Economic Research at Harvard Recently Aided by $150,000 Grant from the Rockefeller Foundation

The following article on Economic research at Harvard by C. J. Bullock, George F. Baker Professor of Economics, and Chairman of the Harvard University Committee on Economic Research, is reprinted from the current issue of the Alumni Bulletin.

Fourteen years after Charles F. Dunbar was appointed Professor of Economics in Harvard University, the first provision was made for promoting economic research. In 1885 the Department of Economics received from Mr. John Eliot Thayer a gift of $15,000 for publication and research, which made possible in 1886 the establishment of the Quarterly Journal of Economics, the first periodical in the United States devoted exclusively to that subject. Under the editorial charge first of Dunbar and then of F. W. Taussig, the new Journal immediately made a distinguished place for itself in the economic world. Without closing its pages to anything of scientific interest, it has, during the forty-four years of its existence, given the preference to contributions of permanent rather than ephemeral value, especially in the field of economic theory, where for more than a generation it has been able to offer leading thinkers of all countries as much space as might be required for the presentation of their views.

Development not Isolated

This development at Harvard was not an isolated event. Interest in the social sciences was on the increase everywhere in that decade, as is shown by the fact that in 1886 the American Economic Association (established in 1885) began the issue of its early monographs, while the Faculty of Political Science of Columbia began publication of the Political Science Quarterly. It may be noted also that three years later the American Statistical Association established its present quarterly publications, while in 1890 the American Academy of Political and Social Science at Philadelphia commenced the issue of its Annals. Evidently there had been a great stirring of the waters. Whereas in 1885 few means of publication were available to students of the social sciences other than the printed book, the next five years provided outlets which were to prove more than ample for the supply of first-class material and were to lead, a decade later, to proposals for a grand merger which should do away with institutional rivalry and, it was hoped, raise the quality of economic publications.

Wells Bequest in 1902

At Harvard the next development was the David A. Wells bequest in 1902, which, beside providing for a professorship in economics, enabled the Department to offer an annual prize of $500 for the best thesis embodying the results of original investigation by members of the senior class in Harvard College and graduates, of not more than three years standing, of any department of the University, the subject to lie within the field of economics or some adjacent field, and the thesis to be published by the University. While this bequest did not provide funds for research it did provide means of publishing the best theses written by students in the Department of Economics, and so stimulated interest in such work.

Bureau of Business Research

With the establishment of the Business School, a Bureau of Business Research was created in 1911 for the primary purpose of aiding instructors in the collection and analysis of materials for teaching. From its beginning the Bureau has carried on a series of statistical and other studies which, although designed chiefly to develop instruction in business administration, contain much of interest to the economist and are therefore appropriate to mention in this survey. Even more important for our present purpose is the fact that the Department of Economics had the same need as the Business School of provision for gathering materials for teaching, though this had never been recognized by the University, so that the establishment of the Bureau of Business Research gave a useful object lesson.

Department Needs Set Forth

In 1914 the Department of Economics, realized how inadequately it was equipped not only for scientific investigation but even for securing the necessary materials for instruction, authorized the Chairman to present the subject to the President of the University, with the result that in 1915 the Harvard Graduates' Magazine published an article upon "The Need of Endowment for Economic Research," in which the needs of the Department were fully set forth. In substance, the situation was that the modern economist was expected to make bricks without straw. Apart from the usual library facilities, the instructor in economics at Harvard, as at other universities, was expected to find materials for teaching and research as best he could and at his own expense. The personal and professional contacts, the knowledge of the field not to be derived from books, the search for data, the subsequent classification and analysis involving much routine work of a purely clerical character, the money for travel and stenographic expenditures, and all other things needed for the best results, he must manage as best he could. So long as economics was treated as a branch of moral philosophy and taught in a single course of one term out of an elementary textbook by the Alvord Professor of Natural Religion. Moral Philosophy, and Civil Polity, endowments for economic research were unnecessary; but in the second decade of the twentieth century it was evident that the Department of Economics was literally in the position of the servant expected to produce his tale of bricks without any substantial supply of straw.

Plight of Department

Moreover, the plight of the Department was in glaring contrast with the condition of those departments concerned with the natural and physical sciences, in which it had long been a matter of course that money for research was a plain necessity. Yet economic research, properly conducted, is as expensive as research in any other field, and probably more expensive than in most others. The collection of the primary materials is often wholly beyond the ability of the individual investigator, and the subsequent analysis and study of data, always becoming more minute and laborious and involving much work of a purely clerical character, makes impossible demands upon the time and strength of an individual worker even though he have no other duties inside or outside the University. Moreover, time runs against him, for his materials are in the highest degree mutable. Some things, indeed, do not change. The law of diminishing returns is not likely to be modified in the near future, even by act of Congress or a national committee organized with headlines in the Monday papers for the purpose of discovering whether, in this new era, two and two may not make five. But such things as laws and institutions, methods of production, available natural resources, number and distribution of population, are in constant state of flux, so that the economist's task is never done. His materials must ever be collected anew, and his work ever repeated; the economic order changes, and the living specimens of today become in a few years the fossil remains of a bygone age. We are speaking, it will be noted, not of changes in theories but of mutations in the phenomena with which theories deal in no field, probably, does the scientist have to deal with phenomena that change so generally and rapidly as in that of the social sciences, to which economics belongs.

Research Endowment Suggested

As a beginning in the very large work of providing adequately for economic research, the article in the Graduates Magazine suggested the endowment of research assistantships which would enable the University to give professors competent assistants like those provided for investigators in other fields. It also suggested that funds might be secured for the investigation of particular subjects that happened to be of timely interest. In conclusion, it pointed out that the first step is usually the hardest. The endowment of economic research at Harvard or any other university is a thing that can be finally and conclusively justified only by its results, while such results, in turn, are impossible without an endowment the necessity of which is not generally recognized. With hope, therefore, but without confident expectation, the Department of Economics brought its claim to the attention of friends of the University in 1915; and there the matter rested for a couple of years.

Committee Appointed

In the spring of 1917 the Corporation of Harvard University appointed a Committee on Economic Research, consisting of Professor Charles J. Bullock, chairman, Messrs. Charles F. Adams, '88, Nicholas Biddle, '00, Frederic H. Curtiss, '91, Wallace B. Donham, '98, Edwin F. Gay, Dean of the Business School, Ogden L. Mills, '05, and Eugene V. R. Thayer, '04, to whose number Mr. Robert Amory, '06, was later added. By that time the United States had entered the World War, and there could be no thought of securing endowment for a new scientific enterprise. It had been decided, however, that the first work of the Committee should be the organization of a statistical department for the collection and analysis of economic materials; and it was believed that, if such a department should undertake the study of current statistics relating to general business conditions, it would be possible to issue a publication that could become self-supporting. Graduates of the University contributed the sum of $5000 to provide for the necessary preliminary investigations; and Professor Warren M. Persons, formerly of Dartmouth and Colorado Colleges, who at the time was lecturer in economics at Harvard, was engaged to take charge of the work. By the following year his investigations had reached a point which justified the Committee in beginning publication of the Review of Economic Statistics, the first number of which appeared in January, 1919. The Harvard Alumni Bulletin, in its issue of April 5, 1920, contained an article describing the work of the Review in its first year; and therefore it will suffice in this article to state that the Review was published as part of a business service, later known as the Harvard Economic Service, which became self-supporting in its second year and subsequently showed a modest profit which was accumulated as a reserve to insure continuance of the enterprise.

The close of the War left the University facing many and great needs which had to be satisfied before the effort to obtain an endowment for economic research could be resumed. The Committee found itself with a statistical organization and a publication enterprise on its hands, which could support themselves and accumulate a moderate reserve but could not be expected to provide money for other purposes. Until 1928 conditions continued unfavorable for the prosecution of the original plan of providing the Department of Economics with the facilities it required for economic research and the collection of materials needed for the purpose of instruction.

Service Becomes Large

Meanwhile the Harvard Economic Service had become a fairly large enterprise which involved financial and other responsibilities greater than had been originally contemplated and difficult for a university department to assume in perpetuity. It was therefore thought advisable to invite the subscribers to the Economic Service to cooperate in organizing an incorporated scientific society which should take over the conduct of the Economic Service as well as all the assets and liabil-

ities of the Harvard University Committee on Economic Research. In December, 1927, this was accomplished, and the Harvard Economic Service went out of existence, to be succeeded by the Economic Service of the Harvard Economic Society. The new Society, organized as an eleemosynary corporation under the Laws of Massachusetts, is known as the Harvard Economic Society, Incorporated. It is managed by a board of trustees which included the former members of the Harvard University Committee on Economic Research, so that there has been no change in personnel or policy. It has two classes of members, directing members who elect the trustees, and general members who have no part in the government of the Society but are entitled to receive its Economic Service and to participate in its general scientific activities. Its purposes are to promote the scientific study of economics and to publish and diffuse the results of its investigations for the benefit of its members and all mankind, all of its purposes being non-partisan, non-sectarian, charitable, scientific, and educational, and conducted in no manner, directly or indirectly, for profit to anyone. At the close of its second year, it finds itself with a total of 640 general members and 726 subscribers to its publications. Its income from all sources was something over $160,000, of which $125,000 was spent on the Economic Service, $24,000 added to its surplus and contingent reserve, and $11,000 appropriated for several projects of scientific interest.

Foreign Services Formed

The interest aroused in the work of the Economic Service has been sufficient to stimulate the formation of cooperating services in other countries, of which the first was the London and Cambridge Economic Service, conducted by a committee representing the Departments of Economics at the University of London and Cambridge University. Of the others, the best known are the Institute of Statistics of the University of Paris, the Institute fur Konjunkturforschung in Berlin, and the Institute of Statistics and Economic Politics at the University of Rome. A conference of these various committees and institutes was held in London in June, 1928, and another conference will probably be held this coming summer. It is not too much to hope that out of the work of the Harvard University Committee on Economic Research there has come one important permanent result, namely, the establishment in a number of leading countries of economic institutes and services devoted to the study of current business conditions and collaborating in a manner that should prove increasingly helpful to all concerned.

The incorporation of the Harvard Economic Society left the Harvard University Committee on Economic Research in full existence, but without assets, liabilities, or activities. It also left unsolved the original problem with which the Committee started, namely, that of providing the facilities so sorely needed for research in the Department of Economics. Early in the year 1928 this problem was taken under consideration by a joint committee representing the Committee on Economic Research and the full professors in the Department, with the result that in the spring there was presented to the Harvard Corporation, a proposal to enlarge the existing Committee by adding thereto all of the full professors in the Department of Economics who were not then members of that Committee. In due time this action was taken; and the reconstituted Committee now consists of the following members: Professor C. J. Bullock (chairman), Hon. Charles Francis Adams, Mr. Robert Amory, Professors J. D. Black, H. H. Burbank, T. N. Carver, W. L. Crum, Mr. Frederic H. Curtiss, Professors W. B. Donham and E. F. Gay, Hon. Ogden L. Mills, Professors P. Sorokin and F. W. Taussig, Mr. Eugene V. R. Thayer, and Professor J. H. Williams. In the Catalogue of the University it makes, and has always made, a modest showing, being merely mentioned with the "Other Committees" appointed by the Corporation and to be found, for example, on page xiv of the University Catalogue for 1929-30.

Rockfeller Foundation Grant

While the Committee was in process of reorganization, the problem of ways and means was fortunately solved by a generous grant from the Rockefeller Foundation of the sum of $150,000, payable in instalments not exceeding $30,000 per annum over a period of five years. The terms of the grant provide for just such research as the Department of Economics visualized when it brought its needs to the attention of the President of the University in 1914. For the first time in its history, the Department can turn to economic research without the feeling that it is expected to make bricks without the necessary materials. For the first time, too, this great need of the Department, and therefore of the University has found practical recognition, and on a generous scale which should insure substantial and significant results.

In the modest building at 70 Plympton St., which now serves as the office of the Department of Economics, two rooms have been set aside for the use of the Committee, a statistical laboratory is being equipped and a beginning has been made of providing the Department with the facilities it has so long lacked. Direction of the work falls to an Executive Committee consisting of the chairman of the full Committee, Professors Taussig and Burbank, and Mr. Robert Amory. Miss Elizabeth L. Waterman, Ph.D. Radcliffe, 1929, formerly instructor at Wellesley College, has been elected secretary of the Committee and is in charge of the present offices. Besides serving as general executive under the direction of the Executive Committee, she is also assisting in a research project presently to be mentioned. Thus, after nearly sixteen years, economic research has acquired its place in the sun at Harvard University, with every prospect that it will thrive and demonstrate its right to permanent support.

The scientific work authorized by this year's budget falls into three categories. In the first place, there are grants, to a number of professors, of money for the employment of research assistants to aid in the prosecution of investigations they were already carrying on or have this year undertaken. In the second place, there have been some small grants, not of a continuing character, to members of the Department for statistical and clerical assistance connected with particular pieces of research. And finally, grants have been made for two things that may properly be termed "research projects": one a study of New England agricultural economics and the other a statistical study of some problems in the consumption of wealth. In February or March the full Committee will meet to adopt a budget for the next college year.

1928 Department Landmark

That so much was accomplished last year justifies us in regarding 1928 as a landmark in the history of the Department of Economics fairly comparable with the appointment of Dunbar to the first professorship in 1871, the establishment of the Quarterly Journal of Economics in 1886, and the appointment of the first Committee on Economic Research in 1917. That original Committee, so far as I have yet been able to learn, was the first organization ever established in any university for the purpose of making permanent provision for economic research. Form its efforts have come, first, the Harvard Economic Society, and now the enlarged Committee on Economic Research which, having put its hand to the plow, will never turn back. Realizing that the generous grant of the Rockefeller Foundation provides only the necessary start, it believes that it has started an enterprise that will not only justify itself by results but will in ever-increasing degree command the support of friends and benefactors of Harvard University