Rutland weekly herald. [volume] (Rutland, Vt.) 1859-1877, 1873-11-06
THE RUTLAND HERALD
WHY THEY FAIL.

Z J..
II is mysterious how a firm with
millions upon millions of available as
sets in excess of their liabilities should
fail and be forced into bankruptcy or
suspend payment. We know OF no
other explanation for it than failure
on the part of the management TO COM
preheud the risks taken and the chances
Of meeting the ever varying changes OF
a business. There are certain rules OF
business life that every experienced man
understands, that have to be complied
with before success can crown the efforts
ofthe man who has embarked n,business,
There is great difference in the capa-
city Of men to see what is required TO
meet an emergency, and keep compli-
Gated enterprise off the rocks and shoals
that lay thick about the course they are
sailing. And what is well enough to
recognize in the outset, is that the capa-
city of all men are limited, and that be-
yond this limit no one can go with
safety.
A business conducted on the very
safest principles, and in the strictest ac-
cord with the best known rules, is con-
tinually getting into situations, and cir
custances are constantly occurring where
the sound judgment of manager must
be exercised beyond what any ether ex-
perience has taught or rules provided
for. Events crowd upon each other SO
rapidly that their coming is sometimes
wholly unannounced, by even O cast
ing shadow, and as they come the skill
of business men is exhausted in meeting
them. Business life is a constant crisis
and every large operators affairs has to
be prepared for all kinds of unexpected
turns in fortunes wheel The trader is
constantly making purchases for the flu
ture market the manufacturer creates
his wares for the demand he expects for
them; and they take the risk. The
young man who buys farm has to
trust entirely to the prospects of being
able to raise crops and sell them to those
who buy and consume his productions.
Usually experience and the usual fore
sight of business men, are sufficient
guides of safety in taking these risks,
but all signs fail sometimes, and ruin
and widespread distress is the result.
A money panic comes; the banks
lock up the currency for their own pro-
lection as they term it; private capital
lists hoard all the money they have a
stringency begins to be felt, and the
markets fall fiat. No one dares to buy
goods, and without buyers sellers and
manufacturers must stop; the large
house that has laid in a heavy stock for
a flush trade, finds its goods lying idle,
its debtors cannot pay and there credit
ors are clamorous. Favors have to be
asked and extensions of time must be
had, and at this point the news of their
embarrassment is bruited abroad, and
nothing but money viii answer to re-
lieve the house, whose visible property
may tower millions above its liabilities,
and it sinks before the onslaught of
hungry creditors and ruin stares it in the
face, and accommodations must be had
at no matter what sacrifice. This is the
situation in which the Spragues, Claflin
81 Co., and other old established houses
now find themselves, and it is this situa-
ton that is now to be met. ~.
1t is all very well to say that conf
dence must be restored, and that all
branches and departments of human in
dustry must pull together, but the query
is how and where. 1t can only be done
by the managers of these houses that
are under suspicion being able to show
that they are masters of the situation,
and have capacity to comprehend and
direct the whole scope of their opera
tions. II. B. Claim & Co. seem able to
do this, and no doubt they will get all
the consideration necessary to sustain
themselves. On the other hand, the
Spragues appear to have been doing a
business in all its branches and kinds far
beyond the possible capacity of any sim
gle management, and with them there is
little hope, for though they are perfect
ly solvent, their creditors see that they
are doing too much business, and that
there can be none of those assurances
that creditors feel when they believe that
their debtors comprehend the situation
and know what is needed to conquer
success. We hope this gloomy prospect
is about over, and that this crisis will
teach men the danger of trying to do too
much business, and especially too many
kinds of business, and reverse the mo-
noplizing tendency to which we have
been drifting since the close of the re-
bellion. ......