Frank A. Fetter

“ 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? ”

“ If in a given community all watch cases were made of gold, and each case contained one ounce of gold, would you expect the value of watch cases to fall by exactly one-half if the number of watch cases in the community were doubled, all other things remaining the same? If in another community (at another time) all exchanges were made exclusively by the use of gold coins, each containing an ounce of pure gold, would you expect that prices in general would be exactly doubled in case no change occurred in the community except a doubling of the number of coins in circulation? ”

“ A certain island has no silver mines and no foreign trade. It effects all its exchanges by the actual use of silver coin whose coinage is free and gratuitous. It has no banks, and does not resort either to barter or to credit. Silver is also used in the shape of plate in the island. Originally it had 100,000 silver coins in circulation, each containing one ounce of pure silver. ”

“ 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? ”

“ If the owners of marble quarries can show that their net income is 30 per cent. greater by reason of the protective tariff upon foreign marbles, does this show that the tariff increases the wealth of the protecting country? ”

“ If there are twenty banks in a town and no clearing house, how many collections would have to be made by all the banks daily assuming that each day depositors of each bank receive checks on the other nineteen banks? ”

“ Is the provision of law whereby the fractional silver coins of the United States are of less proportionate silver content than the standard silver dollar necessary to-day? Is it useful? Give your reasons.
5. Under what conditions will "bad money" fail to displace "good money" from circulation?
6. Under what circumstances will money that is not in fact convertible into other money have greater value than the material of which it (the first mentioned money) is made? Give an example from the monetary experience of the United States. ”

“ The amount of money in this community is increased so as to raise the general level of prices by 100 per cent. Assuming that the increase in money has come wholly from the more copious output of money-metal from the mines, to what extent will this rise in the general level of prices affect the rate of interest when thereafter capital is loaned for long-time periods?
17. Could a railway in the United States advantageously float a large issue of 20-year bonds in the year 1916? ”

“ State any proposition which you think that you can maintain about the relation between high or low wages and international competition. Maintain your proposition.
12. What do you say to the plan of so adjusting duties on imports as to equalize the "labor cost" of imported and domestic commodities, [Pg 34] through the levy of duties which will just offset the higher wages paid by the American employer?
13. Is a high rate of money wages an obstacle to the successful conduct of industry in competition with countries where money wages are low? ”

“ Every process through which the raw material passes in its conversion into fabrics would mean employment for American wage-earners."
Discuss the proposition that the aggregate for the labor of American wage-earners is less if we export raw cotton than if we should manufacture the raw cotton in this country for export.
8. Assuming that an import duty on tea, if sufficiently high, would create a tea growing industry in the United States capable of supplying the whole domestic demand, trace the various economic effects of such a duty. ”

“ Would a nation be poorer, if, like Sparta, it prohibited all money?
9. Is a community poor because it has little money in circulation or does it have little money in circulation because it is poor?
10. Could a country better do without money, horses, or roads?
11. Why does nearly all the gold produced in California leave the state? What keeps any of it there?
12. The mint price of an ounce of gold, .900 fine, is alike at San Francisco and Philadelphia, $18.604. Why is gold ever shipped from California to New York?
13. Does gold cost the day-laborer as much in California as in New York? ”

“ If a trade union sets a minimum rate of wages lower than the competitive market rate would be in the absence of organization, which rate would the members receive? State the facts from the Source Book which lead you to your answer.
15. Have trade unions raised or lowered the wages of non-union labor?
16. What is the attitude of American trade unions toward efficiency systems as attempts to introduce improved methods of production (not systems of payment) ? ”

“ Note any habits of friends that result in their carrying more or less money than others of the same income.
15. What determines the amount of money needed by different persons, towns, states, and nations?
16. Give examples of things that increase the demand for money.
17. On an isolated island would it make any difference as to the value of money if there were but one gold-mine or several competing ones, supposing that the output were the same?
18. What per cent. of the total money in the world is the yearly output of gold; of silver; of gold and silver? ”

“ Community B can produce wheat at 70 cents per bushel, corn at 45 cents per bushel and potatoes at 42 cents per bushel. Supposing that each community can raise just enough of these foodstuffs for its own use, will there be any incentive for them to exchange these products?
6. "A man is of all sorts of luggage the most difficult to be transported." What is the bearing of this fact upon the theory of international trade?
7. Can a country have a persisting excess of merchandise exports over merchandise imports? ”

“ After a certain date, as these coins were paid into the government treasury for taxes, at the rate of 5,000 one-ounce coins per week, the one-ounce coins were melted and the resulting bullion was recast, each new coin weighing 2 ounces and bearing the same name as the original one-ounce coins. Thereafter all coins struck at the island Mint contained two ounces of silver, and at that standard coinage continued free and gratuitous. When the [Pg 16] government first pays out the new 2-ounce pieces, will they remain in circulation with the old one-ounce coins and have the same purchasing power? ”

“ For half a century, therefore, with regularly recurring seasons of surplus production, there came those inevitable commercial crises which emphasized with increasing force the necessity for foreign markets. ”

“ Customers cash checks on their accounts for $600,000 receiving two-thirds of the amount in the bank's own bank notes and the other third in coin and other kinds of "lawful money." Other customers make deposits of $900,000, of which one-third is in "lawful money," one-third in the bank's own bank notes, and one-third in the checks of other depositors in the same bank. The bank buys at par $1,200,000 of railroad bonds, paying for them in its own bank notes. It pays with its own bank notes expenses for wages, stationery and taxes to the amount of $10,000. ”

“ 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 foreign exchange suddenly rose several cents, while imports and exports remained the same, to what causes might it be due?
9. If as the result of a year's foreign trade nation A obtains from other nations $10,000,000 in gold coin in settlement of the balance of international indebtedness, to what extent does that sum measure the gain of nation A from international trade? Reasons.
10. The statistics of exports and imports of the United States for the year 1908-1909 show an excess of exports over imports of $351,000, [Pg 31] 000 in merchandise; $12,000,000 in silver and $48,000,000 in gold. ”

“ Using this system of weights compute index numbers to show changes in the price levels of the same groups of commodities. How does the weighting affect your first conclusions regarding the changes in the cost of living? What is the importance of a system of weighting?
8. If the world's annual production of gold should suddenly increase five-fold, what would be the probable effect: upon the welfare of a stock exchange speculator as compared with the welfare of a teacher ”

“ State clearly and explain the movement of prices of stocks, bonds, mortgages, land, commodities generally, wages and interest rates on long time and short time loans, before, during, and after a crisis.
4. Tabulate for a series of years covering periods of prosperity and depression, the prices of stocks, bonds, real estate, and of some commodities.
[Pg 27]
5. What economic changes occurred in your own community in the panic of 1893-94, or in the years 1903-04, or in 1907-08?
6. Is it possible that the amount of all goods produced shall be in excess of the community's power of consumption? ”

“ As the average American can produce far more than he can consume, it has been proved repeatedly that as long as the sale of his products is confined to the home markets, over-production is certain to be a natural consequence of every prolonged period of activity. ”

“ Of the methods employed by trade unions to raise the wages of their members, which are prejudicial and which are not prejudicial to the interests of the rest of the community, including non-union labor? Give reasons.
13. Can wages be affected by the "collective bargaining" of trade unions and if so indicate in that connection a justification (if one exists) for trade union organization. ”

“ What will be the effect of this seigniorage charge upon (a) prices in that country, (b) the comparative value of the gold in a new coin and the same weight of uncoined gold? Make your reasoning clear. ”

“ Investors in Russian bonds are said to take out policies of insurance payable to themselves in the event of the Czar's death, their object being to guard themselves against loss by the depreciation of their Russian securities in case of political disturbances that might emerge upon a change of rulers. ”

“ Explain the terms "the new immigration" and "the old immigration," 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?
[Pg 46]
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 immigration on the wages of unskilled or slightly skilled workers. ”

“ Suppose that a corporation owns 500 buildings worth $100,000 each; that to insure against fire in an ordinary company would cost $250 for each building; and that the corporation is convinced that by the expenditure of $10,000 the fire loss can be reduced to an average of one building every three years. Would it pay the corporation to insure with some company? (F. M. Taylor.)
CHAPTER 13
INTERNATIONAL TRADE
References.
Bastable, C. E., The theory of international trade. 1897.
Brown, H. G., International trade and exchange. 1914.
[Pg 30]
Clare, G., The A B C of the foreign exchanges. ”

“ 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. ”

“ Circulation (i.e., notes outstanding) , $64,950.
Prove that your classification is correct by balancing the account. Then show the changes made in the account by the following transaction: The bank loans $25,000.00 for 90 days at 6 per cent. interest, and the borrower draws out one-half the amount, with which he is credited after the bank has made the proper deduction for interest.
13. The week's averages of the New York banks for the third week in May compare as follows in 1905 and 1904:
Explain why loans and deposits in the above table show practically the same increase from 1904 to 1905. ”