British Booksellers learn to Compete; W. Nelms

674 working of the market that the true price of goods and services can be established. If the govern ment interferes, it can only con fuse the issue, inhibit efficiency in production, cause shortages, and prevent consumers from getting the best available products. An excellent example of how the interests of both businessmen and consumers are best served by the competitive free market is the British bookselling trade of the nineteenth century. A careful re view of this story will demon strate how, without government interference, monopolies were avoided, consumers were provided inexpensive reading matter, and an acceptable income was earned by retail merchants. The history of English book selling is rooted in the eighteenth century. The Enlightenment, with its emphasis on intellectual im provement and industrialization, 1974 BRITISH BOOKSELLERS LEARN TO COMPETE 675 promoted the cause of .literacy ..

Despite the increasing level of ed ucation, however, by the turn of the nineteenth century, books could still be purchased only by the wealthy. Most publishers pre·· ferred to issue expensive limited editions of books, instead of pro·· ducing cheaper works for the ex panding middle class. As one Iit erary historian has observed: "ironically, as a climax· to a cen tury that prided itself on its un precedented diffusion of learning, new published books were com pletely out of the ordinary man's reach."1 An Innovator An interesting exception to this trend in the book trade was James Lackington, "an ex-shoemaker, random amorist, and converted Methodist." Lackington scandal ized the conservative book trade by buying volumes which other bookmen could not market and selling them at very low prices. Instead of maintaining the high prices and mark-ups of his com petitors, he hung a sign over his bookstore proclaiming, "Cheapest Bookseller in the World." No one challenged his claim, and his bus iness grew until he had the largest bookstore in London. 2 Lackington's success encouraged other retailers who were willing to accept his belief that "small profits do great things." Ignoring the protests of the older bookmen that underselling was against the best interests of the book trade, these entrepreneurs reaped accept able profits, provided reading ma terial to people with moderate incomes, and helped spread lit eracy throughout England.

Alarmed by the practice of com peti tive pricing, several leading members of the London Book sellers' Association met on Decem ber 9, 1829 to formally approve a document sanctioning control of retail book prices. According to this agreement, no retailer was to sell new books or reprints below the price suggested by the pub lisher; if he did, publishers could refuse to supply him with works at trade or wholesale prices. A permanent committee was estab lished to enforce these regulations, and within a year 560 members of the book trade had promised to abide by the regulations. The 1829 agreement brought outcries from booksellers who were unwilling to sacrifice them selves to save the more inefficient members of their trade. Many of these hardy individuals fought the regulations and continued to cut prices. 3 The Committee of the Book sellers' Association was deter mined to· enforce the 1829 accords, and it promptly responded to stop 676 THE FREEMAN November underselling. In addition to boy cotts and blacklisting, publishers were told to deny obstreperous sellers credit, and habitual of fenders were excluded from pub lic auctions and trade sales. The Committee later began issuing trade tickets to members who abided by the regulations. If a dealer violated the prescribed standards, his ticket was revoked and all privileges of the trade withheld.

Without a doubt, the most ob noxious of all techniques used by the organized book trade was es pionage. Not only were merchants encouraged to report to the Com mittee any violations by fellow members of the profession, but spies were also hired to harass undersellers. 4 As the harshness of the Book sellers' Association increased, the determination of the undersellers also hardened. This explains the necessi ty of the Committee to meet on July 12, 1850 to reaffirm its 1829 agreement. Such a gather ing would have been unnecessary if members had faithfully obeyed the dictates of the organized trade. The truth is that while only a handful of merchants openly refused to obey the Committee's commands, many did so covertly. As in any market where prices are held artificially high, the profit motive encouraged producers to engage in black market operations. The covert under sellers were en couraged by the booksellers who openly defied the Committee.

Needless to say, many of these men paid heavily for their actions, and some even went bankrupt. But the profitability of underselling was great enough to make the risk worthwhile for the few who cou rageously battled the organized book trade. Bucking the Association Among the most remarkable of these men was John Chapman, a publisher and importer of Ameri can books, who was only twenty eight in 1850. Although threat ened with blacklisting, boycotting and a cutoff of supplies, he con tinued to sell at less than the list price. Once, when the Committee promised to take sterner action against him, Chapman replied, "I'd gladly give ten pounds toward the expense of commencing hostil ities against your association." He often smuggled books from other areas and bought indirectly from publishers trying to put him out of business. 5 Chapman continued his defiance of the Association, and he printed several letters about its coercive activities in the London Times.

These letters attracted such public attention that two of the Com mittee's most respected members, 1974 BRITISH BOOKSELLERS LEARN TO COMPETE 677 William Longman and John Murray, felt compelled to respond. They replied that the Booksellers' Association represented a maj 01" ity of the London bookmen and that the question of the Commit tee's activities was being consid-· ered by several prominent London literary figures. Although this last statement was untrue, the pub licity it generated forced the Com mittee to submit the controversy to formal arbitration. A mutually agreeable group of arbiters was selected, and both parties began preparing their cases. 6 Encouraged by the possibility of victory through arbitration, Chap man and other undersellers set out to convince the authors of the books they sold that the Associa tion did not serve their best in terests. The Coromi ttee responded with a circular expounding the dire consequences of unrestricted competi tion. 7 From this debate came a most notable occurrence. On May 4, 1852, while the question of the Committee's actions was still awaiting arbitration, Chapman called a meeting of distinguished authors to get their opinions of the Booksellers' Association. Those present included Charles Dickens, Wilkie Collins, and Herbert Spencer. All of the authors de·· cried price fixing and caned for the institution of free trade. The words of Henry Cole, a contemp orary art critic-who was at the meeting, aptly expressed the feel ing of all present. He said, "I think the price of books should be allowed to find its own natural level, as in all other manufac tures."8 Free Trade Prevails When the question finally came before the arbiters, the under sellers argued that the regulations were monopolistic, oppressive, in efficient, and contrary to the prin ciples of free trade. The Commit tee replied that it represented a vast majority of the booksellers and that if "cutthroat competi tion" continued, publishing and bookselling would suffer irrepar able damage. They graphically de scribed a future in which book sellers would be forced out of business and in which the number of books in circulation would be drastically reduced.

After hearing the arguments of each side, the arbiters adjourned to make their decision, which was delivered on May 19, 1852. Their judgment was unequivocal: the Committee's regulations were crit icized as "harmful and vexatious," and inconsistent with the princi ples of free trade. As a result of this decision, the Committee was disbanded, and the Booksellers' Association was dissolved. 9 678 THE FREEMAN November Following the breakup of the Association, free trade returned to bookselling with predictable re sults. Price competition caused discounts to grow, and they were applied to nearly all. books in the trade. Between 1852 and 1890 the discount rate rose from two pence to three pence on the shilling, and in some places these rates were exceeded. This process was not confined to London, but extended into the provinces. Provincial booksellers not only competed among themselves but also faced the challenge of London mer chants. The rate of gross profit secured by booksellers was even tually half of what it was during the days of the Booksellers' Asso ciation. Naturally, this was to the advantage of the consumers as books became available to people with even the most modest of incomes. lO Many members of the book trade moaned the fall in· profit margins and argued that it was no longer possible to make an adequate in come. This argument has been cited by many historians to show the horrors of unrestricted com petition. ll In reality, however, a comparison of the figures avail able for the period discloses that profits were such that the number of booksellers actually increased by nearly 25 per cent, instead of decreasing as the critics have claimed. As the most careful stu dent of the nineteenth-century book trade has observed: "it is unlikely that there could have been any decline in the number of bookshops; and it may be con jectured that the average size of bookshop must have been increas ing. This conclusion would not be surprising in view of the growth of the economy and the continu ing spread of literacy."12 Another criticism of the price competition of the period is that booksellers were forced to supple ment their earnings by selling other merchandise, such as second hand books, fancy goods, and sta tionery. This was quite natural, however, as the traditional di visions between different branches of retail business were beginning to break down under the impact of changes in sale methods .and the growing standardization of products. This argument further loses it significance when one re alizes that similar circumstances obtained when there was regula tion of the trade by the Book sellers' Association. 13 Having dealt with the argu ments against free trade, it is necessary to assess the benefits of such freedom. As price competi tion increased, inefficient publish ers and retailers were forced to either become more productive or retire from the business. The 1974 BRITISH BOOKSELLERS LEARN TO COMPETE 679 drive for efficiency led to numer ous technologjcal innovations, es pecially in the binding of books, which further decreased the cost of printed matter to consumers.

In addition, novel advertising methods were used to inform the public of new works, and advances were also made in the distribution of books. Bookmen began to realize the vast market formed by the middle and lower classes, who were eager for reading material. With the developments in technology and the increased efficiency promoted by the free market, the rewards to the consumer were great. In the words of one hi~torian, "whatever its effects on the professional bookseller, the discount system en couraged the reading habit both by reducing actual prices and by increasing the availability of books."H All of the above circumstances were possible because of the un hampered workings of the free market. Without governmental in terference, it was impossible for the Booksellers' Association to maintain fixed prices. The lure of substantial profits was very tempt ing, and there were always busi nessmen willing to risk the dis pleasure of the organized trade.

Even if the Association had not agreed to have its activities arbi trated, it would not have been able to maintain its control. The mar ket for cheap printed matter was expanding, the technological ad vances were available, and under sellers were ready, willing and able to respond to the public's needs. These bookmen deserve much credit for their courage, and they deserve our thanks for dem onstrating how the free market can solve the problems of produc tion and consumption. • FOOTNOTES • 1 Richard D. Altick, The English Cotn-· mon Reader (Chicago & London, 1957), pp. 51-52. 2 Paul Hollister, Comp., The Author's Wallet (New York, 1934), pp. 8-12. a James L. Barnes, Free Trade in Books (Oxford, 1964), p. 14-16; Russi Jal Tara·· porevala, Cornpetition and its ContTol in the British Book Trade, 1850-1989 (Bom bay, 1969), pp. 16-17. ..J: Barnes, FTee Trade in Books, pp. 15-17, 22. ;) Hollister, The Author's TVallet, pp.

36-38. H Barnes, F?'ee Trade in Books, pp. 24-25. 7 Ibid., p. 25. H Hollister, The Author's Wallet, pp. 38-44. 9 Barnes, Free Trade in Books, pp. 28-29. 10 Taraporevala, Competition and its Control, pp. 21-26. 11 Ibid., p. 28-29; Thomas Joy, The Truth About Bookselling (London, 1964), p.20 . I:.! Taraporevala, Competition and its Control, p. 27. 1:{ Ibid., pp. 29-30. 14 A.ltick, The English Cornmon Reade?', p.305.