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(g) It was argued that the foreign agent auction system hurt the country because it tended to cause the export of money which would otherwise be expended inside our boundaries. An estimate of the profits of foreign agents in 1825 was $2,000,000, which, it was pointed out, would employ 500 principal merchants, with their 1,000 clerks and assistants, together with their families, and require stores, warehouses and dwellings, fully 1,000 houses with rentals of $250,000, and would percolate to advantage through mechanics, dependent branches of business, farmers, etc.141

(h) Auction sales disturbed the regularity and dependability of commerce and industry. Dumping by foreign manufacturers had that very purpose. That steadiness of market which is required to yield a reasonable profit and regular employment was adversely affected.142 Prices fluctuated widely and speculative purchases were fostered.143

(i) A charge against auctions, reiterated without end, was that they injected into use a poorer quality of goods than the people were wont to buy by private treaty and than they thought they were buying. It was a period when, the world over, people began to wear cheaper clothes introduced and made possible by the Industrial Revolution, particularly cotton goods. Auctions probably did facilitate this change of custom in costume by breaking the rigid trade channels and giving the manufacturer a competing outlet for his new products. But the enemies of the auction system charged the manufacturers and auctioneers with fraudulent activities. It was alleged that manufacturers prepared "on purpose for auctions, goods defective in every respect-in length, width, quality, color, and pattern, which no reputable house would venture to import and to offer at private sale-and which would be dear at any price"; that they used auctions to force the sale of refuse and damaged goods145; and

141 Niles, 27: 274, 289. This Mercantilistic doctrine is immemorial; for a similar complaint in 1704 see Goodrich, Picture, 45.

142 Niles, 27: 273; 34: 259.

143 Niles, 34: 258, 259, 350.

144 Niles, 34: 258; 31: 24, 86; 18: 419-420. "Remarks upon the Auction System," 18-21. Some of these charges smack strongly of protectionism and connote a newspaper propaganda.

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that they artfully made and packed the poor quality goods so that none but good judges could discriminate.146 Auctions were supposed to facilitate these deceptions because the time and conveniences allowed to examine the goods were entirely inadequate.147 Auctions caused a decline in the "distinctive character of goods," that is, they could no longer be bought simply by name and brand and number148 but only after personal inspection. These allegations were probably somewhat exaggerated, for most of the goods sold at auction were sent there from the stocks of importers and retailers149 and the difficulty of examining the goods in the short interval at time of sale was "in some measure removed by the previous exposure of the goods for examination (1 to 3 days) and also by the three days allowed after each sale, as allowed by common custom for the examination, within which time, goods sold as perfect, and of specific lengths, breadths and qualities, if found to differ from the terms of sale, in either of these respects," might be returned, or retained by the purchaser "receiving such deductions as may be agreed upon at his option."150 That so few claims were made for deficiencies is evidence that the frauds were not rank.151

(j) Various undesirable social results were ascribed to auctions. They were thought to lower private morals. Deceptions, frauds, irresponsible sellers, etc., which were alleged to prevail at auctions, were said to be subversive of "the mutual

140

Niles, 18: 419. The difference amounted to at least 20%.

147 "Remarks upon the Auction System," 42-4. "At what are called piece or shelf sales, which form nine-tenths of auction sales,-one minute, or even less, and scarcely ever so much as two minutes, is all the time. usually allowed to a large company of perhaps two hundred buyers, to examine, in the twilight of an auction store, amidst noise and confusion, goods which they never saw before. The worse the goods-the shorter will probably be the time given." Niles, 34: 259.

148

"Names and lengths now (1828) really mean nothing-for years past all has been confusion." "Remarks upon the Auction System," 22-26. Instances are given.

14 "An Examination of Remarks upon the Auction System," 10. 150 N. Y. Assembly Journal, 1829, p. 393.

"The average amount of deductions made from package sales of British dry goods, for claims of every nature, will not equal the onesixteenth of one per cent." Auctioneers' Memorial, Annals of Congress, 16th Congress, 2d session, p. 1528.

confidence and courtesy that subsisted, in our better days, between the responsible importer and his customers," "subversive of all the milder and kindlier charities of our nature, and unavoidably conducive to progressive and infinite depravity."152 The spirit of gambling was supposed to be excited by bidding at public sales, and resulted in over-buying, bankruptcies and misery.153 The auctioneers claimed that their business was conducted on a high moral plane, and that credit extensions by private treaty sellers encouraged over-buying to a greater extent than auction sales.154

(k) In this connection certain business practices were criticized. Fictitious bidding at auctions was alleged; false news was published; the market was rigged; etc.155 To evade auction duties small quantities of a certain commodity were offered at auction to determine the price, and then large sales at this price were made in private; false reports of sales were used156; the auctioneers sold their commissions,157 conducted sales at other places than their regular place of business,158 and did other irregular things.

CAMPAIGN AGAINST THE AUCTIONS.

The opponents of auctions tried openly three methods for ousting or restricting them. One was a vehement publicity campaign exposing their evils and shortcomings in violent and exaggerated language. This was done through newspapers, pamphlets and mercantile associations. The campaign was nation-wide but largely concentrated in the seaboard cities. Alliances between cities and with the protectionists were effected. The auctioneers fought this by a counter publicity campaign

152 Citizens' Committee, N. Y.; Niles, 34: 258.

133 Niles, 19: 131.

154

Annals of Congress, 16th Congress, 1st session, p. 2175; 2d session, p. 1529; N. Y. Assembly Journal, 1829, p. 393.

135

156

Niles, 34: 261; "Remarks upon the Auction System," 44-6.

Niles, 18: 420; "Ruinous Tendency,” 13; Annals of Congress, 13th Congress, Vol. III, p. 1853; Bolles, 113; N. Y. Senate Document 44 (1832), Vol. I, p. 6.

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and by threats to withdraw their advertisements from hostile newspapers.159

160

The second device was to boycott the auctions. The members of merchant associations agreed to purchase no goods at auction and to deal with no one who did. The United Dry Goods Association of New York in 1821 adopted unanimously a strong resolution against auctions but found after a short trial that its boycott was not respected by its members and repealed by close vote so much of the resolution as bound them to boycott.1 In 1830 165 dealers in New York pledged themselves for one year not to purchase at any sale by auction where endorsed notes were required because they believed auction sales should be on an equality in this respect with private sales. Another large list of dealers pledged themselves not to deal with auctioneers who at a package sale exhibited dry goods in lots or parcels of less value than $150, except in original packages, or who offered for sale duplicate packages not declared in the catalogue, or refused to sell a sample lot that had been exhibited. And a third long list of signers agreed not to attend, or be concerned in any purchase made at, auction after two o'clock P. M.161 Boycotts of this limited nature which sought to correct specific abuses were more successful than omnibus boycotts against the whole auction. system.

The third method of opposition was legislation, by the State and federal governments.

STATE LEGISLATION.

The colonies had from very early dates regulated auction sales; the regulations pertained to the places and times of auctions, the appointment of the auctioneer, his commission, his bond, the goods salable, reports, etc. In 1713 New York laid a duty on auction sales162 and auctions were taxed almost continuously

159 Niles, 36: 186.

160 Niles, 21: 103.

161 Niles, 37, 410.

162 Act of October 23, 1713, chapter 267; cf. Act of July 5, 1715, chapter 294; cf. Act of May 14, 1717, chapter 326, and Act of June 24,

thereafter throughout the 18th century. In 1804 New York experimented in classifying goods according to their sources and kinds and original packages and in fixing different taxes accordingly,163 but abandoned the plan temporarily in 1814 and adopted a flat rate.164 In 1801 the number of auctioneers in the City of New York was limited by law to 24, in 1803 to 30, in 1813 to 36, in 1824 to 42, and in 1825 to 54. In 1817 the auction law was overhauled but with no animosity toward the auction system; the taxes laid were $2 per $100 sales of wines and ardent spirits, $1 per $100 sales of East India goods, in original package, and $1.50 per $100 sales of all other goods whatsoever; auctioneers were to be appointed by the governor and council, as many as he pleased, but not more than 36 for New York City; the mayor was to name the place of sale at auction of horses, carriages and household furniture, auctions held at other than his place of business had to have two days' notice in the newspapers; auctioneers forfeited their licenses by accepting a license in another state; the auctioneer was to pay to the State a tax of 22% of the auction duties collected by him.165 This act was sponsored and approved by the auctioneers and was wholly regulatory and fiscal in purpose; auctions had not yet incurred the displeasure of protectionists, merchants and retailers. The auction revenues

1719; cf. Act of November 19, 1720, chapter 399. These acts show that it became the permanent policy to use auction sales as a source of revenue early in the 18th century. For later similar acts see Act of May 20, 1769, chapter 1392, and amendment of January 1, 1770, and Act of February 26, 1772, chapter 1516, and the Act of February 20, 1784, 7th session. chapter 4, and Act of April 2, 1801, chapter 116.

103

Act of April 6, 1804, chapter 65; these rates were modified by the Act of April 6, 1813, chapter 70.

See note, page 171.

104 Act of April 13, 1814, chapter 116. 165 Act of April 15, 1817, chapter 275. This 22% tax was a sort of license tax and was continued till 1843, even after the limitation on the number of auctioneers was removed in 1838, when it was no longer warranted. See Annual Report, Comptroller, N. Y., 843, p. 63; Act of February 28, 1838, chapter 52; and Act of April 8, 1843, chapter 86; Governor Van Buren criticised the monopolistic nature of auctioneers and recommended that the law be modified to allow every citizen who could give security for the duties to sell at auction by wholesale only. under license. Governors' Messages, Vol. III, p. 246-7.

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