'ELAN OLIVE OIL ? POMPEIAN OLIVE OIL ? POMPEIAN OLIVE OIL ? POMPEIAN OLIVE OIL ? POMPEIAN OLIVE OIL
Idleness Is the Mother of Misery
The Department of Labor officials, testifying before the Senate Committee on Labor and
iucation, brought out prominently the danger now facing this^ountry by reason of non
[mployraent and the holding off to await the lower trend of prices.
Capital, Industry and Labor must forthwith co-ordinate all their efforts to employ
'everybody, everywhere, in order to avoid the misery of idleness.
James" Sheldon, economist and financier, of I^ee. Higginson & Co., International Bankers,
issued a pamphlet dated September, 1914, which follows:
RICHES, like responsibilities, seek the
shoulders which are able to carry them
MERCHANTS OF INTEREST
i. nttsh?(! bv tool?- In the civilised world no labor 1* employed with
out capital. Capital Is accumulated savineurplua acqutred by former workm-nd ?>"
served by the prudent; It Is the tool, the mplement without which nothlni can be done In
th#? riviitzAd world In all effort. c&pitAl is one hand, labor Is th# other.
CO-OPFR\TIO* About half a century ago the world discovered that intercommunica
tlon steam and electrlclty make larger communities, larger undertakings, larger demand.
for capftaT. ?<? 'iTw^UInvented the corporation with limited liability. The corporation
was formed for co-operation in Industry, In endeavor and in capital, and depends for its
existence on large masses of money from many s?ur ?. ._. ^ . . . _
THE BfEED.?This was the urgent need?to utilise all the stream which flows from
the continuous toll of man. the golden river whlchlurn..the>whNi of
THE BANKER.?Therefore the world set about locating the little well* of capital.
leading them through rlruUU. streams and rlrers. into the great ^nrolrg Thus arose
the need for the Inrestment Ranker to locate the sources of capital. H s funC\ion is to
serve In the double capacity of. flrst. adviser, conserrer of the world ? capital, and. second.
banker to the corporation, supplying the sinews. In his dual capacity he Is as productive
as the farmer who grows wheat, or the transporter who brings It to market. In stimu_
latiDK and assisting the producer to save his surplus the banker has rendered a third
service; he has add?d one more man with a stake In the country; one more conservative
force. The dangerous man in the community is the one with nothing to lose.
A MAKER OF VAMB8.?He who adds materially to the world s welfare Is a producer.
Human usefulness may be divided into production, distribution, conservation? three func
tions equally important, three legs to the tripod of values. We are witnessing a destruc
tion of values unprecedented in the history of the world Europe has taken Its surplus
and burned it; therefore. America, hitherto a borrowing nation, must now flnanca Itself.
WASTE. We live in the richest country in the world, and the most extravagant. It
Is estimated that America pay? to Europe $26,000,000 a month, interest and dividends on
borrowed money; and the largi&st bank in America eatlmates that America pays for pleasure
vehicle* alone $500,000,000 annually, and then goes, hat in hand, to the peasants of France
to get American railways financed.
SURPL19.?The world has urgent need for the use of your surplus and Is willing to
give you ample pledge for its safe return and higher interest than can be remembered
since the time of your grandfather.
THE SUPREME QUERY.?Thr great puxzle to humanity has never been to create, but
to conserve. The ever present question is, "How shall I keep my surplus?" "How shall I
provide for my family when I am gone?"?and strangely enough, even the prudent, the
careful, have been ever ready to risk that surplus in all sorts of doubtful ways, financing
all kinds of dreams in the hope of great profits
It is the function of the Investment Banker to see that nothing be lost; to make a
dollar and six cents grow In safety where only a dollar grew before
CIVILIZATION.?A civilized community is a group of specialists, each one doing what
he does best, and one measure of civilisation is the readluess with which a community
seeks and accepts the advice of experts?takes counsel of experience.
A broker Is one who executes your orders for a consideration without responsibility.
THE PROFESSION OF BANKING.?An investment banker is one who sells with hi*
recommendation a bond which he owns, having purchased and paid for it after critical
examination. He ?ervts the lender with his advice, his experienced organ nation, his expert
staff and his financial resources His feeling of responsibility continues until the bond is
paid, principal and interest. t
MERC HANTS OF INTEREST.?He serves the borrower by broadly distributing his
bonds throughout the world, placing them with the ultimate holder, and by maintaining
a market for the security, sustains and extends the credit pf the corporation, so that if It
comes again into the money market its borrowing is facilitated.
The function of the Investment Banker is to conserve He is like the captain of a
giant liner, on the bridge, laying the course, deciding how to make the voyage without
shipwreck and disaster; he uses the seaman, the lookout, the engineer, the navigator, but
the decision is his. and on his prudence depends the safety of the ship On the prudence.
wisdom and sagacity of the hanker depend the happiness and welfare of the community.
THE MANUFACTURE OF A SECURITY.?Thus, making a security is one of the most
difficult problems, requiring the consensus of opinion of many experts, many points of
view? the engineer to value the physical property and its earning power; the opinion of
the soundest lawyers to draw the mortgage so that there may be no cloud on the title, n?
weakness in the bond, no loophole for the unprincipled.
NINETY-FIVE VALIANT NOES.?Assembling these opinions, the banker sits in Judg
ment and is obllgsd to say "no" to 95% of the undertakings proposed "No, this is not
sound; ii should not be financed." ?
Th* insurance companies advertise that only 5% of those who die leave an Estate.
Ninety-five men make money, only five adequately save. 5% provide for the future. Pro
duction is nineteen times easier than successful conservation.
THE MEANING OF MONEY.?In the civilised world there Is no employment without
money In giving to the world your savings to use. you are giving employment to men
and women, you are keeping the wolf from the door. Invested money is like mercy, which
Portia says Is- Twire hlesi, it bles^ss him who gives and him who takes'*
<EF.K \ <PF< IA..,,T.?You desire to make monev safe and useful, to make It earn
Interest which will be paid promptly, together with .afety of the principal: you >eelc an
engineer for your bridge ? physician for your Illness a banker for vour surplus- von
rely on expert advice Ask in your community what house in the past century has ac
mU.r7h.n.P?f*ln?r f" ?h* ndest banker, the keenest Judge of values, the most successful
merchant of Interest Take his advice A celebrated banker once said "A lamb is on.
who invests flrst and investigates afterward"'
?7.urm,'\ "'i TO?r banl""- make the most critical Investigation.
Richer lik* responsibilities seek the shoulders which are ?h!#? to rarrv th?m
IN EVERT COMMUNITY THE CONSTRUCTIVE FORCE S a iF THRl-T PRnni'r
TIO.V. DISTRIBUTION. CONSERVATION rom.ES ARE THREE. PRODLC
Capital must be made available to industry, so that industry in turn can properly em
ploy labor. Capital must he made available to industry at a reasonable cost, so that it
will be an incentive to industry to develop plant and equipment to the highest mechanical
efficiency, and in that way labor will be able to obtain a larger compensation for its effort*.
Not many years ago the prevailing idea was that machines and equipment interfered
with labor's receiving fair compensation for its efforts: and in a good many uncivilized
countries when machines catne into existence the laboring man thought that they were going
to replace labor to the extent of eliminating the laborer altogether: and. in many instances,
went to the point of destroying the machines, looking upon them as competitors. Civili
zation. however, has developed the true meaning of machinery and equipment, so that we
now regard them as the greatest aids to labor. Under the old system one man making
shoes by hand was .only able to turn out one pair in five days, whereas under the present
system any one man with a machine (or five men with five machines each one partici
pating in the making of the shoe) can turn out shoes at the rate of five pairs of shoes to
one man per day. In other words, the installation of machinery adds materiallv to the man's
production, and in that way. instead of receiving compensation for making only one pair
of shoes in five days, he receives a very much greater compensation for his increased
The return to the manufacturer is what regulates or what should regulate the compen
sation paid to labor. Of course, the necessary upkeep and maintenance expenses for the
equipment, and the interest on capita! invested, etc.. arc always taken into consideration.
Jt is of the utmost importance to labor to make sure that the industry employing it
is quipped with the best, most up-to-date machinery: that the installations are of the
highest order: that it should be possible for one man plus equipment to turn out a great
deal more than one man minus equipment would turn out: that the greater the output
of (he one man plus the machine, the greater the compensation the man operating the
malhine, or employed in the industry having the equipment, receives for his services.
(? urthermore. the installation of the most up-to-date plant and equipment means a lower
cost of production, and therefore a lower selling cost, so that the installation of the most
up-t>-date equipment in all plants, the construction of the most up-to-date plants and the em
plojnent of capital in the industries of the country have a direct bearing upon, in fact. ARE
THE RTGOEST FACTORS IN, THE PROPER EMPTX>YMENT OF LABOR.
It bccomes necessary, therefore, that labor not only expect a living wage, which
it S fully entitled to. but aiso that capital be invested to the utmost extent in plant
and equipment. i hereby making these plants and equipments larger producers, jnd se
curiig for itself better wages and better working hours.
Subdividing capital, industry and labor:
CAPITAL represents the fixed investment of wealth, receiving a return in the way
of interest on bonds and dividends on preferred or common stock. The investing
of wealth and receiving a return on the wealth invested is what the term "capital" gen
erally stands for.
The capitalist is the man who# has no interest in the enterprise beyond that of re
ceiving the best return possible for the accumulated wealth that he invested, whether that
wealth be his own or he is just the middleman, like the investment banker, who sells
securities. He is responsible, nevertheless, tor the securities sold, and therefore is alway?
interested in making sure that the holdings of the investors who trusted to his knowledge
of affairs (and incidentally his own holdings) receive a good return on the wealth in
INDUSTRY, or what might be termed the management, simply means the farmer,
manufacturer, merchant or jobber?getting together the raw or half-finished material, com
bining these materials, labor and capital, and hammering them all together in a product which
becomes marketable in the world. Industry depends upon the use of capital in the instruction
of plants and equipment and to carry commodities from time and place of production to time
and place of consumption.
Then, too, industry must depend, of course, upon executive management with expert
knowledge of the particular products handled by the particular industry. Executive man
agement of an industry implies the ability to use capital, knowledge and labor in such
a way as to turn out efficiently and economically a product which will have a ready market
and be converted into wealth in such a way that capital will receive its compensation
for capital invested; knowledge will receive its compensation for the executive manage
ment; and labor will receive its full compensation for its efforts.
In other words, every product turned out must be marketable at a price sufficient to
pay capital, industry and labor for their share in the production. The free use of capital
in establishing and constructing plants, equipment, etc., is of the utmost importance to
human life, for it enables labor to receive proper compensation, and likewise enables capital
and management to receive proper compensation for their investment and efforts.
Therefore, it becomes imperative that the construction of plants and equipment to pro
duce commodities essential to human life be engaged in on the largest scale.
The theory that conservatism be exercised by the banker to insure the safety of ha
investment is absolutely correct and its practice absolutely necessary to the general wel
fare. Rut he should not be ultra-conservative to the extent of looking upon that safety
as the safety of a junkpile. On the contrary, it is the safety of a going proposition, for
today when industry solicits labor for the purpose of building plant and equipment it
is expected that the industry take the full risk as to the investments made in plant xnc
To take a concrete example, let us suppose, that S100.000. or $1,000,000 forthat -matter,
is invested in plant and equipment. The moment that ihe $100,000 or the $1,000,000 is
invested in plant and equipment, the banker at once adopts the policy of appraising the
plant and equipment (which actually cost $1,000,000 and the enterprise is a going busi
ness) at 25c on the dollar, saying that the plant and equipment are only worth what the*
will bring on the junkpile, under the hammer and the red flag. ("The banker, especially
the American banker, has also adopted the same policies as to the value of commodities,
appraising the value of commodities at 50c on the dollar, i
Tn other words, when the manufacturer puts up plant and equipment and invests $100.
000. he has immediately depreciated his $100,000 to the extent of "5 per cent; because, from
the banker's standpoint, he cannot count the $100,000 in the asset sheet, but only $25,000
of it. And yet the plant and equipment are worth to him more than the $100,000 actually
invested,?without them he cannot turn out the commodities, he cannot employ capital,
cannot employ labor, and cannot get the finished product to the market.
The same applies to the buying of commodities. The merchant goes out today to buy
a commodity, paying the lowest price for it: and when applying to the banker to finance the
carrying of that commodity the banker take* the stand that to lend only 50 per cent on
that commodity would be a good, safe loan.
Thus the banker, by virtue of his conception of economic affairs, make? it-harder for
the manufacturer and merchant to function properly. He take* the stand that capita!" must
be safeguarded at no matter what cost: that his first duty is to see that the dollar he invests
shall return a dollar. He does not even want to accept the theory of averages, which is very
sound and which has made the life insurance, the fire insurance and the marine insurance
companies of the world. All of these companies take the law of averages into considera
tion. The banker does not accept the law of averages?he wants to know that every dol
lar he invests is secure, so that it will not get away from him: forgetting altogether that it is
necessary to take ordinary business risks?that just as industry (the manufacturer, the mer
chant, the farmer)?has to take its risks, the banker likewise should take risks and depend
upon the law of averages, so that at the end of the year he will find that his losses have been
a small percentage as compared with his profits, and that the total volume of his operation*
has been profitable. Furthermore the economists teach us that taking a risk is not equivalent
to taking a chance as regards commerce. Consequently the bankers, who are, after all,
only merchants, must comply with this axiom.
In this, our reconstruction period, particularly, it is of the utmost importance that capi
tal. industry and labor work together in the way that will make the enterprise produce the.
most at the least cost, and that can only be accomplished by a better understanding between
capital, industry and labor?by a complete understanding that each one is only a wheel and
that in order to accomplish something these wheels must be joined together because
one cannot go on without the other. One broken tooth in any one of these three gears
will upset the entire machinery. Capital must supply the funds with which to establish
plant and equipment, with which to carry commodities from time and place of production to
time and place of consumption. It must finance the world at the lowest possible cost. In
dustry must use the most expert know ledge to obtain its raw materials, to obtain its fund*
at the lowest cost, do the necessary research work, and find the proper markets for its prod
ucts: and must pay a living wage which should include not only sufficient media of ex
change for the laborer to buy shelter, food and clothing, but also to set aside a dollar for the
rainy day. Only when capital, industry and labor get together properly will the three be
able to build an export business that will take care of our surplus of com
modities whether they be the products of the farm, the products of the factory
or the products of the mines. In return we shall receive from other countries that which
they can deliver to us at a cost lower than we ourselves can manufacture. We shall de
liver to them that which they have not. and they shall deliver to us that which we have not.
We cannot repeat too often that only bv the fullest co-operation of capital, mdustrv and
labor shall this be accomplished.
THE PURPOSE OF THIS PUBLICITY IS:
.''J- To ??phasize upon capital the importance of the free movement and investment of the world'* funds in plant, equipment and enterprises, which
will yield a good return on the capital invested, and in that way make the in vestment safe.
2d. To emphasize upon industry the necessity of providing the best plant and equipment in order to increase the productiveness of the laborer's
3d. To affirm that the fear of overproduction should be eliminated by proper commodity-banking facilities.
. * To affirm that we cannot sell our goods to foreign countries without buying commodities in return from them?that nations cannot continue
to buy goods from us unless we buy goods from
5th. To afTmu that, last but not least, we must commence immediately oar peaceful operations?namely, to build home*, build plants, modernize
fsrm??m order to provide employment for everybody, evry where.
MUSHER & COMPANY
GENCk, ITALY WASHINGTON, D. C. NEW YORK BALTIMORE TORTOSA, SPAIN
POMPE&N OLIVE OIL ? POMPEIAN OLIVE OIL ? POMPEIAN OLIVE OIL ? POMPEIAN OLIVE OIL ? POMPEIAN OLIVE OIL f
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