MEMORANDUM

anything more of theoretical relevance to do. Furthermore, in that field the Leontief’s
method for determining elasticities had already been taken into use in several places, e.g.
by the US Bureau of Agricultural Economics in USA. He had also heard from Bresciani-
Turroni in Cairo, that an analysis of cotton market had just been initiated by the Egyptian
government. 120
Leontief argued that the “resistance” of the iron market to analysis would yield
through a sober theoretical analysis. When the principal problems had been sorted out the
adequate methods of calculation could surely be derived with logical stringency.
Systematic experiments since March had shown that the undertaking was not hopeless.
The difficulties related mainly to the cyclical fluctuations. He enclosed a note titled
Problemstellung in the letter to Schumpeter. He had prepared it the basis of sampled
experiments – for his own use – and these would in the continuation serve as connecting
threads [Leitfaden]. Leontief appealed to Schumpeter that it would be of the utmost
interest for him to know Schumpeter’s opinion about his approach. 121 But Schumpeter had
too much on his plate at the time to study Leontief’s problem.
Leontief also passed on to Schumpeter that the latest paper by Hans Staehle about
demand and supply analysis and published in Giornale degli economisti (Staehle 1930) had
been so loaded with superlatives that it had made him blush. He also received a letter from
Elizabeth Gilboy at Harvard who praised the Versuch treatise; she is likely to have been the
first to mention Leontief’s work in an English journal (Gilboy 1930). Gilboy’s letter
opened up a relationship with Leontief that would last for decades, first through Gilboy’s
role in the Harvard Committee on Research in the Social Sciences and from 1948 as
administrator of the Harvard Economic Research Project.
But the responses to Versuch were not all positive. Henry Schultz was in the final
stage preparing a follow-up volume of Schultz (1928) just as Leontief (1929) appeared.
Schultz hastily added an appendix with a critical review of Leontief’s work (Schultz 1930).
As Schultz was so influential in the field of empirical demand analysis Leontief felt that
Schultz’s criticism was had put him in a vulnerable position and considered how to address
it. 122 Schumpeter did not respond to Leontief until the end of August 1930. He had been
stuck with work to prepare for a period of absence. He told Leontief that he would leave
120 Costatino Bresciani-Turroni (1882-1963) was one of the most highly regarded Italian economists
and as an outspoken opponent of fascism he lived in exile in Cairo. Bresciani-Turroni became a
leading Italian member of the Econometric Society in the early 1930s and was offered (but declined)
the position as research director of the Cowles Commission in the late 1930s.
121 Leontief to Schumpeter, 31 May 1930. The Problemstellung note has not been found.
122 Schultz (1930) was published in a well-known series edited by Eugen Altschul. Schultz made
his paper with appendix also available in English as a mimeograph.
50