Chapter I

THE MODERN BUSINESS COURSE AND SERVICE

As Dean of New York University School of Commerce, Accounts and Finance, Joseph French Johnson had for many years continually received letters requesting advice on what to read on business.

These demands came not only from young men, but from mature and able executives, and sometimes even from the most successful business leaders. To all such requests Dean Johnson was obliged to reply that the only practical way to study the fundamental principles of business in a systematic manner was to attend the lectures in university schools of commerce.

At that time the literature of business was scanty and for the most part of doubtful value. Working alone, a man could get but little help in his efforts to widen and deepen his knowledge of business principles.

It became evident that there was a great need for an organized, logical statement of the basic principles on which successful business is founded. It was determined to establish an institution which should meet the demand. After years of preparation the Alexander Hamilton Institute was established in 1909.

The name

In selecting the name, it was agreed that none could be so suitable as that of Alexander Hamilton.

Hamilton is perhaps chiefly remembered for his masterly statesmanship; but he was equally conspicuous as soldier, financier, author, organizer and practical economist.

He was without doubt the greatest manager ever employed by the United States Government. When he became the first Secretary of the Treasury, he found a chaotic government, without money, without credit, and without organization. He secured order, provided funds and created prosperity. He investigated the industries and directed the early commercial development of the United States. "He touched the dead corpse of the public credit, and it sprang upon its feet. He smote the rock of the nation's resources and abundant streams of revenue gushed forth."

Hamilton was a great executive and systematizer; he himself worked out an accounting system for the United States Government which, with but slight modifications, remained in force for more than a hundred years.

The plan

The Modern Business Course and Service is a systematic, time-saving method of bringing to any man's office or home that business knowledge and training which he needs, but which he cannot acquire through his own experience.

It is designed for the benefit of two groups of men:

(1) those who already are in executive or semi-executive positions;

(2) young men who have brains and the ambition to become business executives.

It is intended, in general, for the men who are looking and moving ahead; for live, keen-witted, energetic men; for men who are not satisfied to remain in the ranks or in subordinate positions. These men may or may not have had a thorough school and college training; that is not an essential. They may or may not have wealth and high position; that is unimportant. But they _must_ have ability and enough serious purpose to spend a portion of their spare time in reading and thinking about business problems.

The organization

The Modern Business Course and Service is conducted by an organization made up of business and professional men and of university specialists in business subjects. Inasmuch as such an institution derives its strength almost wholly from the men who are identified with it, a complete list of these men, with brief biographical notes to show who they are and what they have accomplished, is given in Chapter VII, on pages 97 to 118.

The Institute organization consists of four groups:

ADVISORY COUNCIL

AUTHORS AND COLLABORATORS

SPECIAL LECTURERS

INSTITUTE STAFF _a._ CONSULTANT STAFF _b._ ADMINISTRATIVE STAFF

Business and educational authority of the highest standing is represented in the Advisory Council of the Institute.

_This Advisory Council_ consists of Frank A. Vanderlip, the financier; T. Coleman duPont, the business executive; John Hays Hammond, the eminent engineer; Joseph French Johnson, Dean of the New York University School of Commerce; and Jeremiah W. Jenks, the statistician and economist. The Council has general supervision and direction of the policies and activities of the Institute. No important move of any kind is made without the sanction of this body.

_The Authors and Collaborators_ are men prominent in educational and business circles. As authors, co-authors and collaborators they are responsible for the Modern Business volumes. Their writing is done under the guidance and with the cooperation of the Institute's Editorial Board. Each one is chosen because of his particular training and ability in the field he covers.

_The Special Lecturers_, whose business connections are stated on pages 111 to 118, are men of high commercial standing who have devoted time and thought to preparing written lectures for the Modern Business Course and Service. These lectures present some of the results of their successful business experience.

_The Institute Staff_ actively conducts the Modern Business Course and Service. Many of the members of the Staff are also members of the faculties of university schools of commerce. Every member of the Staff is a specialist who in some one business subject is entitled to rank as an authority. Their names, business and university connections and official duties in the Institute are stated on pages 100 to 110.

(a) _The Consultant Staff_ are the experts who do not give their entire time to the Institute, but who are called upon for special information and advice whenever the occasion requires.

(b) _The Administrative Staff_ consists of the Senior and Junior Executives who are active in the administrative work of the organization. These men are heads of the departments responsible for the successful management of the Alexander Hamilton Institute.

Subjects covered

The Modern Business Course and Service brings to a subscriber the essential business knowledge that he does not acquire in his own experience. The subject matter of the Course and Service is treated under the following 24 heads:

1. BUSINESS AND THE MAN 2. ECONOMICS--THE SCIENCE OF BUSINESS 3. BUSINESS ORGANIZATION 4. PLANT MANAGEMENT 5. MARKETING AND MERCHANDISING 6. SALESMANSHIP AND SALES MANAGEMENT 7. ADVERTISING PRINCIPLES 8. OFFICE ADMINISTRATION 9. ACCOUNTING PRINCIPLES 10. CREDIT AND COLLECTIONS 11. BUSINESS CORRESPONDENCE 12. COST FINDING 13. ADVERTISING CAMPAIGNS 14. CORPORATION FINANCE 15. TRANSPORTATION 16. FOREIGN TRADE AND SHIPPING 17. BANKING 18. INTERNATIONAL EXCHANGE 19. INSURANCE 20. THE STOCK AND PRODUCE EXCHANGES 21. ACCOUNTING PRACTICE AND AUDITING 22. FINANCIAL AND BUSINESS STATEMENTS 23. INVESTMENTS 24. BUSINESS AND THE GOVERNMENT

Simple, elastic, workable

The Modern Business Course and Service covers the essential subjects on which every business man should be well informed.

When an enrolment is accepted, the Institute undertakes,

1. _To supply the subscriber_ with the Modern Business Text--the most complete and best organized treatment of business principles and practice that has yet been produced.

2. _To guide and illuminate_ his reading of the Text by a series of Modern Business Talks.

3. _To bring him into touch_ with the ideas and methods of some of the foremost business and professional men in the country through a series of Modern Business Lectures.

4. _To give him facilities_ for applying and testing his knowledge of business principles through a series of Modern Business Problems.

5. _To keep him informed_ on current business events and the trend of future affairs in the commercial world by means of Monthly Letters on Business Conditions.

6. _To acquaint him_ with important events covering the production and prices of general commodities and the current security market.

7. _To supply_ him with four Modern Business Reports on important problems; the reports to be selected by him from an extensive list.

8. _To render personal service_ through answers to all inquiries in connection with his reading of the Course.

An enrolment for the Modern Business Course and Service covers a period of two years. During that time each subscriber is constantly in touch with the members of the Institute Staff. There are no rigid rules--no red tape--to restrict or annoy; instead, there is personal guidance and sincere cooperation.

The more carefully you consider the plan, the more clearly you will see how well it is adapted to the needs of busy men who must make every minute and every ounce of effort produce the greatest possible results.

You will see more clearly the actual scope of the Modern Business Course and Service if you keep in view its eight main features:

1--TEXT 2--TALKS 3--LECTURES 4--PROBLEMS 5--MONTHLY LETTERS 6--FINANCIAL AND TRADE REVIEWS 7--REPORTS 8--SERVICE

1--Text

The basis of the Course and Service is a series of twenty-four text-books prepared under the careful supervision of its editors, assisted by well-known authorities. In some cases the latter appear as authors, in others as collaborators in the preparation of the Texts.

Dean Joseph French Johnson is Editor-in-Chief of the Course. The managing editor is Dr. Roland P. Falkner. Associated with them is a large editorial staff which takes an active share in the writing and preparation of the Course. The authors and collaborators are specialists who rank as authorities in their particular field. The series is widely recognized as the most important contribution yet made to business literature.

The volumes in the Modern Business Series are sold apart from the Institute Course only to universities for use as prescribed text-books in classroom work. Among the universities which have used the Institute's volumes as texts are:

Boston University Brown University Cedar Crest College Coe College College of the City of New York College of William and Mary Colorado College Columbia University Cornell University Dartmouth College Denver University Drake University Duquesne University Elmira College Georgetown University Georgia School of Technology Grinnell College Kansas State Agricultural College Lawrence College Marquette University Miami University Middlebury College New Hampshire College New York University Northwestern University Ohio State University Ohio University Oregon Agricultural College Pennsylvania State College Purdue University Queens University Rose Polytechnic Institute South Dakota State College State College of Washington Syracuse University Toledo University Trinity College Tulane University Vanderbilt University Virginia Polytechnic Institute University of Alabama University of Akron University of Arizona University of British Columbia University of California University of Chicago University of Cincinnati University of Colorado University of Illinois University of Indiana University of Iowa University of Kansas University of Michigan University of Minnesota University of Nebraska University of Oregon University of Pittsburgh University of Texas University of Washington University of Wisconsin Washington and Lee University Yale University

There are about three hundred and fifty pages in each of the twenty-four volumes. Each volume is carefully indexed and contains, in addition to the text, a few review suggestions after each chapter which are of great value in mastering the subject.

Questions of Commercial Law as they affect each subject are discussed in the volume pertaining to that particular unit of the Course.

_Business and the Man_ _Volume 1_

By JOSEPH FRENCH JOHNSON, D.C.S., LL.D., Dean of New York University School of Commerce, Accounts and Finance; Chairman of the Advisory Council, Alexander Hamilton Institute.

_Economics--the Science of Business_ _Volume 2_

By JOSEPH FRENCH JOHNSON, D.C.S., LL.D., in collaboration with FRANK L. MCVEY, Ph.D., LL.D., President, University of Kentucky.

_Business Organization_ _Volume 3_

By CHARLES W. GERSTENBERG, Ph.B., LL.B., Professor of Finance, and Head of the Department of Finance, New York University School of Commerce, with the collaboration of WALTER S. JOHNSON, B.A., B.C.L., Member of the Bar of the Province of Quebec, Lecturer on Railway and Constitutional Law, McGill University.

_Plant Management_ _Volume 4_

By DEXTER S. KIMBALL, A.B., M.E., Dean, Engineering College, Cornell University.

_Marketing and Merchandising_ _Volume 5_

Prepared by the Alexander Hamilton Institute in collaboration with RALPH STARR BUTLER, A.B., Advertising Manager of the United States Rubber Company, and JOHN B. SWINNEY, A.B., Superintendent of Merchandising, Winchester Stores.

_Salesmanship and Sales Management_ _Volume 6_

By JOHN G. JONES, Vice-President and Director of Sales and Advertising, Alexander Hamilton Institute.

_Advertising Principles_ _Volume 7_

By HERBERT F. DEBOWER, LL.B., Vice-President, Alexander Hamilton Institute.

_Office Administration_ _Volume 8_

By GEOFFREY S. CHILDS, B.C.S., Office Manager of the Alexander Hamilton Institute.

_Accounting Principles_ _Volume 9_

By FREDERIC E. REEVE, C.P.A., and FREDERICK C. RUSSELL, Controller, Alexander Hamilton Institute.

_Credit and Collections_ _Volume 10_

By DWIGHT E. BEEBE, B.L., Director of Service of the Alexander Hamilton Institute, and T. VASSAR MORTON, Litt.B., Bursar, Alexander Hamilton Institute.

_Business Correspondence_ _Volume 11_

By CHARLES W. HURD, Associate Editor, Alexander Hamilton Institute, in collaboration with BRUCE BARTON, President, Barton, Durstine & Osborn, Inc.

_Cost Finding_ _Volume 12_

By DEXTER S. KIMBALL, M.E., Dean, Engineering College, Cornell University.

_Advertising Campaigns_ _Volume 13_

By MAC MARTIN, President of the Mac Martin Advertising Agency.

_Corporation Finance_ _Volume 14_

By WILLIAM H. WALKER, LL.D., Dean of Duquesne University School of Accounts, Finance and Commerce.

_Transportation_ _Volume 15_

By EDWIN J. CLAPP, Ph.D., formerly Professor of Economics, New York University.

_Foreign Trade and Shipping_ _Volume 16_

By J. ANTON DEHAAS, Ph.D., Professor of Foreign Trade, New York University.

_Banking_ _Volume 17_

By MAJOR B. FOSTER, M.A., Assistant to the Executive Committee, Alexander Hamilton Institute, in collaboration with JESSE H. RIDDLE.

_International Exchange_ _Volume 18_

Prepared by the Alexander Hamilton Institute in collaboration with E. L. STEWART PATTERSON, Superintendent of the Eastern Townships Branches, Canadian Bank of Commerce.

_Insurance_ _Volume 19_

Prepared by the Alexander Hamilton Institute, in collaboration with EDWARD R. HARDY, Ph.B., Lecturer on Fire Insurance, New York University School of Commerce, Assistant Manager, New York Fire Insurance Exchange; S. S. HUEBNER, Ph.D., Professor of Insurance, University of Pennsylvania; G. F. MICHELBACHER, M.A., Actuary of the National Workmen's Compensation Service Bureau, and BRUCE D. MUDGETT, Ph.D., Associate Professor of Economics, University of Minnesota.

_The Stock and Produce Exchanges_ _Volume 20_

By ALBERT W. ATWOOD, A.B., Associate in Journalism, Columbia University.

_Accounting Practice and Auditing_ _Volume 21_

By JOHN THOMAS MADDEN, B.C.S., C.P.A. (N. Y.), Professor of Accounting and Head of the Department of Accounting, New York University School of Commerce.

_Financial and Business Statements_ _Volume 22_

By LEO GREENDLINGER, M.C.S., C.P.A. (N. Y.), Secretary and Treasurer, Alexander Hamilton Institute; formerly Assistant Professor of Accounting, New York University School of Commerce.

_Investments_ _Volume 23_

By EDWARD D. JONES, Ph.D., formerly Professor of Commerce and Industry, University of Michigan.

_Business and the Government_ _Volume 24_

By JEREMIAH W. JENKS, Ph.D., LL.D., Research Professor of Government and Public Administration, New York University, Member of Advisory Council, Chairman of the Board, Alexander Hamilton Institute, in collaboration with John Hays Hammond, consulting engineer and publicist.

2--Talks

The Modern Business Talks, which are sent fortnightly, are informal discussions of the principles treated in the Text. As the name indicates, these Talks bring up many specific points and cases, and show more clearly why and how the underlying principles of scientific business should be applied. They are particularly direct, practical and stimulating. Their periodic visits serve to keep every subscriber in touch with the Institute Staff and alive to the importance of following the Course systematically. The Talks are prepared by members of the Institute Staff or other authorities.

In the pamphlet which contains the Talk the reading assignment for the following two weeks is suggested. On receiving the fortnightly instalment of new material, the subscriber will ordinarily read the Talk before taking up the reading assignment, and thus get a bird's-eye view of the ground that is to be covered during the succeeding two weeks.

Some of the subjects discussed are:

_The Shortest Way to the Executive's Chair_ _The Market Value of Brains_ _Sharing the Product_ _Pitfalls of Partnership_ _A Corporate Venture_ _Putting the Message Across_ _The Dominance of Salesmanship_ _Leading the Sales Force_ _Credit, the Motive Power of Business_ _Cost Records as Profit Makers_ _Overcoming Corporation Difficulties_ _The Hundred Thousand Dollar Letter_ _Making Advertising Pay_ _The Railway a Public Servant_ _Building Up Your Bank Credit_ _Cashing in on Foreign Trade_ _Safeguards of Insurance_ _What Do You Know About Wall Street?_ _The Benefits of Speculation_ _Capitalizing the Auditor's Viewpoint_ _Basing Decisions on Facts_ _Reading Accounting Records_ _Saving Salesmen_ _Holding the Watch on Your Investment_ _Satisfying Your Foreign Customer_

3--Lectures

The written Modern Business Lectures, which are sent to subscribers monthly during the two-year Course, have been especially prepared for the Institute by eminent business executives, publicists and accountants, and reflect the experience of these men in successfully handling business problems.

They are intended, first, to show how these men have actually applied the principles discussed in the Modern Business Course; second, to give further information as to large and highly developed business concerns and their methods; and, third, to bring subscribers into closer touch with the wide circle of representative, successful men of affairs.

Some of the subjects of the Lectures are:

_Essentials of a Successful Enterprise_ _The Value of Trade Associations_ _Marketing a Nationally Advertised Product_ _Retail Store Management_ _The Creation of a Selling Organisation_ _Efficient Credit Management_ _Organising an Accounting Department_ _Cost and Efficiency Records_ _Marketability of Securities_ _Building a Mail-Order Business_ _Elements of Effective Advertising_ _The Railway as a Business Developer_ _Selling in Foreign Markets_ _How Banks Serve Business_ _The Foreign Exchange Field_ _The Day's Work in Wall Street_ _Why Business Needs the Auditor_ _The Investment Security Business_

4--Problems

One of the strongest features of the Course is the series of twenty-four Problems--such problems as accountants, financiers, bankers and business managers meet in practice--especially prepared for the Course by members of the Institute Staff.

Each Problem is a carefully worded statement of all the essential factors in some business situation; in other words, the situation is presented and described just as it might be in the report of a subordinate official to the head of a business enterprise. The Problems are so arranged as to correspond closely to the assigned reading. For instance, after the subject of cost accounts has been discussed, a Problem is given in which a knowledge of cost accounting principles is called for. Thus, the Problems serve not merely to test the subscriber's understanding and thinking power, but also to fix in his mind and make definite the statements and principles contained in the Text volumes.

When solutions to the Problems are sent in, they are criticised, graded, and returned with suggestions for further study. Solutions to the Problems are not, however, required. Some of the titles are:

_The President's Choice_ _Advertising the Ayer-Hall Saws_ _Remodeling the Rowland-Johnson Company's Sales Organization_ _A Question of Profits and Financial Condition_ _Three Foreign Exchange Situations_ _Scudder's System to Beat the Market_ _The Reorganisation of the Industrial Realty Company_ _Embarking in Foreign Trade_ _A Fire and Its Consequences_

5--Monthly Letter on Business Conditions

A business executive must have a knowledge of the fundamental principles relating to the internal organization and management of a business.

He should also have a basis of judging those external business conditions over which no one group of men has control, but to the trend of which every line of business must be adjusted in order to gain the maximum of profit and suffer the minimum of loss.

The results of these studies are presented to the business man in a clear and concise manner in the Monthly Letter on Business Conditions.

In order to keep subscribers informed regarding the state of business at home and abroad, and as a basis for applying the principles explained in the Text, the Monthly Letters will prove most helpful. The economic experts of our Business Conditions Bureau are constantly bringing together and interpreting facts and figures regarding bank clearings, pig iron production, unfilled steel orders, exports and imports, railroad earnings, and such indices of financial conditions as the reserves, loans and deposits of the Federal Reserve Banks.

The letters discuss political events and developments in the business world which have an influence upon price movements and conditions of activity or depression. The business man will find them particularly interesting, as they show him what to expect in the future by pointing out the present trend of affairs.

6--Financial and Trade Reviews

The Financial and Trade Reviews are issued monthly by our Bureau of Business Conditions and are designed to cover in a timely and interesting fashion the activities in the security market by analyzing individual and group securities and by presenting statistics on prices and earnings of standard stocks and bonds.

The Reviews cover the production and price trends of basic commodities and matters of interest in foreign fields. Leading articles deal with current events of note and interest to the business community.

The Financial and Trade Review is a valuable supplement to the principles brought out in the regular reading schedule.

7--Modern Business Reports

The Modern Business Reports are written by professional and trade experts and members of the Institute Staff, and cover both important business problems of general interest and technical subjects relating to Accounting, Sales, Office Methods, Merchandising, Production and other specialized departments.

From time to time a descriptive list of these Reports is sent to each subscriber. From these lists the subscriber may choose four Reports at any time during the two-year period of his enrolment.

These Reports run from ten to fifty pages in length. Each one is prepared in reference to some specific problem and is the result of special investigation. The subjects cover a wide field, and every subscriber will find among them a number which are of particular interest to him.

The list of Reports includes such titles as:

_Preparation for the Accounting Profession_ _Profit Sharing_ _Territorial Supervision of Salesmen_ _Advertising American Goods in Foreign Markets_ _Analysis of Bank Reports_ _Promotion and Organization of a Public Service Corporation_ _The Psychology and Strategy of Collecting_ _Desk Efficiency_ _How to Read the Financial Page of a Newspaper_ _Employes' Pension Systems_ _Evaluation of Public Utilities_.

8--Service

The reading matter of the Modern Business Course is in itself of remarkable value; subscribers have told us over and over again that one volume, or sometimes one pamphlet, or one Report, has brought them ideas worth vastly more than the fee for the Course and Service.

This value is largely enhanced by the fact that back of the reading matter there is an organization of men who are anxious to cooperate in every way possible with each subscriber. This organization is equipped to render service at every stage of the subscriber's progress.

First of all, certain members of the Staff are assigned to the pleasant task of carrying on correspondence with subscribers. They make an earnest effort whenever a new enrolment is received to get into touch with the subscriber and learn under what conditions he is working, what experience and education he has had and what objects he has in view. With this information before them they can often make suggestions that are directly helpful and that mean a larger increase in the subscriber's personal benefit from his use of the Course and Service.

Furthermore, every one who thinks as he reads comes across statements and opinions which he does not fully understand or which he questions. The privilege of asking about any such statements or opinions is freely open to all subscribers. There is no limit whatever to the number of questions which may be submitted, based on the Text or other reading matter of the Course.

The four great activities of business

There are four fundamental activities in every business--Production, Marketing, Financing, and Accounting.

On the following page you will see the whole field of business charted in such a way as to show clearly the relation of various business activities to each other. Economics, the study of business conditions and business policies, is the hub of all business activity. Radiating from it are the four grand divisions of business--Production, Marketing, Financing, Accounting. These in turn are subdivided into the more detailed activities which they include.

The Modern Business Course and Service is a thorough treatment of all the divisions indicated.

A Survey of Modern Business Science

All business activities may be classified under Production, Marketing, Financing and Accounting. For purposes of systematic study, each of these may be subdivided as shown above.

In addition, there are two important forces which control business--Man and Government. For that reason a discussion of the relation between "Business and the Man" and "Business and the Government" naturally forms a part of the survey of modern business. The first two and the last two assignments in the Modern Business Course and Service cover these important subjects.

The arrangement of the subjects has been carefully planned so that the maximum benefit will be derived by following the assignments in their regular order. In the chart you see the logical arrangement of these subjects as related to the business world. Note that the order in which these subjects are treated in the Course is not according to their arrangement in the chart. On the contrary, the more general subjects are first considered; then come the more complex--the specializations and enlargements upon the foundation subjects. This plan permits a progressive arrangement that makes for a broad understanding of the science of business.

Just as any university or college requires a knowledge of certain subjects before others can be taken up, because this more general knowledge is essential to a proper understanding of the more advanced, so we have arranged the subjects treated in the Modern Business Course and Service in a similar manner.

Texts, Talks, Lectures, Problems, Monthly Letters, Financial and Trade Reviews, Reports and Service--these are the important features of the Modern Business Course and Service.