RICHMOND, VIRGINIA 15 A WOLESALS TRADE CENTfilt AN ANA I.IS IS OF ITS DEVELOPMENT AND TUMSBTT POSITION

DifiartatAaA

Pro o on tod in Purtlo.1 Fulfill— nt of tho Roquiro— nto for tho Dogroo Doctor of Pfcilooophy in tho

Oruduoto Sohool of Tho Ohio St*to Qhivoroity

Prodoriok Byoro Mlllor, B. S., N, B. A* Tho Ohio Stoto VhiToroitp

1992

Approrod by t

Adrioor

iContents

Chapter PegsI Introduction • • • • • • • • • • • 1lMk|ro«id for tho Study » • • • • • • • 1Soleotisn of llohanrnl for tho Cooo Study • • • • I

Objectives of tho S t u d y ......................... 9Proooduroo Pollened • 10II Tho Developnent of Wholesaling In Riohaond from 1609 to

IS 6 5 ...............................................12Tho Pro Revolutionary Period • • • • • * • 13Developnent of larly laws • * * • • • 15Tho Sarly Morohonto • • • • • • • • 17Colonial UAbsood • • * * » • • • 21Orovth During tho Vinotoonth Century • • • • • 26Tho Jaaes Diver and huudu Canal • . « * 28Tho Doolino of Diroot Trade • 31Riohaond Juot Prior to the Civil Her • • • • • 39Sv a r y • • • • • • • • * • • • 12

III 11ohnnd<e Vholeoalo Trade Developnent, IS65-1926 • • 15Sarly Attests to Protect «^d Expand Riohaond's TradingInfluence, 1680-19^................................ 16Sarly Statietloal Data • • • » • « • ISTho Period of Qreatest Expansion, 1890-1920 • • • 50Capital Ifcvestaoats in Riehaond lotablishaants * 56Chaageo in tho C— position of Sales • • • • 56General Develepneata ...................... 60ReJJtoirsaaaut of Paros • • • • • • » 62Cyclical Flnotuatlons • • • • • • • 63Analysis of Selected Linos • • • • • • • 66Cyclical Pluotuatlans...................... 63Devolopnents During tho Poo tsar Period, 1921*1928 • 66Susary • • • • * • • • • • • • 66

IT Devolopuento in the Riehaond Wholesale Ifcrket Slnoe 1929 91Analysis By Typo of Operation • • • • • • 91Riehaond Sales As a Proportion of Total Sales • 107Analysis By Lines « • • • • • • • • 112Orovth in Physioal Tolsas of Sales * • • • 113Ceuparieon of Riehaond Sales With Virginia and

United States Sales » • • • • • • 111Riehaond Sales per #1,000 Virginia and UnitedStates Salas • • • • • • • • • 117

Coots of Operation • • • • • • • • • 122Sales per Wholesale Establishnsnt * • • • • 127Swnary and Conclusions • • • • • • • • 131

uGhaptor I Jhgai

V Tho bput of Traaopo^tatioa on tha Dovalopaant ofttolnwl u a Ukola Uatar Transportation Bailraad K n l i p w t TruiyortailM Batoa Traok Traaapartatlaa * • • • • • « • • • 196

157

>ala Trada Caatar • • • • • 134• . 136. . 139. . 141

TI Tha Tantlao af llnhahnd Mholaaala Batabliahnanta . • 160Tha Davalapanat of plakiwid Taxation • . • * * 161Fraaant Lionno# T a x a a . 166Attaapto to Ohanga Existing Tax Lav • « • • 167Analysis af Conpatltiva Ihpaot of Hohnraid and Virginia tholssala Lloanaa Tax • • • • • • • • • 166Bslatlanshlp of Tmxaa to Vow Ineoaa * . • . 170

Stata and Laca|L Taxaa tslatlva to 8alas • • • 174Conolaalaaa • • • • • • • • • • • 176

Til A Comparison of tiohmond, Virginia, and Charlotte, KarthCarolina, aa Wbolaaals Trada Gantara • • • • • 163Baaia B a t a .......................................163Ha t i m y ................... 167Tha Charlotte Basalts............................. 167Tha Klohanod t a s n l t * ............................. 191Oanolnalona ......................... 193

196V m Mwmmrj Coao las ions and Bin— wnrtatlona.......... 201

Tha Blatorlaal Bsvalaj— at « • • * • • • • 201Fra dltll Har Utlvitlas................... 201Orovth and Baal Ina Aftor tha Civil War • • • 203Cants— arary Bavalap— nts, 1929-1990 . 207

Qanaral Cano laa tana ......................... 210Application to tiehpoedla Fatnra aa a Vholasalo TradaGantar t • 216

taa— indatiana... ..............................219Appendix ................. 220llhliagraphy • • ..................................... 237Antofcisgraphy . . • .................................. 243

illM I m

Tabln Pap*1 Tonaago KMtlpta aad Katii«m , Jama River and Kanawha

Qaanl, 1441-1460................................... 302 NnralaAt U m t l M r a — lt)l • • • • • • 34). tiptrta and bperta af Riohaond, 1454-1455 • • • 344 Oanarolal Statintioo, Riohaond, Tirginla., 1454 , , 405 Prleea for Selected Cwaodltlea — Riohaond, Virginia andRow York, I. Y........................................ 414 Index of Riohaond Jobbing Salon, 1490-1920 • • • 517 Salon Par Dollar Capital Ihrootaont • • , . • 574 Riohaond Salon aad Total Ohited Staton Saloo la a Percent of

Troad, 1490—1915 • • • • • • • • 449 IMeaoa of Riohaond Jobboro* Saloo by So loo tod Llnea • 4414 Average daaaal Iaeroaae in Troad of tho Phjaioal Tolnao of

Saloo, 2490-0913 7411 Riohaond Saloo par $1,000 Uaitod Statoa Saloo, 1490-1920 • 7612 Riohaond Jobbor Saloo aad V. S. Saloo la Poroont of Troad

by So loo tod Liana, 1490-1915.......................... 6413 Riohaond Jobbing Saloa by Solootod Liana, 1921^1929 • • 471A Riohaond Vholoaalo Ratahliahaonta and Saloa by Typo of

Operation, 1929-1944 9515 Virginia Rboloaalo latabllahaanta aad Saloa by Typo of

Operation, 1929-1944 9714 laltod Statoa Wholenolo Ratahliahaonta and Saloa by Typo

of Operation 1929-1944 9417 Proportion of Total Saloa by Typo of Operation Riohaond,

Tirginla, aad tho Ohlted Statoa, 1929-1944 100

ItTable PagaIB Sales of Merchant Wholesalers As Proportion of Total Sales

for Be 1m ted Cities, 1929-194*........................10119 Tee res so In Sales by Type of Operation Rlohnond, Virginia,

aad the Halted States, 1929-194*..................... 10620 Rlshnond Sales per $1,000 Virginia aad ff* S, »• •• 1/29-194* 10*21 Sales ef Itshnend latabllshnents per $1,000 Virginia and

Putted States Sales by Type ef Operation, 1929-194* • 10922 Sales of Rlehnoad Wholesalers by Selested Lines, 1929-194* 11223 The Physical Velnae ef Sales ef Rlohnond Wholesalers by

Seleeted Lines, 1929-194* 11424- Sales Volane ef Merchant Wholesalers, Virginia and United

States, 1929-194*.................................. 11525 Sales ef Rlohnond Wholesalers per $1,000 Virginia Sales,

1929-194* 11926 Seles ef Rlshnond Wholesalers per $1,000 Pelted States

Sales, 1929-194*.................................. 11927 Sales ef Merchant Wholesale Grocery Ratabllshnsnts In Re­

lation to Tetal Grocery Sales, Rlehnonl, 1929-194* . 1212S Rlshnond Whelesale Setabl 1 shnswts1 Payroll Expense by Type

ef Operation, 1 9 2 9 - 1 9 4 * ......................... 12329 Ihyroll Expense ef Virginia Wholesale Sstabllahnsnts by

Type ef Operatise, 1929-194* • 12430 fhyrell Expense ef Bhlted States Whelesale Bstabllshaents

by Type ef Operatiea, 1929-194* • • • • • 12531 Sales Per IstabUsheent, by Type of Operation, Rlohnond,

Virginia, and Whited States, 1929*194* • • • * 12*32 Sales Par Merchant Wholesale Sstabllshnent Rlohnond,

Virginia, and Whited States, 1929-194* • • • • 13033 Tannage ef Rlshnond Pert, 1940-1950 • « . • 13*34 State and Leoal Thane RelatlTs to Wet Inoone Per Selected

Wholesale lines, 1949 • • • • * • « 172

fahlo35 Iteto tad Looal Tu n lalttivt to Solo# for Solootod Hholo-

oalo I.laos, 1549...................................94 Taxoo Rolatlro to lot Tsssno for Solootod Closalfioatlona

Baaod an lot floloo u l At o m Profit.................37 Hholooalo Solo* U Rlohaoad u d Charlotte, 1929*1944 • .94 Hholooalo Solos by Typo of Oporotloo, Chariot to, 1995-1944 ,Appoadix99 Solos of ItnUod Jshhora, 1441-1920 • * , , ,40 Capital Inrssteont Riohaond Jstbara, 1447-1920 . •41 Halted Statoa Nholosalo Cooaoditj Prios Indox aad Prodootloa

ladsx, 1490-1923.................................42 Hholooalo Csuudity Frloo Iadoxos, Solootod Linos, 1490-192043 Tolas of felted Statos Oatpot of Plnlshod Canodltlos Por

Daaostlo CsooNsptlsa la Qvroot Prints, 1490-1920 . ,44 Hholooalo Prios Indox, Solootod Linos, 1921-1929 • •49 Hholooalo Couudltp Pries Indox Halted States, ill CsMsodi-

tios aad Solootod Osaaodltlos, 1929-1944 • • • •44 Olasoifioatloo of Hholooalo Nsrohants Por Pvrposos of Tax

Stedp...........................................47 State aad Lsoal Taxos Paid by Aa Arora|» Hholosalor If

Lsoatsd la Solootod Cltlos, by Solootod Linos, 1949 • •

Pt«a

175

140145144

221222

223224

225 224

227

224

229

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m a i t n t i a i

niaotratloa1 Trood Iji tho Physical 161mm1*90-1920 . •f Saloa of Rlohaoad Jobbers

532 Trtri la Riohaond Jobbing Saloo Aa a Ratio of Total Hal tod

3 Riohaond Jobber Saloo by Lines, U90-1520 • • • • 99A Poroontago Rorlatloa Froa Troad of Jobbing Saloa la Riohaond

$ Troad la tho Physical Toloaa of Saloa of Rlohaoad QroeeryJobbers, 1090-1926 • • • * • • • • 7 0

6 Troad la tho Physical Yolaao of Saloa of Riohaond Drag Jobbora 717 Troad la tho Fhyaloal Volvo of Saloa of Rlohaoad Dry QoadaJobbora, 1 * 9 0 - 0 9 2 0 ................................. 72S Troad la tho Physical Volvo of Saloa of Rlohaoad Bard war*

Jobbora, 109^192) • • • .................... 739 Troad la Saloo of Rlnhanart Orooery Jobbora Par $1,000 0* S.

Qrooory Saloo, 1*90-1915 • • • • • • • 7 710 Troad la Saloa of Rlohaoad Drag Jobbora Por $1,000 V. S. Drag

Saloo, 1*99-1915......................................7811 Troad la Saloo of Rlohaoad Dry Qoodo Jobbora Por $1,000 U. S.

Dry Roods Saloo, 1*90-4915 • • • • • • • 7 912 Troad la Saloo of Rlohaoad Rardwaxa Jobbora Por $1,000 9. S.lardsare Saloa, 1*90 1915 • • • • • • • * 013 Csapeeition of Total Wholesale Saloo by Typo of Oporatlaa,Rlohaoad, Tirginla, Raitod 8 to too, 1929*194* • • • 10514 Pbreent Ohaago 194* Saloa Proa 1929 Saloo Ry SA loo tod Linos,Rlohaoad, Tirginla, Oaited Statoa • • • • • 11*15 Soxnal Trading Aroa Riohaond Uholoaalo Sotabliafaaonto, 1900 142

Statoa Saloo, 1*90-1920 55

aad Total W. S. Saloo, 1*90-1915 • 65

▼11niutratlaa Ptg*16 k n i l Tradtnf A m Rlohmnd Ikolawli biftbllduMnti, 1921 U717 B o m l Trading A m Rlohmond Vholaaal* letabllahBenta, 193$ 153Appaadlx

Cararia* Lattar Far I n n j Qaaatlaanalra • • • . 230Q m i l M a t l M M t r I * * . . * . . . 2319MillMiilN M b t r 2 .................................. 234

cum* iIhtrod— tl—

liiV|r<«rf f«r Tha Stady

•Tha flald af *>1— 1111, — Ilka tiut af ratailing, la - ip!*— i far tha Hal tad a— bar af books or — agrapha la lta II tom­tom That thla condition axlats la wall known by all aha ha an it- taaptii to atady ar oandnat raaaaroh la thla flald af ae— in aatlrlty. It la tna la spita af tha fhot that *ialaaaltag haa axlatad la aa fam ar anathar slnoa tha start af raoardad hlatary, aad at tha jrasant tlaa tha vahai af *ala«ala trada la tha Ultad Statoa la appraxlaataly >00 billions af dallara par aaa— la tha hraad a— aa aad abawt $195 hlllloaa according to tha llaltatlaaa lapoaad far aaaaaa parpaaaa*2

Thla atady la aa att— pt to widen tha knawladga af tha nb> Jaot throw gh aaalyala af daralep— ata la tha flald af ifcalasallag aa thay ha to tahaa plaea la Hahannd, Virginia, la ardor to datamlaa tha fhatars which aaaaa tho davalape— t, growth aad daollaa af a whalaaala tradlag saatar. la aa way ahaald tha atady ha aoaaldarad aa fiaal or

L, T. M. Saak— aad I. Ugla, feglftttllAd «■$Pmntlna. (*aw larks Tha Una Id Praaa Caapaay, Bow* Mating, !*▼.1951), p.

2. Cana ms af B— laaast 194$. Thaaa flgvrai rapraa— t a m a l aalaa la 194$ i*alaaala aatahllab— ata aad analwda aalaa af aaamfaa- trnrara, athar thaa thramgh thalr own whalaaala hraaahaa, aad aalaa af ohala atara warahaaaaa*

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3defined to include all activities Involved In the purchase or nale of goods at wholesale regardless of the possession of title to the goods pmmoh&aed or sold. In addition to the activities of the regular and traditional Merchant wholesaler, the advocates of this concept would Include sales of agents and brokers, inter*-institutional sales or transfers, and all sales of manufacturers at other than retail. To ■assure the sales volune according to this concept, one would have to include sales of manufacturers to Wholesalers and to all other non- retail buyers, including other nanufacturers, as well as of all middle— ■an to one another, to institutional or industrial users, and to re­tailers.

In contrast to the broad and narrow concepts of wholesaling as outlined above, the Bureau of Census has adopted a middle point of view which defines wholesaling as embracing the activities of ail places of bus ins a a operating In a wholesale manner as distinguished from those business firms which operate as manufacturing, retail or service estab­lishments. The Bureau of the Census has developed this concept as a result of practical statistical considerations in the enumeration and presentation of results. It is almost impossible to use the broad con­cept since the censuses are taken on an establishment basis and are therefore restricted to specialised wholesaling establishments. It would be impracticable, also, for the oensus to be limited to the regup* lar service wholesaler or any other single type because there exists no clearout functional division between different types of wholesale organizations.

4Although the broad concept allows one to davalop a mora com-

plata plotura of wholesaling aotivitiea, tha quantitative data avali­able are to a great degree those oolleoted by the Bureau of the Census under the middle oonoept. It is this middle concept, therefore, which must be used largely in this thesis.Selection of R i For the Case study

There are several reasons for the selection of Richmond, Virginia as the area for this study. One becomes evident from the fol— lowing quotation i

Fforte Charles being at the head of navigation, soon became the trading place. Hera the boats met the wagoners and rollers from the upper country. The settlement began to grow and Captain Byrd erected a warehouse on Shoocoe creek

Students of American history recognise Fort Charles as an early militaryoutpost of the Virginia Colony located in the area which is now Knownas Richmond, Virginia. Students of marketing recognise the erection ofa warehouse at the point at which boats meet wagons from the outeroountry as a step in the establishment of a wholesale trading center.Although no definite date can be assigned to the construction of thiswarehouse, it is known to have been established between 1679, whenCaptain Byrd was granted certain "privileges'* by the Assembly, and hisdeath on Deo ember 2, 1704* It is certain, then, that Richmond has hadan experience of no less than 245 years as a wholesale trading centerand, as such, constitutes one of the oldest centers on the continent.

4* A. Christian, R 1 nh»r>pH Her Fast and Present. (Rich­mond, Virginia i L. H. Jenkins, 1912), p. 4.

5The threads of early Virginia and Rlohnond history are closely

intertwined with both the pre- and post—revolutionary political and economic history of the United States* Of greater significance is the faot that the oolonles to the north were established primarily by groups seeking religious and political freedom, while Virgin La was founded by a oonmerclal enterprise engaged in activities which would be classified as wholesaling in nature.

The hard rock of economic activity upon which the city has been built and its two and one-4ialf centuries of experience as a whole­sale trading center make Richmond an ideal case study for a better under standing of the factors Which contribute to the growth and decline as well as the operations of a wholesale trading center, even though such faotors are not oommon to all other cities of the country.

Among other characteristics peculiar to Riahmond which make such a study feasible is the presence of an historically minded society* Such an interest in history is a logical result of the roles played by Riohaond and Virginia in the history of the United States, the many meaorable events that took place within their environs, and the large number of citisens who can trace their ancestry back to the participants in the events* As a result there are many historical data which have been accumulated by the Virginia State Library (founded in 1326), the Virginia Historical Society, and the Valentine Museum* Files of news­papers are available beginning with is sties of the V Irvin la Gazette for 1734* Although there exists a plethora of historical data,, they are mainly qualitative in nature* It is regrettable that the culture has

6Wtn suoh that iWdMta w n not i m Inclined to roeognlao tho lapertonoo of huiMii oetlTltloo ui to roaord definitive aooeoats of onsh nativities. This look is especially true for wholesaling nativities. Quantitative do to are available on noanfno tnr lac MTi-oultural activities for anoh oorllor periods than lo troo for either wholesaling or retailing.

In additional advantage of Riehnond oo tho loooo for o oooo study ■ tons from tho foot that it has been subject to tho various foroos which oanoo wholesale trading o on tors to oozy In rs la tiro In- pertaaoe. There oaa ho no question hot that Rlohnond ni ono of tho t— a<»g wholesale o on tors during tho oorllor days of tho Rspublie.Over tho years it has not nalntalaod Its position relative to onoh o on tors os Boston, Rov Tort, Philadelphia, and Baltinore. In foot, thoro nro othor oltios currently of greater Inportanoe which voro un­known at tho tins Rlohnond was a leader. Chicago, St. Louis, and Olnolanati aro emnplee of tho latter. Tho doollno In relative lnportaaoo has oontlnnod Into rooont years. While Rlohnond ronkod 35th In voImo aasng wholesale cantors In 1939,* It was In 13rd posi­tion In 19U.4

Ushnsnd and tho aroa served by It, prlnarlly tho stats of

5. Sixteenth Cons no of tho ftnited States * 1910, Census of Businesst 1939f Tel. II n a O M l S XlliRt (Rnshingten, V. S. Govera- nont Pristine tffloo), pp. M .

4* Consno of BaalnessI 19a, tttOflRlft XSBdft. Uk Ettte fiOOllls (Shehingten, V. S. fl or s runs at Printing Bffloo),9* 3*

7Virginia and eastern North Carolina, have many of the rane social and economic factora that are generally characteristic of the United States as a whole. Although classified primarily as an agricultural state, Virginia always has had some manufacturing industry, and this has been increasing in relative importance in recent years. Its agri­culture runs the gamut of soil conditions as well as climatic condi­tions found in the United States as a whole, varying from sandy soil in the Tidewater area to the limestone and blue grass country in the val­ley and the Appalachian range. While certain of its crops, such as peanuts, cotton, and tobacco, are peculiar to the South, practically all crops raised throughout the country are also grown in Virginia. Manufacturing in the area ranges from heavy industry such ae shipbuild­ing to the production of consumer goods such as food and tobacco.

The final factor which makes Richmond a good setting for a oase study in wholesaling is found in its current position. As the capital of Virginia, Richmond is located at the falls of the James River, approximately ninety miles from its mouth. She is an in­dependent city? of approximately 240,000 population and ranks 45th in slse among the cities of the United States. Counting the surrounding counties of Henrico, Chesterfield, and Hanover, Richmond has a metro­politan population of 300,(XX). In addition to water transportation af­

7. Under Virginia laws the cities are not part of the county government units, but a n independent and far all practical purposes co-equal with the county unite. This affects, to a certain extent, the comparability of data oolleoted by the Bureau of the Census on a county basis and the structure of taxes as compared to other localities.

8forded by the river, Richmond Is served by six Class I railroads,** numerous public and contract motor carriers, and several airlines* The Fifth Federal Reserve District which covers Maryland, Washington, D.C., North and South Carolina, Virginia and most of West Virginia is center­ed in Richmond* Because of the diversity of business activities there is a well-balanced economy, which has remained somewhat more stable in Richmond than in the country as a whole. Based on Uje period 192 —19^8, Richmond's level of activity does not rise quite as far as that for the rest of the country during periods of prosperity, and during peri nos of depression it does not decline as much. The manufacturing industry of the city la heavily weighted by consumer goads rather than industrial goods* Tobacco products are the most important manufacture, and employ­ment in these plants comprises 8*6 percent of total non-agrlcultura1 and non^iomestlc employment and 29*8 percent of ail raanufaeturing em­ployment,^

Although classed as a Southern city, primarily because of the part played in the War Between the States, Richmond differs very little from her neighbors to the north in many respects. For many years she has been included with the North for purposes of railroad rates* Proximity to Washington, D. C., as well as other urban centers of the

8, The railroads serving Richmond arei Richmond, Fredericksburg and Potomac Railroad, Seaboard Airline Railway, Chesa­peake and Ohio Railroad, Southern Railway, Atlantic Coast Line Rail­road and the Norfolk and Western Railroad.

9« Unpublished data provided by Richmond Chamber of Commerce*

9North, has influenced her economics as well as her culture and ways of life. It Is interesting to note that an arc 500 miles from Richmond would Include such northern cities as Boston, Buffalo, Cleveland, and Columbus, Ohio, while to the south the arc would include only such cities as Savannah, Charleston, Atlanta, and Knoxville. In other respects, Richmond is more like her neighbors to the south. The basic philosophy of more leisurely living, conservative business management, and political thinking are examples of the solid link with the South.

Objective a sL &S. SiUfiilIn making the case study of Richmond as a wholesale trade

center guidance was afforded by several objectives. Two basic questions have been uppermost throughout the research: (l) Why hasRichmond developed as it has as a wholesale trade center? and (2) What promises to be the future for this marketing center? These two ques­tions have been translated into specific objectives which may be stated as follows:

1* To discover the basic factors which have contributed to the development of Richmond as a wholesale trade center. It is com­monly accepted that such factors as geographic location, availability of transportation facilities, transportation rates, size and growth of population, and income levels, all influence the development of whole­sale trade centers. To what extent are these valid and to what extent are less obvious factors of importance?

2* To discover the basic principles or factors idiich affect the growth and decline of wholesale centers. To what extent can the

10factors whicn influenced Richmond's development be established as basin

and hence generally applicable? Th Ls objective is concerned with the

causes of both growth and decline of exist Log centers rattier Vna i the

factors which might cause the esbablishment of such a center,

3, To gather and examine quantitative data relative to

growth and position of Richmond as a wholesale trade center, quantita­

tive data not only are of value for measurement purposes, but also in­

dicate explanations or reasons. They can be used for analytical pur­

poses and as indicators which suggest further diagnostic study. For

purposes of comparison, quantitative data for other areas are necessary.

4« To determine and eva uate sign if Leant trens within tha

wholesaling structure in Richmond, That wholesaling is continuaily in

a state of flux with new institutions and n»jw procedures replacing

older institutions and techniques is a widely accepted fact. "Whole­

saling ,«• is dynamic, constantly changing in response to btsic changes

in economic and political conditions,"^ It is of importance to dis­

cover if tha constant changing foliows any particular pattern under

given conditions and is therefore predictable if the conditions are

known.

Procedures Followed la IhSL SJdldZIn preparing tlie plans for this study it was recognized that

two basic types of information were needed if the true picture of Rich­

mond as a wholesale trade center was to be obtained, namely, qualitative

information and quantitative data. The qualitative material is of

10, Beckman and Engle, ou. c1t., p. 86.

11▼mine In describing the market, the ea tab] ieiunen te t the fiaictLons of both markets and establishments, and in determining the various factors which have influenced Richmond's development and present situation as a wholesale trade center. Quantitative data constitute facts which can be secured by counting. They indicate what the picture is at a given time and suggest answers to the question, "Why?" The two must be used together because one complements the other.

Both primary and secondary sources have been used for each class of data. Host of the secondary data were found in the VirginLa State Library, the Library of the Virginia Historical Society, the Riohmond Chamber of Comeroe (which has complete annual reports and re­cords since 1367), and the library of the University of Richmond, all located in Richmond, as well as the Library of Congress In Washington,D. C. Quantitative data for the period 1929—1943 were taken from re­ports of the Bureau of the Census. Special emphasis was placed upon the reports of the 1929 Census of Distribution, the 1935 Census of Distribu­tion, the 1939 Census of Business and the 1943 Census of Business. Ad­ditional quantitative data have been secured from the Virginia Depart­ment of Taxation and from the License Bureau of the City of Richmond.

No attempt was made to secure primary data relative to characteristics covered by the 1943 Census of Business. A survey was conducted, however, to determine as far as possible the causes for the change in relative positions of Richmond and Charlotte, North Carolina, as wholesale trade oenters. In addition, a large number of interviews have been held with various individuals engaged In wholesaling in Richmond.

CHAPfHl IITh« Development of Wholesaling In Richmond

Prom 1609 to 1865

Thla is to give Ho tics, That an tho North bide of James River, near the Uppermost Landing, and a little below tha Falls, la lately laid off by tejor Mayo, a Town, called Richmond, with Streets 65 Feet wide, in a pleasant and healthy situation, and well Supply'd with Springs of good water* It lies near the Publick Ware­house at Shoccoes, and in the midst of great Quantities of Grain, and all kinds of Provisions* Tne Lots will be granted in Fee-Simple, on condition only of buiidi ig a House in Three fears Time, of 2U 1 16 Feet, fronting within 5 Feet of the Street* The Lots to be rated ac­cording to the Convenience of their Situation, and to be sold after this April General Court, by me,

William Byrd^Although thla advertisement is indicative of the establish­

ment of Richmond as a town, a summary of colonial events prior to 1737 is required if one is to have a complete understanding of the develop­ments which led to this action by William Byrd* History has dealt with Virginia only as a colony, rather than as an area composed of cities, towns, and villages* Although certain events are chronicled as having been peculiar to Richmond alone, most factual material deals with events in the colony regardless of particular locations* However, economic conditions recorded for the colony prevailed in Richmond and since many

1* Advertisement in The YJUQKJUiUA. Gaaette, 36, (April 15-22,1737).

12

13of these factors influenced the development of RLchmond, it becomes pertinent to discuss them*

The Pre-Revolutionary Period Virginia was founded in 1609 by representatives of the Virginia

Coeqmny of London* In form, as well as in purpose , the Virginia Companyof London was a commercial organization which had as its primary purposethe accumulation of wealth through the discovery of precious metals, as shown belowi

The most common error in writing the history ofthe Virginia Company has been a failure to understandthe fundamental character of that corporation* What­ever else may have entered into the activities of the company, it was primarily a business organization with large sums of capital invested by adventurers whose chief interest lay in the returns expected from their investment* The most experienced and at the same time the most substantial of their number were London merchants.

The colonization of the Richmond area took place in Septen±>er, 1609, when Captain John Smith sent Captain West with 120 men to establish a settlement at the falls of the James*3 "Thus the history of Richmond began just four weeks after the arrival of Englishmen at Jamestown."4 This settlement was destroyed in 1622* As was true of the entire Virginia colony, the territory was inhabited by Indians, and the chief, Powhatan, had his headquarters at the falls of the James. According to

2* W. F. Craven, Dissolution Virginia Company (NewYorkt Oxford University Press, 1932), pp* 24-25*

3. J* P. Little, Xttt Capital gf Ylfglfll** £c& ttlgtgrr (Richmonds HacFarlane and Ferguson, 1851), p* 19*

Ifery M. Stanard, f Ita People a id Its Story(Philadelphia> J* B. Lippincott Co., 1923), P» 3*

Hone authority this location was a center of trade among the Indians long before the white men saw the shores of the new world.5 jt a trading center because here the trails from North and South, East and West con­verged.

The successful cultivation of tobacco has been said to be the most Important economic development In the colony. The second moet im­portant economic event was the regular exchange of goods between the colonists and merchants in the mother country which began in October 1616 with the arrival of the Susan£ Prior to this time goods received from England wore kept in a common store under the supervision of ’•cape merchants" and were doled out as needed by the colonists. Tho Susan brought a cargo of manufactured articles or "necessary connnoditles" for which the planters bartered their tobacco crops with the merchant \ho came with the oargo. This marked the shift from a communal tyj-e of economy to one of individual initiative.

In 1644, the Assembly ordered the erection of Fort Charles at the Falla. "Among the gentlemen struggling to plant a settlement at the Falls was Colonel Thomas Stegg, a rioh merchant and owner of trading s h i p s . T h i s merchant was also the uncle of one William Byrd whose in­heritance, at the age of nineteen, of Colonel Stegg* s estate introduced

5« Little, o p . olt.. p. 17.6. M. P. Andrews, The £2Ul fl£ & Nation (New Yorki Charles

Scribner*s Sons, 1943)# 221.7. Stanard, ££• olt.f p. ID.

15into the political and eeonosd.c history of Riehaond ona of its an at famous families. la was tha oaaa of the previous attempt at settlement, Fort Charles did not long endure. The Assembly later advertised for oolonlsts to settle in the area, as an inducement offering them the lumber and nails in the fort.

XbC. QtXtififlMOl &£. Sfcrlv lawsDuring the first several decades of the colony the entire

economic effort was devoted to the raising and exportation of tobacco.As early as April,, 1637 the King sent a memorandum to the Governor and Council calling attention to

Hov little that colony hath advanced in Staple commodities fit for their own subsistence and cloth- ing ••• not being so provident as to plant c o m and grain sufficient for their support whereby they are brought into so great straights as they are forced to be supplied by the Indians, nay, even the Dutch and other strangers that take advantage of their necessities and make a pray of their tobacco.**

To remedy thla situation the king suggested that three definite stepsbe taken.*?

First, that they resolve what of good and merehantable they will undertake to send yearly to the Port of London, having relation to more staple and honorable commoditiesf nexte resolve what price and value peremptorily to set upon that so the poor­est of the plantations may live as well as the rich­est; and of some convenient place to bring the tobacoo to as to one of more appointed warehouses from whence it nay be carefully shipped aboard English Shipping.In addition to concern over the single-Kirop economy of the

8. The Virginia tfagaiino of history aaL Biography. October. 1901, p. 176.

9. Ibid.. p. 177.

1^colony and tho problems arising therefrom, there is evidence t.hn t Ute

lack of towna and villages wmp of some concern to those In the mother

land. Virginia had many miles of navigable rivers and streams alongwhich most of the plantations were located. Inasmuch as the planterswere the recipients of most of the goods imported and supplied the oneproduct exported, there was little need for towns. In his instructionsto Sir William Berkeley, the Governor of Virginia, the King ordered in1642, ,rThat Tradesmen and Handy Crafts be compelled to follow theirseveral Trades and occupations, and that ye drew into Towns. Again,the attempts to establish towns were not successful 'ind in 167B LordCulpeper proposed the foliowLng to tho Assembly*

That there be towns built on each great River if possible and in order thereunto that after sufficient notice to private warehouses and other conveniences, no ships whatsoever be permitted to load or unload but at the said places where towns are designated.^

As the historian little has stated*Virginia has been peculiarly exempt fran tho possession of large cities. The ready inter­course afforded by our rivers, and the immedi­ate sale of the tobacco raised on their banks, prevented the necessity of taking it to a city market} whatever was made being sold in the raw state, and no manufacturers, or place of manufacturing, existing in the colony} the trade too being in the hands of foreigners, all tended to encourage the existence of an agricul­tural community alone, and thus to forbid the building up of great cities. All the acts of

10. "Instructions to Berkeley, 1642", Virginia Historical Magazine. Vol. II, No. 3, January 1B95, p. 2£7.

U . "Proposals in Regard to Virginia", Virgin la Historical Magaziner Vol. XXV, No. 1, January 1917, p. 71.

17Assewbly and efforts of individuals and ow|Biles resulted only In villages and ports Of BhipBBBt.^

XhA k d z feaittliAs trade 4ml»ptd fcitwi tho oolsnjr and Qroat Britain , Moat

of it was hood Tod hy Scottish and &tgUsh norchants. Many of thooo ner- ohants wart represented In tho oolony hy factors, oither aa oalarlod aa- ployooa or on a oanission has is. Tho salaried factors wars usually paid straight wages on a yearly has Is and In nany oasos wars not colonists, hut young non who oano to thi oolony opoolfloally to fulfill that ftotttla* aad with tho latent of returning hens aftor a financial reserve had hoon aeowmlatod* Faotors who served as nlddlensn aro re— portod to hare opera tad on a oooBslssion of ton poroont on all sales and returns*^ Thooo early footers should not bo confused with factors as they exist In our present economy* Tho factors of oolonlal tines ap­pear to hare eporated pr Inertly aa do prosont day brokers rather than as flnanolal institutions whloh are now ref erred to as factors* Tho evidence Is insane Ins ive, but there are Indications that tho relation­ship botwooa tho Bifllth or Scottish norohant and tho oooodssion factor was of a continuous typo* looamao transportation by naans other than water was extroaely Halted, it waa accessary to saploy several factors In order to a ever the entire oolony* It Is Interesting to note that both tho King and Governor believed that towns resulted in wore orderly

12* Little, ft* ill*t P* 9*13. Xfe HUJJgg ISA Ihcx Callage frMrlif rl T 1905-06,

P* ®9*

Ifltrading and comeroa and that such town* could b* oraatad by decree. History indicataa that town* raault fro a tradav and no amount of lagia- lation will par ps eraata comsaroial o an tars. Rather ttoay rasult fro a tha intarplay oT economic foroaa whioh datamina tha location and as tab* llshmsnt of town* whan such town* will result in more affioiant commerce.

Tha town* of Virginia war* built up by tha tobacco trad a and slnoa tha trada was In tha hands of foreign asrchunts, thasa men, through thair agents, raally found ad tha towns and oities of tha Old

Dominion. "Wherever a aarkat was lika to ba found, thara they estab- liahad a trading post, built up warehouses, furnished stores with all

tha articles needed by tha wealthy and luxurious p l a n t e r s . " ^ These

■archant* had aany of tha characteristics of both wholesalers and re­tailors. Am wholesalers thay imported and exported in large quantities.

Thair domestic sales wars made at retail to ultimate consumers and at wholesale to smaller country trading posts or stores and to planters who could ba classified a* industrial purchasers whan thay bought the good* for use in connection with tha operation of the plantations.

Historically the merchant in Virginia has not occupied a very

axalted position insofar as publio esteem is concerned and vestiges of this attitude are evident today. This faot may well have had its origin in the operation* of the early merchant* through faetors. It appears that the factors operated under the following instructionst

1* Seek to ingratiate themselves with the tobaooo planter* to obtain thair custom.

2* Charge high price* and extend long credits.

L U Little, gg. aii*, pp. UAL2

193* At the and of each year close up the account

by a bond and open another account, increasing each new account by the amount of the bond and interest of the preceding year.

4* When the account is built up high enough with­draw credit and insist on settlement* J5To the extent that these instructions were followed * he

planter was ruined, the merchant enriched, and the country drained.These practices were continued by British merchants until the

Revolution and were the cause of growing resentment among the colonists*Typical of the colonial attitude was an indictment by Thoms Jefferson*

The advantages made by the British merchants on the tobaooo consigned to them were so enormous that they spared no means of increasing those consignments*A powerful engine for this purpose was the giving of good prices and credit to the planter till they got him more immersed in debt than he oould pay without selling his lands or slaves* Then they reduced the prices given for his tobacco so that, let his shlj^ msnts be ever so great and his denmnd of necessities ever so economical, they never permitted him to clear off his debt. These debts became hereditary from father to son, for many generations, so that planters became a spec lea of property annexed to certain mer­cantile houses in London.Other historians concurred in Jefferson1s report*

Bo eivilised people an earth has been so badly paid for their labour as the planters of Virginia during the entire colonial era and the long years afterward * * * merchants had done more to produce the mischief than all the ignorant empiricism, ill judgment, and alleged indolence of the planters* A delegation of the former would meet annually and and settle the price of tobacco for the year •** and at the same time have a similar understanding among themselves as to the prof its of the merchandise* '

15. BHA., p. 13.16* The H O U R * gfld Miry College ftHf\T~VvrlTr January 1918,

P. 152.17• JhJA*» P* 3-51*

20Sons of the larger planters established connections directly

vlth the mercantile houses of England and operated as middlemen In buy­ing up odd lots of tobaoco from their lesser neighbors and shipping it with their ovn.^® Typical of this group vas William Byrd, who In 1671 Inherited the Virginia estate of his uncle, Colonel Stegg, and thus be­came a large landowner in the area now known as Richmond. In addition to his operations as a plaster he became a merchant and "his caravans of woodsmen and traders with as many as a hundred pack-horses laden with English goods to be exchanged with natives for fur"19 were seen on the upland trails. At the Falls his business Included exj>ortlng and import­ing as well as general line of merchandise sold at wholesale and retail. From England he received everything a rural community might need. From the Barbadoea cams white sugar, rum, and molasses as well as Negro slaves from there and from Africa. Such activities as these were the first wholesaling activities in the area that was later to become Richmond.

Because of the nature of the economy whereby tobacco was not only the chief orop but also served as the medium of exchange, control was exercised over its handling, and tha warehouses were placed under supervision as a public utility. As early as 1619 there had developed the practice of employing sworn viewers who inspected the tobacco. In 1712 the Asse^ly passed the Warehouse Aot, which provided for the es­tablishment of publia warehouses at convenient points not more than one

IB. U B. Wright, Letters Robert Carter 1720-1727 (San Marino, California, The Huntington Library, 19AO), p. AS.

19. Stanard, aft* P* •

21mils from navigable water. Although tha warehouses oould ba privately owned, tha rates and conditions ware fixed by law. The warehousing act was followed In 1713 by an inspeotlon law which provided for licensed Inspectors to enforce oertaln minimum standards for the tobacco to be stored and used either for exporting or as a medium of exchange* The act exalted a great amount of opposition Including that of the nerchant planters such as Vllliaa Byrd II, and, together with their merchant connections in England, they ware able to secure a royal veto of the measure in 1717* The Warehouse Act remained in effect, though amended slightly in 1720* As a result of the depression which ttarted in 1725, public sentiment arose sufficiently to support the VirgLnia Act of 1730, which established an effective system of inspection and warehoualog t and this served as the backbone of the oolonial system of marketing until the Revolutionary War* Under the Virginia Act the licensed and bonded inspectors were authorised to open and inspect each hogshead of tobacco, to sort out and destroy inferior tobacco with the consent of the owner and, lacking his consent, to destroy the entire hogshead. The class and grade of tobaoco were marked on the hogshead, which was then repack­ed* Warehouse receipts were issued for either "transfer" or "crop" tobacco* Against the transfer tobacco general negotiable receipts were issued. While the receipts for crop tobacco were specific In character and represented largely consignment tobaoco*20

William Byrd II, inherited the Lands and business of his

2 0 , HJULUU If ld Mary QMUTVtrlVr January 1928,pp. L^-15*

22father, and It was he who envisaged the establishment of a city trading oenter where Richmond now stands. He reports in his diaryi

When we got home we laid the foundations of two large Citys. Oise ... to be called Richmond and the other to be named Petersburg* The Truth of it is these two plaoes being uppermost Landing of James and Appomattox Rivers, are naturally intended for Harts, where the Traffic k of the Outer Inhabitants must Center#*^

Richmond was laid out in 32 squares, each with four lots and extended along the north side of the James River where Shoccoe Creek enters the river. The advertisement previously quoted was the next step in es­tablishing the city.

Growth of the town was not rapid, but enough inhabitants were attracted for the Assembly to pass an act creating the tofwn In 1742.The act which established the town oontatned the provision that fairs were to be held twice a year, for the purpose of aiding the r»w city and of making it a place of trade. Further provision was made that for two days preceding and two days following the fair, people were to be free front service of papers of attachment. Little is known about the success or operation of these fairs, but the fact that later ordinances were passed from time to time directing such fairs to be held in the town would indicate that they met with little success. This constitutes another Indication that in a predominantly private economy commerce and marketing cannot be effected through legislative action. The towns were not especially important to the simple life of the colonists) the

21* Stanard, gg. olt.. p. IB

23

merchants did not keep extensive Inventories of good a , and much of the trad* dependad upon the arrival of individual ships from England.

One of the results of the natural growth of the colony and of Richmond was the expansion of the merchant group. Some of the factors beoame in effect merchants who bought and sold merchandise. As Richmond developed there were a greater number of English and Scottish merchants who sent junior partners to represent them here. These young men were discouraged by their principals from entering into the social life of the town, and their chief ambition was to return to Britain to assume their places in the firm. As a result there was little integration and the merchant group was not especially Interested in the affairs of the town. This lack of integration into the life of the community contrib­uted to the antipathy on the part of the other citizens toward the mer­chants •

At first there was little distinction between retail andwholesale merchants. Sales were made In bulk to country merchants or inindividual items to the ultimate consumer. The following advertisementwhich appeared in 1745 is typical of the timet

Just Imported by the Subscriber and to be Sold by him, in Torktown.

A parcel of choice Medicines, Chymical, and Qalemical,Also Boorhaves Pills, Andersons Pills, Lockyers Pills,Feotoral Drops, etc. Likewise Bohea, Green and HysonTea| double and single refin*d sugar, white and brownSugar Candy, Olives, Capers, Anchovies, fine sweet Olive-^il, Almonds, Raisins, etc.

John PayrasN.B. The Sugars and Raisins are to be sold by whole­sale very reasonable.^2

22. Advertisement in The Virginia Gazette. September 26, 1745*

u

The first evidence of sale made entirely at wholesale in Richmond was In an advertisement of 1730, as follows!

Just imported and to be sold by wholesale at Mr. Lambert's new house in the back street, Richmond.

Xard wide Irish linens, printed and penciled calicoes and cottons, ohlntz, oxnabrugs, women's stuff shoes, printed lawn handkerchiefs, silk hand­kerchiefs , oordage and twine, sail canvas and needles, log lines, lead lines and leads, bunting, paint brushes, hardware and cutlery, queen's ware, plain and copper plate. In crates assorted, with tea and table sets, hinges and stock locks, carpenters and joiners axes, adzes, augers, hammers, files, etc., etc., pins, Ivory and horn combs, nails f -or. 6 tc- 2C penny, fine stoned salt, rose butter of the first quality, glass and flint ware, poplins, silks and cambricks, gauze, flannels and shalloons, broadcloth, forest cloth and frize, ruffled and plain shirts, silk thread, ootton and worsted stockings, umbrellas, and lace, a variety of plain coloured and flowered ribbandr, drapes and table linen, corded dimity, bed tickcn, camp hanmocks, blankets, coverlets and rugs, hats and nankeen, sailors Jackets, a large assortment of fancy and metal buttons of the newest fashion, a few quarter casks of genuine old madiera, a few dozen of cherry brandy, sealing wax and wafers. 23Because of the shallow draft of the ships of the time, Rich­

mond developed into a port with considerable foreign commeme. Ships brought in English goods and returned with Virginia produce. Included In the exports from Richmond in 1764—1765 were over 20,000 hogshead of tobacco, 42,000 bushels of wheat, over 75»000 buahelr. of corn, much lumber and a quantity of iron.^4- During these years Virginia and Rich­mond had greater imports than did New York. In 1769 it was estimated that Virginia's imports amounted to $4,065,472, while those of New York

23. Advertisement in The Virginia Gazette, September 27, 1780 24* Stanard, op. ai£., p. 25.

wore #907,200.25Sale by auction was practiced by pome of the mercnnnL;. in the

late eighteenth century* One Nicholas B. Seabrook advertised as foil owe:To be sold to the highest bidder, at the sub­

scribers lumberhouse in Richmond town, on Monday the 7th of February, if fair, otherwise next fair day for ready money.

Old spirits. Muscovado sugar, copj>eras, bottle corks, nan's shoes, writing paper, watch chrystals, horn combs, sewing silks, needles, sail do, and palms and a small quantity of tar *.**2°The territory served by Richmond merchants at the chore f the

eighteenth century was limited by the inadequacy of rondr nnd Internal improvements. Plans were made to build a canal around tin* Falls of the James River and eventually to have a waterway which would connect the James River with the Ohio River by way of the Kanawha River, thus oj-on— ing the entire West for trade with Richmond. Wagon roads were gern^rnllyso poor at the time that travel was often ha za rrl o\is , and the rou’ce ofthe roaas and trails were for the most part controlled by the obstacles imposed by nature.

The Revolutionary War had a far-renching im]«ct ut on trade in Richmond. Since the leading merchants were English and Scotsmen and their connections were with firms in Britain, many worn sympathetic to the royalist cause. Of this group many returned home and gave up their businesses. England having been the greatest single source of merchan­dise imported, those merchants who remained lost their source of supply

25. Hunt's Merchants Mugaaine. 25 (1351), p. 263.26. Advertisement in Jfca Virginia Gagette. February 5, 1780.

26

and were unable to get goods. In effect this marked the start of the decline of the whole South Insofar as direct trade with European coun­tries was concerned* Until this tin's the South hod led the country In both Imports and exports. Because of the tobacco, cotton, and rice raised in the region the exports remained at a high level, but imports declined steadily. At the time of the Revolution Richmond was a col­lection of villages lying around a trading place In 1790 the popula­tion was 3*761 and in 1300 it had grown to 5*730.

Growth During the Nineteenth Century The beginning of the nineteenth century found the money

situation extremely bad. There was no accepted standard coinage and the sharp—shin and shln-plasters were developed. These were forms of frac­tional currency issued by various private agencies,noted for their resem­blance to shin plasters which were triangular shaped with shar; un­milled edges. Few merchants visited tne northern cities to obtain supplies of goods. Those who did were looked upon as little above the grade of p e d d l e r s . T h e English, Scottish, and Irish merchants who were re-established after the war or who remained during the conflict began to import again directly from London, Bristol, Liverpool, and Dublin, where their principals resided. At no time did these imports reach pre-war levels* The presence of these merchants, however, contri-

27. Little, 2E* y p* 55.26. J. B. Mordecal, Richmond in By-Gone Days (Richmonds

George M. Vest, 1356)* pp. 210-211.

27buted greatly to the rise of Richmond as the leading commercial city of Virginia and as a trading center for the entire Southeast.

By 1810 the population had Increased to 9*735 and during the subsequent decade it rose to 12*046* The first directory of Richmond, published in 1819* made no distinction between wholesale and retailf a total of 142 merchants was listed. No firm connections were given and subsequent data indicate that these numbers of merchants were really the members, partners, or senior officers of mercantile establishments; hence the number of establishments was considerably less.

The auction was a very common method of sale during this time but was not without Its critics. There were many who felt that goods possessed intrinsic value which might or might not be reflected in the price as established by the interplay of supply and demand. Such critics declared that the auction system generally resulted in a price which was below the true value of the goods — as evidenced by the followings

The auction system ••• always appeared to us to partake more of the nature of gambling than of fair trade* Sometimes the seller parts with his goods for less than their value and sometimes the buyer gives for them more than they are worth. As there are no laws laying an injunction on the people to buy and sell at auctions, the merchants have an undoubted right to have nothing to do with these sales* It is, however, to be regretted that government is eo deficient in wisdom and energy that individuals have to associate to effect an object (the regulation of trade) to effeot whioh was one of the objects for which the Federal Constitution was adopted.29

The belief seems to be pretty general, that by sales at auction the business of regular traders and manufacturers Is severely interfered with* Steadiness

29. Compiler. June 5* 1621* p* 2

28la any calling la certainly tha bast guarantee of its success, and tha aaarifloaa Mda by foreigners la oar market, by aalaa at auction, aaaa to banafit only speculators and over-grown capitallata — though, by aatting aa apparaat value an oosmodlties in tha market. thay affaot tha whole a took of auoh article a on hand.™Saab atatlatloal data aa ara available for thia period provide

cone evidence that Richmond had developed into a oenter for wholesale trade. Beginning in 1816 tha Dally Compiler and ita successor, tha JjgU ygl £gflRjLLlX.r issued aporadic reports of currant wholesale prices. Tha jjUBA Birar and Cansl

Vo preaantation of tha hiatorieal development of Richmond aa a wholaaala trade center would ba complete without a brief description of tha Jamas River and Kanawha Canal.

Aa early as 1771 George Washington presented to the House of Burgesses an idea to connect tha last and West by suitable transporta­tion facilities baaed upon the Jamaa River. Following the Revolution the legislature passed the aot of January 14, 1784, which chartered the James River Company to dear and extend the navigation of the James River from tidewater to the highest practicable point on the main line. The work involved removal of obstructions in the river and the building of a canal around the falls at Richmond. Thia work was completed and tolls were first charged in April 1794. Traffic developed and in 1803 tolls were charged on the following shipments! 16,917 hogshead of tobacco, 170,000 bushels of wheat, 58,183 barrels of flour, 34,248 bushels of corn, 2,022 loads of coal and a variety of other

30* Vilas1 Weekly Reals ter. January 22, 1820

29articles.

As the company prospered financially the public began to find fault. It was contended that the company had not removed many of the obstacles to navigation and had not attempted to unite the East and West. As is true in so many cases, this public utility under private ownership was criticised by those who felt the company's profits were toe high in relation to the service rendered.

In 1820 the legislature cancelled the charter of the James River Company and took over its rights and privileges. The State was

interested in the original proposal of Washington that a ^ysten of trans­portation be developed to connect the James and Kanawha rivers so that commerce could flow freely between the East and the Ohio and Mississippi valleys. Several studies were made to determine the feasibility of such a program, and in each case the possibility of greater commerce was ad­vanced as a primary reason for completion of the project. Under State control the company failed to accomplish its objective of improvement and expansion of the system, but tolls were reduced and the shippers made extensive use of the existing facilities.

In 1832 a Joint stock company known as the James River and Kanawha Company was chartered with the State participating financially to the amount of $3 ,000,000, whloh represented three—fifths of the total capital stock. This company proceeded with the work of connecting the James and Ohio rivers, but unexpected costs, freshets, etc. kept it

31* Taken from the Annual Statement of the James diver Coe>- pany, 1805.

30financially embarrassed most of the tine•

The decade from 1850—1860 saw the canal reach Its height of operation, as indicated In Table I.

TABLE ITonnage Receipts and Revenues James River and Kanawha Canal

1841-1860Year Tnnneo-#. Gross Net Revenues1841 110,141 #121,751.29 $ 59,610.331845 134,759 183,651.05 128,519.581852 210,03 2 277, U 8 . 97 182,190.471853 231,032 293,512.92 170,368.811860 244,273 238,991.27 105,928.42

Sources Twenty—sixth Annual Report James River and Kanawha Company, 1860.

The decline in revenue during the period in uh ich tonnage Increased was due to a reduction of tolls to rnoet the increasing com­petition of the railroads. The net revenues given in Table I were prior to interest charges, which were extremely high because mor,t of the capital represented debt.

No attempt should be made to minimize the importance of the canal to the comerce of Richmond. Limited as it was, it opened a vast area for trade and made the western part of the Stato part of the Rich­mond wholesale market. During its earlier history it provided the only satisfactory means of transportation for goods and enabled Richmond merchants to serve a much larger territory.

From 1820 to i860 Richmond continued to grow in population, in manufacturing, and in trade. The population was 1 2 ,0 6 7 in 1820j 1 5 ,0 6 0 in 1830J 2 0 ,1 5 3 in 1340} 2 7 ,5 7 0 in 1350; and 37,910 In I860.

31During this period the wholesale or Jobbing house euerged as an Institu­tion which could be distinguished frou the retailing establishment. A perusal of newspaper advertisements during the earlier part of the period shows that little dlstlnotlon was made between retailing and wholesaling operations. The term "merchant11 was used with no particular connotation other than that the fins engaged In buying and selling merchandise. Some of the advertisements which were designed obviously for the ultimte con­sumer carried statements that speolal attention would be given to orders of country merchants. The auction system continued to be widely used, and each newspaper carried several columns of advertisements of auction companies as well as of auctions to be held by regular merchants.The Decline of Direct Trade

During these years the amount of Imports declined steadily. As ships baoana larger, the limits imposed by channel depth at the docks be­came more restrictive* In addition to this physical feature, the North had captured much of the importing trade of the country. There was re­cognition that Virginia and the South would be better off economically If there were more direct trade. In fact, the natter of direct trade be­came an economic idea about which there was considerable talk, but little action until the Civil War.

In 1636 a commercial convention for Virginia and North Carolina was held in Norfolk to diaouss natters of importance relative to trade. The first session was devoted to a discussion of internal improvements as a means of facilitating trade and thereby reducing taxation. A reso­lution was passed condemning direct trade insofar as imports were con­cerned. It contained a reeoasmadation that steps be taken to get local

32retailors to buy from local importers and wholesalers rather than fron Northern firms* A further resolution was adopted to the following effect:

Whereas the producer and consumer form the only Immovable basis on which commerce can rest, it is the opinion of thia convention that the honor of Virginia and the interest of all classes of the citizens and the whole South require that the consumer should purchase of the direct Southern Li^jorter or of the merchant who purchases from such importer*^The convention appointed a committee of 21 to inquire into the

"latent causes of our Commercial decllno*" Incl'jded in the report of this committee was the following statement:

The exports of the Southern States have been steadily increasing during the whole period t,hn+ their imports have been dwindling to their present insignifi­cance, while the enormous increase in the imports of the Northern States, has been attended with so slight an improvement in the sum of their own products exported to foreign countries, as to be scarcely worthy of men­tion. In the year 1830 the exports from the United States of the products of agriculture amounted to near U 7 ,000,000 of which the articles of cotton, tobacco, and rice alon* constituted more than four-fifths and in the short space of four years the exports of the products of agriculture had increased to upwards of •67 ,000,000 of which the exports of cotton alone, exceeded in value the whole agricultural exports of 1830* During tha same four years exports of manufac-

ts (chiefly Northern) increased only

This was held to be contrary to the accepted principle of

a diminution in the imports of any nation would be attended by, or at least, would indicate a correspond­ing decrease of Its exports*

32* Proceedings J£e Commercial Convention sL Sisifia of Virginia and North Carolina (Norfolk, Va.i T. G. Broughton and Son, 1539)

33* P* 5*

political economy that

33There la ana aauae of thia decline vrhich the

Committee cannot omit to n#tice, believing that a knowledge of ite operation may be useful, In Itself suggesting Its appropriate remedy. They allude to the withdrawal of British capital invested In commerce In this and other Southern States anterior to the Revolution. The business of the colonies was conducted for the most part by agents of British capitalistsj and even the resident merchants were chiefly foreigners whose means were supplied by the mother country. The effect of the revolution upon such a state of things may be easily conceived ... The withdT*awal of so large a portion of our commercial capital could not but exercise a prejudicial Influence upon our foreign trade. It is true that the same result was experienced in the Northern Statess but, as will be presently seen, in a much less degree. The principal exports of the colonies had been supplied by us and to us came the far greater portion of the articles that were necessary to purchase them. It was necessary that the vacuum pro­duced by this withdrawal should be supplied. In the competition that ensued for carrying on the trade, thus thrown open, the greater advantage would be secured by those whose condition better fitted them for conducting it. We were in some respects more illy prepared than the Northern States for engrossing the profits of this trade. Anomalous as it may seem our very wealth was to this extent a source of disadvantage.The wealth of the South through agriculture vnis greater than

that of the North and there was little, if any, incentive for the South to enter other pursuits such as manufac turing or trade unless such pursuits would yield more than husbandry. "Having thus a larger portion of their capital Invested in the pursuits of commerce they (the North) were enabled to compete with us successfully for that trade which was properly our own.*^^

The statement of the Committee of 21 sums up tlve economic philosophy of the South not only for the period prior to the Convention

3 A* , pp* 8—10

34but also as it axis tad for many years afterward, land and labor were ex­tremely cneap and as long as there ware two such aaah crops as cotton andtobacco there was a high level of return. The ruination of the soil wasof little Matter because new aores could be planted when the old ones gave out, and there was little concern over the quantity of land which wasavailable or over the long-range effect of such a policy.

The convention of 1838 was remarkable because the commercial interests recognised the possib ill tier- of mutual discursion and mutual action in an attempt to solve their problems. Even more remarkable was their apparent belief that the problems which were based on economic fact could be solved through mere resolution which asked other individuals not directly represented to change their methods of operation. This attitude of expecting trade to continue or be maintained merely because It existed at one time did not disappear at an early date. In fact, it appears to be prevalent among some wholesalers at the present time •

It was reported at the Commercial Convention that in 1837 there were 17 wholesale merchants in Richmond, this figure being determined by the payment by that number of the $60 per annum license tax. There were also six auction houses in the same year. All told, 3,836 retail licenses were granted throughout the state as compared to a total of 57 wholesale licenses, and the implication was that such a large number of retailers could, if they would, support a much larger number of wholesale establishments•

In 1845 it was reported that,Richmond is well situated for conmerce. Vessels

drawing 10 feet of water come to Rockets about a below the centre of the city. The falls in the James

35River a n obviated by tha canal and above them It is navigable to Lynchburg. Regular lines of packets oonnect this city with New fork and other places, and It Is connected by steamboats to Norfolk. The principal articles of exportation are wheat, flour, and tobacco and the exports amount to about #3 ,000,000 annually. There were In 1840, 17 foreign commercial and 29 commission houses with capital of ♦3,062,000.35

By 1846 the railroad was becoming important as a means of transportation. According to an editorial in the Times and Compiler:

The first successful attempt to adapt the locomotive engine to the movement of heavy freight was made during the autumn of 1842. The result has been that so many of the roads as had navi­gable water communications running parallel to then have not only taken the passengers, but also the general transportation of merchandise and produce from the former and the others are conducting profitably and usefully the whole transportation business of the country through which they panr ...36

In spite of public sentiment as well as the popular tradition of theJames River Canal, Richmond was not left behind in the development ofrail transportation facilities. Neither the State, the City, nor thepublic in general were intnune from the railroad mania which swept thecountry.

According to the 1845 Directory there were u total of 434 retail and wholesale establishments listed for Richmond. Of these, only 32 importers and 67 commission houses can be distinguished as wholesale

33. Henry How, Historical Collect ions of (Charleston, South Carolina, Babcock and Company, 1845), p. 309.

36. Times and Co~.yller. October 29, 1846, p. 2.

36e s t a b l i s h m e n t s .3? No distinction between wholesale and retell establish­ments was made in other classifications* The 1851 Richmond Advert Is or contains advertisements of the types of firms shown in Table 2. The ad­vertisements indicated that with the exceptions noted these firms made sales at both wholesale and retail.

Table 2Merchant Advertisers - 1351

Classification Number Wholesaleaad.jU£*U._- Number Whole 3ale Only

Books and stationery 6 0Boots and Shoes 3 0China 5 0Commission and Forwarding Merchants 0 34Drugs 8 0Dry Goods K 2Fruits, Fancy Foods 3 0Hardware 5 0Hats and cape 5 0Mon's clothing 7 0Millinery 2 0Watches - Jewelry 2 0Vines and Liquors 4 0

Source* Riohmond Advertiser, 1351.The problem of direct trade continued to bo of concern to

merchants and business men generally. On September 10 and llf 1351, another commercial convention was held in Richmond. Like Its predecessor held in Norfolk in 1338, it labored mightily, but brought forth only this resolutions

Resolved, that the merohants of our Atlantic cities ought to import directly to our Virginia porta the production of foreign countries used and consumed in this and the adjoining states; and that it be recommended to the merchants of the interior, and the people at large to aid them in

37* The Richmond City Directory. 1345.

37this nobis enterprise*3*The Richmond port was still doing bus insas but the exports

were far greater than imports* In Table 3 are shown the exports and imports of Richmond for the years 1854 and 1853* Analysis of these data indicates that Richmond1 s aost important exports were flour and

tobaoco* For aany years the water power of the Janes had been used for milling purposes, and a large export trade of flour had been developed with South America, especially Brasil* England remained the most im­portant reoiplent of the exported tobacco* Sugar, coffee, and railroad

iron represented the aost Important imports during this period. The sugar and coffee were returned from the countries to which the flour was exported* Sugar has remained through the years as one of the most important imports of Richmond, but the coffee was diverted to Norfolk* Rater transportation afforded the best way to deliver the iron needed

for the development of railroads*

38* Report of Coasserclal Convention" Hunt* a ^rch.ntj1 ifcASiflR* October IB51, p* 521*

38Tabla 3

Exports and Imports of Richmond 1854-1355Exports

______________________m iUnit Value Value_____Baoon lbs. 385 • 59 2,781 1 274Candlss,sperm 25,900 7,432 4,006 1,227Coal tons — — 220 705Corn bu. 4,987 4,300 —Cotton lbs. - - 21,790 1,358Flour bbls. 97,501 961,070 129,432 1,387,545lard lbs. 44,484 7,180 89,107 4,392Hsal bbls. - — 100 450Rica tieroes 150 2,434 22 724Rosin andturpentine bbls • 2,253 4,933 1,275 2,324

S terns ( tobacco) hhds 593 18,964 - -Stares M 79 3,519 120 3,494Tar and Pitch bbls. 50 128 94 269TobaccoCleaf) hhds. 18,183 2,229,520 20,116 2,573,833Tobacco(aft) lbs. 33,139 9,780 58,132 8,196Wheat bu. — 3,414 6.351Total Value 1 3,324,768 $ 4,064,709

Imports1854 1855

Article Unit Quantitr Value Quantity ValueCoal Tons i 131 4 28Coffee lbs. 868,542 122,761 1,351,220 189,584Fish bbls. 6,128 18,747 11,086 38,266Fish, dried - 473 - 37Guano tons 375 4,500 — —Honey gnls. 1,842 851 340 105Iroo(RR) evt. 182,241 373,836 30,090 51,03 5Molasses gals. 128,731 14,770 69,689 6,178Salt bus. 140,083 22,040 6,900 1,624Sugar lbs. 741,012 _ 23,113 — —

Total Value $ 592,678 $ 296,007

Souroei H m t 1! 1 IIUEUiDS.> ZZZVf No, 1,(July, 1856), p. 92.

39jgg£ Prior to tha CItII

The first comprehensive picture of the business situstian of Richmond was published in January,IB99. It shoved a total of 91 Manufacturing and Mechanical establishMsnts vith 1853 production

amounting to $19*408,896* CeMMsrcial establishment* were listed as shown in Table 4* At this time Richmond wholesalers were selling

throughout the territory including Virginia, Tennessee, North Carolina,

and what is now West Virginia* Grocery sales were made on four Months'

tine, while oredit extensions on dry goods and other articles varied

froM four to eight Months, All of these states were connected with

Richmond by either canal or railroad. In 1858 there were 974 miles of railroads and canals sManating from Richmond, primarily to the west and

south. As the railroads expanded, more of the territory to the south

was opened for trade with Richmond,

Richmond continued its growth as a wholesale oenter until the

start of the Civil War. From the oonmenoement of hostilities until 1865 trade became secondary to the war effort. The effective blockade of the

North, combined vith the disruption of traffic on both railroads and

canals, as well as the war needs of the Confederate States, virtuallystopped noraal business activities. As the war progressed, Maintenanceof the Richmond Market beeasm more difficult, with the supply of goods

steadily diminishing and prices going up. An illustration of ths

resultant situation is given in Table 5 which compares prices for 1063 in New York and Richmond,

40

Table 4Commercial Statistics * Richmond, Va. - 1858

Number Number Value Real Annual

Grooarias

of estab­lishments

Hand* Katftte Salas

(Wholesale) Dry Goods

29 195 $ 487,500 $ 8,860,000(Wholesale)

Liquor6 87 175,000 2,180,000

(Wholesale) Ship Chandlers and

7 30 65,000 250,000Groceries 3 9 15,000 150,000

Commission Harchanta 62 Retailers

195 325,0002,895,300

13,066,55013,146,609

Sources Huntia Merchants1 Macsline. XL. No, 1, (January, 1859},pp. 54-66.

a

Table 5Prices for Selected Commodities — Richmond, Vs., and New

fork, N. T. - 1363

Cofodltr ZorkBacon lb. * .05i - $ .07i $ 1.45 - 4 1.50H am lb. .10 — .lli 1.55 — 1.60White Beans bu. 3.30 — 3.40 13.00 — 20.00Butter(good) lb. •21 — • 22 1.75 — 2.00Beeswax lb. .45 — .46 2.00 — —C o m bu. .65 — .72 9.50 — 10.00Coffee lb. .29 — .35 3.75 — 4.00Dried Apples bu. 1.65 — — 10.00 — 11.00Flour bbl. 5.40 — 9.00 31.50 — 35.00H a j 100 lbs. .90 — .90 8.00 — 10.00lard lb. .09i — • 10 1.50 — 1.55Salt bbl. 2.50 — — 126.00 —Sugar lb. .loi — .15 1.50 — 1.60Wheat bu. l.oe — 1.32 6.50 — 7.00Whiskey .45 — .46 25.00 - 35.00Cotton lb. .57 — .90 .50 — .55Molasses g»l. .34 — • 43 8.25 — 8.50Oats bu. .70 — .76 5.50 — 6.00Potatcss

(Irish) bu. .60 — .90 10.00 — 15.00Rice lb. .05 5/8 - .08 1/3 .18 .20

Source* Hunt's Merchants1 Magasine, XLU, No. 1.(July, 1*63), p. 165.

u

These were the prices when the Confederacy' wan at its height aixl optimism concerning the ultimate outcome of the war was still common throughout the South* As the war progressed, business declined steadily and prices continued upward until flour cost over $400 per barrel, meal was $75 per bushel, and butter $1Q-$15 per pound*

For Richmond tha war closed with the burning of the city In April,1865* Host of the business district was destroyed in the fire and what was not burned was looted by the mobs* The people were without a medium of exchange* Richmond merchants were without capital, mid with large sections of the city in ruins, had not even storehouses for the accumulation of goods*

SummaryRichmond*s development as a center of wholesale trade from

Colonial times to the Civil War was an outgrowth of the appreciation of early settlers of Its advantageous location* The advantages which resulted from its location at the falls of the James River and the absence of adequate transportation other than by water outweighed the critical attitude of the public towards those engaged in commerce* The city represented the farthest point inland which could be reached by ships with original loads and the farthest point downstream to which the pro­duce of the hinterland could be moved by water. The early settlement by merchants resulted from a recognition of these advantages which per­mitted savings in transportation costs* Because of the basic interest in agriculture and later in manufacturing, the potential of the city was not realised* Members of the merchant group were held in relatively low esteem because of their origin and earlier unsavory relationships with

43the dominant agricultural group* They were looked upon as being un­productive and In nany oases, as of queationabla integrity. This last is evidenced by tha following excerpt from a review of and

Virginia In which tha author tails us that Virginia I»••• contained a population composed, in tha main,

of indentured servants and humble and ignorant yeomanj but with tha rtllng alasa principally descendants of merchants — merchants balng a sat of people says the author, wall known for their laok of any high sense of honor, for their timidity (not to say cowardice) and for not haring any great consideration for woman* Such a ofTiinity, naturally, is noted for its sharp dealings and for prevalance of fraud and dishonesty among all classes* Notwithstanding all these evils, the effect of Virginia environment is so strong that in a few generations these most unpromising people develop into one of the most highminded, courageous and chivalrous raoes on earth.39The period is also significant because it illustrated that

basic economic problems could not be solved by resolution or legisla­tion. Attempts were made to legislate marketing centers into existence, but they failed. Even the fairs which were ordered to be held in Richmond failed* Furthermore, the period gave evidence that merchants oould not solve their problems by resolution, especially when the resolution called for action on the part of others*

By the start of the Civil War Richmond was the largest city in Virginia and its largest trading center* Other cities such as York- town, Tappahannock, and Fredericksburg, all of tdileh had been more

39* "Patrician and Pleblan in Virginia”, a Review,XJUQCIa IA. ttUBkiiU. History Bieamanhv. July 1910, (XVIII, No* 3), PP. 339-340.

u

Important, had been paaaad by and vara no longer of importance* Rich­mond had tha naoaaaary requirement* for development into an outatending cantar of trada. Tha potential could not ba aohlaved until later.

CHAFTIR IIIRichmond1 s Wholesale Trade Development1865-1928

At the o I o m of the Civil War in 1865 Riohaond was a oltj in dire strait*s its businsss araa burned and in ruins, occupied as a captured city by Federal troops, nost of the people destitute and with no acceptable aoney available. The area served by its wholesalers was in similar u 1 mums tsmnis. The South was drained and was in urgent need of supplies* Richmond had neither the substance nor facilities with which to furnish then*

The northern aarkets were not slow to take advantage of the situation and aoved rapidly into the southern territory to supply the goods which were needed* The northern aerchants were able to grant the credit which was unavailable froa Richmond merchants.

Historians have been prone to discuss the social and politloal aspects of the reconstruction and have written little about oaaaeroe during the period* They appear to have been more aware of the Impact of military government, the carpetbaggers, oaths of allegiance, and the "lost cause" than they were of the efforts aade to rebuild the oaameroe of the city*

Although little information of value is available for the period iMedlately following the war, there is evidence that attempts

A5

46W r« vdt to ro establish the trad* which Riohaond vrohanta hod enjoyed prariooalj* ibova Riohaond tho oonol hod boon damaged so that it woo not usable, and aost of tho rollroods out of tho city woro In o similar condition. Xmssdlate stops wars taken to rostoro tho railroads because they wars nssdod by tho occupation forces. Aotually tho nso of tho Joaos RItot psraittod tho first rotnrn to normalcy for trods. By 1366 shipping hod boon rsimnart and a largo volume of asrohand iso was received and shlppod at tbs Riohaond Dook. Host of tho imports woro raw materials which ranged from bricks, lusher, iron, and coal to foods such as oorn, oats, sugar, and eoffee. With the saosptions of flour the exports woro also raw materials, with tobacco accounting for aost of tha tonnage.

Sarly Attempts to Protect and Riohaond* i Trading Influence1880-^1890

Tha decade of the 1880*a found Riohaond beginning Its aost pros parous era as a wholesale trade oenter. Several factors contributed to this development. Rot the least of those was the disappearance of the generation which had been associated actively with the plantation type of agricultural operation that had represented the very backbone of the antebellum economy. As this gems ration passed from the so one, the antipathy toward tbs merchant class booses less noticeable. Richmond no longer remained the oenter of agricultural production in tbs state. The economy of the city beoaes mors and more dependent wP°n business, both manufacturing and trade.

The Gtuufeer of Commerce, which wee established in 1867, gave considerable Impetus to the development of business. Members saw the possibilities for such development in Rlofasmnd's strategic looation as

47a combination rail center and port. These competitive advantages vara Ustad In a publication of tha Chaaber aa follows t

1. Riohaond ia nearly 200 miles nearer tha south­ern, western, and soutbvnetem fields of denanrt than any other city north of It, and from tha veet particularly Is approaohad by easier grades than any other Atlantic port.

2* A large line of goods are manufactured in Riohaond and our jobbers oan buy what is not manufactured hare on enaotly tha same tarns that tha northern jobbers oan.3# Tha ooat of doing business In Riohaond is, by reason of tha reduoad ooat of living, so much below northern oitias that our jobbers are enabled to ignore the difference In freights between Riolaaond and tha Northern trade oantars, whioh difference the Southern aarohant would have to pay in buying North.

Riohaond oan give shipment 12 hours in advance, and deliver goods 24 hours earlier from time of ship­ment than any Northern olty, with such lower freight rates.an aeecsmt of distance.), Tickets from any point South to Riohaond and

return, are oheapsr than to any northern trade centre and return — a consideration of soaa importance to the aarohant buying directly from tho house in preference to buying from salesmen.

4* Riohaond has every advantage of competition in freights from western olties by rail, and from eastern olties by both rail and water, and has a fair and Just tariff to the South, not inimical to the oity.7* .Situated at the head of tidewater where vessels drawing IS feet af water oan oeme to the wharves, with rail ooaneotloos to West Point and Newport News (ports of Richmond) where the depth of water is sufficient for the largest vessels, the olty has every facility for its Import and export trade

1* Richmond Chamber of Ccameroe, Ihs AdTistoi alliahmixL Tlrminle || | XEIAIAR Centre. (Riohnond7 1*82).

4iBy 1581 tho contributions of tho Jobbing trndo to tho ooonaaic

welfare of tho olty voro meognisod to tho oxtont thot otto^tod Inroods on thot trndo by othor oitioa woro enrofully scrutiaiaod ond publicisod by Riohnondoro, An odltoriol oppoorod oorly in tho yoor eanoonting oo followo on offorto of Boltiaoro oorohonto to toko trndo away fron Rlahnonds

It bohooma no to toko notion ot onoo la rogord to tho attonpt aodo by tho olty of Boltiaoro to divert tho oonthoxn trndo fran our olty ond state, Thot olty lo endeavouring, by investing in tho llohnonrt ond Danville systen ond through o portito agreoneut with tho Tirginio Midland Kollrood , uhioh la port of tho llohaond ond Danville ayetee, tho Boltiaoro ond Ohio Bollrood ond ltoolf to gothor into ito rnpooiooo now tho wholo of tho groat and growing trndo of tho Southeast, from Tirginio to tho Qulf of Noxieo, Thla diversion of tmdo onn only bo dono by unjust diaorlainotlon in tho not tor of freight rates,2

iKlZ SiftttU&UdlTho inorooaod intoroat in oaaanroo wna evidenced forthor by

ottanpta to oolloot atotiatiool data. Jobbing aoloa worn roportod to bo $17,000,000 in 15B0,3 ^ 1553 A. y. Ball, of Bradotroot1 a MsroantileAgoaey, oolloetod oad published data oonoorning annual jobbing aoloa by liaoa for tho yonrs 1581-1553, A ynnr or so lotor J. H, Whitty, olao of Bradstreet, bognn to oolloot and publish his sorloa of annual data on aoloa and capital invested in Jobbing houaea vhloh ho oontinood through 1920, Tho so data worn oopyrlghtod and oppoorod la various publioations, but aono proaontod tho on tiro aorioo. Although thorn la indication that

2 , B ^l Hyu£lA&BElAd Vol* I I ,Bo, 2, February l S Z ^ ^3, 0, P, Johnson. IgSRfk Uk. ttt. ttfelOC ZKBdfe (Klohnondt

Tho Chaahor of Counoroo, 1591), p, 159*

49Whltty started his Mrita in 1881, the first year for which his data win fouad was 2887*

Ths srsllsbls data for the sntlrs psrlod 1881—1920 are pre- asntad In Tabls 39 In ths Appendix* Tabla 39 gives annual salss figures for the fourteen jobbing lines listed below* In earlier years Whltty collected data for twenty-two lines, whioh later he ooablned In­to sixteen lines* The author has ooablned three of these for purposes of comparability with later data* The lines covered arez

1* Groceries, oonfeotlonerles, liquor, cigars, tobaooo, soft drinks*

2m Froriiiona,3* Dry goods, notions, footwear, hats, caps, olothing*A* Coal, wood, hay*5* Drugs, liooriae, flavorings*6* Hardware, agricultural iaplenent*.7* Railway, nill and pluablng supplies*8* Sewing ■achines, typewriters, bicycles, autoaobiles, electric and sporting goods*9* Oils, paints, varnishes, glass*1X>* Leather, hides, saddlery, tanbark*11* Stoves, tin, china, earthenware*12* Books, stationery, paper*13* Furniture, carpets, upholstery*Li* Pianos, organs, ausioal instruaents.The deoade of the eighties also presented evidence which

gives eredenee to the theory esqpressed by soaw oitisens that Riohaondis not affected by the general business cycles of the country to thessas degree as are other sections* Although the country during thelatter part of 1B83, entered into a depression whioh was to last untilthe first quarter of 1886, its effects were not felt by the Riohaondwholesalers until 1885* During the period from 1883 to 1887 the Rich—aoad jobbers increased sales frosi $20,135,000 to $25*290,000 or 25*6

50The Period of Greatest Expansion

1990-1920Ths psriod 1890—1920 is trsstsd separately bsoauss this re—

prsssnts tha span for whioh comparable yearly data are available* As a period it covers acre than one business cycle and includes the infla­tionary years whioh followed immediately after World War I* During this period Riohaond wholesalers made their greatest expansion in territory served, and the Riohaond market achieved its greatest geographic proportions.

In addition to the sales data given in Table 39, data on capital Investment are available and presented in Table AO in the Appendix. Figures relative to sales and capital investment are not available for the years 1896, 1897, 1902, 1903, and 1907, but for pur­poses of analysis they have been Interpolated for these years an a stralght—llne basis between the last and the next given years.

Frost 1990 to 1920 the annual sales of Richmond's jobbers in­creased from $31,543*000 to $151*301,000* This represented an Increase of $119,758,000 or 379*7 percent* When expressed in terms of an index of sales based upon 1913, the index moved from 27 in 1890 to 187 in 1920, with the most precipitous upward movement taking place from 1916 to 192D, during whioh time the index moved from 103 to 187* With the exception of the years 1892 to 1896 the index moved upward each year through 1914 and then dropped off one point in 1915. The indexes of sales for each year are presented in Table 6*

51

TABU 6Index of Riohaond Jobbing Soles

1090-1920 (1913 * 1O0)

Za>£ Ini Dol- ^ 1 2 gjlie Fhnlflf 1 lAE XfillBft Physios]

YVlWt

1090 27 10 1906 76 861091 15 56 1907 78 871092 15 60 1906 80 891093 12 51 1909 81 871091 36 52 1910 89 881095 37 53 1911 92 991096 37 55 1912 96 981097 38 56 1913 100 1001090 39 56 1911 99 1011099 U 59 1915 99 981900 10 59 1916 103 811901 51 65 1917 122 681902 55 60 1910 150 701903 39 71 1919 106 901901 63 71 1920 107 831905 60 79

Souroot Calculated from data In Tables 39 and 41.

52The increase In dollar Nlti volume considered alone would

appear to represent groat growth resulting from sort officiant opera­tions, expansion of sales territories, and/or greater penetration of existing markets* fttaoh of the increase, however, was due to changss in the prioe level as well as a generaUj expanding economy for the country as a whole*

The physios1 volume of sales, or unit sales, is best used to show actual growth or trend over a period of time ins much as the im­pact of prioe changes is eliminated* The physical volume of sales for Riohaond jobbers was calculated by applying the prioe index as given In Table 11 In the Appendix, to dollar sales volume, and the results are presented In Table 6*

The data in Table 6 indicate that the physical voluas of sales increased somewhat, but remained fairly stable through 1900* From 1900

the physical volume increased consistently until 19H, after which it fell off rather sharply* Figure 1 has been used to show the trend of the physical volume of sales for the years 1B90—1915* The latter years of the period have been eliminated from the calculations in order to Minimise the effect of the severe postwar inflation and to obtain a more realistic picture of growth*^

4* The trend was calculated by using the system of scmi-everagea* The period was divided into two halves, 1890-1902 and 1903-1915, the average index calculated for eaoh period and plotted for the mid-years 1896 and 1909* The trend line was then drawn to connect these two points and projected to both extremes of the period* This method has been used in all subsequent trend calculations*

120

110

100

90

80

70

60

90

40

30

20

10

0

Figaro 1Tnod la tha Fbjtioal Voluaa of Salat

of Rlohannd Jobbort, 1090*1920 (1913 ■ 100)

— 1 1 - 1 j ■ >1090 1895 1900 1905 1910 1915 1920

54As Illustrated In Flours 1, ths Riohaond jobbers sxpsrisncsd

an upward trend In ths physical volume of sales whioh averaged 3*3 percent at the eid-point, 1902. Froa 1B90 to 1915 the index of physical yoIibs of sales increased 50 points, or 104*2 percent, an average of 1«9 index points per year.

During those seas years, froa 1890 to 1915, the proportion of total United States sales aerie by Riohaond jobbers decreased. Data on sales volume throughout the United States are not available for the period, but an approximation sufficiently accurate for this analysis oan be aade through the use of the volume of production for dossestic conswption. Although it would be improper to assume that goods pro­duced in a single year would be sold in that year, it may be assumed that over a period of twenty*-*ix years a great majority of the goods would be sold*

Figure 2 is used to illustrate the changes in Richmond*s position relative to total United States sales. The comparison indicates that Riohaond achieved its aost favorable position as a marketing oenter for the nation* s production in 1893, when the index was 139. Other peak yeare were 1896, 1908, 1911, and 1914, but each succeeding peak year, with the exception of 1906, was lower than the preoeding one.

Flfxtrt 2Triad In Rlahaond Jibbing Salas As a Ratio

•f Total felted Stataa Salas, 1090-1920 (1913 • 100)

K O

130

120

U Otoil -

100

90

aoTO

60

50

01910 1915 19201900 1905

56The period 1890—1920 w e one of greet expansion of business

end indue try In the United States* Much of the industrial expansion took place in the North and Midwest* At the ease tine, according to the Bureau of the Census, there was a reduction of 8 percent in the propor­tion of the nation1 s population living in the states of Virginia, West Virginia, North Carolina, and South Carolina* These states had an in­crease in population of 54*5 percent, while total population in the country increased 67*9 peroent• Of the states in the Richmond area, Virginia had the bus 1 lest increase in population, 39*4 percent* The proportionate decline in population explains, at least in part, the de­cline in Richmond sales relative to total United States sales. The further development of other oenters resulting from increased popula­tion and expanded transportation facilities during the period also contributed to the change in Richmond's relative position.Capital StJtetetiliUKflL&ft.

From 1890 to 1920 the capital Invested in the jobbing estab­lishments of Richmond increased from $7,360,000 to $19,191,458 or 160*7 percent* Increased capital Investment in a wholesale establish­ment is of value only to the extent used to increase profits by expand­ing sales and/or by reducing costs of operation by such means as mechanisation* A measurement of the degree to which the increased capital investment results in inereased sales can be secured by relat­ing sales to capital an a per-dollar lnveatmert, basis as presented in Table 7*

57

Table 7Sales Par Dollar Capital Investment Riohaond Jobbers 1090-1920

Xaac Kuraioal 3j1890 $ 4.29 t 5.291391 4.49 5.621392 4.43 5.971393 4.19 5.441394 3.75 5.431395 3.68 5.521396 n.a. n.a*1397 n.a. n.a*1896 4.03 5.761399 4.38 5*841900 3.84 4.741901 4.03 5.101902 n.a. n.a.1903 a.a* n.a.1904 5.06 5.911905 5.28 6.14

1906 $ 5.33 * 5.981907 n.a. n.a.1906 5.28 5.871909 5.35 5.521910 5.42 5.371911 5.54 5.961912 5.74 5.801913 5.90 5.901914 5.81 5.931915 5.81 5.751916 5.86 4.611917 6.14 3.471913 7.13 3.101919 8.23 3.991920 7.88 3.49

n.a* — Nat available.Sources Calculated froa Tables 39 and 40

58The dollar solos por dollar oapltal investment shows oa over­

all ineroaso for tho period. If tho postwar inflation is ignored, tho lnorease was 35.4 poroont error tho 1890 figure. When measured on tho baslo of physloal sales, tho inoroaoo was only 8*6 poroont oror tho twenty-five poor porlod. Following tho war tho aaloo por dollar ofoapltal invested lnoroaood rapidly Whllo physical aalos por dollar ofcapital dooroaood rapidly.

normally expanded salos roqoiro a larger oapltal investment, and hlghor prioos would roqoiro additional oapltal for Inventory Main­tenance. It speaks wall of tho Riohaond jobbers that they woro able to ashlars an Inoroasod salos volume of 379 poroont with an Inoroaso In oapltal lnrostasnt of bat 160 poroont.SbftBCtf, lA. ihR Coiosltlon of Salos

Froa 1890 to 1920 tho composition of tho jobbers* sales of Riohaond a hanged rather radically. In 1890 tho four loading jobbing linos — groceries, dry goods, drugs, and hardware — acoounted for 45.8 poroont, 19»7 poroont, 3.9 poroont and 3*7 poroont respectively, or 73.1 poroont of total sales. Provisions are not inoludod In this determina­tion of tho four loading linos because, on tho basis of oapltal invest­ment and other criteria, it appears that tho middlemen in this lino operated primarily as commission merchants or brokers. By 1920 those four linos aoeoumted for only 50*6 poroont of total sales with grooorios having 25*7 percent) dry goods, 16.8 poroont) drugs, 4.3 poroont) and hardware, 3*8 percent. Of tho fourteen linos for whioh data are avail­able, eleven Inoroasod in relative importance while only throe,

*groearlaa, * 7 podf, u d * t m * u d tin, <mp— id. Ih# nktlvi poal- tion «f tha four aaat lap art ant Hnaa 1a ahoaa In figura 3.

Flfon 3

All othar

HirdtanDrofi

Dry gooda

Qroearlaa

i

\'*s'\, N* •

i\\1 "» .

1990 1900 1910 1920Sovrans Caloulatad froa Tab la 39*

Rlihawd M b a r SalaaHr u b m

lhara la Uttla apparoat raaaoa far tha ohangaa la tha pro­portion of total aalaa of tha faar llaaa* dlthangh grooarlaa dncHnari la laportanaa, prvrlalaaa laaraaaad la tha aua parlod, Dry gooda alao Aanllnad iddla d n f laaraaaad la ralatlro Ij^ortanoa. Hurt of tha ohanga aay hava haaa doa ta ohaagaa la olaaaif ioatlaa aa tha part of tha aMuattr. It la aaaaalaahla that arar thla parlod Mhltty raalaaalflad

4»certain fins fxun tha grocery Jabber line to the oenalealon or brokerage line* It ahould alae be roongnlaad that the line smnmpBeel ug sewing — chinee, aetsuoblleo, robber and apertlng gooda was bound to lnoreaae la relative Importance during thla period beoauae of the developannt of m v produote* The Increases la the oeal, wood, and bay line and In tbe railway, alll, and plirtl eg supplies Una were probably due to an in- ereaae In ooal oaas— ptlen during the war period aid the building expand •ion 1— art lately after the war* feMMOiL Period i

Little qualitative Information la available for the period X990-1920* Such wrltlnge aa are found deal largely with Riohaond'a In­herent advantages aa a ldioleaale trade oenter and laudatory oounaata on the eaeelloat Jab done by the vholeealore* hsphaaia 1a placed upon ex­panding aalea with little reoegnltlon of other than downward price ohaagee which nl^t affeot overall aalea* Te a great extent there was pride over what had been aeeonpllahed without a neaaureuent of what should have been achieved* Qreater emphasis was placed upon the expan­sion of terrltoriea of operation rather than nora Intensive cultivation of existing terrltoriea* It waa like the eld agricultural system baaed upon use of new lands rather than development and use of present lands. Typical of the statements frequently node are theses

Klehnond aarohante have each year extended theterritory in which they have been endeavour! ng teeell their goods# but thla year little waa done In thla reepoot*?

Sane of then (drwnnere) are oooaalocally aeon

5. Xhft IXmm* Til, Be* 271, flee ember 31, 1B93

61kwkj *ff on the Paelfio ootai) others htT« baooa familiar figures In Hew England town j the Mississippi country la well-known ground to othera of then, while in greater numbers and more frequent Tlslte they aake themselves at hone In interior Virginia, in North and South Carolina, Georgia,Alabama, and all our southern alater states, and in Vest Virginia, Kentucky, and Ohio,®Xn 1093 the 164 jobbing houses in the olty began to feel the

lapaot of the depression and there was aneh hand-to-mouth buying on the part of reteilers. Whltty reported, "Kxtreae eoonouy and careful oorutinisation of oredits has narked the whole yeer*s transactions...."7 The downward movement of sales lasted through 109A.

By 1095 both dollar sales and unit sales had started on the long-run upward swing whioh was to last for over a decade. This was the period of business and industrial expansion whioh pushed outward our eoonomio frontiers. There were great advances in all ferns of oomnmioatloa. Railroad construction inoreased and between 1890 and 1910 construction of new mileage averaged 5,000 miles per year.® These developments oreated, in faot, a national aarkat for the products of the nation. The eleotion of McKinley in 1096 started a period of prosperity whioh lasted until the panio of 1907. The years froa 1907 were characterised by unsettled conditions until the beginning of war prosperity in 1915*

6, ^ Diana tab. Re* 11701, January 1, 1009*7* Q r , glOtUMRA ZAflUb TII, Re* 271, Deoenber 31, 1093*8* R* B. Vhalkner, ARREAMft IURUBAA History. (*ew Torkt Rarper and Brothers, Fifth Bditiou, 1913), p* 607.

I*it B u m

Shortly after the tern of the eon tar/ liehoood Jobbers entered Into e program d«il<i»d to expend eelea by reimbursing eerohento for their reilreed feree9 la whole or la pert, when they oeae to Rloh-

to btf. Ie 1903, 160 aero hen te were brought to Riohaond, dateAporobues, exnlssive of groceries ead provisions, amounted to $120,931*31;

In 1994 about 40,000 levitations were Issued whioh resulted In selee aggregating $80,000 et ea expense of feres returned of 1*1 percent*^The 1904 Report of the Cheaber stated,

Rhllo the aaouat of sales Is e cooperative saell prepoet lea of the Jobbing trade of Riohaond, the greet advantage is that the plan brings aeny new aareheats to this market, who have an epper- tailty of booonlng personally acquainted with m r Jobbers end of inspecting their various stooks, thereby foraing eeaaeetlone and beooaiag peraeaent customers of Riohaond dealers, instead ef seeking their eapplies, as they night otherwise do, in Rerthern narks te*3-1Althoi^h ths program was oontinwed into the aiddle 1930as,

ears end more Jobbers withdrew boo ease of differences error the timing of the promotion, ead In leter years participation was limited almost en­tirely to the dry goods houses* More and aare entertainment was pro­vided and in the last few years the merchants were brought to Riohaond and thorn transported abovt 1D0 miles away for a day at tho beaoh*

9* Richmond Chamber of (Isememe, iflUUJL Raport- 1903* 111* Richmond Cheaber of Comsoroe, 4burL Report. 1904* LU JfcU*

63gvnllaal Fluctuations

In an analysis of a Market it la Important to study tha sales reaotlons during tha various phases of tha business cycles. Such analysis provides information relative to the stability of the particular market as compared to the stability of other markets of the oountry as a whole. Cyclical fluctuations of sales oan be calculated by determining the percentage relationship between sales and trend for each year. Results of these calculations are presented in Table 8 and illustrated in Figure 4,

The oyolioal periods for Riohaond sales were of longer dura­tion than were the cycles for total sales of the country. The downward cycle of Richmond's sales whioh began in 1891 moved from 170 percent to 81 percent of trend in 1898, In this period, total United States sales moved from a high of 129 peroent in 1890 to 90 percent in 1894, up to 102 percent in 1895, down to 88 percent in 1896, and up to 96 percent in 1898, The apparent cyclical movement of Richmond sales for these earlier years may be unduly influenced by inaccurate data. The pre­cipitous nevement between 1890 and 1893 is without apparent justifica­tion and may have been caused by errors or changes on the part of the enumerator.

From the low point in 1898 the cycle of Richmond sales moved steadily upward until It reached 103 percent of trend In 1903, It re­mained above 100 percent until 1914, when it dropped off one percent. Using departures from 300 percent as points of measurement for the dura­tion of the oyola, Richmond sales completed one cycle between 1894 and

u

Tbblo 8Itohund Solon u d Total Umltod Stoton Solos

An o Poroont of Trood1890-1915

ZM£ V cJm n bAW u

BiJJmhLU t t

tec lidjUKBdSate

MUfatA 8 to tonSate

1890 1178 1298 1903 948 9981891 173 129 1904 94 941892 155 119 1905 94 1071893 127 98 1904 103 1091894 100 90 1907 101 1051895 97 102 1908 100 841898 88 88 1909 101 1001897 u 94 1910 102 991898 81 94 1911 102 931899 85 94 1912 103 1041900 87 93 1913 103 1051901 88 98 1914 99 941902 90 102 1915 99 103

ftovroot Coloolo tod fro* Toblo 39 ond 41

80

7060504030ao100

ID»

3040

65

FIgmrm 4ParoMtaft Fraa TnaA af Jakblag 9a 1mmla Blihmi mad Tatal W. 8. Salas

1090-1915

1900 1910 1915

661914# while total Uni tod Statos sales completed four oyoles In tho same period. Tho average deviation froa trond wao 11.7 poroont for Richmond oaloo and 7.6 poroont for Unltod States sales. If tho years 1B91 and 1B92 are ollalnatod froa tho calculations, the average deviation for Riohaond sales was 8.4 percent.

Figure 4 Illustrates the validity of the statement that Rich­mond* a economy is somewhat mors stable than the eoonoay of the country as a whole. While United States sales move through four eyeles Rich­mond sales ooopleted only one. This is especially apparent during tha period 1904-1915.

Analysis of Selected Linos An analysis based upon total sales is Incomplete since no

recognition is given to changes by lines within tho total. The follow­ing analysis is presented for groceries, drugs, dry goods, and hardware as typical Jobbing lines) lines for whioh the jobber or wholesaler has been predominant in the channel of distribution. While aertain limitations are imposed upon the analysis because the lines as delineated are not sharply distinguished in all cases the limitations are not sufficient to invalidate the results.

The classification of groceries for Riohaond includes con­fectioneries , liquors, cigars, tobaooo, and soft drinks. The Bureau of labor Statistics index of wholesale prices for foods has be si used as most closely related to the Richmond class if ioation# while the index of total United States sales was developed by combining the value of pro­duction for dosmstio consumption of manufactured foods, non-aanufaotured

67foods, and tobacco* Tbs Riohaond dry goods classification is a acombination of thrso subclassiflostionsi dry goods and notions} boots and shoss} and bats, cape, clothing and ml11 insry. Ths prios index is for olothss and clothing and ths indsx of total United States salsa was oaloulatsd froa ths indsxss for dry goods and notions, olothing and psrsonal furnishings, and shoss and othsr footwear* Ths prinary diffsrsnos in ths drug lins arises froa ths uss of a prioa Indsx for drugs and chemicals as proridsd by ths Bureau of Labor Statistics*

Ths hardware line presented ths aost difficult problem be­cause the Rlehaoad data are for hardware and agricultural iag> laments, while the aost nearly comparable prios indsx was for astals and aetal produets* As no single classification was available for United States sales, an index was developed by combining the index for farm equipment and for carpenters* and meohanios tools*

The wholesale cosnodity price indexes are presented in Table 42 of ths Appendix* The indexes of the Value of Ohited States Output of Finished Commodities for Domes tie Conswption whioh are used to measure United States sales are given in Table 43 in the Appendix*

The Indexes of dollar volume and physical volume of sales by ths four selected lines are presented in Table 9* The dollar sales in­dex for groceries mas considerably higher than the others at the start of the period and moved upward more slowly until 1910* Part of the slower movement in groceries was the result of a slower change In prices as Illustrated in Table 42* During the period 1090-1910 ths price index for foods was below the lowest of ths other three lines for

68

Tab it 9Lad#*** of Kloharmd Jobboro« SaIm

tf SalMtod Udm 1890-1920(1913 • 100)

fcy foods Dnfi Hordsoroloor 8>U*r Agnleal Dollar fbpalool Dollar Rqnlcol Dollar Rinlool TUMI TOlMO TOlMO rolMO T01MO Tol»o Vol«. TOluT{7 7® 37 19 36 fco 37 322® *s » fo ho u>Jfi* » “a 37 M. ha b6 k22 ? W M 3 S » » I i 3 26 30U9k 71 95 25 32 36 kk 25 35U95 73 99 32 k2 36 kk 26 35KH 7* 96 35 h6 J7 I13 26 37U97 71 H 36 50 36 12 29 381696 69 9h hX 55 39 hi. 29 kO1*99 7h 300 h9 &L h5 h5 kO 361960 76 98 51 56 k8 k7 h9 hS1961 63 105 52 65 52 SO 51 WU* *2 100 53 6k 55 53 S3 55W 79 95 Sk 63 58 S5 56 60UO* 77 >1 55 62 60 57 5 6 6 61905 i t 56 62 66 65 6k 6 1 6 2

1906 66 104 77 78 71 7k 65 5719*7 6* 103 77 60 75 76 71 68UOl 65 >6 77 82 60 61 77 611989 15 52 61 63 62 82 60 661910 22 21 66 16 16 66 9 2 2 81911 96 99 69 93 69 87 89 100191* 99 95 92 95 92 91 97 981913 100 100 100 100 100 100 1 0 0 1 0 0191* 99 97 96 100 92 92 97 981915100 95 96 96 69 6? 101 1021916 102 8k 99 76 93 51 105 65W7 IK 69 113 65 116 56 120 521918 166 7 6 1 3 9 61 159 7k 151 811919 163 6 6 1 6 0 63 1 9 1 U 3 16k 113WO lh 8k 152 51 192 96 167 97

M r n i O alcilaU d t t m d iU la Tabla* 39 *ad k2.

631$ years, with an average difference of 6*2 Index point*.

figure* 5-3 Illustrate the trend of the physical volume ofsales for each line together with the Index of physical volume ofsales for eaoh year. As in previous calculations the atypical waryears 191&-1920 have been eliminated.

The trend of tne physical volume of sales for the grocery jobbers remained constant with an Increase of only two Index points over the 26-year period* Fluctuations from trend were frequent but not of long duration or very severe* On the basis of this evidence one might assume that grocery sales actually declined on a per capita basis. Such an assumption is not correct, however, because it is known that people did not eat less* Actually this is a result of a consider­able contraction in the area served by the Richmond jobbers during the period as well as the establishment and growth of competing houses in the area*

The trend of sales for drug wholesalers moved upward an average of 2*A index points a year, while for the dry goods jobbers the upward trend averaged 2.5 index points per year, and for hardware it was 3*2 index points per year* These annual trend increments, as a percent of the midpoint year value, are shown in Table 10.

no100

90

80

70

40

50

40

30

20

100

VFifup* 5

Trend In the Phjvlotl Volant of Soloo of Rithnond Qrooory Jobbers

1890-1920(1913 » 100)

» *_________ i_________i_________» «1890 1895 1900 1905 1910 1915 1920

3

120

110

100

90

8070

60

50

40

30

20

10

0

figaro 6Triad in tho Pkytloal Volwo of Soloo

of Rlohaond Drag Jobboro 1890-1920(1913 * 100)

Trond -

Actual

■■ 1 *■---------------------------- 1----------------------- — i---------------------------- 4. . .... — i

1890 1895 1900 1905 1910 1915 1920

3

110

100

90

80

70

60

50

i0

3020

10

0

rifn 7Trond 1a tho Physical Tolaw of Salas

of ElshBond 0x7 Goods Jobbors 1890-1920

(1913 * 100)

Trond

i______________ i______________ i-------------- 1-------------- j-------------- 1-------------- 1

1890 1895 1900 1905 1910 1915 1920

w

120

H O

100

90

8070

60

50

10

30

20

10

0

r i f m ITrend 1b the Phyeleal Velne af Sales

•f Blah— d lardvare Jobbers

Trond -

* i »______________ i-------------- 1--------------1— ----- i

1890 1895 1900 1905 1910 1915 1920

3

74Table 10

Average Annual Inoraaaa In Trend of the PhysicalVolume of Sales

1890-1915CljggJXifilUm ilttUE fititott. Ifl hjnAYxhia.HL ATeraflS Annual In-

Indtl £aAflll £ax. Mld-ffllflt I m crease la Trendleer 1902 from M^i-noint XlftC.Groceries 0.1 100 0.1*Drugs 2.4 60 4*2%Drr goods 2.5 65 3*8*Hardware 3.2 60 5.6*All Commodities 2.3 72 3.3*

Sourcet Calculated from data In Table 9.In spite of the greater slope in the trend line the hardware

Jobbers experienced the greatest fluctuations in physical volume of sales. This nay have resulted, in part, from using a price index baaed upon metals and metal products, which are notorious for wide price fluctuations during periods of prosperity and depression.

As mentioned previously, the four states Virginia, North Carolina, South Carolina, and West Virginia, which constituted the core of the Riohmond wholesale market, had an increase in population of 54*5 percent from 3890 to 1920, or an average annual increase of 1.3 percent. This was a less rapid growth than the growth in physical sales volume of any line other than groceries.

To state that there is growth in either dollar or unit sales does not give the complete picture unless the growth is compared to sales in other sections or for the country as a whole. No correction for price changes have been made In the data on United States sales be­cause it is believed that wholesale prices in Richmond probably

75fluctuated in the s t u MniMr and to the same degree as did such prices throughout the country. The comparison of Richmond sales and United States sales has three primary weaknessest (1) lb does not provide for changes in the channel of distribution whereby the wholesaler is no longer a part of the channel, (2) because yearly sales are derived from production figures, it assumes that each year's production moves through the channels of distribution in the year in whloh it is produced, and (3) it assumes that the coonodlties which are included in the United States sales group are comparable to those included in the Richmond sales group. Although the mail order house, the chain store, and the department store, each of which tends to circumvent the wholesaler, had its major start during the period, none experienced its greatest growth; so it is felt that their Impact was not sufficient to invalidate the analysis •

Table 11 contains data on Richmond sales per $1,000 of United States sales while Figures 9-12 illustrate the trend of Richmond sales per $1,000 of United States sales.

The trend for the grocery and drug lines were downward at an annual average rate of $0.17 and $0.03 respectively per $1,000 of United States sales, while the trend was upward at an annual average rate of $0*03 for dry goods and $0*16 for hardware. These variations among the lines can be explained best through analysis of population changes and trends.

From 1390-1920 there was a shift of population from rural to urban areas, and at the same time the proportion of total United States

IftftC14901491149214931494149514961497149414991900190119021903190419051906190719041909191019111912191J1914191519161917191419191920

76Table 11

Riehaeond Salsa Far $lf000 of United States Sales1490-1920

Orooarias Bq c i Bex b s Am.9 6.04 • 13.55 $ 5.36 $ 10.316.54 13.74 5.67 13.466.41 13.65 5.15 12.915.37 12.59 5.54 6.44

5.49 11.75 4.53 10.375.73 10.73 5.15 10.955.44 10.77 5.56 10.195.10 10.40 5.97 9.404*43 10.42 6.37 8.594.63 11.32 6.28 10.134*54 11.44 6.16 11.924.24 11.33 6.05 11.284.04 11.23 5.48 11.263.40 U.ll 5.71 11.243.54 U.00 5.54 11.213.69 10.14 5.66 11.243.57 10.59 6.03 9.653.57 11.05 6.14 11.703.57 11.52 6.26 13.403.04 10.99 5.86 11.652.97 10.77 6.33 13.063.05 10.67 6.20 13.102.92 10.71 5.62 12.722.93 11.34 6.25 12.122.46 10.75 6.63 12.642.97 9.07 6.74 11.922.52 7.43 5.16 9.762.15 7.72 4.57 9.742.26 6.39 4.39 10.142.59 9.73 4.50 11.002.41 4.40 3.40 14.50

Sooroet Calculated from date in Tables 39 and 43 •

77

6.00

5.00

2.000.00

1890 1895 1900 1905 1910 1915Figaro 9Trend In Sales of Richmond Grocery Jobbers

Per $1,000 V* S, Grocery Sales 1890-1915

78Flguru 10

Trtad in Salaa of Rlofcnond Drue Jobbora Fur $19000 V. 3. Drue Suluu

1890-1915

13.00

12.00

11.00

ID. 00

9.000.00

1890 1895 1900 1905 1910 1915

79Flyura IX

Tr*nd in Sal*a of Rlahaond Dry Gooda Jobbor* For $1,000 U. S. Dry Goods Sal*a 1890-1915

$ 7.00

6.00

5.00

a0.00 1910 1915190519001895

80

Figur* 12Trond In Salaa of Rlohaond Hnrdvora Jobbora For $lv000 U. S. Hnrdunro Salaa 1890-1915

$ U.00

13.00

12.00

11.00

10.00

9.00

0.00o.oo '------------ 1------------------------------- ’1890 1895 1900 1905 1910 1915

dlpopulation residing In the area served by Richmond wholesalers was declining. This proportionate decline in population in the Richmond area would in itself cause a decline in the proportion of total sales made by Richmond jobbers unless they had expanded their territories during the period. The period of expansion of territories ended for all practical purposes at the close of the century and so there was no compensation for the shift in population.

The shift from rural and urban centers or areas could have contributed to the differences in trend among the lines. As people be- corns more concentrated in a particular area and change from rural to urban living, they raise less food for their own consumption. Ihe in­creased consumer purchases with the resultant increase in retail pur­chases in the local area permits the establishment of wholesale houses in that area. The volume of wholesale sales necessary for successful operation can be achieved in the smaller area with less transportation involved. This would account for the greater decrease in trend of grocery sales than for other lines because of the establishment of new houses in new or enlarged population centers.

This same theory used for groceries would also apply to drugs with certain modifications. Inasmuch as there are fewer drug stores than grocery stores per thousand population the concentration of population would have to be greater to warrant the establishment of a wholesale drug house. Also in rural communities trie physician dispenses a larger proportion of drugs used than in urban territory.

The above situations would appear to apply insofar as dry

8 2

goods sales art oonoerned, and yet the Richmond wholesalers wore able to increase thalr aalaa par $1,000 of total United States sales. This ■ay haws resulted fro* a more aggressive type of operation on the part of the Rlohmond merchant which more than compensated for the factors contributing to a decline. During this period Richmond was strong as a wholesale dry goods center, and the local houses covered an area which was much larger than those covered by either the grocery or drug houses. While the latter houses concentrated their sales in Virginia and North Carolina, the dry goods houses extended their operations into Florida and Alabama to the south and into Tennessee and West Virginia to the west.

The same factors which contributed to the downward trend in the grocery and drug lines would cause the hardware trend to be upward. It must be remembered that the hardware classification included agricul­tural implements and that the South has been predominantly agricultural in its economy. Added to this is the fact that for a long period after the Civil War more and more of the farms were operated by tenants.From 1390—1920 the proportion of farms operated by tenants in the South

1*7Atlantic States increased from 38 percent of all faints to 47 percent* ' This inoreased the number of potential purchasers of agricultural implements• The data on United States sales are for farm equipment and for carpenters* and mechanics* tools. Practically every farm has a complete supply of such tools with a resultant greater sales per person

17* H. U. Faulkner, Economic History. (New York:Harper and Brothers, Fifth Edition, 1943)* p* 394*

83among rural population than among the urban population.GroHeal Fluctuations

A comparison of the cyclical fluctuations of Richmond sales and total Unitad States sales by lines is possible by calculating sales as a percent of trend In each case* These data are presented In Table 12* While the cyclical movements of total Richmond sales Indicate greater stability In the Richmond market than in the country as a Whole, such relative stability is not true in each line. The sales of Richmond grocery jobbers moved through almost three cycles during the period 1890—1915, while United States grocery sales moved through two cycles. The average deviation from trend in groceries was 4*3 percent for the Richsrond wholesalers and 9*7 percent for United States sales. Much of this difference can be attributed to the extreme movement of United States sales during the period 1890—1896.

Sales of Riahmond drug jobbers moved more closely with United States sales than any of the other three lines under considera­tion in spite of the faot that Richmond sales completed only one cycle during the period, while United States sales moved through two and one-half cycles. The average deviation from trend for the Richmond wholesalers was 11*4 percentjfor United States sales it was 10*4 percent.

The average deviation from trend of the Richmond dry goods Jobbers from 1890-1915 was 15*9 percent, while for United States sales it was 11*8 percent. This difference was due primarily to a greater drop in sales of Richmond jobbers in 2J&94 *nd in 1904* From 1894 until

84

Tabla 12Ushaond Jobbar SalM u d 0. S. Stl«i as Paroant of Traod

By Solootod Llnoo X®90-1915

Unhannd Jobbar Salaa 0. S. SalaaIbbl teBMCtML B n n ttnr rerti M m . torairidt V n n ttPLdagfli fclau1890 100 150 168 218 143 155 159 2321891 118 148 156 215 138 143 148 1441892 116 143 132 183 121 133 141 1301893 106 118 113 100 128 120 114 1121894 97 100 74 89 100 103 92 811895 99 95 86 85 100 109 95 791896 96 88 88 76 83 93 84 581897 93 86 88 73 87 89 87 641898 90 83 91 67 88 88 82 851899 95 90 100 85 92 88 94 921900 98 91 98 98 93 85 95 911901 102 93 95 96 100 90 93 951902 100 93 91 93 97 95 93 1211909 95 92 89 93 94 95 97 971904 92 92 86 92 94 91 93 931905 95 96 93 91 93 100 97 941906 101 100 n o 93 99 100 110 1101907 100 188. 105 97 103 108 108 1091908 100 104 101 100 92 95 99 861909 98 109 101 100 102 99 106 1021910 100 104 104 111 106 101 101 10119H 109 103 103 102 103 102 103 931912 105 105 103 108 108 101 107 1001913 104 109 109 108 105 100 108 1051914 102 98 109 100 103 95 97 951915 102 92 98 101 97 105 90 101

Soaroot CaloiUiod frca Tabloa 39 aad 43

851904 the Riohmond cyclical movement preceded that for the United S La tec. During the period Rlohnond sales in dry goods coaipleted one full cycle, while United States sales moved through two cycles.

From 1890—1915, United States sales of hardware went through several rather sharp oycllcal movements quite unlike sales of Richmond Jobbers* Sales of both groups experienced a precipitous drop from 1890 to 1896 In the case of United States sales and between 1891 and 1898 for Richmond sales* From 1898 Richmond sales moved generally upward while U* S. sales had very sharp cyclical movements. The average deviation from trend for sales of Richmond hardware wholeralers was 20*1 percent, While for United States sales it was 17*8 percent* This entire difference in deviation Is due to the fact that the drop in sales of Rlohmond Jobbers began a year later than the drop in United States sales*

It is significant to note that the average deviation from trend for all Richmond Jobbers during the period 1890—1915 was 11*7 percent or less than the hardware and dry goods lines, more than the grocery line, and about the same as the drug line* It should also be noted that all the averages have been exaggerated by including the first five years of the period in the calculation inasmuch as these years showed the greatest deviation from trend* Were these years ex— dialed, the average percent deviation from trend for sales of Richmond Jobbers would have beens

Groceries 3*2$Drugs 6*5Dry goods 6* 5Hardware 9*2

86Furthermore, the differences In deviation fro* trend of Richmond sales and United States sales would have been narrowed considerably by exclusion of the first five years of the period. Average deviation fro* trend of United States sales would have been 5.8 percent for groceries, 5.6 peroent for drugs, 6,5 percent for dry goods, and 10*8 percent for hardware.

Developatents During the Postwar Period1921-1928

Data such as were found for the period 1B90-1920 are not available for the years limed lately following. Whitty concluded his series in 1920 and no coaparable data were accumulated until the Census of Distribution in 1929. For the drug, hardware, and shoe lines certain sales data are available, which were collected in Richmond on a saaple basis. These data are presented in Table 13.

Dollar sales of Riohmond drug wholesalers reached their peak In 1927, While the hardware wholesalers had peak sales in 1923 and shoe wholesalers had their greatest sales in 1922. After 1927, drug sales declined through 1929. With the exception of 1927, hardware sales declined each year after 1923. Shoe sales declined until 1926, went up through 1927, and then declined through 1929.

For all practical purposes, the physical volume of sales of Richmond Jobbers In the drug, hardware, and shoe lines moved in the same manner as did dollar volume. The only basic exception to this was in the hardware line, in which the peak year in physical volume of sales was 1927 instead of 1923, the peak year for dollar volume.

It can be said that during the period of generally expanding

XM£

11211122112311241125 1124 1*9 1122 1121

Table 13Elehaond Jabbing Salee

By Selected Linen112L0921

(la thousand dollar*)

Uit iiiaA ftyiaai Toi— ftiUit !s4b b BuiJtesl Iti* liUAt Itbn itoiisai t»i—B l C «f Ulm* tfklM1 2*1— tfCliCI1

M . $ 2#3<7 | 2,031 $ 1,752 $ 1,4121,3» $ 1,323 2,526 2,455 1,215 1,2U1,712 1,214 3,112 2,253 1,230 1,7561,727 1,726 2,124 2,751 1,442 1,4211,211 1,257 2,7a 2,636 1,364 1,2161,227 1,227 2,6(7 2,6(7 1,(40 1,4401,175 2,055 2,175 3,023 1,747 1,6221,150 2,053 2,720 2,204 1,662 1,3611,241 1,167 2,423 2,471 1,575 1,444

M . - Bet available.Soanei a. Unpublished data, Federal Keeerre Bank of ftlohnond.

b. Calculated by applying prlne Indexes as given In Table 44 to dollar eales tqIvbo.

3

88business which prevailed throughout the United States during the decade of the twenties, the sales of Riohmond Jobbers in the lines covered did not expand accordingly. The period was narked by generally declining prices in the drug, hardware, and shoe lines, and sales were not main­tained at a level sufficient to increase the physical volume of sales ever the period.

Fart of the general decline in sales which occurred after 1927 was due to a decision of the Interstate Commerce Commission limit­ing the area served by Richmond wholesalers by reducing their competi­tive advantage due to freight rates. This decision and its effects are treated sore fully in a later chapter.

SummaryPram 1365 until 1928 Richmond became the leading center for

wholesale trade between Baltimore, Maryland, and Atlanta, Georgia,Much of this development was due to its location at the falls of the James River with resultant good water transportation facilities during the earlier years of the period. later the city became a rail center and Junction for main lines moving north and south, and east and west. Coaibination rail and water rates as well as competitive rail and water rates resulted in lower transportation costs. Finally, the action of the Interstate Commerce Comisaion which resulted in Richmond being the southernmost city in Official territory resulted in very advantageous rates .

Riohmond merchants were in dire straits after the close of the Civil War with their places of business destroyed and little or no

89capital available for operatione. By 1880 the Merchants of the city were well on the way to regaining former markets and expanding terri­tories of operation. This expansion continued until 1900.

Significant in the post-bellum development was a lessening of the antipathy on the part of leadlug members of society toward the merchant class. This was due primarily to the gradual disappearance of those generations actively associated with the ante-bellum agricul­tural society.

From 1880 until 1927 sales of Riohmond jobbers increased in both dollar volume and physical volume. Dollar sales increased from •17 ,000,000 in 1880 to $131,301,000 in 1920, or 790 percent. Using 1913 *s th* base year the index of the physical volume of sales in­creased from 48 in 1890 to 101 in 1914 and then flsll^tff through 1917 to a level of 66 after which it rose to 83 in 1920. Thus, in 1920 the physical volume of sales was 83.3 percent greater than in 1890.

From 1890 to 1915 the proportion of total United States sales made by Richmond Jobbers decreased. Measured in these terms Richmond jobbers achieved their moot favorable position in 1893 at which time the index of Riohmond sales as a proportion of United States sales was 139* In 1920 this same index was 66.

During the period 1890 to 1915 the capital invested in Rich­mond wholesale houses increased 160 percent. Dollar sales per dollar capital investment increased from $4*29 in 1890 to a high of $8.23 in 1919* Physical sales per dollar capital investment remeined fairly constant between $5.10 and $5*98 from 1890 through 1915 after which they

90fell to $3.49 1a 1920.

The pattern of wholesale sal as by lines changed rather radically during the period In question. In 1890 the four leading lines (groceries, dry goods, drugs, and hardware) accounted for 73*1 percent of total Rlohaond jobbing sales* By 1920 these lines accounted for only $0*6 percent of total sales* Groceries and dry goodb were two of the three lines which declined in relative importance during the period*

Xach of the four jobbing lines given above had an upward trend In physical volume of sales during the period, but on the basis of proportion of total United States sales the grocery and drug whole­salers experienced a downward trend, while the dry goods and hardware jobbers had an upward trend*

The oyclical variations in sales of Richmond jobbers were not as sharp, but were for longer duration than was true of total United States sales* This evidence supports the local belief that Riohmond is not as strongly affected by national business cycles as are other sections of the country.

Actually the period from I860 to 1928 saw Richmond reach its peak position as the leading wholesaling center between Baltimore and Atlanta and start the decline in relative importance within the area*

CHAPTER IVDtvalopaanta Ln the Riohmond Wholesale Market. Since 1929

The years 1929 through 1950 ere tree "ted together inasmuch as the Bureau of the Census has made available accurate statistical data on the operations of wholesale establishments through the Censuses of Distribution and Business. Data on operations are available and have been used for the jeers 1929, 193 5, 1939, and 194B.

The 1929—1950 period is significant for analysis because it encompasses years of prosperity and depression* Sales of Richmond Wholesalers began to decline in 1928, while those for the country as a whole started downward in the latter part of 1929* The nation ex­perienced its most serious depression ln the early 1930*s and .hen re­covered steadily through 1939, with the exception of the recession of 1937* From the recovery period the nation moved into an economy doadmated by World Whr II with resultant material shortages, substitu­tions, rationing and price controls. Following the removal of price controls there developed an inflationary period similar to that which followed World War I. During the inflationary years prices reached the highest levels in our history. In this chapter an analysis Is made to discover how the wholesale establishments of Richmond fared as compared to the wholesale establishments of Virginia and the United States.

91

92Th« ual/tli tf tli* ptrlod 1B6W92I «u lltltod, by m i l -

able data, U wholesalers ar jobbers rather than all wholesale establlsh- n— te« It shoaid be reeepd.aed, k o a m r , that at laaat wit 11 the and of Vorld Har I, tka Jabber ar wholesaler ana tha predominant lUdlaan In­volved la aha la aa la trade. Far ua^pla, la 1929 aarahant idiolasalera rap— a— tad 47*1 paraaat af tha tatal a— bar of wholesale eatabliah- — nts, af>1 oyed pare— t of tha total a— bar of — ployses, and — da12.7 peroant of tha total — lea*

For porpoaaa of this analysis — olaaala trada inolndaa *aatah11ah— nts prt— rlly engaged la selling — rohaadlaa to retailers, to lad— trial, oo— erelal, institutional, ar profaaaional users; ar to athor whale— laraf ar aatlag as ag— ts la sailing — rebaadlaa to (or baying — rohaadlaa for) a— h oonpanlaa or para— a* A wholesaleastabliahn— t la daflaad as a "saps rate plaoa of b— ins* a prl— rlly aagagad la sailing, or — ting aa aa ag— t la sailing — rehandlaa to (ar baying for) b— tnass o— aarna, re— rdles* af whether tha lattar para ha sad for raaala ar far boa ins a a — e."2

In addition to tha oln— ifl— tlon baa ad op— tha line I— Hal, bought, ar sold, tha aatabllah— t a— ba o la sal f lad Into one af tha fallowing five groopa — cording to tha typa of operationt nar— ahant oho la— laraf — nmfbetarero1 — 1— branchaa, effioes; petroleum

1* V* S. Cana— of Fastness - 1940, Wholesale Xllit. ** gf t a U X (Waahlngt4

►tin 1-0-0, 1951), p. 0.00.2m Pm 0*33•

lhjJttl Ftatoa (haahingt— s V* I, Qeven— t Printing Office,

wtadJc stationsf terminals; aftnti, brokers; and assemblers *3 These classifications are defined as follows s

Msrohant wholesalers "consist of establish­ments snally known as wholesalers9 distributors, or Jobbers, primarily «afi|sd In buying, taking title to. and where owe ternary, physically storing and handling goods, sad selling the goods at wholesale principally to retailers and to In­dustrial and oossssrelal users. The group Includes Industrial distributors, exporters, Importers, oash uivt-osrry wholesalers, drop shippers, wagon distributors , eta*"

Manufacturers * sales branches, offlees "consist of establishments nalntalned apart from plants by manufacturing and mining colonies primarily for selling or marketing their products at wholesale *■

Petroleum bulk stations, terminals "consist of petroleum bulk stations primarily engaged In the storage #nd wholesale distribution of gasoline, oil and other bulk petroleum products*"Agents and brokers "Include establishments the operators of which are in business for them- selves, negotiating sales and/or purchases in doomstlo and forel^i trade, but Who do not, as a

rule, take title to the merchandise**Assemblers "oonslst of establishment primarily engaged In purchasing and assembling farm products and oed foods in lbnel growers1 markets, at leoal prortmlng points, and In the oltles of producing regions* "4

3* Some authorities feel that a sixth classification, ohaln store warehouses should be reoognlsod* This was dene by the Bureau of Census In the 1929 Census of Distribution, but In later years ohaln store warehouses were Included in reports of retail sales* As data are not available for this classification for Richmond and Virginia, the classification has not been used.

A* JQtJA* i IV* #*33-0«3A«

94Analysis By Type of Opsration

Ths primary value of data by type of operation stems from the fact that It permits comparisons within the wholesaling structure. Through the use of such data one can determine the effects of economic ahanges as well as social and political variations upon the channels of distribution whereby goods are moved from producer to user*

The number of Richmond wholesale establishments and their sales for the four census years are presented in Table 14 by type of operation. From 1928 to 1948 wholesale sales in Richmond increased from $216,159,000 to $649,587,000 or 200.5 percent. Actually, the en­tire increase took place after 1939, as evidenoed by the fact that 1939 sales were still 3*7 percent below the 1929 level. Much of the increase was due to expanded sales during the war period and the inflation which followed the war.

When the wholesale oommodity price index as presented in Table 45 of the Appendix is applied to the dollar sales volume, the im­pact of price changes is removed and the result indicates unit sales or the physical volume of sales* On the basis of 1926 prices, the physical volume of sales of Richmond wholesalers \ma $226,820,000 in 1929 and had increased to $393,451,000 in 1948. This represents an increase of 73*5 percent in physical volume as compared to the 200.5 percent in­crease in dollar volume.

The physical volume of sales indicates excellent growth on the part of the Richmond wholesale establishments from 1929 to 1943, but does not indicate the extent to which the Richmond establlsnments

Table Un iptiyi Bbolsaals IstabUstesots — <*

By Typa of Opvatisa 1929-1948

(Soloo la thousand dollars)

1929*True of Oamatlm JMB£ flC Balsa

193^^ fel*

1939®fit Utt

194*4 i£ b l M

MilHe reheat shol*-

•alors 234 I 82,700 252feaafheturers* solos

braaobaa 41 95,735 &fetralmbulh

stations 7 7,111 14Afsats sad brabere 84 25,234 74issefelers

~-4Hi~ .. .u t r•214 99 413

H k Mil

$ 71,921 269 •104,745 423 ♦J29.5S*40,144 73 39,294 U1 197,92511,532 17 9,442 23 J4,11943,904 83 32,971 74 tzjm13-927

•181,430 45331-112

tan,S& ” 54 t 4 3 **Tfcis flfurs raprssonts H U other1 and laoladaa assemblers* lo aoparato data «a assariilsrt ara aralleble for Rlohaond la 1929* i«i. - lot available.

Soares: a. Fifteenth Coma of tbs felted Statast Distribution, Telwe II, fefcUfei*. Mafelhatli. 1930, p. 1484.

b, Conaoa of Baslaoaa: 1935, feolssala Distribution, Tolane III, GJUUftl IflA, e— «***■ 1937, p. St.

a, Sixteenth Census of tha Haltsd Statoa, Cansus of Business: 1939, Taln» II, i- Xo4t, p. 911,

d, V. S. Census of Baalaaas - 1948, Xodt* Bulletin 1 1-45, Tliflala, P. 45.08.

>0

96kept paoa with growth in Virginia, or in the United States. Tables 15 and 16 give the dollar sales for wholesale establishments in Virginia and the United States.

Dollar sales volume in Virginia increased from #621,139,000 in 1929 to #2,033*470,000 in 1943 or 227.4 percent. During the same period the physical volume of sales Increased from #651,772,000 to #1,23If660,000 or 89.0 percent. It is evident from tlieae figures that neither dollar volume of sales nor physical volume of sales of ine Richmond establishments Increased to thM name extent as did salon in the rest of Virginia. Of the three metropolitan areas in VirgLnia for utileh the census data are broken down, only Roanoke exceeded the state average on the increase of sales from 1929 to 1943. Roanoke wholesale establishments Increased dollar sales 244..4 percent and unit saler 98.8 percent during the period. Dollar sales in the Hampton Roaart area In­creased 185.5 percent and the physical volume of sales increased 64.8 percent. It is obvious that the growth in sales throughout Virginia was accounted for by increased sales in the smaller areas. This is es­pecially true when it is realized that the Richmond and Norfolk areas together accounted for 60*3 percent of total Virginia sales in 192° and 53.2 percent in 1948.

The wholesale establishments of Richmond and Virginia did a better job on the basis of sales growth than was accomplished in the rest of the country. Sales of wholesale establishments throughout the United States increased 174«9 percent from 1929 to 1948 on the basis of dollar volume, while the physical volume of sales increased 58.7 percent.

Table 15

Virginia Wholesale Establishments and Sale* By Type of Operation

1929-1948 (Salts In thousand dollars)

1929“ 1935* 1939° 19684True of Operation seat si Jliil M«ber g. SftiU Ihabor sL s«l«»l»t»blljh- Istablish- Istabllsh-

—nts nentsMerchant whole­

salers 1176 $280,713 1022 $196,362 1142 $275,773 1753 $972,533Manufacturers* sales

braaohos 154 136,136 174 86,380 194 96,389 278 609,752Fbtrelem bulk

stations 299 36,655 394 58,091 423 86,667 410 212,000Agents and brokers 320 103,171 278 126,258 313 118,153 314 351,079Assemblers _2&2318*

51J77 321 , 39.880 55.670 245 88JQ6Total $621,139 2123 $502,951 2432 4627,632 3000ta$2t033,470

•The report of the Bureau of the Census gars a total of 2,331 establishments but the component parts equal the total as presented.

**1toe report of the Bureau of the Census gave a total of 3f026 establishments but the ooaponent parts equal the total as presented.Source! a. fifteenth Census of the United States! Distribution, Volimm XI, tooloeale

Distribution. 1930, p. U83.b. Census of Business: 1935, Wholesale Distribution, Volwe III, States. 1937, p. 99c. Sixteenth Census of the United States, Census of Business: 1939, Volim II, .

Wholesale Trade, p. 281.d. U. S. Census of Business - 1948, Wholesale Trade. Bulletin l-W-45, Virginia, p. 45.02.

5

Table 16

United States Who 1*Ml# Ksta:;lishnents and Sales By Type of Operation

1929-1948 (Balts In thousand dollars)

1929* 193 5b 1939* 1913dtot of Operation latefl. 2l Salts Nafcn 2l Salts Kafe2£ St Sains Sflfeu g£ §ilfti

UUbllsb- hVtWIrt- toUbllih- hUbllM-M i l aints tu ts tn ts

Merchant shole-saltrs 79,840 $29,556,156 88,931 $17,661,691

Manufacturers* nits branehts andofflets 16,689 16,140,343 15,8*) 11,066,088

Pttrolet bulkstations 19,857 2,101,129 27,333 2,704,047

Agents and broktrs 18,388 14,256,695 18,147 8,908,07634.143 .left 7.CT. -2L312 2^fiL2U168,917 $66,661,902 176,756 i42,802,9l3

As st Alt rsTotal

101,627 $23,641,924 146,793 $79,815,763

18,096 13,526,202 24,167 52,858,37830,825 3,807,908 30,058 12,202,27820,903 11,201,035 24,377 34,619,208-2*13 3.088.571 M.3i9 10.984.671200,573 $55,265,640 244,705 $190,480,298

Sourcei a* Fifteenth Cantus of thn Uni tod States* Distribution, Volts II, Wholesale Distribution. 1930, p. 81.

b. Census of Business* 1935, Wholesale Distribution, Volts I, Statos. 1937, p. 117, o. Sixttanth Cans us of ths Uni tad States, Census of Business i 1939, Volts II,

WhoI,««I< Tr»d«. p. A9.d. U. S. Census of Business - 1948, Wholesale Trade. Bulletin 1-W-0, United States

Sutary, p. 0.02,

99In all probability tha cause for faster growth In Virginia

and Richmond than for tha country aa a vhola was the expansion of military installations and dafense production in the area, as well as the growth in population of tha area near Washington, D. C . Such establishments resulted in an influx of population from other sections, and these groups caused retail sales to increase with a resultant in— orease in wholesale sales* During the period Richmond remained the most important Wholesale city in the state, with 31*9 cents of every dollar of 1948 Virginia wholesale sales made by the Richmond establish­ments .

Within the wholesaling structure there were considerable variations among the establishments according to type of operation. Table 17 gives the proportion of total dollar sales made by each type of operation in Richmond, Virginia, and the United States.

Historically the merchant wholesaler has been the predominant institution in the Rlohmond wholesale market. The proportion of total salsa accounted for by this type of operation increased from 38*3 percent of the total in 1929 to 90*7 percent of the total in 1948.This increase took place in spite of the fact that the number of whole­sale establishments classified as merchant wholesalers increased only from 61*8 percent of the total in 1929 to 66*9 percent in 1948.

The ohange in proportion of total sales accounted for by merchant wholesalers in Richmond differed radically from the trend for Virginia and the United States* In Virginia the proportion of total sales made by merchant wholesalers increased from 45.2 percent in 1929

Tabla ITProportion of Total Salas By Typo of Operation

liohetmd, Tirglnla, and tha felted S to too1929*19a

W29 1935 1939 1948TmoMerchant ehola-

Uikc Uuliksal UL Efld. if YWtnt. gj. Uihe Virginiaa* Sii

•aloroMtnafectmrc*

oaloo branohoo38.35 15.25 11.35 39.65 39.05 11.25 50.15 13.95 12.75 50.75 17.85 43*85

and offiooo Brtralra boll

41.3 21.9 21.2 22.1 16.8 25.9 18.9 15.0 21.5 30.4 20.2 27.8•tattoo* 30 5.9 3.2 6U 11.6 6.3 1.6 13.3 6.9 5.7 ioa 6UAfoato and broker* 11.7 16.4 21*1 21.2 21.7 20.8 15.8 38.9 20.3 12.8 17.3 18.2Aoooabloro iua. 6.3 6.9 7.7 7.9 5.8 10.3 8.9 5.6 o a 1.3 5.8

Total 300.0 300.0 100.0 100.0 300.0 100.0 100.0 100.0 100.0 100.0

M « - Sot available, Classification of iosoabltrs wo not uood for Richmond in 1929* Source t Calculated from Tab loo 14-14,

101tc 47.8 percent In 1948, For the United States the proportion de­creased slightly from 42.7 percent In 1929 to 41,3 percent In 1948.

Comparison of Richmond and the other metropolitan areas of Virginia with aelected cltiea of North Carolina and Maryland shows that in the three Virginia cities the merchant wholesalers increased their proportion of total aalea while in the other cities there wan a de­crease, These data are presented in Table 13,

Table 18Sales of Merchant Wholesalers As Proportion of Total Sales

Selected Cities 1929-1948

(Salsa in thousand dollars)

£i£X SftJdA. Psroent Sales IsIa XMerahant S&JLftft Mirr-fynt. SaLsa

Baltimore,Maryland $318,523

Charlotte N. C. 81,567

Raleigh,N,C, 8,749 Norf olk,Va« 66,111 R iohmond , Va ,82,700 Roanoke ,Va. 19,040

Source: Bureau of tha Census reports — Wholesale Trade,In Virginia the proportion of wholesale establishments

claaaifled as merchant wholesalers increased from 50,7 percent in 1929 to 57*9 percent In 1943, In the United States the proportion increased during the same period from 47,0 percent to 59,9 percent. In other words, the number of wholesale establishments operated as merchant wholesalers increased more rapidly than did the total number of estab­lishments even though the proportion of total sales accounted for by

$651,096 48.9* $809,980 $1,774,608 45.6*189,949 44.1 28 5.607 990,088 28.822,086 39.6 86,922 237,947 36.5

153,754 43.0 218,600 452,197 48.3216,159 38.3 329,554 649,587 50.738,662 49.2 78,430 133,171 58.9

102merchant wholesalers decreased In the United States and remained relatively constant in Virginia. These data would indicate that the trend throughout the country has been for a larger number of establish­ments with smaller proportionate sales* It might be concluded that as business conditions improve, the number of merchant wholesalers in­creases because the inoreased business volune permits operation in centers not previously used as a location for such establishments*

Dollar sales per merchant wholesale establishment increased in Richmond 139.3 percent from 1929 to 1948j in Virginia 132.4 percent, and in the United States 46.9 percent for the name period* On the basis of the physical volume of sales per establishment, Richmond mer­chant wholesalers showed an increase of 38.1 percent as compared to an increase of 34.2 percent for Virginia and a decrease of 15*2 percent for tne United States from 1929 to 1948.

Any attempt to determine the reasons for the growth of mer­chant wholesalers in Richmond in face of an opposite trend for cho country as a whole must be dependent upon analysis of changes which occurred in other types of operation. While the merchant wholesalers of Riohmond Inoreased their proportion of total dollar sales from 38.3 percent to 50.7 percent from 1929 to 1948, the nmnufacturers1 sales branches and offices had sales which accounted for 44.3 percent of total sales in 1929 and only 30.4 percent in 1948* During the same period sales of manufacturers* sales branches and offices in Virginia declined from 21.9 percent of total sales to 20.2 percent. Meanwhile in the United States there waa an increase from 23*3 percent to 27.8 percent

103of total sales. As was true In the eaae of the merchant wholesalers, the trend In Richmond and Virginia was contrary to the national trend.

Although the overall trend of proportionate sales was down­ward for aanufaoturers1 sales branches located in Riohmond, they ac­counted for a greater proportion of Richmond wholesale sales than was true in the country as a whole. One is forced to question the accuracy of the 1929 data relative to manufacturers* sales branches and off'ices. No evidence has been found to indicate a large egress of such establish­ments after 1929* Error may have been present In either enumeration or classification for 1929.

The proportion of total sales accounted for by the bulk tank stations was slightly less in Richmond than for the United States and was much greater in Virginia than for the country as a whole. This latter was probably due to the presence of a large number of waterways for coastwise shipping which exist in the eastern part of the state.Much of the bulk petroleum products coming into Richmond are shipped from Norfolk by barge and then sent from Richmond by truck. According to representatives of the industry, very little of the bulk petroleum products received at the bulk stations are sold across the state line. The increase in Virginia must then result from an increase in domestic consumption. Since 1939 oar registrations in Virginia have increased from £80,190 to 813,323 or 69*4 percent.

The third most important type of operation measured on the basis of proportionate sales volume is the agent or broker classifica­tion. It is evident that agents and brokers are not as important a

104segment of the Richmond wholesale market an they are either In Virginia or the United States. During the period 102^—1^4^, however, this group increased its proportion of total sales in Richmond and V i r g i n i a by an amount of less than one percent, while in the United States their pro­portion of total sales decreased 2.1 percent. It is Interesting to note that during the depression the agents and brokers accounted for their highest proportion of sales in Richmond, Virginia, ana Lne United States.

Assemblers have not been very important in the wholesaling operations of Richmond business because littie agriculture is present in the immediate surrounding territory.

The proportion of total wholesale sales accounted for by this group remained fairly constant throughout the country ana In Virginia with the exception of 194B in Virginia* The fact that the Bureau of Census did not report on the classification of assemblers in 1929 would indicate very little activity. By t94^ they accounted for only 0,4 percent of the sales of Richmond wholesale establishments as compared to 5,8 percent In the United States and 4.3 percent in Virginia.

Changes in proportion of total sales by type of establishments In Richmond, Virginia, and the United States are illustrated in Figure 13* The fluctuations in the proportion of total sales accounted for by the various types of operation have resulted, with the exception of assemblers, from differences in the rate of dollar sales Increases over the period and not fraei a decrease in the sales of any particular type of operation. These increases are presented in Table 19.

AssemblersAgents and brokers

Bulk tankManufac­turer* ' salesbranch**andoffices

Merchant uholo­se ler*

Figure 13Co >o*ition of Total Wholesale Sale*

By Typo of Operation Richnond, Virginia, United States

1929-194*

1929 1935 1939Richaond1948 1929 1935 1939Virginia

1948 1929 1935 1939United States

Sourest Bureau of the Census Reports, Wholesale Trade.

1948

105

Table 19Increase in Sales by Type of Operation

Richmond, Virginia, and the United States1929-194B

Type Operation Richmond Virgin United StatesMerchant wholesalers 398.5% 346.4!^ 270.0%tyfcnufacturers1 sale s

branches, offices 206.1 301.0 327.5Petroleum bulk stations 519*2 578.4 *>80.7Agents and brokers 328.4- 340.3 242.8Assemblers n.a. 171.5 233.6

n.a. — Not available.

Sourcet Calculated from Tablos 14^16.

Petroleum bulk stations increased sales over the period on

the basis of 1929 volume more than any other type of operation. This

was true for Virginia and the United States as well t- s for Richmond.

In Richmond the merchant wholesalers were second among the ty[>es of

operation In increased sales volume as was true for V i-rg Inia, but in

the country as a whole, merchant wholesalers wer* third in increase of

sales. For the country as a whole nanufacturers1 sales branches in—

oreased their sales more than did the merchant wholesalers and were

second only to petroleum bulk stations in proportionate sales increases

Among the five type of operation, manufacturers* sales brancnes were

fourth in sales increases in Richmond and Virginia and were exceeded by

agents and brokers as well as by merchant wholesalers and petroleum bui

stations •

It appears from the above that much of the change in pattern

of Richmond sales according to type of establishment was due to the

107proportionately greater increase in sales of merchant wholesaler? and petroleum bulk stations. Merchant wholesalers in Richmond accounted for the largest proportion of total sales because of a greater increase in sales volume.

The fact that the manufacturers1 sales branches experienced less growth in Richmond than did all other types of operationt while throughout the country they were exceeded only by petroleum bulk sta­tions , may have resulted from errors in data. In 1Q29 it was reported that such operations accounted for LJ+.3 percent of total wholesale sales In Richmond as compared to 23.3 percent for tho country. Between 1929 and 1935 the proportionate share of the Richmond market was reduced in half while remaining relatively constant for the country. As a re­sult of the extreme drop the manufacturers' sales branches in Richmond in 1935 were about on a level with those of the rest of the country insofar as share of total sales is concerned. This causes one to believe that an error exists in the 1929 Richmond data. From *935 to 1943 growth in sales was about the same for this type of operation In Rich­mond (391*5 percent) and the United States (377.7 percent). fUfilarand S&JLU. U ft Proportion Total gq;?g

Another measure of Richmond's overall growth as a wholesale trade center is the relationship of sales in Richmond per $1,000 of sales in Virginia and In the United States. These figures for sales of all establishments are given in Table 20.

108Table 20

Richmond Sales per $1,000 Virginia and U. S. Sales

1929-1948

XttE. £2£ $1*000 U* S» Sales Sales 2£X $1.000 Virginia ^IvP1929 $3.24 $ 348.001935 4.03 342.801939 3.79 3 32.101948 3.44 31^.40

Source: Calculated from Tables 14—16.

Richmond wholesale establishments increased their s'u c b over

the period relative to total sales throughout the Uni tad Stater and were

doing a larger proportion of the total wholesale business of the

country. Although the 1928 and 1948 figures indicate an overall improve­

ment In position, it should be noted that from 193 5 through 1948 the

trend of Richmond sales per $1,000 of U. S. sales was downward. If this

trend is continued the position of Richmond wholesalers will soon be

worse than in 1929* The figures for 1935 woui-d permit adc iti nal credence in the theory that Richmond is a depression—proof city. Com­

pared with the state Richmond has been slipping on the basis of pro­

portion of total sales made by Richmond estaolishments• Other centers

have been developing within the state more rapidly than has Richmond.

Sales of Richmond establishments per $1,000 sales of Virginia

and U. S. sales by type of operation are given in Table 21. These data

Indicate rather conclusively that, with the exception of merchant

wholesalers, Richmond wholesale establishments lost ground consistently

in the proportion of total United States sales made by local establish­

ments. The came was true insofar as the proportion of Virginia sales

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nowere concerned. In other words, It was the merchant wholesalers who accounted for the overall increase in sales per $1,000 of U. S. .salon. The proportionate losses which resulted for other types of operation more than offset the gain of the merchant wholesalers with respect to Virginia sales*

According to the Bureau of the Census reports retail sales in Richmond were $104,043,000 in 1929 and were $339,794,O C i n 1948.This represented an increase of 226.6 percent or considerably more than the 200.3 percent increase in wholesale sales* In Virginia, retail uales moved from $600,929,000 in 1929 to $2,227,407,000 in 1948 or an increase of 270.7 percent. Wholesale sales in Virginia in 1^48 were 227.4 percent above sales in 1929. From these figures it can be seen that neither the Richmond nor the Virgin a wholesale trade increased as much as did retail sales. The population growth and increase in retail sales in the Alexandria, Arlington, arxi Fairfax areas contributed materially to the greater increase in Virginia retail sales than in wholesale sales. Retail sales in these areas increased 923.? percent and the stores were served primarily by wholesale establishments located in Washington and Baltimore.

Data on manufacturing are not available for Richmond except for the years 1939 and 1947. In 1939 value added by manufacturers in Richmond was $109,508,000. By 1947 $20 3,130,000 was the value added by manufacture, which represents an increase of 187*3 percent. In Virginia the value added by manufacture increased from $376,239,000 in 1939 to $1,051,629,000 in 1947, or 174*2 percent. It would appear, therefore.

Illthat the increase In sales of Richmond wholesale establishments was comparable to the increase in manufacturing activity in both Richmond and Virginia.

During the period 1930—1950 the population of both Richmond and Virginia inoreased. The population of Richmond was 182,929 in 1930; 193*012 in 1910; and 230,130 In 1950, Virginia's populationwas 2,121,851 in 1930; 2,677,773 in 1910, and 3,318,680 in 1950.5

Over the twenty^-year period population in Richmond increased 25.9 percent, and population in Virginia increased 37.0 percent. The greater growth in population of the state accounts for at least a part of the greater increase in dollar sales of the wholesale establishments throughout the state. In 1930, 32.1 percent of the Virginia population was classified as urban and 67.6 percent as rural. Preliminary estimates of the 1950 census Indicate that currently 16.1 percent of the state's population is living in urban areas. This is furtlier evidence of a greater concentration in certain areas which, in turn, permits greater growth in wholesale establishments serving such areas. Part of the increase reported for Richmond was the result of an annexation of suburban territory in January, 1912. The population thus absorbed was already in the Richmond market.

5* The Bureau of the Census Reports, Population

112laaljila By Ua«t

Ik keeping vlth the analysis node for the period 1890-1928 the fear so eollod Jobbing llnee of grooerleo, drugs, dry good# end herdonre have keen ovsnlnsd to determine trends end dervelopnonte for the 1929-1948 period. Sales for the perie*. are given In Table 22.

Table 22Sales of Elohnoad WholesalersBy Be lee ted Lines

1929-1948 (Ik thousand dollars)Xtt£ Qreoerlee Druse Dry eoode llJS&WUS.1929 • 8.082 127034 88,192 a.a.1935 9,481 2,231 7,077 $ 2,4981939 U,527 3,843 6,950 2,6841948 20,089 10,3070 18,048 9,663

a*«. — Bet available* Sales flgares were not given to avoid disclosure*9tta aero not given for drags alone* This figure was ooIsolated by applying the 1948 Virginia proportion of drags to total drags, oh— tools and allied predaet olasolfloatlan* The Virginia proportion aas 75*2 eeroeat ehleh aas applied to Klohnorai sales of 613,699,000.Soarest Bureau of the Census Beports, IQuUSSSlt XDUfaU.The sales vvlan of asrohent uholesalers in groceries, drags,

and dry goods Inoreased ever the period* The 1948 sales of grocery vholesalers aero 148*6 pnroent greater than In 1929* The drug whole- salers experienced the largest loo reuses vlth 1948 sales 406*7 peroent greater than In 1929* The dry goods wholesalers hod the snallest growth In sales with 1948 soles 120*3 percent greater than in 1929* Bardvnre sales In 1948 wore 286*8 peroent greater than In 1935*

113Iha. Growth in Physical Ynlum. a£ fiilta

The wholesale commodity price Indexes by lines are presented in Table 45 in the Appendix. The commodity classifications for which Indexes are presented were selected as most comparable to the grocery, drug, dry goods, and hardware lines. Examination of commodities in­cluded in the classifioation metals and metal products reTealed a large number of items normally included in the hardware line. The sClassifica- tion of chemicals includes drugs but is probably overweighted with industrial chemicals. The textile and food classifications were more nearly like the dry goods and grocery classifications. Although the classifications are not completely comparable, they were selected as being more accurate for comparison purposes than would the general wholesale prioe index. It should be pointed out also, that the indexes are on a nation-wide basis. It is assumed that over a twenty—year period wholesale prices in Richmond would be about the same as for the country as a whole.

From 1929 to 1948 the wholesale commodity price indexes moved sharply downward for the first four years and then moved generally upward through 1948 with the exception#of a slight downward movement in 1938—1940. The sharpest increases occurred during the 1946-1948 inflationary period which followed removal of wartime controls.

The physical volume of sales by lines are presented inTable 23.

1HTable 23

Tha Physical Volume of Salea of Richmond WholesalersBy Selected bines

1929-1946

lux1929193519391946

11,327 2,824 9,982 2,89116,374 5,083 9,971 2,84311,217 6,300 12,043 5,906

n.a* — Not araliable.Sources Calculated from Table 22 and Table 45*

On the basis of 1926 prices the physical to lusts of salesmoved in the sane direction as dollar salea In each line for the period 1929-1946, but the pattern of movement differed. While the physical volume of sales of the grocery wholesalers was 38.7 percent greater In 1946 than In 1929, it Is Interesting to note that the 1946 sales were only 66.5 percent of 1939 sales. The merchant wholesale druggists ex­perienced the greatest increase in the twenty years with the 1946 physical volume of sales 191*1 percent greater than the 1929 sales. The physical volume of sales of the dry goods wholesalers was 33 percent greater in 1946 than in 1929« The wholesale hardware merchants had sales in 1946 which were 104.3 peroent greater in physical volume than In

fi«P»rl>qB SL Siill 1CLib Virginia ttftlttd States S&lSA*

goods, and hardware wholesalers In Virginia and the United States for the period 1929-1946.

1935.

Table 24 presents the sales volume of grocery, drug, dry

yz

116Tht data la Tabla 34 indicate that tha Riohaood wholaaalara

la grooerlea, druga, and dry good* had graatar dollar aalaa iaoraaaaa la 1940 wear 1929 than vaa true for tha country as a whole. Salaa of mahnonrt groeery wholaaalara lnereaaed 140,6 pareant aa oonpared to tha national laoraaaa of 110,0 pare ant. Drag tdioleaala aalaa In 1948 In Richmond were 406,7 partsaat ahara 1929, while throughout tha oountry tha laoraaaa waa 196*2 peroent, Tha Riehncmd dry gooda wholaaalara had a 120,3 paroant inoraaaa la 1940 orar 1929, and tha national lnomaaa waa 103*3 paroant*

Tha Tltglaia wholaaalara had graatar aalaa Iaoraaaaa orar tha 20-jaar parlod than did tha Rlohnond narohanta la aaoh llna aznapt dry gooda, 0alaa of tha groeary wholaaalara la Tlrglala wara up 196,7 paroant la 1940 ®wr 1929, vhlla aalaa of Richmond aarohanta wara up 140*6 paroant* In tha drug llna tha Tlrglala wholaaalara lnoraaaad aalaa 463*4 paroant, whloh waa nora than tha Rlohnond laoraaaa of 406,7 paroant. Only la tha dry gooda llna did aalaa In Tlrglala Inoraaaa laaa than la Rlohnoad and tha Hal tad Stataa orar tha parlod, Tha Virginia laoraaaa la dry gooda la 1940 waa 100,8 paroant orar 1929, Vo oo^sari- aon oaa ba nada for Iaoraaaaa In hardwaro aalaa orar 1929-1940 parlod bacauaa of tha laok af 1929 data for tha Riohawsnd wholaaalara, Howawar, throagfaout Tlrglnla, aalaa la 1940 Tar tha hardwara wholaaalara wara 360 paroant ahara tha 1933 laral aa aanparad to 340*0 paroant for tha Uni tad Stataa and 273*3 paroant for Rlohnoad,

In riaw of tha atatanant that Richmond la a dapraaaloa proof ol r, It la lntaraating to nota that 1933 dollar aalaa of grocery and

117drug wholesale houses were 17*3 peroent and 9*7 pare ant higher, respectively, than in 1929* This was in contrast to decreases in Virginia aalas of 5*0 paroant and 27,2 parcent and in national sales of 42.3 paroant and 23.2 paroant for tha two lines. Dollar sales of aerohant dry gooda wholaaalara of Richmond wore down 13.6 percent in 1935 while sales for Virginia wara off 23.9 parcent and for the United States ware off 54.6 percent. These figures are additional evidence that Riohmond business is not affected as seriously as other sections by general business depressions.

Tha percentage increase in sales for each of the four lines In tha United States, Virginia, and Richmond are Illustrated in Figure 14*

Tha absence of local, state and national price indexes maker useless a comparison of growth in the physical volume of sales in each of the lines under consideration. Since a single price index is available and that is on a national basis, its use would Indicate the sane proportionate change in the physical volume of sales as was true for the dollar volume.Richmond BtL 11*202 Virginia ftad. U&J&4 StiLiss. S&lfiftt

It is possible to show relative growth relationships between Richmond wholesalers and those in Virginia and the United States by expressing Richmond sales per $1,000 of Virginia and United States sale These data are presented in Tables 25 and 26.

Pigara 14Fsrcant Chang* 1948 3ala* Proa 1929 Salas

By Salaetat Linas Rishwmd, Virginia, Qoitad Statss

Drags

Bardaars

Grocarlas

Dry goods

VirginiaRlahsnnrt

VirginiaRiehaond n«a.0. S.

VirginiaRistaaond

Virginiaihaood

r. s.

0 100 200 300 400 Sourest Calculatsd froot Tables 22 and 24.

i. j

U m

O r M t r l M>i1«Wry y ds I t r t a M

OnotrlM »w|. toy s*o4m b r l M m

IlfTabla 2$

Stlt* of Ilikwri fttlmlira For $1,000 TlrylAlJi klta 1929-1948

2&B » » 1939 1948

$ 133.22 # 164.58 $ 169.40 $ 111.60373.21 962.70 960.60 339.65914.60 984.40 994.70 964.70

353.10 247.60 291.10a«m. — Bat avallabls»8— t m « Calsilittd fr«ft Ikblis 22 «al 24.

Tabl* 26Salas of Slehaond UhelMtXtri Pbr $1,000 OOltod StaUi Salas

1929-1948

1929 1935 1939 1948

$ 1.50 $ 3.05 $ 2.93 $ 1.773.80 5.43 7.42 7.522.91 5.78 . 3.68 3.15*.*• 8.81 4.53 4.80

i.t. — Hit m U b b l i .S— rooi Calaulatad fro* Tablas 22 aai 24.

Richmond ubolinltra ht?t incrtw d their proportion of total United Staton nalon In thn grocery, drug and dry goodn lines slneo 1929, but only thn dry goods wholesalers lneroasod their proportion of Virginia sales*

While the proportion of Baited States sales made by Rlohmoud wholesalers inereased in eeoh of the lines for vhioh data are available, in only the grocery line was the Increase possibly a result of a free ter increase la the amber of establishments in Richmond . The masher of Rioh- aond wholesale grooery merchants inereased from 20 to 61 or 117*9 percent as compared to an increase of 13*9 percent from 15,221 to 17,315 through­out the oountry. There was an Increase of 96*6 percent in the amber of drag houses in the oountry and a decrease of 6*6 percent in Richmond.The number of Richmond wholesale dry goods merchants inereased 36*3 percent, while the national increase was 58*9 percent. The proportionate Increase in the number of Virginia establishments was less than in Rich­mond for eaoh line other than drugs and less than the increase throughout the Baited States for eaoh line* Thus it can be seen that the proportion­ate increase in sales made by the Richmond wholesalers in the drug and dry goods lines was due more to greater voIibm of existing firms rather than expansion in the number of establishments.

An atteaqpt was made to discover if there had been much ohange in the proportion of total sales by type of operation for the individual lines In Richmond, but such an analysis is possible only for the grocery line* The data on dry goods and hardware show all sales in Richmond to be made by the aorehamt wholesaler, while sales for drugs are combined

121with oM m Ii and allied prodnota.

Table 27 presents sales of groeery wholesalers and total sales of grooerlee for all types of operation.

Tablo 27Salas of Merchant Wholesale Qrooery Istabllshnents In RslatlOB to Total Qrooery Sales

1929-1948 (Salsa la thousand dollars)J U I X t k l S ftlftft lu B b lB l U k filS M ll. F a w n i 21

SSlttL Xfiid41929 $ 45,297 $ 8,062 17.8*1935 32,718 9,481 27,61939 34,401 11,527 33.51948 108,092 20,089 18.6

Sourest Bursan of ths Census Reports - Whole sole XerAr.It la erldent that In 1948 ths nsrohaat wholesalers ae—

eomtsd fsr about ths sane proportion of total grooery salss In Riohncnd as they did la 1929. Za 1948 ths Manufacturers1 salss branchas la ths grooery lias rsportsd salss of $60,298,000, which rsprsssntsd 55.8 passant sf total, but data fsr 1929 ars not araliable. Calculation of slat la r data on ths basis of total Virginia and total United States salss shows that ths proportion dons by nsrohaat wholssalers In Riehaond is oonsldsrably loss than In Virginia or ths oountry as a whols. For Virginia ths proportion dona by nsrohaat who lose lore In such of ths osaaus years oast 1929, 43*8| 1935, 43.1| 1939, 46.9) and 1948 45.9psrosnt. For ths tdtsd Statss ths nsrohaat wholssalers did 44*1 psroaat of total greesry salss in 19291 41*9 psrosnt in 1935) 41*0

122

percent in 1939 and 38.4 percent in 1943• While the proportion in Virginia increased a one what orer the twenty—year period , there was a downward trend in the oountry aa a whole.

Coats of Operation The only 1943 data relative to costa of operation which are

available for Richmond wholesaling establishments are payroll costa for the entire year. The data on payroll by type of operation are presented in Table 28 and Indicate that payroll expense relative to sales has decreased In the twenty-year period for merchant wholesalers and petroleum bulk stations in Richmond, Such expenses have increased over the period for manufacturers1 sales branches, and agents and brokers. It should be noted that, with the exception of merchant wholesalers, the peak year for payroll expense was 1939.

ftiyroll expense for Virginia is presented in Table 29. These data show that payroll expense per dollar of sales was greater for Richmond establishments than for those throughout the State except for assemblers. With little variation the trend was about the same. The payroll expense ratio was lower in 1948 than in 1929 for manufacturers1 sales branches, petroleum bulk stations, and agents and brokers, but higher for merchant wholesalers and assemblers.

Fkyroll expenses of wholesale establishments in the United States are given in Table 30. The ratio of payroll expense to sales for merchant wholesalers, agents a:id brokers, and assemblers was lower in the United States than for either Richmond or Virginia. For manufacturers' sales branches and petroleum bulk stations the ratio was

Tabla MUnhand Vhalaaala latabliahaaita fhywll trpawaa By Typn of Operation

1929-194*(in thouand dollnro)

1929 1935 1939 194*tZH. Si OPfntlim xSki i * Istidi t at IsHI 1st Taitnlklu Ibrroll asfet Phrroll Itanll

Mnabaut nfaola-•alara $ 6,694

lkaafbatwara9 6.091 6 5,776 *•03* 1 *,126 7.76)1 1 23,1*6aalaa braaehaa

Ntrolnon boll 3,05* 3.19 1,407 3.50 2,074 5.2* 7,114rUtlno# 226 3.16 492 4.27 436 4.52 1,110IfHita and broknra 427 1.69 1,331 3.03 970 2.94 2,204Aaa— blara n*a» 657 4.72 1,549 7.23 106

n.a. - lot nrailnbln.Soureat Bursau of tha Cannua Boporta

ealeulntad froa Tnblt 1*»- Uholaaala Trtda, and

uU a

7.0a3.613.012 .(63.64

s

Tabl# 29Payroll Xipoaao of Virginia Uboloaalo lotabllahaaato

By Typo of Opa ration 1929-194®

(In thoaaand dollar*)1929 1935 1939 1948

XZBft SL 0— ration Total I* isyi lsl TotalPayroll Sslii Payroll Payroll Salta fPTtU Ssltt

Mtrehaat nholo*-aalon $ 13,402 6.561 $ 14,065 7.168 $ 19,773 7.178 1 67,478 6.948feanftctnrora1oaloa biaaahoa 4,963 3.65 2,773 3.76 4,506 4.77 14,131 3.45Pa traits balkstation* 2,228 6.08 a.a. n.a. 2,747 3.28 6,441 3.04igoota and brokor* 2,098 1.99 2,573 2.07 2,692 2.28 5,218 1.49Aaoonblora 1,463 2.85 1,682 4.22 4,253 7.64 5,858 6.65

n.a, - lot availablo.

Sovreoi Barton of tho Cannon R# porta, Hholnaala Tradt and oalcnlatad froa Tabla 15,

125

2 l

I

5 ^si A fj

i S35i H i

3 R S4 4 4

$ S 4 41 S Jp «i i H id

8 9si 4R IB** m3 Rd

i n m

n • «* »25-$ K £ 4 S3 *4 rj

8 g i s *8 8 9 8 *s*

i . l UH i

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126higher than for Virginia and slightly over the Richmond ratios. Pay­roll expense In relation to sales throughout the country was less In 194# than in 1929 for manufacturers' sales orarches, petroleum bulk stations, and agents and brokers. The merchant wholesalers had the highest payroll expense relative to sales, as would oe expected on the basis of the greater number of functions performed.

One reads many comments in trade papers and periodicals and frequently hears complaints from business men that wages have gone so high in recent years that it is difficult to realize a profit on operations. The data presented here offer conclusive proof that such has not been the oase for wholesale establishments. The greatest in­creases in wages have occurred during and following World War II, but during the same period salaries and wages expressed as a percent of sales have decreased. Over—ell operating expenses have not been given for Richmond in any of the census reports, but on the basis of figures given for Virginia and the United States, it is obvious that w a -es

represent a substantial portion of total operating expenses.Total operating expenses of each type of establishment de­

creased relative to sales in both the United States and Virginia, with the exception of assemblers located in Virginia. Since the trend of payroll expense in Richmond did not differ materially from Virginia or the United States, it nay be assumed that the total operating expenses of the Richmond establishsients had fallen off relative to sales from 1929 to 1943. In the light of this there should have been an increase in operating profit over the period unless there had been a downward

127rsrlslaa la Mifla*! u d tt«r« la «t14«h « that aarglaa kara baaa daeraaaad*

Salas Par tafealaoals ■atabllahMat M U r aalaa par aatabliakamt aaa ka aaad to aaaaara rala-

tlra alaa of tka araraga vkalaaala kaaaa la any giran araa with thsalaa af tka awiaia A a la aa la kaaaa la aajr atkar araa. OkTloaalj Sa aaaaaraaaat la a raaalt af two mrlablaa, total aalaa and lakar af aatahllahaoata, aad a abaaga la altkar vlll raaalt la a ohaaga la aalaa par aatabl1 ak— at Takla 31 praaaata aalaa par eatabll*aeat la Elah— ■sad, Virginia, aai tka Edtol Stataa far 1929 aad 1912.

•f tka foar alaaaiflaatlaaa far whlak 1929 data ara arail- abla, tka 11 abaand aatakllahaaata la oaak alaaalfloatlaa atkar tkaa agaata aad krakara kad graatar ararags aalaa tkaa tkaaa loeatad la Virginia* Italy tka aaaafhatarars* aalaa kraaakaa aad affloaa la Elak-aaad kad largar ararnga aalaa tkaa tkalr aawtarparta laeatad tkrangh-aot tka Ikttad Stataa* Bj 1911, sack af tka liakaaad graapa had largar aaaraga aalaa tkaa tkaaa laaatad tkraagkaat Virginia, aklla aarakaat ahalaaalara aad patralai talk atatlaaa kad largar araraga aalaa tkaa slallar aatakllakaaata la tka fcltad Stataa*

Ikaaaral aa tka basis af parsaataga laaraaaa la avaraga aalaa par aatabl 1 ah— t by aaak tfta «f agaratlaa, tka largaat laaraaaa a vara a^arlaaaad by aarakaat vhalaaalsra, aad agaata aad krakara la >1 akanadf patralaaa talk atatlaaa la Virginias aad aaaafhetarars9 aalaa braaakaa la tka Si 1 tad Stataa*

I *-1 a

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I *!•1

ill ii

$af

I *«»

5 S3)6 & a #g*E 5 §85 a V

rT *T

M U J£ i Sfi

I M H ra* i h Is

II

129Although sales per merchant wholenale establishment located

In Richmond increased less between 1929 and 1943 than in eitherVirginia or the United States, this was not true for all lines, asindicated in Table 32* The grocery wholesalers of Richmond not only had smaller average annual sales in 1943 than those located in either Virginia or the United States, but the lnarease over 1929 sal .i was considerably smaller. Average annual sales of the dry goods wholesalers of Richmond were considerably greater in 1943 than those located in Virginia or the United States, and they experienced the greatest growth over the twenty years. While the average Richmond drug house was larger on the basis of annual sales than those located in Virginia or the United States, the Virginia houses experienced the greatest pro­portionate growth from 1929 to 1943*

The relatively small size of ihe average grocery wnolesale merchant is probably due to the territory served by suoh establishments. The grocery wholesalers of Richmond are limited in large degree to a25-mile radius around the city, and the majority of sales are made inthe metropolitan area. The drug wholesalers, on Die other hand, operate in a much larger area including most of Virginia and eastern North Carolina, while the dry goods wholesalers serve customers located as far south as Georgia and northern Florida. The larger areas served and the presence of fewer competitors enable such firms to have larger sales per establishment.

Tabla 32

U MQrtw lw 1

|Hdltniilardvaro

I 332,096 746,7a 328,116 k

Saloa fhr Imhait feoloaala Batabliafcaoat , TlrglnlA, aad tho h i M ItaUi

■y IiImM Umi1929 ud 1968

1929

• 242,273 402,167 308,421 402,001

UitAtislit6 372,557

321,653 392,976 572,079

19aE b u a a

$ 516,351 1,229,143 205,224 1,610,500

6 992,117 | 420,429626,467 727,339

1,037,449

b.

Data on aalaa for tka amb alaoolflcatlaa of "flah, Boa fooda*a m aoi fivoa for llahannd for 1929 or 19a* This aab- elaaalfloatioB baa boon dalatod from tho Virginia aad flhitod Siatoa flgaroa for pvrpoooa of comparability.Data for 1929 ladioato aoroB narohant hardware oholoaalora looatod 1b llahannd bat aalaa voro withhold to avoid diaoLoanro,

422,172594,510935,432

Soorooi Calomlatod from Tabloa 22 and 24«

co

131t«MU7 ud Conolualono

Tho period 1929-1940 «u, for tho noat port, out of prooporlty for tho tdftolooalo ootabllahnoato of Rlohaond. It la obrlouo thot Hal-wri riooo oot follow tho national trond la wholooolo aoloa aad la aot offootod by tho oeoaoalo oondltiaua of tho oountry to tho aano dogroo oa oro othar ooatioaa. Pna 1929 thromh 1940 both dollar aalaa aad wait aalaa of Rlohaond ootabllahnoato ineroaaod norw during poriodo of proarporlty aad dooraoaod laaa during porioda of dopraaalon than waa truo for tho total of all wholooolo ootabU ohnonto la tho nation.

ITthough tho troada of total oaloo la Rlohaond and tho On 1 tod Stataa oro olnllnr, thoro oxlot oouoldorablo wurlatlona la tho aoguata whloh oonotltuto tho total. In Rlohaond tho narohant wholoaalora in— oroaood tholr proportion of total oaloo la 1940 oror 1929, whllo tho oppoolto waa truo for tho oountry aa a whola. Tho proportion of total oaloo aooowntod for by tho oognanto vlthla tho idiolooalo a truo taro ahouod Uttlo warlatlon fron eonaua poor to oonauo poor la tho tfeltod Statoot but thlo waa not truo In Rlohaond , whloh had rathor oxtrono oarlatlono botwoon oonauo poor a. Thla lo to bo oxpoetod hooauoo of mrlatlono in looal huolaooo oondltlono and lo furthor orldaneo that apolloal aurlatlono la Rlohaond aro not aa ooworo ao In tho oountry aa a iriftolo.

In oplto of tho foot that Rlahnaad aooounta for over 30% of total Virginia oaloo, thoro wao a grantor growth of wholooolo trado within Virginia than thoro wao la Rlohaond. It lo orldont that Rich— nand*o Influonoa on Virginia wholaaalo trado lo doc 11alag.

132There appears to be no reason why tho proportion of total

sales made by the merchant wholesalers Increased so sharply between 1935 and 1939- Thew were no significant changes within the city dur­ing this period and no external influences which would appear to have caused such a change. The change was not the result of a dispropor­tionate falling-off of sales of the other sogments of the market but was a result of greater increased sales on the part of the merchant wholesalers. Likewise, the extreme decrease in proportionate sales of the manufacturers* sales branches cannot be accounted for except through possible errors in enumeration.

On the basis of dollar sales the average Richmond establish­ment grew more from 1929 to 1943 than was true for Virginia and the United States. This resulted from a greater increase in sales rather than a smaller proportionate increase In the number of establishments.

Although the proportion of total United States sales accounted for by Richmond establishments In 1943 was greater than in 1929, the trend has been downward since 1935* Because sales of Rich­mond firms did not decline to the same degree during the depression years as did sales for the rest of the country, the Richmond firms accounted for their largest proportion of total United States sales in 1935, If the present trend Is aontinued, the future outlook for the city as a wholesale oenter is not bright. The same situation is true relative to the state aa a whole.

The merchant wholesalers of Richmond operating in the tra­ditional Jobbing lines of groceries, dry goods, drugs, and hardware

133had varied experiences In the twenty years under consideration except that the dollar sales volume In each line was greater In 194^ than in 1929.

The increase whloh has taken place in sales of merchant drug wholesalers since 1939 has been due to an expansion of the 9 0—called wander drugs, the Increase in family Incomes, with expanded expenditures for such things as rltamin pills and, also, a further widening of the lines carried in many of the retail drug outlets. Only the dry goods wholesalers were able to increase dollar sales more than did the dry goods wholesalers throughout Virginia. The same was true for unit sales. This is further evidence that Richmond has not main­tained its position relative to the state as a wholesale trade center.

The operating expenses of Richmond wholesale establishmente as represented by total wages and salaries paid moved downward over the twenty-year period, as was true for the oountry as a whole. For merchant wholesalers, agents and brokers, and assemblers the payroll expense of Richmond firms was higher, in relation to sales, than for the United Statee and for Virginia. This indicates that the theory of cheaper labor In the South la a myth, at least in Richmond. Wholesale establishments, regardless of type of operation in the city, the state and ths nation, had lower operating costs relative to sales in 19 than they did in 1939.

a u n t tThn & f M t of Transportation Oh Tho of Kiohnonl

Aa a talaaala TMia Coator

A tlaraagh aaaljaia of any olooalo Iradlac eon tor ro- fdraa aaraftl oorwtlny of tka lapaot of tiuiporlatlaa upon itah o aaotor* It lo parkapa o trmlan to ototo tkat mo oltj eon grow without ado quato tromoportotlon fhollltloo aad oo wholooolo trado o on tor oon dorolop wlthont offloioat transportation. Tho point la qaostion lo tho dogroo of lapoot of transportation faoiUtioo npon aaoh onlargonont.It Is also Important to Icaow tho oxtomt to whloh a ooaaaoltj can ho naotor of Its ova fa to roXatlwo to Its growth aa a tfcolooalo trado •oator slaao sash Arrelopeeat lo lnflnoaood hj transportation,

Istortoolly, Hohnonrt has had onaollont transportation faollltios. As polatod sat prowlonsly, Its wot j looatlon was a rosult of tho transportation affordod hy tho Joans Klwor, At ao tins In Its history has tho slty had a soarolty af ffcsllltlos. Boring tho psrlod in whloh wator transportation was tho prlanry nothod of norlng goods, tho A s m Rlwor waa on tiro ly adoqaato, Too solo of tho day woro of a also Aloh ooald roaoh tho olty swan though tho ohannol dopth was only sovwn foot at low wator*

thoa sawn Is hooaao rooognlsod as an offloloat nothod of transportation, tliknnnd was oao of tho first oltloa to hawo a asahls

1 U

135ota*l« the 14— of a natl to oonnoot tho To— a Rlnr and tho Ohio Rlwsr la attributed to G m n o r Spotawood of Tii|lnlt In 1714.* By April, 1794 tho oanal — a finished around tha folia at Rlohaond, and tha flrat tolla — charged at that tlna.2 Although tho first to bo oon- alTod, tha Jh— a RItot oanal — a not ooplottd la ita ontlroty until about 1456* By thla tlao sereral othor atatoa bad oanala la operation.3

Tho flrat railroad waa obartorod la Rlefa— od In 1820 and oonnoctod tho olty with tho ooal flolda thlrtoon nlloa away. Thla waa tho aa— yoar la whloh eonatrwotlon was begun — tho Baltlaoro and Ohlo*^ Aa rail faollltloa txpandtd throughout tho country, they ox- pandod la tho H o b — d aroa.

Thoro la — orldonco to lad loo to that or Virginialaggod bohlnd tho othor oltlaa and atatoa la tho develop— nt of high waysand tho a— of — tor tr— ks aa a — ana for traasportdhg goods. Tho highways a— noting fr— Rlohaond, both atato aad federal, aro extensive and load to every aootlon of tho oountry*

In aplto of tho foot that tho fheilltloa for tranaportation aajoyod by tho whola— lo oatabliah— nta of Rlob— nd woro adoqwato and onfilotoly — darn, aa ooupared to aaoh faollltloa available In othor oltl— , Rlob— nd has aot developed as a whola— lo trado cantor to tho

1« II* L. fair and I, V. W1111 a— , Jtr*, iBAMBlAR ZiERRSz— 1rtafrlMi (*ew Torfct harper aad Brothers, 1990), p. 34.2* V* ?« D— away, UllttX StL Ibl t e l U U L i u t e t StflBftSL (Row Torkt Col— hla Rhlvoralty, 1922), p. 32*3* Fair aad Vlllla— , op* alt*, p* 31.

J8U4*# p- 34.

136m m extent e« hav* sons of the other oitiee. It la evident that acre presence of facilities is not sufficient to guarantee growth as a wholesale center. Obviously, other factors relative to transportation play an laportant part in such developawnt.

Hater Transportation As stated previously, the orginal channel depth of the

Janes River was seven feet and it was not until 1852 that the channel was deepened through dredging. In spite of the United channel depth Rlohaond was a thriving port city until well into the Hineteenth Cen- tnry. The advent of steaaships with their greater sime and draft started the decline of the Importance of the city as a part. In 1870 Congress authorised the dredging of a channel varying in depth frost fourteen and one-half to sixteen and one-half feet below asan lew water from the south of the river to Richmond. In 1882 ths channel was deepened to twentj twe feet. Finally, the eo^letian of the wort resulted in a channel depth ef twenty^flve feet free Rlohaond to the Hasten Roads area. it has been estlasted that, prior to World War II, Richmond terminal facilities were sufficient to handle approximately 90 percent of the eoaaeroial vessels afloat throughout the world.^

5. M. L. Shetsberger, Q g Iff est g£ Transports ties QB8A U d h m A ftl. & figdt GdAlflE* 6n wapubllshed master's thesisavailable la the Qhiversity ef Rlshaond library and written wader the dlreetloa ef ths author. Fart of ths factual data in this chspter is taken frea this thesis.

6* Richmond Chech or of Com* roe, bdustgial Annralaal of a<«w_s 1 9 4 1 f p. g.

13?Qofortuataly ths lnpravanant in ohunal dapth usually

followad ohangss in ahip oonatruetion , and ao a grant daal of tha trada had baan dlwartad bafara attsnpta vara aada to ratain it. Bj tha tina tha ohannal was daapanad bayood aarsn faat trada had baan dlaartad to othar oaotara and afforta to rseaptars it wars unsuoeseaful.

Couplsd with tha dacllna of tha uaablanaaa of tha rlrar waa tha daralapaant af tha railroad uhldh axtandad to Mawport Nava and Norfolk on aithar a Ida of Hanpton Roado. Prior to tho railroads, food a oould bast ba ahippad in balk to Rlohaond and than tranaportad in raallar lota by oanal or orarland to tha Hast. Aftar tha railroad had raachad Haaptaa Roada it waa nara seononleal to tranafar fro* ahip to rail at aithar Norfolk or Navport Nava than it waa to tranafar to ana liar ahlpa, haul to Rlohaond, and than tranafar to rail. In tha eaaa af azporta a similar situation davalopad. Uhlla at ona tina much coal aaa ahippad from Rlohaond aa tha part eloooat to tha alnaaj aftar tha railroada davalopad, tha ooal waa hanlad diraotly to Hasp ton Roada for shipmant, thna by^paaalng Rlohaond. Tha aain conl-hatling lino of tha Chaaapaaka and Ohio (ana of tha Fooahontas roada) foaa through Rlohnond to Nawport Nowa. Tha othar two Pocahontas linaa (tha Virginian and tha Norfolk aad Haatarn) nova south of Rlohaond and into Norfolk.

With tha axoaption af axporta af flour and tobaoco thara waa littla dlraet trado batwaan Rlohnond and foraign oountrias by naana of tha Jana a Rlvar. Mneh of tha trada of tha port ra suit ad from ooaatwlaa shipping with goods brought in by watar fron suafa oantara aa Haw York, Fhlladalpbia, and Baltinora. Thaaa oantara had ohannal daptha of 29

U6foot, 3 incboa at Saw Tort) 19 to 25 fMt at Phi Lada lphia and 27 to

faat at Baltlaaro and thua vara abla to hand la ahipa anoh largar than waa paaalbla at Rlohnond. Vorfolk had a ohannal dapth of from 25 to 26 faat* Shlpa of irl— alaa and graatoat offioiuncy whloh aould aaa thaaa othar porta aoald not aaa Rlohaond.

Thoro aaa groat hopa that tha couplotloc of tha daap-wator tomlnai la 1940 would roraraa tha trond and aould pormit tha ro- oatabllahaant af Rlohaond aa an outatandlng port eity aueh aa It waaprior to 1640* Thorn ha a boon an lnemaao In tonnago handlod In thofart alnca 1940, but aot In an aaount auff lolant to warrant optlaLlaa oror growth of tha port. Rata an tanaago ara praaontad In Tabla 33*

Tabla 33Tonnago of Riahaond Port

1940-1990lar Tanaago1940 1,424,15119a 1,616,1091942 1,176,7311943 1,267,7031944 1,323,7161945 643,171

Sonroot Annual Roporta af Rlroetor of Public Varka,Rlohaond, Virginia.

Although tha laoraaaa la taaaaga waa 65*7 poroant, thoro lallttla raaaan to bollawa that Rlohaond will haro aueh groator davalap-aant aa a port city. Moat of tho taonaga raaulta froa laporta of nawa-print, augar, and patrolatM prudueta. Tory llttla la ahippad froa Riah-aond. In 1949 a ohartar waa grantad far mgular ataaaahip aarrloa froatha olty, but within thrna aaotha tha aarrloa waa diaeontlnnod for lack

HS Z6HRSR1,379,2041947.1946' 2,362,0391949 2,065,9101990 2,349,465

U 9of smffloioat volw. lltkou|b noh tabasco lo ■till ihlypol tbrotd by firm* looatod la Rlohaond, tho proetdnn followed lo to ohlp by nil to lorfolk aad thoro to load It aboard oooan freighters.

* Railroad BarelepMntTho first nllroad to oator Rlohaoad was don lop od to o o m

tho ooal floldo la aoor by Chootorflold County. It was followed not lone aftor by tho Potorohaxi aad Rooaoko Railroad Coapany, ehartorod in 1830 to provide a nllroad llao froa Rlohaond Into tho Roanoke oountry of lorth Canllaa for tho express parpooo of facilitating trado la that area.7 Thla road onataally hooaao tho pannt road of tho Atlantis Coast Lino. By I860 tho lino had boon oxtondod ooath to Florence, South Carolina.

Tho Chooapoako and Ohio Railroad grow oat of tho Louisa■allroad, whloh wao ootabl 1 shod la 1836. Tho C. A 0. took oror oanyshort I1oos to eroato tho sywtoa whloh bow extends froa tfowport Nowsthrough Rlohaond Into tho IfLddlo Most.

Tho Rlohaond, Fredericksburg and Potoaae Railroad wao founded la 1832 as part of a lino to ooaaoet Mashing ton, D. C. andWoldoa, I. C. Tho road was ooaplotod to Qsaatloo, north of Rlohaond,la 1872 and prowl dad through oorrloo froa Baltlaoro, Md., to Wo Id on.

Tho Rlohaond aad Baawlllo Railway wao ehartorod In 1847 and sorvod as tho pannt lino of tho Soathon Railway Syotoa. This sywtaa

7* H. D. Dos lor, Tho Atlaatlo Coast Llao Railroad, (Row Toifti Houghton Mifflin Co^any, 1920), p. 35*

u oo q m M n ^ b U j teo^glwvt Rawthaaat «ai hy U9i tptrtWd awnr iyOOO ailM «f m d . *

D m fifth — jar It— Mrrlif llnh— wI 1* the •— hoard Air LI— , whlah grow M l af ths Hrl— ti l — nkt XI— with Its — rthara tonlaai tcttkllaM la Rlihaaad la 1R99. Bath tha Raahoard aad tha Atlantia Otut Li— aparata aarth aad aaath through llohnond with trai— hat— — Maahlngt— , B, 0C| aad Rich— ad aporating oror tha Rlohaond, Fradarlakaharg aad Pat awn trnoko. Tha— 11a— togathar with tha f— thorn aaoatltata tha ahiaf rail 11a— hatw— a Raw fegload and tha taathaaal. At tha praa— t tl— tha 1— thorn haa Ita — la 11— — at af tlnhnaai. hat tha original Rlahaonrt aad Ronrillo lino oonnocto with tha aala 11— at Rnarillo, Tlrglala*

Tha Chaaapaaha aad Ohla la tha aaly — la lino for traffle aaat aad a— t through Rlabaoad* la addition to thla, ha— r, tha Rarfalfc aad ■— torn Railroad aparat— tral— arar tha Atlantia Connt tAm*. tr— fc whlah a an— at with Ita — la 11— at Pataraharg, appraxi— taly 25 alloa aaath*

Aa— rdlag to a— nwthority, tha aarly palloy of tha Tlrglala Laglalatara rolatlwa to rallr— d dawolapn— t — a to or— to a ayat— af Ha— «A^ii waald parult tha aaa— ya— a af aa— adltl— to Tlrglala altlaa whloh had — toraay fanilitiaa** Tha plan wao norwr r— 11aad

•• Flrat Aaa— 1 Rapart hawthorn Rail— y C— pony, 1095, p*3*9* Jm R* Ihhad— , Rooart — |hR * Cfl— RCRR iC fedltiJM (llllif (Rhahiagt— , R. C*# Traaaary D— aa— t # #92B»Rnltod •tat— S— — aa— t Printing •fflea, 1R*4), p. 20*

U1bteawt u Mrly u U31 th* VlaahMUr aid rot i— ii Railroad waa ehartorod, giving Baltiaoro aaslar aacsoa to tho rich Shonandoah Valloy oraa* Tho valloy araa had not baan an important part of tho Rlohaond wholoaala narkat prior to tha davolopnaat of tha railroad bseausa of tha dlff lomlty of transportation oror tha Mountains. Bsvortholoas, tha ViaBhoatar and Potaaae railroad isncrrsd what ohanea thoro waa for farthor davoLopownt. La tar, thmgh ooanactlona at Shepherdatawn, tha araa waa opanad to tha Fhlladolphla ■archants* By tho tarn of tho oontary Rlohaond had rail oon&aetloaa with orory eitgr oaat of tho Mississippi and a oath of a Una froa Cincinnati to Rlohaond .1®

Fav oltlaa haro grsatar rail faollltloa than hara boon proaant In Rlohaond, and no olty baa bottar faollltloa to aarra tha Southaaat.

Transportation Rataa It la arldant froa tha abowo that tha wholoaala ostablidi-

■onta of Rlohaond haro bad aeeoaa to tranaportatlon faollltloa whloh would poralt aaay aad diroot ahlpaaat of goods into araa a of tho oountry oaat of tha Mississippi Rivor* By 1900 thaaa oatabllahnonto woro aarr- lng aw araa ooapooad of all or noat of six atatoat Virginia, Vast Virginia, lorth Carolina, South Carolina, Tonooaaoo, and Gaorgla. This araa oo^rlaod ths imi'Ml wholoaala narkat of Rlohaond* At ths sons tins individual fins sold aooounta in Alabana and Florida. Tha arsa nornally ssrrsd la lllnatratod In Figaro 15*

ID* JUAs F* 46*

Li-2Figaro 15 Nerml TndlAg A m Rlohaond Wholooolo lotabllohannto1900

CH A R IC STQ

FOLK

l C

C H A R LES TO N

Souroo I l o t l a n t o d froa data In Chap t o r III

143Mill* th• fMllltlM f«r Mrrlac a larg* a m win

pnaaat, th* oat af *wch fbollltl** ha* b**a lafloaaead to a griatdagr** by th* rmt* atraotar** Theilltl** m n ar* of llttl* ealu* if th* eo*t* inroleed In tholr aa* ar* *«oh aa to prohibit «xt*n*iT* utilisation*

Sharing th* **rll*r jaara of th* railroad* Rlohnond r*o*iv*d an advantafa which resulted fro* It* location on tntlgabl* aatar. Th* rata* eharg*d by th* rail oarrlor* w*r* in ocnpotltlon not only with orth*r * 1 nllar oarrior* bnt with th* wnt*r oarriart. That thar* wa* rat* competition b*tw*n th* railroad* la «rld*nc*d by th* fact that, * In 1B82 th* llakmd, Fred*rlckaburg and Pot man bad to oarry son* traffic at llttl* or n* profit a* a r**uIt of rat* war* whloh axisted b*tw*«c trank llnaa* Tb* 1396 report «f th* Trafflo Bureau of th* Chamb*r of Ceawaa oontaln*d th* stataaont that, "In 1392 a war of rat** «xl*t*d b*tw**n th* rail lino* and th* wat*r lin** ooapotlng b*tw**n Rlohnond, Sow Xork, Philadelphia, and Ehltlaor*, whloh had b*on raging for son* tig*, aalnlnatad by th* o*nt*atant* eoablning wnd*r th* non* of th* Virginia freight Aa*oolation, and th*n advancing tholr rat** ••• to a highor I m X than prior to th* rat* w a r ® T h i s report forth*r pointed *ot that th* now rat** resulted In dl»o rial notion again* t th* Hohnnnrt mrshaat* b*ooa** th* rat** b*tw**n Rlohnond and north*ra

11. J* B. Mord*eal, 4 BeIbL B4*torr of SJj ||bi4fridarlakabar* Sst&flMA. yiinir tin wnpubll*h*d history aval lab 1* at th* offlo** of th* Bailread), p. 51.12« Blebnond Chanhor of Comoro*, IgPftrt th* Traffic 1396. p. 9*

L Ucities higher than to othar Chesapeake porta aa polata ofreshipsMnt to tha a oath and vest. This permitted northam shippers to •and food a into tha aouth at lower coat by going arovuvl rather than through Rlohnond. An adjuataaat In thoaa rataa w a fimtlly aooonpliahad in 1096 and thla raatorod Rlohnond to ita aarllar competi­tive poaitlon with othar aoutharn port oitlas and vith Maw York.

•From tha oarliaat days of tranaportatlon enterprise in tha United Stataa atrong ralianoa ana plaoad upon oonpatltlon to aaoura •cottony and efficiency la nenageaant, stimulate good service, and pro- taot tha ahlpplng and trawling public fron unraaaonabla rates and fares. ■ ^ Rlohnond ship para had tha advantage of anoh oonpatltlon prior to tha antraaoa of tha Interstate Connearoa Commission Into tha field of rate regulation. Tha presence of the Tanea River and the possibility of shipping thereon kept tha rail rataa relatively low and traditionally has given Rlohnond rall-water rataa. Aleo tha praaanoe of five rail lines serving tha oity accounted for considerable oonpatltlon among the railroads.

Is 1919 tha Interstate Ceases roe Canals a Ion established tha throe railroad territoriest Southern, Official, and Western far pur­poses of rate making. When the boundaries of these territories ware established la 1920 Rlnhmnort naa included In tha Official territory.Tha dividing line between tha Official and Southern territories was sat aa tha aaln Has of tbs Morfolk and Western free Morfolk, Virginia to

13* Fair and Will 1 ana, on. g^.f p. 633

U 5Kenova, Vast Tlrglnla and fro* U n o n to Cinoinnatl along tha Chesapeake and Ohio Railroad. Thrss of tha rail llnaa whloh served Richmond, tha Southarn, Saaboard, and Atlantic Coast Lina, wars oon- s Id a rad to ba In Southarn territory and ah ip par a using any of thasa roads wars subject to Southarn rataa.

According to tha rofiliations which acco^>anled tha araatlon of tha rat# tarritorias, goods ahippad from Official to Southern terri­tory oarriod tha Southarn rata whioh was higher than tha Official rata. Tha higher rata also applied to shipments with Southern origination and Offloial destination. Richmond as tha most southern city in the Official torritory had tha advantage of tha lntraterrltoriaI Offloial rataa. Thasa rates ware generally lower on finished goods than was true of tha Southarn rates. Because of this. Rlohnond wholesalers had a competitive advantage in serving North and South Carolina over tha cities in those states. If a Baltimore sanufaeturar wished to distri­bute his product in Durham, North Carolina, for example, he would have paid tha higher Southarn rate if ha shipped directly. By using a Rich­mond wholesaler he oould have shipped to Richmond at Official rates and tha wholesaler could have shipped to Durham at Southern rates over a short distance with a net saving in total transportation costs. Thus Richmond wholesalers had lower total transportation costs Into North and South Carolina than did the wholesalers located there. This rata structure permitted Riohmood wholesalers to operate in the territory outlined in Figure 15.

It was to be expected that opposition would arise from the

K 6nor* southern areas plaoed in a disadvantageous position as a result of the establishment of the territories. In 1920 the Interstate Comoros Commission rendered a decision (Docket number 10500), whereby certain changes were made in the rate structure.^ This ease oentered around the distribution of goods into South Carolina, Georgia, Alabama, and parts of Mississippi from Raleigh, North Carolina, and Alchmond. The prevail­ing rate structure was suoh as to permit Richmond Jobbers to ship into these areas at lower cost than could Jobbers located in Raleigh and other Carolina oitles. According to the evidence presented in his case Richmond shippers had an advantage of $.605 per 100 pounds over Raleigh shippers into the northern part of South Carolina* This was so in spite of the fact that Raleigh was 157 miles closer to destination. The Commission found sueh advantages to exist In both class and commodity rates over North Carolina cities and invoked a new sohedule of rates which lessened the disparity between northern cities and Richmond, and between Northern oitles and the North Carolina oitles.

The decision of 1920 removed Richmond wholesalers from the distant parts of their previous market area in whloh they had been able to ccsqiete with cities to the south and made competitive the North Carolina market in which they previously had had little competition*The met result was a contraction of the Richmond market as indicated in Figure 16,

14* Docket # 10500, Interstate Commerce Commission Reports, (Washington, United States Government Printing Office, 1920), V* 57,P* 524*

Flfur# It N o m l Tndiiif 4r«t

Rlohnond Wholaaalo Establishnonts1921

U7

CHARLESTON

A-iRFOL K

CHARLESTON i m lost aftor 1920 I.C.C. doolsion

Souroo i Katinatad fron data in Chap tor V

usSot only did ilohaond wholesalers compete with existing wholaaalo «■ tab 11 sheen te In North Carolina, but additional establishments vara encouraged to a a tar tha field by tha ohanga In rata structure,

Tha altuatloo outlined above axlatad until tha Intaratata Comaroe Comlsaion ooapleted tha Southern class-seta investigation oaaa in 1927.^ This investigation was designed to achieve sons tmlf entity la rataa within tha Southarn torritory aa aatabliahad In tha 1919 decision, vhloh daf lnad territories, Oho of the findings of tha Counts si on was that tha rataa oharged within Southarn Torritory should be on a aliasgo basis baoauaa there was no reason why rates within tha territory should be a a sat that they ware higher In any particular part of tha territory than was no ran 1 for tha entire territory. In affect thasa findings prohibited any area within tha territory fron being at a dis­advantage relative to another area within tha territory because of geographic location. For exaaple, competing wholesalers located within tha territory and equidistant fron a prospective o us toner would have identical rates to that customer.

Baoauaa Rlohnond was in tha Official territory, and tha Cnil salon did not sea fit to change rates on lass-than-earload quantities, tha local wholesalers ware able to eaintain their operations in tha nearer parta of North Carolina, It mat be remembered that most

15* Interstate Camerae Camlaslon Docket Nunber 13491, Southern SlAUsDh&L (Rlohnondi S. D. Adkins and Company,1927).

14*■anufaetured goods sold through wholesale establishments were produced In th* Offloial territory. Therefor* Richmond wholesalers received goods In ear load lota at Official rataa and distributed Into North Carolina at las a—tha rwtsrloed rataa , whloh wara not affactad by tha 1927 decision. Additional wholesalers wara encouraged In North Carolina cities by tha more favorable ear load rates, and these houses offered additional oonpatltlon to th* Rlohnond houses* In additlon^Rlohnond lost oust oners In th* South Carolina area baoauaa they ware coape 11 ad to conpata in such areas on a Mileage basis with North Carolina wholesalers looated nooh olosar to th* area. Figure Id Illustrates th* Richmond wholesale trading area as it existed after the 1920 and 1927 decisions of th* Interstate Cowes roe Cowelssion.

The situation before and after tha 1927 decision can be illustrated by a comparison of actual charges according to tariffs in effaot before and after the order of the Conalsslon heoeae effective*

Frlor to January 15, 1928 the rat* per hundred pounds of drugs shipped ear load fron Indiana polls, Indiana, to Richmond, Virginia, and then shipped less-than-ftarload fron Rlohnond to Rook Hill, South Carolina, was $2*005* lad the narn handle* been shipped ear load to Charlotte and then reshipped to Reek Hill, it would have resulted, generally speaking, in aggregate eharges higher than $2*005* Beginning

16* The figures presented here were worked out from old tariff schedules by C. J* Adams, Lecturer in Traffic Minagement at the Ikiivarsity of Rlnhsrwl sad aa auditor for the Chesapeake and Ohio Rail— read* These represent typical a lass rate aoales not considering ooswodity and unusual exception ratings*

1 *on January 15, 1928, tha ohargas for drugs shipped oarload to Charlotto fron Ihdianapolla and than rashlppad less-than-OArload to Rook Hill was lovarad to $1*57 par hundredweight, whlla chargas through Riohaond re— aainad unchanged*

In tha eaaa of hardwara tha obargaa par hundrad pounds from Ihdianapolla to Rook Hill with Riohaond aa tha distributing point prior to January 15, 1928 wara $1* 585* If tar that data, ohargas through Char lotto wara Iowa rad to $1*26 per hundrad weight while charges through Riohaond reaalned ooastant•

Chergoa for dry goods froa Indianapolis to Rook Hill through Riohaond wara $2*445 par hundredweight, and an January 15 ohargas through Charlotte wara lowered to $2.26 par hundredweight* Again, the ohargas through Riohaond rasuiinad oonatant.

Slallar situations resulted fron tha Cowalssion Order insofar as shipments to othar Southarn oltias wara concerned* In tha oasa of shlpaents froa Indianapolis, Indiana, to Coluabia, South Carolina, through Charlotte or Riohaond tha change In rata was not quite as favor­able to Charlotte* For drugs tha ohargas wara $2*115 par hundredweight through Riohaond and $1*92 par hundredweight through Charlotte, whlla far hardware ohargas were $1*675 par hundredweight through Riohaond and $1*56 par hundredweight through Charlotte* Tha 1927 decision resulted in higher rates for dry goods froa Indianapolis to Coluabia through Charlotte than existed by way of Riohaond t $2*61 par hundredweight through Charlotte and $2*555 par hundredweight through Riohaond* It aust be reasabered that in eaoh oasa olted tha charges through Charlotte were

151higher than through Riohaond before the Coualssion's order reffect Ire on January 15* 1928.

la Chapter 17 it wns pointed out that the dry goods whole- salars of Riohaond were able to aaintain their relative positions better than houses in the grocery, drag, and hardware lines. The fact that the 1927 decision of the Interstate Csaaaroe Cornelssion did not reaore Riohaond's freight rate advantage for dry goods itaas contributed naterlally to this situation. In fact the Riohaond wholesalers were able to ooapete effectively In the Carolines and even into the northern parts of Georgia.

Froa 1927 to 1935 there was no change In rate structure and the territory served by the Riohaond wholesalers rows Inert fairly con­stant. The wholesale establishaents were able to ooapete effectively in the forth Carolina area. However* in 1935 tha Interstate Comsroe Cmsnisslon found that certain rates between specified Virginia points, including Riohaond* were unreasonable and unjust* In favor of the Virginia oitles ever oitles in forth Carolina. The Coanlssion ordered reasonable and Just rates to be worked out.1? In this ease It was pointed out that Riohaond wholesalers ooapeted for trade in forth Carolina with the Jobbore in eaoh eitios as Greensboro, Charlotte*Vina ton Salem* and Durham. Included among the ooaplainante froa these cities were wholesalers in fruits* vegetables* oanned goods* dry goods*

17* Interstate Csaaaroe Connies ion Reports) (Washington: United States Clevsraasat Printing Office)* Tel. 213* p. 259.

152terdwnra, and work clothing.18 Tha oo^IaIqabU oMt«Dd«d that tha sxlsting frsight rata atruotura was hl£hljr favorabla to tbair eoapatltor* 1a tha Virginia altlas • In addition to tha oo^lalnanta froa North Garollaa thara wara saws ral froa Virginia ooananaltias in tha southarn part af tha atata and thara fora lb tha Southarn torritory. Ona who la- aalar from South Boston, Virginia, taatlflad that haaauaa af tha apraad la rail fralght rataa hatwaan Riobaoad and South Boston It ana naoasaary far hln ta tews goods pure ha sad in Offloial torritory shippad hy rail to Riotanond and than haulad hy truck to South Boston. Whan tha rataa wara altarad as a rasult af this dselslon, tha Blohaond wholaaalars wara no loagar ahla to aonpata la oar tain Borth Carolina araas in whloh thay ted pravloualy oparatad. Tha affaot af this d sola ion is lllustratad In Flgura 17*

Of la tar si^iflsaass to Bleteond wholaaalara wara tha Class Bata Investigation of 1939 (Doofcst 2S300) and tha Conaalldatad freight Classlflaatloo af 1915 (Daokat 21310). In thasa dookats tha Intarstata Connaraa Cauulssisu statad,

Beginning with tha yaar 1B87, and o an tinning to tha praaaut tlai, wa tews andaarorad to pronata tha wi1 floatlan af freight olasslfloatioo throughout tha a own try. Tha foot that a uniform c lasslf loatloa would ba a esttwaalaaes Is a ooasidoration af rala- tlwaly iliar l^portanoa* Wa tews adwseatad udfUalty haaauaa it is aa ass— itlal part In tha gsaarul aehame whloh oontauplataa graatar oonalatanoy la rata uaklng and allnlnation af dlserinlaatioa

1B« This-. p. 270

Flgum 17 V o m l Trading Aron Riohaond Wholnnalo X n t n b l l n h a n n t o

1935

cmahucsto

*l e s t o n

SAVA NMAH

154and inequalities •

Te date, tha uniform classification has not Wan oosplttM, hat thara has Wan aa lasraaaa In Official rataa of 10 pareant and a daoraasa In Southarn ratas of 10 pareant. Qatll thasa changes wara affaotad thara axlstad a dlffarantial of approximately 39 pare ant Wtween Offloial Sou thara Class 1 rataa* Tha change has narrowed tha gap to about one-half, bat has not eliminated it.

T W above daolsions ptrmit a suppliar to have a competitive advantage In tha araaa olosast to him. Tor example, tha Riohaond whole- salar can aaat tha Baltiaora wholesaler at a point mid-way Wtwaan tha tvo oltias with aaeh having equal transportation ohargas to that point bassd upon tha Official rata. To tha south tha Riohaond wholasalar oan aaat tha Raleigh wholasalar half-way Wtwaan tha two oltias, and aaoh will have equal transportation ohargas using Southarn ratas.

It would appear from tha aatarial presented above that thara was little hope for tha Riohaond wholasalar ejooept as a result of population and business growth In tha area immediately surrounding tha oity. Although tha Riohaond jobbers are no longer able to ooapete as favorably in oartain areas which aero forasrly served there are othar factors whloh tend to alleviate the situation.

TWre is evldanoa that maqy largo Manufacturers use a ays ten

19* Interstate Cooassroa Canutes ion, Docket babar 20300,Class Rate lavestigation, 1939 and Docket Runber 38310, Consolidated freight Classlf ioation, Mlneographed booklet provided by tha Connies ion, Sheets ID and 11.

155of distribution, vlth tho torritory to bo sorrod by oooh distributor •stobllshod by tho nanufaoturor• For oxsoplo, tho Riohaond distributor of General Hoctrlo appliances has s torritory ostablishod by tho Oeneral Cootrlo Corporation and doos not ooao into ooapotltlon with othor distributors of Ooaorul Sleotrlo sppllsnoos. Many of tho distri­butors loos tod in Riohaond undor suoh arrangononts sorro nil of TlrflsU, with tho oxoeptlen of tho aorthorn ootsstlos, sad slso sorro tho osstoru psrt of North Corollas* This torritory has rosmltod froa tho fselllty with whloh tho ro tailors osn bo sorrod rath or than on tho basis of transportation ratoa aloao. Thors Is aoro diroot rail service into oastorn North Carollaa froa Richmond than ho two on oastorn and wostom parts of that stato. lotallors in Arlington and Fairfax oountlos a ad In Vlnohester ean bo aoro oasily sorrod by distributors looatod In Washington or fialtlaoro than froa Riohaond.

It asst bo roasahorsrt also that Jobbers In linos vlth rola- tiraly largo aarglns aro ablo to ooror a vldor torritory and to absorb groator frolght ohargos for purpooos of ooapotltlon than aro thoso with saallor aarglns• Oho of Richmond's hardwars housos whloh handlas sholf goods prlaarily, has boon ablo to aa In tain distribution in Virginia,North and South Carollaa, and parts of Georgia. This Is aaoh tho sans torritory as tho flm sorrod In 1900. Anothor hardware house handling hoary hardwaro and faru Implements whloh opo rated In tho asms torritory In 190C Is now limited to Virginia and parts of North Carolina. In at least part of this area frolght ohargos anst bo abeorbod, thereby In­creasing total aoats.

156Truok Tttuportetlja

Tha dmlopMnt of truck transportation h u not boon Materially dlffonot In tho Eichaond a m than In tho root of tho Uni tod St*too. IHnhnond Wholesalers oro 001 rod adequately by 55 public ond contrast ootor oorrlora in addition to tholr own floats of tracks. Tho doiilofoont of no tor oorrlors has Inf loo no od tho trtdlng aro* of Blob* ■ond wholesale os to hi 1 shaonts In sororol ways. Aa such sorrloo has ln- oroasod and bsao— aoro roadlly available, snallor oontors have developed as looatloas of wholes*lo houses. For ahortor hanls tho nso of tracks provides loss costly transportation, ospoolally for snallor quantities, and prorldos door-to -door sorrloo noro floxlblo than that offorod by tho railroads. At tho pro son t tlno tho door-to-door do livery provided by railroads In Richmond Is United to tho city limits as they existed in 1961 and Ignores the expansion whloh took placo by annexation In 1942.

Tho o on traction of wholesale trading areas has boon especially apparent In tho grocery trade. While Blohnoad grocery houses at one time served a large territory extending into Forth Carollaa In addition to snch of Virginia, that torritory has now boon reduced to an area within a 50-35 nils radius of Elohnond. Such o annual ties as Orange, Virginia (90 niles northwest), Calpopper (65 miles to northwest), and Fredericksburg (55 nllea north) new have wholesale grocery houses which compete far tho fringe trade with tho Elofamoad hoosos.

In 1925 the Elohnond wholesalers had an additional territory opened with the oo^lotion of Downing Bridge across tho Eappahhaaeok Elver at Tapps ha nnoek. This bridge spaaed up tho Eorthsrn Back area of

157Virginia whloh previously had been almost exoluelvely a part of tha Baltimore market. Although thla araa la only 50 air alias froa Rioh­aond, tha ahnaaoa d£ easy transportation aoroaa tha river aada trans- portatlon to Baltimore aaalar than to Rlahaoad. Unfortunately, however, tha oomties la tha Morthern hook araa ara aaall and aparsely popnlatad and offar llttla narkst potential.

SaaaaryOn tha has la af tha evidence it la obvious that Riohamad'o

paaltlan aa a wholesale trada aeater has haan Influanead to a greaterdegree hgr tha rataa charged for tranaportatlon than by tha availability of facilities. Daring tha flrat two eantarlaa of lta axlatanoa tha aarohanta of tha olty derived banaflt froa tha loeatlan of tha olty on navigable water. Rven aftor tha James River oaaaad to ba of groat lj^ertaaoe aa a aaana far transporting merchandise, Its praaanoa and paaslbla ana lnflnaaoad tha ratas ehargad by tha railroads.

Tha low rail ratas whloh prevailed prior to regulation by tha Interstate Ceaneroe Cosal aslan anablad tha wholesale establishments to sarva a largo part of tha Southeast in eoapatltlan with eltlas nearer tha aarkat. Tha earlier regulations of tha Coil as lap ea in tain ad tha advantageous position enjoyed by tho Riohaond eatabllsfananta through rataa whloh later ware aooepted as being dlsorlalnatory to ooapatitors in southern Virginia and Korth Carolina* Mash of this disorInination has boon eliminated through Inter decisions and aiders of tha CoMlsslon, with tbs mat result that aaeh territory previously served has bean either allalnatad entirely from the marketing araa of tha Riohaond

158establishments or has been aada highly competitive. If tha jobbers of Richmond expect to expand thalr present territories, thay aaat do so by absorbing freight charges ta tha axtaxzt necessary to provide tha pur- ohaaar vlth a delivered prloa no higher than that ehargad by eoqpetltara. Tha only way la whloh thla can ba dona without rodeoing net profit an aparatlona la to lnoraaaa tha afflolaney of oparatlan of tha house. la a a tody prepared for tho Research Committee on Markets and Marketing of tha Qovernor's idrlaory Council on tha Virginia Seonomy (of which tha writer la Chair— n) It waa pointed out that Uttla has bean dona historically by tha Virginia wholesalars to lnoraaaa tha efficiency of operation*20 3— h activity presents tha beat opportunity for per­mitting competition In tha fringe araaa*

It la also evident that Rlohnond wholesalers lost nuoh of thalr early advantage which resnlted fron location on tha Jane s River beeaose attaoq>ta ta — intain and increase channel depth followed too long after ohangea la ship aonatraction. This, ooupled with the development of the railroads ta deep— tar porta, resulted In an effective by-pasa of the olty laaafar aa ferelgA and ooastviae trade was oonoerned. Under existing conditions there appears ta be little opportunity for farther development of port — tivity. Present shippers do not a— the facilities to any great degree and — leas there la Industrial expansion,

20* L. K. Johnson, — rheat»*■ Jg Vlreinie. (Preliminary Beport of the Committee an Markets and Marketing of the Advisory Council — the Virginia Ssonomy, Division of Planning and Seonomlc Develop— nt, Richmond, Virginia), pp* 68-70*

199the ftifar> ef th« port li not bright.

Tho wholesale trading a m of Riohaond boo boon affected by tho development of aotor transportation In tho ooao way oo tho other larger iholoalo oontoro, specifically, by permitting smaller oitles to develop ao wholesale trade oontoro. Those smeller oitles have a cc^is titles advantage doe to location whloh a1love the vholeealer located there to serve easterners with a lower transportation oost. This developswnt has been most significant la the grooery lines.

Finally, the practice of asnnfsnfurors in using the distributorship system whereby an exclusive territory is assigned to a distributer presents an opportunity for wholesale establishments in Richmond to serve larger territories. It is to be expected that Rich­mond establishments will continue to be used by manufacturers to serve meet of Virginia and eastern Morth Carolina as long as present relative transportation facilities and rates remain the same.

There is no reason to believe that there will be expansion in the area served by Richmond wholesale establishments. The future success and growth in business must come from more Intensive cultivation and greater penetration of the existing market.

CHiPTB TIThe TUatln of llohaoad Uholoaolo Xitabllohaonto

Although >11 foroo of bulaoof trt subject to werlou* tarn and foot whloh oro doponri— t upon such things as fora of organisation, function* performed, set profit, and looation, the intact of the taxes and fees nay be such as to affect the competitive si teat ion of a particular oonoera. This is ■■y true If the taxoost of doing a given amount of business is greater for one establish- nent than for its competitor. Snob a situation exists for wholesale establishments in territories served by competitive establishments whloh operate under a different taxing authority with lower total taxes per dollar ef sale or profit. The purpose of this chapter is to determine, insofar as possible, whether state and local taxes are signi­ficant footers in the ability of Aiohnond wholesale establishments to compete with similar ooeeems located in other cities within Virginia, and nearby oitles outside the State.

11 On las a forbidden by express or implied constitutional provision, tax laws nay be enacted under two serve reign governmental powers — and ||| BfiUU. newer. U n d e r the tax powerthe state has authority to "exact contributions from persons or to make

1. U. J. Shults and C. L. Harries, £lt£lfiflA Pehlla TITTf (Hew Torks Prentice del 1, Ino., Fifth Id., 1949)» p. 166.160

161lories prvptrtj*11 Tht polio* powr represents the avtkoritj of *•toto "to oeatrol pereons or property within Ito Jorledlotion la tho Interest of general welfare ond ... llooaao fooo loriod to flnonoo the ooot of regulating « portloalar Industry or occupation oro bosod on tho polioo powor.*3

Tho discussion pro oo a tod la thlo ohoptor io lialtod to state, oomty oad aalolpol taxes ond lloonoo fooo Inasmuch oo thftre Is no ▼ariaticn la federal toxoo for eoegmreble firm regardless of location. While only tho loool tana oro significant for Virginia eltios slao* all fimo pay tho same atato tax, both th* stato and local taxoo hare an ljgnet for ooaparloon with oltlos outside Virginia.

Tho Development of Elohnond Taxation For pnrpooos of slnpllelty tho torn taxation is used hors to

eoror all ferns of taxes and foes regardless of tho power nador tdiich loriod. A lloonoo foe nay boo one , in faot, a tax If tho roTonue ro- ooirod thorofron is greater than tho ooot of tho function iarolred. By tho os no token, a lloonoo foe nay bo called properly a tax if tho prlnary purpose Is that of raising rereanes.6 In fact, tho Coda of Virginia refers to tho UAEUE. for wholesale merchants. 5

2m JfeUL* 9 p* 166.3. Ibid., pp. 166-167.i. A nor* ofl^lota disc ass lan of tho relationship between

lloonoo foes and taxoo can bo found in Chapter XXIII of EBfcUfi.Hllltt by Shulto and larrlss.5* Code of Virginia, 56-305.

162ft# firat U m m n tez ftpoitd la TlxfinU «ts eontalnad la

tha "Aat H y l i g Tmna far 8ippwt af Oavarneent* pasnod la 1777 vfaioh provided for a tax af thraa peunda aa aach Ordinary. * it was aot until 1790 that aerehamta, aa a group, wara lieansad la Virginia. At that tlaa tha llaanaa uaa aat at a flat rata of $15.00 far ratallora and $40.00 for uhalaaalara ar wholeaftler-retailors* Tha baaia phllooophy of a flat rata rauaiaad for uaay years, although la 1818 tha rataa aura lh- oraaaad to $20.00 far ratallora aad 040*00 far wholesalers. In 1839 tha llnauaa tax proridad far a ene-elghth of one paroant par $100 of all gooda on hand arar $2,000.00 far ratallora and orar $40,000*00 far whole- aalara ia addition to tha flat rata. Tha arldanea indloataa that thla prorlaiao far a tax an Imrantoriaa uaa diaaardad tha following jaar. By 1B4D a prarlalaa uaa undo for distinguishing batwaan a wholesale estab- lishnsnt aad a ratail aatabliahuan t an tha baaia af tha proportion of total aalaa aada la hulk ar uabrafcoa paokagaa. If aora than half of tha aalaa af an aatabl 1 ahuant wara la bulk ar uabrokan paokagaa It waa hold to ba a uhalaaala aatabliahaaat.

In 1843 tha dlatlaatlon batwaan uhalaaalara aad ratallora waa drappad and tha llaanaa tax uaa haaad only upon aalaa. Salaa of $5,000 or laaa wara tarad a flat rata af $20*00 whlla aalaa of orar $5,000 wara braekatad and pragraaaad at tho rata af $1*00 par $1,000 af aalaa abase

4* Huh af tha hlatorieal data presented heroin are found la a atudy praparad aa a pabHa serrlee by tha firm af T. Colsnan Andraua and Cesumay, Cartlflad Publio Aaeauntanta. Tha raaulta af tha atudy wara praaaatad In tha Virginia Mailaipal Berlov laauea af April, •by. June, and July, 1941.

th* $20.00 llil— , with * H z l a « U o w i m ehtrp of $100.00. This fora of lieansa raaolnad in off oat through tho Civil hhr with oonsidomblo ohABft in mtos ond on axponslsn of oovomgu. I7 i860 tho rotos hod hoon troblod with tho l l i l w of $20.00 oovarlog only $1,000 of solos. Cortoln aporotlons swoh os doolors in eool, loo, ond wood woro brought wndor tho covarag* of tho low. In 1862 tho U x rot* wos ineroosod on additional 90 porsont os o wor uoosurs ond ronolnod tho roof tor static wntll tho oossotion of hostllitios.

Taxation of norohont* on tho boots of solos wos not without opposition. In 1S97 o oonnittoo of tho Boord of Trod* pro son tod on oddross to th* norohonto of Virginia. In whloh op pool wos nod* to tho legislator* "to raviaa tho tox lows to glva norehonts nor* oquitoblo trootnont by applying to thon tho oono rot* os oppllod to othar buoinoooos.*^ Aoeording to dot* provided in this oddross, tho fornor wos toxad 4D son to por $200 voluo of his load, tho nonufooturor wos tonod 60 oonts por $200 value of oopitol wood or invested in his bos 1 nos ■ whllo o proporty holdor wos to rod 60 soot* por $100 voluo of his porsonol property, nonoy and orodito. It woo roportod thot tho narohont pold o spaoiflo lloonoo tox tnd thon wos toxod on solos with a sliding soolo thot bovorngao $2.56 on ovary $100 of his oopitol.** It woo oontondod thot tho norohont poid ot loost six tl£ao as nnh as ony othar oltioon.

7* I H i m If m UmbftAid. ll Ufgltit* 6 short popphlot with no author or publisher, ovoiloblo in tho Virginia StotoLibrary, 1 fob— ud, Virginia.

144M i r tha tox lav la wdiiaw i at th» tlna a ssnaiaslan norohant who aaraad 2$ psrasat oa aalaa af $60,000 had aa lae— of $1,500 and paid a tax af $354 ar appraxlnatsly aaa-alxth af hla lnooaa. la s^>port af tha plaa far a ravlaian af tha tax lava tha osMlttss atatad that,

Tha hlatary af m r y oaaarclal paopla plainly taaohaa that whlla an onarana rata af taxation vpaa nation aapltal nay, hy varlana nxpadlaata, avail far tanparary pnrpoana af rnvnaaa, In a aarlaa af yaara it dafaata lta ana abjaet hy rapmaaint tha aatoxal Inaraaaa af vaalth and popnlatloa j tha only paraaaant aaaraaa af a^pply mpora whloh tha pnblie traaavry oan mly.*

Inaanaoh aa tha aaaa typa af taxation vaa aalntalnad through tha Civil Uhr ona naat aaavna that tha narohanta vara anaveoaaafal la thalr patitlaa ta tha Uftilitari. In fact, tha aaaa gaaaral dlffaranaa m - nalna In tha taxation af aaaafhetarara aad aarahanta alaaat a aantvry la tar* At tha praaant tlaa aaanfaotnrara la KXahaand pay a olty licanaa an aaahlnary aad taala with a prafarrad rata af $1*00 par $100 aa eoa> parad ta $2*30 par $100 far anah nan binary and toola naad hy narohanta* Tha haaviar tax bnrdaa plaoad vpan tha aarahanta nay wall havo haan a raavlt of tha antipathy toward tha narahant olaaa and a lack af appro- o lot Ion far tha aaaaaalo aantrlhvtlona af thaaa nngagnd in dlatrihntlon* Tha haala raaaanlng if tha lnglalatvra la mknown, hat it nay havo haaa oonaamad with tha philosophy that aapltal la pradnatlva whoa naad In naavffce taring , hat that aarahanta ara vnnaeaaaary niddlanan who araata no valna hat taka prof lta far only baying and aalllag good* and thara- fora, absald ha taxad an anah prof lta*

9. JUA*, P* 4*

165iceadtlB( to «xlfilB| records ttor* tppttri to havo boon ao

Stato lloaaaa tax aa narohanta aftor tha Civil War wtll 1374* In that /oar tho lagialataro rooatahllahod a ajatoa of aarohant'a licences, hot baaed it npoa porohaooa rathor than on aalaa aa previous ly* Tha aaw taxoaa |10«00 an pnrahaaoa af #2,000 or laaa with an additional one-haIf of aaa paroaat aa pnrchaaaa froa $2,000 to $60,000, Tho rata daeraaaad for porchases af ovor $60,000* Aa In tha pro war law no distinction waa nada ha two an ratal lara and wholaaalara* Thla haalo tax ayatoa raaalnad vlth llttla change except for rataa nntll aftar 1930* Slnoa 1930 tha adjr najer ravlaian of tha narohanta' llaanaa tax haa baan to distinguish batwaan whalaoala and ratall tranaaetlona aad to change tha baaa of tha tax for ratallora froa parohaaas ta aalaa*

Vo information la avallabla consenting tha raaaona far taxing wholaaalara an tho baaia af pnrohaaaa and ratallora on tha baaia of aalaa* Dlaanaaiona with tha Chiaf of tha License Duraau of Riohaond Indloata that tha reason naj hava boon ona of expadleaoj to parnlt greater aaaa la torinj tha chain atom wnmhonaaa an tha baaia of pnr­ohaaaa* Another poaalbla raaaan nay hava boon a doaim on tha part of tha legislators to five tha wholaaalara an advantafa over tha retailera In recognition af tha lower profit nargln wndar which wholaaala aatab- llahawata aparata.

Ih Hahaond tha of narohanta da tea back to 1001 atwhloh tlna an ordinance waa paaaad ta provide fonda for tha firet Police Department* According to tha preanble of tha ordinance there oan be no question bat that tha lloonaa waa far rovanaa pnrpoaaa* It waa foocd

166that th* ordinary revenues af tha City Mra inadequate ta rapport thaordinary expanses and it ana thara far* naoasaary to ralaa additionalrevenues. Tha aaaaaaor uaa ordarad to go through th* oitj and taka a llat af all aarahanta for lioansiag purposes. Tha narohant lioana* af lioharai haa traditionally fallowed tha pattern of th* Stata licenaa*

Present Lioanaa Taxes At tha praaant tin* a aholaaal* narohant loco tad In Rlohnond

noat pay a lioana* tax ta both tha Stata and tha City. In aach oaaa tha wholesaler la tarad an tha baaia of total purchases.

fhragraph 306 of Tltla 58 of th* Virginia Coda a tat* a,Par every lioana* ta a person, fir* or corporation engaged in th* bnalnaaa of a wholesale narohant# tha

anaant to bo paid ahal 1 b* aa follows*If tha anoant af pnrohaaoa throoghoat th* thon naxt praoadlag oalandar yoar did not axeoad tanthousand dollars, tha anoant a hall b* fifty dollar* tah an anah pnrohaaaa exsooded tan ttanaand dollar* ,tho anonat aha 11 bo fifty dollar* an tha firat ton thoaaand dollar* and twenty oanta aa arary ana hundred dollar* npon all in axoaaa of ton thoaaand dollar*.In addition to regular wholaaalara tha aaaa tax appliaa ta all othar typaa af wholaaala aatabliahnanta except aganta and broker*. Tha laat an nod grotp la taxed on tha baaia af greaa oaraulssiona and graaa profit* with a flat rata af fifty dollar* an tho first on* thousand dollar*, fifty oanta par ono hundrad dollars on tha naxt niaa thoaaand dollar* and ana dollar par on* hundrad dollar* an all graaa aoaraiaaiana aad graaa profit* in axoaaa of tan

thoaaand dollars.Although Riohaond wholesalers hare no oe^atitive

disadvantage with othar Virginia fires in regard to state lioana* taxaa9 Virginia law penait* tha looalltias to aasasa lioana* taxes on business aatabliahnanta 9 but does not prasoriba tha tax base aad allewe

167th# n t M to itry bitMM tltioi, Rlohnond wholoulo ••tabUohMnta art ehargad a lioanao tax aa proridad in tha Stata law.

Paragraph #5 af Chaptar ID af tha Riohaond City Coda parorldaathat,

•wary paraaa engaged in tha haainaaa of a whele- aala narohant shall obtain a liaanaa for tha privilege af doing haainaaa In tha City of Riohaond aad shall pay a I Ioanna tax thorafar to ha noasured hy tha anount of parohaaas aada by hin on it during tha praeading license yaar. Tha tarn *vholasala narohoLat1 aa aaad la this aaat ion shall laeluda every narohant who aalla ta athara far rasala only, or who aalla ta institutional, oosMsreial or iadaatrial users, aad a saparata lioonaa shall ba obtainad far aaoh dafialta plaea of busInass. For orary lioaaaa iasuad to a parson angagad in tha boalaass of a wholesale narohant, tha anoint of lie ansa tax to ba paid thorafar ahall ba equal to $20*00 and twenty-fire hundredths of one par oaatua of tha puruhaaaa aada throughout tha than next preceding license year.Again, all ^ypes of wholesale aatabliahnanta are ineluded exoept agentsand brokers who are taxed ”$20*00 and one par eantua of tha grosseoaniasiona of tha business."

Sjyygi ZRS IdUtQhtil 194B tha tax rata for wholesale astablishaants in

Virginia was 13 oanta par $100 of gross purchases* In that yaar Governor Took included In his budget aassaga to tha legislature a raoauaatadatioo that tha state wholesale license rata ba increased to twenty oanta par $100 of gross purchases. Thara was considerable un­organised apposition, but tha legislature enaoted tha increased rata. Prior to tha 1990 session af tha legislature a oanpaign was started toaooura a reduction In tha rata. The priesry arguesnt advanced by tha

168wholesalers was that the 20 eents rate reduced their ability to ooapete vltn wholesale as tab 11 sheen ta outside Virginia* In support of the theory that the Merchant* s tax creates an mdue burden, the standard exaeple frequently cited Is that of ana of the large chain stores whioh r—imred Its warehousing operation from Riohund to Washington, D* C., because of the additional tax burden* There is no written evidence, however, that the tax burden was the prinaxy cause of the rueoval*

la the 1950 session of the legislature a bill was introduced and passed by the 8eaate to reduce the rate to 13 eents per $100 of pur­chases* It appeared that the House would approve a reduction to a rate of 17 eents, but on the last day ef the session the bill was killed.The reduction in rate was apposed by the State Tax Ceaelssloner.

The wholesale establishasnts through the leadership of the Virginia Wholesalers * Association again proposed legislation in the 1952 session of the legislature to reduse the tax rate* This tine the reduction was approved by the Tax Coandeeioner but again it failed of passage* bn like the 1950 effort, the retailers attempted to secure a reduction in their rates as an aeendeent offered to the House version of the bill* The Senate approved the reduction for wholesale establish- ■ante but the nee sure was agalh defeated by House notion.

Analysis of the Ce^>etltlve Ihpact ef Rlohnond and Virginia Wholesale License TaxesOtoe of the probleas traditional in eating an analysis of the

iepaet of license taass has been the absence of valid data relative to aotael tax paynents together with operating figures of the individual lioeaeee* Prior to the 1952 session of the legislature, the idiolesale

1*9MtablisloMnta ta r*pr«MQt«d by the Virginia Wholesaler** Aaaoolotion ■toarad tha eervloea of a pub lie eo counting firm bo praparo f 1 nano la 1 data an tho baa la of tax return* ft lad In the offlca of tho State Tax Caaaeiaaianer*^ Aarmlaalon vaa aeoared fron 493 vholeaalera to tBalnt tholr 1949 tax returna* n o return* aaro examined for 207 firaa with total aaloa of |2S79t29f8U»07« D m firm* aot inoladad war* ra joe tod for auoh roaaona aa lnaufflolent data on tax retome, lnooatplata return*, combination baalnoaa, and/or lnaof f lo lent maabwr of roturna available for a laaalfloatlan purposes* In addition to examination of the tax re- turaa, 89 flna were aolaotod for a complete factual analyala for oore thorough eompariaon purpoaaa. The aunbor of fine by olaaalfloatlon are praaantad la Table 46 la tbe Appendix*

haanaoh aa the Richmond vholaaale lloenao tom la levied on the aaat baala and In addition to tho Virginia tax, such Inoqultlaa aa ■ J raault fram the fan of the a tat* tax are ooapounded for ehoLoeala oatabl tahnonta looatod In Rlohaoad* Virginia lav daea not apoelfy tho ha a a or rate a to bo need by tho localities for lloanalng purpoaaa and tho foot that variation* oxiat ereato dlfforenoaa In tho tax burden ao- eordlng to looality*

A tax dilah la baaod upon pure ha ao a raaulta In a varying burden upon tho vholeealer* aooordlng to the turnover rate and the grave nargla of tho Individual oatabl t ahnamt*, While it la reoognisod that tho

10* Tho quantitative data preaontod In thla aoetlon are taken freai tho mupnhHahad report of tho a array oondnotod by tho Certified M 1 t » Accounting flra of While r and Woodhouaa* The author uurhad eleeely with Mr* Woodhouao and uaa funnier vlth the aarrey aa It par ogre aaod.

170two a m not ooopetltlTa tha Inpaet or t m m r and groaa nargln oaa ba lllaetxmted by oonparlag tha altnatloo for a tobaaoo uholoaalar vlth that for a vholoaalar of avtoaotlTv pttta* tfalng tha a-rago narkup paroaat aa a a tab He hod fro* tha aurray, a tobacoo uholoaalar vlth aalaa of #1,555,210 baa pwohaaoa of |lt455v2l0 and a gross aargla of #100,000. To aohlevo tha aana groaa — rgl n of #100,000 tha idiolaaalar of autonotlTa part# baa aalaa of #354,233 aad pwhaaaa of #254,233* Tha tax baaad vpoo pnrohaaoa thua raqmima tha tobaooo iholaaalar to pay oaar four and on a half tlaaa aa Booh tax aa tha vholaaalor of aatoaotl'va parta far tha aa— anouat of groaa profit*

Actually tho lapae t of tanaa upon poapntltion anat ba ■aaaurod In two vayai tha ralatloaahlp of tha tax to — t loo a— and tha ralatloaahlp to — loa* An analyala of taxaa relative to — laa la laportant booanao It ahova tho axtant to idtloh a firm oaa oo^pato oa a prlaa baa la or expand Ita tarrltory by aba orbing hlghor tranaportatlon ooata* Tho tax altaatloa relative to not lneoae la laportant ever tha laBf-na booanao of tha continuing oapltal require— nta of bualnaaa.If tha tax bnrdan la high thara la laa a ohaaoa to attract oapltal or to provide oapltal anode from aaralnga.Xki. y jA U M U A i£ S u u 1# iu u n

lb ardor to analyao tho rolatiooahlpa batvaan tax burdan and not inn oaa aa thoy vary according to laoatlon, a hypothetical average* alma f l m naa oatabl la hod for oaoh of four linens tobaooo and ooo- footiona, grooerlaa, hardnara, and act— atlxa parta* Thaaa axanplaa vara baaad oo averagea of tha flma laoludad la tha n r n y aooordlng to

171•Mh •luslflMtion* Tax»a worn than MlaoUtad for oaoh of thoao tvnm|B fins •• thoy would bo ohargod If looatod in warlowa oltlos within and owtslda Virginia. Thooo roonlto nro proaontod in Tnblo 34*

It lo obriowa that ti s wholooalo ootabliohnont with a high taxsonr and low profit wargia la affootod natorially, In rolatlan to not laoona by at* to and looal tax**. Vi thin Virginia, tho rang# la froai 45*2 poroont to 33*5 poroont of not inoono for tobaooo and oonfoationos fron 33*2 to 24*8 poroont for groaorlaoj fro* 12.3 to 9*7 poroont for bardwaro) and froa 23*3 to 17.3 poroont for awtoaotlT* parta* Vbllo llabaonrt wholooalo oatabl 1 ahnonta roproaont nolthor tho highost nor tho lowsst with roapoot to tho tana in roaltlon to not inoona, thay aro hlghor than tholr noat aoriona ooopotltora looatod in Wort folk. In addition to tho oanpotition of tho Kiohnond wholoaalora with ainilar oatabl I ahnonta looatod in othor eltlos, rooognition out ba nado of tho oanpatltlon wbleh oxlata batwaan Tarloua elaaa If loot Iona of ostabllah- nonta within tha oaao olty. For anupla, tobaooo prod wo ta and eon- foot Iona ara hand! ad by naay grooory wholoaalora f pot In Kiohaond tho groaory wholoaalora pay 11 oonta loaa par dollar of not taxablo inooaa than do tho tobaooo and eonfootlan wholoaalora* A ainilar situation oniata bstwoaa tho hardwnro and amtonotlwo parta wholoaalora* Both nay hand la Itona and thoroforo osnpato, bwt tho bardwaro oatabl! ah-■ant in Elshnoad pays llaanaaa and fooa of only about half as nnoh ro- latlws to not Inoona*

Tho variation in a tat* and looal taxaa rolativo to not In n n u a

for tho hl^t tnrnorer-low profit nargia oatabl 1 ahnoot is ovwn grantor

172Tabl* 34

State and Looal Taxes Belative to Set Ins For Selected Wholesale Lines 1949

City

n t U ^ M t l A k a M r

t« S m 7cseteaHsiI

-XXBft iu. TvteaotlTO*M m n Ann.,,2 1 i.<S S ~

State and LeoalBereent ef ■st Iheoao

Klefcnnaif 5,021 $ 5,623 9 12,154 9 1,186Alexandria 4,777 5,197 12,486 1,237Bnarllle 5,392 6,213 13,609 1,382Serf elk 4,090 4,632 10,751 1,040Sennokn 5,524 6,162 12,899 1,303Snffelk 4,526 5,094 11,419 1,080|t||£lBaltlnere ,Md2,382 4,360 18,673 2,984Char lotto, K2, 333 4,033 15,315 1,811Hlaahethelty,*.C. 2,588 4,361 17,904 2,257Balel«h,*.C. 2,260 3,708 14,823 1,780Uhshinrtea,0 . c. 1,739 3,142 14,483 1,896WinsteaSalem, W.C.2,408 4,028 16,047 1,991XlfiSAftfeiRio baaad 41.1S 30.1k 11.0k 20.0kAlaxnndrln 39.1 27.8 11.3 20.8BenrllLe 44.1 33.2 12.3 23.3■erfelk 33.5 24.8 9.7 17.5koaneke 45.2 33.0 U.6 21.9Saffelk 37.1 27.2 10.3 18.2fllfttSaltIjo»re,Md 19.5 23.3 16.8 9D.2Charlette,SB 19.1 21.6 13.8 30.5Sllaabethcitr,s*c.talol«h,SX. 21*2 23 .3 14.1 38.0

18.5 19.8 13*4 30.0Whshlaftea,9* C. 14.2 16.8 13.1 31.9SInetea­se lea, W.C. 19.7 21.5 14*5 33.5

1949eenfnotion sholesal•rI M M m M i U a n t p*|« 173

173h» Tha aftnc* frtctiy Aelsaalar h U 1949 saltt or $1,231,170 and graaa profit of $120,022.o, Tha tvoiftfi huNharo ahalaaalar had 1949 aalaa d$1,970,121 aad |TOm profit af $393,143.d, Tha avonro aotnaatlfo parta whalaaalar had 1949 aalaa aif $234,492 aad groaa profit af $3,047,a. Sat laaeaa hafarn tuna la haaad aa tha ororofi af flzai iaeladad la tha olaaalfloatlo* aad rapraaaata lao naa hafara any dadaatlaaa far taxaa. Aotaal nat laa fa la tha partlemlar alty aaald fry allfhtly aaaardlac to llaanaa tax dadaotlona prlar to oal- •wlatlac a t laaaf far Innnaa tax parpaaaa.f• Stata aad laeal teaa laalada all taaaa daaaad aaaaaaad far tha prlrllaga af doiog haalaaaa aad aa haalnaaa prapartlaa, Ian India* aarahaata llaamaaa, tahacoo llaaaaa, raglatratif faa, fra not laa taaaa aad atata law fa tax.

Soaraos Calamlatad from Tab la 47 af tha App nadir,

174vhta a— pa rod vith oltlaa Mtiidi Virginia. While Um tobaooo and ••afootloo uholoaalar la Rlehaoad paja foe* aad taxaa ropreaantlng 41*1 poroont of aat lnooao, tho aaaa oatabl 1 ahaont looatod la Uaahington,D. C»9 pay* only 14*2 paroaat or aboat oao- thlrd aa aash.

Tho orldonoo ladlaataa that aa tha rata of tomarar and profit aarglna laoraaaa, wholooalo oatabllabaoota looatod In Klehaond hare aa adeaatago over thooo looatod la othar eltioa. Thla la lllastratod by tho data aa atata aad local llooaaaa paid bj tho aato- aotire parta wholeoalore ralatlro to not inaoaa. While tho uholoaalar of aat— nttra parta looatod la liohoond pays 20 ooata por dollar of aot Innwaa la atata aad looal taxaa, tho aaao oatabllabaont looatod la Baltlxoro would pay 90 aomta.

Tho dlfforoaooa which haro boon polatod oat arlao fro* tho fact that both ftlchooad aad Virginia lory tholr aajor tax la tho foni of a llaonae foo aa porohaaoa, which la olooaly aorralatod with aalaa. Othor Virginia oltloa baaa tho llaonaa foo aa althar groaa purehaaaa or groaa aaloa, ah 11a tho aitlaa oataldo Virginia baao tholr aajar taxaa aa proparty.fltato ||4 ZiXU. to

>1though tho range in tho aaooat of atato and looal taxaa paid by Hohunod whelaaalo oatabl 1 ahooata la aabataatlal, It la rolatlTaly aaall when oaaparad to total aaloa. Data an tha ralatloaahlp af atata aad local taxaa to aaloa aro proaoatod la Table 99*

It la obwioua froai tho data proaoatod la Tablo 99 that tho dlfforoaooa la abate aad loaal taxaa re La tire to aaloa reamltiag froa

Tabla 35ftata tad Latal taxaa laUtlaa ta Salta For Solatia* bhalatalt Claaaifiaatio*

1949

S t l n i t k a l Im Cs llitnnlVtmWrnMm Immk E m a ls X

k k i

Tabaaia aadCoafaatloa ll.0 t0 .3 U ♦ 5.021 0.46*

Qraoariat 1,231,170 5,423 0*46Bardaara 1,970,121 12,154 0.62iatoBatlva Pbrta 254,492 1,1*6 0.47

loieB fttieltrtni llefcU m U t i m i ■ i i i f i o U i t k uTiwLalt 211MU Tlxaltlt tth tiCltloa CJLUit u y *A

$ 931 ♦ 3,202 0.09 0.30991 2,6*1 0.06 0.20

- 1,455 - 6,519 - 0.07 -0 .3 3- 196 - 1,79* - 0.07 - 0.71

a* Tha aaxlxM darlatloe rapraaanta tha aaooat of tax iiffaraaai batman Elohwd tad tha hl iaat or lamat tax olty, ahlahrvar la graatar. For tohaeeo aad ooafoetiooa, aad graeorioa ftlab- aood taxaa vara graatar by tha aanat ahawn. tiohaond taxaa vara lawar by tha aaoaat shorn for haidaara and avtaaotlrt parta.

Soma i Caleolatod fro* Tabla 34. aad 47.

176tho LMAtlto of tho ootabll i h m t tra quit* onall. It lo atft to M y that tho dlfforoaooa vhlab do oxlot oaq bo of m i y llttlo lnportaneo Insofar u canpotitioo lo aonoornod. Thlo lo truo for conpotltloa bo- tw o n oatabllohnonta of tho m m alaoolfloatloa loootod In dlfforont eltloo oo vo 11 oo for aonpotltloa botvoon dlfforont olooolflootlono vlthln tho nano olty. Tho dlfforonoo vhloh oxlota botvoon Riohnond and tho lovoat tax olty, Borfolk, for toboeeo aad oonfootlon oatabllob- nanto M M i t o to only #9*00 for orory $10,000 of oalea* Obviously, thlo lo not of onffloloat Inportaaoo to poml t aorloun oanpotltion on o prlno baala* At tho othor oxtrono, tho vholoMlo of aatonotlm parta In ttobnond hao a oonpotltlm advantage of only $7*10 for orory $1,000 of oaloo ovor tho oane entablleknoat looatod In tho olty (Baltloom, Maryland) vlth tho hoarloot tax load* Thlo lo not onffloloat dorlatIon to permit aorloun oanpotltlon on a prlno baalo*

ConolnolonoIt lo dlfflamlt to prooont an oatlroly objootlm dlnonoolon

of taxoo booanoo oafflo lont and aoonxmto quantitative data aro not oaolly obtained* An addod 1 apart I nant lo tho attltado on tho part of nany that all tojooo aro bad* Tho data pronontod horo aro tho flrot to ham boon aoemnlatod on thlo onbjoet In Tlifinla. Thoro hao boon a front doal of talk anoof tholamloro ta tho offoot that tho tax baood on pnrohaaoo lo lnoqnltablo and tho ratoo aro too hlfh*

Tamo roproaoat tho jirlnaiy oonroo of laoono for tho various vnlto of fovomnoats fodoral, otato or looal* Tho total anoant of taasoo dopoado oatlroly qio> tho flnanolal noorto of tho fommlnf unit,

177•ad tha fans of tantla neither l a a m M i nor dMr«u«« Utt BMd.It is «rid«at tkt the licenses charged wholesale ostablishuanta in Rletaaadf TirgitU irt aat lleaaaos water tha polio# power of tha atata or «lt/, hat « ajataa teaaa priMry purpose la to /laid lnooaa. is •ash tha faa should ha ooaaldarad • tax sad not • llaaaaa*

Tha praaaat taxaa on who la as la aatabl 1 ahaanta ohsrgad b y Riohaood and Tlrgiala raault la inaqultiaa by l^oalng a disproportico- ata bard at relative to \ nn naa aa diffarant typaa of wholesalers* Tha iaaquitlea raault from tha fora of tha tax and tha varying turnover rata and nargin of groaa profit of tha various cl as* if lost ions. Thaoa laa quit laa aro suah aa ta affaot aorioosly tho leng^rwa oa^atitiva poaitlaa of tho high turn eve r—lov aargin aparators through tholr lapact aa thooa aparators* ability to aoot tha capital aaada of tha business* This ooupatltlve situation holds trua for Rtchuond astabllshuonts ralatlva to alallar ooapanios looatod la othor Tlrgiala cities.and, also, far Riohaoad firas la oao olaasifloation coveting with aotab- lisJuaoato uhloh aro la aaathar class! float ion but whloh haadla alallar linos of aerohandles.

Riohaoad wholesale oatablishaoats, la oartala lines, have a aajor eaapatitlve diaadvaatago la ragard ta flrao looatod autoida tha atata, la tams of axtra taxao par dollar of aat tannuo* Ota tha athor hand, wholesale aatabllshaants with a low rata of turnover and a high aargia looatod la Bt whuofid have a o— pstltlw advantage over tbaaa looatod outs Ida tho otata. Thus oortala uholasala fins aro paaallaad far looatlag la Blobund while athars ara given an advantage* This

17*■ltvtiiw edits In spite ef the fast that It is impossible to distinguish tetiMo establishments sn the tans is of oo anomic mood or thsir eemtributions to tho economic level and business nativity adT tho oaummmlty.

Although them la basis for tho oonolasion that tho lioamoo tax booed upon pnmhnsos re suits in Inequities relative to not inoono them is equal basis for tho oonolasion that tho amount of tax aborted Richmond wholesale ostabliohmonts is of little competitive consequence when neaeared against sales. The amount of the tax in terms of the sales dollar neither penalises tha Riahmoad firm nor gives it a preference insofar aa prise competition is concerned.

Vo satisfactory reason has been presented for continuing the license system with the tax baaed upon pare be see. Insofar as Richmond is concerned the statement baa been node that the purchases base is maintained to conform to the State license and subsequent ease of administration. The only ether reason advanced has been that a license tax based upon sales would be difficult to administer in regard to chain store warehouses.

The best that can be said for the system of business licenses as developed for Richmond and Virginia is that they were permitted to grew "like Tepey" with little direction or long-range planning. Section 98 of the Cede of Virginia which provides for various licenses covers a total ef 42 printed pages while Chapter 10 of the City of Richmond Cede contains 70 pages devoted to business taxes and fees. Approximately 260 different businesses and professions are spelled out for speeific

179license utl«n in tht Ildnond tad*. It appaara that vhaaarar a paraao thwaght ef a aav kwiJMai it was addad separately to tha oada. Otta can aalj conclude that there la groat need for thorough study tad revision af tha 1 loanslag sections af tha coda a of both Virginia and ftiohnond*

While It ia recognised that tha praaant wholesale tax In Klatawad aad Virginia raaalta la Inequities, no ana haa proposed a nethod af taxation which would al Inina ta tha problaa af latqoi ty • Sona aantaad that a tax ha aad upon aalaa would raault in laaa Inequity while athara aantand that tha haa t aalntiou would too a tax haa ad upon groaa profit* Tha l^aot of awah taxaa a an ba Ulwatrotad by applying hjpathatloal rataa to tha average ldiolesale aatabll ahnanta waad pfivlaaaly* Tha roaulta aro illuatratad In Ihble 36 and ara ealoulatad an tha baa ia af a rata af 20 oanta par $100 af aalaa and 80 easts par $100 af groaa profit.

It ia obvious that a tax baaad upon aithar aalaa or groaa profit will raault In Inequities aanng tha various types of wholesale aatabl 1 ahnanta. While tha inequity resulting frow tha tax baaad 9 0 a groaa profit appears to ba lass than that eauaad by a tax baaad upon sales, practical a an a Ida ration af administration wakes awoh a tax Inadvisable*

Thara appears to ba eaasMn agreeaont aanng authorities that taxes should be based upon tha ability af tha individual or tha firm to pay* 8bilomsly. thea, tha nost equitable fern af taxation la one baaad ^an not Ioanna* ■ewaver, tha Virginia constitution prohibits tha Leoalitlee fran levying an laa ana tax In any farm* This leaves only

Tkbla 34

T tk m u l Caafwtlaa

OratcrlM Bar— raA it— tly» purto

Tuna fcalAtlva to Bart laa— Far felaetat Cl— lfle a tl— 1— 4 aa Bat flalaa tad Qroaa Fraflt

1*49

U fela

I 1,010,3*41*131,17*1,970,121

254,492

i K i h k I n a l iM tatlifloat iH lk M fiBHlk It

ItStU

$ 2,140,77 2M55 ♦ 73,555 • 97*44 7.9952,02.31 1443 121,822 940.14 4013,940.24 3.7* 395,143 3,144*30 3.043DI.9S 10.00 71.8U 574.75 11*39

B— at C&lralatai fraa Tab la 34*

181two alternatives insofar as tha aero bant tax la oonoerned. On* of thaaa la to recognise that any fora of business tax, othar than ona taasad apan nat inooas, vlll raault la inequities and through careful study attempt to radoea tha laaqaltlaa to a alnlaaai.

Aa polatad out previously, tha bualnasa taxing systems uaad by Virginia and Ilohaoad have dor* lo pad la a haphaaard nannar without thorough atudy or haalo policy, With this faot In alnd a oaraful atudy oould ha nada to raduoa tha inequity by aatabliahlng subclass If lea t Iona and proposing dlfforont rata a for tha dlfforont classifications. Tha seeond alternative la for tha atata and lacalitiaa to eliminate tha axlatlng system of lioansa taxaa with tha posalbla exception of a tnaa licanaa fas for polloa purpoaaa, Aftar this atop haa boon taken the state oould than lory a bualnasa lnooaa tax daalgnad to asst tha revenue assds of tha atata and looalltiss and pay to tha localities a fixed proportion of tha revenue received froa tha looality. This alternative would have tha advantages of levying tha tax aooordlng to tha ability to pay and would result In a acre equitable burden for all faraa of bualnasa enterprise, Practical knowledge of tha Virginia situation Indiantea little possibility, however, of such a solution to tha problem,

Finally, tha wholesale establishments of Richmond oould o on tribute to a solution af tha problem by asking a more realistic approach to tha situation. In spite ef their allegations relative to tha Inequities ef tha present tax their only proposal involves a re­duction in rates whioh, in itself, does mot remove tha Inequity among

182Virgin I* wholaaala aatabllahaanta tot Maintain* axiating lnaqultias at a Invar rata. Tha ralatlaa poaition of tha aarlou* claaaif loatlon* of who la aa la a a tab li ah Man t* would raaaln tha aaaa. It ia iMpraotioal to axpaot tha taxing aathoritlaa to lovar tha taxaa af ona aagMant of bnaiaaaa whan tha only argunant advanoad la to tha affaot that tha ▼arlooa olaaaificatioua within tha aa^ant pay a diaproportion*ta ahara of tha total tax of tha aagMant. Such * aolutloa raault a only In ana liar raranuaa for tha atata and tha loealitiaa vithout alinin- ating tha injnatioa af uhiah tha vholaaalara oo^lain.

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1BACharlotte wore selected.. For Charlotte tha area included thirty North Carolina counties and nlna South Carolina counties, while the Richaond area Inc 1 tided forty—six Virginia counties. The oounties Included in the respective areas are listed helowt

NORTH CAROLINAAlexanderAnsonBarksCabarrusCaldwellCatawbaClarelandDavidsonDavieForsyth

CherokeeChesterChesterfield

OastonGuilfordIredellLincolnMcDowellMecklenburgMontgoaaryMooreRandolphRic haondSOUTH CAROLINAFairfield Kershaw Lane a a ter

RowanRutherfordScotlandStanleyStokesSurryUnionWataugaWilkesYadkin

SpartanburgUnionYork

VIRGINIAAlbeaarleAnellaAppaaattoxBrunswickBucklnghaaCarolineCharles CityChesterfieldCulpepperCunberlandDinwiddleKssexFluvannaOleueesterGoochland

GreeneGreensville Hanover Hear loo Isle of Wight Jans City King George King and Queen King Willlaa Louisa Lunenburg Madison Matthews Middlesex New Kent

NorthumberlandNottowayOrangePowhatanPrince EdwardPrince GeorgePrince WilliamRichaondSouthamptonSpotsylvaniaStaffordSurrySussexWarvlakWestaorelandYork

The population of the Charlotte area was 1,659,74-6 in 1930and 2,11A,34& in 1950, which represents an increase of 27«A percent.

185Over the sane period the population of the Rio haond area increased froa 820,710 to 1,001,562, or 22.1 peroent.

The Charlotte area had greater retail sales In 1929 than did the Mo haond area and had a greater growth frea 1929 to 191.8. Retail sales increased froa $>17,808,000 to $1,27>,363,000 in the Charlotte area and froa $220,217,000 to $750,001,000 in the Ric haond area. This represents growth of 266.1 peroent and 210.6 peroent respectively.

Mmufaotaring aotiTity in the Charlotte area also has evidenced greater growth than has been true in the Rio haond area. Ac­cording to the Census of Manufacturers, the value added by nanufacture in the Charlotte area was $263,107,000 in 1939 and $1,278,611,000 in 1917. In these sane years value added by nanufacture in the Riohaond area was $118,159,000 and $381,778,000.

In view of these data it is interesting to note the changes in wholesale sales as indicated la Table 37.

Table 37Wholesale Sales in Riohnond and Charlotte

1929-1918 (In thousand dollars)

1929 $ 216,159 4 181,9191935 181,130 121,7701939 208,066 207,901191$ 619,587 990,088Sourcei Bureau of the Census Reports, Wholesale Trade.Over the period, sales of wholesale establishnents in

Riohnond Increased 200.5 peroent while sales of Charlotte establishnents increased 135.3 peroent.

IftftThe lnsntM in m In voltaa wu not tho m l m for all astab-

llahaants ao cord inf to typa of operation. Tab la 5ft ia uaad to present Char lot ta aalaa acoording to tjpa of opa ration.

Tabla ftftWholesale Salaa By Typa of Oparation Charlotte, V. C.

1935-19 48(In thousand dollars)193,5 1939 194B

IZBft fit tetanUflB Stitt fintat fit Stitt tuxial Stitt rircsntTotal of total 2l•37,560 30.1ft • 72,113 31,7ft $285,607 28.8fti 69,379 55.6 100,521 48. 3 537,205 54.3Jj J / 3,302 1.6 21,399 2.515,165 12.1 JL/

31,962n.a. 15.1n.a. 140,4832,434

14.20.2Vo braakdown waa availabla far classifications

Merchantwholesalers MLnufaoturara* aalaa branol Petroleum bulk stations Agents and brokara

Asaeatolars

Indlaated. Thaaa war* groupad aa "all other" with salaa of $2,366,000 representing 1*9 pareant of total aalaa.n.a. — Rot available.30X0X01 Buraau of tha Canaua Reports •In aaeh typa of oparation tha Charlotto oatabliahaanta ax-

parlanoad graatar growth than was trua of thoaa 1 oca tad in Rlohaond. On tha othar hand, it should ba notad that vhila tha aarehant wholesaler ia tha pmdoainant establishment In Riohaond ■assured on tha basis of salos, In Charlotto tha aanufaoturars1 aalas branohas and offica ara tha aost laportant.

It la to ba expected that tha aarohant wholasalars would ra- prasant a saallar proportion of total Charlotta salaa baeausa of tha

1*7p m U d t y athar eltlis. Mliitw Bill, 8 m — haro, High Nlat, hiMiptlli, Itrtk OtrtXlai tad Spurtukwri, Saath Caioliat art all aitlaa tf m r 25,000 ptpaliilm 1— a tad vlUla ltti than lOO allaa af Charlatta. Ik Tlrgiala, aaly NttnWrf aad CharlattaaTllla ara af aaw- parabla a laa aad laa a tad wlthla tha — — dlataaea af llilianad.

Tha *arvayIk rlav af tha trtatndow growth la i*alaaallag activity la

Charlatta darlag tha paat daeada, aapao la 1 ly t -*>ug aanafao m art1 aalaa branehaa aad aalaa afflaaa, it waa daoldad ta aoadaet a a w a y to dataralaa, If poaaibla, tha oaaaaa far aaoh a growth* Throagh tha aaaparatlaa of tha Charlatta Chaahar of Ceoaaroa a Hot aaa aaearad af all aatlaaal flrva harlag a aalaa offloa or branoh la Charlatta. Thlo llat aaa ohaakad agalaat tho dlraotory of Richaoad aad dlrldad lato two parta t thoaa flna whloh had afflaaa or hraaehaa la aaoh olty aad thaaa diloh vara laoatad oaly la Charlatta. A aaparata qaaationaalra waa pro ■ parad for aaoh groap aad aallad with a aovarlag Lattar to aaoh firm. *© attaapt waa aada ta davalap a aaayla haoaaaa tha 11ata wora aaall aaoagh far aaaplata atttrtft and thara waa aa aatlafaetary aaaaa far datarala- ing aa adaqaata aaapla. Caplaa of tha qaaatlaaaairaa aad oovaring lattar ara praaaatad la tha Appaadlw.

Tha Charlatta Baaalta A total af 99 qaaotifaaaolraa wara aallad ta flraa whlah wara

laoatad la Charlatta aad aat la ItlohBoad. la all hat a fow oaaaa thay wara addraaaad hy m b ta tha aaaagar or aalaa aaaagar. A total of 49 (49*5 poroaat) rap!laa wara raaalwad aad af thaaa A3 wara aaahla la

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M 9mtailora, fim to whalaaalnra aad two to othar tjpa a of eaataaara. Thaolnaaifioatiana aoaardlai to linaa haadlod and ouatoaara aarrad ara notamrpriaing la light of tha indna trial growth In tha aroa.

Only foor of tha raapandanta raportod that Riohaoad had b a a a

aoaaldorod aa a location for tha aalaa branch or offioa at tha tlaaCharlotto waa aa loo tod. Tmnty-alght raportod that Riohaoad had not boonooaaidarod and alaa did not know. Savaral roaaona warn givon in raapanaato tha laqmlry of why Charlotto had boon aalactod rathar than Ric haond i

1* Charlotto roproaanta a aara oantral looation for fina aorrlag tha toxtila laduatry. H to haond haa aowar boon a eon tor of taxtila aannfaotcr tag ao thara ia littla eoapatition in thla flold.Z» Charlotto la rwry progroaalro olty with larger aalaa potantial and ia a bat tar dlatrlbutlon eon tor.3« All ooapatltora ara looatod in Charlotto.A. Riohaoad ia too oloaa to axlating aalaa offleaa and bmnohaa.5. Rlnhaand ia too a one arm tiro and primarily raaidantial aad lagialatiTa ia oako-up.Right flraa raportod thay had had roproaantatlan in Riohaoad

at one tlaa bwt, af thaoo* .only four nalntala raproaantation through raaldant aaloaaan at tha praaant tlaa. Thaaa who ham withdrawn did ao baoanaa othar pointa proved to ba aora auitabla or baoauaa of aubnoraal prioa aoodltiona In Riohaond. In tha aaaa of tho lattar no ■pacific prica altaationa wara raportod.

A total of olghtoan dlfforont roaaona wara giron why tha branch or offioa of tha raapondant had boon aatabliabod in Charlotto, but thaaa oan ba gronpad into tha following aooording to froqnonoy of

2ftmentions

1* Charlotte ia a cantral location for carving tha Carolina# and part of Virginia.2* Tha location and axpanaion of tha taxtlla industry In tha ijmeediate araa of Charlotte* This repre— aante a nomeconpatitiva factor for flrms serving tha textile industry and such firms would not looats in Richmond*3» Charlotta represents a batter market with graatarbuying power for both industrial and consumer goods*A* Charlotta haa batter transportation facilities and lower freight oosta*5* Tha growth of manufacturing othar than in textiles haa bean graatar in tha Charlotte area*6. The progressiva attitude of the people.7* Mora housing available in Charlotte*Vhlle tha rbove raaaona are given for establishing the

respondents* offices and branches in Charlotta, the opinions below were given relative to the more rapid overall growth of Charlotte as a Whole­sale trade oenter* Fourteen reasons were given which were mentioned a total of fifty-five times. The reasons given together with the number of mentions ware*

1* Charlotte is tho center of tha southern textileIndustry - 232* Batter transportation facilities — 63* Greater industrial axpanaion in tha area — 6A* Increase in population with greater buyingpotential - A3* Richmond not as progressiva a city - A6* Charlotta has a vary aotiva Chamber of Commerce — 27* Charlotta has received more favorable nationalpublicity — 18* Better oommcnioations in Charlotta — 19* Nora adequate housing Available in Charlotte - 110* Batter olimate in Charlotta - 111* Qood public utilities in Charlotta — 112* A more balanced economy in Charlotte — 113* Better labor supply in Charlotta — 114* Charlott* firms have a tax advantage — 1It is quite significant that only thirteen of the respondents

reported that their companies had a basic formula or followed a standard

191procedure ia selecting a eity as a looatlon for a aalaa bxaneh or offioa. Of tha renaining respondents, eighteen raportod ao baaic forsmla or pro­cedure and twelve did not know. Thrao of thooa r#porting a baaio policy or procedure did not know what tho policy nap and ona othar ra­portod It too eoaplleated to oxplala. Tho polio laa which ara followed vary froa "get there fastest with tha neatest” to aarket raaoaroh in­volving a a tody of aarketa, price oonditiona , delivery and transporta­tion facilities aad ratoav aalaa potentials, and sites.

Tha Riohaoad Results Questionnaires were nailed to tha Riohaoad offioa of seventy-

one fine whloh had sales branohos or offioas in both Charlotta and Riohaoad. Replies were reoaired froa 29 (40.8 peroent) and, of these,23 ware enable.

Analysis ef tho Riohaoad quest loans ires showed rather sharp differences in operations between these oooooras and tha ones looatod only in Charlotte. Aaong tha outstanding differenoes were tha followings

1» The businesses located in both Charlotto and Riohaoad hare been operating for longer periods of tlaa than these operating only ia Charlotte.Ahtly two flras had epeaed branohos aw off loss in either olty slaoe 1939, as eoapared to twelve located only in Charlotte. The Charlotta affloe antedated the Riohaoad effleo for nine flras while the rawer so was tme for eight.2. The territories served by both the Riohaoad and Charlotte offices are ana Her geographically than is true of flras looatod only In Charlotte.Tea Riohaoad effioes serve all or part of Virginia and eastern Berth Carolina while Id Charlotte off lees serve part ef Borth Carolina and all or part ef South Carolina. BLeven ef tho Riohaoad effioes serve only part ef Virginia.

3. There txlita |mtor diversification ia types «f Mrohaadlit he art led hy the f lrae leeeted la both e It lee thaa was trae ef these leeeted only ia Charlotte* la the latter eaae apprexlaately half ef the ftree handled etrlotly iadastrial eapplies aad equipment ahlle of these operatic ia both eltlee only three oeald he elaeelfled aa eaeh* The reaalader ef the flras with effioes la both cities sold predaets whlah were aaed by both Industrial aad private onaoisoors aaoh as tiros, paiats, notor vehicles, efflee machines, aad petreleaa prodaots*1* Although thirteen ef the fine with offlees la both eltlea sell the aajer portion ef their volume to iadas trial aaers ae f lra reported 100 peroent ef sales to aaoh parebasere* Flee reported their greatest velnoo sold to retailers and fixe reported the sens to wholesalers.

In additlea to the differences in operation, certain additionallaferaatloo scoured frea the Richmond respondents should he noted* Fixerespondents reported that the Charlotte efflee Is now serving territoryformerly served by the Riohaoad office, while see flra reported thatthe tlohnrwirt office mow serves territory feraerly serxed frea Charlotte*

The trend af aalaa for both offlees has been upward at aboutthe seas rate far thirteen of the respondents* Seven flras reportedthat Charlette ealea haxe las res sort acre rapidly than haxe Richmondsales and two reported the reverse ef this. The reasons gixm forgreater las roe as in Riohaoad were the re-opening ef the Richmond officeaad a leas ef territory hy the Charlette office* The reasons glxen formore rapid increase la salsa of the Charlette efflee werei greaterIndustrial growth, greater Incense, acre liberal truck weight lawe, lessrailroad eeupetitlen, and better salesmen. Of the twenty-one flrassupplying information, sexen teen reported that the 1950 Charlotte salesranged froa 5 peroent to 125 peroent greater thaa Riohaoad sales with the

193nodlan difference of 25 ptnnt.

The 11 chewed respondents gnvs fewer tpialOM an the m m «c of CharUtta'a imtor growth as a wholesale trada onWr. For tba Moot part tho raaaaei vara aWut tho mum with sens dlfforonoo aa aaphaaia. Six different raaiaaa wwro mentioned a total of twenty-four tiaaa aa fallowst

T rfn r — % i£ tskLLQroator industrial expansion 13 54elSMoro progressive attitude 6 25*0Oreater aoaooatratlon of baaiaaaa 2 8.3larger aawoit of dofoaoo woit 1 4. 2Shift la geography of oaloo orodit 1 i.2Moro farorahlo tax structure 1 4*2Conclusions

It to qaito obvious that all foroa of business activity have axpanded acre la tho Charlotte, lorth Carolina, area than is tmo for tho liahaood area. Thoro has ho on a groator oxpaaoion of population, rotail oaloo, wholooalo oaloo and aaaafao taring and onh of thia ha a oooorrod oiaoo 1939* While it is laportaat to rooognlao tho groator growth of activity in Charlotte it io of groator importance to dissever, if possible, tho roaooao why* It is aomal for tho boaiaoso in taros to of a oity to bo disturbed over developments which toad to displace that city frooi a pooltioa of inportaaoe which was of long duration. Thus it is in Slekaond. Ihuay of fciehnond's oitisons are interested in tho business growth of Charlotto and its lopast upon tholr own oity. The is to rest involves ossworo to three quest ions i (1) To what extent has the growth of Charlotto boon duo to advantages peculiar to that oityf (2) Is tho development of Charlotto a result of inadequacies or Ineptitudes on tho part of leeal bus 1m asj and (3) what stops, if any, oaa bo taken to

mrttitakllali Klehaond u the loading oltMla trad* taaUr batMaii thaklBftM tad AtlutaT

1% is tbrlM an the basis ef the facta Which have been wlflad by the survey that aha 3 a aa la trade la a oonseqmaace af general business atiiYltjr, especially production* The moat eounoa reason given far tha laoraaaad wholesale trade af Charlotte has ha an the laoreased productloo la tha area* VIthornt this iaerease la production activity It is doubtful if who Is sale trade would hare increased its present ex­tent*

The develepaaont af tha textile industry In North Carolina and South Carolina has bean tha nest significant industrial devolopnsnt la tha area during recant years, VIthin Charlotte proper, there are forty textile plants euploylag 12,000 people and there are 690 settee mills within a radius af 100 miles of tha city* Charlotte is the center ef an area in which are located 2/3 of all spindles in the South, 2/3 of all Isoms In the South and 1/2 ef all knitting machines in the South,3.

This ooneentratieu ef textile production has resulted In the location in Charlotto ef many sales branches and sales offices ef firms namufaetaring textile machinery and supplies* Of the Charlotte respond sate la tho survey 20 represented firms selling materials and equipment used primarily by textile industries, la all pa ebeblllty those flxms would mot ha to leoated branches or offices in Charlotto if the city were not strategically leoated for such industry*

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196a corollary af the o « N m t l « a which la characteristic ef tha ELoh- aoad Monaa^. Tan years of paraeaal observation has shewn nuaeroua In- a tana oa In wkleh tha conservative el sweats have dominated tha thinking of tha oeuuwaity* hajr of thla |r« 9 are opposed to developing too ■ash industry whioh nlfht change tha hnaia agrarian econony. Typical af rack ara tha apposition ta develspawnt af a stool mill an tha Janes Elver, and tha emotion of on expressway to alleviate Rlehaond’a traffic pro b lone. Tha ffcst that this look of aggressiveness nay mault fron a carry »orar af tha aarllar attitude of aany In Virginia concerning tho sooial and aeononio aapaata of business and industry, aa coopered to agriculture, nakaa tha situation no lass real* A soolaty which experienced its graataat glory wader an agricultural ays tan tend toU to in tha glorias of tha past* Opposition to progress la underatand- abla to a grasp nhleh has loot meh fron previous prog m as. In any mat, to tha extant that thla altnation controls l^ortant aagnanta of society, thorn ia llttla ohanea for tho Eishaond area to experience any grant Indus trial growth with resultant growth possibilities in whole­saling, re tolling, and general business loreIs.

•araful analysis of other reasons advanced by both groups of respondents relative ta tha greater growth of tha Char Lotto area, causes ana ta bellarve that they are In tha nature of rationalisations about a situation rather than tha haaia onuses ef tha situation. Eiehnond has transportation fee111ties whioh ara equal ta or hatter than those en­joyed by Charlotte* Charlotte is served by four railroads and ia on the nain lino of only one while Eiehnond is served by aix railroads and is

197•n th« uaia 11m af four of U m n * Charl«tt« la M m d kj 6$ motor fralfbt U m i and Kl«knM4 In n m d by 53. Charlotte In Looatad an thraa W. S. Ugh says (21, 29, and 74), uhlla Uchmond in loeatad an nix V* S• ligbsays (1, )3» 60, 290, 301, and 3t0) . Rlohnond is aai-rad by flw alrlInaa an ocmpamd ta four far Cbarlatta and, in addition,H nkmiai is anrrod by ana air-fMlght linn* rinall} , although lit tin nnad, Habmnnd ban uarigabla water ta tba ooaan and Cbarlotta daaa nat«

bhila nana of tba mapondanta nantlonad tba obangaa In freight ratan aa passible aamnan af Cbarlatta' a nara rapid growth In raoant yanm snob should not bn overlooked. Mont of Charlotte's growth has takan plaoa sinea 1939 and tbara have baan no radioa1 changes in ratas ainoa than* However, tha ohanges in ratan prior to that data made poaaibla tha growth in tha latar pariod.

Tbara in no aridanoa that Cbarlotta ban aithar a greater abundance af alaetrio powr or ohaapar ratan. Camparis an af rata aabadalas indloatas that thara is llttla natarlal diffaranoa in this ranpaot whioh oould bars oontribntad to greater industrial growth in tha Cbarlotta araa. Likewise, thara la no aridanoa that Cbarlotta has battor oomuwaloationa, mora adequate hoxanlng, a bat tar labor supply, or a battar ollnata than doan Rlahmond.

It la dlffionlt to rgtlanallaa tha o on tan t ion that Cbarlotta anjayn a nora stab la aoonony than daaa Richmond. Dlrarsif loation of industry has baan aooaptad far yaars as a requisite for stability In tha aoonony. Tba faot that Cbarlotta*s aoanonv in basad to a grant de- gras an tha taxtlla industry lntroduaan a oonditian of instability nuoh

198•i is o o m m la tthtr iltlM with a single industry toonaagr. This has baan evidenced during tha winter of 1951-52 with tha depressed condition whioh has prevailed in tha taxtlla Indus try. On tha othar lnnd, hich- nood has a wide divers iflastion af industry which creates, nar aa. greater eoonaala stability.

Ona eanaot Ignore tha oausmnte of tha Cbarlatta raspondants oanoeraing company polioias an tha salaation of oitias for tha Location af salas braaohaa and offloaa. If tha oonditian as reported can ba aooaptad aa typical, ona must oonolada that a najority of companies follow no basin fomnia or prooaduro, and that suoh affioas and branohaa ara astabliahod •without rhyaa or reason.• This ruisos tha quastlon of tha degree to whioh anoh saLaotians ara nada as a rasult of whin, popularity, fad or othar haphasard and uasoiantifio prooaduro. Perhaps tho popularity of oitias aa locations far various typos of aeonanlc activity Is subjoo t to Tin is si tads s similar to thosa experlenoed by othar popularity wlnnars.

SwunaryKistorloally, Richmond has baan tha most important o an tar of

wholesale truds la Virginia and tha Carolines. Sinoa 1939, Cbarlotta has replaced Rlohaomd as tha loading wholesale oity in tba araa naasurad aa tha basis af salsa Talmas. This development has caused considerable oanoarn an tha part of llohmond bus inass non aagagod in wholesaling.Mere raoagmltion af tha faot is mot sufficient. It is aora important to detoxmlna tho causes so that appropriate action can ba taken by thosa who wish to stop or reverse tha trend. Tho surrey whioh has boon

199oonduoted is tha first attempt to determine snob facts.

Charlotto is loootod is tho oeater of an sroo in vhioh thsrshas boon a tronendeous expansion in all aroas of business. ThoCroatost expansion has takon plaoo in tho textils Industry as a rosultof looation in tho oottoo production area. Tho foot that this ox- pansi on took plaoo in Charlotto rathor than ia othor nearby North Carolina oitios is evidence of tbs progressive attitudes of Charlotto businoss loaders as typifiod by a Tory so tiro and pronotional'Hainded Chanbor of Comnerce. Tho growth of tho textile industry and the estab­lishment of sales branches and offioos to sorro tho industry bars not boon tho only growth that has takon place. For example, the usrohant wholesalers of Charlotto inoroasod sales 660.1 percent during the saws period, 1935-1918, in which tho merchant wholesalers of Richmond in­oroasod sales 3$8.2 poroont. This in spite of the fact that tho whole­salers of Charlotto received competition from wholesalers located in nearby largo cities.

Oho can only conclude that with tho exception of the textils industry tho expansion of Charlotto has resulted from a more progress ire attitude and a program to promote industrial and ooMsrcial development in tho area. Charlotto has mo competitive advantages not present in Richmond, except in textiles. Richmond has a decided advantage in the stability ef its economy because of a more widely diversified industry.

Tbs aboonoo ef firm policies regarding the choice of looation emphasises the possibility that oitios are chosen as locations because ef ourTuat popularity er ether highly subjective means. If Richmond

expects to regain its position as tho most Important o on tar of whole­sale treds between inhlagton, D. C»# and Atlanta an Integrated pro­gram mast be developed to attraot indnstry and all forms of bo*inass to the area served by Rlohmond establishments. Charlotte provides lrrefatabls avldaaoa that saoh a program ean be developed aade offestive.

CRAFTBL Till Rvnary, C«o0lnal«uf tad I m q m h k U U o u

T«w eltlM off or a Wttor apportaltj than doti Rlofaannd, Tirglnla, for a a tody af tha faetora whioh eontrlbwtn to tba growth u d daollaa af a wholaoala trad* oontor. Two and «a4uilf eoatorloa af vholoaalo nativity gravida a haokgranad wbloh la dlfflealt to dupliaata ia tba Jhltod Statoa* lhny oaatara af aha Loan ling whioh a tart ad at tba aaaa tlna aa Rlahnond ara no langar aatlvo or Inportant, ablla naay af tba loading oaatara af tbia daj davalopod aftar Rlahnond bad aoklovad ita graataat lapartanea aa a looation for narkatiag aotivltloa.

Tba Hlatarloal DavolopnaatAvallabl* raaarda lndleata tbat tha firat wholnaallng

nativity ia R in boon d ana about 1700 vban Captain Byrd bailt tha firat warohaaaa. Binaa than tha aaakar of aatabl 1 ahnanta baa lnoraaaad ta 4)4 with total 1*4* aalaa af *449,9*7,000. tas&jil Mm AaUTittw

Tba original aottlanant af tho araa now kaon aa Rlahnond ana a i Irani ra a nit of lta laaatian at tba falla af tha Janaa Rlvar, ^iah nado it tho logioal nooting plaoo for rlvar tranaportatlan and tha aoorland tmila. In faet, tho firat attaagit at aottlanant ana nado by roproaontatlvaa af tba Tlrglaia Coapaay natlvatod by a aoarab for trado*

aoi

202krlj iO oIi h Ii eperatians ef tlu Tirclal« eoloay tad Rieh-

nand were these MndMtad by factor* aka appoar to have been of either «f two types i salary or snowies Ian representatives of b|ll«h aad Scottish MNkaatfl! or o1«1<m h representing foreign Bareboat# but also bogrlai sad soiling an their ova account* Tha early Merchants in Rich— Mead sold at hath wholesale aad retail and tba first aridanoa of eell - lag oat ire ly at toelesale is aa advertiaenent whioh appeared in the Tirglnla Aa matte ia 1780*

to til the Revolutionary tor, Riohnond was aa inportant port for foreign trade. After the war the city began the decline in in- pertaaae as a pert whieh was to oontlnue wntu.1 such trade was almost negligible. This was a natnral resalt ef three Inportant canes a. In the first plane, the oooueny ef Tirglnla was based npon the plantation eysteai ef agrlenltnre with tebaooe as the basio eash erop. Land was pleatifnl sad new predaatiwe sores were a to liable to replace those depleted by the Me ew p systeai. Thws, there was little ar no iBoentiwe to fellow asreaatllo par suits so long as wealth oculd be aeowalated Mere easily through agrlealtwre. flea and ly, Merchants were held la low as teen because ef their relationships with British Merchants and the Methods used in earlier jeers te drive the planter into debt and te keep hia there. This antipathy towards the norehant is of great Inport a noo in waders tending later developnente because it did not seen disappear. Finally, by the tine interest in direct trade was re­kindled, advances in ship design had been aueh that the Janes River eeuld net aooanedate the nodern vessels because ef its shallow ohannel.

2*9Llttla n i M M vti experienced 1a rmpi«rU| th» .trade aftar tki i h U M l ha4 k M B A m p * m 4 .

Fran 1200 te tka Civil Iter tkara vara t m tefalapiia inrtkjr ef aata i

1« Ika JateUi liawa iirpl u an inatltatiaa aapanta fna tte raUll aatekllsluwit* Tkara wta alao ayaalalliatlai aaoaif tka tealaatla firaa with tka teralopmt of oaniaaiaa aarehaate, awtlan aaapamlaa, fanardiif ■arrnhaita, aad lapartara, la addition to tha fhll feast laa Joktara or vheleaalera.

2* Tka oonatmetian af tka Taaaa River aad Kanawha Carnal aad tka vnrieae railroad# opened np tka territory aouth auad neat af tha olty aad gave tka tlakanal teteleaale flraa tha opportanlty ta develop trada la tka area. By 1858 tkara vara alaoat 1,000 alias of railroad aauatiaf fr— Rlahnond* Tka priaary wkoloaala trading araa appaara to have inslodod Virginiav Barth Carolina, Tsnneoeee, and wknt ia b o w Boat Virginia*flrawth ||| BbBUBB. ADlC 1*2. fillii HBE

Aftar tka aaaaatiaa of tka hootllltioa of tha Civil War, Biohnond wholoaalara war# faraad to atart froa praetleally nothing to rokalXd tka trado wklak kad Boon thoira hoforo tho war* Tha koalnoaa soatlaa of tka olty kad Boon karaad and thoaa ike waro not financially mined daring tha war loot aaok daring tka firs aad riot whioh followed* The growth wklak followed waa prokably aehleved with groator dlfflenity tkan that diiek kad koon aoklovod prior to tho war* Before tha war there waa loan eanpetltlao with other oaatara kwt after tka war tha

a *« « ktti bi i t m urtktni nerebants U d nuhtd laU tha

araa aad war# aatraaahad hafara tha local flraa oaald fat started*Qaa I f it af tha war t*leh la aftaa Ignored was tha daollaa

la afrlaaltara as tha predominant faraa la tha econo ay. Tba generation which kaav tha glorias af tha aXd ijitoa aad rlowed tha aarohaata with greatest aeara bogs a ta dlaappaar fra tha soena* Tba occnony af thm olty haaaaa aara dapaadaat apaa aaaafaetarlnf aad trade*

Tba parlad fna 1180 ta 1920 rapraaaata tha yaara daring which Eiehnond aohlarad Ita graataat re la tire importance aa a whole aa la trada o eater and alaa atartad lta dacline. Although dollar aaloa ln- oraaaad ever tha sntlxe period, thay raaehad thalr peak la 1893 ah an ralatad to total 0. 8. aalaa. Tba tarritory oarsad hy tha Richmond wholesale establishments raaehad lta graataat geographic propart Ians by 1900 aad a am oraaaad Virginia, West Virginia, Morth Carolina, Sauth Carolina, and parts af Oaargla aad Tennessee* While growth In tha dollar Talma of aalaa amounted ta 380 parcent, fron $31,543,000 in 1890 to $151,301,000 In 1920, tha increase in tha physical to Inna of aalaa waa about 73 percent, siaoe neat of tha growth senalated la price increases or la a redaction In tha Talas of tha dollar* Daring thla sans parlad tha papalation af Virginia, Vast Virginia, north Carolina, and South Carolina increased 55 percent* Thua, tha laaraaaa In tha physical Taiwan of aalaa was greater than tha increase in papulation af tha pi lesi j narfcet araa*

Tha fair najer Jobbing lines whioh hare baan a tad led raried In growth daring tha 1890*1920 period* Dollar aalaa of tha grooary

205Jobber* latntMd 173 percent, dreg sales Increased 427 percent, hard­ware sales Increased 403 percent, aad dry goods sales increased 314 percent* Orer the seas period the physical volume of sales increased 8 percent fer tike grocery Jobbers, 140 peroent for drugs, 24 percent fer dry goeds, and 203 peroent for hardware* Although there was greater growth ia population and industry throughout the Halted States than in the seetloa served by the Richmond Jobbers the sales of the dry goeds and hardware Jobbers increased relative to total 0* S. sales In each line*

The changes which occurred during the 1880—1920 period can be attributed to several specific feetorss

1* The expansion ef territory waa the result of exnellent transportation facilities which permitted easy access to the entire Southeast* Practically all freight moving into the South from the highly Industrial lied Saw England section was funneled through Richmond*

2m Richmond enjoyed very favorable transportation rates. Competition between the reads and the ocaqmtltive threat of water trans­portation kept rates low before they ware controlled by the Interstate Commerce Commission* Whom rate territories were established Richmond waa placed in the Official territory with increased competitive ad­vantages* Richmond concerns could serve eustonare located in South Carolina with lower transportation costs than could fins located much closer la North Carolina* This condition existed until 1920*

3* Population changes ia the area served by the Richmond establishments contributed to the decline ef the Richmond market*

206There w a a growth af 55 peroent in tha papulation of Virginia, Hast Virginia, Barth and South Carolina, fron 5,247,672 In 1690 ta 6,019,735 in 1920* Thla inamaaa pamlttad tha ora ation of wholesale aotabliahnanto in looalitiao not previouoly largo enough to *upport ouoh an operation, Tha nunber of rata11 aotabliahnanto lnoraaoeo with population, aad tha nunbar naoaooary for ouooaooful operation of a uholaoala houoa baoono available in a onaliar gaographio araa,

4, Tha taadancy of tho Rlahnond firoa to bo intoroatod primarily In wido gaographio coverage probably raoultad in "skinning tha cream* af tha tarrItory inotaad of developing an intensive coverage of tha narlcnt, Tranoportation rata a wara ao low that it waa aaaiar to add now tarritory nuoh Ilka tha old agrioultural oyotan of adding now aoraa ao tho ylald on tho axiating aoraaga d Inin la had. Tha look ofla tan a Ira cultivation pamlttad eonpatlng firoo loo a tad In tha araa to gat a otart aad to build a ouooaooful buoinaoa by giving oonotant attantlon to tha buyaro in a onaliar araa,

5, About 1900, tha uholaoala aotabliahnanto of Richmond adoptad a program daaignad to bring rata 11aro to tha olty and to oall than on tha advantageo of trading with Rlahnond fimi* Tha growth of tha dry goodo houoao provide aridanoa that ouah a program can be ouooaooful* Thao a fimo partlo ipatad in tho progran noro intanoiraly and for a longer period of tine than did Jobbero in other linao, Tha dry goodo Jobbaro inoreaped their oaleo ralatira to total U, 3, dry goodo oaloo over the entire period, while the rare roe w o true for tha grocery and drug wholeealera.

207fim tfM riiO C 1929-1950

Riohnond wholesale establishments noved into tha graat depression in 1928, Tha downward aoraaent waa accelerated, If not started, by a ruling of tha Intarstata Caaurot Couaisslan which radaoad intra-territorial fralght rates• Thla daolalan raaultad In tha loaa of South Carolina froa tha Richmond aarkat aad aide mash of North Caro Urn highly oenpetitlwe, aad aada poaalbla graatar aetiTity on tha part of firua loom tad In North Carolina oitlea,

Uholaaala aatabliahaanta of Riohaond inoraaaad thsir dollar Tolwrn af aalaa 200*? paroant and phyaioal t o Iu m 73*5 paroant froa 1929 to 1948* Ia aaithar dollar volume nor phyaioal volume was tha inoraaaa aa graat aa that axparlonoad by tha wholaaala firaa throughout Tirglnla, Tha a a lattar firaa had inoraaaaa of 227,4 paroant in dollar toIoh and 89 paroant in phyaioal volume. On tha other hand, tha inoraaaaa in Riohaond ware graatar than tha 174*9 paroant in dollar volnas and tha 58,7 paroant in phyaioal voliam throughout tha Cnitod Stataa, While Riohaond reaalned tha aoat inportant wholaaala trade oenter In Tirglnla, with 31*9 paroant of the total aalaa of wholaaala establish­ments In tha state, It dropped fron thirty-fourth to forty-third posi­tion among tha uholaaala oaatara af tha oountry aa aoaswred on tha basis af sales voltoea.

Merchant uholaaalara and manufuo torero1 sales branches and •ffioea ara mere inportant in tha Richmond narket than they are in Virginia or tha Qnited Stataa* Thaaa aatabliohnants aooountad for 81 paroant af 1948 Riohnond aalaa, 68 paroant of Tirglnla aalaa and £9

200paroant of V* S. oaloo* This situation nay wall raoult froa tha scarcity of largo eltlao with la a 300 alia radius af Riohaond which nakes tha olty tha logical looation for serving tha territory.

lufa of tha Jobbing liaao of grooariao, drugs, dry goods, and ha rd war a had iaoraaoaa in both dollar aad phyaioal volune of oaloo batwaan 1929 and 194S* Of thosaf however, only the drug houoao hod growth equal to, or graatar than, tha total ineruaoa of all wholaaala aotabliohaaato in Riohaond* Over tha pariod tha grocery and dry goods Jobbers accounted for a oaaller proportion of total Riohaond sales aad ware relatively lass inportant* Tha graatar increase in drug sales nay wall have resulted froa ttie increase in fonily inooaas with correspondingly greater expend!tares for health products, tha expansion of tha wonder drugs, and a further widening of tha lines carried in tha retail drug stores*

Tho wholesale establisfaaants af Riohaond did not experience tho saaa cyclical fluctuations aa did thosa located in Virginia or tha United States* Dollar sales for 193$ ware 16*1 percent below tho 1929 level In Riohnond, 19*0 percent lower In Virginia and ?5*& percent lower far tha e eon try as a whole* Repressed on tha basis of Riohaond sales par $1,000 af Virginia or U* S* sales, thara was a 24*4 paroant Increase fron 1929 to 193$ in tha sales of Riohaond! astablishaanto par $1*900 af 0* S. sales while tha relationship with Virginia sales re- aalned relatively constant* Since 193$, however, thara has been a downward trend in Riohaond aales par $1,000 af Virginia and V* S* sales whioh ladieatea that Riohaond is bonnalng less inportant as a wholesale

309Mrk»tlB| ewtar.

The following fto tor a tp p w r to htTi contributed Materially te the changes whioh have taken plaoo in tho Rlohoond Market since 1929.

1* There baa been a 23*4 peroent inoreaae in the population of the Riohnond Market area aa ooupared to the 22.7 peroent inoreaae throughout the Bnited States, and the 37 peroent inoreaae in Virginia* In addition to the overall growth of Virginia population there was a 43*9 peroent inoreaae in the proportion of the population living in urban arena* The Arliagtoa^Pairfax-dlexandrla ossenmlties are an oxauplo of the growth ef urban centers. The population ef this area increased fron 76,028 in 1930 to 295,793 in 1950, or 289 percent.

2* The development in truck transportation since 1930 has lessoned tho oo^ietitive advantage of Riohaond fins bj enabling estab- 11 shuents located in sualler ooasamitlos to operate efficiently* The inpaet ef this development has been nost evident in the grocery trade and has aooelermted the prooess of deoentrallsation fer the tdiolesallng ef greeeries*

3* Riohnond os tab 1 1 shuents were further limited in their ability to ee^pete effectively in areas of Berth Carolina by the dec is lens ef the Interstate Ceuueroe Ceusdmslon In 1935, 1939 and 1945. whioh, ia effect, reduced rail freight rates fer the Berth Carolina firuo aad increased the rates ef Riohaond concerns shipping into Borth Carolina*

4* Ihnj ef the Riohaond -stabl 1 shuents have been slew to

210adopt Bpdtn toohaiguos «f oporation toilgml to roduoo operating e*« to. Many houses operate ia old buildings loos tod la crowded dowi- town oeoticns of tho city. Modernisations of norohousing oporotioao ho to boon fov aad ho to boon liaitod by tbs conditions of tho building* Thoro ia a soars Ity of train lag programs. Many of tho oalos organisa­tions aro old vith littlo opportunity affordod now blood.

Oonoral Cano las ionsSororal objootlTos for this study woro outllnod in Cbaptor

I* It la port 1aout to evaluate tho dogroo to whioh thoso obJoctiToa haTo boon not*

Tba first objectIts was to dlaooror tho baato faotors whioh haro oontributod to tho doTolopaMnt of Riohnond aa a wholesale trado eon tor. Cortain of tho faotora hams pormittod growth and oxpanslon wbilo othora haTo bad a ras training of foot upon tho rtsTal npnont Tho proaont sitnaticai roaulta froa tho balanoo whioh has boon workod out botwoon tho adramtagss and diaadraatagoa.

Qoography was tho aoot inportant elanent ia tho oarly development of tho olty. Riohnond was tho aoot Inland port on tho Atlantia Coast and thoroforo aoaror tho lntorlor narkota. Aa popula­tion norod westward, Rlahnond prosporod. furthermore, location at tho falls proaontod a dooidod advantage through tho dorol spnsnt at aorth- south railroads, booauso tho Jhnoa river eeuid bo orooood at thla point with loss expease than at any point oast of tho oity, and as oboaply as at any pplat botwoon Rlahnond and tbs mountains to tho wost.

Traaaportatlon ratos bars probably influoaood tho growth and

211doolIn* of tho ^loleoale trade of Riohoond firms moro than u y othor single footer* Rerly growth woo foe111totod by lew rotes resulting from oeupetltioa* Lotor growth resulted from controlled rotes tdiiah more highly dlsorimisa tory In favor of Riohnond over competitors in the South* As the Inequities hs.ee been reduced, Riohnond hns declined In lnportonoe os o she Is sole oenter for the Sooth.

Chongos in population have hod both favorable end unfavorable Inpoets upon the growth of Richmond os o ifeolesole trede center. The city hos experienced o long end steady increase in population which has node for stability. The eons tout but unspeetooulor growth has allowed business and industry to absorb the expanded working force* Unfortun­ately, there has not boon the sane growth in tho rural areas which constitute nest ef the wholesale trading area* Tho shift froa rural te urban cantors of population has been particularly inportant in surround- lag counties.

Re satisfactory data were found Which would nakn possible an accurate evaluation of tho Impact of income levels upon Riohnond1 s development* It is ooanon knowledge that income levels ef tho South are below the national average, but there has boon progress in recent years* Although 1949 per capita income payments in Tirglnla were 21*9 percent below tho Baited States average, such payments Increased 146 peroent from 1929 In Tirglnla and 95*6 percent for the entire eouatry. Tho 1949 moil on fanily income fer Richmond was $9,396, compared with $2,24ft for the South and $3,066 fer the United States*

Tho economy of Richmond is more stable than in tho rest of

212tha oraitrj* This k u been by nparlMO** dnrlnf variousphana of tha haaiaasa cycle* In parlada of dapraaslon tha la?al af huiaaaa aativity daaa not fall aff aa w a h , aar data it go aa high dariif parlada af aatlaaal praiparity, Tha avldaaea India*tea that llahiand haainaaa fraqaaatlj is not nffootod by minor cyclical moro < ■aata whioh ooonr throughout tho flhitad States• This groator stability is probably a rosult of tho wldo diversification of industry with a good balance between tho production of cons— or goods aad industrial goods*

Thom la some question about tho impaot of taxation upon Richmond's development aua a wholesale trade aenter* A m liable data indicate that looal establishments in oortain linos faoe a long-run competitive dieadmntage boeause of the high rate of taxation re la tire to met ineomo* Oh the ether hand, there is no evidence that tho Rich—

linos leoated in other oitios or other wholesalers in Riohnond handling similar merchandise on a day-to-day pries basis because of the tax burden* While tho historical lnpaot of leoal taxation is not known it appears that the merchants ham paid a disproportionately higher tax than either nsnufhoturlng or agriculture as a result of the different bases used fer such tax purposes*

While tho abem factors ham been relatively apparent in their Impact upon the demlopneat of Richmond, there ham been other, perhapo less obvious o end it lens, which ham prevented a full reel 1 me— tien ef the potential of the olty* Those latter conditions are not

213giMtpiUlt of flutwX MUvraMai b«t that dota lot radvaa thoir in- put upon tho danlipMBt of wholooala irtd*.

A diftroaiiaf footer whioh io diffioalt to define olearly hot lAiah io food la oortolo oootoro, io tho ldoo that, olooo Kiohaood hoo always hooo a wholooolo tzodo eoator it will oootiauo to bo oo. It ooooo to ho oeaoidorod ao aa iahoront right of tho eoaaonity and of tho firao laoatod ia tho sity. Tkio attitodo nay arloo, io port, froa tho age of ooao of tho firao Whioh horo boon in oporation for many years*It aaj bo dan, in part, to tbo faaily natnro of nany of tho oonoorno with several generations of tho oaao faoiljr aotive in tho aanageawit of tho boolaeso* Hhilo thooo attltudoo aro not oharaotoriotio of a ■ajority of tho firao thoy aro oaffioioatly proraloot to limit tho oonroll growth of tho oity boo a moo thoy proTont tho wholooalo eotablioh- ■onto froa presenting a ooaaon front for tho oolntion of tho probloao with whioh thoy aro oolloetlroly faoed* Thin io ono of tho ehiof root on o why ao prograa of ooaploto trado cultivation hao boon developed for tho olty* Hhilo thoro io a aatnality of intoroot, thoro io no ooaaon agroonont of What, if anything, should bo done*

Ceaparable to tho nltro^oooervatisa of nany of thooo ongagod ia wholesaling io tho ooooervmtlve attitodo, or look of progressive attitodo, oa tho part of othor doalaaat oogaonto of tho population.This hao boon verified by tho survey ao woll ao by Interviews with various booiaooo executives* Part of this attitodo arioso froa a ton- daaoy to dwoll op on tho glorioo of tho past rathor than open tho bright- aooo of tho future* Chaago io ooaothlhg to bo withstood rathor than

2Uf i i f d,

A olty unaot n u h lta inttiit ptUniitl as a uholaaala trade oaaWr aa 1m | aa thooo engaged la suoh pursuits ara o on a Ida rad to ha la a laas honorable nativity than othar ferns af business. While hj ao aaana aa prevalent aa femerly, this attitodo la still femd In aoaa olrolaa aad la a heritage which has haaa paaaad down froa tha pro- Civil Mar agricultural society. Saoh aa attitodo lafloaaoaa tha typo af f i n people Ao any ho latorostsd la a oaroar la wholesaling and Halts, perhaps, tho ohaaoao fer tha firaa to aoqoira abova^varaga, wall adonatad M^tUjMS* Thara haa boon littla dlaoarnlhla effort on tha part af tha wholaaala establishsMnts to Inf ora tha public of their fAotlena aad tha eeonaale Justification far tholr axis tone o. Tha writer's experience with stodsnts lndioatas that they know loss about wholesaling than praotlcally any othar phase or typo of business activity.

Tha final fhoter whioh has Halted tha growth of Riohaond aa a Aeleeale trade oantar la, at least in part, aa outgrowth of tha footers previously discussed. Thoro has baan littla or no effort to develop a groator narkot in that area In whioh Riohnond flrns have a strong eo^etltlve advantage beoaues of looation. Wholesaling is aresult of ether eooeoulo aatlvltlsa which give rise to laeons and a anba translated into aaxfcet potential. A large aaount of produotIon exists In Rletaond aa reflaoted la tho relatively high nodlan fhallyInsane aa oonpared to tho Aited Stataa average. Suoh produotion givesrise to s^lsyMnt and wages which in turn areata greater retail salsa

215an* greater wholaaala aalaa. Alao a large amount of eooasadn nativity results la greater aalaa af industrial gooda *i»d supplies. OaforUm- ately, thara la vary littla preduetlon la tho counties tAUh anrroaad Rlohnaa* aa* whlah ooaatltute tho prlnary aarkat araa far tha wholaaala oatabl 1 ahnoata of tha o ity.

Tha la at objective aot forth far tha a tody waa to dlseorer,If possible, whether tha ohaagaa with la tha wholaaala atrwature followed any pattorw under given oon*Itlens, and would, tharafora, ba predictable If tha e end ltd. ana ware knowo. Two a 1 teat Iona ware aot load but thara la aot awffielent aridanoa to warrant final aooelualona relative to possible oaaaaa.

Oh tha baala of Riohnond and Virginia data, It appaara that agonta an* broker a represent a nora Inportant type of wholaaala aporatlon *arlag periods of raooaaloo and daproaalon than during parloda of prosperity. Rhlla thla oondltlon probably results fron varying effeota af omrroat business conditions an tha types of products nornally sol* through tho agent and broker ohaanel, tho possibility that depressed aa annals oondltlona nay oauae greater use of tha agent and broker should aot ba overlooked.

Blahnsnrt aad Virginia aalaa alao Indicate that aaaufaoturers' aalaa branohaa and of floes ara woo* nora widely during periods of prosperity than during periods of depression* Bata were looking to olaaaify tho laareaesd salea according to predueta or lines, and to detornine if thla were nerely tho result of a long-torn trend towards nora dlreet narkotiag. Recognition should be nado of tha possibility

216ttftt gmttr 41not nlvt during prwptrw j— n any rtault from Iasi ooit oonselMaaaaa ca tha part of uauufboturura and tha daalra to aiyartaaat during ptrloda of lawr aalaa raaiatanoa and graatar aalaa.

Finally, it la avid ant that population ahlfta into nawar urban axaaa taad ta iaamaoa tha ocaapatltlon for tha ragular uhola- aalar laaatad in aldar oaatara. Thla la alao trna of population growth. Tha lnpaat appaara to ha graatar for tboaa aatabllahnanta handling tha lawur-nargla, faaWtaraoTar itana than for tha othara. Snoh nav oonaantmtiona af papulation paxmlt tba daralopnant of local uholaaala huuaaa dilih can aarua tha aurroaudlag tarrltary at laaa coat. Tha grovth af trunk tranapartatlon haa addad Inpatua to thla daoantrallaa— tloo af wholaaallng activity.A o nitao tio u lln h B n n ri'i M m U & t t r t d i i lB Xnd& S B rtix

Ona of tha prlnary raluaa affordad by an hlatorioal atudy ia tha apyiartilty to foraeaat futura dovulopawnta baaad upon paat aranta and oondltlana. tfhila auoh a foraeaat nay ha aubjaot to Modification by unforaaaan aad unpradiotabla aranta It aararthalaaa prorldaa a baaia for planning to prapara for tha futura or to lnfluanoa tha futura to tha dagraa daalrad or poaaibla.

On tha baaia of tha hlatorioal facta and praaant oondltlona,It appaara that llahnnnd doaa not hara a bright futura aa a uholaaala trada aantor. Whlla at ona tlna It waa tha noat Inportant oantar hatuaan Balt Inara and Atlanta and waa of aqual Inportanoa ulth Atlanta In warring tha Southoaat, lta araa of lnfluanoa haa boon raduoad aharply. At tha praaant tlna it la tha noat Inportant uholaaala trada

217center kttwn Us Wing ten, D* C*, and Charlotte, Rerth Carol 1m , Both af the latter Wo narketa ara increasing In importance and as such growth coatlnnes it appears that tha Riohaond araa will hao ona smaller. This ooaalaslaa la haa ad upon tha assumption that Maahingtoa*s growth will ha priaarily to tha South whilo Charlotto's growth will ba to tha Sarth* Tha oaapatitian af Baltlaora firao praoluda growth In that diraetiaa far Mashington firms whila Atlanta limits growth to tha South far Cbarlatta* It is entirely paosibla that in tha futura Riohaond will baeama a purely local uhalasala a an tar Hal tad to tha araa ia which it has a strong competitive advantage haoausa of looation. This faraoast appaars ta ba warrantad hj application of tha factors which control tha growth and dacllaa af wholaaala trada cantors*

hhila gaagraphy was Important In ths looation af the olty aad provided competitive advantages in tha aarliar development, it is no Laager af najer l^ertanee. Tba practical wains resulting froa location at tha flails af tha Jamas River was al la 1 no tad by development af rail and truok transportation as wall as by fallmrs ta aaiataln use of ths river far transportation purposes*

Tbara is no reason ta believe that transportation rates will ba revised in a warmer ta rastora tha dlsorimiaatory advantage far n*k«««y< firms* It is ta ba expected that tho minor inequity which still exists between Official and Southern rates will ba eliminated and tha fflshmnml establishments will ba In an even lass favorable position far sips tit Isa into tha South*

ns»e>id o an tin was to have tha bast rail facilities ta sarva

218•uton M»rth OtroilM from tajr point la the borth. Howrtr, tha I r r t r t r i H t n t t f l i of wholesaling raaalilaf fraa truck trtosporUtlM and tka avtllabllltj of aui w t highways In larth Carolina hai reduced the pnatlaal advuta|« ef superior rail facilities.

The akwa factors Indicate limitations In tha aroa of the * oho la sale narket. Population akanya* inflnanco potential of

a g l m area, As pointed ont previously tka growth In population of the Elchnond aroa has hoon slow and constant. On tha haais of known faota It la lnposslbls to forosoo any groat growth in the population of ttao aroa. This prediction oould bo npoot by soloetlon of tha aroa for Installation of largo Indnstrlal facilities or other occnonlo activities or the dlaooTory of aatnral rooouroos prosontly iVnovn, Tbs apparent lack of Interest in such development by the present population permits one to dleeemat the possibility of snob developments uhiah might result In an In migration of population.

Finally, tho oonsorvatlan of existing establishments and tha pohlIs at largo eeublaod with the apparent lack of Interest In creating a program of business derolapmaat for tha area nukes one pessimistic about tho fibre of Elchnond as a uhoissale trade cantor. Other cities, snob as Charlotte, have de to la pod such programs. Should tha Slehmond attitudes change In tho future It nay bo too late and result In a situation similar to that hleb existed when tha advantages of tho Jhmss Elver was loot because nothing was done to keep facilities up is date mtll after trade had boon diverted.

*<1. the ferae act indicates that Elahmond9s future as a

219wholesale tn4* M a U r la aou toe good, recognition unit be given to the feet that present wholesale establishments can make that faturo brighter by both collective and individual action. Collective action can be taken to inf leans e or change existing attitedes ef certain segments of the public, and to create a program far development of the ecsmnmlc potential ef the area. lad It Id xml action can be taken to in­crease the efficiency ef operation ef the establishment through nse ef mere modern methods and techniques, to develop programs designed to assist the retailer to operate mere effeotlvely, and to determine the feasibility of branch operations in territory lest through changes in freight rates.

It is reiisemsndsd that those persons presently engaged in i*olesallag in kiohmond take the action necessary to accomplish the objectives as exrtl lead. Unless action is taken it is probable that Hohmmd will became less Important as a wholesale trade center.

2 2 0

APPENDIX

223

Claselfloatlou 1881 1882 1883 1887 1888Orooeriee, confectioneries,liquor, tobaooo 8 9,226 8 10,986 8 12,1*08 8 11,385 8 11,72Provisions 3,500 3,85‘tty goods, boots and shoes,clothing 3,61*0 3,882 1*,170 U,9i5 5,27Coal, uood, bay, and feed 67Drags, lloorloa 625 71*0 790 1,060 1,08Hatinia and agriculturalisplsMnte 590 857 1,01*3 950 97lallsay, nil!, plvaablng

supplies 150 170 21*0 1*65 1*7Saalng aaohinas, typaarltars,bicytes, «Btoaotiw 1*50 52Oil, paint, aamiah, glass 325 33Leather, hides, eaddLezy,tanbark 390 38O 305 550 56Stores, tin. ohlna 299 3b7 380 625 85Books, stations zy, paper 312 1*09 1*96 360 1*7Furniture, carpets,

Vboleteiy 265 255 303 1*75 50Fiauoa, organa, uosioal

lnetnMute 220 32

Souroet 1881-1883, Rlnhtmrt Mercantile and Masufacturli 1887-1888, collected 6y J. H. '■litty and public1890-1901, Collected by J. H, ttxitty and public190L-1908, Collected by J. H. ttiitty and publii1909-1720, Collected by J. H. feitty and public

3a

18M 1890 1891 1892 1893 189* 1895 1898 1899

185 ♦ U,725 11M73 ♦ 17,09* I 17,317 ♦ 15,876 I 15,12* ♦ 15,608 » 1*,768 1 15J00 3,850 3,938 *,705 *,752 *,632 3,937 * * , 3,Ul0 2,955 3'15 5,272 6,102 6,**5 6,1*5 5,966 *,152 5,3M 6,997 8)60 675 250 725 725 653 *91 512 1,109 1

1,065 1,220 1,3*5 1,*30 1,320 1,209 1,209 1,325 150 975 1,150 1,3*5 1,290 795 780 859 905 1.65 1*70 600 653 660 996 698 691 71050 520 760 685 730 67* **0 *27 63025 330 *25 *50 539 525 *58 *65 52550 560 600 625 650 58 5 *10 *25 *6125 855 825 800 8*5 768 681 677 71760 1*75 800 550 560 512 *35 *00 *1575 508 2*; 230 2*0 225 175 170 16520 325 375 358 375 300 225 220 182

HMafnqtnriiy Jonmal. I, Vo. 2, Oortobar 1883.(.vr and jwb!dJ>»j~ia jfamnnd DUpntoh. January 1, 1583-188?.< <y *nd pnbliihad In ilO nond fin —. January 1, 1891-1902.1 7 «nd pubUahnd In wltiynt fcw Liidir. Jnuiy 1, 1905-1909* 7 *®d puhllnhnd in jlAnond ffi— "B5p*toh. Jmxamj 1, 1910-19

IT*bl« 39

SalM of Utaond Jobboro 1681-1920

(m tbooM&d dollari)

1899 1900 1901 190k 190$ 1906 1908 1909 1910

766 6 15,663 1 16,$2$ 1 17,590 1 16,3a • 17,526 1 18,675 $ 18,876 1 18,975 1 19,9SS 3,22$ 3,67$ li,250 12,156 12,989 13,305 13,763 13,768 13,191 8,Uii 8,k7k 8,69$ 9,116 10,267 12,720 12,738 13,U62 Ik,-109 1,30k 1,812 1,93$ 2,973 3,000 3,21*7 3,527 k,125 k,32$ 1,$23 1,612 1,7$0 2,00$ 2,196 2,387 2,697 2,750 2,90S 1,25$ 1,$20 1,57$ 1,793 1,889 2,009 2,392 2,1*96 2,710 990 998 1,2$0 1,590 1,776 2,876 3,100 3,565 3,630 73$ 61*5 87$ 9k7 98$ 1,012 1,560 1,7$0 2,52$ 61*9 72$ 81$ 928 956 1,11*1 1,355 1,560 1,1*61 $$$ $70 62$ 872 925 1,281 1,550 1,675 1,717 87k 908 963 850 87k 886 910 988 1,10$ U50 k6$ $2$ 782 825 810 91*5 1,250 1,16$ 170 176 200 1*22 k$7 512 815 927182 250 310 325 389 U18 521 625 750

I

8 1909 1910 1931 1912 1913 1911* 1915 1916

8.8763,763 $ 18,975 13,768 $ 19,581* 13,986 • 20,350

11*, 150$ 21,100 11*,600 8 21,250 11*, 760 $ 21,050

11*, 675% 21,11*8 U*,683

$ 21,61*1 U*,856

2,7383,5272,69713,1*62U,1252,750

11*,209 1*,620 2,875

11*,795 1*,750 2,975

15,3305,1513,100

16,5855,2663,357

16,3005,2752,105

15,9765,5913,001

16,1*805,6753,125

2,392 2,1*96 2,868 2,750 3,000 3,101* 3,000 3,125 3,2663,100 3,565 3,723 3,950 1*,U5 I*, 125 3,989 3,993 1*,0261,5601,355

1,7501,560 2,0861,725

2,5501,790 2,9751,850 2,9901,897 3,1151,750 3,098

1,71*93,8761,81*0

1,55091091*5

1,6759681,2501,8081,0001,387

1,9051,1501,1*502,0001,1651,650

2,2031,1*781,793

2,1001,1*851,850

2,0011,1*071,857

2,106i,5oo1,966

815 927 965 978 985 1,007 1,125 1,128 1,235625 750 825 915 976 995 998 998 1,068

I

I

i

1913 1911* 1915 1916 1917 1918 1919 1920

8 21,250 U*,760

$ 21,050 11*,675

8 21,11*8 H*,683

$ 21,61*1 H*, 856

8 21*,660 16,611

8 30,97020,755

8 38,907 26,281

8 39,063 26,1*20

16,565 5,8663,357

16,3005,2752,105

15,9765,5913,001

16,1*805,6753,125

18,7766,8503,951

23,0717,1305,336

26,5588,8936,1*20

25,2818,9156,1*31

3,101* 3,000 3,125 3,266 3,717 U,696 5,701* 5,791U,125 3,989 3,993 1*,026 l*,6l*l 5,806 6,855 6,9672,9901,897

3,1151,750

3,0981,71*9

3,8761,81*0

5,6251,935

6,8192,596

10,3903,012

10,5353,U28

2,2031,1*781,793

2,100 1,1*8 5 1,850

2,0011,1(171,857

2,1061,5001,966

2,9552,0752,596

3,8662,7053,271*

U,7283,01*51*,098

1*,9023,3101*,297

1,007 1,125 1,128 1,235 1,576 2,033 2,965 3,082995 998 998 1,068 1,1*91 1,880 2,1*91* 2,879

2 2 2

du*lflc«tl on□rocerles, oonfcctlon^rlttf

tobacco, liquor ProrldonaDry |oodt# boots and shoos,

olothlllf Coal, wood, hay, a sods Drue*# Idoorioe Har-dsmrs, afrleultartl

lapis— nts Railway, will, plnatolng

suppllos Sowing — rtrl nss, typewriters,

bicycles, antosotlr* Oils, paint, nrnithi glass Ieathtr, bides, saddlexy,

tenherk Stowes, tin, ohlna Books, stationery, paper Fturaltore, oarpeta,

wpholstery Pianos, organs, aoalcal

instr— nts

1687 1886 1890 1891

1,825 • 1,925 • 2,625 8 2,976375 385 375 435

1,730 1,655 1,695 1,830210 85 260

430 440 450 470250 250 320 325ISO 160 210 218250 250 355 355IOO llO 150 160225 230 25o 255265 275 265 290125 225 300 200250 265 100 IOOU 4O 150 160 160

Scarcei 1667—1668, Collected by J* H • b d t t /1690—1901, Collected by J * H. bhltty1904-1906, Collected by J* H„ m i t t y1909-1920, Collected toy J. H. bhitty

1892 1893 1891* 1895 1896 1899 1900

s • 3,010 $ 2,930 $ 2,930 $ 2,930 • 2,790 $ 2,81*5 $ 3> U50 U50 1*75 1*70 360 3651,81*5 1,81*5 1,788 1,760 1,972 2,095 2250 250 250 250 552 5651*75 1*75 1*75 526 1*83 1*85

325 250 250 250 268 310220 318 316 318 265 275350 350 280 260 222 230175 175 175 175 190 195260 260 206 226 190 200295 295 265 265 250 268200 225 180 180 180 17580 80 60 60 68 68

165 li*5 11*5 11*5 95 95

y and pub! 1a had in Riohnond Piapatoh. January 1. 1888—1889.y and publiahad in jtlohann? T1m » 7 m >o b« t 1, 1891-1902*gr and publiahad la K1 chaonl l a w U«d>r. January 1, 1905-1909*y and publiabad in klchamfl — Tupatofa, January 1, 1910—1921.

8051*20

35781*55251*60

3052652252002902107195

222

Table 1*0Coital InTMtaont Richmond Jobbers

1887-1920 (In thousand dollars)

1901 1901* 1905 1906

$ 3,800 $ 2,31*5 $ 2,1*76 $ 2,5961*85 1,850 1,906 1,913

2,390 2,099 2,150 2,77086$ 923 925 927$35 567 615 6211*65 1*98 525 529325 31*2 350 1*87272 27U 297 310230 258 261 267225 238 21*5 21*6300 232 235 238220 21*8 250 25675 90 91 8398 98 99 287

1908 1909 1910 1911

2,775 $ 2,850 $ 3,127 * 3,2501,968 1,975 1,986 1,9552,990 3,156 3,310 3,36591*0 95o 96. 965639 61*0 615 65051*o 51*5 556 560525 550 559 563355 358 365 380292 325 327 335251 255 268 275250 299 300 305298 325 328 335150 175 177 178298 315 319 325

1912

• 3, 1.3,

1913 19U* 1915 1916 1917 1918 1919 1920

• 3,278 $ 3,280 $ 3,265 ♦ 3,250 1 3,851 $ U,375 $ U,709 $ 1*, 71*61,999 2,000 2,060 2,125 2,155 2,168 2,256 2,5233,1*29 3,1*36 3,31*6 3,U2l* 3,520 3,856 1*,017 1*,293980 980 995 1,001 1,250 1,315 1,31*0 1,378658 660 662 675 665 725 789 795578 579 588 625 61*5 699 71*7 751568 568 575 587 670 715 763 775396 399 1*25 1*95 750 895 1,002 1,126338 339 335 3U8 350 355 378 ¥392285 285 285 299 300 351 381 386311 311 311 328 350 368 393 1*05337 338 338 31*6 625 672 689 697185 186 186 226 230 21*5 361 365365 366 366 379 390 1*10 1*1*6 1*88

Ig*x1390189118921B931394139518961897189813991900190119021903190419051906190719081909191019111912191319 U191519161917191319191920

Tabla 41United States Wholesale Commodity Price Index

and Production Index1390-1920

Price Index* Production Index11(1913 - IOO) (1909-1913 - 100)

80.5 44.380.0 48.474.8 48.676.6 43.068.7 42.270.0 51.466.7 47.266.8 53.069.6 57.374.9 60.480.5 61.079.3 67.68 4 . 4 73.785.5 74.985.6 73.786.2 86.488.6 91.893.5 91.290.1 76.196.9 93.6100.9 96.093.0 92.499.1 106.9100.0 111.198.1 102.1100.8 114.1126.8 136.0177.2 137.1194.3 134.8206.4 131.7226.2 139.7

Source * a. Bureaa of labor Statistics, WholesalePrices. 1390 to 1926. (Washington, D. C.: U, S. Government Printing Office, 1927), Bulletin 440, Table 5, p. 9*

b. W. M. Persons, Forecasting Business Cycles. (New Yorkt John Wiley and Sons, 1931), Table 12, pp. 170-171.

XSfiE

1890189113921893189418951B961897189818991900190119021903190419051906190719081909191019 H191219131 9 U191519161917191819191920

Table 42Wholesale Commodity Price Indexes

Selected Lines 1890-1920

(1913 - 100)Foods Clothe an4 clothing

He tala end ati&i. crgdupfri

Chemicalsdruse

86 95 116 9185 91 102 9279 91 93 9385 90 85 9175 79 72 8274 77 78 8169 76 78 8171 75 72 8974 77 72 9774 80 110 10179 88 108 10279 81 103 10583 83 100 10881 87 99 10584 88 88 10586 90 98 10383 98 113 9689 115 121 9891 94 95 9997 98 93 100101 100 94 10297 96 89 102104 97 99 101100 100 100 100102 98 85 101105 98 99 134121 127 162 181167 175 231 202188 228 187 215207 253 162 169220 296 192 200

Sourcei Bureau of Labor Statistics, Wholesale Prices1890—1926. (Washington, D. C.: U. S. GovernmentPrinting Office, 1927), Bulletin 440, Table 5, pp. 8-9.

Table 43 323Value of Uni tad States Output of Finished Commodities

For Domestic Consumption in Currant Prices (In thousand of dollars)

1390-1920Tear

1390139118921893189418951896139713981399 19001901190219031904190519061907 1903190919101911191219131914191519161917 1913 19191920(a)

roods and Tobacco$ 2,362,274

2,614,290 2,544,200 2,956,501 2,568,251 2,725,113 2,556,741 2,863,104 3,056,160 3,383,766 3,636,992 4,113,756 / oi.n4,2474,381

541613

Drugs

90,07097,901104,730104,872102,895111,298112,689115,551122,411134,559136,197154,462174,015183,112132,257215,752225,360249,297234,127250,290266,834278,791289,430294,939288,983330,970420,685511,524636,100660,130765,571

4,381,613 4,555,637 4,753,914 5,238,805 5,681,7875.290.137 6,160,683 6,593,5246.676.138 7,221,738 7,264,672 7,365,798 7,131,016 8,596,16211,462,410 13,728,381 15,021,435 16,193,124

(a) Values for this jaar wars calculated by applying tha price index to value of production in 1913 dollars.

Bex £224*ClothingE a s i m t$ 1,138,608

1,136,665 1,193,802 1,059,855 916,025

1,044,662 993,893

1,075,400 1,097,470 1,292,290 1,376,363 1,436,416 1,517,339 1,636,385 1,646,588 1,813,980 2,110,806 2,165,295 2,034,587 2,295,656 2,243,905 2,387,213 2,551,210 2,654,042 2,459,686 2,371,565 3,192,433 4,106,349 5,259,073 5,896,347 6,654,630

Farm |g]i4l3KQ&» Carpantars

tOOla$ 1 1 2 7 5 9 6

99,895 99,964 93,718 75,246 78,449 65,173 75,223 105,352 123,837 127,481 139,598 188,588 157,895 159,933 168,100 203,910 214,242 173,317 214,203 219,637 210,008 235,833 256,079 237,444 262,100 334,624 381,634 463,132 518,602 399,271

Sourcei Shaw, Value of £SH2&L&X Output Since 18 W . Table I, pp. 30-65*

Y— x

1921192219231924192519261927192819291930193119321933193419351936

226

Table 44Wholesale Price Index

Selected Linee 1921-1929

(1926 ■ 100)

ftfld He tale Hldea f.ndAllied Producte WaJk ftsdHffta gEgfclff l

115.0 117.5 109.2100.3 102.9 *04.6101.1 109.3 104.298.9 106.3 101.5101.8 103.2 105.3100 1D0 10096.1 96.3 107.795.0 97.0 121.494.0 100.5 109.188.7 92.1 10079.3 84.5 86.173.9 80.2 72.972.1 79.8 80.975.3 86.9 86.679.0 86.4 89.678.7 87.0 95.4

Source* Hletorlcal Statistics of United States. 1789-1945, Bureau of the Cansue, 1949, Series L 15-25, P* 233•

Tear19291930193119321933193419351936193719381939194019411942194319441945194619471948

2ZfTable 45

Wholesale Coraodity Price Index United States

All Conimoditles and Selected Commodities1929—1948 (1926 » 100)

Groceries Drugs Dry goods99.9 94.0 90.490.5 88.7 80.374.6 79.3 66.361.0 73.9 54.960.5 72.1 64.870.5 75.3 72.983.7 79.0 70.982.1 78.7 71.585.5 82.6 76.313.6 77.0 66.770.4 76.0 69.771.3 77.0 73.882.7 84.4 84.899.6 95.5 96.9105.6 94.9 97.4104.9 95.2 98.4106.2 95.2 100.1135.6 101.4 116.3168.7 127.3 141.7179.1 135.7 149.8

Hardware All Coaaodities100.5 95.392.1 *6.484.5 73.080.2 64.879.8 65.986.9 74.986.4 80.087.0 80.895.7 86.395.7 78.694.4 77.195.8 78.699.4 87.3103.8 98.8103.8 103.1103.8 1O4.0104.7 105.8115.5 121.1145.0 152.1163.6 165.1

Sources Bureau of labor Statistics

Table 46Classification of Wholesale Merchants

For Purposas of Tax Study

Xs£*l mmfrtr Per in­ Per centof 21 W W 1 cluded Xtk a£ talaLLreported analysis analysed

Automotive parts and accessories 25 12.2% 11 12.4%Seer, ale and vine 10 4.8 7 7.8

Building Materials, lumber, mi11work 9 4.3 4 4.5

Drugs and drug sundries 3 1.4 2 2.2

Electrical supplies 7 3.4 4 4.5Fresh produce 8 3.8 1 1.1Groceries 52 25.2 21 23.7Hardware, plumbing

and industrial supplies 11 5.3 7 7.8

Household appliances (Including radios) 7 3.4 4 4.5

Paper products 8 3.8 3 3.4Petroleum products 16 7.7 12 13.6Seafood and meats 6 2.9 2 2.2Tobacco and con­

fections 18 8.8 9 10.1Miscellaneous 27 13.0 2 2.2

Total 207 100.0% 89 100.0%

Sourcei Unpublished surrey by Waller and Voodhouse, Norfolk, Virginia*

229

Sttta and leoal Taxes If IeoatedBr s

Tobeooo and Confections Qrooerles“ “ CltyT" ]QoxartyJ \2f25U 3,339 2,395 3,321*2,5kl* 1,660 1,81*9 3,270 2,11*6 2,323 2,369

State City i - Zmom" Total StateCityBs&aood, Ta. ff i g r

Cesaty8 379 •5,021

Uoense9Z*Z^Alexandria, Ta* 2,116 2,269 392 k,777 2,232

Baltdnore, ttl* 262 1,720 kOO 2,382 1*60Charlotte, I* C. 75k 9U8 631 2,333 902Damrllle, Fa. 2,116 2,917 359 5,392 2,232Elisabeth City

H* C* 75k 1,219 615 2,588 902■orfolk, Ta* 2,116 1,55k 1*20 k,090 2,232Halolgh, V* C* 75k 871 635 2,260 902ffaonoke, Th* 2,116 3,058 & 5,526 2,232Smffelk, Ta* 2,116 2,005 k,526 2,232Vhshlngten, D*C*

. 751*1,188 551 1,739Instep flalan,M*C 1,028 626 2,k08 902

Calculations In this tabls a n for an aiaraga burden If tha flrn had bam looatad In aaoh of tha oltla naan of tha data an all flma within tha oalsslfloatlon* insofar as slaa Is oonoerasd It Is posslbls to naka an a ara 1noladed are as fallowsa

a* For Virginia altlas tha taana Inolada tha registration faa and franohlsa tax, lsoal a9 gross salas as applloahla, taxes on boa property, and all ether fees itae— ii assasa h» DaltInara taxaa Iwolnda State trader* lloa Franohlsa tax based apan tha anoant of oaf Oeanty personal property tax based qpon th e, Sorth Caralina taxes Inalwde a flat narourt ▼olana of sales, a State tax on bonk depoo aoeonnts reooisable, eta* A State Frenohl

salne of lntenglbla properties er assessed prlTllege lloensea which Is a flat anownt license based apon ▼alima of sales and Cit d* Shshlngton, D* C«, has only lsoal Haeneoa

In this oelnnn a spree ant tho franohlsa teaSource a (^published data prerided by sailer a

Tabla 1*7— Paid Qf An lTtrag« ghol— alar d Da Salaotad dti—8«lMt«d T.lnaa

19k9

Daon— TotiiI 688 85*623

711 $,127561 I*,360936 I*,033657 6,213915 U,36l71*0 1**632957 3*706660 6,162 716 5,091*819 3,H*2957 1**028

Budnr*W S a ----B B 7 TU w b m Cwmty83*170 I5778T3.170 1*,1371,301* 13,531*2,1*27 6,7873.170 5,3192,1*27 9*51*23*170 2,3102*1*27 6,261*3*170 1**5713.170 3,011* 9,1*092,1*27 7,566

In an— fotai

85,197 812,151* 5,179 12,1*863,635 18,6736,101 15,3155,120 13,6095,935 17,901*5*271 10,7516,132 11**8235,158 12*8995,235 11,1*195*071* 11**1*836,051* 16,01*7

Anto— tira ]s o t s — m r t11 o— a countyrsar nft1*55 5311*21 2,1*76

1*32 1*1151*55 687382 1*61*01*55 327132 1*0831*55 6011*55 369

1*683 1*32 1,307

Inoo— Total250 81*1662i*8 1,23787 2,981*26k 1*81121*0 1*382

235 2*257258 1,01*0265 1,78021*1* 1,303256 1*080213 1*896252 1*991

a alma uholoaala ftna In aaah Una and aha— tha ora rail tax las, Tha auornga alsa firm — a aatabllabad toy taking tha arittanatic a* Although tha raault — y not ba tjploal of an aadatlng firm aocurata datwa 1 nation of tha taiaa to ba paid* Tha taraa uhich

a atata lloanaa tax baaad upon purchaaas, tha atata 1 — rohanta taxaa baaad up— althar groaa porchaa— uatnaaa propartlaa, axoapt raal aatata and pax— 0. aaad for tha prluliaga of doing b— In— a* oaaaa baaad upon hlghaat — rohandi— lnrntoij, Stata apltal atook and aurplna and tha Stata, City, and tha unlua of piuptrty*nt Stata lloanaa tax, a Stata uhol— a la aalaa tax on oalta* a Stata lirtaaglbln praparty tax — oaah, nat hlaa tax baaad up— tha hlghaat of — t worth, book ad nil* of proparti— , Stata, dtp and Countyt baaad — population., a City uhol— ala — rohanta ity — d County proparty tax— *— and tax— * 1— toad of In a— a tax tha flgur— gluon ax ohargad in tha Xttatrlet of Colunbla*and Sbodh— , Norfolk, Virginia*

230

Charlotte, N* C,* la rapidly replacing Richmond, Va,* aa the Largest wholesale distribution center between Washington, D. C*, and Atlanta, 1929 the wholesale establishments of Richmond(including manufacturers' sales branches and offices) had total sales of $233*611,053 as compared to total sales of similar firms in Charlotte of $184*949*159, In 1948 sales of Riohmond firms were $649*587*000 and sales of Charlotte firms were $990*088,000, Richmond showed an Increase of 178 percent and Cnarlotte had an Increase of 435 percent.

The writer is attempting to determine the basio factors which hare permitted the greater growth In Charlotte. Inasmuch as your company has a sales branch or office In Charlotte and not in Richmond,I solicit your cooperation In securing the facts relative to this problem* The attached questionnaire, which can be completed in not over 15 minutes, is designed to assist you in providing the necessary informa­tion, You can help if you will take the few minutes to supply the information which is requested.

I assure you that all answers will remain confidential and no disclosure will be made of Information which can be identified with a particular company or individual.

Will you help in this attempt to provide basic marketinginformation?

Very cordially yours,

F. Byers Miller Dean

P. S. A copy of the total results will be supplied to cooperating firms which indicate desire for such.

Whan oompleted pleas* ’mil to 231F. Byars Killer, Dean QUESTIONNAIRE # 1Sohool of B usiness Administration Manufacturers' Salas Branches and University of Richmond, Virginia Offices

Charlotte, North Carolina and Richmond, Virginia

Name of Company _____________________________ Person submittingreport ___________________

Address ____ _________ Title

1# Does your company maintain a sales branch _ or sales office _____in Charlotte, North Carolina? (Check one )• TeSe purposes of this study % sales branch ig sag which maintains ap inventory of merchandise while * sales tffjgf mlflUlflg &£ iflTfRtacr.J

2m In what year was the sales branch or office first established inCharlotte? ____________________________________________________________

3• What territory is served by the Charlotte sales office or branch? (Please give states and parts of states so that territory could be plotted on a map.) _______________________________________________

A* What are the locations of th* sales branches or offices of your com­pany which serve the territories around you7

To th* north ________________________________To th* south ___________________To the westTo the east (if any) _ _ _ _ _ _ _ _ _ _ _ _ _

5* What types of merchandise does your company sell? (*»g», textilemachinery, office suppliest office equipment, groceries or food pro­ducts, drugs, hardware, eto.)

6* Approximately what percent of the sales volume of the Charlotte branch or office is to

Industrial users ________________________ %Retailers _________________________%Wholesalers or jobbers Other (Please specify)

2327* From What oantar waa your praaant territory aarrad bafora tha

Charlotta branch or offlea was established? ________________

8« (a) Haa Riohaond, Virginia, considered as a poaslbla location at thatime Charlotte was aa lac tad as tha location for a aalaa branch or offtoaT Yea . tfo . Don't know ____ •(b) If yaa, why was Charlotta sa lac tad instead of Richmond? ______

9• (a) If answer to 8(a) is no, haa Riohaond ewer bean considered as the location for a aalaa branoh ar office by your firm? Taa Ifo . Don't know ____ •(b) If yea, why was it not selected?

10, (a) Baa your company aver had a aalaa branoh or office in Riohaond? Tea . Vo . Don't know _____ «(b) If yea, why was it discontinued?

11« Why has your company aatablishad a sales branoh or offioa in Charlotta? (Please gire reasons in tha order of importance).

i?, What, in your opinion, are tha basic reasons Why Charlotta has in­creased in importance re la tire to Riohaond aa a location for mainifanturers sales branches and offices? (Please list in order of importance*)

233

13• (a) Does your company have a basic formula or procedure which Isfollowed In establishing a sales branch or of Tice? Yes ___, No_Don't know _____ •(b) If answer is yes, will you give the formula or procedure ___

L4* Would you like to have a copy of the results of this study? Yes No ____ .

When completed please mail to F. fcyers Miller, Dean School of Business Administration Unive rsity of Richmond, Virginia

Company Name Address __

23AyUESTIONNAIRE # 2

Manufacturers' Sales drenches and Offices

Charlotte, North Carolina and Richmond, Virginia

Information Supplied By Title

1* Does your company maintain a sales branoh or office in Richmond, Va.7 Tea . No____, and Charlotta, N. C. Tes ____ , No ____• (For pur­poses of this study a sales branch is one which maintains an inventory of stocks or merchandise, while a sales office does not maintain an inventory of merchandise.)

2* (a) In what year was the Richmond sales office or branch established?

(b) In what year was tha Charlotta sales office or branch established?

3* If the Charlotte office or branch was established after the branoh or office in Richmond, does it serve territory formerly served by the Richmond office? Tas _____ ,__No_____ , Don't know .

A* (a) What territory is served by the Richmond branch or office?(Please give states or parts of states so that the territory can be drawn on a map.)

(b) What territory is served by the Charlotte branch or office?

5» (a) Please give the location of the sales branch or office of yourcompany serving the areas nect to the Richmond territory and the points at which the areas meet*

To the south ______________________________To the north ______________________________To the west

291To the east ____________________

(b) Please give the location of the sales branch or office of your company serving the areas next to the Charlotte territory and the points at which the areas meet.

To the southTo the north ___________________To the west ____________________To the east ____________________

6. What branch(s) or office(s) served tr.e present Richmond territory be­fore a separate branch or office was established in Richmond?

7. What types or lines of merchandise do you sell? (e.g., textile mach­inery, hardware, drugs, office equipment, etc.) ______________________

8* (a) Approximately what proportion of your sales are made toindustrial users _______________ %retailers %

wholesalers or jobbers _________ %other (specify) %

(b) Does this same proportion hold true for the Charlotte office orbranch? Yes No_____ , Don* t know

(c) if (b) is no, what are the differences? ________________________

9. What has been the trend in sales of the Charlotte and Richmond offices for the past five years? (Check one)•

2361* ____ Charlotte sales lucres sing more rapidly than Rich­

mond.2. ____ Richmond sales Increasing aore rapidly than

Charlotte,3* Sales of both increasing at about the saas rate.4* Sales of both decreasing at about the sane rate.5. ____ Other (Specify) ________________________________

10* If you check 1, 2, or 5 In 0 9» please glre your opinion of the onuses for the differences __________________________________

U * What was the percentage relationship between Charlotte sales and Richmond sales for 1950? (For purposes of uniformity please glre Charlotte sales as a percent of Richmond sales) %

12* In your opinion what are the reasons for the proportionatelygreater growth of Charlotte as a wholesale trade center as com­pared to Richmond? (Please list In order of Importance.)

13* Do you want a oopy of the results of this study? Tea . Mo .

Tour cooperation is appreciated.

237Blklitfrtphy

Book* tAadrov*, M. P., Tho Soul of g lotion Vow Tork, Chari*■ Sorihanra' Sons,

19A3.lo*kn*a, T. B. , and Bagla, B. H., PHnatnlaa Pro* tin*.

B*v Tork, Tho Bov Id Pro** Conpany, B o t . Printing, Bor. Id., 1951*

Brno*, P. A., SftflaflEftlft. ftlJtlflEL fl£ Tlrxlnln In tho Sorantoonth Ctntorr.Bov Tork, MaoMLllan and Conpany, I, 1B9©.Chriatlnn, V. A., *<*^*<1. l*r Past Prooont. Biohnond, L. H. Jonkin*,

1912.Cravon, V. P., EWtlltiHT if IfeB Tlrglnin Conaar. B*v lork, Oxford BniToralty Pro**, 1932.Dodor, B. B., Tho Coa*t Bollrood. Bov Tork, Houghton

Mifflin Colony, 1923*Daaavay, V. P., Hlntgrr of kkl J‘**‘ Bivor tig tanavh* Ca*mw. B*v Tork,

Colanbla Ohivorsity, 1922.Pair, M. L., and Million*, 1. V., Jr., Bao»— <aa ftf Tmn*portatlon. Bov

Tork, Borpor and Brothor*, 1930.Paulknor. I. B., Anorlnan IlMMll* Hl«torr. Bov Tork, Harpor and

Brothor*, Plfth Idltlon, 19A3.Bov*, Hoary, ttllwtlllll of YiTftElB r Charloston, Babeoek and

Conpany, 1*45.Littlo, J. P., X)ML Canitnl of vii^iaia, Biohnond, MtoPhrland and

P*reason, IB51.)kwa, P. B., Jflfcl Horton tad don*. of London tad Wtyglnla.

Blohnand, Tho Biota Proas, 1937.Mordooai, J. 4 |fiU£ BlotoiT gf Prodorlakahnro §bA

C ^ M B B lBliL9l4* ** vpohliahod history availablo in tho Unhnonrt offioo of tho railroad.

Mordooai, J. B., U bIHHA iA ByQon* Par*. Biohnond, Ooorgo M. Most, IB56.Morrison, Androv, Th* City V JHT1 — UfikMUli Tire la la.

Biohnond, Ooorgo U. fiigolhardt, 1B93.

23M

Picturesque Richmond. Richmond, J. L. Hill Printing Company, 1891*Richmond. Virginia: gfix. A , Richmond, J. L.

Hill Printing Conpany, 1895.ZJLEJtiUUfc* iia. A^^rft9 ^1,9ry a^d Richmond, V. D.Chastarmand, 1886.

Shaw, W. H. , Value of &RMSA1&X. Output Since 1869. New York, National Bureau of Roonaaiic Research, 1947.

Shotaberger, M. L., The gffect of Transportation Upon Richmond as a Wholesale Trade Center, an unpublished master's thesis, University of Richmond, 1948.

Shultx, W. J., and Harrlsa, C. L. , Amiri— n Public Finance. New York, Prentice-Hall, Inc., Fifth Edition, 1949.

St&nard, Mairy M., Richmond. Its People and Its Story. Philadelphia,J. B. Lippinoott, Company, 1923.

Wright, L. B., Letters of Robert Carter. 1720—1727, Sam Marino, The Huntington Library, 1940.

Grove rams nt Publications!Bureau of the Census, Fifteenth Census of the United States, 1930,

Distribution Volume I, Retail Distribution. U. S. Government Printing Office, 1930.

Bureau of the Commas, Fifteenth Census of the United States, 1930, Distribution Volume 2, Wholesale Distribution. U. S. Government Printing Office, 1930.

Bureau of the Census, Census of Business! 1935, Wholesale Distribution,III, Cities and Countyaaf U. S. Government Printing Office,1937.

Bureau of the Census, Census of Business! 1935, Wholesale Distribution,III, States. U. S. Government Printing Office, 1937.

Bureau of the Census, Sixteenth Census of the United States, Census of Business* 1939, II, Wholesale XlftSla., U. S. Government Print­ing Office, 1942.

Bureau of the Census, U. S. Census of Business! 1948, Wholesale Trade 1948! Fifty Largest Counties, U. S. Government Printing

Office, 1951.

239Bureau of the Census, (J* S. Census of Bualnaaat 1948, Trade.

Unit ad States S nonary, Bulletin 1—W-O, U. S. Government Printing Office, 1950*

Bureau of the Census, U* S. Census of Buslnesss 1948, 1 Trade.Virginia, Bulletin l-W-45, U. S. Government Printing Office. 1950.

Bureau of the Census, U. S* Census of Business! 1948, Wholesale Trade.Worth Carolina . Bulletin l-W-32, 0. S. Government Printing Office, 1950.

Bureau of the Census, 0. S. Census of Buslnesss 1948, Retail Trade.Worth Cana 11 na . Bulletin 1-R—32, U. S. Government Printing Office, 1950.

Bureau of the Census, U. S. Census of Business! 1943, Retail Trade.Viryfola. Bulletin 1-R—45, 0. S. Government Printing Office, 1950.

Bureau of the Census, U. S. Census of Business! 1948, Trade.United States Summary. Bulletin, 1^1—0, U. S. Government Printing Office, 1950.

Bureau of the Census, Seventeenth Census of the United States, 1950, Patnila-M on. U. S. Government Printing Office, 1951.

Bureau of the Census, Historical Statistics s£. ttta United States.lZS2 - m 2 , n. s. Government Printing Office, 1949.

Bureau of Labor Statistics, PrlffM» 1390 £2 1926. BulletinNo. 440, U. S. Government Printing Office, 1927.

City of Richmond, Virginia, 4a Ordinance to Amnnri the Richmond City Code. Chanter IQ. Taxaotlon. Bureau of Taxation, 1950.

Department of Taxation, Commonwealth of Virginia, Code of Virginia.1950. Title 58. T a»t«Qn. Charlottesville, The Michie Company, 1950.

Imboden, J. D., Report on the Internal £wnft££l. SL the United States.U. S. Treasury Department Document 892B, U. S. Government Printing Office, 1886.

Interstate Commerce Connies ion Reports, 57, Docket No. 10 500. U. S. Government Printing Office, 1920.

Interstate Coia&erce Conmlasion Reports, Docket Number 13494, SouthernClass-Rate Tffveatlgation. Richmond, S. D. Adkins and Company, 1927.

240

Interstate Coneserce Commission Reporta, 213, Docket Number 21665, U. S. Government Printing Office, 1938.

Interstate Conmeree Commission, Class-Rate Investigation. 1939 »nri Consolidated tolgfrV Classification. 1241, mimeograph bulletin provided by the Connisslon.

Periodicals tAndrews, T. C. and Long, C., "Buslness License Taxss in Virginia"

Virginia Municipal Review, XVIII, 4-8, (April—July, 1941)."C crane rclal Convention In Richmond, September 10—11, 1851. " Hunt*a

1 ftoA Conaercial fisxitM* AXV, No. 4,October, 18 51).

"Description of Virginia Conmerce." The William and hfarv CollegeQuartsiXr MSjaaJLdR, x^, (1905-06K

Editorial, Nile* s Weekly Register. XVII, No. 437, (January 1820).Editorial, RJLffha?nd Mercantile u g Manufacturing Journal. II, No. 2,

(February, 3884 )•Gray, L. C., "The Market Surplus Problems of Colonial Tobacco." The

WUllEft uad. tfeXX GgUfXtt <tortfftr.\Y H i s t o r i c Magazine.Series 2, VIII, No. 1, (January , 1928).Hunt1 s Merchants* Mage line Commercial Review. XXXV, No. 1, (July, 1856).■Instructions to Berkeley, 1642." The Virginia Magaslne of History and

Blggrepkr, II, »°. 3, (January, 1895)."Patrician and Plebian in Virginia." Vlrgl^l^ Magazine of Hl3torv and

Blograohv. XVIII, No. 3, (July, 1910)."Pldght of the Colonial Planter." The William and Marv Collage Q w r ^ ^ l v

Historical Magazine. XXVI, No. 3, (January, 1918)."Prices in New York and Richmond. " HuaVa Mer c h a n t Maga tine and

Cnpie.T»nial Review. XLU, No. 1, (July, 1863).•Proposals in Regard to Virginia." The Virginia Magazine of History and

Biography. XXV, No. 1, (January, 1917).■Richmond, Virginia, 1858." Hunt*a Merchants1 Jfcgazlne and Commercial

Review. XL, No. 1, (January, 1859).

241VlrtrJjU* >frga»lno qL History Biography. 3 M , XX, No- 2. (October,

1901)."Wholesaling in Our American Economy." The ffHTTV^l of ffarketlng.

Supplementary Issue, XIV, No. 2, (September, 1949

NewspapersiZk& Virginia QuRfcfcR. April 15-22, 1737.X&2. Virginia Qasette. September 26, 1745.Zhfi. Virginia Qaaette. February 5, 1780.XbS. QaifWt i September 27, 1780.

Editorial, Richmond Conaiercial Compiler, XXIII, No. 3576, (June 5, 1821). Editorial, ftlVhd?nd t ?iT M aod Compiler. 69, No. 1, (October 29, 1846).Whitty, "Report on the Jobbing Trade." These reports were printed in the

papers as listed belowsRichmond Dispatch. No. 11701, (January 1, 1889).The RifthfwH V, No. 1559, (January 1, 1891).The iHfthenwH H*t£, VI, No. 279, (January 1, 1892).The Richmond Xidft£» VII, No. 274, (December 31, 1893).The Rfrhmnnd VIII, No. 251. (January 1, 1895).The Richmond Ti— . H , No. 279, (Jammry 1, 1896).The msklfifiA X^UU.» XIII, No. 278, (January 1, 1899).The iMnhmrtnri Timea, XIV, No. 275, (December 31, 1899).The Tl— . XV, No. 2 6 3 , (January 1, 1901).The Xlfltt* XVI, No. 280, (January 1, 1902).RjfthMftnrf Mews Leader. IX, No. 1, (January 2, 1905).RtahsnnH Mews leader. XII, No. 1, (January 1, 1906).The Times-O is natch. No. 17427, (January 1, 1907).Richmond News Leader. XIV, No. 1, (January 1, 1909).The TlmeaeDlacatch. No. 18122, (January 1, 1910).The T i p w ^isnatoh. No. 18486, (January 1, 1911).The ^pa-Dlapatch. No. 18851, (January 1, -912) .The Timss-Piapatch. Nc. 19217, (January 1, 1913).The Tlams-Dispatch. No. 19582, (January 1, 1914).Rlrfrrnd Tinm— ^iepatch. 65, No. 1, (January 1, 1915).Richmond t Im ^ I bpatch. 65, No. 365. (January 1, 1916).Ri«h«g>pd Timea-Olspatch. 67, No. 1, (January 1, 1^17).Richmond Tlmaa-DlBpatch. 68, No. 1, (January 1, 1918).Rlohmond Tinm«^>lapatch. 69, No. 1, (January 1, 1919).Richmond T is patch. 70, No. 1, (January 1, 1920).Richmond Times-Dlspatch. 71, No. 2, (January 2, 1921).

242Pamphlets and Reports x

Charlotte Chamber of Conmerce, Charlotte Indus trial Brief. 1950. 1950.

Consnlttee of the Board of Trade, Address to the Merchants of Virginia. Richmond, 18 57 •

Director of Public Works, City of Richmond, Virginia, Annual Reports. for the years 1940-1950, inclusive.

Ellyson, H. K., Richmond Directory. 1856.Johnson, L. K,, frfarketing in Virginia. Preliminary Report, Advisory

Council on the Virginia Economy, 1951.Jfaddox, John, Dlrectory of Rlchiaond. 1819.Montague, W. L., Richmond Directory ud, Business Advertiser. 1450.Montague, W. L., Richmond Directory ao£ Business Advertiser. 1951.Montague, W. L., Rjifthn r Directory and Business Advertiser for 1852.

Mo, 2, (1852).fit ikft Cflanprpfrl Convention 2l ihfi. S ^ P fit Virginia ani

North Carolina. Norfolk, T. G. Broughton and Sons, 1839.Richmond Chamber of Commerce, The Advantages of Richmond. Virginia as &

T>turlng and Trading Centre. 1882.Richmond Chamber of Commerce, Annual Report. 1903.Richmond Chamber of Conmerce, JEUUJLl Report. 1904.Richmond Chamber of Conmerce, Industrial Appraisal of Richmond. Virginia.

1941.Richmond Chamber of Commerce, Report of the Traffic Bureau. 1895.Richmond. Virginia and the New South. Richmond, George W. Engelhardt

and Company, undated.

243

lairt iography

I, Frtdtrlok Bytra Millar, vu Bara In CIrraUad, OMia, April 6, 1913 • I raaaiva^ ay aaoaniary aaliaol education la the public aahoala af tha tam af B a m , Ohio, Hr undergraduate training w a obtain ad at Baldwin Wallace Callage, froa which I raealaad tha degree Baohalor of Saiaaoa In 1934* Froa Tha Ohio Stata Uairereltj,I reeaired tha dagraa Naatar of Bueineaa Adniniatratlon in 1940*While in raaldaaoa at Tha Ohio Stata Salreralty, I noted In tha eapaoity of teaohing aaaiatant In tha Dapartaant of Buaineaa Orgaaiaa— tioa* I held thia poaition until 1941 at which tiaa residence re— qulreaanta for tha dagraa Dootor af Philosophy ware o cupIsted, Sinoa 1941 I have bean a aanbar of tha faculty af tha UbiTersity of Rlahaoad*