The talking machine world (Jan-Mar 1921)

166-6 THE TALKING MACHINE WORLD March 15, 1921 MACY=VICTOR CASE NEARING CLOSE (Continued from page 166a) occasion and I instructed our Mr. Spillane to call on R. H. Macy & Co., see the proper representative and ascertain the reason for price cutting on Victor records. He reported back to me that the reasons they gave were because they had on hand a stock of records, which were 'cut-outs' and which the former buyer for Macy had neglected to return when given that opportunity, and which he, the new buyer, wanted to return, but after taking the matter up at the suggestion of our representative to allow their return to the factory, he had been unsuccessful. I further instructed Mr. Spillane, after giving the matter due thought and consideration, to go back and tell Mr. Gillam, who, I believe, was the buyer at that time, that this was hurting our business; that I did not think it was necessary and that we desired to do everything possible to make it unnecessary and that, therefore, if he would stop his price-cutting we would take back the records — Mr. Spillane was authorized to tell him that we would do so and those were my instructions to Mr. Spillane. Those records were finally taken back under the instructions and with the understanding in accordance with the same. Meanwhile, later on I found, however, that the price-cutting continued. I then again instructed Mr. Spillane to go up and see Mr. Gillam, and ascertain for me why, after I had taken back those records, after I had apparently met the objections and had covered the reasons for the pricecutting, the price-cutting continued. Mr. Spillane came back and reported that Mr. Gillam said that Mr. Percy Straus and his associates had decided to continue the price-cutting; that they were surprised at the advertising effect and that they proposed to sell such records as were not easily disposed of, and to offer them at cut prices. I then told Mr. Spillane that if that was the way R. H. Macy & Co. were going to deal with us, then I believed and considered they had not treated me fairly, and that I did not desire to do any more business with them, ii they continued price-cutting, and especially in view of their treatment after I had tried to meet their objections in the manner already stated." Offers His Three Reasons Anent the conversations referred to, Mr. Blackman told of the meeting held in January, 1917, in the committee room of Interstate and Foreign Commerce Commissions in Washington, when he stated that Percy Straus, in the course of conversation explaining Alacy & Co.'s methods of doing business, said, "that it was their custom to cut prices on well-known and advertised branded articles and at the same time to sell their goods in substitution. I recall many instances which Mr. Straus quoted which influenced me materially, and I could easily refresh my recollections on those cases." In the course of the examination Mr. Black THE CABINET and ACCESSORIES COMPANY Otto Goldsmith, President 145 East 34th St. New York City We are Sole Metropolitan Distributors The CIROLA Price Now, $35.00 Special Introductory Discount to Dealers Write or Phone for Representative to call Get All Your Accessories from One Source Lundstrom Converto Cabinets Record Albums Record Delivery Envelopes Llotrolas Record-Lites Fibre Needle Cutters Tonofone Needles Phonograph Cabinets Table Cabinets, All Kinds Talking Machine Toys Brilliantone Needles Fletcher Needles Red, White & Blue Needles Polishes and Oils Eject-O-File Cabinets Repeaters and Rotometers Wall-Kane Needles Record Cleaners Dust and Moving Covers Standard Phonographc Motor Spring Safety Device All from One Source man was asked: "Now just tell us what occurred or what Percy Straus said at that time," and answered: "Percy Straus said that R. H. Macy & Co. sell the well-known advertised branded Cuticura Soap, which is sold elsewhere at 25c, for 18c. The cost is 17J4C-, and the gross profit is three-quarters of a cent or less than 5 per cent of the transaction. Whereas they sold their own brand of similar soap at 12c, which cost 7^c, a profit of 4^c, gross." The handling of other advertised branded products was also referred to. "One of the things that I was particularly interested in," said Mr. Blackman, "was his statement regarding B. V. D. underwear, because that was almost a household word. He stated that the B. V. D. underwear that was sold regularly elsewhere for 50c, they sold for 44c. The cost to them was 33 l/3c, the profit 10 2/3c, gross, or about 31 per cent, whereas Macy had an underwear of their own which he claimed was even better than B. V. D. and which they sold for 44c, and it cost Macy 30c, making a profit of 14c. against 10 2/3c. on the B. V. D., or a profit of 46 2/3 per cent." It is also stated that figures had been offered to show that 12,000 pieces of Macy underwear had been sold as compared to 600 pieces of B. V. D. underwear. Continuing, Mr. Blackman said: "I have other illustrations, but the thing that impressed me mostly was that Macy somehow seemed to have some" of their own brand always ready for the customer to take the place of the advertised brand, and my mind ran in the talking machine direction and I was looking forward to the time, if it was not then present — I think it was at that time — when Macy would be more interested in selling their own brand of talking machines or some other talking machine than that in which I was interested, and I did not believe that their advertising was to the benefit of the advertised article, that it was for the purpose of substitution and would injure my business and had injured it." Mr. Blackman told of his personal visits to the Macy store, and of his experiences with the sales service, which he declared was unsatisfactory. He also testified that the volume of Victor business handled by Macy each year had not progressed in volume to a satisfactory degree. The Effects of Macy Advertising The witness was asked if Macy's advertisements prior to April, 1917, had any or played any part in his reasons for declining to sell Macy. Mr. Blackman declared: "They had a great influence.'' Following along this line he repeated a M«acy advertising statement published on April 21, 1912, reading as follows: "When, in a moment of desperation, others cut to meet our prices we, in turn, cut again, and as often as necessary to sustain the Macy reputation for underselling." There was also offered PHONOGRAPH RECORD LABELS That will meet the requirements of the manufacturer of Records. 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