Automatic Age

T he A
u t o m a t ic
Government were able to report
a Profit.
The fact that more than two hun-
fed thousand corporations made a
Profit during’ 1924 may look as
|h°Ugh American business during
”at year, at least, was anything but
^Profitable. But it must be remem-
be*ed that many of these 236,000
C0lfipanies made only a very small
Profit—just enough to get themselves
‘Eluded in the group of the success-
organizations. Tens of thousands
°f corporations just barely made
Enough profit to escape getting into
ink. Their profits were wholly
^adequate and grossly out of pro­
portion to what they should have
»nade.
further, it should be noted, that
the 417,421 concerns in question are
c°rporations. There are at least a
pillion small businesses in the United
States not covered in Mr. Frederick’s
analysis. If these small businesses
^®re audited, it would be found that
dot anywhere near 56 per cent of
them were efficient fx*om the money­
making standpoint. Probably not
^ore than 10 per cent of them made
dioney in proportion to the size and
Possibilities of their business.
Another thing to remember is that
the figures we have been discussing
are for the year 1924. Business dur­
ing 1925 and 1926 was successful
^hen viewed from the angle o f sales,
k**t it is the consensus of well-in­
formed persons that the net profits
°n these sales have been steadily de­
fining during the last two years.
A ge
67
are made only by a few top-notch or­
ganizations in each industry.
What is the remedy for this con­
dition? The best way to find a rem­
edy is first to locate the cause of the
condition. What, then, is the cause?
Quite clearly it is competition. Why
isn’t the corner grocery making
money? Simply because there are
too many other grocery stores in the
community. There isn’t enough gro­
cery business to support all the
stores in the field. The more effi­
cient type of stores run up enough
volume to pay their expenses and to
make an adequate profit on the in­
vestment. In the meantime the other
grocers balance their ledgers in red.
And take the hardware dealer.
He, too, is suffering from competi­
tion. His competition does not nec­
essarily come from other hardware
stores. Rather does it come from
department stores, five-and-ten-cent
stores, sporting goods dealers, elec­
trical appliance dealers, mail-order
houses, house-to-house canvassers,
and all that other myriad of compet­
itors against which the hardware
merchant is constantly contending.
Examine the conditions in any
other line that you may care to men­
tion. Take a manufacturing enter­
prise as an illustration. Unless the
company under examination is one o f
the fortunate few that are making
big profits, it will be found that the
company we are looking into is being
strangled by competition.
Well, then, what can we do about
competition? It looks like a most
serious difficulty. Offhand it might
I am not posing as an alarmist,
seem that the only way to get rid o f
business in this country is funda­
it would be to put a hundred thous­
mentally sound. The opportunities
and or so superfluous stores out o f
for commercial
achievement are
existence and to scrap the country’s
greater today than they ever were,
business is now on a higher and * idle and unnecessary manufacturing
capacity. For a time such a drastic
^nore ethical plane than at any time
in history. But there is something remedy might give relief. If the
business to be had were then diveded
''vx’ong when it is necessary for the
average business to operate at a loss among the very much smaller num­
ber of concerns in existence, there
and when really substantial profits
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