The Washington times., 1928-03-21
EXPERT TELLS
PROSPERITY
CAUSES
BY b. c. FORBES

These are timely, important
questions.
American prosperity: It's causes
and consequences" a full-sized
volume has just been written by
Paul Mazur, partner in the in.
fluential banking firm of Lah.
man Brothers. Two years ago
Mr.. Mazur made 6. survey OF
retail practices and facilities for
the Retail Dry Goods Associa-
ton. and his new book is the
fruits Of a comprehensive eco.
noEnic survey.
Impressed by It's contents.
asked Mr.. Maztir to summarize his
chief conclusions, especially his
judgment ~ to whether prosperity
win increase or decrease.
Industry Active
His announcements will interest
you:
For seven years American in.
dustry has been active and Amer.
team consumers have been pros.
porous. Now the newspapers are
reporting widespread unemp!oy-
ment: the stock market seems to
give evidence of uncertainty;
business ID somewhat spotty and
over all hang the clouds Of DOUBT
that come with each presidential
election year.
For several years European
and American observers have been
busily engaged In examining
American prosperity and itg
causes. Most Of The reported
answers have pointed to three
chief reasOnes High production
per worker. high wages and
cheap money. II Is doubtful II
these form the true explanation
for American prosperity.
Production by itself cannot
last unless 1t creates large inven.
tories, and large inventories are
dangerous. Sales are the basis
for continued production and rea-
sonably-sized inventories.
High wages are . result. not q
cause, since wages depend upon
production. and production de.
ponds upon sales. Wages create
production only when they are
converted into purchases.
Cheap money helps industry
only because it does not hinder It.
1t Is the existence OF sales vol
urne and not the ability to borrow
money for 4 per cent that keeps
factories and stores busy.
Large Sale Reasons
.'Sales are the basis Of Amer.
lean prosperity. 4 few Of the
many reasons for large sales
volume can be briefly mentioned.
First. The American consumer
has the highest standard Of liv-
ing in the world. Education,
moving pictures. and especially
advertising, has developed the de.
sires Of the American consumer
and raised his standards Of uv.
ing. Unlike Europeans, almost
every American wants an automo.
bile so very much that he has
obtained one. A huge industry
has resulted.
Second. New styles have been
created by American industry and
demanded by American consum.
ers. The factor OF style has
spread until it engulfs clothes.
automobiles. radios, furniture. re.
frigerators and thousands Of other
things. This has created mil,
lions and millions of sales.
Third. The ability Of consum.
ers to purchase has been in
creased by instalment buying.
Since the war over five billion
dollars Of annual sales volume has
been thus added. and this has
been an important element in our
prosperity.
but there are some elements
or great danger in the present
situation.
"The needs OF the production
machinery Of the country are
being threatened by the needs OF
the sales departments. High cost
distribution exists because mass
production requires more and more
sales volume. Sales methods
have been effective, and the re.
suits have maintained industry on
a prosperous basis. To advertis-
ing and effective selling belongs
the praise, not the sneers, OF
economists and students.
Production Methods
But we have reached a point
where sales and production meth.
DDS must adjust their differences
or the country will dwell in the
questionable glory Of profitless
prosperity. As sales volume is
obtained in greater and greater
amounts, sales methods become
more and more expensive. y The
savings Of efficient standardized
production may be eaten up
by the cost of selling. The stand
ardization that is so helpful to
scientific manufacturing must be
modified by the ever-changing
styles demanded by a selling or
ganization that Is seeking to stimu.
late business by all known and un.
known methods.
"Is prosperity nearing its end?
! do not think so.
1.-THE answer is in the hands of
American business men, and there
are fresh indications daily that
business Is alive to the situation
and is adjusting itself to offset
present dangers within. In the
light of recent business history,
particularly the part advertising
has played in 1t, there would seem
to be no limit to consumption pos.
sibilities providing industry pro-
duces what il wanted.
Industry has seen the light and
Is adjusting itself to insure and
satisfy ever-changing but never
ending demand. This unquestion.
ably means continued prosperity"
Such assurances are comforting
at this time.
Copyright, 1928. by d. c. .Forbes)
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