Before You Begin
ALEXANDER HAMILTON INSTITUTE
Before You Begin
How to use the Modern
ALEXANDER HAMILTON INSTITUTE
Astor Place - - New York
Canadian Address, C. P. R. Building, Toronto; Australian Address,
42 Hunter St., Sydney
Copyright 1921, Alexander Hamilton Institute
Before you begin
How to Use the Modern Business Course and
Service of the Alexander Hamilton Institute.
Read "VTOUR first interest, naturally, as a
this 1 subscriber to the MODERN BUSINESS
now COURSE and SERVICE, is to learn exactly
what it is and how to use it.
That is easily understood. Let us begin with the
When the Texts arrive at your home, take them
out of the fiber box at once and set them up on
the table where you can look at them. Run over
the titles on the backs of the volumes, in their order
so as to get an idea of the range of information
covered. Then open them up one by one and take
a glance at the matter within. Do this before be-
ginning to read systematically; you will find it will
be time well spent.
The quickest and best way of getting acquainted
with each volume is to pick out the table of contents
at the front of it and read the chapter headings, as
well as some of the sectional titles below. After
this, turn over to the back of the book and run thru
the index. These two features will give you a very
good notion of what you are to get out of the Texts
and show how conveniently they may be consulted.
Course TT1HE Texts, as you will see, are the
in JL backbone of the Course and Service ;
brief they furnish a complete organized treat-
ment of business principles and practice.
Packed with them will come the first of the semi-
monthly Talks and monthly Lectures. The Talks
will guide your reading and quicken your interest
in it. The Lectures will put you in touch with the
special ideas and methods of some of the leading
business and professional men in the country.
Before you have finished reading the first volume
of the Text, a third kind of pamphlet will reach
you. This will be a Problem describing a concrete
business situation, such as you already or may later
deal with. Its object is to test your judgment.
There is a Problem for each Text.
So much for business principles and practices. As
to current business happenings and the trend of
future business movements you will be kept in-
formed thru a Monthly Letter and a monthly
Financial and Trade Review. Four Modern Busi-
ness Reports on important phases or methods of
business will be sent to you as soon as you select
them from the List furnished with the Texts.
Last, a personal Service of information will be sup-
plied in answer to all inquiries in connection with
the reading of the Course.
Why you FT! HE manner in which the Texts
should read _I_ and pamphlets are arranged is
in order not accidental. It has a sound ped-
agogical basis. Just as in any uni-
versity or college course, the fundamental and easy
subjects come first and afterward those more dif-
ficult and highly specialized. The later books and
booklets consequently depend on the preceding ones
for complete clearness and interest. "Advertising
Principles" prepares you for "Advertising Cam-
paigns;" "Business Organization" leads you into
"Corporation Finance;" and "Plant Management"
and "Accounting Principles" make it possible for
you thoroly to understand "Cost Finding." The
order of arrangement is therefore important. You
will get the quickest and best results by following it.
One of the first things you will probably do when
the Texts reach you is to look up the subjects with
which you are familiar. That is a good idea.
Bear in mind, however, that the Course is designed
to tell you, not what you already know, but what you
don't know. If you are an accountant, of course
the Texts on that subject will not tell much that is
new to you. Yet, for that very reason, provided
your business knowledge does not go much beyond
strict accounting, the other subjects of the Course
are going to open up to you whole new regions of
practical possibilities. And the other readers who
know little or nothing about accounting such as
many advertising managers, agents and solicitors,
salesmen, purchasing agents, retail merchants and
professional men will find a great deal of useful
information awaiting them in the accounting Texts,
the information they need to make them better
all-round business executives.
Ten pages riiHE Course is laid out for two
of the Text JL years' convenient reading. Each
a day Text has been kept at about 300
pages so as to be covered in 30
days ten pages a day. This can readily be done,
even with the Talks and Lectures, which you may
read almost as quickly as you can your daily news-
paper. Answering the Problems will call for a few
extra hours a month.
At the head rTlHE Course and Service is un-
of the JL der the general supervision of
Institute the head of the largest University
School of Commerce in the United
States, Dean Joseph French Johnson, and the
sponsorship of an Advisory Council, consisting, be-
sides Dean Johnson, of Frank A. Vanderlip, the
financier; General T. Coleman du Pont, the busi-
ness executive; John Hays Hammond, the eminent
engineer; and Dr. Jeremiah W. Jenks, the statis-
tician and economist.
Reason HH HE Institute bears the name of
for the JL Alexander Hamilton because, among
name the honored fathers of our nation, he
stood preeminent for his business sagacity.
Hamilton is perhaps chiefly remembered for his
masterly statesmanship; but he was equally con-
spicuous as soldier, financier, author, organizer and
He was without doubt the greatest manager ever
employed by the United States Government. When
he became the first Secretary of the Treasury, he
found a chaotic government, without money, with-
out credit, and without organization. He secured
order, provided funds and created prosperity. He
investigated the industries and directed the early
commercial development of the United States. "He
touched the dead corpse of the public credit, and
it sprang upon its feet. He smote the rock of the
nation's resources and abundant streams of revenue
Hamilton was a great executive and systematizer ;
he himself worked out an accounting system for the
United States Government which, with but slight
modifications, remained in force for more than a
COPYRIGHT 1921, BY
ALEXANDER HAMILTON INSTITUTE
A SURVEY OF MODERN BUSINESS SCIENCE
All business activities may be classified under Production,
Marketing, Financing and Accounting. For purposes of
systematic study, each of these may be subdivided as
In addition, there are two important forces which control
business Man and Government. For that reason a dis-
cussion of the relation between "Business and the Man" and
"Business and the Government" naturally forms a part of
the survey of modern business. The first two and the last
two assignments in the Modern Business Course and Service
cover these important subjects.
Modern Business Course
The Text volumes are sufficiently described by their
titles and their authors, as follows :
Business and the Man Volume 1
By JOSEPH FRENCH JOHNSON, D.C.S., LL.D.,
Dean of New York University School of Com-
merce, Accounts and Finance; President of the
Alexander Hamilton Institute.
Economics the Science of Business Volume 2
By JOSEPH FRENCH JOHNSON, D.C.S., LL.D.
Business Organization Volume 3
By CHARLES W. GERSTENBERG, Ph.B., LL.B., Pro-
fessor of Finance, and Head of the Department
of Finance, New York University School of
Commerce, in collaboration with WALTER S.
JOHNSON, B.A., B.C.L., Member of the Bar of
the Province of Quebec; Lecturer on Railway
and Constitutional Law, McGill University.
Plant Management Volume 4
By DEXTER S. KIMBALL, A.B., M.E., Professor of
Industrial Engineering and Dean of the College
of Engineering, Cornell University.
Marketing and Merchandising Volume 5
Prepared by the Alexander Hamilton Institute in
collaboration with RALPH STARR BUTLER, A.B.,
Advertising Manager of the United States Rub-
ber Company,* and JOHN B. SWINNEY, A. B.,
Superintendent of Merchandising, Winchester
Salesmanship and Sales Management Volume 6
By JOHN G. JONES, Vice-President and Director
of Sales and Advertising, Alexander Hamilton
Advertising Principles Volume 7
By HERBERT F. DEBOWER, LL.B., Vice-President
and Chairman of the Executive Committee, Alex-
ander Hamilton Institute.
Office Administration Volume 8
By GEOFFREY S. GUILDS, B.C.S., Office Manager,
Alexander Hamilton Institute.
Accounting Principles Volume 9
By FREDERIC E. REEVE, C.P.A. (N. Y.), and
FREDERICK C. RUSSELL, Controller, Alexander
Credit and Collections Volume 10
By DWIGHT E. BEEBE, B.L., Director of Service,
Alexander Hamilton Institute, and T. VASSAR
MORTON, Litt.B., Bursar, Alexander Hamilton
Business Correspondence Volume 11
By CHARLES W. KURD, Associate Editor, Alex-
ander Hamilton Institute, in collaboration with
BRUCE BARTON, Author and Publicist.
Cost Finding Volume 12
By DEXTER S. KIMBALL, A.B., M.E., Professor
of Industrial Engineering and Dean of the Col-
lege of Engineering, Cornell University.
Advertising Campaigns Volume 13
By MAC MARTIN, President of the Mac Martin
Corporation Finance Volume 14
By WILLIAM H. WALKER, LL.D., Dean of
Duquesne University School of Accounts, Finance
Transportation Volume 15
By EDWIN J. CLAPP, Ph.D., formerly professor
of Economics, New York University
Foreign Trade and Shipping Volume 16
By J. ANTON DEHAAS, Ph.D., Professor of For-
eign Trade, New York University.
Banking Volume 17
By MAJOR B. FOSTER, M.A., Assistant to the
Executive Committee, Alexander Hamilton In-
stitute, and Assistant Professor of Economics,
New York University School of Commerce, in
collaboration with JESSE H. RIDDLE, formerly
with the Federal Reserve Bank of New York.
International Exchange Volume 18
Prepared by the Alexander Hamilton Institute in
collaboration with E. L. STEWART PATTERSON,
Superintendent of the Eastern Townships
Branches, Canadian Bank of Commerce.
Insurance Volume 19
Prepared by the Alexander Hamilton Institute, in
collaboration with EDWARD R. HARDY, Ph.B., Lec-
turer on Fire Insurance, New York University
School of Commerce, Assistant Manager, New
York Fire Insurance Exchange; S. S. HUEBNER,
Ph.D., Professor of Insurance, University of
Pennsylvania; G. F. MICHELBACHER, M.A.,
Actuary of the National Workmen's Compensa-
tion Service Bureau; and BRUCE D. MUDGETT,
Ph.D., Associate Professor of Economics, Uni-
versity of Minnesota.
The Stock and Produce Exchanges Volume 20
By ALBERT W. ATWOOD, A.B., Associate in Jour-
nalism, Columbia University.
Accounting Practice and Auditing Volume 21
By JOHN THOMAS MADDEN, B.C.S., C.P.A.
(N.Y.), Professor of Accounting and Assistant
Dean of the New York University School of
Financial and Business Statements Volume 22
By LEO GREENDLINGER, M.C.S., C.P.A. (N.Y.),
Secretary and Treasurer, Alexander Hamilton
Institute; formerly Assistant Professor of Ac-
counting, New York University School of Com-
Investments Volume 23
By EDWARD D. JONES, Ph.D., formerly Professor
of Commerce and Industry, University of Mich-
Business and Government Volume 24
By JEREMIAH W. JENKS, Ph.D., LL.D., Research
Professor of Government and Public Adminis-
tration, New York University, Member of Ad-
visory Council and Chairman of the Board, Alex-
ander Hamilton Institute, in collaboration with
JOHN HAYS HAMMOND, consulting engineer and
The first object of the Talks is to guide the sub-
scriber. Each Talk tells him exactly what he should
read during the current period first this Talk, then
so many pages in the Text, and also the accom-
panying Lecture or Problem. But the Talk has
another purpose. Its popular and practical treat-
ment of principles and methods prepares the reader
for the Text assignment and whets his appetite for
it. The Texts are reasonably easy reading, if taken
in order, but the Talks are still easier. The follow-
ing extract from the middle of Talk No. 3 on "The
Market Value of Brains" illustrates why :
Lincoln laughed. He went over to a bookcase and
ran his eye over the shelves. Then he picked out a
volume and slapped it down on the desk.
Putney leafed over the pages of the book. " 'Mar-
ginal utility !' " he snorted. " Tsychic income !'
Help! Police! 'Value' value of what? The rea-
son why I am down on all this stuff, Dave, is be-
cause it's so confoundedly vague. Why can't they
talk United States?"
"They are doing the best they can, Ralph," said
Lincoln. "Read it thru and see how much more
precise you can be. Do you know, old man, that
you're as sentimental as a girl about your little old
routine? You want things to stay just as they are.
But they don't. Economic forces keep on working.
They won't let you alone. You thought all that was
necessary for your advancement was for you to
make a big showing in your department. But eco-
nomic forces were all the time making it necessary
for the company to have an executive of a big,
broad type, and you didn't fit, and so you are pock-
eted in your old job. But you got what you went
after, didn't you ? You didn't really try for the big
chair. What you qualified for was a half-way-up
job. If you wanted to go all the way up, you
should have worked with the economic forces."
"What do you mean by economic forces?"
"Just human nature in buying and selling the rea-
sons why people want this and don't want that, and
why this is cheap and that dear, and why wages are
high or low, and so forth."
"Is that economics?"
Every Lecture is by some well-known business ex-
ecutive, accountant, or publicist and reflects his
experience in handling business problems. They
cover many different lines of business. If any one
of these men were to drop in on you for a brief
business visit you would feel like locking the office
door to keep everybody else out in order not to miss
a syllable of the information he might give you.
For example, hear Herbert S. Collins, one of the
founders and officers of the United Cigar Stores
Company and the United Retail Stores Corporation :
Each day's business in a United Cigar Store is a
unit by itself, but at intervals of seven, fourteen
and twenty-one days and at the end of the month,
the general office knows what shipments have gone
to each store in every line of goods. Reports of
receipts are transmitted to the general office every
day and are compiled for quick reference. At three
o'clock in the afternoon of every week day each
store deposits its receipts in a bank designated for
the purpose a sufficient amount for the change
being, of course, retained. This course is followed
in every one of the 250 cities in which the Company
operates stores. In compiling the records of the
store, separate account is kept of sales of cigars by
the piece and by the box.
Every price in United Cigar Stores is effective only
after authorization by the auditing department, in
order that the monthly inventories may be kept
straight. These inventories are taken by crews of
trained men who, after setting down the figures,
have the report in each case verified by the signa-
ture of the store sales manager. These inventories
are really the test of the efficiency of store sales
managers as storekeepers. The system is believed
to be a well-nigh perfect safeguard both against
carelessness and dishonesty in store management.
"How much has the reading of the Course improved
my business judgment?" You will get a very def-
inite idea of that by putting yourself in the place
of the executive pictured in each Problem and see-
ing how you would deal with the difficulty that con-
fronts him. It is not obligatory upon you to submit
a solution, but it will undoubtedly be worth while
putting your understanding to the test. At the same
time it will make your reading a good deal more in-
teresting. The opening of Problem No. 3, "From
Partnership to Corporation/ 1 will give you an idea
why this is so :
A disagreement caused by a decided and apparently
irreconcilable difference of opinion with regard to
the policy of the firm has suggested a dissolution of
the partnership of Easton, Parker and Hillard, for
eight years engaged in the fruit preserving business
in central New York State. Parker, who is twenty-
nine years old and the youngest of the three, is a
keen, aggressive and able business man, but his
youth, as well as the fact that his financial interest
is smallest, has, until recently, kept him in the back-
ground. Easton is the senior member, but advanc-
ing age has lessened his active participation in the
conduct of the business. However, he is strongly
opposed to certain changes in factory organization
and marketing methods which Parker believes to be
essential to the future success of the business. Hil-
lard Miss Josephine Hillard contributed a good
share of the original capital but is taking no active
part in the business. In all questions that arise she
sides with Easton, in whose judgment she has im-
Easton is urged by his family to retire from active
business, and Parker is anxious to be set free from
a partnership relation that to him is becoming more
and more irksome. It has been suggested to Parker
that if he could make such arrangements with his
associates as would permit him to organize a cor-
poration and secure for himself control and man-
agement of the business, it might be to his advan-
tage to do so.
The problem then goes on to outline the financial
condition the business is in. The questions which
come later indicate the practical value of the knowl-
edge that can provide the answers to them :
1. What are the immediate financial demands for
which Parker must provide if he takes over the
partnership and forms the corporation?
2. What are Parker's available sources of funds and
which of these can he use expediently in view of his
own financial responsibility and the future welfare
of the business?
3. Considering separately the elements of income,
control, and risk, and taking into account also the
past and prospective earning power of the business,
could Parker prudently undertake the financing of
When you submit a solution, it will receive individ-
ual attention, be graded and returned to you with a
memorandum of comment and a copy of the Insti-
On most of the subjects, outside of your own kind
of work, you require a minimum of necessary in-
formation ; every page of repetition that is excluded
is so much gain. But on your own subject and
occasionally on other subjects you want additional,
detailed data. These are given in Reports. The
Reports are written by professional and trade ex-
perts and members of the Institute Staff, and cover
both important business problems of general inter-
est and technical subjects relating to Accounting,
Sales, Office Methods, Merchandising, Production
and other specialized departments of business
A descriptive list of the Reports will be furnished
to you with the Texts. From it at any time during
the two-year period of your enrolment you may
choose the four Reports to which you are entitled.
Other Reports are obtainable at a stated charge.
The Reports run from ten to fifty pages in length.
Each one is prepared with reference to some spe-
cific method or phase of business and is the result
of special investigation. The subjects cover a wide
field, and every subscriber will find among them a
number which are of particular interest to him.
The list of Reports includes such titles as "Prep-
aration for the Accounting Profession," "Profit-
Sharing," "Territorial Supervision of Salesmen,"
and "Memory Training."
Letter on General Business Conditions and
Financial and Trade Review
Current fTlHE Text, as we have said, gives
information JL you the principles of business.
And it shows that you cannot apply
them in any offhand or cut-and-dried fashion, but
have to adapt them to circumstances. The most
important of these circumstances, very often, are
the prevailing conditions of trade and finance. How
is business going to be three months from now ?
Will money be cheaper, or dear? Are commodity
prices moving up, or down ? Will the labor supply
be ample, or short? Every executive has a vital
interest in knowing these things.
Some of the needed information you will get in the
financial pages of the daily newspapers, somewhat
unsystematically presented and mixed with much
guess and gossip. The Institute gives you all the
vital business news of the moment, carefully di-
gested and interpreted, in two kinds of monthly
bulletins. One is issued at the beginning of the
month and one in the middle, so that your contact
is really at fortnightly intervals. The first of the
bulletins is the Monthly Letter on general business
conditions ; the other is the Financial and Trade Re-
view. Both Bulletins are issued by our Bureau of
Carefully digested and interpreted, we said. There
is seldom any difference of opinion among careful
observers as to the trend of business at a given time.
They may not agree as to how soon a turn is com-
ing or how extreme it will be, but they will usually
take the same views as to the broad, general ten-
dency. It is not difficult to learn what these views
are if you study the markets for yourself and famil-
iarize yourself with the views and the reasons for
Unless you have had considerable business experi-
ence, you probably have not thought very closely
about business conditions. Now and then, even
very large and experienced houses get caught guess-
ing when they should know. Many concerns after
the war continued to expand plants and operations
when the "signs of the times" should have indicated
to them need for conservatism.
Foresight A S a matter of fact it is not only the
P a y 8 JL\. large houses that need to know
about impending business changes. Ev-
ery business house is concerned, and every ambi-
tious employe with it. You, yourself, whatever
your occupation or position, cannot help being in
some way affected by the future course of prices,
wages and profits. If you are a manufacturer, you
want to know the trend of business before placing
extensive orders for raw material, increasing your
factory facilities, taking on new help, accepting
business for future deliveries at a fixed price, bor-
rowing extensively, or making wage contracts. If
you do not realize, for example, when business is
about to slow down, as it began to slow down in
1920, then you will run the risk of making a serious
At such times few people can give you dependable
news or advice. Most of them will not. For one
thing, it is not easy to forecast events from their
early symptoms. When the first signs of a business
depression appear, responsible persons hesitate to
speak out. They may be afraid of precipitating
the crisis. They may want to put their own affairs
in order before many people know and it is too late.
They may want to take advantage of their advance
knowledge by selling "short" in the stock market.
You cannot depend upon the newspapers to warn
you. Depression is bad for them, too; it means a
loss of advertising. They will present the bright
side of things up to the last moment.
What the average man thinks about conditions of
course amounts to very little. The mass of the
public, including many business men, are always in
the dark as to coming events. Always, at the very
moment when business is going its fastest pace and
it is manifest to every thoughtful observer that it
cannot hold it long and that collapse is near, always
at that very moment people in general are surest of
prosperity. It is visibly there all around them and
they simply cannot help believing the evidence of
If you are a merchant, your case is much the same
as if you were a manufacturer. Instead of buying
raw material, you buy merchandise. Instead of
wishing to enlarge your factory, you may wish to