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New England Puritans who owned the clipper ships made 

 unusual profits. To those with legal monopolies, such activi- 

 ties were a violation of the law. Producers and consumers of 

 the products in question did not look at it that way. They 

 patronized the black-market operators and broke the mo- 

 nopoly. 



Occasionally black-market operators have been one of the 

 best protections that the public had against monopolies. 

 Men have combined and agreed to restrict production of a 

 commodity in order to raise the price or to gain an advan- 

 tage. If such operations were not in public interest, other in- 

 dividuals, who were considered chiselers and black-market 

 operators by the vested interests, expanded production 

 and/or sold at lower prices. If the black-market operations 

 were in the public interest, sooner or later the black-market 

 operators broke the monopoly and were lauded as public 



benefactors. 



Modern Black Markets 



Under our present program of widespread price-fixing, 

 there are two sets of prices, (1) market prices for commodi- 

 ties, and (2) legal or ceiling prices for these commodities. 

 If the supply and demand for the product, and hence the 

 market price, is in equilibrium with the legal price at all 

 points from production through distribution to final con- 

 sumption, no black market exists. If the supply and the de- 

 mand, and hence the market price, are in equilibrium at a 

 level below the ceiling price, a black market does not de- 

 velop. 3 A black market is likely to exist when the supply and 

 demand for a commodity are brought into equilibrium at a 

 market price that is above the legal ceiling price. It makes 

 no difference whether the farm price, the wholesale price, the 

 jobber's price, or the retail price is above the legal ceiling. 



3 The government does not consider it illegal to buy and sell below the 

 ceiling price. 



