The Riddle of the Jew's Success

by Theodor Fritsch

  We learn that 27 of these great “ Hire purchase” or “Payment by installments” businesses in Germany are united under one control, that is to say, belong to one company, the chairman or managing director of which is said to be one Leskowitz of Dresden. It is further maintained that the yearly income of this man amounts to Marks 800,000 (£40,000). Enormous as this may sound, it is by no means improbable if one takes into consideration that not only must very high prices be paid for all the goods, which these businesses supply, but that those goods, which have been confiscated and taken back in consequence of failure to pay an installment when due, are “touchedup” a little, and immediately supplied again to a new customer.

  [Page 119] In what plight is a community and its legislation when it is unable to check bare-faced plundering of its poorest members by such a system of thinly-disguised usury? Would one not do far better to substitute in the place of these innumerable laws, which eventually prove to be utterly inadequate, and which can be evaded on every occasion by experienced cheats, the healthy sense of fairness, inherent in properlytrained Judges i.e., men of long personal acquaintance with practical life, just like the English do, and which they find answers very well?

  3. The “Stores.”

  The original of the “ Stores” is the eastern “bazaar”, which, already more than a century ago, was represented in this land by the country “general-shop”, and the latter was really necessary in our remoter districts. Both of these satisfied an obvious need; but even in this direction an alien and degrading feature began to make itself visible in the sound development of trade, in the shape of the 50, 25 and 10 Pfennig bazaars, caricatures of the originals, which were started by the Jews soon after the establishment of the freedom of industry. It is worthy of note that the first “stores”, on a grand scale, arose in that most pleasure-loving of all world cities — Paris — in order to provide the world of frivolous women with a convenient establishment or depot where the hundreds of requirements of an elegant lady could be satisfied under one roof. Their field of activity was then extended into the United States in order to make it possible for the population there, who, though dwelling in the smaller towns and in the open country, separated from one another by vast distances and cut off, for the most part, from traffic, still wished to be “up-to-date”. The Hebrews have introduced their imitation bazaars into our larger towns, which were already amply supplied with shopping facilities, without any other justification than that of speculation, based upon the love of comfort, mania for enjoyment, confusion of thought and absence of any critical faculty, which characterise the great majority, especially of women.

  [Page 120] Not in one single case are our “ Stores” necessary in the sense that the eastern bazaars, our country general-shops, and the American “Stores” are necessary, and it is worthy of note that in many countries — for instance Brasil — the erection of these great “Stores” is forbidden in the interests of sound, straightforward commerce, and therefore in the interests of the community generally.

  Thus the great, dazzling, central shopping-establishments to be found in all our large cities, and into which the “Stores” gradually develop, owe their existence entirely to a deliberate violation of the practices of sound commerce, which forces a way for itself, regardless of everything and everybody, assisted by and in connection with an extensive association or combination of capital, i.e., great Bank-credit. It is undeniable that these establishments, by reason of the organisation upon which they depend, belong to the most remarkable creations of modern times, and it is quite comprehensible why the purchasing public seems to lose its head over these novelties, and is powerfully attracted by the real or apparent advantages of these establishments. What these advantages are supposed to be, is in everybody’s mouth, for the “Stores” themselves have taken very good care that the same should be adequately advertised. It is not so well known, however, that these great bazaars find it necessary to make use of a number of cleverly conceived manoeuvres in order to attract their public, and to secure a good profit, in spite of the apparent cheapness of their wares. Chief of all is the endeavour so to work upon the customer by dazzling the eyes, and generally by bewildering the senses with an extravagant and varied display of goods, and further, by enlisting the arts of persuasion and cajolery to such an extent as to make it almost impossible, or, at any rate, extremely difficult for the customer to leave the establishment without having purchased something, whether he actually required it or not. A number of special tricks, as well, have been invented to mislead the customers on the one side, and to exploit ingeniously the manufacturers and merchants on the other. A few examples only of these tricks are given below.

  [Page 121]

  1. Tricks to deceive customers. Articles to entice. The “ Stores” have found that the best means to attract customers is to offer certain articles of little intrinsic value at surprisingly low prices; at prices, in fact, which do not allow of any profit, or may even be less than the actual cost of the goods. They sell many of such articles for several Pfennigs less than the factory price — fully aware that by so doing they are brilliantly advertising themselves. What does it matter after all, if a few Pfennigs are lost each time that reels of cotton, hairpins, goldfish, gloves, buttons, glasses etc. are sold! Customers are drawn in by the enticing prices, and temptation is placed in their way to purchase other articles, the real value of which they are not nearly so well able to estimate. And thus the great emporium is richly recompensed for its small initial loss.

  Moreover, it is the intention to create the impression amongst those, who are desirous of buying, that, in a business, where certain articles are so cheap, all must necessarily be cheap. And that is just what they are not. This is one of the most effective deceptions practised by the great “Stores” on the public. For, in the case of the larger and more costly goods, which are only occasionally purchased, and the value of which the ordinary layman is not experienced enough to judge, considerably higher prices are charged than would be the case if the article in question had been purchased at a genuine business of the usual kind, i.e., businesses which specialise in the sale of one kind of goods.

  Also, it is worth remarking, that articles, intended to act as a bait, or an allurement, are always objects, which have but little value in a household, and, for that reason, are not purchased to any considerable extent by the public. However, if anybody, in order to take advantage of the cheapness of these goods, endeavours to buy more of the same than is usual, he is almost invariably met with the answer that the stock is sold out.

  “ Display articles.” — One occasionally notices in the windows of the great “Stores” articles of a larger size, which cause astonishment on account of their exceptional cheapness.

  [Page 122] So far as can be seen, these articles are made of good material and the workmanship is sound. On entering the establishment to buy one of these articles, one is usually shown something of similar appearance but of inferior quality. If the customer detects the difference, he is given to understand that all the better quality has been sold. If he then demands the article, which is displayed in the window, he is told that the same has been sold already, but that the purchaser has given permission for it to remain on display until a new consignment arrives. Certainly the law concerning unclean competition provides — in a measure — a remedy against tricks of this kind, but the customer scarcely ever avails himself of it, and, if he does, seldom with success. The rule is that one simply does not obtain the desired article at the stated price.

  “Mixing of goods.” — The following practice is customary in the “Stores” when a quantity of articles are offered for sale in one lot: amongst a number of cheap goods such as articles of clothing, linen, crockery etc, several articles of a better quality than the majority are introduced. These better articles are, for reasons which it is easy to understand, placed on the top, and are handed, for hasty inspection, to likely purchasers. If a sale takes place the salesman endeavours to subst
itute the inferior article, or, if a large quantity is being dealt with, to mix the inferior articles with the better ones.

  “ Deception-and Exchange-articles.” — The “Stores” have introduced the following practice: they buy a parcel of goods of superior quality from a manufacturer of good reputation, and, armed with a sample from these, order articles, deceptively similar in appearance but made of inferior material, to be manufactured at another factory. As they then sell by turns from the superior and inferior stocks (but mostly from the latter) they are in a position to evade the reproach that they deal in inferior goods. Whenever a dispute arises, they simply produce one of the better articles, and assure the customer that this is their normal quality, and that the inferior specimen complained of has been introduced amongst the better goods by accident.

  [Page 123] What is related below as having taken place in a large “ Stores” has been proved, beyond doubt, to be a fact: the business in question had bought a large quantity of well-made lace, the factory price of which was 10 Pfennigs the metre. Two inferior qualities of lace at the respective factory prices of 6 and 3 Pfennigs the metre, but of exactly the same pattern, were then ordered. The winding cards of these three different qualities of lace, which all appear to the ordinary superficial observer to be of the same quality, are placed, side by side, and are all offered for sale at the same price of 9 Pfennigs the metre. It is easy to understand that those who sold had received instructions to sell as much as possible from the winding-card, which contained the lace, which had cost 3 Pfennigs the metre; it was only when a customer entered, who displayed a certain amount of criticism, and appeared to understand something about the matter, that lace was taken from the winding-card, which contained the superior quality. The lady who, by chance, happened to receive a piece of the 10 Pfennig lace for 9 Pfennigs, would naturally continue for a long time to sing the praises of the superiority and cheapness of the article in question amongst the whole circle of her acquaintances, and, in this way, this particular “stores” recovered by the good advertisement far more than the value of the single Pfennig, which had been actually lost in the transaction.

  “ Prices which confuse and mislead.” — The great “Stores” often endeavour, by marking articles at unusual prices (such as 98 Pfennigs, 2 Marks 95 Pfennigs etc.) to create the impression that their calculations are made with the greatest nicety, and that they are satisfied with a very meagre profit. But this is also a delusion, for, amongst the articles marked 98 Pfennigs, there are many, which can be bought in genuine business for 75 or 80 Pfennigs. Moreover, the fact that a customer has allowed himself to be enticed by an apparent saving of 2 Pfennigs is scarcely an event to which he can refer with pride; it is so obviously a speculation of a mean nature, or — generally where women are concerned — is prompted by an absurd idea of economy.

  The “ Confectionär”, which issues the official organ of the union of “Stores” and Warehouses as its Sunday supplement, recently gave its readers the following good advice:

  “ the smaller articles must often be sold at cost price, and sometimes even for less, in order that so much the more may be charged for the larger ones.”

  [Page 124] “ If a lady is enabled to purchase gloves or soap for a few groschen below the usual price, she is there and then convinced that all articles in that same business house are cheap, and continues, with complete confidence, to purchase in the same establishment also, mantles and silken garments.”

  In the course of an action taken by the “ Stores” called Stein in Berlin against the “Bund der Handelund Gewerbetreibenden” (Association of Commerce and Industry) a pronouncement was made by the Prussian Court of Appeal, when reversing the judgement of November 14th 1907, as follows:

  “ It is a matter of common knowledge to those engaged in law, that the ‘Stores’ endeavour to attract large numbers of customers, by offering for sale, at absurdly low prices, those particular goods, which are in daily use or consumption by the masses, but that when other goods are sold, far higher prices are demanded than are charged by the small and moderately-sized shops, which specialise in the particular kind of goods concerned.”

  When a large Berlin “ Stores” went so far recently as to offer Imperial 5 Pfennig postcards for 4 Pfennigs, the intention, which was to entice customers into the establishment and to force other articles upon them, was only too apparent. For, finally, the reduced price for the postcards was only granted to those, who could produce proof that they had purchased other goods. But the intention was also present to create the bewildering impression that this “Stores” was making the impossible possible, and was actually in a position to sell the Imperial postcards cheaper than the postal authorities themselves could. The success of this questionable kind of business depends, to a large extent, upon the suggestion that this “Stores”, by some incredible means or magic, could actually sell goods cheaper than those who manufactured the same. It is certainly only the most thoughtless, who can allow themselves to be fooled by such unbusiness like tricks, and the same may therefore be regarded as a speculation in stupidity. Whoever allows himself to be enticed by these “Stores” tricks is certainly not entitled to ask for a certificate stating that he — or she — is capable of sane and independent judgement.

  [Page 125]

  2. Injury done to the Producers. It can be seen from the practices, which have just been described, how the “Stores” favour, for the most part, the production of inferior goods and thus react very oppressively upon certain branches of manufacture. The method of procedure is usually as follows: the “Stores” buyer puts in an appearance at the office of the factory, and producing a certain article says:

  “ I can order annually large quantities of this article if you can produce the same at from 20 to 25 per cent below the present price. It does not matter if the workmanship and the material are inferior, but the appearance must be the same.”

  When a respectable manufacturer declines to accept this invitation, the “Stores” buyer threatens to take his order to some other firm. Many a manufacturer, apprehensive of being squeezed out of the market, ends up by consenting, and produces the inferior goods, which are desired. One inevitable consequence of the constantly increasing manufacture of shoddy and inferior goods is, that the production of goods of superior quality tends as steadily to diminish.

  An expert in the manufacture of china reports: “ our factory has worked for years at a loss simply because the demand for a good class of ware, which is worth its price, is gradually falling off. The ‘Stores’ buy only ‘fourth selection’ and flawed goods, that is to say, refuse. They then mix several good pieces among the lot, in the case of plates, for instance, laying them on the top of the others, and the public buys this rubbish unsuspectingly. A sound line of goods, however, waits in vain for a purchaser. There is nothing left but to resign one’s self to the manufacture of artificially prepared refuse. On the other hand wages keep on rising, so that it is no longer possible to make the business pay, and this entire branch of industry goes from bad to worse.”

  Numerous factories in other branches of trade have allowed themselves to be inveigled into manufacturing rubbish, especially for the “Stores”, and have found their ruin in the process. It was the invariable habit of the “Stores” buyer to endeavour to beat the price down each time he gave a fresh order, until there was no longer any possibility for the producer to make even the most meagre profit.

  [Page 126] The customers for the better class of wares had, however, disappeared in the meantime, so there was nothing to be done except to discontinue business.

  Another decade like this, and we shall see the greater part of that branch of industry, which is dependent upon orders from the “Stores”, ruined likewise.

  A sausage manufacturer, when asked how it was that he could deliver his sausages so cheaply to the “Stores” that the latter could sell a pair for 12 Pfennigs when 15 Pfennigs were charged everywhere else, answered laughing:

  “just measur
e the things! they are certainly a fifth cheaper, but they are also a quarter shorter.” — The purchasing public has no idea whatever of such proceedings, or behaves, at any rate, as if it had no such idea; it is bewitched by the fascinating and bewildering life of the great “Stores”, and does not pause to consider to what an extent the entire economic life is being undermined by such a questionable form of development. For, not only is industry reduced to producing rubbish, but also those sound businesses in the towns, which confine themselves to the sale of highclass specialities, are being ruined, because the “Stores” are gradually depriving them of their customers. In the vicinity of the “Stores” one good business after another disappears; in Berlin, for instance, in the year 1913, no less than 18,000 separate shops were standing empty. Development of this kind can only end in a gigantic economic catastrophe; and we shall be indebted for this to the magnificence of the “Stores”, as well as to the incredible shortsightedness of the public, which allows itself to be enticed into such man-traps, and which stifles every feeling of responsibility with arguments, which are prompted solely by its own laziness and vanity.

  A lowering of quality in the type of all articles available for trade. — As the “Stores” have use only for great quantities of articles as much alike as possible, they endeavour, as far as they can, to reduce the number of the various samples and types. The whole of the ArtIndustry suffers especially thereby, as it is wont to grant both fancy and personal taste as large a field as possible.

  [Page 127] The “ Stores” like to have a suitable sample reproduced a thousand, or even a million times, and this naturally causes other good samples to be forced out of the market. The Art-Industry loses its individuality; all becomes mass-manufacture for mass-taste.

  As inferior material is almost invariably introduced where the above course is practised, the Art-Industry suffers degradation and cheapening in every respect.