RISE OF THE AUCTION PROBLEM. 



The method of selHng at auction is ancient and quite universal.^ 

 It was used in America by the Colonists from very early date- 

 as a means of disposing of property under judicial process, and 

 of closing out stocks of merchandise (on account of commercial 

 failures, on account of underwriters, or of unsalable goods 

 remaining in importers' hands at end of the season), second-hand 

 household furnishings, farm utensils and animals. But this 

 "business was inconsiderable. It was then considered a dis- 

 creditable mode of selling goods, and various methods were 

 practiced for concealing the owner's name."^ 



During the Embargo and the War of 1812 the English manu- 

 facturers resorted to auctions to sell their products both in 

 London and America. This innovation hurt the London and 

 provincial tradesmen, and it was bewailed that "a. commercial 

 nation should have fallen into the mistake of suffering the sale of 

 manufactured goods" through the "numerous and increasing 

 progeny of auction marts . . . academies of trick and chi- 

 canery," causing bankruptcies by underselling and by rapid 

 selling of goods bought on credit.'* 



The American ports being closed to direct importations from 

 Europe, the volume of imports declined, and only through neutral 

 ports or Canada did goods enter to stem the rising prices and in 

 this trade "several houses were often jointly interested in the 

 same importation. For this reason quick sales were desirable ; 

 and consequently package-sales at auction were introduced as the 

 most expeditious, as well as the most profitable, mode of dis- 



' For a general survey see Hunt's Merchants Magazine, II, 72. 



"In New York City, for instance, mention of auction sales in 1676 is 

 found; in that year "Matthias Nicoll was appointed vendee master, and 

 gave 200o£ security, which is an indication of the importance and 

 responsibility of the office at that time." Goodrich, Picture. 453. A long 

 train of liscal and regulatory legislation re auctions exists in the archives 

 of nearly every colony. 



^ Bolles, Financial History, I, 387. 



*"The ruinous tendency of auctioneering and the necessity of restrain- 

 ing it for the benefit of trade, etc.," New York. 1813 ; second ed. London.j 

 1848, with copious explanatory notes adde-d, p. 3. 



