p. 5 | Confidence

Review and Herald Publishing Association · Washington, D. C. · Feb 8, 1906

Confidence

BACK of legal provisions and formal declarations concerning the administration of a trust there must be confidence in those who carry the responsibilities in any enterprise, or there will always be uncertainty as to results. Selfishness and ambition are not easily controlled by statute. The perversion of a trust into a means of self-exaltation is a difficult thing to prevent or to punish by law.

A writer in one of the current magazines has set forth clearly the relation between confidence and success in business ventures. He says:—

The principal factor in corporation success is the confidence of that part of the public known as investors and capitalists, and confidence stands for credit, prestige, good-will. The chief cause of failure is the lack of this confidence. With confidence the securities of a given project will enjoy the high regard of investors and capitalists though they pay but four per cent, whereas other securities based on the same project, lacking that confidence, will be spurned though returning twelve per cent. . . . Let me illustrate: A certain man in a village who has won the reputation of having a word as good as his bond, offers for sale ninety shares in a grist-mill project at one hundred dollars a share, nine thousand dollars in all. His friends know the property is earning eighteen per cent on the three thousand dollars it cost him, but he proposes to rebuild the mill with the additional six thousand dollars, and frankly tells them that they must temporarily be content with six per cent on their investment. They are glad to come in because they know the amount they contribute will be honestly expended on the property, and because their money will be secure. On the other hand, a man in the same village, offering a similar project but lacking his rival's reputation, finds it difficult to persuade his neighbors to buy ninety shares at thirty-three dollars a share, even though he offers an iron-bound guarantee that he will each year return dividends of eighteen per cent. The prospect of a six-per-cent return with safety looks better to an investor than eighteen-per-cent interest on a 'perhaps.'

The same principle applies in the conduct of a public institution. When its supporters lose confidence in the management, it is of little use to appeal to the legal provisions for their protection as evidence of good faith. There are some people who prefer to spend their money and energies in directions where they will not be constantly invited or driven to the courts to secure the rights which a wise management would grant unasked. In these days of betrayal of trust on every hand, it becomes those who desire to retain the confidence either of persons or of a denomination to think twice before they use the language or assume the attitude of those who appear to regard lightly the feelings or the interests of those whom they are supposed to represent. Confidence once ruthlessly destroyed is not easily restored.