DANE S. McL.AUCHL.AN 
 
 _ 
 

 
 THE MAKING OF A MERCHANT 
 
 THER PAPERS 
 BY HARLOW N. . HIGINBOTHAM 
 
 Very truly yours, 
 
 J* 
 
 ^4?ii4/l / ?ful4<v(s 
 
 VECHTEN & ELLIS 
 
 PHILOSOPHER PRESS 
 
 AT THE 
 
 W A. U 
 
 SIGN 
 
 S A 
 
 O F 
 
 U 
 
 THE GREEN PINK TREK 
 
 WISCONSIN
 
 Of this edition of THE MAKING OF 
 A MERCHANT one hundred copies 
 were privately printed at THE PHIL- 
 OSOPHER PRESS in WAUSAU WISCONSIN 
 for MR. HARLOW N. HIGINBOTHAM. 
 
 QO/31
 
 THE MAKING OF A MERCHANT is 
 here reprinted from The Saturday 
 Evening Post, of Philadelphia, and 
 to the editor acknowledgement is 
 here made for the courtesy of per- 
 mission to reprint.
 
 TABLE OF CONTENTS. 
 
 THE MAKING OF A MERCHANT 
 
 LAYING THE FOUNDATION 11 
 
 IN BUSINESS FOR HIMSELF 24 
 
 AN EMPLOYER OF OTHERS 36 
 
 THE CREDIT-MAN 56 
 
 LIFE INSURANCE 69 
 
 FIRE INvSURANCE . . . .80
 
 THE MAKING OF A MERCHANT
 
 LAYING THE FOUNDATION 
 
 N the subject of the mis- 
 takes most frequent 
 among boys and young 
 men entering on a business 
 life, comment of any 
 practical value is certain to meet with one 
 criticism which may be epitomized in 
 the single word "commonplace!" And 
 why? Because these faults are so 
 common that they are impressed on the 
 attention of every large employer of 
 labor, particularly in commercial lines, and 
 he is compelled to reiterate them with 
 emphasis and tiresome persistency. If 
 they were less common, less universally 
 recognized and uniformly disapproved 
 by employers, their enumeration would 
 not appeal to their victims as common- 
 place, stereotyped and uninteresting. 
 11
 
 12 THE MAKING OF A MERCHANT 
 
 Occasionally, however, a boy or 
 young man of sufficient character and 
 receptivity is found who is willing 
 and eager to profit by advice 
 from those of long experience, even 
 though it may be given in painfully 
 familiar terms and may sound 
 sage, tedious and "preachy." It is in 
 the hope that arMeast a few of the 
 younger readers of THE SATURDAY 
 EVENING POST are animated by this 
 spirit of tractability that these 
 suggestions and comments are made by 
 one whose views are the result of 
 thirty-eight years of experience in 
 unbroken connection with an enterprise 
 that has had many changes in the 
 personnel of proprietorship and now has 
 more than five thousand employees. 
 
 In the course of that service he has 
 filled various positions, from the very 
 humblest to that of part proprietor and 
 manager. With the exception of his 
 earliest years, all this period of labor has 
 brought him into direct personal contact 
 with the young employees, and the
 
 LAYING THE FOUNDATION 13 
 
 responsibilities of his position have 
 compelled a daily and unremitting 
 watchfulness of their conduct with a 
 view to determining the faults and 
 mistakes which most beset the young 
 adventurer into the mazes of commercial 
 activity. 
 
 S the majority of business 
 positions to-day are filled by 
 men who entered the harness 
 as boys, the manner in which a boy 
 looks at his first employment is of 
 fundamental importance. Generally he 
 does not take himself or his duties with 
 sufficient seriousness. He is inclined to 
 think that he is "only a boy, " and that 
 his work is of boyish consequence. 
 Nothing could be further from the real 
 facts than such an impression. To 
 realize this it is only necessary to go into 
 the office of any large establishment the 
 business heart of a commercial enterprise 
 and observe the swarms of boys that 
 flit between the desks of the older 
 workers.
 
 14 THE MAKING OF A MERCHANT 
 
 Who is always at the elbow of the 
 executive head of an establishment of 
 this kind? A boy! He comes into 
 closer and more continuous contact with 
 the proprietor, the general manager, or 
 the department head than any 
 adult. Because he is "only a boy" 
 he is party to private conversations 
 and transactions from which even 
 the "confidential man" might be 
 barred. This means responsibility and 
 opportunity, and his conduct is, there- 
 fore, of greater personal interest and 
 moment to the business executive than 
 he is generally inclined to think. 
 
 Boys fail to satisfy the demands 
 made upon them more through lack of 
 promptness and punctuality than by 
 any other reason. Thousands of 
 dismissals, rebuffs, discouragements and 
 failures at the beginning of a career 
 could have been avoided by these small 
 workers had they made a cardinal point 
 of being always on hand in their proper 
 places during every moment when 
 subject to duty. It is not enough that
 
 LAYING THE FOUNDATION IS 
 
 they should be generally at their 
 stations. The time is sure to come, no 
 matter how sparingly they allow 
 themselves the indulgence of straying 
 only a little from the rigid requirements 
 of office rules, when they will be suddenly 
 wanted and will be found wanting! 
 
 Many fall into the habit of being a 
 few rods, or perhaps only a few feet, from 
 the spot where they are expected to 
 be. This means that the busy employer 
 must leave his desk or resort to a little 
 extra effort to secure their attention. 
 The actual inconvenience may seem 
 trifling, but he is annoyed. If very 
 charitable, he says ''that's the boy of 
 it," and patiently gives the little toiler 
 another chance. But the boy has failed 
 to come up to reasonable requirements, 
 and suffers accordingly in the estimation 
 of the man who depends upon him for 
 certain service.
 
 16 THE MAKING OF A MERCHANT 
 
 NOTHER seemingly petty 
 fault very common to the 
 younger employees is the 
 habit of watching the clock. This is 
 little short of infuriating to the man 
 who is genuinely and seriously absorbed 
 in his business. It tells him that the 
 spirit of time-serving instead of the 
 welfare of the business is the controlling 
 force in the work of such an 
 employee. This is peculiarly irritating 
 to the man who has a thoughtful and 
 conscientious grasp of the serious side of 
 business life. Any large employer of 
 labor, particularly in office positions, will 
 place heartfelt emphasis on the advice: 
 Let the clock take care of itself, and 
 show a disposition to be useful without 
 regard to time or closing-bells! This is 
 a secret by which a boy or young man of 
 even mediocre talents may win the 
 approval of those whom he serves. 
 "Anything but a time-server!" has been 
 the exasperated exclamation that has 
 preceded many a dismissal. 
 
 Quickness to perceive the little
 
 LAYING THE FOUNDATION 17 
 
 things which annoy a busy executive and 
 promptness in removing them has 
 secured the promotion of scores of boys 
 and young men who, as the saying 
 goes, "have their wits about them." 
 Proprietors and managers of large 
 businesses are human and susceptible 
 to those delicate personal attentions 
 which count so largely in home and 
 social life. And the fact that such an 
 attention comes from a boy, and amid 
 the hurry of business and the commercial 
 surroundings of an office, only goes to 
 make these exhibitions of though tfulness 
 more acceptable, pleasing and con- 
 spicuous. 
 
 As to the matters of conduct on the 
 part of the employees which may appear 
 to be of greater moment, it is worth 
 while to lay stress on the characteristic 
 of decision the inclination to act quickly 
 on individual responsibility and stand by 
 the consequences. Rashness may be less 
 at a premium in commercial than military 
 life; but timidity is as much to be 
 avoided in the one as the other field of
 
 18 THE MAKING OF A MERCHANT 
 
 activity. Better, by far, make an 
 occasional mistake of judgment than to 
 halt and hesitate over the routine item 
 of business and consult a superior on 
 affairs which are not of sufficiently 
 unusual a character to demand the 
 special exercise of executive discretion 
 and authority. 
 
 EADINESS cheerfully to go 
 anywhere at a moment's notice 
 and at whatever personal 
 inconvenience, to remain absent from 
 home for any length of time that the 
 exigencies of business may demand, and 
 to make the interests of the employer his 
 own, is a most appreciated quality in an 
 employee. It never fails to secure 
 appreciation. A turning-point of this 
 kind in my own experience so aptly 
 illustrates this observation that its 
 introduction here may be pardonable. 
 
 In those early days, travel by rail 
 was a positive hardship compared with 
 present conditions. Sleeping-cars were 
 unknown, and trains jolted over rough
 
 LAYING THE FOUNDATION 19 
 
 roadbeds at snail pace. It took 
 twenty-four hours to go from Chicago 
 to the Missouri River, and the most 
 active young man was not anxious 
 to leave his home and suffer the 
 inconvenience and hard knocks of such 
 a trip. One day, however, I was called 
 into Mr. Leiter's office and asked if I 
 would go out to a distant prairie town 
 and attempt the collection of a bill of 
 fourteen hundred dollars against a 
 country merchant. That meant 
 much more then than it would 
 now, and although I realized the 
 responsibility of the mission, and its 
 difficulties and hardships, I promptly 
 and cheerfully accepted the proposal. 
 
 From the moment I took the train 
 I had no other thought than that of 
 accomplishing the object for which I had 
 been sent. I determined to get that 
 money no matter how long I had to stay 
 for it, or how much hard work or 
 inconvenience might be involved. 
 
 Arriving at the little village, I found 
 that a representative of another wholesale
 
 20 THE MAKING OF A MERCHANT 
 
 house, to which the merchant was 
 indebted in the amount of four thousand 
 dollars, had been there before me, looked 
 the ground over and left on the next 
 train, abandoning his mission as hopeless 
 for the time being. 
 
 I was not "making trains," and 
 frankly told the storekeeper that I had 
 come to stay until I could go away with 
 the firm's money in my pocket. When 
 he grasped the situation, he disclosed all 
 his private business affairs to me, and I 
 found he owned the local grain 
 elevator, the hay scales and other 
 "outside deals. " Then I secured from 
 him an option on these, went to other 
 men in the town and disposed of 
 them. This reduced his account by 
 several hundred dollars. 
 
 Then I made a list of the accounts 
 he held against farmers and other 
 residents, secured the notes of the most 
 responsible debtors, and discounted their 
 paper at the bank. Finally I took back 
 to Chicago a number of pieces of valuable 
 dress goods of which the merchant had
 
 LAYING THE FOUNDATION 21 
 
 an overstock. All these things satisfied 
 the claim which I had been sent to 
 collect. 
 
 It was a proud moment for me when 
 I went into Mr. Leiter's private office 
 and gave an account of my week in the 
 prairie town collecting a bad debt. That 
 trip had a strong and direct influence in 
 my advancement. It taught me a 
 lesson, and if it may do as much for any 
 young man of to-day its narration is 
 justified. 
 
 CCASIONALLY employees 
 count on their church and 
 Sunday-school connections 
 and activities as a means of impressing 
 their emyloyers with their worthiness. 
 This is a misjudgment of human 
 nature, and a mistake. Nor is this view 
 any reflection on churches or religion 
 although it is an undeniable fact that 
 to-day a man's credit is not strengthened 
 by his church alliances. That which 
 injures a young man's standing with his 
 employer in this event is the fact that he
 
 22 THE MAKING OF A MERCHANT 
 
 seeks, directly or indirectly, to make 
 business capital of his religious 
 affiliations. It is not what a man believes 
 or professes, but what he is and does 
 that gives him standing and credit. 
 
 A man may make a fad of so good 
 a thing as a Sunday-school, and 
 it matters little what the fad followed by 
 an employee may be, the moment its 
 existence is known to the employer the 
 latter regards it as an interloping interest 
 likely to distract the mind from 
 business. This feeling may be selfish, and 
 perhaps unjust, but its recognition is 
 not to be ignored by the discreet 
 employee. 
 
 The knowledge that an employee 
 belongs to a club that is not distinctly 
 beyond his means is not a detriment to 
 his advancement. Often it is an 
 advantage. An early marriage, unless 
 unfortunate, is a benefit to the young 
 salaried business man. It is difficult to 
 conceive of an employer so devoid of 
 human feeling that he will not take into 
 consideration the dependent wives and
 
 LAYING THE FOUNDATION 23 
 
 children in dismissing and hiring 
 employees. If compelled to choose 
 between a single and married man of 
 equal merit, the conscientious employer 
 will invariably select the latter. Generally 
 he will even "stretch a point" in favor of 
 the man of family. 
 
 The young man who saves and 
 invests a portion of his earnings always 
 commands the respect and confidence of 
 his employer. While building and loan 
 associations have done much to stimulate 
 this spirit of prudence, I am convinced 
 that good bonds offer a better, safer and 
 more profitable medium of savings 
 investment.
 
 IN BUSINESS FOR HIMSELF 
 
 N discussing the entry of a 
 young man into the retail 
 business there are certain 
 things which are so funda- 
 mental that they must be 
 taken for granted. Without them there 
 can be no permanent or substantial 
 success in any undertaking. Among 
 these requirements are character, 
 integrity, and a fair "business head." 
 
 The first rule which a young 
 merchant going into the retail trade 
 should make for himself with heroic 
 determination is that of doing a business 
 consistent with his capital. Failure to 
 observe this rule is the rock on which 
 thousands of promising commercial 
 undertakings have gone to pieces. 
 Whether the capital put into the 
 
 24
 
 IN BUSINESS FOR HIMSELF 25 
 
 enterprise be large or small, its size 
 should absolutely govern the volume of 
 business. 
 
 What should we think of an 
 architect who would start a building on 
 a foundation forty feet square and then 
 build without reference to its limitations 
 until the structure completely overhung 
 the underpinning on all sides? Yet this 
 is precisely what thousands of young 
 retail merchants throughout the country 
 are attempting to do. They try to 
 brace up their top-heavy structure with 
 the timber of fictitious credit. These 
 may hold it in fair weather, but when 
 the period of storm and stress comes as 
 come it surely will this false support 
 will come crashing down and the 
 enterprise tumble with it. 
 
 My individual conviction is that the 
 only way in which a retail business 
 can be conducted on lines absolutely 
 consistent with its capital is on the cash 
 basis. For this reason I would not 
 advise any young man to make a venture 
 in retail trade on credit lines. It is too
 
 26 THE MAKING OF A MERCHANT 
 
 much like working in the dark. Almost 
 inevitably the accounts grow beyond 
 your control, and the business structure 
 expands at the top while the foundations 
 weaken. 
 
 In certain communities conditions 
 seem to be such that it is practically 
 impossible for the young merchant to 
 introduce the strictly cash method of 
 doing business. In this event he has 
 but one hope of success that is, to 
 watch his accounts with a zealous 
 vigilance that never relaxes, and to act 
 with promptness and decision in the 
 matter of credits and collections. This 
 may require a high order of business and 
 moral courage, but he must be able to 
 do it if he would avoid wreck. 
 
 In his dealings with his creditors, the 
 wholesalers, let the young merchant keep 
 firmly to the rule of incurring no 
 obligation that he cannot with certainty 
 meet in sixty days. Too much emphasis 
 cannot be placed on his connections with 
 the wholesale house or houses from 
 which he obtains his goods. At the
 
 IN BUSINESS FOR HIMSELF 27 
 
 very beginning of his venture let him go 
 to the credit man of the wholesale 
 establishment and state his case without 
 reservation. 
 
 O thorough and searching are 
 the means employed by the 
 big wholesale houses to 
 obtain an accurate knowledge of the 
 standing and affairs of their debtors 
 that it is practically hopeless for the 
 latter to attempt any concealment of 
 unfavorable conditions. Again, the 
 credit men of the wholesale houses are 
 the keenest men in the business, and 
 their judgment of human nature is quick 
 and shrewd. Then it should be 
 constantly held in mind that the honesty 
 of a patron seeking credit is half the 
 battle, and that their confidence is won 
 by an ingenuous statement of affairs 
 that does not spare the one who is 
 asking for credit. 
 
 The first interview of the young 
 retail merchant with the credit man of 
 the wholesale house is sometimes a
 
 28 THE MAKING OF A MERCHANT 
 
 trying ordeal in which many uncomforta- 
 ble questions have to be answered. This 
 may incline the beginner in the retail 
 trade to avoid the credit man after the 
 initial interview has been successfully 
 passed. He could make no greater 
 mistake than to allow this association 
 with a disagreeable ordeal to alienate 
 him from a close acquaintance with the 
 credit man. To the contrary, he should 
 improve every opportunity to strengthen 
 and build up a confidential relationship 
 with that important functionary of the 
 wholesale house. Not once, but 
 constantly, should he acquaint the credit 
 man with the real condition of his 
 affairs, and should ask and follow the 
 advice of this counselor on all important 
 matters. The more he does this the 
 better will be his standing with the 
 house and the safer will be his 
 course. Advising patrons is one of the 
 most important duties of the credit man. 
 I place great emphasis on this because 
 its importance is often overlooked by 
 young men starting in the retail trade.
 
 IN BUSINESS FOR HIMSELF 29 
 
 Another cardinal point in the success 
 of the retail merchant is that of having 
 a small but frequent influx of new 
 goods. This is founded on a universal 
 trait of human nature which craves 
 "something new." There is a subtle 
 flattery, practically irresistible, in being 
 shown goods that have not been exposed 
 to the eyes of others in the town. 
 
 "Here are some of the latest 
 styles," says the retailer as he reaches 
 into a packing-box and takes out a bolt 
 of dress goods. "They have just come 
 in, and no one has seen them. You may 
 have first choice, if you wish." This 
 argument seldom fails to effect an 
 immediate sale. And even if it does not 
 do so, the woman to whom this courtesy 
 is shown goes away with the impression 
 that the young merchant is wide awake 
 and thoroughly up with the times. 
 
 The dealer who puts in a small 
 stock at the start and keeps constantly 
 adding thereto with fresh but limited 
 invoices has an immense advantage over 
 the tradesman who buys in large
 
 30 THE MAKING OF A MERCHANT 
 
 quantities and does not freshen his 
 stock for six months at a time. In these 
 days women are the most numerous and 
 important customers of the retailer, and 
 they do not like to see the same old 
 goods. They will trade where they can 
 find something fresh every time they 
 call. 
 
 LL big businesses have had 
 small beginnings. I do not 
 know an exception to this 
 rule. This means that a successful 
 enterprise must have a normal, sub- 
 stantial and legitimate growth. If a 
 young merchant finds himself in quarters 
 larger than he at first demands, he 
 should change for smaller ones or 
 partition off a portion of his room at the 
 back. The latter is better than 
 attempting to put in a larger stock of 
 goods than his trade really demands or 
 his resources warrant. It is also better 
 judgment than to attempt to "spread" 
 his stock over a large space for the mere 
 purpose of filling up.
 
 IN BUSINESS FOR HIMSELF 31 
 
 While the proprietor should be the 
 first at the store in the morning and the 
 last to leave at night, and should be 
 always ready to do anything that he 
 would ask his humblest clerk to do, he 
 should always remember that he must 
 do the headwork of the business. He 
 can hire a boy to candle eggs, sweep 
 out, and deliver goods, but if he does 
 not do the thinking and planning it will 
 not be done. That is something that 
 the most faithful and conscientious clerk 
 cannot do for him. If he allows the 
 physical part of the work so to encroach 
 on his time and energies that he does 
 not find opportunity for a frequent and 
 thoughtful survey of his business, he 
 makes a great and common mistake. This 
 principle is stated forcibly, if uncouthly, in 
 the old expression, "Let your head save 
 your heels. ' ' 
 
 The young merchant who takes 
 time, at regular intervals, to make a 
 close summary and analysis of his 
 accounts, and takes his bearings so that 
 he knows precisely his position on the
 
 32 THE MAKING OF A MERCHANT 
 
 sea of business, is the man who will 
 succeed. In other words, the mental 
 part of the business is its most important 
 feature. However, I hold that, at more 
 or less frequent intervals, the storekeeper 
 should personally do every task about 
 the establishment for the sake of 
 influence and example. 
 
 Let him take the broom from the 
 hand of the boy and show the latter 
 how to "sweep out" without stirring up 
 a dust or leaving dirt in the corners; this 
 will give him added respect in the eyes of 
 the boy, and the store will thereafter be 
 cleaner by reason of the example; and so 
 with every other task, no matter how 
 trivial or humble. 
 
 Then the young merchant will do 
 well always to bear in mind that courtesy 
 is the biggest part of his capital. This 
 does not mean that he should be 
 obsequious or fawning, but simply and 
 invariably attentive to all who enter his 
 place of business.
 
 IN BUSINESS FOR HIMSELF 33 
 
 HE matter of advertising is not 
 an unimportant detail. In the 
 local newspaper the young 
 retailer may wisely use a limited amount 
 of display advertising space. This will 
 be most advantageously occupied by a 
 simple, dignified and modest announce- 
 ment of new goods. Like his stock, the 
 subject matter of his advertisement 
 should be kept fresh by constant 
 change. It should also have the 
 individual quality both in its wording, 
 form and type something that expresses 
 the personal good taste of the advertiser. 
 There is no doubt that a neat 
 circular or folder sent personally to 
 patrons is a strong method of advertis- 
 ing. Such announcements may be 
 delivered by messenger or distributed 
 through the mails. Best of all is the 
 neat, personal note written to the 
 merchant's best customers, calling 
 attention to fresh arrivals of goods. The 
 spare moments of a young merchant may 
 be put to a far less effective use than this 
 writing of individual advertising letters.
 
 34 THE MAKING OF A MERCHANT 
 
 It is scarcely possible to put too 
 much emphasis on attractive window 
 displays. Here, again, the element of 
 constant freshness plays an important 
 part. The displays should be frequently 
 changed, and, while striking, they should 
 never fail to have the quality of good 
 taste. Good statuary, pictures, curios, 
 and art objects of every kind may be 
 used to unfailing advantage in dressing 
 windows, and they always command the 
 attention and admiration of women. It 
 pays the enterprising merchant to secure 
 the loan of works of art for this purpose 
 and they are not difficult to obtain. 
 
 In looking after all these details, 
 which are of importance in the general 
 result, the young retailer should not fail 
 to keep a proper perspective of his 
 business as a whole. He should know 
 just where he is sailing, and be sure that 
 he is not drifting. In this way he will 
 become a safe pilot, and will bring his 
 enterprise into the harbor of success and 
 independence. And the prosperous 
 retail merchant is a very independent and
 
 IN BUSINESS FOR HIMSELF 35 
 
 respected member of the community in 
 this country, where the honest tradesman 
 commands the regard to which he is 
 entitled.
 
 AN EMPLOYER OF OTHERS 
 
 N a preceding paper I 
 attempted some practical 
 suggestions to the end of 
 indicating how the young 
 employee may secure favor 
 and advancement with his employer. 
 There, only the conduct of the servant 
 was considered, and nothing was said 
 regarding the responsibilities of the 
 master. My convictions concerning the 
 latter are so strong that I can scarcely 
 leave the discussion of any phase of 
 mercantile life without an expression of 
 opinion on this vital point. 
 
 A very large proportion of the 
 Americans who have builded great 
 businesses and made their names familiar 
 to a large public confess that they find 
 their chief pleasure in following the daily 
 
 36
 
 AN EMPLOYER OF OTHERS 37 
 
 routine of traffic at a time when they 
 have no longer any financial necessity for 
 so doing. For this, we as a nation are 
 sharply criticised by our European 
 friends, who declare that in the absorbing 
 race for success we forget how to enjoy 
 the fortunes after they have been 
 secured. These critics say the most 
 pitiable spectacle in the world is the 
 millionaire who becomes a slave to the 
 habit of money-getting and cannot take 
 himself from his sordid tasks. To a 
 degree this observation is sadly true, and 
 America has very many men of great 
 fortune who appear to have small 
 capacity for any pleasure other than that 
 of increasing their wealth. But there is 
 another side to the picture of the wealthy 
 business man who sticks to his desk long 
 after his fortune is greater than he could 
 reasonably spend during the remainder 
 of his lifetime. 
 
 It would be well-nigh impossible to 
 convince men of a certain class that very 
 many of these men, who have no 
 necessity to work, keep to their tasks
 
 38 THE MAKING OF A MERCHANT 
 
 from a sense of duty to their fellow- men 
 and most particularly to their own 
 employees. This, however, is true in 
 scores and hundreds of instances. If 
 the secret motives of the business men 
 who have been scoffed and sneered at as 
 mercenary and miserly, because they did 
 not retire to a life of ease and idleness 
 when their wealth overtopped the 
 "dreams of avarice," could be under- 
 stood, it would be seen that a very large 
 proportion of them have kept steadily at 
 their self-appointed tasks for the sake of 
 the small armies of men, women and 
 children depending for the necessaries 
 of life upon the safe conduct of 
 the great enterprises managed by these 
 men. I think this spirit is particularly 
 characteristic of those who have made 
 great fortunes in mercantile pursuits 
 rather than in speculative fields. 
 
 HE reason for this sense of 
 responsibility on the part 
 of wealthy merchants is not 
 difficult to find. Generally their fortunes
 
 AN EMPLOYER OF OTHERS 39 
 
 have been of comparatively slow 
 growth, and in the process of their 
 building the "merchant princes," as the 
 newspapers describe them, are brought 
 into close and long association with their 
 employees, and would be scarcely human 
 if they did not find themselves deeply 
 interested in the welfare of the men who 
 served their interests, even though it be 
 a service for hire. Many a conscientious 
 merchant worth millions has said to 
 himself, and possibly to his nearest 
 friends, "I'd like to let go of work 
 entirely, take a long trip and make a 
 business of pleasure-seeking, but I'm 
 interested in my men and have plans for 
 their good that can only be carried out 
 after careful foundations have been 
 laid. So I'm going to stick to work 
 until I can see things so firmly established 
 that it will not cause a ripple of disturb- 
 ance when I do step out. And perhaps 
 I shall get quite as much enjoyment in 
 doing this as in searching for pleasure 
 outside of work. ' ' 
 
 This attitude is certainly that of
 
 40 THE MAKING OF A MERCHANT 
 
 many wealthy merchants and other large 
 employers of labor, and if their employees 
 could only appreciate this fact it would 
 make the service of both a delight, and 
 would change the aspect of the labor 
 world. On the other hand, it must be 
 admitted that not all large employers 
 are sufficiently unselfish to take this 
 view of their opportunities ; but of such 
 it must be said that they do not have a 
 realizing sense of their responsibilities. 
 
 Many avenues of helpfulness open 
 to the manufacturer who desires to deal 
 helpfully and generously by his employees 
 are closed to the merchant, for the 
 reason that the employees of the latter 
 are generally widely scattered through- 
 out the city in which the mercantile 
 enterprise is located. On the other 
 hand, the employees of a manufacturing 
 concern usually segregate and comprise 
 a distinct community of their own. This 
 makes it possible for the manufacturer 
 to build halls, churches, libraries, schools, 
 gymnasiums, theatres and club houses 
 to be used exclusively by the men and
 
 AN EMPLOYER OF OTHERS 41 
 
 women on his pay-roll. The merchant 
 cannot do this for the reason that his 
 employees are dispersed throughout the 
 entire city. 
 
 More than this, the working force 
 of a great mercantile establishment 
 represents nearly every social class. 
 Those of highest rank and holding 
 executive positions are, perhaps, members 
 of the same clubs with the proprietors 
 of the house, and move in fashionable 
 circles. Then come others of varying 
 social status. In the main they are 
 necessarily persons of more or less 
 education, and could not, therefore, be 
 considered en masse in any plan for 
 advancement which would necessitate 
 their meeting together or sustaining a 
 common social relationship. 
 
 HIS difficulty, however, does 
 not shut the kindly disposed 
 merchant from benefiting and 
 helping his employees. There are many 
 things he may do in this direction, and 
 the first and most important one is that
 
 42 THE MAKING OF A MERCHANT 
 
 of consistently following a line of 
 conduct calculated to make every 
 employee, from the least to the greatest, 
 feel that so long as he is faithful in the 
 discharge of his duties and reasonably 
 competent he will not lose his place in 
 the employ of the house. Nothing in 
 the world can build up so strong a sense 
 of loyalty and devotion on the part of 
 the working force of any establishment 
 as this feeling. Nor will any amount of 
 fear, discipline or driving get so much 
 work and as good work out of employees 
 as the knowledge that their tenure of 
 service is secure, and that in misfortune 
 they will be taken care of in a friendly 
 and humane manner. This feeling will 
 go further than high salaries although 
 in saying this I do not take the position 
 of urging it as a possible subterfuge by 
 which the payment of fair wages may be 
 avoided. It should be adopted as a 
 business rule because it is right, and it 
 will be found most excellent policy when 
 pursued from this motive. 
 
 The best capital that any employer
 
 AN EMPLOYER OP OTHERS 43 
 
 can have is the knowledge and apprecia- 
 tion on the part of his employees that 
 he is genuinely and sincerely interested 
 in their welfare; that he really cares for 
 them and their prosperity. This applies 
 particularly, it seems to me, in the 
 mercantile business, where a very large 
 proportion of the men are salesmen, and 
 their efficiency is dependent to a sensitive 
 degree upon their feelings their loyalty, 
 energy, and hope of substantial appre- 
 ciation and reward. I have never found 
 any way of accomplishing this result 
 other than that of keeping in close 
 personal touch with the entire working 
 force of the house. It would be a 
 matter of sincere regret to me to learn 
 that a single employee of my establish- 
 ment did not feel and understand that he 
 could come to me in any personal trouble 
 or exigency of a serious nature and be 
 cheerfully granted an audience, and that 
 the boy receiving the lowest wages should 
 be as welcome as the man holding a posi- 
 tion of great responsibility. To establish 
 this feeling thoroughly in an institution
 
 44 THE MAKING OF A MERCHANT 
 
 employing more than two thousand 
 persons has cost many hours of time; but 
 my experience warrants the statement 
 that any merchant who is a large 
 employer of labor will find time thus 
 spent the most profitable and productive 
 that his calendar records. 
 
 HE knowledge that he will be 
 "taken care of" in sickness 
 and calamity as well as in 
 health does more to keep the employee 
 steady and contented in his service than 
 all other influences. When the man 
 knows that, in the event of illness, no 
 matter how long continued, his pay will 
 be cheerfully sent him, he needs no 
 argument to induce him to remain with 
 such an employer, even if offered higher 
 salary or more brilliant inducements 
 elsewhere. And if the employer keeps 
 so close to his men that he is able to 
 visit them when they are sick without 
 making the visit a palpable and deliber- 
 ate display of patronage and condescen- 
 sion, he will command almost un-
 
 AN EMPLOYER OP OTHERS 45 
 
 bounded loyalty from the men on his 
 pay-roll. 
 
 Another powerful stimulant to the 
 devotion of employees is the pension 
 system which is in force in mercantile 
 life to a much greater extent than is 
 generally understood. 
 
 The selfish value to a great com- 
 mercial establishment of taking care of its 
 employees, of showing interest in them, 
 of stimulating them to advancement 
 and of making them feel secure in their 
 positions has been illustrated by some 
 notable examples of those who pursued 
 an opposite course. One of the 
 largest -mercantile houses in the 
 country adopted as a settled policy the 
 unwritten law that when a man ad- 
 vanced to a certain degree of intimacy in 
 the knowledge of the larger affairs of the 
 concern his services were to be dispensed 
 with. In other words, the proprietor 
 determined that no person besides him- 
 self should have a grasp of the business 
 in its entirety. As soon as his 
 lieutenants acquired what he regarded
 
 46 THE MAKING OF A MERCHANT 
 
 as a dangerous amount of knowledge he 
 discharged them. And with what 
 result? He educated men for high 
 places in the service of his competitors 
 and put a most effectual damper on the 
 spirit of loyalty. His men realized it 
 was not safe for them to "know too 
 much." Because of his strong person- 
 ality and his genius for finance he was 
 able to prosper in spite of this weakness 
 in his system ; but the instant his own 
 hand was stricken from the guidance of 
 the affairs of his house the spirit of his 
 own distrust of his employees swept into 
 practical wreck the great enterprise 
 which he had builded. There seems to 
 be little reason to doubt that had he 
 pursued an opposite policy, and put a 
 premium on high executive ability and a 
 comprehensive grasp of the business, his 
 house might have perpetuated his name 
 for several generations instead of drop- 
 ping from sight with almost incredible 
 swiftness. The great cohesive power of 
 a mercantile establishment is the spirit 
 of confidence between employer and
 
 AN EMPLOYER OF OTHERS 47 
 
 employed. It is indeed necessary for 
 success. 
 
 HERE are many excellent 
 ways, besides those I have 
 already mentioned, by which 
 
 the employing merchant may arouse the 
 energies and inspire the devotion of 
 those in his employ. One is by paying 
 salaries that are admittedly large. In 
 the trade, service in such a house is 
 regarded as a prize to be vigorously 
 sought. The assigning of a direct 
 interest in the house is another effective 
 way in which to reward what in military 
 terms would be classed as ' ' distinguished 
 service. ' ' 
 
 I am familiar with an instance of 
 this kind wherein the proprietor of an 
 extensive business wished to make one 
 of his principal employees an actual 
 shareholder. The young man had no 
 capital to invest, and could not well 
 spare anything from his current earnings 
 for investment. He was charged on the 
 books of the concern with fifteen
 
 48 THE MAKING OF A MERCHANT 
 
 thousand dollars in cash and credited 
 with that amount of capital. Of course 
 he was also charged interest at the rate 
 of six per cent. Against this was a 
 credit of profits or earning of twenty 
 per cent. This made a net balance in 
 the young man's favor of two thousand 
 one hundred dollars, which was applied 
 on the charge of his capital of fifteen 
 thousand dollars. 
 
 The years in which this snug capital 
 was paying for itself passed so quickly 
 that the happy young man was scarcely 
 aware of their flight. The fund not 
 only exerted a strong influence on the 
 young man, but on the other employees 
 of the establishment. 
 
 The method of bestowing a "work- 
 ing interest" is probably familiar to 
 all. It consists of what to all intents 
 and purposes is the bestowal of a 
 fictitious interest in the business. The 
 favored employee is credited with a 
 certain percentage of the net profits for 
 the year this in addition to a salary 
 sufficient for living expenses. It does
 
 AN EMPLOYER OF OTHERS 49 
 
 not matter so much in what form 
 the employer makes this award to special 
 worthiness, so long as he makes it and 
 his employees know that it is to be made 
 from time to time. In truth and in 
 fact, the interests of the employer and 
 employed are mutual, and everything 
 which goes to make this more apparent 
 is to be welcomed. 
 
 HERE are two or three points 
 briefly and casually touched 
 upon in my former articles that 
 I am loath to leave without a word of 
 special emphasis. In a very large 
 degree, whatever of success I have been 
 able to achieve in the mercantile field is 
 due to reaching out for new responsibil- 
 ities and doing things without being 
 told. The man who rejoices the heart 
 of the head of a great business is the 
 man who sees something to do and does 
 it without asking any questions. Of 
 course I do not mean by this that any 
 employee should recklessly usurp the 
 duties or responsibilities of another or
 
 50 THE MAKING OF A MERCHANT 
 
 of his employer; but within the bounds 
 of reason he should be extending the 
 radius of his authority and responsibil- 
 ity, and lifting that much, as it were, 
 from the shoulders of his employer. The 
 latter is quick to see the force and value 
 of such a servant and inwardly remarks: 
 "Here is a man who not only acts, but 
 thinks for me. He sees through the 
 eyes of my own self-interest, and initiates 
 and executes in my stead. " 
 
 The other point which I especially 
 desired to emphasize is that of unfailing 
 and irrepressible courtesy to every one, 
 and upon all occasions. This should be 
 a matter of principle and native good- 
 breeding. But if it can't be spon- 
 taneous and of the heart, let it be 
 nourished as policy, and from the cold 
 and calculating consideration that in 
 this country it is impossible to tell how 
 soon the humblest person may change 
 to a place of great influence and 
 importance. Let any business man of 
 long experience go over the surprises of 
 this nature which he has encountered
 
 AN EMPLOYER OF OTHERS 51 
 
 and the list will be surprising. In fact, 
 the man who has not learned a few 
 lessons in this particular line through 
 sad and humiliating experiences is 
 fortunate. 
 
 HE credit department is gen- 
 erally the field most attractive 
 to the young man who is 
 ambitious to make a figure in mercantile 
 life. Here is the arena in which a talent 
 for financiering may be displayed every 
 work-day of the week, and the em- 
 ployee may earn a year's salary by 
 a clever turn or the prompt exercise 
 of judgment and firmness. What won- 
 der, then, that the young man who 
 feels himself equipped by nature and 
 taste for the exploits of commercial 
 finance for the thinking and planning 
 part of mercantile life longs to test his 
 mettle at the credit-desk. There every 
 transaction has its beginning and its 
 end, its initial sanction and its formal 
 termination. To the credit-man and 
 his assistants come the merchants of
 
 52 THE MAKING OF A MERCHANT 
 
 other cities men of recognized power 
 and influence in their communities and 
 stand before him to be judged as to 
 their integrity, their business capacity, 
 their energy, their financial soundness 
 and resources, and their character in 
 general. 
 
 No judge on the bench faces so 
 difficult a problem as that which con- 
 fronts the credit -man. If the latter 
 fails to be absolutely judicial in his 
 decision his hopes of success must be 
 small indeed. On the other hand, he 
 is not so protected from personal 
 influence as is the judge. The customer 
 makes his own appeal for credit or its 
 extension, and leans on the desk of the 
 credit-man, looking the latter full in the 
 eye as he does so. Perhaps this cus- 
 tomer is known to be a personal friend 
 of the proprietor, and the credit-man is 
 in honor bound to conceal the reasons 
 leading to the denial of the request. 
 This makes refusal very hard to give, but 
 there is only one safe road for the 
 credit-man to follow in all instances: he
 
 AN EMPLOYER OF OTHERS 53 
 
 must be more judicial, if possible, than 
 the righteous judge, and take nothing 
 save his own best judgment into 
 account. 
 
 ORE than this, he must be 
 quick to catch at straws of 
 circumstance and read their 
 significance. This can best be illus- 
 trated from a personal experience. A 
 man who had a large line of credit with 
 us, and was considered the "big man" 
 in the mercantile circles of his own city, 
 came to request the extension of a note. 
 Just previous to his appearance at my 
 desk I had been in his city and took 
 occasion to get shaved in the barber 
 shop underneath his store. Incident- 
 ally, I chanced to make a passing 
 reference to the place above us, and the 
 barber shook his head and remarked: 
 
 "They're not throwing the goods 
 down on the counters the way they 
 used to. The captain of the ship seems 
 to be pushing the Sunday-school con- 
 vention business more than the dry-
 
 54 THE MAKING OF A MERCHANT 
 
 goods trade. He's away a great 
 deal, and leaves things to his clerks 
 considerable." 
 
 Although I was comparatively new 
 to the credit-desk, and was acting in 
 place of the credit chief, who was in 
 Europe, I declined to extend the 
 note. My customer was greatly aston- 
 ished at this development, and reminded 
 me that if the regular credit chief were 
 there the favor would be instantly 
 granted. I knew this was altogether 
 probable; but I believed the man had 
 reached a period of financial unsound- 
 ness, and my duty was clear. There 
 was nothing for me to do but quietly 
 insist on a settlement. This I secured. 
 Shortly afterwards the man failed, owing 
 a competitor of our establishment 
 ten thousand dollars. I had caught 
 the right straw and saved the house 
 thousands of dollars by standing firmly 
 to my conviction. 
 
 Hundreds of parallel instances have 
 come within my experience, and all 
 emphasize the point that the credit-man
 
 AN EMPLOYER OF OTHERS SS 
 
 must be as judicial as Justice, as firm as 
 a rock, and sensitive to the thousand 
 straws of circumstance which show the 
 drift of the financial current. These 
 requirements may appear very exacting 
 and almost impossible. Certainly the 
 number of men who embody this 
 combination of qualities is not large. 
 On the other hand, the young man with 
 genius or even talent for credits has 
 before him a career rich in possibilities 
 and rewards.
 
 THE CREDIT-MAN 
 
 N the keeping of the credit- 
 man rests in a large measure 
 the commercial interests of 
 a vast and rapidly increas- 
 ing population. 
 That you may the better under- 
 standtheimportanceof the situation, and 
 the better comprehend the magnitude of 
 the business committed to your keeping, I 
 am going to ask you in your imagina- 
 tion to draw a circle having a radius of 
 only five hundred miles, with Chicago 
 as its center. Within that circle, 
 practically within a night's ride, are 
 more than twenty-five million happy, 
 contented, and prosperous people. The 
 fertile soil of the area thus circumscribed 
 is, by the favor of Almighty God, aided 
 
 Delivered at the third annual banquet of the Chicago Credit- 
 men's Association, Wednesday evening, May 17, 1899. 
 
 56
 
 THE CREDIT-MAN 57 
 
 by the hand of man, made to produce 
 more that goes to sustain human life 
 than any other equal number of square 
 miles on the face of the globe, at any 
 period of its history. 
 
 This charmed circle teems with 
 busy work-shops and is rich in all that 
 goes to make material prosperity. The 
 people are law-abiding, and at peace 
 with their neighbors and all the world. 
 
 I believe that within this circle 
 there obtains a higher code of commer- 
 cial ethics than has ever before been 
 found to exist in any similar situation. 
 Consider that this civilization has been 
 almost entirely created within the life- 
 time of the living; consider that there 
 has been injected into it people from all 
 quarters of the globe, bringing with 
 them all shades of belief and doctrine ; 
 that all these in a few decades should 
 have been brought into a harmonious 
 relation is one of the wonders of our time. 
 
 The business with which you have 
 to deal, although not confined to this 
 circle, is largely within it.
 
 58 THE MAKING OF A MERCHANT 
 
 I have taken the liberty of placing 
 before you this picture in order that 
 we may the better understand our duty, 
 both as it relates to the present and 
 future. By every thought, act, and 
 transaction of our lives let us individu- 
 ally and collectively strive to inculcate a 
 still higher code, so that this civilization 
 of which I am speaking shall have the 
 full benefit of the very best that is in us. 
 
 UTSIDE of the specific duty 
 imposed upon him by his 
 employment, a creditman in 
 these days of ours occupies a most 
 important position in society. The 
 credit-man not only extends aid for the 
 prosecution of business affairs, but he 
 has within his keeping the moral 
 reputation of men. The word "credit" 
 broadly applied means confidence in 
 worth, and applied to its business use 
 means confidence in moral worth as well 
 as in commercial worth. 
 
 There is no position I can recall in 
 the business world that requires to so
 
 THE CREDIT-MAN 59 
 
 extreme a degree both a sympathetic 
 and an unsympathetic nature. In order 
 to properly weigh the merit of a man's 
 request for credit, an individual must be 
 able to extend his sympathies to the 
 applicant sufficiently to thoroughly un- 
 derstand all the causes that led up to 
 the application, and all the reasons that 
 justify the request. Having thoroughly 
 placed himself in sympathetic relation- 
 ship, he must then at once exclude his 
 sympathies, and in a cool, calm, unpre- 
 judiced, businesslike and unsympathetic 
 frame of mind, determine upon commer- 
 cial reasoning whether a request for 
 credit, or consideration in business, may 
 be extended in justice to the concern he 
 represents. 
 
 The commercial credit of a business 
 man is not only largely in the hands of 
 the credit-man, but his moral character 
 as well; for to be denied credit in 
 business presupposes a man whose moral 
 condition, viewed from a business 
 standpoint at least, is impaired. 
 
 The relation of a credit -man to his
 
 60 THE MAKING OF A MERCHANT 
 
 employer should always be dutiful. He 
 should know and appreciate the 
 temper, the method, and the ambition 
 of his employer. So far as he is able to 
 do so without self-reproach, he should 
 subordinate his views to those of his 
 employer. Disagreement with respect, 
 advice with temperance, but subordina- 
 tion after all, or resignation. 
 
 In observing the lives of those men 
 who are recognized as superior among 
 credit-men in this country, I am 
 impressed with the fact that in nearly 
 every instance their success has been due 
 to their thoroughness and to their 
 singleness of purpose. They have been 
 satisfied in the earlier stages of their 
 career to take one assignment of duty 
 and perform it to have finished one 
 task before taking on another. 
 
 Another strong characteristic of these 
 men has been the directness of their 
 application to duty. You may have 
 read a little brochure by Hubbard, * 'The 
 Message to Garcia. ' ' It tells of how the 
 man Rowen took the word from the
 
 THE CREDIT-MAN 61 
 
 White House to Garcia into the interior 
 of Cuba. The strong part of this 
 exploit rests on the recitation that the 
 administration gave to this young 
 man, "A message to be delivered under 
 great difficulty and with exceeding 
 danger to an officer in the heart of a 
 foreign country in a state of war. ' ' No 
 instructions were given him and none 
 were asked. He was told to deliver a 
 message. He accepted the gage and did 
 so. In a less dramatic sence that 
 is the duty of an employee to his 
 employer. 
 
 CUSTOMER, taken as a 
 type, is entitled to the closest 
 study. A credit-man must 
 know his life, must know his en- 
 vironments, must know his disposition, 
 and must enter almost completely into 
 his secret thoughts. The same rule of 
 action can not be laid down for all 
 customers, but there can be a general 
 law that applies to all. A customer 
 must be treated with perfect frankness.
 
 62 THE MAKING OF A MERCHANT 
 
 He must be listened to with patience. 
 He must be advised sincerely. He must 
 be encouraged, and he must feel that the 
 credit-man is his friend. The customer 
 who will not yield to frankness with a cred- 
 it-man is entitled to suspicion. The cus- 
 tomer who resents the advice of the credit- 
 man is unwise. Without the customer 
 the credit-man would have no business. 
 Without the credit-man, the customer 
 would have no credit. They must be close 
 together, confiding, and sympathetic. 
 
 The duty of the credit-man to the 
 customer may involve the question of 
 the concealment of certain details of his 
 business, or moral life, that if 
 known, while it would warn others 
 parhaps entitled to the knowledge, would 
 ruin the customer. Here is a situation 
 wherein the credit-man becomes the 
 judge of moral equity. He must 
 determine which is the greater duty, to 
 protect individuals, or to protect the 
 community. No more trying position 
 can come to any man, and yet it comes 
 often to the credit-man.
 
 THE CREDIT -MAN 63 
 
 The qualifications of a well equipped 
 credit-man come to him only through 
 experience. He should have a knowledge 
 of all the circumstances and conditions 
 that surround his customer. He should 
 be familiar with the community in which 
 this customer lives, should be informed 
 of every industry on which the customer 
 relies for the support of his business. It 
 is extremely important that he should 
 know whether the sources from which 
 the customer derives his support are in 
 a prosperous and healthy condition, or 
 whether the reverse obtains. 
 
 To this knowledge should be added 
 the complete understanding of the 
 condition of the customer's affairs, which 
 can best be obtained definitely by actual 
 contract with the customer himself. The 
 credit-man should have an opportunity 
 to look into the customer's face at as 
 frequent intervals as possible, and to 
 confer with him with reference not only 
 to his own affairs, but to the conditions 
 that surround him. Equipped with this 
 information, he will at all times be in a
 
 64 THE MAKING OF A MERCHANT 
 
 position to advise the customer, and to 
 check him if inclined to overbuy or strain 
 his credit. He will be in a position to 
 favor the customer if he requires 
 additional time, or accommodation of 
 any kind. It is as much the duty of the 
 credit- man to furnish advice and 
 counsel, as it is to dispence credit. It 
 should, of course, be done in a way that 
 will not offend, but be inspired by a 
 desire to assist the customer, and to give 
 him the benefit of his judgment and 
 experience. A word of advice given at 
 the proper time will save many a 
 customer from ruin and make him a 
 prosperous merchant. 
 
 PRACTICE that makes the 
 giving of credit very difficult 
 is the custom now so pre- 
 valent of making sales through 
 traveling salesmen. The credit-man in 
 such cases very seldom comes in contact 
 with his customer, and can not so 
 thoroughly inform himself as to his 
 worth, and he must in consequence take
 
 THE CREDIT-MAN 65 
 
 a larger risk in extending credit. He 
 
 relies too much upon the traveling 
 man, who, in his eagerness to make 
 sales, fails to give the credit-man a 
 proper understanding of the situation, 
 and it not infrequently occurs that 
 information is in his possession which he 
 withholds, hoping doubtless that a 
 favorable turn will enable the customer 
 to overcome the difficulty without its 
 being brought to the attention of the 
 credit-man. The peculiarities of the 
 salesman, upon whom the credit-man 
 must of necessity depend more or less 
 for his information, must be studied and 
 thoroughly known, in order that he may 
 know to what extent he himself is being 
 aided. For instance, the salesman 
 having full knowledge of the peculiarities 
 of his customer and the conditions 
 surrounding him and his business, can 
 always judge as to whether the customer 
 buys judiciously or recklessly. The 
 salesman can always be of great 
 assistance if he is thoughtful, observing, 
 and promptly reports the results of his
 
 66 THE MAKING OF A MERCHANT 
 
 observations and knowledge to the 
 credit department. 
 
 HE credit-man should be 
 familiar with the collection 
 laws of the several States 
 in which his customers reside, as 
 they have much to do with the collection 
 of the accounts which he makes. He 
 should also personally supervise the 
 collections, and require the customer to 
 pay at maturity, or, failing to do 
 so, exact a satisfactory reason for 
 non-payment. 
 
 The credit- man should learn to rely 
 upon himself and his own investigations, 
 using such collateral agencies as will 
 assist him in corroborating such inform- 
 ation as he may be able to gather from 
 the customer direct, and from his own 
 experience. 
 
 It is also better for him to rely upon 
 one man whom he knows all about, 
 rather than trust two or three with 
 imperfect information as to their 
 character, worth and business methods,
 
 THE CREDIT-MAN 67 
 
 for he will, without doubt, having full 
 knowledge of the one man, grant him 
 credit in consistent amounts, if at all; 
 whereas, with two or three persons he is 
 liable to err for, he argues, that with 
 two or three, one out of the number will 
 prove to be good in case disaster over- 
 takes the others. The wise credit-man 
 can easily foresee the honest failure, and 
 can avert it by warning the customer, or 
 by assisting him with his council and 
 the extending of judicious credit. The 
 dishonest debtor should never, under 
 any circumstances, be compromised 
 with. He should be compelled to pay 
 in full, or be driven out of business by a 
 refusal to settle with him at less than 
 one hundred cents. 
 
 The credit-man's duty to himself is 
 perhaps the least important of the 
 considerations I am giving thought to 
 this evening. He must thoroughly 
 appreciate how potent a factor for good 
 or bad he is in relation to the sphere he 
 occupies. A disposition to become 
 arbitrary or dictatorial must be closely
 
 68 THE MAKING OF A MERCHANT 
 
 watched. The compliments and flatteries 
 and sophistries of those with whom he 
 is brought in contact must pass 
 unnoticed. 
 
 Without being a cynic he must be 
 worldwise. He must so fashion his 
 conscience that the person upon whose 
 case he must pass judgment comes to 
 him absolutely without prejudice, and 
 he must conduct his reasoning without 
 the influence that would seek to help 
 without merit, or to discourage without 
 cause.
 
 |HE home is the cynosure 
 of every man's affections. 
 Most men who have 
 achieved, or hope to achieve, 
 a place among manly men 
 stand each at the center of a group 
 of loved dependents looking to him as 
 the fountain of perennial blessings, the 
 sure defense against threatening adver- 
 sity. He is the chief corner-stone of 
 that home, which is the growing 
 banyan tree; the sure reliance of that 
 wife who once in the glamour of love's 
 young dream with all his worldly goods 
 he did endow; the worthy exemplar 
 towards whom turns the gaze, as of the 
 sunflower to the sun, of the cluster of 
 sweet olives about his table, the full 
 fruition of whose young lives is his 
 
 69
 
 70 THE MAKING OF A MERCHANT 
 
 dearest hope; the stalwart stay that 
 steadies the trembling steps of those 
 parents whose pathway in the gloaming 
 it is his daily joy to sooth and beautify. 
 In his peaceful abode there is 
 evidence of comfort, prosperity, affluence. 
 The avenues of his life have been wisely 
 chosen ; his purposes are commendable ; 
 his plans are ripening; he runs well, but 
 the goal is not yet reached. Let him 
 but pass this crisis in his affairs, win 
 this impending conflict, and competence, 
 hope's alluring prize, is secured. But 
 his argosies, scattered upon treacherous 
 seas may disappoint. Danger lurks 
 about every venture. How much 
 depends upon a single life! To many 
 there comes a day of anguish, a night of 
 tears, and in the silent tomb, the great 
 throbbing, loving heart rests. How 
 often is the anguish of this solemn hour 
 embittered by the consciousness that 
 the mainstay of those who relied upon the 
 strength of this arm, the wisdom of this 
 brain, the love of this heart, is broken, 
 and that for the loved ones will begin a
 
 LIFE INSURANCE 71 
 
 new life, a life of penury and distress. 
 
 The wise seaman protects with 
 every known device the lives of those 
 who go down with him to the sea. 
 The wise husband and father protects 
 the fortunes of those who sail with him 
 amid the rocks and shallows of life's 
 uncharted sea. The man who buys 
 insurance buys it not for himself; he 
 knows it will not ward off the destroy- 
 ing arrow that will surely some day 
 reach its mark; he buys protection for 
 those he loves better than life from 
 dangers that he fears worse than death. 
 
 Knowing, then, that such protec- 
 tion lies within his reach, the wise man 
 reckons it his imperative duty to avail 
 himself of this great defense. 
 
 HERE is another phase of this 
 subject. Misfortune does not 
 always wait to follow in the 
 footsteps of death. For multitudes, 
 success is but an illusion that skips before 
 one like the ignis fatuus of the fable. 
 The wealth these pursue lies in ponder-
 
 72 THE MAKING OF A MERCHANT 
 
 ous chests at the foot of the vanishing 
 rainbow. It has been said that ninety- 
 five per cent, of those who seem to pros- 
 per fairly in their lives, die paupers at 
 the close; they have expended their estate 
 and are dependent upon the kind offices 
 of their children or friends. It has been 
 said of those who undertake this very 
 business of life insurance that not more 
 than two per cent, succeed. Old men 
 have no longer toleration in this world. 
 The business world has no further use 
 for them. The adage that a man is no 
 older than he feels rings false. Men are 
 no longer current at this valuation. 
 People recognize the fact for others long 
 before they are willing to admit it for 
 themselves. By the time a man has 
 reached the Methusalaian age of sixty 
 his children, if they have escaped the 
 infantile diseases of mumps and measles, 
 and the mid-life insanities of golf and 
 foot-ball, will have grown to the estate 
 of manhood and womanhood and will 
 have outgrown the need of paternal 
 care. But the man himself has begun
 
 LIFE INSURANCE 73 
 
 to descend the declivity. Like the old 
 man in Cole's most impressive picture, 
 he sits in his dismantled bark, floating 
 on the estuary of the stream whose 
 current will soon deliver him beyond .the 
 impenetrable and eternal mist. Happy, 
 financially, will he be who, with wise 
 forethought, has converted some of the 
 earnings that came and went so freely 
 while he was running the rapids of youth 
 and middle life into an endowment large 
 enough to provide for the less exacting 
 requirements of his declining years. The 
 insurance which would have provided 
 for his family had he passed away while 
 they were dependent upon his care, will 
 provide for himself during the probation 
 of his old age. / 
 
 HESE provisions against the 
 misfortune of the family be- 
 cause deprived of its natural 
 support, or against the want which 
 may accompany one's declining years, 
 may also be designated as business 
 precautions, since they are adopted
 
 74 THE MAKING OP A MERCHANT 
 
 by far-seeing men of affairs who 
 understand the wisdom of , fore- 
 stalling contingencies as we say in 
 Chicago, of taking no chances. Others 
 purchase life insurance as a form of 
 investment. The fact that the invest- 
 ment has a long time in which to 
 mature, or if maturing earlier, does so 
 in a way to deprive the investor of a 
 personal enjoyment of the avails, does 
 not act as a discouragement to such as 
 seek security and a form of wealth not 
 easily disturbed. He may indeed, real- 
 ize, but the returns are so small when 
 contrasted with the promise of later 
 benefits, that he usually prefers to let 
 time have its cumulative effect. There 
 are several good things about this form 
 of investment. It in so far obeys the 
 injunction of scripture if your company 
 be wisely chosen as to put your treas- 
 ure where moth and rust will not 
 corrupt; it provides for your own 
 household, who doth not is worse than 
 an infidel, or for your other self, and it 
 is charitable to the needy and, perhaps,
 
 LIFE INSURANCE 75 
 
 worthy agent. But to many this con- 
 stantly recurring withdrawal of capital 
 that might remain active and flinging it 
 into the unknown hereafter, with the 
 certainty that the insured will never 
 enjoy the fruits of his forethought 
 has its depressing aspect. When one 
 invests his money in a security bearing 
 coupons he has at least the luxury of 
 cutting off and using or reinvesting the 
 periodic returns. He gets no such satis- 
 faction from life insurance, which is, to 
 all intents and purposes, a dead issue. 
 
 EVERTHELESS, there is a 
 real retroactive benefit to a 
 mans business that grows out 
 of the knowledge that he carries a 
 reasonably strong line of life insurance. 
 Next to capital, the most 
 important factor in a business man's 
 prosperity is credit. By credit I mean 
 something more than simply the ability 
 to borrow on the market at a stipulated 
 rate per cent. I mean that larger 
 consideration called confidence. Confi-
 
 76 THE MAKING OF A MERCHANT 
 
 dence is a most sensitive plant. It 
 shrinks before the chilling frost of 
 distrust, and under the fierce blast of 
 heated controversy. Confidence begets 
 commercial credit; it is born of integrity 
 and capacity. He who seeks credit has 
 persuaded himself that he has such a 
 use for the proceeds of his credit as will 
 return the loan with certain increases 
 for himself. If no man were to buy 
 more than he has the ready cash to pay 
 for, or borrow more than the aggregate 
 of his visible means, a good deal of 
 remunerative business would cease. It 
 is well to inquire as to the borrower's 
 property, and its incumbrance, but a 
 question of far greater moment is as to 
 his integrity. Does the man hold to the 
 sacredness of his word and the in- 
 violability of a contract? Does he 
 intend to discharge his obligations in 
 good faith, or does he mean to escape 
 from their entanglements if he can evade 
 the law? A strong presumption that a 
 man means to redeem his obligations 
 follows the evidence that he has pro-
 
 LIFE INSURANCE 77 
 
 vided, or is providing, the resources for 
 such redemption, reaching even beyond 
 thecontingencies of his own life for death 
 wipes out many scores and so it is true 
 that a well established line of life insurance 
 helps to strengthen the confidence which 
 a man's creditors have in his integrity. 
 Capability also begets confidence. One 
 may have property as well as probity, but 
 has he that quality of business capacity 
 which will protect the property which he 
 holds and will help him to carry his enter- 
 prise to a successful issue? The honest 
 man who lacks capacity will go to the wall 
 much sooner than the man of question- 
 able integrity who understands all the 
 methods of self -protect ion and self- 
 aggrandizement. The fact that one has 
 had the wisdom to secure an ample sup- 
 port for his family in the manner due to 
 their station in life, satisfaction for the 
 wants of his own declining years, and 
 indemnity for his creditors, even when he 
 has passed out of the sphereof their vision, 
 goes far to show that he is sound, in judg- 
 ment as in honesty, and that he can be 
 trusted.
 
 78 THE MAKING OF A MERCHANT 
 
 [E all have personal knowl- 
 edge of many instances that 
 prove the wisdom of life 
 insurance. In fact they are so com- 
 mon that I hardly feel justified in 
 giving you a single case in my own 
 experience. A number of years ago, at 
 the close of a busy day, I went to the 
 West Side to find a minister before whom 
 I had once stood to take the marriage 
 vow. I found him and his wife alone in 
 meager quarters, both sick and without 
 means or income, and apparently 
 friendless. Their children had grown 
 up, drifted away and were unable to 
 help. The good man, as I approached 
 his bed and he became aware of my 
 presence, said in a feeble but confident 
 tone: "I had just closed my eyes and 
 said, 'The Lord is my Shepherd, I shall 
 not want. ' It is not proper for me to 
 speak further of what followed, except 
 that they were kindly cared for. Both 
 regained a measure of health and lived a 
 number of years, so that when the good 
 man passed to his reward I found that
 
 LIFE INSURANCE 79 
 
 he owed me over five thousand dollars 
 advanced for maintenance and for 
 premiums on a ten thousand dollar 
 policy in a company represented at this 
 table. The amount was paid promptly, 
 my money was returned, and the 
 residue maintained the widow until her 
 death and still left over three thousand 
 dollars to be sent to three daughters in 
 distant states, and yonder at Evanston, 
 in a Memorial hall is a window with the 
 name of the good man and under it, 
 "The Lord is my Shepherd, I shall not 
 want." 
 
 Delivered at the Thanksgiving- meeting of the Life Underwriters' 
 Association of Chicago in 1899.
 
 FIRE INSURANCE 
 
 N passing my life, or the 
 portion so far allotted to 
 me, exclusively in com- 
 merce, during all of which 
 time insurance against fire 
 has been as ordinary as a system of 
 currency, I have of necessity been awake 
 to the importance of insurance to the 
 business world. In considering the 
 topic assigned to me, I have brought 
 home to myself its potency as a 
 commercial factor, and I am amazed at 
 its fundamental nature. As a matter 
 of fact, it would be impossible to carry 
 on business without insurance against 
 loss by fire. It would so disturb values 
 of all property that it would materially 
 interfere with the loaning of money, while 
 
 Delivered at the Twenty-Eighth Annual Meeting 1 of the Fire 
 Underwriters' Association of the Northwest, Chicago, October 1897. 
 80
 
 FIRE INSURANCE 81 
 
 credits, which are such a vast aid 
 now, would be almost impossible. It 
 would practically reduce trade to a cash 
 basis and limit the volume of business 
 almost to stagnation. 
 
 From a realization of the prime 
 necessity of insurance, consideration of 
 the subject naturally leads me to think 
 of the vastness of it as a branch of 
 trade, as a great division of our 
 commercial system, and then naturally 
 follows an inquiry as to whether so great 
 a factor in our business life is controlled 
 and directed wisely and with proper 
 regard for the moral and financial 
 welfare of the people. Thus, in a 
 moment I find myself confronted by a 
 great business problem, involving a 
 matter of the greatest importance to 
 myself and every other business man, and 
 yet a question to which I have hardly 
 given a moment's thought during the 
 forty years I have employed its privileges 
 and enjoyed its protection. Occasions 
 of this character are forceful agencies in 
 the education of busy men, and I
 
 82 THE MAKING OF A MERCHANT 
 
 appreciate in this instance the value of 
 these meetings in concentrating 
 thought, bringing out the results of 
 experience and in stimulating high 
 resolve. 
 
 AM aware, of course, that 
 the insurance interests of this 
 country are thoroughly or- 
 ganized with various boards and 
 committees and commissions; that 
 there is state supervision in the 
 different commonwealths, and that the 
 idea of national control has been 
 considerably agitated; but I have yet to 
 learn that the great mass of people who 
 employ insurance, the extensive property 
 interests that are covered by insurance, 
 have devoted any attention to the 
 theory or the practice of insurance, or 
 have considered it a public question. I 
 do not find either that economic writers 
 have taken up the subject in discussing 
 problems in which insurance is so 
 intimately and essentially involved. It 
 is possible to regulate a thing too
 
 FIRE INSURANCE 83 
 
 much. It is possible to agitate a subject 
 too much. It is well perhaps to let well 
 enough alone; but in my own behalf I 
 feel culpable in my ignorance of the 
 question now under discussion, and I 
 feel grateful that I have been compelled 
 to bring myself to a realization of my 
 deficiency in this regard. 
 
 In how far insurance interests are 
 responsible for the ignorance of the 
 people of this important economic 
 question, I will not pretend to say. In 
 extending credit to merchants, I am 
 constantly considering questions con- 
 cerning a customer's fire insurance. His 
 statement of his assets would not be 
 complete if it did not set forth the 
 amount of insurance carried, the 
 character of the companies as well as the 
 kind of building occupied and its environ- 
 ment. It is to me a note of warning if 
 I find a customer either over or under 
 insured. If he is over-insured, I am 
 thinking of the moral hazard to me in 
 extending credit to him. If he is under- 
 insured, I am thinking of the business
 
 84 THE MAKING OF A MERCHANT 
 
 hazard in extending credit to him. I 
 always take the liberty of cautioning 
 customers who even temporarily carry 
 over-insurance. Some business men in 
 good faith carry a certain amount of in- 
 surance through the year. When the 
 stock is depleted by sales between pur- 
 chasing periods, I maintain that if only 
 for a month the amount of insurance 
 should be reduced. I frequently find a 
 customer or would-be customer without 
 insurance arguing that he has a right to 
 insure himself, sometimes because the 
 building he occupies is isolated or 
 specially well constructed, and sometimes 
 for the reason that the buildings are 
 poor and the rate is too high and he 
 cannot afford to pay it. I have always 
 advised against such a plan and not 
 infrequently have been compelled to 
 decline or restrict the amount of credit 
 because the customer persisted in 
 carrying his own insurance. Only when 
 a firm, company or individual has a large 
 number of risks in different cities or 
 remote parts of a large city is he justified
 
 FIRE INSURANCE 85 
 
 in carrying his own risk, and even then 
 I would question my own ability to 
 calculate the number of separate risks 
 one ought to have to enable him to 
 insure his own property, and I would 
 therefore doubt his ability to figure it 
 out. The only safe way is to insure, 
 and a business that will not enable a 
 man to insure is not worth having and 
 should be promptly discontinued. 
 
 From the date when assurance of 
 property against loss by accident was 
 first undertaken in London, in 1700, I 
 think, insurance has been considered by 
 many as a speculation based upon certain 
 calculations of chance on the moral and 
 physical hazard. This was painfully 
 and injuriously incorrect. By an ad- 
 justment of premium percentage to an 
 estimated percentage of liability of 
 accident or design, as applied to a certain 
 area or number of cases, individuals were 
 then as now protected from total loss of 
 property by fire from a fund created by 
 assessment. It was then, as it is now, 
 in reality a mutual protective association.
 
 86 THE MAKING OF A MERCHANT 
 
 That is to say, the collective premiums 
 paid individual losses and the expenses 
 of carrying on and administering the 
 business of the company. I say that 
 notwithstanding the company is a 
 private concern, conducted for profit of 
 its shareholders, the relations between 
 the insured and the insurer are essentially 
 co-operative and mutual. I decry the 
 spirit of sharp practice that is often 
 exhibited between the parties to an 
 insurance contract or their representa- 
 tives. I regret that there seems to be a 
 moral antagonism and a suspicion of the 
 integrity on either side. It is a common 
 belief that the insurance companies 
 escape every liability possible, and it is 
 understood that the insurance agents 
 regard persons applying for insurance 
 with more or less suspicion. There is 
 fraud in insurance and I am aware that 
 fraud is practiced on insurance 
 companies. If it could only be under- 
 stood that we were assuring one another 
 out of the premiums paid by each and 
 that the company was simply our
 
 FIRE INSURANCE 87 
 
 agent! That is what it amounts to. 
 The capital of the company is for the 
 purpose of supplying temporary 
 deficiencies, for in theory the premiums 
 will always more than pay losses and 
 expenses. Any plan of insurance should 
 be prudent, safe and simple. Insurance 
 is to property what shadow is to 
 substance. There is of course a theory 
 of probability, but actuaries have so 
 carefully weighed the probabilities that 
 "fact" is waterlined in "theory." 
 
 The usual practice is for an owner 
 to estimate the value of the property to 
 be insured and take out a policy for the 
 amount or such other less sum as may 
 in his judgment be sufficient. How 
 many agents in granting insurance 
 carefully estimate the value of the 
 property and decline to place any sum 
 on the risk beyond say seventy-five or 
 eighty per cent, of its value? How 
 many agents ask to look at the last 
 inventory of a stock of merchandise, or 
 even ask if one was taken? I would not 
 insure a man who did not at least once
 
 88 THE MAKING OF A MERCHANT 
 
 each year not only take but preserve an 
 inventory in some safe place, and also 
 keep an intelligible merchandise account 
 subject to my inspection at my pleasure 
 as long as my policy was in force. Over- 
 valuations usually indicate fraud aimed 
 either at the insurance company or the 
 credit-man. Companies should realize 
 as against a little extra premium that the 
 interest of the insured in the preservation 
 of his property on account of the value 
 left to his own risk, is a wonderful 
 safeguard from loss. From these 
 generalities, I have allowed myself to 
 believe that a fire insurance agent has a 
 moral and fiduciary responsibility that 
 he does not always fully recognize and 
 obey. 
 
 An agent is of course * ' out for the 
 premium;" he wants a "big line." An 
 agent, however, who for the sake of a 
 large premium would permit or fail to 
 decline over-insurance, or who would 
 accept insurance without first scrupul- 
 ously affirming the integrity of the 
 proposed transaction, is himself a party
 
 FIRE INSURANCE 89 
 
 to fraud and unworthy of his position. 
 I suppose the agents dislike to give 
 offense by too close scrutiny. They 
 realize that what they may refuse to 
 do some other agent may consent 
 to. They understand that between the 
 risk and the company there is the 
 adjuster; but these condone nothing. 
 The insured should not be permitted to 
 pay premium on an amount he cannot 
 recover in case of total loss. That is a 
 fraud on a fraud, a sort of double-headed 
 fraud. The agent should always bear 
 in mind that the "amount of insurance" 
 carried as property is often accepted in 
 other transactions as a basis of loan or 
 credit. Here is a fraud on the public to 
 which the agent lends himself. The 
 agent should and may in a prescribed 
 or perfunctory way consider the moral 
 character and general reputation of an 
 applicant for insurance. In my opinion 
 this is a first consideration. If I was an 
 agent, I would take note of the 
 applicant's character and reputation as 
 well as his financial responsibility in the
 
 90 THE MAKING OF A MERCHANT 
 
 same manner as if I contemplated selling 
 him goods on credit or loaning him 
 money without security. A man who 
 tempts another to crime is himself a 
 criminal; an agent who permits an 
 applicant to insure for enough to tempt 
 a fire to break out, is himself an 
 accessory. There is usually a fair degree 
 of harmony between buildings and 
 occupants. The best class of merchants 
 is seldom found in the worst class of 
 buildings. 
 
 HAVE been trying to deter- 
 mine in connection with this 
 subject the nature of public 
 control I would advocate. For insurance 
 is a public question in that it has to 
 do with the people as a class and 
 has become a factor in our society. I 
 presume most of the states have 
 supervision over fire insurance. This 
 supervision cannot be expected to be 
 uniform, and it is probable that the 
 statute of each state having laws 
 governing insurance are dissimilar in a
 
 FIRE INSURANCE 91 
 
 marked degree. These different re- 
 quirements and methods and machinery 
 must impose on the companies greatly 
 enhanced expenses. Who pays these 
 expenses? The public. The com panics 
 simply increase the rate to meet the 
 taxes and tolls and loss of interest on 
 deposits, and expenses growing out of 
 obedience to the law. The public in- 
 creases its state or municipal revenue by 
 paying increased premiums. Banking 
 is no more, is not so much a public 
 institution, as insurance. Why not 
 nationalize insurance? Why not pater- 
 nalize insurance? Why not have 
 government supervision, inspection of 
 companies and risks by special 
 examiners? It would require some 
 machinery, but I doubt if the general 
 expense would be greater than the 
 aggregate of the state systems, and it 
 would at least have the benefit of 
 uniformity which is always desirable. 
 The dignity, responsibility and safeguard 
 of the nation would be associated with 
 and sponsor for the plans of insurance.
 
 92 THE MAKING OF A MERCHANT 
 
 An insurance policy would be as good 
 as a bank-note, while infringement of 
 moral law would be a violation of federal 
 statute with the swift punishment that 
 now follows fraudulent banking.
 
 HERE is the end of this book called, THE 
 MAKING OF A MERCHANT written by 
 HARLOW N. HIGINBOTHAM and printed 
 by HELEN BRUNEAU VAN VECHTEN 
 at the PHILOSOPHER PRESS which it 
 in Wausau, Wisconsin at the Sign of the 
 Green Pine Tree Finished this ninth day 
 of May MDCCCC.
 
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