Economy of Machinery and Manufactures · Part XX

From the evidence of several highly respectable booksellers and printers, before the Committee of the House of Commons on the Copyright Act, May, 1818, it appears that the average number of surplus copies, above 500, is between two and three; that on smaller impressions it is less, whilst on larger editions it is greater; that, in some instances, the complete number of 500 is not made up, in which case the printer is obliged to pay for completing it; and that in no instance have the whole sixteen extra copies been completed. On the volume in the reader's hands, the edition of which consisted of 3000, the surplus amounted to fifty-two--a circumstance arising from the improvements in printing and the increased care of the pressmen. Now this overplus ought to be accounted for to the author--and I believe it usually is so by all respectable publishers.

388. In order to prevent the printer from privately taking off a larger number of impressions than he delivers to the author or publisher, various expedients have been adopted. In some works a particular watermark has been used in paper made purposely for the book: thus the words 'Mecanique Celeste' appear in the watermark of the two first volumes of the great work of Laplace. In other cases, where the work is illustrated by engravings, such a fraud would be useless without the concurrence of the copperplate printer. In France it is usual to print a notice on the back of the title page, that no copies are genuine without the subjoined signature of the author: and attached to this notice is the author's name, either written, or printed by hand from a wooden block. But notwithstanding this precaution, I have recently purchased a volume, printed at Paris, in which the notice exists, but no signature is attached. In London there is not much danger of such frauds, because the printers are men of capital, to whom the profit on such a transaction would be trifling, and the risk of the detection of a fact, which must of necessity be known to many of their workmen, would be so great as to render the attempt at it folly.

389. Perhaps the best advice to an author, if he publishes on his own account, and is a reasonable person, possessed of common sense, would be to go at once to a respectable printer and make his arrangements with him.

390. If the author do not wish to print his work at his own risk, then he should make an agreement with a publisher for an edition of a limited number; but he should by no means sell the copyright. If the work contains woodcuts or engravings, it would be judicious to make it part of the contract that they shall become the author's property, with the view to their use in a subsequent edition of the works, if they should be required. An agreement is frequently made by which the publisher advances the money and incurs all the risk on condition of his sharing the profits with the author. The profits alluded to are, for the present work, the last item of section 382, or L306 4s.

391. Having now explained all the arrangements in printing the present volume, let us return to section 382, and examine the distribution of the L915 paid by the public. Of this sum L207 was the cost of the book, L40 was taxes, L362 was the charges of the bookseller in conveying it to the consumer, and L306 remained for authorship.

The largest portion, or L362 goes into the pockets of the booksellers; and as they do not advance capital, and incur very little risk, this certainly appears to be an unreasonable allowance. The most extravagant part of the charge is the thirty-three per cent which is allowed as profit on retailing the book.

It is stated, however, that all retail booksellers allow to their customers a discount of ten per cent upon orders above 20s., and that consequently the nominal profit of forty-four or thirty-three per cent is very much reduced. If this is the case, it may fairly be enquired, why the price of L2 for example, is printed upon the back of a book, when every bookseller is ready to sell it at L1 16s., and why those who are unacquainted with that circumstance should be made to pay more than others who are better informed?

392. Several reasons have been alleged as justifying this high rate of profit.

First, it has been alleged that the purchasers of books take long credit. This, probably, is often the case, and admitting it, no reasonable person can object to a proportionate increase of price. But it is no less clear, that persons who do pay ready money, should not be charged the same price as those who defer their payments to a remote period.

Secondly, it has been urged that large profits are necessary to pay for the great expenses of bookselling establishments; that rents are high and taxes heavy; and that it would be impossible for the great booksellers to compete with the smaller ones, unless the retail profits were great. In reply to this it may be observed that the booksellers are subject to no peculiar pressure which does not attach to all other retail trades. It may also be remarked that large establishments always have advantages over smaller ones, in the economy arising from the division of labour; and it is scarcely to be presumed that booksellers are the only class who, in large concerns, neglect to avail themselves of them.

Thirdly, it has been pretended that this high rate of profit is necessary to cover the risk of the bookseller's having some copies left on his shelves; but he is not obliged to buy of the publisher a single copy more than he has orders for: and if he do purchase more, at the subscription price, he proves, by the very fact, that he himself does not estimate that risk at more than from four to eight per cent.

393. It has been truly observed, on the other hand, that many copies of books are spoiled by persons who enter the shops of booksellers without intending to make any purchase. But, not to mention that such persons finding on the tables various new publications, are frequently induced, by that opportunity of inspecting them, to become purchasers: this damage does not apply to all booksellers nor to all books; of course it is not necessary to keep in the shop books of small probable demand or great price. In the present case, the retail profit on three copies only, namely, 4s. 6d., would pay the whole cost of the one copy soiled in the shop; and even that copy might afterwards produce, at an auction, half or a third of its cost price. The argument, therefore, from disappointments in the sale of books, and that arising from heavy stock, are totally groundless in the question between publisher and author. It shold be remarked also, that the publisher is generally a retail, as well as a wholesale, bookseller; and that, besides his profit upon every copy which he sells in his capacity of agent, he is allowed to charge the author as if every copy had been subscribed for at 4s. 2d., and of course he receives the same profit as the rest of the wholesale traders for the books retailed in his own shop.

394. In the country, there is more reason for a considerable allowance between the retail dealer and the public; because the profit of the country bookseller is diminished by the expense of the carriage of the books from London. He must also pay a commission, usually five per cent, to his London agent, on all those books which his correspondent does not himself publish. If to this be added a discount of five per cent, allowed for ready money to every customer, and of ten per cent to book clubs, the profit of the bookseller in a small country town is by no means too large.

Some of the writers, who have published criticisms on the observations made in the first edition of this work, have admitted that the apparent rate of profit to the booksellers is too large. But they have, on the other hand, urged that too favourable a case is taken in supposing the whole 3000 copies sold. If the reader will turn back to section 382, he will find that the expense of the three first items remains the same, whatever be the number of copies sold; and on looking over the remaining items he will perceive that the bookseller, who incurs very little risk and no outlay, derives exactly the same profit per cent on the copies sold, whatever their numbers may be. This, however, is not the case with the unfortunate author, on whom nearly the whole of the loss falls undivided. The same writers have also maintained, that the profit is fixed at the rate mentioned, in order to enable the bookseller to sustain losses, unavoidably incurred in the purchase and retail of other books. This is the weakest of all arguments. It would be equally just that a merchant should charge an extravagant commission for an undertaking unaccompanied with any risk, in order to repay himself for the losses which his own want of skill might lead to in his other mercantile transactions.

395. That the profit in retailing books is really too large, is proved by several circumstances: First, that the same nominal rate of profit has existed in the bookselling trade for a long series of years, notwithstanding the great fluctuations in the rate of profit on capital invested in every other business. Secondly, that, until very lately, a multitude of booksellers, in all parts of London, were content with a much smaller profit, and were willing to sell for ready money, or at short credit, to persons of undoubted character, at a profit of only ten per cent, and in some instances even at a still smaller percentage, instead of that of twenty-five per cent on the published prices. Thirdly, that they are unable to maintain this rate of profit except by a combination, the object of which is to put down all competition.

396. Some time ago a small number of the large London booksellers entered into such a combination. One of their objects was to prevent any bookseller from selling books for less than ten per cent under the published prices; and in order to enforce this principle, they refuse to sell books, except at the publishing price, to any bookseller who declines signing an agreement to that effect. By degrees, many were prevailed upon to join this combination; and the effect of the exclusion it inflicted, left the small capitalist no option between signing or having his business destroyed. Ultimately, nearly the whole trade, comprising about two thousand four hundred persons, have been compelled to sign the agreement.

As might be naturally expected from a compact so injurious to many of the parties to it, disputes have arisen; several booksellers have been placed under the ban of the combination, who allege that they have not violated its rules, and who accuse the opposite party of using spies, etc., to entrap them.(3*)

397. The origin of this combination has been explained by Mr Pickering, of Chancery Lane, himself a publisher, in a printed statement, entitled, 'Booksellers' Monopoly' and the following list of booksellers, who form the committee for conducting this combination, is copied from that printed at the head of each of the cases published by Mr Pickering:

Allen, J., 7, Leadenhall Street. Arch, J., 61, Cornhill. Baldwin, R., 47, Paternoster Row. Booth, J. Duncan, J., 37, Paternoster Row. Hatchard, J., Piccadilly. Marshall, R., Stationers' Court. Murray, J., Albemarle Street. Rees, O., 39, Paternoster Row. Richardson, J. M., 23, Cornhill. Rivington, J., St. Paul's Churchyard. Wilson, E., Royal Exchange.

398. In whatever manner the profits are divided between the publisher and the retail bookseller, the fact remains, that the reader pays for the volume in his hands 6s., and that the author will receive only 3s. 10d.; out of which latter sum, the expense of printing the volume must be paid: so that in passing through two hands this book has produced a profit of forty-four per cent. This excessive rate of profit has drawn into the book trade a larger share of capital than was really advantageous; and the competition between the different portions of that capital has naturally led to the system of underselling, to which the committee above mentioned are endeavouring to put a stop.(4*)

399. There are two parties who chiefly suffer from this combination, the public and authors. The first party can seldom be induced to take an active part against any grievance; and in fact little is required from it, except a cordial support of the authors, in any attempt to destroy a combination so injurious to the interests of both.

Many an industrious bookseller would be glad to sell for 5s. the volume which the reader holds in his hand, and for which he has paid 6s.; and, in doing so for ready money, the tradesman who paid 4s. 6d. for the book, would realize, without the least risk, a profit of eleven per cent on the money he had advanced. It is one of the objects of the combination we are discussing, to prevent the small capitalist from employing his capital at that rate of profit which he thinks most advantageous to himself; and such a proceeding is decidedly injurious to the public.

400. Having derived little pecuniary advantage from my own literary productions; and being aware, that from the very nature of their subjects, they can scarcely be expected to reimburse the expense of preparing them, I may be permitted to offer an opinion upon the subject, which I believe to be as little influenced by any expectation of advantage from the future, as it is by any disappointment at the past.

Before, however, we proceed to sketch the plan of a campaign against Paternoster Row, it will be fit to inform the reader of the nature of the enemies' forces, and of his means of attack and defence. Several of the great publishers find it convenient to be the proprietors of reviews, magazines, journals, and even of newspapers. The editors are paid, in some instances very handsomely, for their superintendence; and it is scarcely to be expected that they should always mete out the severest justice on works by the sale of which their employers are enriched. The great and popular works of the day are, of course, reviewed with some care, and with deference to public opinion. Without this, the journals would not sell; and it is convenient to be able to quote such articles as instances of impartiality. Under shelter of this, a host of ephemeral productions are written into a transitory popularity; and by the aid of this process, the shelves of the booksellers, as well as the pockets of the public, are disencumbered. To such an extent are these means employed, that some of the periodical publications of the day ought to be regarded merely as advertising machines. That the reader may be in some measure on his guard against such modes of influencing his judgement, he should examine whether the work reviewed is published by the bookseller who is the proprietor of the review; a fact which can sometimes be ascertained from the title of the book as given at the head of the article. But this is by no means a certain criterion, because partnerships in various publications exist between houses in the book trade, which are not generally known to the public; so that, in fact, until reviews are established in which booksellers have no interest, they can never be safely trusted.

401. In order to put down the combination of booksellers, no plan appears so likely to succeed as a counter-association of authors. If any considerable portion of the literary world were to unite and form such an association; and if its affairs were directed by an active committee, much might be accomplished. The objects of such an union should be, to employ some person well skilled in the printing, and in the bookselling trade; and to establish him in some central situation as their agent. Each member of the association to be at liberty to place any, or all of his works in the hands of this agent for sale; to allow any advertisements, or list of books published by members of the association, to be stitched up at the end of each of his own productions; the expense of preparing them being defrayed by the proprietors of the books advertised.

The duties of the agent would be to retail to the public, for ready money, copies of books published by members of the association. To sell to the trade, at prices agreed upon, any copies they may require. To cause to be inserted in the journals, or at the end of works published by members, any advertisements which the committee or authors may direct. To prepare a general catalogue of the works of members. To be the agent for any member of the association respecting the printing of any work.

Such a union would naturally present other advantages; and as each author would retain the liberty of putting any price he might think fit on his productions, the public would have the advantage of reduction in price produced by competition between authors on the same subject, as well as of that arising from a cheaper mode of publishing the volumes sold to them.

402. Possibly, one of the consequences resulting from such an association, would be the establishment of a good and an impartial review, a work the want of which has been felt for several years. The two long-established and celebrated reviews, the unbending champions of the most opposite political opinions. are, from widely differing causes, exhibiting unequivocal signs of decrepitude and decay. The quarterly advocate of despotic principles is fast receding from the advancing intelligence of the age; the new strength and new position which that intelligence has acquired, demands for its expression, new organs, equally the representatives of its intellectual power, and of its moral energies: whilst, on the other hand, the sceptre of the northern critics has passed, from the vigorous grasp of those who established its dominion, into feebler hands.

403. It may be stated as a difficulty in realizing this suggestion, that those most competent to supply periodical criticism, are already engaged. But it is to be observed, that there are many who now supply literary criticisms to journals, the political principles of which they disapprove; and that if once a respectable and well-supported review(5*) were established, capable of competing, in payment to its contributors, with the wealthiest of its rivals, it would very soon be supplied with the best materials the country can produce. (6*) It may also be apprehended that such a combination of authors would be favourable to each other. There are two temptations to which an editor of a review is commonly exposed: the first is, a tendency to consult too much, in the works he criticizes, the interest of the proprietor of his review; the second, a similar inclination to consult the interests of his friends. The plan which has been proposed removes one of these temptations, but it would be very difficult, if not impossible, to destroy the other.

NOTES:

1. The whole of the subsequent details relate to the first edition of this work.

2. These details vary with different books and different publishers; those given in the text are believed to substantially correct, and are applicable to works like the present.

3. It is now understood that the use of spies has been given up; and it is also known that the system of underselling is again privately resorted to by many, so that the injury arising from this arbitrary system, pursued by the great booksellers, affects only, or most severely, those whose adherence to an extorted promise most deserves respect. Note to the second edition.

4 The monopoly cases. Nos. 1. 2. and 3. of those published by Mr Pickering, should be consulted upon this point; and, as the public will be better able to form a judgement by hearing the other side of the question, it is to be hoped the Chairman of the Committee (Mr Richardson) will publish those regulations respecting the trade, a copy of which. Mr Pickering states, is refused by the Committee even to those who sign them.

5. At the moment when this opinion as to the necessity for a new review was passing through the press. I was informed that the elements of such an undertaking were already organized.

6. I have been suggested to me, that the doctrines maintained in this chapter may subject the present volume to the opposition of that combination which it has opposed. I do not entertain that opinion; and for this reason, that the booksellers are too shrewd a class to supply such an admirable passport to publicity as their opposition would prove to be if generally suspected. But should my readers take a different view of the question, they can easily assist in remedying the evil, by each mentioning the existence of this little volume to two of his friends.

{I was wrong in this conjecture; all booksellers are not so shrewd as I had imagined, for some did refuse to sell this volume; consequently others sold a larger number of copies.

In the preface to the second edition, at the commencement of this volume, the reader will find some further observation on the effect of the booksellers' combination.}

Chapter 32

On the Effect of Machinery in Reducing the Demand for Labour

404. One of the objections most frequently urged against machinery is, that it has a tendency to supersede much of the hand labour which was previously employed; and in fact unless a machine diminished the labour necessary to make an article, it could never come into use. But if it have that effect, its owner, in order to extend the sale of his produce, will be obliged to undersell his competitors; this will induce them also to introduce the new machine, and the effect of this competition will soon cause the article to fall, until the profits on capital, under the new system, shall be reduced to the same rate as under the old. Although, therefore, the use of machinery has at first a tendency to throw labour out of employment, yet the increased demand consequent upon the reduced price, almost immediately absorbs a considerable portion of that labour, and perhaps, in some cases, the whole of what would otherwise have been displaced.

That the effect of a new machine is to diminish the labour required for the production of the same quantity of manufactured commodities may be clearly perceived, by imagining a society, in which occupations are not divided, each man himself manufacturing all the articles he consumes. Supposing each individual to labour during ten hours daily, one of which is devoted to making shoes, it is evident that if any tool or machine be introduced, by the use of which his shoes can be made in half the usual time, then each member of the community will enjoy the same comforts as before by only nine and one-half hours' labour.

405. If, therefore, we wish to prove that the total quantity of labour is not diminished by the introduction of machines, we must have recourse to some other principle of our nature. But the same motive which urges a man to activity will become additionally powerful, when he finds his comforts procured with diminished labour; and in such circumstances, it is probable, that many would employ the time thus redeemed in contriving new tools for other branches of their occupations. He who has habitually worked ten hours a day, will employ the half hour saved by the new machine in gratifying some other want; and as each new machine adds to these gratifications, new luxuries will open to his view, which continued enjoyment will as surely render necessary to his happiness.

406. In countries where occupations are divided, and where the division of labour is practised, the ultimate consequence of improvements in machinery is almost invariably to cause a greater demand for labour. Frequently the new labour requires, at its commencement, a higher degree of skill than the old; and, unfortunately, the class of persons driven out of the old employment are not always qualified for the new one; so that a certain interval must elapse before the whole of their labour is wanted. This, for a time, produces considerable suffering amongst the working classes; and it is of great importance for their happiness that they should be aware of these effects, and be enabled to foresee them at an early period, in order to diminish, as much as possible, the injury resulting from them.

407. One very important enquiry which this subject presents is the question whether it is more for the interest of the working classes, that improved machinery should be so perfect as to defy the competition of hand labour; and that they should thus be at once driven out of the trade by it; or be gradually forced to quit it by the slow and successive advances of the machine? The suffering which arises from a quick transition is undoubtedly more intense; but it is also much less permanent than that which results from the slower process: and if the competition is perceived to be perfectly hopeless, the workman will at once set himself to learn a new department of his art. On the other hand, although new machinery causes an increased demand for skill in those who make and repair it, and in those who first superintend its use; yet there are other cases in which it enables children and inferior workmen to execute work that previously required greater skill. In such circumstances, even though the increased demand for the article, produced by its diminished price, should speedily give occupation to all who were before employed, yet the very diminution of the skill required, would open a wider field of competition amongst the working classes themselves.