Commercial Effects of Auctions 183 



goods and be ultimately borne by the consumer.'- 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.'* 

 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 181 7, 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 181 7 and the con- 

 struction of the Erie Canal in 1825 and the natural advantages 

 of New York.^« 



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 prices^* ; the periodicity and dependa- 

 bilitv 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. 



''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, i, 6 : "In New York alone is located a class of foreign 

 agents, whose whole business is to vend, through auctioneers and com- 

 mission houses, the immense surplus production of their manufacturing 

 districts." 



"Niles, 21 : 103. 



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



