The Washington herald., 1912-10-26
ALL THE EGGS IN
ONE BASKET

Copyright, 1911. By c. II. Keys. New Yat.)
About twenty years ago there was
a man in a New Jersey city who oc-
cupied a very enviable trade position.
He was the owner of a fine mercan.
tile business that he built UP by a
life time Of hard work. He had an
annual business of about s4.O0O.Ooo which
had grown steadily year after year with
out interruption. His profits were rea.
sonable and he put them back regularly
accumulated a business that he valued
at about $4,000.
In the last five years in which he
operated this business as an indepen-
dent business. there was a contant diff
ference Of opinion between himself and
his wife as to how he ought to use
his surplus earnings every year. She
constantly urged and entreated him to
take some OF that money and put IL
into government bonds, which were then
very much more popular form Of in
vestment than they are now. or good
railroad or city bonds. or some other
kind Of security that would be separate
and apart from his business. She was
a New England woman who was accus-
toned to seeing money put away at IN
terest, and in whose mind ran constantly
the idea Of safety rather than on the
theory Of large profits His reply took
different forms. but the gist Of 1t was
always the same.
IF you can tell me where I can get
15 per cent on my money as safely as
l can get it In this business. 1 will put
half OF my yearly profits into that. In
the meantime / am making that much
with perfect safety in my business"
A time came when the business grew
very rapidly and the volume of sales ran
up in one year to nearly $6,OO.000. He
was constantly under pressure during
that year to carry on the business, be-
cause the banking facilities in the city
were not very good and the banks that
were there did not like to lend SO much
to a firm, consisting practically of one
man. The banks. in fact. urged him to
incorporate his business and make II a
instead Of a firm. As the
pressure upon him grew heavier. he be-
came more and more inclined to do this
His wife agreed with him that II would
be an excellent thing, and he promised
her that after the Incorporation was COM
pleted, he would dispose OF some Of the
stock and reinvest the proceeds in some
other way
The Incorporation was completed and
the new company was launched. He had
a good opportunity to dispose of q solid
block Of the stock for $l50.o00. He knew
the inside of the business. however. and
he could see that with the new factories
and industries moving into the city there
was almost certain to be a great expan-
sion during the next twelve months, so
he determined to wait over a year and
collect his dividend and then sell out
The expansion Of business came. With
ii came one of those quick business
booms that are so characteristic or
commerce. linen quite SUD-
denly there was a bank failure in New
York. and one of the chief banks of this
city was involved in 1t and closed Its
doors. At first there did not seem to be
any danger to the new mercantile COM
pany. because its own chief bank was
not involved The merchant. however.
was pretty we'll frightened. and he Of
fered to make sale of some Of his
stock. There were no buyers. He figured
that the furry would end pretty soon
and the sale would be easy to make any
way. so he did not press them any
In a couple of days. however. the presi-
dent Of his bank sent for him and told
him seriously that the new corporation
would have to cut down its loans, be-
cause the bank had received word that
there was likely to be period of tight
money and it was going to be necessary
10 cut down all the loans so far as they
could be cut down. The bank president
also stated that there was likely to be
quite bit Of trouble on account of the
fact that everything was SO much ex-
panded. He told the merchant he would
Bee what could be done.
A very anxious period followed. The
tried. by canceling orders with
the mills. jobbers and wholesalers. to
ease the situation to a point where the
bank could carry II. The more he cur
tailed his need for credit. however. the
lower his credit seemed to 60. The
other stockholders who had come into
the business at the time of the incorpo-
ration and who had not the same abid
Ing faith and constancy that the old
had. became panic-stricken.
and all the credit back Of the concern
except that of the merchant himself
Within three weeks of the first hint
Of trouble. the corporation was obliged
to go into bankruptcy. The country at
large fell into almost a panic condition.
and things went from bad to worse.
Within twelve months. the entire for
tune Of this merchant was swept away
and he himself went through the bank
ruptcy class. In later years he was
able to recuperate in a small way SO
that he Is spending his old age in fair
comfort but not by any means in wealth.
His policy during the years of pros
perity Is exactly the policy that Is
followed by probably nine out Of ten
manufacturers. and other
business men. Almost without excep-
lion, this class of money-makers con-
demns every form Of investment ex-
.ept the bank balance and his own busi-
ness. He sees no reason In the world
Why he should put away. at low rate
,f interest, any money to be used
by other people in business, or by other
in carrying on railroad
building. &c.
I suppose I have heard in my own ex-
perience = hundred times the question
"why should lend money 1t s PEE.
cent to other business that are no bet
Ter than my own when can make 10
DR. Is per cent right here and feel safer
han II lend 1t to these other people
md let them 60 ahead with itr'
The result. of course. is not always
disastrous. It b probably disastrous In
,ne case out Of three. The percentage
q lnrRo enough To emphaai1o a9o1n tia