The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1915-12-02
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Kenosha, Wisconsin.
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Trade Commission, I had the pleasure
Of hearing him present his views or
Che subject of bank credit and methods
of obtaining it, and also on his pro.
posed plan for standard forms fol-
bookkeeping and cost accounting. Al
the time Mr.. Hurley was appointed 9
member Of the commission he was, as
you known, widely known as bust
ness man who had met with unusual
success. His views on these subjects
are, he said, the result Of his own prac-
tical business experience, and
thought that wherever known they
would be deemed of great Importance
by all persons engaged actively in
business.
A few days ago / met Mr.. Hurley in
this city and requested him to write
me brief outline of his views on the
subjects above mentioned. This morn.
ing | have communication from him
to the contents Of which I wish to call
your attention, feeling sure that they
Will prove Of much interest to all your
readers who are engaged or employed
IN any kind Of business. In his com
munication Mr.. Hurley says:
Among the several methods by
which the Federal Trade Commits
sion can be of constructive help
to American business, there are two
of particular Importance. One of
these is to aid the business men of
the country in obtaining the addi-
tional credits to which their bust
ness operations may entitle them.
The second is to aid in establish
ing standard systems of book
keeping and uniform cost account
ing. The two are interdependent.
"The small manufacturer, the
country storekeeper, and the re-
tail merchant as a rule do not get
at the banks credit that 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 pre-
sent statement showing their true
assets and liabilities.
Frequently business man
with credit of q few hundred dol
lars at his bank, based wholly on
personal grounds, could, if he could
produce reliable balance sheet,
readily obtain several hundred dol
lars which would enable him to
expand his business along sound
lines. Failing to obtain it, his
business is limited and confined.
ability to borrow at the bank
has far reaching effect on all
credit, because to the bank pri-
marily are directed inquiries for
rating of manufacturer or mer-
chant seeking credit for goods.
An unfavorable or non-committal
report from the bank results in a
curtailment of opportunity. 1t al
so checks expansion.
''Bankers are in business to loan
money to business men, and recog-
nize 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 easily to as
certain the exact liabilities and
assets of his customer
cit is recognized that no one
system of accounting can be APP
piled to all classes of business,
and that special systems must be
devised for each group or class of
commerce and industry. For ex-
ample the coal industry can use
one standard system Of accounting;
among others the country store and
general store retailers, the whole
sale grocer, the retail grocer, the
boot and shoe wholesaler, the boot
and shoe retailer, the drug store,
the manufacturer of machinery,
the wholesale clothier, the retail
clothier. 1t is true that a great
many of these systems could be
adapted for use in lines other than
those for which they are originally
arranged, as certain fundamental
principles underlie the general
structure of accountancy and must
be recognized by each group.
"The fact must be admitted
that in order to put selling price
on product a manufactures must
first know exactly what it costs to
manufacture and sell it. Whm
business was done on a large per-
centage of profit this was not so
essential, but in most lines of In
dustry today the large percentage
of profit has passed Manufactur.
ers are working on smaller mar
gins and must absolutely know
what their goods cost. Any unre-
liable method of arriving at cost
figures with margins Of profit so
close, must be eliminated.
C.