134 WOMEN’S MUSLIN-UNDERWEAR INDUSTRY. 
There are a number of reasons for this. The majority of concerns 
in this industry are poorly capitalized and are not able to afford the 
expense. The lack of distinctiveness in design and the fact that gar- 
ments are easily copied by other establishments are the principal 
reasons why more lines of ladies’ muslin underwear are not adver- 
tised. 
Mail-order houses.—The business of mail-order houses is con- 
stantly increasing, and a considerable amount of women’s muslin 
underwear is handled by these concerns. It was stated by manu- 
facturers that mail-order houses buy very close and usually want 
the cheaper grades of goods. ~~ 
There is a demand in rural districts and villages for garments very 
profusely trimmed with cheap lace and ribbon, and many manufac- 
turers are turning out goods of this kind for the mail-order trade. 
The mail-order houses are in the market for left-over stock, sales- 
men’s samples, and returned goods. Among manufacturers it is 
the general opinion that retailers were not hurt much by mail-order 
houses, as the latter's customers were generally in remote parts of the 
country where merchants carry little, if any, muslin underwear in 
stock. 
The issue of Knit Goods, for September, 1914, states that Prof. 
Paul H. Neystrom, of the Univeriy of Wisconsin, had furnished to 
the Judiciary Committee of the House of Representatives much 
information 1m regard to selling costs, and quotes him as follows: 
I have made it my business during the last few years to make a collection of data, 
on the costs of doing business in the various kinds of concerns that are distributing 
goods. I have collected statements showing the costs of doing business in over a. 
thousand retail concerns, some of which are mail-order houses, but most of which are 
general stores in various towns in the States of Wisconsin, Illinois, Indiana, and 
Minnesota. The cost of doing business in wholesale concerns runs all the way from 
6 per cent to 15 per cent of the sales. The cost of doing business in retail concerns, 
depending, of course, upon the line of goods carried, runs all the way from 10 per cent 
up to 25 per cent and even to 30 per cent of the sales. Of course the percentages 
depend altogether on the kind of institution it is and the grade of its efficiency. If 
you eliminate the department stores, whose expense is somewhat higher, the average 
cost of doing business in the small stores—that is, the stores in small towns in the 
State of Wisconsin, so far as my figures indicate—is somewhere about 18 per cent. 
The cost runs from 15 per cent to 22 per cent, and I take the average to be, according 
to the figures I have collected, 18 per cent. 
The cost of doing business in the mail-order concerns, from those of which I have 
obtained the figures, runs from 16 per cent to 26 per cent and the average is 22 por 
cent of sales. William C. Thorne, vice president of Montgomery, Ward & Co., has 
testified that the cost of doing business in the mail-order houses runs from 16 to 25 per 
cent, and my figures correspond almost exactly with his. Now, if the cost of Jom 
business in the retail stores averages about 17 to 18 per cent, to that must be adde 
the cost of doing business by the wholesale concerns, and that cost, as I have stated, 
runs all the way from about 6 per cent to 15 per cent. 
In order to find the entire cost of distribution we would have to add to the cost of 
doing business in the stores the transportation items, in one case from the producer 
to the wholesaler and from the wholesaler to the retailer, and in the case of mail-order 
distribution from the producer to the mail-order house and then from the mail-order 
house to the consumer. Of course, the regular retailer charges to his expenses the 
cost of delivering the goods to the consumer—that is to say, his delivery expense is 
counted in with his cost of doing business. The figures which I have given for retail 
stores include the delivery expense. Therefore no further account need be taken of 
that. All of the figures I have given showing the cost of doing business are based on 
the sales and not on the cost of the goods. 
The cost of transportation from the producer to the mail-order house is probably 
about the same as the cost of transportation from the producer to the wholesaler. So 
far as I have been able to learn the difference is not great. To make a fair comparison 
of the costs of doing business we can start with the wholesaler in one case and the