s the market became a national one as the effect of the
consolidation into trunk lines of the numerous and disconnected railway
lines built during the forties and fifties. Coincident with the
nationalized market for goods, production began to change from a
handicraft to a machine basis. The former sweatshop boss having
accumulated some capital, or with the aid of credit, now became a small
"manufacturer," owning a small plant and employing from ten to fifty
workmen. Machinery increased the productivity of labor and gave a
considerable margin of profits, which enabled him to begin laying a
foundation for his future independence of the middleman. As yet he was,
however, far from independent.

The wider areas over which manufactured products were now to be
distributed, called more than ever before for the services of the
specialist in marketing, namely, the wholesale-jobber. As the market
extended, he sent out his traveling men, established business
connections, and advertised the articles which bore his trade mark. His
control of the market opened up credit with the banks, while the
manufacturer, who with the exception of his patents possessed only
physical capital and no market opportunities, found it difficult to
obtain credit. Moreover, the rapid introduction of machinery tied up all
of the manufacturers' available capital and forced him to turn his
products into money as rapidly as possible, with the inevitable result
that the merchant was given an enormous bargaining advantage over him.
Had the extension of the market and the introduction of machinery
proceeded at a less rapid pace, the manufacturer probably would have
been able to obtain greater control over the market opportunities, and
the larger credit which this would have given him, combined with the
accumulation of his own capital, might have been sufficient to meet his
needs. However, as the situation really developed, the merchant obtained
a superior bargaining power and, by playing off the competing
manufacturers one against another, produced a cut-throat competition,
low prices, low profits, and consequently a steady and insistent
pressure upon wages. This represents the situation in the seventies and
eighties.

For labor the combination of cut-throat competition among employers with
the new machine technique brought serious consequences. In this era of
machinery the forces of technical evolution decisively joined hands
with the older forces of marketing