1 - American Memory

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housing a 5-month supply of paper on a year-round basis. As a pub-
lisher of a weekly newspaper, I can attest to the fact that our printer
makes every effort to maintain a 7 month's supply of our particular
grade of newsprint and that we begin to push the panic button when
delayed mill runs or shipping delays force us down to a 4-month in-
ventory. At one point during the several strikes in 1971 and 1972 we
were down to a 3-week inventory and faced with having to suspend
publication.
I personally conducted another survey in mid-September 1974 of
the three largest automobile dealers in Honolulu. On the average these
dealers maintain about a 60-day inventory of cars and trucks, approxi-
mately double what their counterparts in California carry. When con-
tracts are being renegotiated on the west coast, these dealers immedi-
ately move to go to a 90-day or higher inventory. One auto and truck
dealer who maintains a steady inventory of 500 units makes it a prac-
tice to build his inventory to 1,000 units when the possibility of a
strike looms. The cost of financing and storing such a huge inventory
of high-priced merchandise is staggering. It costs $15 a month to hold
an automobile in open field storage and at least $35 a month to finance
that unsold vehicle. There is also an added insurance factor and an
added cost of preparation because of extended exposure to weathering.
These costs are passed on to the consumer, and, depending on the
type of vehicle, means an increased purchase price of from $60 to $100
because of extended inventory resulting from threatened shipping
interruptions.
Mr. Chairman, permit me to generalize from the standpoint of most
small enterprises in Hawaii. They have had to adapt to the uncertain-
ties of our isolated situation where there is no reasonable alternative
to surface ocean shipping. The consumer fresh from the mainland is
rather startled to be in a modern urban situation and to find so much
merchandise to which he has become accustomed not available in
Honolulu; and, further, to be almost constantly confronted by the
response: "Sorry, we're out of that item now—come back in 2 or 3
weeks." Even after 27 years in Hawaii I find this situation less than
comforting. But the merchandisers in Hawaii are not careless and
inefficient, they are only trying to avoid financial disaster. They try
their best to keep a level flow of goods coming in but are fearful of
having to bear the cost of more than a 3- or 4-month inventory. When
demand for a particular item exceeds their advance estimates, it's easy
to run out while replacement merchandise is still in transit.
While a long list of commodities are in short supply or completely
depleted during the 100-day west coast longshore strike in 1971, the
most publicized shortage was toilet paper. Actually, there was enough
inventory of this commodity at the start of the strike to last for 100
days. But panic buying cleaned the shelves of the major retail outlets
and, soon, other paper products began to disappear. Some people were
using their homes as warehouses. Unhappily, people who did not
hoard or were too poor to hoard were unable to find essential paper
products for weeks. The same thing happened with salt, rice and other
staples.
The merchant is caught in the middle. "WTiile he and his wholesalers
may have enough stock on hand to withstand up to 3 months of ship-