The Idaho Republican., 1915-10-15
BY David Powell

BY David Powell
In small city of southern Indiana
the incoming flood of catalogues and
the outgoing food of money orders
had reached such proportins that the
merchants became convinced that
their commercial death was fast ap-
preaching; they saw their city dwind-
ling in population and degenerating
In appearance; and they felt that the
spirit of local pride was broken and
that the vital bonds of community
welfare were being dissolved.
A "Live Wire'' Starts Something
Very fortunately, however, for the
future welfare of that little town, it
rontained one man who still retained
a spark of hope in his heart. He
organized the business interests of
the city into community welfare
club for the purpose of tanning the
dying embers of home patriotism in
to living flame. The club was out
for everything that promised to help
the community but they could think
of nothing that would help so much,
as for the old town to get back some
of the business it had lost to the mail
order houses.
After thoroughly canvassing the
situation they became convinced that
as a matter of dollars and cents, the
mail order houses could not supply
the community with it's necessities
and luxuries more cheaply, in the
long run, than could their local mer-
chants. Consequently they determin-
ed to place the matter in the hands
of a specialists, man who could an
alyze a price and clearly demonstrate
the true values upon which it was
based; a man who could meet the
consumer on his own ground and
shoot facts at him straight from the
shoulder without giving offense.
Basic Principles Little Understood
The man selected for this work
had for many years been factory
cost expert, and after giving the mat
ter a great deal of thoughtful consid-
Grafton, he concluded that the most
effective way to convince the consum-
er of the wisdom of patronizing home
merchants would be to put before
them in a plain and convincing man
ner the basic and generally little un-
derstood principles of merchandising,
the object in view being to make
clear the fact that it costs approxi-
.nately the same to market an article
by any of the different methods Of
modern merchandising - whether
from the shelves of the home mer-
chants or from the highly centralized
catalogue houses of the large cities.
Big Conc erns Have but Little Buying
Advantage
In proving the fact that the large
catalogue concerns have but little ad-
vantage over other merchants in buy
ing their goods he says: "The modern
factory, manufacturing staple prod
'ucts, enjoys keener competition, If
possible than any other line of busi-
ness. 1t must sell its products to the
retailer at a price that will return
the smallest profit possible that will
permit reasonable return on the
money investment. Should a factory
put price on its product that would
return to its stockholders more than
q fair rate Of interest, either its COM
petitor would undersell it, or new
capital, of which there is always an
seeking investment, would
enter the field and eventually bring
the price of the article down to the
point that would return to the sock
holders a rate of interest satisfactory
to investors in such securities. In
dwelling on this, the purpose is to
show that under the present indus
trial conditions the selling price of
a manufactured article is determined
solely by it's cost of production.
Competition Gives Retail Lowest
Price