316 AGRICULTURAL ECONOMICS 



shall organize and manage the factors of production, and who shall 

 work under direction. By the ceaseless working of competition, the 

 higher places are taken by those fairly capable of filling them, those 

 less capable of managing industry come under the direction of those 

 who on the whole are more capable, and the efficiency of the manage- 

 ment of business as a whole is maintained or increased. 



Many a man succeeds admirably in minor tasks of direction, but 

 has his limitations, whether due to natural endowment or defects of 

 education. A man may have just the qualities fitting him to manage 

 a small gang of men whom he can see, know, and direct personally, 

 but be unable to succeed where some power of imagination and some 

 ability at constructive planning are required. A good departmental 

 head may be a poor general manager. 



The highest function of the management, that which properly is 

 performed by the chief of the organization, is to form the general 

 commercial policy of the enterprise. Every active investment is made 

 in some generally predetermined line it is merchandise, agriculture, 

 manufacture, transportation, etc., and more specifically is wholesale 

 stationery, general farming, iron making, teaming, etc. From the 

 moment the general investment is made the management begins to 

 exercise the power delegated by the enterpriser, investing and rein- 

 vesting, shaping and reshaping the business in accordance with a con- 

 tinuous policy. In a degree varying with the kind and size of the 

 business, demand must be anticipated. The trend of changing 

 fashion, in engineering as well as in dress, the shifting of demand for 

 products, must be foreseen and prepared for not too rashly or too 

 cautiously. The process in every kind of undertaking, that of buying 

 and selling, as well as that of manufacturing, takes time. Materials 

 and labor are to be embarked in directions from which they cannot 

 be recalled. The widening or narrowing of the scope of the enterprise 

 (as to variety of goods, extent of the market sought, etc.) and the 

 enlargement or reduction of the size of the plant are decisions wisely 

 made only by a mind with a large business outlook. The larger the 

 investment and the more complex and distant the factors, the greater 

 is the difference of loss or of gain made by the manager's judgment. 

 The man who has the ability to do this exceptionally well in the 

 largest business merits the title of a "captain of industry." He is 

 not a mere employee of investors, but a prominent personality, whom 

 investors follow, eager to assume the financial risk under such leader- 

 ship. 



