Music Trade Review

Issue: 1919 Vol. 68 N. 10

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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
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5)
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4
THE
MUSIC
TRADE
REVIEW
PUBLISHED BY EDWARD LYMAN BILL, Inc.
President and Treasurer, C. L. Bill, 373 Fourth Ave., New York; Vice-President,
B. Spillane. 373 Fourth Aye., New York; Second Vice-President, Raymond Bill, 373
{ . 'ourth
Ave., New York; Assistant Treasurer, Wm. A. Low.
J. B. SPILLANE, Editor
RAYMOND BILL, Associate Editor
Executive and Reportorial Staff:
B. BBITTAIN WILSON, CARLETON CHACE, L. M. ROBINSON, WILSON D. BUSH, V. D. WALSH,
WM. BRAID WHITE (Technical Editor), E. B. MUNCH, A. J. NICKLIN, L. E. BOWERS
BOSTON OFFICE:
JOHN H. WILSON, 324 Washington St.
CHICAGO OFFICE:
E. P. VAN HARLINGEN, Republic Building,
Telephone, Main 6950.
209 So. State St. Telephone, Wabash 5774.
LONDON, ENGLAND: 1 Gresham Buildings, Basinghall St., D. C.
NEWS SERVICE IS SUPPLIED WEEKLY BY OUR CORRESPONDENTS
LOCATED IN THE LEADING CITIES THROUGHOUT AMERICA.
Published Every Saturday at 373 Fourth Avenue, New York
Entered as second-class matter September 10, 1892, at the post office at New York, N. Y.,
under the Act of March 3, 1879.
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ADVERTISEMENTS, $4.50 per inch, single column, per insertion. On quarterly or
yearly contracts a special discount is allowed. Advertising pages, $130.
REMITTANCESi in other than currency forms, should be made payable to Edward
Lyman Bill, Inc.
Departments conducted by an expert wherein all ques-
P19V01* PlsinA itnil
tions of a technical nature relating to the tuning,
^gulating and repairing of pianos and player-pianos
I W h l a l I V k C p a r l l l i e i l l S are
dealt with, will be found in another section of
this paper. We also publish a number of reliable technical works, information concerning
which will be cheerfully given upon request.
Exposition Honors Won by The Review
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Vol. LXVIII
NEW YORK, MARCH 8, 1919
No. 10
EDITORIAL 1
J
UST before George W. Pound, general counsel of the Music In-
dustries Chamber of Commerce, was scheduled to start a coast-
to-coast speaking tour in Pittsburgh, on Monday of this week, he
was called back to his office from Buffalo, where he had been pre-
paring for the trip, in order to take up with the authorities in Wash-
ington several problems of vital interest to the piano trade relative
to the new War Revenue law. The result is that the coast-to-coast
trip has been postponed for an indefinite period, until the Revenue
law problems can be cleared up.
It will, of course, mean keen disappointment for those piano
merchants who had planned for the visit of Mr. Pound within a
few days, and who had completed arrangements for the big meetings
and dinners for the purpose of bringing the trade together to hear
Mr. Pound talk, but it must be remembered that the trip was called
off temporarily in order that Mr. Pound might render service of
immediate necessity and of prime importance to the trade as a whole,
the story of which appears in the news columns of The Review
this week.
It is likely that Mr. Pound will not be able to start on his
speaking tour for at least a fortnight, and it will, therefore, be neces-
sary to prepare a new itinerary, which will be announced in due time,
so that new arrangements can be made by local chairmen, or arrange-
ments, already started, completed. The retailers can rest secure in
the thought that any results obtained through Mr. Pound's visit to
Washington will redound to the benefit of the trade as a whole.
ROHIBITION and its effect on the piano industry was the sub-
P
ject of a very interesting analysis in last week's Review by W. S.
Gannon, the well-known piano man, who has made a very careful
investigation of this subject from a purely economic standpoint.
He sought information from dealers in States which recently -went
'"dry," and despite the fact that business men generally are opposed
to prohibition, yet the conclusions arrived at by the majority of
dealers who made reports are substantially to the effect that only a
temporary disarrangement followed the inauguration of prohibition,
REVIEW
MARCH 8, 1919
and that the instalment business generally was greatly benefited by
the change. This article by Mr. Gannon should be carefully read by
dealers operating in so-called "wet" territory, who are solicitous as
to how business will be affected, favorably or unfavorably, by this
new and very radical amendment to the Constitution.
A prominent credit man of a Western piano manufacturing
organization, in speaking with The Review this week, stated that
so far as he had been able to secure reports and carefully review
them they indicated that where prohibition prevails credit risks, so
far as retail sales were concerned, were greatly improved. He made
the point that the abolition of the liquor traffic from any community
improves the general economic condition of the community to such
an extent that credit risks in every line of industry are materially
benefited. His reports indicate, as do Mr. Gannon's, that dealers
found that instalment obligations were met more readily and that
larger cash payments were more frequent in the States that became
"dry"' than as compared with similar conditions when the State
permitted traffic in liquor.
These facts are presented not because of any special views pro
or con on the matter of prohibition, but simply as information to the
trade on a subject which is one of paramount importance these days.
HE suggestion made by Cabinet members and others at a meet-
T
ing in Washington recently to the effect that the CGovernment
appoint a special commission empowered to study post-war condi-
tions and endeavor to fix prices on materials, particularly raw
materials, that would encourage manufacturers to stock up on sup-
plies and resume production on a normal, or close to normal, basis
is worthy of deep consideration. It is believed that if such a com-
mission could accomplish the work laid out for it the result would be
the solving of many of the problems that face industry today, par-
ticularly that of unemployment, a condition which would be over-
come, it is believed, if production was brought up to a normal basis.
There is no question but that the majority of manufacturers
have, since the end of the war, gone ahead on a hand-to-mouth basis.
They have, it is true, endeavored to resume normal production, but
at the same time have tried to protect themselves from any sudden
drop in market prices by buying materials only in such quantities
as were actually needed. The result has been a feeling of uncer-
tainty that has served to hinder production materially.
There will, of course, be some question as to the advisability of
encouraging the Government to enter upon any extensive price-
fixing campaign which might, by a sudden change of conditions,
prove a burden where it was intended to act as a help to industry.
But certainly fixed prices on raw materials within limitations should
do much to stimulate manufacturers and enable them to proceed
with their work at full speed, and with the confidence that for a cer-
tain period, at least, they will be protected from any sudden loss
through dropping markets.
HAT "a well-defined attempt' is being made to create in the
T
minds of the public and of the business men of the country an
impression that "an unheard-of cessation of industry' will take place
in the near future was revealed at a joint meeting of the commit-
tee on adjustments after the war of the National Association of
Manufacturers and representatives of the State organizations of the
National Council for Industrial Defense, held at the Hotel Astor
recently, at which resolutions were adopted to the effect that the
country, on the contrary, is "'standing on the threshold of unprece-
dented business expansion," due to the depleted stocks of stores and
factories all over the United States.
The discussion which followed the passage of this resolution
revealed the optimism which prevailed not only regarding the early
return to a pre-war basis of industrial conditions, but regarding the
splendid prospects existing for the development of export trade. It
was the general opinion that the development of export trade will
naturally follow the prestige gained by the United States of America
in the markets of the world and that it is the duty of all manufac-
turers to foster and encourage such expansion of export business
as may be normally and healthfully developed. It was further
pointed out that while the present wage scale would be retained
for some time to come, it is no time to become hysterical over the
conditions, but, on the contrary, .a time for watchful, sober consid-
eration of developments as they arise, to the end that readjustments
may come about with as little disturbance as possible.

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