The rebate plan, or any other system of artificial bolstering, is as futile as it would be to try and dam Niagara. Legislation on the subject is unnecessary and superfluous. The matter carries its own death warrant with it.
Some six years ago the drug trade got together and formed a most beautiful plan for maintaining prices. Where is that beautiful plan now? The rebate system is probably its legitimate offspring. Come to me some years hence and I expect to be able to point to a string of lineal descendants of the rebate plan, each of them as helpless to perform what is expected as the other. The world ought to be wise enough by this time to recognize the fixity of the laws which govern commerce.
I regard the principle of cutting as a settled policy in the drug business, and I shall pursue that steadily. Hegemann & Co. have done a business of about $325,000 annually. I expect to increase it to half a million dollars. In London the immense stores of the Army & Navy, and of the Civil Service have worked a revolution in the drug trade, by buying at first hands in immense quantities, and selling on close margin. They have even cut the rates on prescription business. The result has been that the chemists, as they call them there, have been compelled to come down in their prices, and a process of elimination has steadily gone on—the weak have had to go to the wall. The result is the “survival of the fittest.” These conditions apply to New York, and I venture to say that there are not over ten drug stores in the city of New York that are making their owners more than a living. With the rest it is simply a process of more or less rapid rusting out.
An absence of cut prices, and general prosperity marks the retail drug trade of Cleveland. The Cleveland Pharmaceutical Association is clannish and its dues are so moderate that almost the entire trade is within the Association. This gives rise to a brotherly feeling which makes doing business a pleasure; and prevents cuts and insures prosperity. The drug trade in many cities suffers from wholesale slashing of prices from the lack of such an Association as exists in Cleveland. The Association is thoroughly organized, and the two wholesale houses in Cleveland do everything in their power to help the retail trade along, and decline to sell at retail in
OPIUM.
In Opium the reduced estimates of the probable yield from the current crop, coupled with advices of higher prices in London and the primary market, have caused a much firmer feeling here. The bulk of the spot supply is controlled by three dealers who it is said are working in harmony to raise prices, in which effort they have already made considerable progress, it would appear, since at the close there was very little standardized to be had at $3.10, the general quotation being $3.15. Natural was held at $3.20 to $3.50. While there were no large buyers in the market, the demand for single cases and broken lots was very good. Powdered has advanced to $4.20 to $4.30 as to seller and test. We have received the following from Smyrna under date of July 13th: “There is no longer doubt that if the yield of 5,000 baskets is to be reached by the new crop (including the 1,250 baskets from Salonica) the fields on the high grounds must yield much more than the lower fields have shown up to the present moment—arrivals of 117 baskets against 570 in 1888, which certainly is a poor showing. It is true that in Constantinople, where they got the opium from the districts where the gathering was made in advance of the others this season, they had received 45 baskets against 125 last year, which is somewhat better than we can show, but is still awfully poor. Holders are very sanguine and will not sell their goods unless they get higher prices, and as they now have increased facilities for depositing their goods with banks at reasonable rates of interest, it is most probable that buyers will have to accept their terms. The stocks abroad were large, but as they have been kept all along at lower rates than what opium could be bought at in the primary markets, they have gradually melted down to reasonable quantities. London has hardly 1,000 cases, the greater part of which is Persian and high grade Turkish, not suitable for the American market. New York has about 500 cases which could be called ‘in the market.’ The balance is held by outsiders who would not part with their opium unless they get much higher prices for it. But all this is a matter of little consideration to the native merchant in Turkey; he holds on to his opium when he sees a small crop, and buyers will have either to live on the European and New York stocks or pay them something better than the starving prices they paid for the last few years.” Since this was written, some cables advise crop estimates reduced to 4,500 baskets (including Salonica), and prices in Smyrna from 9s. 3d. to 9s. 9d.
ADVANTAGES OF TRADE JOURNALS.
Trade journals have become an established institution, and the fact that they have come to stay cannot longer be doubted. Their advantage, to both the buyer as well as the seller, is manifested every day in the change which has been wrought in the present manner of transacting business. A few years ago, before these journals were established, if a party desired to purchase a certain line of goods, the first thing he would do would be to supply himself with the necessary funds, pack up his grip and start out upon a tour of observation and inspection; and after traveling over a large amount of territory and spending considerable money, would finally succeed in finding the goods sought for. The manufacturer who was desirous of introducing to the public any new line of goods, was obliged to resort to the slow, expensive and uncertain method of mailing out printed circulars, at the rate of ten dollars per thousand for postage, besides the expense of printing, folding and directing them; and perhaps eight out of every ten thus sent out, if received at all by the parties to whom directed, would find their way to the waste-paper basket without ever being opened. It being impossible to reach every one by this method, the chances for striking one who might be in want of the article named therein was often not one in five hundred, while perhaps a hundred others might be omitted who might be in want of it.
Advertising in a general way in the papers of the day was not a profitable investment. Those papers having a very large circulation, such as the “Scientific American,” the “Iron Age,” and others which might be named, were valuable papers and probably were the best mediums at that time; but their circulation, although very large, was general, and while the advertiser was charged for the space occupied at a rate based upon a circulation of 40,000 or 50,000 copies, yet in many instances but very few of the trades interested and to whom it was desirable to introduce the goods, were ever reached. For instance, the “Iron Age” circulated principally among hardware and iron dealers, who formed a considerable portion of its circulation, very few of whom had any interest whatever in saw-mill or planing-mill machinery, and so on with all other trades, and as before stated, while they were paying exorbitant rates for advertising based upon the large circulation of those journals, they were really deriving less benefit from it than they would have received from a medium of one-quarter the circulation, but devoted exclusively to this particular trade and circulated exclusively among them.