Sections so far:

 

Biographical Narrative (Very incomplete, and it likely to remain so for some time)

Foster at Reed (Link to John Sheehy's Reed Magazine article, with my comments and corrections)

Foster as Economist (Brief sketch of Foster as economist, his major contibution to American life post-Reed)

Foster quotes (Parking place for quotes by Foster I've run across, which I liked)

Topical notes (My commentary on issues related Foster's biography)

 

 

Biographical Narrative

 

I have been working on a biography of Reed College's first President, William Trufant Foster.

 

What follows will be some of my findings.

 

Foster was born in 1879 in Massachusetts (Boston area). His father was injured in the US Civil War and died when Foster was an infant. As a boy, Foster worked in a number of odd jobs to help support his family. He attended Roxbury High School for 4 years, participating in debate and editing the school newpaper. He was told we would be accepted to Harvard University if he passed the entrance exams. He didn't have some of the course requirements, notably Latin, but with the help of some of his high school teachers, passed the exam and was admitted to Harvard University in 1897. At Harvard he helped to support himself as a tutor. He also published a Sports Yearbook one year as a money-making enterprise. (A copy is in the Reed College archives.) A major activity of his was debating. At this time debating was big at Harvard, and the Harvard-Yale and Harvard-Princeton debates had begun. Foster participated in a number of organizations at Harvard in addition to the Debating Club. These included Kappa Gamma Chi (don't know much about this one, except they held a "spread" at the end of the school year, presumably to gain new members), the Prospect Union, the Social Union, Cercle Francais, Religious Union, and the Roxbury High School Club. Participation in the Prospect UnionThe Prospect Union.doc involved teaching classes to members of the surrounding community. Foster also participated in the 1900 Presidential Campaign on the side of sound money and the Republican Party (McKinley) and was a delegate to a Student Political Convention in Philadelphia.

 

A fellow debater and future benefactor was Waddill Catchings, a student from Mississippi, who was a chess player at Harvard, and who would get a law degree, join the New York law firm of Sullivan and Cromwell. A few years later Catchings was appointed receiver of  the bankrupt company, Central Foundry, a collection of plants whose main product was cast-iron pipe, and then was appointed President of the Company. From 1915 to 1917 he was an assitant to Edward StettiniusForbes-Stettinius Sr Biography.pdf, agent for the British and French governments, procuring war materiel  from American manufacturers. He strongly urged that someone be in charge of war procurement in testimony 000003.PDF before the Senate Military Affairs Committee in 1918. (The Chairman of this Commitee was Oregon Senator George Chamberlain.) Catchings would become wealthy, and notably set up a foundation for Foster in 1920 to study economics. Foster and Catchings would be co-authors of a series of books, articles, and a daily newspaper column on Economics [written mostly by Foster] in the 1920s aimed at the general public. During the 20's Catchings was President of Goldman-Sachs, arranging financing for the consolidation of the food industry, and serving on numerous Boards of Directors. Catchings got caught up in the stock market frenzy of the late 20's, and was responsible for setting up the Goldman Sachs Trading Corporation just before the market collapsed, which led to his ouster from Goldman-Sachs in 1930. (Re Time story, Walter Sachs' mother was a Goldman.)

 

According to his autobiography (also in the Reed College archives), Foster intended to graduate in 3 years, but illness forced him to abandon this plan. Foster did graduate magna cum laude (about the top 15% of the class) from Harvard in 1901, and obtained a postion as Instructor in English at Bates College in Lewiston, Maine. [Foster had family ties to Maine, and lived in Maine with relatives for part of his youth.] At Bates, Foster taught English and notably, coached the debate team, which was very successful, winning almost all their contests. He stayed at Bates only 2 years, but in the second year, he intiated a course in Education, intended to meet the state license requirements for teachers. In a distance germ of a senior thesis requirement, "each member of the class made a special investigation of some educational topic, and reported the results of his work."  After two years at Bates, Foster returned to Harvard for the 1903-4 year and received a Master's degree in English. He also resumed his participation in debate activities at Harvard, and helped to produce a "History of Debating at Harvard". Foster's  successes at Bates apparently caught the eye of the President of nearby Bowdoin College, a Harvard graduate, who hired Foster as Instructor of English and Argumentation and Debate for the 1904-05 school year.

 

The President of Bowdoin college then was William DeWitt Hyde, a former minister. In his President's report for 1903-04, he discusses faculty needs for his school.  Although, he mentions no names, his discussion of desired qualities of a new faculty member is such that there is no doubt he had William T Foster in mind. Under the heading COURSES IN DEBATING AND PEDAGOGY, President Hyde writes:

 

The course in debating in the past two years has been given by Professors of Rhetoric, History and Political Economy who have done this in addition to their regular work in their own departments. The college is under great obligation to these gentlemen for volunteering to do this arduous and time-consuming work. Without the training they give it would have been impossible to win the debate with Amherst College. It is, however, not just to them or their departments to expect them to continue this extra work. Accordingly the committee on vacancies in the college have recommended that the course in Debating be conducted by the Instructor in English, and that in securing an Instructor his ability to do this work will be an important consideration.

 

After some more discussion, Hyde turns the need for a course in Pedagogy, culminating in:

 

Accordingly, the committee on vacancies have suggeted that this subject also be connected with the Instructorship in English and that an Instructor be secured who can combine this with his other duties. In case the Instructor assumes the conduct of these new subjects it will be necessary for him to discontinue the work done hitherto in the departments of Latin and Greek. This in itself is a misfortune; but the demand for work in Debating and Pedagogy is so much more urgent than for assistance in Classics that for the present it seems best to change the character of the instructorship in the direction desired.

 

Thus Foster at age 25 would assume a position at Bowdoin College created especially for him. The next year, he would be promoted to Professor of English and Argumentation and Debate. 

 

On Christmas Day, 1905, Foster  married Bessie Lucile Russell, a 1904 Bates College graduate and daughter of a Lewiston, Maine physician. Several Harvard friends of Foster attended the wedding, including Waddill Catchings. The Fosters' first son, Russell, was born the following year. Eventually Foster would have four children, three sons and a daughter, born in 1906, 1908, 1912, and 1916.

 

Foster would spend 5 years at Bowdoin, during which he continued to coach astonishingly successful debate teams, and write a textbook on Argumentation and Debating.  His interests turned increasingly to education. Realizing that in the changing academic environment, he would need a doctoral degree, Foster undertook a series of what might be called educational research projects while teaching at Bowdoin, and in the 1909-1910 academic year, enrolled as a graduate student in education and sociology at Columbia University and graduated in one year. In only five years at Bowdoin, Foster established a reputation as an expert in education. By 1910 he had the choice between accepting the appointment of President Taft to become US Assistant Commissioner of Education, then part of the Interior Department, or to become President of a yet-to-be-built college in Portland, Oregon.

 

[In this space: A discussion  of Foster's 1905 paper on The Elective System in High Schools, which reveals much about Foster's attitudes at the time, which persisted throughout his life.]

 

 

According to the graduate school deal worked out with President Hyde,  Foster would receive half his regular Bowdoin salary if he could find someone to take over his courses at Bowdoin for the other half of his salary. Foster found Wilbert Snow, a poet and former Bowdoin student [and future politician, Governor of Connecticut for 12 days] to do this. In his autobiography, Snow writes:

I was to have a room in Foster's home on Federal Street and be a help to his beautiful wife and their two young children, Russell and Barrie. I was expected to furnish the sense of security a man in the house contributes. I tended the furnace, rolled out the trash barrels, fixed faulty gadgets, ran errands, and played with the children.

 

This had to be a bit of a sticky situation.  Snow alludes to it later in his autobiography.

[To be continued]

 

-- Wiliam Trufant Foster

 

Foster at Reed

 

John Sheehy wrote a short article in the Summer 2007 Reed Magazine. Sheehy concentrates on Foster at Reed. Comments and points of disagreement follow:

 

(1) Sheehy writes that Foster considered entrance exams worthless. I don't believe it. Under the Foster regime, all Reed students were tested by mental tests. Foster hired Eleanor Rowland, from Mount Holyoke, who was specifically involved in mental testing, and several early Reed theses were on this subject. Prior to his Reed stint, Foster wrote against the practice of certifying secondary schools, and in favor of testing individuals for college admission.

 

(2) Sheehy writes, "he eschewed grading to underscore Reed’s commitment to knowledge for knowledge’s sake." Foster certainly didn't eschew grading. He insitituted a 10-point "scientific grading scale"--a bell curve truncated on the lower end--, and specified the percentage of students who would be assigned each grade. In his valedictory 1919 catalog, Foster reports  the grading distribution of every professor who had 100 or more students. The grades of some professors, including FL Griffin, closely followed the ideal distribution. Others showed an early tendency towards grade inflation. Foster himself was the worst offender in this regard. Foster was also not a big fan of "knowledge for knowledge sake". He favored knowledge for practical use. This should be clear from most of Sheehy's article.

 

(3) When he was at Bowdoin, Woodrow Wilson offered Foster a job a Princeton, which he turned down on the the advice of William DeWitt Hyde, Bowdoin president. Does anyone know what job Wilson offered Foster?

 

(4) On the IWW, I can attest that it received a great deal of publicity as the enemy within during the first world war and before. I once tried to follow the career of Albert Johnson, who represented western Washington  in congress from 1913 to 1933, and specialized in immigration issues. The fame Johnson gained for opposing the IWW as publisher of the Grays Harbor Washingtonian got him elected to Congress in 1912. His paper was not the only one which featured story after story of the evil doings of the IWW, the Seattle papers were not far behind.

 

(5) Sheehy writes, "Foster initially took a job as chancellor of the Los Angeles public school system upon his resignation from Reed." According to his autobiography, Foster writes he was offered this job earlier, but turned it down. In 1919, the Los Angeles Times had anointed Foster as the next Los Angeles school superintendent, but he was turned down by the school board, according to contemporary articles in the Los Angeles Times.

 

(6) Sheehy writes, "In 1920, he returned to Boston to head up the Pollack Foundation for Economic Research, a small think tank". It is Pollak, not Pollack. Pollak was a lawyer at the Sullivan & Cromwell law firm who died young. The "Pollak Foundation" was essentially Foster himself. The only other person I have seen associated with the Pollak Foundation was Hudson Hastings, an instructor in mechanical drawing at Bowdoin who followed Foster to Reed and back to Massachusetts. Hastings parleyed this experience into an economics professorship at Yale. The Pollak Foundation did publish books by outside authors, a treatise on Index Numbers by Irving Fisher, and a book on the the historical trend of US wages by Paul H Douglas.

 

 

Foster as Economist

 

When Foster left Reed in 1920, he probably realized that he was not cut out to be an administrator. He allowed himself to be involved in too many extraneous worthy causes to give proper attention to building up an institution, such as raising money. Under his Presidency Reed College never enrolled more than about 250 students, and, in the words of one of his pioneer faculty, Mathematics Professor and future interim President of Reed College FL Griffin, Foster had absolutely no tact.

 

His friend from his Harvard days, Waddill Catchings, now an industrialist, set Foster up as head of the Pollak Foundation, basically Foster himself, to study economics, especially what to do about the damaging instability of business cycles. Catchings felt there was something wrong with the economics he was taught at Harvard. It did not correspond to the ecomomics he experienced as head of manufacturing company. Foster in the summer of 1920 wrote to his good friend Ernest Lindley, then newly appointed Chancellor of the University of Kansas, that from what he read people didn't know very much about economics, and what he intended to investigate. By 1922, he published in American Economic Review an account of the circuit flow of money, which included a diagram of moneyCircuit flow of money.pdf flowing in one direction and goods flowing in the opposite direction. The idea was to keep the economy running smoothly by matching consumer income, thus money to spend, with the amount of goods available for sale. The  rate determining step in this process was consumer spending, thus consumer income. It had to be the "right income" -- too much is inflationary, too little causes depression as unsold goods pile up. This single notion provided the basis of just about everything Foster had to say about economics for  the next two decades. [An aside: Foster adapted the Circuit Flow of Money diagram from a statistician, but the diagram was originated, as far as we know, by  amateur economist, Nicolas Johanssen around the turn of the century, who published at least one tract on economics. Johanssen was a German immigrant based in New York. Was there any connection between Foster, or maybe Catchings and Johanssen? Catchings was based in New York in his early career.]

 

Foster and Catchings, with Foster no doubt doing most of the writing, published "Money" in 1923, and "Profits" in 1925. These are well-written books on economics for the layman. "Business Without a Buyer" followed, which was a simplified version combining "Money" and "Profits". The title is ironic, for there is no business without a buyer. Then "The Road to Plenty" (1928), a remarkable book which is in the form of a train ride, with a cast of characters discussing and arguing about economics. Characters include a Lawyer, a Congressman from Kansas (Congressman Strong of Kansas in fact introduced a monetary stabilization bill), a skeptical Economics Professor (anybody in particular? John Commons was an advisor to Rep. Strong),  a Business Man (Catchings), the Gray Man (Foster),  a Semi-Silk Salesman (uninterested in economics, but one who knew there is no business without a buyer).  Ultimately the Business Man presents his 2-part planFoster28Road to Plenty p190-193.pdf, the creation of a government agency to collect economic data, with authority to act by expanding or contracting the money supply and releasing or withholding money for public works projects. The idea was to put the corrent amount of money in the hands of consumers. In their view, given the productivity of Americn industry,  would lead to plenty. Irving Fisher reviewed this book in the Saturday Review of Literature. While sympathetic to the authors, Fisher Fisher28Business Cycle.pdf did not agree with Foster and Catchings'  consumer-centered diagnosis of the problem. The stockpiling of government public works projects would become a feature of the proposed Hoover Plan. The Business Man convinces the Economics Professor,  the Congressman, and the Lawyer. All become "Comrades of the Quest" to spread the word of the Road to Plenty.  

At the turn of the road, just above the railroad station, the Gray Man watched the train as it rushed on through the valley; on and on, the brilliant headlights piercing the gloom, a symbol--so it seemed to him--of the light of learning, revealing the Road to Plenty. Many times before, as he had watched the long and mystic line of lights of a departing train, winding its way into the night, he had felt a thrill.

 

But never such a thrill as now.

 

So concludes the Road to Plenty.

 

In addition to their books Foster and Catchings published extensively in magazines, often material closely related to chapters in their books. From April of 1929 through March of 1931 Foster (Foster and Catchings) wrote a daily economics column of "2-minute talks" for the McClure Syndicate. The Chicago Daily News was among the papers which ran this column.

 

This book attracted the attention in 1928 of those promoting the Presidential asperations of Secretary of Commerce Herbert Hoover, and the gist of the Road to Plenty plan was outlined by Governor Brewster of Maine (a Foster student at Bowdoin) at a National Governors Conference in New Orleans (Hoover himself was touring South America at the time) as the "Hoover Plan".  Foster did his bit by extravagently praising Hoover, and publicized the "Hoover Plan" in articles and his newspaper column in 1929 and early 1930. But as nothing much was actually done by Hoover when his great moment of testing arrived, and Foster became disillusioned with Hoover, as the "Hoover Plan" never materalized.

 

Foster's ideas also attracted the attention of Marriner Eccles, a Utah banker. Foster helped prepare Eccles for his Congressional testimony on what to do about the Depression in 1933. This testimony caught the attention of  FDR who would shortly bring Eccles to Washington and later appoint him as Governor of the Federal Reserve Board.  A reorganization of the Federal Reserve Board gave President Roosevelt the opportunity of appointing all 7 members of the new FRB by February 1, 1936. FDR tentatively nominated Foster, but withdrew the nomination. Foster attributed it to opposition of "reactionary New England bankers", but it may have been more related the political reality faced by FDR, of getting his nominees approved by the Senate Appropiations Committee headed by Carter Glass of Virginia. Glass, a former Secretary of Treasury (appointed by Pres. Wilson)  fancied himself as  father of the Federal Reserve System and an economic expert, but one with very conservative economic views. Glass was willing to go along with the "radical" Eccles only if there were enough safe conservatives to fill out the board. FDR apparently took these appointments the Federal Reserve Board very seriously. A memorandum dated Jan. 16, 1936 (from internal evidence) by none other than Irving Fisher ranked 82 potential candidates in order of preference, 10 Excellent,  7 Very Good, 21 Good,  22 Fair,  3 Poor, and 19 To be avoided. Foster ranked 53th overall, in the "fair" group. Fisher's comments on Foster were: "Former College President, Economist, Writer, Lecturer, Member of Congress [!]. An able popular writer on money." Fisher's tag line on many of the "To be avoided" group was "Too close to orthodox bankers." Foster's age (56) was mentioned, a minus, since Roosevelt didn't want to appoint anyone over 60.

 

Four days later, Fisher wrote Foster. What did he say? I don't know. The letter is in the Irving Fisher collection in the Yale library. Was Fisher touting Foster for Congress? It has to be admitting that some of Foster's speeches of the era read very much like stump political speeches. I'll try to get an example posted here.

 

Irving Fisher was singular individual, a student of J W Gibbs, who became one of the all-time great economists, a man of many interests and talents. Foster shared a number of Fisher's traits and interests. Both Fisher and Foster were high school debaters and presidents of their debate clubs. Both helped to support their Ivy League educations by acting as tutors. Both became teachers, writers and lecturers, and sought to influence public policy by writing for the general public and testifying before Congressional Committees. Both has similar economic views promoting a stable money, although Foster's may have been substantially derived from Fisher's. Both were teetotallers, supported Prohibition, the cause of world peace, and promoted healthy living. Fisher was much more of a health crusader than Foster. Fisher's friend Will Eliot, an honorary Reed trustee, headed the West Coast section of Fisher's health organization. Both Foster and Fisher promoted medical insurance, then opposed by the medical establishment. Fisher also supported Foster's pet cause of simplified spelling.

 

 

Foster Quotes

 

The basic Foster message; repeated many times in various forms. It is quite prescient.

From the column of Jul 22, 1929: The Chicago Daily News

Money Talks

 

Sometimes money talks too fast. It babbles, scolds, raves> Then we have inflation. And again, business depression.

 

Sometimes money sulks. It refuses to give out any statement for publication. To all appearances its vocal cords are paralysed. When money is dumb we have deflation. Once more, business depression.

 

But there is a ray of light. Occasionally money talks intelligently. Then we have prosperity.

 

What it happens to do some of the time it can be taught to do all the time.

 

 

Another sadly prescient Foster column.

From the column of Aug 16, 1929: The Chicago Daily News

How Can Stock Speculation Be Curbed?

 

After all has been said about the far-reaching frenzy of stock speculation--and it is hard to exaggerate--the fact remains that the basis of the present bull market, the longest in history, is confidence in the further sound growth of American business.

 

The confidence is warranted by the facts. Even more plainly now than when the federal reserve board first announced its purpose of curbing stock speculation.

 

The only way to achieve that purpose is to hurt business.

 

 

From the column of Dec 4, 1929: The Chicago Daily News

How Can We Keep Men Employed This Winter?

 

"Postponement of construction during the last few months," the president said, "including not only buildings, railroads, merchant marine and public utilities, but also federal, state and municiple public works, provides a substantial reserve for prompt action."

 

Here, as usual , President Hoover cuts to the heart of the matter. By following his leadership the business of the country, public and private, can sufficiently increase the money in circulation and the flow of money to consumers to prevent a business depression. Ample funds are available. The banking situation is thoroughly sound.

 

"Fortunately," says the president, "the capacity and readiness for cooperation of our business leaders and governmental agencies give assurance of action."

 

Fortunately, too, the leaders in politics as well as the leaders in business know far more than they knew a few years ago about the relation between consumer demand and business prosperity and about the sound ways of sustaining consumer demand.

 

 

From the column of Dec 19, 1929: The Chicago Daily News

Is That All?

 

Let us tear a leaf from the Primer of Economics:

       Question--What makes a higher standard of living?          [AH note: This was the title of the very first Foster-Catchings column, April 1, 1929]

       Answer--Increased consumption of the products of labor.

       Question--Is that all?

       Answer--Yes, that is all.

 

[ digression omitted]

 

Increased consumption is not only all we can think of in connection with a higher material standard of living. There is nothing else to think of.  A larger per capita using-up of commodities and services is a higher standard of living.

      Question--How do we bring that about?

      Answer--By increasing the buying power of consumers as rapidly as we increase the output of goods.

      Question--But if we do that how can business ever be anything but prosperous?

      Answer--It can't.

 

 

And from a column with deals with both economics and education.

January 14, 1930

Are We Economic Illiterates?

 

A majority of our children finish their public school days with little or no education in economics. Most of our colleges make some entrance requirements of doubtful value; but none requires a knowledge of economics.

 

We spend a hundred million dollars a year in attempts to make people write prettily and talk grammatically and spell according to the cherished accidents of time that are fossilized in the big dictionary. But writing, grammar and spelling are not education. They are merely tools of education. What we call "literacy" is no protection against bolshevism or against any other "ism." Economic fallacies gain no validity because they are spoken in good English.

 

Topical notes

 

The Forgotten Man [FDR] , by Amity Shlaes

 

Writing in TCS Daily, Arnold Kling, in a review of a forthcoming book on the great depression (The Forgotten Man, by Amity Shlaes), writes:

 

"There is no doubt that economists and policymakers know more about macroeconomic relationships than they did in the 1930's. Still, I am not convinced that better economic policies in the 1930's had to wait for the Keynesian revolution. I think that it was possible, even then, to have a better understanding of what was happening.

 

It seems to me that economists could have seen that the prosperity of the 1920's was not false. They could have portrayed a return to that level of production as a reasonable goal, not an impossible dream. They could have distinguished between the ups and downs of stock prices in the asset market and the productive capacity in the goods market.

 

It seems to me that economists could have seen, as Irving Fisher saw, that deflation was harmful. They could have understood, as Fisher understood, that curing deflation required expansionary monetary policy -- not an attempt to raise prices by restricting production.

 

The Forgotten Man tells us that the New Deal consisted of a mixture of business-bashing, pain-sharing, and attempted central planning. By today's standards, the results were abysmal. Even relative to what was known at the time, it was shockingly misguided and counterproductive."

--------

 

Some of Roosevelt's advisors, notably his "Freshman brain trust" of Harvard graduates, notably including Lauchlin Currie, did understand the need for an expansionary monetary policy, as of course did Foster. I've acquired The Forgotten Man but haven't yet read it. Foster rates 3 entries in the index of her book. She credits Foster with being an influential economist of the period, and originating the theory of the primacy of consumer spending. The were many more entries to Fisher in the index. FDR wrote "too good to be true" on his copy of Foster-Catchings The Road to Plenty.  Foster's emphasis of maintaining consumer spending was probably counterproductive. Both Hoover and FDR sought to maintain wage levels in a deflationary period, as Foster advised in his newspaper columns in 1929 and 1930. To the extent this policy was effective, it raised the real wages for those lucky enough to be employed, but it must have exacerbated the unemployment problem.

 

Amity Shlaes discussed Roosevelt and the New Deal in the Wall Street Journal. Her book has been favorably reviewed, in the National Review, Foreign Affairs and Commentary magazine.

 

 

The Circular Flow of Money  today

 

The circular flow of money, the subject of Foster's only publication in a professional economics journal, is still a prominent topic in economics education, I'm finding out. This summer (2007), I've been taking a "Macroeconomics" course online at a local junior college. Gradebook grades.pdf (The tuition is $5  if you are 65 or more!) The course is largely on CD produced by the Thinkwell Corporation which set out to tape the best lecturers. Actually the "lectures" tend to be 5 to 10 minute talks on a single topic, usually illustrated by a fictitious example illustrating the point. The Economics lecturer is Steven Tomlinson of the University of Texas. The circular flow of money (money flowing in one direction, goods and services in the opposite direction) was the subject of one lecture and is used frequently thereafter. The material is well-done if not of any great depth, and definitely has a free market orientation . I did take a course in Economics at Reed, I think in my senior year. The textbook was the Samuelson's 4th edition, which I apparently threw away. I remember this as a rather boring course, but taught by an English exchange professor.

 

 

 

 

 

 

 

 

 

 

 

 

 

On Wikipedia

 

Reed Catalog / bibliography

A Book Exchange