278 



THE INDIA RUBBER WORLD 



[March 1, 1916. 



at our annual meeting this afternoon will merit the hearty 

 approval and receive the enthusiastic support of our mem- 

 bership. 



Although this is a social and not a business occasion, I 

 wish at this time to extend my appreciation for the cordial 

 support which has aided me during my term as president 

 of the Rubber Club of America. I bespeak for your new 

 president the same cooperation and consideration which you 

 have given me. 



Many of the attempts to regulate our business affairs by 

 Congress, during the past decade, have been based upon 

 theory rather than on facts. The Federal Trade Commission 

 is making a serious eflfort to secure actual facts concerning 

 business on which intelligent legislation may be based, and 

 at the same time is in position to advise the manufacturer 

 or merchant on any proposed action which might be open 

 to question. 



EDWARD X. HURI.KV ON THE FEUER.\L TR.\DE COMMISSION", 

 t'^dward X. Hurley, vice-chairman of the Federal Trade Com- 

 mission, after calling attention to the fact that the Rubber Club, 

 as a strong and active organization, had grasped the modern idea 

 of collective business effort, 

 told of ways in which tlie com- 

 mission hoped to assist Ameri- 

 can industries. Then, speaking 

 regarding the conditions in 

 manufacturing industries he 

 ^aid, in part : 



In a brief survey which we 

 made of a t>-pical manufactur- 

 ing industry, which is well and 

 favorably known and sells its 

 product "in every state in the 

 Lnion, ligures received, cover- 

 ins} the year 1914, showed that 

 27 of the larger manufacturers, 

 all shipping over $100,000 

 worth of goods a year, with an 

 aggregate capital stock of 

 Sy 000,000, bonds and other in- 

 debtedness of $3,500,000, and 

 total sales of $8,500,000, had a 

 net income of only $300,000, 

 which is three and one-third 

 per cent on the capital stock, 

 or tliree and one-half per cent 

 on the sales. This does not indicate a very profitable business. 



The most striking feature which appeared, however, was 

 the fact that these concerns, with a total nwestment of about 

 twelve and a half million dollars, and net sales of eight and 

 a half millions, charged oflE only $69,000 for depreciation 

 Furthermore, this amount was charged off by 12 of the -7 

 concerns, which represented an investment of four and a halt 

 million dollars and sales of four million dollars. The other 

 15 concerns, with an investment of eight million dollars and 

 sales of four and a half million dollars, did not charge off 

 one penny for depreciation. This example is typical of other 

 industries. Similar conditions have existed in many lines 

 for years. 



Leaving out of consideration the banking, railroad and 

 public utilities corporations, and referring only to those that 

 have to do with trade and industry, we find that there are 

 about 250,000 business corporations in the country. The 

 astonishing thing is that over 100,000 of these report no net 

 income whatever. In addition 90.000 make less than $5,000 

 a year, while only the 60,000 remaining, the more successful 

 ones, make $5,000 a year and over. 



In tabulating the data for the large and successful cor- 

 porations in the United States, comprising all the corpora- 

 tions doing a business of $100,000 a year or over, we found 

 that, out of a total of 66,000, 30,000 charged oft no deprecia- 

 tion whatever. 



How^ can the Federal Trade Commission help to improve 

 conditions? 



The Commission has no intention and no desire to use 

 compulsory methods. But it does hope to reach the desired 

 end by encouraging improvements in accounting practice, by 

 indorsing standard systems of bookkeeping and cost ac- 

 counting, and by assisting in devising standard systems, 

 either at the request of individual merchants and manufac- 

 turers or through the association that represents the industry. 



Iwto by Moffcll. 



Hox. Edw.^rd X. Hurler 



We must get down to the hard facts of business, to learn 

 precisely what they are, where the weakness and losses 

 exist, and practice the same thoroughness which character- 

 izes trade and industry in Europe. We must be improving 

 our methods of production, changing our designs to meet the 

 new conditions both at home and abroad, and always en- 

 deavoring to adopt some new method that will reduce the 

 cost of operation. We also need to standardize our products 

 and processes. 



In Germany every important industry is organized into 

 trade associations and 85 per cent, of the manufacturers 

 engaged in those industries are represented in their respective 

 trade associations. More than 600 independent associations 

 of manufacturers, producers and merchants exist in Germany 

 today and besides the entire industrial system of that coun- 

 try is honey-combed with about 5,000 subsidiary business 

 organizations. 



The war has brought to us great opportunities and equally 

 great dangers. The thought that we must keep in mind is: 

 "After the war, what?" Shall we grow and expand while 

 the growing is good, or calmly wait the time when peace in 

 Europe will be followed immediately by keen competition 

 not only in foreign markets, but in our domestic markets 

 as well? 



Let us seek better organiza- 

 tion and greater efficiency at 

 home : let us push our trade 

 abroad; let us develop our in- 

 dustry so strongly that no for- 

 eign competition can dislodge 

 it. Industrial preparedness 

 must be our watch-word. 



HENRY D. ESTABROOK ON 

 PREPAREDNESS. 



Henry D. Estabrook, of Xeu 

 York, was introduced and mailL- 

 a strong and eloquent plea for 

 preparedness, extracts from 

 which follow : 



I would rather scrap every 

 gun and warship we own, if 

 we are not going to add tn 

 them, for if we were without 

 strength to repel invasion, we 

 could at least plead the privi- 

 lege of the weak and surrender 



with discretion, and rely on the moral claim on the part of the 

 invader, but to fight half-armed and with a certainty of losing 

 would be nothing short of murder for vk-hich you and I and every 

 taxpayer in the "United States would be measurably responsible. 



We" are admitted no alternative. We must spend money 

 for defense forthwith, and lots of it. We must know we are 

 safe even from the temptation of attack. Our peace and 

 future happiness depends upon it. 



"To prepare for war," said Washington, "is one of the 

 most effective ways of preserving peace. A free people 

 should not only be armed, but disciplined.^ To that end a 

 uniform and well digested plan is requisite." 



This plan should come from our military experts. In so 

 far as their recommendations were unanimous, they should 

 be adopted without much debate, and regardless of cost, with 

 the understanding always that the sole purpose to be sub- 

 served is defense and not aggression. 



This obviously means a big navy, as big as any navy in 

 the world, with every flying, diving, amphibious auxiliary 

 that can add to it. It means ammunition to boot, ammuni- 

 tion, at least, for a year's campaign always in cold storage. 

 It means enough officers and men easily to operate the ma- 

 chinery of the government. And. inasmuch as this machinery 

 will be complicated and scientific, it means officers and men 

 of technical training and brains. Men like these can always 

 obtain lucrative employment in civil lines. The government 

 must outbid that market. 



Insurance costs money. America has more things of value 

 to insure, and more money to pay the premium than any 

 nation in the world. 



There is no better auxiliary to a navy than a merchant 

 marine, nor is there any instrumentality that adds more 

 to the riches and glory of a nation. Time was when our 

 flag covered the seven seas; when the ocean highways, 

 costing nothing for repairs, were as much ours as England's. 



L'luli-r-ji'ood &■ Undcnrood. 



Henrv D. Estabrook. 



