,libraries7       ,barbara ,weinstock   
,lectures on ,the ,morals of ,trade     
,,higher ,,education ,,and ,,business   
,,standards4 ,by ,,willard ,,eugene     
,,hotchkiss4  ,,creating ,,capital3     
,,money-,,making ,,as ,,an ,,aim ,,in   
,,business4 ,by ,,frederick ,l4         
,,lipman4  ,,is ,,civilization ,a       
,,disease8 ,by ,,stanton ,,coit4        
,,social ,,justice ,,without            
,,socialism4 ,by ,,john ,,bates ,,clark4
  ,,the ,,conflict ,,between ,,private  
,,monopoly ,,and ,,good ,,citizenship4  
,by ,,john ,,graham ,,brooks4           
,,commercialism ,,and ,,journalism4 ,by 
,,hamilton ,,holt4  ,,the ,,business    
,,career ,,in ,,its ,,public            
,,relations4 ,by ,,albert ,,shaw4       
,,creating ,,capital  ,,money-,,making  
,,as ,,an ,,aim ,,in ,,business    ,by  
,,frederick ,l4 ,,lipman    ,,boston    
,,and ,,new ,,york ,,houghton ,,mifflin 
,,company ,the ,riverside ,press        
,cambridge #aiah  ,,copyright1 #aiah1   
,,by ,,the ,,regents ,,of ,,the         

,,university ,,of ,,california  ,,all   
,,rights ,,reserved  ,published ,march  
#aiah   ,the ,riverside ,press          
,,cambridge  ,,massachusetts ,u  ,s  ,a 
,,barbara ,,weinstock ,,lectures ,,on   
,,the ,,morals ,,of ,,trade   ,this     
series will contain essays by           
representative scholars and men of      
affairs dealing with the various phases 
of the moral law in its bearing on      
business life under the new economic    
order1 first delivered at the           
,university of ,california on the       
,weinstock foundation4     ,,creating   
,,capital  ,,money-,,making ,,as ,,an   
,,aim ,,in ,,business   ,the object of  
this paper is to discuss money-making2  
to examine its prevalence as an aim     
among people generally and the moral    
standards which obtain among those who  
consciously seek to make money4  ,the   
desire to make money is common to most  
men4 ,stronger or weaker1 in some degree
 it is present in the mind of nearly    
every one4 ,now1 how far does this      

desire grow to be an aim or object in   
our lives1 and to what extent is such an
 aim a worthy one8  ,the typical        
money-maker as commonly pictured in our 
imagination is a narrow1 grasping1      
selfish individual who has chosen to    
follow lower rather than higher ideals  
and who often is tempted1 and always may
 be tempted1 to employ illegitimate     
means for the attainment of his ends4   
,the aims he has adopted are made to    
stand in opposition to the practice of  
certain virtues4 ,thus we contrast      
profits and patriotism2 enriching one's 
self and philanthropy2 getting all the  
law allows and justice2 taking advantage
 of the other fellow and honesty2       
becoming engrossed in acquisition and   
love of family4 ,now1 such contrasts    
obviously prove nothing more than that  
money-making is and would be a vicious  
aim if pursued regardless of these      
virtues1 and it could well be replied   
that consideration of patriotism1       
philanthropy1 love of family1 etc41 must

 in themselves impel one to earn and to 
save4 ,the love of money is the root of 
all evil implies an exclusive devotion  
to acquisition that may well be         
criticized4 ,but aside from this there  
is no doubt that amid the confused ideas
 held on the subject1 aiming to make    
money is commonly regarded as in some   
sort of antagonism to the social        
virtues4  ,that there are other sides to
 the picture is recognized1 however1    
even by the loose thought of the day4   
,the man who earns his living1 for      
instance1 it views as one who in so far 
is performing a fundamental duty4       
,indeed1 the world scorns him who cannot
 or will not support himself and his    
family4 ,but this is only to say that   
one must work to-day to meet the        
expenditures of to-day4 ,is this the    
limit8 ,is it a virtue for him to work  
in order to spend1 but a vice for him to
 work in order to save8 ,what are the   
considerations to be observed by a man  
in deciding whether or not he should    

adopt money-making--that is1 the        
acquisition of a surplus beyond his     
current needs--as one of his definite   
aims in life8  ,one consideration       
relates to our country4 ,the ,united    
,states is now understood to be spending
 about #be1jjj1jjj per day in carrying  
on the war4 ,in the last analysis this  
amount must be paid out of the past     
savings and the savings from current    
earnings of the people of the ,united   
,states4 ,the wealth of the nation      
consists mainly of the sum of the wealth
 of its citizens4 ,we are therefore told
 to seek increased earnings and to      
economize in our expenditures in order  
to enhance the national wealth4 ,the    
duty here is perfectly clear1 but even  
if we did not have war conditions to    
teach us as a patriotic responsibility  
the necessity of earning and saving a   
surplus1 the obligation would still be  
there4 ,we owe a similar debt to our    
state and to our city or district4 ,and 
nearer still comes the duty to one's    

family and to one's own future1 the duty
 of providing for the rainy day1 for old
 age4 ,and it will be observed that     
money-making in this sense is directed  
to the acquisition of net income1 it    
relates to that portion of one's        
earnings which is saved from current    
expenditure and becomes capital4 ,then  
we must also consider the duty to       
society4 ,as we look out upon the       
surrounding evidences of                
civilization--buildings and railroads   
and highly cultivated fields1 the       
machinery of production and             
distribution1 the shops full of useful  
commodities--and then cast our thought  
backward to a time not very many years  
ago when all this country was a natural 
wilderness1 we may begin to realize the 
magnitude of the wealth1 the capital1   
that has come into being since then1    
every particle of which is due to the   
earnings and savings of somebody1 to the
 surplus not consumed by the workers of 
the past1 their unexpended and unwasted 

net balances year by year4              
,universities1 churches1 libraries1     
parks1 are included in the wealth thus  
handed down to us4 ,our lives to-day may
 be richer and broader through this     
inheritance created by the industry and 
abstinence of our forefathers4 ,their   
business careers1 now closed1 we regard 
as the more successful in that they     
earned and saved a surplus1 that they   
had a net income to show as the result  
of their work4  ,but these savings of   
the past were accumulated1 after all1 by
 comparatively few of the workers2 not  
by the many1 who lived from hand to     
mouth1 happy-go-lucky1 spending and     
enjoying in time of abundance1 suffering
 in time of poverty and stress1 making  
no provision even for their own future1 
still less recognizing any duty to their
 country or to posterity to produce     
economically and regulate their         
expenditure wisely so as to carry       
forward a surplus4 ,as far as this      
majority is concerned we might yet be   

living among rocks and trees1 without   
shelter1 lacking sure supplies of food1 
with fig leaves to cover our nakedness4 
,and to-day the same conditions obtain4 
,how many persons are to be found among 
one's acquaintance who feel and act upon
 any responsibility for doing their bit 
in the creation of capital8 ,very few4  
,rather than exert himself to work with 
this in view1 on the one hand1 and to   
abstain from unnecessary consumption1 on
 the other hand1 the ordinary man will  
make to himself every excuse4 ,he will  
contemn money-making as a sordid aim1   
readily exaggerating itself into a vice2
 he will dwell upon the obligations and 
other considerations of a higher life1  
this being defined as something generous
 and noble1 a something compared with   
which money-making cannot be regarded as
 a worthy object but must be included in
 the class of unpleasant necessities1   
not to say indecencies1 which ought to  
be relegated to the background of life2 
he will summon up pictures of extreme   

poverty1 where any money received must  
be expended forthwith to meet urgent    
needs1 as justifying that which in his  
case is the gratification of shiftless  
indulgence4 ,above all1 this typical    
individual will not accept and act upon 
the idea that his affairs1 his small    
income and expenditure1 have any bearing
 upon the prosperity and progress of his
 country4 ,the most he will keep before 
him is that he should pay his bills1 and
 perhaps in some few cases1 will extend 
the notion to the future to include     
provision for the bills and possible    
emergencies then to be met by himself   
and his family4 ,nor is this improvident
 attitude confined to the young1 to the 
professional and the other non-business 
classes4 ,in the business world we see  
it all around us2 among those who work  
for a living1 among clerks and employees
 and among the so-called laboring       
classes it appears to be the normal     
attitude4 ,people who work for salaries 
or wages seem characteristically to use 

up all their earnings in their current  
expenditure1 to live up to their incomes
 without any serious attempt to save4   
,if they pride themselves upon trying to
 keep out of debt1 it is as much as they
 expect of themselves1 and among them   
the man who attempts to go beyond this  
in his money affairs is certainly the   
exception4  ,one of the effects of a    
world-wide war is an enormously         
increased demand for labor at high and  
advancing wages1 a condition that we    
might suppose would be greatly to the   
advantage of the laborer4 ,but that will
 depend upon his own attitude and       
policy4 ,from ,england1 and from        
,american towns here and there1 we hear 
stories of the wage-earner on whom      
increasing income has had the effect of 
lessening the effort to work2 who stops 
during the week when the higher wage    
scale has paid him the amount he is     
accustomed to regard as a week's        
earnings4 ,now1 would it not seem       
natural to expect that any man          

encountering improved market conditions 
for his output1 whether of commodity or 
service1 would seek to turn the         
situation to advantage by increasing    
that output as largely as lay in his    
power8 ,if1 for instance1 ,i can        
manufacture shoes to sell for #d4jj a   
pair and a change in market conditions  
is such that ,i can obtain #e4jj a pair1
 ,i would endeavor to produce more shoes
 in order to profit by the favorable    
market2 and if thereafter the price     
should rise to #f4jj and #g4jj and #h4jj
 a pair1 at each increment my efforts   
would be still further intensified4     
,that1 indeed1 is the normal economic   
attitude4 ,fluctuations in the price    
level due to changes in the demand for a
 commodity are expected to affect1 and  
do affect1 the market supply4 ,at a     
higher price1 production is stimulated  
and more units of the commodity are     
brought to the market1 both from new    
sources and from old sources4 ,under    
falling prices1 on the other hand1 the  

supply offered in the market would      
become automatically diminished4  ,this 
is an elementary commonplace in         
economics1 yet the laborer to whom we   
have just referred does not seem to     
recognize it4 ,he may find that he can  
earn in1 say four days1 an amount equal 
to his former earnings in six days and1 
therefore1 at the end of the fourth day 
he quits work for the week4 ,now1       
obviously under such increasing wage    
scale1 he might do one of three things3 
,he could quit at the end of the fourth 
day1 having received a week's income4   
,he could continue working for the six  
days and use his surplus earnings for   
comforts1 pleasures1 and luxuries which 
previously he had been unable to afford4
  ,he might work for the six days and   
save as much as possible of his excess  
earnings4  ,now1 what is the wise choice
 for the laborer8 ,leaving out of       
account special cases where he has a    
large family1 or sickness at home1 or is
 under some other disability which in   

his individual case would reduce his    
earning power or increase his minimum   
expenses1 ought he not to work for the  
six days1 putting aside all he could of 
the excess as savings for the future8   
,it will be generally conceded that this
 is self-evident4 ,if1 viewing the      
narrow conditions under which the       
workman ordinarily lives1 it should be  
claimed that during a period of unusual 
earnings self-gratification would be not
 only natural but measurably            
justifiable1 the reply could be made    
that this is merely specious1 involving 
assumption not in accord with the facts4
 ,excuses of this kind we often make for
 ourselves in the endeavor to justify   
our indulgence in present pleasure      
rather than perform the irksome duty of 
self-restraint4 ,the laborer whose      
ideals are such that he quits at the end
 of the fourth day is not the type of   
man who is going to spend the two       
holidays in pursuing higher aims in     
life2 he is going to pass them in       

inaction1 quite likely at the grog-shop4
 ,the man who fails to take advantage of
 the security for the future offered him
 and his family through the opportunity 
of saving from extraordinary earnings is
 one who is adding to the abnormal      
demand for such things as phonographs1  
jewelry1 spirits1 and tobacco4 ,and this
 helps to explain the tremendous market 
for luxuries during wartime4 ,doubtless 
there are many workmen who follow a more
 rational course1 who are reaping and   
storing the harvest for the comfort and 
security of themselves and their        
families during the winter of life4     
,could any one think that this policy   
involved an aim that was sordid1 tending
 to draw them down1 and away from higher
 considerations of life8 ,certainly a   
course of careful planning in one's     
affairs would be in so far a better     
course and on a higher plane than       
indulgence in idleness or shiftless     
expenditure of surplus for present      
luxuries1 regardless of future need4    

,this case of the workmen under         
conditions of abnormal wages seems      
exceptional2 yet the choice so presented
 to him is not very different           
fundamentally from the choice normally  
presented to all the rest of us4  ,the  
young man starting out in life may be as
 negligent of his opportunities as the  
workman who quits at the end of the     
fourth day4 ,or if he devotes himself   
properly to his vocation he may consume 
his earnings in current                 
self-gratification4 ,if1 however1 he    
will both concentrate on his work and   
practice self-restraint with the purpose
 of creating a saved surplus1 all will  
agree in considering him as so far      
headed on the road towards success4 ,in 
the case of the beginner this seems     
clear enough1 but1 after all1 the same  
considerations apply to everybody else1 
whether in business or profession1      
beginners or experienced1 young or old2 
to all of us is the same choice         
presented daily1 and at our peril we    

must make it wisely4 ,the physician1 for
 instance1 although he cannot afford to 
pay more attention to money-making than 
to the welfare of his patients1 to his  
studies1 to his professional ideals1    
must not1 on the other hand1 leave out  
of account these business duties and    
considerations which belong to him as an
 economic member of society4 ,he must   
produce and must consume with his       
family1 reasonably1 decently and        
thriftily4 ,he must aim at a surplus to 
store away for the future4 ,these aims  
are1 as a matter of course1 secondary to
 his professional ideals1 but there need
 be no conflict of duty4 ,the point is  
that there exists a department of his   
activity devoted1 and to be devoted1 by 
him to his business affairs4 ,in any    
event1 as a man1 a husband1 a father1 a 
citizen1 he cannot escape from the      
responsibility of these business        
affairs4 ,they must be conducted in some
 way4 ,shall it be well or ill8 ,if he  
fails herein it may involve failure in  

any or all these relations--as a man1   
husband1 father1 citizen4 ,and obviously
 these same considerations apply to all 
other men and women1 whatever may be    
their professions1 occupations1 or major
 interests in life4 ,why do so many     
allow themselves to be dragged along1   
living from hand-to-mouth1 in fear of   
the knock of the bill collector at the  
door8 ,why do we associate money        
questions with that which is unhappy1   
unfortunate1 down-at-the-heel1 with fear
 and misery8 ,barring mere accidents1 it
 is because we are careless1 shiftless2 
because we do not face the problem      
manfully1 practice reasonable           
self-restraint1 consider the subject in 
its complexity and decide upon1 and     
carry out1 a constructive programme4    
,even if one happens to possess wealth1 
he is not exempt4 ,indeed1 large wealth 
involves still greater necessity for    
care in the conduct of one's pecuniary  
affairs4 ,the rich man is said to have  
perplexities and responsibilities which 

are unknown to those in moderate        
circumstances4 ,in fine1 everyone must  
face these money questions or be driven 
by them4  ,those who live on fixed      
incomes1 whether from salary or         
investment1 may find it impossible to   
make any direct attempt to make money2  
for them the problem is to be confronted
 and mastered on its other side1 the    
side of spending and saving1 that the   
income may be apportioned as wisely as  
possible for the purposes of living4    
,but during the last few years a new    
factor has entered into the money       
problems of the individual1 often adding
 to his trials1 often adding to his     
self-made excuses1 and especially       
burdensome to the man on fixed income4  
,we refer to the high cost of living4   
,here it is1 however1 that the wage     
earner can do something in              
self-protection1 for the level of prices
 may be in some measure affected by his 
policy in handling his earnings4  ,a    
period of high wages is accompanied by  

and is in some sense an incident of a   
high level of prices4 ,now we recognize 
high wages1 considered in itself1 as    
beneficial to the community1 for it     
gives opportunity1 at least1 for        
comforts in life and a provision for the
 future that otherwise would be lacking4
 ,but if prices have advanced as much as
 wages1 the apparent improvement to the 
laborer is merely in nominal wages1     
while that which alone can benefit him  
is higher real wages4 ,now let us see   
what the workman could do to advance    
real wages as contrasted with nominal   
wages4  ,what will be the effect on     
prices of the use of surplus earnings   
during a period of high wages8  ,if the 
surplus earnings are expended1 they will
 be used either in meeting the higher   
prices of customary commodities1 or in  
meeting these advanced prices and also  
in purchasing additional commodities4   
,the first case will occur only if1 and 
when1 the advance in price equals the   
advance in wages1 for only in that event

 will the new wages just cover the new  
cost of customary commodities4 ,then    
this expenditure of the entire income in
 customary commodities tends to keep up 
the price level and any benefit from    
higher wages disappears4  ,in the second
 case1 so far as the worker spends his  
surplus earnings in meeting advanced    
prices for customary commodities1 he    
tends to maintain prices at the higher  
level1 and so far as he buys additional 
commodities1 he increases the demand for
 them and tends further to advance the  
price level4  ,if1 on the other hand1   
the worker will save from his surplus   
earnings1 he will increase the          
community's capital1 and this will tend1
 directly or indirectly1 to cause the   
production of further commodities1 so   
increasing the supply of commodities and
 therefore tending to reduce prices4    
,in any case1 the worker should save as 
much as possible1 as this tends to      
reduce the price level and so to better 
his condition4 ,or1 putting it more     

simply1 in time of high wages the worker
 ought to produce as much as possible   
and consume as little as possible1 both 
influences tending to increase the stock
 of commodities for his ultimate gain   
and for that of the community4  ,in     
fact1 a high level of prices may be due 
measurably to some wasting of the       
world's capital--as in war1 for         
instance--and then the only antidote is 
to restore the capital1 a movement that 
would doubtless occur anyway in time but
 which could be greatly accelerated     
through a general adoption of habits of 
thrift and saving throughout a          
community4  ,this then1 though small1 is
 something definite that we can         
contribute to the material advancement  
of mankind and1 like the duty in this   
connection to our nation1 to our        
families and ourselves1 it consists in  
creating capital2 that is1 earning as   
much as we can and1 in any event1 even  
if our earnings are fixed1 managing the 
income thriftily1 and carrying forward  

as large a net result as possible4  ,we 
turn now from the mass of mankind1 on   
the whole so singularly neglectful of   
these responsibilities1 to the few in   
number who constitute the creators of   
capital1 to whom are due so much of the 
comforts1 the conveniences1 and the     
material advantages that go to make     
civilized life possible4 ,now these few 
are found in every rank in life4 ,they  
may be rich or poor1 professional or    
business men1 employer or employee1 old 
or young1 male or female4 ,the          
characteristic is their habit of thrift1
 of definitely adopting money-making as 
an aim1 of spending less than they earn4
 ,it is astonishing what a small        
percentage of mankind they are4 ,the    
,income ,tax returns in the ,united     
,states for #aiaf showed that out of a  
population of #ajd1jjj1jjj people those 
with taxable incomes aggregated only    
#ccf1feb1 about one in three hundred4   
,but whatever be the rank of the        
individual practicing this thrift he is 

headed in the right direction and he    
tends to reach the point of relative    
competence1 of independence in his      
pecuniary affairs4  ,preminent in the   
class of the thrifty we think of the man
 of affairs2 the business enterprise    
indeed is supposed to be the            
money-maker1 par excellence4            
,money-making is in fact considered as  
its raison d'tre2 it is as a money-maker
 that the business man is contemned by  
some and envied by many4  ,now          
money-making and money values occupy a  
special place in business enterprise1   
due to the fact that on economic        
principles such money value becomes the 
best test--perhaps the only true        
test--of the workableness and success of
 business efforts4 ,in the complicated  
activities of the world's work1 where   
each man1 each undertaking1 each        
business unit1 respectively1 is striving
 primarily for its own advantage1 how is
 it1 among all this pulling and pushing1
 this competition1 that the social      

income is distributed so nearly in      
accordance with the individual          
contribution8 ,even if we admit that    
many persons fail to get a fair share1  
that there is gross inequality here and 
there1 still after all1 a student of    
mankind's activities in production1     
distribution1 and consumption must      
marvel at the extent to which the       
rewards approximate the value of        
contribution4 ,now this is made possible
 by money considered as a measure of    
relative values1 by the standard or test
 of fitness embodied in the thought1    
,will it pay1 and to what extent will it
 pay8 ,if ,i have in mind some new      
invention that will perhaps confer      
benefits on mankind1 the best test of   
its practicability and utility will be1 
,will it pay1 will people buy it1 pay   
money for it8 ,if an improvement in     
process is proposed1 the question is1   
,will it pay8 ,if the young man starts  
out in life with high ideals and a      
reasonably good opinion of his own      

abilities1 an opinion fostered perhaps  
by fond parents and admiring friends1   
the question is1 ,will these abilities  
fit in with the world's needs8 ,will    
they supply a real demand1 will they be 
serviceable8 ,the best means of         
ascertaining this1 although it may be   
only a rough estimate and although      
errors occasionally creep in is1 will   
they pay8 ,can he sell these services   
for real money8 ,this criterion is      
practically omnipresent in the world of 
affairs4 ,it is based on economic       
necessity1 and although here and there  
it may be charged with cruelties1 with  
serious blunders1 it is1 on the whole1 a
 remarkably accurate standard4 ,we see  
this more clearly where we attempt to   
substitute some other criterion for     
ranking the soldiers in the battle of   
life4 ,we can note1 for instance1 the   
inferior type and character1 generally  
speaking1 of men elected to office by   
the suffrages of their fellow citizens1 
compared with men who reach positions of

 authority in business and other        
enterprises through the pressure of     
these economic principles4 ,again1      
consider the nation that has attempted  
to improve on economic distribution of  
power by evolving a government which    
places the power in the hands of those  
best fitted to govern1 a ruling class   
which aims directly at efficiency1 a    
select class but necessarily            
self-selected1 thus supplanting an      
economic rgime by a military            
rgime--successful truly in certain forms
 of economic efficiency through a more  
rigid and compact organization1 but     
destructive of the initiative1 the      
evolutionary growth1 the fundamental    
development1 the liberties of the       
people4 ,contrast this with the freedom1
 happiness1 and progress of a nation of 
shop-keepers4 ,now this economic rgime1 
with its individual instances of        
cruelty1 like the cruelties of nature1  
does on the whole tend to develop men1  
to require their best efforts1 to make  

them come forward and upward4 ,thus1 in 
this interplay of economic forces1      
wealth1 or money1 or profits stands out 
as a primary object of attainment1 and  
becomes the incentive to the complex    
efforts which tend to benefit the       
individual1 the community1 and the      
nation4  ,the business enterprise then  
directs its attention to profits1       
because1 from mere economic necessity1  
profits are the criterion of the true   
success of the enterprise1 that is1 its 
serviceability to mankind4 ,here we     
distinguish between the shortsighted    
man1 who aims at immediate returns1 and 
the farsighted man1 whose eye is fixed  
on the future1 who verily desires the   
profits1 but desires them in the long   
run4 ,but this is only a manifestation  
of human nature as we find it in every  
field4 ,we always note a deficiency in  
the man whose life is lived for the     
present1 for immediate enjoyment3 in him
 we see the typical pleasure-seeker1    
peculiarly prone to temptation1 to break

 the rules of life1 to indulge himself  
at the expense of others or of his own  
future4 ,he is characteristically the   
weakling1 the wrongdoer4 ,and we        
contrast him with the man of character1 
who stands superior to an immediate     
environment1 who will not disregard the 
distant future1 the absent neighbor1 the
 invisible ,god4 ,and so in the economic
 world it is the whole life period which
 is to be regarded when aims are chosen4
 ,profits as a goal for the long run do 
not antagonize moral principles4        
,honesty is the best policy and ,do unto
 others as you would have others do unto
 you are maxims of good business2 and   
that economic principles do not conflict
 with them is shown by the fact that    
they tend towards profits in the long   
run4 ,this is not to assert that mankind
 in business is perfect4 ,in every      
period of economic advance into a new   
environment1 men try new experiments1 as
 during the development of the great    
modern corporation in the period        

following the ,civil ,war in this       
country and1 earlier than that1 in the  
era of railroad building4 ,they have    
tried new experiments in ethics as they 
have in physics1 in chemistry1 in       
economics4 ,they have attempted to      
replace honesty by camouflage1 the      
golden rule by self-aggrandizement4 ,but
 these attempts are not successful and  
so they become discredited2 they do not 
work because inherently they cannot     
last1 and inability to endure is fatal  
to the purposes of any economic         
undertaking4 ,we are emphasizing the    
fact that business is necessarily       
conducted for the long run1 the very    
nature of success implying permanence4  
,a man may take some criminal advantage 
of an opportunity3 he may abscond with  
money entrusted to him2 he may abuse the
 confidence reposed in him by an        
employer1 by a customer2 he may obtain  
an immediate profit by                  
misrepresentation4 ,but no one could    
expect such things to last2 he could not

 possibly be building an enduring       
structure2 such a course could not in   
the end promise him profits1 or any     
other kind of success4 ,a properly      
conducted business enterprise then is   
concerned with making profits in the    
long run2 that is to say1 in accordance 
with accepted notions of business       
conduct2 in short1 according to rules of
 the game1 and this involves conformity 
with a standard1 a standard of giving   
good value for what one gets4  ,we must 
next distinguish between gross profits  
and net profits4 ,the merchant or       
manufacturer naturally desires to do a  
large business1 he points with pride to 
the increase in his sales this year over
 last year4 ,the larger his turnover the
 smaller the proportionate amount of his
 overhead expenses that must be borne   
per unit of product1 and other economies
 follow large-scale production or       
distribution4 ,he may occasionally be   
desirous of increasing his output even  
when it entails a disproportionate      

increase in his expenditures1 with the  
idea that he can later occupy himself   
with reducing these expenses and in the 
meanwhile the goodwill of his enterprise
 will have gained from the larger circle
 of customers4 ,such is the case with a 
new enterprise that often starts out    
with the expectation of little or no    
profits during its early years1 when it 
is gathering a clientle and learning to 
distribute its product with economy4    
,all these1 however1 are special cases4 
,the normal situation is that the       
business enterprise is aiming at net    
profits1 having an interest in large    
sales1 heavy transactions and gross     
profits only so far as these are        
expected to lead finally to net profits1
 the real goal4 ,now these net profits  
are1 of course1 the remainder of        
earnings left on hand after providing   
for all costs and expenses1 for         
depreciation and every other factor     
causing loss1 destruction1 and          
deterioration during the business period

 under consideration4 ,in short1 the    
business capital as it was at the       
beginning of the period is first fully  
restored and made intact at the end of  
the period before a net profit emerges4 
,this net profit therefore becomes in a 
true sense a creation of new capital and
 may indeed be retained in the business 
as an addition to capital funds4 ,even  
when it is paid out in dividends1 partly
 or wholly1 it becomes new capital in   
the hands of the individual stockholders
 who then in their private capacity may 
of course spend it1 but by proper       
investment may keep it permanently      
stored as capital4 ,it is the creation  
of capital then1 that is in reality the 
ultimate money-making aim of the        
business enterprise4  ,we can now       
summarize the attitude and policy of the
 typical business man in his            
money-making aim as follows3  ,in       
seeking profits he is actuated by       
economic necessity4  ,his goal is       
profits in the long run1 which involves 

conformity with economic and ethical    
standards1 and net profits1 which       
implies the creation of capital4  ,the  
creation of capital we cannot fail to   
recognize as a worthy aim4 ,it has given
 mankind much of all that mankind       
possesses and constitutes the foundation
 upon which civilization largely rests4 
,the advancement in the arts and        
sciences has been in no small degree    
stimulated by the demands of business   
enterprise for new methods of creating  
capital and we may believe that should  
the time arrive when this motive should 
fail1 when men should grow to be        
indifferent in their attitude towards   
profits1 the ensuing stagnation would   
affect every department of human        
endeavor4 ,of this we may be assured    
even when we remember that money-making1
 and what goes with it1 is not the only 
aim in life4  ,after cataloguing so much
 that is virtuous in the pursuit of     
money-making the suggestion is          
inevitable that there must be some other

 side to it1 that the common views of   
the rapacity of the money-maker cannot  
be wholly unfounded4 ,what then are the 
vices of the money-making aim8 ,in      
examining this question we shall first  
brush aside some things to which we have
 already referred4 ,the pathological    
cases of mere crime1 of sharp practice1 
of taking advantage of others1 while    
mounting up into distressingly high     
figures considered absolutely1 are much 
less important relatively2 that is1 they
 are infrequent and scarce enough to    
avoid obscuring the rule which they     
violate1 the rule that honesty is       
indispensable in economics as well as in
 ethics4 ,what we must now investigate  
is any vicious tendencies that may be   
found in the money-making aim when      
followed normally and according to its  
own accepted principles4 ,of such       
degenerative tendencies we seem to find 
two3 first1 the tendency to that excess 
which becomes a vice2 and second1 the   
tendency to a disregard of other        

considerations in life through too      
exclusive a devotion to acquisitiveness4
 ,but upon further thought we must see  
that these two tendencies flow together 
and become one1 for too much devotion to
 money-getting and too little attention 
to the other purposes of life are1 after
 all1 expressions of the same thing4    
,perhaps a man may err in excessive     
devotion to any object of life but we   
must admit that in the pursuit of gain  
the evil tendency to exaggerated        
absorption in the one aim is promoted   
through a coperation with his natural   
selfishness4 ,of all the fields of human
 endeavor1 here is one that peculiarly  
fits in with self-seeking1 with         
disregard for others1 which may drag a  
man downward1 making him small and mean1
 unhappy and uncharitable1 while        
apparently attaining the goal at which  
he has aimed4 ,not every man1 while     
concentrating upon money-making1 is     
consciously seeking his country's       
welfare1 the amelioration of life for   

the many1 the uplift of posterity1 even 
if he rigidly adheres to the accepted   
rules of the game1 to the code of       
business honor4 ,this brings us back to 
the popular picture of the money-maker1 
grasping1 sordid1 narrow-minded4 ,there 
are such people4 ,i believe them to be  
rare1 but whether there are many of them
 to-day or not1 it is a type tending to 
disappear in the environment of modern  
business which offers its inducements   
and rewards to him who does1 who        
becomes1 who renders service1 not to the
 sordid seeker for gain4 ,barring an    
occasional exception1 such an exclusive 
aim is not that of the man of large     
affairs1 the business leader1 the       
conspicuously successful man4 ,it is not
 ,harriman1 nor ,edison1 nor ,weinstock1
 nor ,marshall ,field1 nor ,peabody1 nor
 is it the heads of our big corporations
 of to-day4 ,such men are money-makers1 
creators of capital1 builders of large  
enterprise1 but their aim at profits    
while genuine is only incidental to     

their main purpose of doing1 of becoming
 better able to achieve1 of rendering   
service4 ,when the beginner in business 
approaches an experienced friend for    
advice1 he is told to work as hard and  
as faithfully as possible1 to study his 
business1 to seek to improve himself--in
 other words1 to concentrate his whole  
strength on the giving of service1 for  
his wages or salary will take care of   
itself4 ,the experienced man knows well 
that this holds just as truly for all   
ranks in the business world and that the
 higher one ascends in responsibilities1
 the more he must give and do2 indeed   
the leading positions in the business   
world are occupied by men who produce   
tremendously1 whose value to themselves 
and others lies in what they accomplish1
 and this--not what they get--is the    
criterion of success among men of       
experience1 among those in charge of    
enterprises1 who are on the lookout for 
leaders of this type4  ,here we have the
 remedy for the tendency backed by      

natural selfishness towards undue       
devotion to gain3 such narrowness simply
 does not work1 it is crowded out by    
competition with the superior efficiency
 of broader motives4 ,and while1 here   
and there1 the type continues to exist1 
its development in new cases is         
discouraged by every instance           
illustrating the relative success--in   
all senses--attained by those who make  
it their chief aim to produce1 to render
 service4 ,just as the physician bestows
 his first thought upon his patient1    
these superior business men give first  
consideration to their profession1 for  
so they regard it1 and this tends to    
assure their success1 just as it does   
that of the physician1 and to become the
 standardized ideal for lesser men4  ,it
 is indeed clearly self-evident that on 
many accounts the man in business must  
give attention primarily to the service 
he is trying to render4 ,the clerk in   
the store must devote himself mainly to 
his customers1 to his merchandise1 to   

his other duties1 not to his salary4    
,and so with the department manager1 and
 so with the general manager1 whether of
 a store1 a railroad company1 or other  
activity2 the immediate daily problem   
for all lies in the rendering of a      
service1 the producing of a commodity1  
or the doing of the thing for which the 
business enterprise exists4 ,this       
concentration upon output is furthermore
 required by competition which whips the
 producer into line and often makes it a
 matter of business life and death that 
one should make progress in method and  
quality4 ,that his shoes wear is a      
matter of pride to the shoe             
manufacturer4 ,blank tires are good     
tires is not to be regarded as merely a 
boastful advertisement4 ,if it was it   
would not pay the advertising cost4     
,money-making as an aim thus becomes    
subsidiary to the characteristic        
activities of the enterprise1 it is in a
 sense a by-product4 ,but the           
money-making aim is there1 although     

perhaps in the background4 ,it is       
furnishing the power under which the    
enterprise operates4 ,more than that1 it
 is the gauge indicating the prosperity 
or lack of prosperity of the enterprise1
 its progress1 its fitting in with the  
needs of life4 ,in short1 the           
money-making aim spurs on the business  
enterprise1 just as the weekly or       
monthly pay spurs on the humble worker2 
but in each case the main attention is  
given1 and necessarily given1 to the    
work to be performed4  ,let us now      
consider some of the implications of    
this concentration on rendering service4
 ,the directed effort of each man to the
 production of the utility              
characteristic of his business1 tends to
 result in his learning to conduct that 
specific activity with a high degree of 
skill1 and with an increasingly valuable
 fund of experience4 ,so highly         
specialized does he become that it will 
be quite impossible for any one hitherto
 a stranger in that sphere to conduct it

 as well4 ,therefore in an age of       
cordinated effort the more a man has of 
accumulated knowledge and facility in   
handling a certain kind of affair and   
the better fitted1 therefore1 he is to  
continue and to progress along that     
line1 the less relatively he is able to 
undertake the affairs of some other kind
 with which he is not familiar4 ,we     
commonly feel free to criticize a       
railroad1 a newspaper1 a large business 
house1 perhaps a university1 with which 
we may have casual contact1 but the fact
 is there are few competent critics     
outside of the ranks of the enterprise  
itself or of those carrying on          
activities that are directly similar4   
,in a word1 through this focusing of    
attention1 a man will come to be        
exhaustively familiar with his own      
occupation1 while possessing a merely   
superficial acquaintance with the       
theories1 customs1 and responsibilities 
of those of others4 ,the wise man       
therefore argues the necessity of       

confining himself to the field in which 
he has become expert and will avoid     
taking chances in some outside direction
 wherein he is not familiar4 ,one of the
 most common and disheartening          
experiences in the money-making and     
money-saving of the thrifty is that     
after having both worked hard and       
practiced self-restraint1 the resultant 
savings are often put into some         
enterprise that turns out badly1 and the
 whole effort is thus thrown away4      
,generally this happens because he has  
violated the rule we have just stated2  
he has ventured his savings in          
unfamiliar fields1 ignorantly he has    
rushed in where the better informed     
would have feared to tread4 ,such       
so-called investments are in reality    
highly speculative4 ,they involve risks 
which are unknown and altogether to be  
avoided4 ,now no one speculates in his  
own legitimate business1 for there he is
 acquainted with the hazards which1 he  
has learned1 require the best of        

knowledge and the greatest of prudence4 
,it is the allurement of the unknown    
that tempts him to seek unearned profits
 through speculation in outside regions 
where1 in the nature of the case1 the   
chances must be against him4 ,now       
speculation has its proper place in     
business3 there are certain inherent    
hazards that must be undertaken1 mainly 
to be found in the risk of the seasons  
in the production of crops1 and the risk
 of the future in undeveloped           
enterprise4 ,these risks must be carried
 by somebody1 but clearly they          
constitute an activity for specialists  
who study conditions1 becoming          
relatively expert in determining how and
 when to act4 ,these specialists are    
drawn principally from two classes3     
,first1 the professional speculator1 who
 knows his markets and makes a business 
of buying and selling future risks2 such
 men perform a great service in handling
 our seasonal crops and in other        
directions1 and are entitled to a       

reasonable profit4 ,second1 the man of  
wealth who may use part of his surplus  
in the risks of undeveloped enterprise2 
although it is probable that in the end 
his losses and expenses will outweigh   
his gains1 he can afford to take chances
 of such experiments in the hope that   
success will follow in some of them2    
furthermore1 he can regard the outlay as
 a contribution to the advancement of   
mankind4 ,for the rest of us1 however1  
outside of these two classes1 it is our 
business to keep away from speculation  
whether in oil wells1 flying machines1  
in new factories1 or in real estate3 in 
the long run1 we cannot get something   
for nothing and money-making efforts    
that are ethically valid thus coincide  
with those that are selfishly desirable1
 namely1 the efforts to obtain the      
payment1 the profit1 that arises from a 
valuable service performed or commodity 
produced4 ,too often men who follow this
 rule in their regular occupation depart
 from it in the use of their saved      

surplus funds4 ,they feel that their    
savings ought to make them money1 as    
they say4  ,now savings can be employed 
in one of three ways3 ,they may be used 
as capital by the owner2 or they may be 
put out in investments--that is1 used or
 utilized as capital in the business of 
another2 or1 third1 they may be wasted  
in gambling or speculation4 ,as a matter
 of course1 the employment as additional
 capital in one's own enterprise is     
generally the most desirable wherever   
applicable1 but this is a use of limited
 scope1 relating to but few of the      
people engaged in productive activity   
who earn and save a surplus4 ,the main  
resource for such accumulations is in   
safe investments1 in the bonds and      
securities of our own country and those 
of well established enterprises4 ,not   
many among our embryo capitalists       
possess the experience or skill         
requisite for the safe and proper       
investment of their funds1 they must    
rely upon the advice of others4 ,but    

whom can they trust8 ,the demand for    
investment advice has not failed to call
 forth a supply of advisers1 and        
elaborate are the schemes designed to   
lure the unwary4 ,but1 generally        
speaking1 the man who falls into the    
clutches of these birds of prey has     
himself to blame1 for the reason that   
the temptations they offer are appeals  
to the illegitimate desire to get       
something for nothing or to the foolish 
notion that one can get-rich-quick in   
some way whispered about by a stranger1 
and out of sheer benevolence4 ,the fact 
is that the wise man will dismiss all   
thought of making money out of his      
investments2 he will seek only the      
moderate return which alone is          
consistent with safety2 and with this   
policy1 will turn a deaf ear to any     
so-called opportunity which promises big
 profits4 ,we can summarize the matter  
by saying that concentration upon one's 
business and service implies that one   
should not attempt to make money        

elsewhere4  ,this concentration on one's
 affairs therefore grows into a sort of 
practical system in which each member of
 the business community is looking after
 some function or activity to the       
exclusion of other things4 ,and so the  
world's work is carried on to the best  
advantage1 each function being filled by
 those particular men who have become   
relatively expert therein4 ,from this   
system arises a business habit or method
 not always understood by the young and 
inexperienced1 by the non-business      
person4 ,we refer to the practice in    
trade of leaving to each individual1 to 
each enterprise1 to each organization1  
the responsibility for looking out for  
its own interests when having dealings  
with others4 ,caveat emptor--let the    
buyer beware--expresses an extreme      
development of this1 and in its common  
signification1 that each side is to be  
permitted and expected to take any      
advantage of the other side that it may 
be able to secure1 it describes a state 

of warfare rather than of business4 ,in 
buying and selling1 in aiming to obtain 
the most favorable terms for each line  
of his activity1 in meeting conditions  
of competition1 in all these relations1 
the business man is endeavoring to      
better himself and may doubtless be     
tempted here and there to forget the    
interests of the other party to the     
transaction4 ,but to yield to such      
temptation would merely be to abuse a   
principle which on the whole is         
sanctioned by the requirements of       
economic efficiency4 ,this principle is 
that the nearest approximation to       
effective justice in business           
transactions is reached when on each    
side the parties devote themselves to   
their respective interests and points of
 view4 ,if ,a has a house for sale and  
,b is a prospective buyer1 the essence  
of the possible transaction between the 
two is that ,a's idea of the value of   
the property is different from ,b's idea
 of that value2 or at any rate that ,a  

sees less value in it to him than does  
,b to ,b4 ,this is of course typical of 
all business transactions--the seller   
desires the money above the commodity1  
the buyer prefers the commodity to the  
money4 ,the seller and the buyer each   
dwells naturally upon his own idea of   
value4 ,this is altogether desirable1   
not to say indispensable1 and is        
characteristic of every relation of     
business1 wherever two men buy and sell1
 employ one another1 or have other      
dealings together4 ,the situation is    
somewhat the same as in a law suit where
 the duty of the attorney for the       
plaintiff is to make every point that   
fairly can be made for the plaintiff1   
while the attorney on the other side    
must correspondingly make every point   
that can properly be made for the       
defendant4 ,each side is supposed to    
look after the interest of that side4   
,similarly1 in a business organization1 
say a railroad1 when some new project is
 under consideration it will be         

submitted to the engineer1 to the       
chemist1 to the attorney1 to the        
practical transportation man1 and in    
each of these departments it is expected
 that the wisdom born of experience in  
the particular function will be brought 
to bear4 ,the engineer speaks with      
authority on engineering questions1 the 
lawyer on legal questions1 the          
transportation man on the practical     
working out of the project2 and1        
normally1 the criticisms and            
contribution of each are confined to his
 own function4 ,in short1 the rgime of  
economic self-interest results in       
leaving to each the responsibility which
 he is most competent to assume1 that in
 which he is most expert1 which thereby 
receives the best attention that        
generally speaking it could have4 ,nor  
are correctives lacking for the abuses  
which may enter in through an           
overdevelopment of self-interest4       
,caveat emptor becomes discredited as an
 unmodified basis of human action4 ,the 

golden rule is increasingly seen to     
constitute a foundation demanded by     
economics as well as by ethics4 ,the    
trend to-day is away from indifference  
to the interests of those with whom we  
deal4 ,the successful merchant will not 
attempt to make a profit through sales  
which he knows would not benefit the    
purchaser1 for that would not measure up
 to the test1 ,will it pay8 ,the value  
of a business depends largely on its    
goodwill and too much money and effort  
are spent in advertising and other means
 of building up a clientle to make men  
conceive it to be to their interest to  
deal sharply with their customers4  ,in 
the efforts of scientists to seek out   
and establish new methods1 new          
principles1 the success of an experiment
 is to be determined1 ,i suppose1 by the
 test1 ,will it work8 ,does it yield    
effective results8 ,similarly1 in       
economics1 the science of mankind in its
 production1 distribution and           
consumption of material things1 the test

 of utility and efficiency is1 ,will it 
pay8 that being the standard of         
workableness in the application of that 
science4  ,we have attempted1 therefore1
 in this analysis of money-making to    
apply this test1 because the practice or
 habit or influence that pays is that   
which is in accord so far with the      
principles underlying this branch of    
social science4 ,we have seen1 according
 to this standard1 that it is the duty  
of all to adopt money-making as a       
conscious aim2 that the money is to be  
economically used1 the final object     
being net profit1 that balance or       
remainder which is carried forward as   
created capital4 ,inability to increase 
a fixed income does not absolve one from
 the duty of doing one's part in the    
creation of capital through thrift and  
saving4 ,the business enterprise1       
moreover1 is required by economic       
necessity to aim at                     
money-making--meaning1 however1 profits 
in the long run rather than immediate or

 temporary gains4 ,such permanent       
returns can only be sought through      
adherence to ethical principles and     
although this aim at profits becomes the
 power plant which drives the business  
machine1 the latter gives its energies  
and attention more directly to the      
rendering of service4  ,concentration   
upon service tends to make a man        
relatively efficient therein1 but argues
 a relative unfamiliarity with the field
 of others1 from which we infer the     
advisability of confining one's activity
 to the thing he has learned to do best4
 ,as an example of this1 he should avoid
 placing his surplus capital or savings 
in outside enterprises where they will  
partake of risks that are unknown to    
him1 nor should he attempt to employ his
 savings at all with the purpose of     
making money1 unless1 indeed1 he can use
 them as capital in his own business4   
,the focusing of attention on one's own 
function also implies and explains the  
custom of placing upon participants in a

 business transaction the responsibility
 each for his own side1 a custom which  
is economically justified but which must
 be kept within proper limits1 as is    
fully recognized by the business men who
 are successful and who therefore become
 models or examples for the guidance of 
other men1 influencing the latter       
towards high ideals4  ,we have found1 on
 the other hand1 that apart from men in 
charge of business enterprise1 the      
burden of providing thus for man's      
welfare and development is assumed by   
very few1 the vast majority1 whether in 
professional or business employment1    
treating it with neglect and contempt4  
,they think1 perhaps1 that they are     
aiming at higher things1 or that their  
efforts would not sufficiently count1 or
 they do not give the matter any sturdy 
thought2 while the underlying motive1   
often unconscious1 is simply an         
unwillingness to practice               
self-restraint4 ,it is self-indulgence1 
we must conclude1 that is to be overcome

 if we are to meet this responsibility  
in a manly way1 visualizing it with     
sufficient clearness to see that thrift1
 the creation of capital for one's self 
and for the race1 comes into no         
necessary conflict with any other proper
 aim in life1 but on the contrary       
constitutes a fundamental duty to       
society1 to the state1 to one's family1 
to his own future1 to his self-respect4