The Human Side 
 o|^ Business 
 
 Frederick Peirce 
 
Hutt (JJnlbgE xxf Agriculture 
 
Cornell University Library 
 HF 5438.P4 
 
 The human side of business, 
 
 3 1924 013 823 236 
 
Cornell University 
 Library 
 
 The original of tliis book is in 
 tlie Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924013823236 
 
THE HUMAN SIDE OF BUSINESS 
 
The Human Side 
 of Business 
 
 By 
 
 Frederick Peirce 
 
 B. S. E., Wharton School of Finance and Economy, 
 University of PennsylvEinia ; Formerly Vice-Presi- 
 dent, for eleven years Manager of the Philadelphia 
 Office and subsequently General Sales Manager of 
 N. W. Halsey& Co. of New York; Senior Member of 
 Frederick Peirce & Co., Philadelphia. 
 
 Published by 
 The Investment House of 
 
 Frederick Peirce & Co. 
 
 Philadelphia 
 
 1917 
 
@ 
 
 H F5^ 3B 
 
 Copyright 1917 
 By Frederick Peirce & Co. 
 
 Pteuol 
 
 The John C. Winston Co. 
 
 Philadelphia 
 
CONTENTS 
 
 CHAPTER PAGE 
 
 Introduction 9 
 
 I. The Bond Business 13 
 
 II. The Bond Market 18 
 
 III. The Bond House 26 
 
 IV. Salesmanship 36 
 
 V. Material for Salesmen 44 
 
 VI. Employing Men 61 
 
 VII. Training Men 72 
 
 VIII. Personal Sales Management 82 
 
 IX. The Development of the Bond 
 
 Business 96 
 
 X. Sales Methods and Ammunition. 116 
 
 XIv Selling Country Trade 133 
 
 XII. The Personal Side of Selling .... 151 
 
 XIII. Advertising and Advertising De- 
 
 vices 184 
 
 XIV. Fifty Financial Facts 195 
 
 XV. Tendencies of the Business 208 
 
 XVI. Conclusion 214 
 
 (7) 
 
INTRODUCTION 
 
 Every person who works for a livelihood 
 has something to sell. This is a fact not 
 usually realized by those concerned, yet a law- 
 yer barters his services, a physician his profes- 
 sional skill, a manufacturer his product, an 
 actor his power to entertain, and a mechanic 
 his technical labor. Whether one be a vender 
 of goods, services, knowledge, ability or credit, 
 it is self-evident that to obtain the most remu- 
 nerative results he must make the proper pre- 
 sentation of what he has and the most effective 
 use of his natural talents. 
 
 Since human nature is the same the world 
 over, it follows that the personal methods 
 which are productive in one instance will be 
 in another, and that there are certain under- 
 lying principles that can be commonly applied. 
 The libraries are well stocked with business 
 literature, but the fact remains that nearly all 
 of the available publications are so general in 
 character that they have little tangible value 
 or else are so technical that they are of use only 
 in special lines. 
 
 The purpose of this book is to portray a 
 phase of business that, from a practical point 
 of view, is more important than all the others. 
 
 (9) 
 
10 INTRODUCTION 
 
 It is the human side, whether it be called the 
 psychology of salesmanship, the personal equa- 
 tion, or the fourth dimension, and it is particu- 
 larly well illustrated by one specific business, 
 — the marketing of bonds, because the latter 
 appeals directly to the mental processes and is 
 the highest type of salesmanship. The plan, 
 then, is to explain the personal methods which 
 were used effectively in building up a domi- 
 nant organization, with the idea that they are 
 capable of adaptation, and if in this attempt 
 the writer digresses somewhat from the direct 
 path or appears to draw too frequently upon 
 his own experience, it is to give a concrete view 
 of the subject and for the sake of clearness. 
 
 In the training of bond men there has long 
 been felt the need of a real handbook relative 
 to the subject, — one that adequately treated of 
 personality in selling and of the means that 
 should be employed to develop an intimate and 
 profitable relationship between salesman and 
 customer; that set forth the broad field open 
 to individuality and explained the most effec- 
 tive courses of thought and action; and that 
 would make men realize that in themselves lay 
 the opportunities they sought and would en- 
 thuse them and inspire them to greater effort. 
 
 In the Spring of 1913 the writer adopted the 
 
INTRODUCTION 11 
 
 plan of employing simultaneously a number of 
 inexperienced men as raw material for sales- 
 men. Theretofore the training of two or three 
 individuals at one time was comparatively sim- 
 ple on account of the possibility of giving per- 
 sonal attention to each one but with the advent 
 of a larger group, this method became imprac- 
 ticable and the necessity arose of finding some 
 way of training men wholesale. The experi- 
 ment was therefore tried of collective coaching 
 through a course of ten lectures of a very prac- 
 tical nature given by the writer and various 
 members of his organization. They were in- 
 formal in character, for the most part extempo- 
 raneous, and were reported stenographically. 
 
 As these talks were somewhat different from 
 the usual type of financial exposition and far 
 more interesting, extracts are given here from 
 the four least technical ones, and each is repre- 
 sented by a chapter. Attention was paid to 
 neither rhetoric nor diction, but simply to a 
 clear and forceful presentation of the subject. 
 Furthermore, some of the continuity was lost 
 by the speakers being interrupted with ques- 
 tions and by the inability of the stenographer 
 to take down the discussions accurately and in 
 their entirety. The first one (Chapter IX) was 
 delivered by the writer and the other three 
 
12 INTRODUCTION 
 
 (Chapters X, XI, and XII) by members of his 
 staff on outlines which he prepared, and all of 
 them were edited by him, as well as was possi- 
 ble to do from the stenographer's notes with- 
 out spoiling the directness of speech of the 
 lecturer. 
 
 Incidentally the three chapters named show 
 how certain men, without previous knowledge 
 of the business and with limited experience, by 
 being coached in accordance with well defined 
 methods and a consistent policy, developed 
 into three of the most successful salesmen of 
 the time. Each had naturally found his own 
 way of expressing himself but the fundamen- 
 tal training underlying the experiences given, 
 was the result of patient tutoring and carefully 
 conceived plans. 
 
 The ideas outlined herein are not the fruit of 
 idle speculation but the result of close applica- 
 tion over a period of fourteen years during 
 which the writer advanced from the lowest po- 
 sition to the highest, in the second largest bond 
 distributing house in this country. So while 
 this book falls far short as a literary work, it is 
 based upon broad, practical experience and on 
 that account may help to supply an existing 
 deficiency, 
 
 Frederick Peirce. 
 June 1, 19 17. 
 
CHAPTER I 
 THE BOND BUSINESS 
 
 According to the accepted economic defini- 
 tion all goods, property and commodities con- 
 stitute wealth. The latter is divided into two 
 classes. The first is unproductive and includes 
 undeveloped real estate, residences, pleasure 
 cars, works of art, and all articles used or con- 
 sumed in the comfort and enjoyment of man- 
 kind. Such things have both actual and ex- 
 change value but since they do not in them- 
 selves contribute to the increase in the world's 
 stock of goods, are simple wealth. The second 
 or other class includes factories, machinery, 
 railroads, ships and all property which in any 
 way aids in the manufacture or creation of ad- 
 ditional commodities. It is productive wealth 
 or capital. Capital, then, is that part of wealth 
 which is used to produce other wealth. This 
 use may be either by its owner or by some one 
 else to whom it is loaned. Therefore one man's 
 wealth may serve as another man's capital. 
 
 Since all goods can not conveniently be 
 passed from hand to hand, from one owner to 
 another, or from a lender to a borrower, it is 
 
 (18) 
 
14 THE HUMAN SIDE OF BUSINESS 
 
 necessary to have a recognized standard of 
 value or medium of exchange. Owing to its 
 superior advantages this standard, in practi- 
 cally all civilized countries, is gold. For the 
 purposes of appraisement, exchange or loan, 
 then, wealth is expressed in terms of the gold 
 dollar or its equivalent. 
 
 Because capital has the power of reproduc- 
 tion its use has an exchange or rental value 
 which is called interest. The productivity of 
 capital depends upon the efficiency with which 
 it is employed. Consequently the rate of inter- 
 est that may be charged is based upon the rela- 
 tive productivity of capital at a given time in 
 conjunction with the degree of risk to which it 
 may be subjected. 
 
 Capital that is loaned is usually evidenced 
 by interest bearing obligations such as notes or 
 bonds. If, on the other hand, it is supplied by 
 two or more owners jointly, and used by them 
 directly it is generally represented by partner- 
 ship shares if the association is unincorporated, 
 or if incorporated, by evidences of proportion- 
 ate interest called stock certificates. The stock- 
 holder is an owner and entitled to profits or 
 dividends if earned, while the bondholder is a 
 creditor and entitled to interest on the money 
 he has loaned. 
 
THE BOND BUSINESS 15 
 
 Since the bondholder is a creditor, he has 
 first claim on the assets up to the full amount 
 of his claim and in accordance with the terms 
 of the agreement. He likewise has first call on 
 the surplus earnings from operation up to the 
 amount of the annual interest accruing to him, 
 and to the amount of his principal at the ma- 
 turity of the loan. The stockholder assumes 
 the operating risk but is entitled to the profits 
 of the business after the claims of the bond- 
 holder are satisfied. 
 
 Surplus wealth accumulates most rapidly in 
 the older, richer and more developed sections 
 of country or lines of industry where it is least 
 needed. Its tendency there is to become less 
 productive or idle and its loan value or rate 
 of interest to decline. Capital is in greatest de- 
 mand in the newer and undeveloped places or 
 industries where there has been least oppor- 
 tunity for surplus wealth to accumulate. On 
 account of the profitableness with which it can 
 here be employed, the tendency is for its loan 
 value to increase. Capital is constantly seeking 
 investment opportunities and vice versa. Sup- 
 ply and demand tend to equalize and the result- 
 ant is a normal rate of interest. This equilib- 
 rium is often upset by abnormal conditions. 
 Thus when the supply of available funds ex- 
 
16 THE HUMAN SHJE OF BUSINESS 
 
 ceeds the demand, interest rates decline and 
 when the demand exceeds the supply, interest 
 rates rise exactly as does the cost of commodi- 
 ties under similar conditions. However, every 
 action in one direction must inevitably be fol- 
 lowed by a proportionate reaction or compen- 
 sating movement and the normal is reached 
 whenever the opposing forces approach a 
 balance. 
 
 The development of the natural resources of 
 a country and the creation and expansion of 
 large agencies of production and distribution 
 are usually financed largely through the use of 
 borrowed money. It is seldom that any public 
 or private corporation is able to provide its cap- 
 ital requirements from its own revenues. 
 Stockholders or owners of railroads and indus- 
 trial concerns sometimes advance part of the 
 funds needed but usually outside sources must 
 be drawn upon. The bond business supplies 
 the machinery through which this is done. 
 Through it unemployed capital becomes a pro- 
 ductive force; and surplus wealth is transferred 
 from the place where it has accumulated and 
 become impotent to the place where it contrib- 
 utes directly to the creation of other wealth. 
 The demand for suitable investments is just as 
 insistent as the demand for capital, and the sat- 
 
THE BOND BUSINESS 17 
 
 isfying of this demand means the procuring of 
 securities that are both safe and profitable. 
 Thus the bond business has a double duty and 
 performs a double service — providing capital 
 for those who need it and supplying safe in- 
 vestments to those who require them. One 
 function is the complement of the other and 
 the failure of one means the failure of both. 
 
 The bond business is not a parasite in the 
 economy of commercial and industrial prog- 
 ress. It occupies a position that is not only in- 
 dispensable but one of the most important in 
 modern life. 
 
CHAPTER II 
 THE BOND MARKET 
 
 The average man probably thinks of the 
 bond market as a circumscribed place or dis- 
 trict where millionaires and bankers meet and 
 carry on their negotiations for the purchase 
 and sale of securities. Those of some financial 
 experience may have a mental picture of a 
 group of such districts located at points widely 
 separated geographically, such as the various 
 larger cities, but connected by a network of 
 private wires and bound together by a com- 
 munity of interest as inseparable as that which 
 ties together the various units of a legally 
 divorced, modern industrial corporation. Still 
 other people think of the bond market as being 
 confined to the New York Stock Exchange and 
 the few outside exchanges that follow its lead. 
 Not one of these conceptions does justice to the 
 enormous aggregation of wealth, and the great 
 army of investors that constitute the real 
 present day bond market, an institution that 
 extends from ocean to ocean and from conti- 
 nent to continent, and embraces in its vast 
 membership people of every nationality, of 
 
 (18) 
 
THE BOND MARKET 19 
 
 every color and of every degree in the social 
 and economic scale. It is not exaggeration to 
 say that wherever civilized people are found, 
 there is the bond market. The financial dis- 
 tricts are merely the focal points, the centers of 
 influence and the clearing houses where the 
 lenders and the borrowers meet through the 
 aid of bankers, brokers and bond houses. 
 
 In this country (to which the present discus- 
 sion is confined) an overwhelming percentage 
 of the bond buyers is composed of people of 
 moderate means. While the aggregate annual 
 purchases of institutions and wealthy individ- 
 uals reach an almost incomprehensible amount, 
 it is doubtless true that the average sale of 
 bonds for investment is in the neighborhood of 
 only three thousand dollars. Likewise, the 
 personal property of a large proportion of the 
 bondholders amounts to less than twenty-^five 
 thousand dollars per person. Statistics on this 
 point are not available and probably do not 
 exist, but these estimates are based on a study 
 of many thousands of transactions that have 
 come under observation. 
 
 Investment specialization is probably the 
 most pronounced characteristic of the bond 
 market. Buyers may be classified according 
 to their requirements. The latter may be com- 
 
20 THE HUMAN Sn>E OF BUSINESS 
 
 pulsory by statute or voluntary according to 
 the knowledge, whim or taste of the individual. 
 While it is impossible to be familiar with all the 
 various conditions and the legal restrictions 
 existing in the different states, a general dis- 
 cussion of the subject with a few illustrations 
 will indicate the many sides of the bond market 
 from the buyer's point of view. 
 
 Insurance companies, particularly those writ- 
 ing life policies, annually absorb a large vol- 
 ume of securities. Each state has its own laws 
 governing the investment of the capital and 
 surplus funds of such companies. Usually the 
 statutes are quite specific in the matter of cap- 
 ital investment and it is not unusual for it to be 
 confined to the obligations of municipalities 
 located in the states in which the companies are 
 domiciled. Fire, accident and casualty com- 
 panies are generally allowed a little more lati- 
 tude than are life companies. With regard to 
 the investment of surplus funds and policy re- 
 serves, the directors or trustees are usually 
 given pretty free rein except that many states 
 require foreign companies to deposit with them 
 a certain amount of domestic securities before 
 writing any business in those states. However, 
 these special requirements affect only a small 
 percentage of the investing done by insurance 
 
THE BOND MARKET 21 
 
 companies and we find them buying large 
 amounts of municipal, railroad, public utility 
 and occasionally of industrial bonds. The pro- 
 portions vary according to local conditions and 
 to the preferences and experience of those upon 
 whom devolve the guardianship and protection 
 of the policy holders. To give a comprehensive 
 description of the laws of the various states 
 governing the investment of the funds of insur- 
 ance companies would require a book in itself, 
 and be quite beyond the intent of this discus- 
 sion. 
 
 Saving funds, that is savings banks without 
 capital stock, are restricted in their invest- 
 ments more than any other class of institu- 
 tions. These funds are largely confined to the 
 New England and the Middle Atlantic States 
 and the laws covering them are very specific. 
 With few exceptions they are required to in- 
 vest in real estate mortgages, high class mu- 
 nicipal bonds and the best of the steam railroad 
 securities. Many saving funds operate under 
 special charters which antedate the state laws 
 governing them. In Pennsylvania for exam- 
 ple, nearly every one has a charter issued many 
 years before the passage of the general act. 
 Institutions of this character are in the nature 
 of a charity in that they are not formed for 
 
22 THE HUMAN SIDE OF BUSINESS 
 
 profit. Therefore they are concerned more 
 with the matter of safety than they are with 
 the rate of interest. Savings banks with cap- 
 ital stock on the other hand are business cor- 
 porations and are governed by the same laws 
 as those which cover state banks and trust 
 companies. There are, however, compara- 
 tively few banks of this character as a large 
 proportion of state institutions operates under 
 trust company charters. 
 
 Trustees of estates are generally subject to 
 the same restrictions as those which apply to 
 saving funds and the requirements of any one 
 state are different from those of every other 
 state. The best and most comprehensive laws 
 are found in New York State and some of the 
 New England States, where definite rules are 
 laid down and within the prescribed limits, 
 trustees are allowed some latitude in their se- 
 lection of high class securities. In Pennsylva- 
 nia the law is archaic and a distinct handicap to 
 trustees^ as well as a hardship to the benefi- 
 ciaries for the only permissible investments are 
 real estate first mortgages and bonds of mu- 
 nicipalities located within the state. Conse- 
 quently a premium is placed upon municipal 
 bonds and mortgages of inferior quality, or 
 else an estate must be satisfied with a compara- 
 
THE BOND MARKET 23 
 
 lively low rate of interest. To avoid these two 
 extremes, many wills contain express provi- 
 sions waiving the law and relieving the trus- 
 tees of any responsibility for errors of judg- 
 ment. 
 
 Trust companies may invest in practically 
 anything they desire subject only to the super- 
 vision of the state banking departments in or- 
 der that their capital may not be impaired and 
 their deposits jeopardized. Some states require 
 that reserves must be maintained equal to a 
 fixed per cent of the deposits, and that these 
 reserves must be invested in certain specified 
 classes of securities. 
 
 National banks have almost as much latitude 
 as trust companies except that they are under 
 the direction of the Comptroller of the Cur- 
 rency, whose supervision is more strict than is 
 usually the case with state officials. Definite 
 rules, however, are laid down by statute with 
 regard to security for national bank notes, for 
 government deposits and for postal savings 
 funds. 
 
 The private investors or individual buyers 
 are greater numerically than all the various in- 
 stitutional purchasers of securities combined. 
 They constitute the great ultimate market, the 
 market that buys to hold. Banks and trust 
 
24 THE HUMAN Sn)E OF BUSINESS 
 
 companies as a general rule prefer to loan their 
 funds to their depositors — to "grant accommo- 
 dations" that will bring them additional busi- 
 ness. Outside of their reserves, they look upon 
 their bonds as liquid assets that can be con- 
 verted into cash whenever they find it of ad- 
 vantage to do so. Therefore they are usually 
 more interested in the ready marketability or 
 the possibility of profit of a bond than they are 
 in its permanent safety. Frequently they take 
 participations in new issues with the avowed 
 intention of reselling them whenever they can 
 obtain a profit even though in so doing they 
 place directly or indirectly upon the house of 
 issue the burden of remarketing the securities 
 at advanced prices. The individual investor, 
 however, except in rare cases, buys to hold, 
 with safety of principal the paramount consid- 
 eration. Only a very small percentage of his 
 purchases comes upon the market again. He is 
 not such a close buyer as the institution, he 
 invests more largely in the class of securities in 
 which there is a reasonable amount of profit to 
 the bond house, his business is not so competi- 
 tive and he does not weaken the market by 
 throwing over his holdings on the least provo- 
 cation. For these reasons the private investor 
 business is preferred by many bond houses 
 and eagerly sought after by all of them. 
 
THE BOND MARKET 25 
 
 Probably the one thing that causes the most 
 sorrow to the conscientious bond house is the 
 fact that so few customers, whether banks or 
 individuals, can differentiate between good 
 bonds and inferior ones. This, of course, makes 
 it easier for the vendor of second rate and third 
 rate goods, but it increases the difficulties of 
 the house that is honestly endeavoring to 
 handle only sound issues and by so doing to 
 win and hold the confidence of the investing 
 public. 
 
CHAPTER III 
 THE BOND HOUSE 
 
 There are almost as many different kinds of 
 bond houses or investment bankers as there are 
 men of different ideas in the business. In other 
 words, the methods pursued and the policy fol- 
 lowed by any given firm are based upon the 
 theories and experience of those who control 
 and direct it, and likewise its standard of ethics 
 is in proportion to the integrity of its head. 
 There is probably no other business where the 
 personal equation is so directly reflected in 
 methods and policies. While it is neither pos- 
 sible nor expedient to attempt to give here in 
 detail the distinguishing characteristics of all 
 the different kinds of organizations that devote 
 themselves wholly or in part to the selling of 
 securities, a brief outline of some of the more 
 prominent types is necessary to convey an in- 
 telligent idea of the scope and character of the 
 business. 
 
 Certain large firms confine themselves ex- 
 clusively to wholesaling. They are limited in 
 number and each negotiates annually transac- 
 tions aggregating hundreds of millions of dol- 
 
 (26) 
 
THE BOND HOUSE 27 
 
 lars. They are known as exclusively under- 
 writing or originating houses. Frequently in 
 large operations two or more of them work 
 together. They usually distribute their pur- 
 chases through selling syndicates, composed of 
 distributing houses and bond dealers generally. 
 Sometimes there is an intermediate group or 
 purchasing syndicate composed of the larger 
 banks and distributors, which takes the bonds 
 off the hands of the wholesaling houses, and 
 guarantees their sale through a selling syndi- 
 cate, the members of which place the securities 
 both through brokers and direct to customers. 
 Thus, between the original borrower and the 
 ultimate lender a bond may pass directly 
 through the hands of four or more middlemen, 
 each of whom levies his toll in turn. This, how- 
 ever, is an unavoidable feature of large financ- 
 ing, and the cost of the operation is not out of 
 proportion to the service performed, though 
 frequently the compensation is not divided in 
 accordance with the responsibility assumed or 
 the work done by the various participants. 
 
 The form of a syndicate varies according to 
 the nature of the financing, but generally 
 speaking a wholesale house buys from a gov- 
 ernment, municipality or corporation a block 
 of bonds at a given price, and sells it at a higher 
 
28 THE HUMAN SIDE OP BUSINESS 
 
 price to a group of houses which in turn dis- 
 poses of the issue at the final price to the ulti- 
 mate consumers. For instance, a railroad 
 corporation in financing its requirements 
 might sell to a wholesale house a large issue of 
 bonds at 95 (cents on the dollar). The whole- 
 sale house in turn might resell the entire block 
 to a syndicate at say 97. The final selling price 
 to the public might be fixed at 98 J^, and usually 
 from this final price there would be a brokerage 
 or commission to the distributing house, all or 
 part of which commission might or might not 
 be given up, according to the terms of the 
 agreement, to brokerage houses not members 
 of the syndicate. Syndicate members are en- 
 titled to the selling commission upon all bonds 
 drawn down or placed by them, but the syndi- 
 cate profit is divided not according to bonds 
 sold but according to the proportionate partici- 
 pation or liability assumed by each member. 
 If a syndicate is not a success, that is if the 
 bonds do not prove a ready sale, the unsold bal- 
 ance is usually divided among the members in 
 proportion to their participations. The writer 
 has long felt that syndicates as an institution 
 were not fair to those who did the most work 
 and obtained the largest results and to oflfset 
 this, he provided in a syndicate which he had 
 
THE BOND HOUSE 29 
 
 occasion to form some time ago, that the profits 
 should be divided two-thirds according to the 
 amount of bonds sold by each member and one- 
 third in proportion to the contingent Hability 
 assumed by each. 
 
 This same view is common to many other 
 dealers and during the past two or three years 
 there has been an evident attempt to equalize 
 matters by providing for a sliding scale of sell- 
 ing commissions based upon the amount of 
 bonds sold. Of the two methods named the 
 straight division of profits into two classes, is 
 the fairest and most efficient method and best 
 accomplishes the desired results, that is, the 
 ready sale of the bonds with a just distribution 
 of the profits to all concerned. An even greater 
 inequality usually exists in the division 
 between the wholesale house and the selling 
 syndicate as a whole. However, as the whole- 
 sale house always controls the financing, and 
 invites the members into the selling syndicate, 
 it is in position to dictate the terms. Any 
 house that does not care to accept an invitation 
 on the predetermined basis, may stay out, but 
 at the risk of not being invited a second time. 
 The success of a wholesale house is based upon 
 its prestige, its past record, its large capital, 
 and particularly upon its community of interest 
 
30 THE HUMAN SIDE OF BUSINESS 
 
 with large banking institutions which lend the 
 financial assistance necessary to carry a large 
 operation from tjie time the bonds are bought 
 and paid for until they are split up into blocks 
 among various syndicate members or else dis- 
 tributed to the final purchasers. 
 
 Big business requires big financial machin- 
 ery, and the wholesale houses are in position to 
 furnish it on account of their experience, pres- 
 tige and available resources. Though this sys- 
 tem has many disadvantages and is more or 
 less monopolistic, that it is the only practicable 
 one is evidenced by the fact that nothing else 
 has ever been developed to take its place. 
 While large operations might occasionally be 
 financed by popular subscription during pro- 
 pitious times, the public purse could not regu- 
 larly be depended upon for direct support and 
 the assistance of strong agencies is required. 
 A borrower can not ignore the money lender 
 during periods of easy money and then demand 
 help when conditions are stringent. The fat 
 and the lean must go together. 
 
 Next to wholesale houses in both capital and 
 influence are the so called distributing houses, 
 which vary in size and importance from those 
 handling only one million or two million dol- 
 lars a month to those that distribute annually 
 
THE BOND HOUSE 31 
 
 several hundred million dollars of bonds. They 
 participate in underwriting syndicates organ- 
 ized by the wholesalers, and frequently two or 
 more will purchase from the wholesaler entire 
 blocks of bonds and resyndicate them. They 
 also originate their own issues, consisting usu- 
 ally of municipal, railroad divisional or equip- 
 ment and public utility bonds. Although 
 frequently up in the millions these issues are 
 generally smaller in amount than the large 
 government or railroad loans financed by the 
 more important of the wholesale firms. Dis- 
 tributing houses do a wholesale and a retail 
 business simultaneously. Practically all of 
 them employ bond salesmen; some of them in 
 connection with their main offices only, in 
 which case they generally work through corre- 
 spondents in other cities, while others maintain 
 large organizations and operate a number of 
 branch offices. They distribute bonds direct 
 to their customers at list prices and also sell 
 round blocks at special prices to retail dealers. 
 The distinguishing characteristic of the higher 
 class distributing house is that before purchas- 
 ing an issue of bonds it makes a searching 
 examination of the property and of the credit 
 of the borrower, and in doing so employs legal, 
 engineering and accounting experts. The dis- 
 
32 THE HXJMAN SIDE OF BUSINESS 
 
 tributing house comes in contact in a broad 
 way, with the general public and is supposed to 
 feel a strong moral obligation toward its cus- 
 tomers, and to be ever watchful of their inter- 
 ests, whereas the wholesale house is a sort of 
 middleman between the borrower and the dis- 
 tributing or retail houses, and assumes practi- 
 cally no responsibility as to the safety of the 
 securities it underwrites. The distributing 
 house is the real connecting link between the 
 bond issuer and the bond buyer and this book 
 is written with the idea of being particularly 
 applicable to the relation so existing. 
 
 The retailers belong to the large and very 
 important class of firms that possess moderate 
 capital and do not essay the role of originating 
 houses. Probably a large proportion of these 
 firms is composed of men who in their earlier 
 days were salesmen for older houses. Retail 
 houses participate in underwritings, purchase 
 round blocks of bonds outright from distribut- 
 ing houses on a dealer's basis, and also buy and 
 sell bonds on the open market. As in the case 
 of the other types of houses, they may or may 
 not be members of a stock exchange, or the 
 stock end may be the principal business and 
 the bond department only a side issue. Each 
 retail house of course has its own circle of cus- 
 tomers and its own sphere of influence. 
 
THE BOND HOUSE S3 
 
 There are a great many stock exchange firms 
 that buy and sell listed securities on a commis- 
 sion basis only. Such houses do not keep bonds 
 on hand for sale but merely execute orders and 
 therefore are not concerned in this discussion. 
 
 Street brokers are men who trade between 
 houses and principally in unlisted securities. 
 They claim to work on a straight commission, 
 do not generally carry bonds on hand and are 
 not supposed to have any direct dealings with 
 institutions or private investors. Their func- 
 tion is to know all of the different markets, and 
 where odd blocks of bonds may be bought or 
 sold to the best advantage. Their reason for 
 existence is that they perform a service for 
 which other houses prefer to pay a commission 
 rather than take the time and trouble to do the 
 work themselves. 
 
 The different kinds of houses blend into each 
 other, their types change with changes in con- 
 ditions and a house may belong to one class in 
 one piece of financing and to another class at 
 another time so it is impossible to earmark 
 every bond firm in the business and say that it 
 belongs to this class or to that class. In a 
 general way, however, the remarks made in 
 the preceding paragraphs portray the principal 
 distinguishing characteristics of the various 
 
34 THE HUMAN SIDE OF BUSINESS 
 
 bond underwriting and bond selling firms as 
 they exist at present, and as they will no doubt 
 continue to exist for many years to come unless 
 there is a radical and unexpected change in 
 fundamental conditions. 
 
 Before leaving the subject it may not be 
 amiss to say a word about the firms that at- 
 tempt to do a stock exchange business and a 
 bond selling business at the same time. Except 
 in rare cases this combination does not work 
 out advantageously and one or both branches 
 of the business suffer. If the members of the 
 firm are primarily interested in the stock end 
 they devote their energies to that while the 
 stock market is active, and neglect the bond 
 end. When the stock market is dead, they 
 switch their attention to their dormant bond 
 department and expect it to spring into sudden 
 activity and to produce the earnings that were 
 previously made by the stock department. The 
 bond business, however, can not be successfully 
 developed that way. It is the product of long 
 study, and careful attention. It cannot be 
 neglected and allowed to go to seed, and then 
 suddenly forced and cultivated, and made to 
 produce a profitable crop. The stock broker is 
 usually a man of impulse and action. He wants 
 results and wants them quickly. He lives fast 
 
THE BOND HOUSE 35 
 
 and works fast while he works, but has not the 
 patience and the studious disposition that are 
 necessary to develop a successful bond busi- 
 ness. The bond dealer to be successful must 
 be an organizer and an untiring worker. He 
 must be satisfied with a more gradual growth 
 and with smaller profits but he must keep ham- 
 mering away without cessation, making each 
 stroke tell in the permanence of his work. 
 Where a firm desires to do both a stock ex- 
 change and a bond distributing business the 
 best results are obtained by having two distinct 
 executive organizations, each composed of 
 specialists in its line. The employees in the 
 bond end must be kept entirely out of the 
 atmosphere of the board room and they must 
 throw their influence against any strong specu- 
 lative tendencies upon the part of their cus- 
 tomers. A clientele of bond buyers, to be 
 profitable, must be permanent while the mar- 
 gin account houses seem to be able to make 
 money with clienteles that change periodically 
 every few years. 
 
CHAPTER IV 
 SALESMANSHIP 
 
 Salesmanship is an art, but Bond Salesman- 
 ship is a profession, and it has one great ad- 
 vantage over all of the others in that the route 
 is much shorter to success or oblivion. While 
 law, medicine and engineering are numerically 
 more prominent, their average compensations 
 are lower and they require a greater length of 
 time for an individual to determine whether or 
 not he is adapted to any one of them. They 
 necessitate three or four years of study and 
 preparation, not only without any remunera- 
 tion, but with a considerable monetary outlay 
 and then it may be some years afterward before 
 a satisfactory revenue is produced. Custom, 
 false tradition and "ethics" are a barrier to 
 individual energy and initiative, while for a 
 doctor or a lawyer to advertise would immedi- 
 ately stamp him as being entirely beyond the 
 pale. In bond selling the probation period is 
 much shorter, returns accrue more quickly and 
 the average compensation is considerably 
 higher because aggressive competition and the 
 law of the survival of the fittest promptly weed 
 
 (36) 
 
SALESMANSHIP 37 
 
 out the inefficient. At the same time, for those 
 who are fitted for bond selling the opportuni- 
 ties are unlimited and the rewards of success 
 place a high premium upon individuality. 
 
 Salesmanship is the most practical course in 
 the school of life and bond salesmanship is a 
 postgraduate subject. It is the highest type 
 of salesmanship, it deals in a superior form of 
 commodity and it brings one in contact with 
 the best class of trade. It is for these reasons 
 that one who aspires to bond selling should be 
 above the average in character and ability. 
 
 Nothing develops a man so well as contact 
 with other men and with big things. To be 
 familiar with securities, means to be familiar 
 with country wide and with world wide condi- 
 tions in general, and with municipalities, cor- 
 porations and markets in particular. Every is- 
 sue of bonds is different from every other issue. 
 The stock of goods that a house has for sale 
 and their prices are changing almost every day. 
 As a capable bond man not only has to know 
 his own wares but those of his competitors 
 there is ample opportunity for brain work. A 
 bright young man once applied to the writer 
 for a position, saying that he was a very suc- 
 cessful salesman of fountain pens, but that he 
 had reached his limit in that line because he 
 
S8 THE HUMAN SIDE OF BUSINESS 
 
 knew all there was to know about a fountain 
 pen. This criticism could hardly be made of 
 the bond business for no one has ever been 
 heard of who knew all about bonds. 
 
 To win success, a man must have both ability 
 and opportunity. Except in rare cases one 
 without the other is ineffectual. Opportunity 
 is usually the result of acquaintance. A bond 
 salesman, by the very nature of his profession, 
 meets more people of means and influence than 
 does one in any other line of work. It is no 
 doubt due to this fact that many salesmen of 
 ability do not long remain salesmen for oppor- 
 tunities are constantly thrown open to them 
 and if an existing connection is not satisfactory 
 or sufficiently lucrative, a new association may 
 readily be formed. A really good salesman in 
 this or any other line need never seek a 
 position. 
 
 It is not to be assumed from this that all or 
 even a majority of those who undertake the 
 bond business succeed. Unfortunately the 
 glamour and the prevailing air of prosperity 
 attract to this profession many young men who 
 are either unfit for it temperamentally or who 
 are not willing to make the personal sacrifices, 
 to give the close application, or to devote the 
 untiring effort that are essential. Bond selling 
 
SALESMANSHIP 39 
 
 knows no union hours and he who watches the 
 clock would better seek some other occupation. 
 From his own observation and experience in 
 training men the writer calculates that on an 
 average not more than one in five makes good, 
 and some of the reasons therefor will be found 
 in subsequent chapters. 
 
 Special classes of investors require special 
 classes of bonds and special methods of sale. 
 It is not within the province of this discussion 
 to go into technical details or trade customs. 
 Our concern here is with the personal side of 
 bond selling and with the subject in its entirety 
 rather than its ramifications. These remarks 
 are therefore particularly applicable to the 
 ordinary buyer, the man who is a free agent in 
 his investment operations and is not restricted 
 by laws or limitations in the exercise of his 
 judgment. We are interested in his mental 
 processes, in the methods that must be em- 
 ployed to sell him, and in the type and training 
 of the salesman who can do it. 
 
 It is safe to say that no two investors ever 
 think just alike. "Many men, many minds" is 
 as true here as anywhere else. It is seldom 
 that any bond offered is quite what the cus- 
 tomer thinks he wants. If it is satisfactory in 
 certain particulars, it is probably unsatisfac- 
 
40 THE HUMAN SmE OF BUSINESS 
 
 tory in others. If every security was exactly 
 what a buyer thought he wanted, there would 
 be no need for salesmen. Consequently the art 
 lies in diagnosing a person's real needs and then 
 selling him the issue one has that comes the 
 nearest to meeting them. The salesman who 
 yields absolutely to a customer's idiosyncra- 
 sies, regardless of his own judgment, is not a 
 salesman but an ordertaker and there is no 
 profit in ordertaking. The real salesman, by 
 argument and suggestion, directs his custom- 
 er's mental processes. A buyer frequently 
 thinks he requires a particular kind of security 
 when actually something entirely different is 
 better for him. A desire must exist or be cre- 
 ated before a sale results. The real profit in 
 bond selling lies in making a customer want 
 that which the salesman thinks he should have. 
 This is not so difficult as it may appear for cer- 
 tainly ninety-five per cent of the investors buy 
 on confidence with little knowledge of what 
 they are buying, or of investment principles in 
 general. When both the house and the sales- 
 men inspire confidence, everything else is of 
 minor importance. 
 
 Very few bonds are sold on analytical ex- 
 planations or comparisons. The average man 
 wants to place upon some one else the responsi- 
 
SALESMANSHIP 41 
 
 bility of making up his mind for him. As one 
 salesman expressed it, he had to do his cus- 
 tomers' thinking for them. It is really unfor- 
 tunate that so few people are willing to make 
 a study of their investing. If they would do so, 
 many a dollar that is now thrown away could 
 be saved, the conscientious efforts of the higher 
 class bond houses would be more highly appre- 
 ciated and these houses would be relieved of a 
 responsibility which they would much prefer 
 to see placed where it belongs. 
 
 It is impossible to make a salesman. He 
 must be born to it. and all the so called schools, 
 character studies, correspondence courses, and 
 different methods of training are futile if the 
 necessary ability is not inherent. Whether it 
 be called personality, knack, personal magnet- 
 ism, or what not, it resolves itself primarily 
 into two things (1) ability to inspire confidence 
 (2) ability to work incessantly. These quali- 
 ties may lie dormant or may be concealed. 
 Study and training may bring them to the sur- 
 face, or may add polish and finish after they 
 are brought out, but unless they are born in a 
 man, his chances of great success are very 
 small. Compared to these two qualities, — 
 technical knowledge and training, studious- 
 ness, acquaintance, personal appearance, adap- 
 
42 THE HUMAN SIDE OF BUSINESS 
 
 tability and all the other virtues are of very 
 minor importance. 
 
 In his early days as a sales manager the 
 writer used to think that he was a pretty good 
 judge of character, but after talking to men by 
 the hundreds, employing them by the score, 
 and watching their work year by year, he dis- 
 covered that those who made the best first im- 
 pression frequently petered out while those 
 who appeared to be in the doubtful class fre- 
 quently made the greatest successes. He there- 
 fore came to the conclusion that there was only 
 one sure way to read character, and that was 
 by the law of averages. Hence, for some years, 
 in taking on new men for the sales organiza- 
 tion, he has been going on the theory that only 
 those should be passed by who unquestionably 
 had negative personalities or were clearly un- 
 suited for the work; that little attention should 
 be paid to stature or physiognomy; that if a 
 man possessed a fair education, looked sound, 
 had a clean record and character, and had to 
 work for a living he should be given a trial and 
 that out of every so many men so chosen a 
 certain percentage would make good. In 
 other words, after eliminating those clearly un- 
 suitable, it resolves itself simply into a trying 
 out process and the survival of the fittest. This 
 
SALESMANSHIP 43 
 
 may appear very impersonal and very mechani- 
 cal, but it nevertheless is a mathematically cor- 
 rect method, is businesslike, is reducible to a 
 scientific basis, and though more evident is not 
 different from the conditions and methods 
 prevalent and in operation in every business 
 and in every walk and in every phase of life. 
 
CHAPTER V 
 MATERIAL FOR SALESMEN 
 
 In building up a sales organization the 
 material available narrows down to three 
 general classes; viz., (1) men with previous 
 bond experience (2) young college men (3) 
 men from other lines of business. The writer 
 proposes in this chapter to attempt the com- 
 parison of these classes and an exposition of 
 the advantages and disadvantages of each. 
 
 Good salesmen with previous bond experi- 
 ence are always in demand, as is evidenced by 
 the numerous advertisements in the daily news- 
 papers and in the various financial periodicals. 
 This demand is due to the fact that the great 
 majority of bond houses (1) can ordinarily buy 
 more bonds than they know how to sell; (2) 
 have the courage to employ salesmen only 
 when they can get ones who they feel confident 
 will make money for them; (3) do not them- 
 selves know how or have the patience to 
 develop inexperienced men, and (4) expand 
 and contract their sales forces with the changes 
 in business conditions, so that instead of carry- 
 ing trained organizations through dull periods, 
 
 (44) 
 
MATERIAL FOR SALESMEN 45 
 
 they are forced to recruit them suddenly when- 
 ever business is prosperous. Competent sales- 
 men all make good livelihoods and are usually 
 paid pretty nearly what they are worth. Con- 
 sequently they do not as a rule look around for 
 other openings unless dissatisfied with work- 
 ing conditions where they are employed. This 
 latter condition is rare so that it is seldom that 
 a really good bond salesman seeks a new con- 
 nection. More often the position seeks the man. 
 It therefore follows that when a so-called 
 experienced man applies unsolicited for a posi- 
 tion, it is more than likely that he is a discard 
 or a floater. In the previous chapter it was 
 mentioned that in the trying out process about 
 one man out of five develops into a real success. 
 This means that four out of the five are dis- 
 appointed and seek new places. Strange to say, 
 to most of them there is a fascination about the 
 business so that they stay in it instead of try- 
 ing something else of a different character. 
 After a man has changed positions a few times 
 he usually becomes a floater, staying with one 
 house so long as his welcome lasts, and then 
 seeking another. For the reasons previously 
 given, the demand for experienced men is such 
 that if one has a fair knowledge of bond tech- 
 nique and can put up a good front, with a few 
 
46 THE HUMAN SIDE OF BUSINESS 
 
 confidential remarks about his personal cus- 
 tomers, he can usually land a job even though 
 his tenure of office may be brief. The writer 
 knows of one so-called salesman who has been 
 floating from one house to another for the past 
 fifteen years. This man has certainly averaged 
 less than one year to each place, and yet he 
 comes up smiling with a new one whenever the 
 occasion requires. Apparently in the employ- 
 ment of experienced bond men, much is taken 
 on faith, and references do not seem to be es- 
 sential. 
 
 While in hiring ready-trained men who apply 
 for positions, a "live one" may some times be 
 acquired and added to the force of producers, 
 this possibility is rare indeed, and the odds are 
 heavily against the employer. Less risk is as- 
 sumed in stealing or (to be more polite) in 
 buying a man away from a competitor but this 
 too has certain dangers. In the first place 
 every salesman is presumed to know what he 
 is worth; unless he is more modest than usual, 
 he is presumed to be getting it; and his em- 
 ployer is presumed to be paying it to him. If 
 he is entering the discard class, and a compet- 
 ing house makes him an offer, that house 
 stands a pretty good chance of having a failure 
 wished upon it. On the other hand, if he is a 
 
MATERIAL FOR SALESMEN 47 
 
 success, regardless of degree, and a competitor 
 steals him, it runs the great risk of having paid 
 too high a premium to get him away, and when 
 a man costs too much, he is just as much a 
 financial loss as the man who costs propor- 
 tionately less and is a failure. The house that 
 employs a man is in a great deal better position 
 to know what he is worth, and to pay it to him, 
 than a competing house that must base its 
 opinion entirely on outside indications. 
 
 Of course there is always the possibility that 
 a salesman is not in congenial surroundings or 
 is not developing his greatest efficiency under 
 given conditions, and that if transplanted, he 
 will reach a much higher development. This, 
 however, is largely a matter of guess work and 
 it is extremely dangerous to offer a man a 
 higher salary than he is getting on the assump- 
 tion that under new conditions he will be able 
 to produce more than enough to offset the in- 
 crease in compensation. It is more likely that 
 he will lose efficiency and producing power by 
 being transplanted, for a salesman seldom has 
 the same loyal regard and enthusiasm for his 
 second employer that he had for the one that 
 taught him the business and helped him over 
 the rough places in the beginning. This does 
 not hold good when a man advances from a 
 
48 THE HUMAN SIDE OF BUSINESS 
 
 conspicuously inferior house to one of much 
 higher credit and standing, but even in this 
 case it is inevitable that he should uncon- 
 sciously or instinctively compare methods and 
 conditions existing in the new association with 
 those in the previous one. Enthusiasm is the 
 greatest factor in commanding confidence, and 
 in inspiring one to hard effort. It is ruined by 
 the continual drawing of comparisons, by 
 mental reservations and by distracted atten- 
 tion. Unless one's whole mind, thought and 
 action are focused in one direction there can be 
 no real enthusiasm. An organization to be suc- 
 cessful must have the wholesouled support and 
 undivided cooperation of its component units 
 and its directing head must be engaged in con- 
 structive work and not diverted to eradicating 
 antagonistic or contrary ideas, principles and 
 methods previously gained by experienced 
 men in prior positions. 
 
 The writer realizes that if a properly trained, 
 well balanced and successful salesman of ex- 
 perience and judgment can be secured at his 
 actual value as a producer, he is cheap at the 
 price, and worth to any house a great deal more 
 than a number of inferior or inexperienced men 
 all taken together. There has never been the 
 slightest room for argument or doubt on this 
 
MATERIAL FOR SALESMEN 49 
 
 point. However, the chances of securing 
 enough men of this type are so slim, the risk of 
 losing a lot of money in trying to get them so 
 great, and the certainty of loading up with in- 
 ferior men so sure that the writer has never 
 been favorable to this method of recruiting an 
 organization. Last, but not least, there is the 
 question of ethics in the matter of taking men 
 from competitors. Some houses are very 
 punctilious and make a practice of applying 
 the Golden Rule to this particular feature of 
 their business. 
 
 As a class young college men in business are 
 a particularly difficult problem, due first to lack 
 of home training and second to a type of edu- 
 cation that aims at the broader phases of life 
 but neglects the essentials. Parents are too 
 lenient in bringing up their children. Disci- 
 pline, prompt obedience, accuracy, thorough- 
 ness and the homely virtues are the foundation 
 of character. If these are neglected in the 
 earlier years, inefficiency is bound to be the 
 result and college education and technical 
 training are unable to counteract it. Success 
 or failure can largely be traced back to the kind 
 of training a man had before reaching the age 
 of twenty-one. This situation is aggravated 
 by the fact that only a small proportion of 
 
50 THE HUMAN SroEfOFJBUSINESS 
 
 young men attend college with a serious pur- 
 pose in mind. For the first time in their lives 
 they are entirely free from restraint, the oppor- 
 tunity to waste time is ever present and the 
 stern realities of life are obscured by the dis- 
 tortion of relative values. Fraternity and dor- 
 mitory life, athletics and social activities as- 
 sume undue importance. The curriculum is 
 directed almost entirely toward mental expan- 
 sion, and but little, if any, toward character 
 building. At the risk of being accused of 
 heresy, the writer ventures the opinion that to 
 the majority of men who attend college the 
 benefits are negative; in other words, a college 
 education spoils many a good clerk. A man of 
 character, initiative and indomitable energy 
 will rise to the top regardless of his degree of 
 scholastic education. When such a man goes 
 to college and gets out of it all it holds in store 
 for him, the benefit of such an education is in- 
 estimable. It opens up to him greater possibil- 
 ities than he could otherwise attain even 
 though possessed of great natural ability. On 
 the other hand, if he slides through college 
 with no particular ambition and no set purpose 
 in mind, the influences of his environment and 
 the lassitude of his mental habits are not calcu- 
 lated to strengthen his character. Unquestion- 
 
MATERIAL FOR SALESMEN 51 
 
 ably the greatest function of a college course is 
 to give one breadth of thought. Therefore if 
 one is not made to think, his mental processes 
 do not undergo the expansion that is intended 
 for them. Far better that a youth should get 
 four years' practical application behind a 
 counter than allow his brain to gather moss for 
 such a period. 
 
 A man must be able to do the little things of 
 life and do them right before he is capable of 
 doing the big things, and a minor task correctly 
 performed is indicative of ability to do a larger 
 work properly. Some years ago a writer em- 
 ployed as sales material a University man of 
 considerable prominence in the various colleg- 
 iate activities. One day, during his probation 
 period in the office, a window shade fell down 
 and this man was asked to fix it. He had to 
 admit that he did not know how! What are 
 we to expect of our University graduates when 
 they are incapable of performing such trivial 
 tasks? 
 
 The greatest criticism then of the average 
 college man is that he hasn't been trained either 
 by his parents or his Alma Mater to do the little 
 things right before feeling that he is capable 
 of assuming greater responsibilities. In this 
 respect he is not much farther along than the 
 
52 THE HUMAN SIDE OF BUSINESS 
 
 grammar or high school boy who has not had 
 all the advantages and of whom so much is not 
 expected in the beginning. Undoubtedly this 
 deficiency or lack of discipline will be partly 
 overcome if the system of universal military 
 training is adopted in this country and incor- 
 porated in our college curricula. 
 
 The second great criticism of the young col- 
 lege graduate is his exaggerated idea of his so- 
 cial and economic position, and of the revenue 
 producing value of his education and ability. 
 While in college he gathers the idea that he 
 belongs to a higher plane than the ordinary 
 mortals around him, that he is destined by 
 the nature of things to be a leader and that of 
 his own right he must be looked up to. There- 
 fore when he accepts his first position and finds 
 himself located at the mailing desk at five or 
 ten dollars per week the business machine 
 seems to have slipped a cog somewhere. When 
 the days run into weeks and the weeks into 
 months and promotion and pecuniary emolu- 
 ments come slowly, the discouraged college 
 man reaches the conclusion that he has picked 
 the wrong job and that the other business just 
 across the street is the one he should have 
 chosen, so he gives up his position and starts in 
 over again and the process is repeated. Very 
 
MATERIAL FOR SALESMEN 53 
 
 often this discontent is due to the fact that the 
 college man has developed his tastes too far 
 beyond his earning power and he is constantly 
 obsessed by the desire for more money. Fre- 
 quently, too, he discovers that he wants to get 
 married and support a wife even before he can 
 support himself. 
 
 After a college man has yielded to this siren 
 call and wandered through two or three posi- 
 tions in search of greater opportunities he 
 suddenly awakens to the realization that he 
 too must not only begin at the bottom, but must 
 stick to one thing and climb slowly and surely 
 the same as anyone else. By experiencing a 
 few hard knocks he discovers that there is no 
 short cut to success and that hard work is the 
 quickest route to recognition and advance- 
 ment. Only when he buckles down to serious 
 effort and realizes that after all it depends 
 upon him and him alone, does he begin to ap- 
 preciate the opportunities in his own line of 
 work and see the folly of jumping from one 
 position to another. 
 
 When a college man of character and ability 
 reaches this stage, when he "gets down to 
 earth" he is ripe to be taken in hand and devel- 
 oped to the highest degree. It therefore follows 
 that in employing college men, all other things 
 
54 THE HUMAN SIDE OF BUSINESS 
 
 being equal, the best results are obtained by 
 taking those who have been graduated for 
 three or fotir years or more and have just ar- 
 rived at the point described. 
 
 This detailed portrayal of the faults and 
 weaknesses of the college man cannot obscure 
 his one commanding advantage over the other 
 two types described in this chapter, namely, his 
 enthusiasm. It is obvious that a young man 
 just entering business life may be enthused 
 much more easily and may communicate that 
 enthusiasm to others more readily than an 
 older man of more varied experience who has 
 tasted of some of the disappointments of life, 
 and has become more or less skeptical of its 
 opportunities. The greatest productive asset 
 of a young man is his initial enthusiasm. It is 
 worth more in dollars and cents than experi- 
 ence, acquaintance, influence or anything else. 
 Therefore when a college man has made the 
 most of his educational advantages, has 
 reached the hard work stage and still possesses 
 his youthful enthusiasm, he presents a combi- 
 nation of business advantages that offset his 
 lack of judgment and experience and make him 
 particularly available for training as a bond 
 salesman. 
 
 Our third group of available material in- 
 
MATERIAL FOR SALESMEN 55 
 
 eludes men of more mature years — say thirty 
 and over — inexperienced in the bond business; 
 men who, with few exceptions, are self made, 
 who have had limited educational advantages, 
 and who had to start to work early in life. This 
 type of man presents our greatest problem in 
 the selection of individuals. With the experi- 
 enced men it is merely a question of past record 
 and present performance with the risk of loss 
 limited and the employment terminable on 
 short notice. In the case of the college man the 
 cash outlay is small and the possibilities good 
 for securing a fair percentage of successes. 
 With our third class of men results depend 
 upon a fortunate selection of individual units, 
 involving a certain amount of character read- 
 ing, a larger amount of luck, and at last anal- 
 ysis the working out of the law of averages. As 
 a rule those who have not made satisfactory 
 connections before they are thirty are below 
 the average in ability. There are, of course, 
 many cases in which this does not hold good, 
 but the proportion is strongly as stated. This 
 condition is even more pronounced when the 
 age of forty is reached. It therefore follows, 
 with rare exceptions, that any man of forty or 
 more who is willing to enter a new line of work 
 at the price of raw material, has not sufficient 
 ability to qualify him for the bond business. 
 
56 THE HUMAN SIDE OP BUSINESS 
 
 Men of middle age have lost their enthusiasm 
 as a rule, and are hard to "warm up," they are 
 difficult to direct, frequently tell us how the 
 business ought to be run, find fault with exist- 
 ing methods after they have been doing outside 
 work for only a brief space of time and are 
 easily discouraged. Also to an employer who 
 is at all sympathetic the matter of dismissal is 
 always more embarrassing in the case of such 
 employees and is usually delayed much longer 
 than it should be even though sentiment is sup- 
 posed to play no part in business. 
 
 In going over the roll of men whom he has 
 trained, the writer is frank to admit that the 
 greatest individual successes have been devel- 
 oped from this third type of material, namely 
 men of more mature years with previous ex- 
 perience in other lines of business. As a corol- 
 lary, he has also lost the most money in trying 
 out men of this type. However, the progress of 
 a business is determined by the results obtained 
 not by the exceptions but by the organization 
 as a whole, and it has always been his experi- 
 ence that the best average is maintained by 
 men recruited from the second group. 
 
 While always on the lookout for a "find" 
 and while one can sometimes be secured 
 through a special combination of circum- 
 
MATERIAL FOR SALESMEN 57 
 
 stances, the sales manager who spends his time 
 hunting for such articles instead of developing 
 his own men is not going to expand his organ- 
 ization very rapidly. Each applicant for a posi- 
 tion must be considered very carefully and 
 those selected must be coached properly, but 
 the final result will be determined by the law 
 of averages. With such variations as have 
 been mentioned experience seems to prove that 
 the percentage of successes is about as great 
 with one group of men as with another, and if 
 carefully chosen it may be assumed that one 
 man out of five will make good. Let us there- 
 fore figure how this works out in dollars and 
 cents. If five older men be taken on at $150 
 per month each, or a total of $750 per month, 
 and one succeeds, it costs $750 a month to pro- 
 duce him. If five college men be taken on at 
 $10 per week each or a total of $216.66 per 
 month and one succeeds it costs $216.66 a 
 month to produce him. Against five older men 
 at $750 per month, seventeen college men can 
 be employed at the same expense and they will 
 produce more than three times as many suc- 
 cesses. 
 
 This same method of comparison may be 
 employed in the case of men with different rela- 
 tive salaries, but each must be classed with 
 
68 THE HUMAN SmE OP BUSINESS 
 
 others drawing the same amount of money. In 
 other words, a man getting $100 per month 
 must be compared with others receiving the 
 same for it must be figured that if a man is 
 paid $100 per month, and develops into a suc- 
 cess it has cost $500 a month to produce him, 
 and a success at $200 a month has cost $1,000 
 a month to produce. The successful man has 
 to bear his share of the cost of the unsuccessful 
 ones the same as the consumer who pays his 
 grocery bills has to pay for the food of the con- 
 sumer who does not and the same as the tax 
 payer has to carry the burden of the economi- 
 cally dependent. 
 
 This is a feature of the employing of men of 
 which the sales manager seldom thinks, or if he 
 does consider it, rarely reduces it to a mathe- 
 matical basis. If he belongs to the school that 
 tries to hire successful men already trained and 
 proposes for instance to pay an applicant $300 
 per month, does he realize that either the sales- 
 man is not worth $300, or else he has cost some 
 other house a good deal more than the amount 
 named and must be a bargain at the price? A 
 sales manager who is a good judge of bargains 
 may be able to gather together a satisfactory 
 organization if enough bargains are offered, 
 but the man who makes a profession of bargain 
 hunting usually pays high in the long run. 
 
MATERIAL FOR SALESMEN 59 
 
 Assuming then that we accept the training 
 of green men as the most successful method of 
 developing a sales organization, the logical 
 thing is to keep down the cost of the raw 
 material regardless of the source from which 
 recruited. Obviously it is not good business to 
 spend any more money than necessary on ex- 
 periments. Therefore the recruit should 
 assume his part of the risk until he can demon- 
 strate whether or not he is going to be a suc- 
 cess but after he has made good his employer 
 should compensate him for his sacrifice in the 
 beginning. Until a salesman makes good, he 
 is a liability and not an asset, and of course 
 business prudence demands that one should 
 limit his liabilities as much as possible, but 
 when a man moves over from the liability col- 
 umn to the asset column his position as an 
 asset should not be undervalued, else he is war- 
 ranted in eliminating himself from the balance 
 sheet altogether. 
 
 At last analysis a house is not only justified, 
 but is only exercising ordinary business sense 
 in buying its raw material at as low figures as 
 possible. In doing so it does not attempt to 
 pay a man what he is worth for it has no way 
 of determining what is a given man's worth, 
 but is merely advancing a nominal stipend 
 
60 THE HUMAN SIDE OF BUSINESS 
 
 until the man himself can demonstrate his 
 value and claim the rewards to which he is 
 then entitled. A willingness to make a tem- 
 porary monetary sacrifice is evidence of a 
 man's judgment, seriousness of purpose, de- 
 termination and self confidence. If he is not 
 willing to do this, the chances are he is not the 
 most desirable material available. 
 
CHAPTER VI 
 EMPLOYING MEN 
 
 Aside from the initial formation of its sales 
 organization, every progressive house finds it 
 necessary to constantly add new men to take 
 the places of the occasional ones who leave 
 after reaching productive positions, and of the 
 many who are tried and found wanting. While 
 now and then recruits may be obtained from 
 those who call of their own accord or who 
 apply through the personal recommendation of 
 mutual friends or acquaintances, or through 
 other employees, the number of suitable appli- 
 cants who can be so secured is comparatively 
 small and the building up and maintaining of 
 a large force in this manner is a slow, tedious 
 and difficult process. A large organization 
 therefore usually finds it necessary to make use 
 of collective employment. For this purpose 
 two methods are ordinarily available in secur- 
 ing raw material (1), advertising in the daily 
 papers (2) getting in touch with the graduat- 
 ing classes of the different colleges. 
 
 Notices in the financial pages of the news- 
 papers have not been found so productive as 
 
 (61) 
 
62 THE HUMAN SmE OF BUSINESS 
 
 advertisements in the columns headed "Help 
 Wanted: — Male," for the simple reason that the 
 number of experienced men open for engage- 
 ment is far exceeded by the number of green 
 men seeking positions and the latter read the 
 classified advertising rather than the financial 
 pages. After several years of experimenting, 
 through which he learned much about the psy- 
 chology of "want ads," the writer worked out 
 the following standard form of copy, which is 
 quoted to illustrate some of the points in mind. 
 
 "PROMINENT BANKING HOUSE will make posi- 
 tions for three or four young men to become bond sales- 
 men. Must be graduates of regular day courses of recog- 
 nized colleges or universities. Real opportunity for men 
 of initiative and ability who are willing to learn the busi- 
 ness and make it their lifework. State age, when and 
 where graduated, business experience, immediate salary 
 required and any other items of interest." 
 
 "College graduates" is specified, not because a 
 college education is necessary to a man to win 
 success in the bond business, but simply as a 
 labor saving device to eliminate the innumer- 
 able applications that would otherwise be re- 
 ceived from the host of young men of unsuit- 
 able heredity, environment or education who 
 are always on the lookout to change from one 
 wage earning job to another in the hope of 
 
EMPLOYING MEN 63 
 
 adding a few dollars more to the weekly pay- 
 envelope. While it is true that this qualifica- 
 tion discourages some very good material from 
 applying, it is a necessary limitation in order to 
 save the advertiser from being swamped by a 
 flood of letters. As it is, many of the more pro- 
 gressive or more ambitious disregard the speci- 
 fication and apply anyway, and the best of 
 these the advertiser may follow up if he so 
 desires. 
 
 The expression "graduates of regular day 
 courses" is used. Practically all of the univer- 
 sities in the larger cities maintain evening 
 courses, and the men who attend these usually 
 consider that they are college men. Experi- 
 ence shows that only a small proportion of 
 them are available for bond salesmen and so 
 this specification also is a labor saving device. 
 
 "Immediate salary required" reveals of itself 
 a whole lesson in human nature. Several times 
 the writer used the expression "Initial compen- 
 sation $10 per week" only to discover that the 
 replies were confined mostly to youngsters en- 
 tirely unsuitable for the purpose in mind. The 
 words "immediate salary required," however, 
 usually bring in a host of applications from 
 men who want anywhere from $5 a week to 
 $5,000 a year. Many purposely set high figures 
 
64 THE HUMAN SIDE OF BUSINESS 
 
 for their own protection until they can learn 
 the nature of the position and of these not a 
 few are willing to start at very nominal figures 
 after the details and opportunities are ex- 
 plained to them. Thus a much wider variety of 
 material is offered the advertiser from which to 
 make his selection. 
 
 In getting in touch with the graduating 
 classes of the different colleges, whether it be 
 done by letter, by personal visit, through the 
 faculty or through college employment 
 bureaus, the methods are elementary and need 
 not be enlarged upon here. 
 
 Interviewing candidates is the most irksome 
 task that falls to the lot of a sales manager. In 
 the first place he knows that the chances are 
 ten to one that the applicant will not prove 
 available, and yet no matter how busy he is, he 
 can not afford not to talk to the man who wants 
 a job for there is always the chance of getting 
 "a find". When he has to talk to them whole- 
 sale (and the writer has interviewed as many 
 as a hundred in one week) the work is exhaust- 
 ing to say the least. Again the average appli- 
 cant is nervous and not at his best. The sales 
 manager must put him at his ease, preferably 
 by finding out the particular thing that inter- 
 ests him the most and encouraging him to 
 
EMPLOYING MEN 65 
 
 enlarge upon it and forget himself if possible. 
 Many men who make the best "front" when 
 applying for a position fall down completely 
 later on, while some who appear backward in 
 the beginning, develop into the best salesman. 
 While an ability to make a good first impres- 
 sion is always an asset, it is much more impor- 
 tant to wear well, and a nice appearance and a 
 glib tongue do not encourage the same confi- 
 dence as time goes on that is inspired by ability, 
 thoroughness and sincerity even though the 
 latter are housed in a less imposing exterior. 
 
 The green man has a very vague idea of the 
 placing of securities, and the details of sales- 
 manship. Much time is therefore taken up in 
 giving him an intelligible explanation of the 
 nature of the position for which he is applying 
 and of the opportunities which it offers. Like- 
 wise to size up the qualifications of the appli- 
 cant, requires much patient and skillful ques- 
 tioning upon the part of the sales manager. 
 When this is multipHed by the number that 
 must be interviewed in any given period, the 
 waste of time and of nervous energy is entirely 
 out of proportion to the amount of material 
 found available. Sometimes out of as many as 
 twenty-five applicants the sales manager will 
 select only one as justifying in his judgment 
 the time and expense required in training. 
 
66 THE HUMAN SHJE OP BUSINESS 
 
 To reduce the interviewing of candidates to 
 a system, as much as possible and to save his 
 own time and strength, the writer worked out 
 a form of application blank, which is here 
 reproduced to facilitate the explanation of 
 some of the important points involved. 
 
 The fourth page of the blank gives a general 
 statement of bond salesmanship, summarizing 
 briefly some of the information given in pre- 
 vious chapters of this book. This explanation 
 is the foundation for that which may be told 
 the applicant subsequently during his inter- 
 view. It also helps to eliminate curiosity seek- 
 ers and floaters looking for a soft berth, and 
 saves the sales manager some unnecessary 
 sessions with them. 
 
 The words "Salary required" appear on the 
 first page. This is to classify the applicant 
 according to his own idea of his value, and also 
 to indicate the maximum that will have to be 
 paid him. Next his family history, connections 
 and standing are important as bearing upon the 
 desirability of his associations. Then his edu- 
 cational qualifications are given. If he is a 
 college man, his record must be given on page 
 two and if he has not accomplished something 
 in at least one field of undergraduate activity, it 
 does not speak well for his ambition or ability. 
 
EMPLOYING MEN 67 
 
 Nothing promises success for a man in the 
 future so much as having worked his way 
 through college. If in addition to this, he has 
 accomplished something in the way of scholar- 
 ship, athletics, literary work, dramatics or the 
 hundred and one things a man in college can 
 do, his record is all the better. Health is not 
 the least valuable asset of a salesman. If a man 
 does not possess vitality and endurance he can- 
 not give out any personal magnetism or main- 
 tain the degree of enthusiasm that is necessary 
 to a successful prosecution of his work. Like- 
 wise his powers are impaired by inveterate 
 drinking or smoking, and modern business effi- 
 ciency will not countenance the salesman 
 whose approach is heralded by the odor of stale 
 tobacco or alcohol. 
 
 If an applicant has had previous business 
 experience a complete record of all previous 
 positions is essential. This record must be 
 examined into very carefully, and checked 
 accurately backwards and forwards by per- 
 sonal questioning to make sure that the can- 
 didate has not purposely omitted some chapter 
 in his business life that he does not want looked 
 into. The number of positions a man has held, 
 and the duration of each afford the best pos- 
 sible Une on his ability, seriousness of purpose, 
 
Application for Position as Bond Salesman With 
 
 Frederick Peirce & Co. 
 
 BONDS FOR INVESTMENT 
 
 1421 CHESTNUT STREET 
 
 PHILADELPHIA 
 
 Salarr required 
 
 S per week; J... 
 
 Present addrera. 
 
 Permanent address 
 
 .-.per month 
 
 Present Telephone No. - 
 
 Date of birth — ■■- i Present age ; Place of birth 
 
 Married ; Number of children ; Are parents living — ; Where ■ 
 
 Give detaih of present or previous oceupation of father -. ~ - ■ ■ 
 
 Occupationa of unclea or aunts if living and employed (l) — - 
 
 (3) -^ f*) C5) - ■ 
 
 Occupations of brothers or sisteta If living and employed (l) - 
 
 (3) - (4) (5) -■ 
 
 . (2).-. 
 „ (6).... 
 .(2).. 
 .. (6) 
 
 Nature of work - 
 
 Are you employed at present ; Where - 
 
 Present salary, or previous if not now employed % - — per ; If employed, sUte reasons for desiring to change 
 
 Lost school or college attended 
 
 ... ; Graduate ; Clasa of : 
 
 If you did not eraduate, state when you left and why • 
 
 What was your scholastic standing .■ 
 
 For an explanation of Bond Salesmanship see page 4. 
 
 Give details of any 'flunks'.. 
 
 Give details of outside collegiate activities — 
 
 Did you make any efforts towards Klf support during any scholastic year, what were they and what revenue did 
 they produce ______ - _.~ — — 
 
 What summer work did you do prior to going to college - 
 
 What summer work between Freshman and Sophomore yean .. 
 
 Whnt summer work between Sophomore and Junior yean 
 
 What summer work between Junior and Senior years— 
 State height and weight ~ 
 
 ; Amount earned % - 
 ; Amount earned $ - 
 ; Amount earned %- 
 
 Give health record. Have you ever been injured or have you any chronic trouble - 
 
 What are your habits with regard to drinking and smoking - 
 
 
 Give complete account of all positions held since leaving school or cc 
 
 liege 
 
 
 Name of Concihn 
 
 Date Euplovkd 
 
 Date Left 
 
 Salary 
 
 Reason for Leaviwo 
 
 1 
 
 
 
 * per 
 
 
 2 
 
 
 
 1 .!«.■:...„. .. 
 
 
 
 
 
 « ._.„p?r. 
 
 
 
 
 
 $ per 
 
 
 
 
 
 » . ._per 
 
 
 
 
 
 « per 
 
 
 
 
 
 » „...&<=' ,. 
 
 
 Clubs or secret societies- — 
 Religious affiUaUoQS, Or if a 
 
 le, give those of parents 
 
 Give details of any other connections, aifillatlona or occupations— 
 
 If you have had any •clllng eiperieacfl give details and record- 
 
 Give details of relationship or acqaalntane« with any one In the Bond Butines 
 
 Is anyone dependent upon you for support--.- ; Have you an Independent source of income 
 
 Do you object to traveling or being away a week or two at a time - - 
 
 What is your hobby ~ - - — 
 
 What Is your ambition — — 
 
 Give names and addresses of twelve people who may be written to for references aa to your character, abl 
 
 N.it 
 
 ADDRtU 
 
 Bu.,»» 
 
 WhatR 
 
 1 
 
 
 
 
 2 
 
 
 
 
 3 
 
 
 
 
 4 
 
 
 
 
 b 
 
 
 
 
 6 
 
 
 
 
 7 
 
 
 
 
 8 
 
 
 
 
 9 
 
 
 
 
 ID 
 
 
 
 
 11 
 
 
 
 
 12 
 
 
 
 
 Give any other informaUon that you think might be of interest 
 
 If you have filled in this blank by typewriter, give here your signature and s 
 
 mple of your handwriting. 
 
 This dau will be kept strictly con6dential. No Inquiry will be made of your present employers 
 references written to without your permission- While not essential, a copy of your photograph wi] 
 assistance In identifying you with this application. Do not call or telephone until you hear from us further. T 
 Information Is requested in order to form a preliminary judgment and ii not necessarily finaL 
 
 -a i 
 
sUils of any 'flunks' 
 
 Btails of outside collegiate activities.- 
 
 make any effbrta towards telf support duiinff any scholastic year, what were they and what revenue did 
 
 lummer woilc did you do prior to going to college - 
 iimmer work between Freshnian and Sophomore year 
 
 immer work between Sophomore and Junior years- 
 summer work between Junior and Senior ycar»- 
 leight and weight — — ~ . 
 
 ; Amount earned %— 
 ; Amount earned $ ... 
 ; Amount earned $ ... 
 
 Balth record. Have you ever been Injured or have you any chronic trouble - 
 
 re your babiU with regard to drinking and smoking . 
 
 Give complete account of k1] pofiUons held since leaving school or coUece 
 
 Nam ok Concbrn 
 
 DaTB EHPLOYtO 
 
 Date Lerr 
 
 Salary 
 
 RuaON FOR LlAVINO 
 
 
 
 
 » P" 
 
 
 
 
 
 ». P" 
 
 
 
 
 
 % per 
 
 
 
 
 
 J per 
 
 
 
 
 
 S jKr 
 
 
 
 
 
 * per 
 
 
 
 
 
 » .P?'.._ 
 
 
 secret sodetiea— . 
 
 s affiliations, dr if none, give those of parents — 
 
 ;aila of any other connectloas, affiliations or occupations— 
 
 If you have had any selling czptrrience give details and record.-- 
 
 Give details of relationship or acquaintance with any one In the Bond Biutoess.... 
 
 s anyone dependent upon you for support .. 
 
 ; Have you an independent source of income ... 
 
 Oo you object to traveling or being away ■ week or two at a time - 
 
 What is your hobby - ~ , 
 
 What Is your ambition ~ 
 
 Give names and addresses of twelve people who may he written to for references as to your character, ability and 
 habiU. 
 
 NAM 
 
 Adddbu 
 
 BUIINBU 
 
 W»AT B.UTIOM 
 
 1 
 
 
 
 
 2 
 
 
 
 
 3 
 
 
 
 
 4 
 
 
 
 
 5 
 
 
 
 
 6 
 
 
 
 
 7 
 
 
 
 
 8 
 
 
 
 
 9 
 
 
 
 10 
 
 
 
 
 11 
 
 
 
 
 12 
 
 
 
 
 Give any other information that you think might be of interest. 
 
 If you have filled in this blank by typewriter, ^ve here your signature and a sample of your handwriting. 
 
 This data will be kept strictly con6dential. No inquiry will be made of your present employers or your 
 references written to without your permission. While not essentia], a copy of your photograph will t)e of 
 assistance in Identifying you with this application. Do not call or telephone until you hear from us further. The above 
 information Is requested in order to form a preUminary judgment and is not necessarily £nal. 
 
 Application for Position 
 
 Bond Salesmanship 
 
 The economic progress of any nation is dependent upon the efficiency with which its capital is employed. The 
 development of the resoorccs of a country is accomplished to a large extent through borrowed capital. Large agencies 
 of production and distribution, such as industrial corporations, railioods, etc, usually have been built with capital 
 partly sapplied directly by the owners or stuckholdeia and partly borrowed from those who have beru willing to loon 
 it at o specified charge for its use. This charge is called mtercst, aod loans to corporations are generally evidenced 
 by obligations called bonds. Corporations issuing bonds may be pubLc, such as states, counties or cities; or private, 
 such as railways, gas companies, manufai^luring companies, etc. 
 
 The Bond House (or Investment Danker) is the intermediary between the borrower and the lender. It is the 
 agency through which unemployed capital becomes a productive force. By finding profitable investments for those 
 who have idle funds it cootributes directly to the creation of wealth. The responsibilities of the Bond House are 
 necessarily great. It is under obligation to invest the funds of its clients not only profitably but safely, and this is by 
 no means an easy task. Therefore, before buying an issue of bonds with a view of selling them to its customers, it 
 will institute the most searching inquiry os to all the resources of the corporation in order to determine whether or not 
 the loan represented by the bonds is adequately secured. Thus, after making such careful investigations by lawyers, 
 engineers, accountants and other experts, it purchases wholesale for its own account entire issues of securities; then 
 through advertisement, correspondence, circulars and salesmen it retails them to institutions, trustees and private in- 
 vestors. The Bond House thus performs a doable service — loaning. capital to those who need it and supplying safe 
 investments to those who have money to invest. The methods of dislribution are very similar to those of any com- 
 mercial house which buys goods wholesale and retails them through salesmen and the other usual channels. 
 
 Salesmanship is a profession and as such oBers as great opportunities as Low, Medicine, Engineering, etc. More- 
 over, it has the added advantages of producing results much more quickly and of being unhandicappcd by custom or 
 false tradition. Individuality is given full scope ond a man's worth is based upon results obtained. Consequently, 
 real obility can forge to the front regardless of priority of employment or seniority of position. The path of progress 
 is not blocked by a man ahead, as is frequently the cose with on "inside" occupation. As salesmanship produces 
 tangible results in dollars and cents, it is much easier to appraise the value of a salesman than of an inside man, and 
 for a salesman to know his own value to a firm. Having a profession ond a known reputation, it is comparatively easy 
 to make a new connection if the existing one is not satisfactory, whereas in the case of inside positions or of other 
 professions, it is difficult to fix upon a basis for change of occupation or employmenL 
 
 Bond Salesmanship is undoubtedly the highest form of salesmanship, for it deals with a superior type of com- 
 modity and with the best class of trade. It familiarises one with country wide and world wide conditions and with 
 numerous localities and industries and affords a financial training that cannot be obtained in any other way. Unlike 
 other kinds of salesmanship, the commodity is ever changing, aod no two arc identical in form. It is impossible for 
 any one person to know all there is to know about the business, and there is thus unlimited opportunity for study and 
 the acquiring of knowledge. This is one of the most desirable features of Bond Salesmanship, for it affords the 
 chance for constant self -improvement and constant self -advancement. 
 
 Not every man is fitted to become a salesman. Unceasing effort, judgment, mental ability, initiative and a certain 
 amount of persona) magnetism are required, but in this, as in every other occupation, mediocrity has no place an^ hard 
 work Is the keynote to success. While the proportion of men who develop into really good salesmen is necessorily low, 
 it is doubtful if the percentage of failures Is grcolcr than in other productive lines, and the rewards of success ore 
 sufficient to worrnnt the risk for one who docs not have a really remunerative position at his command. 
 
 Frederick Peh-ce & Co. are able from time to time to offer opportunities to men who desire to take up this line 
 of work and their policy is to select those who apparently possess the requisite qualifications and are not too far 
 advonccd in years to permit the necessary training and study to ensure the proper foundation for their life work. 
 The iniUal compensation is necessarily nominal ond must remain so until the candidale reaches a point when he begins 
 to produce. The other professions require from three to four yeors of study, not only without remuneration, hut with 
 actual monetary outlay, and then when the course is finished there always intervenes a period of small earnings, which 
 usually cannot be overcome by individual energy and initiative on account of the nature of the occupation. The pro- 
 fession cf Bond Salesmanship, on the other hand, affords a moderate compensation during the study and probation 
 period ond when the subject has been mastered, produces a satisfactory revenue shortly thcrcoftcr. This revenue is 
 capable of indefinite expansion, and much more rapidly than in the other professions, depending upon the ability and 
 Industry of the individual. The mistake most frequently made by young men taking up this line of work is that they 
 are too impatient to get quick results, not realiring that any profession that is worth while requires adequate study 
 and preparation. However, for those who intend to make it their life work, who possess the necessary quahfications, 
 and who display the necessary patience and energy, Bond Salesmanship offers opportunities not excelled in any other 
 profession, and the revenue ultimately obtained more than compensates for the time and preparation required. 
 
 F. P. 
 
 Septembrr I, 19IS 
 
 FREDERICK PEIRCE & CO. 
 
68 THE HUMAN SIDE OF BUSINESS 
 
 and steadfastness. A varied business career 
 condensed into a brief space of time is not a 
 strong argument in favor of one's fitness to 
 undertake a line of work that requires applica- 
 tion and determination. On the third page the 
 question of an independent source of income is 
 important for if a man does not have to work 
 for a living he usually lacks the incentive that 
 is necessary to accomplish a difficult sale. The 
 questions "What is your hobby" and "What is 
 your ambition" usually develop some interest- 
 ing sidelights of a man's character, and fre- 
 quently divulge the real purpose of the appli- 
 cant in seeking a position. The writer 
 remembers the case of a young man whose 
 ambition was "To own a chicken farm", which 
 statement developed the fact that he desired to 
 hold a position only long enough to earn some 
 money to enable him to go into the business of 
 raising poultry. As we were not spending our 
 time training men for the fun of it, this young 
 fellow of course did not get the job. 
 
 Each question on the blank is the result of 
 experience gained in talking to many men, and 
 has an underlying purpose, even though the 
 latter may not be apparent and the questions 
 may appear irrelevant. Every once in a while 
 some sophisticated applicant makes the remark 
 
EMPLOYING MEN 69 
 
 "You don't expect me to answer all of these 
 questions do you?" or "If I were the kind of a 
 man who was willing to give you all of that 
 information, I wouldn't be the kind of a man 
 you would want". The answer is that if a man 
 is too proud to give the information that is 
 required of him to secure a position with 
 opportunity, then he is too proud to do the kind 
 of work that would enable him to reap the 
 advantages accruing from that opportunity. 
 
 References are at once a necessity and a delu- 
 sion. The persons whose names are supplied 
 by a candidate, are usually ones who the candi- 
 date feels confident will give him a clean bill of 
 health. Few men will give an unfavorable 
 report of another in writing. Therefore when- 
 ever possible it is advisable to check up the 
 references by personal visit. It is also very 
 advisable to make inquiry of persons other than 
 those whose names are supplied by the candi- 
 date. This is a simple matter if the applicant 
 comes from a country town. It is not much 
 more difficult if one gets in touch with all of 
 the applicant's previous employers, and learns 
 from them of his record and history. A single 
 unfavorable or qualified statement is a danger 
 signal and should be run down until the entire 
 truth, either favorable or unfavorable, is 
 learned. 
 
70 THE HUMAN SHDE OF BUSINESS 
 
 Too many references cannot be written to. 
 The writer recalls the case of a man who made 
 a remarkable first impression, and yet there 
 was something puzzling about him. Conse- 
 quently twenty-five people were communicated 
 with. Twenty-four of these wrote excellent 
 letters. The twenty-fifth said "Send a man 
 down to see me and I'll answer your questions". 
 From the information that resulted, it appeared 
 that the house narrowly escaped employing a 
 man who would have been far from a credit to 
 it. In another case, a candidate had been in 
 the navy and gave as references an imposing 
 array of Rear Admirals, Captains and Com- 
 manders. Many of the letters came back with 
 the notation that the person written to was 
 dead. When these were shown to the candi- 
 date he sadly and ingenuously remarked that 
 they must have died since he left the navy. 
 After this employee was dismissed for miscon- 
 duct, the conclusion was reached that he knew 
 they were dead in the beginning or he would 
 not have given their names. 
 
 No reference is as good as the "sizing up" of 
 a man by an experienced employer. Some ap- 
 plicants have honesty written all over them. 
 In such cases the checking up is merely a mat- 
 ter of form. References are therefore a neces- 
 
EMPLOYING MEN 71 
 
 sity if one is in doubt, a delusion if not properly 
 interpreted, or merely a formality when a 
 man's character is stamped on his face. 
 
CHAPTER VII 
 TRAINING MEN 
 
 As good food may be ruined in the cooking, 
 so good sales material may be spoiled in the 
 training, or if not absolutely spoiled, it may be 
 wasted by not being developed in the manner 
 and to the extent to which it is capable. The 
 opposite extreme is that it may be overtrained 
 and discouraged. Some years ago the writer 
 used to follow the policy of keeping a man in 
 the office for anywhere from one to three years 
 doing routine work and learning all the details 
 of the business from the bottom up. This prac- 
 tice was abandoned some time ago because it 
 developed numerous disadvantages and was 
 not found to be any more effective than other 
 methods less tedious and calculated to produce 
 quicker results. 
 
 Inside work as a temporary expedient must 
 obviously consist of a clerical and statistical 
 nature. By temperament a man who is good on 
 details and systematic, is frequently lacking in 
 sales ability and conversely, one who is bub- 
 bling over with energy and enthusiasm finds 
 office work tedious and a drudgery. A tem- 
 
 (72) 
 
TRAINING MEN 73 
 
 porary clerk of the latter disposition can keep 
 his superiors quite busy remedying his mis- 
 takes, and in an active organization where ac- 
 curacy is a necessity and each day's work must 
 be disposed of before the next day's begins, it 
 is much less of a nerve strain to maintain an 
 adequate and competent clerical force than it is 
 to use the office as a training school for embryo 
 salesmen. 
 
 The young fellow who starts in an office 
 after graduating from college usually expects 
 to make his education return abnormal divi- 
 dends in a brief space of time. The kind of 
 work he is capable of doing does not command 
 a very remunerative compensation and when 
 his salary increases come only once a year or 
 so, and are modest in size, he is quite apt to be- 
 come restive and long for bigger things. Dur- 
 ing his scholastic period he has probably ac- 
 quired some more or less expensive habits 
 without a restraining conception of the value 
 of money. When thrown upon his own re- 
 sources he finds his wants are greater than the 
 wherewithal to supply them. Possibly too he 
 has by this time found a soul mate and is ambi- 
 tious to have his own home. This latter con- 
 tingency is a more frequent handicap than is 
 generally realized, for the impetuous youth 
 
74 THE HUMAN SIDE OF BUSINESS 
 
 often has not the patience to establish even a 
 limited earning power before assuming do- 
 mestic responsibilities. 
 
 Influenced by one or more of these problems, 
 more transitory than vital, and impatient to 
 earn more money, the apprentice is apt to feel 
 that his services are undervalued, that the op- 
 portunities were overstated and that he can 
 better himself by making a change. This 
 may be hastened by some competing house 
 painting a glowing picture and holding out in- 
 ducements, so that the original employer finds 
 that he has spent his time and energy in vain. 
 
 An even greater loss is experienced when a 
 house spends two or three years on preparatory 
 training and then finds out that the object of 
 their thought and work, after being started on 
 his outside activities, is entirely unsuited for 
 salesmanship and incapable of producing the 
 returns that are expected of him; or else if he 
 shows signs of sales instinct, has not the pa- 
 tience to develop them but thinks he sees 
 greater opportunities in another territory or 
 with another house and resigns his position 
 just as he is beginning to secure results that 
 will reimburse the employer for the expense 
 involved in his training. 
 
 In developing groups of salesmen, the writer 
 
TRAINING MEN 75 
 
 has secured just as good if not better results 
 by giving them a very superficial training con- 
 suming only from three to six weeks. This is 
 done by prescribed reading, lectures, discus- 
 sions, the study of files of sales letters, and the 
 analysis of bond circulars. With this smatter- 
 ing of knowledge, the men are started out to 
 work, and they soon learn that experience is 
 the great teacher. No matter how carefully a 
 man is coached in the office, he quickly discov- 
 ers that the problems he first runs up against 
 are the very ones that were not covered in his 
 preparatory course. Unquestionably a month 
 on the road gives a man more experience than 
 six months in an office. Of course the prestige 
 of the house must not be allowed to be dam- 
 aged by inexperienced men, so it is advisable 
 to break in new salesmen in the straight can- 
 vassing of lists of names, instead of starting 
 them right out to interview bond buying banks, 
 and old customers. 
 
 This method of training has two distinct ad- 
 vantages. If a particularly attractive but high 
 priced candidate comes along he can be given 
 a try out at a higher salary than would ordi- 
 narily be paid in the knowledge that develop- 
 ments will show very quickly whether or not 
 he possesses the elements of ultimate success. 
 
76 THE HUMAN SIDE OF BUSINESS 
 
 In the second place, a moderate priced man can 
 be given more time to make good if his entire 
 effort is devoted to productive work. For some 
 years the writer has adhered pretty closely to 
 an automatic stop-loss in the case of new sales- 
 men by dispensing with the services of a me- 
 dium priced man when his salary and expenses 
 exceeded his sales profits by $500 and with 
 those of a high priced man when his deficit 
 reached $1,000. This rule however is inter- 
 preted more liberally in the case of a road man 
 than in that of a city man on account of the ex- 
 penses of the former accruing the more rapidly. 
 Also it is waived where it is evident that a 
 salesman has real ability and will unquestion- 
 ably succeed if given time to overcome particu- 
 larly difficult conditions. By way of illustra- 
 tion, one man in a virgin territory ran behind 
 nearly six hundred dollars the first year but 
 justified the confidence in him by returning 
 profits of $15,000 the second and $30,000 the 
 third year. 
 
 After a man makes good on missionary work 
 it is fair to him and profitable to his employer 
 to give him a developed territory as soon as 
 one is vacant. Another recruit can then be 
 started on the missionary work where the pre- 
 vious one left off. Up to a certain point the 
 
TRAINING MEN 77 
 
 matter of the relative value of different terri- 
 tories is not to be considered, for an incom- 
 petent salesman will be a failure in a rich and 
 developed territory while his more competent 
 confrere will be a success in a sparsely settled 
 and undeveloped field. In the first instance, 
 therefore, it is not a question of the territory 
 but of the man, and the salesman who blames 
 his territory for his poor results would better 
 devote a little time to introspection; but as a 
 salesman in a minor territory develops in abil- 
 ity and earning power, he can be transferred 
 profitably to a major territory where the op- 
 portunities for profits are larger both for the 
 house and for the man. This is the most logical 
 and practical way to reward a salesman for 
 good service and to promote him in recognition 
 of results obtained. 
 
 It is much easier to point out why one man 
 does not succeed as a salesman than it is to tell 
 why another does. In a previous chapter some 
 of the attributes of success were given. Here 
 it is pertinent to name some of the causes of 
 failure. They are mainly (1) conceit, (2) in- 
 temperance, (3) laziness, (4) inefficiency, (5) 
 insincerity, (6) poor judgment, (7) excessive 
 outside diversions, (8) domestic handicaps. 
 One of the two faults first named can usually 
 
78 THE HUMAN SIDE OF BUSINESS 
 
 be blamed when a promising career is blighted 
 after it has begun to bear fruit. To the others 
 can be traced the reasons why other careers 
 never pass even the experimental stage. 
 
 More bond men have been spoiled by conceit 
 than by anything else. Salesmanship is a busi- 
 ness of comparatively quick results. When a 
 young man attains prominence in the profes- 
 sion and a compensation large for his age and 
 experience, without the years of training and 
 devotion to detail that are required in other 
 lines of business, he is apt to exaggerate his 
 own ability and importance and to forget that 
 a large part of his success is due to the reputa- 
 tion of his house, the quality of the goods it 
 gives him to sell, the manner in which it backs 
 up his efforts and finally to such fortuitous cir- 
 cumstances as may work in his favor through 
 the nature of prevailing conditions. The result 
 is that he places an abnormal valuation upon 
 his services, and sacrifices his opportunities, 
 just as they are about to yield him large re- 
 turns, by becoming dissatisfied with his posi- 
 tion, and making a new affiliation, or else in his 
 over-confidence he rests on his laurels. In 
 either event he loses his momentum, and slips 
 back so far that he fails to recover it. To use 
 a trite expression, it is difficult for a young man 
 
TRAINING MEN 79 
 
 to keep his head level when he enjoys too sud- 
 den prosperity. The ruinous effects of intem- 
 perance are now too generally recognized to 
 require more than the mere statement that the 
 bond business is not immune from them, and 
 within the writer's knowledge more than one 
 bright future has been obliterated by this evil, 
 notwithstanding extreme precautions to avoid 
 the employment of men so addicted. 
 
 Of all the numerous causes for either com- 
 plete or partial failure in the initial stages, none 
 is more prevalent than laziness or lack of appli- 
 cation. The difficulty nowadays is to find men 
 who will really work. Short cuts to the royal 
 road to wealth are in great demand. Hard 
 work is at a discount. Of the business virtues, 
 the greatest is ability to work. A brilliant mind 
 is too often housed in a lazy body; much better 
 that a man possess an average mind and realize 
 that application has to make up for him what 
 he lacks in quick wit. Often the plugger gets 
 the greatest results, for he does not sputter and 
 miss fire but keeps at it with dogged determi- 
 nation. Brilliancy, personal charm, analytical 
 ability and fluency of speech are all of second- 
 ary importance for there is no question but that 
 in the selling game what a man accomplishes 
 is in direct proportion to the effort he expends. 
 
80 THE HUMAN SIDE OF BUSINESS 
 
 A salesman who interviews twenty investors a 
 day will make twice as many sales as though 
 he sees only ten in the same time. Systematic^ 
 and sustained eflfort takes will power, and it is 
 so much easier to do something more pleasur- 
 able that unless a salesman keeps a firm grip on 
 himself he unconsciously "loafs on the job", 
 and when this insidious habit is formed, it is 
 very hard to throw off. Hard work then is the 
 keynote of all the attributes of success. 
 
 Inefficiency — absence of ability to do a thing 
 right, incompetency in little things, and shift- 
 lessness in thought and action — is the greatest 
 point of waste in the industrial machine. Of 
 all the text books that have ever been written 
 for this or any other business, not one can 
 touch the "Message to Garcia" by Elbert Hub- 
 bard, and no one's education is complete if he 
 has not read this. There are only two ways to 
 do a thing — one the right way, the other the 
 wrong way. How many the men who try to 
 find a compromise between them ! Half of an 
 executive's nervous energy is consumed in 
 counteracting and preventing the waste and 
 errors of ordinary incompetency on the part of 
 employees and subordinates. The man who can 
 do a thing right without being told always 
 makes a quick trip to the top of the ladder. 
 
TRAINING MEN 81 
 
 Insincerity is the foe to one's ability to in- 
 spire confidence, the greatest asset of a sales- 
 man. Poor judgment causes a man to do 
 things that he would not otherwise do, or to 
 omit doing things that he should do and it is 
 the root of the majority of his mistakes. Too 
 many outside diversions encroach upon one's 
 time but more particularly upon his thought, 
 for the brain of the successful salesman cannot 
 stop working when the clock strikes five. And 
 last but not least, a man's progress in business 
 is influenced greatly by the kind of support and 
 inspiration he receives from his family. 
 
 The real training of men is only begun in the 
 trying out process. That is merely the first 
 step, for the ultimate success of an organiza- 
 tion depends upon how it is handled after it 
 reaches the producing stage, which is the sub- 
 ject of the next chapter. 
 
CHAPTER VIII 
 
 PERSONAL SALES MANAGEMENT 
 
 The productivity of any sales organization is 
 mercurial in that it increases and decreases ac- 
 cording to the ability and force of its head. It 
 is susceptible to active stimulation and as 
 quickly lapses into inertia when the pressure 
 behind it is removed. Salesmen are tempera- 
 mental and quickly absorb the optimism or the 
 lassitude of their manager. Consequently close 
 attention to the men and direct contact with 
 them is essential at all times. A sales manager, 
 to get large results, must inspire confidence in 
 his subordinates, must be one of them and yet 
 maintain an attitude of dignity, must be 
 friendly and yet not familiar, must have force, 
 originality, personality, driving power, un- 
 bounded optimism and a buoyant whole- 
 hearted disposition. He must direct, correct 
 and discipline, but avoid being hypercritical, 
 faultfinding or moody. He must be plain- 
 spoken and sincere, avoiding subterfuge and 
 evasion. He must be able to warm up to his 
 subject, and enthuse his men so that they in 
 turn will communicate their enthusiasm to 
 
 (82) 
 
PERSONAL SALES MANAGEMENT 83 
 
 their customers. This capacity to develop ar- 
 dent teamwork, to arouse the men to a high 
 pitch as often as occasion requires, and to keep 
 them pulling steadily in the intervals, is the 
 test of managerial ability and the determining 
 factor in the distributing power of the bond 
 house. In a large organization with multiple 
 offices it is well nigh impossible for the various 
 heads to know all of the salesmen, and this fact 
 frequently causes a feeling to exist upon the 
 part of the employees that they are ignored by 
 the members of the firm, whereas the latter are 
 often embarrassed at not knowing whom they 
 should know and at their helplessness to cor- 
 rect the situation. As the connecting link, the 
 sales manager should know each man individu- 
 ally, should be familiar with the conditions in 
 his territory, should be able to recall his more 
 important transactions and should always be 
 on the alert to drop a happy remark whenever 
 the opportunity presents. He must be able to 
 make each man feel at home with him when 
 alone or, when gathered together in meeting, 
 should be able to address the men forcibly and 
 magnetically, and last but not least he must 
 have a thorough technical knowledge of the 
 bond business, and enough originality to know 
 how to apply it efifectively. The reader may 
 
84 THE HUMAN SIDE OP BUSINESS 
 
 remark that very few sales managers come up 
 to these specifications. True, but there are 
 very few live sales organizations, and where 
 the one does not exist, the other cannot be 
 found. 
 
 The sales manager must know the difficulties 
 his men encounter, how they handle their cus- 
 tomers, their personal troubles, their financial 
 difficulties, their hopes and their aspirations. 
 He must watch their progress without let-up, 
 must know how they are working and how 
 much. Each lead must be followed, every pro- 
 posed or possible transaction considered and 
 note taken of every call in the field. For this 
 purpose, a report (preferably written on a 
 filing card) of each interview is the most ade- 
 quate means available. At one time the writer 
 personally went over from four to five hundred 
 of these reports a day, which in itself was no 
 trivial task, until the pressure became so great 
 that it had to be distributed among divisional 
 sales managers. 
 
 Each day as intricate trades come up they 
 must be discussed over the long distance tele- 
 phone so the sales manager has to be at the 
 beck and call of his men, for if the man in the 
 field cannot consult the one in authority when 
 necessity demands, the trade may fall through 
 
PERSONAL SALES MANAGEMENT 85 
 
 and the interest of the salesman jeopar- 
 dized. Whenever an important piece of financ- 
 ing requires immediate .attention, the field 
 men must be reached and their modus oper- 
 andi outlined to them, and those who are 
 quickest to grasp the significance of the 
 operation and to put their plans into effect, 
 secure the cream of the business. A man's 
 earning power as a salesman is determined in 
 no small measure by his ability to seize a 
 sudden opportunity and to make the most of 
 it, for while the steady day to day selling pro- 
 vides his bread and butter, it is usually the 
 whirlwind work on new bond issues that buys 
 his automobiles. As a matter of psychology 
 also, if the customers can be stampeded they 
 can be sold more quickly and with less effort 
 than in any other way. The salesman who 
 leaves his prospect with a promise from the 
 latter that "he will think it over" need never 
 worry about whether he should buy a Packard 
 or a Pierce-Arrow. The real salesman is the 
 one who can close his order at the time. 
 
 Team work and esprit de corps are augmented 
 by daily sales letters from the house. These 
 should contain financial news items pertaining 
 to the issues being offered, comparisons with 
 other securities and all possible data pertinent 
 
86 THE HUMAN SIDE OF BUSINESS 
 
 to the business, for salesmen as a rule are not 
 students and their information must be pre- 
 pared for them and set before them in an appe- 
 tizing manner. Furthermore, the supply of 
 financial ammunition should be inexhaustible 
 for they will absorb only a certain percentage 
 of it, and the greater the amount furnished 
 them, the greater the amount they will absorb. 
 Also, what will interest one and be of assist- 
 ance to him will be passed over unappreciated 
 by another. A sales letter is like a newspaper 
 in that different readers utilize or are bene- 
 fited by different parts of it. 
 
 Many sales letters are merely collections of 
 soporific financial verbiage. They abound in 
 dry statistics and in general street gossip 
 clipped from the Wall Street dailies. Such let- 
 ters are about as enthusing as a coal stove with- 
 out a fire in it. When a salesman in some up- 
 state town several hundred miles from home, 
 has been up early and late in all kinds of 
 weather and worked hard all week without 
 signing up an order, has slept on a hard bed and 
 eaten unpalatable food, feels generally down in 
 the mouth and has about come to the conclu- 
 sion that the other business he might have gone 
 into would have been much more productive, 
 at such a time he does not want notes from the 
 
PERSONAL SALES MANAGEMENT 87 
 
 home office telling him his faults, or sales let- 
 ters that read like lessons in college algebra, 
 but he wants encouragement and inspiration. 
 The sales letter to be of any real use, must be 
 personal and sympathetic, it must convey a 
 spirit of confidence and of good cheer and must 
 have an all pervading atmosphere of "now 
 fellows, let's get together". It should illustrate 
 in an interesting manner how the other man 
 just closed a nice sale from what seemed a 
 hopeless prospect, it should make the salesman 
 in the backwoods town realize that he is right 
 in touch with his office and that they are meta- 
 phorically slapping him on the back and telling 
 him to "go to it", and it should start him out on 
 his day's work with renewed confidence in him- 
 self and the firm determination to wire in a nice 
 order before the day is over. 
 
 Perfunctory sales meetings have their limi- 
 tations. They are of the most value when a 
 new issue is to be offered and it is desired to 
 post the men collectively on it. They accom- 
 plish a certain amount of good in coaching the 
 men but as a method of instruction are prob- 
 ably not as efficient as a well written sales let- 
 ter, simply because things are better under- 
 stood and remembered when read. Trips over 
 properties are more or less beneficial in the 
 
88 THE HUMAN SIDE OF BUSINESS 
 
 early stages but after a man has made two or 
 three of them their value to him decreases. 
 Their two chief functions are (1) to give the 
 salesmen an opportunity to get better ac- 
 quainted with each other, and (2) to enable 
 them to say to a customer "Mr. Jones, I have 
 just been over that property and it is a won- 
 der", for strange as it may seem a buyer seems 
 to be more susceptible if a salesman can relate 
 a few personal experiences, and can say in all 
 truthfulness that he has just inspected a cer- 
 tain company and knows that it is there. In 
 other words the personal side lights of the 
 salesman frequently seem to have more effect 
 than the cold material facts of a greater real 
 importance, that are published authoritatively 
 by the house back of the bond issue. Trips, 
 however, are expensive and may cost as much 
 as ^% to 1% of the par value of the bonds to 
 be sold. Furthermore, since the composition 
 of a sales force is changing all the time, it is a 
 question whether the perrnanent benefit is pro- 
 portionate to the expense. 
 
 As a method of encouraging good fellowship 
 and building up a potent realization of the 
 dynamic force of the organization, as well as 
 being an educational institiition, the writer has 
 always been a great believer in business din- 
 
PERSONAL SALES MANAGEMENT 89 
 
 ners, held not once or twice a year, but every 
 month or six weeks, and attended by all the 
 men working under a given office. These din- 
 ners should be informal and free from stiffness, 
 but should not be allowed to degenerate into 
 mere social gatherings. They should be de- 
 voted to talks and general discussions in which 
 all can take part. The writer has always made 
 it a practice to hold them in the evening when 
 the men felt relaxed, and he has always endeav- 
 ored to provide a programme that would hold 
 the interest up to the last minute, and encour- 
 age the men to get into the spirit of the occa- 
 sion. The picture of the business, the serious- 
 ness of it, the importance of each man to it and 
 his wonderful opportunities are always kept in 
 the forefront. This purpose has been carried 
 out even to the placecards, a few of which are 
 given here by way of illustration, and to em- 
 phasize a point of view in the handling of sales- 
 men.* These little fables or parables, whichever 
 they be called, are for the most part based upon 
 actual occurrences within the writer's observa- 
 tion or upon his experience as a sales manager. 
 In handling salesmen collectively, whether 
 in writing or orally, the writer has always en- 
 deavored to avoid a stilted manner even at the 
 risk of using too many colloquialisms or resort- 
 
 *See pages 90 to 94 inclusive. 
 
90 THE HUMAN SIDE OF BUSINESS 
 
 ing too much to slang, realizing from experi- 
 ence that it paid best not to be technical but to 
 develop the punch and cooperation that was 
 desired. 
 
 By keeping in close touch with each and 
 every situation of every man through careful 
 handhng of his daily reports, by publishing 
 
 SALESMANSHIP vs. ORDER TAKING 
 
 THE ORDER TAKER follows the Path of Least Resistance. 
 He shuns study, works by the clock, and is satisfied to live on 
 the Crumbs that fall his way. He stays in a rut. Opportunity 
 avoids him and he blames his luck, his territory, his firm and 
 his associates for his Lack of Progress. He never rises above 
 the low water mark of Mediocrity but always remains an 
 Order Taker. 
 
 THE SALESMAN eats work and forget* time. He keeps posted 
 on facts and conditions and knows whereof he speaks. He 
 works for the joy of working and thrives on the Spirit of the 
 Chase. His Optimism banishes discouragement, hard luck and 
 disappointment. He is a Financial Adviser. He leads his cus- 
 tomers and they follow. He grows day by day, Happiness is 
 His and life is real. For the true Salesman, the sky is the 
 limit. 
 
 MORAL: "There is more to the Bond Business than merely 
 knowing the difference between Cost Price and Selling Price." 
 
 bullish sales letters and by bringing the men 
 together frequently at the sales dinners, it has 
 been found unnecessary to have the men come 
 in off of the road every Saturday to report to 
 the office, and what is thus saved in railroad 
 fare, and in the work being less interrupted, 
 very largely offsets the cost of the dinners and 
 greatly increases the efficiency of the entire or- 
 ganization. 
 
PERSONAL SALES MANAGEMENT 91 
 
 From the information given in this chapter 
 it is seen that successful sales management is 
 not only based on the technical side of business, 
 but is largely a matter of the training and 
 handling of men, and that these two latter are 
 interdependent in that one can not be separated 
 from the other. A sales organization is like a 
 kaleidoscope. Its personnel is ever changing. 
 
 EFFICIENCY OF OPERATION 
 
 WE ONCE had a man who "sold bonds with his feet". For a 
 while they "paid good dividends" but gradually through the 
 entire Neglect of his Mental Upkeep and constant Decrease in 
 his Street Mileage, the "dividends" were reduced and finally 
 passed altogether. And then came the Scrap Heap. 
 
 Some Men are Active Physically and Lazy Mentally, others Ac- 
 tive Mentally and Lazy Physically. One trait is as costly as the 
 other. It takes the Maximum of both Thought and Energy to 
 'win Real Success. Anything less is a Waste of Opportunity. 
 
 Join the Movement for Bigger, Better and Brighter Salesmen. 
 It's Worth While. 
 
 The men at the top must be kept satisfied and 
 their producing power must be maintained, the 
 men half way down the line must be encour- 
 aged to greater effort, and helped to reach the 
 top, and such of those at the bottom as clearly 
 show they can never rise above it, must give 
 way to others to be tried out. The status of 
 the organization is maintained only by being 
 replenished constantly with new material, the 
 best of which will push up through the rest and 
 
92 THE HUMAN SIDE OF BUSINESS 
 
 help to keep up the standard, and the balance 
 will seek its level. 
 
 The most discouraging and most trying fea- 
 ture of sales management is that an organiza- 
 tion cannot be developed to a certain degree of 
 efficiency, and then made to "stay fixed" but 
 
 DISTANCE LENDS ENCHANTMENT 
 
 A COUNTRY SALESMAN once asked to be transferred to the 
 Metropolis where Investors were as thick as Flies, where good 
 Bonds, to be Appreciated had but to be Seen, and One didn't 
 have to be told how to Clip a Coupon; where the Agonizing 
 Voice of the Call Boy was stilled and the Inexorable Itinerary 
 unknown; and where, on every street comer, stood Oppor- 
 tunity and Fortune waiting to be approached by the gallant 
 Bond Man. 
 
 A CITY SALESMAN, at the same time, tiring of the hard 
 Paved Streets, longed for the Green Fields, the Trees and 
 Running Brooks; for the Country where the Farmers "cashed 
 in" the High Cost of Living and bought Automobiles and 
 Bonds with equal Abandon; away from Noise, Confusion and 
 Keen Competition, and where an Ounce of Eloquence out- 
 weighed o Ton of Knowledge and Information. 
 
 And Each, overlooking the Pot of Gold at hit Feet, wanted to 
 chase the Rainbow on the Horizon. 
 
 Moral: Every Other Fellow's Territory looks better than One's 
 Own. 
 
 just as much thought and energy must be ex- 
 pended to maintain its efficiency as was re- 
 quired in the first place to create it. Only a 
 very srnall proportion of men responds in the 
 same degree as the impulse that is directed 
 upon them. Probably it is well that they do 
 not, or an organization might burst like a fly 
 wheel from being run at too high a speed. 
 
PERSONAL SALES MANAGEMENT 93 
 
 At last analysis, then, the success of any 
 salesman depends first upon himself and sec- 
 ond upon his house. The question has often 
 come up how the credit for results obtained 
 should be divided, assuming that the house and 
 the quality of its goods be beyond criticism. 
 The writer has usually answered the question 
 this way: — In the case of a star salesman the 
 
 GAUGING THE CUSTOMER 
 
 A SALESMAN once lamented that no Customer of His could 
 buy more than Five Bonds at a time. We replied this could 
 not be so but that he was gazing at his territory through the 
 Small End of the Telescope. It was evident he had either 
 failed to locate the Big Ones or did not know how to "land" 
 them, or else did not approach them in a Big Way. 
 
 We counseled him that if he would flatter their Vanity by talk- 
 ing Blocks of Twenty-five instead of depreciating their buying 
 power and his own salesmanship by being satisfied with Ones 
 and Twos, he would be surprised at the Result. 
 
 The Salesman was Wise, and took the Hint. The next week he 
 reported three Ten Thousand Dollar Transactions. 
 
 Moral: A Customer is only as Big as the Man who sells him. 
 
 credit should go two thirds to the man and one 
 third to the house, for such a salesman ad- 
 vances the house as well as himself; while in 
 the case of an inferior salesman the credit 
 should be divided two thirds to the house and 
 one third to the salesman for such a man is 
 pulled along by his house and thus retards its 
 progress. Consequently it is not possible to 
 work out any conclusive answer or final pro- 
 
94 THE HUMAN SIDE OF BUSINESS 
 
 portions governing division of credit between 
 the house and its employee. 
 
 The same thing applies to the time honored 
 controversy between the buying department 
 and the sales department. The buying depart- 
 ment maintains that a thing well bought is half 
 sold, and therefore it is entitled to the larger 
 share of the credit. The sales department 
 maintains that if a thing could not be sold, it 
 
 THE SPORT OF SALESMANSHIP 
 
 SOME SPORT is Work and some Work is Sport. Real Sales- 
 manship is Work but it should also be real Sport. If you like 
 to do a thing, it is Sport, if You dislike it, it is Work. The 
 Successful Salesman likes his Work and he therefore gets 
 Sport out of it. The Man who dislikes it, finds it Drudgery, 
 and He is Unsuccessful. 
 
 If a Man is a Good Salesman, He is usually a Good Sport, and 
 conversely, a Man who is a Good Sport is usually a Good Sales- 
 man. 
 
 Be a Good Salesman and a Good Sport. 
 
 could not be bought therefore the sales depart- 
 ment deserves the honors. The writer does 
 not profess to be competent to settle this much 
 mooted question, but nevertheless he has usu- 
 ally found that the buying department could 
 buy as much as the sales department could sell 
 under normal conditions and therefore the 
 work of the sales department was the more dif- 
 ficult and required the greater ingenuity. This 
 is purely an academic question and is only cited 
 
PERSONAL SALES MANAGEMENT 95 
 
 here by way of illustration simply because 
 many salesmen reach a certain point in their 
 careers where they take unto themselves too 
 great credit for the results that their sales rec- 
 ords show. 
 
♦CHAPTER IX 
 THE DEVELOPMENT OF THE BOND BUSINESS 
 
 The bond is an instrument of credit. The 
 bond holder is a creditor. He loans his surplus 
 wealth and receives thereon a fixed rental in 
 the form of interest and a promise of repay- 
 ment at a fixed time. So long as the covenants 
 of the contract are complied with he has no 
 control over the property securing his loan. 
 However, if default is made in the terms of the 
 contract the bond holder can theoretically take 
 possession of the property for he has a claim 
 upon it prior to any one not so secured. The 
 stockholder, on the other hand, is the owner 
 and operator of the property. After paying 
 the interest and other fixed charges, he is en- 
 titled to the profits of operation or if the prop- 
 erty be sold he is entitled to the proceeds of the 
 sale over and above the claim of the bond 
 holder. 
 
 The right of property or ownership goes 
 back to the beginning of man. No doubt 
 equally ancient is the institution of credit 
 which is no more than the ability of one person 
 
 ♦See Introduction. 
 
 (96) 
 
DEVELOPMENT OF BOND BUSINESS 97 
 
 to borrow the property of another and to pay 
 for the use thereof. Probably, in the Stone 
 Age, debentures were inscribed on boulders. 
 As property rights became more clearly de- 
 fined and better safeguarded the instruments 
 of credit became more specific and constantly 
 afforded better protection until today we have 
 the highly developed corporation mortgage. It 
 is not my purpose to trace the history of prop- 
 erty and credit for the subject is inexhaustible, 
 nor do I even want to attempt to outline the 
 early forms of bond issues for that is historical 
 rather than practical and would require more 
 study on my part than the importance of this 
 particular phase of the subject warrants. 
 
 Going back, however, fifty years to the dark 
 days of the Civil War, we find that the Na- 
 tional Government had to borrow large sums 
 of money at what would now seem to be exor- 
 bitant rates of interest. But when we realize 
 the enormous destruction of property at that 
 time, the great scarcity of gold, the much 
 greater purchasing power of the gold dollar, 
 the depreciated value of paper currency and 
 finally the unstable condition of the Central 
 Government, we can appreciate the risks that 
 capital took and also the task that the bankers 
 for the Government had on their hands. Fol- 
 
98 THE HUMAN SIDE OF BUSINESS 
 
 lowing the close of the war and during the re- 
 sulting unsettled conditions in the South, the 
 "Carpet Baggers" took advantage of the situa- 
 tion and issued millions upon millions of dol- 
 lars of municipal securities for which, in many- 
 cases, the municipalities received little or no 
 benefit. This resulted in the era of repudiation 
 that subsequently followed. Then came in the 
 VO's the period of wild-cat railroad construc- 
 tion and over capitalization and the issuing of 
 many millions of railroad bonds by over san- 
 guine or loose managements. 
 
 All of these influences naturally more or less 
 discredited the general class of bonds as safe 
 investments and it is not surprising that the 
 best municipalities and railroad corporations 
 had to pay seven and eight per cent, for money 
 and even now some of the old sixes are still out- 
 standing. 
 
 It was with these conditions yet fresh in 
 peoples' minds and with the laws restricting 
 the creation of debt by cities and counties loose 
 or defective, that the modern distributing 
 banking houses began their uphill fight. In the 
 '80's and even in the '90's there were long 
 profits in municipals, but then it was some 
 work to sell them. While the popular taste for 
 Western municipals was being developed, the 
 
DEVELOPMENT OF BOND BUSINESS 99 
 
 larger trunk line railroads were developing and 
 getting on a firmer foundation and their securi- 
 ties becoming better established. Then came 
 the financing of gas and water companies, and 
 of horse-car and cable lines and after that the 
 building of electric light plants, and then in the 
 '90's, the electrification and consolidation of 
 the passenger railway lines, and after that the 
 building of the interurbans. All the while, the 
 steam railroads were pushing out and extend- 
 ing their systems and swallowing up other 
 roads and double tracking, and building termi- 
 nals, and issuing improvement mortgages, and 
 purchase money mortgages and general mort- 
 gages. 
 
 While these things were going on, the coun- 
 try was becoming readjusted, and established 
 on a solid foundation and wealth was increas- 
 ing and people were saving money and invest- 
 ing it. And as one class of securities won the 
 public confidence, the rates of interest for that 
 class gradually fell and the investors sought 
 another class to get a better yield, and so on 
 from one class of bonds to another. And as 
 each class of investments became established 
 in peoples' confidence and it became easy to 
 raise money for that class — over construction 
 and over confidence and over capitalization 
 
100 THE HUMAN SmE OF BUSINESS 
 
 took place and so it has been through the ages 
 and so it probably always will be. Recently 
 this has been typified by the enormous develop- 
 ment of holding companies, buying everything 
 in sight and paying for it with preferred and 
 common stocks, and by the flood of heavily 
 capitalized industrials running the gamut of 
 everything from locomotives and automobiles 
 to five and ten cent stores. 
 
 Taking up the thread again, we find at the 
 close of the last century the greatest industrial 
 development that the country has ever wit- 
 nessed. Trade was booming and everybody 
 was making money and credit was expanding 
 and bankers working overtime trying to manu- 
 facture securities fast enough to take care of 
 the enormous investment demand. Money had 
 never been so cheap before. New York Cen- 
 tral 3>^'s sold at 113^. Cities like New York 
 and Philadelphia were putting out 3's, and 
 even some of the railroads of lesser importance 
 put out 3's and 3}^'s, though at a discount. 
 1899 to 1900 saw the climax of this movement 
 and in 1901 the pendulum started in the other 
 direction. From then until today with slight 
 interruptions, there has been a steady decline 
 and we are getting back again to a period of 
 relatively high money rates. How far this 
 
DEVELOPMENT OF BOND BUSINESS 101 
 
 present movement will go, it is impossible to 
 say, but the turn has to come some time for the 
 pendulum cannot swing in one direction for- 
 ever. Some people pretend to say that we will 
 never see another 3% investment rate. That 
 statement is, however, impossible to prove, 
 but it will probably be many years before rates 
 are so low again. 
 
 In 1901 the municipal bond business had 
 seen its palmiest days as far as the banker was 
 concerned. Steam railroad bonds were in high 
 favor. Gas and water bonds were well estab- 
 lished and fairly popular, but difficult to pur- 
 chase on account of the scarcity of the issues. 
 Street railway, electric light and power and 
 hydro-electric securities had had their ups and 
 downs and it required intelligent salesmanship 
 to place them. 
 
 The past ten years however have seen the 
 last named bonds steadily increase in popular- 
 ity. With growing experience, bankers have 
 learned how to separate the good from the bad, 
 and how to safeguard the investor; also the 
 constantly increasing cost of living and the 
 continued declines in the prices of "rails" have 
 forced home on bond buyers the advantage of 
 properly secured "utilities". Likewise, the fact 
 that public service companies supply public 
 
102 THE HUMAN SIDE OF BUSINESS 
 
 necessities for which the demand is constant, 
 insures a permanency of earning power which 
 increases with the growth of population while 
 steam railroads and industrials are more or less 
 subject to general business conditions. Fi- 
 nally, the generally prosperous condition of 
 the country over a long period of years has 
 created a multitude of investors, and during 
 the past few years the high-class magazines 
 and periodicals and the educational work of 
 bankers have taught the people the advantages 
 of good bonds. The result is that never before 
 in our history have public utility securities 
 been so well regarded and so popular. 
 
 Before passing on to the next point in the 
 discussion, it may not be amiss to read you an 
 article which I contributed to the 1912 Annual 
 Financial Review of the PubHc Ledger. It is 
 as follows: 
 
 "Some people try to combine speculation 
 with investment in buying bonds and, as a re- 
 sult, accomplish neither purpose. Theoretic- 
 ally, a bond is the safest form of investment. 
 Obviously, therefore, it should have the small- 
 est element of risk. That which has no risk 
 has no speculative value. Conversely, anything 
 that is speculative has risk. If you have a dol- 
 lar, you can either invest it or you can specu- 
 
DEVELOPMENT OF BOND BUSINESS 103 
 
 late with it. No one dollar is big enough to do 
 both kinds of work at the same time. This may 
 sound elementary, but it is surprising how 
 many people have not learned the lesson." 
 
 "There are hundreds of ways in which 
 money can be risked with the hope of getting 
 an abnormal return, but there is only one way 
 in which to invest in bonds, and that is to put 
 the point of safet)'^ above all others. If bonds 
 are bought because they are safe, the buyers 
 should be satisfied with a normal return and 
 should expend his energies toward getting the 
 greatest factor of safety commensurate with 
 the rate of interest he must have." 
 
 "There are degrees of safety in investments, 
 as in mechanics. A bridge need have only a 
 reasonable margin over the greatest weight 
 that can be placed upon it. Any greater factor 
 than this is a waste of material. A security 
 should have all the elements to make it safe 
 beyond question, but it need not possess such a 
 high degree of perfection that it becomes a lux- 
 ury, for then it is a partial waste of investment 
 capital. In other words, for the average in- 
 vestor, the most satisfactory bonds are not the 
 low rate municipals or high-grade underlying 
 rails, but properly selected public utilities 
 yielding in the neighborhood of 5 per cent." 
 
104 THE HUMAN SmE OF BUSINESS 
 
 "The basis of sound investment is knowl- 
 edge and experience, not the necessarily super- 
 ficial information of the layman, but the spe- 
 cialized training of the most careful of invest- 
 ment bankers. Only through the broad experi- 
 ence of years, gained by financing a large num- 
 ber of securities under widely diflferent condi- 
 tions, is a firm qualified to make the rigid con- 
 structive investigation which will enable it to 
 recommend to its customers an issue, with an 
 assurance of permanent stability. It is the ap- 
 plication of intelligent methods, derived from 
 this thorough school of experience, that is the 
 investor's safeguard, and an outline of a few of 
 the lessons taught may not be amiss in this 
 financial review." 
 
 "A few years ago the theory was that, to be 
 choice, a bond had to be secured by a first mort- 
 gage, and a closed one, at that. However, the 
 views of bankers have changed and the old idea 
 of binding a company hand and foot has given 
 way to the broader view of allowing more dis- 
 cretion to the management under proper re- 
 strictions. It is not a question of how much is 
 ahead of a security, but of how much is behind 
 it. Our country and its resources are develop- 
 ing rapidly, and the facilities required by the 
 people must keep pace with the growth of 
 population." 
 
DEVELOPMENT OF BOND BUSINESS 105 
 
 "It is impossible to anticipate corporate 
 financing very far ahead. Consequently, if a 
 mortgage is too closely limited in amount it is 
 quickly outgrown and refinancing at advan- 
 tageous terms may prove difficult. This is a 
 disadvantage to the bondholder and may prove 
 a drain upon the property securing his obliga- 
 tion. It is far better that a mortgage be made 
 large enough to take care of the corporate ne- 
 cessities for years to come. The security 
 holder can be amply protected by providing 
 that bonds can be issued for only 80 per cent, 
 of the actual cost of new property, and then 
 only when gross earnings are five times and 
 net earnings one and three-quarters times the 
 fixed charges upon all bonds outstanding and 
 proposed to be issued. An additional safe- 
 guard frequently employed is the creation 
 through the mortgage of an annual mainte- 
 nance and depreciation fund." 
 
 "The essential margin of net earnings over 
 fixed charges depends upon conditions. One 
 security requires more than another. The 
 smaller the company, the larger should be the 
 margin. Under normal conditions a ratio of 
 two to one is ample. In the case of very large 
 corporations, if the net is one and one-half 
 times the fixed charges, this is usually suffi- 
 
106 THE HUMAN SmE OF BUSINESS 
 
 cient, as the earning power is less affected by 
 ontside conditions and the final surplus is suffi- 
 cient to take care of unforeseen contingencies." 
 
 "Unfortunately, in many published state- 
 ments the true earnings are disguised or clev- 
 erly arranged to give a wrong impression. The 
 writer recalls one very prominent case where, 
 under the caption of "operating and other ex- 
 penses" were included the fixed charges on a 
 very large amount of underlying bonds. This 
 presumably was done to give the impression 
 that the resulting net earnings were twice the 
 fixed charges of the company, whereas the 
 margin over the total fixed charges was dan- 
 gerously narrow." 
 
 "This is an abuse that is common to many 
 holding companies. Where a corporation con- 
 trols a number of subsidiary companies and the 
 earnings of the latter are carried forward into 
 the parent company treasury, the income ac- 
 counts of all the companies concerned should 
 be closely scrutinized, and unless the total net 
 earnings show a very comfortable margin over 
 the total fixed charges, the parent company's 
 bonds should be let alone, even though the car- 
 ried forward surplus earnings of the subsidiary 
 companies are two or three times the fixed 
 charges on the parent company's bonds. This 
 
DEVELOPMENT OF BOND BUSINESS 107 
 
 is a matter of the greatest importance in buy- 
 ing corporation bonds, and a pad and pencil 
 and a copy of a manual are an excellent pre- 
 caution." 
 
 "Earnings are figured differently by differ- 
 ent operators. One man will charge against 
 capital account items which another man 
 would properly charge against operation. One 
 manager will pro-rate over a long period of 
 years the expenses of contract solicitors, while 
 another manager will charge this into the year 
 during which the earnings were increased. 
 The experienced investment house has analyt- 
 ical accountants who are competent to go into 
 all the numerous matters of this character and 
 make up their own statement of earnings from 
 the company's books, for while few operators 
 purposely create a wrong impression as to 
 earning power, some draw the lines much less 
 closely than others, and the complexion of a 
 statement is frequently very much changed 
 after it has undergone a rigid examination." 
 
 "The future growth and stability of a terri- 
 tory have a greater bearing on the permanence 
 of an investment than the past successful oper- 
 ation of the company supplying it. It is better 
 to buy the bonds of a corporation earning a 
 relatively small margin over fixed charges, but 
 
108 THE HUMAN SIDE OF BUSINESS 
 
 operating in a rapidly growing section, than 
 it is to buy bonds of a company earning two or 
 three times its interest, but operating in a stag- 
 nant or declining community. The character 
 of the population and territory are also of great 
 importance; likewise, the greater the diversity 
 of business carried on by a corporation, the 
 more stable its earnings. All one-industry 
 communities, pleasure resort propositions and 
 similar opportunities should be passed by." 
 
 "The physical or replacement value of a 
 property is the cost of duplicating it in an 
 equally good condition to accomplish the same 
 amount of results with the same degree of 
 efficiency. If money has been wastefully spent 
 or property has been unnecessarily duplicated, 
 the junk value of the plant, but not the replace- 
 ment value, has been increased thereby. The 
 physical value of a property should be consid- 
 erably in excess of the total funded debt, other- 
 wise an agitation for lower rates might reduce 
 the earning power to a point where the margin 
 of safety was impaired. Probably replacement 
 value and earning power taken together are the 
 two most important points to be considered in 
 investigating the safety of a bond issue." 
 
 "There are experts and experts. The value 
 of a physical, legal or accounting examination 
 
DEVELOPMENT OF BOND BUSINESS 109 
 
 depends entirely upon the ability and reliability 
 of the man who makes it. The successful 
 investment banker must know his experts thor- 
 oughly and be able to size up which one is best 
 suited to make any particular examination." 
 
 "The influence of the personal equation must 
 be eliminated by having the report made by the 
 expert for the buyer and not by the expert for 
 the seller, for no matter how honest and honor- 
 able a man may be, he is unconsciously influ- 
 enced by the interests of his employer. Having 
 secured the reports from the legal, engineering 
 and accounting experts, these must be inter- 
 preted by the banker in accordance with his 
 experience and his knowledge of conditions. 
 He is the final concentrating force who har- 
 monizes the divergent elements and welds 
 them together in permanent financial sta- 
 bility." 
 
 "What makes a security marketable? List- 
 ing alone does not do it. It is supply and 
 demand; and the demand for a security 
 depends upon its intrinsic quality and upon its 
 having been properly 'placed' in the first 
 instance. A security that is weak in itself or 
 has been handled by a weak house will not 'stay 
 put'; likewise, even a good security, when not 
 sold to ultimate buyers, but placed in large 
 
110 THE HUMAN SIDE OF BUSINESS 
 
 blocks to institutions buying for a turn, will 
 have a 'soft' market until thoroughly absorbed. 
 On the other hand, when an issue of good 
 bonds is entirely distributed to actual invest- 
 ment buyers, the market will take care of itself, 
 for the normal demand will absorb any small 
 amounts offered for sale. Listing a bond issue 
 does not create buyers: it merely establishes a 
 printed quotation and a convenient method for 
 a seller and a previously created buyer to get 
 together. Properly placing a bond issue in the 
 beginning is of far more benefit to the holder 
 than having it listed on an exchange. The 
 responsible investment banker who does busi- 
 ness on a large scale is in the best position to 
 see that new issues are so placed that they will 
 afterwards enjoy a ready market." 
 
 "Some investors believe only in municipals. 
 Some only in railroads. Some only in utilities. 
 This may be termed 'vertical classification' and 
 is an absurdity. What the writer terms 'hori- 
 zontal classification' is the safe principle. In 
 other words, the best secured of the three kinds 
 of bonds mentioned is a good investment. No 
 one can say that all municipals are good, or 
 that all railroads are good, or that all utiUties 
 are good; but the best of any of these is a good 
 security and a good utility is far better than a 
 poor municipal." 
 
DEVELOPMENT OF BOND BUSINESS 111 
 
 "To illustrate, it is the writer's experience 
 that a good public utility paying 5 per cent, or 
 less is better than any railroad or municipal 
 yielding the same rate of income, and the aver- 
 age railroad paying A% per cent, is better than 
 the average municipal paying the same rate. 
 Each security should be judged on its own 
 merits and compared with its own class, and 
 only the best of any class should be selected 
 regardless of yield. If the best of one class 
 does not yield enough, do not take a poorer 
 bond in that class, but go to the best of the next 
 class." 
 
 "These are a few of the points encountered 
 in trying to arrive at a correct judgment in 
 buying bonds. There are, however, many other 
 things having a direct bearing on the situation. 
 Each security presents its own complications. 
 These require the most painstaking, thorough 
 and experieneed investigations. The layman 
 has not the means, ability, opportunity or 
 knowledge to do this, and even if he had, his 
 relatively small investment would not justify 
 the expense. Furthermore, the combined judg- 
 ment of an organization of trained experts 
 is better than the judgment of any one indi- 
 vidual can possibly be." 
 
 "The proper kind of an investment banker 
 
112 THE HUMAN SIDE OF BUSINESS 
 
 feels a deep responsibility toward his custom- 
 ers; not only the necessity of recommending to 
 each person the kind of security best suited to 
 his requirements, but the obligation to watch 
 over that security and see that it is not 
 impaired, and also if the customer desires to 
 realize upon his investment, to see that he 
 receives a fair market price for it." 
 
 "In the last analysis the subject of invest- 
 ments is so broad and it is so difficult to sepa- 
 rate the wheat from the chaff and so few people 
 are familiar with financial matters, that it is 
 more important to investigate the banker than 
 the security he is handling. If he has the repu- 
 tation, gained by years of successful business, 
 of giving every customer, whether large or 
 small, a square deal; of handling only securities 
 of the highest quality and of standing back of 
 them, and of making a market at a fair price 
 when a customer desires to sell, he is the man 
 whose advice should be taken and the value of 
 whose services should be appreciated." 
 
 Our aim and ever present ambition is: — 
 
 To sell bonds that are safe and which will always 
 remain so. 
 
 To make new customers. 
 
 To keep the customers already made satisfied and make 
 them strong advocates of our methods and our securities. 
 
DEVELOPMENT OF BOND BUSINESS 113 
 
 To build up an organization of clean self-reliant men. 
 
 To give everybody a fair and square deal, keeping the 
 size of the dollar forever in the background. 
 
 To lift our work above the level of a worldly grind and 
 make it a joy and an inspiration. Hard honest eifort 
 makes a clean mind, a healthy body and a cheerful spirit 
 and brings results that compensate. 
 
 The house that tries to make all its profit on 
 the first sale has a perpetual job hunting for 
 victims. One dissatisfied customer can cost 
 more business than will be made by two satis- 
 fied ones. Our success is dependent upon small 
 profits, repeat sales and a large volume of busi- 
 ness. For us there is no money in the first sale. 
 We must demonstrate that our goods are of the 
 highest possible quality. They must stand up 
 under the test. Confidence is a plant of very 
 slow growth and yields quickly to the frost of 
 suspicion. In watching the work of various 
 men over a period of years, I am satisfied that 
 the primal quality of salesmanship is the ability 
 to impress the prospective buyer with your sin- 
 cerity. No matter what the standing of the 
 house or the quality of the goods, if the sales- 
 man cannot inspire his customer with confi- 
 dence in his trustworthiness and in his knowl- 
 edge of his subject he is foredoomed to failure. 
 The man who can be trusted, who knows bis 
 
114 THE HUMAN Sn>E OF BUSINESS 
 
 business and who sells goods that are right in 
 quality and price, need not worry about cut 
 throat competition. 
 
 There is no question that our men are backed 
 up in a way that is not excelled, and I doubt if 
 it is anywhere nearly approached by any other 
 house. We employ a class of men of the highest 
 and cleanest type, we have a reputation that is 
 beyond question, we are well and favorably 
 known, we are "on the job", we are liberal in 
 our treatment of both customers and em- 
 ployees, we protect our bondholders in a more 
 than creditable manner and finally we handle a 
 class of goods that has stood the rigorous test 
 of time. 
 
 We do not claim to be the only good house in 
 the business. We are not afraid of competition 
 for "honest competition is the life of trade" and 
 the more people we have educating the public, 
 the more bond buyers there will be. Our 
 greatest competitor is the "home investment", 
 particularly the "local mortgage". Education 
 and plenty of it is the antidote for this. Prob- 
 ably our worst handicap is the fact that in no 
 other line of business is the buyer so ignorant 
 of the quality of the goods he is buying or so 
 helpless in distinguishing the good from the 
 bad. Therefore, confidence is an abnormally 
 
DEVELOPMENT OF BOND BUSINESS 115 
 
 large factor in our relations with our cus- 
 tomers. Also our trade is more apt to be sad- 
 dled with goods of inferior quality at low prices 
 bought from less reputable or less experienced 
 houses. 
 
 Meeting competition successfully calls for 
 plenty of tact and considerable psychology. No 
 buyer wants to have his own shortcomings 
 pointed out to him, nor does the world love a 
 knocker. Do not dig up the weaknesses of 
 your competitors' goods but speak well of the 
 good points, and then pound home with every 
 ounce of ability and energy you possess, the 
 strong and incomparable points of your own 
 security and boost your house. The average 
 buyer is not analytical. Know all the facts 
 about the bond you are selling, but do not 
 swamp the customer with figures unless he 
 invites them, and then be prepared to give him 
 all the information he wants. Cultivate his con- 
 fidence in you and in the house, and when 
 you have won it, your competitor is going to 
 have a hard task to displace you. Knowledge 
 is power and confidence is three-quarters of the 
 battle won. 
 
♦CHAPTER X 
 SALES METHODS AND AMMUNITION 
 
 In this series of talks a large number of 
 essential facts regarding the investment busi- 
 ness has no doubt been discussed and it is 
 important that you should be familiar with as 
 many of these as possible before attempting to 
 sell bonds, but to attain any degree of success 
 a salesman must have a good knowledge of the 
 bonds he offers before approaching a prospect. 
 A sale in this line of course is based upon con- 
 fidence in either the house or the representa- 
 tive, but generally both. Therefore to inspire 
 the confidence of the client by his knowledge of 
 the offering, the representative should be able 
 to discuss it without reference to his circular, 
 as he will be more likely to hold his customer's 
 attention and at the same time form an opinion 
 of his peculiarities. As a means of mastering 
 the important facts of our corporation issues I 
 have found it helpful to make a brief analysis of 
 each one. It will not only serve you as a quick 
 reference, but will assist you in memorizing 
 the important details of an issue in a logical 
 
 '*'See Introduction. 
 
 (IW) 
 
SALES METHODS AND AMMUNITION 117 
 
 order. In making this analysis it should be 
 paragraphed under different headings and 
 brief enough to be typewritten upon one side 
 of a sheet. 
 
 I have found the following form very con- 
 venient : 
 
 First: Name of bond, interest rate, maturity 
 and interest dates. 
 
 Second: The capitalization. Showing the 
 securities in the order in which they are a lien 
 on the property. For instance, if the bond 
 which you are offering is a first lien, list that 
 first, and then the second lien, followed by the 
 preferred and the common stocks. 
 
 Third: Territory. Give a brief outline of 
 just where it is located, the population, the area 
 served and the past growth of the district. 
 
 Fourth: Description of the property. State 
 nature of same, capacity, or mileage if a rail- 
 way. 
 
 Fifth: Equity over bonded debt. This may 
 be arrived at in different ways, either by actual 
 appraisal of the engineers, or upon the basis of 
 the market value of the junior securities, or 
 upon the earning basis. Some large operators 
 claim certain properties are worth from seven 
 to eight times their gross earnings. 
 
 Sixth: Earnings. Give a comparative state- 
 
118 THE HUMAN SIDE OF BUSINESS 
 
 ment of gross earnings, for a period of years, 
 and for the last or current year show also the 
 net earnings, interest charges and balance. 
 
 Seventh: Franchises. 
 
 Eighth: General. Mention the fact if it is 
 tax free or listed and the prospective growth 
 of the territory, the holders if you are per- 
 mitted to do so (such as institutions), the 
 engineer's responsibility and something about 
 the accounting certificate. More and more im- 
 portance is being attached to the certificate of 
 recognized public accountants, particularly by 
 investors who have questioned the accuracy of 
 earning statements submitted by many corpo- 
 rations in the past. 
 
 As additional ammunition or information, I 
 would suggest that you familiarize yourself 
 with the following arguments : 
 
 Bonds vs Stocks, Bonds vs Mortgages, 
 Listed vs Unlisted Securities and Corporation 
 vs Industrial, Railroad or Municipal Bonds. 
 You will be asked many, many times to tell the 
 advantages of one of these over the other. 
 
 One of you gentlemen asked me recently 
 about the arrangement of a working list. You 
 will find the card list convenient for larger 
 towns and cities because it is possible to sepa- 
 rate names in the different sections of the city 
 
SALES METHODS AND AMMUNITION 119 
 
 and carry only such as you may need. I am 
 sure a book is more convenient, however, for a 
 country territory. I use a loose leaf book, 
 arranging the names alphabetically on the 
 sheet and then arrange the sheets alphabet- 
 ically according to town. Lists of bank direc- 
 tors are made on separate sheets inserted next 
 to the index guides. If you have a large list 
 use a separate loose leaf book for customers 
 and their holdings. Arrange sheets in this 
 book alphabetically according to name instead 
 of towns. This will enable you to make any 
 notations desired regarding disposition of 
 securities held, traded or sold without lumber- 
 ing up your list of names. It also affords a 
 quick and convenient reference, particularly if 
 you supplement this information with a cross 
 index of our own corporation issues which have 
 been sold in your territory. 
 
 The handling of a bank board is a problem of 
 influencing men, but quite often one of influ- 
 encing a man. I have found that the majority 
 of boards are dominated by some one or two 
 men. But before you get to the board you will 
 encounter the cashier, or other active official in 
 charge of the bank (and he is sometimes from 
 Missouri). You will find some cashiers fairly 
 well informed; but you will be surprised at the 
 
120 THE HUMAN SIDE OF BUSINESS 
 
 ignorance of securities on the part of a large 
 majority of bank officials.' 
 
 The difificult man to handle is the constant 
 grouch. He is found in every industry but there 
 will be times when you will think they are all 
 in the banking business. I recall an experience 
 I had with a man of this kind which may inter- 
 est you. The man I refer to was the cashier of 
 a bank and had a very brusque manner. 
 Although I had made many calls he never 
 seemed to recognize me when I first went in. 
 He would come to the window, look at my card 
 and just about the time I began to discuss some 
 offering he would walk over to his desk some 
 distance from the window, sit down and begin 
 to read or talk to some of the clerks in the bank. 
 Of course that was extremely discourteous to 
 say the least, and after several vain attempts to 
 get his consideration of our house or our offer- 
 ings I mentioned my experience to one of the 
 directors for I knew they had bought bonds in 
 the past. He admitted that the cashier was 
 quite peculiar but intimated that without his 
 (the cashier's) endorsement of an issue it 
 would be useless to discuss it with the board. 
 He told me, however, that at a previous meet- 
 ing they had discussed some Pennsylvania 
 33^'s, 1915, which yielded at that time about 
 
SALES METHODS AND AMMUNITION 121 
 
 AYzfo. A few days later an issue of Pennsyl- 
 vania equipments came out. I called the 
 cashier up on the 'phone from a nearby town 
 and told him I could offer some Pennsylvania 
 Railroad equipments, and to my surprise he 
 asked for some information; finally he said, 
 "How many should I take?". I suggested not 
 less than $15,000. He replied, "You can send 
 me $10,000". Of course, this was unexpected. 
 Next time I went over I received a more cour- 
 teous reception and an opportunity to discuss 
 corporation bonds with him. A short time 
 afterwards I succeeded in having him come one 
 evening to the hotel at which I stopped and 
 spent a couple of hours with him. During this 
 interview I learned considerable regarding the 
 bank's holdings and some of their unfortunate 
 investments which partly accounted for the 
 cool reception he gave bond men. Next time 
 we had a new corporation issue I called him on 
 the 'phone and told him what we had and that 
 1 would like to file his order for $10,000, to 
 which he finally agreed. Later we had another 
 corporation issue of which I sold him $25,000. 
 This is only another instance to prove that even 
 the most obstinate men can be brought into Hne 
 by persistence or a little ingenuity. 
 
 It is desirable to ascertain as early as pes- 
 
122 THE HTJMAN SIDE OF BUSINESS 
 
 sible the purchasing power of your banks. For 
 instance, if it is the rule of an institution not to 
 buy more than $10,000 of any one issue and 
 they adhere to that very closely, it would of 
 course be unwise to give them your best price 
 on larger quantities. When bringing out a new 
 issue it is usually customary to make a conces- 
 sion on blocks of $25,000 and over, and it is not 
 advisable to mention this to smaller buyers 
 unless you have good reasons to think the con- 
 cession is sufficiently attractive to induce them 
 to make an exception or increase their limit. 
 
 Orders offered by bank officials subject to 
 the approval of the finance committee place the 
 salesman in a peculiar position at times. It is 
 desirable of course to have such an official at 
 least committed in case there should be other 
 offerings submitted to the board and yet if it is 
 a listed issue or something which may be sold 
 out before their meeting, the house may not be 
 willing to fill the order at the price previously 
 given. The committee in many banks will 
 almost invariably approve such purchase but 
 the house will often depend upon the sales- 
 man's knowledge of the situation and advice in 
 accepting the conditional order, and it is a good 
 policy when possible to ascertain at least the 
 sentiment of the individual members of the 
 
SALES METHODS AND AMMUNITION 123 
 
 committee towards your bonds, particularly 
 where you have had no previous dealings with 
 the bank. 
 
 A little diplomacy is necessary at times in 
 order to get permission to discuss offerings 
 with the directors or finance committee. Some 
 committees are more liberal than others with 
 their time, and in many places where you or the 
 house is fairly well known you will be given an 
 advantage over leaving your circulars where, 
 perhaps, they may become buried among those 
 of competitors. You will find it advisable not 
 to distribute circulars among members of the 
 committee before you have discussed your 
 offerings, for if you do, some will be looking at 
 the map perhaps, while you are discussing the 
 earnings, or at the possible water in the com- 
 mon stock while you dwell on the location, 
 with the result that the force of your argument 
 will be lost. 
 
 If you are not familiar with the preferences 
 of the board I would suggest that you offer two 
 or three issues. Mention first some well known 
 bond, the security of which is unquestioned; 
 that will often give a very good impression and 
 perhaps avoid any prejudice at the beginning. 
 This applies of course more particularly to 
 some country banks having directors who are 
 
124 THE HUMAN SmE OF BUSINESS 
 
 not well posted. It is a mistake to offer too 
 many different issues, and my experience is 
 that three is sufficient except in special cases 
 where a large amount will probably be pur- 
 chased. You will find the cashier is generally 
 interested in getting as high returns as possible 
 while the board may give more attention to 
 safety. 
 
 Discuss offerings with as little reference to 
 your circulars as possible for you will then have 
 an opportunity to size up the probable kickers 
 and the talkers, and you are better able to hold 
 their attention, and at the same time make your 
 arguments more effective. Often times the 
 cashier will turn over his circular in the meet- 
 ing to the most influential man on the board 
 and that information may be of value to you 
 later. Draw out as many questions as you can 
 before leaving the meeting, for if you can start 
 a discussion it will give you an opportunity to 
 overcome any individual prejudice or clear up 
 any points which may have been covered too 
 hastily or perhaps omitted. When questioned 
 in the meeting about offerings of competitors, 
 it is a good policy to say as little as possible for 
 the competitor may have friends on the board 
 who might be offended should you give too 
 much information regarding something they 
 had endorsed at a previous meeting. 
 
SALES METHODS AND AMMUNITION 125 
 
 You will be asked sometimes if any banks in 
 the vicinity have purchased the issue you may 
 be offering. In such cases it is advisable to 
 simply say you must decHne, to discuss the 
 holdings of any of your customers, because 
 that is a confidence which you are not per- 
 mitted to violate, and no one can take excep- 
 tion to your reply. 
 
 If the board is small it is sometimes possible 
 to remain until action is taken and defend your 
 case should there be any opposition. This 
 privilege does not come very often however. 
 Discourage if possible the discussion of any- 
 thing foreign to the offerings you present. I 
 know of one board where two of its members 
 are of different political faith and they nearly 
 always get started on politics while others 
 become impatient and at times threaten to 
 leave before any action is taken on investments. 
 
 In another instance, I was discussing some 
 offerings with the cashier and finally asked him 
 about the prospect of talking to the board when 
 they met that day. He said he didn't know, but 
 he was afraid the chances were not very good. 
 He added that they had had a peculiar experi- 
 ence the week before. It was a comparatively 
 new bank and some inexperienced bond man 
 had been granted this privilege at their last 
 
126 THE HUMAN SIDE OF BUSINESS 
 
 meeting and after making a few remarks about 
 his bonds some questions were asked by thte 
 committee, but he did not seem very well 
 posted and evaded most of them. He then 
 endeavored to entertain the board by reciting 
 some poems in Scotch dialect. Of course they 
 were disgusted and were not inclined to admit 
 any other bond men to talk to the board for 
 some time afterwards. 
 
 The point of taking orders subject to a corre- 
 spondent's approval has probably been dis- 
 cussed by others in this series of talks. How- 
 ever, I will add that if you know before the 
 committee adjourns that this condition is to be 
 placed on the order, you can often have it 
 waived by going before them and stating that 
 you will be very glad to have them refer any of 
 our offerings to their correspondents, but they 
 must realize that their correspondents have no 
 engineering or other facilities for investigating 
 the offerings of bond houses and that they do 
 not know any more about the issue than what 
 is told in the circular. Furthermore, they 
 should put themselves in the position of their 
 correspondent and imagine a customer coming 
 in and requesting their approval of some bond 
 he or she might wish to purchase. It is quite 
 likely they would be reluctant to assume this 
 
SALES METHODS AND AMMUNITION 127 
 
 responsibility. What you should advise them 
 to do would be to write and ask their corre- 
 spondent something about the responsibility 
 or reputation of your house and their past 
 experience. You can then sometimes draw up 
 a letter addressed to the correspondent for the 
 cashier along those lines, which will serve their 
 purpose and at the same time you avoid leaving 
 the impression that you are afraid to have your 
 offerings referred to the city bank. 
 
 In regard to calling special meetings, I might 
 say that some banks have a finance committee 
 which is composed of from three to five mem- 
 bers. If you have something of sufficient 
 importance it is often easy to have them call a 
 special meeting, particularly when they meet 
 only once a month. The point is if you really 
 do have something that requires immediate 
 action, don't hesitate to suggest this to the 
 cashier anyway. 
 
 Personally, I don't think there is any great 
 difference between the country investor and 
 the city investor except perhaps in the number 
 of bond men he may have calling on him. Some 
 of the larger investors in the city are probably 
 a little better posted; but anything which may 
 be done or said to gain the confidence of the 
 city investor would in my opinion apply to the 
 
128 THE HUMAN Sn)E OF BUSINESS 
 
 country investors. Give the client every reason 
 to know that you consider his interest para- 
 mount in making recommendations to pur- 
 chase or trade. Take advantage of every 
 opportunity to impress him with the care exer- 
 cised and the thoroughness of the investiga- 
 tions made by the house before an issue is 
 bought. 
 
 In this connection I might add that you need 
 not fear repetition, for some investors must be 
 assured and reassured every time you call upon 
 them. You should ascertain the degree of 
 security and marketability which the particular 
 prospect requires. A great many investors 
 imagine they must have a listed bond and be 
 able to see daily quotations in the papers. If 
 this is not necessary they naturally sacrifice 
 income or security for a degree of marketability 
 that serves them no real purpose. 
 
 I think the state of mind of the salesman is 
 contagious to a very great extent, and if he 
 thoroughly believes in what he has to sell he 
 will not only be more likely to effect a pros- 
 pective sale but will at the same time (uncon- 
 sciously perhaps) get a better hold on his 
 client's confidence. 
 
 Last year the house offered one of the largest 
 corporation issues which they ever handled. 
 
SALES METHODS AND AMMUNITION 129 
 
 One might have thought there would be suffi- 
 cient bonds for everybody. For some reason, 
 however, the impression seemed to prevail that 
 such would not be the case and as a conse- 
 quence we sold people who had never bought 
 corporation bonds before. This was due I think 
 to the fact that every man went after his cus- 
 tomers with enthusiasm such as he had never 
 had before and overcame every objection the 
 investor could raise against the issue. We read 
 considerable about the advantages of enthu- 
 siasm and some of us are born with it; some 
 have it thrust upon them, but I am afraid most 
 of us have it only intermittently. There are 
 some very good little magazines published 
 which I find contain some excellent articles 
 likely to stir up a little extra energy when busi- 
 ness is not exciting enough to keep up one's 
 spirits. 
 
 You of course know the dangers of knocking 
 bonds offered by competitors. It is a good plan 
 to make comparisons when asked for informa- 
 tion regarding a security which you know has 
 certain weak points. Select some one of your 
 own issues with which you are familiar and 
 show the advantages of one over the other. By 
 this means you avoid direct knocking and at 
 the same time put in a good argument for your 
 own bonds. 
 
130 THE HUMAN SIDE OF BUSINESS 
 
 I once called upon a bank and the cashier 
 told me they were seriously considering the 
 purchase of $10,000 of a certain corporation 
 bond offered by one of my competitors. I knew 
 that some of their directors personally held 
 blocks of the issue in question and that there 
 was a strong probability they would approve 
 the purchase of some for the bank. The cashier 
 was kind enough to loan me his circular of the 
 issue which was offered at 97. I then made a 
 comparative statement with one of our corpo- 
 ration issues seUing at 95. The nature of the 
 product of the two companies was similar but 
 our issue was decidedly stronger from stand- 
 point of earnings, past growth, capitalization 
 and other features, which advantage at first 
 might not have been apparent to the directors 
 on a casual observation of the circulars. After 
 discussing our bond with the board, some one 
 asked for an opinion of my competitor's offer- 
 ing. This gave me just the opportunity desired, 
 and I laid before them the comparison which 
 had been prepared in advance with the result 
 that we secured the order. This incident also 
 emphasizes the advantages of being in close 
 touch with the cashier or at least one member 
 of the board. 
 
 There is one feature I wish to mention 
 
SALES METHODS AND AMMUNITION 131 
 
 regarding the adjustment of interest charges in 
 the profit and loss account of banks or institu- 
 tions. I have offered bonds to banks at times 
 when the cashier objected on the ground that 
 he didn't like the interest dates. His objection 
 would be based on the fact that there was too 
 much accrued interest to pay and charge to his 
 profit and loss account shortly before his divi- 
 dend period. This would be brought up per- 
 haps only by small institutions but instead of 
 charging the accrued interest against his profit 
 account, he should open an "interest paid 
 account", which would be carried on the debit 
 side of his ledger as an asset until the coupons 
 matured, and by so doing his books would 
 show the true condition of the bank and his 
 interest and discount (or profit) account would 
 not be affected by the purchase of such bonds. 
 The question of when to use the telephone 
 can better be learned through experience. 
 When you are sufficiently well acquainted with 
 your customer to close a sale by telephone con- 
 siderable time and expense may often be saved 
 but you will remember also, it seems much 
 easier for the client to say "No" over the tele- 
 phone than it would be if you were present. I 
 have made a considerable percentage of my 
 sales this way at times when it was an impos- 
 
132 THE HUMAN Sn)E OF BUSINESS 
 
 sibility to see a man personally. You can also 
 reach a man sometimes who may decline to 
 grant you an interview. Under ordinary con- 
 ditions, however, direct personal contact is the 
 most efficient and the most productive method 
 of salesmanship, and is the one which I would 
 advise you to follow. 
 
♦CHAPTER XI 
 SELLING COUNTRY TRADE 
 
 Mr. Peirce has asked for a discussion of the 
 topics "SelHng Country Banks" and "Handling 
 the Country Investor", as outlined in your 
 memorandum, and I shall try to give you a 
 review of the conditions as they have developed 
 in my territory during the past few years. 
 
 The two topics specified really come under 
 one heading. In other words, your country 
 banks and your country trade are practically 
 the same thing, for when you handle an institu- 
 tion, you handle not only the institution, but all 
 the directors of that institution. In lots of 
 cases the directors of such and such a bank that 
 you sell, will also be your customers individu- 
 ally, and they are the men you should cater to 
 and cultivate, to help you with the bank. 
 
 When you sell a country bank, you generally 
 have to address the board, which as you all 
 probably know, will consist of from five to fif- 
 teen or twenty members. As a rule the presi- 
 dent or cashier and one or two or three of the 
 directors pass on the offering, and the best plan 
 
 ♦See Introduction. 
 
 (133) 
 
134 THE HUMAN SIDE OF BUSINESS 
 
 is to be especially close to those men who are 
 really the controlling factor of that institution. 
 
 Before presenting an offering to a board, it is 
 a foregone conclusion that the members of that 
 board, as well as the cashier and president, 
 know the house and think favorably of it as a 
 bond house, or are acquainted personally with 
 the representative, otherwise some education 
 or information as to the standing of the house 
 and the securities they handle, is first necessary, 
 or the bank will want to make some inquiries, 
 or refer all your offerings to their correspond- 
 ent for approval. In this event if we are offer- 
 ing semi-active securities or ones that are not 
 listed, the chances are nine out of ten that the 
 trade will not go through, for the correspond- 
 ent for lack of knowledge will not give them a 
 favorable report, as it cannot take the time 
 necessary to make a study of the various securi- 
 ties about which its country institutions make 
 inquiry, and the consequence is that you lose 
 out on the sale. Of course, when we are offer- 
 ing securities which are listed and have an 
 active market, a favorable reply is usually 
 received from the correspondent, and in cases 
 of that kind where a bank likes a bond you are 
 offering, you will generally get an order. 
 
 You must educate your directors and the 
 
SELLING COUNTRY TRADE 135 
 
 officers of an institution as to the standing of 
 our house, and point out to them that much 
 depends on the house. For instance, a country 
 bank writes to a Philadelphia bank and asks 
 about a bond we are offering, and the Philadel- 
 phia bank doesn't know anything about it; they 
 may have heard about it, but they will not take 
 much time to look it up; they will find out what 
 little they can and say, "We do not think much 
 of it" or something of the kind. If you educate 
 your people and make them know that our 
 house always investigates a proposition very 
 thoroughly and that before we buy an issue it 
 has to measure up to a certain standard, after a 
 time you will have their confidence and sell on 
 your initial offering. 
 
 Before presenting an offering to a board, you 
 should know your subject very thoroughly. If 
 you stand up before a board with a dozen mem- 
 bers sitting around the table and make a speech 
 telling all about the bond, they will probably 
 want to ask some questions. You should have 
 your answer right away and be familiar with 
 your circular, know everything on your cir- 
 cular. Lots of times some member of the board 
 will ask something about the replacement value 
 or will ask what are the restrictions on issuing 
 additional bonds. If you are not familiar with 
 
136 THE HUMAN SIDE OF BUSINESS 
 
 that particular point, you should know where 
 to turn to your circular to read that explana- 
 tion to them. If you cannot do this, they are 
 going to be a little wary, for they will think you 
 are not posted as to what you are presenting 
 and do not know your subject thoroughly. 
 When presenting an offering to a board, you 
 should have lots of information in addition to 
 that shown on the circular, especially after you 
 have once gotten your board interested. For 
 instance, when we are going to bring out a new 
 issue, the house will give us a four or five page 
 memorandum, and on that will be many points 
 that are not in the circulars, and if you make 
 notes of those points and use them as a final 
 argument before you are through addressing 
 your board, they will invariably be very con- 
 vincing. To my knowledge we have never yet 
 put out an issue that we didn't have what we 
 call "an advance memorandum". This will 
 give you plenty of information, in addition to 
 that on the circular. 
 
 The board does not necessarily always pass 
 on your offering. The president or the cashier 
 may control the situation, and in cases like that 
 you must always go to the president or the 
 cashier first and personally make your offering 
 to him and practically get his approval before 
 
SELLING COUNTRY TRADE 137 
 
 you talk to the board, and in those cases a 
 strong talk to your board is not necessary; just 
 give a general outline of the specific security, 
 and then the president or the cashier will give 
 them any further information they want; after 
 which you will be excused, but you should wait 
 outside in case any questions come up which 
 they want answered. In other cases, where the 
 board considers an offering and must pass on a 
 purchase unanimously, be prepared to give 
 them complete data on your offering and after 
 explaining it in detail, inform them that you 
 are ready for questions and will cover more 
 fully any points they do not understand, or any 
 other points you did not mention, about which 
 they may wish some information. If there are 
 no questions forthcoming, and in nine out of 
 ten cases no one will ask any questions, your 
 best point is to ask Mr. So-and-So for instance, 
 a man whose influence goes a long way, 
 whether he has any questions, but beforehand 
 you should have acquainted Mr. So-and-So 
 with the issue that you have presented to the 
 board; invariably the man that you ask the 
 question of will say there is nothing further he 
 wants to know, and that has a great deal of 
 influence with the board. If the party whom 
 you address does not ask any questions, you 
 can feel pretty well assured of an order. 
 
138 THE HUMAN SIDE OF BUSINESS 
 
 It is always a good idea to get to a town, 
 especially in the country, an hour or so before 
 the board meeting. You may have a new offer- 
 ing with which they are not acquainted, and if 
 you are there early enough you can have a talk 
 with a few of the directors, see the cashier or 
 president or some influential member of the 
 board, and acquaint him fully with the facts of 
 your offering. 
 
 In one of the banks up State I had addressed 
 the board from time to time without success. 
 I finally found out the cashier was looking for a 
 commission. The cashier would always tell me 
 they didn't have any money but would buy as 
 soon as they had funds. I was very friendly 
 with two or three members of the board and 
 really had an order from this bank for ten 
 bonds of a certain issue then selling at 94 or 95 
 now selling at 101. We had the order on our 
 books but they never wrote in to ship the bonds 
 so the transaction was never closed, due to the 
 fact that the cashier was not offered a commis- 
 sion. The next time I had a chance to do busi- 
 ness with them was on an offering of another 
 new issue. After addressing the board I waited 
 around until they had adjourned. The cashier 
 called me over and said, "We are going to buy 
 some of those bonds, but cannot buy them now 
 
SELLING COUNTRY TRADE 139 
 
 as we do not have any surplus funds." After 
 leaving the bank I walked over to get my 
 trolley, and while standing there two directors 
 with whom I had gotten very well acquainted 
 came over and said, "Did you fix that up with 
 our cashier?". I said, "Fix up what"?, and 
 then they told me the board had passed a reso- 
 lution asking us to give them an option on ten 
 bonds until their next meeting. They did not 
 have the money, but they wanted an option on 
 these ten bonds for a week, as they expected 
 funds within that time. I told them the cashier 
 didn't ask for anything of the kind. That made 
 them pretty hot and immediately they got busy 
 and called the entire board together again. I 
 went in to their board meeting again, the 
 cashier being present, with the result that they 
 gave me an order for ten bonds, delivery within 
 thirty days, That opened their eyes and they 
 had the assistant cashier check up their files, 
 and found that the cashier had been getting a 
 commission on everything sold to the bank. 
 The result was he lost his job the following 
 31st of December. They have a new cashier 
 now and we have sold them probably seventy 
 or eighty thousand dollars worth of bonds 
 since. That was a little over a year ago, and 
 they have since proven to be very good cus- 
 
140 THE HUMAN SIDE OF BUSINESS 
 
 tomers, and the new cashier will write in when- 
 ever he has a customer in the market and say, 
 "What have you to offer for a customer of ours 
 who has so much to invest?". 
 
 Another experience I had with an institution 
 — an old one and a very good bank. They have 
 about $100,000 capital, over $100,000 surplus 
 and deposits of $700,000 or $800,000. I called 
 there regularly and became very well 
 acquainted with the president of the bank and 
 knew the cashier very well too. Every time I 
 went in there for three years straight, I got 
 exactly the same answer, "We are not buying 
 bonds; we do not buy bonds, and we do not 
 consider them." A little over a year ago they 
 met with some pretty heavy losses in commer- 
 cial paper, with the result that they decided to 
 buy a few bonds. Fortunately I happened to 
 be on the job and knew they were in the 
 market. The first order, I think, was for only 
 five bonds, but they have purchased since that 
 time about sixty thousand dollars worth of 
 securities, and I have sold them practically 
 everything we have brought out for the last 
 year or so. I have done about $40,000 worth of 
 this business out of the total of $60,000. 
 
 You may call on a bank time after time with 
 the same answer, "that they do not buy bonds". 
 
SELLING COUNTRY TRADE 141 
 
 Do not let this discourage you, especially in a 
 town where you go regularly to call on other 
 institutions or individual investors, for it takes 
 only a few minutes to stop in a bank and have 
 a chat with the cashier or president of such an 
 institution, especially when they are not inter- 
 ested; but some day that institution is going to 
 buy, and that is the time you should be on the 
 job. It pays to keep after an institution of that 
 kind, because they will be a customer sooner or 
 later, and when they do buy it will be from the 
 man who has been the most persistent, and 
 especially the representative of a house like 
 ours. Since then I have sold the president, 
 three of their directors, and three or four of 
 their customers, and I have probably gotten 
 seventy to seventy-five thousand dollars worth 
 of business out of that institution. Not long 
 ago the president told me they had two very 
 good customers who up to the present time had 
 been buying real estate, that is, local real estate 
 such as farms in the community. He said, 
 "Some of these days before long they are going 
 to buy bonds, and when they do buy bonds I 
 want you to get the business". He even went 
 so far as to take me to the office of one of these 
 men, a man making from fifty to sixty thou- 
 sand dollars a year, introduced me to him and 
 
142 THE HUMAN SHDE OF BUSINESS 
 
 said, "When you are ready to buy bonds, the 
 house this man represents are the people to buy 
 from". The first of April I was in the bank, not 
 to make them an offering for they were busy, 
 but to check up on something else, another 
 trade I had pending; I wanted to see the presi- 
 dent and after I was through with him the 
 cashier said "I want to see you a minute". He 
 was talking to one of their customers at the 
 window; I went over and he said, "This gentle- 
 man has a couple of thousand dollars to invest 
 and also has some friends who want to make 
 some investments." He said, "Take him back 
 in the private office and talk to him", which I 
 did and found out that he had a couple of thou- 
 sand dollars and the rest of the family had 
 forty-five hundred. While talking with him the 
 cashier came back and said, "Whatever this 
 salesman recommends is all right; you can take 
 his word for it". I didn't sell him, but will later 
 on. This is just one of a number of similar 
 experiences, and lots of this kind of work is 
 necessary in order to develop new sources of 
 business. 
 
 Another bank generally buys from one of our 
 competitors, — that is, the board prefers their 
 bonds. The cashier is friendly to our house, a 
 good friend of mine, always treats me very 
 
SELLING COUNTRY TRADE 143 
 
 nicely, and I have sold the bank three times. I 
 had an experience a few months ago with this 
 institution; being in town one morning to see 
 an individual, I stopped in the bank the first 
 thing and asked whether they were in the 
 market, getting the answer that they didn't 
 have any money. I made an offering of rail- 
 way bonds on which we had reduced the price 
 from 98 to 97; the cashier seemed to like them 
 but was not very enthusiastic, for the reason, I 
 presumed, that he claimed not to have the 
 money. I found that they held a gas issue due 
 in July of this year, and I suggested that they 
 make a trade on those; the cashier seemed to 
 think that a pretty good proposition, and asked 
 if we could pay 100^ for them. I saw a couple 
 of the directors, one a customer of the house, 
 then attended their board meeting. I didn't 
 expect to get any business; the cashier called 
 me in and asked me to make the offering of our 
 bonds to their board, which I did, with the 
 result that they gave me an order for five thou- 
 sand for cash. I was down town after the board 
 meeting and one of the directors came along 
 and said "That was very good work of yours". 
 I said, "Is that so, how do you mean"? He 
 said, "We had made a purchase of five bonds 
 from your competitor at last Tuesday's meet- 
 
144 THE HUMAN SIDE OF BUSINESS 
 
 ing, and were just awaiting the confirmation of 
 our order before we had them shipped from 
 New York". This experience shows how 
 changeable a board may be from one meeting 
 until the next, and how necessary it is to be on 
 the job when you have a trade pending. 
 
 Lots of times you will get a new name on an 
 inquiry, a private investor who will have from 
 thirty to fifty thousand dollars to invest, maybe 
 only five or ten. You will get that business, 
 and he probably will not have any other money 
 for one, two or three years. Just because he is 
 not going to have any more money, and just 
 because he is not going to do additional busi- 
 ness in the near future, it does not pay to let 
 him get away from you. Call on him, keep in 
 close touch with him, and know what he is 
 doing. You cannot afford to give up his busi- 
 ness and discontinue your calls, for a compet- 
 itor is sure to get acquainted with your cus- 
 tomer and benefit by your hard work. 
 
 Sometimes you will call on a man and he will 
 tell you he hasn't any money to invest; you can 
 sit down and talk with him along general lines 
 and after a while he will say, "Go down and see 
 Mr. So-and-So; he has some money", and he 
 will probably allow you to use his name. In 
 half the cases, he will make the call with you 
 
SELLING COUNTRY TRADE 145 
 
 and introduce you, say you represent a good 
 house, that you handle good bonds, etc. Always 
 ask him before you go to see this certain party 
 whether he objects to his name being used. He 
 will invariably say no. 
 
 I have one customer whose name was 
 secured through a financial paper, by whom we 
 were recommended very highly. This cus- 
 tomer is a woman and had at that time about 
 forty-five or fifty thousand dollars. A prede- 
 cessor salesman of ours was the first to call on 
 her and sold her twenty bonds on the first 
 interview; she didn't have the money, but took 
 them up within a reasonable time. I kept after 
 her and also sold her. She will not have any 
 more money now until some member of the 
 family dies but fortunately she likes to make a 
 trade, and if I have a good proposition I can 
 generally work one out with her. It is not 
 always necessary to make it a personal inter- 
 view, either. A letter from the house followed 
 by a telephone call the afternoon after she has 
 gotten the letter generally brings the answer 
 yes or no, and it has never been "no" in her 
 case. In this case, the house was already favor- 
 ably known to this prospective customer before 
 our salesman called, but in order to "cinch" the 
 future business, a general education developing 
 her confidence in the house was necessary. 
 
146 THE HUMAN SIDE OF BUSINESS 
 
 An institution which is only about two years 
 old has proven to be a very good customer. A 
 number of the fellows pass that institution by 
 because it is so small; they called upon it at the 
 first meeting and as they did not get any busi- 
 ness they thought it was too small to bother 
 with and a number of them haven't been back. 
 We had originally had an inquiry from one of 
 the directors who had heard favorably of our 
 house, and he wrote in telling us that such and 
 such a bank was going to buy the next week. 
 I went to see the cashier and found only one 
 other man on the job. I made a number of 
 offerings to the cashier and it looked as though 
 I would get their business, — between ten and 
 twelve thousand dollars worth. That was on 
 Friday; I followed that up by going to see the 
 director who had written in to us and ac- 
 quainted him with the facts of the offerings I 
 had made to the cashier. They met at 7.30 on 
 Monday morning, so I had to go out Sunday 
 night. I went to Lancaster and left there the 
 next morning on the 6.40 train, thinking of 
 course I would be the only bond man on the 
 train and that our house and the other one 
 would divide the business. When I boarded 
 the train I saw another salesman sitting there. 
 I said "I guess we are going to the same place. 
 
SELLING COUNTRY TRADE 147 
 
 aren't we?" He said, "Yes". This bank is 
 located in a town of a couple of hundred people 
 and there were six other bond men and three 
 adding machine men who were going to call on 
 this institution; think of it, at 7.30 in the morn- 
 ing. We sat around for two and a half hours 
 and by nine o'clock they were ready to hear the 
 adding machine men. At ten o'clock they 
 started to call the bond men and heard every 
 one of the representatives of eight different 
 banking houses. The business was finally di- 
 vided between ourselves and one other house; 
 we secured $6,000 worth of business and the 
 other house $5,000. Just because an institution 
 is small, it doesn't mean that it is not worth 
 following. This is an easy town to reach and I 
 can stop off between trains and spend an hour 
 there very easily. I have sold that bank prac- 
 tically everything we have brought out in the 
 last two years, if not for cash, on a trade. It is 
 a nice little institution to count on for one or 
 two thousand of everything, and they seem to 
 appreciate the fact that I give them so much 
 attention and always consider them on advance 
 offerings, 
 
 When I was talking about not following up 
 the business that you have already , gotten, I 
 wanted to bring out the fact that if you do not 
 
148 THE HUMAN SIDE OF BUSINESS 
 
 follow it up some other man will profit by your 
 hard work. I had my lesson by experience. It 
 never pays to forget you have sold a party, be- 
 cause he will be of assistance to you in getting 
 business at some future time. Whenever you 
 are talking to a bank and they say they are not 
 in the market, always ask them whether they 
 have a customer who is in the market for secur- 
 ities or whether they have any customers who 
 have been inquiring about investments. Al- 
 ways ask the cashier or president whether any 
 of their customers are in the market for any- 
 thing. They will often say, "Yes, So-and-So is 
 in the market", in which case they will give you 
 the address of the prospective customer, and of 
 course you will refer the client to the cashier or 
 president, should he want further information 
 regarding our house or our securities. In cases 
 of this kind, you do not very often make a mis- 
 take by offering the bank a commission; tell 
 them also that you are depending on them for 
 some of that class of business. It is not hard 
 to get when it is once started. 
 
 In some cases you will find the purchase is 
 not always up to the board to decide. I have 
 another institution to which we have sold a 
 great many bonds, and it took me a long while 
 to find out that the cashier and the president 
 
SELLING COUNTRY TRADE 149 
 
 were the whole show. In other words, every 
 time I had a new offering I would ask permis- 
 sion to present the same to their board, which 
 request was usually granted, but never resulted 
 in an order. I eventually found out the best 
 time to get their business was just after the 
 board had adjourned, and that it was necessary 
 to see only the cashier and president, for they 
 always passed on any purchases for the insti- 
 tution, and they did not seem to want their 
 board to have any say as to what they should 
 or should not buy. It seems the president is a 
 controlling factor in the bank, he and his 
 family having a controlling interest in the 
 stock, but this is a fact which it took some time 
 to find out. 
 
 I have another very valuable customer who 
 has absolute confidence in our house and pur- 
 chases everything from us. He also is very in- 
 fluential in the community where he lives and 
 always refers his friends to us when they want 
 advice on investments to us. Only the other 
 day he gave me the name of one of his friends 
 and I took an order from her subject to the ap- 
 proval of her brother whose funds she was in- 
 vesting. This shows the confidence she had in 
 this man. Of course he showed his confidence 
 in us by recommending our bonds. 
 
150 THE HUMAN SIDE OF BUSmESS 
 
 In a lot of country towns you will find fel- 
 lows who are not bond buyers, but are talkers. 
 They can tell you the history of everybody in 
 the town, who owns real estate, where he gets 
 -his money, how much he is worth, and all in- 
 formation of that kind. That fellow is not 
 worth a rap as a customer, but he gives you a 
 lot of information that is valuable, and he is 
 worth keeping on your list. 
 
 You will find it well to study local market 
 conditions in all your towns, for it means many 
 a trade. You will run up against different 
 bonds in different towns and if you know the 
 market on the local issues you can come back 
 at your man right away, with a trade proposi- 
 tion on such local holdings. 
 
 The first thing when you start out on the 
 road is to feel that our house is the best and 
 most careful house in the business in the selec- 
 tion of the securities they purchase and recom- 
 mend to their clients. Confidence in our firm 
 and the securities they give us to sell is abso- 
 lutely essential, and without such confidence 
 you cannot sell our bonds successfully. This 
 confidence grows and grows, and the longer 
 you are with the house the more confidence you 
 will have. 
 
♦CHAPTER XII 
 
 THE PERSONAL SIDE OF SELLING 
 
 I am going to talk today on what we might 
 call personality in the bond business. You men 
 have listened to a great many important 
 points. You have heard of the history of the 
 development of the bond business, the organi- 
 zation of national banks, circulation, the na- 
 tional bank act has been explained to you, the 
 recent postal savings bank act, the law govern- 
 ing trust company reserves, customs of the 
 street, etc. All of this of course is vital to a 
 bond salesman; it is the foundation stone on 
 which you are going to build your future; 
 there is no doubt about that. These technical 
 details you will have to brush up on from time 
 to time, because you will be asked every day 
 of your lives some point or another that it 
 would be a mistake for you not to know how to 
 answer, and they have been practically all cov- 
 ered in this list we have here; I do not think 
 Mr. Peirce has omitted any of the important 
 things that a bond salesman should have at his 
 fingers' ends, and where you are going to have 
 
 *See Introduction. 
 
 (Ifil) 
 
152 THE HUMAN SIDE OF BUSINESS 
 
 a big advantage is in having these lectures re- 
 ported so that you can look over them from 
 time to time. I think every few months you 
 should brush up on these talks; I know I wish 
 I had had this opportunity; at times like the 
 present, when things are so dull, and there is 
 practically no business, it would help lots and 
 be great encouragement to read over these lec- 
 tures, that one wouldn't find time to read at 
 other times. 
 
 I said we were going to talk on the per- 
 sonal side of the business; I mean by this the 
 handling of the man on the other side of the 
 counter. All this information and learning will 
 not do much good unless you are able to make 
 the other man see it, and see it your way. I 
 have never been a salesman for any other kind 
 of a house than a banking house and for no 
 house but ours, so I do not know much about 
 other kinds of business, but I do know that a 
 bond salesman is the highest type of all sales- 
 men, just as the bond business ranks first in the 
 business world; this is beyond any doubt. You 
 are not selling wool, or coal or steel; you are 
 selling credit, and you will find that your cus- 
 tomers, you who have been selling merchan- 
 dise, will take you much more into their confi- 
 dence, talk to you more as they talk to their 
 
THE PERSONAL SIDE OF SELLING 153 
 
 lawyer or to the man who is advising them on 
 business matters, and for that reason you have 
 to know how to handle them right from the 
 beginning; if you make a bad start it is pretty 
 hard to "come back". 
 
 SelHng in Philadelphia as I have done for the 
 past five years, my experiences will of course 
 be on city trade. I think Pennsylvania has been 
 blessed with possibly the two hardest bond 
 cities in the Union, from what I have experi- 
 enced and from what I have heard, both how- 
 ever from diflferent standpoints, — I mean Pitts- 
 burgh and Philadelphia. The Pittsburgher has 
 made his money in a hurry and he is inclined to 
 be more or less speculative. The mine owners 
 and steel operators have had an easier time in 
 Pittsburgh in floating their stock and bond 
 issues than in a good many other large cities. 
 
 Philadelphia is just the opposite; it is prob- 
 ably the most conservative of all the cities. The 
 rich men of Philadelphia are mostly from the 
 so-called "old families", old Quaker stock, and 
 they are buying bonds today from the same 
 houses that their great grandfathers bought 
 from. They are hard for that reason to wean 
 away, but there is an obstacle in every city and 
 an obstacle with every customer; so that it 
 is not right to say, I suppose, that one city is 
 
154 THE HUMAN SIDE OF BUSINESS 
 
 any harder than another or that you are up 
 against a harder proposition than the other fel- 
 low is, because you can hear tales of woe from 
 everywhere. I have heard men who have been 
 selling bonds in the country among the farmers 
 and in the small towns say that when they 
 came to the city they found a great deal of 
 trouble in their path ; they would say that they 
 could not get in long enough to talk to the in- 
 vestor. You will find among the big buyers 
 here in Philadelphia sometimes seven or eight 
 bond men in line waiting to see a customer. If 
 you should see him he can't give you the time 
 that the man in the country can give you; he is 
 a busier man and is bothered more; so your 
 competition in the city is keener than it is in 
 the country; on the other hand, there are prob- 
 ably just as many obstacles to be encountered 
 in the country, as the country men have told 
 you. 
 
 In selling banks and insurance companies 
 the first and most important thing in my mind, 
 is to locate the man who is the "boss". There 
 are bond salesmen in Philadelphia today that I 
 know have been trying to sell certain institu- 
 tions for at least two or three years; they have 
 been calling on one man in the institution all 
 of that time, and he has no more to do with the 
 
THE PERSONAL SIDE OP SELLING 155 
 
 buying of the bonds than you or I have. With 
 a trust company the best man to start with is 
 the treasurer, because if he is not the actual 
 buyer he often has a great deal to say about the 
 bank purchases. I remember one institution 
 here in Philadelphia where I called on the 
 treasurer for probably three or four months, 
 and by drawing him out by a number of ques- 
 tions I finally discovered he was not the man 
 at all. He was not willing to say that he was 
 not the man, as he wanted me to think that he 
 had as much to do with that institution as any- 
 body else. After one or two leading questions, 
 however, he mentioned one or two names that 
 were connected with the institution and these 
 men he said had something to do with the buy- 
 ing. So I immediately made for them and 
 finally discovered that one of them who was 
 very seldom at the bank did all the buying, 
 and through him I sold probably more bonds 
 than any other salesman has sold since to that 
 institution. 
 
 I find that young institutions that are just 
 starting out are really meat for the bond man. 
 You want to get after them in a hurry. As soon 
 as you hear of any new bank that is starting in 
 business learn the names of the officials, find 
 out who is putting up the money, and start 
 
156 THE HUMAN SIDE OF BUSINESS 
 
 some missionary work around among those in- 
 terested. 
 
 I remember a few years ago one of our trust 
 companies just opening up, had a board of di- 
 rectors and officers that knew Httle or nothing 
 about bonds. I started calling on them but 
 they gave me no encouragement; finally we 
 did get to talking securities, and they said "We 
 won't buy anything here but railroad bonds; 
 that is all we believe in and we think that is the 
 best investment; we have heard so and so". 
 I agreed with them that rails were a first-class 
 investment; I told them that a great many of 
 the banks held such securities. We had sold a 
 great many of them, but at the same time they 
 were also big buyers of public utility bonds. 
 Our interviews often drifted along the line of 
 the different public utility bonds that our house 
 had sold; I mailed them a little data from time 
 to time such as our last piece of literature for 
 instance. The result was that two years after 
 that bank started we sold them a block of fif- 
 teen corporation bonds; we have sold them 
 $150,000 corporation bonds since then, as well 
 as a number of "rails", but the pretty part of 
 the story is that they hold no public service is- 
 sues but ours. 
 
 You will often have an official of an institu- 
 
THE PERSONAL SIDE OF SELLING 157 
 
 tion tell you that there is no use in calling on 
 them; they will try to get rid of you in so many 
 ways. I have heard a number of bond sales- 
 men refer to certain institutions as impossible 
 to do business with, and they would not call 
 there because so and so was on the board. I 
 can only say that it is best to pay no attention 
 at all to any remarks of that kind, because we 
 have sold institutions securities right over the 
 heads of the members of the board of directors. 
 If you know that a bank is in the market for 
 bonds never let them alone, no matter what 
 they tell you. 
 
 I recall so vividly the second sale I made in 
 the bond business. One institution in Phila- 
 delphia had bid on $50,000 City of Philadelphia 
 bonds; it was printed in the papers and I knew 
 they were unsuccessful bidders and didn't get 
 the bonds. Mr. Peirce said, "There is a bank 
 with $50,000; go after them". The next morn- 
 ing I was in the bank before the president ar- 
 rived; I greeted him when he came in and he 
 told me in a very gruff way they were not in the 
 market at all. I reminded him of his bid. He 
 said they wanted those city bonds but did not 
 get them, and it was of no use to call, that 
 there was no chance of doing any business; he 
 was very gruff and very disagreeable. I had 
 
158 THE HUMAN SmE OF BUSINESS 
 
 only been in the business about four months, 
 and it may be some encouragement to you to 
 know that it took me over four months to make 
 my second sale in the business. I came back 
 and reported to the office. Mr. Peirce said, 
 "They have the money; they are going to buy 
 somewhere". I had found out he hadn't 
 bought city bonds anywhere else, and that he 
 wouldn't pay the price he would have to pay 
 to get them. At the time we were able to offer 
 him City of Altoona 4's, a very good Pennsyl- 
 vania issue that would net him the return that 
 he wanted, the return he would have secured 
 had he gotten the City of Philadelphia bonds 
 he bid on. 
 
 Early the next day I was down at the bank 
 again before he came in; you must always 
 have some pretty good excuse to give for 
 coming back so soon; I had gotten some fur- 
 ther data on this issue which I brought down 
 and hoped that he would look over it; he 
 wouldn't even take the paper from me; he said 
 there was nothing to it, that he didn't want any 
 bonds. I said, "Won't you take this article and 
 when you have a spare moment look over it?". 
 He threw it down on his desk. I wanted to sit 
 down but I was afraid to. I came back and 
 reported my second interview. Mr. Peirce said. 
 
THE PERSONAL SIDE OF SELLING 159 
 
 "Do you want to go back this afternoon or to- 
 morrow morning?". I didn't want to go back 
 at all. He said, "You have to go back". (This 
 is all true, you will run across cases just like 
 this.) I wouldn't have to be told to go back 
 now. 
 
 The third day I went back again in the 
 afternoon. I thought probably after dinner 
 my friend the president might feel a little bet- 
 ter. He was reading a letter. When he saw 
 who it was he started to finish his letter. I 
 simply sat there. After a while he said, "Didn't 
 I tell you not to come up here again?". I said, 
 "I am sorry, but I thought you would change 
 your mind and read this data we have given 
 you." I asked him if he didn't think the bonds 
 were cheap; I tried to draw him out, but when 
 I wanted to press him further he drew back 
 into his shell again, and I had to come back to 
 the office, with the result that I was chased 
 back again the next morning. This time I 
 waited outside on the steps and greeted old Mr. 
 Grouch coming up. I took my hat off and put 
 out my arm to shake hands — you can imagine 
 how much he shook hands with me; I followed 
 him right into the bank and waited until he got 
 his hat and coat off. I said, "Mr. So-and-So, 
 this is to be my last interview with you; these 
 
160 THE HUMAN SmE OF BUSINESS 
 
 bonds are practically sold and if you want 
 them, now is the time, and if you do not, I 
 won't come back again until we have some- 
 thing else; these bonds will be gone and I 
 know I haven't anything else now that can 
 touch them for quality and yield, and I may 
 not have anything for some months; there is 
 nothing on the street that can compare with 
 them, and if you want them you had better take 
 them. This is final". He looked at me and 
 said, "How much did you say they were"? I 
 told him. He said, "How many have you"? I 
 told him. He said "I will take them". Well, I 
 nearly dropped dead. I took out a slip and en- 
 tered the amount so that he could sign the 
 order he was giving; my instructions were to 
 get orders signed; he looked at me. I said "I 
 want you to sign this". He said, *I never 
 sign those things". I said, "It is a rule of our 
 house that orders have to be signed". So he 
 signed it. 
 
 Well, to make a long story short, within 
 three months that fellow was digging down 
 into his desk every time I came up there to 
 show me something he had written in his boy- 
 hood days, some speeches he had made at grad- 
 uation exercises or something of that kind. I 
 couldn't get away from him, and when I was 
 
THE PERSONAL SIDE OF SELLING 161 
 
 leaving he would walk out to the door with me 
 and shake hands with me with a fond farewell. 
 If he happened to be going out he would say, 
 "Wait, I will go down in the car with you". 
 Now here was a man I myself would have let 
 alone if I hadn't been urged by an insistent 
 manager to go after him, and I think nineteen 
 out of twenty bond men would have been like 
 myself. But they are the men you will sell 
 bonds to and make the best friends of. Haunt 
 a man when you know he has money. Mr. 
 Peirce more than I realized that he had the 
 money and that somebody was bound to get it. 
 Somebody had to get it and the man that could 
 stick the longest was going to get it, and in this 
 case he did. 
 
 Among your trust companies never forget 
 that they have funds to invest from time to 
 time for reserve purposes. They may not be 
 buying bonds for their general investment ac- 
 count; they may be putting their money into 
 mortgages or putting it out in building opera- 
 tions, but if they are going ahead, and the 
 young institutions particularly are going to be 
 forging ahead, they must invest their reserve, 
 and so many bond men do not know that a 
 bank has money for reserve purposes until an 
 official calls up the house and says, "What have 
 
 11 
 
162 THE HUMAN SIDE OF BUSINESS 
 
 you in the way of municipals" ? You will lose 
 quite a little business if you don't watch this. 
 Make it a point to get the names of the mem- 
 bers of the finance committee or directors. It 
 is easy to look them up in the small towns; you 
 can find out in a very short time who are the 
 important ones; you will often find that a 
 couple of the directors buy bonds themselves, 
 and at the same time you are finding out who 
 are the men at those board meetings that are 
 influential when it comes to buying bonds. 
 You can often make a good point for yourself 
 by being close to them when they come to buy 
 bonds for the institution. 
 
 The other day a banker telephoned in, the 
 treasurer of an institution that we sell, and said 
 "I want to buy a couple of bonds for one of the 
 members of our board of directors". We con- 
 firmed the sale. He said, "Just send the bonds 
 out to the bank". I knew the official pretty 
 well, but I hadn't sold any of the directors be- 
 fore; I didn't know there were any bond buyers 
 on the board. He gave me this one's name. 
 Where you can, when a sale is made that way 
 through the bank, do your best to find out the 
 name of the man that the bonds are going to. 
 As a rule the official will tell you; he will cer- 
 tainly tell you after you are close to him. 
 
THE PERSONAL SIDE OF SELLING 163 
 
 I think an experience I had with one of the 
 big companies here will help you on the point 
 of finding out who the right man in the institu- 
 tion is. The company was just forming; the 
 president was well known in Philadelphia; 
 they had temporary offices in one of our office 
 buildings and the president was there every 
 day. I called about five times in a week, but 
 could never get beyond his private secretary. 
 You want to cultivate the private secretary, 
 This one was a very agreeable girl and after 
 about the fifth interview I said, "Would you 
 mind telling me whether Mr. So-and-So is ever 
 going to see me"? She said "What do you 
 want to see him about" ? I said "I want to see 
 him about buying securities for this new insti- 
 tution; they have a good bit of capital to invest 
 and I would like to do some of the investing". 
 She said "You are barking up the wrong tree". 
 If I hadn't gone at her in that way I would 
 probably still be chasing up this one particular 
 individual, who was the only well known man 
 in connection with the company, and I would 
 probably never have gotten him; or he might 
 have put me off by saying, "We are not buying 
 just now". 
 
 The man who is not doing the buying often 
 won't give the name of the man who is; he 
 
164 THE HUMAN SIDE OP BUSINESS 
 
 knows he is bothered to death. In this case the 
 girl was very friendly and told me to go down 
 to a grocer a few squares away; she told me 
 that he was going to have charge of the bond 
 buying and that he would very likely be the 
 treasurer. (Every day this girl turned me 
 down I had made it a point to hang around and 
 engaged her in conversation, with the result 
 that I finally got this valuable information). I 
 went down to see the grocer. He said "Who 
 told you to come here"? I said "I want to sell 
 you for the institution, and thought probably 
 you wanted to buy some bonds yourself". I 
 didn't imagine he was a bond buyer, but it 
 doesn't hurt to flatter a man like that. He said, 
 "What is your story"? I knew they were in- 
 vesting their capital and that it would be in 
 municipal bonds. I had a lot of papers and 
 data and sat down and started to talk to him. 
 He went on attending to his grocery business, 
 and I never let up except when he was talking 
 on the 'phone. He finally turned to me and 
 said "What you are telling me is going in one 
 ear and out the other; go back and write me 
 about that". ^ 
 
 I wrote him that day. The next day I wrote 
 him again. I called again and asked him 
 if he had read my letters; he said he had but 
 
THE PERSONAL SIDE OF SELLING 165 
 
 they were not interested. I started something 
 else; he told me the same thing "That is going 
 in one ear and out the other; go back and write 
 it." I kept that up for about five interviews. I 
 finally asked him if he had any of those letters. 
 He said, "I have a lot of stuff piled up here". 
 As a rule the big investors will allow a lot of 
 papers to accumulate and if you are not careful 
 the whole business goes in the scrap basket. 
 He said "You are not as obnoxious as some of 
 these fellows, are you" ? I said "I try not to be 
 obnoxious". He was crude, and I was stand- 
 ing for it; I have stood for worse things since. 
 Finally he brought some other fellow's offering 
 out. He asked me if I knew anything about it. 
 I thought "Well, that fellow's bonds have 
 made a dent, and I think I ought to be able to 
 do the same with some of our offerings". I 
 compared the offerings with some offerings we 
 had talked about, and the result was that he 
 signed an order that afternoon for $25,000 of 
 bonds. 
 
 We then sold him all told probably $125,000 
 bonds and I have sold him personally the only 
 bonds he has ever bought in his life. There was 
 the man who said "What you are telling me is 
 going in one ear and out the other". I knew 
 he had money; that was my cue; don't let up 
 
166 THE HUMAN SIDE OF BUSINESS 
 
 on the man with cash. Be as nice and as 
 gracious as you can, but don't be easy. If they 
 won't talk about bonds, talk about something 
 else. More bond men fall by the wayside — and 
 I would like to have a dollar for every man that 
 falls by the wayside in a year — more bond men 
 fall by the wayside because they haven't the 
 necessary push. When a buyer has the money, 
 stick. You will usually get some of it, you are 
 bound to get some of it. If you know he has it, 
 keep after him every day. Of course, once in a 
 while you will lose out. 
 
 I had an experience this week. A man had 
 $5,000 to invest that I have been after for a 
 month; he has been a month looking around. 
 I offered him everything. We have sold him 
 several times. One day late this week I learned 
 he had invested his $5,000 with somebody else; 
 I clung to him as long as I could, but he wanted 
 a certain kind of bond and he had his ideas 
 along certain lines, and we were not able to suit 
 him at the time, and he came across an offering 
 that he would have taken from anybody. 
 
 You will run across the same sort of ob- 
 stacles in your path in handling the private in- 
 dividuals as you will in handling banks and in- 
 stitutions, and there from my own experience 
 too I can tell you that if the private investor 
 
THE PERSONAL SIDE OF SELLING 167 
 
 has cash in bank to invest, stick to him no mat- 
 ter what he tells you or no matter what another 
 bond man, who knows you are calling on him, 
 may tell you. A buyer will say "I am sorry, 
 but I have a nephew or son or brother or uncle 
 or some relation in the business" or "I have a 
 firm I have been doing business with for years 
 and years." That obstacle should not be too 
 big for you to surmount. If he has money to 
 invest, stick close to him. The best example I 
 have had of a case of that kind was that of a 
 large private investor whose son, just out of 
 college, was in the bond business. Another 
 firm had taken this boy in knowing the father 
 was a bond buyer and they knew he had bought 
 bonds from us. They thought "Here is a 
 chance to get that man's business from the 
 other firms he does business with". I knew the 
 son was in the business, but I kept after the 
 father just the same. He said "I buy bonds 
 from so and so, because my son is in the busi- 
 ness, but what have you"? I sold him ten cor- 
 poration bonds that day. Some time after that 
 I called him up and his son, who was not at 
 work that morning, answered the telephone. 
 He said, "Who is this?" I heard his father in 
 the room; I could hear him through the tele- 
 phone asking who it was that wanted him. I 
 
168 THE HUMAN SffiE OF BUSINESS 
 
 said "This is Mr. ". He said "Oh, yes, 
 
 I am sorry, but father is out of the market en- 
 tirely", and hung up. That afternoon this in- 
 vestor came in to apologize to me for his son's 
 rudeness in hanging up the telephone. He said 
 he was not in the market, but later on, in about 
 thirty or sixty days, he would be and would 
 give me a chance. I think he bought twenty or 
 twenty-five thousand bonds from us. Now his 
 son is not in the business any more. What a 
 mistake it would have been if I had not kept 
 after him ! 
 
 I claim that the only time that it is really 
 impossible to get a man's money is when he 
 hasn't any money to getj or anything you can 
 trade out. Of course, there are certain ob- 
 stacles you can't surmount, but it is best to go 
 along on the assumption that you can sur- 
 mount them all. Push right ahead. If it is 
 only for five or ten bonds a year, that is some- 
 thing. Ask them if they know anybody in the 
 market; get them to give you some names; 
 ask them if they have a brother or relative that 
 buys bonds. I have done that many a time and 
 found out that another member of a family did 
 some buying. I located a brother of an inves- 
 tor not long ago; I never knew he did any 
 bond buying at all. He buys possibly $100,000 
 
THE PERSONAL SIDE OF SELLING 169 
 
 in different classes of securities every year; I 
 thought his brother was the one who did all the 
 business. 
 
 There are big buyers and little buyers. I 
 think the little ones are of course well worth 
 following. They will be your bread and butter 
 not only in your early years but as long as 
 you are in the bond business. Therefore keep 
 right after the man who has one or two thou- 
 sand dollars at a time, even though he may 
 have money to invest only every eighteen 
 months or two years; keep after him, but in 
 doing so, do not forget to nurse the big men, 
 the ones that look impossible. I can't lay too 
 much stress on that. These are hard to secure, 
 and it may take three years, four years, or five 
 years, but when you have one of them he is 
 worth all the effort you have expended to get 
 him. Undoubtedly the rich man, who buys 
 fifty or a hundred at a time, is hard to get; you 
 will often leave his office and say "I can't do 
 anything with that man; I am simply wasting 
 time". I have often been tempted to cancel a 
 name, but the fact that he was buying bonds 
 all the time made it impossible for me to 
 abandon him; I couldn't forget that another 
 fellow was selling him big blocks of bonds. 
 Some of these men I am selling now; some I 
 
170 THE HUMAN SIDE OF BUSINESS 
 
 haven't made a bit of impression on. I have 
 often asked myself, and I have had younger 
 bond men ask me how I finally landed a certain 
 big buyer. I have asked that question over 
 and over again from bond men who wanted 
 to talk. I very seldom volunteer any informa- 
 tion myself, but I can't see that there is any 
 harm in listening to the other fellow if he 
 wants you to. 
 
 One man in particular told me four years ago 
 that he had certain friends that he did business 
 with and that there wasn't a chance of my get- 
 ting any business from him. He was a con- 
 servative Philadelphian, and didn't know much 
 about bonds; I could see that from the first 
 talk with him. I knew there was no use in my 
 offering him attractive opportunities because 
 he would let them slip by and one of his friends 
 would come in right after me and offer a se- 
 curity that was much poorer or the yield not 
 as attractive, and yet that fellow would get his 
 business. I knew it was of no use for me to 
 always be hammering bonds at this man. I 
 therefore started on tactics that I had carefully 
 thought out. Around the beginning of the year 
 I would drop in and wish him a Happy New 
 Year; I would talk anything but bonds. Along 
 in the spring I dropped in and referred to his 
 
THE PERSONAL SIDE OF SELLING 171 
 
 summer plans; he said he was going abroad. 
 I wanted to know if there wasn't something I 
 could do for him while he was abroad, any- 
 thing he wanted attended to or any work he 
 would like to have done. He got to be more or 
 less agreeable, rather smiled at my presump- 
 tion and said "I am sorry, but there is nothing 
 at all". I told him I hoped he would have a 
 very good time and that I would see him when 
 he came back. When he came back we had just 
 gotten up some sort of a brochure. I asked 
 him if he would mind reading it and give me 
 his opinion on it; I thought probably there 
 were some points on it that weren't just as 
 strong as they might be. Well, less than a year 
 ago that man finally gave me an order for ten 
 bonds. I have sold him now — I have been 
 about five years working on him — I have sold 
 him over a hundred thousand dollars of bonds, 
 and the chances are now that he tells other 
 young salesmen that he has certain men to do 
 business with, and I am now one of those men. 
 A plan like this often works out with the big 
 buyers. 
 
 I remember an individual who was very dis- 
 agreeable; he used to jolly a great deal and 
 want to fool and put me off. He was going 
 away, and I didn't want to be put off. He said, 
 
172 THE HUMAN SIDE OF BUSINESS 
 
 "I am going out West in a private car; I have 
 just invested all my money and am going 
 away; it is a wonder some of you fellows 
 wouldn't decorate my car with flowers and 
 send some candy to the ladies that are going". 
 I said "I am your man". He said "Send them 
 along". I said "When does your train go"? 
 He said "No, you don't". He saw that I meant 
 it and said "I will call you up". I said, "Don't 
 forget". The next day I called up to find if he 
 was there, and I found he had gone. I saw one 
 of the men in his office a couple of weeks after 
 and asked him when Mr. So-and-So was going 
 to return. The clerk, who had made a calendar 
 note of it, said he would be back such and such 
 a day the following week. I said "If I send 
 down a dozen American Beauty roses will you 
 promise not to tell who sent them, and put 
 them on his desk"? He said "Surely". The 
 day he arrived home the 'phone rang and I 
 said, "Hello". He said "Is that you"? I said, 
 "Yes". He said "This is me". He was getting 
 very sociable. I said "Oh, yes, I am glad you 
 are back". He said "What did you mean by 
 sending those flowers down here"? I said "I 
 don't know anything about any flowers". He 
 said "If you don't take the credit, I shall think 
 my stenographer put them there". He said, 
 
THE PERSONAL SIDE OF SELLING 173 
 
 "Come down and see me". I went down to see 
 him and he gave me an order for $10,000, the 
 first business I had done with him. Now, I 
 don't advise bond men decorating their cus- 
 tomers' desks with roses or lilies of the valley, 
 but there are lots of opportunities of this char- 
 acter that come up which if you grasp will re- 
 dound to your advantage every time. I never 
 did that before and have never done just the 
 same thing since. I had that one opportunity 
 to get next to that fellow and I took advantage 
 of it, and now he is a good friend of mine; he 
 knows what our issues will do. 
 
 I always tell these hard customers "If you 
 will only give us a chance, we will show you 
 what a firm like ours can do for you". Tell 
 them to give you one order, five or ten bonds 
 only; if he is a big man tell him to take twenty- 
 five. Never let a chance to get closer to these 
 investors get by you. There are opportunities 
 offered every day. I have no doubt that I miss 
 hundreds of opportunities in a year; if I was 
 just a little wider awake to conditions to take 
 advantage of them I could probably get closer 
 to more of these big men. The money is there 
 and somebody has to get it. They are going to 
 buy bonds with it. You have a hundred differ- 
 ent issues on your list of all kinds of conserva- 
 
174 THE HUMAN SIDE OF BUSINESS 
 
 tive securities. You can suit them one way or 
 another. It is the man behind the issue, the 
 man who is selling the issue that is making the 
 sale. There is certainly no business where per- 
 sonality counts so much as it does in the bond 
 business. 
 
 So keep hard after the big buyers. They are 
 the ones you are the most apt to give up. The 
 road looks blue along the line of the big in- 
 vestor, but it is worth all the work you do. I 
 could go over my list of customers and if I were 
 to take you around and introduce you to each 
 one of them you would find that the ones that 
 looked the hardest to you were my best cus- 
 tomers. 
 
 There is a trust company that I call on that 
 has a very close fisted president. This institu- 
 tion ranks high among the trust companies of 
 Philadelphia in every way, the personnel of its 
 board, the list of its investments and the in- 
 crease in the number of depositors every year, 
 and yet the president practically throws you 
 out of the bank if you go up to see him. I know 
 any number of bond men that won't go near 
 the bank. They say "He can buy from some- 
 body else; I am tempted to hit him". When- 
 ever I go into his office I try to be just as cour- 
 teous as I can. I never dared sit down in his 
 
THE PERSONAL SIDE OF SELLING 175 
 
 office; I think he would have lifted me up and 
 put me out. He really is the most disagreeable 
 man I ever had anything to do with. His right 
 bower, the treasurer, is almost as disagreeable 
 as the president. He had started in as office 
 boy and had risen, and he is following in the 
 footsteps of the old man. I was up against it 
 hard. I used to see certain bond men go in 
 and shake hands, and it used to make me sore. 
 Some of them I felt didn't know any more 
 about the business than I did. Finally I said 
 to the president, "Now, look here; I don't mind 
 as far as I personally am concerned being 
 heeded as little as you heed me, but I do not 
 think it is a compliment to one of the best 
 banking houses in Philadelphia to not give 
 them more consideration than you do. They 
 have opportunities that lots of other houses 
 don't have; they have issues of a character that 
 lots of other houses don't have". I said "It is 
 all right as far as I personally am concerned; 
 I am not talking about myself, but you should 
 at least give some consideration to a house as 
 good as ours is". I was getting pretty hot 
 under the collar. I had thought this little 
 speech all out coming down in the car and I 
 could hardly wait until I got to the bank to get 
 it off. 
 
176 THE HUMAN SIDE OF BUSINESS 
 
 He looked at me and said "Well, is that 
 the way you feel about it"? I said "That is 
 the truth of the whole matter; I have been feel- 
 ing and thinking that way about it for some 
 time". I said "Now, we have in stock a block 
 of Southern Pacific Refunding 4's that should 
 interest you. We have fifty bonds on hand at 
 such and such a price. We can sell you at the 
 market price, saving you the commission you 
 would have to pay on the board. Now, please 
 give this offering serious consideration". I 
 came back to the office and found he had called 
 up, had asked about these bonds and bought 
 forty-five (five had been sold in the meantime) 
 and the next time I called to see him he was 
 mad because the five had been sold and he 
 could not get the whole fifty. That man is a 
 crab and he always will be a crab, but so long 
 as I am getting business from him he can be as 
 crabbed as he likes. That is what you are up 
 against. These men who have made their own 
 way, who have started out with nothing and 
 have risen to be bond buyers by their own 
 merit know what it is to earn a living; they 
 know what the fight for money is, and they are 
 the hardest ones to get to part with it, but the 
 best in the world when you get them started. 
 A lot of bond men don't reahze that. They 
 
THE PERSONAL SIDE OF SELLING 177 
 
 don't seem to think that if they don't get this 
 business somebody else is going to get it. 
 Don't give up an investor who has a lot of 
 money in bank to invest in bonds because he 
 says "No, I don't want them; I am not inter- 
 ested" because some salesman is going to come 
 along and get the money. It isn't a question of 
 the quality of bonds, because you must remem- 
 ber you have every kind of conservative secur- 
 ity that you could possibly have, unless a man 
 wants to buy some mining stock or wild cat 
 investment, and of course that is a different 
 proposition. 
 
 I find a great many bond men are very much 
 afraid to say the three little words "I don't 
 know". I think this is particularly true of the 
 green man. He is a little ashamed and thinks 
 he ought to know. After several years you will 
 find out how many things there are you don't 
 know. If an investor begins to question you 
 about some bond you are not up on, say "I 
 can't answer that; I will have to look that up; 
 I will let you know". And be sure you do let 
 him know. Write him a letter about it. You 
 have every source of information right here, 
 look it up and write him. Remember that — 
 don't be afraid to say "I don't know". 
 
 When times are dull you can do just as good 
 
 12 
 
178 THE HUMAN SIDE OF BUSINESS 
 
 work by getting out among the investors and 
 the people that you know buy bonds and get- 
 ting better acquainted with them. Go in and 
 talk to them about anything that they are in- 
 terested in. Learn their hobby. For instance, 
 one old fellow will be daffy about his grand- 
 children; talk to him about his grandchildren. 
 If another is a baseball crank talk to him about 
 baseball. Talk to them about anything at all 
 while you know they are not investing; the 
 other fellow isn't going to get the business and 
 you are going to get closer to them against 
 that time when they are again in the market. 
 I met a well known broker on the street the 
 other day; I said, "How are things"? He said 
 "Don't you know"? I said "Are you selling 
 any bonds"? He said "I called on three men 
 yesterday; two laughed and the other got 
 mad". I think if I went to see a number of my 
 customers in this market and started to talk to 
 them about bonds they would laugh at me. At 
 the same time I feel I can do a great deal of 
 good work by dropping in on them and not 
 mentioning a word about bonds, simply talk- 
 ing about something else, and getting into an 
 interesting conversation with them. It is the 
 man you get to know intimately, not too inti- 
 mately, but intimately in a business way, that 
 
THE PERSONAL SIDE OP SELLING 179 
 
 you are going to get your business from. 
 When he is buying he is going to buy of you; 
 you are the fellow he is going to call up; he will 
 think of you when you are not thinking of him; 
 and don't make him feel every time you go in 
 his office "I have got to get rid of that fellow 
 the easiest way I can". It is much better if he 
 will give you a slap on the back and say sit 
 down, and talk about some other subject. Get 
 around when business is bad. 
 
 I said "Don't get too intimate". I think this 
 is more general among a certain class of sales- 
 men than among bond salesmen, although a 
 good many bond salesmen have a tendency to 
 want to ingratiate themselves too much with 
 the investor; they want to get too friendly with 
 him, get to where they can call him Tom, Dick 
 or Harry; they want to be personal friends. 
 That is bad, generally speaking. I had a man 
 today say to me "I can't count on my friends 
 for anything". He said "I have to go outside 
 to get business; I can't count on my friends". 
 You know that as well as I do. Your friends 
 aren't the ones you are going to do business 
 with. This rule works both ways. It is just as 
 difficult to do business with customers if you 
 make intimate friends of them; you will be on 
 the wrong basis with them, and they will be 
 
180 THE HUMAN Sn)E OF BUSINESS 
 
 sooner or later buying bonds from the fellow 
 that doesn't call them Tom, Dick or Harry, I 
 think we could almost make it a rule that a 
 bond man should not in any case get too close 
 to the man he is doing business with, that is too 
 intimate. 
 
 Sometimes a man will tell you that he buys 
 mortgages or you will be told that he is a mort- 
 gage buyer, and that there is no good of calling 
 on him to sell bonds. Sometimes he buys 
 mortgages because he does not know what 
 bonds are. It is up to the bond salesman to 
 show the investor that a bond is secured by a 
 mortgage on property in the same manner that 
 a real estate mortgage is. Show him that it is 
 a great deal better for him to have a piece of 
 a valuable mortgage, which a bond is, on a 
 property that is large and whose earnings come 
 from many different sources, than to have a 
 mortgage on a house. Take for instance in a 
 steam railroad issue or in an electric railway 
 and power issue, there is a great deal more than 
 franchise and the rails. There is valuable pri- 
 vate right of way, valuable real estate and so 
 on. It would have to be a great disaster that 
 would affect the value of a property secured as 
 are the high grade steam railroad issues, 
 whereas it sometimes takes very Httle in the 
 
THE PERSONAL SIDE OF SELLING 181 
 
 case of a mortgage on a piece of real estate to 
 affect its value. I heard of a case this week. 
 An institution through one of its directors had 
 been carrying along a residence property for 
 some years in Omaha; it had been depreciating 
 in value every year, until now it had gotten to 
 be in one of the poorest localities of the city. 
 The other day he told me he didn't know what 
 had become of it until a few days after the re- 
 cent tornado one of their representatives had 
 written him that he was sorry but their house 
 had been carried away by the high winds. A 
 great many pros and cons can be brought into 
 an argument of this kind. There are pictures 
 you can paint in a general way showing these 
 customers that a bond is nothing more nor less 
 than a mortgage on a great many properties. 
 Another argument for the man who buys 
 mortgages is to turn to the tables showing the 
 list of investments of the savings banks, the 
 national banks and the institutions of the city 
 or country town that you are working. This 
 will show a great percentage of bonds owned 
 over real estate mortgages. There is no excuse 
 for not being able to get a buyer away from 
 mortgages in a great many cases. 
 
 Another point; don't tell the investor too 
 much. The average investor doesn't know and 
 
182 THE HUMAN Sn)E OF BUSINESS 
 
 never will know as much about investments as 
 the average bond man; they don't know the in- 
 side workings and they are not familiar with 
 the technical questions and points that are 
 brought up from time to time, and if you try 
 to tell them too much you will get them all 
 worked up about things they have no need to 
 think of. Cram in as much knowledge as you 
 can, but keep that for yourself. Paint pictures. 
 More sales have been made by a salesman 
 painting a good picture around the issue that 
 he wanted to sell than in any other way. The 
 fewer details you tell the investor the more 
 chance you have of making a sale. 
 
 There never was an ideal bond, you know; 
 you cannot expect a perfect bond. There is 
 always something, some argument, a crank 
 will bring forward. I think if I were to offer 
 some of my customers U. S. Government bonds 
 on a 5fo basis they would find some fault; they 
 would probably think we were going to war 
 with Japan or trump up some excuse to get rid 
 of me. Always give them your strong points, 
 and make the picture as pretty as you can. Of 
 course there are questions which your custom- 
 ers will ask you that you should know and 
 should be in a position to answer. 
 
 Loyalty to the house above all. The great- 
 
THE PERSONAL SIDE OF SELLING 183 
 
 est compliment that an investor ever pays me is 
 when he turns around in his chair and says 
 "You certainly stick up for your firm, don't 
 you"? I believe in our firm; I believe in the 
 manner in which things are run around here. 
 I have experienced many things which have 
 proved to me more and more just what kind 
 of a house it is that I am working for. Our 
 firm have been fair and square with their cus- 
 tomers, with their men, and with the institu- 
 tions that buy their bonds, and I am proud to 
 work for them and to have people know it. 
 
CHAPTER XIII 
 
 ADVERTISING AND ADVERTISING DEVICES 
 
 Unquestionably the best public vehicle for 
 bond advertising is the daily papers. Special 
 editions, trade papers, programmes and pro- 
 fessional and religious periodicals are almost 
 valueless. An advertisement to pull must first 
 catch the eye, then lead the reader on through 
 its entire text and finally create in him a desire 
 for something expressed by it. For this rea- 
 son standing cards are less effective than copy 
 that is changed regularly. In fact they have 
 little value at all for general publicity fqf an 
 habitual reader becomes so used to seeing 
 them that they do not even challenge his at- 
 tention. Copy that is attractively set up and at 
 the same time may be read with the least visual 
 effort is better than more space devoted to a 
 mass of black ink. A hodgepodge of type and 
 the featuring of a multiplicity of points are not 
 only bad taste, but they spoil the appearance of 
 the advertisement and cheapen it considerably. 
 Type that is fancy but hard to read loses part 
 of its value. The wording should be brief and 
 to the point; otherwise the attention will wan- 
 ds*) 
 
ADVERTISING DEVICES 185 
 
 der and be lost. There is ample room for taste 
 and individuality in the composition of a good 
 advertisement. 
 
 Blind ads, that is ones that conceal the pri- 
 mary facts of the article offered, pull better 
 than open ones, and ads that offer to give some- 
 thing away pull best of all for the instinct to 
 get something for nothing is ever present. 
 Spasmodic displays do not have the same effect 
 as the persistent and frequently recurring use 
 of smaller space. Some years ago the writer 
 was criticised as being unconventional by some 
 members of the old school on account of using 
 live copy and changing it periodically instead 
 of confining himself to the established business 
 card, but apparently by now nearly all of the 
 old school must have passed away or else be- 
 come rejuvenated for the latter style of adver- 
 tisement is seldom used now except as a rate 
 holder. 
 
 Does advertising pay? Yes and no. Long 
 lists of securities owned and special display 
 offerings of new issues produce few inquiries. 
 In fact, it is doubtful if on the average they 
 bring in enough business to pay for their cost, 
 but if a house maintains an active selling force 
 the general pubHcity and the atmosphere 
 created are worth a great deal. Otherwise ad- 
 
186 THE HUMAN SmE OF BUSINESS 
 
 vertising is only of value for the inquiries it 
 produces, for it does not directly sell bonds, 
 and these inquiries yield no return unless fol- 
 lowed up. Inquiries cost anywhere from two 
 to twenty dollars apiece. On the basis of 
 traceable results they seldom pay for them- 
 selves in the first instance, but must be cred- 
 ited with subsequent business in order to com- 
 pensate for their original cost. 
 
 For this reason periodicals of a national 
 character are hardly a profitable medium for 
 financial advertising unless the advertiser has 
 an organization that is more than local in 
 scope, and is sufficiently broad in field of oper- 
 ation to permit personal attention by salesmen 
 to the inquiries as they are received. Maga- 
 zine inquiries cost anywhere from twenty to 
 fifty dollars each, and are a pretty expensive 
 luxury unless their full benefit is extracted 
 from them. 
 
 An inquiry is a good deal like a pig in a poke 
 in that its real value cannot be determined from 
 the way it sounds. The one that reads best 
 may be actuated only by curiosity, while an- 
 other that appears trivial may contain latent 
 possibilities out of the ordinary. For this rea- 
 son more than usual care is required to handle 
 such leads properly. An incapable salesman 
 
ADVERTISING DEVICES 187 
 
 may not get anything out of them while an- 
 other man may find them productive of much 
 business. The prospect who writes in for in- 
 formation is generally approachable but never- 
 theless on the defensive on account of the 
 house being a stranger to him, so that confi- 
 dence has first to be established. Frequently 
 no transaction results the first time, but if the 
 lead appears to be a good one and is carefully 
 cultivate4, the salesman may be rewarded with 
 an order the next time the prospect is in funds. 
 If one salesman falls down on an inquiry and 
 gets nothing out of it, his work can be checked 
 by turning it over to a second man for hand- 
 ling, particularly if the first effort fails to 
 locate the prospect as sometimes happens. The 
 law of averages holds good here as in every 
 other phase of the business, and out of every 
 so many leads, regardless of their nature, it is 
 pretty sure that a certain percentage will pro- 
 duce enough results to more than compensate 
 for the time and attention required to handle 
 all of them properly. 
 
 General publicity is of great value in that it 
 paves the way for personal salesmanship. 
 When a salesman calls on a prospect for the 
 first time the ice is broken more readily if the 
 latter says "Oh yes, I know your house", even 
 
188 THE HUMAN SIDE OF BUSINESS 
 
 though as a matter of fact he probably does not 
 know a thing about it except that its name is 
 famihar to him through an impression that is 
 stamped upon his brain. A curious illustration 
 of this occurred one time and will bear repeat- 
 ing. A salesman called upon a new prospect 
 in response to an inquiry and found him a crip- 
 ple bedridden for years. A sale was consum- 
 mated, and then the salesman said "If you will 
 pardon me, I am curious to know what induced 
 you to write to us". The customer replied 
 "Well it was this way. I had a little money to 
 invest and didn't know what to do with it so 
 by chance held up the financial page of the 
 morning paper, and asked the nurse here what 
 house she would write to of those that adver- 
 tised. She hesitated a moment and then said 
 'Why to that one, pointing to your advertise- 
 ment.' This confirmed my own impression 
 and so I wrote to you". Thus was the call of 
 dignified copy and neat composition answered. 
 Better than any kind of periodical or news- 
 paper advertising is direct appeal by mail. 
 This may be by personal communications, 
 form letters, printed flyers or circulars. Of 
 these, individual typewritten letters yield the 
 largest percentage of results but are not sus- 
 ceptible of wholesale application simply be- 
 
ADVERTISING DEVICES 189 
 
 cause enough bonds cannot be sold by mail to 
 pay for the cost of maintaining a force of men 
 competent to conduct a correspondence depart- 
 ment that is capable of giving intelligent and 
 individual written advice to thousands of dif- 
 ferent people. Form letters are the best sub- 
 stitute but these quickly become stereotyped 
 in expression unless great care is exercised to 
 give them originality and variety. From the 
 standpoint of quantity rather than quality 
 printed circulars and flyers take the lead. 
 These all are superior to display advertising, 
 for both results and general publicity but even 
 here the returns are usuallj'- disappointing for 
 the replies seldom equal one half of one per 
 cent, of the number of pieces mailed. Direct 
 appeal is of value simply to lay the foundation 
 for the salesmen, but then there is always the 
 chance of getting an order that will more than 
 pay for the cost of the entire advertising cam- 
 paign as happened recently when the writer 
 made a sale by circular to a customer whom he 
 had never seen or dealt with before, and the 
 profit on this one transaction was calculated 
 in four figures. Of course, things of this kind 
 do not happen very often but they are the bait 
 that leads one on to advertising extravagances. 
 To secure the greatest returns in proportion 
 
190 THE HUMAN SIDE OF BUSINESS 
 
 to the expenditure, direct appeal should reach 
 the greatest number of people at the smaller 
 cost per piece. The so-called novelties have 
 little advertising value in the bond business. It 
 is doubtful if an inkstand or a cigar lighter, or 
 a blotter ever produced an order, whether it 
 cost fifty cents or four dollars. A souvenir 
 should be relevant to the business. Further- 
 more it should be so inexpensive that it can be 
 distributed in large quantities. Some houses 
 make a practice of giving to their best custom- 
 ers articles that are comparatively expensive 
 as advertising things go. As a business prop- 
 osition, if a man is already a good customer, will 
 he produce anything more in the way of orders 
 if given something he probably doesn't need, 
 at a cost of a dollar or two to the donor? Isn't 
 it more logical to go after those who are not 
 yet customers, but who aggregate many times 
 the number who are? 
 
 The writer has always gone on the theory 
 that instead of giving away say five hundred 
 articles at a cost of one dollar each, to people 
 who are already customers it is better to dis- 
 tribute ten thousand at a cost of five cents each 
 to the people whose patronage is desired as 
 well as to those already on the books. This 
 theory was put into practice some years ago 
 
ADVERTISING DEVICES 
 
 191 
 
 and has since been consistently followed in the 
 distribution of a celluloid Calendar and Bond 
 
 Frederick Peirce 
 & Co. 
 
 BONDS FOR INVESTMENT 
 
 1421 CHESTNUT STREET 
 PHILADELPHIA 
 
 JAN 
 
 FEB 
 
 HAR 
 
 APR 
 
 m 
 
 M 
 
 12 3 4 5- 
 
 7 a 9 10 II IS 13 
 14 IS IB 17 la 19 20 
 2122 23 24 25 25 27 
 282930 31 
 
 4 S 6 7 a 9 10 
 II 12 13 14 15 16 17 
 IB 19 20 2122 2324 
 25 262728 
 
 I 2 3 
 
 4 S 6 7 B 9 10 
 11 12 13 14 IS 16 17 
 18 19 20 21 22 23 M 
 2526 27 2829 30 31 
 
 I 2 3 4 S 6 7 
 
 B 9 10 II 12 13 14 
 15 16 17 18 19 20 21 
 22 23 24252e;728 
 2930 
 
 1 2 3 4 5 
 
 S 7 a 9 10 II 12 
 13 14 IS 16 17 IB 19 
 20 21 22 23242528 
 272B29303I 
 
 "—- 1 2 
 
 -456769 
 10 II 12 13 14 IS 16 
 17 IB 19 20 2122 23 
 242526 2728 29 30 
 
 JUL 
 AUG 
 SEP 
 OCT 
 NOV 
 DEC 
 
 12 3 4 5 6 
 B 9 10 II 12 13 14 
 IS IB 17 IB 19 20 21 
 22 23 2425282728 
 
 2930 31 
 
 12 3 4 
 
 5 6 7 a 9 10 II 
 12 13 14 15 16 17 18 
 19 20 2122232425 
 262728 293031-— 
 
 2 3 4 5 6 7 8 
 g to II 12 13 14 15 
 16 17 19 19 20 2122 
 23 2425 26 2726 29 
 30— 
 
 •--I 2 3 4 5 6 
 
 i 8 9 10 II 12 13 
 15 16 17 18 19 20 
 2122232425 26 27 
 28293031 
 
 1 2 3! 
 
 4 5 < 7 a 9 10 
 II 12 13 14 IS IB 17 
 18 19 202122 2324 
 25 26 27 28 29 30 ~ 
 
 ——-I j 
 
 Z 3 4 9 6 7 S 
 9 10 11 12 13 14 IS 
 16 17 IB 19 20 21 22 
 23 2425 26 272829 
 3031 
 
 INTEREST TABLE ON OTHER SIDE 
 
 Interest Table which he originated and of 
 which a copy is here given. Before this was 
 devised, every interest table with which he was 
 
192 THE HUMAN SIDE OF BUSINESS 
 
 familiar, consisted of at least six pages, and 
 was convenient neither for reference nor to 
 
 BOND INTEREST TABLE 
 
 Exclude day of delivery and to the Interest 
 for the full month or months, add the interest 
 for the remaining days. Calculate SO days to 
 the month and 360 days to the year. 
 
 "^ 
 
 INTEREST ON $1000 FROM 1 OAT TO B MONTHS 
 
 Days 
 
 3%* 
 
 4* 
 
 4^2% 
 
 5* 
 
 69> 
 
 7* 
 
 1 
 
 $0.0972 
 
 jfl.im 
 
 $0,125 
 
 $0.1389 
 
 $0.1667 
 
 $0.1944 
 
 2 
 
 0.1944 
 
 0.2222 
 
 0.260 
 
 0.2778 
 
 0.3333 
 
 0.3889 
 
 8 
 
 0.2916 
 
 0.3333 
 
 0.375 
 
 0.4167 
 
 0.5000 
 
 0.6833 
 
 4 
 
 0.3889 
 
 0.4444 
 
 0.500 
 
 0.5556 
 
 0.6667 
 
 0.7778 
 
 5 
 
 0.4861 
 
 0.5555 
 
 0.625 
 
 0.6944 
 
 0.8333 
 
 0.9722 
 
 6 
 
 0.B833 
 
 0.6667 
 
 0.750 
 
 0.8333 
 
 1.0000 
 
 1.1667 
 
 7 
 
 0.6805 
 
 0.7778 
 
 0.875 
 
 0.9722 
 
 1.1667 
 
 1.36U 
 
 8 
 
 0.7778 
 
 0.8889 
 
 1.000 
 
 1.1111 
 
 1.3333 
 
 1.5555 
 
 9 
 
 0.8750 
 
 1.0000 
 
 1.125 
 
 1.2500 
 
 1.6000 
 
 1.7500 
 
 10 
 
 0.9722 
 
 1.1111 
 
 1.260 
 
 1.3889 
 
 1.6667 
 
 1.9444 
 
 11 
 
 1.0694 
 
 1.2222 
 
 1.375 
 
 1.5278 
 
 1.8333 
 
 2.1389 
 
 12 
 
 1.1667 
 
 1.3333 
 
 1.500 
 
 1.6667 
 
 2.0000 
 
 2.3333 
 
 13 
 
 1.2639 
 
 1.4444 
 
 1.626 
 
 1.8055 
 
 2.1667 
 
 2.6278 
 
 14 
 
 1.3611 
 
 1.5565 
 
 1.750 
 
 1.9444 
 
 2.3333 
 
 2.7222 
 
 15 
 
 1.4583 
 
 1.6667 
 
 1.875 
 
 2 0833 
 
 2.6000 
 
 2.9167 
 
 16 
 
 1.5535 
 
 1.7778 
 
 2.000 
 
 2.2222 
 
 2.6667 
 
 3.1111 
 
 17 
 
 1.6528 
 
 1.8889 
 
 2.125 
 
 2.8611 
 
 2.8333 
 
 3.305S 
 
 18 
 
 1.76O0 
 
 2.0000 
 
 2.250 
 
 2.5000 
 
 3.0000 
 
 3.5000 
 
 19 
 
 1.8472 
 
 2.1111 
 
 2.375 
 
 2.6389 
 
 3.1667 
 
 3.6944 
 
 20 
 
 1.9444 
 
 2.2222 
 
 2.500 
 
 2.7778 
 
 8.3333 
 
 3.8889 
 
 21 
 
 2.0417 
 
 2.3333 
 
 2.625 
 
 2.9167 
 
 8.5000 
 
 4.083S 
 
 22 
 
 2.1389 
 
 2.4444 
 
 2.760 
 
 3.0555 
 
 3.6667 
 
 4.2778 
 
 23 
 
 2.2361 
 
 2. 5555 
 
 2.875 
 
 3.1944 
 
 3.8333 
 
 4.4722 
 
 24 
 
 2.3333 
 
 2.6667 
 
 3.000 
 
 3.3333 
 
 4.0000 
 
 4.6667 
 
 25 
 
 2.4305 
 
 2.7778 
 
 3.125 
 
 3.4722 
 
 4.1667 
 
 4.8611 
 
 26 
 
 2.5278 
 
 2.8889 
 
 3.250 
 
 3.6111 
 
 4.3333 
 
 5,0555 
 
 27 
 
 2.6250 
 
 3.0000 
 
 3.375 
 
 3.7500 
 
 4.5000 
 
 5.2600 
 
 28 
 
 2.7222 
 
 3.1111 
 
 3.500 
 
 3.8889 
 
 4.6667 
 
 6.4444 
 
 29 
 
 2.8194 
 
 3.2222 
 
 3.625 
 
 4.0278 
 
 4.8333 
 
 5.6389 
 
 30 
 
 2.9167 
 
 3.3333 
 
 3.750 
 
 4.1667 
 
 6.0000 
 
 6.8333 
 
 IMo 
 
 2.9167 
 
 3.3333 
 
 .1.750 
 
 4.1667 
 
 6.0000 
 
 5.8333 
 
 2M0S 
 
 6.8333 
 
 6.6667 
 
 7.500 
 
 8.3333 
 
 10.0000 
 
 11.6667 
 
 3 " 
 
 8.7500 
 
 10.0000 
 
 11.250 
 
 12.5000 
 
 16.0000 
 
 17.5000 
 
 4 " 
 
 11.6667 
 
 13.3333 
 
 15.000 
 
 16.6667 
 
 20.0000 
 
 23.3333 
 
 6 " 
 
 14.6833 
 
 16.6667 
 
 18.760 
 
 20.8333 
 
 25.0000 
 
 29.1667 
 
 .^ 
 
 carry. This souvenir is pertinent to the busi- 
 ness, it costs about one and one-half cents per 
 copy and accompanied by a return post card, 
 
ADVERTISING DEVICES 193 
 
 is productive of much valuable information. 
 The table, the return card, the container enve- 
 lope, and the stamped envelope enclosing them 
 cost all told about three and one half cents per 
 set. Notw^ithstanding the very nominal cost, 
 this annual souvenir is the most popular finan- 
 cial advertising dodge ever originated by the 
 writer, and it takes just as well today as it did 
 ten years ago. In fact it is so popular that it is 
 copied by competing houses, notwithstanding 
 every effort upon the part of its originator to 
 prevent it. 
 
 Another case will serve to further illustrate 
 the point. Some time ago the writer wanted to 
 test out a large list of new names to find which 
 were bondbuyers. He therefore wrote a little 
 booklet of financial epigrams under the caption 
 "Fifty Financial Facts". (See Chapter XIV.) 
 This consisted of twelve pages and cover. The 
 printer was instructed that it should not cost 
 over one and one-half cents per copy and to- 
 gether with a long return card and a Govern- 
 ment No. 8 stamped one-cent envelope should 
 weigh less than one ounce. The specifications 
 were met, the entire cost was just three cents 
 per copy including the card, envelope and post- 
 age, and some fifty thousand booklets were 
 mailed out with excellent results in the way 
 
 13 
 
194 THE HUMAN SIDE OF BUSINESS 
 
 both of the desired checking and of general 
 publicity. 
 
 More or less pertinent to the topics discussed 
 in this chapter is the subject of a "follow up 
 system". The writer has been asked repeat- 
 edly what system he used to follow up the 
 work of the salesmen. His reply always was 
 that he had never been able to devise a satisfac- 
 tory system and had never found any one who 
 had done so. While every well organized bond 
 firm has one or more methods of trying to keep 
 in touch with its customers and prospects, 
 there is no substitute for personal contact. The 
 salesman must follow up the customer, and the 
 office must follow up the salesman. No one 
 house can get all the business, or there would 
 be only one house in business and such a condi- 
 tion never has and never will exist. 
 
CHAPTER XIV 
 
 FIFTY FINANCIAL FACTS 
 
 In 1915 the writer prepared, under the above 
 caption, a booklet "For the Inquiring In- 
 vestor". The purpose and use of this were out- 
 lined in the previous chapter (XIII), and here 
 it may not be amiss to give the text, which ex- 
 cept for the omission of a graphic chart of in- 
 vestments, is as follows: 
 
 FOREWORD 
 
 COMMENT has been made that the usual 
 financial presentation is understandable only to 
 the relatively small number of people who make 
 a study of scientific investment ; and that bank- 
 ing houses should appeal to the general public or 
 the great body of investors, in direct and simple 
 language, free from technical expressions. It 
 has, therefore, occurred to the writer that the 
 exposition in clear, concise epigram, of some of 
 the salient features of successful investing, would 
 prove of service to those who are uncertain 
 which way to turn, and are fearful of making a 
 misstep. 
 
 This pamphlet is consequently two-fold in 
 purpose: — (1) to present in crystallized form 
 some homely philosophy, familiar to all, but too 
 (I9fi) 
 
196 THE HUMAN SmE OF BUSINESS 
 
 frequently forgotten when parting with one's 
 money; and (2) to explain in untechnical lan- 
 guage some of the more important technicalities 
 of txjnd buying. 
 
 The thoughts herein expressed are the result 
 of some years of very practical experience in the 
 analysis and sale of securities and particularly in 
 the study of thousands of cases of irivesting — 
 successful and unsuccessful — ^that have come to 
 the writer's attention. 
 
 May these epigrams bring to a focus some of 
 the more important truths expounded in detail 
 in that vast store of financial literature which 
 is within the reach of everyone but seldom read 
 by the man who works hard to earn his money 
 and yet does not take the time to study how to 
 conserve it. 
 
 FIFTY FINANCIAL FACTS 
 1 
 Know your banker 
 
 For he who puts his faith in a dependable 
 banker need fear no rainy day. 
 
 2 
 
 As the oak grows from the acorn, so the dollar 
 saved is the seed of the thousand dollar bond 
 For the real bond buyers of the Nation are 
 the thrifty rather than the rich. 
 
 3 
 
 And no sum is too small to require good advice 
 For the small buyer of to-day is the large 
 buyer of to-morrow. 
 
FIFTY FINANCIAL FACTS 197 
 
 4 
 
 Put not your trust in him who promises both 
 safety and large profit 
 
 For no dollar can do two kinds of work at 
 
 once. 
 
 5 
 
 A safe first mortgage by any other name would 
 be as good and a bad security is not bettered by 
 a good title 
 
 For bonds, like men, are valued by char- 
 acter, not by name. 
 
 6 
 
 The shrewd man does not put all his profits back 
 
 into his own business 
 
 For in times of stress an anchor to wind- 
 ward may save the ship. 
 
 7 
 
 Beware of any security whose safety depends 
 upon good management alone 
 
 For it is human to err and the personal 
 
 equation has no property value. 
 
 8 
 
 The home investment is frequently a false idol 
 For while a prophet is not without honor 
 save in his own country, wealth goes by 
 contraries, and familiarity invites over- 
 valuation. 
 
198 THE HUMAN SIDE OF BUSINESS 
 
 9 
 
 Likezuise he is foolish who invests too large a 
 part of his savings in one community 
 
 For the fall of even a strong basket may 
 break all the eggs in it, and good baskets 
 are more abundant than good eggs. 
 
 10 
 
 The individual adviser is usually an egoist 
 
 For he advances his own theory of what is. 
 
 11 
 While the investment house is a composite altruist 
 For it employs the experience and judgment 
 of the crystallized organization and the ego 
 is subordinated to fact. 
 
 12 
 
 No one man possesses requisite knowledge and 
 experience to pass upon all the features of a 
 large financial transaction 
 
 For the proper protection of the investor 
 requires the co-operation of banker, lawyer, 
 engineer, accountant and business expert. 
 
 13 
 
 Consequently he who would invest with cer"- 
 tainty should seek those who are competent to 
 advise him 
 
 For the safety of a structure is not deter- 
 mined from the man who photographs it 
 when completed, but from those who pass 
 upon the materials and workmanship that 
 go into it. 
 
FIFTY FINANCIAL FACTS 199 
 
 14 
 He, who, on his own responsibility, takes a real 
 estate mortgage in preference to a hand flatters 
 his own judgment 
 
 For he assumes a business risk in order to 
 match his individual opinion against the 
 combined knowledge and experience of a 
 staff of experts. 
 
 IS 
 
 A dollar safely invested is worth more than 
 
 ten thousand that have been lost 
 
 For in financial matters experience is a 
 teacher whose lessons are not worth their 
 cost. 
 
 16 
 
 The intrinsic worth of a security is of more im- 
 portance than the color of its ink 
 
 For some bonds are donkeys in lions' skins, 
 while others that do not put on such a bold 
 front have the backbone that endures. 
 
 17 
 
 Each generation has its Mississippi Bubble 
 
 For man loves the spectacular, and the lure 
 of gold dims the oft-learned lessons of ex- 
 perience. 
 
 18 
 
 But those who are conservative are not at- 
 tracted by false prophets 
 
200 THE HUMAN SIDE OP BUSINESS 
 
 For the reliable banking house is like unto 
 the ship that has weathered many a storm 
 and carried its passengers to safety. 
 
 19 
 
 Buy not a guarantee but look to the intrinsic 
 
 worth of a security 
 
 For the strong man needs no crutches, and 
 the lame man, even with the best of 
 crutches, is a poor traveling companion. 
 
 20 
 
 Be not fooled by the house that agrees to "buy 
 
 back at the price paid" 
 
 For even as King Canute was powerless to 
 stem the tide, the "buy back" houses are 
 sooner or later swamped by the flood of 
 their own securities, and the agreements to 
 buy back are washed away in the deluge. 
 
 21 
 
 A sasfe house does not use unsafe methods, and 
 an organization that is unsafe in one thing is 
 usually unsafe in others 
 
 For when one weak link is visible in a chain, 
 others may be concealed and the banking 
 house to be safe as a whole must be safe 
 in all its parts. 
 
 22 
 
 Rely on the house that makes an honest and real 
 market for its securities 
 
FIFTY FINANCIAL FACTS 201 
 
 For when bonds are properly placed, the 
 law of supply and demand, which governs 
 all prices, tends under normal conditions to 
 maintain its equilibrium. 
 
 23 
 
 Listing a bond does not in itself create a ready 
 market 
 
 For there must be a buyer for every seller 
 
 and a seller for every buyer. 
 
 24 
 
 Far more important than listing, is it to have a 
 security well distributed in the beginning 
 
 For listing merely affords an additional op- 
 portunity for a previously created buyer and 
 a previously created seller to trade. 
 
 25 
 
 Likewise the Stock Exchange is not the real 
 
 market for bonds 
 
 For against every one sold on the Ex- 
 change ai thousand are sold outside. 
 
 26 
 
 Also the man who buys a listed bond usually 
 pays for the pleasure of seeing it quoted 
 
 For the greater the demand for a given 
 issue, the higher becomes its market price. 
 
 27 
 
 And if a bond investment must be quickly ne- 
 gotiable under all conditions, that privilege is 
 
202 THE HUMAN SIDE OF BUSINESS 
 
 purchased at the expense of either safety or 
 yield 
 
 For any security can possess the maximum 
 of but two of the three factors of safety, 
 yield and marketability, and the remaining 
 factor is lessened thereby. 
 
 28 
 
 To analyze correctly the earnings statement of a 
 holding company, add together the net earnings 
 of all the subsidiaries, and against the resulting 
 amount, offset the total fixed charges of both 
 subsidiaries and parent 
 
 For many a weak corporation makes a 
 strong earnings statement to sell its junior 
 securities by featuring merely the surplus 
 income available therefor. 
 
 29 
 
 And a disingenuous statement needs more than 
 
 ordinary scrutiny 
 
 For if a company does not earn a com- 
 fortable margin above all its fixed charges, 
 its bonds are not without risk. 
 
 30 
 
 Some industrial or manufacturing company 
 bonds are safe 
 
 For there is some good in everything. 
 
 31 
 
 But such securities as a class are speculative in 
 character, and suitable only for the man who 
 can take a business risk 
 
FIFTY FINANCIAL FACTS 203 
 
 For the earnings of industrials fluctuate 
 widely with business conditions, and the 
 margin of safety is uncertain. 
 
 32 
 
 While well selected public utility bonds possess 
 
 cm unusual degree of stability 
 
 For they are the obligations of companies 
 supplying public necessities such as gas, 
 water, electricity and transportation, for 
 which the demand increases with the 
 growth of population and assures a constant 
 and increasing earning power. 
 
 33 
 
 The man who says "I buy only municipals^' or 
 "I buy only railroad bond^' reasons from a false 
 premise 
 
 For there is good and there is bad in every- 
 thing and no one class of securities has a 
 monopoly of virtue. 
 
 34 
 
 But he who buys the best of the municipals, the 
 best of the rails and the best of the public util- 
 ities is farsighted 
 
 For he selects the safest bonds of each in- 
 vestment class and shuns the rest. 
 
 35 
 
 From a pecuniary standpoint, he is a wise in- 
 vestor who is not scared into buying municipal 
 bonds on account of the Income Tax 
 
204 THE HUMAN SIDE OF BUSINESS 
 
 For the Sur-tax is almost negligible in its 
 effect on income yield, and safe corpora- 
 tion bonds can be bought to return so much 
 more than safe tax exempt municipals that 
 the difference in annual income will pay the 
 amount of the tax several times over. 
 
 36 
 
 In dealing with an investment banker, the buyer 
 who candidly states his position, and frankly ad- 
 mits his inexperience fares well 
 
 For his adviser feels morally bound to give 
 the best of advice and service. 
 
 37 
 
 And the buyer who is well informed usually 
 fares well 
 
 For he can take care of himself. 
 
 38 
 
 But the man who does not know anything yet 
 pretends that he does, usually rides for a fall 
 For he is unwilling to take anyone's advice, 
 but insists upon buying whatever his inex- 
 perienced judgment may light upon. 
 
 39 
 
 The difference between "cost price" and "selling 
 price" is not all profit to the banker 
 
 For every bond issue that is brought out has 
 to pay the expenses of ten that have been 
 investigated and rejected. 
 
FIFTY FINANCIAL FACTS 205 
 
 40 
 
 Consequently it pays to deal only with the best 
 houses 
 
 For bonds, like pearls, require experts to 
 appraise them. 
 
 41 
 
 And the bargain hunter in securities is like the 
 man who carries his ozvn fire insurance 
 
 For he takes a risk rather than pay a small 
 
 premium for protection. 
 
 42 
 When a corporation is constructed like a pyra- 
 mid, with one dead weight upon another, it is 
 advisable to keep at a safe distance 
 
 For the laws of gravity apply to finance, 
 and if a structure is top-heavy, it will fall. 
 
 43 
 
 But if you must invest in a pyramid, see that 
 your stones are at the bottom of the pile 
 
 For they will be least disturbed by the col- 
 lapse of the superstructure. 
 
 44 
 
 When a producer is his own setting agent, let 
 the buyer beware 
 
 For under such circumstances one can not 
 
 count upon disinterested advice. 
 
206 THE HUMAN SIDE OF BUSINESS 
 
 45 
 
 But the investment bankers who do not promote 
 
 enterprises are the safe leaders 
 
 For they can be impartial in their examin- 
 ations, purchases and recommendations, 
 and there is no necessity for them to raise 
 capital for a company when their judgment 
 deems otherwise. 
 
 46 
 
 The man who subordinates the thought of 
 prompt and safe investment to an ambition to 
 buy at the bottom and sell at the top, usually 
 comes out the loser by buying at the top and 
 selling at the bottom 
 
 For he makes mountains out of molehills, 
 and molehills out of mountains, with the 
 result that his vision becomes blurred and 
 he loses all sense of proportion. 
 
 47 
 
 But the man who takes advantage of the oppor- 
 tunities of the moment and invests safely and 
 wisely without worrying about the future of the 
 market usually fares well 
 
 For he enjoys peace of mind, while the law 
 of average secures to him a fair return on 
 his money. 
 
 48 
 
 For the ordinary person or the one dependent 
 upon his income, stocks are an uncertain form 
 of investment 
 
FIFTY FINANCIAL FACTS 207 
 
 For their dividends depend upon surplus 
 earnings, and during times of dq)ressed 
 business may be reduced or passed entirely, 
 while bond interest is a fixed charge and 
 a first Uen on the operating income of a 
 company. 
 
 49 
 
 Buying from a "friend" or "relative in the busi- 
 ness" is frequently an expensive policy 
 
 For customary business caution and ordi- 
 nary conservatism are unwittingly sacri- 
 ficed to blind faith and favoritism. 
 
 50 
 
 Finally, if you are interested in sound invest- 
 ments for investment's sake, if you want judi- 
 cious and candid advice, if you want the benefit 
 of high ideals and long experience, if you want 
 the protection of thorough examination and 
 competent experts, if everything considered, you 
 want the Most Satisfactory Bonds 
 
 Deal with the house that is in business for 
 more than a day, that is actuated by a sense 
 of high moral responsibility towards its 
 customers, and that tries to give a full dol- 
 lar of value for every dollar received. 
 
CHAPTER XV 
 TENDENCIES OF THE BUSINESS 
 
 The bond business has been undergoing a 
 radical change for some years. With the 
 enormous increase in the number of investors 
 of moderate means, the old idea that the in- 
 vestment banker had to stand on his dignity 
 and wait for customers to seek his advice and 
 wares has given place to an aggressive contest 
 for business, and the distributing houses that 
 have not kept pace with the times have ceased 
 to be an important factor in the marketing of 
 securities. Many of the old line customers 
 have passed away and the ones who have taken 
 their places are on the average of much smaller 
 financial calibre. The volume of business has 
 grown by leaps and bounds and the number of 
 individual buyers has multiplied many fold but 
 the average sales are constantly getting 
 smaller and smaller. A clientele of this char- 
 acter is much more dependable but it necessi- 
 tates larger and better trained organizations, 
 greater efficiency of management and a more 
 uniform and higher type of investment service. 
 
 Competition for customers, and competition 
 
 (808) 
 
TENDENCIES OF THE BUSINESS 209 
 
 for bonds to sell, together with a broader ap- 
 preciation of the various classes of securities, 
 have reduced the gross profits to a point where 
 the largest retail houses, handling a volume of 
 business represented by nine figures, are for- 
 tunate if they can average much over one per 
 cent, of the par value. Statistics of this sort 
 are not available for comparison but it may be 
 assumed that in normal times anywhere from 
 fifty to seventy-five per cent, of the profit is 
 consumed in operating expenses. In years of 
 poor business, which come periodically and al- 
 most with regularity, the surplus above ex- 
 penses is generally reduced considerably and 
 sometimes wiped out entirely. At such times 
 too, heavy shrinkages are entailed in the prices 
 of securities on hand, and these may have to be 
 charged off against surplus profits carried over 
 from previous years for the bond house does 
 not buy its issues for permanent investment 
 but for resale in accordance with prevailing 
 market conditions and its losses are actual in- 
 stead of on paper, as is the case with a fiduciary 
 institution which can continue to hold its in- 
 vestments until the market again recovers on 
 them. For these reasons the average profits of 
 the true type of distributing bond house are 
 comparatively small, and entirely out of pro- 
 
 14 
 
210 THE HUMAN SIDE OF BUSINESS 
 
 portion to the capital and organization em- 
 ployed and the risk entailed. In fact, it has 
 been repeatedly stated, that there is no money 
 in the bond business. It is true that industrial 
 businesses periodically pass through very crit- 
 ical times, but when the opposite holds good 
 they more than make up for it by earning ab- 
 normal profits. Very few fortunes have ever 
 been made in the direct retailing of securities. 
 
 It is an unfortunate result of this condition 
 that the temptation is ever present to under- 
 take the financing of industrial combinations 
 and the promotion of new enterprises. The 
 more conservative firms endeavor to steer clear 
 of operations of this sort else they sooner or 
 later suffer sad experiences, while the so-called 
 promotion houses, which travel an entirely dif- 
 ferent road, are more oblivious to the perma- 
 nent safety of the issues they market and some- 
 times leave a trail of grief behind them. 
 
 Large selling organizations are becoming 
 the rule of the day, and branch offices have 
 largely taken the place of correspondents. 
 Such organizations have one very serious 
 drawback, namely their inability to adapt 
 themselves readily to the constant changes in 
 the supply of and the demand for securities. 
 When business is dull, that is when the market 
 
TENDENCIES OP THE BUSINESS 211 
 
 is apathetic, and it is easier to buy than to sell, 
 and profits are eaten up by expenses, the over- 
 head cannot be reduced by cutting down the 
 size of the organization as in an industrial 
 plant, for it is so difficult and expensive to 
 build up an effective sales force that it would be 
 suicidal to impair it; and when the market is 
 hungry and the salesmen are working at high 
 pitch the buying department is hard pressed to 
 get suitable goods to sell so that in the en- 
 deavor to find enough fuel to keep the machine 
 running there is the risk of standards being let 
 down and inferior securities creeping in. 
 
 As an illustration of the tendency of the 
 times, one ambitious concern is reaching out 
 in all directions with the apparent purpose of 
 trying to annex all the investors in sight. 
 However, the bond business cannot be run on 
 the plan of a chain of cigar stores, of corner 
 groceries, or of five and ten cent stores, where 
 the selling is merely ordertaking and the au- 
 thority all comes from one central bureau and 
 the direction of the agencies is a matter of rou- 
 tine, and in accordance with a cut and dried 
 system. To sell securities successfully through 
 a large organization, every branch manager 
 must be a sales manager, he must create a local 
 atmosphere and be able to secure the confi- 
 
212 THE HUMAN SIDE OF BUSINESS 
 
 dence of the people with whom he comes in 
 contact, giving to his work the same devotion 
 as if it were his own business, and he must have 
 sufficient latitude and authority to develop his 
 field according to his own originality and abil- 
 ity. Men of this type are rare, and rarer still is 
 the man who has the personality and is com- 
 petent to handle a group of such sales mana- 
 gers without friction, to keep them pulling to- 
 gether in the fullest unity and to maintain the 
 numerous branches in complete coordination 
 and at their maximum efficiency. No other 
 business is more sensitive to competent or in- 
 competent management, and so long as the de- 
 mand for men with the highest executive quali- 
 fications is greater than the supply, just as long 
 will monopoly fail and the right to "live and 
 let live" endure. When an organization be- 
 comes too large, the personal equation is lost 
 sight of, the supply of suitable securities it can 
 obtain is too limited to ensure the proper pro- 
 tection for its customers, the interests of the 
 individual buyer are subordinated, and the in- 
 vestment service rendered is of a superficial 
 and mechanical nature so that the concern be- 
 comes merely an impersonal machine. For 
 these reasons there need never be any fear of a 
 devouring octopus in the bond business. 
 
TENDENCIES OF THE BUSINESS 213 
 
 In the general financial scheme so long as 
 there are men of ability who prefer to maintain 
 their individuality and there are people who 
 want sound advice, there will be many firms 
 catering to the investment needs of the public 
 and supplying the quality of service which thus 
 can best be given. As stated before, the bond 
 business is a profession and is based just as 
 much upon the personal relation of adviser and 
 client as is law or medicine. The buyer of se- 
 curities, as a rule, has to accept the word of 
 the seller, and confidence therefore is the key- 
 note. The service is individual and the recom- 
 mendations of the adviser must be adapted to 
 the requirements of the client, else they are 
 without value. When a firm is independent 
 and can make its selection from all the bonds 
 available at a given time regardless of who pro- 
 duces them, instead of being under constant 
 necessity to originate enough issues of its own 
 to keep a large organization employed, it is in 
 a position to combine with real personal service 
 the widest range and the best choice of securi- 
 ties the market affords. 
 
 Thus, only when the personal relation of ad- 
 viser and client is developed to the maximum 
 is the highest function of the bond house 
 fulfilled. 
 
CHAPTER XVI 
 CONCLUSION 
 
 In this day of keen competition, one might 
 well wonder at the disclosure so freely made of 
 business secrets, and of the knowledge and ex- 
 perience gained by long years of persistent 
 effort. The answer is that nowhere does the 
 personal equation enter more largely than in 
 the bond business and as one artist cannot exe- 
 cute another's conception so each person must 
 originate his own particular system and carry 
 it to a successful conclusion. It is not ex- 
 pected, therefore, that the ideas and incidents, 
 portrayed in the previous chapters, can be used 
 in the exact form in which presented, but it is 
 hoped that they will not only be of some imme- 
 diate practical value but will stimulate the fur- 
 ther development of new methods, adaptable 
 to this and other lines of activity. 
 
 Throughout this discussion, one command- 
 ing fact should be clearly evident — that after 
 all success is due to individual and not material 
 factors, and is determined solely by the meas- 
 ure of the man; so if this book serves no other 
 purpose than to be an encouragement to young 
 men, and to spur some of them on to victory, 
 the writer will feel more than compensated for 
 all the time and thought he has devoted to it. 
 
 (214) 
 
DEPENDABLE ADVICE IS THE 
 KEYNOTE OF SAFE INVESTING 
 
 Frederick Peirce & Co. 
 
 BONDS FOR INVESTMENT 
 
 1421 CHESTNUT STREET 
 PHILADELPHIA 
 
 INQUIRIES INVITED 
 
liiitAli ititltaAiititit 
 
 ikiMititLiitiiiiiituii^mti 
 
 iMiiiitti 11