Chapter V: Front Matter (5)

Were the illegitimate competition in extension-making {107} done away, there would remain between companies just that normal competition which is advantageous to all. It is not true, as is alleged, that there cannot exist between railways a competition analogous to that which exists between traders. The evidence of Mr. Saunders, the secretary of the Great Western Company, proves the contrary. He shows that where the Great Western and the North Western railways communicate with the same towns, as at Birmingham and Oxford, each has tacitly adopted the fare which the other was charging; and that while there is thus no competition in fares, there is competition in speed and accommodation. The results are, that each takes that portion of the traffic which, in virtue of its position and local circumstances, naturally falls to its share; that each stimulates the other to give the greatest advantages it can afford; and that each keeps the other in order by threatening to take away its natural share of the traffic if, by ill-behaviour or inefficiency, it counterbalances the special advantages it offers. Now, this is just the form which competition eventually assumes between traders. After it has been ascertained by underselling what is the lowest remunerative price at which any commodity can be sold, the general results are, that that becomes the established price; that each trader is content to supply those only who, from proximity or other causes, naturally come to him; and that only when he treats his customers ill, need he fear that they will inconvenience themselves by going elsewhere for their goods.

* * * * *

Is there not, then, pressing need for an amendment of the laws affecting the proprietary contract—an amendment which shall transform it from an unlimited into a limited contract; or rather—not _transform_ it into such, but _recognize_ it as such? If there be truth in our argument, the absence of any limitation has been the chief cause of the manifold evils of our railway administration. The share-trafficking {108} of directors; the complicated intrigues of lawyers, engineers, contractors, and others; the betrayal of proprietaries—all the complicated corruptions which we have detailed, have primarily arisen from it, have been made possible by it. It has rendered travelling more costly and less safe than it would have been; and while apparently facilitating traffic, has indirectly hindered it. By fostering antagonism, it has led to the ill laying-out of supplementary lines; to the wasting of enormous sums in useless parliamentary contests; to the loss of an almost incredible amount of national capital in the making of railways for which there is no due requirement. Regarded in the mass, the investments of shareholders have been reduced by it to less than half the average productiveness which such investments should possess; and, as all authorities admit, railway property is, even now, kept below its real value, by the fear of future depreciations consequent on future extensions. Considering, then, the vastness of the interests at stake—considering that the total capital of our companies will soon reach £300,000,000—considering, on the one hand, the immense number of persons owning this capital (many of them with no incomes but what are derived from it), and, on the other hand, the great extent to which the community is concerned, both directly as to its commercial facilities, and indirectly as to the economy of its resources—considering all this, it becomes extremely important that railway property should be placed on a secure footing, and railway enterprise confined within normal bounds. The change is demanded alike for the welfare of shareholders and the public. No charge of over-legislation can be brought against it. It is simply an extension to joint-stock contracts, of the principle applied to all other contracts; it is merely a fulfilment of the State’s judicial function in cases hitherto neglected; it is nothing but a better administration of justice.

* * * * *

POSTSCRIPT.—That the proprietary contract should be {109} strictly adhered to, and no undertakings beyond those specified in the deed of incorporation entered upon, is a doctrine unpalatable to those in authority. A friend who, as chairman of one of our great railway-companies, has been familiar with railway-politics and parliamentary usages in connexion with them, contends that such a restrictive interpretation would be unworkable; and, further, that the legislature would never allow itself to be shackled in the implied way.

That he is right in the last of these assertions I think highly probable. In face of the currently accepted dogma that an Act of Parliament can do anything, it is foolish to expect that Parliament would, by ethical considerations, be restrained from breaking contracts and authorizing the breaking of contracts. When we see this dogma habitually acted upon to the extent of trampling under foot State-guarantees (as in the case of those who purchased land under the Irish Encumbered Estates Act, or as in the case of agreements originally entered into with companies to confer on them certain powers under certain conditions) it would be absurd to suppose that any tender regard for the claims of dissentient proprietors would deter the ruling body from cancelling the understanding under which shareholders consented to co-operate. Men must be much more conscientious than they are before any such check is likely to be effective.

To the other objection—that such a restriction would entail an unworkable complication—I entirely demur. That its consequences would be awkward under our present form of railway-administration may be true; but it is also true that had such a restriction been insisted on, another and better form of railway-administration would have arisen. This will probably be thought an unwarranted assertion. Nevertheless I make it with some confidence, since the form of administration to which I refer is one which was, in a different guise, contemplated when railways {110} were originally authorized. To those whose only conception of the mode of carrying on railway-traffic is that derived from their daily observations, this will be an incomprehensible statement; but those who remember how railways were originally intended to be used will know what I mean.

Novel schemes are always more or less shaped by old habits. At the time when the first railways were authorized, the experience men had of coach-travelling on high roads, affected in various ways the structures of the new appliances and the natures of the new arrangements. The railway gauge was determined by the width between the wheels of a stage-coach. Early first-class carriages were made to appear like the central parts of three stage-coaches joined together: preserving their convex panels and curved outlines, and frequently having, on the centre one, the words “_Tria juncta in uno_.” The inside of the first-class carriage was fitted up to resemble the inside of a stage-coach; and the original second-class carriage, having bare wooden seats over which, on vertical iron rods, was supported a roof allowing the wind and rain to blow through from side to side, was so designed as to be scarcely more comfortable than the outside of a coach. For some years the guard had a seat on the outside, at the end of a carriage, as on a coach; and for many years the luggage, covered with tarpaulin, was placed on the roofs of carriages, as on the outsides of coaches. Once more the booking-offices were at first like the booking-offices for stage-coaches—places where passengers entered their names to secure seats. Little as the fact is now recognized, this kinship of ideas extended to the contemplated arrangements for working. Men thought that traffic on railways might be carried on after the same manner as traffic on high roads. It was assumed that on lines of rails, where the passing of vehicles going in the same direction is impracticable, the system pursued might be like that in use on high roads, {111} where vehicles can pass and re-pass in any direction and join or leave the stream at will. Does the reader ask proof of this? The proof lies in the fact, well-known to those who were adult in the early days of railways, that in the office or waiting-room of every railway-station was fixed up a table of tolls, like that which was fixed up at every toll-gate; but in this case specifying the rate chargeable per mile for all things carried—passengers, horses, cattle, goods, &c. This table of tolls implied that it was within the power of others besides the company to run vehicles on the company’s line, and pay them at such and such rates for the privilege of doing so—a privilege which, so far as I know, was never made use of, for the sufficient reason that it would have been impossible to carry on business amid the confusion which would have resulted.

But while this arrangement, in the form implied, would have been impracticable, it foreshadows an arrangement which would have been practicable; and one which would have grown up had each railway company been limited to the undertaking specified in its deed of incorporation. After experience of inefficient co-operation, when so many independent bodies owning branches and extensions had to adjust their train services, &c., there would, in all probability, have been formed what we may call running-companies or traffic-companies, separate from the original railway-companies. Each one of these would have proposed to the companies owning the various main lines, extensions, and branches, within some large district conveniently delimited, to undertake the working of their various lines: either taking them severally on lease, or agreeing to give a specified share of the net returns annually received, or agreeing to pay certain tolls for passengers and goods. Under such an arrangement the original companies, standing in the position of landlords, would have had for their chief business to keep the embankments, cuttings, bridges, permanent way, stations, &c., in working {112} order; while the running-companies, standing in the position of tenants, but owning the rolling-stock, would have had for their business to conduct the passenger and goods traffic throughout the whole area, with power to arrange the workings of the various subdivisions of the system in a harmonious manner. Clearly, if there is an advantage in division of labour in other cases, there would have been an advantage in this case. The fixed works constituting each of these inter-connected railways would have been kept in more perfect repair, had preservation of them been the exclusive business of the companies owning them; while the running-companies, with nothing to attend to beyond the keeping in order of their rolling-stock and the management of train-services &c. would have done this more satisfactorily.

A further reason for believing that better results would have been achieved than are now achieved, is that under such circumstances there would have been no absorption of directors’ time in carrying on railway-wars and getting new acts of parliament—a business which, under the existing system, has chiefly occupied the attention of boards.

The enforcement of equitable arrangements is often fraught with unanticipated benefits; and there seems reason to think that unanticipated benefits would have resulted in this case also.

{113}

THE MORALS OF TRADE.

[_First published in_ The Westminster Review _for April 1859_.]

We are not about to repeat, under the above title, the often-told tale of adulterations: albeit, were it our object to deal with this familiar topic, there are not wanting fresh materials. It is rather the less-observed and less-known dishonesties of trade, to which we would here draw attention. The same lack of conscientiousness which shows itself in the mixing of starch with cocoa, in the dilution of butter with lard, in the colouring of confectionery with chromate of lead and arsenite of copper, must of course come out in more concealed forms; and these are nearly, if not quite, as numerous and as mischievous.

It is not true, as many suppose, that only the lower classes of the commercial world are guilty of fraudulent dealing. Those above them are to a great extent blameworthy. On the average, men who deal in bales and tons differ but little in morality from men who deal in yards and pounds. Illicit practices of every form and shade, from venial deception up to all but direct theft, may be brought home to the higher grades of our commercial world. Tricks innumerable, lies acted or uttered, elaborately-devised frauds, are prevalent: {114} many of them established as “customs of the trade;” nay, not only established, but defended.

Passing over, then, the much-reprobated shopkeepers, of whose delinquencies most people know something, let us turn our attention to the delinquencies of the classes above them in the mercantile scale.

* * * * *

The business of wholesale houses—in the clothing-trades at least—is chiefly managed by a class of men called “buyers.” Each wholesale establishment is usually divided into several departments; and at the head of each department is placed one of these functionaries. A buyer is a partially-independent sub-trader. At the beginning of the year he is debited with a certain share of the capital of his employers. With this capital he trades. From the makers he orders for his department such goods as he thinks will find a market; and for the goods thus bought he obtains as large a sale as he can among the retailers of his connexion. The accounts show at the end of the year what profit has been made on the capital over which he has command; and, according to the result, his engagement is continued—perhaps at an increased salary—or he is discharged.

Under such circumstances, bribery would hardly be expected. Yet we learn, on unquestionable authority, that buyers habitually bribe and are bribed. Giving presents, as a means of obtaining custom, is an established practice between them and all with whom they have dealings. Their connexions among retailers they extend by treating and favours; and they are themselves influenced in their purchases by like means. It might be presumed that self-interest would in both cases negative this. But apparently, no very obvious sacrifice results from yielding to such influences. When, as usually happens, there are many manufacturers producing articles of like goodness at the same prices, or many buyers between whose commodities and whose terms there is little room for choice, there exists no {115} motive to purchase of one rather than another; and then the temptation to take some immediate bonus turns the scale. Whatever be the cause, however, the fact is testified to us alike in London and the provinces. By manufacturers, buyers are sumptuously entertained for days together, and are plied throughout the year with hampers of game, turkeys, dozens of wine, etc.: nay, they receive actual money-bribes; sometimes, as we hear from a manufacturer, in the shape of bank-notes, but more commonly in the shape of discounts on the amounts of their purchases. The extreme prevalence—universality we might say—of this system, is proved by the evidence of one who, disgusted as he is, finds himself inextricably entangled in it. He confessed to us that all his transactions were thus tainted. “Each of the buyers with whom I deal,” he said, “expects an occasional bonus in one form or other. Some require the bribe to be wrapped up; and some take it without disguise. To an offer of money, this one replies—‘Oh, I don’t like that sort of thing,’ but nevertheless, does not object to money’s-worth; while my friend So-and-so, who promises to bring me a large trade this season, will, I very well know, look for one per cent. discount in cash. The thing is not to be avoided. I could name sundry buyers who look askance at me, and never will inspect my goods; and I have no doubt about the cause—I have not bought their patronage.” And then our informant appealed to another of the trade, who agreed in the assertion that in London their business could not be done on any other terms. So greedy do some of these buyers become, that their perquisites absorb a great part of the profits, and make it a question whether it is worth while to continue the dealing with them. Next, as above hinted, there comes a like history of transactions between buyers and retailers—the bribed being now the bribers. One of those above referred to as habitually expecting douceurs, said to the giver of them, whose testimony we have just repeated—“I’ve spent pounds and pounds over ――― {116} (naming a large tailor), and now I think I have gained him over.” To which confession this buyer added the complaint, that his house did not make him any allowance for sums thus disbursed.

Under the buyer, who has absolute control of his own department in a wholesale house, come sundry assistants, who transact the business with retail traders; much as retail trader’s assistants transact the business with the general public. These higher-class assistants, working under the same pressure as the lower, are similarly unscrupulous. Liable to prompt dismissal as they are for failure in selling; gaining higher positions as they do in proportion to the quantities of goods they dispose of at profitable rates; and finding that no objections are made to any dishonest artifices they use, but rather that they are applauded for them; these young men display a scarcely credible demoralization. As we learn from those who have been of them, their duplicity is unceasing—they speak almost continuous falsehood; and their tricks range from the simplest to the most Machiavellian. Take a few samples. When dealing with a retailer, it is an habitual practice to bear in mind the character of his business; and to delude him respecting articles of which he has least experience. If his shop is in a neighbourhood where the sales are chiefly of inferior goods (a fact ascertained from the traveller), it is inferred that, having a comparatively small demand for superior goods, he is a bad judge of them; and advantage is taken of his ignorance. Again, it is usual purposely to present samples of cloths, silks, etc., in such order as to disqualify the perceptions. As, when tasting different foods or wines, the palate is disabled by something strongly flavoured, from appreciating the more delicate flavour of another thing afterwards taken; so with the other organs of sense, a temporary disability follows an excessive stimulation. This holds not only with the eyes in judging of colours, but also, as we are told by one who has been in the trade, it holds with the fingers in judging of textures; and cunning {117} salesmen are in the habit of thus partially paralysing the customers’ perceptions, and then selling second-rate articles as first-rate ones. Another common manœuvre is that of raising a false belief of cheapness. Suppose a tailor is laying in a stock of broad cloths. He is offered a bargain. Three pieces are put before him—two of good quality, at, perhaps, 14_s._ per yard; and one of much inferior quality, at 8_s._ per yard. These pieces have been purposely a little tumbled and creased, to give an apparent reason for a pretended sacrifice upon them. And the tailor is then told that he may have these nominally-damaged cloths as “a job lot,” at 12_s._ per yard. Misled by the appearances into a belief of the professed sacrifice; impressed, moreover, by the fact that two of the pieces are really worth considerably more than the price asked; and not sufficiently bearing in mind that the great inferiority of the third just balances this; the tailor probably buys; and he goes away with the comfortable conviction that he has made a specially-advantageous purchase, when he has really paid the full price for every yard. A still more subtle trick has been described to us by one who himself made use of it, when engaged in one of these wholesale-houses—a trick so successful that he was often sent for to sell to customers who could be induced to buy by none other of the assistants, and who ever afterwards would buy only of him. His policy was to seem extremely simple and honest, and, during the first few purchases, to exhibit his honesty by pointing out defects in the things he was selling; and then, having gained the customer’s confidence, he proceeded to pass off upon him inferior goods at superior prices. These are a few out of the various manœuvres in constant practice. Of course there is a running accompaniment of falsehoods, uttered as well as acted. It is expected of the assistant that he will say whatever is needed to effect a sale. “Any fool can sell what is wanted,” said a master in reproaching a shopman for not having persuaded a customer to buy something quite unlike that which he asked {118} for. And the unscrupulous mendacity thus required by employers, and encouraged by example, grows to a height of depravity that has been described to us in words too strong to be repeated. Our informant was obliged to relinquish his position in one of these establishments, because he could not lower himself to the required depth of degradation. “You don’t lie as though you believe what you say,” observed one of his fellow-assistants. And this was uttered as a reproach!

As those subordinates who have fewest qualms of conscience are those who succeed the best, are soonest promoted to more remunerative posts, and have therefore the greatest chances of establishing businesses of their own; it may be inferred that the morality of the heads of these establishments, is much on a par with that of their _employés_. The habitual malpractices of wholesale houses, confirm this inference. Not only, as we have just seen, are assistants under a pressure impelling them to deceive purchasers respecting the qualities of the goods they buy, but purchasers are also deceived in respect to the quantities; and that, not by an occasional unauthorized trick, but by an organized system, for which the firm itself is responsible. The general practice is to make up goods, or to have them made up, in lengths that are shorter than they profess to be. A piece of calico nominally thirty-six yards long, never measures more than thirty-one yards—is understood throughout the trade to measure only so much. And the long-accumulating delinquencies which this custom indicates—the successive diminutions of length, each introduced by some adept in dishonesty, and then imitated by his competitors—are now being daily carried to a still greater extent, wherever they are not likely to be immediately detected. Articles that are sold in small bundles, knots, packets, or such forms as negative measurement at the time of sale, are habitually deficient in quantity. Silk-laces called six quarters, or fifty-four {119} inches, really measure four quarters, or thirty-six inches. Tapes were originally sold in grosses containing twelve knots of twelve yards each; but these twelve-yard-knots are now cut of all lengths, from eight yards down to five yards, and even less—the usual length being six yards. That is to say, the 144 yards which the gross once contained, has now in some cases dwindled down to 60 yards. In widths, as well as in lengths, this deception is practised. French cotton-braid, for instance (French only in name), is made of different widths; which are respectively marked 5, 7, 9, 11, etc.: each figure indicating the number of threads of cotton which the width includes, or rather should include, but does not. For those which should be marked 5 are marked 7; and those which should be marked 7 are marked 9: out of three samples from different houses shown to us by our informant, only one contained the alleged number of threads. Fringe, again, which is sold wrapped on card, will often be found two inches wide at the end exposed to view, but will diminish to one inch at the end next the card; or perhaps the first twenty yards will be good, and all the rest, hidden under it, will be bad. These frauds are committed unblushingly, and as a matter of business. We have ourselves read in an agent’s order-book, the details of an order, specifying the actual lengths of which the articles were to be cut, and the much greater lengths to be marked on the labels. And we have been told by a manufacturer who was required to make up tapes into lengths of fifteen yards, and label them “warranted 18 yards,” that when he did not label them falsely, his goods were sent back to him; and that the greatest concession he could obtain was to be allowed to send them without labels.

It is not to be supposed that in their dealings with manufacturers, these wholesale-houses adopt a code of morals differing much from that which regulates their dealings with retailers. The facts prove it to be much the {120} same. A buyer for instance (who exclusively conducts the purchases of a wholesale-house from manufacturers) will not unfrequently take from a first-class maker, a small supply of some new fabric, on the pattern of which much time and money have been spent; and this new-pattern fabric he will put into the hands of another maker, to have copied in large quantities. Some buyers, again, give their orders orally, that they may have the opportunity of afterwards repudiating them if they wish; and in a case narrated to us, where a manufacturer who had been thus deluded, wished on a subsequent occasion to guarantee himself by obtaining the buyer’s signature to his order, he was refused it. For other unjust acts of wholesale-houses, the heads of these establishments are, we presume, responsible. Small manufacturers working with insufficient capital, and in times of depression not having the wherewith to meet their engagements, are often obliged to become dependants on the wholesale-houses with which they deal; and are then cruelly taken advantage of. One who has thus committed himself, has either to sell his accumulated stock at a great sacrifice—thirty to forty per cent. below its value—or else to mortgage it; and when the wholesale-house becomes the mortgagee, the manufacturer has little chance of escape. He is obliged to work at the wholesale-dealer’s terms; and ruin almost certainly follows. This is especially the case in the silk-hosiery business. As was said to us by one of the larger silk-hosiers, who had watched the destruction of many of his smaller brethren—“They may be spared for a time as a cat spares a mouse; but they are sure to be eaten up in the end.” And we can the more readily credit this statement from having found that a like policy is pursued by some provincial curriers in their dealings with small shoe-makers; and also by hop-merchants and maltsters in their dealings with small publicans. We read that in Hindostan the ryots, when crops fall short, borrow from the Jews to buy seed; and {121} once in their clutches are doomed. It seems that our commercial world can furnish parallels.

Of another class of wholesale-traders—those who supply grocers with foreign and colonial produce—we may say that though, in consequence of the nature of their business, their malpractices are less numerous and multiform, as well as less glaring, they bear the same stamp as the foregoing. Unless it is to be supposed that sugar and spices are moral antiseptics as well as physical ones, it must be expected that wholesale dealers in them will transgress much as other wholesale dealers do, in those directions where the facilities are greatest. And the truth is that, both in the qualities and quantities of the articles they sell, they take advantage of the retailers. The descriptions they give of their commodities are habitually misrepresentations. Samples sent round to their customers are characterized as first-rate when they are really second-rate. The travellers are expected to endorse these untrue statements; and unless the grocer has adequate keenness and extensive knowledge, he is more or less deceived. In some cases, indeed, no skill will save him. There are frauds that have grown up little by little into customs of the trade, which the retailer must submit to. In the purchase of sugar, for example, he is imposed on in respect alike of the goodness and the weight. The history of the dishonesty is this. Originally the tare allowed by the merchant on each hogshead, was 14 per cent. of the gross weight. The actual weight of the wood of which the hogshead was made, was at that time about 12 per cent. of the gross weight. And thus the trade-allowance left a profit of 2 per cent. to the buyer. Gradually, however, the hogshead has grown thicker and heavier; until now, instead of amounting to 12 per cent. of the gross weight, it amounts to 17 per cent. As the allowance of 14 per cent. still continues, the result is that the retail grocer loses 3 per cent.: to the extent of 3 per cent. he buys wood {122} in place of sugar. In the quality of the sugar, he is deluded by the practice of giving him a sample from the best part of the hogshead. During its voyage from Jamaica or elsewhere, the contents of a hogshead undergo a slow drainage. The molasses, of which more or less is always present, filters from the uppermost part of the mass of sugar to the lowermost part; and this lowermost part, technically known as the “foots,” is of darker colour and smaller value. The quantity of it contained in a hogshead varies greatly; and the retailer, receiving a false sample, has to guess what the quantity of “foots” may be; and, to his cost, often under-estimates it. As will be seen from the following letter, copied from the _Public Ledger_ for the 20th Oct., 1858, these grievances, more severe even than we have represented them, are now exciting an agitation.

“_To the Retail Grocers of the United Kingdom._

“Gentlemen,—The time has arrived for the trade at once to make a move for the revision of tares on all raw sugars. Facts prove the evil of the present system to be greatly on the increase. We submit a case as under, and only one out of twenty. On the 30th August, 1858, we bought 3 hogsheads of Barbados, mark TG K

Invoice Tares. Re Tares.
No. cwt. qrs. lb. lb. No. cwt. qrs. lb.
1 1 2 14 6 drft. 1 1 3 27
7 1 2 7 7 1 3 20
3 1 2 21 3 1 3 27
───────────── ─────────────
4 3 20 5 3 18
Deduct 4 3 20
───────────── _s._ £ _s._ _d._
0 3 26 at 42 — 2 1 3

“We make a claim for £2. 1_s._ 3_d._; we are told by the wholesale grocer there is no redress.

“There is another evil which the retail grocer has to contend with, that is, the mode of sampling raw sugars: the foots are excluded from the merchants’ samples. Facts will prove that in thousands of hogsheads of Barbados this season there is an average of 5 cwt. of foots in each; we have turned out some with 10 cwt., which are at least 5_s._ per cwt. less value than sample, and in these cases we are told again there is no redress.

“These two causes are bringing hundreds of hard-working men to ruin {123} and will bring hundreds more unless the trade take it up, and we implore them to unite in obtaining so important a revision.

“We are, Gentlemen, your obedient servants,

“WALKER and STAINES.[6]

“Birmingham, October 19, 1858.”

[6] The abuses described in this letter have now, we believe, been
abolished.

A more subtle method of imposition remains to be added. It is the practice of sugar-refiners to put moist, crushed sugar into dried casks. During the time that elapses before one of these casks is opened by the retailer, the desiccated wood has taken up the excess of water from the sugar; which is thus brought again into good condition. When the retailer, finding that the cask weighs much more than was allowed as tare by the wholesale dealer, complains to him of this excess, the reply is—“Send it up to us, and we will _dry it_ and weigh it, as is the custom of the trade.”

Without further detailing these malpractices, of which the above examples are perhaps the worst, we will advert only to one other point in the transactions of these large houses—the drawing-up of trade-circulars. It is the habit of many wholesale dealers to send round to their customers, periodic accounts of the past transactions, present condition, and prospects of the markets. Serving as checks on each other, as they do, these documents are prevented from swerving very widely from the truth. But it is scarcely to be expected that they should be quite honest. Those who issue them, being in most cases interested in the prices of the commodities referred to in their circulars, are swayed by their interests in the representations they make respecting the probabilities of the future. Far-seeing retailers are on their guard against this. A large provincial grocer, who thoroughly understands his business, said to us—“As a rule, I throw trade-circulars on the fire.” And that this estimate of their trustworthiness is not unwarranted, we gather from the expressions of those engaged in other businesses. From two leather-dealers, one in the country and one in London, we have heard the same complaint {124} against the circulars published by houses in their trade, that they are misleading. Not that they state untruths; but that they produce false impressions by leaving out facts which they should have stated.

* * * * *

In illustrating the morality of manufacturers, we shall confine ourselves to one class—those who work in silk. And it will be the most convenient method of arranging facts, to follow the silk through its various stages; from its state when imported, to its state when ready for the wearer.

Bundles of raw silk from abroad—not uncommonly weighted with rubbish, stones, or rouleaux of Chinese copper coin, to the loss of the buyer—are disposed of by auction. Purchases are made on behalf of the silk-dealers by “sworn brokers;” and the regulation is, that these sworn brokers shall confine themselves to their functions as agents. From a silk-manufacturer, however, we learn that they are currently understood to be themselves speculators in silk, either directly or by proxy; and that as thus personally interested in prices, they become faulty as agents. We give this, however, simply as a prevailing opinion, for the truth of which we do not vouch.

The silk bought by the London dealer, he sends into the manufacturing districts to be “thrown;” that is, to be made into thread fit for weaving. In the established form of bargain between the silk-dealer and the silk-throwster, we have a strange instance of an organized and recognized deception; which has seemingly grown out of a check on a previous deception. The throwing of silk is necessarily accompanied by some waste, from broken ends, knots, and fibres too weak to wind. This waste varies in different kinds of silk from 3 per cent. to 20 per cent.: the average being about 5 per cent. The per-centage of waste being thus variable, it is obvious that in the absence of restraint, a dishonest silk-throwster might abstract a portion of the silk; and, on returning the rest to the dealer, might plead {125} that the great diminution in weight had resulted from the large amount of loss in the process of throwing. Hence there has arisen a system, called “working on cost,” which requires the throwster to send back to the dealer the same weight of silk which he receives: the meaning of the phrase being, we presume, that whatever waste the throwster makes must be at his own cost. Now, as it is impossible to throw silk without _some_ waste—at least 3 per cent., and ordinarily 5 per cent.—this arrangement necessitates a deception; if, indeed, that can be called a deception which is tacitly understood by all concerned. The silk has to be weighted. As much as is lost in throwing, has to be made up by some foreign substance introduced. Soap is largely used for this. In small quantity, soap is requisite to facilitate the running of the threads in the process of manufacture; and the quantity is readily increased. Sugar also is used. And by one means or other, the threads are made to absorb enough matter to produce the desired weight. To this system all silk-throwsters are obliged to succumb; and some of them carry it to a great extent, as a means of hiding either carelessness or something worse.

The next stage through which silk passes, is that of dyeing. Here, too, impositions have grown chronic and general. In times past, as we learn from a ribbon-manufacturer, the weighting by water was the chief dishonesty. Bundles returned from the dyer’s, if not manifestly damp, still, containing moisture enough to make up for a portion of the silk that had been kept back; and precautions had to be taken to escape losses thus entailed. Since then, however, there has arisen a method of deception which leaves this far behind—that of employing heavy dyes. The following details have been given us by a silk-throwster. It is now, he says, some five-and-thirty years since this method was commenced. Before that time silk lost a considerable part of its weight in the copper. The ultimate fibre of silk is coated, in issuing from the spinneret of the silk-worm, with {126} a film of varnish which is soluble in boiling water. In dyeing, therefore, this film, amounting to 25 per cent. of the entire weight of the silk, is dissolved off; and the silk is rendered that much lighter. So that originally, for every sixteen ounces of silk sent to the dyer’s, only twelve ounces were returned. Gradually, however, by the use of heavy dyes, this result has been reversed. The silk now gains in weight; and sometimes to a scarcely credible extent. According to the requirement, silk is sent back from the dyer’s of any weight, from twelve ounces to the pound up to forty ounces to the pound. The original pound of silk, instead of losing four ounces, as it naturally would, is actually, when certain black dyes are used, made to gain as much as twenty-four ounces! Instead of 25 per cent. lighter, it is returned 150 per cent. heavier—is weighted with 175 per cent. of foreign matter! Now as, during this stage of its manufacture, the transactions in silk are carried on by weight, it is manifest that in the introduction and development of this system, we have a long history of frauds. At present all in the trade are aware of it, and on their guard against it. Like other modes of adulteration, in becoming established and universal, it has ceased to be profitable to any one. But it still serves to indicate the morals of those concerned.

The thrown and dyed silk passes into the hands of the weaver; and here again we come upon dishonesties. Manufacturers of figured silks sin against their fellows by stealing their patterns. The laws which have been found necessary to prevent this species of piracy, show that it has been carried to a great extent. Even now it is not prevented. One who has himself suffered from it, tells us that manufacturers still get one another’s designs by bribing the workmen. In their dealings with “buyers,” too, some manufacturers resort to deceptions: perhaps tempted to do so by the desire to compensate themselves for the heavy tax paid in treating, etc. Goods which have already been seen {127} and declined by other buyers, are brought before a subsequent one with artfully-devised appearances of secrecy, accompanied by professions that these goods have been specially reserved for his inspection: a manœuvre by which an unwary man is sometimes betrayed. That the process of production has its delusions, scarcely needs saying. In the ribbon-trade, for example, there is a practice called “top-ending;” that is, making the first three yards good, and the rest (which is covered when rolled up) of bad or loose texture—80 “shutes” to the inch instead of 108. And then there comes the issuing of imitations made of inferior materials—textile adulterations as we may call them. This practice of debasement, not an occasional but an established one, is carried to a surprising extent, and with surprising rapidity. Some new fabric, first sold at 7_s._ 6_d._ per yard, is supplanted by successive counterfeits; until at the end of eighteen months a semblance of it is selling at 4_s._ 3_d._ per yard. Nay, still greater depreciations of quality and price take place—from 10_s._ down to 3_s._, and even 2_s._ per yard. Until at length the badness of these spurious fabrics becomes so conspicuous, that they are unsaleable; and there ensues a reaction, ending either in the reintroduction of the original fabric, or in the production of some novelty to supply its place.

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Among our notes of malpractices in trade, retail, wholesale, and manufacturing, we have many others that must be passed over. We cannot here enlarge on the not uncommon trick of using false trade-marks; or of imitating another maker’s wrappers. We must be satisfied with simply referring to the doings of apparently-reputable houses, which purchase goods known to be dishonestly obtained. And we are obliged to refrain from particularizing certain established arrangements, existing under cover of the highest respectability, which seem intended to facilitate these nefarious transactions. The frauds we have detailed {128} are but samples of a state of things which it would take a volume to describe in full.

The further instances of trading-immorality which it seems desirable here to give, are those which carry with them a certain excuse: showing as they do how insensibly, and almost irresistibly, men are thrust into vicious practices. Always, no doubt, some utterly unconscientious trader is the first to introduce a new form of fraud. He is by-and-by followed by others who wear their moral codes but loosely. The more upright traders are continually tempted to adopt this questionable device which those around them are adopting. The greater the number who yield, and the more familiar the device becomes, the more difficult is it for the remainder to stand out against it. The pressure of competition upon them becomes more and more severe. They have to fight an unequal battle: debarred as they are from one of the sources of profit which their antagonists possess. And they are finally almost compelled to follow the lead of the rest. Take for example what has happened in the candle-trade. As all know, the commoner kinds of candles are sold in bunches, supposed to weigh a pound each. Originally, the nominal weight corresponded with the real weight. But at present the weight is habitually short by an amount varying from half an ounce to two ounces—is sometimes depreciated 12 1/2 per cent. If, now, an honest chandler offers to supply a retailer at, say, six shillings for the dozen pounds, the answer he receives is—“Oh, we get them for five-and-eightpence.” “But mine,” replies the chandler, “are of full weight; while those you buy at five-and-eightpence are not.” “What does that matter to me?” the retailer rejoins—“a pound of candles is a pound of candles: my customers buy them in the bunch, and won’t know the difference between yours and another’s.” And the honest chandler, being everywhere met with this argument, finds that he must either make his bunches of short weight, or give up business. Take another case, which, {129} like the last, we have direct from the mouth of one who has been obliged to succumb. It is that of a manufacturer of elastic webbing, now extensively used in making boots, etc. From a London house with which he dealt largely, this manufacturer recently received a sample of webbing produced by some one else, accompanied by the question, “Can you make us this at ——— per yard?” (naming a price below that at which he had before supplied them); and hinting that if he could not do so they must go elsewhere. On pulling to pieces the sample (which he showed to us), this manufacturer found that sundry of the threads which should have been of silk were of cotton. Indicating this fact to those who sent him the sample, he replied that, if he made a like substitution, he could furnish the fabric at the price named; and the result was that he eventually did thus furnish it. He saw that if he did not do so, he must lose a considerable share of his trade. He saw further, that if he did not at once yield, he would have to yield in the end; for that other elastic-webbing-makers would one after another engage to produce this adulterated fabric at correspondingly diminished prices; and that when at length he stood alone in selling an apparently-similar article at a higher price, his business would leave him. This manufacturer we have the best reasons for knowing to be a man of fine moral nature, both generous and upright; and yet we here see him obliged, in a sense, to implicate himself in one of these processes of vitiation. It is a startling assertion, but it is none the less a true one, that those who resist these corruptions often do it at the risk of bankruptcy; sometimes the certainty of bankruptcy. We do not say this simply as a manifest inference from the conditions, as above described. We say it on the warrant of instances which have been given to us. From one brought up in his house, we have had the history of a draper who, carrying his conscience into his shop, refused to commit the current frauds of the trade. He would not represent his {130} goods as of better quality than they really were; he would not say that patterns were just out, when they had been issued the previous season; he would not warrant to wash well, colours which he knew to be fugitive. Refraining from these and the like malpractices of his competitors; and, as a consequence, daily failing to sell various articles which his competitors would have sold by force of lying; his business was so unremunerative that he twice became bankrupt. And in the opinion of our informant, he inflicted more evil upon others by his bankruptcies, than he would have done by committing the usual trade-dishonesties. See, then, how complicated the question becomes; and how difficult to estimate the trader’s criminality. Often—generally indeed—he has to choose between two wrongs. He has tried to carry on his business with strict integrity. He has sold none but genuine articles, and has given full measure. Others in the same business adulterate or otherwise delude, and are so able to undersell him. His customers, not adequately appreciating the superiority in the quality or quantity of his goods, and attracted by the apparent cheapness at other shops, desert him. Inspection of his books proves the alarming fact that his diminishing returns will soon be insufficient to meet his engagements, and provide for his increasing family. What then must he do? Must he continue his present course; stop payment; inflict heavy losses on his creditors; and, with his wife and children, turn out into the streets? Or must he follow the example of his competitors; use their artifices; and give his customers the same apparent advantages? The last not only seems the least detrimental to himself, but also may be considered the least detrimental to others. Moreover, the like is done by men regarded as respectable. Why should he ruin himself and family in trying to be better than his neighbours? He will do as they do.

Such is the position of the trader; such is the reasoning by which he justifies himself; and it is hard to visit him {131} with harsh condemnation. Of course this statement of the case is by no means universally true. There are businesses in which, competition being less active, the excuse for falling into corrupt practices does not hold; and here, indeed, we find corrupt practices much less prevalent. Many traders, too, have obtained connexions which secure to them adequate returns without descending to small rogueries; and they have no defence if they thus degrade themselves. Moreover, there are the men—commonly not prompted by necessity but by greed—who introduce these adulterations and petty frauds; and on these should descend unmitigated indignation: both as being themselves criminals without excuse, and as causing criminality in others. Leaving out, however, these comparatively small classes, most traders by whom the commoner businesses are carried on, must receive a much more qualified censure than they at first sight seem to deserve. On all sides we have met with the same conviction, that for those engaged in the ordinary trades there are but two courses—either to adopt the practices of their competitors, or to give up business. Men in different occupations and in different places—men naturally conscientious, who manifestly chafed under the degradations they submitted to, have one and all expressed to us the sad belief that it is impossible to carry on trade with strict rectitude. Their concurrent opinion, independently given by each, is that the scrupulously honest man must go to the wall.

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But that it has been, during the past year, frequently treated by the daily press, we might here enter at some length on the topic of banking-delinquencies. As it is, we may presume all to be familiar with the facts, and shall limit ourselves to making a few comments.

In the opinion of one whose means of judging have been second to those of few, the directors of joint-stock-banks have rarely been guilty of direct dishonesty. Admitting {132} notorious exceptions, the general fact appears to be that directors have had no immediate interests in furthering these speculations which have proved so ruinous to depositors and shareholders; but have usually been among the greatest sufferers. Their fault has rather been the less flagitious, though still grave fault, of indifference to their responsibilities. Often with very inadequate knowledge they have undertaken to trade with property belonging in great part to needy people. Instead of using as much care in the investment of this property as though it were their own, many of them have shown culpable recklessness: either themselves loaning the entrusted capital without adequate guarantee, or else passively allowing their colleagues to do this. Sundry excuses may doubtless be made for them. The well-known defects of a corporate conscience, caused by divided responsibility, must be remembered in mitigation. And it may also be pleaded for such delinquents that if shareholders, swayed by reverence for mere wealth and position, choose as directors, not the most intelligent, the most experienced, and those of longest-tried probity, but those of largest capital or highest rank, the blame must not be cast solely on the men so chosen, but must be shared by the men who choose them. Nay, further, it must fall on the public as well as on shareholders; seeing that this unwise selection of directors is in part determined by the known bias of depositors. But after all allowances have been made, it must be admitted that these bank-administrators who risk the property of their clients by lending it to speculators, are near akin in morality to the speculators themselves. As these speculators risk other men’s money in undertakings which they hope will be profitable; so do the directors who lend them the money. If these last plead that the money thus lent is lent with the belief that it will be repaid with good interest, the first may similarly plead that they expect their investment to return the borrowed capital along with a {133} handsome profit. In each case the transaction is one of which the evil consequences, if they come, fall more largely on others than on the actors. And though it may be contended, on behalf of the director, that what he does is done chiefly for the benefit of his constituents, whereas the speculator has in view only his own benefit; it may be replied that the director’s blameworthiness is not the less because he took a rash step with a comparatively weak motive. The truth is that when a bank-director lends the capital of shareholders to those to whom he would not lend his own capital, he is guilty of a breach of trust. In tracing the gradations of crime, we pass from direct robbery to robbery one, two, three, or more degrees removed. Though a man who speculates with other people’s money is not chargeable with direct robbery, he is chargeable with robbery one degree removed: he deliberately stakes his neighbour’s property, intending to appropriate the gain, if any, and to let his neighbour suffer the loss, if any: his crime is that of contingent robbery. And hence any one who, standing like a bank-director in the position of trustee, puts the money with which he is entrusted into a speculator’s hands, must be called an accessory to contingent robbery.