The University of Michigan, an encyclopedic survey ... Wilfred B. Shaw, editor.
University of Michigan.
Page  532

THE DEPARTMENT OF ECONOMICS

EARLY history. — The specialized teaching of political economy began at Michigan pursuant to the following resolution of the Regents, dated April 14, 1880:

That, to provide for the instruction heretofore given by President Angell, Henry Carter Adams … be appointed Lecturer upon Political Economy for one semester, at a salary of $800.


(R.P., 1876-81, p. 497.)
President Angell, who had been teaching classes in this subject during one semester and in international law the other half year, had just been granted leave to become United States Minister to China. Adams (Iowa College '74, Ph.D. Johns Hopkins '78, LL.D. ibid. '15) continued to teach in Ann Arbor only one semester of each year, the other semester at Cornell, until 1887. Then he was appointed to a full professorship at Michigan, a post he held until his death in 1921.

Instruction in political economy, however, was provided in the University from its very inception. The "Catholepistemiad" scheme, drawn up by Judge Woodward in 1817 (see Part I: Early History and Regents), proposed a "didaxia, or professorship," of "economical sciences" among the twelve subjects of instruction. And, at the Regents' third meeting (June 21, 1837), a resolution was passed "that until otherwise ordained the Professor of Political Economy shall be also Professor of the Ancient and English Languages." Actually, political economy was taught, until President Angell's time, by the current professor of moral and intellectual philosophy, who was nearly always the president of the University or the senior member of the faculty. Thus, the early teachers of political economy were Ten Brook, Tappan, Haven, and Cocker. Indeed, President Haven's chair from 1865 to 1868 was known as the professorship of logic and political economy. As early as 1845 political economy was required during the third term of the senior year in the "Department of Arts and Sciences." In the later fifties President Tappan's growing interest in philosophy pushed economics entirely out of the announcements of courses, but it reappeared as an elective study in Haven's administration and was made a prominent part of the curriculum by President Angell.

A few further details may be gleaned from the annual catalogues — all with reference to the liberal arts department or college. In 1843-44, for example, seniors apparently were required, during the last term, to study Wayland's Political Economy. Similar announcements recurred for more than a decade, except that this subject was sometimes taught in the junior year; in 1850-51 Wayland's text was still used. Juniors of 1852-53, in both classical and scientific courses, were instructed in economics "by the use of text books, accompanied with lectures and by references to the standard works on political economy. The students are here also required to read original essays on subjects connected with the course" (Cat., 1852-53, p. 30).

President Angell, in his first year at Ann Arbor, reported to the Regents:

We should have also, at an early day, a Professor to give instruction in Political Economy, Political Philosophy, and International Law. The very brief course in Political Economy has been conducted by the Professor of Moral and Intellectual Philosophy [Cocker], who would prefer to confine himself to his own special work, and it has not been offered at all to the classical students. I have this year given twenty familiar lectures on International Law to about two-thirds Page  533of the senior class. But provision should be made by which every student should be able to take a generous course in the Political Sciences.


(P.R., 1871-72, p. 16.)

Dr. Angell proceeded in the following years to develop such courses himself, teaching political economy one semester, international law the other. By 1879-80, the year before Adams came here, Angell was responsible for three classes in economics: two sections of an elementary course and one in "advanced political economy" — all meeting twice a week.

Buildings and special facilities. — The first acquisition of special facilities for political economy was announced through the University Calendar (1871-72, p. 10) in the first year of Dr. Angell's presidency:

The University Library contains about twenty-two thousand volumes. During the past year it has been enlarged by the addition of the library of the late Prof. [Karl Heinrich] Rau, the distinguished Professor of Political Economy in the University of Heidelberg, Germany … purchased and presented to the University by Philo Parsons, Esq., of Detroit. It contains about four thousand volumes and from two thousand to three thousand pamphlets. It is especially rich in European works on the Science of Government, Statistics, Political Economy, and cognate subjects.

Adams' earliest activities at Ann Arbor were naturally carried on in University Hall, which was then relatively new. Soon after Tappan Hall was built (in 1894), Adams and his colleague Taylor were transferred there. The department's work developed in Tappan Hall until about 1910, when the south part of the old Chemistry Building became designated as the Economics Building. This building has been so patched over from time to time that now only its numerous chimneys suggest its former uses. The larger lecture rooms are still fitted with shades and screens for lantern projections, which have not been used for many years. The northern parts of the whole structure (first used in 1857), now known as the Pharmacology Building, usually harbor some animals used for experimental purposes. Also, an additional large basement room was equipped before 1920 as an accounting laboratory, with desk-tables and adding machines. It is overcrowded, and has been for some years, by the large classes in that subject.

Another large room on the second floor became the departmental library about 1914. When Angell Hall was completed, in 1924, the economics and mathematics libraries were combined on its third floor, and the room thus vacated in the Economics Building has served as a statistical laboratory as well as a general classroom. For some years, in the time of Adams and Taylor, virtually all book accessions in economics and sociology were purchased directly by the department for the economics library; since the middle 1920's most single copies of economics literature have gone into the General Library, and additions to the economics reading room are mainly multiple copies for the larger classes. In 1912 the department collected some thirty-one photographs and prints of leading economists. If funds for the purpose become available, this collection may be extended and suitably displayed.

Persons and policies; programs of undergraduate studies. — The most obvious divisions of the department's history are the terms of the three administrative heads — Adams (1880-1921), Day (1923-27), and Sharfman (since 1927).

In Adams' term several significant phases may be discerned, each phase lasting approximately a decade. For about twelve years after he began lecturing here, Adams conducted the teaching in economics almost single-handed, and until 1887 during only one-half of the year. In 1892 Fred M. Taylor Page  534joined him, and soon thereafter Charles H. Cooley became a full-time instructor and began to give courses in sociology. The third decade of Adams' regime saw the establishment of new courses in industry and commerce and in public control of railways and other industries, taught in part by Edward D. Jones and Harrison S. Smalley. In the fourth decade (after 1912), public control of industry was further developed by I. L. Sharfman, and in this period students, teachers, and courses in business administration and sociology all became more numerous. The School of Business Administration (see Part VI: School of Business Administration) was created in 1924, three years after Adams' death. The Dean of the new school, Edmund E. Day, continued to be Chairman of the Department of Economics in the College of Literature, Science, and the Arts until his resignation from the University in 1927, since which year the School and the department have been headed respectively by Dean Griffin and Professor Sharfman. The group teaching sociology (see Part IV: Department of Sociology) remained administratively a wing of the Department of Economics until 1931, two years after Cooley's death; and a year or two later sociology offices and classes were removed to the old Law Building (Haven Hall).

The roster of persons who have taught economics and business in the Department of Economics (or Political Economy), from the beginning of such instruction at the University through the year 1939-40, includes 183 names. This count excludes eight nonresident lecturers in political economy, also Cooley and other sociologists, and appointees in the School of Business Administration in 1924 and later years. Classified by highest rank attained up to 1940, this roster includes eighteen full professors, four visiting professors, six associate professors, fourteen assistant professors, seven lecturers, ninety-four instructors, and forty teaching fellows.

Henry Carter Adams, 1880-1921. — Adams was called to Michigan in 1880, as stated above, to take over President Angell's one-semester offerings in political economy. Within a few years, under the stimulus of the School of Political Science (see Part IV: Department of Political Science), various other courses were announced under the heading "Political Economy." These announcements signify the beginnings of Adams' instruction at the University of Michigan in public finance and industrial history, and they also show how early he developed alliances with other departments and with people and organizations outside the University. For 1882-83, for example, the following courses were announced in connection with the economics offering: Public Scientific Surveys, Relations of Government to Scientific Progress; and Economic Development of Mineral Resources. These two courses were taught respectively by the professors of geology and of mineralogy and mining engineering.

During the first year of his full professorship here (1887-88) Adams introduced a course designated Principles of the Science of Statistics. At about the same time he became chief statistician for the Interstate Commerce Commission, which post he held until 1912. In this period also appeared germs of other types of instruction which grew to great importance — notably advanced economic theory, international trade, and social and industrial reform. The classes had already attained such size that Adams was allowed an assistant. This assistant, Frederick C. Hicks ('86, Ph.D. '90), later president of the University of Cincinnati, became Instructor in Economics in 1890-91. During the latter academic year Adams was absent, doing work with Page  535the Interstate Commerce Commission, and his place was temporarily filled by Fred Manville Taylor (Northwestern '76, Ph.D. Michigan '88), who was then teaching history and political economy at Albion College.

By 1892, the year when Taylor came here permanently as Assistant Professor of Political Economy and Finance, ten courses in political economy were announced for each semester — "classified," according to the Calendar of 1892-93, "as undergraduate, intermediate, and graduate courses." Frank Haigh Dixon ('92, Ph.D. '95), later Professor of Economics at Dartmouth and at Princeton, assisted Adams in his course (for which five sections were listed) on industrial history; and Charles Horton Cooley ('87, Ph.D. '94) taught Theory of Statistics and History of Political Economy, as well as an elementary course in economics. Taylor was giving two or three one- or two-hour courses each semester in currency and banking, American industrial history, agrarian, socialist, and communist movements, and social philosophy with reference to economic relations, and he was also assisting Adams in a course announced as Problems in Political Economy. The problems studied, according to the Calendar, were "the railroad problem; industrial crises; free trade and protection; industrial reforms; labor legislation; taxation." Taylor, moreover, was already launched on his own introductory course in principles (Elements of Political Economy — three lectures a week and one quiz hour for each of the four sections). The four teachers collaborated, each semester, in a weekly two-hour seminar, Current Economic Legislation and Literature.

This 1892-93 offering was typical of its decade, except that within a few years Cooley was beginning his career in sociology, and Taylor took over the history of political economy. The Calendar for 1888-89 had announced a seminar "designed for candidates for advanced degrees," and in 1895-96 Adams, Taylor, and Cooley were listed for a course of three credit hours on "critical studies in economics and sociology, intended especially for graduate students but open to seniors specializing in political economy, who satisfy their instructors of their fitness for the work."

Not until 1910 did the curriculums in business administration, which developed into a separate School in 1924 (see Part VI: School of Business Administration), become as prominent as economics and sociology were in the departmental announcements; but the year 1901 was marked by two significant appointments — those of Edward David Jones (Ohio Wesleyan '92, Ph.D. Wisconsin '95) as Assistant Professor of Commerce and Industry and of Durand William Springer (Albion '86, A.M. Michigan '24) as Lecturer on Accounts. The Calendar of that year refers to "those who wish to combine the study of political economy and finance with history, political science, and law for the purpose of preparing themselves for some one of the several professions or careers to which this group of studies naturally leads." (This is reminiscent of the similar aims of the School of Political Science about twenty years earlier.) And, in the Calendar for 1902-3, the following paragraph first appeared:

Industry and Commerce. The courses in industry and commerce have for their special object the study of organization and processes of modern business. They are closely related to economics, both as a study of wealth production and as an account of economic principles in industrial society. Some of them are technical in character and are intended to rank as semi-professional courses.

In the new courses which Jones taught relating to industrial development and organization appeared professors from Page  536the Departments of Geology and of Law. There was also a revival of nonresident lectureships, one of them "on the industrial significance of ship canals."

The teachings of Adams in governmental control of railways and of other industries were supplemented, at first by those of Harrison Standish Smalley ('00, Ph.D. '03), who in 1903 was appointed Instructor in Political Economy. In the year of Smalley's death (1912) the services of Isaiah Leo Sharfman (Harvard '07, LL.B. ibid. '10) in the University were begun. Sharfman, who advanced to a full professorship in 1914 and has been Chairman of the Department of Economics since 1927, applied his training in law and his experience in teaching and research to the elaboration of courses on corporations, railways, and public utilities, from the standpoint of public policy and social control.

Edmund Ezra Day, 1923-27. — Edmund E. Day (Dartmouth '05, Ph.D. Harvard '09, LL.D. Vermont '31), who left Michigan in 1927 to join the Rockefeller Foundation and is now president of Cornell University, began his teaching and chairmanship here in February, 1923. The total enrollment in the department had been growing very rapidly, as will be shown below. This growth, and the difficulty of even maintaining the upper staff during Adams' last illness and the interregnum, had thrown the teaching of the numerous students in economics, sociology, and business administration into the hands of less than a dozen men of professorial rank, assisted by a crew of instructors working toward their doctor's degrees. Day was enabled to enlarge the upper staff and to set up a professional school of business administration, including its Bureau of Business Research, which has been of assistance in some economic studies and publications. (The teachers of sociology already had practical autonomy, though they were formally within the Department of Economics until 1931.) From Day's time also dates continuous existence of the present Economics Club, which arranges evening meetings at irregular intervals, where faculty members and graduate students of economics and business administration present findings from their researches and have discussions with visiting scholars in these fields.

Soon after his advent, Day urged upon the faculty of the College of Literature, Science, and the Arts the development of a scheme of majors or concentration, to be part of the requirements for the bachelor's degree. (This College at the University of Michigan was one of the last academic strongholds of the "free elective system.") His committee's plan was rejected, but within a few years (1931) another committee secured adoption of the present concentration plan.

Isaiah Leo Sharfman, 1927 to date. — In the department's latest decade, enrollments have continued to grow, and the undergraduate concentration program has received increasing attention.

Enrollments. — In the academic year 1912-13, when available records were begun (Professor Sharfman soon thereafter became Secretary of the Department), there were 793 enrollments in introductory courses, 822 in more advanced economics, 434 in business administration, and 457 in sociology; a total of 2,506 student class-members within the department, averaging some 1,250 each semester. By 1916-17 the corresponding total for both semesters had grown to 4,426. The war reduced this index to 2,834 in 1918-19; then came a deluge of 6,712 enrollments (elections) in 1919-20 and still more (7,626) in 1920-21. Thus, in the autumn of 1920 Taylor had the task of organizing instruction of more than 1,000 students in his introductory course; and great upswings had occurred in all the other categories of courses in the department. Page  537This heavy tide subsided somewhat within a few years. Elections in courses then in the department but now given in the School of Business Administration reached their peak of 1,891 in 1921-22; while elections in sociology rose to nearly 2,100 just before the separate Department of Sociology was organized (1931). The total elections in elementary and advanced economics courses remained close to 3,000 from 1925 to 1929, fluctuated near 3,300 until 1934, and between 1937 and 1940 have run above 4,700. This last rise is attributable in part to new requirements and recommendations in various curriculums of the College of Engineering. Already in 1912-13 there were 141 elections in special economics courses for students in other colleges, and nowadays the similar courses draw more than 700 elections a year. The introductory courses in accounting (with several hundreds of elections each year) and some advanced work in this field have remained in this department and are patronized in part by students working toward degrees in engineering and law, as well as by those contemplating business and other professional degrees.

Further analysis of trends within the introductory courses shows that the largest number of enrollments in the introductory courses is always in the two semesters of the year's work on the sophomore level, which serve as a foundation for the more advanced courses in the department. Before 1921 there was only one full semester (four or five hours credit) of elementary principles. At one time, at least (1909-10), six weeks of the second-semester course were devoted to "distribution" theory, the remainder to "problems." Since 1921 the year's introductory work — usually for three hours' credit each semester (one lecture and two or three quiz meetings a week) — has been organized with reference to a framework of principles. Another course provides an introductory survey of economics through one semester for seniors and graduate students whose main interests lie elsewhere.

The percentage of D and E grades in all the department's courses (including business administration and sociology) in 1912-13 was slightly lower than the corresponding percentage in other courses in the College of Literature, Science, and the Arts, but by 1924 the percentage of D's and E's in economics courses had risen well above the general level for the College, though no economics courses have been open to freshmen.

Concentration. — The foregoing survey of trends in course elections leads to a historical view of specialization in economics and allied subjects in the College of Literature, Science, and the Arts. For some years before the business and sociology courses were split off there were curriculums within this College leading to certificates in business administration and in social work (with the bachelor's degree; see Part IV: Department of Sociology). Since 1924 the former of these has been supplanted, in part, by the combined curriculum in letters and business administration — a five-year course, open only to students with a B — or better average of scholarship. This group of students, in their junior year, is supervised by the Department of Economics, which, since the concentration plan of the College of Literature, Science, and the Arts became effective, has also been responsible for upperclassmen concentrating in economics.

Table I shows that usually 10 per cent or more of the juniors and seniors in this College not enrolled in the combined curriculums are specializing in economics. Actually, for most years, this has been the largest single group. The table also shows numbers of juniors, each autumn semester, in the combined letters and business administration curriculum. Availability Page  538

TABLE IUpperclassmen in the College of Literature, Science, and the Arts Specializing in Economics and Business
First Semester of Academic Year Juniors in Combined Curriculum in Letters and Business Administration Junior and Senior Concentrators
In Economics In the College Per Cent in Economics
1933-34 40 53 ..... ....
1934-35 54 140 ..... ....
1935-36 45 166 1,576 10.5
1936-37 52 196 1,670 11.7
1937-38 33 269 1,711 15.1
1938-39 27 279 1,761 15.8
1939-40 41 207 1,870 11.0
of this type of combination (in letters and law also, for example) enables the better students to expedite their academic work, and it also distorts, somewhat, statistical comparisons as to numbers and abilities of concentrating groups at the University of Michigan and elsewhere. (At Harvard College, for instance, where concentration has been required over a much longer period and where there are no combined curriculums for undergraduates, about 16 to 17 per cent of all concentrators, in the decade 1926-36, were in economics.)

A survey was made several years ago which traced the students who made B or better in the elementary economics courses, Economics 51 and 52, in 1932-33 and 1933-34, to ascertain their later fields of specialization. The largest percentages (26.3 for 1932-33 and 19.6 for 1933-34) went into the combined curriculum in letters and law. Corresponding percentages of these superior students were, for the same years: concentrating in economics, 13.2 per cent and 17.6 per cent; entering the letters and business administration curriculum, 21.2 per cent and 7.8 per cent. These three fields together, therefore, appear to attract about half of the students who show most aptitude in the earlier economic studies.

The full-year course in economic principles, available in the sophomore year, is required before entrance upon the economics concentration program in the junior year is permitted. As an upperclassman this concentrator must take not less than twenty-four nor more than thirty-four hours of credit in economics courses, including a course in accounting or statistics and sequences of two and three courses respectively in two other economic fields — such as theory, money and credit, labor, public control of industry, international economic relations, economic history, and public finance. Certain courses in advanced economic theory are counted in any of the other sequences.

Graduate program. — Graduate studies have long been highly important in the program of the Department of Economics.

The count of higher degrees in economics appears to begin with the doctor of philosophy degree awarded in 1890 to Frederick C. Hicks, whose dissertation was entitled "The Foreign Trade of the United States." In the decade ending in 1900, twelve master's and seven doctor's degrees were awarded in this field — among the latter being the doctorate of Charles Horton Cooley ("A Theory of Transportation"). From 1900 to 1910, Page  539advanced degrees continued to be few — ten master's, seven doctor's. After 1910 the pace quickened. In the next three decades (ending in 1920, 1930, and 1940) the numbers of master's degrees awarded in economics were, respectively, 34, 87, and 159; and of doctor's, 7, 19, and 24. The total, 1889 to 1940, is 302 master's, 65 doctor's.

The preceding data are believed to be accurate for the period since 1910, but for the earlier years it is not always possible to classify advanced degrees according to field of specialization. Fred M. Taylor, for example, received this University's doctor of philosophy degree in 1888, his dissertation being entitled "The Right of the State to Be." His graduate study appears to have been more largely in philosophy and politics than in political economy; his degree therefore is not included in the above count. For three decades after doctorates in economics began to be given here, the subjects of dissertations were usually in Adams' fields, transportation and public finance, or in Taylor's fields, money and general theory. Several types of master's degrees were formerly given in political economy (masters of arts, of philosophy, of laws, and of science; see Part II: Degrees).

Thoroughly capable graduate students with previous training in economics have usually been able to earn the master's degree in about one academic year and the doctor's degree in perhaps three or four years of full-time work (beyond the bachelor's degree). When the School of Business Administration was organized in 1924, it provided for the master's degree in business administration, based upon two years of study in a specialized and largely prescribed curriculum additional to four years of undergraduate work, except (as noted above) for students in the combined letters and business administration curriculum. More recently programs leading to the degree of doctor of philosophy in business administration have been established in the Graduate School.

Questioning has been heard for some time, in the field of economics as elsewhere, as to what trends should be favored with reference to the master's degree. The increasing disposition of state and local educational authorities to put a premium on the possession of this degree by high school teachers is, of course, an important part of the general story; but this particular demand has not affected the Department of Economics as much as it has affected many other departments, inasmuch as there has been little demand for high-school teachers offering economics as their major subject. No quantitative studies are available to show the statistical distribution of holders of the master's degree in economics by occupations and employers, but most of them who do not pursue studies further toward the doctorate appear to find employment readily, notably in secondary teaching of commercial and social studies, in college and university teaching, and in government and business. In addition to the requirements for undergraduate concentration mentioned above, candidates for the master's degree are required to do a year's work in advanced economic theory and to write at least one substantial paper, normally in a research seminar.

A somewhat special problem has been presented to the University of Michigan by rather large numbers of graduates of foreign universities seeking advanced degrees. Our list shows that between 1890 and 1902, out of ten persons who received the degree of doctor of philosophy in economics, three bore Japanese names. Since the latter of those dates only one Chinese and one Japanese have earned the doctor of philosophy degree in this department, and from 1902 until 1916 Page  540no Oriental names appeared anywhere in the department's lists of higher degrees. After 1916 they occurred with increasing frequency. Of the ninety-nine recipients of the master's degree from 1930 to 1936, no less than twenty-six were Orientals — mostly Chinese. Naturally these Oriental students usually have to work here longer than do American college graduates to earn the master's degree, and a number of them leave without completing the work for it. Variations in studies and standards among the foreign colleges, of course, are still greater than among the numerous American institutions from which we draw graduate students, and such wide differences in background have thus far made it seem inadvisable to require a more nearly uniform curriculum for the degree of master of arts in economics.

In Adams' time there was no general reckoning between the faculty and the doctoral candidate until, his course and language requirements fulfilled and his dissertation accepted, he stood a long oral examination in which emphasis was placed on the dissertation, the special field, and general economic theory. Candidates were accustomed to prepare themselves in the field of theory by long attendance in Taylor's advanced courses, which treated new examples of theoretical literature every year.

Within a year after Edmund E. Day came, in February, 1923, the requirements for the degree of doctor of philosophy were modified into a system much like that which prevails at present (1939-40). Before he is well launched on his dissertation, the candidate must now take a preliminary general examination, the major part of which consists of four three-hour written examinations in fields selected by himself out of the principal divisions of economics, always including economic theory and its history. And before these examinations may be written, various preliminaries must be completed, notably foreign-language tests, courses in eight specified economics fields, and preparation in some cognate field. The general examination ends with an oral conference. When these hurdles are cleared, the candidate devotes himself to his dissertation; and after the latter is accepted, he must stand an oral examination on it and his special field.

Financial aid. — An important factor in graduate studies everywhere is financial aid to students. A majority of those who have taken the doctorate in this department have been at some stage quizmasters in the elementary courses — a condition which is perhaps normal among the American universities. Frederick C. Hicks, for example, began quizzing for Professor Adams within a year or two after the latter became a full-time member of the faculty, and Hicks earned his doctor's degree in 1890. By 1895 Charles H. Cooley and Frank H. Dixon had secured doctorates in economics in similar fashion. Such predoctoral instructors in many cases were paid on a full-time teaching basis. In recent years the University's policy has been modified, so that persons without the doctorate or equivalent attainments are no longer acceptable for the title "instructor." Graduate student quizmasters are still employed in the economics and other departments, but they are now designated as teaching fellows, and they receive stipends based upon less than full-time service.

Graduate study in economics at the University of Michigan has also been assisted by other fellowships and scholarships. Adams, for example, secured gifts from Messrs. Frank H. Hecker and Joseph Boyer of Detroit, in 1913 and 1914, aggregating $2,500, which funds were employed primarily for the support of two fellows in transportation for two years or more. Probably these fellows Page  541had some instructional duties. For some years of late, moreover, the State College fellowships, administered by the Graduate School, have brought alumni and alumnae from Michigan colleges to the department at the rate of one or more almost every year. Other aids for graduate students include or have included the University fellowships and scholarships, the Michigan-Brookings fellowship, maintained jointly by the University and the Brookings Institution at Washington, D.C., the Earhart fellowships and scholarships (see Part IV: Department of Sociology), the Rackham fellowships, and the Taylor fellowship, for which funds are accumulating as mentioned below.

Research and publications. — Adams was a pioneer among American economists in the development of syllabi and texts in various political economy courses. The General Library contains, for example, his Outline of Lectures on Political Economy (seventy-six pages, dated 1881), used for instruction at Johns Hopkins, Cornell, and the University of Michigan. And in Adams' private library is a volume of mimeographed lectures on "The Labor Problem" and other subjects, used in a course which he gave in the Department of Law in the early nineties. By 1902-3 Taylor's lectures on "Elements of Political Economy" were sold in mimeographed form by Edwards Brothers, Ann Arbor. Taylor's Chapters on Money — a preliminary textbook for his students — appeared in 1906, and his source book, Some Readings in Economics, in 1907.

About 1915 the following passage appeared in the Preface to the third edition of Taylor's Principles:

In view of the increased expense to the students due to the frequency of new editions, I shall permit myself to explain that this text, like Professor [Walton H.] Hamilton's Readings, Professor [George W.] Dowrie's Syllabus, and other books or pamphlets published by the University for the use of the classes in Economics, brings no pecuniary profit to the instructor immediately concerned or to the University. Any surplus which may emerge is to go into a departmental Printing Fund to be used for the revision and expansion of these texts and for the printing of other class helps.

The printing fund derived from the sale of these texts was drawn upon as indicated, notably for the syllabus used by advanced theory classes, which went through four editions and was distributed gratis to the students. After Taylor's retirement in 1929, the Regents set aside the $3,638.88 remaining in the fund to accumulate for a fellowship in his memory.

The works just referred to were textbooks, though they embodied a great deal of scholarly research. Taylor's Principles, for example, was prepared and used as an elementary text; it is nevertheless a profound work in economic theory. Similar observations might be made concerning other texts prepared by Michigan teachers, such as Adams' Science of Finance.

Rather comprehensive compilations have been made of publications of present and past members of the teaching staff, but it would be impossible to cite precisely even the chief publications of scholarly work done in the Department of Economics. The works of Charles H. Cooley, for instance, are much more relevant to the origins of the Department of Sociology; yet most of them came to fruition while he and his group were closely associated with the economics staff. In some degree a parallel comment would apply to the writings of some teachers in the School of Business Administration, such as Day's Statistical Analysis, Griffin's Foreign Trade, and Rodkey's Banking Process. Jones's Administration of Industrial Enterprises was Page  542a pioneering, widely influential manual on general principles and practices in business organization; its author resigned from this department and University in 1918, six years before the School of Business Administration was established. Friday's Wages, Prices, and Profits appeared near the end of this economist's work in Ann Arbor. Some books, such as Goodrich's The Miner's Freedom, Remer's Foreign Investments in China, and Hoover's Location Theory and the Shoe and Leather Industries, were published after the authors had joined the staff but had been partly prepared previously; others, like Van Sickle's Direct Taxation in Austria and Ellis' Exchange Control, were largely prepared during the authors' connection with the department, but appeared later. Remer's Chinese Boycotts, Ellis' German Monetary Theory, and Dickinson's Compensating Industrial Effort are examples of work carried through to publication during the authors' teaching here. Associate Professor Robert S. Ford has been senior author of several of the Michigan Governmental Studies, issued by the University's Bureau of Government, of which he has been Director since 1938 (see Part VI: Bureau of Government).

An important type of scholarship, of course, grows out of doctoral dissertations. Among publications arising out of dissertations in economics accepted by this University may be cited Paton's Accounting Theory, Dewey's Long and Short Haul Principle of Rate Regulation, Yang's Good Will and Other Intangibles, and significant articles by Shorey Peterson on economic problems of highway transport. Three of our dissertations have secured publication in full through winning national prize competitions — Watkins' Bankers' Balances, Seltzer's Financial History of the American Automobile Industry, and Nelson Lee Smith's Fair Rate of Return in Public Utility Regulation. No funds have been provided here for subsidizing publication of researches in economics as such, but the monographs and dissertations published by our University's Bureau of Business Research (see Part VI: School of Business Administration) have included several works by members of the economics teaching staff and several dissertations for the doctor of philosophy degree in economics. Economics dissertations thus published, in whole or in part, are those of Wyngarden, Taggart, Phelps, Waterman, Woodworth, and Daniels.

The foregoing retrospect may be supplemented by an attempt to indicate further the significance of the events recounted, with special reference to the structure founded by Adams and Taylor. The interests and abilities of these men, although not always completely harmonious, interacted to produce substantial intellectual achievements and to develop the abilities of many able students and colleagues.

Taylor wrote, shortly before his death, in response to an inquiry from Professor F. A. Hayek (of the London School of Economics, and formerly of Vienna):

… I greatly appreciated your kind comments on my Principles. As my very limited working capacity made it quite certain that I should do relatively little writing, I early determined to limit myself to doing one or two things and doing them as well as I could. My particular capacities and tastes, added to earlier training in philosophy, made it natural for me, as a teacher of Economics, to devote myself to theory, with only so much attention to the concrete as was necessary to furnish the background for theoretic analysis.

Actually, he did not limit himself so narrowly as is here suggested, in his earlier years, for he labored assiduously in the field of money, banking, and currency. In this province, through his teaching Page  543and publications, he was a national intellectual leader by the beginning of the present century. He later became absorbed in problems concerning the elementary course in economic principles and advanced instruction in economic theory. His theoretical publications are based upon somewhat narrow and designedly abstract premises. Although he was always much interested in history and belles-lettres — subjects which he taught at Albion College — he made natural science texts his model for his economic writings, deliberately forswearing literary graces of exposition and making much use of italicized "principles" and "corollaries" as well as of numerical problems. His classroom cabinets stuffed with blueprint charts remain in our buildings as relics, as do a few dictaphone cylinders containing his dictation. The quality of Taylor's theory slowly obtained widespread recognition, as his disciples spread over wider fields, but in reference to his pedagogical methods (especially as applied to the general run of students in elementary principles) many contemporary observers would agree with the following remark in a private letter from a former colleague:

The defect of the elementary course under Professor Taylor was that it was a course in theory and an exercise in logic, rather than instruction in the practice of the scientific method of determining premises. The result was to make young students who had been exercised in the artificially simplified cases used in the course unduly sure of themselves.

Taylor, however, fully recognized this danger, and uttered many warnings. In his second mimeographed lecture of 1902-3, for instance, appears the following passage, typical of the caveats he was wont to give out:

Doubtless if I would ask you what was your purpose in studying Political Economy many of you would say that you wished to be prepared to have an opinion on certain questions before the country and that you would like to be able to discuss them intelligently if the occasion arose; and others that they intended to pursue political careers. The Rigid Application of Principles to Practical Cases Is Extremely Dangerous, and Is Apt to Be a Mistaken Application in Nine Cases out of Ten [capitals in original].

This teacher was also a lifelong student of socialist literature, and his surviving writings are full of penetrating discussions of its problems. The "Critique of the Existing System," with which his Principles ends, is distinctly conservative in tone and indicates the general position which he always held. His last publication — an address as president of the American Economic Association in 1928 — on "Guidance of Production in a Socialist State" is now cited approvingly by both socialist and nonsocialist economists. This publication amply testifies to the persistence of his interest in these theoretical issues; but it is clear that he was never optimistic as to the immediate practical possibilities of economic collectivism.

The department's present courses in elementary economics, money and credit, and social reform are still influenced by Taylor, in that the teachers in charge were his students or colleagues, or both. His favorite field of economic theory, since his retirement, has been divided and cultivated simultaneously by a number of successors, of whom Ellis, Peterson, and Dickinson were for some years personally associated with Taylor.

Different in many ways were the genius and development of Adams. While on the threshold of his career, he boldly jeopardized his worldly prospects by defending labor unions, collective bargaining, and liberal principles in general. Later, his preoccupation with work outside Ann Arbor, especially at Washington, was occasionally considered rather Page  544excessive by a few of his Ann Arbor associates; but these labors nevertheless enriched his teaching. He will long be remembered for his work in the field of government finance; other studies which he persistently carried on form a complex composed of principles and administration of transportation, accounting, statistics, and public regulation of industry. Judge Cooley selected Adams to be chief statistician of the Interstate Commerce Commission, not merely because he was Cooley's colleague in Ann Arbor, but because the younger man had already given such convincing evidences of his fitness as may be found in his classical paper of 1887, The Relation of the State to Industrial Action.

By 1906 statistical reports under oath from the railways to the Interstate Commerce Commission, based on a standard accounting system approved by the Commission, were made mandatory by federal legislation. Adams assisted the railway officials to work out such a system, and later (in 1913) he spent a year in China as special adviser to the Chinese government on railway accounts. These experiences and responsibilities were reflected not only in the courses in railway and transportation problems and in public control of business — which courses were given in both the Department of Literature, Science, and the Arts and in the Law Department — but also in the proliferation of instruction after 1909 in railway organization, operation, and finance. The Hecker and Boyer gifts, referred to above, belong to this epoch; part of the money was used to buy books on transportation for the General Library. Perhaps the most significant innovation of the period was a course in the year 1909-10, entitled Railway Statistics and Accounts. This course is symbolic of the great constructive achievements of Adams and his school toward basing governmental regulation of industry on that foundation which is now generally realized to be quite indispensable — regular statistical reports, made possible by standardized accounting. In this manner and in other ways the Michigan economist developed practical means which the state may use in its efforts to safeguard industry from shortsighted and antisocial actions.

Adams' work has been carried forward in the department, especially by the two present members of the staff who were his colleagues during his later years — Sharfman (assisted by Shorey Peterson) and Paton. The latter is distinguished both as an accountant and as an economist; his many publications include several texts in accounting, a research monograph on Corporate Profits as Shown by Audit Reports, and his major contributions to the Accountant's Handbook, of which he is editor. Sharfman, whose teaching and other public service have dealt especially with government regulation of transportation and other public utilities, in Adams' time published Railroad Regulation and The American Railway Problem; and the year 1937 saw publication of the fifth and final volume of his authoritative Interstate Commerce Commission.

SELECTED BIBLIOGRAPHY

Calendar, Univ. Mich., 1871-1914.
Catalogue …, Univ. Mich., 1844-71, 1914-23.
Catalogue and Register, Univ. Mich., 1923-27.
General Register Issue, Univ. Mich., 1927-40.
Lange, Oscar, , and Fred M. Taylor. On the Economic Theory of Socialism. Minneapolis: Univ. Minn. Press, 1938.
President's Report, Univ. Mich., 1853-1940. (P.R.)
Page  545Proceedings of the Board of Regents …, 1864-1940. (R.P.)
University of Michigan Regents' Proceedings …, 1837-1864. Ed. by Isaac N. Demmon. Ann Arbor: Univ. Mich., 1915. (R.P., 1837-64.)