August, 1937
AUTOMATIC AGE
140
inefficient management, dishonesty and
fraud, insufficient capital and the de
pression were the outstanding causes
of failure.
Approximately 70 per cent of all
commercial failures occur in the re
tail-trade group, according to one mer
cantile agency which records business
failure statistics. M a n u fa c tu re rs ,
wholesalers, and other traders form
only a small portion of the total num
ber. Over half of all retail failures
take place among food, clothing and
furniture stores.
Poor Retailing Methods
An elimination of the evils existing
in retailing would materially reduce
the tremendous losses whch arise as
a consequence of failure. Huge sav
ings and widespread benefits should
result from a stabilization of all re
tail units, particularly among those
where the risks appear to be most
hazardous and the susceptibility to
failure consequently greater.
In areas and in trades where con
centrated studies and efforts have
been made to determine and eliminate
causes of failure, results have been
most encouraging. Bankruptcies have
decreased, and profits to the surviving
have increased beyond expectations.
Small Enterprises Affected
The vast majority of failed concerns
are small enterprises employing rela
tively little capital, and though listed
by mercantile agencies, are given mod
erate or no credit rating. At least
95 per cent of all commercial failures
have very moderate or no credit rat
ings prior to solvency. One authority
states that 87 per cent of all commer
cial failures employed $5,000 or less
capital in their enterprises. Efforts
to reduce failures and losses must,
therefore, evolve from a careful study
and analysis of the small business.
Some of the significant facts brought
out by the Boston study follow:
Over 68 per cent of the owners or
managers had not completed a high-
school education.
Over 51 per cent of the bankrupt
business had no accounting records.
A consideration of all direct and re
lated evidence revealed that the ac
counting records of an additional 28
per cent of the bankrupt concerns
International Nut Co.
SALTERS
OF A LL
K IN D S
OF
NUT MEATS
Write for prices and samples
308 W. Erie St.
Chicago, 111.
were inadequate for the needs of the
business.
The open-credit losses of the bank
rupt establishments for the year prior
to failure amounted to 5.6 per cent
of open-credit sales, which is approxi
mately nine times greater than the
bad-debt losses of active concerns.
Lack of Experience
Prior to ownership of their con
cerns, nearly half of the bankrupts
were engaged in occupations which
did not provide any experience in the
business they entered.
Only 5 per cent of the 564 bank
rupts reporting on the subject used
credit bureaus.
Approximately 53 per cent of the
owners had difficulty in paying credit
ors from seven months to two years
prior to their bankruptcy.
In 72 per cent of the cases the
amount of capital invested by the
owners and creditors in the bankrupt
enterprises at the date of their or
ganization amounted to only $5,000
or less. Included in this group are
124 concerns in which $55 or less was
invested by the owner and his credit
ors at the date of organization.
Scheduled assets (including real es
tate) of the 570 bankrupt concerns
amounted to slighly less than 18 per
cent of scheduled liabilities (including
collateral and real estate loan). In
other words, if assets were sold at the
value upon them in the bankruptcy
petitions, and if there were no costs
of administration, ci*editors would re
ceive only 18 cents on the dollar for
their claims.
Small Returns for Sales
The exact amount realized from a
bankruptcy sale is usually much less
than the total value of the assets
scheduled in the bankruptcy petition,
and the cost of administration paid
from the proceeds of the sale are
usually sufficiently high to prevent the
creditors from receiving more than
insignificant amounts for their claims.
Failures of all types and losses have
been increasing rapidly. Commercial
failures (exclusive of banks) have in
creased, according to R. G. Dun &
Co’s., figures, from 8,881 in 1920 and
28,285 in 1931, an increase of over
200 per cent. Liabilities in excess of
assets (scheduled) have increased
from $99,618,000 in 1920 to $301,369,
000 in 1931, an increase of over 200
per cent.
© In ternational A rc a d e M useum
Mills Ball Teams Make
Outstanding Record
Some of the teams in the Mills
Novelty Company’s softball league are
going great guns these days, particu
larly the Production and C.S.M. clubs,
who have battled their way into the
quarter-finals of The Chicago Ameri
can Soft-Ball Tournament.
So far this season no outside team
has beaten a Mills Novelty team.
“This is all the more impressive,” says
Grant Shay, “when it is considered
that we have always made it a policy
to challenge the best teams available.
Just recently, for instance, we gave
the Erie Railroad outfit quite a trim
ming.”
Two picked teams have been select
ed from the 12 clubs which make up
the Mills League to play a feature
game at the company’s annual picnic,
to be held this year at the Mills Stad
ium August 14. Everyone at the plant
is reported to be becoming quite ex
cited over the “all-star” game and it
should be a rare dish for those who
like their soft-ball served up red hot.
The picnic, by the way, will be
attended by approximately 6,000 per
sons.
All the employees and their
families, together with the various
friends of the company, are expected
to be on hand. Officials in charge of
the affair are reported to be bending
every effort to make it a huge success.
They announced that all food and re
freshments will be free, and that a
varied program is being planned to
assure everyone a real honest-to-good-
ness good time.
NEW PATENTS
(Continued from page 129)
ersed said field, means responsive to
movement of counters on the playing
field for initiating operation of the
automatic reprojection means, and
means for actuating said reprojection
means to reproject the counter which
initiates operation thereof.
Claim 3. The combination with a
game board having a ball receiving
chamber, and electro-magnetic means
operatively associated with said cham
ber and energized by a ball entering
into the same for automatically eject
ing the ball therefrom. Patented by
Kenneth C. Shyvers, Chicago, Illinois.
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