La Salle Extension University (JkeWorU's Greatest Sxtensio^Silnwersity - CKica gf o Copyright, 1915 LaSalle Extension University LaSalle Extension *dnt$$P£ty "-LfNOis LfBRAmt JUL 9 - J Which? Which of these two men would you rather be ? Their earning power is equal. From the milling grind of twenty- odd years on the firing line of business, the older man has ac- quired the knowledge essential to success. The younger man stored twenty years of the broadest and most liberal kind of business experience in his brain by study and added only two years to his age. The Business Administration Course and Service equipped him for the business battle. At thirty his knowledge equals the other man's at fifty. Taking it for granted that ability is equal, virile strength and years are on his side. Which man will go higher in life? The aim and object of the Business Administration Course and Service is to arm earnest men with years of experience in weeks of study — to help the man on the upward march become an execu- tive — to help the executive climb still higher. 2 Business Administration Bridging the Twenty-Year Gap Look around you at the big-salaried men of the business world. Most of them — the great majority in fact — are well past the middle-aged mark. It is a matter of record that few men have ever become million- aires through the usual channels of business before they reached middle age. Why does this "age question" seem to enter so strongly into the requirements for success ? Simply because up to the advent of the Business Ad- ministration Course and Service only one way to ac- quire organized business knowledge was open to the ambitious man. And that way was the hard way — the long way ; it lay through actual ex- p erience — years of it — re- quiring from ten to thirty years in the harness before a man really had a work- i n g knowledge o f business fund Amentals. But the Business Ad- ministration Course and Service bridges that twenty-year gap ; it places in the hands of the man who wants it, all the solid, sound principles, both specific and general, that underlie business the world over. In two years of spare-time study and daily application in the course of his own work a man can gain experience that twenty years of searching LaSalle Extension University and striving would hardly yield. How can this be so? Simply because in the twenty- year way you must first find what you believe to be principles — try them out — discard — separate the wheat from the chaff. And there's mighty little wheat when you bulk it up beside the chaff. In the Business Administration Course and Service all this is done for you. There are no guesses — no theories ; the men who compiled it are authorities on the subjects whereof they treat. It is the product of no one man's brain. It is the choicest culling of the master minds of business. The Business Administration Course and Service is a con- densed, boiled-down, usable, complete presentation of the active principles of business. And it will do for you in two years what alone and unaided would take you twenty — yes, and more. 4 Business Administration WeVe Done it For You Suppose you could spend several years with the captains of industry. Suppose these men would open their minds and their business to you. What would the result be in dollars and cents? In the Business Administration Course and Service we've done this and more— we've organized the knowledge — we've sim- plified the presentation of the principles — we've given it a begin- ning and a middle and an end. And the work cf many men's minds and brains is given for one man's profit — that man is you. Many men — accounted phenomenal successes by the world at large — are not masters of all the principles laid down and explained in this gigantic storehouse of business fundamentals. If they with comparatively few of the vital secrets can achieve power and position, what can you do with all of them at your finger tips? The Business Administration Course and Service deals with every department — every branch of business — treats it specifically, individually, and clearly — then turns to business as an entirety from the organization end. It not only equips you to forge ahead by sheer force of knowl- edge but places you where emergencies —unexpected situations — are met as a matter of course; you know what to do- — how to do it. The millionaires of America are testimonials to the force of organized business knowledge. Luck in the legitimate course of business never made any man a success. Knowledge and ambition invariably do. The Business Administration Course and Service supplies the knowledge — all of it. You should be willing to supply the ambition — the real desire to climb steadily to or advance in executive work. Ambition plus the Business Administration service will do it. LaSalle Extension University 5 One Business Versus All Business A boy goes into an institution. Through hard work, aggressiveness, and sterling ability he makes his way to the top. But through the fact that he knows no other line except his own, he narrows down — fails to grasp the principles as fundamentals and sees only their application as they affect his own particular concern. You've seen men of this type — highly successful in one field — change to another field and make rank failures. You've wondered why. In a new business they are absolutely at sea. Instead of having been educated in basic principles, they know the old business and that alone. They fail to grasp the fact that the same principles that enabled them to make a success still hold good. The basic fundamentals of business are like electric power — it may be used for driving an automobile or running a derrick, but the underlying principle is exactly the same. Only the application varies. Just as certain laws of nature govern the development of a child, certain fundamental laws govern the growth and development of a business and the men in it. And the Business Administration Course and Service deals in the basic fundamental laws and principles that govern and direct — not a business — but all businesses. Study and application of it not only make a man more efficient in his own particular field but remove the fetters that bind him to " the business he knows." No business can be fundamentally "new" to the man who has mastered this service. 6 Business Administration Ab out Success-Building We may read about fabled cities that sprang into being at the touch of a magic wand; but we know that real cities are not built that way. Each building goes up one brick or stone at a time. And if, in reading about some phenomenally successful man, you gain the impression that his success is the result of some magic charm that gives him a sort of Midas touch whereby everything with which he comes in contact turns into gold — well, you've simply gained the wrong impression, that's all. Because his success has been the result of years of careful building. You can be what you want to be — but first you've got to know what you want to be and have a sufficient desire to realize your ambition to strive for it diligently. Were you to depend upon your own unaided efforts this would mean years of hard, grinding work. But you don't have to depend wholly upon your own efforts. Effort you must make, of course. But the Business Administration Course and Service makes your efforts vastly easier and at the same time they count for a whole lot more. In other words you are building just as carefully and with as much attention to the strength and solidity of your success as you could possibly do by experience alone, but your structure is going up a great deal faster. With the aid of the Business Administration Course and Serv- ice your work — yes, the work you are engaged in right now — becomes more interesting and more profitable. It keeps on getting more interesting and, consequently, easier right along. You're dealing in rules and laws that have moved millions and billions of dollars from one man, or group of men, to another. You're arming yourself by study with years of experience that your elders have had to gain from a life-time of hard knocks. You're acquiring the very things that put your superiors over you. You're applying the things you learn in everyday tasks — you're adding new zest to your daily work, putting new color in your occupation, brightening your business horizon, and opening up roads you never dreamed existed. In the Business Administration Course and Service you will find the easiest, quickest, and most direct way to the most desirable executive positions. LaSalle Extension University 7 Business Leadership— Its Demands What do the executives and business leaders of America give in return for the enormous salaries they draw ? Why are they paid sums ranging from five thousand to a hundred thousand dollars a year? The man at the head of a department or a business could never in the wide, wide world earn his salary by doing detail work. His earning is based on his ability to give right decisions and proper instructions. And this ability — "executive ability," it is called — is based on one thing — knowledge. To be the head of a department you must know that branch of the business and its relation to and effect on the other branches. To be the head of a business you must know all departments — be capable of passing on the efficiency of your department heads and their methods — be able to make suggestions and give instruc- tions for betterment. And to this specialized knowledge you must add a broad, overhead understanding of organization and finance. The above broadly outlines the essentials. All departments and branches of a business are so interlocked in their relations that, like a file of soldiers marching, they must move in harmony, each man in step, or the whole line is thrown into confusion and disorder. Up to the time the Business Administration Course and Service was evolved, no clear and connected analysis of all the specific principles of individual departments of business as well as the overhead or governing fundamentals had ever been put on paper. Today in the Business Administration Course and Service we have a living, breathing, thorough, systematic course of instruction in the application of established principles to modern business. It is a guide that properly used lifts men from any rank to the one above. It takes off the " lack-of-knowledge handicap" and gives you the benefit of years of experience. "Opportunities present themselves and they must be grasped. An hour's delibera- tion and they are gone." Geo. M. Reynolds, President, Continental & Commercial National Bank of Chicago LaSalle Extension University 9 The Business Administration Course and Service Its Aim, Scope, and Plan Building Executive Power That in a word is the aim of the Business Administra- tion Course and Service. Can it be done? A reading of the following pages will not only prove conclusively to you that it can be and is being done, but will also show you in a very clear and definite way just how it is done. Business Leadership It is a well-known fact among informed business men that leadership in modern business requires a degree of brains, broad knowledge, and accurate training never before required. Haphazard business methods spell ruin. The man who can successfully plan, direct, and execute at the head of the great business institutions of today, requires a mind, training, and personal power not excelled by the leaders in any of the learned professions ; in fact, we often speak nowadays of the "profession of business." The big problem of modern business is how to train and develop men to fill the higher positions. Our public schools and technical high schools in increasing numbers, business colleges, and apprentice systems are fast filling the ranks of clerks, bookkeepers, and mechanics with trained specialists. Competition for these positions is becoming keener and keener. At the same time as business is being conducted in larger and larger units, we become more and more aware that these systems of training do not solve the problem of securing efficiency in the higher positions of management. The need of the hour in modern business is some practical plan by which men may better prepare themselves for executive and managerial positions. The Business Administration Course and Service has been prepared to meet that problem as it has never been met before. It commands the attention of men because clearly it is appropriate to the needs and in- terests of modern business. 10 Business Administration How to Acquire Business Training Is there any more reason why a man should study law to become a lawyer than for him to study business if he expects to become a successful business man? It stands to reason that no such exception can be made. How does a doctor or lawyer prepare himself? By consulting the accumulated knowledge which per- tains to his profession and by mastering the fundamental principles underlying it. Society demands at least this minimum training before these men are even allowed to practice their professions. The business world is beginning to demand the same thing. Of every candidate for business honors it asks : "What knowledge and training have you!" Broad vs. Narrow Training Specialization in the industrial world responds to the same general tendencies as in nature. The blade of grass grows up quickly to maturity, but specializes altogether in leaf. The sturdy oak, on the other hand, by long years of growth builds up a strong trunk capable of supporting thousands of leaves. The end is the same: It must spe- cialize in leaves. But notice what a difference the trunk makes. There is your application to the specialization of a bookkeeper as compared with that of an industrial manager in a great industry. The Business Administration Course and Service aims to develop a strong, hearty, robust trunk in the life of a business man so as to enable him to support and direct thousands of men rather than one. It has been developed to meet the ever-increasing demand for organized business knowledge. It presents in an interesting, concise, understand- able manner the fundamental and basic principles upon which a successful business or business career is founded, conducted, and maintained. LaSalle Extension University 11 Benefits to the Executive Power in Management The executive, by means of this organized business knowledge, gains a broader view of business control and operation, strengthens his business foresight, assumes greater initiative, and is enabled to make better use of the talent and machinery at his disposal. He is better able to discuss on even terms the de- tails of every department with the head of the de- partment, each a specialist and an authority in his particular field of endeavor. He is fitted to enter a meeting of the directors, knowing that at every point his will and word will be the guiding influence and that his policies, broad-minded, comprehensive, and sanely organ- ized, will be both respected and adopted. He can offer a ready and practical solution of any problem likely to present itself. All this will give him greater confidence in his judg- ments. Knowledge of Principles Wouldn't the accumulated business knowledge of the best business men of the country, telling in each case why and how they did it, be a wonderful asset to any business man, no matter how thoroughly he understands his own business or how successful he may be? That is just what the Business Administration Course and Service furnishes. But it does not stop there. Out of these combined ex- periences brainy, thoughtful men have evolved business laws — general principles, which have universal applica- tion. Obviously it is these laws of business in which the business man is most interested. He can no more afford to disregard their operation than a chemist can disregard the laws of chemistry. They are indispensable to success. In the Business Administration Course and Service, ex- ecutives and managers will find a clear analysis of all these principles together with an explanation of their concrete application. 12 Business Administration Benefits to the Young Man Broad Business Training The young man aspiring to become an executive may find in this Business Administration Course and Service the vehicle that will carry him along" the right road to suc- cess. In this course and service are laid before you the proved principles which absolutely govern the success- ful start and conduct of a business and a business career. Let us assume that you aspire to an executive business position. Obviously you must have both executive ability and broad business training. For the acquirement of both of these qualifications it is not necessary for you to strive alone and unaided to find out exactly what the leaders of the business world have already learned by experience. They have illumined the blind alleys in business with demon- strated methods of success. You need no longer spend your best years in factory, office, or store, losing opportunities, while you are learning business methods and developing your abilities to assume business leadership. The old apprentice and experience system is too wasteful ; it is not economical. More Rapid Progress In fact, the experience gained today from years of service in a large organization does not fit a man for execu- tive positions. Even though your father worked from the bottom up, what chance have you? Likely he began in an organization with ten men or less. You are living in an age where there are hundreds and thousands of men in an organization. Your chance of being recognized for your superior ability is about one-tenth or one-hundredth as good as in former days, to say nothing of being prepared for an executive position. The smattering of business knowledge gained through experience no longer suffices in this age when the ranks of business are rapidly being filled with men of trained busi- ness minds. The Business Administration Course and Service shows you how you can spend your time in doing, while others are merely preparing. It is truly the service which bridges the twenty - year gap. LaSalle Extension University 13 Why Broad and Inclusive The importance of this broad foundation of the course and service consists in the fact that the mental equipment of the successful business man of today can hardly be too complete. The amount of information required for the proper conduct of his business exceeds that required by the business man of any other age. His information must be concise, accurate, well organized, and must cover a wide range. This course takes a man beyond the half-way suc- cess point. The basic principles involved in each branch of this course and service are alike in all industries. They involve fundamental laws of general application. Short Cuts Ten years of effort and millions of dollars dug the Panama Canal. Today ships passing through it are cutting many days from their sailing time and are saving their owners thousands of dollars. The future saving to the world's commerce will repay the original cost many times. So it is with this Business Administration Course and Service. It presents short cuts to business success. The business experts who have prepared this course and service dug right through obstacles that to many business men seem as insurmountable as the Isthmus of Panama did to an ocean liner before the canal was cut through the barrier. The original work of discovery and construction is hard. DeLesseps failed in his efforts to build the Panama Canal. American engineering genius plus American enterprise completed the work. Now it is open to the commerce of the world. Likewise the minds of our greatest business experts have given to the world in this Business Administration Course and Service short cuts to business success. Do you begin to see why the Business Administration service is so tremendously important and why it is to your interest to get the full benefit of this valuable information and service? 14 Business Administration The Subject-Matter of the Course and Service The Business Administration Course and Service com- prises a broad, thorough, and systematic course of instruc- tion and service in the application of established principles to modern business, for the guidance of executives and men seeking executive positions in the business world. It includes the most important and fundamental subjects which a broad-minded business man is likely to use in the solution of his everyday business problems. The subject-matter of the Business Administration service is divided for convenience into eighteen different sections, as follows : 1. Personal Efficiency, Applied Salesmanship, and Sales Administration < 2. Business Psychology 3. Business English 1±. Business Law 5. Business Economics 6. Industrial Organization and Management 7. Money and Banking 8. Investments and Speculation 9. Organizing a Business 10. Financing a Business 11. Advertising 12. Bet ail Merchandising 13. Credits 14. Collections 15. Transportation and Traffic 16. Ocean Traffic and Trade 17. Accounting 18. Office Management This organization gives a comprehensive course and service. There is nothing cramped or limited in its con- ception. Every section is important; no essential subject has been omitted. Consider for a moment the multifarious activities of the United States Steel Corporation, or of the Marshall Field stores, or of any fair-sized business in your own community. Is not the business manager called upon to pass judgment on every one of these subjects? Each is a link in the chain of business operations. LaSalle Extension University 15 Organization of the Course and Service Organization makes for efficient work in training as well as in business. No haphazard collection or arrange- ment of the subject-matter of this service would be effective. Friction would kill the service as surely as it wears out a disjointed machine. Before reading about the detailed plan of the course you should grasp it as a unit. The effective and logical organization of this course, as well as its practical relation- ship to business problems, is here presented. Observe the systematic organization and orderly development of the whole service into such groups of subjects as relate to busi- ness and personal efficiency. The Personal Efficiency Group The Business Administration Course and Service begins with the Personal Efficiency group. Since individual abil- ity is the secret of all success, clearly the development of individual power should receive first attention. That is the object of the Personal Efficiency group. It includes Business Psychology, Business English, Business Law, and Business Economics. These subjects take up the problem of mental efficiency, effective expression, a knowledge of legal rights, and an understanding of fundamental business principles. The Business Organization and Management Group The next group takes up the Business Organization and Management problems of industry. It includes the subjects of Organizing a Business, Industrial Organization, and In- dustrial Management. Since organization and management are fundamental in the administration of all business en- terprises, these subjects should, of course, be particularly strong and practical. The Finance Group One of the biggest problems that confronts a business man is that of financing his business. Bradstreet's figures show that by far the most prevalent single cause of business failures is that which grows out of ignorance of finance. This subject is presented in the sections on Financing a Business, Money and Banking, and Investments and Spec- ulation. 16 Business Administration The Marketing and Distribution Group The profitable marketing and distribution of goods is one of the greatest problems of modern business. Econ- omists and well-informed business men tell us that the most difficult problem today is not production, but distribution. Accordingly this important topic is ably presented in the subjects of Advertising, Personal Efficiency, Applied Sales- manship, Sales Administration, Retail Store Management, Credits, and Collections. The Transportation and Traffic Group The transportation business is one of the biggest enter- prises of the country. The business man is tremendously interested in his freight charges and the agencies through which his goods are distributed. This group takes up Transportation and Traffic, and Ocean Traffic and Trade, covering the transportation problem on both land and sea. The Accounting and Office Management Group A final group of business activities has to do with the recording and proper accounting of all business activities, whether they are production, financing, or marketing. In this Accounting and Office Management group the subjects of Accounting and Office Management are presented. Thus the circle of business knowledge is completed. It is logical, orderly, and comprehensive. Because of the perfect organization of this service we speak of it as a body Of ORGANIZED BUSINESS KNOWLEDGE. "After forty years of experience," says Adolplms C. Bartlett, President of the Hibbard, Spencer, Bartlett & Company, Whole- sale Hardware, Chicago, "I am convinced that success in business depends not only on natural ability, but on thorough preparation and training in improved systems and exact methods." This observation is especially important now that the Business Administration Course and Service affords an opportunity to all business men to get more exact information about organization and methods of administration. LaSalle Extension University 17 "v^ ; The Keys That Open Every Door The man who regards the Business Administration Course and Service as an extremely valuable set of text-books plus sup- plemental business efficiency lectures, practical problems, etc., is wrong. It is more — it represents the keys that open every door of busi- ness in all its branches. And the Business Administration Course and Service as a whole opens the door of any business to the ambitious man. And at your elbow — at your beck and call — are the minds of men who will show you how, where a question arises, by solving the problem for you. And their solution of one problem, their answer to one question, their co-operation in one instance may be worth the cost of the service one hundred times over. 18 Business Administration What You Receive The Business Administration Course and Service of the LaSalle Extension University consists of three distinct divisions : * 1. The Business 'Training Coarse, consisting of the following: (a) The Business Administration Texts ( b ) The Business Efficiency Lectures ( c ) The Business-Building Talks ( d ) The Business Efficiency Problems 2. The Business Bulletin Service 3. The Consulting Service Each of these three features fulfills an important func- tion in the organization of the Business Administration Course and Service. Each part supplements the others and is indispensable to the unity and completeness of the whole. Now you have thoroughly fixed in your mind the general organization of the course and service. You are ready to consider the service of each division separately. That information is given in the following pages. Before, however, you read the explanations of each fea- ture of this course and service, review once more what you receive, as outlined above. The careful organization of the service accounts for its usefulness and success. * Some of this material is at this date (April, 1915) still in the process of development and is subject to minor changes. "Business Administration is the ability to keep a business in balance; the knowledge to employ men, money, and service; to have such a wide scope of commercial knowledge that action can be immediate and will not be retarded because of the failure to recognize just the action necessary to keep the business both in proper balance and in the ascendency." LaSalle Extension University 19 The Text-Books Their Make-Up The basis for the organization of the Business Admin- istration service is a set of text-books npon the eighteen subjects comprising the fundamentals of organized busi- ness knowledge. Each book is printed with clear type on strong paper and is neatly bound in limp leather binding. Nothing has been overlooked to increase their service and durability or to heighten one's pride in their possession. In these books the practical experiences of the keenest business and professional minds of the world have been collected, analyzed, and reduced to work- ing principles by recognized experts in their respect- ive fields. The result is a masterly development of those business laws that underly the successful conduct of modern busi- ness. These text-books bring to your own work and serv- ice these fundamental business principles and facts. Special attention has been given to the method of pres- entation; so the books are not only authoritative, but un- derstandable as well. Every principle in each of these different and important subjects is developed with the ut- most clearness, always with an eye to practical application. Their Value We have no hesitation in claiming that these works are the best-written, most practical, most comprehensive, and most authoritative business books ever published. As a basis for business knowledge and as practical reference works for daily use, they hold a place distinctly their own. When you have become fully acquainted with the nature and organization of the Business Administration Course and Service, then read the more detailed description of these works. In those descriptions you will find a careful analysis of each subject as well as a more detailed explanation of the practical application of each to actual business situations. The completeness and practicality of these works appeals to the actual needs of business. 20 Business Administration Business Efficiency Lectures What They Are Once every month for two years you receive as a part of your service a neatly bound and printed lecture on a prac- tical and up-to-date business problem. These lectures have been prepared for this service of the LaSalle Extension University by genuine " doers" in the field of business. They keep you in touch with the best experiences and most recent thought in business. What does it mean to you to be able to utilize in your everyday work the business-getting ideas, the efficiency systems, the organizing methods, the trade-building strate- gies, and the productive ideas of big business geniuses and highly successful concerns! That is the value of these lectures. They are the work of acknowledged experts in the problems which they treat. They enable you to meet a larger number of big men and big ideas from the business world. This service is furnished to you in such convenient form that you can take it with you to investigate during your spare moments in your home, on the car, at the club, or in the office. Some of the Lectures We revise the list of these lectures from time to time. At present the number includes discussions on such im- portant issues as : The Regulation of Corporations The Job and The Man Manufacturing Organization Handling Collections Fire Insurance The Consular Service and the Foreign Trade Real Estate Requisites of the Efficient Audit The Fundamental Truth of Scientific Management Business Administration as a Constructive Science Transportation in the United States Reducing Freight Charges to a Minimum Investment Services The Industrial . Traffic Bureau The Committee System of Management LaSalle Extension University 21 Some of the Lecture Writers for the Service Honorable Theodore E. Burton, United States Senator from Ohio; Author of Corporations and the State. Henry Clews, LL. D., New York Financier; Author of Fifty Years in Wall Street and The Wall Street Point of View. J. H. McAdow, Secretary and Treasurer, Staver Carriage Company, Chicago; Former President, National Asso- ciation of Credit Men. Walter D. Moody, Former General Manager, Chicago Association of Commerce; Secretary, Chicago Plans Commission. Samuel MacClintock, Ph. D., Formerly of the American Consular Service, Chicago. Downer McCord, A. B., LL. B., of J. C. McCord & Com- pany, Real Estate, Chicago. Emory P. Johnson, Ph. D., Sc. D., Professor of Transpor- tation and Commerce, University of Pennsylvania; Member, Pennsylvania Public Service Commission. Louis D. Brandeis, of Brandeis, Dunbar & Nutter, Boston; Authority on Scientific Management and Railroad Pates. Harrington Emerson, President, Emerson Company, New York; Author of The Twelve Principles of Efficiency. Warren F. Hickernell, Editor, Brookmire Economic Service, St. Louis, Missouri. K. M. H. Blackford, M. D., Author of The Job, The Man, The Boss; Originator of the Blackford Employment Plan and the Observational Method of Character Analy- sis. J. F. Strombeck, B. S., President, Strombeck-Becker Man- ufacturing Company, Moline, Illinois. C. U. Carpenter, President, Fire-Proof Furniture and Con- struction Company, Miamisburg, Ohio ; Author of Profit Making in Shop and Factory Management. 22 Business Administration Business-Building Talks During the two years of your enrollment in the Busi- ness Administration Course and Service we shall furnish you regularly with our Business-Building Talks, giving helpful hints to assist in the practical application of all the information and benefits of this service. These talks bear directly upon a limited section of the course and service. They emphasize the important parts of the assignment which they cover, show the concrete appli- cation of the work to actual business situations, present for your consideration new angles to many questions, and in general aim to be interesting, helpful, and mentally stim- ulating. A further object of these talks is to assist you directly in the systematic use of all the material of this service. It is the task idea applied to this work. These Business-Building Talks have been made so in- teresting and stimulating and show so clearly the benefits to be derived from an intensive reading and a mastery of all the material which is included that we hope you will be induced to use the service not only for the solution of problems as they arise, but as a means of increasing your grasp of business fundamentals as well. We try to make you realize in a big sense that per- sonal business power, the gift to make quick, accurate, and decisive decisions — that supreme gift of executive genius — is the result of close personal application and a mastery of business principles. Hazy, indefinite, and impractical ideals make a man inefficient, useless. Definite, workable ideals, backed with human energy, make a man efficient — place him on the road to success. And the higher the ideals the better. The right kind of ideals are the most useful and practical things in the world. LaSalle Extension University 23 Business Efficiency Problems The problem method of meeting situations is used wherever possible throughout the service. With every sec- tion of the service at least one practical Business Efficiency Problem is submitted to you for your consideration and solution. In these problems a set of facts drawn from business life and representing the details of actual business situations is proposed and you are asked to outline a definite plan of procedure. These problems are of exactly the same nature as those that a business executive is called upon to solve regularly in the course of his own work or as are found in the reports of subordinates, customers, and clients. It is here that you attack and conquer the actual vital prob- lems of business life. As you progress with this service, you are regularly given an opportunity to solve exactly the same kind of prob- lems that the business organizer, the banker, the advertis- ing manager, or accountant is called upon to solve daily in the course of actual business transactions. The ability to solve quickly, accurately, and finally the unexpected problems that arise in the course of business is after all the final test of true executive ability. The solution of these problems fits a man for the high- est positions of executive responsibility. We urge that you test your ability by solving these problems and sending their solutions to our Business Administration Department. There the solutions will be considered by experts in the respective fields of business administration and helpful suggestions will be made for your benefit. With your co-op- eration, this feature of the course may be made very helpful. Andrew Carnegie's Rules No sharp bargains — do more, not less than promised. If disputes arise always give the other party the benefit of the doubt. 24 Business Administration Monthly Business Bulletins The Monthly Business Bulletins constitute an impor- tant part of the service which you receive for a period of two years from the date of your subscription to the Busi- ness Administration Course and Service. The object of these bulletins is to furnish prompt, accurate, and reliable information upon fundamental business conditions as they exist from month to month. Business is a progressive science. The forces and laws which shape its course are continually changing, often in the most unexpected manner. The great war of 1914 could not have been certainly predicted even one month before its actual outbreak, much less could its effects have been foretold. Such events shake the very superstructure of business and call for intelligent adjustment along all lines. Even during normal times, business conditions are in a con- tinual flux. No business administration service in its entirety can, therefore, be presented in any one book or set of books, however accurate, complete, and authoritative they may be. Those business-shaping forces which grip the very vitals of business are always at work and always changing. It is absolutely essential that you understand and follow these current business movements in order that you may apply to your utmost advantage the business knowledge acquired in the remainder of the service. The LaSalle service, through these business bulle- tins, supplies you with the most important develop- ments in business, politics, banking, investments, the trend in security prices, crop conditions and prices, commodity prices, home and foreign trade, and other factors that may be considered as barometers of trade. The individual and resultant influence of these several factors on business tendencies ivill be clearly traced ivith the idea of assisting business men to steer along safe lines in accordance with actual economic conditions. "Education is capital to a poor man and interest to a rich man. ' ' — Horace Mann. LaSalle Extension University 25 Extracts From the Bulletin Service What About That Investment? The Investor: "Is this an opportune time to invest in high grade bonds or place loans on mortgages V The Executive and Financier: "Is this a favorable time to undertake permanent financings in my business or should I attempt to tide over with short term notes'?" In either case the probable trend of interest rates is of the greatest importance. John Moody, of New York, recently prepared an investment letter in which he directly controverts the theory generally held that we are facing a period of continued high interest rates. His argument presumes to be based upon the law of supply and demand. Demand for capital, so he reasons, will not increase in Europe after the war, but will decline, and far more than the supply. On account of the impoverished condition of the nations now at war, people everywhere will buy less, and conse- quently producer, dealer, and transporter will have less to do. Along the same line he concludes that the demand for commodities will be less and that prices will be lower accordingly. The high cost of living, he believes, will decline sharply once the war is over. This proposition is of tremendous interest to Wall Street and to all bankers, investors, and financial institutions, for on it absolutely depends the course of security prices in the near future. If there is to be a sus- tained demand for capital, then bond prices are likely to decline yet more, and a person would be foolish to purchase even the best securities at the prices now prevailing. If, on the other hand, Mr. Moody is correct in his diagnosis, we have immediately before us the greatest bargain opportun- ities in high grade bonds and securities that the present generation is likely to see. Now what are the facts'? Are the predictions of most of our economists, statisticians, and financiers to the effect that high interest rates are likely to prevail— are they wrong, or are Mr. Moody's observations not well founded'? Does he perhaps reflect an unconscious bias in favor of a "buying movement" so much desired by Wall Street financiers and stock exchange members'? To be frank, we cannot concede that Mr. Moody's conclusions are reasonable. We will all admit the social impoverishment that is caused by the war. It is a factor that must be adequately considered in all our calculations. However, it seems to us that Mr. Moody has not allowed sufficiently for the after-war financing that must take place and continue to make its inroads upon capital. In the first place, the large loans that are being made during the war will have to be shifted to investors after the war is over. This is true in all countries, even the strongest. The Bank of France is making large loans to the French government. The recent war loan of over $1,000,- 000,000 in Germany was taken by the War Loan Society, whose notes the government then exchanged for bank notes at the Bank of Germany. The Bank of England is offering to make loans, dollar for dollar, to every investor who subscribes to the war securities. All of these borrowings are, therefore, virtually loans from the state banks to the governments. After the war is over, many of these loans will have to be permanently 26 Business Administration financed. In addition, heavy indemnities of many kinds will likely have to be paid, thns continuing the borrowing demands of these governments. Over and above these direct war expenses there will be demands for enormous reconstruction costs for devastated countries and delayed enter- prises. Not only will this be true in the areas affected by the war, but throughout the entire world. All the neutral states have been going through a period of liquidation and are now hungry for capital with which to finance a period of expansion and development. In our own country about $800,000,000 worth of maturing securities must be met during the year 1915. It is difficult to tell what proportion of these are held abroad, but we know that a large part of them are held there. The European lender will demand one of two things: (1) that we pay off our obligations to him at par or (2) that we renew them on terms fully as satisfactory as he can secure on his own national bonds. Be it observed in this connection that whatever benefit we expect to derive from foreign liquidation of our own securities is not going to apply to maturing obligations. These will not be sold to us at a discount. We shall have to pay for them at par. If there is to be any selling of our foreign held securities, these maturing obligations will be the first to be thrown back upon our hands. Whether we pay the high rates of in- terest sure to be demanded of our foreign creditors for the renewal of these loans or finance them ourselves, the interest rate on them is likely to be high. We are furthermore called upon to finance much of the increased for- eign trade which we are gaining with neutral nations. Our large favorable trade balance of the last three months aids us greatly in that task. The Argentine Republic just concluded a $15,000,000 loan with us for this purpose. Canada could use $25,000,000 a month. The Scandinavian countries and other neutral nations are making similar demands. Even France has arranged for $10,000,000 credit on food stuffs and a $25,000,000 loan for Russia is being negotiated with J. P. Morgan and Company. Such are the necessitous borrowings going on in all parts of the world. In the face of these demands, our own interest rates, to be sure, have declined since last August. The San Francisco Federal Reserve Bank has lowered its discount rates to 4 per cent. Everywhere money seems to be available for capital needs. This condition is explainable by the usual abundance of capital at this season of the year, by the large reserves re- leased when the federal reserve plan went into effect, and by the decreased demands for money caused by the period of stagnation through which we have been passing. Business is now, however, reviving. This advantage will soon be absorbed and then interest rates will adjust themselves in the natural course of competition to the rates available abroad. These facts lead us to disagree with the conclusions of Mr. Moody and to accept rather the conclusions of Irving Fisher and the eminent Dutch economist, Professor C. A. Verrijn Stuart, to the effect that prices will rise still higher after the war; interest rates will be high and bond prices correspondingly low. While unquestionably many very excellent invest- ment opportunities may be had at the present time, it is doubtful if high class bonds have reached their lowest level. This seems, therefore, to be a pretty good time to undertake permanent financings for sound business enterprises and, obversely, a good time to keep some money available for the excellent investment opportunities that are likely to come after the war. LaSalle Extension University 27 Fundamental Financial Conditions BANK STATEMENTS-DEPOSITS AND LOANS The surplus reserves of the New York banks and practically all the banks in the country have continued to increase. The loan expansion of the banks has been relatively small. Both demand and time deposits in- creased considerably. The percentage of specie to loans is high. * * * All of these conditions indicate sound financial conditions in this country. In the absence of war they would foretell great commercial ex- pansion. BANK CLEARINGS Bank clearings of the past few weeks have shown an increase over those of the closing weeks of 1914. The decrease over the first weeks of 1914 is now only about 10 per cent as compared with 30 per cent in the fall of 1914. Since bank clearings represent quite accurately the volume of trade, these facts are an indication that business is picking up through- out the country. A special feature to note is the increase in bank clearings in New York City since the opening of the Stock Exchange. * * * INTEREST RATES Interest rates are lower at this time than they have been for many months. The San Francisco Federal Reserve Bank reduced its discount rate to 4 per cent. Minneapolis, which began with 6V2 per cent in Novem- ber, is down to 4% per cent. * * * One result of these low interest rates is considerable activity in the way of permanent financing. The St. Paul Railway System easily disposed of its $29,000,000 new 5 per cent debenture bond issues. The Pennsylvania System is contemplating a $100,000,000 general mortgage bond issue to take care of its immediate needs. The New York Central will be the next to follow. There is rumor that the New Haven is considering similar action. Industrial corporations are following the same general trend. This activity in financing at this time of the year when money is plen- tiful seems to indicate that interest rates are not likely to decrease, but to increase in the near future. FOREIGN EXCHANGE Demand sterlings sold in the New York market during the past week at $4.83 1 /2 ) the lowest since 1907. Under ordinary conditions gold would come in much above that figure. Small shipments of gold have been made now. A $3,000,000 shipment has come from China, which indicates that the American dollar is beginning to take its place in foreign exchange. It is not likely that heavy gold shipments will take place from France or England. What little does come will probably be negotiated through the Bank of Ottawa. With a trade balance accumulating in our favor at the rate of about $35,000,000 a week, the question of how this money is to be paid to us becomes a serious one. There are only two ways in which we can get this money: (1) by importation of gold; (2) by importation of commercial values. Since gold cannot be had in large quantities and there is little demand for more merchandise, our only alternative is to buy securities or to take up loans in foreign countries. Since American securities held 28 Business Administration abroad are somewhat cheaper in the European market than they are here, it is likely that much of our surplus will be used to buy back these securi- ties. This buying will tend to raise prices abroad and keep our own prices 1'rom advancing as rapidly as they would if gold could be imported. The Security Market STOCKS The first three weeks of January have shown considerable activity and fairly good prices on the stock market. The third week showed some slackening up in improvement of the market, but not more than was to be expected in the ordinary course of events. Some specialty stocks showed marked improvement, as, for example, the Willys- Overland Com- pany. United States Steel common showed slight gain, largely on the strength of the increase of about 500,000 tons in unfilled orders during the preceding month, but is still a very speculative stock. * * * BONDS The bond market has been fairly active during the first three weeks of the year, but already shows a decrease in transactions of practically $1,000,000,000 over those of 1914. The decrease of transactions is slightly larger than it has been in the stock market. Financings that are in im- mediate view, however, promise a decided increase in activity. * * * LEADING SECURITIES Rumely shares are rapidly nearing the zero mark. A heavy deficit for the calendar year of 1914 is indicated in Chicago advices, and rumors of a receivership are current. * * * Much speculative interest has been taken in Steel common on account of the recent rate decision. Some increases in orders have taken place, but not such a large response as was anticipated by some. Most of the speculative buying of this stock lately has been of the cautious variety; big operators especially regard the stock as too high for a 2 per cent issue and have sold out quickly on the appearance of fair profits. It is not known what attitude the directors will take at the close of this month on the dividend. Fundamental Industrial Conditions (The following topics are treated under this heading.) INDUSTRIAL CONDITIONS GENERALLY CONDITIONS IN NEW OR SPECIAL INDUSTRIES BIG FAILURES AND CREDIT CONDITIONS CROPS EXPORT TRADE COMMODITY PRICES LaSalle Extension University 29 Consulting Service The consulting feature of the Business Administration Course and Service is an invaluable and inseparable part of the benefits which you receive. Puzzling questions will arise. How often, as you sit at your desk or move about your work, are you confronted with difficult questions which you never heard of before? When that happens, what do you do? Do you force a decision by guessing and trusting to luck? Wouldn't you give a great deal at such a moment to be able to consult with a business expert whose function it is to discover the perplexing problems that actually arise day after day in hundreds of business establishments! That is exactly the privilege you enjoy as a subscriber to the Business Administration Course and Service. Our staff of experts in any one of the following highly special- ized departments is at your service : Business Administration Law Higher Accountancy Bookkeeping Interstate Commerce and Traffic Banking and Finance Business English You will at once appreciate the value of the service which this excellent organization of ours is able to supply on special problems. This service often affords you an opportunity to receive advance information, personal and direct in its application, which cannot be found in any text- book. In no other way can you secure such up-to-date and practical information bearing directly upon the very ques- tions that are puzzling you most. Value of the Consulting Service We believe you will readily recognize the tremendous advantage of this feature of the Business Administration service and its immediate importance as related to your daily activities and occupation. All the informational resources of this great institution are at your disposal. You know for yourself how much it costs to secure profes- sional opinions from lawyers, sales experts, advertising 30 Business Administration specialists, and business systematizers. One fee is often a great deal larger than the entire cost of this service. But just because this sort of work is so expensive, we must place a limit upon the number of free opinions. We agree to give you twelve free opinions and furnish you with twelve free consulting coupons worded as follows : Business Administration Course and Service Consulting Coupon This is to certify that the bearer is entitled to information and counsel on one definite proposition relating to business affairs, upon surrender and signing of this certificate at any time during two years from the date of subscription to the Business Administration Course and Service. LaSalle Extension University, Chicago, Illinois. Date Gentlemen : Please render information requested in attached statement. Signed My Registration No. is For all opinions over this number we must make a rea- sonable charge. In such cases we recommend that you send us an account of your proposition. We shall then give you a preliminary statement as to what we can do upon the proposition and inform you of the charge that will be made for a full opinion. You do, however, enjoy the privilege of asking an unlim- ited number of questions upon the subject-matter of the service. Even though great effort has been made to make all the printed matter that goes with this service simple in its organization, clear in its presentation, and comprehen- sive in its scope, yet perhaps every subscriber will, from time to time, meet with issues which he would like to have explained more fully. Bealizing this need for close persona] contact, the LaSalle Extension University extends to you an unlimited and absolutely free use of this feature of the consulting service. LaSalle Extension University 31 Examples of the Character and Value of Our Consulting Service EXAMPLE 1 One of our subscribers, a jobber, wrote in as follows : We are jobbers working the retail trade and travel twenty men. Our line comprises over five hundred items. Under present conditions, when our men call upon a dealer, they first take his order for what he needs and then thumb over our catalogue to see if there is anything else he can be sold. In recapping sales, we find that the individual orders person- ally taken by our salesmen are far too small, considering salary and expense of getting to the town. Mail orders are the one thing today that keep our total sales expense within the bounds of reason. What can you suggest that would tend to help our salesmen get larger orders in their calls on the trade? After ascertaining that our subscriber's salesmen cov- ered their respective territories every thirty days, we made the following recommendation : Before a salesman starts on his monthly trip, let your Sales Manager select fifteen items— articles which are seasonable and should be especially attractive to the dealer. Let these be called the "Fifteen Seasonable Specials." Change them every time a salesman goes over his territory, so that he is pushing something new each time he calls on a dealer. Then instruct your men to adhere strictly to the following program with every dealer called upon : (1) Find out what dealer is ready to order and book him up for same. (2) Go through the "Fifteen Seasonable Specials." Give a brief talk on each one and try to take the dealer's order for at least a small quantity before passing on to the next item. (3) Go through the catalogue in the usual way merely as a reminder to the dealer of items he may need and may have forgotten about. After a thirty-day trial of this plan, we shall be pleased to hear what results are obtained on same. As a result of this suggestion from us, our subscriber found practically every man on his force turning in a largely increased volume of business inside of sixty days. Steps 1 and 3 were already in use. They insured the salesman's getting all the business the dealer was ready to place. 32 Business Administration To these we added Step 2 — injected the selling element into what had previously been largely mechanical order- taking. As the salesman went over the "Fifteen Seasonable Specials," giving his little selling talk and trying to take an order for each one, very few dealers failed to respond with small orders for each of several items. And the total sum of these "several small orders" resulted in a good, substantial increase. EXAMPLE 2 Another of our subscribers wrote : We route our salesmen, directing the towns they are to make each week. The men are supplied with pocket-size Dun books, showing the ratings of dealers in territories they cover. They are supposed to call on every well-rated dealer handling our type of product in each town. But reports show that as an average our salesmen call on only two dealers in a four-dealer town, one dealer in a three-dealer town, and so on. In plain English, our men today are not calling on every pos- sible buyer in their towns. Our letters, entreaties, and commands seem to be without any effect whatsoever. And this in spite of the fact that we positively know that they have time to spare in every town they make. What remedy have you to offer 1 ? Our recommendation was simple : Take away the Dun rating books from your men. Instead of leaving it up to them whom they will call upon, let the same man who makes up their route lists refer to Dun and give them the names of the dealers you are willing to sell in each town. Heretofore, you have routed a man something like this : Monday: Make LaFarge, Wis., and so on through the week. From now on, route the men with the names of the dealers you want called upon as well as the towns to be made, like this: Monday: La Farge, Wis. See Brittingham & Young, Lbr. Dlrs. ; J. J. Creeden & Co., Hardware; Donaldson Bros., Ag'l Implmts. ; La Farge Lumber Company ; F. A. Thayer Co., Bldg. Mat'l. Report results of each call. In other words, instead of leaving it up to your men's judg- ment whom to call on, give them a "specified task"— a certain number of people to see and report on in each town. LaSalle 'Extension University 33 Under this plan the salesman's time was fully occupied from the time he landed in a town until he caught the train out. The men worked harder and far more intensively. Territories were closely worked instead of by rule-of- thumb methods. And as a result the total sales were increased materially because a greater number of dealers were interviewed and the territories were worked more closely. EXAMPLE 3 One of our subscribers, a real estate dealer, inquired as follows : Please advise if an unsecured promissory note which provides for attorney's fees in event of suit upon default is negotiable. Through our legal staff, we advised our subscriber as follows : Such an instrument is negotiable. Putting in a clause provid- ing for attorney's fees, in case it becomes necessary to sue on the note, does not make the note conditional, neither does it render it uncertain within the meaning of the law. The Negotiable Instruments Law provides that the sum pay- able is a sum certain within the meaning of this act, although it is to be paid with cost of collection or an attorney's fee in case pay- ment shall not be made at maturity. This law is in effect in your own state. Our subscribers send in requests for information upon puzzling legal points like this very frequently. Large sums of money are saved for them by this free service. The experts of our legal department always give prompt consideration to requests of this kind. Any subscriber may add a legal staff to his business without any extra charge. The convenience and money-saving value of this feature of our service will readily be appreciated by all business men who have had to pay attorney's fees for legal advice. 34 Business Administration Text- Books and Their Authors 1. PERSONAL EFFICIENCY, APPLIED SALESMAN- SHIP, AND SALES ADMINISTRATION. Irving R. Allen, Sales Expert and Organizer, Chicago. 2. BUSINESS PSYCHOLOGY. Hugo Munsterberg, Ph.D., LL.D., Professor of Psychology, Harvard Uni- versity. 3. BUSINESS LAW. Samuel D. Hirschl, S. B., J. D., Member of the Illinois Bar, Chicago. 4. BUSINESS ENGLISH. Edwin Herbert Lewis, Ph.D., LL.D., Professor of English, Lewis Institute, Chicago. 5. BUSINESS ECONOMICS. Ernest Ludlow Bogart, Ph.D., Professor of Economics, University of Illinois. 6. INDUSTRIAL ORGANIZATION AND MANAGE- MENT. Hugo Diemer, M. E., Professor of Industrial Engineering, Pennsylvania State College; Consulting Efficiency Engineer. 7. MONEY AND BANKING. Henry Parker Willis, Ph.D., Secretary, Federal Reserve Board; Formerly Managing Editor, New York Journal of Commerce. 8. INVESTMENTS AND SPECULATION. Louis Guenther, Editor, Financial World, New York. 9. ORGANIZING A BUSINESS. Maurice H. Robinson, Ph.D., Professor of Economics, University of Illinois. 10. FINANCING A BUSINESS. Elmer H. Youngman, Editor, The Bankers Magazine, New York. 11. ADVERTISING. E. H. Kastor, H. W. Kastor & Sons, Advertising Co., Chicago. 12. RETAIL MERCHANDISING. Paul Neystrom, Ph.D., Associate Professor of Economics in charge of mer- chandising courses, University of Minnesota. 13c CREDITS. Edward M. Skinner, Manager, Wilson Bros., Chicago ; Formerly President, Chicago Associa- tion of Commerce. 14. COLLECTIONS. R. S. White, Collection Manager, American Steel & Wire Company. LaSalle Extension University 35 15. TEANSPORTATION AND TRAFFIC. I. L. Sharf- man, Ph.D., Professor of Economics, University of Michigan. 16. OCEAN TRAFFIC AND TRADE. B. Olney Hough, Editor, American Exporter, New York. 17. ACCOUNTING. Henry Parker Willis, Ph.D.; For- merly Professor of Economics, George Washington University; Associate Editor, Journal of Accountancy. 18. OFFICE ORGANIZATION AND MANAGEMENT. C. C. Parsons, Manager, Shaw- Walker Company, New York; Formerly Lecturer in Business Administration, University of Michigan. It would be almost impossible for an inexperienced swimmer to stem the tide of high waves which to the expe- rienced swimmer would be no task at all. The high waves of commercialism have been successfully swept aside, not once, but time and time again by these ex- perts who have collaborated in laying before you the funda- mental principles of business leadership. They tell you every movement, every action necessary to become a leader. They give you the opportunity to add twenty years of expe- rience to your commercial knowledge. An untrained man might eventually attain commercial success, but age would have overtaken him before he could enjoy the fruits thereof. The Business Administration Course and Service is the only business aid constructed by practical, experienced, suc- cessful business men who can say to you: "Follow these fundamental principles ; we know they are right, not by guesswork or by theory, but by practical application. ' ' To become a successful leader you must have a perfect knowledge of the fundamental principles laid down in this course. It is only a question if you are to gain them through years and years of trial and small pay, and even then if at all, or gain them positively through this course and now. 36 Business Administration Personal Efficiency, Applied Salesmanship, and Sales Administration IRVING R. ALLEN Sales Counsel and Organizer Chieago Retainer fees of $5,000 and up are the rule and not the exception in Mr. Allen's business. His work as sales counsel is just as much a profession as the practice of law. And his earnings come from the same source— money received for advice. The foundation of Mr. Allen's ability to give productive counsel on sales matters dates back to the days when he was "on the road" himself. His records were little short of miracu- lous. Step by step, observing and applying, he forged ahead from the ranks to the private office. From director of sales for one concern he became sales adviser to several. And that was the beginning of the first business of its kind in history. In this work on Personal Eftieiency, Applied Salesmanship, and Sales Administra- tion, Mr. Allen discloses to all subscribers of this service the principles which he has been able to put into effect in such a big way. A BRIEF TOPICAL OUTLINE Developing Personal Power Applying Personal Powei Selling Personal Services to Advantage Selling Goods Organizing a Selling Campaign The Human Element in Salesmanship Analysis of the Market Analysis of the Goods Selling Principles, Methods, and Problems Selling Points Selling Talks Meeting Objections A Winning Personality Arguments and Suggestions Making the Most of One's Ability Overcoming the Antagonism to Buy The Approach, Demonstration, and Close Marketing and Distributing System— Wholesaler, Jobber, Retailer, Mail Order, Chain Store Efficiency in Selling and Its Relation to Business Success LaSalle Extension University 37 Personal Efficiency, Applied Salesmanship, and Sales Administration There are just three things in salesmanship that a busi- ness man is seriously concerned about : 1. Ability to sell himself 2. Ability to sell to others 3. Ability to manage his sales plans We have placed first the ability to sell to advantage one's own personal talents, knowledge, training, ability, and serv- ices. The world is full of capable, efficient, well-trained men working for a pittance, while less competent men pass as geniuses and "get away with it," too. This section shows you how to pass in the commercial world for what you are. It explains how to "cash in" on this work. Ability to sell to others involves a good understanding of human nature, psychology, the laws of suggestion, together with exact knowledge on how to proceed in the approach, demonstration, and the close. Salesmanship, though an art, is based upon science. This subject presents a form of approach that properly prepares the way for your demonstration — a successful demonstration that creates desire and causes conviction that it is best to buy, and a method of closing that is easy and natural. The explanation given in this section for overcoming the antagonism to being sold is the most unique and effective that has ever been presented. Experienced salesmen are using and endorsing it constantly. Scientific management in salesmanship was as inevitable as better methods of organization ~~^ and management in factory and shop. / r i|K The third part of this section pre- / -.gm^tZu f®% C sents the best methods for planning, i organizing, and managing salesman- ship work. These three sections cover the whole range of sales- manship problems. Each group is complete, scientific, and tested by experience. 38 Business A dministration Business Psychology HUGO MiJNSTERBERG Ph. D., M. D., L.L. 13. Professor of Psychology Harvard University Professor Mlinsterberg holds so many college degrees and honors from institutions of learning, both in this country and abroad, that no enumeration of them can add to his eminence. He has held the presidency and other high offices in many learned societies, both national and international. Since 1892 he has been Professor of Psychology at Har- vard University. Professor Miinsterberg was pleased to ac- cept the preparation of our text on Business Psychology because of his interest in this, his chosen field, which underlies all progress in thought and industry. Professor Miinster- berg stands in the front rank of scholars, and what he has written is worth the study of every man. His work is eminently practical. Many business concerns have availed themselves of Professor Miinsterberg's services as a practi- cal consulting psychologist in solving their business problems. A BRIEF TOPICAL OUTLINE Application of Psychology in Business Sensation and Perceptions Laws of Memory— Association, Repetition, Freshness, Impressiveness, Selective Power The Memory Process The Laws of Attention— Vividness, Exclusion, Transition to Activity, Feeling of One's Self in Attention Application to Business and Selling Imagination Control of the Will Suggestion Hypnotism Self-Suggestion The Acquirement of Abilities Psychological Adaptation of Working Tools Fatigue Vocational Fitness The Selection of Fit Individuals Graphology Phrenology Mental Tests Practical Application to Business and Personal Efficiency LaSalle 'Extension University 39 Business Psychology There never was a time in the world's history when the practical business man was so much interested in the sub- ject of psychology and personal efficiency as he is today. The reason is simple. Psychology has been liberated from its theoretical, bookish past and has been related very closely to everyday life. In business we speak of the psychology of advertising, the psychology of salesmanship, the psychology of this and that proposition, and even of a psychological business de- pression. Our business vocabulary is full of psychological terms. Every successful business man who wishes to acquire unusual ability in the art of handling and influencing men, must know a great deal about the mind and human nature. It is the function of business psychology to interpret these simple, everyday facts about the mind as chemistry describes the composition of matter. This section of the service includes a study of the mental bases of successful leadership, the mental processes involved in the proper selection of employes, production, and marketing, and the psychological conditions of personal efficiency. In the first part of this section a thorough study is made of all the functions of the mind which are essential for success in commerce and industry. It shows what such factors as the relation of mind to body, perception, memory, thoughts, attention, suggestion, feeling, emotion, volitions, training, and habit formation play in business economy. In the second part the chief question is how these mental functions differ from man to man and how these differences of intelligence, talent, character, and temperament can be tested, can be adjusted to the various commercial and industrial tasks, and how the individual can de- velop those energies which are needed 1 for special activities. The aim is greater personal and business effi- ciencv in every direction. 40 Business Administration Business English Nathaniel Butler (University of Chicago) says of Professor Lewis' Business Eng- lish: "It touches the very problems of which i ts title promises the so- lution." Professor Edwin Herbert Lewis, author of our section on Business English, holds the degrees of Ph. D. and LL. D., and is Professor of English at Lewis Institute, Chicago. He is not only a pioneer, but a great out- standing leader and authority in the field of business English. He is a man of ability and literary tastes. His work has received the endorsement of teachers in commercial Eng- lish throughout the country and is used as a basis of study in our leading colleges and commercial schools. Professor Lewis is the author of A First Book in Wilting English, A First Manual of Composition, An Introduction to the Study of Literature, Applied English Grammar, and other books on English. Business English offers the business man an opportunity to become more effective in his English. A BRIEF TOPICAL OUTLINE The Value of Good Written and Spoken English in Business Business Letter Writing Letters that Sell Goods, Collect Money, Adjust Complaints, Win Promotion Follow-up Letters Originality in Letters The Thought Behind Letters that Sell Interest and Clearness Paragraphs and Sentences Correct and Effective Punctuation Grammatical Correctness Effective Sentences Idiomatic and Figurative Phraseology Tone and Degree of Dignity A Business Vocabulary The Business Letter in Detail Intelligent and Interesting Business Reports Advertisement English for Copy, Circulars, and Booklets LaSalle Extension University 41 Business English Is there such a thing as business English? It might surprise you to learn how much language leakage there is in your daily work. Sales managers, cor- respondents, stenographers — all along the line in almost every business establishment there is an inexcusable lack of practical application of good, gingery, business-getting English. Careless, slipshod English, both in speaking and writ- ing, on the part of a manager, salesman, or correspondent has often been the cause of failure to land new customers or hold old ones, just as it almost invariably holds back the subordinate from promotion. It is this lack of effectiveness in the English one speaks or writes that constitutes lan- guage leakage. And a mighty costly leakage it sometimes proves to be ! How many of your business letters, for instance, are as effective as they might be? A letter may be grammatically correct and yet not be a result-getter. Regardless of how grammatical it may be, if it doesn't get the business it isn't written in good business English. And the same is true of all other literature that pertains to business — advertise- ments, catalogs, booklets, circulars, etc. Professor Lewis has handled this subject of business English in a delightfully interesting and masterful manner. He gives you a clear idea of what business English really is and how it may easily and readily be acquired. A knowledge of business English gives one the personal satisfaction of speaking and writing correctly on any subject at all times. It gives him a more extensive vocabulary, makes him a clear thinker, a ready writer, a convincing, logical speaker. And it adds immeasurably in effective- ness to everything he writes or says. Everything in this section is prac- tical. The examples are taken from everyday business transactions. 42 Business Administration Business Law Mr. Hirschl received his college and legal education at the University of Chicago. He holds the degrees of Bachelor of Science and Doctor of Jurisprudence, Cum Laude, the highest scholastic honors which this great law school could confer upon him. He is a member of the Illinois State Bar and is now applying his great ability in the active practice of law in the city of Chicago. He is a well-known specialist in patents, trade-marks, and copyrights. Hirschl's Business Law, therefore, is the work of a scholar and a successful practicing attorney. His work has been adopted as a text-book in many of America's leading col- leges and universities. It is an ideal book in that it meets the practical needs of busi- ness and teacher. On account of the completeness and authoritativeness of the work, it serves as a valuable reference book for business law problems. A BRIEF TOPICAL OUTLINE Law in General Contracts Partnerships Corporations The Law of Sales Commercial Paper Damages Negligence The Law of Agency Chattel Mortgages Real Estate Law Deeds Personal Property Assignments Copyrights Trade-Marks Garnishments Attachments Landlord and Tenant Judgments Trusts and Trustees Administration of Estates Executors and Administrators Power of Attorney Leases Negotiable Instruments Patents Sales Bankruptcy and Receivership Bailments Insurance LaSalle Extension University 43 Business Law "The greatest risk in business is legal risk," are the words of J. Pierpont Morgan. Every man is presumed to intend the legal consequences of what he voluntarily does. Ignorance of the law excuses no one. All business transactions, therefore, come within these rules. The pathways of commerce are strewn with the wrecks of business enterprises which ran counter to the law. Business sharps and crooked promoters have fattened on the legal ignorance of honest, successful business men. Millions of dollars are charged to Profit & Loss annually on account of ignorance of the law of credits and collections. Business expectations are shattered and fortunes dissi- pated everywhere because of invalid contracts full of "jokers." Trade advantages are sacrificed and heavy advertising investments lost, clue to inexact and inadequate knowledge of the law pertaining to patents, trade-marks, copyrights, and unfair competition. The hiring of labor, making of contracts, selling of goods, signing of notes, and all the common commercial transactions require a practical working knowledge of law. Nearly every business man suffers sometimes from an inadequate or imperfect knowledge of law. Let us take a concrete case : B went to his tailor one day and introduced his friend, C, saying, "C is 0. K. Let him have any- thing he w ants; I ivill guarantee ^ ^ his account." C ordered an ex- pensive outfit, which he failed to A pay for when demand was made. M The tailor then requested B to M make the account good. This B m refused to do, and the tailor cotdd f5 not recover. WHY? Had he \ studied Business Law he ivould have known why. 44 Business Administration ERNEST L,. BOGART, Ph.D. Professor of Economics University of Illinois Business Economics Professor Bogart has had a very extensive training- in Economics. He received the de- grees of A. B. and A. M. from Princeton Uni- versity and Ph. D. from the University of Halle, and has pursued special investigations at the universities of Princeton, Columbia, and Berlin. He has been Assistant Professor of Economics, History, and Politics at Princeton University; Assistant Professor of Economics and Social Science at Indiana University; Professor of Economics and Sociology at Oberlin College; and is now Professor of Economics at the University of Illinois. He holds membership in the American Economic Association and the National Tax Association. In Business Economics Professor Bogart has given business men an exceptionally clear and practical discussion of the economic laws which underlie business activities. A BRIEF TOPICAL OUTLINE Capitalistic Production Factory System Localization of Industry Division of Labor Concentration, Integration, and Large-Scale Production Agricultural and Mineral Resources of the United States Trusts and Monopolies Recurrence of Crises Strikes and Lockouts Woman and Child Labor Industrial Education Speculation and Crises The Modern Wage System Conciliation and Arbitration Workmen's Compensation Profit-Sharing and Co-operation Problems of Distribution— Rent, Interest, Profits, Wages Saving and Spending Socialism Taxation and Tariff Industrial Progress LaSalle Extension University 45 Business Economics Business Economics treats of the ways in which the world makes a living. It deals with the larger aspects of business as arithmetic deals with numbers. Every sound business transaction is in accord with economic laws and principles. A committee of the Investment Bankers Association of America said, concerning the importance of this subject: "It is worth the time of any bond man who has not had college courses in economics to read a general work in economic theory." That is the verdict of all practical and successful busi- ness men who have given this subject their best thought. Business Economics treats of the fundamental economic laws governing the production, sale, and consumption of goods, and explains the principles affecting labor, wages, money, lands, rent, waste, conservation, etc. In these days of high cost of living, trust problems, tariff reform, currency problems, labor unrest, socialism, profit-sharing, co-operation, etc., the average man is at sea without a compass. Wrong notions and fancies cause him to make serious mistakes. His ideas need the direction and systematization acquired from a study of Business Eco- nomics. It exposes the most common economic fallacies. John D. Rockefeller once said: "Keep to broad, sure lines, and study them to be certain that they are correct ones. Watch the natural operations of trade, and keep within them." What are " broad, sure lines"! What does he mean by "natural operations of trade"? These are not generalities. Rocke- J feller knew what he was talking about. I He had analyzed their relationship to| business success. Business Economics treats of just such fundamental business-shaping forces. 46 Business Administration Industrial Organization and Management HUGO DIEMER, B.A., M.E. Prof. Iiulust. Engineering Pennsylvania State College Mr. Diemer holds the degrees of B. A. and M. E., and is Professor of Industrial En- gineering at Pennsylvania State College. He is a member of the American Society of Mechanical Engineers, The Society to Pro- mote the Science of Management, and the American Academy of Political and Social Science. Mr, Diemer is one of the great students and leaders in the field of Industrial Man- agement. He has not only studied the problem from every angle, but has strengthened his work by practical experience. He was for- merly Superintendent of the National Motor Vehicle Company and is now, in addition to his work as professor, a consulting industrial engineer, installing the very systems whifch he explains in this section. Mr. Diemer is well known among engi- neers and business men for his exceptionally clear and practical ideas upon management problems. A BRIEF TOPICAL OUTLINE Organization, Administration, and Control Line Control Line and Staff Control Functional Control Committee Control System Efficiency Making Charts of Organization Locating an Industry Manufacturing Plants and Equipment Power Generation Heating, Ventilating, Humidifying, and Air- Washing Appliances Store Rooms Planning Department Purchasing of Materials and Supplies Receiving, Storing, and Recording Materials Determination of Cost Distribution of the Expense Burden Standardization Scientific Management Time and Motion Studies Inspection Wage Systems Welfare and Betterment Work Employment of Labor Reports to Executives WE MAKE YOUR HOME A UNIVERSITY The Advantages of Correspondence Instruction By A. S. MONROE (Written for "Spare Moments," Rochester, N. Y.) There are Schools and Schools On the start I want to remind the reader that there are schools, and schools, both of the resident and the correspondence variety. I remember stray- ing into a small isolated western town some years ago, far from a railroad and other facilities of civil- ization, and having one of the people of the place point out to me with local pride the "academy" — a rude one-story frame shanty-like building. I was curious to see what this seat of learning was like, and went at once to visit the school. I shall never forget the funny little "professor" who met me at the door with the profoundest of bows. He was glad to "show off" his school, and while airily flaunting a naming red silk handkerchief, evidently a badge of higher degree of refinement than that generally prevailing, called the class in "Laiin," as he called it. I wondered what school had turned him loose with that way of emphasizing the last syllable, and listened with much amusement as he "heard" the class recite. His Latin class was the classic touch that ranked his village school as an "academy" — Latin and algebra, which he also as- sured me he taught. This was the first bit of higher learning to be introduced in that part of the world, and as such has historic interest; but I doubt if the instruction had much influence in awakening a love for learning, or sent many of the strapping youths and pretty maidens to college later. Select a Reputable, Well Established School In the same way, though not so grotesquely, per- haps, I have since found little "one-horse" schools scattered here and there over the country, calling themselves "colleges" and "academies," which bore, little resemblance tb the well-established, well-or- dered college and academy of recognized fame. And I have also seen correspondence schools ad- vertised to teach "nursing in six weeks," "French in thirty days," bookkeeping in a marvelously short period of time, and journalism "while yon wait." I do not believe that such schools bear any more resemblance to the reputable, well-established schools of correspondence than the small country "colleges" bear to Harvard, Yale or Dartmouth, And so, at the beginning, I do not want to be understood as standing back of all correspondence instruction by any means; to this end I shall con- fine myself strictly to the comparison of methods of teaching as employed by the two systems when each is carried on In The most representative man- ner. Superiority of Correspondence Instruction The correspondence method, in the first place, is the superior of the two for the purpose of the ma- ture man or woman, or the youth who wishes to learn quickly and thoroughly any one subject, without regard to other subjects or to others who are pursuing the same line. The student is in a class by himself. He pays his money, and enrolls to learn that one particular thing, not to attend school for a certain number of months. He is in earnest about wanting to learn it, or he would not have enrolled. Having en- rolled, he receives his instruction papers, and his first lessons. He studies a lesson thoroughly, pre- pares the exercise called for, mails it to the school, and it comes directly under the eyes of his in- structor, who is an expert in that particular line. The instructor examines the work, crosses out a line here, adds a few words there, explains a point on another page that the student seems but to have dimly grasped, and by the time he has finished; LASALLE EXTENSION UNIVERSITY, CHICAGO, ILL. WE MAKE YOUR HOME A UNIVERSITY criticising the sheets, they are well marked up with red ink notes. He dictates a letter to the student, showing him more fully where he was wrong and recognizing where he was right. He does not hesitate to say just exactly what he thinks of the student's work. He is not looking into timid eyes, or the face of a son of an im- portant patron, nor is he held in check by the student's sensitiveness to criticism. He tells him the truth fearlessly, and returns the work to him with a new lesson. Student has No Disadvantages The student, on the other hand, receives his work with actual pleasure in the criticism, because no one else is there to see now he has blundered, and he can go over his lesson in the upmost privacy, searching out the reason for each correction, refer- ring again to his lesson sheets, and if not fully understanding all the points, he has only to write a letter with his next exercise, asking for further explanation. On his part, no dread of seeming stupid deters the request for further light. Also he can take as mucL time as he needs to prepare his work. Bear in mind that the sole object here is to learn the thing; not to pass an examination or to receive a degree, or to "get through." If it is necessary for him to do the same lesson over a half dozen times/ before he has perfectly mastered it, he has every opportunity for so doing. And x when that lesson is perfectly mastered, he takes up the next You are Neither Held Back nor Pushed The correspondence student is not held back by students of slower mental grasp, neither is he pushed ahead beyond his power to assimilate. He progresses from lesson to lesson, learning all there is in it, going back and reviewing from time to time, and all the while growing stronger in his knowledge and in his confidence in himself. He is not diverted from his study by class mates, col- lege societies or other things that go to make up resident college life. He has paid his money to learn a certain thing, and he is making a business of learning it. Men and women of mature years pursue corre- spondence instruction with the same zest that they would a college course, minus the embarrassment of going to school after they are grown up, or alongside their sons and daughters. Business men and women, while pursuing one line, can quietly prepare for another without knowledge of their doing so reaching the ears of employer or friends. There are many perfectly legitimate reasons why they should prefer that their plans remain un- known. Better than Night School A distinct advantage over night school is that the man or woman who has been down town all day reaches home with a sense of relief that makes another trip out after dinner ' anything but invit- ing. By the correspondence method, the lesson awaits him, and he has only to go to his room and in its quiet seclusion do his studying and prepare his lesson. Practical, not Theoretical Instructors In resident schools, business subjects specially cannot be so practically taught, for the reason that experienced, successful business men in different lines are not found scattered over the country de- voting their time to teaching others by the methods by which they accomplish their own success; but as the name and success of the , correspondence school depends wholly on the success of its gradu- ates, experienced instructors must be and are se- cured, in the great centers, who will devote their time to this work. ■ The school must have expert, practical instruction if it is to be a permanent in- stitution, and it can afford to employ only those instructors who have made a marked success of the very line which they essay to teach. This entirely eliminates from the correspondence school ranks the purely theoretical instructor, and puts in his place the man who has himself done the thing in a notably successful manner. You do not find successful writers teaching lit- erature in resident schools. You find, rather, those educationally fitted to appreciate good literature, inculcating this same appreciation in the minds of a rising generation. The resident school clings throughout to the theory; the correspondence school, to the fact. People of all Classes Study by Extension Methods In a correspondence school, students are drawn from every quarter of the globe and every element of society. Convicts in prison* prepare by corre- LASALLE EXTENSION UNIVERSITY. CHICAGO, ILL. WE MAKE YOUR HOME A UNIVERSITY epondence for the day of their return to the world ; sailors under tropical skies, dreaming of home, get ready to earn their living on land; Chinamen, Jap- anese, Indians — representatives from every country of the Orient; and Englishmen, Frenchmen, Ger- mans, Scotch, Irish, Welsh — students in every coun- try in Europe — are preparing, by correspondence with American schools, for a higher order of work In their own line or for a new line altogether. For- eigners in America take this means of perfecting their English, and foreigners, contemplating a re- moval to America, prepare in this manner for American methods of doing business. The corre- spondence school is the world's educator, in special lines. It is altogether possible, also, for one to acquire a complete general education in this manner, if he desire, and many ao so; but the great strength and splendid usefulness of the correspondence school lies in the fact that the lone sheep herder far off on the plains of Australia, while watching his sheep, can prepare for a position as a short hand reporter, and when his sheep are sold go down into a city and get a position for the summer or winter months, as he may choose, perhaps changing his occupation and manner of life entirely. A mis- sionary, losing her health in far-off India, can study engraving, and be ready when she returns to her earlier home, and her health has improved, to accept a good paying position. She need not feel the gnawing pain of dependence. The ranch- er's daughter, hungering for a sight of the great world beyond the wide plains and the purple hills, can learn proof-reading, and when she has saved a few dollars, enough to take her to a city, she will not be reduced to menial work, a position in some kitchen, or to poorly paid factory toil; she will be qualified to do something that brings a living wage in the market of toilers. The small town youth, dreaming of making his fortune in a city, can learn any one of a dozen or more lines — advertising, letter-writing, court reporting — it is needless to mention them — and go to the city equipped to accept a position that will keep him among men who are not his inferiors. A man while holding a position as salesman, stenographer, bookkeeper, clerk, office assistant, etc., can prepare for another better paying position or a more con- genial line. Professional men, who find themselves unsuited to their professions, adopt this method of securing business training. It is, in short, the great, silent, secret, transfer system, by which men and women are enabled to go about their business, and at the same time grow into another business, or greater efficiency in the line they are pursuing. The Cost is Reduced Ninety Per Cent A sheepskin from a college will not necessarily do these things for a man or a woman and, further- more, the possession of the sheepskin argues the possession of a certain degree of financial support. A man can thoroughly master a subject by corre- spondence at easily a tenth of the cost of learning the same thing at a resident school. He learns while pursuing his regular duties, whatever they may be. To attend the resident school he must be in close proximity to one — which the majority are not — and must have his time to devote to the course. The Man who Knows Wins A man is never hired to fill a position according to his grades received at college or for the sake of his diploma. He is employed because he has beea able to impress an employer with the idea that he can do the work. After being employed, if he makes good he is retained; if not, he is dropped. And the thoroughness with which he has mas- tered the doing of that particular line of work determines how he shall handle the duties incum- bent upon him. To sum up, the advantages of the correspondence school over the resident school, as I find them — and I have had much experience in the best schools of both kinds — lies in the fact that the correspond- ence school course is more on the order of an in- vestment. The student pays the fee to learn to do a certain thing, and the only object in taking the course, in making the investment, is to accomplish that undertaking. The sole aim at the correspond- ence school is to perfect him, individually, in that which he attempts to learn; while in the resident schools, students are sent more often, as a matter of course, by the parents. There are many divert- ing avenues to draw their attention. The instruc- tion cannot be so individual and personal. The student can slip through without a thorough mas- tery of that which he is supposed to learn. Favor- itism and personal likes and dislikes have their influence. The success of the school does not de- pend on the student's later application of knowl- edge gained, because the school does not hold itself responsible for the student's success; the corre- spondence school makes itself so responsible. LASALLE EXTENSION UNIVERSITY, CHICAGO, ILL. CONVERT YOUR SPARE MOMENTS INTO DOLLARS What You Can Do With A MARGIN OF FIFTEEN MINUTES A DAY Read This Interesting Article By Thomas Tapper Written for The Chicago Examiner "Up to the very moment when the silver cord is loosened and the golden bowl is broken, and the spirit returns whence it came, a man's never-ceas- ing duty is to let himself out. Whatever the main stream of his labor is, he should so master his environment that the great watersheds of life about him (the Present and behind him (the Past) ) will send into the main stream as many contributory rivulets as possible. "We will call the stream his business, the con- tributory rivulets his culture. Gradually their Waters will mingle so perfectly that they are in- distinguishable. Then the man of business is cul- tured, and he can talk to you to any length and not reveal the nature of his calling. " 'You are right,' says the business man.' It is all reasonable, and sounds fine, but when is a man to get time for this desirable state of affairs?' ''The answer to this is, get it out of the ' waste basket; out of the odds and ends of time that are thrown away every day. There is no man living^ who cannot devote to cultural ends one ninety- sixth of his time in twenty-four hours. Just a shade more than one per cent. "One-ninety-sixth of twenty-four hours is fifteen minutes, to be had either uninterruptedly, or in three sections of five minutes each. "But what can a man do in bo little time? "Few men realize that when they deposit money for interest-earning, they must also deposit time. What time can do to a 5-cent piece deposited daily for fifty years is amazing. It gives a new point of view to a 5-^ent smoke, a 5-cent glass of beer, or a 5-cent piece spent for any of the merry-life temptations. Wh&t makes the result incredible is the time plus the regularity of deposit. "Now, fifteen minutes a day amounts approxi- mately to ninety-two hours in one year. If you will pick up any volume of good literature and read its pages deliberately, pronouncing every word, and giving thought to the author's meaning, you will find that you can read in fifteen minutes about 3,000 words. "This amount of reading performed daily for one year gives an aggregate of over 1,000,000 words, or 5,000 pages averaging 200 words per page, or twenty-five volumes of 200 pages each. In ten years this amounts to 250 volumes. "Now, this use of fifteen minutes per day as ap- plied to books will work with the same accumu- lative interest when applied to anything else.- "3ut let us, for the sake of true culture, the deep and lasting kind, assume that one-third of our fifteen minutes must be devoted, by and large, to reading the hard places a second and a third time, to looking up words we do not understand. Even then, in a twelvemonth, a man can read intensively seventeen volumes of 200 pages each, or more than 170 volumes in ten years. "Jhe secret lies, however, not in the general desire to do this, but in DOING IT, and in doing it with regularity. In time, interest begins to accumulate in the form of scholarships, this swells the principal, and you move on more rapidly. The very culture that comes from your effort to liberate yourself through the Labor required by Education gives you an intellectual momentum that permits more on the future than seeris possible at the beginning. "As an intellectual retreat for old age, these daily portions of an hour will erect for you a mansion which could not be built with all the gold and silver of the realm." DEPARTMENTS Business Administration Law and Procedure Commercial Law Interstate Commerce Effective Business English Higher Accountancy Effective Public Speaking Commercial Spanish Banki idF ing and rinance LASALLE EXTENSION UNIVERSITY, 4046 Michigan Ave. CHICAGO, ILL. LaSalle Extension University 47 Industrial Organization and Management Every business man will admit that there is a proper way of organizing his business ; also, that it is as necessary to keep in touch with the best systems of management as to maintain connections with a good bank. That ever-recurring problem of systems of wage pay- ment, for example, is only one in a thousand that is worry- ing a great many business men : Shall it be time work, piece- work, premium payment, task and bonus, or profit-sharing? Industrial Organization and Management treats such problems in management in a thoroughly scientific way not only for the manager and department heads, but for all members of business and manufacturing organizations who expect to have a share in directing the conduct of its af- fairs. The author recognizes that efficient management de- mands the co-ordination of shop management with general organization accounting, buying, selling, and advertising. This intimate interrelation between the different parts of a business enterprise is constantly emphasized. The methods of the most successful modern business en- terprises are analyzed for the purpose of determining the underlying principles of their success. Illustrations and forms are used freely to explain and guide the work. The subjects are treated from the point of view of a practical factory superintendent who, though now a college professor and extension lecturer, continues to give the benefit of his experience as a consultant in installing methods of management. The leading division headings are principles of business organization ; types of organization ; internal organization ; manufacturing plants and equipment ; purchasing ; receiving and store-keeping; the planning of work; the philosophy of cost accounts ; methods of collecting material and labor costs: the distribution of the ex- f pense burden ; standardization ; prin-p ciples of scientific management; time" and motion studies; welfare and betterment work; control of labor; method of paying employes ; records and reports for executives. 48 Business A dminist ration Money and Banking H. PARKER WILLIS, Ph.D. Secretary, Federal Reserve Board Dr. Willis is especially well qualified to write upon money and banking. He was trained in some of the best colleges and uni- versities in this country and in Europe and then taught Economics for a number of years, specializing in Finance. During all this time he was preparing himself as an expert by studying money and banking problems and by practical work in the field. He was Assistant to the Indian- apolis Monetary Commission and joint author of its report; Expert of the Ways and Means Committee of the House of Representatives, Washington, 1911-13; Expert of the Banking and Currency Committee of the House of Representatives, 1912-13, in which capacity he did much to shape the character of the Federal Reserve Banking System. He is now Secretary of the Federal Reserve Board. This section on Money and Banking was prepared for us before the Federal Reserve System was established. Dr. Willis has now completely rewritten and enlarged the work so as to include all the latest developments. A BRIEF TOPICAL OUTLINE Importance and Principles of Sound Money The Gold Standard Monetary System of the United States Banks and Their Functions Classes and Systems of Banks Deposits Checks Clearing Notes Loans Endorsements Collateral Clearing Houses Banking as a Business Trust Companies Foreign Exchange Officers and Directors of a Bank and Their Obligations Bank Statements and Their Significance Banking Statistics in Relation to Business Conditions Importance of Good Banking Connections in Business The Federal Reserve Act and Its Operation LaSalle Extension University 49 Money and Banking Have you ever thought how intimately related the sub- ject of money and banking is to Business Administration? Many a business man does not know how to deal intelli- gently with a bank. The result is that the banker places a low value upon his ability, restricts his borrowing power, and thus handicaps him in the development of his business. A knowledge of the services which a bank is prepared to render and of the best methods of availing one's self of these services is indispensable to the largest success in business. The business man uses the bank daily to deposit or borrow money, purchase exchanges, discount notes, collect bills, consult on financial matters, and use its other valuable serv- ices. Many successful business men serve as officers and di- rectors in banks. The law holds them strictly accountable for the conduct of the institution for which they stand spon- sor. How can they discharge these duties or pass intelli- gently upon the acts of subordinates without a thorough knowledge of the principles of money and banking! The section on money treats of such topics as money, its functions and the principles determining its value; credit and its meaning in modern business ; the relation of money and credit to prices and the rate of interest; money and panics ; a description of the monetary system of the United States. The section on banking treats of such topics as the func- tions of a bank ; the elements of banking operations ; analy- sis of a bank statement ; the banking system of the United States; state banking; branch banks; credits and loans; savings banks; trust companies; clearing house; the Federal Reserve System. All of these matters are treated from the standpoint of their practical application to business affairs. They contain money-making and money- saving ideas. 50 Business Administration Investments and Speculation LOUIS GUENTHER Editor, The Financial World In 1903 Mr. Guenther started The Finan- cial World in New York to discuss invest- ments in a manner that could be readily- understood by the masses. Through the columns of this paper Mr. Guenther has waged relentless warfare against all kinds of investment frauds and has given in- structive advice upon sound investments. Get-rich-quick plunderers realized that if they were to continue to prosper in their illegitimate business, they must first get rid of The Financial World. They attempted to destroy the influence of the paper among in- vestors by spreading all sorts of slanderous and libelous reports. Finally in a suit against one of these companies for repeating their libelous charges, Mr. Guenther recovered a verdict of $17,000. Mr. Guenther has had special opportuni- ties to get inside information concerning in- vestment methods. He is a fearless writer and an authority upon these subjects. In his work on Investments and Speculation he has given us the benefit of his knowledge and experience. A BRIEF TOPICAL OUTLINE The Relation of Investment and Speculation The Element of Risk Farm Loans and Mortgages Bank Loans Insurance Company Loans Maximum Loans on Land City Real Estate Titles to Real Estate Leasehold Bonds Coupon and Registered Bonds Mortgage Bonds Income Bonds Collateral Bonds Debenture Bonds Government Bonds Public Service Corporation Bonds Irrigation Bonds Mining and Timber Bonds Guaranteed Stock Valuation of Bonds The Mystery of a Balance Sheet Stock and Produce Exchanges Trading on Margin Call Loans Bulls and Bears Puts and Calls Curb Markets Panics Business Barometers LaSalle Extension University 51 Investments and Speculation Why is a knowledge of investments and speculation valu- able to a business man? Because the element of risk and uncertainty is always present. It is a well-known fact that millions of dollars are lost every year in this country through unwise investments in wild-cat promotions and stock-gambling propositions. This, however, represents only one side of the case. Bradstreet's list of business failures records losses of a much larger total, in which earnest, sincere, conscientious, business men and women from every hamlet, town, city, and county in the United States, have lost their savings because they invested in unsound business enterprises. These costly blunders, and many others never recorded, may be avoided by a knowledge of the underlying principles of judging in- vestment values which are presented in this book. Every one ivho has funds to invest or money with which to speculate seeks, mainly, two things: profit and security. It is of these two all-important points that the booh treats. It shows how to make money work most effectively for its owner. The work gives also a scientific discussion of the finan- cial forces and movements which determine business pros- perity or depression. The explanation of business barome- ters will enable a business man, in most cases, to anticipate business tendencies intelligently rather than to wait blindly and defenselessly for them to crush upon him. Take, for instance, just one point: "What does "banking re- serves above normal'' mean to you in your business? Many other subjects are explained which the careful investor should know. A knowledge of these princi- ples is the safest and cheapest insur- ance against capital losses that any business man or investor can carry. 52 Business Administration Organizing a Business MAURICE H. ROBINSOIV Ph.D., Professor of Industry and Transportation, University of Illinois Professor Robinson received the B. L. and M. A. degrees from Dartmouth College and then took his Ph. D. degree at Yale. He has been Professor of Industry and Transportation at the University of Illinois since 1902. Professor Robinson is also Associate Editor of the Journal of Accountancy. He has been a special expert agent for the Census Bureau and has served in an advisory capacity in various relationships. He is a member of the American Eco- nomic Association, The American Political Science Association, and The Efficiency Society. Professor Robinson, besides having prepared our section on Organizing a Business, is author of A History of Taxation in New Hampshire, Business Organization and Man- agement, and numerous articles relating to railways and corporations. A BRIEF TOPICAL OUTLINE Factors of Wealth Production— Land, Labor, Capital, Management Methods of Conducting Business— Communism, Socialism, Co-operation, Private Ownership Individual Proprietorship The Partnership Articles of Co-Partnership Joint Stock Companies Mining Partnerships The Corporation Common and Preferred Stock Issued and Unissued Stock Treasury Stock Full-Paid and Non-Assessable Stock The Corporation Books and Records The Charter By-Laws Resolutions The Officers and Directors of a Corporation Combinations and Trusts The Holding Company Comparative Efficiency of the Various Types of Organization The Principal Forms Used in Conducting Business Affairs LaSalle Extension University 53 Organizing a Business In organizing a business enterprise what type of organi- zation shall I use! Shall it be an individual proprietorship, a partner- ship, a joint stock company, or a corporation? What are the advantages and disadvantages of each form of organization! Shall we join with other business enterprises in an association, pool, trust, or holding company! If so, how! What are the limitations of each form of association? How can I draw up a good partnership agreement or judge intelligently what my lawyer should include in such a contract! What are the essential features of a charter, the by-laws, the rights, duties, and obligations of officers and directors of a corporation, and the right methods of procedure at a stockholders' meeting? All these and many more problems in business organ- ization are treated in this work. It is a complete guide to the principles of business organisation and the transac- tion of all corporate affairs. It is an aid that every business man needs for frequent reference — a work that an officer or director of a corpora- tion would want by his side at a stockholders' meeting. This section treats these subjects in the following order : the nature of organization ; individual proprietorship ; the partnership; the corporation; the formation of a corporation; the charter ; the by-laws ; rights and obligations of bondholders, stock- holders, and creditors; the officers and directors of a corporation; business combinations and trusts ; comparative efficiency of different types; and the leading forms used in business organ- ization. 54 Business Administration Financing a Business "Credit has done more, a thousand times, to enrich nations than all the mines of the world." Daniel Webster The author of the section on Financing a Business has been for many years the editor of The Bankers Magazine, the leading- bank- ing monthly of the country. A man who can write for the bankers of this country and command their respect must be an authority upon finance and his services should make a good addition to any business. Mr. Youngman is also the editor of Knox's History of Banking in the United States and is author of the book on Credit Currency, widely distributed by the American Bankers Association. Leading commercial and banking associ- ations recognize Mr. Youngman's abilities and frequently call upon him for addresses. He was an expert witness before the Currency Committee of the House of Representatives of the United States Congress. His ability and experience are at your service in this work. A BRIEF TOPICAL OUTLINE Requisites of a Successful Business Enterprise Demand Competition Patents Trade-Marks Monopoly Secret Processes Location Character of Management Amount of Capital Fixed Capital Working Capital Surplus Margins of Financial Safety Methods of Raising Capital Stocks Bonds Wasting Assets Loans Where and How to Get Money Personal Credit Collateral How to Present Your Proposition for Credit New Capital Financing Out of Income Privileged Subscriptions Premiums on Stock Policies with Respect to Profits, Dividends, and Surplus How to Handle Finances in a Pinch Employment of Idle Funds LaSalle Extension University 55 Financing a Business The success of your business is closely connected with your methods of financing. Lack of capital is charged with one-third of the defaults in business. By concentrating their attention on manufacturing, buying, or selling, and ignoring their finances, many business concerns have been compelled to liquidate, when perhaps actually solvent. Ability to develop new business enterprises, to take ad- vantage of opportunities, to expand business, to meet com- petition successfully, to save your business in times of finan- cial distress, is largely dependent upon how you use your resources. Skill in finance enabled Mr. Harriman to perfect the great Union Pacific Railroad system. Financing a Business explains the best methods for con- ducting your business on safe financial principles and for getting in touch with the sources of business credit. Every- thing depends upon the right solution of these problems. There are primarily four ways of securing capital: (1) by gift; (2) by saving — producing more than spending; (3) by borrowing — bank and mercantile credit; (4) by tak- ing in capital — partnership or corporation association. This section shows when to use each and exactly how to present a business proposition as a basis for securing funds under each plan. Even the builder of a small home will find specific instructions as to the best methods of se- curing the necessary capital. Financing a Business, furthermore, treats of such prac- tical questions as how to secure personal credit, how to use collateral, how to secure bank co- operation, how to judge of the pre- requisites of financial success in an enterprise, the* ratio of fixed to working I capital, margins of financial safety, /; the use of surplus, presenting an enter- j prise to the investors, when to use stocks and when to use bonds and in what proportion each, promoters, un- derwriters, brokers, and bond houses. 56 Business Administration Advertising E. H. KASTOR Of H. W. Kastor & Sons Advertising Company Mr. E. H. Kastor has for the past twenty- years been a member of the firm of H. W. Kastor & Sons Advertising Company, Chicago. This concern handles annually millions of dollars' worth of advertising of every nature. Mr. Kastor has had a remarkable training and business experience along advertising lines — all of which has helped him to become the much sought-after authority that he is among business men. He has been a traveling salesman, mer- chandising man, and cost clerk for a large concern. In these capacities he became intimately acquainted with goods — their purchasing, pricing, and selling qualities. Finally, as sales manager, he has learned from first-hand experience the real selling problems that underlie business success. As an advertising man Mr. Kastor has occupied at one time or another the positions of campaign man, copy man, idea man, plan man, and layout man. He has a technical knowledge of the mechanical end of adver- tising, printing, and allied branches. A BRIEF TOPICAL OUTLINE Relation of Advertising to Sales Advertising Policies "Reason Why" and "Human Interest" Copy Advertising Campaign Space Position Contrast Illustrations Ornament Type Stock Attention, Desire, and Conviction Circulars Catalogues The Folder Street-Car Advertising Billboards Novelties Booklets Layout Trade Magazines Containers Technical and Trade Publications The Follow-up Advertising in Newspapers and Magazines How to Test an Advertisement Pitfalls of Advertising The Psychology of Advertising Advertising Agents LaSalle Extension University 57 Advertising Advertising may be divided into two great divisions : 1. That which deals with the mechanics of ad- vertising ; 2. That which deals with problems and policies. A good business man must be able to pass discriminat- ingly upon both of these problems. Copy comes to him. Can he tell at a glance whether it is mechanically correct? Can he give specific directions to the printer concerning the lay-out, spacing, type styles and sizes, borders and general design? Students of the psychology of advertising have empha- sized the importance of design in its effect upon the human mind. It gives the first impression. Composition for effect- ive advertising is based upon certain fundamental prin- ciples of design. These principles have been developed to the point where a given expenditure upon an advertising campaign may be counted upon to bring given results. Every successful advertisement must do three things: 1. It must get the attention of the consumer. 2. It must secure and sustain the interest of the reader until the appeal or presentation has been made. 3. It must get results by provoking a favorable response. These attention-getting , interest-exciting, and action- getting qualities are presented so clearly, concretely, and specifically that they can be adapted by you to your busi- ness. The factors that enter into each of these qualities have actually been measured as to their strength and persuasiveness. Do you want to know what they are? Without a good knowledge of advertising, a business man falls a prey to incompetent, so-called ' ' adver- tising advisers"; with it he is master of the situation. 58 Business Administration Retail Merchandising PAUL, H. JiEYSTROM, Ph.D. Associate Professor of Economics University of Minnesota A certain prominent magazine has char- acterized Dr. Neystrom as the keenest student and greatest authority in America on retail merchandising problems. Mr. Neystrom has made merchandising his specialty. He has not only had years of experience as a country merchant, but has studied merchandising and every phase of store management in some of the leading retail establishments of the country. The ability of Mr. Neystrom is recognized everywhere. He is now Associate Professor of Economics at the University of Minnesota, in charge of the courses in Merchandising. Other state universities and commercial organizations are using his services for their short courses in Merchandising. He has been Sales Instructor in a number of large depart- ment stores. State and federal commissions have consulted Mr. Neystrom as an authority upon these problems. In this work on Retail Merchandising he presents the recognized principles of suc- cessful merchandising. A BRIEF TOPICAL OUTLINE The Problems of Store Management Employment of Sales People and Other Help Remuneration of Employes Training of Employes Retail Store Buying Merchandise Control Slow Turning and Fast Turning Lines Cost of Doing Business Profit by Lines Intelligent Pricing Mark-Downs Charge Sales Multiplying Gross Sales Quicker Collections Knowledge of Goods Selling Plans and Methods Use of Windows and Display Space to Best Advantage Advertising Management Delivery Service Credit Management The Essentials of a Good Accounting System Meeting Competition Chain Stores Mail Order LaSalle Extension University 59 Retail Merchandising The merchandising business, next to agriculture, repre- sents the largest number of business interests in this coun- try. Every state has thousands of store managers trying to solve successfully the problems of the retail store. Yet statistics of failure show that by far the largest percentages of all business mortalities are listed in this field. The life of the average store is short. Within recent years the large mail-order houses have made tremendous inroads on the business of retail stores. This competition must be met with intelligent methods by the retailers of this country, working individually and co- operatively. But the interest in this field is not limited to the mer- chants themselves. Consumers and producers, as buyers and sellers of goods, and bankers and credit men, as grant- ors of credit, are actually interested in knowing how to judge the efficiency of a retail store or the permanency of the system. It is one of the ever-present questions of mod- ern business. This section on Bet ail Merchandising is a remarkably clear and keen analysis of the retail situation, by America's foremost authority in this field. It presents first of all the problems as they actually exist and then shows how to solve them according to the best experience and on sound princi- ples. The employment, remuneration, and training of sales people, retail buying, merchandise control, advertising man- agement, store service, credit man- _____ __ agement, mechanical equipment, the essentials of good accounting, systems and methods of meeting competition are among the important subjects developed in this interesting section | of the service. It penetrates right to the heart of the situation and then shows how to solve the problems. 60 Business Administration Credits EDWARD M. SKINNER General Manager Wilson Brothers, Chicago Mr. Skinner began his business career as a messenger in the wholesale store of Field, Leiter & Company, in 1881. In 1892 he took charge of the credit department with Cluett, Koon & Company. In 1896 Mr. Skinner went with Wilson Brothers, wholesale dealers in men's furnish- ings, first as credit man and then as general manager, which position he holds at the present time. Mr. Skinner has been very active in pro- moting better business conditions in the city of Chicago. He was one of the organizers of the Chicago Association of Credit Men and later served as its President. He has been President of the Chicago Association of Com- merce. Mr. Skinner is not only an experienced credit man, but also a big, successful business man. What he writes is always practical and very helpful. So is his discussion in the section on Credits. A BRIEF TOPICAL OUTLINE Essential Factors in Determining Credit Risks Sources of Credit Information Analysis of Credit Reports Analysis of Financial Statements Organization and Operation of Credit Departments Credit Records and Files Division of Work Credit as a Source of Weakness in Many Industries Credit Associations Credit Co-operation Credit Insurance Banking Credit Mercantile Credit Capital Credit Installment Credit C. O. D. Shipments Principles of Law Affecting Credit Relations Relation to Sales Department Relation to Collection Department Reports LaSalle Extension University 61 Credits Statistics show that more than 90 per cent of the busi- ness in this country is transacted upon a credit basis. Credits, therefore, must be extended on sound business prin- ciples, or the whole business structure will collapse. Three great C's determine the true credit rating of a firm; they are Capital, Capacity, Character. They consti- tute a combination which is not in restraint of trade. This treatise shows how to judge these factors in every credit transaction. Then there are the four great divisions of credit — (1) capital, (2) banking, (3) personal, and (4) mercantile — with every angle of which a business man should be familiar. The problems associated with each of these are ably pre- sented. The section on sources of credit information is especially useful. In this connection there is a description of the serv- ices performed by the great mercantile agencies and cred- itors' associations. Credit protection is treated in all its relationships. Be- fore you place any credit insurance, read this section and see whether you can use it to advantage. The credit manager's duties, his relationship to his em- ployer, and his methods of work, are all explained for the benefit of the practical business man. Finally the law affecting credit relations is presented so simply and clearly that no man need run counter thereto. In view of the thorough and com- prehensive manner in ivhich the entire subject of Credits is treated, busi- ness men generally ivill be quick to appreciate the great practical value of this section. Marny business losses are easily preventable by avoiding bad debts and spotting bad accounts in the incubator stage. 62 Business Administration Collections R. S. WHITE Collection Manager American Steel & Wire Company Mr. White is the collection manager of the American Steel & Wire Company, a com- pany capitalized at $90,000,000. Mr. White began his career in the retail hardware business and while there began to study seriously collection problems. He soon became recognized as an authority and ad- vanced rapidly to the position which he now holds. In all of his busy life, Mr. White has found time to write numerous short articles for the hardware trade journals and collec- tion magazines on collection topics. He fre- quently delivers addresses before commercial organizations and in Y. M. C. A. courses in Collections. He delights to help others to a better knowledge of collection problems. The section on Installment Collections is by Mr. H. E. Kramer, an acknowledged spe- cialist upon that subject. A BRIEF TOPICAL OUTLINE The Debtor's Frame of Mind The Psychology of Collections Reasons for Incurring the Debt Good, Bad, and Poor Pay Collections Financial Caliber of Debtor Terms of the Debt Form of the Debt Rights of the Creditor Rights Modified by Custom or Expediency Environment Situation as to Source of Debtor's Income and Seasons Wholesale and Retail Accounts Collection by Interview, Mail, Draft, or Legal Process Discounts Extensions Limitations to Actions Co-operative Collections Liquidation of Involved or Bankrupt Enterprises Use of Collection Agencies Installment Accounts Records, System, Notices, and Follow-up LaSalle Extension University 63 Collections Experience has proved over and over again that slack collection methods cause business ruin. Merchants, jobbers, manufacturers, physicians, dentists — all have had the same experience — accounts tied up in musty ledgers. Competition has become so keen that it will no longer tolerate such flabby business methods. The collection de- partment must hold a prominent place in a business organ- ization rather than represent the weak spot. Accordingly we offer here a treatise on effective collecting that will stop the leaks in many business enterprises. In our plan of organization we recognize that a good col- lection system must consider in its procedure three funda- mentally different classes of collection accounts : (1) Good (2) Slow pay (3) Bad Each requires a different treatment and a different knowl- edge of facts. An exact procedure for each case is outlined. This work discusses in all of these relationships the routine work of the collection department, how to collect small accounts, professional accounts, and installment ac- counts. Collection correspondence in all of its bearings is explained. The use of the draft, collection agencies, dis- counts, justices of the peace, legal actions, and other collec- tion knacks are here demonstrated for the use of the collec- tion man. The seven legal defenses are outlined for ready reference. Special emphasis is laid throughout this section upon the question of how to collect with- out offending the customer. Mr. White presents some unusually good methods. The great subject of collections on installment accounts is here presented for the first time in a thoroughly com- petent manner. Many business con- cerns need the work for this indis- pensable feature. 64 Business Administration Governmental Control of Carriers I. N. SHARFMAN A.B., L.L..B., Professor of Political Economy University of Michigan Mr. I. N. Sharfman is the author of the section dealing with transportation and traffic problems. He received his A. B. and LL. B. degrees from Harvard University, and is a member of the Massachusetts Bar. From 1908 to 1910 he was Assistant in Economics at Harvard University, and from 1910 to 1912 Professor of Law and Political Science, Imperial Pei Yang University, Tientsin, China. In 1912 Mr. Sharfman became Chief Investigator for the Department on Regula- tion of Interstate and Municipal Utilities, The National Civic Federation. As lecturer in Political Economy, Mr. Sharfman became connected with the Uni- versity of Michigan in 1912. He is at present Lecturer on the Law of Contracts, Depart- ment of Law, University of Michigan, and Professor of Political Economy at the same university. A BRIEF TOPICAL OUTLINE Significance of Railroad Transportation Problem of Rate-Making Railroad Competition Nature of Railroad Competition Theory of Rate-Making Classification of Freight Discrimination in Rates and Service Reducing Freight Charges Packing Freight Describing and Classifying Freight Weights and Their Relation to Freight Charges The Industrial Traffic Department Delivery Facilities Organization of Shipping Department Routing Freight Public Regulation of Transportation Monopolistic Character of the Railroad Business The Interstate Commerce Commission LaSalle Extension University 65 Governmental Control of Carriers Transportation is the life-blood of business. It is inter- woven into all processes of industry and commerce. It vitally affects business economy — profits and losses. A manufacturer recently lost $3,000 by depending upon the rate clerk of a railroad for a rate on iron pipe from Chicago to a point in the southwest. Every business that does not maintain an expert traffic manager could doubtless save large sums of money by a proper understanding of class, commodity, and through rates, and by properly routing shipments. Transportation is the largest single item of expense in the world. It costs over two billion dollars annually — over $25 for every man, woman, and child in the United States — five times the surplus and capital of all national banks. Men in all lines soon learn to what extent the prosperity of their enterprises depends upon transportation condi- tions. Moreover, many come into relations with railroads as stockholders, bondholders, or general creditors. A knowledge of transportation problems is useful, there- fore, both for the purpose of effecting economies in freight charges and for effectively directing the work of a traffic department. Governmental Control of Carriers presents such prob- lems as the significance of railway transportation; prob- lems of rate-making; classification of freight; discrimina- tion in rates and services ; the problems of regulation, both state and national; and many other problems that an in- telligent business man and citizen should know about the transportation business and its relationship to the public. The LaSalle Extension University through its staff of experts saves busi- ness men hundreds of thousands of dollars. The opinions of these experts are available to all subscribers for this Business Administration service. 66 Business Administration Ocean Traffic and Trade B. OLNEY HOUGH Editor, American Exporter Mr. Benjamin Olney Hough was educated at the University of Rochester, New York. Early in his life he was engaged in news- paper work and then for six years in manu- facturing. In 1895 Mr. Hough turned his attention to the export and shipping trade, for eleven years traveling widely in Latin-America, Europe, the Orient, and Australia. In 1906 he became Editor of the American Exporter, which position he still retains. As a former manufacturer and as an experienced exporter, both from the stand- point of the manufacturer and the commis- sion merchant, Mr. Hough is unusually well qualified as an adviser on foreign commer- cial relations. His charming style is concise and graphic. A BRIEF TOPICAL OUTLINE Foreign Commerce of the United States Liners and Tramps Ship-Registry Ship Papers Entry and Clearance Terminal Charges Loading and Discharging Ocean Routes and Distances Transshipment Panama Canal Bulk and Package Cargoes Weight and Measurement Consular Invoices Shipments from Interior In Bond Drawback on Re-exported Foreign Goods Entry at Custom House Bonded Warehouses Minimum Bills of Lading Classification of Commodities Forwarding Agents and Express Companies Marine Insurance and Claims Foreign Salesmen Local Resident Agents Export Commission Houses Manufacturers' Export Agents Foreign Credits and Collections America's Opportunities in the Markets of the World JLaSalle Extension University 07 Ocean Traffic and Trade The great European War has demonstrated most forci- bly to American business men the significance of foreign trade to our own prosperity. It has also shown how abso- lutely unprepared American bankers, manufacturers, and merchants were to take advantage of the new trade oppor- tunities created by that war in certain quarters of the globe. It has proved conclusively that no progressive business man can afford to remain ignorant of these questions. Kecently a California manufacturer had an opportunity to submit a bid on a Peruvian order. He overlooked only one point, but that error meant the loss of several thousand dollars. Exporting requires exact knowledge. The section on Ocean Traffic and Trade is the most com- prehensive and practical work issued upon the subject; it is, in fact, the only work covering the field which it dis- cusses. It treats such important subjects as ocean carriers, shipping terms and documents, handling export and import shipments, marine insurance, shipping pools and agree- ments, getting export trade, developing export trade, for- eign credits and collections, and foreign trade opportunities. In this section the large exporter and importer will find a sound economic discussion and practical solution of the questions in which he is most vitally interested. The inland exporter will obtain information on how to pack and ship his goods for export trade, how to secure selling agents, how to get his money on the shipments, and much other information necessary to the intelligent conduct of export and import busi- ness. Incorporated with this section are many important shipping papers and documents, which have been repro- duced for the benefit of the shipper and traffic manager, together with the finest and most accurate map of the trade routes of the world. This map was especially prepared for us by the leading map-makers of the country. 68 Business Administration The Principles of Accounting "The rising man must do something exceptional and beyond the range of his special de- partment." Andrew Carnegie Mr. Henry Parker Willis holds the B. A. and Ph. D. degrees from the University of Chicago and has studied at the universities of Berlin, Leipzig, and Vienna. He has been Adjunct Professor of Economics and Political Science and Wilson Professor of Economics and Political Science at Washington and Lee University; Professor of Finance and Dean of the College of Politi- cal Science at George Washington University; and Lecturer at Columbia University. Mr. Willis was Associate Editor of the Journal of Accountancy; Managing Editor of the New York Journal of Commerce; Author of the History of Latin Monetary Commis- sions; Reciprocity (with J. L. Laughlin) ; Life of Stephen Douglas; and several other works. He has also been a frequent contributor to economic journals. In this book on The Principles of Ac- counting he shows very clearly the practical relationship of modern accounting to business conduct. A BRIEF TOPICAL OUTLINE Accounting and Modern Business Efficiency Single and Double Entry Bookkeeping Problems of Debit and Credit Books of Original Entry Subsidiary Books Partnership Accounts Corporation Accounts Trial Balance Bills Payable and Bills Receivable Accounts Payable and Accounts Receivable Depreciation and Other Reserves Good-Will Accruals Contingent Liabilities Collection Accounts Columnar Books Correlation with Cost Accounts Balance Sheet Income and Expenditure Accounts Profit and Loss Statement Executive Reports LaSalle Extension University 69 The Principles of Accounting This is a fundamental treatise on Accounting, which emphasizes : 1. The purposes which the science and practice of ac- counting seek to accomplish ; 2. The methods and means by which these objects are attained. This information is necessary for an intelligent concep- tion of a business to the various parties directly interested, namely : (1) owners (2) managers (3) creditors (4) the state The manager who wishes to profit fully by the work of his accountants and appreciate the facts behind the figures, needs an extensive knowledge of accounting. Such informa- tion prepares him to become an intelligent critic of the con- ditions of his business and enables him to direct efficiently the work of his bookkeepers. A knowledge of scientific accounting, furthermore, en- ables the executive to utilize the records of his business to aid efficiency. They become milestones of progress rather than tombstones of disasters. Unless the business man understands his accounts, how they are constructed, and what they disclose, he is unable to control his business properly. He is at the mercy of dishonest employes and associates, and unable to adjust properly his expenses to his receipts or his resources to his liabilities. When production is efficient or sales are adequate and profits are falling off, there is a reason. 70 Business Administration Office Organization and Management C. C. PARSONS Manager, Shaw- Walker Company, New York During- the years 1904-1905, Mr. Parsons was connected with the Department of Commerce, University of Michigan, as special lecturer on the subject of Business Adminis- tration. The following year he was a special lecturer on the same subject at the Indian- apolis Y. M. C. A. Commerce School. He lectured on the "Cost of Production" before the National Cloak and Suit Manufacturers' Association. As a writer Mr. Parsons is known as the author of Business Administration, and has been a contributor of numerous articles to magazines on the subject of Business and Office Organization. For twelve years Mr. Parsons has been a branch manager of the Shaw-Walker Com- pany, Filing Devices and Systems, Chicago and New York. He is now manager of the New York branch. By every test — education, lecture and teaching experience, writing, business position, and experience, Mr. Parsons is pre-eminently qualified as an authority and specialist to prepare this section on Office Organization and Management. A BRIEF TOPICAL OUTLINE Arrangement, Convenience, and Comfort of Office Lighting Heating Ventilating Intercommunication Handling Mail Office Employes— Hiring, Training, Rules and Regulations, Tardiness and Irregularity, Promotions, Incentives, Bonuses, Vacations Departmental Meetings Welfare Work Machinery and Equipment of the Office— Desks, Chairs, Filing Systems, Telephones, Typewriters, Billing Machines, Dictaphones, Duplicating Machines, Addressing Machines, Folding Machines, Stamp Machines Records and Systems for Sales, Purchasing, Accounting, and Other Departments Relations with the Public The Office Manager LaSalle Extension University 71 Office Organization and Management What business or office manager has not been troubled by such problems as the following! Office Employes — their selection, training, handling, dis- cipline, promotion, bonding, welfare work, rules, and regu- lations. Filing System — securing ease of finding, accuracy in filing, economy of time, choice of equipment, and selection of one of the five methods of classification and indexing that best suits his own needs. Stenographic Efficiency — the management, equipment, environment, measurement of output, and standardization of this work. Pay -Roll Work — the preparation of pay-roll checks and their distribution at least expense consistent with proper checks and safety. Statement Work — how to get statements out promptly, accurately, and at a minimum cost. Mailing Lists — their collection, classification, indexing, accuracy in names and addresses, and adaptability in use to his own business. These and the problems of office arrangement, equip- ment, appliances, utilization of space, interdepartmental relations, handling of mail, messenger service, system for the credit, collection, purchasing, and other departments, and records and reports are all indispensable to office efficiency. In Office Organization and Management we take the stand that the office is not of interest to the management simply because it represents a necessary overhead burden, but that the office is a vital production center. A modern office is a great factory itself with a ..■--* rr ~ ^" >: ^ v lot of machinery that is almost human /-' 4^!%^\ in its accomplishments. Its products - " ■ |/?|ek enter into purchasing, manufacturing, selling, collecting, management, and every other phase of business. The proper organization and man- agement of this vital business center will enable a concern to do more busi- ness at less unit cost. 72 Business Administration Only Successful Men Know How To Win Success The value of information and advice is based upon its source. The best corporation lawyer in the world couldn't give you as sound medical advice as just an average doctor. And as primarily the Business Administration Course and Service deals in business success, its sources are successful busi- ness men. Each branch of this great work has been prepared by a man who is recognized as a master of his subject. He in turn has compiled from both his own experience and that of other successful business men and has reduced to concrete, un- derstandable form all the available fundamental principles and rules for success pertaining to that particular subject. Each individual subject has a beginning, a middle, and an end; each individual subject is a boiled-down course in vital principles. When we were both at the advice-taking age, folks used to point out certain successful men whom we were to admire and emulate, and then they'd say, "Work." Now these very men — leaders of the field — are showing us how to work intelligently — with least lost motion and most progress. The Business Administration Course and Service covers all the things a man must know to be successful in business. It is authoritative because it comes from successful men. The achievements and the works of the men who have labored to pro- duce this service follow herewith. They institute a remarkable staff of business experts and authorities which you may add to the advancement of your own work and business through the Business Administration Course and Service. La Salle ExfaA^ion University Clearing House Ike Business World Into the doors of this Institution from the factories — the banks — the lawyers — the accountants— the psychologists — the railroads — the retail stores — from all branches and channels of business have come the fundamental principles underlying commerce which have been gathered and compiled into the Business Administration Course and Service. And from the LaSalle Extension University goes forth the Business Adminis- tration Course and Service, supplying to men in varying positions of life located in every town, hamlet, city, and village in America, the practical business knowledge and training so vitally essential for increasing their efficiency and earning power. Truly, this is the Information Clearing House for the business world. 74 Business Administration General Administrative Organization Officers Jesse G. Chapline, President Haeky E. Farquharson, Vice-President Samuel MacClintock', Secretary Kichaed E. Moss, Treasurer Board of Directors Jesse G. Chapline Samuel MacClintock Geoege A. Spicee Glen C. Bull Etchaed E. Moss Moeeis L. Geeeley Harry E. Faequhaeson Arnold B. Hall Heney Robertson Advisory Board William Elmoee Foster, LL.B., Foster, Paine, Reynolds & Sass., Chicago. Waltee D. Moody, Former General Manager, Chicago Asso- ciation of Commerce; Director, Chicago Plans Commission. Rogee A. Pryor, LL.D., Former Justice, Supreme Court of New York. Joel Hunter, Certified Public Accountant, Atlanta, Ga. Chaeles M. Harvey, Former Editor, St. Louis Globe-Demo- crat. George E. MacLean, Ph.D., LL.D., Former President, State University of Iowa. J. E. Bangs, Trust Officer, Colonial Trust & Savings Bank, Chicago. William M. 0. Dawson, Former Governor of West Virginia. A. M. Harvey, M.D., Crane Company, Chicago. William Aethue Chase, LL.B., C.P.A., Former President, National Association C.P.A. Examiners; Former Secretary, Illinois State Board of Examiners. Department Managers Glen C. Bull A. H. Thoepe H. E. Keamee H. A. Bontz J. A. Edwards H. A. Doharr W. B. Martin T. R. Gowenlock M. E. Power F. W. Dignan C. H. Leopold Samuel MacClintock Educational Director William Arthur Chase C.P.A., LL.B. J. G. Chaplini President M. E. Power Sales Consulting Expert F. W. Dignan, Ph.D. Editorial Department T. R. Gowenlock, LL.B. Advertising Consulting Expert ■lUSk Harry E. Farquharson Vice-President Wm. Bethke, M.A. Business Organization Expert Richard E. Moss Treasurer 76 Business Administration General Educational Organization Samuel MacClintock, Ph.D., Director. J. R. Vance, Secretary. Instruction Departments William Arthur Chase, LL.B., C.P.A. E. C. Samsel, A.B., J.D. William Bethke, A.M. Asa Colton. Edgar P. Hermann, A.B. R. E. Riley. John M. Work, A.B., LL.B. W. S. Rea, A.B., J.D. Walter M. Parker, A.B., J.D. Charles V. Clark, Ph.B., J.D. Henry P. Keen. H. T. Scovill, A.B. W. E. Russell. Ernest W. Clark, LL.B. Julian Clay Risk, A.B., J.D. L. E. O'Brien, Ph.B. Aurelio M. Espinosa, Ph.D. G. T. Crossland, A.B., J.D. Editorial Department Edgar P. Hermann, A.B. C. E. Brant. H. L. Meland. Harriet Jones, Ph.B. Frank W. Dignan, Ph.D. Consulting Specialists William Arthur Chase, Consulting Accountant and Au- ditor, Chicago. John P. Curran, Central Freight Association, Chicago. Charles M. Cartwright, Editor, The Western Underwriter. Arthur L. Rice, Managing Editor, The Practical Engineer. W. H. Chandler, Mgr., Trans. Dept., Chamber of Com- merce, Boston. J. C. Lincoln, Traf. Mgr., Merchants' Assn. of New York. C. L. Lingo, Traf. Mgr., Inland Steel Company. Edward C. Rentz, Traffic Manager, Globe-Wernicke Co., Cincinnati. H. W. Kastor & Sons, Advertising Experts, Chicago. Donald F. Campbell, Consulting Life Insurance Actuary. W. E. MacEwen, Traffic Manager, Peerless Transit Line, Cleveland. Rollo L. Lyman, The University of Chicago. H. G. Wilson, Traf. Commissioner, Toledo Commerce Club. LaSalle Extension University 77 The Active Conducting Staff The men of this staff have been chosen for conducting the Business Administration service primarily because of their exceptional business abilities and educational qualifi- cations. Each one is a specialist in his particular branch of the service. Being practical men of affairs themselves, it is only natural that the excellent Business Administration service, as organized and conducted by them, should be handled along broad and practical lines in accordance with the prac- tical needs of modern business. And so it is. Every subscriber to the Business Administration service, in his relation to the LaSalle Extension University, feels that he is one of a group of hard-headed practical business men associated together for the purpose of discussing and solving actual business problems. Being one of the group, he shares in all the knowledge and experience of the experts who have prepared and are conducting this service ; likewise he is invited to join freely in the discussion, relate his indi- vidual experiences, and express his opinions. And in return he receives the benefit of the accumulated business knowledge of the best business brains of the coun try presented in a clear, understandable manner by the active members of the group — the above-named service-con- ducting staff. If you have read carefully the outline of this service as presented in the preceding pages, you will at once realize that it combines most admirably the two elements of busi- ness training and business service. Everything is authori- tative and practical and of proved value. All the men who have co-operated in preparing this service, the lectures, the bulletins, and all other matter related thereto, know how to do the things which they describe, because they have al- ready done them or are now doing them. And the same is equally true of the staff of able busi- ness specialists who personally conduct the service for the benefit of its subscribers. 78 Business Administration Who Pays For Efficiency? Let there be no mistake about this. Inefficiency pays the price of efficiency — always. You see a man climb to the topmost rung of the business ladder. You know that he has gained and that he holds his position because of his comprehensive grasp of the entire business of which he is head — in a word, because of his executive ability. But how can a firm, organization, or corporation afford to pay any one man a salary of, say, $50,000, $75,000, or $100,000 a year? Where does the money come from with which to pay his big salary ? From his own business? Yes, but only in the sense that it comes through that business. It comes from competitive business concerns headed by less efficient executive man- agers. The more efficient a man is, the larger volume of business he is able to control; and every bit of that added volume is taken away from his competitors. This is an inexorable law of the business world. Don't forget it. Don't think that anything can change it. Hence it is that every inefficient man is, to some extent, con- tributing to the greater prosperity of the more efficient. This is equally true whether in the case of competitive business firms, or in the case of subordinates in any business concern. Inefficiency must pay the price, while efficiency reaps the rewards. It does not, therefore, require much in the way of argument to show that the man who has an opportunity to subscribe for the Business Administration Course and Service and fails to do so, really pays for it anyway. He pays by sacrificing opportunities for his own advancement. He pays for it — although he may not realize it at the time and although the actual money does not come directly out of his own pocket — by contributing his mite to the higher salaries of the more efficient men above him. The man who works with pick and shovel in the ditch helps pay the salary of the man who stands around and bosses the job, just as the labor boss, in turn, helps pay the still larger salary of the contractor who does nothing in the way of manual work He pays for it — yes — but does not receive its benefits. The Business Administration Course and Service you now have the opportunity to obtain offers the shortest cut to business ef- ficiency and the surest means to acquire it that has ever been devised. Don't make the big mistake of paying for it for some one else. LaSalle Extension University 79 Which? Which will you be now? You have seen how the Business Administration Course and Service makes men more efficient, more able to do things, to plan, and to execute; how it increases confidence, initiative, and self- reliance. You have observed how admirably it meets and satisfies every important business need; how it is organized to solve business problems; who have prepared the work in its various sections; and what specialists are conducting it for your benefit. You have noticed what the aim of the service is — training executives. In other words it prepares you to become more of a leader in the affairs of the world. And you will reap the rewards. You will be able to acquire more of the desirable things of life. The facts are before you. You must judge. Opportunity has played a continuous tattoo at your door. It is still knocking. Lest you should slight the call, ask us right now as to how you may secure the benefits of this service. La Salle Extension University W/ie World's Greatest O x tension. University - Chicago 80 Business Administration Our Responsibility The LaSalle Business Administration Course and Service is a big undertaking. You have a right to know whether this institution has the capital, ability, and experience to conduct it successfully. The capital and resources of the University are over a million and a half dollars. The people who are back of this course and service testify to our abil- ity. The University was incorporated in its present form in 1909. Since then it has constantly grown and expanded its functions until now it is the largest exclusively extension university in the world. The course and service is supported by years of successful experience. We take pleasure in referring to the Dun or Brad- street commercial rating books and to the following Chicago banks and trust companies : The Central Trust Company of Illinois, the Englewood State Bank, the Fort Dearborn National Bank. The LaSalle Extension University is a member of the Chicago Association of Commerce. 'The man who doesn't read good books has no ad- vantage over the man who can't read them." !il .:;,!!■■ !;!:::i!:! Hf] ;| UNIVERSITY OF ILLINOIS-URBANA 3 0112 110843551 ADMINISTRATION BUILDING 2550 Michigan Avenue CHICAGO