13
PRESTO
June 14, 1924.
PHENOMENA OF
TRADE DEPRESSION
C//ie
Ray Vance, in Convention Address, Swatted
Hoary Theories Accounting for Slumps
and Cited Causes for Present Con-
ditions.
CHEERFUL FORECAST
ARTISTIC
Expert of Economic Service Says Fundamentals Are
Sound and Fall Should Bring an Upward
Movement.
IN EVERT
DETAIL
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CHICAGO
Piano men know when the prospects do not react
as quickly as expected to the suggestions and propo-
sitions of the advertising and they begin to look for
causes when the period of indifference is prolonged.
When a time of poor sales succeeds one of lively
business the piano man, like other business men
under like circumstances, calls the condition a slump,
lie knows it is there and that it hurts, but he seldom
analyzes the phenomena of depressed business in an
expert way.
That was done for him at one of the convention
noonday luncheons last week when Ray Vance, of
Brookmire's Economic Service, swatted some the-
ories and advanced others to show the whyness of
business depression. To know how far a slump will
carry, he said you must first find out what caused
the slump.
The Expert Opinion.
*
——
"1 have never been able to accept some of the
theories regarding business slumps which are quite
common in the country today," he said. "For ex-
ample, I can not believe that the slump in which we
find our business today is some kind of a punishment
for the economic sin of having had too much pros-
perity during the war years. Neither do I believe
that business activities of themselves work automat-
ically through some kind of a cycle of improvement
and prosperity and liquidation and then depression,
and that that happens no matter what human be-
ings may do."
Mr. Vance said the business cycle was a hide-
bound phrase we had better throw away. "Business
has times when it is relatively good and we call it
prosperity. That is a relative term. And then by
another relative term we go down from that and
we have depression, and in between prosperity and
depression on the way down there is a downward
movement naturally. We can call that a liquidation;
and going up there is an upward movement which
we can call improvement. That is all that a business
cycle is, and that doesn't take you very far in know-
ing how long a business depression is going to last."
Find the Symptoms.
What you'have to do is to find the symptoms, con-
tinued Mr. Vance. What is the cause of the pres-
ent business slump? Well, you are the cause of the
present business slump, or I am the cause of the
present business slump. The thing that causes de-
pression is the activities of you and I and some hun-
dred million other people like us. We create these
unfavorable, unhealthy conditions in business, and
then we have a depression. If we are going to have
a depression, one of the symptoms which appears
is an excessive amount of speculation. We had
that last winter. It began in the latter part of the
fall of 1923 and by January and February we had
decidedly excessive speculation. That was one of
the symptoms of the coming of the slump. Another
thing, another symptom of the coming of the slump
is the production and bringing into the domestic
markets of any country more goods than necessary
to maintain the average standard of living of that
country. When that happens unless there is some-
thing remarkable going along to furnish purchasing
power, you are going to have goods piling up and
laying the seeds for a slump.
The Factors in Slump.
Now, these two factors were two of the greatest
of all factors in producing the slump in which we
find ourselves at the present time. Between Decem-
ber, 1923, and January, 1924, we had the greatest
increase in physical volume of goods produced in
the United States that has ever been seen during
the past twenty-four years. Instead of exporting
any particularly large percentage of that excessive
supply of goods, we kept on importing more than
normal, relative to the goods being exported.
Music Trade Effects.
You fellows know if you keep statistics in your
own association what it means if you suddenly begin
to turn out a tremendously greater number of musi-
cal instruments than are necessary to maintain the
average buying. You do it for a few months, and
then all the dealers are stocked up and you have a
slump. That is what is happening to the country as
a whole. You had the further bad sign that you
were not exporting but rather importing an exces-
sive amount of goods.
This slump is not something that is mysterious and
uncaused; it is something that arose from that fact
—we speculated a little too much, we produced a
tremendous amount of over-supply of goods for an
ordinary business movement, we imported more
goods than we should have imported.
The Forecast.
I can tell you this as a business forecaster: funda-
mentals are so sound that it seems almost impossible
that we shall fail to start another upward movement
in the fall t)f 1925.
MUSIC AND BETTER HOMES.
The contribution of music and music interests to
the movement for Better 1 fomes in America is indi-
cated by the participation in the activities by many
music clubs and by associations within the movement
of the Music Industries Chamber of Commerce. The
movement for Better Homes in America, launched
two years ago, has been placed on a permanent basis
with headquarters in Washington and a financial
backing of $300,000 contributed by the Laura Spell-
man Rockefeller Foundation. The movement is in-
corporated as a public service corporation. Secretary
Herbert Hoover of the Department of Commerce is
secretary.
BRANCH STORE SUCCESSFUL.
The Hoffman Piano Co.'s branch store in Tona-
wanda opened in February is now assured of future
business in that locality. Charles IT. Hoffman said
this week: "There is no doubt that business at the
branch will be substantial. Residents of the town
are not floaters; they are, in a great majority, estab-
lished and owners of their homes, which makes this
a good field for a music merchant."
NEW ST. LOUIS WAREHOUSE.
St. Louis, Mo., now has a high-class and commo-
dious piano warehouse for the trade and the public.
The St. Louis Piano Moving Co., of which C. Iver-
son is president, has taken orer the five-story and
basement fireproof building at 1011 Chestnut street
for that purpose and is now doing business.
"Built on Family Pride"
Doll & Sons
Represent the Artistic
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