The Detroit times., 1913-11-12
RICH AUTO SMASH DUE,
TO UNS0UND FINANCING
sx,>, AND MISMANACEMENT

its guarantee. During the regime Of
the creditors committee the car was
perfected. Standard parts were In
troduced wherever possible. and the
failing company might yet have been
saved II the handicap Of lavish ex-
penditure due to inexperience and
lack Of foresight had not been too
great.
This, sort of financing IL not con-
fined to the automobile industry. A.
I. Mason. one OF the most successful
OF apple growers In the famous Hood
River valley. Of Oregon. said OF that
industry few years ago: "A large
percentage of the men who 90 In for
raising apples fail because they put
the bulk OF their capital into clearing
and setting out IN orchard. In
anxiety to get as large one as pos
sible, they minimize the fact that
they must care for II through six long
improbable years. But their failure
does not argue the unsoundness OF
the apple industry"
Neither does the failure Of the re-
III or other concerns which like It
are compelled to Undergo reorganiza-
tion. mean that the automobile bust
ness IL In itself unsound.
The failure IL not the result OF
reople not having the money or desire
to buy cars. Among the assets OF the
RICH nut up for sale we're 5000 un-
filled orders and others are coming In
every day. Its car still is in demand.
The disaster which overlook II was
due solely to mismanagement and bad
business policy.
This mismanagement IL not excep-
tional in this case or without excuse.
The founding Of the automobile in
dustry a few years ago opened up q
new industrial field to be exploited.
With characteristic American daring.
business men proceeded to exploit 1t
in the same way In which every other
resource Of the country has been.
even to the soil itself.
But even as the farmer of today
cannot make living by the methods
followed by his forefathers. so the
automobile man must change his
methods. The difference is that the
course Of DEVELOPMENT. which in agri-
culture has taken century TO work
itself out, is coming about In the au-
tomobile business In q decade. In
other words. the industry already 10
moving from rs speculative stage into
one OF commercially sound and scien-
tiac management That Is the sign
Of hope to be seen In the reorRaniza-
ton OF firms which, like the RICH.
have PLAYED for big stakes and lost
because they have gone In beyond
their depth.
The thing which more than any
thing else In Detroit is fastening the
day when the risks OF automobile
manufacturing will be eliminated. Is
the operation OF one concern which
has set a standard Of serviceability
TO be achieved and has bent every ef-
fort by experimenting. organization
and Standardization to achieve the
result desired at the lowest possible
cost. A low-Drfced car CANNOT drive
ont OF the market higher priced one.
There must always De d sale for q
variety In styles and prices a. long
~ incomes diver In size. but the
high.priced machine must be worth
the money as compared with the
cheap one.
Putting ss.00o into brass fixtures.
labor. salaries. interest
on bonds and other expenses incident
to the manufac fnra of . car will not
maize It worth $4,000.
The arriving after Q cheap car may
result In placing the manufacture OF
all on q sound basis. II AUTOMOBILES
men read the lesson that should be
plainly seen bv them. there will be
no repetition Of the R-C-H's history.