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American Wholesale Hardware Trade Associations, 1870–1900

Published online by Cambridge University Press:  11 June 2012

William H. Becker
William H. Becker
Affiliation:
Assistant Professor of History, University of Maryland, Baltimore County
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Abstract

Hardware wholesalers organized trade associations in the late nineteenth century in an effort to achieve stability and uniformity in prices and profit margins. These organizations, like those of manufacturers in the same industry, met with some success.

Type
Research Article
Information
Business History Review , Volume 45 , Issue 2 , Summer 1971 , pp. 179 - 200
Copyright
Copyright © The President and Fellows of Harvard College 1971

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References

1 “Jobber” early in the century generally referred to a merchant who “broke down” the large lots of imported goods for sale to retailers. See Jones, Fred Mitchell, “Middlemen in the Domestic Trade of the United States,” Illinois Historical Studies, Vol. XXI, No. 3, 13–16Google Scholar. Even though by the 1870's imports were not so important a source of goods, the trade continued to use the term “jobber.” By then the word was used interchangeably with the phrase “full-line, full-service wholesaler.” The latter merchant of course was also simply called a wholesaler. He was the middleman who took title to goods, carried a large assortment or a “full line,” and provided such services as credit and traveling salesmen.

2 American Artisan, Tinner and House Furnisher, July 25, 1885, 26 (hereinafter cited as American Artisan).

3 U.S. Senate, 53 Cong., 2 Sess., Report No. 259, Part 1. Imports and Exports (Washington, 1894), 453Google Scholar.

4 Lathrop, William G., The Brass Industry in the United States (Mount Carmel, Conn., 1926), 106–109Google Scholar.

5 Hardware Dealer, A Magazine of Ideas and Information for Hardwaremen, October 1896, 551 (hereinafter cited as Hardware Dealer). A debate raged here and in England over why domestic manufacturers came to dominate the American market. The answer proposed on this side of the Atlantic, and reluctantly agreed to on the other, was that American goods were of better quality and lower in price. At about the same time, American hardware manufacturers not only supplied more of the domestic market, they also increased their exports. Valued at approximately $1,300,000 in 1886, by 1895 they had almost doubled. See American Artisan, November 1, 1884, 17; Hardware, Review of the American Hardware Market, May 10, 1891, 19 (hereinafter cited as Hardware); Hardware Reporter, February 25, 1879, 8, December 10, 1878, 3, July 10, 1879, 2; Hardware Dealer, July, 1895, 66; and Hardware, January 10, 1892, 21.

6 Hardware, April 25, 1892, 34, June 10, 1892, 32; Hardware Reporter, June 17, 1879, 2, July 1, 1879, 11; Hardware Dealer, June, 1895, 618, November, 1895, 562, and October, 1897, 457.

7 Chriskey and Caldwell, wholesale distributors of cutlery, hardware and tools, 1849–1859, letter books and bills (Baker Library, Graduate School of Business Administration, Harvard University, Boston, Mass.). Norvell, Saunders, Forty Years of Hardware (New York, 1924Google Scholar), passim.

8 U.S. Bureau of the Census, Tenth Census of the United States: 1880. Statistics of Manufacture, II, “The Manufacture of Hardware,” 711–12, 717–18.

9 Iron Age, January 2, 1873, 11, 18. Lathrop, Brass Industry, 122–131.

10 See Table 1 for associations formed in the 1880's and 1890's. American Artisan, August 1, 1885, 22; Hardware, October 10, 1891, 28–29, October 25, 1891, 18, 34, February 25, 1892, 32; and Hardware Dealer, November, 1895, 565.

11 Hardware Reporter, December 30, 1870, 11.

12 According to Iron Age, a number of producers increased exports by as much as 50 per cent in the 1870's. Iron Age, January 2, 1879, 79.

13 Ibid.

14 Hardware Reporter, December 9, 1879, 11.

15 Ibid., October 7, 1879, 6; Iron Age, January 2, 1873, 16.

16 Hardware, April 25, 1891, 19.

17 Ibid., January 10, 1892, 23.

18 Iron Age, February 20, 1873, 11, and January 9, 1873, 11; Hardware, January 10, 1892, 23. U.S. Industrial Commission, Preliminary Report on Trusts and Industrial Combinations (Washington, 1900) I, 199, 205, 207.Google Scholar

19 Hardware Reporter, June 3, 1879, 7.

20 Hardware, October 1891, 18.

21 See, for example, Iron Age, January 2, 1873, 16. Manufacturers kept the retail price, but by reducing the discount moved the price at which they sold at wholesale closer to the price they would sell to a retailer. Reduced discounts were not only the result of poor economic conditions or competition. Manufacturers justified cut discounts because of increased costs of raw materials. They could not raise prices, as increased costs usually demanded, simply because in some cases there was competition outside of the association which would seek to take advantage of such an increase to sell at lower prices.

22 Although those manufacturers outside of associations might not follow the group in its price setting, they would most likely follow the policy of a decreased discount. Since the primary reasons a manufacturer remained outside an association was, no doubt, to retain his freedom of action, the increased costs to meet the demand of jobbers dissatisfied with manufacturer associations would not be justified by the return on the increased output. It was simpler and more profitable to follow the lead of the association and reduce the discount to jobbers.

23 Hardware Reporter, July 29, 1879, 8; Hardware, April 25, 1891, 19.

24 Becker, William H., “The Wholesalers of Hardware and Drugs, 1870–1900” (Ph.D. dissertation, Johns Hopkins University, 1969), chapters III and IV.Google Scholar

25 See, for example, Hardware, February 25, 1892, 20; Norvell, Forty Years, 39, 99, 101–102, 143, 150–53, 154–58, 204, 216–17, 256, 323–24; Wheless, Malone, By the Sweat of My Brow (Richmond, Va., 1953), 85, 106, 117Google Scholar; Williams, R. R., ed., Hardware Store Business Methods (New York, 1899), 28Google Scholar; Hardware Dealer, January, 1898, 59; Emmet, Boris and Jeuck, John E., Catalogues and Counters: A History of Sears, Roebuck and Company (Chicago, 1950), 20Google Scholar; Barger, Harold, Distribution's Place in the American Economy Since 1869 (National Bureau of Economic Research, Publication No. 58, General Series [Princeton, N.J., 1955], 140Google Scholar; Ninth Annual Report (1903), National Hardware Association, 17–18, 29–35 (hereinafter cited as N.H.A.); Tenth Annual Report (1904), N.H.A., 188; Second Annual Report (1896), N.H.A., 29; Fifth Annual Report (1899), N.H.A., 57ff; Hardware Dealer, June, 1897, 819-820a, July, 1897, 36–37.

28 Hardware, January 10, 1892, 23; Hardware Reporter, July 29, 1879, 8.

29 There is some evidence that wholesale merchants attempted to organize sporadically and locally before the depression of the 1870's. In the mid-1850's, the hardware merchants of New York City gathered “to take such action as may be necessary from time to time to promote their mutual interests in trade.” They met in 1856, 1858, and 1860; the Civil War put an end to their efforts. Although this group demonstrates that the idea of organization for mutual self-interest was not entirely new when it again appeared in the 1870's and 1880's, the concerns of the early hardware association were different from later ones. The New York group sought, for example, to keep American manufacturers from putting their names on their products, since the quality of imported goods was still preferred. Hardware Dealers Board of Trade, New York, Annual Report (1856); Hardware Dealer, February, 1895, 117–118.

28 Hardware Reporter, August 12, 1879, 11.

29 Ibid., August 19, 1879, 11.

30 With limited evidence, the question is whether the Buffalo hardware wholesalers are an exception or reasonably representative of the trade. Data on the hardware trade for the 1870's must be drawn primarily from Iron Age. This is, however, a poor source on associations. When there were many wholesale organizations in existence in the late 1880's and early 1890's, and confirmed by other sources, Iron Age gave little coverage even to the larger regional organizations. Moreover, because the Hardware Reporter had a good correspondent in Buffalo, invariably the reports on the trade in that area were far superior to all other local trade reports. The absence of evidence on local hardware associations in the 1870's does not necessarily mean that they did not exist.

31 Hardware, January 25, 1892, 34–35, and February 10, 1892, 32. Most of these associations were noted in publications printed in the 1890's. Most often the date of founding was not included. Usually the sources merely noted that the association went back to the 1880's. Hardware Dealer is the best source on these associations.

32 Third Annual Report (1897), N.H.A., 76–79.

33 Ibid., 77–79. Although price-keeping efforts failed, the local associations were more successful in some of their other efforts to improve the trade. Aside from the discussion of accounting and inventory procedure, the local groups established credit rating services. The associations created and maintained files in which they kept confidential ratings of retailers in the area. Any member of the wholesale association could check these indispensable files before extending credit to retailers.

34 Ibid., 72ff; Hardware Dealer, September, 1896, 348, April, 1897, 521, April, 1895, 359–360, August, 1895, 167–68, July, 1897, 74, August, 1896, 200, December, 1896, 407, January, 1897, 59, February, 1897, 224, January, 1898, 102.

35 Wholesalers of New York City did not join the state group. Most of them did business out of the state, while the upstate merchants tended to deal with retailers within the state. These other New York cities, nevertheless, were well established as wholesale and manufacturing centers.

36 Fourth Annual Report (1898), N.H.A., 88. Hardware, June 10, 1891, 17.

37 Hardware Dealer, October, 1895, 440, July, 1897, 37; Third Annual Report (1897), N.H.A., 56–59.

38 American Artisan, January 1, 1885, 22; Hardware, July 25, 1892, 34; Hardware Dealer, August, 1894, 113; September, 1894, 188–89, August, 1895, 159; Third Annual Report (1897), N.H.A., 59–60.

39 Hardware, March 10, 1892, 20.

40 Wholesale Hardware Directory, Hardware Dealer, October, November, December 1895, passim. 1895 is the earliest year such a directory is available.

41 Third Annual Report (1897), N.H.A., 61–64; Hardware Dealer, May, 1900, 779–80.

42 Ibid.

43 There is no indication that the wholesalers suggested to the manufacturers what they should charge. They were only concerned with the discount or the margin allowed them between wholesale and retail price. Hardware Dealer, July, 1894, 14–15, and May, 1900, 779–80.

44 Hardware Dealer, July, 1894, 14, 17.

45 Third Annual Report (1897), N.H.A., 61–64; Hardware Dealer, May, 1900, 779–780.

46 Hardware, March 10, 1892, 20; Wholesale Hardware Directory, Hardware Dealer, October, November, December, 1895, passim.

47 Fred C. Kelly, Seventy-Five Years of Hibbard Hardware, The Story of Hibbard, Spencer and Bartlett & Co. (n.p., 1930).

48 Hardware Dealer, January, 1895, 39–42.

49 First Annual Report (1895), N.H.A., 15–18.

50 Hardware Dealer, January, 1895, 39–42.

51 First Annual Report (1895), N.H.A., 18–19, 24–28; Third Annual Report (1897), N.H.A., 33.

52 First Annual Report (1895), N.H.A., 24–28.

53 Ibid., 44–46. They continued of course to establish and publish retail prices.

54 One other result of the association's efforts here was to make entry into the trade more difficult and hence cut the potential competition for established merchants. First Annual Report (1895), N.H.A., 18–19, 44–46; Second Annual Report (1896), N.H.A., 56–57; Wholesale Hardware Directory, Hardware Dealer, October, November, December, 1895, passim.

55 Fifth Annual Report (1899), N.H.A., 54–57.

56 Ibid., 37–39, 54–57.

57 Williamson, Harold F., Daum, Arnold R., and others, The American Petroleum Industry, The Age of Illumination 1859–1899 (Evanston, Ill., 1959), 693, 337–340, 535–551Google Scholar; Hutchinson, William T., Cyrus Hall McCormick (New York, 1935), II, 704–714Google Scholar; Jack, Andrew B., “The Channels of Distribution for an Innovation: The Sewing Machine Industry in America, 1860–1865,” Explorations in Entrepreneurial History, IX (February, 1957), 113–141Google Scholar; Chandler, Alfred D. Jr., Strategy and Structure, Chapters in the History of the Industrial Enterprise (Cambridge, Mass., 1962), 30, 37–38Google Scholar and “The Beginnings of ‘Big Business’ in American Industry,” Business History Review, XXXIII (Spring, 1959), 8–9Google Scholar; U.S. Industrial Commission, Preliminary Report on Trusts and Industrial Combinations (Washington, 1900), I, 76–78Google Scholar; Beckman, Theodore N. and Engle, Nathaniel H., Wholesaling, Principles and Practice (New York, 1949), 107–108Google Scholar; Barger, Distribution's Place, 70ff, 140.