Popular Science Monthly/Volume 51/September 1897/Correspondence


Editor Popular Science Monthly:

In the July number of the Monthly, under the head of A New Social Problem, you discuss the department store. I was interested in your application of the fundamental laws of evolution to its development. From an evolutionist whose views do not fully accord with your own will you permit a query or two?

I live in a city in which the first business started was a department store. It was owned and conducted by a wealthy man who was eager for more wealth. Now, how did it happen that his ability to purchase large quantities of goods, the saving of rents, etc., failed to prevent a differentiation and segregation into the little specialist? Has not this been the general course of all communities in this country? First, settlement was made at some point, and the man with a general assortment of commodities put in his appearance. If population became permanent and sufficiently large, differentiation and segregation took place, and the whole became integrated along the street or streets best adapted to business.

Now, what has caused a reversal of the process? The economies mentioned in your article manifestly are inadequate to explain the matter, since all of them have been in operation from the beginning. Take, for instance, the ability to make large purchases for cash. Is it not a well known fact that the discount to-day in such transactions is less than at any former time? The discount has but two factors—interest and commercial risk. Rates of interest are less than at any former time, while commercial reports are more readily obtainable and more trustworthy than ever before.

Evidently some new factor must be considered, as the forces with which you deal have been in operation for all time. Nor can this new element consist of knowledge of advanced business methods, since it can be shown that we to-day are familiar with no business process not known from the dawn of civilization. This new force, in my opinion, is not far to seek. Is it not true that a high rate of taxation wherever applied has had the effect to concentrate the business in the article so taxed? We need but recall the match, the tobacco and the whisky interests. Now, have we not a new element in the high property tax rates of modern municipalities? They certainly are new, as their equal was never before imposed.

Space will not permit tracing the operations of this new force. But when we observe a direct relation between a high property tax rate and business concentration, we are impressed with its potency. I will instance Chicago. Here we find the highest tax rate of all the principal cities of America; here the department store has attained its greatest development.

From my standpoint, when viewed in connection with the community as a whole, the department store is a dissolution to which the laws of evolution apply precisely as they do to a cancer. It has for its cause the ability of the owner to escape the progressively increasing burden of state. This is effected by making the business so large and complicated as to be beyond the comprehension of the average assessor. The small dealer has no such refuge. The public patronize his rivals in order to obtain untaxed goods. "Only this and nothing more."

The cure is obvious. Remove all tax from personal property (at least), thus giving the small dealer a free field and fair play. This is all "wise legislation" can or should do for him.

S. L. Beeler.
Hamilton, Ohio, July 20, 1897.