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Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
VOL. LXVIH. No. 10
Published Every Saturday by Edward Lyman Bill, Inc., at 373 4th Ave., New York.
Mar. 8, 1919
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The New War Tax and the Piano Trade
T
H E new War Revenue bill became a law on February 25, carrying with it provisions calling for the
payment of an excise tax of five per cent, on pianos, organs (other than pipe organs), piano-players,
graphophones, phonographs, talking machines, music boxes, and records used in connection with any
musical instrument, piano-player, graphophone, phonograph, or talking machine.
With the bill now a law, and with most of its provisions, especially those covering excise taxes, being
effective immediately, the next thought is to prepare to meet the excise taxes in addition to the income and
excess profit taxes that naturally face the members of the trade. Uncle Sam is a close collector. There are
usually no four, eight or twelve months' terms in his business, although he has fortunately provided for the
payment of income taxes in quarterly instalments, but beyond that point there is no extension of terms, no renew-
ing of notes.
The excise tax is placed on the manufacturer's selling price, and of course it is the work of the manu-
facturer to make monthly reports as provided by law, and naturally to pay to the Government the amount of
taxes called for in special reports. It means that the manufacturer must pay the taxes in cash, and must,
therefore, get cash from the dealer to cover that item. The details will probably be worked out in the near
future, conferences between members of the trade and Internal Revenue officials now being under way.
Although the tax is a tax based on the manufacturer's price, the retailer is not in a position to let the matter
rest at that, or to forget that the tax on musical instruments, as is the case with all such taxes, will be passed on
to the ultimate consumer, to whom, through the dealer, the manufacturer will look for the cash to meet
his obligations.
A five per cent, tax on even the wholesale price of pianos is likely in some cases to represent the difference
between profit and loss and it will be up to the retail trade, therefore, to continue the practice of the observance
of short terms both in buying and selling, that the cash necessary to meet Governmental and other obligations
be available. It is just another instance which proves that the bars against loose business methods in the retail
trade cannot and must not be lowered.
Piano prices are not going to drop for a long time to come, despite the advertised statements of some
dealers, who sacrifice truth to sensationalism in their efforts to build up trade volume. The whole matter hinges
on the labor question—not labor unrest, as some imagine—but the wages of labor. These have been estab-
lished at a high point, and it has already been discovered that it is much-easier to increase wages than it is to
attempt to bring them down to anything approximating a pre-war basis. It is not alone the labor in piano
factories that costs more, but the labor concerned in producing the supplies that enter into the making of the
instrument is also being paid a higher wage than ever before.
,
From the time the tree for cases or sounding boards is felled in the forest, or the rough ore for the making
of strings, plates and hardware is taken from the mine, the labor factor enters and continues right through to
the time the finished instrument is put into the home of the customer. Increased cost of timber and ore handling,
therefore, makes itself felt right along the line, and added to this are the wage increases for those engaged in the
work of manufacturing the supplies as well as those employed in turning out finished instruments, in whose
perfection highly skilled workmen are engaged.
All these higher costs mean a heavier volume of invested capital upon which definite returns must be made
if the industry is to prosper or even exist, and it lies with the retailer to provide such returns through proper
methods of handling his business. Just as the manufacturing branch of the industry depends upon the
selling" branch to keep the factories busy, so does the selling branch depend upon the factory to supply the goods
(Continued
on page
5)
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