The sales and profits of each salesman are kept as accurately as possible on special order blanks written for this purpose, and in a special sales book, and it is agreed with our salesmen that the profit sharing settlement is to be based on figures as rendered by our own bookkeepers. If clerical errors or mistakes are made, either against or in favor of a salesman, one is supposed to balance the other. There is no going behind the returns as computed by us, and I presume and believe that they are accurately kept, as we have never had any difficulty with the figures presented.

Our profits are figured on the cost of goods delivered at warehouse-regulated by current market prices-without regard to actual cost, the salesmen having no benefit of speculative contracts or gain from appreciation, and losing nothing through decline in market value. All allowances, cash discounts or deductions of any kind are deducted from the gross profits. Cash discounts taken by us are not considered in cost prices.

Each month, salesmen in the strictly city section are credited with 25 per cent of their gross profits; in the suburban section with 30 per cent of their gross profits; in sections comprising some suburban and some trade slightly beyond our limit-35 per cent; all salesmen in the country trade get 40 per cent of the gross profit, which is our extreme limit.

Salesmen are permitted, if necessary, to draw against a credit balance on the books, but this we discourage so far as possible, believing it better for the salesmen to secure the extra remuneration at the end of the year in one lump sum; and with very rare exceptions, no salesman has ever drawn against his profit account, except as arranged at the beginning of the year, and it is very seldom that the drawing account is changed from year to year-each salesman recognizing the value of a lump sum at the end of the year and the thrift which is encouraged in

this way.

At the end of the year, the accounts are balanced, and all uncollectible accounts charged to profit and loss and are deducted from the gross profits. Each salesman must necessarily stand his share of the loss. This in a sense may seem unfair as far as the city salesmen standing only 25 per cent of his losses, and the country salesmen 40 per cent, is concerned; but as the loss comes out of the gross profit, we have never considered it otherwise than perfectly fair to all concerned.

SALESMEN PAY OWN EXPENSES

Our salesmen are not required to keep any expenses, or to turn in any expense accounts whatsoever. They pay their own traveling expenses out of their own pockets, thus eliminating one of the most disagreeable duties of the sales manager and the cashier, in approving these accounts. It is perhaps interesting to know that some salesmen who traveled under the old method-with expense accounts of from $1,200 to $1,500 per year, have reduced their expenses to $700 or $800 when they had to pay them themselves. With very few exceptions, practically all of our salesmen receive a substantial check at the end of the year, in some cases running into thousands of dollars.

We of course require substantial results. We are in rare cases obliged to dispense with the services of salesmen who do not give attention to business, or who do not secure results which in our opinion are satisfactory, exactly as under the old system. We have taken salesmen from other houses, who were unremunerative at their previous place of employment, and almost always during their second year with our company, their profits have approximately doubled, after they have understood the system of profit sharing, and we have the most loyal and satisfied group of salesmen under this system that could possibly be described.

We have eliminated all graft, all excuses, all friction of every kind, shape and description. Every man realizes that he is

working for himself, that his remuneration depends entirely on the amount of profit which he secures, that his standing in a business way in the community depends entirely on himself. He

can in no sense find fault with the salary which he is receiving, for he makes and earns it himself. He knows that every other man is working on the same system, and it is a great incentive to the younger man, the neglectful man and the lazy man to bestir himself and keep up with the leaders.

SPECIAL BONUS OFFERED

In addition to the regular stipulated profit-sharing settlement, we have in recent years adopted a plan of presenting to every salesman who reaches $10,000 gross profits and for each $1,000 excess over $10,000, a substantial prize. In addition to this we have encouraged the $7,000 and $8,000 men to get out of their class by offering them a special prize for increasing their profits every thousand dollars. This part of the division of the profits has also been most successful and, I may perhaps add, most profitable to the company. I may also state that our business results are always considered from the point of profits and not sales, and the man who secures $10,000 profits from $50,000 sales is considered more valuable than the man who secures $15,000 from $100,000 sales.

The varying percentages, or the division of profit, the drawing account, the special remunerations, can all be changed to suit the business or the locality where any of our members are located. There is nothing whatever arbitrary in regard to this. Each concern can make these arrangements, divisions, or share of the profits, or the time of division, to suit his own special case, but the fact that you lift the salesman out of the "hired man" class, make him practically your partner, make him practically in business for himself, make him independent of the supervision and the petty annoyances of a hired man and make him a business man himself, make him realize that his profits are

limited only by his own efforts, that his traveling expenses are of no interest to you whatsoever, that selling goods at cut prices or cost prices will not get him one cent, but will be only a waste of time-all this will, in my opinion, place your selling organization on a higher plane than any other method that can be devised and is the most satisfactory, fair and businesslike method for the remuneration of traveling salesmen that has been devised up to the present time.

PRACTICAL ADVANTAGES

The Profit-Sharing System will avoid the periodical adjustment of salaries; the increase of salaries in times like the present, or the decrease of salaries in times like we have had in the past (and which will surely come in the future), the unpleasant cutting down of the salary of a mån who has done well in the past, or the equally unpleasant hold-up of a man who has had a most successful year and who demands a substantial increase, which you can hardly give him on account of probable future business conditions. In most cases the annual adjustment of salaries of this kind is mutually unsatisfactory and an unsatisfied man can never do his best work.

The system will entirely eliminate the traveling expense account. Every traveling salesman will be spending his own money, instead of spending yours, and it will make no special difference to you how much he spends, so far as your part of the profit is concerned.

It will eliminate, to a great extent, the question of poor risks and the usual losses connected with same, for it is a well-known fact that all losses eventually must come out of the profits, and if each salesman is conducting his business on the profit-sharing basis, he will hesitate to sell a poor risk in order to increase his sales.

The system of profit-sharing will largely eliminate the cutting of prices, for when a salesman realizes that he is interested in the profit obtained, it will be for his