“Shirtsleeves to shirtsleeves in 3 generations”

Some business sayings contain more than a kernel of truth.

Family wealth is seldom permanent. It moves over time. There are many reasons for that change in fortune; They can be accidental or intentional.

1. My wife’s family started and owned the London-Petrolia Barrel Company during the middle of the 19th and early 20th century. They were Newfie coopers who were known for their skill of making watertight oak barrels.

The fledgling nearby petroleum industry (centred around Petrolia and Oil Springs, Ontario) relied heavily on oak barrels for storage. Petrolia is often credited with starting the North American oil industry in 1856. My wife’s mom was driven to school by the company chauffeur.

The family wealth did not survive the 3rd generation.

2. Their largest customer was Samuel Bronfman (Mr. Sam) of Seagram’s fame: the world’s largest independent distiller at one time. They did quite a brisk business supplying good quality Canadian hooch into the U.S. during Prohibition (1920-33).

Edgar Bronfman, Jr. (Sam’s grandson) sold the liquor business to expand into the music industry.

Again, 3 generations.

In summary, wealth is a balance sheet item: It is only counted at one specific time. It is often squandered.

  • Big Franchising specializes in re-allocating (not creating) wealth.

Questions Arising

  1. If you can successfully trick someone out of their fortune, Were they really all that competent as stewards of that resource, anyway? (an efficient market argument)
  2. If you fail to con someone out of their life savings, won’t someone else do it? (competition among thieves argument)
  3. If given a chance, Would the victim have resisted in ripping off the same people that ripped them off?

Con men often say you can’t con an honest man (ie. that there must be some degree of larceny in a potential victim to work with).

  • I am an honest man [most of the time].
  • But I can try to round corners at times and that is my greatest weakness (pride).

Every man may or may not have a price. But I do know every person has a bait that they find irresistible.

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