Business history, as the study of the history of the administration and operation of business, is a relatively new discipline. As a separate academic field of study, research, and instruction, it is only about twenty-five years old and still in the stage of formulation and definition. Business history has been a peculiarly American development; the name itself was first used in the United States in 1925 to designate this special interest. But no scholar or generation of scholars begins de novo; each builds on foundations laid by earlier workers. Certainly, this is true of business history as we know it today; it owes a great deal to many individuals and to many disciplines. A number of historians and economists in the latter part of the nineteenth century and in the early part of the twentieth century made material contributions toward the development of this field. One of the most important of these was Werner Sombart. It is the purpose of this paper to indicate Sombart's role in this evolution.

Business history has proved an attraction to German businessmen and German scholars over a considerable period of time—to the former as promoters of anniversary volumes or Festschriften, and to the latter occasionally as authors of such volumes but especially as investigators with broader interests. Why such has been the case, in comparison for example with the weaker attraction to corresponding groups in other European countries, is not easily explained. Perhaps it stemmed originally from the businessman's desire to achieve greater acceptance in a society in which inherited landownership and service in government and army had a conspicuous influence. At all events, one must take the length and breadth of German business history as facts.

The Chinese have a proverb to the effect that language is used to conceal intentions. Notwithstanding their traditional frankness, Americans have written letters designed to mislead the reader. Certainly no series of letters, whether from clergymen, politicians, or businessmen can be taken uniformly at face value. But how may statements be discounted or interpreted in such a way that one may draw the correct meaning from them?

Usually the letters of one man are used in connection with the preparation of a biography of their author or the detailed analysis of a series of his actions. In either case cumulative knowledge of the writer's idiosyncrasies, continuing motivation, and, most of all, his actions themselves provide clues to acceptable interpretations. But when one reads the letters of a large group of men engaged over the course of many years in a common occupation, all of these conventional indicators are lacking.

At first, the early Massachusetts railroads did not fix the passenger and freight rates on the basis of any theoretical rate-making formula. Instead, they met the competition of wagons and stages and, where necessary and possible, the steamboats. The railroad directors wanted to assure the stockholders reasonable and regular dividends, but I have seen no evidence that the directors expected to maximize the profits, even within the limits of the charters. Only an occasional director was willing to risk the possibility of greater profits by experimenting with extremely low rates on the theory that really cheap, improved transportation sufficiently increases the demand for transportation to justify the lower fares.

While Jacksonian democrats moved resolutely to abolish the National Bank of the United States and denounced the very idea of such an institution as being incompatible with liberty, Governor José Felix Trespalacios, colonel of the imperial armies of Mexico and political chief of the Province of Texas, promulgated a decree in the historical city of the Alamo establishing the first “national” bank in the Americas west of the Mississippi. “Consonant with my duties,” he declared, “and mindful of the interests of this beautiful country and the deep regard in which I hold its inhabitants, I hereby order and command that a National Bank be established temporarily in this Province, subject to its ultimate approval by the Government.”

In the economic affairs of Britain the mid-nineteenth ccntury was the age of the relatively small and independent employer, conscious of a long-established prowess which had been surpassed nowhere in the world and in the conduct of the affairs of his works but little affected by the embryonic factory legislation and the feeble trade unionism of the time. Equally the large combine with its tendency towards standardization of conditions had still to come. Lord of all he surveyed, the employer's views on conditions of work are a good index of what actually was.

Building “Zion” in the intermountain West was a constant challenge to the officers and members of the Church of Jesus Christ of Latter-day Saints (Mormon) in the last half of the nineteenth century. The practical problem of developing a balanced and progressive economy in the arid mountain valleys and formless desert wastes of the Great Basin required perseverance, cooperation, and intelligent planning. The development of Utah is unique among western states in the form and extent of group planning and in the close supervision and direction of social and economic activities by a dominant church. The heroic efforts of the religious leaders of early Utah to develop the resources of the Great Basin are partly responsible for the progressive growth of employment and production after the permanent settlement of the region in 1847.

Three manuscripts in the possession of the Reading Antiquarian Society contain information about the business of shoemaking in the late eighteenth and early nineteenth centuries. One is the journal of James Weston, from 1788 to 1793; the others are account books of John Goodwin, Jr., and John Johnson, covering a somewhat later period. Each presents its distinctive picture of a shoemaker's work, with interesting contrasts. The career of Goodwin, in particular, illustrates one course of development from workman to businessman, which has been followed by many in past generations. It also demonstrates one reason why class lines have been so hard to draw in American experience. Often a man played both the employer's and the employee's roles at different stages of his own personal history, which not only affected his thinking, but also that of many who aspired to follow his example, and were sure it could be done because they had seen it happen. This transition has become more difficult since the development of the factory and its enormous capital requirements, but, in the days before the centralized workshop, enterprise and imagination were often capital enough to launch a business career.

The student of the various working-class movements which originated in the period of the Industrial Revolution in England has always to take account of the influence of Robert Owen on these movements. To each of them, this strange and interesting man brought a set of ideas and a range of experience which, when viewed in the light of his personal history, are of significance to the business historian.

The early railroads in Massachusetts employed two groups of fulltime officials: the civil engineer and the agent who supervised the construction of the road, and the superintendent and other officials who supervised the operation of the trains and depots. In this section we shall trace the early evolution of the latter group together with the development of the president and the treasurer.