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The Carrying Charge
After a Year of Trial
E. Palmer Tucker, Southern California Manager
of the Wiley B. Allen Co., Tells of the Sue-
cess of This System With the Los Angeles Trade
E. Palmer Tucker
T
H E R E are two types 01 overhead on
every retail piano merchant's books. The
first of these consists of merchandising
expenses and in most modern retail piano
warerooms is the subject of close scrutiny.
The second of these is that which originates
in the financing of retail piano sales, an over-
head that is often hidden to view, yet which
is of paramount importance in controlling the
color of the ink in which the balance on the
ledger at the end of the year is to be written.
And the importance of a close scrutiny of this
latter overhead, especially in so far as it con-
cerns interest charges of the instalment sale,
can hardly be over-estimated when it is con-
sidered that 80 per cent of the pianos sold
throughout the country are sold on terms.
Collecting interest has always been one of
the most difficult of the jobs which confronts
the retail piano merchant's collection depart-
ment. The customer is supposed to read his
contract when he makes his purchase and the
salesmen are supposed to see that every one
of its clauses is thoroughly understood by the
buyer. But, in a majority of cases, the cus-
tomer neglects that important thing, and the
salesman, in his anxiety to close a sale, skips
lightly over the interest clause, if he mentions
it. at all. Here is a fertile field for future mis-
understandings, which create, not only the
tangible evil of past due, but the indirect and
as important evil of injury to good will.
Hence the system of substituting the carry-
ing charge for the practice of charging in-
terest on balances still due on the contract.
This is a comparatively recent development in
the retail piano field, although it has existed
for a long time in other fields of retail sell-
ing. It has been in practice long enough,
however, to be thoroughly tested as to its
efficiency in meeting the evils which have
seemed to be inherent in the interest system
and a majority of merchants who have adopted
it seem to believe that it accomplishes all that
is claimed for it by those who favor it.
Los Angeles is one of those cities in which
the system is most widely used, largely due
to the action of the Music Trades Association
of Southern California, which was a pioneer
in working out carrying charge schedules and
also in adopting this system in actual practice.
The results, since its adoption about a year
ago, are well summarized in the following in-
terview with E. Palmer Tucker, southern Cali-
fornia manager of the Wiley B. Allen Co.:
"The carrying charge versus interest! Much
has been said on this subject, but a large num-
ber of dealers in certain localities are still
operating on an interest basis, in many cases
because of their inability to get the other
dealers in that locality to make a change simul-
taneously. For dealers do not like to pioneer.
After a year of actual experience in Los An-
geles, however, we have discovered that the
buying public with rare exceptions prefer, and
have been educated by other instalment dealers
up to the carrying charge plan.
"The customer would rather know just what
amount each month he must add to his principal
payment when remitting, we find. When re-
ceiving an interest-bearing statement, he feels
inclined to check back against his last state-
ment on the account to see if he is really
getting the proper" reduction in the interest
charged. This causes him some trouble and
oftentimes a delay in mailing his check. The
various finance companies have encouraged in-
stalment dealers of all kinds to adopt the
carrying charge in selling the various products
they handle, and this has widely prepared the
field for this system.
"For this reason, the piano dealer who is
hesitating in adopting the carrying charge sys-
tem v/ill find less resistance than he contem-
plates. The advantages to it are legion.
Statements, for instance, can be sent out by
less expensive office help. Mistakes are found
to occur less frequently. There is also the fact
that if one-half of 1 per cent is adopted as
the carrying charge, the net returns are larger
than on the 8 per cent interest plan.
"The additional inducement for the customer
to pay out in full is one of the strongest of
all the arguments in favor of the carrying
charge. As the balance reduces the carrying
charge looks larger and larger to the customer,
who knows he can, and docs frequently, elimi-
nate it by remitting in full. There is the same
inducement for making the first payment larger
than the customer may have contemplated.
"Of course the dealer must have a new con-
tract printed, which provides spaces in which
to fill in the monthly carrying charge and the
total amount of the monthly payment, repre-
sented by the sum of the carrying charge plus
the monthly payment on the instrument.
"Needless to say, the success of the carrying
charge is a fine argument in favor of the local
association. Where such organizations exist
the carrying charge can be put into effect
easily and simultaneously, and then, obviously,
no retail dealer is at any disadvantage. Old-
timers in the piano business know well that
there are two overheads connected with our
business—one with the merchandising opera-
tions and the other with the financing opera-
tions. Both of these are usually charged
against the merchandising department. Until
and before these are properly segregated on a
dealer's books, anything that tends to offset
the cost of carrying customers' contracts ob-
viously improves the dealers' chances for
getting a reasonable return upon the capital
invested."
Last Act of "Trovatore"
Broadcast by Brunswick
prima donna, mezzo-soprano Cyrena Van Gor-
don, joined the principals. The outstanding
vocal feature of this scene was the familiar
"Home to Our Mountains," which was broad-
cast for the first time by great artists.
Second National Broadcast of Grand Opera in
Actual Performance as Successful as the
First
The second experiment in nation-wide broad-
casting of grand opera was made on Friday
evening, January 28, when the Brunswick-
P.alke-Collender Co. and the National Broad-
casting Co. transmitted the last act of "II
Trovatore" from Chicago over a tie-up of sta-
tions. The Chicago Civic Opera Company
gave the performance as usual in its own the-
atre and the broadcast was incidental to the
gala performance which is given once a year
for guarantors only.
The first scene before the walls of the prison
afforded magnificent orchestral and choral op-
portunities, in addition to the solo and duet
numbers by Richard Bonelli, who records ex-
clusively for Brunswick, Claudia Muzio, Aroldo
Lindi. Of these, the famous and thrilling
"Miserere" is most widely known, with "Love
Flies on Rosy Pinions," "Oh, Joy, He Is Saved,"
and "The Lifeless Bride" sharing in popularity.
The change in scene to the interior of the
fortress was rushed through the introduction
of special facilities so that the complete change
was made in two minutes. Here Chicago's own
Easton Hotel With Lehrs
EASTON, PA., January 29.—Two attractive Lehr
period grands, made by H. Lehr & Co., this
city, have been selected for the new Hotel
Easton and have been exhibited recently in
the show windows of Laubach's store here.
The instruments are an early English grand
in walnut and an Oriental grand model in
gold. During the past year Lehr pianos were
chosen for the new State Theatre, the Moose
Home, for several new high schools and other
public institutions. With the showing of the
two Lehr period models the company has dis-
played a partial list of local Lehr owners,
which comprises nearly 2,000 private homes,
as well as clubs and associations.
Aeolian Weber Dividend
The Aeolian Weber
York, has declared a
preferred on account
February to stock of
this year.
Piano & Pianola Co., New
dividend of 5 per cent on
of accumulations, payable
record on January 25 of