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businesses which have found their way out of one-man or one-family control into Wall Street. In the case of the Woolworth company the control was merely shared; for Goldman, Sachs & Co. and Lehman Brothers, who refinanced it, make it a general policy to require that those who built up an enterprise shall take part in their reorganizations. The Woolworth stores represent strikingly the gesture it has almost the air of swank of writing off good-will as a large item of the balance-sheet. Originally fifty million dollars, this was reduced by twenty millions in 1922, by ten millions in 1923 and again in 1922, and in 1925 to the final figure of $1.

This company, with 5300 stockholders, represents a merger of several smaller chains into the overshadowing Woolworth business. The shares are carried on the books at $25 each; the physical value back of each share is about $35. The stock was put on the market in 1912 at $55 a share; each has been split into four shares, and there has been a thirty per cent stock dividend; so that what cost $55 fourteen years ago is worth at present prices nearly $1000, practically all of which is based on earning-power-on the magic of sales, at "Nothing over ten cents in this store!"

The Woolworth sales, please note, were nearly 253 millions in 1926; in the single month of last September they were more than a million above the sales for that month in 1925. Such figures as these, not the property account, are what interests Wall Street investors; and by Wall Street investors, of course, I mean the millions whose money flows into this re

stricted and cavernous district, not merely the resident buyers. Figures such as those I have just cited have served to push the lowly five-andten-cent stores into the financial upper crust. Woolworth is one of the aristocrats of the Stock Exchange. Its shares have ranged above 200 when the going was good. The company controls 1500 stores in the United States, Canada, and Great Britain, and employs 28,000 persons.

Another chain which has gone out of private ownership is Childs, which served fifty million meals in 1925. The Childs string embraces more than one hundred restaurants, half of them in New York; they have invaded Fifth Avenue. It happens that in this case the value of realty, plants, and equipment is not far from the value of outstanding stock; more than half of the authorized common is still in the treasury. Before the refinancing, the common had a par value of $100; in 1923 it was changed to no par value, and five new shares were issued for each of the old ones. Now the new shares are selling around fifty-five dollars each. Childs had a gross income in 1926 of about twenty-seven millions, an average of about half a dollar for each meal served. It does not list goodwill.

The growth of chain systems such as these is an interesting phase of industry's effort to solve the problem of distribution. About forty-nine cents of every dollar we spend goes into that complex of transportation, insurance, rent, services, and so on which is called distribution. American business genius has been devoted to production at the cost of merchandising; but now the chain

stores, the mail-order houses, the department-stores (some of which are themselves grouped in chains), and the "company stores" are competing with the small individual shops to take the major place in retailing. In the stock market reports, a part of the struggle is reflected.

If we turn away from chain-stores, which require a comparatively large investment in "plant," we find more striking examples of the manner in which the investor ignores property account when looking at earningpower. There is Listerine. It has been on the market for more than forty years, and it is like Coca Cola in that "everybody" knows it. The Lambert Pharmacal Company's physical properties are valued at a little more than a quarter of a million dollars, and its total assets are less than a million and three quarters; but the outstanding stock, based on about half its earning-power, is worth more than seventeen millions, and is selling well above the price at which it was offered to the public.

The goods labeled Listerine are made by the Lambert Pharmacal Company, and this is controlled by a holding concern, the Lambert Company; it is the latter's shares which are on the market. The Lambert Pharmacal Company has but 60,000 shares, of no par value, carried on its books at a valuation of $600,000, and the Lambert Company owns a little more than half of them. Now, the Lambert Company has an authorized issue of a million shares of no-par stock, of which 281,000 are outstanding. Nearly 200,000 shares were put on the market in March, 1926, at $41.75 each by Goldman,

Sachs & Co. and Bond & Goodwin; these were oversubscribed, and are selling as this is written above $67 a share; a gain, say, of $35 a share for those who bought at the market price at the time of issue. The explanation is to be found in earnings. The Lambert Pharmacal Company earned in 1922 $8.67 on each of its shares; in 1923, $15.75; in 1924, $23.50; in 1925, $30; and in 1926, $47. The Lambert Company, owning more than half of those shares, sprays out a part of the prosperity to the stockholding public.

All the enterprises we have been talking about, excepting the Dodge company, had their beginnings back in the eighties. The automobile industry was born at the beginning of this century; but the Childs restaurants set up in business in 1899, and the others I have mentioned even earlier. They have persisted, therefore, through more than a generation of the human span, all of them on an ascending scale of profits; and finally their prosperity has been capitalized.

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Now, prosperity, particularly on a large scale, has a way of going to the head. Twenty-five-cent sugar ruined many Cuban sugar planters and caused a general financial collapse on the island. A few years of exceptionally high prices for wheat and hogs and corn brought disaster in the long run to many American farmers. Individuals are likely to become reckless or extravagant in boom periods, and they pay through the nose in the reaction. Every boom has its morning after. Corporations are less likely to be swept off their feet; there are advantages in being "soulless."

The United States Steel Corporation, for example, with more than 85,000 shareholders and a quarter of a million employees, has good reason to step lightly when others are excited. The "trust" came out of our last panic in better shape than when it went in. Between 1915 and 1922 it experienced, as did other businesses, boom prices and then a bust period. The prices of steel and pigiron were multiplied, roughly, by four, and then dropped off with disconcerting suddenness. But instead of flinging money around during the high times, the Steel Corporation soberly paid off its debts and increased its surplus. When the crash came it was clear-headed and well heeled; and even the losses of the depression did not pull it back to where it had been when the boom began.

It would seem that every business man should be crafty enough to accomplish this sort of thing, but the fact is that not even the majority of them do. Speculators were probably even less cautious, and investors not so timorous as the speculators. (For there are bears as well as bulls among speculators.) The tendency is to buy on a rising market, and to keep buying, regardless of the fact that a falling market may be just around the corner. It is possible that level-headedness in such crises is one of the advantages of transfer from one-man domination to banking-group control. Bankers are notoriously cagy.

A single dominant personality at the top is no longer a sine qua non of successful industrial enterprise. The Woolworth stores, representing partial group management, and General Motors, representing complete Wall

Street conception and control, show that the function of the owner is less important than economists have been disposed to fancy. Our heroics about our captains of industry_appear to have been premature. It is not essential that every concern have its Pooh-bah. The technique of management and control can be applied, it is now clear, either under the Pooh-bah or under a group of financiers, banking houses, and absentee stockholders. This seems to me one of the most interesting developments that has come out of the drift of industry from one-man or one-family control into the hands of syndicates and groups. It makes evident that a going enterprise can keep going without a Master Mind.

Among the stockholders are employees. In twenty-two large concerns there are now more than 300,000 employees listed as partners, and they own nearly half a billion dollars' worth of stock. It has been estimated that employees the country over own perhaps $700,000,000 worth of stock. That is but a drop in the bucket, to be sure; for we roll up higher and higher the totals we put into stocks and bonds. The new securities offered in the first half of 1926 aggregated more than four billions, at a time when Great Britain was issuing less than two thirds of a billion. In this country the figure was the highest for any year, and seven tenths of the new issues of stocks, debentures, and bonds were for corporate financing. Of the instances which I have cited, only two were included in this period, and those not the largest. I have not sought to catalogue recent flotations, but to pick up instances here and

there which would illustrate a principle of modern finance and reveal certain trends.

One of those trends is the spread of employee-partnership, and another is the general spread of shares into millions of hands. The Pennsylvania Railroad alone has 140,000 stockholders. Now, if it does not make so much difference, so far as earnings are concerned, how industry is owned, if it is possible to get along without the kind of owner

who seeks only to reap a present profit, there seems a better prospect that production may be made to keep step with the general good. Now that we have found how workable is a diffusion of partnership and a distribution of prosperity, industry can be brought into closer relation to large public benefits. Those who seek to avail themselves of its benefits through the stock markets must accept the risks which all business enterprises undergo.



They who feel ecstasy in early May
When, rose against a periwinkle sky,
The peach-trees blow; or those who thrill to lie
Watching the pale bees of the Milky Way
Swarm on an August night—they only know
That the same soul which rapturously sings
At Beauty's hand upon its pulsing strings
Vibrates as surely to the stroke of woe.
Yet only pity in their hearts they find
For placid lives of still and limpid days
Threaded like beads all of one shape and kind
And color, till at last the slight cord frays.
They, having known the wonder of the light,
Though lost in tears, can still sing in the night.


I have long wondered why some one doesn't write a grammar from the point of view of the human race. The books we study must have been composed by men who never talked. They dissect language after it has been used, and upon the fragments they meditate in logical evolutions, but they neglect the vital thing, the behavior of words in flight from my mind to yours. Grammar as a subject of study is a structure imposed upon speech by pedants more interested in the structure than in the speech. The genuine grammar, the natural and inevitable relations between words when the words are intelligible, is, like some other profound things in nature, simple.

Many a bright pupil has asked how the grammar now taught could help him to read or write. Many a writer, whose formal training in grammar was defective, has written well.

If like Shakspere he reaches unassailable fame, the grammarians exercise much dialectic to prove he was following their rules after all. We suspect he was following rather the genuine laws of speech, which we wish we knew. If we are told his genius rose superior to the rules of grammar, we are skeptical; we suspect the rules were either useless or wrong. We make our criticism, that is,

from the point of view of the people who are using the language, the speaker and the hearer. The only important grammar is that which brings them together. Even if the formal grammar were correct, Shakspere and his audience would need only a few pages of it, and we need no more. But the children still learn, or try to, that nouns are abstract or collective, common or proper; that "certain proper nouns become common nouns when used in a special sense"; that nouns have gender or if in spite of grammars they obviously haven't, then they have common gender. But did any human being ever find use for these definitions as he spoke or wrote? Would the knowledge of them solve

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