Scudder's American Museum Purchase Offer...

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Mortgage and Lending with Mortgage MLO #112932

 

"Unless a man enters upon the vocation intended for him by nature, 

and best suited to his peculiar genius, he cannot succeed."

- P.T. Barnum

Scudder's American Museum

John Scudder loved rare and unusual things.  In 1810, in the heart of New York City's lower eastside, Scudder's American Museum opened to the public.  The collection of oddities on display was unparalleled and impressive.  Over the years, Scudder spent over $50,000 acquiring his exhibits, but the vast majority of his objects came from gifts.

People all over the country sent in relics and rare curiosities.  Sea captains would return from sea with wonders from around the world.  And for 33 years, Scudder collected and displayed these items for the enjoyment of the public.  Unfortunately, not enough of the public came to look often enough to make the museum profitable.

Scudder, with a heavy heart, put the museum up for sale in 1843 in the hopes of keeping his collection together and on display and getting out before he was financially ruined.

Enter Phineas Taylor Barnum.  A huckster and showman, P. T. Barnum was best know at this time as the man who owned "the world's oldest person".  You see, in 1825, Barnum had "acquired" an old, arthritic slave named Joice Heth and paraded her in front of large crowds in New York and New England with the claim that she was 161 years old and George Washington's former nurse.  (After Heth died, it was proven that she was no more than 80 years old - but Barnum made a nice living with this story.)

When Barnum heard Scudder's museum was for sale, he was most anxious to own it.  In fact, he approach Scudder with a full price offer to buy.  But there was one stipulation:  Scudder would be paid from the profits, after all expenses, that Barnum could generate from running the museum.  And Scudder agreed.

Let's look at this offer for a minute, because it relates to real estate.  Barnum basically offered to take over ownership of the museum without giving Scudder a nickel up front.  Barnum could then run the museum anyway he saw fit, spend whatever revenue he wanted towards expenses, and then give Scudder his purchase price from whatever profit was left over, with no set payment schedule or timeline.  And Scudder agreed.

On the surface, Scudder looks like a fool.  He gave up his property without any real guarantee he would be paid for it.  But the lesson here is that, whenever you're in a negotiation situation, you should never assume the other side wants the same things that you do from the situation.

In this case, Barnum wanted the museum and saw it as a natural extension of his talents and experience, and he knew he could make it profitable (and that he most certainly did, and it catapulted him to world wide fame, a large fortune, and we still associate his name with "The Greatest Show on Earth). 

Scudder, on the other hand, just wanted to keep his collection together and share these treasures with the public.  With Barnum running the show, not only did his collection get seen by millions of people, it also grew and grew, reaching over 500,000 items by the time he died.  The money wasn't important to him, but he couldn't imagine seeing his collection get broken up.  So this was truly a win-win negotiation and a great example of trying to give the other side what they want while you get what you want.

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