Music Trade Review

Issue: 1924 Vol. 78 N. 22

Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
THE MUSIC TRADE REVIEW
Government Holds Gold-Plated Hardware
on Phonographs Is Non-Taxable Under Law
Music Industries Chamber of Commerce Wins Long Controversy in Receiving Definite Official
Ruling From Treasury Department Upholding Its Contentions on All Points
^ T H R O U G H the efforts of the Music Indus-
tries Chamber of Commerce the Treasury
Department has reversed its previous decision
that all phonographs and gold-plated hardware
are taxable at 5 per cent on the retail price under
Section 905 of the Revenue Act of 1921, and as
the tax under the original order would have
been retroactive until January, 1921, and applied
to all sales since then, it is estimated that the
new ruling has resulted in a saving to the music
industry of over five million dollars in taxes.
The definite official ruling of the Treasury
Department has not yet been published, but
notice of it has been received by the Chamber
in a letter of May 24 which reads in part as
follows:
"Reference is made to your letters . . . pro-
testing against the position taken by the Collec-
tors of Internal Revenue in Indiana and Illi-
nois, holding that phonographs, victrolas, etc.,
are taxable under Section 905 of the Revenue
Act of 1921, if they are ornamented, mounted, or
fitted with precious metals, or imitations there-
of. Reference is also made to your recent brief
regarding the matter involved.
"The question of the taxability of such articles
under Section 905 has been given very careful
reconsideration, and the conclusion has been
reached that they are not taxable under that
section of the Act."
Several days previous the Chamber had re-
ceived intimation of the favorable decision in a
Pratt Read
Products
Piano Ivory
P i a n o Keys
Piano Actions
Player Actions
Established in
1806
at Deep River, Conn.
Still There
Standard Service and Highest Quality
Special Repair Departments
Maintained for Convenience
of Dealers
PRATT, READ & CO.
PRATT READ PLAYER ACTION CO.
Oldest and Best
copy of a letter of May 21, 1924, from Com-
missioner I). H. Blair to Senator Walter I.
Edge, of New Jersey, from which the follow-
ing is a quotation:
".As a result of conferences recently held in
the bureau with Alfred L. Smith, general man-
ager of the Music Industries Chamber of Com-
merce, and upon consideration of additional
evidence submitted by him, the conclusion has
been reached that instruments of that character
(that is, phonographs having gold-plated hard-
ware), are not subject to the tax in question.
Accordingly, the former ruling has been re-
versed and the new conclusion will be com-
municated to those interested in the near future."
This important and favorable decision is the
result of three years' activity on the part of the
Music Industries Chamber of Commerce. Al-
most immediately upon the repeal of the 5 per
cent tax on pianos and phonographs, the Cham-
ber was asked if phonographs with gold-plated
hardware would not then be subject to the jew-
elry tax as articles "made of, ornamented or
fitted with gold and silver"; and very soon com-
plaints reached the Chamber that collectors of
the Internal Revenue Bureau were actually im-
posing the tax. In every case the Chamber was
able to convince local collectors that they should
not collect the tax. While there was no definite
ruling from the Treasury Department, neverthe-
less, letters were received indicating that it had
made favorable informal rulings. However, in
the latter part of 1923 many merchants, partic-
ularly in the States of Indiana and Illinois, re-
ported that demands had been made to file a
return showing all phonographs with gold-plated
hardware sold since January 1, 1921, upon which
the 5 per cent tax was to be imposed. In many
cases the demands of the collectors were very
insistent, the controversy between local dealers,
backed by the Chamber, and the local collectors
was taken to Washington, and local collectors
were definitely notified by the Treasury Depart-
ment that phonographs with gold-plated parts
were subject to the tax.
The matter was then referred to the solicitor
of the bureau for a legal opinion. Alfred L.
Smith conferred with the solicitor and gave oral
arguments on several occasions. The solicitor
finally requested that a definite brief be com-
piled and filed with him, which was done on
May 13. This brief went thoroughly into every
phase of the question and contended that the
so-called jewelry tax did not apply because:
1. Congress did not intend this tax to apply
to articles in which gold or silver is used in such
an incidental way as in phonographs.
2. The Treasury Department has recognized
this intention of Congress and made regulations
which exempt products similar to phonographs
with gold-plated hardware.
3. The Treasury Department has already ruled
that phonographs are not subject to the jewelry
tax irrespective of the materials of which they
are made.
4. If the jewelry tax is now applied to phono-
graphs it will impose on them double the tax
they were subject to when they were taxed
specifically, instead of exempting them from ex-
cise taxation as Congress intended.
Fire Damages Lumber Stocks
BUFFALO, N. Y., May 26.—Two fires, both be-
lieved to have been of incendiary origin, caused
between $40,000 and $50,000 loss in the lumber
district of North Tonawanda on the night of
May 19. The fires were in the yards of White,
Gratwick & Mitchell and on the dock of the
Daily Newsprint Corp. The yards of White,
Gratwick & Mitchell are the largest in the ex-
tensive Tonawanda lumber district. This firm
MAY
31, 1924
ships thousands of feet of lumber to musical
instrument manufacturers in the East every year.
Stieff Harrisburg Store
Wins Gup in Firm's Contest
Branch Store in Pennsylvania Capital Cele-
brates Winning of Cup for First Time in
Entertainment to Staff
HARRISBURC, PA., May 26.—The branch store
of Chas. M. StielT, Inc., was successful in
winning the Kquity Contest conducted by the
home office between the thirteen branch stores
of Chas. M. Stieff, Inc. The contest ended
April 26, having run since the first of the year.
Manager O. B. Lank feels highly elated over
winning the contest and the silver loving cup,
as this is the first time that Harrisburg has
won, although the contest has been conducted
for the past three years. The prizes offered in
connection with the contest go to the manager,
C). B. Lank; office manager, Miss Pearl Kllen-
berger, and her assistant, Miss Mary Kllenber-
ger.
The firm and the local manager entertained
the employes, their wives and sweethearts at a
banquet Friday evening at the Beach Front
Hotel. Mr. Lank congratulated the sales force
on keeping the business ahead of last year, as
the sales at the end of April showed an increase
of over 30 per cent, compared with the same
period of 1923. The prizes were distributed to
the successful salesmen in a sales contest, which
has been conducted by the branch for the first
four months of this year. P. B. Malarkey won
first prize, while A. M. Klugh won the second
prize. Mr. Klugh also took the first prize for
the most cash business and I!. M. Crawford
won the second prize.
A very pleasing and entertaining program
followed the dinner. S. P. Walker, treasurer
and general manager of the firm, attended, and
in addition to Mr. Walker the following were
present: Mr. and Mrs. (). B. Lank, Mr. and
Mrs. J. C. Shafer, Mr. and Mrs. E. B. Carpenter,
Mr. and Mrs. A. C. Hit/., Mr. and Mrs. C. H.
Day, Mr. and Mrs. D. R. Kumberger, Mr. and
Mrs. A. M. Klugh, Mr. and Mrs. G. O. Thomas,
Mr. and Mrs. Geo. L. Weirick, Mr. and Mrs.
B. M. Crawford, P. B. Malarkey, Miss Pearl
Ellenberger, P. S. Miller, Miss mary Ellenberger,
C. V. Hoar, W. A. Greiner and John Day.
Merchants Warned to Guard
Against Thefts of Radio
New Type of Thief Steals Sets Out of Stores
and Offices Almost Under the Noses of Pro-
prietors—Constant Watchfulness Needed
Several of the larger radio manufacturers have
been bothered lately by a band of thieves who
are specializing on stealing radio sets off their
delivery trucks, out of their storerooms and in
some cases right out of their demonstration
rooms. One case that has come to light lately
is that of the Knabe Warerooms, Newark, N. ].,
where thieves broke in the front window and
ran off with a portable radio set valued at $286.
The thieves have a preference for portable
sets, or sets that can be carried easily without
attracting undue suspicion. Where a set is
stolen from a manufacturer or a jobber it is
comparatively easy to locate it, but, neverthe-
less, it warrants the dealer's care in the safe-
guarding of the merchandise. Also, do not deal
with unknown people in buying radio.
Knabes for S. S. Republic
A fine Knabe grand has just been placed on
board the S. S. "Republic" of the Shipping
Board Emergency Fleet, and two Knabe up-
rights supplied for the general rooms of the
same ship. The sale of these instruments -was
arranged by Howard H. Wood, of the Knabe
Warerooms in Norfolk, Va.
Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
MAY
THE
31, 1924
MUSIC TRADE
REVIEW
Texas Music Dealers Hold Convention
J. R. Reed, of Austin, Elected President for the Coming Year, T. J. York, of Corsicana; Lester Burchfield,
of Dallas, and E. E. Hall, of Abilene, Vice-Presidents, and W. B. Callaway, of Houston,
Secretary and Treasurer—Big Attendance on Hand
ALVESTON, TEX.,-May 24.—The fifth
annual convention of the Texas Music
Merchants' Association is now a thing of
the past, but while it was in session.it proved
distinctly interesting to the music merchant from
many angles. Over 100 music retailers from all
sections of the State attended the meetings at
the Hotel Galvez.
The convention was opened on Thursday
morning with an address of welcome by D. B.
Maclnerney, Assistant City Attorney, with the
response in behalf of the association by William
H. Beasley, of Dallas, its president, in the ab-
sence of the scheduled speaker, Robert N. Wat-
kin, of Dallas, who was unable to be present.
A number of interesting addresses were fea-
tures of the first day's session. Dr. J. Willis
Slaughter, of the Rice Institution, was the first
speaker and had for his subject "Business as a
Profession," in which he emphasized the in-
creasing demands that are being made upon the
brain rather than the brawn of the modern mer-
chant.
Increasing Opportunities for Salesmen
A particularly interesting address was that of
Fred W. Catterall, of the First National Bank
of Galveston, who, during an address on "The
Instalment Business From a Banker's View-
point," declared that figures compiled by Pro-
fessor David Friday, of the University of Mich-
igan, show the savings of the people of the
United States in 1923 were over $12,000,000,000,
or about $33,000,000 a day.
Of this amount 42 per cent went for auto-
mobiles, roads, accessories, music, musical in-
struments, etc.; 21 per cent went into railroads,
power plants and public utilities, and 37 per
ct lit went into buildings and miscellaneous ac-
tivities, he said.
Actual cash sivings in the form of interest
savings bank deposits alone in 1923 are estimated
by the American Bankers' Association to have
been over. $1,000,000,000, Mr. Catterall an-
nounced. In this country the ownership of cap-
ital is ever widening, and with this constant ex-
pansion there is an ever-increasing opportunity
to the active and well-informed salesman.
Mr. Catterall quoted figures, he said, merely
to show that the country "is not going to the
bow-wows."
Music Clubs and Dealers Should Co-operate
During the first session Mrs. Clara Wittig
Moore, of this city, director of music in public
schools, extended greetings from Galveston and
the Texas Federation of Music Clubs, and said
the music dealers and the music clubs can work
in harmony.
"We sell the idea," said Mrs. Moore, "and you
sell the music. We cannot federate with you,
but you can federate with us. There is no force
in America that docs more in the way of up-
building community life than does music. No
city is better than its music."
At the conclusion of the session the visiting
delegates, were taken on an automobile tour of
the city and its environs, and later enjoyed a
boat trip followed by a beach party.
The Friday Session
Radio came to the fore at the Friday session
when addresses were made by Will J. Schnelle,
of Dallas, representing the Texas Radio Sales
Co., and by McCall L. Gary, of Chicago, repre-
senting the Radio Corp. of America. Mr.
Schnelle talked on "Radio and the Phonograph
G
O
N
Dealer" and, after outlining what had been ac-
complished in the radio field during the past few
years, declared the music merchants themselves
allowed the hardware and electrical men to cap-
ture the bulk of the business so far. He pointed
out, however, that the growing interest in the
handling of radio in music circles was proven
by the talking machine and radio combinations
now being marketed or which it is planned to
market.
Radio and the Music Field
Mr. Gary in his address expressed the belief
that music dealers will eventually control 70
per cent of the radio business. "When radio
leaped into popularity there were men who
rushed into the business with no knowledge of
merchandising," Mr. Gary said. "All expected
to get rich quick and many were disappointed.
It was the same way in manufacturing. There
are five or six factories which are putting out
standard articles now and 400 or 500 which are
experimenting.
"The radio is as much a part of the music
business as the phonograph—which was not ac-
cepted by the music trade for many years. The
radio dealer should not be too enthusiastic. He
should not tell his customers they can get
Canada every night—they can't—but inform
them of the good programs they can pick up
from nearer stations."
Talking Machine Development
F. L. Hough, representing the Victor Talking
Machine Co., Camden, N. J., who early in the
day told a number of the Southwestern Victor
dealers gathered at a special breakfast of the
plans of the Victor Co. for putting out cabinets
especially designed for combination talking ma-
chine and radio installation, made an excellent
talk at the afternoon session on "The Trend of
the Talking Machine Business." He said that
when he entered the field twenty years ago
there were fears that it would not last. It was
only when the talking machine became rec-
ognized as a musical instrument that real prog-
ress began, he said.
Musical appreciation and talking machine busi-
ness go hand in hand, he pointed out, saying
that Texas, which had had courses in musical
appreciation in the schools for six years, was
one of the leading States nationally, and that
Louisiana, which had no such courses, had
fallen away behind. He urged the talking ma-
chine dealers to do all in their power to advance
the cause of music.
N. K. Stillwell, of Houston, representing the
National Cash Register Co., gave an illuminating
talk on "Budgeting a Business." He illustrated
his remarks by a series of charts, showing deal-
ers how to figure expenses and profits so that
they really were making money.
The Music Manager and the Merchant
One of the most interesting addresses yester-
day morning was by Mrs. Edna W. Saunders,
of Houston, on "Concert Manager and Music
Merchant." Mrs. Saunders said some of the
greatest artists had been presented in Texas by
music merchants, but that they gradually had
let such things pass to music clubs and local
managers. There still is and should be, she
said, close co-operation between managers and
merchants, each of whom depended largely on
the other.
Necessity of Proper Tuning
R. P. Patterson, of Fort Worth, spoke on "Re-
K {£ B
lation of Tuner to Dealer." He maintained that
the merchant who did not see that customers'
pianos are kept in tune is injuring his own busi-
ness. An inferior piano well tuned will sell
more quickly that a superior instrument not
tuned, he said, but will not give satisfaction
afterward. He told of ways to combat moisture
in the air, mice and moths, which he termed
as deadly enemies of the piano.
Schools Offer Virgin Field
Great interest in music has been aroused
through the Interscholastic League's Music
Memory Contests, said Roy Bedichek, of the
University of Texas. Mr. Bedichek described
the organization and said there are 8,363 rural
schools in the State which are practically virgin
field for the music merchant.
If the children are interested in music, the
family will become so, he said. There were
4,000 schools in the contest this year, scattered
over 224 counties. Steps are under way to make
the next music memory contest include still
more schools.
Rev. Raimundo De Ovies, of Trinity Episco-
pal Church, closed the morning session with an
eloquent talk on "A Message Musical."
J. R. Reed Elected President
At the election of officers before the close of
the afternoon's session J. R. Reed, of Austin,
was elected president, and that city was selected
as the meeting place for the 1925 convention.
T. J. York, of Corsicana, was elected first vice-
president of the association; Lester Burchfield,
of Dallas, second vice-president; E. E. Hall, of
Abilene, third vice-president; W. B. Callaway,
of Houston, secretary-treasurer.
Directors
chosen were W. H. Humphries, Dallas; J. O.
Elliott, San Antonio; A. T. Beyers, San An-
tonio; Oscar'Springer, Galveston; O. V. Ray,
Amarillo, and George H. Beasley, Texarkana.
All elections were by unanimous vote.
Banquet Ends Convention
The convention ended with an elaborate ban-
quet at the Hotel Galvez last evening at which
J. T. Fitzgerald, of the Fitzgerald Music Co.,
Los Angeles, Cal., was the guest of honor. In
addition to Mr. Fitzgerald the speakers included
Owen D. Barker, a well-known local attorney,
and Mrs. Clara Wittig Moore. An excellent
musical program was also provided.
E
U. S. Music Rolls at Fair
United States music rolls were featured in the
music booth at the Annual Park Avenue Fair
all during the week of May 19. The members
of the Park Avenue Fair Association assigned
to the music booth were all vocalists and while
the roll was being played on the player-piano
the ladies in charge of the booth would mingle
with the crowd carrying a roll of the song being
played in one hand and the sheet music in the
other. Several hundred dollars were realized
from this booth, which was in charge of Harry
Rollins, of Fred Kraft, Inc., the music store
located in the Grand Central Terminal.
D. S. Andrus Buys Out Store
D. S. Andrus, who is proprietor of the music
business conducted under his name in Williams-
port and Sunbury, Pa., has acquired the interests
of the Sunbury Sporting Goods Co.
N

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