, 1861-12-28
Hints to the Business Community
Hmm, 41.a N z Nor1d a5fh

We have received communication from
one OF otr most respectable merchants, signed
" "Astor," which embodies so much practical
wisdom and intimate acquaintance with the
commercial quicksands and rocks which have
wrecked many Of our business firms, that We
publish il and recommend its ulaXims to all
contemplated new firms and to many OF the
old ones. Acopy kept constantly on the desk
Of each partner might be Of service as re-
minder Of what they ought. and ought not to
who could tracc their subsequent failure to
IL Joe White & Nicaragua" " might hare been
saved years of anxiety, besides the mannfac-
turing for years Of ''notes for sale in Wall
guided by the following "hints - by al old
merchant:
''Junior partners should insist upon pro-
vision in the copartnership agreement that no
member Of the firm should be permitted to
draw any money from tic concern except for
absolute Eprivate expenses, and these should
be limited to fixed amount.
"One Of the most prominent CAUSES Of fail
ures in the jobbing trade is the Withdrawal Of
capital lori outside Investments by senior
partners.
*sAn business men Wto are known to have ac-
cunlulated capital are importuned, more or
less, for tho Investment Of money in outside
operations. Marvellous tales are told Of in
ycstments By others in bank, insurance or
other stocks, real estate, or other operations,
that yielded enormous profits. Prominent
men, who are known as shrcWd managers in
money affairs, are represented SIS having made
Investments in the thing proposed Perhaps
it is intimated that the peculiar business quail
itications Of the party thus approached have
suggested his name Us director in some bank
or insurance company, and to becomca dlrec-
tor it is necessary to own certain amount Of
etock- Many jobbing merchant has, by flat
terry aud other such appliances, been tempted
and inveigled into the investment Of money
which afterwards proved the cause of his ruin.
There is but one true policy for mer-
,nulatcd profits should b. kept in business, at least
until there is no longer necessity for buying
| goods on credit. No jobber has any capital
! 70 spare from his business until this point Is
reached
more or less dependent upon bank notes to
| meet payments, yet it is quite common for
| jobbers 10 be owners Of bank stock while un-
| der the constant necessity Of loans. Bank
| stocks pay dividends, perhaps, Of seven per
cent, while bank loans cost ten and half per
| cent
"O4esars Of bank stock should Be those ae1so
hdse money to lend, not those seho ore money Dor
71oseers. There is no nbsurdity more transparent
than for constant borrower to b a bank stock
I ho9de.
"1ooee9s ean make capital pay qne PER oent:
mon rule with commission houses and i'm
porters to take off one per cent month for
short paper. No ineestntnt in stocks, Teot e.
tate OF other outside enterprises, c11 b relied
upon to pay o7se pr CENT: month. C9p'tat,
therefore, keEt in TIE business pays The best. A
still sounder reason for keeping capital In hu-
siness is that it is the only safe policy. The
whole fortune Of q general partner Is at thc
risk Of the business whstever it may be. II
is therefore important to strengthen IT as LII
as possible With capital In great CONNER
l FlH1 rNnnST VhaY4a f1rprA DDTI0U
Of the business is done on credit with
paper currency, too, that expands
aud contracts like . b1acksmiths bel
lows), panics orc just as sure to occur a*
peace and prosperity the banks throughout
the whole country expand their loans. anc
thus fill the channels Of business with money
This gives an unhealthy stimulus to business
The volume Of Indebtedness is greatly IN
creased and becomes too CREST for the res
the panic sets H. This was precisely th'
cause Of the panic Of 1857. The whole inde6t
cdness Of the country WIS too great fo1 tn'
whole capital. In addition to the busines
debts there was the enormous railroad lndeht
edness. Whenever an individual owes NOR
money thanhe has ayai1sblo means to pay
: Is seized with panic, and the same pf1nclpl
applies to communities.
<'Nhen jobbers invest money in autsld
operations it tiIverts their time and attentio
) from their legitimate business, and thus On
: dangers its euecees. No jobber can spare tim
to look after outside operations, or to do tn
duties Of director without negiectlng hi
business, It is argued that banks and othe
, corporations should have practical buslnes
men for directors True, no donbt, but
l that d reason why jobber should be direct
ing outside business when he has more tha
, he can do to properly direct his own affair
l 4 partner so1o il constantly Or frequently ddss'
s On o,asids business il Of 6.a Ntze ,aore asres
4 IN :]o6bfrg ao.se than q tgnauee image ant
a | If tits not Stipulated In the agreement that /
is privileged to spend his time IS he please
he is imposing upon bis partners. There IL