Evening star., 1942-11-08
Small Concerns Feel
Inventory Action
Came Too Late
Barn Locked After
Horse Was Stolen.
They Complain
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, Nov. 7.-Now that
the War Production Board has de-
cided to limit the inventories Of the
bigger merchants and manufac-
turers, the smaller elements are still
far from satisfied. reports an article
in Business Week today. WPBs
action, they say, is plainly a case
of locking the barn after the horse
was stolen.
Specifically, these complaints hinge
on two arguments. The first is that
WIPES forthcoming order won't con-
dscate any existing accumulations,
which means that If a big fellows
warehouse is bullying with nylon
stockings, for instance, there's no
way the little fellows can get their
share at this late date. The second
argument is that, unless inventories
are geared to production, the big
fellow can still outbuy his smaller
competitor in lines where shortages
impend.
Business Week points out that
WPB, on the other hand, gives
every indication of being finished
with a distasteful business. Last
week it issued what amounts to a
White Paper explaining its actions.
The bulky document holds no brief
for the small businessman just be-
cause he's small
Stocks Gobbled Up.
What primarily caused WPB to
step into the picture at all, says
the paper, Is the fact that depart
ment stores and big Independents
gobbled up so many stocks that the
little stores in little towns, as we'll
as merchants in defense areas, are
running into supply difficulties.
The effects of this distorted dis
tribution would be bad on the morale
of the population, might lead to
black markets and profiteers' prices.
Furthermore, says the report, if
there is to be any widespread ra-
tioning, retailers must have some
stocks on hand to give the rationing
system a start. Finally, WPB be-
lieves that buying beyond actual
needs terminates "large-stock psy-
chology' which will tend to per-
petuate inf1ationary tendencies into
the postwar era.
In short, the board implies that
it isn't too perturbed about the
little fellows failure to initiate the
big store, but is concerned over
keeping all corners of the Nation
supplied with necessary items.
Big Rise Evident.
The position of the large depart
ment stores on inventories is evil
dent when comparisons are made
between supplies as of June 30, 1912,
and the average for the year $685.
Similarly, when the independent
retailers of all types are considered
as group the big fellows uniformly
have the edge of inventories over
the little fellows. The chains, says
the WPB report, have been only
spotty offenders. Mems wear stores
lead the parade, with the variety
chains tagging on behind. The major
classes of chains are declared in
nocent.
Inventories of wholesalers and
manufacturers DO not appear to be
excessive. Furthermore, small
wholesalers seem to have increased
inventories in relation to sales in
greater proportion than big whole
salers. Nonetheless, WPB thinks
that wholesalers and manufacturers
must be subject to control to pre-
vent retailers from using them as
storehouses-and thus avoid the ef-
fects of regulation.
Currently, WPB is writing an or
der that will cover the whole in
ventory situation. Business Week
says that according to advance in
formation, the policy will be to
make it simple, in accordance with
usual accounting procedure and
business methods, inexpensive to ad-
minister, flexible. To this end, WPB
will order merchants and manufac-
turers to determine their Stock-sales
ratios (by quarters) for the base
years 1889, 1910 and 1941 and to
keep current inventories geared to
that base. This applies only to fin
ished civilian goods, and only on an
overall, total company basis. In
determining allowable inventory for
a forthcoming quarter, the mer-
chant or manufacturer would be
granted a per cent leeway before
penalties would be applied.
Exemptions Allowed.
Exempt from the order will be:
Any merchant or manufacturer
whose sales in the year ending Sept.
30, 1912, we're less than 100000 or
whose inventory was below SIS 900 at
cost value. Regardless of size, the
following are also exempt: Mer-
chants engaged in the food busi-
ness, eating and drinking places,
secondhand stores, florist shops,
antique stores, service establish
ments, steel or other raw material
warehouses, dealers in motor We
hicles or motor replacement parts,
ay-grain-feed stores, farm imple-
ment dealers, merchants handling
fuel and importers; also manufac-
turers supplying these merchants.
Business Week points out, in
cidentally, that the WPB report
contains the first down-to-earth
estimate of the civilian supply stu
alton thus far given out by the
Government. In units, new supplies
for the last half of 1912 will be
per cent lower than in the first half
of the year. And unit supplies of
new civilian goods in the first half
of 1943 will be down II per cent from
the same period of 1912. Sources of
this data, says WPB, are confidential.