A concrete instance of what many good business men consider an evil effect of the Anti-Trust Act is illustrated by the controversy over "price mainten ance." Certain manufacturers of articles for which they have created a wide demand thru advertising have insisted upon fixing the price at which the re tailer shall sell, and have refused to sell to dealers who would not conform to such an arrangement. Some retailers protested and invoked the aid of the law, holding that the "price maintenance" policy was monopolistic in character.
The lack of uniformity in the legislation of different states with respect to important business matters, such as bills of lading and the rights and liabilities of cor poration stockholders, is a source of annoyance to business men in the United States. The American Bar Association deserves credit for its determined effort to correct this evil.
The lawyer is the only member of the community who profits by the situation. The prudent business man, before undertaking a new venture or entering into any new "deal," feels obliged to lay the entire matter before his attorney and to delay action until he has a favorable opinion. The numerous legal obstacles which lie in the path of successful business lessen the profits of business and increase the fees of the lawyer. Here is one reason why the legal profes sion gets a much greater revenue from business than it does from all other sources, and why young men preparing for the law are generally advised to special ize as much as possible in business subjects in their undergraduate work in college.
12. Climatic articles are in pretty constant demand thruout the year regardless of the weather or of the seasons, but for many articles the demand depends very much upon climatic con ditions. A late spring followed by an unusually cold summer causes loss to dealers in light summer cloth ing ; tbe dealer in Panama and straw hats may find the bulk of his capital locked up for a year, and the manu facturers may find in many cases that collections are impossible; summer resorts do not get their expected patronage. In the same way an unusually mild win ter lessens profits in furs and in heavy winter clothing, notwithstanding the fact that by a freak of fashion women sometimes wear furs in summer. ' It goes without saying that climatic conditions have great bearing upon the farmer's crops. Too much rain in one month or too little in another may lessen the yield of corn or of wheat or of cotton, and cause an abnormal advance of the price. Many of the raw materials of the manufacturer are exposed to price fluctuations due to the uncertainties of our climate. These.are risks which the business man, whether he be a trader or a manufacturer, must assume. They are a real and constant menace to his profit.
13. Changes in fashions and human wants are constantly appearing. Women take de light in new kinds of apparel and men are always seek ing new means of amusement. The bicycle gave way to the motorcycle and the automobile, and some people think the latter's supremacy will soon be menaced by the aeroplane and the dirigible. A wave of interest in
food values may sweep over the country and cause a change in the dietary of millions of people and thus affect the sales and profits of many dealers in food products. The growth of the temperance sentiment has lessened the profits of brewers and distillers.
Many chan,ies in demand are so gradual that busi ness men are able to make adjustments without loss. But others are so sudden and sweeping that some houses are caught loaded with goods that cannot be sold at a profit. -ManufaCturers of articles the de mand for which depends upon the permanence of a prevailing fashion or fad, are not considered desirable risks by bankers, for their assets are liable to sudden shrinkage at any time. Naturally, men engaged in. any business which locks up capital in goods likely to lose their value because of a shifting fashion or caprice, must make a larger profit on their turnover than dealers in staples or things for which the demand is fairly constant. Only the prospect of a large profit will tempt one into a business in which the risks are above the average.
14. Brains and survey of the obstacles that lie in the way of profit-making suggests a revision of the older economist's formula to the effect that wealth is the product of land, labor andsapital. The economist includes under labor the man whose work we have just been describing, namely, the busi ness man who is aiming to make a profit at the risk of loss. In recent books on economics he is called the entrepreneur or enterpriser. He is the mainspring of all business and industry. -Without his fearless, intel ligent and determined effort, capital would be idle, land unutilized, and labor unemployed.
Flow-ever, because of the fact that the word laborer is usually applied to men who work for wages and is not held to include those who assume business risks, it would seem desirable to add a fourth factor of pro duction to the economist's scientific formula, and that fourth factor must manifestly be "brains." Unless tbe labor and capital are directed wisely by intelli gence, and unless the cultivation of land is ruled by intelligence, there can evidently be little wealth pro duced. This is certainly true under our, modern com petitive system of business and industry, and it would still be true even no the competition were abolished and all business and indusby were taken over by the state. To win their case the socialists must prove that the management of the country's business and in dustry in the bands of men selected by the people would be more intelligent and efficient than it now is in the hands of men who have proved their right to command by their triumph in the bard struggle of modern business. As I have already said, competi tion leads to the survival of the fittest, and this means in plain English that the great businesses and indus tries of ,the United States are now managed by the men best fitted for the work. They have played the game hard and sometimes too roughly, but there can be no question about their right to leadership.