“I can tell you one thing,” said a hardware man to me, “there is a good deal of forcing down of prices done by traveling men that is entirely uncalled for. Here comes a man to me selling auger-bits. I am full, and I tell him so. He enlarges on the superior quality of his goods. I admit them to be good, but my stock is too full for me to think of adding to it. He thinks it possible there will be an advance, as at 70 and 5 per cent. off the list there is a positive loss to the maker. I have no fears of an immediate advance, and say so. Then he says: 'Mr. X., I am very anxious to get a small order from you; trade is not very brisk with me, and, as an inducement, I will give you an extra 5 per cent.' Knowing this to be lower than others are quoting, and feeling well satisfied that the goods are liable to advance rather than decline, when they change, I make out an order for him. But how is he going to justify that cut to his factory? It was absolutely uncalled for. It was not done to meet competition, but to beat competition, and was simply a bait to lead me to order when otherwise I would not have ordered.”
“But,” said another man, “go back of that a little. At 70 per cent. discount the maker is barely getting back 100 cents for what actually costs him one dollar. He is trimming as close as he can in everything to keep him from loss; wages are cut down, economy in material practiced, and every detail scrimped to the last possible limit Then this order comes in from the salesman at a still lower figure. No further scrimping can be done in material—that has a limit that cannot be passed—where, then, can any saving be made? Only in the wages. The workmen are shown the prices that the goods are now sold at, and told that there is but one thing for the factory to do: to meet this 'competition,' or close up. And, of course, the meaning of this is another reduction in the already well-reduced wages. I declare, a man must have a good deal of gall to be drawing a salary of from $1,800 to $3,500 per year and ask a workman to take 10 per cent. off his wages of $1 per day.”
“Yes, and you will notice,” said the first speaker, “that all this was done that the traveling man might have an order to send in, and not because of any requirements of competition or of demand and supply. When I read of workingmen striking I think of these things and wonder what they would do if they could see what we merchants see of unnecessary cutting in prices. Manufacturers and jobbers send men out to present the merits of their goods, but their sole idea of a 'smart' man is one whose sales are large. If they have a dozen men on the road, the man who sells the most goods is the champion man. He sells big bills and is expected to cut prices. But one of the men who makes less show may be much the most profitable for them.”
“You would keep account of profits rather than of sales?”
“Certainly I would, and pay salaries on that basis. Then the salesman would have strong inducements to get good prices. As it is now all he need ask himself is: 'Will the old man stand the cut?' and if he does it is as much a feather in his cap to make the sale as if it was at better prices. Take the matter of steel squares. One of my men writes in that a Cleveland jobber is selling them to the smallest trade at 75 and 10 per cent. off. I investigate and find that they can be bought at 80 off. But the several manufacturers shake their heads and say this price is a positive loss, etc., etc. Then what the d—l do they sell at that price for? Neither dealers nor consumers were complaining of the old prices, and all the extra stock that is sold by the cut goes on to the dealers' shelves. The decline is made to a few jobbers, and they at once start out their men to give it to the retailers, and to use it as a bait, and when other jobbers learn it they combine to squeeze the price down so that all can get it. This is a sample of generalship that the square makers ought to be ashamed of.”
“Yes, but the carriage-bolt men of the country have been playing just that same kind of a fool game for several years. Who is benefited? No one, unless it is the big wagon concerns, or the big machine men. I am told that men in bolt factories at present prices do not make $1 a day. Why should they work for starvation wages so that the concerns using bolts can save 40 per cent on their purchase? It's a cursed outrage! The older manufacturers can stand it, because they just coined money a few years ago, but now they must squeeze their poor devils of workmen down in order that they can sell goods at nothing. If the Knights of Labor were devoting themselves to righting wrongs of this kind, the whole country would back them up.”
“I often feel sorry for some of the concerns,” said the other, “when I have met the 'managers.' I came back from New York three years ago and told my partner if Lawson & Goodrow could make money as their New York office was run, that no one else need worry about his business. Here was an old concern, with every facility for making goods cheap, with a reputation for quality second to none in the country, with experienced workmen, and a good hold on the trade, yet they failed a year or two ago, and made so bad a failure I supposed they were swamped forever.”
“But they are going on.”
“Yes; I'm glad to see it, and understand that new brains have taken hold of it. But think of putting in as manager of such a business a young man just out of college! He was a very pleasant gentleman; I remember him with a warm sense of his courtesy, but he did not know the A, B, C of business. Fancy such a man competing with Oakman or Charley Landers!”
“You've got to get up early to get ahead of Landers.'
“Yes, Landers is a man of resources and thoroughly understands human nature. I rode down on the New Haven boat with him one night, and I spent two very pleasant hours on deck talking with him. He makes a good impression on you, both as to his shrewdness and his breadth. You get the idea that he is not small in his methods, and that he has an active mind. I imagine that when he took hold of the management of his concern, after Jim Frary had stepped down and out, he had about as unpromising a job on his bands as a man could have. Frary was a terrible cuss to pile up goods, I'm told, and the stock was in horrible shape. But Landers rode through the storm, and his business has seen some mighty prosperous years.”
“Did you know Rubel?”
“Of Chicago? Yes, indeed. Poor fellow, I received a card a day or two ago announcing his death. He ought to have been good for twenty years yet. I bought some of his patent goods sixteen or eighteen years ago, and sold more or less of his brand ever since. His plant in Chicago shows what was in him. I hated, like thunder, to sell his goods when they were branded 'Chicago,' but when he changed that to 'American' I bought as freely of him as from others. He was jovial, sociable, and wide awake. I wish he might have lived to enjoy his well-earned success.”
“What has become of Jim Frary?”
“I have lost sight of him. If any man ever had a good chance to make a strike I think Frary is the man. With Weibusch back of him, furnishing money and brains, with a combination in prices on a profitable basis, and with the boom in business, that concern ought to have made piles of money. But it is not generally supposed that they did. Frary has become temporarily eclipsed, and General Trunk manages it as if it was an orchestra. I don't know if he gets much music out, but he probably enjoys bossing things; that's worth a great deal to him.” [Footnote: As is known to the trade, within a very few weeks after the above article was written the Frary Cutlery Co. failed, and have since been sold out under the hammer. And prices of table cutlery are once more “booming.”]
“Don't you like Trunk?”
“Like him? Of course I do. You would if you were to meet him. He's one of the most unassuming and gentle-mannered men you ever met. If he only had a little confidence in himself he would be the Napoleon of the table cutlery trade, but he is inclined to listen to everybody's advice and not assert himself.”
“I had a deal with Frary once that amused me. I had been handling a small, one-bladed knife that we paid about 40 cents per dozen for. We made quite a leader of it, but were told, in answer to our last order sent, that the stock was out. We tried to get it two or three times afterward, but without success. The next time I saw one of the men I asked him why the dickens we couldn't get that knife again. 'We have given it up,' I was told; our cost book showed the cost to be 36 cents per dozen, so we supposed we were getting our money back, but somebody had the curiosity to foot up the items not long ago, and found an error in adding of 20 cents; the knife had really cost 56 cents! Fancy a concern doing business in that way!”
“There are any numbers of just such concerns. Every little while you see changes made in prices to correct errors. There's a deal of guessing done around factories, and also a good deal of figuring on what a competitor does. One man learns of a competitor making a certain price, and says, 'If he can sell at that, I can,' and that becomes his price, without his even knowing that he is making money or losing at these figures.”
“I think a good many dealers sell goods by guess, as well as the manufacturers. This is especially true of retailers. A level-headed man, named Root, has got up a series of cost cards that will be of help to the hardware trade, but other lines need them just as much.”
“But all the cards in the world will not keep the blank fools from selling goods at cost. Here is an item in an Eastern paper about two Connecticut concerns who sold 'crazy cloth' (whatever that is) under each other's price, till at last one fool offered it at 1 cent a yard, and then the probably they had been listening to his free trade slush.”
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