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Title: Strange Survivals: Some Chapters in the History of Man
Author: S. Baring-Gould
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*** START OF THE PROJECT GUTENBERG EBOOK STRANGE
SURVIVALS: SOME CHAPTERS IN THE HISTORY OF MAN ***](https://image.slidesharecdn.com/76600-250621161808-ed63ee26/85/Financial-Ratios-How-to-use-financial-ratios-to-maximise-value-and-success-for-your-business-1st-Edition-Richard-Bull-31-320.jpg)
![from place to place with ease, but directly he began to build of
stone, or raise earthworks as fortifications, he considered himself
engaged on a serious undertaking. He was disturbing the face of
Mother Earth, he was securing to himself in permanency a portion of
that surface which had been given by her to all her children in
common. Partly with the notion of offering a propitiatory sacrifice to
the earth, and partly also with the idea of securing to himself for
ever a portion of soil by some sacramental act, the old Pagan laid
the foundations of his house and fortress in blood.
Every great work was initiated with sacrifice. If a man started on a
journey, he first made an offering. A warlike expedition was not
undertaken till an oblation had been made, and the recollection of
this lingered on in an altered form of superstition, viz., that that side
would win the day which was the first to shed blood, a belief alluded
to in the “Lady of the Lake.” A ship could not be launched without a
sacrifice, and the baptism of a vessel nowadays with a bottle of wine
is a relic of the breaking of the neck of a human victim and the
suffusion of the prow with blood, just as the burial of a bottle with
coins at the present day under a foundation stone is the faded
reminiscence of the immuring of a human victim.
Building, in early ages, was not so lightly taken in hand as at
present, and the principles of architectural construction were ill
understood. If the walls showed tokens of settlement, the reason
supposed was that the earth had not been sufficiently propitiated,
and that she refused to bear the superimposed burden.
Plutarch says that when Romulus was about to found the Eternal
City, by the advice of Etruscan Augurs, he opened a deep pit, and
cast into it the “first fruits of everything that is reckoned good by
use, or necessary by nature,” and before it was closed by a great
stone, Faustulus and Quinctilius were killed and laid under it. This
place was the Comitium, and from it as a centre, Romulus described
the circuit of the walls.[1] The legend of Romulus slaying Remus
because he leaned over the low walls is probably a confused
recollection of the sacrifice of the brothers who were laid under the](https://image.slidesharecdn.com/76600-250621161808-ed63ee26/85/Financial-Ratios-How-to-use-financial-ratios-to-maximise-value-and-success-for-your-business-1st-Edition-Richard-Bull-44-320.jpg)
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- 5. Financial Ratios How to use financial ratios to maximise value and success for your business 1st Edition Richard Bull Digital Instant Download Author(s): Richard Bull ISBN(s): 9780750684538, 0750684534 Edition: 1 File Details: PDF, 1.06 MB Year: 2007 Language: english
- 7. Financial Ratios How to use financial ratios to maximise value and success for your business Richard Bull AMSTERDAM • BOSTON • HEIDELBERG • LONDON NEW YORK • OXFORD • PARIS • SAN DIEGO SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO CIMA Publishing is an imprint of Elsevier
- 8. CIMA Publishing is an imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP, UK 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA First edition 2008 Copyright © 2008 Richard Bull. All rights reserved The right of Richard Bull to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1998 No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone (+44) (0) 1865 843830; fax (+44) (0) 1865 853333; e-mail: [email protected]. Alternatively you can submit your request online by visiting the Elsevier web site at http://elsevier.com/locate/permissions, and selecting Obtaining permission to use Elsevier material Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library 978 0 7506 8453 8 For information on all CIMA publications visit our website at books.elsevier.com Typeset by Integra Software Services Pvt. Ltd, Pondicherry, India www.integra-india.com Printed and bound in Great Britain 07 08 09 10 11 10 9 8 7 6 5 4 3 2 1 Working together to grow libraries in developing countries www.elsevier.com | www.bookaid.org | www.sabre.org
- 9. Contents List of Figures and Tables v Foreword vii Acknowledgements viii About the Author ix Introduction: The place of financial ratios in business success xi PART ONE The Role of Financial Ratios 1 1 Creating value – a model of success 3 2 Measuring value – the origin of financial ratios 17 PART TWO Understanding Financial Ratios 33 3 Funding management – the gearing ratio 35 4 Asset management – the asset turnover ratio 45 5 Value add management – the profit margin 61 6 Tax management – the effective tax rate 77 7 Growth management – the payout and retention ratios 87 PART THREE Using Financial Ratios 99 8 The composite ratios 101 9 The place of financial ratios in strategic management 115 10 Perspectives on financial ratios 131 Contents iii
- 10. Appendices 143 Appendix 1 The purpose of ratios: The three Eff’s 145 Appendix 2 The source and application of financial data for ratio analysis 149 Appendix 3 A benchmarking example 157 Appendix 4 Further reading 163 Index 167 Contents iv
- 11. List of Figures and Tables Figures I.1 The three Eff’s xv I.2 The components of a process xvi I.3 The Enterprise Stewardship Model xvii 1.1 Strategic management 6 1.2 Funding management 7 1.3 Asset management 8 1.4 Value add management 11 1.5 Tax management 12 1.6 Growth management 14 2.1 Business as a process for measurement 20 2.2 The strategic ratios 21 2.3 The gearing ratio 22 2.4 The asset turnover ratio 23 2.5 The profit margin 24 2.6 The effective tax rate 25 2.7a The retention ratio 26 2.7b The payout ratio 26 2.8 The financial ratios 27 2.9 The composite ratios 28 3.1 Funding management 38 4.1 Asset management 47 4.2 Analysis of assets on the balance sheet 50 4.3 Classes of assets 57 5.1 Value add management 64 5.2 The relationship between profit and value added 65 5.3 Two approaches to cost management 67 5.4 Three approaches to profit management 68 5.5 Alternative ways of doubling your profit margin 70 5.6 The enterprise value chain 73 6.1 Tax management 81 7.1 Growth management 90 7.2 Techniques of investment appraisal 93 8.1 Benchmarking results and processes for your business 104 8.2 The return on assets ratio 107 List of Figures and Tables v
- 12. List of Figures and Tables vi 8.3 The return on equity ratio 108 8.4 The dividend yield 109 8.5 The composite ratios 111 9.1 The strategic management ratio 118 9.2 Five steps in the strategic management process 119 9.3 Checking the foundations 125 9.4 Strategic building maintenance 126 10.1 The customer and supplier perspectives on the profit margin 136 10.2 The employee perspective on ROA 137 10.3 The community perspective on after-tax ROA 138 10.4 The shareholder and entrepreneur perspectives on yields 140 10.5 The leadership perspective on roles and relationships 141 A2.1 The source of financial data for ratio analysis 152 A2.2 The application of financial data for ratio analysis 152 A2.3 Worked example: A jewellery group 154 A2.4 Worked example: An international oil company 155 A3.1 Benchmarking example – selected company data 159 A3.2 Benchmark mapping 160 Tables A1.1 The Three Eff’s – Definitions 147 A1.2 The Three Eff’s – Examples 148
- 13. Foreword A key element in the difference between success and failure in business start-ups is the ability of entrepreneurs to come to grips with the financial aspects of the business. Relatively few compa- nies are started by accountants, and the sorts of people who have entrepreneurial drive are unlikely to regard financial ratios as an absorbing subject. Hence it is important that books on the subject should be eminently readable and present the necessary information in such a way as to give it a ‘story line’. This Richard Bull’s book does extremely well, putting ratios in the context of the successive stages of building a business, from the original idea, through the formulation of strategy to the realisation of added value. He concludes by looking at financial ratios from the perspectives of the different stakeholders – the customers, the employees, the suppliers, the community and the shareholders. The author does remind us, however, of the dangers inherent in measuring business success through financial ratios alone. I would strongly recommend this work as essential reading, not only for budding entrepreneurs, but for all those from non-financial backgrounds whose career paths take them into jobs that carry profit responsibility. It will also be of value to business studies students as a ‘crammer’. Philip Sadler CBE formerly Chief Executive of Ashridge Management College Foreword vii
- 14. Acknowledgements Acknowledgements viii viii Acknowledgements Thank you to those who have contributed to this book. It represents a further step in realising a vision for revealing the essence of business and what it means to all those engaged in it. In particular, I would like to thank: David Auger BSc FCA; Neil Austin BSc FCA MSI, Partner at KPMG and Global Head of Markets; Dr David Hillson FRSA FAPM FIRM FCMI, Director of Risk Doctor and Partners; and Gordon B.F. McKay MIOM, Managing Director of GBFM Consulting Ltd for their comments and amendments to the original draft. They have each contributed to its character and integrity. My thanks too to Andrew Boyd for his help in producing the intro- ductory video for the CD-ROM included with this book.
- 15. About the Author Richard Bull graduated in Politics, Philosophy and Economics from Oxford University before qualifying as an accountant with the Char- tered Institute of Management Accountants (CIMA). He draws from his experience in a number of financial management positions in manufacturing and financial services over twenty years, including management consultancy assignments across a variety of industries. He is also a member of the Institute of Business Consulting (IBC). Richard has written for a number of professional journals on many aspects of financial management and performance measurement and received an award from the International Federation of Accountants for his ‘distinct and valuable contribution to the advancement of management accounting’. He can be contacted via the publishers or through e-mail at [email protected] About the Author About About the Author the Author ix ix ix
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- 17. Introduction: The place of financial ratios in business success The place of financial ratios in measuring value and success in business ‘What gets measured gets managed.’ This has become an established principle in business. But is what we measure always what we want to manage? And is the target for our measurement what we really want to achieve? A ratio expresses the relationship between two things. Expressed arithmetically, it is one number (the ‘numerator’) divided by another (the ‘denominator’): 1/2, 2/1, 5/8, expressed as 1:2, 2:1 or 5:8 respec- tively. A ratio can also measure the performance of a process. It can measure the amount of output from a process divided by the amount of input to that process. In this way we may derive a measure of productivity, say 100 widgets per person or 100 kilowatts per hour and so on. This can help us test the result of management actions designed to improve the performance of a process – an essential component in the ‘plan-do-check-act’ (PDCA) decision loop so familiar to students of management. Financial ratios seek to measure the performance of a process by using a common unit of measure – money. To be precise, the mon- etary value attributed to things. In this way they can conveniently eliminate the units of measure of widgets, energy or even people and reduce the ratio back to its numeric form: 1:2, 2:1, 5:8 and so on. Where success can be measured in purely financial terms then finan- cial ratios can be a convenient way of measuring, and managing, success. But if true success – even happiness – defies measurement in financial terms then, while financial ratios may provide helpful proxies, they should be used with caution. We should be quite clear where they do not express fully what we seek to achieve. Otherwise we may achieve the outcome they inevitably lead us to rather than the success we ultimately seek. Introduction: The place of financial ratios in business success xi
- 18. Introduction: The place of financial ratios in business success xii Key challenges 1. How do we measure value and success? 2. What can we measure using financial ratios in a business? 3. How can we best describe a generic process for a business or enterprise? The purpose of this book And so this book provides both a guide and a warning for people who wish to make a success of the business in which they are engaged. It provides a road map of the steps that any business has to follow – from start-up to maturity. It illustrates how financial ratios seek to measure the way those steps are performed. And it describes some of the ways in which you might use those ratios to maximize the value and success you seek to achieve in your business. Financial Ratios therefore stands out from other books on the subject. Other authors go to great lengths to explain what each ratio is called, how to calculate it, and what its numeric value is for different com- panies or industries. Their books tend to start with a particular ratio and then explain what it does, with a lot of numbers along the way. My approach is to start at the business end. I begin by setting out the key management processes in any business or enterprise, what a successful business requires of them, and how to use financial ratios to measure that success. You will not find many numbers in this book. This book is not an instruction manual. It will not tell you what you must do in each case to maximize value and achieve success. The criteria for determining value differ in different markets and industries where risks and opportunities vary. And the standards set for judging success differ in different cultures, where requirements and priorities vary. This might sound extremely unsettling in a world where success in business is so often judged by profitability, market value and dividend yield – the trappings of ‘the bottom line’. However, such trappings have often proved to be exactly that: traps for the unwary – especially the investor who is easily taken in by ‘headline’ figures.
- 19. They have in turn proved to be too strong a temptation for the unprincipled accountants or ‘financial engineers’, who have found ways to manipulate the figures to deceive the unwary. It is for just this reason that this book is required reading for those who seek to understand the substance behind the headlines. It is for those who want to both contribute to and share in the success of an enterprise – not just for today but in whatever time frame is appropriate for them. If you are a shareholder or investor, broker or analyst, CEO or non- executive director, it is important that you are able to put the finan- cial results of an enterprise in proper context, expressed in ratio form or otherwise. You will then be able to judge the relevance of the data you are presented with. And you will be able to ask the right questions about it so that you can convert such data into real information. It is only then that you will be in a position to make properly informed decisions. Value and success in business The terms ‘business’ and ‘enterprise’ are often used interchangeably. However, when examining financial ratios as tools of performance measurement there is a subtle distinction which may be helpful. Where ‘business’ refers simply to a level of activity (or ‘busy- ness’), the appropriate measurement of its performance would be the amount of resources employed in it and the degree to which they are utilised. Thus measures of speed, production and productivity would be most relevant. However ‘enterprise’ implies a sense of pur- pose. The appropriate measure of performance will then depend on what that purpose is. It is here that the concept of ‘success’ becomes relevant but at the same time difficult to generalise. If the measure of success of a company is the amount of hard cash it is generating for the owners or shareholders, then the level of dividends being distributed to them would be the ultimate measure. As soon as one looks beyond today, one would want to look at how capable the company is of maintaining or increasing that distribution. Key measures would then include its profitability, return on equity and such things as dividend cover. Already we are adding to complexity and increasing the risk of confusion. Introduction: The place of financial ratios in business success xiii
- 20. Introduction: The place of financial ratios in business success xiv The levels of complexity increase substantially when we consider more subtle measures of success. The above only considers the interest of shareholders. In reality businesses incorporate a vari- ety of other interests as well: employees, suppliers, customers, and providers of local services. This is the wider community of stake- holders. They are all critical to the success of an enterprise and, to the extent that ‘value and success are in the eye of the beholder’, they will each have their own perspective on the value of a business. We fulfil many of these various roles ourselves – as customer, sup- plier, employee or interested member of the public – in the different enterprises that we are engaged with. Consideration of these wider, no less legitimate interests, calls for new criteria for judging suc- cess and new benchmarks for measuring value. A company’s actions have effects on a wide variety of interests which in turn can affect its own success. Finally, we consider the real purpose for which an enterprise was ini- tiated. Here its success must be measured by the extent to which the original vision or idea for the enterprise has been realised. Visions can have tangible and intangible elements and may not even be capable of measurement when first conceived. This makes the task of assessing their achievement that much more challenging by using financial measures alone. The ‘Three Eff’s’ When we seek to measure the value and success of an enterprise we can look at its performance in three different perspectives. Each dimension can be applied to the enterprise as a whole or to separate processes within it. The first perspective is efficiency. Measures of efficiency take the inputs to a process and assess how economically they are used to produce a given output. They therefore tend to focus on cost. A sec- ond perspective is effectiveness. Measures of effectiveness assess the value of output produced from a given set of resources. This subtly shifts our focus from measuring inputs to measuring output. When using financial measures it represents a shift from measuring cost to measuring value. The final perspective is efficacy. This is a little-used term but one which describes this third dimension of per- formance very aptly. Measures of efficacy assess the degree to which the inputs produced the result intended and thereby contributed
- 21. to the achievement of the true purpose of the enterprise. Here we venture into aspects of value which are often less tangible and have more to do with measuring success. It is therefore more difficult to apply financial measures as we progress through these perspectives. Introduction: The place of financial ratios in business success These three perspectives are illustrated in Figure I.1. A company’s vision is mapped against five criteria (A, B, C, D and E). Three different sets of performance results are then mapped over it to illustrate the three different perspectives: efficiency, effectiveness and efficacy. 0 10 A B C D E 0 10 A B C D E 0 10 A B C D E Efficiency Vision Performance Efficacy Vision Performance Effectiveness Vision Performance F igure I.1 T he three Eff’s In the first case the enterprise might be seen to be achieving success through its efficiency. The vision is being mirrored by performance, but constrained in every direction by an over-emphasis on efficiency. In the second case some criteria are being achieved effectively but at the expense of others, and the vision has been distorted in the process. The third case illustrates efficacy. Performance reflects the shape of the vision and is largely fulfilling it. Financial ratios are of themselves quantitative in nature. They are therefore most appropriate as measures of efficiency. The more we understand the processes that lie behind them, the more we can use them qualitatively to measure the effectiveness of those processes. But if true success is to be measured by the efficacy of an enter- prise’s performance, we need to relate measures to the quintessential nature of that enterprise. In reviewing the place of financial ratios in a model of success for your business we shall be reviewing their characteristics in these three areas – and seeking to identify where they are helpful and where they can be found wanting. For a fuller illustration of how to apply the ‘Three Eff’s’ in measuring the success of your business, see the tables in Appendix 1. xv
- 22. The Enterprise Stewardship Model Introduction: The place of financial ratios in business success xvi Financial ratios only make sense if they can be related to the pro- cesses they are intended to measure. It is therefore important to have a process map for your business that enables you to overlay the key financial ratios you will use to measure its performance. In constructing a generic-process map of a business we shall use the conventional components of any process: inputs to an activity in producing an output (Figure I.2). Activity Input Output Input F igure I.2 T he components of a process Although every business is different, the way in which every busi- ness develops can be described in a generic set of processes which have been compiled as an Enterprise Stewardship Model (ESM) (Figure I.3). We shall construct this model step by step in Chapter 1 and use it extensively throughout the book. Again, this model is not prescriptive. Rather it is descriptive of the way all enterprises start out and grow. They may not do so con- sciously, and the model can help identify areas which a business has not consciously addressed. But every business will have needed to at least imitate the steps in the model if it is to become a living enterprise. The Enterprise Stewardship Model (ESM) was developed to meet the need for clarification and simplicity in managing an enterprise. It has been used in a wide variety of contexts and with a wide variety of audiences. In each case it has proved invaluable as an aid to understanding – and that is what this book is about.
- 23. Growth management Tax management Value add management Asset management Funding management Strategic management Reinvestment Disposable profit Profit Capacity Funds Idea Owner’s investment Potential demand Borrowings Customer requirements Purchases expenses Tax Dividends Sales F igure I.3 T he Enterprise Stewardship Model Some useful tips 1. ‘Value and success are in the eye of the beholder’. a. There are many ‘beholders’ (stakeholders) in a business. b. Their horizons extend into the future. c. There are tangible and intangible elements (and corre- sponding measures) of value and success. 2. Financial ratios seek to measure the efficiency, effectiveness and efficacy of a business – with varying degrees of success. 3. The Enterprise Stewardship Model describes a generic pro- cess for any business or enterprise that can be used for analysis and comparison of processes and their financial performance. Introduction: The place of financial ratios in business success xvii
- 24. How to use this book Introduction: The place of financial ratios in business success xviii This book is an introduction to financial ratios. As such it lays a foundation of understanding as to what they are trying to achieve, when it is helpful to use them and where their limitations lie. There are a number of weighty tomes written on the subject which define and describe each and every financial ratio ‘on the market’ (see the Further Reading section at the end of the book for those who wish to study further). As dictionaries of terms they can be very useful, but it is only by starting at our point of need for such measures that we can truly understand their purpose and value to our business. That is where this book starts. This book is best read as a story, from beginning to end, but falls naturally into three parts: 1. The first part (Chapters 1–2) provides an overview of the key pro- cesses in any business and how these processes can be measured with financial ratios. 2. The second part (Chapters 3–7) explores each of these key pro- cesses in turn, and examines the risks and benefits involved in using financial ratios as a management tool. 3. The final part (Chapters 8–10) looks at the use of financial ratios from a number of perspectives: where they are used in combina- tion with others, how they can be used in strategic management, and what they represent to different groups of ‘stakeholders’ within a business. The CD-ROM that accompanies the book provides some of the illus- trations from the book in electronic format; some interactive spread- sheets for calculating ratios in your business and benchmarking them against others; and an opportunity for me to introduce the book and explain how and why it came about. When you insert the CD-ROM in your drive it will show a list of contents which you can navigate by clicking on the items you want to see. A good rule of construction is that, if a building is to be sturdy and lasting, a third of the cost goes into the ground. The same applies to the use of financial ratios. Time invested in understanding the principles and processes of what we are trying to measure will be time well-spent when selecting and using measures as the basis for decision-making and action.
- 25. This book seeks to be a practical guide that can be applied to any enterprise. In writing it I have drawn on my experience in financial management in the manufacturing and financial services sectors and in consultancy across a range of sectors. Indeed the model on which it is based has been applied to both commercial and non-commercial enterprises. I trust it will prove helpful in enabling you to define your own unique model of success and maximize the value and success you seek. How to maximise value and success 1. Define what you mean by value and success in your busi- ness. 2. Use financial ratios as a guide and not a trap. 3. Consider quantitative measures alongside qualitative and quintessential ones. Introduction: The place of financial ratios in business success xix
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- 31. This ebook is for the use of anyone anywhere in the United States and most other parts of the world at no cost and with almost no restrictions whatsoever. You may copy it, give it away or re-use it under the terms of the Project Gutenberg License included with this ebook or online at www.gutenberg.org. If you are not located in the United States, you will have to check the laws of the country where you are located before using this eBook. Title: Strange Survivals: Some Chapters in the History of Man Author: S. Baring-Gould Release date: May 9, 2016 [eBook #52024] Most recently updated: October 23, 2024 Language: English Credits: Produced by Chris Curnow, Elisa and the Online Distributed Proofreading Team at http://www.pgdp.net (This file was produced from images generously made available by The Internet Archive). *** START OF THE PROJECT GUTENBERG EBOOK STRANGE SURVIVALS: SOME CHAPTERS IN THE HISTORY OF MAN ***
- 33. BY THE SAME AUTHOR. Old Country Life. Large Crown 8vo, 10s. 6d. Historic Oddities and Strange Events. Crown 8vo, 6s. Freaks of Fanaticism. Crown 8vo, 6s. Songs of the West: Traditional Ballads and Songs of the West of England, with their Traditional Melodies. Parts I., II., and III., 3s. each; Part IV., 5s. Complete in one Vol., French Morocco, gilt edges, 15s. Yorkshire Oddities and Strange Events. Crown 8vo, 6s. In the Roar Of the Sea: A Tale of the Cornish Coast. Crown 8vo, 6s. Jacquetta, and other Stories. Crown 8vo, 3s. 6d. Boards, 2s. Arminell: A Social Romance. Crown 8vo, 3s. 6d. Boards, 2s. Urith: A Story of Dartmoor. Crown 8vo, 3s. 6d. Margery Of Quether, and other Stories. Crown 8vo, 3s. 6d. The Tragedy of the Cæsars: The Emperors of the Julian and Claudian Lines. 2 Vols., Royal 8vo. [In the Press.
- 35. STRANGE SURVIVALS Some Chapters in the History of Man BY S. BARING-GOULD, M.A. AUTHOR OF “MEHALAH,” “OLD COUNTRY LIFE,” “URITH,” “IN THE ROAR OF THE SEA.” Methuen Co. 18 BURY STREET, LONDON, W.C. 1892. Printed by Cowan Co., Limited, Perth.
- 36. CONTENTS. PAGE I. On Foundations 1 II. On Gables 36 III. Ovens 62 IV. Beds 84 V. Striking a Light 110 VI. Umbrellas 129 VII. Dolls 139 VIII. Revivals 149 IX. Broadside Ballads 180 X. Riddles 220 XI. The Gallows 238 XII. Holes 252 XIII. Raising the Hat 282
- 37. STRANGE SURVIVALS: SOME CHAPTERS IN THE HISTORY OF MAN.
- 39. I. On Foundations. When the writer was a parson in Yorkshire, he had in his parish a blacksmith blessed, or afflicted—which shall we say?—with seven daughters and not a son. Now the parish was a newly constituted one, and it had a temporary licensed service room; but during the week before the newly erected church was to be consecrated, the blacksmith’s wife presented her husband with a boy—his first boy. Then the blacksmith came to the parson, and the following conversation ensued:— Blacksmith: “Please, sir, I’ve gotten a little lad at last, and I want to have him baptised on Sunday.” Parson: “Why, Joseph, put it off till Thursday, when the new church will be consecrated; then your little man will be the first child christened in the new font in the new church.” Blacksmith (shuffling with his feet, hitching his shoulders, looking down): “Please, sir, folks say that t’ fust child as is baptised i’ a new church is bound to dee (die). T’ old un (the devil) claims it. Now, sir, I’ve seven little lasses, and but one lad. If this were a lass again ’twouldn’t ’a’ mattered; but as it’s a lad—well, sir, I won’t risk it.” A curious instance this of a very widespread and very ancient superstition, the origin of which we shall arrive at presently. In the first place, let us see the several forms it takes. All over the north of Europe the greatest aversion is felt to be the first to enter a new building, or to go over a newly erected bridge. If
- 40. to do this is not everywhere and in all cases thought to entail death, it is considered supremely unlucky. Several German legends are connected with this superstition. The reader, if he has been to Aix-la- Chapelle, has doubtless had the rift in the great door pointed out to him, and has been told how it came there. The devil and the architect made a compact that the first should draw the plans, and the second gain the Kudos; and the devil’s wage was to be that he should receive the first who crossed the threshold of the church when completed. When the building was finished, the architect’s conscience smote him, and he confessed the compact to the bishop. “We’ll do him,” said the prelate; that is to say, he said something to this effect in terms more appropriate to the century in which he lived, and to his high ecclesiastical office. When the procession formed to enter the minster for the consecration, the devil lurked in ambush behind a pillar, and fixed his wicked eye on a fine fat and succulent little chorister as his destined prey. But alas for his hopes! this fat little boy had been given his instructions, and, as he neared the great door, loosed the chain of a wolf and sent it through. The evil one uttered a howl of rage, snatched up the wolf and rushed away, giving the door a kick, as he passed it, that split the solid oak. The castle of Gleichberg, near Rönskild, was erected by the devil in one night. The Baron of Gleichberg was threatened by his foes, and he promised to give the devil his daughter if he erected the castle before cockcrow. The nurse overheard the compact, and, just as the castle was finished, set fire to a stack of corn. The cock, seeing the light, thought morning had come, and crowed before the last stone was added to the walls. The devil in a rage carried off the old baron —and served him right—instead of the maiden. We shall see presently how this story works into our subject. At Frankfort may be seen, on the Sachsenhäuser Bridge, an iron rod with a gilt cock on the top. This is the reason: An architect undertook to build the bridge within a fixed time, but three days before that on which he had contracted to complete it, the bridge
- 41. was only half finished. In his distress he invoked the devil, who undertook the job if he might receive the first who crossed the bridge. The work was done by the appointed day, and then the architect drove a cock over the bridge. The devil, who had reckoned on getting a human being, was furious; he tore the poor cock in two, and flung it with such violence at the bridge that he knocked two holes in it, which to the present day cannot be closed, for if stones are put in by day they are torn out by night. In memorial of the event, the image of the cock was set up on the bridge. Sometimes the owner of a house or barn calls in the devil, and forfeits his life or his soul by so doing, which falls to the devil when the building is complete. And now, without further quotation of examples, what do they mean? They mean this—that in remote times a sacrifice of some sort was offered at the completion of a building; but not only at the completion—the foundation of a house, a castle, a bridge, a town, even of a church, was laid in blood. In heathen times a sacrifice was offered to the god under whose protection the building was placed; in Christian times, wherever much of old Paganism lingered on, the sacrifice continued, but was given another signification. It was said that no edifice would stand firmly unless the foundations were laid in blood. Some animal was placed under the corner-stone—a dog, a sow, a wolf, a black cock, a goat, sometimes the body of a malefactor who had been executed for his crimes. Here is a ghastly story, given by Thiele in his “Danish Folk-tales.” Many years ago, when the ramparts were being raised round Copenhagen, the wall always sank, so that it was not possible to get it to stand firm. They, therefore, took a little innocent girl, placed her in a chair by a table, and gave her playthings and sweetmeats. While she thus sat enjoying herself, twelve masons built an arch over her, which, when completed, they covered with earth to the sound of drums and trumpets. By this process the walls were made solid. When, a few years ago, the Bridge Gate of the Bremen city walls was demolished, the skeleton of a child was actually found
- 42. embedded in the foundations. Heinrich Heine says on this subject: “In the Middle Ages the opinion prevailed that when any building was to be erected something living must be killed, in the blood of which the foundation had to be laid, by which process the building would be secured from falling; and in ballads and traditions the remembrance is still preserved how children and animals were slaughtered for the purpose of strengthening large buildings with their blood.” The story of the walls of Copenhagen comes to us only as a tradition, but the horrible truth must be told that in all probability it is no invention of the fancy, but a fact. Throughout Norway, Sweden, Denmark, and North Germany, tradition associates some animal with every church, and it goes by the name of Kirk-Grim. These Kirk-Grims are the goblin apparitions of the beasts that were buried under the foundation-stones of the churches. It is the same in Devonshire—the writer will not say at the present day, but certainly forty or fifty years ago. Indeed, when he was a boy he drew up a list of the Kirk-Grims that haunted all the neighbouring parishes. To the church of the parish in which he lived, belonged two white sows yoked together with a silver chain; to another, a black dog; to a third, a ghostly calf; to a fourth, a white lamb. Afzelius, in his collection of Swedish folk-tales, says: “Heathen superstition did not fail to show itself in the construction of Christian churches. In laying the foundations, the people retained something of their former religion, and sacrificed to their old deities, whom they could not forget, some animal, which they buried alive, either under the foundation or without the wall. The spectre of this animal is said to wander about the churchyard at night, and is called the Kirk-Grim. A tradition has also been preserved that under the altar of the first Christian churches, a lamb was usually buried, which imparted security and duration to the edifice. This is an emblem of the true Church Lamb—the Saviour, who is the Corner-Stone of His Church. When anyone enters a church at a time when there is no service, he
- 43. may chance to see a little lamb spring across the quire and vanish. This is the church-lamb. When it appears to a person in the churchyard, particularly to the grave-digger, it is said to forbode the death of a child.” Thiele, in his “Danish Folk-tales,” says much the same of the churches in Denmark. He assures us that every church there has its Kirk-Grim, which dwells either in the tower, or in some other place of concealment. What lies at the base of all stories of haunted houses is the same idea. All old mansions had their foundations laid in blood. This fact is, indeed, forgotten, but it is not forgotten that a ghostly guard watches the house, who is accounted for in various ways, and very often a crime is attributed to one of the former inhabitants to account for the walking of the ghost. By no means infrequently the crime, which, in the popular mind, accounts for the ghost, can be demonstrated historically not to have taken place. Again, in a great number of cases, the spectre attached to a building is not that of a human being at all, but of some animal, and then tradition is completely at a loss to explain this phenomenon. The proverb says that there is a skeleton in every man’s house, and the proverb is a statement of what at one time was a fact. Every house had its skeleton, and every house was intended to have its skeleton; and what was more, every house was designed to have not only its skeleton, but its ghost. We are going back to heathen times, when we say that at the foundation-stone laying of every house, castle, or bridge, provision was made to give to each its presiding, haunting, protecting spirit. The idea, indeed, of providing every building with its spectre, as its spiritual guard, was not the primary idea, it grew later, out of the original one, the characteristically Pagan idea, of a sacrifice associated with the beginning of every work of importance. When the primeval savage lived in a hut of poles over which he stretched skins, he thought little of his house, which could be carried
- 44. from place to place with ease, but directly he began to build of stone, or raise earthworks as fortifications, he considered himself engaged on a serious undertaking. He was disturbing the face of Mother Earth, he was securing to himself in permanency a portion of that surface which had been given by her to all her children in common. Partly with the notion of offering a propitiatory sacrifice to the earth, and partly also with the idea of securing to himself for ever a portion of soil by some sacramental act, the old Pagan laid the foundations of his house and fortress in blood. Every great work was initiated with sacrifice. If a man started on a journey, he first made an offering. A warlike expedition was not undertaken till an oblation had been made, and the recollection of this lingered on in an altered form of superstition, viz., that that side would win the day which was the first to shed blood, a belief alluded to in the “Lady of the Lake.” A ship could not be launched without a sacrifice, and the baptism of a vessel nowadays with a bottle of wine is a relic of the breaking of the neck of a human victim and the suffusion of the prow with blood, just as the burial of a bottle with coins at the present day under a foundation stone is the faded reminiscence of the immuring of a human victim. Building, in early ages, was not so lightly taken in hand as at present, and the principles of architectural construction were ill understood. If the walls showed tokens of settlement, the reason supposed was that the earth had not been sufficiently propitiated, and that she refused to bear the superimposed burden. Plutarch says that when Romulus was about to found the Eternal City, by the advice of Etruscan Augurs, he opened a deep pit, and cast into it the “first fruits of everything that is reckoned good by use, or necessary by nature,” and before it was closed by a great stone, Faustulus and Quinctilius were killed and laid under it. This place was the Comitium, and from it as a centre, Romulus described the circuit of the walls.[1] The legend of Romulus slaying Remus because he leaned over the low walls is probably a confused recollection of the sacrifice of the brothers who were laid under the
- 45. bounding wall. According to Pomponius Mela, the brothers Philæni were buried alive at the Carthaginian frontier. A dispute having arisen between the Carthaginians and Cyrenæans about their boundaries, it was agreed that deputies should start at a fixed time from each of the cities, and that the place of their meeting should thenceforth form the limit of demarcation. The Philæni departed from Carthage, and advanced much farther than the Cyrenæans. The latter accused them of having set out before the time agreed upon, but at length consented to accept the spot which they had reached as a boundary line, if the Philæni would submit to be buried alive there. To this the brothers consented. Here the story is astray of the truth. Really, the Philæni were buried at the confines of the Punic territory, to be the ghostly guardians of the frontier. There can be little doubt that elsewhere burials took place at boundaries, and it is possible that the whipping of boys on gang-days or Rogations may have been a mediæval and Christian mitigation of an old sacrifice. Certainly there are many legends of spectres that haunt and watch frontiers, and these legends point to some such practice. But let us return to foundations. In the ballad of the “Cout of Keeldar,” in the minstrelsy of the Border, it is said, “And here beside the mountain flood A massy castle frowned, Since first the Pictish race in blood The haunted pile did found.” In a note, Sir Walter Scott alludes to the tradition that the foundation stones of Pictish raths were bathed in human gore. A curious incident occurs in the legend of St. Columba, founder of Iona, which shows how deep a hold the old custom had taken. The original idea of a sacrifice to propitiate the earth was gone, but the idea that appropriation of a site was not possible without one took its place. The Saint is said to have buried one of his monks, Oran by name, alive, under the foundations of his new abbey, because, as
- 46. fast as he built, the spirits of the soil demolished by night what he raised by day. In the life of the Saint by O’Donnell (Trias Thaumat.) the horrible truth is disguised. The story is told thus:—On arriving at Hy (Iona), St. Columba said, that whoever willed to die first would ratify the right of the community to the island by taking corporal possession of it. Then, for the good of the community, Oran consented to die. That is all told, the dismal sequel, the immuring of the living monk, is passed over. More recent legend, unable to understand the burial alive of a monk, explains it in another way. Columba interred him because he denied the resurrection. It is certain that the usage remained in practice long after Europe had become nominally Christian; how late it continued we shall be able to show presently. Grimm, in his “German Mythology,” says: “It was often considered necessary to build living animals, even human beings, into the foundations on which any edifice was reared, as an oblation to the earth to induce her to bear the superincumbent weight it was proposed to lay on her. By this horrible practice it was supposed that the stability of the structure was assured, as well as other advantages gained.” Good weather is still thought, in parts of Germany, to be secured by building a live cock into a wall, and cattle are prevented from straying by burying a living blind dog under the threshold of a stable. The animal is, of course, a substitute for a human victim, just as the bottle and coins are the modern substitute for the live beast. In France, among the peasantry, a new farmhouse is not entered on till a cock has been killed, and its blood sprinkled in the rooms. In Poitou, the explanation given is that if the living are to dwell in the house, the dead must have first passed through it. And in Germany, after the interment of a living being under a foundation was abandoned, it was customary till comparatively recently to place an empty coffin under the foundations of a house. This custom was by no means confined to Pagan Europe. We find traces of it elsewhere. It is alluded to by Joshua in his curse on
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