Five Mile Beach weekly journal., 1915-12-31
Federal Trade Commission 20
Help Local Merchants

Edward N. Hurley, Vice Chairman
OF the Federal Trade Commission, on
account of his practical business ex-
perience was requested by the COM
mission to suggest plans for helpful ac-
Invites. In order that his constituents
may have the full benefit of these plans,
Congressman Bacharach has taken the
matter up with Mr.. Hurley, aud he
gives herewith an outline of what the
commission proposes to do. Those
who are interested should communicate
with the Congressman, and he will be
glad TO assist them in every way pos
sible.
"Among the several methods by
which the Federal Trade Commission
car be of constructive helpto American
business, there are two of particular
importance. Que of these is to aid the
business men of the country in obtains
ing the additional credits to which their
business operations may entitle them.
The second is to aid in establishing
standard systems of bookkeeping and
Uniform cost accounting.
1.-The small manufacturer, the
country storekeeper, and the retail
merchant as a rule do not get at the
banks credit hal they ought to receive,
owing to the fact that they are unable
to present balance sheets in accordance
with good business practice. These
men are just as good business men, IN
many respects, as those of larger opera
tions. They have brains, ability,
knowledge of their wares and of their
customers, but they do not speak the
language OF the banker In that they are
not able to present a statement show
ing their true assets and liabilities.
~"Frequently a business man with a
credit of a few hundred dollars at his
bank, based wholly on personal
grounds, could, If he could produce a
reliable balance sheet, readily obtain
several thousand dollars which would
enable him to expand his business
along sound lines. Failing to obtain it,
his business is limited and confined.
liability to borrow at the bank has a
%far-reachlng effect on all credit, because
to the bank, primarily are directed in
quiries for a rating of a manufacturer or
merchant seeking credit for goods. An
u~nfavorable or nOn-committal report
from the bank results in a curtailment
of opportunity. 1t also checks expan-
sion.
money to business men, and recognize
that loans made on balance sheets that
are sound are desirable loans. The
banker will welcome any standard form
of statement that will permit him easi-
ly to ascertain the exact liabilities and
assets of his customer.
s'It is recognized thatn 10 one standard
system of accounting can be applied to
all classes of business, and that special
systems must be devised for each group
or class Of commerce and industry.
For example, the coal industry can use
one standard system Of accounting;
among others, the country store and
general store retailer, the wholesale
grocer, the retail grocer, the boot and
shoe wholesaler, the boot and shoe re-
tai,er, the drug store, the manufacturer
of textiles. the manufacturer of ma
chinery, the wholesale clothier, the re-
tail clothier. 1t is true that a great
many of these systems could be adapt
ed for use in lines other than those for
which they are originally arranged, as
certain fundamental principles under
lie the general structure Of accountancy
and must be recognized by each group.
'The fact must be admitted that in
order to put a selling prize on a product
a manufacturer must first know exact
ly what it costs to manufacture and
sell it. When business was done on a
large percentage of profit this was not
so essential, but in most lines of indus
try today the large percentage of profit
has passed. Manufacturers are work
ing on smaller margins and must alb
solutely know what their goods cost.
Any unreliable method OF arriving at
cost figures, with margins of profit so
close, must be eliminated.
1t is a fact well understood among
business men that the general demon
~alization in a large number of indus
tries has been caused by firms who cut
prices, not knowing what their goods
actually cost to manufacture; and the