Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-10-23
TO REDUCE EXPENSES
Object of the Formation of the
Harvester Trust.
COSTLY SELLING METHODS
Services Of Many Employees Have
Been Dispensed With.
FOREIGN MARKETS OBTAINED
Agents Engaged in Educating Farm
ers of the World to Use Mod
ern Machinery.
COSTLY SELLING METHODS
FOREIGN MARKETS OBTAINED


Chicago Record Herald
NEW YORK. October % 1907.
Continuing my interview with Mr.. c. S.
Funk. general manager of the Interna
tional Harvester Company, I asked why
the Mccormick and Deering companies
combined their interests if they had no
intention to prevent competition or to in
crease prices or to control the trade.
What was the object of the consolida-
TOM
1T was intended to increase the divi-
dends of the stockholders of both COM
panies and lower prices for the consumer
by reducing the expense of manufactur
ing and selling agricultural machinery
What were the actual Consequences
The great advance In the cost of la
Dor and material at the time of the con-
solidation,' said Mr.. Funk, has never
been offset by the saving in expenses.
AS our prices are the same as before the
consolidation, it follows that the earn
ings have been less than was expected.
and that accounts for the small divi-
dends. 1t is evident that the consoida-
ton by which the company was enabled
to practice some very necessary econo-
mics, prevented a great increase in the
price of our machines, repairs and Irvine
to the farmer. Had our consolidation not
been effected the old companies would
long ago have been compelled to advance
their prices, thus affecting the farmer
very greatly. In my Judgment the farm
er during the years 19O4-5-6 would have
been paying at least % per cent more for
| his machinery and repairs. The state
ment can easily be substantiated that
the farmer is today buying better ma
chimes at a less price than would have
| been possible had the consolidation not
| been cffe cted.
Expense of Selling Goods.
Mr.. Cyrus H. Mccormick, our presi-
dent, in a recent communication to the
Attorney General explained the reasons
for the consolidation in detail and very
| clearly. He said that for some time prior
| to the consolidation, in August, 1902,
about IS per cent of the harvesting ma
| chinery sold in the United States was
manufactured by the Mccormick and
| Deering companies. The remainder Of the
business was divided among number of
smaller companies. The combined facili-
ties of all those engaged in the business
very considerably exec eded the demands
of the market, and each manufacturer
was making strenuous effort to increasf
his proportion of the aggregate sales and
to sustain his position in the trade. In
this pressure for increased business many
unbusinesslike and wasteful methods had
been resorted to- Every important manu-
facturer of harvesting machinery was re-
qured to maintain selling agents and
stocks of completed machines and repair
parts in several thousand cities and vii
lagos, and to keep IN the field an army of
canvassers and experts. whose energies
were largely devoted to neutralizing the
efforts of their opponents.
This requires an amount of working
| volume of the BUSINESS, and an excessive
cost of marketing the manufactured
products. The agency trade was democrat
lied because in many of the smaller cities
and villages there were more local deal
ers than the locality could support. And
the multiplicity of canvassers resulted In
undue pressure upon the farmer to pur-
chase harvesting machinery and in I'M
businesslike terms of credit, all of which
were to the disadvantage of both the
farmer and the manufacturer. The condi-
tons were further aggravated by the in
tense hostility and almost personal an
tagonism between the organizations 0
the more important manufacturers en-
gagged in the struggle.
THE waste resulting from these condi-
lions the manufacturers found themselves
entirely unable to overcome. 1t was
cordingly apparent that serious loss to ALL
and financial disaster to many, would en-
sue unless there were either radical
change in methods, with the consequent
reduction in selling expenses, a de-
cided increase in prices. The latter al
tentative those most deeply interested in
the business were anxious to avoid
'Since the consolidation it has been the
constant effort of the company to increase
the profits of it's business by reducing the
cost of manufacturing and selling it's ma
chinery. rather than by increasing prices.
Large expenditures have been made to i'm
prove factory facilities and reduce manu-
featuring costs. The company has also,
at large expense, greatly increased its
facilities for producing its own raw ma
terials. such as iron, Steel ore, lumber,
coal and fax.