Music Trade Review
Issue: 1930 Vol. 89 N. 11 - Page 3
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IHMuacirade Review
Serving
Published Monthly
]'I:I)I.II\TKI) BUSINRSS PUBLICATIONS, INC.
120 Lexington Ave.
New York
Music
( jf5«Mw^
the Entire ^ ^ P H
Vol. 89
Single Copies
Twenty Cents
Annual Subscription
Two Dollars
Industry
November, 1930
No. 11
No Excuse for
en
. .
1 essimism
essimi
Jjusl
usiness
.Says EDWARD E. SHUMAKER
President RCA-Victor
Co., Inc.
Here is a message of sound optimism based on facts that should
renew the courage and the confidence of thousands of business
men. The country is sound fundamentally and is suffering
chiefly from a change in the state of mind, says Mr. Shumaker.
E. E. Shumaker
In tin- following address, which he delivered before
the Merchants Association of New York on October
2'}, Kdvvard K. Shumaker, president of the RCA-
Victor Co., Inc., analyzed the existing business situa-
tion and the prospects so logically and capably that
The Review feels it a privilege to publish the entire
address for the benefit of the members of the music
industry. Hemp; head of a company producing
musical products, Mr. Shumaker may be considered
an outstanding member of the industry and hi?
views, declared to be those of a pessimist who can
find nothing to be pessimistic about, are well worth
careful consideration by business men generally.—
Kditor's note.
T is said that an optimist is a man who can
sec a light where there is none and that a
pessimist will blow it out. 1 have also
heard that sonic men are such dyed-in-thc-
wool optimists that they will buy hair tonic
from a bald-headed barber.
Ever since we inaugurated the "Back to
Work" movement in Caniden, 1 have frequently
been asked why I was an optimist. My reply
was that I am not an optimist but that by nature
T am a pessimist. I am like the old man who
said he had many troubles but most of them
never happened.
Because by nature I am pessimistic and, there-
I
fore, inclined to look on the dark side of things,
I have delved deep during the past months look-
ing for trouble and, in so doing, discovered
that down beneath the troubled surface, down
among the fundamentals, conditions were much
better than I anticipated. I found, at least to
my satisfaction, that the causes for the present
depression have been removed and that what
the people and business of our country now
need is Confidence, in order that we may have
an early recovery.
In arriving at this conclusion, it was neces-
sary in the first place to determine the principal
cause for the depression which I think you will
agree was overconfidence and the belief on the
part of the public and industry generally that
the boom times of 1927, 1928 and. 1929 would
last indefinitely. This overconfidence resulted
in overexpansion, overproduction and all the
attendant evils to which there was but one
answer—we had to slow clown. A depression
was the result, which was aggravated and has
already continued longer than the cause war-
ranted, largely because of the complete change
in our state of mind. Last Fall we were brimful
of confidence. Today we are afraid of our
shadows.
Business, after all, reacts very much like a
human being. When a man is perfectly well,
he frequently lives at a rapid pace. He is over-
confident of his strength and lays the foundation
for ill health while he is well. In due course,
the inevitable happens. He becomes ill and is
put to bed. The cause for his illness is now
removed and nature docs the rest. He feels
veil again, but has learned a lesson. He is cau-
tious and lacks confidence. By and by, however,
he gains faith. His confidence is restored and
he lives properly for a time. As a result he
again glows with health and strength, becomes
careless and passes through another cycle.
1 believe that the causes for our business ills
have been removed; that time has effected a
cure and that what we now need is Confidence.
My reasons for believing this are that distribu-
tion has shown considerably less decline than
production, with the result that merchandise in-
ventories in warehouses and stores generally
have been reduced to a very low level, and that
while purchases—particularly instalment pur-
chases—have fallen off very materially, instal-
ment payments, I understand, have been main-
tained surprisingly xvell. This to me means that
the instalment purchaser, while in that opti-
mistic state of mind, probably obligated himself
toe far ahead and, when the crash came, stopped
buying and has since devoted his income to
meeting his instalment payments. Since these
obligations have been largely discharged, these
same people and the public generally who,
through fear of the future had curtailed their
purchases to a minimum, would of necessity
begin buying just as soon as they had a little
encouragement and reason to expect that their
economic situation would improve or, at least,
not become worse. I hear many people saying
that they need this or that but that they would
wait until times became better before buying—
and this covers the entire range from shoes to
automobiles.
Only State of Mind Has Changed
W r e as a people have not during the past year
lost our desire for comforts and luxuries. Our
natures have not changed, only our state of
mind has changed from extreme optimism to
gloomy pessimism. This is further indicated
by the fact that savings accounts are growing,
(I'lease turn to page 4)
IHMuacirade Review
Serving
Published Monthly
]'I:I)I.II\TKI) BUSINRSS PUBLICATIONS, INC.
120 Lexington Ave.
New York
Music
( jf5«Mw^
the Entire ^ ^ P H
Vol. 89
Single Copies
Twenty Cents
Annual Subscription
Two Dollars
Industry
November, 1930
No. 11
No Excuse for
en
. .
1 essimism
essimi
Jjusl
usiness
.Says EDWARD E. SHUMAKER
President RCA-Victor
Co., Inc.
Here is a message of sound optimism based on facts that should
renew the courage and the confidence of thousands of business
men. The country is sound fundamentally and is suffering
chiefly from a change in the state of mind, says Mr. Shumaker.
E. E. Shumaker
In tin- following address, which he delivered before
the Merchants Association of New York on October
2'}, Kdvvard K. Shumaker, president of the RCA-
Victor Co., Inc., analyzed the existing business situa-
tion and the prospects so logically and capably that
The Review feels it a privilege to publish the entire
address for the benefit of the members of the music
industry. Hemp; head of a company producing
musical products, Mr. Shumaker may be considered
an outstanding member of the industry and hi?
views, declared to be those of a pessimist who can
find nothing to be pessimistic about, are well worth
careful consideration by business men generally.—
Kditor's note.
T is said that an optimist is a man who can
sec a light where there is none and that a
pessimist will blow it out. 1 have also
heard that sonic men are such dyed-in-thc-
wool optimists that they will buy hair tonic
from a bald-headed barber.
Ever since we inaugurated the "Back to
Work" movement in Caniden, 1 have frequently
been asked why I was an optimist. My reply
was that I am not an optimist but that by nature
T am a pessimist. I am like the old man who
said he had many troubles but most of them
never happened.
Because by nature I am pessimistic and, there-
I
fore, inclined to look on the dark side of things,
I have delved deep during the past months look-
ing for trouble and, in so doing, discovered
that down beneath the troubled surface, down
among the fundamentals, conditions were much
better than I anticipated. I found, at least to
my satisfaction, that the causes for the present
depression have been removed and that what
the people and business of our country now
need is Confidence, in order that we may have
an early recovery.
In arriving at this conclusion, it was neces-
sary in the first place to determine the principal
cause for the depression which I think you will
agree was overconfidence and the belief on the
part of the public and industry generally that
the boom times of 1927, 1928 and. 1929 would
last indefinitely. This overconfidence resulted
in overexpansion, overproduction and all the
attendant evils to which there was but one
answer—we had to slow clown. A depression
was the result, which was aggravated and has
already continued longer than the cause war-
ranted, largely because of the complete change
in our state of mind. Last Fall we were brimful
of confidence. Today we are afraid of our
shadows.
Business, after all, reacts very much like a
human being. When a man is perfectly well,
he frequently lives at a rapid pace. He is over-
confident of his strength and lays the foundation
for ill health while he is well. In due course,
the inevitable happens. He becomes ill and is
put to bed. The cause for his illness is now
removed and nature docs the rest. He feels
veil again, but has learned a lesson. He is cau-
tious and lacks confidence. By and by, however,
he gains faith. His confidence is restored and
he lives properly for a time. As a result he
again glows with health and strength, becomes
careless and passes through another cycle.
1 believe that the causes for our business ills
have been removed; that time has effected a
cure and that what we now need is Confidence.
My reasons for believing this are that distribu-
tion has shown considerably less decline than
production, with the result that merchandise in-
ventories in warehouses and stores generally
have been reduced to a very low level, and that
while purchases—particularly instalment pur-
chases—have fallen off very materially, instal-
ment payments, I understand, have been main-
tained surprisingly xvell. This to me means that
the instalment purchaser, while in that opti-
mistic state of mind, probably obligated himself
toe far ahead and, when the crash came, stopped
buying and has since devoted his income to
meeting his instalment payments. Since these
obligations have been largely discharged, these
same people and the public generally who,
through fear of the future had curtailed their
purchases to a minimum, would of necessity
begin buying just as soon as they had a little
encouragement and reason to expect that their
economic situation would improve or, at least,
not become worse. I hear many people saying
that they need this or that but that they would
wait until times became better before buying—
and this covers the entire range from shoes to
automobiles.
Only State of Mind Has Changed
W r e as a people have not during the past year
lost our desire for comforts and luxuries. Our
natures have not changed, only our state of
mind has changed from extreme optimism to
gloomy pessimism. This is further indicated
by the fact that savings accounts are growing,
(I'lease turn to page 4)
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