ROUGH DRAFT 8/13/52 Mr. Klute, Gentlemen: When Dean Buehler approached me on behalf of the Business School Club to invite me to speak to you today, his sales technique left something to be desired. my He did not tempt me with appeals to my personal vanity,/sense of duty to our company. The one inducement that he held out to me was that of a free lunch. Now in the heavy construction industry, Dean is what is known as a cost engineer, and it is their practice to break all labor costs down into per man hours. Now I understand that the luncheon would have cost me around $1.50. Now if we figure that I talk for 1/2 an hour and that I spent 2-1/2 hours in worry and preparation, we arrive at a total of 3 man-hours or 50 per man/hour for the job. On that basis, Dean has evaluated my services as being worth about $86.67 a month, which is about twice what the average engineer thinks of the company treasurer. If Dean had been less of an engineer and more of a psychologist, he would have recognized that few men can resist the sound of their own voice, and even fewer would decline the pleasure of addressing a group with which they have been closely associated by background. I have been asked today to talk about financing a construction company. What is a construction company? Essentially, it is money plus men with know-how to do construction work. The money is necessary to mobilize the men, transport them to the site of the work, buy them the tools to do the job, if necessary build them a town in which to live, a power plant, a sawmill, a series of access roads, an office, a warehouse, a school, a hospital, buy inventories, and to finance the lag between the time that you pay out the money on work performed and the time when you are paid for that work. Finally, the money is necessary to hold together between jobs the key men and equipment necessary to obtain and perform the next job. Each job is a project, and at any given time a construction company is the sum total of the projects that it has underway. Some of these are just starting, some are ending, the rest are in between.