Evening star., 1926-12-17
MEN AND MONEY
By NJ. S. Rukeyser.
(Copyright. 1926.)

What question is at the moment
| uppermost in the minds of American
business men?
A. W. Shaw, publisher of business
books and magazines, who has taken
a. census of the attitudes of men of
commerce all over the country, sup
plies an answer.
For three months" says Mr.. Shaw,
prices and profits has stood high
among the list of subjects attracting
the most attention from the business
men who supply information. Now it
has topped the list.
"The narrowing Of profit margins
has become one Of the outstanding
chara cteristies of the underlying
trend. business men have sensed
that fact, and many earning state
ments now appearing demonstrate
that they have ample reason for list
ing prices and profits as of keenest
current interest.
Now what, exactly, do they mean
by prices and profits?' They mean,
/ think, that profit margins are often
dangerously thin-~that very frequent
ly prices do not admit of a sufficient
net.
."Is 1t possible that the emphasis
is placed too strongly on volume?
Has it become, in other words, a sort
of business fetish to strive for larger
volume more or less regardless of
almost everything else?
Market to Exploit.
"To answer yes to both of those
questions might be rather natural, it
seems to me. We have had a
tremendous market to exploit, sales
are rather obvious measure of
accomplishment, we have driven
mass production to unprecedented
lengths. Would II not he natural
under such circumstances-in Operat-
ing, for instance, either department
store or a natural business--to keep
constantly lacking up sales quotas,
to bend every ounce of energy toward
oclipsinG old sales records?
I believe the outlook is any
thing but discouraging. For when
ever the pendulum swings too far,
business men are quick to start it
back toward normal. And in this par
ticular instance | believe the needed
rea ction has already set i'm
If profit margins are narrowing, it.
is another way of telling consumers
that bargains are being offered.
The complaint that profit margins
are becoming simmer may at first
blush seem inconsistent with the fact
that in 1926 many corporations will
have amassed the largest net earn
ings in their history.
Rate of Earnings Small.
The railroads, for example, will
show unprecedentedly large profits,
but the rate Of earnings on the cap
in 1916.
In the case of industrial corpora
tions, dominant concerns which, like
General Motors and United States
steel Corporation, are the leaders in
their fields, will report excellent earn
ings. but In this year of extraordinary
competition those who have not been
up to the highest standards of eff
ficiency will not fare SO we'll.
In this year OF record breaking
business volume and falling com
modify prices wages have continued
to move upward. The net effect has
been to augment the purchasing power
Of the masses. and to make the
domestic consuming market broader
than in the past.
Although experience is unquestion-
ably the best teacher, the rate of
tuition is high. 1t is good business to
try to learn something at the other
fellows expense.
r. F.. McCray. president of the Nc
Cray Refrigerator Co. who started as
butter and egg man, has tried for
AZ years to come to an understanding
of the fundamental principles of
business. -
Here is his formulation OF the five
essentials for making an enterprise
succeed:
First. The designated head of
business must himself run that bus-
ness from his own knowledge of, and
experience with, that business.
Takes Long Time to Build.
Second. Successful businesses are
built up over long periods of time,
rather than thrown up by black magic
overnight.
Third One of the crying needs Of
all business is men--and men in
responsible positions who lend them
selves TO the development OF men to
succeed Them.
Fourth Quality merchandise ade-
quStely and fairly priced is the sound
est merchandise for long swing
progress.
Fifth. The only way to make a
business grow Is to go out after orders
in definitely determined markets with
definitely directedkAools. y
The seven maxlms of G. +. Swift,