The Motor Cars.

Timaru Herald, Volume XIIC, Issue 14042, 28 October 1909, Page 3 (Supplement)

The Motor Cars.

A GROWING TRADE. WhatKis the meaning of all this stupendous profit that is being garnered from the making of motor-cars Detroit (says the "New \ork.Tribune ) alone is putting thirty-five thousand or forty thousand automobiles upon the market every year. A dozen other cities scores, of other firms, are quite as productive. Yet nearly every firm complains that it is behind on its orders. Agents are praying for more ears. - The explanation is the ancient and "obvious one —the demand is greater than the supply. The novelty is still There is but onp logical, natnral, inevitable course. The supply will continue to grow. More capital will be rushed into the business. Many more firms will be organized and incorporated lor the manufacture. The profits will attract idle capital. Competition will develop. Thus far it has been practically nil. The supply will generally approach and" then equal the demand. Then prices wilf drop. They are bound to drop. We saw the same economic phenomenon in the bicycle bnsiness. The Columbia wheel Was the standard in 18%. Ifc sftld for £25 retail. Colonel Pope, president of the manufacturing firm, was put upon the witness stand in some litigation and testified that it cost somethings less than £5 to make a Columbia high-class wheel. Beyond a question, these profits are approximated by ihe present.profits in the automobile business. Competition alone can reduce prices to the normal and profits to the "equitable. The- prices of automobiles within two mav be rut in two. The man whove" income is £.500 may then afford to ov»:n-a car. Theft? is no bnsiness m the world quite sd.nrofitable as the manufacture of automobiles. Detroit has had abundant. evidence of that within a certain fortv-eight hours. The Cadillac Motorcar Company' sold out to the General Motors Company for £900,000. That is ostensibly a profit of about 200 per cent, on* the present capitalisation. As a matter of fact, it is vastly more on the entire investment. Post dividends, huge ones, are not figured in that. It enabled the eleven stockholders to rtear from £200,000 to £2.000 apiece, in proportion to their holdings. That js bounding toward affluence, surely. Detroit has had other conclusive evidence within the past six months of the astounding profits in automobile making • The E.M.F. Comnany has made n proftt of about £280,000 on a £40,<X» investment. The Ford ComDany has been paving tremendous dividends for a year.. The Olds Motor and Buick "Motor Companies sold out to the General Motors Company at vast pecuniary advantage to their stockholders -Nobodv but the small group ot stockholders "knows the fabulous profits of the Packard Motor Company. Its nroseiit .•apitalisation of £610.000 and its nrepent plant, one of the largest niaiiumttnring plants in the world, were built moon stock dividends, clear profits, and the end is not yet. Automobiles to the value of more What £8,000,000 have been registered in Massachusetts since the Ist of January That beats all records for this State, and it is eqnalled in only two other States. The sis months' record is larger than the registration of the 'whole of last vear. The number of new •machines in the State this year is more lhan 19,000, and it is gaming rapidlv. Some buvers of weeks ago are still waiting for their motors to be delivered. Those who have received them have paid the State fees for reeistration to the »mount of about £25,/JB3. (One of the highway commissioners says

that the registrations are coming in at the rate of eighty-six a day, hut he does not know bow long that will last. He is sure that it will make the spring estimate of twenty thousand lor the vear look small, and that the estimate at the same time that the State would take in £".20.000 for registration ees this vear should have been doubled. Clerks of the highway department have been working at nights to keep up with the demands for permits to run automobiles through the State over the highways. There was never a time when the people went'so fast, so far and so easv. and the troubles of tire practice are" decreasing as men come to a better understanding of what the motor wagons are good for.