The Stewardship of Wealth, From Personal Virtue to Delegated Trust

“ I will endeavor to open their eyes on their own bad management. It is not by giving to the importunate shillings and half-crowns, and turning them adrift to wait for the next accidental relief, that much good is done. It saves trouble, indeed, but that trouble being the most valuable part of charity, ought not to be spared; at least by those who have leisure as well as affluence. It is one of the greatest acts of kindness to the poor to mend their economy, and to give them right views of laying out their little money to advantage. ”

“ They become a habit. In order to prevent the habit from growing costly, you must make out a budget. Some days you are only "finding out what is there"; other days, before leaving home, you divest yourself of all the money in your pocketbooks and wallet except what you feel you can afford to spend. ”

“ Remember this saying, The good paymaster is lord of another man's purse. He that is known to pay punctually and exactly to the time he promises, may at any time, and on any occasion, raise all the money his friends can spare. This is sometimes of great use. After industry and frugality, nothing contributes more to the raising of a young man in the world than punctuality and justice in all his dealings; therefore never keep borrowed money an hour beyond the time you promised, lest a disappointment shut up your friend's purse for ever. ”

“ But the men and women who work either with head or hands—who fight their way—who plan to gain and plan to spend, so that the latter shall counterbalance the former—who lie sleepless in their beds, intent on how to make both ends meet—who are lucky and unlucky—who travel the ups and the downs of life, here grasping fortunes, there turning out the linings of penniless pockets: these are the people whose whole lives are one long succession of monetary sensations. ”

“ If a man is in a tight place and asks you to lend him money, or to give him money, that is a proposition to be considered on its merits. But to assume an indefinite responsibility by signing another man's note, is accepting the risk of ruining ourselves for his accommodation. We owe it to ourselves and our families to keep our finances absolutely under our own control, free from all complication with the risks and uncertainties of another's enterprises and fortunes. ”

“ How a man uses money—makes it, saves it, and spends it—is perhaps one of the best tests of practical wisdom. Although money ought by no means to be regarded as a chief end of man’s life, neither is it a trifling matter, to be held in philosophic contempt, representing as it does to so large an extent, the means of physical comfort and social well-being. Indeed, some of the finest qualities of human nature are intimately related to the right use of money; such as generosity, honesty, justice, and self-sacrifice; as well as the practical virtues of economy and providence. ”

“ Spend after your genius, and by system. Nature goes by rule, not by sallies and saltations. There must be system in the economies. Saving and unexpensiveness will not keep the most pathetic family from ruin, nor will bigger incomes make free spending safe. The secret of success lies never in the amount of money, but in the relation of income to outgo; as if, after expense has been fixed at a certain point, then new and steady rills of income, though never so small, being added, wealth begins. ”

“ Even though the poors' funds were more available than they are, the honest workman who wishes to maintain his self-respect can never complacently place his trust in them; for though it is not uncommon to hear individuals in humble life proclaiming that they have a right to them, the fact really is, that these funds are only a product of the humanity and economy of the country, designed to insure that there shall be no class left to misery and the barbarism attending it, but not to interpose between any one and his obligation to gain his own subsistence if possible. ”

“ The greater the amounts needed, the greater the need of expert advice and financial aid of the very best quality, because by training and experience bankers know where and how money can be obtained. With proper aid from bankers the officers of the company will not have their attention too much diverted from the work of careful management, safe and efficient operation, and good service to the public. ”

“ I’ll tell you—they pick men who have had a broad experience in the game; men who have had good reputations as good housekeepers; men who know how to analyze branch house expense as well as sales results; men who are so constituted that they can give REAL HELP to a manager who is intelligent enough to use the experience and advice that is thus afforded. It’s no reflection against your intelligence and ability to have one of ’em over you—why bless your old red-headed soul, the only man in this life who don’t need supervision, that I know of, is a wooden Indian in front of a cigar store. ”

“ If the family is at all kept up to its ideal, the young will help the old as they have been helped by them. This is not charity but mutual aid based upon mutual obligation for service rendered and there can be no substitute for this. It is this class that forms the backbone of a nation and which, by even moderate foresight, could provide for a modest support in their old age. The billions of dollars that they have invested in savings banks and in insurance institutions of various kinds show that they are not unmindful of the future. ”

“ Or the parents may agree, on a plan carefully thought out, to help if unexpected financial problems beset the young couple. Father may say that if illness overtakes either, or if the first baby arrives earlier than planned, or if a sudden decrease in salary comes, he will gladly help—not with a loan or as a grudging charity but as an interested party to the success of the marriage.
If the man possibly can, he should take out some insurance, seeking unprejudiced advice before choosing between the many kinds of policies each company writes. ”

“ If we reflect but for a moment on the vast amount of wealth daily entrusted even to subordinate persons, who themselves probably earn but a bare competency—the loose cash which is constantly passing through the hands of shopmen, agents, brokers, and clerks in banking houses,—and note how comparatively few are the breaches of trust which occur amidst all this temptation, it will probably be admitted that this steady daily honesty of conduct is most honourable to human nature, if it do not even tempt us to be proud of it. ”

“ He must be a constant student of financial conditions; and must expand or contract his loans as the sea of finance is placid or stormy. His responsibility is great. He must lend, but he must lend judiciously, millions of other people's money. He can not allow feelings of personal friendship to warp his judgment. He must be thoroughly familiar with the laws concerning the making and the collection of notes. ”

“ In many ways, in many instances, wrong impressions about finance have been given to the public, sometimes from ignorance, sometimes with malice aforethought, sometimes for political purposes.
The fact is that the men in charge of our financial affairs are, and to be successful, must be every whit as honorable, as patriotic, as right thinking, as anxious for the good opinions of their fellowmen as those in other walks of life. ”

“ First, we’re helping more Americans retire with security and dignity. Right now, if you go to a retirement advisor for investment advice, some of them don’t have to act in your best interest. Instead of telling you the best way to save your hard-earned money, these advisors can get backdoor payments from big companies for steering you toward investments that cost more and earn you less. As a result, when you retire, you might be missing out on tens of thousands of dollars – because your advisor got paid more to give you bad advice. ”

“ This week, I called on the Department of Labor to change that – to update the rules and require that retirement advisers put the best interests of their clients above their own financial interests. Middle-class families cannot afford to lose their hard earned savings after a lifetime of work. They deserve to be treated with fairness and respect. ”

“ Can a game be beaten where so many multimillionaires are created among those who are on the "inside" and where so large a percentage of the speculator's money must come out every year to pay the enormous cost of maintaining a vast system of stock-brokerage offices, stock exchanges, telegraph and telephone wires, newspapers, publicity bureaus, yachts, Fifth Avenue palaces, huge contributions to national and State political campaigns, etc.? ”

“ If the present faulty system is more profitable to a financier than a more perfect system would be, and if that financier values his few remaining years of personal profits more highly than he would value the honour of making a contribution to the life of the world by helping to erect a better system, then there is no way of preventing a clash of interests. But it is fair to say to the selfish financial interests that, if their fight is waged to perpetuate a system just because it profits them, then their fight is already lost. ”

“ In the course of my task I shall describe such parts of the general financial structure as will place my readers, especially those unfamiliar with its more complicated conditions, in a mental state to comprehend the methods by which the savings they think are safely guarded in the banks, trust and insurance companies, are so manipulated by the votaries of frenzied finance as to be in constant jeopardy. ”

“ The high standards of business morality exacted by our laws regulating the securities industry do not permit an investment adviser to trade on the market effect of his own recommendations without fully and fairly revealing his personal interests in these recommendations to his clients. ”

“ The time for prating of the purity of our public life, and for thanking the Divinity that in financial as in other matters we are not as other men, has gone by. When disasters like that of the Liberator group are possible, when examples of financial unsoundness are matters of every-day occurrence, when the very name of 'trust company' opens up visions of incapacity, deceit, and fraud, it is quite certain that things are ripe for stringent inquiry and reform. ”

“ As such exercise of congressional power has been common for, at least, half a century, Congress should not hesitate now to employ it where its exercise is urgently needed. For a comprehensive prohibition of interlocking directorates is an essential condition of our attaining the New Freedom. Such a law would involve a great change in the relation of the leading banks and bankers to other businesses. But it is the very purpose of Money Trust legislation to effect a great change; and unless it does so, the power of our financial oligarchy cannot be broken. ”

“ Anyhow, the money was taken from her, and I know of three cases in a single large family where the wife meekly indorses her dividend warrant so that the husband may pay it into his banking account. That spirit survives, but every day it decays; man, finding his wife competent, tends to make her an allowance, to let her have her own banking account, and never to ask for the pass book. He has thrown upon her the responsibility for all the household and its finance; by realizing that she was capable he has made her capable. Though she be educated, he loves her not less ”

“ Her husband, be he a working or professional man, would find it greatly to his advantage in the home as well as in his business and less of a drain on his bank account should he give his wife a suitable allowance and trust her to spend it according to her own intelligence and thrift.
"Child, many a man is violently prejudiced against giving a young wife money; many allow her to run up bills, to her hurt and to his, rather than have her, even in her household expenditure, independent of his supervision. ”

“ We have at best a temporary reallocation of income within an intimate family group. Since the income remains in the family and since the husband retains control over the investment, he has rather complete assurance that the trust will not effect any substantial change in his economic position. It is hard to imagine that respondent felt himself the poorer after this trust had been executed or, if he did, that it had any rational foundation in fact. ”

“ It is all very well to spend available means in order to set a son or daughter up in business, but such sums, if there are other heirs, should be charged against the share of the probable donee, with interest, and a record made of the same.
Under no circumstances should old people, who, after raising a family and living honorable lives, have saved enough to own their home and secure an income for their declining years, deed or give this property to their children, or to any one else, in consideration of their having all their subsequent wants met. ”

“ In actual practice, it is not uncommon for the wife to manage the entire income of the family, receiving it from her husband and acting as his treasurer. The wife's own earnings are seldom given to the husband, and her position is one of entire independence in the disposal of whatever she adds to the family revenue. But should the wife bring into the family at marriage property which passes into the husband's management, the chances are that, unless a divorce should occur, she will never lay any claim to the principal, or think of it [377] again as her own. ”

“ The provisos of the trust guaranteed a liberal annual income to her son during his lifetime and to his wife during hers, a smaller annual income to each of her grandchildren, and the expenditure of money for the education of those who had not completed their schooling, and its maintenance in force until her youngest grandchild should reach his majority. On the death of her son and his wife, and the arrival of the grandchildren at years of majority, the trust was to be paid over in equal shares to her grandchildren. ”

“ But if we are convinced that, for the present at any rate, this financial [Pg 51] self-maintenance is impossible, it is to securing help from those nearest to the sufferer that one should look with least regret. Gifts or loans from members of his family or from friends are more likely to be taken seriously by the recipient. He is less likely to feel (as he does with an impersonal agency or charity fund) that he can draw from a bottomless pit of money without making any one else the poorer. ”