The Atlantic Monthly, Volume 07, No. 40, February, 1861

The crisis of 1857 brought a general collapse. Scores and scores of jobbers failed; very few dared to buy goods. Mills were compelled to run on short time, or to cease altogether. The country became bare of the common necessaries of life. In process of time trade rallied. Manufacturing recommenced; orders for goods poured in; and for a twelve-month and more the manufacturer has had it all his own way. His goods are all sold ahead, months ahead of his ability to manufacture. He makes his own price, and chooses his customer. This operates not unkindly on the jobbers who are wealthy and independent; but for those who have but lately begun to mount the hill of difficulty, it offers one more impediment. For, to men who have a great many goods to sell, it is a matter of moment to secure the customers who can buy in large quantities, and whose notes will bring the money of banks or private capitalists as soon as offered. Against such buyers, men of limited means and of only average business-ability have but a poor chance. There will always be some articles of merchandise in the buying or selling of which they cannot compete.

When a financial crisis overtakes the community, we hear much and sharp censure of all speculation. Speculators, one and all, are forthwith consigned to an abyss of obloquy. The virtuous public outside of trade washes its hands of all participation in the iniquity. This same virtuous public knows very little of what it is talking about. What is speculation? Shall we say, in brief and in general, that it consists in running risks, in taking extra-hazardous risks, on the chance of making unusually large profits? Is it that men have abandoned the careful ways of the fathers, and do not confine themselves to small stores, small stocks, and cash transactions? And do you know who it is that has compelled this change? That same public who denounce speculation in one breath, and in the next clamor for goods at low prices, and force the jobber into large stores and large sales at small profits as the indispensable condition of his very existence.

Those who thus rail at speculation are generally quite unaware that their own inexorable demand for goods at low prices is one of the principal efficient causes of that of which they complain. They do not know that the capacious maw of the insatiable public is yearly filled with millions on millions of shirtings and sheetings, and other articles of prime necessity, without one farthing of profit to the jobber. The outside world reason from the assumption, that the jobber might, but will not, avoid taking considerable risks. They do not consider, for they do not know, how entirely all is changed from the days and circumstances in which a very small business would suffice to maintain the merchant. They do not consider, that, an immense amount of goods being of compulsion sold without profit, a yet other huge amount must be so sold as to compensate for this. Nor do they consider that the possibility of doing this is often contingent upon the buyer's carefully calculated probability of a rise in the article he is purchasing. Many a time is the jobber enabled and inclined to purchase largely only by the assurance that from the time of his purchase the price will be advanced.

The selling of dry-goods is another department in high art about which the ignorance of outsiders is ineffable. I was once asked, in the way of courtesy and good neighborhood, to call on a clergyman in our vicinity,—which I did. Desirous of doing his part in the matter of good fellowship and smooth conversation, he began thus:—

"Well, now, Mr. Smith, you know all about business: I suppose, if I were to go into a store to buy goods, nineteen men out of twenty would cheat me, if they could; wouldn't they?"

"No, Sir!" I answered, with a swelling of indignation at the injustice, a mingling of pity for the ignorance, and a foreboding of small benefit from the preaching of a minister of the gospel who knew so little of the world he lived in. "No, Sir; nineteen men in twenty would not cheat you, if they could; for the best of all reasons,—it would be dead against their own interest."

Not a day passes but the question is asked by our youths who are being initiated in the routine of selling goods,—"Is this honest? Is that honest? Is it honest to mark your goods as costing more than they do cost? Is it honest to ask one man more than you ask another? Ought not the same price to be named to every buyer? Isn't it cheating to get twenty-five per cent. profit? Can a man sell goods without lying? Are men compelled to lie and cheat a little in order to earn an honest living?" What is the reason that these questions will keep coming up? That they can no more be laid than Banquo's ghost? Here are some of the reasons. First, and foremost, multitudes of young men, whose parents followed the plough, the loom, or the anvil, have taken it into their heads, that they will neither dig, hammer, nor ply the shuttle. To soil their hands with manual labor they cannot abide. The sphere of commerce looks to their longing eyes a better thing than lying down in green pastures, or than a peaceful life beside still waters, procured by laborious farming, or by any mechanical pursuit. Clean linen and stylish apparel are inseparably associated in their minds with an easy and elegant life, and so they pour into our cities, and the ranks of the merchants are filled, and over-filled, many times. Once, the merchant had only to procure an inviting stock, and his goods sold themselves. He did not go after customers; they came to him; and it was a matter of favor to them to supply their wants. Now, all that is changed. There are many more merchants than are needed; buyers are in request; and buyers whose credit is the best, to a very great extent, dictate the prices at which they will buy. The question is no longer, How large a profit can I get? but, How small a profit shall I accept? The competition for customers is so fierce that the seller hardly dares ask any profit, for fear his more anxious neighbor will undersell him. In order to attract customers, one thing after another has been made "a leading article," a bait to be offered at cost or even less than cost,—that being oftentimes the condition on which alone the purchaser will make a beginning of buying.

"Jenkins," cried an anxious seller, "you don't buy anything of me, and I can sell you as cheap as any. Here's a bale of sheetings now, at eight cents, will do you good."

"How many have you got?"

"Oh, plenty."

"Well, how many?"

"Fifteen bales."

"Well, I'll take them."

"Come in and buy something more."

"No, nothing more to-day."

There was a loss of seventy-five dollars, and he did not dare buy more.

It will be obvious that the selling a part of one's goods at less than cost enhances the necessity of getting a profit on the rest. But how to do this, under the sharp scrutiny of a buyer who knows that his own success, not to say his very existence, depends upon his paying no profit possible to be avoided,—no profit, at all events, not certainly paid by some sharp neighbor who is competing with him for the same trade?

"But is there anything in all this," you are asking, "to preclude the jobber's telling the truth?" Nothing. "Anything to preclude strict honesty?" Nothing. "Why, then, do the questions you have quoted continually recur?"

I answer: In order to get his share of the best custom in his line, the dry-goods jobber has taken a store in the best position in town, at a rent of from three to fifty thousand dollars a year; has hired men and boys at all prices, from fifty dollars to five thousand,—and enough of these to result in an aggregate of from five to fifty thousand dollars a year for help, without which his business cannot be done. Add to this the usual average for store-expenses of every name, and for the family-expenses of two, five, or seven partners, and you find a dry-goods firm under the necessity of getting out of their year's sales somewhere from fifteen to a hundred and fifty thousand dollars profit, before they shall have saved one cent to meet the losses of an unfavorable season.

Now, though there is nothing even in all these urgencies to justify a single lie or fraud, there is much to sharpen a man's wits to secure the sale of his goods,—much to educate him in all manner of expedients to baffle the inquiries of customers who would be offended, if they could discover that he ever charged them the profit without which he could never meet his expenses. And the jobber's problem is complicated by the folly, universally prevalent among buyers, of expecting some partiality or peculiarity of favor over their neighbors who are just as good as themselves. Every dry-goods jobber knows that his customer's foolish hope and expectation often demand three absurdities of him: first, the assurance that he has the advantage over all other jobbers in a better stock of goods, better bought; secondly, that he has a peculiar friendship for himself; and thirdly, that, though of other men he must needs get a profit, in his special instance he shall ask little or none; and that, such is his regard for him, it is a matter of no moment whether he live in Lowell or Louisiana, in New Bedford or Nebraska, or whether he pay New England bank-notes within thirty days, or wild-cat money and wild lands, which may be converted into cash, with more or less expense and loss, somewhere between nine months and nine-and-twenty years.

And yet the uninitiated "can't understand how an honest merchant can have two prices for the same goods." An honest man has but one price for the same goods, and that is the cash price. All outside of that is barter,—goods for notes. His first inquiry is, What is the market-value of the note offered? True, he knows that many of the notes he takes cannot be sold at all; but he also knows that the notes he is willing to take will in the aggregate be guarantied by a reservation of one, two, or three per cent., and that the note of the particular applicant for credit will tend to swell or to diminish the rate; and he cannot afford to exchange his goods for any note, except at a profit which will guaranty its payment when due,—which, in other words, will make the note equal in value to cash.

Now it is just because all business-contingencies cannot be worked into an unvarying form, as regular as the multiplication-table, and as plain to the apprehension of all men, that a vast amount of lying and of dishonesty is imputed, where it does not exist. Merchants are much like other men,—wise and unwise, far-sighted and short-sighted, selfish and unselfish, honest and dishonest. But that they are as a class more dishonest than other men is so far from being true, that I much doubt if we should overstrain the matter, if we should affirm that they are the most honest class of men in the community. There is much in their training which contributes directly, and most efficiently, to this result. Their very first lessons are in feet and inches, in pounds and ounces, in exact calculations, in accounts and balances. Carelessness, mistakes, inaccuracies, they are made to understand, are unpardonable sins. The boy who goes into a store learns, for the first time, that half a cent, a quarter of a cent, an eighth of a cent, may be a matter of the gravest import. He finds a thorough book-keeper absolutely refusing himself rest till he has detected an error of ten cents in a business of six months. And every day's experience enforces the lesson. It is giving what is due, and claiming what is due, from year's end to year's end. Among merchants it is matter of common notoriety, that the prompt and exact adherence to orders insisted on by merchants, and prompt advice of receipt of business and of progress, cannot be expected from our worthy brethren at the bar. (The few honorable exceptions are respectfully informed that they are not referred to.) We do not expect them to weigh or measure the needless annoyance to which they often subject us, because they have never been, like ourselves, trained to the use of weights and measures; and therefore we are not willing to stigmatize them as dishonest, though they do, in fact, often steal our time and strength and patience, by withholding an answer to a business-letter.

None but those who are in the business know the assiduous attention with which the dry-goods jobber follows up his customers. None but they know the urgent necessity of doing this. The jobber may have travelled a thousand miles to make his customer's acquaintance, and to prevail upon him to come to Boston to make his purchases; and some neighbor, who boards at the hotel he happens to make his resting-place, lights upon him, shows him attention, tempts him with bargains not to be refused, prevails upon him to make the bulk of his purchases of him, before his first acquaintance even hears of his arrival. To guard against disappointments such as this, the jobber sends his salesmen to live at hotels, haunts the hotels himself, studies the hotel-register far more assiduously than he can study his own comfort, or the comfort of his wife and children. Of one such jobber it was said, facetiously,—"He goes the round of all the hotels every morning with a lantern, to wake up his customers." I had an errand one day at noon to such a devotee. Inquiring for him in the counting-room, I was told by his book-keeper to follow the stairs to the top of the store, and I should find him. I mounted flight after flight to the attic, and there I found, not only the man, but also one or two of his customers, surrounding a huge packing-case, upon which they had extemporized a dinner, cold turkey and tongue, and other edibles, taken standing, with plenty of fun for a dessert. The next time we happened to meet, I said,—"So you take not only time, but also customers, by the forelock!"

"Yes, to be sure," was his answer; "let 'em go to their hotel to dinner in the middle of a bill, and somebody lights upon 'em, and carries 'em off to buy elsewhere; or they begin to remember that it is a long way home, feel homesick, slip off to New York as being so far on the way, and that's the last you see of 'em. No, we're bound to see 'em through, and no let-up till they've bought all they've got on their memorandum."

We have not yet touched the question of credit. To whom shall the jobber sell his goods? It is the question of questions. Many a man who has bought well, who in other respects has sold well, who possessed all the characteristics which recommend a man to the confidence and to the good-will of his fellows, has made shipwreck of his fortunes because of his inability to meet this question. He sold his goods to men who never paid him. To say that in this the most successful jobbers are governed by an instinct, by an intuitive conviction which is superior to all rules of judgment, would be to allege what it would be difficult to prove. It would be less difficult to maintain that every competent merchant, however unconscious of the fact, has a standard of judgment by which he tries each applicant for credit. There are characteristics of men who can safely be credited, entirely familiar to his thoughts. He looks upon the man and instantly feels that he is or is not the man for him. He thinks his decision an instinct, or an intuition, because, through much practice, these mental operations have become so rapid as to defy analysis. Not being infallible, he sometimes mistakes; and when he so mistakes, he will be sure to say,—I made that loss because I relied too much upon this characteristic, or because I did not allow its proper weight to the absence of some other,—because I thought his shrewdness or his honesty, his enterprise or his economy, would save him: implying that he had observed some non-conformity to his standard, but had relied upon some excellency in excess to make up for it.

What are the perplexities which beset the question, To whom shall the jobber sell his goods? They are manifold; and some of them are peculiar to our country. Our territory is very extensive; our population very heterogeneous; the economy and close calculation which recommend a man in Massachusetts may discredit him in Louisiana. The very countenance is often a sure indication of character and of capacity, when it is one of a class and a region whose peculiarities we thoroughly understand; but coming to us from other classes and regions, we are often at fault,—more especially in these latter days, when all strong-mindedness is presumed to be foreshadowed in a stiff beard. Time was when something could be inferred from a lip, a mouth, a chin,—when character could be found in the contour and color of a cheek; but that time has passed. The time was, when, among a homogeneous people, a few time-honored characteristics were both relied on and insisted on: for example, good parentage, good moral character, a thorough training, and superior capacity, joined to industry, economy, sound judgment, and good manners. But Young America has learned to make light of some of these, and to dispense altogether with others of them.

Once the buyer was required to prove himself an honest, worthy, and capable man. If he wanted credit, he must humbly sue for it, and prove himself deserving of it; and no man thought of applying for it who was not prepared to furnish irrefragable evidence. Once, a reference to some respectable acquaintance would serve the purpose; and neighbors held themselves bound to tell all they knew. The increase of merchants, and fierce competition for customers, have changed this. Men now regard their knowledge of other men as a part of their capital or stock-in-trade. Their knowledge has been acquired at much cost of labor and money; and they hold themselves absolved from all obligation to give away what they have thus expensively acquired. Moreover, their confidence has sometimes been betrayed, and their free communications have been remorselessly used to their disadvantage. Alas, it cannot be denied that even dry-goods jobbers, with all their extraordinary endowments, are not quite perfect! for some of them will "state the thing that is not," and others "convey" their neighbor's property into their own coffers: men who prefer gain to godliness, and mistake much money for respectability.

There are very few men, in certain sections of the country, who will absolutely refuse to give a letter of introduction to a neighbor on the simple ground of ill-desert. Men dread the ill-will of their neighbor, and particularly the ill-will of an unscrupulous neighbor; so, when such a neighbor asks a letter, they give it. I remember such a one bringing a dozen or more letters, some of which contained the highest commendation. The writer of one of these letters sent a private note, through the mail, warning one of the persons addressed against the bearer of his own commendatory letter. Those who had no warning sold, and lost. It would be difficult to find a man, however unworthy, who could not, from some quarter, obtain a very respectable letter of introduction. One of the greatest rogues that ever came to Boston brought letters from two of the foremost houses in New York to two firms second to none in Boston. Neither of these gentlemen was in fault in the matter; the train had been laid by some obliging cousin in a banking-house in London.

In making up our account of the difficulties with which a dry-goods jobber has to deal, in conducting a successful business, it must be distinctly stated, that on no man can he count for information which will, however remotely or slightly, compromise the interest of the one inquired of. Never, perhaps, was it so true as now, that "the seller has need of a hundred eyes." The competent jobber uses his eyes first of all upon the person of the man who desires to buy of him. He questions him about himself, with such directness or indirectness as instinct and experience dictate. He learns to discriminate between the sensitiveness of the high-toned honest man and the sensitiveness of the rogue. Many men of each class are inclined to resent and resist the catechism. Strange as it may seem, the very men who would inexorably refuse a credit to those who should decline to answer their inquiries are the men most inclined to resent any inquiry about themselves. While they demand the fullest and most particular information from their customers, they wonder that others will not take them on their own estimate of themselves.

The jobber next directs his attention to the buyer's knowledge of goods: of their quality, their style, their worth in market, and their fitness for his own market; all of which will come to light, as he offers to his notice the various articles he has for sale. He will improve the opportunity to draw him out in general conversation, so guiding it as to touch many points of importance, and yet not so as to betray a want of confidence. He sounds him as to his knowledge of other merchants at home and in the city; takes the names of his references,—of several, if he can get them; puts himself in communication with men who know him, both at his home and in the city. If he can harmonize the information derived from all these sources into a consistent and satisfactory whole, he will then do his utmost to secure his customer, both by selling him his goods at a profit so small that he need have little fear of any neighbor's underselling him, and also by granting every possible accommodation as to the time and manner of payment.

A moderately thoughtful man will by this time begin to think the elements of toil and of perplexity already suggested sufficient for the time and strength of any man, and more than he would wish to undertake. But experience alone could teach him in how many ways indulged customers can and do manage to make the profit they pay so small, and the toil and vexation they occasion so great, that the jobber is often put upon weighing the question, Should I not be richer without them? Thus, for example, some of them will affect to doubt that the jobber wishes to sell to them, and propose, as a test, that he shall let them have some choice article at the cost, or at less than the cost, now on one pretext, and now on another,—intimating an indisposition to buy, if they cannot be indulged in that one thing. If they carry their point, that exceptional price is thenceforth claimed as the rule. Another day the concession will be asked on something else; and by extending this game so as to include a number of jobbers, these shrewd buyers will manage to lay in an assorted stock on which there will have been little or no profit to the sellers. To cap the climax of vexation, these persons will very probably come in, after not many days, and propose to cash their notes at double interest off. Only an official of the Inquisition could turn the thumb-screw so many times, and so remorselessly.

But we have yet to consider the collection of debts. The jobber who has not capital so ample as to buy only for cash is expected invariably to settle his purchases by giving his note, payable at bank on a fixed day. He pays it when due, or fails. Not so with his customers: multitudes of them shrink from giving a note payable at bank, and some altogether refuse to do so. They wish to buy on open account; or to give a note to be paid at maturity, if convenient,—otherwise not. The number of really prompt and punctual men, as compared with those who are otherwise, is very small. The number of those who never fail is smaller still. The collection-laws are completely alike, probably, in no two States. Some of them appear to have been constructed for the accommodation, not of honest creditors, but of dishonest debtors. In others, they are such as to put each jobber in fear of every other,—a first attachment taking all the property, if the debt be large enough, leaving little or nothing, usually, for those who have been willing to give the debtor such indulgence as might enable him to pay in full, were it granted by all his creditors.

No jobber can open his letters in the morning in the certainty of finding no tidings of a failure. No jobber, leaving his breakfast-table, can assure his wife and children, sick or well, that he will dine or sup with them; any one of a dozen railroad-trains may, for aught he knows, be sweeping him away to some remote point, to battle with the mischances of trade, the misfortunes of honest men, or the knavery of rogues and the meshes of the law. Once in the cars, he casts his eye around in uneasy expectation of finding some one or more of his neighbors bound on the same errand. While yet peering over the seats in front of him, he is unpleasantly startled by a slap on the shoulder, and, "Ah, John! bound East? What's in the wind? Any ducks in these days?" "Why,—yes,—no,—that is, I'm going down along,—little uncertain how far,—depends on circumstances." "So, so,—I see,—mum's the word." Well, neither is quite ready to trust the other,—neither quite ready to know the worst; so long as a blow is suspended, it may not fall; and so, with desperate exertions, they change the subject, converse on things indifferent,—or subside into more or less moody meditations upon their respective chances and prospects.