Evening star., 1924-10-04
BY ROGER w. BABSON.

special Dlspatcn 10 Inc Star
WELLESLEY HILLS, Mass, Octo-
ber 4.-The development of our next
period of prosperity is almost entirely
in the hands Of those who control our
distribution.
During the last 40 years great prog
reSs has been made in production.
The keenest minds have gone into
| manufacturing, men who naturally
desired to create and produce have
preferred the making of goods to job
bing or retailing. The result has
been that with a few exceptions the
least aggressive men have gone into
the distribution end of business.
This is especially true of the smaller
retail trade, where we find as gen.
era1 thing individuals who are not
very ambitious and progressive. The
result of all this has been the reduc-
tion of the cost of producing. We
make practically everything today for
less than it cost to make it 90 years
ago. We do this in spite of higher
| wages. The cost of distribution
| meantime has climbed steadily until
it has more than offset our savings
on the production end of the business,
and the retail price on practically all
articles today is above what 1T was
90 years ago
Distribution Most Vital.
The manufacturing capacity of our
country is now highly developed and
is far ahead of our ability to dis
tribute effectively and economically.
The problem of American business,
then, is the problem of distribution
and l venture to say that during the
next 40 years the keenest minds in
| our business world will be working
| on it. The great ''inventons' will be
in IL n
| distribution rather than with new
methods of manufacturing.
Progress is. of course, already be-
| ing made. The rapid development of
! the chain store is one of the first evil
| dences of improved distribution
| methods. The store on motor truck
| is another, for it has the cash trade
| advantage of the chain store and at
| the same time provides an economical
| delivery system l am told that one
| of these enterprisng motor truck
store retailers here in New England
| is not only saving rent on his store,
| but by displaying advertisements on
the sides of his truck is practically
| paying his running expenses. These
various forms of self-help stores are
| forereunners of other plans which are
sure to come and which will help to
! transfer goods from maker to user on
4 more economical basis.
Advertising Cuts Costs.
The rapid increase in the use of ad
vertising is helping to get the vol
ume that brings distribution costs
down. Direct mail merchandising
and new house-to- house canvassing
plans are other efforts in this same
attempt to reduce the high cost of
selling. ] believe that the chain store
has come to stay and that newspaper
advertising especially Will be used
more and more as an economical ana
effective sales agent. 1t is probable
that our great universities and tech
nfcal schools will consider distribu-
ton an important subject and Will
give much time and thought to it
from now on. The recent Baker gift
of $4,000, 600 to the Harvard school of
business rather than to any classical
or technical school is Indicative of
this trend.
Chain store stocks High.
Stocks of the good chain stores are
high at the present time, from an in
vestment point of view, and certain
other chains are being promoted
largely for their sale of stock rather
than for legitimate business purposes
Investors should therefore be very
careful in buying chain store securi-
store industry is sound and is bound
to prosper.
If we are to improve the system
of distribution and reduce the spread
between the manufacturer price and
the retailers price it is vital that
many people change their ways and
begin TO take a real interest in this
complicated problem. The cost of
distribution begins the moment the
article leaves the factory. Every
railroad employe is factor and can
increase or reduce this cost depending
upon whether he hinders or helps in
the transportation of these goods
Few railroad men recognize this fact.
Economic Crusade Needed.
1t is also true that few railroad
officials have done anything to help
them appreciate the Importance of
speeding up transportation so that
every one can save money. The truck
driver. the advertising agent, the
president. the newsboy are all fac
tors in this great system of distribu-
ton. They can help or hinder as
they Will In fact, it has become far
more than ID mechanical or economic