manufacturers doing a $40,000,000 business 
carry a stock on hand, outside of their raw 
materials, which are practically staple, of 
from $8.000.000 to $10.000.000?™ 
Many Causes CoNTRIBUTE TO CHANGE IN 
METHODS 
Mr. George R. James, a member of the 
Federal Reserve Board, and president of the 
William R. Moore Dry Goods Company of 
Memphis, Tennessee, has the following very 
interesting comments to make with respect 
to the present situation: 
“There have, as I see it, been many various factors 
-ontributing to the growth of the so-called ‘hand- 
to-mouth’ buying of merchandise and no satisfactory 
solution of the problem can be found without due 
consideration of them all. In addition to the things 
you mention, we have a marked difference between 
the past and present in the matter of credits; for 
instance, the shifting from credits based on ‘inven- 
tories’ to ‘receivables’ in one form or another. Then, 
too, there is the development of the ‘mail order 
houses,’ ‘department stores,” ‘chain stores’ and other 
forms of competition that have grown up, in a very 
arge degree, to take the place of the old-fashioned 
jobber” and the ‘retailer.’ The passing of the cross- 
roads country merchant has quite a bearing on this 
osroblem. 
“Still another factor that must be taken into con- 
sideration is the shifting of the population from 
farms and country to the cities, and along with it the 
change in the buying power of the average person 
due (a) to frequent distribution of funds through 
payrolls, and (b) to the almost ‘full employment 
of labor’ that has prevailed in this country for the 
past five or perhaps ten years. All through this 
‘evolution’ in merchandising the old law of ‘the sur- 
vival of the fittest’ has been at work and now the 
manufacturer and the distributor are feeling its ef- 
fects. Both are facing increasing overhead and other 
costs on one hand and diminishing profits on the 
sther. 
“Frankly, I do not know what the outcome will be. 
[ cannot say which method of distribution (because 
of the superiority of the service) will survive, but 
[ do venture the assertion that this question cannot 
oe answered until the newer methods shall have 
sassed through a rather long period of depression 
nd unemployment in this country. 
“Under existing circumstances and conditions I 
‘eel that it is wisdom on the part of the distributors 
ro pursue a ‘hand-to-mouth’ policy in buying mer- 
chandise. A quick ‘turnover’ minimizes both ex 
pense and risk and is, therefore, most com- 
mendable.” 
MaNuracTurers Must Meer CHANGED 
CONDITIONS 
THE CHAIN STORES 
Mr. B. H. StenzEL, secretary of the Mc 
Crory Stores Corporation, which has numer- 
ous stores throughout the country, states that 
although their purchases are made in as small 
1 quantity at a time as is possible in order to 
‘ncrease turnover and avoid leakage, yet nev- 
>rtheless their aggregate purchases are large, 
owing to the quantity of goods which it is 
aecessary for them to have, and because of 
‘hat fact they are warranted in securing the 
lowest market price. He feels that: 
“In this age of rapidly changing conditions, manu- 
‘acturers must adapt themselves to circumstances 
‘he same as we have to in other conditions, and it 
5 the far-seeing manufacturer who will prevail over 
sthers who may be slower in adapting their business 
0 new conditions. We do not know of any standard 
-ule by which the manufacturers of a certain article 
:ould adapt himself to the rapidly changing demand 
or to the ‘hand-to-mouth’ buying system. If we were 
n such manufacturers’ position we would endeavor 
:0 bring our organization to the highest business state 
of efficiency, watch the market closely, and endeavor 
‘0 give the utmost possible service to our clients. 
These are the general principles which should be 
ised, and it may further be stated as a positive 
ruism that the business which does not ultimately 
work for or achieve the result of giving service can- 
10t reasonably expect to prevail in the long run. It 
nust have a reason for existence other than merely 
+ selfish one or it would not fit into the present 
cheme of things.” 
Another chain store executive states that 
‘except in a very few departments, it is a 
Juestion which bothers us very little; and in 
‘hose departments to which I refer, such as 
pillinery, neckwear and ‘style’ goods, no 
sther than a ‘hand-to-mouth’ policy will do, 
‘or we realize, as does every other merchant, 
‘hat the ultimate consumer will not buy some- 
thing out of style at any price. If the *hand-to- 
mouth’ system increases the cost it cannot be 
zelped. By far the great proportion of our 
nerchandise is of the staple order so that we