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THE
MUSIC
TRADE
REVIEW
(Registered in the U. S. Patent Office)
PUBLISHED BY EDWARD LYMAN BILL, Inc.
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Vol. LXXVIII
NEW YORK, JANUARY 5, 1924
No. 1
FINANCING AND THE YEAR'S PROGRESS
I
tity. In at least one case, a dealer with some $15,000 worth of
paper simply gave up the problem in disgust and disposed of his
business taking as its chief consideration for the time, effort and
money put into it, the instalment paper in his safe. He used this
income to keep him going until he got located in another line.
Capital is too valuable a factor in business to permit of its
being tied up with non-productive leases for any considerable time.
It is the turning over of capital two or three times at least each
year in the piano business that makes progress and profit. Financing
leases in one way or another is just as much the problem of the large
merchant as it is the small one, for the bigger the business the more
necessary it is to have the cash capital with which to operate.
T
Executive and Reportorial Staff
WESTERN DIVISION:
JANUARY 5, 1924
COUNTING ONLY THE CLOUDY DAYS
E. B. MUNCH, V. D. WALSH, EDWAHD VAN HARLINGEN, LEE ROBINSON,
THOS. W. BRESNAHAN, E. J. NEALY, C. R. TIGHE, FREDERICK B. DIEHL, A. J. NICKLIN,
A. FREDERICK CARTER
ARTHUR NEALY, Representative
REVIEW
N casting up his balance sheet for the year just closed the
average music merchant, if he has handled his proper volume
of sales during the fall months and the holiday season, is going
to find a very substantial quantity of lease paper in his safe and
much of his progress during the twelve months to come will de-
pend on just how he utilizes that paper.
The question of financing instalment paper is not merely, as
some appear to think, the question of doing business with a recog-
nized finance company. It means, as. a matter of fact, utilizing
that paper as an asset in meeting obligations and developing busi-
ness.
Paper that is kept in the safe, even though it bear interest
at 6 per cent or more, represents stagnant capital, and if the re-
tailer is going to allow that capital to remain dormant, or produc-
tive of only a small interest income, he might just as well put his
cash into guaranteed mortgage bonds and save the trouble of sell-
ing goods and worrying over merchandising problems.
Piano paper, as has been pointed out many times, is of the
soundest sort for the reason that when used as collateral it is
backed not only by the endorsement of the purchaser and of the
dealer but also by the value of the instrument itself, which can
be repossessed and resold should the contract obligations go by
default.
The retailers who are really successful and enjoy the proper
percentage of business growth are those who realize upon the
value of their paper as an asset either by liquidating their obli-
gations to manufacturers to a certain degree, by putting it up as
collateral with local banks in exchange for cash loans to be uti-
lized in business development, or by realizing upon it according
to any one of a number of financing plans.
The January totals give many dealers something worth think-
ing about in the matter of instalment leases in view of the heavy
selling done during the last three or four months of the year. There
have been instances where dealers have simply been forced to stand
practically pat in the matter of business progress until a suffi-
cient number of payments have been made on the paper in their
safes to allow the purchase of new stock in any considerable quan-
H E wind-up of 1923 for the music merchants appears to have
been generally satisfactory with a volume of business for
December that was limited in many cases by inability to get a
sufficient supply of instruments, particularly of low-priced pianos
and players and the high-priced reproducing instruments.
In a number of localities the opening days of the New Year
saw in stock only limited numbers of instruments, and most of
them of the medium grade. As it is, some retailers will be busy
for the next couple of months shipping to customers instruments
ordered before Christmas, but which will not be available from
the factory for some weeks to come.
The peculiar phase of the situation is that early in December
considerable complaint was heard in certain quarters regarding
slowness of business and, in fact, a falling off that was referred
to as a slump, yet, when the final summing up came, it was dis-
covered that even during the slow period the sales were at least
equal to and, in some cases, greater than those of the correspond-
ing period of the year before.
The results for the entire year should provide a lesson for
members of the retail trade who are inclined to be pessimistic as
soon as prospective buyers cease crowding the warerooms. There
have been those who, at the slightest apparent lull, have been in-
clined to curtail sales effort by cutting down advertising appro-
priations and, in some cases, reducing sales staffs.
In gauging business for 1924 it might be well for some of
the timid ones to compare the business of several months with
that of corresponding months of the previous year instead of bas-
ing their calculations on the sales of one or two particular weeks.
BANKERS FORESEE A GOOD YEAR
B
ANKERS as a rule are inclined to be more or less conserva-
tive in their prophesies regarding future trade developments
and seldom are they influenced to any great degree by the enthusi-
asm and, perhaps, excess optimism of those actually engaged in build-
ing up of an industry. When, therefore, the bankers, almost as
a body, declare that they foresee a prosperous year ahead of us,
particularly in view of the possibilities of the lifting of the tax
burden, the attitude is one calculated to lend encouragement to
those who are planning big things for months to come.
The increased value of crops, the improvement in the railroad
situation, the growth in home building, and the development of the
various basic industries during the year just closed are all taken
to presage a very prosperous condition throughout 1924. There are
little or no prospects of labor disturbances or other troubles to
upset the business world, and although there may, of course, be
unexpected developments that will halt progress temporarily, they
are not foreseen now, and it is seldom that any serious upsetting
of industry comes suddenly and out of a clear sky.
KEEPING UP THE TAX REDUCTION FIGHT
W
H E N Congress went into session on Thursday of this week
the members found piled on their desks numerous demands
from constituents for their support of the tax reducing program.
The pressure exerted thus far by the business interests of the
country has had its effect, and it is only by continuing that pres-
sure can satisfactory final action be secured. The members of
the music industry who desire relief both from general war taxes
and the several discriminatory levies against the trade will do
well to persist in their demands on their respective Congressmen
for the support of the tax reduction measure. A little pressure
now is better than much loud protesting later.