Schaum's Outline of Mathematical

Methods for Business, Economics and

Finance, Second Edition (Schaum's
Outlines) Luis Moises Pena-Levano
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 Preface

Students of undergraduate business, finance, and economics, as well as candidates for the MBA and
MA degrees in economics today need a variety of mathematical skills to successfully complete their degree
requirements and compete effectively in their chosen careers. Unfortunately, the requisite mathematical
competence is not the subject of a single course in mathematics such as Calculus I or Linear Algebra I, and
many students, pressed with the demands from business and economics courses, do not have space in their
schedules for a series of math courses. Mathematical Methods for Business, Economics, and Finance,
Second Edition is designed to cull the mathematical tools, topics, and techniques essential for success in
business and economics today. It is suitable for a one- or two-semester course in business mathematics,
depending on the previous background of the students. It can also be used profitably in an introductory
calculus or linear algebra course by professors and students interested in business connections and
applications.
The theory-and-solved-problem format of each chapter provides concise explanations illustrated by
examples, plus numerous problems with fully worked-out solutions. No mathematical proficiency beyond
the high-school level is assumed. The learning-by-doing pedagogy will enable students to progress at their
own rate and adapt the book to their own needs.
Mathematical Methods for Business, Economics, and Finance, Second Edition can be used by itself or
as a supplement to other texts for undergraduate and graduate students in business and economics. It is
largely self-contained. Starting with a basic review of high-school algebra in Chapter 1, the book
consistently explains all the concepts and techniques needed for the material in subsequent chapters.
This edition introduces one new chapter on sequences and series, and two sections on computing linear
programming and series using Microsoft Excel. The end of book also presents a new section of problems
called Additional Practice Problems, which provides a template that can be used to test students’ knowledge
on each chapter, with solutions in the subsequent pages (called ‘Solution to Practice Problems’).
This book contains over 1,200 problems, all of them solved in considerable detail. To derive the most
from the book, students should strive as soon as possible to work independently of the solutions. This can
be done by solving problems on individual sheets of paper with the book closed. If difficulties arise, the
solution can then be checked in the book.
For best results, students should never be satisfied with passive knowledge—the capacity merely to
follow or comprehend the various steps presented in the book. Mastery of the subject and doing well on
exams require active knowledge—the ability to solve any problem, in any order, without the aid of the
book.
Experience has proved that students of very different backgrounds and abilities can be successful in
handling the subject matter of this text when the material is presented in the current format.
I wish to express my gratitude to father Alberto, my mother Betty, my sister Mirella, and my brother
Willy, for raising me to be the man I am today. I also want to thank Ernesto, Mario, Daniele, Shaheer,
Jared, Jose, Víctor, Hugo, Edward, Irvin, and Andres, my 11 best friends who are part of my family and
have encouraged me and helped me improve my skills and abilities over these last 15 years. I would also
like to dedicate this book to my goddaughters Briggitte, Ashley, and Valentina, my nephew Fitzgerald, and
my godson Adrian, who I envision to be the future of the upcoming generations.

LUIS MOISÉS PEÑA LÉVANO

 Contents

Chapter 1 REVIEW
1.1 Exponents
1.2 Polynomials
1.3 Factoring
1.4 Fractions
1.5 Radicals
1.6 Order of Mathematical Operations
1.7 Use of a Pocket Calcular

Chapter 2 EQUATIONS AND GRAPHS

2.1 Equations
2.2 Cartesian Coordinate System
2.3 Linear Equations and Graphs
2.4 Slopes
2.5 Intercepts
2.6 The Slope-Intercept Form
2.7 Determining the Equation of a Straight-Line
2.8 Applications of Linear Equations in Business and Economics

Chapter 3 FUNCTIONS
3.1 Concepts and Definitions
3.2 Graphing Functions
3.3 The Algebra of Functions
3.4 Applications of Linear Functions for Business and Economics
3.5 Solving Quardratic Equations
3.6 Facilitating Nonlinear Graphing
3.7 Applications of Nonlinear Functions in Business and Economics

Chapter 4 SYSTEM OF EQUATIONS

4.1 Introduction
4.2 Graphical Solutions
4.3 Supply-and-Demand Analysis
4.4 Break-Even Analysis
4.5 Elimination and Substitution Methods
4.6 Income Determination Models
4.7 IS-LM Analysis
4.8 Economic and Mathematical Modeling (Optional)
4.9 Implicit Functions and Inverse Functions (Optional)

Chapter 5 LINEAR (OR MATRIX) ALGEBRA

5.1 Introduction
5.2 Definitions and Terms
5.3 Addition and Subtraction of Matrices
 5.4 Scalar Multiplication
5.5 Vector Multiplication
5.6 Multiplication of Matrices
5.7 Matrix Expression of a System of Linear Equations
5.8 Augmented Matrix
5.9 Row Operations
5.10 Gaussian Method of Solving Linear Equations

Chapter 6 SOLVING LINEAR EQUATIONS WITH MATRIX ALGEBRA

6.1 Determinants and Linear Independence
6.2 Third-Order Determinants
6.3 Cramer’s Rule for Solving Linear Equations
6.4 Inverse Matrices
6.5 Gaussian Method of Finding an Inverse Matrix
6.6 Solving Linear Equations with an Inverse Matrix
6.7 Business and Economic Applications
6.8 Special Determinants

Chapter 7 LINEAR PROGRAMMING: USING GRAPHS

7.1 Use of Graphs
7.2 Maximization Using Graphs
7.3 The Extreme-Point Theorem
7.4 Minimization Using Graphs
7.5 Slack and Surplus Variables
7.6 The Basis Theorem

Chapter 8 LINEAR PROGRAMMING: THE SIMPLEX ALGORITHM

AND THE DUAL
8.1 The Simplex Algorithm
8.2 Maximization
8.3 Marginal Value or Shadow Pricing
8.4 Minimization
8.5 The Dual
8.6 Rules of Transformation to Obtain the Dual
8.7 The Dual Theorems
8.8 Shadow Prices in the Dual
8.9 Integer Programming .
8.10 Zero-One Programming

Chapter 9 DIFFERENTIAL CALCULUS: THE DERIVATIVE AND THE

RULES OF DIFFERENTIATION
9.1 Limits
9.2 Continuity
9.3 The Slope of a Curvilinear Function
9.4 The Derivative
9.5 Differentiability and Continuity
9.6 Derivative Notation
9.7 Rules of Differentiation
9.8 Higher-Order Derivatives
 9.9 Implicit Functions

Chapter 10 DIFFERENTIAL CALCULUS: USES OF THE DERIVATIVE

10.1 Increasing and Decreasing Functions
10.2 Concavity and Convexity
10.3 Relative Extrema
10.4 Inflection Points
10.5 Curve Sketching
10.6 Optimization of Functions
10.7 The Successive-Derivative Test
10.8 Marginal Concepts in Economics
10.9 Optimizing Economic Functions for Business
10.10 Relationships Among Total, Marginal, and Average Functions

Chapter 11 EXPONENTIAL AND LOGARITHMIC FUNCTIONS

11.1 Exponential Functions
11.2 Logarithmic Functions
11.3 Properties of Exponents and Logarithms
11.4 Natural Exponential and Logarithmic Functions
11.5 Solving Natural Exponential and Logarithmic Functions
11.6 Logarithmic Transformation of Nonlinear Functions
11.7 Derivatives of Natural Exponential and Logarithmic Functions
11.8 Interest Compounding
11.9 Estimating Growth Rates from Data Points

Chapter 12 INTEGRAL CALCULUS

12.1 Integration
12.2 Rules for Indefinite Integrals
12.3 Area Under a Curve
12.4 The Definite Integral
12.5 The Fundamental Theorem of Calculus
12.6 Properties of Definite Integrals
12.7 Area Between Curves
12.8 Integration by Substitution
12.9 Integration by Parts
12.10 Present Value of a Cash Flow
12.11 Consumers’ and Producers’ Surplus

Chapter 13 CALCULUS OF MULTIVARIABLE FUNCTIONS

13.1 Functions of Several Independent Variables
13.2 Partial Derivatives
13.3 Rules of Partial Differentiation
13.4 Second-Order Partial Derivatives
13.5 Optimization of Multivariable Functions
13.6 Constrained Optimization with Lagrange Multipliers
13.7 Income Determination Multipliers
13.8 Optimizing Multivariable Functions in Business and Economics
13.9 Constrained Optimization of Multivariable Economic Functions
13.10 Constrained Optimization of Cobb-Douglas Production Functions
 13.11 Implicit and Inverse Function Rules (Optional)

Chapter 14 SEQUENCES AND SERIES

14.1 Sequences
14.2 Representation of Elements
14.3 Series and Summations
14.4 Property of Summations
14.5 Special Formulas of Summations
14.6 Economics Applications: Mean and Variance
14.7 Infinite Series
14.8 Finance Applications: Net Present Value

EXCEL PRACTICE A

EXCEL PRACTICE B

ADDITIONAL PRACTICE PROBLEMS

ADDITIONAL PRACTICE PROBLEMS: SOLUTIONS

INDEX
 Chapter 1

Review

1.1 EXPONENTS
Given a positive integer n, xn signifies that x is multiplied by itself n number of times. Here x is referred
to as the base; n is called an exponent. By convention an exponent of one is not expressed: x(1) = x, 8(1) = 8.
By definition any nonzero number or variable raised to the zero power is equal to 1: x0 = 1, 30 = 1, and 00 is
undefined. Assuming a and b are positive integers and x and y are real numbers for which the following
exist, the rules of exponents are presented below, illustrated in Examples 1 and 2, and treated in Problems
1.1, 1.24, 1.26, and 1.27.
1. xa · xb = xa+b

2.

3. (xa)b = xab
4. (xy)a = xa ya

5.

6.

7.
8.
9.

EXAMPLE 1. In multiplication, exponents of the same variable are added; in division, exponents of the
same variable are subtracted; when raised to a power, the exponents of a variable are multiplied, as
indicated by the rules above and shown in the examples below followed by illustrations.
 Since and from Rule 1 exponents of a common base are added in multiplication,
the exponent of , when added to itself, must equal 1. With , the exponent of
must equal . Thus,

See Problems 1.1, 1.24, 1.26, and 1.27.

EXAMPLE 2. From Rule 2, it can easily be seen why any variable or nonzero number raised to the zero
power equals one. For example, x3/x3 = x3–3 = x0 = 1; 85/85 = 85−5 = 80 = 1.

1.2 POLYNOMIALS
Given an expression such as 9x5, x is called a variable because it can assume any number of different
values, and 9 is referred to as the coefficient of x. Expressions consisting simply of a real number or of a
coefficient times one or more variables raised to the power of a positive integer are called monomials.
Monomials can be added or subtracted to form polynomials. Each monomial constituting a polynomial is
called a term. Terms that have the same variables and respective exponents are called like terms. The degree
of a monomial is the sum of the exponents of its variables. The degree of a polynomial is the degree of its
highest term. Rules for adding, subtracting, multiplying, and dividing polynomials are explained below,
illustrated in Examples 3 to 5, and treated in Problems 1.3 and 1.4.

1.2.1 Addition and Subtraction of Polynomials

Like terms in polynomials can be added or subtracted by adding or subtracting their coefficients. Unlike
terms cannot be so added or subtracted.
EXAMPLE 3.
(a) 6x3 + 15x3 = 21x3
(b) 18xy – 7xy = 11xy
(c) (4x3 + 13x2 − 7x) + (11x3 − 8x2 − 9x) = 15x3 + 5x2 − 16x
(d) (22x – 19y) + (7x + 6z) = 29x − 19y + 6z
 See also Problem 1.3.

1.2.2 Multiplication and Division of Terms

Like and unlike terms can be multiplied or divided by multiplying or dividing both the coefficients and
variables.
EXAMPLE 4.
(a) 20x4 · 7y6 = 140x6y6
(b) 6x2y3 · 8x4y6 = 48x6y9
(c) 12x3y2 · 5y4z5 = 60x3y6z5
(d) 3x3y2z5 · 15x4y3z4 = 45x7y5z9

(e)

(f)

1.2.3 Multiplication of Polynomials

To multiply two polynomials, multiply each term in the first polynomial by each term in the second
polynomial and then add their products together.
EXAMPLE 5.

See also Problem 1.4.

1.3 FACTORING
Factoring reverses the process of polynomial multiplication in order to express a given polynomial as a
product of simpler polynomials called factors. A monomial such as the number 14 is easily factored by
expressing it as a product of its integer factors 1 · 14, 2 · 7, (−1) · (−14), or (−2) · (−7). A binomial such as
5x4 − 45x3 is easily factored by dividing or factoring out the greatest common factor, here 5x3, to obtain
5x3(x − 9). Factoring a trinomial such as mx2 + nx + p, however, generally requires the following rules:

1. Given (mx2 + nx + p), the factors are (ax + c)(bx + d), where (1) ab = m; (2) cd = p; and (3) ad + be
= n.
2. Given (mx2 + nxy + py2), the factors are (ax + cy)(bx + dy), where (1) ab = m; (2) cd = p; and (3) ad
+ bc = n, exactly as above. For proof of these rules, see Problems 1.28 and 1.29.
EXAMPLE 6. To factor (x2 + 11x + 24), where in terms of Rule 1 (above) m = 1, n = 11, and p = 24, we
seek integer factors such that:
1) a · b = 1. Integer factors: 1 · 1, (−1) · (−1). For simplicity we shall consider only positive sets of
integer factors here and in step 2.
2) c · d = 24. Integer factors: 1 · 24, 2 · 12, 3 · 8, 4 · 6, 6 · 4, 8 · 3, 12 · 2, 24 · 1.
3) ad + bc = 11. With a = b = 1, c + d must equal 11.
 Adding the different combinations of factors from step 2, we have 1 +24 = 25, 2+ 12 = 14, 3 + 8 = 11,4
+ 6 = 10, 6 + 4 = 10, 8 + 3 = 11, 12 + 2 = 14, and 21 + 1 = 25. Since only 3 + 8 and 8 + 3 = 11 in step 3, 3
and 8 are the only candidates for c and d from step 2 which, when used with a = b = 1 from step 1, fulfill
all the above requirements, and the order does not matter. Hence

See Problems 1.5 to 1.13. For derivation of the rules, see Problems 1.28 and 1.29.

1.4 FRACTIONS
Fractions, or rational numbers, consist of polynomials in both numerator and denominator, assuming
always that the denominator does not equal zero. Reducing a fraction to lowest terms involves the
cancellation of all common factors from both the numerator and the denominator. Raising a fraction to
higher terms means multiplying the numerator and denominator by the same nonzero polynomial.
Assuming that A, B, C, and D are polynomials and C and D ≠ 0, fractions are governed by the following
rules:

1.

2.

3.

4.

5.

The properties of fractions are illustrated in Example 7 and treated in Problems 1.14 to 1.21.
EXAMPLE 7.
(a) Multiplying or dividing both the numerator and the denominator of a fraction by the same nonzero
number or polynomial leaves the value of the fraction unchanged.

Rule 1 provides the basis for reducing a fraction to its lowest terms as well as for raising a fraction
to higher terms.
(b) To multiply fractions, simply multiply the numerators and the denominators separately. The
product of the numerators then forms the numerator of the product and the product of the
denominators forms the denominator of the product.

(c) To divide fractions, simply invert the divisor and multiply.

(d) Fractions can be added or subtracted only if they have exactly the same denominator, called a
 common denominator. If a common denominator is present, simply add or subtract the numerators
and set the result over the common denominator. Remember always to subtract all the terms within
a given set of parentheses.

(e) To add or subtract fractions with different denominators, a common denominator must first be
found. Multiplication of one denominator by the other will always produce a common
denominator. Each fraction can then be restated in terms of the common denominator using Rule 1
and the numerators added as in (d).

(f) Similarly,

The least common denominator (LCD) of two or more fractions is the polynomial of lowest degree
and smallest coefficient that is exactly divisible by the denominators of the original fractions. Use
of the LCD helps simplify the final sum or difference. See Problems 1.19 to 1.21. Fractions are
reviewed in Problems 1.14 to 1.21.

1.5 RADICALS
If bn = a, where b > 0, then by taking the nth root of both sides of the equation, where
is a radical (sign), a is the radicand, and n is the index. For square roots, the index 2 is not expressed.
Thus, . From Rules 7 and 8 in Section 1.1, we should also be aware that and

Assuming x and y are real nonnegative numbers and m and n are positive integers such that and
exist, the rules of radicals are given below. For proof of Rule 1, see Problem 1.30.

1.

2.

3.

4.

EXAMPLE 8. The laws of radicals are used to simplify the following expressions. Note that for even-
numbered roots, positive and negative answers are equally valid.

See also Problems 1.22, 1.23, and Problems 1.25 to 1.27.

1.6 ORDER OF MATHEMATICAL OPERATIONS
Given an expression involving multiple mathematical operations, computations within parentheses are
performed first. If there are parentheses within parentheses, computations on the innermost set take
precedence. Within parentheses, all constants and variables are first raised to the powers of their respective
exponents. Multiplication and division are then performed before addition and subtraction. In carrying out
operations of the same priority, the procedure is from left to right. In sum,
1. Start within parentheses, beginning with the innermost.
2. Raise all terms to their respective exponents.
3. Multiply and divide before adding and subtracting.
4. For similar priorities, move from left to right.
EXAMPLE 9. The following steps are performed to solve

1. 52 = 25
2. 25 · 6 = 150

3.

4. 15 – 8 = 7
Thus

1.7 USE OF A POCKET CALCULATOR

Pocket calculators are helpful for checking one’s ordinary calculations and performing arduous or
otherwise time-consuming computations. Rules for the different mathematical operations are set forth and
illustrated below, including some rules which will not be used or needed until later in the text.

1.7.1 Addition of Two Numbers

To add two numbers, enter the first number, press the key, and enter the second number. Then
press the key to find the total.

EXAMPLE 10.
(a) To find 139 + 216, enter 139, press the key, enter 216, and press the key to find 139 +
216 = 355.
(b) To find 1025 + 38.75, enter 1025, press the key, then enter 38.75, and hit the key to find
1025 + 38.75 = 1063.75. Practice this and subsequent examples using simple numbers to which
you already know the answers to see if you are doing the procedure correctly.

1.7.2 Addition of More Than Two Numbers

To add more than two numbers, simply follow each entry of a number by pressing the key until all
the numbers have been entered. Then press the key to find the total. Pressing the key at any time
after a number will give the subtotal at that point.
EXAMPLE 11. To find 139 + 216 + 187, enter 139, press the key, enter 216, press the key
again, enter 187, and hit the key to find 139 + 216 + 187 = 542. Hitting the key after 216 would
reveal the subtotal of 139 + 216 is 355, as in the example above.

1.7.3 Subtraction
To find the difference A − B, enter A, press the key, and enter B. Then press the key to find
the remainder. Multiple subtractions can be done as multiple additions in 1.7.2 above, with the key
substituted for the key.

EXAMPLE 12.
(a) To find 315–708, enter 315, press the key, then enter 708 followed by the key to find
315–708 = −393.
(b) To find 528 – 79.62, enter 528, hit the key, then enter 79.62 followed by the key to find
528 – 79.62 = 448.38.

1.7.4 Multiplication
To multiply two numbers, enter the first number, press the key, enter the second number, and press
the key to find the product. Serial multiplications can be done in the same way as multiple additions in
1.7.2. with the key substituted for the key.

EXAMPLE 13.
(a) To find 486 · 27, enter 486, press the key, then enter 27, and hit the key to learn 486 · 27
= 13,122.
(b) To find 149 · −35, enter 149, press the key, then enter 35 followed by the key to make it
negative, and hit the key to learn that 149 · −35 = −5215.

Note: Be aware of the distinction between the key and the key. The key initiates the
process of subtraction; the key simply changes the value of the previous entry from positive to
negative or negative to positive.

1.7.5 Division
Dividing A by B is accomplished by entering A, pressing the key, then entering B and pressing the
key.

EXAMPLE 14.
(a) To find 6715 ÷ 79, enter 6715, hit the key, then enter 79 followed by the key. The display
will show 85, indicating that 6715 ÷ 79 = 85.
(b) To find −297.36 ÷ 72.128, enter 297.36 followed by the key to make it negative, then press
the key, enter 72.128, and hit the key to find −297.36 ÷ 72.128 = −4.1226708.

1.7.6 Raising to a Power

To raise a number to a power, enter the number, hit the key, then enter the exponent and press the
key.
EXAMPLE 15.
(a) To find 85, enter 8, press the key, then enter 5 followed by the key to learn that 85 =
32,768. Continue to practice these and subsequent exercises by using simple numbers for which
you already know the answers.
(b) To find 360.25, enter 36, hit the key, then enter 0.25, and press the key to see 360.25 =
2.4494897.
(c) To find 2−3, enter 2, hit the key, then press 3 followed by the key to make it negative,
and hit the key to discover 2−3 = 0.125.
See also Problem 1.24.

1.7.7 Finding a Square Root

To find the square root of a number, enter the number, then press the key to find the square root
immediately without having to press the key. Note that on many calculators the key is the
inverse (shift, or second function) of the key, and to activate the key, one must first press the
( or ) key followed by the key.

EXAMPLE 16. To find , enter 529, then press the key to see immediately that ±23 is the
square root of 529.
If the key is the inverse, shift, or second function of the key, enter 529, then press the
( or key) followed by the key to activate the key, and you will see
immediately that without having to press the key.

1.7.8 Finding the nth Root

To find the nth root of a number, enter the number, press the key, then enter the value of the root
n and hit the key to find the root. If the is the inverse, shift, or second function of the key,
enter the number, press the ( , or ) key followed by the key, then enter the value
of the root n and hit the key to find the answer.

EXAMPLE 17.
(a) To find , enter 17,576, press the key followed by the key, enter 3, then hit
the key to learn .

(b) To find , enter 32,768, hit the key followed by the key, then enter 5 and
hit the key to learn .
(c) From Rule 8 in Section 1.1, . To use this latter form,
simply enter 32,768, press the key, enter 0.2, and hit the key to find 32,7680.2 = 8.
To make use of similar conversions, recall that
, and so forth. See
Problems 1.25 to 1.27.

1.7.9 Logarithms
To find the value of the common logarithm log10x, enter the value of x and simply press the key.
The answer will appear without the need to press the key.

EXAMPLE 18.
(a) To find the value of log 24, enter 24 and hit the key. The screen will immediately display
1.3802112, indicating that log 24 = 1.3802112.
(b) To find log 175, enter 175 and hit the key. You will see 2.243038, which is the value of log
175.

1.7.10 Natural Logarithms

To find the value of the natural logarithm ln x, enter the value of x and press the key. The answer
will appear immediately without the need to press the key.

EXAMPLE 19.
(a) To find ln 20, enter 20 and hit the key to see 2.9957323 = ln 20.

(b) For ln 0.75, enter 0.75 and hit the key. You will find ln 0.75 = −0.2876821.

1.7.11 Exponential Functions

To find the value of an exponential function y = ax, enter the value of a and press the key, then
enter the value of x and hit the key, similar to what was done in Section 1.7.6.

EXAMPLE 20.
(a) Given y = 1.53.2, enter 1.5, press the
3.6600922.
(b) For y = 256−1.25, enter 256, hit the
to make it negative, and then press the
key, then enter 3.2, and hit the key to get 1.53.2 =
key, then enter 1.25 followed immediately by the key
key to learn 256−1.25 = 0.0009766.

1.7.12 Natural Exponential Functions

To find the value of a natural exponential function y = ex, enter the value of x, press the key, and
the answer will appear immediately without the need of hitting the key. If the key is the inverse,
shift, or second function of the key, enter the value of x, hit the key followed by the
key, and the answer will also appear immediately.
EXAMPLE 21.
(a) Given y = e1.4, enter 1.4, press the key followed by the key, and you will see that
e1.4 = 4.0552.
(b) For e−0.65, enter 0.65, hit the key to make it negative, then press the key followed by
−0.65
the key to find e = 0.5220458.
See also Problems 1.24 to 1.27.

Solved Problems

EXPONENTS
1.1. Simplify the following expressions using the rules of exponents from Section 1.1.
 See also Problems 1.24, 1.26, and 1.27.

POLYNOMIALS
1.2. Perform the indicated arithmetic operations on the following polynomials:

(a)

(b)

(c)

(d)

(e)

(f)

1.3. Add or subtract the following polynomials as indicated. Note that in subtraction the sign of every
term within the parentheses must be changed before corresponding elements are added.
(a) (25x – 9y) + (32x + 16y)

(b) (84x – 31y) – (76x + 43y)

Multiplying each term in the second set of parentheses by −1, which in effect changes the
sign of the said terms, and then simply adding, we have

(c) (9x2 + 7x) – (3x2 – 4x)

Changing the signs of each of the terms in the second set of parentheses and then adding, we
have

(d) (42x2 + 23x) – (5x2 + 11x – 82)

1.4. Perform the indicated operations, recalling that each term in the first polynomial must be multiplied
by each term in the second and their products summed.
FACTORING
1.5. Simplify each of the following polynomials by factoring out the greatest common factor:

(a)

(b)

(c)

(d)

(e) 55x8y9 – 22x6y4 – 99x5y7

1.6. Factor each of the following using integer coefficients:

(a) x2 + 10x + 21
Here, using the notation from Rule 1 in Section 1.3, m = 1, n = 10, and p = 21. For simplicity
we limit our search to positive integers such that:
(1) a · b = 1 [I, 1] Henceforth, when a = b = 1, this step will be omitted and only one order
will be considered.
(2) c · d = 21 [1, 21; 3, 7; 7, 3; 21, 1]
(3) ad + be = 10. With a = 1 = b, (c + d) must equal 10. Since only 3 + 7 and 7 + 3 = 10,

Whenever a · b = 1, the order of factors is unimportant and only one ordering of a given pair
will be mentioned.
1.7. Factor each of the following, noting that the coefficient of the x term is negative while the constant
term is positive.
(a) x2 – 13x + 30
With (c · d) positive and (c + d) negative, the two integer factors must both be negative. We
can no longer limit ourselves to positive factors for c and d.
(1)
(2)

(b) x2 – 15x + 36
(1)
(2)

1.8. Factor each of the following, noting that the coefficient of the x term is now positive and the constant
term is negative.
(a) x2 + 19x – 42
With (c · d) negative, the two integer factors must be of opposite signs; for (c + d) to be
positive when one of the two factors is negative, the factor with the larger absolute value must
be positive.
(1)
(2)

(b) x2 + 18x – 63
(1)
(2)

1.9. Factor each of the following expressions, in which both the coefficient of the x term and the constant
term are now negative.
(a) x2 − 8x − 48
With (c · d) and (c + d) both negative, the factors must be of different signs and the factor
with the larger absolute value must be negative.
 (1)

(2)

(b) x2 – 26x – 56
(1)
(2)

1.10. Factor each of the following, noting that there is no x term and the constant term is negative.
(a) x2 – 81
Here (c · d) is negative and (c + d) = 0. For this to be true, the factors must be of different
signs and of the same absolute value.
(1)
(2)

(b) x2 – 169
(1)
(2)

1.11. Use the techniques and procedures developed in Problems 1.5 to 1.10 to factor the following
expressions in which the coefficient of the x2 term is no longer limited to 1.
(a) 5x2 + 47x + 18
(1)
(2)
(3) ad + bc = 47. Here all the pairs of possible factors from step (2) must be tried in both
orders in step (1), that is, [5,1] with [1, 18; 18, 1; 2, 9; 9, 2; 3, 6; 6, 3]
Of all the possible combinations of factors above, only (5 · 9) + (1 · 2) = 47. Carefully arranging the
factors, therefore, to ensure that 5 multiplies 9 and 1 multiplies 2, we have

(b) 3x2 + 22x + 24

(1) a · b = 3. Factors are [3,1], giving (3x + ?)(x + ?).
(2) c · d = 24 [1, 24; 24, 1; 2, 12; 12, 2; 3, 8; 8, 3; 4, 6; 6, 4]
(3) ad + bc = 22 [(3 · 6) + (1 · 4) = 22]. Then arranging the factors to ensure that 3 multiplies 6
and 1 multiplies 4, we have

(c) 3x2 – 35x + 22

(1) a · b = 3 [3,1]
 (2) c · d = 22 [−1, −22; −22, −1; −2, −11; −11, −2], as in Problem 1.7.
(3) ad + bc = —35 [(3 · −11) + (1 · −2) = −35]. Here rearranging the factors so 3 multiplies
−11 and 1 multiplies −2, we obtain

(d) 7x2 – 32x + 16

(1) a · b = 7 [7,1]
(2) c · d = 16 [−1, −16; −16, −1; −2, −8; −8, −2; −4, −4]
(3) ad + bc = −32 [(7 · −4) + (1 · −4) = −32]

(e) 5x2 + 7x – 52
(1) a · b = 5 [5,1]
(2) c · d = −52 [1, 52; 2, 26; 4, 13; each combination of which must be considered in both
orders and with alternating signs]
(3) ad + bc = 7 [(5 · 4) + (1 · −13) = 7]

(f) 3x2 – 13x – 56

(1) a · b = 3 [3,1]
(2) c · d = −56 [1, 56; 2, 28; 4, 14; 7, 8; considered as in (e)]
(3) ad + bc = −13 [(3 · −7) + (1 · 8) = −13]

(g) 11x2 + 12x – 20

(1) a · b = 11 [11,1]
(2) c · d = −20 [1, 20; 2, 10; 4, 5; considered as above]
(3) ad + bc = 12 [(11 · 2) + (1 · −10) = 12]

(h) 7x2 – 39x – 18

(1) a · b = 7 [7, 1]
(2) c · d = −18 [1, 18; 2, 9; 3, 6; considered as above]
(3) ad + bc = −39 [(7 · −6) + (1 · 3) = −39]

1.12. Redo Problem 1.11 to factor the following expressions in which the coefficient of the x2 term now
has multiple factors.
(a) 6x2 + 23x + 20
(1) a · b = 6. Factors are [1, 6; 2, 3; 3, 2; 6, 1].
(2) c · d = 20 [1, 20; 2, 10; 4, 5; 5, 4; 10, 2; 20, 1]
(3) ad + bc = 23. Here all the pairs of possible factors from step (2) must be tried with all the
 possible factors in step (1).
Of all the possible combinations of factors above, only (2 · 4) + (3 · 5) = 23. Carefully
arranging the factors, therefore, to ensure that 2 multiplies 4 and 3 multiplies 5, we have

(b) 4x2 + 15x + 14

(1) a · b = 4 [1, 4; 2, 2; 4, 1]
(2) c · d = 14 [1, 14; 2, 7; 7, 2; 14, 1]
(3) ad + bc = 15 [(4 · 2) + (1 · 7) = 15] Arranging the factors to ensure that 4 multiplies 2 and
1 multiplies 7, we have

(c) 8x2 + 34x + 21

(1) a · b = 8 [1, 8; 2, 4; 4, 2; 8, 1]
(2) c · d = 21 [1, 21; 3, 7; 7, 3; 21, 1]
(3) ad + bc = 34 [(2 · 3) + (4 · 7) = 34] Arranging the factors so that 2 multiplies 3 and 4
multiplies 7, we have

(d) 6x2 – 17.x + 10

Here with the −17x term, if we wish to limit a and b to positive factors for convenience, c
and d must both be negative.
(1) a · b = 6 [1, 6; 2, 3; 3, 2; 6, 1]
(2) c · d = 10 [−1, −10; −2, −5; −5, −2; −10, −1]
(3) ad + bc = −17 [(6 · −2) + (1 · −5) = −17] Arranging the factors so that 6 multiplies −2 and
1 multiplies −5,

(e) 9x2 – 30x + 16

(1) a · b = 9 [1, 9; 3, 3; 9, 1]
(2) c · d = 16 [−1, −16; −2, −8; −4, −4; −8, −2; −16, −1]
(3) ad + bc = −30 [(3 · −8) + (3 · −2) = −30]

Note: Quadratic equations more complicated than this are seldom factored. If factors are needed for
solution, the quadratic formula is generally used. See Section 3.5.
1.13. Using Rule 2 from Section 1.3 and the techniques developed in Problems 1.5 to 1.11, factor the
following polynomials:
(a) x2 + 11xy + 28y2
(1) c · d = 28 [1, 28; 2, 14; 4, 7]
(2) c + d = 11 [4 + 7 = 11]
(b) x2 – 19xy + 60y2
(1) c · d = 60 [−1, −60; −2, −30; −3, −20; −4, −15; −5, −12; −6, −10], for reasons analogous
to those in Problem 1.7.
(2) c + d = −19 [−4 + (−15) = −19]

(c) x2 – 13xy − 48y2

(1) c · d = −48 [1, −48; 2, −24; 3, −16; 4, −12; 6, −8], for reasons analogous to those in
Problem 1.9.
(2) c + d = −13 [3 + (−16) = −13]

(d) x2 + 11xy – 42y2

(1) c · d = −42 [−1, 42; −2, 21; −3, 14; −6, 7], for reasons similar to those in Problem 1.8.
(2) c + d = 11 [−3 + 14 = 11]

(e) 3x2 + 29xy + 18y2

(1) a · b = 3 [3, 1]
(2) c · d = 18 [1, 18; 18, 1; 2, 9; 9,2; 3,6; 6,3], as in Problems 1.11 (a) and b).
(3) ad + bc = 29 [(3 · 9) + (1 · 2) = 29] Then rearranging the factors for proper multiplication,
we obtain

(f) 7x2 – 36xy + 45y2

(1) a · b = 7 [7, 1]
(2) c · d = 45 [−1, −45; −45, −1; −3, −15; −15, −3; −5, −9; −9, −5], as in Problem 1.11 (c).
(3) ad + bc = −36 [(7 · −3) + (1 · −15) = −36]

(g) 5x2 + 12xy – 44y2

(1) a · b = 5 [5, 1]
(2) c · d = −44 [1, 44; 2, 22; 4, 11; each combination of which must be considered in both
orders and with alternating signs as in Problem 1.11 (e)]
(3) ad + bc = 12 [(5 · −2) + (1 · 22) = 12

(h) 8x2 + 46xy + 45y2

(1) a · b = 8 [1, 8; 2, 4; 4, 2; 1, 8], as in Problem 1.12
(2) c · d = 45 [1, 45; 3, 15; 5, 9; 9, 5; 15, 3; 45, 1]
(3) ad + bc = 46 [(2 · 5) + (4 · 9) = 46]
 (i) 4x2 – 25y2
(1) a · b = 4 [1, 4; 2, 2]
(2) c · d = −25 [1, −25; −25, 1; 5, −5]
(3) ad + bc = 0 [(2 · 5) + (2 · −5) = 0]

FRACTIONS
1.14. According to the fundamental principle of fractions expressed in Rule 1 of Section 1.4, when the
numerator and denominator of a rational number are multiplied or divided by the same nonzero
polynomial, the result will be equivalent to the original expression. Use this principle to reduce the
following fractions to their lowest terns by finding and canceling the greatest common factor:

1.15. Use Rule 1 to raise the following fractions to higher terms with a common denominator of 48:

1.16. Use Rule 2 of Section 1.4 to multiply the following rational expressions and reduce all answers to
the lowest terms.

(a) When multiplying rational expressions involving quotients of monomials, multiply

numerator and denominator separately, then reduce to lowest terms, recalling from Section
1.1 that exponents of the same variable are added in multiplication and subtracted in
Another random document with
no related content on Scribd:
"What America owed abroad can never be computed; it is enough
that it reached an enormous sum, to refund which, even under
favorable circumstances, would have taken years of effort;
actually forced payment brought the nation to the brink of a
convulsion. Perhaps no people ever faced such an emergency and
paid, without recourse to war. America triumphed through her
inventive and administrative genius. Brought to a white heat
under compression, the industrial system of the Union suddenly
fused into a homogeneous mass. One day, without warning, the
gigantic mechanism operated, and two hemispheres vibrated with
the shock. In March, 1897, the vast consolidation of mines,
foundries, railroads, and steamship companies, centralized at
Pittsburg, began producing steel rails at $18 the ton, and at
a bound America bestrode the world. She had won her great
wager with fate. … The end seems only a question of time.
Europe is doomed not only to buy her raw material abroad, but
to pay the cost of transport. And Europe knew this
instinctively in March, 1897, and nerved herself for
resistance. Her best hope, next to a victorious war, lay in
imitating America, and in organizing a system of
transportation which would open up the East.

"Carnegie achieved the new industrial revolution in March,

1897. Within a twelvemonth the rival nations had emptied
themselves upon the shore of the Yellow Sea. In November
Germany seized Kiao-chau, a month later the Russians occupied
Port Arthur, and the following April the English appropriated
Wei-hai-wei; but the fact to remember is that just 400 miles
inland, due west of Kiao-chau, lies Tszechau, the centre,
according to Richthofen, of the richest coal and iron deposits
in existence. There with the rude methods used by the Chinese,
coal actually sells at 13 cents the ton. Thus it has come to
pass that the problem now being attacked by all the statesmen,
soldiers, scientific men, and engineers of the two eastern
continents is whether Russia, Germany, France, England, and
Japan, combined or separately, can ever bring these resources
on the market in competition with the United States."
 B. Adams,
The New Industrial Revolution
(Atlantic Monthly, February, 1901).

UNITED STATES OF AMERICA: A. D. 1897 (January-May).

Arbitration Treaty with Great Britain rejected by the Senate.

See, (in this volume),

VENEZUELA: A. D. 1896-1899.

The correspondence which took place between the governments of

the United States and Great Britain, on the subject of an
arbitration of the Venezuela Boundary dispute, having led to
the revival of a project for the negotiation of a general
treaty of arbitration, which the late American Secretary of
State, Mr. Gresham, had broached to the British government in
the spring of 1895, the terms of such an arrangement were
carefully and fully discussed between Secretary Olney and Lord
Salisbury, during the year 1896, and an agreement was reached
which took form in a solemn compact for the settlement by
arbitration of all matters in difference between the two
countries, signed at Washington on the 11th of January, 1897.
The treaty thus framed was as follows:

"ARTICLE I.
The High Contracting Parties agree to submit to Arbitration in
accordance with the provisions and subject to the limitations
of this Treaty all questions in difference between them which
they may fail to adjust by diplomatic negotiation.

"ARTICLE II.
All pecuniary claims or groups of pecuniary claims which do
not in the aggregate exceed £100,000 in amount, and which do
not involve the determination of territorial claims, shall be
dealt with and decided by an Arbitral Tribunal constituted as
provided in the next following Article. In this Article and in
 Article IV the words 'groups of pecuniary claims' mean
pecuniary claims by one or more persons arising out of the
same transactions or involving the same issues of law and
fact.'

"ARTICLE III.
Each of the High Contracting Parties shall nominate one
arbitrator who shall be a jurist of repute and the two
arbitrators so nominated shall within two months of the date
of their nomination select an umpire. In case they shall fail
to do so within the limit of time above mentioned, the umpire
shall be appointed by agreement between the Members for the
time being of the Supreme Court of the United States and the
Members for the time being of the Judicial Committee of the
Privy Council in Great Britain, each nominating body acting by
a majority. In case they shall fail to agree upon an umpire
within three months of the date of an application made to them
in that behalf by the High Contracting Parties or either of
them, the umpire shall be selected in the manner provided for
in Article X. The person so selected shall be the President of
the Tribunal and the award of the majority of the Members
thereof shall be final.

{578}

"ARTICLE IV.
All pecuniary claims or groups of pecuniary claims which shall
exceed £100,000 in amount and all other matters in difference,
in respect of which either of the High Contracting Parties
shall have rights against the other under Treaty or otherwise,
provided that such matters in difference do not involve the
determination of territorial claims, shall be dealt with and
decided by an Arbitral Tribunal, constituted as provided in
the next following Article.

"ARTICLE V.
Any subject of Arbitration described in Article IV shall be
submitted to the Tribunal provided for by Article III, the
award of which Tribunal, if unanimous, shall be final. If not
unanimous either of the High Contracting Parties may within
six months from the date of the award demand a review thereof.
In such case the matter in controversy shall be submitted to
an Arbitral Tribunal consisting of five jurists of repute, no
one of whom shall have been a member of the Tribunal whose
award is to be reviewed and who shall be selected as follows,
viz:—two by each of the High Contracting Parties, and one, to
act as umpire, by the four thus nominated and to be chosen
within three months after the date of their nomination. In
case they shall fail to choose an umpire within the limit of
time above-mentioned, the umpire shall be appointed by
agreement between the Nominating Bodies designated in Article
III acting in the manner therein provided. In case they shall
fail to agree upon an umpire within three months of the date
of an application made to them in that behalf by the High
Contracting Parties or either of them, the umpire shall be
selected in the manner provided for in Article X. The person
so selected shall be the President of the Tribunal and the
award of the majority of the Members thereof shall be final.

"ARTICLE VI.
Any controversy which shall involve the determination of
territorial claims shall be submitted to a Tribunal composed
of six members, three of whom (subject to the provisions of
Article VIII) shall be Judges of the Supreme Court of the
United States or Justices of the Circuit Courts to be
nominated by the President of the United States, and the other
three of whom (subject to the provisions of Article VIII)
shall be Judges of the British Supreme Court of Judicature or
Members of the Judicial Committee of the Privy Council to be
nominated by Her Britannic Majesty, whose award by a majority
of not less than five to one shall be final. In case of an
award made by less than the prescribed majority, the award
shall also be final unless either Power shall, within three
months after the award has been reported, protest that the
same is erroneous, in which case the award shall be of no
validity. In the event of an award made by less than the
prescribed majority and protested as above provided, or if the
members of the Arbitral Tribunal shall be equally divided,
there shall be no recourse to hostile measures of any
description until the mediation of one or more friendly Powers
has been invited by one or both of the High Contracting
Parties.

"ARTICLE VII.
Objections to the jurisdiction of an Arbitral Tribunal
constituted under this Treaty shall not be taken except as
provided in this Article. If before the close of the hearing
upon a claim submitted to an Arbitral Tribunal constituted
under Article III or Article V either of the High Contracting
Parties shall move such Tribunal to decide, and thereupon it
shall decide that the determination of such claim necessarily
involves the decision of a disputed question of principle of
grave general importance affecting the national rights of such
party as distinguished from the private rights whereof it is
merely the international representative, the jurisdiction of
such Arbitral Tribunal over such claim shall cease and the
same shall be dealt with by arbitration under Article VI.

"ARTICLE VIII.
In cases where the question involved is one which concerns a
particular State or Territory of the United States, it shall
be open to the President of the United States to appoint a
judicial officer of such State or Territory to be one of the
Arbitrators under Article III or Article V or Article VI. In
like manner in cases where the question involved is one which
concerns a British Colony or possession, it shall be open to
Her Britannic Majesty to appoint a judicial officer of such
Colony or possession to be one of the Arbitrators under
Article III or Article V or Article VI.

"ARTICLE IX.
Territorial claims in this Treaty shall include all claims to
territory and all claims involving questions of servitudes,
rights of navigation and of access, fisheries and all rights
and interests necessary to the control and enjoyment of the
territory claimed by either of the High Contracting Parties.

"ARTICLE X.
If in any case the nominating bodies designated in Articles
III and V shall fail to agree upon an Umpire in accordance
with the provisions of the said Articles, the Umpire shall be
appointed by His Majesty the King of Sweden and Norway. Either
of the High Contracting Parties, however, may at any time give
notice to the other that, by reason of material changes in
conditions as existing at the date of this Treaty, it is of
opinion that a substitute for His Majesty should be chosen
either for all cases to arise under the Treaty or for a
particular specified case already arisen, and thereupon the
High Contracting Parties shall at once proceed to agree upon
such substitute to act either in all cases to arise under the
Treaty or in the particular case specified as may be indicated
by said notice; provided, however, that such notice shall have
no effect upon an Arbitration already begun by the constitution
of an Arbitral Tribunal under Article III. The High
Contracting Parties shall also at once proceed to nominate a
substitute for His Majesty in the event that His Majesty shall
at any time notify them of his desire to be relieved from the
functions graciously accepted by him under this Treaty either
for all cases to arise thereunder or for any particular
specified case already arisen.

"ARTICLE XI.
In case of the death, absence or incapacity to serve of any
Arbitrator or Umpire, or in the event of any Arbitrator or
Umpire omitting or declining or ceasing to act as such,
another Arbitrator or Umpire shall be forthwith appointed in
his place and stead in the manner provided for with regard to
the original appointment.
{579}

"ARTICLE XII.
Each Government shall pay its own agent and provide for the
proper remuneration of the counsel employed by it and of the
Arbitrators appointed by it and for the expense of preparing
and submitting its case to the Arbitral Tribunal. All other
expenses connected with any Arbitration shall be defrayed by
the two Governments in equal moieties. Provided, however,
that, if in any case the essential matter of difference
submitted to arbitration is the right of one of the High
Contracting Parties to receive disavowals of or apologies for
acts or defaults of the other not resulting in substantial
pecuniary injury, the Arbitral Tribunal finally disposing of
the said matter shall direct whether any of the expenses of
the successful party shall be borne by the unsuccessful party,
and if so to what extent.

"ARTICLE XIII.
The time and place of meeting of an Arbitral Tribunal and all
arrangements for the hearing and all questions of procedure
shall be decided by the Tribunal itself. Each Arbitral
Tribunal shall keep a correct record of its proceedings and
may appoint and employ all necessary officers and agents. The
decision of the Tribunal shall, if possible, be made within
three months from the close of the arguments on both sides. It
shall be made in writing and dated and shall be signed by the
Arbitrators who may assent to it. The decision shall be in
duplicate, one copy whereof shall be delivered to each of the
High Contracting Parties through their respective agents.

"ARTICLE XIV.
This Treaty shall remain in force for five years from the date
at which it shall come into operation, and further until the
expiration of twelve months after either of the High
Contracting Parties shall have given notice to the other of
its wish to terminate the same.

"ARTICLE XV.
The present Treaty shall be duly ratified by the President of
the United States of America, by and with the advice and
consent of the Senate thereof, and by Her Britannic Majesty;
and the mutual exchange of ratifications shall take place in
Washington or in London within six months of the date hereof
or earlier if possible."

United States, 54th Congress, 2d Session,

Senate Document Number 63.

Public feeling in both countries gave joyful welcome to this

nobly conceived treaty when it was announced. All that was
best in English sentiment and American sentiment had been
shuddering at the thought of possible war between the kindred
peoples, and thanked God for what promised some certitude that
no dispute would be pushed to that barbarous appeal. Only the
mean thought and temper of either country was provoked to
opposition; but, unhappily, the meaner temper and the narrower
and more ignorant opinion on one side of the sea had been
getting so strong a representation in the United States Senate
as to prove capable of much mischief there, on this and other
matters of most serious public concern. When the great
covenant of peace went to that body for approval, there were
senators who found it offensive to them because it came from
the hands of President Cleveland and Secretary Olney; and
there were other senators whose dignity was hurt by the eager
impatience with which the public voice cried out for their
ratifying vote; and still others there were who looked with
official jealousy at the project of an arbitral tribunal which
might sometimes take something from senatorial functions in
foreign affairs. And the combination of pitiful motives had
strength enough to baffle the high hopes and defeat the will
of the American people.
Of the public feeling thus outraged, the following is one
expression of the time, among many which it would be possible
to quote:

Many people "are represented by influential papers like the

St. Paul 'Pioneer Press' and the Minneapolis 'Journal,' the
latter declaring that it is humiliating to think that, widely
as the treaty is favored throughout the country, a few
ill-natured men in the Senate have the power to delay
ratification. In the Central West the feeling is generally
strong for arbitration, if we may judge from the Chicago
'Times-Herald,' the St. Louis 'Republic,' the Indianapolis
'Journal,' and the Cleveland 'Leader.' In the South there are
such cheering reports as this from the Memphis 'Scimetar'; 'If
the treaty now under consideration in the Senate Committee on
Foreign Relations should fail of ratification, public opinion
in this country would demand that the incoming Administration
provide another embodying the same vital principle.' In the
East the sentiment in favor of immediate ratification of the
original draft has been almost universal, the only two
journals of note differing from this being the New York 'Sun'
and the Washington 'Post.' The trend of opinion is shown in
the adoption by the Massachusetts House of Representatives of
an endorsement by a vote of 141 to 11. An important meeting
took place last week in Washington in favor of ratification.
The speakers were ex-Secretary of State Foster, Mr. G. G.
Hubbard, Professor B. L. Whitman, ex-Senator J. B. Henderson,
ex-Governor Stanard, and Justice Brewer, of the Supreme Court.
The last named said; 'I do not believe in saying to the
gentlemen charged with the duty of considering carefully that
treaty, that "you must vote for it." There is something in my
own nature which, when anybody says to me "you must," causes
something to run up my spinal column which says "I won't." It
is the Senate's duty to consider that treaty carefully, and
when I say that, I say it is no trespass upon their rights for
American citizens to express their views of that treaty. What are
the errors and losses incidental to arbitration compared to
the horrors of war? What are a few million dollars of wrongful
damages in comparison to the sacrifice of thousands of human
lives?'"
The Outlook, February 6, 1897.

"This treaty was greeted with widespread favor in the press,

but was antagonized at once in the Senate by the jingo element
and by the personal adversaries of the administration. The
committee on foreign relations reported the draft favorably,
but with certain amendments, on February 1. The ensuing debate
soon revealed that a vote on ratification could not be
obtained before March 4, and the whole matter was dropped. At
the opening of the new Congress the Senate Committee again
considered the treaty and reported it, with amendments, on
March 18. During two weeks' discussion the Senate adopted the
committee's amendments and also others, with the result that
the draft was radically transformed.
{580}
Instead of the general reference of all disputes to the
tribunals, it was provided that any difference 'which, in the
judgment of either power, materially affects its honor or its
domestic or foreign policy,' should be submitted to
arbitration only by special agreement; that no question should
be submitted save with the consent of the Senate in its
treaty-making capacity; and that no claim of a British subject
against a state or territory of the United States should be
submitted under any circumstances. The first of these changes
was due mainly to the objection that without it the Monroe
Doctrine might be subjected to arbitration; the second to the
sensitiveness of senators as to their constitutional functions
in foreign relations; and the third to a desire to protect
states against claims on their defaulted bonds. Other changes
modified materially the method of appointing the arbitrators
for the United States, and struck out entirely the designation
of the King of Sweden as umpire. Even with these amendments,
the opposition to the treaty was not overcome; and the final
vote on ratification, taken May 5, resulted in its rejection,
the vote standing 43 to 26, less than two-thirds in the
affirmative. Thirty Republicans and 13 Democrats voted for the
 treaty; 8 Republicans, 12 Democrats and 6 Populists against
it."

Political Science Quarterly,

June, 1897.

UNITED STATES OF AMERICA: A. D. 1897 (March).

Inauguration of President McKinley.
Leading topics of the inaugural address.
The President's Cabinet.

The inauguration of President McKinley was performed with the

customary ceremonies on the 4th of March. In his inaugural
address, the new President laid somewhat less emphasis than
might have been expected on the need of measures for reforming
the monetary system of the country, but strongly urged that
instant steps be taken to increase the revenues of the
government by a return to higher tariff charges. "With
adequate revenue secured," he argued, "but not until then, we
can enter upon such changes in our fiscal laws as will, while
insuring safety and volume to our money, no longer impose upon
the government the necessity of maintaining so large a gold
reserve, with its attendant and inevitable temptations to
speculation. Most of our financial laws are the outgrowth of
experience and trial, and should not be amended without
investigation and demonstration of the wisdom of the proposed
changes. We must be both 'sure we are right' and 'make haste
slowly.' …

"The question of international bimetallism will have early and

earnest attention. It will be my constant endeavor to secure
it by cooperation with the other great commercial powers of
the world. Until that condition is realized, when the parity
between our gold and silver money springs from and is
supported by the relative value of the two metals, the value
of the silver already coined, and of that which may hereafter
be coined, must be kept constantly at par with gold by every
resource at our command. The credit of the government, the
integrity of its currency, and the inviolability of its
obligations must be preserved. This was the commanding verdict
of the people, and it will not be unheeded.

"Economy is demanded in every branch of the government at all

times, but especially in periods like the present of
depression in business and distress among the people. The
severest economy must be observed in all public expenditures,
and extravagance stopped wherever it is found, and prevented
wherever in the future it may be developed. If the revenues
are to remain as now, the only relief that can come must be
from decreased expenditures. But the present must not become
the permanent condition of the government. It has been our
uniform practice to retire, not increase, our outstanding
obligations; and this policy must again be resumed and
vigorously enforced. Our revenues should always be large
enough to meet with ease and promptness not only our current
needs and the principal and interest of the public debt, but
to make proper and liberal provision for that most deserving
body of public creditors, the soldiers and sailors and the
widows and orphans who are the pensioners of the United
States. …

"A deficiency is inevitable so long as the expenditures of the

government exceed its receipts. It can only be met by loans or
an increased revenue. While a large annual surplus of revenue
may invite waste and extravagance, inadequate revenue creates
distrust and undermines public and private credit. Neither
should be encouraged. Between more loans and more revenue
there ought to be but one opinion. We should have more
revenue, and that without delay, hindrance, or postponement. A
surplus in the treasury created by loans is not a permanent or
safe reliance. It will suffice while it lasts, but it cannot
last long while the outlays of the government are greater than
its receipts, as has been the case during the last two years.
… The best way for the government to maintain its credit is to
 pay as it goes—not by resorting to loans, but by keeping out
of debt—through an adequate income secured by a system of
taxation, external, or internal, or both. It is the settled
policy of the government, pursued from the beginning and
practiced by all parties and administrations, to raise the
bulk of our revenue from taxes upon foreign productions
entering the United States for sale and consumption, and
avoiding, for the most part, every form of direct taxation
except in time of war.

"The country is clearly opposed to any needless additions to

the subjects of internal taxation, and is committed by its
latest popular utterance to the system of tariff taxation.
There can be no misunderstanding either about the principle
upon which this tariff taxation shall be levied. Nothing has
ever been made plainer at a general election than that the
controlling principle in the raising of revenue from duties on
imports is zealous care for American interests and American
labor. The people have declared that such legislation should
be had as will give ample protection and encouragement to the
industries and the development of our country. … The paramount
duty of congress is to stop deficiencies by the restoration of
that protective legislation which has always been the firmest
prop of the treasury. The passage of such a law or laws would
strengthen the credit of the government both at home and
abroad, and go far toward stopping the drain upon the gold
reserve held for the redemption of our currency, which has
been heavy and well-nigh constant for several years. In the
revision of the tariff, especial attention should be given to
the re-enactment and extension of the reciprocity principle of
the law of 1890, under which so great a stimulus was given to
our foreign trade in new and advantageous markets for our
surplus agricultural and manufactured products."

{581}

Without effect, the incoming President urged the ratification

 of the treaty of arbitration with Great Britain, negotiated by
his predecessor and still pending in the Senate. In concluding
his address he announced his intention to convene Congress in
extra session, saying: "The condition of the public treasury
demands the immediate consideration of congress. It alone has
the power to provide revenue for the government. Not to
convene it under such circumstances, I can view in no other
sense than the neglect of a plain duty."

On the day following his inauguration, the President sent to

the Senate the following nominations for his Cabinet, which
were confirmed:

Secretary of State, John Sherman of Ohio;

Secretary of the Treasury, Lyman J. Gage of Illinois;
Secretary of War, Russel A. Alger of Michigan;
Attorney-General, Joseph McKenna of California;
Postmaster-General, James A. Gary of Maryland;
Secretary of the Navy, John D. Long of Massachusetts;
Secretary of the Interior, Cornelius N. Bliss of New York;
Secretary of Agriculture, James Wilson of Iowa.

UNITED STATES OF AMERICA: A. D. 1897 (March-July).

Passage of the Dingley Tariff Act.

Carrying out an intention announced in his Inaugural Address,

President McKinley called Congress together in extra session
on the 15th of March, asking for immediate action to increase
the revenue of the government by increased duties, "so levied
upon foreign products as to preserve the home market, so far
as possible, to our own producers." In his Inaugural Address
the President had expressed the understanding of his party as
to the chief meaning of the late election, by saying that "the
country is … committed by its latest popular utterance to the
system of tariff taxation. … The people have declared that
such legislation should be had as will give ample protection
and encouragement to the industries and development of our
country. … The paramount duty of Congress is to stop
deficiencies by the restoration of that protective legislation
which has always been the firmest prop of the treasury." To
the majority in both Houses of Congress these views were
entirely acceptable, and they were acted upon at once. The
Ways and Means Committee of the House of Representatives in
the previous Congress had already prepared a comprehensive new
tariff bill, which it passed on to its successor. This
ready-made bill was reported to the House on the first day of
the session, by Mr. Dingley, chairman of the newly appointed
committee, as he had been of the one before it. Debate on the
measure began a week later, and was controlled by a fixed
programme, which required it to be ended on the 31st of March.
The bill was then passed, by a vote of 205 against 121. Of the
action of the Senate upon it, and of the main features of the
bill as it was finally shaped and became law, the following is
a succinct account:

"The bill, referred at once to the Senate Committee on

Finance, was reported after a month, on May 8, with important
amendments. There was an attempt to impose some purely revenue
duties, and, as to the protective duties, the tendency was
towards lower rates than in the House bill, though on certain
articles, such as wools of low grade, hides, and others (of
which more will be said presently), the drift was the other
way. The Senate, however, paid much less respect than the
House to the recommendations of the committee in charge. In
the course of two months, from May 4 to July 7, it went over
the tariff bill item by item, amending without restraint,
often in a perfunctory manner, and not infrequently with the
outcome settled by the accident of attendance on the
particular day; on the whole, with a tendency to retain the
higher rates of the House bill. As passed finally by the
Senate on July 7, the bill, though it contained some 872
amendments, followed the plan of the House Committee rather
than that of the Senate Committee. As usual, it went to a
Conference Committee. In the various compromises and
adjustments in the Senate and in the Conference Committee
there was little sign of the deliberate plan and method which
the House had shown, and the details of the act were settled
in no less haphazard fashion than has been the case with other
tariff measures. As patched up by the Conference Committee,
the bill was promptly passed by both branches of Congress, and
became law on July 24. In what manner these political
conditions affected the character of the act will appear from
a consideration of the more important specific changes.

"First and foremost was the reimposition of the duties on

wool. As the repeal of these duties had been the one important
change made by the act of 1894, so their restoration was the
salient feature in the act of 1897. … Clothing wool was
subjected once more to a duty of 11 cents a pound, combing
wool to one of 12 cents. On carpet wool there were new graded
duties, heavier than any ever before levied. If its value was
12 cents a pound or less the duty was 4 cents; if over 12
cents, the duty was 7 cents. … The duties on carpet wool, as
has already been noted, were made higher than ever before. In
the House the rates of the act of 1890 had been retained; but
in the Senate new and higher rates were inserted. … They were
demanded by the Senators from some States in the Far West,
especially from Idaho and Montana. … They [the Senators in
question] needed to be placated and they succeeded in getting
higher duties on the cheap carpet wools, on the plea of
encouragement for the comparatively coarse clothing wool of
their ranches. … The same complications that led to the high
duty on carpet wool brought about a duty on hides. This rawest
of raw materials had been on the free list for just a quarter
of a century, since 1872, when the duty of the war days had
been repealed. … But here, again, the Senators from the
ranching States were able to dictate terms. … In the Senate a
duty of 20 per cent. was tacked on. The rate was reduced to 15
per cent. in the Conference Committee, and so remains in the
act. The restored duties on wool necessarily brought in their
train the old system of high compensating duties on woollens.
 … In the main, the result was a restoration of the rates of
the act of 1890. There was some upward movement almost all
along the line; and the ad valorem duty alone, on the classes
of fabrics which are most largely imported, crept up to 55 per
cent. …

{582}

"On cotton goods the general tendency was to impose duties

lower than those of 1890. This was indicated by the drag-net
rate, on manufactures of cotton not otherwise provided for,
which had been 50 per cent. in 1890, and was 45 per cent. in
1897. On two large classes of textile goods new and distinctly
higher duties were imposed,—on silks and linens. … The mode of
gradation was to levy the duties according to the amount of
pure silk contained in the goods. The duties were fixed by the
pound, being lowest all goods containing a small proportion of
pure silk, and rising as that proportion became larger; with
the proviso that in no case should the duty be less than 50
per cent. … Thus, the duty on certain kinds of silks was $1.30
cents per pound, if they contained 45 per cent in weight of
silk; but advanced suddenly to $2.25, if they contained more
than 45 per cent. … On linens another step of the same kind
was taken, specific duties being substituted here also for
ad-valorem. … Linens were graded somewhat as cottons had been
graded since 1861, according to the fineness of the goods as
indicated by the number of threads to the square inch. If the
number of threads was 60 or less per square inch, the duty was
1¾ cents a square yard; if the threads were between 60 and
120, the duty was 2¾ cents; and so on,—plus 30 per cent.
ad-valorem duty in all cases. But finer linen goods, unless
otherwise specially provided for, were treated leniently. If
the weight was small (less than 4½ ounces per yard), the duty
was but 35 per cent. On the other hand, linen laces, or
articles trimmed with lace or embroidery, were dutiable at 60
percent.,—an advance at 10 per cent. over the rate of 1890. …
It was inevitable, under the political conditions of the
session, that in this schedule something should again be
attempted for the farmer; and, accordingly, we find a
substantial duty on flax. The rate of the act of 1890 was
restored,—3 cents a pound on prepared flax, in place of the
rate of 1½ cents imposed by the act of 1894. …

"On chinaware the rates of 1890 were restored. The duty on the
finer qualities which are chiefly imported had been lowered to
35 per cent. in 1894, and was now once more put at 60 per
cent. On glassware, also, the general ad-valorem rate, which
had been reduced to 35 per cent. in 1894, was again fixed at
45 per cent., as in 1890. Similarly the specific duties on the
cheaper grades of window-glass and plate-glass, which had been
lowered in 1894, were raised to the figures of 1890. … The metal
schedules in the act of 1897 showed in the main a striking
contrast with the textile schedules. Important advances of
duty were made on many textiles, and in some cases rates went
considerably higher even than those of 1890. But on most
metals, and especially on iron and steel, duties were left
very much as they had been in 1894. … On steel rails there was
even a slight reduction from the rate of 1894—$6.72 per ton
instead of $7.84. On coal there was a compromise rate. The
duty had been 75 cents a ton in 1890, and 40 cents in 1894; it
was now fixed at 67 cents. On the other hand, as to certain
manufactures of iron and steel farther advanced beyond the
crude stage, there was a return to rates very similar to those
of 1890. Thus, on pocket cutlery, razors, guns, we find once
more the system of combined ad-valorem and specific duties,
graded according to the value of the article. … Copper
remained on the free list, where it had been put in 1894. …
For good or ill the copper duty had worked out all its effects
years before. On the other hand, the duties on lead and on
lead ore went up to the point at which they stood in 1890.
Here we have once more the signs of concession to the silver
Republicans of the far West. … The duty on tin plate, a bone
of contention under the act of 1890, was disposed of, with
little debate, by the imposition of a comparatively moderate
duty. …

"A part of the act which aroused much public attention and
which had an important bearing on its financial yield was the
sugar schedule—the duties on sugar, raw and refined. … The act
of 1890 had admitted raw sugar free, while that of 1894 had
imposed a duty of 40 per cent. ad valorem. … The price of raw
sugar had maintained its downward tendency; and the duty of 40
per cent. had been equivalent in 1896 to less than one cent a
pound. In the act of 1897 the duty was made specific, and was
practically doubled. Beginning with a rate of one cent a pound
on sugar tested to contain 75 per cent., it advanced by stages
until on sugar testing 95 per cent. (the usual content of
commercial raw sugar) it reached 1.65 cents per pound. The
higher rate thus imposed was certain to yield a considerable
increase of revenue. Much was said also of the protection now
afforded to the beet sugar industry of the West. That
industry, however, was still of small dimensions and uncertain
future. … On refined sugar, the duty was made 1.95 cents per
pound, which, as compared with raw sugar testing 100 per
cent., left a protection for the domestic refiner,—i. e., for
the Sugar 'Trust,'—of 1/8 of one cent a pound. Some intricate
calculation would be necessary to make out whether this
'differential' for the refining interest was more or less than
in the act of 1894; but, having regard to the effect of the
substitution of specific for ad-valorem duties, the Trust was
no more favored by the act of 1897 than by its predecessor,
and even somewhat less favored. The changes which this part of
the tariff act underwent in the two Houses are not without
significance." In the bill passed by the House. "the so-called
differential, or protection to the refiners, was one-eighth of
a cent per pound. In the Senate there was an attempt at
serious amendment. The influence of the Sugar Trust in the
Senate had long been great. How secured, whether through party
contributions, entangling alliances, or coarse bribery, the
public could not know; but certainly great, as the course of
legislation in that body demonstrated." The Senate attempted