Evening star., 1932-01-30
Special Dispatch to The Star.

NEW YORK, January 30.-ProbablN
the greatest array Of unfavorable de-
velopments ever recorded in the history
of the agricultural implement trade wa!
assembled during 1881, says survey
OF the industry prepared by the re-
search department of r. G. Dun Co
Droughts, grasshopperS, overproductiol
surplus carry-over, interferenceS with
the economic laws of supply and de-
mand, reduced farm buying power, for
eign complications, retaliatory tariffs
badly balanced dealer inventories, low
dealer morale, greatly increased out.
standings and many other condition;
combined to make it year to be ended
without regret.
In consequence Of the restricted de-
mand, many plants practically were
shut down during the latter half OF
1881, with production, as a whole, trail
ing the 1880 record by about 20 pei
cent. Taking a 10-year average, 1t has
been estimated that it requires a daily
expenditure of $1000,000 for equipment
to operate the farms in the United
States. This is less than per cent OF
to be the lowest cost which any indus
Wy Pdgo AOI Pl lONuNbAOAl SHNIPllASlAS
Carry-Over Stocks Heavy.
The daily average output of all agri-
cultural implements in 1880 was valued
at approximately $3.50 900: in 1881 il
declined to S1,290,OO0 After deducting
21.3 per cent of the 1880 value and IT'S
per cent of that of 1881 for the require
ments of export trade, it will be seen
that jobberS are overStocked, because
of the heavy carry-OVer, and that fac
tories are burdened with excess mer-
ChandiSe. Most manufacturers are run
ming on short time so as to establish
an equilibrium between supply and de-
mand, but dealers continue to purchase
cautiously, as they report no difficulty
in securing prompt shipments.
The 1882 contracts have not been
made as yet chiefly because the tradc
was not solicited so aSSiduouSly in tha
Fall of 1881 as in previous years. Under
prevailing conditions it was considered
better to await the opening of the new
year to enable dealers to get their con-
nectionS made a little closer to Spring
demand. Some deliveries now are being
made on contract orders.
In 1928 the stocks of three of the
leading farm equipment manufacturers
Sl426. In 1929, these same stocks
earned S13.56 per share. but by the end
of 1880 the figure had dropped to $7l9
After the first quarter of 1881, one of
these companies omitted its regular
dividend, while the second company
followed the same action at the close
of the third quarter. The third COM
pany cut its dividend in half at the
end OF the second quarter.
Other firms not manufacturers of
farm machinery exclusively, but with
more than half of their output COM
posed of such products, passed many
of their difficulties along to their stock
holders, reporting that the decreased
earnings were due not only to the
Shrinkage of demand in the United
States, but to the dwindling export
trade caused by deprecated currencies
and tariff complications. Export trade
helped to maintain earnings in 1880, as
agricultural implements to the value of
SAL 100000 were shipped to Russia
alone during that year. In the first
half of 1881, RusSia'S buying was almost
as heavy as during the comparative six
months of the year preceding, but de-
cllned abruptly during the last half of
the year
Sales Recession Wide.
Prices of farm commodities hit a
steady decline to new lows during 1881,
Scraped the all-time bottom for months,
eventually to rise slightly, fiuctuate un-
steadily, and finally to show increased
strength during the early weeks of the
current year. As a result, farmers were
unable to make anything like normal
requirements of their wornout equip
ment, and sales in 1881 declined on an
average of 20 to 80 per cent from the
total set down for the year preceding.
The standard run of machinery and
implements met with a demand about
on a level with the movement existing
during 1881. The shrinkage in volume
was mainly in the small tool lines,
rejecting the serious financial situa-
ton Of the tenant farmer and small
agTiculturiSt. Tractor sales were affected
to a lesser degree, as trade in this de-
partment comes principally from the
larger operators. In potato machinery,
sales in 1881 practically were on a par
with those of 1880, although it required
considerable effort to maintain the
volume.
Conditions in some parts of the South
have caused a distinct turning of in
quiry to horse-d drawn equipment. This
is due chiefly to the fact that there is
such an abundance Of grain and feed
stuffS en- hand, and because the low
price Of cotton has made financial con-
ditionS such that little buying of power
equipment could be done, even if de-
sired Some repOSSeSSiOnS have been
made in this territory during the past
few months, because of the inability to
keep up payments.
Current Demand Fair.
Nest of the dealers in the South are
well stocked, in anticipation Of a fair
ly active demand, but flood conditions
in the Mississippi area, which thus far
have affected nearly half million
acres, with fear of other sections be-
ing inundated, are causing a postpone
ment of orders. The prospects are that
crops this year will be made with less
cash than in a long time, which will
mean restricted buying of equipment,
although plans include more feed and
food crops than usual.
It must not be overlooked that, un-
like in former years, large portion of
the $1,000 100000 in new wealth pro-
duced from the soil by American far
mers in 1881 still is in the farmers
hands, and that they will benefit by
the price increases now in progress.
Of the $4,000 farm implement dealers
in the United States, 65 per cent sell
tractors and other power farming equip
ment. About 80 per cent sell gasoline
engines, of which there are more than
100000 in use on farms. The selling
Of accessories required for power ma
chinery likewise is handled through the
farm equipment merchant, whose stock
now includes such items as spark plugs,
fan belts gasoline, lubricating oils, pis-
ton rings, radiator hose, tires, betting,
radiators and other automotive &C
CessorieS and parts.
Many farm implement dealers are
capitalizing the electrification of the
farm by merchandising electrically
operated equipment fer the household
as well as for the farm proper. There
are about 100000 threshing outfits in
the United States, which represent an
investment of 9O,OOO,OOO, with an an
nual repair bill of $14,OO0,000, exclusive
of the $9,OOO,OO0 spent every year for