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

[Dave]

ALL good points, Dean VP! Additionally, taxes in general were nowhere near what they are today. People were, for the most part, FREE from the government intervention in their lives that we are forced to live under today!
	Dave

> On Sep 19, 2017, at 5:57 PM, Dean VP <deanvp at att.net> wrote:
> 
> I think some of you may be overanalyzing this when there is no way anyone can now get inside 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 below, 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
> 
> 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 Stephen Offiler
> Sent: Tuesday, September 19, 2017 11:13 AM
> To: Antique tractor email discussion group <at at lists.antique-tractor.com>
> 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 <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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