The history of the part played by the sedentary merchant in financing the business of his time is a long and important story. We know that merchants served as suppliers of capital to others as far back as in twelfth-century Genoa. Through the centuries mercantile families and sedentary merchants, as they grew old and rich, tended to specialize in lending money for business purposes. This contribution of the sedentary merchant was important in the economic life of many countries over centuries of time.

Man has developed three types of explanation of phenomena. The oldest is deistic or theological. From earliest times man has explained happenings and situations by looking to outside powers, at first to many gods and later to one all-powerful deity. We still say, “God wills it,” “Thy will be done,” and “the Lord giveth and the Lord taketh away.” But, not later than the flowering of the Greek mind, a second type arose, namely, the metaphysical or philosophical. According to this type of explanation, there are great forces at work, such as the pursuit of liberty, economic determinism, and the unconscious urge of the reproduction of our kind. Such explanations or solutions are easy, economical, and satisfying to their devotees. They tend to reflect the working of the mind, however, rather than mirror the world that is. Reacting from the subjective, modern scholars have insisted upon a more objective approach. Impatient with deduction, they have proclaimed induction as the more fruitful method of discovering and dealing with phenomena, The result is positivism or science. For over a hundred years, workers have been allured by the new prospects, and in the group have been both Comte and Pareto: let us discover facts and classify them and avoid all metaphysical dogma.

The development in the nineteenth century of new manufactured products which were made in large quantities and under increasing competition as the decades passed brought great changes in marketing organization, in the financing of marketing, and in selling methods. Since there was no adequate experience, no precedent, to go by, the changes that came were largely improvised and experimental. Some of the problems that arose and attempts at solving them are well illustrated by what happened in the marketing of sewing machines.

Observation of the operation of a number of large companies has convinced Professors Clough and Cochran, the two most active members of the New York Committee on Business Records, that in most companies no official is satisfactorily taking care of the problems of record management.

Professor Gras has asked me to talk today on government regulation in the field of Finance. When he first mentioned the matter it seemed to me a most stimulating suggestion. The more I considered it, however, the more difficult the assignment appeared. The more I thought about it the more the subject seemed to be made up of a large number of topics relatively unrelated to each other. Management of insurance companies can hardly be treated in the same paragraph with the divorce of security affiliates from commercial banks, and competitive bidding has little in common with measures designed to protect bank depositors. While many of the particular segments of this subject possess great interest in their own right and deserve careful individual treatment, they are for the most part technical and cannot be dealt with adequately in the time at my disposal. Moreover, they are in many instances special subjects. By this I mean that they have wholly different backgrounds, that their internal logics are dissimilar, and that the kinds of knowledge needed to see each in its proper perspective are quite disassociated. The problem is to knit this compartmentalized subject together so as, on the one hand, to see it as a whole, and on the other hand, to avoid somewhat empty generalities.

The public utilities furnish numerous and outstanding examples of government regulation and later government control if we follow the distinction between these which Professor Gras has indicated. Aside from water, the oldest of our utilities are those furnishing artificial gas, beginning in Baltimore in 1816. The early franchises or charters granted to these utilities represent, according to Professor Gras' definition, extreme forms of government regulation, because these franchises or charters actually fixed rates and prescribed the character of service to be rendered for very long periods of time, say for fifty years or double that length of time. In the case of our earliest railroad charters, granted beginning about the middle 1820's, the power to make rates was often granted to the Boards of Directors of the companies. Some States, while permitting the rates to be made by the railroads themselves, did make reservation of such power to the State if need arose for exercising it.

When we read about “government control” in recent years and then reflect upon the old term “government regulation,” we wonder whether a change has occurred. We ask our friends and find that they feel that there is a difference between the old regulation and the new control, but they hesitate to state what the difference is. Then we sit down to wrestle with the problem. The exercise is not easy. Perhaps the historical approach will be helpful.

The nation is just emerging from a state of wartime economic mobilization involving a degree of regimentation of its business life without precedent in this country and hardly surpassed by the most dictatorial régimes abroad. At the peak of the war effort a typical manufacturer was largely directed by the government as to what he might make, what raw materials he might use, to which customers he might sell, in what order, and at what price. He could not enlarge or substantially alter his plant without governmental authority. He was limited in both directions as to the wages he might pay. While not subject to direct coercive control in the selection of manpower, he could generally not hire workers beyond a semi-compulsory employment “ceiling,” and his manpower pool was radically limited by the demands of selective service and of competing war activities. His most important trade journal had become the Federal Register. While his discretion was not completely circumscribed, he moved within a framework so confined as to be tolerable only when the national existence was at stake.

On Monday, April 13, 1840, one William Bement moved to his farm at Northumberland, west of the Hudson River and north of Albany, New York. On that same day he started a diary in which he not only meticulously recorded the conventional observations about the weather but also set down details of his activities as a farmer and considerable information about the financial side of his farming. The diary ends abruptly on Sunday, February 20, 1842, apparently because Bement's career as a farmer was then coming to a close.

The lessons of the San Francisco earthquake and fire are constantly before any person interested in the preservation of the records of early business. So many of the actual facts will never be known because of the wholesale destruction of all the books of record of so many of the leading businesses dating back to the earliest days of commercial activity in California. For the business historian the extent of this catastrophe is far greater than the loss of the stories of individual businesses in San Francisco, insomuch as San Francisco was the financial center of not only California but Alaska, Nevada and, to a lesser degree, the Pacific Northwest. In order to tell the complete story of western business, the business historian must improvise and synthesize scattered records to get a connected account.

Freeman Hunt, the founder of the first general business magazine published in the United States — known today as the Commercial and Financial Chronicle — was also responsible for the publication of the first series of biographies of American business men. Biographies of mercantile capitalists and a few industrial capitalists were a regular feature of his Merchant's Magazine and Commercial Review from its beginning in 1839, and in 1855 and 1857 appeared the Lives of American Merchants edited and published by Hunt.

The Bulletin received in December an announcement of the hundredth anniversary of the Graniteville Company.