davidaulloa/AmericanStories huggingface dataset:
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14

find that our costs are much 'o"e'
than we thought, and that we can
do many things which under 'he o'u
method Of figuring appeared SUI
cidal. =,
"The view of costs so largely held
namely, that the product OF lac
tory. however small, must bear tne
total expense, however large, IS re-
Snonsible for much Of the confusion
about costs. and hence leads to un-
sound business policies. If we ac-
cent the view that the article pro-
duced shall bear only that portion Oh
the Indirect expense needed to pro-
duce il. our costs will not only
become lower, but relatively lar
more constant, for the most variable
factor in the cost of an article un-
der the usual system Of accounting
has been the overhead which has
varied almost inversely as the
amount of the product. Thla item
becomes substantially constant IL
the overhead is figured on the nor
NAL capacity of the plant.
"Of course. method Of account
ING does not diminish the expense,
hut it may show US where the ex-
pense properly belongs and give US
a more correct understanding OF our
business. In the illustration OF tne
three factories, the cost in the Uni
cago factory remained constant, out
the expense Of supporting the Bull
falo and Albany factories in ldleness
was a charge against the business
and properly chargeable to proht
and loss. If this expense had been
loaded on the product of the Chi-
cago factory, the cost of the product
would probably have been so great
as to have prevented its sale, and the
total loss would have been greater
still.
"When the factories are distinctly
separate, few people make such
mistake. but where a single factory
is three times as large as is needed
for the output, the error is frequent
" made, with results that are Just
as misleading. AS matter of fact,
it seems that the attempt to make
product bear the expense Of plant
not needed for its production is one
of the most serious defects IN our
industrial system to-day, and further
reaching than the differences be
tween employers and employees
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14

5 cents; hence the cost would be only
% cents.
The possibility that his competitor
was running his factory full sug-
cested itself at once as an explana-
ton. The next question that sug-
gested itself was how the II cents
overhead, which was charged to this
article. would be paid if the article
were not made but bought. The obvl-
GUS answer was that it would have to
be distributed over the product still
being made. and would thereby in
crease its cost. In such case it would
probably be found that some other
article was costing more than 1t
could be bought for; and, if the same
policy we're pursued, the second ar
ticle should be bought, which would
cause the remaining product to bear
a still higher expense rate.
"If this policy were carried to Its
logical conclusion" Mr.. CAN'T ex-
plains, "the manufacturer would be
buying everything before long, and
bo obliged to give up manufacturing
entirely. The illustration is repre-
sentative Of the problems before a
large class Of manufacturers, who
believe that all of the expense, how
ever large, must be carried by the
output produced, however small.
"This theory Of expense distribu-
ton is quite widespread, and clearly
indicates policy which in dull times
would, if followed logically, put
many manufacturers out OF busl-
ness.
fortunately for the country,
the American people as a whole will
finally discard theories which con-
fict with common sense; and, when
their cost figures indicate an absurd
conclusion most of them will re-
pudiate the figures. A cost system,
however, which fails US when we
need it most is of but little value,
and it is imperative for us to de-
wise a theory of costs that will not
fail US.
Most of the cost systems in use,
and the theories on which they are
based. have been devised by &C
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14
Nv HENRY J. ALLEN

rFrom an address detipered on mo
occasion of the fESth anniversary
Of the Chamber of Commerce Of
the State Of Ne10 York;
A FRENCHMAN came over 70
~ this country fifty years ago
and wrote a book about US. ms
Frenchman discovered that America
would never become a great com
mercial nation. Said he, 1.-THE phys
steal obstacles in the way are insup-
cradle. New Orleans is 1000 miles
from Boston; Chicago is l,2OO miles
from New York; and there is MOTH
ing in between to make for COM
mercial unity" All, wish he could
come back; | do not suppose ne could
get away!
We gather the harvest Of one zone
to-day and we make it the food OF
another zone tomorrow. There are no
longer any distances upon the earth'
nor any heights that are not scalable'
nor any depths that are not pene-
trable; there are no longer any
limitations to the power OF man IN
the physical world which, by con-
quest. does not already lie prone
and powerless in the victorious path
way of his mighty march. The
earth has become a mere neighbor-
hood. We feel everything at once
and in common. One man stands at
the telegraphic keyboard in Wash
ington and he sets the chords vlbrat-
ing to the some tunes from ocean
to ocean-a single pulse beat out
bevond the three-mile limit-or down
across the cactus-covered reaches IN
Mexico; he will send anger or grief
or horror throbbing around the
world. This instantaneousness has
its effect; this unanlmlty OF
thought and action has deepened
our sense Of national consciousness,
has intensified the power and the
purpose of popular emotion.
And so | say that we have come at
an hour which demands of a man
that he shall have citizenship
broad enough to be citizenship of
the whole earth; that we shall come
to a realization of the fact that
Pittsburgh, Penn, is no longer west,
but that that which lies beyond is
potential and inviting and vibrant
with Americanism which enlightens
US all.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14

would Offset the profit made IN the
going plant. 49,
"Instead of considering these
three factories to be in different
parts of one city, they might be con
sidered as being within the same
ward. which would not change the
conditions. Finally, we might con-
slider that the walls between these
factories were taken down and tnat
the three factories were turned into
one plant, the output of when hao
been reduced TO one-third of its nor
NAL volume. Arguing as before, IL
would be proper to charge to TINS
product only third of the indi-
rect expense charged when the lac
tory was running full.
"If the above argument is cor
rect. we may state the following
general principle: The indirect er-
pense chorgedble TO the output OF a
factoyp should bear the same ratio
TO the indirect expense necessary 10
run the factory at normal capacity
az the output ia question bears TO
the normal output Of the factory.
Under this method of distributing
expense there will be a certain
amount of undistributed expense re-
naming whenever the factory runs
below its normal capacity. A care
full consideration of this item will
show that it is not chargeable to the
product made, but is a business ex-
pense incurred on account of main
tanning a certain portion of the fac
tory idle, and chargeable to profit
and loss. Many manufacturers
have made money in a small plant,
then built a large plant and lost
money for years afterward, without
quite understanding how it hap
pened. This method of figuring
gives a clear explanation of that
fact and warns us to do everything
possible to increase the efficiency Of
the plant we have, rather than to
increase its size.
This theory explains clearly why
some Of our large combinations of
manufacturing plants have not been
as successful as was anticipated, and
why the small, but newer, plant is
able TO compete successfully and
make money, while the combinations
are only just holding their own.
THE idea so prevalent few years
ago. that in the industrial world
money is the most powerful factor,
and that if we only had enough
money nothing else would matter
very much, is losing its force, for 1t
is becoming clear that the size of a
business is not so important as the
policy by which it is directed. If
we base our policy on the idea that
the cost of an article can only legiti-
mately include the expense necessar-
lily incurred either directly or in
directly in producing it, we shall
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14
Experience of One
Manufacturer

AS an illustration, Mr. CAN'T cites
a case in which a man found that
his cost on a certain article was 80
cents. When he found that he could
buy it for 26 cents he gave orders
to stop manufacturing and 20 buy
it, saying he did not understand how
his competitor could sell at that
price. He seemed TO realize that
there was a flaw somewhere, but he
could not locate it. Mr.. CAN'T then
asked him what his expense con-
sisted Of. His reply was labor 10
cents, material 8 cents and overhead
~ cents. The next question was ::
Are you running your factory at
full capacity and the reply was
that he was running ii at less than
half its capacity, possibly at one
third. What would be the over
head on this article if your factory
were running full?' he was asked.
The reply was that it would be about
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14

business men and between them and
the government more essential than
in the development of our export
trade. For this reason the Federal
Trade Commission has urged upon
Congress the Importance of the pass
age Of the Webb bill, which removes
the doubt which now exists in the
minds of many business men as to
the application of the antitrust laws
10 cooperative selling agencies or as
sociations organized solely for the
purpose OF furthering our export
trade. This bill has passed the
House of Representatives by a large
non-partisan vote and is now pend
ing in the Senate. 1t is we'll known
fact that competition in foreign
markets is national, and if we are
to be effective competitors in foreign
countries our business men must
unite their forces and move forward
as a unit. They must meet system
atized cooperative effort by foreign
nations with systematized coopera-
tive organizations among American
business men.
When the Federal Trade Commits
sion was organized we were appealed
to by many groups of business men
who were eager to have the Trade
Commission indorse the plan of hav-
ing industries controlling the great
natural resources, such as coal and
lumber, organized into cartels or
combinations under the supervision
OF the Federal government. They
had in mind the system of cartelS
now quite common in Germany.
Seventeen or eighteen years ago
when Germany allowed her manu-.
facturers to combine in cartels, the
manufacturers who joined the re.
spective groups were requested tc
present their balance sheets. 1t is
stated that 80 per cent of the balance
sheets which were submitted were
practically perfect. 1t was evident
that the participating companies
were conducted efficiently, and that
they knew how to run their business
The government permitted the or.
/ ganization of cartels for the purpose
Of meeting economic conditions
which were regarded beyond the con-
troll of individual business men and
which it was thought could be met
effectively by cooperative effort.
If American business men to-day
had full knowledge of the cost OF
manufacturing and of selling, and il
they had in general their system OF
production and distribution worked
out as efficiently as have German
manufacturers and merchants, we
would have basis upon which tc
consider the desirability Of organiz-
ing cartels in industries controlling
our natural resources; we would
have something concrete with which
to 90 before d Congressional com
mittee in asking legislation that
would be helpful. But when, as it is
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14
Exit Of the
BONANZA Farm
The Great Dalrymple Holdings
for Years the Agricultural
Wonder of the Northwest 10
Be Split Into Small Units
Minneapolis, JuruOT d.

Minneapolis, JdrHdT d. ,
yxYILLIAM DALRYNPLh' o.
M Minneapolis, to-day - !.
w nounced that the gro.
Dalrymple farm in the Red AD" :.
VALLEY Of North Dakota is gong "
be cut up and sold of in i00'' 3.
holdings. This famous farm ., !,
largest of all the BONANZA farms n ,S ~
the West, still comprises INV Nv
acres rarmed as unit. 0rlglnau'
there was holding Of $4,000 acre. acre
10000 acres Of which was i~ am
as a unit at time Of greatest pl'n''
area. ,u,lo,
In 1875. the days of the de' og
ment of the Northern Pacihe . u.
road. when land script was nj.
70 BUYERS of the stock, Oliver -
rvmpIe. who afterward Oe'a =.
tnown as the worlds gFea"'
farmer and who then operate o,s,
9.OOO-acre farm south Of ;" -
began to buy North Dako'a y ~,
Associated with him were New
CAPITALISTS and three brother. %.
B.. W. ]. and ]. L. Grandin, o. !. M N,
out. Penn. They bought ''"
acres of land. I'd
North Dakota at that 'ia ~. n
regularly supposed to be '0 co..
north to produce grain prom . IS
Oliver Dalrymple was the n''
to carry on farming operation,
the grand scale that gave 80
b. the term "bonanza fa'D
When. in 1877, nearly 4o'OVV - -.
Of land was in wheat, Vis''0 ,,.;,.
from every part of the u ~.
States to view the sight IN 'ne =, -.
ing season just before harv 'e' , !,
Much romance came out OF 'n' "a;
Many distinguished writers -
it. and the story of the bona On. (
farms and the BONANZA iar" re
the West began to appear y a.,
crn publications, for there VIM,
other farmers with great nO'a. ~
although no one else ever . !, .o,,
Mr.. Dalrymple in extent o.
waited land owned.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14
DELIVERY OF AMERICAN
LOCOMOTIVES IN CHINA

Twenty loco mctives OF American make
for use on Chinese railways were re-
ceived a few weeks ago at Wuchang,
according TO a report from Consul Cen
eral 4. s. Cunningham, at Hankow. Ten
of these are to be used on the railway
from Wuchang to Changsha, which IS
expected to be opened in March, 1917,
ard which is being built from funds
provided by the Hukuang loan. The
other ten locomotives are for the Pc
king Hankow Railway line.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14
Making Industry
More Intelligent

The menace is not in undertaking,
for a business concern must expect
to face the low prices that are due TO
efficiency. But even the most eff
cient concern is not always able to
meet cutthroat prices based on igno-
rance.
The Federal Trade Commission
has urged upon business men the i'm
Portance of installing adequate cost
accounting systems. We have sent
out to the business men of the coun-
try. both manufacturers and retail
merchants, approximately 100000
cost accounting pamphlets, and thou
sands of letters have been received
in reply commencing the Commission
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14

the product. making the cost greater ;
while under the second theory this
expense of idle machinery is carried
in a separate account and deducted
from the profits, leaving the cost con-
slant 1t is most interesting TO note
that, when costs are figured on the
second basis, great activity imme-
diately ensues to determine why ma
chinery was idle, and to see what can
be done to put it in operation. 1t is
realized at once that this machinery
had better be operated, even If no
profits are obtained from its opera
ton. and only the expense, or even
part of the expense, of maintaining
that machinery is earned.
plants or people who do not
serve some useful purpose to a COM
munity are handicap to that COM
munity, for idle plants represent idle
capital. and idle people are not pro-
ducers but consumers only. The
warning nations have recognized
these facts and put both idle plants
and idle people to work wherever
possible"
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14

II rom uN buH' COO "'''0''N 49,
day before the Commercial Cltb OF
Chicago.l
WYE are new country and a
M few years ago we did not
w have the keen competition
at home that we now have and the
necessity for watching the new
details of our business was not
required. But the days for happy
go-lucky" business methods are past.
We now have keen competition
in our home markets, and we must
realize that we are going TO have
even keener competition in the mar
kets of the world. We must face
conditions as they exist.
1t is recognized that a business
man must be concerned not only
with the efficiency Of his own bust
ness but with the efficiency Of his
competitors business, and realize
that unhealthiness anywhere in his
industry will react seriously on him.
It is a fact well understood among
business men that the general de-
moralization in a large number Of
industries has been caused by firms
who cut prices not knowing what their
goods actually cost to manufacture.
The cost Of selling, which is equally
important, is often almost wholly lost
sight of. Are the officers of the COM
panies and firms who are cutting
prices right and left irrespective OF
their cost fair TO their customers
stockholders or competitors? DUAL
ity and service are becoming greater
factors in the field Of merchandising
Long after the price of a product is
forgotten the quality is remembered
The man who does not know his
true costs is the man who prices
his goods foolishly, and thereby i'm
pairs the business Of his sound com
petitors at the same time that he
ruins his own. Too low price max
ing, based on guesswork or on partial
cost, is a menace to sound business
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14

ducers but consumers only. The
warning nations have recognized
these facts and put both idle plants
and idle people to work wherever
possible"
Cost Systems Not
Always Dependable
In further explanation Of this
theory Mr.. CAN'T states that the inn
portance of a thorough knowledge
of the cost of their product is gen
orally recognized by manufacturers,
though few of them have cost sys-
tenn that is dependable under all con-
ditions. 1t is possible TO determine
with reasonable accuracy the amount
of labor and material used directly
in the production of an article, but
there does not appear to have been
devised any system of distributing
indirect expenses, burden or over
head in such a manner as to inspire
any real confidence that it has been
done properly. Several methods of
distributing this expense are IN
common use; for instance, that of
distributing the total indirect eX-
pense, including taxes, interest, in
surance and the like, according to
direct labor. Another way is to dis
tribute a portion of this expense &C
cording to direct labor and por-
ton according to machine hours.
Under still other methods a certain
amount Of this expense is distributed
on the material used, etc. Under
most of these methods the distrlbu-
ton of all the indirect expense,
however much it may be, on the
output produced is contemplated
The indirect expense bill unit Of
production is usually small when a
factory is running at normal full
time capacity. If, however, the fac
tory is operating at, say, only one
half capacity, there is but little
change in the total amount of this
indirect expense, although all of II
must now be distributed over half as
much product rs when operations are
in normal. Thus, each unit Of pro-
duction is obliged TO bear twice as
much expense as previously.
when times are good and there
is plenty Of business, this method of
accounting" says Mr.. CAN'T, "indi-
Gates that our costs are low; but
when times become bad and business
is slack, it indicates high costs, due
10 the increased proportion of bur
den each unit has to bear. During
good times, when there is a demand
for all the product we can make, il
Is usually sold at high price, anc
the element of cost is not such ar
important factor. When business il
dull, however, we cannot get such
high price for our product, and the
question Of how low a price we car
afford to sell the product at is Of vita
Importance. Our cost systems, a
generally operated at present, show
under such conditions that our cost:
are high, and, if business is yer,
bad, they usually show us a cost fal
greater than the amount we can &c
for the goods. In other words, oul
present systems of cost accounting
20 to pieces when they are mos
needed. This being the case, many
Of us have felt for long time tina
there was something radically wrong
with the present theories on the sub
ject."
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14
Leadership if
Nation Is Worthy

That is the lesson Of AInenc.,
enterprise; that is the lesson o,
American spirit; that is the h,v,
Of America. And you great tus.
ness men, some Of you 148 year, II
age, I judge, sitting here in the NIP
contentment Of much prosvrr
oh, / bet you raise your eyes % 4,
future of America; raise your sys
to the necessity that America Es
lead the cause ] believe that Cd
has given to this great county,
leadership; that He intends Us .
lead the contending nations Of L.
earth out of their struggles and !,
to the mountain top Of perfect gsr.
eminent, and that he will give i
that leadership when We an
worthy; not when we are worthy 4
the Secretary of States Office 4
Washington; not when We an
worthy at the White House, bGI
when we are worthy in the NsT
York Chamber of Commerce, whs
We are worthy at WashngiG
when we are worthy at Wichiz
when we are worthy at Chiag
when we are worthy the nation eVs
20 meet the mighty problems {
Americanism that challenge Us Of
of a great hour! Then we rEkss
that leadership. And may God spssa
the day when American business
men will rise out Of the fatty degsr-
GRAFTON of present prosperity and ~
the need of nobler purpose, and %
the need of straighter thinking, al
see the need Of more coursgea
holding to the affairs upon which Oh
fathers laid their lives that we nlsi'
build here a nation of the free ia
the free, and for the brave!
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-14
Politics Has Its
Golden Language

You know sometimes in this age
we come to a feeling that America
is losing the stride in the step with
which we march in modern progress.
| am hopeful at this hour in Amer
lean life, when we are reaching out
to grasp the values we sometimes
forget, that in the inner conscious
ness Of the American there is a pur-
pose: and men do not realize what
that purpose is. Men are always
seeking for political Interpretation
Of events and we hear the golden
language of humanity; and to US it
speaks in no larger terms than The
terms of politics. We hear men
talking of a minimum wage scale, a
prohibition of child-labor, an equal
suffrage, and all the language that
applies to a golden programme, and
we say it is politics. And one man
stands over here, and he says,
THAT is Roosevelt's doctrine" and
another man says, at is no such
thing. Bryan was talking about it
before Roosevelt spoke" And there
arises out in my own Western coun-
try a man with an amplitude of
whiskers, and he says, "They got 1t
from me; | am the original Populist,
and | first spoke Of that" And so
far as the time-feature in the prob
lem is concerned, you have to give
consideration TO him and you have
to go back and ask him: "Who
taught you this language; who
taught you the language Of hu-
manity?" And he will say to you,
81 told you when | came ! was a
firm Lincoln Republican, a Thomas
jefferson Democrat"
The Battle from
the Beginning
And you can go back and say, Lin
coin, Lincoln, thou sainted Amer
lean, who taught you to put the
man before the dollar? Who taught
you the language of humanity"
And Lincoln would say, why, this
is what the fight has been about
from the beginning; this is what
Washington prayed for at Valley
Forge" And you go on back and
you say, Washington, where did
you get that programme? Who
taught you the language that puts
the man above the dollar? Who
taught you the language that
breathes to us in the great de-
mocracy of the United States that
idealism and principle of humanity
are above created wealth." And
Washington would say, why, this
is what they fought for from the
beginning; this is what we prayed
about at Valley Forge; this is what
Miles Standish talked about" And
you can 90 back and you can say,
miles Stsndish, where did you get
this programme? Where did you
get the inspiration that breaks
forth now and then in American
life and leads us above sordid
prosperity and much wealth that we