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THE MUSIC TRADE REVIEW
SEPTEMBER 6, 1919
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AN ANALYSIS OF EXISTING TRADE
CONDITIONS AS SEEN BY C. G. STEGER
The Various Causes and Factors Which Are Responsible for the Present Unusual
Situation in the Trade Logically Set Forth by Western Piano Man
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There have been numerous attempts, and
some more or less successful ones, made by-
various prominent members of the trade to
analyze the general industrial situation as it ap-
plies to this industry for the benefit of the re-
tailer. C. G. Steger, president of the Steger &
Sons Piano Mfg. Co., however, has succeeded
C. G. Steger
in putting into a special letter sent to his com-
pany's dealers some most interesting and logi-
cal facts relative to the existing situation in
business, both in and out of the music industry,
the causes that have led up to the present con-
ditions and what may properly be expected to
develop in the near future.
Mr. Steger's views are worthy of close study
by both manufacturers and retailers of pianos
and his letter, therefore, is presented in full
herewith. In it he says:
Indisputable evidence of wonderful prosperity
and business opportunities ahead of us is avail-
able everywhere. This is true particularly of the
music industry. It is a proven fact, based on
careful investigation, that at present the demand
for pianos, player-pianos and talking machines
is so far in excess of output in all likelihood
there will be a shortage of at least 40 per
cent, by the close of the year.
This situation would be ideal from the view-
point of both merchant and manufacturer were
it not for some disturbing factors which must
be taken into account. It is recalled that dur-
ing the war output was nearly shut off. The
demand, however, continued. This demand for
musical instruments came from an entirely un-
looked-for source, i. e., "the worker." During
the war he was earning "war wages" and began
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to spend his earnings for the things that he
wanted and which he never previously could
afford to buy—better clothes, jewelry, musical
instruments, etc., etc.
The-"war worker" is back again in peace-
time pursuits and with him is the returned
soldier.
Neither is working for "pre-war"
wages now. The standards of wages and liv-
ing conditions were set for the worker during
the war, while he was producing the things
necessary for war.
Why these standards? There was just one
purpose in view, to force production at "high
speed." With the signing of the armistice war
production was no longer necessary with those
factories which were serving the Government.
Consequently, the manufacture of "peace-time"
products was renewed, but under war-time
standards. ' Production under high speed was
necessary in order to meet the overwhelming
demand.
The industrial manager continued the "eight-
hour day," with high wages and good living
conditions. In addition he placed back into
operation his "war-time" system of paying
bonuses, premiums and other service gratui-
ties to stimulate the worker toward greater ef-
fort. Consequently, the inclination to spend and
the ability to buy make the worker "prime,"
more so than ever, as a piano buyer. So much
for the wage-earner as a source of demand.
Next you have the farmer. Not much need
be said about him as a valuable possibility for
the piano merchant. Most of the energetic
farmers are becoming rich "over night." Here
you have the two great sources of demand.
Now about production and output at the fac-
tories.
In the foregoing it was suggested that not-
withstanding ideal conditions for prospective
sales there were some disturbing elements to be
considered. A few might be noted: Wages are
increasing daily with no appreciable increase in
production. That means scarcity of goods at
high cost. Raw material is being hoarded for
speculation in anticipation of heavy demands
from foreign sources. That means scarcity of
essential materials at high prices. Local taxa-
tion is constantly increasing. In this district
taxing values have increased over 100 per cent,
in twelve months. This means increased over-
head charges. All of which affects selling prices.
These must necessarily be increased from time
to time to meet prevailing conditions.
Selling prices are, however, only relative.
This is best illustrated by the following inci-
dent: A piano merchant recently called upon
the writer, complaining about the high prices
on musical instruments. Apparently this piano
merchant overlooked entirely a few of the
fundamental conditions that have affected busi-
ness during the last five years. The writer said
to him: "My friend, in 1913 wheat was selling
at 51 cents per bushel. At that time we were
selling style — for $130 and would have taken
255 bushels of wheat for that $130 piano. To-
day this same $130 piano is priced at $202. We
will sell you that same piano for 255 bushels of
wheat." At first he failed to see that 255 bushels
would cost him %2.26 per bushel, or $576.30.
Economically speaking, we are traveling in a
circle.
PIANOS
The worker, in order to meet the high cost
of living, demands higher wages and gets them.
Industry passes the increase on to the mer-
chant, who in turn passes it on to the consumer
(the worker) and then there is another demand
whereby to meet the increase and so on. The
situation would not be so startling if production
were increased in proportion to manufacturing
costs. Consequently, so long as there is no sur-
plus and production lags there will be continued
high prices and a greater shortage of goods.
This, of course, means fictitious inflation of
values and is bound to break up sometime.
When it will occur no one knows. Some say
next year, others hazard suggestions that 1922
or 1923 will be the time.
Jn the meantime industry must keep on pro-
ducing, because that is the only thing that will
save the situation. Just as soon as we begin
to accumulate surplus stocks of shoes, cloth-
ing, provisions, pianos, talking machines, play-
er-pianos, etc., things will begin to settle back
into normal again. Therefore, it is urged, as
a matter of good business foresight, that piano
merchants view this question of "price" from
the standpoint of "necessity," keeping constant-
ly in mind that "demand" will balance the
wheel. To meet this demand you must have
goods.
Many piano merchants, erroneously forecast-
ing a break in prices, will find themselves
stranded with barren stores before the fall trade
sets in—and then it will be too late. Piano
merchants should study their local conditions
carefully and intelligently and then work out
orders for their requirements as quickly as pos-
sible. Remember this—a promise by the fac-
tory to ship on a certain day does not neces-
sarily mean that the bill of lading will follow
promptly in fulfilment of that promise.
By suggesting that our trade anticipate their
future requirements it is not intended to con-
vey the impression that such orders will be sub-
ject to specific shipping dates. We can only
accept orders for the balance of the year sub-
ject to shipment when goods are available.
Our determination, however, is to serve you to
the best of our ability.
RYDER=GROSS CO. ORGANIZED
New Organization Supplants Ryder Music Co.
in Oklahoma—Clark F. Gross Becomes New
Member of Firm—Formerly with Gulbransen
PAWHUSKA, OKLA., September 1.—The Ryder
Music Co. will in the future be known as the
Ryder-Gross Co. and the business will be con-
ducted under that name. R. Wood Ryder is
president and manager, Clark F. Gross is first
vice-president and M. K. L. Ryder is secretary
and treasurer, C. D. Ryder is shop superin-
tendent and Hattie Barthell is in charge of
accounts. Clark F. Gross was formerly with
the Haddorff Piano Co. in Nebraska for several
years and has lately been with the Gulbransen
Piano Co., of Chicago, as field sales manager.
The present store is undergoing a complete
reorganization and readjustment and each de-
partment is being enlarged and better equipped
to take care of the trade, which is both whole-
sale and retail.
ORGANS
E5TEY PIAND COMPANY NEW YDnK CITY- $