MARKETPLACE
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NEWSLETTER
PAGE 13, AUGUST 30. 1974
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Many, many times, in fact, ever since its inception, "Marketplace", to justify its
reason why operators should adopt "2-Bits Play", reported on the continuing loss of the
dollar's purchasing power value. Not too many months ago, "Marketplace" reported that
today's dollar had fallen over 100'% in value. Which meant, a.s was explained at the time,
that it takes more than 2 of today's dollars to buy what $1 of 1939 used to buy.
As explained here many times, 1939 is the basic valuation year of the nation's money
economists. Because 1939 was the year when the American dollar fell to 100 cents in pur-
chasing power value. Based on the 1939 dollar, and due to consistent creeping inflation
of over the pa.st 20 years, which turned into galloping inflation and then into this
year's roaring wild inflation, today's dollar has fallen in value to the point where it
takes about $2.50 to equal the purchasing power value of $1 of 1939. Government buro-
crats featuring 1967 charts as a basis for calculations can only be politically inspired.
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Now a new study has been released by The Conference Boa.rd, an independent New York
research firm, which not only bears out the reports made here but, according to The Con-
ference Board, it takes more than $2 today to equal the purchasing power value of $1
of 1949 which, as can be easily ascertained, is 10 years later than the basic 1939 dol-
lar. For example, The Conference Board has published a table that shows a person with
$5,000 income in 1949 would require the equivalent of $10,750 income in 1974. Similarly
income of $10,000 in 1949 would require $21,080 today. And to equal an income of $25,000
in 1 49 would require $54,300 in '74.
In short, according to The Conference Board, it takes a.bout $2.15 today to equal
what $1 bought in 1949. That, in itself, if you care to spend a few moments doing some
arithmetic, will give you an idea of what today's 2-Bits is actually worth in purchas-
ing power value. Will completely do away with dime play. Forget the nickel, like today's
penny it, too, has become a tax token.
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Why discuss the dollar that was? After all, rough as business is and as roaring wild
as inflation is, 1974 is the important, perhaps even the crucial year, for all concerned.
Regardless of "2-Bits Play" and regardless of double 25¢ chutes, speedier play action,
2 and 4 player games, the fact remains that due to higher and higher prices for all new
equip't, continually increasing taxation and zooming overhead expenses, more actual
income is required, in fact, more than double the income is required, to just equal the
purchasing power of the fewer dollars opera.tors earned in 1949.
The dollar that was may never again be the dollar to come but, operators can bring
earnings to a more satisfactory level by adopting new and better operating procedure
to assure greater profitability. Some are turning back to minimum guarantees and various
other methods. The fa.ct remains, to get closer to the dollar that was, operators must
arrange for a $10 "service charge" off the top of the gross collection from all of their
machines and split the be.lance of the collection on the more equitable 70/ 30 basis.
(Do you have a better method?)