Capital Intentions: Female Proprietors in San Francisco, 1850-1920

Chapter 5. Women as Financial Managers

CHAPTER 5 Women as Financial Managers D ‘‘ o a good job and the profits will take care of themselves.’’ According to her son Grover, this was the philosophy of Mary Ann Magnin, founder of the elegant San Francisco–based department store, I. Magnin.1 The formula seems to have worked, since the retail chain eventually opened stores in thirty different locations and maintained a reputation as the West’s premier retailer until it was closed in  more than one hundred years after its founding.2 And yet, even Grover admitted that with this approach the company was ‘‘not run like a business’’ but was ‘‘more of a hobby.’’3 Awash in the kind of success that no other San Francisco female proprietor enjoyed during the late nineteenth and early twentieth centuries, Mary Ann Magnin could afford such an indulgent view of business management.4 Yet for most of the city’s businesswomen, the profits did not ‘‘take care of themselves’’ but instead had to be carefully managed. Such financial management had little to do with the sort of informal business instincts that guided many women through the start-up phase or helped them figure out how to draw customers. For to take charge of a business’s financial affairs required learned skills rather than intuitive behaviors. Instinct alone was not enough. By the end of the nineteenth century financial management was a science, a matter few successful businesspeople left to fortune or feelings. Business financial decisions were difficult and often meant the difference between keeping an enterprise profitable and driving it into the ground. Among the financial affairs connected with small-business management were record keeping, inventory, loans, debts, credit, insurance policies, and investments . Managing each one required a set of executional skills that needed to be employed every day. What merchandise was paid for and what was not, who still owed money for their hotel stay or new hat, and which policies were up-to-date and which ones past duewere among the daily inquiries that occupied small-business proprietors. Successful management of such issues could easily mean the difference between making a profit or not. While these decisions were difficult ones for any proprietor, businesswomen in the late nineteenth and early twentieth centuries may have been especially ill equipped to handle them. The reason was that the day-to-day financial management skills required in the operation of a business were best mastered through training and experience —precisely the sort of background that most female proprietors did not have. During the nineteenth century businessmen could take advantage of jobs as apprentices in other businesses where they learned hands-on what it took to manage a business financially, but women rarely had this opportunity. In the apparel trades, women often worked their way up to proprietorship after long periods of apprenticeship in another woman’s millinery or dressmaking establishment, but such training supplied women with expertise as craftswomen, not necessarily as businesswomen.5 In other fields of business, women more often struck out on their own without having been trained by a fellow businesswoman at all. And in contrast to businessmen, women business owners were less likely to enter a new enterprise of their own with previous experience operating a business. The management of households and charitable organizations provided limited training opportunities for some women but did not prepare them for the extensive and rigorous financial challenges of proprietorship. Best prepared of all were women who received training in family businesses. Yet evidence shows that many women ceded financial control of such businesses to male family members when possible, underscoring that those who learned to manage money constituted a minority of all female proprietors. All this meant that San Francisco’s businesswomen were, as a group, much ‘‘greener’’ in their role as financial managers and, perhaps, less likely to manage the financial side of their businesses with skill and success. Thus, to examine female proprietors as financial managers requires both that we recognize the degree to which they were economic actors, embroiled in complex financial decisions and transactions on a daily basis, and the exWomen as Financial Managers  tent to which they met these challenges without the training and experience that would have made them good at it. Their job was to protect the profits of their businesses, but often they did so with...