and he acquires a technical knowledge of the processes and the machinery of the trade.(3*) Some of what he learns will be applicable only to his father's trade; but the greater part will be serviceable in any trade that is in any way allied with that;while those general faculties of judgment and resource, of enterprise and caution, of firmness and courtesy, which are trained by association with those who control the larger issues of any one trade, will go a long way towards fitting him for managing almost any other trade.Further, the sons of successful business men start with more material capital than almost anyone else except those who by nurture and education are likely to be disinclined for business and unfitted for it: and if they continue their fathers' work, they have also the vantage ground of established trade connections.
It would therefore at first sight seem likely that business men should constitute a sort of caste; dividing out among their sons the chief posts of command, and founding hereditary dynasties, which should rule certain branches of trade for many generations together.But the actual state of things is very different.For when a man has got together a great business, his descendants often fail, in spite of their great advantages, to develop the high abilities and the special turn of mind and temperament required for carrying it on with equal success.He himself was probably brought up by parents of strong earnest character; and was educated by their personal influence and by struggle with difficulties in early life.But his children, at all events if they were born after he became rich, and in any case his grandchildren, are perhaps left a good deal to the care of domestic servants who are not of the same strong fibre as the parents by whose influence he was educated.And while his highest ambition was probably success in business, they are likely to be at least equally anxious for social or academic distinction.(4*)For a time indeed all may go well.His sons find a firmly established trade connection, and what is perhaps even more important, a well-chosen staff of subordinates with a generous interest in the business.By mere assiduity and caution, availing themselves of the traditions of the firm, they may hold together for a long time.But when a full generation has passed, when the old traditions are no longer a safe guide, and when the bonds that held together the old staff have been dissolved, then the business almost invariably falls to pieces unless it is practically handed over to the management of new men who have meanwhile risen to partnership in the firm.But in most cases his descendants arrive at this result by a shorter route.They prefer an abundant income coming to them without effort on their part, to one which though twice as large could be earned only by incessant toil and anxiety; and they sell the business to private persons or a joint-stock company; or they become sleeping partners in it; that is sharing in its risks and in its profits, but not taking part in its management: in either case the active control over their capital falls chiefly into the hands of new men.
7.The oldest and ******st plan for renovating the energies of a business is that of taking into partnership some of its ablest employees.The autocratic owner and manager of a large manufacturing or trading concern finds that, as years go on, he has to delegate more and more responsibility to his chief subordinates; partly because the work to be done is growing heavier, and partly because his own strength is becoming less than it was.He still exercises a supreme control, but much must depend on their energy and probity: so, if his sons are not old enough, or for any other reason are not ready to take part of the burden off his shoulders, he decides to take one of his trusted assistants into partnership: he thus lightens his own labours, at the same time that he secures that the task of his life will be carried on by those whose habits he has moulded, and for whom he has perhaps acquired something like a fatherly affection.(5*)But there are now, and there always have been, private partnerships on more equal terms, two or more people of about equal wealth and ability combining their resources for a large and difficult undertaking.In such cases there is often a distinct partition of the work of management: in manufactures for instance one partner will sometimes give himself almost exclusively to the work of buying raw material and selling the finished product, while the other is responsible for the management of the factory: and in a trading establishment one partner will control the wholesale and the other the retail department.In these and other ways private partnership is capable of adapting itself to a great variety of problems: it is very strong and very elastic; it has played a great part in the past, and it is full of vitality now.
8.But from the end of the Middle Ages to the present time there has been in some classes of trades a movement towards the substitution of public joint-stock companies, the shares of which can be sold to anybody in the open market, for private companies, the shares in which are not transferable without the leave of all concerned.The effect of this change has been to induce people, many of whom having no special knowledge of trade, to give their capital into the hands of others employed by them: and there has thus arisen a new distribution of the various parts of the work of business management.
