limited in amount so as to secure the largest number of stockholders-came in freely to the full amount required. All the requisites of success seemed assured. The enterprise was most promising, the directors of the new concern were successful men of business, and sufficient capital for its development was in hand. In addition to this the large number of stockholders of known buying power were pledged to the support of the new undertaking.

The next step was the selection of a manager for the new grocery, and here the first false move was made. The directors of the enterprise decided that it should not be necessary to pay more than $20 a week for their manager. This was before the war had increased salaries so materially, but even then the amount decided upon was entirely inadequate. Capable managers are not numerous at the best, and when found are usually already firmly attached to some good business which objects strenuously to the loss of its manager. To "pry them off" requires some inducement really worth while. In the eyes of the directors of the new store, however, the managerial problem was so simple as to require little ability. The clientèle was already secured in the persons of its stockholders; no advertising was required because these customers would come themselves and bring others with them; the terms were cash and the store would make no deliveries. All then that was required of the manager was the maintenance of an adequate supply of groceries to be handed over the counters to the customers as they came for them. Why should they pay a high price for "cut-and-dried" work such as this?

A manager was finally found and engaged. He was probably as good a manager as could be had for the price, but the new enterprise was in trouble almost from the day it opened its doors. The store was not always as clean and bright as it might have been, the stock of goods was not kept up properly, quality was not uniform, prices paid for goods were apt to be higher than they should be, doubtful experiments were tried, customers did not always

receive proper attention. The result was much dissatisfaction among purchasers, and sales and profits below expectation.

Evidently the manager was not the man for the place and the directors decided to try again, increasing the salary paid but still not to the figure that might have secured a good man. The results were much the same. Finally, as the outcome of experience, a manager of ability and experience was engaged at a salary of $40 a week. This was a fair salary for that pre-war period and at last the store was reasonably well managed. By this time, however, some years had elapsed and the store had alienated so much of the good-will with which it had started, and become so involved financially, that the new management was unable to turn the tide. Finally, to avoid disaster, the business was sold with a loss to the stockholders of every dollar invested.

Good vs. Bad Management

A striking and well-known illustration of the differing results of good and bad management is afforded by the history of the A. T. Stewart department store of New York City. Founded by Mr. Stewart, it rose under his personal supervision from a little "joblot," hand-to-mouth establishment to the position of the largest and most popular department store in the country. It was known in every part of the United States-almost as well as New York City itself—and its proprietor became a multimillionaire.

Upon Mr. Stewart's death the store was taken over by one of his associates not well versed in business affairs. As one of the first steps of the new management, the well-known and, from a business standpoint, immensely valuable name of A. T. Stewart was dropped completely. Other changes were made, and the course of the magnificent business was diverted from the upward to the downward grade, resulting finally in its financial involvement and the discredit and retirement of those in charge.

The business then came under capable management in the person of John Wanamaker. The intervening régime was ignored,

the new owner announcing himself upon the store signs and in his advertising as "Successor of A. T. Stewart & Co." The course and policy of the business were altered, its scope extended, more efficient methods were introduced, and the business responded from the day the changes were made. It never regained its position as the leading business of its kind in the country, but it now is one of the largest, best-managed and most successful of modern department stores.

Good Management in the Newspaper Field

A better illustration of the results of good and bad management could hardly be found than the history of the New York Times. Less than twenty-five years ago Adolp Ochs, its present publisher, was in charge of the Chattanooga Daily Times, a fairly profitable small-town publication. It had, however, apparently reached its limit, and Mr. Ochs decided to sell his Chattanooga paper and come to New York. Here the possibilities of the New York Times-which at the time was in debt to the amount of $300,000 and still losing money-attracted his attention. What Mr. Ochs did is best told in his own words:5

The New York Times then had a net paid daily circulation of 10,000, its advertising patronage was small, its competitors prosperous and in strong financial hands.

I was thought to be a bold man, with more money than brains; a "jay come to town"-and it was prophesied that my metropolitan career would be short, while speculation of all kinds was indulged in as to whom and what I represented, and whose money was being sacrificed.

Now, right here I wish to make a statement of interest to those of the curious who may wish to know how I came into possession of the controlling and majority interest of the New York Times. I shall make no new disclosures, for the facts were not only known at the time, but widely published, and they are as follows:

The George Jones Estate sold in 1893 the name and good-will

5 From an address delivered before the National Editorial Association, June 21, 1916.

of the New York Times for $1,000,000 cash to the New York Times Publishing Company, a company made up largely of a number of very well-known men, actuated by the highest motives to preserve the Times as an independent Democratic newspaper. The panic of 1893 and insufficient capital proved too great a burden, and the company came to grief in 1896. It was then I became acquainted with the situation and was encouraged to grapple with the problem that many well-known and experienced publishers declined to tackle. Perhaps it was a case in which fools rush in where angels fear to tread. Part of the simile is true, for I certainly had no “angel” with me.

I organized a company under a new charter-the present New York Times Company-with 10,000 shares capital stock (par value $100) and $500,000 5 per cent bonds; took up the million dollars of stock of the old company by giving in exchange 2,000 shares of the new company; paid the debts of the old company dollar for dollar with $300,000 of the 5 per cent bonds; and with some difficulty sold the remaining $200,000 of bonds at par for cash by giving to every purchaser of a $1,000 bond 15 shares of stock as a bonus. I subscribed for $75,000 of the bonds and received 1,125 shares of stock as a bonus, and—as was stipulated in the articles of the organization plan-I received 3,876 shares of the capital stock as compensation when three years after its organization the company was placed on a paying basis. The value placed on the shares shortly after I assumed the management was indicated by a sale of some of them at 10 cents on the dollar.

So in this way I acquired the control, the majority stock of The New York Times Company (5,001 shares), as the result of my work and the investment of $75,000 in its bonds. And this majority and controlling interest, somewhat increased, I now own and possess, free, clear, and unencumbered in any shape, form, or fashion. Adding to my interest the shares held by others, there is nearly 90 per cent of the capital stock of The New York Times Company owned in the office of The Times by persons solely employed in producing The Times.

I have never had any partners and there has never been anyone who had control of, or voice in my affairs, or who in any form could affect my entire freedom of action. We have been conducting a very large and rapidly developing business, having invested over $4,000,ooo in real estate, and more than $1,000,000 in printing machinery. There has, of course, been much financing to do, but it has been done without, in any instance, by word or deed, by understanding or im

plication, involving the attitude of The New York Times toward any man or interest, any measure or purpose.

...

You may be interested in knowing what has been the practical result of applying the principles suggested at St. Paul twenty-five years ago for the publication of a newspaper in a great city."

Twenty years ago The New York Times, as I have said, had scarcely 10,000 daily circulation; today its net paid circulation exceeds 325,000. The gross annual income of The New York Times in 1896 is now exceeded every month in legitimate income from advertisements and circulation.

One of the greatest factors in achieving this result was not mentioned--because not then fully appreciated-in the St. Paul catalogue of the qualifications required successfully to manage a daily newspaper. It was a great omission, as my years of experience have taught me, and I wish now to add it and give it the utmost emphasis by marking it "top of column": and that is, that the successful manager should have the ability to judge and appreciate other men's qualifications, to secure their assistance, and to win and retain their respect and confidence in his plans and good intentions. . . . for then only he will secure the best service they are capable of performing, and his publication will transmit this excellence to the reader and translate it into good-will. In other words, a newspaper's reputation is created in its own household.

When Mr. Ochs took hold of the New York Times its value is indicated by the fact that it was sold for one-fifth of the capital stock of a new company whose only real asset seems to have been Mr. Ochs-and his value as a newspaper manager was not then so well known as it is today. At the present time the New York Times is financially a brilliant success and from the viewpoint of standing and influence ranks as one of the leading newspapers, not only of the city of New York, but of the civilized world. A more striking and significant example of the results of good management, following so closely as it did on the heels of bad management, would be hard to find.

An address delivered by Mr. Ochs in 1891 before the National Editorial Association in which is given a very complete statement of the qualifications necessary for the successful management of a daily newspaper.