Cig Smugglings Clip
State Take in Po.
108
FOR
OC TOBER
1947
PHILADELP HIA - Smuggling of un-
taxed cigarettes into Pennsylvania from
adjoining states, particularly from
ew
Jersey by way of the Delaware River bridge
here, is reported on the downgrade and it
is expected to reach an insignificant volume
when the last of city-shore traffic is over
for the season in October-
R W_ Beachy, deputy secretary of Reve-
nue and head of the Bureau of Collections,
said that transportation of untaxed cigar-
ettes across the S tate line has been "cut
down considerably" by initial seizures in
the Philadelphia area_
State police have been maintaining a
vigilant guard to stop the smuggling,
Beachy said.
Revenue from the new cigarette tax has
been "a little off" expectations, offi cials
admitted, but they believe it will soon yield
more than the budget estimate of $3,250,000
a month .
Both the increased tax and the bootleg-
ging have been a bitter pill for vending
machine operators to swallow. Operators
decided not to pass on the entire two-cent
in crease to consumers but instead raised
the price only one cent to 20 cents. This
brought machine-sold cigarettes on par for
the first time with the price of over-the-
counter sales of cigarettes, and did result
in some increase in sales. But most op-
erators have sought to cushion the penny
cut they have assumed by working out ar-
rangements with location own.,ers to share
the extra burden.
C-B Plant to be
Set Up in Italy
NEW YORK- Mar io Caruso, head of
C-Eight Liibo ratories, makers of electric
cigarette vendors, is now in Italy, where he
will explore the possibility of setting up a
coin machine manufacturing program.
Scheme centers around a hardware fac-
tory located in Naples, in which Caruso ha s
a co ntrolling interest. Tentative plans call
for dies and materials to be shipped from
thi s country to the factory in the fre e port
of Naples, where the cigarette vending ma-
chines would be fabricated and exported,
exemp t from Italian customs duties. Fi-
nancing to get the factory back into full
operation is being sought from th e U. S.
.Export-Import Bank, and the vendors would
be sold in Western European and Latin-
American markets.
Before the war, Europe was a major field
for cigarette vendors, with manufacture of
these coin devices centered in England ,
Germany, and Denmark. Machin es, for the
most part, were often sold through cigar-
ette manufacturers directly to location
owners and were used primarily as an
after-closing-hours sales tool. Shopkeepers,
prior to shuttering for the evening, would
place the vendors outside their stores to
serve night trade or Sunday smokers.
The war and the consequent tobacco
shortage killed off most European cigarette
vending. Efforts to revive use of the ma-
chines have been stymied either by infla-
tion, which rendered coins almost worth-
less; or by high taxes on tobacco, such as in
England, where cigarettes, retailing at a
half crown (fifty cents) per pack, make au-
toma tic merchandising impractical.
CMA Expandin9 and
Adds State Worker
BOSTON-The Cigarette Merchandisers
Assn. of Massachusetts is ex tending its ac-
tivities according to plans adopted earlier
in the year. L ucius F . Foster, until re-
cently deputy commissioner of the Civilian
Production Administration in Washi ngton,
has joined the staff of th e Guild Associates
here.
Walter R. Guild, manager of CMA, an-
nounces that Foster will devote his full
time to the cigarette organization and that
he is already in the field getting acquainted
with members. Foster is an experienced
trade association worker, formerly in the
paper industry field. His background also
in cludes sales management work.
Foster is trying to see every cigarette
operator in the state personally and enlist
his support of CMA. He is also getting
their views on questions relating to com-
missions, locations, prices, availabili ty of
mach ines and a number of other matters.
Washington Seeks New
Industrial Firms
SEATTLE - Washington State officials
are seeking new industrial firms and plants
to furnish work for its increased popula-
tion. Industrial activity reached a high
level during the war, and now many re-
adjustments are made necessary.
A recent survey of employment in the
State shows that about 25,000 people were
dropped by shipyards and the federal gov-
ernment in the last year, and that indus-
tries over the State were able to absorb
about 20,000 of them.
Compared with pre-war period, the State
has p:ained about 22 per cent in population
and employment in plants and factories is
up about 40 per cent.
Business leaders say that top employ-
ment levels have been reached unless new
industri es can be brought to the State. New
power developments mean cheap power for
new industries.
Washington is one of the four states that
lice nse gaming devi ces as well as other
amusement machines.
Stork Visits PX-er's Wif e
SAN FRANCISCO- Wh e n Carl Bruhn's
wife recently presented him with an infant
girl, the popular PX cigarette operator
quipp ed: "Thi s is the best news sin ce my
last order of PX machines was filled. "
"Clear Windows" Win
Better Understanding
A keen, analytical insight of why some
vending machine men fall by the wayside
and others expand and progress is provided
by Robert Z. Greene, president of N.A.M.A.,
who is one of the pioneers in the cigarette
vending industry.
"The facts in the following story," Greene
related, "can be applied to any branch of
the vending business, but it so happens tbat
this story concerns cigarette vendors. We'll
call one man Jack and the other Bill, and
I'm going to take you behind the scenes and
explore the operations of each.
"The windows of Jack's establishment are
painted black so as not to be visible from
the street. Behind the window is a perfect
picture of disorganization. Jack says he
can't afford to hire office help so he does the
work himself. He can't afford to bire repair
men a t $50 a week so he tries to do all his
own repairs. And he is completely bogged
down with details. Records are in a mess.
Machines on location are sadly in need of
repairs_ He just doesn't have time to take
care of everything promptly, he says.
"J ack started business in its early stages
and has therefore built up a nice route. But
he is steadily losing locations_ He attrib-
utes this to competition which he ascribes
to chiseling and commission cutting. He
doesn't build proprietor good-will-he just
doesn't have time. He constantly complains
that his locations are always demanding
new machines, that cigarette vending is a
tough business. He bel ieves all help is dis-
honest and inefficient, and the few men he
does hire are looked upon with disfavor and
suspicion. He joins no civic organizations,
attends no operator meetings. He believes
that au tomatic merchandising has reached
its saturation point and is a dying proposi-
t ion.
"Bill started operating in 1939. His estab-
lishment is housed in an unpretentious-
though neat- building. Because he intends
his business to grow, he delegates responsi-
bility to others. He realizes that automatic
merchandising is competitive - but what
business isn't? He believes in countering
chiseling competition with location loyalty.
The results of Bill's policy were apparent
during the war when he had to discontinue
operating for almost a year because of the
cigarette shortage. After supplies became
more plentiful, all his locations were happy
to come ba ck to the fold.
" Bill sends hi s mechani cs to the factory
to find out the latest methods of servicing.
H e pays his employees well, using the in-
centive plan to bolster efficiency. He is
proud of his business and doesn' t hide in
the sand like an ostrich; there is no black
(See CLEAR WINDOWS, Page 110 )