Random Reminiscences of Men and Events

we should go back to hand labour and throw away our efficient machines--and the sober good sense of the people will accept this fact when they have studied and tried it out. Just see how the list of stockholders in the great corporations is increasing by leaps and bounds. This means that all these people are becoming partners in great businesses. It is a good thing--it will bring a feeling of increased responsibility to the managers of the corporations and will make the people who have their interests involved study the facts impartially before condemning or attacking them. On this subject of industrial combinations I have often expressed my opinions; and, as I have not changed my mind, I am not averse to repeating them now, especially as the subject seems again to be so much in the public eye. The chief advantages from industrial combinations are those which can be derived from a cooeperation of persons and aggregation of capital. Much that one man cannot do alone two can do together, and once admit the fact that cooeperation, or, what is the same thing, combination, is necessary on a small scale, the limit depends solely upon the necessities of business. Two persons in partnership may be a sufficiently large combination for a small business, but if the business grows or can be made to grow, more persons and more capital must be taken in. The business may grow so large that a partnership ceases to be a proper instrumentality for its purposes, and then a corporation becomes a necessity. In most countries, as in England, this form of industrial combination is sufficient for a business co-extensive with the parent country, but it is not so in America. Our Federal form of government making every corporation created by a state foreign to every other state, renders it necessary for persons doing business through corporate agency to organize corporations in some or many of the different states in which their business is located. Instead of doing business through the agency of one corporation they must do business through the agencies of several corporations. If the business is extended to foreign countries, and Americans are not to-day satisfied with home markets alone, it will be found helpful and possibly necessary to organize corporations in such countries, for Europeans are prejudiced against foreign corporations, as are the people of many of our states. These different corporations thus become cooeperating agencies in the same business and are held together by common ownership of their stocks. It is too late to argue about advantages of industrial combinations. They are a necessity. And if Americans are to have the privilege of extending their business in all the states of the Union, and into foreign countries as well, they are a necessity on a large scale, and require the agency of more than one corporation. The dangers are that the power conferred by combination may be abused, that combinations may be formed for speculation in stocks rather than for conducting business, and that for this purpose prices may be temporarily raised instead of being lowered. These abuses are possible to a greater or less extent in all combinations, large or small, but this fact is no more of an argument against combinations than the fact that steam may explode is an argument against steam. Steam is necessary and can be made comparatively safe. Combination is necessary and its abuses can be minimized; otherwise our legislators must acknowledge their incapacity to deal with the most important instrument of industry. In the hearing of the Industrial Commission in 1899, I then said that if I were to suggest any legislation regarding industrial combinations it would be: First, Federal legislation under which corporations may be created and regulated, if that be possible. Second, in lieu thereof, state legislation as nearly uniform as possible, encouraging combinations of persons and capital for the purpose of carrying on industries, but permitting state supervision, not of a character to hamper industries, but sufficient to prevent frauds upon the public. I still feel as I did in 1899. THE NEW OPPORTUNITIES I am far from believing that this will adversely affect the individual. The great economic era we are entering will give splendid opportunity to the young man of the future. One often hears the men of this new generation say that they do not have the chances that their fathers and grandfathers had. How little they know of the disadvantages from which we suffered! In my young manhood we had everything to do and nothing to do it with; we had to hew our own paths along new lines; we had little experience to go on. Capital was most difficult to get, credits were mysterious things. Whereas now we have a system of commercial ratings, everything was then haphazard and we suffered from a stupendous war and all the disasters which followed. Compare this day with that. Our comforts and opportunities are multiplied a thousand fold. The resources of our great land are now actually opening up and are scarcely touched; our home markets are vast, and we have just begun to think of the foreign peoples we can serve--the people who are years behind us in civilization. In the East a quarter of the human race is just awakening. The men of this generation are entering into a heritage which makes their fathers' lives look poverty-stricken by comparison. I am naturally an optimist, and when it comes to a statement of what our people will accomplish in the future, I am unable to express myself with sufficient enthusiasm. There are many things we must do to attain the highest benefit from all these great blessings; and not the least of these is to build up our reputation throughout the whole world. The great business interests will, I hope, so comport themselves that foreign capital will consider it a desirable thing to hold shares in American companies. It is for Americans to see that foreign investors are well and honestly treated, so that they will never regret purchases of our securities. I may speak thus frankly, because I am an investor in many American enterprises, but a controller of none (with one exception, and that a company which has not been much of a dividend payer), and I, like all the rest, am dependent upon the honest and capable administration of the industries. I firmly and sincerely believe that they will be so managed. THE AMERICAN BUSINESS MAN You hear a good many people of pessimistic disposition say much about greed in American life. One would think to hear them talk that we were a race of misers in this country. To lay too much stress upon the reports of greed in the newspapers would be folly, since their function is to report the unusual and even the abnormal. When a man goes properly about his daily affairs, the public prints say nothing; it is only when something extraordinary happens to him that he is discussed. But because he is thus brought into prominence occasionally, you surely would not say that these occasions represented his normal life. It is by no means for money alone that these active-minded men labour--they are engaged in a fascinating occupation. The zest of the work is maintained by something better than the mere accumulation of money, and, as I think I have said elsewhere, the standards of business are high and are getting better all the time. I confess I have no sympathy with the idea so often advanced that our basis of all judgments in this country is founded on money. If this were true, we should be a nation of money hoarders instead of spenders. Nor do I admit that we are so small-minded a people as to be jealous of the success of others. It is the other way about: we are the most extraordinarily ambitious, and the success of one man in any walk of life spurs the others on. It does not sour them, and it is a libel even to suggest so great a meanness of spirit. In reading the newspapers, where so much is taken for granted in considering things on a money standard, I think we need some of the sense of humour possessed by an Irish neighbour of mine, who built what we regarded as an extremely ugly house, which stood out in bright colours as we looked from our windows. My taste in architecture differed so widely from that affected by my Irish friend, that we planted out the view of his house by moving some large trees to the end of our property. Another neighbour who watched this work going on asked Mr. Foley why Mr. Rockefeller moved all these big trees and cut off the view between the houses. Foley, with the quick wit of his country, responded instantly: "It's invy, they can't stand looking at the ividence of me prosperity." In my early days men acted just as they do now, no doubt. When there was anything to be done for general trade betterment, almost every man had some good reason for believing that his case was a special one different from all the rest. For every foolish thing he did, or wanted to do, for every unbusiness-like plan he had, he always pleaded that it was necessary in his case. He was the one man who had to sell at less than cost, to disrupt all the business plans of others in his trade, because his individual position was so absolutely different from all the rest. It was often a heart-breaking undertaking to convince those men that the perfect occasion which would lead to the perfect opportunity would never come, even if they waited until the crack o' doom. Then, again, we had the type of man who really never knew all the facts about his own affairs. Many of the brightest kept their books in such a way that they did not actually know when they were making money on a certain operation and when they were losing. This unintelligent competition was a hard matter to contend with. Good old-fashioned common sense has always been a mighty rare commodity. When a man's affairs are not going well, he hates to study the books and face the truth. From the first, the men who managed the Standard Oil Company kept their books intelligently as well as correctly. We knew how much we made and where we gained or lost. At least, we tried not to deceive ourselves. My ideas of business are no doubt old-fashioned, but the fundamental principles do not change from generation to generation, and sometimes I think that our quick-witted American business men, whose spirit and energy are so splendid, do not always sufficiently study the real underlying foundations of business management. I have spoken of the necessity of being frank and honest with oneself about one's own affairs: many people assume that they can get away from the truth by avoiding thinking about it, but the natural law is inevitable, and the sooner it is recognized, the better. One hears a great deal about wages and why they must be maintained at a high level, by the railroads, for example. A labourer is worthy of his hire, no less, but no more, and in the long run he must contribute an equivalent for what he is paid. If he does not do this, he is probably pauperized, and you at once throw out the balance of things. You can't hold up conditions artificially, and you can't change the underlying laws of trade. If you try, you must inevitably fail. All this may be trite and obvious, but it is remarkable how many men overlook what should be the obvious. These are facts we can't get away from--a business man must adapt himself to the natural conditions as they exist from month to month and year to year. Sometimes I feel that we Americans think we can find a short road to success, and it may appear that often this feat is accomplished; but real efficiency in work comes from knowing your facts and building upon that sure foundation. Many men of wealth do not retire from business even when they can.