Moreover, the business in its administration needs no elaborate system of coordination. If, it is small, the principal functions are well coordinated in the mind and memory of the owner 14. Flexibility of movement in, individual pro heads are better than one, but, on the other hand, too many cook-s spoil the broth. Every business man can recall examples within his own experience of partnerships wrecked on the rocks of personal incompatibility. In emergencies, the in dividual can more quickly change his course to suit new conditions than can a partnership or corporation. Opportunities for lucrative side lines or auxiliary oc cupations may be grasped by the individual. To be sure, such scattering of energies invites' risk to estab lished businesses. But, it must be remembered that at best the individual proprietorship is suited to small enterprises only, and is perhaps most frequently used as the first step in the evolution of large businesses. That individuals do depend very largely on side lines is borne out by experience. A German census taken in 1895 showed that about one-sixth of the people engaged in gainful occupations rely not wholly upon one occupation, but choose a second, or even a third avocation, to round out their incomes.' 15. individual, as a competitive busi ness unit, can make the most of the advantage of his sole proprietorship by keeping secret the means where by he improves his production, saves in purchasing or increases his sales. This element of secrecy is im portant since it gives to business alluring opportuni ties for the use of strategy. It makes business a game, thus bolding and increasing the interest of the owner. In many lines, where competition is close, and the margin of profit is small, and dependent upon constant improvements in machinery and productive processes, it is not unusual to find a well developed system of espionage, which indicates more clearly than anything else can do, the importance of the se crets that are so eagerly bunted.
16. Direct the transcending advantage of individual proprietorship lies in tbe di rect and ready response which it makes to extra effort and care. The individual gets the full advantage of his ability, skill, and industry, and the prospect of gain is the most effective incentive to the exercise of these qualities. No measurement of success is so con vincing and satisfying as a growing bank balance.
The noted economist, Dr. F. W. Taussig,1 tells this story of the beginning of Edison's career—a story that aptly illustrates the principle that direct gain is a most important stimulus to individual effort.
It is related that his first invention was a device for regis tering promptly and automatically the votes of a legislative body. Each member had only to press a button, and in a jiffy the count pro or con would be recorded. The proud young inventor gave a successful demonstration before a committee of the national House: but an experienced legis lator poured cold water on his enthusiasm with the remark: "Young man, if there is any- invention on earth that we don't want down here, it is this. One of the greatest weapons in the hands of a minority to prevent bad legislation is filibus tering on votes, and this instrument would prevent it." And, as the biographer tells us,—he was Edison's close as sociate and derived his information from the inventOr him self,—"Edison determined from that time forth to devote his inventive faculties only to things for which there was a real, genuine demand, something that subserved the actual necessities of hunianity." And, it must be added, that thru out his subsequent career, clear as it is that the man was possessed with an instinct for contrivance, he was also never indifferent to money. All his inventions were patented; no
pretense is made in his biography that pecuniary return was immaterial. True, the pecuniary management seems often to have been bad. Had Edison been a great business man ager as well as a grcat inventor, his fortune might have overtopped even the most amazing known to us. But it seems to have been lack of pecuniary ability, not the absence of pecuniary motive, which caused him to rank only among the common ruck of millionaires.
17 . Survival of the fittest in business.—Perhaps a fifth advantage of individual control—an advantage that accrues to society more than to its individual members—ought to be mentioned at this point. The direct relation between ability and incompetency on the one hand, and gain and loss on the other, con stantly tends to make individual proprietors move rapidly forward, or fall quickly backward to the ranks of labor. The struggle for existence is severe; it in sures a speedy elimination of the unfit. Progress marches, indeed may be almost said to gallop, in seven league boots. And there is a degree of certainty about the selection of the fit among individual pro prietors that is quite impossible in the more imper sonal forms of organization. John Brown's voice, his hand-shake, his face, even his gait, make me like or dislike him. In comparison, there is very little emo tional appeal in the A. B. C. Company.
Dewing,' in his history of the malting business, shows plainly thdt under certain conditions the per sonal element is vital to success.
The malting business is such that competition cannot be suppressed. The founders had been uniformly very pros perous on account of their familiarity with the business, at tention to detail, their thrift, perseverance and their pride in success. To a large extent these conditions were inherited by the second and third generation of maltsters, many of whom had risen to some local prominence and were aspiring to local social or political positions. At all events, the younger men attended carefully to the details of the malt business they had inherited, and even tho they may not have possessed the administrative ability of the earlier generation they succeeded in holding. their own positions with the local brewing trade, and in conducting the malt house with profit. After the establishment of the American Malting Company, the brewers found that they were no longer dealing with the same malt house that had furnished them with malt for years. On the contrary, their malt now came from the "Mil waukee branch" of the "Trust" and their business dealings were restricted to hired salesmen. They preferred the older, more personal, albeit more inefficient, method of doing busi ness and easily found grounds of complaint. "The 'trust' is using poorer barley," or "The 'trust' can't make as good malt as ." Provoked by the new conditions, the brewers turned to the small proprietary malt houses, the ow-ners of which, stimulated by the aggressive policy of the American Malting Company, made every effort to in crease their sales among the dissatisfied brewers. To make matters worse for the Company, it was discovered that the original contract, by which the selling maltsters agreed not to go back into the business for a period of years, could not be enforced at law. As a result manv of the old maltsters, having disposed of their stocks in the American Malting Company, built new and improved malt houses and solicited the trade of their old customers.