New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-08-06
parison Of prices may be found inter


''f+''N'fNA - wv 81 lNO
saxon ............l0O IS 20
rage 100 Tlh ZOO
General Motors 100 AGO 500
Willys-Overland q. 25 s6is 56la
Studebaker .....l 100 1876 l27
hco .............. 10 20 81
Ohalmers .........l00 1876 $50
Chevrolet ........l00 llb 1906
What Is the reason for the poor re-
sponse? An inquiry into the causes
will help TO place the whole situation
IN clear light. The question must be
discussed from two points Of view, i. E.,
the general prospects and possibilities
Of the trade and the accounts of the
companies. While profits have been
large, they have not always been in
cash. We know that the heavy COM
petition has led 20 a gradual reduction
In the cost to the buyer; part Of il
has been Offset by the improved meth
DDS of manufacture as well as manu-
iacture and sale Of large numbers. A
number of companies have distributed
stock dividends. The REQ Motor Com
pany has still 100000 stock unissued
and held for dividend. The Chandler
company has 100000 stock unissued
TO be used for dividend. The par value
OF the shares of some companies has
been fixed arbitrarily, and not by the
amount paid by shareholders. The
Mitchell company's shares, for instance,
have no par value. The tangible assets
Of the company given in the different
balance sheets include commodities
which have gone up three or four fold
in price during the last twelve months.
Estimates are not always sufficiently
accurate TO be dependable from the &C
counting point Of view. AS a general
statement with reference to accounts
this should suffice for the present
What of the Demand?
The prospects and possibilities of the
trade, on the other hand, concern the
investor in motor shares more than he
usually thinks they do. How long will
the present rate Of demand keep up?
784,S25 new cars were put on the roads
in the United States last year, and it
is confidently expected that at least l.
100000 more cars and trucks will be
on the roads this year. A sane esti-
mate is that on January /, 1917, there
will be 100000 cars and trucks
operating IN this country. To arrive
ct the prospects we must have some
idea as 70 the uses to which they are
put
The farmers are the biggest single
class of users. and a car has become a
necessity with them. On a very liberal
estimate. the farmers will have bought
by the end Of the current year 1,O0O,-
600 cars. Throughout the length and
breadth OF the country there is not
over 100000 trucks and other vehicles
used for trade purposes. We might
allow about 100000 cars for doctors
and others, who need the motor car in
business. About 100000 cars is about
the estimate Of the automobiles in use
by the rich and well to do, and for
whom the motor car is more matter
Of pleasure and convenience than
necessity. The balance of 100000 cars
Will then be bought and used by people
Of very moderate means, and for whom
il is a temporary fad. The story Of
the man who mortgaged the house 70
buy a car. the car to build a garage
and the garage TO buy gasolene may be
farfetched; but it is essentially true
in the case Of many Of the last class
Of people. Will they be able 70 replace
the cars, when they are no longer
disable?
Half the Cars Are New.
II should not be forgotten that about
2 10000 cars. or half the total on the
roads az the end Of 1916. will be less
than two years old. and more than a
quarter less than one year old. The
life Of an ordinary automobile is about
four years, after which IL goes literally
70 pieces. or used as a truck for year
or two more. The life Of q truck used
I'm trade is al least FIVE TO six years.
Therefore. the industry cannot depend
on replacements for q large part OF ITS
cutput, at least for the present. There
is still. no doubt. a fair demand IN
certain parts Of the country, which the
trade can supply. The question IS
whether II is likely TO be big enough
10 keep all the newly installed plant
and machinery going at full pace j.
is useless to discuss export demand,
for two reasons. Firstly. II was never
large. and is not likely to be large for
long wears 10 come Secondly. there Is
already an embargo on the export OF
motors TO Europe. which was fairly
good market for cars Of the cheaper
type in the past
/ The Factor of Used Cars.
/ A factor which should not be lost
sight Of it the trade IN secondhand
cars. The gradual reduction in the
cost OF new cars killed the second hand
car business Now. however. this bust
ness is beginning TO improve. ne
number of people who buy cars for a
fad. and cannot afford the maintenance
expenses is increasing, and is likely TO
increase in larger ratio in the future
How low could prices go? VIII com
petition cat prices fine as in other
trades? These are questions which
need careful consideration. The re
cent reduction in Ford prices gives
room for serious thought.
The motor industry is now in a tran
sition stage The adjustment mus take
/ L.. l. nrInr "a nakn II q sfanle in