From the INTRODUCTION.
"There is that scattereth and yet increaseth," said the wise King Solomon. "There is that withholdeth more than is meet, but it tendeth to poverty."
Being a wise old monarch, Solomon was not to be taken in by the kind of economy that pinches the sheckel till it spoils the inscription, and then has to let the battered metal go as scrap.
Economy is not the art of spending less, but of realizing more; not of reducing investments, but of enlarging dividends. It is not getting along as best you can with what you have, but having what you can get along with best. Above all it is not the lose-at-the-bung policy of the typical rustic school board when they are penny-wise in paring down all expenses, and pound-foolish in squandering the public good.
In the business world economy tends to regulate itself by a process of natural selection. Lost profits and wasted opportunities quietly drive the inefficient organization to the wall, while more thrifty and enterprising rivals capture the markets and reap the benefits. In commercial matters, therefore, economy needs no more eloquent defense than its own generous balances on the credit side of the account. But in government, church and school affairs the situation is somewhat different. The product cannot be measured in terms of the expenditure. It often requires some study and reflection to determine what true economy really is. Where one sows and another reaps, it is not surprising if some fields receive a rather scanty seeding. Unfortunately, it often happens that the greater the need, and the more limited the resources, the less real economy is used.
In all enterprises there is a point of diminishing returns— a place where the product begins to fall off in increasing ratio to the investment—till the fire is too small to heat the boiler, the power too weak to move the machinery, the stock too poor to attract customers, and the salaries too small to hold efficient workmen. Wherever the economist attempts to lower the investment much below the point of highest economy, his organization rapidly begins to peter out for lack of the means of healthy sustenance.
The problem in school economy, like the problem of the economist in any system, is to keep as close as possible to this point of diminishing returns—the place where greater expenditure would fail to produce proportionally greater results, and where any further retrenchment would be loss rather than gain.
