In connection with this subject of cutting, the following interview of an Era reporter with Mr. Alexander Hudnut, the proprietor of the great cut rate store of Hegeman & Co., New York, will be read with interest. Mr. Hudnut said:--
The rebate plan, or any other system of artificial bolstering, is as futile as it would be to try and dam Niagara. Legislation on the subject is unnecessary and superfluous. The matter carries its own death warrant with it.
Some six years ago the drug trade got together and formed a most beautiful plan for maintaining prices. Where is that beautiful plan now? The rebate system is probably its legitimate offspring. Come to me some years hence and I expect to be able to point to a string of lineal descendants of the rebate plan, each of them as helpless to perform what is expected as the other. The world ought to be wise enough by this time to recognize the fixity of the laws which govern commerce.
I regard the principle of cutting as a settled policy in the drug business, and I shall pursue that steadily. Hegemann & Co. have done a business of about $325,000 annually. I expect to increase it to half a million dollars. In London the immense stores of the Army & Navy, and of the Civil Service have worked a revolution in the drug trade, by buying at first hands in immense quantities, and selling on close margin. They have even cut the rates on prescription business. The result has been that the chemists, as they call them there, have been compelled to come down in their prices, and a process of elimination has steadily gone on--the weak have had to go to the wall. The result is the “survival of the fittest.” These conditions apply to New York, and I venture to say that there are not over ten drug stores in the city of New York that are making their owners more than a living. With the rest it is simply a process of more or less rapid rusting out.
An absence of cut prices, and general prosperity marks the retail drug trade of Cleveland. The Cleveland Pharmaceutical Association is clannish and its dues are so moderate that almost the entire trade is within the Association. This gives rise to a brotherly feeling which makes doing business a pleasure; and prevents cuts and insures prosperity. The drug trade in many cities suffers from wholesale slashing of prices from the lack of such an Association as exists in Cleveland. The Association is thoroughly organized, and the two wholesale houses in Cleveland do everything in their power to help the retail trade along, and decline to sell at retail in