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PROBLEMS OF THE AGE
Dealing with Religious, Social and Economic Questions and Their Solution.
A Study for the Quorums and Classes of the Melchizedek Priesthood. 1917-1918.
By Dr. Joseph M. Tanner
XVI. – Financial Respectability
Definition. – What is financial respectability? It is demanded and must be defined. Each has, perhaps, his own interpretation, though he may be actuated very greatly by public opinion and his social business life. Practically, it consists of a man’s business activities, – what he does, – and is not always governed by what his balance would be if he were forced into liquidation. Appearances, however, he must maintain. Should he have an auto, should his home life be based upon some good round sum of money for a residence, and is it necessary to know how much he owes?
Credits. – One thing is certain, however. Our credit system is enlarging by leaps and bounds. It touches almost every man in business life. The farmers owe their billions. Also the merchant. All are dependent upon our banking system and their credit at the bank is of course an important asset.
Financial respectability, however, is setting higher and higher yearly its social standards. It brings along in its train envy, jealousy, and often bickerings. National jealousy and rivalry had much to do with the present war. If such rivalry is dangerous to the nation at large, it is also dangerous to the individual. Should a panic follow the present period of expansion and extravagance it would be more ruinous than anything which the world has ever heretofore experienced. A post-war panic is quite a probability. It will be a miracle if we escape it, and now while times are good and money plentiful is a good time to establish ourselves for coming events.
Methods. – The problems which today affect us are the methods of financial gain. The advice of the father to the son, if it ever holds good, holds good now more than ever: “Get money. Get it honestly, if you can, but get money.” In such an age as we now have it is almost possible to do business, to launch an enterprise, without capital; and that means, of course, in ninety-nine cases out of a hundred, credit. There are some aspects, however, of the financial fever from which we are suffering that deeply concern the Latter-day Saints. It should be stated that the credit system is in itself dangerous. Men start by borrowing for the needs of their business. Money at hand then leads them into extravagance. They take bounds and are unable to recover themselves and there are literally millions throughout the United States over whose financial head the sword of Damacles hangs.
Psychology of Business. – We have also what ;might be called the psychology of business. This consists of a certain training and a certain instinct by which men are not only able to judge others, but by which they are able, by their persuasions, to convince. In other words, people are often literally talked out of their money. People’s peculiarities are played upon. Advantages are taken of their frame of mind and enthusiasm is promoted by a class who understand the method of its creation. In this condition of business life exaggerations, if not right down falsehoods, are growing altogether too common.
A man in Salt Lake City was called into an office some time ago by a gentleman who had a wonderful invention to show his friend. It was a railroad signal apparatus which, according to his representation, every railroad in the country was anxious to get hold of. The agent was very enthusiastic, pleasing in his demeanor, and convincing in the tones of his voice. He boldly declared that he would guarantee his friend that inside of six months he could double his money.
The man from the street was not without some experience. He said he thought he would take a block of that stock and the agent was then, of course, anxious to know how many thousand dollars he wanted. He could have any amount. But his friend said, “I would like to know who the guarantors are to be, – whether they are able to respond to the guarantee in case your representations do not prove true.” Of course, that ended the effort. The agent’s declarations of guarantee were given for psychological effect. They were not to be taken literally.
Today we have all sorts of promoters, especially in the organization of corporations. They exploit the people, sell many thousand dollars worth of stock, and too often it turns out that the whole business was only a psychological enterprise.
Mining Exploitations. – Perhaps one of the most fertile fields of exploitation is to be found in mining stocks. I quote from Collier’s editorials, edited by Mark Sullivan:
Have you bought mining stocks? Sell them. Offer them back to the man who sold them. Offer them at the same price. Offer them at ten per cent less. Offer them at twenty per cent less. This will accomplish your own disillusionment, and save you money, for you might have bought more. It will also effect exposure to the person who sold you the stock. Are you thinking of buying shares in Poodle-dog Inflated or Hoptoad Jump along? Don’t. And this “don’t” is without qualification of any kind. To women chiefly, wives of husbands of the high wage-earning class, this paragraph is commended. Not that it is their folly we inveigh against. They are the ones who know the value of savings, and they may be in time to save a fatuous husband from an act of inexcusable folly.
If you are tempted by the full-page advertisements published by the newspaper partners of mining swindlers, don’t! if some acquaintance is urging you to buy shares, he either profits by the sale or is himself deceived. Daniel Guggenheim is the greatest miner in the world. He and his six brothers own mines that aggregate a billion dollars. That family knows more about mines than most of the rest of the world combined. The other day Mr. Guggenheim uttered a solemn warning against “the flimsy character of the mining stocks now finding a ready market.” “One in three hundred,” he said, “is a conservative estimate of the proportion of prospects that eventually fulfil their promise.” Within a week after he uttered that warning Mr. Guggenheim made pubic announcement that he had himself been caught. He had bought a famous and widely-talked-of mine; and when he discovered he had been deceived, he backed out of the trap at a cash loss of $2,500,000.
Facts that Read Like Fairy Stories. – That which gives zest to the psychology of business is the wonderful stories that agents have about the marvelous gains of men who have entered into various classes of enterprise. Some of them read like fairy stories. It is often said that more gold and silver are expended in the quest for gold and silver mines than is taken out of them.
As a rule, corporations are not satisfactory unless a man has some voice in their guidance. The mere love for gain becomes very sordid when with it there is no intelligent direction of the means by which it is obtained. In large corporations the ordinary stockholder has nothing to say. He may be squeezed out in time. Some of these companies are bona fide and have a pride in promoting the interest of their stockholders. On the other hand, there is a multitude of them that exploit the public by one means or another, get control of the stock, take its profits sometimes by enormous salaries which are paid to its manager and directors. They regulate the dividends in their own interest. Such are often the dangers of new corporate bodies and it is, of course, always safer to invest in well established companies. I quote again from Collier’s:
It has been estimated that a man who, in the early nineties, subscribed to one share of stock in Mr. James J. Hill’s Great Northern Railway and has kept it ever since, has made in the intervening fifteen years, in cash dividends and ‘privileges’, a profit of over nine hundred per cent. The best that could have been done by a workman on Mr. Hill’s railroad, who put his earnings in a savings bank for the same period, would be less than one hundred per cent. Mr. Forrest F. Dryden, a son of the President of the Prudential Insurance Company, stated under oath that one of the owners of that company who, in the late seventies, paid in, in cash, $2,200, had made a profit, twenty-five years later, of $327,163.60. The rate of profit in this case is 14,800 per cent – a rate which must seem colossal to the policy-holder who has taken advantage of the savings feature of that company and bought an endowment policy. For the policy-holder has never received as much as four per cent.
Talents Sacrificed for Financial Gain. – The present glamour of financial standing in the world is leading many of our young people away from those careers in life which their talents best fit them to pursue. Today very many of the very best teachers we have in the Church and State are leaving the school room because of “financial inducement.” Our political system does not repay our highest and best talent. Many of our young men would make most competent physicians and surgeons, attorneys, agriculturists, and stock men, and thus benefit the world by reason of their superior productive powers. They do not respond to their inborn qualities of life. The love of money compels them to bury their God-given talents. Again from Collier’s:
Recently a young and successful banker withdrew from his firm to accept an appointment as an assistant in a department in our oldest university. The banking career, of course, would have been vastly more remunerative in money. Moreover, the bank was a family institution, and there was every inclination of pride and tradition against leaving it. It strikes us as a fine thing to have done. Possibly we would all be better off if business in this country were less remunerative as compared with other careers. If business did not offer a reward so vastly greater in money, young men choosing their careers would feel more free to follow their natural talents toward the arts or toward other careers. One of the most successful bankers in the United States would have been a very great musician if he had felt free to follow his tastes. In spite of the disparity of the money rewards, more and more men are realizing that money is not to be weighed against what President Eliot once called “the durable satisfactions of life.” Among these durable satisfactions, congeniality of work is one of the most important.”
It is unfortunately true that men have lost much of the spirit of stewardship. They do not hold in trust as those responsible to God for beneficent use of means at their command, and there are direct temptations in financial enterprise that are too severe for many to overcome.
Revelations. – “Verily, verily, I say unto you, wo be unto him that lieth to deceive, because he supposeth that another lieth to deceive, for such are not exempt from the justice of God” (Doc. and Cov. 10:28).
“And again, I will give unto you a pattern in all things, that ye may not be deceived, for Satan is abroad in the land, and he goeth forth deceiving the nations” (Doc. and Cov. 52:14).