Rise of the Auction Problem 165 



posal."^ Boston, during the War, had been practically free from 

 blockade by the British and so this city and its hinterland had 

 continued to receive relatively plenty of British products in the 

 old way. But New York, Philadelphia, Baltimore and other 

 ports depended upon blockade runners and indirect importa- 

 tions. "During the war the British merchants established exten- 

 sive depots of goods in Halifax, Bermuda and other British 

 possessions, that they might be ready to supply the American 

 market on the declaration of peace. Immediately after the close 

 of the war these goods were sent" into the more destitute ports, 

 but chiefly New York." For a time the competition among 

 buyers was very keen and the British found auctions the most 

 profitable and quickest method. Fresh goods from Europe began 

 to pour into the country. Since the practice at this time was for 

 the auctioneer to advance the cash for the sales immediately, the 

 importer enjoyed a very high rate of turn-over. "Merchants, 

 finding that they could sell their goods at auction with such facil- 

 ity, and be ready for another venture so soon, ordered twice as 

 many as they would have done had they continued to sell all their 

 goods in the old way."' Auctions, therefore, soon glutted the 

 market ; its extraordinary demand was satiated by the autumn 

 of 1816, and prices started to decline that winter. Prices fell till 

 they scarcely covered the duties. A severe crisis broke upon the 

 importers and jobbers, almost all failed or were seriously crippled. 

 During this period of distress American importers ceased 

 ordering from Europe. British manufacturers determined to rid 

 themselves of their accumulating stocks. They dispatched agents 

 to America, who found auctions the readiest means of sale.^ 

 The prices prevailing in England were very low, lower than in 

 America. It was alleged at the time that the prices in both places 

 were below the cost of production. However that may be, the 

 low prices in England appeared on the invoices which were 

 genuine ; and the fact that the tendency was for prices to decline 

 further gave excuse for fictitiously invoicing shipments at less than 

 the prevailing English prices ; and the low invoice prices greatly 



= Bolles, I, 387. 

 ^Hunt's, 10: 156. 

 ' Bolles, I, 388. 

 ' Bolles, I, 388-9. 



