Jessup had secured from his board of directors an appropriation of fifty thousand dollars for a national advertising campaign. Upon the result of his first attempt would depend his securing a further appropriation for such a campaign as he had planned and as he wanted to execute. This being the case, he did not feel that he was justified in permitting Lynch's advertising to go out as it was. The result was that, just before the time came when copy must be sent to the magazines, newspapers, and street-car advertising companies, Jessup called his old advertising manager into conference and for a week they struggled together, revising the copy, rewriting the selling argument, and placing emphasis in clear, strong, unforgetable figures where it would do the most good.

WHY THE "GREAT FIND" WAS A DISAPPOINTMENT

The result of all this was that Lynch, seeing the writing on the wall, tendered his resignation--which was all too gladly accepted. In offering his resignation, however, Lynch had stipulated that he was to receive four thousand dollars out of the six thousand five hundred still due him on his year's contract. President Jessup's error in selecting an employee had cost him ten thousand dollars in salary. Besides this was the still larger sum in expenses, in wasted effort, and in the disorganization of his entire factory and selling force as the result of the introduction of a man who did not belong there.

His mistake was due to two fundamental errors. In the first place, the facts that a man is personally agreeable, that he belongs to the same political party, that he belongs to the same lodge or fraternity, that his ideas and opinion on matters outside of business agree with his employer's, are merely incidental and by no means adequate reasons for employing him. Nor is the fact that he has made a good record, even an extraordinary record, in some other line of business a good reason for employing him. Perhaps, on the other hand, the fact that his record is made in a totally different business is a good reason for not employing him. It certainly was so in this case.

In the second place, President Jessup did not take into consideration the natural apt.i.tudes of his man, natural apt.i.tudes which he might very easily have determined with a moment's casual observation. Lynch was exceedingly fine in texture; his hair, his skin, his features, his hands, and his feet were all fine and delicate. He, therefore, loved beauty, refinement, small articles, fine lines, elegant designs. These things appealed to him strongly, and because of this he was able to make them appeal to others.

Anything which was heavy, rough, coa.r.s.e, crude, uncouth, or ugly repelled him. He could not take an interest in it except in the most theoretical way. For this reason he could not interest others in it. He had an unusual knack for selling things to people which would appeal to their love of the beautiful and their desire for adornment; in short, to their vanity; but he had no qualifications for selling to people on a purely commercial basis, and especially selling something which was so matter-of-fact and commonplace in its character as the saving of coal and the freedom from necessity of frequent attention.

A WEAK MAN AND HIS TEMPTATION

In the winter of 1914-1915, the people of New York were shocked at the downfall of a man who had held a very high social, church, and business position. He had a wife and two or three beautiful children; he occupied a very prominent place in church and Sunday-school; he was well connected socially; he was a prominent member of one of the more popular secret fraternal organizations; he had a good position at a large salary, and enjoyed the complete confidence and respect of his employers and business a.s.sociates. Like a bolt out of a clear sky, therefore, came the revelation that he had robbed his employers of more than a hundred thousand dollars.

This money he had lost in speculation.

It was the old, old story. He had begun speculating with his own reserve; this was quickly wiped out. Then, in order to win back what he had lost, he had begun to borrow, little by little from his employer. He would win for a little while; then he would lose, and, as a result, would have to borrow more in an attempt to make good his losses and repay what he had borrowed.

This man's employers had to make good a loss of about one hundred and twenty-two thousand dollars. In addition to this, they lost time, money, service, energy, and physical well-being because of the upset in their business and the bitter disappointment to them in the defalcation of their trusted employee. They also spent money tracing him in his flight and bringing him back to face trial and receive his penalty. More money was spent trying to discover whether he had concealed any of the funds he had stolen, so that they might be recovered. All of this might have been saved and the man himself, perhaps, might have been protected from the fate which overtook him, if, instead of judging him by his church record and his pleasing personal appearance and manner, they had taken the trouble to learn something about the external evidences of weaknesses which this man possessed in such a marked degree.

WHY HE GAMBLED AND STOLE

If they had learned some very simple principles, they would have been able to determine at a glance at his curly blond hair; by his secretively veiled eyes; by his large, somewhat fleshy nose, not particularly high in the bridge; by the weakness and looseness of his mouth, and the small and retreating contour of his chin, and by other important indications, that he was selfish by nature, grasping, extravagant, too hopeful, too optimistic, too fond of money, too self-indulgent; that he lacked conscientiousness; that he lacked caution; that he lacked foresight; that he lacked any very keen sense of distinction between what was his and what belonged to others; that he lacked firmness, decision, self-control, will-power. Notwithstanding his lack of all these things, he had made a success for himself, up to the time of his defalcation, by means of a keen, penetrating intellect, excellent powers of expression, the ability to make himself agreeable, ease in mingling with strangers, a natural talent for piety and pious profession, and considerable financial and commercial shrewdness.

A man of this type is nearly always a gambler if he has an opportunity; but he ought to be placed in a position where there will be no temptation to him to rob others to satisfy his gambling proclivities. He is one of the last men in the world who ought to be placed in a position of responsibility, trust, and confidence. For the protection of others and for protection against himself, he ought to be under the most careful supervision. His intellectual powers, his suavity, his ability to meet and handle strangers, his commercial and financial shrewdness, ought all to be given full scope by his employers, but any opportunity to handle money or help himself to the funds of others should be carefully shut away from him.

AN ENGINE WITHOUT A BALANCE WHEEL

Some years ago we had an opportunity to look into the affairs of a mail-order house which had just failed for a large sum, so that its creditors, in the final adjustment, received about eleven cents on a dollar for their claims. The business had been established by a capitalist of considerable wealth, who had made his money in an entirely different line. For some years it was operated in a conservative way by a man who had had years of experience in the mail-order business. The man was well along in years and rather old-fashioned in his ideas. While his management was safe and sane, it had not produced a very large return upon the capital investment. For this reason, the owner determined to engage, as advertising manager, a young man who had several years' successful experience in advertising, but no first-hand knowledge of the mail-order business. The young man did brilliant work. The business of the house began to grow, dividends began to come in, and the owner was delighted.

But the new advertising manager and the old general manager did not get along well together. The young man was progressive, optimistic, had ideas of expansion and growth, while the old man was conservative, careful, and somewhat out of date in his ideas as to business.

There could be no result of such a combination except the final resignation of the old general manager. This was only too gladly accepted, and the young man who had come in as advertising manager was placed in full charge. Following his appointment there was a period of rapid expansion. Many new lines were added; the concern rented two more floors in the building where it was located, and eventually purchased ground and built a fine new building. The payroll doubled, then trebled, then quadrupled. All these things, of course, took more capital, and the owner was compelled to add many thousands of dollars to his original investment, first, for permanent improvement; then, from time to time, for working capital. He was glad to do this, because the business was growing. There seemed to be every prospect that in the near future there would be profits far in excess of anything the owner had ever dreamed of under the old management.

SUPERSTRUCTURE WITHOUT FOUNDATION

Then came a time when other ventures of the owner compelled the use of all of his spare capital. He could no longer add to the funds invested in his mail-order business. He called his new general manager in and said: "I have put a great deal of money into this mail-order business. You have your beautiful new building; you have a goodly amount of working capital; you have expanded and added new lines; and I think the time has come when you ought to be able not only to run along without any more investment on my part, but very soon to show me a nice little profit. I a.s.sure you that it will come in exceedingly handy in the new venture which I have undertaken."

"Oh, certainly," the young man said, "there is no doubt that we shall soon be paying you larger profits than any other enterprise you control, with the new business we have secured and the splendid profits on all lines we are now handling. There is no reason why we should need any more capital, and I do not think it will be very long before we will have repaid you in dividends for every penny of money you have recently put into the business."

And so the owner turned his back on his mail-order business and gave his time, thought, and energy to his other ventures. Reports, of course, reached him regularly, but he had full confidence in the manager, and he was very busy, so he paid but little attention to them.

THE INEVITABLE COLLAPSE

A little more than a year had pa.s.sed when the capitalist was profoundly astonished and dismayed to have one of his best business friends call upon him and request: "Charlie, I wish you could do something for me on that account. It's long past due and it's getting altogether too large for me to carry as business is now."

"Why, what account is that? I didn't know I owed you a cent."

"Why, for that mail-order business of yours. They've been ordering goods from me for over a year now, and what they have ordered during the last six months has not been paid for. I knew that you were good, of course, and so was perfectly willing to extend the credit. But you know, as a businessman, that there is a limit to such things, and I think it has about been reached. I hope you can take care of it immediately, as I can very readily use the funds."

"Why, how much is this wretched account of mine, Will? I didn't know I owed you a cent. It can't be very much."

"Well, it all depends upon what you call very much. It's something like thirty-five thousand dollars."

"Thirty-five thousand dollars! Why, man, you must be dreaming," and the capitalist turned to his telephone and called up the general manager of his mail-order business.

"Why, yes," came back the cheerful, confident tone of the optimistic young manager, "we do owe them around thirty-five thousand, I think. I supposed, of course, you knew all about it. I've been sending my reports in every week."

"But why haven't you paid it? Certainly your sales are big enough and your income from them good enough for you to pay your bills."

"Well, I'll tell you; it is taking us just a little longer for us to get on our feet than I had expected. Then, after your decision not to put any more money into the business, I found it necessary, in order to round out and complete our line, to add some new items which cost us quite a little.

But we are in good shape now and the sales are increasing. We shall soon be able to take care of all of our outstanding obligations."

"How much are your outstanding obligations?" asked the capitalist, with a sinking heart.

"Well, about two hundred and fifty thousand dollars, I should say. But it won't take us long to clean that up now that we've squared away."

"You'd better come right over here and bring your books with you. I want to go into this thing."

WHY HE FAILED

It took only a few hours' investigation of the books to convince the capitalist that his mail-order business was hopelessly insolvent. It took expert accountants to find out why it was insolvent. The trouble was that the young manager had proceeded with only the vaguest and roughest kind of an estimate of cost, based, not upon facts, but mostly upon his own superb guesswork. New business had been brought in by reducing prices. "Low prices" had been one of the slogans of the young man's campaign, and he had cut under all of his compet.i.tors. On the other hand, there had been the slackest kind of management inside. Overhead expenses had mounted and mounted. The young man had been altogether too easy and generous in fixing salaries, granting promotions and increases, and in giving positions to those who applied. He was really a splendid young fellow, with a sympathetic heart and a generous hand, and it was very difficult for him to turn away anyone who could tell an artistic hard-luck story. Expensive equipment had been purchased which had far greater capacity than the needs of the business required; therefore, many machines and other fixtures had stood idle seventy-five per cent of the time, eating up money in interest charges, depreciation, s.p.a.ce, light, heat, and other expenses. In addition to these out-and-out expenditures, there were dozens of little leaks in all the departments of the business, all busily draining away not only possible profits, but the working capital, and, finally, the limit of the concern's credit.

As a result of this kind of management, the final accounting showed the liabilities of the concern to be in the neighborhood of four hundred thousand dollars and its a.s.sets only about forty-five thousand. No one could be found to take the business, even as a gift, and a.s.sume its obligations. The owner himself had his capital so tightly involved in other ventures that he was unable to save this concern, and it was therefore sold under the hammer. The creditors received their little eleven cents on the dollar. The owner's capital investment was, of course, a total and complete loss.

This man made his mistake in placing a business in which there is a mult.i.tude of detail and a necessity for the closest possible scrutiny of every cent of expenditure--a business which must be done upon the smallest possible margin in order to be successful--in the hands of a man who could look only outward and forward and upward. The young man was, indeed, a splendid business getter. He was a natural-born advertiser, salesman, and promoter. His personality was forceful, pleasing, and magnetic. In his intentions and principles he was honest and highly honorable. He was keen, positive, quick in thought, quick in action, progressive, eager, buoyant; he had a splendid grasp of large affairs, principles, and generalities.

But he had no mind for details; he rather scorned them. He was perfectly willing to leave the details to someone else, and even then did not care to hear any more about them himself. He never ought to have been placed in charge of a business involving such minute carefulness as the mail-order business. He was dangerous in any position of responsibility without a partner or an auditor and treasurer competent to look after the finances and all of the details of the accounting and administration. This young man's function was getting in the business, but he was not equipped by nature or by training to take care of the business after it came into the house or to administer the funds which came in with it. The capitalist would have known, if he had exercised one-half the care in choosing a general manager that he did in selecting a driving horse, that the young man was unfitted for the work he was expected to do.

A COMMON TYPE

He would have known that anyone as blonde in coloring and as round-headed as this young man was unfit for a position which required the minutest and most careful scrutiny of every detail of administration. He would also have noticed his wide-open, credulous, and generous eye; the narrowness of his head just behind the ears, indicating his inclination to side-step anything in the nature of a disagreeable contest or combat. The high dome of his head just above the temple and the turned up tip of his nose, both indicating extreme optimism; his very short fingers, indicating dislike of detail and the inability to handle it; his rather soft-elastic consistency of hand, showing inability to bear down hard and firm in cutting expenses and holding down salaries.

This young man's type is very common. We meet it constantly in business, and wherever we have met it, we have always found that, unless it was a.s.sociated with a man of dark complexion, hard consistency, keen, shrewd eyes, the ability to fight and to stick, a sort of bull-dog tenacity, it simply ran away in over-optimistic ventures, dissipated its earnings, and ended in dismal failure.

[Ill.u.s.tration: FIG. 57. Conical hands, with conical finger tips. Indicate refinement, responsiveness, sentiment, love of beauty in music and art, and an emotional nature. This hand, however, is not very practical, and is not the typical hand of the musical performer or creative artist. May be the hand of an actor or singer.]

[Ill.u.s.tration: FIG. 58. Back and front view of hand of Mrs. Flora E.

Durand, of Libertyville, Illinois, Pianiste and Pipe Organist. Mrs. Durand is a performer of unusual skill and artistic feeling. Note squareness of entire hand and of finger tips.]

[Ill.u.s.tration: FIG. 59. Back and front view of hands of financier and administrator. Very practical, matter-of-fact, and sensible; not particularly fond of detail, but can compel himself to do it. Note square hands and finger tips and moderately short fingers.]

[Ill.u.s.tration: FIG. 60. Front and back view of hands of a mechanical and electrical engineer of some prominence. He is not only highly qualified, intellectually, for engineering work, but is a mechanic of great expertness and skill. All his work is beautifully finished and marvellously accurate. Note long, square hands and fingers.]

[Ill.u.s.tration: FIG. 61. Long fingers, indicating a tendency to capacity for details.]

[Ill.u.s.tration: FIG. 62. An example of narrow head, indicating mildness of disposition--an inclination to win way and secure ends by intellect, tact, and diplomacy, rather than by direct conflict.]