would be little concerned as to transportation charges on either his incoming material or outgoing product. On the other hand, brick kilns are almost always located on or near the beds from which their supply of clay is derived and in most cases are also close to the market in which their product is sold.

When raw materials of various kinds are used in the same plant and these materials are obtained in different parts of the country, the question of location, so far as raw materials are involved, is one to be settled by a weighing of transportation costs and facilities.

(b) Are water, fuel, or other sources of power and any other

necessary materials and supplies obtainable at a reasonable cost or at a cost that will permit of profitable operation?

As in the case of raw materials, a manufacturing or a mining concern must have reasonably ready access to water, fuel, or power supply, and such other supplies and secondary materials as its operation may require. If not, the enterprise is seriously and perhaps fatally handicapped.

(c) Can labor be secured at a reasonable cost, in sufficient quantity, of suitable character, and of reasonable efficiency? Are the general labor conditions good?

At the present time if the undertaking requires large numbers of workers, the demands of labor make these considerations fundamental. In most parts of the country the resident population will afford a sufficient supply of unskilled labor. In cases where it is inadequate, and the location of the enterprise is fixed, as in the development of some remote mining enterprise, it must be imported from other parts of the country, with all the problems that this involves. Where the location of the enterprise is not fixed by natural conditions, the labor supply may be the determining factor. In early days the great majority of the cottonmills of the country were situated in the North-mainly in New

England primarily because labor of the right kind could not be found in the South. Conditions have since changed and now some of the most profitable cotton-mills of the country are located in sight of the fields from which their raw material is produced.

When skilled labor is lacking, it may usually be brought in, or operations may begin on a limited scale with what skilled help is available and the output increased thereafter as local labor is trained or as skilled labor is obtained from elsewhere.

The attitude of labor unions toward the undertaking must also be considered. In the main they are amenable to reason, but occasionally their demands are so unconscionable and so farreaching that they militate strongly against the establishment of a new enterprise in the neighborhoods dominated by such unions.

Also, at the present time, the temper and attitude of the laboring man himself require serious consideration. Will he work eight hours a day, or merely put in eight hours' time? Will he be loyal-will he make the interests of the undertaking his own? Too much should not be expected of the laboring man in this direction, but fairness and a reasonable attitude are important. In the troublous period immediately following the Great War, a Pittsburgh shop made a bid for the machining of a large number of automobile crank castings and secured the contract on a basis of $32.50 per casting. At this figure there was a fair profit. A rumor that could not be downed spread among the men that the proprietors were getting over $80 for every casting machined. The men were already somewhat disaffected. The profit seemed to them out of all proportion to the wages they were receiving. There was no open rebellion among them and no demands; but, in spite of everything the officials of the concern could do, the output decreased until the cost price of the machine work on the castings ran above the contract price. The machine-shop officials appealed to the parties for whom the work was being done and secured an increase to cover their actual cost, but the profit on the contract was gone.

(d) Are markets readily accessible and are transportation facilities adequate, satisfactory, and reasonable as to

cost?

Accessibility to markets is a prime consideration in the location of any enterprise. Sale of the product at a profit is a sine qua non. Geologists who have been on the ground tell us that in the interior of Venezuela natural oil springs exist, flowing in some cases as much as twenty-five barrels a day. The world needs oil and needs it badly; but if the story is true-this Venezuelan supply is going to waste simply because of its inaccessibility. It cannot with profit be brought to the place where it is needed. The matter of transportation must, of course, be considered from both the standpoint of incoming material and supplies and of outgoing product. Not only must rates on both be reasonable but capacity must be adequate. No matter how favorable the rates, if transportation cannot be secured when needed and to the extent needed, the profits or even the existence of the enterprise may be seriously endangered. There were many exemplifications of this in the winter of 1919-1920-steel plants crowded with finished product but unable to make deliveries because of the shortage of cars; factories unable to continue operations because they could not get their steel, coal, and other supplies. The situation was abnormal, but it shows well the very serious condition when transportation is inadequate.

Accessibility to markets does not, however, mean merely the existence of adequate transportation systems and reasonable freight rates. There must, of course, be both of these, but still further there must be a service that is honestly fair. Instances of enterprises that have been ruined by railroad discrimination are familiar to every business man. In these days of government regulation, rebates are not given and discrimination by transportation systems is neither so frequent nor so dangerous a practice as it was, but still the matter is one requiring careful investigation.

If water transportation is available it will probably be cheaper and for many purposes preferable to rail transportation and should be looked into even though rail facilities be at hand. If not needed at the time, it will serve as an insurance against possible discriminatory treatment or failure of the service facilities of the railroad. Automobile transportation should also be considered. With the improvement of the motor truck and the extension of good roads this method of transportation is taking an important place.

(e) What competition is to be encountered?

Some few enterprises are so exceptional in character as to have no competition, or perhaps none so near or so severe as to require consideration. In other cases the market is so wide and so unsupplied that competition is not a factor. Usually, however, competition is more or less serious and weighs heavily when the establishment of a new undertaking is considered.

Competition may be in two directions-it may affect the supply of the raw material, or the market for the sale of the finished product. For instance, it would be unwise to establish a canning factory in a district in which the garden and farm products are already consumed by existing canneries. To do so would result in destructive competition for the supply of raw material. On the other hand, it would be unwise to establish an ice plant in a town already adequately supplied with ice, for there would be no profitable sale for the product of the new concern. Between these extreme cases there are, of course, numberless instances where competition in either direction is not so severe as to render operation of the new enterprise unprofitable, and then it is a question whether it is better to locate in the proposed neighborhood or in some other place where competition is less active.

Competition must be considered both from the standpoint of that already existing and that which may come into existence

later. Existing competition is first to be taken into account. It has the very material advantages of an established trade and income; it is on the inside, and the outlook for the new enterprise which is usually on the outside must be carefully studied. If the market for the finished product is so large that competition is only in the direction of raw material, the question is one easily settled by a study of the supply. If there is no question as to raw material, but the market is doubtful, the matter is much more difficult, as it will require the study of a number of contributing factors.

There should, of course, always be some definite reason for believing that success can be obtained in the face of competition. The market may be large enough for all, or the new product may have certain points of excellence or attractiveness in price that will enable it to win its place in the face of the already established product. Or, if it is equally good, perhaps the manner of presentation may be the winning factor, or perhaps an acquaintance among those to be served will carry the new undertaking to success.

If it is decided that the existing competition does not constitute a serious menace to the new enterprise, the possibilities of future competition must then be taken into account. If the enterprise is successful and other concerns can come in and secure exactly the same facilities, competition is usually to be expected and should be guarded against in advance. The protective measures may take several directions. The supply of raw materials may perhaps be so secured as to prevent the entrance of competitors; possibly other facilities may be so monopolized as to render competition very difficult; or the market may perhaps be so securely controlled by excellence of product, diplomacy, and skilful salesmanship as to reduce the danger of displacement to a minimum.

It is to be noted that the mere existence of other undertakings of a similar character in the location under consideration does not necessarily indicate harmful competition. Thus a number of summer hotels in an attractive country neighborhood or seashore