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 ••
Preface XXVII

PART 1
BUSINESS TRENDS: CULTIVATING A BUSINESS
IN DIVERSE GLOBAL ENVIRONMENTS 2

CHAPTER 1
The Dynamic Business Environment 2
PROFILE: Getting to Know Ron Foxcroft of Fox 40 International Inc. 2

Using this Course to Prepare for Your Career 4

Business Fundamentals 7
Revenues, Profits, and Losses 8
Matching Risk with Profit 8
Standard of Living and Quality of Life 9
Responding to the Various Business Stakeholders 10
Using Business Principles in Non-Profit Organizations 13
Spotlight on Small Business: Social Entrepreneurship 14

Entrepreneurship Versus Working for Others 15

The Importance of Entrepreneurs to the Creation of Wealth 16

The Business Environment 18

The Legal Environment 19
Making Ethical Decisions: How Ethical Are You? 21
The Economic Environment 21
The Technolog ical Environment 22
Reaching Beyond Our Borders: Connecting Companies with Global Freelancers 24
The Competitive Environment 26
The Social Environment 27
Adapting to Change: Gourmet Airport Eateries Take Flight 28
The Global Environment 30
Seeking Sustainability: Getting Involved Personally 31

The Evolution of Canadian Business 32

Progress in the Agricultural and Manufacturing Industries 32
Progress in Service Industries 34
Your Future in Business 36
SUMMARY 36
KEY TERMS 38
CRITICAL THINKING 38
DEVELOPING WORKPLACE SKILLS 39

••
VII
Contents

ANALYZING MANAGEMENT DECISIONS 39

VIDEO CASE I Ill

CHAPTER 2
How Economic Issues Affect Business 42
PROFILE: Getting to Know: Matt Flannery 42

How Economic Conditions Affect Business 44

What Is Economics? 44
The Secret to Creating a Wealthy Economy 47
Seeking Sustainability: 2015 Pan Am and Parapan Am Is LEEDing the Way 48
Growth Economics and Adam Smith 49
How Businesses Benefit the Community 49
Making Ethical Decisions: Smokers Need Not Apply 50

Understanding Free-Market Capitalism 51

How Free Markets Work 52
How Prices Are Determined 53
Spotlight on Small Business: The Key to Capitalism Is Capital 53
The Economic Concept of Supply 53
The Economic Concept of Demand 55
The Equilibrium Point and the Market Price 55
Competition Within Free Markets 56
Benefits and Limitations of Free Markets 58

Understanding Socialism 59
The Benefits of Socialism 60
The Negative Consequences of Socialism 60

Understanding Communism 60

The Trend Toward Mixed Economies 61

Reaching Beyond Our Borders: Economic Expansion in Africa 62

Canada' s Mixed Economy 64

Understanding Canada' s Economic System 65

Key Economic Indicators 66
The Business Cycle 71
SUMMARY 73
KEY TERMS 11.1
CRITICAL THINKING 75
DEVELOPING WORKPLACE SKILLS 75
ANALYZING MANAGEMENT DECISIONS 76
VIDEO CASE 2 76

CHAPTER 3
Competing in Global Markets 78
PROFILE: Getting to Know Leila Janah 78

•••
VIII
 Contents

The Dynamic Global Market 80

Why Trade w ith Other Nations? 82
The Theories of Comparative and Absolute Advantage 82

Getting Involved in Global Trade 84

Importing Goods and Services 85
Exporting Goods and Services 85
Measuring Global Trade 86
Spotlight on Small Business: Let the Games Begin 88
Trading in Global Markets: The Canadian Experience 89
Canada' s Priority Markets 89

Strategies for Reaching Global Markets 91

Licensing 91
Exporting 92
Franchising 92
Contract Manufacturing 93
Reaching Beyond Our Borders: McDonald's Over 100 Cultures Served 94
International Joint Ventures and Strategic Alliances 95
Foreign Direct Investment 96

Forces Affecting Trading in Global Markets 99

Sociocultural Forces 99
Economic and Financial Forces 101
Legal Forces 102
Physical and Environmental Forces 103

Trade Protectionism 104

The GATT and the WTO 106
The IMF and the World Bank 107
Producers' Cartels 108
Common Markets 108
Seeking Sustainability: The Politics of Oil 111

Globalization and Your Future 112

Making Ethical Decisions: How Much Information Is Necessary? 115

SUMMARY 116
KEY TERMS 118
CRITICAL THINKING 118
DEVELOPING WORKPLACE SKILLS 119
ANALYZING MANAGEMENT DECISIONS 119
VIDEO CASE 3 120

CHAPTER 4
The Role of Government in Business 122
PROFILE: Getting to Know Lisa von Sturmer of Growing City 122

Government Affects Business 124

Government Involvement in the Economy 124

ix
Contents

Crown Corporations 126

The Financial Role of Two Special Provincial Crown Corporations 127
The Role for Government 127

Laws and Regulations 129

Federal Government Responsibilities 130
Provincial Government Responsibilities 134
Municipal Government Responsibilities 137

Taxation and Financial Policies 137

Stabil izing the Economy Through Fiscal Policy 139
Making Ethical Decisions: Tackling the Deficit 141
Using Monetary Policy to Keep the Economy Growing 142

Government Expenditures 146

Financial Aid 146
Spotlight on Small Business: Sustainable Development Technology Canada 146
Equalization Program 149

Purchasing Policies 149

Seeking Sustainability: Procurement for the Planet 150

Services 151
Industry Canada 151
Department of Foreign Affairs, Trade and Development 152

Role of the Canadian Government-Some Final Thoughts 153

SUMMARY 155
KEY TERMS 157
CRITICAL THINKING 157
DEVELOPING WORKPLACE SKILLS 158
ANALYZING MANAGEMENT DECISIONS 158
VIDEO CASE ll 159

APPENDIX A
Working Within the Legal Environment of Business 162

The Need for Laws 162

Statutory and Common Law 163

Laws Made Under Delegated Authority: Administrative Agencies 164

Tort Law 165

Product Liability 165
Intellectual Property: Patents, Copyrights, and Trademarks 166

The Sale of Goods 167

Warranties 167

Negotiable Instruments 168

Contract Law 168

Breach of Contract 169

X
 Contents

Laws to Promote Fair and Competitive Practices 170

Laws to Protect Consumers 170

Product Performance 171
Business Practices 171
Misleading Advertising 171

Doing Business as a Corporation 172

Bankruptcy and Insolvency 172

The Companies' Creditors Arrangement Act 173

Deregulation 173
KEY TERMS lllJ

CHAPTER 5
Ethics and Social Responsibility 176
PROFILE: Getting to Know George Roter of Engineers
Without Borders 176

Ethics Is More Than Legality 178

Ethical Standards Are Fundamental 179
Ethics Begins with Each of Us 180
Making Ethical Decisions: Canadian Ponzi Schemes 181

Managing Businesses Ethically and Responsibly 184

Spotlight on Small Business: A-Way Express 184
Setting Corporate Ethical Standards 185

Corporate Social Responsibility 190

Concepts of Social Corporate Responsibility 193
Responsibility to Customers 194
Responsibility to Investors 194
Responsibility to Employees 196
Responsibility to Society 197
Responsibility to the Environment 199
Seeking Sustainability: Green Is the New Black 200
Social Auditing 201

International Ethics and Social Responsibility 204

Reaching Beyond Our Borders: Going by a Different Standard 207
SUMMARY 208
KEY TERMS 210
CRITICAL THINKING 210
DEVELOPING WORKPLACE SKILLS 210
ANALYZING MANAGEMENT DECISIONS 211
VIDEO CASE 5 212
Running Case: Ron Foxcroft The Dream for a Pealess Whistle 2/IJ

•
XI
Contents

PART 2
BUSINESS OWNERSHIP AND SMALL BUSINESS 218

CHAPTER 6
Forms of Business Ownership 218
PROFILE: Getting to Know Brian Scudamore, Founder & CEO of
Three Franchise Companies: 1-800-Got-Junk?, Wow 1 Day Painting, and You Move Me 218

Starting a Small Business 220

Sole Proprietorships 221

Advantages of Sole Proprietorships 221
Disadvantages of Sole Proprietorships 222

Partnerships 224
Advantages of Partnerships 225
Disadvantages of Partnerships 226
Spotlight on Small Business: Bags That Travel 227
Making Ethical Decisions: Outsourcing or Outsmarting? 229

Corporations 229
Adapting to Change: Challenges of Family Businesses 232
Seeking Sustainability: B Corporations Let Sustainability Set Sail 233
Advantages of Corporations 234
Disadvantages of Corporations 238
Business Regulations 238

Franchising 240
Advantages of Franchises 241
Disadvantages of Franchises 243
E-Commerce in Franchising 244
Home-Based Franchises 245
Franchising in International Markets 245

Co-operatives 246

Which Form of Ownership Is Best for You? 247

SUMMARY 2118
KEY TERMS 250
CRITICAL THINKING 250
DEVELOPING WORKPLACE SKILLS 250
ANALYZING MANAGEMENT DECISIONS 251
VIDEO CASE 6 252

CHAPTER 7
Entrepreneurship and Starting a Small Business 254
PROFILE: Getting to Know Tonia Jahshan of Steeped Tea 254

xii
 Contents

The Age of the Entrepreneur 256

Well-Known Canadian Entrepreneurs 256

Why People Take the Entrepreneurial Challenge 258

Spotlight on Small Business: MyVoice Is My Business 259
What Does It Take to Be an Entrepreneur? 260
Turning Your Passions and Problems into Opportunities 261
Female Entrepreneurs 262
Entrepreneurial Teams 264
Micropreneurs and Home-Based Businesses 265
Web-Based Businesses 266
Entrepreneurship Within Firms 268

Encouraging Entrepreneurship: What Government Can Do 269

Getting Started in Small Business 270

Small Versus Big Business 271
Small Business Statistics 271
Importance of Small Businesses 272
Small-Business Success and Failure 273

Learning About Small-Business Operations 274

Learn from Others 274
Get Some Experience 275
Buy an Existing Business 275
Making Ethical Decisions: Should You Stay or Should you Go? 276
Buy a Franchise 277
Inherit/Take Over a Family Business 277

Managing a Small Business 278

Planning 278
Financing Your Business 279
Knowing Your Customers 284
Reaching Beyond Our Borders: Listening to What Your Customers Need 285
Managing Your Employees 285
Keeping Records 286
Looking for Help 286

Going International: Small-Business Prospects 287

SUMMARY 288
KEY TERMS 290
CRITICAL THINKING 290
DEVELOPING WORKPLACE SKILLS 290
ANALYZING MANAGEMENT DECISIONS 291
VIDEO CASE 7 292
Running Case: Fox 110 International Inc.: A Family Business 2911

APPENDIX B
Entrepreneur Readiness Questionnaire 296

xiii
Contents

PART 3
LEADERSHIP, ORGANIZATION, AND PRODUCTION TO
SATISFY CUSTOMERS 300
CHAPTER 8
Management and Leadership 300
PROFILE: Getting to Know Sheryl Sandberg, COO Facebook 300

Managers' Roles Are Evolving 302

Functions of Management 304
Planning and Decision Making 306
Spotlight on Small Business: I'd Rather Be Blue 311

Decision Making: Finding the Best Alternative 313

Organizing: Creating a Unified System 314

Tasks and Skills at Different Levels of Management 317
Reaching Beyond Our Borders: Back to School for Top Managers 318
Staffing: Getting and Keeping the Right People 319

Leading: Providing Continuous Vision and Values 319

Making Ethical Decisions: To Share or Not to Share 321
Leadership Styles 321
Seeking Sustainability: Leadership in Sustainability 324
Managing Knowledge 324
Adapting to Change: Using Social Media During the Worst of Times 326

Controlling: Making Sure It Works 327

A Key Criterion for Measurement: Customer Satisfaction 328

SUMMARY 329
KEY TERMS 331
CRITICAL THINKING 332
DEVELOPING WORKPLACE SKILLS 332
ANALYZING MANAGEMENT DECISIONS 333
VIDEO CASE 8 334

CHAPTER 9
Structuring Organizations for Today's Challenges 336
PROFILE: Getting to Know Jenna Lyons, President and Creative Director for J Crew 336

Everyone's Reorganizing 338

Building an Organization from the Bottom Up 338
The Changing Organization 340
Making Ethical Decisions: Safety and Environmental Concerns Versus Profit 340
The Development of Organizational Design 341
Turning Principles into Organizational Design 344

xiv
 Contents

Decisions to Make in Structuring Organizations 345

Choosing Central ization Versus Decentral ization of Authority 345
Choosing the Appropriate Span of Control 346
Choosing Between Tall and Flat Organization Structures 348
Weighing the Advantages and Disadvantages of Departmentalization 349

Organization Models 353

Line Organizations 353
Line-and-Staff Organizations 353
Matrix-Style Organizations 354
Cross-Functional Self-Managed Teams 357

Managing Interactions Among Firms 359

Seeking Sustainability: Ethical Consumerism 359
Virtual Organizations 360
Spotlight on Small Business: Canadian Virtual Assistant Association 361
Benchmarking and Core Competencies 362

Adapting to Change 364

Adapting to Change: When Open Communication Should Not Be So Open 365
Restructuring for Empowerment 366
The Restructuring Process 367
Creating a Change-Oriented Organizational Culture 368
The Informal Organization 370

SUMMARY 371
KEY TERMS 373
CRITICAL THINKING 373
DEVELOPING WORKPLACE SKILLS 374
ANALYZING MANAGEMENT DECISIONS 375
VIDEO CASE 9 376

CHAPTER 10
Producing World-Class Goods and Services 378
PROFILE: Getting to Know Shahid Khan of Flex-n-Gate 378

Canada Today 380

Research and Development 381

Canada' s Evolving Manufacturing and Services Base 383

From Production to Operations Management 384

Seeking Sustainability: Carbon Capture and Storage 385
Reaching Beyond Our Borders: How Does Canada Shape Up as an International Competitor? 386

Operations Management in the Service Sector 388

Measuring Quality in the Service Sector 388

Operations Management Planning 389

Facility Location 390
Making Ethical Decisions: Do We Stay or Do We Go? 391

XV
Contents

Facility Layout 394

Materials Requirement Planning (MRP) 395
Purchasing 398
Just-in-Time Inventory Control 398
Quality Control 399
Spotlight on Small Business: Meeting the Six Sigma Standard 401
Supply Chain Management 404
Adapting to Change: Your Own Farm in a Box 404

Production Processes 406

Improving Production Techniques and Cutting Costs 409

Flexible Manufacturing 410
Lean Manufacturing 410
Mass Customization 411
Robotics 412
Computer-Aided Design and Manufacturing 413

Control Procedures: PERT and Gantt Charts 414

Preparing for the Future 416

SUMMARY 1117
KEY TERMS 1119
CRITICAL THINKING 1119
DEVELOPING WORKPLACE SKILLS 1120
ANALYZING MANAGEMENT DECISIONS 1120
VIDEO CASE 10 1121
Running Case: Leadership, Benchmarking, and Operations Management Planning at Fox 110 International Inc. 1123

PART 4
MANAGEMENT OF HUMAN RESOURCES 426
CHAPTER 11
Motivating Employees 426
PROFILE: Getting to Know Lisa Lisson of FedEx Express Canada 426

The Value of Motivation 428

Frederick Taylor: The Father of Scientific Management 431
Elton Mayo and the Hawthorne Studies 433

Abraham Maslow's Hierarchy of Needs 434

Frederick Herzberg' s Motivating Factors 435

Applying Herzberg' s Theories 437
Seeking Sustainability: Values Drive Vancity 's Climate Change Initiatives 439

Douglas McGregor's Theory X and Theory Y 440

Theory X 440
Theory Y 440

xvi
 Contents

Goal-Setting Theory and Management by Objectives 442

Meeting Employee Expectations: Victor Vroom's Expectancy Theory 443

Reinforcing Employee Performance: Reinforcement Theory 445

Treating Employees Fairly: Equity Theory 445

Putting Theory into Action 447

Motivating Through Job Enrichment 447
Motivating Through Open Communication 448
Applying Open Communication in Self-Managed Teams 450
Making Ethical Decisions: Motivating Temporary Employees 451
Job Recognition: Recognizing a Job Well Done 451
Spotlight on Small Business: Motivators for Small Business 453

Personalizing Motivation 454

Motivating Employees Around the Globe 454
Reaching Beyond Our Borders: Beyond Just Knowing Cross-Cultural Differences 455
Motivating Employees Across Generations 455
SUMMARY 460
KEY TERMS 462
CRITICAL THINKING 463
DEVELOPING WORKPLACE SKILLS 463
ANALYZING MANAGEMENT DECISIONS 463
VIDEO CASE II 464

CHAPTER 12
Human Resource Management: Finding and Keeping the Best Employees 466
PROFILE: Getting to Know Linda Hasenfratz, Chief Executive Officer of Linamar Corporation 466

Working with People Is Just the Beginning 468

Developing the Ultimate Resource 469
Human Resource Challenges 470

Determining Your Human Resources Needs 471

Recruiting Employees from a Diverse Population 472

Making Ethical Decisions: Recruiting Employees from Competitors 474
Spotlight on Small Business: Competing for the Cream of the Crop 475

Selecting Employees Who Will Be Productive 476

Adapting to Change: Keeping the Right Face on Social Media 478
Hiring Contingent Workers 479
Training and Developing Employees for Optimum Performance 481
Management Development 483
Networking 485
Diversity in Management Development 486

Appraising Employee Performance to Get Optimum Results 487

••
XVII
Contents

Compensating Employees: Attracting and Keeping the Best 489

Pay Systems 489
Compensating Teams 489
Fringe Benefits 491
Reaching Beyond Our Borders: Cultural Challenges Working Worldwide 494

Scheduling Employees to Meet Organizational and Employee Needs 495

Flextime Plans 495
Telecommuting 496
Job-Sharing Plans 498
Seeking Sustainability: How Employers Can Support Work-Life Balance 499

Career Management: Up, Over, and Out 500

Promoting and Reassigning Employees 500
Terminating Employees 500
Retiring Employees 501
Losing Valued Employees 501

Laws Affecting Human Resource Management 501

Pay Equity 502
Employment Equity 504
Laws that Protect the Disabled 505
Effects of Legislation 506
SUMMARY 507
KEY TERMS 509
CRITICAL THINKING 509
DEVELOPING WORKPLACE SKILLS 510
ANALYZING MANAGEMENT DECISIONS 510
VIDEO CASE 12 5//

CHAPTER 13
Dealing with Employee-Management Issues and Relations 512
PROFILE: Getting to Know Gerald {Gerry) Varricchio, Regional Organizing Director for
Central and Eastern Canada, Laborers' International Union of North America {LIUNA) 512

Employee-Management Issues 514

Labour Unions Yesterday and Today 515

The Early History of Organized Labour 517

The Structure of Labour Unions in Canada 518

Union Coverage 521

Canada's Largest Unions 522

Labour Legislation 522

Workplace Laws 524
Labour Relations Boards 524
Spotlight on Small Business: Helping Reduce Harassment and Violence in the Workplace 526

The Collective Bargaining Process 527

xviii
 Contents

Objectives of Organized Labour 527

Resolving Labour-Management Disputes 531
Conciliation, Mediation, and Arbitration 532

Negotiation Tactics 535

Union Tactics 535
Management Tactics 536
Making Ethical Decisions: Crossing the Line or Double-Crossing? 538
Legislation 538

The Future of Unions and Labour-Management Relations 540

Controversial Employee-Management Topics 541

Executive Compensation 542
Reaching Beyond Our Borders: U.S. College Athletes: What Are They Worth? 543
Seeking Sustainability: The Living Wage: Why Minimum Wage Is Not Enough 544
Child Care 545
Elder Care 546

You and Unions 547

SUMMARY 5117
KEY TERMS 5119
CRITICAL THINKING 5119
DEVELOPING WORKPLACE SKILLS 550
ANALYZING MANAGEMENT DECISIONS 550
VIDEO CASE 13 552
Running Case: Human Resources at Fox 110 International Inc. 553

PART 5
MARKETING: DEVELOPING AND IMPLEMENTING CUSTOMER-ORIENTED
MARKETING PLANS 556

CHAPTER 14
Marketing: Helping Buyers Buy 556
PROFILE: Getting to Know Sofia Colucci, Marketing Director-Quaker Foods and Snacks,
PepsiCo America 556

What Is Marketing? 558

Spotlight on Small Business: Making the Right Cut 560
The Evolution of Marketing 561
Non-Profit Organizations Prosper from Marketing 565

The Marketing Mix 565

Applying the Marketing Process 566
Designing a Product to Meet Customer Needs 568
Setting an Appropriate Price 569
Reaching Beyond Our Borders: Playing the Name Game 570
Getting the Product to the Right Place 570
Developing an Effective Promotional Strategy 571

xix
Contents

Providing Marketers with Information 571

The Marketing Research Process 572
Making Ethical Decisions: No Kidding 576
The Marketing Environment 576
Adapting to Change: Two Is Better Than One 578

Two Different Markets: Consumer and Business-to-Business 580

The Consumer Market 580
The Business-to-Business (B2B) Market 581

Defining Your Market 583

Market Segmentation: Segmenting the Consumer Market 583
Target Marketing and Reaching Smaller Market Segments 586
Positioning 587
Building Marketing Relationships 588

Consumer Behaviour 589

Seeking Sustainability: When Green Is Not Really Green 593

Your Prospects in Marketing 594

SUMMARY 5911
KEY TERMS 596
CRITICAL THINKING 597
DEVELOPING WORKPLACE SKILLS 597
ANALYZING MANAGEMENT DECISIONS 598
VIDEO CASE IIJ 599

CHAPTER 15
Managing the Marketing Mix: Product, Price, Place, and Promotion 602
PROFILE: Getting to Know Heather Reisman of Indigo Books & Music Inc. 602

Product Development and the Total Product Offer 604

Spotlight on Small Business: Mixing Social Media with Beer 605
Developing a Total Product Offer 606
Product Lines and the Product Mix 606
Product Differentiation 607
Packaging Changes the Product 608

Branding 609
Generating Brand Equity and Loyalty 610
Brand Management 611

The Product Life Cycle 612

Example of the Product Life Cycle 612
Using the Product Life Cycle 612

Competitive Pricing 614

Pricing Objectives 614
Break-Even Analysis 616
Pricing Strategies for New Products 617
Retailer Pricing Strategies 617

XX
 Contents

How Market Forces Affect Pricing 618

Non-Price Competition 619

The Importance of Channels of Distribution 619

How Intermediaries Create Exchange Efficiency 621

Retail Intermediaries 623

Retail Distribution Strategy 624
Non-Store Retailing 625
Adapting to Change: Turning a Negative to a Positive 626
Choosing the Right Distribution Mode 628

Promotion and the Promotion Mix 629

Advertising: Informing, Persuading, and Reminding 630
Reaching Beyond Our Borders: What's in Your Oreo? 632
Seeking Sustainability: Corporate Knights and Sustainability 633
Personal Selling: Providing Personal Attention 634
Public Relations: Building Relationships 636
Making Ethical Decisions: Is the Ad as Honest as the Product? 637
Sales Promotion: Giving Buyers Incentives 637
Direct Marketing 639

Word of Mouth and Other Promotional Tools 640

Slogging 641
Podcasting 642
Mobile Marketing 642

Managing the Promotion Mix: Putting It All Together 642

Push and Pull Strategies 642
SUMMARY 644
KEY TERMS 645
CRITICAL THINKING 646
DEVELOPING WORKPLACE SKILLS 646
ANALYZING MANAGEMENT DECISIONS 647
VIDEO CASE IS 647
Running Case: Marketing the Fox 40® Sonik Blast Whistle: Breaking the Sound Barrier! 649

PART 6
ACCOUNTING INFORMATION AND FINANCIAL ACTIVITIES 654
CHAPTER 16
Understanding Accounting and Financial Information 654
PROFILE: Getting to Know Deborah Watt of Lockheed Martin Canada Inc. 654

The Role of Accounting Information 656

What Is Accounting? 656

Accounting Disciplines 658

Managerial Accounting 658

•
XXI
Contents

Financial Accounting 659

Seeking Sustainability: Annual Accountability Report 660
Reaching Beyond Our Borders: Speaking a Universal Accounting Language 663
Auditing 663
Adapting to Change: Elementary, Mr. Auditor, Elementary 664
Tax Accounting 665
Governmental and Not-for-Profit Accounting 665
The Chartered Professional Accountant (CPA) Designation 666

The Accounting Cycle 668

Using Technology in Accounting 669

Understanding Key Financial Statements 670

The Fundamental Accounting Equation 671
The Balance Sheet 671
The Income Statement 676
Spotlight on Small Business: The Ins and Outs of Valuing Inventory 679
The Statement of Cash Flows 681
Making Ethical Decisions: Would You Cook the Books? 684

Analyzing Financial Performance Using Ratios 684

Liquidity Ratios 685
Leverage (Debt) Ratios 686
Profitability (Performance) Ratios 686
Activity Ratios 688

SUMMARY 689
KEY TERMS 691
CRITICAL THINKING 691
DEVELOPING WORKPLACE SKILLS 691
ANALYZING MANAGEMENT DECISIONS 692
VIDEO CASE 16 693

CHAPTER 17
Financial Management 696
PROFILE: Getting to Know Sabrina Simmons, Executive Vice President and Chief Financial Officer of Gap Inc. 696

The Role of Finance and Financial Managers 698

The Value of Understanding Finance 699
What Is Financial Management? 700

Financial Planning 701

Forecasting Short-Term and Long-Term Financial Needs 701
Working with the Budget Process 702
Establ ishing Financial Controls 706
Making Ethical Decisions: Sail Smoothly or Rock the Boat? 706

The Need for Operating Funds 707

Managing Day-to-Day Needs of a Business 707
Controlling Credit Operations 708

xxii
Contents

The Risk of Damaging the Environment 744

KEY TERMS lllll

CHAPTER 18
Money, the Bank of Canada, and the Canadian Financial System 746
PROFILE: Getting to Know Anish Chopra, Managing Director of TD Asset Management Inc. 746

Why Money Is Important 748

What Is Money? 748
Adapting to Change: The Bitcoin Is in the Mail 750

The Bank of Canada 751

The Global Exchange of Money 751
What Is the Money Supply? 752
Managing Inflation and the Money Supply 752
Control of the Money Supply 753
Transmission of Monetary Policy 754

The Canadian Financial System 755

Regulating the Financial System 755

The Canadian Financial System: Financial Institutions 757

Commercial Banks 758
Making Ethical Decisions: Would You Tell the Teller? 760
Credit Unions and Trust Companies 760
Other Financial Institutions (Non-Banks) 762
Using Technology to Improve Efficiency 762
Spotlight on Small Business: Taking a Bite Out of the Sharks 763

The Canadian Financial System: Financial Markets 765

The Function of Stock Exchanges 766
Securities Regulations 767

How Investors Buy Securities 768

Investing Through Online Brokers 769
Choosing the Right Investment Strategy and Diversification 769
Reaching Beyond Our Borders: Global Stocks: Love Them or Leave Them 770

Investing in Stocks 771

Stock Splits 773
Stock Indexes 773
Buying on Margin 774
Understanding Stock Quotations 774

Investing in Bonds 775

Investing in Mutual Funds 775

Seeking Sustainability: Socially Responsible Investing (SRI) 776

Investing in Exchange-Traded Funds 777

The Canadian Financial System: Clearing and Settlement Systems 778

xxiv
 Contents

Acquiring Needed Inventory 709

Making Capital Expenditures 709
Alternative Sources of Funds 709

Obtaining Short-Term Financing 710

Trade Credit 711
Family and Friends 712
Spotlight on Small Business: Threading the Financial Needle 712
Commercial Banks 713
Forms of Short-Term Loans 714
Factoring Accounts Receivable 716
Commercial Paper 717
Credit Cards 717

Obtaining Long-Term Financing 718

Debt Financing 718
Reaching Beyond Our Borders: Sovereign Wealth Funds (SWFs) 719
Equity Financing 723
Comparing Debt and Equity Financing 728
Your Prospects in Finance 730

SUMMARY 731
KEY TERMS 732
CRITICAL THINKING 732
DEVELOPING WORKPLACE SKILLS 733
ANALYZING MANAGEMENT DECISIONS 733
VIDEO CASE 17 734

APPENDIX C
Managing Risk 736

Understanding Business Risks 736

How Rapid Change Affects Risk Management 737

Managing Risk 737

Reducing Risk 737
Avoiding Risk 738
Self-Insurance Against the Risk 738
Buying Insurance to Cover the Risk 738

What Risks Are Uninsurable? 739

What Risks Are Insurable? 739
Understanding Insurance Policies 740
Rule of Indemnity 740
Types of Insurance Companies 741

Insurance Coverage for Various Kinds of Risk 741

Property and Liabil ity Insurance 741
Health Insurance 743
Life Insurance 744

xxiii
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 CHAPTER II
CARMEL LEE had been told by everybody, ever since she could
remember being told anything, that she was headstrong and
impulsive. Her parents had impressed it upon her and, rather
proudly, had disseminated the fact among the neighbors until it
became a tradition in the little Michigan town where she was born.
People held the idea that one must make allowances for Carmel and
be perpetually ready to look with tolerance on outbursts of impulse.
Her teachers had accepted the tradition and were accustomed to
advise with her upon the point. The reputation accompanied her to
the university, and only a few weeks before, upon her graduation, the
head of the Department of Rhetoric (which included a course in
journalism) spent an entire valuable hour beseeching her to curb her
willfulness and to count as high as fifty before she reached a
decision.
So Carmel, after being the victim of such propaganda for sixteen or
seventeen years, could not be censured if she believed it herself.
She had gotten to be rather afraid of Carmel and of what Carmel
might do unexpectedly. Circumspection and repression had become
her watchwords, and the present business of her life was to look
before she leaped. She had made a vow of deliberation. As soon as
she found herself wanting to do something she became suspicious
of it; and latterly, with grim determination, she had taken herself in
hand. Whenever she became aware of a desire to act, she
compelled herself to sit down and think it over. Not that this did a
great deal of good, but it gave her a very pleasing sensation of self-
mastery. As a matter of fact, she was not at all introspective. She
had taken the word of bystanders for her impulsiveness; it was no
discovery of her own. And now that she was schooling herself in
repression, she did not perceive in the least that she failed to
repress. When she wanted to do a thing, she usually did it. The
deliberation only postponed the event. When she forced herself to
pause and scrutinize a desire, she merely paused and scrutinized it
—and then went ahead and did what she desired.
It may be considered peculiar that a girl who had inherited a
newspaper, as Carmel had done, should have paid so cursory a first
visit. It would have been natural to rush into the shop with
enthusiasm and to poke into corners and to ransack the place from
end to end, and to discover exactly what it was she had become
owner of. However, Carmel merely dropped in and hurried away....
This was repression. It was a distinct victory over impulse. She
wanted to do it very much, so she compelled herself to turn her back
and to go staidly to lunch at the hotel.
She ate very little and was totally unaware of the sensation she
created in the dining room, especially over at the square table which
was regarded as the property of visiting commercial travelers. It was
her belief that she gave off an impression of dignity such as befitted
an editor, and that a stern, businesslike air sat upon her so that none
could mistake the fact that she was a woman of affairs. Truthfulness
compels it to be recorded that she did not give this impression at all,
but quite another one. She looked a lovely schoolgirl about to go
canoeing with a box of bonbons on her lap. The commercial
travelers who were so unfortunate as to be seated with their back
toward her acquired cricks in their necks.
After dinner (in a day or two she would learn not to refer to it as
luncheon) she compelled herself to go up to her room and to remain
there for a full fifteen minutes. After this exercise, so beneficial to her
will, she descended and walked very slowly to the office of the Free
Press. Having thus given free rein to her bent for repression, she
became herself and pounced. She pounced upon the office; she
pounced upon the shop. She made friends with the cylinder press
much as an ordinary individual would make friends with a nice dog,
and she talked to the little job press as to a kitten and became
greatly excited over the great blade of the paper cutter, and wanted
Tubal to give her an instant lesson in the art of sticking type. For two
hours she played with things. Then, of a sudden, it occurred to her to
wonder if a living could be made out of the outfit.
It was essential that the paper should provide her with a living, and
that it should go about the business of doing so almost instantly. At
the moment when Carmel first set foot in Gibeon she was alone in
the world. Old Man Nupley had been her last remaining relative. And
—what was even more productive of unease of mind—she was the
owner of exactly seventy-two dollars and sixteen cents!
Therefore she pounced upon the records of the concern and very
quickly discovered that Old Man Nupley had left her no placer mine
out of which she could wash a pan of gold before breakfast. She
had, she found, become the owner of the right to pay off a number of
pressing debts. The plant was mortgaged. It owed for paper; there
were installments due on the job press; there were bills for this, that,
and the other thing which amounted to a staggering total....
She was not daunted, however, until she examined the credit side of
the affair. The year had brought the Free Press a grand total of five
hundred and sixty-one paid subscriptions; the advertising, at the
absurd rate of fifteen cents an inch, had been what politicians call
scattering; and the job work had hardly paid for the trouble of
keeping the dust off the press. The paper was dead on its feet, as so
many rural weeklies are. She could not help thinking that her uncle
Nupley had died in the nick of time to avoid bankruptcy.
It is worth recording that Carmel did not weep a tear of
disappointment, nor feel an impulse to walk out of the place and go
the thousand miles back to Michigan to take the job of teaching
English in the home high school. No. The only emotion Carmel felt
was anger. Her eyes actually glinted, and a red spot made its
appearance upon each cheek. She had arrived in Gibeon with a
glowing illusion packed in her trunk; unkind fact had snatched it
away and replaced it with clammy reality.
She got up from her desk and walked into the shop, where Tubal
was pretending to be busy.
“Gibeon is the county seat, isn’t it?” she asked.
“Yes ’m.”
“How many people live here?”
“We claim two thousand. Ol’ Man Nupley allowed the’ was four
thousand in the township.”
“Then” (her manner put Tubal in the wrong at once and compelled
him to fumble about for a defense) “why have we only a little more
than five hundred subscribers?”
“Wa-al, one thing or another, seems as though. Folks never took to
this paper much.... Mostly they take in the Standard from over to
Litchfield.”
“Why?”
Tubal shifted the blame to Gibeon. “Seems like this hain’t much of a
town.... It’s a dum funny town. I guess folks didn’t set much store by
this paper on account of Abner Fownes.”
“Abner Fownes? Who is he, and what has he to do with it?”
“Abner,” said Tubal, “comes clost to bein’ a one-man band. Uh huh!...
Owns the saw mills, owns half of Main Street, owns the Congo
church and the circuit judge and the selectmen, and kind of claims to
own all the folks that lives here.... Ol’ Man Nupley was a kind of
errand boy of his’n.”
Carmel’s intuition carried her to the point. “And the people didn’t take
this paper because they didn’t trust it. That was it, wasn’t it—
because this Abner Fownes—owned Uncle Nupley.”
“I calc’late,” said Tubal, “you’re twittin’ on facts....” He chuckled. “Las’
fall the folks kind of riz ag’in’ Abner and dum nigh trompled on him at
election time. Yes, sir. Made a fight fer it, but they didn’t elect nobody
but one sheriff. Good man, too.... But Abner was too slick for ’em
and he run off with all the other offices.... He holds a chattel
mortgage onto this plant.”
“Is he a bad man?”
“Wa-al I dunno’s a feller could call him bad. Jest pig-headed, like,
and got the idee nobody knows nothin’ but him. My notion is he gits
bamboozled a lot. The Court House crowd tickles his ribs and makes
him work for ’em. No, he hain’t bad. Deacon, and all that.”
“The local politicians flatter him and make use of the power his
money gives him, is that it?”
“You hit the nail plumb on the head.”
“Who is the real boss?”
“Wa-al now, that’s kind of hard to say. Kind of a ring. Half a dozen of
’em. Calc’late Supervisor Delorme is close to bein’ the queen bee.”
She could visualize Abner Fownes, smug, fatuous, in a place of
power which he did not know how to use, a figurehead and cat’s-paw
for abler and wickeder men.... It must be confessed that her interest
in him was not civic, but personal. He was, at that moment, of no
importance to her except as the man who held a chattel mortgage on
her plant and whose influence over her uncle had withered the
possible prosperity of the paper.
She was saying to herself: “I’ve got to find a way. I’ve got to make a
success of this. I can’t go back home and admit I couldn’t do it....
Everybody said I couldn’t run a paper. But I can. I can.”
The field was there, a prosperous town with a cultivated countryside
to the south and rich forest lands to north and west. There was a
sufficient population to support well a weekly paper; there was all of
Main Street, two dozen merchants large and small, whose
advertising patronage should flow in to the Free Press.
“What it needs,” she told herself, “is somebody to get behind and
push.”
As a matter of fact she was convinced the failure of the paper was
not due to Abner Fownes, nor to politics or outside influences, but to
the lack of initiative and ability of her uncle. So much of the town as
she had seen was rather pleasing; it had no appearance of resting
over subterranean caverns of evil, nor had the men and women she
saw on the streets the appearance of being ground down by one
man’s wealth, or of smarting under the rule of an evil political ring.
On the contrary, it seemed an ordinary town, full of ordinary people,
who lived ordinary lives in reasonable happiness. She discounted
Tubal’s disclosures and jumped to a conclusion. No, she told herself,
if she proved adequate, there was no reason why she could not
succeed where Uncle Nupley failed.
The telephone interrupted her reflections and she lifted the receiver.
“Is this the Free Press?” asked a voice.
“Yes.”
“Wait a moment, please.”
After some delay another voice, a large, important voice, repeated
the question, and Carmel admitted a second time the identity of the
paper.
“This,” said the voice, evidently impressed by the revelation it was
making, “is Abner Fownes.”
“Yes,” said Carmel.
“Are you the young woman—Nupley’s niece?”
“I am.”
“Will you step over to my office at once, then. I want to see you?”
Carmel’s eyes twinkled and her brows lifted. “Abner Fownes,” she
said. “The name has a masculine sound. Your voice is—distinctly
masculine?”
“Eh?... What of it?”
“Why,” said Carmel, “the little book I studied in school says that when
a gentleman wishes to see a lady he goes to her. I fear I should be
thought forward if I called on you.”
“Not at all.... Not at all,” said the voice, and Carmel knew she had to
deal with a man in whom resided no laughter.
“I shall be glad to see you whenever you find it convenient to call,”
she said—and hung up the receiver.
As she turned about she saw a young man standing outside the
railing, a medium-sized young man who wore his shoulders slightly
rounded and spectacles of the largest and most glittering variety.
The collar of his coat asked loudly to be brushed and his tie had the
appearance of having been tied with one hand in a dark bedroom.
He removed his hat and displayed a head of extraordinarily fine
formation. It was difficult to tell if he were handsome, because the
rims of his spectacles masked so much of his face and because his
expression was one of gloomy wrath. Carmel was tempted to laugh
at the expression because it did not fit; it gave the impression of
being a left-over expression, purchased at a reduction, and a trifle
large for its wearer.
“May I ask,” he said, in a voice exactly suited to his stilted diction, “if
you are in charge of this—er—publication?”
“I am,” said Carmel.
“I wish,” said the young man, “to address a communication to the
citizens of this village through the—er—medium of your columns.”
So this, thought Carmel, was the sort of person who wrote letters to
newspapers. She had often wondered what the species looked like.
“On what subject?” she asked.
“Myself,” said he.
“It should be an interesting letter,” Carmel said, mischievously.
The young man lowered his head a trifle and peered at her over the
rims of his glasses. He pursed his mouth and wrinkled one cheek,
studying her as a naturalist might scrutinize some interesting, but not
altogether comprehensible, bug. Evidently he could not make up his
mind as to her classification.
“I fancy it will be found so,” he said.
“May I ask your name?”
He fumbled in an inner pocket and continued to fumble until it
became an exploration. He produced numerous articles and laid
them methodically upon the railing—a fountain pen, dripping slightly,
half a dozen letters, a large harmonica, a pocket edition of Plato’s
Republic, a notebook, several pencils, and a single glove. He stared
at the glove with recognition and nodded to it meaningly, as much as
to say: “Ah, there you are again.... Hiding as usual.” At last he
extracted a leather wallet and from the wallet produced a card which
he extended toward Carmel.
Before she read it she had a feeling there would be numerous letters
upon it, and she was not disappointed. It said:
Evan Bartholomew Pell, A.B., Ph.D., LL.D., A.M.
“Ah!” said Carmel.
“Yes,” said the young man with some complacency.
“And your letter.”
“I am,” he said, “or, more correctly, I was, superintendent of schools
in this village. There are, as you know, three schools only one of
which gives instruction in the so-called high-school branches.”
“Indeed,” said Carmel.
“I have been removed,” he said, and stared at her with lips
compressed. When she failed to live up to his expectations in her
manifestations of consternation, he repeated his statement. “I have
been removed,” he said, more emphatically.
“Removed,” said Carmel.
“Removed. Unjustly and unwarrantably removed. Autocratically and
tyrannically removed. I am a victim of nepotism. I have, I fancy,
proven adequate; indeed, I may say it is rare to find a man of my
attainments in so insignificant a position.... But I have been cast out
upon the streets arbitrarily, that a corrupt and self-seeking group of
professional politicians may curry favor with a man more corrupt than
themselves. In short and in colloquial terms, I have been kicked out
to provide a place for Supervisor Delorme’s cousin.”
Carmel nodded. “And you wish to protest.”
“I desire to lay before the public my ideas of the obligation of the
public toward its children in the matter of education. I desire to
protest against glaring injustice. I desire to accuse a group of men
willing to prostitute the schools to the level of political spoils. I wish to
protest at being set adrift penniless.”
His expression as he uttered the word “penniless” was one of
helpless bewilderment which touched Carmel’s sympathy.
“Penniless?” she said.
“I am no spendthrift,” he said, severely. “I may say that I am
exceedingly economical. But I have invested my savings, and—er—
returns have failed to materialize from the investment.”
“What investment?”
The young man eyed her a moment as if he felt her to be intruding
unwarrantably in his private concerns, but presently determined to
reply.
“A certain gold mine, whose location I cannot remember at the
moment. It was described as of fabulous wealth, and I was assured
the return from my investment of five hundred dollars would lift me
above the sordid necessity of working for wages.... I regret to say
that hitherto there has been no material assurance of the truth of the
statements made to me.”
“Poor lamb!” said Carmel under her breath.
“I beg your pardon?”
Carmel shook her head. “So you are—out of a job—and broke?” she
said.
“Broke,” he said, lugubriously, “is an exceedingly expressive term.”
“And what shall you do?”
He looked about him, at his feet, through the door into the shop,
under the desk, at the picture on the wall in a helpless, bewildered
way as if he thought his future course of action might be hiding some
place in the neighborhood.
“I haven’t the slightest idea,” he said.
Carmel considered. Inexperienced as she was, new to the intrigues
of Gibeon, she was able to perceive how the professor’s letter was
loaded with dynamite—not for him, but for the paper which published
it. Notwithstanding, it was her impulse to print it. Indeed, her mind
was firmly made up to print it. Therefore she assumed an attitude of
deliberation, as she had schooled herself to do.
“If you give me the letter,” she said, “I will read it and consider the
wisdom of making it public.”
“I shall be obliged to you,” he said, and turned toward the door.
Midway he paused. “If,” he said, “you chance to hear of a position—
as teacher or otherwise—to which I may be adapted, I shall be glad
to have you communicate with me.”
He moved again toward the door, opened it, paused again, and
turned full to face Carmel. Then he made a statement sharply
detached from the context, and astonishing not so much for the fact
it stated as because of the man who stated it, his possible reasons
for making the statement, and the abruptness of the change of
subject matter.
“Sheriff Churchill has disappeared,” he said. Having made the
statement, he shut the door after him and walked rapidly up the
street.
 CHAPTER III
CARMEL more than half expected Abner Fownes to appear in the
office, but he did not appear. Indeed, it was some days before she
caught so much as a casual glimpse of him on the street. But she
was gathering information about him and about the town of Gibeon
and the county of which it was the center. Being young, with
enthusiasm and ideals, and a belief in the general virtue of the
human race, she was not pleased.
She set about it to study Gibeon as she would have studied some
new language, commencing with elementals, learning a few nouns
and verbs and the local rules of the grammar of life. She felt she
must know Gibeon as she knew the palm of her hand, if she were to
coax the Free Press out of the slough into which it had slipped.
But it was not easy to know Gibeon, for Gibeon did not know itself.
Like so many of our American villages, it was not introspective—
even at election time. The tariff and the wool schedule and Wall
Street received from it more attention than did keeping its own
doorstep clean. It was used to its condition, and viewed it as normal.
There were moments of excited interest and hot-blooded talk.
Always there was an undercurrent of rumor; but it seemed to Carmel
the town felt a certain pride in the iniquity of its politics. A frightful
inertia resides in the mass of mankind, and because of this inertia
tsars and princes and nobilities and Tammany Societies and bosses
and lobbies and pork barrels and the supreme tyranny of war have
existed since men first invented organization.... Sometimes it seems
the world’s supply of energy is cornered by the ill-disposed. Rotten
governments and administrations are tolerated by the people
because they save the people the trouble of establishing and
conducting something better.
In a few days Carmel perceived a great deal that was going on in
Gibeon, and understood a little of it, and, seeing and understanding
as she did, an ambition was born in her, the ambition to wake up
Gibeon. This ambition she expressed to Tubal, who listened and
waggled his head.
“One time,” he said, “I worked fer a reform newspaper—till it went
into bankruptcy.”
“But look—”
“I been lookin’ a sight longer ’n’ you have, Lady.” At first he had
called her Lady as a dignified and polite form of greeting. After that it
became a sort of title of affection, which spread from Tubal to
Gibeon. “I been lookin’ and seein’, and what I see is that they’s jest
one thing folks is real int’rested in, and that’s earnin’ a livin’.”
“I don’t believe it, Tubal. I believe people want to do right. I believe
everybody would rather do right and be good—if some one would
just show them how.”
“Mebby, but you better let somebody else take the pointer and go to
the blackboard. You got to eat three times a day, Lady, and this here
paper’s got to step up and feed you. Look at it reasonable. What
d’ye git by stirrin’ things up? Why, half a dozen real good folks claps
their hands, but they don’t give up a cent. What d’ye git if you keep
your hands off and let things slide? You git the county printin’, and
consid’able advertisin’ and job work that Abner Fownes kin throw to
you. You git allowed to eat. And there you be.... Take that letter of
the perfessor’s, fer instance——”
“I’m going to print that letter if—if I starve.”
“Which is what the perfessor’s doin’ right now.... And where’s Sheriff
Churchill? Eh? Tell me that.”
“Tubal, what is this about the sheriff? Has he really disappeared?”
“If you don’t b’lieve it, go ask his wife. The Court House crowd lets
on he’s run off with a woman or mebby stole some county funds.
They would.... But what woman? The’ wa’n’t no woman. And
Churchill wa’n’t the stealin’ kind.”
“What do you think, Tubal?”
“Lady, I don’t even dast to think.”
“What will be done?”
“Nothin’.”
“You mean the sheriff of a county can disappear—and nothing be
done about it?”
“He kin in Gibeon. Oh, you keep your eye peeled. Delorme and
Fownes’ll smooth it over somehow, and the folks kind of likes it.
Gives ’em suthin’ to talk about. Sure. When the’ hain’t no other topic
they’ll fetch up the sheriff and argue about what become of him. But
nobody’ll ever know—for sure.”
“I’m going to see Mrs. Churchill,” said Carmel, with sudden
determination. “It’s news. It’s the biggest news we’ll have for a long
time.”
“H’m!... I dunno. Deputy Jenney and Peewee Bangs they dropped in
here a few days back and give me a tip to lay off the sheriff. Anyhow,
everybody knows he’s gone.”
Carmel made no reply. She reached for her hat, put it on at the
desirable angle, and went out of the door. Tubal stared after her a
moment, fired an accurate salvo at a nail head in the floor, and
walked back into the shop with the air of a man proceeding to face a
firing squad.
Carmel walked rapidly up Main Street past the Busy Big Store and
Smith Brothers’ grocery and Miss Gammidge’s millinery shop,
rounding the corner on which was Field & Hopper’s bank. She cut
diagonally across the Square, past the town pump, and proceeded to
the little house next the Rink. The Rink had been erected some
twenty-five years before during the roller-skating epidemic, but was
now utilized as a manufactory of stepladders and plant stands and
kitchen chairs combined in one article. This handy device was the
invention of Pazzy Hendee, whose avocation was inventing, but
whose occupation was constructing models of full-rigged ships. It
was in the little house, square, with a mansard roof, that Sheriff
Churchill’s family resided. Carmel rang the bell.
“Come in,” called a woman’s voice.
Carmel hesitated, not knowing this was Gibeon’s hospitable custom
—that one had but to rap on a door to be invited to enter.
“Come in,” said the voice after a pause, and Carmel obeyed.
“Right in the parlor,” the voice directed.
Carmel turned through the folding doors to the right, and there, on
the haircloth sofa, sat a stout, motherly woman in state. She wore
her black silk with the air common to Gibeon when it wears its black
silk. It was evident Mrs. Churchill had laid aside her household
concerns in deference to the event, and, according to precedent,
awaited the visits of condolence and curiosity of which it was the
duty, as well as the pleasure, of her neighbors to pay.
“Find a chair and set,” said Mrs. Churchill, scrutinizing Carmel.
“You’re the young woman that Nupley left the paper to, hain’t you?”
“Yes,” said Carmel, “and I’ve come to ask about your husband—if the
subject isn’t too painful.”
“Painful! Laws! ’Twouldn’t matter how painful ’twas. Folks is entitled
to know, hain’t they? Him bein’ a public character. Was you thinkin’ of
havin’ a piece in the paper?”
“If you will permit,” said Carmel.
In spite of the attitude of state, in spite of something very like pride in
being a center of interest and a dispenser of news, Carmel liked Mrs.
Churchill. Her face was the face of a woman who had been a faithful
helpmeet to her husband; of a woman who would be summoned by
neighbors in illness or distress. Motherliness, greatness of heart,
were written on those large features; and a fine kindliness, clouded
by present sorrow, shone in her wise eyes. Carmel had encountered
women of like mold. No village in America but is the better, more
livable, for the presence and ready helpfulness of this splendid
sisterhood.
“Please tell me about it,” said Carmel.
“It was like this,” said Mrs. Churchill, taking on the air of a narrator of
important events. “The sheriff and me was sittin’ on the porch, talkin’
as pleasant as could be and nothin’ to give a body warnin’. We was
kind of arguin’ like about my oldest’s shoes and the way he runs
through a pair in less’n a month. The sheriff he was holdin’ it was
right and proper boys should wear out shoes, and I was sayin’ it was
a sin and a shame sich poor leather was got off on the public. Well,
just there the sheriff he got up and says he was goin’ to pump
himself a cold drink, and he went into the house, and I could hear the
pump squeakin’, but no thought of anythin’. He didn’t come back,
and he didn’t come back, so I got up, thinkin’ to myself, what in
tunket’s he up to now and kind of wonderin’ if mebby he’d fell in a fit
or suthin’.” Carmel took note that Mrs. Churchill talked without the air
of punctuation marks. “I went out to the back door and looked, and
the’ wa’n’t hide or hair of him in sight. I hollered, but he didn’t
answer....” Mrs. Churchill closed her eyes and two great tears oozed
between the tightly shut lids and poised on the uplands of her
chubby cheeks. “And that’s all I know,” she said in a dull voice. “He
hain’t never come back.”
“Have you any idea why he disappeared?”
“I got my idees. My husband was a man sot in his ways—not but
what I could manage him when he needed managin’, and a better or
more generous provider never drew the breath of life. But he
calc’lated to do his duty. I guess he done it too well!”
“What do you mean, Mrs. Churchill?”
“The sheriff was an honest man. When the folks elected him they
chose him because he was honest and nobody couldn’t move him
out of a path he set his foot to travel. He was close mouthed, too, but
I seen for weeks past he had suthin’ on his mind that he wouldn’t
come out with. He says to me once, ‘If folks knew what they was
livin’ right next door to!’ He didn’t say no more, but that was a lot for
him....” Suddenly her eyes glinted and her lips compressed. “My
husband was done away with,” she said, “because he was a good
man and a smart man, and I’m prayin’ to God to send down
vengeance on them that done it.”
She paused a moment and her face took on the grimness of
righteous anger. “It’s reported to me they’re settin’ afoot rumors that
he run off with some baggage—him that couldn’t bear me out of
sight these dozen year; him that couldn’t git up in the mornin’ nor go
to bed at night without me there to help him! They lie! I know my man
and I trust him. He didn’t need no woman but me, and I didn’t need
no man but him.... Some says he stole county money. They lie, too,
and best for them they don’t make no sich sayin’s in my hearin’....”
“What do you think is at bottom of it all?”
Mrs. Churchill shook her head. “Some day it’ll all come out,” she
said, and her word was an assertion of her faith in the goodness of
God. There was a pause, and then woman’s heart cried out to
woman’s heart for sympathy.
“I try to bear up and to endure it like he’d want me to. But it’s lonely,
awful lonely.... Lookin’ ahead at the years to come—without him by
me.... Come nighttime and it seems like I can’t bear it.”
“But—but he’ll come back,” said Carmel.
“Back! Child, there hain’t no back from where my husband’s gone.”
Somehow this seemed to Carmel a statement of authority. It
established the fact. Sheriff Churchill would never return, and his
wife knew it. Something had informed her past doubting. It gave
Carmel a strange, uncanny sensation, and she sat silent, chilled.
Then an emotion moved in her, swelled, and lifted itself into her
throat. It was something more than mere anger, it was righteous
wrath.
“Mrs. Churchill,” she said, “if this is true—the thing you believe—then
there are men in Gibeon who are not fit to walk the earth. There is a
thing here which must be crushed—unearthed and crushed.”
“If it is God’s will.”
“It must be God’s will. And if I can help—if I can do one single small
thing to help——”
“Mebby,” said Mrs. Churchill, solemnly, “He has marked you out and
set you apart as His instrument.”
“I want to think. I want to consider.” Carmel got to her feet. “I—— Oh,
this is a wicked, cruel, cruel thing!...”
She omitted, in her emotion, any word of parting, and walked from
the house, eyes shining, lips compressed grimly. In her ears a
phrase repeated itself again and again—“Mebby He has set you
apart as His instrument....”
On the Square she met Prof. Evan Bartholomew Pell, who first
peered at her through his great beetle glasses and then confronted
her.
“May I ask,” he said, brusquely, “what decision you have reached
concerning my letter?”
“I am going to print it,” she said.
He was about to pass on without amenities of any sort whatsoever,
but she arrested him.
“What are your plans?” she asked.
“I have none,” he said, tartly.
“No plans and no money?”
“That is a matter,” he said, “which it does not seem to me is of
interest to anyone but myself.”
She smiled, perceiving now he spoke out of a boyish shame and
pride, and perceiving also in his eyes an expression of worry and
bewilderment which demanded her sympathy.
“No schools are open at this time of year,” she said.
“None. I do not think I shall teach again.”
“Why?”
“I don’t like school trustees,” he said, simply, and one understood
how he regarded the genus school trustee as a separate
classification of humanity, having few qualities in common with the
general human race. “I—I shall work,” he said.
“At what? What, besides teaching, are you fitted to do?”
“I—I can dig,” he said, looking at her hopefully. “Anybody can dig.
Men who dig eat—and have a place to sleep. What more is there?”
“A great deal more.... Have you no place to eat or sleep?” she said,
suddenly.
“My landlady has set my trunk on the porch, and as for food, I
breakfasted on berries.... They are not filling,” he added.
Carmel considered. In her few short days of ownership she had
discovered the magnitude of the task of rehabilitating the Free Press.
She had seen how she must be business manager, advertising
solicitor, and editor, and that any of the three positions could well
demand all of her time. It would be useless to edit a paper, she
comprehended, if there was no business to support it. Contrariwise,
it would be impossible to get business for a paper as futile as the
Free Press was at that moment in its history.
“How,” she said, “would you like to be an editor—a kind of an
editor?”
“I’d like it,” he said. “Then I could say to the public the things I’d like
to say to the public. You can’t educate them. They don’t care. They
are sunk in a slough of inertia with a rock of ignorance around their
necks. I would like to tell them how thick-headed they are. It would
be a satisfaction.”
“I’m afraid,” said Carmel, “you wouldn’t do for an editor.”
“Why not, I should like to know?”
“Because,” said Carmel, “you don’t know very much.”
She could see him swell with offended dignity. “Good morning,” he
said, and turned away without lifting his hat.
“And you have very bad manners,” she added.
“Eh?... What’s that?”
“Yes. And I imagine you are awfully selfish and self-centered. You
don’t think about anybody but yourself, do you? You—you imagine
the universe has its center in Prof. Evan Bartholomew Pell, and you
look down on everybody who hasn’t a lot of degrees to string after
his name. You don’t like people.” She paused and snapped a
question at him. “How much did they pay you for being
superintendent of schools?”
“Fifteen hundred dollars a year,” he said, the answer being surprised
out of him.
“Doesn’t that take down your conceit?”
“Conceit!... Conceit!...”
“Yes—a good carpenter earns more than that. The world can’t set
such a high value on you if it pays a mechanic more than it does
you.”
“I told you,” he said, impatiently, “that the world is silly and ignorant.”
“It is you who are silly and ignorant.”
“You—you have no right to talk to me like this. You—you are forward
and—and impertinent. I never met such a young woman.”
“It’s for the good of your soul,” she said, “and because—because I
think I’m going to hire you to write editorials and help gather news.
Before you start in, you’ve got to revise your notions of the world—
and of yourself. If you don’t like people, people won’t like you.”
Evidently he had been giving scant attention to her and plenary
consideration to himself. “How much will you pay me?” he asked.
“There you are!... I don’t know. Whatever I pay you will be more than
you are worth.”
He was thinking about himself again, and thinking aloud.
“I fancy I should like to be an editor,” he said. “The profession is not
without dignity and scholarly qualities——”
“Scholarly fiddlesticks!”
Again he paid her no compliment of attention. “Why shouldn’t one be
selfish? What does it matter? What does anything matter? Here we
are in this world, rabbits caught in a trap. We can’t escape. We’re
here, and the only way to get out of the trap is to die. We’re here with
the trap fastened to our foot, waiting to be killed. That’s all. So what
does anything matter except to get through it somehow. Nobody can
do anything. The greatest man who ever lived hasn’t done a thing
but live and die. Selfish? Of course I’m selfish. Nothing interests me
but me. I want to stay in the trap with as little pain and trouble as I
can manage.... Everything and everybody is futile.... Now you can let
me be an editor or you can go along about your business and leave
me alone.”
“You have a sweet philosophy,” she said, cuttingly. “If that is all your
education has given you, the most ignorant scavenger on the city
streets is wiser and better and more valuable to the world than you.
I’m ashamed of you.”
“Scavenger!...” His eyes snapped behind his beetle glasses and he
frowned upon her terribly. “Now I’m going to be an editor—the silly
kind of an editor silly people like. Just to show you I can do it better
than they can. I’ll write better pieces about Farmer Tubbs painting his
barn red, and better editorials about the potato crop. I’m a better
man than any of them, with a better brain and a better education—
and I’ll use my superiority to be a better ass than any of them.”
“Do you know,” she said, “you’ll never amount to a row of pins until
you really find a desire to be of use to the world? If you try to help
the world, sincerely and honestly, the world finds it out and helps you
—and loves you.... Don’t you want people to like you?”
“No.”
“Well, when you can come to me and tell me you do want people to
like you, I’ll have some hopes of you.... Report at the office at one
o’clock. You’re hired.”
She walked away from him rapidly, and he stood peering after her
with a lost, bewildered air. “What an extraordinary young woman!” he
said to himself. Carmel seated herself at her desk to think. Her eyes
glanced downward at the fresh blotter she had put in place the day
before, and there they paused, for upon its surface lay a grimy piece
of paper upon which was printed with a lead pencil:
Don’t meddle with Sheriff Churchill or he’ll have company.