New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1916-01-19
TO REY0LUTI0NIZB
BUSINESS METHODS
IMPLEMENT MANUFACTURERS
WILL REFUSE TO FINANCE
LOCAL DEALERS.
CASH BASIS OF AUTO COMPANIES
TO BE FOLLOWED IN OTHER
LINES.


will confront the people in the near
future, is the opinion of F. H. Retzlaff,
who returned last Saturday from the
Twin Cities, where he had attended a
meeting of the State Implement Dealers
Association. Mr.. Retzlaff attended the
meeting of the national federation at
Chicago last October as delegate from
Minnesota and at last weeks meeting
submitted his report.
The main topic under discussion was
the manner in which the implement
business, from manufacturer stand
point, is being conducted today. More
farm paper is handled by this class of
business than any other and the manu-
facturers have come to the point where
they will demand hereafter that farm
tools be sold for cash or that the local
banks finance the business of the dealer
who accepts notes in lieu of cash. It
was stated by representatives of manu-
facturers at the meeting that it requires
three times as much capital to finance
the local dealer as it does to finance
the manufacturing plant itself.
Heretofore paper has been taken by
the manufacturers from farmers pur-
chasing tools to till the soil, but eastern
banks are becoming overloaded with this
class of security and in some cases have
refused to relieve the manufacturer from
this sort of paper.
Another thing that has had tendency
to open the eyes Of the manufacturers is
the immense success made by the manu-
: facturers of automobiles. 1t has been
one of the strict rules of automobile
manufacturers to sell for cash only and
this has brough hit rich returns in the shape
of dividends. While automobiles have
been and are being bought on time from
local dealers, the manufacturer runs no
risk whatever and handles no paper.
If the dealer wants to accept farmers
note for a machine, that is his business,
but the machine, is paid for by the
dealer before leaving the hands of the
transportation company.
Many of the implement manufacturers
have branched out into the automobile
manufacturing business and their eyes
have been opened thereby. They have
found that a farmer will give his note
for the purchase of sulky pillow or a
tanning mill, taking two and three years
in which to pay for it, and then extend the
note if he feels like it. This paper under
present business methods had to be
carried by the dealer, who in turn gave
While the local dealer assumed some
risk, it was the manufacturer who had to
carry the load. But in the purchase of
an automobile the paper must be good
at local bank, the dealers get his
money and the whole transaction is
practically made upon cash basis.
Implement manufacturers figure that
they are financing the auto manufacture
ers' business in an indirect way. They
extend credit to the farmer to purchase
tools in order to prepare the soil and
harvest the crop and then the farmer
turns around and lets the manufacturer
hold the sack for while by investing the
proceeds derived from the crop in an
automobile.
1t is the belief Of Mr.. Retzlaff that the
entire method of doing business will be
revolutionized by the large manufac-
turers. Local banks will have to take
care of local paper and dealers will
practically have to pay cash before
goods are removed from the freight office.
No doubt this will have tendency to
keep the man who can not pay for both
a car and his farm implements from