The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1915-06-12
A total cost of $1.15H for eyery dol

A total cost Of $1151z for every dol.
lars worth Of machinery manufac-
tured.
That is the story of the failure OF
the NJ. Rumely company, a corporation
organized two and one-half years ago,
for the purpose of controlling the
American threshing machine industry.
This interesting and amazing story is
soon to be told in detail, a thorough
Investigation Of the companys affairs
having been practically completed by
the receiver. Finley p. Mount, of Indi-
annapolis. and the creditors committee.
The Palladium is now in a position
to present facts pertaining to the prin.
cipal causes for the failure Of the i'm
mense corporation, as ascertained by
the Investigators. Richmond people
are, OF course, vitality interested in
the discoveries made by Mr.. Mount
and the creditors committee, because
as result Of the failure. what was
once the city's largest manufacturing
plant, has stood idle for many months,
a forlorn monument to the unwise, i'm
practical management OF DR.. Rumely
and his close associates.
Merge Large Concerns.
In effecting the organization Of the
threshing machine combination, four
Of the largest threshing machine man.
ufacturing companies in the United
States were purchased by the Rumely
interests and merged with their plant
at Laporte, Ind.
DR.. Rumely had theory that II the
five plants were each brought up to
100 per cent efficiency it would be
possible to put on the market products
of the total value Of $22,000,0 900. This
he proceeded to do, and during the
first year Of the operation of the COM
bine every one of the five plants were
hives of industry and activity.
But in operating the plants at their
full capacity DR.. Rumely and his as
sociates made their first and most Sc
rious mistake. In turning out their
products they failed to take into con-
sideration the demands of the mar
ket.
1t has been ascertained that while
the Rumely corporation was manufac.
turing its $22.000,000 of products there
existed demand for not more than
$S,000,0OO worth of threshing machin-
cry and side line agricultural imple-
ments the corporation specialized in.
This discovery dawned upon the
Rumelys when they found all their
available storage places at each plant
filled to capacity with no machinery,
and no opportunity to market 1t. At
the end of the first and very disastrous
year of the corporations existence the
management was also startled by the
discovery that instead Of the usual fac
tory cost of so cents for every dollars
worth of machinery produced, this
cost had been 1914 cents. To this they
had to add a 81 cent selling cost.
making total cost of $1.15k for each
dollars worth of products.
The heavy sales cost was incurred
by the management in its desperate
effort to unload the oversupply of ma
chinery, three times the amount that
farmers had been in the market for.
Richmond people who marveled at
the sight of new machinery standing
about streets and alleys in the vicin.
ity of the Gaar-Scott plant during the
first year of it's operation under the
Rumely management will now under
stand that these machines constituted
part of the oversupply which had
drugged the machinery market. These
machines stood in streets and alleys
because there were no places for them
in the bulging storage houses.