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The Guide to the Collection of the University of Chicago Library provides some identifying information for every item which has been incorporated into the collection of written works by Henry C. Simons, and an attempt has been made to arrange all items in the collection in a manner so as to make them most accessible to the researcher. This article summarizes the contents of the collection. The correspondence is divided into files by name of the correspondent and numbered in alphabetical order . Because Simons' professional interests were so often pursued in the context of personal relationships and academic and social activities, no attempt was made to distinguish between personal and professional correspondence. The University Policy section includes a number of letters and memorandums surrounding a controversy over the University of Chicago faculty contracts. The Economics Department Section includes memos regarding specific faculty appointments, faculty politics and complaints as well as some comments on student work. The unpublished manuscript section contains a number of relatively short essays, memorandums and other miscellaneous writings by the economist in various stages of completion.

The article reports on the publication of a series of pamphlets dealing with various aspects of economics education in the U.S. Two of the pamphlets are specifically designed for elementary grades. The first, "Men and Machines Work Together," tells how a class of second-grade pupils learned a great deal about men and machines. The second, "Transportation: Lifeline of America," relates the problems of transportation to specialization, interdependence and technological change.

The article comments on economist Alan Freiden's paper related to the marriage market in the U.S. Freiden has been reasonably faithful to economist Gary Stanley Becker's marriage model in his attempt to estimate the reduced-form equation explaining variation in the proportion of females married. His observational units are regional subaggregates in cross-section data. Thus, the Freiden paper represents a commendable attempt to evaluate the usefulness of the model. The major problem arising in going to the data is in translating and measuring full income. Full income is a precise concept in the theory but is made up of two main components, one of which is ambiguous in its effect upon marriage. The existence of marriage predates progressive income tax and joint returns. Nevertheless, levels of marriage incidence in modern society should depend on tax structure. Divorce costs probably vary directly with the number of immature children, thus, the index used by Freiden is not so appropriate for his higher-age groups. The notion that the "likelihood" of marriage increases the greater the difference in joint and individual household production is appealing but somewhat lacking in rigor.

The paper shows theoretically that U.S. tax laws are designed to induce equalization of private rates of return from investment in the United States and abroad but that, unless the marginal government expenditures on investment equal tax payments by the investment, there is a difference between private and social rates of return to U.S. foreign investment. Calculations covering the period 1960-69 for developed countries and U.S. holdings of bonds, equities, and direct investment in manufacturing showed that private rates of return generally were positive but that social rates of return from investing abroad rather than domestically were strongly negative, assuming zero marginal government expenditures and disregarding all externalities. The present paper has been stimulated by this controversy over the merits of international investment in general and the effects of taxation in particular. It attempts to shed light on the issues by presenting some estimates of the after-tax rates of return yielded by some forms of U.S. asset holdings abroad during the period I960-69. In a rational decision about future U.S. policies, presumably such a rate of return should carry important weight. This paper represents a pioneering effort, and its primary aim is to sort out some theoretical issues and provide a rough first estimate. No other studies of this sort seem to exist for the United States, though the broader issues of the efficiency aspects of international taxation agreements have been studied theoretically (Kindleberger 1968; Musgrave 1969) and estimates of the subsidies as dollar flows have been prepared (Musgrave 1972). The overall welfare effects of foreign investment have received a great deal of attention, and a ready set of references to these can be found in Reddaway (1968) and Dunning (1970). Jenkins (1972, chap. 4) estimates Canada's taxation gains from foreign-owned capital in Canada. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to report some tentative conclusions concerning the growth of the service industries and to indicate some implications of this growth for the economy and for economic analysis. Between 1929 and 1963 employment in the service sector grew 1.7 per cent per annum faster than in the goods sector. At some point during the past decade the United States became the first "service economy" in the history of the world, that is, the first economy in which more than half of the employed population is not involved in the production of tangible goods. The more rapid growth of services was observed for individual industries as well as the sector aggregates and for occupations as well as industries. This shift represents an acceleration of a trend that has persisted for at least the past century. Numerous conceptual and statistical problems in the measurement of real output make it difficult to explain precisely why service industry employment has grown so rapidly. The data examined in this paper appear to reject the hypothesis that the growth of real income per capita was a major explanation. The demand for services, compared with goods, may have been slightly more elastic with respect to income (principally because of the low elasticity for agriculture), but this was not an important reason for the shift of employment. Sector differences in the rate of growth of real output were probably very small; differences in the rate of growth of real output per man were probably very large. The differential in the rate of growth of real output per man reflects a moderate differential change in productivity, in the sense of efficiency in the use of resources, but this is not the only or major explanation. It also reflects a more rapid decline in hours per man in services, a more rapid rise in the quality of labor in goods industries, and a more rapid rise in capital per worker in the goods sector. The shift of employment to services has many important implications. The trends discussed here may be offset by other changes that are also taking place in the economy, but they serve to indicate the likely effects of the relative growth of services, other things remaining the same. These trends include: 1. Growing employment opportunities for women and older workers. 2. Growing opportunities for part-time employment and urban sell-employment 3. Growing need for workers with more formal education. 4. Possible decreasing importance of unions and growing importance of professional organizations. 5. Possible trend toward greater personalization of work. 6. Growing importance of small firms. 7. Growing importance of nonprofit organizations (public and private). 8. Declining relative importance of physical capital. 9. Growing stability in employment and, to a lesser extent, in output. 10, Possible increase in cyclical variability in output per man-hour. In addition to having important implications for the economy, the growing relative importance of the services appears to have implications for economic analysis as well. One problem arises because the consumer frequently plays an important role in the production of services. This unmeasured input can have significant effects on productivity in retailing, health, education, and many other service industries. A second concept that may require further development is that of labor-embodied technological change. When, as in some services, formal education is important and there is job security, the rate at which advances in knowledge affect productivity will depend in part on how fast labor embodying these new advances can be added to the work force. Another point concerns productivity and demand. The flow of production in many service industries is uneven, with sharp peaks at particular hours or on particular days, separated by periods of slow activity. Also, the size of the production run (the individual transaction) is often very small. For these reasons, the analysis of the relation between output and productivity in services will probably have to pay more attention to changes in the timing of demand and to changes in transaction size. The final implication discussed is the likelihood that real gross national product is becoming increasingly less useful for studies of productivity and economic growth, because at high levels of GNP per capita a large fraction of productive effort is devoted to services (where real output is often very difficult to measure) and to other activities, such as "do-it- yourself," that are not measured at all. In the future, we shall probably find it necessary to develop auxiliary measures of "output" and economic welfare to be used in conjunction with the gross. national product. [ABSTRACT FROM AUTHOR]

For the great majority of Americans, the most important form of household wealth is the anticipated social security retirement benefits. In 1971 the aggregate value of these annuities was approximately $2 trillion or some 60 percent of other household assets. This paper uses an extended life-cycle model to analyze the impact of social security on the individual's simultaneous decision about retirement and saving. Econometric evidence, using an estimated time series of "social security wealth," indicates that social security depresses personal saving by 30-50 percent. Implications of this research for the theory of consumption and for the level and distribution of income are discussed. [ABSTRACT FROM AUTHOR]

The paper focuses on the high value of human time. It deals with two widely different population equilibrium concepts. It extends the explanation of the secular increases in the value of human time. It takes a critical look at the usefulness of the household model in analyzing fertility in countries characterized by high birth and death rates and by substantial increases in national income in a context where the level of the economic value of human time is very low and not increasing much. The idea of a population equilibrium is viewed strictly as an analytical concept to guide economic thinking in deriving testable propositions pertaining to fertility. Two very different concepts of a population equilibrium are formulated. The first concept, as it was envisaged by the early English economists, has long been a standard part of economics. It assumes that the supply of land is fixed and that diminishing returns gradually increase the price of food as a consequence of population growth. The foundation of the second concept is the high price of human time relative to the price of the services of material factors and goods.

This paper has discussed possible mechanisms for achieving ex ante and ex post equality of political income. While any of the structural reforms could be implemented separately, it makes the most sense to combine, them. Indeed, the "equal-stake" criterion is to some extent a necessary condition for the implementation of a redistributive vote tax. A voter's winning percentage on an issue set cannot be regarded as an index of his political income unless each vote has an equal value ex ante to all voters. The idea of the state arising from a "social contract" formed by all citizens to achieve collective ends can imply the concepts of both ex ante and ex post political income equality. Of the two, only ex ante equality has received attention in the literature. Yet, to those who embrace the equalitarian ethic, the ex post equality of political income should be of even greater importance than ex ante equality of voting rights. This paper argues that the attainment of ex post equality of the political income distribution is conceptually plausible and quantitatively important. Further, a policy of vote taxation does not appear to be subject to as serious disincentive effects as taxation to obtain complete equality of ex post private economic income. This follows by analogy to elasticity conditions where voting takes very little time as opposed to the length of the work week, for example, and attempts to equalize realized private income. There do not appear to be any functional equivalents under present democratic systems to achieve ex post equality of political income. Indeed, taking the United States as an example of a two-party, geographic-based democratic system, one could argue that there are perverse mechanisms, such as monopolistic systems of committee power and the like, which tend to lead to greater inequality of realized utility for many voters. Many voters from lower income-education classes do not vote under the present system, which, although it does not... [ABSTRACT FROM AUTHOR]

The main objectives of our paper are to examine economic, political, social, demographic, and professional factors in the United States and Taiwan which may account for Chinese scholars' decisions to stay in the United States or their reluctance to return to Taiwan. Our paper is divided into five sections. Sections I and II provide background and definition of terms used in the paper. Sections III and IV present data and statistical analysis. The final section summarizes the findings. [ABSTRACT FROM AUTHOR]

Because tax deductions and tax credits associated with particular investments are worth more in equivalent pretax income to a high. bracket taxpayer than to a low-bracket one, tax-privileged investments find their way into the hands of high-bracket taxpayers. Their competition with each other and with the next lower brackets drive down pretax rates of return on such investments. As a result, although the tax system is less progressive than the rate structure alone makes it appear, it is more progressive than it would appear if we look only at net economic incomes and taxes. Tax privilege (exemption) relates qualitatively in a simple way to an investment's associated deductions and exclusions from income. It is well known, both among economists and among the lay public, that the U.S. tax system as a whole and the federal personal income tax in particular are less progressive in fact than the rate schedules make them seem. It is also well known among economists that, as Adam Smith first remarked, the tax system can induce people to misallocate resources (1937, p. 778). Much less understood is the interaction between these two phenomena, and the limits to them set by economic parameters. This paper sets out an analytical framework that explains and interprets the interaction, and that provides an improved theoretical basis for the results of studies of the incidence of U.S. income taxes. [ABSTRACT FROM AUTHOR]

This paper presents a comparison between similar types of American and Canadian forecasts of annual gross national product for an identical period (1960-69) using the same error measures. It was concluded that on mean, mean absolute, and mean square error bases, American forecasts were significantly more accurate than were the Canadian ones in predicting relative changes in their respective annual gross national products during the period 1960-69. Forecasters in both the United States and Canada were likely to have made the same types of errors on average in forecasting any given year. The general conclusion from the analysis of the errors seemed to suggest that a bias toward underestimating change may be less evident in the American gross national product forecasts than in those made in Canada. The negative mean errors were smaller, the percentage of underestimates was smaller, the covariance components of the mean square errors were larger, and the regression and test statistics were less suggestive. One of the more important points is that when "adjustments" of the predictions for differences in the basic nature of the economies are made, the conclusions as to differences in the "accuracy" of aggregate forecasts made in various countries may change a great deal. That is, conclusions as to differences in forecasting ability based solely on the comparison of "absolute accuracy" could be seriously misleading if the economies are not of approximately similar natures. The method of "adjustment" used here assumes that information as to the nature of the economies is contained in the past history of the variables to be forecast, so that a more worthwhile comparison is obtained when the respective judgmental sets are first "adjusted" by extrapolative predictions from these past actuals. Comparisons of the "relative" accuracy of forecasts showed that the American predictions of annual gross national product percentage changes had larger relative mean square errors than did the Canadian sets. That is, the American sets were only about as accurate as, and probably less accurate then, relative to extrapolative predictions. the forecasts made in Canada. The predictive efficiency of the Canadian gross national product forecasts relative to that of the extrapolative predictions was generally higher than that of the American predictions; the amount of autonomous information and available extrapolative information included was also somewhat higher. However, the extrapolative information actually used in forecasting was quite low in both countries, probably because of the essentially trendless nature of percentage changes in gross national product. [ABSTRACT FROM AUTHOR]

The article discusses the class activity which aims to develop a knowledge of history and oratorical writing. In this activity, each member was ordered to select the topic on which she thought she could write best and present it to the whole class for criticism. Then the paper is to undergo some revision, and embody their substance in language adapted to public speaking in the simplest way comprehensible to the children. One of the papers presented tackled about the Emancipation Proclamation. Abraham Lincoln's childhood experiences, the hardship and poverty he had encountered all the way to being the president of the U.S. has been well-explained. Though the original was somewhat obscure considering the syntax, it was presented in a manner leveled to the knowledge of the children.

This paper explores the implications of the theory of marginal cost pricing with regard to the regulation of Cable Antenna Television (CATV) systems. The chief concern is on optimal pricing and the various service dimensions of a CATV system, but the paper also deals with certain related topics, particularly that of optimal investment in the CATV industry. One difficulty in an analysis of this sort is the wide diversity of types of CATV systems, but this problem is handled by first discussing a relatively simple CATV system and then using this relatively simple analysis as a basis for investigating the pricing and investment implications of more complex systems and services. The analysis of efficiency is done with the welfare function, W = TR + S - C, where W is welfare, TR is total revenue, S is consumer's surplus, and C is total costs.

This paper reexamines the conclusion made by Rosemary D. Hale, in a study of the total cookware industry in the United States, that the evidence she presented did not support contentions that vertical integration, by acquisition, negatively affects the economy. It is argued that the conclusion was based on a too broad definition of the market and a lack of familiarity with the historical development of the relevant market. The relevant market defined in this paper is the financial interest of Aluminum Company of America (Alcoa) in two aluminum cookware companies: wholly-owned Wear-Ever Aluminum Inc. and partially-owned Mirro Aluminum Co. A reexamination of the effect on merged firms and competitors, and the impact on technology confirms that the study does support contentions on the deleterious effect of vertical integration on economy.

A hypothesis was presented by C.J. Maule in 1968 which suggested that the takeover of activity of American firms in Canada increased significantly after 1959 due in part to the enforcement of stricter antitrust policies in the United States at that time. In this paper, evidence are presented to refute Maule on some issues. First, the reliability of Maule's data is questioned. Second, it is more appropriate to test the hypothesis by examining the number of acquired firms rather the number of acquiring firms. Third, the application of Maule's index of takeover activity on comprehensive data did not show that the level of takeover activity increased appreciably after 1959. Fourth, using Maule's index, this paper found that the increase in activity became significant only after 1953 and that it involved more non-United States foreign acquisitions. Fifth, the index used did not test Maule's hypothesis efficiently. Sixth, Maule's hypothesis also failed when subjected to more rigorous methods.

A study was conducted in 1967 to determine the effect of the Minnesota Dairy Industry Unfair Trade Practices Act on the conduct and performance of selected Minnesota fluid milk market. In this paper, the results are presented to illustrate this effect and its implications for the administration, interpretation and enactment of unfair trade practice laws. It was concluded from the study that the law discourages competition or encourages cooperation among firms in oligopolistically competitive markets which results in less than desirable market performance. This paper suggests that there is a need for further investigation into the effect of unfair trade practice laws. Given the limited scope of the 1967 study, the implications are presented only as testable hypotheses.

Variation in market organizations among countries has attracted the attention of few economists. This paper compares concentration ratios in the U.S. and Great Britain. The hypothesis tested is whether differences in concentration can be explained by differences in market size. A separate but related question is whether the concentration ratios of paired American and British industries are correlated. The last section of the paper determines whether industries with high concentration in the U.S. are also highly concentrated in Great Britain.

The papers 'Evaluating the performance of U.S credit unions,' by Harold O. Fried et al., 'Efficiency in the savings and loan industry,' by Loretta J. Mester, and 'The Efficiency of the Federal Reserve in providing check processing services,' by Paul W. Bauer and Diana Hancock, were discussed in the article. The research papers were considered to be state-of-the-art empirical papers. None, however, provided significant methodological advances. The limitations of the research studies were enumerated. Generic questions that should provide guidance to a reader trying to decide on the instructive value of the research papers were presented.

The many new proposals advanced during the past few years for financing higher education have been promoted, almost without exception, by appealing to their important and favorable equity consequences. What is meant by the term "equity"? To what degree will various proposals help achieve greater equity, however equity is defined? What kinds of side effects might these proposals produce in the process of achieving greater equity? Questions like these are difficult to answer because no systematic framework for analyzing equity and equity effects has evolved. Traditionally, equity has been viewed as a normative matter, and consequently, little attention has been given to developing the tools required to analyze it. The need for answers to the questions posed persists, however, and this paper offers a starting point in the search for answers. It might best be viewed as an essay on equity as applied to the provision and finance of higher education. This paper focuses on undergraduate higher education. While there is jointness in the production of undergraduate education and such activities as graduate and professional education, research, public service, and the array of other activities known as higher education, it is also quite apparent that most undergraduate students are enrolled at institutions almost exclusively concerned with undergraduate teaching. It is not inappropriate, therefore, to concentrate only on undergraduate education. The focus is, moreover, on students rather than instiutions of higher education, because public policy presumably seeks to benefit students by producing more or less higher education. [ABSTRACT FROM AUTHOR]

Cost-benefit analyses of urban renewal have generally not investigated the changes in local government expenditures generated by a project, although it is recognized that these may constitute an important source of benefits. This study seeks to measure the changes. It first outlines the qualitative effects of urban renewal projects on population, housing, and other characteristics of a city. The relationship between these characteristics and expenditures for several government services is then estimated. These results are used to calculate the expenditure reductions generated by one project in Chicago; the savings are probably less than 10 percent of project costs. This paper contributes to the cost-benefit analysis of residential urban renewal by developing a technique for measuring the effect of urban renewal upon municipal public service expenditures, which is one aspect of its effect upon "slum-generated social costs." This term was coined by Rothenberg (1965, p. 338) to cover a variety of unpleasant phenomena which local governments attempt to prevent or ameliorate: crime, fires, disease and other health problems, and individual personality difficulties. There is substantial agreement in the recent literature that changes in the incidence of these phenomena are among the most important effects of urban renewal, but unfortunately are also among the most difficult to measure (Rothenberg 1965, p. 332; 1967, p. 17; Mao 1966; Messner 1968). By analyzing the effect of urban renewal on service expenditures, this paper narrows the range of unmeasurable benefits of urban renewal, permitting greater precision in the evaluation of projects. [ABSTRACT FROM AUTHOR]

This paper reports on a study of the prices paid by blacks and whites for housing in Dallas in 1960. The technique used to compare the price of housing with different dimensions of characteristics was to estimate implicit prices of characteristics bought by blacks and whites. Two comparisons were made. The first was based on a unit with the average of all black characteristics. The second was based on a unit with the average of all white characteristics. No statistically significant differences were found. This study represents an effort to identify a difference in the prices paid by blacks and whites for housing by identifying differences in the price paid for common characteristics. The estimation of implicit prices resulted in the prices of some characteristics being higher in the white sample, some higher in the black sample. Two indexes were created, one using black housing characteristics as a base, one using white housing characteristics as a base. For the former, we found the price of white housing to be 4 percent higher. For the latter, we found the price of black housing to be 0.3 percent higher. Neither difference was statistically significant. The results obtained are, of course, peculiar to Dallas. It may be of interest to compare the population characteristics of Dallas with other cities. The nonwhite population of Dallas in 1960 was 19 percent of the total population. This may be compared with a 14 percent nonwhite population of New York and 23.6 nonwhite population for Chicago. The nonwhite population of the Dallas SMSA grew by 56 percent (as compared with 44 percent for the white population) during the period from 1950 to 1960. (Figures for the city lack some meaning because of the incorporation of new areas into the city.) This increase was greater than that for Saint Louis (36 percent) or Washington D.C. (44 percent) but less than that for Chicago (66 percent). While it is difficult to draw conclusions about housing demand from popula... [ABSTRACT FROM AUTHOR]

This article uses linear programming techniques to "estimate" a frontier Cobb-Douglas production function for U.S. agriculture from 1960 to 1967, using the "average farm" in each state in each year as an observation. Both deterministic and probabilistic frontiers are generated and the results compared with ordinary least-squares and analysis of covariance estimates of the production function. Technical inefficiency is defined relative to the probabilistic frontier function and the extent of any inefficiency calculated for each state. Little technical inefficiency exists across states when thc production function includes intermediate inputs as well as land, labor, and capital. The extent of technical efficiency in an industry is, then, important.[1] Knowledge of the sources of any inefficiencies is doubly important. It is the purpose of this paper to (1) present a technique for measuring technical efficiency relative to a probabilistic frontier production function, (2) report the results of applying the technique to U.S. agriculture at the state aggregate level, and (3) compare the results with more traditional estimates of the production function and analysis of covariance estimates of technical efficiency. A preliminary attempt to explain the observed inefficiencies will also be reported. [ABSTRACT FROM AUTHOR]

When firm sizes are distributed according to the Pareto law, mergers or acquisitions may either increase or decrease business concentration as measured by the slope, on a double-log scale, of the distribution. Whether mergers and acquisitions will increase or decrease concentration depends upon the size distribution of the acquired assets among the firms that survive. Some data from the U.S. economy are consistent with a set of conditions under which industrial concentration is unaffected by mergers, thus offering an explanation for the observed fact, that the overall concentration of U.S. firms, as measured by the slope of the Pareto curve, has not changed substantially since the turn of the century. The findings challenge the widely held view that mergers "obviously" increase concentration and reduce competition. It is the central purpose of this paper to explain a paradox: On the one hand, mergers and acquisitions of industrial firms have been exceedingly numerous in the U.S. economy during the past sixty or seventy years, and during the last several years they have reached epidemic proportions. On the other hand, the most careful studies of the degree of industrial concentration in U.S. industry over this same period show that overall concentration, as measured by the slope of the Pareto curve, has remained substantially constant--perhaps has even decreased, but certainly has not increased to an important extent. [ABSTRACT FROM AUTHOR]

Several recent studies have described in some detail the factors limiting development in major countries.[3] Each shows the external sector to have been a critical element in explaining past difficulties and in determining future prospects. In addition, each points to a number of internal limitations and gives some analysis of the interaction between the two sets of factors. The present paper will utilize some of the insights from these studies to develop an aggregative model that brings out the relations between the internal and external factors in economic development. The model will be used for three purposes: (1) to interpret recent development performance, (2) to indicate in quantitative terms some of the requirements of accelerated growth, and (3) to provide a framework for the discussion of alternatives facing the United States and the Latin American countries. One section of the paper is devoted to each of these topics. [ABSTRACT FROM AUTHOR]

As a consequence of the importance and growing concern about housing in America, a large number of studies of the mortgage market and the residential construction sector of the economy have recently been undertaken. These studies have been primarily designed to examine particular aspects of these markets, such as the relationship between residential construction cycles and the availability of credit (Smith 1958, Break 1961, Guttentag 1961, Alberts 1962), the nature of financial institution mortgage lending (Klaman 1961, Poapst 1962, Huang 1966, Smith 1967a, Sparks 1967a), the magnitude of the stock elasticities of housing demand with respect to price and income (Duesenberry and Kistin 1952, Reid 1958, Muth 1960, Lee 1964, Oksanen 1966), and the determinants of housing starts (Grebler and Maisel 1963, Maisel 1963). The purpose of this paper is to utilize these specific studies to develop a complete housing and mortgage market model for Canada, with particular emphasis placed upon the role of financial variables.[1] The purpose of this paper is to provide a rigorous demonstration that a demand-for-money function of the type proposed by Friedman can be derived directly from the hypothesis that the services of money at each point in time enter as arguments into the household's intertemporal utility function. This paper has sought to demonstrate that a demand-for-money function may be derived directly from an intertemporal utility function. It shows that a consumer, seeking to maximize utility over time, will reach a moving equilibrium in which the time path of money balances is determined simultaneously with that of consumption of commodity services. It has also been demonstrated that under given assumptions these demand functions possess the usual neoclassical properties. The permanent income hypothesis of consumption frequently is cited as a theoretical explanation of the observed instability of the relation between current income and current consumption. ... [ABSTRACT FROM AUTHOR]

This article comments on the two papers by economists Marinas Brownlee and Eric Maisel in which they analyze the effects of monetary policy of the U.S. in 1966. While Brownlee is primarily concerned with the demand for long-lived assets and Maisel with the flow of funds, both papers tend to emphasize the interest-rate effects of monetary policy. Both authors conclude that the major impact of monetary policy is on housing. The substantive differences between Brownlee's demand analysis and Maisel's supply-of-funds analysis are discussed in Section I. Interest rates play a major role in both papers as an indicator of monetary policy, as a measure of the cost of money, and as a transmitter of monetary impulses. Maisel begins his thorough review of 1966 with the observation that there are several conflicting theories as to the manner in which money affects the real economy. He adopts an eclectic view and analyzes "the relationship of monetary changes to expenditures in housing and other fixed investment," where the monetary influence on expenditures is more readily understood. Accordingly he traces, carefully and in detail, the link between interest rates, disintermediation, portfolio adjustments, changes in the flow of funds, and changes in private expenditures.

THIS paper presents the results of a statistical test of Friedman's hypothesis (Friedman 1961) that the Federal Reserve's decision to count vault cash as reserves would increase the demand for free reserves. In addition, the results are interpreted in the light of the two main theories of portfolio management: the liquidity theory of Edgeworth (1888) and the risk theory of Markowitz (1952) and Tobin (1958). To test Friedman's hypothesis, member banks were divided into three categories: New York City banks, other reserve city banks, and country banks. Demand functions for free reserves were estimated for each bank class, with dummy variables being used to reflect the hypothesized shift in demand. The tests show that Friedman's hypothesis appears true for both classes of reserve city banks but is definitely false for country banks. These results reconcile both of the previously published empirical studies. Georgio Basevi (1963) "confirmed" Friedman's hypothesis by estimating the demand function for free reserves of all member banks together; and J. C. Rothwell (1962), using survey techniques, found little support for the hypothesis among country banks. It is argued that the different marginal responses of reserve city and country banks may be explained by assuming that country banks are motivated by risk considerations, while reserve city banks are motivated by liquidity considerations. Evidence on the portfolio behavior of banks as it is affected by risk aversion and liquidity is difficult to obtain. Thus, why banks react as they do is almost unknown. To proceed much beyond the formulation of complicated mathematical models of portfolio management, every scrap of evidence must be examined to reveal its bearing on outstanding issues in banking theory. This paper has attempted to do just that by linking the behavior of country banks and reserve city banks with the two competing theories of portfolio management. It cannot be said that the above analysis proved... [ABSTRACT FROM AUTHOR]

FEW policy issues have stirred as much emotional reaction and as little empirical work as the alleged large-scale migration of scientists and engineers from the rest of the world to the United States during the last decade. This paper is an attempt to put together various available scraps of empirical information on the basis of which an informed picture of the magnitude of the "brain drain" to the United States can be formed. In this paper we will exploit the data which the U.S. National Science Foundation, with the help of the U.S. Immigration and Naturalization Service, has recently collected and published in three pamphlets (National Science Foundation, 1958, 1962, 1965). In these sources are contained the numbers of scientists and engineers who emigrated to the United States between 1949 and 1961. For the years 1957-61 the data indicate the countries of last residence of these migrants; for 1961-62 the data distinguish the immigrants' countries of birth and of last residence. Our analysis in this paper has shown that the gains of the United States from the gross immigration of scientists and engineers in recent years have been equal to the annual output of about 5 per cent of the institutions of higher education in the United States. While the dollar value of the human capital embodied in these migrants represents the large sum of nearly $1 billion in 12 years, an addition of that amount to the capital stock of the United States and the increase in income resulting from it are small in relation to the large size of the U.S. economy. [ABSTRACT FROM AUTHOR]

This paper compares the average wage levels and employment structure between regions in a free trade precedent in the U.S. The strategy of comparing wage levels and employment structure has become a popular and useful tool for analyzing a variety of inter-regional problems. The paper also suggests that a substantial improvement in employee salary and employment in the country is feasible. The pattern of wage rates in each state is measured in turn by the structure of employment in each U.S. state.

In recent years many public outcries and expressions of indignation have focused on the claim that the poor pay more for the goods and services they buy than do their wealthier neighbors. A number of empirical studies have been undertaken to examine the specific question of the relative cost of food to low- and high-income consumers. Federal agencies, local governments, civic groups ad hoc consumer groups, the news media, and academic researchers have pursued these studies. This paper analyzes a comprehensive survey of food prices conducted in New York City during the summer of 1967 by the New York City Council on Consumer Affairs. The regression results of this study suggest that commodity-by-commodity with few exceptions, the prices of food items on retail merchants' shelves do not rise with decreases in neighborhood income. The cost of food may, in fact, be greatest to the poor, but a complete investigation of this issue will require data and discussion that go beyond the level of relative shelf prices in stores serving areas with different incomes.

When the 10 percent income tax surcharge was enacted in the summer of 1968, there were many forecasts that this tax increase would significantly dampen economic growth and reduce the rate of increase of prices. There was even some fear that the tax increase coupled with the expenditure ceiling that the U.S. Congress imposed would overkill the inflation and produce a recession. Economic events did not match these predictions. This paper will attempt to identify the reasons why the forecasts for 1968-69 were in error. Conditional forecasts will be derived from simulations obtained from the FRB-MIT econometric model using a variety of assumptions about alternative public policies. The analysis permits to determine whether the forecast errors might have been attributable to inaccurate predictions of public policy. According to authors, the ex ante forecasts of GNP were affected by (1) the failure to predict the mid-1968 easing of monetary policy and (2) the misestimates of federal spending which exceeded the ceiling.

This paper considers certain relationships between prices, costs, capacity utilization, and resource allocation in such an industry-- hospitals. This is not a complete analysis of the hospital industry. Rather, it is an examination of but two aspects: the structure of room prices and the instability of demand. Under competitive conditions, prices in an industry consisting of profit-maximizing firms will equal marginal private costs in the short run and also average full costs in the long run. If private costs equal social-opportunity costs, the industry behavior will be optimal in the Pareto sense, given the existing resources, state of technology, and distribution of income. Hospitals typically offer patients choices of accommodations in private rooms, semiprivate rooms or wards. In hospitals, as elsewhere, consumers are likely to have their choices influenced by relative prices. While there is frequently no effective price differential between semiprivate and ward facilities, there is a differential between prices of semiprivate and private rooms to a Blue Cross patient.

The paper presents comments of the author on the article "Equity and the Finance of Higher Education," by Lee Hansen. Hansen has dome a through job of laying out a smorgasbord of schemes for finding college education and highlighting some of the main equity considerations. He observes that efficiency arguments based upon external benefits lack empirical footing and than proceeds to the analytically less ambiguous but equally unsustained equity issues. Here the very range of his discussion serves to emphasize the diversity of objectives and the lack of factual knowledge. Frankly, the author finds it hard to criticize the paper for sins of commission to given the state of data, for sins of omission. Alternatives are reported generally without taking sides and the author cannot fault the report. Instead of serving as critic in the traditional sense, let the author summarize a few points and then add to the speculation. Further, the distribution of attendance viewed as attendance probabilities by parental-income class is more equal than it would be in a system of full charge without accompanying loan programs.

The paper presents comments of the author on the article "The Alternative Before Us," by Harry G. Johnson. The author heartily concurs with nearly everything in Johnson's thoughtful paper that hears upon current problems of providing equity in education. However, the author cannot quite concur in his description of the history of education in the U.S. and Europe. Differences were more basic than Johnson allows. Native as well as foreign-born Americans typically believed that a child should and could rise above the station of his parents and that the most effective route was to obtain more education than his parents had. School attendance requirements were lax; but vast members of students chose to remain in school after departure was legally permitted. Parents demanded expansion of facilities to accommodate them. In Europe, in contrast, the vast majority lacked faith in economic and social advancement through education. Much of the inequality stems from higher education, but this does not mean that a program to equalize public expenditures for investment in youth should be limited to higher education.

The article presents comments of the author on the article "Debt Management and the Term Structure of Interest Rates: An Empirical Analysis of Recent Experience," by Franco Modigliani and Richard Sutch. In this paper and in their 1965 paper presented to the American Economic Association, Modigliani and Sutch report results of tests of their version of the expectations hypothesis and of their attempt to measure the impact of changes in the maturity composition of the federal debt on the term structure of U.S. security yields. In their study, authors concluded that their version of the expectations hypothesis explains almost all the variation in the difference between long-term and short-term yields of government securities from the first quarter of 1952 to the first quarter of 1966.

Focuses on the relationship between merger activities and business concentration in the United States. Decline in the market share of largest firms; Percentage of the total assets of the economy possessed by corporations; Increase in the concentration of economic power.

Discontent with the present public school system is obvious, but ways to improve the system are not. The search for new alternatives has led to serious consideration of the voucher plan proposed by Milton Friedman (Friedman 1962), and some experimental voucher schemes have been offered funding by the Office of Economic Opportunity. Public interest in voucher plans seems likely to continue despite the Supreme Court's recent ruling against Ohio's tuition grants. Economists particularly have been attracted by voucher plans that increase consumer choice and might improve production efficiency through greater competition among schools. But discussion of the efficiency and equity effects of voucher plans has not been integrated into a political-economy model of voter behavior. That task is undertaken in this paper. The essential aspects of Friedman's voucher plan and a simple voting model are set out in Section I. The implications of the voucher plan for voting behavior and hence the size of the school tax support are explored in Section II. In the third section the model is applied to Robin Barlow's study of Michigan-house households (Barlow 1970). It is shown that a shift to a voucher plan may be neither efficient nor equitable. [ABSTRACT FROM AUTHOR]

This paper tests for racial discrimination by white and nonwhite male workers using the states as the unit of observation. It is shown theoretically that white (nonwhite) employee discrimination creates a component of white (nonwhite) camings inequality within skill level which is higher, the higher the fraction of nonwhites in the labor force. The "job-rationing" hypothesis predicts a negative (positive) partial effect of percentage nonwhite on white (nonwhite) earnings inequality. Other discrimination hypotheses offer no prediction. Empirically, the effect of percentage nonwhite on earnings inequality is positive and significant for whites, but not significant for nonwhites. [ABSTRACT FROM AUTHOR]

It has been reported that absences cost the American economy about $9 billion yearly in lost production and wages.' Work continues to identity and resolve the basic absentee factors that are controllable, with the long-run hope of reducing the degree of absenteeism. In the short run, however, there is a need to develop more effective means to cope with the negative consequences of absenteeism as it now exists in the society. Currently, the way the problem of absenteeism is sometimes faced is to set up a force of "standby" personnel. This force consists of people who are paid a certain amount of money in order to stay home and be available for call to duty. If they are called to duty, they receive the same pay as the regularly scheduled employees; if they are not called, each person receives a substantially smaller amount. This paper addresses the problem of planning the size of this standby force and presents a real-world example applied to a 7-day food-service system of an organization.

In 1971 the United States Securities and Exchange Commission issued its institutional investor study report. The report examined the role of institutions in the economy, especially in the securities markets, and made various recommendations whose purpose, among others, was to strengthen those markets and to improve their operations in the light of sharply increased institutional participation. In the course of the study, numerous statistical series were revised and updated; as part of this revision the author developed new estimates of the market value of the outstanding stock of all domestic corporations for the period 1952-68. The finding of a fairly constant individual share has implications extending beyond the securities markets. Since these implications have not been considered elsewhere, they are explored in this paper after the revised data have been discussed briefly. The finding that the individual share of the total amount of outstanding stock has hardly declined since the early 1950's has implications for the securities markets and for the whole question of the relationship between owners and managers of corporations. In addition, though, there are further implications. The data raise the possibility that the amount of equity financing has been understated. They also imply that the distribution of wealth has probably become less equal after some move toward greater equality between the 1920's and the middle 1950's.

The article compares the contributions of various business schools in the United States to leading scholarly journals of business based on the averages of institutional rankings across the principal functional areas from the periods 1961 to 1965 and 1966-1971. In order to have an overview of the total scholarly contributions of the top business schools, the simple averages of their rank orders in the fields of accounting, finance, marketing, management science and operations research, and personnel management and administrative science were computed. The various schools were then listed in ascending order based on their average ranking over the five fields.

The article analyses the methods of teaching handwriting, used in the U.S. The slant of handwriting is relative to the position of the paper on the desk, and whose styles include Standard Free Hand , Economy System and Medial Writing. Writing habit is developed in either two methods, the analytic method for the stage of development method and the synthetic method that depends on the demands of movement control. The order of development of letters is done by classifying and developing them systematically. Other issues relating to psychological questions include the direction of attention in learning, accuracy and speed, and the development of forms.

This article focuses on law and legislation related to child labor in the United States. In 1879, the employment of children under fourteen in underground mining operation was prohibited in Illinois. But still, twelve year old boys can be seen distributing the morning papers. And it shows the need of a National Child-Labor Committee which works to conserve the nation's resources not only of mines and forests but of child life. Such a committee has been organized for five years. During the fifth conference, proceedings would cover a wide range of topics. The most interesting portion of the conference would be the reports of the progress in the different sections of the country toward an adequate safeguarding of its child life against economic exploitation. The reports are encouraging. In spite of some problems, the Illinois law is a fair model which is being followed by other states.

The article reports developments related to education in the U.S. The 18th educational conference of academies and high schools in relations with the University of Chicago was held at the university on November 11 and 12, 1904. The 1904 conference in some papers were devoted mainly to reports of what is being done in different places with the six-year high-school course. The high-school teachers are distinctly generous with regard to the distribution of the students' time in school.

The article focuses on the garden work of the fifth grade in the University Elementary School of the U.S. The garden was planned on paper and each child was allowed to plan the walks and the planting according to his best judgment. An approved plan would be selected and this involved both an ethical and practical question. The ethical required that the part should be planned in reference to the whole. The account of the work in connection with the fifth-grade garden is illustrative of the fundamental importance and far-reaching consequences of intelligent garden work.

This article analyzes the grammatical structures created by comic-strip writers. It has focused on the use of slang, onomatopoeia, and misspellings by the writers. Attention here is limited to the words used and is not turned toward the way in which they have been used. Sixteen comic strips appearing in daily papers were sampled by selecting one full week of each comic at regular intervals for a total of four weeks.

The article offers information on a program developed for the city of Highland Park, Michigan, to measure and standardize handwriting. It elaborates on the method of testing, scoring of papers, tabulating data and selecting the specimens of handwriting. The experiment was conducted to provide a standard of measure for the writing work of several grades. Two handwriting scales available are valuable to the elementary school.

In 1968, a hypothesis was presented by C.J. Maule which suggested that the takeover of activity of American firms in Canada increased appreciably after 1959 and that it was due in part to the enforcement of stricter antitrust policies in the United States at that time. In an article in 'The Journal of Law and Economics' dated October 10, 1969, Grant L. Reuber questioned the reliability of the evidence and the efficiency of the index of takeover activity Maule used in testing his hypothesis. In this paper, Maule presents a rejoinder and tries to examine closely the main issues relating to the hypothesis, Reuber's data, and the tests he used. It is argued that Reuber's tests failed to test the hypothesis.

This paper tests the validity of the law against horizontal mergers in the mining of bituminous coal, an industry in which there has been an abundance of competition. Specific attention is given to the 1945 merger of Consolidation Coal Company and Pittsburgh Coal Company. The conclusions one reaches may depend on where one places the burden of proof. If one starts with the proposition that all horizontal mergers should be unlawful, then one can probably conclude that there is no strong enough evidence to demonstrate the invalidity of that proposition. On the other hand, if one starts with the concept that horizontal mergers involving relatively small market shares should presumptively be lawful, one can equally say that the merger examined does not demonstrate any error in that proposition.

This paper reports the results of a statistical study of antitrust enforcement by the U.S. Department of Justice, the Federal Trade Commission, state agencies, and private plaintiffs since the enactment of the Sherman Act in 1890. The purpose of the study was: to show by example that the collection and analysis of statistical data on the operation of legal institutions is a fruitful and practicable undertaking for students of those institutions; to set forth compactly such statistics on antitrust enforcement as could be obtained without elaborate and costly field research or computer operations, and to explore their implications for issues of antitrust policy; and to identify gaps and deficiencies in the existing statistical sources and to suggest methods for improving antitrust statistics.