Subversive | Page 5

the sales to the regional supply houses."
"Trade name distributor?" Tracy said, as though ignorant of what the other was talking about. "You mean the manufacturer?"
"No, sir. That razor you just looked at bears a trade name of a company that owns no factory of its own. It buys the razors from a large electrical appliances manufacturing complex which turns out several other name brand electric razors as well. The trade name company does nothing except market the product. Its budget, by the way, calls for an expenditure of six dollars on every razor for national advertising."
"Well, what are you getting at?" Tracy said impatiently.
Frederic Flowers had reached his punch line. "All right, we've traced the razor all the way back to the manufacturing complex which made it. Mr. Tracy, that razor you bought at a discount bargain for twenty-five dollars cost thirty-eight cents to produce."
Tracy pretended to be dumfounded. "I don't believe it."
"It can be proven."
Frank Tracy thought about it for a while. "Well, even if true, so what?"
"It's a crime, that's so-what," Flowers blurted indignantly. "And that's where Freer Enterprises comes in. Very shortly, we're going to enter the market with an electric razor retailing for exactly one dollar. No name brand, no advertising, no nothing except a razor just as good as though selling for from twenty-five to fifty dollars."
Tracy scoffed his disbelief. "That's where you're wrong. No electric razor manufacturer would sell to you. They'd be cutting their own throats."
The Freer Enterprises official shook his head, in scorn. "That's where you're wrong. The same electric appliance manufacturer who produced that razor there will make a similar one, slightly different in appearance, for the same price for us. They don't care what happens to their product once they make their profit from it. Business is business. We'll be at least as good a customer as any of the others have ever been. Eventually, better, since we'll be getting electric razors into the hands of people who never felt they could afford one before."
He shook a finger at Tracy. "Manufacturers have been doing this for a long time. I imagine it was the old mail-order houses that started it. They'd get in touch with a manufacturer of, say, typewriters, or outboard motors, or whatever, and order tens of thousands of these, not an iota different from the manufacturer's standard product except for the nameplate. They'd then sell these for as little as half the ordinary retail price."
[Illustration]
Tracy seemed to think it over for a long moment. Eventually he said, "Even then you're not going to break any records making money. Your distribution costs might be pared to the bone, but you still have some. There'll be darn little profit left on each razor you sell."
Flowers was triumphant again. "We're not going to stop at razors, once under way. How about automobiles? Have you any idea of the disparity between the cost of production of a car and what they retail for?"
"Well, no."
"Here's an example. As far back as about 1930 a barge company transporting some brand-new cars across Lake Erie from Detroit had an accident and lost a couple of hundred. The auto manufacturers sued, trying to get the retail price of each car. Instead, the court awarded them the cost of manufacture. You know what it came to, labor, materials, depreciation on machinery--everything? Seventy-five dollars per car. And that was around 1930. Since then, automation has swept the industry and manufacturing costs per unit have dropped drastically."
The Freer Enterprises executive was now in full voice. "But even that's not the ultimate. After all, cars were selling for as cheaply as $425 then. Let's take some items such as aspirin. You can, of course, buy small neatly packaged tins of twelve for twenty-five cents but supposedly more intelligent buyers will buy bottles for forty or fifty cents. If the druggist puts out a special for fifteen cents a bottle it will largely be refused since the advertising conditioned customer doesn't want an inferior product. Actually, of course, aspirin is aspirin and you can buy it, in one hundred pound lots in polyethylene film bags, at about fourteen cents a pound, or in carload lots under the chemical name of acetylsalicylic acid, for eleven cents a pound. And any big chemical corporation will sell you U.S.P. grade Milk of Magnesia at about six dollars a ton. Its chemical name, of course, is magnesium hydroxide, or Mg(OH){2}, and you'd have one thousand quarts in that ton. Buying it beautifully packaged and fully advertised, you'd pay up to a dollar twenty-five a pint in the druggist section of a modern ultra-market."
* * *
Tracy had heard enough. He said crisply, "All right, Mr. Flowers, of Freer Enterprises, now let me ask you something: Do you consider this country prosperous?"
Flowers blinked. Of a sudden,