[AT] 430V - now Deere and The Great Depression

Tue Sep 19 17:29:06 PDT 2017

Bill, I haven't read the i/H book and I have wanted to but I guess I never developed  a round tuit.  Does her book mention what I/H did with farmer debt during the depression.  They were more than twice the sales of JD during that period.

Dean VP
Snohomish, WA 98290

-----Original Message-----
From: at-bounces at lists.antique-tractor.com [mailto:at-bounces at lists.antique-tractor.com] On Behalf Of Bill Brueck
Sent: Tuesday, September 19, 2017 2:45 PM
To: 'Antique tractor email discussion group' <at at lists.antique-tractor.com>
Subject: Re: [AT] 430V - now Deere and The Great Depression

In that same area of the Broehl book it speaks of Deere going into the depression with pretty good cash on hand.  Deere history shows a company that was conservatively run and always kept a reserve for hard times. 
Indeed, it's humorous now to read all the difficulty they had deciding to spend money researching the tractor business, not being confident that there was any future in tractors replacing those reliable horses.

There's a similar (and mercifully shorter) tome written about IH, A Corporate Tragedy by Barbara Marsh.  Both companies had their share of
troubles: labor, economic cycles, suppliers, wartime allocations and opportunities…  From what I read, Deere’s conservatism allowed them to weather the rough times while IH had a LOT more overhead and a few critical years of poor management, which eventually broke them during a downturn.

The Broehl book is not overtly pro-Deere.  I read it as an honest report of the company’s history, and not all of it is complimentary.

B²

Bill Brueck

Pine Island, MN

-----Original Message-----
From: at-bounces at lists.antique-tractor.com 
[mailto:at-bounces at lists.antique-tractor.com] On Behalf Of Dean VP
Sent: Tuesday, September 19, 2017 4:05 PM
To: 'Antique tractor email discussion group' <at at lists.antique-tractor.com>
Subject: Re: [AT] 430V - now Deere and The Great Depression

I think some of you may be overanalyzing this when there is no way anyone 
can now get into the minds of JD management in the 1930's.  In fact it 
really doesn't matter what their true motivations were. The good will they 
created with their customers is all that is important to remember and that 
is what the farmers remembered.   I think we need to take it for what it 
was. A brilliant JD Marketing strategy that paid handsomely in returns for 
many, many years.  I think it would also be good for many of you to read 
Broehl's book, that Bill Brueck mentioned, on the history of JD since it is 
considered the Bible relative to the company's history.   I have the book 
and would encourage others to read it as well. It truly gets into what the 
JD Family corporate culture was in those years.  So unlike the John Deere of 
today. How cynical we have become!

PS: for those of you who have run a cash strapped business like I am sure JD 
was during the depression, I suspect JD used that huge Accounts Receivable 
they had on the books, that could be proven to be good as gold, when they 
needed cash from the bank  to remain in business.  During the depression tax 
was not the big issue. Figuring out how to stay in business was. I sincerely 
doubt many companies were making much if any taxable income during the 
depression.

Dean VP

Snohomish, WA 98290

-----Original Message-----

From:  <mailto:at-bounces at lists.antique-tractor.com> 
at-bounces at lists.antique-tractor.com [ 
<mailto:at-bounces at lists.antique-tractor.com> 
mailto:at-bounces at lists.antique-tractor.com] On Behalf Of Stephen Offiler

Sent: Tuesday, September 19, 2017 11:13 AM

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Subject: Re: [AT] 430V - now Deere and The Great Depression

John raises a really interesting point about repossesions.  I'm not an 
accountant, and I have no idea what the tax laws were like in the 1930's, 
but I do know that inventory increases can have negative tax consequences, 
and it seems that Deere would somehow have to count those repo tractors as 
an inventory asset.  On the flip side, bad debts can have positive tax 
consequences.  This is an interesting, tricky business decision on Deere's 
part that combined a variety of factors from the trustworthiness of farmers 
all the way to the tax man and back to future brand loyalty concerns.

SO

On Tue, Sep 19, 2017 at 1:04 PM, John Slavin < 
<mailto:chaunceyjb at sbcglobal.net> chaunceyjb at sbcglobal.net>

wrote:

> Dean:

>

> Great story.  Always enjoy to hear stories of our ancestors.  And

> Bill, your comment makes sense too.  I suspect Deere’s decision was

> not altogether altruistic, though.  They knew most of their customers

> were not deadbeats and if they could pay, they would.  The probably

> figured that with time, assuming the economy turned around, they would

> get paid. The reality though was that they probably knew they would

> take a haircut on repossessions.  I asked my mother one time about

> what it was like to live in the depression because you always hear the

> stories about soup kitchens etc, and she said, “We always had plenty

> to eat because everything we ate, we raised or grew.  And we just

> entertained ourselves.  The only thing we bought at the general store

> was salt and maybe a little coffee.  NOBODY had any money.”  I know

> one guy never trusted the banks and kept all his money in coffee cans.

> When land was being foreclosed, he went to the courthouse steps with his 
> coffee cans in tow and bought land for a song.

>

> So I rather suspect Deere thought there was no way to recoup the loans

> and that was the main reason they decided what they did.

>

> John

>

> > I thought I had heard of a general policy at the time regarding

> > this,

> and found it in Broehl's book, John Deere's Company, page 504: "The

> company's decision ...  was to carry the farmer as long as necessary

> to amortize the debt."  The book goes on to speak of the credit

> worthiness of the farmer and states that before the depression Deere

> had a .009 ratio of uncollectables to total sales!  If I interpret the

> sentences that followed correctly, by the end of the depression that

> ratio had climbed to only about .01.  "The farmers' loyalty to Deere

> products, always strong, was greatly strengthened during the period of

> the Great Depression.  The company's belief in the farmer was

> reciprocated by a farmer response that gave Deere a priceless asset for 
> the future."

> >

> > Bill Brueck

> > Pine Island, MN

>

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