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rite for particulars and free samples. AMERICAN MoMoçRAM co., Dept. 31. East orange, N. J.

Ösdósoun Cance."
N “Old Town” rests as lightly on the water as a
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There is a built-in strength to every “Old Town
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Buy the Sponson Model for the children—it is safer
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in stock. $67 up from dealer or factory.
OLD TOWN CANOE CO.
144 Middle Street
Old Town, Maine, U. S. A.

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epoch, then the span of bacilli and antitoxins, followed by the as Yirin age, and the autointoxication regencv, into the reign of the ductless gland? Have I not lived during the Civil War, when the wounds of men were washed by clean water and exposed to air and sun, and also during the time when wounds were eternally scalded by corrosive germ killers and kept air-tight, and have I not seen a return to the same old principle of the Civil War?” Claveloux made a gesture of impatience. “Well, sir, I will bother you no more with opinions of mine, though I cannot forbear to say that you yourself will find it difficult to name any substance or distillation—be it white, brown, red, or yellow liquid or black, white or brilliant-hued pill—which, of a surety, has done mankind more good than harm. Excepting, of course, one only.” “What one is that?” asked Nara. “Morphine,” said Connor Lee. once was a user of it.”

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E stopped a moment, then bowed to them and walked through the doorway, losing himself in the shadows before his feet sounded crèaking on the stairs. Nara followed him as if he were a sheriff who had come and seized some property of hers to carry away. She looked down over the stair railing after him, as if he had taken something out of her garret which had been there when he came. Claveloux leaned back against the mantel with his hands at arm's length resting on the wooden shelf. When he moved a little he was conscious that his fingers had covered a little revolver lying there. He picked it up quickly, looking at its nickeled barrel and its mother-of-pearl mountings. “She would need it perhaps, living alone like this,” he thought and gave it no more attention. “And who is Connor Lee?” he asked as she closed the door again. “He was once a priest,” she told him. “His learning is endless. I went to see him once when I had been ill and had no money. He offered nothing to meet my emergency. He only went into a

reverie and finally said then that he knew something which he believed would make us both rich.” “Did he say that?” “Yes. He said my hands,” Nara answered. “And that was all?” “All,” she affirmed. “He came here once when I was away, but I have never seen him since until to-night.” “It is extraordinary !” said Claveloux. “He said your hands would make you both rich!” “Yes,” she said, putting on her coat. “We must go back.” Claveloux felt uneasy and troubled. Nara had a miraculous faculty of attracting to her strange relationships, he thought, with ill-defined resentment. This resentment was not directed against her. He was astonished to find how great was his desire to take her in his arms, holding close to him and safe from harm that body which was so much like a young boy's and yet so completely enveloped in the aura of womanhood. All the way back to the Yates mansion he tried to convince himself that this adventure with her might have significance to her but little lasting meaning to him. He was quite prepared to give his service to molding her life, to helping her. He had been ill prepared, however, to find that he himself had need of her friendship, that she had touched in him hitherto untouched and fundamental spiritual deeps, that she had unlocked new chambers in his personality and created new hungers. Upon this realization, the atmosphere of the Yates ball would be an irritant, as he well knew. As they descended from the limousine at the side entrance the gray of morning had already lightened the black of the night sky. The door man, in livery, bow-legged and bow-armed, let them in with a suppressed yawn. He had been asleep, but in his eyes was the cynicism of an old servant of the rich who observes the return of two runaways from a party. The music of the last of the dances was filling the passageways with emphatic rhythm as Nara walked along toward the ascending stairs. In a nook she could see a débutante scolding a young man whose blank expression and blurred eyes told of the champagne Cup. The young girl's face, not more mature than a child's, was filled with the childlike horror of seeing in some one of whom she was fond the loss of personality of which she had no doubt heard but never seen before. She was saying reproachfully over and over again for want of words to conjure with: “Oh, Jack " Oh, Jack!” Nara turned at the bottom of the

stairs to offer her hand to Claveloux. Preferring not to speak, she looked up again into his face. Her expression must have impressed him with that same eagerness of youth, and that same ancient wisdom which he had seen there before. She made a gesture of haste as she mounted the stone flight and only stopped at the landing to push aside a silken curtain so that for a second she could see the ballroom, still half filled with dancing men and women, whose laughter, now a little strident or hysterical, rose like weeds of discord amid the notes of the music.

Somewhere in one of the rooms above the older men had been playing a game of poker, and one of them came stumbling down the stairs toward Nara.

“How d'ye do?” he said. “Good morning.” And then, knitting his brows in scrutiny, he saw that her face was not familiar and added: “So sorry. Thought you were Alice's friend, eh? Sorry. Great mistake.”

T the top of the stairs Miss Gammell was standing half hidden in the folds of an old tapestry, used as a loose hanging beneath the arch of stone. At the first glance Nara could see that the secretary of Mrs. Yates was white as a death mask. “What is the matter, Emma?” she asked. The other's hands were clenched, her upper lip was drawn down between her large teeth, she drew deep breaths through distended nostrils; her heart, evidently, was pounding within her tense torso. “It is more than I can bear,” she said hysterically. “Tell me,” said Nara. She put both her hands upon Emma's beautiful bare shoulders and waited until some relaxation came to the body beneath. “I can’t do it,” said Miss Gammell in a weary voice. “I tried to open the curtains, and I couldn't.” “Tell me,” insisted Nara. “Go to the little room which used to be the writing room of her husband,” she said. “Mrs. Yates is there. Please go there, and quickly! Do not wait. Open the curtains and go in. Do this for me.” “And what will I find?” “My lips can't speak the words,” said Emma. “You will find a thousand prayers of mine cracking into fragments.” Nara looked into Emma's distended eyes. “Very well,” she said. She started forward along the hall, Emma Gammell following behind, steadying herself by sliding her palm along the wall. (To be continued next week)

Uncommon Sense in Business

owner's standpoint it is not the percentage of profit per sale that counts, but the annual profit, and it is growing increasingly evident that the business which has a large annual profit on a comparatively small number of sales or turnovers of capital at a large margin per sale is not nearly so stable as the business which gains a large annual profit by a great number of turnovers at a small profit per turn. It is not necessary to guard against monopoly because monopolies kill themselves and a fair profit is not to be decided by the price charged and has nothing at all to do with invested capital. The whole trend of scientific business is to make the capital small in proportion to the sales and then make that capital move rapidly. The capital may have to be large—for the best business is done with the best facilities and these cost money—but in relation to the sales the capital should be as small as possible. You cannot animate by law; you can only restrain. Every restraint lessens

Continued from page 6

production. The only possible method by which lower prices can be achieved is a method which stimulates production—that is, which gives more to distribute. The more you have to distribute the lower will be the prices. If some form of tax could be devised which would be practically confiscatory to the man who is inefficient in business, then we should stimulate production and lower prices. But that is a thought which has not as yet been developed. The buyer, excepting in abnormal times, makes the price, but in the new order of business the seller may in a degree fix the price. Price and quality, considered together, form the real manufacturing problem. You can put cheap materials and cheap labor through ill-suited machinery, turn out a poor product, and sell it at a low price. There is no permanency in that sort of business. The real business comes from putting the very best materials through exactly fitted machinery managed by skillful labor so that an absolutely first-class article will go through at a minimum

cost. Then only can you sell a good thing at a low price, make a fair profit, and establish a solid trade. Thus we find that selling is not one department and making another, but that the two have to work in the very closest harmony if that good business is to be attained which is a service to the public and which consists of low prices and high profits. There is no other way. The new selling and the new advertising sell the produce of a tool and not simply a product.

What Service Means

T ought to be evident that an industrial plant is little better than an inconveniently assorted mass of junk unless some one is around to see that the bricks, mortar, and machinery become tools of production. And, as an industrial organization exists only because it serves human beings, it requires service from other human beings. A lack of recognition of the fact that really we are all engaged in service, however much some of us

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April 23, 1921

at times would like to think we are principally engaged in being served, is back of a good deal of the misconception of the relation of the human element in business. When we speak of the human element we are apt to think only of the men who work for wages and of their pay. This gets - us into trouble right at the outset, for, although executives and managing directors do not commonly strike and march around the place bearing placards, they are just as much a part of the problem of the human element in industry as are those men who work strictly for wages. For where the wage earners are chronically dissatisfied and sullen you will nearly always discover that the executives do not know their jobs any too well.

The Necessity for Leadership

HE idea that labor works for capital has resulted in a growing dislike for work and a growing disregard for the leadership which makes the ownership of capital possible. The agitators are fond of talking about inherited wealth and its evils, and probably it has an undue mixture of evils, but inherited wealth does not play a very important part in the ownership of capital. In this country a large share of the ownership of the means of production is usually gained by the exhibition of large qualities of leadership. And if that wealth happens to descend to owners who do not have leadership or do not have sense enough to drop out and put some one in who does have leadership enough to manage their affairs, then their wealth very rapidly disappears. But this is all aside from my point. Ownership of capital is not nearly so important as the distribution of its production, and there we have to have leadership else there will be no production to distribute. Service is not trivial; it is large and comprehensive. It comprises the deriving of the greatest possible benefit to society out of an industrial unit. This means that the owners of the capital invested, the managers of the capital, the workmen, and the public that buys must all be the better off for its existence. There is no altruism in this large view, for, unless all parties concerned are benefited by the existence of the unit, it cannot continue to exist. More than that, its prosperity is in direct proportion to the equality in which these benefits are distributed. The organization of the human element is possibly the largest part of the whole organization of business. But, however important, it is only a part, also it is something different from what we call the labor problem. For it comprehends both those who work with their hands and those who work with their heads—those who fabricate and those who direct—the worker, the technician, and the executive. One thing, however, we have learned. It is this: While the restriction of production at certain times may bring advantage either to the employer who shuts down to sell off his stock at a high price. or to the employees who make a group demand for increased wages at a moment when large production offers a big profit to the employer, yet in the end neither side really benefits. The permanent benefits come from an always larger and larger production at a decreasing cost—that is, with a minimum of waste.

The Danger of Prosperity

HE prosperity of any particular in

dustrial institution depends upon

how well it produces and thereafter sells. Therefore any labor policy which attempts to consider labor as apart from production, as a commodity, is bound to fail. One of the troubles with the average trade union is that, while asserting that labor . . not a commodity, it insists that the service of men should be bought in bulk and at a market price fixed by the union. That is, the union really insists that labor be considered as a commodity and have its price fixed.

I am inclined to view the whole question of unionism as one dependent wholly upon the circumstances. Any individual case can be decided by put

w. L. DOUGLAS

ting down what the business wants to tail -> Quality of Material be and then endeavoring to discover Re ješ8 OO SHO and §. whether its legitimate objects, which Reduced O Maintained

include the good of all concerned, can best be achieved by an agreement with a union, by an agreement with the employees, or by proceeding under no agreement whatsoever. An organization is nothing of itself. When you hear a man speak of the automatic, smooth-running machinery of big business, be sure he is talking nonsense. The wheels do not go around of themselves—they must be propelled by leadership. There is more danger, we are just beginning to realize, from overorganization than from underorganization, because the former discourages leadership. That, then, is business—the making and selling of things that people want, and at such a price that they can buy. We already know how to make and to sell—all the larger companies are fairly well developed on these sides. But that does not answer the question of why we cannot have continuously good business and avoid labor and other troubles. The answer is to be found in the fact that, the moment business starts to be good, the principles of business disappear. Here is exactly what happens. A business has been going along for a time with a very small margin of profit. Then a good crop year or some other force creates a buying power. The orders are filled; the demand for goods becomes heavier. The raw-material markets start their prices upward; the manufacturer sees that if he buys his raw materials ahead and at a low price he may be able to sell them at more than a manufacturing profit.

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FOR JMEN AND LOOJMEW THE STAMPED PRICE IS W. L. DOUGLAS PERSONAL GUARANTEE THAT THESHOES AREALWAYS WORTH THE PRICE PAID FORTHEM

YoU CAN ALWAYS SAVE MONEY BY WEARING WL-DOUGLAS SHOES sold direct from FACTORY To You ATONE PROFIT

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stance, let us say he usually makes an article of which the raw-material cost is $1, the labor and other charges $1, and the normal profit 25 cents. Material is advancing; he stands to make a large profit if he can buy a big stock of raw material at the $1 figure and then sell his article on the basis of the raw material costing $2. He can make $1.25 instead of 25 cents by this little speculation. He starts to buy ahead; others start to buy ahead, , and, of course, the demand for the raw material thus increasing, its price soars to $2. He gets his extra profit and his appetite is whetted.

The Balloon Goes Up

HERE is nothing wrong in this speculation, but it is not good business, for this reason: The price advances force advances in wages because living costs become higher. That puts a still further advance in selling prices. The retailer, too, buys ahead in the hope that he can buy low and sell high. The whole level of prices is forced forward, not so much by the natural demand as by the speculative demand. Eventually all the principles of business are abandoned, and the idea grows that anything can be sold at any price. But all wages and incomes have not gone up; as the prices rise a great many people drop out of buying. The worker tries to keep his wages ahead

of prices, but he cannot do that, and all at once we strike a point where what is asked for goods exceeds what people can pay for them. The manufacturers and retailers are left with great stocks of goods—for the trouble with speculation is that no one has ever yet discovered where to stop. The factories close in the hope that their stocks can be sold off at high prices. By closing they still further reduce the buying power, for no wages are distributed. The retailers do not buy because they too have high-priced goods ; that they hope to sell. None of them do sell their goods at the prices they ask; they finally have to cut and slash and sell at a loss. They commonly lose all the money they have made out of speculation, and the, whole business life has to be rebuilt with

new wage and price scales. We have

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just seen all this happen. It has happened many, many times before. In fact, most of the dangers in business arise out of putting the speculative side above the fabricating or merchandising. It is just as dangerous for a corporation to speculate in goods as to speculate in the stock market; in many ways it is more dangerous because very few staple markets are nearly so well organized as is the stock market, and hence one cannot often get so quickly out of goods as out of stocks.

The Temptation to Gamble

HE divorce of manufacture and speculation would go far toward the stabilization of industry. The present policy is unscientific. A manufacturer will commonly offer his wares for future delivery at a price which he arrived at by guessing the course of the raw-material market. If, at the time of delivery, the price of the raw stuff has gone down, then he will try, by curtailing production, to keep up the market price on the finished product so that both he and the customer may get out at the price quoted. Curtailing production further depresses raw-material prices and opens wide the door of disaster to the man who has bought far ahead of his actual needs. The mixing of manufacturing . and selling with speculation is the greatest of all deterrents to sound business practice and organization. It is the function of a manufacturer to manufacture, of a merchandiser to merchandise. They should look for their recompense to the results of the skill with which they perform their functions. Their profits per dollar must necessarily be small—and arduously earned. They cannot expect to become millionaires overnight. It is hard for men pursuing this conservative course to see others come into the market and, without manufacturing or merchandising skill, clear stupendous profits merely by buying low and selling high. If a market during a considerable period continues to rise, one will find very few business men who are able to keep their heads and to remember that a day of reckoning is bound to come. Almost without exception they will cast aside the principles upon which they built business and engage in a mad scramble of speculation. It is this business of speculation that is at the bottom of nearly all of our industrial trouble. The demand of the country for goods is fairly normal. The charts show that “good times” give a bulge in the normal line of business volume of only about 15 per cent, while very “bad times” will not go 15 per cent below the line. A break in business may go from 15 per cent above to the same distance below and thus be serious, but the small increase or decrease in actual demand that spells prosperity or adversity is much smaller than the price range between good and bad times.

They Kept Their Heads

UT what can be done about it? It is noteworthy that the concerns which came through the recent depression without serious loss were those t’.at did not change their way of taking profits. They bought raw materials or goods according to their needs and sold them at the raw-material cost plus a fee for merchandising or manufacturing. They kept their heads, and although they suffered with all the rest from lack of business, they did not have to take losses in addition. They did not speculate. Now, therefore, if this principle, of buying only according to planned needs and then selling at the price paid for raw material and labor plus a service fee, were general, should not we be far along toward keeping an industrial level? The raw-material markets must fluctuate to a certain degree because they depend on nature, but it is not nature—it is the desire of man to make a profit by speculation—that causes the heavy changes. Only one out of ten thousand really makes any profit by the operation. Many get caught. That

does not matter. What does matter is divorcing business from speculation. For then, with speculative buying out, we cannot have that marking up of prices that eventually gets ahead of the power of the people to buy and brings depression and unemployment. If the finished price of goods were only the raw-material price plus the charge for manufacturing, then there would not be the frenzied buying ahead on speculation, and there would be no inducement for raw-material speculation. And thus the price of goods and the buying power of the people would remain fair. ly in operation. This shutting down and opening up is the curse of business. Every worker is afraid of unemployment. He wants to get “his” while the work is on, and in that he cannot be blamed, for, although he may be paid by the week, he has to live by the year. Therefore some of them try to hold down their jobs by doing the least instead of the largest amount of work. The owner too, on his side, is always afraid of “overproduc. tion.” That means to him what unemployment’ means to the worker. Take away the fear of unemploy. ment and the fear of overproduction, and we shall rid ourselves of most of the troubles of industry, and hence of most of the troubles of our whole social life. For everything that happens in industry is reflected in life. Without going into the technical details, a good share of our troubles is to be traced to the fact that we use only about one-half of our industrial facilities year in and year out—that is, we use scarcely more... than one-half of all our opportunities to produce goods that people need. Industry does not commonly function to more than 50 per cent of its capacity. And it does not because it is not planned.

Things That Will Help

T is the part of science to overcome difficulties. Anybody can accept things as they are. Unscientific business—that is, unplanned business—accepts things as they are. The unscientific business man accepts good times with perhaps a tendency to give full credit to himself for bringing them on, but, anyhow, he is glad. Also, and eventually, he accepts bad times as an excuse for lack of forethought, and he is sorry. The principle that a manufacturer shall contribute a service and simply add the cost of that service to the value of the raw material, thus keeping his prices consonant with the buying power of the public, will have little force if

somewhere, in the processes before him

or in the processes after him, the speculative element so controls the situation that he cannot.

The very large business can have this control of the product from the rawmaterial stage right through to the consumer, but the smaller man alone, and with less capital, cannot have such control. What he can have is the control through buying and selling associations, through cooperation with his fellows. And that is what is coming about in a number of trades.

Now, all of this sounds complex. But really it is very simple. It is exactly the course which some of the large and intelligent corporations pursue. It is more or less what Germany did before the war. The Krupps, for instance, did not have a day of unemployment and never laid off a man in all their years before the armistice, and that was not because they made munitions, for making munitions, excepting in war time, has never been their largest engagement.

Don't you see really how little to do with the subject have most of the legislative and other cure-alls that are brought out from time to time? We have, in effect, been treating smallpox as a skin disease. We have now the opportunity for the Government to help in the curing of business. The Government cannot make business, but it can teach business. It can teach that much that we hold to be incurable is easily curable.

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Edward N. Hurley-Cecil Roberts-Berthe K.Mellett Richard Washburn Child-HectorTurnbull-G.W. Sutton, Jr.

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cottier's, The National Weekly, April 30, 1921.
Post office Department, Ottawa. Canada, bu

Volume 67. Number 18. Entered as secona
P. F. Couler & Son Company, 416 West 13th St., New York, N. Y.

-reass matter. July 28, 1914. at the Post office at New York. N. Y. under the Act of March 3, 1879, and at the
Price: 5 cents a copy, so-so a year: 10 cents a copy, sj.00 a year on Canada and F.

oreign Countries

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