MERCHANT'S PROFIT ON HOSIERY
One of the peculiarities of the hosiery trade, as described in the evidence of the merchants, is that they have no profit on the hosiery and fancy articles, which they invoice to merchants in the south at prices either the same as the prices paid for them in goods, or so little higher as only to cover the risk and loss upon damaged articles and job lots. They say that the only exception to this is in the case of fine fancy work, which is often bought for cash, and in selling which they can readily obtain a sufficient profit. There is a good deal of evidence about this which rather tends to show that although dealers in Shetland invoice their goods to trade purchasers in London, Edinburgh, and elsewhere, at such prices as are, upon the whole of their sales, sufficient to keep them free from loss and allow a profit, yet that profit is very small, being at most a small commission for the trouble of getting the goods disposed of; and that they have a much less, but still considerable, trade with private purchasers, in which they realize considerable profit. The inquiry into traders' profits was not prosecuted in a more searching way, by examining themselves and their knitters at length upon invoices and specimens of goods, because the sufficiently intrusive inquiry which was made, and which stands in various parts of the printed evidence, seemed clearly enough to show that the truth as to this collateral question is as I have stated it.
[A. Laurenson, 2199, 2264; R. Sinclair, 2525, 3246, etc.; R.
Linklater, 2728; J. Tulloch, 2795, etc.; W. Johnston, 2844; T.
Nicholson, 3584; M. Laurenson, 7517.]
MERCHANTS PRICES FOR GOODS
But while the merchants assert that they have no direct profit upon their sales of knitted goods, or at least none but the smallest, they do not deny that, in order to repay themselves for the trouble and risk involved in the two transactions upon which this profit is realized, they charge considerably more for their tea and drapery goods than the ordinary retail price in other districts. In other words, although there is nominally no profit upon the knitted goods, there is a double profit, or a very large profit, on the drapery goods, tea, etc., bartered for it. If, therefore, we calculate what the price of these goods should be at the ordinary retail rate, and deduct the surplus from the nominal price of the knitted articles, we find that the usual percentage of profit is obtained on the latter as well as on the tea and drapery.
TWO PRICES FOR GOODS
In some places, indeed, there are two prices for goods, according as they are paid for with hosiery or with money; and formerly this was the custom in Lerwick. Mr. R. Sinclair says:
'2574. Then I understand you to say that in every bargain with a knitter, and generally with a seller, of a shawl, the understanding is that they are to take the price in goods?-Yes; that has been so time out of mind. I remember a time, about forty years ago, when it was different, and when there were two prices on the goods which they sold.' '2575. There were two prices then-one for cash, and the other for goods?-Yes; perhaps from 20 to 30 per cent. of difference. I remember hearing that question discussed at my father's fire when I was a mere youth. I have been told, although I do not know it myself, because I was not in the trade then, that a woman may have bought a piece of goods for 16d., when a party paying cash for it only paid 1s. The more intelligent of the natives thought that was an iniquitous thing; but then it was always known and done avowedly, and the people yielded to it. They said it was not possible for them to take barter, and sell their goods at the same rate, because there was so much risk and outlay. That reason never appeared satisfactory to me; and it was not until I came behind the scenes, as it were, that I saw the reason for it was that the value given for Shetland goods was far beyond what it really was worth in the market. Its real value in the market was about the same amount less than what was charged as an addition upon the goods. What I mean is, that, supposing a woman came in with a pair of stockings, the real market price of which was 2s., but for which she wished 2s. 6d., the merchant, in order to secure a sale for his goods, would give her goods in exchange of the nominal value of 2s. 6d., but he would put 3d. a yard on the price of the goods which he gave in exchange. That explains how it is that a person knowing the value of the articles, seeing the purchase which the woman might have made, and hearing the price of it, might have said that they were about 25 per cent. too high, whereas in reality they were not so. She had merely been getting value for her goods, although she did not know it; and it would not have made any difference, although it had been as many pounds higher, while the relative proportions were kept up between the value of the two articles.' '2576. Is that done now?-Not that I know of.'
A discount for cash is still given there by some (or all?) of the merchants; but it has not been shown, nor I think alleged, with regard to Lerwick, that the principal merchants now avowedly sell their goods at different prices for cash and for hosiery. There are, however, passages in their evidence which create a strong impression that the custom described by Mr. Sinclair as a thing of the past is not yet entirely obsolete, even in the capital. Thus Mr. Sinclair himself has now two drapery shops in Lerwick, in one of which no hosiery is bought at all, all the dealings being for cash. He admits that in some things, <e.g.> calicoes, there is 'a very small shade of difference' between the prices there and in his other shop, which is his principal one. Mr. Johnstone's reason for ceasing to issue lines was simply that people used to come to his shop and bargain for articles as for cash, and end by presenting one of his 'lines' in payment, which would not have been felt as a grievance if the principle of having only one price were rigidly adhered to. The evidence as to the general prices at the shops which take in knitted articles also leads to the conclusion that, although articles are nominally for sale at one price, a purchaser for cash often succeeds in getting a reduction if she is a shrewd bargainer. The shopkeeper classifies some articles as 'money articles,' which is a convenient reason for not giving them in exchange for hosiery; and the impression seemed to exist in the minds of some keen purchasers examined as witnesses, that goods are sometimes rather rapidly transferred into that category, when it is unexpectedly discovered, after the negotiations have reached a certain point, that the intention is to pay for them otherwise than in cash.
[T. Nicholson, 3586; R. Sinclair, 3229; W. Johnstone, 2280; Mrs.
Nicholson, 3510; L. Leslie, 5093.]