The Richmond Virginian. (Richmond, Va.) 1910-1920, 1917-02-25
COST SYSTEM FOR
RETAIL MERCHANTS
Federal Trade Commission issues IN
terc~ting Book for Merchants
and Manufacturers

In line with the country .wide CAM
paign 10 improve business methods IN
All iiues Charles l.. Hoerr. OF Chicago.
chairman OF the credit department
methods committee OF the National
Association OF credit Men. has obtain
ed an interesting statement from E
\. Hurley. chairman of the federas
trade commission in which he de-
clares that there must be decided i'm
proVement In the determination Of
costs before the country can expect
a decrease in the high business death
rate among retail merchandise
Mr.. Hurley's statement follows:
The federal trade commission has
round that the majority of retail mer-
chants DO not know accurately the
cost OF conducting their business and
for this reason they are unable to
price their good intelligently. There
must he decided Improvement IN this
direction before competition can be
placed upon sound basis and before
we can expect a decrease In the heavy
business death rate among retail mer-
chants
There is "a tendency among retail
merchants to conduct their businesses
without an adequate system for de-
tern1tntng their costs. This condition
carries with IL various undesirable re
- N''N go ~ k'aNSs Wv fliSE CHANT
is unable 10 price h,s goods iutelli-
gently and conduct hi~ business upon
sound business principles. In the
second place. he is unable. when
seeking credit, to produce a correct
statement OF his financial condition
which would enable a banker to ex-
tend to him the full credit 10 which
he lis entitled lie tharehv limits the
possible expansion OF his business
Formerly the necessity for the de-
termination of true costs was not as
Imperative ms Il is today Margins DO
tween cost and selling price In most
lines were larger Costs could te
ignored except in a general way and
good return stiil be made on the
investment; but TO-DAY margins OF
profits In most lines OF trade are very
much narrower than formerly. and
the necessity FOR the most efficient
management and closest analysis IS
felt az never before
"A large proportion OF business men
are not making the money they
should. A great number Of them arc
actually losing money The purpose
or conducting n business Is to mako
money and the only way to make
money is to sell something for more
than it costs. The first essential then.
is to know the cost II Is the belief
OF the commission In 20 many of our
trades and industries Is due to the
ignorance on the part of business
men OF what their goods actually cost
to produce and sell This ignorance
causes them to make unprofitahle
prices, which the merchant who does
know his cost is forced to meet to a
large extent
The commission 10 urging rer-
chants TO determine their costs ac~
curately in the interest of better
trade conditions. IT believe. that
anything that is OF benefit to a trade
OF industry is OF benefit to the public,
and IT IS also Of the opinion that the
nearer cost system approach uni
formity tho moro satisfactory will be
the results
Our efforts are directed to assist
ing and helping the merchants and
manufacturers of the country to i'm
prove their accounting and busin
practices. and In general to helping
them to overcome an'inhertted tndif-
ference to efficient business methods
The federal trade commission Is send
ing to merchants and manufacturers
at the present time booklet on bet
ter business methods, which 1t hopes
will be helpful to them"