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along with the law as long as he can, but he will not sit tight 

 and go under. In the early stages experience has taught him 

 that the best thing to do is to squawk and hope for the best. 

 When he finds that squawking is ineffective and the black 

 market continues to eat into his business, he looks into the 

 letter of the law and finds ways of recapturing his share of 

 the trade. The medium-to-large concerns are the last to vio- 

 late the law. They violate its intent, but not its wording. 

 The escape centers in the letter of the law. There is no escape 

 from its intent. 



The market mechanism is so complicated that it is diffi- 

 cult to write an order that does not somewhere have a loop- 

 hole that permits legal violation of the letter of the law. The 

 little fellow finds the loophole quickly and acts quickly. The 

 big fellow finds the hole just about as quickly, but he does 

 not act until he is forced to do so. 



Simplicity of Regulations Does Not Eliminate 

 Black Markets 



Some persons cry loudly for simplicity of regulations so 

 that people can understand the law and therefore comply. 

 Simplicity of regulation may contribute to understanding, 

 but it does not meet the basic black-market problem. Sim- 

 plicity multiplies the inequities in the channels of trade; 

 some prosper, others are forced to violate the law or are 

 forced to the wall. Simple regulations of a complicated mech- 

 anism merely create a healthful environment for the growth 

 of black markets. 



Stopgaps to Black Markets 



A certain percentage of a commodity can be sold through 

 the black market without seriously disturbing the producers, 

 distributors, or consumers. Let us say it is 20 per cent of the 

 product. When the volume rises to, say, 30 per cent, there 



