Music Trade Review

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Offensive Approach to Business in 1952
Best Defense Against Lagging Sales
by RAY S. ERLANDSON, President
National Association of Music Merchants
M
USIC retailers should step into
1952 on the offensive, and
confident that it will be a diffi-
cult year at best. One powerful factor
to be determined in the new year is the
consumer buying pattern. No one
knows what form it will take, but re-
tailers should not go wrong in estimat-
ing that it will take their best promo-
tional talents to sell goods under eco-
nomic conditions such as those prevail-
ing. This offensive approach is the btst
defense against lagging sales.
The economists will tell you that
savings are building up and thus there
is a good cushion of cash from which
consumer spending may spring at any
time. The only factor that could
"spring" greater consumer demand than
experienced in 1951 would be either
war, or its imminence. This is not gen-
erally expected to occur. The heavy
savings that consumers are supposed to
be hoarding is fallacious to a large de-
gree. These "savings" are not so much
liquid cash, as they are debt retire-
' ments which economists consider as
savings. Consumers have been retiring
their debts, which include expenditures
for durable goods, charge accounts,
home mortgage payments, and insur-
ance, etc.
1952 Should Look Like 1951
Without a war, or the increased pos-
sibility of one, I look for consumer
spending in the new year to be similar
to 1951. The Christmas sales will prob-
ably be good and not disappointing,
for that is the one time of year when
consumer purchases become recklessly
generous. This will sharply increase the
outstanding dollar total of charge ac-
counts and credit purchases, which will
require all surplus cash for repayment
in the first quarter of 1952. Thereafter,
business will be what we make it.
Governmental Activities
Not Favorable
Government actions will be anything
but a favorable factor in 1952, for
either retailers or consumers. Controls
are still the order of the day, and those
controls affect the supply of goods as
well as the ability to buy goods. Some
vague pattern of government intent and
action would be encouraging to both.
The Defense Production Act will expire
on June 30 and with it. wage, price,
material and all other controls now
governing the economy. What position
shall we take—allow controls to expire
—perpetuate them another year—or de-
vise a stand-by basis in the twilight
'between the two extremes? This is an
important question with good argu-
ments and logic on both sides. It should
not be determined, as most actions are,
—by mass hysteria—but unless the
problem is approached objectively—
hysteria will likely govern.
RAY
S.
ERLANDSON
but the crazyquilt now existing prom-
ises to continue. Daily from Washing-
ton are the calls for more controls—
less controls—controls are insufficient
to allay inflation—increased taxes—
stricter credit regulations are the pana-
ceas advocated. Unfortunately each
bureaucrat with an idea gets prominent
space in the news columns, with the re-
sult that the last one who sounds off is
the authority for the day.
1952 An Election Year
Despite governmental indecision and
workings at cross purposes, 1952 is an
election year and therefore an unusual
sensitiveness for the public good will
prevail and grow even more acute be-
ginning in the second half of the year.
Gontrols may be relaxed as much as
they dare be. and inflationary pressures
played down to give the electorate a
false sense of prosperity. Mo matter
how 1952 actually turns out. it may
have been worse had it not been an
election year.
Legislative Troubles Ahead
After Congress reconvenes, retailers
will have their direct problems with
government. There will be important
legislation upon which the retail indus-
try must take its stand and then fight.
More Tax Money Wanted
Amazing as it may seem, new taxes
will be asked—even demanded. New
taxes, without any effort to reduce non-
defense expenditures whatever their
nature. This may produce a bitter fight
in Congress. Added taxation in an elec-
tion year is repugnant to individual
politicians, but unfortunately it seems
easier to levy new taxes than to cut
paternalistic non-defense expenditures.
Closing loop holes in present taxes, re-
ducing depletion allowances and the
like won't produce sufficient new tax
monies to offset the expected budget
deficit. It's doubtful that corporation or
individual taxes will be increased,
which leaves but two sources of new
revenue—increased and new manufac-
turers excises or retail sales taxes.
Maybe Sales Taxes
While good common sense may dic-
tate the imposition of retail sales taxes
if needed revenue is so important, it
would be a bitter pill for the politicians
and the administration to swallow. Yet
this tax is the most sensible, for it is
paid by all consumers, proportionate
to their spending, and it is a tax which
all can see—unhidden and therefore
not forgotten—and one which the pub-
lic will demand be lifted when the
need no longer exists.
Retail Exemption Endangered
Mew and enormous efforts will be
made to kill the retail exemption under
the Fair Labor Standards Acts, and to
increase the present 75c per hour mini-
mum wage to SI.00 or more. Retailing
has fought hard, and so far effectively,
in preserving the retail exemption. The
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THE MUSIC TRADE REVIEW, JANUARY, 1952