  ECONOMIC  PHILOSOPHY  OF  CO-OPERATION 


Taken  by  and  large  cooperators  are  long  on  practice  and  short  on 
theory.  The  contrast  is  marked  as  against  such  inveterate  theorists 
as  the  socialist  and  the  single  taxer.  These  latter  are  well  drilled  in 
the  reasons  for  the  faith  that  is  in  them,  albeit  they  have  been  able  to 
produce  but  scanty  actual  achievements  against  the  organized  oppo- 
sition of  constituted  government.  On  the  other  hand,  any  small  group 
of  persons  may  enter  on  business  ventures  after  the  cooperative  pattern 
long  before  they  are  in  a  position  to  answer  the  higher  catechism  of 
cooperative  doctrine.  Driven  to  action  as  they  feel  themselves  to  be 
by  the  pressure  of  surrounding  circumstances,  they  accept  cooperation 
as  a  mystic  formula  destined  to  usher  in  the  economic  millennium,  with- 
out in  any  real  sense  attaining  an  understanding  of  its  purposes  and 
methods.  Likewise,  misunderstanding  or  misrepresentation  of  the  real 
nature  of  the  cooperative  form  of  economic  organization  has  caused 
many  persons  outside  the  movement  to  view  it  with  quite  needless  alarm 
as  the  creator  of  monopoly  and  the  breeder  of  a  harmful  class-con- 
sciousness. A  better  common  understanding  of  the  several  distinctive 
features  of  the  cooperative  form  of  organization  is  indispensable  if 
legislative  proposals  are  to  be  correctly  appraised  and  the  various 
features  of  organization  and  practice  wisely  regulated.  The  coopera- 
tive movement  is  putting  laws  on  our  statute  books  and  giving  rise  to 
cases  in  our  law  courts.  It  is  presenting  problems  to  the  accountant 
and  calling  for  rulings  by  income  tax  officials.  It  is  entering  into 
business  relations  with  other  commercial  organizations ;  it  is  soliciting 
members  and  patrons,  and  seeking  persons  or  institutions  to  finance  its 
operations.  These  relationships  are  being  made  awkward,  uncertain, 
and  often  disastrous  because  of  a  general  failure  to  grasp  the  princi- 
ples upon  which  cooperative  organization  proceeds. 

The  movement  grew  up  out  of  the  circumstances  of  the  Industrial 
Revolution  and  was  a  reaction  against  the  early  abuses  or,  at  least, 
rigors  of  the  capitalistic  industrial  system.  Ground  between  the  upper 
and  nether  millstones  of  low  wages  and  what  by  comparison  were  high 
prices,  the  factory  hands  of  Britain,  seeking  any  and  every  path  of 
escape,  finally  found  what  seemed  a  practicable  measure  of  relief  in  the 


578  E.  G.  Nourse  [December 

establishing  of  non-profit  stores  upon  a  model  perfected  by  twenty- 
eight  weavers — the  now  famous  Rochdale  pioneers.  Three  "funda- 
mentals" are  generally  held  to  have  constituted  the  theoretical  basis  of 
their  practical  success : 

1.  Increased  efficiency  or  reduced  costs  of  service:  no  credit,  no 
solicitation,  and  gratuitous  or  nominally  paid  service  b}^  members. 

2.  Popular  distribution  of  savings  or  profits :  minimum  interest 
paid  to  invested  capital,  any  surplus  to  go  as  patronage  and  wage 
dividends. 

3.  Democratic  control,  each  member  voting  as  an  individual. 

In  spite  of  some  interaction  among  them,  these  three  premises  repre- 
sent three  salient  points  of  economic  theory  actuating  the  cooperative 
movement  as  something  distinct  among  forms  of  economic  organization. 
They  register  a  threefold  protest  against  the  costs  and  wastes  of  the 
competitive  selling  system,  against  capital  as  the  residual  claimant 
of  profits,  and  against  the,identification  of  economic  control  with  stock 
ownership  and  the  accompanying  tendency  toward  concentration  and 
autocracy. 

However  incomplete  or  confused  may  have  been  the  thought  of  the 
Rochdale  weavers  on  these  three  points  or  of  any  other  subsequent 
group  of  cooperators  unversed  in  the  lore  of  economics,  the  continued 
adherence  of  the  older  bodies  and  the  constant  accession  of  new  con- 
verts seem  to  argue  that  there  is  in  this  cooperative  philosophy  some- 
thing which  must  be  reckoned  with  as  a  factor  in  the  future  evolution 
of  our  economic  life.  Let  us  examine  the  matter  from  each  of  its  three 
aspects  in  turn. 

n 

The  first  of  the  cooperator's  three  tenets,  stated  in  its  broadest 
terms,  is  that  cooperative  business  is  more  economical  and  efficient  than 
what  he  is  pleased  sometimes  to  call  "private"  business  and  sometimes 
"competitive"  business.  Several  points  of  attack  present  themselves 
here.  Like  the  lumible  beginners  of  Rochdale  with  their  plain  little 
store  in  Toad  Lane,  most  cooperative  enterprises  dispense  with  enticing 
display  and  frequently  use  the  volunteer  help  of  their  members  to  a 
greater  or  less  extent.  The  cash  payment  plan  is  much  favored  not 
alone  because  it  simplifies  the  management  and  accounting  system  and 
cuts  down  interest  as  an  operating  expense,  but  also  because,  from  the 
standpoint  of  the  buyer,  it  protects  him  against  the  temptation  to 
spend  more  than  he  should. 

It  is  evident  that,  in  so  far  as  all  this  represents  a  curtailment  of 
actual  service,  there  is  no  increase  of  operative  efficiency,  however  much 
prices  may  be  lowered  thereby.  But  if  it  provides  the  consumer  a 
means  of  escape  from  the  necessity  of  buying,  along  with  every  article 


1922]  Economic  Philosophy  of  Co-operation  579 

which  he  purchases,  certain  appurtenant  services  which  he  is  willing 
or  even  anxious  to  forego,  but  which  have  been  inseparably  attached 
to  it  by  the  prevailing  system  of  competitive  shop-keeping  (and  which 
in  the  end  he  must  pay  for),  then  the  inauguration  of  the  new  system 
does  mark  a  real  step  in  individual  and  social  efficiency.  To  be  sure, 
if  clerks'  and  bookkeepers'  labor  be  rendered  gratis,  this  is  either 
charity  work  or  by-employment  for  the  consumer  through  which  he  is 
enabled  to  apply  his  labor  in  part  payment  for  his  food  and  clothing. 
Frequently  this  feature  of  amateur  service  is  found  ineffective  and  is 
abandoned. 

But  back  of  these  details,  which  may  seem  petty,  lies  a  more  signifi- 
cant matter,  namely,  an  attack  on  the  real  wastes  of  competition.  In 
so  far  as  the  cooperative  store  represents  the  voluntary  assembling  of 
orders  by  the  consuming  group  or  the  guidance  of  the  process  of 
market  distribution  and,  back  of  that,  of  production  itself  according 
to  the  needs  of  the  consumer,  it  proposes  a  quite  distinctive  and 
vigorous  attack  on  the  problem  of  economic  efficiency  and  social  econo- 
my. It  enunciates  the  principle  that  business  activity  should  be  a 
means  and  not  an  end.  It  brings  to  tangible  expression  the  growing 
feeling  that  our  modern  society  is  organized  too  exclusively  in  the 
interest  of  the  exploitative  tradesman  and  the  not  less  exploitative 
manufacturer.  The  cooperative  consumer  suggests  that  entrepreneur- 
ship  has  rather  gone  to  seed.  Says  he:  "The  trade  of  all  these  stores 
is  nothing  more  than  the  assembling  of  goods  to  satisfy  my  wants. 
I  am  the  only  well-informed  judge  of  these  wants  and  am  the  most 
natural  and  effective  agent  for  bringing  them  to  expression  as  the 
effective  demand  of  the  market.  If  I  pay  not  only  for  the  goods  but 
also  the  expenses  of  a  horde  of  retainers  for  all  the  the  purveyors  of 
these  goods  fighting  to  see  who  shall  have  the  privilege  of  serving  me,  I 
must  necessarily  have  less  to  eat  and  wear  in  exchange  for  the  money 
I  spend.  Why  this  duplication  of  brands  so  indistinguishable  from 
one  another  as  far  as  their  essential  qualities  are  concerned?  Why 
these  traveling  salesmen  spending  money  like  water  to  keep  one  another 
from  supplying  my  wants?  Why  these  acres  of  expensive  advertising 
matter  to  wean  me  from  a  good  and  satisfying  breakfast  food  to  one 
no  better  nor  more  satisfying,  but  possibly  a  little  more  gaily  (and 
expensively)  caparisoned  for  its  journey  to  my  kitchen?  Why  these 
redundant  merchants  and  half-idle  clerks  nominally  in  my  service?" 

Nor  is  all  this  some  strange  brand  of  economic  heresy.  The  more 
thoughtful  of  the  progressive  group  of  modern  economists  have  noted 
the  same  phenomena  and  have  deplored  "the  backward  art  of  spend- 


580  E.  G.  Nourse  [December 

ing  money"/  or  have  speculated  on  "the  consumer's  ability  to  defend 
himself."^ 

"Salesmanship"  so  called  has  become  our  god ;  and  "to  sell,"  a  cant 
phrase  connoting  ensnarement  of  the  public  in  any  connection  from 
religion  to  bathroom  fixtures.  "Buymanship,"  not  as  yet  so  called,  is 
a  natural  reaction,  and  cooperation  is  one  of  its  manifestations.  The 
pooling,  standardization,  and  rationalization  of  wants  as  the  first  step 
toward  their  more  economical  satisfaction  may  be  done  through  a  retail 
store  to  a  limited  extent ;  through  a  federation  of  such  stores  and  the 
development  of  their  own  jobbing  and  wholesale  agencies,  much  further. 
The  movement  in  Great  Britain  and  to  some  extent  on  the  Continent 
has  passed  beyond  this  stage,  and  even  the  costs  of  competition  between 
rival  manufacturers  have  been  eliminated  by  establishing  consumer- 
controlled  manufacturing  plants.  In  addition  to  the  fact  that  pur- 
veyance according  to  this  pattern  relieves  industry  of  the  cost  of  find- 
ing, stimulating,  or  proselyting  a  market  outlet,  organization  on  this 
scale  also  brings  to  the  service  of  the  consumer  the  economies  of  busi- 
ness integration.  This  can  be  and  is  done  under  private  auspices 
also,  but  the  ardent  cooperator  believes  that  the  cooperative  plan  will 
achieve  this  more  fully  than  can  be  done  otherwise  and,  still  more 
important,  that  such  benefits  as  do  accrue  will  go  as  price  reductions 
to  the  consumer  and  not  as  monoply  or  efficiency  profits  to  the  trust  or 
consolidating  agency,  whatever  it  be.  This  raises  some  far-reaching 
questions  both  of  the  theory  of  wealth  distribution  and  of  economic 
control  which,  however,  must  be  deferred  for  the  moment. 

But  before  leaving  this  phase  of  the  matter  we  should  notice  that 
the  argument  that  cooperative  organization  provides  better  economic 
service  at  lower  cost  is  adduced  by  producers  as  well  as  by  consumers. 
Says  the  farmer:  "Why  should  I  support  seven  local  livestock  buyers 
scouring  the  country  in  cars  such  as  I  could  not  afford,  each  trying 
to  get  a  little  more  than  his  share  of  a  business  that  would  profitably 

^See  article  by  this  title  by  W.  C.  Mitchell,  American  Ecoxomic  Review,  vol.  II, 
p.  269.     "Our  faults  as  spenders  are  not  wholly  due  to  wantonness,  but  largely  to 

broad  conditions   over  which  as   individuals   we   have   slight   control If   this 

work  could  be  taken  over  for  many  families  and  conducted  by  a  business  enter- 
prise it  would  be  subdivided  into  several  departments,  and  each  department  would 
have  its  own  minute  division  of  labor.  Then  there  would  be  the  commissariat  with 
its  trained  corps  of  purchasing  agents  and  chemists,  each  giving  his  whole  working 
day  to  the  buying  or  testing  of  meats,  or  vegetables,  or  groceries."  Aside  from  a 
casual  reference  to  the  possible  but  improbable  cooperative  kitchen,  Mitchell  let 
slip  the  excellent  opportunity  to  apply  his  observations  to  the  cooperative  organiza- 
tion of  consumers. 

^See  Mat f rials  for  the  Study  of  Elementarii  Economics,  pp.  374-6.  The  reading 
presented  under  this  caption  is  from  Cherington,  Advertising  as  a  Business  Force, 
and  closes  as  follows:  "The  consumer  problems  of  the  modern  advertiser  are  not 
merely  to  discover  buyers  of  goods  and  to  exploit  them.  They  are  as  intricate  as  war 
plans." 


1922]  Economic  Philosophy  of  Co-operation  581 

occupy  but  one  man?  Since  our  stock  will  all  be  shipped  from  this 
station  anyway,  is  it  not  wisdom  to  appoint  a  single  agent  who  will 
arrange  convenient  shipping  days  when  we  shall  drive  in  our  stock 
and  dispatch  it  to  market  with  a  minimum  of  effort  and  of  time  con- 
sumed?"' Horticultural  regions  have  in  numerous  instances  organized 
and  integrated  the  business  of  a  whole  producing  region  into  assembling, 
processing,  distributive,  and  jobbing  agencies  of  high  efficiency.  They 
have  eliminated  competitive  wastes  both  at  the  local  shipping  point 
and  at  the  central  and  jobbing  markets.  Furthermore,  they  are  the 
instrumentalities  of  the  producer  and  owner  of  the  goods,  and  hence 
likely  to  be  more  aggressive  in  the  effort  to  reduce  expense  and  wastage 
in  the  handling  process  and  to  improve  quality  and  enlarge  outlets 
than  is  the  middleman  who  works  on  a  commission,  assuming  always 
that  the  association  develops  a  practicable  form  of  organization  and 
is  willing  to  pay  for  technical  ability. 

To  be  sure,  the  process  of  direct  buying  by  terminal  wholesalers 
and  the  integration  of  large  distributive  companies  under  trade  rather 
than  producers'  auspices  has  given  us  a  type  of  middleman  who  pos- 
sesses all  or  many  of  these  same  virtues.'  But  aside  from  the  fact  that 
the  producer  grudges  them  the  profit  which  they  may  make  upon  the 
operation,  he  feels  that  the  fact  that  they  are  in  business  for  their  own 
profit  rather  than  specifically  for  his  service,  means  that  their  offices 
do  not  meet  all  cases  and  are  particularly  likely  to  fail  at  a  pinch. 
This  is  especially  true  in  the  case  of  a  new  producing  section  or  of  a 
new  development  in  an  older  area.  Let  us  say  that  a  small  fruit-pro- 
ducing section  has  just  been  brought  to  bearing.  The  area  is  far  from 
any  large  market,  the  product  is  perishable,  and  hence  both  risk  and 
expense  are  high.  Volume  is  not  large  enough  to  attract  a  private 
distributor.  But  success  or  failure,  the  salvaging  of  their  investment, 
or  the  continuance  of  their  life  work  may  be  at  stake  on  the  part  of 
the  growers.  Hence  it  is  argued  (and  demonstrated  in  practice)  that 
the  cooperative  association  of  producers  frequently  achieves  results 
where  private  outside  entreprencurship  fails. 

A  third  and  last  phase  of  the  argument  that  cooperative  organiza- 
tion effects  gains  in  economy  and  efficiency  touches  productive  opera- 
tions. The  modern  farmer'  finds  himself  involved  in  a  productive  pro- 
cess which,  if  efficiency  is  to  be  secured,  demands  a  variety  and  fre- 

^See  the  highly  suggestive  monograph  '•Codperalive  and  Other  Organized  Methods 
of  Marketing  California  Horticultural  Products"  by  Professor  J.  W.  Lloyd,  of  the 
University  of  Illinois,  Univ.  of  111.  Studies  in  the  Social  Sciences,  vol.  VIII,  no.  1; 
and  Nourse,  The  Chicago  Produce  Market,  ch.  4. 

■"I  speak  here  only  of  the  fanner,  although  in  theory  at  least  the  cooperative  form 
of  organization  is  applicable  also  to  industrial  processes  and  is  so  used  to  a  limited 
extent  in  printing,  textile  manufacture,  cigar-making,  iron  founding,  bakeries,  and 
the  like.     It  is  discussed  at  a  later  point  in  this  paper. 


582  E.  G.  Nourse  [December 

quently  a  size  of  capital  equipment  in  excess  of  the  carrying  capacity 
of  the  one-man  farm  and  a  labor  specialization  quite  outside  the  scope  of 
the  individual  farm  personnel/  To  meet  this  emergency,  a  whole 
host  of  cooperative  associations  organized  along  lines  of  functional 
specialization  have  developed  in  the  United  States  and  to  a  much  lesser 
extent  in  other  countries.  One  of  the  earliest  was  the  "thresher 
ring,"  which  pooled  capital  contributions  in  such  a  way  as  to  bring 
steam  power  to  the  ordinary  small  farm.  We  now  have  silo-filling  and 
power-spraying  organizations,  cow-test  associations,  sire-owning 
groups,  and  even  cooperative  budding,  pruning,  picking,  packing,  fumi- 
gating, and  in  several  cases  investigational  work.  A  wide  variety  of 
specialists  of  high-grade  trade  or  professional  competence  work  for 
cooperative  farm  groups  on  a  salary  basis.  All  these  cases  embrace 
services  which  the  producer  is  convinced  he  gets  cheaper  or  better  by 
providing  them  for  himself  on  a  cooperative  basis  or,  in  many  cases, 
which  he  could  not  get  at  all  if  he  relied  on  the  profit-seeking  enter- 
prise of  outsiders.' 

Ill 

Possibly  dearest  to  the  licart  of  most  cooperators  are  their  theories  of 
distribution.  A  cooperative  association  differs  from  the  ordinary  in- 
corporated company  in  that  profits,  instead  of  being  paid  as  a  stock 
dividend,  go  as  a  "patronage  dividend"  or  as  a  dividend  or  bonus  to 
labor,  or  both.  Capital  invested  in  the  business  is  generally  allowed 
the  going  rate  (though  sometimes  a  little  more  or  a  little  less)  but 
either  the  patron  member  or  the  laboring  member  is  viewed  as  the 
proper  residual  claimant  to  any  surplus  above  the  cost  of  supplies  and 
the  payment  of  contractual  shares  of  income.  This  has  led  to  a  rather 
common  practice  of  referring  to  cooperation  as  being  the  opposite  of 
capitalism  or  of  saying  that  cooperation  displaces  profit-making  and 
substitutes  service  as  the  motivating  force  in  business.  Cooperative 
associations  are  asserted  to  be  non-profit  bodies  and  a  non-stock  form 
of  organization  has  been  worked  out. 

In  all  this  there  is  obviously  some  tendency  to  confuse  capitalism  as 
a  distributive  category  and  "the  capitalist"  as   that  one  out  of  the 

'The  writer  has  developed  this  phase  of  tlie  matter  at  some  length  in  the  Yale 
Review,  October,   1918. 

•In  addition  to  coiiperative  undertakings  in  connection  with  his  work  as  producer, 
the  American  farmer  (and  likewise  his  European  brother)  does  a  deal  of  joint 
buying,  either  through  a  cooperative  store  in  his  market  town  or,  with  better  success, 
through  liis  elevator  or  other  shipping  organization.  Tlus  principle  of  cooperative 
supply  extends  to  services  as  well  as  connnodities  and  to  social  as  well  as  purely 
economic  requirements.  Merely  to  list  the  farmers'  telephone  lines,  farmers'  insur- 
ance, connnunity  stock  pavilions,  laundries,  ice-houses,  recreation  centers,  movies, 
and  the  like,  shows  the  variety  and  vigor  which  cooperative  organization  manifests 
in  bringing  to  the  countryman  facilities  which  would  ofl'er  no  inducement  to  profit- 
seeking  private  enterprise. 


1922]  Economic  Philosophy  of  Co-operation  583 

whole  family  of  capital  owners  who  has  acquired  exceptional  economic 
power  through  the  concentration  of  wealth  in  some  few  hands.  The 
cooperator's  actual  objection  is  not  against  capital  dividends  merely 
as  interest  at  the  market  rate  on  tangible  investment  but  against  the 
piling  up  of  such  dividends  at  an  excessive  rate,  or  against  the  capital- 
ization of  putative  earning  power  into  watered  stocks  which  shall 
thencefortli  be  claimants  before  price-governing  tribunals  or  at  the 
bar  of  public  opinion  equal  in  repute  and  authenticit}-  to  actually  paid- 
in  capital.  Granting  that,  in  the  absence  of  any  factor  of  monopoly, 
such  a  level  of  charges  cannot  be  indefinitely  maintained,  the  cooperator 
asserts  that  what  the  consumer  does  pay  should  go  to  reward  the 
worker  instead  of  being  absorbed  by  the  promoter.  His  quarrel  is 
with  the  promotional  system  on  distributive  grounds  even  as  it  was  on 
grounds  of  efficiency.  Any  dividend  distribution  of  profits  in  excess 
of  a  conservative  interest  rate  is  taken,  he  says,  from  some  more  suitable 
claimant  to  be  given  to  capital  simply  because  it  assumed  some  risk 
in  its  entrepreneurship.  But  where  producers  or  consumers  are  organ^ 
ized  cooperatively,  the  risk  is  thereby  removed  from  the  business  and 
the  claim  of  capital  can  consequently  be  reduced  to  its  competitive 
contract  share,  service  to  either  buyer  or  seller  being  thus  brought 
down  to  a  strict  cost-of-service  basis.  All  business  is  merely  the  work- 
ing of  producers  to  supply  the  wants  of  consumers.  If,  says  the 
cooperator,  we  arrange  a  straight  and  easy  channel  of  organization 
whereby  the  wishes  of  the  consumer  are  transmitted  to  producers  as 
contracts  or  orders  (much  as  in  the  custom-work  regime  wliich  preceded 
the  factory  system)  then  speculative  profits,  losses,  and  wastes  can 
be  dropped  out  of  our  future  arrangements  with  capital.  Hence,  if 
an}^  surplus  appears  in  the  operations  of  a  cooperative  association,  it 
is  viewed  as  an  overcharge  to  the  buying  patron  or  an  underpayment 
to  the  selling  patron  or  to  the  member-worker.  After  making  what 
seem  proper  deductions  for  reserve  and,  generally,  an  educational  fund, 
it  is  returned  to  the  proper  party,  or  parties,  as  a  dividend  or  refund. 
Here  arises  a  weighty  problem.  Who  is  the  "proper"  party  and 
upon  what  canon  of  judgment  is  his  nomination  based?  If  cooperation 
is  in  some  sense  (though  not  consistently  and  merely)  anti-capitalistic, 
as  we  have  seen  above,  is  it  pro-labor?  To  this  we  must  answer  that 
it  is  a  working-class  movement  and  has  generally  endeavored  to  include 
a  dividend  to  labor  along  with  that  to  patronage.  Obviously  the  dividend 
to  labor  occupies  the  center  of  the  stage  in  industrial  cooperation  or 
labor  copartnership.  However,  even  here  no  attempt  is  made  to  divide 
profits  witii  other  laborers  who  have  contributed  to  an  adjacent  stage 
of  the  complete  economic  process — by  paying  a  premium,  for  instance, 
on  raw  material  produced  by  the  miner  or  the  farmer.  Likewise,  in 
case  these  latter  organize  on  cooperative  lines,  they  are  likely  to  drive 


584  E.  G.  Nourse  [December 

as  hard  a  competitive  bargain  with  the  cooperatives  to  whom  they  sell 
as  they  would  with  the  capitalistic  employer  of  similar  workmen.  In 
both  cases  the  cooperative  group  would  be  cooperating  to  raise  labor 
rates  within  the  group  and,  if  need  be,  to  lower  them  outside  the  group. 

This  imperfect  adhesion  to  a  labor  theory  of  distribution  is  further 
noted  in  the  fact  that  the  bonus  or  dividend  to  labor,  though  still  pro- 
vided for  in  our  statute  books,  is  a  dead  letter  in  practice;  the  great 
British  Co-operative  Wholesale  Society  has  had  a  fair  share  of  labor 
troubles  and  strikes  among  the  workers  in  its  plants ;  and  producers' 
and  consumers'  societies  have  found  their  efforts  so  antagonistic  as  to 
be  unable  to  deal  together  and  hence,  in  certain  cases,  have  even  come 
into  open  conflict.  To  this  we  shall  return  under  the  discussion  of 
theories  of  control. 

In  America  it  is  cooperation  among  farmers  which  assumes  by  far 
the  chief  importance.  The  farmer  is  prone  to  argue  the  soundness  of 
cooperative  practice  on  the  ground  that  it  is  designed  to  distribute 
profits  to  him  as  a  "producer"  rather  than  to  the  middleman  or  the 
manufacturer.  Should  this  be  written  "the  capitalist  middleman"  and 
"the  capitalist  manufacturer"?  This  might  seem  clear  in  the  average 
farmer's  attitude  to  the  grain  exchange  broker  and  the  "Big  Five" 
packers,  the  Quaker  Oats  Company,  and  the  like.  However,  the  same 
farmer  is  just  as  wroth  at  the  union  wage  which  enters  into  his  stock- 
yards handling  charge  or  into  the  spread  between  the  steer  price  and 
the  price  of  beefsteak.  Taken  from  the  other  side,  the  rural  "pro- 
ducer" who  looks  to  cooperative  organization  as  a  means  of  keeping 
up  a  necessary  level  of  his  returns  is  quite  as  desirous  of  getting  a  good 
return  on  his  invested  funds  as  on  his  labor  as  such.  In  fact  it  may  be 
asserted  that  one  of  the  keenest  motives  back  of  the  present  boom  in 
agricultural  cooperation  in  the  United  States  is  the  desire  to  maintain 
the  existing  prices  of  farm  land.  There  has  never  been  any  definite 
suggestion  that  it  should  benefit  the  hired  man. 

All  in  all,  it  can  hardly  be  said  that  the  distributive  ideal  of  coopera- 
tives is  to  make  labor  as  such  the  residual  cLaimant  to  surpluses  or 
profits.      It  seeks  to  eliminate  the  whole  profits  category,'  but  in  the 

'It  seems  clear  too  that  in  the  minds  of  a  very  large  number  of  cooperatives  this 
includes  the  factor  of  differential  returns  to  personal  service  in  the  form  of  high 
"executive"  salaries  or  directors'  fat  fees.  Possibly  it  might  have  been  mentioned 
imder  the  efficiency  argument  that  cooperative  organization  abolishes  sinecures  and 
ornamental  salaries.  As  a  question  of  operative  efficiency,  the  matter  is  significant 
in  that  the  change  from  the  ])romotional  principle  to  one  of  self-service  brings 
relief  from  the  necessity  of  buying  names  which  will  carry  prestige  with  the  public. 
It  is  argued  that  people  can  better  direct  their  own  business  without  special  re- 
muneration than  pay  munificently  the  exploitative  expert  to  direct,  or  misdirect,  it 
to  some  other  end.  On  the  one  liand  we  liave  the  ancient  wheeze  to  the  effect  that 
no  self-respecting  railroad  president  can  have  his  mind  clear  and  placid  for  the 
consideration  of  great  problems  of  management  unless   freed  from  the  worries  of 


1922]  Economic  Philosophy  of  Co-operation  585 

consequent  readjustment  tliese  margins  must  be  allotted  as  benefits  to 
some  party  in  the  organization.  The  working-class  group  which  effects 
organization  on  the  cooperative  plan  may,  after  providing  a  patronage 
dividend  to  itself,  carry  its  sympathy  for  other  wage  workers  to  the 
point  of  allotting  something  to  the  payment  of  a  bonus  or  dividend  to 
labor  or  may  similiarly  divide  with  that  other  "producer,"  the  farmer 
from  whom  they  buy  supplies,  by  paying  a  better  price  for  his  wares 
than  might  be  if  they  pushed  the  advantage  of  their  bargaining  power 
to  the  last  possible  point.  So  too  the  producer  cooperator  talks  much 
of  benefiting  the  consumer  b}'^  not  exploiting  him  in  the  price  charged. 
It  must  be  admitted,  however,  that  the  practical  difficulties  in  the 
way  of  shaping  a  business  policy  to  the  advantage  of  three  or  even 
two  parties  whose  interests  are  mutually  antagonistic  have  caused  this 
fine  theory  to  give  way  to  one  less  altruistic  but  more  easy  to  expound 
and  more  simple  to  apply.  This  means  that  cooperative  features  shall 
apply  to  those  within  the  one  group  which  effects  the  organization,  but 
that  competitive  bargaining  shall  run  its  course — not  savagely  per- 
haps, but  as  effectively  as  may  be — in  their  relations  with  other  groups. 
We  might  call  this  militant  cooperation  as  against  the  Utopian 
cooperation  of  the  older  school.  It  has  led,  as  noted  above,  to  the 
dropping  of  the  labor  dividend  quite  generally  in  America,  to  factional 
differences  between  producer  and  consumer  cooperative  associations 
both  abroad  and  at  home,  and  has  raised  up  a  cooperative  cult  in 
America  which  cries  down  the  Rochdale  principles  and  exalts  the 
new  "cooperation  American  stjde,"  along  lines  of  big  business  bargain- 
ing efficiency  and  ruthlessness.      It  is  producer  cooperation,  legalistic 

the  impecunious  by  a  salary  of  $100,000  or  .$150,000  or  whatever.  On  the  other  is 
the  modern  instance  of  the  members  of  a  farmers'  elevator  association  unable  to  be 
persuaded  that  it  takes  more  than  ordinary  hired  man's  wages  to  get  a  competent 
manager  for  a  business  of  several  hundred  thousand  a  year.  Obviously  there  is  a 
golden  mean,  and  the  psychological  factor  must  be  given  due  weight.  Thanks  to  a 
genuinely  cooperative  spirit,  the  great  consumer  wholesale  societies  of  England 
have  been  able  to  retain  able  managers  at  salaries  of  four  hundred  pounds,  directing 
business  which  runs  into  the  millions. 

On  its  distributive  side,  the  coiiperators  have  a  shrewd  perception  that  exorbitant 
or  superfluous  salaries  and  directors'  or  experts'  fees  are  a  part  of  the  surplus  which 
they  seek  to  salvage  for  the  working  class.  They  view  them  as  profits  just  as  truly 
as  though  they  were  paid  as  dividends  instead  of  passing  through  the  fiction 
of  a  payroll,  for  the  sake  of  making  the  dividend  rate  sound  less,  l3ut  in  fact  of 
concentrating  still  further  the  enjoyment  of  the  surplus.  Doubtless  the  sound 
position  in  the  long  run  would  be  attained  by  bringing  the  cooperatives  up  from 
the  position  of  exploiting  the  loyal  few  for  gratuitous  service  to  the  place  where 
they  pay  the  true  competitive  rate  for  necessary  service,  and  of  bringing  down  to  the 
same  basis  those  corporate  servants  whose  competitive  wage  is  sweetened  bv  a  slice 
of  the  profits  of  the  business.  Any  such  glib  formula  quite  patently  begs  the  nice 
questions  as  to  the  real  nature  of  the  price-making  process  for  personal  services 
which  partake  of  the  nature  of  quasi-rents  and  of  the  extent  to  which  the  whole 
schedule  of  such  service  prices  depends  upon  present  institutions  of  profit-making 
and  profit-sharing  business. 


586  E.  G.  Nourse  [December 

in  philosophy,  monopolistic  in  spirit,  and  zealous  for  control  of  the 
market.  In  the  case  of  the  Associated  Raisin  Growers  of  California, 
it  has  adapted  the  voting  trust  to  its  uses  and  has  fallen  foul  of  the 
Federal  Trade  Commission  in  its  course.  It  has  clamored  for  ex- 
emption from  general  laws  prescribing  fair  practice  for  all  business, 
and  has  had  some  success  in  putting  such  exemptions  on  the  statute 
books.  Doubtless,  however,  the  present  tendency  toward  the  infusion 
of  predatory  ideas  will  in  due  time  be  repudiated  by  the  better  element, 
while  yet  retaining  the  necessary  singleness  of  purpose  and  vigor  of 
action.  Some  further  light  on  this  question  of  the  rival  claimants  to 
pecuniary  benefit  will  perhaps  be  shed  by  the  discussion  of  principles 
of  control  as  set  forth  in  the  next  section. 

IV 

The  third  of  the  chief  considerations  of  cooperative  theory  touches 
the  matter  of  business  control.  In  the  ordinary  corporation,  control 
is  in  the  hands  of  stockholders  and  tends  thus  to  be  identified  more  or 
less  specifically  with  capital  ownership.  Furthermore,  there  has  been 
a  tendency,  through  the  limitation  of  voting  power  of  preferred  stock 
and  the  general  withholding  of  the  vote  from  capitalists  whose  capital 
contribution  is  evidenced  by  bonds,  through  the  use  of  proxies,  and 
through  the  device  of  the  holding  company  and  voting  trust,  to  con- 
centrate control  in  the  hands  of  a  few.  The  original  control  group, 
likewise,  has  often  entrenched  itself  further  in  power  by  offering  any 
new  issues  of  stock  to  itself  upon  favorable  terms  or  by  transmuting 
accumulated  earnings  into  stock  dividends. 

Against  these  control  features  of  the  ordinary  stock  corporation  the 
cooperative  philosophy  sets  up  three  protestant  counterproposals  as 
follows : 

1.  All  invested  capital  should  be  put  in  the  category  of  loan  funds, 
divested  of  voting  power  or  control  over  the  affairs  of  the  association. 
Instead,  voting  power  should  go  to  menibers  duly  admitted  because  of 
their  participation  directly  in  tiie  business  to  be  done  by  the  association. 

2.  By  the  prohibition  of  proxies,  limitation  on  the  amount  of  stock 
which  may  be  held  by  an  individual,  abolition  of  holding  companies  and 
trust  arrangements,  and  the  transfer  of  governing  power  to  members, 
each  of  whom  votes  as  an  individual,  democracy  of  control  is  substi- 
tuted for  the  old  autocracy. 

3.  Instead  of  closed  stock  lists  and  mounting  dividends  or  the  cut- 
ting of  "melons"  for  the  few,  cooperative  organization  requires  a  mem- 
bership list  open  at  all  times  to  any  person  of  good  repute  who  is 
engaged  in  the  business  which  is  carried  on  by  the  association,  his 
membership  to  terminate  whenever  he  ceases  his  participation  in  the 
given  pursuit. 


1922]  Economic  Philosophy  of  Co-operation  587 

Possibly  all  this  may  most  conveniently  be  summed  up  in  the  obser- 
vation that  cooperative  organization  aims  to  perfect  a  system  of 
bringing  many  individuals  together  in  business  associations  which  will 
retain  the  personal  interest  and  responsibility  of  the  individual,  in- 
stead of  submerging  it  or  allowing  it  to  be  lost  as  is  the  case  in  the 
highly  impersonal  form  of  the  ordinary  corporation.  A  phrase  of 
wide  usage  among  cooperators  is  to  the  effect  that  the  cooperative 
association  is  a  union  of  persons,  whereas  the  joint  stock  company 
or  corporation  is  a  union  of  capitals.  Obviously  the  capital  contri- 
bution to  a  stock  company  must  have  a  personal  (or  institutional) 
owner.  But  it  has  been  one  of  the  strong  features  of  the  corporate 
form  of  business  that  it  could  make  its  appeal  to  a  large  and  widely 
scattered  public  following  on  the  basis  that  no  personal  participation 
in  the  affairs  of  the  company  is  required ;  and  it  has  been  a  rather 
notorious  fact  that  even  the  great  leaders  of  railway,  industrial,  and 
mercantile  corporations  have  in  many  cases  known  little  or  nothing  of 
railroad  operation  or  the  steel,  leather,  sugar,  or  whatever  business 
which  was  to  be  carried  on  by  the  company.  Their  contribution  has 
been  that  of  the  "financier,"  promoter,  or,  alas,  stockjobber,  and 
success  in  operation,  if  it  was  attained,  has  been  thanks  to  the  skill 
of  a  hired  manager  and  his  subordinates. 

The  cooperative  society  proposes  quite  a  different  scheme  of  things. 
It  does  not  fare  forth  into  the  world  of  ordinary  commercial  achieve- 
ment, aiming  to  derive  a  profit  from  the  carrying  on  of  business  with 
the  general  public.  Instead,  it  brings  together  a  group  of  people  who, 
having  a  common  need  of  certain  facilities,  set  up  a  mutual  service 
agency  to  operate  at  cost  under  the  personal  control  of  such  persons, 
who  themselves  contribute  the  patronage  upon  which  it  depends.  When 
the  stock  corporation  has  received  the  stockholder's  contribution  of 
capital,  it  is  practically  unaware  of  him  as  an  individual.  Deper- 
sonalized stock  floats  about  the  exchanges  and  its  ownership  may 
change  hands  a  dozen  times  a  day.  Certificates  may  be  loaned  about 
among  brokers  who  represent  short  sellers  or  may  lie  for  years  in  the 
original  investor's  strong  box,  while  "stockholders  of  record,"  though 
they  have  long  since  sold  their  holdings,  may  legally  vote  in  annual  or 
special  meetings  or  give  proxies  to  the  aggressive  minority  who  exercise 
actual  control. 

Capital  contributions  must,  of  course,  be  made  to  the  coffers  of 
the  cooperative  association,  but  the  cooperator  holds  to  the  notion  that 
"the  gift  without  the  giver  is  bare."  The  association  puts  his  personal 
participation  in  the  patronage  and  in  the  control  and  direction  of  the 
business  as  the  first  desideratum  and  makes  the  loaning  of  capital  a 
subordinate  matter,  although  it  is  felt  to  be  desirable  that  everyone 
shall   have    some    stake    in    the    capital    investment.     Hence    a    truly 


588  E.  G.  Noutse  [December 

cooperative  organization  is  one  which  consists  only  of  participating 
members  each  of  whom  makes  his  individual  business  a  part  of  the  joint 
business  of  the  society.  In  so  doing  he  must  assume  the  responsibil- 
ities as  well  as  the  prerogatives  of  voting  control  as  the  counterpart 
of  his  claim  to  enjoy  the  benefits  of  the  society's  service." 

The  fundamental  principle  of  "one  man,  one  vote"  is  sometimes 
modified  so  that  voting  is  in  proportion  to  patronage.  For  example, 
it  may  be  put  on  number  of  cows  or  weight  of  milk  in  a  dairy  associa- 
tion, or  on  trees,  acres,  or  boxes  of  fruit  in  a  horticultural  association. 
Nevertheless,  the  idea  is  tenaciously  held  that  membership  is  personal 
and  that  control  should  be  democratically  apportioned,  with  no  addi- 
tional preponderance  given  to  wealth.  Not  only  is  it  argued  that 
God  has  given  as  much  brain  power  and  ability  to  the  man  of  small 
means  as  to  the  wealthy,  but  the  self-respect  and  interest  and  loyalty 
of  each  is  preserved  and  developed  by  this  recognition  of  personal 
equality.  In  a  word  the  cooperator  believes  that  the  case  is  as  good 
for  economic  as  for  political  democracy. 

The  third  feature  of  cooperative  control  grows  out  of  this  idea  of 
personal  membership  based  upon  participation  in  the  given  pursuit. 
Just  as  political  government  extends  its  membership  and  benefits  to 
include  all  natural  growth  of  our  population  or  such  immigrants  as 
definitely  assume  the  responsibilities  of  citizenship;  just  as  the  church 
opens  her  doors  and  offers  her  ministrations  to  all  who  express  a 
willingness  to  participate  in  her  services  and  accept  her  regulations,  so 
the  cooperative  association  as  an  institution  of  service  keeps  its  mem- 
bership open  to  include  all  who  Avish  to  join  with  others  of  like  economic 
interest  under  such  a  plan  as  is  set  up  in  the  articles  of  incorporation 
and  by-laws.  Instead  of  benefits  being  concentrated  in  the  liands  of 
a  limited  group  of  stockholders,  they  are  to  be  freely  (and,  it  is  main- 
tained, equitably)  distributed  to  all  persons  actively  participating  in 
the  business.  All  outsiders  merely  seeking  a  proprietary  interest  are 
rigidly  excluded. 

'There  are  obvious  difficulties  in  carrying  this  principle  out  in  practice.  The 
best  method  with  the  cooperative  store  seems  to  be  to  sell  poods  at  prevailing  prices 
and  place  dividends  accruing  on  non-member  purchases  to  the  credit  of  such  non- 
members  for  the  purchase  of  a  share  of  stock  (or  the  issue  of  a  certificate  of 
indebtedness).  To  remain  truly  cooperative,  however,  the  store  should  deal  only 
with  persons  who  signify  their  intention  of  becoming  members.  In  the  case  of 
selling  societies  the  same  situation  arises  if  the  association  buys  the  product  from 
its  members.  If  it  be  pooled  or  handled  on  a  commission  basis,  only  members 
would  be  allowed  to  employ  the  facilities  of  the  association,  except  at  small  ship- 
ping points  where  such  a  practice  might  dei)rive  ])ersons  of  a  local  market  or  coerce 
them  into  joining.  In  such  cases  their  business  might  be  handled  on  a  service  charge 
basis.     Such  a  situation,  however,  is  unfortunate. 

"In  the  hybrid  stock-issuing  form  which  cooperative  endeavor  has  often  been 
constrained  to  take,  the  satisfactory  carrying  out  of  this  principle  has  been  difficult. 
Such   a   capital   stock   is    not   sufficiently   flexible.     Under    the    non-stock    form   now 


1922]  Economic  Philosophy  of  Co-operation  589 

With  the  passing  of  the  feudal  era,  the  day  of  freedom  of  economic 
enterprise  ushered  in  the  small  independent  business  man  with  his 
little  handicraft  shop,  his  small  store,  his  family  farm,  or  what-not. 
Note  has  been  taken  time  and  again  of  the  stimulus  to  industry,  thrift, 
invention,  political  stabilit}^,  and  social  progress  which  came  thereby. 
However,  the  progress  of  the  arts  has  been  such  as  to  call  for  larger 
and  ever  larger  operating  units,  and  in  the  process  of  constructing  them 
natural  leadership  has  given  rise  to  economic  institutions  and  legal 
forms  which  have  both  concentrated  control  to  a  degree  hardly  less 
great  (though  in  a  form  less  rigid)  than  maintained  under  feudalism. 
The  proposals  of  the  cooperatives  simply  represent  an  effort  to  devise 
a  form  of  control  which  will  permit  of  the  benefits  of  large-scale'"  organ- 
ization but  will  restore  the  independence  and  utilize  the  personal  con- 
tribution of  the  many  under  thoroughly  democratic  principles. 


To  anyone  who  is  accustomed  to  thinking  solely  in  terms  of  the 
orthodox  type  of  business  organization  and  who  has  not  read  or 
listened  to  the  words  of  cooperators,  such  exposition  as  has  been  offered 
above  presents  the  outlines  of  a  wholly  unfamiliar  economic  system. 
It  is  not,  however,  for  that  reason  merely  to  be  classed  as  what  is 
smartly  known  today  in  certain  circles  as  "Alice  economics."  The 
more  prevalent  arrangements  as  to  economic  organization  and  control 
and  the  distribution  of  wealth  enjoy  no  absolute  sanction,  and  it  is 
neither  socially  nor  intellectually  compromising  to  dally  with  these 
somewhat  revolutionary  proposals.  To  most  people  of  open  mind  the 
philosophy  of  cooperative  organization  will  no  doubt  "make  sense." 
But,  granting  that  there  is  no  more  of  a  categorical  imperative  behind 
the  patronage  dividend  than  there  is  to  support  dividends  on  capital 
stock,  we  are  constrained  to  view  our  problem  in  the  light  of  prag- 
matic tests.  Can  the  cooperatives  "get  away"  with  their  schemes  of 
business  on  a  basis  of  "equitable  association"? 

In  approaching  this  question  we  must  get  the  fact  clearly  in  mind 

that    cooperative    proposals,    if    pushed    to    their    logical    conclusion, 

amount  to  the  setting  up  of  a  new  machinery  for  the  making  either  of 

commodity  prices  to  the  consumer  or  of  the  price  of  labor   to   the 

worker.      Being  dissatisfied  with  the  economic  position  in  which  the 

rank  and  file  of  the  great  working  class  find  themselves  after  having 

possible  in  several  states,  however,  capital  contributions  can  be  readjusted  annually 
through  a  revolving  fund  evidenced  by  members'  certificates  of  indebtedness. 

^"Through  the  system  of  federation  of  local  associations  into  district  and,  in  due 
sequence,  state  and  national  units,  any  necessary  size  can  be  attained.  Cell  by  cell 
the  growth  may  proceed  from  the  individual  to  an  organization  coextensive  with  the 
industry.  The  evident  check  upon  such  development  is  to  be  found  in  the  loyalty 
and  intelligence  of  the  membership  and  the  quality  of  leadership. 


1 


590  E.  G.  Nourse  [December 

sold  their  labor,  or  the  product  of  their  labor,  in  the  labor  or  raw- 
materials  market  and  having  bought  their  subsistence  goods  in  the 
commodity  market,  they  feel  that  the  "middlemen  and  masters"  have 
developed  market  institutions  for  both  labor  and  wares  which  result 
in  an  equilibration  of  demands  and  supplies  upon  terms  favorable  to 
the  employing  and  trading  classes  but  highly  unfavorable  to  the  work- 
ing class.  The  laborer  who  adopts  the  cooperative  philosophy  feels 
that  only  by  abolishing  tlie  wage  system  and  putting  himself  in  control 
of  the  process  of  production  and  market  distribution  can  he  get  the 
full  value  of  his  labor  as  embodied  in  the  consumer  price.  The  con- 
sumer on  the  other  hand  feels  that  he  pays  more  than  the  goods  he 
purchases  are  "worth"  properly  speaking,  unless  he  sidesteps  the 
ordinary  market  system  and  supervises  the  whole  process,  appro- 
priating everything  above  the  going  or  market  price  of  the  services 
and  materials  which  enter  into  the  production  of  his  consumption  goods. 
Obviously  the  producer  cannot  achieve  economic  salvation  on  the  basis 
of  such  a  consumer's  price,  nor  can  the  consumer  take  such  a  pro- 
ducer's price  as  the  datum  plane  for  the  sort  of  economic  organization 
which  he  is  seeking."  Two  such  systems  of  relativity  based  each  upon 
the  other  would  be  as  impossible  as  to  have  two  suns  in  our  solar  system. 
It  is  a  comparatively  simple  matter  to  work  out  a  system  of  pro- 
duction and  consumption  for  a  small  co-laboring  community  in  which 
satisfactions  are  limited  to  what  can  be  produced  within  the  group  and 
each  member  gets  his  nth  of  the  product  (with  at  most  insignificant 
premiums  to  the  leaders  of  the  group  or  deductions  from  the  humblest 
members).  But  perhaps  the  chief  merit  which  cooperation  claims  over 
such  communistic  proposals  is  that  it  contemplates  the  maintenance 

"This  throws  into  clear  relief  the  distinct  economic  service  wliich  is  performed 
by  the  despised  middleman  system.  It  maintains  a  buffer  state  between  producers 
and  consumers  in  wWch  the  equating  of  supplies  and  demands  is  carried  on,  to 
the  end  of  making  prices  as  a  necessary  adjunct  to  the  transfer  of  goods.  Inci- 
dentally it  makes  prices  for  a  large  volume  of  direct  transactions  which  do  not 
pass  through  the  organized  market.  In  fact  the  success  of  such  direct  dealings  as 
we  now  have  is  dependent  to  a  large  extent  on  the  existence  of  such  markets,  since 
a  price  basis  can  thus  be  readily  arrived  at  and  any  savings  in  marketing  costs  readily 
perceived.  Even  so  there  is  likely  to  be  considerable  ill  feeling  between  the  two 
parties,  both  of  whom  wish  to  appropriate  the  whole  of  this  saving  or,  not  knowing 
what  the  handling  margins  really  are,  try  to  overreach  each  other  even  more  than 
the  middleman  does.  For  instance,  the  high  hopes  entertained  for  parcel-post 
marketing  were  dashed  in  large  measure  because  of  the  insistence  of  the  producer 
that  he  get  more  than  the  current  retail  price  and  the  equal  insistence  of  the 
buyer  that  he  get  his  goods  at  less  than  the  farmer  could  get  from  the  local  trader. 
Similar  difficulty  has  been  encountered  in  arranging  direct  sales  of  feeder  cattle  or 
of  potatoes  or  apples  from  cooperative  shipping  societies  to  cooperative  buying 
organizations.  With  this  situation  existing  when  market  quotations  are  available  and 
only  the  equitable  adjustment  of  "margins"  is  at  issue,  it  should  be  evident  how 
extremely  difficult  would  be  the  building  up  of  a  whole  valuation  process  in  such 
transactiens  in  the  absence  of  a  third-party  market  mechanism^ 


1922]  Economic  Philosophy  of  Co-operation  591 

of  present  standards  of  living  and  of  productive  efficiency  and  seeks  a 
plan  of  organization  suited  to  modern  conditions  of  minute  division  of 
labor,  extreme  geographical  specialization  of  production,  and  world- 
wide exchange.  To  do  this,  some  one  party  to  the  given  economic 
process  must  become  the  pivot  of  the  organization,  even  at  the  possible 
sacrifice  of  others.  The  real  motive  which  lies  back  of  any  proposal  to 
displace  the  manufacturing  or  trading  entrepreneur  of  the  present 
system  is  that  some  other  party  to  the  economic  process  may  put  him- 
self in  charge  and  thereafter  direct  the  system  in  a  way  which  will  give 
to  his  class  a  greater  share  in  the  benefits.  The  basic  argument  of 
cooperation  then  is  that  it  has  devised  a  new  working  machinery  which 
offers  the  legal  and  technical  possibility  of  so  doing,  under  the  direction 
and  in  the  interest  of  either  the  industrial  laborer  or  the  consumer  as 
such,  or  the  individually  organized  producer  of  market  wares,  notably 
the  farmer.  The  practical  application  of  the  cooperative  form  to  each 
of  these  three  purposes  respectively  gives  rise  to  decidedly  different 
situations  and  problems. 

In  the  earlier  days  of  cooperative  development  men  even  of  the  stand- 
ing of  John  Stuart  Miir"  entertained  a  confident  hope  that  reorganiza- 
tion under  cooperative  auspices  by  and  for  the  laborer  promised  "a 

transformation  which would  be  the  nearest  approach  to  social 

justice  and  the  most  beneficial  ordering  of  industrial  affairs  for  the 
universal  good  which  it  is  possible  at  present  to  foresee."  History 
has  belied  this  expectation,  -doubtless  because,  first,  of  the  nature  of 
our  industrial  technique  during  the  period  in  which  the  experiment  of 
labor  copartnership  was  being  tried  and,  second,  because  of  the  nature 
of  the  wage-worker  himself. 

In  the  swift  development  of  one  and  then  another  form  of  mechanical 
power  and  the  amazing  evolution  of  ever  larger  and  more  costly  ma- 
chine equipment  and  large-scale  and  complex  forms  of  business  organ- 
ization and  commercial  and  financial  institutions,  it  has  been  impossible 
for  a  new  principle  of  economic  control  and  remuneration  of  a  demo- 
cratic type  to  gain  a  foothold  in  competition  with  the  old  regime,  whose 
captains  of  industry  and  trade  and  finance  were  quick  and  daring, 
resourceful,  experienced,  and  as  it  seems  impregnably  entrenched.  The 
race  has  been  to  the  swift  and  the  battle  to  the  strong.  While  craft 
workers  may  establish  and  run  a  cooperative  shop  successfully,  the 
ordinary  mind  can  hardly  conceive  how  the  cooperative  system  could 
have  got  a  foothold  in  the  automobile  industry  or  in  the  manufacture 
of  steel  or  rubber  or  electrical  equipment.  We  have  had  cooperative 
stove  works,  printing,  baking,  and  cooperage  concerns,  and  a  very 
few  of  them  still  survive.     The  cooperative  cooper  shops  passed  with 

"Principles  of  Political  Economy,  book  IV,  ch.  7,  sec.  6. 


592  E.  G.  Nourse  [December 

the  introduction  of  barrel-making  machinery,  and  in  general  the  process 
of  industrial  integration  swallows  sub-industries  of  the  scope  best  suited 
to  cooperative  organization  and  to  erase  or  blur  craft  lines. 

Both  because  of  this  and  because  of  the  nature  of  the  laborer  him- 
self, it  is  inevitable  that  trade  unionism  as  a  militant  organization  for 
getting  a  substantial  share  in  the  fruits  of  this  increasing  productivity 
should  seem  a  swifter,  surer,  and  more  pleasing  method  to  the  labor 
rank  and  file,  and  about  all  that  was  possible  in  the  face  of  the  demands 
made  in  the  way  of  technical  management  and  capital  equipment.  The 
laborer's  lack  of  education,  self-control,  and  thrift,  as  well  as  his 
poverty,  have  militated  against  his  utilizing  the  devices  of  cooperative 
organization  to  better  his  lot,  however  sound  their  proposals  may  be  in 
and  of  themselves.  The  exponent  of  consumer  cooperation,  however, 
asserts  that  even  at  best  producer  cooperation  does  not  meet  the  situa- 
tion, because  the  producer  or  laborer  is  likely  to  prove  as  prone  as  is 
the  capitalist  manufacturer  or  trader  to  utilize  every  strength  and 
strategy  of  the  market  to  force  up  prices  in  his  own  interest,  which 
results  in  the  exploitation  of  the  consumer.  Deferring  for  the  moment 
the  question  of  the  agricultural  producer,  we  will  examine  the  consumer 
argument. 

This  is  the  prevailing  cult  of  cooperation  in  England  and  Scotland 
and  to  a  considerable  extent  on  the  Continent.  Starting  with  the 
retail  store,  it  has  integrated  jobbing,  wholesaling,  and  import  trade 
under  the  control  of  large,  organized  consumer  groups.  To  supply 
this  trade  it  long  ago  undertook  manufacture  on  a  considerable  scale, 
and  in  time  added  tea  plantations  and  wheat  lands  abroad  and  milk, 
vegetable,  and  fruit  farms  nearer  home.  The  consumer  societies 
have  their  own  steamships  and  banking  departments.  They  have  done 
a  little  coal  mining  and  are  seriously  considering  the  acquisition  of 
extensive  coal  and  iron  resources.  The  extremists  of  this  group 
believe  that  the  whole  economic  system  should  be  directed  and  controlled 
by  the  consumers,  organized  into  cooperative  societies  and  federations, 
the  motivating  force  being  always  and  only  the  community's  desire 
for  goods  as  expressed  through  their  society. 

Such  a  "cooperative  commonwealth"  is  surely  a  heroic  remedy  for 

the  admitted  "planlessness  of  production"  under  the  existing  regime. 

"One  of  the  chief  drawbacks  of  the  cooperative  plan  lies  in  the  fact  that  it  pre- 
supposes the  getting  of  capital  into  the  hands  of  the  members.  It  is  all  very  well 
to  point  out  that  capital  goes  through  a  continuous  process  of  reproductive  in- 
crease, i.  e.,  is  accumulated  from  the  profits  of  the  business  itself  and  hence  does 
not  demand  that  the  workers  secure  it  from  outside  or  save  it  out  of  present  wages. 
But  what  they  are  after  is  an  immediate  increase  of  their  wages  and  it  is  a  hard 
matter  to  educate  them  all  up  to  the  point  of  being  satisfied  with  putting  these  profits 
back  into  the  business  until  such  time  as  they  have  it  suitably  capitalized  and  are 
able  to  enjoy  the  larger  return. 


1922]  Economic  Philosophy  of  Co-operation  593 

It  implies  a  regimentation  of  the  worker's  conduct  which  would  doubt- 
less prove  highly  distasteful,  and  would  threaten  the  development  of  a 
bureaucracy  which  would  be  both  distasteful  and  dangerous.  It  may 
be  confidently  predicted  that  the  animosities  it  would  provoke  and  the 
blunders  it  would  commit  would  check  a  growth  so  great  as  really  to 
threaten  the  present  system  of  entrepreneurship.  It  would  in  fact 
pass  from  the  realm  of  voluntary  association  to  one  of  coercive  social- 
ism. It  is  frankly  recognized  as  such  by  its  advocates,  who  expect 
such  public  utilities  as  railways,  steamships,  and  the  telegraph,  which 
are  inherently  unsuited  to  a  cooperative  adjustment  of  charges,  to  be 
taken  over  by  the  state,  thus  dividing  the  field  between  state  socialism 
and  socialism  of  the  consumer  society  pattern.  "In  this  way  the 
cooperative  movement  would  become  recognized  as,  what  it  in  fact  is, 
the  industrial  wing  of  the  democratic  state."" 

The  accomplishment  of  any  such  comprehensive  result  is,  as  most 
consumer  cooperators  themselves  admit,  confronted  b}-  an  arrav  of 
difficulties  both  internal  and  external  which  may  well  prove  insuperable. 
The  steamship  development  alluded  to  above  has  proved  ill  advised 
and  Canadian  wheat  growing  will  doubtless  be  found  not  less  so. 
Whether  as  a  result  of  the  stimulus  produced  by  the  remarkable  devel- 
opment of  cooperative  stores  in  England  or  due  to  the  natural  process 
of  business  evolution,  merchandising  improvements  such  as  chain  stores 
are  giving  the  cooperatives  keen  competition  in  the  matter  of  net  prices, 
without  making  similar  outside  demands  upon  the  patron's  support. 
All  in  all,  it  seems  likely  that  there  may  have  to  be  a  shortening  of 
the  far-flung  line  of  attack  upon  the  existing  economic  organization  if 
consumers'  cooperation  is  to  hold  its  own  in  that  territory  which  would 
seem  distinctively  to  belong  to  it.  Even  so,  its  permanent  presence 
and  aggressive  ideals  of  economy  and  service  should  prove  an  invaluable 
spur  to  other  agencies  and  an  abiding  safeguard  against  undue  exploit- 
ation or  inefficiency.  At  the  same  time  that  the  consumer  cooperators 
are  establishing  and  keeping  open  this  alternative  channel  between 
the  consumer  and  the  great  centers  of  haut  commerce,  the  agricultural 
producer  can  advantageously  avail  himself  of  this  same  cooperative 
form  to  open  and  maintain  a  channel  from  his  farm  to  the  factory 
or  the  wholesale  or  even  retail  market,  challenging  all  other  forms  of 
organization  in  point  of  efficiency  and  service. 

VI 

It  is  in  its  third  field,  agriculture,  that  the  attempt  to  applv  the 
cooperative  form  of  organization  to  modern  economic  needs  and  prob- 
lems has  been  by  all  odds  the  most  important  in  America — both  Canada 

"Woolf,  Cooperation  and  the  Future  of  Induntry,  p.  115. 


594  E.  G.  Nourse  [December 

and  the  United  States.  Agricultural  cooperation,  of  course,  does 
not  mean  cooperative  farming.  The  latter  is  a  sickly  growth  found 
only  in  the  hothouse  atmosphere  of  a  few  fanatic  colonies.  Agricul- 
tural cooperation  means  the  association  of  farmers,  stockmen,  orchard- 
ists,  or  the  like  for  the  joint  performance  of  certain  parts  of  their 
business  which  cannot  be  satisfactorily  carried  on  alone.  Its  theoret- 
ical implications  are  not  precisely  the  same  as  those  of  either  con- 
sumer cooperation  or  labor  copartnership.  The  chief  difference  is 
that  the  point  of  view  here  is  preeminently  that  of  functional  reorgan- 
ization rather  than  comprehensive  economic  regeneration.  We  have 
noted  that  the  advocates  both  of  consumer  cooperation  and  of  labor 
copartnership  would  displace  the  existing  market  or  competitive  system 
of  price  making  and  would  fund  economic  organization  in  the  interest 
of  some  ideal  adjustment,  aspiring  ultimately  to  consumer  socialism 
in  the  former  case  and  guild  socialism  or  syndicalism  in  the  latter. 
Somewhat  paradoxically,  the  farmer  proposes  to  use  the  same  structure 
for  the  opposite  purpose.  Being  a  self-employed  worker,  generally 
a  capitalist  of  parts,  and  frequently  the  employer  of  a  few  additional 
wage  hands,  he  seeks  to  keep  the  freedom  of  personal  initiative  and 
looks  to  cooperative  joining  of  these  small  operating  units  as  a  means 
of  enabling  him  to  hire  special  labor  or  secure  special  capital  equip- 
ment most  advantageously.  Taking  the  essential  facts  of  the  market 
as  he  finds  them,  he  seeks  merely  to  put  himself  in  the  most  effective 
position  with  reference  to  it. 

A  moment's  reflection  must  suffice  to  show  that  the  cooperative 
faction  in  agriculture  is  the  conservative  wing  of  the  industry.  This 
bourgeois  element  sees  in  the  cooperative  association  merely  a  new 
legal  form  peculiarly  adapted  to  the  needs  of  modern  agricultural 
industry.  Using  this  form,  it  seeks  to  organize  such  a  range  of  activi- 
ties as  can  be  effectively  integrated  and  to  distribute  the  economic 
benefits  of  this  efficiency  so  broadly  and  equitably  as  to  insure  the 
prosperity  of  the  whole  body  of  family-farm  operators.  There  is  no 
attempt  to  introduce  any  distinctively  new  principle  of  industrial 
guidance  such  as  is  proposed  in  the  elaborate  scheme  of  consumer 
cooperation.  But  it  is  proposed  to  put  the  individual  members  of 
our  agricultural  industry  in  an  economic  position  compatible  with  the 
demands  of  modern  economic  life  both  as  to  productive  efficiency  and 
as  to  distributive  justice.     Possibly  the  keynote  of  the  philosophy  lies 

"This  is  far  from  meaning  tliat  farmers  are  satisfied  with  existing  commodity 
prices,  or  even  with  the  present  operation  of  tlie  market  mechanism.  The  farmers' 
cooperative  movement  does,  however,  accept  the  essential  necessity  of  prices  being 
struck  by  the  equilibrium  of  demands  and  supplies  in  the  market.  Tlieir  proposals 
for  the  modification  of  their  supply  relationship  to  this  market  and  the  allocation 
of  these  values  among  their  members  are  worth  a  detailed  examination  such  as  is 
quite  impossible  here. 


1922]  Economic  Philosophy  of  Co-operation  595 

in  the  idea  that  a  means  must  be  found  for  giving  agriculture  a  type 
of  organization  whose  productive  and  bargaining  units  respectively 
will  expand  in  step  with  the  growing  needs  of  the  agricultural  technique 
(and  its  accompanying  capital  demands)  and  of  the  size  requisite  to  an 
effective  bargaining  position  in  contact  with  the  units  of  commercial 
organization  with  which  they  must  deal. 

Thus,  for  example,  the  live-stock  grower  feels  that  he  must  consoli- 
date the  selling  function  to  the  extent  which  will  put  him  on  a  parity 
in  all  the  great  stockj'^ards  markets  with  the  consolidated  buying  power 
connoted  by  the  existence  of  the  "Big  Five"  packer.  The  dairymen 
likewise  first  devised  the  local  creamery  as  an  effective  means  of  meeting 
the  competition  of  the  small  private  creamery  characteristic  of  the 
time.  Today,  however,  the  competition  which  they  must  meet  is  that 
of  the  great  centralizer  creameries,  whicli  advertise  their  product  direct 
to  the  consumer  and  carry  their  selling  clear  through  to  the  retail 
grocer.  This  must  be  met  by  a  distributing  organization  of  equal 
scope,  which  implies  federation  of  the  cooperative  creameries  of  a  region 
embracing  a  whole  state  or  several  states  or  parts  of  states  in  a  pro- 
ducing section.  Such  a  development  puts  the  solidarity  of  a  group 
above  the  selfish  interest  of  the  individual  and  its  successful  working 
demands  team  work  and  a  spirit  of  self-reliance  which  expresses  the 
belief  of  the  cooperating  group  that  together  they  can  work  out  their 
own  salvation  in  their  relations  with  other  groups  and  interests.  The 
cooperative  clings  to  the  belief  that  these  wholesome  results  can  be 
secured  by  voluntary  and  democratic  association.  While  mildly,  one 
might  say  stimulatingly,  class-conscious  he  is  by  no  means  socialistic 
in  his  thought  as  is  the  radical  rural  faction  in  the  less  economically 
secure  (though  not  fully  proletarian)  left  wing  which  confesses  itself 
beaten  unless  it  can  effect  some  improbable  affiliation  with  industrial 
labor  or  be  gathered  to  the  bosom  of  state  socialism  after  the  pattern 
of  the  Non-Partisan  League  or  otherwise. 

So  independent  and  vigorous  in  fact  is  the  philosophy  of  agricultural 
cooperation  that  consumer  cooperators  are  prone  to  charge  it  with 
being  no  less  exploitative  than  any  regular  capitalist  producer.  Doubt- 
less this  is  in  some  measure  a  real  danger,  as  may  be  deduced  from  a 
study  of  some  of  the  advertising  matter  and  legislative  activities  of 
certain  cooperative  marketing  associations.  But  any  attempt  com- 
pletely to  avoid  this  danger,  such  as  the  proposal  of  consumer  coopera- 
tion that  production  should  limit  itself  to  the  passive  role  of  filling 
orders  for  the  consumers'  society,  leads  us  into  a  danger  no  less  real 
that  enterprise  will  be  stifled  and  technical  progress  slowed  down  if  the 
producer  is  restricted  in  his  opportunity  of  invention,  discovery,  and 
productive  pioneering.  Agricultural  cooperation  keeps  the  spur  of 
competitive  enterprise  and  stimulative  salesmanship  but  also  puts  the 


596  E.  G.  Nourse  [December 

actual  producer  in  a  position  of  prompt  and  sensitive  response  to  the 
reaction  of  the  consumer  public.  Accepting  the  arbitrament  of  the 
competitive  market  and  the  challenge  of  other  systems  of  economic 
organization,  following  other  methods  and  appealing  to  other  motives, 
the  cooperative  agriculturists  insist  that  under  many  circumstances 
and  for  many  of  the  total  number  of  farmers  the  modifications  of  the 
older  business  forms  which  they  are  introducing  contribute  to  the 
progressiveness,  flexibility,  and  wholesomcness  of  our  economic  organ- 
ization. 

Although  the  danger  of  monopoly  in  any  particular  line  of  agri- 
cultural production  is  practically  negligible  in  a  country  whose  nat- 
ural resources  are  so  far  from  exhaustion  as  our  own  and  in  which 
any  producer  is  able  to  alter  his  lines  of  production  so  freely,  the 
cooperative  movement  sets  up  specific  safeguards  against  even  this 
slight  danger.  One  of  the  fundamental  requirements  of  the  coopera- 
tive form  of  organization  is  that  membership  lists  shall  be  freely  open 
to  all  persons  possessing  a  direct  participating  interest  in  the  given 
activity  which  it  is  proposed  to  organize  under  the  cooperative  form. 
If  this  principle  be  strictly  adliered  to,  the  only  danger  of  monopoly 
would  be  such  as  might  be  created  by  the  industry  as  a  whole  through 
tariff  enactments  or  restrictive  internal  legislation.  Although  coopera- 
tives as  well  as  others  might  participate  in  such  movements,  its  sins 
could  not  be  laid  at  the  door  of  cooperative  organization  as  such. 

This  being  true,  then  cooperation  of  the  producer  pattern  can  well 
claim  to  benefit  tlie  consumer  as  well  as  the  producer.  Stated  in  terms 
of  the  distributive  process,  cooperative  organization  enters  a  world  in 
which  it  finds  certain  profits  accumulated  (as  it  thinks,  unduly)  in  the 
hands  of  processers  and  traders.  These  it  distributes  to  its  producing 
members,  along  with  any  furtlier  efficiency  profits  which  it  can  secure 
by  its  improvement  of  business  or  technical  methods.  Such  accessions 
to  the  grower's  price  have  a  stimulative  effect  on  production,  with  a 
consequent  lowering  of  the  consumer's  price.  Actual  experience  dem- 
onstrates that  this  reaction  of  better  net  returns  upon  enlarged  pro- 
duction often  creates  a  danger  of  declining  prices  so  great  as  to 
threaten  to  wreck  the  cooperative  associations.  Certainly  it  provides 
a  powerful  stimulus  to  the  association  to  devise  further  economies  of 
methods  which  will  enable  them  to  maintain  the  level  of  net  returns 
to  the  grower.  Such  competition  also  spurs  the  private  agency  to 
outdo  the  coo})erative  in  its  cfliciency  in  order  to  liold  its  business. 
Hence  the  argument  that  consumer  as  well  as  producer  could  expect 
to  benefit  from  the  establishing  of  a  cooperative  organization  under 
sound  business  management  capable  of  handling  a  significant  fraction 
of  each  principal  farm  product,  thus  providing  an  alternative  channel 
between   producer    and    consumer,    thereby    at    least    establishing    the 


1922]  Economic  Philosophy  of  Co-operation  597 

plane  upon  whicli  competitive  forces  shall  operate.  The  farmer's 
need  of  capital  in  his  own  business  dictates  that  he  go  no  farther  afield 
than  necessary  in  marketing  or  processing  undertakings/" 

Agricultural  cooperation  offers  to  the  inherentl^^  decentralized  in- 
dustry of  agriculture  a  workable  and  expansible  scheme  of  organization 
designed  to  set  up  an  agency  for  the  progressive  study  and  adjust- 
ment of  the  larger  problems  which  are  being  forced  upon  this  industry 
by  the  inescapable  processes  of  our  economic  evolution.  If,  as  Mill 
suggests,  the  goal  which  we  are  seeking  is  to  raise  the  rank  and  file 
of  our  workers  to  a  position  where  they  are  also,  in  the  largest  measure 
possible,  owners  of  that  share  of  the  productive  capital  of  society 
which  is  employed  in  their  industry,  we  should  look  upon  agricultural 
cooperation,  conserving  as  it  does  (and  in  time  extending)  the  present 
highly  desirable  combination  between  capitalist  and  labor  role  of  the 
American  farmer,  as  a  movement  to  be  carefully  fostered  and  directed 
into  channels  of  practical  success  as  well  as  social  helpfulness.  Like 
other  evolutionary  processes  its  future  course  depends  largely  on  the 
quality  of  its  leadership.  To  analyze  the  issues  intelligently  and  help- 
fully would  be  a  service  which  the  economist  might  well  feel  himself 
called  upon  to  undertake. 

E.  G.  NouRSE. 

Iowa  State  College. 

''In  this  connection  it  may  be  said  that  the  peculiar  cliaracter  of  agricultural 
cooperation  as  a  small  capitalist  movement  protects  it  against  the  very  danger  which 
is  greatest  in  the  case  of  cooperative  organization  in  other  departments  of  pro- 
duction, notably  the  proposals  of  labor  copartnership,  ;.  e.,  the  likelihood  that  the 
capital  fund  necessary  for  present  efficiency  and  future  progress  may  be  gradually 
dissipated  by  a  process  of  nibbling  on  the  part  of  workers  who  are  anxious  to  enjoy 
the  full  returns  of  prosperous  periods  without  adequate  provision  for  unprosperous 
years  and  the  inevitable  depreciation  of  the  productive  plant.  The  farmer  has 
grown  up  in  a  hard  school  of  self-denying  business  experience  in  which  he  has  been 
forced  to  put  current  returns  which  came  into  his  own  hands  back  into  the  business 
even  at  the  expense  of  a  rather  pinched  consumptive  standard.  Therefore,  as  a 
matter  of  practical  business  success,  the  farmer  is  likely  to  be  relatively  a  safe  man 
to  entrust  with  the  administrtition  of  such  capital  funds  except  in  so  far  as  the 
claims  of  his  own  farm  business  may  run  counter  to  the  remoter  interests  of  the 
joint  enterprise. 


A  UNIQUE  SITUATION  IN  ECONOMIC  THEORY 

There  is  a  widespread  conviction  on  the  part  of  economists  today 
that  the  literature  of  the  last  two  decades,  and  especially  since  the 
Great  War,  has  been  critical  in  tone,  calculated  to  brush  aside  old 
convictions,  to  undermine  former  beliefs,  but  not  notable  for  successful 
attempts  at  reconstruction.  This  conviction  of  course  is  not  peculiar 
to  the  present  age,  nor  even  to  economists.  Indeed,  as  history  shows, 
thought  moves  in  ascending  and  descending  curves,  one  group  of  investi- 
gators building  up  what  the  next  is  certain  in  large  part  to  tear  down. 

It  is  not  surprising,  then,  that  during  the  last  few  years  scientists 
and  philosophers  in  many  fields  have  recanted  solemnly,  sometimes  even 
exultanth^,  what  earlier  thinkers  had  affirmed  with  equal  vigor.  On 
all  sides  criticism  has  been  rife  against  inherited  faith.  Mathema- 
ticians for  instance  have  gained  fame  for  innovations  that  smack  of 
charlatanry,  although  they  are  anything  but  that.  Ph3'sicists  and 
chemists  have  joined  in  ridding  their  treatises  of  doubtful  points.  Be- 
tween some  sciences  boundary  lines  have  been  shifted,  or  declared  non- 
existent. In  other  sciences  totally  new  problems  stand  forth.  Econo- 
mists share  this  unrest  in  proposing  alterations  which  must  prove  fatal 
to  two  dominant  types  of  analysis,  utilitarianism  (or  classicism,  to  use 
the  older  term)  and  marginism,  Avhich  together  fill  a  century  of  eco- 
nomic research. 

More  and  more,  economists  have  protested  against  eighteenth  cen- 
tury premises  in  psychology  and  government.  More  and  more,  they 
have  been  willing  to  disavow  their  former  faith  in  sensationalism  and 
associationism,  the  chief  pillars  of  British  empirical  psychology.  That 
margins  are  a  real  key  to  exchange  values,  that  psychologj'^  has  a  place 
in  economics,  that  the  intellectualistic  theor}^  of  the  feelings  contains 
even  a  semblance  of  truth — these  old  teachings  have  been  attacked  by  a 
growing  number  of  earnest-minded  students,  not  all  of  whom  are  young 
in  years  or  by  temperament  disposed  to  assail  authority.  There  has  been 
a  decided  tendency  for  descriptions  of  existing  institutions  and  prac- 
tices, not  for  analysis  with  a  view  to  scientific  generalization.  Writers 
of  late  have  apparently  been  satisfied  to  depict  things  as  they  are,  to 
present  a  lucid  picture  of  business  conditions  in  all  their  phases.  To 
tell  of  these  norms  and  processes  rather  than  to  discuss  underlying 
principles  or  universal  laws  has  become  the  ideal  of  man}"^  teachers 
in  American  colleges  and  of  a  host  of  younger  specialists.  Our  college 
curricula  prosper  in  the  sign  of  Commerce  and  Finance.  Business 
administration  and  vocational  economics  dictate  not  only  school  poli- 
cies, but  also  rules  for  an  individual  sifting  of  materials  in  the  field  of 
social  science.  Some  of  our  most  promising  economists  have  left  the 
campus  to  accept  employment  in  banks,  manufacturing  plants,  or 
public  administration. 


1922]  A  Unique  Situation  in  Economic  Theory  599 

All  this  may  of  course  be  welcomed  as  proof  of  the  versatility  of  our 
economists,  or  perhaps  as  an  index  of  the  growing  appreciation  of 
expert  knowledge  by  leaders  in  industry  and  trade.  Nevertheless,  this 
interest  of  teachers  in  business  statistics,  this  enthusiasm  for  a  com- 
petitive evaluation  of  products  and  earnings,  this  neglect  of  analysis 
necessary  to  reveal  fundamental  principles — this  change  has  a  deeper 
significance  than  appears  at  first  sight.  To  illustrate  the  situation,  let 
us  note  first  that  until  now  economics  has  been  a  science  aiming  at  the 
discovery  of  laws,  professing  to  state  quantitative  relations,  and  rest- 
ing on  a  well-developed  system  of  psychology. 

The  physiocrats  to  be  sure  did  not  elaborate  a  theory  of  human 
nature  in  order  to  found  a  science;  but  they  were  convinced  of  the 
possibilit}'  of  finding  permanent  social  laws,  taking  their  cue  from 
the  epoch-making  researches  which  culminated  in  Newton's  Principia. 
What  Copernicus,  Kepler,  and  Newton  had  done  for  physical  phe- 
nomena, the  physiocrats  hoped  to  do  for  the  psychic  and  economic  field. 
Thus  a  cosmological  monism,  supported  by  a  materialistic  metaphysics, 
furnished  the  incentive  to  studies  whose  most  famous  achievement  was 
the  Tableau  Economique.  Laws  were  shown  to  exist  in  the  creation 
and  circulation  of  wealth ;  and,  because  of  this,  reform  measures  gained 
a  hearing  that  adumbrated  the  French  Revolution.  If  the  physiocrats 
did  not  succeed  in  converting  Europe  to  their  doctrine,  the  chief  reason 
was  probably  their  failure  to  connect  economics  with  a  definite  psychol- 
ogy. This  at  any  rate  was  a  peculiarity  of  the  earliest  inquiry  into 
social  laws,  and,  ever  since,  economists  have  relied  on  essentials  of 
human  nature  to  make  their  teachings  definite  and  self-consistent. 

Smith  first  introduced  theories  of  human  nature  into  an  analysis  as 
naturalistic  as  that  of  his  immediate  predecessors.  He  considered  a 
science  of  economics  possible  because  of  a  few  outstanding  traits  of  man 
which  guaranteed  self-preservation,  while  also  jDromoting  the  welfare  of 
society  at  large.  Laissez  faire  was  shown  to  be  a  sound  policy  because 
self-interest  and  sympathy  level  prices  and  incomes  and  benefit  the 
largest  number.  Smith's  work  therefore  constituted  a  theory  of  pros- 
perity as  well  as  an  exposition  of  fact.  It  was  a  picture  of  a  social 
economy  in  praise  of  the  "normal  man"  and  of  a  "natural"  price. 

Although  the  successors  of  Adam  Smith  had  much  in  common  with 
him  and  borrowed  freely  from  his  treatise,  yet  in  important  respects 
they  proceeded  independently.  For  the  Ricardian  system  was  not 
built  on  an  ethical  postulate  which  Smith  made  prominent  even  before 
writing  on  economics.  Instead,  the  theory  of  valuation  was  adapted 
directly  to  economic  ends,  so  that  it  coincided  onl}'  for  a  short  time 
with  the  moral  criterion  known  as  individualistic  hedonism.  In  other 
words,  after  Smith  economics  became  a  science  of  exchange-relations, 
a  science  of  catallactics  which  sacrificed  breadth  to  an  ideal  of  logical 


600  0.  Fred  Boucke  [December 

precision  and  neatness.  By  Malthus  and  by  James  and  John  Stuart 
Mill  (fatlier  and  son)  economics  was  transformed  into  a  compact 
system  of  thought  that  depended  upon  Hartley  and  Bentham  for  an 
explanation  of  all  mental  phenomena.  The  objective  viewpoint  of 
Smith,  of  course,  was  retained.  Prices  were  still  treated  as  expense- 
facts  or  as  quantities  of  labor  solidified  into  tangible  goods,  so  that  in 
this  as  well  as  in  the  unqualified  acceptance  of  non-interference,  the 
nineteenth  century  was  linked  with  the  eighteenth.  But  otherwise  the 
breach  between  naturalism  and  utilitarianism  (classicism  of  the 
Ricardo-]\Iill  type)  was  complete.  Smith  had  never  invoked  the  aid  of 
sensationalism ;  nor  had  he  a  clear  idea  of  a  plutology  such  as  the 
Ricardians  systematically  furthered.  Whereas  he  emphasized  pro- 
duction and  the  conditions  of  a  rising  level  of  living,  his  successors 
declared  the  central  problem  to  be  price  and  distribution.  Competitive, 
pecuniary  standards  were  employed,  the  results  being  bewildering  for 
some  purposes,  as  the  Earl  of  Lauderdale  was  among  the  first  to  show. 
Again,  beginning  with  the  classicists  in  England  and  on  the  con- 
tinent, legal  premises  were  specifically  mentioned  as  a  logical  pre- 
requisite to  catallactics ;  and,  Avhat  is  much  more  important,  John 
Stuart  Mill  added  a  methodology  for  the  social  sciences  which  has 
never  been  equalled,  and  which  did  not  suffer  greatly  at  the  hands  of 
the  marginists,  who  hoped  to  improve  so  much  on  Mill's  Principles. 
Mill,  that  is  to  say,  used  sensationalism  to  formulate  a  logic  of  eco- 
nomics, and  to  vindicate  the  individualistic  standpoint.  From  his  psy- 
chology he  derived  an  atomistic,  static  conception  of  mind  and  social 
processes.  With  the  aid  of  associationism  also  he  built  up  an  argument 
for  deduction  in  economic  inquiry.  The  difference  between  a  mechanical 
and  a  chemical  form  of  causation  seemed  decisive  to  Mill.  It  Avas 
clear  to  him  that  induction  was  of  no  avail  where  "the  separate  effects 
of  all  the  causes  continue  to  be  produced,  but  are  compounded  with 
one  another  and  disappear  in  one  total."  "This  case  it  is,"  he 
believed,  "which  for  the  most  part  eludes  the  grasp  of  our  experimental 
methods,"'  and  since  "the  effect  which  is  produced  in  social  phenomena 
by  any  complex  set  of  circumstances  amounts  precisely  to  the  sum  of 
the  effects  taken  singly  .  .  .  social  science  therefore  ....  is  a  de- 
ductive science."'  Although  his  account  of  the  matter  is  not  alto- 
gether consistent,  although  Comte's  influence  is  as  conspicuous  in  Mill's 
qualification  of  the  deductive  method  as  in  his  later  views  on  a  social 
organism  and  on  qualitative  pleasures,  yet  on  the  whole  his  methodology 
rests  on  the  sensationalism  of  his  father.  Through  Mill's  Logic  of 
1818,  utilitarian  economics  became  a  well-rounded  system  of  thought. 
Hedonism  was  the  theory  of  motivation,  if  not  of  valuation.      Values 

U.offic,  book  III,  ch.  10,  §4.. 
^bid.,  book  VI,  ch.  9,  §1. 


1922]  A  Unique  Situation  in  Economic  Theory  601 

were  objectiveh^  explained,  but,  aside  from  that,  psychology  had  com- 
pletely taken  possession  of  the  new  science  of  catallactics. 

This  implicit  reliance  upon  hedonistic  psychology  the  historical 
school  combated  in  developing  its  own  doctrines.  Because  of  its 
vigorous  protest  against  statics  and  catallactics,  as  well  as  on  other 
grounds,  the  historical  school  deserves  to  be  put  in  a  class  by  itself. 
However,  it  did  not  break  the  continuity  of  economic  thought,  because 
in  the  first  place  the  historical  school  was  in  quest  of  laws  every  bit 
as  much  as  its  opponents,  so  that  the  existence  of  a  science  of  economics 
was  not  seriously  challenged,  and  in  the  second  place  its  adherents 
proved  historians  rather  than  economists.  Whenever  the  search  for 
laws  was  diligently  carried  on,  a  conversion  to  utilitarian  economics 
in  one  form  or  another  took  place ;  in  the  other  case,  the  output  proved 
to  be  history  and  ethics  more  than  economics.  The  historical  school 
consequently  was  merely  an  interlude  in  the  development  of  catallactics, 
and  not  the  occasion  for  its  downfall.  Whatever  the  virtues  of  the 
thought  promulgated  by  Roscher,  Knies,  and  Schmoller  in  later  days,  it 
was  not  likely  to  daunt  the  friends  of  a  static,  exact  science  who  found 
one  law  after  another  and  knew  exactly  where  their  investigations  ended. 

Marginism  correspondingly  had  a  victorious  career,  not  because  it 
laid  bare  the  weaknesses  of  the  historical  school — for  that  was  easy 
and  yet  could  not  demonstrate  its  own  worth — but  because  it  agreed  at 
heart  Avith  utilitarianism  of  acknowledged  standing.  The  differences 
between  these  two  systems  have  been  exaggerated,  for  what  after  all 
distinguished  the  two.^^  It  was  not  their  psychological  premises,  for 
both  believed  in  sensationalism  and  hedonism.  It  was  not  their  metho- 
dology, for  both  Used  deduction,  statics,  catallactics,  and  cosmopoli- 
tanism. It  was  not  the  employment  of  legal  assumptions  of  freedom 
of  contract,  or  the  use  of  competitively  colored  definitions,  for  here 
again  they  were  agreed.  And  are  not  these  vital  points  in  any  eco- 
nomic creed  .'^  What  separated  utilitarianism  from  marginism  was  essen- 
tially the  difference  between  an  objective  and  a  subjective  theory  of 
valuation.  The  Ricardians,  as  stated,  analyzed  price  and  income  as 
composites  of  labor  and  money  facts.  The  idea  of  utility  was  not 
really  exploited  as  Say  had  desired  in  his  work  of  1803.  Bvit  for  the 
marginists  utility  or  want  was  the  key  to  exchange  value  in  all  its 
manifestations.  Instead  of  wants  being  a  mere  auxiliary,  they  now 
became  a  prime  cause.  Instead  of  pleasure  as  a  force  for  action  ex- 
clusively, we  now  hear  of  it  as  a  determinant  of  values  also.  Hedonism 
turned  out  to  be  a  theory  of  economic  values  as  well  as  of  motivation. 
It  is  not  surprising  that  these  striking  differences  between  the  two 
systems  were  exaggerated,  but  later  writers  will  no  doubt  be  aware 
also  of  the  substantial  agreement  between  them.  They  will  thus  em- 
phasize the  continuity  of  economic  thought,  the  persistent  search  for 


602  O.  Fred  Boucke  [December 

real  laws,  the  supremacy  of  sensationalistic  psychology  in  methodo- 
logical questions,  and  the  abstract  nature  of  the  generalizations  reached 
on  the  basis  of  the  theory  of  an  "economic  man." 

The  second  main  point  calling  for  consideration  in  a  survey  of  econo- 
mic theory  today  is  the  question  of  the  effect  which  the  rejection  of 
sensationalism  must  have  upon  economics  as  a  science  and  a  method. 
In  other  words,  if  we  abandon  the  old  psychology  and  the  logic  sprung 
in  large  part  from  it,  can  we  hope  to  make  economics  as  scientific 
as  ever?  Are  we  to  offer  a  new  qualitative  and  quantitative  analysis 
in  lieu  of  the  untenable  utilitarian  and  marginal  theories?  Will  eco- 
nomics continue  to  be  a  static,  deductive  discipline  as  before?  Or  must 
data  become  important  that  will  reconstruct  economic  methodology  as 
well  as  its  leading  doctrines  of  fact?  This  surely  is  a  fair  question 
as  critics  see  it,  a  question  which  many  have  hinted  at  in  one  way  or 
another. 

The  difference  between  a  qualitative  and  quantitative  treatment  of 
events  is  well  known  to  logicians,  and  has  always  played  a  conspicuous 
part  in  natural  science.  We  find  there  regularly  two  main  types  of 
formulas  or  laws — those  which  deal  with  events  solely,  and  those  which 
measure  also  the  relative  magnitudes  of  these  events  or  things.  In 
the  one  case  we  have  a  statement  of  things  which  recur  invariably  in 
the  same  combination  (barring  conditioning  phenomena)  and  which 
are  known  as  sequences  or  coexistences.  That  the  regularity  relates 
actually  to  the  abstract,  i.  e.,  to  events  taken  out  of  a  perceptual 
environment  enveloping  us  all,  is  true;  but  this  artificial  character  of 
our  laws  of  nature  does  not  invalidate  the  distinction  between  qualita- 
tive and  quantitative  interpretations.  Science  may  aim  at  either  one 
alone,  although  usually  it  will  be  possible  to  combine  the  two,  detaching 
the  law  itself  from  the  concomitants  which  seem  to  interfere  with  its 
operation  and  from  a  given  standpoint  may  be  called  "conditioning 
phenomena."  To  illustrate,  if  we  explain  a  thunderstorm  by  a  refer- 
ence to  wind,  humidity  of  the  atmosphere,  electricity  and  the  trans- 
mission of  sound,  we  have  virtually  stated  the  law  regarding  it.  The 
law  is  this  recurrence  of  qualities  or  things  which,  in  one  aspect, 
means  a  thunderstorm.  But  increasingly  since  the  Renaissance  the 
ideal  of  all  scientists  lias  become  exact  quantitative  correlation.  To 
disclose  the  real  nature  of  commonplaces  men  have  been  obliged  not 
only  to  show  what  sorts  of  events  went  regularly  together,  but  also  to 
ascertain  their  relative  amounts  and  their  relative  changes  of  magni- 
tude. Such  a  quantitative  analysis  is  indispensable  to  a  systematic 
subsumption  of  particulars  under  a  larger  principle,  or  to  the  practical 
applications  by  which  the  last  few  generations  have  benefited  so  enor- 
mously.    Physics  and  chemistry  for  this  reason  have  become  models 


1922]  A  Unique  Situation  in  Economic  Theory  603 

of  exact  science.  Boyle's  law  of  gases  is  an  instance  of  the  many  laws 
in  physics  comprising  qualitative  and  quantitative  relations  recurring 
without  exception,  if  properly  defined  and  measured.  In  biometrics 
quantity  is  of  first  importance,  and  the  meteorologist  would  like  to 
master  all  the  magnitudes  involved  in  his  survey,  if  he  but  could. 

As  for  utilitarianism,  both  its  qualitative  and  quantitative  analysis 
must  meet  with  our  approval,  for  it  meant  strictly  a  determination  of 
price  either  by  facts  other  than  price,  or  by  expenses  which  themselves 
were  prices  but  could  not  on  that  account  be  considered  for  a  correla- 
tion with  any  particular  price.  Its  procedure  therefore  was  correct 
as  regards  price  anah'sis.  But  it  made  the  mistake  of  adopting  sensa- 
tionalism, predicating  an  "economic  man"  to  the  exclusion  of  other 
items  in  valuation ;  and  in  addition  it  suffered  from  a  static  conception 
which  was  too  abstract  to  be  serviceable.  It  meant  a  deductive  method, 
for  one  thing,  and  a  narrow  circumscription  of  economics  for  another. 
Thus  catallactics  supplanted  the  social  economy  of  the  naturalists, 
and  the  quantitative  analysis  proved  impracticable  because  of  inevit- 
able discrepancies  between  labor-amount  and  prices. 

Marginism,  however,  was  no  improvement  on  this  system.  On  the 
contrary,  it  was  worse  in  that  it  used  a  faulty  psychology  not  only  to 
explain  absolute  value,  but  also  to  find  an  exact  quantitative  relation 
between  this  and  exchange  rates.  As  a  qualitative  study  therefore 
it  erred  seriously  in  tracing  valuations  entirely  to  sensation ;  it  mis- 
understood the  essentials  of  perception  and  judgment,  of  feelings  and 
the  ideals  of  men  indissolubly  bound  together  in  the  body  politic. 
Furthermore,  it  could  not  avoid  a  vicious  circle  when  it  insisted  upon 
reducing  wants  or  prices  to  psychic  states.  Since  these  do  not  admit 
of  measurement,  the  intensity  of  desire  and  order  of  preference  had 
necessarily  to  be  judged  by  prices  paid,  and  this  begging  of  the  question 
was  not  mitigated  by  a  resort  to  margins.  The  margins  also  needed 
explanation,  and  3^et  would  remain  a  mystery  forever  in  the  light  of 
the  unbridgeable  chasm  between  things  and  values  or  rights ! 

Today,  then,  economists  should  feel  justified  in  asking:  May  objective 
correlations  and  measurements  be  substituted  for  the  subjective  ones 
which  have  proved  such  a  dismal  failure.^  Shall  we  fill  the  gap  left 
by  the  disintegration  of  the  old  economic  creeds  .f*  And  if  so,  what 
method  must  be  further  developed  to  ensure  us  good  results.'' 

In  speaking  so  candidly,  we  need  not  ignore  other  questions  raised 
since  the  turn  of  the  century.  We  may  willingly  admit  the  force  of 
the  time-honored  argument  for  free  will,  or  for  the  radical  difference 
between  a  purely  factual  and  an  ethical  treatment  of  socio-economic 
events.  Such  puzzles  have  a  fascination  of  their  own,  to  say  nothing 
of  their  importance  to  the  philosopher.  But  we  may  for  present  pur- 
poses waive  them  or  consider  them  solved.     Thus  it  seems  incontestable 


604  O.  Fred  Boucke  [December 

that  for  the  scientist  causation  is  no  more  tlian  a  particular,  more  or 
less  arbitrary,  way  of  stating  the  interdependence  between  events 
grouped  into  a  law  of  nature.  He  merely  admits  the  regular  recur- 
rence of  events  in  groups  more  or  less  minutely  analyzed,  and  then 
applies  the  term  "cause"  or  "effect"  to  them  according  to  angle  of 
vision  and  practical  needs.  The  human  will  is  no  proof  of  an  exception 
to  the  postulate  of  determinism  or  of  the  uniformity  of  nature,  so  far 
as  our  scientific  method  is  concerned.  We  may  as  human  beings  con- 
sider our  wills  a  reality;  but  the  statistician  has  strong  reasons  for 
believing  our  freedom  to  be  limited.  There  is  regularity  in  social 
events  no  less  than  in  pliysical.  The  difference  is  one  of  degree,  due  to 
the  greater  complexity  of  the  units  correlated  by  the  statistician;  but 
causation  surely  exists  here  as  elsewhere.  Or  perhaps  we  had  better 
disregard  causation  altogether,  and  treat  all  events,  social  and  physical, 
as  sequences  or  coexistences  merely,  for  this  has  the  sanction  of  con- 
temporary philosophers  and  scientists.  Ethics,  to  be  sure,  is  not  a 
study  of  events  as  such.  The  line  of  demarcation  between  descriptive 
and  normative  disciplines  is  valid,  provided  we  put  on  the  one  side 
ethics  alone,  and  on  the  other  the  rest  of  our  inquiries.  With  that 
understanding,  we  should  grant  the  conflict  between  "is"  and  "ought," 
the  cardinal  difference  of  viewpoints  wliich  prevail  in,  say,  economics 
and  ethics  respectively.  No  canon  of  an  ultimate  good  can  ever  be 
derived  from  a  discovery  of  laws  or  from  a  bare  description  of  fact ; 
they  are  worlds  apart.  But  once  we  have  agreed  somehow  upon  a 
definition  of  the  highest  good  we  may  divide  men  into  good  and  bad, 
and  likewise  estimate  happenings  among  men  by  a  moral  standard.  In 
this  sense  economic  data  may  be  connected  with  ethical  norms,  the 
latter  coming  first  and  settling  the  issue  directly  or  indirectly. 

Granting  the  significance  of  such  problems  for  present-day  econo- 
mists, our  major  task  nevertheless  is  the  question  of  the  substitution 
of  a  new  methodology  of  economics  for  the  old,  if  economics  is  actually 
to  remain  a  science — not  tliat  tliis  is  to  be  presumed  beforehand.  But 
it  is  at  any  rate  reasonable  to  cast  about  for  ways  to  test  such  a 
presumption.  We  may  come  to  the  realization,  for  instance,  that  in 
abandoning  sensationalism  and  its  attendant  teacliings  of  causalit\^  and 
induction  we  have  also  severed  ties  with  statics  and  catallactics.  It 
may  appear  that  with  the  rejection  of  a  few  premises  we  have  entered 
upon  a  new  kind  of  qualitative  and  quantitative  analysis.  The  most 
important  point  for  future  reference  will  probably  be  the  decisive 
difference  between  the  units  of  physical  science  and  those  studied  by 
sociologists  or  economists ;  here,  and  not  in  prevailing  psychological 
teachings,  will  be  found  the  key  to  many  of  the  questions  now  pending. 
If  economics  is  to  become  a  factual  science,  how  can  the  data  of  a 
conceptual   economics   such   as  marginism   serve  any  useful  purpose.'* 


1922]  A  Unique  Situation  in  Economic  Theory  605 

If  we  are  to  work  with  a  minimum  of  assumptions — or  possibly  with 
none  at  all — how  may  we  hope  to  accomplish  anything  by  formal 
deduction?  If  because  of  the  incommensurability  of  psychics  we  are 
to  find  objective  regularities  for  a  law  of  price  or  productivity  or 
income,  what  must  be  the  scope  of  our  investigations  and  our  attitude 
toward  a  static  view? 

It  is  plain  that,  in  parting  from  sensationalism  and  an  abstract 
deductive  discipline  erected  upon  its  foundations,  we  have  committed 
ourselves  to  several  novel  duties.  Instead  of  statics,  dynamics  must 
be  used.  To  be  more  precise,  we  must  supplement  our  short-time  views 
by  a  long-time  view,  knitting  the  two  together  as  parts  of  one  analysis, 
or  possibly  under  different  headings.  Events  will  be  studied  essen- 
tially as  they  occur  in  the  real  world  about  us,  and  not  as  isolated 
abstracts  of  human  nature,  or,  worse  yet,  of  functions  mathematically 
equated.  Correspondingly,  the  exchange  mechanism  itself  may  not 
suffice  to  tell  the  whole  story.  We  may  be  prompted  to  go  beyond 
catallactics  in  order  to  complete  our  qualitative  analysis,  or  for  the 
sake  of  finding  more  or  less  permanent  relations  of  a  quantitative 
character.  Our  methods  of  inquiry  will  thus  be  affected  too.  De- 
duction, for  instance,  may  come  to  mean  something  different  from 
formal  logic,  once  we  realize  the  difference  between  universals  or  classes 
and  empirical  data  of  a  highly  complex  and  variable  make-up.  Whether 
deduction  and  induction  are  the  opposites  that  the}-  have  been  made 
out  to  be  is  incidentally  a  question  suggested  b^^  a  critique  of  hedonistic 
sensationalism.  In  addition  there  remains  the  need  of  looking  for 
quantitative  regularities  that  will  compensate  us  for  what  is  lost  in 
utilitarianism.  The  inward  nature  of  statistical  induction,  the  scope 
and  technique  of  descriptive  statistics,  the  selection  and  classification 
of  materials  to  be  correlated  from  the  standpoint  of  a  new  concept 
of  law  and  causation,  of  deduction  and  social  science — here  are  topics 
calling  for  a  careful  examination  and  for  hard  work. 

Whether  in  the  end  we  sliall  conclude  that  a  half-philosophical,  half- 
scientific  qualitative  analysis  is  all  that  may  be  attempted ;  or  whether 
we  shall  decide  to  apply  different  sorts  of  measurements  to  different 
subjects,  no  one  may  know  beforehand.  The  uncertainty  with  regard 
to  future  developments  is  great.  For  some  time  indeed  it  will  be  true 
that  economists  are  "terrible  doubters"  who  accept  nothing  on  faith. 
Yet  that  a  unique  situation  exists  today  is  patent  enough.  Whatever 
our  beliefs,  whatever  our  attitude  toward  either  the  critic  or  the 
conservative  who  would  cling  to  what  once  was  considered  worth  while, 
we  may  surely  agree  that  wc  are  on  the  eve  of  great  events  in  economic 
theory.  An  unparalleled  situation  may  lead  to  unparalleled  achieve- 
ments. O.  Fred  Boucke. 

State  College,  Pennsylvania. 


SOME  RECENT  PROBLEMS  IN  PUBLIC  UTILITY  VALUA- 
TION AND  REGULATION 

SUMMARY 

The  two  factors,  the  rate  base  and  the  rate  of  return.  The  rules  governing  the 
court  and  commission  decisions  in  valuation  cases,  606. — Mostly  questions  of  opinion, 
607. — Ambiguity  of  the  term  "vaUie."  "Investment"  a  better  word  for  the  purpose, 
608. — Suggestion  for  handling  appreciation  as  income,  610. — Consideration  of  the 
rate  of  return.  Three  criteria  proposed,  612. — Too  much  dependence  on  "judicial 
notice."     Other  delicate  problems,  612. — A  summary,  61.3. 

The  public  service  commission  which  is  called  upon  to  settle  the  size 
of  the  street-car  fare  or  the  rate  to  be  charged  for  gas  must  consider 
two  factors :  the  rate  base,  that  is,  the  "value"  of  the  property  devoted 
to  the  public  service ;  and  the  rate  of  return  which  is  to  be  permitted 
on  the  investment.  A  very  perfunctory  examination  of  the  reports 
of  the  public  utility  commissions  will  show  that  the  rate  base  has  been 
established  with  great  care  in  almost  every  case,  but  that  the  rate  of 
return  is  fixed  in  a  very  offhand  manner  with  little  or  no  evidence  to 
support  the  conclusion  reached. 

The  rules  or  principles  which  appear  to  govern  the  courts  and  com- 
missions in  recent  valuation  cases  may  be  briefly  summarized  under 
the  headings  used  in  the  volumes  of  the  Public  Utility  Reports  An- 
notated. 

I.  In  general.  Every  change  in  market  prices  does  not  necessitate 
a  revaluation.  This  was  the  rule  during  and  after  the  war,  but  now 
the  courts  have  decided  in  at  least  one  case  that  present  prices  rather 
than  so-called  "normal"  prices  should  govern  and  hence  that  a  revalua- 
tion should  be  made  when  values  were  substantially  affected.^ 

II.  Powers  and  duties  of  commission.  A  commission  must  give  not 
only  its  conclusions,  but  also  the  details  of  the  process  by  which  it 
arrived  at  them. 

III.  Ascertainment  of  value  or  cost.  Some  of  the  commissions 
think  that  the  original  cost  is  the  best  measure  of  present  value,  but  the 
courts  have  ruled  tliat  tlic  reproduction  cost  must  be  considered. 

IV.  Accrued  depreciation.  When  accrued  depreciation  has  not 
been  reimbursed,  some  commissions  do  not  dedvict  it  from  the  rate  base, 
while  others  do. 

V.  Appreciation.     A  "moderate"  appreciation  when  clearly  shown 

to  exist  and  when  no  "unjust"  rate  would  result,  is  practically  always 

allowed. 

^Public  utility  Reports,  1922  B,  p.  681-.  (Subsequent  references  will  be  abbre- 
viated thus,  P.  U.  R.  1922  B,  p.  684.  This  article  is  intended  primarily  for  econo- 
mists, not  lawyers,  and  references  will  be  given,  therefore,  only  for  a  few  contro- 
versial issues.) 


1922]  Public   Utility  Valuation  607 

VI.  Non-physical  elements  affecting  value.  No  set  percentage  of 
construction  cost  should  be  allowed  for  interest  during  construction, 
but  an  estimate  should  be  made  in  accordance  with  the  facts  in  each 
case.  Although  there  is  some  divergence  of  opinion,  it  seems  to  be  the 
rule  to  allow  a  reasonable  sum  for  the  cost  of  promoting  and  financing. 
Contingencies  and  omissions  are  allowed  for  by  the  Indiana  commission 
on  the  ground  that  omissions  are  inevitable  in  the  most  carefully  made 
inventory,  but  this  is  contrary  to  the  rule  adopted  by  most  of  the  com- 
missions. Discount  on  securities  and  brokerage  must  as  a  rule  be 
amortized  and  not  added  to  the  permanent  capital  value. 

VII.  Items  and  expenses  chargeable  to  capital.  In  one  peculiar 
case  expenses  of  a  law  suit  about  a  right  of  way  were  charged  to 
capital."  Work  under  construction  is  ordinarily  excluded  from  the 
value  on  which  the  company  is  permitted  to  earn,  on  the  ground  that 
interest  during  construction  will  form  part  of  the  capital  value  of  the 
new  property. 

VIII.  Valuation  of  particular  kinds  of  tangible  property.  Property 
not  used  or  useful  is,  of  course,  excluded,  but  the  interpretation  is 
liberal,  so  that  property  reasonably  likely  to  be  used  in  the  near  future 
is  not  excluded  and  some  value  is  allowed  for  superseded  or  obsolescent 
property,  if  it  is  used  at  all  or  if  it  has  not  been  paid  for  by  the  public 
through  a  depreciation  allowance.  The  appreciation  in  the  value  of 
land  is  allowed  in  the  valuation  of  public  utilities.  As  for  working 
capital,  the  rule  has  been  to  relate  it  to  the  amount  of  the  expenses 
between  times  of  income  receipt.  If  advance  payments  by  customers 
are  sufficient  to  meet  these  expenses,  no  allowance  is  made  to  the  com- 
pany for  working  capital. 

IX.  Valuation  of  particular  kinds  of  intangible  property.  It  is 
very  generally  recognized  that  an  allowance  must  be  made  for  "going 
value."  This  allowance  is  determined  by  what  is  called  the  Wisconsin 
method,  that  is,  by  assuming  that  the  going  value  is  equal  to  the 
"unrequited  early  losses."'  However,  the  New  York  Public  Service 
Commission,  2nd  District,  denies  the  existence  of  going  value  in  the 
case  of  an  unprosperous  concern.* 

A  few  of  these  principles  are  merely  the  answers  to  practical  ques- 
tions, such  as :  how  much  working  capital  does  this  business  need  ? 
Most  of  them,  however,  fall  into  a  distinctly  different  category.  They 
are  questions  of  opinion,  judgment,  or  bias.  The  most  important  of 
these  is :  which  cost  or  costs  must  be  taken  as  the  measure  of  value  for 
rate-making  purposes?  The  commissions,  as  the  guardians  of  the 
public  interest,  are  inclined  to  choose  the  lowest,  just  now  usually  the 

'P.  U.  R.  1920  B,  p.  37. 
^P.  U.  R.  1920  B,  p.  813. 
*P.  V.  R.  1920  C,  p.  264. 


608  Shirley  D.  Southworth  [December 

original  cost ;  the  companies  seeking  the  highest  possible  base  are  better 
suited  with  the  cost  of  reproduction  during  the  present  period  of  high 
prices ;  the  courts  as  the  protectors  of  private  property  lean  strongly 
toward  the  reproduction-cost  method.  Yet,  as  has  been  noted  above, 
there  was  an  almost  universal  refusal  to  accept  war  prices  as  a  basis 
for  the  computation  of  rate  bases.  The  courts  sought  normal  prices 
in  five  to  ten  year  pre-war  averages.  Now  with  the  persistence  of  the 
high  prices  this  error  is  less  frequent,  but  still  the  public  utilities 
suffered  from  it  through  the  whole  war  period.  This  war  experience 
has  revealed  one  of  the  greatest  weaknesses  of  our  present  method  of 
regulation  in  a  glaring  manner.  The  system  is  too  inflexible.  Re- 
valuations are  expensive  and  slow.  The  corporation  is  quite  likely  to 
be  in  the  hands  of  the  receiver  before  the  commissions  and  courts  realize 
that  the  value  of  the  dollar  has  changed. 

A  second  place  where  opinion  is  given  free  rein  is  in  the  allowance 
of  appreciation.  A  "moderate"  appreciation  is  to  be  allowed  when  no 
"unjust"  rate  will  result,  it  is  said.  Does  this  really  mean  anything? 
If  it  were  known  what  an  unjust  rate  would  be,  it  would  be  unnecessary 
to  bother  witli  the  valuation  at  all. 

The  third  question  of  opinion  to  be  considered  here  relates  to  the 
allowance  for  going  value.  It  has  been  definitely  decided  that  there 
is  such  a  thing  as  going-concern  value  different  from  good  will.  Fur- 
thermore this  going  value  must  be  allowed  for.  In  a  manner  quite 
inconsistent  with  the  cost-of-reproduction  method  used  for  the  valua- 
tion of  tiic  rest  of  the  property  the  commissions  and  courts  have  esti- 
mated the  going  value  as  equal  to  the  unrocjuited  early  losses.  This 
is  the  actual  cost  method,  but  when  a  concern  has  never  had  the  good 
fortune  to  become  prosperous,  the  New  York  commission,  at  least, 
refuses  to  believe  that  there  is  any  going  value  there.  By  a  strange 
paradox,  if  a  company  has  prospered  from  tlie  first  and  has  never  had 
any  early  losses,  it  also  is  quite  without  going  value. 

As  a  consequence  of  this  freedom  of  opinion  in  determining  several 
of  tlie  elements  which  enter  into  the  rate  base,  much  uncertainty  and 
risk  is  brought  into  public  utility  investment.  For  tliis  risk  the  in- 
vestor must  be  compensated.  This  means  tliat  in  the  long  run  the 
public  will  be  called  upon  to  pay  in  higher  rates  for  the  vagaries  of  the 
courts  and  conunissions  and  that  in  the  mean  time  the  investors  will 
feel  aggrieved  and  the  public  service  will  suffer. 

The  primary  cause  of  trouble  in  the  determination  of  the  rate  base  is 
the  ambiguity  of  tlie  concept  of  value  lield  by  tlie  courts  and  commis- 
sions. Tliis  is  the  result  of  the  survival  of  the  classical  economists' 
doctrine  tliat  the  ultimate  standard  of  value  is  cost.  The  inadequacy 
of  this  standard  was  realized  by  the  classical  economists  themselves  as 
regards  what  they  called  nionopol3^  goods,  tliat  is,  goods  which  arc 


1922]  Public  Utility  Valuation  609 

not  readily  reproducible.  Nevertheless,  they  thought  that  nearly  the 
whole  range  of  economic  goods  came  under  the  law  of  cost.  It  is 
not  necessary  to  show  here  that  the  only  cost  which  can  be  proved  to  be 
related  to  the  value  of  an  object  is  the  money  cost  and  not  the  labor 
cost.  If  value  could  be  shown  to  be  equal  to  the  money  cost  under  free 
competition,  then  cost  could  fairly  be  taken  as  a  measure  of  value  for 
the  public  utility,  but  it  must  be  noted  that  some  of  the  most  trouble- 
some problems  of  public  regulation  relate  to  the  valuation  of  land, 
which  even  the  classical  economists  would  not  have  thought  of  as  subject 
to  the  law  of  cost.  The  value  of  land  can  be  explained  only  by  a  con- 
sideration of  its  future  uses.  When  the  word  "value"  is  used  in  rate- 
making  cases,  it  is  almost  impossible  to  avoid  reasoning  in  a  circle. 
The  more  exact  the  use  of  the  term  becomes,  the  less  appropriate  is  it 
in  such  cases.  In  regard  to  unprosperous  concerns  it  is  argued  that  no 
going  value  can  exist ;  why  does  it  not  follow  that  in  the  case  of  very 
prosperous  concerns  a  very  great  going  value  exists,  as  the  earnings 
have  quite  clearlj^  been  made  the  criterion?  The  truth  is  that  value 
depends  on  estimated  future  earnings  or  uses  and  the  most  rigorous 
attempts  to  avoid  the  thought  are  unavailing.  Some  of  the  commis- 
sions have  realized  this  ambiguity  in  the  use  of  the  term  and  have 
referred  to  value  in  the  ordinary  sense  of  the  word  as  market  value, 
with  the  statement  that  the  value  for  rate-making  purposes  was  some- 
thing different  from  market  value.  Others  have  decided  to  abandon 
the  term  "value"  in  favor  of  "fair  amount,"  and  the  courts  have  held 
that  this  is  a  permissible  substitution.^  However,  the  expression  "fair 
amount"  seems  incomplete  and  if  it  implies  "fair  amount  of  value," 
as  clearly  it  must,  then  little  is  gained  by  the  substitution. 

Since  the  term  "value"  should  be  rejected  on  account  of  its  ambiguity 
and  "fair  amount"  is  not  much  better,  another  expression  must  be 
found  which  will  be  simple  and  exact.  "Investment"  is  such  a  word. 
It  conveys  exactly  the  proper  meaning  and  has  the  advantage  over 
"fair  amount"  of  not  needing  a  special  explanation  whenever  it  is  used. 
It  plainly  indicates  the  historical  nature  of  the  thing  which  is  to  form 
the  base  for  rate  making.  It  refers  to  what  the  investor  has  put  into 
the  property.  The  very  use  of  the  term  creates  a  presumption  of  fair 
dealing.  A  fair  return  on  his  investment  is  all  that  any  man  can 
reasonabh'  ask  of  the  public. 

Many  benefits  would  result  merely  from  the  general  adoption  of  this 
term.  The  investment  is  a  fixed  quantity  until  the  investor  changes 
it  either  by  putting  more  money  into  the  business  or  by  retaining  part 
of  the  earnings  in  the  business.  A  definite  rule  would  be  established 
which  would  not  fluctuate  with  the  reasonableness  of  various  individuals 
who  have  the  privilege  of  choosing  between  the  numerous  and  conflicting 

=P.  V.  R.  1920  C,  p.  326. 


610  Shirley  D.  Sontliworth  [December 

alternatives  of  the  famous  case  of  Smyth  vs.  Ames,  where  it  is  stated 
that,  in  finding  tlie  fair  value  of  tlie  property  being  used  for  the  con- 
venience of  the  public,  "the  original  cost  of  construction,  the  amount 
expended  in  terminal  improvements,  the  amount  and  market  value  of 
its  stocks  and  bonds,  the  present  as  compared  with  the  original  cost 
of  construction,  the  probable  earning  capacity  of  the  property  under 
particular  rates  prescribed  by  statute,  and  the  sum  required  to  meet 
operating  expenses  are  all  matters  for  consideration  and  are  to  be  given 
such  weight  as  may  be  just  and  right  in  each  case.  We  do  not  say 
that  there  may  not  be  other  matters  to  be  regarded  in  estimating  the 
value  of  the  pro})erty."  Though  it  is  true  that,  as  a  matter  of  fact, 
the  authorities  liave  pretty  well  settled  down  to  the  use  of  the  cost-of- 
reproduction-less-depreciation  method,  still  there  is  enough  of  uncer- 
tainty about  it  to  add  considerably  to  the  risk  in  public  utility  invest- 
ment. The  removal  of  this  risk  would  improve  the  position  of  the 
public  utility  securities  on  the  market  and  enable  the  commissions  to 
lower  the  rate  of  return  without  injustice  to  the  security  holders,  for 
the  capital  value  of  their  holdings  would  not  be  impaired. 

Along  with  the  use  of  the  term  "investment"  would  come  naturally 
a  more  rational  method  of  handling  appreciation.  One  writer  has  sug- 
gested that  once  a  value  lias  been  fixed  upon,  it  should  be  considered 
that  this  value  is  the  investment  in  the  property  and  that  no  apprecia- 
tion will  be  added  to  this  in  later  years.'  He  feels  that  the  public  would 
then  get  the  benefit  of  the  so-called  unearned  increment  in  land  values. 
He  claims  that  the  investor  would  not  be  injured  because  he  would 
know  when  he  made  his  investment  that  no  appreciation  was  to  be 
allowed.  Even  if  this  suggestion  were  feasible,  it  would  not  be  desir- 
able. There  is  a  better  and  simpler  way  and  one  more  likely  to  be 
generally  adopted  when  it  is  understood.  The  difficulty  with  the  pres- 
ent metliod  of  treating  appreciation  is  not  that  it  recognizes  the  exis- 
tence of  appreciation  but  rather  that  it  does  not  anticipate  the 
appreciation  in  fixing  the  rate  of  return.  It  seems  to  be  customary 
to  fix  a  rate  of  return  absolutely  without  regard  to  any  increase  in 
value  of  the  property  and  then  when  the  property  comes  up  for  a 
revaluation,  a  considerable  appreciation  is  discovered  which  has  never 
entered  tlie  income  accounts.  If  appreciation  can  increase  the  capital 
value  of  the  plant,  then  it  must  be  income  and  should  be  treated  as 
such.  No  one  hesitates  to  call  depreciation  an  expense  merely  be- 
cause it  does  not  involve  a  casli  outlay,  and  no  one  should  hesitate  to 
call  appreciation  an  item  of  income  merely  because  it  is  not  a  cash 
receipt.  The  objection  may  be  raised  that  tliis  plan  results  in  burden- 
ing the  public  with  the  payment  of  a  return  on  a  huge  "unearned  in- 

"Smyth  vs.  Ames,  169  U.  S.,  46.     Opinion  delivered  by  Mr.  Justice  Harlan. 
'Robert  James  McFall,  Railway  Monopoly  and  Rate  Regulation,  pp.  145-149. 


1922]  Public  Utility  Valuation  611 

crement."  The  answer  to  this  is  that  the  plan  here  proposed  re- 
moves the  "unearned"  part  of  that  accusation,  for  the  returns  obtain- 
ed by  the  company  from  earnings  would  be  diminished  by  the  amount  of 
the  appreciation.  Furthermore  if  the  property  became  too  valuable 
for  the  public  utility  use  to  which  it  was  being  put,  this  should  be  known 
so  that  a  change  could  be  made.  A  proper  valuation  of  property  is  a 
guide  for  the  economic  use  of  the  property.  Finally  it  is  inevitable 
that  the  courts  will  insist  on  the  allowance  of  appreciation  and  the  wise 
guardian  of  the  public  interest  will  recognize  this  early  enough  to  take 
the  appropriate  measures  in  fixing  the  rate  of  return  on  this  basis. 

After  it  has  been  admitted  that  appreciation  should  be  considered 
in  rate  making,  it  becomes  necessary  to  examine  more  carefully  into 
the  nature  of  appreciation.  There  are  at  least  three  distinct  sorts 
of  value  changes  which  enter  into  the  problem.  They  are  the  long 
period  changes  in  the  value  of  money,  the  value  phenomena  of  the 
business  cycle,  and  the  changes  in  the  value  of  particular  goods  occa- 
sioned by  special  conditions  governing  their  relative  scarcity.  From 
1896  to  May,  1920,  we  had  continually  rising  prices  and  a  depreciat- 
ing dollar;  this  gave  a  nominal  appreciation  in  many  cases  where  no 
real  appreciation  existed.  This  fictitious  appreciation  is  not  the  kind 
of  appreciation  which  is  to  be  treated  as  a  form  of  income.  Never- 
theless even  this  kind  cannot  be  neglected.  The  size  of  the  value 
measuring  stick  has  changed  and  the  public  utilities  should  not  be 
expected  to  stand  aside  and  say  that  a  fifty  cent  dollar  is  the  same  thing 
as  a  hundred  cent  dollar.  The  amount  of  the  investment  should  be 
expressed  in  terms  of  the  present  dollar.  The  only  feasible  method 
of  doing  this  would  be  to  take  some  official  index  number  of  wholesale 
prices,  such  as  that  of  the  Bureau  of  Labor  Statistics,  as  an  indicator 
of  the  value  of  money.  When  this  showed  that  the  value  of  money 
had  gone  up  or  down,  the  figure  representing  the  investment  would  be 
made  to  fluctuate  by  a  like  percentage.  Increases  made  in  this  way 
should  not  be  counted  as  appreciation,  nor  decreases  as  depreciation. 
If  these  numerical  revaluations  or  recomputations  were  made  every 
year,  the  cyclical  fluctuations  would  be  taken  care  of  as  well  as  the 
long-period  changes,  but  it  might  be  better  to  attain  justice  in  the 
shorter  periods  by  flexibility  in  the  rate  of  return  allowed. 

The  third  value  change,  the  change  in  the  value  of  particular  goods 
occasioned  by  changes  in  the  conditions  governing  their  relative  scar- 
city, is  the  only  one  which  produces  true  appreciation.  When  the  value 
of  land  increases  because  of  the  growth  of  population,  and  the  value 
of  timber  increases  because  of  the  depletion  of  the  forest  reserves  and 
also  because  of  the  growth  of  population,  this  value  increase  constitutes 
a  real  appreciation  and  should  be  treated  as  income  in  the  manner 
described  in  a  previous  paragraph.    This  is  not  a  discussion  of  account- 


612  Shirley  D.  Soutliworth  [December 

ing  methods,  and  therefore  no  attempt  will  be  made  to  describe  in  detail 
the  computations  necessary  to  make  these  principles  effective. 

So  far  the  discussion  has  been  concerned  chiefly  with  valuation  or  the 
rate  base.  The  rate  of  return  desei^ves  some  special  consideration. 
The  following  quotation  from  the  decision  of  the  Arizona  Corporation 
Commission,  delivered  April  13,  1922,  is  a  fair  example  of  the  way 
in  which  the  rate  is  too  frequently  decided  upon: 

We  are  of  the  opinion  that  9  per  cent  of  the  value  found  for  rate-making 
purposes  may  be  accepted  as  a  measure  of  reasonableness  of  net  operating 
revenues  without  prejudicing  rates  on  one  hand,  and  without  discouraging 
enterprise  or  placing  restrictions  in  the  matter  of  securing  new  capital 
on  the  other.'* 

In  this  there  is  absolutely  no  intimation  of  the  method  of  arriving 
at  9  per  cent  as  the  rate  satisfying  the  conditions  set.  The  commission 
was  "of  the  opinion"  that  this  rate  satisfied  the  conditions. 

Other  commissions  have  been  more  explicit.  Three  criteria  have  been 
proposed :  the  rate  generally  deemed  reasonable  by  courts  and  com- 
missions ;  the  rate  earned  by  other  similar  enterprises ;  and  the  rate 
at  which  capital  can  be  secured  in  the  money  market.  The  first  of 
these  could  hardly  be  said  to  have  any  value  except  as  confirmatory 
of  a  judgment  already  reached. 

For  this  purpose  it  is  introduced  as  in  the  decision  of  the  Indiana 
Public  Service  Commission  of  January  26,  1922: 

A  reasonable  return,  under  conditions  that  exist  today,  is  not  less  than 
7  per  cent.  Most  courts  and  commissions  hold  that  8  per  cent  is  a  reason- 
able return." 

The  second  and  third  criteria  are  both  involved  in  the  decision  of  the 
West  Virginia  Supreme  Court  of  Appeals  of  December  14,  1921 : 

It  is  argued  that  the  rate  of  net  return  ought  to  be  sufficient  to  induce 

capital  to  engage  in  such  public  enterprises Is  not  6  per  cent  net, 

clear  of  taxes  and  all  operating  expenses,  including  a  sum  equal  to  2  per 
cent  for  depreciation,  as  good  or  better  than  returns  from  most  enterprises 
of  a  similar  character?"' 

In  another  opinion  delivered  on  the  same  day  the  court  (Lynch,  J.) 
says: 

As  it  seems  to  me,  a  return  is  not  reasonable  when  limited  to  interest  upon 
indebtedness  and  a  mere  dividend  on  stock  witliout  allowance  for  the  addi- 
tional risk  assumed  and  entailed  in  a  public  business." 

The  one  thing  tliat  stands  out  clearly  in  all  the  decisions  is  that  they 

depend  upon  "judicial  notice"  of  the  facts  of  business  altogether  too 

"P.  U.  R.  1922  C,  p.  670. 
»P.  U.  R.  1922  C,  p.  377. 
"P.  U.  R.  1922  C,  pp.  85,  86. 
"P.  U.  R.  1922  C,  p.  573. 


1922]  Public  Utility  Valuation  613 

much.  Evidence  should  be  presented  not  only  of  the  local  rates  for 
money  but  also  of  the  rates  in  New  York,  particularly  if  the  company 
is  large  enough  to  float  its  securities  there.  There  are  a  number  of 
delicate  problems  concerning  the  reward  to  be  given  the  well-managed 
company,  the  influence  of  the  proportion  of  stocks  and  bonds  on  the 
credit  of  the  company  and  the  rate  of  return  needed,  and  the  desir- 
ability of  consolidation  of  public  utility  companies  as  warranting  lower 
rates  of  returns.  These  cannot  be  solved  within  the  limits  of  this 
paper.  All  that  is  insisted  on  here  is  that  definite  evidence  should 
always  be  introduced  to  fix  the  rate  with  the  greatest  exactness  possi- 
ble, for  a  little  difference  in  the  rate  is  equivalent  to  a  very  considerable 
difference  in  the  rate  base. 

It  is  believed  that  the  changes  which  have  been  suggested  in  this 
paper  would  result  in  the  simplification  of  the  problem  of  public  regu- 
lation and  improve  the  credit  of  the  public  utility  companies  to  the 
benefit  of  the  public  and  the  satisfaction  of  the  conservative  investor. 
The  amount  of  the  investment  would  not  vary  with  the  whim  of  courts 
and  commissions.  Appreciation  would  not  be  a  troublesome  issue. 
Real  appreciation  would  be  allowed  for  without  injustice  to  the  public 
or  the  company.  The  rate  of  return  would  be  established  by  scientific 
study  of  the  security  market  and  not  bj'  guess. 

Shirley  Donald  Southworth. 
Princeton  University. 


THE  COURSE  IN  ELEMENTARY  ECONOMICS 

What  shall  be  done  with  the  course  in  the  Elements  of  Economics? 
Here  is  a  question  so  much  discussed  in  recent  years  that  it  might  well 
seem  difficult  to  add  any  new  or  original  ideas.  After  a  number  of 
years  of  rather  varied  experience  in  the  teaching  of  the  Elements  or 
Principles  of  Economics,  however — to  freshman,  sophomores,  juniors, 
seniors  and  graduates;  to  majors  and  non-majors;  to  college  students, 
commerce  students,  agricultural  students,  law  students,  engineers, 
foresters,  veterinarians,  and  different  assortments  and  combinations  of 
these — the  writer  ventures  to  formulate  some  tentative  conclusions,  in 
the  hope  that  they  may  be  suggestive,  if  not  otherwise  valuable.  These 
conclusions  are,  briefly,  that  the  course  in  Elements  or  Principles  of 
Economics,  instead  of  being  the  first  course  in  the  schedule,  or  nearly 
the  first,  and  prerequisite  to  the  other  courses  in  economics,  should 
come  late,  preferably  in  the  senior  year,  and  should  be  preceded  by 
most  of  the  other  courses  in  economics.  Perhaps  it  would  be  better 
to  say  that  Elements  of  Economics  should  be  eliminated,  and,  in  the 
senior  year,  a  substantial  course  in  the  Principles  of  Economics  should 
be  given. 

A  distinction  must  be  made  between  majors  and  non-majors,  or  be- 
tween those  who  are  specializing  in  economics  or  commerce  and  those 
who  take  only  one  course  in  economics.  Neither  class  of  students 
should  take  the  Elements  or  Principles  before  the  junior  year,  how- 
ever. The  course  is  difficult  enough,  even  for  juniors,  if  they  have  had 
no  other  work  in  economics,  but  it  is  not  impossible.  The  writer  has 
taught  Principles  of  Economics  to  jvinior  and  senior  non-majors  for 
several  years,  and  finds  it  a  fairly  satisfactory  course.  Many  of  these 
students  have  considerable  information  in  history,  sociology,  govern- 
ment, and  in  the  sciences,  which  they  can  bring  to  bear  upon  economic 
questions.  Most  of  them  have  a  sufficient  background  of  facts  and 
sufficient  maturity  to  enable  them  to  understand  the  Principles  fairly 
well. 

For  economics  majors,  or  for  students  in  schools  of  commerce 
or  business,  the  course  in  Elements  or  Principles  of  Economics,  as 
ordinarily  presented,  serves  mainly  as  a  preliminary  bird's-eye  view 
of  the  general  field,  covering  largely  material  which  is  treated  in  detail 
in  later  courses.  The  table  of  contents  of  almost  any  of  the  texts  in 
common  use  follows  very  closely  the  schedule  of  courses  given  in  the 
average  department  of  economics. 

The  question  arises  here :  why  should  students  cover  economic 
history,  or  business  organization,  or  railways,  first  superficially,  in  a 
ciiapter  or  two  in  Ely  or  Seagcr  or  Clay,  then  tlioroughly,  in  a  special- 
ized course,  a  3'ear  or  two  later?     Students  do  not  need  to  spend  five 


1922]  The  Course  in  Elementary  Economics  615 

hours  of  their  college  curriculum  just  to  get  an  idea  as  to  what  econom- 
ics includes.  This  they  can  learn  from  the  table  of  contents  of  any 
good  textbook,  or  from  the  university  catalogue.  It  is  very  doubtful 
whether  most  students  do  their  later  work  better  for  having  covered 
it  briefly  in  the  course  in  Elements.  Some  students  probably  gain 
something,  but  some  of  them  actually  lose.  Some  of  them  take  up  later 
courses  with  less  freshness  and  vigor  than  they  would  if  they  were 
entirely  unfamiliar  with  their  content,  for  the  same  reason  that  fresh- 
men who  have  had  economics  in  high  school  do  no  better  work  in  the 
college  course  in  Elements  than  freshmen  who  have  had  no  such  course, 
or  for  the  same  reason  that  those  graduate  students  at  Harvard  or 
Yale  who  have  done  graduate  work  elsewhere  do  not  do  notably  better 
work  than  those  who  have  done  no  previous  graduate  work,  or  often  do 
even  poorer  work.  If  a  brief  summary  of  the  field  of  economics  is  to 
be  given  at  all,  it  should  be  given  at  the  end  of  the  college  schedule, 
rather  than  at  the  beginning. 

Most  students  do  not  have  time  to  take  courses  in  all  the  various 
fields  of  economics,  however,  and  the  course  in  Principles  serves  the 
further  useful  purpose  of  filling  the  gaps  in  the  students'  schedules. 
As  far  as  it  serves  thus  as  a  "gap-filler" — if  that  awkward  term  may 
be  used — it  should  obviousl}'  come  late  in  the  college  schedule.  In  the 
senior  year,  when  the  student  has  finished  most  of  his  work,  he  at  least 
knows  what  are  the  gaps  or  weak  spots  in  his  training  and  can  fill 
them  far  more  intelligently  than  he  could  earlier.  Furthermore,  he 
will  do  this  work  much  better,  and  so  will  leave  college  with  a  better 
balanced  economic  training  than  he  would  if  he  had  done  the  work 
earlier.  Thus  the  student  who  for  some  reason  does  not  get  a  com- 
plete course  in  Labor  Problems  will  have  a  vastly  better  understanding 
of  that  field,  if  he  studies  it  in  Taussig  or  Marshall  in  his  senior  year, 
than  if  he  studies  it  in  one  of  the  more  elementary  texts  in  his  freshman 
or  sophomore  year.      The  gap-filling  course  should  come  late. 

The  most  serious  hiatus  in  the  average  student's  training  is  found  in 
distribution.  Most  economics  majors  get  little  in  this  field  except 
what  they  find  in  the  course  in  Elements  or  Principles,  because  few 
of  them  take  the  later  course  in  Distribution  of  Wealth.  Now,  as  far 
as  the  course  in  Principles  is  a  discussion  of  the  problems  of  distribu- 
tion, it  should  certainly  come  in  the  senior  year.  The  problems  of 
distribution  are  among  the  most  tangled,  complex  and  many-sided  to 
be  found  in  economics,  and  require  perhaps  a  broader  basis  of  informa- 
tion and  experience  and  sounder  judgment  than  any  other  set  of  prob- 
lems in  the  whole  field.  Freshmen  or  sophomores  wrestling  with  the 
problems  of  value,  marginal  and  specific  productivity,  trade  unionism, 
the  adequacy  of  the  present  economic  system,  socialism  and  the  single 
tax,  before  they  are  permitted  to  study  Economic  History,  Railroads, 


616  John  Ise  [December 

Marketing,  Business  Organization,  or  Banking!  How  could  the  stu- 
dent have  an  Intelligent  Idea  as  to  the  adequacy  of  the  present  economic 
system,  for  instance,  before  he  knows  anything  about  that  economic 
system?  How  much  will  he  understand  about  socialism,  when  he  has 
so  little  notion  as  to  the  adequacy  of  the  system  It  is  designed  to  im- 
prove? Is  It  not  clearly  expedient  for  him  to  take  first  those  descrip- 
tive courses  which  give  an  idea  of  the  economic  system  as  it  Is,  and  then 
consider  the  question  of  the  justice  or  Injustice  of  that  system? 

Altogether  the  course  in  Principles  is  the  most  difficult  course  given 
in  most  departments  of  economics,  for  It  covers  ten  to  twenty  times 
as  much  ground  as  most  other  courses.  One  of  the  most  popular  texts, 
for  Instance — and  one  of  the  most  teachable — presents.  In  750  pages, 
the  following  array  of  topics:  economic  history  of  England;  economic 
history  of  the  United  States;  production;  consumption;  business 
organization;  corporations;  monopolies;  money;  credit  and  banking; 
international  trade;  protection;  value;  distribution,  including  the 
problems  of  rent,  wages,  interest  and  profits ;  labor  problems ;  labor 
legislation;  railroads  and  transportation;  insurance;  agricultural 
problems;  socialism;  public  finance;  and  history  of  economic  thought! 
Almost  any  of  the  subjects  enumerated  makes  a  fairly  difficult  course 
In  Itself,  yet  the  freshman  or  sophomore  is  supposed  to  be  able  to  get 
some  sort  of  understanding  of  each  In  a  day  or  two,  or  perhaps  a 
week.  Something  he  will  learn,  if  he  has  reasonable  ability  and  In- 
dustry, but  he  will  have  mostly  very  superficial  Ideas,  and  will  fail  to 
grasp  the  essence  of  many  of  the  problems  considered.  Many  teachers 
of  the  Elements  probably  exaggerate  the  amount  that  underclassmen 
really  understand.  The  students  learn  by  rote  some  definitions  of 
utility,  value,  margins,  rent,  lalssez  faire,  etc.,  but  frequently  have  little 
or  no  Idea  whatever  as  to  the  real  meaning  of  these  terms.  The  writer 
has  often  been  astounded,  in  teaching  advanced  theory  classes,  to  see 
the  grotesque  Ideas,  or  lack  of  ideas,  that  students  have  carried  away 
from  the  class  In  Elements.  Since  the  students  do  not  get  a  clear 
grasp  of  much  that  they  cover,  they  forget  quickly.  Anyone  who 
doubts  this  Is  Invited  to  try  giving  one  of  the  examinations  In  the 
Elements  to  a  class  of  seniors,  two  or  three  j^ears  after  they  have 
finished  the  course.  Such  an  examination  will  not  only  show  how 
little  the  students  finally  retain,  but  will  also  throw  some  light  on  the 
question  as  to  how  much  the  course  In  Elements  aids  In  the  understand- 
ing of  later  courses.  Wliat  the  students  have  forgotten  they  obviously 
cannot  have  been  using  much. 

It  Is  sometimes  assumed  that  tlie  course  in  the  Elements  or  Prin- 
ciples is  a  sort  of  key  to  the  later  courses,  that  It  serves  as  a  foundation 
for  the  proper  understanding  of  the  later  work.  On  that  theory  it  is 
generally  made  a  prerequisite  to  later  courses.     As  far  as  it  is  a  sum- 


1922]  The  Course  in  Elemeniarij  Economics  617 

mary  of  the  other  courses  in  economics,  it  doubtless  has  some  value, 
but  as  far  as  it  is  a  treatment  of  the  problems  of  distribution,  or  an 
effort  to  bring  the  various  branches  of  economics  into  a  unified  whole, 
it  should  not  be  considered  a  foundation  for  later  work.  The  truth 
is  exactly  the  reverse.  The  later  courses  are  the  absolutely  essential 
foundation  for  a  good  grasp  of  the  Principles.  The  Principles  is 
the  superstructure,  and  it  should  be  established  on  a  solid  foundation 
of  facts  from  economic  history,  commercial  geography,  statistics, 
business  organization,  corporation  finance,  money,  banking,  and  other 
courses. 

It  has  been  suggested  that  the  course  in  the  Elements  gives  students 
a  knowledge  of  principles  which  they  will  be  able  to  apply  in  later 
work.  But  students  do  not  grasp  principles  without  having  the  data 
and  facts  which  prove  or  illustrate  these  principles.  The  principles 
and  the  facts  should  be  given  at  the  same  time  and  in  the  same  course, 
for  onl}'  thus  will  the  principles  be  understood,  or  the  facts  have  any 
meaning.  The  place  to  consider  theories  of  crises  is  not  the  course  in 
Elements,  where  little  but  the  theories  are  given,  but  the  course  in 
Money  and  Banking,  where  the  history  of  crises  and  other  data  will 
give  the  theories  some  meaning.  The  place  to  treat  theories  of  wages 
is  not  in  the  Elements,  before  the  student  knows  anything  of  the  history 
of  labor,  but  rather  in  the  course  in  Labor  Problems,  in  connection 
with  historical  and  other  data  that  may  illustrate  those  theories.  Per- 
haps the  best  place  to  consider  the  advantages  of  large-scale  pro- 
duction will  be  in  Business  Organization,  and  not  in  the  Elements, 
where  only  a  skeleton  summary  is  presented,  and  memorized  by  the 
more  industrious  students.  A  rather  large  share  of  many  textbooks 
in  the  Elements  is  taken  up  with  summaries  of  historical  facts  and 
principles  so  brief  as  to  be  almost  meaningless. 

There  is  no  separate  body  of  economic  truth  which  can  be  carved  out 
and  designated  "principles."  There  are  principles  of  various  kinds, 
it  is  true,  underlying  all  economic  phenomena.  Some  of  these  prin- 
ciples relate  to  mone}',  some  to  banking,  some  to  land  problems,  some 
to  marketing,  some  to  labor,  some  to  transportation,  some  to  each  of 
the  various  branches  of  economics ;  and  they  should  be  treated  in  their 
proper  connection,  and  not  in  any  dissevered  course  in  the  Elements  or 
Principles  of  Economics.  Similarly,  there  is  no  separate  body  of 
economic  truth  or  doctrine  that  can  properly  be  called  "economic 
theory."  There  are  theories  of  all  kinds,  just  as  there  are  principles 
of  all  kinds,  but  the}'  should  be  considered  in  connection  with  specific 
problems,  and  not  in  a  separate  course.  Courses  in  "economic  theory" 
have  always  seemed  to  the  writer  badly  named,  to  say  the  least. 

The  Elements  of  Economics  is  not  properly  a  foundation  for  later 
courses,  and  in  some  respects  it  is  actually  misleading  in  its  relation 


618  John  Ise  [December 

to  most  later  courses.  Some  of  what  tlie  student  learns  in  the  Elements 
he  must  promptly  unlearn  before  he  can  go  on  intelligently.  For 
instance  he  learns  certain  definitions  for  land,  capital,  and  entrepreneur, 
with  the  incomes  rent,  interest  and  profits — in  fact,  a  fair  share  of  his 
elementary  course  is  built  up  around  these  concepts.  When  he  gets 
into  Business  Organization,  Accounting,  Banking,  Corporation  Fi- 
nance, Railroads,  or  some  other  succeeding  courses,  he  finds  that  the 
definitions  he  learned  do  not  apply.  In  these  courses  capital  is  not 
instruments  of  production;  land  is  not  all  the  gifts  of  nature,  but  the 
surface  of  the  soil ;  interest  is  not  the  income  accruing  from  the  use 
of  capital,  but  the  income  from  a  loan  of  money ;  rent  is  paid  for 
buildings  as  well  as  for  land ;  distribution,  in  the  later  course  in 
Marketing,  refers  not  to  income  but  to  oranges  and  potatoes.  Many 
of  the  definitions  used  in  the  Elements  most  students  never  see  again 
in  any  later  course,  because  most  students  do  not  take  Economic 
Theory  or  Distribution  of  Wealth — the  only  courses  in  which  those 
definitions  reappear. 

There  is  plenty  to  do  in  the  earlier  years  of  the  college  course,  with- 
out the  work  in  Elements  of  Economics.  Languages  and  mathematics 
are  done  better  by  freshmen  and  sophomores  than  by  upperclassmen ; 
and  some  history,  political  and  economic,  and  political  science,  should 
be  included,  with  whatever  sciences  may  be  regarded  as  broad  training. 
These,  with  two  or  three  of  the  easier  courses  in  economics,  will  not 
leave  the  underclassman  much  time  to  fret  over  theories  of  distribution. 

Most  departments  of  economics,  nevertheless,  follow  the  plan  of 
giving  an  all-inclusive  course  in  Elements  or  Principles  to  freshmen 
or  sophomores,  and  make  this  course  prerequisite  to  most  other  work 
in  economics.  This  arrangement  can  probably  be  explained,  if  not 
excused,  by  the  power  of  academic  tradition.  Not  many  decades  ago, 
only  one  or  two  courses  in  economics  were  given  in  most  universities — 
Principles  of  Political  Economy,  and  perhaps  one  or  two  other  courses. 
New  courses  were  gradually  added  to  the  curriculum,  but  the  course  in 
Principles  was  retained  as  a  fundamental  introductory  course.  As 
long  as  there  were  only  a  few  other  courses,  there  was  justification  for 
a  broad  course  in  the  Principles,  even  if  there  was  little  reason  for 
making  it  the  first  course;  but  when  enough  advanced  courses  were 
added  to  cover  the  entire  field  of  economics,  the  course  in  Principles 
represented  little  but  duplication.  It  was  not  changed  much,  in 
character  or  in  scope,  as  the  other  courses  were  added.  This  is  re- 
vealed by  examination  of  some  of  the  textbooks  used  in  the  United 
States  during  the  past  iialf  century  or  more.  Wayland,  Bowen,  Amasa 
Walker,  Perry,  Meservey,  Newcomb,  Macvane,  Osborne — all  cover 
somewhat  the  same  general  ground.  Wa^'land's  Elements  of  Political 
Economy,  published  in  1837,  strikingly  resembles  many  recent  texts. 


1922]  The  Course  in  Elementary  Economics  619 

John  Stuart  Mill's  Principles  is  not  very  different  from  many  texts 
now  in  use,  except  that  it  is  somewhat  superior  to  most  of  them. 

College  work  in  economics  should  of  course  bear  some  relation  to  the 
work  given  in  the  high  school,  and  in  this  connection  another  reason 
appears  why  the  course  in  Elements  should  not  be  given  to  under- 
classmen. There  is  a  fortunate  tendency  toward  the  introduction  of 
more  of  the  social  sciences  in  high  school,  preferably  in  the  last  year. 
It  need  not  be  given  again  in  college  a  year  or  two  later.  One  argu- 
ment sometimes  urged  in  favor  of  giving  it  early  in  the  college  course, 
to  sophomores,  or  even  to  freshmen,  is  that  it  reaches  more  students 
then.  A  course  in  the  last  year  of  high  school,  however,  reaches 
several  times  as  many  boys  and  girls  as  a  course  in  college.  Further- 
more, it  will  perhaps  be  conceded  that  our  college  curriculum  should  be 
fashioned  largely  to  meet  the  needs  of  those  who  follow  through  to 
graduation,  rather  than  for  those  who  fall  by  the  wayside,  for  the  fit 
rather  than  for  the  unfit.  This  assumes  a  four-year  high  school  course, 
but  that  is  almost  universal  in  most  states  in  the  Middle  West  at  the 
present  time.  If  junior  colleges  should  be  established  in  large  numbers, 
the  college  curriculum  must  of  course  be  changed. 

There  has  been  a  widespread  appreciation  of  the  fact  that  under- 
classmen do  not  have  the  basis  of  information  necessary  to  a  thorough 
grasp  of  the  course  in  Principles ;  and  at  least  twenty  institutions  have 
provided  one  or  two,  or  even  as  many  as  three  courses,  to  precede  the 
Principles  and  lay  a  foundation  for  it.  The  courses  most  commonly 
prescribed  are  largely  historical  or  descriptive — Economic  History  of 
England,  Economic  History  of  the  United  States,  Commercial  Geog- 
raphy, Commercial  Industries,  Economic  Resources,  American  Econo- 
my, The  Economic  Order,  Modern  Economic  Life,  Industrial  Society, 
Industries  and  Commerce,  Descriptive  Economics,  etc. 

This  movement  is  in  the  right  direction,  but  it  does  not  go  far  enough. 
If  it  is  clearly  and  entirely  absurd,  as  many  economists  would  say,  to 
teach  Principles  of  Economics  to  freshmen,  because  freshmen  lack 
historical  and  factual  background,  it  is  only  slightly  less  absurd,  let 
us  say  about  33  per  cent  less  absurd,  to  try  to  teach  sophomores  these 
principles  after  a  descriptive  or  historical  course  or  two.  Or,  to  put 
it  in  another  way,  if  the  postponement  of  the  course  in  Principles  for 
one  year  and  the  injection  of  one  or  two  prerequisites  noticeably  im- 
proves the  students'  chances  of  getting  an  intelligent  grasp,  as  it  un- 
doubtedly does,  is  it  not  fair  to  assume  that  a  postponement  of  another 
year  or  two,  and  the  introduction  of  more  prerequisites  would  further 
improve  their  chances?  It  does  exactly  that,  in  the  experience  of  the 
writer.  The  difference  between  juniors  or  seniors  and  sophomores  is 
just  as  great  as  the  difference  between  sophomores  and  freshmen;  and 
this  difference  is  more  important  in  the  stud}^  of  the  Principles  than 


()2() 


John  Ise  [December 


in  tlie  study  of  any  other  course  in  economics.      Sophomores  handle 

the  hirgclv  descriptive  work  of  a  course  in  Marketing,  or  Commercial 

Geograpliy,  or  Economic  History  nearly  as  well  as  the  students  of  the     '| 

next  year,  but  tliey  do  not  do  Principles  nearly  so  well.     To  those    ji 

teachers  of  economics  who  haye  neyer  taught  Principles  to  juniors  and    !j 

seniors,  the  writer  ventures  to  suggest  a  year's  trial  of  such  a  course    |j 

as  one  of  the  pleasantest  tasks  that  the  teaching  profession  affords.  | 

The   course   in   Principles    should    not    follow   absolutely    all   other    i\ 

economics  courses,  to  be  sure.      Such  courses  as  Modern  Economic  Re-    i 

form,  Socialism,  or  History  of  Economic  Thought,  should  follow  the    J 

Principles,  or  at  least  should  be  taken  along  with  it.      Students  should    '>\ 

have  a  thorough  grasp  of  economic  physiology  before  they  attempt   j| 

economic  therapy.  | 

The  argument  has  sometimes  been  offered  that  if  the  course  in  the    s| 

Elements  is  too  difficult  for  underclassmen,  it  should  and  can  be  sim-   j 

plified ;  that  the  trouble  is  with  the  manner  in  which  the  course  is  given,    i 

It  is  doubtless  true  that  sometliing  can  be  given  to  sophomores  or  eyen    I 

freshmen  which  they  can  understand,  and  this  something  can  be  called 

Principles  of  Economics,  but  it  will  be  mainly  something  else.     The    I 

})rinciples  of  economics  are  not  simple,  and  cannot  be  made  simple.  ]| 

The  factors  involved  are  often  very  complex,  yariable  and  should  be 

weighed  with  mature  judgment.     For  instance,  take  the  question  of    i 

FisJier's   compensated   dollar.     The   writer   recalls    a   meeting   of   the   | 

American   Economic   Association  where   this   was   discussed   by    some   I 

of  the  ablest  authorities  on  money  in  this  country,  yet  there  was  the  i. 

widest  divergence  of  views,  not  only  as  to  its  practicability,  but  even  ii 

as  to  the  manner  of  operation  of  such  a  scheme.      If  we  charitably   | 

assume  that  some  of  the  economists  understood  the  question  clearly,   i 

we  shall  have  to  concede  that  an  approximately  equal  number — those  I 

of  opposing  views — did  not  know  much  about  the  question.     Yet  Ely's  ; 

Outlines  simplifies  the  matter  in  a  little  less  than  a  page.     Economic  ,; 

questions  and  economic  principles  are  not  simple,  and  any  attempt  to  ' 

make  them  simple  is  sometimes  a  misrepresentation  as  to  their  real  ' 

character.      Some  of  the  most  successful  "simple"  textbooks  have  been  i 

largely  descri])tive,  and  this  sort  of  work  is  excellent,  if,  as  in  the  high  i 

school,  it  is  the  best  that  can  be  done.     If  the  course  in  Principles  is  i 

mainly  a  superficial  hodge-podge  of  descriptive  material,  as  it  is  in  i 

sonic  textbooks  which  are  commonly  used,  it  is  merely  a  duplication  i 

of  work  which  the  student  does  later. 

From  still  another  angle  we  may  see  the  wide  scope  and  difficulty  of  a  i 
course  covering  the  entire  field  of  Economics.      How  many  professors  i 
of  economics  are  well  grounded  in  all  or  even  in  most  of  the  branches 
of  the  subject?     Doubtless  most  of  them  are  well  enough  schooled  to  ! 
teach  a  group  of  sophomores,  for  underclassmen  are  tolerably  gullible;  j 


1922]  The  Course  in  Elementary  Economics  621 

but  there  are  not  a  half-dozen  economists  in  the  United  States  of  broad 
enough  information  to  write  a  scholarly  and  adequate  text  comparable 
with,  let  us  say,  Taussig's  Principles  of  Economics — and  Professor 
Taussig  would  doubtless  admit  that  his  text  has  its  weak  chapters. 
Ely's  Outlines  is  the  work  of  four  men,  and  it  has  its  weak  chapters. 
All  of  the  textbooks  in  common  use  are  weak  in  spots,  because  the 
writers  have  been  unable  to  cover  so  much  ground  and  do  it  all  well. 
A  field  so  broad  and  difficult  that  not  even  veteran  economists  have 
been  able  to  cover  it  satisfactorily  in  a  textbook  is  obviously  a  pretty 
stiff  job  for  a  freshman  or  sophomore. 

One  reason  for  believing  that  the  preliminary  survey  course  is  bad 
pedagogy  is  that  it  is  being  discarded  in  some  departments  other  than 
economics.  The  writer  calls  to  mind  several  departments  at  the  Uni- 
versity of  Kansas  which  formerly  offered  introductory  general  courses 
for  their  major  students,  but  have  now  dropped  them. 

There  are,  it  is  conceded,  a  number  of  valid  arguments  for  giving  the 
Elements  in  the  first  or  second  year.  The  course  reaches  a  larger 
number  of  students  than  it  would  if  given  later;  it  is  more  valuable 
than  most  other  courses  to  those  students  who  leave  school  at  the  end 
of  a  year  or  two ;  it  aids  the  students  to  see  the  nature  and  scope  of  the 
field  of  economics  early  in  their  college  career;  it  gives  them  a  few 
principles  which  aid  them  in  later  work ;  it  serves  to  some  extent  as  a 
sifter  for  the  elimination  of  students  who  have  not  the  ability  to  pur- 
sue work  in  economics ;  and  it  serves  as  an  excellent  training  course 
for  the  younger  instructors,  giving  them  a  chance  to  teach  the  broader 
principles  of  economics  before  they  specialize  too  much.  All  of  these 
arguments  have  their  force,  but  they  are  not  important  enough  to 
justify  the  present  scheme. 

In  working  out  a  more  satisfactory  schedule,  the  courses  in  Economic 
History  present  a  rather  puzzling  problem.  A  course  in  Economic 
History  as  ordinarily  given,  has  somewhat  the  same  faults  that  inhere 
in  a  course  in  Principles.  It  covers  too  much,  and  it  often  leads  no- 
where. Perhaps  it  would  generally  be  admitted  that  history  is  valu- 
able only  as  far  as  it  aids  in  the  understanding  of  present  problems,  yet 
Economic  History  is  often  a  detached  study,  with  little  obvious  bear- 
ing on  present  problems.  Such  a  course  is  likely  to  cover  a  vast  field : 
history  of  agriculture,  history  of  land  policies,  land  tenure,  labor, 
manufactures,  industrial  development,  railroads,  shipping,  canals,  roads 
and  transportation,  money  and  banking,  tariff,  etc. ;  and  of  course 
there  is  not  much  time,  in  a  three-hour  course,  to  tie  all  this  matter 
down  to  present  problems.  In  other  words,  an  immense  mass  of  his- 
torical facts  is  dumped  upon  the  student,  in  the  serene  hope  that  he 
will  stow  it  away  and  find  it  useful  some  day.  This  is  not  entirely 
unprofitable,  for  the  student  will  very  likely  find  use  for  some  of  it 


622  John  Ise  [December 

before  he  forgets  it.  Probably,  however,  these  historical  data  would  be 
more  useful  in  the  solution  of  present  problems  if  they  were  presented 
directly  in  connection  with  those  problems.  For  instance,  perhaps 
the  place  for  consideration  of  the  history  of  transportation  is  not  in  a 
course  in  Economic  History,  but  in  the  course  in  Transportation; 
perhaps  the  place  for  history  of  money  and  banking  is  not  in  a  de- 
tached course  in  Economic  History,  but  in  the  course  in  Money  and 
Banking.  As  a  matter  of  fact,  a  course  in  Economic  History  is 
largely  duplication  of  work  which  is  given,  and  absolutely  must  be 
given,  elsewhere.  It  is  not  possible  to  treat  money  and  banking  intelli- 
gently without  the  history  of  money  and  banking,  or  transportation 
problems  without  the  history  of  transportation,  or  land  problems  with- 
out the  history  of  land  tenure,  or  tariff  questions  without  the  history 
of  the  tariff.  The  writer  does  not  mean  to  offer  any  objection  to  the 
study  of  economic  history  in  general,  for  a  good  knowledge  of  economic 
history  is  absolutely  essential  to  clear  economic  thinking.  The  point 
is  merch^  that  an  introductory  course  in  Economic  History,  although 
valuable,  involves  a  great  deal  of  duplication,  and,  like  the  intro- 
ductory course  in  Elements,  is  perhaps  not  the  most  profitable  use  of 
the  students'  time. 

The  lines  of  demarcation  between  courses  should  be  changed.  In 
the  past,  the  assumption  has  been,  to  some  extent,  that  lines  should 
be  drawn  between  the  principles,  the  history,  and  the  problems  them- 
selves. That  is,  principles  should  be  studied  in  one  course — the  prin- 
ciples governing  transportation,  land  problems,  money,  banking,  tariff, 
labor  problems,  etc.  Another  course,  or  group  of  courses,  entirely 
separate,  was  designed  to  cover  the  history  of  transportation,  land 
problems,  money,  banking,  tariff,  labor  problems,  etc.  Then  a  later, 
third  group  of  courses  was  supposed  to  take  up  the  problems  them- 
selves. In  this  third  group  of  courses  it  was  necessary  to  take  up 
again  the  history  and  principles  directly  pertaining  to  the  particular 
problems,  but  the  general  course  in  Principles,  and  perhaps  also  the 
courses  in  Economic  History,  still  stand  as  relics  of  an  outgrown 
system — partly  unprofitable  duplication.  Possibly  the  course  in 
Economic  History  should  be  retained,  since  it  has  been  well  organized 
in  most  universities,  but  it  should  not  duplicate  too  much  of  the  work 
given  later.  A  great  many  problems  arise  here  regarding  the  organ- 
ization of  other  courses  and  the  adjustment  of  the  different  courses  to 
each  other.  Some  courses  and  schedules  of  courses  have  "just  growed," 
and  a  complete  overhauling  would  in  many  cases,  secure  a  more 
effective  use  of  the  students'  time.  All  this,  however,  is  beyond  the 
scope  of  this  paper. 

In  conclusion  tlien,  a  four-year  course  in  economics  or  commerce 
should  begin  with   work  in  Industrial   and   Commercial   Geography, 


1922]  The  Course  in  Elementary  Econo?nics  623 

Accounting,  Business  Organization,  Marketing,  perhaps  Economic 
History  or  otlier  similar  courses.  These  courses  are  largely  descriptive 
or  at  least  reasonably  concrete,  are  probably  easiest  to  understand, 
and  some  of  them  can  be  taught  at  less  expense  than  Elements  or 
Principles,  because  they  are  better  adapted  to  the  lecture  method. 
With  these  should  be  taken  whatever  languages,  mathematics  and 
sciences  may  be  deemed  useful.  Following  this  should  come  more 
difficult  specialized  courses :  Money  and  Banking,  Railroads,  Foreign 
Trade,  etc. ;  and  in  the  senior  year  a  substantial  course  in  the  Prin- 
ciples of  Economics  should  be  given.  If,  with  readings  from  various 
authors,  a  fairly  comprehensive  text  is  used,  it  will  not  only  serve  to 
bring  out  the  broad  social  problems,  especially  those  of  distribution, 
and  to  draw  together  the  loose  ends  from  the  scattered  work  of  the 
preceding  years  into  some  sort  of  a  connected  and  logical  synthesis, 
but  will  also  serve  to  fill  in,  even  if  in  no  great  detail,  some  of  the  gaps 
in  the  students'  training.  One  great  gain  accruing  from  this  arrange- 
ment is  that,  when  the  student  graduates,  some  of  the  freshest  and 
clearest  impressions  that  he  carries  out  into  his  business  life  are,  not 
those  connected  with  accounting  or  investments  or  other  business  or 
"money-getting"  courses,  but  rather  the  great  questions  of  distribution 
and  social  welfare,  whose  understanding  means  intelligent  citizenship ; 
or,  if  the  student  chooses  to  take  graduate  work,  he  is  better  grounded 
for  the  specialized  work  of  a  graduate  course  than  he  would  be  if  he  had 
taken  his  Elements  two  or  three  years  earlier. 

It  may  not  be  amiss  to  point  out  that  at  least  two  universities  have 
arranged  schedules  somewhat  in  accordance  with  the  ideas  expressed 
here.  Stanford  offers  a  course  in  Principles  of  Economics,  which  is 
required  of  all  economics  majors  and  must  be  preceded  by  80  units 
of  University  credit.  At  the  University  of  Kansas  a  similar  course — 
called  Advanced  Principles — is  required  of  all  major  students  in  their 
senior  year,  while  underclassmen  are  advised  not  to  take  the  course 
in  Elements.  Several  years'  experience  in  teaching  Elements  to  under- 
classmen. Principles  to  junior  and  senior  non-majors,  and  Advanced 
Principles  to  senior  majors,  has  led  the  writer  to  the  unorthodox 
views  expressed  in  this  paper.  The  fact  that  these  views  are  contrary 
to  those  held  by  most  teachers  of  economics  establishes,  it  is  admitted, 
a  heavy  presumption  against  their  soundness,  but  it  is  hoped  that  the 
presumption  against  these  views  is  no  stronger  than  the  case  that 
stands  against  the  Elements  of  Economics  as  taught  in  most  univer- 
sities of  the  country. 

John  Ise. 

University  of  Kansas. 


REVIEWS  AND  NEW  BOOKS 
General  Works,  Theory  and  Its  History 

Principles  of  the  New  Economics.     By  Lionel  D.  Edie.      (New  York: 
Thomas  Y.  Crowell  Company.     1922.     Pp.  x,  525.     $2.75.) 

The  main  object  of  this  book  is  to  correlate  the  more  recent  develop- 
ments in  economic  thinking  with  the  principles  formulated  by  the  older 
schools  of  economists.  The  treatment  is  mainly  psychological.  The 
author  has  expanded  somewhat  the  work  already  done  by  Carleton 
Parker,  Whiting  Williams,  and  others.  Mr.  Edie  believes  that  there 
are  a  considerable  number  of  schools  of  new  economic  thought.  It  is 
his  task  to  elucidate  the  fundamental  unity  which  he  believes  exists. 
The  common  element  in  the  new  economic  thinking  he  discovers  in  the 
field  of  psychology ;  the  whole  book  is  thus  either  purely  descriptive  or 
a  study  in  applied  psychology. 

The  first  part  of  the  book  is  entitled  "Economic  Psychology."  In 
the  main  it  is  a  discussion  of  human  instincts  amplified  by  a  goodly 
number  of  examples  drawn  from  our  common  economic  life.  The 
second  part  is  a  discussion  of  economic  institutions  and  functions. 
Here  there  are  extended  chapters  on:  The  Scientific  Basis  of  Eco- 
nomics ;  Labor,  Its  Part  in  Production ;  Capital,  the  Rights  and  Duties 
of  Ownership ;  Management,  Its  Technique  and  Responsibilities ;  Mar- 
kets, Their  Principles  and  Strategy ;  Money  and  Credit,  Their  Service 
and  Dangers.  The  third  part  is  devoted  to  public  control,  economic 
radicalism  and  economic  democracy. 

After  reading  tlie  book  one  is  in  considerable  perplexity  to  know 
whether  it  is  a  treatise  on  applied  psychology  or  a  textbook  in  ele- 
mentary economics.  If  it  is  the  latter  there  are  certainly  many  im- 
portant omissions.  Presumably  the  object  of  a  text  in  economics  is 
to  explain  the  important  features  of  our  present  day  economic  order 
and  to  examine  the  principles  on  which  such  order  is  based.  There 
is  no  attempt  to  discuss  rent,  interest,  or  profits.  Wages  are  dis- 
missed with  a  mere  description  of  four  wage  theories,  and  a  considerable 
analysis  of  the  psychology  of  laborers.  Eighty-five  pages  are  given 
to  the  subject  of  markets,  but  only  six  pages  are  devoted  to  the  theory 
of  prices  and  even  this  is  meager,  general  and  unsatisfactory.  The 
purpose  of  the  book  as  indicated  by  the  title  is  to  present  principles 
and  yet,  outside  of  a  psychological  viewpoint,  the  primary  principles 
of  our  economic  regime  are  surprisingly  ignored. 

To  take  one  illustration  among  a  number  which  might  be  selected: 
the  chapter  on  Labor,  Its  Part  in  Production,  deals  considerably  with 
social  effects,  such  as  fatigue,  monotony,  industrial  accidents,  and  long 
hours.     In  all  this  the  human  cost  of  industry  is  elaborately  empha- 


1922]  General  Works,  Theory  and  Its  History  625 

sized.  A  great  deal  is  said  about  the  labor  problem,  but  there  is  little 
effective  analysis  of  the  underlying  factors  which  determine  wages. 
The  chapter  is  an  interesting  discussion  of  labor  ideas,  the  psychology 
of  the  laboring  class,  and  also  a  suggestive  outline  of  many  of  the 
descriptive  phases  of  the  labor  problem  itself.  The  section  on  immi- 
gration (pp.  157-164)  is  not  a  critique  of  the  relation  of  immigration 
to  wages  and  the  labor  market,  but  rather  a  brief  description  of  all 
aspects  of  immigration  ranging  from  the  causes,  types,  and  economic 
status  to  policies,  Americanization,  and  government  regulation. 

There  are  a  number  of  minor  faults;  I  should  judge  that  fully  one 
half  the  book  is  quotations  taken  from  other  authors.  Selecting  at 
random  ten  pages,  160-170,  I  find  seventeen  quotations  varying  in 
length  from  two  lines  to  half  a  page  or  more.  Without  doubt  this 
shows  excellent  editorial  work,  but  such  an  extensive  use  of  quotations 
would  seem  out  of  place  in  a  book  of  this  character.  The  bibliog- 
raphies at  the  end  of  the  chapters  are  ample,  but  there  is  a  failure 
to  place  the  references  in  alphabetical  order,  and  to  indicate  at  all 
the  relative  value  of  the  works.  In  some  places  there  are  significant 
omissions  of  the  best  books.  Factual  errors  are  found  in  a  number 
of  places,  as  on  page  468,  where  the  date  of  the  Addystone  Pipe  Com- 
pany decision  is  given  as  1904  rather  than  1899,  and  the  Northern 
Securities  decision  as  1905  instead  of  1904. 

As  a  matter  of  social  perspective  and  psychological  viewpoint  the 
book  is  reasonably  satisfactory,  but  as  an  economic  analysis  it  is  far 
f^om  being  adequate.  It  is  ver}-  readable  and  interesting  from  start 
to  finish ;  on  the  whole  it  is  free  from  bias ;  and  it  does  present  to  econo- 
mists in  a  suggestive  way  the  importance  of  using  data  made  avail- 
able in  psychology.  The  best  part  of  the  book  is  that  on  economic 
adaptation,  part  III,  which  is  treated  in  an  impartial  and  sympathetic 
way. 

Everett  W.  Goodhue. 

Introduction  to  Economic  Problems.  By  James  Dysaet  Magee.  (New 
York:  Charles  Scribner's  Sons.     1922.     Pp.  iv,  363.     $2.50.) 

Written  to  provide  a  basis  for  opening  up  the  discussion  of  economic 
problems  in  the  second  semester's  work  in  elementary  economics,  this 
book  presents  a  wide  range  of  problems  in  compact  form.  It  is  de- 
signed particularly  to  follow  Professor  Turner's  book,  Introduction 
to  Economics.  The  purpose  is  t-.vofold:  first,  "to  illustrate  and  en- 
force the  economic  principles  studied  in  the  first  course,"  and,  second, 
"to  provide  up-to-date  facts  and  discussions  of  the  economic  problems 
concerning  which  the  student  should  develop  opinions."  Its  treatment 
is  descriptive  rather  than  critical. 

In  all,  nineteen  different  topics  are  considered,  including  most   of 


626  Reviews  and  New  Books  [December 

the  conventional  economic  problems.  There  are  chapters  on  market- 
ing, business  cycles,  socialism,  labor  organization,  social  insurance, 
transportation,  trusts,  the  tariff,  federal  reserve  system,  governmental 
receipts  and  expenditures,  unfair  competition,  and  foreign  trade  and 
foreign  exchange.  The  chapters  vary  very  little  in  length,  the  main 
headings  and  sub-lieadings  are  clearly  indicated,  and  the  method  of 
presentation  is  uniform  throughout.  At  the  end  of  each  chapter  is  a 
set  of  questions  which  is  designed  to  stimulate  the  thinking  and  inde- 
pendent judgment  of  the  student,  and  which  also  serves  as  a  guide  to 
the  teacher  in  the  presentation  of  the  text  material. 

As  a  clear,  descriptive,  non-critical  exposition  of  the  various  topics 
the  book  is  eminently  successful.  It  is  well  adapted  to  the  use  of 
students  where  a  very  simple,  brief,  and  untechnical  statement  is  de- 
sired. There  is  little  in  the  book,  however,  which  would  stimulate  the 
critical  faculty.  For  students  who  have  spent  half  a  year  in  the  study 
of  the  principles  of  economics  as  developed  in  most  of  our  standard 
texts,  this  book  would  perhaps  be  too  elementary,  as  much  of  the  treat- 
ment is  extremely  naive  and  inconsequential.  Take  for  example  chapter 
five  on  The  Operation  of  the  Federal  Reserve  System.  There  is  a 
very  short  and  far  from  satisfactory  statement  of  some  of  the  im- 
portant features  of  that  system,  but  nowhere  in  the  chapter  do  we 
find  any  reference  to  a  problem  or  a  set  of  problems  which  relate  to 
the  operations  and  functions  of  the  federal  reserve  banks.  It  is  the 
kind  of  analysis  which  one  Avould  expect  to  find  in  any  very  elementary 
cx})lanation  of  the  system.  Most  of  the  other  topics  considered  in 
the  book  are  open  to  a  similar  criticism. 

Soniethiiig  uuist  be  said,  however,  for  a  clear,  concise  statement  of 
the  main  facts  at  issue.  There  is  a  place  for  such  an  arrangement  of 
data  unaccompanied  by  any  comment,  for  once  the  facts  of  the  case 
are  placed  before  the  student  we  may  trust  to  his  good  sense  and 
judgnuiit  to  formulate  an  intelligent  opinion.  The  descriptive  portion 
is  in  the  main  stated  clearly  and  cogently.  The  objection  is  that  in 
many  })laces  the  description  is  only  partial  and  that  in  most  of  the 
so-callrd  problems  taken  up  no  attempt  is  made  to  show  just  what  the 
problem  really  is.  In  reading  these  chapters  one  is  scarcely  aware 
that  any  jiroblcm  exists. 

EvEEETT  W.  Goodhue. 

Diirt iiioiith  College. 

NEW  BOOKS 

Baxtku,    G.      Ba.rtcr's    economics.      (Norfolk,    Va. :    Author.      1922.      Pp. 

317.) 
Becker,  C.      The  Declaration  of  Independence:  a  study  in  the  history  of 

political  ideas.      (New  York:  Harcourt,  Brace  &  Co.      1922.      Pp.286.) 
Chapter  2  discusses  the  "Historical   antecedents   of  the   Declaration: 

the  natural  rights  philosophy." 


1922]  General  Works,  Theory  and  Its  History  627 

Blackmar,  F.  W.     Justifiable  individualism.      (New  York:  Crowell.      1922. 
Pp.  142.     $1.) 

BouGLE,  C.      Legons  de  sociologie  sur  revolution  des  valeurs.      (Paris:  Lib. 
Armand  Colin.      Pp.  xv,  287.      7  fr.) 

This  interesting  little  work,  the  outgrowth  of  lectures  at  the  Sorbonne 
by  one  of  the  chief  disciples  of  Durkheim,  treats  of  religion,  morals, 
industry,  science,  and  art  as  values.  Values  are  defined  as  "permanent 
possibilities  of  satisfaction."  After  an  account  of  the  formation  of  value 
judgments  by  the  individual,  Bougie  proceeds  to  argue  that  in  the  absence 
of  social  contacts  these  judgments  could  not  acquire  coercive  power  and, 
indeed,  could  not  come  into  being.  His  effective  demonstration  that  social 
forces  contribute  to  the  establishment  of  values,  does  not  prove  that  they 
are  in  every  case  a  necessary  condition.  Like  Durkheim,  Bougie  takes 
no  account  of  the  great  thinkers  and  mystics  who  have  gone  so  far  beyond 
their  contemporaries  and  associates  that  they  cannot  even  fully  commu- 
nicate their  experiences.  Do  not  such  men  as  individuals  originate 
values  .^  And,  if  individuals  cannot  originate  values,  what  is  the  source 
of  the  new  values  which  appear  from  time  to  time.^  Our  author  pre- 
sents an  instructive  discussion  of  the  relations  between  different  values, 
and  of  differentiations  and  combinations  among  them,  but  as  the  origin 
of  the  materials  differentiated  and  combined  remains  a  mystery,  he  can- 
not be  said  to  have  given  an  adequate  account  of  the  "evolution  of 
values." 

G.  A.   Kleene. 

CossA,  L.      Premiers  elements  d'economie  politique.      (Paris:  Giard.      1922. 
Pp.  257.) 

A  skeleton  of  economics.  A  very  brief  statement  of  economic  doctrine 
according  to  the  author.  The  chapters  are  made  up  of  paragraphs  defining 
in  a  few  words  the  economic  terms  which  are  printed  in  italics.  There 
is  a  good  bibliography  at  the  end  of  each  chapter,  though  it  is  hardlv 
brought  up  to  date.  The  translation  from  the  Italian  is  by  Alfred 
Bonnet  from  the  fourteenth  edition  of  Cossa's  book.  R.  R.  vV. 

Dickinson,  Z.  C.      Economic  motives.      A  study  in  the  psychological  founda- 
tions of  economic   theory,  xcith    some   reference   to   other   social   sciences. 
(Cambridge:  Harvard  Univ.  Press.      1922.      Pp.  vii,  30i.      $2.50.) 
Fisher,  L.      Getting  and  spending,  an  introduction  to  economics.      (London: 

King.      1922.      3s.  6d.) 
Hayes,  H.  G.      Problems  and  exercises  in  economics.      Second  edition.  (Xew 
York:  Holt.      1922.      Pp.  vi,  138.) 

The  preface  states:  "The  list  of  problems  published  six  years  ago  has 
been  considerably  altered  for  the  present  edition.  While  some  of  the 
problems  of  the  first  edition  are  included  in  this  edition  without  alteration 
for  the  most  part  substitutions  have  been  made  for  the  original  problems 
or  they  have  been  rewritten." 

Johnson,  A.  S.     Introduction  to  economics.      Revised  edition.      (Xew  York: 
D.  C.  Heath  &  Co.      1922.      Pp.  xiv,  tSl.) 

"This  revision  has  left  the  greater  part  of  the  text  intact."  A  new 
chapter  on  Management  has  been  inserted  and  manv  minor  changes 
have  been  made  "usually  with  the  object  of  clearing  up  obscurities  which 
might  confuse  the  student;  occasionally  with  the  object  of  softenino-  the 
outlines  of  a  conclusion.  .  .  .too  absolute  and  uncompromising." 


528  Reviews  and  New  Books  [December 

Jones,  R.     A  primer  of  social  science.      (London:  Constable.      1922.     4s.) 
Lapp,  J.  A.     Economics  and  the  community.      (New  York:  Century.      1922. 

Pp.  xiv,  366.     $1.75.) 
LoRiA,  A.     /  fondamenti  scientifici  della  riforma  economica.      (Turin:  Fra- 
telliBocca.      1922.      Pp.575.     60  1.) 

This  is  a  brave  attempt  to  show  the  possibilities  of  the  increased  pro- 
duction of  material  goods  as  the  basis  of  social  progress,  ajid  the  limits  of 
such  increase.  The  author  submits  the  ways  of  the  present  system  to  a 
searching  criticism  and  shows  how  we  are  suffering  from  "underpro- 
duction." He  analyzes  this  underproduction  and  the  conditions  of  it  in 
detail  with  much  acumen,  and  classifies  it  under  two  heads:  "normal 
underproduction,"  which  is  the  difference  between  what  is  actually  pro- 
duced and  wliat  might  be  produced  under  the  present  system  of  industry, 
as,  for  instance,  when  technical  improvements  by  which  production 
would  he  increased  are  not  introduced  because  the  increased  product  could 
only  be  sold  at  a  price  too  low  to  cover  the  cost  and  the  return  on  capital 
at  the  existing  rate;  and  "supernormal  underproduction,"  due  not  to  the 
necessity  of  maintaining  the  present  rate  of  profits  and  wages,  but  to 
the  attempt  to  increase  one  or  both  of  these  beyond  that  rate.  The  pro- 
gress of  society  depends  on  the  elimination  of  these  two  forms  of  under- 
production. The  book  contains  interesting  discussions  of  the  increased 
productivity  due  to  the  increase  of  the  population;  of  the  question  as  to 
whether  tlie  end  to  be  attained  is  the  greatest  amount  to  be  produced  by 
the  individual  workman  or  the  greatest  amount  to  be  produced  by  the 
whole  population,  an  increase  in  the  latter  being  compatible  with  a  de- 
crease in  the  former;  of  the  way  in  which  national  income  should  be 
calculated;  of  the  "quantitative"  and  "qualitative"  changes  possible  in 
the  progress  of  society.  It  is  impossible  in  a  short  notice  to  do  more 
than  direct  attention  to  the  author's  skill  in  the  treatment  of  his  subject, 
and  to  the  vast  extent  of  the  knowledge  displayed  by  the  doyen  of  econo- 
mics in  Italy.  R.  R.  W. 

Ralston,  J.  IL     Democracy's  international  law.  (Washington:  John  Byrne 
&  Co.      1922.     Pp.  165.     $1.50.) 

St.   Lewi.ntski,  J.     The  founders   of  political   economy.      (London:    King. 
1922.     Pp.  173.     6s.  6d.) 

A  small  book  on  a  large  subject,  very  readable  but  inevitably  very 
incomplete.  The  autlior's  aim,  however,  is  not  to  give  an  exhaustive 
account  but  to  pick  out  theories  which  may  still  be  of  help  from  those 
advanced  by  the  founders.  The  first  chapter  makes  some  references  to 
discussions  of  monetary  disturbances  beginning  with  Oresmes'  Tractatus 
in  tlic  fourteenth  century,  but  emphasizes  especially  the  importance  of  the 
second  half  of  the  seventeenth  century  in  the  development  of  economic 
thinking.  Sir  William  Petty  is  the  hero  of  the  chapter.  Chapter  2 
gives  a  good  account  of  the  economics  of  the  physiocrats  and  very  prop- 
erly insists  on  the  originality  and  historical  significance  of  their  analysis 
of  capital.  The  third  chapter  is  devoted  to  Adam  Smith,  and  the  fourth 
and  most  extensive  to  Ilicardo,  to  whom  we  owe  "the  most  precious  gems 
of  political  economy — the  theory  of  value  and  the  theory  of  rent."  A 
very  summary  concluding  chapter  would  persuade  us  that  not  much  has 
been  done  since  Ricardo.  Some  doubts  as  to  the  author's  competence 
to  judge  all  modern  economic  theory  are  aroused  by  his  comments  on 


1922]  General  Works,  Theory  and  Its  History  629 

von  Thiinen  (p.  165),  on  the  marginal  utility  theorists  (pp.  129  and  133), 
and  on  von  Bohm-Bawerk  (footnote,  p.  134). 

G.  A.  K. 

ToTOMiANTZ,    V.   Th.     Histoive    des    doctrines    economiques    et    sociales. 
(Paris:  Giard.  1922.      Pp.238.) 

A  course  of  lectures  given  at  the  University  of  Moscow.  Each  lecture 
is  on  the  economic  theories  of  a  definite  period;  the  first  deals  with  those 
of  ancient  times,  the  last  with  those  of  what  the  author  calls  the  "coopera- 
tive school"  of  the  present.  The  chapters  on  the  mercantilists,  the 
physiocrats,  and  the  Austrian  economists  are  well  done,  but  it  is  a  pity 
that  each  chapter  has  not  a  bibliography.  R.  R.  W. 

WiLBRANDT,   R.      Oekonomie.     Ideen  zu   einer  Philosophie  und  Soziologie 
der  Wirtschaft.      (Tiibingen:  Mohr-Siebeck.      1921.      Pp.  152.) 

The  author,  a  professor  at  the  University  of  Tiibingen,  is  by  natural 
disposition  a  reformer.  The  methods  and  the  results  of  our  present 
economic  science  seem  to  him  far  from  being  really  scientific.  Their 
maxims  and  postulates,  generally  founded  as  they  are  on  merely  indi- 
vidual aims  and  ideals,  lack  conclusiveness  as  well  as  universal  applic- 
ability. Wilbrandt  seeks  a  firmer  ground  on  which  to  build  up  his  own 
system.  No  matter  how  great  the  variety  of  the  practical  aims  of  men 
are,  we  have,  in  his  opinion,  first  of  all  to  acknowledge  the  stubborn 
fact  that,  though  we  may  strive  as  hard  as  possible,  we  cannot  reach  any 
practical  goal  if  we  do  not  get  the  means  required  for  that  purpose.  The 
enemy  fought  by  "Oekonomie"  is  the  deficiency  of  the  means  required 
for  any  kind  of  practical  aim;  preventing  such  deficiency  must  be  its 
foremost  object.  The  economist  must  not  be  expected  to  be  a  critic  of 
the  different  aspirations  of  men.  The  science  of  economics  amply  fulfils 
its  task  if  it  is  able  to  show  us  effective  methods,  enabling  us  to  avoid 
any  such  deficiency,  and  if  it  helps  every  one  who  is  striving  to  attain 
a  certain  end;  whoever  successfully  applies  such  methods  to  practical 
life,  practices  "Oekonomie"  in  the  strictest  sense  of  the  term. 

Taking  this  as  a  basis  for  further  consideration,  the  author  is  led 
also  to  a  critical  appreciation  of  the  given  economic  conditions,  but  an 
appreciation  now  founded  on  objective,  no  longer  on  subjective,  principles. 
The  starting-point  of  all  investigations  and  the  supreme  principle  of  all 
criticism  is  always  the  same,  that  is,  the  question :  What  is  to  be  done,  if 
we  want  to  bring  our  national  economy  to  the  highest  possible  efficiency.'' 
Starting  from  this  principle,  Professor  Wilbrandt  develops  his  system, 
always  taking  care  not  to  let  any  moral  or  political  opinion  interfere  with 
his  deductions.  He  distinguishes  four  characteristic  forms  of  economic 
organizations — namely,  the  economic  state  of  one  isolated  disposing  will 
(Alleinwirtschaft),  that  of  mutual  exchanges  (Tauschwirtschaft),  that  of 
collectivism  (Gemeinwirtschaft),  and  that  of  renunciation  (Hingabe- 
wirtschaft).  He  supposes  that  a  chronological  order  of  these  four  types 
is  possible,  each  of  them  being  more  difficult  of  realization  and  each 
bringing  economic  success  into  the  reach  of  a  greater  number  of  indivi- 
duals, than  the  preceding  one.  He  shows  how  these  four  types  of  organ- 
ization correspond  psychologically  to  four  political  types,  conservatism, 
liberalism,  socialism,  and  anarchism.  The  author  intends  to  develop  these 
views  fully  in  a  series  of  further  publications. 

Eugene  Schwiedland. 
Vienna. 


630  Reviews  and  New  Books  [December 

Williams,  J.  M.  The  principles  of  social  psychology,  as  developed  in  a 
study  of  economic  and  social  conflict.  (New  York:  Knopf.  1922.  Pp. 
xii,  '1.59.     $5.) 

Economic  History  and  Geography 

NEW    BOOKS 

Allen,  N.  B.  Geographical  and  industrial  studies;  North  America.  (Bos- 
ton: Ginn  &  Co.      1922.     Pp.  391.) 

Beard,  C.  A.  The  economic  basis  of  politics.  (New  York:  Knopf.  1922, 
Pp.  99.) 

Bell,  P.  S.  Venezuela:  a  commercial  and  industrial  handbook.  Depart- 
ment of  Commerce,  Special  Agents  series  212.  (Washington:  Supt.  Docs. 
1922.      Pp.  xvi,  472.      $1.) 

Buck,  S.  J.  The  agrarian  crusade;  a  chronicle  of  the  farmer  in  politics. 
(New  Haven:  Yale  Univ.  Press.      1921.      Pp.  xi,  215.) 

Chisholm,  G.  G.  Handbook  of  commercial  geography.  Ninth  edition. 
(New  York,  Longmans,  Green.      1922.      Pp.  xvi,  821.     $7.50.) 

Colombino,  E.  La  tragedia  rivoluzionaria  in  Europa.  (Florence:  Bem- 
porad,  Critica  Sociale.      1922.      Pp.  vii,  209.) 

Cromn-Wolfgang,  H.  F.  Der  englische  U eberseekaufmann  im  Zeitalter 
der  Entdeckungen.  Zcitschrift  fiir  die  gesamte  Staatswissenschaft, 
1921,  Heft  4.  (Tiibingen:  Verlag  der  H.  Laupp'schen  Buchhandlung. 
1921.      Pp.  397-42G.) 

DoDD,  W.  E.  The  cotton  kingdom;  a  chronicle  of  the  old  South.  (New 
Haven:  Yale  Univ.  Press.      1921.      Pp.  ix,  161.) 

Farquiiar,  a.  B.  The  first  million  the  hardest;  an  autobiography.  (Gar- 
den City,  N.  Y. :  Doubleday,  Page.      1922.      Pp.  xi,  323.) 

Fleming,  G.  T.  History  of  Pittsburgh  and  environs,  from  prehistoric  days 
to  the  beginning  of  the  American  Revolution.  Three  vols.  (New  York: 
American  Historical  Society,  Inc.      1922.) 

FuETER,  E.  World  history,  1815-1920.  Translated  by  S.  B.  Fay.  (New 
York:  Harcourt,  Brace  &  Co.      1922.      Pp.  490.) 

Several  chapters  are  devoted  to  economic  factors  involved  in  the  history 
of  the  last  century. 

Gammon,  S.  R.,  Jr.      The  presidential  campaign  of  1832.     Johns  Hopkins     '. 
Univ.  studies  in  historical  and  political  science,  vol.  XL,  no.   1.      (Balti- 
more: Johns  Hopkins  Press.      1922.      Pp.  x,  180.) 

Chapter  5  is  entitled  "The  injection  of  the  Bank  into  the  campaign."     '>{ 

GLEisPACTt,  W.  Present-day  social  and  industrial  conditions  in  Austria.  t 
Supplement  to  The  Annals,  November,  1921.  (Philadelphia:  Am.  ' 
Academy  of  Political  and  Social  Science.      1921.      Pp.  xiii,  74.) 

Goi.nKNWKisKR,  A.  A.  Early  civilization,  an  introduction  to  anthropology. 
(New  York:  Knopf.      1922.      Pp.  xxiv,  424.      $3.) 

Goodwin,  Cardinal.  The  trans-Mississippi  west,  lSOS-1853;  a  history  of 
its  acquisition  and  settlement.  (New  York:  Appleton.  1922.  Pp.  x, 
528.     $3.50.) 


1922]  Economic  History  and  Geography  631 

Gras,  N.  S.  B.     An  introduction  to  economic  history.      (New  York:  Harper. 

1922.     Pp.  350.) 
Hendrick,  B.  J.      The  age  of  big  business;  a  chronicle  of  the  captains  of 

industry.      (New  Haven:  Yale  Univ.  Press.      1921.      Pp.  ix,  196.) 

HuLBERT,  A.  B.  The  paths  of  inland  commerce ;  a  chronicle  of  trail,  road, 
and  waterxvay .      (New  Haven:  Yale  Univ.  Press.      1921.      Pp.  xi,  211.) 

Huntington,  E.  and  Williams,  F.  E.  Business  geography.  (New  York: 
John  Wiley  &  Sons,  432  Fourth  Ave.      1922.      Pp.  x,  482!) 

KoEBEL,  W.  H.,  editor.  Anglo-South  American  handbook,  including  Central 
America,  Mexico  and  Cuba,  for  1922.  (New  York:  Macraillan.  1922. 
Pp.  Ixxviii,  888.     $7.50.) 

Lawson,  L.  a.  The  relation  of  British  policy  to  the  declaration  of  the 
Monroe  Doctrine.  Columbia  Univ.  studies  in  history,  economics  and 
public  law,  vol.  CIII,  no.  1.  (New  York:  Longmans,  Green.  1922. 
Pp.  153.     $1.50.) 

Levy,  H.  Die  englische  Wirtschaft.  (Leipzig:  Tuebner.  1922.  Pp.  iv, 
153.     $1.30.) 

LiPsoN,  E.  A  history  of  the  English  woolen  and  worsted  industries.  (New 
York:  Macmillan.      1921.      Pp.  273.      $4.) 

MacDonald,  W.  Reconstruction  in  France.  (New  York:  Macmillan. 
1922.      Pp.  viii,  349.     $2.50.) 

Contains  chapters  on  The  Restoration  of  Transport,  The  Recon- 
struction of  Industry,  The  Restoration  of  the  Mines,  The  Revival  of 
Agriculture,  and  The  Problem  of  Finance. 

Malinowski,  B.  Argonauts  of  the  Western  Pacific.  (London:  Routledge. 
New  York:  Button.      1922.      Pp.  527.      21s.) 

The  subtitle  of  this  volume  is  "An  account  of  native  enterprise  and 
adventure  in  the  archipelagoes  of  Melanesian  New  Guinea."  Chapter  6 
deals  with  tribal  economics. 

Mann,  H.  H.  and  Kanitkar,  N.  V.  Land  and  labor  in  a  Deccan  village. 
Study  no.  2.  (New  York:  Oxford  Univ.  Press.  1922.  Pp.  viii,  182. 
$3.) 

Morgan,  R.  B.,  editor.  Readings  in  English  social  history  from  contem- 
porary literature.  Vol.  IV,  1603-1688.  (New  York:  Macmillan.  1922. 
Pp.  xii,  106.     $1.40.) 

Morris,  G.  W.  and  Wood,  L.  S.  The  golden  fleece:  an  introduction  to  the 
industrial  history  of  England.  (New  York:  Oxford  Univ.  Press.  1922. 
Pp.  224.) 

An  elementary  book  written  in  an  interesting  style  with  illustrations. 

Oberholtzer,  E.  p.  a  history  of  the  United  States  since  the  Civil  War. 
In  five  vols.  Vol.  II.  (New  York:  Macmillan.  1922.  Pp.  xi,  649. 
$4.) 

Covers  the  period  1868-1872.  Among  the  topics  discussed  are  funding 
the  debt,  the  legal  tender  decision,  protection  and  free  trade  during  the 
period  referred  to,  the  development  of  the  Far  West,  and  the  construction 
of  the  transcontinental  railroads. 

Paine,  R.  D.  The  old  merchant  marine ;  a  chronicle  of  American  ships  and 
sailors.      (New  Haven:  Yale  Univ.  Press.      1921.      Pp.  ix,  214.) 


632  Reviews  and  New  Books  [December 

Palm,  F.  C.  The  economic  policies  of  Richelieu.  Studies  in  the  social 
sciences,  vol.  IX,  no.  4.  (Urbana,  111.:  Univ.  of  Illinois.  1922.  Pp. 
202.     $1.50.) 

Peck,  A.  S.  Industrial  and  commercial  South  America.  (New  York: 
Button.      1922.      Pp.  xviii,  509.) 

PoRRi,  V.  Cinque  anni  di  crisi  nel  Veneto — 191Jf-1918.  (Rome:  L'Am- 
ininistrazione  della  Guerra.      1922.      Pp.  xii,  94.) 

PoRRiTT,  E.  The  fiscal  and  diplomatic  freedom  of  the  British  oversea 
dominions.      (New  York:  Oxford  Univ.  Press.      1922.      Pp.  492.) 

According  to  the  editor,  President  David  Kinley,  "This  book  is  osten- 
sibly a  story  of  fiscal  progress,  of  trade  and  industry.  It  is  a  story  of 
growth  of  nationalities,  of  adjustments  of  the  economic  and  political  life 

of  her  colonies  to  her  mother  country The  fiscal  history  of  Canada 

resembles  in  some  respects  that  of  the  United  States.  Discussion  of 
tariff  and  protection  has  played  a  large  part."  Part  I  is  entitled  "The 
new  IJritisli  fiscal  system";  part  II,  "The  protectionist  movement  and 
protectionist  legislation  in  the  self-governing  colonies,  1858-1914";  part 
III,  "Fiscal  freedom  and  diplomacy,  1848-1907";  part  IV,  "Responsible 
government  and  fiscal  diplomatic  freedom."  In  the  appendix  are  docu- 
ments relating  to  tariff  policy. 

Remkr,  C.  F.  Readings  in  economics  for  China.  Selected  materials  with 
crplanatori/  introductions.  (Shanghai:  Commercial  Press,  Paoshan  Road. 
1922.  Pp.  X,  685.) 

Sarkar,  B.  K.  The  political  institutions  and  theories  of  the  Hindus.  A 
stud//  in  comparative  politics.  (Leipzig:  Verlag  von  Markert  &  Fetters. 
1922.      Pp.  242.      $3.36.) 

Has  chapters  on  Property  and  Woman  in  Private  Law,  Organized 
Charities  and  Utilities,  National  Finance,  Taxes  as  Wages  and  Prices,  and 
The  Theory  of  Property,  Law  and  Social  Order. 

ScHKviLL,  F.  The  history  of  the  Balkan  peninstda  from  the  earliest  times 
to  the  present  day.    (New  York:  Harcourt,  Brace  &  Co.    1922.    Pp.  558.) 

SciiLiKR,  O.  Der  deutsche  Industrielkorper  seit  1860.  (Tiibingen:  Mohr. 
1922.      Pp.  vii,  80.      75  M.) 

The  geography  of  the  chief  German  industries  from  1860  to  1907,  with 
two  colored  maps,  and  statistical  tables  showing  the  growth  of  the  in- 
dustrial poi)ulation  in  the  different  districts  and  its  distribution  in  the 
various  trades.  p^    j^    ^^ 

Stefanson,  V.  The  northward  course  of  empire.  (New  York:  Harcourt, 
Brace  &  Co.      1922.      Pp.  xi,  274.) 

rnoMsox  H.  The  age  of  invention;  a  chronicle  of  mechanical  conquest. 
(  hronicles  of  America  series,  vol.  XXXVII.  (New  Haven:  Yale  Univ. 
Press.      1921.      Pp.  xii,  267.) 

Ticker,  D.  S.  The  evolution  of  people's  banks.  Columbia  University 
studies  in  history,  economics  and  public  law,  vol.  CII,  no.  1.  (New 
lork:  Longmans,  Green.      1922.      Pp.272.     $2.75.) 

Warshaw.  J  The  nerc  Latin  America.  (New  York:  Crowell.  1922.  Pp. 
41o.      •+'3.) 


1922]  Economic  History  and  Geography  633 

Wells,  L.  R.     Industrial  history  of  the  United  States.      (New  York:  Mac- 
millan.      1922.      Pp.  xiii,  584.     $2.) 

A  review  of  one  new  secondary  text  in  economic  or  industrial  history 
could  serve  fairly  well  as  a  review  of  all  the  recent  ones,  so  similar  are 
they  in  make-up,  treatment  of  material,  and  superior  quality  in  general. 
It  is  not  easy  to  see  wherein  this  excellent  little  volume  differs  appreciably 
from  other  late  texts  in  the  same  field.  It  gives  not  only  the  facts  but 
"the  whys  and  wherefores  of  the  facts."  It  follows  the  customary  prac- 
tice of  marking  off  our  country's  economic  growth  into  four  chief  eras 
as  follows:  (1)  the  colonial  period  to  1763;  (2)  the  period  of  transition, 
1763  to  1825;  (3)  national  consolidation  and  isolation,  1825  to  1860; 
(4)  the  readjustment  period,  entitled  "Combination,  organization,  regu- 
lation: the  end  of  the  frontier."  The  book  is  divided  into  four  parts 
corresponding  to  these  four  divisions;  the  largest  space,  almost  half  the 
book,  is  devoted  to  conditions  since  1860.  The  effects  of  the  Great  War 
are  little  mentioned  as  the  author  thinks  "it  will  be  some  time  before 
these  effects  are  stabilized  enough  to  be  appraised  satisfactorily."  Mr. 
Wells  considers  the  distinguishing  trait  of  his  text  to  be  its  emphasis  on 
three  factors,  namely,  westward  expansion,  immense  natural  resources, 
and  increased  contact  of  people  with  one  another.  These  fundamental 
influences  he  believes  led  to  the  creation  of  a  colossal  domestic  market 
which,  in  its  turn,  caused  the  economic  transformation  of  the  nineteenth 
century. 

From  the  point  of  view  of  the  classroom  this  history  typifies  the  present- 
day  schoolbook  that  has  come  into  being  since  writers  who  are  seasoned 
teachers  as  well  as  absent-minded  professors  have  taken  up  the  prepara- 
tion of  texts.  The  paper  is  unglazed,  the  print  good  sized,  the  cuts 
remarkably  well  produced.  Each  chapter  is  introduced  by  a  simple  out- 
line, sketching  what  lies  ahead.  Headings  indicate  by  the  type  whether 
the  paragraph  is  principal  or  subordinate.  The  pictures  are  unusual  and 
keenly  interesting;  they  make  exceedingly  real  the  methods  in  use  today 
on  farms  and  in  factories.  There  is  a  sufficient  but  not  depressing  num- 
ber of  maps  and  statistics.  A  fairly  comprehensive  bibliography,  to- 
gether with  questions  for  discussion  and  debate,  follows  each  chapter. 
The  student  thus  loses  the  educative  training  of  making  his  own  biblio- 
graphy, yet  this  work  is  often  not  feasible.  The  references  listed  impress 
one  as  calling  for  a  more  adequate  library  than  the  average  high  school 
possesses. 

Amelia  C.  Ford. 

Westergaard,  H.  Economic  development  in  Denmark  before  and  during 
the  World  War.  Publications  of  the  Carnegie  Endowment  for  Interna- 
tional Peace.      (New  York:  Oxford  Univ.  Press.      1922.      Pp.  xii,  106.) 

Economic  situation  in  Denmark ,  to  March,  1922.  (London:  H.  M.'s  Sta- 
tionery Office.      1922.      Is.  6d.) 

Economic,  financial  and  industrial  conditions  of  the  Netherlands,  February, 
1922.      (London:  H.  M.'s  Stationery  Office.      1922.      Is.  3d.) 

Hamburg.      Her  political,  economic,  and  cultural  aspects.      Translated  by 

W.  J.  Eggers.      (Hamburg:  L.   Friederichsen  &  Co.      1922.      Pp.   194.) 

Chapters  on  Political  and  Economic  History,  Hamburg  as  a  Shipping 

Center,  Commercial  and  Industrial   Life,  including  commerce,  banking, 

and  marine  insurance. 


634  Reviews  and  New  Books  [December 

Industrial,  commercial  atid  eco7iomic  situation  in  Poland,  February,  1922. 
(London:  H.  M's  Stationery  Office.      1922.      Is.  3d.) 

Industrial  year  hook,  1922.  Edited  by  Philip  Gee.  (London:  King. 
1922.      36s.) 

La  Roumanie  economiqiie.  Ministere  de  I'lndustrie  et  du  Commerce.  (Bu- 
carest:  Iraprimerie  de  la  Cour  Royale.      1921.      25  lei.) 

Russia:  a  consideration  of  conditions  as  revealed  by  soviet  publications. 
(New  York:  American  Bankers'  Assoc,  Commission  on  Commerce  and 
Marine.      1922.      Pp.  36.) 

The  statesman's  year-book.  Statistical  and  historical  annual  of  the  states 
of  the  tvorld  for  the  year  1922.  (New  York:  Macmillan.  1922.  Pp. 
xlvii,  1568.     $7.50.) 

The  tzventy-first  financial  and  economic  annual  of  Japan.  (Tokyo:  Gov. 
Prtg.  Office.      1921.      Pp.  232.) 

Ttco  centuries  of  travel  in  Essex  County,  Massachusetts.      A   collection  of 
narratixH's  and  observations  made  by   travelers,  1605-1799.      (Topsfield, 
Mass.:  Topsfield  Historical  Society.  '    1922.      $4.) 
Collected  and  annotated  by  George  Francis  Dow. 

Agriculture,  Mining,  Forestry,  and  Fisheries 

NEW    BOOKS 

Emmons,  W.  H.  General  economic  geology,  a  textbook.  (New  York: 
McGraw-Hill.      1922.      Pp.  xii,  516.      $1.) 

Fox,  L.  H.  A  philosophic  viexc  of  the  land  question.  (London:  Kingsley 
Press.      1921.      Pp.  211.) 

Green,   ¥.   R.     A   netv  agricultural   policy.      (London:    Leonard    Parsons. 

1921.  Pp.  109.) 

LivESEY,  W.  The  mining  crisis,  its  history  and  meaning  to  all  -workers. 
(London:  Simpkin,  Marshall,  Hamilton,  Kent  &  Co.      1921.      Pp.  vi,  89.) 

Malcolmson,  V.  A.  The  place  of  agriculture  in  the  life  of  a  nation. 
(London:  King.      1922.      3d.) 

Meyer,  E.  Farm  financing  and  business  prosperity.  (Washington:  Au- 
thor, War  Finance  Corporation.      1922.      Pp.  M.) 

North,  S.  H.,  editor.  The  petroleum  year  book  for  1921.  (New  York: 
Spon  &  Chamberlain.      1921.      Pp.  ix,  251.      $3.50.) 

Orr,  J.  A  short  history  of  British  agriculture.  (New  York:  Oxford  Univ. 
Press.      1922.      Pp.  96.) 

Sabsovich,  K.  Adventures  in  idealism:  a  personal  record  of  the  life  of 
Professor  Sabsovich.      (New  York:  Author,  Room  1715,  80  Maiden  Lane. 

1922.  Pp.  vii,  208.) 

The  desire  to  help  his  fellow  Jews  to  find  themselves  through  productive 
work  in  agriculture  was  the  dominating  influence  in  Professor  Sabso- 
vicli's  life  as  related  by  his  widow.  The  first  impulse  came  while  he  was 
a  law  student,  tlirougli  a  society  which  he  helped  to  start  in  Odessa  during 
a  period  of  pogroms,  for  the  purpose  of  furthering  emigration  to  America 


1922]  Transportation  and  Comninnication  635 

and  founding;  agricultural  colonies  there.  In  1890  he  was  invited  to 
manage  a  Jewish  agricultural  colony  at  Woodbine,  New  Jersey,  financed 
by  the  Baron  de  Hirscli  Fund.  Farms  were  loaned  to  colonists  on  a 
ten-year  plan  of  payment.  From  the  most  unpromising  material  Sab- 
sovich  gradually  built  up  a  prosperous  community  which  included,  be- 
sides the  farms,  factories,  schools,  a  social  center  and  a  Civic  Club.  The 
Woodbine  Agricultural  School,  a  pioneer  of  its  kind,  combined  classwork 
with  practical  experience  and  the  opportunity  for  self-support.  Students 
spent  one  whole  year  at  the  school,  and  for  two  more  years  spent  the 
winter  term  at  the  school  and  the  summers  on  neighboring  farms.  In 
1903  Woodbine  was  incorporated  as  a  self-governing  political  entity,  of 
which  Professor  Sabsovich  was  fittingly  elected  the  first  mayor. 

Sargent,  A.  J.  Coal  in  international  trade.  (London:  King.  1922.  Pp. 
73.      2s.  6d.) 

A  study  of  Avar  production  and  distribution  of  coal  since  1913.  In- 
teresting comparisons  are  made  of  cost  of  production,  prices,  output  of 
coal  in  various  countries. 

WiLKixs,  V.  E.  Agricultural  research  and  the  farmer.  A  record  of  recent 
achievement.      (London:  King.      1922.      2s.  6d.) 

Coal,  coke  and  hy-products  of  the  British  Empire  and  foreign  countries, 
1913-1919.  Part  II.  Issued  from  the  Imperial  Mineral  Resources  Bu- 
reau.     (London:  H.  ^NI's  Stationery  Office.      1922.      6s.  6d.) 

Iron  ore,  United  Kingdom.  Summari/  of  information  as  to  the  present  and 
prospective  iron  ore  supplies.  (London:  H.  M.'s  Stationery  Office.  1922. 
6s.) 

The  Je-wish  Agricultural  and  Industrial  Aid  Society,  annual  report  for  the 
year  1921.  (New  York:  Jewish  Agri.  and  Indus.  Aid  Soc.  1922.  Pp. 
67.) 

Transportation  and  Communication 

Railroads  and  Government :  Their  Relations  in  the  United  States,  1910- 
1921.  By  Frank  Haigh  Dixox.  (New  York:  Charles  Scrib- 
ner's  Sons.  1922.  Pp.  ix,  384.  .$2.25.) 
Dealing  with  the  same  period  of  government  regulation  of  railroads 
as  that  covered  by  Professor  Sharfman's  work,  The  American  Railroad 
Problem,  published  only  a  few  months  earlier,  this  book  necessarily 
invites  some  comparison  with  it.  After  a  brief  introduction  in  which 
the  judiciary  comes  in  for  the  criticism  we  are  quite  accustomed  to 
hear  from  economists,  the  book  deals  first  with  the  period  from  1910 
to  1916,  a  period  during  which  federal  regulation  was  greatly  strength- 
ened by  the  act  of  1910,  which  gave  to  the  Commission  the  power  to 
suspend  schedules  of  rates  filed  by  the  railroads,  and  greater  power  in 
many  other  ways,  especially  in  the  application  of  the  so-called  "long 
and  short  haul  clause."  The  chapter  entitled  "Administrative  activi- 
ties" deals  with  the  administration  of  the  Interstate  Commerce  Com- 
mission in  an  interesting  way.      The  chapter  on  "Labor  problem"  de- 


C36  Reviews  and  New  Books  [December 

scribes  briefly  the  principal  labor  event  of  the  pre-war  period,  namely, 
the  circumstances  leading  up  to  the  passage  of  the  Adamson  act. 

The  second  part  of  the  book  covers  the  war  period,  and  here  Dr. 
Dixon  is  at  his  best.  He  deals  with  the  subject  of  which  he  has  inti- 
mate knowledge  not  only  from  his  studies  of  the  problems  from  the 
point  of  view  of  an  economist,  but  more  particularly  from  his  intimate 
association  with  the  activities  of  the  railroads  and  the  government 
during  the  war  period,  as  Director  of  the  Bureau  of  Railway  Econo- 
mics. In  this  capacity  he  was  in  close  touch  not  only  with  what  was 
going  on  in  railroad  circles,  but  with  the  Interstate  Commerce  Com- 
mission, and  later  with  the  Railroad  Administration.  The  facts  which 
he  states  could  probably  not  be  secured  by  any  one  else,  and  this  part 
of  his  book  will  be  a  permanent  repository  of  accurate  information  re- 
lating to  that  period.  He  has  a  just  appreciation  of  the  difficulties 
under  which  tlie  United  States  railroad  administration  operated,  al- 
though he  quite  properly  criticizes  its  labor  policy.  The  effect  of 
government  operation  upon  the  advancement  of  labor's  contentions 
is  thus  summarized: 

It  is  no  exaggeration  to  say  that  the  gains  made  by  railroad  labor  during 
the  26  months  of  Federal  operation  in  the  power  of  collective  bargaining, 
in  the  development  of  union  organization,  in  the  standardization  and  na- 
tionalization of  practices  and  policies,  were  greater  than  in  the  entire  pre- 
vious ])eriod  of  their  existence.  That  they  desire  to  perpetuate  these 
gains  under  private  operation  is  no  more  than  human. 

"The   summar}^   of   federal    operations,"   beginning   on   page   206,   is 
admirable. 

The  third  part  of  the  book  deals  with  "Return  to  private  operation," 
and  is  a  thoroughly  sound  analysis  of  the  fundamental  railroad  prob- 
lem, with  some  very  interesting  suggestions  as  to  the  future  of  the 
railroads.  The  author  emphasizes  the  necessity  for  credit  if  the  rail- 
roads are  to  be  able  to  perform  their  public  functions — a  credit  which 
is  extremely  difficult  of  accomplishment  where  the  financial  strength  of 
competitive  railroads  varies  greatly.  Like  all  the  recent  thinkers  on 
the  subject,  he  clearly  points  out  how  the  problem  is  to  meet  the  require- 
ments of  the  weak  roads  without  giving  to  the  strong  roads  an 
unnecessarily  large  income.  This  is  the  problem  which  the  Transpor- 
tation act  of  1920  attempts  to  solve.  On  account  of  the  radical 
change  in  traffic  conditions  shortly  following  the  passage  of  the  Trans- 
portation act,  the  provisions  of  the  act  relating  to  the  adjustment  of 
rates  so  as  to  establish  credit  have  not  had  a  fair  chance  to  show 
their  effectiveness.  Dr.  Dixon  feels  that  there  must  be  a  larger  measure 
of  cooperative  effort  among  the  railroads  themselves  in  establishing 
efficiency  of  operation  if  we  are  to  escape  the  dangers  of  government 
operation.     The  extension  of  regulation  has  brouglit  with  it  a  consid- 


1922]  Transportation  and  Communication  637 

erable  amount  of  management  by  public  tribunals.  This  according 
to  the  author  has  been  necessary  because  of  failure  of  effective  coopera- 
tion among  the  railroads.  He  apparently  views  with  favor  the  activi- 
ties of  the  Association  of  Owners  of  Railroad  Securities — an  organiza- 
tion of  creditors  rather  than  of  owners,  Avhich  has  not  worked 
altogether  harmoniously  with  the  railroad  executives.  He  feels  that 
the  legalistic  conception  of  ownership  by  stockholders  should  give  way 
to  what  he  regards  as  the  fundamental  conception  of  ownership,  namely, 
by  those  who  advance  money  and  receive  interest-bearing  securities  as 
well  as  by  those  who  advance  money  and  receive  certificates  of  stock. 
Whether  this  conception  is  sound  or  not,  it  is  clear  that  satisfactory 
results  will  not  be  accomplished  until  there  is  cooperation  between 
these  two  classes  of  owners.  If  the}''  can  work  in  harmony  there  is  no 
doubt  that  an  organization  dealing  with  the  equipment  problem  can 
bring  results.  Whether  it  is  desirable  or  possible  for  a  central  organ- 
ization to  purchase  supplies  and  materials  and  standardize  operations 
is  doubtful. 

The  author,  like  most  economists,  minimizes  the  importance  of  com- 
petition in  rates,  which  leads  him  to  the  favoring  of  a  more  or  less  rigid 
application  of  the  "long  and  short  haul  clause"  principle.  If  we  are 
not  to  have  competition  in  rates  as  between  rail  lines  and  water  lines, 
we  might  just  as  well  proceed  at  once  to  establish  rates  on  a  mileage 
basis,  which  would  result  in  a  great  restriction  of  traffic  and  would  tend 
to  localize  industry. 

In  discussing  the  future  of  the  railroad  problem  Dr.  Dixon  is 
candid,  and  he  does  not  hesitate  to  express  the  view  which  is  repugnant 
to  railroad  executives,  that  in  some  Avay  labor  must  participate  in 
management.  He  very  justly  remarks  that  the  advantage  of  such 
participation  may  not  be  found  in  contributions  which  labor  can  make, 
but  "rather  it  will  grow  out  of  the  fact  that  labor  knows  what  is  going 
on,  appreciates  the  problems  of  management,  and  hence  acquires  con- 
fidence." It  is  doubtful  if  any  one  has  a  better-balanced  judgment  on 
the  labor  problem  than  Dr.  Dixon. 

In  contrasting  the  works  of  Professor  Sharfman  and  Dr.  Dixon 
one  is  impressed  with  the  fact  that  the  former  approaches  the  problem 
from  the  point  of  view  of  the  brilliant,  theoretical  and  more  or  less 
radical  thinker  while  the  latter  deals  with  it  from  the  point  of  view  of  a 
clear-thinking  economist  who  has  had  the  rare  opportunity  of  close 
contact  with  facts.  Professor  Sharfman  feels,  without  apprehension, 
that  the  problem  may  have  to  be  solved  through  the  nationalization  of 
railroads ;  Dr.  Dixon  hopes  that  it  can  be  solved  through  the  operation 
of  the  principles  of  the  Transportation  act  aided  by  a  greater  degree 
of  cooperation  among  the  railroads. 

Edgae  J.   Rich. 


638  Reviews  and  New  Books  [December 


NEW    BOOKS 


Daggett,  S.  Chapters  on  the  history  of  the  Southern  Pacific.  (New 
York:  Ronald.      1922.      Pp.  iv,  470.  '  $5.) 

The  purpose  of  this  study  is  to  present  the  story  of  the  Southern  Pacific 
Railroad,  to  throw  light  upon  tlie  various  problems  encountered  by  the 
road,  and  to  interpret  its  policies  and  history.  The  volume  contains  a 
very  thorough  presentation  of  the  history  of  the  railroad  in  its  important 
aspects,  including  federal  land  grants,  physical  construction,  financial 
problems,  rate  fabric,  and  state  and  federal  regulation.  Some  of  the 
latter  chapters  present  such  matters  as  the  Southern  Pacific  Merger  case, 
and  the  Oil  Land  litigation.  The  material  for  the  volume  was  obtained 
from  original  sources,  of  which  the  author  says  there  are  many.  The 
romantic  elements  in  the  history  of  the  road  are  entirely  submerged;  in 
fact,  Professor  Daggett  has  devoted  his  attention  exclusively  to  the 
study  and  interpretation  of  the  facts.  Chapters  13  to  17  inclusive  will 
be  of  particular  interest  to  students  of  rate  questions.  In  this  section  of 
the  book  the  author  develops  historically  and  critically  the  rate  fabric 
as  applied  to  local  and  transcontinental  rates.  Thus,  chapters  are  de- 
voted to  Water  Competition,  the  Rate  System  of  the  Central  Pacific, 
Local  Rates  in  California,  the  Transcontinental  Tariff,  and  the  Traffic 
Association  of  California. 

To  the  usual  well-known  features  of  transcontinental  rates  the  author 
adds  two  others,  namely,  the  placing  of  the  shipping  communities  of  the 
state  all  upon  an  equal  footing  on  the  eastbound  business  by  applying 
the  same  rates  for  intermediate  as  from  terminal  points ;  and  second, 
the  ap{)lication  of  a  different  principle  in  making  rates  in  the  region 
cast  of  tlic  Rockies  from  the  one  that  prevails  on  the  Pacific  coast.  The 
failure  "to  aj)ply  in  the  East  the  same  principles  which  govern  in  the 
West  has  been  doubtless  due  to  the  insistence  of  cities  like  Chicago  that 
her  rates  be  at  least  as  low  on  shipments  to  and  from  the  Pacific  Coast  as 
the  rates  which  New  York  enjoys,  as  well  as  the  desire  of  the  railroads 
which  begin  at  Chicago  or  the  Mississippi-Missouri  river  to  encourage 
the  growth  of  business  in  the  Middle  West." 

The  chief  complaint  of  the  transcontinental  rate  system  has  come  from 
the  interior  towns  and  cities  which  have  not  been  favored  with  the  low 
rates  granted  to  the  terminal  points;  the  unfortunate  comnumities  have 
urged  tiiat  higher  charges  to  intermediate  points  are  prima  facie  unreason- 
able, that  the  system  of  transcontinental  rate-making  limits  the  territory 
in  which  the  intermediate  wholesale  firms  can  do  a  distributing  business, 
and  that  low  rates  to  coast  cities  build  up  such  communities  at  the  ex- 
j)cnse  of  the  interior.  To  these  arguments,  according  to  the  author,  the 
railroads  have  replied  that  "unless  the  rail  lines  are  permitted  to  make 
rates  which  hold  the  througii  business,  the  terminal  roads  will  lose  all 
tin-  net  revenue  derived  from  the  port  rate  upon  what  is  a  very  large 
M)lumc  of  tralHc."  Thus  the  loss  of  millions  of  dollars  of  income  would 
i.oth  impair  the  effectiveness  of  the  service  and  make  necessary  higher 
charges  to  all  points.  In  the  author's  opinion  the  transcontinental  rate 
system  has  obvious  defects:  it  has  provided  low  rates  to  towns  and  on 
commodities  whicli  have  no  access  to  the  water  routes;  it  has  failed  to 
make  "concessions  to  the  cost  basis  of  rate  making."  Moreover,  "it 
docs  seem  probable  that  the  transcontinental  railroads  would  have  re- 
duced the  aggregate  cost  of  distributing  transcontinental  freight  had  they 


1922]  Transportation  and  Communication  639 

encouraged  more  than  they  did  the  growth  of  the  interior  towns,  provided 
that  they  had  supported  these  towns  both  against  Chicago  and  St.  Louis 
and  against  the  Pacific  coast." 

Isaac   Lippixcott. 

Elliott,  B.  K.  A  treatise  on  the  lazi'  of  railroads.  Six  vols.  Third  edi- 
tion.     (Indianapolis,  Ind. :  The  Bobbs-Merrill  Co.      1922.) 

Elliott,  H.  Railroad  transportation.  Address  at  the  sixty-ninth  annual 
meeting  of  the  American  Society  of  Civil  Engineers.  (New  York:  Am. 
Soc.  of  Civil  Engineers,  33  W.  39th  St.      1922.      Pp.  18.) 

Frankfurter,  F.,  editor.  A  selection  of  cases  under  the  Interstate  Com- 
merce act.  Two  vols.  Second  edition.  (Cambridge:  Harvard  Univer- 
sity Press.      1922.) 

Hebard,  R.  W.  The  transport  situation  in  the  Republic  of  Columbia  and 
the  treaty  payments.  Second  edition.  (New  York:  Author.  1922.  Pp. 
40.) 

HuNGERFORD,  E.  Our  railroads  tomorroxv.  (New  York:  Century.  1922. 
Pp.  332.     $2.50.) 

Moody,  J.  The  railroad  builders;  a  chronicle  of  the  icelding  of  the  states. 
(New  Haven:  Yale  Univ.  Press.      1921.     Pp.  ix,  257.) 

Oldham,  J.  E.  The  place  of  the  New  England  railroads  in  the  plan  for 
railroad  consolidations.  Published  by  the  Investment  Bankers  Associa- 
tion of  America.      (Cambridge,  Mass.:  Cosmos  Press.      1922.      Pp.  46.) 

Repaci,  F.  A.  II  "deficit"  delle  ferrovie  dello  stato.  La  Riforma  Sociale, 
Mar. -Apr.,  1922.  (Torino:  La  Riforma  Sociale,  16,  Piazza  Statute. 
1922.      Pp.  43.) 

Van  Metre,  T.  W.  and  Moox,  P.  T.  Railroads  and  business  prosperity. 
(New  York:  Academy  of  Political  Science,  Columbia  Univ.  1922.  Pp. 
130.) 

Walden,  C.  F.  Ocean  transportation.  (New  York:  Y.  M.  C.  A.  Press. 
1922.      Pp.  vi,  248.) 

Zimmermann,  E.  W.  Ocean  shipping.  (New  York:  Prentice-Hall,  1921. 
Pp.  xvi,  691.) 

Subjects  treated  in  this  volume  are  the  nature  of  ocean  transportation, 
ocean  routes,  ocean  terminals,  entrepots  centers  and  free  ports,  the  world's 
leading  ports  with  special  reference  to  the  port  situation  in  the  United 
States ;  size,  speed  and  efficiency  of  ocean  vessels,  the  development  of 
motive  power,  and  important  improvements  in  the  construction  of  vessels; 
cargo  and  carrying  capacity,  cargo  handling  and  storage,  the  bunkering 
problem,  shipping  services,  marine  insurance;  the  history  of  vessel 
ownership  and  management,  including  special  attention  to  recent  pools, 
agreements,  conferences,  concentrations  and  combinations.  Attention  is 
given  to  theory  and  practice  of  rate  making  and  to  the  finances  of  ship- 
ping companies. 

The  author  emphasizes  the  fact  that  the  United  States  is  behind  Europe 
in  the  efficiency  of  coordination  of  rail  and  water  transportation,  and 
points  out  the  need  of  elimination  of  much  delay  in  ocean  terminals,  if 
other  advantages  gained  by  the  development  of  the  ocean  carrier  itself 
are  to  be   realized.     Special   attention  is  given   to  the   shift   which   has 


640  Reviews  and  New  Books  [December 

taken  place  in  the  substitution  of  oil  for  coal  in  ocean  shipping.  It  is 
pointed  out  that  twenty  years  ago  Great  Britain  did  not  look  upon  the  sub- 
stitution of  oil  for  coal  as  of  very  much  importance;  that  now  with  the 
remarkable  strides  which  the  United  States  has  made  beginning  with  the 
War  in  the  use  of  oil  as  fuel,  and  also  in  view  of  the  falling  off  in  the 
export  of  English  coal,  Great  Britain  is  beginning  to  see  that  she 
must  secure  control  of  adequate  oil  supplies  or  run  the  risk  of  losing  her 
commanding  position  in  world  commerce.  The  author  quotes  Anin  to  the 
effect  that  "if  oil  supplants  coal  she  (Great  Britain)  will  get  a  sufficient 
oil  supply  or  die  trying." 

In  the  final  division  of  the  volume  is  a  discussion  of  the  work  of  the 
United  States  Shipping  Board  and  America's  Merchant  Marine.  In 
discussing  the  Merchant  Marine  act  of  1920  the  author  says:  "In  con- 
clusion we  would  say  that  the  new  law  proves  beyond  question  the  honest 
intention  of  Congress  to  reestablish  the  United  States  as  a  seafaring 
nation  and  that  while  the  merit  of  certain  provisions  will  have  to  be 
proved  by  their  application,  there  can  be  little  doubt  that  the  shipping 
outlook  is  brightened  by  this  new  measure.  But  let  us  never  lose  sight 
of  this:  the  essential  prerequisite  necessary  for  building  up  an  American 
merchant  marine  is  not  ships — they  are  only  instruments,  dead  matter 
brought  to  life  by  the  skill  and  knowledge  of  experienced  and  well-trained 
men;  not  laws — though  bad  laws  hinder  and  good  ones  help — but  rather 
courage,  foresight,  confidence,  good  will  and  integrity  in  the  hearts  of 
those  directly  engaged  in  the  shipping  business  and  patriotic  enthusiasm 
on  the  part  of  the  people  who  back  them.  That  is  what  counts.  And  the 
near  future  will  show  whether  America  is  willing  to  put  the  'Stars  and 
Stripes'  back  upon  the  Seven  Seas  where  they  were  in  the  glorious  days  of 
the  past." 

There  are  some  typographical  errors  in  the  book  (see  pp.  240,  285) 
and  some  evidence  of  carelessness  in  checking  up  the  source  of  material 
which  has  been  used.  For  example  (pp.  502,  501)  in  quoting  from 
Johnson's  study  on  Ocean  Rates  and  Terminal  Charges,  credit  is  given 
to  the  reviewer  for  a  statement  concerning  ocean  freight  rates  which  was 
written  by  Walter  T.  Fisher  (see  p.  66  of  Ocean  Rates  and  Terminal 
Charges). 

C.    O.    RuGGLES. 

Ohio  State  University. 

The  freight  traffic  red  book;  an  encylopedia  of  the  traffic  department;  a 
practical  reference  book  for  the  student  of  freight  transportation.  (Chi- 
cago: La  Salle  Extension  Univ.      1922.      Pp.  491.      $6.) 

Ilighxcai/  transport  and  its  relation  to  the  public.  (New  York:  National 
Automobile  Chamber  of  Commerce,  Marlin-Rockwell  Bldg.  1922.  Pp. 
40.) 

The  Port  of  Boston,  Massachusetts.  Port  series  no.  2,  issued  by  the  En- 
gineers Corps  U.  S.  Army  and  U.  S.  Shipping  Board.  (Washington: 
Supt.  Docs.      1922.      75c.) 

Uailwatj  cmploi/ccs'  reply  to  the  railroads;  hearings  before  the  Senate  Com- 
mittee on  Interstate  Commerce,  Oct.  13  and  15,  1921;  Nov.  25  to  Dec.  S, 
1021.      Vol.  III.      (Washington:  Supt.  Docs.      1921.) 

State  motor  vehicle  laxcs  in  force  June  1,  1922.  (New  York:  Motor  Vehicle 
Conference  Committee,  366  Madison  Ave.      1922.      Pp.  36.) 


1922]  Trade,  Commerce,  and  Commercial  Crises  641 

Trade,  Commerce,  and  Commercial  Crises 


NEW    BOOKS 


Day,  C.  a  history  of  commerce.  Revised  and  enlarged.  (New  York: 
Longmans,  Green.      1922.      Pp.  x,  676.      $2.50.) 

The  latter  part  of  the  edition  published  in  1914  is  revised  and  some  70 
pages  added  to  cover  the  period  1914-1922. 

Holt,  W.  S.      The  Federal  Trade  Commission.      Institute  for  Government 

Research,  monograph  no.   7.      (New  York:  Appleton.      1922.      Pp.   80.) 

Chapters  on  the  history,  activities  and  organization  of  the  Commission. 

In  the  appendix  is  a  list  of  the  reports  of  economic  investigation  printed 

up  to  April,  1921.     Appendix  6  is  a  bibliography  of  nine  pages. 

Lavington,  F.  The  trade  cycle.  An  account  of  the  causes  producing 
rhythmical  changes  in  the  activity  of  business.  (London:  P.  S.  King  & 
Son.      1922.      Pp.   113.      3s.  6d.) 

This  book  is  "not  the  result  of  original  research."  Mr.  Lavington 
has  drawn  chiefly  from  Pigou's  Economics  of  Welfare,  part  VI;  to  a 
lesser  extent  from  Alfred  Marshall  and  Wesley  Mitchell ;  and  to  a  slight 
extent  from  Robertson  and  Aftalion.  One  chapter  is  devoted  to  condi- 
tions favorable  to  the  growth  of  trade  fluctuations:  (1)  entrepreneurial 
control  of  production,  (2)  interdependence  among  producers,  (3)  pro- 
duction in  anticipation  of  demand,  (4)  production  guided  by  price.  Two 
chapters  are  devoted  to  a  discussion  of  "business  confidence,"  and  three 
to  the  "course  of  the  trade  cycle."  A  final  chapter  is  concerned  with 
"social  aspects"  and  methods  of  minimizing  the  cycle. 

"The  active  principle  animating  business  cycles  is  to  be  found  in 
changes  in  the  general  level  of  business  confidence"  (p.  61).  The  "cumu- 
lative growth  of  an  error  of  optimism  or  pessimism  in  business  judg- 
ments" has  two  effects:  it  acts  directly  on  the  estimates  made  by  business 
men  of  the  "future  condition  of  markets,"  and  "it  acts  indirectly  on  those 
estimates  by  its  influence  on  the  supply  of  money  and  therefore  on  the 
movement  of  prices"  (p.  90). 

The  major  forces  which  check  the  "confidence  in  which  the  whole  up- 
ward movement  is  based"  are:  (1)  inadequate  supply  of  new  savings 
(p.  69),  (2)  inability  of  new  capital  to  find  a  market  except  by  pressing 
into  uses  where  the  yield  is  lower  (70-74),  (3)  drain  on  bank  reserves 
(67-68).  The  first  two  of  these  alleged  causes  seem  to  be  contradictory 
for  one  implies  a  scarcity  of  capital  while  the  other  implies  a  super- 
abundance of  capital. 

Mr.  Lavington  holds  that  there  would  be  no  business  cycle  if  "business 
judgments  were  always  rationalh'  determined"  (p.  58).  In  his  opinion 
"errors  of  optimism  and  pessimism"  are  at  the  bottom  of  the  business 
cycle  (58-60).  To  the  present  reviewer  it  would  seem  that  these  errors 
of  optimism  and  pessimism  are  results,  in  the  first  instance,  rather  than 
causes  of  the  price  cycles  which  give  rise  to  profit  cycles,  though  no  doubt 
once  the  movement  has  started  they  reinforce  and  intensify  the  price 
fluctuations. 

Alvin  H.  Hansen. 

LioNBERGER,   I.   H.      The   economic  crisis  and  foreign   trade.      (St.   Louis: 
American  Credit-Indemnity  Co.      1921.      Pp.  53.      30c.) 


642  Reviews  and  New  Books  [December 

Handbook  of  commercial  treaties.  Issued  by  the  United  States  Tariff  Com- 
mission.     (Washington:  Supt.  Docs.      1922.      75c.) 

Volume  of  United  States  trade,  1921,  by  ports  of  origin  and  destination. 
Bureau  of  Foreign  and  Domestic  Commerce,  miscellaneous  series  112. 
(Wasliington:  Supt.  Docs.      1922.      10c.) 

Accounting,  Business  Methods,  Investments  and  the 

Exchanges 

Cost  Control  and  Accounting  for  Textile  Mills.  By  Eugene  Szepesi. 
(New  York:  Bragdon,  Lord  &  Naglc  Company.  1922.  Pp. 
xxiv,  441.     $10.00.) 

Cost  Control  for  Textile  Mills  is  a  discussion  of  the  general  princi- 
ples and  practices  of  cost  accounting,  applied  to  the  needs  and  prob- 
lems of  textile  mills.  The  aim  is  "to  present  sufficient  illustrations 
and  material  for  the  development  of  a  control  suitable  to  meet  indi- 
vidual re(|uircments." 

In  tlu'  opening  chapter  the  author  launches  into  an  interesting  dis- 
cussion of  tlie  economic  factors  that  control  the  cost  of  an  article 
and  an  anal3^sis  of  these  factors  for  several  typical  grades  of  products. 
It  is  particularly  pleasing,  after  all  that  has  been  written  concerning 
the  necessity  for  an  exact  distribution  of  each  cost  element  into  its 
component  parts  and  for  the  most  minute  allocation  of  each  of  those 
parts  to  the  product  or  operation  it  affects,  to  read  in  Mr.  Szepesi's 
book  that  tlie  exactness  of  all  this  measuring  should  "be  in  proportion 
to  the  value."  If  raw  materials  represent  the  predominant  element 
of  cost,  as  in  the  case  of  cotton  yarn,  then  that  control  is  important 
which  relates  to  the  "use,  flow  and  care  of  raw  materials,"  with  special 
attention  given  to  the  control  of  waste.  Labor,  burden,  and  selling 
expense,  in  such  case,  are  comparatively  unimportant  and  the  simplest 
means  possible  should  be  adopted  in  allocating  these  items  to  cost. 
Some  may  maintain  that  this  is  not  theoretically  sound  but  it  re- 
presents to  the  business  man  practical  efficiency  and  an  elimination 
of  red  tape,  whicli,  says  the  author,  "is  nothing  less  than  measuring 
coal  on  a  chemical  scale." 

Tlie  cha])ters  wliich  folh)w  contain  discussions  of  the  cost  elements, 
with  ])articuhir  emphasis  upon  burden,  its  factors  and  its  proper 
a])])hcation.  The  reader  may  feel  that  Mr.  Szepesi  is  somewhat  posi- 
tive regarding  the  methods  of  burden  distribution,  though  from  the 
standpoint  of  practical  mill  operation  the  plans  he  proposes  are 
quite  probably  the  best.  It  is  interesting  to  observe  that  along 
with  his  argument  for  including  interest  on  capital  investment  as  a 
])art  of  cost  the  author  proposes  a  definite  rate  to  be  used.  He 
suggests  that  a  rate  of  four  per  cent,  lying  between  federal,  state,  and 
municipal  bonds  and  mortgages  on  real  estate  with  proven  title,  should 


1922]  Accounting,  Business  Methods,  InTestmcnts,  Exchanges       G-tS 

be  secured.  The  rate  to  be  used  in  such  computations  has  been  one 
of  the  moot  points  in  this  whole  interest  controversy,  and  there  are 
undoubtedh'  those  who  would  maintain  that  Mr.  Szepesi's  four  per 
cent  is  not  the  rate  to  be  used. 

After  completing  the  discussion  of  the  cost  elements  the  author 
takes  up  the  methods  of  control.  The  control  accounts  of  a  modern 
cost  organization,  including  the  interlocking  of  the  general  financial 
accounts  and  the  manufacturing  and  operating  accounts,  are  well  dis- 
cussed. Although  very  satisfactory  results  are  often  obtained  where 
no  such  interlock  exists,  too  many  business  men  fail  to  realize  that  the 
only  certain  proof  of  the  accuracy  of  a  cost  system  is  the  complete 
interlocking  of  the  financial  and  production  accounts.  The  various 
control  records  are  next  discussed.  These  provide  for  the  purchasing, 
storing,  and  requisitioning  of  materials  and  supplies,  for  the  various 
processes  through  which  work  in  progress  passes,  and  include  the 
various  production  records.     Ample  illustrations  are  given  for  each. 

The  last  third  of  the  book  deals  with  the  records  to  be  used  for 
registering  the  progress  of  production.  Specific  illustrations  and 
numerous  forms  are  given.  Final  chapters  discuss  cost  control  without 
red  tape  and  illustrate  the  cost  procedure.  The  illustrations  through- 
out the  book  relate  specifically  to  mill  operation.  Numerous  tables, 
directions  for  preparing  reports  and  distributing  expenses  are  in- 
cluded, together  with  a  large  amount  of  other'  useful  material. 

The  book  as  a  whole  will  probably  prove  of  interest  only  to  the 
mill  operator  and  to  the  professional  cost  man.  The  opening  chapters, 
however,  dealing  with  the  general  elements  of  cost,  will  be  of  interest 
to  any  reader  of  accounting  or  business  literature,  for  the  method  of 
presentation  enables  the  reader  to  visualize  just  why  and  how  each  of 
the  several  elements  of  cost  comes  to  exist,  and  why  their  solution  is 
necessary  to  business  success.  Mr.  Szepesi  has  written  a  volume  which 
will  stimulate  real  productive  thinking  on  this  important  subject — the 
control  of  costs  in  textile  mills. 

J.  Hugh  Jackson. 

Economics  of  Bridge  Work:  a  Sequel  to  ^'Bridge  Engineering."  By 
J.  A.  L.  Waddell.  (New  York :  John  Wiley  &  Sons,  Inc.  1921.) 
The  present  work,  by  a  trained  engineer  of  large  experience  and 
reputation,  is  of  significance  to  students  of  economics.  It  is  one  of 
many  indications  of  the  spread  of  the  ideal  of  economic  training  in 
technical  education.  The  graduates  of  our  technical  colleges  have 
long  been  objects  of  criticism  because  in  the  practice  of  their  pro- 
fession they  have  been  guided  almost  solelv,  or  too  largely,  by  the  ideal 
of  technical  perfection  regardless  of  economic  considerations.  Men 
of  affairs  and  the  general  public  have  been  able  to  point  to  buildings 


644!  Reviews  and  New  Bool-s  [December 

planned  witl)  reference  to  medieval  conditions,  or  built  of  materials  not 
available  in  the  neighborhood;  and  to  trolleys  made  technically  perfect, 
but  at  a  cost  quite  unjustified  by  traffic. 

The  author  of  this  book  has  long  been  a  vigorous  critic  of  the  over- 
technical  tendencies  in  engineering  education.  As  the  chairman  of  a 
conmiittee  of  the  Society  for  the  Promotion  of  Engineering  Education, 
he  brought  in  a  report  about  1916  urging  strongly  the  increasing 
study  of  economics  in  engineering  schools.  This  report  went  beyond 
the  views  of  the  more  technically  inclined  majority  of  the  Society  and  a 
new  committee  that  was  appointed  returned  to  their  blueprints,  re- 
commending that  economic  instruction  requiring  at  least  two  or  three 
years  should  be  compressed  into  a  single  term. 

Dr.  Waddell  then  turned  with  his  characteristic  energy  (seemingly 
undiminished  by  his  67  years)  to  the  task  of  demonstrating  what  might 
be  done  toward  recognizing  and  emphasizing  the  economic  factors  in 
every  corner  of  his  own  special  field  of  bridge  building.  The  value 
of  the  resulting  work  on  its  engineering  side  can  be  judged  eventually 
only  by  practical  bridge  engineers.  It  would  seem  to  the  layman  to 
be  full  of  valuable  suggestions  in  that  direction ;  but  the  work  in 
numberless  points  has  interest  to  the  student  of  general  economic  prin- 
ciples. It  is  true  that  the  author's  conception  of  economics  is  pretty 
narrowly  confined  to  the  specific  problem  of  building  particular  bridges 
at  definite  points  at  the  lowest  cost  in  money.  He  defines  economics 
as  "the  science  of  obtaining  a  desired  result  with  the  ultimate  mini- 
nunn  expenditure  of  effort,  money,  or  material."  He  gives  but  slight 
attention  to  the  question  of  what  is  "desired,"  or  why  it  is  desired,  as 
shown  by  such  things  as  the  tax-paying  power  of  the  community,  its 
population  and  resources,  or  the  traffic  to  be  taken  care  of.  How  much 
is  still  left  to  the  engineering  student  to  prepare  himself  really  to  solve 
the  economics  of  bridge  building  may  be  partly  inferred  from  the 
almost  entire  absence  of  any  discussion,  in  any  general  way,  of  interest 
rates,  or  price  levels,  or  the  business  cycle,  or  wage  rates  and  their 
variations,  both  in  time  and  geographically.  The  apparent  exceptions 
are  most  meagre,  referring  to  very  specific  situations.  For  example, 
the  "effect  on  economics  from  variations  in  market  prices  of  labor  and 
materials"  (title  of  chapter  4)  is  dismissed  with  little  more  than  the 
statement :  "There  is  a  tendency  for  all  prices  to  rise  and  fall  more  or 
less  uniformly.  If  they  were  to  do  so  exactly,  the  elTect  on  the  economics 
will  be  absolutely  niir  Entirely  absent  is  the  thought  here  or  else- 
where that  the  variation  of  the  price  levels  and  of  interest  rates  make 
the  building  of  the  whole  bridge  more  or  less  economic  at  a  certain 
time,  especially  when  it  is  paid  for  by  incurring  a  debt.  The  author's 
thought  here  and  throughout  is  almost  entirely,  so  to  speak,  regarding 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       6-i5 

the  internal  economics  of  the  problem,  the  relative  economy,  for  ex- 
ample, of  cement  or  iron  at  their  prices  of  the  moment. 

This  work  is  a  pioneer  effort  to  deal  with  economics  in  a  technical 
art.  One  can  recall  only  the  notable  Economic  Theory  of  the  Location 
of  Railways,  by  Wellington,  and  a  few  minor  essays  in  similar  fields. 
Such  an  enterprise  is  most  laudable,  and  cannot  fail  to  have  valuable 
fruits,  not  only  because  of  its  own  merits  but  because  of  its  influence 
and  example.  Not  the  least  of  its  services  may  be  to  reveal  to  the 
engineers  the  narrowness  of  their  conception  of  economic  problems  and 
of  economic  study,  and  the  need  of  much  broader  and  deeper  training 
in  the  relations  of  the  engineer  to  the  economic  conditions  and  needs 
of  the  community. 

Fraxk  a.  Fetter, 
new  books 

Arnett,  T.  College  and  university  finance.  (New  York:  General  Educa- 
tion Board.      1922.      Pp.  xi,  212.) 

AspLEY,  J.  C.  Field  tactics  for  salesmen;  a  review  of  actual  plans  and 
methods  successfidly  used  by  salesmen  in  all  lines  of  business  to  organize 
a  territory,  handle  balky  buyers,  meet  common  objections  and  conserve 
time.      (Chicago:  Dartnell  Corporation.      1922.) 

Basset,  W.  R.  and  Heywood,  J.  Production  engineering  and  cost  keeping 
for  machine  shops.      (New  York:  McGraw-Hill.      1922.      Pp.  .311.  $3.50.) 

Belding,  a.  G.  Business  correspondence  and  procedure  for  students  in 
commercial  and  general  secondary  schools.  (New  York:  Ronald.  1922. 
Pp.  xiv,  383.) 

BoRsoDi,  R.  The  new  accounting ;  bookkeeping  without  books  of  original 
entry  by  the  use  of  a  natural  system  of  double  entry  bookkeeping.  (New 
York:  Dodd,  Mead.      1922.      Pp.  x,  127.) 

Boyle,  J.  E.  Cost  of  marketing  grain :  a  history  of  certain  carloads  of 
grain  from  the  farmer  to  the  terminal  buyer.  (Ithaca,  N.  Y. :  Author, 
Cornell  Univ.) 

BocHWALD,  M.  G.  Property  accounting  for  national  guard  organizations. 
(Washington:  U.  S.  Infantry  Assoc.      1921.      Pp.  63.) 

Bull,  A.  E.  The  business  man's  guide  to  advertising.  (New  York:  Pit- 
man.     1922.      7oc.) 

Chambonnaud,  L.  La  technique  des  affaires  (methodes  frangaises  et 
etrangeres.  IX,  Les  affaires  et  leur  lancement.  (Paris:  Dunod.  1922. 
Pp.  395.) 

Clark,  W.  The  Gantt  chart;  a  working  tool  of  management.  (New  York: 
Ronald.      1922.      Pp.  xii,  157.     $2.50.) 

Collier,  G.  A.  Business  methods  of  marketing  hay.  U.  S.  Department 
of  Agriculture,  Farmer's  bull.  1265.  (Washington:  Supt.  Docs.  1922. 
Pp.  25.) 

Dewing,  A.  S.  Corporation  finance.  (New  York:  Ronald.  1922.  Pp. 
457.      $2.75.) 


646  Reviezvs  and  New  Books  [December 

DicKSEE,  L.  R.  The  true  basis  of  efficiency.  London  School  of  Economics 
and  Political  Science,  Studies  in  commerce,  vol.  I.  (London:  Gee  &  Co. 
1922.      Pp.  89.) 

One  of  a  series  of  studies  in  commerce  edited  by  Beveridge  and  Sar- 
gent. Four  chapters  deal  with  training,  equipment,  leadership  and 
morale.  The  appendix  contains  a  paper  on  Unrest  and  Its  Cure,  by 
John  Murray. 

DiNSMORE,  J.  C.  Purchasing;  principles  and  practices.  (New  York: 
Prentice-Hall.      1922.      Pp.  x,  295.     $6.) 

DoLcii,  E.  W.  Manual  of  business  letter  ivriting.  (New  York:  Ronald. 
1922.      Pp.  X,  327.      $2.25.) 

Drury,  a.,  compiler.  World  metric  standardisation:  an  urgent  issue.  (San 
Francisco:  World  Metric  Standardization  Council,  681  Market  St.  1922. 
Pp.  524.      $5.) 

The  subtitle  reads  "A  volume  of  testimony  urging  worldwide  adoption 
of  tlie  metric  units  of  weights  and  measures — meter-liter-gram." 

DuGDALE,  B.  H.  Mortgage  loa^i  values ;  a  fexc  comments  on  various  matters 
pertaining  to  real  estate  mortgages.  (Indianapolis,  Ind. :  Constance 
Dugdale,  1220  State  Life  Bldg.    '  1922.      Pp.  218.     $2.50.) 

Dunn,  A.  Scientific  selling  and  advertising.  (New  York:  Harper.  1922. 
Pp.  XXV,  159.      $3.) 

In  a  very  enthusiastic  volume  replete  with  picturesque  phrases  and 
anecdotes  the  autlior  tries  to  inspire  the  immature  salesman.  The  ex- 
])ectation  which  the  title  word  "scientific"  arouses  is  disappointingly  un- 
fulfilled. C.  L.  S. 

Edie,  L.  D.,  com])iler.  Practical  psychology  for  business  executives.  (New 
York:  H.  W.  Wilson.      1922.      Pp.  xxvii,  392.      $2.40.) 

From  an  incalculable  mass  of  psychological  and  economic  literature 
Professor  Edie  has  chosen  representative  excerpts  on  such  topics  as  The 
Basis  of  Industrial  Relations,  Self-assertive  Management,  and  Industrial 
Pathology.  Among  the  psychologists  quoted  are  Scott,  McDougall, 
Thorndike,  HoUingworth,  Link,  and  Myers;  among  the  economists, 
Parker,  Taussig,  Babson,  Fisher,  Wolf,  Tead,  and  Gilbreth.  Such  a 
symi)osiuin  is  a  real  stimulus  to  an  enlarged  appreciation  of  the  importance 
of  psychological  ideas  in  economic  development. 

Unfortunately,  the  quotation,  without  comment  or  introductory  critique, 
of  conflicting  views  on  the  instincts  (e.  g.,  Thorndike  and  Hall)  may  seri- 
ously confuse  the  more  searching  reader,  especially  if  he  be  unacquainted 
with  the  present-day  developments  in  psychology.  This  editorial  over- 
sight lessens  the  convincingness  and  the  utility  of  an  otherwise  admirable 
volume. 

Charles  Leonard  Stone. 

Iarquhar,  H.  II.  Factory  storesleeping:  the  control  and  storage  of  ma- 
terials.     (New  York:  McGraw-Hill.      1922.      Pp.  182.     $2.50.) 

Giles,  J.  H.  Farm-ranch  bookkeeping.  (San  Antonio,  Tex.:  Lodovic 
Printing  Co.      1922.      Pp.  45.) 

Grant,  H.  D.  Practical  accounting  for  the  general  contractor.  (New 
York:  McGraw-Hill.      1922.      Pp.  254.      $3.) 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       647 

Griffin,  B.  W.  Installment  sales  and  collections.  (New  York:  Prentice- 
Hall.      1922.      Pp.  204.     $4.) 

Hamilton,  W.  P.  The  stock  market  barometer;  a  study  of  its  forecast 
value  based  on  Charles  H.  Doxv's  theory  of  the  price  movement.  (New 
York:  Harper.      1922.      Pp.325.) 

Hammond,  E.  J.  Hotc  to  become  a  company  secretary ;  being  a  guide  to  the 
secretarial  profession.  (New  York:  Pitman.  1922.  Pp.  viii,  163. 
$1.25.) 

Havward,  W.  S.  and  White,  P.  Chain  stores:  their  management  and 
operation.      (New  York:  McGraw-Hill.      1922.      Pp.412.      $3.50.) 

Heywood,  D.  H.  Personal  efficiency  and  mind  porcer  building;  course  of 
twelve  lessons.  (San  Francisco:  Thomson-Hej^wood  Co.  1921.  Pp. 
144.      $2.) 

Hitchcock,  C.  N.,  editor.  Forms,  records  and  reports  in  personnel  admin- 
istration. (Chicago:  Univ.  of  Chicago  Press.  1922.  Pp.  128.  $1.75.) 
The  purpose  is  "to  suggest  the  type  of  data  in  the  field  of  industrial 
relations  which  the  management  of  a  business  should  have  at  its  disposal, 
the  records  necessary  for  its  collection  and  some  possible  methods  of 
presenting  it  for  administrative  use." 

HuBBART,  G.  R.  Thirty  practical  lessons  in  advertising  and  selling.  (New 
York:  U.  P.  C.  Book  Co.      1921.     Pp.  80.     $1.) 

IvEY,  P.  W.  Principles  of  marketing:  a  tcrtbook  for  colleges  and  schools 
of  business  administration.      (New  York:  Ronald.      1921.      Pp.  351.) 

The  purpose  of  this  treatise  is  "to  introduce  the  student  to  the  market- 
ing process.  It  does  not  attempt  to  describe  all  phases  of  the  marketing 
functions.  .  .  .  It  seeks  rather  to  unify  the  subject  through  analysis  and  the 
formulation  of  principles." 

The  successive  chapters  treat  of:  Differentiation  of  Marketing  Func- 
tions; Integration  of  Marketing  Functions;  The  Wholesaler;  New  Types 
of  Wholesalers;  The  Department  Store;  The  Chain  Store;  The  Mail 
Order  House;  Retailer's  Market  Analysis;  Manufacturer's  Market  Anal- 
ysis; The  Role  of  Advertising  in  a  Buyer's  Market;  The  Incidence  of 
Advertising  Costs;  Trade-Marks  and  Unfair  Competition;  Price  De- 
termination; The  Cost  of  Merchandising;  Marketing  Agricultural  Prod- 
ucts; Critique  of  Existing  Marketing  System. 

The  treatment  of  the  Incidence  of  Advertising  Costs  is  a  distinct  con- 
tribution to  the  study  of  marketing,  especially  in  view  of  the  present 
tendency  in  marketing  literature  to  make  categorical  statements  concern- 
ing this  topic.  The  author  analyzes  the  process  of  price  fixation,  with 
special  reference  to  advertising  costs,  under  conditions  of  constant,  de- 
creasing and  increasing  costs  of  distribution,  and  also  under  conditions 
of  fixed  supply  and  joint  cost,  concluding  that  the  incidence  is  by  no 
means  the  same  in  all  cases.  This  analysis  is  thoughtfully  made,  and 
should  prove  very  helpful  to  students  of  the  subject,  though  not  quite 
enough  recognition  has  been  given  by  the  author  to  the  influence  on  price 
of  other  cost  factors  than  those  of  distribution. 

With  the  exception  of  the  chapters  on  advertising  costs,  the  book 
is  a  general  discussion  of  the  chief  features  of  the  marketing  system 
and  the  problems  to  which  it  gives  rise.  There  is  little  attempt  to  pre- 
sent any  of  the  data  upon  which  his  analysis  and  consequent  statement 


648  Reviews  and  New  Books  [December 

of  principles  rests.  The  book  on  the  whole  reads  well,  and  is  relatively- 
free  from  technical  errors  in  statement,  but  there  is  little  that  is  new 
either  in  material  or  form  of  organization,  and  the  reviewer  believes  that 
frequently  the  generalizations  are  too  sweeping.  Illustrations  are  such 
statements  as  the  following:  "The  producer,  because  of  his  proximity  to 
the  middleman  and  his  removal  from  the  customer,  is  inclined  to  energize 
over  lowering  costs  of  production  so  that  he  may  be  able  to  offer  a  lower 
price  to  the  middleman  rather  than  to  render  his  products  more  capable 
of  giving  satisfaction  to  the  consumer"  (p.  9).  "Why  anyone  should 
believe  that  in  production  a  subdivision  of  processes  is  desirable  but  that 
in  distribution  it  is  not,  is  difficult  to  understand"  (p.  16).  "Chain 
stores  grew  up  in  response  to  the  demand  for  them  as  evidenced  by  the 
manufacturer's  willingness  to  give  quantit}^  discounts  to  any  organiza- 
tion of  retailers  able  to  buy  in  bulk"  (p.  73). 

Arthur  E.  Swanson. 

Johnson,  G.  F.  and  others.  The  management  and  the  worker.  (Chicago: 
A.  W.  Shaw  Co.      1922.) 

Kirk,  J.  G.  and  Street,  J.  L.  Bookkeeping  for  modern  business,  advanced 
course.      (Philadelphia:  John  C.  Winston  Co.      1921.      Pp.  118.) 

Krause,  L.  B.  Better  business  libraries — talks  xvith  executives.  (Chicago: 
Indexers  Press.      1922.      Pp.  98.) 

Contains  bibliographical  references  relating  to  periodicals  and  financial 
documents  related  to  business. 

LuNT,  E.  C.     Surety  bonds.      (New  York:  Ronald.  1922.  Pp.  370.  $2.50.) 

Mallett,  D.  T.  Who  makes  xchat;  bui/ers'  encyclopedia,  reference  di- 
rectory of  manufacturers'  products  and  trade  names.  (New  York:  Hard- 
ware Dealers'  Mag.,  t80  Lexington  Ave.      1921.      Pp.  400.      $2.) 

McGiLL,  F.  E.  Office  practice  and  busiriess  procedure.  (New  York: 
Gregg  Pub.  Co.      1922.     Pp.  308.) 

McKee,  H.  S.  The  A  B  C's  of  business.  (New  York:  Macmillan.  1922. 
$1.) 

Opdvke,  J.  B.  Business  letter  practice.  (New  York:  Pitman.  1922.  Pp. 
xix,  581.      $2.50.) 

Orwin,  C.  S.  Farming  costs.  New  edition.  (New  York:  Oxford  Univ. 
Press.      1921.      Pp.  141.      $3.85.) 

PowELsoN,  J.  A.  General  accounting.  Vol.  I.  (Syracuse,  N.  Y.:  Syra- 
cuse Extension  Inst,  of  Accountancy.      1922.) 

Risque,  F.  W.  Bookkeeping  and  business  management.  (New  York: 
U.  P.  C.  Book  Co.      1922.      Pp.  192.      $2.50.) 

Rittenhot'se,  C.  F.  and  Percy,  A.  L,  Accounting  problems:  intermediate. 
(New  York:  McGraw-Hill.      1922.      Pp.  xiii,  429.      $5.) 

A  comjiilation  of  problems  illustrated  by  model  statements  of  various 
types,  rather  than  a  presentation  of  accounting  theory.  It  is  designed 
for  second-year  students  or  those  further  advanced. 

Part  I  consists  of  more  than  40  model  forms  and  statements  with  com- 
ments and  interpretations;  and  part  II,  of  400  or  more  classified  problems 
and  questions  in  accounting  theory.  At  the  close  of  each  section  is  a 
bibliography. 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       649 

Russ,  W.  W.  and  Small,  F.  L.  Scientific  alloxcance  and  cost  system  for 
upper  leather  cutting  in  shoe  factories.  (Boston:  Shoe  Trades  Pub.  Co. 
1922.) 

ScHAUB,  L.  F.  and  Isaacs,  N.  The  laze  in  business  problems:  cases  and 
other  materials  for  the  study  of  legal  aspects  of  business.  (New  York: 
Macmillan.      1921.      Pp.  xxxiv,  821.) 

The  analytical  method  of  arrangement  and  treatment  in  this  recently 
published  volume  on  commercial  law,  which  is  intended  for  business  men 
and  students  in  universities  and  colleges,  is  unique.  The  book  was  looked 
for  eagerly  in  collegiate  schools  of  business  because  of  the  attractive, 
scholarly,  and  convincing  way  in  which  Professor  Isaacs  had  previously 
presented  his  views  on  commercial  law  teaching  as  distinguished  from  law 
school  teaching  (Journal  of  Political  Economy,  vol.  XXVIII,  Feb.,  1920). 
Each  of  the  two  points  of  view  presented — that  of  the  law  student  and 
that  of  the  student  of  business — calls  for  thorough  scholarship ;  the  book 
is  not  for  a  superficial  reader.  The  method,  involving  case  study  in 
combination  with  text,  shows  historical  development  with  the  following 
new  feature:  certain  subjects  are  broken  up  into  combinations  based  upon 
the  problems  of  the  business  man  rather  than  the  problems  of  the  special- 
ist. That  is,  the  law  of  corporations  is  not  found  all  together  in  one 
portion  of  the  work;  part  of  it  is  under  the  "Nature  and  formation  of 
business  relations";  part  under  "Relation  as  to  outsiders";  part  under 
"Internal  relations  of  business  organization";  and  part  under  "Dissolu- 
tion and  accounting  as  to  business  relations."  Partnership  law  is  split 
up  in  the  same  way,  and  so  is  Agency.  The  formation  of  relations  in 
business  organizations  is  made  the  important  thing,  for  example,  and 
fifty-two  pages  of  legal  treatment  are  given  to  it  under  the  subtopics 
Agency,  Partnership,  and  Corporations ;  the  primary  advantage  is  that  a 
comparison  may  be  made  of  these  forms  of  business  associations. 

To  the  business  man  this  is  very  logical,  and  it  appeals  to  the  student. 
The  lawyer  and  the  law-trained  person  are  confused  by  the  arrangement 
and  are  as  shocked  as  the  old-time  merchant  when  his  junior  partner 
substitutes  ledger  cards  for  the  bound  ledger.  But  the  book  is  not  in- 
tended for  lawyers  primarily,  although  it  may  aid  them  in  getting  a 
comprehensive  viewpoint  of  modern  business.  The  teacher  of  commercial 
law  in  collegiate  schools  of  business  will  welcome  the  volume  for  class 
use  if  he  can  adjust  his  course  to  it,  and  for  personal  use  under  any 
circumstances.  It  is  greeted  kindly  by  the  commercial  educators  who 
believe  that  all  subjects  of  commerce  should  be  taught  in  their  relation  to 
other  subjects  and  with  constant  reference  to  the  place  they  fill  and  the 
service  they  perform  in  the  general  business  life.  The  chapter  on  "Na- 
ture and  sources  of  the  law"  is  particularly  valuable.  Business  law  edu- 
cators will  find  that  such  chapters  as  "Limitations  on  trading  and  duty 
to  serve  the  public"  will  close  up  existing  gaps  very  satisfactorily. 

S.   W.   Oilman. 
University  of  Wisconsin. 

Secrist,  H.  a  business  barometer  for  retailers.  (Chicago:  Northwestern 
Univ.  School  of  Commerce,  Bureau  of  Business  Research.  1922.  Pp. 
20.      50c.) 

Although  various  studies  of  trade  conditions  and  operating  expenses 
in  several  kinds  of  business  have  been  made  bv  the  Bureaus  of  Business 


650  Reviews  and  Nexv  Books  [December 

Research  of  both  Northwestern  and  Harvard  Universities  heretofore, 
there  seems  to  have  been  no  attempt  to  present  the  results  in  such  form 
tliat  they  could  be  used  as  a  distinct  measure  of  trade  and  operating 
expense  tendencies.  Investigation  of  this  nature  should  be  extended  to  all 
retail  fields,  and  retail  associations  should  cooperate  fully  in  such  studies. 
This  jianiphlet,  dealing  with  a  barometer  for  the  retail  clothing  busi- 
ness, is  a  decided  advance  in  the  relatively  unexplored  field  of  special 
barometers.  The  general  business  barometer  becomes  more  valuable  as 
the  special  barometers  are  developed  for  each  kind  of  business.  One  is 
complementary  to  the  other,  and  when  manufacturers  and  distributors 
are  made  to  realize  this,  business  forecasting  will  take  tremendous  strides. 
Professor  Secrist's  study  has  been  extensive  enough  geographically  and 
chronologically  to  warrant  the  drawing  of  definite  conclusions  as  to  the 
trade  and  expense  tendencies  to  expect  from  two  different  angles,  namely, 
with  a  varying  size  of  store,  and  with  different  conditions  of  operation. 
Apart  from  content,  it  may  be  criticized  for  not  presenting  the  conclu- 
sions and  principles  in  a  way  that  would  be  more  likely  to  gain  the  atten- 
tion of  the  retail  clothing  merchant,  to  whom  the  message  is  most  useful. 
It  is  suggested  that  each  conclusion  reached  should  be  presented  in  bold- 
faced type,  and  that  a  final  summary  of  all  conclusions  shoidd  be  made 
in  the  same  sort  of  type,  and  preferably  placed  on  a  front  page.  Per- 
liaps  simple  and  specific  instructions  on  the  use  of  this  barometer  should 
also  be  given  to  the  retail  clothing  merchant.  The  pamphlet,  however,  is 
excellent  even  without  this  summary,  and  is  to  be  recommended  to  all 
retailers. 

Roger  W.  Babson. 

Shuhick,  a.   T.      Coal   mining  costs.      (New  York:   McGraw-Hill.      1922. 
Pp.  viii,  515.     $5.) 

Spiegel,  J.     Modern  business  cyclopedia.      (New  York:  Modern  Business 
Cyclopedia  Corp.,  1367  Broadway.      1922.      Pp.  320.     $4.) 

Sprague,  C.  E.     The  philosoph!/  of  accounts.     Fifth  edition.      (New  York: 
Ronald.      1922.      Pp.  xxviii,  183.      $2.50.) 

Tipson,  F.  S.      The  theory  of  accounts.      (New  York:  Isaac  Mendoza  Book 
Co.,  15  Ann  St.      1921".      Pp.  vii,  271.     $1.50.) 

White,   P.     Market   analysis:   its   principles   and   methods.      (New   York: 
McGraw-Hill.      1921.      Pp.  340.      $3.50.) 

The  various  steps  taken  in  analyzing  the  market  for  a  particular  com- 
pany are  presented  here.  In  the  first  seven  chapters  the  author  covers 
the  general  subjects  which  have  common  application  to  research  in  all 
the  fields  of  marketing.  The  first  chapter  serves  as  a  general  intro- 
duetion.  Then  follow  chai^ters  on  methods  of  securing  data,  analyzing 
data,  organizing  the  survey,  determining  the  problem  and  preliminary 
analysis.  In  the  following  eleven  chapters,  the  author  takes  up  the  dif- 
ferent elements  of  the  marketing  problem;  describes  for  each  of  these 
the  information  that  a  survey  should  seek  and  discusses  briefly  the 
methods  that  can  be  used.  The  elements  treated  are  the  product,  the 
company,  the  industry,  competition,  customers,  the  ultimate  consumer,  the 
nature  and  size  of  market,  potentialities  and  limitations  of  the  market, 
distribution,  sales  and  advertising,  and  foreign  markets.  The  final  chapter 
treats  of  the  application  of  a  market  survey  to  business. 


1922]  Accounting,  Business  Methods,  Investments,  Exchanges       651 

The  strong  features  of  the  book  are  the  exhaustive  description  of  the 
information  needed  on  each  of  the  elements  in  marketing  and  the  practical 
approach  to  the  subject.  Each  of  the  chapters  is  prefaced  with  an  out- 
line in  question  form.  These  outlines  are  commendably  complete.  The 
book  should  prove  very  suggestive  to  persons  interested  in  market  surveys, 
whether  professional  men  or  business  executives. 

The  portions  of  the  book  which  could  be  materially  strengthened  are 
particularly  the  preparation  of  the  questionnaire,  methods  of  statistical 
presentation,  and  graphing.  Concerning  the  preparation  of  the  question- 
naire, the  illustrations  used  are  not  representative  of  what  can  be  done. 
The  discussion  of  methods  of  statistical  presentation  is  confined  to  a 
page  and  a  half  and  is  necessarily  much  abridged.  It  would  seem  that 
in  a  book  which  stresses  scientific  methods,  there  should  be  a  more  com- 
plete discussion  of  statistical  method.  In  reference  to  graphing,  several 
illustrations  are  used  which  call  for  the  comparison  of  such  pictured 
objects  as  houses,  motors  and  meter  indicators.  The  discussion  of  the 
bar  chart  is  limited  to  a  statement  that  Brinton  proposed  it  as  the  best, 
and  that  in  Brinton's  estimation  it  is  better  than  the  curve  or  any  other 
geometrical  form.  The  circle  chart,  the  author  states,  is  an  excellent 
method  of  showing  component  parts  or  comparisons  of  costs. 

Arthur  E.   Swanson. 
WiLLisTON,  S.      The  law  of  contracts.     Vol.  V,  Forms,  by  C.   M.   Lewis. 
(New  York:  Baker,  Voorhis  &  Co.      1922.     Pp.  xi,  725.) 

The  accountant's  dictionary.  Vol.  I.  Edited  by  F.  W.  Pixley.  (New 
York:  Pitman.      1922.) 

Course  in  textile  production  methods.  Vol.  Ill,  Organization.  Vol.  IV, 
Handling  equipment.  Vol.  V,  Production  records.  Vol.  VI,  Manage- 
ment.     (New  York:  Business  Training  Corporation.      1922.) 

Explanation  of  schedide  for  department  stores.  Publications  of  the  Grad- 
uate School  of  Business  Administration,  Harvard  University,  bull.  29. 
(Cambridge:  Harvard  Univ.  Press.      1922.      Pp.  32.      $1.) 

Methods  of  paying  salesmen  in  the  coffee  roasting  and  grocery  trade. 
Prepared  by  the  New  York  University  Bureau  of  Business  Research, 
Lewis  H.  Haney,  Director.  (New  York:  N.  Y.  Univ.  Bureau  of  Busi- 
ness Research.      1922.      Pp.  15.) 

This  study  was  prepared  for  the  National  Coffee  Roasters  Association, 
and  is  in  part  based  upon  76  replies  to  a  questionnaire  previously  dis- 
tributed. It  shows  that  there  is  an  entire  lack  of  uniformity  in  the 
methods  followed,  and  that  there  is  need  of  developing  cost  accounting 
methods  in  order  to  secure  standardization  for  purposes  of  comparison. 
The  Bureau  sums  up  its  conclusions  concisely  on  page  11. 

Nexv  York  curb  exchange  as  vierced  by  208  members  of  the  American 
Economic  Association.  (New  York:  New  York  Univ.  Bureau  of  Business 
Research.      1922.      Pp.   11.) 

Normal  burden  rates:  some  problems  in  their  application.  Official  publica- 
tions, July  1,  1922.  (New  York:  National  Assoc,  of  Cost  Accountants. 
1922.      Pp.  12.) 

Operating  expenses  in  department  stores  in  1921.  Publications  of  the 
Graduate  School  of  Business  Administration,  Harvard  University,  bull. 
33.      (Cambridge:  Harvard  Univ.  Press.      1922.      Pp.44.     $1.) 


652  Reviews  and  New  Books  [December 

Operating  expenses  and  profits  of  New  York  wholesale  grocers  during  1921. 
(New  York:  N.  Y.  Wholesale  Grocers'  Assoc.,  100  Hudson  St.      Pp.  4.) 

Questionnaire  on  personnel  activities  in  the  federal  reserve  hanks  and  their 
branches.  (Chicago:  Federal  Bank  of  Chicago,  Committee  on  Per- 
sonnel.     1922.) 

The  retail  charge  account.  Prepared  under  the  direction  of  the  Educational 
Committee  of  the  Associated  Retail  Credit  Men  of  New  York  City.  (New 
York:  Ronald.      1922.      Pp.  xiii,  264.) 

Retail  inventory  shortages  and  remedies.  (Boston:  Chamber  of  Com- 
merce.     1922.) 

Capital  and  Capitalistic  Organization 

Employers'  Associations  in  the  United  States.  Bj  Clarence  E. 
BoNNETT.  (New  York :  Macmillan.  1922.  Pp.  xviii,  594.  $4.00.) 
We  have  liad  for  years  an  extensive  and  constantly  growing  litera- 
ture on  trade  unions;  for  tlie  first  time  we  now  have  a  book  devoted 
exclusively  to  employers'  associations.  This  neglect,  while  it  may  be 
explained,  cannot  so  readily  be  excused.  If  we  are  to  understand  the 
industrial  conflict,  we  must  know  about  both  parties  to  it.  We  can 
have  only  lopsided  and  inaccurate  explanations  of  it  so  long  as  the  nar- 
rator proceeds  in  virtual  ignorance  of  one  of  the  parties  involved. 
Whother  our  interest  is  in  a  scientific  interpretation  of  industrial 
})!u'nomcna  or  in  a  practical  solution  of  industrial  disputes,  the  facts 
are  equally  essential.  Professor  Bonnett's  book  is  a  very  timely  con- 
tribution, of  special  interest  at  this  time  when  issues  such  as  the  closed 
shop  are  being  stubbornly  fought. 

In  this  pioneer  investigation  the  author  has  undertaken  to  open  up, 
not  to  exhaust,  liis  subject.  Aside  from  a  few  observations  at  the 
beginning  and  at  the  close  of  the  book,  he  lias  foregone  the  privilege  of 
offering  his  own  interpretation,  which  does  not  appear  except  as  a 
running  comment  and  as  the  basis  of  the  classification  and  organization 
of  the  material.  From  the  profusion  of  citations  one  would  conclude 
he  had  consulted  and  commented  upon  all  the  existing  pertinent  ma- 
tirial.  The  bulk  of  the  book  is  eitlier  in  quotation  marks  or  is  support- 
I'd  directly  by  references. 

Except  in  the  introduction  and  in  the  summary  and  conclusions,  the 
author  confines  himself  to  the  analysis  and  description  of  typical  asso- 
ciations. Prom  the  iron  and  steel  industry  he  has  selected  the  Stove 
Founders'  National  Defense  Association  as  the  only  negotiatory,  and 
the  National  Founders'  Association,  the  National  Metal  Trades  Asso- 
ciation, and  the  National  Erectors'  Association  as  the  typical  belli- 
gerent associations.  The  Building  Trades  Employers'  Association  of 
New  York  City  and  the  Building  Construction  Employers'  Association 
of  Chicago  represent  the  building  trades  and  are  described  as  being 


1922]  Capital  and  Capitalistic  Organization  653 

mainly  negotiatory.  The  printing  industry  furnishes  the  American 
Newspaper  Publishers'  Association  as  a  type  of  the  negotiatory,  and 
the  United  Typothetae  of  America  as  a  partly  belligerent  organization. 
Not  confined  to  any  industry  are  the  National  Association  of  Manu- 
facturers, the  National  Civic  Federation,  the  League  of  Industrial 
Rights,  and  the  National  Industrial  Conference  Board,  all  of  them 
propagandist  associations  but  with  widely  different  functions  and  aims. 
Finally,  as  a  type  of  local  association  of  the  belligerent  kind,  is  pre- 
sented the  Associated  Employers  of  Indianapolis. 

A  definite  order  is  followed  in  the  analysis  of  all  the  selected  associa- 
tions. The  membership  and  organization,  the  principles  and  aims,  the 
activities  and  achievements,  and  the  interrelations  with  other  associa- 
tions, are  the  standard  parts  of  the  discussion.  The  evolution  from 
one  attitude  to  another,  or  from  one  form  of  organization  to  another, 
is  presented  when  the  change  has  been  marked  or  significant.  To  cull 
out  of  a  vast  mass  of  material,  most  of  it  indifferently  poor  for  this 
purpose,  so  much  that  is  interesting  and  useful,  and  to  organize  it 
without  appearing  to  repeat,  must  have  been  a  difficult  task,  but  one 
that  has  for  the  most  part  been  creditably  performed.  To  intelligent 
employers  and  labor  leaders,  as  well  as  to  the  student  with  an  industrial 
background,  the  somewhat  technical  terminology  should  present  no 
difficulties.  On  the  part  of  the  general  reader  it  requires  careful 
thinking;  and  it  ought  to  stimulate  something  of  the  same  sort  in 
others. 

It  is  no  fault  of  the  book  that  it  does  not  give  us  everything  that 
could  be  wished  in  its  field.  There  are  other  industries  than  those  men- 
tioned in  which  collective  bargaining  has  been  developed  to  some  extent, 
such  as  the  mining,  transportation,  textile,  and  clothing  industries ;  in 
most  of  them  the  conditions  are  somewhat  peculiar,  causing  one  to 
wonder  whether  in  them  employers'  associations,  in  so  far  as  they  exist, 
are  similar  to  those  described.  Upon  further  investigation,  there  will 
doubtless  be  presented  a  fuller  treatment  of  the  genesis  and  evolutionary 
changes  in  the  more  significant  associations.  The  new  book  ought  to 
stimulate  new  investigations  to  throw  light  on  the  interrelations  and 
interactions  of  unions  and  employers'  associations. 


Jens  P.  Jensen. 


University  of  Kansas. 


NEW    BOOKS 


Moody,  J.  The  masters  of  capital:  a  chronicle  of  Wall  Street.  (New 
Haven:  Yale  Univ.  Press.      1921.     Pp.  ix,  234.) 

Page,  K.  The  United  States  Steel  Corporation :  an  analysis  of  the  social 
consequences  of  modern  business  policies.  (New  York:  Doran.  1922. 
Pp.  32.      10c.) 

Reprinted  from  the  Atlantic  Monthly,  May,  1922. 


654  Reviews  and  New  Books  [December 

Smith,  J.  B.  R.,  editor.     Nezc  York  lazes  affecting  business  corporations. 

Revised  to  May  1,  1922.     Third  edition.      (Albany:  U.   S.   Corporation 

Co.      1922.     Pp.  xxxii,  260.) 
Wilcox,   D.   F.     Announcement — The   basis   of   a  public   utility   program. 

Public  utilities  for  public  service,  leaflet  no.  4.      (Grand  Rapids,  Mich.: 

Delos  F.  Wilcox,  436  Crescent  St.      1922.      Pp.   16.) 

Federal  Trade  Commission  service.  Third  edition.  (New  York:  Corpora- 
tion Trust  Co.      1922.) 

Public  utilities  reports,  containing  decisions  of  the  public  service  commis- 
sions and  of  state  and  federal  courts.  Edited  by  H.  C.  Spurr.  .  (Roches- 
ter, N.  Y.:  Public  Utilities  Reports,  Inc.      1922.'     Pp.  xxxii,  975.) 

Labor  and  Labor  Organizations 

Industrial  Unionism  in  America.  By  Marion  Button  Savage.  (New 
York  :  The  Ronald  Press  Company.  1922.  Pp.  v,  334.  $2.25.) 
The  main  objects  of  this  volume  are  to  "describe  the  different  in- 
dustrial unions  which  are  functioning  today"  and  to  "draw  some  gene- 
ral conclusions  as  to  the  direction  in  Avhich  the  labor  movement  is  likely 
to  develop  in  the  future."  It  necessarily  gives  considerable  historical 
matter  pertaining  to  the  unions  under  review,  but  it  does  not  attempt  to 
relate  their  history  in  detail.  It  draws  liberally  on  previous  writers, 
such  as  Brissenden,  Budish  and  Soule,  and  Schlueter,  for  some  of  the 
unions. 

After  giving  attention  to  industrial  unionism  in  England,  to  the 
Knights  of  Labor,  and  to  craft  unionism,  the  author  considers  in- 
dustrialism as  it  has  developed  within  the  American  Federation  of 
Labor.  One  chapter  shows  the  tendencies  toward  the  industrial  form 
of  organization  which  have  appeared  in  such  "orthodox"  unions  as  the 
Meat  Cutters,  the  Longshoremen,  and  the  Printers,  and  in  the  five 
Departments  of  the  Federation,  The  author  corrects  the  statement 
of  Professor  Commons  and  his  associates  that  the  Departments  con- 
stitute the  "industrial  unionism  of  the  upper  stratum"  by  showing 
that  the  alliance  of  the  different  trades  in  the  Departments  is  too  loose 
to  produce  true  industrial  unionism.  Separate  chapters  are  given  to 
the  unions  in  the  brewing  industry,  in  coal  mining,  and  in  metal  mining. 
The  second  general  section  deals  with  those  forms  of  revolutionary 
industrial  unionism  wliich  have  been  designed  to  embrace  workers  from 
all  industries.  The  organizations  treated  here  are  the  Industrial 
Workers  of  the  World,  the  Workers'  International  Industrial  Union, 
and  the  One  Big  Union.  A  final  section  considers  independent  in- 
dustrial unions,  such  as  the  Amalgamated  Clothing  Workers,  the 
Amalgamated  Textile  Workers,  and  the  less  important  industrial 
unions  among  railroad,  metal,  food,  tobacco,  and  automobile  workers. 
The  book  affords  an  excellent  summary  of  the  development  of  in- 


1922]  Labor  and  Labor  Organizations  655 

dustrial  unions.  Its  treatment  of  the  growth  of  industrialism  during 
the  past  three  years  is  especially  useful.  The  pliilosophy  of  the  in- 
dustrialists is  also  well  handled.  Considerable  attention  is  devoted  to 
the  differences  in  the  viewpoints  of  the  various  unions  as  well  as  to  the 
beliefs  which  they  hold  in  common.  It  is  clearly  shown  why  industrial 
unionism,  more  than  craft  unionism,  should  advocate  the  democratic 
ownership  and  control  of  industry  and  champion  the  doctrine  of  the 
class  struggle.  Although  the  author  contends  that  the  industrial 
form  of  organization  is  likely  to  gain  ground  in  the  future,  she  does 
not  believe  that  it  is  suited  to  all  types  of  employment.  The  trade 
union  will  hold  its  own  in  many  fields.  Furthermore,  she  takes  issue 
with  those  advocates  of  industrialism  who  contend  that  their  S3'stem 
will  abolish  all  jurisdictional  disputes.  Lines  of  demarcation  between 
industries  are  often  blurred. 

The  publishers  have  placed  the  volume  on  the  market  as  a  "business 
book."  It  sliould  be  an  interesting  experiment  to  approach  the  average 
business  man  with  a  book  which  describes  the  Industrial  Workers  of  the 
World,  even  though  this  organization,  as  the  author  shows,  has  recently 
turned  to  the  study  of  industrial  management,  technical  processes,  and 
blue  prints. 

Fraxk  T.  Stockton. 

University  of  South  Dakota. 

NEW    BOOKS 

AxDREw,  J.  B.  Labor  problems  and  labor  legislation.  Second  edition, 
completely  revised.  (New  York:  Am.  Assoc,  for  Labor  Legis.,  131  East 
23d  St.     'l922.      Pp.  135.) 

AsKwiTH,  Lord.  Industrial  problems  and  disputes.  (New  York:  Harcourt, 
Brace  &  Co.      1921.      Pp.  x,  494.      $5.) 

Lord  Askwith  writes  from  a  long  and  successful  experience  as  a 
mediator  and  arbitrator  in  industrial  disputes.  After  several  years  of 
intermittent  service  undertaken  at  the  request  of  the  Board  of  Trade 
under  the  Conciliation  act,  during  which  time  he  continued  to  follow  his 
profession  of  law,  he  entered  the  civil  service  in  1907  to  give  his  entire 
time  to  the  harmonizing  of  industrial  relations.  In  1911  he  was  made 
Chief  Industrial  Commissioner.  He  retired  at  the  end  of  1918  with  the 
recognition  of  elevation  to  the  peerage.  His  industrial  memoirs  con- 
stitute one  of  the  most  valuable  contributions  in  English  on  the  causes 
and  methods  of  settlement  of  industrial  disputes. 

The  book  is  in  the  form  of  a  narrative,  interspersed  with  comment  and 
criticism.  It  gives  us  an  "inside"  history  of  all  the  important  disputes 
in  the  United  Kingdom  during  the  period  of  Lord  Askwith's  activity.  His 
account  of  the  issues,  the  attendant  circumstances  adding  to  the  diffi- 
culty of  settlement,  and  the  steps  taken  to  secure  adjustment,  is  most 
enlightening.  The  individual  disputes  are  not  treated  as  isolated  occur- 
rences but  stand  revealed  as  the  product  of  general  causes  and  tendencies. 
The  interaction  of  demands  and  successes  in  one  trade  upon  other  trades 
is  clearly  brought  out.      Nor  does  he  neglect  to  give  us  his  impressions  of 


656  Reviews  and  New  Books  [December 

the  leading  actors  and  the  incidents  of  human  interest.      It  is  not  at  all 
an  impersonal  account. 

Much  discussion  is  given  to  machinery  and  methods  of  governmental 
intervention  in  industrial  disputes.  There  is  an  interesting  chapter  on  the 
failure  of  the  Industrial  Council,  established  in  1911,  of  which  the  author 
was  the  first  chairman,  and  another  on  his  visit  to  Canada  in  1912  to 
study  the  workings  of  the  Canadian  Industrial  Disputes  act.  There  is 
a  great  deal  that  is  not  to  be  found  in  the  official  reports.  When  he  comes 
to  the  activities  of  the  government  in  relation  to  labor  during  the  war, 
he  makes  scathing  criticisms  of  the  policy,  or  lack  of  policy,  of  the 
Cabinet.  He  is  especially  severe  on  certain  ministers  who  undertook  to 
intervene. 

Lord  Askwith  does  not  restrict  himself  to  a  discussion  of  industrial 
disputes.  He  is  deeply  concerned  over  the  choice  of  occupations  and  the 
training  of  young  workers.  He  gives  his  first  five  chapters  to  this 
subject.  He  expresses  dissatisfaction  with  the  labor  exchanges  and  the 
government  policy  as  to  unemployment  generally.  He  has  great  respect 
for  the  operation  of  economic  forces  and  shows  deep  sympathy  with  the 
aspirations  of  the  workers.  These  are  not  to  be  satisfied,  he  holds, 
through  syndicalism  or  socialism,  Marxian  or  guild. 

D.  A.  McC. 

Broderick,  J.  T.  Pulling  together.  (Schenectady,  N.  Y. :  Robson  &  Adee. 
1922.     Pp.  141.     $1.) 

A  sympathetic  discussion  of  the  relations  of  capital  and  labor  and  a 
plea  for  employee  representation  in  the  management  of  industry.  The 
author  has  had  extensive  business  experience. 

De  Montgomery,  B.  G.  British  and  continental  labour  policy.  (London: 
Routledge.      1922.     21s.) 

Felt,  D.  E.  7.v  organised  labor  slipping?  (Chicago:  Felt  &  Tarrant 
Manufacturing  Co.) 

HoDGSKiN,  T.  Labour  defended.  Introduction  by  G.  D.  H.  Cole.  (Lon- 
don: Labour  Pub.  Co.     1922.     Is.  6d.) 

Meyer,  E.  Die  zukiinftigen  deutschen  Arbeitsgerichte.  (Berlin:  Engel- 
mann.      1922.) 

Morrow,  E.  H.  The  Lynn  plan  of  representation.  (Lynn,  Mass.:  General 
Electric  Co.      1921.    'Pp.  48.) 

Thesis  submitted  in  partial  fulfillment  of  the  requirements  for  the 
degree  of  Master  in  Business  Administration  at  the  Harvard  School  of 
Business  Administration. 

Orth,  S.  P.  The  armies  of  labor;  a  chronicle  of  the  organized  wage- 
earners.      (New  Haven:  Yale  Univ.  Press.      1921.      Pp.  ix,  279.) 

Page,  K.  Collective  bargaining;  an  ethical  evaluation  of  some  phases  of 
trade  unionism  and  the  open  shop  movement.  (New  York:  Doran.  1922. 
Pp.  32.      10c.) 

ScELLE,  G.  Le  droit  ouvrier.  (Paris:  Lib.  Armand  Colin.  1922.  Pp. 
210.     6  fr.) 

A  discussion  of  the  rights  of  the  workingman  under  the  French  law, 
and  a  history  of  their  development  from  the  time  of  the  French  Revolu- 
tion till  today.      The  author's  conclusion  is  that  the  present  weakening 


1922]  Labor  and  Labor  Organizations  657 

of  the  power  of  organized  labor  in  France  is  only  temporary ;  he  looks 
forward  to  the  development  of  that  power  through  a  combination  of 
unionism  and  syndicalism  by  whicli  "the  union  shall  become  the  repre- 
sentative of  organization  by  trades,"  and  the  acts  of  the  "councils"  of 
workmen  and  employers,  from  the  shop  council  up  to  the  national  council, 
shall  be  recognized  by  the  law  and  lead  to  a  more  cooperative  spirit  and 
the  abolition  of  strikes.  By  the  way  is  an  interesting  discussion  of  com- 
pulsory arbitration. 

R.  R.  W. 

Snowden,  Mrs.  P.,  Thomas,  J.  H.  and  others.      What  xce  want  and  why, 
(London:  Collins.      1922.      7s.  6d.) 

Stone,  G.     A  history  of  labour.      (New  York:  Macmillan  Co.      1922.     Pp. 
416.) 

The  author  describes  his  work  in  the  preface  as  "a  humble  attempt 
to  depict  in  the  broadest  manner  possible  the  history  of  the  masses,  not 
only  in  England,  but  in  other  countries  also,  from  the  days  when  they 
were  slaves  to  the  days  when  they  are  free."  Tested  by  the  standards  of 
scholarly  writing  the  book  falls  far  short  of  the  promise  of  its  title.  It  is 
incomplete  in  its  treatment  of  many  situations  which  it  takes  up,  and  it  is 
weak  in  its  exposition  of  the  workings  of  the  economic  forces  which  have 
brought  about  great  changes  in  the  position  of  agricultural  and  industrial 
labor.  The  references  to  other  countries  than  England  are  incidental 
rather  than  complementary.  As  a  history  of  the  masses  it  adds  nothing 
to  the  facts  already  available  in  standard  works  and  it  leaves  out  much 
that  is  essential  to  a  well-balanced  historical  account. 

The  reason  for  the  book^  however,  is  quite  other  than  the  impersonal 
writing  down  of  the  results  of  scholarly  research.  The  author's  purpose 
is  frankly  to  show  that  "natural  tendencies  favour  evolution  and  oppose 
most  sharply  revolution."  It  is  an  argument  for  parliamentary  action 
as  against  direct  action.  He  attempts  also  to  throw  the  guild  socialists 
into  confusion  by  showing  that  political  democracy  has  not  left  the  or- 
dinary man  substantially  in  the  old  bondage  but  has  advanced  his  economic 
condition  and  can  be  used  to  advance  it  much  more.  So  dominant  is  this 
thought  that  majority  rule  is  the  way  of  economic  salvation  for  the 
masses  that  he  makes  the  Reform  Bill  of  1832  the  dividing  line  between 
the  two  parts  of  the  book,  the  "Past"  and  the  "Present." 

The  "Past"  occupies  over  half  the  book.  The  "Present"  opens  with  a 
chapter  depicting  the  struggle  for  the  reform  of  the  parliamentary  fran- 
chise. The  storj^  moves  on  rapidly  thereafter  through  factory  acts,  mini- 
mum wage  laws,  housing  acts  and  provision  for  free  education.  Here, 
as  in  part  one,  interesting  and  graphic  descriptions  are  woven  into  the 
warp  of  well-known  facts.  The  trade  unions  are  not  assigned  a  very 
important  part  in  the  upward  movement.  They  get  but  one  chapter  for 
themselves  and  this  is  the  last  chapter  of  the  "Past."  It  deals  largely 
with  their  legal  position  and  political  activities,  and  ends  with  a  warning 
against  direct  action.  The  final  chapter  is  an  argument  against  national- 
ization of  the  coal  mines. 

D.  A.  McC. 

Valdour,  J.      Ouvriers  parisiens  d'apres-guerre.      (Paris:  Rousseau.    1921.) 

Vernon,  H.  M.     Industrial  fatigue  and  efficiency.      (London:  Routledge. 
New  York:  Button.      1921.     Pp.  viii,  264.     $5.) 


(558  Reviews  and  New  Books  [December 

Innumerable  tables  and  graphs,  and  the  citation  of  data  concerning  the 
production  of  bobbin-winders,  metal-polishers,  drillers,  riveters,  weavers, 
coal  miners  and  workers  in  many  other  occupations  make  this  volume  a 
storehouse  of  concrete  facts  regarding  production  and  fatigue.  The 
problems  of  hourly,  daily  and  seasonable  output,  length  of  day,  night 
work,  over-time,  shifts,  breaks,  rest  periods,  limitation  of  output,  lost  time, 
sickness  accidents,  and  mortality  are  all  treated  with  considerable  in- 
dustrial data.  Rather  too  little  space,  as  a  matter  of  fact,  is  devoted  to 
interpretation  of  the  data;  and  the  reader,  impressed  with  the  infinite 
number  of  variables  affecting  production  through  subjective  or  objective 
fatio-ue,  is  likely  to  be  more  bewildered  than  inspired  by  the  inclusiveness 
of  the  experimental  method.  Summaries  isolating  the  salient  facts  would 
greatly  enhance  the  value  of  the  book. 

Charles  Leonard  Stone. 

Watkins,  G.  S.  An  introduction  to  the  study  of  labor  problems.  (New 
York:  Crowell.      1922.      Pp.  xv,  664.     $3.) 

Woodbury,  H.  S.  The  teorking  children  of  Boston — study  of  child  labor 
under  a  modern  system  of  legal  regulation.  Children's  Bureau  pub.  no. 
89.      (Washington:  Supt.   Docs.      1922.     25c.) 

Clothing  icorkers  of  Chicago,  1910-1922.  (Chicago:  Amalgamated  Cloth- 
ing Workers  of  America,  31  Union  Sq.      1922.      Pp.  424.) 

Engineering  trades  dispute,  1922.  Report  of  the  Court  of  Inquiry  appoint- 
ed under  the  Industrial  Courts  act,  1919.  (London:  H.  M.'s  Stationery 
Office.      1922.      6d.) 

Less  than  a  living  xoage.  (New  York:  Consumers'  League  of  N.  Y.,  289 
Fourth  Ave.      1921.     Pp.  9.) 

lAsi  of  societies  affiliated  to  the  Labour  party.  (London:  The  Labour 
Party,  33  Eccleston  Sq.      1922.      Pp.  59.) 

Report  of  the  executive  committee  of  the  Labour  party,  1921-1922.  (Lon- 
don: The  Labour  Party.      1922.      Pp.  140.) 

A  study  in  labor  mobility.  By  the  Industrial  Research  Department, 
Wharton  School  of  Finance  and  Commerce,  University  of  Pennsylvania. 
Supplement  to  The  Annals,  vol.  CIII,  no.  192,  Sept.,  1922.  (Phila- 
delphia: Am.  Academy  Pol.  and  Soc.  Sci.      1922.      Pp.  75.) 

In  cooperation  with  a  number  of  firms  representing  a  wide  variety  of 
eni])loyments,  the  Industrial  Research  Department  of  the  Wharton  School 
has  undertaken  to  carry  on  a  series  of  continuing  investigations  of  per- 
sonnel problems  in  the  Philadelphia  district.  Two  distinctive  features 
are  the  limitation  of  area  and  the  continuous  reporting  of  data  by  the 
employers  in  accordance  with  instructions  furnished  by  the  Department. 
Of  these  investigations,  the  study  of  labor  mobility,  begun  in  January, 
1921,  is  the  first  fruit.  The  monograph  presents  an  outline  of  the  scope 
and  nietliod  of  the  investigation  and  a  preliminary  report  of  findings, 
based  on  the  data  secured  in  the  first  eighteen  months.  The  study  has 
been  made  and  the  report  prepared  under  the  direction  of  Miss  Anna 
Bezanson.  It  is  a  modest  and  highly  suggestive  introduction  to  an 
important  piece  of  research — important  in  method  as  well  as  in  subject. 
Further  reports  on  the  progress  and  results  of  this  study  will  be  awaited 
with  interest.  D.  A.  McCabe. 


1922]  Money,  Prices,  Credit,  and  Banking  659 

Two  investigations  in  potters'  shops.  Reports  to  the  Industrial  Fatigue 
Board.      (London:  H.  M.'s  Stationery  Office.      1922.      2s.  6d.) 

Wage  changes  in  various  countries,  1914--1921.  (Geneva:  International 
Labor  Office.      1922.      Pp.  76.     40c.) 

Wages  in  foreign  countries.  Research  report  no.  53.  (New  York:  Na- 
tional Industrial  Conference  Board.      1922.      Pp.   131.     $1.50.) 

Wages  and  hours  in  American  manufacturing  industries,  July,  1914 — 
January,  1922.  Research  report  no.  52.  (New  York:  National  In- 
dustrial Conference  Board.      1922.      Pp.  245.     $2.) 

Money,  Prices,  Credit,  and  Banking 

The  Guaranty  of  Bank  Deposits.  By  Thomas  Bruce  Robb.  (Boston: 
Houghton  Mifflin  Company.      1921.     Pp.  xiv,  225.     $2.25.) 

The  first  twelve  years  of  the  history  of  the  experiment  in  the  gua- 
ranty of  bank  deposits  carried  on  in  this  country  in  Oklahoma,  Kansas, 
Nebraska,  Texas,  South  Dakota,  North  Dakota,  Mississippi  and 
Washington  are  the  subject  of  this  little  book,  which  belongs  to  the 
Hart,  Schaffner  and  Marx  series  and  was  awarded  second  prize  in  the 
competition  for  the  year  ending  June  1,  1919.  The  historical  portion, 
chapters  3  to  7  inclusive,  is  preceded  by  a  chapter  on  the  nature  of  bank 
credit  and  by  one  entitled  "Government  guaranty  of  bank  credit,"  and 
is  followed  by  "The  effect  of  the  laws,"  a  conclusion,  and  a  bibliography 
and  index. 

The  author's  discussion  of  the  nature  of  bank  credit  is  very  brief 
(six  pages)  and  follows  traditional  lines.  He  calls  attention  to  the 
function  of  banks  as  intermediaries  between  the  lenders  and  borrowers 
of  capital  and  emphasizes  particularly  what  he  calls  their  function  as 
manufacturers  of  credit.  He  uses  this  term  to  describe  what  a  bank 
does  when  it  exchanges  its  notes  or  a  credit  balance  on  a  checking 
account  for  the  notes  or  other  obligations  of  its  customers  due  in  the 
future.  He  also  speaks  in  this  connection  of  "the  service  a  bank  per- 
forms as  an  insurer  of  individual  credit"  (p.  4),  but  does  not  appar- 
ently note  any  discrepancy  between  the  use  of  the  terms  "manu- 
facturer" and  "insurer"  of  credit  as  descriptive  of  the  same  function 
of  a  bank. 

In  the  second  chapter  he  traces  the  evolution  of  the  problem  for 
which  the  guaranty  of  bank  deposits  has  been  proposed  as  a  solution, 
namely,  that  occasioned  b}-  the  growth  of  deposit  banking  which  has 
made  the  checking  account  the  chief  element  in  our  modern  medium  of 
exchange.  Before  this  comparatively  recent  development  the  bank 
note  was  the  chief  instrument  of  commercial  banking  and  an  important 
element  in  the  medium  of  exchange,  and  the  protection  of  the  note 
holder  was  the  chief  aim  of  legislation  designed  for  the  safeguarding 
of  the  banking  business.     The  growth   of  deposit  banking  has   ren- 


660 


Reviews  and  New  Bools  [December 


dered  this  old  protective  legislation  comparatively  ineffective  as  a 
safeguard  against  bad  banking,  and  the  essential  similarity  of  bank 
notes  and  checking  accounts,  both  from  the  standpoint  of  the  bank 
and  from  that  of  the  public,  and  the  prominence  of  the  mutual  insur- 
ance idea  in  much  of  this  old  legislation  suggest  the  mutual  guaranty 
of  bank  deposits  as  the  logical  method  of  meeting  the  problem  pre- 
sented by  the  constantly  increasing  use  of  the  checking  account. 

In  the  historical  chapters  he  shows  that  the  occasion  of  bringing  this 
method  of  safeguarding  the  public  against  bad  banking  into  the  sphere 
of  practical  politics,  in  this  country,  was  the  hard  times  which  suc- 
ceeded the  crises  of  1893  and  1907.  The  combination  of  crop  fail- 
ures and  business  depression  in  our  western  states  in  the  period  follow- 
ing the  crisis  of  1893  produced  a  large  number  of  bank  failures  and 
great  distress  among  farmers.  The  Populist  movement  which  resulted 
incorporated  the  guaranty  of  deposits  among  the  other  reform  pro- 
jects proposed.  The  bankers  were  in  opposition  at  first  and  prevented 
legislation  until  the  return  of  good  times  removed  the  chief  causes  of 
the  agitation. 

The  idea  reappeared  in  the  Oklahoma  Constitutional  Convention  of 
1906,  fathered  by  J.  T.  Dickenson,  who  had  been  prominent  in  Kansas 
in  Populist  days,  and  Charles  N.  Haskell,  who  afterwards  became 
governor  of  the  new  state  of  Oklahoma.  Failing  in  the  constitutional 
convention,  the  advocates  of  the  proposition  submitted  it  to  the  first 
legislature  of  the  new  state,  which  was  in  session  at  the  time  of  the 
panic  of  1907,  and,  aided  by  the  conditions  accompanying  the  panic 
and  by  the  executive  committee  of  the  Oklahoma  and  Indian  Territory 
Bankers  Association,  they  succeeded  in  making  it  law  on  December  13, 
1907. 

Similar  fundamental  conditions  were  responsible  for  the  Kansas, 
Nebraska,  Texas,  and  first  South  Dakota  laws,  passed  two  years  later, 
though  the  detailed  events  leading  up  to  them  were  different  in  each 
state.  The  destruction  of  the  cotton  crop  by  the  boll  weevil,  accom- 
panied by  a  large  number  of  bank  failures  in  1912  and  1913,  together 
with  the  prominence  given  to  the  idea  by  the  laws  in  the  other  states 
and  by  its  endorsement  by  the  Democratic  party  in  the  campaign  of 
1908,  accounts  for  the  passage  of  the  Mississippi  law  in  1914.  The 
Wasliington  and  North  Dakota  laws,  passed  in  1917,  were  the  result 
of  agitation  begun  long  before  and  aided  in  Washington  by  four  bank 
failures  in  Seattle  while  the  measure  was  pending  in  the  legislature, 
and  in  North  Dakota  by  the  example  of  her  sister  state  to  the  south. 

In  summarizing  "the  effects  of  the  laws"  in  chapter  8,  the  author 
examines  the  arguments  pro  and  con  and  weighs  them  in  the  light  of 
the  experience  he  has  described. 

His  own  predilections  are  clearly  in  favor  of  them,  but  both  his 


1922]  Money,  Prices,  Credit,  and  Banking  661 

analysis  and  his  statement  of  the  opposing  views  are  fair.  He  thinks 
that  the  opponents  of  the  experiment  have  underestimated  the  need 
of  protection  to  depositors,  overestimated  the  tendency  of  guaranty 
laws  to  produce  reckless  banking,  and  overworked  the  argument  that 
they  cause  injustice;  but,  on  the  other  hand,  he  thinks  that  its  advo- 
cates have  overestimated  its  importance  as  a  cure  for  panics  and  as  a 
panacea  for  other  banking  ills.  Like  other  forms  of  insurance  this 
one,  he  thinks,  is  valuable  and  desirable  if  properly  safeguarded. 
"Honest  insurance,"  he  says,  "has  proved  a  great  blessing  to  mankind, 
but  it  is  likewise  true  that  corrupt  and  dishonest  insurance  may  equally 
exploit  the  public.  There  is  no  magic  about  government  insurance. 
If  the  state  is  to  administer  successfully  a  bank-deposit  insurance 
company,  it  must  be  willing  to  pay  the  same  price  that  is  now  being 
paid  by  the  best  private  insurance  companies.  This  is  the  great  con- 
sideration and  before  it  all  other  things  must  bow"  (p.  203). 

A  defect  in  the  author's  summary  and  conclusion  is  his  failure  to 
consider,  or  even  to  imply  that  there  are,  other  and  possibly  better 
means  of  protection  of  depositors  than  the  mutual  guaranty  of  de- 
posits. He  entirely  overlooks  the  recent  developments  in  banking 
practice  and  legislation  in  the  direction  of  distinguishing  more  care- 
fully than  formerly  between  commercial  and  investment  paper  as  invest- 
ments for  commercial  banks,  and  in  the  better  organization  and  super- 
vision of  our  independent  banks  under  the  federal  reserve  system. 

There  are  a  number  of  careless  and  some  incorrect  statements  scat- 
tered throughout  the  book.  The  following  are  examples:  "It  (the 
Bank  of  England)  is  permitted  to  issue  up  to  about  $90,000,000  in 
notes  which  must  be  secured  by  government  bonds"  (p-  T).  In  the 
case  of  national  banks  "a  gold  deposit  equal  to  five  per  cent  of  the 
note  issue  must  be  made  with  the  Treasury"  (p.  8).  "In  the  strong- 
holds of  Popiilism  the  days  of  the  protracted  depression  of  1893  were 
especially  trying  times"  (p.  32).  "Banking  institutions  gather  in  the 
funds  that  the  public  is  temporarily  not  using  and  lend  to  private 
parties  the  credit  which  the  bank  erects  on  this  foundation"  (p.  179). 

William  A.  Scott. 

University  of  Wisconsin. 

NEW    BOOKS 

Arnaune,  a.  La  monnaie,  le  credit  et  le  change.  Sixteenth  edition,  re- 
vised. Vol.  I,  La  circulation.— Ses  instruments. — Son  mecanisme.  (Paris: 
Lib.  Felix  Alcan.     1922.) 

Baldy,  E.  Les  hanques  d'affaires  en  France  depuis  1900.  (Paris:  Lib. 
Generale  de  Droit  et  de  Jurisprudence.      1922.      Pp.  391.     25  fr.) 

A  very  complete  history  of  the  rise  and  development  of  commercial 
banking  in  France,  from  its  commencement  with  the  Credit  Mobilier  in 
1852.  One  section  of  the  book  is  given  to  the  time  of  the  Great  War 
and  another  to  the  years  since  the  armistice.  R.  R.  W. 


662  Reviews  and  Nexc  Books  [December 

Dewey,  D.  R.  and  Shugrue,  M.  J.  Banking  and  credit.  A  textbook  for 
colleges  and  schools  of  business  administration.  (New  York:  Ronald 
1922.     Pp.  506.     $3.) 

FiGGE,  J.      Die  Preiskalkulation  in  industriellen  Betrieben  und  ihre  Wertung 
fiir   die    Brandschaden-Regulierung.      (Berlin:    Mittler    &    Sohn.      1922. 

2-i  M.) 

Harding,  W.  P.  G.      Credit,  currency  and  business.      An  address.      (Phila- 
delphia: Federal  Reserve  Bank  of  "Philadelphia.      1922.      Pp.  26.) 

Hirst,  F.  W.      The  paper  moneys  of  Europe.      (Boston:  Houghton  Mifflin. 
1922.      Pp.  47.      75c.) 
A  brief  essay. 

Jefferies,  T.   C.     a   sketch   and  revieto  of  hanking   in   New    York   state. 
(Albany:  Manufacturers  Trust  Co.      1922.) 

Publislied  in  Mamifacturers  Trust  Company  Quarterly  Bulletin,  April, 
1922  (vol.  IV,  no.  2),  pp.  1-34.  The  author  is  assistant  secretary  of  the 
Manufacturers  Trust  Company. 

KuczYNSKi,  R.     Das  Existenz7ninimum  und  verxoandte  Fragen.      (Berlin: 
Engelmann.      1922.      30  M.) 

Melrose,    C.    J.     Money    and    credit.      Introduction    by    Irving    Fisher. 
(London:  King.      1922.      5s.) 

Merrick,  R.  G.      The  modern  credit  company.      Its  place  in  business  finan- 
cing.     (Baltimore:  Norman,  Remington  Co.,  Charles  St.      1922.      Pp.  81. 

$1.25.) 

Meyer,  E.,  Jr.      Farm    financijig  and  business  prosperity.      (Washington: 
War  Finance  Corporation.      1922.      Pp.   14.) 

Pailhas,  a.      L'argent-meial,  la  hausse  des  cours  de  1914  «  1930.      (Paris: 
Lib.  Generale  de  Droit  et  de  Jurisprudence.      1922.      Pp.  196.      15  fr.) 

An  elaborate  account  of  the  amount  of  silver  produced;  the  demand 
made  for  it  by  different  countries,  especially  by  India;  the  world's  stock 
of  silver;  the  market  during  the  years  mentioned,  with  an  account  of  the 
Pittman  act.  There  is  a  good  bibliography.  On  page  140  doubt  is  cast 
on  the  accuracy  of  the  United  States  Mint  Report  of  1916. 

R.  R.  W. 

Robertson,  D.  H.     Money.      (New  York:  Harcourt,  Brace  &  Co.      1922. 
Pp.  xii,  182.) 

"A  work  of  exposition,  and  in  no  sense  of  originality  and  research," 
is  the  author's  definition  of  this,  the  second  in  the  series  of  Cambridge 
Economic  Handbooks,  of  which  series  Mr.  J.  M.  Keynes  is  editor. 
The  author's  general  attitude  toward  the  subject  is  indicated  by  his 
statement  that  while  it  is  important  to  seek  a  solution  for  our  monetary 
problems,  we  should  not  expect  too  much  from  such  a  solution.  "The 
real  economic  evils  of  society — inadequate  production  and  inequitable 
distribution — lie  too  deep  for  any  monetary  ointment  to  cure." 

Mr.  Robertson  defines  money  as  "anything  which  is  widely  accepted 
in  payment  of  goods."  This  inclusive  definition  (with  which  the  re- 
viewer concurs)  permits  the  author  to  discuss  topics  not  always  found  in 
treatises  on  money.  Thus  he  discusses  bank  reserves,  interest  on  bank 
loans,  the  relation  between  the  war  debt,  treasury  bills,  ways  and  means 


1922]  Money,  Prices,  Credit,  and  Banking  663 

advances   and  the   price   level,   the   foreign   exchanges,   the   manipulation 
of  the  rate  of  interest,  and  the  rationing  of  bank  loans. 

A  return  to  the  gold  standard  of  before  the  war  is  advocated,  not  be- 
cause it  is  ideal,  but  because  in  the  absence  of  that  we  are  not  likely  to 
have  any  standard  which  would  be  even  measurably  satisfactory. 

The  most  distinctive  feature  of  the  volume  is  its  sprightly  and  humorous 
style.  Like  Hartley  Withers,  Mr.  Robertson  seeks  to  remove  the  diffi- 
culties of  his  subject  by  an  entertaining  presentation.  He  succeeds 
very  well;  sour  indeed  must  be  the  reader  who  fails  to  chuckle  at  various 
places  in  the  book.  The  dialogue  in  chapter  3,  between  "Mr.  Bradbury," 
a  British  Treasury  note,  and  the  seeker  after  knowledge  is  particularly 
recommended.  On  the  subject  of  token  money,  for  example,  the  treasury 
note  says — "You'll  be  saying  next  that  the  cattle  of  the  ancient  Greeks 
and  the  tobacco  of  the  Red  Indians  and  the  knives  of  the  Chinese  were 
better  money  than  I  am,  because  you  could  use  them  to  eat  or  to  smoke 
or  to  kill  people  with.  You  might  as  well  say  that  Harry  Lauder  would 
make  a  better  Prime  Minister  than  Lloyd  George,  because  he  could  make 
a  living  by  singing  comic  songs  if  he  got  turned  out  of  office."  The 
quotation  from  Alice  in  Wonderland,  which  introduces  the  chapter  on 
the  foreign  exchanges  is  also  very  appropriate. 

The  book  is  well  worth  reading  and  might  very  profitably  be  put  in 
the  hands  of  beginning  students  in  the  subject,  but  the  treatment  is  too 
summary  to  make  the  volume  fully  satisfactory  as  a  text. 

N.  R.  Whitney. 

Sandheim,  J.  H.  Law  of  building  and  loan  associations.  Second  edition. 
(Philadelphia:   Smith-Edwards   Co.      1922.      Pp.   376.) 

Welton,  a.  D.  and  Crennan,  C.  H.,  editors.  The  federal  reserve  system; 
its  purpose  and  work.  The  Annals,  Jan.,  1922.  (Philadelphia:  Am. 
Academy  of  Pol.  and  Soc.  Science.      1922.) 

Wright,  I.  Bank  credit  and  agriculture.  (New  York:  McGraw-Hill. 
1922.     Pp.  viii,  340.     $3.) 

Business  revival  and  banking  after  depressions.  (St.  Louis,  Mo. :  First  Na- 
tional Bank.      1922.      Pp.  11.) 

The  effects  of  the  war  on  credit,  currency,  finance,  and  foreign  exchanges. 
(London:  British  Assoc,  for  the  Advancement  of  Science.  1922.  Pp. 
23.) 

Finance  and  banking  in  Finland.  U.  S.  Department  of  Commerce,  Trade 
information  bull.  43.      (Washington:  Supt.  Docs.      1922.) 

Prepared  in  the  Eastern  European  Division  from  reports  by  Leslie  A. 
Davis,  American  consul  at  Helsingfors,  and  documents  transmitted  by 
him. 

Proceedings  of  the  Arizona  Bankers'  Association,  eighteenth  annual  session. 
(Phoenix,  Ariz. :  Ariz.  Bankers'  Assoc.      1921.      Pp.  172.) 

Pronouncements  of  the  court  re  cost  of  living  and  general  order  amending 
awards.  May,  1922.  (Wellington,  N.  Z. :  Dept.  of  Labor.  1922.  Pp. 
28.     6d.) 

Purchasing  power  of  the  farmer,  reported  by  325  country  banks  of  the 
Middle  West.      (Des  Moines,  la.:  Successful  Farming.      1922.      Pp.  51.) 


C6tt  Reviews  and  New  Books  [December 

Recent  developments  in  commercial  hanking  policy.  (St.  Louis,  Mo.:  First 
National  Bank.      1922.      Pp.  8.) 

The  statist.  Annual  British  hanhing  section.  (London:  "The  Statist," 
51   Cannon  St.,  E.  C.  4.      1922.      Is.) 

Thirti/-iifth  anmial  convention  of  the  Michigan  Bankers'  Association,  1921. 
(Detroit:  Mich.  Bankers'  Assoc.      1922.      Pp.  139.) 

Public  Finance,  Taxation,  and  Tariff 

NEW    BOOKS 

Bernhardt,  J.  The  Tariff  Commission.  Institute  for  Government  Re- 
search, monograph  no.  5.      (New  York:  Appleton.      1922.      Pp.  71.) 

Contains  chapters  on  the  history,  activities  and  organization  of  the 
Commission.  In  the  appendix  are  a  list  of  publications  and  a  biblio- 
graphy. 

Bocquet,  L.  L'impot  sur  le  revenu,  cedulaire  et  general.  Second  edi- 
tion.     (Paris:  L.  Tenin.      1921.      Pp.  viii,  748.) 

BoDiN,  P.  Les  nouveaiuv  impots  ont-ils  fait  faillite?  (Paris:  Plon-Nourrit 
et  Cie.      1922.      Pp.  127.      4.50  fr.) 

Buck,  A.  E.  Budget  making:  a  handbook  on  the  forms  and  procedure  of 
budget  making  ivith  special  reference  to  states.  (New  York:  Appleton. 
1921.      Pp.   234.      $3.) 

The  titles  of  the  twelve  chapters  are  as  follows:  The  budget  and  its 
relation  to  government  work;  Budget-making  authorities  and  their  staff 
agencies;  Character  of  the  information  required  in  budget  making; 
Classification  of  the  budget  information;  The  estimate  forms;  Preparing 
tlie  estimates  and  gathering  other  budget  information;  Reviewing  and 
revising  the  estimates;  The  form  and  contents  of  the  budget;  Appropria- 
tion, revenue,  and  borrowing  measures;  Legislative  consideration  and 
action  on  the  budget;  Business  standards  and  methods  needed  in  carrying 
out  the  budget;  Administrative  organization  and  the  budget. 

Cassin,  R.  Le  regime  fiscal  et  piridique  des  titres  nominatifs  d'apres  les 
lois  des  25  et  SI  juillet  1920.      (Paris:  Rousseau.      1922.      Pp.  40.) 

Deavey,  D.  R.  Financial  history  of  the  United  States.  Eighth  edition. 
(New  York:  Longmans.      1922.      Pp.  567.      $2.50.) 

This  new  edition  contains  an  additional  chapter  relating  to  the  finan- 
ciering of  the  United  States  during  the  Great  War.  It  brhigs  the  narra- 
tive through  1921. 

Eastman,   F.    M.     A    cumulative   supplement    to   Eastman    on    taxation   in 

Pennsylvania,  containing  all  lares  enacted from  the  publication  of 

said  work  to  the  first  day  of  July,  1921.      (Newark,  N.  J.:  Soney  &  Sage 
Co.      1922.      Pp.  XXX,  1101-1643.) 

FisK,  H.  E.  French  public  finance  in  the  Great  War  and  today.  (New 
York:  Bankers  Trust  Co.      1922.      Pp.  363.) 

A  careful  and  intensive  study  covering  the  period  1873-1922.  Con- 
tains chapters  on  The  cost  of  the  Great  War,  How  France  financed  the 
war.  Post-war  finance.  The  credit  structure.  The  indemnity  or  war-fine 
of  1871,  The  budget.  National  expenditures  and  revenues.  The  national 


1922]  Public  Finance,  Taxation,  and  Tariff  665 

debt,  History  of  the  Bank  of  France,  Credit  Foncier  de  France,  Agricul- 
tural and  popular  banks,  and  Savings  banks.  There  is  a  bibliographical 
list  of  eight  pages  in  the  appendix. 

Fliniaux,  a.  Quelques  precisions  sur  les  dettes  des  Etats-Unis  envers  la 
France  ou  des  Frangais  pendant  la  guerre  de  I'Independance  et  sur  leur 
remhoursement.      (Toulouse:  Author.      1922.      Pp.   16.) 

Fowler,  C.  N.  The  fundamental  defects  of  the  federal  reserve  system 
and  the  necessary  remedy.  (Washington:  Hamilton  Book  Co.  1922. 
Pp.  88.     $2.) 

Frasier,  G.  W.  Control  of  city  school  finances.  (Milwaukee,  Wis.:  Bruce 
Pub.  Co.      1922.      Pp.  132.      $1.25.) 

Jeze,  G.  Cours  de  science  des  finances  et  de  legislation  financiere.  Sixth 
edition.      (Paris:  Giard.      1922,      20  fr.) 

KoBAYASHi,  U.  War  and  armament  loans  of  Japan.  Publications  of  the 
Carnegie  Endowment  for  International  Peace.  (New  York:  Oxford 
Univ.  Press.      1922.      Pp.  xv,  221.     $2.25.) 

Labadie,  J.  Si  j'etais  ministre  des  finances  {La  politique  de  nouvel 
argent).      (Paris:  Bernard  Grasset.      1922.      Pp.  274.     6.75  fr.) 

Landry,  A.  La  politique  frangaise  des  reparations  devant  I'opinion  mon- 
diale.      (Paris:  Revue  de  France.      1922.      Pp.  24.) 

Li,  C.  S.  Central  and  local  finance  in  China.  Columbia  University  studies 
in  history,  economics  and  public  law,  vol.  XCIX,  no.  2.  (New  York: 
Longmans,  Green.      1922.      Pp.  187.) 

Mountsier,  R.  Our  eleven  billion  dollars — Europe's  debt  to  the  United 
States.      (New  York:  Thomas  Seltzer.      1922.) 

Nichols,  P.  Taxation  in  Massachusetts:  a  treatise  on  the  assessment  and 
collection  of  taxes,  excises  and  special  assessments  under  the  laws  of 
the  Commonwealth  of  Massachusetts.  Second  edition.  (Boston:  Finan- 
cial Pub.  Co.      1922.      Pp.  liv,  821.) 

Porter,  K.  H,  County  and  township  government  in  the  United  States. 
(New  York:  Macmillan.      1922.      Pp.  xiii,  362.) 

Chapter    11    is    entitled    "The    finance    officers";    chapter    12,    "Local 
charities  and  public  health";  and  chapter  14,  "Roads  and  highways." 

Reed,  H.  L.  Development  of  the  federal  reserve  policy.  (Boston:  Hough- 
ton Mifflin.      1922.      Pp.  vi,  352.     $3.50.) 

Roger,  F.  La  reforme  du  regime  foncier  en  France.  (Paris:  Godde.  1922. 
Pp.  256.      10  fr.) 

Thery,  E.  Consequences  economiques  de  la  guerre  pour  la  France.  (Paris: 
Belin.      1922.      Pp.  350.      7  fr.) 

America's  synthetic  chemical  and  medicinal  industry — "The  way  of  pro- 
gress." The  debate  in  the  United  States  Senate  on  the  Bursum  amend- 
ment to  the  Tariff  bill  H.R.  7456.  (New  York:  Synthetic  Organic 
Chemical  Manufacturers  Assoc,  1  Madison  Sq.      1922.      Pp.  32.) 

La  dette  publique  de  la  Russie.      (Paris:  Lib.  Payot.      1922.      12  fr.) 

Contains  essays  by   Raffalovich,  Apostol,   Micheslon,   Bernatzky,   and 
Novitsky. 


666  Reviews  and  New  Books  [December 

Estate  tax.  Regulations  63  {1922  edition)  under  the  Revenue  act  of  1921. 
(Washington:  Supt.  Docs.      1922.      10c.) 

Experiences  of  cities  rcith  exemption  of  nexo  construction  from  taxation. 
(New  York:  State  Bureau  of  Municipal  Information  of  the  N.  Y.  State 
Conference  of  Mayors.      1922.      Pp.  4.) 

Regidations  55  (1923  edition)  relating  to  stamp  taxes  on  documents.  (Wash- 
ington: Internal  Revenue,  Treasury  Dept.      1922.      oc.) 

Tax  exemptions  on  real  estate,  an  increasing  menace.  (White  Plains,  N.  Y. : 
Westchester  County  Chamber  of  Commerce.      1922.      Pp.  vi,  99.) 

Population  and  Migration 

NEW    BOOKS 

Carr-Saunders,  a.  M.  The  popidation  problem;  a  study  in  human  evolu- 
tion.     (New  York:  Oxford  Univ.  Press.      1922.      Pp.  516.     $7.) 

Dixon,  R.  B.      The  racial  history  of  man.      (New  York:  Scribner's.     1922.) 

Orth,  S.  p.  Our  foreigners:  a  chronicle  of  Americans  in  the  making. 
(New  Haven:  Yale  Univ.  Press.      1921.      Pp.  ix,  255.) 

Fourteenth  census  of  the  United  States,  1920.  Vol.  Ill,  Composition  and 
characteristics  of  the  population  bi/  states.  (Washington:  Supt.  Does. 
1922.     $2.50.) 

Social  Problems  and  Reforms 

NEW    BOOKS 

Abel,  M.  H.  Successful  family  life  on  the  moderate  income:  its  foundation 
in  a  fair  start;  the  man's  earnings;  the  xcoman's  contribution ;  the  coop- 
eration of  the  community.  (Philadelphia:  Lippincott.  1921.  Pp.  xii, 
247.      $2.) 

In  twenty  short  chapters  Mrs.  Abel  has  presented  her  views  on  suc- 
cessful family  life.  A  large  share  of  attention  is  devoted  to  financial 
problems,  but  brief  consideration  is  given  to  such  topics  as  efficiency 
in  housework,  child  training,  family  advancement,  and  "the  satisfactions 
of  life."  One  of  the  most  interesting  chapters  is  entitled  "The  house- 
wife's contribution  tlirougli  housework."  This  is  a  clever  defense  of  the 
home  as  an  economical  producing  unit.  Since  Mrs.  Abel  sees  in  the 
housewife  an  efficient  combination  of  comptroller,  purchasing  agent,  super- 
intendent, laborer,  teacher,  and  entertainer,  quite  naturally  she  insists 
that  sucli  a  position  demands  thorough  training. 

It  is  probably  not  unjust  to  say  that  few,  if  any,  new  facts  are  present- 
ed in  tliis  book,  and  tliat  few  new  views  are  advanced.  The  tone  of  the 
work  is  homiletic  rather  than  scientific.  But  right  here  lies  the  value 
of  the  essay:  it  is  sincere,  persuasive,  and  sane.  In  diction  and  in  point 
of  view  it  is  adapted  to  the  man  or  woman  in  the  moderate  income  class. 
It  is  full  of  practical  ideas  on  family  finance.  Perhaps  the  highest  com- 
pliment the  reviewer  can  pay  Mrs.  Abel  is  to  confess  his  intention  of 
trying  out  two  of  her  specific  suggestions. 

Yet  the  reader  of  this  book  can  hardly  fail  to  discover  that  many  vital 
points  in  successful  family  life  have  been  ignored.     One  looks  in  vain 


1922]  Social  Problems  and  Reforms  667 

for  a  discussion  of  the  things  that  should  be  considered  before  marriage. 
Certain  prenuptial  precautions  have,  probably,  a  large  or  even  controlling 
influence  on  successful  family  life  on  the  moderate  income.  That  children 
are  a  necessary  part  of  a  family  is  taken  for  granted;  yet  not  a  word  is 
said  about  the  possibility  of  an  excessive  flock  of  children  breaking  the 
health  of  the  mother  and  reducing  the  family  to  poverty.  It  would  have 
been  well  worth  Mrs.  Abel's  while  to  pause  for  a  formal  consideration 
of  some  of  the  most  freqent  causes  of  family  failure,  and  of  the  means  of 
combating  these  causes. 

In  short,  Successful  Family  Life  on  the  Moderate  Income  offers  small 
contribution  to  the  science  of  economics  and  fails  adequately  to  cover  the 
subject  announced  on  the  title  page;  but,  as  far  as  it  goes,  the  book  is 
sound  and  may  well  prove  helpful  to  husbands  and  wives  who  have  given 
little  thought  to  family  management. 

Fraxk  H,  Streightoff. 

Babson,  R.  W.  New  tasks  for  old  churches:  studies  of  the  industrial  com- 
munity as  the  new  frontier  of  the  church.  (New  York:  Revell.  1922. 
Pp.  190.     $1.) 

Barnes,  L.  C.  Intensive  powers  on  the  western  slopes.  (Philadelphia: 
Judson  Press.      1922.      Pp.  53.     $1.) 

BiERSTADT,  E.  H.  Aspects  of  Americanization.  (Cincinnati,  O. :  Stewart 
Kidd  Co.      1922.      Pp.  260.) 

Bloodgood,  R.  The  federal  courts  and  the  deliiiquent  child:  a  study  of  the 
methods  of  dealing  -with  children  who  have  violated  federal  lazes.  Chil- 
dren's Bureau  pub.  no.  103.  (Washington:  Supt.  Docs.  1922.  Pp.  71. 
lOe.) 

BossARD,  J.  H.  S.,  editor.  Child  welfare;  with  a  supplement  on  present- 
day  social  and  industrial  conditions  in  Austria.  The  Annals,  Nov.,  1921. 
(Philadelphia:  Am.  Academy  of  Pol.  and  Soc.  Science.      1922.     $1.) 

Brogden,  M.  S.  Handbook  of  organization  and  method  in  hospital  social 
service:  an  outline  of  policies  as  practiced  at  the  Johns  Hopkins  Hospital. 
(Baltimore,  Md.:  Norman,  Remington  Co.      1922.      Pp.77.     $2.50.) 

Bruere,  R.  W.  The  coming  of  coal.  Prepared  for  the  educational  com- 
mittee of  the  commission  on  the  church  and  social  service  of  the  Federal 
Council  of  the  Churches  of  Christ  in  America.  (New  York:  Y.  M.  C.  A. 
Press.      1922.      Pp.  123.      $1.) 

Chesterton,  G.  K.  Eugenics  and  other  evils.  (New  York:  Dodd,  Mead 
&  Co.      1922.      Pp.  188.) 

Clark,  W.  I.  Health  service  in  industry.  (New  York:  Macmillan.  1922. 
Pp.  ix,  168.) 

In  a  compact,  readable  and  practical  volume  Dr.  Clark  explains  the 
organization  and  function  of  the  factory  dispensary,  the  function  and 
problems  of  the  industrial  physician  and  the  industrial  nurse.  Although 
based  on  a  course  given  by  the  author  at  Harvard  Medical  School,  the 
book  is  unencumbered  with  professional  or  technical  terms ;  rather,  its 
simplicity  and  concreteness  commend  the  book  to  the  industrial  executive. 

C.  L.  S. 

CoRBiN,  J.  The  middle  class  and  the  future.  (New  York:  Scribner's. 
1922.      $3.) 


668  Reviews  and  New  Books  [December 

Cox,  G.  C.  The  public  cojiscience ;  social  judgments  in  statute  and  common 
law.      (New  York:  Holt.     1922.     Pp.  xix,  477.     $3.) 

Darrow,  C.  Criine:  its  causes  and  treatment.  (New  York:  Crowell.  1922. 
Pp.  292.      $2.50.) 

Contains  a  chapter  on  Industrialism  and  Crime  (pp.  203-213). 

Darlington,  T.  Health  and  efficiency.  (New  York:  Wynkoop,  Hallen- 
beck,  Crawford  Co.      1922.      Pp.  262.) 

Ellwood,  C.  a.  The  reconstruction  of  religion:  a  sociological  view.  (New 
York:  Macmillan.      1922.      Pp.  xv,  323.      $2.25.) 

"A  religion  adapted  to  the  requirements  of  continuous  progress  toward 
an  ideal  society,  consisting  of  all  humanity"  (p.  64),  in  harmony  with 
science,  with  sociology,  and  with  reason  is  outlined  here.  The  author 
examines  the  requirements  of  a  social  religion  in  each  department  of  life 
— the  family,  economics,  politics,  social  pleasure — and  finds  them  to  be  in 
every  case  identical  with  the  ethical  principles  taught  by  Jesus.  The 
"positive  Christianity"  which  he  describes  would  completely  transform 
our  present  "semi-pagan  civilization."  In  the  chapter  entitled  "Religion 
and  the  economic  life,"  he  concludes  that  the  aim  of  economic  life  should 
be  the  service  of  humanity,  with  service  rendered  to  society  as  a  whole 
as  the  basis  for  remuneration.  Definite  measures  tending  in  this  direction 
are  private  cooperative  enterprises,  public  ownership  of  suitable  in- 
dustries, democracy  in  industry,  equalization  of  opportunity,  and  mini- 
mum standards  of  welfare  to  be  guaranteed  by  the  community. 

Edgerton,  a.  H.  Industrial  arts  and  pre-vocational  education  in  junior 
high  schools.      (Milwaukee,  Wis. :  Bruce  Pub.  Co.      1922.      Pp.  104.  80c.) 

Flexner,  B.  and  Oppenheimer,  R.  The  legal  aspect  of  the  juvenile  court. 
Children's  Bureau  pub.  no.  99.      (Washington:  Supt.  Docs.     1922.      Pp. 

42.      5c.) 

FosDiCK,  R.  B.  Our  machine  civilization.  An  address  delivered  at  the 
commencement  exercises  of  Wellesley  College,  1922.  (Wellesley,  Mass.: 
Wellesley  College.      1922.      Pp.   19.) 

Holt,  A.  E.  Social  xvork  in  the  churches:  a  study  in  the  practice  of  fellow- 
ship. Prepared  for  the  educational  committee  of  the  commission  on  the 
church  and  social  service  of  the  Federal  Council  of  the  Churches  of  Christ 
in  America.      (Boston:  Pilgrim  Press.      1922.     Pp.   131.      60c.) 

Holt,  W.  S.  The  Federal  Board  for  J'ocational  Education:  its  history, 
activities  and  organization.  Institute  for  Government  Research,  mono- 
graph no.  6.      (New  York:  Appleton.      1922.      Pp.  xi,  74.) 

Hopwood,  J.  O.  Analysis  and  classification  of  performance  in  vocational 
relations.      (Boston:  R.  G.   Badger.      1922.      Pp.   128.) 

Horn,  D.  How  it  could  he  done.  (Indianapolis,  Ind. :  Author,  Box  933. 
1922.      Pp.  450.) 

Labor  and  social  questions  in  general. 

Hunter,  E.  B.  Office  administration  for  organizations  supervising  the 
health  of  mothers,  infants,  and  children  of  preschool  age.  Children's 
Bureau  pub.  no.  101.      (Washington:  Supt.  Docs.  1922.      Pp.  216.      20c.) 

Johnson,  F.  E.  The  social  gospel  and  personal  religion:  are  they  in  con- 
flict?    (New  York:  Y.  M.  C.  A.  Press.     1922.     Pp.  49.     25c.) 


1922]  Social  Problems  and  Reforms  669 

Knowles,  M.  Industrial  housing.  (New  York:  McGraw-Hill.  1920. 
Pp.  XXV,  408.      $5.) 

Housing  for  factory  workers  is  the  primary  subject  of  this  book.  It 
begins  with  an  historical  survey  and  then  deals  with  the  advantages  of 
modern  industrial  housing,  the  selection  of  site,  the  development  of 
town  plan,  streets  and  pavements,  sewerage  and  drainage,  the  collection 
and  disposal  of  town  wastes,  accessory  buildings,  the  administration  and 
supervision  of  construction,  and  the  management  of  industrial  towns. 
The  author  was  chief  engineer  in  the  Division  of  Passenger  Transporta- 
tion and  Housing  of  the  Emergency  F'leet  Corporation  of  the  United 
States  Shipping  Board,  and  draws  largely  from  the  experience  of  that 
organization  during  the  war.  It  is  essentially  the  book  of  an  engineer, 
four  of  the  thirteen  chapters  dealing  exclusively  with  questions  ordinarily 
handled  only  in  engineering  textbooks,  which  gives  this  work  a  dis- 
tinctive value  as  an  accession  to  housing  literature.  The  title  however 
is  misleading,  because  the  author  gives  practically  no  attention  to  exist- 
ing housing  conditions  of  industrial  workers  or  to  improvement  of  in- 
dustrial housing  through  legislation  or  by  philanthropic  or  cooperative 
agencies. 

James  Ford. 

LoRiA,  A.  /  fondamenti  scientifici  della  riforma  economica.  Studio  sidle 
leggi  della  produzione.  (Torino:  Fratelli  Bocca  Editor!.  1922.  Pp. 
572.      60  1.) 

McClenahan,  B.  a.  Organizing  the  community:  a  review  of  practical 
principles.      (New  York:  Century.      1922.      Pp.  xviii,  260.      $1.75.) 

Mangold,  G.  B.  Children  horn  out  of  wedloch:  a  social  study  of  illegiti- 
macy, with  particular  reference  to  the  United  States.  University  of 
Missouri  studies,  vol.  Ill,  no.  3.  (Columbia,  Mo.:  Univ.  of  Missouri. 
1921.      Pp.  X,  209.) 

This  is  an  important  monograph  which  will  undoubtedly  prove  of  great 
value  to  the  social  worker,  and  parts  of  which  should  interest  the  general 
student  of  population  problems  or  of  the  evolution  of  the  position  of 
woman  in  our  social  and  legal  systems.  Especially  is  this  true  of  chapters 
1  and  2. 

Chapter  1,  after  presenting  the  importance  of  birth  registration,  gives 
an  historical  review  of  such  statistics  (extremely  meagre  and  in  good  part 
conjectural)  of  illegitimacy  as  are  available  for  this  country.  So  far 
as  registration  figures  or  census  estimates  indicate,  the  illegitimacy  rate 
(1918)  varies  from  .72  per  cent  of  the  total  births  in  Massachusetts  to 
5.07  per  cent  in  Virginia;  and  from  .15  per  cent  "white,  mother  Italian"  to 
1.40  per  cent  "white,  of  native  parents,"  and  11.10  per  cent  for  the 
negroes.  Children's  Bureau  estimates  differ  somewhat  from  those  of 
the  census ;  for  instance,  the  Children's  Bureau  figure  for  Massachusetts 
is  2.3  per  cent  instead  of  .72  per  cent.  For  various  cities,  estimates  run 
from  1.0  per  cent  for  New  York  to  8.2  per  cent  for  Kansas  City,  and  16.9 
per  cent  and  18.8  per  cent  respectively  for  the  negroes  in  St.  Louis  and 
Washington.  The  chapter  ends  with  some  consideration  of  common  law 
marriage,  previous  sex  irregularity,  and  migration  of  mothers. 

The  discussion,  in  chapter  2,  of  the  causes  and  conditions  underlying 
illegitimacy  is  excellent.  It  is  well  documented  and  gives  consideration 
to    European   as    well   as    American    conditions.     Among    these    are    low 


670  Reviews  and  New  Books  [December 

mentality,  lack  of  home  training,  overcrowding,  unwholesome  recreation, 
drunkenness,  sexual  suggestibility,  lack  of  religious  training,  war,  age, 
country  and  city  life,  and  proportion  of  unmarried  men  and  women. 
Chapter  5,  on  the  outcome  for  the  child,  is  also  of  general  interest.  Here 
there  is  significant  matter  on  the  relation  of  illegitimacy  to  the  number 
of  still  births  and  to  infant  mortality. 

The  other  chapters,  on  commercial  agencies  for  the  care  of  mothers, 
philanthropic  and  public  agencies,  the  age  of  consent,  legislative  reform, 
and  prevention  are  of  more  direct  interest  to  the  specialist  social  worker. 

The  introduction  is  excellent  in  attitude  and  insight,  though  the  author 
is  perhaps  a  bit  too  optimistic  with  regard  to  the  rapidity  with  which 
change  of  sentiment  about  the  double  standard  of  morality  is  going  on. 

Aside  from  the  Children's  Bureau's  Report  of  Illegitimacy  as  a  Child 
Welfare  Problem,  the  only  other  outstanding  books  in  English  are  those 
of  Leffingwell,  now  somewhat  out  of  date,  and  Kammerer.  This  study 
will  take  rank  as  one  of  the  serious  studies  of  the  problem  in  this  country. 
The  University  of  Missouri  is  to  be  congratulated  upon  the  mechanical 
make-up  of  the  book. 

A.  B.  Wolfe. 

MuNRO,  W.  B.  and  Ozanne,  C.  E.     Social  civics.      (New  York:  Macmillan. 
1922.      Pp.  xiii,  697.     $1.72.) 

Murphy,  J.  J.,  Wood,  E.  E.  and  Ackerman,  F.  L.      The  housing  famine. 
A  triangular  debate.      (New  York:  Button.      1920.      Pp.  xvi,  246.) 

This  is  a  triangular  debate  between  Mr.  Murphy,  former  tenement 
house  commissioner,  Mrs.  Wood,  who  studied  housing  intensively  at 
Columbia,  and  Mr.  Ackerman,  an  architect.  The  problem  thus  debated 
was :  What  are  we  going  to  do  about  the  housing  famine  ?  Topic  I : 
Conditions — causes — remedies.  Topic  II:  Shall  public  credit  be  em- 
ployed? Topic  III:  Shall  we  have  municipal  housing.''  Topic  IV: 
Shall  we  exempt  mortgages  and  improvements  from  taxation?  Topic  V: 
How  shall  we  deal  with  congestion?  Topic  VI:  How  can  land,  labor 
and  materials  be  made  available?  Topic  VII:  What  are  the  first  steps? 
Topic  VIII:  Summary  and  conclusion. 

The  positions  taken  were  widely  dissimilar  and  would  ordinarily  be 
classified  as  conservative,  liberal,  and  radical,  respectively.  The  speakers 
are  alert,  but  have  supplied  very  little  material  with  which  to  substantiate 
their  positions  and  the  problem  which  they  faced  is  not  effectively  solved 
by  any  of  them.  The  volume  has  utility  for  classroom  discussions  and 
wouUl  probably  be  useful  to  many  members  of  the  general  public  who 
have  not  hitherto  adequately  appreciated  the  complexity  of  the  housing 
problem. 

James  Ford. 
Pentv,  a.  J.     Post-industrialism.      (New  York:   Macmillan.      1922.      Pp. 
157.      $2.) 

Phillips,  M.  The  young  industrial  worker:  a  study  of  his  educational 
needs.      (New  York:  Oxford  Univ.  Press.      1922.      Pp.  142.     $1.50.) 

Reisner,  E.  H.  Natio?iaIism  and  education  since  1789.  A  social  and 
political  history  of  modern  education.  (New  York:  Macmillan.  1922. 
Pp.  xiii,  575.      $2.60.) 

Rich,  Mrs.  K.  F.  A  community  trust  survey  of  prenatal  care  in  Chicago. 
(Chicago:  Chicago  Community  Trust.      1922.      Pp.   102.) 


1922]  Social  Problems  and  Reforms  671 

Rivet,  H.  Etude  de  la  loi  portant  fixation  definitive  de  la  legislation  sur 
les  layers.      (Paris:  Giard.      1922.      Pp.   192.) 

Since  the  armistice  Paris  has  suffered  even  more  than  New  York  from 
a  scarcity  of  houses.  Attempts  of  tlie  government  to  ameliorate  this 
condition  culminated  in  the  law  of  March  31,  1922.  M.  Rivet's  book 
gives  the  text  of  this  law,  with  a  commentary  and  criticism  from  the  point 
of  view  of  a  trained  jurist.  There  is  an  introductory  chapter  setting 
forth  the  causes  of  the  scarcity  of  houses  and  criticizing  the  infraction  of 
civil  rights  by  the  present  legislation  in  favor  of  the  tenants,  the  excuse 
for  such  infraction  being  the  extraordinary  conditions  resulting  from  the 
war.  "  R.  R.  W. 

Sellier,  H.  La  crise  du  logement.  (Paris:  Office  Public  d'Habitations 
a  Bon  Marche  de  la  Seine.      1922.) 

Snedden,  D.  S.  Educational  sociology.  (New  York:  Century.  1922. 
Pp.  xii,  689.     $4.) 

Southard,  E.  E.  and  Jarrett,  M.  C.  The  kingdom  of  evils:  psychiatric 
social  rvork  present  in  100  case  histories  together  zcith  a  classification  of 
social  divisions  of  evil.      (New  York:  Macmillan.      1922.     $5.) 

Ryan,  J.  A.  and  Millar,  M.  F.  X.  The  state  and  the  Church.  (New 
York:  Macmillan.      1922.      Pp.  vi,  331.) 

A  collection  of  papers  setting  forth  the  teaching  of  the  Catholic  Church 
concerning  the  state.  The  student  of  economics  will  be  more  particularly 
interested  in  chapter  9  (pp. 208-220)  on  "Erroneous  theories  concerning 
the  functions  of  the  state,"  by  Dr.  Ryan. 

Veiller,  L.  a  model  housing  lam'.  (New  York:  Russell  Sage  Founda- 
tion.     1920.      Pp.  xiv,  430.) 

The  author  states  that  "this  new  edition  represents  not  only  the  ex- 
perience of  all  the  states  and  cities  in  the  country  which  have  enacted 
housing  laws  since  1914,  but  also  the  experience  as  well  of  the  author 
in  his  capacity  as  secretary  of  the  National  Housing  Association  in  aiding 
in  the  drafting  of  such  laws,  in  adapting  them  to  local  conditions  and  in 
meeting  the  difficulties  which  have  arisen."  The  list  of  state  housing 
laws  of  the  country  which  have  been  based  upon  his  model  housing  law 
includes  those  of  Michigan,  Minnesota,  and  Iowa.  The  book  was  first 
published  in  1914  and  was  reviewed  in  the  American  Economic  Review 
for  December,  1915  (p.  896).  Its  predecessor  was  Model  Tenement 
House  Laze,  issued  by  Veiller  in  1910. 

Pages  vii  to  x  indicate  by  section  number  and  page  number  the  para- 
graphs in  which  changes  have  been  made  in  this  edition.  All  modifica- 
tions have  been  carefully  made.  Unquestionably,  Veiller's  Model  Hous- 
ing Law  should  be  used  by  all  American  cities  contemplating  improvement 
of  their  building  or  housing  laws.  Though  the  book  is  unpleasantly 
didactic  in  tone,  it  is  by  all  odds  the  most  useful  guide  in  its  field. 

James  Ford. 

Behind  the  scenes  in  a  hotel.  (New  York:  Consumer's  League  of  N.  Y. 
1922.      Pp.  47.) 

The  Consumers'  League  of  Cincinnati:  a  year's  record.  (Cincinnati,  O.: 
Consumers'  League,  25  East  Ninth  St.      1922.      Pp.  8.) 

The  physician  in  industry:  a  symposium.  Special  report  no.  22.  (New 
York:  National  Industrial  Conference  Board.      1922.      Pp.  98.     $1.) 


672  Reviews  and  New  Books  [December 

Sedgwick  County,  Kansas:  a  church  and  community  survey.      (New  York: 

Doran.      1922.      Pp.  x,  70.) 
Social  hygiene  legislation  manual  1921.      (New  York:  Am.  Social  Hygiene 

Assoc.     1921.     Pp.  80.     25c.) 

Insurance  and  Pensions 

Versicherungswesen.     Vol.  I — Allgemeine  Versicherungslehre.  Vol.  II — 
Besondere  Versicherungslehre.     By  Alfred  Manes.     Third  edi- 
tion.     (Leipzig:  B.  G.  Teubner.     1922.     Pp.  xiv,  231 ;  xiv,  357. 
$3.70.) 
This  treatise  on  the  business  of  insurance  was  originally  published 
as  a  volume  of  a  series  of  handbooks  on  commerce  and  industry,  in 
1905.      Its  purpose  as  stated  in  the  introduction  to  the  first  edition 
was  to  provide  a  textbook  explaining  the  business  from  a  scientific  and 
matter-of-fact  point  of  view.     Purely  theoretical  controversies  were 
eliminated.     Workmen's  insurance  was  not  included,  as  belonging  more 
to  the  field  of  political  science.     For  similar  reasons,  no  extended  atten- 
tion was  given  to  insurance  mathematics  or  insurance  law.     Although 
addressed  particularly  to  those  who  are  unfamiliar  with  the  insurance 
business,  it  was  intended  to  be  useful  to  individuals  who  already  had 
some  knowledge  along  insurance  lines. 

The  purpose  of  the  text  has  been  in  no  wise  altered  in  the  later 
editions.  The  second  edition  was  brought  out  in  1913  in  order  to 
include  new  developments  in  insurance  regulation,  contracts,  and  gen- 
eral practice.  The  third  results  in  large  measure  from  the  changes 
which  have  come  with  the  W^orld  War  and  its  attendant  complications. 
The  autlior  also  has  been  able  to  take  advantage  of  the  large  increase 
in  literature  on  the  subject  which  has  appeared  during  the  last  decade. 
Volume  I  is  devoted  to  the  treatment  of  insurance  in  general,  its 
history,  significance,  organization  and  technique.  Considerable  space 
is  devoted  to  governmental  policy  with  regard  to  insurance,  especially 
to  state  supervision  of  finances  and  the  contract.  Of  particular 
interest  to  economists  is  the  section  on  the  economic  significance  of 
insurance,  and  tliat  dealing  with  the  advancement  of  insurance  as  a 
science  and  as  a  subject  of  education.  Volume  II  has  to  do  with  indi- 
vidual branches  of  tlic  insurance  business,  sections  being  devoted  to  the 
following  types  of  insurance:  sickness  and  invalidity,  accident,  liability, 
transportation  (including  both  marine  and  inland),  hail,  and  live  stock. 
The  more  important  of  the  miscellaneous  but  relatively  undeveloped 
lines  are  treated  in  another  section,  these  corresponding  roughly  to 
the  side  lines  written  by  fire  and  marine  companies  in  the  United 
States  and  to  the  minor  casualty  lines.  As  might  be  expected  in  a 
German  treatise,  considerable  space  is  given  to  the  subject  of  re- 
insurance. 


1922]  Insurance  and  Pensions  673 

Dr.  Manes'  work  differs  from  general  treatises  which  have  been  issued 
in  the  United  States  principally  in  its  emphasis  on  the  general  questions 
which  affect  all  types  of  insurance.  Textbook  writers  as  well  as 
teachers  in  this  country  have  tended  to  emphasize  individual  lines  of 
insurance,  probably  because  of  a  tendency  to  interest  themselves  in  a 
particular  branch  of  insurance,  gradually  acquiring  knowledge  of  other 
branches  as  that  becomes  possible. 

It  would  be  highly  desirable  if  there  could  be  presented  for  the  use 
of  students  of  insurance  a  text  reflecting  United  States  conditions 
which  would  treat  as  thoroughly  the  general  aspects  of  insurance  as 
does  the  present  publication.  Naturally,  since  this  text  is  intended 
primarily  for  German  students,  it  is  largely  an  exposition  of  German 
methods.  Reference  is  made  in  some  degree  to  other  countries,  par- 
ticularly to  England  and  America ;  the  bibliography  contained  in  the 
first  volume  does  not,  however,  imply  a  very  broad  knowledge  of  the 
literature  in  languages  other  than  German. 

Altogether,  while  there  is  nothing  particularly  new  or  significant  in 
this  publication,  it  is  an  excellent  example  of  the  systematic  treatment 
of  a  business  subject  and  is  well  worth  the  attention  of  economists, 
particularly  those  who  have  not  j'et  discovered  that  insurance  is 
worthy  of  separate  consideration  in  treatises  on  economic  activities. 

Rai.ph  H.   Blaxchaed. 

Columbia  University. 

NEW    BOOKS 

Epstein,  A.  Facing  old  age:  a  study  of  old  age  dependency  in  the  United 
States  and  old  age  pensions.  (New  York:  Knopf.  1922.  Pp.  xvi,  352. 
$3.50.) 

Forbes-Lindsay,  C.  H.  A.  Business  insurance  instructor.  Two  vols.  (San 
Gabriel,  Calif.:  Forbes-Lindsay  Sales  Service.      1922.) 

Greer,  W.  J.  Common  mistakes  and  errors  in  insurance  policies  and  their 
effect  upon  adjustments.  (Syracuse,  N.  Y. :  N.  Y.  State  Assoc,  of  Local 
Insurance  Agents.      1922.      Pp.  7.) 

Hagen,  O.  Das  Versicherungsrecht.  Two  vols.  (Leipzig:  Verlag  von 
O.  R.  Reisland.      1922.      325  M.) 

JoHNSEN,  J.  E.  Selected  articles  on  social  insurance.  (New  York:  Wilson. 
1922.      Pp.  xix,  379.     $2.50.) 

This  supplements  earlier  volumes  in  The  Handbook  Series  on  Compul- 
sory Insurance  and  Mothers'  Pensions.  Arguments  pro  and  con  are 
presented,  followed  by  a  classified  bibliography  of  25  pages,  and  reprints 
of  selected  articles  treating  of  different  phases  of  social  insurance. 

Keller,  M.  Die  Behandlung  des  Kriegsrisikos  in  der  Lehensversicherung 
unter  dem  Einfluss  des  Weltkrieges.  (Berlin:  E.  S.  Mittler  &  Sohn. 
1922.      Pp.  88.     45  M.) 

An  account  of  the  methods  of  life  insurance  adopted  in  various  coun- 
tries during  the  Great  War,  with  suggestions  for  the  future  derived  from 


674  Reviews  and  New  Books  [December 

the  experience  of  those  years;  an  excellent  summary  of  what  was  done, 
and  of  what  might  and  what  might  not  be  done  by  the  insurance  com- 
panies. The  author  does  not  discuss  the  duties  of  the  state  in  regard 
io  the  insurance  of  its  soldiers.  R.  R.  W. 

Mantz^  I.  P.  and  Mantz,  P.  N.  Total  permanent  disability  bene  jits,  net 
rates  and  reserves;  also,  commutation  columns  and  various  derived  tables. 
(Des  Moines,  la.:  P.  N.  Mantz.      1922.      Pp.  105.) 

Sherman,  P.  T.  A  criticism  of  bureaucratic  propaganda  for  state  instir- 
ance.  (New  York:  Workmen's  Compensation  Publicity  Bureau,  80 
Maiden  Lane.      1922.      Pp.  32.) 

Stoddard,  F.  R.,  Jr.  J'he  state  supervision  and  regulation  of  insurance 
rates.  (Albany,  N.  Y. :  Author,  Supt.  of  Insurance  of  the  State  of  N.  Y. 
1922.      Pp.  29.) 

Strong,  E.  K.  The  psijchologij  of  selling  life  insurance.  (New  York: 
Harper.      1922.      Pp.  489.     $4.) 

Proceedings  of  the  fifty-sixth  annual  meeting  of  the  National  Board  of  Fire 
Underxoriters,  1022.      (New  York:  76  William  St.  1922.      Pp.  155.) 

Unemployment  insurance  in  theory  and  practice.  Research  report  no.  51. 
(New   York:   National   Industrial    Conference    Board.      1922.      Pp.    127. 

$1.50.) 

Workmen's  compensation  supplement  to  department  reports  of  Pennsylvania. 
(Harrisburg:  Workmen's  Compensation  Board.      1922.      Pp.  459.) 

Pauperism,  Charities,  and  Relief  Measures 

NEW    BOOKS 

Kerry,  W.  J.  Poverty,  charity  and  justice.  (New  York:  Macmillan. 
1921.      Pp.   196.      $2.25.) 

Morgan,  G.  Public  relief  of  sickness.  (New  York:  Macmillan.  1922. 
$1.50.) 

Statistics  relating  to  district  courts,  poor  farms,  probate  courts,  miscel- 
laneous charity  and  mothers'  pensions  in  Kansas.  (Topeka,  Kans. :  Board 
of  Administration.      1922.      Pp.  20.) 

Socialism  and  Co-operative  Enterprises 
Government  and  Industry.  By  C.  Delisle  Burns.  (New  York: 
Oxford  University  Press.  1921.  Pp.  315.) 
It  is  a  commonplace  among  students  of  history  and  politics  that 
English  history  is  a  record  of  compromise,  of  half-way  measures,  of 
steps  taken  only  under  the  pressure  of  emergency.  The  process, 
as  it  lias  gone  on,  has  always  been  carefully  scrutinized  and  appraised 
by  Englislimen  standing  apart  from  it.  Some  of  these  observers  have 
had  direct  authority,  Disraeli  for  example;  others  have  none  except 
that  derived  from  their  writings.  Dicey  for  example.  Their  work  has 
always  helped  to  bring  some  measure  of  order  to  the  process  of  develop- 
ment, and  to  lead  it  to  satisfactory  ends. 


1922]  Socialism  and  Co-operative  Enterprises  675 

Mr.  C.  Delisle  Burns  is  a  political  philosopher  and  in  the  tradition 
of  these  Englishmen.  Government  and  Industry  is  an  attempt  to 
find  order  in  disorder.  He  investigates  a  process  of  complex  change 
so  that  he  may  discover  whether  it  has  any  simple  and  orderly  ideas 
behind  it,  and  does  his  best  to  interpret  clearly  those  which  he  unravels. 
Recent  industrial  history  is  the  field  of  his  speculation.  He  studies  those 
recent  developments  in  industrial  life  and  structure  which  have  pro- 
duced a  more  genuine  intimacy  between  government  and  industry, 
and  an  increased  participation  of  government  in  industry.  He  dis- 
cusses as  he  proceeds  the  nature  and  aims  of  this  government  partici- 
pation. The  range  of  his  facts  is  broad.  In  successive  chapters  he 
studies  the  developments  in  industrial  relations  and  organization,  in 
communal  enterprise,  in  foreign  and  international  trade. 

The  objects  of  this  book  are  kept  well  in  the  front  throughout  and 
the  conclusions  presented  are  easily  comprehended.  Industry  is  the 
organization  of  a  people  for  the  production  of  goods  and  services. 
Government  is  an  organization  of  the  same  people  for  the  maintenance 
of  justice,  by  law  and  order.  If  industry  is  left  entirely  to  individual 
self-interest,  experience  proves  that  ciiaos  results  in  some  directions. 
The  non-governmental  industrial  community  itself,  of  recent  years, 
has  tended  to  develop  various  forms  of  organizations  which  prevent 
chaos,  and  which  seek  the  common  good.  During  the  same  period  the 
contacts  of  government  with  industry  have  greatly  multiplied  and  its 
participation  in  industry  has  increased.  This  is  not  to  be  regarded  as 
interference.  That  term  is  a  leftover  from  the  early  laissez-faire 
philosophy  which  never  comprehended  the  true  or  desirable  relation 
between  government  and  industry.  That  is  proved  by  the  character 
of  present  participation,  which  seeks  more  and  more  not  merely  to  con- 
trol from  outside,  but  to  promote  industrial  organization  which  will 
seriously  function  to  serve  the  common  good.  Government  has  been 
introducing  into  industrial  activity  some  of  its  principles,  particularly 
that  there  is  a  community  with  common  goods,  and  that  the  service  of 
this  community  is  the  primary  aim  of  work. 

The  evidence  of  these  general  tendencies  is  well  established  by  the 
facts  which  are  surveyed.  Their  reality  is  not  thrown  into  doubt 
by  certain  discordant  events  which  enter  the  picture.  The  work  of  the 
author  is  honestly  done  and  is  a  clear  view  of  current  experience  which 
will  probably  be  found  correct. 

The  style  is  always  easy  and  interesting  though  not  varied.  In 
parts  the  book  is  unnecessarily  laden  with  comment  upon  the  obvious. 
It  treats  British  experience  in  the  main,  with  an  occasional  excursion 
into  French  and  American.  Unfortunately  it  is  careless  in  its  refer- 
ences to  American  events.  For  example,  it  states  apropos  of  the  Webb 
act  (on  page  235)  "that  the  Federal  Trade  Commission  itself  appears 


676  Reviews  and  Nezv  Books  [December 

to  be  a  government  agency  for  promoting  exports."  And  page  255 
reads  "it  is  well  known  that  Canada  entered  in  1911  into  a  reciprocity 
arrangement  with  the  United  States."  The  references  to  American 
experience  are  but  fragmentary.  This  task  of  analyzing  the  recent 
changes  in  the  relationship  between  government  and  industry  in  this 
country  still  awaits  another  hand. 

Herbert  Feis. 
University  of  Kansas. 

Socialisation  in  Theory  and  Practice.  By  Heinrich  Strobei..  Trans- 
lated by  H.  J.  Stenning.  (London:  P.  S.  King  &  Son,  Ltd.  1922. 
Pp.  vi,  341.     10s.  6d.) 

The  comments  of  Herr  Strobel  on  this  subject  are  of  particular 
interest  as  he  was  Finance  Minister  in  the  Prussian  Revolutionary 
Government  of  1918,  representing  the  Independent  Social  Democratic 
party,  although  he  was  later  alienated  from  them  because  of  their 
sympathy  with  bolshevism,  while  disapproving  the  timid  conservatism 
of  the  German  majority  socialists. 

The  failure  of  bolshevism  in  Russia  he  attributes  chiefly  to  the 
industrial  immaturity  of  the  country.  Most  of  the  3,000,000,  odd, 
industrial  workers  in  European  Russia  were  semi-peasants.  Only  in 
Petrograd  was  there  a  class-conscious  proletariat  largely  composed 
of  Esthonians,  Finns,  Letts,  and  wandering  Russians,  so  that  city 
naturally  became  the  revolutionary  storm  center  in  1917. 

The  bolshevists  had  not  contemplated  socialism  at  a  gallop,  but  rev- 
olutionary fanaticism  liberated  forces  which  they  could  not  control. 
They  had  counted  on  the  "creative  energy"  of  the  masses ;  whereas  the 
masses,  in  their  blind  fury,  could  only  destroy.  The  bolshevists  should 
now,  the  author  thinks,  retreat  from  untenable  positions,  but  hold,  if 
possible,  to  the  socialization  of  the  basic  industries. 

The  author  attributes  the  collapse  of  bolshevism  in  Hungary  in  part 
to  the  war,  but  chiefly  to  the  chaotic  conditions  into  which  the  experi- 
ment had  plunged  the  country.  The  members  of  the  Commission  of 
Production,  which  took  over  the  socialized  industries,  may  have  been 
"good  organizers  and  agitators  against  capitalism,"  but  they  were  not 
commercial  or  technical  experts.  The  production  of  labor  declined 
seriously,  and  with  it  fell  the  standard  of  living  of  the  masses,  especial- 
ly in  the  city,  the  peasants  being  able  to  take  care  of  themselves  rela- 
tively well.  The  ruin  of  the  wealthy  brought  no  relief  to  the  poor,  as 
was  foretold  long  ago  by  Quesnay  and  Marx.  The  author  quotes  freely 
from  Eugen  Varga's  Die  wirtschaftlichen  Probleme  der  proletarischen 
Diktatur. 

The  revolution  in  Germany  caught  most  socialists  unprepared,  as 
they  had  become  imbued  with  evolutionism,  had  given  little  thought  to 


1922]  Socialism  and  Co-operative  Enterprises  677 

the  problems  of  the  transition  period,  and  were  overwhelmed  by  the 
governmental  responsibility  suddenly  thrust  upon  them.  The}"  had 
studiously  refrained  from  Utopian  plans  and  specifications,  trusting  to 
the  happy  inspiration  of  the  hour  and  the  instinct  of  the  masses,  both 
of  which  failed  at  the  critical  moment.  There  was  no  definite  plan,  no 
agreement,  and  no  proper  social  ideology  among  the  masses ;  so  the 
government  could  not  contend  with  the  capitalists,  who  knew  what  they 
wanted — the  rehabilitation  of  the  old  social  order. 

Strange  that  none  of  the  basic  industries  were  socialized.  Various 
schemes  were  proposed  by  economists  and  others,  only  to  come  under 
fire  of  the  capitalists  on  the  one  hand,  and  the  radical  socialists  on  the 
other.  Such  was  the  fate  of  the  plan  for  the  socialization  of  the  mines, 
proposed  on  February  15,  1919,  by  an  overwhelming  majority  of  the 
Socialization  Commission,  including  such  men  as  Ballod,  Cunow,  Hil- 
ferding,  Lederer,  Schumpeter,  Umbreit  and  Wilbrandt. 

The  law  which  was  passed  later  in  the  year  put  the  fuel  industry 
under  control  of  the  Imperial  Coal  Council  of  sixty  members,  repre- 
senting the  employers,  the  mine  workers,  the  coal-using  industries,  and 
the  nation.  But  under  this,  as  its  executive  organ,  was  the  Imperial 
Coal  Union,  which  fell  under  the  domination  of  the  s^'ndicates,  al- 
though three  out  of  its  five  directors  were  labor  representatives.  The 
labor  men  invariably  agreed  to  proposals  to  raise  prices,  as  they  were 
always  accompanied  by  a  sop  to  labor  in  the  form  of  increased  wages ; 
and  this  conspiracy  between  employers  and  laborers  controlled  the 
policy  of  the  Union,  the  Council  and  the  Imperial  Minister  of  Economv. 

For  all  that,  the  author  has  not  lost  faith  in  the  ultimate  triumph 
of  socialism,  as  the  only  remedy  to  arrest  the  downfall  of  Europe. 
He  would  apply  the  theories  of  guild  socialism  to  those  industries  which 
have  passed  through  the  earh'  stage  of  develojDment  to  a  condition  of 
routine  and  standardization — such  as  coal  mines,  the  manufacture  of 
steel,  cement,  locomotives,  telephones,  electric  cables,  motors, — in 
which,  if  technical  progress  has  not  altogether  ceased,  the  pace  has 
considerably  slackened.  In  such  industries  the  founders  and  devel- 
opers need  not  be  considered ;  the  capitalist  owners  are  to  be  excluded 
as  parasites ;  and  the  managers  may  be  employed  by  the  community. 

One  wonders  at  the  complacency  with  which  the  author  regards  the 
standardization  or  fossilization  of  industry  within  a  given  nation,  in 
view  of  the  possible  competition  of  new  industries,  and  the  more  for- 
midable competition  of  foreign  countries  whose  industries  are  not  thus 
stereotyped.  But  of  course  the  author  is  a  thoroughgoing  interna- 
tionalist. 

J.  E.  LeRossignol, 


678  Reviews  and  New  Books  [December 

NEW    BOOKS 

Alazard,  J.      Comvmnisme  et  fascio  en  Italie.      (Paris:   Bossard.      1922.) 

Carpenter,    N.      Guild    socialism.      An    historical    and     critical     analysis. 
(New  York:  Appleton.      1922.      Pp.  xv,  350.      $2.50.) 

Delemer,  a.  Le  hilan  de  I'etatisme.  (Paris:  Payot.  Pp.  285.  10  fr.) 
A  protest  against  the  socialization  of  industries,  based  on  a  detailed 
history  of  economic  organization  of  France  during  the  war;  an  analysis 
of  the  accounts  of  the  great  business  undertakings  of  the  state;  and  a 
demonstration  of  the  ruinous  result  of  its  conduct  of  them.  There  is 
a  good  bibliography,  and  a  preface  by  M.  Jacques  Bardoux,  who  supports 
the  author's  argument.  R.  R.  W. 

Hammond,  L.  B.  William  Lovett,  1800-1877.  (London:  Fabian  Society. 
1922.      3d.) 

Liefmann,  R.  Die  kom7i}nnistischen  Gemeinden  in  Nordamerika.  (Jena: 
Fischer.      1922.      Pp.  95.      10  M.) 

A  short  account,  well  put  together,  of  the  colonies  in  the  United  States 
which  have  tried  to  embody  the  communistic  idea.  There  is  a  good 
history  of  the  Huter  Baptists  who  began  in  Moravia  in  the  sixteenth 
century  and  still  numbered  1300  souls  in  1914  in  South  Dakota,  and  of  the 
Amana  colony  in  Iowa.  The  author's  conclusion,  after  reviewing  the 
life  of  these  and  of  other  communistic  groups,  is  that  communism  is 
possible  only  among  small  groups  of  people  having  the  same  education 
and  habits,  and  that  it  is  hardly  possible  except  when  there  is  at  the 
base  of  it  a  religious  idea.  Any  wider  application  of  the  communistic 
idea  must  fail  because  it  implies  more  compulsion  to  work  at  whatever 
the  state  sets  a  man  to  do  than  the  average  man  will  stand  except  in  time 
of  war,  and  because  human  progress  would  cease  when  the  greater  part 
of  the  community  worked  only  in  the  half-hearted  way  which  is  customary 
in  government  bureaus.  The  author  omits  all  consideration  of  the  possi- 
ble change  in  the  attitude  of  the  average  man  toward  work  when  work 
is  done  under  other  conditions  than  those  of  today. 

R.  R.  W. 

Pilenco,  a.  La  legislation  sovietique  et  la  conference  de  La  Haye. 
(Paris:  Giard.      1922.      Pp.  56.) 

An  attempt  on  the  part  of  a  jurist  to  show  that  under  the  soviet  govern- 
ment the  citizen,  and  the  alien  resident  in  Russia,  has  practically  no 
civil  rights.  The  author  reviews  the  state  of  the  law  at  the  date  of 
Tchitcherine's  communication  to  the  allied  governments,  March  1,  1922. 
Like  most  of  the  writings  on  Russian  affairs  which  have  come  from 
France  during  the  last  few  years  this  book  gives  a  rather  prejudiced  view 
of  the  situation.  j{_  j{    \y^^ 

Poisson,  E.     Socialisme  et  cooperation.      (Paris:  Rieder  &  Cie.      1922.) 

Consumers'  cooperative  societies  in  Nexv  York  state.  (New  York:  Con- 
sumers' League,  289  Fourth  Ave.      1922.      Pp.  24.) 

The  development  of  the  civil  service.  Lectures  delivered  before  the  Society 
of  Civil  Servants,  1920-1921.  (London:  King  &  Son.  1922.  Pp.  244. 
7s.  6d.)  ^ 

Contains  lectures  on  the  Administration  of  State  Telephones,  by  Sir 


1922]  Statistics  and  Its  Methods  679 

Andrew  Ogilvie   (pp.  92-128),  and  the  Limits  of  State  Participation  in 
Industry,  by  Sir  Herbert  Morgan  (pp.  83-91). 

The  fight  for  socialism.  A  review  of  present  forces  and  a  forecast  of 
victory,  by  an  unrepentant  socialist  after  the  tear  of  191^-1018  and  the 
post-war  struggles  of  1919-1920.  (New  York:  Longmans,  Green.  1922. 
Pp.  39.      75c.) 

Sdmtliche  Veroffentlichungen  der  zweiten  Sozialisierungs-Kommission. 
Third  edition.      (Berlin:  Engelmann.     1922.      Pp.  59.     5.30  M.) 

Statistics  and  Its  Methods 

Wealth  and  Income  of  the  American  People.  By  Walter  Rentox 
IxGALLs.      (York,  Pa. :  G.  H.  Merlin  Co.      1922.     Pp.  xiv,  321.) 

Mr.  Ingalls'  Wealth  and  Income  of  the  American  People  is  a  com- 
bination of  a  comprehensive,  yet  detailed  and  highly  suggestive,  analy- 
sis of  the  wealth  of  the  L^^nited  States,  with  a  series  of  somewhat 
sketchy  chapters  discussing  the  distribution  of  the  national  income; 
the  former  is  distinctly  worth  while,  but  the  latter,  on  the  whole,  dis- 
appointing. Such  a  chapter,  for  instance,  as  "The  results  of  social- 
ism and  communism,"  dealing  at  considerable  length  with  the  Russian 
situation,  seems  strangely  out  of  place.  A  repudiation  of  the  quan- 
tity theory  of  money  (an  underlying  thought  of  the  author)  is  prac- 
tically forgotten  elsewhere  than  in  the  preface,  and  throughout  the 
volume  the  rather  positive  economic  deductions  drawn  from  statistical 
data  presented  are  likely  to  challenge  the  opinions  of  the  reader. 

The  use  of  1913  prices  as  a  common  denominator  permits  the  sum- 
mation of  dissimilar  physical  objects  appearing  in  the  enumeration  of 
wealth.  This  base  is  departed  from  only  in  the  few  instances  where 
the  unit  value  of  a  particular  item  has  a  pronounced  secular  trend, 
rendering  improbable  the  restoration  of  its  pre-war  relationship  to 
the  price  level  as  a  whole.  The  essence  of  the  inventories  consists, 
therefore,  in  "the  counting  of  things  rather  than  the  ephemeral  valua- 
tions that  are  put  upon  them."  On  this  basis,  which  eliminates  the 
effects  of  inflation,  the  estimated  increase  in  the  internal  wealth  of  the 
United  States  from  1916  to  1920  amounted  to  1.6  per  cent — a  rate  of 
gain  actually  less  rapid  than  the  growth  of  population  itself  and  con- 
fined in  large  part  to  consumers'  goods  of  luxury  or  semi-luxury 
character.  An  improvement  of  about  $18,000,000,000  in  the  inter- 
national situation  is  discounted  heavily,  on  account  of  the  character 
of  the  obligations  represented.  These  additions  to  wealth  are  con- 
sidered not  only  substantially  less  than  could  have  been  expected  had 
there  been  no  war,  but  of  such  an  unbalanced  character  as  to  necessi- 
tate future  readjustments. 

An  approximation  of  national  income,  expenses,  and  savings  is 
obtained  on  an  annual  basis  for  the  period  1913-1920  through  a  com- 


680 


Reviews  and  New  Books  [December 


bination  of  the  estimates  of  income  of  the  National  Bureau  of  Eco- 
nomic Research  with  those  of  Professor  Friday  for  capital  accumula- 
tions. During  this  interval  the  national  income  increased  from 
$34,000,000,000  to  $65,000,000,000,  and  savings  from  $6,500,000,000 
to  $11,500,000,000.  Governmental  and  luxury  expenditures  aggre- 
gated about  $11,500,000,000  in  1919,  contrasted  w\th  a  figure  slightly 
less  than  half  that  size  six  years  earlier.  The  completion  of  the  pro- 
cess of  deflation  should  leave  us  with  a  gross  income  of  not  more  than 

$37,500,000,000,  out  of  which  "it  is  perfectly  clear we  cannot 

spend  $11,500,000,000  for  government  and  luxuries  and  at  the  same 
time  save  anything  for  capital  accumulation." 

War  demands,  together  with  an  increase  in  the  consumption  of  lux- 
uries, caused  an  impairment  in  what  may  loosely  be  termed  the  plant 
and  equipment  of  the  United  States  which  can  only  be  remedied  through 
increased  savings — a  diversion  of  expenditures  from  luxuries  to  capital 
goods.  Little  can  be  expected  from  labor,  but  Walker's  residual 
theory  is  invoked  to  show  that  its  share  (greatly  swollen  as  a  result 
of  the  war)  in  the  distribution  of  the  national  income  will  be  reduced. 
The  working  man  Avill,  however,  be  better  off  with  this  temporarily 
lowered  standard  of  living  than  under  the  socialistic  or  communistic 
system  where  he  receives  a  larger  proportion  of  a  much  smaller  product. 
"A  transparency  in  industry  leading  to  equilibrium  in  industry"  is 
bound  to  result  from  increasing  intelligent  use  of  industrial  statistics, 
particularly  in  the  field  of  forecasting  the  trend  of  business,  and  this 
will  so  increase  production  as  to  permit  constantly  improving  stand- 
ards of  living. 

It  is  unnecessary  to  dwell  upon  the  very  real  difficulties  encountered 
of  necessity  in  the  attempt  to  weld  the  scattered  mass  of  existing  sta- 
tistical data,  voluminous  yet  overlapping  and  incomplete,  into  an 
estimate  of  the  wealth  of  the  United  States.  Mr.  Ingalls  has  had  the 
courage  to  face  these  difficulties  and,  at  times,  in  the  absence  of  any 
other  alternative,  to  make  what  are  frankly  labelled  guesses ;  no  more 
is  claimed  for  the  results  than  that  they  are  intelligent  approximations. 
The  fact  that  convenience  alone,  at  times,  seems  to  determine  the  basis 
of  valuation  employed  lessens  the  validity  of  comparisons  between 
different  items  in  the  series ;  steam  railways,  for  instance,  are  valued 
on  the  basis  of  cost  of  reproduction  (1914  prices),  less  depreciation, 
while  tlie  market  value  of  securities  seems  to  determine  the  estimate 
in  the  case  of  electric  railways — the  difference  in  results  yielded  by  the 
two  methods  is  obvious.  Furthermore,  the  totals  used  in  the  case  of 
steam  railways  rest  upon  the  belief  of  a  railway  executive  (whose  very 
position  renders  impartiality  difficult)  that  the  Interstate  Commerce 
Commission's  valuation  of  the  roads  will  be  substantially  above  the 
figures   carried   by  the  companies   upon  their  books,  and   that  there 


1922]  Statistics  and  Its  Methods  681 

should  be  added  to  an  estimate  so  increased,  an  additional  20  per  cent 
to  attain  the  "conservative"  ground  held  by  the  railways.  An  esti- 
mated average  life  of  five  years  (page  135)  serves  as  the  basis  for  the 
valuation  of  automobiles,  but  later  (page  210)  in  establishing  a  case 
for  the  overexpansion  of  the  automobile  industry  with  the  consequent 
"great  surplus  of  manufacturing  capacity  which  will  cease  to  have 
value  for  the  purpose  for  which  it  was  provided,"  the  annual  demand 
assumed  seems  much  smaller  than  any  compatible  with  the  length  of 
life  assumed,  even  making  liberal  allowance  for  the  author's  belief  that 
a  diminished  national  income  will  force  retrenchment  in  this  direction. 

Although  "the  counting  of  things  rather  tlian  the  ephemeral  valua- 
tions that  are  put  upon  them"  should  disregard  changes  due  only  to 
inflation  or  deflation,  horses  are  listed  (page  95)  at  about  .$100  per 
head  in  1916  and  but  $80  in  1920;  stated  otherwise,  the  same  physical 
inventory  would  have  been  valued  at  about  .$400,000,000  less  in  the 
later  than  in  the  earlier  year.  The  valuation  of  shipping  at  .$80  per 
ton  in  1916,  with  the  explanation  that  "from  1914  to  1916  ships  had 
greatly  increased  in  value"  (page  143)  seems  incompatible  with  a 
valuation  (after  completely  writing  off  6,000,000  tons  as  useless)  of 
$50  per  ton  in  1920 ;  different  yardsticks  are  used  to  measure  the 
same  physical  entity.  And  again  (page  90)  new  construction  during 
1917-1920  is  reckoned  in  terms  of  1916  prices,  but  reductions  for 
fire  losses  during  the  following  years  of  higher  prices  are  stated  without 
reference  to  the  1916  yardstick. 

Real  and  money  income  are  confused  in  the  discussion  of  the  national 
income.  If  gross  income  is  reduced  from  $65,000,000,000  to  $37,- 
500,000,000  as  the  author  contends  (page  219),  it  will  be  primarily 
as  a  result  of  a  lower  price  level  and  the  loss  will  be  in  money  income. 
The  chapter  dealing  with  "the  production  of  commodities"  itself  con- 
tains statistical  data  demonstrating  that  production,  whether  meas- 
ured in  actual  physical  units  or  reduced  to  dollar  totals  through  the 
common  denominator  of  a  fixed  price  base,  fluctuates  within  limits  far 
more  circumscribed  than  those  suggested.  But  the  very  reduction 
anticipated  in  the  price  level  should  automatically  lower  the  money 
cost  of  this  same  "governmental  and  luxury  expenditure"  to  figures 
far  below  the  $11,500,000,000  cited,  and  it  is  the  resultant  total  that, 
compared  with  the  estimated  income  of  .$37,500,000,000,  will  indicate 
the  proportion  of  our  income  absorbed  by  such  expenditures. 

A.  J.  Hettinger,  Je. 

Harvard  University. 

NEW    BOOKS 

BowLEY,  A.  L.      Official  statistics,  zc'hat  they  contain,  and  how  to  use  them. 
(London:  Oxford  Univ.  Press.      1921.      Pp.  63.) 

Professor   Bowley   has   in   this   book,   belonging   to   the   series   of    The 


682  Reviews  and  New  Books  [December 

World  of  Today,  rendered  to  English  and  American  readers  a  real  serv- 
ice in  his  description  of  "the  more  important  reports  and  papers  officially 
published  [by  the  English  government]  in  recent  years  containing  sta- 
tistics of  general  interest."  The  plan  of  presentation  is  to  "illustrate  the 
use  of  reports  by  bringing  together  in  some  cases  all  that  is  known  in 
relation  to  a  particular  subject  and  by  retabulating  details  scattered 
through  a  report  so  as  to  show  how  the  various  tables  are  connected." 
Accordingly,  it  serves  as  a  comparison  of  statistical  facts,  but  more  par- 
ticularly as  a  guide  to  their  use  and  meaning. 

The  subject-matter  is  grouped  under  four  general  chapters:  Popula- 
tion; Industry,  Trade  and  Prices;  Income  and  Wages;  and  Social  Condi- 
tions. The  space  allotted  to  the  topics  is  not  uniform,  more  attention 
being  given  to  the  first  two  than  to  the  others.  To  American  readers, 
this  volume  is  of  interest  primarily  from  two  points  of  view :  first,  it  is 
critical  in  its  approach;  and  second,  it  contains  specific  references  to 
sources  where  statistics  of  general  interest  can  be  secured.  Indeed,  the 
more  valuable  part  of  the  volume  seems  to  be  contained  in  the  critical 
appraisement.  So  far  as  the  reviewer  knows,  there  is  nothing  of  like 
nature  that  has  been  prepared  relative  to  similar  statistics  compiled  by 
our  central  or  state  governments.  This  is  the  more  to  be  regretted  be- 
cause of  the  influence  which  statistical  information  is  coming  to  have 
upon  public  and  private  endeavor  on  questions  involving  social  and 
business  problems.  The  "Introduction"  might  well  be  considered  as  a 
brief  but  poignant  guide  both  to  makers  and  users  of  statistical  data. 

Horace  Secrist. 

Clark,  W.  W.      JVhittier  scale  for  grading  juvenile  offenses.      Bull.  no.  11. 

(Whittier,  Calif.:  California  Bureau  of  Juvenile  Research,  Whittier  State 

School.      1922.      lOc.) 
Holland,  R.  W.     Business  statistics:   their  preparation,  compilation  and 

presentation.      (London:   Pitman.      1922.      Pp.   87.      3s.   6d.) 

Knauth,  O.  W.  Distribution  of  income  by  states  in  1919.  (New  York: 
Harcourt,  Brace  &  Co.      1922.      Pp.  v,  30.) 

Statistical  by-product  of  the  volumes  on  Income  in  the  United  States 
which  have  been  published  by  the  National  Bureau  of  Economic  Research. 
It  is  issued  at  this  time  in  order  to  meet  the  special  needs  of  "investiga- 
tors concerned  with  the  comparative  capacity  of  the  various  states  to  bear 
increased  taxes,  to  buy  goods  of  various  sorts,  to  absorb  securities,  etc." 

Secrist,  H.  A  business  barometer  for  retailers.  Bureau  of  Business  Re- 
search, series  II,  no.  2.  (Chicago:  Northwestern  Univ.  School  of  Com- 
merce.     1922.      Pp.  20.      50c.) 

British  overseas  dominions  and  protectorates,  from  1905  to  1919.  Fifty- 
fifth  number.      (London:  H.M.'s  Stationery  Office.      1922.      12s.  6d.) 

Mortality  statistics.  Twenty-first  annual  report,  1920,  Bureau  of  the 
Census,  Department  of  Commerce.  (Washington:  Supt.  Docs.  1922, 
$1.50.)  "^  ^ 

Statistics  of  unemployment  in  various  countries,  1910-1922.  Studies  and 
reports,  1922,  no.  1.      (Geneva:  International  Labor  Office.      1922.     20c.) 

Tables  for  applied  mathematics  to  finance,  insurance,  statistics.  Edited  by 
J.  W.  Glover.  (Ann  Arbor,  Mich.:  George  Wahr.  1922.  Pp.  620. 
$3.90.) 


PERIODICALS 

The  Review  is  indebted  to  Robert  F.  Foerster  for  abstracts  of  articles  in  Italian 
periodicals,  and  to  R.  S.  Saby  for  abstracts  of  articles  in  Danish  and  Swedish 
periodicals. 

Theory 

(Abstracts  by  Walton  H.  Hamilton) 

Ayres,  C.  E.  Dewey's  Human  Nature  and  Conduct.  Journ.  Phil.,  Aug.  17,  1922. 
Pp.  6.  A  review  of  a  book  which  gives  an  excellent  psychological  approach  to 
humanistic  science. 

Barxes,  H.  E.  American  p.tj/choloplcal  sociology.  Sociol.  Rev.,  July,  1922.  Pp.  11. 
A   study   of   the   contributions    of   Ward,    Patten,   and    Sumner    to    social    theory. 

.     Some    typical   contributions    of    English    sociology    to    political    theory. 

Am.  Journ.  Sociol.,  Sept.,  1922.  Pp.  2(5.  A  study  of  the  social  psychology  of 
Graham  Wallas  and  its  implications  for  work  in  the  humanistic  sciences. 

Bernard,  L.  L.  The  conditions  of  social  progress.  Am.  Journ.  Sociol.,  July,  1922. 
Pp.  28.  "Not  magic,  nor  traditional  culture,  nor  the  faithful  trusting  heart,  but 
the  knowledge  and  technique  of  science,  can  set  men  free  from  the  forces,  mainly 
those  of  ignorance  and  fear,  which  have  enslaved  him." 

.     Herbert   Spencer:    the    man   and   his   age.     So.    Atlantic   Quart.,   July, 

1922.     Pp.  11.     "In  large  measure  he  led  in  the  application  to  sociology  and  ethics 

of  the  method  of  collecting  great  masses  of  data  for  generalization The  fact 

that  the  inductive  method.  ..  .was  applied  so  much  earlier  to  sociology  than  to 
economics is  largely due  to  Herbert  Spencer." 

Bezansox,  a.  Skill.  Quart.  Journ.  Econ.,  Aug.,  1922.  Pp.  20.  "What  I  have 
intended  to  stress  is  the  need  of  evaluating  our  present  problem  in  terms  other 

than  those  of  the  journeyman  apprentice  days  which  have  passed To  appraise 

skill  in  terms  of  the  small  shop  and  the  hand  tools  of  a  pre-factory  age  is  to 
evaluate  its least  significant  aspects." 

BiGELow,  S.  L.,  Sharfmax,  I.  L.,  and  Wexley,  R.  M.  Henry  Carter  Adams.  Journ. 
Pol.  Econ.,  April,  1922.  An  appreciation  of  Mr.  Adams  as  a  teacher  and  of  his 
contributions  to  economics  and  to  public  service.  There  is  added  a  bibliography 
of  his  published  writings. 

Bode,  B.  H.  What  is  psychology?  Psych.  Rev.,  July,  1922.  Pp.  9.  In  view  of  the 
crisis  in  psychology,  "it  has  a  rare  opportunity  to  exercise  a  far-reacting  influence 
by  showing,  through  detailed  investigations,  the  meaning  of  purposive  behavior 
to  an  age  that  is  far  too  exclusively  dominated  by  the  concepts  of  mechanistic 
science." 

Boucke,  O.  F.  The  relation  of  ethics  to  social  science.  Intern.  Journ.  Ethics,  Oct., 
1922.     Pp.  19.     "Though  ethics  turns  on  wants  and  satisfactions,  these  need  not  be 

hedonic the  content  of  the  good  changes  with  time  and  place,  with  conditions 

and  creeds  mutually  interacting.  Social  science  may  help  us  to  realize  moral 
norms  as  submitted  but can  scarcely  ever  be  completely  successful." 

BowLEY,   A.    L.     The    definition    of    national    income.     Econ.    Journ.,    March,    1922, 

Pp.    11.     "Social    income =consumption    and    saving    in    a    year=aggregate 

of  individuals'  income less  income  received for  no  service  or  for  services 

not  rendered  in  the  year  in  question." 

Burrows,  F.  W.  Where  are  the  economists?  Independent,  Aug.  5,  1922.  Pp.  2. 
"Could  we  possibly  do  worse  than,  making  a  poverty  of  our  riches,  to  be  always 
drafting"  the  economists  "as  special  workers,  when  our  supreme  need  is  for  a 
classification  of  our  economic  problems  by  clear  and  scientific  thought  and  the 
application  to  them  of  fundamental  principles." 


I 


684  Periodicals  [December 

Cahver,  T.  N.  Lps  fostulates  necessaires  d'une  politique  de  laissez-faire.  Scientia, 
June,  1922.  Pp.  9.  A  criticism  of  the  necessary  postulates  of  laissez-faire  as 
presented  by  Henry  Clay  in  his  Economics. 

Chafee,  Z.,  Jr.     Economic   interpretation  of  judges.     New   Repub.,  June   7,   1922. 

Pp.  4.     "The  problem  of  the  judiciary  is what  methods  will  make  it  easier 

to  place  men  of  this  legal  and  ultra-legal  power  on  the  bench  and  after  they  are 
there  will  enable  them  to  keep  in  continuous  fruitful  contact  with  the  changing 
social  background  out  of  which  controversies  arise." 

Cohen,  M.  R.  The  limits  of  political  science.  New  Repub.,  June  21,  1922.  Pp.  3. 
A  review  of  recent  books  by  Herbert  Fisher,  Leon  Duguit,  and  Harold  J.  Laski. 

CoRuiN,  J.  The  industrial  republic.  No.  Am.  Rev.,  Aug.,  1922.  Pp.  16.  A  specu- 
lation upon  the  possibilities  and  problems  of  authoritative  organization  by 
industries  and  a  plea  for  a  limitation  of  the  franchise  to  the  capable. 

Cunningham,  H.  E.  Intelligence  and  social  life.  Am.  Journ.  Sociol.,  July,  1922. 
Pp.  9.  "A  short  examination  of  the  philosophy  of  empiricism,  idealism,  the  new 
realism,  and  mysticism,  as  each  states  the  nature  and  functions  of  intelligence, 
reveals  the  fact  that  they  offer  little  or  no  hope  for  social  reconstruction.  The 
biological,  or  institutional  view,  however,  is  suggested  as  one  which  offers  hope  for 
a  more  stable  future. 

CuTHBERT,  Father.     The  ethical  basis  of  wages.     Catholic  World,  July,  1922.  Pp.  14. 

"The  only  proper  function  of  a  state  or  society  is  to  protect  the  individual 

as  soon  as  it  oversteps  the  limits  of  protection,  it  becomes  a  tryanny If 

the  workers lean  toward  systems  which  deny  the   rights   of   property,   it  is 

because  his  own  right  of  property  in  his  labor  is  still  denied  him." 

Dewey,  J.     The  American  intellectual  frontier.     New  Repub.,  May  10,  1922.     Pp.  3. 

"In   our   intellectual   heritage we    are    evangelical."     "The    depressing   effect 

upon  the  free  life  of  inquiry  and  criticism"  is  great.     "No  account of  the 

failure  to  develop  an  intelligent idealism is  adequate  unless  it  meets 

with  this  fixed  limit  of  thought." 

Douglas,  P.  H.     The  economic  waste  of  luxury.     World  Tomorrow,  June,  1922.  Pp.  2. 

"Luxury is  a  waste;  it  is  a  burning  up  of  human  labor  upon  the  less  essential 

needs  of  life The  expenditures  of  the  wealthy"  provoke  "the  competition  of 

ostentation." 

Drever,  J.  Les  contributions  des  diffirents  pays  a  la  science  psychologique.  Scientia, 
Supp.,  Aug.,  1922.  Pp.  10.  A  historical  account  of  the  development  of  psychology 
with  some  attention  to  recent  developments. 

Ellis,  H.     The  measurement  of  civilization.     Forum,  April,  1922.     Pp.  11.     "There 

is  much  in  civilization  which  we  may measure,  yet  when  we  seek  to   scale 

the  last  heights the  ladder  of  our  'metrology'  comes  to  grief.     The  methods 

of  the  mind  arc  too  weak  and  the  universe  is  too  complex." 

Feis,  H.  What  determines  the  volume  of  a  country's  international  trade.  Am. 
Econ.  Rev.,  June,  1922.     Pp.  9. 

FLiJGOE,  E.  Die  Bedeutung  William  Thompsons  fiir  die  Wirtschaftswissenschaft. 
Schinollers  Jahrb.,  2  Heft,  1922.  A  study  of  the  presuppositions  and  the  signifi- 
cance of  Thompson's  work  and  a  brief  comparison  of  his  thesis  with  those  of 
J.  S.  Mill. 

Foster,  AV.  T.  Prices,  profiteers  and  production.  Annalist,  June  26,  1922.  Pp.  2. 
"If  the  buyer  is  to  control  production,  he  cannot  escape  the  responsibility  for 
controlling  prices." 

VAN  Genechten,  B.  Von  Biihm  over  de  rechtvaardigheid  cler  rente.  De  Economist 
(Dutch),  July-Aug.,  1922.  Pp.  I.  A  discussion  of  von  Bohra-Bawerk's  justifica- 
tion of  interest. 


1922]  Theory  685 

GeoegEj  W.  H.  Proudhon  and  economic  federalism.  Journ.  Pol.  Econ.,  Aug.,  1922. 
Pp.  12.  "For  these  reasons — an  objective  method  of  approach,  the  express- 
ing of  economic  forces,  anarchy  as  a  form  of  government,  voluntary  association 
with  a  public  law  status,  class  consciousness,  identification  of  government  with  the 
capitalist  class,  a  revolutionary  policy  aiming  to  subvert  the  existing  social  order 

— one  can  affirm  with  confidence  that  Proudhon  was  the  father  of  economic 

federalism." 

GoLDSTEix,  S.  E.  Judaism  and  the  industrial  crisis.  The  Annals,  Sept.,  1922.  Pp.  4. 
Industry  must  be  organized  "adequately  to  meet  the  material  wants  of  those  who 

labor,  for  the  first  charge  upon  industry  is the  welfare  of  the  workers"  and 

"to  serve  society,  for  the  primary  purpose  of  industry  is to  meet  the  needs 

of  men." 

GraSj  N.  S.  B.  The  development  of  metropolitan  economy  in  Europe  and  America. 
Am.  Hist.  Rev.,  July,  1922.  Pp.  14.  "It  has  been  generally  held  that  the  state 
is  not  simply  a  political  but  an  economic  unit  as  well The  theory  of  metro- 
politan economy  cuts  up  the  state  economically  and  emphasizes  intra-metropolitan 
trade  instead  of  national  policies  and  international  commerce." 

GREGoaY,  T.  E.  Les  problemes  du  prix  et  du  capital  par  rapport  a  la  question  de  la 
socialisation.  Scientia,  Aug.,  1922.  Pp.  10.  A  study,  in  the  light  of  the  experience 
of  the  war,  of  the  complications  given  to  "la  question  de  la  socialisation"  by  the 
unsolved  "probleme  du  prix  et  celui  de  Tapport  de  capital." 

Hamilton',  W.  H.  A  theory  of  the  rate  of  wages.  Quart.  Journ.  Econ.,  Aug., 
1922.  Pp.  45.  "The  rate  of  wages  in  an  industry  or  occupation  is  a  function  of 
the  pecuniary,  technical,  and  economic  factors  which  impinge  upon  it." 

Howard,  G.  E.  Sociology,  its  critics  and  its  fruits.  Journ.  Applied  Socio!.,  April, 
1922.  Pp.  12.  Sociology  has  laid  a  theoretical  foundation  for  practical  progress 
in  accommodating  education,  the  church,  and  law  to  prevailing  social  needs. 

HoYT,  H.  The  economic  future  of  the  United  States.  Administration,  Aug.,  1922. 
Pp.  7.  Economic  development  in  the  United  States  depends  upon  (1)  a  scientific 
discovery  and  utilization  of  human  and  material  resources;  and  (2)  a  proper 
balance  between  agriculture  and  manufacture. 

JoHKSox,  F.  E.     The  teaching  of  the  Protestant  Church.     The  Annals,  Sept.,  1922. 

Pp.  5.     "There  is  a tendency to  restate  the  teachings  of  Jesus  in  social 

terms with  particular  reference  to  economics  and  social  problems The 

churches  are  moving  in  the  direction  of a  full  recognition  of  the  rights  and 

needs   of  the  individual a   more   democratic   distribution   of   the   product   of 

industry  and  of  responsibility,  and the  service  motive  as  against  competition 

for  personal  gain." 

KxAUTH,  O.  W.  The  place  of  the  corporate  surplus  in  the  national  income.  Journ. 
Am.  Stat.  Assoc,  June,  1922.     Pp.  10.     "The  savings  constitute  about  one  fourth 

of  the  total  savings  and  about  four  per  cent  of  the  national  income.     They 

largely  increase  the  power  of  managements  of  corporations  in  guiding  the  growth 
of  industries  in  this  country." 

KoTAXY,  L.  A  theory  of  profit  and  interest.  Quart.  Journ.  Econ.,  May,  1922. 
Pp.  41.  "Profit  emerges  out  of  differences  in  capitals,  due  to  the  laws  of  increas- 
ing returns,  which  in  turn  is  based  on  the  superioritj-  of  larger  over  smaller  tools, 
as  to  capitalization  per  unit  of  product  and  as  to  cost  of  production." 

Knight,  F.  H.  Ethics  and  the  economic  interpretation.  Quart.  Journ.  Econ., 
May,  1922.  Pp.  28.  "There  is  room  in  the  field  of  conduct  for  three  different 
kinds  of  treatment:  first,  a  scientific  view,  as  economics  and  technology;  second, 
a  genetic  view,  as  culture  history;  and  third,  a  criticism  of  values." 

Leary,  D.  B.  The  modern  world  order  and  the  original  nature  of  man.  Intern. 
Journ.  Ethics,  AprU,  1922.     Pp.  24.     A  review  of  recent  books  wherein  the  con- 


686  Periodicals  [December 

elusions  of  recent  work  in   biology   and  psychology   is   applied   to   "the  problem 
of  the  individual  and  the  group." 

Leavitt,  F.  M.  Skilled  hanxU  or  automatic  machinery.  Scientific  American,  Sept., 
1922.  Pp.  3.  The  automatic  tool  does  not  tend  to  make  the  industrial  system 
one  of  monotonous  jobs  or  to  give  to  the  average  laborer  less  interesting  work 
to  do  than  he  had  before  its  invention. 

Le  Master,  E.  Economics  and  the  accountant.  Journ.  Account.,  Aug.,  1922.  Pp.  6. 
"It  is  only  by  the  combination  of  the  technical  knowledge  of  his  profession  and  a 
knowledge  of  economics  that"  the  accountant  "can   render   his   greatest  service." 

Lepaulle,  p.  The  function  of  comparative  taw.  Harvard  Law  Rev.,  May,  1922. 
Pp.  21.  A  critique  of  "sociological"  jurisprudence.  Comparative  law  helps  to 
see  things  "from  a  certain  distance."  It  is,  therefore,  invaluable  to  those  who 
would  make  law  serve  its  social  function. 

Lindsay,  S.  M.  Social  concepts  in  economic  theory.  The  Annals,  Sept.,  1922.  Pp. 
6.  New  social  concepts — such  as  cooperation,  a  national  minimum,  industrial 
peace,  and  the  like — "have  already  transformed  the  dismal  science  into  a  human 
science  of  immeasurably  greater  service  to  humanity." 

Lloyd,  A.  E.  J(fes  of  leisure.  Am.  Journ.  Sociol.,  Sept.,  1922.  Pp.  19.  A  study 
of  the  possibilities  of  a  large  amount  of  leisure,  democratically  distributed,  which 
are  inherent  in  the  use  of  the  "automatic  tool." 

LoGEMANN,  Sa^-,  Bordewljk  en  von  Bnhm-Baxoerks  "Drifter  Grund."  De  Economist 
(Dutch),  May,  1922.  Pp.  7.  A  presentation  of  some  phases  of  von  Bohm- 
Bawerk's  tlieory  of  present  worth  which  have  been  criticized  by  Sax  and  Bordewijk. 

McDouGAXL,  W.  "The  Revolt  Aciainst  Civilization."  Quart.  Journ.  Econ.,  Aug., 
1922.  Pp.  16.  A  review  of  Stoddard's  book  with  the  above  caption  and  of  Des- 
mond's Labor,  the  Giant  with  the  Feet  of  Clay. 

Mackenzie,  J.  S.  The  threefold  state.  Hibbert  Journ.,  Apr.,  1922.  Pp.  15.  A 
review  of  Steiner's  Die  Dreiyliederuny  des  Sozialen  Organismus  and  a  plea  for 
the  release  "the  spiritual  and  industrial  sides  of  human  life"  from  "the  domination 
of  the  political  state." 

Mayer,  H.  Untersuchung  zu  dem  Grundgesetz  der  wirtschaften  Wertrechnung. 
Zeitschr.  f.  Volkswirts.  u.  Sozialpolitik,  1-3  Heft,  1922.  *  An  analytical  and 
historical  inquiry  into  the  nature  of  the  concept  of  value. 

Meklin,  J.  M.     Ross's  "The  Principles  of  Sociology."     Journ.  Phil.,  April  13,  1922. 

Pp.  5.     A  review. 
Miller,  F.  J.     Industry  as  a  service.     Tlie  Annals,  Sept.,  1922.     Pp.  4.     Industrial 

activities  must  meet  the  test  of  "social  desirability." 

Moore,  H.  L.  Elasticity  of  demand  and  flexibility  of  prices.  Journ.  Am.  Stat. 
Assoc,  March,  1922.  Pp.  12.  A  discussion  of  "an  effective  quantitative  treat- 
ment" of  demand. 

Neisser,  H.  Gustav  Cassels  "Theoretische  Sozialokonomie.  SchmoUers  Jahrb.,  2 
Heft,  46  Jahrg.     A  review  of  Cassel's  recent  treatise. 

OoBiTRN,  W.  F.  and  Thomas,  D.  S.  The  influence  of  business  cycles  on  certain 
social  conditions.  Journ.  Am.  Stat.  Assoc,  Sept.,  1922.  Pp.  17.  A  study  of  the 
influence  of  the  business  cycle  upon  such  "social  conditions"  as  births,  divorces, 
deaths,  crimes,  and  the  like. 

Pemberton,  R.  K.  The  commensurability  of  values.  Intern.  Journ.  Ethics,  Oct., 
1922.  Pp.  11.  "The  difficulties  inherent  in  subjective ethics  are  incontest- 
able; on  the  other  hand  the  teleological  systems  all  seem  to  labor  under  the  defect 
that  the  calculation  of  consequences  must  always  take  a  quasi-mathematical  form 

«"d  it  is  true that  'the  logical   presupposition   of   all   valuation  must 

be  a  single value.'  " 


1922]  Theory  687 

Pepper,  S.  C.  The  boundaries  of  society.  Intern.  Journ.  Ethics,  July,  1922.  Pp. 
22.  "Society  is  a  phenomenon  behaving  according  to  certain  definite  laws,  and 
morality  being  essentially  social  is  also  determined  by  those  cases  and  finds  its 
outward  limits  at  the  boundaries  of  society." 

Pehey,  W.  J.  The  relation  of  clan  divisions  to  social  conduct.  Hibbert  Journ., 
April,  1922.  Pp.  17.  "The  original  significance  of  the  class  system  was  vastly 
different   from   that  which   it   possesses   at   present.     It   came   into   existence    for 

certain  definite  reasons;  it  persisted  for  other  reasons it  has  had  tremendous 

effect  upon  the  behavior  both  of  the  superimposed  groups  as  well  as  on  those  over 
whom  they  dominate."  An  explanation  is  a  problem  for  the  incipient  science  of 
social  psychology. 

Powell,  T.  R.  Income  from  corporate  dividends.  Harvard  Law  Rev.,  Feb.,  1922. 
Pp.  30.  An  essay  upon  "the  art  of  being  methodically  ignorant  of  what  every  one 
knows  to  be  true." 

Ramage,  a.  a  Christian  order  of  industry  and  commerce.  Congregationalist,  Aug. 
31,  1922.  Pp.  2.  "For  the  removal  of  admitted  evils  and  the  solution  of  vexed 
problems  business  men  have  a  special  responsibility,  both  collective  and  individual, 
by  virtue  of  their  position  as  leaders  of  industry,  and  have  a  peculiar  qualification, 
owing  to  their  inside  knowledge  of  the  machinery  of  business." 

VAX  RiiiJN,  A.  A.  Over  de  methode  in  de  economie.  De  Economist  (Dutch),  June, 
1922.  Pp.  18.  Finds  that  most  difficulties  and  differences  in  economic  methods 
are  due  to  the  various  realistic  or  ethical  approaches  to  economic  problems. 

Rtax,  J.  A.  The  social  question:  a  suggested  limitation  of  capitalist  property. 
Scientia,  Sept.,  1922.  Pp.  10.  "After  standard  wages,  a  reasonable  rate  of 
interest,  adequate  remuneration  of  management,  and  all  the  other  proper  expenses 
of  production  have  been  paid,  the  wage  earners  should  share  the  surplus,  not  with 
the  owners  of  capital,  but  with  the  managers  of  the  business." 

.     The  teaching  of  the  Catholic  Church.     The  Annals,  Sept.,  1922.     Pp.  5. 

"The  Catholic  Church  conceives  her  mission  as  that  of  saving  souls.  Men  save 
their  souls  by  conducting  themselves  righteously  in  all  the  relations  of  life.  Among 
the  most  important  of  these  are the  industrial." 

Seidler-Schiiid,  G.  Adam  Miiller.  Von  der  Bedetdung  seiner  Lehren  fiir  unsere 
Zeit.  Zeitschr.  f.  Volkswirts.  u.  Sozialpolitik,  1-3  Heft,  1922.  A  laudatory  appre- 
ciation of  the  man  and  his  theories. 

SeligmaXj  E.  R.  a.  Henry  Carter  Adams.  Econ.  Journ.,  June,  1922.  Pp.  6.  An 
appreciation  of  Mr.  Adams'  personality  and  his  contributions  to  economics. 

Skerrett,  R.  G.  Our  wasteful  industries.  Scientific  American,  May,  1922.  Pp.  2. 
A  study  of  wastes  contingent  upon  the  present  organization  of  the  metal  trade, 
boots  and  shoes,  textiles,  building,  and  men's  clothing  industries. 

Small,  A.  W.  The  category  "human  progress" — a  methodological  note.  Am. 
Journ,  Sociol.,  Sept.,  1922.  Pp.  28.  "This  note  proposes  a  formula  of  the  human 
process  developed  out  of  generalizations  of  attitudes  towards  wants  and  of  result- 
ing adjustments  of  values." 

Steinberg,  J.  Zur  Kritik  der  psychologischen  Theorie  von  Liefmann.  Archiv 
f.  Sozialwis.  u.  Sozialpolitik,  Aug.,  1922.  An  attempted  refutation  of  Liefmann's 
theory. 

Stolzmaxx,  R.  Liefmanns  rein-psychisches  System  der  Volkswirtschaft.  Jahrb. 
f.  Nationalok.  u.  Statistik,  1  Heft,  1922.     Pp.  36. 

Tawxey,  G.  a.  and  Talbeet,  E.  L.  Democracy  and  morals.  Journ.  Phil.,  March 
10,  1922.  Pp.  6.  A  defense  of  Dewey's  theory  of  democracy  against  attacks  by 
Cohen,  Sheldon  and  others. 

Tolmau",  E.  C.  The  moral  and  the  socially  desirable.  Univ.  of  Calif.  Chronicle, 
Jiily,  1922.     Pp.  2.     "We  must  trust  the  conclusion  of  the  trained  thinkers  in 


688  Periodicals  [December 

philosophy  and  sociology We  must  distinguish  between  short-run  claims  and 

the  long-run  satisfaction  of  the  fundamental  aptitudes  and  instincts  of  man 

We  must  run  the  risk  of  experimentation  and  failure  in  determining  the  nature 
of  these  instincts  and  the  methods  best  calculated  for  satisfying  them." 

TuGWELL,  R.  G.  Human  nature  in  economic  theory.  Journ.  Pol.  Econ.,  June,  1922. 
Pp.  29.  "We  cannot  know  what  it  is  that  we  want  for  humanity  or  for  industry 
without  knowing  what  the  nature  of  humanity  is  that  is  to  be  affected." 

Ward,  H.  F.  The  function  of  the  church  in  industry.  The  Annals,  Sept.,  1922. 
Pp.  5.  The  varied  views  of  the  church  "challenge  the  creative  energy  of  man  to 
unite  with  the  creative  spirit  of  the  universe  in  continually  developing  the  capacities 
of  humanity  for  living  together." 

Watkins,  G.  P.  Knight's  "Risk,  Uncertainty,  and  Profit."  Quart.  Journ.  Econ., 
Aug.,  1922.     Pp.  9.     A  review. 

Wrexford,  R.  J.  A  liractical  road  to  Utopia.  Nineteenth  Cent.,  July,  1922.  Pp.  12. 
"All  that  is  required  is  a  little  more  generosity  of  thought  and  a  little  more  toler- 
ance and  good  fellowship  among  classes." 

Wright,  P.  G.  Moore's  work  in  cycles:  a  review.  Quart.  Journ.  Econ.,  Aug.,  1922. 
Pp.  14.  A  review  of  Economic  Cycles:  Their  Law  and  Causes,  and  of  articles 
upon  the  cycle  appearing  in  the  Political  Science  Quarterly,  The  Journal  of  the 
Royal  Statistical  Society,  and  The  Quarterly  Jojirnal  of  Economics. 

LiMMERN,  A.  E.  The  problem  of  modern  industry.  Quart.  Rev.,  Apr.,  1922.  Pp. 
23.  A  comprehensive  review  of  the  literature  advocating  the  establishment  of 
government  in  industry.  Institutional  changes  are  necessary  to  save  the  industrial 
system. 

Democracy  and  leadership.  New  Statesman,  June  24,  1922.  Pp.  2.  The  democratic 
control  of  industry  is  premised  upon  a  solution  of  the  problem  of  the  selection  of 
leaders. 

The  economic  level.  New  Statesman,  May  27,  1922.  Pp.  2.  An  attempt  at  a  concept 
of  a  normal  condition  for  an  industry. 

A  "first  charge"  upon  industry.  New  Statesman,  July  15,  1922.  Pp.  2.  A  study 
of  wages  policy  in  terms  of  the  coal-mining  industry.     "To  recognize  laborers  as 

the  first  charge  upon  production is  quite   inconsistent  with capitalism 

and  with  the  first  principles  of  the  wage  system." 

Memorial  to  former  president  Henry  C.  Adams.  Am.  Econ.  Rev.,  Sept.,  1922. 
Pp.  16. 

On  payment  by  results.  New  Statesman,  June  3,  1922.  Pp.  2.  It  is  impossible  to 
isolate  the  laborer's  contribution  as  a  basis  for  the  payment  of  wages. 

Economic  History  (United  States) 

(Abstracts  by  Amelia  C.  Ford) 

Bek,  W.  J.  Followers  of  Duden.  Missouri  Hist.  Rev.,  July,  1922.  Pp.  28.  Sets 
forth  conditions  of  living  and  labor  among  the  early  German  settlers  in  Missouri. 
Continued  from  April  number. 

Bexedict,  W.  H.  Travel  across  New  Jersey  in  the  eighteenth  century  and  later. 
Proc.  of  the  N.  J.  Hist.  Soc,  April,  1922. 

Brittox,  W.  Pioneer  life  in  southwestern  Missouri.  Missouri  Hist.  Rev.,  July,  1922. 
Pp.  23.  Tells  of  farming,  soap-making,  and  freighting  on  the  plains  in  the  50's 
with  great  wagon  trains.     Continued  from  the  April  number. 

C.VRLSOX,  R.  W.  Some  experimental  and  historic  locomotives  of  the  Chicago  and 
Northwestern  Railroad.     Railway  and  Locomotive  Hist.  Soc,  Second  Bull.,  1921. 


1922]  Economic  History  (United  States)  689 

CtrsHiNG,  G.  H.  America's  coal  industry.  -Rev.  Rev.,  Sept.,  1922.  Pp.  12.  Treats 
of  methods  of  mining,  living  conditions  of  the  mines,  production  and  distribution, 
and  the  present  emergency  in  coal. 

Davexpoht,  E.  The  agricultural  development  of  Illinois  nince  the  Civil  War.  Trans- 
actions of  the  111.  State  Hist.  Soc,  1919.  Pp.  6.  Analyzes  the  chief  features 
of  the  third  stage  of  agricultural  progress,  the  land-acquiring  period,  of  the  last 
half  century  in  Illinois;  finds  that  the  farmers  themselves  are  the  leaders  in  all 
progress  made,  and  that  there  is  now  fLxed  in  their  minds  the  idea  of  a  permanent 
and  a  finished  agriculture. 

Erikssox,  E.  McK.  Sioux  City  and  the  Black  Hills  gold  ruxh.  Iowa  Journ.  Ilist. 
and  Pol.,  July,  1922.  Pp.  29.  Tells  of  the  steps  taken  by  the  business  men  of 
Sioux  City  to  secure  the  trade  of  the  gold  seekers,  as  an  outfitting  point  and  base 
of  supplies ;  of  the  transportation  companies  that  operated  until  forced  out  by  the 
railroads. 

Fisher,  C.  E.  The  rival  builders.  Railway  and  Locomotive  Hist.  Soc,  Second 
Bull.,  1921.     Concerns  the  Taunton  Locomotive  Works  and  William  Mason. 

Good-Knight,  A.  Wheat-raising  in  pioneer  Missouri.  Missouri  Hist.  Rev.,  July, 
1922.     Pp.  4.     Sketches  the  whole  process   from  sowing  to  grinding  at  the  mill. 

Gras,  N.  S.  B.  The  developments  of  metropolitan  economy  in  Europe  and  America. 
Am.  Hist.  Rev.,  July,  1922.  Pp.  14.  Metropolitan  rivalry  in  America  has  followed 
four  main  lines,  three  of  which  run  east  and  west,  and  one  north  and  south;  some 
centers,  notably  Baltimore  and  Cincinnati,  seem  to  be  declining  relatively;  Pitts- 
burg and  Detroit  "are  not  metropolitan  at  all  but  industrial  satellites." 

Harper,  R.  M.  Development  of  agriculture  in  upper  Georgia  from  1850  to  1880. 
Georgia  Hist.  Quart.,  March,  1922. 

Harrison,  M.  E.  Alien  land  legislation  on  the  Pacific  cocuit.  Am.  Bar  Assoc. 
Journ.,  Aug.,  1922.  Pp.  3.  Discusses  the  provisions  of  the  alien  land  acts  of 
California  and  other  western  states,  and  melliods  of  evasion ;  considers  "the 
efficacy  of  this  legislation  has  been  very  materially  impaired  by  two  recent  de- 
cisions," one  in  the  California  Supreme  Court  and  one  in  the  federal  court. 

HoYT,  H.  The  economic  future  of  the  United  States.  Administration,  Aug.,  1922. 
Pp.  7.  Believes  the  United  States  has  not  reached  the  apex  of  its  productive 
powers  but  that  the  curve  of  physical  production  will  continue  upward  during  the 
rest  of  the  century,  provided  the  American  people  extract  the  maximum  efficiency 
out  of  their  geological,  psychological,  mechanical,  and  financial  resources,  and 
maintain  a  proper  balance  between  all  factors  of  their  economic  life. 

JiLLSox,  W.  R.  Oil  and  gas  in  the  Big  Sandy  Valley.  Register  of  the  Kentucky 
State  Hist.  Soc,  May,  1922. 

McDowell,  M.  E.  A  quarter  of  a  century  in  the  stockyards  district.  Transactions 
of  the  111.  State  Hist.  Soc.  for  1920.  Pp.  12.  Relates  the  intolerable  conditions 
of  labor  in  the  stockyards  from  1894  to  1904,  and  the  struggles  of  the  wage  earners 
to  better  the  situation. 

Marks,  A.  E.  William  Murray,  trader  and  land  speculator  in  the  Illinois  country. 
Transactions  of  the  111.  State  Hist.  Soc.  for  1919.  Pp.  20.  Traces  Murray's 
activities  between  1768  and  1786  in  selling  merchandise  to  the  people  in  the  west, 
provisioning  the  garrison  at  Fort  de  Chartres,  and  buying  lands  in  Kentucky 
in  defiance  of  government  orders. 

Meters,  J.  A.  Finan  McDonald,  explorer,  fur  trader  and  legislator.  Washington 
Hist.  Quart.,  July,  1922.  Pp.  13.  A  collection  of  items  mentioning  the  various  trips 
and  Indian  encounters  of  this  veteran  fur  trader,  an  employee  first  of  the 
Northwest  Fur  Company,  later  of  the  Hudson  Bay  Company. 

MoRisox,  S.  E.  Boston  traders  in  Hawaiian  Islands,  1789-1823.  Proc  of  the  Mass. 
Hist.  Soc,  1920-21. 


690  Periodicals  [December 

Parish,  J.  C.  The  first  Mississippi  bridge.  Palimpsest,  May,  1922.  An  account 
of  the  first  bridge  built  across  the  river  at  Rock  Island. 

PuTN-AM,  G.  G.  Salem  vessels  and  their  voyages.  Essex  Inst.  Hist.  Collections, 
July,  1922.  Pp.  31.  Concluding  articles  on  the  Sumatra  trade;  shows  that 
Salem  captains  began  the  direct  trade  between  America  and  the  unknown  north- 
west coast  of  Sumatra  which  was  explored  and  charted  by  these  same  navigators. 

RiEGEL,  R.  E.  Federal  operation  of  southern  railroads  during  the  war.  Miss. 
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Stephenson,  M.  A  unique  railroad.  Register  of  the  Kentucky  State  Hist.  Soc, 
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mation as  to  prices  of  land  and  farm  products,  wages,  and  conditions  in  general 
in  Rochester,  New  York,  about  1835. 

Economic  History  (Foreign) 

Anderson,  B.  M.  America  and  Europe — our  interest  and  our  policy.  Chase  Econ. 
BuU.,  Aug.,  1922.     Pp.  19. 

Bakker,  G.  E.  Internationale  combinatie  in  de  ijzer-industrie.  De  Economist 
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Bennhoiu.     Die  deutsche  Kohlenlage.     SchmoUers  Jahrb.,  2  Heft,  1922.     Pp.  18. 

Bergmann,  G.  and  Selvi,  A.  Un  tentativo  di  realizzare  le  "presocializzazione": 
II  Consorzio  Nazionale  Cooperatlvo  per  I'Industria  Mineraria.  Rif.  Soc,  May- 
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industry  during  the  profound  industrial  unrest  in  Italy  that  followed  the  termina- 
tion of  the  war. 

Brun,  H.  The  resources  of  Italy  and  her  economic  outlook.  Finan.  Rev.  Rev., 
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Burns,  C.  D.  Domestic  effects  of  foreign  investment.  Intern.  Journ.  Ethics,  July, 
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Cali.o,  p.  a.  De  okonomiske  Forhold  i  Bonder jylland  i  Overgangstiden.  Nat.  ok. 
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Denmark  after  the  armistice. 

Davis,  J.  yi  sociological  interpretation  of  the  Russian  revolution.  Pol.  Sci.  Quart., 
June,  1922. 

Frankel,  E.     Germany's  industrial  parliament.     Pol.  Sci.  Quart.,  Sept.,  1922. 

GrjVs,  N.  S.  B.  The  development  of  metropolitan  economy  in  Europe  and  America. 
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Hobson,  J.  A.  Britain's  economic  outlook  on  Europe.  Journ.  Pol.  Econ.,  Aug.,  1922. 
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Ki.EiNE,-NATuor,  H.  De  bctaling  van  het  eerste  milliard  der  schadevergoedingen 
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1922]  Economic  History  (Foreign)  691 

Sept.,  1922.     Pp.  8.     Considers  the  payment  of  gold  marks   as   indemnity   to  the 
Allies  as  disastrous  to  the  economic  life  of  Germany. 

KoLiMA,   S.     The   influence   of    the    Great    War  upon   Japanese    national    economy. 
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KuwATA,    K.     Die    Genossenschaftshewegung    in    Japan.     Archiv    f.    Sozialwis.    u. 
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KusKE,  B.     Die  weUwirtschaftlichen  Anfdnge  Sibiriens  und  seiner  Nachbargebiete 
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Latouh,  C.  C.     The  economic  position  of  Finland.     Annalist,  July  21,  1922. 

DE     Laveleye,     Barox.     L'union     economique     belgi-luxemboiirgeoise.     Rev.     Econ. 
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Lavergne,  B.     L'essor  des  cooperatives  de  consommateurs  en  France  depuis  1913. 
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Lederer,  E.     Die  soziale  Krise  in  Oesterreich.     Archiv  f.  Sozialwis.  u.  Sozialpolitik. 
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Leggett,   H.     The   economic  problem   of  British   tropical   Africa.     United    Empire, 
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Lennard,  R.     The  alleged  exhaustion  of  the  soil  in  medieval  England.     Econ.  Journ. 
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LiEssE,  A.     La  reconstruction  economique  de  I'Europe  et  la  question  russe.     L'Econ. 
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LiJTGENS,  R.     Grundziige  der  Entwicklung  des  La  Plata-Gebietes.     Weltwirts.   Ar- 
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MacClintock,    S.     French    finances    and    economic    resources.     Journ.    Pol.    Econ., 
April,  1922.     Pp.  11. 

McFaxl,  R.  J.     Regulation  of  business  in  Canada.     Pol.  Sci.  Quart.,  June,  1922. 

Malcolm,  L.  W.  G.     Economic  minerals  in  the  British  Cameron.     United  Empire, 

Sept.,  1922. 
Martix,  p.  F.     Brazil  and  its  finances.     Finan.  Rev.  Rev.,  June,  1922.     Pp.  8. 
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Meynlvl,  E.     Etude  sur  Vhistoire  financiere  du  XVIe  si^cle.     Nouvelle  Rev.  Hist, 
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Morse,  H.  B.     The  supercargo  in  the  China  trade  about  the  year  1700.     Eng.  Hist. 
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Nart,  J.     El  suquesto  enriquedmiento  de  Espaha.     Rev.  Nacional  de  Econ.,  Tomo  X, 
1921.     Pp.  8. 

Payen,  E.     L'Algerie  en  1921-1922     L'Econ.  Fran?.,  Aug.,  1922. 

.     Les  cours  des  principales  valeurs,  1913,  1914,  ^920   et  1921.     L'Econ. 

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L'industrie   lyonnaise   pendant   Vann6e  1920;   les   premiers   effets   de   la 


crise  commerciale.     L'Econ.  Fran?.,  Dec.  31,  1921.     Pp.  2. 

Prato,  G.     La  politica  comercial   de   Italia  y   el  arancel   de  1.°    de  julio    de   1921. 
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Pribram,  K.     Deutscher  Nationalismus  und  deutscher  Sozialisinus.     Archiv  f.  Sozial- 
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.     Die  Sozialpolitik  im  neuen  Oesterreich.     Archiv  f.  Sozialwis.  u.  Sozial- 
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692  Periodicals  [December 


i 


Raffalovich,  a.  Le  marcM  financier  en  1921.  Journ.  des.  Econ.,  Jan.  15,  1922, 
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Ramm  Doman,  R.  a.  PoUtica  comercial  y  economica  en  el  mundo  despuSs  de  la 
guerra.     Rev.  de  Economia  Argentina,  Feb.,  1922.     Pp.  9. 

Rassmuss,  J.  E.     El  desarollo  de  la  industria  petrolifera  argentina  y  su  importancia    ; 
en  la  economia  mundial.     Rev.  de  Economia  Argentina,  July,  1922.     Pp.  35. 

Rogers,  A.  G.  L.     Was  rye  ever  the  ordinary  food  of  the  English?     Econ.  Journ.,   j 
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Russell,  F.  R.  The  international  position  of  Canada.  Commerce  Mo.,  Sept.,  1922. 
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ScHEUHER,  F.  L'industrie  horiogire  suisse  depuis  1918.  Zeitschr.  f.  Schweiz.  Stat.  u. 
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ScuiJLLEH,  R.  Wirtschaftliche  Bestimmungen  des  Friedensvertrages  von  Saint- 
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Sherwell,  G.  B.     The  financial  outlook  of  Mexico.     Bankers  Mag.,  Mar.,  1922. 

SiMOKDS,  F.  H.  Europe's  debt  tangle  and  America's  duty.  Am.  Rev.  Rev.,  Sept., 
1922.     Pp.  9. 

Sonne,  H.  C.  Some  present  aspects  and  problems  of  foreign  finance.  Bankers 
Mag.,  Feb.,  1922.     Pp.  7. 

Stiles,  C.  R.     Le  progr^s  britannique  en  psychologie  industrielle.     Journ.  des  Econ.,  ji 
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Struve,    p.     The    Russian    communistic    experiment.     Edinburgh    Rev.,    Oct.,    1921.  \'. 

Subercaseaux,  G.  Le  evolucion  contempordnea  de  la  politica  economica  de  las  Re- 
publicas  Americanas  hacia  el  nacionalismo  proteccionista.  Rev.  de  Economia  Ar- 
gentina, Jan.,  1922.     Pp.  12. 

Thompson,  J.  W.     Early  German-Slav  trade.     Journ.  Pol.  Econ.,  Aug.,  1922.  Pp.  15. 

ToNDELLi,   L.     Dai  servi  della  gleba  all  'allodio   obbligatorio   nel   libero   commune. 
Riv.  Intern.,  Aug.,  1922.     Pp.   16.     The  rise  of  agricultural  classes   in   the  years ' 
1000-1200. 

ToRNauisT,  E.  A.  La  Argentina  ante  los  problemas  economicos  internacionales.  Rev. 
de  Economia  Argentina,  Feb.,  1922.     Pp.  7. 

Ware,  S.  L.  Some  effects  of  the  Great  War  upon  France.  Sewanee  Rev.,  April- 
June,  1922.     Pp.  12. 

Weiner,  a.  Early  commercial  intercourse  between  England  and  Germany.  Econo- 
mica, June,  1922. 

Werner-Kautzsch.     Stinnes,  die  europiiische  gefahr.     Natur  u.  Gesells.,  Aug.,  1922.  T; 

.     Stinnes  oder  Rathenau?     Natur  u.  Gesells.,  May,  1922. 

Westermann,  W.  L.  Sources  and  methods  in  economic  history.  Pol.  Sci.  Quart., 
Mar.,  1922.     Pp.  15,  ' 

WioGLEswoRTii,  A.     The  fibre  industry  in  East  Africa.     United  Empire,  June,  1922.   | 

Yepes,  J.  G.     La  metalurgia  del  zinc  en  Espana.     Rev.   Nacional  de  Econ.,  Tomo   \ 
XI,  1921.     Pp.  12. 

YvEs-GuYOT.     Le  p4trole.    Journ.  des  Econ.,  April  15,  1922.     Pp.  18. 

La  politique  financiire  et  le  budget  de  1922.     Journ.  des  Econ.,  Dec.  15, 


1921.     Pp.  32. 


La  Russie,  I'Allemagne,  et  M.  Lloyd  George  a  la  Conference  de  Gines. 


Journ.  des  Econ.,  May  15,  1922. 


1922]  Agricultural  Economics  693 

Zagorsky^  S.     La  famine  russe  et  ses  causes.     Rev.  d'Econ.  Pol.,  Mar.-April,  1922. 

America  and  the  rehabilitation  of  Europe.     The  Annals,  July,  1922.     Pp.  207. 

Bollettino  di  statistica  del  coniune  di  Roma.  L'UflBcio  Munic.  del  Lavoro  di  Roma, 
Boll.  Mens.,  Dec,  1921.     Pp.  24.     Current  civil  and  economic  statistics  of  Rome. 

Des  conditions  necessaires  h  une  intervention  iconomique  en  Russie.  L'Econ.  Fran^., 
May  13,  1922. 

Credit  and  trade  in  1921.     Bankers'  Mag.   (London),  Feb.,  1922.     Pp.  8. 

Der  gegenwdrtige  Stand  der  deutschen  Kartellpolitik.  Kartell-Rundschau,  2  Heft, 
1922. 

Les  questions  de  change  et  de  credit  international  a  la  Conference  de  Genes. 
L'Econ.  Fran?.,  May  6,  1922. 

Rise  in  national  credit.     Bankers'  Mag.  (London),  1922.     Pp.  7. 

Some  aspects  of  the  problem,  of  the  inter-allied  debts  and  reparation  payments. 
Bankers  Mag.,  May,  1922. 

Agricultural  Economics 

(Abstracts  by  A.  J.   Dadisman) 

Akderson,  S.  The  farmer  and  the  raHways.  Journ.  Farm  Econ.,  July,  1922.  Pp.  7. 
The  problems  of  railway  transportation  and  suggested  solution  are  discussed. 

BoMBERGEE,  F.  B.  Marketing  farm  products  in  Maryland.  Md.  Sta.  Ext.  Bull.  22, 
Nov.,  1920.  Pp.  .57.  The  present  status  and  needs  of  marketing  in  Maryland; 
perishable  commodities  are  considered  in  particular. 

Cox,  H.  Changes  in  land  ownership  in- England.  Atlantic  Mo.,  April,  1922.  Pp.  7. 
A  discussion  of  "the  decay  of  agricultural  estates"  due  to  the  incidence  of  high 
taxes  with  the  "hackdom  of  custom,"  a  prop  to  the  rural  laborer's  interests. 

DuFOURMANTELLE,  M.  L' exploitation  en  commun  du  sol.  Ref.  Soc,  May,  1922. 
Pp.  16.     A  discussion  of  types  and  methods  of  collective  farming  in  Italy. 

HiBBARD,  B.  H.  The  effect  of  freight  rates  on  agricultural  geography.  Journ.  Farm 
Econ.,  July,  1922.  Pp.  8.  An  argument  in  favor  of  an  equitable  adjustment  of 
transportation  charges. 

Hunter,  B.  and  Nuckols,  S.  B.  Farm  costs  and  relative  profitableness  of  seven 
crops.  Idaho  Research  Bull.  2,  March,  1922.  Pp.  24.  An  analysis  of  the  costs 
of  producing  the  chief  crop  in  Twin  Falls  County,  Idaho,  for  1919  and  1920. 
Twenty-five  tables. 

Kallbrunner,  H.  Measures  taken  in  Austria  during  the  war  to  maintain  the 
supply  of  agricultural  labour.  Intern.  Rev.  Agri.  Econ.,  Mar.-Apr.,  1922.  Pp.  15. 
Details  of  the  various  methods  used  are  given. 

MisNER,  E.  G.  An  economic  study  of  dairying  on  149  farms  in  Broome  County,  New 
York.  Cornell  Sta.  Bull.  409,  April,  1922.  Pp.  172.  A  detailed  cost  study  dealing 
principally  with  the  problems  of  production.     Twenty-two  figures  and  143  tables. 

NoRSHAM,  C.  G.  and  Boss,  A.  Farm  development  studies  in  northern  Minnesota. 
Minn.  Sta.  Bull.  196,  Aug.,  1921.  Pp.  42.  A  description  of  the  farm  practice  and 
a  sum.mary  of  a  year's  business  on  197  farms  in  three  sections  of  northern  Minne- 
sota.    Twenty-nine  tables. 

Parmelee,  J.  H.  Farm  prices  and  railway  rates.  Journ.  Farm  Econ.,  July,  1922. 
Pp.  6.     An  analysis  of  the  problem  of  an  equitable  freight  rate  on  farm  products. 

Sanders,  J.  T.  Farm  ownership  and  tenancy  in  the  black  prairie  of  Texas.  U.  S. 
Dept.  Agri.  Bull.  1068,  May,  1922.     Pp.  60.     An  economic  study  of  the  various 


69-t                                                  Periodicals                                     [December  '! 

types  of  tenure.     Data  for  the  study  were  obtained  from  a  survey  of  368  farms.  : 
Thirty-five  tables  and  seven  figures. 

SiMABRO  Y  Puio,  A.  M.     De  las  ultimas  lunchas  agrarias  en  el  norte  de  Italia.     Rev,  J 

Nacional  de  Econ.,  Dec,  1922.     Pp.  17.     A  discussion  of  the  socialistic  movement,  sj 

as  applied  to  agriculture,  in  northern  Italy.  ■  j 

Taylor,   H.   C.     The  farmer's   economic   problem.     Kansas    State   Bd.    Agri.   Quart.  , 

Rpt.    39,    March,    1920.     Pp.    10.     An    argument    in    favor    of    cost-of-production  I 

studies,  and  uses  made  of  such  data.  \ 

WooTON,  E.  O.     The  relation  of  land  tenure  to  the  use  of  the  arid  grazing  lands  of  ^ 

the  southwestern  states.     U.  S.  Dept.  Agri.  Bull.  1001,  Feb.,  1922.     Pp.  72.  Methods  | 

of  managing  the  grazing  lands,  limitations,  results,  problems,  and  needs  are  dis-  v 
cussed.     Thirteen  tables,  six  figures  and  a  bibliography. 

Agricultural  credit  in  France  during  the  war.     Intern.  Rev.  Agri.  Econ.,  Mar.-Apr.,  j 

1922.     Pp.    6.     A   statement   of   the   uses    of   non-cooperative   credit    for    damages  /; 

resulting  from  the  war  and  for  cultivation  of  abandoned  lands.  i 

The  encouragement  of  agricultural  cooperation  in  Great  Britain  and  Ireland  during  h, 

and  since  the  war.     Intern.  Rev.  Agri.  Econ.,  Mar.-April,  1922.     Pp.  22.     A  state-  ! 

ment  of  financial  aid  given  by  the  state  to  the  promotion  of  agricultural  coopera-  i 

tion,  with  special  application  of  cooperative  methods  to  war-time  problems.  ' 

The  work  of   the   United  States    War  Finance   Corporation  in  aid  of  agriculture,  i 

Intern.   Rev.   Agri.   Econ.,   May,   1922.     Pp.    14.     History,   organization,   types   of  ( 
loans,  and  amounts  of  advances  of  the  War  Finance  Corporation.     Three  tables. 

Railways  and  Transportation  ij 

(Abstracts   by  Julius    H.   Parmelee)  ^'■ 

AcwoiiTir,  W.  M.     Comrmmication  costs  and   their  interdependence.     Econ.   Journ.,  ;< 

June,  1922.     Pp.  16.     How  costs  shall  be  charged  against  users  and  others,  in  the  f 
several   forms  of  rail,  motor,  and  water  transportation. 

Baker,  B.     Consequences  of  the  shop  strike  taking  shape.     Annalist,  Oct.  9,   1922.  J 
Pp.  2.     Terms  of  the  settlement  spell  virtual  victory  for  the  railways. 

.     Oovernment-made  labor  vionopolt/.     Annalist,  Aug.  14,  1922.     Pp.  2.    A  !i 

plea   for   cooperation    between    railway    managements    and    employees,    instead    of  ij 

national  treatment  of  labor  issues.  I 

I^ALTZKit,    F.     Die    Entwicklung    der    japanischen    Eisenbahnen.     Archiv    f.    Eisen-  ^ 

bahnw.,  July-Aug.,  1922.     Pp.  14.     Summary  of  Japanese  railway  progress  from  i 
1914  to  1919. 

Bargiif.kr,  H.     Die  Eisenbahnen  brasUiens.  Archiv  f.  Eisenbahnw.,  July-Aug.,  Sept.-  i 

Oct.,   1922.     Pp.   18,  23.     Historical   summary  of   railway   development   in   Brazil.  •! 
In  two  sections. 

Be.vhk,  T.  H.  Railway  problems  of  Australia.  Modern  Transport,  Sept.  23,  1922. 
Pp.  2.  With  map.  Need  of  uniform  gauge,  and  of  a  new  transcontinental  line 
from  north  to  south. 

BinniNs,  J.  R.  A  broad  survey  of  the  transportation  problem  in  the  United  States. 
Engineers  &  Engineering,  Aug.,  1922.     Pp.  5. 

BoKHLF.R,  E.  Die  englische  Eisenbahnpolitik  der  letzten  vierzig  Jahre  (1882-1922). 
Archiv  f.  Eisenbahnw.,  July-Aug.,  Sept.-Oct.,  1922.  Pp.  24,  37.  Third  and  fourth 
in  a  series;  first  two  noted  in  June  and  September  issues  of  the  Review. 

Bradford,   E.   A.     Seniority    rights   and   wrongs.     Annalist,   Aug.    28,    1922.     Pp.  2.  j 

Tlie  seniority  question  as  it  affects  different  classes  of  railway  employees.  , 

CoNi,  E.  a.     La  crisis  del  trdfico  ferroviario.     Rev.  de  Economia  Argentina,  May.  i 
1922.     Pp.  9. 


1922]  Railways  and  Transportation  695 

CuNNi>rGH^VM^  W.  J.  The  railroad  consolidation  plan.  I,  New  England.  Har- 
vard Bus.  Rev.,  Oct.,  1922.  Pp.  14.  The  first  in  a  series  on  railway  consolidation. 
Prefers  the  trunk  line  plan  to  the  New.  England  group  plan. 

Deole,  C.  S.  Economics  of  Indian  railways.  Journ.  Indian  Econ.  Soc,  Mar.,  1922. 
Pp.  14. 

FeidaYj  D.     RaHway  wages  and  the  farmer.     Rev.  Rev.,  Aug.  1922.     Pp.  3. 

GmETTi,  E.  Note  economische  sulla  elettrificazione  ferroviaria.  Rif.  Soc,  May- 
June,  1922.     Pp.  12. 

Hooper,  B.  W.  Strikes.  Sat.  Eve.  Post,  Oct.  14,  1922.  Railway  labor  situation 
analyzed  by  chairman  of  Railroad  Labor  Board. 

HuTCHixGS,  N.  Reducing  railroad  claims.  Administration,  Sept.,  1922.  Pp.  6. 
Principal  causes  of  railway  loss  and  damage. 

JosHi,  R.  M.     Indian  railway  finance.     Journ.  Indian  Econ.  Soc,  Mar.,  1922.     Pp.  7. 

Markham,  C.  H.  Complaints  or  compliments?  Nation's  Bus.,  Aug.,  1922.  Pp.  2. 
One  method  of  promoting  the  good  will  of  railway  patrons. 

Martinez,  J.  La  elevacion  de  las  tarifas  y  el  contrato  del  transporte  ferroviario. 
Rev.  Nacional  de  Economia,  Tomo  XII,  Num.  36,  1922.     Pp.  12. 

Neviks,  F.  J.  Seventy  years  of  service,  from  Grant  to  Gorman.  Rock  Island 
Mag.,  Oct.,  1922.  Pp.  43.  History  of  Rock  Island  System,  18-52-1922,  with  maps, 
statistics,  and  illustrations. 

Parmelee,  J.  H.  Farm  prices  and  railway  rates.  Journ.  Farm  Econ.,  July,  1922. 
Pp.  6.     The  problem  of  adjusting  freight  rates  to  business  conditions. 

Payen,  E.     Les  chemins  de  fer  marocains.     L'Econ.  Fran^.,  Sept.  30,  1922.     Pp.  3. 

Payne,  J.  L.  A  try  at  government  ownership.  Nation's  Bus.,  Aug.,  1922.  Pp.  3. 
Analysis  of  Canadian  situation. 

Peschaud,  M.  Statistical  returns  of  raihcay  companies  in  the  United  Kingdom. 
Bull.  Int.  Ry.  Assoc,  July,  1922.     Pp.  3.     Results   for   1920   analyzed. 

.  Steps  taken  by  the  Swiss  Federal  Railways  with  a  view  to  reestablish- 
ing their  financial  stability.  Bull.  Int.  Ry.  Assoc,  July,  1922.  Pp.  7.  Analysis 
of  recent  report  by  Federal  Council  on  traffic  prospects,  wage  and  price  trends, 
etc. 

Porte,  M.  Le  nouveau  regime  des  chemins  de  fer  francais.  Rev.  d'Econ.  Pol., 
May-June,  1922.     Pp.  34. 

Repaci,  F.  a.  II  "deficit"  delle  ferrovie  dello  stato.  Rif.  Soc,  Mar.-April,  1922. 
Pp.  43.  After  operating  at  a  profit  during  1915-1919,  the  Italian  state  rail- 
ways incurred  a  heavy  deficit  in  1919-1920.  The  causes  of  the  change  are  here 
carefully  analyzed. 

Sanchez,  T.  La  Ubertad  de  tarificar  en  la  legislaclon  ferroviaria  argentina.  Rev. 
de  Economia  Argentina,  June,  1922.     Pp.  15. 

Sharfman,  I.  L.  I'he  American  railroad  problem.  Quart.  Journ.  Econ.,  Aug., 
1922.  Pp.  14.  Reply  to  a  review  of  The  American  Railroad  Problem  by  H.  G. 
Brown. 

Smith,  H.  K.  The  Japanese  railways  and  their  operating  problems.  Ry.  Rev., 
Sept.  16,  1922.     Pp.  5.     With  map  and  illustrations. 

Sprague,  F.  J.     Automatic  train  control.     Journ.  Franklin  Inst.,  Aug.,  1922.     Pp.  32. 

Tingley,  R.  H.  The  federal  valuation  of  the  railroads.  New  Repub.,  Oct.  4,  1922. 
Pp.   3. 

.     The  battle  of  the  gauges.     N.  Y.  C.  Lines  Mag.,  Aug.,  1922.     Pp.  3. 


696  Periodicals  [December 

Vaile,  R.  Some  effects  on  certain  agricultural  products  of  uniform  percentage 
increases  in  freight  rates.  Quart.  Journ.  Econ.,  Aug.,  1922.  Pp.  10.  California 
citrus  fruits  as  an  example. 

Beginning  of  the  Bock  Island  System,  now  seventy  years  old.  Ry.  Rev.,  Oct.  7, 
14,  1922.     Pp.  8,  8.     Historical  sketch,  with  map  and  illustrations. 

Die  Betriebsergehnisse  der  funf  grossen  franzosischen  EisenbahngeseUschaften  in 
den  Jahren  1913  bis  1920.  Archiv  f.  Eisenbahnw.,  July-Aug.,  1922.  Pp.  20.  Sta- 
tistics of  the  five  great  French  railway  systems. 

Die  Eisenbahnen  des  Deutschen  Beichs,  1919  und  1920.  Archiv  f.  Eisenbahnw., 
Sept.-Oct.,  1922.     Pp.  8.     Statistical  tables. 

Die  Eisenbahnen  der  Erde  im  Jahr  1920.  Archiv  f.  Eisenbahnw.,  July-Aug.,  1922. 
Pp.  3.  Distribution  of  the  1,200,705  km.  of  world  railways  in  1920;  increase 
from  1,137,369  km.  in  1917. 

The  fall  in  raihimy  wages.  Ry.  Gaz.  (London),  July  21,  1922.  Pp.  3.  Wage 
changes  of  the  principal  groups  of  British  railwaymen. 

The  railroad  puzzle — then  and  now.  Savings  Bank  Journ.,  Aug.,  1922.  Pp.  5. 
Work  of  the  National  Association  of  Owners  of  Railroad  Securities. 

Railways  in  the  Hokkaido.  Far  East.  Rev.,  Sept.,  1922.  Pp.  3.  With  map  of  the 
northernmost  island  of  Japanese  main  group. 

Shipping 

(Abstracts  by  E.  S.  Gregg) 

Chamberlain,  E.  T.  Ocean  mail  contracts  for  the  United  Kingdom.  Commerce 
Reports,  July  31,  1922.  French  maritime  policy,  Aug.  7.  Norwegian  shipping 
subsidies,  Aug.  21.  Canadian  government  merchant  marine,  Sept.  4.  French 
South  American  mail  contract,  Sept.  11.  Japanese  shipping  bounties,  Sept.  25. 
Canadian  ocean  mail  subsidies,  Oct.  9.  This  series  of  articles  brings  to  date  the 
material  in  Grosvenor  Jones'  Government  Aid  to  Merchant  Shipping. 

CiiAPPELL,  F.  C.  International  shipping  position.  Annalist,  Oct.  10,  1922.  "Before 
there  can  be  any  real  revival  we  must  have  still  cheaper  production  and  more 
goods  to  carry  and  better  freights." 

Gregg,  E.  S.  The  influence  of  geographic  factors  on  ocean  shipping.  Geog.  Rev., 
July,  1922. 

-.     Survey  of  world  shipping,  first  half  1922.     Commerce  Reports,  Aug.  25, 


1922. 


Lasker,  a.  D.  Our  merchant  flag  on  the  seas.  Current  History,  Oct.,  1922.  P.  1. 
The  Shipping  Board's  case  for  the  proposed  subsidy  bill. 

M.vRciiETTi,  G.  Contributo  alio  studio  delle  linee  di  navigazione  sovvenzionate. 
Giorn.  d.  Econ.,  July,  1922.  Pp.  14.  Italian  subsidized  steamship  lines  in  the 
years  just  before  the  war. 

RiGGS,  S.  G.  Ship  subsidy  policies  of  foreign  governments— Oreat  Britain.  Annalist, 
Oct.  2,  16,  1922. 

WisiiART,  R.  W.  Some  economic  aspects  of  the  ship  subsidy.  Administration,  July, 
1922.  Advocates  creation  of  free  ports,  sale  of  Shipping  Board  fleet  for  what 
it  will  bring  in  the  open  market,  free  ship  policy,  and  revision  of  navigation  laws. 

Age  and  size  of  steam  and  motor  vessels.     Shipbuilding  &  Shipping  Record,  Sept.  28, 

r/fe  difficult  problem  of  the  American  merchant  marine  and  government  aid  therefor. 
Econ.  World,  July  8,  1922.     Reprinted  from  Commerce  Monthly,  July,  1922. 


1922]  Commerce  697 

The  merchant  marine  problem.  Commerce  Mo.,  July,  1922.  "The  outstanding  fact 
in  regard  to  the  need  of  government  assistance  for  the  American  merchant  marine 
is  that  the  need  cannot  be  accurately  m^easured  at  the  present  time." 

New  York  state  barge  canal  as  an  aid  to  foreign  trade.  Commerce  Reports,  June 
19,  1922. 

Steamers  and  motor  ships  compared.     The  Motor  Ship,  Oct.,  1922. 

Commerce 

(Abstracts  by  Harry  R.  Tosdal) 

Chambeelaix,  J.  P.  The  cooperative  marketing  act.  Am.  Bar  Assoc.  Journ.,  July, 
1922.  Pp.  2.  Brief  legal  discussion  of  cooperative  marketing  acts  passed  by 
state  legislatures. 

Cook,  A.  B.  Governmental  influence  in  foreign  trade.  Administration,  Aug., 
1922.  Pp.  5.  Takes  up  governmental  aid  and  regulation  including  non-financial 
factors — the  tariff,  consular  and  trade  service,  and  diplomatic  policy — as  well 
as  financial  factors — governmental  guarantees  in  England  and  the  work  of  the 
War  Finance  Corporation. 

Good,  E.  T.  The  trade  outlook — coal,  steel,  engineering  and  shipbuilding.  Finan. 
Rev.  Rev.,  Sept.,  1922.  Pp.  10.  States  that  "peace  and  stability  in  pits  and  shops, 
guaranteeing  of  generous  credits,  and  guarantee  of  steady  prices  and  regular 
delivery"  are  the  only  factors  necessary  to  furnish  employment  for  every  man 
and  machine  in  Great  Britain  and  to  bring  that  country  commercial  conquest. 

MrssEY,  H.  R.  The  new  normal  in  foreign  trade.  Pol.  Sci.  Quart.,  Sept.,  1922. 
Pp.  20.  Shows  part  investments  play  and  will  continue  to  play  in  America's 
foreign  trade. 

New,  R.  V.     The  American  lumber  industry  in  1922.     Annalist,  Jan.  30,   1922. 

Payejt,  E.  Le  coton:  sa  production  et  sa  consommation.  L'Econ.  Frang.,  Aug., 
1922.  Pp.  2.  Gives  prognostication  of  cotton  events  based  upon  figures  of  pro- 
duction and  consumption. 

.     Le  cuivre:  sa  production  et  son   marche.  L'Econ.     Fran^.,  July,  1922. 

P.  1.  Prices  of  copper  from  1880,  with  special  reference  to  1921  market  situa- 
tion. Predicts  rapidly  increasing  market,  limited  only  by  possible  large  price 
increases. 

RoBixsoN,  H.  J.  An  analysis  of  three  years  of  post-war  trade.  Bankers'  Mag. 
(London),  Aug.,  1922.  Pp.  32.  Statistical  analysis  by  countries  and  products 
of  British  exports  and  imports  for  1913  and  1919-21,  with  percentages. 

Tatloe,  a.  E.  Commercial  importance  of  Russia.  Am.  Econ.  Rev.,  Sept.,  1922. 
Pp.  13. 

ViDELA,  R.  El  comercio  de  los  productos  agricolas.  Rev.  de  Economia  Argentina, 
May,  1922.  Pp.  7.  Stresses  importance  of  eflBcient  marketing  of  agricultural 
products. 

Europe's  share  in  world  trade  before  the  war.  Econ.  World,  July  1,  1922.  Pp.  3. 
Reprinted  from  Commerce  Reports,  June  12,  1922.  Statistical  position  of  Europe 
in  pre-war  international  trade. 

Japan's  trade  in  cotton  and  wool  textiles.  Commerce  Mo.,  July,  1922.  Pp.  8. 
Shows  transition  of  Japan  from  position  of  "large  importer  of  textiles  to  an 
important  competitor  in  the  international  export  trade  in  these  goods." 

Trend  of  American  foreign  trade.  Commerce  Mo.,  Aug.,  1922.  Pp.  9.  Survey  of 
American  foreign  trade  since  1913  with  analysis  of  current  tendencies. 


698  Periodicals  [December 

Public  Utilities 

(Abstracts  by  Charles  S.  Morgan) 

Bahnett,  J.  D.  Fighting  rate  increases  by  the  recall.  Nat.  Munic.  Rev.,  July,  1922. 
Pp.  2.  Two  of  three  members  of  Oregon  Public  Service  Commission  recalled  for 
granting  what  appeared  to  be  unwarranted  rate  increases. 

Bauer,  J.  The  Bacharach  bill.  Nat.  Munic.  Rev.,  July,  1922.  P.  1.  Bill  now 
under  consideration  which  would  check  utilities  from  making  appeals  to  federal 
courts  without  first  seeking  redress  in  state  courts. 

Blood^  W.  H.,  Jr.  Going  concern  value  in  rate  cases.  Stone  &  Webster  Journ., 
Aug.,  1922.  Pp.  17.  Clear  statement  of  meaning  of  going  value  and  of  necessity 
of  recognizing  all  legitimate  "development  costs,"  with  citation  of  cases. 

DanA;,  E.  The  Boston  Elevated  Railway — four  years  under  public  control.  Elec. 
Ry.  Journ.,  Aug.  12,  1922.  Pp.  2.  Boston  Elevated  Railway,  controlled  since 
1918  by  a  board  of  public  trustees,  has,  by  careful  and  efficient  management, 
greatly  improved  its  financial  and  operating  condition. 

Dow,  A.  Rate  forms  should  he  minimized.  Elec.  World,  Oct.  14,  1922.  Pp.  2. 
Need  for  greater  simplicity  of  electric  rate  structures  and  for  greater  freedom 
for  use  of  business  judgment  in  establishing  rates. 

Greene,  W.  J.  Rural  electric  service  costs  analyzed.  Elec.  World,  Sept.  23,  1922. 
Pp.  3.     Factors  involved,  with  concrete  illustration. 

GnERNSEy,  N.  T.  Primary  power  to  make  rates  remains  in  utilities'  hands.  Public 
Service  Manag.,  Sept.,  1922.  Pp.  3.  The  commission  laws  "leave  in  the  utilities' 
hands  the  primary  power  to  make  their  rates,  subject  to  the  rule  governing  them 
at  common  law  and  reenacted  in  these  statutes,  that  their  rates  shall  be  just  and 
reasonable  and  not  discriminatory." 

Heil3ian,  R.  E.  Making  electric  railway  rates.  Aera,  Aug.,  1922.  Pp.  9.  A  clear 
statement  of  principles. 

Jackson,  C.  D.  The  interest  of  the  street  car  rider.  Elec.  Ry.  Journ.,  Oct.  7, 
1922.  Pp.  3.  To  maintain  electric  railways  at  highest  possible  standard  of 
usefulness  any  unnecessary  burdens,  such  as  paving  requirements  and  uncontrolled 
competition,  should  be  removed. 

Jackson,  W.  And  must  the  tramway  die?  Aera,  Aug.,  1922.  Pp.  3.  Recent  de- 
velopments in  Liverpool  and  Edinburgh  indicate  that  the  motor  bus  is  regarded 
as  a  means  of  developing  a  service  which,  upon  reaching  the  requisite  density, 
will  be  handled  by  tramwa,ys.  The  British  managers  "regard  themselves  as  trans- 
portation men  first,  last  and  always — not  as  proponents  for  any  particular  form 
of  propulsion." 

Jackson,  W.  Riding  on  a  pass.  Elec.  Ry.  Journ.,  Sept.  30,  1922.  Pp.  6.  Com- 
parison of  various  European  types  of  "contract  tickets"  as  to  their  objects  and 
effects,  with  the  types  of  weekly  or  monthly  pass  in  use  in  some  twenty  American 
communities.  "All  agree  that  it  (the  weekly  pass)  has  speeded  operation  and 
improved  good  will;  and  some  have  been  kind  enough  to  say  that  it  has  either 
protected  or  enhanced  their  revenue." 

Mabiage,  a.  Paris  tramways  during  the  war.  Elec.  Ry.  Journ.,  Aug.  5,  1922.  Pp. 
3.  Why  all  electric  railways  and  bus  lines  in  Paris  were  taken  over  by  the 
Department  of  the  Seine  and  description  of  lease  under  which  they  are  now 
privately  operated  by  a  single  company.  Particular  reference  to  methods  of 
eliciting  maximum  interest  on  part  of  management  and  workers. 

Merrill,  O.  C.  Why  go  back  in  the  power  laws?  Nation's  Bus.,  Sept.,  1922.  Pp.  2. 
Explanation  and  defense  of  federal  Water  Power  act  of  1920  by  executive  secre- 
tary of  Federal  Power  Commission. 


1922]  Public   Utilities  699 

Metcalf,  L.  Thp  improved  financial  condition  of  ivater  works  in  the  United  States. 
Journ.  Am.  Water  Works  Assoc,  Sept.,  1922.  Pp.  10.  Water  works  of  country 
are  past  the  period  of  acute  distress  due  to  the  war,  but  have  not  been  able  to 
recoup  the  cumulati%'e  losses  of  the  war  period  or  to  meet  the  requirements  which 
post-war  conditions  have  placed  on  them. 

Myers,  G.  L.  State-regulntion  justification.  Gas  Age-Record,  Aug.  19,  1922.  Pp.  3. 
Historical  development  of  commission  regulation. 

OvERTOx,  P.  The  regulation  of  municipally  owned  public  utilities.  Cornell  Law 
Quart.,  Apr.,  1922.     Pp.  3. 

Ready,  L.  S.  How  electric  rates  are  fixed  under  commission  regulation.  Journ.  of 
Elec,  July  15,  1922.  Pp.  3.  A  clear  explanation  of  how  commission  regulation 
works. 

RiGGs,  H.  E.  Public  utility  problems.  Am.  Gas  Assoc.  Mo.,  Apr.,  1922.  Pp.  6. 
Brief  statement  of  some  unsolved  utility  problems. 

ScHKAM,  R.  Detroit  takes  over  its  street  railways.  Nat.  Munic.  Rev.,  July,  1922. 
Pp.  5.  Steps  in  the  thirty-year  struggle  between  company  and  city,  resulting  in 
the  city's  acquisition,  by  construction  and  purchase,  of  363  miles  of  electric  rail- 
way. 

Steix3ietz,  C.  p.  The  soviet  plan  to  electrify  Russia.  Elec.  World,  Sept.  30,  1922. 
Pp.  5.     Description  of  proposed  superpower  system. 

Thiki.wall,  J.  C.  RaU  cars  cheapest  and  best.  Aera,  Oct.,  1922.  Pp.  6.  Con- 
cludes that  "for  all  routes  extending  into  the  business  center  of  large  or  medium 
size  cities,  the  rail  car  offers  the  most  efficient  and  most  economical  form  of 
transportation;  for  suburban  feeder  and  crosstown  service,  the  trolley  bus  will 
be  the  most  suitable  vehicle;  and  that  only  special  conditions  that  prevent  the 
erection  of  an  overhead  line  would  justify  the  use  of  gasoline  buses  inside  the 
city  limits." 

TiMM,  W.  H.  Present-day  responsibilities  of  public  utility  accountants.  Elec.  Ry. 
Journ.,  Oct.  7,  1922.  Pp.  i.  Secretary  of  New  Hampshire  commission  discusses 
the  development  of  public  utility  accounting,  its  contributions  to  proper  regula- 
tion and  some  of  its  unsolved  problems. 

Wheeler,  E.  P.  The  Bacharach  bill  criticized.  Nat.  Munic.  Rev.,  Sept.,  1922. 
P.  1.     Reply  to  article  by  Bauer,  cited  above. 

WooTAx,  J.  B.  Power  to  regulate  involves  obligation  to  protect.  Public  Service 
Manag.,  Aug.,  1922.  Pp.  2.  Reasoning  here  applied  to  railroads  equally  applic- 
able to  other  public  service  corporations. 

.     Why  public  utility  stock  is  not  watered.     Pub.  Service,  Manag.,  Oct., 

1922.     P.  1.     Regulation  and  good  business  judgment  prevent. 

Commission  rebukes  political  interference.     Pub.  Service  Manag.,  May,  1922.     P.  1. 

California  Railroad  Commission,  in  reply  to  governor,  states  that  it  "believes 

the  only  way  it  can  secure  or  retain  public  approval  is  by  being  fair  and  just. 
If  it  must  choose  between  the  right  and  being  temporarily  unpopular,  it  must 
choose  being  right." 

New  fare  plan  in  Louisville.  Aera,  Oct.,  1922.  Pp.  3.  A  modified  service-at-cost 
franchise  has  been  adopted,  with  a  sliding  scale  relationship  between  dividends 
payable  on  common  stock  and  rate  of  fare  charged. 

Problems  of  interurban  roads.  Aera,  Aug.,  1922.  Pp.  6.  Symposium  of  views  of 
managers  of  important  interurban  roads  as  to  means  whereby  loss  of  traffic,  par- 
ticularly short-haul,  can  be  overcome — a  problem  of  furnishing  attractive  service 
and  of  securing  proper  regulation  of  the  commercial  automobile. 

Railway  finances  improving.     Elec.  Ry.  Journ.,  Aug.  5,  1922.     Pp.  2.     Evidences  of 


700  Periodicals  [December 

and  reasons  for  the  present  gradual  recovery  of  electric  railways  from  the  diffi- 
culties of  the  years  1915-1920. 

Rate  decision  afecting  transmission.  Elec.  World,  July  29,  1922.  Pp.  2.  Wiscon- 
sin Supreme  Court  decides  aganist  state  commission's  practice  of  considering  an 
interconnected  generating  and  transmission  system  as  a  unit,  saying  such  treat- 
ment results  in  disproportionate  burden  being  put  on  cities  nearest  the  source 
of  supply. 

Recent  parliamentary  investigation  of  the  telephone  situation  in  Great  Britain. 
Bell  Telephone  Quart.,  July,  1922.  Pp.  16.  Abstracts  from  and  comment  on 
recent  report  of  select  committee,  in  which,  among  other  things,  greater  adapta- 
tion of  rates  to  local,  particularly  rural,  areas,  and  separation  from  the  post  office, 
are  recommended. 

Report  of  executive  secretary.  Aera,  Oct.,  1922.  Pp.  27.  Description  of  activities 
of  American  Electric  Railway  Association,  with  list  of  special  compilations  made 
on  a  great  variety  of  aspects  of  electric  railway  operation  and  finance. 

The  "sliding  scale"  in  practice.  Gas  Age-Record,  July  8,  1922.  Pp.  4.  Various 
meanings  of  the  term:  sliding  scale  of  dividends,  as  in  Boston,  variation  of  rates 
with  cost  of  coal  or  oil,  and  sliding  scale  upwards,  used  to  bring  about  a  more 
equitable  distribution  of  the  limited  supply  of  natural  gas. 

The  telephone's  development.  Bell  Telephone  Quart.,  Apr.,  1922.  Pp.  15.  History 
of  developments  of  telephone  and  telephone  business  from  small  beginnings  fifty 
years  ago. 

The  world's  largest  municipal  distributor  of  electricity.  Am.  City,  Oct.,  1922.  P.  1. 
City  of  Los  Angeles  has  recently  acquired  a  large  private  jjlant  and  now  serves 
two  thirds  of  its  citizens. 

Accounting 

(Abstracts   by   Martin   J.   Shugrue) 

AsiiDONN.  C.  S.  Treatment  of  foreign  exchange  in  bank-office  accounting.  Journ. 
Account.,  Oct.,  1922.     Pp.  18.     A  concrete  explanation. 

Beaujox,  a.  L.  Accounting  for  a  printing  and  bookbinding  business.  Journ. 
Account.,  Aug.,  1922.     Pp.  9. 

Bennett,  C.  W.  The  cost  audit.  Journ.  Account.,  July,  1922.  Pp.  9.  As  a  means 
of  eliminating  errors  and  assuming  maximum  results  from  cost  installation,  the 
cost  audit  has  been  developed. 

BmDLE,  R.  Handling  factory  costs.  Factory,  Aug.,  1922.  Pp.  2.  How  one  com- 
pany handles  its  cost  records  without  very  much  red  tape. 

BiNST,  G.  B.  Purposes  and  limitations  of  a  balance-sheet  audit.  Journ.  Account., 
Sept.,  1922.     Pp.  8. 

Breyer,  E.  W.  Budget  system  for  department  stores.  Pace  Student,  July,  1922. 
Pp.  2.     Outlines  budget  for  retail  operating  expenses  and  sales. 

Denham,  R.  S.  Engineering  methods  applied  to  cost  finding.  Indus.  Manag., 
Sept.,  1922.  Pp.  5.  The  factory  survey  and  expense  distribution.  The  concluding 
paper  of  a  series. 

Eliel,  P.  Uniform  accounting  for  municipal  and  private  utilities.  Journ.  Elec- 
tricity and  Western  Industry,  June  1,  1922.     Pp.  2. 

Finney,  H.  A.  Reserves.  Journ.  Account.,  Oct.,  1922.  Pp.  13.  Great  confusion 
exists  in  the  use  of  this  term  at  present.     Suggestions  offered  to  solve  the  difficulty. 

Frrcii,  S.  G.  Present-day  problems  in  iruhistrial  accounting.  Journ.  Account.,  July, 
1922.     Pp.  9. 


1922]  Business  Management  701 

GooDLOE,  J.  S.  M.  Constructive  accounting.  Administration,  Aug.,  1922.  Pp.  7. 
Non-technical  explanation  of  the  fundamentals  on  which  are  based  the  construction 
of  accounts  for  every  kind  of  business. 

Hodges,  B.  W.  Trial-balance  information.  Journ.  Account.,  July,  1922.  Pp.  2. 
When  monthly  profit  and  loss  statements  are  impractical  the  trial  balance  can  be 
arranged  so  as  to  yield  much  information  for  the  executive. 

Knauth,  O.  W.  The  place  of  corporate  surplus  in  the  national  income.  Journ. 
Am.  Stat.  Assoc,  June,  1922.  Pp.  9.  The  policy  of  corporations  in  retaining 
part  of  their  earnings  leads  to  important  national  savings.  These  savings  con- 
stitute about  one  fourth  of  total  savings,  and  about  4  per  cent  of  the  national 
income. 

Lazahus,  a.  Cost  accounting  and  cost  accountants.  Administration,  Aug.,  1922. 
Pp.  8.     An  inspiring  survey  of  the  field  of  cost  accounting  and  its  accomplishments. 

LicHTXER,  W.  O.  Effect  of  rate  setting  on  labor  costs.  Indus.  Manag.,  Sept.,  1922. 
Pp.4. 

Meixhardt.  Accounting  for  a  Portland  cement  rnill.  Journ.  Account.,  Sept.,  1922. 
Pp.  8. 

MoTJi-TON,  H.  G.  The  Danner-Kraft  Dry  Goods  Company.  Journ.  Pol.  Econ.,  Aug., 
1922.  Pp.  14.  Credit  problem  for  class  use.  Contains  complete  information 
about  a  wholesale  dry  goods  concern  which  has  applied  for  a  loan.  Ends  with  a 
series  of  14  questions  to  be  answered  by  student. 

ScovELL,  C.  H.  Treating  interest  as  a  cost.  Factory,  Aug.,  1922.  Pp.  2.  The  July 
number  of  Factory  contained  Henry  Ford's  new  idea  that  interest  should  not 
properly  be  included  in  costs.  In  the  present  article  a  leading  exponent  of  the 
other  side  of  the  question  presents  his  views. 

WiEGAXD,  W.  B.  Fire  insurance  company  accounting,  II-IV.  Administration,  July, 
Aug.,  Sept.,  1922.  Pp.  7,  12,  10.  II,  Ledger  assets  and  permissible  investments. 
HI,  Determination  of  a  company's  obligation  to  (1)  policyholders  and  (2)  other 
individuals  and  firms.  IV,  The  annual  financial  statement  required  to  be  filed 
with  the  state  supervisory  officials  by  fire  insurance  companies  consists  of  a  state- 
ment of  income  and  disbursements  followed  by  a  balance  sheet. 

Office  records  and  accounting.  Journ.  Am.  Water  Works  Assoc,  July,  1922.  Pp.  5, 
Office  records  and  methods  for  water  companies. 

Simplified  accounting  for  the  small  plant.  Indus.  Manag.,  Aug.,  1922.  Pp.  6.  Book- 
keeping procedure  recommended  by  the  National  Association  of  Credit  Men. 

Business  Management 

Douglas,  P.  H.  Personnel  problems  and  the  business  cycle.  Administration, 
July,  1922. 

Feldmax,  H.  Outstanding  features  of  Dennison  management.  Indus.  Manag., 
Aug.,  Sept.,  1922.     Pp.  2,  6. 

Frankxix,  B.  a.  Training  and  inspiring  organization  personnel.  Indus.  Manag., 
Aug.,  1922.     Pp.  5. 

Hodge,  A.  C.  Bases  of  control  for  retail  inventory.  Journ.  Pol.  Econ.,  Aug.,  1922. 
Pp.  7. 

KiTsox,  H.  D.  The  growth  of  the  "service  idea"  in  selling.  Journ.  Pol.  Econ., 
June,  1922. 

LixK,  H.  C.     The  training  of  foremen.     Administration,  July,  1922. 

LuNT,  E.  C.     Surety  bonds  in  business.     Administration,  Sept.,  1922.     Pp.  9. 


702  Periodicals  [December 

McKiNSEY,  J.  O.  Organization  and  methods  of  the  Walworth  Manufacturing 
Company.     Journ.  Pol.  Econ.,  June,  1922. 

SuMMERFiELD,  S.  E.  Direct  selling  as  a  sales  policy.  Administration,  Aug.,  1922. 
Pp.  4. 

Truesdai-e,  M.  O.  Personal  relations  in  scientific  management.  Administration, 
July,  1922. 

Wilson,  J.  H.  The  function  of  sales  management.  Administration,  Aug.,  1922. 
Pp.  5. 

Proceedings  of  the  seventh  annual  convention  of  the  National  Association  of  Pur- 
chasing Agents,  Rochester,  May  15-20,  1922.  Purchasing  Agent,  June,  1922.  Pp. 
80. 

Variotis  textile  labeling  bills  introduced  into  state  legislatures.  Bull.  Nat.  Assoc, 
of  Wool  Manufacturers,  July,  1922. 

Labor  and  Labor  Organizations 

(Abstracts  by  David  A.  McCabe) 

AiYANGAR,  S.  S.  Minimum  wage  in  South  India.  Wealth  of  India,  June,  1922. 
Pp.  7.     Suggested  minimum  subsistence  rates,  arrived  at  by  budget  computations. 

Allen,  H.  J.  The  Kansas  Court  of  Industrial  Relations.  Administration,  Sept., 
1922.     Pp.  3. 

Baker,  B.  The  basis  of  railroad  wage  settlements.  Annalist,  July  3,  1922.  Pp.  2. 
Argues  in  favor  of  taking  the  rates  paid  for  similar  work  in  outside  industries 
as  the  basis. 

.     The  new  railroad  shop  rates.     Annalist,  June  12,  1922.     Pp.  2. 

Railroad  wages  and  cost-of-living   budgets.     Annalist,   June   19,   1922. 


Pp.  2. 

Barker,  J.  E.  British  trade  unions.  Forum,  July,  1922.  Pp.  10.  The  policies 
of  trade  unions  are  the  principal  cause  of  the  decline  of  British  industry. 

Beals,  C.     The  Fascist  labor  movement  in  Italy.     Nation,  Oct.  4,  1922.     Pp.  2. 

Berridge,  W.  a.  Cycles  of  employment  and  unemployment  in  the  United  States. 
Journ.  Am.  Stat.  Assoc,  June,  1922.  Pp.  5.  Presents  an  index  of  employment 
and  compares  it  with  indexes  of  production. 

Bezanson,  a.  Skill.  Quart.  Journ.  Econ.,  Aug.,  1922.  Pp.  20.  Discussion  of  the 
various  elements  that  constitute  skill  and  a  comparison  of  different  kinds  of  work 
from  the  standpoint  of  the  skill  required. 

Brandeis,  E.  Minimum  wage — mercantile  wages  in  the  District  of  Columbia. 
Mo.  Labor  Rev.,  Aug.,  1922.  Pp.  2.  The  reconvened  conference  for  this  in- 
dustry voted  not  to  reduce  the  minimum  wage.  The  considerations  leading  to 
this  action  are  outlined  by  the  secretary  of  the' Minimum  Wage  Board. 

Brisson,  M.  La  lot  de  huit  heures  dans  les  chemins  de  fer  et  la  marine.  Journ. 
des  Econ.,  April  15,  1922.  Pp.  (5.  The  general  eight-hour  law  is  based  on  a 
fallacy.  It  is  especially  impracticable  on  the  railroads  and  in  the  merchant 
marine. 

Brophy,  J.  The  miners'  program.  New  Repub.,  Aug.  9,  1922.  Pp.  2.  Author  is 
one  of  the  leading  exponents  of  the  program  of  nationalization. 

Calder,  J.  Experience  with  employees'  representation  during  business  depression. 
Indus.  Manag.,  Aug.,  1922.  Pp.  5.  The  writer  is  manager  of  industrial  rela- 
tions, Swift  &  Company. 


1922]  Labor  and  Labor  Organizations  703 

Clabk,  L.  D.  Rights  and  status  of  employees  injured  in  commerce.  Mo.  Labor 
Rev.,  Aug.,  1922.     Pp.  11. 

Crick,  W.  F.  Legal  aspects  of  the  trade  union  movement  in  the  U.  S.  A.  Econo- 
mica,  June,  1922.     Pp.  8. 

Debet,  K.  and  Douglas,  P.  H.  The  minimum  wage  in  Canada.  Journ.  Pol.  Econ., 
April,  1922.  Pp.  34.  A  record  and  appraisal  of  the  several  acts  and  of  the 
rulings  based  upon  them. 

Douglas,  P.  H.  Personnel  problems  and  the  business  cycle.  Administration,  July, 
1922.     Pp.  14. 

Falcot,  E.  La  revision  de  la  loi  de  huit  heures.  Monde  Econ.,  Aug.,  1922.  Pp.  2. 
The  general  eight-hour  law  must  be  modified  in  the  Interest  of  increased  pro- 
duction. 

Fbankel,  E.  The  German  works  councils.  Administration,  July,  1922.  Pp.  4. 
The  degree  of  control  given  the  workers  and  the  relations  between  the  councils 
and  the  trade  unions. 

Fran KFUETEK,  F.     Child  labor  and  the  court.     New  Repub.,  July  26,  1922.     Pp.  3. 

.     The  Coronado  case.     New  Repub.,  Aug.  16,  1922.     Pp.  3. 

Friday,  D.     Railway  wages  and  the  farmer.     Am.  Rev.  Rev.,  Aug.,  1922.     Pp.  3. 

Fuller,  R.  G.     Child  labor  and  federal  legislation.     Rev.  Rev.,  July,  1922.     Pp.  3. 

Gadsby,  M.  Development  of  collective  bargaining  in  the  men's  clothing  industry  in 
the  United  States.     Mo.  Labor  Rev.,  June,  1922.     Pp.  16. 

Gloeieux,  a.  Les  greves  r4centes  de  Roubaix-Tourcoing.  Ref.  Soc,  May,  1922. 
Pp.  35.  The  causes  of  the  three-months  textile  strike,  with  emphasis  on  the  part 
played  by  the  Christian  union.  A  paper,  followed  by  discussion  in  which  the 
secretary  general  of  the  Confederation  Frangaise  des  Travailleurs  Chretiens 
participated. 

Glyxx,  F.  L.  The  American  boy's  chance — New  York's  apprenticeship  system  for 
the  building  trades.     The  Constructor,  June,  1922.     Pp.  2. 

Good,  E.  T.  Trade  unionism.  Finan.  Rev.  Rev.,  June,  1922.  Pp.  8.  The  trade 
union  ballot  and  the  political  levy  must  be  reformed  if  the  manipulation  of  British 
trade  union  policy  by  a  revolutionary  minority  is  to  be  ended. 

Geeexwood,  a.     The  labour  crisis — a  labour  view.     Contemp.  Rev.,  July,  1922.  Pp.  8. 

Haxsex,  a.  H.  The  economics  of  unionism,  Journ.  Pol.  Econ.,  Aug.,  1922.  Pp. 
13.  Restriction  of  individual  output  increases  marginal  significance  of  labor 
just  as  does  restriction  of  numbers. 

Hapgood,  W.  p.  The  high  adventure  of  a  cannery.  Survey,  Sept.  1,  1922.  Pp.  5. 
Successful  experience  with  workers'  sharing  in  management,  described  by  the 
president  of  the  Columbia  Conserve  Company. 

HoFFiiAX,  F.  L.  Dust  phthisis  in  the  printing  industry.  Mo.  Labor  Rev.,  Sept., 
1922.  Pp.  13.  Extracts  from  and  comment  on  correspondence  in  London  Times 
on  this  subject. 

KiRCHWEY,  F.  "Mountaineers  shall  always  be  free."  Nation,  July  12,  1922.  Pp.  3. 
Conditions  in  New  River  coal  field,  West  Virginia. 

Ley3iaxx,  Dr.  The  eight-hour  day  and  the  problem  of  overtime  in  Germany. 
Intern.  Lab.  Rev.,  Sept.,  1922.  Pp.  7.  The  eight-hour  maximum  is  being  generally 
observed. 

LiEssE,  A.  La  journee  de  huit  heures:  les  resultats  d'uns  enquete;  re  forme  neces- 
saire.  L'Econ.  Franc.,  July,  1922.  Pp.  3.  The  evil  efi"ects  of  the  adoption  of  the 
eight-hour  day. 


704  Periodicals  [December 

Lindsay,  S.  McC.  The  twelve-hour  day  and  the  engineers.  Survey,  Sept.  16,  1922. 
Pp.  4.     The  findings  of  the  Engineering  Societies  Committee. 

Little,  H.  The  evil  of  unemplot/ment:  a  skilled  labourer's  point  of  view.  Nine- 
teenth Cent.,  Oct.,  1922.     Pp.  8*. 

Lloyd,  M.  G.  Prej)aration  of  safety  codes  under  the  auspices  of  the  American 
Engineering  Standards  Committee.  Mo.  Labor  Rev.,  Sept.,  1922.  Pp.  8.  Writer 
is  chief  of  safety  section,  U.  S.  Bureau  of  Standards. 

Macaha,  C.  W.  The  industrial  situation.  Nineteenth  Cent.,  July,  1922.  Pp.  12. 
A  sclieme  for  reform.  "The  workers  would  insist  in  finding  the  capital  to  run 
the  industries  in  which  they  are  employed,  and  their  leaders  would  as  a  conse- 
quence have  a  right  to  share  in  the  control  of  the  industries." 

Macassey,  L.  International  labor  legislation.  Journ.  Comp.  Legis.  and  Intern.  Law, 
Feb.,  1922.     Pp.  10. 

Mansbridge,  a.  The  Workers'  Educational  Association  of  Or  eat  Britain.  Intern. 
Labour  Rev.,  Sept.,  1922.     Pp.  10. 

Maurer,  J.  H.     Labor's  demand  for  its  own  schools.     Nation,  Sept.  20,  1922.     Pp.  3. 

Meade,  J.  P.  Problems  and  importance  of  factory  inspection.  Mo.  Labor  Rev., 
July,  1922.  Pp.  11.  Writer  is  director,  Division  of  Safety,  Department  of  Labor 
and  Industry  of  Massachusetts. 

Mitchell,  W.  C.  The  wages  of  American  industrial  workers  considered  in  rela- 
tion to  the  national  production.  Econ.  World,  June  17,  1922.  Pp.  4.  Reprinted 
from  N.  Y.  Evening  Post,  June  7,  1922. 

Parkinson,  T.  I.  Child  labor  and  the  Constitution.  Am.  Labor  Legis.  Rev.,  June, 
1922.     Pp.  4. 

PiCARD,  R.  La  lutte  contre  le  chomage.  Des  Documents  du  Travail,  July,  1922. 
Pp.  13.  Review  of  methods  of  dealing  with  unemployment  in  the  first  months 
of  1922. 

Pound,  A.  Mills  and  minds — sotne  observations  on  the  influence  of  specialization 
and  repetitive  processes  on  the  minds  of  workers.  Bull.  Taylor  Soc,  June,  1922. 
Pp.  16.     A  paper,  followed  by  discussion. 

Rager,  F.  Aus  der  Praxis  der  osterreichischen  Arbeiterkammern.  Archiv  f. 
Sozial  wis.  u.  Sozialpolitik,  Aug.,  1922.  Pp.  20.  Describes  the  organization  and 
activities  to  date  of  the  seven  workers'  assemblies  and  points  out  the  difference 
between  their  functions  and  those  of  the  works  councils. 

Rato,  a.  El  problema  del  salario  minimo.  Rev.  Nacional  de  Econ.,  July,  1922. 
Pp.  28.  A  summary  of  minimum  wage  legislation  in  the  other  European  coun- 
tries. 

Ripley,  W.  Z.  Loading  the  olive  branch.  Survey,  Sept.  1,  1922.  Pp.  9.  Prob- 
lems in  industrial  arbitration  and  suggestions  as  to  how  they  should  be  met. 
Based  largely  on  the  experience  of  the  writer  as  an  arbitrator. 

Ryan,  J.  A.  and  Johnson,  F.  E.,  editors.  Industrial  relations  and  the  churches. 
The  Annals,  Sept.,  1922.     Pp.  143.     A  symposium  of  twenty-nine  papers. 

Ryan,  J.  A.  Some  problems  of  minimum  wage  legislation.  Catholic  Charities 
Rev.,  Sept.,  1922.     Pp.  5.     The  lessons  of  experience. 

Sargent,  N.  "Insurance"  against  unemployment.  Penna.  Mfrs.  Journ.,  Aug.,  1922. 
Pp.  2.  The  universal  adoption  of  an  open  shop  policy  would  bring  universal 
employment. 

.     The    open    shop — an    economic    discussion    and    a    statistical    analysis. 

The  Constructor,  June,  1922.     Pp.  5.     The  writer  is  manager.  Open  Shop  Depart- 
ment, National  Association  of  Manufacturers. 


1922]  Money,  Prices,  Credit,  and  Banking  705 

SouLE,  G.     Some  uses  of  arbitration.     Survey,  Aug.  15,  1922.     Pp.  2. 

Stewaht,  E.  Efficiency  of  American  labor.  Mo.  Labor  Rev.,  July,  1922.  Pp.  12. 
Difficulty  of  arriving  at  conclusions  from  the  figures  available. 

Stoddard,  W.  L.  Industrial  courts,  collective  agreements,  of  what?  Administra- 
tion, Sept.,  1922.  Pp.  8.  Industrial  peace  cannot  be  secured,  whatever  the 
method,  unless  the  attitude  of  mind  of  the  parties  is  right. 

.     The  labor  market — a  glance  ahead.     Administration,  Aug.,   1922.     Pp. 

3.     The  workers  will  successfully  resist  further  wage  reductions   until   the   cost 
of  living  is  appreciably  lowered. 

Stolberg,  B.  Labor  and  the  Rail  Labor  Board.  New  Repub.,  July  5,  1922.  Pp.  2. 
Review,  unfavorable  to  the  Board,  of  events  leading  up  to  the  shopmen's  strike. 

Tawxey,  R.  Minimum  wage  in  Oreat  Britain.  New  Repub.,  June  28,  1922.  Pp.  3. 
Comment  on  report  of  a  commission  of  inquiry.  The  results  of  experience  are 
favorable  to  the  wages  board  plan. 

Truesdai,e,  M.  O.  Personal  relations  in  scientific  management.  Administration, 
July,  1922.  Pp.  6.  Industrial  representation  and  labor  relations  in  the  Joseph 
and  Feiss  clothing  factory. 

Teitmanx,  M.  The  Christian  social  movement  and  international  labour  legislation. 
Intern,  Lab.  Rev.,  July,  1922.     Pp.  8. 

TuHXER,  V.  B.  Agricultural  wages  and  wage  earners  in  Norway  and  Sweden.  Mo. 
Labor  Rev.,  Sept.,  1922.     Pp.  15. 

Ttneside.     The  manufacture  of  the  "work-shy."     National  Rev.,  July,  1922.     Pp.  14-. 

Wahbasse,  J.  P.  Coal  for  consumers.  New  Repub.,  July  2G,  1922.  Pp.  3.  The 
writer  is  president  of  the  Cooperative  League  of  America.  Argues  against  na- 
tionalization and  for  ownership  of  the  mines  by  the  consumers. 

WoLL,  M.  The  war  against  trade  unions.  Forum,  Sept.,  1922.  Pp.  6.  A  trade 
union  officer  charges  that  shop  committees  are  an  employers'  subterfuge. 

WoLMAX,  L.  Fact  finding.  New  Repub.,  Sept.  20,  1922.  Pp.  2.  Advocates  a 
commission  in  the  coal  industry  with  permanency  of  tenure  and  authority  to  frame 
a  comprehensive  program  of  reorganization. 

Arbetsloshetsfrdgan  vid  1922  drs  riksdag.  Soc.  Med.,  no.  7,  1922.  Pp.  8.  The 
third  and  final  instalment  of  an  article  on  the  question  of  unemployment  before 
the  1922  parliament  in  Sweden. 

Employee  representation  on  the  Pennsylvania.     Ry.  Age,  Oct.  14,  1922.     Pp.  7. 

Employment  exchanges  and  their  organization.  Intern.  Lab.  Rev.,  July,  1922.  Pp. 
19. 

Money,  Prices,  Credit,  and  Banking 

(Abstracts  by  N.  R.  Whitney) 

Aguirre,  S.  M.  Estudio  acerca  de  la  circulacion  monetaria  y  de  sus  signos  en 
ilarruecos.  Rev.  Nacional  de  Econ.,  Tomo  XI,  num.  34-,  1922.  Pp.  58.  An 
account  of  the  currency  history  of  Morocco  divided  into  three  periods — up  to  1906 
when  the  State  Bank  of  Morocco  was  established;  from  1906  to  1914;  from  1914 
to  the  present. 

BoxAFOus,  A.  Les  grandes  banques  d'affaires  de  Roumanie.  Rev.  d'Econ.  Pol., 
May-June,  1922.  Pp.  18.  An  historical  and  descriptive  discussion  of  Roumanian 
banks.  Of  the  nine  leading  banks,  four  were  financed  exclusively  by  foreign 
capital;  four  exclusively  by  Roumanian  capital;  and  one  by  a  combination  of 
domestic  and  foreign  capital.  Asserts  that  the  danger  of  financial  panic  has 
passed  and  that  the  banks  have  played  a  large  part  in  the  restoration  of  stability. 
It  is  claimed  that  the  German  influence  in  the  banks  has  been  eliminated. 


706  Periodicals  [December 

Cahoselli,  F.  S.  II  sistema  monetario  in  rupie  neUa  economica  e  nella  finanza  delta 
Somalia  italiana.     Giorn.  d.  Econ.,  Aug.,  1922.     Pp.  17. 

Croixa,  C.  La  questione  dei  camhi  alia  conferenza  di  Oenova.  Riv.  di  Pol.  Econ., 
May,   1922.     Pp.   16. 

EsTCOURT,  R.  European  currencies  from  different  points  of  view.  Annalist,  July 
10,  1922.  Pp.  2.  Criticism  of  recent  theories  and  practices  relating  to  European 
currencies. 

Evans,  S.  Observations  of  a  South  African  authority  on  some  proposed  panaceas 
for  the  world's  economic  difficulties.  Econ.  "World,  July  29,  1922.  Pp.  2.  The 
economic  difficulties  of  the  post-war  period  must  be  overcome  by  the  eiforts  of 
each  country  working  individually  rather  than  by  international  agreements  and 
devices. 

Fanno.  M.  Inflazione  monetaria  e  corso  dei  cambi.  Giorn.  d.  Econ.,  Aug.,  1922. 
Pp.  23. 

Foster,  W.  T.     The  circuit  flow  of  money.     Am.  Econ.  Rev.,  Sept.,  1922.     Pp.  14. 

Gahcox,  M.  Les  depots  en  banque  et  leur  nature  juridique.  L'Econ.  Fran^.,  June 
17,  1922.  Pp.  2.  An  examination  of  the  technicalities  of  the  law  prescribing  the 
responsibility  of  banks  toward  depositors. 

Gottlieb,  L.  R.  International  currencies.  Annalist,  July  31,  1922.  Pp.  2.  A 
comparative  study  of  metallic  reserves  and  note  circulation  in  seventeen  countries 
before  and  since  the  war. 

Harding,  W.  P.  G.  Federal  reserve  banks  and  the  development  of  bankers'  accept- 
ances in  the  United  States.     Econ.  World,  June  10,  1922.     Pp.  3. 

Hawthey,  R.  G.  The  federal  reserve  system  of  the  United  States.  Journ.  Royal  Stat. 
Soc,  March,  1922.  Pp.  32.  An  examination  of  the  worth  of  the  system  during  and 
since  the  war.  Places  responsibility  for  much  of  the  inflation  and  accompanying 
ills  upon  the  tardy  increase  in  the  discount  rate  by  the  Federal  Reserve  Board. 
Asserts  that  after  the  process  of  deflation  was  inaugurated  by  raising  the  discount 
rate,  that  rate  should  again  have  been  lowered  so  as  to  prevent  piling  up  the 
huge  reserves  which  are  now  a  temptation  to  further  inflation.  It  is  pertinently 
asked — if  we  are  again  to  yield  to  inflation  why  did  we  go  through  the  painful 
process  of  deflation? 

HrLDEBRAND,  K.  The  capitalization  of  rural  cooperative  societies.  Intern.  Rev. 
Agri.  Econ.,  June,  1922.  Pp.  17.  By  the  general  inspector  of  the  Central 
Agricultural  Loan  Bank  (Raiifeisenbank)  and  lecturer  at  the  Higher  School  of 
Commerce  of  Berlin,  containing  certain  "fundamental  conceptions"  or  definitions 
dealing  primarily  with  the  problems  pertaining  to  "borrowed"  and  "owned" 
capital. 

HoRLiN,  H.  Avskrivningar  vid  fordderligt  penningsviirde.  Ek.  Tids.,  no.  3-4,  1922. 
Pp.  22.     Discusses  readjustments  necessitated  by  a  fluctuating  monetary  standard. 

Jacoby,  a.  The  letter  of  credit  in  Germany.  Administration,  July,  1922.  Pp.  9. 
The  rights  and  obligations  of  the  various  parties  involved  in  the  use  of  commercial 
letters  of  credit. 

Liesse,  a.  La  semaine  de  la  monnaie.  L'Econ.  Fran?.,  June  24,  1922.  Pp.  3. 
Discussions  of  the  group  have  served  to  clarify  the  understanding  as  to  the 
functions  of  money.  They  have  emphasized  the  dangers  of  inflation  and  have 
advocated  a  policy  of  gradual  deflation. 

.     Stabilisation  et  "devalorisation."     L'Econ.  Fran?.,  June  3,  1922.     Pp.  3. 

Opposes  the  devalorlzation  programs  of  Keynes  and  Cassel.  Says  devalorization 
is  a  major  operation,  whereas  the  situation  calls  for  only  a  minor  one.  Urges 
progressive  deflation. 


1922]  Money,  Prices,  Credit,  and  Banking  707 

LoRiOT,  J.  Les  cases  et  revolution  de  la  cri^e  d'apres  les  banquiers  frnnqais.  Rev. 
d'Econ.  Pol.,  May-June,  1922.  Pp.  8.  The  cau.se.s  .specified  were  a  buyers'  strike; 
reparation  problems;  unsettled  political  conditions.  The  situation  is  improving 
although  there  are  still  many  hampering  influences. 

McCoxxELL,  W.  M.  The  origin  of  the  law  of  negotiable  instruments.  Chase  Mo. 
Mag.,  June,  1922.     Pp.  5. 

Meyer,  E.     Longer  credits  for  the  farmer.     Nation's  Bus.,  June,  1922.     Pp.  2. 

Nadler,  M.  Effect  of  nexi}  regulations  in  development  of  bankers'  acceptances. 
Trust  Companies,  Aug.,  1922.  Pp.  4.  American  acceptances  are  now  placed  on 
the  same  level  with  those  of  European  nations. 

Owens,  R.  N.  The  hundred  million  dollar  foreign-trade  financing  corporation. 
Journ.  Pol.  Econ.,  June,  1922.  Pp.  17.  Account  of  the  organization  and  purpose 
of  the  corporation  as  well  as  a  detailed  history  of  the  efforts  to  secure  the  capital 
for  it.  Chief  obstacle  was  the  uncertainty  on  the  part  of  the  promoters  as  to 
just  how  the  corporation  would  function;  probably  fortunate  that  the  organiza- 
tion was  not  completed. 

Pattersox,  S.  H.  Cost  of  deposit  accounts.  Journ.  Am.  Bankers  Assoc,  Aug., 
1922.     Pp.  3.     Method  of  determining  the  profit  obtained  from  a  deposit  account. 

Pexsox,  J.  H.  The  Polish  mark  in  1921.  Econ.  Journ.,  June,  1922.  Pp.  8.  A 
study  in  "internal  and  external  values"  as  illustrating  results  of  e.xcessive  issue 
and  external,  violent,  political  movements  upon  a  currency  of  fiat  paper.  In- 
cludes a  discussion  of  causal  connections  between  the  internal  and  the  external 
price  level,  currency  inflation  and  the  exchange  rate. 

Petersox^,  L.  a  national  bank  oxcned  by  a  labor  union.  Bankers  Mag.,  Julv,  1922. 
Pp.  4.  Ownership  of  stock  confined  to  union  and  its  members,  dividends  limited 
to  10  per  cent,  and  earnings  shared  with  savings  depositors.  Control  is  in  the 
hands  of  the  Brotherhood  of  Locomotive  Engineers  since  this  organization  owns 
a  majority  of  the  stock.  The  growth  of  the  bank  has  been  phenomenal  and  in 
May,  1922,  it  held  deposits  of  about  twelve  million  dollars. 

PrjOL,  L.  La  Banca  Catalana  y  los  valores  industriales.  Rev.  Nacional  de  Econ., 
Tomo  XI,  num.  34,  1922.  Pp.  6.  Discusses  weaknesses  of  the  bank.  Its  chief 
defects  are  failure  to  command  confidence  of  the  people,  limited  capital,  inability 
to  interest  clients  in  its  industrial  propositions,  internal  rivalries  and  dissen- 
sions, too  much  interested  in  speculations  in  Paris,  and  too  little  interested  in 
opportunities  at  home. 

RrssEL,  A.  W.  A  new  conception  of  an  old  science.  Annalist,  July  3,  10,  1922. 
Pp.  2,  2.  Third  and  fourth  of  a  series  of  papers  on  banking.  Discuss  respectively 
the  creation  of  credit  money  by  commercial  banks,  and  bank  reserve  ratios  since 
the  establishment  of  the  federal  reserve  system. 

Shortis,  F.  R.  a.  The  London  money  market.  Econ.  World,  July  15,  1922. 
Pp.  2.  Reprinted  from  Acceptance  Btdl.  (N.  Y.,)  June,  1922.  The  nature  of 
the  acceptance  and  discount  business  in  the  London  market.  It  is  predicted  that 
when  restrictions  on  the  export  of  gold  are  removed  the  London  money  market 
will  assume  its  former  preeminence. 

Sraffa,  p.  The  bank  crisis  in  Italy.  Econ.  Journ.,  June,  1922.  Pp.  20.  An  ex- 
ceedingly interesting  account  of  the  antecedents  of  the  present  situation  in  Italy. 
Two  unfortunate  developments  seem  evident:  (1)  the  prevalence  of  banking 
control  by  industries  and  a  resulting  prostitution  of  the  bank  in  the  interests  of 
the  controlling  power;  (2)  the  absence  of  a  sense  of  responsibility  among  bank 
shareholders. 

Titus,  A.  H.  The  usefulness  of  commercial  acceptance  credits  in  export  financing. 
Econ.  World,  Sept.,  1922.  Pp.  2.  Reprinted  from  Acceptance  Bull.  (iV.  Y.), 
Aug.,  1922. 


708  Periodicals  [December 

Warbtjhg,  p.  M.  Important  part  played  by  American  acceptance  credits  in 
refinancing  world.     Commercial  &  Finan.  Chron.,  May  20,  1922.     Pp.  2. 

Williams,  J.  H.  New  light  on  our  unfunded  foreign  balance.  Journ.  Am.  Bankers 
Assoc,  Aug.,  1922.  Pp.  3.  Unfunded  debt,  representing  overdue  accounts  of 
foreigners  being  carried  by  our  bankers  and  exporters  and  probably  does  not 
exceed  one  billion  dollars.  The  greater  part  of  this,  contrary  to  the  general 
impression,  is  due  from  non-European  countries. 

Willis,  H.  P.  Shall  the  federal  reserve  system  function  only  in  emergencies? 
Trust  Companies,  June,  1922.  Pp.  3.  Although  designed  along  the  lines  of  the 
central  banking  systems  of  Europe  to  conduct  a  regular  and  carefully  controlled 
banking  business,  the  federal  reserve  system  has  proved  to  be  one  of  emergency 
discount  relief. 

Woodruff,  G.  W.  Bringing  country  banks  into  farm  loan  system.  Bankers'  Mo., 
June,  1922.     Pp.  4. 

York,  T.  Was  sterling  "pegged"  during  the  war?  Administration,  Sept.,  1922. 
Pp.  2.  Stabilization  of  economic  and  political  conditions  must  precede  absolute 
stabilization  of  exchange.  The  attempt  to  peg  sterling  was  successful  only  in 
the  early  days  of  the  war  when  the  economic  and  financial  machinery  was  still 
functioning  with  considerable  effectiveness. 

YouNGMAN,  A.  A  popidar  theory  of  credit  applied  to  credit  policy.  Am.  Econ. 
Rev.,  Sept.,  1922.     Pp.  30. 

Agricultural  credit  facilities  in  Great  Britain  and  Ireland  during  the  war.  Intern. 
Rev.  Agri.  Econ.,  June,  1922.  Pp.  10.  In  England  and  Wales  the  Board  of 
Agriculture  depended  upon  the  cooperative  societies  in  extending  war-time  credit. 
These  were  mainly  for  the  purchase  of  seed  and  fertilizers.  In  Scotland  the 
primary  concern  was  for  agricultural  machinery  which  was  most  largely  owned  or 
allocated  to  district  or  other  committees  and  hired  out  to  the  farmers.  Post-war 
recommendations  call  for  facilities  of  wider  scope  and  different  types,  which 
would  recognize  and  work  through  cooperative  trading  and  producing  societies. 
In  Ireland  a  great  decrease,  during  the  war,  is  shown  in  loans  for  all  purposes 
except  the  purchase  of  implements  and  machinery  in  which  there  was  a  striking 
increase,  caused  mainly  by  the  facilities  granted  the  poorer  farmers  for  securing 
implements  of  smaller  type. 

A  criticism  of  "Commerce  Monthly"  exposition  of  the  rural  credit  situation.  Econ. 
World,  July  8,  1922.  Pp.  3.  An  exposition  of  our  rural  credit  situation.  The 
writer  recommends  the  McFadden-Kenyon  bill  which  is  an  adaptation  of  the 
salient  features  of  the  foreign  systems  of  rural  credit.  He  opposes  the  suggested 
amendments  to  the  Federal  Farm  Loan  act  on  the  score  that  they  would  be 
insufficient  and  dangerous. 

The  development  of  banking  in  Glasgow.  Bankers'  Mag.  (London),  Aug.,  1922. 
Pp.  7. 

German  estimntes  of  the  losses  of  foreign  holders  through  the  depreciation  of  the 
mark.  Econ.  World,  Sept.,  1922.  P.  1.  Reprinted  from  Journal  of  Commerce 
and  Commercial  Bulletin,  Sept.  7,  1922.  Foreign  losses  estimated  at  a  minimum 
of  $9,000,000,000.     This  represents  an  addition  to  the  national  wealth  of  Germany. 

Levnadskostnader  under  andra  kvartalet  1922.  Soc.  Med.,  no.  8,  1922.  Pp.  26. 
Tabulates  changes  in  the  cost  of  living  in  different  parts  of  Sweden,  1914-1922, 
and  gives  particular  details  as  to  commodity  prices  in  different  communities 
during  the  second  quarter  of  1922. 

Progress  of  banking  in  Great  Britain  and  Ireland  during  1921.  Bankers'  Mag, 
(London),  July,  1922.  Pp.  11.  Analytical  study  of  the  balance  sheets  of  banks 
in  the   United  Kingdom,  continued  from   the  June   number. 

The  progress  of  banking  in  Great  Britain  and  Ireland  during  1921.  Bankers'  Mag. 
(London),  Sept.,  1922.     Pp.  15. 


1922]  Public  Finance  709 

The  return  to  gold  currency.  Wealth  in  India,  June,  1922.  Pp.  3.  Suggests  in- 
terstate agreements  limiting  use  of  gold  for  currency  purposes  in  order  to  main- 
tain the  parity  of  the  circulation  with  gold. 

The  rise  and  progress  of  Lloyds  Bank.     Bankers"  Mag.  (London),  July,  1922.  Pp.  30. 

Public  Finance 

(Abstracts  by  Charles   P.  Huse) 

Allen,  R.  H.  Patent  valuations  as  affected  by  federal  taxation.  Administration, 
Aug.,  1922.  Pp.  10.  Lack  of  regulations  as  to  patent  valuations  is  responsible 
for  many  tax  cases. 

Bhabant,  E.  J.  Valuation  of  public  utilities  for  taxation.  Bull.  Nat.  Tax  Assoc, 
June,  1922.  Pp.  9.  Public  utilities,  even  those  municipally  owned,  should  be 
taxed,  and  taxed  on  the  basis  of  a  fair  market  value. 

CuaATO,  G.     It  bilancio  dello  stato  pel  1918-1921.     Rif.  Soc,  July-Aug.,  1922.  Pp.  31. 

Dalla  Volta,  R.  II  problema  doganale  ed  il  congresso  di  Amsterdam.  Rif.  Soc, 
May-June,  1922.     Pp.   18. 

DoucET,  R.  Un  pro  jet  d'impot  unique.  Monde  Econ.,  Aug.,  1922.  Pp.  3.  Opposes 
the  plan  for  the  substitution  of  a  tax  on  gross  receipts  in  place  of  the  present 
direct  taxes. 

Friday,  D.  The  burden  of  taxation.  New  Repub.,  Aug.  2,  1922.  Pp.  3.  The  %var 
revealed  the  great  tax-paying  ability  of  the  American  people. 

GoDRiDGE,  P.  E.  What  is  wrong  xvith  inheritance  taxes?  Trust  Companies,  Aug., 
1922.     Pp.  4.     Points  out  the  injustice  of  the  taxes  on  non-resident  decedents. 

Gottlieb,  L.  R.  German  taxation  and  reparations.  Annalist,  July  10,  1922.  Pp.  2. 
Believes  the  reparations  can  be  met  only  by  an  international  loan. 

.     The   problem    of   floating    debts.     Annalist,   Sept.,    1922.     Pp.    2.     The 

percentage  of  floating  to  funded  debts  is  falling  in  the  United  States  and  Eng- 
land, but  rising  in  France,  Italy,  and  especially  Germany. 

Recent   progress   in   public  finance.     Annalist,   Aug.   28,    1922.     Pp.   3. 


Gives  figures  to  show  the  progress  made  by  important  belligerents  in  balancing 
their  budgets. 

Gregg,  E.  S.  A  case  against  discriminating  duties.  Journ.  Pol.  Econ.,  June,  1922. 
Pp.  8.     Finds  no  argument  in  the  history  of  American  shipping  for  such  duties. 

Harrisox,  p.  and  Smoot,  R.  Debate  over  the  sugar  tariff  in  United  States  Senate. 
Econ.  Bull,  of  Cuba,  Sept.,  1922.     Pp.  30.     Taken  from  the  Congressional  Record. 

Heer,  C.  Federal  taxation  of  state  and  municipal  bonds.  Administration,  Sept., 
1922.     Pp.  8.     Gives  arguments  against  exemption. 

HiGGS,  H.  The  Geddes  reports  and  the  budget.  Econ.  Journ.,  June,  1922.  Pp.  10. 
Tells  of  the  recommendations  of  the  committee  on  national  expenditures  and  of 
their  partial  adoption. 

LoEWENFELD,  W.  Die  Geldentwertung  im  Steuerwesen.  Zeitschr.  f.  Volkswirts.  u. 
Socialpolitik,  1-3  Heft,  1922.  Pp.  11.  Describes  the  effect  of  depreciation  on 
Austria's  fiscal  system. 

Macrostt,  H.  W.  Some  current  financial  problems.  Journ.  Royal  Stat.  Soc,  March, 
1922.     Pp.  30.     Deals  with  the  problems  of  funding  the  floating  debt. 

Magcire,  J.  M.  Income  taxes  on  the  realization  of  future  interests.  Yale  Law 
Journ.,  Feb.,  1922. 

Payen,  E.  La  liquidation  de  la  flotte  d'etat.  L'Econ.  Fran9.,  Sept.,  1922.  Pp.  3. 
Points  out  the  diflBculty  of  closing  certain  accounts  in  the  French  navy. 


710  Periodicals  [December 

Pyle,  J.  F.  The  income-tax  law  of  the  state  of  Missouri,  as  amended  August  3,  1921. 
Journ.  Pol.  Econ.,  June,  1922.  Pp.  12.  Traces  the  development  of  the  tax  from 
1861  to  the  present. 

RoTHE,  T.  Pourquoi  et  comment  reduire  les  dipenses  de  Vitat  Franqais.  Ref. 
Soc,  June,  1922.  Pp.  20.  Believes  expenditures  should  be  cut  down  because  of 
need  of  reducing  foreign  debt  and  on  account  of  the  small  benefit  derived  from 
many  expenses. 

Di  ToRHEPADuxA,  C.  R.  //  privUegio  nelle  imposte  dirette.  Riv.  di.  Pol.  Econ.,  Apr., 
1922.     Pp.  13. 

TsouDEHOs,  E.  J.  Le  nouvel  emprunt  forcf  du  gouvernment  grec.  Rev.  d'Econ.  Pol., 
May-June,  1922.  Pp.  4.  Holders  of  notes  of  the  Bank  of  Greece  must  exchange 
them  for  one  half  of  their  value  in  new  notes  and  the  other  half  for  interest- 
bearing  government  obligations. 

SuLLivAx,  M.  What's  ahead  in  ta.ves?  Nation's  Bus.,  July,  1922.  Pp.  3.  Does  not 
look  for  further  reduction  in  federal  taxes. 

Welliioff,  E.  L'rmpnint  fore/'  hollandais.  Rev.  de  Sci..  et  de  Legis.,  April-June, 
1922.  Pp.  23.  In  1920  all  persons  with  capital  or  income  above  certain  amounts 
were  required  to  subscribe  to  a  low  rate  government  loan. 

YvEs-GuYOT.  Les  dangers  Inidgetaires.  Journ.  des  Econ.,  July,  1922.  Pp.  19.  Dis- 
cusses proposals  for  reducing  the  French  deficit. 

Indian  budget  for  1022-1923.  Journ.  Indian  Econ.  Soc,  March,  1922.  Pp.  11. 
Attempts  to  remove  deficit  by  increasing  taxes  rather  than  by  decreasing  expendi- 
tures. 

Population 

(Abstracts   by   A.   B.   Wolfe) 

Akdrkades,  a.  La  crise  de  la  stirpopulation  en  Angleterre.  Rev.  Pol.  et  Pari.,  Jan., 
1922.     Pp.  12. 

Bland,  J.  O.  P.  Overpopulation  threatens  ruin  to  all  mankind.  New  York  World, 
July  9,  1922.  P.  1.  The  world  must  make  choice  between  birth  control,  and 
disease,  war,  and  famine. 

Boas,  F.  Report  on  an  anthropometric  investigation  of  the  population  of  the  United 
States.  Journ.  Am.  Stat.  Assoc,  June,  1922.  Pp.  28.  The  principal  problems 
that  must  be  taken  up  in  an  anthropometric  study  of  the  population  of  the  United 
States  include:  the  degree  of  homogeneity  of  the  population,  the  hereditary  char- 
acteristics of  the  existing  lines,  the  influence  of  environment,  and  the  influences 
of  selection.     The  study  must  be  of  children  as  well  as  adults. 

Bouthol,  G.  Etude  sociologique  des  variations  de  la  natalite  dans  les  fails  et  dans 
les  doctrines.     Rev.  Intern.  Sociol.,  March-April,  1922.     Pp.  23. 

Bowers,  P.  E.  The  necessity  for  sterilization.  Journ.  of  Deliquency,  Sept.,  1921. 
Pp.  17.  Advocates  sterilization  of  incurable  insane,  epileptic,  and  feebleminded 
as  a  means  of  diminishing  crime. 

Darlu,  p.  Les  mesures  Ugislatives  en  favour  de  la  nataliU.  Rev.  Pol.  et  Pari., 
April,  1921. 

Davis,  J.  J.  IIow  the  immigrant  laws  are  working.  Am.  Rev.  Rev.,  May,  1922. 
Pp.  8.  An  interesting  description  of  the  work  of  the  Secretary's  Board  of  Review 
in  handling  exceptional  cases  under  the  percentage  law. 

DoxALD,  H.  H.  The  negro  migration  of  1916-1918.  Journ.  of  Negro  Hist.,  Oct., 
1921.     Pp.  16. 

DuBLix,  L.  I.  The  mortality  of  foreign  race  stocks.  Sci.  Mo.,  Jan.,  1922.  Pp.  10. 
A  quantitative  study   of  the   vigor   of   racial   elements   in   the   population   of  the 


1922]  Population  711 

United  States.     With   the   exception   of   tiie   Russian   Jews,   the   exception   of   life 
of  the  foreign  born  is  less  than  that  of  the  native  born  of  native  parentage. 

DuPREEL,  E.  Les  variations  dSmograpJiiques  et  le  progreg.  Rev.  de  I'lnst.  de 
Socio!.,  May,  1922.  Pp.  26.  A  labored  deductive  argument,  unsupported  by- 
factual  citation,  in  support  of  the  thesis  that  increasing  population,  through  the 
competition  and  the  enforced  individual  initiative  it  entails,  is  a  cause  of  progress 
and  civilization.  As  an  afterthought  the  author  avers  that  his  conclusions  do 
not  have  much  practical  application. 

Ellis,  H.     Eugenics  and  the  uneducated.     Forum,  Jan.,   1922.     Pp.   12. 

DE  Geer,  S.  a  map  of  the  distribution  of  population  in  Sweden:  method  and  prep- 
aration of  general  results.  Geog.  Rev.,  Jan.  1922.  Pp.  12.  Presentation  of  the 
possibilities  of  representing  population  density  and  distribution  by  a  cartograph- 
ical method  employing  dots  and  three-dimensional  symbols. 

Hill,  J.  A.  Some  results  of  the  1020  population  census.  Journ.  Am.  Stat.  Assoc, 
Sept.,  1922.  Pp.  9.  The  last  census  shows  a  retardation  of  population  growth; 
an  increase  in  the  percentage  urban,  more  striking  than  in  the  preceding  decade 
and  resulting  to  a  greater  extent  from  cityward  migration;  a  marked  extension 
of  the  area  of  decreasing  population;  a  decrease  in  the  percentage  foreign-born, 
and  in  the  percentage  negro;  a  decrease  in  tiie  proportion  of  children  and  of  adults 
under  35  in  the  total  population. 

HoFFMAX,  F.  L.  The  demography  of  the  .Jewish  race.  Econ.  World,  April  1,  1922. 
Reprinted  from  The  American  Hebrew,  March  3,  1922.  Reviews  tlie  relative  low 
frequency  of  certain  diseases  among  the  Jews  as  compared  to  other  elements  in 
the  population.  Essentially  a  review  of  a  demographic  study  of  the  Jews  of 
Amsterdam  made  by  Dr.  J.  Sanders. 

Husband,  W.  W.  Immigration  under  the  per  centum  limit  act.  Mo.  Labor  Rev., 
Aug.,  1922.  Pp.  11.  3  maps.  Summarizes  the  Innnigration  act  of  May  19,  1921 
(the  "quota  law"),  gives  statistics  of  admissions  in  1921-22,  and  discusses  some 
administrative  problems.  "The  per  centum  limit  law  has  accomplished  the  pur- 
pose for  which  it  was  obviously  enacted  with  a  degree  of  success  which  few 
anticipated." 

Keup,  E.  Inner  e  Kolonisation  und  Bevolkerungspolitik.  Reichs-Arbeits-Blatt, 
Nov.  15,  1921.     Pp.  3. 

Keynes,  J.  M.  The  problem  of  population  in  its  larger  aspects.  Journ.  of  Com- 
merce and  Commercial  Bull.  (N.  Y.),  Aug.  29,  1922.  P.  1.  The  problem  of 
population  will  be  in  the  near  future  the  greatest  of  all  political  questions — one 
which  will  arouse  some  of  the  deepest  instincts  and  emotions.  Feelings  may  run 
as  passionately  as  in  earlier  struggles  between  religions.  The  issue  is  not  yet 
joined,  but  when  the  instability  of  modern  society  forces  the  issue  a  great  transi- 
tion in  human  history  will  have  begun. 

LoBENSTEiN,  R.  W.     Reducing  maternal  mortality.     Am.  Journ.   Pub.   Health,  Jan. 

1922.     Pp.  6. 
LucHT,    H.     Das    Geschlectverhaltnis    der    Geborenen    in    Preussen    wdhrend    des 

Krieges.     Zeitschr.  d.  Preussischen  Stat.  Landesamts,  no.  1-2,  1920. 

Marshall,  R.  C.     Will  immigration  law  cripple  industry?     Mag.  Wall  St.,  Sept.  25, 

1922. 
NiKiTiNE,   A.     L'^migration   russe.     Rev.   des   Sci.   Pol.,   April-June,   1922.     Pp.   27. 

An  exposition  of  the  attitudes,  opinions,  and  activities  of  the  Russian  emigres  in 

France,  Poland,  and  other  European  countries. 

McGiLLicuDDY,  O.  E.  Canada  moves  to  restrict  Oriental  immigration.  Am.  Rev. 
Rev.,  July,  1922.  Pp.  3.  Review  of  the  discussion  in  the  Canadian  House  of 
Commons  on  a  resolution  in  favor  of  "effective  restriction"  of  Oriental  immigra- 
tion to  the  Dominion.     The  resolution  was  passed.  May  9,  1922,  by  a  vote  of  130 


712  Periodicals  [December 

to  36.  The  whole  question  of  Oriental  immigration  has  developed  great  interest 
throughout  the  different  provinces  of  the  Dominion. 

Miller,  K.     Enumeration  errors  in  negro  population.     Sci.  Mo.,  Feb.,  1922.     Pp.  10. 

A   well-supported    adverse   criticism    of    the    Census    Bureau's    results,   especially 

in  the  enumeration  of   1920,  and  of  some  of  the  conclusions   drawn   from   them. 

The  census  of  negroes  in  1920  is  classed  with  those  of  1870  and  1890  in  point  of 

deficiency  in  enumeration. 
OsBORJT,  H.  F.     Eugenics — the  American  and  Noi-wegian  programs.     Sci.,  Nov.   18, 

1921.  Pp.  3. 

Pearl,  R.  The  population  problem.  Geog.  Rev.,  Oct.,  1922.  Pp.  10.  Comparison 
of  world's  population  increase  with  world  production  of  certain  staple  commodi- 
ties since  1800. 

Pico,  J.  M.     Poblacion  tirbana  y  rural  en  1914-     Rev.  de  Economia  Argentina,  June, 

1922.  Pp.  22.  Numerous  graphs.  Of  the  total  population  of  6,88.5,237,  57.4  per 
cent  are  classed  as  urban,  42.6  per  cent  as  rural.  Of  the  5,.527,285  native  Ar- 
gentinans,  52.7  per  cent  are  urban,  47.2  per  cent  rural.  Of  the  foreign  stocks 
(2,357,952)  68.3  per  cent  are  urban,  31.7  per  cent  rural.  Excluding  the  Capital 
Federal,  however,  47  per  cent  of  the  population  is  urban,  53  per  cent  rural. 
Details  for  the  different  states  and  nationalities  are  given. 

Ross,  E.  A.     Controlled  fecundity.     New  Repub.,  Jan.  25,  1922.     Pp.  4. 

Ross,  E.  A.  The  necessity  of  an  adaptive  fecundity.  Pub.  Am.  Sociol.  Soc,  vol. 
XVI,  1922.  Pp.  9.  A  paper  read  at  the  Sociological  Society's  meeting  in  1921.  The 
practice  of  family  limitation  is  unavoidable.  Without  it  there  would  be  from 
one  to  three  billions  of  population  in  the  United  States  by  the  end  of  this  century. 

Schwartz,  O.  Wohn-  und  Bevdlkerungsdichte  der  neuen  Stadtgemeinde  Berlin. 
Petermann's  Mitteil.,  vol.  67,  1921.     Pp.  4.     Map. 

Shaw,  E.  R.  The  ratio  of  male  to  female  births  as  affected  by  wars.  Journ.  Am. 
Stat.  Assoc,  June,  1922.  Pp.  5.  Gives  statistical  evidence  in  disproof  of  the 
hitherto  widely  accepted  theory  that  the  proportion  of  male  to  female  births 
rises  during  or  just  after  a  period  of  war  or  similar  catastrophe  in  which  the 
mortality  of  males  has  been  unusually  heavy. 

Ward,  R.  deC.  Some  thoughts  on  immigration  restriction.  Sci.  Mo.,  Oct.,  1922. 
Pp.  7.  Conventional  arguments  on  restriction.  Based  on  the  assumption  that 
present-day  immigrants  are  necessarily  of  inferior  stocks,  and  that  consequently 
the  melting-pot  idea  is  fallacious. 

Wallis,  W.  D.  The  Mexican  immigrant  of  California.  Pac.  Rev.,  Dec,  1921.  Pp. 
10.  A  sketchy  article  purporting  to  outline  Mexican  character.  Regards  the 
Mexican  as  a  menace  because  of  his  low  standards  of  income  and  living. 

WiLLCox,  W.  F.  On  the  future  distribution  of  white  settlement.  Geog.  Rev.,  Oct., 
1922.  Pp.  2.  In  the  nature  of  an  adverse  criticism  of  the  generalizations  in 
Taylor's  article  on  this  subject  in  the  Geographical  Review  for  July,  1922.  Holds 
that  we  lack  data  for  forecasting  the  world's  population  for  more  than  a  few 
years  ahead;  and  that  we  now  stand  at  the  tlireshold  of  a  new  epoch  in  the 
history  of  population  because  of  the  spread  of  voluntary  control  of  fecundity. 

Foreign  born  in  the  city  of  New  York.  Greater  New  York,  June  5,  1922.  P.  1. 
More  Russians  than  any  other  nationality   except  native  born.     Italians   second. 

Increasing  life  span  in  the  United  States.  Met.  Life  Ins.  Co.  Stat.  Bull.,  May, 
1922.     Pp.  2. 

Les  r4sultats  du  recensement  de  1921.  Monde  Econ.,  Jan.  7,  1922.  P.  1.  The 
population  of  France  (including  Alsace-Lorraine)  in  1921  was  39,209,766.  With- 
out Alsace-Lorraine  it  was  37,500,017 — showing  a  net  decrease  of  2,104,975  from 
1911.  The  actual  decrease  was  not  so  great,  however,  as  the  census  did  not 
include  soldiers  and  sailors  under  arms  beyond  the  confines  of  France. 


1922]  Insurance  and  Pensions  713 

Insurance  and  Pensions 

(Abstracts  by  Henry  J.  Harris) 

Baker,  F.  S.  Life  insurance  for  won^en.  Survey,  Aug.  15,  1922.  P.  1.  Analysis 
of  4,431  policies — one  tenth  of  total — taken  out  by  women  in  Massachusetts  state 
savings  bank  life  insurance  on  October  31,  1921.  Of  the  holders,  11  per  cent 
were  under  20,  about  2-5  per  cent  between  30  and  40,  and  one  sixth  over  40. 
Factory  workers  formed  34  per  cent,  clerical  workers  26  per  cent,  housewives  20 
per  cent,  etc.     70  per  cent  were  annual  premium  policies. 

Blaschke,  E.  Verdnderliche  V ersicherungssummen  in  der  Lehensversicherung. 
Zeitsch.  f.  d.  ges.  Ver.-Wis.,  July,  1922.  Pp.  22.  Holds  that  a  variable  standard, 
such  as  one  proposed  by  Irving  Fisher,  can  be  used  in  long-time  contracts  to  avoid 
the  diflSculty  caused  by  fluctuating  currencies.  Proposes  a  method  and  develops 
formulas. 

Bltjmenthai.,  F.  Die  Prognose  des  Krehses  in  ihrer  Bedeutung  fiir  die  Versiche- 
rung.  Zeitschr.  f.  d.  ges.  Ver.-Wis.,  July,  1922.  Pp.  9.  Sums  up  medical 
experience  from  insurance  viewpoint. 

BcEHBixG,  G.  Unfallversicherung  mit  Prdmienriickgezodhr  in  steuerrechtlicher 
Hinsicht.  Zeitschr.  f.  d.  ges.  Ver.-Wis.,  July,  1922.  1922.  Pp.  7.  If  an  acci- 
dent company  agrees  to  return  the  annual  premiums,  though  without  interest,  on 
death  or  the  attainment  of  a  specified  age,  is  the  transaction  insurance  or  capital 
accumulation,  and  how  do  the  tax  laws  apply  ? 

Doax,  H.  Die  Versicherungs-Generalagenten  und  das  neue  Arbeitsrecht.  Zeitschr. 
f.  d.  ges.  Vers.-Wis.,  July,  1922.  Pp.  19.  Agents  would  have  a  better  status  if 
they  remained  outside  the  scope  of  the  labor  law. 

Downey,  E.  H.  Re-marriage  experience  of  Pennsylvania  compensation  insurance 
carriers,  policy  years  1916-1919.  Proc.  Cas.  Act.  Soc,  May  16,  1922.  Pp.  12. 
Data  from  experience  of  Royal  Dutch  Insurance  Institute  is  of  doubtful  applic- 
ability under  American  conditions.  Coal  miners'  widows  show  a  rate  of  6.38; 
other  industries,  3.28.  Number  of  dependent  children  affects  rate  but  slightly, 
if  at  all.     Frequency  greatest  in  second  year  of  widowhood. 

Dtblin,  L.  I.  The  -work  of  Dreyer  in  relation  to  life  insurance  examinations. 
Journ.  Am.  Stat.  Assoc,  June,  1922.  Pp.  11.  Dreyer's  book  on  Assessment  of 
Physical  Fitness  shows  that  liis  researches  are  still  in  experimental  stage,  but 
offer  great  future  possibilities. 

DcBLix,  L.  I.  and  Kopf,  E.  W.  Mortality  from  external  causes  among  industricd 
policyholders  of  the  Metropolitan  Life  Insurance  Company,  1911-1920.  Proc.  Cas. 
Act.  Soc,  May  17,  1922.     Pp.  45.     Tables  and  graphs,  with  comment. 

DuFBT,  T.  J.  Workmen's  compensation.  Am.  Fed.,  Aug.,  1922.  Pp.  10.  Experi- 
ence of  the  Ohio  state  fund  and  advantages  of  such  funds  over  private  companies. 

FoRGEROX,  L.  Le  mecanisme  technique  et  les  charges  eventuelles  du  projet  d'assur- 
ance  sociales  (suite).  Journ.  des  Econ.,  June  1-5,  1922.  Pp.  16.  Detailed  review 
of  the  statistical  basis  of  the  bill. 

Gregory,  J.  E.  Credit  insurance.  Proc.  Cas.  Act.  Soc,  May  17,  1922.  Pp.  7. 
Methods  of  conducting  the  business. 

HoppE,  E.  Versicherung  zur  Deckung  des  im.  Brandschadenfalle  aufzubringenden 
Entzvertungsbetrages  (Tilgungsversicherung).  Zeitschr.  f.  d.  ges.  Ver.-Wis.,  July, 
1922.  Pp.  14.  The  stipulation  in  fire  policies  that  the  insurance  covers  only  the 
value  of  the  property  at  the  time  of  the  fire,  is  unfortunate  and  produces  a  moral 
hazard.     Proposes  a  system  of  amortization  and  savings  insurance. 

Ives,  H.  S.  Insurance  as  America's  "key"  business.  Econ.  World,  July  22,  1922. 
Pp.  4.     Present  success  of  American  insurance  institutions  due  to  private  initia- 


714  Periodicals  [December 

tive  and  energy.     Public  should  be  kept  informed  of  efforts  to  nationalize  insur- 
ance. 

Insurance     service     or     conpernfive     monopolt/     of     insxirance?     Econ. 


World,   Sept.,   1922.     Pp.   4.     Stock   companies    in   fire    insurance   give   .service 
addition  to  assuming  risks.     The  "reciprocals"  and  "mutuals"  are  class  insurance 
with  monopolistic  tendencies. 

Jacq,  F.  IJe  noiweau  regime  des  soci/'tes  d'assurances  mutuelles.  Monde  Econ., 
May  27,  1922.  P.  1.  The  decree  published  in  Journal  Officiel  of  March  15,  1922, 
requires  the  mutuals  to  have  at  least  800  members,  total  policies  of  5,000,000 
francs,  and  an  annual  ]>remium  income  of  50,000  francs. 

King,  G.  On  a  short  method  of  constructing  select  mortality  tables.  Further 
developments.  Journ.  Inst.  Actuaries,  July,  1922.  Pp.  63.  Description  of  method, 
with  tables  and  formulas. 

KisT,  J.  De  Orondslagen  van  het  Levensverzekeringshedrijf.  De  Economist 
(Dutch),  May,  1922.  Pp.  11.  A  criticism  of  Professor  Holwerda's  statement  of 
fundamental  principles  underlying  life  insurance  business. 

La  Boyteaux,  W.  H.  Vital  points  in  marine  insurance  policies  from  the  stand- 
point of  the  exporter.  Econ.  World,  July  15,  22,  1922.  Pp.  2,  1.  General  advice 
to  exporters,  with  explanation  of  terms,  general  customs  of  the  business,  etc. 

McMiTRRY,  D.  L.  The  political  significance  of  the  pension  question,  1885-1897.  Miss. 
Valley  Hist.  Rev.,  June,  1922.  Pp.  18.  Civil  war  pension  question  affected 
political  events  in  connection  with  the  veto  of  the  Dependent  bill  in  1887,  the 
election  of  1888,  Corporal  Tanner's  term  as  pension  commissioner,  and  the  Pension 
act  of  1890.  With  the  disappearance  of  the  federal  surplus  after  1893,  the 
pension  question  became  a  minor  issue. 

Maltby,  C.  H.  Results  of  an  investigation  into  the  effect  of  different  valuation 
bases  upon  surplus.  Journ.  Inst.  Actuaries,  July,  1922.  Pp.  26.  Traces  the 
surplus  earned  during  a  policy  year  at  five  year  intervals;  includes  surplus  from 
mortality,  interest  and  loading.     Gives  formulas  used. 

MoLDENHAUER,  P.  Versichevungspritizip  oder  Versorgungsprinzip  in  der  deutschen 
Sozialversicherung.  Zeitschr.  f.  d.  ges.  Vers.-Wis.,  July,  1922.  Pp.  6.  Post-war 
changes  are  nearly  all  in  the  direction  of  making  the  laws  relief  measures.  Ad- 
herence to  insurance  principles  recommended. 

Mowbray,  A.  H.  Observations  on  pension  funds  for  employees  rendered  per- 
manently disabled  by  reason  of  a  second  injury.  Proc.  Cas.  Act.  Soc,  May  17, 
1922.  Pp.  11.  In  New  York,  these  cases  are  cared  for  from  a  special  fund 
accumulated  from  a  transfer  of  $500  from  each  "no-dependency"  case,  which  is 
more  than  adequate.     Recommends  further  study. 

.     The  value  of  a  social  point   of  view  in   the   conduct    of   the   casualty 

insurance   business.     Proc.   Cas.   Act.   Soc,   May    17,   1922.     Pp.   9.     The   business 
can  survive  only  if  it  meets  the  broad  social  needs  of  the  community. 

Peerin,  O.  W.  The  development  of  settlement  options  in  life  insurance  contracts. 
Econ.  World,  Sept.  2,  1922.  Pp.  3.  Reprinted  from  The  Eastern  Underwriter, 
Aug.  25,  1922.  Insurance  companies  are  now  extending  their  business  in  paying 
incomes  rather  than  lump  sum.     Illustrations  of  service  of  this  kind. 

Riley,  H.  B.  The  place  of  title  insurance  in  the  modern  business  world.  Econ. 
World,  July  8,  1922.  Pp.  3.  Business  world  needs  an  insurance  which  will  care 
for  the  risks  of  the  doubtful  situations;  companies  should  be  active  in  assuming 
such  risks. 

Steffenson,  J.  F.  On  certain  formulas  of  approximate  summation  and  integration. 
Journ.  Inst.  Actuaries,  July,  1922.     Pp.  10. 

Valgren,  V.  N.     Agricultural  insurance.     Proc.  Cas.  Act.  Soc,  May  17,  1922.     Pp. 


1922]  Pauperism,  Charities,  and  Relief  Measures  715 

15.  Annual  damape  to  ten  leading:  crops  in  United  States  in  1909-1919  was 
$2,620,000,000.  Hail  insurance  best  known  and  in  1919  total  premiums  were  over 
$30,000,000.  Describes  methods  of  private  companies  in  providing  general  crop 
coverage;  results  so  far  unfavorable. 

Credit  insurance  in  the  United  States.  Fed.  Reserve  Bull.,  June,  1922.  Pp.  10. 
General  plan  used  by  the  three  leading  companies  who  do  practically  the  entire 
business;  form  of  policy;  actuarial  bases  of  the  plan,  with  tables;  recent  develop- 
ments and  classification  of  business  lines. 

Essentials  of  fire  insurance.     Pace  Student,  Aug.,  1922.     Pp.  3. 

Recent  developments  in  connection  with  government  regulation  of  industrial  life 
insurance  in  Great  Britain.  Econ.  World,  Sept.,  1922.  Pp.  2.  Reprinted  from 
Manchester  Guardian  Commercial,  Aug.  10,  1922.  After  the  investigation  by 
Lord  Parmoor's  committee,  a  bill  for  the  regulation  of  industrial  business  was 
introduced.  Opposition  to  this  bill  was  so  successful  as  to  make  its  amended  form 
entirely  innocuous.     The  wastes  of  the  system  will  continue. 

Die  schzceizerischen  Aktiengesellschaften  in  den  Jahren  IDOl  und  1920.  Zeitschr. 
f.  Schweiz.  Stat.  u.  Voikswirts.,  1  Heft,  1922.     Pp.  3.     Twenty-years  growth. 

Unemployment  insurance:  an  international  survey.  Intern.  Lab.  Rev.,  Sept.,  1922. 
Pp.  10.  Treats:  state-aided  workers'  unemployment  insurance;  compulsory  in- 
surance and  employers"  participation;  proposed  systems;  general  tendency  of 
unemployment  insurance. 

Pauperism,  Charities,  and  Relief  Measures 

(Abstracts  by  George  B.   Mangold) 

Cobb,  M.  E.  The  mentality  of  dependent  children.  Journ.  Delinquency,  May,  1922. 
A  study  of  results  obtained  in  tested  groups  of  dependent  children.  The  con- 
clusion reached  is  that  there  is  a  decided  inferiority  among  such  children.  Among 
the  causes  mentioned  are  hereditary  influences,  a  handicapping  environment  and 
institutional  life. 

Doll,  E.  A.  Educational  credo  for  a  state  home  for  girls.  Journ.  Delinquency, 
July,  1922.  Gives  an  excellent  statement  of  the  essentials  of  adequate  treat- 
ment of  delinquent  girls.  It  advocates  several  types  of  classifications,  each  in- 
tended to  meet  the  particular  needs  of  the  special  group  of  girls. 

.  Objective  mental  diagnosis.  Journ.  Delinquency,  May,  1922.  A  dis- 
cussion of  advanced  methods  of  mental  examination  of  children  at  the  New 
Jersey  State  Home  for  Boys.  Significant  facts  for  delinquent  boys  have  been 
disclosed. 

Feugere,  E.  L'assistance  publique  a  Paris  en  1922.  L'Econ.  Fran?.,  Aug.,  1922. 
Consists  of  an  analysis  of  the  Philanthropic  Budget  of  Paris  for  the  year  1922. 
Expenditures  are  constantly  increasing,  but  the  variety  of  enterprises  are  also 
receiving  more  substantial  support. 

Hughes,  W.  H.  Some  responsibilities  of  the  public  school  in  developing  social 
attitudes.  Journ.  Delinquency,  July,  1922.  Discusses  the  problem  of  the  school 
as  a  factor  in  the  development  of  large-group  consciousness  among  pupils  so  that 
our  social  relationships  may  become  democratic  and  progressive.  Instead  of  over- 
emphasizing the  importance  of  material  resources,  we  must  give  more  attention 
to  the  problem  of  human  resources  and  how  best  to  conserve  them. 

Murphy,  J.  P.  The  crime  wave  and  probation.  Catholic  Charities  Rev.,  May,  1922. 
Pp.  4.  Seeks  to  explain  the  causes  of  the  crime  wave.  The  failure  of  the  courts 
to  give  justice  and  the  attitude  of  many  lawyers  are  given  as  two  reasons.  The 
claim  that  probation  is  an  important  cause  is  unfounded. 


716  Periodicals  [December 

WiixiAMS,  J.  H.  A  court  hearing  on  parental  neglect.  Journ.  Delinquency,  May, 
1922.  Includes  a  stenographic  rejiort  of  the  court  proceedings  in  a  case  of 
delinquent  children,  whose  delinquency  is  clearly  traceable  to  parental  neglect. 

Wtxe,  a.  Atypical  children  in  orphanages.  Journ.  Delinquency,  July,  1922.  A 
large  number  of  defective  and  backward  children  are  irregularly  received  in  our 
orphanages  and  children's  institutes.  The  question  propounded  whether  such 
institutions  should  not  limit  themselves  to  the  abnormal  instead  of  accepting 
different  types  in  the  same  institute  and  thereby  aggravating  the  problem  of  hand- 
ling either  the  normal  or  abnormal. 

Socialism  and  Co-operative  Enterprises 

VAN  Blom,  D.  Socialisatie.  De  Economist  (Dutch),  June,  1922.  Pp.34.  Discusses 
political  and  economic  aspects  of  socialistic  tendencies  at  the  present  time. 

BoHEL,  E.     La  science  dans  une  society  sociaUste.     Scientia,  Mar.,  1922. 

Cole,  G.  D.  H.  The  guild  movement  in  Great  Britain.  Intern.  Lab.  Rev.,  Aug., 
1922. 

CAKANO-DoNvrro,  G.  CJassi  e  lotte  di  classi  nel  medioevo:  contributo  alio  studio  del 
movimento  sindicale.     Rif.  Soc,  Oct.-Dec,  1921.     Pp.  24. 

Hewes,  a.     Giiild  socialism:  a  two  years'  test.     Am.  Econ.  Rev.,  June,  1922.     Pp.  29. 

Landafer,  K.  Sozialismus  itnd  parlamentarisches  System.  Archlv  f.  Sozialwis.  u. 
Sozialpolitik,  3  Heft,  48  Band.     Pp.  13. 

MiSES,  L.  Die  Arbeit  im  sozialistischen  Gemeinwesen.  Zeitschr.  f.  Volkswirtsch.  u. 
Sozialpolitik,  7-9,  Heft.,  1922. 

MoscA,  B.  II  pensiero  di  Saint-Simon  considerato  dopo  un  secolo.  Rif.  Soc,  Oct.- 
Dec,  1921.     Pp.  31. 

PoLANYi,  K.  Sozialistische  Rechnungslegung.  Archiv  f.  Sozialwis.  u.  Sozialpolitik, 
May,  1922. 

PucKETT,  H.  W.     Socialists  in  German  education.     Survey,  Dec.  3,  1921.     Pp.  2. 

TtJGWELL,  R.  J.  Guild  socialism  and  the  industrial  future.  Intern.  Journ.  Ethics, 
Apr.,  1922.  Criticizes  Mr.  G.  D.  H.  Cole's  theories  on  the  ground  that  "ultimate 
scliemes,  however  reasonable  or  mutable,  must  be  built  on  ultimate  premises  in 
industrial  life.     And  it  is  never  safe  to  admit  static  ultimate  premises." 

Waebasse,  a.  D.     Cooperative  housing  in  Europe.     Am.  Rev.  Rev.,  Feb.,  1922. 

Statistics 

(Abstracts  by  Horace  Secrist) 

Arner,  G.  B.  L.  Land  values  in  New  York  City.  Quart.  Journ.  Econ.,  Aug.,  1922. 
A  study  first  of  "nine  vacant  or  nearly  vacant  parcels  of  land  in  the  developed 
sections  of  the  borough  of  Manhattan;  second,  an  intensive  study  of  a  tract  of 
about  fourteen  blocks  on  Washington  Heights  togetlier  with  a  large  acreage  tract 
in  tlie  upper  Bronx;  third,  a  study  of  ten  tracts  which  were  subdivided  and  sold 
at  auction  between  tlie  years  1905  and  1913;  fourth,  a  less  detailed  study  of  each 
of  the  five  boroughs  of  New  York  City  from  1906  to  1921,  with  additional  data 
in  regard  to  tlie  five  wards  in  the  borough  of  Queens,  and  a  tract  of  24  square 
miles  in  Brooklyn."  Concludes  inter  alia:  "A  large  part,  and  in  some  cases  all, 
of  the  increase  in  the  value  of  vacant  land  is  offset  by  actual  payments  to  the 
city  in  the  form  of  taxes  and  special  assessments  with  interest  thereon.  The 
holding  of  vacant  land  is  not  a  profitable  form  of  investment,  except  for  short 
periods  of  time  in  exceptionally  favorable  locations." 


1922]  Statistics  717 

Boas,  F.  Report  on  an  anthropometric  investigation  of  the  population  of  the 
United  States.    Journ.  Am.  Stat.  Assoc,  June,  1922. 

BrviNs,  P.  A.  Charting  as  an  aid  to  stabilizing  profits.  Indus.  Manag.,  Sept.,  1922. 
A  general  article  calling  attention  to  the  value  of  certain  government  publications, 
how  they  may  be  secured,  and  to  the  use  of  charts  to  illustrate  facts  of  interest 
to  business  men. 

Cheringtok,  p.  T.  Wool  groming  in  the  United  States.  Bull.  Nat.  Assoc.  Wool 
Mfrs.,  July,  1922.  Pp.  17.  A  valuable  historical  treatment  with  suggestions  for 
a  plan  for  a  sheep  revival.     Statistical  tables,  maps,  and  diagrams. 

Crum,  W.  L.  The  determination  of  secular  trend.  Journ.  Am.  Stat.  Assoc,  June, 
1922.  Purpose  of  the  paper  is  to  examine  the  question,  "Would  it  not  be  prefer- 
able to  fit  the  line  (of  secular  trend)  so  that  the  sum  of  the  squares  of  the 
ratios,  rather  than  the  sum  of  the  squares  of  the  actual  deviations,  is  minimum?" 
"and  to  get  a  first  approximation  to  the  position  of  the  Line  of  secular  trend  on 
the  new  basis." 

Day,  E.  E.  The  volume  of  production  of  basic  materials  in  the  United  States, 
1909-1921.  Rev.  Econ.  Stat.,  July,  1922.  Pp.  1.5.  Gives  individual  indexes,  un- 
adjusted and  adjusted,  for  agriculture,  animal  husbandry,  forestry  and  mining, 
and  a  general  index  for  the  combined  groups.  Method  of  adjusting  the  indexes 
is  described.     Tabular  and  graphic  material. 

DoBBELAAR,  P.  J.  Een  beroepsstatistick  van  Schiedam  in  het  jaar  1807.  De  Econo- 
mist (Dutch),  Sept.,  1922.  Pp.  15.  A  study  of  an  occupational  census  taken  in 
HoUand  in  1807. 

DoTEJf,  C.  W.  Statistics  in  the  service  of  economists.  Journ.  Am.  Stat.  Assoc, 
March,  1922.  Pp.  7.  A  survey  of  the  contributions  of  statistical  organizations  to 
an  understanding  of  the  economic  order. 

DwiGHT,  T.  Business  trend  from  energy  consumed.  Elec.  World,  Sept.  30,  1922. 
Pp.  3.  Energy  generated  by  central  electric  stations  a  guide  to  general  business 
conditions.     Illustrative  statistics  and  diagrams. 

Hart,  W.  L.  The  method  of  monthly  means  for  determination  of  a  seasonal  varia- 
tion. Journ.  Am.  Stat.  Assoc,  Sept.,  1922.  Pp.  9.  Primarily  a  criticism  of  the 
method  of  determining  seasonal  variation  developed  by  W.  M.  Persons  and  used 
by  the  Harvard  Committee  on  Economic  Research. 

Hill,  J.  A.  Some  results  of  the  1920  population  census.  Journ.  Am.  Stat.  Assoc, 
Sept.,  1922.  Pp.  9.  "A  retardation  of  population  growth;  an  increase  in  the 
percentage  urban,  more  striking,  all  things  considered,  than  in  the  preceding 
decade,  and  resulting  to  a  greater  extent  from  cityward  migration;  a  marked 
extension  of  the  area  of  decreasing  population;  a  decrease  in  the  percentage 
foreign-born  caused  by  the  check  to  foreign  immigration,  and  in  the  percentage 
negro,  indicating  a  declining  birth  rate  for  that  race;  a  decrease  in  the  proportion 
of  children  and  of  adults  under  35  in  the  total  population  and  a  corresponding 
increase  in  the  proportion  above  35 — these  are  some  of  the  results  shown  by  the 
fourteenth  census." 

HoFsoos,  E.  Commercial  failures  of  the  barometric  significance.  Annalist,  Aug. 
21,  1922.  Holds  that  the  number  and  liabilities  of  commercial  failure  have  a 
barometric  significance — excessive  numbers  indicating  business  prosperity  ahead, 
and  abnormally  few  suggesting  a  coming  storm.  "Sometime  prior  to  the  next 
crisis  failures  will  reach  a  new  low  level.  This  will  be  a  warning  to  the  keen 
observer." 

Holmes,  B.  E.  Measuring  growth  and  shrinkage  by  means  of  ratio  charts.  Indus. 
Manag.,  Sept.,  1922.  An  instructive  article  in  which  the  major  value  lies  in  the 
discussion  and  method  of  determining  increase  and  decrease  slope  lines  in  ratio 
charts. 


718  Periodicals  [December 

King,  W.  I.  The  net  volume  of  saving  in  the  United  States.  Journ.  Am.  Stat. 
Assoc,  Sept.,  1922.  Pp.  19.  A  constructive  statement  of  the  problem  with 
part  of  the  results  given.     (To  be  concluded.) 

Moore,  H.  L.     An  eight-year  cycle  in  rainfall.     Mo.  Weather  Rev.,  July,  1922.     P.  1. 

MouKRE,  Baron.  Des  variations  de  I'inAgalite  des  revenus  et  du  revenu  moyen. 
Journ.  Soc.  Stat,  de  Paris,  July-Aug.-Sept.,  1922.     Pp.  14. 

Myers,  M.  G.  Monthly  production  of  pig  iron.  Journ.  Am.  Stat.  Assoc,  June, 
1922.  Concludes  that  pig  iron  production  can  be  predicted  from  data  on  capac- 
ity of  furnaces  in  blast. 

Ogburn,  W.  F.  and  Thomas,  D.  S.  The  influence  of  the  business  cycle  on  certain 
social  conditions.  Journ.  Am.  Stat.  Assoc,  Sept.,  1922.  Pp.  17.  A  review  of 
the  measures  of  the  phases  of  the  business  cycle;  the  construction  of  a  new 
measure;  and  the  comparison  with  it  of  marriage,  divorce,  death,  birth,  crime  and 
suicide  rates.     Steps  in  the  method  given. 

Peterson,  R.  E.  K.  Calculation  of  the  correlation  ratio.  Journ.  Am.  Stat.  Assoc, 
Sept.,  1922.  Pp.  4.  An  illustration  of  the  tabular  method  of  computing  the 
correlation  ratio. 

PoLAKov,  W.  N.  Kinetic  statistics  as  an  aid  to  production  and  distribution.  Journ. 
Am.  Stat.  Assoc,  Sept.,  1922.  Pp.  6.  "Kinetic  charts  have  a  mission  quite 
their  own — to  tell  while  the  thing  is  being  done  whether  it  is  being  done  well, 
and  if  not,  why  not;  and  whether  it  will  be  done  in  time,  and  if  not,  what  steps 
should  be  taken  to  get  the  thing  done." 

Schwahz-Leyen.  Der  Einfluss  der  Produktionssteigerung  auf  die  Produktions- 
kosten.     Zeitschr.  f.  Schweiz.  Stat.  u.  Volkswirts.,  2  Heft,  1922.     Pp.  12. 

Secrist,  H.  and  Altman,  B.  L.  I,  A  business  barometer  for  retailers.  National 
Retail  Clothier,  June  15,  1922.  Pp.  9.  II,  Stock  turnover  in  retail  clothing 
stores — a  barometer  of  expense  and  trade  tendencies.  July  20.  Pp.  5.  Ill,  The 
control  of  expenses  and  profits  in  the  retail  merchandising  of  clothing.  Sept.  21. 
Pp.  7.  IV,  Amounts  sold  per  full-time  salesman  in  retail  clothing  stores — a 
barometer  of  expense  and  trade  tendencies.  Oct.  6.  Pp.  7.  This  series  of  ar- 
ticles deals  with  methods  of  controlling  expenses  and  profits  in  retail  clothing 
stores. 

Snodgrass,  K.  a  new  price  index  for  Great  Britain.  Journ.  Am.  Stat.  Assoc, 
June,  1922.  A  description  and  critical  account.  Concludes  that  in  the  case  at 
hand  the  evidence  is  that  "very  satisfactory  wholesale  price  indexes  can  be 
constructed  on  the  basis  of  less  than  100  quotations." 

Thomann,  D.  Die  Bevolkerungsbewegting  in  den  schweizerischen  Stdten  mit  iiber 
10,000  Einwohnern  in  den  Jahren  1891  bis  1920.  Zeitschr.  f.  Schweiz.  Stat.  u. 
Volkswirts.,  1  Heft,  1922. 

Tucker,  R.  S.  Distribution  of  men  physically  unfiJ  for  military  service.  Journ. 
Am.  Stat.  Assoc,  Sept.,  1922.  Pp.  7.  An  analysis  of  draft  statistics  and  a 
criticism  of  the  conclusions  found  in  the  study  Defects  Found  in  Drafted  Men — 
a  War  Department  publication.  Concludes,  among  other  things,  "On  the  whole, 
they  [the  statistics]  seem  to  show  a  superiority  of  the  native  white  stock  over 
the  immigrant  strain;  and  they  almost  certainly  show  a  superiority  of  whites  over 
negroes.  They  do  not  support  the  views  put  forth  in  Love  and  Davenport's 
report,  concerning  the  superiority  of  southern  agricultural  whites,  Indians,  Mexi- 
cans, and  natives  of  German  and  Scotch  origin,  and  of  rural  districts  in  general 
as  compared  with  urban;  neither  do  they  prove  the  inferiority  of  French  Cana- 
dians. They  are,  however,  consistent  with  Love  and  Davenport's  conclusions  as 
to  the  freedom  from  defect  of  the  northern  native  white  agricultural  districts 
and  the  Scandinavian  groups,  and  the  relative  excess  of  defects  among  the  negroes 
and  the  mountain  whites  of  the  Appalachians.     Finally,  they  seem  to  indicate  that 


1922]  Statistics  719 

Americans  living  outside  the  state  of  their  birth  are,  as  the  result  of  a  selective 
process,  physically  superior  to  the  stay-at-homes;  and  that,  in  consequence,  the 
rapidly  growing  states  are  superior  to  those  with  more  nearly  stationary  popula- 
tions; but  they  do  not  indicate  that  the  inferiority  of  the  latter  has  developed 
into  racial  degeneracy  on  the  part  of  the  native  whites,  except  possibly  in  some 
parts  of  Maine,  Vermont,  Georgia,  Kentucky,  and  Tennessee." 

TuBNER,  Mrs.  V.  B.  Agricultural  wages  and  wage  earners  in  Norway  and  Sweden. 
Mo.  Labor  Rev.,  Sept.,  1922.     Pp.  14. 

Vaxce,  R.  Business  statistics  as  a  basics  for  business  planning.  Administration, 
Oct.,  1922.     Pp.  5.     Stresses  the  use  of  statistics  for  controlling  executive  action. 

DE  Ville-Chabrolle,  M.  Le  mutiles  et  formes  de  la  Guerre  1914-1918  en  France. 
Bull.  Stat.  Generale  de  la  France  et  du  Service  d'Observation  des  Prix,  July, 
1922.     Pp.  35. 

Woodbury,  R.  M.  Westergaard's  method  of  expected  deaths  as  applied  to  the 
study  of  infant  mortality.  Journ.  Am.  Stat.  Assoc,  Sept.,  1922.  Pp.  11.  Ex- 
plains Westergaard's  method  of  "isolating  the  influence  of  a  single  factor  from 
that  of  other  associated  factors,  and  of  stating  the  results  in  clear  and  definite 
terms,"  and  applies  the  method  to  a  study  of  infant  mortality.  Holds  that  the 
method  has  universal  application. 

Wright,  P.  G.  Moore's  work  in  cycles.  Quart.  Journ.  Econ.,  Aug.,  1922.  A  crit- 
ical and,  on  the  whole,  unsympathetic  review  of  Professor  Moore's  work.  Con- 
cludes, "It  appears  to  the  writer  that,  while  it  is  always  a  fascinating  pursuit  to 
seek  a  physical  basis  for  economic  and  sociological  phenomena,  in  the  present 
instance  it  is  not  necessary,  in  order  to  account  for  the  roughly  periodic  ups  and 
downs  of  business,  to  assign  any  such  non-economic  generating  cycle.  Adequate 
causal  forces  may  be  found  in  the  capitalist  system  with  its  production  in  antici- 
pation of  demand,  its  constant  influx  of  labor-saving  machinery,  and  its  founda- 
tion upon  a  basis  so  non-material  and  so  subject  to  the  swift  mutation  of  group 
psychology  as  credit.  Indeed,  the  rough  periodicity  of  business  cycles  suggests 
the  elastic  recurrence  of  human  functioning  rather  than  the  mathematical  pre- 
cision of  cosmic  phenomena." 

Arbefslonernas  stegring  1913-1921  i  Sverige  och  vissa  andra  lander.  Soc.  Med.,  no. 
6,  1922.  The  rise  in  wages  and  cost  of  living  in  Sweden,  1913-1921,  showed  by 
graph  and  by  tables — the  year  1913  forming  the  basis  of  comparison. 

Les  dommages  de  guerre  et  la  reconstitution  des  regions  liberees.  Journ.  Soc.  Stat, 
de  Paris,  June,  1922.  Pp.  8.  One  of  a  series  of  comprehensive  articles — replete 
with  statistical  data. 

Estimating  wool  yields.  Scoured  content  tests  in  France.  Bull.  Nat.  Assoc.  Wool 
Mfrs.,  July,  1922.  A  reprint  of  an  article  prepared  by  M.  Robert  Dantzer,  super- 
intendent of  the  woolen  mills  of  E.  Ricalens  Fils,  Larroque-D'OImes,  Ariege, 
France.     Discusses  the  problem  of  estimating  wool  shrinkage. 

Fylleriforseelser  och  deras  orsaker  under  andra  kvartalet  1922.  Soc.  Med.,  no.  9, 
1922.  Pp.  6.  A  statistical  account  of  drunkenness  and  its  causes  in  Sweden  dur- 
ing the  second  quarter  of  the  current  year. 

Kooperativ  verksamhet:  Sverige  1917-1919.  Soc.  Med.,  no.  6,  1922.  Pp.  9.  A  sta- 
tistical presentation  of  cooperative  enterprises  in  Sweden,  1917-1919. 

The   lac    trade.     Commerce    Mo.,    Oct.,    1922.     Pp.    2.     Tabular    and    graphical    ma- 
terial, 1913-1922. 
Manufacture  of  linen.     Commerce  Mo.,  Oct.,  1922.     Pp.  5. 


DOCUMENTS,  REPORTS  AND  LEGISLATION 
Industries  and  Commerce 

From  the  United  States  Tariff  Commission  have  been  received: 

Tariff  Acts  Compared  (Washington,  1922,  pp.  389).  This  is  a  compila- 
tion of  the  paragraphs  of  the  recent  House  and  Senate  bills  together  with 
corresponding  paragraphs  of  the  previous  acts  of  1909  and  1913. 

Recent  Tendencies  in  the  Wool  Trade  with  Special  Reference  to  Their 
Tariff  Aspects,  1920-1922  (pp.  49).  This  discusses  the  world  surplus  and 
its  effect  on  prices;  changes  in  normal  price  relations  between  grades;  and 
the  relative  effect  of  different  duties  on  the  consumer. 

Also,  in  Tariff  Information  Surveys,  revised  editions  of  Household  Ar- 
ticles of  Cotton;  Silk  Wearing  Apparel  and  Silk  Small  Wares;  Heavy 
Leathers;  Light  Leathers  (Group  1);  and  Surface-coated,  Photographic, 
Cigarette  and  Miscellaneous  Papers. 

Tariff  Information  Series — 
No.   26,  Census   of   Dyes   and   Other   Synthetic    Organic    Chemicals,    1921 

(1922,  pp.  173). 
No.   27,  Emergency    Tariff  Act    and   Longstaple    Cotton    (pp.    35.)      This 

deals  more  particularly  with  the  trade  in  Egyptian  cotton. 
No.  28,  Hides  and  Skins  (1922,  pp.  28). 

No.   29,  The  Emergency  Tariff  and  Its  Effect  on  Cattle  and  Beef,  Sheep 
and  Mutton,  Wool,  Pork,  and  Miscellaneous  Meats  (1922,  pp.  40). 

The  letter  from  the  Tariff  Commission  on  Operation  of  Rates  in  the 
Emergency  Tariff  Act  has  been  printed  as  Senate  Document  No.  224  (67 
Cong.,  2  Sess.,  pp.  142). 

The  Federal  Trade  Commission  has  published  volume  III  of  a  Report 
on  the  Grain  Trade,  under  the  title  of  Terminal  Grain  Marketing  (Wash- 
ington, 1922,  pp.  332).  This  deals  with  car-lot  movement  of  grain,  trans- 
portation and  road  facilities,  warehousing  and  storage,  merchandising  in 
terminal  markets,  financing  the  grain  trade,  the  insurance  charges  and 
scalping  in  the  cash  markets.  Many  forms  and  statistical  tables  are  added. 
The  Commission  has  also  published  the  Report  on  Lumber  Manufacturers' 
Trade  Associations,  incorporating  the  reports  of  January  10,  February  18, 
June  9,  1921,  and  February  15,  1922  (pp.  150).  This  contains  four  parts: 
A  preliminary  survey  of  the  Lumber  Manufacturers'  Trade  Associations; 
Southern  Pine  Association  of  New  Orleans;  Douglas  Fir  Lumber  Manu- 
facturers' and  Loggers'  Associations;  and  Western  Pine  Manufacturers' 
Association  of  Portland,  Oregon. 

The  Department  of  Commerce  has  issued  in  its  Miscellaneous  Series: 
No.   112,   Volume  of  United  States  Trade,  1921,  by  Ports  of  Origin  and 

Destination  (Washington,   1922,  pp.   57). 
No.   114,  Foreign  Periodicals  on  Trade  and  Economic  Conditions  (pp.  33). 

This  is  a  serviceable  list,  many  of   the   entries   being  classified 

by  commodities  with  annotated  comments  describing  the  scope  of 

the  journal. 


1922]  Industries  and  Commerce  721 

No.    115,   Trade  of  the  United  States  tenth  the  World,  1920-1921.      Pact  I: 
Imports   (pp.    130). 

Four  volumes  of  the  detailed  Report  of  the  Joint  Commission  of  Agri- 
cultural Inquiry,  the  first  two  of  which  have  already  been  noted  (Am.  Econ. 
Rev.,  June,  1922,  p.  376)  have  now  been  published  as  H.  R.  408,  67  Cong., 

1  Sess.  Part  III  (pp.  686)  deals  with  transportation  and  freight  rates. 
Part  IV  (pp.  266)  is  concerned  with  marketing  and  distribution.  This 
volume  contains  a  great  many  charts,  illustrating  the  subjects  of  the 
Commission's  inquiry. 

Bull.  1083  of  the  federal  Department  of  Agriculture  deals  with  Farm 
and  Terminal  Market  Prices:  Wheat,  Corn,  and  Oats,  1920-1921,  by 
J.  W.  Strowbridge  (September,  1922,  pp.  58).  There  are  maps  showing 
production  by  states.  Bull.  1068,  by  J.  T.  Sanders,  is  entitled  Farm 
Ownership  and  Tenancy  in  the  Black  Prairies  of  Texas. 

Some  of  the  matierial  prepared  by  the  Bureau  of  Agricultural  Economics 
and  published  in  the  1921  Yearbook  of  the  United  States  Department  of 
Agriculture  is  being  reprinted  in  eleven  Yearbook  Separates.  The  follow- 
ing nine  are  now  available  for  distribution : 

No.  867,  Imports  and  Exports  of  Agricultural  Products. 

No.  868,  Statistics  of  Grain  Crops. 

No.  869,  Statistics  of  Crops  Other  than  Grain  Crops. 

No.  870,  Live  Stock. 

No.  871,  Miscellaneous  Agricultural  Statistics. 

No.  872,   The  Corn  Crop. 

No.  873,   Wheat  Production  and  Marketing. 

No.  877,   The  Cotton  Situation. 

No.  878,  A  Graphic  Summary  of  American  Agriculture. 

The  remaining  two.  No.  874,  Our  Beef  Supply,  and  No.  876,  Cost  Data 
for  Farm  Products,  are  in  press. 

The  Department  of  Agriculture  has  prepared  a  useful  list  of  Publications 
issued  by  the  Bureau  of  Agricultural  Economics,  including  those  issued  by 
the  Bureau  of  Markets  prior  to  July,  1921,  and  those  issued  by  the  Bureau 
of  Markets  and  Crop  Estimates  from  July,  1921,  to  July,  1922  (pp.  9). 

The  Joint  Hearings,  representing  the  testimony  of  some  fifty  witnesses, 
before  the  Senate  Committee  on  Commerce  and  the  House  Committee  on 
the  Merchant  Marine  act  of  1920  have  been  printed  in  two  volumes  (Wash- 
ington, 1922,  pp.  12,059).  These  Hearings  were  held  in  April  and  May 
of  this  year.  The  majority  views  of  the  House  Committee  appear  as 
Report  No.  1112,  under  the  title  of  American  Merchant  Marine  (67  Cong., 

2  Sess.,  June  16,  1922,  pp.  35),  and  the  views  of  the  minority  as  Report 
No.  1112,  part  2,  under  the  title  The  Ship  Subsidy  Bill  (67  Cong.,  2  Sess., 
June  28,  1922,  pp.  35). 

The  Hearings  before  a  Subcommittee  of  the  Senate  Committee  on  Agri- 
culture and   Forestry  on  the  proposal  to   amend   Section   5   of  the   Cotton 


722  Documents  and  Notes  [December 

Futures  act  and  to  prevent  sale  of  cotton  and  grain  in  future  markets  have 
been  printed  (pp.  175).  These  Hearings  were  held  during  the  first  half 
of  the  current  year.  This  same  committee  has  also  printed  the  Hearings  on 
Investigation  of  Organizations  Engaged  in  Combating  Legislation  for  the 
Relief  of  Agriculture  (pp.  324). 

The  Chamber  of  Commerce  of  Minneapolis  has  collected  a  series  of 
illustrated  articles  on  The  Nature  and  Functions  of  a  Grain  Exchange,  The 
Flour  Mills  of  Minneapolis,  The  Linseed  Oil  Industry,  and  Future  Trading, 
Hedging  and  Speculation  in  Grain  Exchanges,  prepared  by  John  C.  Mc- 
Hugh,  Secretary  of  the  Chamber.  The  Cham,ber  also  has  for  distribution 
other  pamphlets  bearing  upon  grain  marketing,  namely.  Question  Book 
Regarding  Present  Grain  Marketing  System  (pp.  23),  and  Handling  the 
Farmers'  Grain,  by  F.  R.  Durant  (pp.  31). 

From  the  National  Coal  Association  (Washington,  D.  C.)  have  been 
received  a  number  of  pamphlets  as  follows:  Statement  of  J.  D.  A.  Morroro 
before  the  Committee  on  Labor  of  the  House  of  Representatives,  April  25, 
1922;  The  Objections  of  Bituminous  Coal  Operators  of  the  United  States 
to  Regidation  of  Business  by  Legislation,  and  Particularly  to  Senate  Bill 
1807 ,  Introduced  by  Senator  Frelinghuysen,  are  Fundamental;  Transporta- 
tion, the  Problem  of  Soft  Coal;  The  1920  Soft  Coal  Shortage. 

The  First  National  Bank  of  Boston  is  publishing  a  series  of  economic 
maps  of  the  principal  countries  of  the  world  under  the  general  title  Markets 
of  the  World.  The  first  series  of  maps  was  issued  in  1920;  to  this  have 
been  more  recently  added  the  United  States  and  Canada  series.  The  maps 
contain  data  showing  population  and  are  accompanied  by  text  containing  a 
considerable  amount  of  statistical  data  relating  to  the  several  countries  and 
states.  This  series  is  made  up  in  loose-leaf  form.  The  maps  are  clear  and 
information  is  very  conveniently  arranged. 

From  the  Bureau  of  Business  Research  (Professor  Horace  Secrist,  Di- 
rector) of  Northwestern  University  School  of  Commerce  have  been  received 
the  following  studies: 

Wholesale  Price  Movements  of  Paper  in  Chicago,  January  1,  1913  to 
June  30,  1922,  by  Jam,es  Grantham  (pp.  6). 

Stock  Turnover  in  Retail  Clothing  Stores,  by  Professor  Secrist  (pp.  10). 

Amounts  Sold  per  Full-time  Salesman  in  Retail  Clothing  Stores,  by 
Professor  Secrist  and  Blanche  L.  Altman  (pp.  14). 

The  Control  of  Expenses  and  Profits  in  the  Retail  Merchandising  of 
Clothing,  by  Professor  Secrist  (pp.  14).      (Chicago,  price  50  cents  each.) 

Corporations 

The  Report  of  the  Joint  Commission  of  Agricultural  Inquiry  on 
Transportation.  The  Joint  Commission  was  created  by  a  resolution 
adopted  by  the  United  States  Senate  on  May  31,  1921,  and  by  the  House 
of  Representatives  on  June  7,  1921,  for  the  purpose  of  investigating  the 
causes  for  the  agricultural  depression.     The  Committee  divided  its  inquiry 


1922]  Corporations  723 

into  four  major  subjects — the  condition  of  agriculture,  credit,  transporta- 
tion, and  marketing  and  distribution.  The  volume  before  us  on  Trans- 
portation (Part  III  of  Report  of  Joint  Commission  of  Agricultural  In- 
quiry, 67  Cong.,  1  Sess.,  Rep.  408,  part  3,  Washington,  Gov.  Prtg.  Office, 
1922,  pp.  686)  results  from  an  exhaustive  investigation.  It  is  stated  that  the 
collection  and  assembling  of  the  data  in  this  report  represents  the  com- 
bined efforts  of  over  1,600  people  and  the  circulation  of  more  than  250,000 
questionnaires.  The  scope  of  the  report  may  be  seen  from  the  following 
chapter  headings:  I.  Economic  Relationship  of  Agriculture,  Industry, 
and  Transportation;  II.  Transportation  by  Steam  Railroads;  III.  Railroad 
Management  and  Organization;  IV.  Railway  Finance;  V.  Railroad  Express 
Companies;  VI.  Parcel  Post;  VII.  Electric  Railways;  VIII.  Highway 
Transportation;  IX.  Transportation  by  Water;  X.  Federal  and  State  Regu- 
lation of  Transportation;  XI.  Foreign  Railway  System;  and  XII.  History 
of  Railway  Transportation.  An  attempt  was  thus  made  to  review  the  trans- 
portation system  of  the  United  States  as  a  whole.  The  Commission  was  to 
report  in  ninety  days,  but  the  time  was  subsequently  extended  to  April  15, 
1922, 

Viewed  as  an  investigation,  the  chief  contribution  lies  in  chapter  1, 
which  contains  a  collection  of  data  showing  the  transportation  charges 
in  relation  to  the  market  prices  of  a  selected  list  of  commodities.  The 
report  first  makes  an  estimate  of  the  relation  between  freight  revenue 
and  the  value  of  all  commodities  transported.  The  total  value  at  point 
of  origin  of  the  commodities  carried  in  1914  is  estimated  on  the  basis  of 
census  reports  at  $33,298,000,000,  the  freight  charges  for  1914  being  about 
6.05  per  cent  of  this  amount.  The  application  of  tonnage  and  revenue 
figures  from  railroad  reports  to  values  found  from  census  reports  of  com- 
modities produced,  with  an  estimated  allowance  for  goods  consumed  locally, 
is  open  to  serious  question.  It  may  be  noted  that  in  a  letter  to  the  chairman 
of  the  House  Committee  on  Interstate  and  Foreign  Commerce  (Hearino-s 
on  H.  R.  4378,  1919,  vol.  2,  p.  2426)  Mr.  J.  Kruttschnitt  submitted  an 
estimate  by  a  different  process  of  the  value  of  goods  transported  in  1914 
by  freight  of  $1,482,000,000,  of  which  sum  the  freight  revenue  was  3.6  per 
cent.  These  two  estimates  are  difficult  to  check  because  of  the  laro-e 
amount  of  miscellaneous  tonnage  to  which  no  value  per  ton  can  be  correctly 
assigned. 

However,  the  chief  discussion  is  in  regard  to  the  charges  and  value  of 
special  commodities.  An  analysis  is  given  of  9,476  cars  of  fresh  fruits 
and  vegetables  handled  in  eastern  cities  between  September,  1920,  and 
July,  1921.  The  average  haul  was  1,400  miles.  Of  the  wholesale  selling 
price  at  destination  the  shipper  received  60  per  cent,  transportation  charges 
amount  to  32  per  cent,  and  taxes,  handling,  and  profits  of  distribution, 
constituted  the  remaining  8  per  cent.      The  percentage  absorbed  by  trans- 


724  Documents  and  Notes  [December 

portation  varied  widely  for  various  classes  of  fruits  and  vegetables,  the 
percentage  for  barreled  apples  being  shown  as  11.65  and  for  Texas  cabbage 
as  79.23  per  cent.  Information  regarding  prices  and  freight  rates  is  also 
given  for  the  following  articles :  grain,  cotton,  livestock,  wool,  butter,  cheese, 
condensed  milk,  poultry,  eggs,  fertilizer,  agricultural  implements,  ore,  iron 
and  steel,  coal,  lumber,  shingles,  paper,  petroleum  products,  cement,  hollow 
tile,  boots,  shoes,  dry  goods,  and  cotton  piece  goods. 

What  conclusions  are  to  be  drawn  from  such  facts  regarding  freight 
rates  and  market  prices?  It  is  shown  that  on  Texas  cabbage  the  freight 
rate  to  Chicago  is  much  greater  than  the  price  received  by  the  farmer  while 
"the  amount  of  freight  in  the  average  purchase  of  dry  goods  is  so  small 
that  it  is  difficult  to  show  it."  It  further  appears  that  tremendous  fluctua- 
tions in  the  percentage  take  place  within  a  year  owing  to  fluctuations  in 
market  prices.  The  Joint  Committee  of  Agricultural  Inquiry  draws  the 
general  conclusion  that  "greater  consideration  should  be  given  in  the  future 
by  public  rate-making  authorities  and  by  railroads  in  the  making  of  trans- 
portation rates  to  the  relative  value  of  commodities  and  existing  and  pros- 
pective economic  conditions." 

This  recommendation  is  not  very  definite.  What  is  implied  by  "greater 
consideration"  ?  Some  consideration  has  always  been  given  to  the  rela- 
tive value  of  commodities.  If  it  means  anything  it  must  mean  that  rate 
makers  should  follow  the  market  fluctuations  in  the  prices  of  coal,  wheat, 
and  other  commodities,  and  make  rate  adjustments  accordingly.  In  fact, 
in  another  place  (p.  4-0 i)  the  report  recommends  that  the  Commission 
keep  up  currently  statistics  showing  the  relation  of  prices  of  commodi- 
ties and  freight  rates.  Such  a  recommendation  as  to  the  basis  of  rate 
making  may  well  be  challenged.  There  is  no  evidence  in  the  report  that 
the  probable  consequences  of  such  a  policy  were  analyzed.  It  is  surprising 
that  in  a  volume  which  was  made  to  include  so  many  chapters  remotely 
related  to  the  condition  of  agriculture,  none  was  included  on  the  theory  of 
transportation.  Such  a  chapter  might  have  indicated  that  transportation 
is  a  productive  industry  requiring  labor  and  capital.  Transportation  pro- 
duces a  part  of  the  value  of  the  Texas  cabbage  sold  in  Chicago  just  as 
truly  as  does  agriculture.  Freight  charges  are  not  exactions  to  be  remitted 
when  the  shippers  feel  they  cannot  pay  them.  They  are  the  prices  for 
services.  That  price  should  be  reasonable  at  all  times.  Reasonable  rates 
are  such  that  in  the  aggregate  they  leave  a  net  return  sufficient  to  attract 
capital,  and  such  that  each  class  of  commodities  carried  contributes  to  the 
necessary  aggregate  revenues  in  proportion  to  the  expense  occasioned,  so  far 
as  this  can  be  apportioned,  the  unapportionable  outgo  being  distributed 
in  accordance  with  the  normal  value  of  the  commodities.  To  attempt  to 
follow  temporary  fluctuations  in  market  values  would  introduce  instability 
and  confusion  into  the  rate  structure  and  would  retard  business  enterprise 


1922]  Corporations  725 

more  than  it  would  help  it.  As  the  Interstate  Commerce  Commission  said 
in  a  recent  opinion:  "The  needs  of  commerce  cannot  be  met  if  rates  are 
to  fluctuate  with  market  prices  of  commodities"  (Reduced  Rates,  1922,  68 
I.  C.  C.  676,  734.) 

It  is  impossible,  in  this  review,  to  take  up  all  of  the  conclusions.  The 
introductory  summary  lists  31  recommendations  and  17  findings.  But  there 
are  numerous  other  recommendations  or  findings  scattered  throughout  the 
volume  which  are  not  included  in  the  summary. 

Chapter  2  is  a  review  of  data  relating  to  the  property  investment,  traffic, 
car  and  terminal  facilities,  and  expenditures  of  steam  roads.  There  is  an 
illuminating  discussion  of  the  car  service  problem  with  the  recommendation 
that  a  comprehensive  system  for  the  control  of  freight  car  equipment  be 
adopted.  The  general  conclusion  is  reached  that  with  the  exception  of 
terminal  facilities  and  the  supply  of  freight  car  equipment,  the  present 
facilities  of  the  steam  roads  will,  with  increased  operating  efficiency,  meet 
the  present  needs  for  transportation. 

Chapter  3,  which  covers  only  three  pages,  was  evidently  intended  to 
take  up  the  question  of  operating  efficiency.  It  is  stated  that  it  was  im- 
possible for  the  Commission  "to  make  such  an  examination  and  analysis 
of  the  operation  of  each  individual  railroad  as  would  permit  arriving  at 
conclusions  or  making  suggestions  with  respect  to  the  efficiency  of  each 
individual  line."  Chapter  4  is  a  review  of  the  elements  of  railroad  finance. 
It  states  that  the  Transportation  act  as  a  whole  is  "a  most  valuable  piece  of 
constructive  legislation  and  gives  promise  of  working  out  to  the  great  benefit 
of  the  country." 

Chapters  5  to  9  inclusive  are  convenient  collections  of  data  on  the  subjects 
named  but  do  not  call  for  special  comment.  Chapter  10  gives  a  succinct 
review  of  the  laws  relating  to  federal  regulation  and  describes  the  organiza- 
tion of  the  Interstate  Commerce  Commission.  The  report  expresses  the 
view  that  regional  offices  of  the  Commission  should  be  established  as  con- 
tributing to  the  convenience  of  shippers,  to  a  better  coordination  of  interstate 
and  intrastate  rates,  and  to  a  more  thorough  understanding  of  the  relation- 
ship between  rates  and  local  conditions.  It  is  not  clear  just  what  is  recom- 
mended. Does  a  "regional  office"  mean  merely  a  branch  office,  or  a  regional 
commission.''  A  fuller  discussion  of  this  matter  will  be  found  in  the 
testimony  of  Mr.  E.  E.  Clark,  then  chairman  of  the  Interstate  Commerce 
Commission,  in  Hearings  before  the  Committee  on  Interstate  and  Foreign 
Commerce  on  H.  R.  4378  (vol.  Ill,  pp.  2894-2896),  in  1919.  There  is  also 
a  recommendation  that  an  agency  be  created  in  the  Interstate  Commerce 
Commission  to  secure  and  correlate  statistical  and  other  information  with 
reference  to  the  related  activities — transportation,  trade,  industry,  and  com- 
merce. It  is  not  made  clear  what  is  meant  by  correlation  of  the  information. 
The  reprint  of  statistics  now  published  by  other  branches  of  the  government 


726  Documents  and  Notes  [December 

might  be  vetoed  by  those  who  are  trying  to  cut  down  government  expenses. 

The  chapter  also  recommends  a  central  control  of  freight  car  supply 
and  increased  efficiency  in  the  operation  of  freight  terminals.  It  further 
recommends  or  finds  that  railroad  consolidation  should  not  be  compulsory, 
that  transcontinental  rates  may  be  lower  to  Pacific  coast  terminals  than  to 
intermediate  points,  that  a  "continued  arbitration  body"  multiplies  rather 
than  minimizes  labor  disputes,  that  the  respective  authorities  of  the  Inter- 
state Commerce  Commission  and  Shipping  Board  should  be  reconciled  by 
Congress,  that  present  full  crew  laws  need  modification,  that  the  trends 
incident  to  motor  transportation  should  be  studied,  that  the  War  Department 
be  directed  to  report  on  proposed  waterway  improvements  before  they  arc 
adopted,  that  regulation  of  rates  on  coastwise  traffic  is  not  feasible  or 
necessary  at  present,  that  the  American  merchant  marine  cannot  be  main- 
tained on  a  proper  basis  without  some  sort  of  government  aid,  and  that 
Panama  Canal  tolls  should  be  based  upon  the  cost  of  operation  and  the 
value  of  the  service  rendered.  With  such  a  variety  of  topics  considered, 
a  thorough  discussion  is  not  to  be  looked  for.  It  is  useful,  however,  to  have 
a  mere  catalogue  of  present-day  transportation  problems. 

Chapter  11  shows  that  transportation  throughout  the  world  has  been 
affected  by  conditions  created  by  the  World  War.  The  report  ventures 
the  opinion  that  state-owned  railroads  have  not  recovered  from  the  effects 
of  the  war  or  met  the  economic  dislocations  with  greater  effectiveness  than 
those  privately  owned  and  operated.  The  facts  cited  do  not  indicate  just 
what  effect  public  ownership  and  private  ownership  respectively  had  in  the 
recovery  from  war  disclocations.  Certainly  private  railroads  received 
government  aid  during  and  after  the  war.  For  much  of  the  material  in  the 
historical  sketch  of  transportation,  acknowledgment  of  indebtedness  is  made 
to  When  Railroads  Were  Nerv  by  Charles  Frederick  Carter,  and  Henry  V. 
Poor's  Sketch  of  the  Rise  and  Progress  of  Internal  I mprovements . 

The  volume  as  a  whole,  with  its  variety  of  data  and  well-conceived 
charts,  is  a  useful  compilation  for  students  on  transportation.  Teachers 
might  well  use  it  as  a  supplementary  text  in  a  course  on  transportation. 

M.   O.   LORENZ. 

Washington,  D.  C. 

The  Library  of  the  Bureau  of  Railway  Economics  has  issued  in  mimeo- 
graphed form  an  elaborate  list  of  references  to  literature  relating  to  the 
Union  Pacific  System  (Aug.  15,  1922,  pp.  298).  The  list  of  authors  re- 
ferred to  numbers  over  600.  The  titles  are  arranged,  first,  by  the  name 
of  the  railroads,  and,  second,  under  each  road  in  chronological  order.  An 
attempt  is  made  to  indicate  the  libraries  where  the  books  and  articles  in- 
cluded in  the  list  may  be  consulted. 

The  following  reports  relating  to  corporations  and  public  utilities  have 
been  received: 


1922]  Labor  727 

Corporation  Lares  of  State  of  Connecticut,  Revised  November  1,  1921 
(Hartford,  1921,  pp.  108). 

Thirteenth  Annual  Report  of  the  Public  Service  Commission  for  the 
First  District  of  the  State  of  New  York,  for  the  Year  Ended  December  31, 
1919.     Vol  1,  Report  and  Appendix  (Albany,  pp.  358). 

Forty-third  Annual  Report  of  the  Railroad  Commission  of  South  Carolina, 
1921  (Columbia,  1922,  pp.  212). 

General  Corporation  Lazes  of  West  Virginia,  1921  (Charleston,  pp.  131). 

The  Public  Service  Commission,  State  of  West  Virginia,  Seventh — 
Eighth  Annual  Reports  (Charleston,  pp.  946). 

The  Bell  Telephone  Securities  Company  has  prepared  a  pamplilet  on 
Bell  Telephone  Securities  (New  York,  May  1,  1922,  pp.  51).  This  con- 
tains reference  tables  and  descriptions  for  the  use  of  brokers  and  invest- 
ment houses  with  an  introductory  statement  of  the  organization  and  financ- 
ing of  the  American  Telephone  and  Telegraph  Company  and  associated 
companies. 

Labor 

The  federal  Bureau  of  Labor  Statistics  has  issued: 

No.  296,  Wholesale  Prices,  1890  to  1920  (Washington,  June,  1922,  pp. 
2-17). 

No.  298,  Causes  and  Prevention  of  Accidents  in  the  Iron  and  Steel  Indus- 
try, 1910-1919,  by  Lucian  W.  Chaney  (June,  1922,  pp.  398). 
Contains  many  interesting  charts  showing  fluctuations  during 
the  period  under  consideration. 

No.    300,  Retail  Prices,  1913  to  December,  1920   (May,  1922,  pp.  217). 

No.  30i,  Proceedings  of  the  Eighth  Annual  Meeting  of  the  International 
Association  of  Industrial  Accident  Boards  and  Corninissions,  held 
at  Chicago,  September,  1921   (Aug.,  1922,  pp.  251). 

No.  305,  Wages  and  Hours  of  Labor  in  the  Iron  and  Steel  Industry:  1907 
to  1920  (July,  1922,  pp.  201). 

No.  316,  Hours  and  Earnings  in  Anthracite  and  Bituminous  Coal  Mining 
(July,  1922,  pp.  63).  The  data  for  anthracite  are  for  date  Jan- 
uary, 1922;  and  for  bituminous,  the  winter  of  1921-1922. 

The  National  Personnel  Association  (20  Vesey  Street,  New  York)  an- 
nounces that  it  has  for  sale  a  series  of  publications  formerly  issued  by  the 
National  Association  of  Corporation  Training,  which  hitherto  has  not  been 
available  for  purchase.  In  the  "Confidential  Report  Service"  are  to  be 
noted:  No.  1,  An  Initial  Survey  of  the  Problem  of  Labor  Turnover  (price, 
50c);  No.  2,  An  Initial  Survey  of  the  Present  Status  of  Business  Corres- 
pondence (50c);  No.  3,  A  Survey  of  Some  of  the  Industrial-Educational 
Problems  of  Reconstruction  (25c)  ;  No.  4,  A  Preliminary  Survey  of  the 
Problem  of  Representation  in  Industry  ($2);  No.  5,  Bonus  Plans  and 
Other  Schemes  for  Insuring  Satisfactory  Punctuality  and  Attendance  Re- 
cords ($3) ;  No.  6,  Methods  of  Transfer  and  Promotion  in  Business  Organ- 


728  Documents  and  Notes  [December 

isations  ($1);  No.  7,  Employe  Stock-Oumership  Plans  ($5).  In  the 
"Special  Report  Service":  No.  1,  Trade  Apprenticeship  Schools  ($1); 
No.  2,  Office  Work  Schools  ($1);  No.  3,  Methods  of  Industrial  Education 
(50c);  No.  4,  Hijgiene  and  Sanitation  for  the  Worker  ($1);  No.  5,  A 
Survey  of  the  Housing  Problem  (50c);  No.  6,  Eitiploi/e  Insurance  ($2.50); 
No.  7,  Business  Suggestions  from  Employes  ($4.50) .  This  Association  has 
also  recently  issued  Special  Reports  No.  1,  Pensions  for  Industrial  and 
Commercial  Employees  (Aug.,  1922,  pp.  22),  and  No.  2,  Disseminating 
Information  among  Employees  (Aug.,  1922,  pp.  8). 

The  Decisions  of  the  United  States  Railroad  Labor  Board  -with  Addenda 
and  Interpretations,  1021,  have  been  collected  and  printed  in  a  single  volume 
(Chicago,  1922,  pp.  1007).     The  volume  contains  a  cumulative  index-digest. 

The  American  Smelting  and  Refining  Company  has  issued  for  informa- 
tion of  stockholders  several  pamphlets  dealing  with  "Improved  Industrial 
Relations."  Among  the  topics  considered  are  Accident  Prevention,  Pen- 
sions and  Welfare,  and  Raising  Output  and  Reducing  Costs. 

The  following  public  documents  relating  to  labor  questions  have  been 
received: 

Labor  Laws  of  the  State  of  California,  1921  (Sacramento,  1922,  pp.  292). 

Second  Annual  Report  of  the  Court  of  Industrial  Relations  of  the  State 
of  Kansas,  1921  (Topeka,  1922,  pp.  107). 

Thirtieth  Annual  Report  of  the  Maryland  State  Board  of  Labor  and 
Statistics,  1921  (Baltimore,  pp.  383). 

Nexv  York  State  Labor  Law,  with  Amendments,  Additions  and  Annota- 
tions to  August  1,  1922  (Albany,  1922,  pp.  143). 

Nexo  York  State  Miscellaneous  Labor  Laws,  with  Amendments,  Additions 
and  Annotations  to  August  1,  1922  (Albany,  1922,  pp.  165). 

Money,  Prices,  Credit,  and  Banking 

The  Present  Branch  Banking  Controversy.  Branch  banking  is  a 
phase  of  American  banking  which  has  at  various  times  in  the  history  of  the 
United  States  assumed  considerable  importance.  During  the  past  decade 
branch  banks  or  branch  offices  have  been  opened  by  state  banks  in  various 
states.  The  competition  thus  introduced  not  only  between  state  banks  but 
of  the  state  banks  with  the  national  banks  has  been  very  keen.  Under  our 
national  banking  laws  and  the  rulings  of  the  Comptroller  of  the  Currency, 
it  has  been  generally  held  that  national  banks  were  prohibited  from  establish- 
ing branches. 

In  those  few  instances  where  national  banks  have  branches,  they  have 
been  established  under  special  rulings  or  under  authority  of  an  act  of 
Congress  which  permits  a  national  bank  to  purchase  a  state  bank  and  operate 
such  branches  as  the  state  institution  may  already  have  established. 

The  question  is  now  one  of  very  active  discussion  among  American  bank- 
ers, and  at  the  recent  annual  meeting  of  the  American  Bankers  Association 


1922]  Money,  Prices,  Credit,  and  Banking  729 

resolutions  were  passed  condemning  the  policy  of  branch  banking  either  by 
state  or  b}'  national  banks.  The  resolution  stated:  "We  regard  branch 
banking  or  the  establishment  of  additional  offices  by  banks  as  detrimental 
to  the  best  interests  of  the  people  of  the  United  States.  Branch  banking 
is  contrary  to  public  policy,  violates  the  basic  principles  of  our  government, 
and  concentrates  the  credit  of  the  nation  and  the  power  of  money  in  the 
hands  of  a  few." 

In  addition  to  the  legalized  branches  of  both  state  and  national  banks 
now  existing,  there  have  developed  in  certain  sections  of  the  country  chains 
of  banks ;  although  not  openly  a  system  of  branch  banks,  they  actually  con- 
stitute to  all  intents  and  purposes  a  branch  banking  system.  Such  chain 
bank  systems  exist  in  many  parts  of  the  middle  west  where  the  opposition 
to  branch  banking  is  particularly  strong.  Banking  of  this  type  has  all  the 
appearance  of  independent  banking,  but  actually,  through  a  community 
of  interest  or  common  ownership,  it  constitutes  a  variety  of  branch  banking 
which  from  many  points  of  view  is  the  least  desirable  of  all  branch  banking 
systems  because  of  the  hidden  responsibility  of  such  ostensibly  independent 
banks. 

There  is  great  diversity  in  the  banking  laws  of  the  various  states  and 
much  of  the  present  agitation  arose  from  the  fear  on  the  part  of  state  banks, 
especially  in  the  western  states,  that  national  banks  as  well  as  large  state 
banks  in  time  would  open  branches  in  various  parts  of  the  state.  Such 
banks  feared  the  competition  of  the  national  banks  and,  on  the  other  hand, 
national  banks  in  many  states  have  been  confronted  with  the  competition 
introduced  in  many  cities  and  in  a  few  states  by  the  branches  of  state  banks. 

Because  this  subject  is  comparatively  new  to  most  American  bankers  there 
exists  considerable  misinformation  on  the  subject.  Prejudice,  sentiment, 
and  imagined  evil  have  dominated  much  of  the  discussion  that  has  centered 
around  this  question.  To  some  people  branch  banking  has  meant  a  system 
of  banking  such  as  that  which  exists  in  many  of  the  European  countries  and 
Canada.  The  extreme  types  of  the  system  rather  than  possible  modi- 
fications to  meet  the  existing  needs  of  American  business  have  been  pictured 
by  those  opposing  the  idea.  A  study  of  the  situation  in  the  light  of  the 
actual  facts  that  have  developed  from  this  controversy  shows  that  those 
favoring  the  branch  banking  idea  in  this  country  have  had  in  mind  an 
entirely  different  conception  from  that  system  which  is  in  vogue  in  many 
foreign  countries.  A  careful  analysis  of  the  motive  behind  the  present 
movement  on  the  part  of  national  banks  to  obtain  the  branch  privilege  shows 
that  it  is  not  a  movement  for  a  state  or  nation-wide  system,  but  for  the 
right  to  establish  additional  offices  in  the  local  community  of  the  parent 
institutions.  Such  a  branch  banking  system  is  an  entirely  different  thing, 
both  in  its  fundamental  theory  and  in  its  practical  operation,  from  the 
branch  banking  systems  of  Europe  or  the  chain  banking  system  that  already 
exists. 


730  Documents  and  Notes  [December 

A  Survey  of  State  Banking  Latvs  xvith  Reference  to  Branch  Banking 

The  following  study  of  the  banking  laws  of  the  various  states  in  the  union 
with  respect  to  branch  banking  shows  what  a  wide  diversity  exists  not  only 
as  to  the  laws  but  as  to  policy.  In  a  general  way,  the  states  can  be  grouped 
as  follows  with  regard  to  the  question  of  branch  banking. 

Group   I.      States  permitting  branch  banking. 

(a)  Branches  permitted  in  cities  where  main  office  is  located:  New  York, 

Maine,  Michigan,  and  Ohio. 

(b)  States  permitting  state-wide  branch  banking:  Massachusetts,  Oregon 

(conditional).  North  Carolina,  Delaware,  Rhode  Island,  Pennsyl- 
vania,   Louisiana,    Tennessee,    Mississippi,    Arizona,    California, 
Georgia,    Virginia    ($25,000    capital    or    more).    South    Carolina, 
Wyoming  (b}^  implication). 
Group   II.      States  prohibiting  branch  banking,  but  having  some  branches 
that  were  established  either  before  the  law  prohibiting  them  was  passed, 
or  by  special  legislation:  Washington,  Wisconsin,  New  Jersey,  Florida, 
Alabama,   Indiana,  Arkansas,   Maryland    (no   special   statute   permitting 
branches). 
Group   III.      States  absolutely  prohibiting  branch  banking  and  in  which  no 
banks  have  branches:     Kentucky,  New  Hampshire,  North  Dakota,  Idaho, 
Montana,    Illinois,    Colorado,    New    Mexico,   Vermont,    Minnesota,   AVest 
Virginia,  Nebraska,  Iowa,  Kansas,  Texas,  Connecticut,  Oklahoma,  South 
Dakota,  Utah,  Nevada,  and  Missouri. 

Or,  to  present  the  same  story  from  another  point  of  view,  the  states  might 
be  grouped  as  follows  : 

1.  Seventeen  states  tchich  permit  branch  banking:  Arizona,  California, 
Delaware,  Georgia,  Louisiana  (banks,  savings  banks  and  trust  companies 
having  paid-in  capital  and  surplus  of  one  million  dollars  or  over),  Maine 
(permitted  as  to  trust  companies),  Massachusetts  (permitted  as  to  trust 
companies),  Mississippi,  New  York,  North  Carolina,  Ohio,  Pennsylvania, 
Rhode  Island  (permitted  as  to  trust  companies).  South  Carolina,  Tenn- 
essee, Virginia,  Wyoming. 

2.  Seventeen  states  tchich  have  no  specific  provision:  Arkansas^  District 
of  Columbia,  Florida',  Illinois,  Iowa,  Kansas,  Kentucky',  Maryland', 
Michigan',  Minnesota,  Montana',  Nebraska,  Nevada,  New  Jersey  (pro- 
hibited as  to  trust  companies — no  provision  as  to  banks),  Oklahoma,  Ver- 
mont, West  Virginia. 

3.  Fifteen  states  rvhich  prohibit  branch  banking:  Alabama,  Colorado, 
Connecticut,  Idaho,  Indiana,  Missouri,  New  Hampshire,  New  Mexico, 
North  Dakota  (by  implication),  Oregon,  South  Dakota  (by  implication), 
Texas,  Utah,  Washington,  Wisconsin. 

On  the  basis  of  the  foregoing  survey,  it  is  patent  that  we  do  not  have 
in  the  United  States  anything  like  a  uniform  policy  with  respect  to  branch 
banking.  The  contention  of  some  of  the  opponents  of  this  branch  banking 
idea,  that  such  a  system  is  un-American,  is  obviously  beside  the  point.     We 

'Have  some  branch  banks  in  state,  established  under  special  circumstances. 

'Banking  commissioner  has  given  Liberty  Insurance  Bank  of  Louisville  right  to 
open  offices,  to  receive  deposits,  etc.,  when  national  banks  in  Kentucky  inaugurate 
such  a  policy. 


1922]  Money,  Prices,  Credit,  and  Banking  731 

have  national  banks  with  branches  and  national  banks  without  branches, 
depending  in  part  upon  the  particular  legislation  of  the  state  and  congress, 
as  well  as  the  peculiar  business  development  of  the  community.  Likewise 
we  have  some  state  banks  with  branches  and  some  without,  depending  again 
upon  particular  state  legislation  and  commercial  conditions.  Obviously 
there  exists  no  basis  for  the  assertion  that  the  proposal  to  establish  branch 
banks  is  a  departure  from  a  long-established  system  of  banking.  The 
American  banking  system  is  very  complex  and  diverse.  In  this  it  is  not 
different  from  other  branches  of  business.  Banking,  like  business  in  gen- 
eral, must  be  responsive  to  change  in  industrial  conditions.  No  single 
business  enterprise  has  ever  yet  assumed  a  fixed  form  and  continued  un- 
changed for  any  considerable  period  of  time.  "Abandoning  the  faith  and 
practice  of  the  Fathers"  has  always  been  an  appeal  to  the  emotions  and 
has  been  brought  forth  usually  either  when  facts  were  not  available  or 
when  there  was  an  unwillingness  to  recognize  them.  Any  one  at  all  familiar 
with  banking  history  in  the  United  States  knows  quite  well  that  it  has  never 
been  characterized  by  uniformity.  We  have  experimented,  as  is  the  practice 
of  all  new  countries,  with  many  kinds  of  banking  systems,  as  well  as  with 
various  types  of  business  organization.  If  we  are  to  progress  in  the  future 
as  we  have  in  the  past,  it  is  safe  to  assert  that  we  are  not  through  with  this 
experimentation.  A  static  condition  of  an  individual,  a  business,  or  a 
nation  always  argues  that  q  period  of  growth  and  progress  has  come  to  a 
close. 

Objections  to  an  Extension  of  Branch  Banking 

Opposition  to  the  branch  banking  idea  has  been  very  vigorous  in  certain 
quarters.  Chief  among  the  objections  that  have  been  raised  has  been  the 
fear  that  a  branch  banking  system  will  lead  ultimately  to  too  great  a 
centralization  of  banking  funds.  The  old  fear  of  playing  into  the  hands  of 
a  "money  power"  has  again  arisen.  It  is  rather  interesting  in  this  con- 
nection to  point  out  some  of  the  fallacies  connected  with  this  contention. 
To  the  so-called  money  power  there  has  always  been  ascribed  the  power  to 
control  the  interest  rate.  The  extent  to  which  the  price  of  capital  is 
determined  by  the  interplay  of  many  economic  forces  and  not  by  the  whims 
of  any  group  or  clique  has  often  been  shown  in  the  past  and  is  well  illus- 
trated by  existing  conditions,  yet  the  old  fallacious  ideas  still  persist.  Un- 
fortunately, the  mobility  and  true  character  of  wealth  is  not  as  well  under- 
stood as  it  should  be.  Many  people  apparently  are  not  aware  of  the  fact 
that  wealth  must,  at  all  times,  be  productively  employed  if  it  is  to  be  of  any 
lasting  benefit  to  those  who  temporarily  control  it.  Goods  can  be  profitably 
produced  only  when  they  meet  the  needs  of  society.  The  value  of  the 
capital  fund  existing  in  a  country  is  determined  by  the  demands  of  society 
and  not  by  the  will  of  those  who  control  the  capital.      The  idea  that  capital 


732  Doctiments  and  Notes  [December 

funds  can  be  manipulated  in  such  a  way  as  to  create  artificially  a  shortage 
or  abundance  to  the  benefit  of  a  particular  class,  is  entirely  erroneous.  The 
very  permanence  of  the  capital  fund  is  dependent  upon  its  continued  pro- 
ductive utilization.  There  exists  no  middle  ground.  In  the  light  of  these 
facts,  raising  a  hue  and  cry  over  the  possibility  of  creating  a  money  power 
through  a  branch  banking  system  illustrates  the  fallacy  of  some  of  these 
popular  notions.  As  a  matter  of  fact,  a  branch  banking  system  would  be  more 
likely  to  benefit  the  masses  and  reduce  the  advantage  of  the  wealthy  rather 
than  to  injure  them,  since  the  more  easily  capital  can  flow  from  one  part 
of  the  country  to  another  and  from  one  part  of  a  community  to  another  in 
response  to  opportunities  for  its  productive  uses,  the  greater  the  benefit, 
in  all  probability,  that  would  accrue  to  the  community.  This  would  produce 
a  uniform  interest  rate  based  upon  the  total  capital  fund  in  relation  to  the 
total  demand.  It  is  the  barriers  that  are  set  up  to  the  free  flow  of  capital 
from  one  community  to  another  that  act  as  a  handicap  to  production  and 
paralyze  industry,  and  create  abnormal  profits  for  capital.  Money  monop- 
oly is  possible  only  in  restricted  areas ;  it  is  impossible  if  all  the  available 
funds  of  the  country  are  available  equally  in  all  parts  of  the  country. 

Underlijing  Factors  Creating  Present  Demand  for  Branch  Banks 

As  was  earlier  pointed  out,  the  present  demand  for  the  right  to  establish 
branch  banks  has  come  from  the  large  cities.  Our  federal  reserve  system, 
through  a  system  of  interdistrict  borrowing,  has  created  a  mobility  in  our 
banking  facilities  that  admirably  meets  the  needs  of  the  country.  This 
federally  controlled  branch  banking  system  has  eliminated  the  old  obstacles 
to  the  free  flow  of  funds  from  one  part  of  the  country  to  another,  and  the 
present  demand  for  branch  banking  has,  as  a  consequence,  not  come  from 
any  desire  to  establish  state-wide  or  country-wide  branch  banking.  It  has 
come  about  rather  as  a  result  of  community  needs  within  certain  restricted 
commercial  areas,  especially  in  the  rapidly  growing  metropolitan  areas. 

With  the  quick  growth  of  our  cities  to  the  point  where  they  now  cover  a 
vast  area,  the  banking  problem  has  become  difficult,  not  only  for  the  banker 
but  for  the  business  man  as  well.  Business  establishments  that  were  origin- 
ally in  the  older  industrial  centers  have  been  compelled  to  move  to  other 
districts  in  order  that  their  growth  be  not  restricted.  As  a  consequence  the 
distances  between  them  and  their  banking  connections  have  increased  to  a 
point  where  their  old  banking  connection  is,  in  many  cases,  inconvenient. 
This  shifting  of  the  industrial  centers  in  our  large  cities  has  created  a  new 
banking  problem,  which,  unless  relief  is  granted,  will  find  financial  insti- 
tutions penalized  by  arbitrary  legal  restrictions. 

There  exists  no  good  reason  for  preventing  a  financial  institution  from 
expanding  to  meet  the  needs  of  its  customers  as  a  result  of  sound  industrial 
progress  any  more  than  for  legally  restricting  the  growth  of  an  industrial 


1922]  Money,  Prices,  Credit,  and  Banking  733 

establishment  or  its  efforts  to  meet  the  industrial  needs  of  the  nation. 
Fifty  years  ago  the  industrial  centers  in  our  large  cities  were  confined 
usually  to  a  single  area,  making  it  entirely  feasible  and  possible  for  an 
urban  bank  to  supply  the  needs  of  industry  from  a  single  location.  Condi- 
tions have  now  changed  and  efforts  are  being  made  to  meet  the  new  situa- 
tion. There  is  nothing  monopolistic  or  reprehensible  in  this  desire  to  be 
in  a  position  to  give  adequate  service  to  their  old  customers  who  have  been 
forced  to  move  to  other  parts  of  tlie  city.  These  are  the  important  and 
underlying  factors  that  have  been  active  in  making  city  banks  seek  to  obtain 
permission  that  will  enable  their  institutions  to  render  service  capable  of 
meeting  the  needs  of  industry  in  their  local  community. 

It  is  sometimes  argued  that  under  a  system  of  branch  banking,  money  is 
taken  out  of  the  community  and  not  reinvested  there.  Such  an  argument 
is  fallacious,  on  the  grounds  of  both  practice  and  theory.  It  is  a  relic  of 
medieval  thinking  when  social  and  business  life  centered  around  small  re- 
stricted neighborhoods  and  each  community  was  always  on  guard  lest  some- 
thing might  be  taken  from  it  and  enrich  or  benefit  some  other  isolated  social 
and  business  group.  If  money  exists  in  a  community,  the  presence  of 
branch  banks  and  other  savings  institutions,  through  their  continual  appeal 
to  save,  increases  the  amounts  which  are  saved  by  the  people  in  the  com- 
munity and  which  are  always  available  to  them;  in  the  absence  of  such  banks 
and  savings  institutions  these  savings  would  usually  be  dissipated.  One 
of  the  chief  purposes  and  justifications  of  branch  banks  in  urban  commu- 
nities is  the  urge  and  impetus  they  give  to  saving.  In  other  words,  the 
savings  bank  feature  of  branch  banking  is  almost  always  more  important 
than  the  purely  commercial  banking  feature.  So  far  as  the  neighborhood's 
money  not  being  reinvested  in  the  community  is  concerned,  it  should  be 
pointed  out  that  both  the  branch  banks  and  other  loaning  institutions  are 
always  on  the  lookout  for  good  investments.  The  particular  neighborhood 
having  a  branch  bank,  like  any  other  neighborhood,  enjoys  that  command 
of  funds  from  the  branch  bank  and  other  investing  institutions  which  its 
credit  and  opportunities  warrant. 

As  a  matter  of  fact  the  funds  now  gathered  into  neighborhood  or  country 
banks  are  not,  as  a  whole,  reinvested  in  the  particular  community  from 
which  the  funds  are  secured.  Such  neighborhood  and  country  banks  not 
only  keep  a  considerable  amount  of  their  funds  with  their  city  correspond- 
ents, but  also  buy  bonds  of  business  corporations  and  commercial  paper  of 
concerns  far  distant.  It  is  idle,  therefore,  to  argue  that  a  neighborhood 
or  a  country  bank  immediately  turns  back  to  the  people  of  the  community 
all  the  surplus  funds  which  are  available  for  investment.  These  banks,  like 
anv  other  banks,  are  seeking  the  very  best  possible  investment  for  their 
funds.  Nor  is  there  in  a  system  of  branch  banks  any  less  intimate  and 
frequent  contact  between  the  people  of  the  community  and  the  bank. 


734  Documents  and  Notes  [December 

The  success  of  the  branch  depends  upon  the  ability  of  the  manager  of  his 
force  to  render  service  to  the  people  of  the  neighborhood,  and  there  is  every 
reason  for  the  employees  of  the  branch  bank  to  render  the  most  efficient 
and  courteous  service  to  all  the  actual  and  potential  patrons  of  the  bank, 
as  well  as  to  take  an  interest  in  the  business  and  life  of  the  people  of  the 
neighborhood. 

The  management  of  the  branch  banks  as  compared  with  individual  banks 
is  not  one  about  which  dogmatism  is  warranted.  However,  it  is  generally 
admitted  that  the  large  city  banks  which  would  be  interested  in  establishing 
city  branches  or  which  have  done  so  have  built  up  a  very  efficient  personnel 
and  have  installed  the  best  system  and  organization  in  their  business. 

W.  F.  Gephart. 

First  National  Bank  in  St.  Louis. 

Compilations  have  been  made  of  state  banking  laws  as  follows :  Banking 
Laws  of  Arizona  Enacted  during  the  First  Special  Session  of  the  Fifth 
Legislature  (Phoenix,  Superintendent  of  Banks,  pp.  53);  Combined  Bank- 
ing Laws  of  the  State  of  Alabama  (Montgomery,  Jan.,  1922,  pp.  45)  ;  State 
Banking  Laws  of  West  Virginia,  1921  (Charleston,  State  Banking  Com- 
missioner, pp.  167). 

The  following  state  documents  relating  to  banking  have  been  received: 

Statement  Shoiving  Total  Resources  and  Liabilities  of  Illinois  State  Banks 
at  the  Close  of  Business,  June  30,  1922  (Springfield,  pp.  743). 

Ninth  Annual  Report  of  the  Banking  Commissioner  of  Kentucky,  1920- 
1921,  (Frankfort,  pp.  160). 

Sixty-fifth  Annual  Report  of  the  Bank  Commission  of  Maine,  1921- 
1922  (Augusta,  1922,  pp.  32). 

Twelfth  Annual  Report  of  the  Bank  Commissioner  of  the  State  of 
Maryland,  Showing  the  Condition  of  State  Banks,  Trust  Companies  and 
Savings  Institutions  (Baltimore,  1922,  pp.  153). 

Annual  Report  of  the  Commissioner  of  Banking  and  Insurance  of  New 
Jersey  Relative  to  Savings  Banks,  Trust  Companies  and  State  Banks  of 
Discount  and  Deposit,  1921  (Trenton,  1922,  pp.  49). 

Annual  Report  of  the  Superintendent  of  Banks  of  Nezv  York  State  Rela- 
tive to  Savings  and  Loan  Associations,  Land  Bank  of  the  State  of  Nezv  York 
and  Credit  Unions  for  1920  (Albany,  1921,  pp.  478). 

Fifteenth  Annual  Report  of  the  Bank  Commissioner  Showing  the  Condi- 
tion of  State  Banking  Institutions  as  of  June  30,  1922  (Providence,  1922, 
pp.  236). 

The  Savings  Bank  Division  of  the  American  Bankers  Association  (New 
York)  has  reprinted  The  Savings  Batik  Business,  by  L.  D.  Woodworth, 
originally  published  in  the  Savings  Bank  Journal  (New  York),  November, 
1922  (pp.  8);  and  New  Records  in  School  Savings  Banking,  Including 
Third  Annual  Report  on  Systems  Throughout  the  United  States  with  Honor 
Roll  for  1921-1922  (pp.  11). 


1922]  Public  Finance  735 

The  Federal  Reserve  Board  has  issued  a  pamphlet,  Questionnaire  on 
Exercise  of  Trust  Powers  by  National  Banks  (Washington,  1922,  pp.  23). 
This  sums  up  the  replies  of  890  banks  which  had  established  trust  companies, 
to  questions  relating  to  the  process  of  advertising  for  trust  business,  and 
success  in  the  operation  of  a  trust  department. 

The  Treasury  Department  lias  clianged  the  form  of  the  monthly  Circula- 
tion Statement,  beginning  with  July  1,  1922,  in  order  to  show  more  accur- 
ately the  distribution  of  the  stock  of  money  in  the  United  States.  "In 
the  new  form  of  statement  only  money  outside  of  the  Treasury  and  the 
Federal  reserve  banks  is  included  in  circulation.  In  previous  circulation 
statements,  money  held  by  the  Federal  reserve  banks  (other  than  money 
held  by  or  for  Federal  reserve  agents,  and  Federal  reserve  notes  held  by 
the  issuing  banks  in  their  own  vaults)  was  included  in  the  amount  in 
circulation.  Under  that  method  of  computing  money  in  circulation  trans- 
fers of  gold  between  a  Federal  reserve  agent  resulted  in  an  apparent  change 
in  the  amount  of  money  in  circulation,  and  there  are  instances  where  the 
Circulation  Statement  owing  to  such  transfers  showed  a  decline  in  money 
in  circulation  when,  as  a  matter  of  fact,  there  had  been  an  actual  increase, 
and  an  increase  when  in  fact  there  had  been  a  decrease.  The  new  form 
shows  a  per  capita  circulation  on  July  1,  1922,  of  $39.87,  whereas  under 
the  form  of  statement  heretofore  used  it  would  have  been  $49.17." 

The  Federal  Farm  Loan  Board  has  prepared  the  Farrn  Loan  Program 
(Washington,  June,  1922,  Circular  no.  5,  pp.  13),  where  will  be  found 
"in  brief  form,  answers  to  the  questions  most  frequently  asked  of  the  act." 

The  Service  Department  of  the  First  National  Bank  in  St.  Louis  (with 
which  Professor  W.  F.  Gephart  is  associated  as  vice-president)  in  a  pamph- 
let. Recent  Developments  in  Commercial  Banking  Policy  (St.  Louis,  Sep- 
tember, 1922,  pp.  8),  has  made  an  interesting  study  of  the  growth  of  bank 
investments  and  securities  during  the  past  two  years  as  compared  with 
holdings  of  commercial  paper.  According  to  this  analysis,  while  prices 
have  declined  40  per  cent  since  May,  1920,  and  the  fiscal  volume  of  goods 
produced  and  manufactured  has  declined  about  10  per  cent,  banking  re- 
sources declined  only  about  5  per  cent.  This  has  produced  a  situation 
whereby  banks  have  a  surplus  of  loanable  funds.  "With  the  lower  price 
level  and  the  small  volume  of  goods,  industry  has  not  required  the  same 
relative  amount  of  working  capital  in  proportion  to  present  banking  facili- 
ties." As  a  result,  the  banks  have  placed  more  of  their  funds  in  long-time 
investments.  Between  1911  and  1913,  state  banks  had  on  an  average  from 
13  to  16  cents  in  such  investments  for  every  dollar  in  loans  and  discounts. 
On  March  14,  1922,  they  had  67.1  cents  in  these  long-time  investments  for 
each  dollar  in  loans  and  discounts.  For  all  banks,  including  national,  the 
increase  was  from  37.1  to  53.4  cents.  The  recent  change  in  New  York 
City  is  even  more  striking.  From  February,  1921,  taking  into  account 
only  the  commercial  loans,  the  New  York  banks  had  on  an  average  about 
31.2  cents  in  investments  for  every  dollar  in  commercial  loans  and  dis- 
counts.    On  a  basis  of  total  loan  and  discount  items,  including  stockbrokers' 


736  Documents  and  Notes  [December 

loans,  they  had  about  23  cents  in  investments  for  each  dollar  of  loans  and 
discounts.  In  August  of  this  year  these  respective  ratios  had  increased  to 
80  cents  and  45  cents. 

Public  Finance 

The  report  of  the  Director  of  the  Bureau  of  the  Budget  on  the  subject 
of  Economies  and  Savings  in  Governmental  Business  has  appeared  under 
date  of  May  8,  1922  (Washington,  pp.  93). 

The  United  States  Internal  Revenue  Bureau  has  issued  the  1922  edition 
of  Regulations  62,  relating  to  the  Income  Tax  and  War  Profits  and  Excess 
Profits  Tax  under  the  Revenue  Act  of  1921  (Washington,  1922,  pp.  420). 

Students  of  current  federal  finance  should  note  that  the  Internal  Revenue 
Bulletin  supersedes  the  Income  Tax  and  Sales  Tax  bulletins  previously 
published  by  the  Bureau  of  Internal  Revenue.  This  series  consists  of 
weekly  bulletins  of  income,  sales,  capital-stock,  estate,  child-labor,  and 
miscellaneous  tax  rulings.  Bi-monthly  digests  are  printed  under  separate 
cover  and  cumulate  during  the  year.  Subscription  for  this  service  is  $2 
per  annum  and  should  be  made  at  the  office  of  the  Superintendent  of  Docu- 
ments, Government  Printing  Office,  Washington,  D.  C. 

The  Department  of  Finance  of  the  government  of  the  Philippine  Islands 
has  issued  the  Annual  Report  of  the  Insular  Collector  of  Customs  for  the 
Fiscal  Year  Ended  December  31,  1921   (Manila,  1922,  pp.  320). 

There  has  also  been  received  the  Report  of  the  Dominican  Customs 
Receivership  under  the  American-Dominican  Convention  of  1907,  for  1921 
(Washington,  1922,  pp.  103). 

The  Pennsylvania  State  Chamber  of  Commerce  (Harrisburg)  has  made  a 
study  of  State  Budget  Systems.  This  includes  a  budget  plan  for  Pennsyl- 
vania and  a  description  of  Pennsylvania's  appropriation  methods  as  well  as 
budget  systems  in  different  states.  It  is  noted  that  there  are  four  types 
of  state  budgets;  the  executive  budget,  administrative  budget  systems, 
administrative-legislative  budget  systems,  and  the  legislative  budget  system. 
Concise  information  is  given  as  to  the  practice  in  different  states  (pp.  120). 

The  following  tax  reports  and  documents  have  been  received: 

Inheritance  Tax  Act  of  California,  1921  (State  Controller,  Sacramento, 
1922,  pp.  175). 

Proceedings  of  the  Fifth  and  Sixth  Annual  Conferences  of  the  Inherit- 
ance Tax  Appraisers  of  California  (Sacramento,  1922,  pp.  140). 

Revenue  Law  of  Assessment  and  Taxation  of  loxva,  July  J^,  1921  (Auditor 
of  State,  Des  Moines,  pp.  104). 

Revised  Instructions  to  he  Observed  in  the  Assessment  and  Equalization 
of  Property  in  Kansas,  Revised  December,  1921   (Topeka,  1922,  pp.   111). 

Fourth  Annual  Report  of  th.  Kentucky  State  Tax  Commission,  1921 
(Frankfort,  pp.  81). 

Fifth  Annual  Report  of  the  Louisiana  Tax  Commission,  1921  (Baton 
Rouge,  pp.  293). 


1922]  Insurance  and  Workmen's  Compensation  'tS^ 

Fourth  Biennial  Report  of  the  Maryland  Tax  Commission,  1921  (Balti- 
more, 1922,  pp.  88). 

Annual  Report  of  the  Commissioner  of  Corporations  and  Taxation  of 
Massachusetts,  1921  (Boston,  pp.  250). 

Fourteenth  Annual  Report  on  the  Statistics  of  Municipal  Finances  for 
City  and  Town  Fiscal  Years  Ending  heticeen  November  30,  1919,  and 
March  31,  1920  (Commissioner  of  Corporations  and  Taxation,  Boston,  1921, 
pp.  307). 

Second  Biennial  Report  of  the  Missouri  State  Tax  Commission,  1919-1920 
(Jefferson  City,  pp.  68). 

Eleventh  Annual  Report  of  the  Neic  Hampshire  State  Tax  Commission, 
1921   (Concord,  pp.   195). 

Sixth  Annual  Report  of  the  New  Jersey  State  Board  of  Taxes  and 
Assessment,  for  the  Year  Ending  June  30,  1921  (Trenton,  pp.  331).  There 
has  also  been  received  a  supplement  to  this  report,  entitled  Second  Class 
Railroad  Property  (Somerville,  N.  J.,  Unionist-Gazette  Assoc.  State  Print- 
ers, pp.  482). 

Report  of  the  C ommissioners  of  Taxes  and  Assessments  for  the  City  of 
New  York  for  the  Year  Ending  March  SI,  1922  (New  York,  pp.  59). 

Twelfth  Annual  Report  of  the  Tax  Commission  of  Ohio,  1921  (Columbus, 
1922,  pp.  233). 

Seventh  Annual  Report  of  the  South  Carolina  Tax  Commission,  1921 
(Columbia,  1922,  pp.  121). 

State  of  South  Dakota  Tax  Lazes  and  Court  Decisions  (Pierre,  pp.  213). 
Includes  1921  session  laws. 

Annual  Report  of  the  South  Dakota  Tax  Commission,  1921  (Pierre, 
pp.  111). 

Reports  and  Communications  of  the  Finance  Commission  of  the  City  of 
Boston,  Volume  XVII  (Boston,  1922,  pp.  218). 

A  Report  to  the  Board  of  Commissioners  of  the  City  of  St.  Petersburg, 
Florida,  Covering  the  Financial  Conditions  and  Audit  of  Accounts  for  the 
Year  Ending  June  30,  1922,  made  by  Harvey  S.  Chase  &  Company,  Certi- 
fied Public  Accountants,  contains  a  brief  discussion  of  serial  bonds  and  a 
sinking  fund. 

Insurance  and  Workmen's  Compensation 

The  Employees'  Compensation  Commission,  in  the  series  of  Service  Mono- 
graphs of  the  United  States  Government,  no.  12,  published  by  Appleton  and 
Company  for  the  Institute  for  Government  Research,  gives  a  history  of 
federal  compensation  legislation,  and  an  account  of  the  organization  and 
activities  of  the  Commission. 

A  Criticism  of  Bureaucratic  Propaganda  for  State  Insurance,  by  P. 
Tecumseh  Sherman  (pp.  32)  criticizes  the  article  published  in  the  Monthly 
Labor  Review  for  December,  1920,  entitled  "Comparison  of  compensation 
insurance  systems   as   to  cost,   service,  and   security,"   by   Carl   Hookstadt. 


738  Documents  and  Notes  ^         [December 

Mr.  Hookstadt's  data  and  conclusions  are  discussed  in  detail  with  references 
to  contradictory  authorities. 

The  following  reports  have  been  received: 

New  York  State  Workmen's  Compensation  Law  with  Amendments,  Addi- 
tions and  Annotations  to  August  1,  1922  (Industrial  Commissioner,  Albany, 
pp.  112). 

Fifth  Report  of  the  Oregon  State  Industrial  Accident  Commission  for  the 
Year  Ending  June  30,  1920  (Salem,  1922,  pp.  16). 

Sixth  Report  of  the  Workmen's  Compensation  Department  of  Wyoming, 
for  1921  (Laramie,  1922,  pp.  152). 

Report  for  1921  of  the  Workmen's  Compensation  Board,  Nova  Scotia 
(Halifax,  1922,  pp.  33). 

_^      Demography 


The  sixth  annual  report  of  the  Bureau  of  the  Census  on  Birth  Statistics, 
1920,  has  appeared  (Washington,  1922,  pp.  257).  For  this  issue  Nebras- 
ka is  added  to  the  birth  registration  area;  this  now  includes  23  states  and 
the  District  of  Columbia,  covering  an  estimated  population  of  63,659,44.1, 
or  59.8  per  cent  of  the  total  estimated  population. 

The  University  of  South  Carolina  is  issuing  a  series  of  bulletins  rep- 
resenting an  economic  and  social  survey  of  different  counties  in  the  state. 
The  material  is  prepared  by  the  Department  of  Rural  Social  Science.  The 
following  issues  have  so  far  been  made:  Chesterfield  County  (pp.  89);  Dil- 
lon County  (pp.  84);  Suviter  County  (pp.  111). 

Students  of  statistics  will  find  in  Baroda  State:  Part  1,  Report,  by  S. 
Mukerjea  (Census  of  India,  1921,  Vol.  XVII,  Bombay,  1922,  pp.  419,  22 
shillings)  more  than  an  ordinary  census  compilation.  With  the  statistics 
there  is  a  large  am.ount  of  textual  comment  relating  to  the  movement  of 
population,  the  normal  rate  of  natural  increase,  the  volume  of  migration, 
variation  in  age  constitution,  birthplace,  religion,  sex,  literacy,  occupation, 
and  wages.  Various  statistical  tests  are  applied  with  their  interpretations, 
and  the  material  is  illustrated  by  significant  charts  and  diagrams. 


NOTES 

The  annual  meeting  of  the  American  Economic  Association  will  be 
held  in  Chicago,  December  27-30,  with  headquarters  at  the  Congress  Hotel; 
The  meeting  will  open  with  a  joint  session  with  the  American  Statistical 
Association  on  Wednesday  afternoon,  December  27,  with  papers  on  as- 
pects of  "The  outlook  for  1923,"  by  Allyn  A.  Young,  H.  Parker  Willis, 
and  Alvin  H.  Hansen.  At  the  evening  session  W.  S.  Rossiter,  qf  the 
American  Statistical  Association,  J.  P.  Lichtenberger,  of  the  American 
Sociological  Society,  and  H.  R.  Seager,  of  the  American  Economic  Associa- 
tion, will  deliver  their  presidential  addresses.  The  morning  session  on 
Thursday,  December  28,  will  be  devoted  to  papers  on  "Economic  theory," 
by  J.  Maurice  Clark,  Horace  Secrist,  and  Miss  Anna  Bezanson.  The  af- 
ternoon meeting  will  be  a  joint  session  with  the  American  Association  for 
Labor  Legislation,  devoted  to  "Factors  that  should  be  considered  in  making 
wage  determinations,"  with  papers  by  John  R.  Commons,  W.  F.  Ogburn, 
and  George  Soule.  At  the  fifth  session,  on  Friday  morning,  December  29* 
papers  on  "Farm  income  in  the  United  States"  will  be  presented  by  David 
Friday  and  L.  C.  Gray.  Round  Table  conferences  on  the  aims  and  methods 
of  bureaus  of  industrial  research  and  the  aims  and  methods  of  college  cours- 
es on  transportation,  under  Horace  Secrist  and  W.  E.  Butterbaugh,  will  be 
held  in  the  early  afternoon  and  in  the  late  afternoon  a  memorial  meeting  to 
former  president  Simon  N.  Patten.  The  evening  session  of  December  29 
will  be  devoted  to  "Our  financial  relations  with  Latin  America,"  led  by 
E.  W.  Kemmerer.  The  meeting  will  conclude  with  a  seventh  session  on 
the  morning  of  Saturday,  December  30,  devoted  to  "Problems  of  market- 
ing," with  papers  by  L.  D.  H.  Weld  and  B.  H.  Hibbard. 

More  detailed  information  in  reference  to  topics  and  speakers  will  be 
given  in  the  preliminary  announcement,  distributed  by  the  Secretary  of 
the  Association.  Arrangements  have  been  made  with  the  railway  officials 
for  reduced  fares  for  the  members  attending  the  annual  meeting,  provided 
the  required  number  (250)  present  certificates. 

The  following  associations  will  also  meet  in  Chicago  at  the  same  time: 
American  Statistical  Association;  American  Political  Science  Association; 
American  Sociological  Society;  American  Farm  Economics  Association. 

The  following  names  have  been  added  to  the  membership  of  the  Amer- 
ican Economic  Association  since  the  first  of  August: 

Anderson,  T.  J.,  State  Agricultural  College,  Manhattan,  Kansas. 

Armbruster,  A.  H.,  1233  Chapel  St.,  New  Haven,  Conn. 

Benner,  C.  L.,  Iowa  State  College,  Ames,  Iowa. 

Bexell,  J.  A.,  Oregon  Agricultural  CoUege,  Corvallis,  Ore. 

Bjorka,  K.,  Iowa  State  College,  Ames,  Iowa. 

Boettler,  H.  F.,  4441  Elmbank  Ave.,  St.  Louis,  Mo. 

Burgess,  K.  F.,  .547  W.  Jackson  Blvd.,  Chicago,  111. 

Carroll,  M.  R.,  Goucher  College,  Baltmore,  Md. 

Chambers,  R.,  1228  Forest  Ave.,  Evanston,  lU. 

Cherrington,  H.,  Cornell  College,  Mount  Vernon,  Iowa. 

Coombs,  W.,  Lake  Forest  College,  Lake  Forest,  111. 

Crobaugh,  C.  J.,  827  E.  University  St.,  Bloomington,  Ind. 


740  Notes  [December 

Dana,  J.  D.,  42  Church  St.,  New  Haven,  Conn. 

Delp    J.  D.,  712  Monroe  St.,  Springfield,  Mo. 

Dummeier,  E.  F.,  Washington  State  College,  Pullman,  Wash. 

Eberhard,  G.  H.,  360  Fremont  St.,  San  Francisco,  Calif. 

EckersoU,  V.  H.,  725  Melrose  St.,  Chicago,  111. 

Filipetti,  G.,  Columbia  University,  New  York  City. 

Frame,  H.  C,  Emory  University,  Ga. 

Funk,  W.  C,  U.  S.  Department  of  Agriculture,  Washington,  D.  C. 

Gluck,  E.,  2940  Broadway,  New  York  City. 

Griffith,  E.  C,  Kalamazoo  College,  Kalamazoo,  Mich. 

Hall,  H.  F.,  105  E.  Daniel  St.,  Champaign,  111. 

Hansen,  W.  I.,  3707  Wrightwood  Ave.,  Chicago,  111. 

Hope,  G.  A.,  Federal  Reserve  Bank,  St.  Louis,  Mo. 

Hopkins,  J.  A.,  Iowa  State  College,  Ames,  Iowa. 

Hottenstein,  M.  S.,  17  E.  42d  St.,  New  York  City. 

Howard,  J.  R.,  58  E.  Washington  St.,  Chicago,  111. 

Jacobs,  v.,  402  Fifty-sixth  St.,  Brooklyn,  N.  Y. 

Jordan,  W.  D.,  531  Orange  St.,  New  Haven,  Conn. 

Kendrick,  M.  S.,  507  E.  Buifalo  St.,  Ithaca,  N.  Y. 

Kincaid,  E.  A.,  University,  Va. 

Knopf,  A.  A.,  220  West  42d  St.,  New  York  City. 

Laity,  H.  A.,  1101  S.  Orchard  St.,  Urbana,  111. 

Latour,  C.  C,  1321  Franklin  Ave.,  New  York  City. 

Locklin,  D.  P.,  706  W.  Nevada  St.,  Urbana,  111. 

Lynch,  A.  S.,  Box  283,  New   Haven,  Conn. 

McClure,  C.  L.,  Huntington,  Ind. 

Meech,  S.  P.,  University  of  Chicago,  Chicago,  111. 

Miller,  E.  J.,  eOSVo  Indiana  Ave.,  Urbana,  111. 

Mints,  L.  W.,  University  of  Chicago,  Chicago,  111. 

Nicholls,  W.  D.,  Agricultural  Experiment  Sta.,  Lexington,   Ky. 

O'Leary,  J.  B.,  57  Channing  St.,  Worcester,  Mass. 

Olson,  "E.  E.,  University  of  Southern  California,  Los  Angeles,  Cal. 

Peck,  H.  W.,  326  College  St.,  Burlington,  Vt. 

Robertson,  H.  W.  5734  W.  Ohio  St.,  Chicago,  111. 

Shann,  Professor,  University  of  West  Australia,  Perth,  W.  Australia. 

Shaw,  E.  R.,  1005  S.  Busey  Ave.,  Urbana,  111. 

Sherwell,  G.  B.,  Room  405,  Otis  Bldg.,  Washington,  D.  C. 

Smith,  J.  G.,  192  Nassau  St.,  Princeton,  N.  J. 

Stead,  W.  H.,  1210  Chapin  St.,  Beloit,  Wis. 

Stockwell,  M.  M.,  706  N.  Lincoln  Ave.,  Urbana,  111. 

Taylor,  G.  R.,  6026  Drexel  Ave.,  Chicago,  111. 

Th'om,  H.  C,  5137  Ellis  Ave.,  Chicago,  111. 

Upgren,  A.  R.,  University,  Ala. 

Van  Meter,  K.  K.,  504  N.  Matthews  Ave.,  Urbana,  111. 

Warburton,  C.  A.,  Ewing  Christian  College,  Allahabad,  India. 

Watkins,  L.  L.,  720  S.  State  St.,  Ann  Arbor,  Mich. 

Weitz,  B.  O.,  U.  S.  Department  of  Agriculture,  Washington,  D.  C. 

Weston,  T.  I.,  2219  Divine  St.,  Columbia,  S.  C. 

Wright,  P.  G.,  Forest  Glen,  Md. 

Yeh,  Y.  L.,  La  LTniversitate  Utopia,  Shanghai,  China. 

Young,  K.  A.,  2904  Erdman  Ave.,  Baltimore,  Md. 

Professor  Simon  N.  Patten  died  July  24th,  1922,  at  Browns  Mills, 
New  Jersey.  His  death  was  directly  due  to  a  paralytic  stroke,  which  came 
upon  him  a  number  of  weeks  earlier,  and  from  which  he  did  not  recover. 
For  a  time  he  was  slightly  improved,  but  his  age  and  complications  incident 
thereto  made  his  recovery  an  impossibility. 

He  had  been  Professor  of  Economics  and  head  of  the  Economics  De- 
partment in  the  Wharton  School  at  the  University  of  Pennsylvania  for  about 
thirty  years,  having  retired  from  his  services  at  the  University  in  1917.  He 
was  active  in  the  foundation  of  the  Wharton  School  of  Commerce  and  Fi- 
nance at  that  institution,  and  closely  associated  with  its  work  and  develop- 


^ — ^J  Aotes  741 

ment  Among  his  other  lines  of  special  interest  was  the  work  of  the  Amer- 
ican Academy  of  Political  and  Social  Science,  in  whose  growth  he  had 
taken  a  prominent  part. 

Professor  Patten  was  born  at  Sandwich,  Illinois,  on  Mav  1,  1852,  and 
studied  at  Northwestern  University,  and  the  University  of  Halle,  Germany 
receiving  the  degrees  of  A.  M.  and  Ph.  D.  in  1878.  He  also  received  the 
degree  of  LL  D.  from  the  University  of  Illinois  in  1905.  In  his  work  he 
acknowledged  particularly  the  influence  of  John  Stuart  Mill,  and  like  Mill 
was  a  social  philosopher,  never  limiting  himself  to  the  traditional  economic 
field.  By  his  excursions  into  related  subjects,  he  frequently  became  involv- 
ed in  controversies  with  specialists  who  found  it  difficult  to  accept  many  of 
his  views.  At  the  same  time  these  efforts  brought  him  also  into  controv;rsy 
with  many  other  economists,  and  he  was  consequently  a  center  of  much  dis'- 
cussion  and  stimulated  to  a  very  high  degree  the  thought,  not  only  of  the 
students  directly  under  his  guidance  but  of  economists  throughout  the 
world.  Perhaps  his  most  important  service  has  been  that  of  aiding  others 
to  break  away  from  traditional  and  outworn  interpretations 

His  writings  were  numerous.  The  most  notable  among  them  are 
Premises  of  PohUcal  Economy,  Dynamic  Economics,  Theory  of  Social 
Forces  Theory  of  Prosperity,  The  Development  of  English  Thought, 
Heredity  and  Social  Progress,  and  The  AVtc-  Basis  of  Civili-ation  He 
also  more  recently  published  a  novel  entitled  Mud  Hollow.  His  writings  all 
show  the  work  of  a  vigorous  and  original  mind,  which  was  a  constant  stim- 
ulus to  the  thought  and  research  of  others.  e.  jj   p 

Recent  Developments  of  Teaching  the  Ecoxomics  of  Marketing. 
1  he  introduction  of  courses  of  instruction  in  agricultural  economics  and 
particularly  those  phases  of  the  subject  having  to  do  with  the  marketing  of 
agricultural  products  has  proceeded  rapidly  during  the  last  year  or  two. 
feome  forty-five  state  institutions  presenting  courses  in  agriculture  are 
known  to  be  offering  courses  in  agricultural  economics  and  allied  subjects 
tHis  year.  In  most  of  these  courses  attention  is  given  to  marketing,  with 
particular  reference  to  specific  products  of  primary  importance  in  the  state 
concerned.  Numerous  courses  having  to  do  with  production  of  various 
crops  and  classes  of  live  stock  include  some  study  of  marketing  questions. 
It  has  only  been  within  the  last  few  years  that  the  marketing  work  has 
been  separated  from  general  courses  on  production  and  given  particular 
attention  by  special  instructors. 

These  courses  have  naturally  first  concerned  the  practical  phases  of 
marketing  when  presented  in  agricultural  colleges,  rather  than  the  broader 
economic  point  of  view. 

As  the  subject  of  agricultural  economics  has  come  to  be  presented  in 
Its  broad  relations,  the  courses  have  been  changed  to  involve  a  discussion  of 
principles  of  marketing  which  apply  to  all  classes  of  products  as  a  basis  for 
studying  the  best  practice  to  be  followed  in  marketing  a  specific  product- 
whereas,  formerly,  the  instructor  in  Animal  Husbandry  or  the  instructor  in 
Agronomy  touched  upon  marketing  as  a  part  of  the  production.  With  live 
stock  or  crops,  the  consideration  of  general  economic  principles  was  usually 


742  Notes  [December 

lacking.  Another  recent  development  has  been  the  addition  of  courses  in 
principles  involved  in  marketing,  by  institutions  not  specifically  concerned 
in  agriculture,  but  concerned  in  training  for  general  business. 

The  new  courses  range  in  character  from  short  courses  especially  for 
farmers  and  managers  of  farm  organizations,  up  to  well-organized  courses 
extending  over  one  or  two  years'  university  work.  An  example  of  the  first 
type  of  instruction  is  the  two-day  course  for  managers  of  live-stock  ship- 
ping associations  held  in  Iowa  this  year  under  the  direction  of  an  extension 
professor  of  agricultural  economics.  Another  was  a  short  course  in  grain 
grading  offered  in  the  School  of  Agriculture  in  the  University  of  Minnesota, 
conducted  by  a  federal  grain  supervisor.  At  the  same  institution  a  course 
during  the  winter  deals  with  the  organization  and  business  practice  prob- 
lems of  marketing  organization.  Several  such  short  courses  have  been  of- 
fered in  the  popular  farmers'  courses  at  the  agricultural  colleges  held  in  the 
winter  and  in  some  instances  such  courses  have  been  offered  in  summer 
schools.  The  other  extreme  in  the  scope  of  courses  in  marketing  is  repre- 
sented by  that  which  has  been  considered  by  one  state  agricultural  college, 
leading  to  a  degree  of  Bachelor  of  Science  in  Marketing. 

A  typical  course  in  the  marketing  of  farm  products  such  as  is  offered 
in  several  state  institutions  includes  the  following  subjects:  marketing  in- 
stitutions, functions,  routes,  costs,  methods  of  purchase  and  sale,  problems 
of  inspection,  grading  and  related  economic  developments.  Graduate  stud- 
ents are  given  specific  problems  for  special  study. 

The  subject  of  cooperation  is  being  given  attention  in  some  institutions 
as  a  separate  course,  but  in  most  instances  in  connection  with  courses  in 
economics,  marketing,  or  farm  organization  and  management.  Although 
the  work  has  been  used  in  designated  courses  only  recently,  the  methods  of 
cooperative  organizations  have  been  considered  as  a  part  of  courses  on 
agricultural  economics  for  several  years. 

A  number  of  institutions  are  offering  graduate  courses  in  marketing, 
making  specific  emphasis  upon  assignments  to  graduate  students  to  study 
local  problems  for  the  purpose  of  preparing  a  thesis.  This  graduate  work 
in  some  instances  is  being  articulated  closely  with  the  interested  organiza- 
tions maintained  by  farmers.  For  example,  the  professor  of  agricultural 
economics  at  the  University  of  Wisconsin  will  have  charge  of  the  research 
scholarships  in  cooperative  marketing  of  dairy  products  offered  by  the 
State  Farm  Bureau  Federations  in  Missouri,  Ohio,  Iowa,  and  Illinois.  He 
will  be  assisted  by  the  advisory  committee  of  the  research  department  of  the 
American  Farm  Bureau  Federation.  In  this  manner  the  graduate  student 
investigations  will  be  closely  related  to  practical  problems. 

Many  of  these  courses  are  the  result  of  the  demand  for  men  with 
training  which  will  fit  them  to  become  managers  for  marketing  organiza- 
tions or  to  go  into  the  distributive  trades;  for  example,  the  California 
College  of  Agriculture  is  offering  a  course  primarily  for  training  of  men  for 
cooperative  organization  work. 

There  has  been  a  notable  increase  in  the  number  of  thesis  studies  made 
by  students  working  for  their  doctor's  degrees  during  the  last  few  years. 
This  has  been  the  means  of  creating  an  interest  in  the  economics  of  market- 


1922]  Notes  743 

ing  among  graduate  students,  and  has  also  added  materially  to  the  volume 
of  research  in  this  field. 

H.  C.  Taylor. 

There  has  been  created  at  Princeton  University  a  section  of  the  De- 
partment of  Economics  and  Social  Institutions  to  be  known  as  the  Industrial 
Relations  Section.  It  will  seek  to  put  together  a  very  comprehensive  Libra- 
ry of  Industrial  Relations.  More  particularly  it  will  collect  reports,  docu- 
ments, periodicals,  etc.,  dealing  primarily  with  arrangements,  both  trade- 
union  and  non-trade-union,  that  are  actually  in  operation,  and  with  the 
aims  and  recommendations  of  organizations  and  persons  who  are  themselves 
a  party  to  industry.  Whatever  else  it  may  come  to  include,  this  will  be  its 
main  field.  Inevitably  the  collection  will  consist  largely  of  pamphlet 
material,  in  part  of  a  fugitive  sort,  which  it  will  be  important  to  keep  up  to 
date.  The  section  is  in  charge  of  a  director.  Dr.  Robert  F.  Foerster,  form- 
erly of  the  Department  of  Social  Ethics  of  Harvard  University,  who  will 
have  the  rank  of  professor  of  economics,  and  will  give  some  instruction, 
especially  to  graduate  students.  He  will  spend  a  portion  of  his  time  in  the 
field,  so  as  to  acquire  by  personal  contact  a  first-hand  knowledge  of  the 
more  significant  developments.  It  is  hoped  that  the  resources  of  the  section 
will  be  widely  useful,  not  only  to  academic  inquirers  but  to  others  as  well, 
including  both  employer  and  labor  interests.  The  creation  of  the  section 
at  this  time  was  made  possible  through  the  generosity  of  Mr.  John  D. 
Rockefeller,  Jr.,  who  has  pledged  financial  support  for  a  period  of  years. 

Dr.  Heinrich  Soetbeer,  of  Berlin,  is  offering  for  sale  his  private  library 
of  from  2500  to  3000  volumes,  largely  in  the  field  of  money  and  banking, 
collected  by  his  father,  Dr.  Georg  Adolf  Soetbeer.  Detailed  information 
as  well  as  a  catalogue  may  be  had  by  addressing  Dr.  Soetbeer,  Lohengrin- 
strasse  28,  Wannsee  bei  Berlin,  Germany. 

Gustav  Fock,  bookseller  at  Leipzig,  Schlossgasse  7-9,  has  for  sale  the 
economic  library  of  Professor  Dr.  K.  Rathgen,  of  Hamburg,  who  recently 
died.  The  library  contains  about  1150  bound  volumes  and  2000  pamphlets. 
Price  <£850. 

Amherst  College  announces  that  applications  will  be  received  for  an 
appointment  to  an  Amlierst  Memorial  Fellowship  for  the  study  of  social, 
economic,  and  political  institutions  for  the  term  beginning  September  1, 
1923.  The  fellowship  carries  with  it  a  stipend  of  $2000  a  year.  Inquiries 
should  be  directed  to  Professor  Walton  H.  Hamilton,  Amherst  College, 
Amherst,  Mass. 

The  Institute  of  Economics  has  been  founded  by  the  Carnegie  Corpora- 
tion of  New  York  "for  the  purpose  of  assembling  and  interpreting  the 
economic  data  which  form  the  bases  of  national  and  international  policies. 
It  is  self-evident  that  the  modern  economic  system  has  many  defects,  many 
sources  of  waste  and  friction,  and  that  the  annual  avoidable  economic  losses 
are  stupendous  in  amount.  The  Institute  will  endeavor  through  its  inves- 
tigations to  ascertain  the  causes  of  these  economic  losses  and,  as  far  as  pos- 
sible, to  point  the  way  to  their  elim.ination."     Among  the  subjects  to  which 


744  Notes  [December 

the  Institute  will  devote  attention  are  international  commercial  policies, 
questions  of  domestic  and  international  finance,  relations  of  government  to 
business,  problems  of  agriculture,  taxation,  and  transportation,  and  the 
various  issues  relating  to  industry  and  labor.  The  Institute  will  be  located 
in  Washington.  A  staff  of  more  than  a  score  of  investigators  has  been 
engaged,  among  whom  are  to  be  noted  Horace  B.  Drury,  Edwin  G.  Nourse, 
Thomas  Walker  Page,  Mark  A.  Smith,  and  Georges  M.  Weber.  Professor 
Harold  G.  Moulton,  of  the  University  of  Chicago,  has  been  made  director 
of  the  Institute. 

At  the  twenty-eighth  annual  meeting  of  the  National  Municipal  League, 
Philadelphia,  November  22-24,  papers  were  presented  on  our  national  bud- 
get. Among  these  are  to  be  noted  "A  business  man's  viewpoint  of  the 
budget,"  by  G.  W.  Norris,  Governor  of  Federal  Reserve  Bank,  Philadelphia, 
and  "How  the  new  budget  operates,"  by  General  H.  M.  Lord,  Director  of 
the  Budget. 

The  Babson  Institute  will  undertake  a  health  survey  of  the  printing 
trades  for  the  International  Joint  Conference  Council,  representing  both 
employers  and  employees.  The  work  will  include  a  thorough  study  of 
printing  processes  in  their  relation  to  health  and  of  printing  house  condi- 
tions possibly  more  or  less  detrimental  to  health.  The  investigation  will 
be  carried  on  in  cooperation  with  a  large  number  of  governmental,  scientific, 
and  corporate  organizations,  including  the  United  States  Bureau  of  Labor 
Statistics.  It  will  be  under  the  immediate  direction  of  Dr.  Frederick  L. 
Hoffman,  Dean  of  the  Advanced  Department  of  the  Babson  Institute,  Well- 
esley  Hills,  Mass.  It  is  expected  that  two  years  will  be  needed  to  cover  the 
survey. 

The  National  Bureau  for  Economic  Research,  Inc.,  has  just  completed 
a  study  of  business  cycles  and  unemployment  for  the  President's  Conference 
on  Unemployment.  Professor  Wesley  C.  Mitchell  was  in  charge  of  the 
study.  The  greater  part  of  the  funds  were  contributed  by  the  Carnegie 
Corporation  of  New  York,  The  Russell  Sage  Foundation,  The  American 
Association  for  Labor  Legislation,  The  Bureau  of  Railway  Economics,  The 
Federated  American  Engineering  Societies,  The  Chamber  of  Commerce  of 
the  United  States;  and  several  departments  of  the  government  contributed 
valuable  services.  The  results  of  this  inquiry  will  shortly  be  published  in 
book  form  by  the  McGraw-Hill  Book  Company,  370  Seventh  Avenue,  New 
York  City. 

The  department  of  industrial  research  of  the  Wharton  School,  Uni- 
versity of  Pennsylvania,  is  continuing  its  studies  of  the  Philadelphia  indus- 
trial and  labor  market,  made  possible  by  contributions  from  the  Carnegie 
Corporation  and  prominent  Philadelphia  firms  and  corporations. 

The  University  of  North  Carolina  Press,  Chapel  Hill,  N.  C,  announces 
a  new  publication,  the  Journal  of  Social  Forces,  the  first  number  of  which 
appeared  in  November,  under  the  editorship  of  Howard  W.  Odum  (Man- 
aging Editor),  E.  C.  Branson,  Dudley  D.  Carroll,  Jesse  F.  Steiner,  L.  R. 
Wilson,  and  Harold  Meyer,  assisted  by  a  number  of  contributing  editors 


in  various  parts  of  the  country.  This  will  be  published  bi-monthlv  (price 
$2.50  for  five  issues).  '    i^t-m-c 

The    Carnegie    Institution    of    Washington    announces    the    reprint    by 

Umted  States  by  Johnson,  Van  Metre,  Huebner,  and  Hanchett.  In  this 
new  reprint  the  two  volumes  are  issued  under  one  cover  (price,  $3;  Carnegie 
Institution  of  ^\  ashington,  16th  and  P  Sts.,  Washington^  D.  C). 

The   first   issue   of   the   Harvard  Business   Review,   published   quarterly 

I';l    W    Sh^^'V'^'^''  °^^"^^"^"  Administration,  Harvard   University' 
by  A.   VV.  Shaw  Company,  Chicago,  appeared  in  October.     In  the  list  of 
contents  are  to  be  noted  articles  on:     Essential  groundwork  for  a  broad 
executive  theory,  by  W.  B.  Donham;  The  taxation  of  capital  gains,  by  GO 
May;   Bank  management  and  the  business   cycle,  by  O.   M.   W.   Sprague;* 
The  future  of  American  export  trade,  by  J.  Klein;  Creditors'  comm  ttee  re- 
eiverships,   by  A.    S.    Dewing;    Bank   reserves   under   the    federal   reserve 
ystem    by  F    H.  Curtis;  The  railroad  consolidation  plan,  (1)   New  En.- 
bv   i     D    ^ri  ''""r^^^^"'  The  effect  of  hedging  upon  flour  mill  control, 
by  a.   D^   Stiles;   The   use  and  limitations   of  psychological   tests,   bv   D 
March;  Some  relations  between  technical  and  business  training,  bv  J    g' 
,W  r\T  P    ^f  I    '"''  '^  stock-turn  in  retail  and  wholesale  merchandis- 
ing   by  M.  P.  McN  air.     Among  the  "Department  Contents"  are  summaries 
of  business  research,  as,  for  example,  "Term  settlements  for  the  New  York 

ver.t  T  r^'V.''^'°^  'T''"'"*^'''  "P^g  -«-  P--S,"  and  "Estimates 
versus  actual  cost  ;  case  studies  in  business;  reviews  of  business  literature; 
and  bibliographical  notes. 

In  the  new  quarterly  journal.  Foreign  Affairs,  of  which  the  first  num- 

iT  7aT.>  September  15,  is  an  article  by  John  Foster  Dulles  on  "The 

Wef  ffi'«.     I       i'  P^bl^^'^^d  by  CouncU  on  Foreign  Relations,  Inc.  (25 

Irch  b  M  r  r  Z  ^  '^^  ^^''^''  P^"^'  ^'  '  '^''^^-  The  editor  is  Professor 
Archibald  C.  Coolidge,  of  Harvard  University. 

The  American  Chamber  of  Economics,  30  Irving  Place,  New  York 
City,  has  established  a  service,  "Economics  for  Executives,"  which  extends 
over  one  year.      This  service  comprises  a  series  of  24  text  units  edited  by 

,;.T^9^^;. f'  \''"''  °^  ^^  P'^"*^"^^  problems,  one  for  each  text 
unit;  24  letters  from  the  educational  director;  and  periodical  digests.  The 
tee  tor  the  foregoing  service  is  $72  per  annum. 

The  Independent  Inter-Weekly  for  Schools,  which  appears  between  the 
regular  fortnightly  issues  of  the  Independent  (140  Nassau  St.,  New  York 
City),  IS  publishing  "A  Primer  of  Political  Economv"  bv  Fabian  Franklin 
liiis  IS  designed  to  give  in  the  most  elementary  wav  possible  a  grasp  of 
cardinal  principles.  »      f 

In  the  November,  1922,  issue  of  the  Journal  of  the  National  Education 
Association  (1201  Sixteenth  St.,  N.  W.,  Washington)  is  an  article,  "The 
teacher  and  the  banker,"  by  John  H.  Puelecher,  recentlv  elected  president 
ot  the  American  Bankers  Association.  In  this  article  reference  is  made  to 
the  plan  of  the  American  Bankers  Association,  drawn  up  in  1921,  to  give 


746  Notes  [December 

instruction  in  economics  and  more  particularly  in  banking  to  pupils  in  ele- 
mentary schools.  Last  year's  program  consisted  of  ten  talks.  Copies  of 
these  "talks"  and  a  book  of  outlines  may  be  had  upon  application  to  the 
secretary  of  the  committee  upon  public  education,  American  Bankers  Asso- 
ciation, 5  Nassau  St.,  New  York  City. 

In  School  Review  for  April,  1922,  is  an  article,  "General  Plan  for  a 
Course  in  Economics,"  by  A.  R.  Mead,  which  discusses  a  half-year  course 
for  a  high  school  in  a  rural  community. 

Announcement  has  been  made  that  Professor  Gras,  of  Minnesota,  will 
contribute  to  the  series  of  volumes  edited  by  Professor  Georg  Brodnitz 
and  entitled  Handbuch  der  Wirtschaftsgeschichte. 

The  Pollak  Foundation  for  Economic  Research,  Newton  58,  Massa- 
chusetts, will  publish  The  Making  of  Index  Numbers:  A  Study  of  Their 
Varieties,  Tests,  and  Reliability,"  by  Professor  Irving  Fisher  (price,  $7.60). 

Professor  James  E.  Boyle,  of  the  College  of  Agriculture,  Cornell  Uni- 
versity, is  publishing  a  booklet  showing  fluctuations  in  wheat  prices  on  the 
Chicago  market  for  the  81-year  period  1841-1921.  Daily  fluctuations,  cash 
and  futures,  are  shown  for  the  period  1877-1921. 

The  Reference  Shelf  is  the  title  of  a  new  series  of  publications  being 
published  by  the  H.  W.  Wilson  Company,  which  may  be  obtained  for  $4.50 
per  volume  of  ten  numbers,  or  at  75  cents  a  copy.  The  various  numbers 
will  be  reports  of  debates  with  briefs  and  reprints.  Volume  I,  no.  1, 
Cancellation  of  the  Allied  Debts,  compiled  by  Julia  E.  Johnsen,  is  now 
ready.  Numbers  in  preparation  deal  with  The  St.  Lawrence  River  Ship 
Canal,  Kansas  Court  of  Industrial  Relations,  Enforcement  of  the  Decisions 
of  the  Railway  Labor  Board,  China  and  Japan,  and  Questions  of  the  Hour. 

Prentice-Hall  announces  a  revised  edition  of  Principles  of  Business, 
by  Gerstenberg. 

The  Library  of  Congress  has  prepared  A  List  of  Doctoral  Disserta- 
tions Printed  in  1920.  Those  relating  to  social  sciences  are  listed  on  pages 
95-102. 

Professor  Herbert  W.  Hess,  of  the  Wharton  School,  University  of 
Pennsylvania,  will  publish  in  January  a  new  volume  on  Salesmanship. 

Professor  Thomas  Conway,  of  the  Wharton  School,  University  of 
Pennsylvania,  is  preparing  a  book  on  Public  Utility  Bonds,  to  be  published 
under  the  auspices  of  the  Investment  Bankers  Association. 

Dr.  W.  D.  Gordon  and  Mr.  J.  Lockwood,  of  the  Wharton  School,  Uni- 
versity of  Pennsylvania,  are  now  engaged  in  preparing  a  volume  on  Ac- 
counting Methods  and  Systems. 

Dr.  R.  T.  Bye,  assistant  professor  of  economics  in  the  Wharton  School, 
University  of  Pennsylvania,  has  completed  a  work  on  the  Principles  of 
Economics,  which  will  be  published  shortly. 

Announcement  has  been  made  of  a  revival  of  publication  of  Bibliogra- 


1922]  Notes  747 

phie  der  Sozialwissenschaften,  edited  by   Franz   Boese,   and   published  by 
Hans  Engelmann,  Berlin  W.  15,  Knesbeckstr.  52. 

Wirtschaftspolitische  Rundschau  der  Preussichen  Jahrbiicher  is  the 
title  of  a  new  periodical  which  is  being  published  to  supplement  Die 
Preussischen  Jahrbiicher,  appearing  ten  days  later  in  the  month.  This  is 
published  by  Georg  Stilke,  Berlin  N.  W.  7,  Dorotheenstr.  66.  A  combina- 
tion subscription  price  is  offered  for  the  two  together. 

The  first  issue  of  the  European  Commercial,  "an  organ  of  world-wide 
commerce,"  (1  Hohenstaufengasse,  Vienna)  has  recently  appeared.  This 
is  a  trade  paper  in  English,  containing  commercial  information  gathered 
from  European  countries.      The  journal  is  promoted  by  Sir  Ernest  Benn. 

A  new  statistical  journal  for  Scandinavia,  Nordisk  Statistisk  Tidskrift 
has  been  established.  The  first  issue  contains  the  following  articles:  "Die 
Variationsbreite  beim  Gausschen  Fehlergesetz,"  by  Bortkiewicz;  "Das 
Gesetz  der  grossen  Zahlen  und  der  Stochastisch-statistische  Standpunkt  in 
der  modernen  Wissenschaft,"  by  Tschuprow;  and  "Biologi  og  Statistik," 
by  Johannsen. 

The  Swedish  Board  of  Trade  is  publishing  for  the  Swedish  foreign  Office 
a  quarterly,  Sxceden  Economic  Reviexc.  This  periodical  is  printed  in  Eng- 
lish   (Stockholm). 

The  following  new  books  have  been  received  since  the  compilation  of  the 
New  Books  lists,  and  will  be  reviewed  in  a  subsequent  issue: 

CoNANT,  L.,  Jr.  a  critical  analysis  of  industrial  pension  systems.  (New 
York:  Macmillan.      1922.  Pp.  xi,  262.) 

DaviSj  J.  The  Russian  immigrant.  (New  York:  Macmillan.  1922.  Pp. 
XV,  219.  $1.50.) 

Frey,  J.  P.  The  labor  injunction.  An  exposition  of  government  by  judi- 
cial conscience  and  its  menace.  (Cincinnati,  O. :  Equity  Publishers. 
1922.      Pp.  ix,  197.      $2.50.) 

HuEBNERj  S.  S.  Property  insurance.  (New  York:  Appleton.  1922.  Pp. 
xix,  601.     $3.) 

JosEY,  C.  H.  The  social  philosophy  of  instinct.  (New  York:  Scribner's. 
1922.      Pp.  274.     $2.) 

LoREEj  L.  R.  Railroad  freight  transportation.  (New  York:  Appleton. 
1922.      Pp.  XXX,  771.     $5.) 

Perlman,  S.  a  history  of  trade  unionism  in  the  United  States.  Social 
Science  Textbooks,  edited  by  R.  T.  Ely.  (New  York:  Macmillan. 
1922.     Pp.  viii,  313.) 

Sayre,  F,  B.  Cases  on  labor  laxv.  A  selection  of  cases  and  other  author- 
ities on  labor  law.  (Cambridge:  Harvard  Univ.  Press.  1922.  Pp.  xvii, 
1017.     $5.) 

Wyman,  W.  F.  Export  merchandising.  (New  York:  McGraw-Hill.  1922. 
Pp.  XX,  405.     $4.) 


748  Notes  [December 

Appointments   and  Resignations 

Mr.  T.  J.  Anderson  has  been  appointed  instructor  in  economics  in  the 
Kansas  State  Agricultural  College  at  Manhattan. 

Mr.  A.  J.  Barlow,  acting  associate  professor  of  accounting  and  market- 
ing at  the  University  of  Virginia,  has  been  made  associate  professor. 

Dr.  Abraham  Berglund,  formerl)^  of  the  United  States  Tariff  Commis- 
sion, has  joined  the  staff  of  the  James  Wilson  School  of  Economics  of  the 
University  of  Virginia. 

Dr.  Joshua  Bernhardt,  who  has  been  on  the  staff  of  the  Institute  for 
Government  Research  since  April,  1921,  has  resigned  to  join  the  United 
States  Tariff  Commission  as  expert  in  connection  with  the  enlarged  field  of 
activity  entrusted  to  that  body  by  the  Tariff  act  of  1922,  particularly  with 
reference  to  the  sugar  industry. 

Professor  E.  L.  Bogart,  head  of  the  department  of  economics  at  the 
University  of  Illinois,  has  been  granted  a  year's  leave  of  absence  to  serve 
as  adviser  on  banking  and  currency  to  the  Persian  Empire. 

Mr.  Carl  P.  Burch  has  been  made  instructor  of  economics  in  the  Okla- 
homa Agricultural  and  Mechanical  College  at  Stillwater. 

Dr.  A.  E.  Cance,  who  has  been  with  the  Federal  Bureau  of  Agricultural 
Economics  as  consulting  specialist,  has  returned  to  the  Massachusetts  Agri- 
cultural College  at  Amlierst. 

Professor  W.  B.  Catlin,  of  Bowdoin  College,  is  on  leave  of  absence  in 
Boston,  engaged  in  finishing  a  volume  dealing  with  labor  problems. 

Professor  Robert  E.  Chaddock  has  been  promoted  to  a  full  professor- 
ship in  the  department  of  economics,  Columbia  University. 

Dr.  Harry  T.  Collings,  professor  of  economics  at  the  University  of 
Pennsylvania,  spent  the  summer  of  1922  as  visiting  professor  to  Mexico. 
He  investigated  economic  and  business  conditions  there  and  returned  in  the 
fall  by  way  of  Central  America. 

Professor  Lloyd  M.  Crossgrave,  of  the  Carnegie  Institute  of  Techno- 
logy^  bas  been  appointed  acting  professor  of  economics  at  Indiana  Univer- 
sity. 

Mr.  Joseph  E.  Cummings,  instructor  in  the  School  of  Business  at  the 
University  of  Minnesota,  has  been  made  assistant  professor  of  transporta- 
tion. 

Mr.  Earl  E.  Cummins,  who  was  last  year  at  the  New  Hampshire  State 
College,  is  now  an  instructor  in  economics  in  Princeton  University. 

Professor  Joseph  D.  Delp,  of  the  Springfield  State  Normal  College, 
who  spent  last  year  doing  graduate  work  in  economics  and  accounting  at 
the  University  of  Missouri,  has  resumed  his  duties  at  the  Normal  College. 

Mr.  Luther  E.  Drury,  of  the  University  of  Chicago,  has  been  appoint- 
ed instructor  in  economics  at  Indiana  University. 

Mr.  William  G.  Eliot,  3rd,  has  been  appointed  instructor  in  economics 
and  social  science  in  Wesleyan  University. 


1922]  Xotes  749 

Mr,  Charles  H.  Fernald  has  charge  this  year  of  the  work  in  advertis- 
ing, salesmanship,  and  merchandising  in  the  School  of  Commerce  of  the 
University  of  North  Carolina,  with  the  rank  of  assistant  professor. 

Miss  Barbara  Gamwell  has  been  appointed  instructor  in  economics  in 
the  University  of  Idaho. 

Mr.  Paul  F.  Gemmill  has  been  appointed  assistant  professor  of  econ- 
omics in  the  Wharton  School  of  the  University  of  Pennsylvania. 

Miss  Evelyn  S.  Gibson  has  been  promoted  from  the  rank  of  assistant 
to  that  of  instructor  in  economics  in  Vassar  College. 

Miss  Ruth  Gillette  has  been  made  instructor  in  economics  in  Vassar 
College. 

Professor  J.  L.  Gillin,  who  was  on  leave  of  absence  during  1921-1922 
from  the  University  of  Wisconsin  to  serve  as  educational  director  of  the 
American  Red  Cross  at  Washington,  D.  C,  has  returned  to  the  University 
of  Wisconsin  for  his  regular  work  in  sociology. While  with  Red  Cross  he 
made  a  study  of  the  courses  training  for  social  work  in  the  United  States. 

Dr.  Carter  L.  Goodrich  lias  been  appointed  instructor  in  economics  at 
Amherst  College  for  the  current  academic  year. 

Dr.  W.  D.  Gordon  has  been  made  assistant  professor  of  accounting  in 
the  Wharton  School  of  the  University  of  Pennsylvania. 

Mr.  Harold  W.  Guest  has  been  appointed  instructor  in  economics  at 
Lafayette  College. 

Professor  Harry  G.  Guthman  has  resigned  as  assistant  professor  at 
Syracuse  University  to  accept  the  position  of  associate  professor  in  the 
School  of  Business  Administration  at  the  University  of  Texas. 

Professor  F.  H.  Hankins,  recently  of  Clark  University,  has  accepted  a 
professorship  of  sociology  at  Smith  College. 

Mr.  William  B.  Harrell  has  been  appointed  instructor  in  economics  and 
accounting  at  the  University  of  North  Carolina. 

Mr.  H.  C.  Hawkins,  special  agent  of  the  Department  of  Commerce  at 
Washington,  D.  C,  has  been  made  assistant  professor  of  commerce  and 
foreign  trade  at  the  University  of  Virginia. 

Miss  Edith  Hess  has  been  appointed  assistant  professor  in  the  depart- 
ment of  economics  and  sociology  at  Ottawa  University,  Kansas. 

Mr.  Henry  Higgs,  of  the  London  Economist,  arrived  in  New  York 
early  in  October,  is  giving  a  series  of  lectures  at  several  universities  and  will 
return  to  England  in  December. 

Professor  David  Himmelblau  is  now  head  of  the  department  of  ac- 
counting in  the  School  of  Commerce  of  Northwestern  University. 

Professor  Asher  Hobson,  of  Columbia  University,  sailed  for  Rome  in 
September  in  the  capacity  of  agricultural  economist  in  the  Federal  Bureau 
of  Agricultural  Economics.  He  will  study  the  organization  and  work  of 
the  International  Institute  of  Agriculture,  also  the  statistical  and  economic 
data  on  file  at  the  Institute. 


750  Notes  [December 

Mr.  Iskander  Hourwich  has  accepted  an  appointment  as  professor  of 
industrial  research  at  Antioch  College,  Yellow  Springs,  Ohio. 

Professor  S.  S.  Huebner  is  acting  as  insurance  adviser  to  the  Com- 
mittee on  the  Merchant  Marine  and  Fisheries  of  the  House  of  Representa- 
tives and  the  United  States  Shipping  Board,  and  as  Superintendent  of  In- 
surance of  the  District  of  Columbia.  He  is  also  serving  as  a  member  of 
the  Insurance  Committee  of  the  United  States  Chamber  of  Commerce,  and 
of  the  Committee  on  Insurance  and  Fire  Prevention  of  the  Philadelphia 
Chamber  of  Commerce. 

Mr.  J.  Hugh  Jackson,  educational  director  with  Price,  Waterhouse  & 
Company,  has  accepted  an  invitation  from  the  University  of  Chicago  to  give 
a  double  minor  in  auditing  during  the  1923  summer  quarter.  The  course 
will  be  open  to  college  and  university  instructors  and  to  graduate  students. 

Dean  Emory  R.  Johnson,  of  the  Wharton  School  of  the  University  of 
Pennsylvania,  sailed  for  South  America  on  October  4,  and  will  serve  as  a 
delegate  of  the  United  States  government  to  the  Second  American  Congress 
of  Economic  Expansion  and  Commercial  Instruction  as  well  as  to  the  Cotton 
Congress.  He  will  also  represent  the  interests  of  the  United  States  Cham- 
ber of  Commerce  and  the  Alumni  of  the  University  of  Pennsylvania. 

Professor  F.  F.  Jordan,  who  for  the  past  three  years  has  been  at  the  head 
of  the  department  of  economics  and  business  administration  in  De  Paul 
University,  Chicago,  has  been  appointed  assistant  professor  and  head  of  the 
department  of  marketing.  College  of  Engineering  and  Commerce,  Univer- 
sity of  Cincinnati. 

Dr.  E.  A.  Kincaid,  of  the  University  of  California,  has  been  appointed 
associate  professor  of  economics  at  the  University  of  Virginia. 

Dr.  Clyde  L.  King,  of  the  Wharton  School  of  the  University  of  Penn- 
sylvania, has  been  appointed  by  the  Governor-elect  of  Pennsylvania  as 
chairman  of  the  Citizens  Committee  on  the  Finances  of  the  State  of  Penn- 
sylvania. The  committee  will  investigate  the  revenue  of  the  state  from 
various  sources,  methods  of  taxation,  governmental  expenditures,  and  will 
make  recommendations  to  the  fiscal  policies  of  the  state  with  a  view  to  the 
establishment  of  a  budget  system  in  state  finances. 

Professor  C.  C.  Kochenderfer,  who  during  the  past  five  years  has  held 
the  professorship  of  commerce  at  George  Washington  University,  Wash- 
ington, D.  C,  and  who  has  also  served  as  chief  of  the  European  Division 
of  the  United  States  Bureau  of  Foreign  and  Domestic  Commerce,  has  begun 
his  duties  in  the  department  of  economics  in  Colgate  University,  Hamilton, 
New  York. 

Mr.  C.  A.  Kulp  will  give  a  course  in  organized  stock  and  produce  ex- 
change markets  in  the  summer  school  of  the  University  of  Pennsylvania  in 
1923. 

Professor  Edmond  E.  Lincoln  has  left  the  Harvard  Graduate  School 
of  Business  Administration  to  become  chief  statistician  of  the  Western 
Electric  Company  in  New  York. 

Mr.  H.  J.  Loman  has  been  appointed  assistant  professor  in  insurance 


1922]  Notes  751 

at  the  Wharton  School  of  the  University  of  Pennsylvania.  He  will  conduct 
a  course  in  insurance  in  the  summer  school  of  the  University  of  Pennsyl- 
vania in  1923. 

Mr.  John  J,  Louis,  of  the  Dayton  Company  of  Minneapolis,  has  been 
made  lecturer  in  marketing  at  the  University  of  Minnesota. 

Mr.  J.  Lee  McDonald,  of  Columbia  University,  is  at  the  University 
of  Minnesota  this  year,  giving  the  courses  of  Dr.  Blakey,  during  the  latter's 
absence. 

Mr.  Arthur  D.  Maxwell  has  been  made  instructor  in  accounting  at  the 
Wharton  School  of  the  University  of  Pennsylvania. 

Mr.  E.  E.  Muntz,  of  Hobart  College,  is  now  instructor  in  the  depart- 
ment of  economics  and  social  institutions  of  Princeton  University. 

Dr.  Claudius  T.  Murchison  has  been  promoted  from  associate  profes- 
sor of  business  economics  to  professor  of  business  economics  in  the  Univer- 
sity of  North  Carolina. 

Professor  Jay  L.  O'Hara,  of  Carnegie  Institute  of  Technology,  has 
been  appointed  lecturer  in  business  organization  at  the  University  of  Min- 
nesota. 

Mr.  W.  E.  Payne  has  been  appointed  instructor  in  economics  in  the 
Liberal  Arts  College  of  the  University  of  Cincinnati. 

Miss  Ida  M.  Pope  has  been  made  instructor  in  economics  in  the  Uni- 
versity of  Idaho. 

Professor  Alva  E.  Prickett,  of  Indiana  University,  has  been  promoted 
from  the  rank  of  assistant  professor  to  that  of  associate  professor  of  econ- 
omics. 

Miss  Margaret  Ray  has  been  appointed  assistant  in  economics  in  Vassar 
College. 

Professor  L.  A.  Rufener  has  been  promoted  to  a  full  professorship  at 
West  Virginia  University. 

Mr.  William  G.  Schluter  has  been  appointed  assistant  professor  of 
finance  in  the  Wharton  School  of  the  University  of  Pennsylvania. 

Mr.  Lynn  I.  Schoonover  has  been  made  assistant  professor  of  economics 
in  the  University  of  Idaho. 

Professor  E.  R.  A.  Seligman,  of  Columbia  University,  will  go  to 
Europe  at  the  end  of  January  to  work  on  international  finance  for  the 
League  of  Nations  at  Geneva. 

Mr.  James  G.  Smith  has  been  appointed  instructor  in  economics  and 
social  institutions  in  Princeton  University. 

Mr.  Shirley  D.  Southworth  has  been  made  instructor  in  the  department 
of  economics  and  social  institutions  of  Princeton  University. 

Mr.  Earle  S.  Sparks  has  been  promoted  to  an  assistant  professorship 
in  the  department  of  economics  in  Tufts  College. 

Mr.  James  L.  Stever  has  been  appointed  instructor  in  accounting  in 
the  Wharton  School,  University  of  Pennsylvania. 


752  Notes  [December 

Professor  Walter  W.  Stewart,  of  Amherst  College,  has  obtained  leave 
of  absence  for  the  present  academic  year  in  order  to  accept  the  position 
of  director  of  the  Division  of  Analysis  and  Research  of  the  Federal  Reserve 
Board. 

Professor  R.  H.  Tucker,  of  Washington  and  Lee  University,  has  re- 
ceived an  appointment  to  the  Virginia  Commission  on  Simplification  of 
State  Government,  created  by  the  1922  session  of  the  legislature.  This 
commission  will  make  a  study  of  state  and  local  government  in  Virginia, 
and  present  recommendations  to  the  1924  session  of  the  legislature,  looking^ 
to  economy  and  efficiency. 

Dr.  Rexford  G.  Tugwell  has  been  made  assistant  professor  in  the  de- 
partment of  economics,  Columbia  University. 

Dr.  U.  G.  Weatlierly,  of  Indiana  University,  spent  last  summer  at 
the  University  of  Colorado,  where  he  gave  a  course  of  lectures. 

Mr.  Georges  M.  Weber,  special  expert  of  the  United  States  Tariff  Com- 
mission, has  accepted  an  appointment  as  a  member  of  the  staff  of  the  newly 
created  Institute  of  Economics  in  Washington.  Mr.  Weber  recently  return- 
ed from  Europe  where  lie  made  a  study  of  industrial  conditions  for  the 
Tariff  Commission. 

Mr.  Carl  Joseph  Whelan  is  an  instructor  in  economics  in  Princeton 
University. 

Mr.  John  P.  Young  is  an  instructor  in  economics  and  social  institutions 
in  Princeton  University. 

Mr.  C.  C.  Zimmerman  has  been  made  instructor  in  economics  at  the 
University  of  Missouri. 


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