REAPPEARANCE OF THE ITINERANT MERCHANT

ITINERANT MERCHANTS and traveling peddlers were a normal and accepted feature of our early American economic organization. But as means of transportation improved and, especially, as the railroad became the customary means of land transportation over appreciable distances, the business of buying and selling became predominately a sedentary occupation.

In recent years, however, with the advent of inexpensive motor vehicles and improved roads, the itinerant merchant has reappeared. Especially in the marketing of agricultural goods, but in other fields as well, during the past decade he has reestablished himself as a significant part of our marketing system.

Modern itinerant merchants are of many kinds and perform their varying functions in so many different ways that they are difficult to describe or to classify in satisfactory categories. In general, they buy produce from growers, dealers, or other truckers. Sometimes they produce the product themselves. They are then often called grower- or farmer-truckers. In most cases they haul the goods in their own trucks and sell it in established markets. The merchant-trucker1 often disposes of his produce on a farmers' market. But he may sell it himself either by parking his truck and selling to customers who come to him or by driving

1 The terms "itinerant merchant" and "merchant-trucker" are used interchangeably. Of course there are still a few itinerant merchants who travel by foot or by vehicles other than trucks.

from house to house hawking his wares. In this latter case he is often called a "trucker-peddler." Frequently the business of being a merchanttrucker is a part-time, occasional, or seasonal occupation. A farmer may become a merchant-trucker for a few days or weeks in order to sell his own produce or his neighbor's. Contract truckers who operate for regular shippers or wholesalers occasionally haul for themselves and buy and sell at their own risk. In such cases they become, temporarily, at least, merchant-truckers. Thus in many parts of the country livestock dealers have become regular merchant-truckers traveling from farm to farm to buy livestock and to transport it often to distant markets, in other lines, such as eggs, poultry, grain, and fresh fruits and vegetables, the merchant-trucker has often become a regular full-time operator.

In making his reappearance as an important factor in our marketing system, the itinerant merchant has disturbed existing institutions. Established agencies, producers, wholesalers, jobbers, retailers, common carriers, municipal markets, as well as other elements in our complex marketing structure, have had to accommodate themselves to this new factor in the marketing of commodities. This process of readjustment has not been easy, nor are all the problems yet solved. But in an attempt to deal with the situation, States and their subdivisions have already provided a great deal of regulation.

Our main concern here is to study this new

legislation from the standpoint of the barriers it has raised to commerce both within and between States. Having examined these barriers, the question must be raised as to whether they are necessary and desirable despite the interference they may cause to the free flow of commodities.

RESTRAINTS ON MERCHANT-TRUCKERS BY STATES AND LOCALITIES

An exhaustive study of State and local legislation regulating merchant-truckers is greatly needed but was not possible in connection with this investigation. Here we have done no more than sample the great mass of existing legislation, giving particular attention to those statutes that appear to be in any way restrictive to interstate or local commerce. It should be borne in mind that these laws place barriers on commerce in the sense that they are restrictive to the free movement of goods by merchanttruckers. Like other restrictions, they may or may not be justifiable, but an evaluation is deferred to pages 65-67 of this report. We shall first take up certain general provisions of these laws, reserving for later treatment the matter of exemptions and preferential treatment to certain groups.

In many States and cities each merchanttrucker is required to take out a license 2 and to post a bond. This is generally deemed necessary for purposes of regulation and taxation and to protect the public from fraud and dishonesty. In a few jurisdictions no license or bond is required; in others the fees are nominal or at least not so high as to be a heavy burden. In most localities a fee must be paid not only to the State but also to the municipality and possibly to other authorities such as the county. In addition, the regular motor-vehicle registration fees must be paid, and it should be borne in mind that the merchant-trucker is one of those especially burdened by State registration requirements on out-of-State trucks.

The fact that the merchant-trucker must secure a license to do business as a merchant-trucker for each vehicle he uses may lead to some confusion of terms. Where the term "license" is used in this discussion, it refers to the license to do business; where reference is made to the regular requirements on all trucks that they be licensed or registered, the term "registration" is used in this section.

The cost of a license to do business as a merchant-trucker varies considerably from State to State. Thus in Nebraska, the State fees are relatively moderate. On each vehicle he uses in his business a merchant-trucker must pay an annual license fee of $25 plus an occupation tax of $10. Moreover he must file an indemnity bond of $250. In Montana, the rates are much higher-$100 for the annual license fee ($50 for each additional truck), and a bond of at least $1,000 must be posted.

Some States require that a license fee must be paid in each county in which the merchanttrucker operates. West Virginia requires a license in each county but varies the amount of the fee with the capacity of the truck. For trucks of not more than 2-ton capacity the license fee in each county is $15 and the charge is graduated steeply upward for heavier vehicles. Thus the itinerant merchant whose truck has a capacity of between 3 and 4 tons must pay $250 annually in each county in which he does business. In Idaho and Washington the merchanttrucker pays a flat rate, $300 in each county. In addition, he must make a cash deposit of $500 with the county treasurer.

Most States also permit various subdivisions of the State to require licenses and to make such regulations for the itinerant merchant as they may wish. In many places the rates are merely nominal. On the other hand many instances have been brought to our attention of rates so high as to be seriously restrictive or even prohibitive. Although some cities provide for short-time licenses, a great many require that an itinerant merchant must pay the annual fee even if he wishes to operate in a given area for only a few days. Annual license rates of from $25 to $100 are very common, but rates of $200 or even higher are assessed by many cities. Thus Denver, Omaha,3 Pittsburgh, Mobile, Baltimore, Cleveland, and St. Louis are among those fixing the rate of $200. A considerable number are even higher. Thus the annual fee in Louisville, Ky., is $250 and in Fort Wayne, Ind., $300. Many cities also require the posting of bonds. Both Pittsburgh and St. Louis, Applies only to itinerant wholesale fruit and vegetable peddlers.

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whose requirements are mong the highest, exact a $1,000 bond. Fort Wayne, in addition to the $300 license fee, requires a deposit of $300 in cash or a surety bond of $500.

In some cities the amount of the annual license fee required of itinerant merchants is twice or more than twice that required of established merchants. For example, in Mobile the license to do business as a wholesale produce dealer of the first class costs $92.50; as a wholesale produce dealer of the second class, $67.50; as an itinerant wholesale produce dealer, $200. In Louisville the established dealer must pay $100, in contrast to the $250 required from the itinerant merchant.

From these very high rates it is, of course, but one step further simply to outlaw all itinerant merchants. So far as we know, this has not been done, but some cities have forbidden hawking or peddling from door to door. Thus the city of Petoskey, Mich., forbids "the practice of going in and upon private residences" by peddlers or itinerant merchants without invitation from the occupants, for the purpose of soliciting orders or selling goods.

In some cases where the license fees and regulations applying to merchant-truckers are very heavy the merchant-truckers have rented rooms or stores for a few days or weeks in order to set themselves up as regular retailers and so avoid high license fees. Apparently to prevent this practice as well as to regulate or discourage other temporary dealers and tradesmen, a number of cities have passed ordinances placing a high license fee and other requirements on "itinerant venders." Such "itinerant venders" are usually described as those who conduct a temporary or transient business with the intention of continuing it not more than 120 days and who for that purpose occupy a room or building to exhibit and sell their merchandise.

Grand Rapids, Mich., places a license fee of from $50 to $100 per month or fraction thereof on all such "itinerant venders." St. Louis, Mo., assesses $25 a day, and in Youngstown, Ohio, the rate is $150 a day.

At least two States-South Carolina and Virginia-have also enacted legislation of this

type. Any person "not being a regular retail merchant" in the State, who displays merchandise for retail sale in a hotel room (or in any room, in South Carolina) or in a house, rented or occupied temporarily, is required by this legislation to pay an annual privilege tax of $250.

In addition to the license and bond requirements, the itinerant merchant may find rules and regulations that are very difficult to meet. In some areas elaborate records must be kept of purchases and sales. Identification cards, special license plates, photographs, and special lettering on the truck are often required. Moreover the process of securing a license may require the filling out of elaborate blanks, it may be necessary under the law for the merchanttrucker to establish the fact he is of good moral character, and finally in some jurisdictions (for instance, Lima, Ohio) he must give names of at least two citizens of the community who can testify to his character. Both of the last two requirements might easily be used by local officials to bar strangers from engaging in the business of itinerant merchant.

In some States and cities all wholesale dealers, itinerant as well as those having established places of business, have to pay a license fee. But the annual fees for the itinerant merchant are typically much higher than for others. Moreover, even where equal, they often fall with greater weight upon the itinerant merchant because his volume of business is ordinarily much less than that of the established merchant.

Of course, like so much other restrictive legislation, these laws are not always strictly enforced. In certain communities they have become a dead letter; in others enforcement is sporadic. But in many cases vigorous enforcement takes place, and, if fees are very high, itinerant merchants are practically kept off the roads. Not infrequently established merchants and real-estate groups are active in reporting offenders, promoting enforcement, and in warning itinerant merchants to keep away.*

4 See, for example, an advertisement sponsored by the North Side Business and Improvement Association of Kansas City, Mo., in The New York Packer, June 25, 1938, p. 11.

HANDICAPPING THE OUTSIDE DEALER

Peculiarly significant from the standpoint of this study are the provisions in these merchanttrucker laws which specifically give protection against outside competition to local farmers or dealers. With only rare exceptions State laws and local ordinances give special privileges to the grower-trucker. Usually he pays no license and is freed from all regulation, or he may be subjected to a nominal fee (as in Oregon) or required to have with him proof that he is a bona fide grower.

The laws of Kansas and West Virginia are typical in that they specify that the provisions of the law regarding the licensing and regulation of merchant-truckers shall not apply to farmers who are disposing of their own produce. Florida goes a step further and provides that no county or municipality shall require a license of the grower-dealer.

Most cities specifically exempt the grower. The following, taken from the ordinance of the city of Louisville, Ky., is typical:

"There is specifically exempted from this definition and ordinance any person who sells only produce raised or produced by him as owner, landlord, or tenant, provided he has, before offering any such produce for sale, obtained a Permit of Exemption. . . . Such permit shall be issued upon application and payment of fee of fifty cents

It should be emphasized that the effect of a provision like this is not to give an advantage to all growers but chiefly to those not far distant from the local market. Most growertruckers do not make long trips. Not only do they ordinarily find it inconvenient to be away from home for more than a short time but also their trucks are usually small and not adapted to long-distance hauling. Moreover, a single farmer may not have enough produce of his own to ship a full truck load at any given time. The difficulty that distant growers meet from this type of regulation is described in a letter received from an official in North Carolina. He writes in part:

"We run into . . . difficulty in this State, par

ticularly in the western part, in selling produce to Georgia and South Carolina towns. The Boards of aldermen from time to time set up regulations in regard to who shall sell produce in the towns without license. In many cases the license fee is rather high, especially to those hauling produce which they did not produce. For instance in Henderson County a few years ago every person taking their produce to certain South Carolina towns would have to have a certificate from the Register of Deeds stating that the produce offered for sale was produced on the bearer's individual farm and that they were not selling anyone's produce except that they had grown. This regulation was harmful to the producers in Henderson County for the simple reason that few of the growers produced in large enough quantities to own trucks to transport their material which could have been more easily handled by regular truckers, taking a load of produce from Henderson County to South Carolina and in turn bringing back products from that State to sell at the point from which they originally started."

The purpose of these grower exemptions is usually admittedly protective. Thus, a bulletin published by the Department of Agriculture of the State of Oregon says that one of the purposes of its Peddlers' Act is: "To give bona fide growers and farmers a financial advantage by permitting them to peddle retail and wholesale."

But home protection frequently does not stop with exemptions to growers. Some States require an additional license fee from the out-ofState merchant-trucker. The Indiana law says that the "traveling merchants who are not residents of this State" who "vend foreign merchandise" shall pay a special license fee in each county in which they operate. This fee is $5 if the capital employed does not exceed $1,000 and higher rates are provided for larger capitals.

The burdens to interstate commerce caused by motor-vehicle legislation, registration fees, size and weight restrictions, and port-of-entry legislation, all fall with peculiar weight upon the itinerant merchant. In fact, some of the See pp. 38-50.

most restrictive of these laws are sometimes defended for the very reason that they curtail the movements of the merchant-truckers.

Finally it may be noted that laws discriminating in favor of the in-State grower or dealer may give rise to retaliation by other States. Thus, it is now argued in Georgia that a license should be required of out-of-State itinerant truckers because neighboring States impose a license fee on such dealers from Georgia. In supporting this position, an article in the Georgia Market Bulletin says that Georgia is about the only Southern State in which selling by out-of-State trucks is practically free, and declares:

"It is most important that something along this line be done in our State and not have us as at present the dumping ground for all the surplus produce of surrounding States. For instance, were it not for the snap beans and tomatoes run in here from Tennessee, Alabama, and North and South Carolina our Georgia farmers would have received a fair price for their crop this summer instead of having to sell, in many instances, them below the cost of production."

Another example to be noted in connection with State retaliation is a Florida law which levies a license fee of $75 on persons who sell agricultural products, but which exempts Florida producers. This law, following the reciprocity provisions of certain State motor-vehicle legislation, provides that the exemption of Florida grower-dealers from the license shall be extended to grower-dealers of such other States as grant a similar exemption from their license fees to the grower-dealers of Florida."

PREFERENCE TO LOCAL INTERESTS IN FARMERS'

MARKETS

Along with the great increase in the use of the motortruck for marketing farm produce and the increasingly important place of the merchant-trucker, has come the rise of the farmers' market. In other days farm produce was largely shipped by rail to city terminals, from where it was distributed by wholesalers and commission

Aug. 1, 1938.

7 Laws of 1929, ch. 13875.

houses to the retail trade. Now increasing quantities are brought to the farmers' markets. Here middlemen still carry on some business, but to a large extent the produce is bought directly by independent retailers, chain stores, peddlers, and, where permitted, even by consumers. Sometimes these markets are privately owned but usually they are regulated and controlled by a public or quasi-public body. A major question that inevitably arises is whether these markets shall be open to all comers on an equal basis or whether preference shall be given to local growers or to dealers in local produce. Market regulations usually provide for at least some preference to local interests. Most common perhaps is the limiting of the facilities of the market to the grower-trucker, the farmer who is disposing of the produce which he, himself, has raised. The Columbus, Ohio, producers' market and the farmers' market in New Orleans may be cited as among the many markets having this requirement. Sometimes the produce of the nongrower is not completely excluded but a preferential treatment is given to the grower. Thus in the Los Angeles City Market preference in the assignment of stalls is given to local farmers and growers.

In a considerable number of markets trading is restricted to local products, thus keeping out the distant merchant-trucker and forcing outof-State farmers to market their produce through established middlemen or commission merchants. The trucker-dealer may operate in the Syracuse farmers' section of the regional market, but only if he sells produce grown in New York State. The Farmers' Market in Hartford, Conn., permits sale only of Connecticut produce, with the exception of onions from Massachusetts. Merchant-truckers selling out-of-State produce on the Marsh Market in Batlimore have to secure a special license at a cost of $200 annually.

Recently, most of the dealers in the Northern Ohio Food Terminal, Cleveland's centralized produce market, pledged themselves not to

In Columbus the grower may sell on the producers' market through an agent, provided he pays the agent on a flat salary basis and not on commission.