Increasingly after 1816 auction sales of imported goods were done for foreign account. British manufacturers and exporters consigned their goods directly to auctioneers or more commonly to agents sent to our ports. These "foreign agents of manufacturing and mercantile establishments of Europe" were "most of them-single men, and aliens,—in the habit of living at boarding houses, neither hiring houses, stores, or employing clerks."53

Thirty seven others paid a total amount of $37,000. Goodrich, Picture,

It is noteworthy that certain auctioneers specialized in non-dutiable goods, notably James Bleecker and J. M. Muller; such specialization would affect their relative importance when ranked on the basis of duties paid. Data from Williams Annual Register, 1836; 197.

Further similar statistical data for New York for the years 1840-8 are given in New York Assembly Document 218 (1849) Vol. 5, p. 4; for Philadelphia data see Niles, 25: 80; 67: 342; 69: 336, and for Baltimore see Niles, 67: 324.

N. Y. Assembly Journal, 1829: 391.

"On the arrival of their goods, their general practice" was "to hand over their invoices and endorsed bills of lading to their auctioneer, leaving it to him to enter their goods at the custom house and give bonds for the duties." The auctioneers were "in the habit of making advances on goods so placed under their control, to an amount equal to two-thirds of their value, and to pay the balance on sales as soon as they" were made out and thus enabled "the agent to make an immediate remittance to shippers." It was frequently charged that these agents interfered in American elections, contributing substantial "sums of money for electioneering purposes . . . as well as for printing of pamphlets, &c., about the tariff, and for the support of agents at Washington when it was under discussion."55

Besides the general advantages to the British principal of tending to stifle our manufactures and of finding a market for his goods, the agent auction system gave him the certainty of an immediate sale and immediate remittance. It gave him the benefit of the customs credits and thus increased his working capital; the auctioneer became his bondsman for the duties at the custom house, as the law required that the sureties should be American citizens.50 The expenses of selling were greatly reduced compared with those which were unavoidable to a regular mercantile establishment-house and store rent, stationery, fuel, insurance, clerk hire, family expenses, taxes, bad debts, expenses of collections, fall in value of the goods left on hand-expenses which were estimated to amount to 7% to 10%.57 His agents tended to become experts, "and by constantly attending public sales, and becoming perfectly acquainted with the market, kept their friends advised of every change; so soon as any article sold at a profit, it was instantly ordered, and transmitted with great rapidity."58 They were said "to be always on the alert to obtain copies of orders sent to England by the old and experienced American importers, and the articles directed by them to be furnished as suitable for our market" were "hastily prepared and

sent off, to anticipate such orders, and supply the market before the goods on account of such orders" reached this country.59

9960

Custom house practices, as well as the ease of concealment, made it impossible to determine what proportion of imported goods were handled on foreign account. It was, in 1817, "supposed that more than one-half of the goods subject to ad valorem duties, . . . imported into the United States" were "entered by . . the mere representatives of the owners of the goods." In 1819 an estimate, based upon "a careful examination of the weekly abstracts of merchandise entered at the custom house in New York" was that three-fourths of the importations were on foreign account. The New York Mercantile Society in a petition to Congress in 1820 stated that the proportion ranged between two-thirds and three-fourths, and of dry goods from England, Scotland and Ireland four-fifths.62 In 1824 it was claimed it could be "substantiated by a reference to official papers, that about three-fourths of all British and French goods imported. into New York" were on foreign account.63

61

COMMERCIAL EFFECTS OF THE AUCTIONS.

It has been shown above that the auction system tended to reduce the efficiency of the protective tariff; this fact gave auctions a political importance as well as economic and fiscal; the resulting legislative campaign against auctions is treated in later paragraphs. The auction system produced some important commercial effects. Auctions facilitated the introduction of new foreign and domestic products; goods were forced on the market by rank price-cutting and in time the prejudices that opposed their introduction and advancement were overcome; this was true both of foreign and domestic goods. The auctions were a solvent and revolutionary factor that broke down the too staid.

64

Niles, 18: 300.

Annals of Congress, 16th Congress, 2d session, 1653.

Niles, 27: 273. See similar and more detailed estimates in Niles, 27: 289 (1825), and Niles, 34: 106 (1828), and Bolles, I, 445 (1840), citing Ingersoll's Minority Report, April 4, 1844, No. 306, 28th Congress, Ist session.

"Annals of Congress, 16th Congress, 2d session, 1531.

traditional methods of commerce and consumption; the changes in dress, for instance, were toward "cheap but showy fabric" and were noticed by contemporaries.65 The auctions served particularly the humbler domestic manufacturers with a means of reaching the market, and some who were too small to maintain a sales organization did all their selling through auctions."

68

67

The strongest argument and apology for the auctioneers were that they tended to lower prices to the retailers and consumers through their economies in selling. Certainly the sale at auction of a lot of merchandise at a sacrifice tended to give a very public expression of the apparent values of that sort of merchandise and set a presumptive low value on all the existing stock, but such an assessment of value is a common objection to price-cutting in any sale however conducted. It was often alleged that auctioneers sold more goods daily than they advertised; that often the advertised lot was sold at a good price but other lots of the same goods were auctioned at successively lower prices; and that, this practice of the auctioneers being known, the price of the advertised lot was not bid up and there was therefore a general depression of prices.69

Undoubtedly there was much confusion as to values. Opponents of auctions claimed that the original diminution of prices to consumers soon ceased to exist and was compensated for by a reduction in quality.70 Others dwelt upon the fact that auctioneers provided much less service for their customers, as catering to individuality, delivery, better inspection, store open every day at all hours, book credit, etc.71

Other opponents denied outright that prices were any lower. It was argued that it was impossible that three-fourths of the imports into the United States could be sold for a series of years at a loss, and that since those sold at auction were subject to additional expense of about 5% above those sold at private sale, this added expense would be added to the cost of the

goods and be ultimately borne by the consumer.72 A most prominent auctioneer declared before an investigation committee of the New York Legislature in 1829 that goods sold higher at auction than at private sale. Auctions made it possible to test the market without real selling; the principal might instruct his agent to bid in the goods at a certain minimum price; to test the market the auctioneer would offer a small lot for trial and if these were sold above the limited price the sale would continue.74 The psychology of auction sales, with the excitement of a crowd of buyers bidding against each other, tends to raise prices.

The auction system affected the business of the importing merchants and the jobbers very materially. The passage of the auction law in New York in 1817, with its moderate duties on auction sales, gave New York City a comparative advantage over Boston and Philadelphia where "the free and absolute sale of goods at auction was not encouraged." East India goods which formerly all went to Boston were thereafter sent to New York. Of course, other factors were tending to give supremacy to New York, such as the establishment of the first regular packet line between New York and Liverpool in 1817 and the construction of the Erie Canal in 1825 and the natural advantages of New York.76

The interior merchants and retailers resorted increasingly to auction sales at New York; they came from Ohio, Indiana, Tennessee, Missouri, and other states, and the compelling motive. was said to be the cheaper prices78; the periodicity and dependability of the auction sales were a great convenience to the visiting

Niles, 35: 229; 34: 258; 27: 290.

Niles, 36: 186; 34: 258. See Niles, 34: 298, and "Remarks upon the Auction System," 48-52, for instances where auction prices exceeded

retailers' prices.

Niles, 34: 259.

75 Hunt's, 10: 167.

For a contemporary expert estimate of the relative merchandising advantages of New York, Boston and Philadelphia, see Girard, Merchants' Sketch Book, 1, 6: "In New York alone is located a class of foreign agents, whose whole business is to vend, through auctioneers and commission houses, the immense surplus production of their manufacturing districts."

77 Niles, 21: 103.

78

"An Examination of the 'Remarks on Auctions,'" 4, 9.