LAMENT FOR THE HORSE TRADE

Hamilton, Walton

Lament For The Horse Trade By WALTON HAMILTON THE other day I found myself again in Madisonville, Tenn. I say "again"; for I was born in what might be called a suburb of this metropolis of 300. A...

...It provided, as all healthy institutions do, the corrective social milieu within which individuals may safely be left to fend for themselves...
...Take that from him and his assets are of little value...
...in law it was called contract ; in economics, competition, free enterprise or the market...
...The law courts may still follow Williston on Contract...
...A single contract, a la Williston, is an agreement between the party of the first part and the party of the second part...
...His situation had been eased somewhat by the presence of the TVA near by...
...Ford can find a new agent far easier than the agent can find a new master...
...Contract sported all the personal virtues—industry and independence, shrewdness and self-reliance...
...In the old days Madisonville was on the map...
...In it is to be found in microcosm the institution which was once in reality—and to the law still is—the glory of the American economy...
...Pickering, he sells tractors...
...The conditions are not exactly what either party would like, yet on the whole what both are willing to accept...
...lumber is obviously the return load...
...Whenever two men met, each eyed the other's mount with interest and an eye to possession— but always searchingly...
...On its face the contract meets all of Williston's norms...
...At this pass, a puff of wind blows the blank on the floor, turning it over...
...In terms of equality, reciprocity, mutuality, dealing at arm's length, nothing could be fairer on its surface...
...Its owner, however, after many words and a decorous interval, was usually able to forget the insult— and to make a counter-offer...
...Each craftsman had his own way of trading—an idiom as distinctive as that of a writer, a composer, a judge...
...Today Madisonville can be set down as Exhibit A in support of the proposition that the trend has been set in reverse...
...Then he turns it over and scribbles on the back, "To be delivered damn quick and correctly and subject to no condition whatever and the company assumes full liability...
...Our first stop is at Western Union located at the depot—no native son would ever say station—just where it was when I was a boy...
...Like any custom alike ancient and honorable it had Its punctilios of personal honor...
...I stick to my task and do my errands...
...Whether it is progress is another matter...
...There are differences, of course, but not fundamental ones...
...For the age of contract is over...
...funds are put into production...
...I scribble my telegram, offer it to the ticket-express-freight-telegraph agent, and call upon my deputy to negotiate the sending of the message...
...What are you trying to put over...
...in philosophy, the theory of individualism...
...pockets his own profit or loss...
...Nor would any honorable horse-trader deal after nightfall without at least broad hints as to what the other fellow should look for...
...it is at the old stand all right—and I remember how on that very spot I once bargained with "the storekeeper" over the price of a.suit of clothes...
...For, until he mounted the other fellow's nag as his own, retreat was always open...
...So I ask the agent, who gear shifts his allegiance from Western Union to the Louisville & Nashville R. R. for a ticket to Knoxville...
...Contract masks a relationship which in essence has come to be status...
...to fill them, they have had to turn other customers away...
...He may fret and growl and threaten...
...It had a railroad station, a court house, three churches, a trio of saloons, and just as many lawyers...
...Crowd Insured Fair Play Even the terms of the bargain had their niceties...
...As the deal went forward, a third person—or even a fourth or a fifth—might barge in on the one party or the other with a better offer...
...Knights and horse-traders, when defeated on the field of battle, do not invoke the State's justice against those who tilt according to the rules...
...The other day, in looking out of a train window, my eye fell upon a sign, "Timothy Pickering, Dealer in Tractors, Mules, and Lumber...
...And it was as stern, fatalistic, and Calvinistic as old John or even Coolidge himself...
...In its sight neither party could dictate the terms of the bargain...
...Yet the revolution, the mightiest in the history of the world, is upon us...
...In a servitude, much like that of the auto dealer, the tractor salesman is forced to seek salvation by the art of the horse-trade...
...Akron, Detroit, Pittsburgh, Wilmington, Hollywood, have become capitals of industrial empires...
...To stop its owner from boasting about his steed would have been a cruel and unusual form of punishment...
...to anyone who essayed the tilt, a hundred combats of words and of wills were open...
...He is confronted with a sheet of four pages, filled with fine printing, in which the company narrows almost to a needle point its liability...
...The rule of caveat emptor, of course, applied, as it always does between men who are equal, wise, and able to take care of themselves...
...In the relation between himself and his feudal lord the proprieties of the age of contract are all preserved, yet their substance has been dissipated into formalism...
...More than once I have seen a trade consummated between different persons and in respect to different horses from those involved in its beginning...
...The dealer is a strange phenomenon, a representative of the manufacturer in the vicinage—¦ yet a merchant adventurer on his own...
...The dealer acts in his own name...
...Judges may call new things by old names...
...Again there was recovery of poise and a fresh proposal...
...But the depot is not all of Madisonville...
...After a process of higgling, there is "acceptance...
...So the dealer is expected to pass on the quota assigned to him...
...The bi-lateral character of contract—with its presumptions of separate parties, equality of bargaining power, the absence of compulsion—made the competitive system possible...
...And, since his customer shops around for the best offer, the size of the "trade-in-allowance" spells for him solvency or doom...
...and, therefore, that things run of themselves...
...often probed with searching questions to reveal what might have remained hidden...
...The agent names a price...
...the number wanted is stepped up to 500,000...
...There is no longer horse-trading on a grand scale, for the horses are no longer there to be traded...
...The cars are billed to the dealer at a discount of from 18 to 22 per cent of market price—and from this margin he is expected to meet the expenses of his business and to take his living...
...Is it proper that the folk be fed, shod, housed, refreshed with the vanities of life...
...The question, the insistent question, is how "we the people" are to be "secured" in our "lives, liberties, estates" against this communism of the right...
...Each has as much power as does the other to shape the terms of the bargain...
...the reader, given the lead, can create his own catalogue...
...Nor must the role of the...
...The dealer's skills, capital, good will, place in the community are all established upon his franchise...
...It is respectable just now to shudder at the very idea of revolution...
...and their meeting did little more than lend dignity to a frolic...
...It's business, all of it, of a magnitude—no minatude—far more minute than any horse-trade...
...The price at which the dealer sells is fixed by my-lord-of-the-as-sembly-line...
...he sticks to his craft and does my bargaining...
...The War Department is not unmindful of actuality...
...so words uttered around the square in the heat of verbal combat had little probative value in the court-room 100 feet away...
...1 wasn't there on the first Monday...
...There was, open to all, a free market...
...If an alien steed prompted desire, a man would break in on the owner with "an offer," which was always indignantly rejected as a gross reflection on a noble animal...
...The local agent, a mere accessory in a national marketing system, is dispensable...
...And the free and open market saved the State from having to operate the industrial system...
...Here an ancient art still survives...
...In like manner the vendor of phonograph records recognizes his master's voice...
...At the ignorance and importance of the man back of the window Old Horse-Trader is dumbfounded...
...The man on whom all the risks of the business have been dumped, looks to shrewd bargaining as a help against his hazards...
...Thus in the guise of an agreement, a system of vassalage is imposed by manufacturer upon dealer...
...A learned judge might worst a clever farmer only to fall an hour later before the superior craft of the country doctor...
...in the domain of oil, the proprietor of the filling station is a retainer of the major company...
...In fact, however, it is usually less generous than • the figures indicate...
...For every new car he sells he must buy a second-hand one...
...It wasn't, however, a primitive institution...
...And as contract Invades the general domain of commerce, there is no essential ehange in its character...
...The crowd was there to insure fair play and to enforce the rules...
...4 Its social office gave supreme importance to contract...
...chorus of onlookers be forgotten...
...At law contract may succeed contract...
...Another old friend, still a tenant farmer after all these years, is wondering how much—if anything— will be left to him from his crop after the "advances" for fertilizer and supplies are met...
...and when again the two are in accord, we may begin to describe what is coming to be known as corporate feudalism...
...business carries on...
...All the concern's facilities are enlisted and capital is laid out in expansion...
...in motion pictures the neighborhood house carries on under conditions decreed by the giant producer...
...exposed the wiles of the well-known trickster...
...And to make the bargain good there must —shades of the horse-trade—be "consideration...
...Thus the great offices incident to looking after the people in sickness and in health caused no general concern...
...so it is all to the good...
...laborers are set to work...
...As day follows day, change comes by stealth...
...with utter derision Old Horse-Trader insists that the charge is outrageous...
...Detroit delivers the goods, dispatches the bill, contracts itself out of all risk...
...You must think we are fresh from the backwoods...
...They trade with each other "at arm's length...
...But prices and terms and obligations are to him pecuniary mysteries—and he remains a vassal to the village merchant who is himself vassal to some anonymous money lord away off yonder...
...the mules are best disposed of in a territory that is not going tractor...
...It was, in a word, a belief that God wound up the clock in the beginning...
...We came in on horses, mounts, mares, steeds, but mostly on nags...
...It was a reflection on your adversary's knowledge of horse-flesh to reveal defects which he would delight to discover for himself...
...Let me invite an old fashioned horse-trader to ply his art as with me he makes the rounds of the Madisonville of today...
...Then to the agent, "Get me a clean piece of paper...
...Competition, with its contractual system of checks and balances, sired "the law of supply and demand...
...We really rode...
...And, although few of us Monroe County folk had heard of the book, our rural society, was a testimonial to its thesis that progress is from status to contract...
...It was the thing which made the gears engage, the wheels turn, the shebang run...
...but I am willing to gamble—you name the odds—that an interesting vestige, but only a vestige, remains to tell of a once glorious sporting event...
...the Army recognizes the relation of lord and retainer...
...It played its favorites...
...The agent looks at him in bewilderment—and says he has no authority to change the rate...
...mules are the trade-in...
...A firm called Ingerbury is offered a contract for 100,-000 dollar-watches by a mail-order house...
...Either may at any moment before the deal is done call it quits...
...There is nowhere to take it, of course...
...And, to the agent utterly perplexed, he blurts out, "Get that message off right away, or we will take ouj business elsewhere...
...The instrument is executed...
...As the lord of the assembly-line dictates to his dealers, so he extends his dominion over his parts-manufacturers...
...Is a town intent upon a bank, a new factory, a machine shop...
...Because we call them by the same names, it is easy for us—and for the courts—to believe that things are the same...
...from the precisions of f.o.b.-Detroit-plus-freight-by-rail there are no exceptions...
...It was all part of an age...
...in modern times cars must be sold in order that the assembly line may be kept going...
...It was then the other horse which was slandered...
...From early dawn until long after sunset the principal streets became a great horse market...
...It is law, not fact, which must in time make its accommodation...
...The automobile dealer is not an unique specimen...
...When I knew the village best—in the decade of the nineties—Sir Henry Maine's The Ancient Law was great stuff...
...The people said they came because County Court—an administrative body made up of all the J.P.'s—met that day...
...I'm about to come across with the fare when Old Horse-Trader insists that there have been a lot of wrecks of late and wants to know exactly what precautions the railroad is taking to insure me safety in life and limb...
...Yet in sum and in symbol it came to this: the national economy must be run under an institution called contract which is the elaboration of the way of two men with a couples of horses...
...But now it proudly flaunts a "one price" you-take-it-or-leave-it system...
...in the distilled spirits industry "the tide house" is well known...
...The power to renew or abrogate the contract enables the stronger party to dictate terms...
...A fine art with its degrees of perfection was in practice...
...Take a multiple of a billion instances—the result is contract as it operated during the 19th Century...
...A quarter of a century had passed since last I had seen the place...
...His way of keeping his accounts is prescribed...
...and, when times are bad, he does not dare to break away because there is nowhere to go...
...We stop at a general store...
...The duress is found in an innocent little clause permitting not one—bat "either"—of the two partners to terminate the agreement on 30 or 60 days notice...
...a resulting activity is set in motion...
...Thus contract created a national economy out of individual enterprises...
...And it was rather against the code to have the law on "the scoundrel" who had fooled you...
...So for me it ceased to be a small town and became an instrument of precision for measuring change in America...
...it was as rich, colorful, mature as the culture in which it was set...
...After alternative markets are surrendered, the price is cut...
...the other man's eye for horse-flesh which was aspersed...
...yet he is expected to be man enough to live up to the obligations of contract...
...Any man who had a saddle and could ride was—at least in his contractual capacity— just as good as any other man...
...A society which can no longer sustain the horse-trade has lost the pristine equality of man to man —and without this no institution as democratic as contract can endure...
...There is little stuff on which one of the finest of all arts can flourish...
...Williston has set it all down as a ponderous and authoritative corpus...
...The best place, however, in which to catch in miniature the operation of the national economy is the Ford "agency...
...As the flexible terms of a bargain are frozen into the rigidities of a servitude, the relation of master and man becomes established...
...Like all institutions which exalt the individual the horse trade allowed wide latitude to personal judgment...
...he, and whatever salesmen he employs, must take a standardized course of instruction...
...I've gotten as much as $250 towards a new car for a wreck sight unseen which had to be hauled in...
...the agent has no power to alter terms or conditions and knows no one who does...
...purchases the cars he passes on...
...in coal, steel and railroad companies have "captive mines...
...Parts must be purchased from the manufacturer and the charges for repairs are specified...
...it is up to the "independent" dealer to find ways by which the merchandise may be sold and the bill paid...
...Leave it to be effected by contract among interested parties...
...in reality a durable relation is established and maintained...
...They may rue the bargain ; but to break it they must go out after new markets...
...He has bribed them into his im-perium with large orders...
...Again we find ourselves storming in vain in trying to drive a bargain with an invisible, untouchable, unreachable—let me get the correct term from Williston—"party of the second part...
...The Ford Dealer An old friend with whom I stop to chat is taking out a fire insurance policy on his house...
...19th Century Free Markets After surveying the field and feeling each other out, there is "offer...
...the best time, the first Monday in the month...
...As the higgling went forward, you ran your own court of equity to enjoin anything of which later you might have cause to complain...
...But the wise one knew that the J. P.'s, like the rest of humanity, needed an escape from the farm...
...and to me, "Write that message over again...
...It is, therefore, fortunate to have an instrument of measurement such as Madisonville in the state of Tennessee to tell us whether contract still endures, is being transformed, or is on the way out...
...No one even had to deal...
...It was years later that I discovered that it was known to the Harvard Law School as Williston on Contract...
...Contract may be depended upon to make the requisite arrangements...
...installs his own show rooms and service equipment...
...he stands for contract restlessly on the march...
...So they let well enough alone...
...It lets prime contracts only to the big boys, it leaves the detail of distribution to be worked out by the device of sub-contracts...
...By that time Ingerbury is bound too fast for any declaration of independence...
...As differences in bargaining power appear, equality fades from the picture...
...Williston has made of it a dialectic as intricate as a theological system...
...that is, each is independent of the other, neither is forced to deal, each has an alternative...
...So, to give him another chance, I pass across to the gent—now representing American Railway Express— a package of old family letters which I want sent to New Haven...
...He can only pay, sign, and hope the courts will not allow the concern to forget what it is in business for...
...operates his own enterprise...
...The best place to observe America was court house square...
...for the motor-car was just passing from pipe-dream to toy...
...It is useless to go on with cases...
...Old Horse-Trader's eye falls on the printing on the back and he explodes: "This says that your darned company won't be responsible for delay or safe delivery.-We're not going to stand for such high-handed insolence...
...Yet a check of its terms reveals the contract to be a one-sided sort of thing...
...Its function gave quality to every activity it touched...
...And contract adjusted that flexible order to whatever the course of events brought...
...The price mentioned is quite low, but the order can be filled in a slack season...
...The arrangement runs on for three years...
...sat with bated breath and in silent admiration, as the Methodist preacher met his match in the village editor...
...At Madisonville the horse-trade reflected a code of rural justice...
...What, then, was the office of contract—that is of the glorified horse-trade in the economy...
...and the venture which was at once a sport, a business, and a debauch went on until the difference melted into agreement—or became as wide as the ocean...
...if the beasts are to arrive in saleable condition, they must be carried, not driven...
...At Madisonville it was a living thing...
...But, at the sight of Madisonville, the bones of Sir Henry Maine must rest uneasily...
...Contract' Turns The Wheels At Madisonville—I wonder if The Progressive has any subscribers there—we called it the horse trade...
...The little fellow has little power to bargain...
...Art Of Horse Trading Around the square Sir Henry's thesis was forever being demonstrated...
...Yet, in respect to ordinary affairs of life, the market leaves us utterly without a voice...
...and, since deals were in an unstandardized item, every trader was upon his mettle...
...For on that day, in accordance with ancient custom, every male over 18—and a host like myself a lot younger—rode to town...
...You could capture it in a phrase, explore it in a legal tome, or elaborate it into a dialectical system...
...But the car he sells has its repute...
...in politics, the policy of laissez-faire...
...Among unlikes it was hard, especially for shrewd appraisers, to discover exact equivalence—and from one side to the other there was usually something "to boot...
...The horsetrader, in fact, enjoyed a protection which no court of law could offer...
...What's all this monkey-business in fine type anyway...
...usually egged the warriors on...
...Bigness Takes Oyer In the old days human need dictated the production of goods...
...advised the youth who was learning the art...
...Contracts, always running for limited times, were constantly expiring and their places were taken by other contracts freshly suited to circumstances which had altered...
...He owns or leases his place of business...
...I didn't go there because I knew exactly what I should find...
...It knew its horseflesh...
...It took me a few minutes to spell out a rather obvious meaning...
...Without A Voice By this time Old Horse-Trader has his somewhat rusty craft in grand working order—and I don't want to let him down...
...The dealer's place of business, the layout of his show rooms, his ads in the local papers are matters beyond his control...
...In a single block a score of trades were always under way...
...But dominion does not stop here...
...was discriminatingly vocal...
...But, when times are good, he makes money and lingers to gather in the harvest...
...we are, under the fiction of contract, forced to deal...
...an intricate network of contracts would do the work better than an agency of public control...

Vol. 8 • October 1944 • No. 41


 
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