REQUIRED READINGS

1. Williamson, _Readings in American Democracy_, chapter viii.

Or all of the following:

2. Adams, _Description of Industry_, chapter viii.

3. Carver, _Elementary Economics_, chapters xix, xx, xxi, xxii, and xxiv.

4. Hayward, _Money, What It Is and How to Use It_, chapter viii.

5. Smith, _Wealth of Nations_, Book 1, chapters iii and iv.

QUESTIONS ON THE REQUIRED READINGS

1. Name some commodities which at one time or another have been used as money. (Carver, pages 215-216.)

2. Why were precious metals first coined? (Smith, chapter iv.)

3. What is meant by the phrase "Time is money"? (Carver, page 183.)

4. What is the function of the bank check? (Hayward, pages 58-60.)

5. Explain the meaning of scarcity. (Carver, page 203.)

6. What are the characteristics of a modern market? (Adams, pages 139- 148.)

7. What is meant by the "higgling of the market"? (Adams, page 139.)

8. What is the "first law of the market"? (Carver, page 201.)

9. What are the four industrial agencies on which the organization and practice of the modern market depend? (Adams, pages 148-152.)

10. What is meant by the "widening of the market"? (Carver, page 171.)

11. Explain the statement that "the division of labor is limited by the extent of the market." (Smith, chapter iii.)

TOPICS FOR INVESTIGATION AND REPORT

I

1. In the production of what commodities do the people of your section tend to specialize? To what extent is this specialization due to the nature of the soil and climate? To geographical location? To the training of the people?

2. What becomes of the surplus products of your section? Trace these products as nearly as possible to the ultimate consumer.

3. List the articles of food which appear on your dinner table and attempt to discover the source of each.

4. To what extent does the exchange of products in your section take place by means of ca.n.a.ls, inland waterways, ocean-going vessels, motor truck, horse teams, railroads?

5. To what extent are the telephone and telegraph used to facilitate exchange in your section?

6. Visit a near-by market and study the operations there, with reference to the facts discussed in this chapter.

7. List and cla.s.sify the middlemen of your community.

II

8. Internal trade and transportation in the United States a century ago. (Bogart and Thompson, _Readings in the Economic History of the United States_, pages 240-251.)

9. Transportation and communication in the United States since 1860.

(Bogart, _Economic History of the United States_, chapters xxiv and xxv.)

10. Early forms of money. (Bullock, _Selected Readings in Economics_, pages 387-399.)

11. Forms of money at the present time. (Adams, _Description of Industry_, chapter x.)

12. Why coinage is necessary. (Bullock, _Selected Readings in Economics_, pages 399-400.)

13. The minting of coins. (_Lessons in Community and National Life_, Series C, pages 177-185.)

14. Paper money. (_Lessons in Community and National Life_, Series C, pages 185-192.)

15. Functions of money. (Adams, _Description of Industry_, chapter x.)

16. The commercial bank. (_Lessons in Community and National Life_, Series A, pages 187-192.)

17. An English fair in the eighteenth century. (Bullock, _Selected Readings in Economics_, pages 325-333.)

18. The development of business organization. (Marshall and Lyon, _Our Economic Organization_, chapters ix and x.)

CHAPTER IX

DISTRIBUTING THE INCOME OF INDUSTRY

82. THE PROBLEM PRIOR TO THE INDUSTRIAL REVOLUTION.--The distribution of industrial income has to do with dividing the products of industry, or the money which represents those products, among the various individuals who have aided in their creation.

The problem of distribution has existed ever since men first combined for purposes of production, but until the period of the Industrial Revolution the question was relatively unimportant. When, three hundred years ago, most necessities were produced within the family circle, there was little or no question as to whether or not individuals outside the family ought to be rewarded for having helped in the production of those commodities. If one member of the family made an entire pair of shoes, for example, he was clearly ent.i.tled to those shoes, at least so far as economic principles are concerned.

Even where different members of the family combined to produce a pair of shoes or an article of clothing, the small number of persons involved, as well as the close ident.i.ty of interests among the family members, kept the problem of distribution from becoming a serious one.

83. EFFECT OF THE INDUSTRIAL REVOLUTION UPON THE PROBLEM.--The Industrial Revolution greatly increased the importance of the problem of distribution. Indeed, the growth of the factory system, and the greater and greater complexity of the division of labor, have made the distribution of industrial income the basic problem in our economic and social life. Many commodities are still produced by individuals working independently, or by the joint efforts of the members of a family, but the vast majority of commodities are now produced by the joint efforts of numerous individuals who are not bound together by family ties. The production of a factory-made shoe, for example, involves large numbers of people, including the cattle grower, the transportation agent, the tanner, numerous laborers, the individuals who supply land and capital to the entrepreneur, and the entrepreneur who conducts the enterprise. The welfare of millions of people is involved in the distribution of industrial income among individuals who cooperate in such enterprises as this.