A Bad Name By Eldridge Reeves Johnson, Pres. Victor Talking Machine Co. harm to date than the total of all effort has accomplished in the matter of educating the public to the fact that the standardization of prices in any one line of articles bearing the same maker's name, is a sound, honest, worthy business policy and not an insidious method of raising and maintaining prices unduly high. A far better title would be "The Standardization of Fair Prices." From the "Code of Hammurabbi" (Khammurabbi - Hammurabbi, the Amraphel of the Old Testament), to the Sherman law, legislators have been trying to produce laws for the satisfactory regulation of trade, but it is a bit discouraging when we learn that while there are over 50,000 such laws in active operation in the United States, with many more to come, we are no nearer success than was this old Babylonian king with his wonderful Code of over 4,000 years ago. It is an interesting fact that the oldest trade agreement, which authentic history records, was made in the reign of Hammurabbi between the patriarch Abram and his kinsman Lot. They found that their enterprises were interfering and they divided certain pasture lands between them, thus establishing the following co-operative agreement: "And Abram said unto Lot, 'let there be no strife, I pray thee, between me and thee and between my herdmen and thy herdmen, for we be brethren. Is not the whole land before thee? separate thyself, I pray thee, from me: if thou will take the left hand, then I will go to the right, or if thou depart to the right hand, then I will go to the left.'" Gen. xiii, 8-9. Could anything have been more fair, sensible or practical? Can we afford to abandon this old policy of fair play? It is not recorded that Hammurabbi objected or that the price of mutton was put up, but Abram and Lot could have been called to account under some interpretations of the Sherman law. No lasting peace in any industry is possible when co-operation is frowned upon as a conspiracy and manufacturers are compelled to fight it out along destructive lines. The ultimate winner (generally the one with the greatest resources), who in the fight reduces or eliminates competition, may eventually find himself charged with maintaining a monopoly. The Sherman law was put upon the statute books a quarter of a century ago, just about the time the United States of America emerged from a purely agricultural country and entered upon its boundless industrial career. Mr. Roosevelt used the law as a curb to the monopolistic enterprises of a certain class of business men with unsound business ideas. It is evident that Mr. Roosevelt never thought the law perfect, and, no doubt, intended to secure intelligent amendments, but misdirected public opinion took the matter out of his hands and general business has suffered confusion never dreamed of by Roosevelt or the framers of the Sherman law. Matters are on the mend, but very slowly. Opposition to intelligent interpretation of the Sherman law is very great. Something like consternation prevailed among that clamorous class A BAD NAME of people, who believe that nothing is too unreasonable or severe in dealing with the ever increasing problems of business regulation, when the Supreme Court read into the Sherman law the word “reasonable." Since the Standard Oil decision, this same class of misinformed people, dangerous, and not to be ignored, because of their number, have raged like hungry wolves deprived of their prey for laws that would overcome everything reasonable in the Sherman law. Every business enterprise, no matter how worthy or how well conducted, must face this unreasonable persecution, once it seeks to improve its business methods, by departing from the methods of destructive competition of a thousand years ago. The future of the greatest industrial development that the world in its long history has ever been in a position to achieve is being delayed and threatened with destruction, so far as the United States of America is concerned (Europe, however, is making no such mistake) by selfish, narrow conceptions of trade which have come to us as an inheritance from the Oriental originators of trade. These old, halfcivilized ideas still hold a large portion of the public mind in bondage, and are still advocated by misinformed legislators. The theory they preach is that each purchase must be made a desperately selfish bargain, and the opportunity of indulging in such bargains is looked upon as a sacred, personal right. The right to buy at the lowest figure that the most cunning mind can conspire with circumstances to ring from a fettered industry is still thought good business. Starve, if you must! This is all I will give! Your losses are none of my business! I am not my brother's keeper! Business is business! No sentiment in business, etc.! The reactionary character of such policies becomes apparent on the slightest thought, but laws and decisions that are so framed as to deprive trade of all the benefits of co-operatien, to strengthen the grip of price 421 cutters and sweating practices, that have the effect of increasing the cost of production and forcing down the compensation to both labor and capital, are still urged by a misguided but powerful class of legislators, both national and State. Of course, the real trouble is the lack of public understanding and support in fair trading, and this difficulty can only yield to constant effort in the matter of analyzing and explaining the truth to the public. Every business man should study John Stuart Mill or Adam Smith and subscribe to several responsible publications which are devoted to Business and Finance, Social and Finance, Social and Political Economy, in addition to the regular magazines and newspapers. Business men, as a rule, neglect all educational reading on the subjects of Business and Political Economy. A membership in the United States Chamber of Commerce will also be useful in the matter of keeping well informed on what Congress is doing. The weekly bulletins furnished to members contain just the kind of condensed information a busy man needs, and it is reliable. Industry and thrift are in grave danger in the United States of America. Write a short article for a trade paper once in a while on the benefits of the standardization of prices, fair trading, business regulation, taxes, etc. Every honest and intelligent article helps quite a little. The present social and industrial problems can all be worked out with fairness to all. Scientific treatises can do little good -the general public is still in its A, B, C's. Of course, many understand the meaning of price maintenance, but many still believe that the policy of price maintenance or standardization of prices is a subtle conspiracy to force them to pay the highest possible price for articles sold under such a system. It would seem that the present prices of general commodities would prove the absurdity of such opinions, and it would also seem that the present time is the time above all others to point out to the public that, while this is a period of the highest prices ever known, especially in the standard lines of necessities, the articles marketed under so-called price maintenance systems, which are seldom necessities, can still be largely obtained at the regular advertised prices of the last ten years. It is also evident that in the few cases where prices have been raised on articles that are sold under a system of price maintenance, the increase has been forced by an increase in prices of raw materials that are not sold under the so-called price maintenance policies; in other words, in the lines of goods where the standardization of prices has been achieved, the prices have not risen, but in many other lines that are not regulated by this policy, prices have risen to the highest point ever known. Labor, lumber, iron, brass, copper, leather, shellac, have all increased tremendously, but talking machines, automobiles, watches, cameras, etc., are marketed for the same or even lower prices. It did not seem possible two years ago that all these increasing costs. could be absorbed in economies, and it has been accomplished largely by increasing turnovers and by improved machinery for manufacturing. This shows how hard concerns who advertise and maintain a standard retail price will fight the dreaded necessity of raising prices. Their regular price is a part of their good will, and a change courts disaster unless the change is downward. The effort has been exhaustingly expensive, however, and the future, if it returns a reduced volume of trade, will present a new set of problems harder still to meet. This is proof that the standardization and consistent advertising of prices makes steady and reasonable prices, and that unregulated prices permit violent fluctuations, either too high or too low, with accompanying public inconvenience and industrial losses. ascertained and fixed at a certain proportion to the cost of production, and no one but the manufacturer is in a position to ascertain these costs. When prices are too high, the public suffers, but the prosperous public do most of the complaining. When prices are too low, many more suffer, and the poor suffer most because of the curses of lack of employment; namely, hunger, cold, disease and crime. Fair and remunerative prices must necessarily accompany any lasting prosperity. Prosperity based on high prices is always of short duration. The world will be much better off when some system of co-operative trade agreements becomes the universal practice, as certainly it must sooner or later. The farmer would need no special credit legislation if he were insured a paying price for his product. Railroad rates are protected and standardized by law. Telegraph and telephone companies are protected in their charges by the circumstances of their organization, as are many other lines of business, such as systems for the distribution of product through sole agents or branches under a common control-mail-order houses, chain stores, leasing contracts, etc. But the greater portion of business has no protection against the worst form of price-cutting. This is unfair; all should have an equal chance to make a fair profit. A farm that does not pay is a public nuisance. A business that does not pay is a danger to public interests. The Clayton Act, although weak and imperfect in many particulars, is very encouraging in the line of future developments. This law and the proposed Webb Export Bill mark a sharp and favorable turn in the drift of business legislation. The Webb Export Bill is unquestionably good so far as it goes, and certainly the public will soon reach the unavoidable conclusion that, if trade agreements benefit foreign trade, the same kind of co-operation must benefit domestic trade, as The proper retail prices should be foreign trade and domestic trade are identical in their fundamental princi- and a satisfactory solution is a much ples. more urgent necessity than ever before. The automobile business is the best line in which to study modern business tendencies. Because of its unusual rapid development and its youthfulness, it is bound down by no customs or traditions; it has burst forth in less than half a generation from an atom to a giant in the full vigor of youth. On account of the circumstances of trade, the automobile manufacturers can always control the retail prices of their individual product, but the prices of automobiles, which were very high indeed at first, have not been maintained high, although they have been maintained to a standard fixed by each maker independently. be No reasonable complaint can made either in the price of automobiles, the wages paid or working conditions in automobile factories. The public gets the automobile that it is willing or able to pay for. Some are high priced and some are astonishingly low priced. Most of them are worth all that is charged and are astonishingly efficient.. The fact is, that the general condition of the automobile business from the standpoint of public worthiness is decidedly better as a whole than any other line, and this fact would seem to be an unanswerable argument against the theory that a price which is maintained to a standard fixed by the manufacturer has the effect of maintaining prices unduly high. If The wonderful Ford enterprise pays the highest wages and sells its cars for the lowest prices, but this would be impossible were the company not able to maintain a standard price among its distributing agencies. the Ford Company would not control its agents, there would soon be developed an internal price war that would most certainly destroy the efficiency of the organization and the economy of production. The matter of trade regulation in general is a real problem; in its present form it is new in some particulars, It would seem that we now have sufficient experience to enable us to devise an entirely new set of laws that would take the place of the more than 50,000 Federal and State Laws which are causing so much confusion to the business world by their use as a basis for intolerable persecution. Certainly such an undertaking is worthy of a special commission composed of the greatest thinkers and practical business minds of the world. It is doubtful, however, if even such an organization could compile a perfectly practical code of laws. Absolute satisfaction can never be accomplished by any set of fixed laws because of the rapidly changing conditions, but certainly a 99 per cent improvement could be accomplished, and if such laws were enacted, the enforcement of the same could be intrusted to the Federal Trade Commission or some modification of that organization. The effect of such a policy would in a few years give fairly satisfactory results-a condition that business is now sorely in need of. It has been charged that intensified advertising of fixed prices can fool the public into paying more for an article than it is worth; but a firm investing large sums in advertising soon finds that it is creating a demand for its competitors to supply if its prices are not fixed in a reasonable proportion to the cost of production. Very few business men try to fool the public nowadays. Misrepresentation in advertising is a weak, foolish policy and always brings disaster. Every honest enterprise can be tremendously developed and economized by advertising which increases the turnover at less cost than by any other method. Many worthy enterprises fail from lack of advertising. It would seem that a Federal Incorporation Law for all corporations doing an interstate business, compelling a standard method of estimating costs, keeping accounts and making reports, would simplify the problem of business regulation and gradually establish public confidence in business. With public confidence in business and business methods once restored, the future industrial development in the United States would be assured, and many of the grievous burdens and miseries now eating into the vitalityof the nation would be eliminated. ΟΝ LUJAN'S TRAIL Our orders were to cross the Line Where Como's hardy fir and pine Thru dusty fields of green maguey, Where basked the horned toad. Down canyons dark and mountains Past snow-clad hills we sped; Up to the yawning chasm's rim, Before the night-hawk sailed the sky And ghoulish silence broke, We pounced upon them with a cry- A maddened charge, a clash of steel- Across the burning plains we spread, Ghostlike, silent, swift; We dug hot spurs in flanks of red; We cleared the river's drift. The echoes of the great cock's crow, The couger's famished wail, Came to us on the plains below, Four of our troop will ride no more; On Lujan's bones the coyotes feast; When morning's sun rolls from the They'll meet a bandit's fate. ELIZABETH PRICE. |