demands of the General Conference, an aggregate sum of not less than $650,000! This great sum has been extracted in cold cash from the assets of the house. If now to this sum should be added the reversals of rental income, amounting for ten years to not less than $550,000, occasioned by the change of location from Broadway to Fifth Avenue, we should have an amount aggregating $1,200,000! Such addition, however, with its logical inferences, needs to be made in order properly to estimate the cost of that policy which located the New York Concern on its present site.

To recapitulate, three general facts, each significant, have powerfully conspired to affect the financial prosperity of the Eastern house. These are, first, the large original cash outlay in the securement of the property, an outlay from which it has been practically impossible, up to date, to secure a proportional income; second, the large relative loss of rental income; third, the greatly increased outlay for dividends, which increase dates substantially from, and largely because of, the occupancy of the Fifth Avenue property.

Both the logical and practical resultant of this combined movement has been to deprive the Eastern house of an adequate and greatly needed working cash capital. This statement should awaken no needless alarm in the mind of any reader. The real estate of this house is unincumbered; it is very valuable. The house is doing a large business, on which, for the most part, it is making a normal profit, a profit as large, perhaps, considering the true mission of the Concern, as ought to be asked. But it ought to go without the saying that this house should never be under the necessity of borrowing money for the transaction of its current business. A policy which denudes the treasury, for any cause whatsoever, it matters not how noble that cause may be in itself, of a needed working capital, is a mistaken policy, and one which, in our judgment, the responsible directory of our general publishing interests ought sturdily to check. As it is, the New York house is paying yearly thousands of dollars of interest money, every dollar of which might now be retained for the uses of the business, had the Concern been permitted to accumulate from its own earnings an adequate working capital.

In this connection it should be emphasized that the bills receivable are largely in excess of current liabilities. But it is also true that with the customary, and seemingly necessitated, methods of business large credits must be conceded to general customers. This method requires the house to advance large volumes of merchandise the returns for which are not realized within several months. The working cash capital should, therefore, be large enough to permit the house to pay cash for all purchases and production, and at the same time to carry its principal customers as may be required.

DISTRIBUTION.-A question which has a vital bearing both upon the financial prosperity and usefulness of the Eastern house relates to its depositories. For convenience of classification it may be said that the depositories are of two kindsthose owned by, and under the control of, the Book Concern, and those owned by independent corporations.

Of the former class there are, besides the retail store in New York, four, located respectively in Boston, Pittsburg, Detroit, and San Francisco. The usefulness of these depositories comes from the fact that they serve as distributing agencies of Book Concern products throughout their several territories. If these agencies were to confine themselves simply to this mission both their real usefulness and financial success would, it is believed, be fully demonstrated. But, unfortunately, there has grown up in connection with each of these depositories a miscellaneous, or general, bookstore. The term "unfortunately" is used advisedly. It is our clear and firm conviction that the Methodist Episcopal Church, especially in the territory of the New York house, has neither need nor proper function to be in the miscellaneous book trade. Each of these stores necessitates a more costly rental, more numerous clerical employees, and in most ways a more expensive plant than would be required for proper depository purposes, and it may be safely said that the causes for this enlargement do not furnish justifying results for the outlay which they necessitate.

We have personally taken pains to test this conviction within the past year. There is a depository, not to be here named, which, if any, would seem to command a location for success

in a general book trade, but one which for the business of the year last past reports a serious loss, which loss, however, if we were forced to close out the miscellaneous stock on hand, would doubtless appear even greater; and yet, in this same house, it is easy to show from the year's records that in the handling of our Sunday school periodicals alone, allowing sufficiently for required rental space, clerk hire, and all costs of transportation, a clear profit to the business of not less than $4,000 should have been netted.

By reducing all of our stores, including the one in New York, to depositories for handling only Book Concern products, and at most in addition some requisites in demand by our churches, we could as readily accommodate all mail orders with miscellaneous books as now, the legitimate profits upon our own wares would not then be neutralized by the accumulation of stocks not of our production, and we would simply be placing ourselves on the plane of wise policy long since adopted by most of the great publishers of the East, namely, that of carrying in stock only their own products.

More mature observation only serves to confirm in our conviction both the truth and the philosophy of a statement in the report of the Eastern Agents to the Book Committee meeting in Cincinnati, February, 1898, as follows:

A study of conditions makes evident the reasons why, on general principles, neither we nor any other denominational house can hope for any very marked success in conducting retail stores for the general book trade, especially in the great book-creating centers of the East. While purchasers of Methodist books will naturally seek such books in Methodist stores, the book-buying public will not seek out these stores for other than Methodist publications. We believe the above statement suggests a principle of action so generally true as to preclude the possibility of satisfactory success in the attempt under purely denominational auspices to conduct in the trade centers a miscellaneous retail book business.

The question of the independent depositories is one sensitive of discussion, and any position concerning them taken from the standpoint purely of Book Concern interests will doubtless be thought by some good men to be in conflict with interests which they hold dear to themselves. To these corporations referred to it is a custom of the Eastern house, a

custom long since inaugurated, to grant depository rates. The profits, if any, made by these houses on products thus purchased do not revert to the Book Concern treasury. It is, moreover, evident that the Methodist patronage secured by such houses by so much, or at least in large proportion thereof, is diverted from the Book Concern itself. This statement, if made in open debate, would doubtless by some be disputed; but our conviction is that if these independent houses were not in existence the Book Concern, with its perfect facilities for correspondence and distribution, would very much more profitably to itself than now hold the Methodist patronage within their respective territories.

It is but fair in this discussion that certain motives for originally entering into so exceptional relations with these houses should be clearly recognized. One of these motives grew out of a desire to respond to a demand from certain populous Methodist centers for essential depository privileges. Another motive arose from the hope that the products of the Book Concern would secure a much wider distribution than otherwise through the agency of these houses. Truth, however, compels the statement that, whatever increase in the distribution of Book Concern products may have resulted, this result has come in no such compensating measure as to offset the burden imposed upon the Concern by its practical capitalization of these houses themselves. By the system in vogue the Concern practically advances goods for which it does not receive its payments until these houses in turn sell and collect from their own customers. Thus, so far as its own trade is concerned, the Concern is literally capitalizing these houses.

How serious a matter this credit system is for the Book Concern will best appear in the light of plain facts. At the close of the fiscal year, October 31, 1898, six of these principal houses were owing the Concern an aggregate sum of $98,054.67. For a sum varying more or less from the above amount the Concern carries these houses for practically a whole year in advance of their return payments. In other words, if all of these houses had gone out of business on October 31, 1898, they would still be owing the Book Concern

this large amount for goods already advanced to them, and by them distributed.

Personally, however reluctant we may be to hold the view as against the business plans of some brethren beloved, we have never been able to feel that this is good business for the Book Concern. The opinion of the General Book Committee upon the case is expressed in a resolution taken at its session in New York, February, 1897, as follows:

[In view of the fact that] a large amount of capital is locked up in outstanding accounts with Conference bookstores and Conference depositories; therefore,

Resolved, That such accounts and lines of credit be greatly reduced, and that hereafter a credit of six months be granted to Conference bookstores and Conference depositories on sales, settlement to be made at the end of this time, in cash or approved notes with interest, and that present accounts more than six months old be settled forthwith by payment in cash or such securities as the agents will accept, in order that the business of these stores be put upon a paying basis to the Concern..

PASTORAL CREDITS.-A large number of book accounts are kept with preachers. At the close of the fiscal year, October 31, 1898, preachers were owing $54,001.75. The sum of indebtedness by preachers at the close of each of the last several years has not varied more than two or three thousand dollars from this amount. Nearly all of this money will be paid into the treasury at or before the sessions of the various Annual Conferences of which these debtors are members. Preachers, as a rule, are among the best paying debtors of the house. It is not pleasant to state a truth which marks the exception; but the fact is that in many of our Conferences are a few men, sometimes among those who are drawing the best salaries, who are woefully derelict in the matter of paying their Book Concern bills. It is these men, who number not more than one in forty among all their brethren, who depress a line of ministerial credit that would otherwise be as high as that of a company of bank presidents.

SUNDAY SCHOOLS.-Among the largest patrons are the Sunday schools, with which great numbers of accounts are kept. The credit of the average school is high, though in this field also there are some painful exceptions.

AUTHORSHIP.-No one can be in the position of Publishing