Evening star., 1928-06-10
BILLIONS ARE LOST IN u. S. /
BY BUSINESS PRACTICES
Government Sets Out to Correct Leaks
in Retail Credit and Wastes in
Industrial Output.

of those concerned to bare their trade
secrets TO the gaze of a competitor. and
until the Government stepped into the
picture that is lust about what would
have been entailed, for 1t Is not unnat-
ural to suppose that any private study
would have been made by some sort of
a group drawn from the various lines of
industry.
Now. however, the Department of
Commerce will collect its reports, safe
guard their origin and only make find
ings public under the veil of anonymity.
Because of this very fact, II is believed
that the survey will get hearty CO.
operation from merchants in general
and will accomplish Just what 1t sets
out to do.
A sample QUESTIONABLE. which even-
tually will be distributed through
typical crosS-Sections of the country.
now is being given try-out for any
additions or alterations to the ques-
tions to be propounded to the mer-
chants. and when departmental e1-
perts are satisfied thnt T. meets re-
Quirements 1t will al once be dis
tributed over the country.
Waste i'm Industrial Output.
In attacking the marketing and dis
tribution study. the department Is
going into a matter whose Importance
was we'll illustrated in a recent speech
by DR.. Julius Klein. director of the
Bureau of Foreign and Domestic Com
merce, in which he declared wasteful
methods in handling industrial output
the gravest business problem confront
ING the country.
Using the calculations of group of
engineers appointed by Secretary of
Commerce Hoover to study waste
elimination. DR.. Klein estimated the
country's losses from inefficient dis
tribution-between producer and con-
Sumer-at $4,000. 100000 annually. and
he figured that one-eighth of this was
due to the careless administration of
retail credits through overextensions.
slipshod installmenrs and the like.
Overselling poor markets and failure
to heed good ones we're other con-
tributing causes to this huge loss.
Thus far, In various business sur
veys conducted by the department.. ii
is explained, it has been found that
the failure all along the line pro-
ducers and merchants. to gauge accu-
rately the cost of making sales has
been a flagrant source of loss; that
whereas manufacturer would usually
have figured out to the fraction of
cent the cost of putting his product
at the factory door. that thereafter
the cost of the various steps before
tt reached the consumer was almost
entirely lost sight of
DR.. Klein put il this way: To-day
every prosperous manufacturer knows
accurately each item Of his costs
But can We safely make the same
statement of our distributors? 1t is
certainly the exception rather than
the rule for any establishment to have
its sales costs accurately distributed by
percentages as among its various COM
modities, or among such items as ware
housing, delivery. advertising. clerical
hire. travelling statesmen market analy-
sis. etc"
No Study OF Sales Costs.
Consequently. where there Is no
study of sales costs. there Is a no
ticeable failure TO reduce sales costs
when 1t becomes necessary TO trim
sails" the first thing that ig thought
Of rather, being reduction Of produc-
ticn costs.
Another leak in distribution pointed
cut by DR.. Klein is In selling In
blind markets"--such as was done
by a paint concern which launched
campaign In a State heralded as a
good market" when, as matter of
fact 85 per cent of the structures there
we're OF brick construction.
Many months are 10 be consumed by
the department In carrying on these
two studies, and when the findings are
ready they are 20 be made public
''as is" without any recommendations
on the part Of those making them.
for, as II is explained, facts speak for
themselves, and the good Judgment of
the American business man may be
safely trusted to carry out policies
which he can see for himself will cor
rect poor practices and tend 10 profita-
BILE nt1eratioY