EXCERPTS FROM THE 1938 ANNUAL REPORT OF THE SECRETARY OF AGRICULTURE Nature of the Agricultural Problem In the United States, where farm-production power greatly exceeds the purchasing power and with some crops the needs of the domestic population, the objectives of the national agricultural policy differ profoundly from those of deficit-agricultural countries, whose first necessity is an adequate food supply. Here the problem is economic more than technical; in other words, from the national standpoint it is essentially a problem of marketing rather than of deficient production. As we saw recently, it takes several years of crop failure to cause even small domestic shortages. Normally, our task is to prevent surpluses from beating down prices and to maintain a satisfactory balance between production on the farms and production in the factories. More and More Produced Per Farmer In the last hundred years the production per worker engaged in agriculture in the United States has increased threefold. In crop production the increase per worker was probably 25 percent from 1850 to 1860, probably 50 percent from 1850 to 1900, and probably 30 percent between 1900 and 1930. In the post-war decade, 1920-29, the crop production per worker increased less than 10 percent; but the total agricultural production per worker, including livestock and livestock products, increased about 25 percent. Between 1910 and 1930 the increase in agricultural production per worker was about 41 percent. Farm Problem a National Responsibility There is no way for the farmers individually to deal effectively with the partial loss of the export market, the rapid approach of stationary populations, and the increasing rural congestion in many areas that results from industrial depression and unemployment. Nor is there any individual remedy for the fact that technology increases farm production per agricultural worker while other forces contract the market. Some people believe agriculture should decommercialize itself and become more self-sufficient. That would be a backward step. Moreover, the resulting reduced purchasing power of farmers would force some urban people into subsistence farming. Agriculture needs to get back on a business footing, and well-conceived national programs must help it to do so. There is no escaping the necessity to adjust the farm output through measures that will not drive farmers from their farms. There is no escaping the further necessity of finding new outlets or of providing marketing controls to deal with surpluses when they accumulate unavoidably. Also, we must arrest the increase of tenancy and increase the equities of owner operators. Left uncontrolled, the prevailing trends will tremendously increase these evils. With farm youth backed up on farms and with the urban unemployed flocking to the country in periods of depression, land hunger is likely to produce absentee landlordism. These problems constitute an obvious national responsibility. EXCERPT FROM SECRETARY ICKES' REPORT AS PUBLIC WORKS ADMINISTRATOR "While the peak of PWA construction employment will not be reached until the height of next year's building season, the record of the 1938 program to date reveals: "1. 7,853 PWA projects calling for the expenditure of $1,574,769,686 were put under contract in 143 working days. "2. PWA released for construction and supplied to heavy industries an average of more than $11,000,000 worth of work daily. During the four months following passage of the Act, there were approved projects at the rate of 2,000 per month, thus placing on the market more than $300,000,000 worth of work every 30 days." FOUR NEW BIBLIOGRAPHIES ADDED TO BUSINESS INFORMATION SERVICE Basic information lists on "Mergers", "Office Management", "Personnel Management", and "Industrial Marketing" have been added to the Business Information Service, issued by the Division of Business Review, and a limited number of copies are available upon request to DOMESTIC COMMERCE. PERSONAL CARE EXPENSES IN FOUR NORTHWESTERN CITIES The Department of Agriculture has issued a release on personal care expenses in four northwestern cities, as a part of the Consumer Purchases Study. Copies are available from the Bureau of Home Economics of that Department. SALES MANAGERS' ASSOCIATION OF PHILADELPHIA ANNOUNCES ANNUAL COMPETITION The annual contest for an award presented annually by the Sales Managers' Association of Philadelphia, and sponsored by the National Federation of Sales Executives, has just been announced. The prize, which is termed the Howard G. Ford Award, is given for outstanding achievement in sales management, and will be awarded at the National Convention of the National Federation of Sales Executives, to be held in Philadelphia, June 5, 6 and 7, 1939. NATIONAL ASSOCIATION OF BETTER BUSINESS BUREAUS SPONSORS BUSINESS-CONSUMER A conference on business-consumer relations, with emphasis on advertising and selling practices will be held at Buffalo, New York, June 5 and 6, 1939, under the auspices of the National Association of Better Business Bureaus, with the cooperation of business, consumer, government and educational organizations. TRADE AGREEMENT BETWEEN THE UNITED STATES AND THE UNITED KINGDOM The United States Tariff Commission announced the issuance of Volume II of its report entitled, "Trade Agreement Between the United States and the United Kingdom". This volume contains digests cn articles classified under Schedule 1 of the Tariff Act of 1930 (Chemicals, Oils, and Paints), and is the first of a series of 8 volumes in which are set forth the principal facts pertaining to the trade agreement, which will become effective on January 1, 1939. Volumes I and Volumes III to VIII inclusive, are in course of preparation and will be released as soon as they become available. Data will be assembled in accordance with the schedules of the Tariff Act. Copies of Volume II may be obtained from the United States Tariff Commission, Washington, D. C. RETAIL CAMPAIGNS MOVE FOODS, REDUCE PRICE MARGINS The effectiveness of organized retail campaigns in moving temporary surpluses of foods into consumption is brought out in a study recently completed by the Bureau of Agricultural Economics. Figures are cited on grapefruit, beef and eggs. Proper timing and the narrowing of price margins are emphasized as important considerations in the success of such campaigns. A detailed repcrt of the study is obtainable from the Bureau of Agricultural Economics, Washington, D. C. "From the general findings it should be easy to draw up a list of do's and don'ts to guide us over the winter of 1938-39. It seems that about this time of the year the volumitis bug is especially active, biting everywhere and everyone. So here goes: "DO pay attention to your present costs in relation to your present overhead, and see how you can balance them properly. If your costs are over 20 percent you are out of line (in a service store.) "DO examine each and every one of your purchases, by making sure the items that sell and carry a decent margin receive your best attention. "DO take time to examine the operations of your own store from the point of view of cleanliness, cheerfulness, convenience to your customers, line of merchandise handled, quality of goods, and service rendered to your customers. "DO make it a point to know what each service costs you in dollars and cents and in percentage of volume, so as to know where and when to reduce if necessary. "DO keep abreast of changing time and changing neighborhoods, for your customers will go where they get what THEY want, when they want it, not what you would like to sell them, when it suits your convenience best. "DO read up on merchandising aids, and take advantage of manufacturer and dealer aids to help you move the goods you have. "DO attend faithfully your association and company meetings to find out the newest and latest in merchandising ideas and suggestions; that's what these meetings are for; to help you. But you can only be helped if you are there. "And Doctor Common Sense also writes out some don'ts: "DON'T pay more attention to competition than to your own store: they may be just as anxious about you as you are about them. "DON'T let the mania for volume make you forget that what you are after are profitable sales, not just more sales. "DON'T let the volume bug make you forget that retailing is a service function: the more you do, the greater the service charges and therefore the higher your costs. It is easier to cut on expenses many times than to increase the volume of business. "DON'T get the jitters because a large volume market is opened near you or in your city: remember that more women give convenience as the chief reason for trading where they do than any other reason in the world. And finally: "DON'T overlook the fact that price is important, of course, but not all important; that large sales with no profit net you nothing but a lot of work for nothing". INSURANCE LIABILITY OF $21.7 BILLION REPORTED BY FDIC An insurance liability now increased to $21.7 billion was reported recently by the Federal Deposit Insurance Corporation on the basis of figures for September 21, 1938, submitted by 13,705 insured commercial banks. The reports, which came from banks in all parts of the United States and its possessions, revealed that since May 13, 1936, the date when similar figures were last compiled, there had been a growth in the number of bank accounts, in the amount of deposits and in the percentage of deposits eligible for insurance. Between the two dates there was an increase from 57 million to 61 million in the number of bank accounts. Total balances in these accounts on September 21, 1938, were $48 billion as compared with $45 billion on the earlier date. In the same period the percentage of deposits insured increased from 43. to 45. Of the 61 million accounts in the insured commercial banks on September 21 of this year, 98.4 percent were for amounts not exceeding $5,000, the insurance maximum of the FDIC. CONSTRUCTION ACTIVITY IN 1938 LARGEST SINCE 1930 Construction activity in the United States during 1938 will aggregate approximately $8,800,000,000, the largest total reported in any year since 1930, according to the annual estimate released today by the Bureau of Foreign and Domestic Commerce and published in the December issue of the Survey of Current Business. The total, which includes not only the estimated current expenditure during the year for new construction, but also maintenance and work-relief construction, is an increase over the revised estimates of $2,675,000,000 for 1937. The increase in 1938 was the result of a gain of $540,000,000 in public construction, which more than offset the decline in private work. The movements of the preceding year were thus reversed--in 1937 the expansion as compared with 1936 was the result of a substantial increase in private work, while public expenditures for construction projects declined. Although the increase for the year 1938 was the fifth consecutive yearly gain, total expenditures for construction in 1938 were one-fourth less than the average volume during the decade from 1920 to 1929. Detailed preliminary estimates for 1938 and estimates for earlier years are presented in the article in the Survey of Current Business which also presents post-war trends in graphic form. These estimates are the regular annual continuations of those appearing in "Construction Activity in the United States" which was issued by the Bureau of Foreign and Domestic Commerce and covered a complete discussion of the concepts, scope, sources, and limitations of the estimates, as well as detailed figures from 1915 to 1936. PURCHASING AND PROFITS By Edward T. Gushee, Vice President, The Detroit Edison Company, Detroit, Mich. Excerpt from an address delivered at the International Management Congress, Washington, 1938 Management seeks to reduce production costs. It has gone far in that purpose by developing the machinery and methods of production and increasing the productivity of labor. The greatest possibility of further progress is found in scientific purchasing, i.e., in the proper expenditure of the large percentage of the manufacturing dollar which is spent for materials. The concern which neglects that course will find it impossible to compete with organizations which apply the principles and methods of scientific purchasing. It is not the individual concern only that will profit by this application. Scientific purchasing aims not for the lowest price, but for the greatest ultimate economy in the purchase and utilization of materials. It strives to eliminate the waste which results from haphazard selection and inadequate methods of buying. Its universal application will lead to greater efficiency, greater economy, and hence, greater prosperity throughout all industry. From this broad economic aspect, as well as from the standpoint of the individual concern which imperatively needs cost reduction to extend the market for its products, scientific purchasing is a phase of management which must be studied, comprehended, and applied. To neglect it means to be outdone, in the competitive race of industry, by those progressive concerns which grasp its advantages and reap its profits. STUDY OF FARMER EXPENDITURES FINDS TELEPHONE RATES HIGHER THAN PRE-WAR Government agricultural economists make the point that farmers pay higher than pre-war prices for most of the things they buy for use in the home and in production, whereas the prices farmers receive for most of their products are below pre-war figures. It is estimated that farmers spend about $32,000,000 a year for telephone service, an average of about $4.75 for all farm families in the United States, and about $18 per family using telephone service. This estimate is based on data obtained in a comprehensive survey of consumer purchases, by the Bureau of Home Economics in 1935-36. In that year, telephone service charges amounted to somewhat less than 1 percent of the expenditures for farm family living. |