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DECEMBER 11,
THE MUSIC TRADE
1920
13
REVIEW
I RESULTS OF WORK OF THE BETTER
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BUSINESS BUREAU ARE NOW APPARENT
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The Fact That Clean Advertising Dominates in the Music Trade in the Face of
Present Conditions Proves Bureau's Influence, Declares C L. Dennis
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it has always characterized any return to starva-
tion terms, even by advertising inference, as a
bad idea to get back into the public mind.
"The Better Business Bureau of the Music
Industries Chamber of Commerce has been a
restraining influence in the period of re-
adjustment following war conditions. Aside
from its active efforts, the very existence of the
Bureau, with its almost 100 per cent backing of
the music industry, has exercised a marked in-
fluence in the field of music merchandising. The
vital need of this work, especially during the
period of readjustment from the abnormal con-
ditions resulting from the war, makes it impor-
tant to enlist the active co-operation of ever>
factor in the music industry. Changing con-
ditions have threatened to undermine recognized
standards and bring about a return to old evils
of dishonest and unfair competition.
"The reorganization of the Music Industries
Chamber of Commerce has had an important
bearing on the work of the Bureau. My office
as secretary of the National Association of
Music Merchants and manager of the Better
Business Bureau was transferred from Milwau-
kee into the headquarters of the central or-
ganization. The closer relationship thus estab-
lished with other Bureaus of the Chamber and
the co-ordination of effort in all departments
have increased the scope of the Bureau work and
developed problems in branches of the music
industry other than the retail field. While the
Bureau has always acted upon complaints in
any branch of music merchandising it was not
According to C. L. Dennis, director of the
Better Business Bureau of the Music Industries
Chamber of Commerce, the trade as a whole in
the face of the trying situation during 1920 has
maintained the high standard of trade practice
established during the past few years, largely
through the efforts of the Bureau. In short,
although there have been naturally a few back-
sliders among the hundreds of dealers the trade
has met the test successfully and has shown a
remarkably clean record, both in advertising
and selling methods.
In commenting upon the situation for The Re-
view, Mr. Dennis said:
"The expectant attitude of the buying public
was an invitation for claims of price reductions
early in the year. Later it became apparent
that other lines of merchandise would experi-
ence a break in prices which began to make
itself felt early in the Summer. The usual
mid-Summer 'dull season' and much-advertised
'20 per cent reductions' in other lines were
severe trials of the music merchants' standards.
It is gratifying to say that few other than the
• usual 'bargain' advertisers permitted themselves
came more apparent that the decline in costs
would be slow to affect the production of musi-
cal merchandise, the claims of price reductions
became less pronounced. There was, however,
a tendency to give more liberal terms on pianos
and phonographs.
"This Bureau cannot criticize price reductions
except as they appear fictitious or foolish, but
HANDLING CREDITS FROM A PRACTICAL STANDPOINT
(Continued
from page 11)
credit cannot be obtained we do not deal with
a reasonable credit risk. Some of the most suc-
cessful credit men consider character the most
important factor and there can be no question as
to its importance. Just the same, without capac-
ity and capital, when the obligation will become
due, aside from the willingness there must be the
ability to pay.
The work of the credit man may be divided
into two parts, obtaining and analyzing the credit
information. The proper analysis must carry the
scale into one direction or the other, extending
or refusing the credit.
Sources of Information
The sources of information are many. One is
the mercantile agencies, covering almost every
line of business. Their information is of a gen-
eral nature. They usually cover antecedents,
financial statements, comparison with previous
statements and trade information. Complaints
are often heard regarding erroneous ratings or
inaccuracies in reports. No credit should be ex-
tended on the agency rating. The ratings rep-
resent nothing but a class or index and they are
changed daily by the thousands. During the
present period of readjustments and falling prices,
when collection agencies and bankruptcy courts
are working overtime, three months is a long time
in the life of a business and its events since the
last agency book went to press may affect great-
ly the standing of a concern. The same will apply
to a smaller degree to the agency report, where
the first thing to consider is how recent is the
date of the report. The inaccuracies that will be
found occasionally must be weighed together with
the great amount of accurate information re-
ceived. The report, in its essence at least, is the
work of an individual. The accuracy of the re-
port will depend upon the ability of the reporter.
In organizations like our two large mercantile
agencies, where the information is gathered by
many thousands, there are bound to be some in-
efficient reporters. To the credit of the agencies,
it must be'said the inefficient are being weeded
out as fast as they are found to be so.
Special agencies in special lines serve the pur-
pose the mercantile agencies cannot fill. It is
impossible for the mercantile agency to keep in
touch with every line to the extent of registering
every movement in conditions affecting labor
or material, scarcity or overproduction and the
fluctuation in prices. The special agency watches
the pulse and registers the pressure in a special
industry only. The men in charge of these
agencies are trained in these lines and as a rule
able to interpret conditions and their effect upon
collections. They are usually well versed with
the sources of supplies and therefore equipped to
gather the trade information. Their intimacy
with the trade enables them often to obtain ad-
rance information. To sum up, their sphere is
smaller and their work so much more intensive.
The Importance of Ledger Information
Trade information is one of the factors that
carries much weight and is one of the valuable
assets of the credit man. Both the mercantile
and special agencies will furnish trade reference
or ledger information. They are of value, al-
though they lack a very essential requisite, the
source. The only way to obtain this is through
the direct exchange of ledger information. The
effect will be different if we know that a con-
servative house, working on a reasonable margin
of profit, extends a fair line of credit, instead of a
house with a liberal policy and a large margin of
profit.
The usual ledger information will not contain
more than the ledger may reveal to the average
until recently that "the Bureau has taken up
general problems such as it now has in othei
branches like the musical supply and music pub-
lishing field.
"The Better Business Bureau has for its pur-
pose the elimination of undesirable and improper
practices in all branches of the music industry.
The success of the work is difficult to measure
by statistics. Hundreds of complaints have
been received and acted upon, chiefly in ques-
tions of retail advertising. The majority ot
these are handled by friendly correspondence,
which has frequently brought about desirable
results. No appeals have been made to prose-
cuting attorneys during 1920 and in only one
case has it been necessary to appeal to the
postal authorities.
"An old problem which has been a source of
frequent corrplaint was settled by a recent order
of the Federal Trade Commission requiring a
piano manufacturer to refrain from stenciling
or in any manner marking upon his pianos or
player-pianos any fictitious or misleading prices
grossly in excess of which they are usually sold
at retail. The quoting of abnormally high fic-
titious prices in order to permit dealers to make
radical reductions, thereby deceiving purchasers
as to true values, has been a point of conten-
tion with the Bureau since its establishment. It
is only fair to say that the firm in question,
as well as others in the trade, welcomed the
order, because it will help to eliminate an ele-
ment of obviously unfair competition in the in-
dustry."
accountant. In addition we should know the
amount of unfilled orders on the one hand and
trade abuses on the other. They both carry deep
significance.
Value of Personal Contact
The personal touch or communication is also
an important element in the work of the credit
man. Business is carried on these days to great
extent by mail or wire. Every opportunity
should be extended the credit man to
meet the people in person with whom he
is dealing. The eyes of the salesman and credit
man may be both turned in the same direction,
profit, as the ultimate result for being in business.
Their ways to achieve this result are not always
the same. We all like to come to conclusions
upon personal observations and this opportunity
should be extended every credit man whenever
possible, or at least practicable.
Salesmen can be trained without special in-
structions or lectures to furnish valuable credit
information. With salesmen the customer is
more friendly and not so much on his guard. The
buyer will be more at ease in his own place of
business than at the credit desk. With a quick
glance the keen salesman will be able to tell if
his customer's stock is clean or antiquated. Does
the merchandise move or drag? Is his man going
ahead or dropping behind? The observations
jotted down and mailed in will help the house,
the credit man and ultimately will help the sales-
man so much more.
After the information is gathered comes the
analysis. Rules cannot be laid down for this
work. There are not two men of the same
character, not two of the same ability, and if we
start off two men with the same amount of cash,
in the same line of business, at the same time,
at the end of the first year the distribution of
their capital will be entirely different, although,
which is doubtful, the fluctuations in capital in
both cases remain the same.