T h e A u t o m a t ic A ce
93
A T YP IC A L CASE OF ROTTEN
PROMOTION
From the St. Louis Post-Dispatch
I f “ Sunny Jim” pie and sandwich
vending machines had never been
rifled, if they had not had to digest
80 pounds of slugs in the eight
months they were operated in St.
Louis, if the topheavy overhead had
been reduced to a minimum and the
drivers who filled the machines and
Collected receipts had been carefully
checked up against “ knocking down,”
would the defunct Automat Sales
Company have operated at a profit?
“ I f the company had received a
dime for every package put in every
machine every day, the company still
would have lost money,” repliea
Walter L. Prack of Webster Groves,
former auditor of the bankrupt, at the
first hearing recently before R ef
eree Coles. “ I wrote Hool to that
effect”
Description of Hool
Prack had agreed to Referee Coles’
description of James A. Hool as
“ something better than an officer,”
and said that he “bossed” officers o f
the service company and also seemed
to direct the Automat Sales Company.
That concern is a bankrupt, too, with
liabilities estimated by the receiver at
$300,000, and assets consisting prin
cipally of a $01,955 claim against its
fellow-bankrupt, Hool, with James
A. Readey, seeretary-treasurer, was a
plaintiff in the petition against the
service company, therein describing
himself as sales manager,
“ Hool knew it was impossible for
the machines to make a profit and
still continued to sell the machines to
the public?” asked the Referee,
"Y es.”
_
*
“ And the worse the business be
came, the higher the price o f the ma
chine for the unfortunate buyer?”
Prack agreed that was so. He had
said the price began at $125 a ma
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chine and increased to $200 before
the failure last month.
Cites Other Cities
An attorney fo r one o f the bank
rupts asked with some heat if Prack
did not know that similar machines,
with perhaps a little better manage
ment, were making a good profit n
Chicago, Detroit and New York,
Prack did not. “ The cost o f food
products was more than they took in
here,” he explained simply.
Scientific, psychologized, punchful
salesmanship, backed by a pamphlet,
“ Turning Dimes Into Dollars,” had
sold 5000 machines in St. Louis— of
which about half were not delivered
— but it was just this that killed the
goose that laid the golden egg, it ap
peared from Prack’s testimony.
He said that his first study o f the
-accounts disclosed that some of tha
machines, due to poor location, sold
only two or three sandwiches or two
or three pies a day, at the expense
o f the 12 or 13 others. Referee Coles
asked if there was anything in the
lease to prevent shifting the machines
to a better location. “ No,” Prack an
swered, “ but the service company had
too many machines to place. They
were coming in at the rate of 200 or
300 a week.” So, he indicated, the
new ones were placed and the old
ones were left where they were, loss
or no loss.
Sales Organization Moved
When the situation in St. Louis be
came uncomfortable, the sales organ
ization moved to “ new and fairer
fields” in Detroit. The service con
cern, Prack said, was losing $600 or
$700 a day. The sales concern’s claim
against the service company was for
weekly advances, paid by check o f
“James A. Hool, vice-president,” to
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