RECENT public utterances by some government officials indicate a belief on their part that government-owned surpluses should be sold direct to the public or to industrial organizations without the aid of retail or wholesale dealers.
In their eyes, the dealer or distributor is an unnecessary middleman. He has been damned with the name of “speculator,” who would not perform a service in proportion to the profit he would make on the sale of government-owned plants, equipment and merchandise.
With few exceptions, everything in the economic history of America is a direct contradiction of such a theory. No business organization with a tangible product to sell has ever been built successfully without the aid of distributors or dealers or both. Whether the seller be the government or a manufacturer, no organization can avoid a sales cost in the efficient, economical distribution of merchandise.
In a previous editorial, we referred to the distribution of government-owned surpluses as “the greatest merchandising task of all times.” Who, then, is better qualified to do this job than men and organizations that specialize in merchandising?
Let me cite one particular industry. . . the field of heavy industrial equipment, which includes surplus (or used) machine tool, electrical, power plant, construction and miscellaneous industrial equipment of every description.
As publisher of Surplus Record, the pioneer trade publication in this field, I have for twenty years observed these dealer-organizations in action. When the war emergency demanded the immediate mobilization of all existing industrial equipment for war production purposes, these dealers acted as the main distributing mechanism that funneled this equipment into the war plants and made an enviable record in doing it.
Now that the same equipment must be demobilized, the same marketing mechanism is available. Used equipment dealers have the experience, the technical information, the market knowledge that can redistribute this equipment into civilian industry with minimum loss to the tax-payer and with the least harmful impact on the national economy. With such merchandising power available, why hand this complex job over to novices, or resort to untried men and means that can only lead to confusion and huge financial loss?
The same pattern of operation can be laid down for the redistribution of government-owned surpluses in other categories of merchandise. And speaking as a tax-payer, who has a financial interest in these surpluses, I’d rather see an experienced dealer take a fair profit than to pay the heavy cost of uncertain distribution attempted by amateurs who know little or nothing about modern merchandising. Attempted distribution of surplus goods, especially in the industrial equipment field, by going “direct to the public” and by-passing the dealer, is just downright reckless economic gambling! Don’t gamble, Uncle Sam!