Evening star., 1922-06-29
RETAILERS REFU|1'E :.
/. PROF|TEER Charge
Chairman of Senate Finance
Committee Given Data onl
Conditions.

Charges of profiteering on the part
OF American department stores and
their influencing Of the metropolitan
press against the Fordney- -McCu
tariff, bill, made on the floor of the
Senate. were denied in an open letter
to Chairman McCumber of the Senate
finance committee from the executive
committee of the National Retail Dry
| Goods Association, made public to-
| day. The committee requested that
Mr.. McCumber place the letter in the
| Congressional Record. in which his
| charges were published. y.
| The letter said, in part:
"The answer to the charge that the
! great metropolitan newspapers are
venal and corrupt should more props
erly come from the newspapers, but
we desire to record our belief that
able.
| I'VE consider it fitting that the NJ
tional Retail Dry Goods Association
! should answer your second charge,
that Of 'profiteering,' as our member
ship includes about 1000 stores. both
Atlantic, to the Pacific. from the= Cana
dian border to the Rio Grande. doing
net business yearly Of more than
two billion dollars. ": X
| You base your charge on the pre-
sentation of number of imported
articles, sucn as a cuckoo clock. imi-
tation pearl necklaces, Kitchen table
knife. BARRIERS clipper, linen napkin.
electric light bulb. silver-backed
watch. ladies glove. shears, razor,
! curling iron, paper thermos bottle,
English straw hat, cane, carving set
pocket knife. decorated plate, flap
| jack turner, briar pipe and smoothing
iron. You designate the spread be5
tween the foreign cost and the retail
price Of each Of the articles of your
exhibit as the profit, as follows:
Here is little watch, silver
whether it is bought by the gross or
by the piece. The foreign cost is a;
dollar, and it is retailed in this coun-'
try for s.45. The spread, therefore.
is $s.45. and the profit, of course.
would be $40 per cent
of the cost and selling figures or your
method of computing them. or wheth-
er they are due to depreciation of ex-
change, the, truth as to the profit is.
OF course. entirely. different from
your. statement, because to the for
eign cost must be added the cost OF
foreign buying, inland freight aboard,
consular fees, freight and insurance,
duty to the United States govern
ment. custom house charges, general
overhead, tn. cost Of doing business
in this country and federal and other
taxes The spread between the cost
So determined and the price at which
the goods are sold is the true profit
Thus it is apparent that every per-
centage of profit of importer and re-
taller. stated by you. in some cases
to be upward Of 1000 per cent. is
that you have made the error Of de-
signaling as profit the difference
between the first cost OF the mer-
chandise and its marked retail selling
price. How profitable all business
would be if there were no expense!
Little ProhteerinE Found.
"The truth about the so-cnaled
prof1teering by department stores has
been authoritatively proven to be at
| complete variance with your asser-
tions. In 1920 the Department Of
Justice completed, under the Lever
act, a searching investigation into
| the charges Of retail 'proflteering'
so widely circulated in the press at
that time.
ITO the best of our knowledge and
belief, out of thousands of depart
ment stores Investigated, profiteering
was found in practically no caSes 1t
is interesting. in view of.a.year
controlled by their large advertisers,
to note that for a period of six or
eight months the press of this coun-
try at that time carried on the hue
and cry against the retail stores. all
though the members of our trade
were large users Of their advertising
columns \,
The bureau OF business research
Of the Graduate School of Business
Administration Of Harvard University
conducted. an inquiry into the cost of
operation in retail dry goods and de-
partment stores -, throughout the
United States. We quote from their
report. Profit and loss statements
for the year 1920 were obtained from
305 stores located in thirty nine
states. with aggregate net sales Of
$685. $4,000, varying per store from
$71,00 to $29,000,000. The average
net profit. was shown to be .01S per
cent of sales. In other words out Of
each $1.00 of sales / S-fO cents was
retained as profit Certainly a net
profit Of l $40 cents would not be
regarded as satisfactory by even the
most bitter critic of the retailer"
The Czechoslovakian government in
tends to make the sale of radium a
state monoOo1y JOachemS Sthal near