Frank A. (Frank Albert) Fetter.

Manual of references and exercises in economics for use with volume II. Modern economic problems online

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Europe. 1910.

Henderson, (7. R., Industrial insurance in the United States. 1909.
Lewis, F. W., State insurance. 1909.
National Civic Federation, Social Insurance Department, Report of

the committee on preliminary foreign inquiry. 1915.
Rulinow, I. M ., Standards of sickness insurance. J. P. E., 23 : 221-

251, 327-364, 437-464. 1915.

United States Bureau of Labor, Annual reports, 1908, 1909.
Warren, B. S., and Sydenstricker, Edgar, Health insurance. 1916.

QUESTIONS.

1. Are industrial accidents more frequent in low paid or in high
paid occupations?

2. Suggest advantages and disadvantages of a general system of
compulsory industrial insurance for old age, sickness and accidents.
What are the essential differences between these three forms of in-
surance ?

3. Show to what extent a system of workingmen's insurance has
been developed in one of the following countries: Germany, France,
Italy, England. In the development of a general system of work-
ingmen's insurance in the U. S., which one of the above forms will
probably first come in? For what reasons has a system of this kind
not been developed in the U. S. ? Henderson, C. R., Industrial insurance.



CHAPTER 24
POPULATION AND IMMIGRATION

REFERENCES.

* Adams and Sumner, ch. III.

* Commons and Andrews, ch. II, sec. 4.



AND EXERCISES IN ECONOMICS 45

Fairchild, H. P., Immigration. 1913.

The standard of living up or down? A. E. Rev., 6: 9-25. 1916.
Fetter, F. A., Population or prosperity. A. E. Rev., 3 (no. 1,

supp.) : 5-19. 1913. (Presidential address before the American.

Economic Association, 1912, much of which is incorporated with

chap. 24 in the text.)
Goldenweiser, E. A., Walker's theory of immigration. Am. J. Soc.,

18:342-351. 1912-1913.

Hall, P. F., The recent history of immigration and immigration re-
striction. J. P. E., 21 : 735-751. 1913.
*Hamilton, Readings, 384-386, 392-395.
Husband, W. W., The significance of emigration. A. E. Rev., 2 (no. 1,

supp.) : 79-85. 1912. Round table discussion of above, 86-88.
Jenks, J. W., and Lauck, W. J., The immigration problem. 1912.
Lauck, W. J., The vanishing American wage-earner. Atlan. Mo.,

110: 691-696. 1912.
* Materials, 146-156.
Mayo-Smith, Richmond, Statistics and economics. 1899. Bk. I,

ch. V.
Mayo-Smith, Richmond, Statistics and sociology. 1895. Bk. I, chs.

V-VII.
Millis, H. A., Some economic aspects of Japanese immigration.

A. E. Rev., 5: 787-804. 1915.
Page, T. W., The distribution of immigrants in the United States

before 1870. J. P. E., 20: 676-694. 1912.
Page, T. W., Some economic aspects of immigration before 1870.

Ibid., 20:1011-1028; 21:34-55. 1912, 1913.
Roberts, Peter, The new immigration. 1912.
Ross, E. A., The old world in the new. 1914.
* Source Book, 187-198. (Extract from Jenks and Lauck.)
Warne, F. J., The tide of immigration. 1916.

QUESTIONS.

1. Tabulate and chart the changes that have taken place in our
immigration in regard to (1) amount, (2) character. What prob-
lems are presented by these facts? Stat. Abst.

2. Explain the terms "the new immigration" and "the old immigra-
tion," and give the important statistical facts regarding them.

3. Show the application of the doctrine of population to the present
problem of immigration and wages in America.

4. Do the figures on immigration show anything as to the need of
legislation restricting immigration?



46 MANUAL OF REFERENCES

5. What has been the effect of the recent immigration into the
United States upon the use of machinery?

6. Apply the theory of wages to explain the effect of present im-
migration on the wages of unskilled or slightly skilled workers.

7. If the supply of labor of any class were to be decreased ten per
cent., would wages rise in like proportion?

8. Is immigration now adding to the general welfare in the United
States? State the facts and general economic principles on which
you base your answer.

9. If there is an immigration of half a million workers annually
into a country for a period of ten years during which no new natural
resources are made available, would wages in that country be affected?
If so, of what classes of workers? What would be the effect on the
amount of income received by land owners?

10. Explain how the general principles of price-determination hold
in the determination of wages. Show how these principles apply when
there is extensive employment of southern and eastern Europeans.
(See Source Book.)

11. If in a given labor market the number of laborers increases
while the number and technical efficiency of indirect agents remains
unchanged, what change, if any, will result in the average rate of
wages? What change, if any, will there be in the return to the indirect
agents ?

12. Is common, unskilled labor "scarce" (in any reasonable sense
of the word) in China? in the United States?



CHAPTER 25

AGRICULTURAL AND RURAL POPULATION

I

REFERENCES.

Carver, T. N., Selected readings in rural economics. 1916.
Carver, T. N., The work of rural organization. J. P. E., 22: 821-844.
1914.

Coulter, J. L., Agricultural development in the United States, 1900-

1910. Q. J. E., 27: 1-26. 1912-1913.
Hibbard, B. H., Tenancy in the north central states. Q. J. E.,

25:710-729. 1910-1911.
Hibbard, B. H., Tenancy in the north Atlantic states. Q. J. E.,

26: 105-117. 1911-1912.



AND EXERCISES IN ECONOMICS 47

Hibbard, B. H., Tenancy in the western states. Q. J. E., 26: 363-376.

1911-1912.
Hibbard, H. E., Tenancy in the southern states. Q. J. E., 27: 482-496.

1912-1913.
Hoagland, H. E., The movement of rural population in Illinois.

J. P. E., 20: 913-927. 1912.
Nourse, E. G., Agricultural economics. 1916. (A large volume of

readings, well selected and edited.)
Round table discussion. The decline of the rural population. A. E.

Rev., 2 (no. 1, supp) : 51, 52. 1912.
Round table discussion. Rural conditions in the south. Ibid., 48-50.

1912.

Taylor, H. C., Agricultural economics. 1905.
Vogt, P. L., The farmer's labor income. A. E. Rev., 6: 808-822.

1916.

QUESTIONS.

1. Cite any instances you have noted of local changes of population
distribution as between country and city. What are the chief facts
of interest in these cases? What forces can you assign as causes of
the changes? Has agricultural activity been accelerated or retarded?
Has it received a set-back?

2. A wealthy metropolitan banker purchases a large country estate
in a section in which farming is practically on a subsistence basis
and in which in recent years many farms have been abandoned. He
applies labor and materials lavishly to the soil, sparing no expendi-
tures for purposes which will assist in the production of crops of
the best quality. Under what conditions can this be profitably done?
What will be the probable effect on local agriculture, (a) if the en-
tire product of the estate is consumed upon it? (b) if a substantial
part of the product is marketed in competition with that of the
local farmers? What changes are likely to occur with reference to the
occupation of the local population? With reference to its migration?

3. Why is it that immigrants are now taking up the farms of New
England which have, in some cases for years, been abandoned by native
farmers? Is the fact that they are doing so an argument for or
against the restriction of immigration?

4. What is the general tendency of immigrants in the matter of set-
tlement in urban and rural communities?

5. If it is true that the relative decline of the agricultural popula-
tion of the United States can be explained by the operation of purely
economic forces, on what grounds is there justification for complaint
as to the evils of concentration of population in cities?



48 MANUAL OF REFERENCES

CHAPTER 26
PROBLEMS OF AGRICULTURAL ECONOMICS

REFERENCES.

Carver, T. N., Selected readings in rural economics. 1916.

Coulter, J. L., Marketing of agricultural lands in Minnesota and
North Dakota. A. E. Rev., 2:282-301. 1912.

Goldenweiser, E. A., The farmer's income. A. E. Rev., 6: 42-48.
1916.

Huebner, G. G,, Agricultural commerce: the organization of Ameri-
can commerce in agricultural commodities. 1915.

International Institute of Agricultural Statistics Year Book. Mono-
graphs on agricultural cooperation in various countries. 1916.

Kemmerer, E. W., Agricultural credit in the United States. A. E.
Rev., 2: 852-872.

*Materials, 407, 408, 409.

Metcalf, R., and Black, C. G., Rural credit cooperation, and agri-
cultural organization in Europe. 1915.

Olmsted, V. H., The purchasing power of farm products. United
States Dept. of Agric., Report, 1912.

*Phillips, ch. XXVII. On agricultural credit.

Powell, F. W., Cooperative marketing of California fresh fruit.
Q. J. E., 24: 392-418. 1909-1910.

Putnam, G. E., Agricultural credit legislation and the tenancy prob-
lem. A. E. Rev., 5: 805-815. 1915.

Putnam, G. E., Farm credit in Kansas. Ibid., 27-37. 1915.

Putnam, G. E., The federal rural credit bill. Ibid., 6: 770-789.
1916.

Shaw, A. W., Some problems in market distribution. Q. J. E.,
26:703-765. 1911-1912.

*Source Book, 34-47, 48-57, 75-80, 81-90.

Warren, G. F., Farm management. 1913. (Treats primarily the
problem of the individual farm, but also many of the broader
economic questions.)

Weld, L. D. H., The marketing of farm products. 1916.

QUESTIONS.

1. Why has the corporate form of business organizations not been
as extensively introduced into the farming industry as into other
industries ?

2. Discuss the following statements quoted from an article on the



AND EXERCISES IN ECONOMICS 49

Federal Farm Loan Act of 1916. "There was no necessity for any
kind of federal legislation affecting the land credit problem of land-
owners. . . . There is, however, the more pressing problem ... of
making the conditions of country life more attractive to the younger
generation of farmers. In accomplishing this end some form of land
purchase legislation is needed." Amer. Econ. Rev., 6: 789. 1916.

3. How do urban and rural districts differ in their preference for
and use of different kinds of bank credit.



CHAPTER 27
THE RAILROAD PROBLEM

REFERENCES.

Brown, H. Cr., The competition of transportation companies. A. E.
Rev., 4: 771-792. 1914.

Brown, H. G., Transportation rates and their regulation. 1916.

Clark, J. M., Some neglected phases of rate regulation. A. E. Rev.,
4: 565-574. 1914.

Dixon, F. H., The Mann-Elkins Act, amending the act to regulate
commerce. Q. J. E., 24: 593-633. 1909-1910.

Dunn, 8. 0., Railway discrimination. J. P. E., 20: 437-461. 1912.

Gephart, W. F., The place of the canal in a national system of trans-
portation. A. E. Assn. Bui., 4th ser., 1 (no 2) : 188-196. 1911.
Round table discussion, 197-203.

Hadley, A. T., Railroad transportation. 1884.

Hammond, M. B., Railway rate theories of the interstate commerce
commission. Q. J. E., 25: 1-66, 279-336, 471-538. 1909-1910.

Johnson, E. R., American railway transportation. 3d ed., 1908.

Johnson, E. R., Inland waterway policy. A. E. Assn. Bui., 4th ser.,
1: 166-174. 1911.

Johnson, E. R., The principles of governmental regulation of rail-
ways. P. S. Q., 15:37-49. 1900.

McFall, R. J., Railway monopoly and rate regulation. 1916.

Materials, 627, 628.

Meyer, B. H., Certain considerations in railway rate making. A. E.
Rev., 4 (no. 1, supp.) : 69-80. 1914. Round table discussion of
above, 81-100.

Prouty, C. A., Railway discriminations and industrial combinations.
A. A. A., 15: 41-50. 1900.

Ripley, W. Z., (Ed.), Railway problems. 1907.



50 MANUAL OF REFERENCES

Ripley, W. Z., Railroads: rates and regulation. 1912.

Ripley, W. Z., Railroad overcapitalization. Q. J. E., 28 : 601-629.

1913-1914.

Ripley, W. Z., Railroads: finance and organization. 1915.
Source Book, 361-367, 368-378, 379-382.

QUESTIONS.

1. Why is transportation a greater problem in the United States
than in Europe?

2. Show in what way natural waterways have determined the loca-
tion of leading cities in America.

3. Give examples of cities whose growth has been caused by rail-
roads.

4. Upon what considerations are commodities classified for ship-
ment by railroads? Is classification unfair discrimination? Illus-
trate by an example.

5. What classes of interests are affected by increasing the minimum
weight for carloads? Explain in each case whether the effect is
favorable or unfavorable and the reasons therefor.

6. Does cost of service have anything to do with the rates charged
by railroads?

7. Give an example of a blanket rate territory and the reasons
therefor.

8. What is the "long and short haul" clause of the Interstate
Commerce Act? Explain why railroads make rates which contravene
the terms of this clause, and why the government should forbid the
railroads to make such rates.

9. A railroad connecting two competitive points charges one-fourth
of a cent per ton mile on grain shipments from its inland terminus,
while it charges one cent per ton mile on grain shipments from non-
competitive territory. What considerations have probably led to the
establishment of the above rates?

Might not the railroad increase its net revenue by raising the rate
on through traffic to one-half cent per ton mile and lowering the local
rate to three-fourths of a cent per ton mile?

10. The rate on corn in carload lots from Omaha, Neb. to Newport
News, Va. is 10 cents per hundred pounds. From the Omaha region
there are competing carriers to the Gulf and other Atlantic ports.
The rate on corn in carload lots from points in Virginia to Newport
News over the same route is 12 cents per hundred pounds. Could not
the local rates be lowered if the carriers advanced the rates on the
long-distance haul?



AND EXERCISES IN ECONOMICS 51

11. What cases have you seen where the railroads impose unjustly
on the public?

12. Give instances you have seen or heard of where two shippers
paid different rates for the same service.

13. Do you know any large cities that are more favorable shipping
points than neighboring towns?

14. What legal rights do the builders of a railroad have that are
not enjoyed by all citizens?

15. Can you see any clear distinction between the public nature of
a railroad and that of a horse and carriage ?

16. What harm can there be in the acceptance of passes by judges,
legislators, and other public officials?

17. Ought the law prohibit the sale of tickets by "scalpers"?

18. If your neighbor rides on a pass and you pay your fare, are
you helping to pay for his ride?

19. Why should preachers get half-fare rates?

20. What are the chief reasons for the governmental regulation of
railways ?

21. Why does the question of the control of the railways in the in-
terest of the public present especial difficulties in America?



CHAPTER 28
THE PROBLEM OF INDUSTRIAL MONOPOLY

REFERENCES.

Bolen, G. L., Plain facts as to the trusts and the tariff. 1902.

Collier, W. M., The trusts. 1900.

Cotter, A., The authentic history of the United States Steel Cor-
poration. 1916.

Hobson, J. A., The evolution of modern capitalism. Ed., 1912.
Ch. V.

Jones, Eliot, The anthracite coal combination in the United States.
1914.

King, W. /., The wealth and income of the people of the United
States. 1915.

Meade, E. 8., The economics of combination. J. P. E., 20: 358-372.
1912.

Trust finance. 1903.

Montague, G. H., Trusts of to-day. 1904.



52 MANUAL OF REFERENCES

Ripley, W. Z., Industrial concentration as shown by the census.

Q. J. E., 21:651-658. 1906-1907.

(Ed.), Trusts, pools and corporations. Ed., 1916.
* Source Book, 255-264. (Extract from United States Commissioner

of Corporations, Report on the transportation of petroleum.)
Stevens, W. S., Classification of pools and associations. A. E. Rev.,

3:545-575. 1913.

Stevens, W. S., (Ed.), Industrial combinations and trusts. 1913.
Stevens, W. S., A group of trusts and combinations. Q. J. E.,

26: 593-643. 1911-1912.
Stevens, W. S., The powder trust, 1872-1912. Ibid., 444-481.

1911-1912.

United States Commissioner of Corporations, Report on the trans-
portation of petroleum. 1906.
Willoughby, W. P., The integration of industry in the United States.

Q. J. E., 16: 94-115. 1901-1902.

QUESTIONS.

1. What large trusts have recently been formed?

2. State the motives for forming trusts, separating those which
are socially beneficial and those which are anti-social.

3. Enumerate the advantages possessed by a "trust" over a small
competitor, and indicate which of these are the results of large scale
production and which are due to the possession of monopoly power.

4. Are there any conditions under which a combination would be
a more economical unit of production and distribution than a single
plant large enough to secure all advantages to be obtained from mere
quantity of output? If so, state them clearly.

5. Explain carefully the causes and limits of the advantages of
large production. Give three examples of industries in which the ad-
vantages are seen.

6. Have you observed the growth of any local industry from a small
beginning to large proportions? If so, how do you account for it?

7. What is the largest manufacturing establishment in your home
town? Would a number of smaller establishments of the same sort
and with the same aggregate capacity succeed as well? Why?

8. What relation has improved transportation and other means of
communication to trusts?

9. What are the chief methods by which trusts or combinations
have sought to make economies in management?

10. Describe the characteristic features of the pool, the trust and the
holding company.



AND EXERCISES IN ECONOMICS 53

11. Describe any agreement of which you know, made between mer-
chants or manufacturers for the purpose of regulating prices. Did
prices go up or down as a result?

12. What is a simple price agreement? How does it differ from a
pool? Is there any difference in the matter of legality? Reasons.

13. What are the limits to the price-fixing and profit-earning powers
of monopolies? Are there any other conditions which will tend to
check the indefinite growth of combinations?

14. Explain and illustrate by a concrete example the circumstances
relating to cost of production which tend to make a monopoly price
lower than the previous competitive price for the same article. No
reference is here intended to local or temporary cuts in price by monop-
olies which are intent by such means on capturing a local market.

15. If all trade is exchange, do not the members of a trust reduce
their income when they raise the price of their products by artificial
agreement ?

16. Five plants engaged in the production of a given article in dif-
ferent parts of the United States are combined under the ownership
of a single corporation formed for this purpose. Before the combina-
tion these five plants produced 75 per cent, of the total output of the
article in question, each producing approximately 15 per cent.; the
remaining 75 per cent, was produced by seven plants, no one of these
turning out more than 5 per cent, of the total output. Each of the
first five plants was large enough to secure all known economies in
the costs of transforming the raw material into the physically finished
product, and each was running to its full capacity. The aggregate
net earnings of the five plants were $1,000,000 a year. The cost
of reproducing these five is $14,000,000. The new corporation issues
and pays to the owners of the properties taken over $10,000,000 in
5 per cent, first mortgage bonds, $6,000,000 in cumulative preferred
stock, and $8,000,000 in common stock.

What will determine whether this combination possesses monopoly
power ?

Is the corporation overcapitalized? If so, to what extent? State
clearly what you mean by overcapitalization?

Is it probable that the earnings of the new corporation will be
greater than the aggregate earnings of the five plants, if the price of
the product is not increased? If so, how will this increase be gained?

If there is an increase in earnings, how will the price of each of
the three kinds of securities of the corporation be affected?

17. Suppose that the effective demand for a certain kind of goods



54 MANUAL OF REFERENCES

in the country as a whole will vary in the following manner with
the price changes indicated:

$1.00 1,000,000 units

1.10 900,000 units

1.20 800,000 units

1.30 700,000 units

1.40 600,000 units

1.50 500,000 units

1.60 400,000 units

1.70 300,000 units

1.80 200,000 units

There are ten companies each producing 100,000 units at a cost
of 90 cents (including all costs but an allowance for dividends on
investment) this giving just enough of a margin to each company
to cause it to continue in the industry. What immediate effect on
prices could a combination consisting of six firms have, assuming
that the cost per unit of product and that the output of the inde-
pendents remain unchanged? Show for each of the prices indicated
what the amount of the margin made by the four independent com-
petitors (altogether) and by the combination would be. What less
immediate effects would be likely to follow, and why?

18. Is granting patents an interference with trade similar to tariffs?

19. Is it right that the lucky inventor of a popular toy should
make $100 a day from it?

20. Is it right that an inventor should by patent laws be able to
keep the profits of his business high?



CHAPTER 29
PUBLIC POLICY IN RESPECT TO MONOPOLY

REFERENCES.

Anderson, B. M., Jr., Competition versus monopoly the issue of the

campaign. Independent, 73: 997-1002. 1912.
Bolen, G. L., Plain facts as to the trusts and the tariff. 1902.
Brown, W. J., The prevention and control of monopolies. 1915.
Clark, J. B., The problem of monopoly. 1904.
Clark, J. B., and J. M., The control of trusts. Ed., 1914.
Clark, J. If., Rates for public utilities. A. E. Rev., 1 : 473-487.

1911.
Collier, W. M., The trusts. 1900.



AND EXERCISES IN ECONOMICS 55

Dames, J. E., Trust laws and unfair competition. 1916.

Durand, E. D., The trust problem. 1915. See also Q. J. E.,
28:381-416,664-700. 1913-1914.

Durand, E. D., The trust legislation of 1914. Q. J. E., 29 : 72-97.
1914-1915.

Ely, R. T., Monopolies and trusts. 1900.

Gray, J. H., The control of public service corporations. A. E. Rev.,
4 (no. 1, supp.) : 18-44. 1914. Round table discussion of above,
45-68.

Hotchbiss, W. E., Recent trust decisions and business. A. E. Rev.,
4 (no. 1, supp.) : 158-172. 1914. Round table discussion of above,
173-195.

Jenks, J. W., The trust problem. 1900.

Knauth, 0, W., Capital and monopoly. P. S. Q., 31: 244-259. 1916.

Knauth, O..W., Competition and capital. Ibid., 30: 578-590. 1915.

Knauttf, 0. W., The policy of the United States toward industrial
monopoly. 1914.

LeRossignol, J. E., Monopolies past and present. 1900.

Orth, S. P. ( Ed. ) , Readings on the relation of government to prop-
erty and industry. 1915.

Ripley, W. Z., (Ed.), Trusts, pools and corporations. Ed., 1916.

*Source Book, 383-385. The Sherman anti-trust act.

Stevens, W. #., The Clayton act. A. E. Rev., 5: 38-54. 1915.
The trade commission act. Ibid., 4: 840-855. 1914.

United States Industrial Commission, Report. 1898-1901. 19 vols.

Wright C. W., The economics of governmental price regulation.
A. E. Rev., 3 (no. 1, supp.) : 126-131. 1913. Round table dis-
cussion of this paper and that of J. M. Clark, 132-142.

Wyman, Bruce, Control of the market. 1911.

QUESTIONS.

1. What is the trust problem?

2. Does the public consider the growth of trusts to be good or
bad? What do students of the question think of it?

3. Which one of the following views do you think to be nearest
the truth and why? (a) The trust is a natural and inevitable out-
come of modern conditions and is a distinct economic gain, (b) The
trust is a result of special privileges and corporate abuses, (c) The
trust is the greatest invention of this or any other age.

4. Would it be a good thing for society if a trust made great
economies in production, crowded out its smaller competitors, and
maintained prices just where they were before, dividing among its
shareholders the amounts saved?



56 MANUAL OF REFERENCES

5. How would the effects on society be different if prices were re-
duced by better organization and the prevention of waste?

6. If it could be shown that trusts have lowered prices, should
th.at fact exempt them from all interference from legislation ?

7. Describe briefly the "unfair practices" of monopolistic corpora-
tions. What specific features of the recent railroad and trust legis-
lation are aimed at the prevention of these practices?


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Online LibraryFrank A. (Frank Albert) FetterManual of references and exercises in economics for use with volume II. Modern economic problems → online text (page 4 of 5)