The Wolf Point herald. (Wolf Point, Mont.) 1913-1940, 1920-01-29
RETAIL MERCHANT
CURTAILS CREDIT
UNUSUAL CONDITIONS FORCE
MANY TO ADOPT A CASH
BASIS FOR 1920
Rapidly Rising Prices Present Many
Problems to Montana Retailer,
Forcing Him to Double His Invest
ment in Three Years, to Replace
Stock as Sold.

More merchants will adopt the
cash basis in 1920 than during any
previous year in the history of
merchandising in Montana, accord
ing to predictions made by whole
salers and prominent retail men in
all parts of the state. They are
being forced to this course as a
result of the unusually difficult
conditions which have developed
during the past three years.
Montana merchants have watched
with growing concern the shrinking
margin of safety and the decreas-
ing margin of profit during the past
year, according to George w. Sturm,
who for rs years has conducted one
of the largest credit retail groceries
in his section of the state and who
has recently adopted the cash basis.
Mr.. Sturm points out that the contin-
ually rising market not only has re-
suited in smaller and more uncertain
profits, but that it also has necessi-
tated a much larger investment than
many of the merchants have been in
a position to make without straining
their resources.
LIT ulSn COSI vi llfluS has U6eu
felt keenly by every farmer, laborer
and clerk" says Mr.. Sturm, "but it
has presented even more serious
problems to the merchant than to
the average consumer, whose income.
with but few exceptions, has kept
pace, at least to some degree, with
the rising prices of necessities.
Investments Doubled
'The merchant who started In
business a few years ago with $780,
900 capital, and who probably was
carrying on his books as many ac-
counts as he could with safety, has
been called upon to double this in
vestment during the past three years
in order to carry a stock as large as
the one he started with"
"a careful average of wholesale
costs in all lines shows that the in
has been nearly so per cent"
said A. j. Mcintyre, secretary of the
Montana Wholesale Grocers' associa-
ton. Merchants who have been un-
able to make this additional invest
ment have been forced to be content
with a much smaller stock, replacing
only a portion of the goods sold"
In groceries. dry goods, and other
lines where the turnover" is rapid.
the merchant has not made enough
profit to make the additional invest
ment necessary without outside aid
The many who are, per force, doing
business with smaller stocks than
they had in 1915 are not making
any larger margin OF profit than they
did In former times-in fact they are
taking a smaller gross profit-yet
their sales are curtailed to a certain
extent because Of the limited lines
which they are now carrying.
If a merchant had bought a COM
plete stock OF staple goods three
years ago and closed up his store for
three years, to open II and sell goods
today, he would, at present prices
make more than 100 per cent gross
profit on every article he sold
But Few Profit by Advance
AS a matter of fact, instead of
benefiting by constantly Increasing
he has been compelled 10 alb
sorb many advances before raising
his retail price He has turned his
many times during the past
years. replacing the goods sold
with the same brands al an advanced
wholesale cost The instances where
merchant has bought heavily In GER
ain lines and held the goods for a