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12%5-7 - Baltimore, Md. Appeal
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Federal Reserve Bank of St. Louis
FEDERAL RESERVE BOARD FILE
I
BEFORE THE FEDERAL RESERVE BOARD.
IN THE MATTER OF THE
DESIGNATION OF THE FEDERAL RESERVE CITY
IN THE FIFTH FEDERAL RESERVE DISTRICT.
BRIEF ON BEHALF OF THE CITIZENS
OF BALTIMORE.
EDGAR H. GANS
AND
CHARLES MARKELL
(OF Gus & HAMAN),
Counsel for Regional Reserve Bank
Committee of Baltimore.
KING BROS., PRINTERS, 413 E. LEXINGTON ST., BALTO., MD.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
Regional Reserve Bank Committee
of Baltimore
BOARD OF TRADE
Rufus M. Gibbs and Henry F. Baker
MERCHANTS & MANUFACTURERS ASSOCIATION
Wm. B. Hurst and C. Wilbur Miller
CHAMBER OF COMMERCE
Charles England and John M. Dennis
CLEARING HOUSE ASSOCIATION
Waldo Newcomer and William Ingle
STOCK EXCHANGE
Harry A. Orrick, Eben Sutton and J. Wm. Middendorf
MARYLAND BANKERS' ASSOCIATION
Eugene Levering and Henry B. Wilcox
CREDIT MEN'S ASSOCIATION
Philip Hamburger, Jr., and E. Asbury Davis
LUMBER EXCHANGE
Theodore Mottu and John L. Alcock
SHOE AND LEATHER BOARD OF TRADE
William A. Dixon and Robert E. Tubman
CLOTHIERS' BOARD OF TRADE
S. B. Sonneborn and Samuel Rosenthal, Jr.
OLD TOWN MERCHANTS AND MANUFACTURERS ASSO.
Jacob W. Hook and J. W. Marshall
CANNED GOODS EXCHANGE
George N. Numsen and Edmund C. White
BUILDERS' EXCHANGE
F. S. Chavannes and Theodore Krug
BALTIMORE DRUG EXCHANGE
Parker Cook and A. E. Mealy
REAL ESTATE EXCHANGE
J. Henry Strohmeyer and Philip S. Morgan
DISTILLERS & WHOLESALE LIQUOR DEALERS ASSO.
Charles A. Webb and Thomas Wilson
ASSOCIATED BOARD OF FIRE UNDERWRITERS
John P. Lauber and Jesse B. Riggs
ASSOCIATED BOARDS OF TRADE OF MARYLAND
Wm. H. Fehsenfeld and Omer F. Hershey
EXECUTIVE COMMITTEE
Charles E. Falconer, President Merchants & Manufacturers
Association, Chairman.
Rufus M. Gibbs, President Board of Trade.
Eugene Blackford, President Chamber of Commerce.
Robert J. Beacham, Secretary.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
Citizens' Committee
Hon. James H. Preston,
Douglas H. Gordon.
Chairman. S. Davies Warfield.
Hon. Phillips Lee Goldsborough.
Van Lear Black.
F. J. LaMotte.
John T. Stone.
Albert H. Wehr.
Fred G. Boyce, Jr.
Dr. A. R. L. Dohme.
H. S. King.
Samuel Rosenthal.
E. G. Miller, Jr.
Charles A. Webb.
Michael Jenkins.
Asa B. Gardiner, Jr.
Edgar H. Gans.
W. W. Cloud.
Robert Crain.
Eugene Blackford.
Albert D.Graham.
H. A. Orrick.
Charles T. Crane.
F. A. Torsch.
Martin Meyerdirck.
S. F. Miller.
John B. Ramsay.
Ridgaway Merryman.
T. Rowland Thomas.
B. Howard Richards.
George Cator.
E. K. Pattison.
John M. Hood, Jr.
F. H. Gottlieb.
W.M. McCormick.
Charles H. Snow,Jr.
Capt. Isaac a Emerson.
W.H.Fehsenfeld.
W.E. Jones.
H,Findlay French.
Walter B.Brooks.
J. Barry Mahool.
James M. Easter.
Wm.B. Hurst
Gen. Henry M. Warfield.
E. Stanley Gary.
Waldo Newcomer.
Frank N. Hoen.
W.H. Morrow.
Franklin P. Cator.
Siegmund B. Sonneborn.
Randolph Barton.
Col. William A. Boykin.
Col. C. Wilbur Miller.
Thomas O'Neill.
W.C. Robinson.
Col. Jacob W.Hook.
E. J. Clark.
Charles H.Dickey.
Frank A. Furst.
D. C. Ammidon.
Clinton Summers.
E. Allen Lycett.
James L. Sellman.
Judge Morris A. Soper.
Charles H. Grasty.
Wm.C.Page.
Stuart Olivier.
Gen. James A. Gary.
James Cardinal Gibbons.
Henry F. Baker.
Rev. M.H. Lichliter.
Summerfield Baldwin.
Rev. Julius Hofmann.
Wm.H. Matthal.
Robert Garrett.
Jacob Epstein.
Gustavus Ober.
Gen. Wm.D. Gill.
T. Edward Hambleton.
George N. Numsen.
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Federal Reserve Bank of St. Louis
iv
CITIZENS' COMMITTEE—Continued.
Gen. A. C. Trippe.
Rignal W.Baldwin.
Layton F. Smith.
J. M.Dennis.
John H.Ferguson.
Gen. Felix Agnus.
Paul G.L. Hilken.
Right Rev. John Gardner Murray.
Rev. Alfred H. Barr.
Rev. H. A. Griesemer.
Wm.G.Baker,Jr.
J. S. Wilson, Jr.
John M.Nelson.
L. T. Appold.
Hon. Edwin Warfleld.
John R. Bland.
L. SI: Zimmerman.
E. L. Norton.
George Blackiston.
J. J. Nelligan.
Omer F. Hershey.
Edwin G. Baetjer.
Randolph Barton, Jr.
James R. Wheeler.
Col. Henry B. Wilcox.
Wm.Ingle.
Douglas H.Thomas.
Eugene Levering.
E. A. Heinz.
C. C. Homer.
Alexander Brown.
George W.Albaugh.
Westminster, Md.
Charles England.
F. de Sales Mudd.
W.B. Copper.
Chestertown, Md.
Orlando Harrison.
Berlin, Md.
Martin Higgins.
Easton, Md.
Will. T. Warburton.
Elkton, Md.
Arthur P. Gorman.
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Federal Reserve Bank of St. Louis
Allen Farquhar.
Sandy Springs, Md.
ii. Brent Keyser.
Joseph D. Baker.
Frederick, Md.
Hon. James McC. Trippe.
Robert B. Dixon.
Easton, Md.
F. W. Ansi'.
Hagerstown, Md.
Shnon Dalsheitner.
Henry Keidel.
A. A. Brager.
Jas. Carey Martien.
Charles E. Ford.
John M.Littig.
Charles E. Rieman.
Owen Daly.
W. McCulloh Brown.
Blanchard Randall.
Hon. Thomas Parran.
St. Leonard, Calvert Co., Md.
Charles V. Hayden.
Leonardtown, Md.
Hon. J. Frank Harper.
Centreville, Md.
George W. Woolford.
Cambridge, Md.
Wm.B. Spiva.
Princess Anne, Md.
Hon. Murray Vandiver.
Annapolis, Md.
Z. Enos Ray,Jr.
Wm.A. House.
W.H.Pierce.
Hon. Jesse D.Price.
Salisbury, Md.
Hon.Carville D. Benson.
Hon. George L. Wellington.
Cumberland, Md.
Benj. W.Corkran, Jr.
George L. Irvin.
David Hutzler.
Ell Oppenheim.
Walter Hopkins.
SYNOPSIS OF BRIEF.
PAGE
INTRODUCTORY STATEMENT.
I.
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Federal Reserve Bank of St. Louis
(a) Baltimore is the natural commercial,
financial and industrial capital of the
Fifth District, the point at which and to
which business in the Fifth District normally converges, and is in every essential
respect, so far as commerce, finance and
industry in the District are concerned,
about five times as important as Richmond
Manufactures
Agriculture
Jobbing
Transportation—Railroads.
—Boat Lines.
Shipping.
Mining
Fisheries
Foreign Commerce
Banking
Economic Development. .
Government recognition of Baltimore
as a financial center.
General
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(b) A due regard to the convenience and customary course of business, within the contemplation of the Federal Reserve Act,
means a due regard to the convenience
and customary course of all business,
commercial, financial and industrial, and
requires that the natural commercial capital of a District be designated as the
Federal Reserve City in such District.. 27
vi
SYNOPSIS OF BRIEF—Continued.
PAGE
I F. BALTIMORE IS GEOGRAPHICALLY THE NATURAL
LOCATION FOR THE FEDERAL RESERVE BANK OF
THE FIFTH DISTRICT...
41
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Federal Reserve Bank of St. Louis
(a) The customary course of business in the
Fifth District is towards the north and
towards the coast, i. e., towards Baltimore
as the largest, most important, and also
the most northern, seaport in the Fifth
District, and the point towards which
commercial payments, liquidation of business transactions and exchange normally
move
41
(b) Baltimore, though near the northern end
of the District, is accessible to all parts
of the District, and is within seventeen
hours by mail of practically every city in
the District, so that business transacted
by mail from any part of the District
can be consummated on the next business
day after it is begun. Richmond is farther distant than Baltimore from the
most distant city in the District
50
c
(
) Baltimore,
though farther from the geometrical center of the District than Richmond, is at the center of greatest density
of population and business in the District, and is, therefore, nearer than Richmond to the greater volume of the business transacted in the District, and to the
greater part of the banking capital and
resources of the District, and is directly
in the course of all business, near or distant; Richmond is not only more distant
from most of the business in the District,
but is out of the general course of such
business
54
SYNOPSIS OF BRIEF—Continued.
vii
PAGE
III. BALTIMORE IS NOT ONLY THE NATURAL CAPITAL
OF BUSINESS GENERALLY IN THE FIFTH DISTRICT,
BUT IS ALSO THE NATURAL CENTER OF BUSINESS
ACTIVITIES HAVING SPECIAL RELATION TO THE
BUSINESS OF FEDERAL RESERVE BANKS
60
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Federal Reserve Bank of St. Louis
(a) Baltimore is a natural reserve city Richmond, in the banking world, is a country
town and the location of country banks... 60
(b) Baltimore is not only the principal banking center in the District, but is also the
center of the greatest volume of commercial credits extending through the District. In these two respects it presents
the largest opportunities in the District
for the development of the rediscounting
business of the new Federal Reserve
Bank
66
(c) As the principal Atlantic seaport of the
South, with direct and easy means of
communication by land with New York,
Philadelphia, Chicago, Boston, Cleveland,
and generally au other Federal Reserve
Cities, Baltimore is the natural location
of the Federal Reserve Bank for the
Fifth District, if such bank is successfully to perform its broadest, and in times
of stress most important, functions in (1)
keeping in close touch with and influencing general money and credit conditions
(2) co-operating with the other Federal
Reserve Banks for these purposes, and
also in developing the collection facilities
of the new system and making possible practically free domestic exchange
throughout the United States;(3) in successfully competing in the market for the
purchase and sale of foreign exchange,
with the control over general market conditions resulting from the establishment
viii
SYNOPSIS OF BRIEF—Concluded.
PAGE
of such a business; in developing the use
and sale of American acceptances, with
consequent increased facilities for the development of American foreign trade;
and generally in developing, and aiding
the development of, foreign connections
of the Reserve Bank and of the member
banks in the District.
69
IV. MISCELLANEOUS
National Banks and Other Banks.
The Per Capita Theory
States and Cities .
Loans in the South
Poll of Banks.
Inconsistency of Committee's Reasoning
in Fourth and Fifth Districts
Increase
Branch Theory
Effect of Actual Establishment of Bank
at Richmond
Conclusion
94
101
APPENDIX A
105
APPENDIX B
121
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78
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BEFORE THE FEDERAL RESERVE BOARD.
IN THE MATTER OF THE
DESIGNATION OF THE FEDERAL RESERVE CITY IN THE
FIFTH FEDERAL RESERVE
DISTRICT.
BRIEF ON BEHALF OF THE CITIZENS
OF BALTIMORE.
Section 2 of the Federal Reserve Act provides that the
Reserve Bank Organization Committee "shall designate not
less than eight nor more than twelve cities to be known as
Federal Reserve Cities, and shall divide the Continental
United States, excluding Alaska, into districts, each district
to contain only one of such Federal Reserve cities. * *
Provided, that the districts shall be apportioned with due
regard to the convenience and customary course of business,
and shall not necessarily be co-terminous with any State or
States." The determination of the Organization Committee
is subject to review by the Federal Reserve Board.
The Organization Committee designated Richmond, Virginia, as the Federal Reserve city in the Fifth Federal Reserve District, to comprise the States of Maryland, Virginia,
North and South Carolina, the District of Columbia, and the
State of West Virginia, except the four "Panhandle Counties." The most important step in apportioning the districts—the first step mentioned in the Act--is the designation of the reserve cities. In this feature of the apportionment of the Fifth Reserve District, the Committee disregarded the convenience and attempted to reverse the customary course of business.
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Federal Reserve Bank of St. Louis
2
For each and all of the following reasons we submit that
a due regard to the convenience and customary course of business requires that Baltimore be designated as the Federal
Reserve City in the Fifth Federal Reserve District:
I. (a) Baltimore is the natural commercial, financial and
industrial capital of the Fifth District, the point at which
and to which business in the Fifth District normally converges, and is in every essential respect, so far as commerce,
finance and industry in the District are concerned, about
five times as important as Richmond.
(b) A due regard to the convenience and customary course
of business, within the contemplation of the Federal Reserve
Act, means a due regard to the convenience and customary
course of all business, commercial, financial and industrial,
and requires that the natural commercial capital of a district
be designated as the Federal Reserve city in such district.
II. Baltimore is geographically the natural location for
the Federal Reserve Bank of the Fifth District:
(a) The customary course of business in the Fifth District is towards the north and towards the coast, i. e., towards
Baltimore as the largest, most important, and also the most
northern, seaport in the Fifth District, and the point towards which commercial payments, liquidation of business
transactions and exchange normally move.
(b) Baltimore, though near the northern end of the District, is accessible to all parts of the District, and is within
seventeen hours by mail of practically every city in the District, so that business transacted with Baltimore by mail
from any part of the District can be consummated on the
next business day after it is begun. Richmond is farther
distant than Baltimore from the most distant city in the
District
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Federal Reserve Bank of St. Louis
3
(c) Baltimore, though farther from the geometrical center
of the District than Richmond, is at the center of greatest
density of population and business in the District, and is,
therefore, nearer than Richmond to the greater volume of the
business transacted in the District, and to the greater part of
the banking capital and resources of the District, and is directly in the course of all business, near or distant; Richmond
is not only more distant from most of the business in the District, but is out of the general course of such business.
III. Baltimore is not only the natural capital of business
generally in the Fifth District, but is also the natural center
of business activities having special relation to the business
of Federal Reserve Banks.
(a) Baltimore is a natural reserve city; Richmond, in the
banking world, is a country town and the location of country
banks.
(h) Baltimore is not only the principal banking center in
the District, but is also the center of the greatest volume of
commercial credits extending through the District. In these
two respects it presents the largest opportunities in the District for the development of the rediscounting business of
the new Federal Reserve Bank.
(c) As the principal Atlantic seaport of the South, with
direct and easy means of communication by land with New
York, Philadelphia, Chicago, Boston, Cleveland, and generally all other Federal Reserve cities, Baltimore is the natural location of the Federal Reserve Bank for the Fifth District, if such bank is successfully to perform its broadest, and
in times of stress most important, functions in (1) keeping
in close touch with and influencing general money and credit
conditions; (2) co-operating with the other Federal Reserve
Banks for these purposes and also in developing the calico-
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Federal Reserve Bank of St. Louis
4
tion facilities of the new system and making possible practically free domestic exchange throughout the United States;
(3) in successfully competing in the market for the purchase
and sale of foreign exchange, with the control over general
market conditions resulting from the establishment of such a
business; in developing the use and sale of American acceptances, with consequent increased facilities for the development of American foreign trade; and generally in developing, and aiding the development of, foreign connections of the
Reserve Bank and of the member banks in the District.
I.
(a) BALTIMORE IS THE NATURAL COMMERCIAL, FINANCIAL
AND INDUSTRIAL CAPITAL OF THE FIFTH DISTRICT, THE
POINT AT WHICH AND TO WHICH BUSINESS IN THE
FIFTH DISTRICT NORMALLY CONVERGES, AND IS IN
EVERY ESSENTIAL RESPECT, SO FAR AS COMMERCE,
FINANCE AND INDUSTRY IN THE DISTRICT ARE CONCERNED, ABOUT FIVE TIMES AS IMPORTANT AS RICHMOND.
The population of Baltimore (Census 1910) was 558,485;
that of Richmond 127,628 The figures for Richmond include Manchester, which was annexed to Richmond just
before the last census. The figures for Baltimore include
none of the thickly populated suburbs of Baltimore, a large
part of which is commercially and in every respect, except
legally, a part of Baltimore City. The population of the
Baltimore Metropolitan District (as defined in the United
States Census for 1910) was 658,715.
The City having the largest population in a District should,
other things being equal, be designated as the Federal Reserve
city of that District. This stands to reason. Large popula-
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Federal Reserve Bank of St. Louis
5
tion in a limited area, such as a city, always means large
trade and business, and necessitates bank facilities. Whether
the large trade follows upon the large population, or the large
population is brought about by a large and growing trade,
makes no difference. They are found together, mutually
interact on each other, and both are affected by geographical
location favorable to the development of the trade, whether
domestic or domestic and foreign.
This clear and evident principle was recognized by the
Committee as a matter of course in the location of most of
the other cities, but was abandoned without reason in the case
of Baltimore.
Thus the Committee say in their published report of their
decision designating reserve cities (page 24)
:
"The Committee named as cities for the location of
Federal reserve banks New York, Chicago, Philadelphia, St. Louis, Boston and Cleveland. In population
these are the six largest cities in the United States. Their
geographical situation and all other considerations fully
justified their selection."
Baltimore is the seventh largest city in the United States,
considering strictly only its population as included within
present city limits, amounting to 558,485 (only 2,178 lees
than the sixth city, Cleveland, which has a much greater
area). If you consider, in addition, Baltimore's densely
populated suburbs (within the Metropolitan District), continuously built up from the city, the total population would
be 658,715 (that of the Cleveland Metropolitan District being 613,270).
Richmond has a population of 127,628, and is the thirtyninth largest city in the country. The Committee, therefore, after giving regional banks to the six largest cities, suddenly balks and stops at the seventh largest city in favor of
the thirty-ninth largest city, even passing over Washington,
which is the sixteenth largest city, with a population of
331,069.
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Federal Reserve Bank of St. Louis
6
In tabulated form the comparison shows as follows:
Baltimore—Population 558,485—Seventh largest city.
Washington—Population 331,069—Sixteenth largest city.
Richmond —Population 127,628—Thirty-ninth largest city.
The Committee also say, referring to the population of the
six largest cities, "their geographical situation and all other
considerations fully justified their selection."
It would seem that the thirty-ninth largest city, with a
population of 127,628, would have to show commanding advantage in geographical and other considerations to secure a
designation for a regional bank over the seventh largest city,
with a population of 558,485.
As a plain and simple matter of fact, all these advantages
are in favor of Baltimore and against Richmond, as will be
shown in detail in this brief. Thus the designation of Richmond over Baltimore is not only contrary to the principles
of the new Banking law, but is so strange and unaccountable
as to have aroused a general adverse criticism of the action
of the Committee.
How practical and compelling is this relation between the
largest population in a restricted area, like a city, and volume
of trade is shown by the action of the committee. They
designated twelve cities, and out of these twelve, ten cities
have the largest population in their respective districts, and
of all the twelve there are only two exceptions, to wit, Baltimore and New Orleans, from both of which come vigorous
protests. (The difference between Dallas and San Antonio
is too small to make a real exception). -Why should they
be singled out and passed by, against the common rule
adopted by the Committee itself? Both are important seaports, and in all other respects furnish the best locations in
their respective districts (or, in case of New Orleans, a differently apportioned district) for regional banks.
The assessed valuation, for the purposes of taxation, of
property in Baltimore City in 1914 is $781,691,094; the
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Federal Reserve Bank of St. Louis
7
present assessed valuation of property in Richmond is $148,768,790 (World Almanac, 1911, pages 686, 687).
In business done Baltimore and Richmond compare about
as they do in population and in value of property. Necessarily, with respect to many kinds of business there are
available no such precise figures as exist with respect to
population and value of property. The figures which do
exist show substantially the same relation between the two
cities. The fact is generally recognized even where precise
figures are not obtainable.
MANUFACTURES.
Manufactures constitute one of the largest and most important fields of business activity, and also one of those for
which the most complete figures are available. As shown
by the 1910 census, the City of Baltimore had 2502 manufacturing establishments; the Baltimore Metropolitan District had 2668 such establishments; Richmond, 380. The
amount of capital employed in these establishments in Baltimore City was $164,436,758; in the Baltimore Metropolitan
District, $199,735,181; in Richmond, $31,659,687. The
total value of the manufactured products in Baltimore City
was $186,977,710; in Baltimore Metropolitan District, $260,213,324; in Richmond, $47,357,985. The number of wage
earners employed in these establishments was 71,444 in Baltimore City; 81,825 in Baltimore Metropolitan District, and
14,849 in Richmond.
Baltimore is the leading city in the United States in the
manufacture of men's clothing, copper, tin and sheet iron
products, fertilizers, cotton duck, straw hats and in canning
and preserving. The value of clothing manufactured in Baltimore (Metropolitan District) in 1909 was over $40,000,000, almost as much as the total value of all manufactured
products in Richmond for that year. The total value of
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Federal Reserve Bank of St. Louis
8
clothing, plus any one of eight other classes of manufactures
in Baltimore, exceeds the total of all manufactures in Richmond. The value of clothing manufactured in. Baltimore
in 1909 showed an increase of 73.9% over the same product
in 1899. For copper, tin and sheet iron products the increase during the same period was 141.9%. For slaughtering and meat packing the increase was 110.8%. The total
value of the products of the two last mentioned classes in
1909 was over $28,000,000.
Manufactures in Baltimore are not only much greater in
amount, but also much more diversified than in Richmond.
Tobacco comprised over 43% of the total value of manufactured products in Richmond for the year 1909. Clothing, the largest single item in Baltimore, comprised but 15%
of the Baltimore total—though almost twice the amount of
the tobacco products in Richmond. Seventeen classes of
manufactured products in Baltimore for the year 1909
amounted to more than $2,000,000 each; in Richmond but
two classes (one of which was tobacco) reached that amount.
For some months the Industrial Survey of Baltimore has
been at work on a thorough survey of the present condition
of each of the industries of Baltimore. This survey, when
completed, will present an accurate, comprehensive, detailed
view, based on an actual personal canvass of the entire city
(and Metropolitan District), of Baltimore's industries. The
report of the Industrial Survey has not yet been published,
but much of the work has been completed. The Industrial
Survey finds the total value of the products manufactured
in Baltimore (Metropolitan District) during the year 1913
to be $353,319,086. This is an increase of $93,105,76235.7%—over the Census figures for 1909.
AGRICULTURE.
Agriculture is obviously a most important business in the
Fifth District. The close relations between Baltimore and
the agricultural interests of the Fifth District are illustrated
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Federal Reserve Bank of St. Louis
9
by the size of the fertilizer business. The value of fertilizers
manufactured in Baltimore during the year 1909 was (1910
Census), $8,469,856, an increase of 117.4% over the figures
for 1899. The value of Richmond's output in 1909 was less
than $500,000. Baltimore had sixteen fertilizer manufacturing plants. Richmond had two.
, During the calendar year 1913 there was imported at the
Port of Baltimore (as the records of the Collector of the
Port show) fertilizers and fertilizer material amounting to
$8,032,195.
The Industrial Survey finds the total value of acids and
fdrtilizers manufactured in Baltimore in 1913 to be $15,46,306, an increase of $7,506,450-88.6%—over the Census figures for 1909. The Industrial Survey finds that about
60% of these products go to the South and that the increase
in the business is almost wholly in the South.
Dealing in live stock is also a business closely associated
with agriculture. The volume of this business in Baltimore
is almost ten times the volume of the business in Richmond.
The amount and value of live stock received in Baltimore
and Richmond respectively during the year 1913 were as
follows (figures obtained by Mr. S. Greenwald, Secretary
of the Greenwald Packing Company, from officials of the
Baltimore and Richmond Stock Yards):
Number
Value.
RichBaltiRich-Baltimond.
more.
mond.
more.
Cattle.. 17,223 129,425 $1,515,624.00 $11,389,400.00
Calves.. 2,800
19,889
38,220.00
271,484.85
1,203,619.50
11,939,224.50
Hogs... 89,157 884,387
Sheep.. 12,579 375,582
90,568.80
2,704,190.40
1,455
Horses..
291,000.00
848
Mules...
212,000.00
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Federal Reserve Bank of St. Louis
$2,848,032.30 $26,807,299.75
10
One-third of the cattle and sheep handled in Baltimore
come from Virginia and West Virginia.
JOBBING.
As a center of the jobbing trade, Baltimore is recognized
as one of the principal cities in the United States. The leading items in the Baltimore jobbing trade are dry goods, notions, millinery, groceries, food products, lumber and:
mill-work, drugs and tobacco, all of which are steadily
growing. The Industrial Survey finds the total amount of
the jobbing trade in Baltimore during the year 1913 to 1 .o
r
$235,685,290. These figures do not include retail business
or purchases, but are limited to sales by jobbing houses alone.
Among the items, as classified by the Industrial Survey,
are the following:
Cottons and Prints
$24,527,940
Boots and Shoes
9,671,122
Millinery and Lace
9,151,811
Hosiery & Knit Goods(including Notions) 5,597,000
Preserved and Canned Foods......
15,883,269
Cereals, Spices, Teas and Coffee
15,382,000
Lumber and Mill-Work
11,164,000
Drugs and Preparations
3,338,762
Spirituous Liquors
25,785,658
Tobacco. .
6,605,633
Of the total of $235,685,290, sales outside of Baltimore
amounted to $162,203,340.
The trend of distribution, by States, of the products of
Baltimore manufacturers and the goods of Baltimore
jobbers, is indicated, probably as nearly as is possible,
by a
memorandum, filed as Exhibit No. 15 with the brief
filed
for Baltimore with the Organization Committee, showin
g
the results (necessarily incomplete) of a special canvass
by
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11
mail among the manufacturers and jobbers in Baltimore
City, and of returns made by one hundred and eighty-four
manufacturers and jobbers, who had distributed, in the year
1913, business aggregating over $135,000,000 (constituting,
as the Industrial Survey has since shown, about 23% of the
total distribution of manufacturers and jobbers in Baltimore, and a smaller fraction of the total number of manufacturers and jobbers). [This canvass was not made by the
Industrial Survey, and the figures in this brief quoted from
the Industrial Survey had not been ascertained when the
Baltimore brief was filed with the Organization Committee.]
That memorandum [Exhibit No. 15] shows (out of $111,666,000 of goods distributed by one hundred and thirty-two
manufacturers and jobbers in the year 1913), $27,414,000,
i. e., 24.55%, distributed in Maryland; $51,503,000, i. e.,
46.12%, distributed in Virginia, West Virginia, the District of Columbia, North and South Carolina; making a total
of $88,917,000, i. e., 70.67%, distributed in the Fifth District (plus the "Panhandle" counties of West Virginia);
$11,836,000, i. e., 10.60%, in Georgia, Florida and Alabama, and $20,913,000, i. e., 18.72%, elsewhere.
It thus appears that over seventy per cent of the products
of Baltimore manufacturers and the goods of Baltimore jobbers are distributed in the Fifth District, another ten per
cent go farther south, and less than nineteen per cent elsewhere. That is to say, Baltimore not only does a much larger
business than any other city in the Fifth District, but does
most of this business in the Fifth District,—the boundaries
of which to a remarkable extent coincide with the boundaries
of the field of Baltimore's commercial predominance. The
magnitude, as well as the geographical extent, of Baltimore's
jobbing trade is illustrated by the fact that Mr. Jacob Epstein
alone carries 75,000 accounts throughout the South, and
John E. Hurst and Company carry 10,000 such accounts.
As we shall hereafter have occasion to point out, these ac-
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12
counts represent not only business done, but also credit furnished from Baltimore to the South, principally in the Fifth
District.
In the brief filed for Richmond, it is said that Richmond's
jobbing business is $80,000,000. No explanation is given of
how these figures are arrived at. To a considerable extent
the principal branches of the Baltimore jobbing trade are the
same or similar to the principal manufacturers, e. g., clothing,
food products, drugs and tobacco. It is fair to suppose that
the ratio between Baltimore's jobbing business and that of
Richmond is not greatly different from the ratio betwee
n
their respective manufactures.
TRANSPORTATION—RAILROADS.
The facts are so well known that it is hardly necessary to
mention the respective transportation facilities of Baltim
ore
and Richmond. The three North and South trunk
lines
through Richmond all run through Baltimore. Baltim
ore
also has the three western trunk lines, the Pennsylvania,
the
Baltimore & Ohio, and the Western Maryland (whic
h connects with the New York Central System, and of which
Baltimore is the terminus). Through its connection with
the
Pennsylvania and the Southern, the Chesapeake and
Ohio
also runs direct trains through Baltimore. Through
the
Baltimore & Ohio and the Western Maryland,
Baltimore
connects with the Norfolk and Western, and thereb
y has
direct communication with the Shenandoah Valley
in Virginia itself, with which region Richmond has no direct
communication.
BOAT LINES.
In water transportation, the only comparison betwee
n Baltimore and Richmond is the comparison betwee
n a great
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Atlantic seaport and an inland city, on a stream of great
historic interest, but of no commercial consequence since the
seventeenth century. Baltimore has eighteen miles of water
front suitable for clocking purposes (including 6 miles in
/
3
4
the main inner harbor, 312 miles on the Middle Branch
/
within technical city limits, and at least 8 miles more adjacent to the city limits, i. e., on the North Shore of the Patapsco down to Point Breeze and on the South Shore to Hawkins Point; not including Sparrow's Point—actually so used
—or any other non-contiguous parts of the 223 miles of
/
4
water front, in the river approach to the city limits, under
the jurisdiction of the city authorities and open to still
greater development). It has 160 wharves in the main harbor, with 145,700 feet—say 2734 miles—of frontage of
/
wharf room. Adding this amount of wharf frontage to the
other water front of the Patapsco River and its tributaries,
the total is 120 miles of water front—developed and undeveloped. [Annual Report of Harbor Board for year 1913.]
Of this wharfage the City owns 13 piers with a wharf frontage of 26,385 feet, 5 miles.. Baltimore has spent $6,161,000 on municipal docks, and has available $5,000,000 more
for extending the system.
Baltimore has seventeen foreign steamship lines, with
regular sailings to more than that number of different ports
throughout Europe, the British Isles and the West Indies.
[Annual Report, Chief of Engineers, 1913, Report of Col.
Lansing H. Beach, page 1803.] The number of foreign passengers at the Port of Baltimore increased from 19,720 in
1911 to 29,675 in 1912 and 43,611 in 1913.
The Merchants and Miners Transportation Company, the
Baltimore Steam Packet Company (the "Old Bay Line"),
the Chesapeake Steamship Company, the Baltimore and
Carolina Steamship Company, the New York and Baltimore
Transportation Line, and other steamship lines, connect Bal-
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14
timore with Virginia, South Carolina and other southern
ports, and also with New York, Philadelphia, Providence
and Boston. So far as tidewater Virginia is concerned, Baltimore is thus in direct communication with both the Eastern
and Western Shores, while Richmond has practically no
facilities for prompt communication with the Eastern Shore
and relatively none with the Western Shore.
SHIPPING.
In the Chesapeake Bay and coastwise trade are engaged
942 vessels documented (June 30th, 1913,) at the Port of
Baltimore,—more than the number of vessels documented at
any other Atlantic seaport, except New York. Adding the
number of vessels documented at the Ports of Annapolis and
Crisfield, the total number documented at Chesapeake Bay
Ports (including Baltimore) is 1,792. In addition to these
vessels, nearly all the vessels documented at Virginia and
North Carolina ports trade on the Chesapeake Bay, making
a total (estimated by the Collector of the Port of Baltimore)
of about 4,000 documented vessels trading on the Chesapeake
Bay. Most of these vessels, of course, trade at Baltimore.
The total net registered tonnage of vessels entered and
cleared, in foreign and coastwise trade, at the Port of Baltimore in the year 1913 was 9,700,075 tons,—an increase of
1,081,219 tons over 1912. The number of vessels, foreign
and American, which entered, cleared, arrived or departed,
[including vessels not entered or cleared] at the Port of
Baltimore during the year 1913, was 26,168; their aggregate net tonnage was 17,383,214; the number of passengers
carried, 748,943. [Report, 1914, not yet published, of Col.
Lansing H. Beach.]
The commerce, foreign, domestic and coastwise, of the
Port of Baltimore during the year 1913 amounted, in
freight carried, to a total of 14,781,548 tons, and an aggregate value of $439,906,468. [Col. Beach, 1914 Report.]
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MINING.
Mining is of vast importance in West Virginia, Western
Maryland, and elsewhere in the Fifth District. The intimate relation of Baltimore to the mining industry is illustrated, among other ways, by the fact that more than 5,000,000 tons of coal are shipped (in coastwise and foreign trade)
from Baltimore annually. [Figures received February 6th,
1911, from the Bureau of Statistics of the Department of
Commerce and Labor show a total of 4,875,609 long tons
(i. e., 5,460,682 short tons) for the year 1910. We understand that the Department has not continued similar statistics as to coastwise shipments for subsequent years. During the same year (1910), according to the records of the
Western Maryland, Pennsylvania and Baltimore and Ohio
Railroads, the total coal tonnage into Baltimore was 6,576,672 tons,—indicating consumption of more than 1,000,000
tons in Baltimore. As the above total of shipments for 1910
includes only 496,664 long tons
e., 556,263 short tons)
of exports, while the exports for 1913 amounted to 873,413
short tons, the increase in exports alone, without any allowance for increase in coastwise shipments, would bring the
total shipments in 1913 up to 5,777,832 tons.] Almost all
of this coal is shipped by companies managed and largely
owned in Baltimore, including the Consolidation Coal Company, one of the largest coal companies in the 'United States,
which has its principal mines in Maryland and West Virginia, and makes shipments from Baltimore all along the Atlantic Coast, and also to Europe, Africa, South and Central
America. Exports of coal from the Port of Baltimore in
the calendar year 1913 amounted to $2,350,275 (873,413
tons).
FISHERIES.
Baltimore is the natural center of distribution of the products of the Chesapeake Bay fisheries, not only those in 'Mary-
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land, but largely those in Virginia. It is the leading city
in this country in the oyster packing industry. Richmond
has no business of this kind.
FOREIGN COMMERCE.
During the calendar year 1913 the domestic exports from
the port of Baltimore amounted to $117,269,378, imports
$35,553,514. Richmond has no exports or imports at all.
Exports from Baltimore amount to fifty per cent more than
exports from Philadelphia.
Almost twice as much corn is exported from Baltimore as
from Boston, New York and Philadelphia combined. The
total amount of wheat, corn and oats exported from Baltimore is over three-fourths of that exported from New York
and substantially equal to the total amount exported from
Boston and Philadelphia combined. [See detailed figures
(1913), Annual Report of Baltimore Chamber of Commerce,
for year ending December 31st, 1913, pages 120-121.] The
value of exports from Baltimore of grain, hay and mill feed
alone for the calendar year 1913 amounted to $43,384,356
(including $12,956,706 of Canadian products shipped to
Baltimore in bond for export). [Records of Collector of
Port.] This represents just so much foreign exchange created in Baltimore for these items alone. It also represents
principally business done, not only through Baltimore but
in Baltimore. Fully 80 per cent of this grain business is
handled by Baltimore merchants and commission men, who
either as purchasers or factors practically have to finance
payment to the interior shippers for all the grain handled
by them, and who then ship from Baltimore on their own.
account the grain thus purchased, and exported or otherwise
disposed of. All these exports of grain from Baltimore thus
represent not only exports from Baltimore, but two separate
business transactions in and from Baltimore, viz, the pur-
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17
chase of the grain from the inland shipper and the sale of
grain to the foreign buyer. Both of these transactions have
to be financed in or from Baltimore. They naturally are or
should be financed in Baltimore.
Baltimore has large terminal elevators which can put
aboard vessels more than 1,000,000 bushels of grain in a day.
For the calendar year 1913, there were received in Baltimore, 70,915,824 bushels of grain (including 12,815,484
bushels shipped in bond and exported), and 2,086,097 barrels of flour (including 82,516 bushels in bond for export), which, together with hay, straw and mill-feed
handled, aggregated a value of $68,000,000. Taking into
consideration other branches of the commission business not
reflected in any of these figures (such as the handling of
truck and fruits from the Atlantic seaboard and the West
Indies, including, for instance, bananas, for which Baltimore
is the largest market in this country), $100,000,000 would
be a conservative estimate of the annual volume of grain and
commission business in Baltimore.
The opening of the Panama Canal will necessarily greatly
increase Baltimore's foreign commerce. The recent, still
progressing, growth of trade between the United States and
South America will, both before and after the opening of the
canal, have the same effect. Baltimore's geographical position is, with respect to trade through the canal or with any
part of South America, more favorable than that of any other
city on the Atlantic Coast. Baltimore has a double advantage over New York, Philadelphia and Boston alike. The
distance by sea to the canal or to South America is shorter
from Baltimore than from any of these other cities. The
distance by rail is similarly shorter (with correspondingly
lower freight rates) from Baltimore to the West, to the Great
Lakes,—Chicago, Cleveland, Buffalo and other Lake Ports,—
and to the whole great coal, iron and steel region from West
Virginia and Pittsburg to the Lakes. Baltimore is thus the
Atlantic Seaport—the junction point for transshipment--
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on the shortest rail-and-water lines of communication between the Middle West and South and Central America, as
well as the Pacific Coast and the Orient.
BANKING.
The relative volume of banking transactions, as indicated
in clearing house exchanges, in Richmond and in Baltimore
is as follows:
Richmond.
Baltimore.
Clearings for year ended Sep$2,011,447,000 $411,507,000
tember 30th, 1913
Clearings for year ended Sep$1,878,324,000 $121,316,000
tember 30th, 1912
$133,123,000
Increase.
$12 809,000
Decrease....
..
(Report of Comptroller of Currency, 1913, page 788.)
Deposits and banking resources in Baltimore not only bear
substantially the same relation to deposits and total resources
in Richmond, but actually exceed the total of deposits and
resources in the whole State of Virginia. This is shown by
the following condensed statement of resources and liabilities
of all reporting banks in Baltimore, Richmond and the whole
State of Virginia (including Richmond), respectively, on
October 21st, 1913 (the latest date for which published figures as to Virginia State banks are available). The figures
for Virginia are published in the 1914 Report of the Banking Division of the State Corporation Cummission (including abstract published by the Comptroller of the Currency as
to National banks). The figures for Richmond were obtained
from the same report (as to State banks) and from the Comptroller's office and statements published in Richmond news-
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19
papers as required by law (as to National banks). The
Baltimore figures were taken from the Comptroller's published abstract and the Maryland State Bank Commissioner's
office (all published in newspapers as required by law):
Resources.
*Baltimore. Richmond.
Virginia.
Loans and discounts.
$113,869,125 $47,574,477 $169,851,246
Investments, bonds, securities, etc
128,031,937 8,730,538 29,864,312
Cash on hand and due from
banks and bankers
39,929,973 14,815,997 42,527,987
All other resources.
16,033,542 3,743,015
12,791,471
Total resources
$297,864,577 $74,864,027 $255,035,016
Liabilities—
Capital stock
$23,492,300 $10,250,437 $31,395,417
Surplus and undivided
profits
32,929,507 8,383,971
25,389,599
Individual deposits
185,901,434 35,704,121 151,526,522
United States deposits
3,983,772
874,698
2,593,143
Postal savings deposits
34,755
11,069
116,019
Due to banks and bankers 37,861,201 12,634,413 19,176,614
All other liabilities
13,661,608 7,005,318
24,837,702
$297,864,577 $74,864,027 $255,035,016
*[Including 16 mutual savings institutions as of December 31st,,
1913, the nearest date obtainable.]
The general ratio of about five to one thus prevails with
respect to deposits, and a ratio of four to one with respect
to total resources. Capital surplus and undivided profits
of Baltimore banks amount to three times the same item for
Richmond banks. The smaller ratio between capital, surplus and undivided profits but illustrates the fact that the
business of banking is transacted primarily with the money
of depositors, not with the money of stockholders. Capital
and surplus are practically only a margin of safety to depos-
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Federal Reserve Bank of St. Louis
20
itors. When a bank has reached a certain size and strength
it is no longer necessary to increase capital and surplus in
proportion to increase of business. Baltimore banks are
on an average larger than Richmond banks. This condition
Indicates the basis of the statement by the Honorable Carter
Glass that "in capital and surplus of national banks per
capita Richmond exceeded New York, Chicago, St. Louis,
Boston and every other applicant city having a population
of as much as 80,000, except the City of San Francsico and
one other" (Congressional Record, page 7728). That is
to say, proportionately capital and surplus is a larger item
with country banks than with banks in large cities. Thus
Table F, appended to the decision of the Organization Committee, shows that the average capital and surplus of each
of the fifty-five banks and trust companies in Baltimore
was about fifty per cent more than the average capital and
surplus of each of the twenty-six banks and trust companies
in Richmond, but the per capita capital and surplus of the
Richmond banks and trust companies was $131 against $85
for Baltimore. On the other hand, the per capita individual
deposits in Baltimore were $341 against $277 in Richmond.
The distribution of banking resources among various kinds
of banks is also different in large cities from the distribution
among country banks. Greater specialization prevails in
the larger cities. In Richmond there are no mutual savings
banks, but national banks, like most country banks, do a
savings bank business. National banks dominate the banking business in Richmond. In Baltimore the mutual savings banks occupy a strong position and the trust companies
play a much more important part than they do in Richmond.
The following figures, showing capital, surplus and undivided profits, individual deposits and total banking resources,
indicate the different distribution of banking business and
resources in Baltimore and Richmond and the greater specialization in Baltimore:
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CAPITAL, SURPLUS AND UNDIVIDED PROFITS.
National banks
State banks, trust companies and
stock savings banks
Mutual savings banks
Total.
Baltimore.
Richmond.
$22,243,508 $11,003,596
25,906,341
8,271,958
7,630,812
$56,421,807 $18,634,408
INDIVIDUAL DEPOSITS.
Baltimore.
Richmond.
$43,701,142 $26,957,490
National banks
State banks, trust companies and
stock savings banks
47,771,901
Mutual savings banks
94,428,390
Total.
8,746,630
.. $185,901,433 $35,704,120
TOTAL BANKING RESOURCES.
Baltimore.
Richmond.
National banks
$114,973,461 $57,056,235
State banks, trust companies and
stock savings banks
80,183,110
17,807,791
Mutual savings banks
102,708,005
Total
$297,864,576 $74,864,026
In the effort to find a comparison between Baltimore and
Richmond unfavorable to Baltimore, the Honorable Carter
Glass and the Organization Committee compared certain
figures, not for all banks in Richmond and Baltimore, but for
national banks alone in Virginia and Maryland, thus ignor-
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22
ing all the banks and trust companies in Baltimore except
national banks and apparently assuming that Richmond includes the whole State of Virginia. As a matter of fact, as
we have already pointed out, the total banking resources and
the deposits of all kinds in Baltimore banks exceed the resources and deposits of all the banks in the State of Virginia.
ECONOMIC DEVELOPMENT.
Besides its ordinary current banking business, Baltimore
is the most important reservoir from which is supplied capital for permanent investments in the economic development
of the South, including especially the portions of the South
included in the Fifth District. The relation of Baltimore
to the South and to the District in this respect is almost too
well known to admit of discussion. The Baltimore trust companies (which the Organization Committee and the defenders
of its action would ignore in comparing the banking resources
and activities of Baltimore and Richmond) have been developed largely to provide a channel for this regular flow
of capital from Baltimore seeking investment in the South.
Of the three railway trunk lines through Richmond two, as
is well know-n, were developed mainly through Baltimore
capital, and Baltimore is still the principal seat of the fiscal
operations of the Atlantic Coast Line and to a lesser extent
a seat of such operations of the Seaboard Air Line. Parts
of the Southern Railway system were also originally financed
in Baltimore, and the fiscal agency for the payment of interest on some of its underlying securities is in Baltimore.
There are still owned in Baltimore very large interests in all
three of these railroad properties.
The cotton milling industry itself has been largely developed in the South through Baltimore capital. In the North
and South Carolina cotton mills particularly is invested a
large amount of Baltimore capital.
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• This flow of capital from Baltimore to the South is a
constant flow. Many of the Southern enterprises, like its
trunk lines, which have since, with the trend towards consolidation, passed more under the influence of New York control, were originally financed from Baltimore. After control of Southern enterprises has passed from Baltimore to
New York, new Southern enterprises are being developed by
Baltimore capital when New York capital is not readily obtainable in the early stages of such industries.
The "Manufacturers Record," in a carefully prepared article, filed as "Exhibit No. 9" with the brief for Baltimore with
the Organization Committee, says that a fair minimum estimate of the amount of Baltimore capital invested below the
Potomac is $200,000,000, and shows $23,167,016 invested
by three Baltimore savings banks alone in ten southern States,
not including Maryland, but including all the other States in
the Fifth District, and also Kentucky, Georgia, Florida,
Alabama, Tennessee and Mississippi. The greater part of
this amount undoubtedly represents investments in the Fifth
District.
Just as the commercial business done by Baltimore through
the Fifth District and the South in the distribution of its
manufactured products and the goods sold by its jobbing
houses creates a uniform flow of business (so far as payments
and liquidation of credits is concerned), from the South to
Baltimore as a center, so the permanent investments of Baltimore capital in the economic development of the South create
similar flow of payments from the South to Baltimore,
comprising regular disbursements of interest and dividends
from Southern enterprises which have their fiscal agencies in
Baltimore, where they were originally financed. Three Baltimore trust companies alone act as fiscal agents in the payment
of interest on about $200,000,000 of securities of corporations in the Fifth District, making annual interest payments
aggregating about $10,000,000 per year. Of this amount
only about one-fourth represents local companies operating
in Maryland alone.
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This flow of capital from Baltimore for permanent investment in the South, with the resulting smaller flow of interest and dividend payments through Baltimore, has no parallel
in Richmond, as there is no accumulation in Richmond of
capital seeking permanent investment in the Southern states.
The Richmond banks no doubt satisfactorily handle the ordinary routine banking business of their immediate locality
and to some extent of the Carolinas. It is to Baltimore,
however, that the region, including Virginia itself, very
largely looks for permanent outlay of capital in new economic
development.
GOVERNMENT RECOGNITION OF BALTIMORE AS A FINANCIAL
CENTER.
There were created by statute ten subtreasuries of the
United States, all of which still exist except that at Charleston, which was discontinued in 1876.
These are at the following cities, in most of which regional
banks have been designated by the Committee (6 Fed Stat.
Ann°. 541):
1.
2.
3.
4.
5.
6.
Boston
New York
Philadelphia
St. Louis
San Francisco
Chicago
Regional Bank
lC
CC
CC
Ci
CC
CC
Thus there are six cities where subtreasuries were
located
and regional banks designated.
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Federal Reserve Bank of St. Louis
7. Baltimore
8. New Orleans
9. Cincinnati
No Regional Bank.
CC
CC
CC
25
The remaining three cities where subtreasuries are located
have no regional banks, and among these cities we again
have Baltimore and N
Orleans discriminated against.
GENERAL.
Necessarily it is impossible to give definite figures for
many branches of business which go to make up the total
business in a large city, especially the more localized branches
of business. Baltimore, in its department stores, as well as
its older and other more specialized stores, does a large retail
business, not only with the residents of Baltimore and its
suburbs, but with shoppers from adjoining cities and States.
Doubtless Richmond also has similar business sufficient to
meet its local needs. There is at least nothing to indicate
that in such branches of business the ratio between Richmond and Baltimore is less than the prevailing ratio of five
to one which exists with respect to population and other
branches of business.
It cannot be too strongly stated that before the action of
the Organization Committee no one ever thought of comparing Richmond with Baltimore, or questioning the commercial and financial pre-eminence of Baltimore in what has
now been made the Fifth, District. On the contrary, at the
public hearings before the Organization Committee, Mr.
Seay, the principal spokesman for Richmond, and the author
of the Richmond brief, as well as others selected from the
throng to voice their preferences for Richmond, when pressed
first by the Secretary of Agriculture and later by the Secretary of the Treasury to compare figures for Richmond and
Baltimore, admitted their inability to do so. (Testimony,
pages 860, 8(il, 871.)
If Richmond ever suggested that it be made the reserve
city in a district including Baltimore, the suggestion was
not made publicly, or through any channels equally open to
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26
Baltimore. The remarks of the Honorable Carter Glass
(copied by the Organization Committee, or vice versa) are
pure afterthought, in defence of a preference of Richmond
over Baltimore so gross and indefensible that before this
preference was given by the Organization Committee, Richmond itself did not dare ask it,—at least not publicly.
The astute and energetic public campaign conducted for
Richmond displayed a constant recognition of two facts,
first, that in a district including Maryland and Virginia,
Baltimore is the natural reserve city second, that in a
district not including Miryland, but including Virginia and
southern states as far as Georgia, Richmond and Atlanta,
two enterprising cities (which were not reserve cities) of
about the same size, would be natural rivals for designation.
These two facts were thus dealt with:
1. The natural pre-eminence of Baltimore over Richmond
was met by a determined effort for the apportionment of a
district lying entirely south of the Potomac River. Throughout the Richmond brief and the statements at the public
hearing by the advocates of Richmond, emphasis is laid on
the assertion that "Nature had mapped out" a district with
the Potomac River as a natural northern boundary.
2. The claims of Atlanta, (which was principally feared
by Richmond) were met by the argument that the course of
business is from the south northward, and that for this
reason Richmond could serve, not only Virginia, but even
South Carolina better than could Atlanta, which is geographically nearer. This second argument is so obviously an argument for Baltimore that it but emphasizes the recognition by
Richmond of the pre-eminence of Baltimore over Richmon
d.
In a word, Richmond recognized that, without an utter
disregard of the convenience and customary course of
business, it was impossible to subordinate Baltimore to
Richmond.
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Concluding, therefore, that Baltimore could not be so subordinated, Richmond sought to 'exclude Baltimore, putting it
in a district with Philadelphia or New York as the reserve
city. This was Mr. Seay's method of dealing with Baltimore (Testimony pages 862-3). Other direct or indirect
references to Baltimore in the Richmond brief are made
merely in support of Richmond's fundamental proposition
that Nature had laid off a district bounded on the north by
the Potomac River.
(b) A DUE REGARD TO THE CONVENIENCE AND CUSTOMARY
COURSE OF BUSINESS, WITHIN THE CONTEMPLATION OF
THE FEDERAL RESERVE ACT, MEANS A DUE REGARD TO
THE CONVENIENCE AND CUSTOMARY COURSE OF All
BUSINESS, COMMERCIAL, FINANCIAL AND INDUSTRIAL,
AND REQUIRES THAT THE NATURAL COMMERCIAL CAPITAL OF A DISTRICT BE DESIGNATED AS THE FEDERAL
RESERVE CITY IN SUCH DISTRICT.
In its statement under date of April 10th, the Organization Committee said:
"The committee realized that the division of the
country into districts was far more important and complex than the designation of the reserve cities, and that
the latter duty was subsidiary and relatively simple,
waiving considerations of local pride or prestige. In arranging the districts the consideration of the character
and growth of industry, trade and banking, no less than
the traditions, habits and common understandings of
the people was much more intimately involved." (page
17.)
The Committee then proceeded to announce that "comparatively few people realized, or seemed to realize, what
the Act was intended to accomplish; what the nature and
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28
functions of the reserve banks were to be; and how little
change would occur in the ordinary financial relations of
the communities, the business establishments and the individual banks;" and that critics of the decision of the Committee do not know "that the Federal reserve banks are
bankers' banks and not ordinary commercial banks;" and
that "the ordinary every-day banking relations of the community, of business men and of banks will not be greatly
modified or altered." (Pages 17-18.)
If by all this the Committee merely means that no act
of the Organization Committee—or of Congress itself—can
make Richmond the commercial equal of Baltimore, or
reverse the natural positions which Richmond and Baltimore
occupy in the commercial world, we fully agree with the
Committee. Undoubtedly, "every city can continue
to do
business with individuals, firms or corporations, withi
n its
own limits, or in its own region, or in any part of
the
Union or the world in which it has heretofore done
business,"
If, on the other hand, the Organization Committee is
of the
opinion that it is immaterial to the accomplish
ment of the
purposes of the Act and the performance of
the functions
which the Federal reserve banks are designed
to perform,
what city in a given district is designated as
the Federal
reserve city,—then we respectfully submit that
the Committee
itself does not understand what the Act
was intended to
accomplish and has wasted the time and
money which has
been consumed under the authority from
Congress "to employ counsel and expert aid, to take testi
mony, to send for
persons and papers, to administer oaths, and
to make such
investigation as may be deemed necessary
by the said Committee in determining the reserve districts,
and in designating the cities within such districts where such
Federal reserve
banks shall be severally located."
Banks are located and business is done
not in districts,
but in cities. The designation of Federal
reserve cities is
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Federal Reserve Bank of St. Louis
29
mentioned in the Act, before the division of the country into
districts, as obviously the fact of prime importance in the
apportionment of the districts themselves.
Banking is essentially an ancillary business—"the servant
of commerce." It occupies substantially the same relation
to other business which money and currency occupy to other
commodities. Money (except for the limited commercial
uses of gold and silver) is of no value in itself. It is an
indispensable medium in the distribution of all other commodities. Banking (excerpt certain historic but practically
obsolete functions) cannot exist apart from other business.
At the same time practically no other business can exist
without the aid of banking. This is commonplace.
What is true of banking generally is equally true (though
apparently not equally obvious) with respect to the Federal
reserve banks. The Federal reserve bank system is preeminently not a system complete in itself apart from our
existing banking system. On the contrary, it is superimposed upon the whole existing system, presupposes the continued existence of the present system, and especially seeks,
as far as possible, to unify into one system all existing banks,
both state and national, together with the new Federal reserve banks, which are intended to constitute the nucleus,
or, more properly speaking, the governing part of the unified
system. With this determination to unite the Federal reserve banks with existing banks in an integral whole, Congress combined a second purpose (clearly manifested throughout the Federal Reserve Act), not to disturb existing conditions more than is absolutely necessary. Throughout the Act,
Congress repeatedly displays (1) its determination to compel the establishment of the new system and such changes in
the present system as are necessary for that purpose, and
(2) its determination not to disturb existing conditions unnecessarily.
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Without undertaking a minute review of the provisions
of the Federal Reserve Act, with which this Board is familiar, it may be said that a cardinal feature—if not the cardinal
feature—of the new system is its comprehensiveness. The
present banking system had been found inadequate. It had
been found to create an artificial concentration of the money
of the whole country in New York City (and to a lesser
extent in Chicago). This concentration, it has been thought,
made the banking system too dependent upon speculation in
the stock market and too little adapted to meet the more
strictly commercial and agricultural needs of the country.
Congress set out to correct these conditions, not, however,
primarily by forbidding the practices which had been deem
ed
undesirable, or unduly prominent in our banking syste
m, but
mainly by expanding the system and providing new (and
supposedly more efficient) channels by which the mone
y and
banking resources of the country might naturally
flow towards commercial transactions, as distinguished
from speculation in stocks.
Besides compulsory membership in the new
system, the
Federal Reserve Act makes but one compulsory
change from
existing conditions. Banks can no longer
(after the expiration of three years) keep part of their
reserves with other
banks as reserve agents, but must keep such
reserves as are
not kept in their own vaults with the Feder
al reserve banks
alone. With this exception (and the
further exception of
changes in administrative details), the not
infrequent changes
made by the Federal Reserve Act in the
existing status of
banks, state and national, are all in the
nature of enabling
provisions giving to existing banks
greater powers and a
broader field of possible business than they
now possess. The
development of these new fields of activi
ty, or the expansion
of existing business in directions now not
fully developed,
is necessarily expected to result, to a
considerable extent,
in a deflection, into these new fields, of
part of the money
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Federal Reserve Bank of St. Louis
81
and banking credit now employed in stock exchange dealings. The important fact is, however, that these expected
changes Congress has left (with the single exception above
referred to) entirely to the course which business will naturally take when new channels have been opened and artificial
barriers have been removed, and not to prohibitions of existing business or to compulsion in the development of the new
activities. Thus the exercise of the facilities for re-discounting and for the issuance of Federal reserve notes—the two
features of the Act which have attracted most attention on
the part of the general public—is optional with the banks.
Congress has trusted the natural course of business to flow
into the channels thus opened, hitherto unopened or obstructed by artificial barriers. The same is true of the other
features, great and small, of the Act. The possibilities of
the new system in handling domestic exchange and collections, the new powers of acceptance on the part of member
banks in connection with exports and imports, the establishment of foreign branches of existing banks or of Federal
reserve banks, the power to loan on farm land—are all instances of permission of what is now prohibited, or of the
removal of existing barriers, and not of compulsory deflection of business into any particular channel or channels.
The intimate relation between the Federal reserve banks
and every other part of the banking system is illustrated by
the treatment of State banks and trust companies in the
Federal Reserve Act. This treatment strikingly illustrates
the comprehensiveness of the Act. In practice State banks
and trust companies already bear a rather loosely defined
relation to the national banks as parts of one general system.
This relationship is, however, mainly extra-143gal. The new
Act deals directly with State banks and trust companies,
authorizes them formally to become members of the new
system, and recognizes that, whether members or not, all the
banking institutions in the country are to a certain extent
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Federal Reserve Bank of St. Louis
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to be regarded as parts of one system. The comprehensiveness of the Act in this respect is well illustrated by the provision in Section 20 that "no member bank shall act as the
medium or agent of a non-member bank in applying for or
receiving discounts from a Federal reserve bank under the
provisions of this Act, accept by permission of the Federal
Reserve Board." Instead, therefore, of a fiat prohibition
even against non-member banks availing themselves of the
peculiar advantages which the new system is expected to provide for its members, Congress leaves this matter to the discretion of the Federal Reserve Board, so that, if the Board
in its discretion shall see fit to permit, those legally nonmembers of the new system may practically occupy a sort of
subordinate or associate membership in the system, somewhat analogous to the relations which now exist between a
clearing house and non-member banks and trust companies.
In view of the comprehensiveness of the new system, of
the predominance in this new system of the Federal reserve
banks, and of the necessarily intimate relations between the
Federal reserve banks and all other parts of the unified system, it is impossible that the designation of the Federal
reserve cities, i. e., the location of the Federal reserve banks,
can be unimportant. As well might it be said that the banks
of New York City might be moved to Syracuse, those of
Philadelphia to Harrisburg, those of Baltimore to Hagerstown, without inconvenience or disturbance of the customary
course of business. Banks must be located where the commerce to which banking is an ancillary aid is located. In
the case of the Federal reserve banks, this is equally important (1) where the Federal reserve bank deals with the
public first hand as its customers (e. g. in "open-market operations") and (2) where it deals with the public second
hand
through existing banks (e. g. in rediscounting).
The natural
course of business has located existing
banks where existing
business is and goes. A due regard
to the natural course of
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Federal Reserve Bank of St. Louis
33
business requires that the Federal reserve banks be located by
law where Nature has already located both the business and
the banks.
The Organization Committee observes "that the Federal
Reserve Banks are bankers' banks and not ordinary commercial banks." To a limited extent this is true; not, however,
in the sense tat the Federal reserve banks are a peculiar
kind of banks set apart from the other banks to do a peculiar
kind of banking business. The Organization Committee continues (speaking of the Federal reserve banks) that "they
are to hold the reserves and to clear the checks of member
banks, make rediscounts for them and engage in certain openmarket operations."
With, perhaps, a more accurate sense of proportion, it
might fairly be said that the Federal Reserve Banks are
banks vested (1) with special powers of great importance not
vested in other banks, and (2) with general power to conduct
all branches of the business of banking, except that, in transactions with the public, they may not perform certain important but routine functions of ordinary banking, which are
expressly or by implication reserved to the member banks
belonging to the same united system.
Consciously or unconsciously, the Organization Committee
in no case, except in the Fifth and Sixth Districts, has failed
to locate the Federal reserve bank in the principal city in
the district. In every other case it has shown due regard
to the convenience and customary course of business by
designating the principal city in the district—the natural
commercial capital of the district—as the Federal Reserve
City. Boston, New York, Philadelphia, Cleveland, Chicago,
St. Louis, Minneapolis, Kansas City and San Francisco,
are each the largest city and the natural commercial capital
of their respective districts,—though in so designating Kansas
City, New York and San Francisco, the Committee cast to
the winds the supposed geographical considerations upon
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Federal Reserve Bank of St. Louis
34
which afterthought has laid so much stress in the defence
of the selection of Richmond, and in so designating Cleveland
both the objection to a city on the edge of a district and the
alleged wishes of member banks (not mentioned in the Act
but much discussed by the Organization Committee), are
alike ignored. [In the Eleventh District, the difference in
population between Dallas (92,104) and San Antonio (96,416) is negligible. Dallas is, therefore, no exception to the
rule of selecting the largest city in each district. As a reason
for the selection of Cleveland, the Committee itself says that
Cleveland is the sixth largest city in the United States.
Whether this is substantially true (i. e., whether, allowing
for suburbs, etc., Cleveland is really a larger city than Pittsburg), we do not, of course, undertake to say. We call attention to the standard,—in this instance expressly recognized
by the Committee; with mere accuracy or inaccuracy of
detail in there applying the recognized standard we have no
concern.]
In the Sixth District (where, the Committee says, "the
course of business is not nom the Atlantic Seaboard towards
New Orleans" [page 19]), New Orleans (population 339,075) is passed over in favor of Atlanta (population 154,839), which is a little less than half the size of New Orleans. Nothing in the circumstances with respect to the
Sixth District can, however, compare with the Committee's
titanic effort in the Fifth District to reverse the customary
course of business and subordinate not one but two large
cities (in the northern part of a district in which the course
of business is from the south northward) to a smaller city
which is a mere way station on the customary course of business towards its natural center at Baltimore.
In the Fifth District the Committee has undertaken to turn
the course of business backward to a comparatively small interior city from two large cities, one about three times, the
other about five times the size of the city designated, either of
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Federal Reserve Bank of St. Louis
85
these much more convenient to both than Richmond is.
There need be no wonder that Richmond never uttered aloud
a request that the Committee (required by law to pay due regard to the customary course of business) subordinate both
Baltimore and Washington to Richmond.
The Committee say that "it seemed undesirable to place a
bank in the extreme northeastern corner or at Baltimore."
(Page 24.) This, however, is the rule and not the exception
in the Committee's own action. Trade tends towards the
oceans, the lakes and the great rivers, and the large cities,
therefore, grow up there. The Committee gave regional banks
to the following cities, although they were on or near the edge
of the district and not geometrically at or near its center:
Boston, New York and Philadelphia, on the Atlantic, or
rivers running into it.
San Francisco, on the Pacific.
Cleveland and Chicago, on the lakes.
St. Louis, on the Mississippi River.
Here are seven cities of the twelve (besides Kansas City,
which makes eight) on the very edge of the districts in which
they are placed.
Practically on the edge of its district is also Minneapolis.
There are only three cities that are at all near the geometrical center of their respective districts:
1. Atlanta.
2. Richmond.
3. Dallas.
In the book of Thomas Conway, Jr., and Ernest M. Patterson, of the School of Finance and Commerce of the University of Pennsylvania, on "The Operation of the New
Bank Act," written before the action of the Reserve Bank
Organization Committee, the authors discuss the claims of
various cities for reserve banks, and give the then current
opinion. They say (page 33):
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Federal Reserve Bank of St. Louis
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"Perhaps a few words should be said concerning the
present rivalry between the cities that are eager for
reserve banks. It seems to be generally conceded that
New York and Chicago will be on the list because of
their location and their financial prominence. San
Francisco and New Orleans come next, but upon the
rest of the number there is no consensus of opinion.
Boston, Philadelphia, Baltimore and Washington are
asking for recognition in the East; Atlanta and Houston (Texas) are mentioned for the South; St. Louis,
Kansas City, Memphis, Cincinnati, Cleveland and Minneapolis in the Middle West, with Denver, Los Angeles
and Portland (Oregon) in the West. Still others have
been suggested, but most of the discussion centers around
the ones named. Only the most careful sifting and
weighing of the mass of evidence that will be presented
will make a proper choice possible. The Committee is
authorized to employ counsel and expert aid, to take testimony and in other ways to conduct such investigations
as may be deemed necessary."
In this forecast are ten of the cities actually chosen, to
wit, Boston, New York, Philadelphia, Cleveland, Atlanta,
Chicago, St. Louis, Minneapolis, Kansas City and San Francisco, whilst the other two actually designated by the committee, to wit, Riehmcmd, which was designated in place of
Baltimore, and Dallas, which was designated in place of
New Orleans, are not even mentioned. So far as there was
any serious discussion representing the trend of public opinion prior to the action of the Committee, it was in favor of
Baltimore or Washington, as against Richmond, and New
Orleans, decidedly as against Dallas.
It is very significant that in this expression of public opinion prior to the action of the Committee, Richmond and
Dallas are not even mentioned, whilst both Baltimore and
New Orleans are placed among the possibilities. This, of
course, was because if the Districts were formed as they are
now, the public well knew that Baltimore would be the finan-
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Federal Reserve Bank of St. Louis
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cial and trade center of the district, its dominating commercial city.
The New York Journal of Commerce, edited by Dr. H.
Parker Willis, the reputed author of the new Federal Reserve Act, in an editorial on April 17th, 1914, thus tersely
stated why Ba4imore and not Richmond should have been
designated as the Federal Reserve City in the Fifth District:
"THE BALTIMORE PROTEST.
The bankers and business men of Baltimore are entirely justified in their vigorous protest against being
tagged upon one corner of a reserve district with Richmond as the seat of its reserve bank. They show by
figures that in population, in manufacturing industry,
in trade and in banking resources and operations, Baltimore is just about five times as important as Richmond.
The location of a reserve bank should be determined by
these factors and not by territorial position. In one
.corner of the district as Baltimore is, just as New York
is in one corner of its district, its means of ready and
rapid communication for purposes of exchange and banking facilities throughout the district are far better than
those of Richmond. What the Federal Reserve Act absolutely requires is that 'the districts shall be apportioned
with due regard to the convenience and customary course
of business,' and that has obviously not been done in the
case of the Fifth District. It certainly has not been
observed in locating the reserve city.
It was contended at the Baltimore meeting of protest,
apparently upon good evidence, that the Organization
Committee in its defensive statement did not fairly
represent the facts. The claims made in behalf of Richmond, in regard to the number of banks and means of
communication, had reference to rivalry in a district of
which Atlanta was to be the reserve center. Baltimore
was virtually left out of the account. At the time the
hearing was given and the alleged vote was taken nobody
knew what the division of districts in the South was to
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Federal Reserve Bank of St. Louis
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be or how many of them there were to be. Baltimore
evidently never dreamed of being tagged upon one with
its reserve bank at Richmond or it would have made
itself heard then.
The resolutions adopted at the Baltimore meeting call
for a rehearing by the Organization Committee and, failing that, for an appeal to the Federal Reserve Board, yet
to be appointed. Fortunately that board will have power
to readjust the districts, though the committee has taken
care to give it no chance to change the number, having
already fixed it at the maximum. There will be need of
a good deal of readjustment before the reapportionment
will have due regard to the convenience and customary
course of business, which the law requires."
Thereafter, the Richmond Committee put their case before the Journal of Commerce in a letter which evoked the
following editorial reply, on April 24th:
"CUSTOMARY COURSE OF BANKING BUSINESS.
We have received from the Richmond Committee,
which worked so energetically and successfully for the
location of a Federal Reserve Bank in that city, a communication contesting our view that 'the convenience
and customary course of business' would have been better served by locating that institution at Baltimore for
the district as it was laid out, on account of the superior
banking connections and facilities of that city and the
greater flow of exchange transactions to and from it.
The committee submits certain maps and diagrams as
well as figures to sustain its contention that Baltimore,
at one corner of the district as designated, has not better
'means of ready and rapid communication for purposes
of exchange and banking facility throughout the district' than Richmond. These illustrations relate in part
to a district which was originally proposed to the Organization Committee, and which included Georgia and
Florida. It gives lines of distance and time for mail
communication and figures relating to the number of
banks in the region, to show how much more conveniently located Richmond is for banking purposes.
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"A large part of the argument seems to us quite irrelevant to the main point in controversy, and it would require more space to go into a close analysis than is
worth while. There is a tendency to ignore the distinction between ordinary banking operations and the
real functions of the reserve banks. The former are
likely to ,take their customary course in spite of some
inconvenience, while the latter may be subject to some
unnecessary inconvenience if it proves that the reserve
bank is not located with due regard to the convenience
and customary course of business. It is not so much a
question of area and distances as of distribution and concentration of the actual currents of trade. The Richmond Committee says that in the middle and southern
portion of its district as designated, the three States of
Virginia, North Carolina and South Carolina have nearly 6,000,000 population and 1,223 banking institutions,
while the northern part, in which Baltimore is situated,
has less than 3,000,000 population and only 494 banks.
It also shows how much more convenient for railroad
and mail communication Richmond is than Baltimore to
this large portion of the district.
"To our mind this has very little to do with the case.
It is not a question of area and distances, or of population and number of banks so much as of density of
population within certain areas, volume and character
of transactions and number of daily communications to
be made. A limited area might be marked out in this
city containing a greater population than any one of the
three States named, and another in which more commercial and financial business is transacted in a day than
in all three of them, while there is only a fraction as
many banks in the whole city as in the States which
constitute the southern part of the Richmond district.
Number of banks has scarcely any relation to the question. A national bank may be organized in most of
this district with a capital of $25,000, and there are
few outside of Baltimore having more than $50,000,
with corresponding resources. There are single banks
in this city with capital and resources equal to a thousand of the former or five hundred of the latter. The
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Federal Reserve Bank of St. Louis
40
matter of mail communication is not determined by
distance or time of transmission, but by demand for
the communication WI account of the volume of business served by it.
"However, as we have already said, most of these considerations are apart from the real question, on account
of the distinction so often ignored in the discussions between ordinary banking operations and the special function of the Federal Reserve Banks. In the daily transactions of domestic exchange, the drawings and transfers upon depcsit accounts and the settling of balances,
business wilt take its customary course regardless of
district lines. So far as it is normally drawn to Baltimore, it will go there, and so far as it can be attracted
to Richmond it will be diverted to its banks. In that
regard the districting is not likely to make much difference. If there is inconvenience or added expense, it
will be due chiefly to the requirement for keeping a
large part of the reserve of the member banks with the
Federal Reserve Bank of the district, and to making
them dependent upon that institution for the rediscount of commercial paper.
"It will certainly not be convenient or economical for
Baltimore banks to keep the required proportion of reserves against their own deposits in Richmond any more
than for those of Jersey City to keep theirs in Philadelphia. There is probably more commercial paper of
the kind 'eligible for discount' by the reserve banks
handled by the banking institutions of Baltimore than
in all that southern part of the district below Richmond and above the district of which Atlanta is made
the centre. It seems to us that the location of the reserve bank of this Fifth District at Richmond, however little it may interfere with the convenience and
customary course of general banking operations, is likely to exert considerable restraint upon the rediscounting
of commercial paper. This may, however, be done for
most practical purposes, where its object is not to draw
the treasury reserve notes into circulation, without resorting to the reserve banks; and our chief objection
to what seems to us to be mistakes of location, is that
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Federal Reserve Bank of St. Louis
41
they are liable to hamper the working of the new system
and deter banking institutions which are not organized
under the National law from entering it."
In the May, 1914, issue of the Journal of Political Economy, published by the University of Chicago, it is said,
(page 487):
"By making Baltimore, for example, tributary to
Richmond, and New Orleans to Atlanta, an injury was
done not only to local pride, but also to the convenience
and customary development of trade relations."
BALTIMORE IS GEOGRAPHICALLY THE NATURAL LOCATION FOR THE FEDERAL RESERVE
BANK OF THE FIFTH DISTRICT.
A
(a) THE CUSTOMARY COURSE OF BUSINESS IN THE FIFTH
DISTRICT IS TOWARDS THE NORTH AND TOWARDS THE
COAST, i. e., TOWARDS BALTIMORE AS THE LARGEST,
MOST IMPORTANT,AND ALSO THE MOST NORTHERN,SEAPORT IN THE FIFTH DISTRICT, AND THE POINT TOWARDS WHICH COMMERCIAL PAYMENTS, LIQUIDATION
OF BUSINESS TRANSACTIONS AND EXCHANGE NORMALLY
MOVE.
The one fact as to the customary course of business in the
Fifth District, and, indeed, along the whole southern seaboard concerning which at the public hearings there seemed
to be entire unanimity of opinion on the part of representatives of Baltimore and Richmond, advocates of Richmond
from North and South Carolina, and apparently the Organization Committee itself, was that the customary course of
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Federal Reserve Bank of St. Louis
42
business in this region is from the South northward. So
far as the relations between Richmond and Baltimore are
concerned, the logical consequence of this admitted fact is so
obvious that (as we have already remarked) it became a
cardinal point in Richmond's case to establish the Potomac
River as the northern boundary of the district which should
include Richmond. With Mason and Dixon's line as the
northern boundary of the district, this conceded fact (on
which Richmond properly laid so much stress), irresistibly
points to Baltimore as the natural Federal Reserve City of
the Fifth District. Mr. Seay, in his testimony before the
Organization Committee, before the Committee had questioned him as to the availability of Baltimore, spoke of "an
incontestable advantage as the Federal Reserve Bank location" which he said Richmond "being situated at the northern limit of the district" possessed. (Testimony, page 852.)
In the Richmond brief it was properly said:
"It is a fact, certainly applicable to the Atlantic
Coast States, that the trend of business, the course of
commercial transactions, and the currents of exchange
are Northward, or, in other words, from the outside
towards the centers of finance and manufacture. This
is the natural course of exchanges. * * *
"No act or rule will, however, reverse the natural
course of settlements—where the money is due, there
it must be paid.
"Virginia, occupying the position of head of the
Southern States, places Richmond in direct line with
this natural trend, on the principal avenues of travel
and transportation.
"The railway lines from the South come into Virginia as into a funnel, Richmond being at the apex—
the one line of railway being the tube leading to Washington and points north. She is a natural converging
point.
"The overwhelming volume of travel and transportation must go through this point." (Page 7.)
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In truth, the overwhelming volume of travel and transportation south of Richmond must go through Richmond to Baltimore. In addition to the transportation from the district
which Richm-ond sought to have apportioned, the vast volume
of business from West Virginia and Maryland (as well as
business from tidewater Virginia and from the western parts
of Virginia and North Carolina) comes direct to Baltimore
without even passing through Richmond.
The facts hitherto mentioned concerning the amount and
distributiop. of Baltimore's manufactures and jobbing trade,
the volume of credits carried both by the banks and the commercial houses of Baltimore in the other parts of the Fifth
District, the relation of Baltimore and Baltimore capital
to the mining industry in West Virginia and Western Maryland, and the constant permanent investment of Baltimore
capital in the district, with the resultant regular flow of
interest payments from other parts of the district to and in
Baltimore—all combine to produce that natural customary
course of business, from the south northward, and from the
inland points coastward, to Baltimore, which at once explains
and is explained by the fact that Baltimore is so predominantly the commercial and financial capital of this district.
What doubtless is true in a small local sense of the course
of business from the Carolinas to Richmond (so far as there
is any course of business between Richmond and these
points), is true in a much larger and more general sense with
respect to the course of the great volume of business from
all parts of the district to Baltimore. Baltimore is a creditor city. The remainder of the district is, with respect to
Baltimore, debtor territory. This situation is in no sense
confined to the relations of the Baltimore banks with the
other parts of the district, much less of the national banks
alone. The great jobbing houses in Baltimore, with their
thousands of southern accounts, regularly finance (as Mr.
Hurst explained in his testimony before the Organization
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Federal Reserve Bank of St. Louis
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Committee [Testimony, pages 765-766, 768-773] the small
)
southern business men, whose accounts are carried by these
Baltimore houses sometimes for the greater part of the year,
until with the disposition of the cotton crop these southern
buyers are able to liquidate in Baltimore the accounts thus
owing and to make the payments thus due in Baltimore. As
Mr. Ingle suggested in his testimony (page 805), it is likely
that these thousands of southern accounts will, under the
new system, form the basis of two and three name paper,
discounted with the Baltimore banks, and rediscounted with
the Federal reserve bank, instead of being financed (as
they now are) directly by the Baltimore merchants—who in
turn finance their own operations, either with their own
capital or by their own individual credit through loans from
their own banks in Baltimore or from New York. Be this
as it may, the fact, (which no Federal reserve bank can
change), is that these thousands of southern accounts mean
thousands of cheeks flowing from the South to Baltimore in
payment and liquidation of accounts owing from the South
in Baltimore, and thus constitute the customary northern
course of business in the district.
Under the present system, these southern accounts may be
paid by checks of the southern debtors, drawn on their local
banks (in which event in most cases the checks are sent south
from Baltimore for collection and are then paid by the
southern banks in New York Exchange), or the southern
debtors may in the first instance pay their accounts in Baltimore in New York exchange in the form of checks drawn
by the southern banks on their New York correspondents.
Under the new system, this condition will be materially
changed. Collections within a district will probably be
made through the Federal reserve bank and collections between districts will largely be made between the several
Federal reserve banks. When a Baltimore merchant rewives a check from a southern customer, drawn on a south-
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Federal Reserve Bank of St. Louis
45
ern bank, and deposits it with his Baltimore bank, it will no
longer be necessary for the Baltimore bank to send this check
south for collection, and probably afterwards receive a New
York check which will require a second collection to liquidate the one transaction. Instead, the Baltimore bank will
deposit the original cheek in the Federal reserve bank and
collection will be made immediately by charging the account
against the southern member bank.
To remove the Federal reserve bank from its natural location in Baltimore to Richmond involves no mere question of
distance, but an attempt to turn backward the existing course
of business. Not only is there in Baltimore five times the
volume of local banking transactions that there is in Richmond, but there is flowing to Baltimore a constant stream
of payments from other parts of the district, which normally
should be liquidated through the Federal reserve bank, and
which conveniently can be so liquidated only if the bank is
located at the center to which this business moves. To consummate these transactions through a Federal reserve bank
.at Richmond means that the whole course of this business
must be turned backward, that a business day must be lost
in mailing to Richmond, from the Baltimore banks, these
very checks, many of which on their way to Baltimore have
already passed Richmond.
If the Federal reserve bank is located at the natural commercial capital of the district, where in the customary course
of business the greatest volume of payments flow, and where
also by far the largest volume of local transactions occur,
manifestly the convenience of business is best subserved.
Thus, and only thus, can be made possible the consummation,
6n the same business day, of the receipt, deposit and collection of a larger volume of out of town business than flows
into any smaller place in the district, as well as the handling
of local business five times larger than exists at Richmond
or at any other place in the district. Necessarily, wherever
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a Federal reserve bank is located, practically one business
day will be consumed in all cases (with one important exception in the Fifth District) of transactions between such
bank and banks situated anywhere in the district outside of
the Federal Reserve City. This cannot be avoided. Ordinarily, only business in or very near the Federal Reserve
City itself can be begun and consummated on the same day.
Common sense and convenience, therefore, dictate the location of Federal reserve banks at natural commercial capitals, so that the greatest volume of business may enjoy this
saving of time resulting from the proximity of the Federal
reserve bank to the business. With a Federal reserve bank
located at Richmond, all Richmond local business, and also
the comparatively small out-of-town business coming to Richmond, could be transacted, by customers with the local banks
and by the local banks with the Federal reserve bank, on
the same day. With respect to all other business in the
district, practically a day would be consumed in communication by mail between the member bank and the reserve bank.
With the Federal reserve bank in Baltimore, fully five
times this volume of business would be immediately liquidated without the loss of this day, and (except only the business going to Richmond itself), all other business in the district could be handled just as conveniently as if the Federal
reserve bank were at Richmond.
The proximity of Baltimore and Washington multiplies
the convenience of locating a Federal reserve bank at Baltimore. These two cities are so situated geographically and
have such abundant means of communication by railroad
and such frequent mail service that they constitute a unique
and important exception to the general rule that only the business in a Federal reserve city itself can be transacted with a
Federal reserve bank without the loss of a day. Geographically, Baltimore and Washington are practically suburbs of
each other, with almost as easy communication as Manhattan
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Federal Reserve Bank of St. Louis
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and Brooklyn. With respect to the relative convenience of
business, therefore, the difference between locating a Federal
reserve bank in Baltimore and locating it at Richmond is
practically not merely the difference between locating it in
the commercial capital of the district, and locating it in
another place one-fifth the size of such capital. The real
difference is the difference between locating the bank in a
community of a million people and locating it in a place of
one-seventh that size.
The practical importance of a due regard to the customary
course of business and the inconvenience necessarily resulting from a disregard of the course of business were well
stated in the testimony of Mr. Levi L. Rue, President of
the Philadelphia National Bank and Chairman of the Clearing House Committee of Philadelphia, before the Organization Committee. Mr. Rue's remarks were addressed to the
buggestion that a Federal Reserve Bank be located at Pittsburg, although the customary course of business is from
Pittsburg to the east-and northeast, i. e., to Philadelphia and
New York. What Mr. Rue said on this point is so manifestly applicable to any proposal to turn backward the course
of business, as from Baltimore to Richmond, that we may
well quote Mr. Rue's exact words:
"THE SECRETARY OF AGRICULTURE —* * * What
,
would the banks do, do you think, if Pittsburg were
made the head ?
MR. RUE—I think Pittsburg would be an unnatural
location, for this reason. The course of trade is to the
east and northeast. The best evidence as to what is the
real course of trade is the demand for exchange. That
shows the course of trade, where a merchant has to make
his settlements. Now Pittsburg exchange is never
sought. The fact is it is shunned by—
THE SECRETARY OF THE TREASURY—It does not pass
at par? ,
MR. RuE—You make that comment, sir. I simply
said shunned. And why is it shunned? Because it is
not needed, and no settlements are made in Pittsburg.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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THE SECRETARY OF THE TREASURY—BUt under this
situation the exchange will be at par, and so the parring
of exchange everywhere will correct that situation.
MR. Rim—But what would be the result, if a Federal
Reserve Bank was put in Pittsburg, and the demand for
the exchange, if the Philadelphia banks had to throw
into Pittsburg, we will say, and all this section towards
the west, the business which they get which produces
their exchange. Now as I say, the trend of trade is
east and northeast.
THE SECRETARY OF THE TREASURY—It would get
down to a question of clearance, that is all.
MR. RUE—Exactly. The result would be from a practical standpoint that the banks of this territory which
I have outlined there in Section 3, would send their
business of that description out to Pittsburg with the
loss of a night or a day's mail, to that bank to create
reserve in their Federal Reserve Bank. Now what
would that Federal Reserve Bank do with it? It would
have to send it for collection eastward again, either to
a Federal Reserve Bank in New York, or Atlanta or
Boston, or wherever you gentlemen may,in your wisdom,
locate them. And the merchants of Philadelphia, our
reserves being in Pittsburg, say, would have an
exchange, which while you say it would pass at par
through these other Federal Reserve Banks, would be
unnatural, and it would create such a preponderance
of exchange against the Federal Reserve Bank at Pittsburg, that it would be a continual debtor to the Federal Reserve Banks of the east, and would require a
constant shifting of balances of currency. I do not care
how you locate these banks, you cannot overcome the
laws of trade.
THE SECRETARY OF THE TREASURY—That 1S exactly
what we do not want to do.
MR.. RUE—I know that, I am sure you do not, but
you cannot overcome the laws of trade.
THE SECRETARY OF THE TREASURY—That is the reason this is the kind of information we want.
MR.. RUE—I understand, and I am trying to explain
that you cannot overcome the laws of trade. If you
should place a Federal Reserve Bank in Pittsburg to rep-
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Federal Reserve Bank of St. Louis
49
resent this eastern district, the balance of exchange is
always eastward, because there is always the great
density of population, and the great consuming powers,
and there are the important ports, and settlements have
to be made in the east. Now the Federal Reserve
Bank in Pittsburg would be a continual debtor to the
Federal Reserve Banks on the Atlantic Coast, and
would require continual shifting of money to off-set
that debit balance.
THE SECRETARY OF •AGRICULTITRM—SUppOSe you
took exactly the same area, and put it in Pittsburg, instead of in Philadelphia.
MR. RUE—The same situation exists.
THE SECRETARY OF AGRICULTURE—YOU would have
exactly the same amount of banking power?
MR. RUE—You would have exactly the same amount
of banking power, but you would be going contrary to
the law and trend of trade. The trend of trade is
eastward and northeastward, towards the density of
population, and the Pittsburg bank, even if you make
the district as it is, would be a continual debtor to the
east, as it is now, and you would put a great expense
on that bank in making credit balance against the tremendous debit that would be coming from the other
Federal Reserve Banks in the east, which gets the vast
volume of exchange.
THE SECRETARY OF THE TREASURY—Would the difficulty be lessened if Baltimore were made the headquarters I mean as against Pittsburg?
RuE—Surely.
THE SECRETARY OF THE TREASURY—And SO far as
Washington is concerned, you think it would not be
lessened anything like the same degree as if Baltimore
were chosen?
MR. RUE—I think Baltimore and Washington are on
a par as far as exchange goes.
THE SECRETARY OF THE TREASURY—Baltimore has a
very large foreign exchange?
MR. RUE—Comparatively, sir. T will touch upon
that later on.
60
OF THE TREASURY—We do not want
interrupt your argument, but sometimes it elucidates
to
the matter to bring out points as you touch upon them.
MR. RuE—I understand. Banking is the servant of
commerce, hence banking facilities must follow commercial transactions. * * *"
(Testimony, pages 1036-1040.)
THE SECRETARY
(b) BALTIMORE, THOUGH NEAR THE NORTHERN END OF
THE DISTRICT, IS A?CCESSIBLE TO ALL PARTS OF THE
DISTRICT, AND IS WITHIN SEVENTEEN HOURS BY MAIL
OF PRACTICALLY EVERY CITY IN THE DISTRICT, SO
THAT BUSINESS TRANSACTED BY MAIL FROM ANY PART
OF THE DISTRICT CAN BE CONSUMMATED ON THE NEXT
'BUSINESS DAY AFTER IT IS BEGUN. RICHMOND IS
FARTHER DISTANT THAN BALTIMORE FROM THE MOST
DISTANT CITY IN THE DISTRICT.
A bank does not bear the relation to business which a road
house bears to travel. If it did, Trenton and Wilmington
would be greater banking centers than New York, Philadelphia or Baltimore, the Bank of England might have its
headquarters at Oxford, and the Bank of France somewhere
in the chateau country. A bank should naturally be located
where the greatest volume of business is, and where consequently the greatest volume of business can be handled with
the greatest convenience, not at some point where business
can come with the least inconvenience or loss of time. If
the selection of a Federal Reserve City in a Federal Reserve
District were a mere problem in geometry,—like the location
of the center of population—Congress would doubtless have
turned this matter over to the statisticians in the Census
Department instead of authorizing the Oiganization Committee "to employ counsel and expert aid, to take testimony,
to send for persons and papers, to administer oaths, and
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Federal Reserve Bank of St. Louis
51
to make such investigation as may be deemed necessary by
the said committee * * * in designating the cities within such
reserve districts where such Federal reserve banks shall be
severally located."
When the committee located a Federal reserve bank at
Kansas City, on the very edge of a district, a thousand miles
from the other end of the district, it apparently realized
that mere distance is a subsidiary consideration, and that
the location of the commercial and financial center of a district is very different from the location of the geometrical
center. When Congress directed the Committee to pay "due
legard to the customary course of business," it was evidently
not ignorant of the difference (well known to every country
justice or scrivener), between courses and distances. In
other words, the direction in which business naturally flows
is more important than the distance it goes.
The consideration of distance is wholly irrelevant in the
Fifth District, for the simple reason that Baltimore is
within seventeen hours, i. e., within one business day, of practically every city in the district. That is to say, business
sent by mail to the Federal reserve bank at Baltimore can
be consummated on the next succeeding day. Business from
Baltimore with a Federal reserve bank in Baltimore can
be consummated on the same day. On the other hand, only
Richmond business itself, and no business from points outside of Richmond, can be transacted with a Federal reserve
bank in Richmond before the next succeeding day. In the
case of Baltimore there is not only the greater volume of
business in Baltimore, but (as we have already pointed out)
the peculiar opportunity for consummating Washington business on the same day. Practically the whole district being
within one business day of either Baltimore or Richmond,
the question of distance obviously becomes immaterial. The
exact hour in the day at which a mail transaction is consummated is unimportant. The relative convenience of loca-
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Federal Reserve Bank of St. Louis
52
tion in such a district (though this would by no means be
equally true in a district like the Kansas City district, where
days have to be counted) depends, therefore, not only primarily, but solely, upon the volume of business at the Federal Reserve City itself, or (in the case of Baltimore) upon
the volume of business of the hvin cities of Baltimore and
Washington.
Charleston, South Carolina, is the most distant from Baltimore of all the more important cities in the Fifth District.
The actual mailing time between Charleston and Baltimore
is seventeen hours. Charleston and Baltimore are thus well
within one business day of each other. For practical purposes, this is exactly the same situation as exists with resepct
to Richmond and Charleston, though the mailing time between Richmond and Charleston is only twelve hours (See
Appendix A).
As a matter of fact, Baltimore is actually nearer than
Richmond to the most distant point in the district,—as well
as to the greater volume of banking capital, resources and
business and general business in the Fifth District. The
erroneous assumption that Baltimore is farther distant than
Richmond from the distant portions of the Fifth District is a
not unnatural result of a superficial view of a map of the
district. The assumption is, however, erroneous in at least
two respects. First, it confuses geometrical distance with
geographical distance, air lines with practical means of
communication; in other words, distance in miles with distance in days and hours, which is the business way of measuring distance. Secondly, this assumption overlooks the
fact that the greatest distance (in time, by actual means of
communication) in the Fifth District is not from north to
Eolith, but from east to west. Distance from north to south
is greater on the map. This distance is, however, traversed
by trunk line railroads which bring Baltimore, at the north,
and Charleston, at the south of the district, well within one
business day. The western parts of the district are, however,
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Federal Reserve Bank of St. Louis
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not only separated from the east by mountains, but, with respect to Richmond at least, have not such direct communication as exists between Baltimore and the south of the district.
The most distant place in the Fifth District which has a
national bank is the town of Jonesville, in Virginia, which
is reached by mail only by a star route. The actual mailing
time between Richmond and Jonesville is 31 hours and 40
minutes. Between Baltimore and Jonesville the mailing
time is 31 hours. Jonesville has one bank, with $32,500
capital and surplus, and total resources less than $150,000.
Needless to* say, it is a small and, relatively unimportant
place. The same is true of almost every place in the district which is more than seventeen hours from either Baltimore or Richmond.
No place of 5,000 or more inhabitants, no place with more
than one national bank, no place with aggregate national
banking resources of $250,000 or more, is more than 24
hours distant from either Baltimore or Richmond. The
only places of 5,000 or more inhabitants more than 17 hours
distant from Baltimore or Richmond are Asheville, N. C.
(population, 18,762), 18 hours; Union, S. C. (population,
5,623), 18 hours; Sumter, S. C. (population, 8,109), 19
hours; Anderson, S. C. (population, 9,654), 20 hours 20
minutes, and Newberry, S. C. (population, 5,028), 21 hours
30 minutes, from Baltimore; and Newberry, S. C., 17 hours
30 minutes; Anderson, S. C., 18 hours 20 minutes, and
Cambridge, Md. (population, 6,407), 20 hours from Richmond.
On the other hand, Parkersburg, West Virginia, with five
national banks (which have total resources amounting to
about two-thirds of the total resources of the national banks
of Charleston, South Carolina), is 16 hours and 30 minutes
by mail from Richmond, and thirteen hours and thirty
minutes from Baltimore. The distance from Baltimore and
from Richmond, respectively, to the most distant of the
more important cities in the district is thus almost the same.
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(C) BALTIMORE, THOUGH FARTHER FROM THE Geometrical CENTER OF THE DISTRICT THAN RICHMOND, IS AT
THE CENTER OF GREATEST Density OF POPULATION
AND BUSINESS IN THE DISTRICT, AND IS, THEREFORE,
NEARER THAN RICHMOND TO THE GREATER Volume
OF THE BUSINESS TRANSACTED IN THE DISTRICT, AND
TO THE GREATER PART OF THE BANKING CAPITAL AND
RESOURCES OF THE DISTRICT, AND IS DIRECTLY IN THE
Course OF all BUSINESS, NEAR OR DISTANT; RICHMOND IS NOT ONLY MORE DISTANT FROM MOST OF THE
BUSINESS IN THE DISTRICT, BUT IS OUT OF THE GENERAL COURSE OF SUCH BUSINESS.
As a matter of fact, Richmond, though somewhat nearer
the geometrical center of the district, is not actually as near
the geographical center of the business of the district. In the
business world distance is measured in days not in miles.
As we have already pointed out, days—rather than hours or
fractions of a day—are important. Even in hours, however, Baltimore is nearer the greater volume and density of
business in the Fifth District than Richmond.
Filed as an appendix to this brief, marked "Appendix A,"
is a complete list of every city and town in the Fifth District
which has a national bank, with the number of national
banks, the total capital and surplus, and the total resources of
such national banks, and also the actual mailing time, calculated by the Chief Clerk of the Bureau of Information and
the Asistant Chief Clerk, Railway Mail Service, at the Baltimore Postoffice, between each place and Baltimore and Richmond, respectively. This list was limited to national banks,
only for the reason that complete statistics for all banks were
not readibly obtainable, and would moreover make the list
still more voluminous. The inclusion of complete statistics
for all banks would bring out more clearly the proximity of
Baltimore to the greater volume of banking capital and re-
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65
sources in the district, for the reason that in Virginia (most
of which is nearer to Richmond than to Baltimore) national
banks are relatively more important and represent a relatively larger part of the total banking resources and business
than in any other part of the district, while in Maryland
(all of which is nearer to Baltimore than to Richmond)
rational banks represent a relatively smaller part of the total
banking resources and business than in any other part of
the district. For example, taking the Comptroller's published figures for June 4th, 1913, the total resources of all
banks in Maryland, Virginia, District of Columbia, North
and South Carolina and West Virginia (without deducting
for the Panhandle counties) was $1,203,247,617, of which
the total for Maryland, District of Columbia and West Virginia was $694,989,798, i. e., 57% of the total for the five
States and the District (Comptroller's Report 1913, page
47). On the same date the total resources of national banks
in the five States and the District was $579,582,490, of
which the total for Maryland, District of Columbia and West
Virginia was $311,397,468, i. e., only 51%. As the complete list in "Appendix A" shows, all of Maryland and the
District of Columbia and most of West Virginia is nearer to
Baltimore than to Richmond, while all of North and South
Carolina, and most of Virginia, is nearer to Richmond.
The list set out in "Appendix A" shows that out of 478
national banks in the Fifth District (on August 9th, 1913),
212 national banks, having an aggregate capital and surplus
of $51,573,570, and resources of $293,770,622, are nearer
by actual mailing time to Baltimore than to Richmond, while
250 banks, with an aggregate capital and surplus of $49,699,130, and total resources of $258,518,775, are nearer
to Richmond than to Baltimore. Sixteen banks, with an
aggregate capital and surplus of $2,787,000 and total resources of $14,837,975, are distant the same number of
hours and minutes from Baltimore as from Richmond. The
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greater number of banks nearer Richmond, with much less
capital, surplus and resources, is made up largely of very
small country banks in the remote parts of Virginia and
the Carolinas.
"Appendix B" shows, from the same figures, that the
average distance in hours from Baltimore to all the national
banking resources of the district is less than the average distance from Richmond. In "Appendix B" all of the national
banking resources in the Fifth District are twice grouped
by hours; first by the number of hours from Baltimore; and,,
second, by the number of hours from Richmond. In each
case all of the national banks in the Fifth District fall into
thirty-one groups. The first comprises only the resources at
a distance of zero from Baltimore to Richmond, respectively,
i. e., the resources of the national banks at Baltimore and
Richmond, respectively (including those at Canton, CatonsNille, Pikesville and Towson, in the Baltimore suburbs, constituting a part of Baltimore itself so far as mail service is
concerned). The next group (there being no places between
zero and one hour from either Baltimore or Richmond) includes all places not less than one hour nor more than one
hour and fifty-nine minutes from Baltimore and Richmond,
respectively. The next group includes those places between
two hours and two hours and fifty-nine minutes, and so on
up to the last groups. In the case of Baltimore the last group
(from 31 hours to 31 hours and 59 minutes) comprises Jonesville, Virginia, alone; in the case of Richmond, also, the last
group comprises Jonesville only, but is the group from
hours to 34 hours and 59 minutes.
Taking the mean distance (of 11 2, 21 2 and 31 2 hours,
/ /
/
etc.) for each group as applicable to all the resources in that
group, multiplying the total resources in each group by such
mean distance, adding the products thus obtained, and dividing this total by the total resources in the whole district,
gives the average distance in hours of all the resources (of
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Federal Reserve Bank of St. Louis
57
national banks) in the District from Baltimore and from
Richmond, respectively. From Baltimore this distance is
7.3 hours; from Richmond, 8.1 hours.
The natural course of business is all-important; mere distance is relatively unimportant. This was forcibly illustrated in the testimony before the Organization Committee
of those persons from North and South Carolina whom Richmond so cleverly enlisted in its campaign for a Federal
Reserve Bank at Richmond. South Carolina is nearer Atlanta than Richmond; most of North Carolina is as near or
nearer Atlanta. Nevertheless Richmond succeeded in enlisting the aid of bankers and business men of North and South
Carolina. Their reason (which they frankly avowed) for
aiding Richmond was that the course of business is from the
south north; they wanted to be connected with a bank north
of them, not with Atlanta. They greatly feared that Atlanta
might be made the Federal Reserve City in a district including North and South Carolina. They looked to Richmond
to save them from Atlanta; naturally, they remained loyal
to Richmond, when Baltimore was suggested to them. For
example, Mr. Rhett, of Charleston, South Carolina, replied
that he thought it would be inconvenient to have the bank
at a corner of the district. As a matter of fact, Charleston
is more distant from Richmond than from Atlanta, but Mr.
Rhett and the South Carolina bankers wanted the bank at
Richmond for the very reason that they were alarmed at the
prospect of being put in the Atlanta district (Testimony,
pages 924, 931). Mr. Rhett did not, however, undertake to
say that even in South Carolina (where the supposed disadvantage of distance should be most felt) there was a uniform
preference for Richmond as against Baltimore. He merely
expressed a belief that from 60 to 80 per cent of the banks of
South Carolina would prefer Richmond (Testimony, page
928). This estimate (though made by a Richmond partisan)
doubtless comes nearer expressing the real business judgment
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Federal Reserve Bank of St. Louis
68
of South Carolina bankers than any mere vote, at a later
stage of such a campaign, reflecting, as such a vote must do,
sentimental considerations and other considerations evoked
by campaigning methods.
Mr. Rhett, however, like Mr. Seay and others from Richmond itself, evidently realized that Baltimore is the natural
capital of any district in which Maryland is the most northern
State. In advocating Richmond as the Federal Reserve City,
he, therefore, left Maryland out of his proposed district.
Indeed, his remark (above referred to) as to the inconvenience of having a reserve bank at a corner of a district, was
made in reply, not to any mention of Baltimore by name,
but to a suggestion from the Secretary of the Treasury:"Suppose you put in Maryland ?" That, to Mr. Rhett's mind,
meant that Baltimore, not Richmond; must necessarily be
the Federal Reserve City.
The following resolution of the South Carolina bankers
clearly expresses (1) their fear of being placed in an Atlanta
district, though Atlanta is nearer South Carolina than Richmond is; (2) their realization that a district with Richmond
as the Federal Reserve City must lie wholly south of Maryland; and (3) the importance of the course of business and
the unimportance of mere distance:
"That the banks of South Carolina favor the formation of a north and south district along the Atlantic
coast, beginning with the southern boundary of Maryland as its northern limits, and extending from thence,
southward. That the banks of South Carolina deem
it exceedingly detrimental to their interest and the
interests of the State for them to be placed in a district running east and west, with a reserve city located
to the west of them, such being inconvenient to them
and entirely out of the customary course of their business." (Testimony, page 927.)
The President of the North Carolina Bankers Association
said frankly that the North Carolina bankers feared being
placed in an Atlanta district
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"I will tell you frankly what we feared. * * * We
wished to be connected north of us, as the entire trend
of our trade is toward the north. We feel as if it
would be almost a calamity to be connected with the
points south of us." (Testimony, page 912.)
He added that if "after co-operation with the City of
Richmond" it is found impracticable to secure the location
of a Federal reserve bank in Richmond, the North Carolina
hankers would prefer some other city north of them as second
choice, and that personally his second choice was Baltimore.
(Testimony, page 913.) This notwithstanding the fact that
Atlanta is, of course, nearer most of North Carolina than
Baltimore is.
One of the North Carolina bankers thus abruptly expressed
his views on the possibility of being connected with Atlanta:
"Should we be connected with a point south of us,
we would be connected with a dead end * * *." (Testimony, page 919.)
Another North Carolina banker (who said he spoke for
the bankers of the entire State), said that "such a thing as
going south of us to borrow money never occurs to any
bankers in North Carolina." Whereupon the Secretary of the
Treasury remarked: "That perhaps shows you are intelligent
bankers in North Carolina." (Testimony, page 918.)
The Organization Committee (apparently trying to save
the country banks of North and South Carolina from what
they considered the calamity of being connected with a "dead
end" south of them, and at the same time to gratify the
wishes of the Richmond campaigners), has inflicted upon the
business interests of the commercial metropolis of the entire
district the very calamity which the Carolina bankers have
succeeded in averting, and has attempted to turn back the
natural course of business by making the bankers of Baltimore
do what the Secretary of the Treasury says the North Carolina bankers show their intelligence by not trying to do.
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BALTIMORE IS NOT ONLY THE NATURAL CAPITAL OF BUSINESS GENERALLY IN THE
FIFTH DISTRICT, BUT IS ALSO THE NATURAL CENTER OF BUSINESS ACTIVITIES IIAVING SPECIAT. RELATION TO THE BUSINESS
OF FEDERAL RESERVE BANKS.
(a) BALTIMORE IS A NATURAL RESERVE CITY; RICHMOND,
IN THE BANKING WORLD, IS A COUNTRY TOWN AND THE
LOCATION OF COUNTRY BANKS.
The only compulsory relation (other than stock ownership)
established by law between the Federal reserve banks and
the member banks is the deposit of part of the reserves of
the member banks. The only business which these new
banks must have from the time they are established is the
keeping on deposit of reserves in an amount gradually increasing up to the permanent amount which will prevail after
three years. One of the many causes for astonishment at
the selection of Richmond as a Federal Reserve City is that,
in a district containing two important reserve cities, Baltimore and Washington, a country town (to use official banking parlance) should be selected as the Federal Reserve City.
In this case, the place selected had for almost half a century
elected to remain a country town, and not to take advantage
of the opportunity to become a reserve city, with the privileges of a reserve city and the corresponding obligation, on
the part of Richmond's national banks, to keep a larger reserve
than is required of country banks.
By the Act of 1864, ch. 106 (Rev. Stat., sec. 5191) the
following sixteen cities were made reserve cities under the
National Banking Law:
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Federal Reserve Bank of St. Louis
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1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
Boston
Federal Reserve City under new law.
it
it
iC
CC
ie
te
Chicago
it
le
it
it
Cleveland
it
ll
il
it
New York
le
it
le
el
it
Philadelphia
CC
le
it
ii
St. Louis
ti
il
ti
CC
San Francisco
Albany
Not a reserve city under new law.
el
le
Ci
el
4C
ii
Baltimore
Ce
el
et
Cincinnati
le
le
ee
Detroit
el
le
CC
le
Louisville
el
le
le
Milwaukee
CC
it
et
CC
te
New Orleans
ee
CC
CC
le
Pittsburg
el
le
te
CC
Washington
It is to be observed that Baltimore and New Orleans were
made reserve cities by the Act of 1864 and have been such
ever since, and yet they are ignored in favor of Richmond
and Atlanta, which were not reserve cities under the old Act
of 1864 at all.
It is further to be observed that by the Act of March 3,
1887, ch. 378, any other city of 50,000 people [changed to
25,000 by Act of March 3, 1903] could on application of
three-fourths of the national banks located in said city, be
designated a reserve city. TTnder this Act a number of other
cities applied until now there are forty-seven reserve cities.
Among them are:
Dallas
Kansas City
Minneapolis
Federal Reserve City under new law.
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The only two cities designated as Federal Reserve Cities
under the new law that were not reserve cities under the old
law are Atlanta and Richmond.
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So here again Baltimore is discriminated against. It has
been a reserve city since 1864.
Richmond was mentioned in the Act of 1864, ch. 106, sec.
31, as being a city that could be added to the reserve cities
whenever in the opinion of the Comptroller of the Currency
the condition of the Southern States would warrant it.
The time for this condition has long since passed, but
Richmond has always failed to make application to become
a reserve city, until after her designation as a Federal Reserve City under the new law.
In the work of Conway and Patterson on The Operation
of the New Bank Act, published in February, 1914, the
authors expressed what was evidently a universal opinion,
thus:
"Looked at from another point of view, the problem of the shifting Gif the reserves of the reserve city
banks is not so serious as would be indicated by the
preceding general comparison. It is practically certain that the three central reserve cities will be selected
for the establishment of Federal reserve banks; and
it is equally certain that the remaining reserve banks
—five in number, if eight are established, and nine in
number if the maximum of twelve are established—will
be located in the reserve cities. In other words, from
five to nine of the forty-seven reserve cities will be the
homes of the Federal reserve banks, and the fortunate cities will probably be numbered among the larger
of the forty- seven." (page 265.)
Richmond bankers themselves evidently realize the incongruity of locating a Federal reserve bank among country
banks. They have shown their appreciation of this incongruity by the remarkable course of applying to be made a
reserve city since the Committee announced its decision designating Richmond as a Federal Reserve City. This application the Comptroller of the Currency, with at least doubtful
legality [Federal Reserve Act, sec. 11(e)] granted. By the
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advertising which they expect to get from the Organization
Committee's extraordinary decision, and by their own recognition of the incongruity of locating a Federal reserve bank
among country banks, the Richmond banks have thus been
induced to ask to be made a reserve city,—which they consistently omitted to ask during all the years when the status of
reserve city carried with it advantages as well as responsibility. Now this status means (except to a limited extent
for three years) only a permanent increase in the required
reserve of all Richmond national banks, with,out any permanent privilege of holding the reserve of other banks or any
other permanent privilege whatever. This belated application to be made a reserve city displays the sharp contrast
between a natural reserve city like Baltimore (which has
exercised the privileges and borne the burdens of a reserve
city for half a century), and the artificial advantages which
a smaller city, such as Richmond, may expect to get from its
selection as a Federal Reserve City in disregard of the convenience and customary course of business.
Strange to say, the Honorable Carter Glass and the Organization Committee profess to find, in the fact that Baltimore
was by law a reserve city, an artificial advantage which
Baltimore possessed over Richmond. Just how Baltimore
could get any artificial advantage out of being a reserve city,
a privilege which Richmond or any other city of its size could
have had for the asking, and which forty-seven cities as a
matter of fact have so obtained, the Honorable Carter Glass
s;nd the Committee do not explain.
We had supposed that the artificiality of the present system lay, not in drawing reserves to the reserve cities, but in
drawing them from the reserve cities to the central reserve
cities, almost entirely to New York City. The reserve requirements exacted of central reserve cities are such that
other cities could not successfully compete as central reserve
cities with New York. Thus the misting system operated
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still further to concentrate the money of the country in New
York, where there was already the greatest previous concentration. The number of reserve cities, originally sixteen, increased steadily to forty-seven. The number of central reserve cities, originally three, has remained unchanged, with
increasing concentration in New York as compared with Chicago and St. Louis. This contrast is sufficient to show that
(whatever artificial concentration the present system may
have produced in central reserve cities, particularly in New
York as compared with cities not so well equipped to compete
for the burdensome and somewhat dangerous opportunities of
central reserve cities), the law has produced no such artificial
concentration in reserve cities. Rather has it concentrated
into New York from the reserve cities the resources which
otherwise might naturally have accumulated in a considerable number of large cities. Indeed, the purpose of the
Federal Reserve Act would seem to be, on the one hand to
decentralize artificial concentration in New York City, and
on the other hand to concentrate, in not more than twelve
places, under unified control by the Federal Reserve Board,
the reserves which naturally (not artificially) had to a very
limited extent been centralized (without any unified control)
in forty-seven reserve cities.
With respect to artificial methods, the truth is that the
Richmond banks have, and the Baltimore banks have not,
regularly employed the most efficient artificial method known
for getting bankers' deposits, i. e., the payment of interest
on such deposits. The very fact that Richmond has not
been a reserve city, and Richmond banks, as country banks,
have, therefore, been required to keep a reserve of only fifteen per cent against their deposits, has, of course, made it
easier for them to pay a high rate of interest on deposits
than if they had been subject to the twenty-five per cent
requirement applicable in reserve cities. This is undoubtedly
the reason why Richmond so long omitted to ask for the
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"artificial advantage" of being a reserve city. The payment
of interest on deposits kept by other banks is so efficient a
method of getting such deposits that it has generally been
regarded as an efficient method employed by the New York
banks to utilize their opportunities for concentrating the
money of the country in New York City. Baltimore is not
an exception to what has now become a general rule of paying interest on bankers' deposits. Baltimore banks, however,
generally pay but two per cent, while the Richmond banks
customarily pay three per cent on such deposits. [Testimony,
Mr. Newcomer, pages 738, 741 Mr. Ingle, page 804; Mr.
Sands, page 845.] This unusual rate of interest is manifestly a most important artificial inducement of deposits by
other banks with Richmond banks.
The fact is, Baltimore is a reserve city because it is a
natural place for country banks to keep accounts under the
existing sytsem. Being a reserve city is the result, not the
cause of other banks keeping accounts in Baltimore. On
October 21st, 1913, the national banks of Baltimore held
bankers' deposits from the Fifth District amounting to $18,730,000, of which only $7,887,000 were deposits kept by
national banks. [Figures obtained by Mr. Wm. Ingle from
each of the national banks in Baltimore.] That is to say,
less than half of the total bank deposits from the Fifth
District kept with Baltimore national banks were so kept
by banks which could, under the National Bank Act, count
these deposits as reserves. As a matter of fact, doubtless
only a comparatively small part of even this $7,887,000 of
balances of national banks actually represented necessary
reserve of the depositing banks. Accounts kept with reserve
agents are usually, for purposes of exchange and other business purposes, considerably larger than the minimum reserve requirements of the law. In other words, country
banks keep their reserve where for business reasons they keep
accounts. They do not keep accounts simply because they
count as reserve. On October 21st, 1913, the 7143 country
banks in the United States had on deposit with approved re-
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66
serve agents $533,837,506. Of this only $320,138,407 could
be counted as reserve under the law. There was thus on deposit with reserve agents $213,699,099 which could not be
counted as reserve. The same country banks then held cash
$56,921,542 in excess of the 6% cash reserve required by
law. They, therefore, had $56,921,542 more on deposit
which legally could be counted as reserve, but actually was
not needed to meet reserve requirements. This makes a
total of $270,610,641 either not available or not needed for
reserve ;requirements. The actual balances with reserve
agents were thus more than twice the minimum reserve requirements of the National Bank Act.
On October 21st, 1913, the total bank deposits with all
the banks and trust companies in Baltimore was $37,861,201,
In Richmond the corresponding figure was $12,634,413. The
fruit of the efforts of the Richmond banks to get bank deposits by paying an unusually high rate of interest would
seem to be that, while the individual deposits of Richmond
banks are less than one-fifth the individual deposits of Baltimore banks, the bank deposits are one-third the amount of
such deposits kept with Baltimore banks without such inducements.
(b) BALTIMORE IS NOT ONLY THE PRINCIPAL BANKING
CENTER IN THE DISTRICT, BUT IS ALSO THE CENTER OF
THE GREATEST VOLUME OF COMMERCIAL CREDITS ExTENDING THROUGH THE DISTRICT. IN THESE TWO
RESPECTS IT PRESENTS THE LARGEST OPPORTUNITIES
IN THE DISTRICT FOR THE DEVELOPMENT OF THE REDISCOUNTING BUSINESS OF THE NEW FEDERAL RESERVE
BANK.
We repeat, the Federal reserve banks constitute not an
independent system but a very important addition, superimposed upon our present banking system, and intended to
render service, directly or indirectly, to all existing banks
and all existing business. The natural location of such
banks is, therefore, primarily where business is concentrated
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and where business from other points flows,—without special
reference to the particular kinds of business or the particular
kinds of banking most prominent at such a point. The new
system is not designed to prohibit or compulsorily to restrict
existing current banking transactions of any kind. It is intended to put (to a much greater extent than heretofore)
in the class of liquid assets (and, therefore, in the class of
assets that can be most freely and most widely dealt in)
commercial paper, which under the present system and prevailing customs is at a disadvantage in this respect. In opening a channel for the general rediscounting of commercial
paper, the new law should undoubtedly make it easier for
banks to extend their loans on commercial paper where the
needs of business call for such extension. The primary
effect, however, of extending the liquid character of commercial paper is essentially to aid all banking and to aid all
business, even where further extensions of commercial credit
are not needed.
Banking itself is essentially a liquid businiess. Whatever
makes more easy the current of any part of the business correspondingly eases the flow of the whole business. For example, in a given locality the banks may already be extending substantially all the credit needed on commercial paper.
In the same locality there may be actual need for increased
collateral loans, in form similar to the stock exchange loans
in New York, but in fact (particularly in Baltimore and in
the South) often representing bona fide industrial advances.
These industrial advances take the form of loans to a corporation secured by its own bonds; actually they could not
easily be quickly liquidated, and are likely to run for several
years, in fact for a much longer period than ordinary commercial paper. In such a region there would be practically
no ocasion for an extension of loans on commercial paper, in
the sense in which such loans are generally now made. On
the other hand, there would be actual need, for substantial
industrial purposes, of further advances by collateral loans
similar in form to mere speculative stock transactions. The
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new law would, however, doubtless benefit such a locality in
either of two ways. By making existing commercial paper
a more liquid asset, the banks would to that extent be made
more free to extend their loans of the kind that practically
are not liquid assets. Moreover, many of the advances for
industrial purposes which now take the form of collateral
loans might, under the new system, doubtless be financed by
commercial paper. Mr. Warburg stated before the Congressional Committee that commercial paper will, because of this
change [the power of rediscount] largely take the place of the
call loans upon collateral securities as the secondary reserve
of our banks, thus making available for the business community a large amount of money which up to the present
time, because of the inherent defects in our banking system,
has necessarily been denied them. [Conway & Patterson,
pages 99-100.]
It is, therefore, essentially fallacious to undertake to ignore the totality of business in a city or region, and to pick
out a particular class or classes of business as the kind of
business to be affected by the new Federal reserve system.
This is true for two reasons: (1) Because the increased
fluidity of commercial paper means increased banking facilities in every city that has any commercial paper at all,
whether it is necessary to extend that line of business or not;
and (2) because it is impossible to tell how much business
which the necessities of the present system cause to be financed
in other ways will hereafter come to be financed through commercal paper.
Necessarily, therefore, the importance of all business,
rather than any single part of the commercial business of a
city, is to be emphasized. It is, however, to be said, for what
it is worth, that Baltimore is the center of the greatest volume of the commercial credits which may at least be assumed
to constitute a basis of need for expansion in the handling of
commercial paper by banks, and for the development of the
rediscounting business by the reserve banks. It is unnecessary to repeat at this point what has already been said as to
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the jobbing business and manufactures in Baltimore, and the
thousands of accounts kept in the south. These accounts constitute a great mass of commercial credit, which is now
financed through Baltimore merchants on their own credit,
but may possibly in the future be financed through the
rediscounting functions of the Federal reserve banks.
(C) AS THE PRINCIPAL ATLANTIC SEAPORT OF THE SOUTH,
WITH DIRECT AND EASY MEANS OF COMMUNICATION BY
LAND WITH NEW YORK, PHILADELPHIA, CHICAGO, BosTON, CLEVELAND, AND GENERALLY ALL OTHER FEDERAL
RESERVE CITIES, BALTIMORE IS THE NATURAL LOCATION OF THE FEDERAL RESERVE BANK FOR THE FIFTH
DISTRICT, IF SUCH BANK IS SUCCESSFULLY TO PERFORM ITS BROADEST, AND IN TIMES OF STRESS MOST
IMPORTANT, FUNCTIONS IN (1) KEEPING IN CLOSE
TOUCH WITH AND INFLUENCING GENERAL MONEY AND
CREDIT CONDITIONS; (2) CO-OPERATING WITH THE
OTHER FEDERAL RESERVE BANKS FOR THESE PURPOSES,
AND ALSO IN DEVELOPING THE COLLECTION FACILITIES
OF THE NEW SYSTEM AND MAKING POSSIBLE PRACTICALLY FREE DOMESTIC EXCHANGE THROUGHOUT THE
UNITED STATES; (3) IN SUCCESSFULLY COMPETING IN
THE MARKET FOR THE PURCHASE AND SALE OF FOREIGN EXCHANGE, WITH THE CONTROL OVER GENERAL
MARKET CONDITIONS RESULTING FROM THE ESTABLISHMENT OF SUCH A BUSINESS; IN DEVELOPING THE USE
AND SALE OF AMERICAN ACCEPTANCES, WITH CONSEQUENT INCREASED FACILITIES FOR THE DEVELOPMENT
OF AMERICAN FOREIGN TRADE; AND GENERALLY IN DEVELOPING, AND AIDING THE DEVELOPMENT OF, FOREIGN
CONNECTIONS OF TIIE RESERVE BANK AND OF THE
MEMBER BANKS IN THE DISTRICT.
The Federal reserve banks are expected to be always
with us, to constitute an integral part of the unified banking system which is to be in operation day in and day out
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and year in and year out. The principal purpose of Congress, however, in devising this addition to our existing system, was evidently not so much to improve conditions at
ordinary times as to provide a more satisfactory system in
times of stress. The occurrence of panics and the inadequacy
of the present system to deal with panics were undoubtedly
foremost in the minds of Congress, as they have been in the
minds of all who have interested themselves in banking and
financial reform in this country. Except for certain so-called
seasonal strains (which have not been greatly felt since the
panic of 1907), our existing system has been fairly satisfactory in ordinary times. It is in times of stress that the
weaknesses of the present system become manifest. These
weaknesses it was the prime purpose of Congress to cure.
The shifting of reserves from present reserve agents to the
Federal reserve banks, the development of the business of
rediscounting, and the issuance of a new form of currency,
are the features of the new system that have received the
greatest public attention. Of these three features, necessarily
the first, probably to a considerable extent the second, and
perhaps to some extent the third, will characterize the routine
conduct of the business of the reserve banks, and may, therefore, constitute the greatest volume of their transactions.
In times of stress, however, to perform successfully the
functions required of them, the Federal reserve banks must
go beyond their mere routine business; they must have, and
be able to exercise, broader powers. Primarily, they must be
able to act in unison and to act not only with a comprehensive
grasp of internal conditions in this country, but also with
full knowledge of and as great control as possible over, general market and money conditions abroad and in the world
markets. Congress has fully recognized these needs and has
provided for them (1) by both the permissive and the compulsory powers granted to the Federal Reserve Board, and to
the Federal reserve banks themselves, with reference to redis-
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counting between districts, domestic exchange, collections
and clearances [Section 11 (b), Section 16 (last two paragraphs), Section 13], and (2) by the broad powers, conferred
upon the Federal reserve banks, to engage in so-called "openmarket operations" of practically every kind, so far as foreign
business is concerned [Section 14], and also by the extension
of the powers of existing national banks with reference to
foreign transactions [Section 13 (paragraph 5); Section 25].
Manifestly, Baltimore is, and Richmond is not, naturally
adapted (1) to efficient communication and co-operation with
the other Federal reserve banks, and (2) to the establishment and furtherance of foreign relations and connections (on
the part of both the reserve banks and member banks), and
to dealing in foreign exchange and developing the business
of American acceptances in connection with export and import business.
With respect to relations between the different reserve
banks, Baltimore obviously not only is geographically nearer,
but already has much more intimate business relations than
Richmond has with Boston, New York, Philadelphia and Chicago,—which are the reserve banks with which the reserve
bank of the Fifth District would naturally have the most important relations. In the matter of mere distance and means
of communication, Baltimore is in direct line of communication with every other Federal Reserve City yet designated.
Baltimore is nearer than Richmond to every other city, except Atlanta and Dallas. Concerning existing relations between the cities, it is safe to say that Baltimore's relations
are much more intimate than Richmond's with every other
Federal Reserve City, not excepting Atlanta. Even Atlanta is in direct communication with Baltimore without
going through Richmond. The fear so strongly expressed
by North and South Carolina bankers of being connected
with the Atlanta district, the emphasis which they lay on
the total absence of banking transactions between Atlanta
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and the Carolinas, and the fact (rbadily recognized by the
Secretary of the Treasury) that Atlanta is in a borrowing,
not a lending, district,—all go to show that the relations between the Fifth District and the Sixth District will be much
less important and less intimate than the relations between
most other adjoining districts. These considerations suggest
that, when special interdistrict transactions become necessary, both the Fifth District and the Sixth District banks are
much more likely to have business transactions with the more
northern banks at Philadelphia or New York than they are
to have transactions with each other.
Existing relations between Baltimore and the other large
cities of the United States are also important with respect
to the development of the collection and clearance facilities
of the new system. The development of these facilities present great possibilities—practically free domestic exchange
throughout the United States. The realization of these possibilities depends upon the practical efficiency with which the
Federal reserve banks exercise their powers with respect to
collections and clearance. Their legal powers are ample for
these purposes. Prompt and efficient existing facilities will
not, however, be supplanted, even by nominally free exchange
and collection through the new banks, unless such free service
is also actually efficient. Nothing could be more calculated
to thwart the performance of these functions by the new
system than the designation of Federal reserve cities which
are situated out of the natural current of collections and exchange. •
An illustration of the possibilities of the new system to
effect changes in existing banking arrangements, and also of
the fact that most businesses concentrate in large cities, is
afforded by the bonding companies and by the insurance
business. Baltimore is the place of origin of bonding companies. In the year 1913 the three leading Baltimore bonding companies paid in losses $8,614,306, had total expenses
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aggregating $18,781,941, and total income amounting to
$21,254,365, and total assets worth $25,571,120. [The
Handy Chart of casualty, surety and miscellaneous insurance
companies in America, published by the Spectator Company.]
These companies do business in almost every part of the
world. The nature of the business is such that most of it is
done in or from large cities. Necessarily both in the collection of income and in the payment of expenses such a business requires frequent transfers of funds from one place to
another. The transfers most frequent and greatest in amount
are naturally those between the larger cities. The payment
of losses involves not only the same frequency of payments
over almost unlimited area but also (unlike transfers by a
company to itself from one point to another) the additional
element of providing exchange which will be worth par to all
these numerous payees. Under existing conditions most of
such payments made at distant points in the United States
have to be made in New York exchange. If the collection
facilities of the new system prove efficient, the bonding companies (and similarly all other insurance companies) can
make pay losses anywhere in the United States from accounts kept with any member bank, instead of paying by a
New York check or draft simply to make payment at par.
In the case of the Baltimore companies the natural result,
in such event, would be an increased use of Baltimore bank
accounts and consequently increased deposits with Baltimore
banks.
Manifestly the chance of supplanting existing facilities
by the new system would be small if such exchange with
Baltimore and collections at or from Baltimore had to be
made through Richmond. The home office business of the
Baltimore bonding companies and the business of insurance
companies generally are but illustrations of businesses to be
found in a large city like Baltimore, which require banking
facilities, but which, in a smaller city like Richmond, either
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Federal Reserve Bank of St. Louis
do not exist at all, or are conducted and use banking facilities
(including collection and domestic exchange) to an extent
at most not relatively greater than the ratio between population or that between local clearing-house exchanges. In this
case either ratio is, of course, one to five.
With respect to foreign relations, there is simply no room
for comparison between Baltimore and Richmond. Baltimore is one of the most important seaports in this country.
With the opening of the Panama Canal and the growth of
South American trade it will become more important. It
is the most important seaport south of Philadelphia. It
has, and for years has had a large and growing export
and import trade. It is well known in foreign commercial
cities. It has existing relations abroad, which should form
the natural nucleus, through the opportunities afforded by
the new banking system, for the development of increased
banking relations. Baltimore has a very large foreign exchange. [Testimony, pages 1039, 752. Secretary of the
Treasury Mr. Levi L. Rue; Mr. Newcomer.] It today
creates foreign exchange, in connection with its exports of
grain and similar products alone, amounting to over $40,000,000 a year. [Supra, page 16.] With the present concentration of money in New York, this foreign exchange
has to be sold through New York. The natural course of
such foreign exchange would be to follow the goods
from Baltimore. A Federal reserve bank at Baltimore
should be the natural purchaser of any foreign exchange
now created in Baltimore, but now sold through New York.
With the new powers conferred upon member banks to accept
drafts drawn upon them based on the importation or exportation of goods, and the powers conferred upon the reserve
banks to discount such acceptances and to deal in foreign exchange, each stage of the financing of exports of grain and
other commodities from Baltimore should naturally be consummated in Baltimore instead of being transacted in New
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Federal Reserve Bank of St. Louis
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York as most of it now is. The power of the local banks to
accept drafts drawn by the inland shippers of grain upon the
local commission men who buy (for export) or finance the
sale of this grain, and the opportunity to sell these acceptances to or have them rediscounted by a Federal reserve
bank, would enable the local banks to extend through acceptances much larger credit than they can now extend when actual money or direct bank credit must be given. The ability
to sell foreign exchange to a Federal reserve bank in Baltimore, or to local banks which could handle such foreign exchange directly through the local Federal reserve bank,
would remove the need, on the part of Baltimore commission men, to sell or discount their drafts on European purchasers in New York. This consequently would remove the
incentive for making their original loans or getting their acceptances in New York rather than from Baltimore banks.
By putting itself in the market for the foreign exchange
that is now regularly for sale in Baltimore, the new reserve
bank would begin business with an important line of foreign
business of this kind, which should moreover constitute the
nucleus of a growing general foreign business. In fact,
primarily by such dealing in foreign exchange can the
regional banks establish balances in Europe, which in times
of stress may give them a much needed control over general
market conditions and may measurably help them to prevent
exports of gold from the United States, or even to bring about
imports of gold.
The existence of present business relations between Baltimore and foreign countries not only offers an immediate field
for existing banking business (i. e., foreign exchange) which
might be availed of by a regional bank in Baltimore. The
fact that Baltimore is already well known commercially in
England and in Europe, should also make it relatively easy
for a Federal reserve bank at Baltimore to establish broader
and more general relations abroad. Baltimore always has been
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known, and necessarily is now known, throughout England
and Europe, as one of the great American seaports, and a
point to and from which a great part of the European imports and exports go. In the last few years Baltimore has
become even better and more intimately known abroad, and
still closer relations have been established between Baltimore
and Europe. Today the majority of the stock of the Consolidated Gas Electric Light and Power Company of Baltimore is owned in England and in Europe, not by stock
gamblers, but by English investors, who buy these securities
for the income they yield, not to turn them over at a profit of
a point or two above what they pay for them. In this way,
Baltimore is already well known to a multitude of small investors, in England and throughout Europe, not only as a
seaport and trading center, but as the site of important
European investments. Only a year ago this same Company
made an issue of debenture stock (a form of security popular
in England but previously wholly unknown in this country),
in an authorized amount of $60,000,000, of which $5,000,000
has already been issued and disposed of, principally in England and in Europe. Baltimore bonding companies, likewise,
are well known abroad, and should, moreover, in their necessary transfers of funds in connection with their foreign business furnish foreign banking transactions which might be
cared for through a Federal reserve bank. When existing
artificial concentration of money in New York is removed,
a Federal reserve bank at Baltimore should enter upon the
exercise of its important open-market operations with a fair
prospect of developing, like the New York, Philadelphia and
Boston banks, its fair share of foreign business. Thus might
it do its part towards establishing potential control (together
with the other Federal reserve banks), over general money
and credit conditions, which would make itself felt in times
of stress.
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The development of foreign connections, to an appreciable
extent, by a bank with headquarters at Richmond would be
simply out of the question. Richmond is not a seaport. It
has no exports or imports. It is generally unknown abroad.
The only foreign exchange which can be said to originate from
Richmond is exchange in connection with exports of tobacco.
As these goods are actually exported from the port of Baltimore, or other seaports, Richmond is not generally known
abroad even in connection with the tobacco trade. There is
no opportunity for the establishment of actual business relations between Richmond and Europe, and little even to make
Richmond known in Europe, in the circumstance that Richmond is an inland city, which happens to be the headquarters
of a number of tobacco buyers, who buy from Richmond (and
other points in Virginia, North and South Carolina and Kentucky), tobacco grown in the fields of Virginia, North Carolina or Kentucky, shipped from Baltimore or other seaports,
and paid for in New York exchange.
Mr. Warburg, in an article in the North American Review
[October, 1913, page 540], said:
"The Owen-Glass Bill contains elaborate provisions
for the development of bank acceptances and for dealing in foreign exchange. Both provisions are most
appropriate, for without creating an effective machinery
covering these two items the law would not achieve its
aims."
In the same article Mr. Warburg urged that the number of
regional banks be limited to four or six. Without entering
debated territory, on this much debated question of the number of regional banks, it can certainly be said that the inherent
difficulty of maintaining uniform policy and harmonious
action among a large number of regional banks,—especially
with respect to just such matters as the development of bank
acceptances and dealing in foreign exchange—enhances the
importance of locating twelve banks with a due regard to
the customary course of business, including existing relations
between the several cities designated.
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Federal Reserve Bank of St. Louis
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Iv.
MISCELLANEOUS,
The Organization Committee, in a statement issued under
date of April 10th, 1914, undertook to give reasons in defence
of its action in designating Richmond rather than Baltimore
as the Federal Reserve City in the Fifth District. In the
speech of Honorable Carter Glass on April 8th, 1914, practically the same reasons were stated. Most of these reasons
we have already referred to. Some which we have thus referred to, and others which we have not yet specifically mentioned, may be considered at this point.
The reasons relied on by the Committee are inconsistent
with the only test prescribed by Congress. Moreover, except
in the cases of Baltimore and New Orleans, these alleged reasons were cumpletely ignored by the Committee whenever they
would have led to the selection of a city other than the business capital of a district.
NATIONAL BANKS AND OTHER BANKS.
On June 4th, 1913, there were in the United States 29,254
banks, of which 7,473 were national banks. On the same
date the capital, surplus and profits of all banks in the United
States was $4,448,689,221, and of national banks was $2,045,667,547. The deposits of all banks amounted to $18,010,731,188, and of national banks to $6,021,848,465. In other
words, the national banks constituted in number barely onefourth, in capital surplus and profits less than one-half,
and in deposits one-third of the total banking power of the
United States. (Report of Comptroller of Currency, 1913,
page 46.)
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All this banking power outside of the national banks was
ignored by the Organizatiun Committee in the figures offered
in support of its designation of reserve cities. In its statement of April 10th, the Committee said:
"It should be borne in mind that the Committee could
consider primarily only the statistics with reference to
assenting banks. In this section of the country [referring to the New Orleans District] as in most others
the assenting banks were the national banks." (Page
19.)
As we have already pointed out, the new banking system
was not created solely to handle the business now passing
through national banks. The new system is, on the contrary,
intended to constitute but the governing or regulating part
of one comprehensive system embracing all banks.
The Act requires all national banks to signify their assent
within a short time. This assent has already been expressed
by practically all the national banks. The Act, however,
carefully avoids imposing any absolute limit of time within
which other banks may become members of the system. It
was certainly never anticipated that State banks and trust
companies would generally, or to any large extent, become
members of the new system within the sixty days prescribed
by the Act. It would be manifestly opposed to the purposes
of Congress to organize the new system on the assumption
that only those banks which have already signified their
assent will ultimately be technically members of the new
system, and that in organizing the new system all the enormous banking power outside of the national banks shall be
disregarded.
THE PER CAPITA THEORY.
It is urged by the Committee in justification of their
action that on March 4th, 1914, the capital and surplus of
the national banks of Richmond were twice as much as the
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capital and surplus per capita of the national banks of
either Baltimore or Washington; the individual deposits in
Richmond national banks $201 per capita as against Baltimore $76, and loans and discounts in Richmond national
banks $279 per capita as against Baltimore $108. (See
page 26, Committee's Report of Decision).
This is simply juggling with figures. If it means anything, it means that when the per capita of individual deposits, capital and surplus, or loans and discounts is greater,
by so much is the city having the greater per capita a better
city for a Federal Reserve City. This proves too much. It
proves that Richmond is better entitled to be a Federal
Reserve City than New York, Philadelphia, Chicago or
Cleveland.
Capital and Individual
Loans and
Surplus per Deposits per Discounts per
Capita
Capita
Capita
Mch. 4, 1914. Mch,. 4, 1914. Mch,. 4, 1914.
Richmond. . .
$73
$201
$279
New York. . .• . 52
161
227
Philadelphia. .
40
119
153
Cleveland. .. . • • 25
72
112
Chicago.
31
97
154
(Committee's Report, page 15.)
Thus the per capita theory has nothing to do with the
case. A small town with few banks may show better on a
par capita basis than a very large city with many times the
trade, business and banking resources of the small town.
STATES AND CITIES.
Most strangely at variance alike with the Act of Cong.ress, and with the other reasons relied on by the Organization Committee, and the Honorable Carter Glass, is the
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curious citation of comparative national bank statistics for
the States of Maryland and Virginia (Statement of Committee, page 21). This use of figures ignores alike (1) the fact
that cities, not states, are to be designated; (2) the express
authority of the Act to disregard State lines (which authority has actually been exercised in the case of the Fifth District, as well as in every other district except the First and
the Second) (3) the existence of banks other than national
banks; and (4) the Committee's own favorite per capita
theory. We have already pointed out that the resources of
all banks in Baltimore City alone exceed the resources of all
banks not only in Richmond but in the whole State of Virginia. The Committee limits its comparison to national
banks. Richmond, however, does not embrace the whole
State of Virginia. Even geographically it is not as near as
Baltimore to a great part of the State of Virginia. The per
capita theory is, however, most curiously ignored in this most
curious comparison. Although the State of Maryland has
about one-fourth the area and one-half the population of the
State of Virginia, the Committee's figures show the capital
and surplus, individual deposits and loans and discounts of
national banks alone to be almost the same in the two States.
If all banks are considered, the figures for Baltimore exceed
those for the whole State of Virginia
LOANS IN THE SOUTH.
Perhaps the most startling use of figures by the Committee
is its comparison (page 25) of loans and discounts made by
the national banks of Richmond and Baltimore, respectively,
in "the thirteen southern States,"—showing a total of over
$33,000,000 for Richmond, and less than $7,000,000 for
Baltimore. At first blush, these figures certainly seem imposing. On examination, it appears, however, that these
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th,irteen southern States include nine States south of the Fifth
District, and include Virginia, but do not include Maryland.
In other words, this imposing comparison really means only
this, and nothing more,—that the Richmond banks lend more
money in Richmond than the Baltimore banks do.
These figures are followed by the statement that "The
figures also show that in these portions of district No. 5 outside of the States of Virginia and Maryland, the Richmond
national banks are lending twice as much money as all the
national banks in Baltimore and Washington combined."
This is a good illustration of the utterly fanciful comparisons
resorted to to defend the designation of Richmond instead of
Baltimore. The Act requires the Committee to pay due regard to the customary course of business in the whole district. The district comprises five States, and the District of
Columbia. To compare, therefore, the relative claims of Baltimore and Richmond, the Committee ignores the three principal cities in the district (including Baltimore and Richmond themselves), and three out of the six territorial divisions (including the two principal States, so far as the banking business is concerned). It is difficult to characterize such
a comparison. If the reserve city for the Fifth District were
to be located on the Pacific Coast, and the choice of a reserve city for the Twelfth District lay between Baltimore and
Richmond, some such comparison might be very important.
As it is, we fail to understand what possible significance this
comparison can have.
POLL OF BANKS.
Of all the subjects which received elaborate discussion and
consideration in Congress prior to the enactment of the Fed,
.10 Reserve Act, probably none was more fully discussed
than the question how and to what extent the wishes of member banks are to control the operation of the new system. It
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is impossible to suppose that anything on this subject which
is either included or omitted in the Act has been so included
or omitted by inadvertence. It must be assumed that the
elaborate provisions in the Act prescribing and limiting the
powers of member banks as such and the method by which
they may cast their votes measure the full extent to which
Congress intended the operation of the new system to be controlled by the votes of member banks.
With respect to the division of the country into districts
and the designation of Federal Reserve Cities, the Act leaves
nothing whatever to the decision or vote of the member banks
On the contrary, it leaves the matter to be determined by the
Committee and the Federal Reserve Board, with due regard
to the customary course of business and without regard to
State lines.
This stands to reason. The committee was dealing with the
whole country, and its action as to each city and each district
was to be for the good of the whole system. The wishes of
individual banks might represent their individual interests,
but ignore the interest of others whether in the same or in an
adjoining district. Therefore, the law wisely placed the
determination of the city and district in the hands of a
central committee, whose outlook extended over the whole
country, and even made their action subject to review by an
independent board fairly representing the different commercial industrial and geographical divisions of the country. The
proper relation of the parts to the whole was most important, and, therefore, individual preferences of banks and
financial institutions were to be ignored, and full authority
placed in a central body.
The Committee, without regard to the customary course of
business, has apparently been guided almost entirely by the
supposed wishes of member banks, and directly and indirectly
by consideration of State lines. The Committee not only
ascribes great, indeed controlling, importance to the poll of
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the national banks in District No. 5 it also discusses this
poll of banks largely with reference to State lines, concluding
that the wishes of Virginia, North and South Carolina should
outweigh the 'wishes of Maryland, District of Columbia and
West Virginia. The poll itself and the circumstances under
which it was taken, moreover, deMonstrate that sentimental
considerations and other considerations quite apart from the
customary course of business principally determined the result of the poll. In the first place, Richmond, as the sentimental capital of the South, undoubtedly got a great many
votes entirely regardless of all business considerations. For
similar reasons, the States of North and South Carolina, having looked to Richmond to save them from Atlanta, doubtless
to a considerable extent would feel constrained by loyalty to
vote for Richmond even as against Baltimore. As a matter
of fact, however, the North and South Carolina bankers evidently believed that the contest lay between Richmond and
Atlanta, and did not contemplate the creation of a district
which would include Baltimore. Accordingly only one vote
from these two States was cast for Baltimore, and three for
Washington, as against fifty-five for Richmond, although Mr.
Rhett, one of Richmond's advocates from South Carolina,
only ventured the estimate that from 60 to 80% of the South
Carolina banks would prefer Richmond as against Baltimore.
The remaining forty-seven votes from the Carolinas were cast
for Carolina cities.
On the Committee's own basis of consideration by States,
the State of Maryland was practically unanimous for Baltimore; the District of Columbia was unanimous for Washington, but, as against Richmond, of course, desired either Baltimore or Washington, as the Committee itself recognizes
(page 24). West Virginia cast five more votes for Baltimore
than for Richmond, and more votes each for Pittsburg and
for Cincinnati than for Baltimore, illustrating the fact that
the vote was cast without knowing what would be the boun-
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daries of the District. Unquestionably, as between Baltimore and Richmond, the Committee's poll shows that Maryland and the District of Columbia would unanimously and
West Virginia overwhelmingly prefer Baltimore. Except for
sentimental and similar considerations, a large part of Virginia itself and both the Carolinas would prefer Baltimore to
Richmond. The Committee's own figures (page 25) show that
for the national banks alone in the Fifth District the totals,
tioth of individual deposits($174,159,561)and also of capital,
surplus and undivided profits ($62,281,814), of the national
banks (in the Fifth District) in Maryland, West Virginia
and the District of Columbia exceed such totals for Virginia,
North and South Carolina combined (deposits, $150,269,928;
capital, etc, $57,404,156). If all banks were included, the disparity as against Virginia and the Carolinas would be greater.
(Total capital, surplus and profits, June 4th, 1913, for all
banks in Virginia, North and South Carolina, $115,974,629.30; Maryland, District of Columbia and West Virginia,
$112,353,380.75. [Comptroller's report, 1913, page 49.]
Deducting one-sixth of West Virginia total, to allow for Panhandle banks, leaves over $137,000,000 for Maryland, District of Columbia and remainder of West Virginia. National
bank figures for August 9th, 1913, show barely one-eighth of
West Virginia totals in Panhandle counties. Total individual deposits, June 4th, 1913, for all banks in Virginia, North
and South 'Carolina, $299,204,951.43; Maryland and District of Columbia alone, $332,928,118.63; Maryland, District of Columbia and West Virginia, $458,515,093.13;
Maryland, District of Columbia and five-sixths of West Virginia total, over $437,000,000).
The total vote, regardless of State lines, shows not only
the same effect of sentimental considerations and of the fact
that the voters did not know that the choice lay between Richmond and Baltimore, but also the disparity between the number of banks and banking power. Virginia and North and
South Carolina had two hundred and twenty-four votes
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Maryland, the District of Columbia and West Virginia only
two hundred and seven. This disproportion between the number of votes and the amount of business of all kinds (including !banking) done in these respective parts of the District
results not only (1) from the large number of small country
banks in the Carolinas and Virginia, as compared with the
relatively smaller number of much larger banks in Baltimore
and Washington, but also (2) from the fact that the State
banks and trust companies, which have no vote at all, are
relatively much less important in Virginia than in Baltimore.
Notwithstanding the sentimental and other considerations
not proper to be considered by the Committee, which, however, undoubtedly swelled the Richmond vote, and the inequality of the whole scheme of voting,—which gave the same
weight to a country bank with $25,000 capital as to the
largest bank in Baltimore and which gave no weight at all
to the trust companies in Baltimore and elsewhere in the
district,—the total vote for Richmond was but thirty-nine in
excess of the vote for Baltimore, while twenty-five votes
were cast for Washington, thirty-five for Pittsburg, twentyseven for Cincinnati, and two for New York. So far as
business considerations are concerned, any bank which voted
for Pittsburg, Washington or New York should prefer Baltimore to Richmond, to say nothing of the fact that, if business
considerations alone governed, undoubtedly a large number
of the banks in both the Carolinas, as well as a larger number
from Virginia, would vote for Baltimore.
The real facts, therefore, are: (1) That even the vote
taken by the committee fails to show that Richmond would
have received a larger vote than Baltimore had the voters
known that the choice lay between Richmond and Baltimore;
(2) that many of the votes for Richmond were cast for sentimental and other reasons quite foreign to business considerations; (3) that, in professing to follow a vote of member
banks, i. e., national banks, the committee did not follow
the wishes of the banking interests—or even of the national
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banking interests—in the district, or of the customers of the
banks in the district, i. e., the commercial, industrial and
agricultural public. The wishes of the banking interests of
the district—of the stockholders, depositors and customers—
are in favor of Baltimore, if such wishes are to be ascertained
by any method which makes allowance for the difference
between a small country bank, with few stockholders, few
customers and little business, and a large city bank, with
many stockholders and customers and a very large business.
The "one bank one vote" method—which Congress refrained
from applying to the designation of Federal reserve cities,
but which the committee professes so to have applied in the
Fifth District—not only subordinates the interests of the
country as a whole to local interests, but also subordinates
to the wishes of the bankers in the district (i. e., the national
bank officers and directors), the wishes of the owners of the
banks (i. e., the stockholders) and the customers (i. e., the
general commercial, industrial and agricultural public which
deals with the banks).
The Committee itself, however, has not really been governed to any substantial extent by the votes of member banks
either in dividing the districts or in designating the reserve
cities. If it had been so influenced, Connecticut and New
Jersey would have been put in the New York District, and
West Virginia would have been put in the Fourth District,
with Pittsburg, instead of Cleveland, as the reserve city.
(Congressional Record, pages 7731-7733.)
INCONSISTENCY OF COMMITTEE'S REASONING IN FOURTH AND
FIFTH DISTRICTS.
The choice of Cleveland in the Fourth District strongly
shows how little real weight the arguments urged by the
Committee as controlling in the Fifth District had in the
Fourth District. The choice of Cleveland is justified by the
following single paragraph:
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"The Committee named as cities for the location of
Federal reserve banks New York, Chicago, Philadelphia, St. Louis, Boston, and Cleveland. In population
these are the six largest cities in the United States;
their geographical situation and all other considerations
fully justified their selection." (Page 24.)
So far as geographical situation is concerned, it will be
observed that Cleveland is on the northern edge of the district, and is at least no more accessible than Pittsburg to the
other parts of the district. The only other consideration
mentioned is that Cleveland is the sixth largest city in the
United States. That is to say, Cleveland, the sixth, city,
with 560,663 persons, is slightly larger than Pittsburg, the
eighth city, with 533,905. Baltimore, the seventh city, with
558,485 (practically the same as Cleveland), is, however,
subordinated to Richmond, the thirty-ninth city, with 127,628 persons—for the alleged reasons which we have already
discussed. It is interesting to note what force these reasons
had in the selection of Cleveland rather than Pittsburg,
which has a population over 95% of that of Cleveland.
District No. 4 comprises the State of Ohio and parts of
Pennsylvania, Kentucky and West Virginia. In Pennsylvania the vote was 256 for Pittsburg and 3 for Cleveland.
In Kentucky and West Virginia, Cleveland did not receive
a single vote, and in Ohio itself the vote was 150 for Cincinnati to 107 for Cleveland. In the whole district Pittsburg received 291 votes, Cincinnati 194, and Cleveland 110,
out of a total of 685. In capital and surplus the Committee's
figures for national banks show a total of $14,400,000 for
Cleveland as against $46,714,000 for Pittsburg; individual
deposits, for Cleveland $40,479,025, for Pittsburg $120,260,088; loans and discounts, Cleveland, $62,58M35, Pittsburg $124,568,231. On the per capita basis, the comparison
is, capital and surplus, Cleveland $25, Pittsburg $88, indi-
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vidual deposits, Cleveland $72, Pittsburg $225; loans and
discounts, Cleveland $112, Pittsburg $233.
Of so little consequence to subordinate the sixth city to
the eighth city where the reasons now urged to defend the
subordination of the seventh city to the thirty-ninth.
[We, of course, intimate no opinion on the question
whether in fact Cleveland is (when allowance is made for
suburbs or metropolitan district) larger than Pittsburg. We
are not concerned with the accuracy or inaccuracy of the
application by the 'Committee of the reasons assigned by it
for its choice of the Federal reserve city in the Fourth District. The point we make is that the reasons—whether properly applied or misapplihd—relied on by the Committee to
justify its action in the Fourth District, have been ignored
in the Fifth District.]
INCREASE.
The last excuse offered by the Committee for selecting
Richmond instead of Baltimore is that the capital and surplus, loans and discounts and individual deposits of the
national banks of Richmond show a greater percentage of
increase in ten years than the same figures for the national
banks of Baltimore. Fundamentally, such a comparison is
unjust to Baltimore, being limited to national banks alone,
thus leaving out of consideration the trust companies, which,
largely for the purpose of financing the development of the
South, have been brought to their present condition in Baltimore. The figures filed as Exhibits Nos. 4 and 5 with the
brief for Baltimore before the Organization Committee show
an increase in clearings of 72% in the ten year period from
1903 to 1913, and an increase in individual deposits from
April, 1909, to June, 1913, for all banks and trust companies in Baltimore of 24%.
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The Committee, however, properly had absolutely nothing
to do with increases as such. Its own figures show that the
national banks alone in Baltimore have shown a steady increase in deposits and resources in the past ten years.
Whether this increase amounts to the same, a greater or a
less percentage of increase than the corresponding increase
in Richmond is wholly immaterial. The Committee has to do
with the present, not with the past, or with dreams of the
future. It is to be guided by a due regard for the customary
course of business. If, in the remote future, Richmond—or
any other now relatively insignificant city in the district—
thould grow larger than Baltimore in population or in business, so that the customary course of business should be different from what it now is, this board may then, under its
powers to readjust districts, change the Federal Reserve City
in the Fifth District to meet the change in the customary
course of business. At present such a future is too remote
even to speculate about.
It is peculiarly idle to compare rates of increase in a large
city and in a city of one-fifth its size. It is a trite and
obvious, but nevertheless adequate, answer to such comparison, to say that the smaller city has so much more room
to grow that a larger percentage of increase may fairly be
expected. If percentage of increase were to be accepted as a
criterion, probably most of the twelve Federal Reserve Cities
would be in Oklahoma. Even in the Fifth District doubtless
some boom towns can be found which would stand ahead of
either Richmond or Baltimore. Richmond is by no means
a boom town, either in age or characteristics. It is, however, but the simple truth to say that, as Baltimore began
earlier to recover from the effects of the Civil War, while
Richmond was late in making such beginning, it would be
but natural that Richmond's recovery thus longer deferred,
should now, for a time at least, proceed at a relatively
higher rate than the increase of Baltimore, which has
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proceeded along more even and normal lines for many years.
However this may be, it is futile to speculate on the obliteran
tion—within any time that could now be remotely foresee
ss which now
—of the difference in population and busine
exists between Richmond and a place five times as important.
This test, moreover, is a purely accidental one, which
proves nothing, and which, the Committee's figures show, in
no sense influenced its decisions. Of the twelve cities designated as Federal Reserve Cities, the capital and surplus of
the national banks of San Francisco show an increase from
1903 to 1913 of 300%. The same figures for Cleveland show
a decrease of 6.5%, and for Boston an increase of 2.7%; for
Baltimore the increase was 1.4%. In loans and discounts
the increase for San Francisco was 313%; for Cleveland,
24%; Boston, 21%; St. Louis, 22%, and for Baltimore,
35%. In individual deposits the increase for San Francisco was 308%; for St. Louis, 32%; Philadelphia, 33%;
for Baltimore, 38%, and for New York City, 11%. (Statement of Committee, page 12.)
BRANCH THEORY.
In the examination of witnesses who testified before the
Organization Committee in favor, respectively, of Washington, Baltimore, Richmond and Philadelphia, the witnesses
or
were frequently asked by the Secretary of the Treasury,
by the Secretary of Agriculture, whether the particular city
then being urged before them as a Federal Reserve City
seemwould not be as well served by a branch, bank, the idea
by a branch. bank, it
ing to be that if a city could be served
"headquardid not make much, if any difference, where the
ters" or "parent" bank was located in the district.
fallacy.
This view contains, of course, a very transparent
Act:
Branch banks are provided for by Sec. 3 of the
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"Each Federal reserve bank shall establish branch
banks within the Federal reserve district in which it is
located * * *. Such branches shall be operated by a
board of directors under rules and regulations approved by the Federal Reserve Board * * *. Four of said
directors shall be selected by the reserve bank and three
by the Federal Reserve Board * *
It seems mandatory for the reserve bank to establish
branches in its district, although no time is fixed for this,
nor is the selection of the places where the branches shall be
established governed by any rules other than the judgment
or discretion of the reserve bank of the district.
The question of the location of branch banks does not come
before the Organization Committee at all. They have no
power to designate them Their only concern is with the
location of the Federal Reserve Bank in the district and to
accomplish this duty they are enabled by the Act to employ
experts and take testimony.
If this were not so, the purposes of the Act could be frustrated, and Federal reserve cities be selected from personal,
sentimental or political reasons under the specious plea that
the real city of the district entitled to the parent bank could
fairly well be served by a branch bank. For example,—
Albany, Harrisburg and Richmond, could be selected as the
homes of the parent regional banks, whilst New York, Philadelphia and Baltimore could be served by branch banks.
In this way, and under this theory, the commercial metropolis of the district, where the greatest amount of trade and
commerce centers, could be ignored.
This is, of course, not only contrary to the meaning of the
Act, but contrary to reason. The branch is always inferior
to the main thing of which it is the branch. This is clearly
perceived by the bankers who testified before the Committee.
Thus, Levi L. Rue, President of Philadelphia National
Bank and Chairman of the Clearing House Committee of
Philadelphia, in substance says on this point:
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"* * * But the question you have got to solve,—where
is the logical and best place to establish the head office.
The head office ought to be where trade is concentrated,
and where the vast amount of trade passes, because there
a bank can more properly fulfill its functions." (Page
1070.)
"The management of the head bank have got such
tremendous problems to deal with in extending credit to
any section which belongs to them. They must be men
that are in touch with the great flow of trade and commerce. They must be men that have broad knowledge;
men who are, I say, in touch with things and where the
great commerce of that district concentrates. They
must be. Now that naturally is true of the metropolis
.
of the District." (Page 1075.)
Even after Mr. Seay, who testified for Richmond, and
wrote the Richmond brief, had admitted in his testimony
that Richmond might be as well served by a branch bank,
though the country tributary thereto might not (page 866),
the Richmond advocates felt that a mistake had been made
and put up Mr. Oliver J. Sands, President of American
National Bank, Richmond, to counteract this idea. He says
that "a branch bank would only operate and care for the particular location in which it served, and its lines of influence
would be more or less limited" (page 899). "Those of us in
practical business here who have had to deal with branches,
know that it is not possible under the ordinary operations of
business, to operate branches with the same facility and dispatch in handling business that you can with the head office,
because that is the court of last resort" (page 898.) Mr.
Sands thought Richmond better for a headquarters bank, as
he claimed that Baltimore was four and a half to five hours
further from all the southern points, and meant the loss of a
day's business to the bankers of the south, an argument which
might have had some little force in it when the northern edge
of the district was proposed to be the Potomac River, but of
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no force at all with the district as now constituted. (Page
898.)
There is no logic or reason in making Richmond the headquarters and Baltimore the branch. It would be like the tail
wagging the dog.
EFFECT OF ACTUAL ESTABLISHMENT OF BANK AT
RICHMOND.
On this review, the fact of the actual establishment of the
bank at Richmond, of course, should have no effect. The
review of the decision of the Reserve Bank Organization Committee by the Federal Reserve Board was intended to be
real review. In the absence of any rules of procedure it is
not specified whether the method of review shall be by application to the Committee or to the Federal Reserve Board when
constituted. Pending, however, the appointment and organization of this latter Board no rights of review can be lost or
impaired by any proceeding of the Committee.
All this is fully set forth in the protest of the Banks of
Baltimore to the Reserve Bank Organization Committee of
April 29th, 1914, in which they were asked not to organize
the Federal Reserve Bank for the Fifth District at Richmond, nor to proceed to collect subscriptions on the stock.
The Committee replied that the statute made it mandatory
for them to proceed with the organization of the bank at Richmond, basing their contention on the use of the word "when."
"When the minimum amount * ** shall have been subscribed
and allotted, the Organization Committee shall designate any
five banks * * * to execute a certificate of organization," etc.
[Section 4].
The word "when," however, in this context does not mean
"at the very moment." The word fixes a time before which
the bank cannot be organized. It cannot be organized until
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the minimum amount prescribed by the Act shall have been
subscribed and allotted. When this is done, it shall be the
duty of the Organization Committee to appoint the five banks
to execute the certificate of organization; but not that this
duty must be exercised on the very day the minimum amount
is subscribed. In other words the subscription of the minimum amount is a condition without which they cannot organize the bank,
The word "when" frequently has this meaning in statutes.
40 Cyc. 921.
However this may be, it is quite certain under the statute
that the Organization Committee had in their hands the question of the time when the first one-half of the subscription
should be paid. There was no reason for making a call pending this application for review.
The correspondence referred to is herewith inserted.
APRIL 29TH, 1914.
To the "Reserve Bank Organization Committee."
Gentlemen:—
The Regional Reserve Bank Committee of Baltimore, representing all the citizens of 'Baltimore, respectfully pray for
a review of your decision designating the City of Richmond,
instead of the City of Baltimore as the Federal Reserve City
in the Fifth Federal Reserve District, under the Federal
Reserve Act; and hereby also give notice that a similar
application for Review will be made to the Federal Reserve
Board as soon as it is constituted and organized, and under
such form of procedure as it may provide.
The Baltimore Committee calls attention to the fact that
ihe proposed bank at Richmond is using every effort to per-
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feet an organization so that it will be the more difficult for
the Federal Reserve Board to effectively review your decision.
The Baltimore Committee suggests that this is an injustice
which should not be allowed, and its prevention lies in your
hands.
When the Act of Congress gives a right of review from
your decision to the Federal Reserve Board, which will be
one of the most powerful, and it is expected, most highly
efficient organizations in this Country after the Supreme
Court of the United States, and, perhaps, the Interstate
Commerce Commission, it means a real bona fide right of
eview, unobstructed and unhampered,—it means that the
Board of Review shall approach the examination of the
question submitted with the view of deciding, under circumstances free from all embarrassment, whether the Reserve
Bank Organization Committee has designated the Federal
Reserve city in question, in accordance with the spirit and
letter of the Act of Congress, and in such a way as to subserve and not partially to frustrate the real objects of the Act.
The Baltimore Committee suggests that it is not responsible for any delay in starting proceedings for review, but
that such delay is occasioned solely by the fact that the
Federal Reserve Board, which is to hear and decide the
application for review, has not yet been constituted.
It would seem, therefore, grossly unjust that pending the
period of waiting for the appointment and organization of
the Federal Reserve Board, the projected bank at Richmond
should with your official help and assistance be allowed to
perfect an organization under the Act of Congress as if the
decision of the Reserve Bank Organization Committee was
final. This method treats the application for review, which
it was well known would be formally made, as amounting to
nothing,—a.nd really helps to prejudge the case.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
97
Up to the present time, subscriptions to stock in the Federal Reserve Bank of Richmond have been made. This is
really no obstruction to a review, as the bank is really the
Federal Reserve Bank of the Fifth District, and would be
the same bank, except in name, even if Baltimore were designated as the result of the Review as the Federal Reserve City
of the Fifth District. In the contemplation of the Act, the
bank would be the same, the only change being the change of
name from "The Federal Reserve Bank of Richmond" to
"The Federal Reserve Bank of Baltimore."
But the Act of Congress puts the collection of the subscription and the Organization of the Bank as a corporation
in your hands
The Act provides:—
"One-sixth of the subscription to be payable on call of
the 'Organization Committee or of the Federal Reserve
Board, one-sixth within three months and one-sixth within
six months thereafter. and the remainder of the subscription, or any part thereof, shall be subject to call when
deemed necesary by the Federal Reserve Board, said payment to be in gold or gold certificates."
So that you have in your hands the question of the time
when the first one-half of the subscription shall be paid.
You have further in your hands the time when the Bank
shall be allowed to organize and become a, corporation, capable of enforcing its subscriptions to stock.
The Act of Congress gives you the right to select five banks
to execute a certificate of organization therein fully described,
and it is only on the due execution of this certificate and on
its being filed with the Comptroller of the Currency that said
Federal Reserve Bank becomes a corporation. This is what
we meant by stating that it VMS only by your official help
and assistance that the projected bank at Richmond could
perfect its organization.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
98
So the question comes to this: Is it just to Baltimore to
officially assist the organization of the projected bank at
Richmond, thereby giving matters a set and apparent conclusiveness, pending the hearing of the application for Review
before a Board not yet constituted?
We respectfully suggest that it is not just nor right.
The application of Baltimore for a review is bona fide and
earnest. She is fully convinced that the spirit and letter of
the Act of Congress have not been followed in the designation
of Richmond that it amounts to an official attempt to turn
back the ordinary and usual course of trade and business,
that it is taking from Baltimore that to which her pre-eminence as the financial and trade center of the Fifth District
entitle her and she only asks that she be allowed to present
her case fully and completely before the Federal Reserve
Board, unembarrassed and unhampered by any further organization of the Bank of Richmond.
The Baltimore Committee, therefore, respectfully requests,
in view of the aforegoing statement, that the "Reserve Bank
Organization Committee" shall do nothing further toward
officially assisting in the organization of the bank at Richmond until the application for review be fully heard and
decided.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
EDGAR H. GANS,
AND
CHARLES MARKELL,
of Gans & Haman,
Counsel to Baltimore Committee.
99
RESERVE BANK ORGANIZATION COMMITTEE.
WASHINGTON, D. C., MAY 1, 1914.
Messrs. Gans & Haman,
Counsel to Baltimore Committee,
1137 Calvert Building,
Baltimore, Maryland.
Sirs:—
On behalf of the Reserve Bank Organization Committee,
I beg to acknowledge the receipt of your letter of April 29th,
and to advise you that the same has been submitted to and
considered by the Committee.
You request on behalf of the Regional Reserve Bank Committee of Baltimore:
First: That the decision of the Reserve Bank Organization
Committee designating Richmond as the Federal Reserve City for District No. 5, be reviewed by the Committee.
Second: That pending an application to be made by your
Committee to the Federal Reserve Board when organized for a review of the Committee's decision that no
steps be taken by the Committee in the matter of the
organization of the Federal Reserve Bank of Richmond.
In response to your first request, your attention is directed
to that part of Section 2 of the Federal Reserve Act, which
provides that:
"* * * 'The Reserve Bank Organization Committee'
shall designate not less than eight nor more than twelve
cities to be known as Federal Reserve Cities, and shall
divide the continental United States, excluding Alaska,
into districts, each district to contain only one of such
Federal Reserve Cities. The determination of said Organization Committee shall not be subject to review except
by the Federal Reserve Board when organized."
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
100
The Committee has already filed the certificate required by
law with the Comptroller of the Currency designating the
several Federal reserve cities and defining the geographical
limits of the districts to be served. Accordingly the matter is
no longer in its hands, and under the clear provisions of the
Act its determination is reviewable only by the Federal
Reserve Board when organized.
In response to your second request that the Organization
Committee defer the organization of the Federal Reserve
Bank of Richmond until Baltimore has submitted its appeal
to the Federal Reserve Board when organized, I am instructed to direct your attention to that part of Section 4 of
the Federal Reserve Act, which reads as follows:
"When the minimum amount of capital stock prescribed
by this Act for the organization of any Federal Reserve
Bank shall have been subscribed and allotted, the Organization Committee shall designate any five banks of those
whose applications have been received, to execute a certificate of organization, and thereupon the banks so designated
shall, under their seals, make an organization certificate
which shall specifically state," etc.
I am also instructed to direct your attentioii to that part
of Section 2 of the Federal Reserve Act, which reads as
follows:
"When the Organization Committee shall have designated the cities in which Federal Reserve Banks are to be
organized, and fixed the geographical limits of the Federal
Reserve Districts, every national banking association within that district shall be required within thirty days after
notice from the Organization Committee, to subscribe to
the capital stock of such Federal Reserve Bank in a sum
equal to six per centum of the paid-up capital stock and
surplus of such bank, one-sixth of the subscription to be
payable on call of the Organization Committee or of the
Federal Reserve Board, one-sixth within three months,"
etc.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
101
Pursuant to this provision of Section 2, the Organization
Committee gave notice on April 8th to all national banks
which had signified their intention of entering the Federal
reserve system that the applications provided for stock in
the banks of their respective districts should be filed with
the Committee within thirty days as prescribed by law. The
time limit will accordingly expire on May 8th, and according to the mandatory provision of Section 4, above referred
to, the Committee is required to designate five banks to execute the organization certificate and is not empowered by any
provision of the Federal Reserve Act to waive or disregard
this obligation at the request of the representatives of any
city.
Your petition for review will be called to the attention of
the Federal Reserve Board as soon as that body has been
organized. It is not probable that the Committee will call
for the payment of any installments of the subscriptions to
stock of any Federal Reserve Bank before the organization of
the Federal Reserve Board, but under its interpretation of
the sections referred to its duty to proceed with the organization of all Federal Reserve Banks is mandatory and not discretionary, and accordingly your request must be denied.
Respectfully,
M. C. ELLIOTT,
Secretary, Reserve Bank Organization Committee.
CONCLUSION.
The people of Baltimore (as well as great numbers of
people throughout the United States) feel that a great mistake has been made. They are seeking in manner prescribed
by law to have this mistake rectified. How the mistake was
made is immaterial. The important thing is that it be cor-
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
102
rected. Justice to Baltimore demands this. The success of
the new system requires it, in order that the people of the
United States may be assured that the new system is to be
administered with a strict impartial adherence to the letter
and spirit of the law, and is not, at the very outset, to be
controlled by considerations (even though they may be entertained in gold faith) utterly inconsistent with the law.
We respectfully submit that this Board, reviewing the
decision of the Organization Committee, should designate
Baltimore as the Federal Reserve City in the Fifth Federal
Reserve District.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
EDGAR H. GANS,
AND
CHARLES MARKELL,
or GANS & HAMAN,
Counsel for the Regional Reserve Bank Committee of
Baltimore.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-
Appendix.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
"APPENDIX A."
g
.1.4
SURPLUS.
RESOURCES.
ci,
Ad
T.,: T..1
FEDERAL RESERVE
DISTIUCT.
'.=
Z hrs. HAM
Number of Banks.
TOTAL
CITIES IN FIFTH
Mailing Time
(Richmond).
RESOURCES.
CAPITAL AND
a) .
E •-•
E
-I
?I
4...
72
E
SURPLUS.
Mailing Time
(Baltimore &
Richmond).
TOTAL
r/
g
•
V
CAPITAL AND
Number of Banks.
LIST OF ALL CITIES IN THE FIFTH FEDERAL RESERVE DISTRICT IN WHICH A NATIONAL
BANK IS LOCATED, WITH NUMBER OF
NATIONAL BANKS, AGGREGATE CAPITAL AND SURPLUS AND TOTAL RESOURCES OF ALL NATIONAL
BANKS IN THE FIFTH
DISTRICT, WITH ACTUAL MAILING TIME BETWEEN EACH PLACE AND BALTIMORE AND RICHMOND,
RESPECTIVELY.
(ALL FIGURES, AS OF AUGUST 9TH, 1913, FROM 1913 REPORT OF COMPTROLLER OF THE CURRENCY.)
1SANK
.1.1/1 .
1.11.1N I: r itliAL
BANKS NEARER TO BALTIMORE.
BALTIMORE AND RICHMOND.
BANKS NEARER TO RICHMOND.
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
MARYLAND.
.61
,
,
.......... ,
k
•
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$ 60,000
378,000
19,760,720
40,000
199,200
28,500
35,000
279
,000
105,500
100,000
255,000
37,500
80,000
30,000
61,000
1,115,000
,500
259
435,000
210,000
130,000
$ 330,683
1,561,050
110,896,349
261,521
1,416,242
85,424
363,18.9
2,0,464
1,077,919
643,331
1,205,696
237,127
820,593
174,072
452,357
7,701,407
1,271,903
2,036,011
1,723,123
870,251
1
1
16
1
3
1
1
3
1
1
2
1
1
1
1
4
2
2
2
1
$23,584,920
$135,157,705
46
1.30
1.50
0.00
7.00
1.50
6.30
3.00
8.00
0.00
0.00
3.30
339
6.00
4.00
1.00
6.00
4.00
5.00
2.00
1.00
Aberdeen
Annapolis
Baltimore
Barton
Bel Air
Berlin
Brunswick
Cambridge
Canton
Catonsville
Centreville
.Chesapeake City
Chestertown
.Clear Spring.
Cockeysville
Cumberland
Denton
Easton
Elkton
Ellicott City
.Carried Forward.
9.00
11.00
5.00
14.00
13.00
16.00
5.30
20.00
5.00
5.00
12.00
13.00
15.00
12.00
8.50
8.30
14.00
14.20
10.00
9.00
.
-Continued.
"APPENDIX A"
ri:
1
,....:,
74
CAPITAL AND
TOTAL
ta
0
'-'
SURPLUS.
)
4a0
E-4 01
E a'
= Z ,h=1
z9
:7-1 r •
ct
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
q-1
0
P
.....
RESOURCES'
=
Z
a
..
'4
hrs. rain.
1)
Lil . •E-I t
a
LIC .,.., •
4 `1
:7 =
cl .....,
CITIES IN
FIFTII
FEDERAL RESERVE
DisTRIcr.
.1
hrs. min.
MARYLAND.
.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$23,584,920
30,000
830,000
55,000
245,000
75,000
9
4 ,000
590,000
30,000
40,000
175,000
50,000
38,000
44,000
110,000
60,000
30,000
30,750
50,000
30,500
50,000
50,000
$135,157,705
99
103,0
6,764,939
310,867
,216,339
9
309,475
178,490
3,532,785
200,069
235,589
1,238,132
280,232
184,181
317,884
525,020
454,888
157,406
106,143
258,829
198,653
591,406
378,144
46
1
3
1
2
1
1
3
1
1
2
1
1
1
1
1
1
1
1
1
1
1
$26,240,170
$153,700,198
73
7.30
4.30
9.30
8.10
2.00
13.00
4.00
2.00
4.00
2.00
1.00
8.00
3.00
1.00
9.45
7.00
5.00
7.00
3.30
3.30
7.00
Brought Forward
Federalsburg .
Frederick ..
.. Friendsville ..
.
.. Frostburg ....
. Gaithersburg ..
... Grantsville ..
Hagerstown
Hampstead
Hancock ...
Havre De Grace.
Hyattsville
Kitzmillerville
La Plata
. Laurel
Leonardtown
Lonaconing
Mechanicsville
Midland
Monrovia
Mount Airy
.Mount Savage
.Carried Forward.
19.30
11.00
16.00
11.10
4.30
19.00
13.00
12.00
12.00
10.00
5.00
13.00
14.00
5.00
21.00
14.00
16.00
14.00
8.30
8.30
14.00
Number of Banks.
a
i=1
l
ig
.w
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
t:r :
.-g
V, Mailing Time
.
5 (Richmond).
BANKS EQUIDISTANT k'ROINI
BALTIMORE AND RICHMOND.
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
"APPENDIX A"
-Continued.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
CITIES IN FIFTH
TOTAL
FEDERAL RESERVE
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
SURPLUS.
RESOURCES.
DISTRICT.
SURPLUS.
RESOURCES.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
hrs. min.
hrs. min.
hrs. min.
N'
CAPITAL, AND
Ni
TOTAL
Ni
CAPITAL AND
MARYLAND.
••
TWT1‘
•
$26,240,170
80,000
38,000
187,500
30,000
31,000
158,000
35,000
160,000
125,000
200,000
175,000
41,000
9
6,000
181,000
93,000
49
,000
187,500
32,000
55,000
80,000
465,000
$153,700,198
283,592
221,384
1,106,785
198,914
317,965
939,272
997
159,
875,331
654,692
1,099,374
915,799
133,108
199,985
1,000,095
481,160
533,042
1,159.058
364,747
509,580
471,604
1,731,513
73
1
1
2
1
1
2
1
2
1
1
2
1
1
2
1
1
2
1
1
1
3
$28,662,170
$166,987,025
102
2.00
2.00
8.00
1.30
0.00
7.30
4.00
3.00
3.30
2.00
6.00
3.00
2.00
7.00
3.00
2.30
0.00
9
.00
2.00
6.45
2.00
Brought Forward
New Windsor..
North East
Oakland
Parkton.
Pikesville
Pocomoke City
Poolesville
Port Deposit.
Rising Sun
Rockville
Salisbury
.Sandy Spring.
.Silver Spring.
.Snow Hill.
Sykesville
Thurmont
Towson
.Union Bridge.
Upper Marlboro
Westernport
Westminster
.Carried Forward.
10.00
10.00
11.00
9.20
5.00
8.45
6.30
11.00
11.30
4.30
9.00
7.00
4.30
22.00
8.00
10.30
5.00
10.00
13.00
11.00
10.00
• •
"APPENDIX A"
-Continued.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
BANKS NEARER TO BALTIMORE.
BANKS NEARER TO RICHMOND.
CITIES IN FIFTH
TOTAL
FEDERAL RESERVE
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
SURPLUS.
RESOURCES.
DISTRICT.
SURPLUS.
RESOURCES.
hrs. min.
hrs. min.
hrs. min.
N
CAPITAL AND
N
TOTAL
N
CAPITAL AND
MARYLAND.
$28,662,170
32,500
120,000
32,000
$166,987,025
218,428
452,995
223,494
102
1
1
1
1.30
4.00
3.30
Brought Forward
White Hall
Williamsport
Woodbine
11,669,000
60,331,889
12
1.30
DIST. OF COLUMBIA
575,000
3,739, 42
9
3
87,500
39,000
463,395
210,525
1
1
2.30
7.45
19.00
4.20
10.20
9.20
7.00
8.30
I
$ 177,500
172,750
$ 921,692
1,103,953
2
1
13.00
14.00
27,750
$350,250
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$2,025,645
3
$41,244,920
173,683
$232,800,676
1
123
9.40
9.40
9.40
5.00
Abingdon
Alexandria
.... Altavista ....
Appalachia.
Berryville
... Blackstone ...
Bristol
... Broadway ...
Buchanan
...Buena Vista...
. Charlottesville .
.Carried Forward.
4.00
3.30
7.00
22.30
6. 0
9
3.45
9.00
10.10
9.00
4.40
•• •• • ••• •
1
$ 66,000
1
74,000
390,278
1
25,000
95,787
1
3
60,000
504,000
245,805
2,471,296
7
$729,000
$3,453,715
$250,549
-Conlinued.
"APPENDIX A"
,w
czt
,
CAPITAL AND
TOTAL
aa
SURPLUS.
RESOURCES.
A-.
---.
n
E.i k
CITIES IN FIFTH
2
4-1
:-
FEDERAL RESERVE
cd
DisTRIcT.
z hrs. min.
hrs. min.
Number of Banks.
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
Mailing Time
5 (Richmond).
P.
Mailing Time
(Baltimore &
Richmond).
Number of Banks.
1-3
SURPLUS.
ci
CAPITAL AND
7:1
tri
rn
o
0
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
VIRGINIA.
$350,250
$2,025,645
31,000
118,007
1
$41,244,920
3
$232,800,676
123
13.30
12.45
2
130,000
1,386,285
50,000
247,116
80,000
482,251
1
68,700
582,225
2
35,500
27,500
,404
159
129,816
1
1
$41,636,620
$235,880,773
131
.
$381,250
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$2,143,652
4
1
10.15
9.10
20.00
9.40
10.00
5.00
8.00
7.15
14.30
6.15
10.20
3.50
5.00
15.00
17.00
4.30
16.00
8.00
8.00
Brought Forward
...Chase City...
Chilhowie
. Christiansburg .
..Clifton Forge..
.... Coeburn ....
... Covington ...
..... Crewe .....
Culpeper
.... Danville ....
.... Emporia ....
.... Esmont ....
Fairfax
Farmville ...
.
. Fredericksburg .
.Front Royal.
Galax
Gate City
.. Gordonsville
.... Graham
Hallwood
Hamilton
.Carried Forward.
3.30
10.00
8.30
17.20
9.00
2.40
10.00
5.45
2.20
12.15
12.00
4.00
2.20
11.00
11.00
20.40
3.30
13.00
8.30
13.50
7
1
$729,000
90,000
$3,453,715
390,130
1
2
1
2
1
42,000
222,500
55,000
263,000
30,000
192,504
1,405,273
271,421
1,519,055
154,400
4
2
1
857,500
96,000
35,000
4,855,213
395,706
116,087
2
2
154,300
210,000
799,818
831,186
1
34,000
195,345
1
1
25,000
60,000
74,724
203,209
29
$2,903,300
$14,857,786
"APPENDIX A"
-Continued.
SURPLUS.
RESOURCES.
CAPITAL AND
SURPLUS.
TOTAL
RESOURCES.
4,
1
hrs. min.
BANKS NEARER TO RICHMOND.
CITIES IN FIFTH
FEDERAL RESERVE
DISTRICT.
hrs. min.
hrs. min.
Number of Banks.
TOTAL
a •
t7-1 o 5
aa
.,74•4:1,1
BANKS NEARER TO BALTIMORE.
Number of Banks.
CAPITAL AND
Number of Banks.
BALTIMORE AND RICHMOND.
BANKS EQUIDISTANT FROM
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
99
2
2
$2,903,300
140,000
380,000
$14,857,786
1,013,085
2,379,368
1
1
30,000
62,500
186,477
355,814
1
1
46,500
71,270
311,057
294,369
3
2,700,000
11,453,196
1
1
1
1
1
4
70,000
46,600
167.000
40,000
60,000
200,000
4,090,000
395,150
151,879
1,026,036
256,901
282,638
1,474,047
20,602,313
51
$11,007,170
$55,040,116
VIRGINIA.
$381,250
$2,143,652
$41,636,620
4
30,500
40,000
237,380
1
$235,880,773
173,469
131
1
14.00
32,500
133,818
1
300,000
199 000
117.000
2,400,489
894,981
512,562
2
2
9
113,000
686,604
2
••
$421,250
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$2,381,032
5
9.15
9.10
7.00
18.20
11.00
$42,428,620
$240,682,696
141
31.00
10.20
19.15
7.40
9.00
5.40
7.00
3.30
12.45
10.40
12.00
22.10
10.10
9.00
8.10
Brought Forward
.. Hampton ...
.
. Harrisonburg .
Herndon
Honaker
•
...Hot Springs...
Irvington
Jonesville
▪ Laurenceville
•
Lebanon ....
Leesburg
Lexington
Luray
... Lynchburg
Manassas
.... Marion
.... Marshall
.. Martinsville
.... Monterey
..Mount Jackson
.. Newport News
.... Norfolk
.Carried Forward.
2.25
8.30
19
.50
15.20
10.20
34.40
4.15
16.10
13.30
9. 5
9
12.50
6.00
8.00
12.30
10.00
9.30
21.30
9.30
2.00
3.00
-Continued.
"APPENDIX A"
RESOURCES.
o
a
fl
g
hrs. min.
FEDERAL RESERVE
Disnuar.
hrs. min.
Number of Banks
aci
CITIES IN FIFTH
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
51
2
1
1
2
$11,007,170
105,000
100,000
77,500
155,000
$55,040,116
559,661
691,568
545,475
791,167
10.45
1.15
12.45
3.30
11.15
14.00
10.50
0.00
1
2
1
1
1
115,000
800,000
55,000
117,500
120,000
535,268
4,776,735
366,234
658,558
475,611
1
8
70,000
9,484,150
378,867
51,120,153
11.15
11.10
2
99,000
731,465
1
40,000
245,186
1
3
50,000
274.200
233,246
1,664,714
79
$22,669,520
$118,814,024
15
SURPLUS.
TOTAL
Mailing Time
RESOURCES.
CAPITAL AND
d)
fa .
..-.
E-4 $8
at
=g
p
.74 74
s..-
5 (Richmond).
SURPLUS.
Eil
.ul
aS
tv
ToTAL
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
Mailing Time
(Baltimore &
Richmond).
CAPITAL AND
Number of Banks.
BANKS E'QUIDISTANT FROM
BALTIMORE AND RICHMOND.
VIRGINIA.
$421,250
$2,381,032
73,500
326,979
1
$42,428,620
5
$240,682,696
141
20.50
9.15
&30
4.00
S.20
5,000
1,775,000
9,998,581
1
20,000
3
545,339
,
215,143
1
9.00
. i
50,000
216,816
1
11.30
123,000
476,325
1
9.30
$2,442,750
$13,399,733
11
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
13.50
6.00
16.00
8.40
11.30
8.10
11.00
5.00
13.30
5.25
19.25
12.20
10.10
$42,539,620
$241,443,178
143
Brought Forward
.... Norton ....
... Onancock ...
Onley
.... Orange
Parksley
... Pearisburg
... Petersburg
... Pocahontas
.. Portsmouth
Pulaski
...•
Purcellville
.... Radford
... Richmond
Roanoke
..Rocky Mount
Rosslyn
.Rural Retre9t.
.....St. Paul
Salem
...Scottsville ...
..South Boston..
.Carried Forward.
17.50
9.00
8.00
3.30
16.30
•
3.30
5.00
"APPENDIX A"-Conlinued.
hrs. min.
(Richmond).
Dismal'.
Number of Banks.
hrs. min.
FEDERAL RESERVE
15.
RESOURCES.
CITIES IN FIFTH
Mailing Time
SURPLUS.
BANKS NEARER TO RICHMOND.
5
RESOURCES.
TOTAL
Mailing Time
(Baltimore).
SURPLUS.
CAPITAL AND
Number of Banks.
TOTAL
BANKS NEARER TO BALTIMORE.
Mailing Time
(Baltimore &
Richmond).
CAPITAL AND
Number of Banks.
BANKS E'QUIDISTANT FROM
BALTIMORE AND RICHMOND.
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
VIRGINIA.
$2,442,750
$13,399,733
11
$42,539,620
$241,443,178
143
75,000
433,120
2
30,000
205,000
36,500
427,916
1
1
2
1
555,000
1-15,000
201,571
1,389,134
145,230
3,295,385
2
7.00
7.30
8.00
17.20
10.15
7.00
12.20
6.40
5.00
10.40
11.30
Brought Forward
.... Staunton ....
Strasburg
.... Suffolk ....
.... Tazewell ....
Troutville
Warrenton
Washington
.. Waynesboro ..
Winchester
... Woodstock ...
Wytheville
,
6.20
8.30
2.15
13.40
10.35
9.30
15.00
6.00
8.30
10.00
79
3
$22,669,520
720,000
$118,814,024
3,194,874
1
1
220,000
120,000
977,615
568,349
2
72,000
521,881
1
40,000
273,500
2
1
1
147,500
25,000
47,000
834,842
92,051
239,123
1
2
42,000
610,000
337,195
3,303,045
94
$24,713,020
$129,156,499
WEST VIRGINIA.
.
.
100,000
12.587.750
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$13.827.649
12
$43.541,120
592,692
$247.500,310
9
153
11.15
18.10
14.10
12.20
21.30
15.10
.... Alderson ....
.... Anawalt ....
.... Attsted ....
Belington
.... Berwind ....
.... Bluefield ....
.Carried Forward.
10.35
16.00
13.30
15.20
17.00
12.00
"APPENDIX
BAN1n. Et,jUIDITAINT ritUDI
BALTIMORE AND RICHMOND.
aa
CAPITAL AND
SURPLUS.
Tom'.
RESOURCES.
a
A"-Conlinued.
BANKS NEARER TO BALTIMORE.
ri3
1
•
M
ex § g
0
= r,4
N
=I 71.2
2
,ii mg
EI
'''
o
Z hrs. min.
.
BANKS NEARER TO RICHMOND.
SURPLITS.
TOTAL
RESOURCES•
14
2
FEDERAL RESERVE
= ;44
"" cl
7t1 14
4
CD .
CITIES IN FIFTH
0
CAPITAL AND
4T
1 .)
1-1
C1)
.0
0
Z
pi
5G
.
1
°
.T. .
,_,. .c1
P:1
o
CAPITAL AND
TOTAL
$.1
SURPLUS.
RESOURCES.
..: ...,
aZ
94
$24,713,020
$129,156,499
1
5
1
62,000
1,827,000
25,000
319,392
8,098,825
188,849
1
33,000
232.710
1
1
75,000
50,000
293,321
381,438
3
3
1
343,200
1,371,000
45,400
1,646,256
6,171,718
188,636
111
$28,544,620
$146,677,644
. C.)
.... ...
DISTRICT.
lo.
a
o
hrs. mm. z
hrs. nun.
WEST VIRGINIA.
$2,587,750
$13,827,649
$43,541,120
100,000
12
$247,500,310
591,740
153
1
1,025,000
7,549,175
3
100,000
235,000
1,540,000
35,000
402,731
1,340,752
6,625,084
221,578
1
9
3
1
30,000
300,000
$2,683,250
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
235,638
268,939
$14,332,226
1
1
14
1
1
59,000
70,000
30,500
65,000
151,399
1,782,314
381,058
295,652
1
1
13.15
15.10
14.40
11.05
10.50
18.25
11.00
12.00
10.50
17.05
13.10
16.55
9.30
10.00
24.00
19.00
$47,035,120
$266,841,794
168
11.30
11.00
11.55
13.55
15.15
Brought Forward
Buckhannon
... Ceredo •...
.. Charlestown ..
Clark
Clarksburg
... Clendenin .
Davis
Elkins
Fairmont
Fairview
.. Fayetteville .
Gary
Gormania
Grafton
Griffithsville
Hamlin
Harrisville
Hendricks
. Hinton ....
..
... kuntington . 1
. . . Kenova ...
.
.Carried Forward.)
16.15
14.30
14.00
10.20
13.50
17.45
15.30
16.30
13.50
20.05
12.30
14.45
14.00
13.00
14.30
15.30
11.15
13.15
14.35
-Continued.
"APPENDIX A"
SURPLUS.
RESOURCES.
hrs. m1n.1
Mailing Time
(Richmond).
.A)
FEDERAL RESERVE
DISTRICT.
hrs. min.!
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
111
•
E
ToTAL
t:r
CAPITAL AND
Mailing Time
(Baltimore).
g
CITIES IN FIFTH
Number of Banks.
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
Number of Banks.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
4) 03 .
rA
x
El
PI
-4 c) ra
at
El c., 0
PI
CAPITAL AND
TOTAL
bk §
O
4
SURPLUS.
^;:: 0
ci
RESOURCES.
t
$28,544,620
$146,677,644
1
67,500
311,979
1
70,000
329,491
1
51,650
314,734
1
21,135
82,364
2
128,500
833,075
1
82,000
517,643
1
33,000
148,311
119
$28,998,405
$149,215,241
WEST VIRGINIA.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
15
821,877
1
1,481, 45
9
°
450,355
300,190
1
1
517,769
1,441,033
273,450
659,756
1
2
1
1
1,381,000
27,500
61, 00
9
814,681,431
1
120,000
369,000
30,000
75,000
$2,760,750
356,608
39,500
50,000
1
168
1
265,000
349,205
14
$266,841,794
659,836
75,000
77,500
$14,332,226
$47,035,120
85,000
50,000
$2,683,250
6,876,907
132,602
619,030
5
1
2
21.30
$49,663,320
8281,432.452
188
Brought Forward
Keyser .
..... ..
.... Keystone ....
... Kingwood ...
Logan ... .
13.10
.... Madison ....
11.30
.. Mannington ..
13.45
... Marling-ton ...
3.45
.. Martinsburg
20.30
... Matewan ....
18.00 .. Middlebourne
13.00 . Monongah
13.55
.. Montgomery ..
8.15
Moorefield
11.00
Morgantown
9.30
Newburg
14.40 .New Martinsville.
17.00
... Northfork ...
13.30
Parkersburg
11.00
Parsons
12.15
Pennsboro
19.45 ... Peterstown ...
6.30
17.15
11.00
.Carried Forward.
9.30
13.10
14.00
12.30
14.30
13.05
6.45
16.00
21.00
16.00
13.15
10.45
13.30
12.30
17.40
13.10
16.30
15.30
15.15
15.15
"APPENDIX A"
-Continued.
SURPLUS.
RESOURCES.
gl
G
FEDERAL RESERVE
0
--, pc1
Disnucr.
t4
•,. "cl
..b.-4E
=
z hrs. min.
Number of Banks.
TOTAL
CITIES IN FIFTH
(Richmond).
RESOURCES.
CAPITAL AND
E-
5
SURPLUS.
ri
m
BANKS NEARER TO RICHMOND.
P.
TOTAL
BANKS NEARER TO BALTIMORE.
g
• Mailing Time
CAPITAL AND
ri•
;2 Mailing Time
1
(Baltimore &
LEI
Richmond).
i34
•
Number of Banks.
BANKS EV UIDISTANT FROM
BALTIMORE AND RICHMOND.
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
828,098,405
$149,215,241
9
..
1
92,000
331,057
60,000
262,720
2
109,000
543,739
1
28,000
164,802
1
62,000
277,984
2
330,000
1,578,887
128
$29,679,405
$152,374,430
WEST VIRGINIA.
$2,760,750
814,681,431
1
1
1
103,226
1
708,175
745,721
426,748
2,596,577
422,976
914,887
377,173
30,000
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
112,791
431,865
200,077
85,000
85,000
60.000
411,000
57,000
121,000
41,000
15
891,428
188
2
2
....
2
26,000
$14,681,431
$281,432,452
1,114,940
1,398,005
26,250
65,000
52,000
$2,760,750
$49,663,320
180,000
220,000
161,000
15
215,197
$51,283,570
$292,092,238
1
1
1
3
1 ,
2
1
1
209
11.30
6.45
23.30
16.20
17.00
19.25
20.00
11.15
10.55
9.00
15.05
15.30
11. 0
9
13.00
15.00
20.00
16.35
8.20
12.55
19.00
17.35
Brought Forward
Philippi
Piedmont
.. . Pineville ....
Point Pleasant.
... Princeton ...
Reedy
Richmond
Romney
... Ronceverte ...
Rowlesburg
....St. Albans....
St. Marys
Salem
Shinnston
Sistersville
Spencer
Sutton
Terra Alta
.. Thurmond .
Webster Springs.
'
..... Welch .....
.Carried Forward.
119
14.30
9.45
23.00
19.20
12.30
92. 5
9
93.00
14.15
10.10
12.00
14.20
18.30
14. 0
9
16.00
18.00
23.00
19.35
11.20
12.10
22.00
13.45
"APPENDIX A"
-Continued.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
CITIES IN Firm
TOTAL
FEDERAL RESERVE
CAPITAL AND
TOTA.L
SURPLUS.
RESOURCES.
SURPLUS.
RESOURCES.
DISTRICT.
SURPLUS.
RESOURCES.
128
$29,679,405
$152,374,430
2
235„r")0;)
1,597,854
hrs. min.
hrs. min.
hrs. min.
Ni
CAPITAL AND
Ni
TOTAL
N
CAPITAL AND
WEST VIRGINIA.
15
$14,681,431
$51,283,570
200,000
50,000
••
26,250
156,544
1
$292,092,238
1,185,386
350,803
209
1
1
40,000
$2,760,750
••
,195
149
1
14.00
11.30
20.55
16.00
20.35
Brought Forward
Weston
West Union
... Williamson ...
Williamstown
Winona
17.00
14.30
16.25
19.00
•
NORTH CAROLINA.
13.20
18.00
11.30
13.20
19.50
12.50
14.00
11.00
13.90
11.10
15.20
11.25
$2,787,000
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$14,837,975
16
$51,573,570
$203,770,622
212
:kshboro
.... Asheville ....
... Burlington ...
... Charlotte ...
Cherryville
.... Concord ....
Creedmor
Dunn
.... Durham
..Elizabeth City
Elkin
.. Fayetteville
.Carried Forward.
11.20
16.00
9.30
11.20
17.50
10.50
9.40
6.30
8.00
8.30
14.00
6.55
1
1
1
5
1
1
1
1
9
1
1
2
30.250
315,000
65,000
1,850,000
35,000
125,000
26,325
50,000
510,000
150,000
42,600
320,600
257,815
1,497,667
365,046
9,526,956
155,581
539,420
115,360
386,691
3,599,364
779,941
349,932
2,138,246
148
$33.434,680
$173,684,303
"APPENDIX A"
-Continued.
BANKS E'QUIDISTANT FROM
BALTIMORE AND RICHMOND.
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
CITIES IN FIFTH
TOTAL
FEDERAL RESERVE
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
SURPLUS.
RESOURCES.
DISTRICT.
SURPLUS.
RESOURCES.
$33,434,680
30,000
$173,684,303
138,578
1
1
9
1
1
1
1
1
1
1
2
1
1
1
9
250,000
130,000
70.000
592.500
110,000
119,000
51,500
240,000
250,000
27,550
31,000
275,000
30,000
64,000
30,000
128.500
1,615,237
567,013
270,713
3,333.864
701,784
615,687
224,262
904,693
1,427,392
97,837
119,202
1,236,260
192,970
357.911
211.567
614,033
9
1
1
1
112,500
73,000
67.500
122,000
558,146
435,716
462.241
572,206
174
$36,238,730
$188,351,615
hrs. min.
hrs. min.
hrs. min.
N
CAPITAL AND
Ni
TOTAL
Ni
CAPITAL AND
NORTH CAROLINA.
$2,787,000
$14,837,975
16
$51,573,570
$293,770,622
212
21.30
14.00
11.00
14.50
10.30
13.45
8.00
20.30
15.00
11.00
29.40
14.15
12.00
15.20
16.00
11.30
19.00
14.00
16.45
16.00
16.30
$2,787,000
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$14,837,975
16
$51,573,570
$293,770,622
212
Brought Forward
...Forest City...
.... Gastonia ....
Goldsboro ...
•
.... Graham ....
... Greensboro ...
... Greenville ...
... Henderson ...
. Hendersonville
.... Hickory ....
...High Point...
.... Jefferson ....
.Kings Mountain.
.... Kinston ....
▪ Laurinburg
Lenoir .....
... Lexington ...
Lincolnton
▪
... Louisburg ...
... Lumberton ...
Marion .....
•
.... Monroe ....
.Carried Forward.
19.30
12.00
6.30
12.50
7.35
9.20
3.50
18.30
13.00
9.00
26.40
12.15
7.30
10.50
14.00
9.30
17.00
7.40
11.45
14.00
12.00
148
1
0
"APPENDIX A"
-Continued.
BANKS EljUIDISTANT
'HUM
BALTIMORE AND RICHMOND.
cr3
CAPITAL AND
SURPLUS.
Tana.
RESOURCES.
ct) 03 .
gi
.1.4
0
'4
01.)
tl
a
Z
-. a) Po
oo
CC 0 a
S ,
1:1
-.- c..)
.
-. 0:1 .4.
el g
'''
hrs. min.
BANKS NEARER TO BALTIMORE.
pi
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
<1, •
.
BANKS NEARER TO RICHMOND.
CITIES IN FIFTH
a) .
u3
E-i
E-i t
as
.1z
cl
FEDERAL RESERVE
CA
tc §)
to"
.;4 ,
c1
1•4
4
0
= ,--!
0
::: ,.,..
DISTRICT.
.74 03
t.,
• c.)
=4,
.
a,
r)
a)
ct Pc1
-s
•-•..,
---s
g
E
g
hrs. min.
Z hrs. min,
• '77711
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
1
1
1
1
1
2
1
2
$36,238,730
61,000
63.000
100,000
180,000
60,000
230,000
890,000
56,500
40,000
250,000
208,000
245.000
70,000
33.000
120,000
150,000
70.000
1,505,000
150,000
462,500
$188,351,615
279,647
409,895
417,348
799,903
301,717
1,185,852
5,883,901
253,339
465,745
1,192,091
1,316,181
1,322.688
449,723
264,691
513,530
554,238
401.738
9,119,478
652,460
2,300.299
202
$41,182,730
$216,436,079
NORTH CAROLINA.
• r17
$2,787,000
$14,837,975
16
$51,573,570
$293,770,622
212
15.00
15.30
15.10
13.30
14.30
13.40
11.00
12.00
9.50
12.00
22.40
13.30
13.50
11.10
15.40
15.00
20.10
14.30
9.30
12.40
$2,787,000
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$14,837,975
16
$51,573,570
$293,770,622
212
Brought Forward
... Mooresville ...
... Morganton ...
...Mount Airy...
....New Berne....
.... Newton ....
..... Oxford .....
.... Raleigh ....
.Roanoke Rapids.
..Rocky Mount...
... Salisbury ...
..... Shelby .....
... Statesville ...
.... Tarboro ....
.. Thomasville ..
... Wadesboro ...
.. Washington ..
.. Waynesville ..
.. Wihnington ..
.... Wilson ....
. Winston-Salem .
.Carried Forward.
13.00
13.30
13.10
9.00
12.30
6.15
6.30
6.00
4.20
10.00
20.40
11.30
9.20
9.10
11.10
10.30
18.10
10.00
5.00
10.00
174
1
1
1
1
1
2
3
1
1
2
2
9
-Continued.
"APPENDIX A"
BALTIMORE AND RICHMOND.
BANKS E'QUIDISTANT FROM
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
Cams IN Fr=
CAPITAL AND
TOTAL
FEDERAL RESERVE
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
SURPLUS.
RESOURCES.
DISTRICT.
SURPLUS.
RESOURCES.
NI
hrs. min.
hrs. min.
NI
TOTAL
N
CAPITAL AND
15.30
19.00
18.20
17.15
13.00
22.50
12.40
12.00
11.10
13.00
14.30
13.45
15.30
13.00
9.00
14.30
12.45
14.30
14.30
23.50
20.50
202
1
1
1
1
1
1
1
3
1
1
1
5
1
1
1
1
1
4
1
1
1
$41,182,730
105,000
62,500
115,000
37,500
125,000
52,000
00,000
1,800,000
28,500
135,000
60,000
1,825.000
31,000
54,750
162,000
26,200
180,000
680,000
120,000
26,700
75,000
$216,436,079
340,760
271,90S
351,526
264,340
460,870
143,778
304,312
10,731,444
146,302
645,774
254,325
11.056,286
226,975
278,938
770,095
105,848
603,647
3,105.325
586,430
73,493
365,661
232
$46,943,880
$247,524,116
SOUTH CAROLINA.
$2,787,000
$14,837,975
16
$51,573,570
$293,770,622
212
18.00
21.00
20.20
19.15
18.00
27.20
15.10
17.00
13.00
17.30
17.00
16.15
20.00
18.00
14.00
16.30
14.45
16.30
17.00
28.20
22.50
$2,787,000
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$14,837,975
16
$51,573,570
$293,770,622
212
Brought Forward
... Abbeville ...
Aiken
.... Anderson
Batesburg
▪
.. Bennettsville
Bishopville
▪
.... Camden
• Charleston
.... Cheraw
.... Chester
.... Clinton
... Columbia
.... Conway
... Darlington ...
.... Florence ....
....Fort
.... Gaffney
... Greenville
... Greenwood
... Hartsville ...
... Lancaster
Brought Forward
"APPENDIX A"—Continued.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
BANKS NEARER TO BALTIMORE.
BANKS NEARER TO RICHMOND.
CITIES IN FIFTH
TOTAL
FEDERAL RESERVE
CAPITAL AND
TOTAL
SURPLUS.
RESOURCES.
SURPLUS.
RESOURCES.
DISTRICT.
SURPLUS.
RESOURCES.
232
$46,943,880
$247,524,116
1
1
1
1
1
1
9
1
3
2
9
1
1
30,000
29,000
110,000
28,000
107,000
28,250
500,000
29,000
1,235,000
380,000
184,000
30,000
65,000
177,215
237,367
472,751
165,202
479,208
197,259
2,297,774
147,855
4,407,83.3
1,235,331
736,514
133,348
307,002
250
$49,699,130
$258,518,775
hrs. min.
hrs. min.
hrs. min.
N
CAPITAL AND
Ni
TOTAL
N
CAPITAL AND
SOUTH CAROLINA.
$2,787,000
$14,837,975
16
$51,573,570
$293,770,622
212
Brought Forward
19.00
18.30
19.50
19.50
21.30
21.10
15.30
18.00
15.30
19.00
18.00
21.20
21.20
$2,787,000
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$14,837,975
16
$51,573,570
$293.770,622
212 '
.... Leesville ....
... Lexington ...
.... Marion ....
.... Mullins ....
... Newberry ...
... Prosperity ...
....Rock
.... Sharon ....
.. Spartanburg ..
.... Sumter ....
..... Union .....
Walterboro
... Yorkville ...
.GRAND TOTALS..
17.00
16.30
14.50
14.50
17.30
16.40
13.30
16.00
13.30
17.00
16.00
16.20
16.50
121
"APPENDIX B."
(Rased Solely on Figures in "Appendix A.")
Distance in Hours,
Mailing Time, between National
Banks in Fifth
District
Total Resources of All National Banks in the
p
tt.d =
Fifth Federal Reserve District.
BALTIMORE.
AND-
0
Not more than 59 min.
1 hr. to 1.59 min.
2 hrs. to 2.59 min.
3 hrs. to 3.59 min.
4 hrs. to 4.59 min.
5 hrs. to 5.59 min.
6 hrs. to 6.59 min.
7 hrs. to 7.59 min.
8 hrs. to 8.59 min,
9 hrs. to 9.59 min.
10 hrs. to 10.59 min.
11 hrs. to 11.59 min.
12 hrs. to 12.59 min.
13 hrs. to 13.59 min.
14 hrs. to 14.59 min.
15 hrs. to 15.59 min.
16 hrs. to 16.59 min.
17 hrs. to 17.59 min.
18 hrs. to 18.59 min.
19 hrs. to 19.59 min.
20 hrs. to 20.59 min.
21 hrs. to 21.59 min.
22 hrs. to 22.59 min.
23 hrs. to 23.59 min.
24 hrs. to 24.59 min.
26 hrs. to 26.59 min.
27 hrs. to 27.59 min.
28 hrs. to 28.59 min.
29 hrs. to 29.59 min.
31 hrs. to 31.59 min.
34 hrs. to 34.59 min.
0
Y2
1%
2%
/
312
4%
5%
6%
7%
8%
9%
10%
11%
/
1212
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
26%
27%
28%
29%
31%
34%
RICHMOND.
$114,094,615
$51,120,153
66,185,066
12,083,258
8,280,775
13,667,926
61,625,229
17,598,400
22,789,426
35,951,110
22,779,593
24,256,535
22,792,562
10,269,536
36,885,356
25,114,105
18,108,144
18,994,924
16,261,354
4,661,564
4,832,641
4,727,186
2,213,703
1,938,743
331,057
235,638
4,776,735
4,846,039
27,505,345
65,918,639
122,435,443
27,435,990
5,964,922
24,291,662
26,317,387
25,728,599
30,621,723
23,105,766
58,627,293
25,703,911
3,911,054
15,607,607
6,171,837
4,282,278
2,909,447
4,671,653
1,511,349
1,935,856
1,259,391
235,638
97,837
143,778
73,41)3
97,837
133,818
133,818
$567,127,372
Average Distance of all Resources of National Ranks
in Fifth District
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Federal Reserve Bank of St. Louis
$567,127,372
7.3 hrs.
8.1 hrs.
4
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Report of Industries Located Within
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DECEMBER, NINETEEN FOURTEEN
BALTIMORE, MARYLAND
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
41
THE INDUSTRIAL SURVEY OF BALTIMORE
Projected by J. E. ALDRED and carried out
under the supervision of E. V. ILLMER,Secretary,and the following Advisory Committee
DR. JACOB H. HOLLANDER
MR. JOHN R. BLAND
MR. FREDERICK W. WOOD
DEDICATED TO THE CITIZENS OF BALTIMORE
JANUARY 10, 1915
,
MR. J. E. ALDRED,
Industrial Survey of Baltimore, Baltimore, Md.
My dear Sir:
In conformity with the general plan submitted, I have made and completed
a thorough and accurate survey of the local situation as relating to manufactures
and beg to submit my conclusions herewith.
The utmost care and supervision were exercised in both the collection and
compilation of the statistics embraced in the statements which accompany the
report, and the trade comments are the result of exhaustive and intimate study
of conditions peculiar to the industries considered. The foremost aim was
to display the existing status of each industry, and it may be possible that
through rigid adherence to this principle, one or more of the manufacturers who
have co-operated in the Survey may take exception to the statements of fact
as they relate to their particular business, but to have deviated would have
defeated the prime object of an industrial survey.
In transmitting this report, I beg leave to state further that the plans as
originally conceived were subjected to extensive alterations and modifications
necessitated by inherent difficulties encountered in collecting the essential
information, due largely to want of confidence in the intent and purpose of
the Survey, which in most cases was occasioned by lack of familiarity with the
conditions that prompted this investigation.
Baltimore's citizens have not thoughtfully analyzed the local industrial
conditions and carefully studied their opportunities, a fact borne out by certain
conclusions to be drawn from the data compiled in this report.
That Baltimore needs additional industries employing both skilled and
unskilled workmen in large numbers is evidenced by the universal complaint
of local manufacturers requiring an abundance of female help, who contend
that they are considerably handicapped through the restriction of male labor
to a limited number of pursuits resulting in consequent lack of attraction for
families to locate here.
In addition to the co-operation of individual manufacturers, trade and civic
organizations in general materially assisted in accomplishing the aims of the
Survey. These associations are working energetically to overcome characteristics of selfishness and to instil civic pride into the community to the end that
an altruistic spirit may prevail for the advancement of the welfare of Baltimore
and its citizens.
Anent commodities produced, there was a marked increase in the value of
manufactures for the year 1913 compared with 1909, the latter being the most
recent census issued by the Government. To the student this may appear
lacking in conformity with previous data, but as the compiler of the statistics
herewith submitted, I have positive knowledge of conditions which have contributed to this large gain and it must suffice to state that the figures given are
correct in every particular. There is a contingency that the Census of 1914,
which will be made under the direction of the Government, will not show the
volume of business reported by the Industrial Survey for the following fundamental reasons: Industrial depression prevailing during the first six months of the
present year and subsequent stagnation of business in the early fall due to
European hostilities.
Yours respectfully,
December 15, 1914.
E. V. ILLMER, Secretary.
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111
My dear Mr. Aldred:
At your request we have reviewed the contents of the report comprising
an Industrial Survey of Baltimore.
Acting upon your further suggestion that we should make such recommendations as would render the Survey of practical usefulness to the citizens
of Baltimore, we have prepared the report which accompanies this letter.
We have not found it practicable to verify the detailed statements and
figures set forth in the report, but we have no reason to question their essential accuracy.
Very truly yours,
JACOB H. HOLLANDER,
JOHN R. BLAND,
FREDERICK W. WOOD.
January 10, 1915.
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Federal Reserve Bank of St. Louis
iv
REPORT OF THE ADVISORY COMMITTEE
The Committee to whom was referred the text and tables of the Industrial
Survey have given careful attention to the matter therein contained and beg
to present the following opinions:
At the outset, the Committee deem it proper to recognize the services rendered the City of Baltimore by those responsible for the Survey. For the first
time an attempt has been made to take a descriptive inventory of our industrial life, not as an academic performance nor as an advertising project, but
as a deliberate and sober inquest designed to acquaint our citizen-body with
facts as they are—to the end that the purpose of the Survey may be realized.
The one clear and emphatic impression left upon our minds by the data
hereinafter presented is that the industrial growth of Baltimore has been less pronounced than it should have been, having in mind the general economic progress
of the country and the forward strides of other cities no more favorably circumstanced.
The population of Baltimore has increased less rapidly than that of certain
competing communities and it has fallen back in relative rank among the great
cities of the United States. Real estate values, a reasonable index of industrial
activity, have been, with some notable exceptions, relatively immobile and there
have been considerable areas of absolute decline marked by vacant properties
and reduced rentals. The number of newly established industries is less considerable than it seems reasonable to expect and there are certain discouraging instances of the decay of one-time flourishing establishments. There is no evidence of any considerable influx of industrial workers, such as inevitably occurs
in a growing manufacturing center.
We deem it mistaken policy in anywise to suppress or gloss over the fact that
the industrial progress of Baltimore has been thus sluggish. There is less reason
for such suppression because the situation which we face is an unnecessary and
and remediable one. If we were in our present situation by virtue of inevitable
conditions, it would perhaps be expedient to put the best face possible upon
matters and to magnify our position, defective though it might be. Such is not,
however, the case. The forces which have delayed the industrial advance of
Baltimore have resulted from an economic transition the ill effects of which have
been too long tolerated and the removal of which is possible and practicable.
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Federal Reserve Bank of St. Louis
Prior to the Civil War, the dominant economic activities of Baltimore were
commerce and trade. Manufactures there were—and important and prosperous ones at that. But it was in the direction of trade—foreign and domestic—
that the energies of our business men were for the most part expended. By it
the great fortunes of the city had been acquired—there our young men were accustomed to look for a business career—to it our financial institutions were adjusted and in it our enterprise found expression.
The outbreak of hostilities between the States brought this fabric to the
earth with a crash. Our markets were destroyed—our credit was impaired—and
the great region for which we had been the market place and base of supplies was
devastated. The interruption of accustomed lines of communication forced our
business energies into new channels, and that which we lost in trade we sought
to regain in manufactures. It was not an easy transition and the difficulties incident thereto were aggravated by failure to realize the situation—to supplement
the natural impulses of self interest as a motive to business enterprise by deliberate communal policies. In a word the industrial retardation of Baltimore is
largely traceable to the absence of organized effort to make easy an abrupt change
in our business life.
A concrete illustration of this tendency has been the failure of Baltimore to
make any material progress in the years immediately preceding the Industrial
Survey, either in the aggressive development of existing manufacturing establishments or in the attraction of new industries. There has been an expanding
tendency in specific industrial pursuits—copper smelting and refining, the manufacture of tin cans and specialties, preserving and canning fruits and vegetables,
and slaughtering and meat packing. Opposed to this, on the other hand,
Baltimoreans have within the past decade witnessed the gradual curtailment, and
in some instances the absolute elimination of certain industrial activities which
had they been financed and husbanded with the same measure of efficiency and
diligence that prevailed in the cases of the trades mentioned above, would
probably have attained as great or greater development. The industries
which have suffered local decline in this manner include those engaged in the
manufacture of railroad cars and construction,sugar (refining),iron bars,chrome,
crockery and pottery, boots and shoes, wall paper and soap.
The citizen-body of Baltimore is not differently constituted from that of
any other progressive community. Individual initiative is no less, business
talents are as pronounced, resourcefulness and enterprise are as prevalent. That
which has been lacking is a collective consciousness and a communal effort which
should take account of existing difficulties growing out of the historical change of
Baltimore from a commercial to a manufacturing city, and which should encourage and facilitate the endeavors of individual enterprise to adapt itself to this
necessity.
The positive elements favorable to a marked industrial advance are present
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Federal Reserve Bank of St. Louis
vi
at this time in Baltimore in no less degree than in any other city in the United
States. The three great essentials in competitive industry are (1) LABOR,
(2) FUEL,(3) FREIGHT RATES. In other particulars—geographical location, manufacturing sites, taxation exemption, climatic conditions, municipal
spirit—Baltimore probably enjoys in the net aggregate not less favorable conditions than exist elsewhere. But in the matter of labor supply, coal and
transportation, Baltimore possesses clear differential advantages.
It will appear from the detailed exhibits (Tables Nos. 1 and 2) appended to
this report, that the average scale of wages in representative industries is markedly
lower in Baltimore than in other competing centers, and that such lower rates are
not in consequence of underpayment, but proceed from a lower cost of living
due to the cheaper price of staple foods, house rentals and living conveniences.
In the matter of fuel, a marked advantage appears in the fact that the delivered
all-rail cost of bituminous coal to Baltimore is $2.80 per ton as against $3.15 per
ton to New York or to Boston. Finally, the superior advantages of Baltimore
in the matter of freight rates are no less striking, as is clearly set forth in the
appended maps (Page 77) to which particular attention is directed.
If the facts collected by the present Survey be examined with regard to the
future industrial growth of Baltimore and in the light of the foregoing statements,
it becomes apparent that marked development should be possible in three directions, by the encouragement of:
1. Industries entirely unrepresented in Baltimore for whose products
there is now an actual local demand.
2. Industries entirely unrepresented in Baltimore but conspicuously successful in similar communities.
3. Industries now in operation in Baltimore but capable of marked expansion.
Noteworthy examples of industries included in these several groups are as
follows:
1. Industries whose products would meet the needs, for materials or
partly finished wares, of industrial establishments now located in Baltimore:
Card board
Wagon materials of iron and steel
Printers' ink
Malting house
Thread, twine and rope
White lead
Buttons
Sugar refinery
Tin and terne plate
Machine tools
Bar iron mill
Plate and window glass
Cacao products
Hardware and accessories used in the
Sweat bands and hat bands
leather, trunk and electrical trades
Builders' hardware
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Federal Reserve Bank of St. Louis
vii
2. Industries which have attained prominent development in other cities,
but entirely without representation in Baltimore:
FOUNDRY AND MACHINE SHOP PRODUCTS
Agricultural implements
Oil stoves
Automobiles
Lawn mowers
Electrical motors, machinery and apHydraulic rams, hand and steam
pliances
pumps
Fire arms
Radiators
Edge tools
Steam and hot water furnaces
Nails and spikes
Wrought iron pipe
HARDWARE
Locks
Brackets
Wood and machine screws
Oilers
Spirit levels
Picks and shovels
Spades
Scoops
Files
Cutlery
Metal weather strip
Saws
Hammers
Mallets
Screw drivers
Wrenches
Chains
MEN'S FURNISHINGS
Collars and cuffs
Elastic woven goods
Gloves
Garters
Leather belts
TEXTILES
Hammocks
Fancy jackets
Cotton and silk hose and half hose
Knit underwear
Combination suits
Wristers
Cordage and twine other than cotton
Thread
HOUSEHOLD SPECIALTIES
Curtain rods
Oil stoves
Mops
Washing machines
Carpet sweepers
Carpets
Chinaware
Clothes wringers
GLASS
Tumblers
Pressed and cut glassware
Plate and window glass
Jars
Lamp chimneys
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Federal Reserve Bank of St. Louis
viii
RUBBER
Clothing
Mats
Tubing
Brushes
Bands
Boots
Shoes
Toys
Medical and hygienic appliances
STATIONERY GOODS AND OFFICE SUPPLIES
Index and card systems
Blackboards
Copying devices
Playing cards
Inkstands
Metal office furniture
Desk pads
LEATHER
Pocket books and satchels
Chair seats
Garments
LUMBER
Excelsior
Chain and bucket pumps
Refrigerators
Kitchen cabinets
WOODEN GOODS
Butter bowls
Dishes
Chopping bowls
Clothes pins
Tooth picks
Wash boards
Churns
Step ladders
Wash tubs and buckets
FOOD PRODUCTS
Sugar and molasses refining
Cereals, exclusive of hominy
Condensed milk
MISCELLANEOUS
Lamps
Wall paper
Watches and clocks
Matches
Brass and other metal beds
White lead
Lead pencils
Scales and balances
Sporting and athletic goods
Starch
Tin and terne:plate
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Federal Reserve Bank of St. Louis
Tin foil
Aluminum pots and pans
Oil cloth and linoleum
Metallic packing
Ice cream freezers
Wire screen
Buttons other than metal
Fire extinguishers
Candles
Wheelbarrows
ix
3. Industries represented by plants with limited facilities, but capable of
marked expansion:
Rug weaving
Envelopes
Cooperage
Soft and stiff felt hats
Trunks and suit cases
Children's clothing
Saws
Suspenders
Ink, printing and writing
Varnishes
Picture frames
Artificial flowers
Blacking
To aid in the attraction of new establishments and the expansion of existing
ones, it seems to the Committee that effort might profitably be expended in
improving the local demand for local products. As at present constituted,
Baltimore manufacturers are supplying but a small part of our home consumption and that of an essentially neighborhood kind. We realize that what has
been called the territorial division of labor is constantly extending the area
from which a local demand is met, and that in the long run consumers will buy
only in those markets where the things desired can be obtained upon the most
favorable terms. But it seems clear that the wide gap between local producers
and local consumers tends to produce a feeling of chronic apathy toward local
manufacturing enterprises, resulting in discouragement to existing establishments and in neglect of new enterprises.
The various trade and civic bodies of Baltimore might very properly individually and in co-operation undertake the work of establishing closer business
relations between the manufacturers and merchants of the city to the end that
local effort should receive proper encouragement and stimulation.
Going beyond this, the Committee, however, venture to impress upon the
varied interests of Baltimore—its commercial organizations, its financial bodies,
its owners of real estate, its men of affairs generally, all of those in fact who have
at heart the future growth and prosperity of the city—the necessity for taking
some definite and immediate step towards utilizing the information here placed
before them to the ultimate end that prompted the movement—the upbuilding
of our city.
The Committee have been deeply impressed with the great value of the
Industrial Survey in presenting clearly and in detail the industrial situation in
Baltimore—its past development, its present condition and its future possibilities.
Unless, however, the citizens of Baltimore are willing to take hold of the
work and willing to give evidence of their interest by the formation of some agency
which will aid in developing, stimulating, increasing and promoting the industrial interests of Baltimore, this Survey and all the efforts expended in
connection with it will amount to naught.
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Federal Reserve Bank of St. Louis
This subject is also of vital and far-reaching importance to the City of
Baltimore and to the State of Maryland. If the proposed plan of development
meets with a measure of success it is bound to result in an increase in industrial
activities, in population, in the demand for dwelling houses and in the requirement for improved and unimproved property for factory sites—all of which mean
an increase in the basis of taxation and in municipal and state revenue.
As a practical proposal the Committee urge the immediate formation of a
corporation empowered to further the above interests. A dozen of the best
known men of Baltimore should act as its incorporators. These men should
be carefully selected from the financial, industrial and commercial walks of life.
They should be thoroughly imbued with the absolute necessity and importance
of the work to be undertaken.
The capital of the company to be formed should be from $100,000 to $250,000,
this to be increased as the use for larger capital may be found necessary. The
subscribed capital should be paid into the treasury on the call of the board.
The sum so acquired should be utilized in lending at legal rates amounts to
desirable industrial enterprises, either to those already located in Baltimore or
to those that may be subsequently induced to locate here.
The main purpose of the corporation would be to advance money for the
assistance of small industries. Preference should be given to establishments of
moderate size, whose success would be reasonably assured, and which give
promise of growth from small beginnings into larger and greater institutions.
It is interesting to speculate on the cumulative good that would accrue to
the community in the course of ten years if a certain number of such industries,
each employing a moderate working force, were given financial assistance each
year. Of the total number of such concerns assisted a limited number would be
unsuccessful, but the remainder would have become self-supporting and would
probably have increased their respective undertakings so as to require the employment of a large body of workers with resulting stimulus to the demand for
houses and necessaries. Such a movement would in itself work a remarkable
change in the local industrial situation.
Although the especial advantage of this new financing corporation would lie
in its purpose and ability to assist smaller industries susceptible of larger growth,
the corporation would also be in a position to consider cases of local concerns
which require additional capital, and to assist them to properly present their
propositions to the financial institutions and the public. Similar offices could
be rendered to outside projects seeking local establishment, in the way of arousing
public interest, subscribing part of the required capital and aiding in obtaining
subscriptions to the remainder of the capital stock.
No gifts of money are to be made to any industry whatever. All advances
made are to be in the shape of loans, pure and simple, and are to be returned to
the corporation within a stated period of time. These advances should be
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Federal Reserve Bank of St. Louis
xi
secured by the issuance of preferred stock of the borrowing corporation, bonds,
chattel mortgages, or in any manner that may be considered best by the board
of directors.
As a condition precedent to such loans, the board should have the right to
delegate one or more persons to thoroughly study the operation and condition
of any industry seeking aid and the character of those in charge thereof; and to
provide also for representatives upon the directorate or in the active management, if such be deemed desirable, who would keep in touch with the progress of
the establishment and be in a position to make report from time to time to
the lending corporation.
Such a corporation must not be considered an eleemosynary institution
in any sense. It should become known as an organization in its best and broadest
sense for the promotion and development of such industrial enterprises as are
conducted on sound principles of business, or which show a willingness to be so
conducted.
One of the most important services which such a company could render
would be to encourage the existing financial institutions and capitalist interests
of Baltimore to participate in new industrial enterprises. The Committee are of
the opinion that whatever hesitation may heretofore have shown itself on the
part of local capital in this direction, has resulted not from any unwillingness,
but rather from the absence of any agency of inquiry and recommendation.
The company could thus serve as an intermediary between prospective enterprises and existing financial institutions, bringing the two into personal relations
and instituting the necessary inquiries upon which capital investment ordinarily
waits.
In all probability, some of the industries to which loans may be made will
not succeed. But with a watchful and careful interest on the part of the lending
corporation in the affairs of the borrower these failures should be few and the
losses from such cause small. The Committee believe, however, that most of
the industries thus aided will succeed. It will be from their success, evidenced
by the tangible return to stockholders, that the advancement of the city's
interests will result.
The foregoing recommendations are not intended to exhaust the possibilities or usefulness of the Survey. There will be found other things therein
which will commend themselves to existing trade and civic bodies as having a
direct bearing on their particular functions and capable of successful development.
The purpose of the Committee has been, by presenting certain definite
recommendations, to insure some early practical result of advantage to the city
and its population.
Respectfully submitted,
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Federal Reserve Bank of St. Louis
JACOB H. HOLLANDER,
JOHN R. BLAND,
FREDERICK W. WOOD.
xii
TABLE No. 1
AVERAGE SCALE OF WAGES
As of May 15, 1913
BALTIMORE
Bakery trades
Building trades
Granite and Stone
Metal Trades
Millwork trades
Printing trades
Book and Job
Newspaper
New York
Boston
Philadelphia Pittsburgh
.2489
.4462
.5208
.3480
.3056
.3089
.5603
.5887
.4306
.3321
.3249
.4973
.5359
.3607
.4500
.3184
.4963
.5208
.3875
.4300
.3628
.5135
.5417
.4055
.3889
.3467
.4580
.5135
.6746
.4231
.6417
.3919
.4889
.3991
.4982
Authority: Bulletin of the United States Bureau of Labor Statistics-Whole No. 143.
Wages and Hours of Labor-Series No. 7.
TABLE No. 2
RETAIL PRICE OF STAPLE FOODS
As of December 15, 1913
From Statistics Compiled by the United States Government
BALTIMORE
Total
Boston
0.222
.150
.203
.150
.764
.0250
.332
.407
.0492
.088
0.257
.156
.207
.159
.787
.0342
.366
.409
.0486
.090
0.362
.162
.241
.158
.871
.0373
.359
.381
.0535
.089
0.298
.176
.217
.152
.758
.0280
.364
.413
.0500
.080
0.270
.166
.248
.156
.776
.0302
.349
.421
.0550
.092
$2.3902
Sirloin steak-lb
Chuck steak-lb
Hens-lb.
Lard-lb.
Flour-bag-3/ bbl.
Corn meal-lb.
Storage eggs-doz.
Creamery butter-lb._ _
Sugar-lb.
Milk-qt.
New York
$2.5138
$2.7138
$2.5360
$2.5632
Philadelphia Pittsburgh
Comparative Purchasing Power of One Dollar
BALTIMORE
All Staples considered__
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Federal Reserve Bank of St. Louis
New York
Boston
100.00
95.09
88.08
Philadelphia Pittsburgh
94.25
93.25
STATEMENT No. 1
VALUE OF MANUFACTURES AND CLASSIFICATION OF INDUSTRIES
BALTIMORE MFTROI OLITAN DISTRICT-YEAR 1913
-NUMBER OF
EMPLOYEES
REFERENCE No.
INDUSTRY
CHARACTER OF
1
Number of
Establishments
Engaged In
EXECUTIVE S NLES
AND CLERICAL
UNSK I LLED
SKILLED
PRODUCT
-VALUE AND DISPOSITION
VALUE OF
TOTAL
Male
Female
Male
Female
Male
MANUFACTURES
PER CENT.
OF TOTAL
MANUFAC-
; REMARKS
LOCAL SALES
SHIPMENTS
TURES
Female
BREWING AND DISTILLING:
Malt Liquors
Spirituous Liquors
12
14
669
141
91
188
145
105
28
7
933
441
$5,820,841
2,951,867
1.65%
.83%
$5,529,799
837,532
$ 291,042
2,114,335
CEMENT,CLAY AND PRODUCTS:
Builders' Materials
Brick
Crockery and Pottery
Paving and Roofing Materials
19
9
3
7
185
487
12
123
187
881
3
2
606
33
37
3
64
3
408
1,407
70
796
452,831
1,252,134
204,000
4,062,766
.13%
.35%
.06%
1.15%
323,819
935,655
134,000
3,994,080
129,012
316,479
70,000
68,686
See
See
See
See
Page
Page
Page
Page
4.
5.
6.
6.
CHEMICALS, OILS, ACIDS. ETC.:
Acids, Fertilizer, etc.
Paints, Varnishes and Dyes
Soaps and Perfumery
Miscellaneous Chemicals and Oil
23
11
11
15
749
98
21
370
3
1
26
1,008
87
33
678
25
7
446
90
31
346
51
24
14
41
2,257
300
150
1,442
15,976,306
1,933,084
441,519
11,965,946
4.52%
.55%
.12%
3.39%
2,229,783
323,550
190,211
2,253,500
13,746,523
1,609,534
251,308
9,712,446
See
See
See
See
Page
Page
Page
Page
7.
8.
9.
10.
4
DRUGS AND PREPARATIONS
65
354
440
200
154
389
165
1,702
6,673,355
1.89%
987,346
5,686,009
5
FOOD PRODUCTS:
Bakery Products and Flour
Cereals and Spices
Preserved and Canned Foods
Slaughtering and Meat Packing
Candy and Confectionery
Miscellaneous
381
5
52
49
50
12
860
36
876
826
429
41
62
25
515
__ _ _
831
28
666
57
1.935
359
266
73
269
16
2,914
___ _
709
87
487
33
378
158
153
82
98
5
75
9
60
50
2,442
172
6,693
1,352
2,448
361
6,740,474
2,068,581
12,971,721
18,533,317
5,680,978
2,199,167
1.91%
.59%
3.67%
5.25%
1.60%
.62%
4,221,528
417.699
1,028,317
8,451,605
1,317,578
374,755
2,518,946
1,650,882
11,943,404
10,081,712
4,363,400
1,824,412
See
See
See
See
See
See
Page
Page
Page
Page
Page
Page
11.
12.
12.
13.
14.
15.
11
7
51
6
39
408
134
2,871
3,641
2,571
10
206
11
946
1,105
3,430
20
50
45
323
463
416
8
4
28
2
35
682
194
4,190
5,211
6,520
1,344,388
478,870
6,730,245
11,422,110
11,833,751
.38%
.14%
1.90%
3.23%
3.35%
548,780
299,225
1,664,261
1,990,000
1,209,348
795,608
179,645
5,065,984
9,432,110
10,624,403
See
See
See
See
See
Page
Page
Page
Page
Page
16.
16.
16.
17.
18.
5
6
398
69
1
785
13
68
8
11
1
1,322
91
1,681,521
158,494
.48%
.04%
490,915
92,912
1,190,606
65,582
See Page 20.
See Page 20.
JEWELRY AND SILVERWARE:
Jewelry
Silverware
Miscellaneous
14
10
8
61
279
30
11
24
43
4
17
57
4
3
10
2
116
389
45
322,100
974,000
64,000
.09%
.28%
.02%
187,780
458,500
31,500
134,320
515,500
32,500
See Page 21.
See Page 21.
See Page 22.
LEATHER AND MANUFACTURES:
Belting
Shoes
Harness and Saddlery
Finishing of Leather
Miscellaneous
7
7
14
4
5
82
339
226
18
60
•
299
184
7
44
70
70
6
18
29
10
4
3
481
673
320
57
93
1,690,452
1,885,000
783,399
128,500
165,000
.48%
.53%
.22%
.03%
.05%
159,500
511,750
148,637
39,000
100,300
1,530,952
1,373,250
634,762
89,500
64,700
See
See
See
See
See
Page
Page
Page
Page
Page
22.
23.
23.
24.
25.
LUMBER AND MANUFACTURES:
Baskets, Willow Ware, etc.
Boxes, Barrels, etc.
Furniture
Millwork
Miscellaneous
23
29
35
22
22
90
1,008
1,297
786
956
6
105
78
20
204
17
5
265
2,908
102
54
601
420
9
4
2
5
82
53
12
55
8
36
8
37
1,060
7.447
967
163
1,130
54
23
27
2
2,280
5,073
7,145
135
1,508
558
150
424
118
6
138
27
208
917
2,575
250
7
74
33
16
VEHICLES:
Horse Drawn
Motor and Vehicle Parts
36
12
382
130
MISCELLANEOUS:
Brass and Bronze Products
Brooms and Brushes
Tin and Sheet Iron Products
Flags, Banners and Regalia
Fur Goods
Ice and Cream Products
Matresses and Spring Beds
Millinery and Lace Goods
Shipbuilding
Stone and Monument Work
Umbrellas and Canes
Straw Hats
Miscellaneous
19
18
61
6
15
42
15
9
17
54
9
6
148
406
257
1,693
50
31
263
402
46
2,081
520
162
402
1,415
2,228
45,096
2
3
6
7
8
9
10
11
12
FOUNDRY AND MACHINE SHOP PRODUCTS:
Bridge and Structural Iron
Electrical Equipment
Machinery
Railway Cars and Construction
Miscellaneous
GLASS AND PRODUCTS:
Bottles and Glassware
Mirrors and Stained Glass
PAPER AND PRINTING:
Boxes and Bags
Printing and Publishing
Printers' Supplies
Paper and Stationery
TEXTILES:
Awnings, Tents and Sails
Cotton and Burlap Bags
Carpets and Rugs
Cottons and Prints
Clothing-Men and Boys
Men's Furnishings
Hats and Caps-Except Straw
Ladies' Apparel
Miscellaneous
13
TOBACCO
14
TOOLS AND HARDWARE:
Builders' Hardware
Miscellaneous
15
16
Grand Total
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Federal Reserve Bank of St. Louis
55
2
68
5
2
27
39
7
33
10
59
31
6
See Page 3.
See Page 4.
See Page 10.
19
32
65
1,184 '
29
2
2
4
8
110
171
146
278
5
8
41
13
16
137
2,017
2,158
1,270
1,615
235,834
3,940,232
4,754,330
2.470,841
5,388,300
.07%
1.11%
1.35%
.69%
1.53%
150,307
2,415,084
1,165,296
1,251,050
753,920
85,527
1,525,148
3,589,034
1,219,791
4,634,380
See
See
See
See
See
Page
Page
Page
Page
Page
25.
26.
27.
28.
28.
66
500
30
40
191
262
1
16
59
637
75
21
26
170
17
7
1,208
4,897
225
157
1,935,930
8,763,817
434,288
232,695 • I
.55%
2.48%
.12%
.06%
981,810
5,208,463
283,489
76,928
954,120
3,555,354
150,799
155,767
See
See
See
See
Page
Page
Page
Page
29.
30.
31.
32.
7
72
2
72
2
320
208
834
5
5
167
50
20
19
3
33
1,467
397
33
379
60
13
372
327
2
128
63
93
203
44
3.856
14,991
9,788
339
3,450
812
203,500
1,621,769
63,000
5,890,000
30,091,441
14,259,068
480.232
7,415,884
576,235
.06%
.46%
.02%
1.67%
8.52%
4.04%
.14%
2.10%
.16%
137,363
622,634
20,000
372,700
1,796,695
1,135.273
103,250
1,334,859
240,577
66,137
999,135
43,000
5,517,300
28,294,746
13,123,795
376,982
6,081.025
335,658
See
See
See
See
See
See
See
See
See
Page
Page
Page
Page
Page
Page
Page
Page
Page
32.
33.
33.
33.
34.
35.
37.
38.
39.
263
208
54
4,267
10,585,048
2.99%
3,192,261
7,392,787
See Page 40.
96
57
18
27
5
188
138
304,500
567,632
.09%
.16%
79,500
68,543
225,000
499,089
See Page 41.
See Page 41.
66
24
35
26
782
571
325
330
60
22
2
5
510
181
651,200
479,162
.18%
.14%
584,750
242,587
66,450
236,575
See Page 42.
See Page 42.
65
60
585
25
14
234
37
51
153
66
119
134
244
5
14
80
14
20
7
10
2
14
73
31
64
597
579
6,410
120
47
1,186
804
438
2,747
913
895
1.970
2,759
872,800
776,055
24,858,425
141,525
240,000
2,433,200
2,877,000
426,127
6,530,931
1,896,422
2,274,500
4,991,238
64,065,208
.25%
.23%
7.03%
.04%
.07%
.69%
.81%
.12%
1.85%
.54%
.64%
1.41%
18.13%
284,110
215,500
3,426,678
51,250
167,500
2,138,510
922,600
112,166
409,431
1,133,136
130,800
391,313
896,586
588,690
560,555
21,431,747
90,275
72,500
294,690
1,954,400
313,961
6,121,500
763,286
2,143,700
4,599,925
63,168,622
See Page 43.
See Page 43.
See Page 44.
See Page 45.
See Page 45.
See Page 46.
See Page 46.
See Page 47.
See Page 48.
See Page 48.
See Page 49.
See Page 49.
See Page 50.
10,677
2,403
115,767
$353,319,086
100.00%
$73,980,084
$279,339,002
78
154
1.605
2
444
1,049
80
669
255
5
511
304
26
142
703
26,433
22,557
83
284
11
29
1,263
20
42
_ ____
9
71
212
253 ;
I
8.601
STATEMENT No. 2
VALUE AND DISPOSITION OF MERCHANDISE JOBBED
REFERENCE No.
BALTIMORE METROPOLITAN DISTRICT-YEAR 1913
NUMBER OF JOBBERS
CLASSIFICATION OF COMMODITY
In
Jobbing Conjunction
Exclusively With Other
Wares
VALUE AND DISPOSITION OF WARES
Total
Sales
Per Cent.
of
Grand Total
Sold
Locally
Shipments
Purchased
from
Baltimore
Manufacturers.
In
Per Cent.
REMARKS
1
AGRICULTURAL IMPLEMENTS
12
2
$7,486,188
3.13%
$384,510
$7,101,678
2
BREWING AND DISTILLING:
Malt Liquors
Spirituous Liquors
8
62
1
751,868
25,785,658
.31%
10.78%
625,104
10,328,931
126,764
15,456,727
1.16%
1.28%
.51%
.34%
2,240,357
2,460,192
232,513
526,102
526,152
609,926
977,699
275,265
2.18%
2.44%
9.50%
13
2,766,509
3,070,118
1,210,212
801,367
See Page 5.
14
7
2
CHEMICALS, OILS, ACIDS, ETC.:
Acids, Fertilizer, etc.
Paints and Varnishes
Soaps and Perfumery
Chemicals and Oil
4
3
4
6
3
2
7
2
2,611,486
395,114
680,408
4,546,322
1.09%
.17%
.28%
1.90%
321,814
272,148
418,289
2,255,831
2,289,672
122,966
262,119
2,290,491
28.16%
6.08%
17.06%
13.12%
See Page 7.
See Page 8.
See Page 10.
DRUGS AND PREPARATIONS
8
3
3,338,762
1.40%
1,272,082
2,066,680
9.48%
See Page 10.
FOOD PRODUCTS:
Bakery Products and Flour
Cereals, Teas and Coffee
Preserved and Canned Foods
Slaughtering and Meat Packing
Candy and Confectionery
Miscellaneous
10
10
44
7
12
9
2
11
2,781,412
15,382,824
15,883,269
9,432,608
2,727,226
1,870,304
1.16%
6.43%
6.64%
3.95%
1.14%
.78%
862,237
2,741,317
6,346,560
8,953,126
522,110
420,783
1,919,175
12,641,507
9,536,709
479,482
2,205,116
1,449,521
7.44%
1.49%
4.44%
4.08%
30.16%
8.23%
FOUNDRY AND MACHINE SHOP PRODUCTS:
Bridge and Building Construction
Electrical Equipment
Machinery
Miscellaneous
10
9
14
11
2
2
5
4
2,345,128
1,269,682
3,014,253
895,799
98%
.53%
1.26%
.37%
232,149
658,176
1,497,040
269,825
2,112,979
611,506
1,517,213
625,974
1.13%
2.11%
.56%
2
3
7
2
1,055,241
1,425,623
.44%
.60%
157,196
350,982
898,045
1,074,641
6
2
3
1
4
529,000
65,102
138,000
.22%
.03%
.06%
92,250
4,869
30,250
436,750
60,233
107,750
4.18%
.13%
LEATHER AND MANUFACTURES:
Boots and Shoes
Harness and Saddlery
Leather—Raw and Tanned
Miscellaneous
17
2
17
2
1
3
4.05%
.45%
1.63%
.09%
1,993,964
159,252
398,200
14,680
7,677,158
4.32%
3
9,671,122
1,068,750
3,908,686
225,892
3,510,486
211,212
LUMBER AND MANUFACTURES:
Baskets, Willow Ware, etc.
Furniture
Millwork
Miscellaneous
2
4
5
18
2
5
11
6
315,613
3,733,434
4,845,822
9,319,369
.13%
1.56%
2.03%
3.90%
85,201
622,311
2,627,386
7,104,000
230,412
3,111,123
2,218,436
2,215,369
PAPER AND PRINTING:
Boxes and Bags
Printers' Supplies
Paper and Stationery
7
3
14
2
3
1,392,500
359,000
3,997,269
.58%
.15%
1.67%
1,096,350
233,350
2,003,986
296,150
125,650
1,993,283
2
3
40
2
5
8
2
14
3
11
2
16
7
13
3
2
10
1,741,693
21,527,942
3,650,882
4,294,104
1,005,017
5,597,112
2,692,125
915,000
4,090,247
.73%
9.01%
1.53%
1.80%
.42%
2.34%
1.13%
.38%
1.71%
397,923
1,534,904
318,208
488,752
99,881
1,116,444
326,108
238,750
1,137,643
1,343,770
19,993,038
3,332,674
3,805,352
905,136
4,480,668
2,366,017
676,250
2,952,604
3
6
8
9
10
11
12
CEMENT, CLAY AND PRODUCTS:
Builders' Materials
Cement and Brick
Crockery and Pottery
Roofing Materials
GLASS AND PRODUCTS:
Bottles and Glassware
Mirrors, Plate and Window Glass
JEWELRY AND SILVERWARE:
Jewelry
Silverware
Miscellaneous
13 , TEXTILES:
Carpets and Rugs
Cottons and Prints
Clothing—Men and Boys
Gents' Furnishings
Hats and Caps—Except Straw
Hosiery, Knit Goods and Notions
Ladies' Apparel
Silk and Manufactures
Miscellaneous
14
2
4
4
Includes Seeds, see Page 3.
4.11%
See Page 3.
See Page 4.
Principally Flour.
Practically all Coffee and Tea.
Grocery Jobbers.
Includes Provisions.
See Page 16.
See Page 16.
6.16%
909,498
Bags and Trunks.
3.24%
See Page 26.
Principally Chairs, see Page 27.
Principally Lumber.
20.38%
.14%
See Page 30.
.15%
6.29%
6.47%
10.14%
Dry Goods Jobbers.
22.41%
14
TOBACCO
8
3
6,605,633
2.76%
2,252,141
4,353,492
11.73%
15
TOOLS AND HARDWARE:
Builders' Hardware
Miscellaneous
6
9
2
5
924,191
4,355,110
.39%
1.82%
350,333
928,265
573,858
3,426,845
7.00%
.32%
VEHICLES:
Horse Drawn
Wagon and Motor Parts
2
3
5
51,523
524,191
.02%
.22%
46,411
175,833
5,112
348,358
1.53%
5
8
5
3
2
1
3
1
6
9
7
3
11
436,182
359,166
1,623.867
375,000
1,680,190
810,209
9,151,811
3,090,000
3,031,719
405,000
764,208
625,878
7,662,720
.18%
.15%
.68%
16%
70%
.34%
3.83%
1.29%
1.27%
.17%
.32%
.26%
3.21%
196,421
118,946
403,246
210,000
111,040
325,861
1,202,750
1,185,000
370,517
40,000
137,250
292,046
2,693,673
239,761
240,220
1,220,621
165,000
1,569,150
484,348
7,949,061
1,905,000
2,661,202
365,000
626,958
333,832
4,969,047
1.16%
.84%
22.11%
$239,087,660
100.00%
$77,513,769
$161,573,891
4.10%
16
17
MISCELLANEOUS:
Brass and Bronze Products
Brooms and Brushes
Copper, Tin, and Sheet Iron Products
Dental and Surgical Goods
Furs and Skins
Mattresses, Brass and Spring Beds
Millinery and Lace Goods
Plumbers' Supplies
Rubber Goods
Umbrellas and Canes
Straw Hats
Wall Paper
Miscellaneous
Grand Total
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Federal Reserve Bank of St. Louis
9
8
5
4
13
9
4
5
18
554
4.10%
2.08%
7.75%
Includes Hides.
.05%
6.19%
.29%
MANUFACTURING AND JOBBING BUSINESS
AGRICULTURAL IMPLEMENTS AND SEEDS
AGRICULTURAL IMPLEMENTS
No local establishments are reported as engaged in the manufacture of
machinery or implements designed for use in agriculture. Collectively, there
are eight jobbers and branch houses of manufacturers dealing in agricultural
implements of every description, whose combined sales for 1913 totalled
$3,361,193.
In this class of wares Baltimore has for the past forty years been considered
an advantageous jobbing centre for the South. Very little competition is encountered in the territory served, although Richmond, Va., and Chattanooga,
Tenn., manufacture on a limited scale a special line of agricultural implements.
SEEDS
In grass and field seeds Baltimore is the acknowledged largest jobbing centre
on the Atlantic Seaboard. Garden and flower seeds are also extensively jobbed.
While the trend of the business is South, local dealers canvass the country
generally.
Competition in grass and field seeds is reported from Chicago, Toledo and
Cincinnati, and in garden and flower seeds from Philadelphia and New York.
Six jobbers in the trade show aggregate sales for 1913 of $4,124,995.
BREWING AND DISTILLING
MALT LIQUORS
The amount of lager beer produced in Baltimore is practically sufficient to
take care of the local consumption. Out-of-town brewers have, however, been
able to command 10 per cent. of the trade, which has been offset by home manu facturers' shipments to near-by points. The increase in local consumption has
been at the rate of 5 percent. per year,being relative to the increase in population.
Of the ingredients which enter largely into the manufacture of the product,
hops are procured from the Pacific Coast, New York State, and imported; malt
Principally from Chicago and Milwaukee; and rice from India. 25 percent. of
the corn grits used is purchased locally, the remainder being secured from Indianapolis, Ind., and vicinity.
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Articles used in the trade, such as kegs, barrels, copper and other tubing,
tanks and boilers, are purchased from local manufacturers; 20 per cent. of the
bottles used are procured from local establishments, the brewers claiming that
home manufacturers cannot successfully compete with the Middle West in the
production of beer bottles.
The amount of beer produced per capita in Baltimore is not as great as in
most other large cities, due to the fact that the territory adjacent to Baltimore is
not so densely populated.
SPIRITUOUS LIQUORS
Establishments embraced in this classification are engaged in distilling
whiskey, brandy and gin. The value of products shown in Statement No. 1 is
greatly affected by the Internal Revenue tax. This fact, coupled with diversified
methods peculiar to the industry employed in the disposition of the product, and
bonding with the resultant loss through evaporation make it impossible to compile absolutely accurate and reliable statistics. So far as would admit of verification, the figures noted are exclusive of the Internal Revenue tax.
Maryland manufactured approximately 4,750,000 gallons of whiskey in
1913, 85 per cent. of which was produced within the Baltimore Metropolitan
District. With tax, storage charges, and handling costs added, and after
making due allowance for evaporation, the value of this product four years hence
will approximate $8,350,000.
From this trade local coppersmiths secure practically all the work in their
line. Cooperage is purchased largely in Baltimore, although quantities are contracted for yearly with firms in Cincinnati, Ohio and Peoria, Ill. Malted grain
is shipped in from Wisconsin and Michigan.
Distilled and vinous liquors are jobbed on an extensive scale. According
to official United States Internal Revenue records, sixty-two firms were reported
as doing a wholesale liquor business in 1913, fifty-two of them being rectifiers.
The value of products shown as disposed of through wholesale dealers is inclusive
of the Internal Revenue tax and of one of the essentials entering primarily into
the rectifying, compounding and blending of whiskey.
Maryland, with Baltimore as the logical distributing point, enjoys an international reputation on the superior quality of her whiskies, a reputation
which the manufacturers and jobbers are exerting every effort to uphold.
CEMENT, CLAY AND PRODUCTS
BUILDERS MATERIALS
Of the numerous articles handled by builders' supply companies, very few
are made in Baltimore. The building supply business is divided up among a
small number of very large firms and a large number of smaller ones, under three
general classifications. First in importance is the line which embraces such
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INDUSTRIAL SURVEY OF BALTIMORE
5
articles as cement, plaster, brick, lining and sheathing paper, terra cotta and other
clay pipe and stone trimmings; second come those concerns which handle sash
and blinds, doors and door frames (See Lumber and Manufactures, Millwork);
and last, those which handle an assortment of builders' hardware and iron work
(See Tools and Hardware, Builders' Hardware).
In the first group there is one local concern which makes a very high grade
of ornamental terra cotta, supplying the bulk of the local demand and selling the
remainder of its product throughout the country generally. Lime used for both
building and fertilizer comes principally from Western Maryland. At the present time there is located in Baltimore one concern engaged in the manufacture
of lime which secures its raw material from an accumulation of matter used
years ago by the local gas company. This supply is about exhausted and the
company will shortly go out of business. A large percentage of the fireproof
building blocks comes from Mt. Savage, Md., and the remainder from New
Jersey. Plaster is shipped in from Staten Island, although purchases are reported
from Buffalo and Chester, Pa. Cement is secured principally from Lehigh
Valley, Pa., with a portion from Western Maryland. Mortar colors are made
locally and furnish the bulk of the consumption. Building papers are brought
here from York, Pa. Terra cotta pipe, fire clay pipe and flue linings are purchased in Akron, Ohio territory, metal lath from factories at Youngstown, Ohio,
and roofing of such kinds as asphalt, slag, rubber, and tarred comes from York,
Pa. Shingle stains and waterproof and weatherproof paints are secured largely
from Boston and near Buffalo.
CONCRETE—There is one concern making a patented concrete pile, another
making a tile of concrete,and a third manufactures concrete beams with steel reinforcement. One firm casts concrete front and side walls for buildings in steel forms
or molds. One establishment reports making statuary and urns of concrete.
Eleven firms are engaged in making concrete blocks for building purposes.
BRICK
building brick is almost essentially a local or neighborhood
The making of
industry, as the weight of the product and the close margin at which it is sold
make it virtually impossible for manufacturers to pay freight on it and successfully compete for business except within a very narrow radius of their yards.
With colored face brick and paving blocks this does not hold good, as sufficient
demand may be established for a particular make of either to justify expansion.
Almost every city in this vicinity produces nearly sufficient brick to supply the
local demand and Baltimore is no exception to this rule, 95 per cent. of the local
consumption of common building brick being taken care of by the yards in and
around the city. Only about 25 per cent. of the colored face brick used in Baltimore is manufactured here, consisting entirely of red brick, which is among
the cheapest colored front brick made. The making of face brick in other colors
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INDUSTRIAL SURVEY OF BALTIMORE
or artificially colored has been attempted here on numerous occasions by different
concerns, only to be abandoned,as the profits derived did not justify its continuance, although an adequate supply of suitable clay is available.
Of sidewalk brick, the use of which is steadily declining, Baltimore yards
make all that is consumed in the city. An average of 25 per cent. of the street
paving brick used by the local municipality and by private parties is secured
from one manufacturer of this class of brick.
Ordinarily the supply of labor, which is chiefly unskilled, is ample, but recently the large amount of paving being done by the city has not only affected
the wage scale, but also materially curtailed the supply.
CROCKERY AND POTTERY
The manufacture of crockery and pottery, while never a really important
industry in Baltimore, has dwindled to almost nothing. The business reached
its height about 1888, when there were four concerns making whiteware, an
equal number stoneware, and two making roofing tile. Now there is but one
of each engaged in the first two pursuits mentioned and none in the last named
industry. There is no particular reason assigned for the dwindling of the
industry, except perhaps concentration of the business in certain pottery centres,
such as Trenton, N. J. It is claimed that there are ample opportunities here for
the establishment of crockery and pottery manufactories, if experienced men with
adequate capital would enter the field. Suitable clay in large quantities is
available, labor is obtainable at a reasonable figure, and distribution facilities
are all that could be desired.
Of the porcelain ware made here at this time about half is sold in Baltimore,
the remainder principally in the South. Practically all flower pots and clay
pipes manufactured are sold locally.
PAVING AND ROOFING MATERIALS
There are five concerns engaged in the making and laying of asphalt paving.
The local consumption takes about 85 per cent. of the production, and practically
all of the remaining 15 per cent. is used on Maryland State roads. Two of the
manufacturers are in reality branches of outside concerns, although they maintain plants here temporarily for the production of asphalt paving materials,
and three are permanently located.
The materials other than asphalt used in this class of paving are coarsely
crushed stone, secured locally; trap rock and granite crushed to varying degrees
of fineness, obtained from Maryland quarries; sand and gravel, secured locally;
and the oil used for fluxing, furnished by local concerns. 60 per cent, of the
crude asphalt is purchased locally, the remainder being shipped in from California, Texas, Bermuda and Mexico.
One concern makes asphalt blocks, used largely in street paving and repair
work, and the others turn out their product in what is known as sheet form.
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The local patronage of the companies comes almost entirely from the municipality, and as the paving of streets in Baltimore is at a high level, chiefly asphalt
being used for the purpose, the business is in a thriving condition and bids
fair to remain so for at least five years to come.
Of other varieties of paving material, one concern turns out a considerable
amount of granite or Belgian block, the local consumption being fairly large.
ROOFING-At the present time there is no concern in Baltimore manufacturing slag roofing, although the product in its entirety was manufactured by
one firm for a number of years, but was abandoned when the coal tar by-product
of a local concern was no longer available.
There are twelve large concerns in Baltimore engaged in coating and applying tar, slag, and asphalt roofing and applying asbestos roofing, 70 per cent.
of their sales being in Baltimore and the remaining 30 per cent. within a very
narrow radius of the city. The trade has shown an increase of 200 per cent. in
the past ten years, the greatest gain being noted since 1909. The business
done by the twelve firms mentioned in roofing materials last year amounted
to $511,288.
CHEMICALS, OILS, ACIDS, ETC.
ACIDS, FERTILIZERS, ETC.
There are four concerns in Baltimore engaged in the manufacture of sulphuric acid, which is used largely by the fertilizer factories in the treatment of
phosphate rock. There is a large demand locally for sulphate. of ammonia from
the fertilizer factories, but at present there is only one concern manufacturing
this product and that on a very limited scale.
Baltimore is the largest fertilizer manufacturing centre in the world. This
industry is growing in importance from year to year, due largely to the educational campaign which is being waged by the fertilizer companies in conjunction
with the Department of Agriculture and various state agricultural colleges.
This city enjoys certain advantages from a fertilizer manufacturing standpoint
which, in the opinion of some of the best informed men in the business, make it
impregnable as a centre in this particular field. These advantages may be
summarized as follows: The enormous prestige which it has long enjoyed;
cheap coal; attractive rail and water transportation facilities, unequalled for
distribution north, south, east and west; favorable labor conditions; and low
freight rates on the most important ingredients by water from Chili and Cuba.
The possibilities for expansion are almost limitless, as farmers are fast beginning
to realize that through the proper use of fertilizer one acre of land can be made to
produce as much as two acres under natural conditions.
The trend of increase in consumption is toward the South, because of the
character of agricultural products raised there and the ever-increasing acreage
devoted to intensive farming and truck raising. About 60 per cent. of the prod-
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INDUSTRIAL SURVEY OF BALTIMORE
uct is finding a market in that section, although the demand from the West
is increasing rapidly and is second in importance in distribution.
All the potash used in the manufacture of fertilizer comes from Germany,
nitrate of soda from the guano beds of Chili, phosphate rock principally from
Florida. Ammoniates are secured from nearly all sections of the United States
to the extent of 75 per cent., the remaining 25 per cent. being imported from Scotland. Local manufacturers are required to secure certain kinds of tankage
from other cities which, as is done elsewhere, could as well be derived from the
garbage here. This tankage is a prime requisite in the manufacture of special
fertilizers.
Practically all gunny sacks or bags, which of late years have almost entirely
supplanted barrels as containers of fertilizer products, are made by local firms.
Jobbers connected with the fertilizer business derive their principal income
from handling the various raw materials which go to make up the finished product, rather than from buying and selling fertilizer itself. The demand for
fertilizer has increased throughout the country at the annual rate of 10 per cent.
for the past five years.
PAINTS, VARNISHES AND DYES
Due to overlapping in the products of establishments engaged in the manufacture of paints and varnishes, these materials have been included in one classification, which also embraces an establishment manufacturing dyes.
Ready mixed paints are manufactured on a fairly large scale locally, but
have not enjoyed a particularly broad market, as our manufacturers have done
little to advertise widely their brands. The trend of the trade is South, where
Baltimore-made paints have long possessed an excellent reputation. Labor is
plentiful and can be had at a reasonable wage.
There are no exclusive jobbers of paints in this city, although the wholesale
drug houses and hardware dealers in some instances handle considerable quantities of paint on a jobbing basis, the greatest part of which comes from out-oftown manufacturers and is of a cheaper grade than that manufactured locally.
Eight manufacturers of other cities have established agencies through local
retail paint dealers and the aggregate volume of their business has been ascertained to amount to $141,550.
There are three jobbers representing outside manufacturers of lead, whose
sales for 1913 amounted to 1,600 tons, valued at $225,000.
About 80 per cent. of the ready mixed paint handled by local retailers is purchased from the manufacturers, but contractors and other large users mix their
own paints, purchasing their materials chiefly from the local representatives of
outside manufacturers. The character of the business is such that it does not
lend itself to being handled on a jobbing or commission basis, and manufacturers
confine their efforts largely to selling the retail trade. This condition exists all over
the country, with the possible exception of several nationally advertised brands.
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9
SOAPS AND PERFUMERY
Fifteen years ago Baltimore ranked fourth among the cities of the country
in the production of soap, at which time it practically monopolized the business
in the Southern states, the aggregate value of the product approximating
$4,000,000 per annum, with from thirteen to fifteen concerns engaged in its
manufacture, but this business is no longer an item of importance among Baltimore's enterprises. A number of factors have contributed to the curtailment,
among which the most important are the following: The extraction of cotton
seed oil and its utilization in the manufacture of soap,stimulating the establishment of factories throughout the South; utilization of by-products by large western packing houses in the manufacture of soap; and the stupendous advertising
campaigns inaugurated by many of the large soap manufacturers. However, it
is the concensus of opinion of practical soap men that the business could again
be enormously developed here, for this city possesses as many advantages
favorable to the industry as Buffalo, Cincinnati or New York, and furthermore,
the distribution facilities are superior to those enjoyed by any inland soap
manufacturing centre.
Forty per cent. of the soap produced in Baltimore is sold to jobbers, as the
character of the business is such as to encourage the handling of the product in this
manner.
A considerable portion of the raw material entering into the composition of
soap is the by-product, such as fats, greases and oils, of slaughtering and meat
packing establishments, and Baltimore has quite a number of such establishments which at the present time are shipping most of their by-products out
of the city, to be made into soap, ointments, and the like. In addition to the
materials named above,cocoanut oil is also a very important ingredient, especially
of white soap, and this oil can be brought from the tropics to this city cheaper than
to almost any other point. Other materials entering into the composition of
soap are caustic soda and soda ash, neither of which is manufactured here,
These raw materials come from Syracuse, N. Y., Wyandotte, Mich., and Saltville,
Va., and also from England.
New York is the acknowledged largest soap grease market in the country,
and to that city Chicago, St. Louis, and Kansas City, as well as other packing
and slaughtering centres, send to a large extent their surplus by-products. Most
of the packers are in the soap business, though none of them can as yet find a
market for a sufficient quantity of soap to enable them to utilize all of their
by-products in its manufacture.
PERFUMERY AND TOILET ARTICLES—The manufacture of perfumery and
toilet articles has never been developed locally on an extensive scale. There
are at present three manufacturers of perfumery and talcum powder, and two
establishments specializing in toilet articles. There are a number of other concerns manufacturing toilet articles as a side line, but since their product of chief
value as reported is - Drugs," they are accordingly so classified.
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MISCELLANEOUS CHEMICALS AND OIL
There are two concerns in Baltimore producing heavy chemicals, which are
used largely in making dyes and by the textile industries generally.
Inherent difficulties encountered in securing thoroughly accurate and
reliable information on the oil industry have made it obligatory to include as
manufacturers, establishments which purchase partly refined petroleum products
and compound them with vegetable, animal, and mineral oils or other substances,
in order to produce a special composition, or lubricating product. There is only
one establishment in the Baltimore Industrial District engaged primarily in the
refining of crude petroleum by distillation. The number of establishments reported as manufacturing lubricating oil is twelve, several of which purchase
their materials of jobbers.
There is one concern reporting as engaged in the manufacture of shoe
blacking.
Refined oil, gasoline and petroleum products are being extensively jobbed,
independent concerns maintaining tank wagon delivery service to take care of
six
the local demand.
DRUGS AND PREPARATIONS
Baltimore ranks fourth among the cities of the country in the production of
drugs, and standard and proprietary medicinal preparations. There has been
some little expansion in the business during the past four years, but the increase
would probably have been considerably greater had not the passage of the Pure
Food and Drugs Act required the printing of ingredients on the labels of all
proprietary preparations, which has apparently somewhat curtailed their sale.
Forty per cent. of the local consumption of these products is supplied by the
manufacturers, which is equivalent to 15 per cent. of their total output, one-third
going to jobbers and two-thirds to retailers. Approximately 40 per cent. of the
output is sold in the Southern states, and the remainder is evenly distributed
throughout the country.
Fifty per cent.of the containers used, such as bottles, pill and other boxes, are
procured of home manufacturers. Of raw materials, about 10 per cent. are
purchased of local manufacturers, including phosphate of soda, sal soda, and
sundry acids.
In the jobbing of drugs and preparations, Baltimore also ranks high among
the cities of the United States, having eight concerns engaged in this business.
The jobbing of drugs has doubled in the past twelve years and has shown an
average annual increase of 8 per cent. in the last four years. The distribution
has been about as follows: 25 per cent. local, 50 per cent. in the South, and 25
per cent. scattered over adjoining states.
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FOOD PRODUCTS
BAKERY PRODUCTS
The production of baker's bread, cake, and pies has increased 60 per cent.
during the past ten years, due partially to increase of population but mainly to
the fact that the factory-made product is gradually supplanting home-made
articles.
Seventy per cent. of the flour used, or practically all of that required in the
making of bread, comes from the West, and the remaining 30 per cent. utilized
in the manufacture of cakes, pastry and pies is purchased from local millers.
About five years ago there was inaugurated the shipment of bread, pies,
and cake to points outside of Baltimore and now 5 per cent. of the total product
is sold within a radius of 100 miles of this city, which distance appears to be the
mileage limit within which the business can be successfully carried on. The
labor situation is satisfactory and there are no serious handicaps.
The manufacture of factory-made crackers and biscuits, both plain and
fancy, has shown an increase of 35 per cent. during the past four years. Nearly
51 per cent. of the local consumption of these foodstuffs is supplied by Baltimore
manufacturers, which is equivalent to 34 per cent. of their total output. About
85 per cent. of the flour used in the making of these products is secured locally
and from near-by points, the remainder being procured from the West. None of
the local product is jobbed here, but the bulk of that which is shipped goes to
jobbers. The trend of the outside demand is to the South, but a.fair amount of
the output is sold all over the country east of the Mississippi River. Of lard
and compounds used for shortening by the biscuit, cake and pie manufacturers,
20 per cent. is secured from local manufacturers and 80 per cent, from western
packing houses. Flavoring extracts for both branches of the industry are
largely purchased in this city from manufacturers, but dried fruits, with the
exception of apples which are secured principally in New York State, are shipped
in from California.
FLOUR
The local milling of wheat flour has fallen off about 50 per cent. since 1880,
when the business reached its zenith, but has about held its own at the reduced
output since 1899. This slump in production is not peculiar to Baltimore, but
is a condition which exists at all centres in the country with the exception of the
great flour producing sections of the Middle West, of which Minneapolis is the
headquarters. With the enormous development of wheat raising in the West
came the establishment of many large mills near the source of supply of the raw
material, and the manufacture of flour decreased correspondingly in all other
sections.
Of the flour made here 25 per cent. is sold locally, 40 per cent. is exported,
and 35 per cent. finds its principal market in the South. As to source
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of supply for raw materials, 85 per cent. is winter wheat from Maryland and
adjoining states and 15 per cent. spring wheat from the West. Very little
flour is sold to jobbers here or elsewhere, the bulk of it going direct to
large consumers and to retailers. The western flour is nationally advertised to
an extent which the local manufacturers would not be warranted even in approximating. The former product is made nearer to the geographical centre
of the country, and therefore logically finds a nation-wide market.
CEREALS AND SPICES
There are three concerns engaged in the grinding of spices from raw materials
imported from India, East Indies, China, Japan, other sections of the Far East,
and Africa. Everything in the spice line is therefore made here.
About 20 per cent. of the local consumption is supplied by local concerns,
remainder being shipped in principally from New York. The Baltimore
the
sales are equivalent to about 10 per cent. of the local output. Local sales are
chiefly to jobbers, with the exception of those of one establishment which caters
exclusively to the retail trade. The bulk of the patronage of the local spice
mills comes from the South and Southwest, but large quantities go to New
England, New York and Philadelphia. Two of the mills also manufacture a
complete line of fruit and other extracts, the latter from imported essential
oils. One concern reports as being engaged chiefly in the manufacture of vanilla
extract in bulk.
Seven firms import tea from all tea producing centres, blend it and sell it
under their own brands in packages and in bulk.
CEREALS—Practically the only breakfast food made locally is hominy, but
this is manufactured on a considerable scale. The raw product is corn, which is
shipped in from the Middle West. Hominy manufacturers also produce corn grits,
corn meal, and some little flour. The hominy mills supply 75 per cent. of the local
consumption of grits, and 50 per cent, of the home consumption of the other
products which they make, these amounts being equivalent to 15 per cent. of the
total production of the four items mentioned above. The remainder is shipped
South and Southeast, a small quantity being exported. These mills also make
horse and cattle feed, in the composition of which oats as well as corn largely
enters. Altogether there are eight concerns making this feed, securing about
50 per cent.of the local patronage,exclusive of that enjoyed by a number of small
feed stores, which mix their own horse and cattle feed.
PRESERVED AND CANNED FOODS
No market packs a more general assortment of canned fruits and vegetables
than Baltimore. It is known in the trade as the Mother of the Canned Goods
Industry." This city was the first to use machinery in connection with the
business and was the initial point at which commercial canning of food products
was successfully developed.
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The packing of oysters was begun here in 1820, and has experienced an
almost continuous growth in quantity of output since that time. The next
venture of the local packers was the canning of tomatoes, followed cicsely by the
same treatment of practically all other vegetables and fruits. This was soon
after the beginning of the Civil War, which was responsible for the initial demand
for canned goods in this country. Baltimore canned goods are exported to all
parts of the civilized world. Considering the vast volume of the output, they
are not extensively jobbed here.
Tomatoes are more extensively packed here than any other one item, and
last year the packers of this city turned out about two-fifths of the tomatoes
canned in the country. Oysters, including raw and cove, come next in importance. All kinds of berries are packed here in large quantities, with strawberries
leading the list, and so are all other fruits and vegetables grown in this climate,
with the addition of pineapples. Practically all the pineapples packed in this
country were put up in Baltimore until about ten years ago, at which time the
industry was introduced in the native islands, where by far the largest part of
the canning for consumption in this country is now done. Baltimore has also
lost out as the centre of the pea-canning industry, though some of the finest
canned peas in the country are still put up here. From occupying the first
place in the pea-packing business eight years ago, Baltimore has dropped to
sixth in rank.
The growth locally of the packing business during recent years has been
enormous, the value of the output having nearly doubled in the past four years,
while there has been a proportionate increase in the number of employees during
the same period.
The putting up of jellies and preserved fruits has nearly kept pace with the
general canning business, some packers conducting it as a side line and others
making it a specialty. This business received a great impetus locally with the
passage of the Pure Food and Drugs Act in 1906, as the Baltimore packers had
never attempted competition with cheap, adulterated articles.
The local Canned Goods Exchange is an unusually strong trade organization
and the packers work together with a more unselfish spirit than is found in many
other trades.
SLAUGHTERING AND MEAT PACKING
Under this heading are given statistics of wholesale slaughtering and meatpacking establishments, public abattoirs, butchering establishments and those
making a specialty of manufacturing sausage.
Slaughtering is fast becoming the leading industry of Baltimore. In
addition to a number of privately owned plants, there are at the present time
four beef and seven pork slaughtering houses under Government supervision.
Aside from the regularly established packing houses, thirty-eight butchers kill
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their cattle, sheep and hogs through public abattoirs or in their own slaughtering
houses.
Although this industry is showing a steady and healthy development, it
is laboring under serious handicaps. Foremost among these is the inferiority
of its advantages compared with those enjoyed by western packers. Those concerns have such advantages as,first, proximity to the source of supply; second,the
utilization of their offals for manufacturing a number of by-products such as
tallow, oleo oil, stearin, glue, gelatine, soap, and fertilizer materials; and third,
the addition of private refrigerator car service, all of which tend to offset in a
measure the difference in freight of cattle on the hoof and the dressed product,
and permit them to enter eastern markets and practically monopolize the business. Another handicap to the extensive development of this industry in Baltimore is caused by certain local restrictions as to the sites for plants. New York
and Philadelphia are making decided concessions in this respect, in that they
permit the erection of plants within the city limits, proper control being exercised in respect to sanitation. It is stated authoritatively that if this industry
is given the same privileges extended other pursuits in this city, it will show even
larger gains within the next decade.
There are seven branches of packing establishments in Baltimore and their
sales for 1913 aggregated $9,432,608, this amount being equivalent to slightly
more than half of the local business.
An educational campaign waged among the local butchers,and their banding
together in an organization for the sale of their offals, have had a tendency to retard
the inroads made by outside packers, so that the local establishments are now
practically holding their own with conditions favorable for securing a larger share
of the business offering.
CANDY AND CONFECTIONERY
Baltimore ranks fifth among the cities of the country in the quantity and
value of the candy manufactured. This business is not showing any particular
growth in production of the cheaper grades,but the average quality has improved
within the past four years, and the price obtained for the output has therefore
increased during that period.
There are fifty-six concerns engaged in the business, twenty-eight of which
are of considerable size. Of the remaining number, six are jobbers who make a
little of the hard candy which they sell, and twenty-two are retailers who usually
manufacture on their premises a portion of their wares.
About 12 per cent, of the candy made here is sold locally to both jobbers and
retailers, the remaining 88 per cent. being distributed as follows: Southern
states, 25 per cent.; Middle West, 18 per cent.; New England and other states to
the North, 15 per cent.; Northwest, 15 per cent.; Far West, 10 per cent.; export
and scattered, 5 per cent. The retail trade is extensively catered to in Balti-
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more only, 85 per cent. of the wares shipped being sold to jobbers. About
75 per cent. of the candy made here may be termed high grade, 15 per cent.
is medium, and 10 per cent. low grade.
Of the ingredients which enter into the manufacture of candy, local concerns
purchase all of their sugar from local brokers, cocoa from New York and Boston
brokers, lemon and orange essential oils from abroad, other fruit flavors from
New York jobbers, and corn syrup mostly from the Middle West. The candy
manufacturers would be glad to purchase their fruit flavors locally if some one
would manufacture and furnish the grade and quality desired.
Cardboard boxes, both plain and fancy, are purchased of local manufacturers
to the extent of 95 per cent., and practically all wooden shipping cases are made
in this city. Local printers and lithographers furnish about 50 per cent, of the
plain and fancy wraps used in the trade, New York and Boston supplying
the remainder.
Labor conditions are far from satisfactory. It is impossible,except in very
dull seasons, to secure an adequate supply of experienced help.
MISCELLANEOUS
20 per cent, of the local consumption is taken
manufacturers, which is equivalent to 8 per cent, of the output
care of by home
of the four concerns engaged in the business. The remainder finds a market in
the South. Of the amount sold locally 75 per cent. goes to jobbers and 25 per
cent. to retailers.
Of the ingredients required, the starch, bicarbonate of soda, acids and
chemicals come from the Middle West. The tin plate used in making the tops
and bottoms of cardboard containers comes from Pittsburgh and the labels from
Baltimore.
No gelatine is made here, but one concern makes a dessert powder with
fruit flavors, of which gelatine is the principal ingredient, and also an ice cream
powder of a similar nature. There is one importer of ground cassava root,
procured from South America, and from this root tapioca is made. Six local
concerns put up tapioca in packages under their respective brands. 80 per cent.
of the local production is sold through jobbers and the remainder to retailers.
Only 5 per cent. of the local production is sold in Baltimore,the remainder going
to adjacent states and to the South.
One concern is reported as engaged in clarifying and packing olive oil, three
as making macaroni, and three as manufacturing supplies used in the baking
industry.
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FOUNDRY AND MACHINE-SHOP PRODUCTS
BRIDGE AND STRUCTURAL IRON
With the exception of the manufacture on a limited scale of cast iron bases,
columns, and scroll work, Baltimore makes nothing in structural iron and steel,
from the raw material to the finished product. Structural iron and steel, however, is fabricated and put up by ten concerns. The beams, columns, channels,
angle iron, tees, bars, scroll work and all other structural materials are purchased
in the rough from manufacturers, principally in the Pittsburgh district, and are
cut into lengths, riveted, shaped, and painted by local firms. These establishments furnish and do practically all of the erecting on about 90 per cent. of the
local consumption of structural iron and steel, so far as the construction of
buildings is concerned, but they supply nothing for bridge work except steel
cores for concrete construction. The remaining 10 per cent, of structural iron
and steel already fabricated is shipped in from various points.
The local business of these concerns is equivalent to about 40 per cent, of
their total output, the remaining amount finding a market principally in the
Southern states. Two of the finishing and erecting shops also job unfinished
materials, and ten additional concerns are engaged exclusively in jobbing rough
material, securing a market for 90 per cent. of their turn-over from the Southern
states and 10 per cent. from local fabricators.
One of Pittsburgh's large steel and iron establishments maintains a branch
in Baltimore where they fabricate structural material, exporting nearly all of
the finished product.
ELECTRICAL EQUIPMENT
Local manufacturing of electrical equipment, excepting telephone and
telegraph instruments, is confined chiefly to the assembling of finished parts
and the construction of special apparatus to order. Five concerns are engaged
in the industry, two manufacturing telephone and telegraph instruments and
messenger coil boxes, one oil fuse boxes, and two medical and storage batteries.
The principal complaint of the manufacturers is that they cannot get many
of the small articles which they need, such as screws, rivets and other hardware
in Baltimore, local dealers carrying only staple articles whereas there is a big
demand for specialties.
MACHINERY
The gross income of the local machine shops is derived as follows: 50 per
cent. from the construction of standard or patented machines of limited variety,
made principally for account of the owners of the patents; 25 per cent. from
building special machinery on specifications; and the remainder from repair work.
In the number and value of patented and standard machines produced, used
in the fruit, vegetable, and oyster-packing business, Baltimore leads other cities.
In the construction of machinery for making tin cans Baltimore also ranks very
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high. Its canning machinery has a world-wide reputation, for which the market
is largely out of the city, due to new packing establishments springing up throughout the country.
Among the specific machines and articles which are built here and carried
in stock by the machine shops are the following: very high grade planers; bolt
cutting and drilling and boring machines; street lighting and other iron posts;
machinery for joining together tin for roofing purposes; machinery for filling
and corking bottles; devices for making ice cream cones; grain and cereal dryers;
some special types of marine boilers and engines, but no other steam boilers or
engines; gasoline engines; tobacco granulators and cutters; passenger and freight
elevators; grain presses used by brewers; chain elevators or conveyors; heating
boilers for heating systems; grinders and mixers for fertilizer plants; cookers,
pressers, and dryers for fish fertilizer manufacturers; rotary blowers; nautical
instruments;sanitary and ordinary pumps;broom-making machinery; gasometers;
and sugar machinery.
Of the equipment and supplies used in machine shops, those engaged in the
business are required to purchase, chiefly from Baltimore agencies of out-of-town
concerns, lathes; medium grade planers; shapers; drill presses; power punches
and shears; emory grinders; milling machines; perforators; key seaters; slotters;
pipe cutting, threading and sawing machines; bending and straightening rolls;
riveting machines; and pneumatic hammers and drills, as well as all hand tools.
There is room locally for the establishment of a steel plate mill, since the
consumption is very large, principally in the making of boilers, stacks, tanks,
etc., the last two articles in particular being made on an extensive scale. Most of
the concerns engaged in the manufacture of metal cornice and roofing are prepared to build smoke stacks, sheet iron tanks, and in fact anything where sheet
iron or steel is involved. There is in process of formation an organization which
is expected to include practically all the sheet steel and galvanized iron concerns
in this city.
The machine-shop business is in a healthy condition, but it does not show a
particularly strong growing tendency. The labor situation is satisfactory at
this time, a full supply of fairly competent mechanics being available.
RAILWAY CARS AND CONSTRUCTION
This classification covers shops making running or classified repairs to
locomotives, railway and street cars, and those engaged in the manufacture of
new equipment or parts thereof. The building of freight cars was discontinued
about four years ago, and this industry in the main consists in the assembling
of finished parts shipped in from the Pittsburgh district. There is one concern
engaged in the manufacture of car wheels.
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MISCELLANEOUS
STOVES—There are seven concerns manufacturing coal ranges,other domestic
coal consuming stoves, and hot air furnaces. Three of them also make gas ranges
and one concern manufactures gas ranges exclusively. Two of the seven companies cater to hotel trade particularly, building extra large and heavy combined
gas and coal ranges, and the equipment used in hotel and restaurant kitchens.
About 95 per cent. of the local consumption of coal ranges, other than coal stoves
and hot air furnaces, is supplied by the Baltimore manufacturers,which is equal
to 25 per cent. of their combined output; 65 per cent. is disposed of throughout
the South and 10 per cent. shipped to widely scattered points. Were it not for
the fact that there is a limited demand for very small and cheap coal ranges
which are not made here, local manufacturers would supply the entire demand.
Practically the whole local consumption of gas ranges is taken care of by Baltimore manufacturers.
All of the stove manufacturers maintain foundries, in which are cast iron
parts used in the making of the finished product. Sheet steel, of which there is
a large amount used, is practically all purchased in the Pittsburgh district, and
bolts, nuts, screws and rivets come from Portchester, N. Y. and New England
points. Stamped steel parts and tubing come largely from the Middle West,
mica comes from North Carolina, and fire brick from Maryland. The foundries
attached to the stove works are also utilized in making a general line of small
castings for all purposes. Only 5 per cent. of the output is sold to jobbers, 95
per cent. going mainly to retailers. Four of the manufacturers maintain retail
establishments. One local stove foundry makes a specialty of casting automobile
parts,and another is equipped to make the heaviest character of castings, running
up to thirty tons in weight.
The making of coal stoves and ranges is on the decrease, but the output of
ranges is steadily becoming larger. No steam or hot water furnaces are made
gas
here.
GENERAL FOUNDRY WORK—There are fourteen iron foundries in Baltimore, including those connected with the stove plants. All the foundries
make cast iron castings, but only one makes malleable iron and two steel
castings also. About 75 per cent. of the local consumption of cast iron
castings is furnished by Baltimore foundries, 50 per cent. of the malleable and 25 per cent, of the steel. The remaining supply comes from
Pennsylvania, within a 100 mile radius of Baltimore, where labor is cheaper and
working hours longer. It takes about 60 per cent. of the local production to
supply 75 per cent. of the demand in this city for cast iron castings, and the
remainder is shipped to near-by points in Maryland, District of Columbia, and
southern Pennsylvania. The making of foundry castings is of necessity a
neighborhood industry to a considerable extent, as the weight of the product and
the narrow margin of profit absolutely limit competition to points where the
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freight rate is not more than twelve cents. Although Baltimore foundries are getting a large share of strictly local business, they feel they should secure more
near-by patronage. More heavy machinery should also be made here. The
present condition is attributed to the timidity of local capital to invest in a
business which, while perfectly safe, does not promise especially large profits.
After filling the local demand there remain about 50 per cent. of malleable
and 75 per cent. of steel castings, which find a market principally in the North
and Northeast, very little going South. Local founders do not carry any castings
in stock, their entire output, excepting the stove foundries, consisting of strictly
made-to-order wares for machine shops, ship yards, and other plants. Shipbuilders buy all of their castings here. There are two large engineering concerns
which maintain their own foundries, but the remainder of these concerns,as well
as most small shops, use Baltimore castings.
The business has shown a contracting and dragging tendency since the
panic of 1907, with the exception of two good intervening years. The labor
situation at this time is favorable, with an abundant supply of skilled workmen
who can be had at a reasonable wage, but it is very difficult to secure sufficient
trained help when the business is at all brisk.
There are several concerns manufacturing enameled iron signs and kindred
articles, such as railroad semiphors, parts of gas ranges, and reflectors for various
uses. About 95 per cent. of their product is sold out of town. Two large firms
make a general line of sheet steel and iron stamped ware, mainly articles for domestic use.
There is a general line of plumbers' supplies made in Baltimore, including a
rather cheap grade of enamel ware bath tubs, lavatories, sinks and toilet bowls.
Soil pipe and fittings and water closet tanks and seats are manufactured in
medium and high grades, but the stationary wash tubs produced are mainly of
a poor quality. Soil pipe and fittings are made on a large scale and supply 75
per cent. of the local demand.
In the plumbers' supply trade it is believed that there is a good opportunity
to establish locally a stationary wash tub plant, making tubs of cement in the
better grades. There is said to be a very large demand for this product throughout the South and the nearest point at which these tubs are now manufactured
to any extent is Brooklyn, N. Y. The bulky nature and weight of the product
make the freight rate a considerable factor from that source to southern points.
Plumbers' supplies, such as earthenware closet bowls and china lavatories,
are not made here, the bulk of the supply coming from Trenton, N. J.
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GLASS AND PRODUCTS
BOTTLES AND GLASSWARE
Baltimore leads the cities of the country in the production of bottles
used as perfumery and toilet water containers, and takes a high rank in the
manufacture of the general line of druggists' bottles, and also those used for
whiskey and other liquors.
About 25 per cent. of the local consumption of the kind of glassware manufactured here is furnished by the local producers. The reason advanced for a
larger percentage not being sold at home is that the demand is principally for a
cheaper grade of bottles than is made here. 25 per cent, of the local consumption
is equivalent to about 30 per cent. of the production. The sales to either local
or out-of-town jobbers are insignificant. Most of the bottles made here are of the
kind known as "private mould" lettered ware, that is, the druggists and others
ordering them have their names blown in the glass. This business has increased
about 50 per cent. in seven years and is in a prosperous condition. The outside
demand is evenly distributed over the country.
About all the skilled labor needed is obtainable at reasonable wages
MIRRORS AND STAINED GLASS
There are no domestic articles made of glass produced here, nor is there
any plate or window glass manufactured in Baltimore. Four concerns are engaged in the manufacture of mirrors, plate glass for which is obtained from the
Pittsburgh district and imported. Until the recent tariff law went into effect,
materially reducing the duty on plate glass, the entire supply was purchased in
this country.
One of the manufacturers utilizes the entire product of his factory in office,
bar-room, and other fixtures, and another does work only to order. The
manufacturing of mirrors consists of beveling and silvering plate glass and cutting
it into required shapes and sizes. About 75 per cent. of the local consumption
is supplied by the manufacturers, which takes one-third of their output, the remaining two-thirds finding a market mainly in Maryland and Pennsylvania. The
additional supply required to take care of the local demand comes largely from
New York and Williamsport, Pa.
The product is sold almost entirely to furniture and mantel manufacturers,
and to those who make a specialty of framing mirrors and selling them to retailers.
Of raw materials other than glass, nitrate of silver—which has altogether
superseded quick silver as the coating—comes from Pittsburgh and New York,
and carborundum, used in grinding, comes exclusively from Niagara Falls.
Two concerns are engaged in manufacturing stained and ornamental glass.
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JEWELRY AND SILVERWARE
JEWELRY
Jewelry made of gold, silver, platinum, and other precious metals, constitutes the principal product reported for establishments included under this
classification. Inasmuch as some of the concerns do work in whole or in part on
materials furnished by others, there is necessarily some duplication in the value
of products reported.
This industry has never been developed on an extensive scale and very few
of the local concerns are strictly speaking manufacturers to the trade," confining themselves principally to special order and repair work. Baltimore
manufacturers cannot successfully compete with New York and Providence, as
their wares cannot be produced as cheaply. In every instance where comparison
is possible, the product of the New England manufacturer excels, due to the
fact that New York is the recognized jewelry centre of the United States and
controls the labor situation so far as skilled workers, designers, lapidaries, and
stonecutters are concerned.
Most of the jewelry disposed of through local jobbing houses is of the cheap
variety, and there are very few who specialize in this business. There are also
a number of wholesale jewelers to the trade carrying limited stocks, but who
confine their efforts principally to soliciting orders from samples. These have
not been considered in the compilations on this industry.
It is stated that the reason why Baltimore manufacturers do not secure
more of the local business is that they do not properly solicit the trade. Their
complete lines are seldom ever shown to retail dealers in this city and the merchant is therefore left in ignorance as to what is really produced here. On
account of this condition,no retail dealer in Baltimore really knows what is made
by the shops at his door.
SILVERWARE
There is more sterling silver hollowware made here than at any point south
of New York, but the greater portion of it is sold by the manufacturer at retail,
three establishments maintaining retail departments in which they also sell
other goods than their own manufacture. This retail feature precludes the
possibility of their securing any patronage from other retail merchants.
Baltimore is noted the country over for its hand-made repousse sterling silver
hollowware, which has never been successfully imitated in other cities. The
out-of-town demand for this line of goods is general, a good portion of the output
being marketed in the South. Manufacturers who do not sell at retail secure a
small amount of local patronage from retail merchants. One factor which curtails their local sales to merchants is that manufacturers from other cities are
disposed to place their wares on consignment for long periods, a method which
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local manufacturers do not feel justified in pursuing. Another factor is that
by patronizing out-of-town firms, retailers are enabled to show a larger assortment, each manufacturer having his own particular designs. A cheap grade of
plated ware is made here in considerable quantities and has a wide market.
Expert labor is cheaper in Baltimore than in most localities where the business
is carried on, and overhead expenses also are reported as being lower.
MISCELLANEOUS
The only class of optical goods made in Baltimore is spectacle and eyeglass
lenses. There are eight concerns engaged in this business, but only two of them
make lenses for stock and these fill prescriptions as well. The other six do prescription work exclusively, selling in connection a general line of optical goods.
One of the concerns referred to sells 50 per cent. of his output to jobbers and 25
per cent. to retailers, the remainder being prescription work; the other sells 25
per cent. to retailers, 75 per cent. being prescription work.
Local manufacturers supply about 80 per cent. of the stock lenses carried
by Baltimore retailers, and about all of the prescription lenses used. This
is equivalent to 50 per cent. of their combined output of stock lenses. The other
50 per cent. is sold in all parts of the country.
There is but one concern that does its own importing of glass and pebble
blanks, Rochester, N. Y. and Southbridge, Mass. importers supplying the remainder. Only high grade stock lenses are ground in this city.
LEATHER AND MANUFACTURES
BELTING
Three concerns are engaged in the manufacture of leather belting which was
inaugurated here about eleven years ago. 90 per cent. of the local consumption
is taken care of by them, which constitutes 20 per cent. of their production; 50
per cent. of the product finds a market in the Southern states; and 30 per cent. is
distributed throughout the country. About 15 per cent. of these wares are sold
to jobbers, nearly all of the remainder being sold to consumers direct. There is
not sufficient margin in the business to make it attractive to jobbers.
Most of the hides from which the product is cut are tanned in Virginia. One
tannery has a selling agency in Baltimore, others maintaining branches in either
New York or Boston.
The manufacture of leather belting is not a growing industry, mainly because of the very large advance in the price of leather. If this is carried much
farther, as appears to be the prospect, it would make the cost of the raw material
prohibitive, and users would not be willing to pay extravagant prices for leather
belting, when that made of canvas(even if much less durable)could be made to
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answer the purpose. On account of the increased use of electric motors, there
has been a considerable shrinkage in the demand for wide belting of leather,
canvas, and rubber, but the changed conditions have stimulated a demand for
narrow or auxiliary belting.
Canvas belting was first made in this country by an Englishman who
established a plant at Baltimore. At the present time there are four firms making canvas belting, and the entire local consumption of stitched canvas belting,
which is the only kind made here, is supplied by the local manufacturers. 5
per cent. of the consumption is of the woven variety, which is made elsewhere.
The local demand takes about 5 per cent. of the output,the remainder being sold
chiefly in the South and West, where it is used largely in connection with agricultural machinery and saw mills.
Cotton yarn used in weaving and stitching the canvas is purchased principally
from southern mills, and the canvas is procured from Baltimore and southern
mills in about equal proportions. 80 per cent. of the canvas belting manufactured
is sold to jobbers.
Measured in square feet, 90 per cent. of the belting made in Baltimore is of
canvas, which represents 75 per cent. in value of the total output of both varieties
of belting.
SHOES
Shoes made in Baltimore are mainly high grade. The factories are gradually
increasing their business through the manufacture of shoes possessing distinctive
individuality and merit, thus giving them a strong patronage. Labor in the
industry is scarce.
About ten years ago the business reached considerable proportions, due in a
measure to there being 500 or more prisoners employed in the trade. This
practice, however, was discontinued about five years ago.
The jobbing business is in cheap, medium, and better grade shoes made
principally in New England and carrying the jobbers' names. It has been a
source of surprise that more of the larger jobbers did not also become manufacturers, thereby making the maximum profit out of the wares they sell.
HARNESS AND SADDLERY
The number of sets of harness manufactured in Baltimore during the past
fifteen years has shown a considerable increase,although the value of the product
has decreased. The output of fine driving sets has fallen off about 85 per cent.,
but, notwithstanding this, there is a considerable increase in demand for utility
or business harness, which, however, averages a much lower selling price than the
former. About 80 per cent. of the local consumption of harness is supplied by the
manufacturers, the patronage being divided between retailers and consumers.
Local sales are equivalent to 20 per cent. of total manufactures, the remainder
being distributed as follows: 45 per cent. in Maryland,Virginia, West Virginia,
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Delaware, North Carolina, New Jersey and southern Pennsylvania; 25 per cent.
in the remaining Southern and Southwestern states; and 10 per cent. in other
sections of the country and abroad.
There are five large concerns manufacturing a general line of harness. Two
of them make collars, and three make saddles also. Six concerns make collars
exclusively, and there are four smaller manufacturers of the general line. All of
of the harness manufacturers job accessories. Retail manufacturers make harness to order. There are two exclusive jobbers of accessories in Baltimore.
Most of the leather used is secured from tanneries in the West, although
patent leather comes largely from Newark, N. J. and Cincinnati, 0. Supplies
such as tools come from Newark, N.J.,and hardware is shipped here from Newark,
N. J., Cleveland, 0., Buffalo, N. Y., and New Britain, Conn. Metal hames are
secured from Newark, N. J., and wooden and metal-bound hames from the
West. In accessories there are two manufacturers of whips, one of them making
fly nets also, but the bulk of these articles comes from New England. The
greater part of robes and blankets is purchased in Massachusetts, although a
portion comes from Philadelphia and New York.
Seventy per cent. of the output of exclusive manufacturers of horse collars is
sold locally,25 percent. disposed of within a radius of 100 miles,and the remainder
shipped to widely scattered points. Most of the cotton cloth used in the making
of collars is purchased from local mill representatives and jobbers; padding
material, both hair and straw, locally; hardware from Connecticut; and thread
from Massachusetts. The business has fallen off in fine coach and patent leather
collars, but has increased in the utility or cheaper lines.
One concern makes a specialty of manufacturing street car straps and sells
practically its whole output to car building concerns.
FINISHING OF LEATHER
This industry has dwindled from thirteen concerns engaged in the finishing
of steer and other cattle hides to two firms, both of which collectively are not doing as much business as the smallest of the original thirteen. This transformation has taken place within the last fifteen years and the present condition is
very largely due to the tanneries now doing their own finishing. There were
1,800 sides of leather finished here last year, as compared to an average of 54,000
per annum when the business was at its height. Only steer and cattle hides are
being finished at present, although in the past many calf skins were so treated.
One of the present establishments finishes leather for harness and belting purposes, and the other also furnishes a considerable amount of that used in making
shoe skirtings.
Ten years ago Baltimore supported one establishment tanning beef hides,
but the business has since been discontinued. There are at present two concerns
tanning sheep skins.
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MISCELLANEOUS, INCLUDING TRUNKS
There is but one concern in Baltimore manufacturing trunks, exclusively
for the jobbing and retail trade. Three other concerns make a general line of
trunks, but retail most of their wares locally, selling a small percentage of their
output to dealers in other cities. Three additional concerns make sample trunks,
mostly of fibre, such as are used by traveling salesmen, and these are sold all
over the country. Very few suit cases and traveling bags are made for stock
purposes. This is also true of ladies' hand bags and other leather specialties.
About 50 per cent. of the trunks sold in Baltimore are made locally, the
remainder being bought in Newark, N. J., Richmond, Va., and western points.
The local trade of the manufacturers is equivalent to about 75 per cent. of their
output, the surplus being distributed 15 per cent. in the South and 10 per cent.
in the North and West.
All materials entering into the making of trunks, bags and suit cases are
purchased in other cities, none of them being made here. Leather comes chiefly
from Massachusetts; lumber, which is principally basswood, from Michigan;
hardware and locks from Connecticut, Missouri and Wisconsin; tacks and nails
from York, Pa.; and sheet and hoop steel from Pittsburgh.
The bags and suit cases made locally constitute a very small fraction of the
Baltimore demand, the bulk of those sold coming principally from New York
and Philadelphia. The trunk business has shown considerable growth in the
past five years.
LUMBER AND MANUFACTURES
BASKETS AND WILLOW WARE
Three firms are engaged in manufacturing splint baskets. This industry
is seriously handicapped through the source of supply for raw materials. The
braids, hoops, handles, filling, etc., are cut from the log by mill people in New
York, Ohio, Indiana, and Michigan, and shipped to Baltimore in mat form to be
shaped into baskets. This condition cannot be improved as our hardwood
timber is not adapted to the manufacture of baskets. Fortunately, the finished
product of those mills cannot be laid down in Baltimore to advantage, as the
freight rate acts as a barrier which, when added to their cost of manufacture,
places the mills at a disadvantage. Quite an assortment of lunch, willow, fancy
fruit, Easter and candy baskets are imported from Europe since they cannot be
manufactured locally at a profit.
There are twenty or more concerns and individuals engaged in the manufacture of willow baskets. While the majority of these are made to supply the
local demand, about 25 per cent. of the output is shipped to nearby cities. 75
per cent. of the willow used is grown in Maryland, the remainder being imported
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from Europe as the nature of the latter is such that it cannot be successfully
grown here.
Baskets and willow ware are being successfully jobbed, as the manufacturer
enjoys no advantage over the jobber in obtaining raw materials. The industry
in the main is merely the assembling of finished parts.
BOXES. BARRELS, ETC.
Baltimore is a favorable location for manufacturing boxes,shooks, and crates.
Local concerns are securing practically all the business, with the exception of a
limited demand for strictly northern white pine odorless shipping cases, which
is taken care of by New England manufacturers. Compared to northern cities,
Baltimore manufacturers enjoy a decided advantage in raw material because of
the lower freight rates by water from South Atlantic states which are the acknowledged centres for wooden box timber. Furthermore, the cost of labor is
somewhat cheaper than in northern cities and the efficiency is quite as high as
elsewhere. Local plants are well equipped with modern and labor saving
machinery.
About five years ago fibre boxes were introduced in the local market in
competition with the wood variety. All wooden box manufacturers are meeting
with considerable competition from producers of fibre boxes; especially is this
true in the smaller sizes, although the fibre product is in successful use in boxes
of 30" x 27" x 35", a container of popular dimensions for many purposes. At
the present time there are no establishments in Baltimore manufacturing fibre
boxes.
Boxes in shook form are successfully jobbed or handled by commission men.
This is true particularly in the canned goods trade, the demand from which is a
large item in the local industry. Jobbers supply about 35 per cent. of the boxes
used by the packers of oysters, fruits, and vegetables in and around Baltimore.
The reasons advanced for this condition, though not entirely convincing, are
long custom, longer credits, sales in smaller quantities, and deliveries as required.
Supplies incident to the trade are hemp rope, strap iron, and corrugated
fasteners. None of these articles is manufactured in Baltimore.
The business has shown a small but healthy growth over a period of years
and the number of manufacturers is on the increase. Sharp practice is not
resorted to among local firms and competition is on a fair basis.
CIGAR BOXES—Cigar box manufacturers are adequately equipped to
supply the local demand, although 75 per cent. of the boxes used in Baltimore are
shipped in, principally from Pennsylvania points. The acknowledged source of
supply for raw material (cedar) is Cuba. The logs are shipped to New York
and Pennsylvania points, cut into boards, and re-shipped to consuming centres.
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The grade of cigar boxes made here ranks among the highest, and competition
wherever encountered is on price only. Plants are well equipped with modern
machinery. From the standpoint of labor, Baltimore has a decided advantage
over other eastern cities.
Cigar boxes are a commodity that cannot be successfully jobbed, as they are
a made-to-order specialty and the product of each manufacturer has a certain
individuality. Logically it is not a neighborhood industry and the field for expansion is unlimited. This trade purchases its supplies, such as glue, sizing and
gold leaf (Schlag gold) from jobbers and outside sources. All are specialties
peculiar to the trade and the demand is limited. The lithographed labels used
in the trade cannot be procured in Baltimore, as our local concerns are not able
to cope with competition from New York firms who specialize in this work.
COOPERAGE—Practically all barrels manufactured locally are for home
needs and the combined capacities of the local establishments exceed the share of
business which they are able to control, equaling about 75 per cent. of the local
consumption. The remainder is furnished by Peoria and Cincinnati firms. This
condition has necessitated retrenchment on the part of some firms and the retirement of others.
Slat and truck barrels are being shipped in freely from Norfolk and
Eastern Shore points.
TANKS—The spasmodic demand for wooden tanks would not justify any
added facilities in this line. The product of the local factory is being shipped
throughout the United States, the business here being very limited.
FURNITURE
There are thirty-four concerns engaged in the manufacture of a wide variety
of furniture, although most of them specialize on a few articles. Of these, fourteen
are absolute manufacturers, taking the lumber in the rough and working it up
to the finished product. The others assemble finished parts which are shipped
in. There is no metal furniture made here, such as beds, costumers, letter files,
etc., and all of the office furniture produced in Baltimore is assembled. Trimmings,such az. handles,locks,ornamental pieces,castors,etc.,are not made locally.
No kitchen cabinets are made here.
About 15 per cent.of the furniture sold at retail in Baltimore is manufactured
locally, which constitutes 25 per cent. of the total output; 50 per cent. is
marketed in the Southern states; and the remainder sold in New York,Delaware,
and Pennsylvania. The hardwood lumber used is largely purchased of local
jobbers, although some is procured directly from the mills. In upholstered
furniture, the leather comes principally from New Jersey, hair and other stuffing
materials from New York City, and hardware from New York, St. Louis and
New England points. There is no very common furniture produced here with
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the exception of some assembled chairs, most of the product being of medium
and strictly high grade quality, especially couches, davenports and upholstered
chairs.
There are two concerns who make a specialty of manufacturing dining room
extension tables, and three others who make complete sets of dining room furniture. About 50 per cent. of the local demand for this class of furniture is supplied
by the home manufacturers, the remainder coming from factories located in
Hagerstown, Md., Pennsylvania and North Carolina points, and the West. The
home demand is equivalent to about 25 per cent. of the output. A market for
the surplus is found in the Middle Atlantic and New England states.
There is a scarcity of really expert help, which has a tendency to limit the
production. For some reason the manufacturers are not catering to the local
retail trade to nearly the extent that they might with profit.
MILLWORK
There are six large and three small establishments manufacturing millwork.
All but one confine their efforts largely to making sash, blinds, doors, door frames,
trimmings and mouldings for buildings on specifications. These wares are
manufactured in medium and high grade, mostly the latter. The cheap and a
large portion of the medium grades come from the West, as far as the states of
Washington and Oregon, the great bulk, however, being shipped in from Wisconsin, although some yellow pine and cypress come from the South. Finished
sash, blinds, doors, door frames and trim, in medium and cheap grades, can be
laid down in Baltimore as cheaply as the local mills can have delivered to them
here the rough birch, oak, ash, fir, and yellow pine lumber, but articles in cypress
can be made here as cheaply as anywhere. About 80 per cent, of the local product
is sold in Baltimore and the remainder in near-by points, our manufacturers
securing about one-third of the local business in value of product, but scarcely
10 per cent. in number of pieces turned out. Practically all of the local mills
job western and southern millwork. Veneered doors from Oshkosh and Warsaw,
Wis., and Pennsylvania points can be laid down in Baltimore cheaper than they
can be made here, even in the higher grades.
Three concerns make wooden mantels, two for stock and one to order.
The stock mantels are mainly of low grade.
Ninety-five per cent. of the wooden mantels used in Baltimore is supplied
by the manufacturers, which is equivalent to about 50 per cent.of their output.
The remainder is shipped principally to Middle Atlantic and New England states,
a small percentage being shipped South and abroad.
MISCELLANEOUS
The chief industries under this classification are the piano and casket
manufacturers. Three concerns are engaged in the making of caskets, burying
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cases and outside boxes, although two of them manufacture only on a small scale.
About half of the local demand is supplied by the manufacturers and the remainder shipped in from the East and \Vest. The local demand takes one-third
of the output, the surplus going to southern states generally. Very few high
grade caskets are made here, the bulk of production being medium and low
grade. One firm jobs a small quantity of locally made caskets, but the larger
portion of the Baltimore production is sold to undertakers direct.
In raw materials, chestnut, oak and poplar come largely from the South and
Southwest, rosewood and mahogany from South America, and walnut from all
sections of the country. Pine is required to be of the knotless variety and is
obtainable only in the northern sections. Textiles, such as silks and satins for
linings, and broadcloth and silk plushes for outside coverings, are imported to
the extent of 25 per cent. Handles, rails and other hardware are bought in
New England and from western points. The business is showing a growth
about proportionate to the increase in population.
Varnishes, stains and such materials come from Boston and Ohio points,
with some very cheap grades from the South. Glue is procured chiefly from
western meat packers.
Two concerns are engaged in manufacturing pianos, their output consisting
largely of strictly high grade instruments. The business was established here
in 1837 and has shown a gradual healthy growth. 90 per cent of the hardwood
lumber used is purchased from Baltimore jobbers. The hardware required is
bought largely in New York and Connecticut. Baltimore manufacturers secure
an adequate share of the local patronage and, in addition to selling their product
throughout the country, export 4 per cent. The labor situation is very favorable,
there being an abundant supply of skilled workmen at a reasonable wage.
One firm is engaged in the manufacture of organs, five concerns manufacture
picture frame mouldings,five firms make patterns and models,one makes plumbers'
wooden supplies and one makes veneer.
PAPER AND PRINTING
BOXES, BAGS, ETC.
The paper box industry is in a flourishing condition, having shown a healthy
growth during the past five years, the increase in production having been at the
rate of 10 per cent. per annum.
Although the local consumption of paper boxes is sufficient to absorb all
that are produced, the manufacturers are getting only 60 per cent. of the patronage. Their most serious handicap is the lack of cardboard mills in this vicinity,
which necessitates the supply of cardboard being brought here from considerable
distances. The principal sources of supply are New York, Ohio and Pennsyl-
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vania. From a study of conditions it appears that none of these places, nor in
fact any others, are more advantageously located for the manufacture of cardboard than is Baltimore, in and around which there is plenty of fresh and salt
water which is extensively used in soaking the pulp. It is a mistaken idea that
raw wood pulp is the principal basis of cardboard. Only 10 per cent. of this
product enters into its composition (and this merely to give it the requisite bending qualities) and the remaining 90 per cent. is waste paper pulp, which can best
and most cheaply be obtained in large cities.
The labor situation is distinctly favorable and the distribution facilities are
all that can be desired.
Paper boxes are extensively jobbed,but the bulk of the product is sold to the
consumer direct, with the exception of some few fancy Christmas boxes. A
great many of the cardboard mills are also equipped to manufacture boxes,
especially of the folding variety, and competition where encountered is largely
from these sources.
There is one concern in Baltimore manufacturing paper bags, and one
reported as making paper pie plates and kindred articles.
PRINTING AND PUBLISHING
This classification includes establishments doing book and job printing,
printing and publishing newspapers and periodicals, lithographing, book-binding
and blank book making, and engraving. No separate statistics were compiled
for the various branches of this industry, due to the fact that they are so closely
allied and consequently overlap in a number of instances.
The printing industry in Baltimore is in a fairly satisfactory condition,
though it has not shown the same proportionate growth during the past four
years that characterized it during a similar previous period. This condition is
accounted for by slack business conditions in all lines and is no more true of this
city than of other centres. It is claimed that the printing trade is more easily
affected by recessions in business than almost any other industry but is just
as quick to recover with increased commercial activity.
Some of the larger Baltimore establishments have suffered from overequipment, that is, more machinery, particularly presses, than could be kept
busy, thus increasing their operating expense beyond a reasonable limit. It is
authoritatively stated that a plant with more than ten cylinder capacity cannot be operated profitably in Baltimore, although a number of establishments
have exceeded this limit but with unsatisfactory results. These deterrent conditions have been largely remedied.
It has been ascertained that a large portion of the commercial printing
done in Baltimore is on out-of-town orders,the bulk of this patronage coming from
New York, although the entire country generally is served, particularly the
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South. This condition is alleged to be due both to the inability of Baltimore
printers to secure adequate prices for their product in this city and the installation of printing plants by no less than twelve large local corporations.
There has been a notable improvement in the average quality of printing
done in Baltimore during the past five years. A recent exhaustive investigation
and competitive comparison of product developed that the work of our local
establishments showed a typographical and general excellence superior on the
whole to that of any other large competing centre, comparison having been made
with such cities as New York, Chicago and Philadelphia, under the direction of
an authority in the trade.
There are eight concerns in Baltimore which print labels of various kinds
exclusively, four others doing this kind of work in connection with other printing.
Baltimore is said to stand second among the cities of the country in the production of labels. The business has grown at an annual rate of Ii per cent. for the
past four years and is in a very prosperous condition. Of the total amount of
labels turned out, 85 per cent. are printed and the remainder lithographed.
Baltimore printers fill 90 per cent. of the local demand for the product,
which requires 25 per cent. of their output. Altogether 40 per cent. of the local
production is taken by canned goods manufacturers here and elsewhere. Labels
for bottled beer and soft drinks are extensively made and also a general line for
druggists and manufacturers of toilet preparations.
Labor conditions are very favorable, the average scale of wage being practically on a par with Philadelphia but considerably less than the prevailing rates
of pay in New England cities.
About 75 per cent. of paper of all descriptions used in this industry is purchased through local jobbers, so far as commercial and general printers are concerned, and the newspaper plants purchase all of their paper stock from mills
direct. Most of the local jobbers purchase paper in car-load lots, which enables
them to compete successfully with manufacturers. About 90 per cent. of the
printers' rollers are purchased from and recoated by local manufacturers. Practically the entire ink supply is purchased out of town.
PRINTERS SUPPLIES
There are three electrotype concerns in Baltimore which manufacture for
the trade,and three controlled by private printing plants for the purpose of supplying their needs. About 90 per cent. of the electrotypes used are supplied by the
local manufacturers, the remainder coming from Philadelphia and Cincinnati.
The former city supplies a very high grade of electrotypes and the latter furnishes
very cheap grades. The local demand is equivalent to about 65 per cent, of the
output, and the surplus is distributed generally throughout the South and in
southern Pennsylvania. Of raw materials, blue stone, copper plates, sulphuric
acid and a portion of the electrotype metal are purchased of local manufactu
rers;
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moulding and polishing lead, moulding wax, iron filings, tin foil, nails, soldering
fluid and bases—the latter being a composition—are purchased out of town.
Three concerns make printers' rollers and they furnish about 90 per cent. of
the consumption, the remainder coming chiefly from New York and Philadelphia.
The local demand is equivalent to 90 per cent. of the output, 10 per cent. being
marketed in the South. Local machine shops make a considerable number of
the roller cores, but a majority are purchased from outside sources.
The principal articles used in the coating material are glue and glycerine,
both of which come chiefly from the large western packing houses. Other ingredients are more or less of a secret nature, each roller maker having a formula
of his own.
There is one concern manufacturing printers' ink in rather a small way, the
output being largely disposed of in this city.
PAPER AND STATIONERY
One concern makes a general line of envelopes on a limited scale and is
liberally patronized by the local printers and stationers. The business is
growing rapidly and it would appear that there is room for other manufacturers.
Nothing else in the line of stationery is made here to any extent.
TEXTILES
AWNINGS, TENTS AND SAILS
Baltimore cannot properly be called much of a centre in the production of
awnings, tents, or sails. The nine concerns engaged in the business confine their
efforts largely to supplying the local demand, and 95 per cent. of the consumption
is furnished by these manufacturers, which is equivalent to 70 per cent. of the
output.
The demand for awnings has increased about 40 per cent. in the past five
years, while that for tents has remained stationary and the output of sails has
fallen off about 50 per cent. Twenty-five years ago, when Baltimore was the
home port of one of the largest sailing fleets which traversed the seas, sail making
was an extremely large and important industry, but since that time the production
has decreased at least 75 per cent. and is still falling off from year to year.
Materials for awnings come almost exclusively from New York selling
agencies of New England cotton mills, but nearly all of the rope used is made in
this city, as is also the major portion of iron frames and supports. Supplies,such
as cotton-duck, rope, and twine used in making sails and tents, are practically
all secured from local manufacturers. Spring rollers for awnings are made here,
the metal parts being cast, the rollers turned, and springs manufactured by
different concerns.
During busy seasons help is scarce in each line except sail making.
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COTTON AND BURLAP BAGS
There are four concerns engaged in manufacturing burlap bags in Baltimore,
one of them making cotton bags also. The largest of the four imports and jobs
burlap, having East India as its principal source of supply, the remainder coming
from Scotland.
Ninety-five per cent. of the local consumption of both burlap and cotton
bags is furnished by these manufacturers,taking about 30 per cent.of their output;
65 per cent. is sold in the Southern states generally and the remaining 5 per cent.
goes to widely scattered points.
About one-half of the material used in the making of cotton bags comes
from southern cotton mills and the other half from New England. Twine for
sewing is purchased from local manufacturers.
The business is in splendid condition, having shown a 15 per cent. increase
in the past four years. A large portion of the burlap bags sold locally is used by
the fertilizer manufacturers and there is a good demand for the cotton bags from
near-by cement plants.
CARPETS AND RUGS
There are but two concerns making rugs in Baltimore, one producing rag
rugs and the other an imitation Oriental article. One of the firms also makes
rag, cheap ingrain, and woolen fibre carpets. The industry has never been
developed in Baltimore. 30 per cent. of the product is sold locally, most of the
remainder finding a market in southern Pennsylvania.
Heretofore all the jute yarns came from mills in New York and Brooklyn,
but since the enactment of the recent tariff legislation more than one-third
is imported from Scotland. The rags used are by-products of cotton cloth and
other mills, and the woolen yarns come from manufacturers in different parts
of the country. Paper fibre, a material extensively used in the making of fibre
rugs, comes from mills which make a specialty of twisting tissue paper into endless
strips.
There are more rugs of the variety known as summer rugs (composed
largely of grass and fibre) jobbed in Baltimore than in any other city, and other
rugs and carpets are jobbed here on a fairly large scale. Summer rugs are in
extensive demand throughout the South and Southwest, because of the higher
temperature there and the longer duration of warm weather in those sections.
Baltimore jobbers have secured and are holding a large portion of this trade.
None of this class of rugs is made south of Philadelphia,though there appears to
be no good reason why some of the grades should not be manufactured in Baltimore.
COTTONS AND PRINTS
Located within Baltimore's industrial district are five concerns manufacturing cotton-duck, each of which also makes cotton rope, seine twine, yarn and
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lamp wicks. 98 per cent. of the local consumption of these articles is supplied
by the local manufacturers, which takes only about 3 per cent. of their output.
The outside distribution is approximately as follows: 48 per cent. to shipbuilders for awnings, life boat covers, and deck coverings, to manufacturers of
harvesting machinery for grain conveyors and to paper mills for dryers, etc.;
35 per cent. to jobbers all over the country; 9 per cent. to the Federal Government; and 5 per cent. exported.
Cotton-duck was originally made for sails exclusively but now only about
1 per cent. of the material is used for this purpose. Jobbers of cotton-duck
sell their materials largely to makers of awnings, tents and sails, and to ship
chandlers. There are no jobbers of these wares here.
Baltimore produces more genuine cotton-duck—not including the thin
coarse product improperly so called—than any other city in the country and many
of the brands made here have a world-wide reputation for quality and uniformity,
which in some instances have commanded a premium of 5 per cent. The raw
material comes largely from the South.
It is very difficult to secure an adequate supply of labor, which is mainly
female, in busy seasons.
CLOTHING—MEN AND BOYS
Under this classification are included establishments engaged chiefly in the
manufacture of men's and boys' clothing, such as overcoats, suits, trousers, raincoats, and other clothing specialties.
This is one of the most important industries of Baltimore and has shown a
decided expanding tendency during the past five years. The manufacture of
clothing, by way of illustration,can be divided into three grades: low, medium and
high priced. Local production is largely confined to the medium and high priced
lines and as a result this market stands third among the cities in value of output.
Although Baltimore practically controls the southern trade and the trend
of the business is therefore naturally to the South, representative manufacturers
thoroughly cover all sections of the country, and Baltimore-made clothes are to
be found in the stores of the best retailers from Maine to California. A number
of manufacturers have inaugurated a campaign of national advertising which is
contributing largely to establishing this city as a clothing manufacturing centre.
As a matter of fact, clothing is one of the few local products that is extensively
advertised, and the results attained by these progressive firms should stimulate
other industrial pursuits to follow their example. Because of its intimate knowledge of climatic conditions and the requirements of the southern people, Baltimore stands first and foremost in the manufacture of summer goods' specialties,
a feature which at the present time offers the greatest opportunities.
Contract shops are fast being eliminated and there is a marked tendency to
confine the manufacturing of clothing to large plants which, as a whole, measure
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up to the most modern type and have been used as models by manufacturers in
other cities.
No clothing manufacturing centre has so closely studied and provided for the
protection of the workmen and sanitary conditions as has Baltimore. As a
result of this and of the favorable economic conditions prevailing, a large
number of men and women of various nationalities have been attracted here.
OVERALLS AND WORK SHIRTS—These industries are very closely allied in
Baltimore, in that, as a rule, both products are made in the same factories. 75
per cent. of the local output is sold to jobbers throughout the country, only two
of the factories catering exclusively to the retail trade. Local retailers purchase
almost their entire supply of overalls from Baltimore manufacturers, the remainder being procured from Newburgh, N. Y., and Patterson, N. J. Local
jobbers are not liberal patrons of home factories, in that they encourage a demand
for sub-standard wares in both overalls and work shirts,not produced in Baltimore
to any great extent. In the better grades Baltimore manufacturers are getting
a fair share of the local jobbers' requirements, which however are extremely small
in the aggregate. In work shirts, Baltimore jobbers handle mostly New York
lines, because sweatshop labor in that city has enabled the manufacturers there
to undersell the local producers in this market.
About 90 per cent. of the material used in overalls and work shirts comes from
southern cotton mills and in this respect the local concerns enjoy a certain advantage over their northerly competitors, as New England mills do not specialize
on that class of material. Throughout the South the manufacture of overalls
and work shirts has of recent years become a neighborhood industry of considerable magnitude.
Findings, such as trimmings and buttons, are purchased out of town, pearl
buttons and trimmings coming from New York and metal buttons from New
England.
The labor situation is quite favorable, manufacturers having little trouble
in securing an adequate supply of experienced help at reasonable wages. The
business shows a growing tendency, and 1913 was a very successful year from the
manufacturers' standpoint.
MEN'S FURNISHINGS
NECKTIES Baltimore ranks second among the cities of the country in the
manufacture of men's neckwear. Of the twenty concerns engaged in the industry, eighteen specialize and two conduct the business as a side line.
The quality of the output runs from medium to fairly high grade, embracing
lines that retail from 25 cents to $1.50 each, although one concern makes
a line that retails at 10 cents. Manufacturers cater principally to local and
southern trade, but also sell their wares in the Middle Atlantic states and the
Middle West.
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Fifty per cent. of the local consumption is supplied by home manufacturers.
The jobbers' trade is not solicited to any great extent locally or elsewhere, as the
line does not adapt itself to being successfully jobbed.
Ninety per cent.of the materials used are silks and satins, all of which are purchased in New York from importers and manufacturers. The material for
wash ties is secured from New England mills.
Experienced help is scarce in busy seasons, and manufacturers are constantly
training new female employees.
leads the country in the production of men's
nainsook, madras, silk, muslin, and linen. Lisle and cotton mesh
underwear of
undergarments are not made here. Of the ten concerns engaged in the industry,
five are manufacturers of underwear exclusively, and an equal number combine
its manufacture with that of other closely allied lines, such as pajamas and night
shirts. 50 per cent. of the local consumption is supplied by these concerns, in
addition to which a small amount is sold to local jobbers.
The product is distributed generally throughout the country, the largest
amount proportionately going to the South. There is comparatively little strictly
high grade underwear made here, 75 per cent. of the product being medium
quality, and 25 per cent. divided between high and low grade. Most of the local
output is of light weight.
Cotton goods are secured largely from southern mills and from New York
agents of New England mills. Silk and linen are purchased in New York. Buttons, principally pearl, come from western points.
The business has expanded steadily for a number of years, the chief handicap
being the labor situation, with the scarcity of expert female help and high wages
demanded.
UNDERWEAR—Baltimore
SHIRTS—Baltimore ranks high among the cities of
the country in the production of pajamas and night shirts. This industry was
established in 1881,and at the present time there are five concerns manufacturing
this character of men's wear, one of them specializing. All grades are manufactured, the medium grade, however, predominating.
Baltimore retailers are liberal patrons, as are also the jobbers who cater to
out-of-town trade. New England mills furnish most of the materials, a small
per cent.coming from the South. A portion of the cotton goods is converted from
plain into patterned material by the local concerns.
The business is showing a consistent growth. The distribution is country
wide, and one or two of the local brands have a national reputation.
It is difficult to secure ample trained female help in the busy seasons.
PAJAMAS AND NIGHT
DRESS SHIRTS—There are fifteen concerns manufacturing men's dress shirts,
almost all of them confining their operations to this one line. Manufacturers
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37
supply about 25 per cent. of the local consumption and 10 per cent. of the amount
jobbed here. The bulk of the jobbing demand is for lower grades of shirts than
are produced in this city. Manufacturers find a market for their product all
over the country, although, as is the case generally, they experience considerable
difficulty in competing with goods made in Troy, N. Y. Of the total output,
75 per cent. is of a medium grade, the remainder being evenly divided between
high and low quality. The greater portion of material used comes from New
England and southern mills, purchases from the latter source being on the
increase.
The business is expanding at a gratifying rate, but, as in all other lines requiring a preponderance of female help, manufacturers find it difficult to obtain
a sufficient amount of experienced help in busy seasons.
SUSPENDERS—Manufacturing suspenders is a business of small proportions
in Baltimore. Five concerns are engaged in the industry, two of them specializing. 60 per cent. of the output, which is in cheap and medium grades, is sold to
local retailers, and the remainder shipped. No effort is made to supply the
jobbing trade for the reason that the local line is not adapted to their requirements. Webs are purchased in New England as is also most of the leather used.
Although the business is just about holding its own, the aspect of it has
changed. Ten years ago there were engaged in this industry a considerable
number of small concerns, whereas at the present time there are fewer but larger
ones, a condition which shows concentration in stronger hands. The labor
situation is favorable.
MISCELLANEOUS—One concern does a considerable business in making
belts for women and children, but there are no men's belts made here. No
hosiery or garters for men are made here.
HATS
AND CAPS, EXCEPT STRAW
Of the twelve concerns engaged in the manufacture of hats and caps, seven
are of considerable size and the remainder small. 20 per cent. of the production is sold locally, 15 per cent. to retailers and 5 per cent. to jobbers. 90
per cent, of the product sold out of town is shipped to retailers direct, the other
10 per cent, to jobbers. The Southern states are the principal market for these
wares, although trade in the Middle West is extensively catered to. The greater
portion of the product is medium in quality, one-third being divided equally
between low and high grade. Up to a few years ago the demand for cheap
caps was very heavy, and half of the production was of a grade retailing at 25
cents, but since that time the quality has been greatly improved.
Manufacturers contend that they could dispose of 15 per cent. more of the
product if they could secure ample and competent help, which largely consists
of men and boys. The business has shown a growth of about 7 per cent. per
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annum for the past five years. The local output of soft and stiff felt hats for
men and boys is limited to one concern.
All materials in cloth and trimmings are purchased from New York jobbers,
as local jobbers do not handle the kinds required.
LADIES APPAREL
There are ten establishments in Baltimore making children's and misses'
dresses exclusively. Four other concerns manufacture them as a side line.
This city ranks high in the production of cheap and medium grades, and one
firm produces the highest grade of children's dresses in the country. The
business has shown a steady increase for the past four years, and the volume of
business for 1913 was the largest in the history of the industry.
Of the total output, 15 per cent. is sold locally, divided between 10 per cent.
to jobbers and 5 per cent. to retailers, and the remainder is marketed out of town.
Of the whole product, 20 per cent. is sold to jobbers and 80 per cent. to retailers.
Seventy-five per cent. of the cloth used comes from New England mills and
25 per cent. from southern mills. Trimmings are bought chiefly in New York
and most of the covered buttons, which are but little used, are purchased in
this market. Pearl buttons come from different points along the Mississippi
River, being made of fresh water shells.
Twenty-four concerns manufacture middy blouses, several of them devoting
their entire facilities to this line. Inasmuch, however, as the demand for middy
blouses reached its zenith about two years ago, and their sale has since been
considerably curtailed, a number of these firms will abandon their manufacture,
and in most instances will make ladies' waists instead.
The difficulties which the manufacturers complain of are lack of consideration from local retailers, including department stores; impossibility of getting
buyers for large retail merchants elsewhere to make a practice of visiting this
market periodically, which necessitates calling on them; and a scarcity of experienced female help in busy seasons. Local contract shops do not work to
any extent on children's and misses' dresses.
LADIES UNDERWEAR—Four concerns are engaged in this industry as both
manufacturers and jobbers. The product consists of muslin skirts, drawers,
corset covers and gowns, and flannelette gowns. No knit underwear is made here,
although there is apparently no good reason why it should not be. In the
flannelette output, Baltimore stands second among the cities of the country.
The muslin underwear trade has shown a rapid and uniformly steady growth
during the past four years. The business as a whole is not of much importance
considering the size of this city. The output is of medium grade, 90 per cent.
of the product being shipped and the remainder taken 7 per cent, by local jobbers
and 3 per cent. by retailers.
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39
Most of the muslin comes from New England and southern mills. Trimmings are imported to the extent of 75 per cent., New York jobbers and local
lace manufacturers supplying the remainder.
The complaint of manufacturers is the scarcity of female help in busy
seasons.
CLOAKS, SUITS AND SKIRTS—There are forty concerns engaged in this
industry, but Baltimore does not as yet occupy a very high rank among the
cities of the country in the production of this class of wearing apparel. The
output is very largely cheap and medium grade garments, the production of the
former having increased 20 per cent. and the latter 5 per cent. in the last four
years. Local jobbers are extensive purchasers, having taken 45 per cent. of
the total output last year. Local retailers purchased 5 per cent. of the production and the remainder was shipped out of town.
Manufacturers complain of the small amount of patronage extended them
by Baltimore's retail merchants.
Materials, such as cloth, linings, buttons and trimmings, must of necessity
be purchased out of town, which is a serious handicap to the industry. Labor,
although plentiful, is strongly organized.
MISCELLANEOUS
One concern makes a very complete and high grade line of men's and women's
knit wool sweaters. They cater only to jobbers, local firms taking 15 per cent.
of the output. Worsted and wool yarns come from Massachusetts and Pennsylvania, and buttons from Iowa.
There are two concerns which do an extensive business in the manufacture
of coat paddings. One of them also makes canvas fronts, being the only one in
the country engaged in this line. With the exception of two clothing manufacturers who make their own coat pads,95 per cent. of the local demand is furnished
by these two firms, which is equivalent to 50 per cent. of the combined output,
the remainder being distributed among clothing manufacturers in Chicago,
Rochester, N. Y. and other centres. No attempt is made to compete for New
York business as the demand is filled largely by sweatshops.
Four concerns make window shades, that is, they assemble finished parts.
Their output supplies about 90 per cent. of the local consumption, which is
equivalent to one-third of the production, the remaining two-thirds going to
southern points. Materials are purchased in New York and imported. Spring
rollers come from Newark, N. J. Only the retail trade is catered to by the
manufacturers.
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TOBACCO
The tobacco manufacturing industry is, by itself, classed as one of the
principal generic groups of manufacturing industries. As it would be impracticable to differentiate between the distinct branches of tobacco manufacture, and
also in order to avoid overlapping, statistics covering all branches of the industry
have been compiled under one heading, which includes smoking tobacco, cigars,
cigarettes, and snuff.
The factory selling value of cigars has shown very little increase during the
past four years, but in the number manufactured the production was the largest
in the history of the industry. These conditions were caused by the greater
demand for five cent cigars. The number of establishments has shown a considerable decrease during recent years, a condition which is universal and not
peculiar to Baltimore, because the small manufacturer is finding it unprofitable
to remain in business in view of the competition encountered. There is a decided
scarcity of help, which has necessitated the installation of suction tables operated
by girls. Keen competition among local manufacturers on well established and
advertised brands has raised the quality of the five cent cigars to a higher level
than obtains in any other city in the country. Ten years ago the industry employed about two-thirds male help, whereas at the present time women and girls
are employed to the extent of 75 per cent. in the larger factories. The tendency
of large factories in other cities is to establish branches in small towns, and although the Baltimore manufacturers have not as yet adopted this method, they
may be driven to it in view of the saving in overhead charges and cost of labor.
The cigar industry in Baltimore is in better condition at the present time than
is the case in almost any other large city: all of the factories are running to their
average capacity, while in other centres some are shut down entirely and others
running only part time.
The trend of the distribution, which up to ten or fifteen years ago was decidedly south, is now westward, many local manufacturers having built up a
trade which reaches to the Pacific Coast, while at the same time holding their
southern trade. Transportation facilities are all that could be desired. All
factories of any size are thoroughly equipped with modern labor saving machinery.
The recent tendency is to place an ever increasing amount of product through
jobbers, as it has been found that they can handle the goods in small quantities,
along with other products which they sell, cheaper than the manufacturer, and
it is the small consignments that make up the volume of the business.
Enough cigar boxes are manufactured here to supply the demand, but the
trade purchases its boxes to the extent of 75 per cent. from Pennsylvania manufacturers. All lithographs for boxes and cigar bands are purchased in New York,
since there are no producers of this class of color work in Baltimore.
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INDUSTRIAL SURVEY OF BALTIMORE
41
TOOLS AND HARDWARE
BUILDERS HARDWARE
There are two concerns engaged in making sash and elevator weights. It
takes 10 per cent. of the output of these manufacturers to supply 95 per cent.
of the local consumption, the remaining 90 per cent. being distributed from Maine
to Texas. 50 per cent. of these materials is sold to jobbers,40 per cent. to retailers,
and 10 per cent. to builders.
The raw materials consist of scrap iron and tin, and because of the large
home supply, local manufacturers have an apparent advantage over competitors
located in other cities.
One concern manufactures metal sash and supplies 40 per cent. of the local
demand, which is equivalent to 10 per cent. of its output, the remainder being
disposed of principally in the South.
Two concerns make metal ceilings on a rather small scale and secure 25
per cent. of the local business, which takes 50 per cent. of their production,
the other 50 per cent. being distributed largely to near-by sections.
MISCELLANEOUS
One local concern manufactures copper rivets and burs, soldering coppers,
escutcheon pins, nut locking washers, etc., and supplies about 75 per cent. of the
local demand, the remainder being shipped from points in the North. This
firm has facilities for making cut and wire nails of steel and iron. Two concerns
make brass and iron cobblers' nails, tacks, and glaziers' points, and secure a
market locally for 10 per cent. of their production, the remaining 90 per cent.
being sold one-third in the South and two-thirds over the country generally and
exported.
Two concerns are engaged in the manufacture of nuts and bolts.
One firm is engaged in oxidizing nails and it secures a fair share of the local
business. One company makes a patented wire nail largely used by roofers and
by railroads. Their product is marketed throughout the country, the local
sales being comparatively small.
The manufacture of cutlery in Baltimore is carried on by three concerns who
make oyster knives, one of whom makes a complete line of paring knives also. A
very small fraction of the local demand is supplied by these manufacturers,
which is, however, equivalent to 10 per cent. of their output, 90 per cent. going
to northern, southern and western points, mostly coast cities. A limited amount
of cotton and box hooks is made here and marketed in the South. The steel
used comes almost entirely from Sheffield, England. Handles come largely from
New York.
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VEHICLES
HORSE DRAWN
In the building of horse drawn vehicles Baltimore manufacturers, in common
with those of other centres, have seen their business decline to an appreciable
extent, but this curtailment has been largely in carriages and pleasure vehicles,
which have been almost entirely displaced by automobiles.
Twenty years ago there were twelve large concerns and a considerable number of smaller ones engaged in building carriages, several of them having gained
a national reputation on their wares, but today there remain only two, and these
have added the construction of automobile bodies to their business.
Fifteen years ago cheap factory-made business or utility wagons shipped in
from other cities partially supplanted local hand-made vehicles, but there has
been a gradual return of patronage to the home concerns. The decreased demand
is largely attributed to the use of motor trucks for utility and hauling purposes,
but some of the enterprising Baltimore wagon builders have in a measure anticipated this condition by building motor bodies and equipping their factories for
repairing motor vehicles.
Of the materials used, ash lumber, largely employed in the construction of
bodies, comes from Tennessee, but hickory and oak, used in building the
running gears, are mostly Maryland grown. Local factories purchase their
wheels ready made, 60 per cent. coming from home manufacturers. The remaining wheels used are shipped to local manufacturers knocked down from
Pennsylvania points.
Tires and other iron parts are usually made at the local plants, with the
exception of a few which are dropped forged and can be purchased to better
advantage elsewhere. Very few horse drawn vehicles are jobbed here at the
present time and they consist mostly of dump carts and farmers' wagons.
The labor situation is not favorable,there being a scarcity of skilled mechanics.
MOTOR AND VEHICLE PARTS
Local manufacturers make wheels and hubs only on the order of wagon
builders and jobbers, but they make and carry in stock spokes and rims. Wagon
builders secure nearly all of their requirements in finished wheels from Baltimore
manufacturers, which take about 333's per cent. of the production. 10 per cent.
of the output is exported. What little jobbing is done in wheels and parts
consists largely of locally made products. A large proportion of the finished wheels
sold out of the city are shipped to the South, the Middle West, and to northern
states. In separate hubs, manufacturers command 90 per cent. of the local trade,
and 25 per cent. of the separate spokes and rims. Axles, springs, bolts, tires, fifthwheels, steps, and angle irons are not made here, but are carried in stock by seven
jobbers of this class of wares.
Wagon bodies and running gears are all made by local wagon manufacturers.
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MISCELLANEOUS
BRASS AND BRONZE PRODUCTS
Local founders make stock castings in large quantities and do general job
work of every description in brass, bronze, aluminum and special metals, but the
complaint is general that they do not receive the requisite local support, a large
percentage of the brass work in particular being secured from other sources.
One firm extensively manufactures church bells and chimes.
One concern is engaged in the manufacture of brass tubing and is fast becoming an extensive producer of this and other tubing. This manufacturer
supplies about 60 per cent. of the local demand for tubing. Gas and electric
fixtures are manufactured in Baltimore on a large scale, five firms making
them exclusively.
Among plumbers' supplies of brass and bronze, spigots, bibs, faucets, valves,
and connections are made here and carried in stock by manufacturers, and are
sold largely to plumbers' supply houses. 40 per cent. of the local demand is
supplied, which takes 60 per cent. of the production, the remaining 40 per cent.
being sold in the North and South. Brass faucets and spigots in cheaper grades
are not made here, but come largely from Pittsburgh, Pa. and Bridgeport, Conn.,
where they are made in very large quantities. High grade spigots are made here
and carried in stock by jobbers. Local plumbers' supply houses secure brass
articles other than those purchased from Baltimore manufacturers in Pittsburgh,
Buffalo and Cleveland.
There are no large founders south of Baltimore making brass and bronze
fittings for the plumbing and other trade, so that our manufacturers enjoy a
large patronage from southern territory.
BROOMS AND BRUSHES
There are two large concerns and ten small ones engaged in the manufacture
of brooms in Baltimore,three of them making whisks also. Whisks represent about
5 per cent. of the total value of manufactures. 80 per cent. of the local consumption is furnished by the manufacturers, 20 per cent. coming principally from
Amsterdam, N. Y. The latter brooms are strictly high grade, the Baltimore
concerns making only medium and cheaper varieties. The local trade takes
about 38 per cent. of the product; 26 per cent. goes to southern states, an equal
amount to New York State and New England, and 10 per cent. is exported. 60
per cent, of the product is jobbed.
Broom corn is shipped from Texas and Oklahoma to New York by water and
from there re-shipped to Baltimore, entailing an additional charge of 25 cents
per cwt. Manufacturers in Baltimore are therefore seriously handicapped in
bidding for northern trade and contend that if direct transportation facilities
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were inaugurated, this city could easily become the broom manufacturing centre
of the Atlantic Seaboard.
Broom handles are not made here, the largest part of the local supply being
secured from Michigan and \Vest Virginia. Broom stitching machines are made
in this city and winders are purchased from manufacturers in Philadelphia, New
York, and the West.
BRUSHES—Baltimore ranks third among the cities of the country in volume
and value of brushes made, five concerns being engaged in the industry. 60
per cent. of the local consumption of the general line of brushes is supplied by the
manufacturers, which requires about 7 per cent. of the output. The remainder
of the product is distributed 35 per cent. in the South, 35 per cent. throughout
the West,and 23 per cent.in the North and East. 75 per cent. of the production
is sold through jobbers.
Nearly all the camel's-hair brushes are imported. Horse and scrub brushes
are not manufactured in Baltimore outside of the Maryland penitentiary. Paint
and varnish brushes of all descriptions and sizes, however, are made here, in
addition to a very complete line of whitewash and house or domestic brushes.
Bristles come largely from China, horse-hair from local jobbers, and Tampico
grass (used for coarse brushes) from Mexico. Handles are made of maple wood
and are bought in West Virginia and Pennsylvania.
The business has shown an annual growth of about 5 per cent. in the past
five years.
TIN AND SHEET IRON PRODUCTS
The manufacture of tin cans had its inception here about forty-five years
ago, the product being hand-made, but with the introduction of machinery the
output increased rapidly to keep pace with the demand. Formerly skilled labor
was largely required, but the proportion of this class of help has gradually decreased for the past ten years, until now 50 per cent. of the labor is unskilled.
During the last twelve years the business has grown 75 per cent., the greatest
increase being noted in the past five years. There are more tin cans made here
than in any other city of the country, and although packers of oysters, fruits
and vegetables purchase all their tin cans from Baltimore makers, they consume
only about 15 per cent. of the production. 50 per cent. is sold within 200 miles
of Baltimore and the remainder shipped over the country. Some cans are being
exported and the foreign demand shows a gratifying increase from year to year.
Baltimore is the headquarters for the manufacture of bottle stoppers, which
are produced here in large quantities. Gas meters are probably made here on
a larger scale than in any other city. Two concerns manufacture a complete
line of stamped kitchen ware.
Sheet tin is used in very large quantities in the manufacture of the various
wares mentioned and practically all of the tin comes from the Pittsburgh district.
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There appears to be quite a unanimity of opinion among the independent users
of the product that this city would be an ideal location for the establishment of
a large tin plate mill.
METAL CORNICE AND ROOFING—Thirty concerns are engaged in the manufacture of metal cornices and roofing, in connection with a general line of sheet
iron work. Practically all sky-lights, iron shutters, doors, galvanized eaves
troughs, conductor pipe, and elbows sold locally, come from the manufacturers
here.
Eighty per cent. of the material used is purchased from local jobbers, and the
remainder in Philadelphia and New York. The demand for tin for roofing
purposes is again on the increase.
FLAGS, BANNERS AND REGALIA
Three concerns are engaged in the manufacture of banners, buttons and
badges, and three in making regalia. In the first group, 50 per cent. of the
consumption is supplied by the manufacturers, the remainder coming principally
from Newark, N. J., with a small portion from scattered northern cities. The
demand is equivalent to about 30 per cent. of the output, 65 per cent. being distributed over the country and 5 per cent. being exported. Banners, especially
college,state and municipal pennants,are carried in stock, but buttons and badges
are made only to order. Silks are purchased in Patterson, N. J., celluloid is
imported, gold trimmings come from France, and brass materials from Connecticut. The local production has shown an increase within the last five years.
Regalia are manufactured to order and local concerns supply practically the
entire Baltimore demand.
FUR GOODS
Five concerns are engaged in the manufacture of furs for the retail and
jobbers' trade. Ten other firms make furs for their own retail stores and four
job raw fur skins. The local manufacturers supply about 5 per cent. of the
consumption, which is equivalent to 35 per cent. of their output. The remainder
is sold in Maryland, adjacent states, and the South. The five manufacturers
referred to supply about 5 per cent. of the consumption, which is equivalent to
5 per cent. of their output. 60 per cent. is sold in the South, and 35 per cent.
in Maryland and adjacent states. The ten retailers supply 10 per cent. of the
local demand. New York jobbers and manufacturers furnish 85 per cent. of the
local consumption.
At the present time there is only one firm in Baltimore jobbing furs exclusively, although up to about five years ago at least ten concerns, mostly wholesale
houses, jobbed fur goods on an extensive scale. The reasons advanced for this
curtailment are that a great number of southern retailers have discontinued the
line owing to climatic conditions, and the present tendency of the manufacturers
is to sell direct to the retail trade.
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Four concerns job raw fur skins, but as none of them are finished and dressed
here, Baltimore fur manufacturers are compelled to purchase the finished skins
from New York. Outside of a comparatively few sets made by the manufacturing retailers, there are no high grade furs made here.
Satin used for linings is purchased from Baltimore jobbers to the extent of
25 per cent., the remainder coming from New York,
ICE AND CREAM PRODUCTS
Eight concerns are engaged in the manufacture of ice in and around Balticolmore. The demand last year was 275,000 tons, the capacity of the plants
y is occasioned by the manulectively being 600,000 tons. The excess capacit
facture of ice being distinctly a seasonal business, the bulk of the output being
of
produced and consumed in a period of five and half months' duration. Most
is properly filtered. Very little ice is
the ice is made from city water, which
ago,
shipped out of Baltimore and but little is shipped in. Up to a few years
northern points, but one manufacturer
ice was brought in from Maine and other
A uniform
has provided ample storage which has discontinued this practice.
many years,but the wholesale price has
price to families has been maintained for
experienced violent fluctuations, sometimes going to a level that meant disaster
of 3
for some of the companies. The business has shown an annual growth
her satisfactory, rates of pay having
per cent. The labor situation is not altoget
increased and efficiency decreased.
gross value
ICE CREAM—This has become quite an extensive industry, the
Competition is keen among
of the product having doubled in the past four years.
local manufacturers. Most of the product is of a high grade.
Manufacturers have built up an extensive shipping trade to points in
last
Maryland, District of Columbia, Virginia and Delaware. The shipments
15 per cent. of the total production.
year were equivalent to
MATTRESSES AND SPRING BEDS
There are no metal beds of any description manufactured in Baltimore. One
ng
concern made them on a small scale several years ago,but did not rebuild followi
by fire. Four metal bed concerns of other cities maintain
the loss of its factory
and enameled
large storehouses and distribute their product, consisting of brass
ts, at the same time taking care of the southern trade.
beds, to local merchan
ses,which
About 85 per cent. of the local demand is supplied from these warehou
cent. of their total sales. No good reason is assigned why
is equivalent to 60 per
s in such
s
metal beds could not be manufactured here, as the busines prosper
J.. and Rome, N. Y.,which are no closer than Baltilocalities as Jersey City, N.
more to the source of supply for raw materials.
in BaltiBED SPRINGS—Seven concerns make various kinds of bed springs
cent. of the demand here, the remaining 15
more and they supply about 85 per
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per cent. coming principally from Philadelphia. The local consumption takes
30 per cent. of the output, 50 per cent. goes to the Southern states, and 20
per cent. to Pennsylvania, Virginia, Maryland, and Delaware. Two-thirds of
the output is sold to retailers, and one-third to jobbers. The production has
increased at least 50 per cent. in the last five years.
Steel for the springs and iron for the frames come from the Pittsburgh
district. There appears to be an abundance of skilled labor,which can be had
at reasonable wages.
BEDDING—Seven concerns are engaged in the manufacture of mattresses,
feather ticks, pillows, and bolsters, five of which make mattresses only. Local
firms supply 90 per cent. of the Baltimore consumption in these lines, the remaining 10 per cent. coming from Cincinnati and New York. The local demand
is equivalent to 60 per cent. of the production, 25 per cent. going South, and 15
per cent. to Maryland and southern Pennsylvania points. 20 per cent. of the
output is sold to jobbers, 80 per cent. going to retailers, principally furniture
dealers.
Ticking is bought largely of southern cotton mills. One local establishment
making bedding, also prepares hair for mattresses and sells it to local and out-oftown manufacturers. Chicago is a keen competitor for this business and secures
about 50 per cent. of the consumption.
Ninety per cent. of the pillows made here are stuffed with feathers, the rest
with hair and cotton.
MILLINERY AND LACE GOODS
The manufacture of artificial flowers and feathers, which has been conducted
here for twenty years,was at one time an industry of considerable magnitude.
It has shown a decrease in volume during the past five years,but this condition is
reflected in the industry throughout the country, the demand being generally
curtailed. Baltimore manufacturers import half of the material they use as
well as a large amount of the partially finished product. All other materials are
bOught in New York, the latter city having a monopoly of the business.
Millinery is jobbed on an extensive scale in Baltimore, the principal market
being the South, although the distribution is general. The manufacturers of
trimmings sell the greater portion of their wares west of Pittsburgh, only a small
part to local jobbers, and practically none to milliners and retail stores.
Labor conditions are favorable, little difficulty being experienced in securing
an adequate supply of help even in the busy seasons.
Embroideries have been made here for the last eighteen years, and the
business is showing a steady growth from year to year. About one-third of the
output is sold to local jobbers, the other two-thirds being disposed of South and
West. All grades and qualities are manufactured, with medium leading. Labor
conditions are favorable.
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The small amount of lace manufactured locally is of the cheapest quality and
barely deserves mention, being made by two local embroidery concerns as a
side line.
SHIPBUILDING
With iron gradually displacing wood in the construction of vessels, the
building of wooden ships in Baltimore (which thirty years ago was an extremely
flourishing industry) has declined to the extent of 75 per cent., due to their construction cost having advanced to within 10 per cent. of that of iron vessels
of the same capacities; but, taking into account large iron steamers and other
classes of vessels which are being constantly built in the Baltimore Metropolitan
District, the money value of ships of all classes built in 1913 was greater
than in any previous year in the history of the industry.
At one time Baltimore built more and faster clipper ships than any other
port,but at the present time local shipbuilders are confining their work largely to
construction of barges, scows, floats, yachts, and tug boats. Repairs to wooden
vessels are also diminishing to an appreciable extent yearly, due to the advent of
iron bottoms and the consequent gradual elimination of wooden vessels as
carriers. The present low freight rates do not justify large maintenance expenditures on wooden sailing vessels, but nevertheless they have to be kept in
good seaworthy condition in order to secure insurance and the highest prevailing
freight rates. Inasmuch,however,as wooden sailing vessels do not have to pass
the crucial Government examination to which wooden steamers are subjected,
it is left to the discretion of the owners as to the extent of repairs to be made.
Other factors which have lessened the volume of repair work are the decreased
number of ships that put into the port of Baltimore, and the consolidation of
steamship lines which has brought thirty or forty vessels under one ownership.
The headquarters of these lines are largely out of Baltimore and consequently
most of the work is diverted to their home ports. Very few of the local yards are
equipped for making heavy repairs to iron vessels.
STONE AND MONUMENT WORK
The business done by local manufacturers of these closely allied products
is decreasing for reasons which are equally applicable to nearly all other cities.
Some years ago marble was practically the only material used for monumental
purposes, but at the present time 85 per cent. of this work is of granite. The
demand for monumental granite work last year showed an increase over 1912,
but the use of granite for building, paving, and curbing purposes has gradually
declined. The use of concrete and terra cotta for building purposes and of concrete for paving and curbs has nearly devitalized this end of the granite business.
The use of marble for exterior building purposes has also declined to an appreciable extent, but its use in interiors has increased in recent years. Domestic
marble is being used more extensively, though a portion of the product for
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INDUSTRIAL SURVEY OF BALTIMORE
49
interior purposes still comes from Italy. Indiana limestone has largely displaced marble in the construction of bases for certain classes of buildings.
Granite in its finished state can be purchased more cheaply at the source
of production than the rough slabs can be cut and finished in the local yards.
Marble, however, is not finished at the quarries to the extent that granite is,
because the demands for variation and individuality require its local fabrication.
UMBRELLAS AND PARASOLS
Baltimore ranks third among the industrial centres of the country in the
production of umbrellas and parasols, Lancaster, Pa., being first and New York
second.
The local business has shown a satisfactory growth during the past four years,
and it is the concensus of opinion among local manufacturers that this city will
occupy first place within the next few years. For some years following the inception of the industry here, the patronage came largely from the South, but now
the distribution of the product is country wide, no particular section taking a
greater proportionate share of the output than another. There are very few
cheap umbrellas and parasols made here, medium and high grade wares predominating, which accounts in a measure for the small amount of local jobbing
patronage enjoyed by the Baltimore manufacturers.
The frame material is secured from Philadelphia and Newark, N. J., silk
from Patterson, N. J. and abroad, and cotton coverings from New England.
Handles are bought from manufacturers in New York, Philadelphia and Lancaster, Pa., with the exception of a few of the silver variety, which are manufactured locally. Reports from the trade indicate that the demand for umbrella
and cane handles would justify their manufacture here. No canes are made
in Baltimore.
No jobbers in Baltimore specialize in umbrellas, parasols, and canes, handling
them in conjunction with other wares. In higher grades the business does not
lend itself to jobbing, due to the changes in style and the demands of fashion.
The industry being of comparatively recent origin, New York and Philadelphia enjoy the advantage of long established custom of buying these wares in
those markets. Baltimore is also laboring under the handicap of scant supply
of expert labor. It is asserted that a larger output would result if trained help
could be readily secured.
STRAW HATS
For more than a generation Baltimore has led the country in both amount
and factory value of product in this industry,and at the present time the quality
of hats produced here cannot be surpassed. The business has shown a remarkably healthy growth during recent years.
Manufacturers sell their product freely over the country and also find a
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Federal Reserve Bank of St. Louis
50
INDUSTRIAL SURVEY OF BALTIMORE
considerable market in Canada. Some years ago the trend of the consumption
was South, but it has now become nation-wide. Only a very small percentage of
the product is sold under the manufacturers' brands, the tips bearing jobbers'
or retailers' names.
During the busy season the supply of skilled labor has not always been
adequate, but teaching has been resorted to, with the result that labor conditions
are becoming more normal. The withdrawal of one concern has had a tendency
to relieve the labor situation, but local concerns are fast absorbing the surplus.
About 60 per cent. of the employees are female, of whom 80 per cent. are skilled.
Most of the sweat bands come from Philadelphia, where they are produced
to supply the demand of the felt hat industry. Silk bands can be imported
at a considerable saving. Cotton net for linings was imported up to a
few years ago, but is now being purchased in this country.
The jobbing trade is not extensively catered to because the demand is
largely for lower grade hats than are made here.
MISCELLANEOUS
Baltimore ranks first among the cities of the country in the amount of copper
smelted and rolled, sending the product to all markets of the world. The local
consumption is comparatively small. There are nine coppersmith establishments in this city, four of whom cater to the ship or marine trade, and the remainder to the brewing and distilling interests. 85 per cent. of the local demand
is supplied by the above concerns, and 60 per cent. of the copper used is purchased in this market. These concerns make but a very little of the copper
tubing, purchasing 40 per cent. of a Baltimore manufacturer.
Three concerns are engaged in the manufacture of chewing gum, two of
them making chicle gum. About 10 per cent. of the gum consumed locally is
made by home manufacturers, which takes 5 per cent. of their output; 50 per
cent. goes to the South, and 45 per cent. is distributed in the territory east of
the Mississippi River. The product is disposed of chiefly to jobbers, only 20
per cent. being sold to retailers direct. New York and Chicago are strong competitors for the local business, supplying the remainder of the consumption.
Chicle is imported from Mexico. Wrappers, carton containers and shipping
boxes are obtained locally.
One concern manufactures clasps and buckles for trousers, steel buttons, and
snap fasteners for gloves and pocket books. Practically the entire local demand
is supplied by this manufacturer through jobbers, being equal to 5 per cent. of
the production. 95 per cent. is disposed of in principal trade centres. Steel
and brass used are obtained from the Pittsburgh district and Connecticut,respectively.
Of three concerns manufacturing toys and games, one makes toy horses,
another game boards, and the third a line of parlor pool tables and collapsible
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51
kites. 20 per cent. of the product is sold locally, taking care of 15 per cent, of the
demand. 80 per cent. of these manufactures is sold throughout the country.
One concern makes soda fountains and fixtures. 60 per cent. of the local
consumption is supplied, which is equivalent to two-thirds of the output, the
other third being distributed in the eastern section of the country. Chicago,
Philadelphia, and Boston firms supply the remainder of the local demand. Marble is purchased of local jobbers and metal parts are all made by the concern
itself, which also does its own silver and nickel plating.
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Federal Reserve Bank of St. Louis
STATEMENT No. 3
VALUE OF MERCHANDISE DISPOSED OF THROUGH RETAIL MERCHANTS
REFERENCE No.
CALENDAR YEAR ENDING DECEMBER 31, 1913
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
PURCHASES—In Per Cent
NUMBER
CHARACTER OF ESTABLISHMENT
OF
TOTAL SALES
LOCAL
OUTSIDE
ARTICLES BOUGHT IN BALTIMORE
REMARKS
STORES
Mfg. Jobbers Mfg. Jobbers
Art Stores
Bakeries—Cakes and Crackers
Boots and Shoes
Candy and Confectionery
China, Glass, Tin, and Wooden Ware
Cigar Stores
Clothing Stores
Drug Stores
Dry Goods and Notions
Feed Stores
Fur Goods
Furniture Stores
Gents' Furnishings
Grocery Stores
Hardware
Hats and Caps
Jewelry and Optical Goods
Ladies' Apparel
Leather Goods—Saddlery
Lighting Fixtures
Machinery and Supplies
Meat Stores
Millinery and Lace Goods
Paints, Oil, and Glass
Pianos and Musical Instruments
Plumbing Establishments
Sporting Goods
Stationery and Books
Stoves and Appliances
Teas, Coffee, and Spices..
Wall Paper
Miscellaneous:
Rubber Goods
Photographic Materials
Oriental Specialties
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Federal Reserve Bank of St. Louis
Total and Average
18
412
216
175
8
514
124
347
167
94
10
89
96
1,500
92
48
40
51
41
11
6
122
65
100
17
400
8
14
16
35
29
$
355,119
5,433,528
5,042,851
2,195,960
801,246
5,411,238
10,588,245
4,501,222
9,328,244
3,760,356
951,587
10,572,075
5,420,097
9,211,148
3,219,456
2,109,081
4,751,203
14,972,798
681,482
436,236
481,258
17,404,000
5,966,904
2,680,947
1,221,453
2,611,139
955,307
745,116
541,234
4,502,108
589,234
3%
90%
5%
60%
16%
30%
25%
20%
1%
2%
20%
10%
3%
25%
1%
10%
10%
50%
5%
47%
1%
22%
20%
15%
2%
1%
50%
2%
1%
5%
24%
23%
28%
65%
10%
30%
9%
60%
75%
2%
58%
17%
40%
4%
40%
25%
60%
21%
3%
13%
72%
1%
10%
30%
35%
50%
70%
60%
70%
10%
83%
70%
20%
40%
30%
23%
20%
Picture frames from manufacturers. Glass from jobbers.
Buy practically everything here.
Women's and children's shoes from manufacturers. Men's shoes from jobbers.
General line from manufacturers. Box goods from jobbers.
Crockery, tin and enameled ware from manufacturers. China and wooden ware from jobbers.
Cigars from manufacturers. General line from jobbers.
Men's clothing from manufacturers. Boys' clothing from jobbers.
General lines except specific chemicals from manufacturers and jobbers.
Domestic and general line of notions, woolen goods, silks, and linings from jobbers.
General lines.
Cheap fur sets, mainly children's.
Mattresses, springs, and upholstered furniture from manufacturers. Brass and enameled beds from jobbers.
Neckwear and underwear from manufacturers. Hosiery, knit underwear, and collars from jobbers.
General lines.
General lines.
Straw hats, stiff and soft felt hats, and caps from manufacturers and jobbers.
Lenses mainly from manufacturers, cheap jewelry from jobbers.
Cheap and medium priced suits and skirts, waists and muslin underwear.
Harness and saddlery from manufacturers. Traveling requisites and fancy articles from jobbers.
General line from manufacturers. Patented and special articles from jobbers.
Bolts, nuts, and belting from manufacturers. Pick-ups and rubber fittings from jobbers.
General line of meats and provisions.
Hats and trimmings, flowers and foliage.
Ready mixed paints, colors in oil, and varnish from manufacturers. Glass, turpentine, and oil from jobbers.
Pianos, guitars, mandolins, and violins from manufacturers.
Enameled ware and lead traps from manufacturers. General lines from jobbers.
Dog collars and fishing tackle from manufacturers. Tennis shoes and shot from jobbers.
General line office supplies and a little stationery from jobbers.
Coal and gas ranges and hot air furnaces from manufacturers. Other furnaces from jobbers.
Spices from manufacturers. Teas and coffee from jobbers.
General line.
Rubber shoes and general line except raincoats from jobbers.
Acetic acid and sulphide of soda from manufacturers. Photo paper and pick-ups from jobbers.
Laces and hand-made art embroideries from manufacturers. Bric-a-brac from jobbers.
15%
15%
65%
15%
5%
6%
4%
30%
40%
15%
53%
15%
8%
25%
50%
40%
20%
60%
65%
78%
50%
40%
10%
65%
16%
1%
25%
25%
30%
40%
73%
15%
35%
12%
25%
5%
15%
36%
20%
15%
14%
10%
10%
3%
14%
19%
6
8
13
581,689
241,604
534,897
1%
2%
50%
9%
13%
45%
80%
70%
5%
10%
15%
4,892
$138,800,062
19%
27%
36%
18%
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RETAIL STORES
The retail stores of Baltimore and vicinity were systematically canvassed
to ascertain (1) the volume of business transacted in 1913 (provision having been
made for enumeration of various wares dealt in), (2) what proportion of this
merchandise was purchased locally and out of the city, respectively, either from
jobbers or manufacturers, and (3) specific reasons for the future guidance of the
wholesale trade as to why more of this business could not be diverted to local
channels.
DEPARTMENT STORES—Owners and managers, in their general instructions
to buyers of the various departments, have always included a strong recommendation that Baltimore manufacturers be given the preference where no advantage
is apparent in purchasing out of the city. In practice, however, many of the
buyers do not always heed this suggestion owing to the extenuating circumstances
cited below surrounding their employment. Since buyers are not trained here
they must of necessity be procured from other cities, principally New York
and Philadelphia; as a result they have but a limited knowledge of the local
industrial situation, and consequently show a preference to trade in markets with
which they are thoroughly familiar.
The apparent attitude assumed by the local manufacturers, that inasmuch
as they are located in Baltimore they should receive first consideration, has
resulted in a policy which lacks enterprise, initiative, and persistency, so far as
soliciting the department store trade is concerned, and is not on a par with the
progressive methods of other cities. If Baltimore manufacturers will study the
needs of department stores and produce the kind and quality of wares required,
they will experience no difficulty in competing with outside manufacturers for
a larger share of this patronage.
The following corroborated comments, which form the concensus of opinion
of the retail merchants co-operating with the Industrial Survey, are given
verbatim without any investigation as to their authenticity, this feature being
left solely to the trade affected to affirm or disapprove.
The inference to be drawn, however, from the mass of information secured
is that the retail merchants as a class are not reliably informed with respect
to, or conversant with, the local industries manufacturing the wares traded in
respectively by them, to venture a statement of sufficient weight to merit more
than casual consideration.
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INDUSTRIAL SURVEY OF BALTIMORE
ART STORES—Local manufacturers secure 25 per cent. of the requirements in frames, largely in cheaper grades. Mat board is procured in Philadelphia and bric-a-brac is mostly imported. Etchings, engravings, oil and water
color paintings are not produced in Baltimore to any extent.
BAKERIES--Cake and Crackers—The articles of consumption supplied
by outside manufacturers and jobbers consist largely of food products put up
in cartons under well-known brands.
BOOTS and SHOES—Shoe stores may be divided into three groups:
Exclusive dealers purchasing their wares in the open market; factory-controlled
stores handling one particular make of shoes; and shoe departments of large
department stores.
The local patronage comes almost entirely from the first group and is mainly
in women's shoes of a high grade. Children's and infants' shoes are purchased
locally only to the extent of 5 per cent. Department stores as a general rule
confine their purchases to ladies' shoes that are nationally advertised.
TRADE COMMENTS:
Offer better terms.
Carry larger stocks of novelties.
Outside
Carry full lines of merchandise greater part of season, affordManufacturers
ing retailer an opportunity to fill in.
Make better goods for same price.
Style of shoes better.
Baltimore firms canvass the trade. Retail merchants are compelled to buy
higher grades in men's and boys' shoes from Boston, as there are no factories
here making them. Baltimore jobbers and manufacturers are afraid to carry
a little surplus stock over.
CANDY and CONFECTIONERY—Retail stores may be grouped as those
having exclusive candy shops (embracing the market stalls) which make practically all the candy they sell; drug and department stores, selling candy largely
in boxes: and grocery, cigar, and notion stores selling mainly penny goods.
Seventy-five per cent. of the candy consumed is manufactured here, the
remaining 25 per cent. being box goods secured from outside manufacturers who
enjoy a national reputation, and some very cheap grades of candy secured principally from New York.
CHINA,GLASS,TIN and WOODEN WARE—Household Specialties—
Local manufacturers are securing a fair share of this business, so far as their
limited lines will permit.
CIGAR STORES—Local manufacturers and jobbers are getting a large
share of this business.
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INDUSTRIAL SURVEY OF BALTIMORE
55
CLOTHING STORES—Local manufacturers secure a fair share of patronage on high and medium grade garments, New York controlling the trade on
cheap clothing. In boys' clothing, however, retail merchants purchase only a
small amount of their requirements locally, as no variety is made here. Boys'
suits and overcoats are bought in New York and Boston in equal quantities, and
wash suits are purchased in New York almost exclusively.
TRADE COMMENTS:
Purchase children's clothing in New York because there is only a small
amount made in our city.
DRUG STORES—While most of the drug stores are conducted on independent lines, about one-fifth have united for the purpose of purchasing their
wares to advantage, and there are several other groups conducted under one
management, which in no case includes more than three establishments.
Local manufacturers secure the preference on standard medicinal preparations, and jobbers on toilet articles, chemical and proprietary preparations,
patent medicines, and rubber goods.
Candy, cigars, tobacco, soda, and miscellaneous articles, which constitute
one-third of the business, are purchased largely of local jobbers and outside
manufacturers and jobbers.
DRY GOODS and NOTIONS—Local jobbers secure the principal business of small neighborhood dry goods and notion stores. The more pretentious
establishments (other than large department stores) located in the business
sections, also buy largely of jobbers, but are periodically solicited by salesmen of
New York and Philadelphia jobbers.
FEED STORES—Small retailers show a preference to trade with the local
jobbers where no advantage is apparent in purchasing out of the city. Some of
the larger retailers, however, purchase their supplies direct in carload lots.
FUR GOODS—
TRADE COMMENTS:
There are no local manufacturers worthy of consideration and if any start
they are handicapped by lack of skilled workmen in this locality.
As a rule they are speculators in the skin market and their business is subject
to all the vicissitudes of speculative markets in which skins may fluctuate as much
as 75 per cent.
Only inferior grades of skins can be bought here from farmers of the South.
No mechanics and labor peculiar to this trade are to be had in the city.
FURNITURE STORES—The stock of a typical furniture store may be
apportioned as follows: Furniture, upholstered and plain, 60 per cent.; floor
coverings and draperies, 30 per cent.; mattresses, springs, and metallic beds, 8
per cent; and crockery and pottery, 2 per cent. Local manufacturers secure onethird of the local patronage on upholstered furniture and 25 per cent. on leather
furniture, with a small percentage on plain furniture, collectively equivalent to
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INDUSTRIAL SURVEY OF BALTIMORE
56
10 per cent. of the total requirements; Michigan, Illinois, and New York supply
the remainder of consumption of high and medium grades, and North and South
Carolina the cheap and low grades. Dealers carry only samples of mattresses
and a small stock of springs, Baltimore manufacturers taking care of 90 per cent.
of the requirements. No floor coverings or draperies are made here, but are
purchased largely from the mills direct or through New York jobbers, local
jobbers securing only a small share of this patronage. All refrigerators are
shipped in; brass and enameled beds are secured from selling agencies of outside
manufacturers.
TRADE COMMENTS:
There should be a larger variety of designs.
Only two or three manufacturers in Baltimore make kind of furniture
needed.
Goods shipped in principally of a higher grade and we have no manufacturers making similar wares.
No factories make carpets, lace curtains, or portieres.
No expensive china made here.
Local houses canvass trade thoroughly, but local jobbers handling side lines
such as blankets, comforts, spreads, lace curtains, portieres, cheese cloth, etc.,
seldom ever canvass the furniture trade.
We lack variety of patterns and number of manufacturers.
All out-of-town goods are sold f. o. b. Baltimore.
No manufacturers in this city of any importance.
Local manufacturers make medium and low grades only; must go elsewhere
for better grades.
GENTS' FURNISHINGS—The retail stores may be designated as those
handling gents' furnishings exclusively, in conjunction with clothing, and neighborhood shops. A typical stock consists of one-third shirts and collars, an equal
amount of underwear and hosiery, the remainder of neckwear, gloves, garters,
jewelry, robes, handkerchiefs, belts, pajamas, night shirts, canes, umbrellas, etc.
Purchases of Baltimore manufacturers consist largely of neckwear and medium
grades of summer underwear, and a few cheap shirts.
TRADE COMMENTS:
Show a larger assortment.
Do more advertising.
Have more varied lines and better values.
Have a new leader which our Baltimore manufacturers do
not take advantage of.
Outside
Manufacturers Have goods not manufactured here,such as shirts and collars.
Have a grade of goods not made here.
Give better values in shirts and seem to know what we want.
Also have larger assortments.
Specialize strongly on price.
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INDUSTRIAL SURVEY OF BALTIMORE
57
In some lines, such as suspenders, we have no first-class manufacturer
in the city.
If some of our local houses would be a little more alive and assume the
initiative, they would reap a great deal of benefit.
There is very little canvassing among the small retailers.
Jobbers should carry larger stocks.
Local firms don't make any effort to get the business and besides they
don't have the goods out-of-town houses have.
Hosiery and knit goods we buy from the mills in large quantities at a
lower price.
The Baltimore jobbers seem to canvass the local trade after the New York
houses have gotten all the orders.
The local jobbers do not seem to put themselves in competition with New
York jobbers.
We have goods ordered from two to three months before the local jobbers
canvass us.
GROCERS—With the possible exception of coffee, tea and sugar stores,
and a small group of grocery stores conducted under one management Baltimore
is free from the chain-store system of dispensing groceries to the consumer.
Twenty-five per cent. of the groceries retailed are purchased through jobbers,
of local manufacturers, and consist largely of canned foods.
TRADE COMMENTS:
Local jobbers and manufacturers' agents do not carry sufficiently large
stocks to make prompt deliveries.
There is sufficient demand in Baltimore and adjacent territory to warrant
the establishment of a condensed milk factory. There is also room for a paper
bag factory to make special qualities and sizes of paper bags which the one local
concern does not supply.
HARDWARE STORES—The only items made in this city which go to
make up a retailer's stock of hardware are sash weights, door hangers, and tacks.
Most of the large retailers purchase their supplies from outside manufacturers
direct, excepting wire and cut nails, bars, and shapes, which are bought generally
from Baltimore jobbers. Small retailers purchase practically everything of
local jobbers.
TRADE COMMENTS:
Have the goods.
Canvass the trade more thoroughly.
Outside
Make better terms.
Manufacturers
Advertise more extensively.
Have price and variety.
Local people do not canvass trade.
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INDUSTRIAL SURVEY OF BALTIMORE
Prefer to deal with Baltimore jobbers but cannot do so exclusively, as they
do not carry the stocks.
Local people are too conservative.
Local firms do not give a spot cash buyer a better price than the time man.
Should adopt spot cash catalogue system.
Practically no hardware manufactured in Baltimore. Iron bolts, tacks, and
a popular make of door hangers sum it up.
Buy from outside manufacturers instead of local jobbers from motives of
economy only.
In some cases outside jobbers buy goods of our manufacturers and sell them
here cheaper than they are offered locally.
HATS and CAPS—Local manufacturers and jobbers are getting a good
share of this business, especially in straw hats. Local purchases of stiff and soft
felt hats are necessarily confined to one manufacturer. Manufacturers of caps in
medium grades also secure a fair share of the local patronage.
Philadelphia and Connecticut points supply about 85 per cent. of the local
requirements of felt hats.
JEWELRY and OPTICAL GOODS—
TRADE COMMENTS:
Manufacturing not developed to a point to command the confidence of the
trade.
Baltimore jobbers canvass the trade.
Retail jeweler is compelled to buy from jobbers,as he cannot buy from manufacturers direct.
There is no jewelry manufactured in Baltimore to sell to the retail jeweler
except what is sold by manufacturers to consumers direct.
Some years ago several factories which made gold rings and sold them largely
in the South and West moved to New York to be nearer to the jewelry centre of
the United States.
We do not have any manufacturing jewelers of note.
We do not have a single jewelry manufacturer that can supply the goods
the average jeweler sells.
We have one good manufacturer of optical goods and there is room for others.
There is not one manufacturer in Baltimore that produces plain silverware
to sell direct to the retail jeweler.
No clocks of any consequence are made in Baltimore.
No exclusive jewelry manufacturer in Baltimore to canvass the jewelry trade.
LADIES APPAREL—
TRADE COMMENTS:
Have larger and better selections and designs.
Outside
Have higher grade at same price.
Manufacturers Possess snap and style—lacking in Baltimore.
Offer better terms.
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INDUSTRIAL SURVEY OF BALTIMORE
59
Local firms canvass the trade to a certain degree only, which covers their
limited lines.
It seems that our Baltimore manufacturing concerns cater more for cross
roads' trade in the Southern states in our line, because competition does not seem
to be so keen, and hence they secure better prices than in our city.
Principal amount of goods that we carry cannot be bought in Baltimore.
Variety and assortment of styles are scarce here.
They are not alert.
There is no doubt we could buy more goods from local people if we were
aware of the merchandise they carry.
LEATHER GOODS and SADDLERY—
TRADE COMMENTS:
Sell harness for less money than Baltimore manufacturers.
Outside
Sell harness of better grade, with considerable saving in
Manufacturers
price, freight and handling charges added.
Pay freight charges on trunks, bags, etc.
No pocket books made here.
As to trunks, there are no large factories here.
Do not know why Baltimore manufacturers cannot compete with outside
concerns, but they do not.
Do not canvass city trade.
A probable reason why Baltimore jobbers and manufacturers in harness
and saddlery do not canvass city trade is that they also sell at retail. The trade
have to buy their goods sufficiently low to compete with them.
LIGHTING FIXTURES—Manufacturers maintain retail establishments in
which they sell goods of their own manufacture in conjunction with patented
articles purchased in other markets.
MACHINERY and SUPPLIES—Many of the jobbers sell also at retail.
MEAT STORES—This classification includes meats and provisions disposed of collectively by retail butchers and local sales reported by manufacturers and jobbers.
MILLINERY and LACE GOODS—The trade may be divided into three
classes: Exclusive milliners who handle only high grade wares and import most
of their goods; millinery departments of large department stores; and small
neighborhood millinery stores. The department stores purchase about 5 per
cent, of feathers, flowers, velvets, and ribbons from manufacturers and jobbers
here. Neighborhood milliners purchase practically their entire requirements
from local jobbers.
TRADE COMMENTS:
Outside
Manufacturers
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Sell cheaper for same grade.
Have greater variety to choose from.
Have novelties and new ideas, being ahead of our jobbers,
who are too conservative.
INDUSTRIAL SURVEY OF BALTIMORE
60
New York is better advertised.
Local wholesalers canvass the trade thoroughly.
PAINTS, OILS and GLASS—Paint stores as a rule handle hardware and
cutlery either in conjunction or as half of their business. 80 per cent. of the
ready mixed paints sold by retail stores is purchased of Baltimore manufacturers.
Jobbers secure the requirements of dry colors, varnishes, stains, fillers, turpentine
and linseed oil. 50 per cent. of the paint, varnish, and other brushes are purchased of local manufacturers, with a small percentage from local jobbers.
TRADE COMMENTS:
Offer very attractive inducements to merchants.
Show courtesy, offer long terms, drum constantly, and have
odd goods.
Make a specialty of certain preparations and spare no exOutside
pense in advertising same in all the magazines, flooding
Manufacturers
the merchants with expensive literature and making
live demonstrations to place these preparations before
the public, thereby creating a demand for their wares.
Lack of visitation to the trade on the part of local firms; there seems to be
no interest.
They do canvass but they have not got the price.
Products of similar kind are as good here but outsiders manufacture
specialties.
They do canvass the trade, except on specialties not made here, which we
have to buy direct from the manufacturer.
PIANOS and MUSICAL INSTRUMENTS—The local manufacturers
secure a fair share of the local business. The manufacture of musical instruments
other than pianos has not been extensively developed in Baltimore.
PLUMBING ESTABLISHMENTS—Steam and hot water furnaces,
heaters, and boilers are purchased from selling agencies of outside manufacturers
or direct. In other wares local jobbers control the situation.
SPORTING GOODS—Outside manufacturers and jobbers secure the
bulk of this business. About 7 per cent. of the local trade is supplied by Baltimore jobbers, who handle this line to a limited extent only in conjunction with
other wares. Baltimore manufacturers secure the trade on dog collars, leads,
sweaters,harness,baskets and crates,which are admitted to be of as good quality
as found in any market.
TRADE COMMENTS:
Baltimore needs an exclusive jobber of sporting goods, as there is ample
opportunity to not only supply part of the local demand,which is now taken care
of as an entirety by New York jobbers, but secure a portion of the near-by and
southern patronage.
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STATIONERY and BOOKS—Of the fourteen stationers, two may be
termed society stationers. Four of these also handle office furniture of wood, and
steel files, on a large scale. Stocks of commercial stationery stores are represented 40 per cent. by files and office furniture, none of which is made in Baltimore; 30 per cent. loose-leaf books and devices, purchased largely in New York;
10 per cent. leather goods and novelties, purchased in New York and Philadelphia; 10 per cent. pencils, pens, fountain pens, inks, mucilage, stationery hardware, and glassware; 10 per cent. paper, envelopes, and miscellaneous articles.
Local jobbers enjoy a fair patronage on paper, and the one manufacturer on
envelopes. Most of the stationers are equipped to do printing also.
TRADE COMMENTS:
Get the business—expense minimized by quantity.
Outside
Offer better terms.
Manufacturers
Advertise more extensively.
Local firms lack energy and are too conservative. There is no publishing
house of any consequence in Baltimore.
STOVES and APPLIANCES—The retail coal stove business has suffered a
considerable decline in the last ten years, as a consequence of which the number
of stores has been commensurately reduced. This is attributed to the"Latrobe
"
and other makes of heating stoves (which were in demand some years ago)
having been replaced by furnaces handled by plumbers rather than by retail
stove dealers, and the substitution of gas for coal ranges in homes.
Retail dealers purchase 50 per cent. of their requirements of local concerns,
securing the remainder from New York and Pennsylvania foundries. Through
this arrangement they are enabled to carry a larger assortment and in specific
cases secure the exclusive agency of outside manufacturers.
TEAS, COFFEE and SPICES—Stores making a specialty of these food
products are operated under the chain system. One or two exceptions were
noted in the canvass of the trade.
WALL PAPER—
TRADE COMMENTS:
No factory in Baltimore.
Outsiders sell on more advantageous terms than jobbers.
MISCELLANEOUS—Includes stores handling photographic materials,
Oriental silks and laces, rubber goods of all descriptions, gloves, etc.
TRADE COMMENTS:
Photographic Materials—Only two manufacturers of complete line in
United States. These two firms make four-fifths of the film and photo materials
used in the world.
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COMMISSION BUSINESS
Commission merchants dealing exclusively in perishable foodstuffs may be
commercially distinguished, in order of their importance, as those trading in
(1)domestic fruits and produce,(2) butter, eggs and poultry,(3)citrus, deciduous
and other fruits, (4) bananas, and (5) game, fish and crabs.
The business done by commission merchants of the first class is an item of
considerable magnitude in the commerce of Baltimore. Collectively there are
135 firms and individuals engaged in the wholesale trade whose sales for 1913
totalled $24,986,112, of which 25 per cent. was sold locally and 75 per cent.
shipped to points in Virginia, West Virginia, Pennsylvania, New York, Ohio and
Canada. Territory adjacent to Baltimore—which includes the Eastern Shore
of Maryland—supplied 60 per cent. of the produce traded in, and Southern
states furnished the early season's demand, which was equivalent to 40 per cent.
Domestic fruits grown within a narrow radius of Baltimore constituted 75 per
cent, of the amount handled, Georgia having furnished the greater portion of the
remainder.
Butter, eggs and poultry are dealt in by twenty-eight firms, a number of
them specializing in butter and eggs, or in poultry; others also handling cheese in
conjunction. The business reported amounts in the aggregate to $8,551,264,
75 per cent. of the products being disposed of in Baltimore and territory immediately adjacent thereto, the other 25 per cent. being shipped largely to New York
City and Philadelphia. The source of supply has a wide range, extending from
Chicago to the Atlantic Coast.
Deciduous and citrus fruits from California and the Northwest are extensively dealt in locally, as are also citrus, but not deciduous, fruits from Florida.
The following table gives the principal sources of supply and the value of deciduous, citrus and other fruits sold through eleven Baltimore dealers last year:
California—Deciduous and citrus
Florida—Citrus
Sicily—Lemons
Havana and Porto Rico—Pineapples
Jamaica—Cocoanuts
Total Sales
$930,000
700,000
550,000
225,000
300,000
Local Sales
$810,000
455,000
195,000
203,000
95,000
The range of territory in which these products are marketed includes Maryland, West Virginia, Pennsylvania, and District of Columbia for the first four
items; the Middle West and Southern states for the last item.
Particularly noteworthy is the fact that the sale of California fruits in 1913
predominated over the Florida products, which was due to the crops in the
latter state having suffered from severe frosts in the early spring.
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Baltimore has the reputation of being one of the principal banana importing
centres on the Atlantic Seaboard, and the three firms engaged solely in the trade
show aggregate sales for 1913 of $3,412,267, distributed about as follows: 25
per cent. locally, divided between jobbers and retailers; 75 per cent. to points
west as far as Chicago, north as far as Canada, and to the states of Virginia
and North Carolina.
The introduction of fast freight shipments in refrigerator cars from the
Atlantic Seaboard inland has appreciably curtailed the wholesale fish business of
Baltimore. The thirty-one firms engaged in the trade report aggregate sales for
the year 1913 of $1,847,989, distribution having been 50 per cent. local and 50
per cent. to points of the Middle West. Crabs represented 20 per cent. of the
volume of business done. Diamond-back terrapins, the money value of which
heretofore was considerable, have almost entirely disappeared from the waters
of the Chesapeake Bay and constituted only 1 per cent. of the total sales. 75
per cent. of the products handled are shipped in by water, and 25 per cent. by
rail from points along the Atlantic Coast from Maine to Florida and from the
Great Lakes.
Almost every branch of the commission business is showing a uniformly
steady and healthy growth from year to year. The number of firms also is
increasing with the result that new markets are continually being developed.
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THE PORT OF BALTIMORE
No effort was directed toward ascertaining the Exports and Imports
through Baltimore, as statistical information of this character is periodically
compiled under the supervision of the Government. A semi-official inquiry
was likewise inaugurated by the United States Engineer's Office to determine the
water-borne traffic of the Chesapeake Bay, the result of which is also a matter
of public record.
However, it is not amiss in this connection to mention the activities of the
Baltimore Chamber of Commerce as relating specifically to the industrial development of Baltimore. Ninety-five per cent of the grain, hay and other agricultural products exported, consumed locally, and distributed in the territory
adjacent to Baltimore, is purchased of and through members of the Chamber
of Commerce. The interests represented in the Chamber of Commerce likewise
practically uphold the regular sailings of the several ocean lines from Baltimore
and in addition, are responsible for bringing here a large fleet of tramp steamers,
thus not only noticeably increasing our foreign commerce, but resulting in
annual disbursements of ocean lines for labor, fuel and supplies conservatively
estimated at about $1,000,000.
The following comparative tabulation displays the activities of the Chamber
of Commerce for the calendar years 1911, 1912 and 1913:
RECEIPTS OF GRAIN FOR THE FOLLOWING YEARS.
Year,
1913_. ._
1912__ ._
1911_ ._
Wheat
bus.
I
Corn
bus,
Oats
bus.
Barley
bus.
Rye
bus.
28,469,370 21,308,087 5,791,129 1,580,657
12,488,385 13,197,593 17,481,271 579,588
11,088,586 14,482,742 3.l70.477 666 258
I
'
150,572
197,867
30,487
Malt
bus.
Clover and
Timothy
Seed
bus.
Total
bus.
800,525 -------58.100,340
678,989
66,408 44,600,201
636,221
41,728 30,116,499
EXPORTS OF GRAIN FOR THE FOLLOWING YEARS.
Years
1913
1912
1911
Wheat
bus.
Corn
bus.
Oats
bus.
Rye
bus.
Barley
bus.
26,040,161
9,793,459
8,980,841
18,275,542
9,773,379
11,382,548
1,726,514
14,034,282
2,206
686,801
128,863
176,201
Clover and
Timothy
Seed
bus.
_
7,058
2,797
Total
bus.
46,857,881
33,784,379
20,358,392
While in specific items considerable fluctuation is noted, the total bushels
of all agricultural products dealt in show a gratifying increase, a condition which
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INDUSTRIAL SURVEY OF BALTIMORE
is attributed solely to the methods in vogue as regards weighing and inspection.
These departments have been established many years and they have the entire
confidence of the western grain shipper as well as the foreign buyer. The employees hold their positions through merit, some of them having attained a continuous service of upwards of thirty years, which insures to the western shipper
and foreign buyer equitable inspection and absolutely correct weights.
The export business of the Chamber of Commerce in 1913 yielded $40,000,000
of foreign exchange.
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HOUSING OF LABOR
Particularly noteworthy in connection with the local industrial situation is
the building and loan association feature, which has materially assisted deserving
workmen and laborers to acquire their own homes on a plan that does not subject
them to undue hardship. That advantage is being taken of the opportunity
thus afforded is evidenced by the large number of purchase money mortgages of
this character which are daily placed on record. Baltimore supports 450 building
and loan associations, some of which are conducted on strictly mutual plans and
are frequently referred to as "the poor man's friend."
The extensive development of this building and loan association plan has
resulted in making Baltimore a city of homes largely owned by their occupants,
a feature which is especially pronounced here, more so than in any other city
in the country. Of the 135,000 pieces of improved real estate in Baltimore,
90,000 are dwelling houses, 60 per cent. of the tenants of which own their homes
outright or are paying for them through building associations—a situation
peculiar to Baltimore and which far exceeds the average that obtains in other
cities.
The two-story brick house with marble steps characterizes recent construction, and the demand for this class of homes continues uniformly strong. The
prices range from $1,250 to $2,000, subject to a redeemable ground rent. The
usual cash payment exacted by the seller is from $100 to $250 and the building
association arranges for the remainder, to be repaid in weekly or monthly installments extending over a period of about seven or eight years. Cases are on record,
however, where industrious workmen whose habits and environment were ascertained to be above reproach, were able to take title to a home on a payment of
$25.00 cash, the subsequent weekly installments being based on the principal of
the mortgage. These installments are so arranged as to provide simultaneously
for partial liquidation of principal and payment of ground rent, insurance, taxes,
water rent, and in specific cases maintenance repairs.
The average building association loan is $800 and the number of loans made
by each association about 40 per annum, a total of 18,000 transactions, representing a monetary consideration of $14,400,000. The combined assets of these
associations are $48,000,000.
From a review of the domestic and economic conditions prevailing in Baltimore, the conclusion to be drawn is that the possibility for labor troubles is
far removed, and that strikes are not likely to occur in a city where a majority
of its wage earners have obligated themselves to pay stipulated amounts
weekly on homes in which they already own a large equity, as default in these
Payments would necessarily subject them to added distress, inconvenience and
financial loss.
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TAXATION
AND ITS RELATION TO INDUSTRIAL DEVELOPMENT
It has often been questioned, and with apparent propriety, whether entirely
too much stress has not been laid on the element of taxation in the exploitation
by communities of advantages and inducements to attract manufacturing enterprises.
Paramount and of more vital importance are the factors of:RAW MATERIAL
—proximity to and abundance of; TRANSPORTATION—rail and water;
MARKET—competition encountered and centre of distribution;LABOR—availability, character of, environment, social, domestic and economic conditions of
the community; CAPITAL REQUIREMENTS—banking facilities, cost of
site, building regulations, fire protection and insurance rates, cost of power
and fuel. In view of these important features, taxes are a secondary consideration, especially the taxes on tools, implements and machinery, which are relatively small compared with the amount of capital invested and the volume of
business transacted. In purely mercantile enterprises, the item of taxes assumes
greater importance.
As a concrete example of the insignificance from a successful manufacturers'
standpoint of tax exemption on tools, implements and machinery, for sake of
illustration, a corporation with a capital stock of $100,000, fully paid in, is considered. The plant is erected and equipped for manufacture. Tools, implements and machinery represent $40,000 of the aggregate cost, and on their depreciated value will be levied a state and city tax of approximately $750.00. A
prosperous corporation will not consider this an item of great importance in its
manufacturing costs, nor could an otherwise unsuccessful corporation continue
to exist solely on the elimination of this particular taxation feature. However,
to meet the popular clamor of business interests, a number of cities and states
have exempted tools, implements and machinery of manufacturers from taxation,
and Maryland by a recent act of legislature has been placed in their category.
Sites are not donated nor plants exempted from taxation for stated periods
by acts of municipalities or state governments, but an equivalent result is accomplished in specific cases through private interests assuming this burden, seeking
thereby to overcome other unfavorable features which must of necessity be offset
to make the proposition of location appear attractive. Baltimore business men
have not in the past and are not now required to resort to such extreme measures
to attract industries.
In order that a clear and concise construction may be had of the Tax Laws of
Maryland, the Survey has arranged to have the subject thoughtfully and exhaustively treated in subsequent pages.
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TAXATION IN MARYLAND
WITH A DISCUSSION OF THE CHANGES MADE IN 1914
ALLAN C. GIRDWOOD
Secretary of the State Tax Commission of Maryland
Probably no state within recent years has made as great advance in tax
legislation as has Maryland at the session of its legislature of 1914.
The policy of enacting laws heretofore has been one of patchwork legislation
rather than the creation of a well ordered system, with the result that our tax
laws have been in a rather chaotic condition regarding substantive provisions as
well as administrative rules. It is owing to the investigation and report of a
special commission on the revision of the taxation system (appointed by Governor
Goldsborough under the provisions of an act passed at the previous session) composed of a few of the leading citizens of the state, who were engaged in different
activities, and who unselfishly devoted their energies to the study, that much of
the remedial legislation is due.
Maryland has resorted for years to the imposition of a direct property tax
for state purposes, which has varied from 1.6 mills (or 16 cents on $100) to 3.2%
mills. "The State Tax," however, until the beginning of the extensive movement
of good roads, has always been levied for the special purposes of school maintenance and the payment of interest and sinking fund charges on state loans.
The rate as compared with that in many states was low, and the base on
which it was levied was small.
In 1890 the assessed valuation of real and personal property for state
purposes was $482,184,824; in 1910 this had been increased to $836,665,067.
The per capita assessment in 1890 was $462.74, and in 1910 it was $646.35. Of
the change in assessed valuation between these periods Baltimore City alone
added $235,585,434, while in the rest of the state the increase was $118,894,809.
The general governmental expenses of Maryland are paid from taxes derived
from indirect sources. The largest return from indirect sources is the tax on the
gross receipts of public service corporations, which amounts approximately to
one-sixth of the total revenue used for the expenses of the government, other than
interest and sinking fund requirements. Another large source of indirect
revenue return arises from the collateral inheritance tax, which is levied at the
rate of 5 per cent. on all estates over $500. There is no direct inheritance tax
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71
in Maryland, an effort to pass such an act being defeated in the last legislature.
Still another source of considerable state revenue is license charges which assume
many forms and are applied in various ways. Traders' licenses yield a considerable amount. These are based on the amount of stock in trade of persons or
corporations at the principal season of the year, the rates varying from $6 on
$300 (or less) of stock to $150 on $10,000 (or over). There has been some agitation against the traders' license on the plea that it has outlived its usefulness and
that the levy works a hardship against Maryland merchants in competition with
merchants of adjoining communities where there is no such charge. The charge
is small and it is doubtful if any particular harm results. It must be borne in
mind in this connection that the personal property of the merchant is also subject
to assessment. Book accounts, however, are exempt.
The assessment of real and personal property throughout the state, other
than that located in Baltimore, has heretofore been regulated more or less by the
legislature. There has been no systematic re-valuation of property nor central
agency to supervise the re-assessments. General re-assessments have been
brought about only by special acts passed at irregular intervals and then only
after conditions had become intolerable. That the legislature has not been awake
to the wisdom of a regular, periodical and frequent re-adjustment will appear from
the statement that in the last one hundred years there have been but five general
re-assessments throughout the state. Between these re-assessments the local
governing bodies in the counties, though vested with the general power to change
assessments, have failed to exercise this power. Such changes as have been
made consist only of the addition of new improvements and of some newly
acquired personal property. On the other hand the power to reduce assessments
has been liberally exercised.
The unit of local government in Maryland is the board of county commissioners. In some counties the incorporated towns, all of which have special charters,
have an elaborate system of local self-government with the power to re-assess the
property within their limits, for municipal purposes only. This has given rise
to the objectionable system of dual assessments.
Until 1878 the shares of domestic corporations were assessed locally and it
was only after the establishment of the office of State Tax Commissioner in that
year that the shares of such corporations were made subject to assessment by a
central agency, upon which assessment the local taxes were levied against the
holders of the shares at the respective localities of their residence. The corporation was required to pay these taxes for the shareholders. The powers of the
State Tax Commissioner remained practically the same from that date, and the
duties of the office in respect to the general assessment and equalization of other
Property in the state were merely of a perfunctory character.
The creation of the present State Tax Commission by Chapter 841 of the
Acts of 1914, following the example of a large number of progressive states, gives
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INDUSTRIAL SURVEY OF BALTIMORE
It
Maryland the opportunity to improve the administration of its tax laws.
advice, from time to time,
will also give to the legislature the benefit of expert
as to changes needed in the tax laws.
The subject of taxation is now receiving more attention than ever before.
s and
This has been brought about by the demand everywhere for greater facilitie
ents as roads, sanitation, health, and for the reguimprovements in such departm
ed expenlation of public service corporations. All these activities require increas
ditures of the public funds.
Professor Charles J. Bullock of Harvard University has written an article
of New York,
on the alarming aspect of the increase in the tax rate of the City
other communities. This writer
which is applicable to similar tendencies in
finds no relief which the future can offer.
The act creating the State Tax Commission of Maryland vests in the Commission, besides all the functions heretofore exercised by the State Tax Commis
sory power over local assessments of real and personal
sioner, a general supervi
property throughout the state. It is far-reaching in the administrative functions which it confers upon the Commission, which includes also co-operation
of the
with other state officers. A close observation demonstrates that many
Maryland are attributable to a lack of co-operation among
ills of government in
taxation
the different departments. As long as a low state tax rate prevailed,
, but with increased and increasing appropriations, this
was a less serious problem
ent of the
problem has become more or less acute. The hope of a proper adjustm
State Tax Commission.
public burdens now lies in the
The principal tax provisions of Maryland are contained in Article 81 of the
in an article of
Code of Public Civil Laws. It would be impossible to set forth
which have been
reasonable length, all the features of our system, the changes
l
or should be made, and the details of recent legislation. Only the principa
changes, therefore, are referred to.
Up to 1914 all domestic corporations (except steam railroad companies)
were assessed on their shares. The tax on the net assessed value of the shares
s
was imposed for state purposes at the regular state rate, and for local purpose
rates prevailing at the residences of the shareholders. Foreign
at the varying local
corporations (in addition to being required to pay a registration fee to the Secrefor every $50,000 of
tary of State) are subject to an annual franchise tax of $25
the state up to $500,000, and with graduated rates beyond
capital employed in
y
e
that amount. They are also required to pay a tax on their tangibl propert
manner as applies to individuals.
within the state in the same
At the last session of the legislature an act was passed (Chapter 324) under
ed
which the shares of domestic "ordinary business corporations are exempt from
State Tax Commission
taxation, and such corporations are to be assessed by the
s
directly on their taxable assets. This is a reform for which the business interest
ed that
of the state have been striving for several years, but it is to be regrett
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county domination of the legislature was able to insert in the act a provision
under which the local tax on the personal property of such corporations is not to
be paid to the locality where the property is situated and receives protection,
but is to be divided among the communities where the shareholders reside, in
the proportion of their holdings.
Besides this tax on personal property, domestic business corporations are
required to pay annually a franchise tax in an amount of $10 on the outstanding
capital stock, provided the capital does not exceed $5,000. Where such stock is
over $5,000, an additional tax of $1 for every $1,000 up to $50,000 of capital is
imposed; and for each additional $50,000 the rate is $25 up to $500,000. Over
$500,000 and up to $5,000,000 the rate is $250 for each $1,000,000; and in excess
of $5,000,000 it is $100 for each additional $1,000,000.
Ordinary business corporations are defined in the act as follows:
All corporations having a capital stock, shall, for the purpose of this Act, be ordinary
business corporations, and are hereby so defined, except railroad companies whose roads
are
worked by steam, electric or other power, street and passenger railways, steamship and steamboat companies, and all other common carriers, telegraph, cable, telephone, express,
transportation, parlor car, sleeping car, and oil pipe companies, turnpike companies, bridge
companies
and sewerage disposal companies, safe deposit and trust companie guarante
s,
e and fidelity
companies, insurance companies of all kinds, electric light, electric construction, heating, refrigerating, water and gas companies, building or homestead associations, State, national
and
savings banks, or savings or moneyed institutions."
All other corporations heretofore subject to the tax on shares of capital
stock are therefore still subject to such tax, the assessable value of their shares
being computed by the State Tax Commission from reports filed with the Commission or from any other information obtainable.
The City of Baltimore, also Anne Arundel and Harford Counties, as well as
several incorporated cities in other counties, have for years, under local
laws,
exempted certain property of manufacturing plants from local taxation. The
exemption covered tools, machinery, manufacturing implements and engines
belonging to individuals and corporations, used in the manufacture
of articles
of commerce; but there was no exempti
on from state taxation. In case of
domestic corporations, the exemption allowed was only a pro rata exempti
on,
because only the shares taxable in the locality where
the plant was located,
received the allowance; thus for instance, in the case of a domesti corpora
tion
c
located in Baltimore City, with 1,000 shares, of
which 250 are held by residents
of Baltimore City and 750
by residents of Baltimore County, there would be
no credit on the Baltimore County shares,
while the Baltimore City shares would
receive a pro rata credit amounting to one-fou
rth of the assessed value of the
machinery, etc.
This complicated arrangement has not been generally understood and
has
quite naturally given rise to misunde
rstandings.
Chapter 528 of the Acts of 1914 was passed with the object of exempting
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INDUSTRIAL SURVEY OF BALTIMORE
the machinery, etc., of manufacturers (including foreign corporations) from the
state tax in all cases where it was exempted from the local tax. The act, moreover, empowers all the counties to pass resolutions conferring such exemption.
In the case of domestic corporations, the scheme of the act was to allow a deduction of exempted plant (i. e., machinery,implements,etc.) in the same manner
as real estate is deducted, that is to say, both for state and local purposes, and
against all the shares without reference to the residences of the shareholders.
While under a later act (Chapter 324) a radical change is made in the method of
taxing business corporations, that is, by substituting a tax on assets for the tax
on shares, the entire exemption of manufacturing machinery for state as well
as local purposes is preserved in all cases where the machinery has been exempted
by law or ordinance from county or municipal taxation.
It was urged upon the legislature, in advocacy of these exemptions, that the
values created by manufacturing enterprises are of greater consequence than the
actual values of the manufacturing plants themselves.
Before discussing other changes made in the laws by the General Assembly
of 1914, it may not be amiss to refer briefly to existing laws concerning the
taxation of other corporations in Maryland.
Certain enumerated classes of corporations pay a gross receipts tax at rates
which are specially fixed for each class and in some cases are graduated. Computation of the tax is made by the State Tax Commission from reports filed by the
corporations. Railroads, either domestic or foreign, pay a franchise tax on their
business in Maryland varying from 1% per cent. on the first one thousand dollars
per mile of gross earnings (or on the total earnings if they are less than one
thousand dollars per mile) to 23/b per cent. on that part of the earnings which is
in excess of two thousand dollars per mile Other classes taxable on gross receipts include express, transportation, parlor car, sleeping car, safe deposit,
guarantee, fidelity, title insurance, telegraph, cable, telephone, gas and electric
light companies. The tax also applies to foreign phosphate, guano and fertilizer
companies.
The shares of domestic railroad companies are exempt from taxation while
their real and personal property is taxable for local purposes as if owned by an
individual, but it is exempt from the direct State tax.
Savings banks pay an annual franchise tax of 25 cents on every hundred
dollars of deposits. Insurance companies, fire, life, marine and inland, pay a tax
on premiums.
The shares of banks (state and national) were heretofore assessed like other
corporations and local taxes levied thereon according to the varying local rates
prevailing where the respective shareholders resided. Profiting by the examples
of Pennsylvania, New York, Connecticut and other states where low, fixed rates
are in effect, the legislature of Maryland amended the law so as to impose a uniform local rate of 1 per cent. No change was made in the credits allowed.
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Federal Reserve Bank of St. Louis
INDUSTRIAL SURVEY OF BALTIMORE
75
The additional state tax was also retained. The selection of Richmond as a
Reserve City was the leading inducement for favorable action, after several
years of futile effort.
Another change in the law that deserves special mention is the act exempting
the obligations of Maryland counties, towns and cities from all taxation. The
new policy is in line with that of other progressive states and also with the general
policy of the United States government in exempting from the income tax the
interest on state and municipal bonds.
Interest-paying obligations of corporations and dividend-paying shares of
foreign corporations have, since 1896, been subject to a fixed local rate of 30 cents
per $100 of assessed value, in addition to the regular state tax rate, which has
fluctuated between 16 cents and 31 cents. The aggregate tax rate has therefore
ranged from 46 cents to 61 cents (the rate for 1914). Recognizing that the
peculiar characteristics of these forms of intangible property made it desirable
that the rate should not only be stable, but should not be at such a figure as
would encourage wholesale evasion or discourage the investment of funds in
taxable securities, the legislature of 1914 (Chapter 411) amended the law so as
to provide a maximum rate of 15 cents for state purposes,leaving the local rate at
30 cents. The aggregate rate therefore will be 45 cents, or 43' mills on the dollar
for 1915 and thereafter. Although the original security tax act of 1896 produced
an enormous increase in state's revenue (and also in the local revenues of such
cities and counties as made proper efforts to apply the law) even greater results
are looked for under the new law.
Maryland, although not the first state to pass an act putting a low rate on
intangibles,is the state in which the greatest success has been achieved in uncovering this intangible personal property. Even an imperfect law capably and
vigorously administered brings better results than a better law, poorly administered. The credit for Maryland's fame throughout the country in connection
with the security tax must be awarded to the Appeal Tax Court of Baltimore City
which achieved extraordinary results. In Baltimore County also, by the application of improved methods of administration, there has recently been a very
large increase in the basis, most of it due to the efforts of a single assessor.
Another change of this year provides for the exemption of household furniture to the extent of $500. Since 1910 there has been in Baltimore City and
Baltimore County an exemption of $300 on furniture, provided the total value of
the furniture did not exceed $300 and that the owner did not possess any other
property, real or personal. This act was unfair and gave little relief. The new
act applies to all persons and in all sections of the state.
An act to which little attention was paid is Chapter 390, which proposes
an amendment to Article 15 of the Declaration of Rights so as to permit the
classification of property for taxation. Under judicial interpretation certain
statutory classifications have been sustained. Under the proposed Constitu-
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
76
INDUSTRIAL SURVEY OF BALTIMORE
tional Amendment, if adopted, there could be a further classification by which
land could be made subject to one rate of taxation and improvements subject to
another rate. Under the amendment authority may be given by the legislature
to the local governing bodies to provide for the exemption of a portion of improvements from taxation.
Although having only an indirect bearing upon taxation, allusion should be
made in closing this memorandum to the act establishing the serial plan in the
issuance of state loans. The departure from the sinking fund plan may be regarded as a notable advance step, which has already borne fruit in the favorable
terms upon which the recent sale of a large block of state bonds was made.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BALTIMORE'S GEOGRAPHICAL ADVANTAGES
The accompanying maps vividly illustrate the pre-eminence of Baltimore
as the logical centre of distribution for the South in comparison with designated
cities to the North and West. The particular section of the South to which
Baltimore has the advantage of lower freight rates by reason of proximity, can
with propriety be termed "tributary territory." This tributary territory should
be systematically canvassed and every effort put forth individually and collectively by the merchants and manufacturers to control the trade therein
located. If competition is encountered in this field from cities that labor
under the disadvantage of freight rates, it is because the competitor has equalized the freight by absorbing the difference, thereby appreciably cur tailing his
margin of profit, or he has made quality subservient to price.
An exhaustive inquiry, intelligently conducted, should develop the basis
of this competition, whereupon the proper remedy can be administered either
through employing tactics identical with those of the competitor in the one case
or instituting an educational campaign to apprize the trade of the intricacies
peculiar to the business which has made this competition possible on an unfair
basis.
The present competitive situation as respects Baltimore City presents
a condition which must also be given immediate consideration and a solution
arrived at to comprehend how the outside competitors, manufacturing at no less
cost and producing goods of no greater value than Baltimore manufacturers,
can directly control the bulk of the retail business in this city.
Freight rate advantage is a highly coveted adjunct to the industrial life of
a community, as it spells stability for its commercial development. The question of discrimination has been raised repeatedly by other cities affected and
investigations instituted with a view of compelling the readjustment of Baltimore's differential freight rates, but these attempts have uniformly been
frustrated by the railroads and trade organizations through the intelligent
exploitation of Baltimore's relative geographical location and consequent justification of prevailing differentials.
A careful study should be made of the question of territorial rights with
a view of determining what competitive
centres are going beyond their logical
bounds in competing with Baltimore, and the fundamental reasons ascertained
for the existence of this condition, to
the end that action may be taken in the
nature of a reciprocal campaign to counteract the influence of this competition.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
(77)
78
INDUSTRIAL SURVEY OF BALTIMORE
Retaliation should take the form of encroachment on the competitors' sphere
to the extent that they have invaded Baltimore's tributary territory. This
will have a tendency to put them on the defensive rather than encourage a
continuance of conditions that are improper and reflect on the energy and integrity of our people. As soon as this contingency is met and the situation reversed
it will result in an increased demand on the labor market with consequent general
benefit to the community.
The eleven tables of rates displayed in conjunction with maps on subsequent pages were compiled under the supervision of the Traffic Bureau of the
Baltimore Chamber of Commerce. They present the freight rate situation
existing as of October 1st, 1914, and form the basis for the respective divisions
of territory noted.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
•
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Mo. 80
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Charleston
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Jacksonville
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13
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12
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Knoxville
Ky. 83
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38
37
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31
38
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73
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70
77
32
32
25
25
23
23
26
27
32
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57
62
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18
18
17
17
17
18
22
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27
39
50
39
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_____
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