Music Trade Review

Music Trade Review -- © mbsi.org, arcade-museum.com -- digitized with support from namm.org
DECEMBER 11,
1920
THE MUSIC TRADE REVIEW
SOME RULES FOR THE GRANTING OF
CREDITS IN THE MUSIC TRADE FIELD 1
J, H, Tregoe, Secretary-Treasurer of the National Association of Credit Men, Points
Out Some Salient Factors Which Apply to the Present Credit Situation
Him
An appreciation of economic laws and organ-
ization has been neglected in our country for
the reason that in times of depression or strain
there is a breaking down of some principles
and a commission of mistakes which react un-
favorably and unnecessarily on the credit struc-
ture. We have lacked backbone in the face of
serious problems. We have done things which
never would have been considered in sane
periods, and we wonder when this temperament
will be rectified and the American business man
stand for the very highest and the most con-
structive ideals when the currents are not mov-
ing in his direction.
The seller's market through which we have
passed produced interesting situations and,
though the opportunities for driving hard bar-
gains and escaping hard contracts were fre-
quently availed of, yet such a market enabled
us to correct some weaknesses in credit grant-
ing. Terms were abbreviated, a very necessary
feature whenever the country is passing through
an unusual period, and it has become customary
to use credit as capital. The seller's market
blso permits the opportunity of restraining
trade abuses and they have become legion in
the credit commerce of our nation. Coincident
with the coming in of the deflation period, a
period of deep anxiety which requires skillful
treatment, the market reverted once again into
the hands of the buyers. Conditions were re-
versed with the slowing down of business and
with the consuming public on a strike. Noth-
ing depresses merchants more than a lack of
orders, a slowing down of the plant with the
attendant unemployment. In order to keep
the wheels moving, in order to produce busi-
ness, the temptation is very strong not only
to cut prices but to sell terms. Herein is one
of the gravest dangers in any trade, especially
Underwood & Underwood
J. H. Tregoe
so in the music trade. Previously long terms
had been allowed the purchaser. Financing pur-
chases of this type requires extensive capital
and credit. The turnover is not sufficient and
profits can alone be made by overstrain. A
return to this situation must be avoided, no
matter how strong the temptation is to sell.
Credits must be kept liquid whilst the nation
is passing through its recuperative period, and
every enterprise not observing this principle
and using too much of the nation's available
credit is merely retarding the recuperative
process and holding us back from a complete
restoration.
We cannot emphasize too strongly, therefore,
the confinement of competition to values alone.
Terms mustn't be sold. Should business move
slowly, should the very bottom appear to have
dropped out of things, character must stand
the strain and hold fast to manly practices.
Watching the various trends and currents in this
crisis of the nation's industrial affairs, the
earnest appeal to hold fast should be heeded.
Getting adrift, returning to old conditions, sell-
ing terms and doing the unwise and uneconomic
thing would be very unfortunate for merchants
and the nation. We are not overplaying in this
brief message the seriousness of matters. We
are not endeavoring >to throw the least fear into
the heart of anyone. We cannot discount the
real seriousness of our present crisis, and yet,
with fundamental conditions absolutely sound,
we must merely pass through a recuperative
period, and good sense dictates the giving of
every assistance we can to the patient. A good
grip on ourselves and every looseness cast to
the winds will build an American spirit of which
we may be very proud.
minium
THE PROCESS OF READJUSTMENT
MUST BEGIN WITH THE FARMER
The Downward Revision of Present Prices Cannot Be Successfully Accomplished
Until the Farmers Lower the Prices of Their Crops, Says J. Harry Shale
iiiiiiiiiiiiiiiiiiiiiiiiiiiii
J. Harry Shale, treasurer of the A. B. Chase
Piano Co., Inc., whose wide business and finan-
cial interests make his opinions on business con-
ditions of genuine value, holds to the viewpoint
that there cannot be any downward adjustment
of prices, or any marked decrease in the high
cost of living, until the farming element in many
sections of the country come to a realization that
the war is over and that wartime prices for farm
products cannot continue. In talking to The
Review, Mr. Shale said;
"No sound price reduction or adjustment is
possible in this country so long as the farming
element continues its present boycott of the pub-
lic and of industries in an effort to realize ex-
orbitant prices for farm products. So long as
the farmers are able to hold such products as
cotton and wheat for higher prices on a specula-
tive basis there can be no general adjustment of
living or production costs in any part of the
country. The attitude of the farmer is a funda-
mental problem to be considered in any such
adjustment. Agriculturists fail to realize that,
with Other countries getting their affairs into
better shape, they are facing competition in the
marketing of wheat, cotton, grain and other
products, and are taking a chance on a sudden
deflation that will undoubtedly cause more loss
Illllllllllllllllllllllllllllllllllllllll
to them than they would suffer by taking a fair
profit now on their present crops.
"In this scheme of readjusting the country's
J. Harry Shale
•
Illlllllllllllllillllillllllllllllllllllllllllllllllllllll
living and production status, certain losses must
be taken right along the line, and if the various
factors face the situation honestly the individual
losses will prove more or less immaterial. If
the farmer will start the ball rolling the indus-
tries will certainly follow. At the present time,
with the South and West crying about the low
prices being offered for grain and cotton, the
fact is generally known that the people of those
sections have more real money right now than
ever before in their history. On top of this we
find agriculturists with money in the bank ask-
ing credit from banks in order to carry their
crops over to a time when they can force a
better market. The solution of this problem is
for the banks to insist upon the farmers financ-
ing their own speculative operations, and refus-
ing to extend loans for such purposes. This
attitude on the part of many of the country's
banks has already been made evident, and we
may rightly expect to see some beneficial results
very shortly.
"So-called price reductions at the present time
are almost without exception fictitious and based
on unsound principles. The remedy lies not in
going from the top down, but in starting at the
bottom and reconstructing and readjusting from
(Continued on page 9)