The Washington herald., 1909-03-11
KNOWLEDGE OF INVESTMENTS
The Management OF Corporations
by Charles Lee SeOyfI Spencer
viii TrnaE 4 Co

The responsibilities attached 70 the
nane cement OF railroad, public utility
and industrial corporations are not al
ways thoroughly appreciated by the pub
lie. and many persons overlook the neces-
sity for determining on the one hand. the
character and ability Of the individual
men managing a corporation; and, on
the other. the experience and efficiency
Of the investment firm identified with the
sale OF its securities.
The organization OF a reputable invest
ment house Is comprehensive IN It's scope,
and reaches beyond the limit Of salesman
ship. II IS not merely a question Of find
ing buyers for securities that counts IN
the long run One Of the things which
win for an investment firm the highest
esteem OF its clients Is its business policy
OF always safeguarding their interests.
Well-informed Investors are careful to
| transact their business with firms that
can be relied upon always 20 do this; 20
! keep them informed concerning their in
vestments as the occasion may require
This is the basis upon which al the
/ reputable firms doing a large public
I business. seek TO secure and retain ell
ents and IS, IN a large measure. respon-
-
/ exercise every reasonable precaution 20
/ uaderwrite. or sell 10 the public. only the
/ securities of corporations managed by
/ men Of a conservative type. and who.
az the same time. are sufficiently capable
( 70 conduct their business along construc-
] tive lines
I The fundamental factor IN all the pro-
/ gressira movements of life IS faith In the
/ present and confidence IN the future The
men who have been successful IN the
/ business and Industrial worlds are those
who have recognized this fact and made
use OF H. In other words. their first aim
I has been 10 inspire confidence which has
I been secured by adhering as strictly as
/ possible 10 business methods that have
/ proved themselves 10 be the best ac-
cording 20 past experience and precedent.
/ This is why the success Of every buSi-
/ ness-the big, permanent success-is de-
/ pendent upon the honesty. energy. and
/ conservatism OF the individual men re-
! sponsible for its management Generally
/ speaking. a business that IS not under the
/ supervision Of men OF this stamp IS al
| most certain 10 result IN failure II can
not for long retain the confidence OF the
public. upon which every successful busi-
/ ness must be based
/ This does not necessarily imply that
suspicion should attach 20 al business
I failures. Sometimes the proprietors OF a
/ business are confronted with unforeseen
1 obstacles too difficult 70 surmount. even
when the management comprises men OF
l the most skilled and brilliant minds But
/ such experiences are rare indeed High
| minded men exercise every precaution 20
i guard against such an embarrassing out
/ come For this reason IL Is generally
I true that business failures are usually
\ due 70 one o. two things-ouestionabis
methods. or inefficient management II
I the failure be that OF a private firm or q
/ close corporation. the hruht OF the losses
I falls upon those directly concerned with
I the business the control or ownership of
! which is vested. almost exclusively u
I the hands OF a small company % men.
/ With railroad. public utility and indus
/ trial corporations Il IS plain enough that
/ the situation Is altogether different Here
I the question OF management IS one Of
/ vital importance Il not only concerns
| the large clerical and labor forces. whose
I earnings hinge upca the prosperity Of the
\ business. but IL aisO has an important
4 bearing upon the capital invested IN the
plant In the main. this capital usually
| represents the surplus dollars OF business
men. or money which must earn a fair
/ rate OF income. that belonging 70 widows
l and orphans. colleges with endowment
/ funds. life insurance companies. savings
banks and numerous other equally i'm
/ portant interests.