Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1920-09-09
LOSING on REPLACEMENT VALUE

LOSING On REPLACEMENT VALUE
Now that selling on replacement
value means loss to the average
merchant where 1t meant profit
when prices were, going up on every
thing, the ruling: Of a federal court
that a merchant had q right to sell
his goods at fair margin OF profit
above the market value cost OF those
goods at the time Of sale regardless
OF what they actually cost when they
were bought by the merchant Is not
Of so much Importance as 1t would
have been year or two ago. Selling
land at what it would bring and not
at what 1t cost has been the accepted
rule OF commerce and selling mer-
chandise upon that rule seemed legal
II 1t did not always constitute good
business policy. We have been prone
to yell "profiteer'' very often without
thought as to conditions.
Today. however. the tables have
turned and replacement values
promise to be lower than costs. Mer-
chants are forced by their competi-
tors and by tho market to sell at
much less than fair profit above
cost Thu public now compels them
to sell upon replacement value; the
Same public that squealed loudly
when the merchant wanted to sell
that way on rising market.
It Is a condition IRON which there
Is no escape. Merchants must keep
goods on hand or shut UP shop. II
prices decline tho best merchant on
earth can not prevent loss. All he
can do Is to movs his merchandise SO
fast that the loss, will be sinalk To-
day most merchants will need some
OF their extra margins Of the past TO
replaces their losses of the present.
It all comes In the business.
There are many prices, however.
that will not corne down as fast as
the public may e:spnct. Wool for in
stance IL unstable at half the war
time price but cloth Is made q year
before the garment IL offered for
sale. hence cloth today was made out
OF high priced wool. Cloth Is being
made now out Of low priced wool
which viii be on sale next fall but
wages In the cloth mills arc higher
than thsy ever were. No very great
decline in cost OF making cloth can
endure until labor is cheaper and
labor can not be much cheaper until
men have been out of work for q long
time.
The proflteer In sugar has been
talked about and the specuIator IS it
but the average retail ,deale.- paid
the, long price for sugar and sold
upon a fair margin but now he
suffers a big loss on the sugar he
happened to have. on hand when the
price broke II he happenei to be q
wholesaler with 81 big warehouse full
OF sugar for his regular trades his
loss was a big loss in proportion to
the size Of his business.
AS soon as prices begin to fal, some
OF the profits during rising prices are
washed away. When town lots were
booming and profits were suddenly
made nobody cried out against the
profiteer because everybody knew
that the boom would bust some day.
Nor has the public ever come forward
IS make good the losses In town lots.
sugar OF any other merchandise
when things reached the down hill
side.
The federal court rules that a mer-
chant Is entitled to his profit above
replacement value but now the mer-
chant can't get 1t. Government resu-
lation Of prices was dernobilized
when the war ended. Likewise with
the courts ruling that merchant Is
entitled to a fair profit upon the
volume Of his business regardless OF
the per cent he may earn upon the
capital invested, 1t IL Of little value
when the government seizes IN taxes
46 per cent Of all profits made above
20 per cent upon the capital invested.
What we need is the supreme courts
ruling as to whether sur taxes and
excess profits taxes are constitutional
or not.