formation we have regarding prices would lead us to think that coffee, tea, molasses, rice, prunes, salt beef or pork, etc., have not risen in price since 1907 as did sirloin, pork chops, or strictly fresh eggs, i. e., that the omitted articles surely have not risen since 1907 at a greater rate than did the articles on the new list. If we are safe in making this guess-that omitted articles have not risen at a greater rate-we are afforded a convenient and, I think, not inaccurate method of estimating the course of the prices of the 30 articles. If the new series and the relative prices of the omitted articles are to continue their parallel course, the series representing the 30 articles must keep its intermediate position. So by continuing the curve representing the old series in a course parallel to that of the new series we should have a pretty close estimate of its true course. And, although this curve represents no actual data, I am inclined to believe that it is closer to the truth than the new series. By extending the curve on Chart II and using, in conjunction with Dr. Rubinow's wage series, the figures thus derived, it has been possible, in Table 5, to compute an index series representing real wages from 1890 to 1912. Table 6 and Chart III show the recent course of real weekly wages as computed by Dr. Rubinow and as I have computed them.13

It is evident that the results thus obtained do not present so gloomy a picture as Dr. Rubinow's. Nevertheless, it is quite clear that, even if we discard altogether the more radical new series and depend upon a more conservative series thus obtained, there is nothing in the facts-as far as these figures may be taken as representative of the facts-which can give the wage-worker cause for rejoicing, and that the doctrine so popular in certain quarters that while the rich have grown rapidly richer in recent years the poor have also steadily risen in the scale of economic welfare, has no foundation in fact.

Columbia University.

F. W. JONES.

13 The real hourly wage of my results shows approximately the same divergences from Dr. Rubinow's figures as does the real weekly wage. Therefore the series have not been plotted.

OPEN PRICE ASSOCIATIONS1

Legalized price maintenance has been extensively advocated among manufacturers for avoiding the evils of price cutting upon identified products by jobbers and retailers. Another widely different plan for stabilizing prices also of unidentified products among manufacturers themselves is being received with increasing favor. Although in a number of respects the motives are not the same, the chief difference between the two policies lies in the attitude toward future prices. Price maintenance proposes fixed prices for future transactions; the new so-called "open price" policy proposes nothing with respect to prices except that they shall be made "intelligently." Each manufacturer fixes his own selling price as he sees fit and changes it when he so desires; but in fixing prices he should have the fullest and most accurate knowledge of market conditions, of what other firms in the same line are doing, in price, in tonnage, stocks, shipments, rebates, discounts, and the like. The underlying theory is that instability and disorganization of business are due chiefly to ignorance or misinformation as to actual market conditions and as to costs of manufactur

1 The data upon open price associations upon which the following article is based have been secured from documentary material and from personal interviews and personal correspondence with officers and members of these organizations. A small amount of material may be secured from trade journals and other sources, to some of which reference is made below.

2 The terms "open price," "open price policy," and "open price association" were first given prominence in the year 1912 in a book entitled The New Competition, by Arthur Jerome Eddy, a Chicago lawyer. The greater part of the work is occupied by a description of present-day competitive methods, but it also contains (chs. 9 and 10) a constructive plan for a type of association which was designed to eliminate some of the evils and wastes of competition. The book has been read by increasing numbers of business men, who generally credit Mr. Eddy with originating the plan. Mr. Eddy is at present legal counsel for a number of these organizations.

Clark McKercher, in Transactions of the National Association of Cotton Manufacturers, No. 98, 1915, p. 178. Mr. Eddy defines the "open" prices as “a price that is open and aboveboard, that is known both to competitors and customers, that is marked wherever practicable in plain figures on every article produced, that is accurately printed in every price list issued—a price about which there is no secrecy, no evasions, no preferences. In contract work it means that every bid made and every modification thereof shall be known to every competitor for the order; it means that even the cunning and unscrupulous competitor may have this information." The New Competition, P. 110.

ing and marketing. Accurate knowledge upon these matters is declared to be a sufficient remedy.*

To provide this information most efficiently, coöperation among concerns engaged in the same line of business has been found necessary. Open price associations which adhere strictly to the policy aim simply to provide the machinery for the collection and dissemination of the desired knowledge concerning market conditions. They may be described as associations of competitors formed for the purpose of improving business conditions through the interchange of information and opinion as to prices and other factors relating to business transacted."

Spread of Open Price Associations

The movement toward the formation of open price associations has taken hold in all parts of the United States and in widely different industries. In the textile branch, among the first to adopt the plan were about thirty-five of the important finishing firms (bleachers, dyers, and printers) who early in 1914 united to form the National Association of Finishers of Cotton Fabrics." Its success has stimulated the formation of similar associations among textile manufacturers, such as the Gingham Association, formed in the fall of 1915 by the leading gingham mills; and local associations of mill owners at Fall River and New Bedford, Massachusetts. Knit goods manufacturers have recently united and the matter has been actively agitated among white goods bleacheries, silk goods manufacturers, and among mill owners in Southern cotton centers. Interest in textile circles became so active that

4"Knowledge regarding bids and prices actually made is all that is necessary to keep prices at reasonably stable and normal levels." Ibid., p. 121.

5 In the following, the term "open price association" will be applied to all organizations of competitors which have adopted more or less fully open price methods.

• Estimates as to the numbers of open price associations in operation vary so widely-from twenty to "hundreds"-as to be practically worthless. It seems that the lower estimate is somewhat too conservative. It is true that the number of associations which have adopted the plan in its entirety is not large, and of these but few are of national importance. Cf. New York Journal of Commerce and Commercial Bulletin, Nov. 12, 1915.

7 This association was organized in close conformity with the plan proposed

by Mr. Eddy, who has been its counsel since organization.

8 Cf. Journal of Commerce, Oct. 30, 1915; Feb. 29, 1916; Apr. 3, 1916; May 27, 1916.

9 Ibid., Jan. 4, 1916.

the largest trade organization, the National Association of Cotton Manufacturers, took up the study of open price methods.10 As a result of this investigation, a project is now under consideration for a reorganization of the National Association which will involve an extension of its activities so as to include a bureau for the interchange of market and price information and opinion which is the essence of open price policy. Among manufacturers of woolens and worsteds agitation extending over many months bore fruit in the formation of the Woolen Goods Exchange. Though at present including only fourteen firms, some of these are the largest in the United States.11 The Woolen Goods Exchange was organized under the auspices of the National Association of Wool Manufacturers, the secretary-treasurer of that trade organization being also the secretary of the exchange.

In the lumber industry, the adoption of open price methods is being pushed. The Southern Pine Association, the successor to the Southern Pine Manufacturers Association, declared illegal by a Missouri supreme court decision, is considering an extension of its work so as to place it upon an open price basis.12 Another trade organization, the Western Pine Manufacturers, has a department known as the Information Bureau which has carried on open price work since 1912. Affiliation with this particular de

10 Cf. ibid., Nov. 11, 12 and 15, 1915; Oct. 30, 1915; and especially Jan. 4, 1916. Also Transactions of the National Association of Cotton Manufacturers, No. 98, 1915, pp. 176 et seq.

11 The American Woolen Company and the Cleveland Worsted Mills Company are among the members. There are several other exchanges operating along lines similar to the Woolen Goods Exchange. Among them are: Pipe Fittings and Valve Exchange, Brass and Copper Statistical Exchange, Range Boiler Exchange, Fine Cotton Goods Exchange, Tubular Plumbing Goods Exchange, Meter Manufacturers' Exchange, National Gas Appliance Manufacturers' Exchange, Rubber Association, Druggist Sundries Division.

12 One of the recent recommendations of the board of directors of the Southern Pine Association was that the association create a committee of sales to consist of twenty-five members and to have a permanent salaried secretary to gather information as to actual sales and selling prices, this information to be published in the association's weekly bulletin. The recommendation suggested that members pledge themselves to make daily reports to the secretary of the committee showing an accurate abstract of actual sales, specifying quantities, prices, grades, and rates of freight. Southern Lumberman, Feb. 10, 1917, p. 27; American Lumberman, Feb. 10, 1917, p. 420. Cf. also report of Committee in Accounting and Statistics, Southern Lumberman, Feb. 17, 1917, p. 27. For purposes of association, cf. American Lumberman, Dec. 5, 1914,

partment is open only to members of the trade association, but is optional with them; nevertheless, practically all of the larger mills and many of the smaller have joined. The most notable example of open price associations among lumber manufacturers is furnished by the Hardwood Manufacturers Association of America.13 Originally merely a trade association, it has recently adopted the open price plan in its entirety and began operating under it March 1, 1917. It is intended that eventually all hardwoods shall be included, but in the beginning its operation is to be confined to oak, the lumber most commonly produced by members.11

In the steel, iron, and hardware business, one of the oldest open price associations and one which has received considerable publicity is the Bridge Builders' and Structural Society,15 embracing many of the large iron and steel interests not identified with the Steel Corporation. It has been in successful operation since May, 1911, and at the outset included twenty-five firms. Another open price organization, the Associated Metal Lath Manufacturers, consists of eight firms representing about ninety per cent of the metal lath production of the country. Manufacturers of tacks are organized to carry out open price methods in the National Association of Tack Manufacturers. The Pressed Metal Association comprises twelve of the largest firms manufacturing metal stampings. The National Association of Sheet and Tin Plate Manufacturers, the Manganese Steel Founders Society, and the National

13 Cf. Draft of Proposed Plan for Establishing Open Competition among Hardwood Manufacturers. Prepared by a Committee Appointed by the Board of Governors of the Hardwood Manufacturers Association on Dec. 15, 1916. Approved by the Board of Governors, Jan. 29, 1917. (Reprinted in American Lumberman, Feb. 3, 1917, pp. 42-43; see also Southern Lumberman, Feb. 3, 1917, pp. 23 et seq.)

14 The Gum Lumber Manufacturers Association issues a series of sales reports upon the basis of reports made by members, an approach toward open price methods. Southern Lumberman, Jan. 27, 1917, p. 34; St. Louis Lumberman, Feb. 1, 1917, p. 68.

The West Coast Lumbermen's Association added during 1916 a statistical bureau which issues information upon trade conditions based upon reports received currently from about 125 members. American Lumberman, Feb. 3, 1917, p. 40.

The Oak Manufacturers Association is also considering a reporting plan. St. Louis Lumberman, Feb. 1, 1917.

15 Upon the Bridge Builders' and Structural Society, cf. Journal of Commerce, Nov. 11, 1915. Also testimony of John Sterling Dean, in the case United States v. the U. S. Steel Corporation and others. District Court of U. S., New Jersey district. Transcript of record, vol. II, pp. 797 et seq.