May

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Letters From A Self-Made Merchant To His Son (also online here): This is a wise book which every father should share with his children when they reach teen age. Many of the kids won't appreciate it until they are fathers and they have suffered the slings and arrows of business. It was written by George Lorimer who brought the Saturday Evening Post from a 1000 subscribers when he took over in 1902 to more than a million when he passed away in 1938. Lorimer must have been a friend of the Head of Armour or Swift and learned a lot from the road to success these meat packing and processing giants. As a side I note that many of the fortunes on the Chicago commodity exchanges started out in these packing plants. By following the advice of the self-made merchant, no wonder they were so successful.

Having been in business and visited many of the principles that Lorimer teaches, I can attest to their wisdom. The book consists of a series of 20 letters to his son which starts out with his son telling his dad about a business idea, his father warning him against pitfalls, then telling a story with metaphors that illustrates his point.

I will concentrate on his advice about Change, the commodity pits, and Wall Street.

What every man does need once a year is a change of work—that is, if he has been curved up over a desk for fifty weeks and subsisting on birds and burgundy, he ought to take to fishing for a living and try bacon and eggs, with a little spring water, for dinner.

He relates stories about gambling systems, gold brick speculation, and short squeezes engineered by his son and himself. His son asks for advice on a system his friend had figured out by logs and trigs and calculus that he learned at Harvard but he just didn't have enough money to carry it to its inevitable profitable conclusion. Graham tells the kids that the only thing the system provides is losses: "All the men who come to me with systems can only tell me about the losing end. The race horse, the faro tiger, and the poker kitty have bigger appetites than any critter has a right to have. Following these systems is apt to lead to the poor house or the Jail House." He gave hs son $1,000 to lose at 5% interest which he took out of his salary.

There is further advice about never selling short and never investing in a mining business you don't know about. Highly recommended.

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