Morning journal and courier., 1894-02-20
BUSINESS FAILURES.



Clifton Johnson in Outlook
This article is the result of q converse
tlon with the senior member of the Whi.
ting Paper company, one of the largest
and most successful houses In its line In
the country. The talk was carried on in
Mr.. Writings private Office in corner of
one of the big mills of the company at
Holyoke, Mass. In the Office was oompar-
ative quist, though the muasd din and
jar of the machinery in the mill proper
were still apparent. Mr.. Whiting sat at
his desk, which. ilke that Of most business
men, was strewn with letters, papers, and
odds and ends. The reporter had q seat
near q window, aud caught the others
words both liz sense and substance 90 near
ly ss possible In what follows.
When was . boy used to think that
the storekeepers were about the most COM
fortsbly fixed of any GLASS in the commu-
nifty. always saw them taking In money,
and wondered what they did with 1t all.
bills they had to pay and their losses and
expenses. Ny view as a boy illustrates
very we'll the way, to q degree, that every
man who 10 an outsider looks at the bust
ness of another. Almost invariably ne
secs the pleasant side; and that may be no
more than a shell OF prosperous appear
snce. Only the man inside knows the
weak points of his business, and ths best
business has weak points. II does a con-
Germ no good to have these advertised, and
the men inside simply guard them and
keep silent.
ri nd ne ~
In fairly realizing the dangers and oontin-
gencies of 1t beforehand. In ninety-nine
cases ont of one hundred you will fnd
you have underestimated expenses. 1t lie
easy to figure out g profit as an outsider.
1t is difficult to Iealizs that profit as an In
slider.
A danger that the younger men and
those who take up new business are apt
to encounter lies In their esgerness to
branch out, to make improvements, and TO
abandon the moss grown methods of their
predecessors. This all sounds very we'll,
but in practices 1t too often results In dis
aster. As an instance there are the Barring
Bros, an old houss of conservative spirit
aud the greatest supposed stability. Their
failure was the result of the enterprise of
new members of the Arm who found the
old ways too slow and narrow. The only
safe course in business Is to haug on to the
sure things, to make changes gradually,
and only after the most careful considers
ton.
The tendency 10 our country 10 10 extend
ones business too rapidly, to depend too
much on futures, to spread out too thin
the capital that Is absolutely ones own.
We attempt rather more than we can ham
die comfortably. 1t is wise to undertake
only what We can do well. The English
understand this point better than We do.
Their business talent as a nation is re-
msrtsble. When they get q grip on q
good thing they hang on to 1t steadfsstly
year In and year out
1t Ia astonishing how seductive business
is. All classes, experienced and inexperi-
enced. will undertake hopefully the most
doubtful ventures. / know o laboring
man who. within six months of the time
he came to this country as an emigrsnt,
raised seven hundred dollars among his
friends and started grocery store. He
had not an atom of experience, but things
looked promising until the expenses began
to roll up and his money was spent. Tnen
he got crampsd, he could not keep q good
stock, customers left him, and he lost all
he had. At the other extreme know of
an elderly man who, at the age of seventy,
went into q new business and invested bis
entire forture of three quarters of q mil
llUu uObkTc. nc hha Nuo und
such natural advantages over him In the
placing of their plants that be was ruirei.
There is no end of people, both rich and
poor, who make these eanGuine fsilur,
every year. We too readily attempt the
management of a business that Is new TO
us, and we too readily invest the proats of
our own business in enterprises of which
We have o personal knowledge. The man
does best in tie long run who sticks to his
own business, is ohary of outside respoa-
sibilities and schemes, and invests his sur
plus that must go outs de safely at Elk Per
cent.
A good deal of trouble could be avoided
If men realized that business runs In cy-
Giles. For instance, look upon the next
ten years in this way: Almost all manu-
featuring has been stimulated to over pro-
duction. If all the mills ran full time
they would produce q considerable per
cent. more than could bs consumed.
Therefore, In the next three years excess
of competition and short product will
make profits light. BY that time the nat
ural increase of demand, coupled with the
fact that capital has been deferred by
small returns from investing in new mills,
will make profits fairly good. Finslly, In
| the last three or four years of the ds,sde
profits will be high. Then Will come .
| rush of new mills, production, and
stsgnation sgain.
The mile built at the end of the high
profit period are the ones that have the
hardest time. The cost of the plant, and
| the expenses of starting and making o
place In the market for goods there is no
| call for, bring failure to some. and TO 9TH
| ers hsrassing and lifelong burden of debt.
1t Is dangerous for sven . well estab-
ished concern to calculate that the high
| profit period viii be continuous. The
tendency is to reinvest all surplus and
not carry enough reserve, and there comes
q pinch in the light years, or when some
heavy and unforeseen expenditure be
comes necessary.
Besides all this there is the wear and
tear on machinery, and Its liability to be
superseded by that which In better. The
novice who Is about to invest In Q mill
rarely thinks of this item, yet It amounts
to five or ten per cent. of the original eosi
of the machinery yearly Many Arms
have failed because they did not give
proper attention TO this point. Il 10 only
Q question of time when out of date ma
chinery alone will swamp q concsrn.
In starting In business there Ia moth
ing like entering on one that In old and
well established, II you can get II at ths
! ri9ht uriee If n IN aueonaGful and f,rnf