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The Monthly BUSINESS REVIEW Covering business and industrial conditions in the Fourth Rderol Reserve District FEDERAL RESERVE BANK of CLEVELAND D.C.Wills, Chairman of the Board (COMPILED MARCH 15, 1920) VOL. 2 CLEVELAND. OHIO. APRIL I, 1920 A GRICULTURE is the backbone of the American nation. Agricultural prosperity insures i . A . national prosperity. There is more money invested in the business of agriculture than in all our manufacturing and railroad interests combined. And yet its business has been so “ taken for granted,” as it were, that little attention has been bestowed upon it—at least not attention commensurate with its im portance in our national life. Conditions are rapidly changing, however, and the possibility of curtailed production, like a gaunt spectre, stares us in the face. Since this condition has arisen, it must be squarely faced and the proper remedial measures applied. We are too far advanced as a people *to shut our eyes to disagreeable facts and drift blindly with the current in the hope that they will adjust themselves in time. For the past five years the farmers of this country have been called upon to produce food in greater quantities than ever before. By force of circum stances America became the granary of the world. This, too, was accomplished under many difficulties. Farm machinery, supplies and equipment followed other articles in a continuous advance to higher price levels; the wages demanded by skilled farm help overtaxed the ingenuity of the farmer to meet them; and last, but by no means least, thousands of farmers’ sons and farm hands were called for military service, or lured by the certainty of higher wages and shorter hours to the shop-bench of the manufacturer—and they have not gone back! This latter phase is the one with which we are particularly concerned. It is not the farmer’s prob lem alone—it is one in which all society has a common interest and which is worthy of serious thought. The movement from the farm to the city is not entirely the result of the war. That it has been greatly accelerated during the war period is a fact, but figures show a well-defined movement toward the larger centers for the past forty years. Of that part of our population engaged in gainful occupa tions, the percentages employed in agricultural pur suits in the census years from 1870 to 1910 are as follows: 1870, 47.5; 1880, 44.4; 1890, 39.2; 1900, 35.7; 1910, 32.9. Figures for 1920 are not yet available but there is little question that the proportion has been materially reduced. No. 3 These figures show the extent of the “ farm-tocity” movement. But to the thoughtful student they suggest that a further increased movement in this direction contains a certain element of danger to our whole social structure. We must have tillers of the soil. We cannot put ourselves in the position of being dependent upon other nations for our daily bread. Present-day farm life is unattractive, and in many instances unprofitable. People do not readily leave a business which yields a good return, and the many abandoned farms which are to be found, especially near the industrial centers, tell their own story. It is the farmer’s business to feed and clothe the human family, but it must be done at a profit to him. It is as unreasonable to expect him to operate at a loss as it would be to ask any other producer to con tinue a business which shows final figures on the wrong side of the ledger. The farmer is beginning to think. Probably no other employment offers a greater opportunity for thought than his. During the many hours when he is alone at work on his fences, or in his fields, he endeavors to conjure some scheme which will remedy the situation. Unfortunately, it seems that this reflection has resulted in the thought that production must be curtailed. The city consumer does not see conditions as they are, and rails against the farmer, who, in the injustice of the situation, is rapidly assuming a *‘ let them go hungry ’ ’ attitude. Unmistakable proof of this is found in the fact that greatly reduced acreage is planned for 1920 throughout the whole United States. Dairy herds are being sold in large number, and farm tenantry is increasing rapidly. It is estimated that forty per cent of the farms in the country are owned by men who themselves live in cities and villages. Two million acres of land are said to be “ farmed” out of the city of Chicago alone; that is, the land is owned by residents of the city and either operated directly or rented. As we have previously stated in our Review, the farmer feels that he has been unfairly and unjustly treated. He feels that he is called upon to bid against the manufacturers’ high wage scale for his help, and then pay for his machinery and supplies the advanced price which these high wages make necessary. He feels that all efforts THE 2 MONTHLY BUSINESS to reduce the cost of living have been directed at him, while he must pay the current high prices for all that he buys. He resents the attitude of his city brother who urges him to “produce” while hip own slogan has been “reduce.” He cannot under stand the position taken by the city worker who de mands that the farmer work 10 to 16 hours daily to supply with the necessaries of life the man who works but 8 hours. He finds that his son is exchang ing the opportunity to work from before sunrise to after sundown for the 8 hour day and the con veniences, pleasures and higher pay of the cities. He finds himself the victim of a distribution system which he neither creates nor controls, whose cost of operation is increased at every point by diminished hours of labor and advanced wage scales. He cannot see any justice in the “ spread” between prices paid him for his products and the price paid by the con sumer. Of all these problems, the most serious which con fronts the farmer is the shortage and high price of help. City wages cannot be paid on the farm and permit the average consumer to purchase the product. The farmers have tried to meet this con dition by buying modern machinery, and power is being substituted for human labor wherever possible. The number of tractors on farms has tremendously increased, and reports from tractor makers indicate a still wider use of this “ man-power” saver during the coming year. The increased use of mechanical appliances, however, makes up only in part for the loss of farm help which has occurred in recent years. Our farmers have always lived an isolated life. With the advent of the telephone, the automobile, the establishment of the rural mail service, and the “ good roads” program which has been developed during the past few years, they have been brought into closer touch with their neighbors and the sur rounding cities; the development of the gas engine, the individual lighting plant and water system has enabled him to add to his comfort many city con veniences ; the community club, the Grange, and the district schools as community centers add something to hifl heretofore humdrum life. As against these factors there are several drawbacks which have not received sufficient attention. One is the situation of the church in every rural community in this country. Many pulpits have been abandoned, and the churches are without pastors. From a purely commercial point of view, the business of the coun try, the banks, the courts, and even the government REVIEW itself rests upon the foundation of morality; and, whatever our creed, we cannot maintain progress while the churches are growing weaker. The cou n tijr schools are in many cases grossly inadequate and. insufficient funds are available for their im prove ment. Many sections are entirely without high school, facilities and only the most prosperous can afford t o send their children to the cities to be educated. It does not appear, either, that the banks have b o o t doing their full duty to the farmer. They m ust assume a reasonable share in the solution o f h is problem. By instructing him in the proper use o f farm cost methods and by pointing out to him tk e advantage of borrowing to effect needed im prove ments and using the increased revenue to meet th e obligation, instead of patiently saving until a su f ficient sum has been acquired to make the necessary change, much can be done to aid him. The banks that grant loans for current a g ri cultural and live stock purposes, as distinguished, from loans for fixed investments, serve a double p u r pose in aiding the farmer and in strengthening th eir own position by placing in their discount p ortfolios a liquid class of paper, based on current transaction^ Such paper in the hands of member banks is eligib le for rediscount at Federal Reserve Banks and m a^ have a maturity of six months from date of redistcount as against the 90 day limitation for commercial, paper. It is interesting to note in this connection that th e amount of agricultural and live stock paper red iecounted with the Federal Reserve Bank of Cleveland during the year 1919 was only one-fiftieth of 1 p e r cent of the total volume of loans and rediscounts. The business men of the country, including th e bankers, should rally to the support of the farm er to assist him in solving the problem of his business and to encourage him to expect cooperation ra th er than criticism from the cities. A prominent C leve land manufacturer reports a conversation recen tly had with an Iowa farmer who said: ‘ ‘ This smokings car is full of smoke and prophets. The city p eop le think the farmer ought to reduce the cost of liv in g What we need first is a great humorist to make th e American people see how silly they are acting, n o t because the situation is comical, and not because it is serious. It is just new—just different—that’s a ll. Someone with a sense of humor ought to give th e American people a good laugh at themselves— ^ friendly kick—tell them to shut up—go to w ork—— trust in God—and see what happens.” Wheat Crop Disappointing; Corn Acreage Will Probably be Reduced; Farm Bureau Plan Enthusiastically Received The big feature in the agricultural field is the astonishing growth in the Farm Bureau movement. This movement, known as the Federation of Farm Bureaus, has already progressed far enough to indi cate that in a comparatively short time it will be the national voice for the American Farmer. The degree to which this movement is being supported is best evidenced by the fact that in Michigan, Iowa, Indi ana, Illinois and Ohio nearly 85 per cent of all the farmers solicited are joining. They are paying a fe e on the average $10 per year for three years, that % going to assure sufficient financial backing to through with whatever program is outlined. O ne county in Ohio that had a membership in the o l^ farm bureau organization with fees of one d o lla r per year of 408, had already signed up over 1300 o ^ the new basis. Another county in western Ohio has nearly 2900 signed up out of a possible 3500. THE MONTHLY BUSINESS The principal aims of this organization are three—marketing, legislative and educational. Under marketing it is proposed to encourage a better system of distribution of farm products through the develop ment of co-operative associations. This should ulti mately result in a smaller difference between the price the producer gets and what the consumer pays. Under this head also will come the organization of companies to manufacture some of the more gener ally used supplies that the farmers purchase. The legislative program is largely a protective measure. Under this, the farmers will develop men who will endeavor to see that no legislation which is inimical to the farmers’ interest will be passed and to undertake to have passed some constructive legis lation to develop the resources of American agri culture. REVIEW 3 Under the educational program efforts will be made to make their own members more efficient, as well as to let the American public know the real truth about the business of farming. The damage to the winter wheat crop is not yet determinable, but there is no longer any question that the yield will be disappointing. Much corn is still in shock in the fields, and as huskers are asking 15c a bushel to husk it many farmers are buying live stock and feeding the corn in the husk. Prospects are for a reduced corn acreage, as raisers paid as high as $10 and $11 a day for corn cutters last fall and do not desire to repeat that experience. Many are planning on putting in no more than they and their families can care for without outside help. On account of the unprofitable feeding of hogs last fall, many farmers declare their intention to raise sufficient pork for their own use only. Legitimate Business Money Requirements are M et; Acceptance Field Broadening in Scope Credit appears to be available in sufficient amount for legitimate uses, with rates from 6 to 7 per cent, although 8 per cent is being charged in some places on small amounts for short-time accommodation. The tendency is to hold customers to minimum require ments, and new or additional lines are not put out except where justified by the borrower’s business. Comparatively stable money rates and the probable betterment of the foreign exchange situation have greatly improved the acceptance market during the past month. The supply of bills has been sufficient to meet the demand, but there have been conspicuously few export bills. In the past week a few of these bills have reappeared on the market, some of which have been drawn against shipments to Germany. Acceptance rates are the same as last month, rang ing from 5^4 to 6% per cent f°r prime eligible bank acceptances. The continued high return on this form of investment has brought in many new buyers, and has greatly strengthened the market. In previous months a large portion of the acceptances purchased by banks could not, owing to the heavy demands made upon them, be held for any appreciable length of time, but at this time purchasers are holding their investments. Savings banks, insurance companies, large indus trial corporations, and even individuals have come into the market and show signs of becoming avid consumers of this form of commercial paper. Insurance companies are learning that bankers ac ceptances suit their requirements as though they were made to their order. They have in the past been required to keep a proportionately large amount of their funds in deposits subject to check, because the American market lacked an investment that was readily liquid and that would practically eliminate risk. The coming of bankers’ acceptances made available to them a short time investment, which exactly meets these requirements and bears a most profitable rate of interest. In order to stimu late this trade and avoid any embarrassment to those purchasers who are not familiar with the workings of this instrument, many acceptance dealers are offer ing to buy back any acceptances sold by them and at the same rate. This assures the investor of an immediate market and a return on their funds at the purchasing rate of discount. Conservative Buying Feature of Iron and Steel Trade; Orders Now Booked Insure Capacity Production for Months; Inadequate Transportation Facilities Prevent Shipments of Finished Product Conservatism on the buying side has been more pronounced in iron and steel during the past month. Buyers are less insistent in seeking material for definite early delivery almost regardless of price, which had characterized their movements for some weeks previously. Sensing the more cautious note that has been manifested recently in general business circles, they apparently more fully have appreciated the limitations on prompt supplies obtainable from the mills and that their anxiety to obtain material only was operating to keep the market in a feverish condition. The subsiding in a considerable measure of the bidding by consumers for iron and steel has imparted a more composed and stabilized appearance to the market and is tending to level off some of the wide fluctuations of prices. Fundamentally the situ ation presents every index of being as strong as ever, and an underlying shortage of tonnage continues manifest. The disposition of buyers to readjust them selves to a recognition of the impossibility of all demands being met promptly also has had some bear ing upon the covering of actual and expected for 4 THE MONTHLY BUSINESS ward requirements. This, however, has not been in an important degree, since consumers invariably are quick to buy ahead on anything like a comparable price at present whenever the mills open their books to such business. Operating problems, rather than those of trade, have continued to monopolize the attention of the producers. Car and fuel shortages have been a pre dominating factor and during March floods in east ern Pennsylvania and in the Pittsburgh and Mahon ing Valley districts further have interfered with mill and furnace operations. While pig iron and crude steel output has continued to grow, finishing mill activities have remained restricted due to the inadequate transportation facilities. Few companies, especially in the greater Pittsburgh district and in the Mahoning Valley, have been able during the past month to ship a tonnage equal to their output. As a result the piling up of further finished material on mill yards has been necessitated. Some companies in the Pittsburgh district have been accumulating finished products at the rate of about 25 per cent of their output. The leading sheet and tin plate maker has accumulated, principally about Pittsburgh, more than 1000 cars of outbound material, representing 50.000 tons. An independent tin plate maker in the Pittsburgh district has 375,000 boxes on hand await ing cars. In the Mahoning Valley approximately 75.000 tons of steel have been piled. The extent to which the steel industry has been hobbled by the steel and coal strikes and by shortages of fuel and other material is shown by the estimate that an output of at least 500,000 tons of sheets has been lost from these causes. This is equivalent to 73 days’ working capacity or about 20 per cent of annual sheet output. The congestion of finished steel ship ments has tended to more than overbalance the effect on the market of any hesitation of buyers to keep on obligating themselves at current prices. The railroads under private control have come into the market for large quantities of equipment. It is estimated that at one time within the past several weeks, orders for 30,000 cars were under negotiation. Some of these and orders for a con siderable number of locomotives have been placed. Car orders however have not kept pace with in quiries. This is ascribed mainly to the fact that a large tonnage of material of the assorted character necessary for this work can not be obtained from the overcrowded mills before a distant date. An example of this is shown by the fact that the leading western producer is sold out on its expected production of steel bars to January 1, 1921. The railroads having come in the market at a belated hour have found the mills heavily obligated to other classes of consumers. The steel industry is disposed to favor the railroads, as a matter of good business policy, to every reason able extent possible; but just how the needs of the latter are to be worked out within a satisfactory period remains a big problem. BEVIEW Automobile builders have not shared with other buyers of steel any attitude of greater restraint or caution. These consumers have continued to pick material right and left to back up their production programs and the prices they have been paying have been almost without limit. Some of these interests unable to get high grade sheets from the mills have gone into the market themselves and bought semi finished material in the form of sheet bars which they have turned over to the latter for conversion. Such phenomenal prices as $90 and $92 Pittsburgh for open hearth sheet bars have been paid under these circumstances by Detroit automobile interests. The influence of automobile steel buying on the steel market clearly is illustrated in sheet bars made o f Bessemer steel, which, not being suitable for automo bile parts, are selling at an unheard of spread o f from $10 to $20 a ton below open-hearth sheet bars. Structural steel awards of the country in February were the largest since June, 1918, totaling 171,000 tons, or 95 per cent of shop capacity. During this month, however, contracts have been in considerably reduced volume and it is apparent that high prices and prolonged deliveries of steel are having their effect in narrowing the market. Numerous projects which were in a well advanced preliminary stage have been held up indefinitely for these reasons. The pig iron market has entered a state of quieter buying and inquiry following the active market o f the past several months. This situation apparently is a natural development arising both from the sold.up condition of the furnaces and the well ooYered. requirements for months ahead of many consumers. Statistics compiled as of March 1 show that th e merchant furnaces of the country had on hand u n filled orders approximating 5,000,000 tons, and shipments and production during February ^rere slightly in excess of 600,000 tons. The marketable pig iron capacity of the country apparently therefore is booked full at the present rate of output to No vember 1. While there have been some irregularities in pig iron prices as compared with some o f tile maximum figures recently prevailing, these have been of a local or special character and there has been nothing in them to suggest a weakening o f th e market. Pig iron production in February, as compiled b y The Iron Trade Review, showed an increased d a ily rate over January, as between 102,547 tons an d 97,172 tons respectively. The average in Decem ber was 84,711 tons. The total February output w s s 2,973,859 tons, compared with 3,012,373 tons in Janu~ ary, and 2,626,074 tons in February. Furnaces in blast at the end of February numbered 303, a gain of 18 in the month. This is the highest number o f furnaces in operation since February, 1919, when stacks were blowing. Steel ingot production in February, according to the American Iron and Steal Institute, was at the annual rate of approxim ately 43,750,000 tons, an increase of about 2,000,000 per annum over the January rate. THE MONTHLY BUSINESS BEVIEW 5 Busy Season Predicted for Lake Shipping; Shortage of Cars Feared; Early Coal Movement will be Heavy Business is offered freely at both ends of the route, but aside from the grain trade little chartering has been done during the past month and there will not be much change in the situation until the carry ing charges on ore and coal are fixed for the season. Most of the vessel men who were in California and Florida are back on the job, and it is expected that some action along that line will be taken shortly. Tonnage to take several million bushels of grain at the opening are under charter and a number of steamers that were on the market have been with drawn and will be sent for ore at the start. The opening grain movement will be light compared with 1919, as stocks at all the upper lake ports are much smaller than they were a year ago. That there will be employment for all the boats is certain, however, if the railroads are in shape to take care of their end of the business in the ore and coal trades as there will be a big movement from both ends of the route. A car shortage is feared, but there has been some improvement in the supply dur ing the past two weeks. The coal docks at the upper lake ports will clean up in better shape than they have for a number of years. Stocks will be low all around and early cargoes will be in big demand, but the movement at the opening will be light, unless there is a marked increase in the output and car supply, as there is a big shortage of coal in the local trades and some of the plants are only working part of the time owing to the lack of fuel. Ore is going forward to the furnaces from the Lake Erie docks more freely, but the car supply is short of the demand and the movement would be much heavier if the railroads could handle the tonnage. Stocks at the receiving ports are much heavier than they were a year ago. On March 1 the docks were holding 9,015,813 tons and on the same date in 1919 stocks were 7,726,086 tons. No Slackening in Demand for Manufactured Goods; Scarcity of Labor Causing some Uneasiness; Foreign Demand shows some Improvement The demand for manufactured goods of all kinds is insistent, and capacity production is the keynote of Fourth District business. Labor is becoming more scarce and, perhaps, somewhat more exacting. There has been a considerable exodus of foreign labor, and in view of the present depreciation of foreign ex change it is expected that immigration will be con siderably reduced even after the bars are let down by the Government. Foreign inquiries are being received in greater volume coincident with the improvement in foreign exchange. It is reported that some Canadian manufacturers have made inquiries for building sites in this country, as they wish to manufacture their goods here on account of the exchange situation. Automobile and allied industries continue to travel on “ high.” Akron rubber output this year will exceed that of any previous year. This is but natural in view of the tremendous increase in the use of motor cars. Tool manufacturers report the largest business in the history of the trade, with the bulk of the demand from automobile makers. Manufacture of laundry machinery is active with no prospect of let-up for many months. Electrical supply men report that orders are now on file to insure a volume of business for the coming six months equal to that of the previous six month period. The striking feature of the business is the preponderance of sales of the smaller and mediumsize pieces of apparatus. There is, however, consid erable quickening in the matter of buying of large power units for central stations. This is but natural, since the immense number of current consuming de vices being marketed must be backed up by generat ing equipment. The glass industry is booming, with capacity pro duction assured if orders are to be met. Coal Production Still Backward; Coke Situation Improves; Oil Industry Stimulated by Price Advances The coal situation is very chaotic at the present time on account of the shortage of transportation facilities. In the Pittsburgh district it is reported that the mines have been able to produce but 57 per cent of capacity. Coal requirements for the year are estimated at 650,000,000 tons, but it is said that of this amount the railroads will be able to move but 550,000,000 tons. Manufacturers are making great efforts to increase their stocks of coal, which were depleted during the strike, but operators are refusing to make contracts beyond April 1, until they have been advised of the terms of the award of the coal commission. They say they cannot make new contracts until they know what total wage increases will be and what portion of that increase they will be permitted to pass on to the consumer. Coke production is increasing with the better movement of cars. Connellsville district output is greater than for some time past. As we predicted in the Review some time ago, the price of crude oil has again been advanced, and con siderable new drilling has been begun or is in pros pect. One of the larger steel mills in the District, which has used fuel oil in its skelp mill, is reported as arranging for its use in the plate, bar, and rod mills, the extent of its use depending upon the amount available. THE 6 MONTHLY BUSINESS BEY IE W Department Stores Show Healthy Growth; Retail Dealers Assume Waiting Attitude on Some Lines; Statistical Data on Department Store Sales and Stocks During the past week or ten days there has been a slight easing off in retail trade, but not enough to make any material difference in the volume of busi ness so as to create a definite change of sentiment in the minds of manufacturers or jobbers who have merchandise to sell. Dealers complain that contracts offered for future delivery are even more vague in their terms than formerly. It seems that most manufacturers will not contract for specific dates of delivery nor for definite prices. Certain lines, such as silks, seem to be marking time. There appears to be a definite attitude on the part of retailers to withhold pur chasing of these for Fall delivery on account of the enormous advance which obtains. This may have resulted in a slight easement on the raw, but there is no weakening in the price of finished materials. Should this continue long enough it might cause a break in prices of finished goods; but unless the price of raw materials declines soon, there would seem to be no possibility of lower prices even for next Fall. Dealers in food stuffs predict a slight decline in several food lines, and declare that they would wel come any such movement. The demand continues strong for better qualities of food-stuffs, especially among the laboring class. One large grocery dealer in the District says: “ The laboring man is today buying what our wealthy class formerly did. Noth ing is too good or too high in price for him. He wants the best.” We offer to our readers this month, and will make a regular feature hereafter of a tabulation of depart- ment store sales and stocks for each month. These tabulations will show percentages of increase or decrease in sales over the previous month and over the same period one year ago, the percentages of increase or decrease in stocks for similar periods, the percentage of stocks to sales for each season, and the percentages of outstanding orders to total pur chases during the previous calendar year. This compilation will enable us to substitute defi nite statistical data for general expressions regard ing the state of trade, based on reports received from department stores of all classes throughout the dis trict. It is the intention to extend this service to other commercial and manufacturing lines as quickly as possible. The report for the month of February follows: Percentage increase in net sales during Febru ary over net sales during same period last year 28.6 Percentage increase in net sales from Jan. 1 to Feb. 28 over net sales during same period last y e a r .................................................................. 36.0 Percentage increase of stocks at close of Feb. 1920 over stocks at close of same month last y e a r ..................................................................48.6 Percentage increase of stocks at close of Feb. 1920 over stocks at close of Jan. 1920............. 45.1 Percentage of average stocks at close of each month from Jan. 1 to average monthly net sales during same period.................................386.3 Percentage of outstanding orders at close of Feb. to total purchases during calendar year 1919.. 18.6 Limit of High Prices Seems to Have Been Reached in Textiles; Commitments for Fall Trade Show Falling-off Commitments for fall trade are reported as un questionably lighter than during the past year, but mills report plenty of orders to maintain employment at the present speed for six months. In the men’s garment industry, prices for fall will be high. There have been further increases in wages and advances in the quotations for fabrics over previous prices have been considerable. The impression prevails through out the trade, however, that the peak of prices has been reached, and that in the Spring of 1921 it will be reasonable to expect an ease-off. Impressions of the larger producers in the men’s garment industry are that production must be in creased substantially to offset increased costs. The tendency is toward concentration to larger and fewer concerns. Fine wool goods have not changed materially in price, and the supply is not large. The coarser wools have eased-off considerably, and are in very large supply. Makers of women’s wear report business satisfac tory, with shipments of materials from the mills com ing through in better shape. Shipments of Spring goods have practically been completed, and manu facturers are now working on sample lines for the fall trade. Prices of goods for this season’s trade will remain high, with possible slight advances due to increased wage scales. THE MONTHLY BUSINESS REVIEW 7 Labor Shortage Reduces Railroad Efficiency; Car Situation Shows Some Improvement The railroads find themselves very much in the same position as all other employers of labor, not only in the rural districts, but in the cities as well. During the past severe winter one of the reasons for unsatisfactory transportation furnished by the car riers was the fact that through the rural districts they were unable to secure laborers to thaw out the switches, clean away the snow, and do other similar work absolutely necessary to successful operation of the roads at anything like even post-war efficiency. The congestion of merchandise in railroad depots is largely due to scarcity and inefficiency of labor. Working forces in freight houses are still much short of normal, and this means much further insufficiency, as the men which the roads are able to obtain are for the most part inexperienced, and even at present high rates of pay are not delivering much more than one-half of the service required. Embargoes are still in force at certain points, but the situation has shown some improvement during the past thirty days. No Let-up in Building Activity; Wage Adjustments in Progress; Columbus Disturbed by Strike of Masons One of the most serious causes for industrial and social unrest is the continued shortage of adequate and satisfactory housing, and unless the financial and business interests are ready to graple with this sub ject effectively and adequately many large industrial centers will be seriously handicapped in their opera tions. Spring wage adjustments are now in progress be tween the various associations of employers and em ployes in the building industry. The process of arriving at satisfactory agreements will proceed thruout the present month and in some cases until near the first of May. This situation exists through out the District. Demands approximating 25 per cent are being made by the workers. Their argument for such increases is largely based upon the increased cost of sustenance, but is strengthened by the lack of supply in many of the trades. This situation makes the market somewhat uncertain as to buildings, although the volume of operations, both present and prospective, keeps up a large margin of increase as compared with last year. These increases, however, must be discounted to a certain extent when meas ured in terms of dollars so as to indicate the actual increased cost. The building industry in Columbus practically is at a standstill because of a controversy between the union bricklayers and the builders supply men. Members of the union sought to dictate to the supply men as to whom they could sell supplies. They had been selling to certain contractors who employed non-union brickmasons, as well as to the contractors employing union men. When the union issued its ultimatum, supply men decided to stand together in resisting the demand. About 40 non-union brick masons are at work but 400 are out. While there have been overtures toward settling the dispute, present indications are that it will be some time before an agreement can be reached, as the supply men have been joined by the Brick Contractors Asso ciation. Other unions are threatening to join with the brickmasons. The seriousness of the situation is apparent when it is stated that from 4,000 to 5,000 new homes are needed to take care of the increased population in Columbus. Several factories are in urgent need of additional buildings. The strike, if long continued, will affect retail business. Some building and loan associations have increased their rate for loans from 6 to 7 per cent, but the movement is not general. Some managers are urging that this be not done unless it is absolutely necessary, as it will have a tendency to stop any plans for home building, even if the brickmasons’ strike is settled. A tabulation of building operations in the principal centers of the District appears elsewhere in this Review. 8 THE MONTHLY BUSINESS BEVIEW Special Report on Pottery Industry In keeping with our policy of making special re ports covering various industries throughout the Fourth District, we present to our readers this month a survey of the pottery industry. Within the confines of the East Liverpool district, nationally known as the ‘ ‘ Staffordshire of America, ’ ’ is produced 85 per cent of the pottery ware made in the United States. From one small kiln operated by two men, who traveled through the country selling the product of each “ firing” as completed, this industry has grown until today there are about 279 kilns in operation, furnishing employment for 9,000 men, representing a capital investment of many millions and producing wares valued at $14,000,000 annually. As is the case with many other articles in common use, pottery and chinaware are things about which many of us know but little. A visit through one of the large potteries is most interesting and instructive, and one leaves with a further increased regard for American inventive genius. The industry has been revolutionized by substituting machinery for hand work, making possible the immense growth of the pottery business of which the Fourth Federal Re serve District is so justly proud. Potteryware was first manufactured in this Dis trict by James Bennett, an English potter, who had gone to join the “ community colony” established at New Harmony, Ind., and, when the bubble burst, stepped onto an Ohio river steamboat bound for Pittsburgh. In conversation with a passenger he learned of the clay to be found on the hills at East Liverpool. He landed there (in 1839) and procuring a pick and shovel secured samples of the clay, which were pronounced suitable for the manufacture of Rockingham and yellow ware. A piece of ground at East Liverpool was donated to him. On this he erected a one-kiln plant, in which he and his brother produced the first pottery to be manufactured in the upper Ohio Valley. A few pieces of this ware are still to be found in homes throughout this section. The flood of 1851, overflowing the banks of the river, washed aw ay the Bennett buildings, and their owners left in disgust for Pittsburgh, to engage in the glass business. The then senior member of a prominent present day pottery firm bought from the Bennett brothers the saggers and potter’s wheel which he had used, and in 1854 commenced the manufacture of fruit jars exclusively. A second pottery had been established at East Liverpool, making Rockingham wares from native clays in 1840 and others were established from 1844 to 1849. The manufacture of yellow ware has almost ceased, and the potteries have now all except one engaged in the production of semi-vitreous or semi-porcelain goods. Considerable progress has been made in the manufacture of this class of goods, and the finer grades made here compare favorably with similar classes made anywhere in the world. The native clays were found unsuitable for making the white ware now produced and raw materials are now shipped mostly from England and from the states of North Carolina, Kentucky, Tennessee and .blorida. These materials consist largely of English china clay, English ball clay, flint rock, and what is known as “ spar” —a white crystal rock. These make up the body of the mixture, and are weighed out in the proper proportions in automatic scales, then poured into large mixers called “ blunger mills” and thoroughly mixed in water. The resulting mixture a thick liquid known as “ slip,” is drawn off into large cisterns where it is stirred by large paddles to prevent separation and settling of the clays. When needed for use, the slip is pumped from the cisterns and passed through a fine mesh screen to take out any large particles and impurities. The liquid is then run under very high power electro magnets, where any particles of iron or similar sub stances are removed. From the sieves the slip is pumped into filter cloths, and the water pressed out by hydraulic presses, leaving the clay in large “ leaves,” shaped somewhat like elephants’ ears, about one inch thick and weighing from 35 to 40 pounds each. These leaves are then stored in a clay cellar, from which they are run through a “ pug mill” —a mechanical contrivance which kneads the clay much as bread dough is kneaded. This machine makes the clay compact, ready for making into ware. Every piece of pottery (except some fancy art pieces which are still made by hand) is formed upon a mold. These molds are made of plaster of paris, those for flat pieces, such as plates, saucers, etc., being in one piece, and those for what are known as Hollow ware ’—sugars, creamers, pitchers, etc.,—in halves, which are put together until the clay hardens when the mold is removed and the piece appears as if by magic. f j k 156 makin? , of flat ware> the clay as it comes Irom the pug mill is given to the “ batter-out,” who rSJlecf su.fficiently large to make the desired object. This clay is placed upon a wooden block and flattened out with one stroke to the necessary size. The batter-out then slaps this sheet onto the mold when it is picked up by the “ jigger” man at hi^ side who places the mold on a revolving table. A lever is pulled down which brings a knife-edge tool down onto the clay sheet, cutting away all surplus u<rJ?g th? sheet on the mold to the same “ rfl!^eSS A tU?!ICmt the Piece> and forming the rib on the bottom. The mold is then taken by a ™ mt° i he Stove room to dry. The moisture iS mnlri18 i1!? 11 by the heat and absorbed by and the Plece is then slipped off the mold and Placed in saggers for the first firing. It must \hl ca8“ ker y dellCately as at this * • « . it * » « » t THE MONTHLY BUSINESS The methods employed in making hollow-ware are different. Here, by the old method, each half of the mold is lined with clay, the workmen being so skilled that a uniform thickness is obtained by the senses of sight and touch. The mold halves are then put to gether and taken to the stove rooms. A new process, which speeds up the production several times, is called “ casting” and consists of pouring the liquid slip into molds. It is then allowed to stand for a few minutes, when a sufficient amount adheres to the mold and the balance is poured off. This is a great improvement over the “ pressing” method, and much lighter ware is produced in this way. When the ware is removed from the stove room it is taken to the bisque kilns for firing. The pieces are put into “ saggers,” which are large, drum-like cases made of porous clays so that they may readily resist expansion and contraction in heating and cool ing of the kilns. These saggers are placed one on top of another, being separated by clay wads, and placed in the kilns. The kilns are built of fire-brick, are for the most part 18^ feet in diameter and 16 to 18 feet high. The kilns are then fired for from 50 to 55 hours, gas or coal being used for fuel, and the temperature running to about 2390 degrees Fahrenheit before finishing. It takes 10 to 12 hours for six men to fill one kiln (including placing the ware in the saggers) and two days each for firing and cooling. Consequently, the operation of getting ware through the bisque kiln alone consumes nearly one week. From the bisque kiln the ware is carried to the bisque warehouse. The fine white sand used to pre vent sticking in the first firing is brushed off, the rough edges are fettled and sponged off and the ware is stamped with the trade mark of the manufacturer. This is done with a rubber stamp, exactly the same as those in general office use. The bisque ware then goes to the “ dipping house.” Here it is dipped into the ‘ ‘ glaze ’ ’ tubs. The glaze is composed of certain quantities each of lead, zinc, whiting, spar, boracic acid and flint. The porous bisque ware absorbs this glaze, and when it is fired the gloss flows over the surface making a smooth, white, glassy finish. In this firing, each piece must be separated in the saggers or the heat would fuse the dipped glaze ware together. Small holes are found in the side walls of saggers, and small pins are placed in these holds for supporting the ware. The firing is done in kilns simi lar to those used in bisque firing, but the time is reduced to 32 hours and the temperature to 2318 degrees. A comparatively new method of determining tem peratures in kilns without the use of thermometer or pyrometer is known as the “ cone” system. Small, thin cones some four or five inches in height are made of a certain composition, and made to lean at a slight -#ftgle. At a certain definitely known temperature, this cone will “ melt down,” or start to curl downward. REVIEW 9 Different positions of the cone have been numbered, and kilns are now fired to, for instance, a “ number five” or “ number nine” cone. These cones are placed at different points in the kiln and are visible through peep-holes in the sides of the kilns. After the ware is removed from the gloss kiln it is taken to the glossed warehouse, where the small, sharp marks left by the pins used in supporting the ware in the saggers are removed, and it is then “ selected” for decorating. Only the best pieces are chosen for this purpose and the plain pieces are stored in bins for shipment. Various methods are employed in decorating. Plain gold or color edge work is done by putting the piece on a small revolving table (decorator’s wheel) and a brush dipped into the gold liquid lightly ap plied to the edge as the piece is turned. Gold and color designs on hollow ware are sometimes stamped and then gilded, but a new method called the ‘ ‘ decalcomania” process is largely used. In this method the piece is varnished, and a strip of decalcomania paper (similar to the “ transfer paper” we used to play with as children) is placed on the ware. It is then fired for about ten hours, the color is absorbed by the piece, and the paper and varnish burned off. The decalcomania process is used almost entirely for flower design work. From the decorating room the finished ware is taken to the “ decorated” warehouse for selection, packing and shipment. From the time the raw material enters the factory until it leaves the shipping room it is handled from 15 to 40 times, depending upon the kind of ware, whether it is made singly or in parts, decoration, etc. All work is done on a piece-work scale, and every workman is dependent upon the man handling the goods behind him to keep him supplied. The entire work runs with clock-like smoothness and precision. Labor is well paid and constant, thousands of work ers being skilled in their different lines as a result of years of experience, never having worked at any other trade—spending their lives, as their fathers have spent theirs, in the shaping of objects of sym metry and beauty for table and household use. American manufacturers have not developed the making of chinaware to the point where they can successfully compete with European goods of the better class, but agents of the pottery companies are scouring the world for clays with which the finer grades of china may be made. With the impetus given the chinaware business during the war by al most entirely shutting out imports from European countries, and with the tremendous local demand created by reason of increased population and re duced importation, the pottery business appears to be on a firm footing for many years to come. That the business has become recognized as stable is shown by the action of the Ohio State University in including in their curriculum a course in ceramics. The ‘ ‘ cone ’ ’ system before described is the result of experimentation at the University. 10 THE MONTHLY BUSINESS BEVIBW We give below a list of pottery makers in this district, in which the relative capacity is shown by the number of kilns: The Albright China C o.,....................... The Canonsburg Pottery Co., . . . The Carrollton Pottery C o.,.................. The Cartwright Bros C o . , .................. The Colonial C o . , ................................ The Crooksville China C o.,.................. The East Liverpool Potteries Co., . . . French China C o . , ................................ The W. S. George Pottery Co., . . . . The Hall China Co.,................................ The Harker Pottery C o.,....................... The Edwin M. Knowles China Co., . . The Knowles, Taylor & Knowles Co., . The Homer Laughlin China Co., . . . The Limoges China C o . , ....................... The Mayer China C o.,............................ The D. E. McNicol Pottery Co., . . . McNicol and Corns C o . , ....................... The T. A. McNicol Pottery Co., . . . . The National China C o .,....................... The Owen China C o . , ............................ The Pope-Gosser China Co.,.................. The Potters Co-Operative Co., . . . . Saxon China C o . , ................................ The Salem China C o.,........................... The Sebring Pottery C o.,....................... E. H. Sebring China C o.,....................... The Smith-Phillips China Co., . . . . The Standard Pottery C o . , .................. The Steubenville Pottery Co., . . . . The Taylor, Smith & Taylor Co., . . . The Trenle China C o.,........................... The Tritt China C o . , ........................... The C. C. Thompson Pottery Co., . . . The West End Pottery C o.,.................. . . . . . . . . . . . . . . . . No. Kilns . . . 7 Canonsburg, Pa. . . . . . 10 Carrollton, Ohio, . . . . . 7 East Liverpool, Ohio, . . . 7 East Liverpool, Ohio, . . . . 6 . . . 7 East Liverpool, Ohio, . . . . 6 . . . 13 . . . 33 . . . 5 . . . 12 East Liverpool, Ohio, . . . 21 East Liverpool, Ohio, . . . 32 East Liverpool, Ohio,-Newell W. Va., 78 . . . 9 . . . 6 . . . 12 . . . 5 . . . 6 . . . 9 . . . 7 . . . 7 . . . 11 . . . 9 . . . 6 . . . 11 . . . 7 . . . 6 . . . 12 . . . 7 . . . 16 . . . 5 . . . 6 . . . 15 . . . 6 . . . 7 The Following Banks Have Been Admitted to Membership During the Past Month Commercial Banking and Trust Company, Wooster, Ohio. . Real Estate Trust Company, Washington, Pa............................. Merchants State Bank, New Philadelphia, Ohio....................... Guaranty Safe Deposit & Trust Co., Butler, Pa....................... Dollar Savings Bank and Trust Co., Bellaire, Ohio....................... Antwerp Exchange Bank Co., Antwerp, Ohio........................... Napoleon State Bank, Napoleon, Ohio......................................... Citizens National Bank, Somerset, Ky......................................... Harveysburg National Bank, Harveysburg, Ohio....................... First National Bank, Kansas, Ohio.............................................. Resources . $1,031,000 . 2,619,000 928.000 . 3,722,000 . 1,341,000 410.000 . 1,083,000 Capital 100.000 25.000 25.000 THE MONTHLY BUSINESS 1! BE V IE W Total Debits by Banks to Individual Accounts March 17, 1920 Akron Cincinnati Cleveland Columbus Dayton Erie Greensburg Lexington Oil City Pittsburgh Springfield Toledo Wheeling Youngstown - Total - - - - 22,036,000 72,797,000 187,730,000 27,720,000 12,436,000 8,008,000 4,466,000 9,100,000 3,421,000 210,694,000 4,296,000 33,896,000 8,889,000 14,471,000 - - 619,960,000 _ . . - . . - . - - - _ - - - - - - - - - - - - Week Ending March 19, 1919 Per cent of Increase Increase 16,320,000 65,100,000 152,003,000 26,628,000 9,897,000 6,576,000 1,985,000 6,900,000 2,382,000 176,862,000 3,116,000 25,274,000 8,271,000 10,765,000 5,716,000 7,697,000 35,727,000 1,092,000 2,539,000 1,432,000 2,481,000 2,200,000 1,039,000 33,832,000 1,180,000 8,622,000 618,000 3,706,000 35.0 11.8 23.5 4.1 27.7 21.8 125.0 31.9 43.6 19.1 37.9 34.1 7.5 34.4 512,079,000 107,881,000 21.1 Building Operations for Month of February Permits Issued New Construction Alterations 1920 1919 1920 1919 Akron Cincinnati Cleveland Columbus Dayton Erie Lexington Pittsburgh Springfield Toledo Wheeling Youngstown Total 155 137 169 50 43 9 16 151 8 53 9 35 257 86 122 102 111 40 3 95 4 92 19 72 835 1,003 45 354 321 53 20 19 33 71 5 47 14 11 Inc. or Dec. of Percent Valuations New Construction Alterations Total Valuations of Inc. 1920 1919 1919 1920 over 1919 or Dec. 1920 40 1,291,565 530,135 266 404 3,333,500 162,975 65 29 115,819 20 34,100 18 48,420 75 986,267 3 11,580 55 177,430 16 17,345 11 246,925 993 1,002 6,956,061 672,330 42,585 900,500 539,350 246,210 60,312 10,000 186,635 3,900 304,435 7,175 91,598 68,230 271,310 304,575 331,630 13,445 64,703 10,000 130,181 6,475 61,341 1,840 9,525 32,560 149,330 235,105 32,120 21,825 11,521 2,325 193,316 950 62,522 2,260 35,125 92.9 654,905 609,530 317.6 2,502,470 220.4 76,865— 13.5— 138,771— 51.8— 26,970 37.5 46,095 373.9 736,497 193.8 13,205 272.3 128,186— 34.9— 9,750 103.3 129,727 102.4 3,065,030 1,273,255 778,959 4,385,327 114.1 Clearings February 16 to March 15 Akron Cincinnati Cleveland Columbus Dayton Erie Lexington Pittsburgh Springfield Toledo Wheeling Youngstown Total Per cent oi Increase 1920 1919 47,716,000 307,021,261 514,462,382 55,964,300 23,383,068 9,771,453 18,231,830 692,176,913 9,129,355 66,532,264 20,680,778 19,655,058 26,897,000 228,915,492 332,926,476 43,762,100 16,279,447 7,138,731 12,762,748 496,859,042 6,346,409 41,456,535 15,556,918 16,994,697 20,819,000 78,105,769 181,535,906 7,103,621 2,632,722 5,469,082 195,317,871 2,782,946 25,075,729 5,123,860 2,660,361 77.4 34.1 54.5 27.9 43.6 36.9 42.9 39.3 43.8 60.5 32.9 15.7 1,784,724,662 1,245,895,595 538,829,067 43.2 Increase 12 , 202,200 THE 12 MONTHLY BUSINESS EEVIEW PICKUPS ON BUSINESS TOPICS An American committee on Permanent Organization has been appointed to aid in the formation of an International Chamber of Commerce. The purpose of the proposed organi zation will be to promote international commerce, to facilitate international trade relations among the nations, to secure harmony of action on all international questions affecting commerce and industry, and to promote peace and cordial relations between the member countries. The department of mines and industries of the 1114111 government makes the statement that now is a favorable op portunity for putting capital into the development of South African resources. Great possibilities lie in the directum o f steel production, of coal by-product and maize by-pioduct industries, woolen manufacture, shipbuilding and deep sea fisheries, to mention only a few which require large capital. ♦ ♦♦ _Representative Martin Madden of Illinois 1»# formed ft vigilance committee in the House for the purpose o f extravagance. It will be the purpose of thin committee to scrutinize every bill introduced. They will go to the intro ducer of a bill and point out any elements o f extravagance which appear to exist and whenever possible try to persuade the introducer to drop the bill entirely. When thi» cannot be done the member will be asked to pare down his — The production of agricultural tractors during the year 1920, in the United States, is estimated at 300,000. This com pares with 175,000 turned out in 1919, and 7,540 in 1913, the first year in which the small tractor demonstrated its worth to the farmer. About 12% of our total production of tractors since 1916 has been exported. ♦♦♦ A preliminary survey of the ownership and use of motor trucks by farmers shows that at least 50,000 agriculturists use such vehicles on their farms. These figures for the Fourth District, given out by the United States Department of Agriculture, are: Ohio, 2,261; Pennsylvania, 2,760; Ken tucky, 818; West Virginia, 465. ♦ ♦♦ Checks drawn on 90% of the banks of the United States are now being collected through the Federal Reserve System without deductions for exchange. Of the 29,690 banks in the United States, 26,525 are on the par list. ♦ *♦ Coal companies in eastern Ohio are buying farms and stripping them to take out coal and then making them into farms again. They are planning to make them chiefly into fruit-growing and stock-raising farms. Contrary to the gen eral belief, it has been proved that stripped ground is good for agricultural purposes. + ♦♦ Twenty-five grocers in Canton, Ohio, have united to cut prices for their customers by buying and advertising collec tively. ♦ ♦♦ +♦♦ Senate Agricultural Committee, March 2, voted to elfaafe nate from the annual agricultural bill the $240,000 voted by tne House to continue the time-hallowed custom of Retribu tion of free seeds to their constituents by members of Qmkh gress. -— ♦ ♦♦ An American syndicate has purchased a controlling interest in Schoeller’s iron works at Ternitz and B le e k n u a tl steel works at Muerszuchlag. Another group is said to fee negotiating for the Brevillier and Urban works. * ♦♦ Belgium is seeking 50,000 tons of American steel-mktaHK' iron, it was learned at New York, but American iron m l n S are paying little attention to this and similar inquiriee from Europe, because of their inability to meet domestic dsnsuHCfe +++ More than 3,500 banks and trust companies have m a le application for food draft blanks to assist in the refief o f European food conditions under the plan that has been worked out by the Relief Administration and the Ameriaia Bankers’ Association. +++ -ioonWag® increas®8 ranging from 25% to 125% in JannMte. ; , CT Parf d January> 1919, are shown in eleven o f ♦w, * leadinS manufacturing industries by a compilaii w ireauLabor Statistics. The biggest advaala „ MO I . Woolen industry. The volume of employment W ♦♦♦ ' !“ i08 ,r°m 4% *° 5»% “ ^ +++ «* Canton, Ohio, High School boys have organized a “ Junior Chamber of Commerce” for the purpose of educating its members along industrial, commercial and civil lines. The dues are 50c a semester, and there are 200 members in good standing. They work in co-operation with the Canton Cham ber of Commerce, electing officers from among their own members, visiting factories, holding meetings and in other ways becoming familiar with industry and commerce. barir? official <luarters that in spite o f the emg , ew York merchants have not only shipped ea»oea £ m ?°iTet ? U88ia’ bQt that cargoes of i S r m a E S S have been taken back in exchange. It is p r e d ic te d t iK Russian trade will be enlarged from week to week. ♦ ♦♦ to resat r ic f° W ° deal • With the exchan&e situation Italy to restnct American imports about 20%, by DrohibitmoTf*^ conden8ed milk, butter and cheesef aMOttdfaw to official advices to the Department of Commerce 6 A committee headed by Charles E. Mitchell, president of the National City Company, has been formed to conserve the interests of American holders of the Imperial Russian Gov ernment five year 5%% bonds due December 1, 1921. Holders of the bonds are invited to deposit their securities with the depositaries, which are the National City Bank of New York and The Old Colony Trust Company of Boston. ♦♦+ Army supply bases and terminals on the Atlantic and Gulf coasts, which cost the government $143,000,000, will be leased to commercial concerns in development of American Commerce. The terminals are at the ports of Boston, New York, Philadelphia, Norfolk, Charleston and New Orleans. ^ +++ Z llr T ’ +++ new will introduce into cireolatio* oateh to S5a^ nagV n, the near future> » cop yrS ?a £ Ef 6W York 8un- Thifl ^ep will be bersome1?opp"rCco0iL 8llVer ^ th° desire t0 get rid °* « " * - +++ TTtilit^Tr!#8 P^Jished by the Illinois Committee o f the PnhK» te n e S paid. Z ' t " lhat «“ * “ •* 2 SSS&SS&iSsg-SS
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