V The Story of the HTJ

v THE STORY OF THE "H. T. J." The Hardware Trade Journal, affectionately known to its intimates as the" H. T. J.,",vas established in 1 874 as the circular of a big Midland factoring house of those days, Martineau and Smith. It was, when I took it over, a small monthly with an annual gross revenue of £1,800. It is now, in 1925, one of the big trade weeklies of the world, with gross revenues of some £70,000 per annum. It does not pretend to rank as literature; it knows nothing of politics, poems, or the picturesque, but it deals with cooking-stoves, drain pipes, mouse-traps, and the mass of commonplace articles which, although our comfort and happiness depend completely upon them, are not ordinarily mentioned in Acts of Parliament, in fiction, or· even in the newspapers. Trade, so far as the ordinary writer is concerned, is still understood as indicating iron, coal, cotton, and ships. We have yet to learn as a people that the trade upon which we depend consists of all the various odd ments that are in everyday use. The iron trade, for instance, provides us with nothing but the raw material upon which an infinite amount of work has to be per formed before any of us in the ordinary way come into contact with it at all.

The big raw material trades, by virtue of their size and comparative simplicity, assume an exaggerated importance in our system of economy. In reality we 72 THE CONFESSIONS OF A CAPITALIST are much more dependent upon kettles, pen-knives, and brace-buttons than upo,n ingots; and the majority of the trade, employment, and vvork involved in bring ing iron to our service is performed after it has ceased to interest the iron trade and the orthodox political economist. Were it not for the avowed purpose of this book, some apology would be necessary for inflicting upon the reader a detailed story of my early connection with The Hardware Trade Journal. As will appear, it has nothing about it -which could not be found in the early story of most business enterprises, and to the experienced business man it may seem dull. I publish it because I hold that it is the clear duty of the business community to undertake the education of the public in the science of business. We have clung far too long to the old tradition that business should not be discussed out of business hours, for getting the fact that some twenty-two million electors are now the real controllers of affairs in business. And since politicians are determined to occupy their minds with our affairs it seenlS to me the paramount duty of my class to teach them something about the details of a business undertaking, and thus help them to take decisions which have, a measure of knowledge and fact behind them. Here, then, is the story of the " H. T. J."

In December, I 899, Mr. F. J. Francis, who had been working for twenty years previously in a sub-editorial capacity on The Ironmonger, secured an option to pur chase from Hazell, Watson and Viney The Hardware Trade Journal, which was then a monthly. Mr. Francis, an energetic and progressive middle-aged ~ - man, was actuated no doubt by the desire to exercise full authority as editor, a position that did not appear likely to be available on The Ironmonger. At that THE STORY OF THE" H. T. J." 73 time I was secretary to Benn Brothers, Ltd., and advertisement manager of The Cabinet Maker, and no doubt, like Francis, '1 felt the restraint of superiors and seniors who did not appear too anxious to make room at the top. Thus, when Francis and I came together, there was a combination of personal force and ambition, which is the first essential to success. Francis, in the first place, approached my father. I was not then, in the business sense, worth approaching, but my father handed him over to me, and, with the consent of myoId firm, I was allowed to develop the new business, while retaining the position of secretary and manager of the old.

I had very little money-Francis had still less; we could not, by ourselves, take advantage of this offer to sell by Hazell, Watson and Viney. We thereupon pre pared and issued the prospectus of a company called the Hardware Trade Journal, Ltd. In that prospectus, we explained the wonderful scheme we had devised for financing and running a trade journal. We hoped to secure the requisite capital from the retail ironmongery trade, the idea being that the trade would be willing· to invest in a newspaper whose mission it was solely to voice its views. The scheme was an early and very crude edition of the plan now being operated by Mr. • J. St. Lae Strachey with The Spectator. In our case it / was thoroughly bad, because it introduced a number of unsound financial considerations. The ironmongers who bought from advertisers in the journal were to receive preferential dividends according to the amounts of their purchases. In this and other ways, w'hich· appealed very strongly to the inexperi enced minds of Francis and myself, the scheme was quite unsound. . v We gave the company a nominal capital of £7,000 in 7,000 shares and issued the prospectus broadcast to the 74 THE CONFESSIONS OF A CAPITALIST ironmongery trade. Hazell, Watson and Viney, then, as now, one of the soundest concerns in the country, .guided by some of the shrewdest and kindest heads I have ever met, treated the young company promoters with caution, but with a generous helpfulness which will always remain in my mind as the first of many experiences in direct contradiction to much that I hear from pulpits and platforms, and most that I read in literature, of the grasping hardness inseparable from association with commerce. They thought well enough of the scheme to accept the purchase price of £1,500 in shares, coupling that acceptance with the condition that I should enter into, an undertaking to buy the shares over a period, I think, of seven years. In this connection, the life insurance that I had effected a year or two before came in useful as collateral security. I give this part of the story in some detail' as it illustrates rather well much that I shall have to say on the question oftisk.

It cannot be too much emphasised thai: in the conduct of any industrial or co~mercial undertaking risk is the vital element. Here was a great firm owning a nice little property and selling it for £1,500 with a risk. In return for their risk, they secured, firstly, a chance of getting a good price for their property, and, secondly, an order to print a journal. They took the risk that a young man of twenty-four, with some claim to know something about the business, might be able to earn enough money at it to pay them £1,500 over a period of years. The arrangement was one that suited me admirably. It was good business on the part of Hazell, Watson and Viney, 'and in the end it has turned out well for both of us. The chances in I899, however, were at least even, that Hazell, Watson and' Viney might lose their money and that I might become bankrupt.

THE STORY OF THE" H. T: J/' 75 The next bad thing about a bad prospectus was the provision that it made with regard to myself. I was to be managing-director, and the prospectus set out in a 'flo\very, separate paragraph how I, with all my experi ence in trade paper publishing, had been good enough to consent to serve the company in return for shares instead of cash. Shares to the number of 2,500 were thus allotted to me and I was bound to act as managing director without further remuneration for five years. Francis entered into a similar arrangement; though., in his case, he only compounded part of his salary for shares .. The prospectus was .then issued, and it produced practically no response. I remember that by return of post an Irish ·ironmonger sent in an application for one £I share, somebody else asked for five, and. I do not think that at the end of a week £100 had been sub scribed. The two promoters were in despair. There appeared to be no hope whatever. The scheme must fall through. At that stage I had a heart-to-heart talk with my father, who appeared to be very little surprised that the trade had not rushed to secure the advantage of this glowing prospectus. He was not in any case very much enamoured of prospectuses and companies with 9utside shareholders, but he recognised that· in the circumstances in which we were placed some steps had to be taken to secure some working capital.

Though he could ill afford it, my father offered to subscribe 500 shares if we could find some members of the trade with sufficient confidence in the prospects of the journal to take up 'at least an equal amount. Francis, who, by reason of his long connection with The Ironmonger,was known to the leading men of the industry, rushed !ound the country and, by strong personal pressure, scraped together 1,000 shares. It will be noticed that this company was formed before 76 THE CONFESSIONS OF A CAPITALIST the Companies Act of 1908. Had the formalities since imposed upon company promoters been in force at the time, they would have killed our enterprise at birth. ' In March, 19°°, we produced our first issue of The Hardware Trade Journal, having at the back of us £ 1,5°0 in cash capital and my undertaking to pay £1,5°0 to Hazell, Watson and Viney for the shares which they held in the. company. This was my first big debt.

As soon as I had acquired the copyrights, I made up my mind that I would publish weekly, as I have always held that in periodical work of this nature seven days is the limit to the interval that should be allowed to elapse between successive issues. The years from 19°° to 19°7 were, without any question, the hardest years of my life. The first three of them were spent in association with Mr. Francis, he as editor and I as publisher and manager; but when he died, his' end being unquestionably hastened by the strain of that period, I became both editor and manager , of the paper. I called myself managing-director because it sounded well, but it simply meant that I managed myself and four or five juniors. That was the extent of the staff that the paper could afford. I did for a time the whole of the provincial travelling, wearily searching the by-ways of Birmingham, Glasgow, Sheffield, and Manchester for makers of hardware goods willing to advertise them in the pages of the " H. T. J."

The story of the early years can, perhaps, best be told in figures. I have the accounts back to 19°3, but for the first two years I must rely upon my memory. By 'March, 190I, when our first balance-sheet was struck we had lost rather more than £900. By March, 1902, our second balance-sheet showed a further loss of some £200. The next year showed a profit. The THE STORY OF. THE "H. T. }.'; 17 following are the subsequent figures down to the year before the war: rear. Profit. rear. Profit. £ £ 19°3 95 19°9 1,4-4-2 19°4 4°3 1910 2,3°8 19°5 57° 1911 2,875 19°6 606 1912 2,2°9 19°7 935 1913 2,538 19°8 1,612 I am a firm believer in prompt figures, and have always declined to work in the dark. On April loth, 1900, I had completed a profit and loss account for the month of March, and on or about the loth of every month, for each of the 300 months that I have traded since then, I have had exact figures showing the previous month's transactions and results. The expansion of my business has depended entirely upon these prompt figures. I have been able all along to know exactly where I was and exactly what I could do. I have thus never lost any time whe~ there was the least justification for progress or expanSion.

As soon as I could see a profit I have always used it, and when my position was not such as to justify any thing but caution I have known it. Nor have I been content to rely solely upon figures of business accomplished. The profit and loss account for the previous month does enable one to know exactly where one stands in relation to one's debtors and credi tors, but it does not always constitute a sure guide as to what is likely to happen in succeeding months. For this reason I make a habit of keeping a separate set of accounts indicating, in a more or less rough way, what are the prospects of the immediate future~ The news paper business lends itself fairly readily to this system of forecasting, because, with subscriptions paid in 78 THE CONFESSIONS OF A CAPITALIST advance and advertisements secured for periods ahead, ·it is possible to gauge with fair accuracy the income and expenditure of the future.

It will be seen from the figures given above that my financial position in the first few years of The Hardware Trade 'Journal was, to put it mildly, precarious. The £1,500 cash capital with which I started was barely suJficient to cover the difference between the debtors and creditors of the business. The first use of capital is, of course, to enable one to pay wages for months in advance, before the retailing of the finished article brings any income into the business. At the end of the first year r had lost £900, thus making the posi tion extremely difficult, and it was then that I first took to the practice of accepting bills. Bills of exchange are at once the most dangerous and the most· beneficial of all the devices of finance. They can develop a despotic tyranny as well as a friendly subservience. Personally, though for years past I have discontinued their 'use, I still look back upon the bill of exchange with feelings of affection.

For the benefit of the uninitiated, a bill of exchange is a document in which one man decfares that so many days after its date he will pay to another man a, given sum. The form of words usually used is,for example, " London, March loth, 1900. Four months after date pay to our order the sum of one hundred and twenty five pounds two shillings and sixpence for value received." In the l.eft-hand bottom corner: "To Mr. E. J. P. Benn, I I Finsbury Square, London, E. C.," and in the right-hand bottom corner: " Thomas Printer & Co." Across this document, written by the acceptor: "Accepted, payable London and South Western Bank, Finsbury Branch, E. J. P. Benn." The very essence of the good' bill of exchange is contained in its last three words, " for value received,"

THE STORY OF THE "H. T. J." 79 for if these words are true, the bill is a perfectly sound form of currency. The bill has, it will be seen, three parties associated with it. The first is the drawer, the second the acceptor, and thirdly, if he will take a hand in it, the banker. The drawer, having got the bill accepted, takes it to his banker to discount, and the banker will, as a rule, give the customer· the present value, that is to say, the amount stated on the bill, less the discount according to the bank rate of the moment. In discounting a trading bill the banker has the double security of the acceptor and the drawer. When the bill falls due he presents it for payment at the acceptor's bank, and if then it should be dishonoured he returns it to the drawer-his cus tomer-debiting his account with its value. The banker . thus lends money to-say- Thomas Printer & Co. on the strength of the joint credit of Printer and myself.

It will be noticed that in 190~, when I began accept ing bills, I had not very much credit. My banker would give me a good character in respect of the small amount of business that had passed through my bank account, but he would not have been willing on the .strength of my figures to recommend me for credit to the amount that I was then in debt. So I was thrown back, as every young man starting in bu~iness with insufficient capital must be thrown back, upon the geJ::1erosityand judgment o( other business men; or rather, strictly speaking, I relied for my con tinued commercial existence upon that class of idle rich about whom so much nonsense is talked by poli ticians and others. Reviewing the transactions of those days in the light of a much fuller knowledge of economic matters than I then possessed, one sees again the inner functioning of exchange. Iqle rich possessors of money had risked their capital in sundry businesses such as paper merSo THE CONFESSIONS OF· A CAPITALIST chants' and printers', and that capitalwas now used to finance me. The true nature of the transaction was obscured behind contracts for paper and printing, but the fact remains as stated. 1"'he idle rich, in the guise of shareholders and proprietors of paper and printing houses, were willing to take· the risk of allowing me to buy printing and paper on long-credit terms, the prices, of course, being adjusted to cover the risk involved.

However much one may c~iticise their position, these persons rendered to me and, as I claim, to the com munity a real service, and I have never yet been able . to doubt the indispensability of such service to the common well-being and to the economic safety of the whole. Having lost £900 in the first year's trading, the balance-sheet of the Hardware Trade Journal, Ltd., was distinctly uninviting, and; it will be remembered, it was encumbered with an item of 2,5°0 shares 'held by me in respect of five years' services to be given to the company. The position was so serious that it was obviously necessary to do something in the way of writing down. I therefore consented-I confess with some reluctance-to surrender my shares and allow them to be cancelled. It may be imagined what a wrench this meant to me in the position in which I then was. A year before I had suddenly blossomed forth as a capitalist, the possessor of a handsome share certificate testifying that I was the owner of 2,500 shares of £1 each. To be robbed of this tribute to my business status at the end of a twelvemonth was not at all agreeable. But it was the only thing to be done.

My concern must be as near to solvent as possible; my accounts must be ready for examination when more credit was wanted, and so I surrendered my shares. In place of them I made an arrangement which shows THE STORY OF THE" H. T. J." 81 the confidence I had in the undertaking. It offered, it is true, very little immediate return, but it has since produced three-quarters of my income. I made an agreement with the company whereby I was to receive the sum of £300 a year, and, in addition,a quarter of the profits remaining after a dividend of 10 per cent. had been paid upon the shares issued. The share holders were content because it gave them some pros pect of a dividend. They were sure of a 10 per cent. return before the man who was working the concern secured anything worth having for himself. Another year passed to 1902, when a further £200 had been lost and the position was apparently worse.

By this time, £I, I 00 out of the original £1,5°0 work ing capital had gone completely. This meant that our liabilities must not be more than £400 in excess of our assets, an impossible position which was negotiated by the intervention of the bill of exchange. At this stage of the proceedings things to the outsider looked fairly hopeless. They were not, however, so hopeless to me. I had endured two years of hard struggle with the advertisers and subscribers whom I had secured, or hoped to secure, and I felt that things were moving in the right direction; but it was hardly to be expected that shareholders would take the same view. At the end of the second year one of my share holders with a hundred shares was tired of th~ trans action, having received no return' upon his money, and suggested to me that I should buy him out. I had nothing much with which to buyout him or anyone else; but by that time my credit was improving. I had by the'n accepted and paid quite a number of bills of exchange and bankers were getting more accustomed to my signature on these documents. I had no bad mark against me at the bank. of any of my customers, and at· my own ba'nk, when a cheque was drawn or a F 82 THE CONFESSIONS OF A CAPITALIST bill matured, sufficient money was always there to meet it, so that I had, notwithstanding all the diffi culties of these two years, acquired a certain amount of that indefinable but essential thing known as credit.

I w-as therefore able to buy my shareholder's ,100 shares, giving him in respect of them four bills of £25 each, payable at three, six, nine, and ,twelve months. The shareholder took some risk in transferring the shares to me on these terms, but his view then was, and he was probably quite right, that the bills appeared to be a little more valuable than the shares, upon which no prospect of return had yet appeared. By degrees, the knowledge of this transaction spread to the rest of my shareholders. With a unanimity for -which,I have never ceased to be thankful, they one and all approached me in the hope that I would treat them in the same way. In the course of three or four years, therefore, I had bought the whole of the shares that had been issued originally on the prospectus, except my father's 500 and Hazell, Watson and Viney's' 1,500. I was0"then making some little progress, but chiefly in the direction of extending my credit. My bill-book was my chief concern. Every few weeks /some pay ment to a shareholder, a printer, or a paper merchant would be due, and every few weeks some new ,creditor had to be found. The process was thoroughly sound and good with a serious person, as I undoubtedly was, and with a serious business, as I undoubtedly had.

Reduced to simple terms, my, regularly recurring problem was how to pay £roo, finding somebody of - whom to borrow £90 of it and using £10 of my small -savings to meet the remainder. In this way, although my total commitments were constantly mounting, my assets were mounting at an even higher rate, and the THE STORY OF THE "H. T. J." 83 difference on t1).e right side was getting always a little greater. The man who owns a sovereign and owes 2jS. is bankrupt. But the man who possesses £5,000 and owes £4,500 is solvent enough, if only he can per suade his creditors to wait for their payments until he can conveniently realise his assets. That was my position. About this time-my records are to-day missing, but I think it must have been'in 19°3-1 paid off Hazell, Watson and Viney in the same way on bills. Looking back, I think I must have been a bold person in those early years, cheerfully accepting loss and responsibility from which I fear 1 should shrink to-day. For by 19°3 I had acquired ,on credit £2,5°0 of shares, I had assumed responsibility for big debts for paper alld printing, I had purchased a small rival paper called Ironmongery from Messr.s. W. H. & L. Collingridge, also on bills, and on January 3rd, 1903, I was married.

Naturally there were times when this financial part of my work produced serious difficulties. There would be periods, particularly in the autumn, when money was tight and customers' accounts came in very slowly; and, now and again, but not often, really· complicated obligations had to be undertaken. I found on one occa sion a jobbing printer so anxious to have our orders for circulars, stationery, and sundry printing. that I used him to help me out of a difficulty. I transferred to him for £200 in cash a couple of hundred of the bigger mass of shares which I had taken upon my shoulders, he undertaking to sell:them back to me as soon as I could manage to buy them, and I undertaking in the mean time to give him a few hundred pounds'worth of work. The work was,. no doubt, expensively paid for, but, still, it had to be done. It will be noticed that in this way I had acquired 84-THE CONFESSIONS OF A CAPITALIST complete responsibility for the business and become the owner of practically the whole of the shares of the Hardware Trade Journal, Ltd.

By the time the company had turned the corner and; was making profits, those profits were for the most part mine. After, the first few years they began to be worth having, and a reference to my table on page 77 will show how, by the end of 19°8, I was quit of bills of exchange and accommodation creditors. A word must be said of the kindness, consideration, and helpfulness with which I was met all along the line by the many business persons with whom I came into touch during these strenuous and to me, eventful years. Only once do I remember any attempt really to take advantage of me, or to play the money-lender. I was received by the majority of those whose business it is to supply the requirements of the publisher with consideration, with sympathy, and with sound judg ment. I paid the proper price for my paper and my printing and nlY credit. The prices were, of course, more than I should have had to pay had I been able to offer cash, but the extra price was not more than was necessary to cover the risk involved in giving me credit. A year o~ two ago, in pursuance of my public work, I was taken seriously to task for expressing the opinion that there was more of the real spirit of Chris tianity to be found in business circles' than in many churches, and I offer the story of my own experience as some justification for a view which I still hold.

It must not be assumed, however, that The Hardware Trade Journal was received by its prospective customers with open arms. The task of finding advertisers and subscribers to support it was extraordinarily difficult . . Advertisers in particular were ,less than reasonable. I was offering, and I can say so now with the fullest sense of responsibility, good value for money, and I might THE STORY OF THE" H. T. J." 85 have been supported far more freely than I was. But the attitude of the market as I found it, and as I believe it generally to be to any new· proposition, especially of this class, was: "It sounds all right; it may be good; go on, see what you can do with others. If you don't die in the attempt and are alive in three or four years' time, we may begin to look at you." This is the hard side of private enterprise. But it is that hardness which makes it sound and equitable. The market has to be very sure that you believe in your own article before it will accept it. I went into a free market without the ability to impose my ideas upon anybody but' myself; where every buyer and every seller enjoyed perfect freedom to accept or reject every proposition made, and I had, quite rightly and properly, to satisfy the market that the article I was trying to sell was good enough for them to accept by the evidence of my own willingness to stand or fall by it. I gave that proof, and thus the market was sure that my service was worth having.

I t is in this part of the story that I should acknowledge the good fortune that has fallen to me in the shape of colleagues on my staff of exceptional ability and untir ing energy. I have been able by degrees to. build up a most accomplished body of industrial publicists, and thus have reached the present position when every week nearly £1,5°0 comes into and goes out of the coffers of The Hardware Trade Journal. Every penny piece of this large sum is freely paid in and freely paid out, without a suspicion of compulsion or obligation in any way on either side. This great journal now stands as a perfectly balanced part of the trade of the country without exacting any cost from anyone, without mak ing any call or demand upon a single individual or a single sovereign that does not participate freely and willingly.

86 T'HE CONFESSIONS OF A CAPITALIST It will be obvious that in the early years, and ever since, the spirit behind The Hardware Trade Journal has been the forward spirit. It has never mattered very much what would be the effect of some particular action at the moment of its doing., The all-important point has been, what would be the ultimate. effect? This forward-looking policy is essential to the suc cessful conduct of a "newspaper business. Our whole interest is not so much the size of the pro'fit on the individual !ransaction as the continuity of that profit; from which it follows that we always work on the smallest margin that we can possibly accept, in ~he - hope that it may be a continuous source of Income. The life of every bu;siness is, of course, absolutely dependent upon the satisfaction given to its customer. . There is nothing to be gained by making a few· sove reigns out of an advertiser-this week, if that advertiser is not going to secure satisfaction and remain a cus tomer for the thousands of weeks to coine, when the journal will still require advertisements.

In the long and trying process of creating con~dence and finding favour with the market, it has been neces sary to indulge in what are now known -as " stunts." The trade paper in 1900 was, on the· who~e, a poor affair, consisting mainly of trade notices. I have written hundreds of puff paragraphs for manufac turers, having no other object in view than to flatter them in the hope that they would. advertise. " Messrs. Jones and Brown, the well-known firrn of Sheffield manufacturers, whose celebrated edge-tools have secured for themselves a world-wide reputation, not only for quality of material and excellence of work manship, but also for·Cl combination of reliability and economy altogether above the average, have issued a new spring list ... " etc.

THE STORY OF THE "H. T. J." 87 That sort of thing is still written, and it is to my credit that quite early in my publishing life I cut it out. The trade Press is now practically free from this abuse,and the daily Press is almost the only place where the manu facturer, in consideration of his taking space, can secure a " puff" paragraph informing the world of his per sOhal qualities as well as his goods. I may be permitted to find some amusement in the fact that the popular and the daily Press have in recent years adopted a method long ago discarded by their trade and technical contem poraries. We ran for a time a comic page, and we did it ex tremely well. I spent more money than I could afford employing Tom Browne, then the foremost humorous artist of the day, to produce, once a month; a page of funny sketches for the amusement of the hardware trade. That funny page, no doubt, helped a little, but it taught me that humour, though a useful addi tion, cannot be regarded as a sales-promoting agent.

Advertisers are now discovering that the funny adver tisement defeat~ its own object. Another" stunt" which I ran is much more interest ing in these later days. I was for a time actively employed in a movement which was known as " price maintenance." Strange as it may seem to us, who are struggling with a class of retail tradesmen clinging too long to inflated profits, the trouble in the early part of the ceptury was to get the shopkeeper to make any 'profit at all. In his desire to render the greatest pos sible service to his clients his weakness was to cut the price of an article to a point at which it was worth nobody's while to touch it. Finally, in self-defence, manufacturers initiated the movement of price main tenance, whereby the makers of a special line attempted to force merchants and retailers to preserve a fixed price in the selling of those articles. I may further 88 THE CONFESSIONS OF A CAPITALIST claim that, as a young and struggling journalist, I did a very daring thing in this connection. A big firm of drapers in the provinces, known as price-cutters, bought quantities of well-known hardware lines, branded goods that had been well advertised, and offered them to the public at prices less than the actual wholesale figures.

These drapers, on the principle of throwing a sprat to catch a mackerel, were actually selling hardware goods at less than cost price tp attract custom for their drapery wares. I sought out a drapery expert and induced him to visit the various establishments of this great drapery firm and make a number of purchases of smaller lines, not so well-known to the public and upon which the margin of profit or loss was not so obvious. My expert came back with a bunch of receipted bills and a bag full of drapery sundries: half a yard of veiling; a yard of delaine; a boy's shirt; a pair of braces; a pair of corsets; and, I think, some shoes. On each of these articles the drapers In question had made a ,profit which varied from 200 per cent., in the case of the corsets, to something over 700 percent., in the case of the veiling. I published a series of articles explaining how these people were persuading the public that they were real agents of economy, when, as a matter of fact, at the expense of my hardware manufacturers, they were securing exorbitant profits upon most of their own merchandise. It brought me very near to a lawsuit, but we made the most of it. We published double colulnn advertisements in the local newspapers, offer ing to subscribe £200 to the hospitals if our statements should prove unfounded.

Another case occurred a year later, when I convicted one of my biggest advertisers of similar practices. Here I took a stronger line. I published my charges in the form of innuendo, and secured from the firm a cateTHE STORY OF THE" H. T. J." 89 gorical denial and angry threats of actions and damages. Not until the discussion had reached this stage did I produce my evidence in the form of receipted bills and names and addresses. That case cost me a good cus tomer, and lost me an advertising revenue I could ill afford, but it was good journalisn1, good service to the trade, ,and I have never regretted it. As a result of my experiences in connection with The Hardware Trade Journal I hold very strong views on the theory of competition. To my mind it is estab lished beyond question that competition, so far from being a curse and a danger, is the highest form of economic blessing. In 19°°, when I began with The Hardware Trade Journal, one of the foremost trade papers in the land, if not in the world, was The Iron monger, then, and now, published by the old .and respected firm of Morgan Bros. I was out, frankly, to beat The Ironmonger. Day by day, with subscriber after subscriber and advertiser after advertiser, I was engaged in argument as to the respective merits of the two papers. The competition through the twenty-five years I have been concerned in it has·been definite and serious. It is, of course, true that if some subscriber decides to read one paper, and one paper only, he must take either The Ironmonger or The Hardware Trade Journal, and that in taking the one he will appear to be robbing the other of a reader. The same argument holds good. of the advertiser.

But with over twenty years' experience behind us, and full figures to go upon, the fallacy of the argument against competition is demonstrated almost to perfec tion. On page~90 are the figures of the pages of advertise ments published by the two journals at the beginning and the end of twenty years. The number of pages of advertisements is a rough but fairly accurate gauge of the position of a newspaper and the size of its business.

90 THE CONFESSIONS OF A CAPITALIST Pages of Ad'lJertisementsPublished I . Increase - 19°1 1920 per cent. 'Ihe lronmonger ... ... ... 5,34-4- 10,824-100 The Hardware 'Irade Journal ... 971 7,850 800 Total , .. ". 6,31 5 18,674-The result of my twenty years' competitio"n with The Ironmonger, in so far as I have had any effect on it at all, has been to double its business. In the meantime' I have multiplied my own business by 800 per cent. The market in ironmongery journalism, so far as it can be gauged from advertising, has grown from "6,315 pages to 18,674 pages. The amount of money involved .(and here, of course, I have to calculate roughly, because I have,naturally, no access to the ledgers of my competitor) was in 190 I somewhere in the-neighbourhood of £35,000, and in I 920 approxi~ mately £180,000. It must be assumed that this money which is spent annually in the pages of The Ironmonger and The Hard ware Trade Journal is, on the. whole, well spent, and.

that it is therefore a sum which represents a very much larger amount of business which results from all this advertising. The hardware trade puts down £180,000 for the purpose of assisting the sale of its goods, and if, for the sake of argument, we assume that the trade as a whole allows in its cost accounts 5 per cent. for adver tising, then-there was transacted, ·as a result of the advertising of 190 I, £700,000 worth of hardware sales. On the same basis the amount of business for which The Ironmonger and The Hardware Trade Journal can claim responsibility in 1920 Was £3,600,000. So that, following this very' speculative argument to THE STORY OF THE" H. T. J." 91 its logical conclusion, the most obvious result of my twenty years' competition with The Ironmonger in the prornotion of hardware advertising has been to add £2,9°0,000 to the turnover or trade of the hardware industry as a whole.

This figure is probably a very gross under-estimate of the trade that has actually resulted from all this effort. It can be checked in another way. The Hardware Trade . Journal in the first six months of 1924 instituted a com petition in which it invited retail iron mongers to. keep a record of their purchases from advertisers and others. and, as the prizes amounted to £I ,000 in cash, a good many records were kept, and the figures produced were representative and reliable. Out of this competition there arose a discussion as to the value of the retail hardware trade of the country, and the argument narrowed itself down to a point where it was agreed on all sides that the retail iron mongers of the land were doing a business of not less than £80,000,000 per annum-probably a good deal more. From this it may be argued that in claiming £3,600,000 worth of trade as a result of the efforts of the hardware Press, I am, in all probability, seriously under-estimating its value. .

These figures have some interest in connection with current· political discussion. That the little iron mongers' shops all over the country, never mentioned in political controversy, forgotten by the Communists, left out of account by those who are so busy putting the world right, should be doing a trade of £80,000,000 a year helps to explain the deep-seated scorn and con tempt with which the business, classes regard futile arguments over such things as Russian trade agree ments and the paltry few millions that are held up as vital to the general well-being. It is not difficult to imagine what figures such as I 92 THE CONFESSIONS OF A CAPITALIST have quoted mean when translated into terms of wages and employment. I have the satisfaction of knowing that out of the bank account of The Hardware Trade Journal alone, some £40,000 a year is paid in wages to the people who are directly engaged in its production, and another sum almost equal in amount goes to swell the wages fund through more indirect channels. The paper carries half a dozen salaries, each of them far bigger than the whole of the profits of a few years ago, and is able to pay wages to compositors and manual worker~ at rates three times as high as those Ofl goo.

Those early struggles associated with the establish ment of The Hardware Trade Journal are in every way typical of all business growing-pains. There are many thousands of young men who ought to be encouraged by every means in our power to undertake the same kind of struggle. There were in I goo, and there are to-day, enough real difficulties with customers and creditors and business technicalities to make the task sufficiently formidable and to make the number who will essay it dangerously small. Therefore it seems to me to be the height of folly that we, as a community, should make work of this kind doubly difficult by creating restrictions and barriers in every direction, either by labour regulations or by legislative enact;It, ments. It cannot be denied that the problem which I tackled in 1900 was easy compared with similar problems to-day. If I had had to waste all the time in 1900 that I now waste in filling up forms, I am quite convinced that I should have given up. There were periods, constantly recurring, when one. was forced seriously to consider one's position, and when every bit of courage that one possessed had to be screwed up to the highest pitch. Often very little was needed <, to bring the whole effort to an end.

It is too little realised that the business of the country THE STORY OF THE" H. T. J." 93 depends upon a constant supply of new men and new enterprises to make good the deterioration and wastage of the old, and to add that new mass of service which must be available year after year if the standard of living is to rise. That supply of new men is being dammed up at the source by the modern theory that the State machinery can take the place of individual effort.