Omaha daily bee., 1909-11-28
PRICES BEGIN TO RISE
Advance in Price of Raw Material
Given as the Cause.
GOOD ADVICE IS BUY NOW
Reasons Given by old Omaha Bicycle
Man for h General Advance
in Prices During Latter
Fart of Year.


Those people who have been waiting
for the price of automobiles to drop be-
low par have another guess coming" said
w. J. Morgan. Their stock argument
in favor Of their expectation is rather old.
They point to the tumble in the price Of
bicycles. Bicycles in 1880 to 1890 cost all
the way from $40 to $50. For the last
five years you could buy that same bicy-
Gle, or one as good as It, for about one
third Of the price"
The low price hopefuls forget. however.
that bicycles were made In the days when
there were no rubber or steel trusts and
before the era of aeroplane prices. These
days an article that has not scared in
price Is looked upon with more or less
veneration. It is quite possible IL there
were as large a demand today for bicy-
Giles as there was, say, ten years ago. the
price would be a little sitter than it is
today for the famous ~two-wheeler.
Recently rumblings Of advance i'm auto
mobile prices have been heard. and one
manufactures with great bravery has told
the public that they must pay more. and
II now looks as If the other manufacturers
must either economize in quality or cut
down the size of their automobiles il they
expect to sell them at a profit. There may
NV W " bCACAaA NBAhNlAlAC VI ~ ltG IdlhlIlks
but few manufacturer will care to con
tinue to make automobiles unless there is Il
fair margin in so doing.
A writer who is noted for his economy
in using the space of the daily newspaper
has something to say about the raise in
the price of one car. The lack of profit
in automobile making might account for
the battery of press agents that outdo the
gentlemanly burglar in prying their way
into the free news columns of the daily
press. The one young writer referred to
has this to say:
Claim No Large Profit.
Contrary to the general opinion held
as to the profit on automobiles, il is a
fact that the larger companies who have
been making automobiles on a business
basis for the last several years, do not
make a larger profit than in any other
standard line of manufacture.
"On November 1 the Maxwell riscoe
Motor company announced a rise in the
prices on some Of their models. To those
who are intimately connected with the
automobile business, this price advance
was expected and predicted. The reason
for this rise is not hard to find.
Raw material has been constantly ad-
vancing in price, Crude rubber, for ex-
ample, has advanced tremendously dur
ing the last few years, and as a result
tires today cost from $50 to $50 a set more
than formerly, and what is more to the
point, this advance in rubber seems likely
to hold for some time to come. The
consumer as we'll as the manufacturer has
felt this tire advance, but It is more
keenly felt by the latter because the tire
manufactured has in the past given au-
tOmOhiln manufactures "a nripa aOp1aurhat
lower than the user. This was natural,
since the manufactures bought in large
quantities. Now, all special prices to
manufacturers have been withdrawn so
that an automobile company has to pay
practically what the user does. Thu it
is that on the present basis tires are cost
ing the manufacturer a much higher price
than the advance itself would indicate.
All Materials van
But tires are not the only material
that has advanced. Steels, hair, leather
have all gone up. Simply because the
producers of the raw material have not
been able to meet the demand. The policy
of the manufacturers has been to build
automobiles in enormous quantities and
sell on a low margin of profit. Never
has their percentage Of profit amounted
to more than Is per cent. Consequently, |
when the cost of raw material has ad-
vanced as it has, the prices on the cars
must necessarily go up.
o some of their models they have been
able to reduce the cost of manufacturing
to a point which compensated for the ad-
in material. AS, for example, on
the thirty-horse power, four-cylinder car,
remains at $500. On the smaller
machines, as, for example, the twelve
horse power runabout, the price has ad-
vanced from $3.50 to $500, and on their
four-cylinder. twenty-two-horse power run
about from $3.50 to 500.
There may be still a large profit in
some automobiles. but among the large
producers it can be safely said that the
profit per machine is probably lower than
obtained in making any other class
Of machinery.
For example, in the stationary engine
business a ten-horse power engine selling