The Leon reporter. (Leon, Iowa) 1887-1930, 1906-03-15
A SURE THING FAILS.

The big cooperative mail order house
OF the country has gone into the hands
of receiver. The firm, which had sold
over 100000 in stock to the farmers
of the country, had 800 in the bank and
owes $250,0OO for merchandise. The
Associated Press report says Of the
failure:
"Judge Bethea, of the United States
court to-day appointed Edwin G. Day
receiver for the Cash Buyers Union,
+ First National Cooperative society.
The charge is made in connection with
the receivership proceedings that stock
in the concern aggregating $1,00O,0O0
has been sold to farmers throughout the
country, and that there is cash bal
ance of 500 on hand. Complaint was
made some time ago to the postal au-
thorities by persons who had been
solicited through the mails to buy stock
in the company. Postofiice inspectors
Ketchem and Kimball commenced an in
vestigation in which it was learned,
they declare, that there was no credit
on hand nor any coming in and that the
company owes $250,O00 on merchandise
accounts. Instead of taking the usual
course, the inspectors secured informa-
tion upon which the company could be
thrown into bankruptcy, and the re-
ceivership proceedings were commence
ed with the knowledge and approval of
the postoffice department. julius Kahn
is president and general manager of the
company
If a catalog house actually lives up
to it's promises in respect to the quality
of the goods, it cannot sell cheaper than
the local merchant, when freight or ex-
press charges are counted in. If it
makes low price it must lower the
quality to correspond. Perhaps the firm
that failed tried to snake good on it's
promises.
The Cash Buyers Union issued big
book, in which it put fourth the coop
erative idea in glowing terms and guar
anteed per cent on it's stocks, besides
shares in the dividends which it expect
ed to pay. 1t did pay some dividends at
the rate of 10 per cent, according to it's
literature, and the book issued declares:
"If the first year dividend at the rate
of 10 per cent is declared, there is rea-
son to expect that the future will bring
still greater returns, which may reach
so, Is or 100 per cent annually, accord
ing to the amount of business secured"
But it left it's stockholders $1,00O,O0O
in the hole.
How good this sounds:
'There live in this country some 3d.
100000 people. OF these there live in
the rural districts, where facilities for
buying are poor, 54,000,000 people. That
means 100000 families. Their annual
consumption amounts to nearly $5,000,-
100000. Suppose we reach but per
cent, only one family in 100 (co-opera-
tion should do vastly better, but sup
pose it does not), it means business of
$50,O00,000, net profit of $2,5OO,OOO or
so per cent on the capital invested. Is
this good enough for proposition that
grows quickly, does better year after
year?"
But the firm owes $25O,OOO for mer-
chandise. 1t just couldn't lose, for the
catalog says:
"Losses in the mail order business
amount to nothing. 1t is strictly cash
business. We give no credit to anyone.
We have either the money or the goods.
And while we ship goods G. O. d. sub
ject to approval to doubling Thomases,
over 80 per cent Of the orders we re-
ceive are accompanied by cash. We
have no accounts to collect; panics
don't swamp us; in fact they help our
business" But the union has only $10O
in the bank and is in the hands of re-
ceiver.
A never ending business, sure profit
of so per cent or more, and no losses,
A beautiful scheme-if it only would
work.
Charter Oak wagons.