tor for the care and delivery of his share under the same circumstances as if the of such mass, to the same extent and agricultural products had been kept sep Under no conditions, however, may fungible agricultural products of different grades be mixed. (4) Every receipt issued for agricultural products stored in a licensed warehouse must embody within its written or printed terms a large number of facts and conditions enumerated in the law. duties of warehousemen licensed under the Act with respect to their care and responsibility for agricultural products stored therein. As a condi-arate. tion to the granting of a license the warehouseman must agree to comply with all the terms of the Act as well as all the rules and regulations which the Secretary of Agriculture is authorized to promulgate thereunder. Each license shall be issued for one from time to time establish and promul(5) The Secretary of Agriculture may year, and may be renewed from time gate standards for agricultural products to time by a written instrument, if by which their quality or value may be all conditions are satisfactorily com-judged or determined. Such standards as may be promulgated shall be known plied with. Adequate bond, other as the "official standards of the United than personal security, must be fur- States" for the agricultural product to nished by the warehouseman to the which they relate. United States to secure the faithful performance of obligations under this Act, or under the laws of the state in which he is operating, or under any contracts into which he may have entered with the depositors of agricultural products in his warehouse. A license may be issued to any person not a warehouseman to accept the custody of agricultural products and to store them in a warehouse owned, operated, or leased by any state, upon condition that such person agrees to comply with all the terms of the Act, as well as all rules and regulations prescribed thereunder. Such person shall issue receipts for products placed in his custody and must also furnish adequate security in the On the contrary, form of a bond as defined by the law. the Secretary of Agriculture is authorBriefly described, the following addi-ized to cooperate with officials charged with enforcing such state laws, and tional features of the bill deserve spe- through such coöperation to secure the cial notice: enforcement of the provisions of this (6) Every warehouseman operating under the Act must keep in a place of safety complete and correct records of all Agricultural products stored in his warehouse and withdrawn therefrom, of all warehouse receipts issued by him, and of all receipts returned to and canwith others prescribed by the law, must celled by him. All such facts, together be reported to the Secretary of Agriculture from time to time. authorized to cause examinations to be (7) The Secretary of Agriculture is made of any agricultural product stored in any warehouse operating under the pend or revoke any license issued under Act and to publish his findings; to susthe Act for violation or failure to comply with the law; and to examine all books, records, papers and accounts of warehouses licensed under the Act. (8) Nothing in the Act shall be construed to conflict with or impair the effect of the laws of any state relating to warehouses, warehousemen, graders or classifiers. weighers, Act. forging, altering, counterfeiting, falsely Heavy penalties are imposed for representing, or otherwise violating the terms of the Act. (1) Every warehouseman operating under the Act must receive for storage, so far as capacity of his plant permits, any agricultural product of the kind cus(9) As in the case in the Grain tomarily stored therein which is in Standards Act also, the law provides suitable condition when offered, without making any discrimination between per-clared invalid such judgment shall not that should any part of the Act be desons requesting warehouse facilities. affect the remainder thereof. (2) Grain, flaxseed, or any other fungible agricultural product stored for interstate or foreign commerce in a warehouse licensed under the Act must be inspected and graded by a person duly licensed under the Grain Standard Act to grade the same. The Cotton Futures Act.-The YEAR Book for 1914 (p. 337) contained a detailed statement of the leading provisions of the United States Cotton Futures Act of Aug. 18, 1914, while the 1915 issue (p. 345) discussed the decision of Judge Charles M. Hough of the U. S. District Court in New York declaring the Act unconstitutional. The essential differences between the Cotton Futures Act of 1914 and the new measure are three in (3) The product of each depositor must be kept separate from agricultural products of other depositors so as to permit at all times proper identification and redelivery of the product deposited. By agreement or custom, however, a warehouseman may be authorized to mingle fungible agricultural products with other products of the same kind and grade. In such cases he shall be severally liable to each deposi profit any one is doubtful. The first and immediate effect would almost certainly be the reverse, whatever larger good might in the end come from it. I am frankly reluctant to destroy so finely adjusted an industrial machine as the A dislike for useless waste and destruction makes one loath to follow the authority which may be understood as reorganization, in spite of its proved powquiring the breaking up of defendant's er for good, albeit with serious possiagainst taking any course which may bilities of evil. A like instinct rebels hereafter involve this or any other tri record shows the defendant to be. number. In the first place, the seventh division of Section 5 confers authority upon the Secretary of Agriculture, should disputes be referred to him, to include in his findings a complete classification of the cotton for purposes of delivery on future contracts, whereas his findings under the 1914 Act were confined to the specific question of grade, quality, or length of staple in dispute. Section 6A of the 1916 law is entirely new, and provides an optional contract un-bunal going again over any part of the der which the parties may agree, once been covered. ground which in this proceeding has Under the circumwithout being subject to tax, that un- stances would it not be better simply to der certain specified conditions, the retain the bill? buyer may demand delivery of the basis grade named in the contract. Again, Section 11 of the Act of 1914, which taxed orders sent abroad for the making of future contracts on foreign cotton exchanges unless certain conditions were complied with, is omitted in the new law. This omission is of the greatest importance, since one of the principal arguments directed against the 1914 law was its interference with American transactions on foreign exchanges. Leading Cases Affecting the Conduct of Business.-The year witnessed the rendering of four judicial decisions which deserve special mention because of their important bearing upon the conduct of corporate business. It is to be noted that in all, save one, the verdict was favorable to the defendant. Briefly summarized these decisions were as follows: (1) The decision by Judge Rose in the U. S. District Court of Maryland in February refusing to order a dissolution of the American Can Co. on the ground that no good purpose could be served by a dissolution, especially since the Company for a number of years past had done nothing to indicate continued intent to throttle competitors by illegal methods. The Court's argument, in part, is as follows: Defendant once sought to emancipate itself from restraints of competition. Its power is great, but, as has already been pointed out, is limited by a large volume of actual competition and to a still greater extent by potential competition, from the possibility of which in the present state of the industry it cannot escape. Those in the trade are satisfied with it. They do not want it dissolved. Whether its dissolution would (2) The decision in the U. S. District Court for the Southern District of New York, in June, in the suit of the U. S. Government under the Sherman Anti-Trust Act against the Corn Products Refining Co. The Court decreed the dissolution of the Company, and the verdict came as a surprise, especially because of the refusal of the Maryland Court in American Can Co. case. In this case the Court seemed unable to find any mitigating circumstances. Judge Hand, in his opinion, asserts that the officers of the Corn Products Refining Co. apparently had a custom of communicating with each other by typein the face of these memoranda, which written, unsigned memoranda . . . and for some strange reason were preserved, there can be no question in my mind of the continuous and deliberate purpose of the Corn Products Refining Co. by every device which their ingenuity could discover, to maintain as completely as possible their original domination of the industry. (3) The decision of the New Jersey Court of Errors and Appeals in March (in the suit brought by the Island Heights & Seaside Park Bridge Co., a New Jersey corporation, against the Brooks & Brooks Corporation, a New York corporation) to the effect that foreign corporations doing business in New Jersey are not subject to the provisions of one of the "seven sisters" laws of 1913 (A. Y. B., 1913, P. 344), which prohibits one company from purchasing or holding stock of another. (4) The decision of the Federal Circuit Court of Appeals in January, sustaining the Victor Co. in its efforts to sell phonographs subject to use under prescribed conditions and in connection with other products of the Company. The Court takes the view that the Dick mimeograph case (A. Y. B., 1912, p. 522) "establishes the proposition that a restriction to use only with other products of the patentee is legitimate." In sustaining its position the Court says in part: A study of these various documents leads to the conclusion that complainant has undertaken to avoid making such a sale of its machine as would permanently pass it beyond any further control by itself. We think it has suc ceeded in so doing; this is not a sale outright, or a conditional or restricted sale, or any sale at all. Under the authorities the owner of a patent who manufactures machines under such patent can give the right to use to whom he pleases, upon what conditions he may choose to impose. We do not see why he may not give to one person a more restricted right to use than he does to another. The documents are long and complicated, but it seems to us that this is what they provide for. We do not know why, under the law and the authorities, a patentee may not thus dispose temporarily of the use and ultimately of the title of a machine made by him and protected by his patent. ECONOMICS WESLEY C. MITCHELL "mechanistic and Austrian," but laments that his statement has been much impaired by "a misguided deference for the 'new psychology'" (Pol. Sci. Quart., September). Theory. At its January meeting | June). Finally, A. C. Whitaker apthe American Economic Association proves Fetter's type of theory as spent one session in discussing recent tendencies in economic theory. J. H. Hollander represented strongly that American economists have not paid due attention to the inductive testing of their doctrines. He favored a realistic mode of treatment, based upon extensive study of the processes of business life. W. C. Mitchell argued that the attempt to simplify economic theory by abstracting from the use of money has proved itself a failure. The animated discussion which followed showed anew how widely economists differ concerning the relative advantages of competing types of theory. Further evidence to the same effect has been supplied by the critical reviews of F. A. Fetter's Economic Principles (A. Y. B., 1915, p. 668), in which "the basis of value is conceived to be the simple act of choice and not a calculation of utility." H. J. Davenport contends that by dropping the word "utility" and putting nothing in its stead, Fetter has fallen into "a lamentable confusion both of terms and of thought" (Jour. Pol. Econ., April). As "a student of economics and primarily of things other than value, price, and distribution,” H. A. Millis prefers "a modernized Mill" to Fetter's type of theory (Quart. Jour. of Economics, May). C. W. Doten forebodes that if Fetter's example be adopted, "the business world and economists will no longer speak the same language" (Am. Econ. Rev., A Constructive work shows no more unity of aim than criticism. There has been a dearth of systematic treatises during the year, but no dearth of brief contributions. philosopher, R. B. Perry, fresh from the debate on value in the Journal of Philosophy, Psychology, and Scientific Methods, 1914-15, has offered a helping hand to clear up the relations between economic value and moral value (Quart. Jour. of Economics, May). Much the same issue has been discussed from a different viewpoint by J. M. Clark in his paper on "The Changing Basis of Economic Responsibility" (Jour. of Pol. Econ., March). More technical in character is F. H. Knight's treatment of interest (Quart. Jour. of Economics, February); "the normal rate of interest," he concludes, "is . . . the anticipated productivity of the next unit of capital investment at the time under consideration." Wages.-F. W. Taussig has analyzed the proposal to establish minimum wages for women by governmental agencies. Four-fifths of women workers, he finds, live at home; family life is so economical that the bulk of these workers are not "parasitic"; to insist upon giving them the minimum wage required to support September). J. E. Sterrett has used the records of a large accounting firm to show that judges must allow more liberal profits to public utilities if their ability to secure needed capital is not to be jeopardized (ibid., March). L. R. Nash (ibid.) and J. C. Bonbright (Quart. Jour. of Economics, May) have carried further the_analysis of depreciation, and R. E. Heilman has attacked the complicated problem of interstate utility capitalization (Jour. Pol. Econ., May). independent women would cause the upon investments (Am. Econ. Rev., discharge of many girls who are now helping to support their families (Quart. Jour. of Economics, May). The application of wage theories in arbitration cases is discussed by W. Compton (Am. Econ. Rev., June). He shows that arbitrators run the gamut from “splitting the difference," through the "living wage" and "charging what the traffic will bear," to a comprehensive plan of altering the present scheme of distribution. H. P. Fairchild has adduced fresh evidence indicating that the common laborer's standard of living in this country has not risen and may well have fallen somewhat in the past 30 years (ibid., March). Valuation of Corporations.-A practical problem amenable to exact analysis is the economist's delight. Not even the theory of taxation receives more attention nowadays than the principles underlying governmental policy toward public utilities. G. P. Watkins has been studying certain technical features of electrical rates (Quart. Jour. of Economics, May and August), and R. Riegel of fire-insurance rates (ibid., August); A. M. Sakolski has treated the valuation of railroad rights of way (Am. Econ. Rev., June); M. O. Lorenz, cost and value of service in railroad rate making (Quart. Jour. of Economics, February); L. H. Haney, joint costs in railroading (ibid.); J. Bauer, the returns on public-utility investments, the allowance to be made for working capital (Pol. Sci. Quart., June and September), and the basis of valuation in the return to be allowed Business Cycles.-Attention has been diverted from the ordinary course of trade fluctuations to the extraordinary conditions brought about in Europe and America by the great war and to speculations about the effects of peace when it comes. Studies of this character are too numerous to list; they are indeed more likely to be overvalued than to be overlooked by those interested in the current development of economics. One contribution of lasting interest, however, must be noted, W. M. Persons' "Construction of a Business Barometer" (Am. Econ. Rev., December). Persons computes with due precautions the coefficients of correlation between index numbers of wholesale prices (which he accepts as the best single gauge of business conditions) and 25 other statistical series. From the series showing high coefficients, he constructs both a business "barometer" and a "one-year forecaster." This paper promises important results in stimulating further research along similar lines. XIV. PUBLIC FINANCE, BANKING, AND INSURANCE PUBLIC FINANCE C. C. WILLIAMSON FEDERAL FINANCE Appropriations of Congress.—The grand total of regular, annual, deficiency, miscellaneous, and permanent annual and indefinite appropriations for the fiscal year 1916-1917 amounts to $1,626,439,209, which is the largest appropriation in the history of the country and more than half a billion larger than the aggregate for the year preceding. In addition to the direct appropriations, contracts are authorized to be entered into obligating Congress to make appropriations in the future amounting to $231,945,275, principally for naval and coastdefense purposes, in addition to an estimated amount of $295,000,000 which will be required to carry out the definite naval building programme authorized by Congress. Actual appropriations for military and naval purposes and for additional seacoast defenses amount to $685,709,823, as shown in the following table (see also XII, Military and Naval): Army Appropriation Act. Panama Canal fortifications. Deficiency appropriations, military and naval establishments... National Guard camps Total..... $267,596,530.10 4,683,495.00 1,616,000.00 Less unexpended balances repaid PANAMA CANAL STATEMENT .$685,709,823.09 Total expended to June 30, 1916. Total of bonds issued to date.... 249 221 129 134 142 155 22 18 164 159 71 6 23 23 736 716 Outside of the appropriations for national defense, the principal increases are for the Department of Ag1 Pay warrants drawn on account of postal riculture, the Diplomatic and Consu- deficiency for the year ending June 30, 1915, lar Services, the Indian Service, the amounted to $6,636,593, as reported in the government of the District of Co-Treasury statement for June 30. The actual audited deficit of the Postal Service was lumbia, and for collecting the income $11,333,309. |