Evening Star Newspaper, December 16, 1926, Page 12

CASH BASIS COAL * OF FARMER TODAY { Frequently the heirs have neither the City Folk Turning More and More to Charge Accounts, Reports Show. BY J. C. ROYLE. | Special Dispatch to The Star NEW YORK. December farmers of the country on a cash basis. Aul : improved roads have put them there, and the rural merchants who have | not taken this trend into considera tion are finding it reflected in the de- crease in their profits, The automo- bile has been blamed for a lot of changes in merchandising practice, but the automobile makers and users retort that the merchants who have suffered have done so because they failed to use the motor ca Reports today from the Northeast, the Southwest. the Northwest and the Southeast indicate that the agri- culturist is dealing not on credit but for cash. This is a distinct reversal of the urban trend, where more new credit accounts have been opened in the last two months than in any similar period. Long-Term Credit. Formerly rural and small city stores carried the accounts of farmers for from 6 to 9 months, and did lh“i!‘! own buying accordingly. When the | crops were harvested the farmer paid | his bills if his products netted him enough to do so. Immediately ther: after he began ¢! hlrgmg his purc again. Merchants la'd in large stocl of ‘Boods 10 megt this demand and | had to have considerable sums tied up on their shelves for months at a| time. The day of the crop settlement pariod has passed in most farming communities. This is the reason that some Midwestern and Southern com- munities have reported only such a elight decrease in purchasing power, although cotton has dropped and grain crops in some sectig & have been dis- appointing, FarmerS-are being paid on a weekly or moithly basis for dairy products, eggs, poultry and “other products handled largely by co- 16.—The ! which are subject to surtaxe: - | ces: agement, frequently makes'an oppor- tunity to sell out seem attractive. It is a device for coupling financial with- drawal with personal resignation from a business. Of course, as in the case of Dodge Bros, when control reposes in the heirs’ of the active managers, rather than in the hands of the founders, other considerations are operative. disposition nor the capacity to con- tinue active direction of the affairs of a large corporation, and, in turning the helm over to others, prefer to withdraw their cash investment, so that they can reinvest the proceeds in a diversified list .of high-grade se- curities, thus adding elements of safety to their investment position. ¥n switching trom more or less specu- lative common shares to high-grade bonds, they forege the hope of further profit in return for an assurance that their principal will be conserved in- tact. In the case of 3 wealthy individuals, a determining factor is the question of taxes. It {sgems attractive to substitute tax- exempt municipal bonds for common shares of industrial _corporations, extremely In the case of active managers, like Mr. Johnson, the sell-out gives them a graceful and attractive way to take profits. Without an arrangement With investment bankers, the dominant in- terest could not readily dispose of (& rol in the open market without serfously depressing the price of the shares. Uncommon Before War. Such sell-outs were uncommon he- fore the war. The conditions which now give rise to them were existent only in incipient form. The newer ar- rangement is made feasible because in recent years the countr veloped a broad investment & lative market. Investors have an appetite for se- curities of companies in any trade or industry of suc- benind it. ness of the country prodigiously in recent small groups, no matter how no Tonger feel capable of carrving the risks and burdens of owner: out the support of the financial pul At each sell-out, cynics snicker, sug- gesting that the public is being asked once more to hold the bag. The rec- ord of the transformation of privately owned into publicly owned companies by no means justifies such an attitude. Many companies, including May De- partment Stores, F. W. Woolworth Co., Postum Cereal, and scores of others, are mow capitalized in the open market at figures which make the prices at which they were origin- | operative associations and for fruit sent to canneries and sugar beets sent to sugar factories. Such receipts in | many instances are as large as the tncome from the so-called ‘“‘mon crop” revenue. So purchases by farm- ers are being spread throughout the gear instead of being concentrated in Bpring and Fall. Buying Just as Large. Formerly large stocks of goods on retailers’ shelves indicated prosperous conditions. Jobbers and wholesalers looked for big business in Fall and * Spring and were disappointed because recently they have not gotten it. But under present conditions, the business is largely for cash, retailers’ bills are discounted and both retailer and wholesaler have discovered that the total volume of buying is just as big. as beforef although it is not concen- trated in such narrow time limits. The real concern now of the inde- pendent retail merchant is competi- tion from chain stores and mail order houses. As one Northwesfern banker expressed it today, the stores on a cash basis seem to be doing the largest and most profitable business. The rural dry goods merchants in ‘many localities report they are being hard hit. They say the ‘automobil: has brought the city department stores within reach .of the citizens of the small cities and rural . communities and they claim ‘the recession their sales have shown is a result of this. This does not agree with the attitude of the merchants in'the suburban dis- tricts adjoining large cities. The lat- ter say they can buy the same goods practically as cheap as the city de- partment store, that their rents, labor costs and overhead are lower and that since the automobile, the bus and g0ood roads have opened their doors 10 the farm dwellers, they have bene- fited accordingly. There is a distinct tendency among suburban and rural merchants toward co-operative, purchasing. There has also been a move toward buying di- rect from manufacturers, but this has not progressed far, since the whole- salers are in a position to give prompt and satisfactory service. MEN AND MONEY By M. S. Rukeyser. (Copyright, 1926.) The famous advertising trademark depicting a dog listening at a grapho- phone to “his master’s voice” soon will be sold to the investment public @s a result of the disposal of control of the Victor Talking Machine Co. by its president and founder. The change of ownership of this company is in line with a marked trend in recent years to turn hith closed corporations into public] owned enterprises. The recent sell-outs of Dodge Brothers, the National Cash Register Co. and scores of department stores and chain stores and manufacturers of various widely advertised brands constitute notable examples of the new financial tendency. The new dis- position_is to substitute many small owners for a handful of large owners. The multimillionaires are transfer- ring all or part of their holdings in the companies they used to dominate 10 the Smiths and the Jonses. What is behind this movement? What are the motives which induce the traditional owners 10 step out? Is it a simple device to unload on an unsuspecting public? Two Types of Sell-Outs. There are two types of sell-outs. The first is where the dominant group continues in ontrol and ains A al actual investment in the to finance trance of the May Department Story into Wall Street in 1910 was an e example of this type. Those who pio- neered in this new type of security purchase and held on have shared richly in the growth of this chain of department stor second type out involves the complete withdrawal of th nant group from the busine Dodge Brothers transaction example of this widows withdrew the control of the definitely to Clarence Dillon of Dillon, Read & Co., who chose new chief executives 1o direct the old organiza- tion. The prospective change of own p of the Victor Talking Machine also of this kind. Eldridge . Johnson, president, who has been jdentificd with the business since it was_established, in_announcing th he had given Wall Street banker: an option to buy control fc share explained that he wis bo relicved of business cares on ac- count of the condition of his health. The bankers intend to retain those who were associated with Mr. John- son in the management of the com pany. In withdrawing from management Mr. Jobnson evi » preferred to get $28,175,000 in cash to keeping his stock in the company. ally offered by their sponsors seem | exceedingly cheap. My conclusion is simply that the| shares of each new proposition which | comes before the public must be inde- pendently an: d in the light of the special facts surrounding them. The history of sell-outs under the auspices of reputable investment bankers by no means warrants a general attitude of suspicion toward such operation: In practice, the small investor a: matter of fact shows a preference fi the securities of companies which well known to him. Popularity the fore is an asset in marketing s curities, though in the actual science of finance it has less bearing on the worth of securities than underlying assets, earning power, and prospects THE BUSINESS OF GETTING 21 AHEAD. e THE EVENING STAR, WASHINGTON, D. men have been - self‘conscious about joining trade associations. Sophisticated critics have speken harshly at times about the doings of Rotary and Kiwanis clubs, chambers of commerce and trade bodies. And vet, in spite of the sneering, trade bodies have developed rapidly, and are now probably more useful to business than ever before. Secretary Hoover has taken the leadership in stimulating and co-ordi- nating the activities of trade associa- tions. Recent Supreme Court decisions have established the legal right business men to interchange infc tion. There is today probably a gr er disposition business tices to competito . The new spirit of co-operation makes for efficiency and gives each factor n opportunity to adopt the best prac- tices of the Trade a not without cant. A profe are, of course, elements of bunk and onal class of trade developed a. code of it art from the ventions a_dozen dull |ll ches are de- livered before one interesting one is made. The chief value of attending such meetings, however, is not in con- suming oratory, but in making infor- mal business contacts. . Source of Information. The trade association is a source of information and, though each sit- uation must be judged in the light of the special facts, it usually pays for the' business man to join up. Only an exceptional individ like Henry Ford can afford to play a lone hand. He is opposed in principle to joining. He prefers to be the leader, and to be free to act without the e nts of afliliations of trade as- ations. He is the only impor ant automobile manufacturer who does not belong to the National Au- tomobile Chamber of Commerce. In Detroit he plays no partdn the ac tivities of the hoard of But rd can hardly be used as a mode! for the average man. The ec- centric genius of Dearborn has suc- ceeded in spite of violating many of the conventional rules of business. In the newer campaign for greater stability in business the trade asso- ation plays a useful part by gather- tistics about stocks on hand, on and other factors. The concern has more to gain lvv pnluclpdllng in such joint effort than in remaining aloof, yet it is well to remember that such activities are in a sense academic and constitute no real substitute for the need of Careful Black and Tan Calf and Patent Leather | Men's Imported Wool Hose—2.00 to 2 Arthur Burt C Joining Trade Associations. Since Sinclair TLewis wrote hi novel, ‘/Babbitt, sensitive ‘busine: PENNSYLVANIA AVENUE AT SEVENTH & GIFT OPPORTUNITY! Special Presentation of Men’s Fiber Mufflers—Monogrammed INTERWOV boxed for Christmas pairs, $1; Wool, 4 pairs, $1. aney wl)le- 50¢ 1o $1 the probably not wanting to keep all his eggs in one basket. Such a motive to take out a ea investment. which the owner wi ,v longer supervise through active JLOVES—Men’s Imported * Ta \\..|ng Gloves, Adler make, $2.5 High- de e , lined Rabbit skin, special at First Floor—Saks commerce. | Washington perpetually planning of futire ac- | tivities by individual business men.| Every important industry in the | country has its own trade association and every sizable @ity its chamber of commerce. The activities of hun- | dreds of trade bodies are co-ordi- | nated by a national chamber and also by the friendly co-operation ‘of the United States Department of Commerce. The small business man frequently neglects the opportunity to get in- formation from Government sources and trade bodies which would be of tangible benefit to him in conduct- ing his own enterprise. Big business to the value of full current s and has established for guiding management basic facts about underlying conditions. BILLION TURNED OVER. Huge Transactions Fail to Disturb Wall Street Equilibrium. NEW YORK, December 16 (#).—A billion-doflar turnover .of funds took place in Wall Street yesterday without disturbing the equilibrium of any of the financial markets, R Government _operations, involving the payment of $450,000,000 maturing Treasury certificates, the marketing of a new $200,000,000 issue and the | collectingz, of taxes accounted for large part of the total. Many mi lions more were distributed in the form of interest and dividend pay. ments. Billion-dollar turnovers on the quar. terly settlement dates have hecome so common that financial experts be- lieve only an unexpected money strin- gency would interrupt the smooth flow of funds. COT’I:(;N GOODS ACTIVE. NEW YORK, December 16 (Spey —Cotton active to stead. ere_unchanged d 7%c for 68x 72s. Raw silk unchanged. RU'BBER HIGKEB, NEW YORK, December 16 (Special). 1de rubber, smoked ribbed sheets, advanced %c at today’'s noon quota- tion of 38c. This compares with 41c a month ago and 96c a year ago. pervision —of the specifications upon which our Men’s Shoes are made result in—not only shapes of exceptional char- acter—but quality that is quite unusual for 10.00 1343 F Street London L HE unusual value makes this decidedly an “opportunity.” For the featured price is ex- tremely low for rich Knitted Fiber Mufflers of this standard. The show- ing offers a wide range of handsome black-and- white effects, finished with black and - white fringe. In every sense a personal gift—with in- dividual monograms WOVEN IN. (First Floor.)* N E € K W EAR—Exquisite Imported a n d Domesti Neckwear, in highly indivi ual colorings and pattern: Priced at 65¢ to $5—in packages. umllnuf\d quiet um]l ‘mmmgqm; C., Dmrmmr@ v A ‘white set. in A la ‘white mounti; 17 je size o] x”-‘ M AWI Set fork butt i Bi THURSDAY, mond set in an 18-kt. 50K Pay 50c a Week anteed case. model—912 movement, 12- = spoons, llwuu.mmunln Genuine month. DECEMBER 16, 1928. (P FRANC JEWELRY CO., 627 Tth ST. N.W. C——} I please. not a minute to lose. row, surely not later than Friday, and select all the Christmas gifts at one time. A small deposit will reserve your s@lection, and you can pay the balance starting in January out of your income. added for this liberal credit. 8 Gifts for Every One—Easiest Terms Gifts for Mother, Gifts for Dad, gifts for “Her” Come in —gifts for “Him”—gifts for the younger genera- tion — complete in assortment — and priced to There remain just 7 shop, g days left— tonight, or tomor- Nothing Special Values for' Gift Jewelry Seekers 3.STONE DIAMOND 399 50c a Week Scintillating Diamond 749 $1 a Week Charining — fiery blue- diamond, beautifully an. 18-kt. solid white gold hand-pierced mount- Diamond 2015 50c a Week dia- olid hand-pierced rge blue-whit, gold ng. Hamilton Watch 00 jewels—25-year guar: New thin pen face. Other models up to $150 “HINIHNH‘!‘ e N”[" il Silver Plate: 26 Pieces in Tray $3' 425 De Luxe stainless steel hlades hollow handles. consists of 6 knives, 6 s, 6 teaspoons, 6 table- sugar shell and er_knife. 50c a Week U s 3 genuine full-cut Llue- white diamonds of unusual fire, set in an 18-kt. solid gold mounting. 15-Jewel 14-kt. white gold reinforced -case, guaran- teed movement, hand en- graved. Just one of the many models. ‘*"‘T“*‘""fifi! w 50c a Week 17 jewels—20.year guar anteed ment. ard timepiece. Other Models up to $75 Special Value Men’s Strap Watch 135 50c a Week A fine, guaranteed strap watch, containing a guar-- anteed movement. Strons Meather strap. One of our biggest values. 2] !s h n“ case, adjusted move A reliable and stand h 20 Pay Ofily 50¢ a Week Cased in 3.piece heavy case, genuine leather strap. Reliable Elgin 3 to 20 Pieces $1350 © $150 Small Payments to Suit In amber, ivory white or blue. Soi ded with colored h Each set nicely ¢ are sure to find meet your purse. pink, e stud- Iliants. sed. You set to movement Initial Ring s13-_L<z p 50c a Week 14-kt. ing, with initial. mount Just the solid gold gift for the men. Pay 50c a Week 25 jewel movement, r guaranteed white gold- Wonderful l' | ) WATCH 516 50c a Week watch at a low nteed by n Factory. ! ve: filled ca timekeeper. [llllu““ , il iy A fine pr Frane g .Seth Thomas Clocks 132 50c a Week Mahogany finished, 17 inch 1alf hour 1l gor Open Every Night Until Christmas. Shop Tonight! rhh 5 "'* rlfl‘"lr I Ladies’ or Gents’ rthstone Rings 55 Up Pay 50c a Week ot any birth Fi raternal Rings Solid & For 510 we 50c aw——_] 1 - lodge or orxanization. ME:G@ T (= , D’x(] W e u@m@m{