THE
PROFIT ON CYCLES.
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       A case was recently heard in the Law Courts in which a  cycle company
sued for breach of contract, and, in making a claim for loss of profit per
machine, they naturally made their profit appear as large as possible, and put in
the cost of production at £6, showing a profit of £4  10s on a £10  10s
article. The judge made the sage remark to the defendants counsel, "I think you and
I had better leave the law and go in for this kind of business." This case
has been published broadcast without comment, and is not calculated to do the
industry any good. We are not told what class of machine it was, but as the cost
of the tyres is put down at £2 it was perfectly plain it was considerably a
second grade machine, and we can be quite sure that the cost of production,
less tyres, which is give at £4, was put as low as possible in order to make out
a good case, and also that it was taken at absolute direct out-of-pocket
expense upon the machine, that is to say, for actual labour upon that machine, and
for  the material embodied in it. To the casual
                    "Man in the Street,"
knowing nothing of the business  or manufacture, this is the cost of a
machine, but the manufacturer knows perfectly well that the workman cannot work in
the open, and that he requires to be properly housed, and also warmed in the
winter and protected from the elements, that he requires machinery to be placed
at his disposal, that he requires and uses tools in his work, that the
machinery he uses must be turned by power which the manufacturer has to supply, and
that his work must be supervised by skilled overlookers to see that it is
properly done, all of which, when added to the direct cost of the machine, amount
to at least as much as the actual labour upon it, and thus increase the labour
charge by at least one hundred per cent. Added to these the manufacturer has
other expenses. He requires show rooms, store rooms, and has a business
organisation to maintain. He cannot do everything himself, and must employ clerks to
record his dealings, travelling and advertising to effect his sales and such
items as carriage, postages, telegrams, travelling expenses  and a host of
other incidentals to a business, all have to be provided for, and this will add at
least another fifty per cent to the dead cost of the machine.

       All this has to be done before the manufacturer gets a cent of profit
and he has to take his risks and keep his time, his money, and his energies
employed in his business in the hope that a sufficient amount of trade will be
done to return him a profit at the end of the year. All these things are
overlooked by the people who get at the simple cost of material and labour and
compare that with the selling price of the article. The cycle is not alone in this
matter, but every class of manufactured goods comes under the same category,
though people are not in the habit of trying to go behind the scenes with other
things.

-The Cyclist, January 18, 1899.

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