The San Francisco Call. Newspaper, May 11, 1902, Page 13

THE SUNDAY CALL. B. ANDREW CARNEGIE is X8 \ probably the most successful % P'purely business man this ountry has ever known, and now 1at he writes a book to tell us all bout how he did it we shall certain- v read it with much interest. Mr. Carnegie created a business out of nothing. He did not make his for- tune by commission, as a banker, or by handling merchandise, as a trader, but by manufacturing material taken cut of the surface of the earth. Hs never speculated in a share of rail- road stock; he owned a complete rail- road, but built expressly for the pur- pose of his own manufacturing in- dustry; he built mills, but never sold them; he created his own line of lake steamships; he bought land and mined his own ore, and built up from nothing a business which was event- | | A PLACE ALWAYS OPEN FOR THE EXCEPTIONAL MAN. e VERY employer of labor is study- ing the young men around him, most anxious to find one of excep- tional ability. Nothing in the world so desirable for him and so profitable for him as such a man. Bvery manager in the works stand read to gresp, to utilize the man that can do something that i= valuable. Every fore- have under him in his de- pon whom he nerits he obt er ause the greatest test of abill he is able to surround ooks on the shelves will of the rise of many n ranks is not the educa r educated ie not the tinies of either in camp, council, labora- workshop. The great inventions, ts eries in science, g ture have sprung s You can m, or a name a = statue, a great g g T thing great 8 the product of men ve ves to earn an nest work young man of to-day h or counter, to whom F s not yet aisposed to conclude start business in hing in that. Tt T more difficult to t ness of any kind to-day 3ut it a difference in to n of abill existing firms than The have not the contrary, they eir hinges. Capital uence, as be- Real ability, the \gs, nmever was so a e as now, and never rewards. centrates the leading mercial, mercantile ana few great factories itself another law ¥ ese vast concerns sccessfully conducted by sal- No great business of any nusuzlly brilllant and which s in the n ; inter- It has been necessary most of my life of great establishments eds absent capitalists 4 officers. Con- I believe that the part- by men vitally inter- owning the works will make aivide when the corpora- rassed and scarcely knows 1ce is to be at the The great dry uits, ch closely houses that interest their most in the profits of each de- when those fail that aried men only. t of our great ho- take into partner- In every branch at work and con- prosperous, generally speaking, in proportion as they succeed in in- ting in the profits 2 larger and larger ir @blest workers. Co- form is fast coming in ishments. The manufac- uring business that does not have practi- ce] manufscturing partners had better supply the omission without delay, and probably the very men required are the bright young mechanics who have distin- guished, themselves while working for a few dollars per day or the youths from of business t LEA¥ OUT OF A SUCCESS- FUL BUSINESS MANS BOOK OF EXPERIENCE. ded into two great armies al and the industrial. In forces zre in operation. In erything ténds to a further s to a concen- in the hands of the two great fallacies upon and Poverty”—Mr founded, is that the g more and more into the Now the only source ge could obtain cor- few Mr f this point is the that in 1850 the 2 2 farms in the United 1 1860, 199 acres; in in 1880 it was stil The reason d distribution ot ho cuitivates a bor is able to ambitious cap- cres 1 the : tempts to farm upon a large e wit labor of others. In Great Britain nothing has been more significant hat the tillers of small farms have agricultural depres- than those who cul- ol . in both * coun- we proof that under the free 5 - Epppatiar laws land is becoming mope divided among the masses th e whole range of is more im- othing giv the greater satisfaction. small proprietor over umph of ually sold to the steel trust for sev- eral hundred millions. What a man of this experience has to say upon the principles and practice of business is of the very greatest importance. His book is a clear statement of the poli- cies that have been so potent in his success, and of present conditions of trade in America and England, He divides the work into three paris: Tirst—Practical talks on the princi- ples governing a successful busines: career. Second—Trade conditions in America, with cpecial reference to steel and iron and oil and gas welis Third—International trade relations &nd questions of economics which are vital to business successes. The book is published by Double- day, Page & Co. of New York. The following extracts from “The Empire cf Business” contain lessons that may be studied with profit: the large proprietor insures the growth and maintenance of that element in so- ciety upon which civilization can most securely depend, for there is no force in a nation so conservative of what is good so fair, so virtuous, as a race of men who till the soil they own. Happily for mankind experience proves that man can not work more soil profitably than he can till himeslf with the aid of his own family. When we turn to the other army of la- bor—the industrial—we are obliged to con- fess ved by the opposite concentrate manu ness affairs generally The fall in that it sWa vhich tends and b st establishments. is in a few v prices of manufactured articles has been startling. Never were the D! 1 arti- cles of consumption so low are This cheapening process is made by centration. We find 1700 watches pe turned out by one company, and watches are sold for a few dollars apiece. We hdve mills making many thousand yards of calico per day and this necessary article is to be had for a few cents per yard. Manufacturers of steel make 2500 tons per day, and four pounds of finished steel are sold for cents. And so on through the entire range of industries. Divide the huge fac tories into smaller establishments and it will be found impossible to manufacture some of the article . the success of the process being often dependent on its being operated on a large scale, while the cost of such articles as could be pro- duced in small establishments would be two or three times their present price There does not appear to be any cour teracting force to this law of concentra tion in the industrial world. On the con trary. the active forces at work seem tc demand greater and greater output or er from each establishment in or- the minimum of cost should be Hence comes the rapid and con- reached tinuous increase of the capital of manu facturing and commercial concerns, fiv ten, fifteen end even twenty millions be- ing semetimes massed In one corporation - - THRIFT DISTINGUISHES THE CIVILIZED MAN | FROM THE SAVAGE. The importance of the subject is sug- gested by the fact that the habit of thrift constitutes one of the greatest differences between the savage and the clvilized man One of the fundamental differences be- tween savage and civilized life is the ab- sence of thrift in the one and the pres- ence of it in the other. When millions of men each save a little of their daily earn- ings, these petty sums combined make an enormous amount, which is called cap- ital, about which so much is written. If men consumed each day of each week all they earned, as does the savage, of cour. there w. uld be no capital—that is, no id up for future use. et ue see what capital does in the world. We will consider what the ship- bullders when they have to build great ships. These enterprising companies of- fer to build ap ocean greyhound for, lei us say, £500,000, to be paid only when th ship is delivered after satisfactory trial trips. Where or how do the shipbuilders get this sum of money to pay the work- men, the wood merchant, the steel manu- facturer, and all the people who furnish material for the building of the ship? They get it from the savings of civilized men. It is vart of the money saved fo investment by the millions of industrious people. Each man, by thrift, saves a little, puts the money in a bank and th- ipbuilders, who pay 1t is the same bank lends it to th interest for the*use of it with the building of a manufactory, a ilro: a canal, or enything costly. We could not have had ‘anything more than the savage had except for thrift. As 8 rule, you will find that the saving man is a temperate man, & good husband and father, a peaceful, law-abiding citi- zen. Nor need the saving be great. It is surprising how little it takes to provide for the real necessities of life. A little home paid for and a few hundred pounds —a very few—make all the difference. These are more easily acquired by frugal people then you might suppose. Great wealth is quite another and a far less de- sirable matter. It is not the aim of thrift nor the duty of men to acquire miilions. It is in no respect a virtue to set this be- fore us as an end. Duty to save ends when just money enough has been put aside to provide comfortably for those dependent upon us. Hoarding millions is avarice, not thrift. Of course, under our industrial condi- tions, it is inevitable that a few, a very few men, will find money coming to them far beyond their wants. The accumula- tion of millions is usually the result of en- terprise and judgment, and some excep- tional ability for organization. It does not come from savings in the ordinary sense of that word. Men who 1in old age strive only to increase their already great hoards are usvally slaves of the habit of hoarding formed in their youth. At first they own the money they have made and saved. Later in life the money owns them, and they cannot help themselves, S0 OVerpow- ering is the force of habit, either for good or evil. It is the abuse of the civilized saving instinct and not its use, that pro- duces this class of men. No one need be afrald of falling a vic- tim ‘of this abuse of the habit if he al- ways bears in mind that whatever surplus wealth may come to him is to be regard- ed as a sacred trust, which he is bound to administer for the good of his fellows. e man should always be master. He uld keep money in the position of a useful servant. He must never let it master and make a miser of him. 13 / —_— % THE SLIDING SCALR. The trouble’ is that men are not paid at any time the compensation proper to that time. All largeé concerns necessarily keep filled with orders, say for six months in advance, and these orders are taken, of course, at prices prevalling when they are booked. This year's oper- ations furnish perhaps the best {llustra- tion of the difficulty. Steel rails at the end of last year for delivery this year were $20 per ton at the works. Of course the mills entered orders freely at this price, and kept on entering them until the demand growing unexpectedly great carried prices up to $35 per ton. Now the verious mills in America are compelled for the next six months or more to rum upon orders which do not average $31 per ton, at the seaboard and Pittsburg, and say $34 at Chicago. Transportation, iron- stone, and prices of all kinds have ad- vanced upon them in the meantime, and they must therefore run for the bulk of the year upon very small margins of profit. But the men noticing in the pa- pers the “great boom in steel ralls,” very naturally demand their share of the ad- vance, and under our existing faulty ar- rangements between capital and labor they have secured it. The employers, therefore, have grudgingly givem what they know under proper arrangements they should not have been required to give; and there has been friction and still is dissatisfaction upon the part of the employers. Reverse this picture. The steel-rail market falls again. The mills have still six months’ work at prices above the prevailing market, and can af- ford to-pay men higher wages than the then existing state of the market would apparently justify., But having just been amerced in extra payments for labor which they should not have paid, they naturally attempt to reduce wages as the market price of rails go down, and there arises discontent among the men, and we have & repetition of the negotiations and strikes which have characterized the be- ginning of this year. In other words, when the employer is going down the employe insists on going up, and vice ver- sa. What we must seek is a plan by which men will receive high wages when their employers are recelving high prices for the product, and hence are making large profits; and per contra, when the employers are recelving low prices for product, and therefore small if any profs its, the men will receive low wages. I this plan can be found, employers ani employed will be “in the same boat,” re- jolcing together in their prosperity and calling into play thelr fortitude together in adversity. There will be no room for quarrels and instead of a feeling of an- iagonism there"will be a feeling of part- nership between employers and employed. There is a simple mean of producing this result, and to its gemeral {ntroduction both employers and employed should steadily bend their energies. Wages should be based upon a.sliding scale, in proportion to the net prices received for product month by month, It is impossi- ble for capital to defraud labor under a sliding scale. AN IRRESISTIBLE NERSHIP. PART- There 18 a partnership of three in the industrial world when an enterprise is planned. The first of these, not in im- portance but in time, is Capital. Wm}g\n it nothing costly can be built. From it comes the first breath of life into matter previously inert. The strustures reared, equipped and ready to begin in any line of {ndustrial activity, the second partner comes into operation. That is Business Abllity. Cap- ftal has done fts part. Tt has provied «ff the instrumentalities of production; but unless it can command the ces of able men to manage the busines$ all that Capital has done crumbles into ruin. Then comes the third partner, last in the order of time but not least, Labor. If it fails to perform its part nothing can be accomplished. Capital and Business Abil- ity without Labor brought into play are dead. The wheels cannot revolve unless the hand of Labor starts them. Now, volunles can be written as to which one of the three' partners is first, second or third in importance, and the subject will remain just as it was before. Political economists, speculative philoso- .phers and preachers have been giving their views on the subject for hundreds of years, but the answer has not been found, nor can it ever be, becauss each of the three is all-important, and every one is equally essentlal . to the other two. There is no first, second or last. There is no precedence. They are equal members of the great triple alliance which moves the industrial world. As a matter of his- tory Labor existed before Capital or Busi- ness Ability, for when “Adam digged and Eve span” Adam had no capital, and If one may judge from the sequel neither of the two was Inordinately blessed with business ability, but this was before the reign of Industrialism began and huge investments of capital were necessary. The three are equal partners of & grand whole. Combined they work wonders; separate, neither 18 of much account. Thus far, notwithatanding the differences that from time to time have unfortunate- ly rent them apart, they have made the closing century the most beneficent of all that have come and. gone. Humanity the world over is better than it has ever been, materially and morally, and I have the faith that it is destined to reach still higher and loftier planes than even the most sangulne have imagined. Capltal, Business Ability and Labor must be united. He is an enemy to all three who seeks to sow seeds of disunion among them. A BUSINESS CAREER IS THB BEST. + That business offers advantages over other careers seems to Mr. Carnegie In- disputable: Perhaps I may be permitted, without going too far beyond the scope of my text, to make a few remarks upon the in- fluence of a business career upon men, &3 compared with other parsuits. First, then, I have learned that the ar- tistic career {s most narrowing, and pro- duces such petty jealousles, unbounded vanities and spitefulness as to furnish ons with a great contrast as to what I have found in men of affairs. Music, painting, sculpture, one would think, should prove most powerful in their beneficent effects upon those who labor with them as their dally vocation. Hxperience, however, is against this. Perhaps because the work, or the performance, of artists is so highly personal, so clearly seen, being brought directly before the publie, that petty pas- sions are stimulated; however that may be, I believe it will not be controverted that the artistic mind becomes prejudiced and narrow. But, understand, I speak only of classes and of the general effect; everywhere we find exceptions which ren- der the average still more unsatisfactory. In regard to what are called the learned professions we notice the effect produced by specialization in a very marked de- gree. ARNENIE mSuEss . S x the fleld open. Freeddm for all to engage in railroad building wien and where cap- 1tal desir subject to conditions open to all. Freedom for all to engage in any branch of manufacturing under like com- ditions. There can be no permanent extortion of profit beyond the average return from capital, nor any monopoly, either in trans- portation or manufacturing. Any attempt to maintain either must end in failure, and failure ultimately disastrous just in proportion to the temporary success of the foolish effort. It is simply ridiculous for a party of men to meet in a room and attempt by passing resolutions to-change the great laws which govern human al- fairs in the business world, and this, whether they be railway presidents, bank- €rs or manufacturers. The fashion of trusts has but a shopt season longer to run, and then some other equilly vain device may be expected to appear when the next period of depression arrives; but there is not the slightest dan- ger that serious injury can result to the sound principles of business from any or aM of these movements. The only peopie who have reason to fear tru: foolish enough to enter int: consumer and transporter, not ufacturer and rallway owner, are to reap the harvest. Maxims. Mr. Carnegle’s new book, “The Empire of Business,” is at times epigrammatic in its declarations and these terse stafe- ments are easily carried in the mind. Tt is hardly possible to forget such sentences as these: Alm tor the highest. Do not touch liquor, or, if at all, only at meals. Never speculate. Never indorse beyond your surplus cash funds. Make the firm's interest yours. Break orders always to save Conecentrate. Expenditure always within revenue. The trouble is men are not paid at any owners. time the compensation proper to that time. Every employer of labor is anxiously studying the men around him. The millionaires are the bees of the hive, not the drones, Capital, business ability and labor must be united in any enterprise. The fashion of trusts has but a shert season longer to run. g It is infinitely easier for a young/prac- tical man of ability to obtain an interest in_existing firms to-day than ever befare. Subdivision, specialization is the order of the day. The habit of thrift constitutes one of the greatest differences between the sav- age and the civilized man. I have never yet met a man who fully understood two different kinds of busi- ness. The millionaire” who the cheapest article which the community se- cures at the price it pays for him, namely, his_shelter, clothing and food. No young man .ever lived who had nat e chance, and a splendid chance, too, if he was ever employed at all. The younyg man who never had a chance is the same< young man who has been canvassed over and over again by his superiors, and toils om is found destitute of the necessary qualifi- cations. A basketful of bonds is the heaviest basket a young man ever had to carry I would almost as soon leave a youug man a curse as burden him with the ai- mighty dollar. I attribute most of my success in life to the fact that trouble runs off my back like water from a duck. Men who in old age strive only to in- crease their already great hordes ave us- ually the slaves of the habit of hoarding formed in their youth. b At first they own the money; later in life the money owns them. will usually be found ing subordinates. It is not from the sons of the millionairs or the noble that the world receives its teachers, its martyrs, its invemtors, its statesmen, its poets, or even its men of affairs. It is from the cottage of the pour that all these spring. It will be a great mistake for the com- munity to shoot the millionaires, for they are the bees that make the mest homey, and contribute most to the hive after they have gorged themselves full. Money is left by miliionaires to pubile institutions when they must relax thelr grasp upon it. There is no grace, and cuh be no blessing, in giving what cannet ve withheld. Wealth i3 being more and more distrib- uted among the many. The amount ui the combined profits of labor and capita which goes to labor was never so great as to-day, the amount going to capital never so_small. One false axiom you will often heas which 1 wish to guard you against, “Obey orders if you break owners.” Den't do it. Always break orders to save There never was a great cha did not sometimes smash tk ulations and make new ones n Boss your boss just as soon as you can; try it on early. There is nothing he Wi like so well if he is the right kind of boss; if he is not, he is not the man for you to remain with—leave him whenever you can, even at a present iice, and Hald This is no rule for you to follaw. owners. icter who one capable of scerni genius. Our young partners in Carnegie brothers won their spurs by showing that we did nut know half as well what was wan! as they @id. In my own experience [ can say that 1 have known few young men (ntended for business who were not injured by a cul- legiate education. Men have wasted their precious years trying to extract education from an ig- norant past, whose chief province is to teach us not what to adopt, but what to avoid. Men have sent their sons to col- leges to waste their energfes upon obtaip- ing a knowledge of such languages &3 Greek and Latin, which are of no mere practical use to them than Choctaw. “Don’t put all your eggs in one basket™ 1s all wrong. I tell you, “Put all youy eggs In one basket and then watch thap basket.” It is easy to watch and carry the one basket. It is trying to carry too many baskets that breaks most eggs in this country. He who carries three bas- kets must put one om his head, which is apt to tumble and trip him up. It took me some time to learm, but T did learn, that the supremely man- agers, such ou have these never do any wor mselves worth lpo-‘ln' aboul Their point is to make otfiers work while they think. I appiied this les- son in after life, so that Dusiness witn e has pever been a care. My _young did the work and I did the ghing, and I commend to ail the thought that there is very little success where there is little laughter. Nothing {s truer than this, that as a rule the “almighty dollar” bequeathed to sons or dsughters by milllons proves an al- mjfhty curse. It is_not affection for the child, it is seif-glorification for the parent which is at the root of this Injurious dis- position of wealth. There is only one thing to be said for this mode, it fur nishes one of the most efficacious means of rapid distribution of wealth ever known. Here is a remarkable fact, that the masses of the people in any country are prosperous and comfortable just in pre- portion as_there are millionaires. In the old home of our race, in Britain, which s the richest country in all Europe —the richest country in the world save one, our own—there are more millionaires than in the whole of the rest of Europe, and itg people are better off than in any other. You come to our own land: we have more millionaires than in all the rest of the world put together, although we have not one to every ten that is re- puted so. The trouble between capital and labor is just in proportion to the ignorance of ' @he employer and the ignorance of the THE FUTURE OF TRUSTS. + = The people of America can smile at the _efforts of all her railway magnates and of all her manufacturers to defeat the eco- nemic laws by trusts or combinations, or pools, or “differentials,” or anything of like character. Only let them hold firmly to the doctrine of frée competition. Keep employed. The more intelligent the em- ployer the better and the more mmtelli- ,gent the employed the better. It is never education, it is never knowledge that produces collision. It is always ignorance on the part of one or the other of the twe forces, Speaking frem an experience Wot inconsiderable, I make this statement. Capital is ignorant of the necessities and the just dues of labor. and labor is igme- rant of the necessities and dangers of capital. That is the true origin of fries tion,between them.