CHAPTER XXIII.
“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.”