$ilONIDS KhlIYEI5

Red Streak High Speed Stcel Knives will givc you longer service without regrinding or jointing. They are made of ahock'resieting ateel.

"Tungsweld," the only Welded High Speed Stecl Knife. The cutting edge of high speed stecl ig welded to a soft steel back. Outlast thick carbon gtccl knives three to five times. Ordcr

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The orders a salesman takes today are correspondingly smaller. In fact. our orders during the last few years are only about a third of whit thev weie when f first entered business. Then, too, salesmen's salaries ire higher and so are their traveling expenses. -^Putti-ng these facts together shows why it cost us mor-e, to t-ake-a $25 order from a retaile-r in 1922 than ii did to get a $75 order from him in 7902.

With hand-to-mcuth buying in the saddle, all distribution expense has risen enormously. Plcking costs have gone up because shipments are smaller. We used to- ship altogether by freight. Now a good portion of our volume goes by motor-truck, by express, and by paicel-post. Dealers carry such small stocks that when they-are runiring low they cannot waii for a freight shipment. To meet their emergJncy deminds we have to rnaintain warehouse stocks all over the country.

A careful investigation of the situation made it clear that the only way we could beai these rising costs was to add to our line. We figured that we could sell three or four products as- cheaply as we cduld sell one. 'We saw that the single specialty is today being placed under a terrific handicap.

So we decided to take on more products. This, however, was easier said than done. We pdrceived that anything we might add vDuld have to be allied to our original product. But the market was already overcrowded with articles of this kind' Accordingly, this notion was discarded.

"Articles That Could be Sold Much More Profitably as a Family"

We then thought of originating something new, but this.did not seem to be a solution of the difficulty, as it would be years before a new product would be strong enough to relieve our selling burden-.

At-this juncture, we were approached by a fine old compa:ry, doing business in a field similar to ours but not competitive. This company explained that it had exactly the same problem we did._ It iugiested that we join forces, take over a couple of other well-estaSlished houses, with non-competing products, and that the four of us could pool our selling. They argued that it was foolish to create new products when there were already any number of famous trade-marked articles on the market that could be sold much more profitably as a family than singly.

The deal finally went through. We were not asked to submerge the identity of our business. Our company continues as a separate enterprise and is managed much as it was before the merger. The only difference is that the company is now a subsidiary of the parent organization. I am president of the subsidiary. All of our old em-

PORTLAND Oregon

Is the ideal location for that new lumber manufacturing plant of youis.

Portland is in the heart of the big timber region of the Pacific Northweet. It also hae an abundance of cheap hydro-electric power for manufacturing purposes. Good ocean and railway ehipping facilities, a mild climate and a fair supply of sLilled labor, practically allof which ig non-union.

I will be pleased to gerve you inthe location, design and congtruction of that new mill of yours.

Henry Black

C.om pI e t e B uilding Cons t r uc tion

Special Attention Given to Repair Work

383 Pittoch Block - Portland, Oregon Telcphone Broadway 806O lron \f,/orkcn, Ccncnt \f,lorLcrr, Brick Laycrr, Cerpcntcrr, Rooforr, Ptunbon, Elcctricianr, Cabinct-mahcre, Painterr end Frpcrhrngcrr; dro Rcrl Eetetc Bondr end Mortgegcr. ployees are still at their accustomed places. Our advertising co-niinues just as it has been running for 20 years. As far as the publicis conc-erned, there is no evidence that the company is now a part of a large consolidation,

The only vital change that the new arrangement has brought -about is in our selling. The selling of all constituent organizations in the merger has been assigned to a separate sales corPoration. __qur formlr salesmen now work for this corporation, but instead of selling just.our product they now sell all other products made by the four partlcrpatlng companres.

"First Year Demonstrated the Economic Value of Mergers"

The first year that this new arrahgement was in effect conclusively demonstrated the economic value of mergers. The sales corporation operated at a total distribution expense of 23/o,, which is 2l/o rnder what it cost us to sell the last year we operated -indePen- deirtly. It is expected that it will be possible to reduce this selling cost iown to 15% and perhaps lower, as the figure does not include the cost of advertising, as each subsidiary still pays for its own advertising.

Already this reduction in our selling cost has enabled us to lower the price of the product to the trade and to the consumer. The dealer makes a larger profit than he did before, and the consumer has been handed an initial saving of l5%. Other reductions will be made as we effect further economies in the business.

There you have the plain, unvarnished truth as tci why we joined the merger. There are a hundred and one reasons why business enterprists merge or are consolidated or are sold. But to my way of thinking mergeis justify themselves, from the broad social standpoint, only when they are able to give the public a better product or service or the same product or service at a lower price. Mergers that merely earn more money for their constituent organizations or that do not more than solve their own inner, selfish problems, do not justify themselves. Furthermore, I doubt very much if consolidations that do not ultimately benefit the public will continue to vindicate their existence from their own standpoint.

The public is at last demanding that something be done about the high cost of distribution. If the merger is the answer to the cry foi lowering selting costs, then the public will hail the merger and will reward it generously with its purchases. But if the merger does not reduce the cost of selling, then the public will cantinue to look for some other avenue of distribution until it finds one that does, ' The parent company in our organization is itself the outcome of a series of mergers that were effected a number of years ago. At

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