BUSINESS REPORT OF WEN-HUA BOOKSTORE (No 2)

March 1921

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I

Last year we issued a business report concerning the "initiation" and the condition of the "temporary business period." Now, "Business Report No 2" deals with the condition of the "first half-year" from last September, when this bookstore was inaugurated, to the end of March this year. The bookstore was opened at the beginning of last September; therefore, it has been 7 months by the end of March this year, which is 1 month over the "reporting every 6 months" provided in the Organization Outline. This is for the convenience of accounting. Hereafter, "reporting every 6 months" in the Organization Outline will be observed.

II

In regard to the purpose of this report, first, we want to report to our members how those members directly connected with the bookstore and those managing the business market the publications, so that our members will know the actual situation of the bookstore. Only by so doing will we fulfill our responsibilities. Second, the Chinese people always follow the policy of secrecy in doing business. Besides the inner circle, no one knows what they are doing. Such secret policy is actually a sin. When one is open and aboveboard, why shouldn't the situation be made public? Wen-hua Bookstore is an organization publicly owned by society; it is not for private gain. To avoid the sin of secrecy, we oppose secrecy and adopt complete openness, reporting all conditions of the bookstore to the public besides just the members. Third, in regard to the mission of our bookstore, we stated in our "Objectives" that "...we wish to introduce all kinds of new Chinese and foreign publications by the fastest and simplest method to serve as the study material of the young people and all the people of Hunan." In the "Organization Outline," we also stated that "...all kinds of useful new publications will spread in the entire province so everyone will have the opportunity to read them." Such a great mission cannot be accomplished

by our few dozen members alone. To attain the goal of "everyone having the opportunity to read" the publications, we give serious attention to setting up branches in the counties. With one branch in each of the 74 counties, and 10 members per branch, we must have 750 members. Therefore, the only way is to publicize the business conditions, so that all those of like mind near and far will understand the benefits of the store, set up branches in all areas, and help us spread our intent by word or deed. The goal of "spreading in the entire province" may then be reached. Fourth, what our bookstore has are books and newspapers, but what it lacks is capital. Why? Because books and newspapers come from outside, and we can hardly all we want, but capital comes from the members, and not all members are rich. In addition, our members are not involved in just the bookstore alone so there is not that much money available to serve as capital. Furthermore, this bookstore follows the principle of "public asset, with no withdrawal or interest, so our poor members cannot produce much money. Nevertheless, the undertaking of Wen-hua Bookstore is definitely something worthy of attention. Let us enumerate the benefits: (1) simple operation and (2) no waste of capital.

As we all know, the urgent task today is to spread culture, and just the few schools alone are not enough to do so. Therefore, to expand the business of the bookstore and set up branches in the counties, we hope that our comrades who are able will help us with larger funds. (We plan to raise 3,000 yuan of public capital within 2 years). We don't know who are willing to help us. Naturally, we cannot ask everyone. Only by making public our business condition will those sympathetic to us step forward voluntarily and render aid. Fifth, we have, up till now, been selling books only, without doing any publishing. Now we plan to organize an "editing and translating department" and a "printing press," coordinated with the bookstore's "distribution." Then, our bookstore will have an independent publishing. As the business will be further expanded, we will have to enlist more comrades and raise more funds (3,000 yuan for the editing and translating department and 5,000 yuan for the printing press). Therefore, we have to make public the business condition of the bookstore in order to win the sympathy and attention of everyone. The final point concerns the handling of business by our staff members. This is the sixth point. To make the business prosperous, the accounts must be clear. In regard to our accounts, we have daily, monthly, and half-yearly reckonings. In daily reckoning, the business figures of the day are totaled every evening. In monthly reckoning, the business figures of the entire month are totaled on the first of the following month. The results of the previous 6 months are settled at the half-yearly reckoning. The "business condition" in the report is the result of the "first half-yearly reckoning." By so doing, the procedure is followed and the concept clear, and it will be easy to correct the errors and formulate new plans.

III

What was covered in report No 1 will not be repeated. Since our meeting on 1 August last year at Ch'u-i Elementary School, our signing of the lease of

a part of the Hsiang-ya Medical School buildings on Ch'ao-tsung Street on 20 August, the start of business on 9 September, and the first council meeting on 22 October, the events of the bookstore worthy of recording are briefly as follows:

1. Special council meeting, 29 December: The meeting was attended by Ho Shou-ch'ien, Wang Chi-fan, Chou Tun-yuan, Kuo Tieh-sheng, Yang Ying-ku, Huang Chin-ting, Chao Yun-sen, Liu Ch'ieh, and Mei Yun-ch'ih, and the problems of "finding another location" and "raising additional funds" were discussed. The problem of location was discussed first. As the current location was stuck in a corner of T'ao-chia-wan and the space inadequate for the purpose of developing business, it was decided that the bookstore must be moved to a more centralized location with more space. However, caution was required, and we wanted to move once and for all only. Before finding an appropriate spot and making definite arrangements, we would remain where we were. As the day before the meeting Ch'iian-shan Academy promised to loan a part of its buildings to the bookstore, everyone felt it would be a good move. However, there must be a clear contract, in accordance with the goal of state progress. It was finally decided that the bookstore would negotiate further with Ch'uan-shan. The next problem was funds. The first council meeting decided that 1,000 yuan should be raised this year, and we were still 530 yuan short. Everyone felt that it was not practical to raise money piecemeal. X X volunteered to raise the 530 yuan by himself. The meeting was adjourned.

2. Contracts with the Commercial Press and other bookstores: These happened after January this year. Prior to that, we had contracted to market publications for out-of-town bookstores such as Chung-hua, Ya-tung, T'ai-tung, New Youth Press, Peking University Publication Department, and the Academic Lecture Association. By January this year, we entered an agreement with the Shanghai Commercial Press through Yang Ts'un-jen to distribute its publications at 10, 20, and 30 percent discounts. In February, we succeeded in our negotiations to market for the Shanghai Evans Publishing House, but it handles mostly Western language books and very few Chinese books. Hunan did not need much Western language books. Therefore, we could not sell much. In March, Hsin-chih Bookstore was formed in Peking, which was a new bookstore with roughly the same policy as Wen-hua Bookstore. It discussed distribution with us, and we promised to do so. Hua-yang Books and Newspaper Circulation Office asked us to market its remaining stock of books in Szechwan, and the Asia Civilization Association in Peking entrusted us with its "Current Affairs Monthly," a new publication since its reorganization, and we promised both of them. In addition, many new magazine publishers negotiated with us to serve as their distributors during this period.

3. Marketing of publications: We sold over 160 kinds of books, over 40 kinds of magazines, and 3 newspapers. Since the start of business last year to the end of March this year, besides the 1-month winter vacation, business was good. The demand always exceeded the supply. On the one hand,

as our store was short of capital and could not buy in large quantities from outside areas, the small quantities were exhausted upon their arrival. On the other hand, it was the sudden upsurge of demand for new publications by society, resulting from the positive stimulation of the new thinking and the negative stimulation of the old thinking. A sudden rise of interest made the public buy all they could. It was an encouraging situation. While most of the customers belonged to the academic world, many pamphlets of the "labor field" were sold to the laborers. Age-wise, naturally most of the customers were young people, and the middle-aged adults came next.

4. Forming branches: As we want the new books to be accessible to the people in all the counties, we must set up branches in all the 75 counties. We will not handle the task ourselves, but will help the comrades of the counties to set up the branches. Those unfamiliar with the conditions of our bookstore may feel that it will be difficult to do so, but actually it is easy. One only needs sufficient capital for the first and second batches of books, as little as 50 yuan or as much as 100 yuan. Proceeds from selling the first and second batches will be sufficient for the third, and so on. Next, if the business in the counties is good, there is no problem. If not, it is not important either. The branches are already established in public places and require no independent front; therefore, the overhead is not much. In out-of-the-way counties and towns, an annual sale of tens of yuan, or even down to a few yuan, will not matter. Third, our bookstore will only charge the cost to the branches. All preferential prices and discounts are credited to the branches. Therefore, if the branches cannot make a profit due to lack of business, they will not suffer a loss either. Fourth, as a supplementary operation, the branches will not require many personnel. Fifth, the unsold stock may be returned to us. There will be no waste resulting from unsaleability. With these five advantages, we maintain the opening a branch is "easy." By the end of March this year, we already formed seven branches, i.e., P'ing-chiang, Liu-hsi, Wu-kang, Pao-ch'ing, Heng-yang, Ning-hsiang, and Shao-p'u. Besides the branch stores, there are several "sales departments." What are the differences between the branch stores and the sales departments? First, a branch store will receive the entire discount, whatever the main store gets, while the sales department receives less, only 5 percent. Second, the branches are located in the counties, while the sales departments are located in the schools in the city or operated by individuals. (Preferential prices are given to individuals selling pamphlets to ordinary people and those in the field of labor).

O"Hunan Historical Data" (Quarterly) No 3, 1959 (excerpts), Hunan People's Publishing House, 28 September 1959