Classic Mode

Presto

Issue: 1927 2133

Page 4 Text:

June 18, 1927.
PRESTO-TIMES
THE CONDITIONAL
SALES CONTRACT
The Character of the Forms Varies in Every
State in the Union and the Binding
Nature of the Contracts
Also Differs.
FIND COMPLICATIONS
While in Some States Processes Are Simple, Others
Have Contract Forms That Suggest Annoy-
ing Complexities for Dealer.
By C. J. ROBERTS,
Baltimore, President of the National Association of
Music Merchants.
Under the rule of common law, conditional sales
contracts are valid in every state and territory in the
Union, as to the original contracting parties, without
recording or tiling. In many states no recording or
filing of conditional sales contracts is required even
to hold title as against third parties. Where such
satisfactory conditions exist, it is quite plain that all
efforts to change the law should be resisted. It is
the simple, honest, man-to-man way to do business.
In such states the installment business, so far as the
contract is concerned, is simple. You enter into an
agreement with your customer, the agreement is put
in writing as a memorandum. Your customer either
eventually pays for the merchandise or you repossess
it.
In other states the laws have become complicated.
The necessity for recording or filing arises. Ordi-
narily this is intended as notice to "innocent" third
parties, and if properly done affords protection with
some exceptions.
The Exceptions.
Because of these exceptions and because the laws
of the various states differ so widely the American
Bar Association and other organizations have advo-
cated the enactment in all states of a uniform con-
ditional sales contract law. Such a law, so-called,
has been put on the statute books of a number of
states, but, even though termed "uniform," it varies
considerably in some details in the states in which it
has been enacted.
In states where a conditional sales contract is valid,
without recording, or filing, as to the original parties,
and affords protection from all other parties, the situa-
tion from our standpoint is perfect and should be let
alone. Usually laws enacted for the protection of
"innocent" third parties are invoked in the interests
of crooks. Too often laws intended to benefit the
honest man become the refuge of the criminal, or
those enacted to curb the criminal result frequently in
ensnaring the innocent.
Nature Is Various.
I will not attempt an analysis of the conditional
sales laws of the various states, for it would be im-
possible in the short time allotted me. even if I were
capable of doing it, but to show briefly how very far
we are away from anything like uniform laws as to
conditional sales in the various states, I call your
attention to a comparison of certain features of con-
ditional sales laws as to the various states according
to the authorities which I have hastily consulted,
which, however, are not entirely up to date, and which
in a number of cases may have been changed by
recently enacted laws.
Easy in These States.
In Arkansas, California, District of Columbia,
Idaho, Indiana, Louisiana, Massachusetts, Michigan.
Mississippi, Nevada, Oregon, Rhode Island, Tennes-
see and Utah, conditional sales contracts do not have
to be acknowledged, recorded or filed in order to hold
title.
Requirements Here.
In Alabama, Arizona, Delaware, Kansas, Maine,
Maryland, Massachusetts, Michigan, Minnesota, Mon-
tana. Nebraska, New Jersey, New York. Ohio, Okla-
homa, Pennsylvania, South Dakota. Texas, Vermont,
Virginia, Washington, West Virginia, Wisconsin and
Wyoming, it is necessary for a conditional sales con-
tract to be recorded or filed to hold title as against
third parties, though it need not be acknowledged or
proven.
In Georgia, Kentucky, Mississippi, Missouri. New
Jersey, North Carolina, North Dakota. South Caro-
lina and South Dakota, conditional sales contracts
must be recorded or filed to hold title as against third
parties and must be acknowledged or proven to be
recorded or filed.
In Florida, Iowa and New Mexico, either the
vendor or vendee must acknowledge in order that a
conditional sales contract mav be recorded, and it
must be recorded to hold title as against certain third
parties.
In Colorado, Connecticut, District of Columbia and
New Hampshire, a conditional sales contract to hold
title as against third parties must be acknowledged in
person by the vendee and be recorded or filed.
Poor Protection.
In Illinois and Louisiana, the extraordinary condi-
tion has existed that, even though a conditional sales
contract might be acknowledged and recorded, no pro-
tection was afforded as against third parties. There
have been some decisions to the contrary, and it may
be that the situation has been clarified.
In states where the use of a conditional sales con-
tract is not satisfactory other legal instruments, such
as leases, chattel mortgages, etc , are used.
In some jurisdictions where recording or filing is
too difficult or expensive, merchants simply secure
contracts, do not record or file, but take chances on
the honesty of their customers and try to exercise
good judgment in granting credits. I have even
known one moderately successful merchant to operate
without securing any contract at all, depending al-
most entirely upon his judgment of credits. Thought-
ful handling of credits and careful, intelligent methods
of collection will do more to keep a merchant out of
trouble and make him prosperous than all the laws
that could possibly be thought of.
Growth of Instalment Plan.
Up to a comparatively few years ago only a limited
number of commodities were sold on instalments—
principally articles of long life. In recent years 'the
deferred payment plan of selling has been extended
to include almost any and everything that costs more
than the weekly or monthly income of the average
family. Articles or commodities of short life are sold
on comparatively long time. This has helped to bring
about a serious state of affairs. The volume of such
business is tremendous. It is causing serious alarm
in business and financial circles. It is getting out of
bounds.
Good Commercial Security.
The best sort of commercial security or collateral—
the contract of a conditional purchaser of a long-lived
commodity was looked upon with disfavor, principally
because it was not understood and because it required
a little care and work to handle it intelligently. Then
came the finance and discount companies because
they were actually needed. The bankers have them-
selves to thank for the appearance of these rivals,
some of whom they now wish to put out of business.
The legitimate discount companies will continue to
do business, for they have a rightful place in the busi-
ness of the country. The illegitimate ones, conducted
by men who must be descendants of the money
changers whom the Master kicked out of the Temple
and whose methods when not ignorant are those of
a low-grade pawnbroker, will be eliminated.
Piano Desirable Subjects.
Pianos will continue to be sold on instalments.
They should, be. They are long-lived—some think
too long-lived for the good of the industry. Person-
ally, I think a piano cannot be made foo good, but
when a fine piano does eventually lose its sweet voice
and it cannot be restored, it should be destroyed—put
out of its misery to relieve the misery of those who
must hear it.
The financing of any industry must take into con-
sideration the manner in which the average ultimate
consumer pays for the finished unit. The piano busi-
ness is inherently a time business and always will be.
(When I refer to a piano, I wish it understood that 1
include other more or less expensive musical instru-
ments.) It has always been amusing to me to see
certain prominent manufacturers earnestly advocate
the cash basis for the piano business, for both the
manufacturer and the dealer, and sell their own prod-
ucts on two or three years' time or even longer time.
I especially recall one distinguished manufacturer
who year after year made a specialty of this.
Opposing Interests.
As I have suggested, powerful interests are at work
on the problem of curtailing instalment selling. While
very little will or can be done by the enactment of
new laws or the repeal of old ones, nevertheless
these activities will be reflected in the legislative halls
of the country.
Individuals can do but little to promote the passage
of just and favorable laws or to prevent the adoption
of unfavorable ones. That is where state associa-
tions come in, for, so far as business is concerned, we
operate mainly under state laws.
OTTO SCHULZ RETURNS
FROM EUROPEAN TOUR
Head of M. Schulz Company, Chicago, Arrives
on Monday of This Week from Enjoy-
able Trip Abroad.
Otto Schulz, president of 'the M. Schulz Company,
711 Milwaukee avenue, Chicago, returned this week
from a tour of Europe. Mr. Schulz sailed from
Boulogne, France, on the S.S. Hambord, on June
4. and arrived in Chicago on June 13. While he en-
joyed himself during the time he spent abroad, he was
glad to be back in Chicago. He also expressed re-
gret that he was unable to attend the music trade in-
dustries convention in Chicago last week.
Mr. Schulz, accompanied by Mrs. Schulz, visited
the big cities of Germany, Austria, France and Italy,
where trade conditions and particularly those of 'the
piano trade were observed. He was in a cafe in
Paris when Col. Charles A. Lindbergh ended his
famous flight, and took part in the tremendous ova-
tion given the intrepid flyer.
HARRY C. SIPE, TRAVELER,
CELEBRATES JUBILEE YEAR
Friends of General Road Representative for Adam
Schaaf Extend Their Congratulations.
Harry T. Sipe, general
traveling
representative
for Adam Schaaf, Inc..
Chicago, was a guest at
the Stevens Hotel the en-
tire week of the conven-
tion and was naturally "in
and out with the trade"
every afternoon at least,
allowing for attendance
at the various sessions.
He was busy escorting
dealers to and from the
Adam Schaaf offices and
showrooms at 319-321
South Wabash avenue.
Mr. Sipe was assisted
during the week by I. P.
Nelson,
whose
home
town is Montpelier, Ind.,
ind who is an Adam
Schaaf traveler in the
western
and
central
HARRY C. SIPE
states.
The year 1927 is something of a jubilee year for
Mr. Sipe and he is celebrating, whenever the right
opportunity occurs, his twenty-first year with Adam
Schaaf. Back of his connection with Adam Schaaf
Mr. Sipe has had a long and enviable record of work
in the music trades and industries, having been in
the employ of the Western Cottage Organ Co., at
Ottawa, III.: Keller & Van Dyke, Scranton, Pa., and
Ludden & Bates, Savannah and Atlanta, Ga. Mr.
Sipe's entire business life has been spent in selling
R. B. OSLUND'S PLEASURE
RIDE TO CONVENTION
Found Roads Excellent on Trip Which Extended to
New York and Other Parts East.
One of the interesting callers at Presto-Times office
this week was R. B. Oslund, head of 'the Oslund
Piano House, Spokane, Wash., who was on his way
home in his new Willys-Knight sedan.
Mr. Oslund drove to the convention in Chicago in
"train time," and at the close of the meeting con-
tinued on to New York. Except for a short stretch
in Montana, he rode on hard roads all the way.
Mr. Oslund was eager to get home to help out in
an amazingly busy spell of business which began
June 1. He said they have been having satisfactory
piano sales since the opening of spring, but the stimu-
lation which hurries him home is something out of
the ordinarv in its extent.
FRED FIRESTONE IN CHICAGO.
Fred Firestone, formerly active in Chicago music
trade circles and who drifted to Florida to engage
BUYS HERRIN, ILL., STORE.
in real estate operations two or three years ago and
C. W. Fisher, of Herrin, 111., who for many years who came back to his old love, the music business,
has been the Jesse French & Sons piano dealer there, not long since, was in evidence during the conven-
has bought the L. L. Livedey Music Store in the tion. He has joined the forces of the great Platt
Unicn Block on South 14th Street, and will continue Music Co., Los Angeles, where he has plenty of
to operate it. He states that he will strive to give opportunity to "show his mettle." Mr. Firestone has
the best of service and maintain most liberal prices not a very good word for the Florida real estate
on Jesse French & Sons pianos and smaller musical business and much prefers the music business "as is"
today to Florida speculation in real estate.
instruments.
Enhanced content © 2008-2009 and presented by MBSI - The Musical Box Society International (www.mbsi.org) and the International Arcade Museum (www.arcade-museum.com).
All Rights Reserved. Digitized from the archives of the MBSI with support from NAMM - The International Music Products Association (www.namm.org).
Additional enhancement, optimization, and distribution by the International Arcade Museum. An extensive collection of Presto can be found online at http://www.arcade-museum.com/library/

Page 5 Text:

June 18, 1927.
PRESTO-TIMES
have in mind a policy issued by one of the large fire
insurance companies that protects both the dealer
and the customer against loss by fire, regardless of
where the merchandise may be located, and against
breakage in transit, at any time, even though the
customer may move without notice to the insurance
company or the dealer. Such liberal protection
It Enables the Music Merchant to Realize the should represent quite an inducement to the customer,
and the cost to the dealer is not great.
Same Net Profit on His Installment
There is some difference in opinion among retail
Business That He Does on
music merchants as to what constitutes a fair carry-
His Cash Trade.
ing charge, but most of the larger houses have agreed
on a charge of 50 cents a month on each $100 of
deferred balance. Thus, if the retail cash price of an
A GOOD COLLECTOR
instrument is $650 and there is a trade-in allowance
of $75 and a cash payment of $75, making a total
It Saves Office Overhead, Avoids Sending Bills to a credit of $150, the balance which the customer wishes
to defer over a period of, say, 24 months, amounts to
Large Number of Customers and Helps to
$500. A charge of 50 cents per $100 of the deferred
Increase Size of Down Payment.
balance will in this case amount to $2.50 a month
and for 24 months the total charge will be $60. When
By W. LEE WHITE,
we reach this point we find that there are two dif-
Treasurer of the Bankers-Commercial Security Com- ferent methods now in use of incorporating this $60
carrying charge in the contract.
pany, Inc., New York.
MERITS OF THE
CARRYING CHARGE
THRONG SEES THE BLUE
RIBBON LINE OF PIANOS
Hobart M. Cable Display at the Convention
Last Week Was Big Attraction at the
Annual Convention at the Stevens.
One of the most frequently visited of the conven-
tion exhibits was that of The Hobart M. Cable Com-
pany. LaPorte, Ind., which had its entire new Blue
Ribbon line grouped in a most interesting and attrac-
tive setting on the ninth floor of the Stevens Hotel.
Blue Ribbon pianos are a new departure in piano
manufacturing.
Designed and finished like fine
furniture, they match the furnishings of every type
of home. Each Blue Ribbon model is an instrument
of striking individuality, summarized in the distinc-
tive name appearing on the fall board.
There is a rich beauty about the cases of these
pianos that it is impossible to describe or even to
portray in. pictures. The grain, particularly in the
walnut cases, is so unusually beautiful and so per-
fectly matched, that many were the expressions of
approval and delight heard from music dealers whose
long experience makes them well qualified to judge
piano values. These instruments are furnished in
the new high light, or two-tone blended finish, to
order. The tone of the instruments of this new Blue
Ribbon line is of the same exquisite quality that has
always been the hall-mark of Hobart M. Cable instru-
ments.
The Song Bird, 3 foot 8 inch upright—"the baby
piano with the full sized Hobart M. Cable tone"—
and The Patrician—the newly perfected 5 foot 2 inch
baby grand—claimed the lion's share of attention.
The other models composing the Blue Ribbon line
are The Conservatory, 4 foot 4 inch upright, and The
Aristocrat. 4 foot 4 inch interpreting player-piano.
All genuine Blue Ribbon instruments carry a 3-inch
replica of the original gold medal awarded Hobart M.
Cable pianos for superiority. The medal proper is in
bright gold finish and has attached to it ribbons in a
shade of rich royal blue.
Something out of the ordinary was the little player-
piano case, 3 feet 8 inches high, in walnut, which
was exhibited "in the white" to show the quality and
beautiful grain of the veneers used by The Hobart
M. Cable Company. This unique display was exam-
ined with much interest by the many visitors.
The Methods.
The first method, which is used by some of the
dealers in California and which is better adapted for
use in that state than in most other states because of
certain rather unique provisions of its laws, is to
divide the $500 deferred balance into 24 equal pay-
ments of $20.83 each and then provide in the contract
for the payment of $2.50 additional each month as an
accommodation or carrying charge. There are sev-
eral objections to this method, the first and most
important of which is that it probably conflicts with
the laws of a majority of the state. A second objec-
tion is that it gives the customer two amounts to
remember each month and also increases the work
of the bookkeeping and collection departments.
Collection managers operating under the carrying
charge system have found that the inducement of a
rebate to the customer on anticipated payments has
worked wonders with their collections. I want to
warn you, however, at this point that no mention of
any rebate of carrying charge should be made in the
contract. A customer may prove to be so conten-
tious with respect to collections or may cause your
service department so much extra work over unfair
complaints, or for other reasons the account may
prove to be so expensive to handle that you may not
care to give that particular customer a rebate even
though he may anticipate a payment or two. But
There are many other reasons why the carrying the principal reason why no mention of it should be
charge should be adopted by the music dealer. It made in the contract is that it would affect the value
creates customer's good will after the sale has been of the contract in the eyes of bankers, as it is impos-
consummated by elimination of the irritating and sible to set a value an any contract which provides
A HARDMAN, PECK & CO. CONTEST.
ever changing interest item on monthly bills. It for a rebate under certain contingencies, because no
saves office overhead by reducing the bookkeeping one can tell in advance whether the contingencies
Beginning Tuesday, June 15, from 7 to 8 p. m..
burden and in other ways. It is a wonderful aid to will or will not occur.
Eastern daylight saving time, Stephen Czukor of the
the dealer's collection department, as the rebate that
Except for uniformity of method in writing the piano division of Hardman, Peck & Co. inaugurated
is customarily given stimulates customers to antici- carrying charge into the contract, it is too much to through Station WRN'Y a Music Appreciation Con-
pate payments. It also encourages the customer to expect that retail installment contracts in use by test especiallj' for the children attending public
increase the amount of the cash down payment, and merchants in different states can be made wholly schools. A special prize will be given to every one
last and most important, it makes the dealer's install- uniform until we have uniform state laws with respect
who will give the correct names of 75 per cent of
ment accounts self-supporting, and if his situation is to conditional contracts of sale and/or chatel mort- the selections played or sung. In answering it will
such that he can use additional capital to advantage, gages. Some day the Uniform Conditional Sales be necessary to mention the number of the public
the carrying charge covers the cost of financing the Act, now the law in eight states, will be as uni- school the child attends, the class to which they be-
paper.
long and their names in full. The prizes are being
versally adopted as the Negotiable Instruments Law
The Other Side.
or the Bulk Sales Act is now, and then it will he offered by Hardman, Peck & Co., and letters should
There is but one argument that is advanced against possible to have uniform installment contracts in all be addressed Music Appreciation Contest. 433 Fifth
avenue, New York Citv, or Station WRNY.
(Continued on page 8.)
the carrying charge by music dealers, and every
dealer that I have heard advance it has also admitted
the foregoing advantages. This one objection is that
the carrying charge will create sales resistance. For
a good many years I have watched the workings of
the carrying charge in the automotive, washing ma-
chine, vacuum cleaner and other industries, and it is
a fact that it does not create resistance to the sale
of these classes of merchandise. From the end of
1923 to the end of 1925, sales of washing machines
In a recent sales com-
increased 16 per cent: vacuum cleaners, 11 per cent;
mechanical refrigerators, 450 per cent; all of which petition among Chickering
dealers, the J. L. Hudson
merchandise is customarily sold with a carrying Company,
of
Detroit,
charge. During this period sales of pianos showed
Mich., earned the most
no increase whatever.
points from sales of Chick-
To those who still insist that the carrying charge erings and the Ampico in
cannot be adopted by the music merchant without the Chickering, and were
seriously injuring his sales, I can only say that in the awarded a silver loving cup
last analysis it comes down to a question of sales- by Chickering & Sons for
manship. If the salesman has created a real desire on their showing. The photo-
the part of the customer for the merchandise in ques- graph above shows the
tion, neither competitors nor carrying charges are members of this progres-
going to upset the sale, but where the salesman has
sive sales organization.
sold "terms" instead of merchandise or has failed to Top row, left to right: L.
create a real desire on the part of the customer for
C. Huntoon. H. B. Wilkin-
the particular merchandise, any minor matter is. of son, R. F. Vaughn, C. M.
course, liable to disturb the negotiations.
Smith, C. V. Lyons, H. C.
Newlin. Seated, left to
The Hesitating Dealer.
right: S. J. Whitney, O.
To the dealer who would like to adopt the carrying A. Lovell, C. H. Kesler,
charge, but is still hesitant because of the sales Harry Mascracken, Joseph
resistance bugbear, I suggest that he make his retail Fisher.
contract more attractive to the customer by the in-
sertion of insurance protection in the contract. I
To those to whom the subject of the carrying
charge may be entirely new. it might be stated at the
beginning that the carrying charge is a sum of money
added to the cash retail price of the merchandise and
represents the theoretical cost to the dealer of ex-
tending to the customer the convenience of time pay-
ments. It has been adopted by practically every
industry selling at retail on the installment plan, ex-
cepting the music industry.
The very best reason for its adoption by the music
industry is its essential fairness to all parties con-
cerned in the transaction. It is fair to the installment
customer because it represents a reasonable charge
for the service and accommodation he is getting from
the dealer. It is fair to the cash customer because it
relieves him of the necessity of contributing, as he
has done in the past, to the cost of installment sell-
ing. It is fair to the dealer because the expense of
selling and collecting on the installment plan con-
stitutes a burden the cost of which is very much in
excess of the 6 per cent per annum that most dealers
are charging their time customers, and there is no
good reason why the dealer should contribute any
portion of his legitimate net profit to the cost of the
accommodation extended the installment purchaser.
In other words, the dealer is entitled to make the
same net profit on a sale to an installment customer
as he makes on a sale to a cash customer.
A WINNING SALES STAFF
Enhanced content © 2008-2009 and presented by MBSI - The Musical Box Society International (www.mbsi.org) and the International Arcade Museum (www.arcade-museum.com).
All Rights Reserved. Digitized from the archives of the MBSI with support from NAMM - The International Music Products Association (www.namm.org).
Additional enhancement, optimization, and distribution by the International Arcade Museum. An extensive collection of Presto can be found online at http://www.arcade-museum.com/library/

Download Page 4: PDF File | Image

Future scanning projects are planned by the International Arcade Museum Library (IAML).

Pro Tip: You can flip pages on the issue easily by using the left and right arrow keys on your keyboard.