Introduction

The Cowles Commission for Research in Economics was founded in 1932, at which time it was incorporated under the laws of the State of Colorado as a not-for-profit corporation to encourage and conduct investigations into problems of current economic importance with particular reference to the application of statistics and mathematics in the solution of these problems. In the beginning the following Advisory Council for the Commission was appointed: Arthur L. Bowley, University of London; Irving Fisher, Yale University; Ragnar Frisch, University of Norway; Wesley C. Mitchell, Columbia University; Carl Snyder, for many years with the Federal Reserve Bank of New York. Jacob Viner, University of Chicago, was added to the Advisory Council in 1939.

During the first eight years of its existence the Commission had its headquarters in Colorado Springs and was affiliated with Colorado College where courses were regularly offered by members of the Commission's staff. From 1935 to 1940, inclusive, the Commission each summer conducted a research conference at Colorado College. At these conferences more than 100 different speakers presented lectures and the attendance included representatives from 17 foreign countries, as well as most of the important economic research institutions, government bureaus, institutions of higher education, and many of the large corporations, in the United States.

In the Spring of 1939 an arrangement was completed with Robert Maynard Hutchins, president of the University of Chicago, to affiliate the Commission with the University. This provided for the increase of the research staff of the Commission by the addition of some members of the University faculty on a part-time basis and of other members of the faculty, who, while salaried by the University and giving most of their time to its service, have the assistance of the facilities of the Commission for carrying out research projects. The University furnishes the Commission with offices in the Social Science Research Building. The move from Colorado Springs to Chicago was made in September, 1939, and at that time the Commission was incorporated as a not-for-profit corporation under the laws of the State of Illinois.

Eighteen different individuals have been connected with the Commission as research associates, of whom 10 are at present affiliated in that capacity. An average of four full-time employees has been maintained for computing and other clerical work, as well as a large number of part-time student workers provided through the co-operation of the National youth Administration.

During the 10 years of its existence the Commission has published six monographs, varying in length from 175 to 620 pages. In addition to these, members of the staff have published 14 other books and 106 journal articles, and have presented 152 papers before scientific societies. Staff members have also taken a major part in the administration of the affairs of the Econometric Society and in the publication of its quarterly journals Econometrica.

Research Program of the Commission

The war has required major changes in the research work of the Commission. On the one hand, new and urgent economic problems have arisen, and on the others the opportunities for current observation of normal price-making processes have nearly disappeared. The past and probable future losses of members of the staff to government agencies make it unwise to undertake at this time a large-scale research project continuing over several years. For these reasons, the Commission is deferring its long-range program, directed to the analysis of factors determining rates of investment and ultimately to a consideration of the obstacles to full employment of productive resources, and is devoting its energies, in so far as they can be efficiently used, to a study of war price controls.

This project is being undertaken jointly by the Cowles Commission and by the Price Conference of the National Bureau of Economic Research. It has three phases: theoretical analysis, study of statistics and other information relating to price and wage phenomena, and field investigation through interviews with buyers and sellers. The objective is to appraise various types of price-control methods and the administrative devices employed in implementing these methods. Besides having long-range significance, the findings will be useful in affording the public and parties immediately interested an objective critique of methods of price control. Theodore O. Yntema and Joel Dean (to the extent the latter's obligations in the Office of Price Administration permit) are directing the project with assistance from the Committee on Price Determination organized under the Price Conference of the National Bureau. Oscar Lange is participating actively both as a member of the Committee and as a Cowles Commission research associate. After the middle of the year, Leonid Hurwicz and a staff of interviewers will devote full time to the undertaking. In addition to the resources made available for this enterprise by the Cowles Commission and the National Bureau. it is hoped that funds may be obtained from other sources to conduct the investigation on a larger scale.

The work in progress in the Commission includes also a considerable number of projects which were initiated prior to the war.

Alfred Cowles, Forrest Danson, and Dickson H. Leavens have continued their systematic appraisal of stock price forecasts to determine the degree of accuracy of predictions by professional forecasters.

Harold T. Davis has begun a compilation of price data in ancient-Egypt and Rome with the objective of extending time-series analysis of price into earlier periods of history.

Joel Dean has been on leave of absence to act as price executive for industrial and agricultural machinery in the Office of Price Administration. He has therefore been unable to proceed with his book which would integrate his various studies of cost and demand functions in the individual enterprise It is hoped that this book will appear as a Cowles Commission Monograph when Professor Dean resumes his academic activities.

Oscar Lange, assisted by Leonid Hurwicz, is investigating the effects of changes in national income and employment on savings and the pattern of consumption expenditures, and is studying the relationships among national income, employment, and investment. Professor Lange and Mr. Hurwicz are also investigating the possibility of analyzing time series by recently developed methods such as the correlogram and the harmonic dial, in order to obtain a more satisfactory test of certain theories of business cycles than has been possible by classical periodogram analysis.

Dickson H. Leavens, whose time is largely occupied with editorial work, has been continuing the collection of materials on silver and gold especially with reference to the monetary uses of these metals.

The analysis of the factors determining the demand for steel undertaken by H. Gregg Lewis has progressed far enough to be submitted as a doctoral dissertation. Mr. Lewis plans to refine and amplify his study before it is published as a Commission monograph. This pioneer investigation will help illuminate the demand for durable goods, a dark field in economics.

Jacob L. Mosak is on leave of absence to take a position in the Office of Price Administration. He has, however, completed the draft of his mathematical formulation of the theory of international trade. After minor revisions are made by the author, this study will appear as a Commission monograph. It affords a definitive statement of international trade theory constructed on the foundations of theoretical economics which have been laid by J. R. Hicks and others during the last decade.

John H. Smith is continuing his organization and integration of the theory of sampling. This work is designed to bring within the horizon of most statisticians a comprehension of sampling theory instead of a mere acquaintance with rules of thumb for making tests of significance. Theodore O. Yntema is collaborating in this project.

The Committee on Price Determination, established under the auspices of the National Bureau and functioning in co-operation with the Cowles Commission under the direction of Co-Chairmen Joel Dean and Theodore O. Yntema, has been engaged in an exploratory analysis of the factors determining price policies of business men. The work of this Committee has been done mainly by Mr. Hurwicz and a small interviewing and clerical staff. The scope and technique of the interview have been developed and approximately one hundred interviews have been completed. A preliminary report on this work is in preparation. When this report is finished, the Committee will shift its attention to the study of war price controls, as previously indicated.

At the invitation of the Director of the Financial Research Program of the National Bureau, the Cowles Commission is joining in a survey of the possibilities of determining the suitability of common stocks for investment by insurance companies. Francis McIntyre, a former research associate, Forrest Danson, and Theodore O. Yntema are participating in planing for this research.

Affiliation with the Econometric Society

The Cowles Commission since its organization has been affiliated with the Econometric Society, an international society founded in 1930 for the advancement of economic theory in its relation to statistics and mathematics. The Society's offices have been located at the headquarters of the Cowles Commission in Colorado Springs and later in Chicago, and its quarterly journal, Econometrica, has been published there. The Society now has 721 members in 40 countries, and nearly 300 other subscribers to Econometrica, chiefly libraries. Nine volumes of Econometrica, totalling nearly 3700 pages, have been published since its first issue in January, 1933.

Members of the Cowles Commission staff have taken an active part in the work of the Society. Charles F. Roos was secretary until the end of 1936; and Alfred Cowles has been treasurer from 1932 and secretary from 1937. The editor of Econometrica is Ragnar Frisch of the University of Norway, a member of the Advisory Council of the Cowles Commission. The following members of the Commission staff have assisted in the publication: William F.C. Nelson, assistant editor from 1933 until his death in May, 1936; Dickson H. Leavens, managing editor from October, 1936; Harold T. Davis, associate editor from 1933; Charles F. Roos, member of advisory editorial board from 1933; Alfred Cowles, business manager from 1933. Francis McIntyre since 1938 has served as secretary of the American program Committee which plans the meetings of the Society.

Research Conferences

The Cowles Commission conducted a Research Conference on Economics and Statistics at Colorado Springs each summer from 1935 to 1940 inclusive. At these conferences papers were presented by more than 100 economists and statisticians from universities and research institutions throughout the United States and Europe. Over 500 persons attended one or more of the conferences.

The usual four-week program provided for two lectures and discussion periods in the mornings, Monday through Friday. Afternoons, evenings, and weekends were left free through the courtesy of Colorado College a convenient lecture room was provided in Palmer Hall and out-of-town participants were accommodated in the college dormitories. The opportunities afforded for getting acquainted and for informal discussions were a valuable supplement to the regular sessions of the conferences. Participants also took advantage of the opportunities for recreation in the Pikes Peak region, which aided in making the conferences a well-balanced combination of intellectual stimulation and of vacation.

A brief account of the special features of each annual conference is given below; in the appendix will be found a statistical summary and a list of the speakers. The first conference, in 1935, was a series of informal meetings of members of the Econometric Society who remained in the vicinity of Colorado Springs after the meeting of the Society held there on June 22–24 of that year. These meetings were so successful that it was decided to continue them in subsequent years.

The second conference, July 6–August 8, 1936, was planned early in that year and invitations were sent out to members of the Econometric Society and to others who might be interested. The response was encouraging: an excellent list of speakers was secured and more than 50 persons from out of town attended. In addition to the morning sessions, four public evening lectures were given by Professor Irving Fisher, Professor Corrado Gini, Dr. Walter A. Shewhart, and Mr. Carl Synder.

The third conference was held June 28–July 23, 1937. Preparations for this and future conferences were begun each October by issuing invitations to speakers, and in April a preliminary program was made up and circulated to a large list of economists and statisticians in the United States and Europe. The 1937 conference followed immediately after a meeting of the Econometric Society which was held at Denver from June 24 to 26 in connection with the One Hundredth Meeting of the American Association for the Advancement of Science, thus making it possible for many to attend both meetings. The out-of-town attendance in 1937 increased about 20 per cent. In addition to the conference lectures, public evening lectures were given by Dr. Thornton H. Fry, Professor James Harvey Rogers, and Mr. Carl Snyder.

The fourth conference was held from July 5–29, 1938. Since this year marked the hundredth anniversary of the publication by Antoine-Augustin Cournot of Recherches sur les principes mathématiques de la théorie des richesses, the pioneer work in mathematical economics, it was decided to feature this centenary in the program. The opening lecture by Professor Harold T. Davis was devoted to "Cournot — Pioneer in Scientific Economics." On the invitation of the Cowles Commission, the French Government sent as its official representative to the conference Professor René Roy, chief engineer of the Department of Bridges and Roads, and professor at the National School of Bridges and Roads and at the Institute of Statistics of the University of Paris. Professor Roy gave a public lecture in French on "La vie d'Augustin Cournot, sa pensée, ses tendances philosophique et son oeuvre," and two lectures before the conference: "A propos d'un centenaire: l'oeuvre économique d'Augustin Cournot," and "Etude particulière d'une loi de demande: le trafic postale en France de 1873 à 1936." The out-of-town attendance reached nearly 100 this year, including participants from eight foreign countries.

The fifth conference was held from July 3–28, 1939, and again showed an increase in attendance, both from out-of-town and local. Six foreign countries were represented among the participants. The program included lectures by seven representatives of government organizations.

The sixth conference was held from July 1–26, 1940. Since the Cowles Commission had moved to Chicago its library and laboratory facilities were no longer available to participants, but a temporary office was opened in Palmer Hall to handle the details of the conference. Most of the Cowles Commission research staff came on from Chicago for part or all of the period. In addition to the council lectures, two public evening lectures were given by Professor Irving Fisher and Mr. Carl Snyder.

Reports of each conference except the first have been published by the Cowles Commission. Each report consists of about 100 pages and contains brief abstracts of each lecture presented. Copies of any of the reports will be sent without charge to those who ask for them.

Publications

A function of the Commission is to issue, from time to time, various monographs of an economic-statistical or econometric nature without, however, assuming responsibility for theories or opinions expressed therein. Six monographs have been published for the Commission by the Principia Press, Bloomington, Indiana. (See complete LIST OF MONOGRAPHS)

In the course of the next few years research now in process will lead to monographs on the theory of international trade, on the statistical determination of cost functions, on the theory of sampling, on the character of the demand for steel, and on other topics.

The Commission, in addition to its own monographs, assisted in the publication of a textbook, Elements of Statistics, 424 pp., by Harold T. Davis and William F.C. Nelson, published in July, 1935, by the Principia Press. This has been adopted as a text by a number of colleges and universities in the United States and abroad. A revised and enlarged second edition (12,564 kb) (434 pp.) was published in March 1937.

Members of the Commission's staff, during the years of their connection with it, have published 19 books and other separate publications and 106 journal articles, and have presented 152 papers before scientific societies and other meetings. These are summarized in the table below and a detailed list of them is given in the Appendix.

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