even more serious. Having succeeded in his retail business, the
master began to covet a still larger market,--the wholesale market.
However, the competition in this wider market was much keener than it
had been in the custom-order or even in the retail market. It was
inevitable that both prices and wages should suffer in the process. The
master, of course, could recoup himself by lowering the quality of the
product, but when he did that he lost a telling argument in bargaining
with the consumer or the retail merchant. Another result of this new way
of conducting the business was that an increased amount of capital was
now required for continuous operation, both in raw material and in
credits extended to distant buyers.
The next phase in the evolution of the market rendered the separation of
the journeymen into a class by themselves even sharper as well as more
permanent. The market had grown to such dimensions that only a
specialist in marketing and credit could succeed in business, namely,
the "merchant-capitalist." The latter now interposed himself permanently
between "producer" and consumer and by his control of the market assumed
a commanding position. The merchant-capitalist ran his business upon the
principle of a large turn-over and a small profit per unit of product,
which, of course, made his income highly speculative. He was accordingly
interested primarily in low production and labor costs. To depress the
wage levels he tapped new and cheaper sources of labor supply, in prison
labor, low wage country-town labor, woman and child labor; and set them
up as competitive menaces to the workers in the trade. The
merchant-capitalist system forced still another disadvantage upon the
wage earner by splitting up crafts into separate operations and tapping
lower levels of skill. In the merchant-capitalist period we find the
"team work" and "task" system. The "team" was composed of several
workers: a highly skilled journeyman was in charge, but the other
members possessed varying degrees of skill down to the practically
unskilled "finisher." The team was generally paid a lump wage, which
was divided by an understanding among the members. With all that the
merchant-capitalist took no appreciable part in the productive process.
His equipment consisted of a warehouse where the raw material was cut up
and given out to be worked up by small contractors, to be worked up in
small shops with a few journeymen and apprentices, or e
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