A change came when improvements in transportation, the highway and later the canal, had widened the area of competition among masters. As a first step, the master began to produce commodities in advance of the demand, laying up a stock of goods for the retail trade. The result was that his bargaining capacity over the consumer was lessened and so prices eventually had to be reduced, and with them also wages. The next step was even more serious. Having succeeded in his retail business, the master began to covet a still larger market,--the wholesale market. However, the competition in this wider market was much keener than it had been in the custom-order or even in the retail market. It was inevitable that both prices and wages should suffer in the process. The master, of course, could recoup himself by lowering the quality of the product, but when he did that he lost a telling argument in bargaining with the consumer or the retail merchant. Another result of this new way of conducting the business was that an increased amount of capital was now required for continuous operation, both in raw material and in credits extended to distant buyers. The next phase in the evolution of the market rendered the separation of the journeymen into a class by themselves even sharper as well as more permanent. The market had grown to such dimensions that only a specialist in marketing and credit could succeed in business, namely, the "merchant-capitalist." The latter now interposed himself permanently between "producer" and consumer and by his control of the market assumed a commanding position. The merchant-capitalist ran his business upon the principle of a large turn-over and a small profit per unit of product, which, of course, made his income highly speculative. He was accordingly interested primarily in low production and labor costs. To depress the wage levels he tapped new and cheaper sources of labor supply, in prison labor, low wage country-town labor, woman and child labor; and set them up as competitive menaces to the workers in the trade. The merchant-capitalist system forced still another disadvantage upon the wage earner by splitting up crafts into separate operations and tapping lower levels of skill. In the merchant-capitalist period we find the "team work" and "task" system. The "team" was composed of several workers: a highly skilled journeyman was in charge, but the other members possessed varying degrees of skill down to the practically unskilled "finisher." The team was generally paid a lump wage, which was divided by an understanding among the members. With all that the merchant-capitalist took no appreciable part in the productive process. His equipment consisted of a warehouse where the raw material was cut up and given out to be worked up by small contractors, to be worked up in small shops with a few journeymen and apprentices, or else by the journeyman at his home,--all being paid by the piece. This was the