The Birmingham age-herald., 1920-05-16
NEW PLAN ID GUT
 HIGH LIVING COST
Trouble With This Scheme Is It Won't Work, Says
 Grocer

A new movement to solve the high cost l of living has been started in New York,
 and echoes of it have been heard in Bir- mingham, where copies of the prospectus issued by it's packers have been received. l The originators of this plan propose 1 to start with $5,o00,ooO capital and | frankly state that mo movement can
 succeed until it is powerful enough to
 dispense with the middlemen." It is pro- posed to secure the money in shares of S6 each, earning interest cumulative at b | per cent.
 | The directorate of the movement com
 prises four clergymen, four college pro- | fessors, seven officers of community councils one labor union official and
 two others whose occupations are not stated. There does not appear tn. name
 of anyone well known in mercantile cir
 cles or the food trade. The plan is to sell 1 direct to consumer from manufactures, 1 thus eliminating all middlemen.
 | The prospectus idea of profteering in
 foodstuffs has creatsd much interest ln | trade circles. It says 1 Ut is known indisputably that large number of successful manufacturers and
 producers of food products and other ne-
 cessities of life have. during the past few years. made an average net profit of at | least 20 per cent that many large whole l salers in the city today are making 7l2 i per cent to 12 Kper cent profit on all mer chandise sold by them. and that 15 per
 cent to 20 per cent profit on sales is being
 made by 25,900 retailers In the city. 1 (New York). Added to these are the
 profit of specuatng middlemen and eN-
 penses of unnecessary duplication of dls-
 tribution, making a total cost to the cou-
 sumner for these items about 5j cents n each dollar
 l Col J. l.. Daniel. of Shropshire &; Dan
 iel retail grocers. when asked his opln-
 ion of the proposed movement, declared
 it was weird and interesting.
 i T would like to meet a wholesale gro cer whose net profit is 71a to 124 per cent" said Colonel Daniel. "The liar
 ward Bureau of Business Research, which 1 is regarded as the best authority on mercantile analysis, has proved that wholesalers rarely net above per cenf,
 and the only thing that makes the busi- i ness profitable is it's frequent turnover. 1 I would like also to meet the manufac- turer who 'netted' 20 per cent.
 This scheme carefully refrans, as
 all reformers do from mentioning those
 details so intricate and which go on so persistently to make up the high cost of living.
 Most of these plans wholly miscon- 1 ceive the functional side of the dis Itributor and middenen, as the New York Journal of Commerce pointed our lin a recent article this subject TheN ! fail to realize that the middleman does
 something for his charge; something that cannot be overlooked or gone withoit. If the consumer Is willing to do these things gratuitouslv the expense will be 1 saved but any organization capable ot buying $5100OC0 quantities will require as involved machinery. equipment ana help as the present channels of distriop- ton. Individual economies fade away lin the face of large systematic establish ments. as every business man knows. hht as the ordinary consumer does not know, 'Every business man knows that there lis a high cost of living in carryin gMPn business just as grievous as there iWin the household. Whatever may be the gross profit. the net is no higher now than years ago.
 'The packers of this plan would have lvou believe that by simply waving the 1 wand of magnitude you can dispense with all the intrcaces of financing and managing and operating a s5,O0o,oo0 coo- cern All the 'co-operation' in the world won't down an economic fact"