II. THE FIRST LIST

Fisher, Frisch, and Roos spent the weekend of June 14–15, 1930, at Irving Fisher’s quarters, close to Yale University, to compile the list of names and draft the June letter. ^{Footnote 12} The list comprised thirty-one names of scholars from ten to twelve countries, mainly scholars well established in academic positions, some retired after long careers.

The list comprised ten Americans: Thomas N. Carver, John B. Clark, John M. Clark, Griffith C. Evans, Mordecai Ezekiel, Irving Fisher, Henry L. Moore, Warren M. Persons, Charles F. Roos, and Henry Schultz.

Henry Moore (b. 1869) was known for impressive pioneering work in confronting theory and data in studies of demand and of business cycles. During visits to Europe, he had attended lectures by Carl Menger and Karl Pearson, and met both Léon Walras and Vilfredo Pareto. Moore had suffered from illness and retired from Columbia University the previous year. John Bates Clark (b. 1849) was the oldest person on the list; he had studied in Germany under Karl Knies of the German historical school, but was nevertheless an outspoken neoclassical economist as professor at Columbia University. Also John B. Clark’s son, John Maurice Clark (b. 1884), was on the list. His intellectual luggage combined his father’s teachings with a strong leaning towards institutionalism. He had “inherited” Clark Sr.’s professorship at Columbia University.

Thomas N. Carver (b. 1865) and Warren M. Persons (b. 1878) were both Harvard men. Persons had been the key analyst when Harvard started its business of economic forecasting in the early 1920s, and the creator of the A-B-C framework it relied upon while Carver was chair of the Department of Economics (Friedman Reference Friedman2009). At a conference at Harvard in 1923, President Abbot L. Lowell commended Persons and his colleagues for their effort in developing economics from an inexact to an exact science. On the same occasion, Carver spoke of the need to conduct national affairs by scientific economic principles, while “two great countries of the world are on the rocks largely because the men in control were illiterates in economics.” ^{Footnote 13} But, by 1930, the glory and the self-adulation of the early 1920s had all gone. ^{Footnote 14}

These older-generation American economists were selected by Fisher (b. 1867); they were hardly the kind of founders of an association for mathematical economics Frisch had been looking for, but he liked and appreciated several of them. The younger Americans included Griffith Evans (b. 1887), a mathematician and mathematical economist at the Rice Institute, Houston, who had been the teacher of Charles Roos (b. 1901) and was well connected also internationally. Henry Schultz (b. 1893), at the University of Chicago, was a broadly oriented economist familiar with most statistical techniques in use for analyzing economic statistics, and specialized in demand analysis of agricultural products. Mordecai Ezekiel (b. 1899), of the Bureau of Agricultural Economics, was a leading name among agricultural economists, and shared with them an institutionalist-oriented education and increasing interest in econometrics.

Wesley Clair Mitchell was not on the list of the recipients of the June letter, although he might well have come out on top in a ranking by American professional economists. An inexplicable omission was Harold Hotelling (b. 1895) from Stanford University. Hotelling had visited Ronald A. Fisher at Rothamsted but was back in the US from the beginning of 1930. Frisch had known Mitchell, Hotelling, and Schultz since 1927.

The second-largest group comprised five Italians: Luigi Amoroso, Corrado Gini, Umberto Ricci, Alfonso de Pietri-Tonelli, and Gustavo del Vecchio. Italy was a strong nation in economics, not least in mathematical economics. Schumpeter observed that Italian economics in 1914 was second to none, and that, “independently of Pareto, Italian economics attained a high level in a variety of lines and in all applied fields” (Schumpeter Reference Schumpeter1954, p. 855). Gini’s (b. 1884) eminence was in demography and statistics applied to economics and social science in general, more than in economic theory. Amoroso (b. 1886) was a leading follower of Pareto, and known for work in mathematical economics, as were the other three men, del Vecchio perhaps less than the others. Italy was under fascist rule, and corporative economics was promoted. Gini in particular had been close to Mussolini in the mid-1920s and deeply involved then with fascist ideology. Amoroso was also involved but that didn’t appear to affect his work. Ricci (b. 1879) and Pietri-Tonelli (b. 1883) were opposed to fascism; Ricci chose exile in Egypt from 1931. Del Vecchio (b. 1883) had also yielded to the pressure of joining the party.

The four from France comprised Clément Colson (b. 1853), François Divisia (b. 1889), Jacques Moret, and Jacques Rueff (b. 1896). Colson had been the teacher of Divisia and Rueff (and also of René Roy) at l’Ecole Polytechnique. Colson was the leading name in mathematical economics in France; his students showed him great reverence. He was, unlike Clark Sr. of nearly the same age, active and far from outdated as a scholar to solicit for advice. Divisia had recently published a significant monograph (Divisia Reference Divisia1928). Jacques Moret was associated with Revue d’économie politique and the author of a well-known book on the use of mathematics in economics (Moret Reference Moret1915). He had translated Irving Fisher’s 1892 dissertation (Fisher Reference Fisher and Moret1917).

Only three names were included from England: Arthur L. Bowley (b. 1869), Arthur C. Pigou (b. 1877), and John Maynard Keynes (b. 1883). Bowley was the type of scholar in background and interests whom Frisch wanted to enlist in the econometric movement. The attempt to involve Pigou was unsuccessful; he did not respond at all. Keynes was an obvious choice on a list of prominent economists, but did not show much interest in the venture.

From Sweden, Gustav Cassel (b. 1866) and Bertil Ohlin (b. 1899) were on the list. Cassel came to economics from mathematics, and became internationally known in the 1920s as a League of Nations economic expert and author of The Theory of Social Economy (1924). Cassel’s long-time rival in Swedish economics, Knut Wicksell, had died in 1926. The younger generation, the Stockholm School, including Ohlin, preferred to build on Wicksell. Cassel’s fame had eclipsed while Wicksell’s name was still on the rise, not yet translated into English. The pompous Cassel, however, wanted nothing to do with econometric ideas. Ohlin had studied at Harvard in the early 1920s, and would join the Econometric Society with some other Stockholm School economists.

Two outstanding scholars on the list were the Berlin professor Ladislaus von Bortkiewicz (b. 1868), who even had corresponded with Walras about mathematical economics, and the brilliant Eugen E. Slutsky (b. 1868) at the Conjuncture Institute in Moscow. ^{Footnote 15}

Vienna was known for both its economists and its mathematicians, although not for mathematical economics, but there was an emerging interest there too. The Austrian School economist Hans Mayer (b. 1879) was the successor of Friedrich von Wieser and influential at the University of Vienna and as editor. ^{Footnote 16} Mayer understood mathematical reasoning, but was not a practitioner.

Also on the list were: from Norway, Ragnar Frisch (b. 1895); from Denmark, Harald Westergaard (b. 1853), a renowned statistician who earlier in his life had engaged in economics; and from Poland, Wladislaw Zawadski (b. 1885), known for a monograph on the use of mathematics in economics (Zawadski Reference Zawadzki1914) in the Paretian tradition.

Last, but not least, Joseph A. Schumpeter (b. 1883), Bonn University, had expressed great interest in the Divisia–Frisch plan, and discussed it with Frisch and Fisher in 1928. No one, not even Schumpeter, knew in 1930 that his future would be in the United States.

The first list comprised several links to the pioneering mathematical economists; some had known Walras, such as Henry Moore and Bortkiewicz, while others had been students of Vilfredo Pareto, Francis Y. Edgeworth, Alfred Marshall, Friedrich Wieser, or Knut Wicksell. But the selection of the names was hardly the first choice for an association for mathematical economics. It can be viewed as having an emphasis also on well-known, highly respected scholars even without mathematical proficiency. The purpose of the list was, after all, to serve as an advisory group. Fisher (and Schumpeter) knew that more than enthusiasm was needed to succeed in an ambitious venture.

III. THE JUNE LETTER AND THE RESPONSES TO IT

Over the weekend, the three instigators prepared the June letter on the organization of an international association and sent it to each person on the list. ^{Footnote 17} (As mentioned above, the responses to the letter quoted in this section are those compiled by Frisch for his digest.) Looked at in retrospect as a document that served to prepare the Econometric Society half a year before the society was founded, it is striking that the term econometric did not appear in it. ^{Footnote 18} It was only obliquely present in the proposed name of the association’s journal as Oekonommetrika. ^{Footnote 19}

The letter was an enquête but a poorly structured one. A number of different questions were posed. Cassel and Pigou did not respond at all. Henry Moore merely stated his regrets that he had to decline to help form the association because of ill health. (The three instigators did not submit their own views.)

The June letter stated the purpose right away: “to ask your opinion as to a project we have been considering, namely the organization of an international association for the advancement of economic theory. … [T]he chief purpose of such an association would be to help in gradually converting economics into a genuine and recognized science.” The letter asked whether such an association was desirable.

The Europeans on the list were all able to follow a formal mathematical argument, even if they were not proficient mathematical economists. With the exception of Keynes, those who responded were overwhelmingly positive. Colson believed “in the utility of the association,” Zawadsky found the proposal “extremely desirable,” Mayer was “delighted that a purely theoretical and disinterested organization in economics will be established,” Ohlin was “in utter sympathy with the ideas and views behind your letter,” and so on. Schumpeter’s response suggested that he read it as a proposal that would be helpful to connect mathematical economists who, after all, were few and far between: “I believe that such an organization could do much to coordinate the efforts of many workers the fruits of which are half lost by their isolation. In fact, that it would meet a want which all of us feel keenly at times.” Keynes’s response was noncommittal and not without a touch of arrogance: “I cannot see what purpose such an association would serve unless it were to publish a journal … I regard the multiplication of associations to be an evil, unless they serve a clear and definite purpose.”

The American responses also embraced the association in laudatory terms. The neoclassical and non-mathematical John B. Clark found the proposal “profoundly interesting.” His son, the institutionalist and non-mathematical John Maurice Clark, seemed less enthusiastic: “I must admit that there is a place for an international organization of persons who are doing serious work in the field of theory.”

The main programmatic massage was presented as simplistic history:

The June letter stated proposed eligibility rules for membership:

The first sentence suggested that the proposed association was not an ordinary membership organization, but more like an academy with new members voted in if they were found eligible.

Expressions such as “thoroughly familiar” and “working knowledge of mathematics” in (a) and (b) were unavoidably open to interpretations. The emphasis on mathematics in (b) called forth reactions from some of the Americans. Requirement (c) on accounting stuck out as something not really belonging on the list. Divisia called it “accessory” in his response.

In addition to the positive requirements, the June letter singled out in an odd paragraph two groups of practitioners not welcomed as members:

Slutsky’s response to the June letter was a single remark related to this exclusion clause: “My name ought to be excluded from the list. … I feel myself at present to be a mathematical statistician more than an economist.” Frisch, who had great admiration for Slutsky, made a mental note to inform Slutsky that there was no problem. ^{Footnote 21}

The June letter’s question about the adequacy of the requirements caused a disparity in the responses between the econometric viewpoint—the Frischian view of a science of economics penetrated by mathematics, as expounded by Colson—and that of the American institutionalists. Colson, the doyen of the French mathematical economists, set out his “conviction of the absolute necessity of a profound familiarity with mathematical formulae and with their application to the experimental sciences in order to really understand the material dependency between economic phenomena.” Contrary views emanated from J. M. Clark: “it seems to me that [the association] should not select its membership by a test of fitness for the mathematical-statistical type of work alone, nor set up a journal committed to giving this type of work dominant place”; and from Persons: “I would prefer … an association … in which the members would be elected but one in which the specific qualifications for membership would not be defined.”

There was undeniably a Europe–US divide in mathematics at this time. Mathematics in the US was underdeveloped in comparison with Europe. The greatest name in American mathematics in the nineteenth century had been Josiah Willard Gibbs, who made important contributions also to physics and chemistry. Gibbs had been the teacher of Irving Fisher (and of Edwin B. Wilson). The sparsity of mathematical economists in the US can be related to the Europe–US gap in mathematics and to the dominating position of institutionalism.

Colson offered viewpoints, both principled and pragmatic, with regard to the delimitation of eligibility for membership:

In France it was the high-level engineering schools that produced the mathematical economists, not the universities. ^{Footnote 22} Thus, Italy, rather than France, had established the strongest tradition in mathematical economics at (some of) the universities.

Henry Schultz commented that the requirements were not given an adequate formulation in the letter, but that he found it difficult to substitute a better one. He added: “It is well to recognize that the fundamental theoretical principles of economics are not very clear and that they do not possess the same heuristic properties of the general principles of mechanics and biology.”

Bortkiewicz made a distinction between “mathematical” and “quantitative”: “It seems to me to be quite legitimate to emphasize the quantitative character of economics. But quantitative is not necessary mathematical.” He cited Marshall’s statement that Ricardo had no mathematical training, “but his instincts were unique; and very few trained mathematicians could tread as safely as he over the most perilous courses of reasoning” (Marshall Reference Marshall1936, app. L, p. 836). Bortkiewicz suggested accordingly broader requirements for eligibility, “something like, a thorough familiarity with theory coupled with the conviction that the quantitative analyses of economic relations are of fundamental importance.” Westergaard expressed a similar view.

Schumpeter had embraced the Divisia–Frisch plan about promoting mathematical economics, while the June letter had given the impression of conflated ideas. He cut through to the core of the June letter:

Schumpeter expressed concern that the requirements in practice might be watered out. Divisia was less worried, and found the requirements for eligibility “quite appropriate. Some people may find that they are too severe, but I think that severity is indispensable in order that the association should not deviate from its object.”

Two other remarks in Schumpeter’s thoughtful response are worth noting: “The right to propose or vote on the eligibility of members should be confined to a small group; else the qualifications will fatally approach zero point before long.” The statement can be read as Schumpeterian elitism but was sound advice in pursuance of the Divisia–Frisch plan. Frisch and Schumpeter saw eye to eye on the issue, and in the early years after the Econometric Society had been founded, they exerted joint efforts to keep the number of elected fellows low.

The other Schumpeter remark was even more important. In his digest, Frisch wrote it down as “Suggests later a 2nd class of members, admitted freely.” It is not crystal clear what Schumpeter actually stated, but a reasonable interpretation is that Schumpeter argued that the proposed association, if it came to anything, ought to allow a second class of members for whom the membership requirements did not apply. He was the only person to suggest anything like this. Schumpeter’s suggestion was shortly afterwards incorporated in the tentative draft constitution Frisch prepared for the organization meeting in December 1930, indicating that this point must have been discussed and agreed among Fisher, Frisch, and Schumpeter in the interim between the June letter responses and the November invitation.

Bowley’s only comment on the eligibility issue was that requirement (b) on mathematics might be dropped and the word “modern” added to requirement (a).

Several reacted to the requirement of knowledge of accounting, suggesting either that it be removed (Evans, Bowley, Westergaard, Divisia, Schumpeter), replaced with a requirement of experience with statistical data (Ezekiel, Amoroso), or possibly merged with another requirement (del Vecchio, Colson). Schumpeter remarked that “emphasizing accounting carries with it—unjustly perhaps—an undesirable flavor of ‘subalternity.’”

The passage in the June letter about eligibility for membership had an additional specific point as to whether experience with statistical data ought to be added as a requirement. This turned out to be quite divisive among those who chose to respond to it. Divisia addressed it as follows: “I am not in favor of adding the condition about experience in handling statistical data. I question very greatly the value of certain statistical methods now in vogue. My objection against them is primarily that they are not animated by the theoretical spirit and I would not like to see them put on the same footing as theory itself.” Frisch was hardly opposed to experience in handling data, but would have agreed with Divisia that this should not be mandatory. Those who supported this requirement were Carver, Ezekiel, and Westergaard, while those who were opposed were Amoroso, Ricci, Divisia, Moret, Schumpeter, and Ohlin.

The June letter’s suggestion of an “international association for advancement of economic theory” was endorsed by Schumpeter as the name for the association. Divisia had thought deeper about the name issue:

His suggestion was for the name to be the International Association for the Advancement of Econometric Studies.

The June letter outlined the contents of the journal of the association (if it were to be) and named it Oekonommetrika (with Economic Theory and Economic Science as alternatives). The outline of the contents left no doubt that it would be a journal wholly devoted to mathematical economics. The journal would be

The major part of the journal would be devoted to mathematical economic contributions, while non-mathematical papers with significant contributions to economic theory or to the numerical verification of economic theory might be accepted.

The invitation to name a journal for which there was no inkling of a financial foundation invited a free run for the fantasy. While Ezekiel outright doubted the desirability of another journal, Ricci found Oekonommetrika as a “rather funny” name for a journal, and suggested a more conventional name, as also did Gini, Pietri-Tonelli, and Bortkiewicz. Amoroso, Schumpeter, and Divisia embraced Oekonommetrika, the latter two with different spelling; Schumpeter wanted, on philological grounds, Oekometrika, while Divisia again had thought deeper about it. He dismissed at the outset the June letter’s two alternative proposals:

Divisia’s revival of the journal name coined in the exchange between him and Frisch in 1926 and his proposal of using econometric also in the name of the association clinched the name issue both for the association and the journal. ^{Footnote 24}

Nothing was mentioned in the June letter about meetings. Ricci brought it up anyway, stating with great foresight from his exile in Egypt that “meetings of members will be in future very useful.”

The June letter sketched the further plan of sending a similar letter to a larger group, and asked for names. Only fifteen responded, mostly by proposing persons from their own country or even closer to themselves. Evans and Mayer took a broader view; both proposed Jan Tinbergen, Wassily Leontief, and members of the New Vienna School ^{Footnote 25} (Ewald Schams, Leo Schönfeld, Paul Rosenstein-Rodan); Mayer proposed also Friedrich Hayek, Gottfried von Haberler, Oskar Morgenstern, and Hans Staehle; and Evans threw in American heavyweights Edwin Bidwell Wilson and Harold Hotelling. Costantino Bresciani-Turroni was proposed by no less than four. Schumpeter proposed his Bonn colleague Erwin von Beckerath and two younger economists in Germany: Erich Schneider and Jacob Marschak.

The June letter asked explicitly if the respondents considered themselves eligible for membership according to the conditions stated. Schultz answered with hidden irony that “with lenient judges I might just squeeze through.” John Maurice Clark seemed very interested in becoming member of the association, despite being “reluctant to lend support to the complete capturing of ‘theory’ by the mathematical-quantitative method.” ^{Footnote 26}

While editing the responses into the digest, Frisch noted that some of the responses were of much greater interest than others, and remarked in the digest that there was a group of eleven persons who could be taken as a “nucleus giving advice on the next move to be made.” The group comprised, in addition to the instigators—Fisher, Frisch, and Roos—eight others, chosen from their responses: Amoroso, Bortkiewicz, Bowley, Colson, Divisia, Ricci, Schumpeter, and Zawadski.

The June letter was not very explicit about the further path towards founding an association. There was mention in one passage of charter members with “undoubted qualifications” without further clarification. The implied meaning here was that a suitable number of charter members would have to be signed up before the founding of an association. The charter members would be the founding members. But this is not what happened, as will be apparent in the next section.

IV. THE ORGANIZATION MEETING OF THE ECONOMETRIC SOCIETY

The invitation to found the Econometric Society, also signed by Fisher, Frisch, and Roos, was sent to a list of eighty-three names. ^{Footnote 27} There is little direct evidence of what happened among the key instigators between the completion of Frisch’s digest on October 21, 1930, and November 29, when the invitations to the organization meeting were dispatched. But the documents reveal significant differences between the outline of the association in the June letter and the proposed Econometric Society in the tentative constitution attached with the November invitation. ^{Footnote 28}

These differences, and indeed the decision to have an organization meeting, which was not mentioned as a possibility in the June letter, are likely to be the outcome of exchanges among Frisch, Schumpeter, and Fisher, some of which may have taken place at a weekend in New Haven, as foreshadowed in a letter to Frisch from Schumpeter, sent from the Norddeutscher Lloyd steamship Karlsruhe:

Schumpeter had been enthusiastic about the Divisia–Frisch plan since 1928, but had so far taken little part in furthering it, beyond the “pleasant talks” at Harvard (Bjerkholt and Qin Reference Bjerkholt, Qin, Bjerkholt and Qin2010, p. 5). The “more efficient ally” was, of course, Fisher. But now Schumpeter’s time had come. He played a major role in the change of direction and pace after the June letter up to his masterly chairmanship of the organization meeting at the end of the year.

The November invitation briefly explained that the responses to the June letter were so encouraging that it seemed desirable to move directly to the formation of the society, dropping the solicitation of the second list. This is totally unconvincing, an argument made up to explain the shortcutting of the original plan by proceeding to the founding without further solicitations and the signing up of charter members. The real reason is likely to have been that both Frisch and Schumpeter would soon leave the US and no one knew when they both could be with Fisher in the US again.

The November invitation was about founding a “society,” not an “association,” as in the June letter. This is only a tiny detail in the overall picture; the change of term was not noted. It may well have been Schumpeter’s suggestion. The November invitation did not introduce “Econometric Society” as the name for the society to be founded. Instead, it had a wonderful passage that argued that the name of the society ought to “indicate quite clearly the specific object which the society has in view,” and that if the society was formed with a scope as suggested, “it seems advisable to coin a word, since no single word will connect exactly the idea. … [W]e have been unable to find a better word than econometrics.” The draft constitution attached with the November invitation used, however, “Econometric Society” as if the name already had been adopted.

A crucial change from June to November was the reformulation of the scope of the society from “advancement of economic theory” to “advancement of theory in its relation to statistics and mathematics.” This was the magic formula! It is indeed strange that Frisch went along with the bland formulation of the June letter. The November reformulation certainly conveyed more of the spirit of the original Frisch 1926 definition and in an improved version. ^{Footnote 30}

The November invitation letter did not contain anything else that was new, relative to the June letter; the changes were all in the draft constitution. As pointed out in section III, an important change was due to Schumpeter’s somewhat cryptic response remark of “2nd class of members.” The draft constitution introduced a two-tier society with “regular members” and “fellows,” an idea completely absent in the June letter. Scrutiny reveals that the eligibility requirements for membership in the association in the June letter were practically identical with the eligibility requirements for fellowship in the draft constitution. The November constitution, however, allowed regular members in addition to fellows. All power was vested in the fellows; the regular members had no say in the society’s affairs. Still, the addition of regular members was a key to the society’s success.

From Schumpeter’s point of view, this was a way of preserving the purity of the scope of the society. Interest in becoming a member of a (closed) society with membership decided by majority vote would, in his view, unavoidably lead to watering out of the requirements. With the two-tier construction in the tentative constitution and appropriate rules for fellowship elections, a defense line could be established. Fisher and Frisch seem to have become convinced of the sensibility in Schumpeter’s view, and Frisch drafted the constitution accordingly.

The venue for the organization meeting was specified in the invitation to coincide with the joint annual meetings of the American Economic Association, American Statistical Association (ASA), the American Mathematical Society (AMS), and sections A and K of the American Association for the Advancement of Science (AAAS), and the time was set to December 29, 1930. On that day sixteen persons, no more, no less, turned up at Hotel Statler in Cleveland for the organization meeting, which was called to order at 8:00 p.m. It was a low-key event, hardly announced at all apart from the invitations, fitted unobtrusively into a vacant room.

Of the eighty-three persons on the invitation list, including the three instigators, forty-eight resided in Europe, thirty-two in the US (including some visiting Europeans), one in China, one in Japan, and one in Brazil. It was not surprising that no one came to Cleveland from overseas expressly for the meeting. The invitation guardedly expressed the hope that “the formal enactment of the society will, in all probability, take place”!

Sixteen persons may seem a poor turnout from a list of eighty-three, even when admitting that those who lived in Europe or even further away would probably not have considered crossing the ocean to be present. The turnout was, in fact, worse than the crude numbers indicated, as scrutiny reveals that only ten of the sixteen were on the invitation list: Ragnar Frisch, Harold Hotelling, William F. Ogburn, J. Harvey Rogers, Charles F. Roos, Josef Schumpeter, Henry Schultz, Walter A. Shewhart, Ingvar Wedervang, and Edwin B. Wilson. The other six were three excellent mathematicians—Karl Menger, Oystein Ore, and Norbert Wiener—attending the AMS meeting, and three prominent members of ASA, Frederick C. Mills, Malcolm C. Rorty, and Carl Snyder.

We can tentatively reconstruct how it happened that the non-invited six came to attend the organization meeting. On December 28, the American Mathematical Society held an afternoon session, jointly with the ASA, whose meeting had opened the same day, and also with sections A and K of the AAAS.

The joint session took place in Hotel Statler. The three speakers were Griffith C. Evans, on a theory of economic crisis with Henry Schultz as discussant; Ragnar Frisch, on decomposing empirical time series with Oystein Ore as discussant; and Harold Hotelling, on recent improvements in statistical inference with Walter Shewhart as discussant. All three speakers with discussants reappeared at the organization meeting a couple of hours later. Ore was professor in mathematics at Yale, specially invited to give a lecture at the AMS meeting, and a friend of Frisch from student days in Oslo. Karl Menger, who visited the US in 1930–31 on a Rockefeller fellowship, was, like Ore, also in Cleveland, invited to give a lecture at the AMS meeting.

Norbert Wiener took part in the AMS meeting, as did also Frisch and Roos. Malcolm Rorty was the current president of the ASA and naturally was present at the joint session. Carl Snyder was a former president, while Fisher, Ogburn, and Mills were the next three presidents of the ASA. Edwin B. Wilson of Harvard, who was the ASA president in the preceding year, had been a student of Josiah W. Gibbs, and indeed gave the Eighth Gibbs Lecture in Cleveland on December 30.

Thus, it seems that most, if not all, of those attending the organization meeting in the late evening of December 29 had good reasons for attending the joint session and the mingling of people after it ended, just a couple of hours before the organization meeting in the same building. Even with the six “uninvited” persons, the organization meeting wasn’t exactly crowded. Only a few of the approximately thirty-plus American residents on the invitation list came to the organization meeting.

That the small organization meeting of sixteen persons comprised five of the ASA presidents from 1928 to 1934 (six if Fisher is included) might, to a casual observer, suggest that the Econometric Society was a “child” of the ASA. But the amassment of past, current, and future ASA presidents at the founding of the Econometric Society was rather due to the difficulties in finding Americans interested in the scope of the society, and, perhaps even more, that the professional friends Fisher still retained were not least to be found among the leading members of the ASA.

It is not unusual to come across summary accounts of the foundation of the Econometric Society denoting the sixteen persons present at the organization meeting as the bold “founding fathers” of the society, or speaking of the organization meeting itself in solemn terms as the “inaugural conference of the Society” (Louҫã Reference Louҫã2007, p. 31). Such characterizations are somewhat misleading. But what were the sixteen persons gathered in the meeting room at the Statler Hotel the night of December 29, 1930, if they were not founding fathers? The report from the meeting published in Econometrica in its first issue in 1933 called them simply the “organizing group.”

According to the report from the organization meeting (Econometrica 1: 71–72), Frisch had circulated a draft of a tentative constitution “based on ideas which had been obtained in an extensive correspondence carried on by himself, Professor Fisher, and Professor Roos, with economists and statisticians throughout the world.” Schumpeter was elected chairman of the meeting and Roos as recorder. The report further conveyed that all those present took an active part in the discussion and revision of the draft constitution, although no discussion details were given. This part of the proceedings lasted for most of the first two hours of the meeting before a revised constitution was voted upon. Schumpeter’s motion that the society should be considered founded was then accepted unanimously.

The election of the president (Irving Fisher) and the council members took another thirty to forty-five minutes. Then the first meeting of the Econometric Society was adjourned. The report was not explicit about any controversy at the meeting, neither on the constitution nor on the elections. ^{Footnote 31}

The council (which was an executive committee, not an advisory council) elected at the meeting in 1930 comprised the following ten members from eight different countries: ^{Footnote 32}

• Irving Fisher, Yale University

• Luigi Amoroso, University of Rome

• L. v. Bortkiewicz, University of Berlin

• A. L. Bowley, London School of Economics

• François Divisia, Ecole Nationale des Pont et Chaussées, Paris

• Ragnar Frisch, University of Oslo

• Charles F. Roos, Smithsonian Institution Building, Washington

• Josef Schumpeter, University of Bonn ^{Footnote 33}

• E. B. Wilson, Harvard University

• Wl. Zawadski, University of Wilno

The list differed little from Frisch’s “nucleus” list (see end of section III): Colson and Ricci were dropped and Wilson was added. Frisch was, at the end of the day, uncertain whether Wilson had been duly elected, as Wilson left before the election was finished (see section V).

The meeting made no changes in the draft subtitle of the Econometric Society—An International Society for the Advancement of Economic Theory in its Relation to Statistics and Mathematics—which ever since has been rendered on the front cover of Econometrica.

The first part of the constitution, on the Scope of the Society, underwent only minor linguistic improvements. But it was discussed, at least its key sentence: “Its main object shall be to promote studies that aim at a unification of the theoretical-quantitative and the empirical-quantitative approach to economic problems and that are penetrated by constructive and rigorous thinking similar to that which has come to dominate in the natural sciences.” Frisch later gave Divisia the following account:

The second part of the constitution, on Members, was discussed at some length. The adopted text was as follows:

The rules for regular membership were cumbersome. A new member had first to be proposed by two members; then the council had to approve the proposal by nominating the person for membership; and finally the vote would be effectuated in a vote by mail of all members! The vote by members was interpreted at the outset as implying unanimity in all votes cast. The constitution had a requirement for regular members—“A person nominated must have sufficient knowledge of economics to be able to appreciate the work of the Society”—but it was deleted at the meeting. The adopted rules for regular membership, instead of the “admitted freely” proposed by Schumpeter, turned out in practice to cause embarrassment when a member attempted to block specific new entrants. ^{Footnote 35}

The rigid rules for election of regular members can perhaps be understood as a need to protect the society from being co-opted or highly unbalanced in national composition. Some may outright have been attracted by the exclusivity of the society, implied by the power of members to block others from entering. Schumpeter’s clear-sightedness gave the society the two-tiered membership that allowed active recruitment and stability.

The idea of Charter membership was retained, only to be granted during 1931. No rationale was given for why the charter membership was introduced or what eligibility for charter membership meant. Maybe the whole idea of charter members had not been sufficiently thought through.

Fellowship in the Econometric Society meant much more than a distinction bestowed on deserved members. All power was vested in the fellows, while regular members had no say. The tentative constitution dealt with election of fellows at some length, and was clearly influenced by the June letter responses:

The requirements for fellowship gave a somewhat bland impression of what was required to become a fellow, adding up acquired skills like Boy Scouts do. The exception clause was not unproblematic, either, and bore the mark of being a compromise. The organization meeting decided in the end on a much simpler and flexible formulation of the requirements. To be eligible for nomination for fellowship, a person “must have published original contributions to economic theory or to such statistical, mathematical or accounting analyses as have a definite bearing on problems in economic theory.”

The fellowship elections were important and essential in the life of the society, as the meeting of fellows was the highest authority within the society. The number of fellows to be elected, the frequency of elections, or the voting procedure were not touched upon in the constitution. It could be argued from the constitutional importance of the fellows that the society would not be in proper constitutional order until fellows had been elected. That turned out to take almost three years, partly because the charter member issue intervened. The delay did not cause any serious detriment to the society (but a lot of worries for the president and the council members). The delay meant that the council members elected for three years at the organization meeting had their mandates renewed in 1933 for another three years by council decision instead of an election of council by fellows.

V. AFTERMATH

The preparation of the establishment of the Econometric Society can be viewed as having started in 1926 with what has been denoted as the Divisia–Frisch plan in this paper, and brought to fulfilment at the very end of 1930 in the low-key founding of the Econometric Society. It was not a particularly coherent process. The number of key instigators was small. No existing association or institution exerted any influence on the process or on the end result. It was a remarkable achievement. The effort of creating an international association in economics took place decades before the “internationalization” in economics and while “national schools” in economics still dominated the scene in many countries.

The solicitation of advice on how to advance the venture of founding an econometric association initiated by Irving Fisher, Ragnar Frisch, and Charles Roos through the June letter of 1930, sent to a list of thirty-one names as set out above, resulted in responses that give a picture of the situation at the time. The June letter could have been better structured and the set of respondents better chosen. After the responses to the June letter had been returned, a redirection of the overall project led to the foundation of the Econometric Society at an organization meeting arranged at short notice, bypassing (or rather postponing) the building up of a constituency of charter members.

The effort of founding an international econometric society around 1930 may be deemed as a venture with a considerable risk of falling by the wayside. The venture could not have succeeded without exceptional efforts by a small handful of dedicated and gifted men. But even so, it might not have succeeded without continued efforts and dedication, luck and Alfred Cowles (Bjerkholt Reference Bjerkholt2013, Reference Bjerkholt2015b).

After the organization meeting, the sixteen attendees scattered. There was no immediate action in the newborn society. Fisher was taken ill and did not assume the responsibilities as president until March. Schumpeter and Frisch spent the day after the meeting together, before Schumpeter left for California and Frisch went back to Yale, where he finished up the manuscript for his marginal utility book (Frisch Reference Frisch1932). The very last piece of work he did before leaving Yale on March 1, 1931, was to type a four-page, densely written memo “regarding steps to be taken in the organization of the Econometric Society,” written in the style of instructions to Fisher about what should be done (Frisch Reference Frisch1931). Some points in the memo clarify issues touched upon in the article. Fisher, who had not been present at the organization meeting, was ill for about three months after the meeting.

Frisch advised that the first thing Fisher ought to do was to write a circular letter—Frisch included details about what it ought to contain—to those on the “final list,” by which Frisch meant the list of those who had received an invitation to the organization meeting. ^{Footnote 36} Frisch made it clear that the final list should not be confused with the “First List” or “Second List.” ^{Footnote 37} Frisch impressed on Fisher that a “footnote should be added to the letter to Slutsky (who wrote that he did not think himself eligible), stating that there is now no such rigorous condition for membership as originally planned, so he would be very welcome in case he wants to join, which I.F. hopes he will.” But Slutsky had a more existential reason for eluding membership. He had reason to fear for his survival; some of his colleagues, including Nikolai D. Kondratiev, had been arrested. Slutsky was high up on the list of those Frisch particularly wanted to have as members of the society.

Frisch then advised Fisher to write a letter to the elected council members, informing them officially about their election and expressing hope that they would accept. Frisch suggested that “a special and personal inducement from I.F. to E.B. Wilson should be made. Wilson was a little hesitant when R.F. asked him personally at the meeting if he would become a member of the Council. Wilson had to leave the meeting before the Council Members were elected, so he is not yet informed of his election.” But Frisch had nothing to worry about: Wilson accepted and so did all the others. Thus, at the outset, there were seven council members from Europe and three from the US.

An intriguing point in the memo is the advice on how to deal with Bortkiewicz: “To Bortkiewicz it should be stated that the Society is not uniquely devoted to Mathematical Economics as he seems to believe. (See his last letter.) However, he ought to read the Constitution and only accept the election to the Council provided he agrees with the program therein explained.” Bortkiewicz had come to the conclusion that the society as founded did not have the same “devotion to mathematical economics” as the Divisia–Frisch plan. Even if Frisch might have agreed with Bortkiewicz on the facts, there was no turning back on the foundations laid by the agreement among Fisher, Schumpeter, and Frisch.

The memo had a large number of instructions for Fisher to pursue, including the election of secretary and treasurer, and the decision about membership dues. For the office of vice-president, the instruction was to propose Divisia and get him elected “with the special duty of taking care of matters of special interest to the Europeans … with power of … arranging a European meeting of the Society as soon as possible.” A similar instruction to Fisher was to propose “that the President of the Society be given the authority to make arrangement for a meeting of the Econometric Society” in the US in December 1931. Hence, both the European and the American meetings have their origin in Frisch’s memo on “steps to be taken.”

The charter membership meant that it took an unreasonably long time for the society to bring its house into proper constitutional order after it was founded. The council members initiated proposals for charter members, supposed to be very well-qualified members. In practice, two (or more) council members proposed each charter member. Then it required a vote by the council to approve the membership. During 1931, 173 charter members were approved. Thus, only from 1932 could regular members be accepted.

It further delayed the first election of fellows. Eligibility for fellowship required one year’s membership; thus, no election of fellows could take place until the end of 1931. It was argued and accepted, though, that the first election of fellows ought to be open also for regular members; hence, no election could take place until the end of 1932, when the first election was indeed initiated, to be completed in August 1933. Thus, the fellows, “the highest authority of the Society,” did not appear until close to three years after the founding.

Schumpeter wrote to Frisch from the Palace Hotel, San Francisco, before he boarded a ship for Japan. He suggested it was time to put the formalities aside:

SUPPLEMENTARY MATERIAL

To view supplementary material for this article, please visit https://doi.org/10.1017/S105383721600002X.