"^^.^ theoretical man knows why. The practical man knows ^ON^ man vihy and horn. Accountancy and Business Management A General Reference Work on BOOKKEEPING, ACCOUNTIxNG, AUDITING, COMMERCIAL LAW, BUSINESS ORGANIZATION, FACTORY ORGANIZATION, BUSINESS MANAGEMENT, BANKING, ADVERTISING, SELLING, OFFICE AND FACTORY RECORDS, COST KEEPING, SYSTEMATIZING, ETC. Prepared by a Corps oj AUDITORS, ACCOUNTANTS, ATTORNEYS, AND SPECIALISTS IN BUSINESS METHODS AND MANAGEMENT Illustrated with over Fifteen Hundred Engravin£S SEVEN VOLUMES CHICAGO AMERICAN TE(MINICAL SOCIETY r»2i i G5r6 Copyright, 1909. 1920 BT AMERICAN TECHNICAL SOCIETY Copyrighted in Great Britain AH Rigbts Reserved 5oL i ' ;■( \ \ Authors and Collaborators JAMES BRAY GRIFFITH Formerly Head, Dept. of Commoroo, Aceountancy, and nusiiioss Administration, Ampripa« Scliool of rorrospondoncc. ROBERT H. MONTGOMERY Of the Firm of Lybrand, Ross Bros. & Montgomery, Certified Public Accountants. Editor of the American Edition of Dicksee's Aiiditinc/. Formerly Lecturer on Auditing at the Evening School of Accounts and Finance of the University of Pennsylvania, and the School of Commerce, Accounts, /n| and Finance of New York T'niversity. CO '^ ARTHUR LOWES DICKINSON, F. C. A., C. P. A. Of the Firms of Jones. Caesar, Dickinson, Wilmot & Company, Certified Public Accountants, and Price, Waterhouse & Company, Chartered Accountants. V WILLIAM M. LYBRAND, C. P. A. i ^ N, Of the Firm of I.ybrand, Ross Bros. & Montgomery, Certified Public Accountants. ^ F. H. MACPHERSON, C. A., C. P. A. ^ Of the Firm of F. H. Macpherson & Co.. Certified Public Accountants. n? CHAS. A. SWEETLAND Consulting Public Accountant. Author of "I.oose-Leaf Bookkeeping," and "Anti-Confusion Business Jlethods." E. C. LANDIS Of the System Depaitment, Btn-roughs .\ddlng Machine Company. JOHN A. CHAMBERLAIN, A. B., LL. B. Of the Cleveland Bar. Lecturer on Suretyship, Western Reserve Law School. Author of "Principles of Business I^aw." ^• GLENN M. HOBBS, Ph. D. Secretary and Educational Director, American School of Correspondence. Formerly Instructor in Physics, IhiiviTslty of Chicago. American Physical Society. Member, Sigma Xi Society. Authors and Collaborators — Continued GEORGE C. RUSSELL Systemafizor. Formorly Manafior, Syptpm Dopnrtnipnt, Klliott-Fishor Company. ^- OSCAR E. PERRIGO, M. E. Specialist in Industrial Organization. Author of "Machine-Shop Economics and Systems," etc. ANDREW T. BIERKAN, LL.B., D.C.L. Instructor in the Law Department, Yale University. CHAS. E. HATHAWAY Cost Expert. Chief Accountant, Fore River Shipbuilding Co. CHAS. WILBUR LEIGH, B. S. Associate Professor of Mathematics, Armour Institute of Technology. ^» C. H. HUNTER- Formerly Advertising Manager, Elliott-Fisher Co. V CHARLES R. BARRETT, Ph. B. Publicity Editor, American School of Correspondence. Auttaor of "Getting a Good Job" and "Business English and Correspondence. H. W. QUAINTANCE, LL. B., Ph. D. Head, Accountancy and Business Administration Department, American School of Correspondence. ^« CHARLES A. MILLER, JR. Formerly Associate Editor, American Technical Society. WILLIAM SCHUTTE Manager of Advertising, National Cash Register Co. ^« WILLIAM G. NICHOLS General Manufacturing Agent for the China Mfg. Co., The Webster Mfg. Co., and the Pembroke Mills. Author of "Cost Finding" and "Cotton Mills." •»• JESSIE M. SHEPHERD, A. B. Head, Pyblication Department, American Technical Society. Authorities Consulted THE editors have freely consulted the standard technical and busi- ness literature of America and Europe in the preparation of these volumes. They desire to express their indebtedness, particularly, to the following eminent authorities, virhose well-known treatises should be in the library of everyone interested in modern business methods. Grateful acknowledgment is made also of the valuable service rendered by the many manufacturers and specialists in office and factory methods, whose cooperation has made it possible to include in these volumes suit- able illustrations of the latest equipment for office use; as well as those financial, mercantile, and manufacturing concerns who have supplied illustrations of offices, factories, shops, and buildings, typical of the com- mercial and industrial life of America. JOSEPH HARDCASTLE, C. P. A. Formerly Professor of Principles and Practice of Accounts, School of Com- merce, Accounts, and Finance, New Yorls University. Author of "Accounts of Executors and Testamentary Trustees." ^* HORACE LUCIAxX ARNOLD Specialist in Factory Organization and Accounting. Author of "The Complete Cost Keeper," and "Factory Manager and Accountant." JOHN F. J. MULHALL, P. A. Specialist in Corporation Accounts. Author of "Quasi Public Corporation Accounting and Management." SHERWIN CODY Advertising and Sales Specialist. .\uthor of "Flow to Do Business by Letter," and "Art of Writing and Speak- ing the English Language." FREDERICK TIPSON, C, P. A. Author of "Theory of Accounts." ^» AMOS K. FISKE Associate Editor of the \cw York Journal of Commerce. Author of "The Modem Bank." JOSEPH FRENCH JOHNSON Dean of the New York University School of Commerce, Accounts, and Finance. Editor, The Journal of Accountancy. Author of "Money, Exchange, and Banking." Authorities Consulted— Continued M. U. OVERLAND Of the Now York Bar. Author of '•Classitiofl Corporation Laws of All the States." */* THOMAS CONYXGTON Of the New York Bar. Author of "Corporate Management," "C- porato Organization," 'The Modern Corporation," and "Partnership Relations." ^« THEOPHILUS PARSONS, LL. D. Author of "The Laws of Business." T. E. YOUNG, B. A., F. R. A. S. Ex-President of the Institute of Actuaries. Member of the Actuary Society of .\m. ica. Author of "Insurance." ^« LAWRENCE R. DICKSEE, F. C. A. Professor of Accounting at the University of Birmingham. Author of ".Advanced .Accounting," "Auditing." "Bookkeeping for Company Secretary." ^« FRANCIS W. PIXLEY Author of ".Auditors, Their Duties and Responsibilities," and ".Vccountancy." CHARLES U. CARPENTER General Manager, The Hcrring-Hall-Marvin Safe Co. Formerly General Manager, Xational Cash Register Co. Author of "Profit Making Management." ^» C. E. KNOEPPEL Specialist in Cost Analysis and Factory Betterment. Author of "Systematic Foundry Operation and Foundry Costing," "Maximum Production through Organization and Supervision," and other papers. HARRINGTON EMERSON, MA. Consulting Engineer. Director of Organization and Betterment Work on the Santa Fe System. Originator of the Emerson Efficiency System. Author of "Efficiency as a Basis for Operation and Wages." ELMER H. BEACH Specialist in Accounting Methods. Editor, Beach's Magazine of Business. Founder of The Bookkeeper. Editor of The American Business and Accounting Encyclopedia. Authorities Consulted— Continued J. J. RAHILL, C. P. A. Member, Califonila Society of Public Accountants. Author of "Corporation Accounting and Corporation Law." FRANK BROOKER, C. P. A. Ex-Xew York State Examiner of Certified Public Accountants. Ex-Prosident, American Association of Public Accountants. Author of "American Accountants' Manual." CHARLES WALDO HASKINS, C. P. A., L. H. M. Author of "Business Education and Accountancy." JOHN J. CRAWFORD Author of "Bank Directors, Their Powers, Duties, and Liabilities." DR. F. A. CLEVELAND Of the Wharton School of Finance, University of Pennsylvania. Author of "Funds and Their Uses." CHARLES BUXTON GOING Managing Editor of The Enr/ineering Magazine. Associate in Mechanical lOngineering, Columbia University. Corresponding Member, Canadian Mining Institute. Author of "Principles of Industrial Engineering." ^• E. ST. ELMO LEWIS Advertising Manager, Burroughs Adding Machine Company. Formerly Manager of I'ublicity, National Cash Register Co. Author of "The Credit Man and His Work." "Financial Advertising," and "Getting the Most Out of Business." CLINTON E. WOODS, M.E. Specialist in Industrial Organization. Formerly Comptroller, Sears, Roebuck & Co. Author of "Organizing a Factory," "Unified Accounthig Methods," and "Woods' Reports." ^« CHARLES E. SPRAGUE, C. P. A. President of the Union Dime Savings Bank, New York. Author of "The Accountancy of Investment," "Extended Bond Tables," "Phi- losophy of Accounts," and "Problems and Studies in the .Vccountancy of Investment." WALDO P. WARREN Author of "Thoughts on Business." Authorities Consulted — Continued L. B. MOFPATT Director of Piorcp School, rhlladelphia. Author of 'Mamial of Bookkeeping and Accounting." LEON CARROLL MARSHALL Dean of the School of Commorce and Administration, University of Chicago. Author of •■Readings in Industrial Society." LEO GREENDLINGER, M. C. S. Instructor in Accountancy in School of Commerce, Accounts, and Finance, New York University. Editor of C. r. A. Quwition Department of the Journal of Accountancy. Author of "Accounting Problems." ^« HERBERT G. STOCKWELL Author of "Essential Elements of Business Character," and "Xet Worth and the Balance Sheet." ^« HUGO DIEMER, M. E. Professor of Industrial Engineering, Pennsylvania State College. Author of "Factory Organization and Control." \» HARRY M. ROWE, Ph.D. Author of "Commercial and Industrial Bookkeeping," "Business and OflSce Practice," "Business Bookkeeping and Practice," and "Bookkeeping and Accounting." ^* ROY B. KESTER, C. P. A. Instructor, School of Commerce, Columbia University. Author of "Accounting Theory and Practice," and "Elements of Accounting." ^• PAUL J. ESQUERRE Author of "Applied Theory of Accounts," and "Problems Involving the Appli- cation of the Theory of Accounts." EDWARD P. MOXEY, JR., A. M., Ph. D., C. P. A. Professor of Accounting, University of Pennsylvania. Author of "Accounting Systems," and "Principles of Factory Cost Keeping." WALTER D. SCOTT, Ph.D. Formerly Professor of Psychology, Northwestern University. Author of "Influencing Men in Business," "Increasing Human Efficiency In Business," and "The Psychology of Advertising." ^* W. R. BASSETT Author of "When the Workman Helps," and "Accounting as an Aid to Busi- ness Profits." Authorities Consulted— Continued FRED A. KRAFFT, C. E. Assistant Director, Labor Department, Alfred Decker & Cohn, Chicago. Formerly Head Employment and Safety Engineering, American School of Correspondence, Chicago. .Vuthor of "Sources of Labor," "Safeguarding Selection," and "Systems and Policies." (See "Employment Management and Safety Engineering," American School of Correspondence. ) DUDLEY R. KENNEDY, LL. B. Counselor in Labor Employment and Industrial Relations Problems, Philadel- phia. .\uthor of "Labor Turnover," "Organization of Department," and "Employ- ment Management." (See "Employment Management and Safety Engineering," American School of Correspondence. ) WALTER D. STEARNS, E. E. Secretary, Occupation and Rates Committee, Westinghouse Electric & Manu- facturing Co., East Pittsburgh, Pa. In Charge Development Work in Shop, Westinghouse Electric and Manufac- turing Co. Author of "Job .Analysis." (See "Employment Management and Safety Engineering," American School of Correspondence. ) ^» ARTHUR H. YOUNG Manager Industrial Relations, International Harvester Company, Chicago. .Author of "The Employment Field." ( See "Employment Management and Safety Engineering," American School of Correspondence.) ^• GEORGE A. Mcdonald, B. S. in Economics, and IRVING D. ROSSHEIM, B. S. in Economics, LL. D. Instructors in Wharton School of Finance and Commerce, University of Penn- sylvania. Authors of ".V First Year in Bookkeeping and .Vccounting." ^• CHARLES MCK. VAN CLEVE Author of "Principles of Double-Entry Bookkeeping." ^* CLARENCE M. DAY Author of "Accounting Practice." HENRY R. HATFIELD Dean of the College of Commerce, University of California. .\uthor of "Modem Accounting." ^« C. E. LADD Author of "Farm Bulletin No. 572," United States Dept. of Agriculture. Authorities Consulted— Continued JOHN W. SCHULZE Author of ''rhf Amorican OfTico," nnd "Accounting Practice." ST. CLAIR V. Mckenzie Author of "The Modem r.-ilancc Sheet." JOHN F. FOWLER .\nthor of "Export Houses." GEORGE LISLE Author of ".\ccounting in Theory nnd Prnctice," and "Account Keeping In I'rinciple and Practice." Editor of "Encyclopedia of Accounting." STIRLING H. BUNNELL, Ph. B., M. E. .\uthor of "Cost Keeping for Manufacturing Plants." ^• ROGER N. CARTER .\uthor of ".\dvanced .\ccounting." LIONEL C. CROPPER .Author of "P.ookkeeping and .Vccounting." ERNEST W. HUFFCUT Dean of the Cornell University College of Law. .\uthor of "The Elements of Bu.siness Law." HARRY C. BENTLEY, C. P. A. Fellow of the American -Association of Public Accountants. Author of "The Science of .\ccounts," and "Corporate Finance and .Account- ing." ^» D. A. KEISTER .Author of "Corporation .Accounting and .Vuditing." A. HAMILTON CHURCH .Author of "The Proper Distrilmtion of Expense Burden." V FRANK E. WEBNER. C. P. A. Author of "Factory Costs." Fore^word WITH the unprecedented increase in our commer- cial activities lias come a demand for better business methods. Methods which were adequate for the business of a less active commercial era have given way to more elaborate sj'stems and countless labor-saving ideas in keeping with the financial and industrial progress of the world. C Out of this progress has risen a new literature — the literature of business. But with the rapid advancement in the science of business its literature can scarcely be said to have kept pace, at least, not to the same extent as in other sciences and professions. Much excellent material dealing with special phases of business activity has been prepared, but this is so scattered that the student desiring to acquire a comprehensive business library has found himself con- fronted by serious difficulties. He has been obliged, to a great extent, to make his selections blindly, resulting in many duplications of material without securing needed in- formation on important phases of the subject, except at tho sacrifice of much time and patience. C In the belief that a demand exists for a library which shall embrace the best practice in all branches of business — from buying to selling, from simple bookkeeping to the administration of the financial affairs of a great corpora- tion — these volumes have been prepared. Prepared pri- marily for home study, the authors have striven for sim- plicity and directness of style and have used a large num- ber of practical problems to further illuminate the text. In addition to the purely accounting and management phases, the newly developed subject of Income Tax has received adequate treatment. ^ Pltlitors and writers have been selected because of their familiarity with, and experience in handling various sub- jects pertaining to Commerce, Accountancy, and Business Administration. Writers with practical business experience have received preference over those with theoretical train- ing; practicability has been considered of greater impor- tance than literary excellence. C These volumes are offered with the confident expectation that they will prove of great value to the trained man who desires to become conversant with phases of business prac- tice with which he is unfamiliar, and to those holding advanced clerical and managerial positions. Table of Contents VOLUME I Business Organization and Control . By James B. Griffith^ Page •!! Factors Influencing Production — Co-operation — Executive Organization — Charting Organization — Organization of Business — Organization of Mer- cantile Business — Universal Application of Organization Principles — De- partmental Authorities — General Manager — Comptroller — Sales Division — Superintendent — Purchasing Agent — Employment Department — Duties De- fined — Charting Salary and Wage Distribution — Expense Distribution Chart — Arrangement of Plant — Factory Plans — OfRce Plans — Committee System — Suggestion Plan — Order Blanks Factory Organization and Control . By Oscar E. Perrigo Page 69 Methods of Modern Manufacturing — Organization of Manufacturing Plant — Official Communications — Successful Management — Shop Methods and Records — Employment of Workmen — Time Keeping — Time Cards — Paying Employes — Production Orders — Plant Orders — Storing and Issuing Stock and Materials Advertising and Sales Organization . By James B. Griffith Page 127 Systems and Records — Designs and Cuts — Cut Indexes and Tracers — Rec- ords of Printing — Periodical Advertising — Rate Cards — Advertising Con- tracts — Checking Returns — Street Car and Outdoor Advertising — Sales De- partment — Branches — Mail-Order Branch — Follow-Up Systems — Personal Salesmanship Division — Routing Salesmen — Follow-Up of Dealers and Salesmen — Sales Records Credits and Collections . . By James B. Griffith Page 191 Credit Man — Information Required — Financial Statements — Analysis of Statements — Sources of Information — Local Correspondents — Traveling Salesmen — Credit Agencies — Recording Credit Information — Branch House Credits — Collections — Duplicate Invoices — Monthly Statements — Install- 1 ment Collections — Mail-Order Collections — Collections by Attorneys Billing and Order Recording . By George C. Russell Page 245 European Methods — Machines for Manifolding — Development of Billing Machines — Loose-Leaf Sales Sheets and Invoices — Condensed Billing — Duplicate Invoices — Traffic Department Records — Analysis of Quantities and Amounts — Unit Billing — Back Orders — Split Orders — Loose-Lcaf Sheets — Binders — Designing Stationery — Styles of Type — Carbon Paper — Blinds — How to Handle Orders on Billing Machine — Invoices in Blanket Form — General Remarks — Tabulators — Computing Machines in Billing — Colored Sheet System — Compound Forms — Retail Dry Goods Billing — De- vices of the Future Shipping Department . . . By James B. Griffith Page 313 Shipping Clerk — Class Rates — Commodity Rates — Freight Tariffs — Con- densed Rate File — Routing Shipments — Filling Orders — Checking Ship- ments — Export Shipping — Freight Claims — Express Shipments — Retail Delivery System Index Page 361 •For page numbers, sco foot of pages. tFor professional standing of authors, see list of Authors and Collabo- rators at front of volume. BUSINESS ORGANIZATION AND CONTROL FACTORS INFLUENCING PRODUCTION 1. Statement of Problems. By the term business we under- stand any line of activity in which one busies himself or to which one devotes himself. By the terms business organization and control we understand that organization and that control which makes the business efficient for the purposes of its existence, whether for work or play; for profit; or for mere satisfaction of having the thing done right. In this article we shall confine ourselves to a consideration of the personnel of commercial and industrial establishments, more particularly the relation between employers and employes. What- ever the business — ^whether large or small, and whether meeting a demand for necessaries of life or catering to the whims and follies of the social set — ^any business, if it is to be successful and perma- nent, must do two things: it must meet the changing demands of its patrons by changes in the style or character of its output; and it must be above the average in economical use of the factors of production. Land, Labor, and Capital. The factors of production are commonly said to be land, labor, and capital. If by land, we mean no more than a place on which to stand, that is, room and oppor- tunity; and, by capital, a certain control over the land, material, and instruments of production, the analysis may be fairly accept- able. But labor is the factor, which standing in its room and place and using the instruments which capital supplies, fashions, and combines and transports the materials in such ways as yield form and time and place utilities — the real wealth of the world. 2. Management vs. Administration. The problem of efficient production resolves itself, therefore, other things being equal, into the question of how to get the most from labor. Two antagonistic 11 2 ORGANIZATION theories are at once presented — management and administration. By the former, the laborer is the tool, or instrument — an addi- tional hand only — of the capitalist. Under such a regime, as experience proves, the capitalist tends more and more, as his enterprise prospers, to become not only more independent but also more aloof and arrogant and exacting, until, not infrequently, he looks upon the workers as inferiors with only such rights as he deems fit to allow. By the latter, the laborer is a fellow worker investing his capital — strength and skill — in like manner and for the same purpose as the employer invests his capital — money and time — with a view to bettering his position through the acquisi- tion of an increased fund of enjoyable utilities. It is slave driver and slaves versus leader and co-worker. Which combination ^vill get the most from labor? Which is the real business method of organization and control? Results of Slave-Driving Methods. There are still many employ- ers of men who take advantage of time study and other scientific management methods to increase production without increasing wages. These men would gladly apply the old slave-driving methods without limit if there were no laws designed to protect employes against oppression and misrule. Such men have no concern for the welfare of their employes, but only for the economic advantage to be gained from their labor. Their point of view, however, is one sided, and, in the long run, is destructive of their purpose. Taking an attitude of superiority toward their employes, such employers get little consideration in return; and each party beats the other at every opportunity. Mutual distrust prevails; the workmen cannot do their best; and the labor turnover is necessarily high. Employes who might be efficient and reliable workers, are in constant fear of dismissal, and employers are in constant fear of strikes. Under such conditions efficiency in production is impossible. Taking industry as a whole — good and bad methods of control lumped together — the output of the average worker at the present time, according to good authority, "is not one-third of what it should be and can be without any increased tax on the body or brain of the operative."* And William R. Bassett, in his recent book, "When the Workman Helps," maintains that the driving method does not develop above * Going: "Industrial Engineering," page 45. 12 ORGANIZATION 3 fifty per cent of the worker's capacity. The product is also inferior in quaUty. Employes suffer loss of wages. Employers suffer loss of profit. Society suffers loss of consumable goods, and, because of the restricted production, pays an unnecessarily high price for the goods which it does secure. Measure of Wages. A new order is demanded. Society, the State, has a right to require and ultimately will require that wasteful and disturbing methods shall be abandoned, and that the interests of society as a whole, shall not be subject to either the interest or the will of a few. "The first step in any wage consideration, and the first step toward the new idea in business, is to get the real value on wages. We all know that cheap labor is not cheap; paid cotton pickers have proved cheaper than slaves — although it took a long time so to convince the South, because it never reckoned the expense of idle slaves. In any operation in which the material costs are high as compared with the labor costs, the highest possible pay is the cheapest, if it results in a saving of material, or in a finer product, or in both. In the grades of production where labor is the big factor, then high wages are economical if the wastes of human power can be cut to a minimum. Wages are measured solely in terms of production." Mutual Profit in Trade. '^Reason and common sense are grow- ing more powerful year by year, and the more enlightened common sense becomes, the more it will see that we must let those with whom we deal prosper, if we are to prosper ourselves." The same idea underlies the common saying that if one is to maintain a successful business of any sort, he must give his customers "their money's worth." One successful manufacturer even goes so far as to decline to sell his products, except to those who are in posi- tion to use those products with profit,* thus recognizing the prin- ciple that to oversell a customer is to make him a dissatisfied customer, and, therefore, to lose him. Painfully, but no less cer- tainly, the commercial world has come to a recognition of the truth that real prosperity is a product of mutual advantage. "Progressive sellers make it their business to see that their buyers make money out of what they buy — they try to make certain * Schulzc: "American OfBce," page 114. 13 4 ORGANIZATION that tliere will be a mutuality of benefit, even if there cannot be a mutuality of interest. " JJ'agcs Measured hy Production. "Wage methods have not caught up with merchandising, and they will not until the old ideas of master and servant are abandoned, and business is con- sidered as democratic, mutual enterprise."* As the success of a trading business depends upon giving money's worth, so the success of any business, from the standpoint of its dealings with labor, depends upon "making their work pleasant and profitable to them." Employer and Employe Both Seek Gain. There is no good reason why the man who offers service for sale should not enjoy at least as much favor from, and be as much under the protec- tion of, the State as the man w^ho offers goods for sale. Yet nothing is more apparent than that most of the laws are made and administered with an eye, first of all, to the interest of the capitalist class. Measiu'es directly in behalf of the workmen are adopted, not from a sense of justice and right, but rather from a recognition of the fact that the demands of the workmen can no longer be ignored. No worth while workman wishes to con- tinue always a workman of the same class. The workman is a human being and like every other normal man, desires to improve his condition. His business is no more an end in itself than is that of the man who employs him. It is "a means to an end — a means for making a livelihood, a field of wholesome activity and a school for the development of character and mental vigor." Misled rather than helped by the lavish display of wealth and veneer of culture and refinement on the part of those who could and should set him a good example, he frequently goes wrong and "spends his money for that w^hich is not bread, and his labor for that which satisfieth not." But his purpose is right; and^ even under existing unjust conditions, he is showing a greater capacity to rise than his employers show to keep from falhng. Nor are laborers, even of the lowest classes, opposed to the accu- mulation of wealth. Nothing is more deeply rooted in their own disposition than a desire to enjoy such accumulations for them- selves, and if they sometimes seek to reduce all to their own ♦Basaett in "When the Workman Helps," page 57. 14 ORGANIZATION 5 level, it is but the natural reaction, from a sense of injustice in being deprived of their rightful share in the products of industry. Need for Free Market. The seller of goods and the seller of service have each a right to the benefits of a free market; but there can be no free market where the State favors one class more than the other or where fraud, or misrepresentation, or the taking of undue advantage prevail. Herein lies the gist of the labor problem — the nut which society must crack. The man, who, through faith in the representations of a dealer, buys worthless mining stock as gilt-edged security, cut glass for diamonds, or a cotton for an all-wool suit, is no more defrauded than is the man who accepts employment in a factory or mine at a stipulated wage rate, and then, as soon as he has attained some degree of skill in his work and is able to earn a competence at that particular employment, and, by consequence, is correspondingly unfitted to undertake a different line of work, has his wage rate cut, because, as the employer too often puts it, "he is earning too much money." Again, he may be set to work in a dangerous occupation without adequate preparatory instruction. And the man who lures another into a place of danger, and then exacts an exorbitant sum as the price of saving his life, is no more guiky of undue influence than the capitalist who deliberately misleads workmen touching the market demands for labor and withholds productive operations until the workmen, having exhausted their small store of accumu- lated wealth, are ready to accept a starvation rate. Effects of Improved Machinery. The installing of improved machinery is almost invariably in more or less expectation that thereby labor may be dispensed with, or, at least, that, by means of the machine, cheap labor may be substituted for the more expensive labor. And time and motion studies hardly look beyond increasing the effectiveness of labor, and thereby enabling the employer to pay higher wages; but, as in the case of a protective tariff, which enables the manufacturer to pay higher wages, they make no provision that the higher wages shall be paid. The logical result is that the lion's share of the benefit goes into the pockets of the employer class. Flat Wage Rate. The average workman prefers to do his best at any employment, and would do so if he could be satisfied that 15 6 ORGANIZATION his doin^ so would not be made an occasion for cutting his wage rate or of putting him in some otlier way under a handicap in his elt'orts to better his condition. Nor is he predisposed toward a flat rate for all employes in a given occupation, regardless of work done. The flat rate is not a product of unionism, but the means by which employers have called unionism into existence. Either because of inability to determine the individual worth of workers, or because of indifl'erence in their respective rights, employers have chosen to buy labor in the mass according to an estimate of the worth of the average workman. They have declined to do justice as between the individual employes and trade unionism, for under the flat rate which workmen have been therefore obliged to accept or fail of employment, the only chance which the efiicient workman has of securing an increase in his own wage, is by inducing his fellow workmen to unite in demands for an increase to all. "All too tardily employers are coming to recognize that a laborer is a "human being" and that it is money out of pocket to consider labor as a collection of individuals w^ho can be hired and fired, jumbled together, or otherwise treated much the same as low-grade, non-perishable merchandise." Laborers Are Citizens. Not only is the laborer a human being with a human being's hopes and aspirations, but, usually at any rate, he is a citizen of the country in which he lives and works — a member of the same social organization to which the employer belongs — and both morally and legally entitled to rec- ognition as such. He resents, alike, disdain and fraternalism. He does not want to have his affairs ordered for him; that is a sacrifice of independence, and the result is harmful no matter how good an employer's intentions may be. There should be no con- fusion of charity and business, and there need be none. "If we take medical inspection and clean, safe shops as simply good business, both from the standpoint of compensation laws and of production, they are welcomed by the men. Increased educa- tional facilities and the like are also welcomed, although it is an open question whether, except for special training, efforts in this direction are not better made with the whole community, rather than the company, in view. But the 'taking an interest' kind of welfare, the welfare work that presupposes that the laboring 16 ORGANIZATION 7 man is a fallen animal and should be uplifted, is everywhere pro- ductive of more harm than good."* CO-OPERATION 3. Laborers and Capitalists Are Associates. Labor and mate- rial are the two factors of production with which the employer has immediately to do. They are not alike, neither can they be treated successfully as if they were alike. Labor is not a factor of production in the sense that it enters into and forms a part of the finished product as flour, yeast, water, salt, form bread, but is only the force which combines, moves, and assembles materials as may be desired; and the workman is as truly a patron of the producing establishment and should have the same interest in its success as the man who buys its finished product. He is in no sense a partner in the business. His interest is rather that of a farmer in the mill which buys his wheat, or the packing house which buys his hogs and cattle. He knows that his prosperity depends upon the prosperity of his employer, and employers should know, and not only should, but under penalty of losing all their holdings, must recognize that their own prosperity depends upon the prosperity of the laborer, and not upon his degration. Limits of Management. The manager of an establishment requiring labor and materials may determine what commodity shall be produced and in wh9,t quantity, and may determine the number and character of workmen to be employed in that behalf, but here, with respect to the workmen, his functions as manager must largely cease, for workmen are not machines, however near they may be trained to act like machines, and they decline to be slaves. In his subsequent relations with them, another type of executive ability is called for. As the management has learned to defer to the wants of those who take its finished products, so it must learn to defer to the wants of those who make those products. This is adminis- tration — literally a ministering to — and not management, which orders and directs and leaves no choice but to obey. As Bassett says, "It is in serving the worker and the public that capital finds its greatest amd most enduring profits." Again, "and it is becom- ing more and more apparent that the owner must prove that he ♦ Bassett in "When the Workmen Help." 17 8 ORGANIZATION has a right to ownership by demonstrating that men working with him are better off than in individual enterprise." Service Is Real Ba.sw of Profits. The t^mployer must learn to serve his employes as he serves his other patrons. This service is not rendered by paying the lowest possible wage and, when the employe rebels because of the injustice, degrading him in his own estimation by the bestowal of gifts, either in the form of bonuses or of so-called share of profits, but by paying him in a straight- forward and manly way the earnings which are his. The giving of a bonus or the raising of wages after a strike is begun, is indis- putable proof that the workmen have not been paid what they earned. "Strikes never raise wages," but they do sometimes seciu'e for the workmen what rightfully belonged to them and what should have been given them before the strike was called. "It is only the inefficient manufacturer who bewails the size of his pa\Toll. The efficient employer should pray for wages so high that his less efficient competitor will go out of business." "When a man works for himself, the only limit to his remuner- ation is his ability." The wage earner is working for himself, and the only limit to his rightful remuneration is his earnings. No man is competent to set a limit to wages until he has demonstrated his ability to determine the productive capacity of the workman. "Wages are high if they do not return value; they are low, regard- less of their total expression in dollars, if they do return value." Workmen must be paid wages more in proportion to their contribution to product and they must be accorded recognition as members of the social organization for industrial purposes; they must have "more opportunity for self expression and a wider scope for creative energy — in short, greater comfort and cultural advantages." And not this only, but they must be given every opportunity for knowing and must be assisted to know, especially, that the wages paid them constitute a fair division of the produce of the industrial enterprise. Industrial Undertakings not Private Business. Mr. W. L. George, a radical labor agitator, is right when he says: "It is no use settling strikes by tricking us .... Our increases must come off profit." The labor element will not always submit to being tricked and every move of that sort only delays the final 18 ORGANIZATION 9 reckoning. Anyone who undertakes deliberately to fool a normally intelligent class of workers, in the long run, fools no one but himself. Increases in wages "must^come off profit." This is not saying that increases must come out of the earnings of capital alone, but out of the earnings of industry as a whole. The workmen want their share. That share can be determined only from an intelligent consideration of the amount of profit and a full understanding of the conditions under which it is acquired. Abundant instances show that, even with being constantly in close touch with the activities of their particular establishments and assisted by expert help, employers frequently do not know the profits — do not know whether they are producing profits or losses. How, then, shall the workmen know unless they have at least an equal opportunity? But shall the workmen have access to "the books" and permis- sion to know the inner workings of the business? Certainly. It was so in the days before the era of machine industry and was good alike for the employer and for the employe. Their interests have not changed, but the means of intercommunication have been clogged and prejudices and antipathies, born of ignorance of each others rights and needs, have been developed. Let the workmen have their representatives on the boards of directors and subordinate governing bodies and let them, through agents of their own choosing, investigate and learn the true condition of the business in which they are the associates of their employers. And in proportion as this is done, the workers will acquire both an active and a real interest in the business and the danger of strikes will disappear. This is not opening one's private affairs to the scrutiny of unfriendly eyes. The capital which one devotes to business enterprise and for the handling of which he solicits the co-operation of any group of workers is no longer a private but, as to those associates at any rate, becomes a matter of public concern. This method of treating labor troubles is as superior to investigations by committees of arbitration after a strike or lockout has begun as the cleaning up of mosquito-breeding swamps is to the doctoring of yellow-fever patients and for the same reason, namely, because it checks the difficulty at its source. 4. Looking Ahead. Reasons for Losses. But we have been assuming all the way that industrial operations always yield a 19 10 ORGANIZATION profit. This is by no*"means true, and even when true, it does not follow that the workman is entitled to an increased wage, for the unusual profit may be "due solely to exceptional managerial skill," in which case, "it is capital and not labor that is entitled to the reward." Again, "the worker may, by his lack of diligence, produce an article the cost of which is so high that it cannot well be sold at a profit." Or, "on the other hand, the worker may deliver to capital a good article at a fair price and then capital may, by stupidity of management, forfeit the profit." Or, yet again the productive scheme may be so poorly planned, or so incompetently managed; or the article produced be so little in demand that marketing at a profit is impossible. But such possi- bilities, far from doing away with the need for full understanding between the employer and his employes, only accentuate its necessity. Measure of Highest Efficiency. Every workman has, at any time, a certain capacity for productive work. That capacity can be increased by education and training; made stagnant by con- tinued application to routine work; or utterly dissipated through idleness or profitless enterprise. For every workman, too, there is a rate of work and day's length which yields the maximum return. A lower rate, or shorter day fails to get the best return for that day; a higher rate or longer day leads to damaged pro- duct and consequent loss. And what is true in this respect for one day's work, is true also for a week, a month, a year, and for the span of life; and the length of day and rate of work which will get the most from labor varies with the productive period, the term of employment, and the character of work to be done. One may conceivably do good work in some line, through twenty- four consecutive hours; but, it must be self evident that he can- not keep this up. For like reason, the most effective working day of the man occupied in close mental application is likely to be shorter than that of one working with his hands. The laws of efficiency and economy and justice alike require that the condi- tions under which men work shall be conducive of the greatest effort without harm to the worker; that every worker shall do the best he can without encroaching upon his capacity for work; and that each worker shall be paid according to results produced. 20 ORGANIZATION 11 The tenant who takes a farm for one year only, has no interest in its productiveness for another year, and, therefore, too often encroaches upon its productive capacity — in legal parlance, com- mits waste, -l It is paying interest out of principal. In like manner employers, ' hiring men for short periods only, regardless of the future like one-year tenants, not infrequently encroach upon the productive capacity of their workmen — commit waste — and thus despoil both the , worker and the State. This is especially true in the case of women and children employes, and the resulting economic loss to the State is many times in excess of the immedi- ate profit to the employer.**^ Every person has a natural right and duty to make the most of himself which his capacities will allow, and it is both the right and the duty of the State to provide pro- tection against the stunting or destruction of that capacity — in other words, to prevent waste. If we would become a really prosperous people, we must become an efficient people. To this end, two things are especially needful: organization, which affords opportunity for co-operative effort and consequent differentiation of function together with high development of skill and education in special lines; and effective administration, which so deals with employes as to get the most and best from labor — considered, not from the narrow viewpoint of an employer's interest for a day or other short period, but from the viewpoint of society and the workman's own best interest for his life period. Higher Ideals. "A man's mind has two channels, one through which flows thoughts connected with the daily routine of living and attending to ordinary affairs of life and business. In the other and higher channel are thoughts concerning the possibility of greater usefulness and larger opportunities." This double- mindedness is common alike to the employer and to the employe, and before either can work to best advantage in the more routine matters, some measure of opportunity must be afforded for the realization of the hopes and aspirations aroused by the higher thinking. This clearly means prosperity for the employes no less than for the employers. Their real interests are reciprocal and neither can permanently prosper at the expense of the other. "The broad-minded business man can see that a greater amnunt of profit can be derived from intelligently directed and interested 21 12 ORGANIZATION human machines, than can be derived from any system in which a group of human beings is considered merely as a mass. "The idea of practical economy makes it necessary that there should be no waste in the act of any employes. The greatest possible amount of service should be obtained from the laborer. By putting him in a position wherein he can measure the value of his interested service in definite terms of money, he will not only create a larger wage for himself, but he will at the same time work a corresponding increase in the revenue to the manufacturer. This is not merely theoretical sociology; it is practical business economy. "Believe me, these essentials of business character are pos- sessed by li\ing men who have demonstrated that they are work- able, practical principles."* EXECUTIVE ORGANIZATION 5. Differentiation of Functions. In the following pages, we present analyses of typical business estabhshments, showing the commonly recognized relationship between the different classes of workers for purposes of management and administrative control — it is the executive organization. The larger establishments are chosen not because the functions and control indicated are peculiar to large establishments, but because it is only in the larger estab- lishments that the several functions are fully differentiated and clearly discernible. Being thus separately set out, the character- istic features can be more readily recognized and studied and their usefulness determined. It should be comparatively easy, there- after, to discover these features in the smaller establishments with which the student, presumably, is more acquainted and to learn to introduce and to use them as occasion may require. But it must be remembered, always, that an organization is static while administration which is carried on through it, ' is dynamic and ever changing. Administration is a matter of intellect, and intellect, though it may sometimes be dormant, is never static for even when dormant it is moving relatively backward and los- ing its hold on the things that are worth while. It is the business of the executive officer of any establishment, or of any depart- *.Stockwell: "Essential Elements of Business Character," page 76. 22 ORGANIZATION 13 ment of it, to learn the requirements of the various positions to which workers must be assigned; to find the workers best fitted to perform the duties of such positions; and to keep them loillingly at the top notch of endeavor.* General Characteristics. To reduce the subject to concrete form, the important objects of business organization may be defined as follows: (A) To unite the individuals who are to conduct an enterprise into a body which will work systematically to a common end. (B) To bring together or group the component parts of the body with respect to their specific relations and duties. (C) To elect officers and appoint committees and authorities with clearly defined duties and responsibilities. These definitions all lead to a common center, that is, co-opera- tion. Without co-operation the success of any organization is very questionable, if not impossible. With it — a body of men all working together for a common end — almost any apparent obstacle will be surmounted. No matter how large an organization may be, how many or wide its ramifications, if the spirit of co-operation prevaUs, this same spirit will have such an effect upon the work of the execu- tive, sales, and production department, that it will move as one irresistible body. And, regardless of the size or nature of a business enterprise, the organization, as here used, resolves itself into certain easily distin- guished components, as follows: First: The owners, represented in a corporation by the stockholders or investing public; in a partnership, by the partners; in an individual business, by the proprietor. Second: The executive or managerial division. Third: The commercial or active business division. Fourth: The manufacturing or productive division. These components lend themselves naturally to certain specific subdivisions; depending, of course, upon the size of the organization; natural groups are formed to insure efficient management; certain authorities are delegated to effect economical operation and pro- duction. The stockholders (owners) first elect from among their number, a board of directors. This is the initial step toward perfecting a business organization. The directors represent the stockholders, * Stockwell: "EsHcntial Elements of Business Character," page 14. 23 14 ORGANIZATION and the Interest of the stockholder, as such, becomes that of an in- vestor only. His interest in the operation of the business is to be looked after by the directors, whom he, or a majority, has elected. From this board of directors is built the framework of the execu- tive or managerial division. The first act of the directors is to meet and elect the usual executive oiBBcers: President, Vice-President^ Secretary, and Treasurer. In modern organizations, it is customary to also elect or appoint an executive committee or hoard of managers. This committee consists of three or more members, usually selected from the officers, to which may be added one or more direc- tors who are not officers. To this committee, the board of directors delegates its authority in the actual conduct of the business. This plan of electing an exec- utive committee is particularly desirable when the board is a large one, as it concentrates authority and results in more prompt action on matters demanding immediate attention. A large body is un- wieldy, a quorum cannot always be brought together on short notice, but a working majority of a small committee can be convened promptly. The executive committee takes charge of both the commercial and manufacturing divisions. To still further concentrate authority, it is customary to appoint a General Manager who has direct super- vision over the Immediate operation of both commercial and manu- facturing divisions. He is appointed sometimes by the executive committee, but more often by the board of directors. The general manager, while occupying a position of chief acting executive, acts with the executive committee and is directly responsible to the board of directors. The commercial division of a business naturally sub-divides into two sections: Accounting, and Advertising and Sales. The first thought of the student might be that accounting is given a position of too great importance, but in the sense here used it means the records of the business of every nature, the accounts, the gathering and record- ing of statistics and information of every character. The manufacturing division di\'ides into Purchasing and Stores, and Production. In a measure, the purchasing of goods is a function of the commercial division, but the purchasing of raw material and sup- plies is properly under the supervision of the manufacturing division. 24 ORGANIZATION 15 CHARTING THE ORGANIZATION 6. What may be termed the anatomy of an industrial body, is most graphically shown by means of charts. Free use of charts will be made throughout these papers. With properly designed charts the logical divisions of authority or expense can be clearly shown. Fig. 1 furnishes a graphic illustration of the principal components of the organization under discussion. In the first group we find the owners (stockholders) whose line of communication with the business is through the board of directors. Subordinate to the board of direc- tors are its own executive officers, the executive committee, and general manager. The connecting lines show the executive committee to be in direct communication with the board of directors, while the general manager is in direct communication with both the executive com- mittee and the board of directors. Under the general manager are the commercial and manufac- turing divisions, over both of which he has direct supervision. 7. Working Authorities in Large Enterprises. The next logical step in the development of our organization is a study of the working authorities and responsibilities of the different officers and their assistants. We have seen that the administrative authority is for practical purposes centered in the general manager. It is not to be supposed, however, that in a large industrial organization he will personally supervise all of the details of operation of the commercial and manufacturing divisions. His time must not be taken up with details which can be as well handled by subordinates. He should be free to devote his time to questions of policy, the providing of finances, the consideration of new fields of endeavor, and the making of the more important contracts. His immediate assistants will be a Comptroller and a Superintendent. The comptroller fills a position identical with that of a business manager or an assistant manager. His duties are mainly in connec- tion with the commercial division. It is his business to devise sys- tems of accounts and systems for recording the activities of every department, and have reports compiled, in proper form for presenta- tion to the general manager. His is a statistical department, filling a place between the general manager and the subordinate depart- 25 Fig. 1. Chart of a Corporate Manufacturing Enterprise 26 ORGANIZATION 17 merits, and, while not closing the avenues of communication between these departments and the general manager, it is here that reports and records of results are concentrated. The superintendent is in immediate charge of manufacturing operations and is responsible for the custody of all property used in manufacturing. His position does not close the avenue of communi- cation between factory departments and the general manager. Fig. 2 illustrates the subdivisions of the commercial and manu- facturing branches. This chart does not go back of the administra- tive section of the organization, as the stockholders have no direct connection with the actual operation of the business. We find the subdivisions of the commercial branch in charge of the following: Chief Accountant, with direct supervision over all bookkeeping and accounting records; Chief Stenographer, in charge of all stenographic and circularizing work; Advertising and Sales Managers, in charge of publicity and selling campaigns; Credit man, in charge of credits and collections. The manufacturing department includes the Purchasing Agent, who purchases all manufacturing stores, materials, and supplies; Chief Stores clerk, in charge of the storage "of all materials and sup- plies; Chief Engineer, who designs new products, new machinery for the manufacture of that product, and conducts all experimental work; Chief Draftsman, who superintends the work of the drafting rooms; Assistant Superintendent, in charge of maintenance of power and heating plants, internal transportation facilities, machinery and buildings; Foremen, in charge of shops employed in production work. As shown by the lines of communication, represented by the heavy lines, the authorities of the comptroller and superintendent extend to every phase of the work of the commercial and manufac- turing branches. The comptroller is in communication with the manufacturing branch since the making of schedules, time keeping, and the assembling of cost statistics are all centered in his office. He does not, however, assume any of the duties of the superintendent, and while their work is closely related, the two officers conduct their departments without conflict of authorities. It must be remembered that they are equally responsible to the general manager, which of itself requires cordial cooperation. 27 COMMERCIAL CHIEF ACCOUNTANT CHIEF STENOGRAPHER ADVERTISING MGR. SALES MGR. CREDIT MAN MANUFACTURING PURCHASING AGE>4T 1 CHIEF STORES CLERK 1 CHIEF ENGINEER 1 CHIEF DRAFTSMAN 1 FOREMEN 1 ASSISTANT SUPER INTENDENT Fig. 2. A Chart of Working Authorities in a Manufacturing Business 28 ORGANIZATION 19 8. Organization Applied to Small Business. We have referred only to large manufacturing enterprises divided into many depart- ments, necessitating a division of executive duties among a large number of minor executives. While, in the organization of a smaller enterprise, not all of these department heads will be required, the principles of organization, so far as division of authority is concerned, remain the same. In the small corporation, we find the same board of directors elected by the stockholders. This board may be small, consisting of no more than five, or even three members, but the same executive oflScers are elected. One man may hold more than one office, as secre- tary and treasurer, or vice-president and treasurer, yet each office is filled. If the board is small the executive committee may be omitted, in which case the board itself performs the duties of the executive committee. There is the same general manager; at least the duties exist even though there be no such office in name. The president may act as the executive head, and be recognized as the actual mana- ger of the business, but in so doing he is acting in an entirely different capacity than that pertaining to the office of president. Extending the illustration to a small manufacturing enterprise, the general manager may assume all of the duties of the comptroller in the operation of the commercial branch; he may be his own sales manager or credit man; or in the manufacturing branch, he may act as superintendent. The treasurer of the corporation may be the accountant and also act as credit man. The advertising and sales managers may be one, or the superintendent may be the purchasing agent as well. The point intended to be emphasized is that there are certain duties to be performed, certain responsibilities to be met, certain authorities to be assumed even though it be but a one-man business. And in this is illustrated the importance of creating any business organization without regard to individuals. 9. Organization of Mercantile Business. Leaving for a time the organization of a manufacturing enterprise, we will consider the application of the principles of organization to a trading business. In such a business, the administrative section remains the same: stockholders, directors, officers, executive committee, general manager. At this point the business naturally divides into the departments of buying and selling. 29 21) Fig. 3. A Chart of a Corporate Trading Enterprise 30 ORGANIZATION . 21 The buying department is subdivided into purchasing, stock, and shipping. The subdivisions of the sales department are sales and accounting. Our chart of the organization shown in Fig. 3, follows the same lines as Fig. 1, the only change being in the main divisions. Advancing the next step we find the executive officers in charge of the several divisions of the work, corresponding very closely to those shown in Fig. 2. The buying department is in charge of the Purchasing Agent, Chief Stock Clerk, and Shipping Clerk, or Traffic Manager, as he is sometimes known. The selling department is in charge of the ChieJ Accountant, Advertising Manager, Sales Manager, and Credit Man. This is shown clearly in the chart, Fig. 4. Lest an erroneous impression be gained, it may be well to state at this point that the advertising and sales managers must work in perfect harmony. Indeed, advertising is one branch of the sales department and the success of one is so closely interwoven with the other that no important step should be taken by either independently. In many large concerns, the sales manager is the real advertising manager, even though another may supervise the actual routine of preparing advertising matter. A competent advertising man makes a successful sales manager, and every sales manager should have advertising training, for the purpose of advertising is to create a demand and assist in making sales. Referring again to Fig. 4, it is seen that both buying and selling departments are under the control of the general manager, from whom direct lines of communication lead to every division of these depart- ments. Direct communication is also maintained between the two departments. The accounting division keeps the accounts of the baying department; the sales division must be in communication with the purchasing and stock division in respect to maintaining the stock to be sold, and with the shipping division in respect to the filling of orders. 10. Universal Application of Organization Principles. When we go into all of the ramifications of business we find many cstablisli- ments where minor variations of our plan of organization appear necessary, but in the final analysis, the fundamentals prove to be the same. 31 SELLING CHIEF ACCOUNTANT ADVERTISING MGR. SALES MGR. CREDIT MAN BUVING PURCHASING AGENT CHIEF STOCK CLERK SHIPPING CLERK Fig. 4. Chart of Working Authorities in a Trading Business 32 ORGANIZATION 23 Reduced to its simplest form, we will suppose the business under consideration to be a small retail establishment conducted by two partners. No thought has been given to the principles of organiza- tion, yet they are applied in that little store just as surely as in the im- mense manufacturing plant. Ask any commercial salesman calling on the firm who is the man to see regarding the introduction of a new line of goods, and he will probably answer, "Mr. Jones is the man to see; he does the buying." With no thought of organization, the owners of this little business realize that it is best for one man to do the buying. Perhaps the other may inspect samples, his opinion may be asked, he may even place an occasional order, but it is not the rule of the establishment. By placing the buying in the hands of one partner, confusion is avoided. He can keep in closer touch with prices, and the results are far more satisfactory. Advancing to the larger retail business of the department store, whether the general store of the small town or the big store of the city, we find a different problem. Here the buying is further special- ized, for one man buys for one, or at most three or four departments. The same men act as sales managers and buyers in the departments for which they are responsible. The manager of a department in a big store is selected as much for his ability as a buyer as for his sales- manship. But we do not get away from fundamental principles, for in buying and selling the manager is performing two entirely separate and distinct functions. No matter what the business, we find the same two fundamental functions, that is, buying and selling. As illustrations of the appli- cation of this principle to different businesses we give the following: Publishers of newspapers and other periodicals buy editorial work, manuscript, engraving, paper, printing; sell subscriptions, advertising space. Publishers of books buy editorial work, manuscript, engraving, paper, printing; sell books. Railroad companies buy equipment, rails, lumber, coal, supplies, labor; sell freight and passenger transportation. Schools and colleges buy textbooks, supplies, services of instructors; sell instruction. Professional men buy their instruction, books, instruments, office furnish- ings, clerical assistance; sell their services. In every undertaking, revenues are produced through salesman- ship. Every business and every profession has something to selK 33 24 ORGANIZATION and its financial success depends largely upon the quality of sales- manship employed. Whether it be a professional man with nothing but his services to sell and no other means of advertising than through work well done, or a gigantic commercial organization with its exten- sive advertising campaign and many salesmen, a selling organization exists in some form. And before anything can be sold it must be procured, or bought. On this question of the universal application of the principles of organization, we quote from a valuable contribution in The Engi- neering Magazine, by C. E. Knoeppel: " While business as it is now conducted is not as simple as it was in the barter days, it must not be inferred that this segregation of authority is syn- onymous with complexity, for its very purpose has been to simplify, and that is what it has accomplished. It is only where this segregation has been the result of lack of thought and proper attention, or other like causes, that we find a complex and unsatisfactory condition of affairs. In fact, there is all about us sufficient evidence that many commercial enterprises are being con- ducted along lines that, as far as evolutional development is concerned, are several stages behind the times "Let us suppose a case, which will apply in a greater or less degree to the majority. In the earlier development, we will say that the founder of the business was able, on account of its small size, to make what sketches he needed, solicit orders, see that they were filled, perhaps take a hand at the making if occasion required, see to the shipments, and attend to the collections and the keeping of his few accounts. He finds that the business grows, and eventually places a man in charge of certain branches while he looks after others. The accounts eventually require more attention than he can give them so he engages a bookkeeper in order that he may be relieved of the work. He finds that the quantity of materials received and shipped amount to enough to warrant a receiving clerk as well as a shipping clerk, and, to handle this material from its inception to shipment he conceives the idea of placing a man in charge as stock clerk. He then adds a purchasing agent, in order that he may be relieved of the detail and that purchases may be made most economi- cally; a man is placed in charge of the orders; foremen are placed in charge of certain men in the shops; the details connected with making plans, draw- ings, estimates, etc., are taken over by a practical man; his manager is given a man to look after the shops or engineering branch; while the commercial branch with its many details is placed in the hands of another. As the evolu- tion continues, the selling branch is assumed by one man; cost details are looked after by another; a chief inspector is added in order that all work may be shipped according to specifications; the engineer, who before had been a sort of jack of all trades, is placed in charge of certain work, while an electrician is engaged to look after this particular work; and so this segrega- tion continues as the development continues. " Perhaps it is not to be wondered at that the founder, in looking back- ward, is inclined to pat himself on the back when, in a reminiscent mood, he 34 ORGANIZATION 25 considers what he terms 'remarkable development.' He considers that he has been wonderfully successful in building up a business which at the beginning was so small as to admit of his supervising every detail, while today he em- ploys a dozen men to do the work he once did. There is no getting away from the fact that it is this same feeling of self-satisfaction that is responsible for a large number of faulty organizations, for if we should tell this manufacturer that his business is far from being as successful as it is possible for it to be . . . he would vigorously resent any such accusation; but the fact remains that it is not the success it should be, for the very reason that the development has been allowed practically to take care of itself. New men were added, new offices created, only when absolutely necessary, each newcomer being given a general idea of what was expected of him, and not knowing, not thinking, or perhaps not having the time to give more than passing attention to the matter, the proprietor did not consider the fact that his business was a unit, with each worker a part, having a distinct relation with every other worker. Hence, as the efficiency of any organization is directly in proportion to the care with which these relations are considered and treated, his organization naturally fails to attain that degree of eflBciency obtainable, and for this condition he, and he only is responsible." 11. Departmental Authorities. The next logical step in the development of our organization is an analysis of the departmental organizations. We have seen how the operations of the business are divided among several divisions or departments. The reason for such divisions is apparent. In a large business no one man can personally supervise all of its activities. Each division is engaged in certain activities that demand the immediate supervision of specialists. One man is a specialist in advertising, another in sales plans, others in purchasing, specific manufacturing operations, or the design and maintenance of appliances intended to improve the product or to reduce costs. To reach the highest state of efficiency in every department of the business, these specialists must be employed, which is another reason for organizing a business along the line of its activities, and without respect to individuals. Before we can decide what manner of man should be placed at the head of this or that department, we must study the duties of the position, the responsibilities involved, the authorities to be assumed. To present this problem in graphic form, the chart (Fig. 5) is de- signed. While the arrangement is not inconsistent with Fig. 2, this chart of the same class of organization is laid out along the lines of authority. It shows both the authority of the department head and the necessary activities of his division. 35 20 ORGANIZATION We have selected the organization of a hirge industrial establish- ment for tlie very reason that many divisions and departments are necessary. The smaller organization will have a less number of divisions, but it is much easier to condense than to expand a given plan. Any man who understands the requirements of a large organ- ization can readily adapt those ideas to a smaller establishment. He Fig. 6. A Chart Which Shows the Duties, Responsibilities and Authorities to be Assumed by Each Department Head can apply the plan so far as it can be used to advantage. Some variations of the application of the plan will be pointed out in our departmental analysis. It is perhaps unnecessary to say that while the authorities of some of the department heads have been referred to m preceding 36 ORGANIZATION 27 pages, this analysis is intended to exhibit these authorities in greater detaiL 12. General Manager. As a rule the general manager has general supervision over the commercial and manufacturing branches. In conjunction with the president and executive committee, he formu- lates all policies to be followed in purchasing, manufacturing, sales, and advertising, establishing credits, and accounting methods. He is responsible to the executive committee and board of directors for procuring materials, their manufacture and sale, and the maintenance of buildings and machinery. It is his duty to keep in touch with the operations of every de- partment and to post himself on the general efficiency of all classes of workmen. Through reports he will keep informed in regard to the results of the operations of every department. While in direct communication with all department and division heads, he will have for his immediate assistants, a comptroller and a superintendent. It is from the comptroller that he will receive statistics and reports of the activities of the business in all its branches, while to the superintendent he delegates his authority in the actual operation of the manufacturing branch. 13. Comptroller. "A controller or manager" is a standard definition of the term comptroller. In the organization under con- sideration, he is a controller of the business by virtue of the fact that he is responsible for the accounting and recording of all activities of the business. He occupies the position of auditor and is the real systematizer of the business. He creates all systems of commercial accounting, cost accounting, departmental records, time keeping, and pay rolls, reports of superintendent, perpetual inventory, sales statistics, and, in fact, all records of the business. He prepares all balance sheets, comparative statements, trading, manufacturing, and profit and loss statements, and reports to the general manager or executive committee, or both, on the condition of finances, materials, and finished goods. Since the formation of important policies may hinge on the reports and statistics of his department, he occupies an office next in importance to the general manager. The training and experience gained in his office place him in direct line for promotion to the office of general manager. 37 28 ORGANIZATION His authority is absolute over the accounting and stenographic departments, while his authority extends to other departments only in respect to their record systems. In the accounting department, his direct assistant is the chief accountant; and in the stenographic, the chief stenographer. In a smaller organization the comptroller may not require the ser ices of a chief accountant, in which case he performs the duties of the position. Or the treasurer may occupy the oflfice of comp- troller. Chiej Accountant. The chief accountant is in immediate charge of the commercial and factory accounting. His assistants are cashier, bookkeepers, factory accountant, cost clerks, time clerks. This department accounts for the receipt and disbursement of all moneys and properties, figures costs and pay rolls, and prepares statistics necessary for the use of the comptroller in making up his reports and statements. It is evident from this that the comptroller is in a sense the custo- dian of all property belonging to the business, since he must, through his accounting department, account for its receipt and disbursement. This explains why the comptroller prescribes all systems for the care and recording of stores, supplies, and finished product. Chiej Stenographer. The chief stenographer is at the head of the correspondence department, with authority over all stenographers, typists, filing and mailing clerks. Stenographers are supplied to all divisions by this department. This plan of having all stenographers in one department subject to the call of those having need of their services is now adopted by most large concerns, except in a few cases where stenographers act as private secretaries to the officers. The plan is an economical one, for only the number actually required to handle the work of the establishment need be employed. Under the old plan of employing one or more stenographers in each department, it is common to find them idle in one department while in another the work is behind. Another strong point in favor of the more modern plan is that each stenog- rapher becomes familiar with the dictation of all departments, and no stenographer has an opportunity to become familiar with the secrets of the business. In the stenographic department, the work of addressing and mailing for^ letters, catalogues, and circulars is done. 38 ORGANIZATION 29 All correspondence is filed by this department. Records of office supplies, stationery and printed matter are maintained in this department. The chief stenographer has charge of and accounts for all postage, but secures postage by requisition from the cashier or accountant. 14. Sales Division. By far the most important division of the entire commercial branch is the sales division. This division is responsible for finding a market for the output of the business. It must create a demand for the product through advertising, open new fields, study the demands of the trade and the products of competitors, ascertain as far as may be the possibilities of marketing new products, and, above all, sell goods at a profit. The selling division of some of the largest industrial establish- ments is in sole charge of a general sales manager, who has authority over the advertising as well as selling. In our chart we have divided responsibility for the conduct of this division between sales and ad- vertising managers, placing the advertising manager on an equality with, rather than subordinate to, the sales manager. This combina- tion will produce the most satisfactory results for most enterprises. Advertising Manager. The advertising manager has charge of the preparation of all advertising literature, catalogues, copy and designs for all periodical advertising and usually the placing of all contracts for printing and engraving. He has authority over all artists and copy writers employed regularly and for special work. With the sales manager and general manager, he makes up appropriations for periodical advertising and places contracts when these appropriations have been approved. He confers with the sales manager on all questions pertaining to his work, no printed matter for the use of the selling division being ordered until approved by the sales manager. Thus, cooperation of the sort that makes for success is assured. Sales Manager. The sales manager has authority over the sale of goods and filling of orders, and his department is divided into selling and filling. The selling department is further subdivided into salesmen and mail orders. One subdivision represents that portion of the sales made by personal salesmen. The active work is carried on by salesmen who call on the trade under the orders of the sales manager. 39 ;H) organization The sales manager hires all salesmen, prescribes their territories and routes, and supervises their expense accounts. He compiles reports and statistics of their work for presentation to the comptroller or general manager, and keeps the records pre- scribed for this department. The mail order division is engaged in the sale of goods by the use of letters, circulars, and catalogues. Lists of customers and prospective customers are maintained, and sales follow-up systems are operated under the immediate supervision of this division. In the billing department, the chief order clerk is in charge of entering sales orders, making shipping orders and manufacturing orders. He maintains a record of sales and manufacturing orders so that he can keep informed on manufacturing or stock requirements. All invoicing of shipments is done in this department. The shipping clerk maintains records of rates of transportation by rail, water, or truck, and keeps posted on routes and facilities. He supervises the packing of all goods, and secures proper receipts from transportation lines. Credit Man. The position of the credit man is an important one in any establishment. He collects and records information about the financial responsi- bility and credit standing of customers. A\Tien necessary, he makes special investigations, and on the basis of his information extends or limits credit. Every order from a new customer must be approved by the credit man before it can be accepted. ^^^len accounts have been opened, it is the duty of the credit man to collect them when due, or, if not paid promptly, to use every means to secure a settlement. His work brings him in contact with both the sales and accounting departments. The credit man is assisted by such clerks and collectors as may be necessary for the conduct of his department. 15. Superintendent. The superintendent is given general super- vision over the manufacturing branch of the business. His author- ity extends directly to the engineering and drafting departments, the work of the assistant superintendent, foreman of tool room, and shop foremen. His relations with the purchasing department are advisory rather than managerial. His immediate assistants are the chief engineer, assistant superin- tendent, and shop foremen. 40 ORGANIZATION 31 It is his duty to execute orders for the manufacture of goods, operate the plant in the most economical manner, study and intro- duce processes and methods that tend to reduce manufacturing costs, and keep informed generally on the eflBciency of men, machinery, appliances, and materials in all manufacturing departments. With the assistance of the purchasing agent he provides all materials and supplies required in the manufacture of goods or for the operation of the plant. Chiej Engineer. The chief engineer designs all special ma- chinery and appliances to be manufactured for use in the plant, designs and plans all new products for which there appears to be a demand, and personally supervises the experimental department. The installation of new equipment is also done under his supervision. His authority extends to the drafting department which is in charge of a chief draftsman. This department draws all designs, plans of new machinery or product, and all plans not classed as architectural. In a plant where many special tools are made, the chief engineer also has authority over the tool room. Assistant Superintendent. The assistant superintendent is re- sponsible for the maintenance in efficient condition of all power, pumping, heating, and lighting plants, internal transportation facili- ties, and the repair of buildings and equipment. Except in the larger plants, he has authority over the tool room which is placed in charge of a tool room foreman. This department is responsible for the custody of all tools, repairs to tools, and their manufacture. Tools are issued only on requisition and perpetual inventories are maintained according to systems prescribed. In some very large industrial plants, like a steel plant, there are several assistant superintendents, each having specific duties. There may be a superintendent of power, superintendent of transportation, superintendent of machinery, superintendent of buildings, superin- tendent of stores, etc. In a small plant, the superintendent will personally perform the duties here assigned to the assistant superin- tendent. Shop Foremen. As the name indicates, the shop foremen are in charge of the various shops or manufacturing departments. It is the duty of the shop foreman to lay out the work called for by the 41 32 ORGANIZATION orders of the superintendent, and to assign the work to his men. He will make provision for the prompt execution of orders by making requisition for the number of men that can be profitably employed in his department. It is his duty to keep all of his men supplied with work. 16. Purchasing Agent. The purchasing agent has charge of the purchase of all materials for the manufacturing branch, and in some cases for the commercial branch. In a purely trading concern, his duties would be in connection with the commercial or selling branch, but in a large industrial enterprise, the purchase of office supplies, advertising literature, etc., is usually under the supervision of the comptroller, chief accountant or advertising manager. He procures catalogues, price lists, names of manufacturers and dealers, and keeps generally informed as to sources of supply. He obtains samples which are submitted to tests by the engineering department or otherwise. With the superintendent and general manager, he makes schedules of materials, secures bids, and places orders. Records of orders and all information needed in his office are kept according to the systems prescribed by the comptroller. He has full authority over the store rooms, in which he is assisted by the chief stores clerk. This department receives all goods, checks receipts with orders or invoices, stores the goods, delivers them on properly executed requisitions, and maintains perpetual inventory records as prescribed. EMPLOYMENT DEPARTMENT 17. A department, or rather a sub-department, not shown on the chart but found in some establishments, is the employment department. This department is very properly in immediate charge of the superintendent, and, in the average manufacturing plant, he will hire all men. In a plant employing a great number of men, it is impossible for the superintendent to personally take charge of this work, and an employment agent is placed in charge. The employment agent keeps records of all employes and appli- cants and hires all men needed by the different foremen. GENERAL MODIFICATIONS 18. The organization that we have described is a representative illustration of the application of the principles to a large enterprise, 42 ORGANIZATION 33 necessitating a considerable number of subdivisions. But even here the charts show only what may be termed the principal divisions ; the charts might be extended in greater detail. The explanation might include the exact duties of every employe in each department, but, as our purpose is to present general principles in sufficient detail to serve as a guide, explanations of these minute details have been omitted. There are, however, modifications to be found in certain cases which may be made clear by further suggestions. We have referred to the comptroller, and while in many concerns no such office is recog- nized, at least by that title, some man in every business of any magni- tude fills an analogous position. Most frequently it is the auditor, or if the office of auditor has not been created, it may be the treasurer. Again, the duties or a greater part of them, may fall on the office manager or the chief accountant. Even in a small partnership where one of the partners is the bookkeeper, the duties exist, and are performed by that partner who keeps the accounts. It must be remembered that the comp- troller's office is primarily statistical. It matters not whether the statistical operations involve the keeping of a simple set of books or require large commercial and factory accounting forces with a third division to compile statistics from their records, every business demands certain statistical work. Neither is it important whether the man in charge of this work be called comptroller, auditor, ac- countant or office manager, but we have used the title of comptroller as more exactly descriptive of the functions of the office when carried to its legitimate conclusion in a large business. While, in most manufacturing industries, the superintendent and purchasing agent have full authority in the making of purchases for the manufacturing branch, it has been found advisable in some cases to give the comptroller authority over the purchasing department. A reason for this is the importance of reducing the investment in raw material, supplies, etc., to the lowest point consistent with the actual requirements of the business. Much needless capital is tied up in raw material, when it might be at least earning bank interest. His chief concern being to provide a liberal supply of raw materials, the superintendent is very liable to overstep the bounds in the direction of too liberal purchases. 43 34 ORGANIZATION A still different condition is found in a large merchandising establishment. Here practically every department manager is his own buyer and while he must be regarded as the best judge of what to buy, it becomes necessary to supervise his purchases in respect to quantities. The comptroller should, therefore, have authority over the amounts invested by the several buyers This is usually con- trolled by giving the buyer a stated appropriation at the beginning of each season, the amount being determined by a study of present conditions and records of past performance. The making of an appropriation does not operate against special appropriations to be used in taking advantage of specially advantageous market conditions, or to increase stocks of fast selling lines. DUTIES CLEARLY DEFINED 19. One of the first requirements in the development of a suc- cessful organization is that the duties of every employe be clearly defined, and that each employe be fully informed as to his duties. Nothing tends to produce greater friction than an overlapping of duties and authorities. In a manufacturing plant, when a foreman is placed in charge of a shop he should be instructed as to his authority, responsibilities, and exact duties. \Vhen these authorities have once been established, no other man of equal or lower grade in the organization should be permitted to interfere in any way, nor should the foreman be per- mitted to overstep his authority. Those occupying positions to which greater authorities are attached should also be careful to not presume upon their authority by attempting to direct work properly under control of the foreman. The superintendent or manager who, in passing through a plant, dis- covers a workman in the act of violating an established rule, or doing something dangerous to the lives of himself and fellow employes, or performing work in the wrong way, is justified in at once bringing the matter to the notice of that workman; but he should report the occurrence to the foreman at the first opportunity. On the contrary, if the manager or superintendent wishes to make a change in policy involving a departure from the established customs of the shop, or if he requires the services of a workman even temporarily in another department, he should first take up the matter with the shop foreman. 44 ORGANIZATION 35 The same policy in general should be observed throughout the organization. The person placed at the head of a department or division of the work should have full authority and be held responsible for the work of all employes in that department. Complaints of ineffi- ciency of an individual employe should be made to the department head. If the purchasing agent, for instance, finds the work of a cer- tain stenographer unsatisfactory, his complaint should be made to the chief stenographer. 20. Duties of Individual Workmen. The duties of the in- dividual workman in the shop should be as clearly defined as are those of his foreman. It is the duty of the foreman to lay out the work and to keep the workman regularly employed on the work assigned to him. In the operation of the manufacturing branch, the most impor- tant consideration is economy of production. When a workman is kept at one task he becomes a specialist, increases his production, and reduces costs. 21. Duties of Office Employes. Each clerk in the office should have his work clearly defined. If specialization is profitable in the shop, it is equally so in the office. Every man who has been responsi- ble for the management of an office will agree with us that in no other branch of business is there a greater tendency to allow work to get behind. Lack of system is mainly responsible for this state of affairs. While his duties may be more or less clearly defined, the work of the average office clerk does not follow any well defined plan. He does the thing that seems most important, leaving the less important tasks until he "has time." Instead of surveying the field and laying out a logical, systematic plan, the average office employe goes about his work in a haphazard sort of way following the line of least resistance. The work in every office is largely routine, but the faithful per- formance of routine tasks is a necessary accompaniment to those larger tasks, which in themselves, appear of greater importance. Routine tasks are drudgery — something that every man seeks to escape. In freeing himself from a state of drudgery, the department head should be careful lest he place his subordinates in the same dreaded rut. An office clerk should be given an opportunity to learn all of the routine of the division in which he is employed. He will 45 :^(i GENERAL ACCOUNTtNG GCNCRAL. POSTING CASH BALANCES & PAVNEKfTS COLLECTIONS LEDGER D n LLm O O DAILY CCBBBBCBBBBBB MON. WED. TMUR SAT. B B APR. A«nt C&.shier Billing TotM OFFICE EXPENSE Chief Stenogri.Vier Mailing Filing Tbfs>.l SALES EXPENSE Advertising Mgr. Copy Engrzwvtng Printing Adverttewg 9pi>.ce Sikles Mgr. Siwleamen Ro^d " M^il Order " House Traveling Expense Postikge Order Recording Packing & Shipping Toti^l CRECMTS » COLLECTIONS 1 Credit M£.n • Reports \ Records ! Collections 1 Toti.1 TOTAL COMMERCIAL EXPENSE ^b«*tsra' Fig. 8. This Chart ot Expense Distribution Shows the Amount of Kxecutive and Ad- EXPeNSE DISTRIBUTION CHART- continueo 41 f Manufacturing |g^ T. AND HEADS CLERKS 1 STENO- 1 1 GRAPHERS 1 EXPENSE \ TOTAL BrougrPTt fonvarcti EXECUTIVE i Gener&.l Mgr. \ Comptroller Superintendent Tot 4^1 FACTORY ACCVnG Time &. Pzwy Roll i Records i Cost 5ta.tvsttcQ ■'% Totj^l 1 PURCHASING Purc)nakSlng Agent 1 Receiving .i Stores i *• Records i Tota.V J ENGINEERING \ Chief ETvgineer 5 Experimental ^ Drafting ' PSktiems Tools . 5 Toti.1 1 SHOPS ». EQUIPMENT .! Foremen J Power.Mej.t& Light .i RepZkirs /, Tri.nsport2ktion t Tota^l i TOTAL MANUFAC- TURING EXPENSE TOTAL GOMM'l & MFG. EXPENSE. < _ .— -■ II 1 ttlnlstrative Salaries, and Kxpenso of Ever> Class, and Their Correct ApportlonmenI 61 42 ORGANIZATION The application of the items from which lines lead only to the commercial or manufacturing branch is readily understood. Between the two are several items from which lines lead to both branches, indicating that the expense is to be divided. This division should be given close study. Care must be used that too large a part of any item is not applied to either branch. The salary of the general manager, and usually the comptroller, will be equally divided. The duties of the chief accountant, chief stenographer and stenographers being chiefly in connection with the commercial branch, only a small portion of their salaries is charged to manufacturing. Shipping clerk and packers* salaries are charged to either one or the other branch, depending upon the nature of the enterprise. In a manu- facturing enterprise where all goods are delivered to stock rooms ready for shipment, packing and shipping is a sales expense and is charged to the commercial branch; in a plant building heavy ma- chinery that must be shipped from the assembling floor, this expense is usually charged to manufacturing. EXPENSE DISTRIBUTION CHART 23. To present a graphic record of expense distribution, the chart, Fig. 8, is used. This chart separates commercial and manu- facturing expense, showing amounts, while Fig. 7 shows to which branch each item belongs. This chart subdivides commercial expense into executive, ac- counting, office, sales, and credits and collections, showing totals for each and for the entire commercial branch. Manufacturing expense is subdivided into executive, accounting, purchasing, engineering, and shops and equipment. A comparison of these statements from month to month will show just what every item is and indicate the slightest increase in any class of expense. Similar charts can be readily prepared for any business, segregating expenditures of each branch, division, or department. The distribution will naturally vary in difiPerent businesses and, before this chart can be prepared, the exact distribution must be de- termined. In this chart, packing and shipping is included as a com- mercial expense, while, as stated previously, in some businesses it would be a manufacturing expense. All such questions must be decided before the chart is prepared. 52 ORGANIZATION 43 EFFECT OF PHYSICAL ARRANGEMENT 24. However eflficient the personal organization, satisfactory results can be obtained only under proper environment. It is not merely a question of pleasant surroundings for employes, but a finan- cial proposition; not a reform or a fad, but a money-making plan that governs the engineer in laying out a plant. This is not to be a discussion of welfare work, about which much has been published. Our purpose is to point out the business economy of a proper physical arrangement of oflBce, store or factory as against the wasteful methods of a systemless grouping of men and machinery. The question of physical environment is a practical one that has been solved by many enterprising concerns, and the subject is de- serving of careful study by the student of business organization. While some hard-headed business men may regard the question of minor importance, it is significant that the largest and most successful enterprises, financially, are those in which employes have been sup- plied with the most comforts, surrounded with approved safeguards, and aided in their work by the latest appliances of proved worth. There is an old axiom to the effect that even a good workman cannot be expected to do good work with poor tools. It is equally true that he cannot be expected to do good work in either unsanitary or inconveniently arranged shops and offices. 25. Factory Plans. The planning of a manufacturing plant is a question for the engineer, rather than the accountant or business organizer, but a few general remarks on the subject will not be out of place in this paper. It may be stated as a fundamental principle that the factory should be planned to facilitate the movement of raw material from one department to another. In the ideal factory, storage for raw material will be provided where it can be economically received and easily procured when needed in the factory. It should, if possible, be close to the department in which the material is subjected to the first operation. The shops themselves should be arranged to facilitate the move- ment of partly completed parts from one department or shop to another. To illustrate, a foundry should be so located that castings can be taken direct to the machine shop, or smith shop, not through another shop or in a round-about way. 53 44 ORGANIZATION Likewise, the machine shop, if the process be continuous, should be located next to the assembling department. Or, if a "parts" store- room is maintained, it should be located between the machine shop and assembling department. Storage for completed goods should be adjacent to the assembling department, and convenient to the shipping room or platform. The chart, Fig. 9, shows a typical layout of a manufacturing plant operating both a foundry and wood shop. Naturally the foundry and wood shop are as widely separated as possible. Storage of foundry materials is provided for just outside of the foundry, while lumber is convenient to the wood shop. The arrows indicate the movement of raw materials through the shops to the finished goods store-room, and from thence to the shipping platform. If these lines are traced it will be seen that at no point is the material twice moved over the same ground. Each move takes it to the next operation and one step nearer completion. IMiere materials and parts enter a shop at two or more points, the lines are merged, show^ing that these materials leave that shop as one piece, part, or finished article. A feature underlying the whole plan is economy in the movement of work in process. All work moves through a shop, not back and forth in the shop. The ideal conditions do not always exist, neither can they be brought about in every case. Many plants, built in the past, have been planned without due regard for these matters; their importance was not appreciated and the buildings are so located that it is impos- sible to secure entirely satisfactory results. However, if present conditions are studied carefully, many improvements can be brought about at slight expense. ^Miile, as we have intimated, this is a prob- lem for engineers, a number of cases might be cited where the account- ant, called in to systematize the accounting methods of a manufac- turing business, has suggested physical changes in the shops that have resulted in marked reductions in costs. 26. Planning the Office. The average oflBce is arranged in a very haphazard way. Departments are located with little regard for their departmental relations; desks are placed where they fit best rather than according to any preconceived plan. Logical arrangement of the office has as great an influence on the economical conduct of the work as does the physical arrangement 54 45 46 ORGANIZATION of the shop. The most important requisite in the layout of an oflBce is good Hght. While ideal conditions are impossible to attain in some buildings used for offices, much ain be accomplished by placing the desks to take full advantage of the light that is available. The writer once visited an office in which sixty or more people were employed in one big room. Most of the light came from the rear and practically all of the desks faced the light, which is recognized as most injurious to eyesight. The manager of the office was asked why the desks were not placed in proper position, and he replied that they were placed so that the employes would sit with their backs to the entrance, and not have their attention detracted from the work by visitors. He considered this an important move, but overlooked the more vital fact that his employes were not only ruining their eye- sight but were actually doing less work than would have been done under more favorable conditions. A change was consented to. As many of the desks as possible were so placed that the worker would receive the light from the left; some received it from the right and a few from the back. Three months later this manager readily admitted that his employes were turning out at least one-third more work, and their general health was greatly improved. The location of the departments and the private offices should be carefully considered. Departments in which the work is of a nature requiring frequent inter-communication should be located as closely together as possible. For instance, the sales department should not be placed between the order and accounting departments, but the order department should be close to the accounting depart- ment, with which it is in constant communication. The workers in a department should be placed to facilitate the movement of their work from one desk to another. Heads of depart- ments or chief clerks should be within easy reach of all employes in the department, and accessible to the executive. Offices of executives should be located with reference to their duties. The sales manager and purchasing agent should be acces- sible to the public. The general manager should be within easy reach of other officers but not necessarily accessible to the public. The importance of conveniently arranged offices is receiving much serious thought, and many of the larger industrial enterprises 56 ORGANIZATION 47 are erecting ideal administration buildings. In all specially planned buildings, the tendency is toward large rooms, rather than smaller rooms separating the departments. A large room insures better light and air, and space can be utilized to much better advantage. Fig. 10 is a sketch of the first floor plan of the administration building of one of the large industrial enterprises. This is, in many respects, an ideal arrangement. A noticeable feature is the location of the filing department in the center of the main room. Here it is easily reached by all departments. At either side of the filing department are the sales and accounting departments. In the sales department several sales managers' desks will be noted, with desks for their assistants across a narrow aisle. It happens that, in this particular business, sales are divided into de- partments corresponding with the classes of goods manufactured, with a sales manager for each department. The accounting, order, and credit departments are conveniently arranged, and the auditor is located where he can overlook the entire office. Executive offices, across the front of the building, are access- ible to the public and those in the general offices. 27. Store Plans. The subject of store plans is one of utmost importance to the merchant. His success is influenced to a great extent by the first impression received by the prospective customer. If that impression is favorable, if he is greeted by an orderly, well arranged store, if his comfort and convenience have been considered, the customer will return and give to the store at least a part of his , patronage. The old-fashioned general store, in which all sorts of merchandise was sold, offered little to commend in respect to orderly arrangement. As a rule, the goods were jumbled together in a confused mass with no thought of segregating them in departments. Yet this country store, found in every hamlet, was the forerunner of the department store of today. The advent of the department store was a case of adapting the merchandising methods of the country village to the needs of the city. A miscellaneous stock of merchandise, greater in size but similar in character to the country store stock, was gathered in one big store and subdivided into departments. To compete with one-line stores, 57 IS ORGANIZATION 58 ORGANIZATION 49 stocks must be equal in volume, which meant that the department store must carry as large a stock of clothing or of shoes as the exclusive clothing and shoe stores. The stocks must be as complete and as well displayed; each department must be a fully stocked store, pre- pared to meet the usual demands of a store of that character. The department store of today is a model of systematic arrange- ment. Not only are the goods grouped in departments, but the de- partments are logically grouped and located to suit the convenience of the customers. If one wishes to buy house furnishings, hardware, or dishes, he will probably find them in adjoining departments. But the departmental idea is by no means confined to the recog- nized department store; it is a feature of every well regulated store dealing in exclusive lines. Stocks of shoes, hardware, clothing, and furnishings are all divided and the classes segregated by departments. The departments themselves are subdivided. Goods are classi- fied, and each class placed in special compartments. Goods most frequently called for are near at hand on shelves where they can be easily reached. Top shelves, space under counters, and other inac- cessible corners are reserved for goods called for less frequently. THE COMMITTEE SYSTEM 28. We have already referred to the necessity of cooperation in every successful organization. We do not wish to be understood as advancing this idea of cooperation for the benefit only of executive officers and heads of departments. It must extend farther than this — it must penetrate to every nook and corner of the shop. We must have the cooperation of every workman, no matter how obscure his position, and to secure this cooperation it is neces- sary to instill in him an interest in the welfare of the business as a whole. Treat him as a mere cog in the wheel and he will very likely be content to do as little work as possible and still draw his pay, with no thought of bettering conditions in his department. But show him that you recognize his ability — that you know that he knows how his work should be done — and he will readily lend his cooperation. The problem of securing this cooperation has been given much study, and those who have met with the greatest success have done so by showing the workman that his advice and suggestions are appreciated. 59 50 ORGANIZATION No matter how willing you may be to receive them, the work- man naturally hesitates to make suggestions personally. But give him an opportunity to discuss a point with others of his kind and it is surprising how many practical ideas will be brought out. Ex- perience has shown that this spirit of working for the good of the business can best be maintained through the formation of standing committees. Such committees bring out the best ideas of the men composing them, and invariably work for the good of the business. 29. General Factory Committee. In the manufacturing branch of a business, the first committee to be formed is the general factory committee. This committee is usually composed of the superin- tendent, who acts as chairman, the chief engineer or designer, the tool room foreman, or the special designer of tools, the head of the cost department, and two or three foremen of the most important departments. The work of this and all other committees must necessarily be adapted to the requirements of the business, but, as a general prop- osition, the matters to come before the committee may be stated as follows: 1. Reports and discussions of the standardization of the product. 2. Reports of progress on new designs or the redesigning of old product which has been authorized at previous meetings. 3. Discussion of economies in general operating methods, economies in cost of production, and all questions of a similar nature. 4. A report on routine work in the factory — whether stock or special contracts — condition of orders, and condition of stock to fill future orders. 5. The question of promotions. If all promotions in the shop are brought before this committee for approval, it will do away with the charge of favoritism of foremen in advancing relatives or per- sonal friends without regard to their qualifications. A foreman who is obliged to recommend promotions to this committee, will be very careful that the promotion is deserved. 30. Departmental Factory Committees. Many factories manu- facture more than one line of goods. In such factories it is advisable to have committees to discuss progress in each specific line. Members of the factory committee should act as chairmen of these depart- mental committees. The committees will be composed of the fore- men interested, the tool room foreman, and the head of the cost department. The work of the committee, so far as relates to a particular 60 ORGANIZATION 51 department, will be very similar to that of the general factory com- mittee. The discussion will cover: 1. Standardization of product and suggestions for new designs. 2. Progress on improvements already started. 3. Economies in operating expense and cost of production. 4. Reports on routine work. 31. Job Bosses. Carrying the committee plan a step farther, it is well to hold occasional meetings of the job bosses. The foreman of each shop will act as chairman and discuss matters pertaining to work in his own shop with the job bosses under him. In most factories it is also advisable to hold, at least once a month, a general foremen's meeting. This should be a meeting of all fore- men, with the superintendent, for the discussion of problems of a general nature and problems relating to specific shops. 32. Sales Committee. In the commercial branch, perhaps the most important committee is the sales committee. This committee should consist of the general manager, who acts as chairman, the sales manager, advertising manager, chief engineer, and superin- tendent. At times it may be advisable to call in the head of the cost department and the tool room foreman. At the meetings of this committee the following subjects will come up for discussion : 1. General sales report, showing progress of the business as a whole. 2. Territorial sales reports, showing sales in each territory. Both of these reports should exhibit comparisons between the current and preceding periods. 3. Reports of sales classified according to the nature of the product, or specific lines of goods. This is in some respects the most impor- tant of the reports, since it shows which are the fast and which the slow moving lines. 4. Suggestions for and a discussion of proposed improvements in the present products. 5. Discussion of proposed new product. 6. Standardization. In the discussion of the three last named subjects the engineer and superintendent are especially interested, and it is here that the presence of the cost clerk or the tool-room foreman will be required. A salesman naturally assumes the attitude of considering his custo- mers' desires of the greatest importance. Naturally he wants the factory to manufacture the goods that he can sell. But a discussion of difficulties to be surmounted, increased costs, and like questions 61 52 ORGANIZATION will go far toward bringing him into line and convincing him that the interests of the house lie in his pushing standard goods. 33. Advertising Committee. A committee which is to a certain extent a subdivision of the sales committee is the advertising com- mittee. The general manager should act as chairman, and will have with him on the committee the comptroller, advertising manager, and sales manager. The work of this committee will be confined to a discussion of: 1. Results of past advertising, including periodical, street car, bill- board, and all other forms. 2. Appropriations for current advertising. These advertising reports are very important, for, after suflBcient time to establish an equitable cost basis has elapsed, all future adver- tising should be based on the cost of actual sales, giving due con- sideration of course to the season of the year, general tendency of the times, and other factors which might temporarily have a disturbing influence. 34. Organization Committee. Another committee of impor- tance, which, for convenience, we will call the organization committee, is one which discusses all questions pertaining to accounting and record systems. This committee will be headed by the comptroller and will include the sales manager, advertising manager, credit man, purchasing agent, and superintendent. Sometimes it will be advis- able to call into the meetings the chief accountant, cost clerk, stores clerk, and even shop foremen. As indicated above, the chief work of this committee will be a discussion of systems. \Miile the comptroller prescribes all systems of record, reports, statistics, and accounts, he should make no radical changes without discussing the proposed change with those whose work will be directly affected. Many systems, good in theory and which with cooperation would work out in actual practice, have failed because they were forced on the business. A systematizer may install a good system and get it into operation, but unless he has secured the cooperation of those upon whom its operation will devolve, he will very likely find that after he leaves there is a gradual disintegration until conditions are worse than before the change was attempted. It is seldom that a foreman or a clerk will resent a change if he is 62 ORGANIZATION 53 made to feel that he is, in part at least, responsible for the change. When new systems are introduced in the shop, the foremen are quite likely to look upon them as a means of checking up their departments — SL sort of poHce supervision. This is the inevitable result when inno- vations of any sort are instituted by employers or their representa- tives. All employers desire the willing and active co-operation of their employes and are quick to complain that employes do not "take an interest in their work." But offering the market price for routine service and expecting enthusiastic co-operation is manifestly unfair; this accounts for the prevailing distrust on the part of employes toward prizes, bonuses, "welfare" movements, and other schemes which they think are offered them in lieu of salary to induce them to put forth extra effort. Employers are learning now, as never before, that in order to get the most from labor they must themselves be above suspicion. Just in proportion as a high standard is maintained by the management, the workmen will become real associates of their employ- ers and as thoroughly opposed to time-serving methods and other expedients calculated to restrict production as are employers. Committee Meetings. The frequency of meeting of the com- mittees herein suggested must be decided by each manufacturer. No hard-and-fast rules can be laid down, but generally these suggestions will apply: General factory committee, weekly. Departmental factory committees, once in two weeks. Job bosses and general foremen's meetings, monthly. Sales committee, weekly. Advertising committee, monthly. Organization committee, monthly. Committee Secretaries. At each committee meeting, a stenog- rapher should be present to act as secretary. When no record is kept, discussions are quite likely to be rambling rather than confined to a specific subject. Then, too, matters which were discussed at the last meeting have grown hazy, and if a man who is responsible for putting into operation a given suggestion has failed in his duty, there is always the chance that no one will think of it at the next meeting unless he brings it up. If, however, an exact record is kept of these discussions and full reports are delivered to every member of the com- mittee before the next meeting, a foreman, or other member, will be very careful about making statements or promises unless he knows that they can be fulfilled. 63 54 ORGANIZATION Where possible, it is best to have the same stenographer act as secretary to all committees, as he will become familiar with their work and can handle it much more expeditiously. THE SUGGESTION PLAN 35. In many factories, and even in mercantile establishments, a modification of the committee idea has been successfully introduced in the form of what is known as the suggestion plan. This plan con- sists in asking for suggestions from all workmen, these suggestions to pertain to manner of handling their own work, improvements for the benefit of the business as a whole, safety appliances, sanitary condi- tions, and anything that may be of benefit to the business. While between foremen and heads of departments the com- mittee plan undoubtedly works to the best advantage, we advocate the suggestion plan for the rank and file of workmen. Even when called into a committee meeting, the workman sometimes hesitates to express his opinions, when if he were permitted to give them in some other manner he would make many valuable suggestions. The plan is to place at convenient points boxes with slots cut in the top in which the suggestions can be placed. Workmen are invited to write out their suggestions and place them in these boxes. They may either sign them or give their clock numbers. The latter plan is sometimes advisable, as it does not reveal the identity of the men making suggestions. All suggestions are taken up in committee meeting by the committee directly interested, and a small prize is given for those suggestions that are put into use. Even so large a department store as Marshall Field & Co. has found it extremely profitable to offer $1.00 for each suggestion offered by an employe that is finally adopted. Another method is to use autographic registers like the one illus- trated in Fig., 1 1 on which three copies are made. The original is sent to the oflBce, the duplicate is retained by the workman, while the triplicate remains on a roll in the machine. This is removed at the time of the committee meeting, and any suggestions adopted are posted on a bulletin board. The workman need not even sign his number, but can present the duplicate as proof that the suggestion was made by him. The introduction of any or all of these committee and suggestion 64 ORGANIZATION 55 Fig. 11. Autographic Register Made by United Auto- graphic Register Co. plans requires careful study, but when once put into operation they will prove both successful and of inestimable value to the business. ORAL ORDERS CAUSE CONFUSION 36. Probably no more prolific source of confusion and mis- understanding of in- structions is to be found than in the habit of giving oral orders. "I understood you to say" or "I thought you meant" are familiar excuses offered for a failure to follow what the one giving them considered clear and explicit instructions. The absolute necessity of clearly defined authorities that every man connected with an organization may know from whom he is to receive orders, is well recognized. When we get above the one- man business, employes are not left in doubt as to the source of their orders. Why then should there be left the slightest chance of misunderstanding as to the nature of their orders? When we issue orders that are to be executed by someone outside of our own organization, we are careful that they are in writing. If an order for goods is placed by telephone or telegraph it is confirmed in writing, not alone for the legal protection afforded by a valid con- tract, but that there may be no confusion or misunderstanding. When we receive an order we prefer to have it in writing for the same reasons. The success of any undertaking is largely dependent on the proper execution of orders. Surely, orders to be executed within the organization are of equal importance to those that will be executed by an outsider, and at least the same care should be exercised in issuing them. The logical conclusion then is that they should be ^ven in writing. True, oral instructions are sometimes necessary, but all orders and instructions of importance should be in writing. There are many classes of internal orders, depending on the nature of the business. Among them is a class of inter-departmental com- 65 r>6 ORGANIZATION muuications more in the nature of correspondence than direct orders. In the harmonious operation of an organization, many requests are made between departments; general orders affecting all departments are given by the manager; bulletins are issued by a department manager to all employes under him — all of these should be in writing. As an illustration, take a special order from a customer. A sales- man reports that an order can be secured for certain goods provided some slight change is made in the design. The sales manager will communicate with the superintendent about the cost of making the changes. The question then goes to the general manager for a final 0- cc ^ C3 ^ ci: S 3: ie >- ^ Qc. *o =$ ^ — ci "^ K Pi CC S^ K Q ti: 87 ao MACHLNE SHOP MANAGEIVIENT divided along state lines, and a District Agent appointed for each state. These, in turn, appoint the Local Agents. This necessitates an organization of hundreds of local agents, supervised by state or dis- trict agents, and these in turn by a General Agent. Thus a very large organization is built up for disposing of the product. Another plan is the employment of Traveling Canvassers, each having a certain territory to cover, who make their reports to either state or district agents, or to the general agent located at a central point — sometimes at the factory, but not necessarily so. As competition becomes stronger and net profits smaller, the problem of marketing the product becomes more and more important; greater and more complex selling organizations are necessary; and the expense of selling increases. The advertising organization, or what has come to be known as the Publicity Departme7it, is a most important adjunct to the modern manufacturing business; and large amounts of money are annually expended in its maintenance. In the case under consideration, the selling of the product is in charge of a Sales Manager, who has as his ofiice staff the Publicity Manager) the Preliminary Engineer,3,nd the draftsmen and estima- tors who assist him; the General Salesman, who is in reality the per- sonal assistant to the Sales Manager; and the Credit and Collection Clerk. The Publicity Manager, sometimes called the Advertising Manager, has charge of all advertising of whatever kind, demon- strations at expositions and at agencies, and, in fact, all work that may be properly comprised under the term "publicity" — that is, keeping the public informed as to the product of the company and its adaptability to meet the needs of the public in the special lines it manufactures. The Preliminary Engineer is in charge of such engineering mat- ters as are necessary upon new work, or work upon which the Sales Manager desires to estimate. It frequently happens that consider- able designing and drawing are necessary in this connection, previous to definite orders being given or contracts signed. It often happens that the product of the concern must be changed in certain details so as to adapt it to the uses of various customers, to the different local conditions under which it is to be used, and to the various purposes for which it is to be used. In case an order is given and contracts 88 MACHINE SHOP MANAGEMENT 21 signed, the preliminary drawings thus produced become a part of the transaction, and are used by the Production Department in getting out the machinery to fill the order. The purpose of the Credit and Collection Office is to canvass the financial standing of customers and prospective customers; to make collections when necessary to do so; and generally to advise the Sales Manager on these important matters. The official in charge of this office is frequently called the Credit Man, and must be a person of peculiar abil ty in his special line in order to protect the concern from fraud, imposition, and financial losses when dealing with customers of commonly unknown or doubtful financial ability and standing. The Production Division is under charge of the Factory Manager, who has for his personal assistant a Production Engineer or Superin- tendent, who plans the productive scheme of the factory and super- vises the departmental distribution of the work and the shop opera- tions necessary for the routine work upon it. In a large manufacturing establishment, the Production Engineer will be at the head of a con- siderable force of draftsmen and clerks comprising what is sometimes called the Planning Department, which arranges all operations, shop routine, time schedules, premium rates, and similar matters. The Factory ]\Ianager will also have the usual office assistants, and have direct control of the Purchasing Department, the Time and Cost Department, the General Store-Room, and the Shipping Room. In some concerns the Time and Cost Department is a part of the Planning Department, as the records of this department cover nearly every kind of information required for the Time and Cost systems. All other departments of the factory are divided into two general classes. The first comprises the general departments, as follows : The Engine: ring Department, or Drafting Room. The Experimental and Development Department. The Power Plant, for both the generation and the distribution of power. The Iron and Brass Foundries. The Forge Shop and Cutting-0£f Rooms. The Carpenter Shop (including sometimes the Flask Making and Re- pairing Departments). The Paint Shop and Painters' Supply Room. The Transportation Department for shops and yards. These are under the supervision of the General Superintendent^ who has charge of all mechanical matters except those strictly per- taining to production or to the actual manufacturing of the jjroduct. 89 — _l 1 r ^ '< o O «Q _J~" 1 r - «2 1 s ~l_ — — — i 1 CO 1 ^-t - — — — ?• ^ '0(Q r~ >n: ■.-. 1 — — — s — ~ — cS _r~ i 1 "3 — — J u — > t" 02c S — a 1 — <50 pi cn ~\- — - • J b - 90 MACHINE SHOP MANAGEMENT 23 The second general class is that of Production, and will ordinarily consist of the following departments: The Planing Department, including shapers and Blotters. The Drilling and Boring Department, including vertical, horizontal, and radial drills and boring machines. The Heavy Turning Department, including lathes of less than 24-inch swing. The Milling Machine Department, including horizontal, vertical, and special milling machines, profile machines, etc. The Gear-Cutting Department, for the making of all classes of gears. The Grinding Department, including cylindrical, disc, and surface grinding. The Polishing Department, which includes polishing, buffing, etc. The Assembling Department, in which parts (usually comparatively small) are assembled in groups of related parts and stored, pending the final erection of the machines. The Erecting Department, in which the entire machine is erected and usually tested, and inspected, receiving the final painting and other finishing work ready for shipping. Should the character of the product be such as to require it, there will b6 also a Plating Department, usually located adjoining the Polishing Depart- ment. This class of departments will be under the direct supervision of the Production Swperintendent. Each department is in charge of a Foreman, who is responsible for the discipline, the work, and the efficiency of the force under him. Frequently the department is large enough to require one or more assistant foremen. Under these may also be Gang Bosses, each of whom will have a small force of employees, called gangs, for whose work and efficiency he is responsible. Shop Management. Referring to the Chart, Fig, 2, it will be noticed that the rectangular figures representing different offices, departments, or officials are connected by lines. These are com- monly called lines of authority, and a careful study of them will show in what manner and through what channels the orders of an official pass to the employees for whose work he is responsible. Tracing these lines from the head of the establishment through the various offices and officials to the difi'erent departments, we get a fundamental idea of Sho'p Management. This system will be rendered somewhat simpler by reference to tlie Chart, Fig. 3, which shows the path or official channel of com- munication and authority from the Superintendent down to the work- 91 24 MACHINE SHOP MANAGEMENT men. It also emphasizes the fundamental idea of all oflScial business passing through tlie officials in charge of intermediate departments. Thus, if the Factory Manager desires a certain thing done, he does not give the order to one of the workmen, nor to a foreman, but to the Superintendent. The Superintendent will give his orders to the foreman of the department wherein the work is to be done. If this is a department in which there are gang bosses, the Foreman will give his orders to the proper gang boss, who will select a suitable workman, or as many of them as may be necessary, and instruct them as to the work, and will personally see that it is performed promptly and in the proper manner. When the work is completed, he will report the fact to the foreman, who will in turn report to the Superintendent, who informs the Factory Manager that his orders have been executed. This process may seem unnecessarily complicated, and in con- sequence it is sometimes referred to as red tape. It is, however, neces- sary to have a well-defined and properly understood system and chan- nel for all routine business, some of the reasons for which are as follows : First — It has been said that "no man can serve two masters," and this is quite true in all questions of shop management. Every loyal workman has learned by precept and tradition to look to his immediate superior for all orders and instructions relating to his work, and he naturally and properly resents any attempt to ignore or belittle his legitimate "boss." Second — As the efficiency of the workmen depends to a great extent upon their loyalty to the management, and as that loyalty can be secured and main- tained only by a spirit of justice and fair-dealing to all, including officials and workmen, all authority and responsibility should be sharply defined aiid properly limited, to the end that the business and work may proceed in an orderly and efficient manner; that all officials and workmen may know when they are within their proper limit of rights; and doing their duties without fear of overstepping their due bounds or interfering with the rights and privi- leges of their fellows. Nearly all rules are subject to some exceptions, and the above have theirs. The discipline of the shop, or what is sometimes referred to as the police regulations^ are expected to be enforced by all officials ai all times. Two of these exceptions are of such a general nature and applica- tion that they are here noted. First — Any official noticing an infraction of the discipline of the plant may call the attention of the employee offending, without regard to the depart- ment in which he works, and require him at once to cease violating the rules. 92 MACHINE SHOP MANAGEMENT 25 But the official should, as soon a^ possible, report the matter to the head of the department in which the offending employee works. Second — Any official noticing work being wrongly done, or material wasted, or machinery obviously injured, or the safety of the workmen, the building, or the machinery endangered, may peremptorily order the action to cease, and at once re- port the fact to the head of the depart- ment or to the Su- perintendent, as he may judge proper. Official Com= munications. For ordinary commu- nications other than General or Special O r d er s , Production Or- ders, letters, etc., a written form should be habitu- ally used. The u s u al form is shown in Fig. 4. These forms are put up in pads of alternate sheets of white and light- tinted paper, the former being per- forated at the top so as to be readily torn out while the tinted sheet remains fast at the stub. Both sheets are printed with the same form, and all are serially numbered in pairs of one white and one tinted sheet. Carbon paper is used, the white sheet being written upon and the tinted one receiving the carbon impression. Each official is supplied with these pads, and by their use he always retains a copy of any memorandum or communication he makes to another official or department. The serial numbers are intended to aid in the i:lentification of any memorandum that may have become 3 HOP MEMORANDA 5F.RIAI NO. HATF. A RFFERWINS TO -,.;;;■ Tn n^p'l" ':■ ) ( f^ryxotA Fig. 4. Form for Ordinary Official Communications. A carbon copy is made on tinted pai)er. 93 26 MACHINE SHOP MANAGEMENT somewhat illegible. The use of these blanks saves any misunder- standing that might occur from giving and receiving verbal orders; and serves to prevent errors and mistakes, and to fix the responsi- bility for their occurrence upon the party in error. Successful Management. The spirit of shop management should always be a spirit of leadership. This cannot usually be obtained unless the manager possesses natural ability as a leader. Successful military chieftains are examples of this condition. They lead the men instead of driving them, and the result is a condition of enthusiastic loyalty. It is also quite as necessary that a leader should be a practical man with sound technical training and practical experience in the business which he undertakes to manage. If he is not thus equip- ped for his duties, the facts soon become apparent to his subor- dinates, and his reputation suffers accordingly. The workmen lose confidence in his leadership, and lack enthusiasm in the performance of their duties, going about their work in a listless and perfunctory manner that is very detrimental to the efficiency of the plant. Still another quality necessary in the successful manager, is the ability to judge men and their capacities for various duties. To get always the right man for the position, the machine, or the job, is a valuable trait in any man who is to direct the work of even a moderate- sized establishment. The larger the plant and the more diversified the business carried on in it, the more valuable and indispensable this characteristic will become. The manager who is continually or frequently changing his subordinate ofiicials, and consequently pro- ducing changes in the working force, will always find his duties ardu- ous, and will also find it well-nigh impossible to get the plant up to the degree of eflBciency that is to be reasonably expected. The volume of output will continually fall below the normal point, and the quality of the work will also deteriorate. The work of management should be a constant upbuilding of the force, and of development and educa- tion along the lines of advancement in the special output of the con- cern. This cannot be carried on if the composition of the force, or the oflBcials who handle it, are in a transition state of change, doubt, and uncertainty. There is, on the part of many oflBcials having charge of men, a propensity to interfere too much with workmen and their work:, and 94 MACHINE SHOP ]\L\NAGEI\IENT 27 thus to hinder rather than help them. While it is quite true that every official from the Gang Boss up to the Factory Manager can, at various times, help the workmen in their allotted tasks by timely advice and suggestions, it is also true that this is a matter that can be easily over- done, until it becomes an annoying nuisance and unnecessarily inter- feres with the men in the discharge of their legitimate duties. Workmen are quick to discern when suggestions and advice are well meant and instructive, and when they come as a kind of veiled criticism. The official who permits himself to indulge in this sort of dictation soon falls into a practice of nagging that is most exasperating to the men. It is a practice that first weakens and then destroys the official's influence with the men, who obey only from necessity. WTien this condition exists, the working efficiency of the force is at a very low ebb. On the other hand, really helpful advice and suggestions, made in a cheerful manner and from a quite apparent desire to assist work- men, will usually meet with a quick and loyal response that argues well for the efficiency of the workmen. Another point on the road to success, is a patient and interested listening to suggestions that workmen have to make, even though it is on trivial matters. It should always be borne in mind that the work- man laboring day after day on the same class, and often on the same kind of pieces, of work, is in a position to discern and to study out many minor improvements in tools and methods which are valuable. A kindly hearing accorded him, the adoption of such suggestions as are practical, with some substantial reward for his study, will en- courage not only him but other workmen to study their work and endeavor to find better and more efficient ways of doing it. Thus an active and interested spirit of loyalty is brought about that is one of the most valuable assets of the plant. The successful manager is he who is enabled to unite his working force of subordinate officials and workmen in a complete and loyal organization, all working for the common good and for the success and prosperity of the concern. Having gained this condition, the question of efficient and economical manufacturing is practically as well as theoretically solved. 95 28 MACHINE SHOP MANAGEMENT SHOP METHODS AND RECORDS From the principles that have been advanced in connection with the subjects of Manufacturing and Shop Management, it will be readily seen that the work of the manufacturing plant of the present day is a very complex matter, and there must necessarily be very com- plete and carefully formulated plans and systems by which all its operations are regulated, and a somewhat elaborate plan of records by which these operations and their results are recorded and filed. In formulating the necessary plans for the methods and records of a manufacturing establishment, we must first determine the require- ments of the work and decide definitely on what we wish to accom- plish. In other words, the conditions must be first examined and analyzed, their various factors studied at their true value, and the requirements determined, so that a general plan of operations may be followed. These methods shall cover the following subjects: 1. The selection and employment of workmen. 2. The methods of keeping the time of all employees. 3. The manner of paying workmen. 4. The ordering of work into the shops. 5. The routine of passing work through the shops. 6. The method of drawing stock and materials. 7. The ways of keeping and issuing tools. Importance of Records. Each of these methods will become a part of the routine of the establishment, and the operations carried on under it will be proper matters for regular records made from day to day. Such records are exceedingly valuable as current information, and, when properly filed, become quite as valuable for reference in the future as for use in current operations. In all improvements in the working routine of manufacturing operations, there should be previous records by which the present performances may be checked and compared. By this arrangement, it is comparatively easy to ascertain whether or not any improvement is being made, and in what direction it is being made. This knowl- edge will suggest further plans and betterments. Should the records prove that there are losses rather than gains being made, the warning is equally valuable, and we make haste to better results and greater eflBciency in the work. 96 MACHINE SHOP MANAGEMENT 29 Thus, whether the plans and methods in use are really successful, or quite the reverse, it is of the utmost importance that we should know by prompt and accurate records just what the results are, in order to keep in close touch with the progress of events, and that, when plans do not produce the favorable results expected and desired, the information may be promptly available, the warning be heard, and plans altered or amended until they bring about a successful routine in the manufacturing operations. Selection and Employment of Workmen. This is an important matter, since it costs money to introduce new men in any business, APPUCATION CARD NAME ADDRES5 DATE. A6E MARRILD SINGLE NATIONALITY WA6E5 ASKED EVER EMPLOYED HERE ? LA5T EMPLOYER KIND OF WORK WHEN PREVIOUS EMPLOYER KIND OF WORK HAVE BEEN EMPLOYED FOR YtAR5 KIND OF WORK WANTED EMPLOYED Fig. 5. Application Card. and requires from a day or two to several weeks for the new man to become sufficiently accustomed to his work and surroundings to be of the same value as the man who is perfectly familiar with the shop, the routine and methods of work, and the foreman under whom he works. It is therefore necessary to go about this matter in a methodical manner, and to keep records of: (a) All persons making application for employment. (6) All persons regularly accepted as employees. (c) Individual records of all regular workmen. (d) All employees who leave the employment of the company. To accomplish these results, the official whose duty it is to employ men will fill out, or will have a clerk fill out, an Application Card of the form shown in Fig. 5, for each person applying for a position. It will 97 30 MACHINE SHOP MANAGEMENT be noticed that it is important to know whether the appHeant has ever been employed in this estabUshment previous to the present appHca- tion. If so, his. record can be readily referred to for information as to the desirability of employing him again. It is also necessary that the record of his last employer be known, and frequently of the employer previous to the last, as these matters will also be taken into considera- tion in determining his fitness for the position for which he applies. It is also necessary to know how many years he has been employed in manufacturing establishments, as this fact, taken in consideration NAMF EMPLOYMErrr card riATF ADDRESS A6E. MARRIED SINGLE NATIONALITY WA6E5 PER EVER EMPLOYED HERE ? LAST EMPLOYER KIND OF WORK WHEN BY WHOM HIRED KIND OF WORK DATE TO BEGIN WORK FOREMAN APPROV :D SUPERIMTEMDEHT Fig. 6. Employment Card. "With his age, will frequently furnish information upon which to base judgment as to his fitness. The Application Card, being on file, is available for the use of such foremen or other officials as may be in need of workmen. Should the appUcant be decided to be available, after consultation between the official to whom application was made and the foreman desiring to increase his force, the applicant vdW be sent for, and employed at a rate mutually satisfactory, and an Employment Card of the form shown in Fig. 6 filled out. This will repeat some of the information con- tained on the Application Card ; but it is necessary to have two cards in any event, as the information must be filed in separate drawers. The Employment Card will also give the name of the official employing the man, as well as that of the foreman under whom he is to 98 MACHINE SHOP MANAGEMENT 31 work, the kind of work he is to perfonn, and when he is to commence work. It will also require the approval of the Superintendent or Factory Manager, as the case may be, to make it valid and operative. The appUcant having become one of the regular employees of the concern, a third card is made out for filing in the List of Employees drawer. This will be upon the form shown in Fig. 7, and is called a Service Card. It will be noticed that each of these three cards is headed with the name and address of the person whom it represents. The Service Card gives the department in which the employee is to work, the kind of work which he is to do, the date he begins work, NAMF SERVICE CARD ADDRES5 DEPARTMENT KIND OF WORK DATE BEGUN RATE PAY RAISED PAY RAISED PAY RAISED TRANSFERS aurr REA50N Pig. 7. Service Card. ana his rate of pay. Spaces are also provided for noting the amount and date of any increases in his rate, and for the record of a transfer to another department should he be moved, as is frequendy the case with new men who may not be quite adaptable to the kind of work first attempted, but entirely satisfactory at some other class of work. A space is also provided for noting the date of the workman's leaving the employ of the company, and also for giving the reason for it. This will be valuable information in case the workman should sub- sequendy apply for employment. When an employee leaves the service of the company, his Service Card is removed from the List of Employees drawer, and placed in a fourth drawer labeled Discharged or Quit, being held there for future reference. 99 32 IVIACIIINE SHOP MANAGEMENT Individual Record of Standing. In many well-conducted manu- facturing establishments, it is customary to keep a record of the stand- ing of the men as rated each month, as a valuable reference in cases of proposed promotion, increases in pay, reliability for special work and positions of responsibility. Various methods of marking the records of the men each month have been tried, but the simplest method is to use the number 100 for perfect, and to divide it as follows: Good workmanship 50 Punctuality in reporting for work 30 Deportment during working hours 20 Total 100 INDIVIDUAL RECORD NAMF NO YEAR MONTH MARK MONTH MARK MONTH MARK MONTH MARK JAN. • AU&. JAN. Aue>. FE5. SEP FEB. 5EP MCH. OCT MCK OCT APL. NOV. APL • NOV. MAY DEC. MAY DEC. - JUNL ' TOTAL JUNE TOTAL JULY PERCENT • JULY ■ PERCENT Fig. 8. Individual Record Card. Demerits are marked off as to workmanship, by the foreman, according to his judgment aided by the Inspector's reports of the work done by the man. Punctuality is judged by the number of times late, each instance reducing the mark by one unit. 'As the workman enters the shop twice a day, morning and afternoon, assuming 26 working days in the month, a practical disregard of punctuality soon reduces his record in this respect to zero. Deportment is judged by the Foreman, who also takes into ac- count occasions on which the workman may have been reported for violating the regulations in this respect. 100 MACHINE SHOP IVIANAGEMENT 33 A Record Card is shown in Fig. 8, upon which monthly records are kept. The total for any period, divided by the number of months covered by the record, will give the percentage o£ a perfect record. This card provides for a record for two years. If it seems advisable to do so for special reasons, a similar card may be formulated covering the six working days of the week. A year's record in this form may be entered on a card 4 by 6 inches, by arranging the horizontal and vertical ruling for that purpose. Such a record may be profitably kept of the work of the office force, as well as of the men in the shops. It will be valuable in many ways in judging of the availabiUty of the men for special work, as well as for promotion. Necessarily such records should be very carefully kept; otherwise there is liable to be serious injury done to the working reputation and integrity, as well as reliability, of the men. The Employment Agent. In large concerns, an official is regu- larly appointed as an Employment Agent, and it is his duty to keep the office and the shops supplied with competent men engaged at reasonable wages. He must therefore keep in close and accurate touch with the labor market, for the same reasons that the purchasing agent must know the state of the market for material and supplies. He must know how and where to reach workmen of the different classes whenever he is called upon to furnish them. "While ordinary laborers may nearly always be obtained from the daily applications made at the office, skilled men must be hunted up; and it is not usually easy to find just the man with the quahfications desired. When men are wanted for positions above the average skilled workmen, the best and most promising will be nearly always distributed among the present employees who are deserving of advancement. To promote one of them, rather than hire some man from outside the organization, is usually good business policy. The man and his abilities are generally well known, while a stranger is always an un- known quantity. The men, being acquainted with the man, will be pleased to see him get the deserved promotion; and it is always wise to consider the popularity of proposed orders affecting the working force. The man himself will feel his added responsibilities much more than an outside man will, and will generally work harder to suc- 101 34 .MACHINE SHOP MANAGEMENT ceed in his new position. Therefore it is always best to give the first chance to present employees who have been faithful to the responsi- bilities thus far placed upon them. It will be found that in most of the departments there are em- ployees who from one reason or another are doing work quite below their real capacity, hoping that later on there may be better oppor- tunities for the coveted position. The Employment Agent should know the men of the force, and their abilities, so as to take advantage of these conditions. A man may be needed by a foreman in one department who is not aware that in a neighboring department may be just the kind of man he wants. The Employment Agent should know where to find the man at once. Again, one department may, from the conditon of the work, be short of help, and may request the Employment Agent to hire a certain number of men of certain qualifications and abilities. At the same time, there may be another department in which there are more men than can be used to advantage. An arrangement for the temporary or permanent transfer of some of these men will be a great help to both departments, and will have the added advantage of keeping good men permanently employed. If a workman feels that his employment is permanent, and that there are fair opportunities for advancement, this will be the surest way to hold him faithful and loyal to the interests of the establishment; and the conditions that bring about this condition of mind in him will also draw other good men who will be glad to be counted as among those faithful to a company which appreciates their services and which will look to their interests as they consider those of their employers. The result will be that these men will give their best services, and even be on the alert to further the interests of the employer who has favored them. Thus a strong working organization is built up, which becomes one of the best and most valuable assets of the company. Time Keeping. As cost of labor is usually greater than any other in the manufacturing plant, and frequendy greater than all other factors in the cost of manufacturing, it is very important that the records pertaining to this expense be properly planned and accurately kept. Various methods have been adopted and used for this purpose. Some of the more prominent plans will be given. They are each 102 MACHINE SHOP MANAGEMENT 35 adapted to some certain kind or class of work, and it will often be found that in practice still different forms must be devised in order to meet the existing conditions. There are three methods of recording the time of employees — namely : 1. By entering the time in a book or upon cards, by a Time-Keeper. 2. By entering the time upon cards by the workman himself. 3. By stamping the time upon cards by the workman in a time-recording clock. The first of these methods is the oldest form, and has now to a great extent gone out of use. DATE. ORDER MO. W0RKMAK5HO. MACHlHt HO. PATTERN MAKING- PATTEPN REPAIR5 FOUNDRY REPAIRS EQUIPMENT REPAIRS GENERAL OFFICE DEP'T qUAMTlTY DESCRIPTION OF WORK OONL DRAFTIH6 ROOM TOOL ROOM TIME STARTED FOREMAN'S APPROVAL HOURS RATe VALUe TIME 3TC )Wt J Fig. 9. Pattern Shop Time Card. A large majority of the work of a manufacturing plant re- quires that the time worked by the employees shall be registered twice. That is, one entry shall be of the day time (time paid for by the day), which necessitates the recording of the total number of hours worked each day; the second entry shall record the job time (the time worked upon the different jobs during the day). Tt'his second entry is sometimes called Ti7ne Distribution, since the employee's time is distributed over the different jobs upon which he has worked. Time=Card Forms. This work is sometimes done by means of time cards as shown in Figs. 9, 10, 11, and 12, which are given as characteristic examples of these methods. These cards are of dif- ferent tints as a convenient method of recognizing them. 103 36 MACHINE SHOP MANAGEMENT kers Fig. is yellow, and is used in the Pattern Shop. Fig. 10 is chocolate-colored, and is used in the Forge Shop. Fig. 11 is blue, and is used by the Carpenters and Flask Ma- Fig. 12 is white, and is used in the Machine Shop. DATE ORDER MO. WORKMAH'SNO. ^W0^1NE NO. AririEALm& STRAIGHTO TEMPERINQ CUTTINa OFF CASE HABOENINQ CUT B0LT5 a) TAP NUTS OEP'T QUANTITY OEiCRIPTlON OF WORK DONE FOROlNCi 5HfilNKIN6 WCLOING TOOL WORK TIME. STARTED F0REMAN\5 APPROVAL M0UR5 RATE VALUE , TIME STOPPED Fig. 10. Forge Shop Time Card. DATE ORDER NO. vyoRKMAttsna MACfBNEtia FLASK MAKING BOXING CARPEN- TERING 5HIPPINC1 BUILOINCi REPAIRS OEPT QUANTITY DESCRIPTION OF WORK OOME EQUIPMENT REPAIRS TIME STARTED FOReMAN'S APPROVAL HOURS RATE VALUE. TIME 5T0PPED Fig. 11. Time Card for Carpenters and Flask Makers. Similar card forms may be devised for any other department of a plant, or for the departments of plants doing entirely different work. 104 MACHINE SHOP MANAGEMENT 37 When these cards are used as a means of distributing the time to the various jobs or orders in force in the shop, the day time, from which the pay-roll is made up, is usually recorded on a strip of paper in a time clock, the operation being performed by each employee as he passes into the shop morning and afternoon, and when leaving at noon and night. Passing to the clock, the workman swings a lever to his individual number, and presses in a knob, whereby the exact time of the operation is recorded upon a slip of paper, a ribbon, or a disc within the clock. In other forms of time clock, an individually numbered key is inserted in one of the individually numbered holes, turned around, and DATE ORDER Na WORKJWi'SNO. MACHINE NO. TURNING FILING AND FITTIMO ■" PLAN1N6 straight'mg ajcuniMaoFF 5PLmiNG ERFCTINQ OEPT QUANTITY OESCRIPTION OF WORK DONE FLUTING TAPPIMQ a> ORIUINGr BALANCING QRINDINQ MtLLtNG SCREWMTY CHUCKING BORINS MBBrTTm& ASSEMBLlriG TOOL WORK TIN- SMITMINQ TIME 5TARTED FOREMAN'S" APPROVAL HOURS RATE VALUE TIME STOPPED Fig. 13. Machine Shop Time Carfl. withdrawn. The time is recorded in a manner quite similar to that used in the case just described above. The four forms for time cards shown are quite similar, the differ- ence being in the list of operations given at the right-hand end of the card. At the top of the card are spaces for the date, order number, workman's number, and the number of the machine upon which he works (provided the work is done on a machine). In the next space, the name of the department is given. This is followed by spaces for the quantity — that is, the number of pieces, feet, or inches of such material as is designated in this way, or the number of pounds in weight of the material. Then comes a brief description of the work. 105 38 AUCHINE SHOP MANAGEISIENT Opposite each of these is a square in which the workman can indicate the particular kind of work he has been doing, by marking an X. Thus the form shown in Fig. 9 contains the following classes of work — namely, Pattern Making, meaning new pattern work; Pattern Repairs, referring to repairs charged to the job; Foundry Repairs, or repairs to patterns or fixtures the expense of which is to be charged to the Foundry Department; Equipment Repairs, referring to pattern shop equipment; General Office, consisting of small jobs of equipment and maintenance that are better done by a pattern maker than by a carpenter; Drafting Room, similar new work and repairs, such as drafting boards, angles, etc.; Tool Room, similar work chargeable to this department, such as boxes or cases for special tools, and work not entrusted to a carpenter. Whatever may be the kind of work the employee is engaged upon, he checks it as described; and after the words "Time Started," he notes the hour and minute he begins work. "When the job is completed, he notes the time after the words "Time Stopped." The elapsed time, the rate, and the value are filled in by the time clerk. This card is turned in to the foreman or dropped in a box pro- vided for that purpose, it having been approved by the foreman of the department in which the work is done. It then goes to the time clerk. As each workman has a card for each different job and for each day, it follows that all the job cards for a single day must aggregate the same amount of time as that indicated on the stamped record within the recording time clock. Discrepancies of this kind are in- vestigated, and the time distribution readjusted until satisfactory, the foreman of the department usually being consulted in the case. Recording=Clock Time=Cards. Recording time clocks are also made which operate automatically to produce changes in the position of the card dropped into a receptacle provided for the purpose, such, that when a lever is manipulated, not only is the exact hour and minute stamped upon the card, but it is stamped in its proper place upon the card so as to correspond with the proper day of the week and also indicate whether forenoon or afternoon. The horizontal changes of position are made by hand, previous to manipulating the operating lever. 106 MACHINE SHOP MANAGEMENT 39 WEEK END1M6 1 90 NO NAME DAY m OUT LOST OR OVERTIME. TOTAL IN OUT M A.M. P.M. T A.M. P.M. W A.M. P.M. T A.M. P.M. F A.M. PM.. 5 A.M. PM. 5 A.M. RM. TOTAL TIMF HPS. RATF TOTAL WAGf.S. l^OR VVFFK it Fl K- 13. Dny Tlr no Card * TH15 51DE OUT NO. 105 NAME P'Ig. U. }3ackof ]>:iy TimoCard. 107 40 MACHINE SHOP MANAGEMENT ORDER Nf^ PATF 1 EMPLOYEE N^ ' MACHINE NO. ARTICLE. OPERATION. DAY Its OUT iN OUT TOTAL F A.M. P.M. S AM. P.M. S A.M. P.M. M A.M. P.M. T A.M. P.M. W A.M. RM. T A.M P.M. TOTAL RATE HOURS MIN. AMOU^ iT Fig. 15. Job Time Card. A form for a regular Day Time card is shown in Fig. 13. The days of the week are given, and each divided by horizon- tal Hnes into spaces for forenoon and afternoon. Vertically the dividing lines divide spaces for the time the workman comes IN, goes OUT, and for similar records for lost time or .overtime, as the case may be. At the top of the card is thedate, generally given as the last day of the week for which time is made up. This is followed by the number and name of the employee. Following the table prepared for the time stampings, is a space for the total time, the rate, and the amount due for the week. The back of the card is shown in Fig. 14, and is plain except at the top, which is printed in large and plain type "This Side Out," as employees are liable to introduce the card with its face out- ward. For convenience the employee's number and name are give on this side as well as on the face. 108 MACHINE SHOP MANAGEMENT 41 By the above method of time recording, all employees will use the regular Day Time card. Such employees as work on the regular production orders, and on work properly chargeable to them, will in addition to the Day Time card use a Job Time card, of the form shown in Fig. 15. This card is provided with spaces at the top for the order number, date, employee's number, machine number, article or piece upon which the work is being done, and the name of the operation that is being performed. The body of the card has the same spaces for the recording stampings. It will be noticed that the card shown in Fig. 13 runs from Monday to Sunday, inclusive. This is the usual form, but in some shops the fiscal week ends on different days of the week. In the job card shown in Fig. 15, it ends on Thursday. In the use of these job cards, a card is made out for each job oJ order, without regard to the number of different jobs an employee may have in a day. The aggregate of the time shown on all these cards for a day must aggregate the amount shown on the day time card from which the pay-roll is made up. Thus each card acts as a check on the other, and accuracy is insured to a considerable degree. When the work for which the job time is issued has been com- pleted, and the card receives its final stamping, it may be turned over to the foreman, who will send it to the Time Clerk. This gives the foreman an opportunity to look it over and correct any mistakes that may have been made. In some shops the card is dropped into a box marked Job Time Cards — Completed, whence it is gathered up with others, by the Time Clerk. Coming into the possession of the Time Clerk, he will check it up, together with such others as the workman may have used on the same day, in order to ascertain if the total time on the job cards for the day equals that shown on the day time card. When the Time Clerk has compared the cards, he will send the job cards to the Cost Clerk, who will enter the amounts in a Job Time Summary book of the form shown in Fig. 16. On this blank, the number, name, and rate of each man are written. The succeeding columns are headed with the various current order numbers. Entries are made opposite the man's name, of the pay-roll value of the time he has worked on the various orders or jobs for the day. The total, carried out in the extreme right-hand column, represents his pay for the day. The totals at the bottom of the job columns represent the value of the time spent on each order, for the day. The work is 109 o O) \D ■z. Q Z UJ s: UJ $ q; o t- o 1- n "n ce. uJ 2: > < liJ J- cQ O "3 -3 fc ' as (0 H liJ Z < z: d z • 110 MACHINE SHOP JMANAGEMENT 43 checked as correct when the sum of all the totals of the right-hand column is exactly equal to the sum of all the totals at the foot of the columns. The entries in this book are made by quite young clerks, who handle only these job cards and books as their daily tasks, and who become very expert, accurate, and rapid at this work. The totals are carried by the Cost Clerk or one of his assistants to the cost ledger, in which the costs of both labor and material, as well as all expense charges, are brought together. Sometimes this work is done upon cards, each one representing an order and containing in brief and con- densed form all the charges of whatever kind made against the order. Methods of Paying Employees. The methods by which pay-rolls are made up and the employees paid, are important; and whatever plans are adopted, they should realize the following desirable re- quirements : 1. The record of amounts due the men should be absolutely accurate and in accordance with the rates at which the men were employed, subject (a) to such modifications as may be made by reason of properly authorized changes in rate; {h) to such modifications as may be made from week to week by over- time-work, or by the operation of methods of "piece work," "premium work," or any of the several plans for rewarding exceptionally efficient work; (c) to Buch deductions as may properly be made on account of advance payments that have been made upon due authority. 2. The methods of making up the pay-roll and paying the men should secure promptness in this work, so that the pay of the employees may not be held back for an unreasonable length of time pending the necessary clerical work. 3. The methods of payment should be such that no workman can know the amount paid to any other workman. To accomplish the results desired in the first requirement, if the amounts due the men are made up from the time recorded by the men themselves — that is, in a recording clock — is a comparatively easy task, since it is principally a matter of mathematics, with a strict attention to details. Changes in rate of pay do not usually take effect until the week following that in which the order is given. This order will be in the form of a request by the foreman of the department in which the work- man is employed, stating the reasons for the increase. This is sent to the Superintendent or Factory Manager for approval. If approved it is then sent to the Pay Clerk, who files the notice for future reference and makes the required change on his pay-roll. Ill 44 MACHINE SHOP MANAGEMENT Premium work rates will be made up by the foremen of the departments, and approved by the Superintendent, in smaller shops. In large plants the rates will be made up by a clerk in the Production Department, and approved by the Production Engineer. In either case they will be sent directly to the Pay Clerk. Advances to men will be made only in special cases, upon a written request from the foreman, stating the reasons and approved by the Superintendent. The second requirement can be met by having the time cards of the style used in recording clocks (as shown in Figs. 13, 14, and 15). The convenience and rapidity of making up the time of these cards is apparent from the fact that the record of the entire week is contained upon the face of one day time card, lost time being checked only in red ink in the total column at the right, and the sum of the amounts of lost time being subtracted from the regular working time for the week Thus, if the working time is 55 hours per week, and the lost time was ^ hour one day and j hour another, making f hour, we subtract that from 55, leaving 54| hours as the time for the week. This is much more rapidly done than to carry out the total time for each day and add up these totals for the six days of the week. The P ay-Roll Sheet or P ay-Roll Book is shown in Fig. 17. This is now frequently made as a loose sheet or such number of sheets as may be necessary to contain all the names, frequently as many as 50 names on the sheet. Upon examination of this printed form, it will be seen that the regular time is divided into productive and won- productive labor. This is for the purpose of ascertaining what portion of the labor is applied directly upon the product, and what portion is applied indirectly, such as foreman, clerks, general laborers, etc., whose work is classed as non-productive. The amount of the regular time is computed, and entered in the column headed Amount. If there is an amount due in premiums, it is entered in the next column, and the two amounts added in the column headed Total Amount. In the next column is entered the amount of any advances that may have been made, which is deducted from the total amount, leaving the net Amount Due, which is entered in the next column. This amount is paid over to the employee, who signs his name in the space under By whom received, and the operation is com- plete. The men's numbers are placed at the extreme left hand and d , 1 o o 2Z O) o> ti-l cc 3 1/5 a s uJ CC > H u_l U-l tx s X 5 2: >- en 1 Q < lU H- si < < '.' <3 u. cx Q. ^-■1 Q .1 < < II 2 s: UJ cc a. 1— z: o s: < ^2 •-X vo c UJ > ^g q: a m _■ q:0 a =>o Copy No.. page ) Key No. This adTertlsement must NOT BE REPEATED without our order This space to be billed to Terms: (In case of question HOLD ORDER and 'K'rite ns at once) Position I requested f Jr-osition I ordered i POSITIONS Top of column and wholly alongside pure reading matter or first tollowing and v/hoJly alongside of pure reading matter. Right-hand page, outside column. Front of Magazine. Back of Magazine. Schools and Colleges. As stipulated in contract. No two of our ads to appear on same or opposite pages. Must not appear on back of any other **ad" coataining a coupon or Cor. School "ad.** Classified. -Conditions, see below CONDITIO-S Advertisements must hare our O. K. before insertion. Bill will not be approved otherwise, un- less proof waived by us. Key number of electrotj'pe (or copy. Uset matter) must correspond with Key number above before inserting. Send proofs. THIS ORDER can be DISCONTINl ED or CANCELIiED at any time by paying for SPACE USED at the rates in force at the date of order. ADDITIOXAI. SPACE pro rata. REBATE to be given if total space or insf-nions in one year earn additional DISCOUNTS. MTE RESERVE THE RIGHT to change copy at any time. IMPORTANT It is a condition of this order that OUR NAIflE and ad- dress be immediately placed upon your mailing list so that we will receive your publication regularly. This will in.sure prompt settlement of your bill. Original Out No- Electrotype No._ Delivered by j ^^jJess i <" ^°t In perfect condition hold order and send for new cut.) Yours truly, American School of Correspondence By Fig. 14. Order Blank Used for Ordering Insertions of Advertising Copy ADVERTISING AND SALES 23 The advertiser who advertises for direct inquiries or orders, usually finds it necessary to revise his schedule monthly, basing each schedule on previous results. That he may act intelligently, he must have an exact record of past results. A convenient form for the monthly schedule is shown in Fig. 13, which is printed on a sheet punched for filing in a loose-leaf binder. Previous results from each publication on each class of goods is shown in respect to inquires, amount of sales, and cost of the ad- vertising. In the three columns at the right of the space for each ad, cost of each, and total cost are shown. Separate sheets are used for popular magazines, trade papers, and newspapers. A\Tien copy has been sent, the sheets are placed in a loose-leaf binder, the full schedule for each month being in one place where it can be readily referred to. Orders for Insertion. When an agency is employed, the agency usually sends copy and orders for insertion to the publisher; though some advertisers prefer to send copy direct, leaving the agency to send orders for insertion. It usually happens, too, that some orders are sent direct instead of through the agency. One large advertiser follows the practice of sending orders direct to those publishers who do not allow agency commissions, all others going through the agency. If orders are to be sent direct, a special advertising order blank should be provided. This order should specify to the last detail the conditions of the order. A blank, which is self-explanatory, is shown in Fig. 14. The order is made in duplicate and the copy is filed under the name of the pu})lication. Checking Returns. A necessity to the advertising department is an efficient system of checking and recording returns from adver- tising. Without a checking system on which he can depend, the advertising manager is spending his employer's money blindly — he does not know what he is getting for it. The first requirement in devising a system is a method of hcijing ads, that inquiries or orders may be identified and credited to the proper mediums. Keying systems there are without number — to describe all of tlicm would ro((uire a book the size of lliis one - but those most coniinonly used are adaptations in one form or another, of the idea of changing the address. 149 -J (Q o > < 1 1 1- i! « o CO OJ 00 N CXJ CD 10 ^ CO OJ s o 0) d z it: c [s i -> <3 D. U (0 O o z o y o 150 J ADVERTISING AND SALES 25 One of the oldest methods is to use a department number or letter in the address, changing the number in each publication in which the ad appears — the address in one would be Dept. A; in an- other, Dept. B. This method is used successfully by some advertisers, but it has its objections. Most people realize that no concern is so large that an inquiry will not reach the proper department. If, for example, an inquiry in response to a beef extract ad, addressed to Swift & Co., failed to reach the beef extract department, it would indicate a very lax system of handling correspondence. Changing street numbers, room numbers, or postoflBce box numbers, is another common method of keying. This can be operated successfully by notifying the local postal authorities that all mail is to be delivered at one number, regardless of the address. An adaptation of the number key, which can be used to advan-' tage for a small number of publications, is a combination of numbers representing publications and dates. First, the publications are numbered, these numbers being used as the first part of the address. To the publication number is added the number of the month or week of publication. To illustrate: Suppose that the Technical World is No. 5 on the list and the ad is run in October. The key number would be 510 — 5 standing for the publication and 10 for the month. All replies with that ad- dress would be credited to the Technical World for October. In using this system it is necessary to use some figure — usually — for a repeater to avoid confusion; No. 112 might mean publica- tion No. 1, month No. 12, or publication No. 11, month No. 2. By adding a naught after the publication No., confusion is avoided — 1102 would mean No. 11, 2nd month, 10012 would indicate No. 10, 12th month. The system can be further varied by using N., S., E., and W., or by substituting Ave. for St. or vice versd. • When readers are requested to ask for catalogs or other printed matter, the numbers by which these are known to the reader can be used for the key — as bulletin A, bulletin B, etc. For either direct inquiries or orders one of the most popular and satisfactory keying systems is to use a coupon, indicating the 151 1^ - " — ' 7" o u a < y (i rr _i o = - < ^ < a. z d IT O o o i. ■ H < o o O H > ' > r Q ^ 111 < < Q (r h (fi < , o o 1- o 2 CD H Z < H < UJ H < i. (rt > < ■:> 3 n < o K 7 (0 U < u _l 3 ri < ' It o 0) -I < K ' ' ' 2 o >< 7 I < h P a 6 o z < (0 Q. -J ^ d tr O if) ~' — — 1- o ^ z a < ^ q: o o (- ID y i d n- O <) (T (0 O U H ' 2 < < (0 _1 1- d cr o cc 5 o Z o ^ — cvj (0 sr i) (U S CO 0) o — M ra ^ in 10 \ D 0) O — ru r) ^ i) :o \ 0) 0) o — H < ^ WW CVl 01 OJ J Q:C) (J o d z llJ ^ hJ (T -5 ID Ll O z (!) J u 5 III s (') (0 a tLj r t % o ~i X o a. Ill (Tl (C o -) J LI < "o a a I 5; ) _ 1 _ _ ( 154 AD\^RTISING AND SALES 29 Hcation; a more condensed record of total results should be provided. All of the information of practical value can be combined with a record of insertions on the form shown in Fig. 17, using a sheet for each publication. The record includes the date of order, space, sub- ject, copy No., cut No., dates of insertion, checking, and proofreading, the date and amount of bill, and the number, amount, and average WEATHER YEAR SPECIAL EVENTS MONTH DAY 27^ MONTH DAY SALES 35 On the other hand, the sales manager should be given full con- trol of his department, until he proves to be incompetent. While other members of the organization will be consulted before a new campaign is launched, when the plans have been approved he should be permitted to try them out w^ithout interference. Assuming that he is a competent man in the first place, he will be the first to detect the weak points and set about to find a way to strengthen them. Many a sales manager has had his usefulness impaired by the interference of others before he has had an opportunity to give a selling plan a fair trial. Selling campaigns have been discontinued before the turning point was reached, because someone higher in authority lacked faith; when they would have proved successful, if carried out as originally planned. This is not an argument for a stubborn adherence to plans, regardless of consequence — any sales committee is liable to make errors — but before the campaign is launched the extent to w^iich it shall be tried out should be decided. If the sales manager is given an appropriation of $500.00, or $5,000.00, for a trial, he can work intelligently, but if told to go ahead, and then ordered to stop before his campaign is well under way, he should not be charged with a failure. Another thing that the sales manager should control is the ques- tion of salaries paid to the salesmen. We maintain that the amount of salary paid to a salesman is of no moment provided he is a profit- able man. A $10,000.00 man wOio sells goods at a cost of 10% is more profitable than the $5,000.00 man who sells at 10%, or even 9%., because of the greater volumes of his business. The management should gauge the sales department by net costs, not by the amount of individual salaries. BRANCHES OF SALES DEPARTMENT The sales department is logically divided into two branches — mail order and personal salesmanship. The mail order branch is that part of the organization which has to do willi the promotion of sales by mail. The personal salesmanshij) branch is the division which makes sales by personal contact with the customer. The work of the mail order branch is conducted by correspond- 161 36 ADVERTISING AND SALES ents — ^letter salesmen — assisted by clerks to look after the routine of the department. The personal salesmanship branch is conducted, primarily, by salesmen who visit the customers and personally sell goods. In many lines, the personal salesmanship branch is supplemented by agencies, who come in direct contact with the customer. There are businesses in which the dealers, who carry the goods in stock, are assisted by both the mail order and personal salesman- ship branches in making the sale to the customer. An example is the piano business in which inquiries are referred to dealers, the dealer and prospective customer followed up by mail, and the travel- ing salesman sent to assist the dealer to close the sale. THE MAIL ORDER BRANCH When the mail order branch is spoken of it does not refer neces- sarily to an exclusive mail order business, but the term is used to identify the department in any concern which uses the mails to promote sales. AMiile there are many exclusive mail order houses, employing no personal salesmen, there are practically no exclusively personal salesmanship houses. There may be no effort to secure direct orders in this manner, but the mails are used to influence sales. Extensive circularizing campaigns are conducted for the purpose of making known to the consumer the merits of certain commodities, wiiich are sold only through dealers. In the sense here used, such campaigns are within the province of the mail order branch. Form Letters. An important factor in the conduct of the mail order branch, is the use of form letters. In a campaign intended to secure direct orders, the form letter takes the place of the personal salesman. The form letter presupposes a uniformity of conditions. It is written to appeal to certain desires of the recipient; its arguments are based on the supposition that the same desire exists in the minds of all to whom it is sent, and that the same arguments will cause its readers, as a class, to yield to those desires. The result of a form letter campaign depends on the extent to which the letter fulfills its mission in adapting itself to the conditions of the class to which it is sent — its adaptability to the mentality and 162 ADVERTISING AND SALES 37 environment of its readers. The same argument will not appeal to the mechanic, farmer, merchant, and banker. The failure of most form letter campaigns can be traced to one of two causes — failure to adapt the letter to existing conditions, or lack of judgment in selecting a list for a trial. The goods offered may be used by plumbers and lawyers, but the same letter should not be expected to pull with both classes. Like the selling talk of the personal salesman, the letter should be changed for each class. Other conditions, also, must be studied. Iowa may have har- vested a bumper crop, while Kansas suffers from a drought; mills in the Pittsburg district may be running overtime, while Buffalo is in the midst of local labor disturbances. All of these local conditions influence the results of the letter campaign. As to lists used for trials, the more usual mistake is in the use of too small a list. Some sales managers, who have mailing lists of from 25,000 to 100,000 names, profess to try out a. letter with a list of 300 to 500 names. A list of this size is not sufficient to give an actual test of the pulling power of any letter. Some of the most successful letter salesmen give it from their ex-perience that the very smallest list from which a safe test can be made is 1 ,000 names. Keying Form Letters. It is just as necessary to krij form letters as to key magazine ads. The key makes it possible to trace results. The question of keying is most important when a series of letters is used — ^which is true in most campaigns — for it then becomes neces- sary to check the returns from each letter in the series, ^^^len one letter only is sent to a given list, the replies received from that list can be safely credited to the letter. There are several methods of keying form letters, among which are the following: the reader may be recjuested to address his reply to a certain department; he may be offered a sample or some novelty; or the letter may be written in the first person singular so that replies will naturally be addressed to the writer. The writer confesses to a preference for the last named method. The average mail order buyer likes to feel that he is receiving per- sonal attention — that (here is someone in (he house (o whom he can write, instead of addressing (he house. A personal touch can be put into the letter signed by an individual that is impossible in a letter signed in the name of the house. 163 III 1 o (L 1 < 1- O J- n o w C5> ^ CM tn z llJ w N 1- W (0 a. w ID rr CM CO w CJ C\J w CD CM 1 m < "" Z ^ N "~ (D in ir ^ O CO u _ ID (D (M _ ~ O 0) CO N (0 in ^ o y u tf) D (S) H 1 CO CM It d y (D z d IS) _l J Q. (D 7 (ri r u or _l \ U 7 >; o n V- > o -I < LJ < 11 :> y u c> hi 8 ^ l-l L < i. T -i <| m o| z Q K __ 164 ADVERTISING AND SALES 39 There are those who contend that only the name of the house should be used, that the name of an individual should never be signed to a letter, and who have printed on their letter heads the phrase ; "Address all communications to the company, not to individuals." AMiile it is perfectly proper to use every legitimate means to keep the name of the house before the public, there is a good deal of senseless fear that the prestige of the house will be usurped by the individual. In some quarters this fear has resulted in the adoption of ridiculously extreme rules and regulations. One incident in the personal experience of the writer will serve to illustrate the point. Having occasion to request a favor from a certain manufacturer — a favor which would be granted, if at all, by the advertising manager — and knowing the advertising manager personally, he addressed the request to him, using his title in connection with the name of the firm. Somewhat surprising was the following letter, received a few days later : Dear Sir: We have your favor of the 12th, ad- dressed to our Mr. , and your request will receive the attention of the proper individual. Our method of handling correspond- ence is such that, to insure proper atten- tion, all communications should be ad- dressed to the company. We request that you observe this rule in the future. Yours truly, No more reason for the fear that the house will be injured by the personality of one of its correspondents can be seen, than that the personality of the salesman will have greater weight with cus- tomers than the reputation of the house. If the personality of an employe — be he a personal salesman or a correspondent — is worth anything in a business way, the benefit accrues to the house that em- ploys him. There is one other objection to the use of the name of the writer of the letter, and it comes from the United States Statute making it a criminal offense to open mail addressed to another. But this objection can be easily overcome; any emj)loye whose name Is used will sign an order authorizing the opening of letters addressed in his name, unless marked personal. 165 7 1 1 -) O > < 1 d ^ h < Q h Z -> <) 1 > 1 < d z u < o 1 \- z 1 j o >■ - (0 < ■ ■ "- u J o < z (t) < Q 1- Z C) > < o z. u h < Q 1- Z f) >■ < 1 o ^ 1 _J < 1- 166 ADVERTISING AND SALES 41 Form Letter Records. A copy of each form letter written should be kept permanently. The copies should be filed ni a manner that will make it easy to refer to them. For this purpose an arch file or binder is most satisfactory. The letters themselves may be punched for the file, or the loose-leaf scrapbook idea can be adopted, pasting several letters on one leaf. Each letter should be given a number for the purpose of identifica- tion, whether or not it appears on the letter itself. The copies should be arranged in the file in numerical order, but where there are several departments or divisions using form letters, they should be divided by departmental indexes. It is also well to keep a second copy of the letter with a sample of the enclosures, as the enclosures may have an important bearing on the results. These copies may be preserved in the manner sug- gested for filing copies of ads and printed matter. WTien a form letter is written, a record form, as shown in Fig. 21, should be started. This may be on a card or loose leaf; the latter is preferred on account of the larger space for the record. The head- ing shows the No. of the letter, the subject, name of the writer, its No. in the series to which it belongs — first, second, or third — the enclosures, and the names of any special lists used. The body of the form provides for a record of letters mailed during the year, with a monthly record of total costs. The sheets are arranged in the order of letter Nos., in a card file or a loose-leaf binder. The reverse of this record form is ruled, as shown in Fig. 22, to provide a record of sales resulting from the use of the letter. Sales can be entered daily or weekly, but the daily record is recom- mended. The methods of obtaining the details for these records is described later. FolIow=up Systems. A necessary and very important factor in the success of a business transacted through the mails, is the follow- up system. And in a business in which sales are made by personal salesmen, the follow-up is used for certain purposes, and is as impor- tant as though used to secure orders. To follow-up is to keep after, to keep in touch with, and to keep a certain subject before certain individuals. Whether used to secure 167 42 ADVERTISING AND SALES orders or make collections, the idea of the follow-up is the same, though it is better known as a system for promoting sales. The follow-up arises from the same necessity that compels the personal salesman to call on a prospective customer more than once — often many times — before the first order is secured, and continue to call to hold his trade. The follow-up simply makes use of letters and other literature to take the place of the personal salesman. INIechanically, the follow-up system is a system or method that insures the sending of the right literature at the right time. Letters — Fig. 23. Vertical File Drawer Equipped as a Tickler both form and special — catalogs, booklets, folders, circulars, and mailing cards are all used in the process of following up the pro- spective purchaser ; the automatic method of showing when each piece of literature in the series should be sent, is the follow-up system itself. Tickler Method. The simplest method of handling the follow- up system is to use a tickler in w^hich to file memoranda or corre- spondence by dates. A tickler consists of a file equipped with a se^ of indexes numbered from 1 to 31 to represent the days of the month. 168 ADVERTISING AND SALES 43 and 12 indexes printed with the name of the month. The monthly indexes are arranged in order, and the daily indexes are placed in front of the monthly Indexes in numerical sequence. The file may be a vertical correspondence file, a card tray, or a flat desk file. In using the tickler for a correspondence follow-up, letters are filed back of the index representing the day on which the subject is to receive attention. Each day the letters filed behind that day's index are removed, and after receiving attention, are filed ahead to the. next follow-up date. If it is desired to have a letter come up for attention in another than the current month, the day of the month is noted on the letter, and it is placed back of the monthly index. On the first of the month, the index for the previous month is placed at the back of the file, which brings the current month's index to the front. All papers that have been filed back of the monthly index are then distributed by dates. A correspondence file drawer, equipped as a tickler, is shown in Fig. 23. For a small amount of correspondence, the use of the tickler is very satisfactory, and it is also used to excellent advantage for keeping track of the many matters that require attention at a future date. A tickler should be included in the equipment of every office, no matter what the line of business. Card Follow-up. For most extensive follow-up systems, the card index is used, for the reason that a card is easy to handle, occupies but little space, and can be adapted to any classification desired. A card is used for each prospective customer, or name on the list to be followed up, and should bear the name and address and a brief his- tory of the efforts made to secure an order, or accomplish the object of the follow-up. In operating a follow-up system — especially if the object is to sell goods — the correspondent should have before him a history of the efforts previously made to secure an order. He should know what letters and other literature have been mailed just as the personal salesman knows what arguments he has used. When form letters have l)een used it is not ueccssMry to have ('()j)ies of the letters in each case, but thty should be identified by their numbers, or otherwise. Records of these letters, by date and number, can be made on a card, so that the card itself will give the correspondent a complete history 169 44 ADVERTISING AND SALES of the case. The correspondence — letters from the prospective cus- tomer and copies of special letters to him — can then be filed in the ret^ular wav, and is accessible at all times. The oldest method of operating the card follow-up is to use the tickler index in a card file. The follow-up is operated in exactly the same manner as described for the correspondence file tickler, except that the cards are filed ahead instead of the original correspondence. A typical follow-up card is shown in Fig. 24. At the head of the card is the name and address of the prospective customer, followed by the credit rating, the business, and the source from which the name Name. Rating Address Busineza Source Form Letter^ end Literature Special Letters \ No Date File No. Date File Date File Date FilQ. Fig. 24. Card Used for Follow-up was obtained — whether from advertising, a special list, or from a traveling salesman. The body of the card is ruled for a record of letters mailed, form and special letters separated. When a letter is sent the No. and date — if a form letter — is entered, and in the file column is noted the number of days the card is to be filed ahead — as 10 days or 30 days. If at the time specified, the next form letter in the series is to be sent, provided no response has been received, the No. should be noted on the next blank line in the No. column, so that the letter can be sent by a clerk, without consulting the sales- man. When the cards come from the file, those on which no form letter is indicated for the next follow-up should be referred to the correspond- 170 ADVERTISING AND SALES 45 ent. If he considers a special letter advisable, he should have all previous correspondence attached to the card, that he may know just what has been done to land the customer. Cross=Indexing the Chronological File. One of the disadvantages of the tickler or chronological index, described above, for a follow-up is the difficulty of locating a card, when the date under which it is filed is unknown. A letter may be written on June 10, and the card filed ahead to June 25; on June 16 a reply may be received which makes it necessary to find the follow-up card, but to do this it is necessary to look through all of the cards filed between June 16 and Town State. Firm Buyer Street Address Business Fig. 25. Follow-up Card with Alphabetical Tal) June 25. If the card is not found, the chances are that on the 25th a regular follow-up form letter, which will make the system appear ridiculous, will be sent. To so file the cards that any one can be found by name, without interference with the automatic features of the follow-up system, is an important consideration. This can be accomj)lislie(l by the use of a card like the one shown in Fig. 25. It will be noted that this card bears a small tab or j)roj('('lion, on wliicli is j)riiif<'d Ihc letter B. The.se tabs are cut g^. <>f die widlli of (lie ("inl aixl ;ir<' in (wcniy po.sitions acro.ss the card. Tliis allows for twciily siibdix i.sions of the alphabet, the A tab being in the first position, H in (lie .second, etc. 17) 46 ADVERTISING AND SALES In filling in a card, one bearing the letter corresponding with the first letter in the name of the correspondent is selected — a B card for Brown, an 5 card for Smith. Now since B is always printed on a tab in the second position, and this tab is always the same distance from the end of the card, when the cards are filed, all B tabs will be in a straight line from front to back of the drawer. No matter under what date it is filed, if Brown's card is wanted it will be found by looking through the row of B tabs in the second position from the left. Regardless of the number, all tabs printed f?TI 5 10 '5 [^ 25 30 Address Occup&t-ion Business Source Rating Letfers Letters Fig. 26. Follow-up Card with Movable Tab to Show Dates with the same letter are found in one row, making it possible to file cards by date and cross-index by name. Cross=Indexing the Alphabetical File. i\.n improvement over the cross-index of the tickler, described above, is the method of cross- indexing an alphabetical file in a manner to insure a follow-up on a specified date. A card without tabs, as shown in Fig. 26, is used. Across the top of the card is printed a series of numbers representing the days of the month. This may include all of the numbers, from 1 to 31, or the month may be divided into five day periods. In connection with this card a metal tab, which can be attached at will, is used. One of these tabs is placed over the number which represents the date on which it is to be followed up. The card is then filed, indexed by name. 172 ADVERTISING AND SALES 47 The numbers being printed in the same position on every card, all tabs placed over the same number will be in a direct line in the file. The cards to be removed for the follow-up on a certain date are those bearing tabs over the number representing that date. On June 20, for illustration, all cards with tabs over No. 20 are taken from the file. When letters have been written, the tabs are moved to the next follow-up date, and the cards returned to the file. This method of cross-indexing with movable tabs permits of the filing of the cards in any manner desired, with the knowledge that the follow-up date will be surely indicated. The tab method is l.i 3 4®6 7 a 9 10 .11 12 13.14- 15 16 17 18 19 20 21 22 "^ZA 25 26 27 28 29 30 Ian. Feb. Mch. Apr. May. June. July. Auq. Sep. Oct: Moi/. Dec. riame "' . - - Date Address •" Source Sales Fig. 27. Card for Combined Duily and Monthly Follow-up also used for a combination of daily and monthly index. On the card shown in Fig. 27, the names of the month are j)rinted imder the date. For a follow-up in a later month a colored tab is used to rep- resent the monthly index, while a l^lack tab represents the day of the month. To illustrate, we will suppose that the card is placed in the file on Oct .5 and the next follow-up date is Nov. 10; a black tab is placed over No. 10, and a red tal) over No. 2. 'i1ic card will not be disturbed on Oct. 10, as the red tab indicates that it is to be re- moved in a later month, but on Nov. 1, the red tab is removed from the card, and the black tab will bring it to notice on Nov. 10. Lists of Customers. Every concern whether it secures business through the mails, by means of personal salesmen, or both, should 173 4S ADVERTISING AND SALES linve a list of its customers properly classified and arranged for easy reference. This should be something more than a list of names and addresses; certain essential facts about each customer — such as his liusiness, the name of the buyer, the credit rating, and amount of purchases — should be recorded. All of this information can be placed at the head of the ledger sheet, but it never should be necessary for another department to consult the records of the accounting department for information needed daily. The information given by the customers' list is of Pu rchg 3 Purchases C/sss A C/3SS B C/gss C C/3SS D Fig. 30. Card for a Classifled Record of Purchases customer furnishes an excellent guide for further circularizing. On such records it is not necessary to show the amounts of purchases — the class is the important item. Fig. 30 shows a card used for a record of this kind. The goods are divided into four classes, indicated by the letters at the head of the columns. When the first sale is made, the name and address are entered on one of these cards, and the date indicated in the jiroper column. A movable tab is placed on (he uj)per edge of (l)e card, over the letter that indicates the class, and the card is filed. As subsequent purchases are made the dates are entered, and if the purchase includes another class of goods, another tab is placed on the card. In time, one card may bear four tabs, indicating that the customer has bought goods in all four classes. 177 52 ADVERTISING AND SALES AMien new goods are received, they can be brought to the notice of those customers whose purchases in(Hcate that they are most Hkely to be interested, without disturbing the other cards. Indexing Customers' Cards. The best manner of indexing customers' and prospects' cards depends on the size of the list. A Ust of a few hundred names is best indexed alpliabetically. A large list should be indexed geographically — according to location. The geographical index consists of index cards printed with the names of the states, and sets of indexes bearing the names of the cities and towns in the different states. The state indexes are arranged in alphabetical order, and back of these the tow^n indexes are filed alphabetically. The cards are filed back of the town in- dexes, these also being arranged alphabetically. Wlien the number of names in a city is large, the cards are further subdivided by alpha- betical indexes. In states where the list is small, an alphabetical ndex can be substituted for the town index, the letters representing towns; names of customers in Alton w^ould be filed back of the A index, those in Springfield, back of the S index. An advantage of the geographical index is that a definite terri- tory can be covered by the letter salesman, or the personal salesman can go over the list and find out the condition of the trade in his own territory. PERSONAL SALESMANSHIP DIVISION Though the volume of business secured through the medium of the mails is increasing at a rapid rate, the bulk of the business of the country is done by personal salesmen. Leaving out of the discussion the question of retail salesman- ship, the personal salesmanship plan — the employment of traveling salesmen — is the least expensive method of seUing goods at whole- sale. To sell certain low-priced specialties to consumers, the mail order plan is sometimes best, for the reason that it is necessary to reach a large number of possible buyers to find a few actual buyers. This can be done at less expense by letters than by traveling salesmen. More is being learned about how to use the mails to promote business — ^how to make the follow-up system an assistant to the salesmen. The manufacturer whose goods are sold to the trade, by salesmen, is learning how to build up his own business by assist- 178 ADVERTISING AND SALES 53 «• ing the dealer to sell his goods. He advertises to interest the con- sumer, he follows up the consumer and the dealer, and in the end assists his own salesman to sell more goods. Much good literature has been written on the subject of sales- manship, plenty of advice about being systematic in his work has been given the traveling man, but very little has been written on the subject of making sales records and reports of assistance to both the house and the salesman. Some suggestions on this phase of the question are made in this discussion. Routing Salesmen. How to route his salesmen to the best ad- vantage is one of the important problems of the sales manager. He must first decide how often the territory should be covered, then the extent of the territory he will attempt to work, and the num- ber of men required. WTien this has been done, the territory of each man must be laid out, and a route which will enable him to cover the territory with the smallest mileage, must be selected. The territory should not be larger than a man can cover in a specified time, but large enough to require all of his time. Map and Tack System. To know just where .each man is at all times — to be able to locate Smith or Brown instantly, every day — is very necessary. Perhaps the best method of doing this is by the use of what is known as the map and tack system. State maps, printed in colors, are fastened in the bottoms of shallow drawers, a drawer for each state. Sharp pointed tacks, with heads covered with silk in a great variety of colors, are used for various classifications, and colored silk cords are used to indicate routes and territory boundaries. To each salesman is assigned a specific color, by which he is always known. Tacks with heads of the proper colors are placed in the map at the towns on his territory. A cord is then strung from tack to tack in the order in which he will cover the territory. When the salesman leaves a town the cord is removed from that tack, coiled up, and placed over the tack at the next town. The tack at the end of the cord always shows the present location of the salesman. Fig. 31 illustrates a map with cords — represented by the heavy lines — indicating salesmen's routes. Other tacks, with heads of a different color or coiled wire heads foi holding labels, are used to indicate special facts — as, competition 179 W-ro-T C^ , "^l^f^b^M; I. p!©^^:^^^;_ "V 'eSi • ;. -isjii-pay City // l::... .■■:^'^'-/- /40 ';S .\t8-,/: ;. /| / 5^-Wift§© '^^••!^^ ^^^,. 0^ K^ I.;:;^'^^^ Fig. 31. Map Showing Operation of Map and Tack System Courtesy Browne-Morse Company 180 ADVERTISING AND SALES 55 strong, customer ready to buy, claim to be adjusted, or collections to be made. These are placed at the side of the salesman's tacks and are a reminder to write to him, about the special matter, at that town. If an inquiry is received or a good prospect developed, in some small town not regularly visited by any salesman, a special tack is placed in the map at that point. A cord of special color is then strung from this tack to the nearest stopping point on any salesman's route. This is a reminder to write the salesman instructing him to make a special trip to this point outside of his regular territory. Tmi/n n^to My route for thz coming u/eeA u/i/l be as follows. To wn Hof-e/ Sun Hon. Tubs. Wed. Thur Fri. Sat. .'^^lesman 1 Fig. 32. Traveler's Route Card Route Cards. It is not always advisable to attempt to lay out the entire route of a salesman in advance, neither is it always possible for him to make the towns in the time calculated. It is wise, there- fore, to require the salesman to keep the house constantly advised about his stopping places. AVhen the route is a long one, a route card, as shown in Fig. 32, should be mailed to the house weekly. The card should be 3X5 inches in size, to fit (he stanthird size card drawer. Route cards of all salesmen, whether there are live or fifty, can then be kept in a card tray in the manager's desk. Reports of Calls. The successful sales manager of the modern type is learning to get more and more business from his territory; he is not satisfied to show a large volume of business in a large terri- tory, unless he feels that he has secured all o!" (he business possible 181 56 ADVERTISING AND SALES from every town. If Baker sells two dealers in Peoria, well and good; but why did he fail to sell the other five dealers in the same line? And it is not in a fault-finding spirit that he asks why; if he knew why, perhaps he and the salesman could together work out a plan that would solve the difficulty and secure from one to five new customers. The salesman knows better than anyone else why he has failed to sell certain dealers; he is the man who becomes familiar wuth the actual conditions in each town — what competitors' goods are most popular, reasons for local business depression such as crop failures Tou/n Siilasm^n Sti^fe. Dafe of Reporl" riame of Dejklcr Amount" of Bill If Unable fo 5ell 5fAfe Why Whose Line is he Hiindling WhJit aire- our Prospccfs 1 a 3 4- 5 6 7 Rem2irks - Fig. 33. Salesman's Report of Calls in Each Town or labor disturbances, and any causes for dissatisfaction w-ith the goods or business methods of his own house. Possibly the sales manager is not in a position to change conditions, but certainly, he cannot solve the difficulties unless be know^s what they are. The salesman should, therefore, assume that there is at least a chance that he will receive assistance by keeping the house posted on every detail that might affect his trade. The only way in which practical results can be secured is for the salesman to make a report on every call made, in every town on 182 ADVERTISING AND SALES 57 his route. A form of report card is shown in Fig. 33. This is in- tended for a brief report of calls in one town. Space is provided for reports of seven calls, but if there is a larger number of dealers, more than one card is used. On the back of the card, a full line is allowed to each dealer for remarks. The salesman is instructed to mail one of these cards, in an envelope specially provided for the purpose, from each town on his route. When received, the sales manager examines them, makes his notations, and files them according to salesmen's routes. AMien the salesman is next in the house the sales manager goes over the cards with him, and they discuss each case individually. Forms of report cards differ, naturally, according to the busi- ness. In some lines more specific information is needed in each case to enable the sales manager to judge intelligently the chances for future business. Fig. 34 represents a card used in one business for a specific report on each call made. The form shown in Fig. 35 provides for a brief report including suggestions regarding the date of the next call. Follow=up of Dealers and Salesmen. In the modern adver- tising campaigns cf manufacturers in many lines, an effort is made to secure inquiries from consumers, though the goods are sold through dealers only. The inquiry is usually secured by a promise of a free sample, a handsome catalog, or other piece of printed matter. These inquiries should always be referred to the nearest dealer, and in answering the inquiry, the name and address of the dealer should be given. In addition to the inquiries received from adver- tising, manufacturers in certain lines invite dealers to send them the names of good prospects. One of the large paint manufacturers asks the dealer to send two lists — one of people who are talking of painting their buildings, one of people whose l)uildings need painting. The manufacturer of a widely advertised washing machine asks for the names of all possible buyers to whom the dealer has talked washing machines, without making a sale. The object of all this is to enable (he manufacturer to assist (he dealer to sell more goods of his manufacture. Sometimes the margin of profit (o flie manufacturer is such that he can aflonl to maintain an extensive follow-up on the names, and even send one of his sales- men to assist the dealer to close the sale. 183 58 ADVERTISING AND SALES Tlie manufacturers of one of the popular pianos has secured excellent results from the operation of such a system. In this system, MUST B£ MAILED DAILY Ja/e-sman^ . Dafe . Cdl/ed on. Cify „ 5/zn ouf-of-fou/nc^/fsaromsdii. Give name of any peop/e , no inaffer urfiaf posifion ffiey fio/cf, u/fio baue been of assiifance or can be in fhe fufurz. Fig. 35. Salesman's Report of Call and Follow-up the card shown in Fig. 36 is used to follow-up both the inquirer and the dealer. It will be noted that columns are provided for a record of the postage on every letter or piece of printed matter mailed. 184 ADVERTISING AND SALES 59 The prospect receives a letter once a montli, while once in two months a letter is written to the dealer asking for a report. With the first letter to the prospect, a postal card acknowledg- ment form is enclosed. On the postal, space is provided for names, which the prospect is asked to fill in with names of friends who might be interested in pianos. By this simple expedient, an original in- quiry is often added to with a half-dozen new names. t Z. 3 4- S 6 7 8 a /o II la 13 14 IS 16 17 la iseozi zz 23 24 as Z6 z? aa Z9 3o si .'itreet ^n-" '^t^+o Dealer 1 To Inquirer To Dealer Form ^ent Post Replies Form Sent Post Replies Fig. 30. Card Used for Follow-up of Dealer ami Inuuirer With the first letter to the prospect, there is also enclosed a formal letter of introduction to the dealer. This letter, which is addressed to the dealer, reads as follows : The bearer of this letter wishes to in- spect our pianos. We shall esteem it a favor if you will kindly explain the merits of these instruments and give an opportunity to ihorouf^ldy examine them. ResjicctfuUy, At the time of referring the iiK|uiry to tlie dealer, flic Maiik shown in Fig. 37 is filled in and mailed to the salesman in whose ter- 185 m ADVERTISING AND SALES ritorv the dealer is located. The lower half of the blank is for the salesman's rej)ort to the house. Salesman's Expense Accounts. Detailed expense accounts should he mailed to the house weekly. A conveniently arranged form, with columns, for regular expense items such as hotel, R. R. fare, livery, etc., will greatly assist the salesman in making up his accounts. Such a form is shown in Fig. 38. This is a card 3" X 5" A DV&RTI51N6 DEPARTMENT To We hsue rece/crec/ an inquiry from of. regard to our pianoSj and have referred if" to When you visit this dealer please, investigate urhat action /le 13 taking to interest this prospect, and report to us on follou/ing ■ blank. The. Cable CoMPAn-y 5ALE5MAn'S REPORT On inquiry from Referred to . Salesman Fig. 37. Notice of Inquiry Sent to Salesman, with Blank for His Report in size, punched to fit a small ring binder small enough to be carried in the pocket. Both sides of the card are used, providing for a record of expenses covering a period of one week. SALES RECORDS Regardless of the nature of the business, whether sales are made through the mail, by traveling salesmen, or resident agents, sum- 186 ADVERTISING AND SALES 61 raaries of sales from day to day, supply much valuable information to the sales manager. Sales summaries which show the amount of sales each day and month, are the working charts of the sales manager. It should be remembered that these statistics are chiefly valuable for comparative purposes, but to insure comparisons of value, the statistics must be compiled in proper form. It should be possible to compare, not alone total sales, but the sales of each man in different periods, the sales of one man with those of another, the sales in differ- ent territories, the sales of difFerent departments, the sales by mail with those of personal salesmen. /^ WceKly Expense Statement /~\ Week Beqinninq i90 N&mc Pd^id Vo. Da^y Milezige Tou/ns Visited Hotel R.R.FArc Liucry Miscl, Total 5unday Mondaiy Tuesday Fig. 38. Traveler's Weekly Statement of E.\ik>uscs Daily Sales Records. The daily record of sales should show the sales of each department, the source of the sales, and the pro- portion of cash and credit sales. These should also be divided as to wholesale and retail. A convenient form is shown in Fig. 39. This is a sheet punched for a loose-leaf Ijook, and (here sliould be as many copies as there are men in the organization \\h() arc (hrectly interested. Besides the sales manager, the general manager, (he advertising manager, and the comptroller are all directly interested. By using carbon paper as many copies as needed can be made at one writing. 187 o Dailv .Sales Rr PORT . — l'"^ Tallied Bu _ _ 1 Depart ment or Cl&ss Wholeszkia Retziil Grand Total Mail Order Sziiesma^n Total Wholesale Tota.1 Retail Customers Old Customers Neu/ Customers Old Customers City M2.il Order ' — 1 ' — ' ^ — i L^ — ■' ^^^^ — ^ o " To1-iil5 Fig. 39. Daily Tabulation of Sales by Departments o M ONTHI Y 5iALFS Record 9_ Day Wholesale Reti.ll Grand Total Mail Order Salesman Totil Wholasala TotAl Retail rieof CostomGrs ■ Old Customers hew Customers Old Customers City Mail Order 1 a 3 -* S 6 1 L -J 1 1 1 1 — 1 — ' ' 1 ' _. 1 ■ 1 1 r— — -^ r 1 1 — ■ — 1 -J o 26 37 2 8 29 30 31 Totalis _ _J u Fig. 40. Mouthlj Recapitulation of Daily Sales Reports 188 ADVERTISING AND SALES 63 Monthly Sales Records. Fig. 40 represents a sales sheet arranged for a monthly summary, the statistics being obtained from the daily records. The monthly summary follows the same lines as the daily record, except that sales are not divided by departments. WTiere the business is divided into several departments one of these monthly summary sheets can be used for each department. * These daily and monthly- summaries pro- vide for a comparison of wholesale with retail, mail order with personal salesmen, and depart- ments. If there is a gain in one department and a loss in another, or a fluc- tuation in total sales, these summaries point out the source, showing where greater efforts are needed and where praise is deserved. Salesmen's Records. ^Yhile the sale summaries described afford many valuable comparisons, they do not provide a classification that will indicate the value of each salesman. There should Fiir. 41. Daily and Monthly Record of a Salesman , i i • ^i be a record showuig the volume of business of each num. The form siiown in Fig. 41 siiows a card used for a daily and monthly record of one salesman. The form might be elaborated to show cost of goods, salary, expenses, gross and net profits; but the tabulating of this information is more properly the work of the statistical dej)artment. These cards should be filed alphabetically by name of the sales- man, and divided according to states. They will then show the sales of each man and in each territory. Nonfh DAILY RECORD Day Amouni- Day Amount 1 16 z 1 7 5 1 8 -1 1 9 5 £0 « El T 2E 8 23 9 24 iO 25 1 1 26 12 27 13 28 14 29 I 5 30 3 1 1 189 64 ADVERTISING AND SALES For a business in which goods are sold by resident agents, a card similar to the one shown in Fig. 42 should be used. The upper half of the card provides for the recording of certain essential information, while the lower half is used to record sales. Toix/n Countti State Population Name Business Territory Aqeni- for Ratinq Disc. ■■-^^>,-- RECORD OFSALE.S Data Style Pnce Date Style Price Date Style Price • ZTTI U Fig. 42. Record of Sales by an Agent or Dealer 190 CREDITS AND COLLECTIONS THE CREDIT MAN Acknowledged specialists may be employed in every branch of an enterprise, the shrewdest brains may be engaged in buying, pro- ducing, and selling, but the final conservator of the business is the credit man; others may be profit makers, but he is the profit saver in every commercial organization. He is on guard constantly — always on the lookout for the slightest sign of danger, ever ready to take prompt and vigorous action to avert disaster to his house or to lend a helping hand to a customer. His duties make him the most misunderstood man in the entire organiza- tion. He is thorough, methodical, painstaking, a keen student of human nature, possessing faith in the inherent honesty of his fellow men. The insistent search for facts that he demands, may cause him to be regarded as an inquisitive busybody by the very customer whom he desires most to help; as a carping critic, by the salesman of his own house. Through it all he remains faithful to his trust, watchful of the interests of his house, and has the satisfaction of knowing that in spite of his mistakes but a remarkably small jjart of his credits prove bad — that where his conservatism has lost hundreds in trade it has prevented the loss of thousands. On no man in the organization is there such tremendous j)rcssure brought to bear to secure favors; on no man do the consequences of his own mistakes come back so surely. The credit man must be firm, and, while availing liimself of every reliable source of informa- tion, he must stick to his decisions, for he is expected to collect from those to whom he has extended credit. Every other man has a loop- hole through which he may escape criticism; if a customer is lost because goods are unsatisfactory, it may be "up to" the salesman, the shipping clerk, the superintendent, a foreman, or even an ob- 191 2 THE CREDIT ORGANIZATION scure mechanic. The credit man has no one on whom he can place the bhime; if a customer fails to pay, no reason short of an earth- quake will relieve the credit man of the responsibility. So much for the credit man. Now for a discussion of the work he is expected to do, the machinery of his office, and his methods of operation — for the writer disclaims any intention of attempting to teach the student how to become a credit man. INFORMATION REQUIRED The most important function of the credit man is the determining of the credit risk — the amount of credit that can safely be extended to each individual. When he consents to the delivery of goods to be paid for at a future date, he is loaning his firm's money. Before credit is granted extreme care must be exercised in determining the ability of the purchaser to pay, or that he will be able to pay when the bill is due. After necessary precautions against assuming too great a risk have been taken, a further insurance against loss is included in the amount added to cost — a certain per cent of the profit is expected to offset the risk. In determining the credit risk, different classes of information are necessary in different lines of business. While certain specific information about individual applicants for credit is necessary, the subject may be divided into two general classes — wholesale and retail. Under the head of wholesale, is included information about all business concerns, whether a single proprietor, a partnership, or a corporation. In a general way also, the same information is required in respect to these concerns by the banker, the manufacturer, the jobber, and the wholesaler. Under the head of retail, is included the transactions of a retailer with his customers, who may be regarded as individuals. Leading authorities on the subject of credit place the factors which determine the credit risk in two classes — the man and the business. Under the first heading is considered the business morals of the debtor and his ability in, and familiarity with the business in which he is engaged. The second heading — the business — is con- sidered from the financial standpoint, divided as to its assets and liabilities, and the profits or losses made in its operation. But as to the relative importance of the two principal factors — the man and the business — authorities differ. In his valuable con- 192 THE CREDIT ORGANIZATION 3 tribution to the literature of credits, Mr. E. St. Elmo I^ewis takes the stand that the man — his character — should be considered secondary. To quote from Mr. Lewis' book: If goods are the basis of all credit, character of the owner is and should be an after consideration. The very first question any credit man should ask, is, can he pay? The question of a man's ability to pay is becoming of greater ease of solution. The question of the intention or inclination to pay must always be shrouded in the nebuliB of psychological theory. What is the applicant worth? is the cruical test. Then we shall test him by another. What sort of a man is he? Do we buy a law suit when we sell him goods? How much must we add for moral insurance against loss? Character is of vital importance in small concerns; of vital importance in concerns doing a large business on small capital, and it becomes of less importance as we progress into the field of corporations. In direct contrast to this contention are the views of Mr. Ernest Reckitt, as expressed in an address delivered before an organization of bank clerks. After naming the factors to be considered by the banker before extending credit, he said : You will note that in enumerating these factors I place first, and pur- posely so, "The Man Himself," and I believe I am correct in stating that bankers are now placing more stress upon this point than ever before. The man of good character and intelligence, who is full of energy and perseverance, will not find it difficult to obtain a reasonable line of credit with his bankers, while the man who is deficient in those qualities, W'hatever his reputed wealth may be, will be looked upon with suspicion. It therefore behooves you to become students of human character as well as students of banking, if you are to fill the highest positions within your reach. These comments may be out of the range proposed by this paper, but I feel I cannot leave this topic without giving you an illustration of the point I wish to emphasize, namely: That it is the character of the man, or men, in a business, which must be first considered before the banker makes a loan. Some time ago, in a certain city, there was a large corporation reputed to be very wealthy, whose balance-sheets were beautiful to behold. Their business Ijeing large, they were borrowers of some of the largest banking institutions of their city. Apfjarently without'any warning the corporation was declared bankrupt and went into the hands of a receiver. Later, investigation showed that the balance-sheet was misleading; some people might have called it a worse name, for the assets had been overstated and tlie lial)ilities understated. I happened to be in that city at the time of this failure, and, meeting a director of one of the banks with whom I was well acfpiainted, I inquired if his bank had been caught. "No," said he, "they did try and open an account with us some time ago with the object of becoming borrowers, but we turned them down." I asked him what reasons he and his colleagues on the dircctorato 193 4 THE CREDIT ORGANIZATION had for such action at a time when this corporation was supposed to be so prosperous. "Well," said my friend, "some time ago it came to my knowl- edge that this corporation paid no water tax and that its personal j)roperty tax was a mere bagatelle to what it should have been, and I figured out that the officers of a corporation that would be guilty of petty bribery would not be good customers for our bank." So it will be seen that a knowledge of the business morals of the men in your community and a high ideal, on your part, of what constitutes good business morals is a most essential quality in the make-up of a banker, and that it was these factors that enabled the bank of which rtiy friend was a director to escape what otherwise would have been a bad debt. Financial Statements. Without attempting to decide the rela- tive importance of the two principal factors, it can safely be stated that one of the first steps to be taken by the credit man is to secure a financial statement from the applicant. And the character of the statement may serve as a guide in determining the character of the man with whom he has to deal. Most business men are willing to comply with any reasonable request relative to their financial standing, when applying for credit. Until recently, the average man had objected to giving out such statements, except to his bankers, but with the more universal de- mands for such statements has come a change, and now a statement of some sort is almost always obtainable. The form of statements used by banks differ somewhat from that used by manufacturers and jobbers, and, while it differs slightly as between banks, and also as to whether the borrower is an individ- ual, a partnership, or a corporation, in general the statement re- quired follows the lines of the form shown in Fig. 1. This statement is signed, in the name of the firm by a member, in the case of a part- nership; and in the name of the company by one of its oflBcers, in the case of a corporation. A statement in the same form gives all of the information of a financial nature required by the manufacturer or merchant. Analysis of the Statement. Of equal importance with the statement is the ability to read it — to correctly interpret its real meaning. This calls for a careful analysis of the several items of which it is composed. To make a correct analysis means that the credit man must have a general knowledge of the business in which the one asking for credit is engaged. The banker must know, for example, whether the season is one in which more capital is likely 194 THE CREDIT ORGANIZATION to be needed in the trade of the borrower, or one in which he should be Hquidating his indebtedness. So important is this phase of the question that some of the larger banks have adopted the plan of assigning requests for loans in dif- EC Ik - 190 .ESO„«C« DolUxs OMU Ma.„.,TlE, «^ c-ll Cuh on htoa or in Bank For Merch»B(JiM--Bive name— not doe Slock of M«Ch.=(li« on h.oa »t ..!« Not., ool dut, .ecurca For Mcrcbuidi*e p&At doe Notf> past due. aecured To Not,, uosecutea not daj Notes uDsecured past dae Account, uot due Account, due and not &0 day. put daa Account, ove, 60 daj.pa.! due For Borrowed Money— Rile of lot. piid Store Buildine at value t Dne Due from partners or atockhotjer. « Dne Other pereoaal property— dcKribe It AaioQi^t .ecured S Cbaltel Mortgage* i Upon what property given Real Estate, market .alue. give name ol per.o.1 Wheo due holding tiUe Mortgage, on Real C.tate — stale incumbrance on each piece— when dae Rent of Store per yetr 1 Annual Sale. t Amonnt of past due note. Uome.tead. at tralue— state in *vb9«e name Amount o„n« on judgement note. Are you .urety on note, or bood.7 Confidential, and oHer deMI not Included tn.urance— Stat, on what property placed add above References: oamc. DI companle. t • TOTAL ASSETS TOTAL LIABILITIES OF HVERY KIND NtT ASSETS Bu.inM. Nsntr...! 1 bxirtd St P.nnrr. in lull ] will ftotif; you at once. I'iK- 1. ('il.stonicr'.s l''iii;iiii'ial Stiilciia'lit ferent busine.s.ses to different officers. One ni;iii will invcsligute real estate securities, one, applications from board of Inidc houses, another handles applications from packing houses, others look after 195 6 THE (TvKDTT ORGAXTZATION (he steel, building, jobbing, and manufacturing enterprises. Each man is a specialist, making a special study of conditions in the busi- ness to which he is assigned. In making an analysis of a statement, each item must be taken up separately and considered with respect to its relationship to other items, and its bearing on the statement as a whole. Cosh on Hand. The cash on hand should be consistent with the needs of the business, and, if listed separately, the cash in office should never be a large sum. There is seldom any good reason why cash should not be deposited daily. The banker will find it necessary to carefully scrutinize the amount in bank, particularly if the borrower claims to deposit in no other bank. Merchandise. This item is always a somewhat uncertain quan- tity; often an estimate pure and simple, and the debtor is unlikely to make his estimate too low. In the absence of provable figures, it is necessary for the credit man to apply his knowledge of the busi- ness. Is the stock larger than should be required? Is it too low to enable the debtor to keep pace with his competitors? Or, if a manu- facturing business, how much is raw material and how much finished goods? One of the important factors in making an analysis of this item is a knowledge of the accounting methods of the debtor. Does he keep stock records, or if not, is his stock well cared for and stored in a manner to permit of a reasonably accurate estimate? On the latter point, reports of the observation of salesmen, referred to later on, have an important bearing. Bills Receivable. On the statement form shown, this item is divided as to notes, secured and unsecured, not due and past due. To state that the amount of bills receivable is so much is one thing, to state the amount not due, is quite another. Any considerable amount of unsecured and past due paper indicates lax methods in the debtor's own credit department. Accounts Receivable. This item is divided as to accounts less than GO days past due and accounts more than 60 days past due. These items require the same close scrutiny as bills receivable. The two items — bills and accounts receivable — should bear a reasonably constant ratio to the amount of sales. Any unusual increase in the percentage of book debts to sales calls for careful 196 THE CREDIT ORGANIZATION 7 scrutiny, and leads to one of three conclusions: that trade conditions are bad, that the credit department has been lax, or that the amount is overstated. The first of these conclusions is supported or rejected by the credit man's knowledge of financial conditions in general, and of con- ditions in the particular trade of the debtor. During a financial panic, or in a season following crop failures, it is to be expected that book debts will be greater in amount than in ordinary times. In the event of the third conclusion, it is time for a careful investigation. As a rule, the investigation will be productive of best results if an examination of the books by a public accountant is included. Due from StockJiolders. This is an item which must be care- fully studied. Who are the stockholders or partners who own the firm, and for what? What is their financial responsibility? Sometimes, stockholders whose entire fortunes are invested in a corporation are found to be debtors to the same corporation for borrowed money. Due for Merchandise. This item is divided as to accounts not due and past due. It should be carefully compared with the same item in statements furnished in the past. An increase may or may not be due to natural causes such as the requirements of the trade during a particular season. Due for Borrowed Money. Any increase in this item should be offset by an increase in assets, or a decrease in other liabilities. Liability as Surety. This is an item of more importance than is generally accorded to it. True, the liability is a contingent one, but many a man has been forced into bankruptcy by the failure of another, for w'hom he had become endorser. Another item which should in the opinion of tlie writer appear among the liabilities, is discounted paper. When a man discounts the paper of a customer, received in the course of business, he assumes a liability for the amount, if not paid at maturity. True, the liability is contingent, but a liability nevertheless. The extent of llic lia- bility depends on the prosperity of his own customers and the care which he has exercised in acce{)ting their paj)er. Information for Retailers. The information available for tlie retailer is of a very different class. Here, the factor, the man himself, plays a more important part. The retailer is obliged to depend more 197 8 THE CREDIT ORGANIZATION larfjely on his personal knowledge and the general reputation of his customer. Tile city retailer, for instance, needs to know where the jnan works, his salary, his reputation for paying others — his landlord, grocer, and butcher — and something about his personal habits and general reputation. How long has he been in his present position? Does he make frequent changes? Does he own a home? What rent does he pay? Any other wage earner in the family? These are some of the questions, the answers to which will assist in determining the credit risk. The country retailer needs other information about his cus- tomers. As a rule, he can answer all of the questions asked by the city retailer in respect to his own customers. He is more intimately acquainted with his customers; he has a better opportunity to learn their characteristics and habits, than the city retailer. The country retailer has another advantage, in that a closer bond of friendship exists between him and his neighbor merchants. The interests of city merchants are no less common, but distances separating them make an interchange of views more difficult. About his country customers — the farmers — the retailer re- quires still different information. Besides full information about the real estate owned, and mortgages given, he needs to know some- thing about the man himself. Does he market his crops early, or is he a speculator — always holding for possible higher prices? Is the farm well kept up? Are the implements properly housed, or left outside at the mercy of the elements? Does he keep his live stock in good condition, and how much does he feed for market? Is he thrifty or shiftless? Only by personal contact can these things be learned. The country merchant who keeps in closest touch with his farmer cus- tomers — sympathizing with them in their misfortunes and rejoicing in their prosperity — is usually the most successful. As one country 198 THE CREDIT ORGANIZATION 9 merchant puts it, he must act as a general advisor, and help them bear their very aches and pains. SOURCES OF INFORMATION The usual sources of credit information are the mercantile agencies, reports from local correspondents, reports from traveling salesmen, and merchants' associations or credit reporting agencies. Mercantile Agencies. Of these sources, perhaps the best known and most widely used by manufacturers and jobbers, is the mercantile agency. The mercantile agency is the outgrowth of a necessity. About the year 1840, a few New York merchants formed an associa- tion for the interchange of credit information. Later, this became a business conducted by individuals who charged a small fee for written reports. The business has grown to such proportions that a single agency requires about 200 offices, located in the principal cities throughout the world. In the territory of each office, which is presided over by a manager, correspondents are employed, and at certain seasons country reporters traverse every district, gathering data to be for- warded to the branch offices. Every court house in the United States has its paid correspondent, who promptly reports any action — as the filing of suits, recording of mortgages, or entering of judg- ments — that might affect the credit risk of any business man in the country. Some idea of the magnitude of the business, and the task of gathering statistics, can be gained when it is considered that the books of a single agency contain the names and ratings of about 1,500,000 persons. About each of these individuals, the latest data collected by the reporters is on file in the various branch offices. Delays in securing information is one of the most common com- plaints against the agency service, but the service is probably as prompt as can be expected Suppose a recjuest for a special report is received this morning. First, the information on file is copied, and proofread to guard against errors This is sent to (ho .snl)scril)cr, but if it is not of a recent date he is advised that further information will be forwarded. Or, there may be no data on file, in which event a reporter is assigned to the case. lie may be ol)liged to make several calls before finding his man, and when found, the man may be rcluc- 199 10 TTTF, (TxEDlT OKGAXIZATION tiuit about iiiviiii; information. If real estate is listed, the real estate man must look uj) tlio title and mort^'age records. Thus, two or three days may elapse before it is possible to furnish the report. Some complaint is heard that reports furnished by the agencies are not sufficiently specific — which is probably true in many cases — but it is often quite difficult to obtain information on which positive statements can be based. On the whole, the service of the agencies is of very great value to the subscriber. As to its defects, the best way to overcome them is for the wholesaler to establish a credit organization of his own, to supplement the service of the agency. Local Correspondents. If the matter is properly handled, much valuable information can be secured from local correspondents. The banker, or a local attorney, is in a position to make confidential reports on local merchants. In fact, the agencies secure much of their information from this very source. But, in establishing local correspondents, the exercise of good judgment is necessary. The local attorney should not be expected to furnish information without pay, or to go into details that would not be asked of an agency charging $100.00 a year for the service. An attorney has favored us with a blank sent out by one whole- sale house, on which he is asked to make a complete report. Among other information requested, the blank calls for the value of mer- chandise, realty, cash, total worth, liabilities, and numerous references to his character, habits, etc. Following this statement is the question, " if not paid, can you collect?" Here is a very complete statement, to compile which would require several hours' research, but without a single suggestion that the attorney will receive pay. And then he is asked if he can collect, after the house has exhausted all usual methods. A certain other concern, when opening new territory, writes to a local attorney telling him they are entering the field ; that they will require information from time to time, for which they expect to pay a reasonable fee; and ask if he is in a position to represent them in this capacity. At the same time the attorney is told that he will receive for collection any accounts on which such action may be necessary. When a special report is desired, the blank shown in Fig. 2 is sent. The local correspondent is expected to give as full information as possible, for which he is paid prompdy. 200 THE CREDIT ORGANIZATION 11 In this way, excellent results are secured. There is some ques- tion about the advisability of leaving the amount of the fee to the correspondent. A better plan is to have the fee to be paid for all ordinary reports decided in advance, extra compensation to be allowed in special cases. The average country attorney will furnish an intelligent report for two dollars — a low price for reliable information. Dear Sir- P/ease make ffm fo//ou/'ing re-porf- prompf-fy, snd senij us 6t// for your -seririces Yours f-rulu, ,, _ W/i.sori Company. -Firm /^smes. . Partners .Est (y<3/ue of Mdse. Rsa/fy .Encumbrance on Rea/fy . Cfiaracfer f/abifs . /s fie good for On Time ^ . Re mark s Sign. Fig. 2. Local Correspondents' Report Hlank Traveling Salesmen. Certain information about the business and general reputation of a customer can best be obtaiued through the salesmen of the house. They are the men who conic in direct con- tact with the customers, acquiring an intimate knowledge of each. The average salesman objects to making out lengthy reports, but if approached in the right spirit, will give the credit man the benefit of his observations. The salesman's judgment is scarcely to be relied upon in the matter of the financial stiuiding of a custonier — his anxiety to sell goods makes him too ()])tiinistic bul he is probably the best judge of the character and business ability of ;i rn;in on whom he is calling regularly. 201 12 THE CREDIT ORGANIZATION Frequently a spirit of antagonism to the credit department exists among the salesmen. This condition indicates a decided lack of that cooperation so necessary to the success of any business. The credit man who possesses tact can overcome this antagonism, if he will but drop his cold-blooded attitude and meet the salesmen on a friendly basis. If he will cultivate their friendship, the salesmen will respond with information of great value to him. Naturally the information secured from a salesman differs from that received from other sources. About the class of information that can be expected is provided in the blank shown in Fig. 3. This can be printed on a standard size card. A<^dress Det-& _ /s />i-5 du^inzss prosperous? Grour/ng/'. S/-OCA u/e// se/ectec/ ? We// /^ept/' Ouer or under-5rocKe(/ ? Wou^: Credit limit $ Terms Refmed Oil lia-^nlino Lui'g. Oil PMcfse. MiiC. Mdi^ GREATWESTEf^n Oi/ Co. Per- B.H. Credit- M(3/7<3ger fioted srd recorded Cashier ZiotQd . M^n^Qor Fig. 12. Branch Ofllce CYedit Notice In the home office, the original application and the statement of terms granted, signed by the branch manager, are filed together. A folder is used for each customer, filed alphabetically with sub- divisons for states and towns. Every subsequent report and memo- randum of credit information is filed in this folder. When the report from a branch house shows an account to be past due, an inquiry blank, as shown in Fig. 13, is sent to the branch. This is in duplicate, the copy being retained at the branch house, and the original forwarded to the home office. In both offices, this report is eventually filed in the folder with other credit information. 211 22 THK (CREDIT ORGANIZATION A noticeable feature of this system is that all blanks are made in duplicate. This insures duplicate credit files in the home office and branches It is, of course, necessary for each office to forward to the other any special data that may be received, from whatever source. COLLECTIONS The duties of the credit man are not ended when he has passed on the credit of a prospective customer; a very important duty follows, and that is to collect the accounts that he has placed on the QREAT WE,STE.fiH OIL CO. Pt^ ^account c?/- is p&st- due &rKf if zdme as not <3/re<9cf(/ p<3/c/ urn &.5A you to u»tfiasfj^^f& K o c J? CQ O to 4- Q U- E 2 a o c to 4- '■5 Q 2 a CP o o o ^ lit 224 rta/6U Chicago.^ At iigtjt psij fo K)& or\. tiO 1611 Cashier Find ott&cJt^ dr^ft fof I nnJt/tr'< A 1 On The Hy^^TMAn Afro. Co. B P/ease prasen/ ,s/ o/?ce a/7d re/rt/f proceeds, or ref'urn u/ifh reasons for" nonp& ry^ma ^ r/iir'? «; <= 1 /fT%trf/monf Nr, M^ko. rtf /n.'ifnjmcni- PA 'r'MBnTS DdtQ. Principgf /rrterest Co//ec/o/' Fig. 22. Contract for Installmont Sales 227 38 THE CREDIT ORGANIZATION An installment dealer will nurse an account to the limit, rather than take back tlie goods he has sold. Once he has collected the tost of the article, he will accept payments of almost any amount, but it will not do to let the debtor know how lenient he is prepared to be; at least a semblance of enforcing the contract must be kept up. The most familiar branch of the installment business is the sale of house furnishings and pianos. The sale of house furnishings on the installment plan is rapidly increasing, and probably more pianos /rf3TALl,M£NT REGfSTBtt Dste Cont No. fiamiz. end Addmss Tof-gf Pianos ^Janola. Ofhe,r Insf-rumnnts Misc. [o Fig. 23. Installment Contract Register are sold on this than any other plan. Furniture dealers who formerly sold only for cash or on approved credits, are finding profitable busi- ness among the better class of installment buyers. Installment sales are made on contracts, or leases, which provide that title to the goods shall be held by the seller until all payments have been made, and that the right of possession shall be forfeited by the buyer if he fails to make any payment when due. WTien the contract is folded, the outside shows a form printed as in Fig. 22. This particular form is used by a musical instrument house. 228 THE CREDIT ORGANIZATION 39 At the head of the form is shown the contract number, amount, date of contract and collection date, name and address of the buyer, and the name, number, and make of instrument. Below is space for a record of payments, divided as to principal and interest, with the names of the collectors. When a sale is made, a contract is made in duplicate, the original remaining in possession of the seller and the duplicate being given to the purchaser. ' - -" rtn ^hooi-J^n. I Amntmt f Datimonf- » CoUecf/' f5 » •^ 1 ■Si Q) — ■"" ~~~' "N. H^ te .^ ^ I" •i. fS •♦» ^ 1 3 "~~— "~^ 1 (31 <0 H^ cs «: ^ (» 5 •^ *^ 5 <0 _^__ ___ ? ° ^; ■*** ___^ _____ 3 -«» J^ t3 ig- -to o 1$ < -k •2 5 v. t) « -t^ "~^ """"■ o c; "& "^ >• ^ ^^0 iJJ -2 "S o ^ ^^ ■^ ^ ' c ^ < ~S 1 5 1^ V) cv u ■5 10 1 1 CS) CJ "i5 1 « 0) ^ & K <0 4? 1 u CQ CQ QQ 10 ll * 5 ■S.'O II 0.0 q , 5i -to 1 ^_^ 1 ^ 232 THE CREDIT ORGANIZATION 43 When a payment is received on a delinquent account, that account immediately becomes live, and the amount should be trans- ferred by journal entry to Installment Accounts Receivable. The journal entry would be: Installment Accounts Receivable Installment Accounts Delinquent Each day, the amount of accounts revived — delinquent accounts on which payments have been received — should be ascertained. If it is desired to save the labor of making journal entries daily, a memo- randum of these amounts may be kept and a journal entry made at the end of the month. WTien a delinquent account reaches the condition where it is con- sidered worthless, the amount should be charged to profit and loss, by the journal entry: Profit and Loss ' Installment Accounts Delinquent This should be done whenever the credit man carefully exam- ines all delinquent accounts, which should be not less frequently than once a month. WTien payments are received on these accounts, they should be treated as revived accounts, with proper credit to profit and loss, if revived during the current fiscal period; but if, in the meantime, the books have been closed, they should be treated as new accounts. It is quite necessary for the credit man to know every day how the installment accounts are running. That he may do this, a daily report, as shown in Fig. 26, should be made by the installment col- lection clerk. The report form should be in loose-leaf, and if the installment sales are divided by departments, the necessary number of columns to accommodate the departmental records may be pro- vided. The report is headed with the amounts of accounts outstanding, divided as to live and delinquent. New accounts opened and delin- quents revived arc added in the live column, and delinquents revived are deducted from the delinquent column. Cash collections, dis- counts and allowances, and delinquents today are deducted separately from the live accounts, and delinquents today added to the delinquent column. Then the delinquents charged to profit and loss are de- ducted from the delinquent column. The balances represent tlio 233 Contf^eflia. vAmount^,. Dsfe^ Co//Qcf}'on. Laf9 Harm, : Acf(/fQSS /nsttum^/it^ ,/ydu. HaAQ of ^ifrvmortt^ <0 5 ' i ■> ^ ' Fig. 27. Front and Back oX Collector's Card 234 THE CREDIT ORGANIZATION 45 net amount of outstanding accounts, and must agree with the two controlhng accounts, Installment Accounts Receivable and Install- ment Accounts Delinquent. Such a report enables the manger or credit man to keep in touch with the actual condition of installment accounts. As a rule, three copies should be made, one for the manager, one for the credit man, and one to be kept on file by the Collection clerk. Filing Contracts. Some houses follow the practice of allowing the collector to carry the original contracts, and in such cases the contracts are filed according to the dates on which payments are due. It is claimed that it is necessary for the collector to have the contract, as the customer is quite liable to lose the duplicate and may ask for particulars about the items purchased. This plan is not advocated on account of the liability of loss of contracts. If it is desirable for the collector to carry the contract, a third copy should be made for that purpose. Original contracts should be kept in a fire-proof safe, and should be filed in numerical order. The most convenient file is a document file, in which contracts can be filed folded. Collector's Card. The most convenient method of handling collections is to supply the collector with cards as shown in Fig. 27. On the face of this card is a record of particulars, similar to that shown on the outside of the contract, while the reverse is ruled for a record of payments. Since all contracts call for payments on certain days of the week or month, it is very necessary that the collection cards be brought to notice on the collection days. A simple method of providing for this is to use a card file equipped with a set of thirty-one numbered guides to represent the days of the month, or a set of guides printed witli the days of the week. The cards are filed back of the guides which represent the collection days. It is customary to divide the city into sections, assigning a col- lector to each section, the number depending on the size of the city and the number of accounts. It is necessary to use us many files as there are collectors, with mi oUicc file addrd for Ihosc who j)n'fei' to pay at the office. Every morning cacli collector is given the cards on his route, on which payments are due. On his return, he turns in all cards to 235 10 THE rPvEDTT ORGAXTZATTOX tlio cashier with tlu' amount colk'ctcd. It" a back call is necessary, the card is filed aiiead a day or two. riie cards in the office file are placed on the cashier's desk each nioi-ning and payments are recorded as made. Those on which no payments are recorded are kept on the desk, and after a reasonable time are given to a collector to follow np. When payments have been recorded in the cash l)o()k, all cards are again placed in the files nnder the next collection dates. They are then readv for the collectors. Re.cmittances. A card is made for each claim, and filed alphabetically under the name of the debtor. The reverse 243 tA TTTE TREDTT ORGANTZATTON of the card is printed as shown in Fig. 33. This sliows the different steps taken to enforce collection. The card file provides an index to all debtors against whom claims are on file, while both the register and the file of folders provide numerical indexes. But it is the creditor Avho is the client of the at- torney, and it is very necessary that he hv in a position to refer to or report on all claims received from any client. This necessitates another index to creditors, which is provided for in the card form shown in Fig. 34. C/-e(///-or Addr de- partment stores, like the Louvre, in Paris, arc run on a, strictly cash basis. MACHINES FOR MANIFOLDING Neither the billing machines (book-writing machines) nor type- writers were originally intended for heavy maiiii'olding work. 'Hie flat-bed billing machines were originally invented to write in l)()oks used for court records, sales books, etc. The book was lo remain 249 6 BILLING AND ORDER RECORDING stationary and the machino was to travel over the books. The flat-bed niaehines are the only machhies made for writin<^ in bound books — the latter are b.eing gradually replaced l)y loose-leaf books. A flat-bed machine for bound books is shown in Fii^. 2. The typewriter was oritjjinally intended to write on one sheet of paper only. If extra copies were needed, a copying ribbon was used, ^^^^r Fig. 2. Flat-Bed Typewriter for Bound Books. Elliott-Fisher Co. and a wet copy taken in a letter-press book. In the evolution from bound books (official record and commercial) to loose sheets, the book t^-pewriter was equipped with devices for holding loose sheets of paper — used alone or in connection with books. In the evolution from letter-press copies to carbon copies, the t}^ewriter was equipped with hard-rubber and brass platens for taking from one to twenty- five copies, and in some cases even more, with extremely thin paper and carbon paper. 250 BILLING AND ORDER RECORDING 7 The flat-bed billing machines are equipped with heavier tvpe- bar springs than the cylinder machines. The operator in d(>pressing the k(>ys overcomes the additional resistance to the touch, due to the heavier type-bar springs, and strikes a heavy blow on the paper, making a good manifold copy in all cases. The operator on a cylinder Fig. 3. Underwood Billing Machine l>illiiig machine strikes a heavier blow than usual to secure (he heavy manifolding results. The heavier the blow, th(> clearer the result on a billing machine. The Underwood biMing machine is shown in Fig. 3. All typ(>wntcrs e(jnlpj)ed wilh special atlachmeiils for holding the sales sheets, invoices, and orders are called cylinder hiUiiu/ iiki- chines. The paper upon which the machine writes is held by, ;,nd passes over and around, a round rubber roll, the cylinder. This is in conlrast (o (lie (|;it-l)C(l bilhiig niachincs (or book 2.51 8 BILLING AND OUDKll UErORDlNG tyjH'writei's) on which the paper lies ilat on a ruUlxr ])lat(' while the machine moves over the ])a])er. Development of Billing Machines. Tiiis text ha.s l)een prepared hy takiufij the simplest forms of bilHng and order work, and leading up gradually to the more complicated forms. This is actually what took place in the improvement of office and factory work. A bill and a eopy were first made — an extra sheet was made for some additional purpose. The advantages of doing two or three things at once led to further investigation. This resulted in still additional sheets being used for other purposes. Every time an additional sheet was added, the labor of typewriting that sheet separately was eliminated. Gradually it developed that it would be useful to copy a part only of the t^'pew'ritten information on some of the under sheets. ]\Ieans were found for accomplishing this. For instance, on an order form, it was desirable to have the prices show on the office copy, but not on the copy which was intended for the warehouse or factory. In some cases it was desirable to write all the information on the top copies and split up the information thereon on the sheets underneath. The final development of all the above ideas is em- bodied in the compound form, in which all sheets for the office, cus- tomer, warehouse, factory, shipping room, and loading platform are typewritten at one operation, and the invoice and duplicate finished as a separate operation. \Miolesale and manufacturing lines are used mostly in this text to illustrate the evolution and improvement of billing and order work. Some of the conditions which have to be considered in install- ing office systems are as follows: \Miether the orders are received from customers or salesmen or both, and which are in the majority. Whether the goods are carried in stock or manufactured or bought outside, or all of these. WTiether the orders can be filled completely, or nearly so. Whether or not the factory may know the prices. WTiether the goods are shipped by freight, mail, express, or all of these. 252 BILLING AND ORDER RECORDLNG 9 Whether copies of the bills have to be made for any other purpose. Whether a copy of the sales sheet has to be sent to the home office, or made for any department. If additional copies of either are necessary, what colors to use for readily distinguishing them. How many ledger clerks, and how to sort their work to the best advantage so that each clerk handles his work only. How to file office and factory copies for cjuick reference. How to plan all the above so that improper filing of sheets does not destroy the chain of record. The reasons for these considerations will be better appreciated after further progress is made. If the business student learns the capabilities of office machinery, the advantage of manifolding, the use of colored papers, and the important feature of correctly grouping statistics (which is almost an art in itself), he will have accomplished much. He should learn also to develop his own power of originality and suggestion. The natural order in which order billing and shipping ought to be presented is the way in which the transactions occur. Methods of billing (making out invoices) in many businesses govern the man- ner in which the orders are made up,^ind therefore will be considered first. In order to more clearly bring out the advantages of new methods, it is deemed advisable to consider old-style methods and contrast them w'ith the newer ideas. By showing the weak points in the older methods and why the new are better, the gradual evolution and improvements can l)e traced. Old=StyIe Method of Billing and Making Wet Copy in Tissue Book. There are enough firms who still follow this plan of billing to resent the term "old-style." The Ix'st that can be said for this plan is that it is shorter than writing the bill-and-sales book, or sales journal, separately. The wet copy takes the place of re-writing the bill. One objection to this method of copying bills is that if all the bills are copied some of them are either blurred or are too light when the copy has dried on the tissue leaf. This is ;i didicully which can be corrected by careful attention. The worst feature is that one never knows whether all the 253 10 BTIJJXC AND OUDKU Ul^XORDING FiK. 4. Old-style Cloth Bath. Typewriter Co. Underwood bills have been copied, and there is no way of knowing this unless th(^ copies in the tissue book are checked back with tlie orders from wliich the bills were made. Many firms spend thousands of dollars In advertising, traveling expense, labor, etc., ship out and bill large invoices of goods, "double check" the invoices, and leave the copy- ing of the invoices in tissue books to a young office boy. They never think to check back the invoices with the orders to be absolutely certain that the goods have been chdrgcd as well as invoiced (billed out). If one should ask them how they know that all invoices are charged (or copied into the tissue books) the invariable answer would be, "Oh! we never lose any bills before they are copied." Ask them how they know none are lost and, after thinking a while, they will admit that they really do not know fo7' sure. They begin to check back the tissue book after some customer })rings in a bill for payment which has never been copied into the tissue book, and hence has not been posted to the customer's account. Fig. 4 shows the old-style cloth bath. Fig. 5 the old-style copy press, and Fig. 6 the old-style sales book (tissue paper leaves). LOOSE=LEAF SALES SHEETS AND INVOICES This style of billing was the first variation from the plan of using copying ink, or pencil, on invoices and then transferring the ink to tissue paper books, })y wetting the leaves with water and then absorbing the surplus water with paper blotters. Or this was done by placing damp cloths on the under side of the leaf and cover- Fig. 5. Old-style Copy Press. Typewriter Co. Underwood 254 BILLING AND ORDER RECORDING 11 ing it with a leaf, placing the invoice downward on the tissue leaf, closing the book, and placing it in a copying press. The ink from the invoice was sufficiently transferred to the tissue paper to make an impression thereon. If the person who did the copying did not use due care, the paper would be too wet and the ink would run and blur the copy and the invoice. If two invoices were accidently picked up by the person copying, the top invoice would not be copied on the tissue sheet. Fig. 0. Ohl-Style Sales Book. Underwood Tyijewriicr Co. This is a most serious ol)jecti()n, for the reason that the copy in the tissue was used as record of the invoice for the purpose of posting into the ledger. Another (hfficidty was the usual one experienced through tlie use of l)oun(l books in office work. Only one person can u.se a book at one time. If Payette Henry, tiie accountant, was using the ti.s.sue-copy book, and Dave Pike, the order clerk, wante<| to use it to set" if all invoices had beoi copied by the office boy, he had to wait on Fayette Henry. The loose-leaf sales sheet shown in Fig. 7, with the pages serially numbered and plac(>d in proj)er binders after each sheet has ])een filed, overcomes all of (he diflienllies mentioned — with many additional benefits. The loo.se-leaf sales sheet and invoice were liisl used with the flat-bed billing machine, the sales sheet being held in position by 255 12 BILLING AND ORDLPv UKCOKDLXG ■> r- „ »NO Johnson Co. '^ I'iLI Loose-Leaf Sales Sheet and Invoices. No Killing on Sales Sheet. Reminuton Typewriter Co. 256 BILLING AND ORDER RECORDING 13 being placed over studs (round metal posts), which fitted into the punched holes in the edge of the paper. These punched holes were used ultimately for fitting over the metal binder posts in the loose- leaf binders. The invoices were wilder than the regular-size invoice and were perforated about 1 inch or l^ inches from the left side, as shown in Fig. 8. To the left of the perforated edge were two small holes about 2f inches apart, which fitted over two small studs on a sliding bill-holder device. This plan provided a means of hold- Trii I? \i/ii\n >Ri: I'kvki, IIominv Co. M.N •.. (oii.N rK<»i)it-r(-i ' Fig. 8. Invoice for Use on Billing Machine ing the large sheet and invoice in proper relation to each other. A piece of carbon paper the same size as the sales sheet was placed between the invoice and the sales sheet. This ruling of the sales sheet is shown in Fig. 9, When an invoice was written on the billing machine, it was manifolded on the sales sheet beneath. ^yh(Ml the invoice was finished it was ready to mail — no delay in copying invoices, no blurn^d invoices through careless coj)ying. No fading of the manifolded copy where black carbon paper was used. Inks are not made of indestructible carbons as black carbon paper is made. A con- densed billing or invoicing loose-leaf sales book for this purpose is shown in Fig, 10. The following are some of the many good features of the con- densed system, as it is in use to-day, briefly stated: 257 , 10 o ^ 1] Q I ■ - kj Ui l< o Ur ;^ 1, ^ ^ o 10 Vl / ^ / ^ J f^ < record and the other is used for various purposes. It can he used as record of sales from ii branch to a liome office, each page being numbered in (hij)licate, and of a distinctive cok)r. This is the plan used all over the world by the Standard Oil Company. As the sales sheets arrive at the home office, they are placed in their respective binders and are gradually made into a built-up book. The loss of a sheet would be instantly detected by the missing page number. A large French perfumery firm in New York pursues this plan, and sends to Paris the duplicate sales sheet on thin paper. It gives the home office a fine record of every invoice sent out to any customer by the branch office or warehouse. As several invoices can be mani- folded on each page, and on both sides of the sheet, it is the most economical method of billing as far as stationery is involved. The name condensed hilling indicates this fact. In other instances, the duplicate sales sheet is wide enough only to allow quantity and description of goods to be manifolded thereon, prices and extensions not showing. This narrow sheet can be used for posting to the stock records without disclosing to that department the prices at which the particular goods have been sold. This form of the sales sheet is shown in Fig 13. Duplicate Invoices. There are many reasons, in various lines, why duplicate invoices are desirable and even necessary. Some customers request invoices rendered in duplicate with one copy complete, the other minus the prices and extensions. To accom- plish this, it is either necessary to place a piece of paper between the carbon and duplicate invoice in such a manner that the prices and extensions will not copy, or to use a short invoice cut off at the left of the price column, or to use a short piece of carbon paper between the original and second, or duplicate, invoice. It is desirable to make extra copies of invoices or duplicates for the use of various departments of a, business, for instance, analysis of sales by salesmen. Where a company employs a large number of salesmen, it is very convenient to file in binders a duplicate copy of all invoices sold by each salesman, using a binder for each salesman. This is preferable to having separate columns in the sales book (sales sheets in binders). The latter method permits each salesman to see what every other salesman is doing. 264 o _/ O 1/5 t: (r \ < \ > \l z 1- i 1- o o i2 £0 to \\ o \\ A w r \\ J \ . I _j \ tr u o / / _j / / [J o // _1 // r ^ / CO o CO h fe w J o w < CO < \ IlI O / a: a. 1 in Q \ cc < > 1 z // (0 1 1 J > / c/i .o r u. o £ il CO 0. ' 1 1 9 L 9 265 22 BlLl.lNd AND OUDKR RKCORDING Department Records. A separate biiulcr allows each man to c'oiisiill his rt'cord without inconvonience to any other one. In large companies Inning a traffic department, it is necessary to provide a duplicate copy of each invoice for the record, showing complete details of every charge. A distinction should be made between those firms who make their invoices before the goods are shipped, and those who make the invoices after the goods have been shipped. In the cloak business, for instance, the goods are generally billed before the goods are shipped, the invoice being placed in an envelope and packed with the goods. Oftimes the goods are manufactured in proper quantities, properly checked from the order to the packers' table, and then packed improperly — some customer receiving too many garments, an- other, too few. Yet the order will be properly checked. To obviate this difficulty, a scheme was devised whereby the packer received a duplicate typewritten copy of the bill (or invoice) showing every- thing but the quantities. This makes it necessary for the packer to count all the garments and mark down in pencil on this copy of the bill the quantity of each style and kind to be shipped. Before the, goods are shipped, the packer's copy of the invoice, with his quantities marked in lead pencil, is compared with the quantities charged on the sales sheet. This scheme forces the packer to count all garments instead of double checking someone else's figures in an absent-minded, or even neglectful, way. This is accomplished by placing a narrow strip of paper over the quantity column of the duplicate invoice, but under the carbon paper. The quantity figures manifold onto the strip of paper in- stead of onto the duplicate invoice. This plan is termed using a blind. The narrow strip of paper between the invoice and duplicate is the blind dcvScribed a little further on. The next step in short cutting work is the printing of a label in connection with the invoice and sales sheet. In the book business, where it is generally possilile to fill orders from stock, and-where the invoice can be made before tlie goods are shipped, It is possible to place a small piece of paper (the label) between a folded invoice in such a manner that when the name is written on the invoice it manifolds onto, the label as well as onto the duplicate invoice and sales sheet. 266 BILLING AND ORDER RECORDING 23 Analysis of Quantities and Amounts- In certain lines of business which sell three or four varieties of goods, it is desirable to analyze the weights or quantities in the proper columns, which in turn mani- fold onto the sales sheets, as shown in Fig. 14. BRA5S RODS BRASS BARS COPPELR BARS Z I MC BARS 2500 lOOO \o @20 ©) 15 « 60.00 « 52 OO « i 5.00 3000 # Brass Rods 2.500 # Brass Bars 1000 # Zinc Bars Fig. 14. Sales Sheet for Analyzing Quantities and Amounts of Goods This saves a great deal of time as compared with making out the same invoice in the following way: @20 $00.00 @21 $52.50 @15 $15.00 By following the first plan, all of the weights for the respective classes of goods will be manifolded into the proper columns, and it is therefore an easy matter to total each column, and at the end of the month the classification of sales will be totaled according to wei 269 J(l lUTJJXG AND ORDER RF/'ORDTXr, siimill;iii(M)iisly, In-causo tlicy kiunv tliat tlioy can ship every item ealled t'ltr, and consecjueiitly do not luivo to wait to see what item^j are sliippcd Ix-t'ore hilling them. I'nit Billing. The unit idea in hilling has grown considerahly in the last few years, notwithstanding that the size of the bills have to be uniform, and as large an invoiee has to be used for one item as for a large bill. Many firms prefer the unit idea to the condensed sales sheet idea. This is due chiefly to the elasticity of the scheme. The duplicate, triplicate, or quadruplicate of the invoice can be sorted in any desir- able way. It is especially convenient for bookkeepers to sort dupli- cates of the invoices alphabetically, and save a great deal of time in posting to loose-leaf ledgers arranged alphabetically, in the same manner. (In mentioning loose-leaf ledgers, card-ledgers are always included, as the same principles are applied to one as to the other, as far as accounting methods are concerned.) It is easier to handle unit l)illing forms on the typewriters with billing attachments, which is an added reason that many firms prefer to use them. Some of these forms are shown in Fig. IG. Another idea to be recommended is the color scheme, whereby each copy of the invoice is manifolded onto a different-colored piece of paper. In sorting the various copies for different departments, different colors will greatly facilitate the recognition of various sheets, and the uses or departments for which each is intended. ORDER WORK OF WHOLESALE GROCERS There are hardly two firms who handle their order work alike. The first consideration in treating order methods is to distinguish the classes of business in which the orders are made up ready for ex- ecution by the salesman, from those which are received from custom- ers and transcribed on typewriters. The first class will be discussed separately from the second. \Miolesale grocers, druggists, and similar Imes receive the great majority of their orders from the salesmen in the field. After the orders are opened, the first step is to stamp on each order a number with an automatic numbering machine. After this is done they are copied into an order register as follows: 270 Fig. IG. Samples of Unit Billing. Remington Typewriter Co. 271 2S BILLINTt AXO order RErORDTNG 1012 John Smith & Co., Plainficld, N. 3.^ 1013 A. B. Jones ct Bro., rrovi.lencr, R. I. 1014 U. J. Benedict, Elmira, N. Y. 1015 Grace Barnes & Co., Alliance, Ohio. After the orders are filled and charged, they are checked on the order register. About once a week all of the unchecked numbers on the order register are compared with the unfilled orders. If an order should become lost, the fact w^ould not remain unknown longer than one week's time. It should always be remembered that in case an order is not completely filled and is "back ordered," the back order should always show the original order number in order to prevent confu- sion. A little practical experience will quickly show how wrong it is to use a new number for a back order. Back Orders. In the problem of systematizing any kind of business, the question of back orders and the proper method of handling them is one of the most troublesome. Some firms do not wish an order blank returned to the warerooms after it has once been there, because they do not wish the wareroom or factory to know the prices which are placed on order blanks in the office after they have been received there for pricing, extending, and billing. Many firms therefore make an entirely new order to be returned to the factory or wareroom with the letter A used in connection with the order number, as follows: 1013 A. This of course delays the filling of the order until the back order is typewritten. If it is necessary to make a second back order, the same would read 1013B. Other firms use the color scheme. This is a very good idea, as it indicates clearly to the order fillers old orders which should receive attention first. Many important improvements in the order and billing methods have been inaugurated in recent years in the business of wholesale grocers. Formerly it was the custom, after the order had been num- bered and recorded in the order register, to pass the orders out into the warehouse with the general understanding that they were to be filled as quickly as possible. The order fillers would generally start at the top floor and pick all of the items which were to be shipped, place them on a truck and take them to the next lower floor, and follow this plan until the order was entirely filled. In stores above a certain size this resulted in considerable delay. 272 BILLING AND ORDER RECORDING 29 The first improvement was to send the orders to the shipping department, where they were spHt up by clerks known as Slippers, who wrote on slips the items which were to be taken out of stock, each slip representing the goods to be gotten out on a certain order from a certain floor. This idea allowed the order fillers on all floors to work simultaneously, and resulted in considerable saving of time. Another favorable result obtained through this system is that the shipping clerk retains an original copy of the order (the copy sent in by the salesman) and is enabled therefore to follow up all depart- ments and hurry up any department which may be delinquent in the filling of a certain order. In planning work, it is always advisable to have one department act as a follow-up on some other department. In the grocery business, it is much more satisfactory for the shipping clerk to have a complete, record of all the orders to be shipped that day, than to hand the original orders into the warehouse to be sent down to the shipping department after the order has been entirely filled, and then have the shipping clerk rushed at the last miniUe to plan his loads and do all of the clerical work, such as making up bills of lading, etc. The next improvement was necessitated by a desire on the part of those wholesale groceries which are located in cities having an efficient interurban electric car service to fill orders at different hours of the day. One western firm transcribed all of its orders on cylinder billing machines, giving the shipping clerk a full copy of the order, and each department a copy of the items which are to b^ filled from that department only. On the shipping clerk's copy, the notation 11 A. M., is marked, also on all of the department order slips. This indicates that the order is to be shipped on the 11 o'clock car. Other stationery is printed with the 1 P. M., 2 P. M., 3 P. M., 4 P. M.. 5 P. M. to indicate th<' hours at which the orders are to be shipped. ]Many small retail merchants delay ordering until the last minute, and the wholesale house which can give the [)romptest service gets the business. Tlie above plan advises the shipping department the time that the goods are to be deHver(>d, and makes it responsible for results. All delays are noted, and a daily report made of the causes, which are promptly investigated and removed. 273 30 BILLING AND ORDER RECORDING Split Orders. Soinr wholosulc drug houses liave their stock arranged on ditYerent floors, of which their salesmen are fully ad- vised. If the salesman takes an order for goods which are held in stock on four different floors, lie sends in the order on four sheets of ])a})er with the items for each floor written on the respective sheets which indicate the respective floors. Different-colored sheets of pajicr are used for the various floors. This scheme puts more clerical work on the salesmen, but it enables the office to quickly hand each department its part of the order without the delay of transcribing the department slips on the typewriter at the office. In all order schemes where an order is split up and written on several sheets of paper in order that each department may fill the order without delay, the term split orders is used. In all split-order schemes, the number of sheets in which the order has been divided is written on each sheet. For instance, if there are departmental order sheets for three different floors, the figure 3 is marked on each slip. In this way the biller, by counting the number of sheets attached to the complete order, will know that all of the split-order sheets have been returned to the office. Fig. 17 illustrates this system of orders. The three blank sheets at the top are departmental order sheets, and each contains only a part of the whole order. This is accomplished by removing one departmental sheet at a time from the billing machine, but allowing the three top sheets to remain in the machine until the entire order is written. Some firms are willing to make four copies of an order, each copy containing all of the items of an order. Other firms do not wish the employes to know what a customer is buying outside of the goods relating to the department in which the employe is work- ing. Further, sometimes two departments in the same factory are equipped to make the same class of goods, and if each department received a complete copy of the order there might be some confusion and duplication in the filling of the order. Some firms, instead of making split orders, make a summary of the goods to be delivered from each floor, giving each floor several of these summaries in the course of a day. The goods are delivered tg the shipping department in large cpantities, and are separated by the shipping clerk according to the quantities wanted for each order. Concerns which are using this idea claim that it takes less 27i PMk. 17. Kornis for Split -Orilcr Scliemes 275 32 BILLING AND ORDER RECORDING tinu' for the .sliij)jH'r (o sopa rate floods than it dcnvs for the order depart- ment to make split orders for each individual. In planning the clerical work in order hilling and shipping methods, the volume of business being handled must be taken into consideration. A plan which is necessary with a large business would be considered as red tape in a smaller one. The larger a business grows, the more it is possible to "specialize" the work. In a very small business, one man could fill all the orders and make out all of the bills. In a little larger business it would be necessary to devote one person's entire time to filling orders, another's to making out the bills. In a business twice as large as the one just mentioned, it would be necessary for one person to devote his entire time to filling the orders from one floor only. In an exceptionally large business, it might be necessary for. one person to devote his entire time to filling orders for some particular class of goods on one floor. These examples are given to illustrate the meaning of the word specializing. Simple Order Form. The majority of firms transcribe their customers' orders onto their own order forms from letters or re- quisitions. The simplest form of order is one containing an original for use of the warehouse or factory, a duplicate to be mailed to the customer as an acknowledgment of the order, and a third copy which is held in the office as a record of unfilled orders. The re' quisition form illustrated in Fig. 18 conveys the idea. The practice of sending an exact copy of the order to the cus- tomer eliminates the necessity of acknowledging the order by letter, and gives the customer an opportimity of checking over the order as entered. It is customary to print on acknowledgment of order forms the sentence: This is an exact copy of the order as entered — if any errors are noted kindly advise us at once. One firm in Buffalo saved $300.00 the first week they installed this scheme, through the detection of an error by the customer. It is imperative that before a remedy or short-cut methods can be prescribed, it is necessary to thoroughly diagnose all of the conditions incident to the business. It should also be remembered that clerks and even department heads will see all of the imaginary difficulties of a new idea and overlook all of the benefits to be derived therefrom. It should be further remembered that if a new method 276 BILLING AND ORDER RECORDING 33 \/'' Fig. Is. Siinplti Jieqiii.sition Korins for Order llmiilliu^. litnunylon J'l/iJewrilcr Co. ^ 277 34 BILLING AND ORDER RECORDING shortens nine-tenths of any particular class of work and slightly in- creases one-tenth, the party involved will many times fail to see the net advantages accruing through the introduction of the new idea. If objections are raised to a suggested short-cut method it is always well to ascertain whether the oV)jections apply to a majority of the work or a portion of it only. Most people in clerical positions rather resent new ideas, and seem to take a pleasure in trying to find some reason why a new idea will not succeed. This is one phase of human nature which requires the utmost tact and diplomacy to handle successfully. In advancing or suggesting new methods, it should be assumed as far as possible, that the idea has been suggested by the person to whom one is talking, for the reason that most people are willing to "father" their own ideas. Simple Order Form with Copy for Shipping Department. The second short cut which was instituted in connection with order forms was the addition of a sheet on which was manifolded a copy of the order for the shipping department. The idea is to give the shipper information in advance, in order that he may prepare his bills of lading and plan his work for his teams, order cars in advance from the railroad, call up express com- panies, and such other work as might be necessary to the proper shipment and delivery of the goods manufactured and sold, and to file the copy as his permanent record, in some cases. Some firms desire to prevent the shipper from knowing the prices at which their goods are sold. This is accomplished by using for the shipping department a short sheet of paper which reaches from the left edge of the order-blank to the price column only. An- other method is to use a narrow sheet of carbon paper with a full- size sheet of paper. This plan is not as satisfactory as the former one, as the carbon paper sometimes slips to the right and allows the prices to manifold. Acknowledgment of Order to Salesman. In some lines of busi- ness, it is desirable to add an additional sheet which is termed acknowl- edgment of order to salesman. This plan enables the salesman to know that the order has been received and properly entered for execution (in manufacturing lines it is necessary to transcribe orders on order forms which contain too many copies for a salesman to manifold by pencil), and gives him the opportunity of checking the .278 BILLING AND ORDER RECORDING 35 order as entered. It should be remembered that in some lines of business there is such an enormous amount of detailed information in connection with an order that neither the customer nor a salesman would check over an exact copy of the order as entered. This should always be taken into consideration when considering the addition of this sheet. STATIONERY The various styles of loose-leaf sheets and binders should be fully understood in order to appreciate their importance in order and billing work. Loose=Leaf Sheets. The first loose-leaf sheets were punched with closed holes, as shown in the illustration of Kilby Mfg. Company forms in Fig. 18. The trouble with the closed-hole punching Is that, when placed over the metal posts of the binder, it is impossible to remove a sheet in the center of the binder without removing all of the sheets immediately above the one desired. To obviate this difficulty, the slotted hole was devised. This is illustrated in the forms of the Commercial Sash & Door Company, in Fig. 19. The slot from the edge of the paper to the punched hole permits the paper to be placed over the posts of the binder between any two sheets. Holes are punched in both the closed and slotted styles in various sizes, ranging generally from a | to -f^ of an inch in diameter. In late years, manufacturers have introduced punched holes of different shapes from that of a circle. For permanent records where the sheets are filed serially accord- ing to page number, order number, etc., the closed-hole loose-leaf sheet is perfectly satisfactory. For records which are to ])e rcMUOved from any given part of the l)iii(l('r and reinserted in another part, the slotted-hole loose-leaf sheet is the most satisfactory style to use. Binders. Binders are generally made of two covers and a set of posts, which ordinarily are attached to one of the covers. The other cover is movable in order to accommodate the increased thick- ness of the binder as loose-leaf sheets are added, (ireat strides iiave been made in the manufacture of inij)roved l)inders. There are so many styles of j)osts and other ingenious arrangements, where the two covers are held together and closed or opened by the use of a key, that only reference to catalogs of mainifacturers will supply detailed information. 279 Via. 19. Two Styles of Punching for Loose-Leaf Slieets. Remington Typewriter Cu. 280 BILLING AXD ORDER RECORDING 37 In buying binders and loose-leaf sheets, it is well to buy both of the same firm. Heretofore, trouble has been experienced where the punched holes of the loose-leaf sheets were probably ^V ^'^^"^^ further apart or closer together than the metal posts in the binder in which they were to be used. The manufacturer of the binders will always claim that the sheets were punched incorrectly by the printer, and vice versd. It is pretty generally understood now that all punched holes should be placed with the center of the hole h in. from the edge of the paper. This allows enough margin to permit of the paper being held firmly over the posts. In all cases where the holes are punched too near the edge of the paper, the narrow margin between the edge •of the paper and the hole becomes torn very quickly. Stationery Printed for Typewritten Work. Very few people recognize the great value of properly designed stationery for type- written work. The law of usage and custom is so strong that invariably invoices and order forms are printed the same as if they were to be hand-written. The headings are printed with the first letter of each word lined up vertically. This plan causes great waste of time on the part of an operator. All billing and order work should be done on machines equipped either with a column stop or a decimal tabulator. A column stop is a device on a writing machine which automatically stops the car- riage at any one of several predetermined points. A decimal tabu- lator is a device on a writing machine which automatically stops the carriage at the units, tens, hundreds, etc. place in any prede- termined column. It should also be understood that all typewriters and billing machines are equipped with marginal stops. These stops arc ad- justable, and can be arranged on either side of the machine in such a manner that the carriage will always stop at any given point at either edge of the paper. It is vitally important that either a column stop or a decimal tabulator should be used in connection with marginal stops on writ- ing machines, and these three points should be taken into considera- tion when designing stationery for use with a machine. The fol- lowing illustrations show poorly designed and correct invoice headings. 281 3.S HTTJJXr^ .VXD OnDF.R RErORDTXO J. B. WILLIAMS & BRO. NASSAU, N. Y. NAME SALESMAN , SIIIPPINd ADDRESS ORDER NUMBER P. O. ADDRESS REQUISmON NUMBER VLV This blank form has purposely been shown in order to con- trast it with an invoir(> ])nnte(l in the same wav with the iiea(lini>s properly filled in. J. B. WILLIAMS & BRO. NASSAU, N. Y. NAME, Geo. Brown & Co. SALESMAN, Jenkim^ SHIPPING ADDRESS, Flat Rock, W. Va. ORDER NUMBER 3246 P. O. ADDRESS, Wenonah, W. Va. REQUISITION NUMBER A341 VIA A'. & M\ R. R. Co. OUR ORDER NUMBER 9422 Contrast this heading with that of an invoice which has the last letters of each line lined up vertically. This makes it possible for the .operator of the billing machine to draw the carriage to the extreme right, as the first letter to be written in every line of the heading starts at the same point. NAME Geo. Brown & Co. SALESMAN Jenkins SHIPPING ADDRESS Flat Rock, W Va. ORDER NUMBER 2246 P. O. ADDRESS Wenonah, W. Va. REQUISITION NUMBER A-Ul VIA A', cfe IT'. R. R. Co. OUR ORDER NUMBER 9422 The latter form does not have as good appearance before being typewritten as afterwards. However the change is made for the sake of utility and speed. In the first form it is necessary for the operator to position the carriage at a different starting point for each line, whereas in the last illustration it can be readily seen that all the operator has to do is to draw the carriage to the right to the marginal stop, and write without any loss of time. At one time a speed contest between pen billers and machine billers was held on one of the large railroads of this country, and permission was given the machine people to change the position of the headings of the freight bills. The salesman in charge of the test studied to eliminate certain wasted movernents of the typewriter carriage. He succeeded in arranging the printed matter on the bill in a manner which permitted of three starting points in the heading and body of the bill. By pressing his tabulator stop after writing 282 BTTJJXO AXD ORDEPv RKCOrxDIXr. 39 a name or figure, the machine would immediately jump to the next printing point on the line. This arrangement greatly faeilitated the work, and enabled him to prove the superiority of machine over pen work. If he had endeavored to use the old stationerv with its irremdar headino's, he would have made a failure of the test. Designing Stationery. In designing invoices, order forms, and statistical forms, it should be always borne in mind that the ordinary typewriter or billing machine spaces ten letters to the inch, sometimes twelve spaces to the inch with elite type, and sometimes eight spaces to the inch with large Roman type. Therefore, all vertical lines separating various columns of the form should be ruled in multiples of tenths, twelfths, or eighths of inches, according to the spacing (escapement) of the machine to be used. The different styles of type are shown in Fig. 20. In estimating the distance between lines, it should be borne in mind that all t\^3ewriters and billing machines are arranged for spac- ing one line, two lines, and three lines. By adjusting the spacing device, the paper can be advanced the width of one, two, or three lines. .\11 headings on the invoice should be arranged so that the next writing point below, on the invoice or order, will be one, two, or three spaces, and the beginning of the body of the bill should be arranged for in the same manner. This prevents any waste of time, and :'liminates the necessity of throwing oflf the ratchet spacing device of the machine and turning the carriage by hand. The first printing point on an order or billing form should be placed in such a manner that the marginal stop of the typewriter carriage, instead of a tabulator stop, will be available for use, Tlie second writing point on the form should be the first column stop (the coliiiim finder on the billing machine is Uie device which auto- matically stoj)s tlic cari-iage at certain giv(Mi ])oints). The tliird writing point on the line should be the second cohnnn stop, or decimal tabulator stop, according to tlie one vvhicji is on die machine. In Fig. 21 is shown an illustration showing th(> top sheets of an order form designed to facilitate the work of the billing machine. In addition to having all of the printed headings aligned vertically on the last letter of each word, each line is ciflicr one sj)iice or two spaces of tlie billing machine platen rrnl)ber roll). 'I'liis eliminates any waste of time in spacing the order form through the machine. 283 5TYLE-5 OF TYPE^ No 1 PICA. Popular, standard style for correspondence and general work. Ten characters to the inch. 1,2,3,4,5,6,7,8,9,0. No. 3 MEDIUM ROMAN. Very legible. Used by public speakers. Either nine or ten to inch, as desired 1,2,3,4,5,6,7,8,9,0, No. 4 GOTHIC. Favorite for billing. Used in commercial and rail- road WORK. Ten to the inch. I ,2,3,4,5,6,7,8,9,0. No. 6 ELITE. Is used largely for personal correspondence. Much matter in small space without crowded appearance. 1,2,3,4,5,6,7,8,9,0. P'itr. 20. Styles of Typewriter and Billing Miicliiiu^ Tyi)e 284 BILLING AND ORDER RECORDING 41 The last sheet of the form of the McCaskey Register Co. is cardboard, with the numbers 1 to 31 printed along the top. A mov- able metal "spud," or tip, is used to show the due dates of each invoice, and to enable the collection clerks to quickly find the desired copies of charges for the purpose of sending out statements from three to five days ahead of due dates. Styles of Type. The size and style of type is a very important factor in all classes of work where legible manifolding results are wanted. There are several classes of type used in connection with billing machines. Different companies use different names in de- scribing them. The four sizes of type used are as follows : ELITE PICA MEDIUM ROMAN LARGE (or full) ROMAN Elite. This style has come into general use in connection with correspondence. It gives a dignified style to a letter. It is the hardest type to keep clean — the most destructive to the rubber roll and typewriter ribbon of any type made. It also manifolds very poorly where a number of copies are used, as the type is so small that the sixth or seventh copy, and many times the third and fourth, are so blurred that it is impossible to tell an e from an a or an o. This style of type is sometimes used for making up tabulated statements where it is desired to crowd a large number of figures to the inch. Pica. This is the most generally used type of any. It mani- folds quite well up to six and seven copies. It is possible to write only ten figures of this size to the inch. Medium Ilonidii. This is the next larger size type than the pica and, on account of it being larger, it gives better manifolding results. It also writes ten letters to an inch. Large Roman. This is the size type whicli is used by railroad and steamship companies for typewriting their way-bills. It is possible to write only eight letters to an inch. Gothic Ti/pc. The t(>rm Gothic indicates the style, a?id not the size of the type. If the small points at tlie top and bottom of the Roman type were removed (these points arc called serifs) the effect 285 { I tilT -t— *"— — ^^-^^^ \z } ^i ) * CI " i fi f-' ",:> mf^ 286 BILLING AND ORDER RECORDING 43 would be that of Gothic tv'pe. A very pleasing combination on a billing machine is two different sizes of Gothic t}^e, the larger size to be used for capital letters, the smaller size for the small (or lower case) letters. Recent practice has demonstrated the value of using capital Gothic letters of one size, as it increases the legibility of an order or an invoice. In manifolding, numerals should always be of the "open" kind, that is, 12 3 4 5 6 7 8 9 0, and not 1 234567 890, as the former are much the more legible. Carbon Paper. There is no article which is so generally misused in the commercial world and which is so little understood as carbon paper. In order that the correct usage may be clearly understood a brief description of its manufacture is given. The chief ingredients of carbon paper are oil, wax, paper, and color. Oils and waxes are used to give wearing surface, elasticity, and body to the color mixture. Tissue paper — generally of imported quality — with a fine, strong fiber is used. The quality must be first class in order to insure absence ot holes and other imperfections in the sheets. Generally the sheets are cut 20 X 30 inches. A ream is regarded as containing 500 sheets. Three weights of paper are used, 41b., 71b., lOlb., respectively, meaning that 500 sheets of the above size of paper will weigh the number of pounds named, according to the thickness of the paper. Color. The only really indelible color is black; that is because carbon is the basis of the color. The colors wiiich are used are powders which have been ground as fine as possible. They are mixed in proper proportions with oils and wa.xes. Formerly the mixture was applied by hand, but great strides have been made in machinery for automatically applying the color evenly to the paper. It is important that the color or pigment be ap})lied evenly to the paper and that it penetrates the fiber, rnless tlie pajx-r retains the pigment, the carbon paper will not wear properly. 'V\\v longer the color adheres to the paper, the longer it can be used. Finish. The finish of carbon j)aper is the factor which is so little understood by the public. Garbon papers are finished with hard, medium, and soft finishes. The hard will scarcely rub ofT on the hand under pressure, the n<'\t will rub some, and the soft finish will smudge if pres-sed against tlie hand. Each finish is intended for 287 44 lULLlXG AND ORDER RECORDING a definite use, wliich will be explained later. The manifolding power of carbon paper depends absolutely on the t\'pewriter itself, the hardness of the rubber roll, the touch of the operator, and the weight of paper, and lastly, the finish of coating on the paper. Two oj^erators on the same t}'j)ewriter can secure totally different results because one will have light, and the other heavy, touch. The regular rubber rolls which are furnished with typewriters are medium hard — in six months or a year they gradually grow harder, eventually be- coming as hard as slate. If a typewriter is to be used for regular work as well as heavy manifolding, it should have two different rolls, one for each kind of work. There is no reason for using a medium hard rubber roll on the machine, getting poor results, and then blaming the carbon paper. Use a hard rubber roll on the machine and there will be no difficulty. Some makes of machines have interchangeable rolls (knowai as 'plaiens) w^hich are very useful. It is the work of a minute only, to remove one and place the other on the machine. Four-Pound Paper. This class of carbon paper has a heavy, sensitive coating, and is intended for heavy manifolding — for making from five to twenty copies. Soft-finish carbon papers are always used where heavy manifolding is to be done. The finish of the paper which is being written upon is also a factor. Papers with a hard finish — that is, a shiny surface — do not allow the color of the carbon paper to take hold, and yet a paper with the soft finish will allow the color to spread, and make a poor copy. This class of paper is also used for making a few copies on very light-stroke machines like the Ham- mond. Seven-Pound Paper. This weight of paper is adapted for mak- ing from one to five copies. Being heavier than the four-poimd, it will wear longer. If coated heavily it will give more impressions than if lightly coated, but the impressions will not be as clear and clean. Ten-Pound Paper. This w^eight of paper is intended for use where one or two copies are wanted. Its w^eight enables it to stand the hard usage to which it is put. On one or two copies, the addi- tional weight or thickness of the carbon paper does not affect the imprint. This class of paper is used with billing machines of all kinds. 288 BILLING AND ORDER RECORDING 45 F}iU Carhoti Papers. This is a paper which is coated on hoth sides for making a mnltipiicity of copies on tissue. The pieces of carbon paper are placed between every other piece of tissue paper and manifold on the top of one sheet and the bottom of the next. This carbon paper is used to reduce the bulk of paper in the type- writer — one-half as much carbon paper being required. It is sometimes called double carbon paper, and is mostly used by rail- roads in making up way bills on yellow (dandelion grade) tissue paper. Copij Carbon Papers. This paper is for use where it is neces- sary or desirable to make a carbon copy from which to make a letter- press copy. Hektograph carbons are for making carbon copies to be used in a hektograph. Pencil Carbons. This class of carbon paper is made in the heavy grades of paper from seven-pound to twenty-pound and is made full carbon in the seven-pound weight. Pen Carbon. This class of carbon paper is made in the seven- pound and ten-poiuid weights. Troubles and Remedies. Carbon papers made in summer have different treatment in the matter of color mixture than those made in winter. Lasers should always remember that carl)on })aper which has lain unused all year has gradually dried out and depreciated in efficiency. The fresher a carbon paper the better — therefore it is not economy to buy too large a supply if it is liable to stand for more than six months. Never store carbon paper n(>ar heat, nor in the direct rays of the sun. The one great difficulty experienced with carbon ])aper is the streak(>d effect called "treeing." This is caused by the carbon j)aper being Inserted unevenly between the sheets of paper used with it. Once wrinkled, it remains so, and gives the streaked result as long as it hists. To guard against this trouble, the operator should watch that the carbon paper is not wrinkled when inserting it between the sheets of paper, and should press the release lever on the typewriter to release the paper-feed rolls on the uiachine, after tlic |)aper is inserted in it, so that the une(|ual tension of the j)aj)er and carbon paper may adjust itself. Durability of Color. Black paper made of carbon j)igment is indelible and most durable. Blue or puiph' ])a])e>rs are next in the order of durability of color, and arc made of aniline dyes. Green 289 40 TUTJJXr; AXD ORDER RECORDING luxt, and R-d lu-xt. Tlie fact is that red and (,nveii carbon papers shonld not he ns(Ml for pcnnancMit records, as they will fade (juickly. Wciiriug Qualiiy of Paper. Many times a typewriter will have a rnhher roll (platen) which has become pitted and worn from age and the nse of periods, commas, liA'phens, and ditto marks. This is very destrnctive to carbon paper. New rubber rolls should be placed on the machine. It is not economy to use the cheap variety which can be purchased for 75 cents and which is nothing more tlian rubl)er hose drawn over a wooden core. The latter is not cylindrical and will give trouble. The t\'])e will print unevenly and cause bad alignment, for which the machine will be blamed. Blinds. Blind is the name given to a sheet of paper used in connection with manifold work for preventing all of the information on the top sheets from being manifolded on certain of the sheets underneath. For instance, in describing the scheme for providing the pack- ing department with a description of the goods to be shipped, but with the quantity column blank, it will be remembered how a strip of paper of proper size wide enough to cover the quantity column was placed over the left side of the invoice from top to bottom. Therefore all quantities, instead of manifolding onto the packer's sheet, manifolded onto the strip of paper known as the blind. A blind may be of any given shape, and cut away at the top, side, or bottom; or, in some cases, irregular-shaped cuts are made in the middle of the sheet or near the edges. The cuts are made in order to allow certain information to be manifolded on the next sheet under the blind. The balance of the information on the top sheet is manifolded onto the blind, which is thrown away. It is rea- soned that it is cheaper to use a sheet of paper for this purpose than it is to stop and make a separate sheet with part of the information only, t\-pewritten thereon. HOW TO HANDLE ORDERS AND BILLS ON BILLING MACHINES Loose=Leaf Sheets with Invoices in Blanket Form. In some lines of business it is possible to use invoices of equal size. Some firms therefore have the invoices and sales sheets of equal size. The 290 BILLING AND ORDER RECORDING 47 top sheet is perforated horizontally at equal distances, which permits the invoices to be torn apart so that one blanket of form invoices may be separated into three or four separate invoices. This plan can be used where the work is done on an ordinary letter-writing machine. In preparing the papers for billing, a sheet of carbon equal in size to the sales sheet is used. A heavy-weight carbon (10- Ib.) with hard finish is the best kind of carbon to use for this wo-rk. If an extra sales sheet is needed for any purpose, a duplicate sheet of paper, preferably of another color, can be used with another sheet of carbon interleaved between the two sales sheets. This method is wasteful of space as far as the sales sheet is concerned. If each invoice were loose and placed in the machine in such a manner that the first written line on the invoice would be two or three spaces only below the last item of the previous invoice manifolded on the sales sheet, generally one more invoice of average size could be mani- folded onto the sales sheet. Loose=Leaf Sales Sheet with Separate Invoices. This combina- tion is made possible by the billing machine, the flat-bed and the cylinder style. Cylinder billing machines are equipped with spe- cial carriages having special feed rolls which hold the sales sheet until it is fed entirely through the machine. Cylinder machines also have an inde'pendent feed roll which can be released by a special lever. This permits an invoice to be inserted in the macliine, and then clamped into position by the intermediate feed roll and fed through the machine with the sales sheet until the invoice is completed. The intermediate feed roll is then released, and the invoice removed without disturbing the sales sheet. The next invoice is then placed in position, .iiid the same operation is repeated. This allows one invoice to be manifolded very nearly under the ])r(jvi()iis invoice. Some firms having invoices of one or two ilcins only, ^\ liich permits of from seven to nine invoices being manifolded on each l)age, have the invoices made up in blanket form; that is, seven or eight invoices to a strip. After each invoice is manifolded they advance the next invoice into jxjsilion and (hen tear the invoices ;tj)art as previously described. Carbon Paper Cut for this Class of Work. Some operators doing condensed bilhng work prefer to use carbon paper the same size as the invoice, and to remove the carbon [)aper each time an in- 2yi 4S lULr.l\(; AM) OKDKR KKCOUDING vokv is coniplrtcd. This necessitates a great deal of liandling of carbon paj)t'r. It is preferable to use a large sheet of carbon paper (he same size as the sales sheet, feeding it through the billing machine with the sales sheets. This eliminates the necessity of picking up a piece of carbon paper each time an invoice is placed in the machine. With the former method, if one had four invoices to one page of a sales sheet, it retjuired one to pick up the same piece of carbon paper four times, or once with each invoice. The latter plan necessitates handling the carbon paper once only, when the sales sheet is placed in the machine. The operator positions the second or third invoice on a sales sheet, in order to avoid writing over the previous invoice, by spacing the carriage three times after an invoice is completed. Using the Sheets Serially. All sales sheets should be serially numbered, in order that when placed in a binder the loss of any sheet may be detected by a missing number. Some firms prefer to use one side of a sales sheet only. In this case, a sales binder hold- ing 375 sheets would have 375 pages. Where the sheets are num- bered on both sides, the sales binder w^ould have 750 pages. If the appearance of a page is marred by an invoice being spoiled, that sheet is not throw^n away, and the fact that it is not is an incentive for the operator to do good work. Handling Credit Memoranda. Some firms prefer to handle their credit memoranda on different-colored paper (generally pink) for both invoices and the large sheets which correspond to sales sheets. All of the rules which govern the making of invoices and loose-leaf sales sheets apply to the execution of credit memoranda. General Remarks Regarding Billing Machines. The flat-bed billing machine enlarged somewhat upon the idea of using special characters for certain abbreviations peculiar to various lines of trade. For instance, in the shoe business, the following abbreviations are some of those used: WOM means Women's CHI Child's BOYS' Boys' BAL Balmorals BLU Bluchers PR Pair PRS Pairs DOZ Dozens 292 BILLING AND ORDER RECORDING 49 The cylinder machines have adopted the same phin. h\ the cylinder machii^es there are two distinct classes — those having two type to a type-bar, snch as the Remington and the Underwood, and those having one t}-pe to a t}^e-bar, with donble the number of bars, such as the Smith-Premier. Both classes of machines can use special characters, but the machines having one type only to a bar have a preference in that they have more room in which to place special characters. There is considerable saving in the use of special characters, as evidenced by the following example: OCT 14 09. This necessitates nine strokes where each letter is written separately. Had this been written by three special charac- ters, it would have necessitated five strokes only. The special characters would be used as follows: OCT.-space- 14-spsLce-09. To the uninitiated, it would seem that a special character of three letters, such as the abbreviation OCT., would occupy three spaces on the machine, and consequently would overlap on the word at the right. This is obviated by placing the type on the type-bar in such a manner that the letter T of the abbreviation is in the printing point of the paper. The following illustration will show how the type are placed or aligned in order to secure the desired results: OCT 14 09 1 I I As the month always precedes the next word, the abbreviation OCT is aligned so that the two first letters are to the left of the print- ing point. In case a machine were equipped with numbers for all the days of the month, the character J4 would b(> aligned to print either side of the printing point. As the abbreviation 09 would always follow and never precede, it would be aligned with the in the printing point, with the 9 printing to the riglit of it. It is very important to have special characters properly aligned so that the abbreviations which always precede are aligned to j)rint on the last letter, and the abbreviations which follow are aligned to print on the first letter. It is impossible to print abbreviations in solid matter such as a letter. They are only to be used in connection with dates of invoices 293 50 BILLIXC A\l^ ORDEPv RKrORDTXG or orders, h\ connection with names of firms. For instance, the abbre\iation Alcs.sru., at the beginning of a firm name where snch a term is desired, or the abbreviation Co. at the end of a firm name or the abbreviations Pr., Doz., Gro., and similar abbreviations, come in tlie body of a bill and, preferably, in the first column after the quantity. It should l)e remembered that when the rubber platen of a billing machine becomes worn and cut with holes incident to the use of periods commas, h^-phens, etc., the special character t^-pe will sometimes print heavy at the top and light at the bottom of the letter, or vice versd. This is remedied to some extent by placing a new rubber roll on a cylinder billing machine, or a new rubber covering on a flat- bed billing machine. Special characters are used to a better advantage on the under- stroke (or blind machine) than on the visible machine. In the latter, the t}'pe-bars are all grouped in less than a half circle, which neces- sarily crowds the tN'pe-bars a little closer together, and therefore does not permit of special characters of a large size. Tabulators on Billing Machines. It is absolutely essential that every billing machine be furnished with either a single-stop (known as a column-stop) tabulator or a decimal tabulator, preferably the latter. A single-stop tabulator is used as follows: On the billing machine frame rests a bar on which metal stops or pegs are placed at predetermined intervals. By pressing the column stop, the carriage holding the paper is released, and jumps automatically to the first stop. After the information is written, the stop is again pressed, and the machine jumps automatically to the next printing point. The following example shows the use of the column stop: John Jones Marion, Ind. XXV A. B. Smith Washington, D. C. XXX G. Barnes Seattle, Wash. XXX The following example shows the use of the decimal tabulator: 10.50 .50 150.25 15560.65 With the decimal tabulator, the operator would press the tens key, which automatically places the carriage in a position to begin 294 BILLING AXD ORDER RECORDIXO 51 writing the amount 10.50. If the cohimn stop were used for this purpose, it would have stopped the machine at the period point, and necessitated the operator pushing the carriage two points to the riglit in order to begin printing two points to the left of the decimal points. Some operators place the column stop so that the machine always stops at the tens point, and if an amount of LOO or less is to be written, they use the space key. This is quicker than to always stop at the decimal point and then position the carriage properly by hand. However, where any tabulated work involving figures which vary greatl} is to be done, it is decided economy to use a decimal tabulator. Most operators do not see the advantage of using tabulators, and in many instances will continue to waste time spacing the machine with the space bar. If they would avail themselves of the tabulator device they would jump from one part of the line to the next desired point instantaneously. It should be remembered that billing work is a constant repetition of certain manual movements. If one movement in ten can be eliminated, it is equivalent to saving one hour in ten. To show the great advantage of, and it might be said, necessity for, time saving and short cuts in large estal)lishments, a device used by Butler Bros., a large mail-order house with warehouses in several of the large cities, is an excellent illustration. This particular scheme is used in Jersey City, N. J. It consists of two rows of billing machine operators (sixty-five in number) placed in parallel positions with an endless belt running between them, and two check- ing clerks at the end of the row. As fast as the operators transcribe the orders onto the order forms, the original and typewritten order (with departmental copies) are placed on the belt and carried auto- matically to the checker's desk. The rubl)er belt passes over a pulley at the edge of the checker's desk, which allows the orders to fall from the belt to the desk. The belt returns to the end of the line, where it revolves around another pulley. The pcnvcr is furnished by a small electric mnloi'. Arrangement of Billing Machines in Large Business Houses. In large businesses in tlie wholesale dry goods, wholesale notions, and kindred lines, special arrangement enables a few billing machines to accomplish a large amount of billing. In these classes of business, it is the custom to call the lot number, class of goods, and the number of yards to the bill-clerk, wjio in turn enters it on the bill and dupli- 295 52 BILLIXC; AND ORDEli RKCORDIXG ci\U\ Tlic systtMU used Avill be descrihed elsewliciv. Hciv It i.s desired to toueli u})()n the niovable-platt'onn idea only. The operator is seated on an elevated platform on which is placed the billing ma- chine and the chair. This platform has rollers, and can be moved in the aisle between two rows of counters on which the fjoods to be shipped are placed. As soon as the callers call off the lot luimbers, description, and quantities of one shipment, the billing machine operator moves the ])latforni to the next lot of goods, which enables him to hear the caller clearly wherever the caller may be. If the bill clerk were permanently located in one portion of the room, he would be liable to make errors through misunderstanding the caller. A scheme wdiich is largely used in those classes of business which demand the "call off system" or, as they term it, "billing from call" is to call off the word sixty-five as if it were sixity-five, and the word fijty-five as if it w^ere fif'dy-five. This prevents confusion between these amounts wdiich sound so much alike. Some firms for sixty-five use the term sticky-five. Use of Computing Machines in Connection with Billing. Many firms use computing machines such as the comptometer for proving the extensions on invoices. With a machine of this character, it is possible to figure all of the extensions. The machine at the same time automatically adds the totals, and, if there are discounts to be taken off the bill, this operation can be performed without clearing the machine. For instance, in the following example: 12 yards lace 50 $ 6.00 15 yards niching 10 1.50 24 doz. hdchfs. 12.00 288.00 $295 . 50 25% 221.63 By clearing the machine, is meant pulling the handle which returns all of the wheels to for the beginning of a new" computation. Without desiring to enter into the mechanical merits of adding machines, either listing or non-listing machines, it is important to touch upon the various arguments used in favor of billing machines with adding attachments and without them. The flat-bed machines were the first to use the combined machines. The plan in use was to place two recording registers on the billing machine and prove the total of each bill separately with one register, and accumulate the totals of all the bills for the day on the other 296 BILLING AND ORDER RECORDING 53 register. Certain firms used extra recording registers for recording the totals of extra columns on the sales sheets in which they analyzed the sales according to classes of goods or some other classification. Some firms did not add the bills when making the extensions of tlie prices and quantities, but left the additions for the adding machine. The only draw-back to this plan was that if the operator copied a wrong total from the register dial it caused trouble. This fault, if fault it may be called, as it is not the fault of the machine, but of the operator, has been corrected by placing a subtracting device on the late models of combined billing and adding machines, wiiereby the substracting device is thrown into action when the total of the bill is being written. If the correct amount of the bill is written on the invoice, the dial figures all turn to ciphers, which indicates that the amount has been correctly transcribed by the operator. Other improvements will likely follow in the many machines which are being placed upon the market. See Fig. 29 on Page 67. Some firms prefer to do all the billing as one operation, and use a separate or computing machine, as the case may be, for proving the additions at the end of the day. The reason is that by having two separate machines they can be used by different people during the day for different work. If computing machines are needed for adding, multiplying, and taking off discounts, the non-listing machines are recommended, as they are key-driven. If adding machines are needed when printed lists are wanted of all additions, then listing machines are recom- mended. The general public has recognized that each class of machine has its separate use. Some firms check the totals of listing machines with non-listing machines, hi order to save time and paper. Non-listuig machines are used for taking a record of rolls and yards of cloth during inventory time, and later are used to multiply the extensions. Some dry goods firms hire expert operators at a dollar an hour to do this class of work, as it can be done in one-fifth the time that it would otherwise take. For instance, an example in muhipli- cation, such as Ifi2 X ^'5-5, would take approximately ten seconds to write down, multij)ly, and set down the figun-s. With a tnnltij)Iying machine mentioned above, it can be done in two seconds. With listnig adding machines, ('f|ii;illy v;ihi;ililc rrsnlls can be obtained. In certain classes of work, sncli ;is collccijon ielters in 297 54 BILT>TXG AND ORDER RECORDING banks where there are rows of figures representing the various checks^ and tj'pewritten information, such as description of endorsements, it is much faster to place the sheets in the ailding machine and list the amounts thereon and automatically print the total with the adding machine. This avoids the trouble due to operators print- ing wrong totals on the billing machhie. The typewritten infor- mation is then put in on the t}^ewriter or billing machine. There is this to be said, however, if an operator prints a wrong amount on a listing adding machine, the answer will be incorrect, but the machine will print a correct total of the figures printed by the machine. A listing machine can be equipped with a wide carriage and used for printing lists of figures just the same as a typewriter. Time should never be wasted printing a statement covering rows of tabulated figures on any t}^ewriter, and then taking the statement to an adding machine and adding the columns to prove them, if it can possibly be arranged to make up the entire statement on the listing machine. Listing machines are now prepared to manifold at least two extra copies, and are equipped with column tabulators. For adding a number of columns, with or w'ithout a grand total column at either the right or left side of the book or sheet, and where the items are written one at a time in different columns, the combined t^'pewriter and adding machine is recommended. One such is shown in Fig. 22. COLORED SHEETS The "colored sheet system" indicated below makes it unnec-essary to refer to the written matter for distribution. A glance indicates the department or service for which every slip is intended. The distril)u- tion may be as follows: The ofiice record (register) may l)e filed numerically; The order book copies alphabetically; The requisitions by departments; The shipping instructions, chronologically; The salesman's records, territorially; The cost sheets, according to classification. One copy may also be filed geogruphically for comparison of results. This furnishes a complete record and makes reference easy.* *As a general rule, the "order acknowledgment" has been handled separately, although it is possible to include it in tlie one writing. 298 BILLING AND ORDER RECORDING 55 This summary illustrates the use of the color scheme, and gives a brief hint of the plan usually followed in filing order sheets for various departments. It should be remembered that the best billing and order plan in the world can be made the most abject failure, if proper attention is not given to the proper filing of sheets. ^ For example, if clerks in looking for a certain order could always give the order number, but not the name of the customer, it would Fig. 22. Combined Typewriter and Adding Machine. Elliott- Fisher Co. be wrong to file the orders alphabetically; in such cases, file the orders numerically. Always file papers according to the information which the clerk or executive will have at hand when looking up the same. Sometimes, papers will l>e just as easily found when filed numerically as alphabetically. Reference Information. One very imj)ortant feature to remem- ber in designing forms is to place all reference information on the right-hand side of the sheet. In leafing loose sheets held in binders, it will be easy to find th? desired sheet if this plan is followed; but, if the reference numbers are placed on the left side of the .sheet, it will ))e necessary to open the binder relatively wide to .see each number. In the illustration, Fig. 23, it will be noted that the order num- ber is properly placed, and that the })rinted headings are aligned 299 56 BUJJXC; AM) OKDKK RKCOUDTXG horizontally at the hack, which permits all typewritten matter to be started evenly. The value of this point was touched upon in a previous chapter, as to saving of time in the execution of tlie work. In this particular form, however, there is t^'pewritten matter to the left of the headings, such as account of, ship to, etc. The marginal stop on the billing machine should be set for the first t\^ewritten mat- ter, and tabulator stops used for all matter to the right on each line. COMPOUND FORMS One of the most ett'ective means of short-cutting work, where the nature of the business will permit, is through the use of compound forms. These forms derived their name from the combination of order and billing v/ork on one set of sheets and accomplish in one operation, sometimes in two, all the clerical work incident to the receipt, registering, acknowledgment, billing, charging, and shipping of an order. It can be readily seen that if a firm can lill its orders completely, or almost so, that there is no use to wait until the order is filled before billing it. It is a great deal easier to place another sheet along with the order forms and use it for an invoice. It is generally placed as the top sheet of the set, and therefore it is the original. Goods Shipped for Entire Order. If the miture of the business is such that the firm can always fill its orders completely, it is per- fectly safe to enter prices, make the extensions, and complete the invoice, with the possible exception of the date when the goods are finally shipped, if they cannot be sent out the same day. In such cases, a printed heading is provided on the invoice, opposite which the shipping date is typewritten. This then becomes the date of invoice. Goods Almost Completely Shipped. If it is possible that one, two, or three items cannot be shipped at all, or in part only, it is the custom to hold the invoice (and copy, or copies, when there are any) in the office, arranged alphabetically according to customers, pending receipt of information from the shipping department as to quantities, weights, etc., of goods shipped. This invoice is an exact typewritten duplicate of the balance of the order forms, and has the heading for quantities to be shipped and, usually, prices for each article. Neither the extensions of the items nor the footing of the bill have been made. 300 BILLING AXD ORDER RECORDING 57 (renerally, a copy of the order showing the quantities, weights, or measures marked thereon is handed to the office. The copy of tlie invoice is then placed in the machine, and the prices, extensions, and r ■ 1 lli sti-e — ■ o 2 ? S^ footings made to correspond with the items which huAe hecn shipped. The question arises in regard to the items which have not been shipj)e(l. Some firms print on the bottom of each invoice the sentence: All items which are imi priced nor extended have hee)i "hack-ordered" and will be shipped later. Other firms tyj^ewrite an X in tlie price column 301 :)S BITJJNT; and order RErORDIXG t)r number the items which have not been shipped. They then make a written explanation on the l)ottom of the invoice re FiK- 24. Conipourxl Foniis, Showing Invoice uiid Olllce liecords heininylon Typewriter Co, 303 (M) HIMJXC AND OUDKll UKCORDTXG In la I'ijji.' stores like John Wunanuker's, the customers arc given l)v the credit man a brass check with their number marked thereon. This shows each clerk with whom they deal that they are entitled to credit, without having them identified each time they make a pur- chase. In smaller cities, the clerks become familiar with all the charge customers, and any plan of this character is not needed. The sales slips are all numbered from 1 to 50, and the auditing department checks back each day all the slips of the different sales- people to see if all the slips have been accounted for. Some stores have a chart on the cashier's desk ivith the clerk's number at the top of each column, and the check numbers listed serially in each column, as shown in Table I. TABLE I CHART FOR CHECKING RETAIL SALES SLIPS 1 2 3 4 5 ' 7 8 9 10 11 12 13 14 15 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 ' 3 3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 D ') 5 5 5 5 5 6 6 6 6 6 6 6 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 As fast as the checks are received at the cashier's desk they are checked. If one of the clerks should sell goods to a friend, and send one slip to the packer, but destroy the cashier's copy, the fraud would be detected, as the next slip which would be sent in would show by the number that the previous one was missing. The matter could be investigated immediately. The auditing depart- ments of different stores handle the detail of the work in various ways — which, however, are about the same. Some stores, after they prove that there are no slips missing by checking the slips by the serial numbers, add them up on adding machines. As some stores do not care for a list of the slips, they use a non-listing machine, such as the comptometer. Other stores add the sales of each clerk separately, and add die totals of all the clerks to secure the total sales. The 304 BILLING VXD ORDER RECORDING 61 total sales of each clerk are then entered on a statistical sheet ^vllich shows a comparison of the total daily sales of each clerk for the month, as shown in Table II, The slips are then sorted according to departments, then added again, and similar information written on statistical sheets with the department numbers at the top, instead of the clerk numbers. The grand totals must agree to prove the work. The slips are then sorted according to customers. If Mrs. J. B. Jackson has bought goods in three different departments, the auditing department will pin the three slips together and mark the total of the slips to be charged to her account on the back of the under slip. If there are twelve bill clerks and twelve billing ma- TABLE II COMPARISON OF DAILY SALES OF CLERKS Clerk No. Total 335 38 492 53 etc. Days etc. 30 50 56 74 etc. 55 45 87 55 etc. 3 47 70 35 35 9 76 87 23 etc. etc. 6 56 78 54 09 etc. 34 25 19 89 etc. 40 56 86 75 etc. 34 79 90 52 etc. chines, all the slips will then be assorted into twelve lots, each lot representing the number of accounts taken care of by each bill clerk. Each bill clerk receives the slips in alphabetical order. The monthly folded bills are arranged in the same order. These are held in binders — a special kind, such as the Tengwall, being used — from which the bills can })e easily and ({uickly removed. Some firms prefer to file daily in vertical files the current mondily bills, uj)()n which the charges are Ix^'ing made. Some machines, .such as the Smith Premier and the Elliott-Fisher, have a carbon roll on their machines for manifolding the.se duplicate folded Vjills without handling the carbon paper. These attachments were especially designed for this particular work. After the operator has entered the charges of the three slips for Mrs. J. B. Jackson, or any other customer having more than one .^05 r.2 BILLING AND ORDER RECORDING slip for the j)ivvii)us day's ])urcliases, slu' compares the total she lius placed on the bill with the total marked on the back of the slips by the auditing department. Fig. 25 shows samples of folded monthly retail bills. The black showing under the top sheet, which is turned over, is the carbon paper used with the bills when made on machines not equipped with the carbon-roll attachment. Some firms place the carbon paper between the sheets at the beginning of the month, and leave it there; others place the carbon paper between the sheets for ever\' charge which is made to the bill. After all the charges iiave been made, the operator adds up on the adding machine the totals of all the last charges on the various bills to which charges have been made that day. This total must agree with the amount which the auditing department handed over to each bill clerk to be entered upon these bills. The Smith Premier and Elliott-Fisher have tally-strip devices w^hich automatically record the total of each charge made to all the various bills each day. This paper strip, when added up, must agree with the total of the auditing department figures. At the end of the month, about the 26th, most firms begin to total the columns of the bill. The final total of each bill added to the total of every other bill must give a grand total ec[ual to all the charges for the month. This proves that each bill has been correctly added. The balance due from the previous bills is then brought forward, and any payments made during the month deducted, and the bill footed. All credits for returned goods are entered during the month the same as the charges, excepting that they are placed in a separate column provided for that purpose, and deducted at the end of the month from the charges. Some firms post the total charges and credits for the month to the ledger in two lump sums. Other firms prefer to post the total of each day's charges to the ledger daily, instead of letting the posting go until the end of the month. This is a matter to be decided from a bookkeeping standpoint. If the bookkeepers have the current month's charges in the ledger, it saves referring to the bills at the bill clerk's desk for information or the current month's charges. After the bills have been sent out, the duplicates are filed away. The best known way to file them is alphabetically; each customer's 306 Li.t-^'": K:mi^tKComN\ aBa""'"H O Fig. 2.-,. Monthly Stalon.ei.ts ..f K.-tail Dry (i.x.ds H.-ises Rr.minr/lnn Tupewrrlcr C<-. 307 / c? (U 0) ( • 1 II 1 11 a v_^ / r z-^" 308 BILLING AXl) ORDER RECORDLXG 65 bill for the various months together. This is in contrast to the plan of filing each month's bills away separately. If it is wished to refer to any one ])erson's c-harges for a given number of months it is neces- sary, under the latter ])laii, to refer to several binders. One of the devices which did more to permit cylinder machines to do billing successfully is shown in Fig. 2(3. Formerly, when two i'ib'. 27. Kciuiiigtoii Uilliiig .Machines or more sheets of ])aj)er were inserted in a cylinder machin<>, the small feed roll wliicli rests against die large rid)l)er ))l;itcn, fed the under ])iipers at a dilVcrcnt sjx'cd llian those sliee(s which rested against die large roll. The rcsnil \v;is ih.it die papers were fed un- evenly into die machine. When removed, it was imj)ossible to vv- place them in the .same relation in which diey were before. The device! 11 nslni ted fnmishes a resting j)lace for evenly placing all die .sheets in the machine by j)ressing a release lever which draws the feed rolls away from the large roll until the papers or sheets are 30'J 00 ]51IJJ.\(; AND ORDKK UKCOHDIXC] proj)erly plinvtl in the iMjicliiiK'. Startccl i-vcnly, tlicy will iiiv;iri;il)ly feed evenly. This is of particular advanta^i'e in retail dry n^oods hilling, where a sheet is placed iii and out of a machine as many as thirty times a month. If the top of the bill is each time started from the same starting point, namely, the top of the statement, it will feed correctly to the next writing point on the statement without any adjust- Fig.2S. Smith Premier Di y (joods Billing Machine ment. The Remington, Fig, 27, and Underwood machines are equipped with devices for the same purpose. The Smith Premier, Fig. 28, and the Elliott-Fisher machines are equipped with rolls of carbon which automatically manifold folded monthly bill forms. DEVICES OF THE FUTURE One of the successful devices which is being perfected at this time is a combination of an adding machine and a cylinder billing machine which can be operated as a combined machine or sepa- rately as two machines, and may be actually removed, one from another. The idea is to have a platen or roll which can act as shuttle between the typewriter and the adding machine. By press- ing a })utton, the roll travels from the typewriter to the adding machine. This scheme has the same advantage as has the farmer who can operate his horses singly or in pairs. The adding machine people have been experimenting and grad- ually increasing the ])rinting capacity of their machines. They are now able to print the different months of the year and some other 310 BILLING AXD ORDER RF.CORDING 67 abbreviations for monthly statement work. Further developments can be expected along this line. Adding machines which list are a very important factor in office work and their capacity is so large for Fig. 29. .\ilding aud Subtracting Machine ComlMned with Cylinder Billing Machine Jicininytun Ti/jx'wrilcr Co. certain classes of work that sj)ace does not permit of detailed treat- ment here. While marvelons inij)n)V(Mneiits have been made in the last decade, the next one promises etpially well, esi)ecially in the adding-machine line. 311 THE SHIPPING DEPARTMENT INTRODUCTION The average manager of a business has but a rudimentary knowledge of traffic affairs as they relate to the shipment of his goods. He does not know that he is receiving the lowest rates to wliich he is entitled, or that the most favorable classification is applied to his shipments. A large percentage — probably a majority — of the concerns which do any considerable amount of shipping, or receive a large quantity of freight, lose annually in overcharges, due to improper classifications, defective packing, and a general lack of knowledge of the subject, a much larger sum than would be required to pay the salary of a competent traffic manager. There are so many intricate details to be considered in the shipping problem, that the subject requires special study, and shippers whose volume of business is even moderate find it profitable to employ a traffic manager. Not every shipper is doing a business of sufficient volume to warrant the employment of a man to devote his entire time to this question, but, in the organization of every business doing even a small amount of shipping, there shonld be one man who will make a study of traffic matters. lie need not have an intimate knowledge of the entire subject of traffic att'airs, but he should be posted on all questions that have a bearing on the shipment of the goods of his house. When no regular traffic manager is employed, the duties of the position fall on the shipj)ing clerk; h(> is the logical man to make a study of the subject. Considered from the standpoint of his knowledge of shi{)ping requirements, classifications, niatnier of packing, and the applica- tion of special rates, a man who has had exj)erience in the freight department of a railroad makes the most successful traffic manager. Such a man may not be fitted to organize and handle the work of 313 2 THE SHIPPING DEPARTMENT the shipping department but, in a concern large enough to require the services of a traffic manager, there will be work enough to war- rant the employment of an assistant to look after this branch of the work. THE SHIPPING CLERK In this discussion of the organization of the shipping depart- ment, the shipping clerk will be considered as assuming the duties of traflSc manager, as well as those that usually pertain to his position. He will be at the head and have full charge of the department, keep- ing such records as may be called for by the business. It is the duty of the shipping clerk to see that all goods are shipped promptly, packed and described to secure the most favor- able rates, and properly routed. He must have a checking system that will enable him to locate errors and to know that all goods called for by an order have been shipped. He will be assisted by such packers, checkers, and porters as may be required to handle the work. The packers will receive the goods called for by an order from the stock men, and will pack them properly. They will check all goods packed against the order. In this, they will be assisted by checkers, who check the goods received on the shipping floor and again when they are packed. Discrepancies must be reported at once and adjusted immediately. In some concerns, the shipping clerk is also the stock clerk, in which case he has charge of the actual filling of the orders. He is assisted by stock men, who select the goods and assemble the orders under his direction. Like the head of any other department, the shipping clerk should have full control of his department. No other person in the organi- zation should^be permitted to make shipments. Concerns have been found in which it was the custom for different employes to ship small articles without the knowledge of the shipping clerk. Invari- ably, this leads to mistakes and results in blame being wrongfully placed on the shoulders of the shipping clerk. And even greater damage is done in the disruption of the organization. Information Required. The shipping clerk should be fully informed on all traffic questions that affect the shipment of the 314 THE SHIPPING DEPARTMENT 3 goods of his house. Of first importance is a knowledge of classifica- tions, that he may know that his shipments are placed in the lowest classification to which they are entitled. Copies of the classifications can be obtained from any local freight office. In this country there are three principal classifications, these being the official, governing the eastern territory; western, governing western territory; southern, governing southern territory. There are also a few special classifications governing classifications in certain states. While some attempt at uniform classifica- tion has been made, the several classifications show many vari- ations, the same article taking different classifications in diflierent territories. When classifications are received, they must be carefully studied by the shipping clerk that he may really understand to what classi- fications his goods are entitled. It might be supposed that a certain article or class of goods would always take the same classification but this is not the case; other questions than the name have a bearing on the question. The manner of packing goods very often determines the classi- fication. Certain articles are placed in a lower classification if boxed than they would be if crated. This is specially true of goods that are liable to damage in transit. Many shippers make a practice of crating goods because it can be done more cheaply than boxing, without realizing that the difference in packing cost is more than offset by the increase in the freight rate. The classification is also sometimes determined by the manner in which the goods are described. It is necessary, therefore, to study the classifications with reference to the description that will insure the most favorable rate. However, false descriptions made for the purpose of securing a lower classification must be avoided, as the Interstate Commerce Act provides a heavy penalty for such falsifica- tion. But there may be several different descriptions which legiti- mately apply to a given article, each placing it in a different class. A case in point: The western classification made no provision for filing cabinets in carload lots, with the result that a carload ship- ment, described as filing cabinets, took the rate provided for less than carload lots. But the same classification gave a lower classi- fication, consequently a lower rate, on office furniture in carload lots. 3ir, 4 THE SHIPPTXG DEPARTMENT Filing cabinets bein*; olHtr furniture, it was (.Mitiicly legitimate to describe such sliipnients as ollice furniture. Another illustration of the effect of description on the classifica- tion is found in shipments of carriages. The classification, and con- sequent rate, on this commodity is based on the space that it will require, rather than on the rate. If shipped knocked down and properly crated, with the dimensions stated on the shipping bill, a carriage takes a lower classification than if shipped assembled, or if the dimensions of the crate are omitted. These illustrations are sufficient to show the importance of a thorough knowledge of the provisions of the different classifications. The shipping clerk who would give the best service to his house should make a study of this subject, even if he is obliged to take the classifications home and study them at night. Every shipper should see that his shipping clerk is supplied with copies of classifications governing the territory in which he is doing business, and give him an opportunity to learn their provisions in respect to the commodities which he ships. Class Rates. A class rate, as the name implies, is one based on the classification. All commodities are divided into classes, six in number, and all commodities of the same class — with certain excep- tions, explained later — take the same rate. Schedules of rates be- tween given points, based on the class, are prepared by the classifica- tion committees, but before being put into effect, they must, in case they apply between points in different states, be submitted to the Interstate Commerce Commission for approval. While not a rate- making body, the commission is a rate-governing body, constituting, in a certain sense, a board of arbitration between shippers and trans- portation companies. The rates being based on the classes — the higher the class, the higher the rate. To determine the rate, it is first necessary to find the classification; reference to the rate schedule will show the rate for each class. Commodity Rates. A commodity rate is one applying to a special commodity, between definitely siateQ pomis. Commoditv rates are established by the railroads to meet some special conditioii- and with these the classification committees have nothing to Sc A commodity rate does not apply to articles not named in the 316 THE SHIPPING DEPARTMENT o tariff even though they are of a shnilar nature, nor do they api)ly between points not specified in the special tariti". A commodity rate is, in elTect, a special rate; it offers special inducements for the ship- ment of certain commodities, but is not intended to favor any one shipper. The commodity rate is for the benefit of all shippers of the commodity named. The volume of traffic is the chief factor in establishing rates, either regular or special. It is an especially important factor in establishing a commodity rate. In a given community, some one commodity may be produced in large quantities. Perhaps it is a raw material which must be transported to certain manufacturing centers. To encourage the development of the industry, thereby creating a large volume of traffic, the railroads leading from the point where the traffic originates establish a commodity rate to other points, where the raw material can be used to ad\'antage by the manufacturer. Or, perhaps, important manufacturers are located on other roads, in which case connecting lines join with the originating road and issue what is known as a jo//;/ tariff. This enables the pro- ducer to deliver his raw material to the manufacturer on faxorable terms, when to pay class rates might compel him to abandon the en- terprise, with a consequent loss of traffic to the railroads. This discriminates against no one, since every shipper of the ])articular commodity between the ])oints named is entitled to the s])ecial com- modity rate. Frequently, however, a commodity rate exists l)ct\veen certain points which might, under certain conditions, be taken ad\antage of by a shipper located at a point outside of those named in the commodity tariff . For illustration, a manufacturer in Peoria, Ilhnois, is shipping a commodity on which a special rate is granted between Chicago and Milwaukee, })ut takes a class rate from the ])oint of shipment. lie makes a siiipment to Milwaukee and pays the through class rate provided from t\\v point of shipment, when by |)roi)('r bill- ing he would ha\e j)aid the class rate to Chicago, and secured the benefit of the commodity rate from that ])oint to Milwaukee. A lack of knowledge of commodity rates in ell'ect in the inainifneturer's territory has resulted in an uimecessary e\])ense a loss of money. The claim might be made that the billing clerk at the local freight office should have given the shipjici- (lie benelit of the lowest 317 6 THE SIIIPPIXG DEPARTMENT rate. But lie will fall back on the classification and be prepared to show that he has given the only rate quoted on shipments from Peoria to Milwaukee, which is the class rate. It is no part of his duties to keep posted on coriimodity rates granted by another road, "((•hile it is distinctly to the interest of the manufacturer to know of the existence of all such rates applying to his product. Freight Tariffs. The Interstate Commerce Act provides that two copies of every freight tariff issued by th(> railroads shall be placed on file at each freight office, for the inspection of the public. Since the rates must be made public, the railroads do not object to supply- ing shippers with copies of the tariffs applying to their product. Through the local freight agent, copies of all tariffs applying from the point of shipment can be obtained. It has been shown that, in the case of commodity rates, copies of tariffs from the point of shipment are not always sufficient. It is necessary to obtain, from connecting lines reaching the territory in which the trade of the house lies, copies of all special tariffs apply- ing to the commodities shipped. The freight departments of all railroads, through their solicitors, make a practice of supplying copies of all regular and special tariffs to all large shippers on their lines, and to shippers on connecting lines who are in a position to divert traffic to them. Any shipper who has been overlooked, should write to the freight departments of all lines in his territory asking to be placed on the mailing list to receive copies of all tariffs affecting his product. By doing this, he will secure copies of all such tariffs as soon as issued. The subject of commodity rates is one of the most vexing with which the shipping clerk has to deal, as it is also one of the most im- portant. To compile a complete file of special tariffs, involves close study and much labor. But when once done, it can be kept up-to- date with little difficulty, and the saving resulting will far outweigh the cost. Filing Tariffs. The manner in which freight tariffs coming into the office are filed is important, for unless properly filed and indexed they are likely to be of little value. The filing system must provide for quickly locating any tariff, and for locating all tariffs that may have a bearing on a particular case. In the average shipping clerk's office, it is not uncommon to 318 THE SHIPPING DEPARTMENT 7 find the tariffs dumped into a drawer, without regard to their order, or hung on a hook on the wall. When a rate is wanted, it is necessary to search through the tariffs until one giving the rate is found. The chances are that the first rate found will be used, regardless of the fact that another tariff shows a special and lower rate. i BURL ly^ Fig. 1. Vertical File of Indexed Folders for Railroad Tariffs A very satisfactory file for freight tariffs is the vertical file, and one drawer will hold all of tiie tariffs required by the average shipper. If a two-drawer cabinet is provided, the shipping clerk will usually find other uses for the extra drawer. Each railroad whose tariffs are on file should be assiirned a folder, and the folders should be filed alphabetically under the names of the railroads, as shown in Fig. 1. All tariffs from one railroad should be filed in the folder assigned to that road, and arranged according to their numbers. All railroads number their tariffs and, in correspondence, refer to them by number. Reference to the tariffs will be facilitated, therefore, if those of each railroad are kept in numerical setjuence. Loose-leaf binders are sometimes used for filing tariffs, but not all tariffs are in proper shape for punching to fit the binder. Another 319 8 THE SHIPPING DEPARTMENT disadvantage in using a loose-leaf binder is that freight tariff's are not uniform in size, resulting in an awkward, unwieldy book. For these reasons, the vertical file is found more satisfactory. The Index. Since the tariff folders are filed in alphabetical sequence, no index is required to locate the tariffs of a given road, but a cross-index to locate all tariffs that apply to a given point, is a necessity. This index should be in card form, a card being used for each town to which the house ships, or is likely to ship, its products. I PENNA. 1 ^ai_8rw.i ■■ Town via RAILROADS TARIFF NO. CLASS OR COMMODITV REMARKS Fig. 2. Cross-Index to Tariff File A very satisfactory form of card for this cross-index is shown in Fig. 2, which also shows the manner of filing. At the head of the card is the name of the town, and the name of the railroad on which it is located. Below the heading, the first column shows the names of all railroads issuing tariffs to the town in question, whether or not the town is located on the road. Following this are columns for the number of the tariff and for either commodity or class rates. These cards are filed in the same manner as the tariff folders — alphabetically by names of the railroads. A guide card is provided for each road and all cards representing towns on that road are filed in alphabetical order behind the guide card. 320 THE SHIPPING DEPARTMENT 9 Suppose a rate is wanted from a point on the Delaware, Lacka- wana & Western, to a point on the Burlington. Reference to the Burlington tariffs does not give the rate, for the reason that the Bur- lington does not issue tariffs from points on the D. L. & W., but reference to the card shows that four roads issue tariffs from Buffalo to Burlington points, one of them being a commodity tariff. Refer- ence to the commodity tariff shows that the special rate applies from To Via FROM |5T CLASS 2ND CLA55 3Rt) CLASS 4-TH CLASS 5TH CLASS 6TH CLASS . Fig. 3. Card for Class Rates a point in Ohio to Chicago, a connecting point with the Burlington. By proper routing, this special rate can be taken advantage of, class rates applying the balance of the distance. Without the index, it would be necessary to look through several folders, with die possi- bility that the special tariff might be overlooked. Condensed Rate File. A condensed rate file covering a definile territory will prove a convenience to most shippers. The trade of most houses is confined to a certain definite and rather limited ter- ritory. A manufacturer may make an occasional shipment to a point outside of his regular territory, but, as a rule, his shipments will be confined within certain limits. This is even more true of the jobber and tiie wholesaler. If a special rate file, covering the particular territory in which the shipper's trade lies, is prepanjd, it will be found convenient for reference, and will save consulting the tariff files whenever a rate is 321 U) THE SHIPPING DEPARTjNIENT wanted. Such a file can be arranged on cards, or in a small loose- leaf book. One card or sheet should be used for each town, the name of the town being written at the head of the card. The card should show the rates for all classes from the shipping point to the destination, as well as the route. It may be necessary to record rates from more than one shipping point. A manufacturer may have two or more shipping points, and it is important to know Article HOW PACKED CLASS CLASSIFICATIONJ, REMARKS Fig. 4. Card Index for Classiflcatious from which points he can secure the most favorable rates. It is also advisable to include the shipping points of the chief competitors, that they may be given due consideration in meeting competition. Fig. 3 shows the form of card for this rate file. The cards should be filed alphabetically, and it is w^ell to include cards for some of the principal towns outside of, but convenient to, the regular ter- ritory. The rates for the different classes, rather than on specific articles, are given for the reason that the classification is more likely to change than the rate. If the rate on a certain article is given, and the classification of that article is given, should the classification of that article be changed, it would be necessary to rewrite the entire index. It is much less difficult to change the record of the classifica- tion of one article than to revise all of the rates. Classification Index. For convenient reference, the shipping clerk should prepare an index showing the classification of all articles 322 THE SHIPPING DEPARTMENT n hat he is obliged to ship. This classification index should be on cards or in loose leaf, whichever is used for the rate file. One sheet is used for each article, the name of the article being written at the top. The record should show how the article is packed, the class, and the classification in which it is found. As has been stated, more than one class may apply to a given article, depending on the manner Town ARTICLE HOW PACKED FROM RATE TARIFF NO. R. R. Fif?- 5. Card for Commodity Rates of packing; an article may take the first-class rate if boxed, or double first-class if crated. In such cases, both classes with the manner of packing should be shown. These classification sheets should be filed alphabetically in the file used for the rate cards, and they should be printed on stock of a different color. Most shipper's will need but a few of these sheets as the number of articles shipped l)y one house is small, as a rule. If a large number of articles is shipped, the classification index is of even greater importance. A suitable form for this index is shown in Fig. 4. Commodity=Rate File. When any par( of (lie goods shij)pe(l are subject to commodity rales, u file of commodity rates is fully as im- portant as class rates. A commodity-rate file is arranged on similar lines to the file of class rates. A card or sheet is used for each town to which commodity rates apply, and the cards are filed alphabetically by names of towns. These cards can be filed with the class rates, but a distinctive color should be used. 323 12 TTIK SIIIPPTXn DEPARTMEXT The m-onl should <;iv(.' (he iiaiiu's of tlie artick-s taking com- modity rates, manner of packing, the point from which the rate applies, the rate, tlie number of the tariff, and the name of the issuing railroad. On the line below the name of the town appears the caption, see also. This is for the name of some other point to which a commodity rate applies. Boonie, Iowa, for instance, may not be a commodity point, though a special rate from Chicago to Clinton is in effect. The Boone card would refer to Clinton, and the card for that town would show the rate. Fig. 5 shows a form for com- modity rates. To compile such a record of rates as has been described, requires an initial expenditure of much labor, but is a profitable investment. ^^'^len once compiled, changes can be recorded with little troul)le. These files will always be valuable for reference, not alone to the ship- ping clerk but to the sales manager and the purchasing agent as well. A comprehensive knowledge of classifications and rates will prove valuable not only to the shipper, but to the receiver of freight. It will save any merchant many dollars in freight charges on goods purchased f. o. b. point of shipment. The shipper may not pack his goods in a manner to secure the lowest rate, or he may not give the proper description in the shipping bill. If his attention is called to the matter by a customer, he probably will make the necessary changes in his methods. Even the proprietor of a small retail business will find a study of this subject a paying investment. The writer has knowledge of a case in which the owner of a general store saved some -SI 65.00 in one year by carefully checking every freight bill received, making claims for overcharges, and watching the packing and routing of his goods. Surely that amount would be worth saving, even to a house transacting a much larger volume of business. Routing Shipments. One of the most important duties of the shipping clerk is the proper routing of his shipments. Like classi- fications and rates, the subject requires careful study. In too many cases this subject receives little attention, but by exercising care in routing shipments, the shipping clerk can be of material assistance to the sales department, and, incidentally, to the customers of his house. Routing frequently affects the rate. It might appear logical to suppose that the rate between two given points would be the same, ?2J THE SIIIPPIXG DEPARTMENT 13 regardless of the route; but this is uot the case. Of two routes to a given point, one may be longer than the other. If shipping and destination points happen to be in different states, the provision of the Interstate Commerce Act which forbids a higher rate for a short haul than for a long haul comes into play. Similar provisions apply- ing to local shipments, are found in the laws of certain states. In Iowa, for instance, such a provision covers the transportation of passengers as well as freight. One railroad is not permitted to meet the competition of another having a shorter route between two points, but must base its rate on the mileage. All of which goes to show the necessity of considering the length of the haul in routing shipments. The above conditions apply especially to shipments taking class rates, but when goods which take commodity rates are to be shipped, the question of routing is of even greater importance. It has been shown that a commodity rate may be in effect between two points on one road, or two or more roads may have issued a joint tariff which can be taken advantage of. The question of commodity rates, therefore, has a most important bearing on the routing of shipments. Another factor that has a bearing on the routing is basing points, which necessitates a knowledge of the points on which rates are based. In the territories governed by the different classifications, certain common points are used for basing rates. On shipments from the central states to southern territory, rates are based on Ohio River points, while, to western territory, they are, in many cases, based on Missouri River points. Class rates from Chicago to all Missouri River points are, as a rule, the same over all roads, but, to points beyond the IMissouri River, rates may vary from the different basing points; that is, the rate from Omaha to a western point may be less than from Kansas City, though the rate to these basing points is the same. The alert shipping clerk will learji the basing points in the territory to which he is shipping goods — which he can do by consult- ing local freight officials — and will thcTi secure tarill's from tlicse basing points to the towns ho wishes to reach. This information he will incorporate in his rate files. Not least of the factors which should be considered in routing shipments, is the accommodation of the customer. It is frequently the case, that of two roads entering a town, the freight house of one .325 14 THE SIITPPING DEPARTMENT is more conveniently located for the shipper. Rates being equal, shipments should be routed over the road from which the customer's cartage charges are the lowest. Or the customer may have a side- track to his warehouse from one road, which makes no switching charge, while on every car shipped over another road a switching charge must be paid. This charge may offset an advantage in rates. It always pays to accommodate the customer. When the wishes of the customer are knowm, they should be grantei^, within reasonable limits, even though it involves extra expense. FILLING ORDERS In all large concerns the filling of orders — that is, the assembling of the goods — is done by the stock department. The subject is here discussed in connection with the shipping department for the reason that in many houses all'orders are assembled under the direction of the shipping clerk; in others he is also the stock keeper or stores clerk. This discussion refers more especially to the filling of orders in a jobbing house, or a manufacturing business which carries goods in stock. It does not refer to those manufacturing enterprises whose orders are for goods to be manufactured. As a rule, all orders of a jobbing house should be filled the day they are received. If they cannot be filled complete, they should be filled as nearly as possible, and missing articles handled as explained later under the subject of Back Orders. There is a great chance for time saving in most houses in filling orders. In many houses, too little consideration is given to the hand- ling of goods in a manner that will save time in assembling orders. Lack of a logically planned system is responsible for much of the con- fused and confusing rush in the average shipping room, about the time that orders should be delivered to the transportation companies. Here is a case in point which came under the observation of the writer. A certain jobbing house, handling drugs and druggists' sundries, occupied a five-story building. On each floor there was a stock room in charge of a stock man, who, with the aid of such helpers as he needed, kept the stock in proper shape, and assembled the goods required from his floor to fill orders. In the drug business, the average order received" from a retailer calls for a large number of articles — it is made up of small items. 326 THE SHIPPING DEPARTMENT 15 This is especially true of orders brought in by the traveling sales- men. As a consequence, the larger part of the orders received by this house called for goods from practically every floor. The custom was to send orders first to the floor farthest from the shipping room — that is, to the fifth floor. The stock man as- sembled the goods required from his floor, placed them in a basket with the order, and sent them down to the fourth floor. Each order went from floor to floor and finally reached the shipping room — perhaps being held an hour on one floor for a single article because of other orders ahead. A result of this method was that, in the morning, the stock men on the upper floors were rushed, while those on the lower floors had no orders to fill, except those calling for goods from one floor only. In the afternoon, ,the conditions were reversed. Then the men on the upper floors had nothing to do but put their stocks in shape; those on the lower floors were busy filling orders. These conditions were not particularly objectionable so far as the stock men were concerned, as they were profitably employed, when not filling orders, in caring for their stocks; but in the shipping room great confusion resulted. Goods required to fill the day's orders did not begin to come into the shipping room until late in the day, and then they came with a rush. Hurried packing resulted in mistakes, caused disputes, and lost good customers. To overcome the difficulty, a new plan which worked admirably was perfected. A chart was prepared, along the lines of the one shown in Fig. G. On this chart, a section was set aside for each floor, and in the first colunm the classes of goods stored on each floor were listed. In the next two columns a few of the articles in each class — enough to serve as a guide — were listed, and the last column showed the floor B, meaning tlie basement. On this chart, the location of any class of goods could be seen at a glance, aiul in case of doubt al)out the class to which an article belougeil, reference to the catalogue issued by the firm gave (he desired infoi-madoii. A copy of the chart was given to the order clerk, wlio entered all orders on a billing tyj)ewrifer. In entering the order all articles were grouped by floors, starling at the fifth floor. Below (he list of articles from each floor a space was left, the first entry for the next floor being on the second line below. 327 FLOOR CHART CLASS ARTICLES ARTICLES FLOOR 51^ I 4id 35^ ' pND 151 B Fig. 6. Floor Chart for the Classification of Stoc-k 328 THE SHIPPING DEPARTMENT 17 Two copies of the order were provided for the use of the shipping clerk. AMien the orders reached his desk, he cut one copy into parts, as represented by the floors from which goods were to come. After entering the order number on the margin of each, he sent these sec- tions to the stock men. Each man assembled the goods required from his floor and sent them, with his section of the order blank, directly to the shipping room. Here they w'ere checked against the shipping clerk's copy of the order, and, as soon as all sections had been filled, the order was ready for packing. This resulted in distributing the work more evenly, and kept the goods coming regularly to the shipping room. Another method of accomplishing the same result is to make as many copies of the order as there are floors, the complete order being sent to each stock man, who fills only his part. An advan- tage of dividing the order sheet, as explained, is that the stock men have no knowledge of the names of customers. This prevents a stock man from taking a list of the firm's customers to another house — an occurrence which is not entirely unknown. Back Orders. Most concerns find it impossible to fill all orders completely; there are occasional shortages in every house. In such cases, it is the usual custom to fill all orders as nearly as possible, and forward the items that are short as soon as they are in stock, or with a later shipment. The possilnlity of these items being overlooked must be pro- vided against, and this is done by entering all items that are short on a new order. This is known as a back order. The back order should be made in duplicate and should be printed on stock of some distinctive color that will not be confused with the regular order blanks. For convenience in filing, it should also be made the same size as the regular orders. If the number of back orders is very large, a separate series of order numbers is used, but most concerns do not have a sufficient number of such orders to make this necessary. The more usual custom is to give the back order the same number as the original of which it is a part. Of the two copies of the back order, one goes to the shipping clerk, while the other is kept in the office. The office copy is used to follow up the shipment of (hyed, the back onler is sometimes made in triplicate, one copy for the receiving ck'rk, who notifies the sliipping clerk when the goods arrive. OFFICE COPY BACK ORDER OrrtPr No Ship 1-n Pi;^-t-A IQ Via fShipppH rVitp nrigin;il f ■)ndpr . lit; Back-Order Blank AMien a back order is filled, the shipping clerk returns his coj)y to the office. Invoices are made in duplicate, one copy being filed as a sales sheet. The two copies of the order are filed with the corresponding copies of the original order. A most satisfactory plan is to file one copy numerically and one alphabetically, making a cross- index. A simple form of back-order blank is shown in Fig. 7. CHECKING SHIPMENTS One of the vitally important problems in connection with shipping is the proper checking of items in each shipment. To receive com- plaints of shortages is very anno}ing to the shipper — especially so 330 THE SHIPPING DEPARTMENT 19 when he is not in position to prove that the items claimed to be short were shipped — but, rather than take the chance of losing a customer, he usually pockets the loss. Shipments should be checked at every stage in the process of filling the order, by everyone who handles the goods. The stock man should check his part of the order as he assembles the goods. o o AMERICAN MERCANTILE •CHICAGO- : CO bep tnter< ShiDD "li \/i;s ,. ., r\^«= pd Dflr.kpri Nj C.hpr.kprt bu Fntprpd hij ORDERED SHIPPED ARTICLES PRICE 1 AMOUNT TOTALS ■ Fig. 8. Order Blaak with Column for Sliipper's Check and again before he forwards them to the shipping room, or (he next floor. \Mien received in (he shipping room, the goods should be checked against the shipping clerk's order, and again just before they are packed. It should be a positive rule that all goods shall be checked when they are placed in the cases. The items should be called off by the packer as he handles them, and checked on the order by a checker. This is a safer plan than calling off the items from the order, as it insures a positive check on the items actually packed — not what should have been packed. All order blanks should be 331 20 THE SHIPPING DEPARTMENT provided widi a separate column in which to check the items actually shipped, and quantities should be entered in this column even if the order is shipped in full. The checking column on the order blank is shown in Fig. 8. If the system of entering orders includes a copy to be used as an invoice, the items are entered in this column after the shipping order is returned to the office. The initials or numbers of both packer and checker should appear on the shipping order. It is also a good plan to place in each case a packer's slip, shown in Fig. 9, giving the number or initials of the packer and instructing the customer to return the slip with any claim for shortage or dam- aged goods. In some houses, it is the custom to make the packer's slip a duplicate of the order, listing all items packed, in which case, it makes a convenient re- ceiving slip for the customer. ^Vhile not offering positive insurance against mistakes, a thorough checking system will reduce errors in packing to a minimum, and will most certainly pay for the labor mvolved. In large houses shipping a large number of packages over several different railroads, a further complication arises through the liability of deliveries being made to the wTong freight house. \Miere several hundred shipments per day are made, it is not uncommon for a teamster to leave a package at the wrong road, finding himself short on his deliveries at another road; or the mistake may be made in loading the drays. One well-known mail-order house has overcome the difficulty in a simple manner. This house is shipping several hundred pack- ages a day by freight, over eight railroads. The basis of their shipping system is a color scheme, each railroad being designated by a different color — that is, the New York Central is represented by green, the Erie by blue, etc. The shipping floor is divided into sections, one for each rail- road, and one for each express company. The low partitions that 332 In esse of C/a/m for Shortag- es or Damaged goods, or if goods are Improperty packed. tHls slip must be Return&J. AMERICAN MERCAfmLE CQ Fig. 9. Packer's Slip THE SHIPPING DEPARTMENT 21 separate the sections are painted in the colors representing the rail- roads, and over each is a sign bearing the name of the road, also printed in the corresponding color. All packages are taken directly from the packing room to the sections of the shipping floor repre- senting the roads over which they are to be shipped. In all blanks used in shipping, the same color scheme is carried out. This includes shipping orders, packing orders, invoices, ship- ping receipts, and labels. All orders are properly routed before they are distributed to the billing machine operators for entry. Each 1 FROM AMERICAN MERCANTILE CO. GHICAeO Pnr- N(% VIA n^o Fr«elgm- Agents; /n case of refasBt, aamage. oraotroj/. nattfj/ ua d^ reef and disposal orders will bo given prompttff. Fig. 1 0. Routing Package Labels operator enters orders for certain railroads — from one to three, depend- ing on the distribution of the trade — and is supplied w\\h blanks of proper color for those roads only. Every order is then entered on blanks of the color representing the railroad over which the ship- ment is routed. In Fig. 10 is shown a label which represents this color scheme. Across the end of the label is a solid block of color, with the name of the road in an open letter. All printing on the label is also of the same color. If the order is properly routed and entered, there is very little chance for shipments to go astray. On every blank and on the package itself, the color of the road is a prominent feature, and since all blanks are written at the same time, they must corre- spond. Should a package be placed in the wrong section, it is prac- tically certain that the error will be discovered when the goods are loaded on the dray. 333 22 TIIK SHIPPIXCI DKPARTMRXT EXPORT SHIPPING Export shipping is a subject about \vhich the average American house knows but little, and herein appears to lie the cause of the loss of much foreign trade. This is especially true of trade with other than English-speaking countries. But the real fault lies farther back than in the shipping department. The trouble starts in the sales department. Export business is undertaken without special preparation, and an attempt is made to apply the methods used in handling domestic trade. Special instruc- tions in regard to packing, for instance, are ignored because the American thinks he knows more than his customer in a foreign land. Before export business is even attempted, the sales department should become thoroughly familiar with conditions in the country with which it wishes to do business. Some man in the department should study the customs regulations, the descriptions necessary, the kind of packing needed, and the size of package best adapted to the country. Above all, he must study the desires of the trade, and conform to them, if he expects to make and hold customers. Special importance is attached to the question of packing and describing the goods. No matter how unreasonable the request of the customer or the foreign salesman may seem, it should be complied with, for it is made for some good reason. A request of a merchant in Omaha, ordering dry goods from Chicago, that goods ordinarily packed in a large case be packed in small oblong boxes, might very properly be ignored; but not so if the customer is located in a South American republic. Tliere, if the goods are to go to the interior, they must be transported over the mountains on the backs of pack mules. Besides making the packages of suitable size, goods for export must be packed to withstand hard usage, and must be well protected against the elements. Goods must be fully and accurately described in order that they may pass the custom house. The dimensions of each package must be shown on the shipping bills, for freight rates are based on the space occupied in the hold of the ship, rather than on weight. In a recent address on trade conditions in the Latin-American countries, W'm. Harley Porter, Deputy Captain of the Port of Cien- fuegos, during the occupation of Cuba by the United States ffovem- 334 THE SHIPPING DEPARTMENT 23 ment, made some very pertinent suggestions on these questions, some of which are published by permission — as follows: To secure South American trade, we must first train salesmen. They must make an exhaustive study of the different South American tariffs and at least know Spanish. They must be willing to accept in- structions as to shipping, and be powerful enough to insist that they be carried out literally. And it would be a good thing for them to take a kindergarten course in carpentry and blacksmithing, so that they would not continue the stupid, expensive blunders of American houses in the packing of goods. I don't know how to drive that last statement home hard enough. Our consuls plead with our exporters, and our Government distributes volumes freely on the subject, yet there is no apparent improvement. I confess that until I had some first-hand experience, I supposed that the packing evil was a convenient sort of filler, with which Consuls padded their reports for want of better material. In order to fit out the custom house of Cienfuegos, Cuba, with new office furniture, we placed an order amounting to nearly one thousand dollars with a Chicago house that brazenly advertised that it made a specialty of export business. Their booklet was encouraging, and the prices really low. So we ordered roll-top and flat-top desks, cashier's desks, office chairs, tables and card cabinets, and then worried, for fear, that the goods would not arrive before the end of the fiscal year, then rapidly approaching, in which event, our furniture appropriation would revert to the island treasury. Six weeks from the day the order reached Chicago, the goods left New York — time enough to have had them come from Hawaii. With the goods came a single invoice. The vouchers in triplicate, which must be filled properly before the account can be paid by a governmental department, had been thrown aside as of no use. To protect the exporter, a voucher was drawn, for the ship reached port on June 30, the last day of the fiscal year. Several dollars were wasted in cable messages to expedite the return of new invoices, and the goods were unpacked. Not one piece of furniture, save a few chairs, was found whole. No American, in the States, would have accepted the goods. We had paid for them. A letter of remonstrance brought back a churlish answer, written in a cocky American spirit of superiority, to the effect that possi- bly some one outside could tell that house something about packing their own goods, but they would be greatly surprised to meet such a person. The trouble lay in the thinness of the packing cases. Goods are loaded into a ship by casting a rope sling about their middle, by which they are hoisted up and let down, often with a run, into the hold. Our desks, without sufficient outer protection and not being built on the prin- ciple of a truss bridge, naturally collapsed. The cases were none too good for a railway journey, and were certain to be damaged at any Central or South American port because, in nearly every case, unloading is done from the ship to a lighter, and from the lighter, by main strength and awkwardness, to a wharf. 335 24 THE SHIPPING DEPARTMENT I cannot recall one instance in which American houses carried out instructions literally. I believe that there is a great future for an American exporter who will let the man on the ground do his own thinking, and take it for granted that he knows what he wants and how he wants it. The exasperation of a man who is weeks or months away from the markets, and who finds that substitution has been practiced, or his goods so packed that destruction was plainly inv-ited, cannot be adequately described by a man on my income. We bought a typewriter in New York, one time, for two reasons: We could get the liberal discount allowed the government if we bought direct from the maker, and we could evade a 25% duty if we received it through our custom house and not through another. Also there was a line of steamers from New York to our wharf. Some five weeks after placing the order, we were notified by an express company in Havana that it had accepted for our account a type- writer, and that when the duty, plus accrued express and forwarding charges, amounting to $45.03, were paid, it would be dispatched in our direction. We were out $40.03 because some fool shipping clerk had insisted on trying to do our heavy thinking. We had given him the name of the steamer by which the machine was to be shipped, but he had discovered, in Bome way, that steamships will not make a bill for less than a metric ton. That, he doubtless learned, would cost us $5.00. The package only weighed about 30 lbs., so he started it off by express. His brain did not carry far enough for him to learn that only one American express company crossed the Florida Strait and naturally chance took it to another company. Two changes were made in express companies before the box reached the coast and the package sauntered about in our beautiful Southland for more than a month before it landed in Havana. Had any Spanish merchant been subjected to the invariable annoy- ance which fell to our lot when: we endeavored to patronize American houses, he would have given up in despair and remembered the adage of the burnt child, forever. And, unfortunately, the carelessness of American shippers often costs the foreign merchants good, hard dollars. Tariffs in Latin- Ameri- can republics are fearfully and wonderfully made, and there is nothing that a pin-headed government employe enjoys more than inflicting a fine for a slip in compljdng with a little red tape. Here is a case in point. A large house in Mexico City bought a carload of chairs over here, and with the order sent the shipping forma prescribed by the Mexican government. A very explicit letter was sent also, saying that consular invoices would be provided by their custom house broker in Laredo, who would receive the goods at the border, but that the shipping forms must be fiUed out, each package numbered with a serial number on the forms. FuU description involved, of course, a statement as to the kind of wood used, so that the duty might be easily adjusted. The goods, however, were simply Consigned as so many bundles of chairs, weight so much. The shipping lists were ignored. The in- 336 THE SHIPPING DEPARTMENT 25 nocent receiver of those goods was fined both because they had not been properly described and because the weight was grossly understated. It cost the Mexican house $800 and when the American was asked to settle the charges caused by carelessness, or pig-headedness, he merely answered that he was not going to settle any bills with the Mexican government. The Mexican firm settled — it had to — and posted every importer in the republic in the matter, so that not only will that American house not sell any more chairs in Mexico, but Americans generally have been given another black eye. There is a good reason for careful custom regulations, and the exporter should know that they are partly for his protection. For in- stance, they usually require that a certain number, generally ten per cent, of all packages shall be opened and compared with the shipping list. If these packages, chosen at random, are correct, the consignment is de- livered. But if any variation is found, fraud is assumed, and every pack- age is thoroughly examined, usually with more or less damage. It is customary for English and German firms, in the packing of small articles, to use different colored pasteboard boxes, which are often decorated with pictures indicating the contents. For instance, in a large packing case containing a stock of gentlemen's furnishings, all collars will be in boxes of one color, socks in another, cravats in another, etc. The large case is lined with tin, by the way, and after packing, the tin joints are soldered around the top. Here is the English system: First, the email boxes, individualized as much as possible; then heavy wrapping paper, then a tin lining inside of an outer wooden casing, the latter being well made and reinforced with iron straps. Last of all, directions and addresses are stenciled in large, clear block letters. The Germans often use oiled paper between the tin and the inner packages, so that even if the tin is punctured, the oiled paper will resist the sea air, which invariably injures delicate fabrics. The American idea seems to be to put as much as possible in a large, thin box or a poorly bound bale. The European, whose agents study conditions on the ground, knows that much interior transportation in Latin America is packed by pack mule, and therefore uses medium-sized oblong boxes, two of which make a good load. I cannot emphasize too strongly the necessity for careful descrip- tion of goods to pass them through a custom house with the least incon- venience. Mixed consignments must pay the highest duty assessed against anything found in a lump or poorly described quantity. If you deal in bolts, for instance, you may not merely say 1^000^ ^X~Xt holts, but you should say whether they arc cotton, linen, or woolen. They have to know, before they can assess duty. Instead of a ringing peroration about American pluck, progressive- ness, and other non-essentials, let me give you some shipping rules, if you are going to have a try for South American trade. Secure shipping list forms beforehand and find out if consular invoices are needed. Pack your goods in small packages, for you will pay freight on metric tons and they arc based on cubic measure and not on weight. 337 26 THE SHIPPING DEPARTMENT Pack well, for tons of stuff will probably lie on your cases. Give each package a serial number and describe it by that num- ber, on the shipping forms. If your goods can be damaged by sea water, use tin-lined cases. Your invoices should show not only number, measurement, and exact contents of each package, but their gross, tare, and net weight, for in many cases the container must pay the same duty as the contents. Be sure that your forwarding agent is reliable, for the law allows him many charging privileges if you are careless in providing for con- tingencies. Contract, if you can, for through transportation and get from the transportation companies the requisite export manifests to accompany shipment. Make triplicate invoices, one to accompany the goods and two to be mailed to the consignee. One of these will be turned over to the custom officials, so in case the invoice sent with the goods fails to come through, and that often happens, the triplicate can be accepted. With- out an invoice your goods cannot leave the ship, and I know of cases where cargoes have been held awaiting invoices for eight weeks. And, in conclusion, remember that sentiment is not the foundation for foreign trade. If we sell abroad we must do so on merit and by foreign systems — not our own. FREIGHT CLAIMS Freight claims are an ever present source of annoyance. Every shipper, and practically every receiver, of freight finds it necessary to make claims against the railroads for freight overcharges, short- ages, and damages to goods in transit. Some houses find occasion to make but one or two claims a year; others constantly have several claims on file, aggregating a large number each year, but no matter what the number, they must be given proper attention. Handling freight claims is not one of the usual duties of the shipping clerk, nevertheless, it is a proper topic for discussion in con- nection with the subject of shipping. The traffic manager, when one is employed, handles the freight claims; otherwise the details are handled by some other minor oflBcial — as the cashier or the purchas- ing agent. The adjustment of claims involves, usually, a large volume of correspondence, and requires a man of tact. He must possess patience and persistence to a marked degree. Diplomacy of a high order is necessary in his correspondence, and promptness is an important factor. Threats have little effect, other than to delay adjustment of the claim. 838 THE SHIPPING DEPARTMENT 27 Before a claim is presented, all information pertaining to the case in possession of the claimant must be assembled, and all facts should be incorporated in the papers filed. A bill should be made against the railroad for the amount of the claim, and to this should be attached the freight receipt or other voucher. These papers should be accompanied by a letter giving a plain statement of the basis of the claim; if for an overcharge, the number of the tariff and the classification on which it is based should be cited. The claim papers should be as complete as it is possible to make them, presenting all facts having a possible bearing, otherwise they will be returned by the claim agent of the railroad for further information. Some of the questions asked by the claim agent may seem trivial to the claim- ant, but the answers are necessary to him in completing the files of his oflBce. When claim papers are returned through the local freight office, the information asked should be given and the papers returned at once. Claimants become very impatient over delays in the adjustment of their claims, forgetting that where they handle perhaps a dozen claims a year, the railroad claim agent must handle thousands, in- volving amounts ranging from a few cents to many hundreds of dollars. They also overlook the fact that a shipment has passed over several roads, and that before the claim can be adjusted, it must be ascertained on what road the damage was sustained. The different roads involved must adjust the claim between themselves, before they can tell where the money with which to pay it is coming from. The papers must pass through the hands of agents at all junction and transfer points, and the claim departments of all roads involved, before the claimant can expect a reply. On the other hand, it is not good business to rely solely on the railroad. Claim papers sometimes repose indefinitely in the desk of some local freight agent, until brought to light by a persistent follow-up; occasionally the papers are lost. A follow-up of freight claims is, therefore, a necessity. The shipper who is most persistent in following up his claims, is usually the beneficiary of the most prompt service. Railroads number all claims as received, and invariably refer to them by number. It is an excellent plan, therefore, for the shipper to adopt a numerical system for the purpose of identification. It is 339 28 TliJ^ SlllPriNc; DEPARTMENT quite important that all correspondence relating to a claim be kept together, and this is best done by using a folder for each claim. The number of claims is so small that it is not necessary to use an entire drawer for claims; tliey can be accommodated in the front of a drawer used for regular correspondence. The outside of the folder should provide for the name and address of the consignor or consignee, as the case may be, name of T Consignor or 5hipp"\ng PolrvT P \?. Mo. . RaVlroad ____________________________________ Fig. 11. Folder for Freight Claims the railroad on which claim is made, the shipper's claim number, and the railroad's claim number, as shown in Fig. 11. In this folder, copies of the bill and of all letters to the railroad company should be filed. The folders are filed numerically, in the order of the shipper's claim numbers. To follow up the claim, and to provide an Index to the file of claim folders, a card, similar in form to the one shown in Fig. 12, should be used. This card provides for a complete history of the claim. At the head of the card is shown the name of the consignor 340 THE SHIPPING DEPARTMENT 29 or the consignee, shipping point, shipper's and railroad's claim numbers, dates of shipment, receipt, and filing of claim, the railroad on which claim is made, and the name of the claim agent. This is followed by a brief statement of the nature and amount of the claim. The two bottom lines provide for a record of the payment or rejec- tion of the claim. All of the information most likely to be needed is found by turning to this card, without the necessity of consulting the correspondence in the claim files. ; e 3 -* 5 6 7 8 9 10 a tZ is I4 tS I6 r? ta I9 20 21 22 23 Z4 2S as 27 28 29 S) ^ Consignor 01* Consignee Claim Na Shipping Point R.R.Ck3im,No, Date Shipment Date Received Oat© FHed Rallroacr Claim Agent NATURE OF CLAIM AMOUNT I Date Acknowledged Date Allowed Amt fotd$ Oert-e Rejected OVER Fig. 12. Card for Follow-Up of Claims The manner of filing the card depends somewhat on circum- stances. The usual plan is to file alphabetically, under the name of the consignor, first grouping by railroads. If goods are received and shipped over but one road, all of the cards would be filed in one index. But if more than one road is used, an index card would be used for each road, and the cards arranged alphabetically back of the index cards of the roads involved. This arrangement brings the cards of all claims against one road together, which is a logical plan, since it is the railroad with whom the claimant is dealing. Across the top of the card is a series of numbers, from 1 to 31. These represent the days of the month, and are used in connection with the follow-up of the claim. Metal tabs are placed over the dates 341 30 THE SHIPPING DEPARTMENT on which it is desired to have the claim brought to notice — that is, if the claim is to be followed up on the 20th, a tab is placed over the number 20. On that day all cards with tabs over this number are removed from the file, and, after the claims have received proper attention, the tabs are moved forward to the next follow-up date, and the cards returned to the file. A record of all correspondence in connection wuth the claim is made on the back of the card, which is ruled and printed for the LETTERS DATE TO DATE FROM Fig. 13. Record of Correspondence on Back of Follow- Up Card purpose, as shown in Fig. 13. This constitutes a tracer which shows, without reference to the files, just what correspondence has been required in the adjustment of the claim. When the number of claims on file is large, there should be another record which will show the amount of claims outstanding against each railroad. Of course, the card file gives this information, but some of the cards are very likely to be out of the file, so that the amount obtained by a recap of the cards at any time may not repre- sent the correct total. An account with each railroad can be kept on a card, as shown in Fig. 14. This card should be filed with the claim cards, imme- diately behind the guide card of the road. In effect, it is a ledger account, representing a contingent asset. 342 THE SHIPPING DEPARTIMENT 31 From an accounting standpoint, the proper method is to charge all claims to a claim account, crediting whatever account may be affected, at the same time charging the railroad on the card referred to above. If an overcharge has been paid on a shipment received, the entry would be: Claim Account $_ . In Freiffht $ Railroad Claim Agent DATE FILED CLAJM NO. NATURE ' AMOUNT 1 DATE PAID AMOUNT 1 Fig. 14. Claim Account Card When a claim is disposed of — paid or rejected — claim account receives credit, while the debit is to cash, or the account originally affected. Using the above illustration, if the claim is paid in full the entry is; Cash $ Claim Account $ If the claim is rejected : In Freight $ Claim Account $ 343 AMERICAN SCHOOL OF CORRESPONDENCE. CHICAGO. ^^^^ REGISTER OF BOOK SALES • Date in < n '■ uJ O a a. — o a. ^ o (0 ._ .. z o o _l CD UJ 1 Z O UJ a UJ < r o q: 0. •a O 8 < d z a UJ 3 ) *.' • s ) _ 844 THE SHIPPING DEPARTMENT 33 Thus the claim account is a controlling account, the balance repre- senting the total claims outstanding, and agreeing with the totals of the claims against the different roads as shown by the cards. Claim account represents a questionable asset, and should be so treated in the balance sheet, a liberal discount being made in the value represented by the account. EXPRESS SHIPMENTS Many business houses are selling classes of goods which are most successfully shipped by express. This is especially true of those houses that transact the larger part of their business by mail. The question of shipping by express is, in itself, quite simple, but there are numerous details connected with the handling of such orders which require close attention. While these details vary in different businesses, as a typical illustration the business of selling books by mail has been selected. When an order is received, the first step is to check the source — whether from circularizing, a re-order, or periodical advertising, and if the latter, the name of the publication. This information should be entered on the original order. Cash and charge orders should then be separated, and on the charge orders the next step is to investigate the credit and check the address, especially when no advance payment is made. The address is checked against any list that may have been used, or against city directories, when such are available. If the list used has proved reliable, it usually is safe to pass the order from one whose name appears therein. Or the occupation given in the directory may warrant the acceptance of the risk. If he is a customer, his manner of paying in the past is the l>est guide. Should all of these sources of information fail, and if the cus- tomer gives no references, it is well to secure a report from some commercial or collection agency. It may be necessary to follow up the agency, but if a reliable agency, like Martindale, is unable to obtain information, it is best to refuse the order except on a cash basis. The order having been accepted, it should be entered in an order register, giving the name of the purchaser, the address in detail, description of the article ordered, source of the order, and 345 .'^4 THE smrrixc; dkpautmkxt tlio price* A sheet, :is shown in Fig. 15, should he used ft)r each day's sales. The sheets should be in duplicate, as a copy is needed by the statistical department, from which to tabulate the sales from different sources. The next step is to open an account on a ledger card, as shown in Fiir. IG. At the same time a collection card should be made. Name .LEDGER No. Residence Mo Paym't Due Date BOOKS Business Address . Reference Source Date Enrolled Price Date Books sent Via. DATE DR. CR. BAL. DATE DR. ca BAL. DATE DR. CR. BAL. 1 1 Fig. 16. Ledger Card Both of these cards should be filled in from the original order — not from the register. If the number is large, the accounts should be numbered, the number being entered on both the ledger and collec- tion cards. From the ledger cards, the numbers are entered on the register. Two indexes are made — one alphabetical and one geo- graphical — on plain index cards, only the name and address, name of publication ordered, and the account number being shown. One of these cards is filed alphabetically and the other geographically, while the ledger cards are filed numerically. 346 THE SHIPPING DEPARTIMENT 35 Each day, before the cards are filed, the amount of the new accounts should be obtained on an adding machine, and checked against the total of the order register sheet. This will guard against errors in transcribing, for it is improbable that the same error will be made in entering the order on the register and on the card. PROM AMERICAN SCHOOL OF CORRESPONDENCE I CHfCAGO, ILL., U.S.A. For. .Express Prepaid. PRINTED MATTER Ship tQ above address: Signed. Courrterslgned or CftecKBd . Entered |n Shipping 'Book by. Date .^\9. Fig. 17. Shipping Order and Label Made at Cue Writing Tlie statistical department will ()])tain a record of total sales from the duplicate register sheet, and, for this reason, the amount should be checked against the original sheet. Since these sheets are footed by different people, this comparison affords a reasonable proof of accuracy, and also insures the use of the same totals by the statistical and order departments. 347 30 THE SHIPPING DEPARTMENT The order is now properly recorded and is ready for shipping. But before a shipping order can l>e made, it must be routed. This is done by consulting a postal and express shipping guide, in which will be found the name of every postoffice in the country, the names of the express companies reaching that point, or, if not an express office, the name of the nearest office. The name of the express com- pany is entered on the order, which is then turned over to the billing clerk. 7?>6 Company's Charge Is basea upon ttiQ ii/ue of tlm Property, w/iicft mustfio atClattCOg ftit itlippv. fiK'ffiiS ADAMS. _ EXPRESS COMPANV. 7»« Property hereinafter described to be forwarded iubj&cf to the t^rmz and conaitiafa ctTJm Company's regular farm of rece/pf printed oo inside Iront cover of tills book. Uabilify llm/ted iz> $S0 unless a greater value is declared. ARTICLE VALUE CONSIGNEe DESTINATION PREPAID RECEIVER'S SIGNATURE NO OF RECE5 RECEIVED 1 Fig. 18, Prepaid Shipping Sheet The making of a shipping order. Fig. 17, is the next step. At the head of, and attached to, the order is a label as shown in the illustration. This shows the name and address, and the name of the express company, which information is duplicated on the order blank by means of carbon paper. Tlie body of the order gives full particulars of the articles to be shipped, names of the order clerk, checker, and entry clerk, together with the date. All orders should next be entered on the shipping sheets, which are supplied by the 348 THE SHIPPING DEPARTMENT 37 express companies. A prepaid sheet \s shown in Fig. 18. This is made in duplicate, one copy, signed by a representative of the express company, remaining with the shipper. The copy for the express company serves as a voucher for the collection of the charges. The express shipping sheet and the orders, with labels attached, should be sent to the packing and shipping room, where the goods are packed and shipped. The order should then be returned to the oflBce, and filed with the customer's orders in the correspondence files. This should be a formal acknowledgment, giving full infor- mation as to when and how shipped. It will be seen from the above that orders of this class necessitate a number of details, each of which forms an important link in the complete chain RETAIL DELIVERY SYSTEM Not the least important problem in shipping is that of the retail store. While this problem is of special importance in a large city, it is one which must be met by the retailer in every community. Under present conditions, the retailer is obliged to deliver a large per cent of the goods that he sells, and the tendency is for this per- centage to increase rather than decrease. The shipping or delivery department is the busiest in the entire establishment; the details are so many that only with the most per- fect system can the work be handled. The delivery system of one of the big stores is a revelation to most men ; and when our purchase, which is but one of thousands made in an hour, is delivered at our door, five or ten miles away, two to five hours later, we marvel at the perfect working of an apparently complex machine. And yet, when we study it, we discover that the controlling factor of this vast system is its simplicity. Less confusion is found, and fewer mistakes are made, in the delivery department of the largest stores in the world than by the delivery boy of your corner grocer; and simple system — method — at every step from the sale to the final delivery is responsible. While not realjy complicated, the system of a big store is built to care for many more details than are met with in the smaller store. Since a vast majority of retail establishments are in the latter class, this discussion is confined to the needs of a store of average size. Average size is a relative term. A store of average size in one 349 38 THE SHIPPING DEPARTMENT community would be considered as a big store in another. In a large city, leading stores dealing in exclusive lines — such as clothing, shoes, or cloaks and suits — answer the description, and it is the needs of such a store that are discussed herein. A system adapted to the needs of a store of this class, can easily be expanded for a department store or modified for a smaller establishment. Delivery Tag. A delivery system starts, not in the shipping room, but when the sale is made. The very first requisite is a correct ■UNPACK AT ONCE TO AVOID CREASING- _FROM MAURICE L. ROTHSCHILDS -Good Clothes and Nothing Else - S.W. CORNER JACKSON AND STATE. CHICA50. N^rnP , Date Address — Near what Salesman_ RemanKs:- COD. $.. s-t-pp.P-t- P\^r lnspp.c.1-nr . WEST ■ Fig. 19. Label with Colored Border to Indicate Eoutiug address, and the securing of the address rests with the sales person. Unless every necessary precaution to insure accuracy at this point is taken, the further provisions of the system are without avail. The first step, then, is for the sales person to write the label or tag that is to be attached to the package. It should not be left for another to write the final delivery ticket; this should invariably be done by the sales person, who then becomes responsible for the address. In some small stores, the duplicate sales ticket is made to do service as a delivery ticket, but it is much the safer plan to use a separate tag or label for this purpose. The address on the duplicate 350 THE SHIPPING DEPARTMENT 39 sales ticket is quite likely to be illegible, and to provide for all details needed for delivery necessitates a larger ticket than otherwise would be used. One of the most practical schemes ever devised is to indicate the section of the city by the color, size, or shape of the delivery ticket. The city is first divided into sections, the commonly known sectional divisions being used — as North side, South side, etc. When the sale is made, the customer is asked in what section of the city he resides, and then an appropriate label is selected. All labels are the same in form, but printed a special color for each section. The label shown in Fig. 19 is distinguished by a solid border and bar of color, printed on white paper, all type being printed in black. Every necessary detail should be provided for on the label. The one illustrated shows the date, the name and address, near what street, the flat number, the name of the salesman, initials of the in- spector, and amount (if any) of the c. o. d. The caption, iiear what street, is of special importance in a large city for it assists greatly in routing deliveries. An address may be given as 457 E. 72nd St., but if it is known that this is near Baker Ave., it is much more quickly located by the driver. This label is written by the sales person and sent with the goods to the packers. Here, it is pasted on the package — unless it is a c. o. D. package, in which case it is first initialed by an inspector. The same is true of charge sales. Routing Deliveries. The delivery system proper begins with the routing of the deliveries, which is the first thing done after the goods reach the shipping room. Bins should be provided for the different sections of the city and if the business warrants, these sec- tional bins should be subdivided, the subdivisions representing routes. Separate bins should be provided for c. o. d. deliveries, and it is well to have a bin for special deliveries, such as those to suburban points, which usually are forwarded by express. When the packages reach the shipping room, they are sorted into these bins. As an aid to sorting, the colored labels de- scribed prove their value. Since the color represents the section, packages can be sorted as rapidly as they can be handled. After they are sorted according to sections, the packages are again sorted into routes. 351 40 THE SHIPPING DEPARTMENT In certain lines, such as groceries, the average delivery is made lip of several packages, all of which are put into a basket. Here, the bins must be differently arranged, being but divisions of the floor space. But the scheme of using colored labels or shipping tags could be used to advantage, especially in a downtown store delivering to all parts of the city. For a grocery with a trade confined to its immediate neighborhood, the sectional divisions are not needed, but the goods should be sorted by routes. 1 Pecefved from MAURICE L. ROTHSCHILD in good ... -»•-- [ ortier the following packages far delivory: \0 NAME STREET & Na NUMBER PACKAGES SALE NO. SIGNATURE l-TV- CALLS ^A-A- 1 \ 1 .! , , Fig. 20. Regular Delivery Sheet The Delivery Sheet. After routing, the next step is to record the deliveries. In all modern stores, deliveries to each section of the city are made at stated hours. As a rule, the deliveries are entered on the sheets just prior to the hour for the delivery. Fig. 20 shows the form of the regular deliveiry sheet, which is used for cash and charge sales. This sheet shows the date, the name and address, number of packages, and sale number. The column at the extreme right is for the signature of ithe customer as a 352 THE SHIPPING DEPARTMENT 41 receipt for the goods. Whether or not it is either necessary or wise to attempt to secure the signature of the customer, is a disputed ques- tion, and probably depends on the class of goods delivered and the extent of the business. A jeweler who delivers a valuable piece of jewelry would be justified in demanding a receipt, but this would be unnecessary for a grocer. The shipping clerk in one department store gives it as his opinion that the signature is not necessary, and, for proof, points to a record of but two inexpensive packages lost in a year. Call for Piickage Address. Near what Street — - — —Flat. Instructions ,. . . Fig. 21. Delivery Boy's Call Tag At the bottom of the delivery sheet, calls are listed. This refers to calls by the driver, where no deliveries are to be made. In a cloth- ing or department store, it frequently is necessary to call for goods that have been delivered on approval, or on which alterations are to be made. The delivery sheets are put up in book form in duplicate. The original is perforated so that it can be detached, while the duplicate remains in the book. A book is used for each wagon, and each driver signs for his deliveries in the space provided for that purpose at the head of the sheet. The driver then takes the delivery sheet, placing it in a spring-back binder, and turns it in on his return. It is well to keep these sheets on file in the shipping room for at least a month — when it is safe to destroy them. When a call is to be made, a special tag is given to the driver to be attached to the package. Tliis tag, which is shown in Fig. 21, gives the address, and any special instructions that may be necessary. 353 IJ TUK SHIPPING department; When the call is for a garment to be altered, the person taking he call usually ascertains what is to be done, and writes the instruc- tions on the back of the tag. In case no instructions are given in advance, they are usually given when the call is made — in which case they are written on the tag by the driver. When the package reaches the shipping room, reference to the tag shows what is wanted, and the package can be forw^arded, at once, to the proper department. Carrying out the color scheme, the call tag should be of a special color to distinguish it from the delivery tag. C. 0. D. Deliveries. Of special importance are c. o. d. de- liveries. There must be a positive record which will make it possible to check every item at every stage, including all items collected. Namp , I Name.,_ j Addrea© , j Addreas •C. O. D. Salesman Dept ! No j j Amount $. 1 Date. RECEIVED PAYMENT Dote By . I Collected by. j Fig. 22. Collect oa Delivery Tag The handling of a c. o. d. item begins with the sale, when the sales person, in addition to noting on the sales slip that the item is c. o. D., makes out a tag, as shown in Fig. 22. This tag, which should be of a special color, is made with a perforated stub, and on the stub the information on the tag itself is duplicated. The sales person fills in, on both the tag and the stub, the name and address of the customer, the amount to be collected, his own initials, the number of the department, and the date. The goods and the duplicate sales ticket go to the packing room, while the original sales ticket and the tag go to the office, where they are taken charge of by the c. o. d. clerk. This clerk registers the sale on a c. o. d. register, stamps the number on the tag and stub, 354 THE SHIPPING DEPART]MENT 43 and returns them to the packing room. The tag is then attached, and the package sent to the shipping room, while the duplicate sales ticket goes to the auditor's office. In a store where tlie packages are wrapped in the department making the sale, the routine is changed to the extent of sending the package direct to the shipping room, with a plain address label. The package is held in the shipping room until the tag, sent direct from the office, is received. 1 Receivea from MA URICE L. RO THdCflILD in good Date ■, — \Q — [ orden the following C.O.D. Pdckeges for delivsm j , rirTwor ' \0 NAME STREET & NO. NUMBER PACKAOES •SALE NO. co.o. NO. AMOUNT SIQNATURE io ■ Fig. 23. Special C O. D. Delivery Book After they are sorted by routes in the shipping room, all c. o. d. items are entered in special delivery boolcs, as in Fig. 23. This book is made in the same style, as the regular delivery book, with per- forated sheets, but should be made of paper of a different color. The form differs but slightly from that of the regular book, the only difference being the addition of columns for the c. o. D. number and the amount to be collected. When a driver makes a c. o. d. delivery, ho gives the customer a receipt on the tag, P^ig. 22, hut retaiivs the stub. On returning srjr) 4t THE SHIPPING DEPARTMENT from a delivery, lie turns in the stub with the money, and the pay- ments are checked on the duplicate of his delivery sheet. If a pack- age is not delivered, it must be turned in with the complete tag attached. All returned c. O. T>. packages are checked on the de- livery sheets and entered on the sheets for the next delivery. This system insures a positive check on the driver, for he must turn in either the package, or the stub and the money. C.O.D . RECORD n«+«a NAMF STREET 8c NO. NUMBER PACKAGES SALE NO. C.O.D. NO. AMOUNT ROUTE NO. DRIVER NO. Fig. 24. Office Record of C. O. D. Items The office record of c. o. d. items is in the form of a register, as shown in Fig. 24. This register is provided with the same columns as the c. o. D. delivery sheet, with columns added for the route number and the driver's number, these columns being used only in the shipping room. All items are registered in numerical order, a new series of numbers, starting with No. 1, being used each month. The book is made with duplicate sheets, the original perforated. Once a day, or as fast as the pages are filled, the originals are sent to the shipping room. 356 THE SHIPPING DEPARTMENT 45 The original sales ticket is placed in an envelope, stamped with the c. o. D. number and filed numerically by the c. o. d. clerk, who also keeps the register. In the system described, the tag receipt takes the place of the sales ticket; but in many stores it is considered best to send the sales ticket with the package. When the shipping clerk receives the record sheet from the office, he checks the items against his delivery books and enters the route number and driver's number. As described, each driver's stubs and returned packages are first checked against his delivery sheet; all stubs are then checked Telephone Harrison g62l Date Mr.. Time. .Address. ►Ve called to make delivery of (ockage and found no one at home. Per Pkg. leff with MAURICE L.ROTHSCHILD Specialists In good CloTJies and notMng et&e^ SW. COR. JACKSON &> STATE Fig. 25. Notice of Attempt to Deliver against the record sheet, which makes a double check in the ship- ping room. If a package is re- fused it is returned either to the department or the general stock- room, and a receipt obtained on the back of the tag. The ship- ping clerk then returns the record sheet to the office, with the money collected and the tags represent- ing refused packages. Sales tickets and cash are turned over to the cashier, while tags and sales slips of refused packages are sent to the auditor. The auditor can check both the cash collected on c. o. d.'s and returns against the duplicate sales tickets in his possession. Undelivered Goods. One of the annoyances met with in the delivery department of a large store is the difficulty in making de- liveries because people are not at home. Unsuccessful calls are com- mon, and while it is quite the general custom to leave packages with a neighbor, it is not always possible to do this, which means that the package must be returned to the store. And it frequently happens that this brings forth a vigorous complaint from the customer, who is positive that the delivery could have been made. One merchant has found a simple solution of this difficulty, which could be adopted with profit by all merchants in large cities. Drivers are supplied with slips printed as shown in Fig. 25. When no one is found at home, one of these slips is filled out and left in the 357 40 THE SHIPriXC; DEPARTMENT mail box. It shows the dtite, tune of day, name of driver, and name of person with whom the package has been left. The use of this slip eliminates complaints and proves a great convenience to the customer. Date. r.ir. Dear S/r>:- We are ho fating package addressed tv you and wh;c/) wae returned. our Immediate attention. ^ Address Shipping Dept. Kindly advice in regard to same &o we can give it Youro fruit/, MAURICE L. ROTHSCHIlfD' Per * Fig. 26. Post-Card Notice of Attempted Delivery WTien undelivered packages are returned to the store, and nothing is heard from the customer within 48 hours, a postal card notice. Fig. 26, is mailed to the customer. Frequently, failure to / Mrw y From ^ MAURICE L. ROTHSCHILD S.W Corner Jackson 8f' State Tli/G package must be delivered at This package must be delivered at ^^ Mr \~^_}~1 RpforP OY.Ior.k TO-DAY Rafnre ft'rHock TO-DAY N. \ Fig. 27. Special Delivery Tag deliver is due to the wrong address, but even if the correct address is not found in the directories, the postal authorities usually succeed in locating the customer. 358 THE SHIPPING DEPARTMENT 47 5PECIAL DELIVERY TAG Inspt. Sfaiup Time Messenger to Packing Room. Name Time Packers Stamp Time Messenger to Chute on S.R. Special Deliveries. Every store, especially in large cities, finds it necessary to make special deliveries. The customer from out of town, or about to leave town, wants a package delivered before a certain hour; the delivery may be to a depot, hotel, office, or even a residence. , These are the deliv- eries which cannot wait for the regular trip of the wagon, but are sent by a boy. The import- ant thing, so far as the delivery department is concerned, is to get them out on time. Fig. 27 shows a tag for spe- cial deliveries, used by a cloth- mg house. The tag shows the name and address of the custo- mer, with full particulars of the time and place of delivery. At the end is a perforated stub on which the delivery instructions are repeated. Wlien the tag is attached to the package by the sales person, the stub is torn off and sent directly to the shipping room. The shipping clerk is then on the lookout for the pack- age, and is expected to follow up the proper department, which in this business usually is the tailor shop. Another form of special delivery tag used by a department store is shown in Fig. 28. This tag gives more detailed information about each step taken, showing the names of all persons handling the package, and the time at which it is handled by each. When the delivery system of a retail store is studied, it is found to be made up of simple methods, which are assembled to make a complete machine. A noticeable feature of the entire system is that the apparently insignificant details — the little things — are its most important parts; which is true of all systems. Name Time Rec'd inS.R. Name Time SHIPP/NG ROOM WILL DETACH TAG AND FILE., Fig. 28. Special Deli\ery Tag for De- partment Store 359 INDEX 361 INDEX The page numbers of this volume will he found at the bottom of the pages; the numbers at the top refer only to the section. Page A Acknowledgment of order to salesman 278 Administration vs. management (see Management vs. administration) Advances of pay to men 112 Advertising committee 62 Advertising department 88 Advertising manager 39 Advertising and sales organiza- tion 127-190 introduction 127 outdoor advertising 158 periodical advertising 144 printing orders and tracers 137 sales department 160 street car advertising 157 systems and records 129 where advertising and sales- manship meet 159 Agencies, advertising 146 Alphabetical 61c, cross-indexing 172 Amounts, analysis of in invoices 267 Apphcation card of workmen 98 Assembling and erecting depart- ments 81, 83, 84, 91 Assistant superintendtmt 41 Authority of officers of company 25, 44, 91 B Back orders Basing points, freight Billboards BiUing machines 272, 329 325 159 252, 290 arrangement of billing machines in large business houses 295 Note. — For page numbera tee fool of pages. Page Billing machines (continued) carbon paper cut for this class of work 291 colored sheets 298 compound forms 300 general remarks regarding billing machines 292 handUng credit memoranda 292 loose-leaf sales sheet with separate invoices 291 loose-leaf sheets with invoices in blanket form 290 tabulators on billing machines 294 use of computing machines 296 using sheets serially 292 Billing and order recording 245 devices of future 310 handling orders and bills on bilUng machines 290 introduction 245 loose-leaf sales sheets and in- voices 254 machines for manifolding 249 order work of wholesale grocers 270 stationery 279 Binders 279 Blinds, use of 266, 290 Board of directors 23, 29 Board of managers 24 Book typewriter 250 Book-writing machines 249 Branch house credits 20S Business organization and con- trol 11-68 charting orgam'zatiou 25 charting salary and wage dis- tribution 47 committee system 69 363 INDEX Page Business organization and control (continued) co-operation 17 duties clearly defined 44 effect of phj-sical arrangement 53 emplojTnent department 42 executive organization 22 expense distribution chart 52 factors influencing production 11 general modification 42 oral orders cause confusion 65 uniform blanks 67 Buying department 29 C. 0. D. deliverice 354 Capital 11, 73 combinations of 73 Capitalist 14, 17, 72 Carbon paper 287, 291 color 287 copy carbon papers 289 cut for billing machines 291 durabihty of color 289 finish 287 four-pound paper 288 full-carbon papers 289 pen carbon 289 pencil carbons 289 seven-poimd paper 288 t€n-pound paper 288 troubles and remedies 289 wearing quality of paper 290 Card follow-up 169 Card transcripts 205 Carpenter shop 83, 84 Checking returns from advertis- ing 149, 155 Chief accountant 38 Chief engineer 41 Chief stenographer 38 JDhronological file, cross-indexing 171 Class rates, freight 316 Classifications, freight 315, 322 CUppings, advertising 129 Collection systems 216 card tickler 219 Note. — For page numbers see foot of pages. Page Collection systems (continued) cash receipts 231 collecting from ledger 223 collections by attorneys 242 collector's card 235 collector's receipt 236 cross-indexing 219 dupUcate invoices 216 filing contracts 235 handhng drafts 226 installment collections 226 installment ledger 230 installment register 229 local collections 222 mail-order installment account 239 mail-order installment collec- tions 236, 240 monthly statements 221 statement of installment ledger 231 Collection tickler, cross-indexing 219 Collections (see Credits and col- lections) Colored-sheet system 270, 298 Commercial division of business 24 Committee secretaries 63 Committee system 59 advertising committee 62 departmental factory committees 60 general factory committee 60 job bosses 61 organization committee 62 sales committee 61 Commodity rates 316, 323 Compound forms 300 goods almost completely shipped 300 goods shipped for entire orders 300 ComptroUer 25, 37, 43 Computing maciiines, use of in connection with bilUng 296 Condensed rate file 321 Contracts, advertising 146 Copy carbon paper 289 Copy proofs, advertising 136 Credit information, filing 204 Credit man (see Credits and col- lections) 364 INDEX Page Credit memoranda 292 Credit men's associations 203 Credits and collections 40, 89, 191-244 branch house credits 208 collections 212 credit man 191 information required 192 recording credit information 204 somxes of information 199 Customers' cards, indexing 178 Customers' lists 173 Cuts, advertising 131, 134 Cylinder billing machine 251 D Daily sales records 187 Day time vs. job time 103, 108 Decimal tabulator 294 Delivery system, retail (see Retail deUvery system) Department records 266 Departmental authorities 35 Departmental factory committees 60 Designs, advertising 131 Discharged or quit drawer 99 Discipline of shop 92 Drafts, handling 214, 226 Drilling and boring department 91 Duplicate invoices 216, 264 E Efficiency EUte type Employe (see Labor) Employer (see Capitalist) Employment agent Employment department Engineering department English business methods Engravings, advertising Erecting department 81, Executive committee Executive organization differentiation of functions Expense distribution chart Experimental room Export shipping Express shipments Note. — For page numbers nee fool of pages. Page F Factory buildings, height of 85 Factory manager 89 Factory organization and control 25, 69-125 machine shop management 80 manufacturing 69 shop methods and records 96 Factory plans 53 Fihng devices 68 Filling orders 326 back orders 329 Financial statements 194 Finished parts store-room 83, 84 Flat-bed biUing machines 249, 251 Flat wage rate 15 Follow-up systems 167, 183 Foreign advertising 146 Foremen 41, 91 Forge shop 81 Form letters 162, 213 collection letters 213 Foundry buildings, height of 86 Free market 15 Freight (see Shipping department) Freight claims 338 Freight classifications 315, 322 Freight tariffs 318 French business methods 248 Full carbon papers 289 20 ^ «*. V^^-^W— J,„J,X,-.^ 285 G Gear-cutting department 91 General departments 89 101 General factory committee 60 42, 97 General manager 24, 29, 37, 86 81, 83 General office 83 3 General superintendent 89 133 Geographical index 178 83, 91 German business methods 247 24, 29 Goods purchased outside, bilUng 268 22 Gothic type 285 22 52 83, 84 Grinding department 91 H 334 Heavy turning departmenf 91 345 Houpe communications 65 S65 INDEX Page I Improved machinery 15 Increases in pay 111 Individual record card 100 Industrial conditions, betterment of 75 Industrial development 69, 71, 76 Industrial freedom 70 Industrial undertakings not private business IS Insertion of advertisement, orders for 149 Installment collections 226 collector's card 235 collector's receipt 236 filing contracts 235 ledger 230 mail-order installment accounts 239 mail-order installment collec- tions 236 register 229 statement of ledger 231 Interchangeable manufacturing 76 Iron and brass foundry 81, 85 Issuing stock and materials 117 Job bosses 61 Job time 103, 109 K Keying advertisements 149 Keying form letters 163 Labor 11, 14, 16, 17, 72 Land 11 Large roman type 285 Ledger, collecting from 223 Lines of authority 25, 44, 91 Local agent plan of selling 87 Local collections 222 Local credit correspondents 200 Loose-leaf sales sheets and in- voices 254, 290 analysis of quantities and amounts 267 Note. — For page nymbert see foot of pages. Page Loose-leaf sales sheets and in- voices (continued) department records 266 duphcate invoices 264 goods purchased outside 268 information on sales sheet not on invoice 267 with invoices in blanket form 290 with separate invoices 291 unit billing 270 Loose-leaf sheets 279 Losses, reasons for 19 M Machine shop management (see also Factory organiza- tion and control) SO modern meaning of shop man- agement 80 official communications 93 organization of manufacturing plant 86 shop management 91 successful management 94 typical manufacturing plant 81 Mail - order branch of sales department 161 classification of sales 176 cross-indexing alphabetical file 172 cross-indexing chronological file 171 follow-up systems 167 form letters 162 indexing customers' cards 178 Usts of customers 173 Mail-order installment accounts 239 Mail-order installment collec- tions 236, 240 Management machine shop (see Machine shop management) vs. administration 11 effects of improved machinery 15 employer and employe both seek gain 14 flat wage rate 15 laborers are citizens 16 measure of wages 13 see INDEX Page Management (continued) machine shop (see Machine shop management) mutual profit in trade 13 need for fi-ee market 15 results of slave-driving methods 12 wages measm-ed by produc- tion 14 Manager, successful 95 Manifolding, machines for 249 Manufacturing 25, 69 betterment of industrial con- ditions 75 combinations of capital 73 development of American in- dustrial enterprises 71 early New England mechanics 70 industrial freedom 70 interchangeable manufacturing 76 manufacturing conditions and developments 69 methods of modem manufac- turing 76 relations of capital and labor 72 tools of early mechanic 72 Manufacturing departments 81, 83 Manufacturing division of busi- ness 24 Manufacturing enterprise, organi- zation of 25 Manufacturing plant, organiza- tion and layout of 81, 86 Map and tack system of rout- ing salesmen 179 Medium roraan type 285 Memoranda, advertising 129 Mercantile agencies 199 Mercantile business, organiza- tion of 29 MiUing machine, importance of in development of man- ufacturing 76 Milling machine department 91 Monthly sales records 189 Monthly statements 221 Motion studies, effect on wages 15 Not^. — For page numbert »e» fntl nf pages. o Page Office, planning the 54 Official communications 93 Oral orders, danger in 65 Order form, simple 276 with copy for shipping depart- ment 278 Order recording (see Billing) Order work of firms receiving orders from salesmen (see Wholesale firms, order work of) Orders for insertion of advertisements 149 oral 65 Organization (see Business organi- zation and control and Factory organization and control) Organization committee 62 Outdoor advertising 158 P Paint shop 83, 84 Pattern-making department 81, 84 Pattern storage room 83, 84 Paying employes, methods of 111 Pay-roll sheet 112 Pen carbon 289 Pencil carbon 289 Periodical advertising 144 advertising contracts 146 checking returns 149 orders for insertion 149 rate cards 144 Personal salesmanship division of sales department 17S follow-up of dealers and sales- men 183 reports of calls 181 routing salesmen 179 salesman's expense accounts 186 Phj'sioal arrangement, effect of 53 factory plans 53 planning office 54 store plans 57 Pica type 285 367 INDEX Page Page Planing department 91 Retail delivery system (continued) Planning department 89 special deliveries 359 Plant orders 114, 116 undelivered goods 357 Plating department 91 Retail dry goods billing 302 Police regulations of shop 92 Retm-ns from advertising, check- Polishing department 91 ing 149, 155 Power plant 81 ,84 Roman type 285 Preliminary engineer 88 Route cards 181 Premium work rates 112 Routing deliveries 351 Printing, orders, tracers, and Routing salesmen 179 records 137 Routing shipments 324 Production, factors influencing 11 co-operation 17 S management vs. administration 11 statement of problems 11 Salary distribution chart 47 Production departments 91 Sales, classification of 176 Production division 86 Sales committee 61 Production engineer 81 , 89 Sales division 39 , 86, 160 Production orders 114, 115 advertising manager 39 Production superintendent 91 branches 161 Profit and wages 18 credit man 40 Promotion 101 sales manager 39, 88 Protective tariff, effect on wages 15 sales records 186 Publicity department (see Adver- Sales manager 39, 88 tising department) Sales records 186 Purchasing agen1> 42 daily 187 Q monthly 189 salesmen's 189 Quantities, analysis of in invoices 267 Salesmen's expense accounts 186 Salesmen's records 189 R Salesmen's report cards 181 Rate cards, advertising 144 Selling department 29 Piecording-clock time cards 106 Serial numbers 292 Records Service card 99 advertising 129 Service real basis of profits 18 credit 204 Shipments, checking 330 form letter 167 Shipping clerk 314 shop (see Shop methods and class rates 316 records) classification index 322 Reference information 299 commodity-rate file 323 Requisitions 120 commodity rates 316 Retail credit reporting agencies 202 condensed rate file 321 Retail delivery system 349 fifing tariffs 318 C. 0. D. deliveries 354 freight tariffs 318 dehvery sheet 352 index 320 delivery tag 350 information required 314 routing dehveries 351 routing shipments 324 -Vofe. — Tot page numbers see foot of pnget. 368 INDEX Page Shipping department 313 cheeking shipments 330 export shipping 334 express shipments 345 filling orders 326 freight claim 338 introduction 313 retail delivery system 349 shipping clerk 314 Shipping room 83, 85 Shop foremen , 41 Shop methods and records 96 employment agent 101 foUow-up methods for tracing orders in the shop 121 giving orders for manufactur- ing work 114 importance of records 96 individual record of standing 100 methods of paying employes 111 plant orders 116 production orders 115 recording-clock time-cards 106 selection and employment of workmen 97 storing and issuing stock and materials 117 time-card forms 103 time keeping 102 tool-room methods 123 Shop transportation 83 Single-stop tabulator 294 Slave-driving methods 12 Special dehveries 359 Spht orders 274 Stands, or billboards 159 Statements, monthly 221 Stationery 279 binders 279 bhnds 290 carbon paper 287 designing stationery 283 loose-leaf sheets 279 styles of type 285 for typewritten work 281 Stock clerk (see Storekeeper) Store plans 57 NnVr. — For ■page numbers see foot of pages. Page Store-room 83, 84 Storing stock and materials 117 Street car advertising 157 Sub-production orders 115 Suggestion plan 64 Superintendent 25, 40, 80, 89 assistant superintendent 41 chief engineer 41 shop foremen 41 T Tables chart for checking retail sales sUps 304 comparison of daily sales of clerks 305 Tabulators on bilhng machines 294 Tariffs, freight 318 Tickler method of follow-up 168, 171, 219 cross-indexing 171 Time-card forms 103 Time distribution 103 Time keeping 102 Time studies, effect on wages 15 Tissue book, making wet copy of bill m 253, 254 Tool room 83, 84, 123 Tools, development of 72 Tracing orders in shop 121 Trade, mutual profit in 13 Traffic manager, need of 313 Transfer office 122 Traveling canvassers, plan of selhng 8S Travehng salesmen, credit infor- mation from 201 Treeing of carbon paper 289 Trusts 73 T3T3ewriter, use of in billing 250 Typewriter type 285 Typewritten work, stationery printed and designed for 281, 283 U Undehvered goods 357 Uniform blanks 67 Unit billing 270 360 INDEX Page Page w Wholesale firms, order work of Wage distribution chart 47 (continued) Wages 14, 15, 18 back orders 272 measure of 13 simple order form 276 and profits 18 simple order form with copy Weights, analysis of in invoices 267 for shipping department 278 Wet copy of bill in tissue book spUt orders 274 253, 254 Working authorities of officers of Wholesale firms, order work of 270 company 25 acknowledgment of order to Workmen, selection and employ- salesman 278 ment of 97 Note. — Pot page numhers see foot of paoes. 370 'W: UNIVERSITY OF CALIFORNIA AT LOS ANGELES THE UNIVERSITY LIBRARY This book is DUE on the last date stamped helow dL^ 4^ ^ DE.C 2 194S I^EC'D LO-^^^ ^9T3 Sbcfi5^9t3 Form L,-9 20m -12. "39(3386) UC SOUTHERN REGIONAL LIBRARY FACILITY AA 001019 335 The theoretical man knows why. The practical man nowsAoN^The n who would d must know ^yand how. ^r -7 f f^