The Expanded and Annotated My Life and Work

FINANCE BEGINS IN THE SHOP AND NOT THE BANK
The primary object of a manufacturing business is to produce, and if that 
objective is always kept, finance becomes a wholly secondary matter that has 
largely to do with bookkeeping. My own financial operations have been very 
simple. I started with the policy of buying and selling for cash, keeping a large 
fund of cash always on hand, taking full advantage of all discounts, and col-
lecting interest on bank balances. I regard a bank principally as a place in 
which it is safe and convenient to keep money. The minutes we spend on a 
competitor’s business we lose on our own. The minutes we spend in becoming 
expert in finance we lose in production. The place to finance a manufactur-
ing business is the shop, and not the bank. I would not say that a man in busi-
ness needs to know nothing at all about finance, but he is better off knowing 
too little than too much, for if he becomes too expert he will get into the way 
of thinking that he can borrow money instead of earning it and then he will 
borrow more money to pay back what he has borrowed, and instead of being 

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144  •  The Expanded and Annotated My Life and Work
a business man he will be a note juggler, trying to keep in the air a regular 
flock of bonds and notes.
If he is a really expert juggler, he may keep going quite a long time in this 
fashion, but some day he is bound to make a miss and the whole collection 
will come tumbling down around him. Manufacturing is not to be confused 
with banking, and I think that there is a tendency for too many business men 
to mix up in banking and for too many bankers to mix up in business. The 
tendency is to distort the true purposes of both business and banking and 
that hurts both of them. The money has to come out of the shop, not out of the 
bank, and I have found that the shop will answer every possible requirement, 
and in one case, when it was believed that the company was rather seriously 
in need of funds, the shop when called on raised a larger sum than any bank 
in this country could loan.
We have been thrown into finance mostly in the way of denial. Some years 
back we had to keep standing a denial that the Ford Motor Company was 
owned by the Standard Oil Company and with that denial, for convenience’s 
sake, we coupled a denial that we were connected with any other concern or 
that we intended to sell cars by mail. Last year the best-liked rumour was 
that we were down in Wall Street hunting for money. I did not bother to deny 
that. It takes too much time to deny everything. Instead, we demonstrated 
that we did not need any money. Since then I have heard nothing more about 
being financed by Wall Street.
We are not against borrowing money and we are not against bankers. We 
are against trying to make borrowed money take the place of work. We are 
against the kind of banker who regards a business as a melon to be cut. The 
thing is to keep money and borrowing and finance generally in their proper 
place, and in order to do that one has to consider exactly for what the money 
is needed and how it is going to be paid off.