Full text of New England Economic Review : August 25, 1919

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Federal Reserve Bank
OF BOSTON
Business and Money Conditions in the New England District
•• prepared by Frederic H. Curti~•• Chairman and Federal Reserve Agent.
Thia report ia compiled about the twentieth of each month and i• published for the information
of member bank• and otbera who have aa■i1ted in its preparation .

BosTON, MASS., August 25,
The industrial unrest has overshadowed all
other factors in this district during the past
month. The interference with transportation
facilities, traction and railroad, has placed a
burden on all lines of industry which has caused
for the most part a general slowing down,largely
due, however, thus far to apprehension of the
manufacturer rather than through any direct
slackening up of business demand. Retail
business continues exceptionally good. The
banking situation is much improved over the
previous month . Savings banks report in all
but a few sections increased deposits, and the
demand on commercial banks for accommodation, especially from cotton and woolen industries, has fallen off to a considerable extent.
Money rates, with a continued demand for
Government financing, remain much the same,
banks for the most part limiting their commitments for their own customers, preparing themselves for the usual seasonable fall demand.
Owing to redemptions of CertifiMoney cates of Indebtedness and lessened
reserve requirements, member banks have,
during the last few days, reduced their borrowing from the Federal Reserve Bank. Although
money has been in more plentiful supply rates
have remained extremely firm and have not
reflected the extreme conditions prevailing in
the New York market. Call money is generally
6 per cent., with time money at 5¼ to 6 per
cent. and commercial paper ranging around
5¼ per cent., some at 5¼ per cent. Prime
bankers' acceptances 90 days, 4-f'6 endorsed
and 4¾ unendorsed.
Labor troubles continue to cause
Labor great local inconvenience to the people
of New England, being largely confined, however, to the transportation field. The strike
of railroad shop men and others resulted in a
freight embargo which, during its continuance,
prevented shipments to and from the mills.
From correspondents generally come reports
that substantially the only unemployment is
that caused by unwillingness to work, the only
idleness being due to strikes. The shortage of

1919

skilled workers is everywhere noticeable with
the possible exception of the building trades.
Employment offices have more requests for
workers than can be supplied. Unskilled labor
is decidedly short.
W
The wool market is somewhat quieter
00 I
than a month ago. Prices continue
extremely firm. Most of the mills have sufficient wool with which to complete prei-ent contracts, but have no surplus supplies. Dealers
feel that they are not warranted in buying much
wool at the present price level and they are not
expected to be purchasers at the London auctions, even should the quality be such as is
needed here. Some mills may take advantage
of the opportunity to get certain grades of
wool. The needs of European mills are so
great, however, that it does not seem likely
that prices will fall sufficiently to make it
profitable to import wool here. This year contracts for fall delivery are still in process of completion and many customers have already placed
orders for next season. This has kept mills
going at about their normal capacity. Recent
offerings of the American Woolen Company for
next spring were so small that many buyers got
less than 10 per cent. of their usual needs.
Uncertainty is again in evidence
Cotton among the cotton mills. Some resales of goods have been made at cut prices.
Most mills refrain from meeting these cuts as
they have plenty of business booked. On the
other hand, sales for spot delivery have taken
place at much higher prices. Although mills
would like to operate night and day, it is
impossible to obtain help for this purpvse,
owing to the higher wages being earned by
employees who do not feel the need of working
nights for additional pay. The cotton market
continues about the same. Sales of the shorter
staples show real declines in price. while long
staple has not ceased to advance. Some holders
of cotton are now accepting offers which were
turned down only a short while ago.
An unusually large amount of
Dry Goods -dry goods are being sold. Those

who earlier sold for fall delivery are finding it very difficult to make these deliveries
on time. Manufacturers have in some cases
actually demanded and received more than
their contract price, due to unexpected wage
increases. This has caused considerable advances in the cost to the consumer. On the
wh ole, prices may be said to be somewhat more
steady, and the larger buyers, although still
committing themselves for a lead, are keeping
a sharp outlook for indications of a change.
The volume of shoe
Shoes and Leather sales is only limited by
manufacturing capacity, but manufacturers hesitate to make expensive additions to plant owing
to the uncertainty of future conditions affecting
busim:ss. So much of the present call is for
the better grades of shoes that one manufacturer reports that parts of leather left over
are being sold to Europe rather than beiflg
used in. cheap shoes, which do not have a
ready m~rket. An interesting sidelight on the
psychology of the current attitude of the public
on the high cost of living is furnished by an
instance cited of a lot of shcies which were
moving slowly being cleaned up at once on
the price being r.iised $ 1.00.
Leather is not in quite as great demand as a
few weeks ago, but while prices have become
steadier it is still high, with further increase
anticipated. Hides are scarce, with European
buyers outbidding Americans in foreign markets.
. .
Although of good
Lumber and Butldmg volume, the demand
for lumber at present high prices has fallen off
somewhat. During the strike of railroad shopmen stock accumulated to such an extent that
some mills shut down temporarily, but with the
lifting of the embargo production was resumed.
The present outlook is, however, that this
winter's cut will be smaller than usual since
lumber meo do not want to lake any chance of
having high cost material left on their hands.
There seems to be plenty of money and
materials at high prices available, but with
labor costing about I 50 per cent. more than
before the .war, the incentive to resume building operations on a comprehensive scale is not
keen, though in a few localities there are real
building booms with more or less speculation
in real estate.
Fair weather was favorable for the
Crops completion of haying and harvesting
of oats and tobacco. Except where the rainfall
has been insufficient corn is in excellent condition. Potatoes continue generally in good
condition with no complaint of blight. Early
peaches are being picked in Connecticut.
Worms have done considerable damage in many

localities to beans. Other truck and garden
crops are in good condition.
.
Exports from Boston for
Foreign Trade the month of July were $3 1,ooo,ooo against S 13,700,000 the previous year.
Imports at $27,000,000 showed an increase of
only $ 5,2 00,000 over July, 1918.
Farmers in this section will
Bangor, Me. obtain most satisfactory results
from their summer operations, both as to prices
of products raised and quan tity. The deposits
of the local banks are, it is believed, higher at
this time than they have been for many years
past, but there is a continual demand for
money locally.
.
Business is • prosperous.
Lewi ston, Me, Manufacturers and retailers
are having a good business, mills and shoe shops
are operati ng at capacity, and there is very little
unemployment. The local demand for money
is good, there being no surplus of unloaned
cash in the banks.
The retail merchants report
Portland, Me. a large volume of business
due to the unusual number of summer visitors
in this vicinity, an especially large number
being from Canada. Wholesale trade also
reports a large volume with satisfactory collections. Labor conditions on the whole are
satisfactory and the number of unemployed
is small. Local rates for money are 5 and
s½ per cent.
Manufacturing plants seem
Concord, N. H. to be running on full time,
with plenty of orders. Stone industries are
busy and laborers are well employed. Retail
merchants report business good, and there is a
very good local demand for money, with the
banks keeping their surplus well employed.
Industrial conditions are
Brattleboro, Vt. quite satisfactory. Manufacturing plants are running to capacity, and
there is a good demand for skilled and unskilled labor, with practically no unemployment.
Retail trade is good in spite of the high prices.
The banks find a good local demand for all
loanable fund s, and so far as we know, are
buying no commercial paper.
The mills report a short.
F all River, Mass. age of help and all who
care to work can find employment. The retailers report a good trade and people spending
money freely. The local money market is well
supplied with funds, deposits being well maintained.
The paper and textile
•
Fitchburg, Mass, industries are all extremely
busy. Machinery, however, is not so active,
but is steadily increasing its business. Apart

from the foundries where a st rike is on there is
very little unemployment. Money continues in
firm demand.
.
The majority of shoe
Haverhill, Mass. manufacturers are supplied
with orders to work to full capacity until
January 1, 1920. Among the shoe workers
there is no noticeable- unemployment. Th ere
is unrt:st among labor, and practically for the
first time in the history of Haverhill, all labor
is organized. There is the usual demand for
money, and collections are good. The retailers
report that their business has been good, with
some falling off at present.
Business is good. As
New Bedford • Mass. fo r labor, there is still
a scarcity in the cotton mills, and in nearly
every other industry of any size more help
could be used were it available. Money with
our banks is in good demand and rates firm at
from 5½ per cent. to 6 per cent.
The woolen mills are all
.
Pittsfield, Mass. busy. No one need be out
of employment if he desires to work. The
retail stores are doing a very good business at
high prices. Banks are rather short of funds.
.
Labor conditions here
Sprmgfield, Mass. are in a very unsettled
condition. There are some strikes on at the
present time, but except for this cause there
is practically no unemployment. There appears
to be, as usual, ample money to take care of
business needs here in the city. Business being
done by our manufacturers is good in volume.
With retailers there is the usual summer quiet.
Practically all plants,
Pawtucket, R. I. either in textile or metals,
are running to capacity. Their books are
crowded with orders. Retail trade is brisk. We
have noted a marked increase in the demand
for money for manufacturing purposes as well
as for building and mortgage loans during the
last two months.
Money has been generHartford, Conn. ally em ployed. Rates have
closely approximated 6 per cent. Outside
investment in commercial paper has been greatly
restricted. Manufacturing has been prosperous,
with increasing orders and at increasing prices,
A,

JANUARY

of Quota

Sub1cription1
$1,719,000
1,217,000
786,SOO
29,695 , 000
3, 516,000
s,00 2 ,000

$3,827,000
1,312,000
2,00 2,000
27,3 60,000
4,411,000
4 , 888,000

93 .
39.
109.
80.
102.

$41,935,500

$ 43,800,000

96.

Quota

Subscribed

45 .

1 TO

AUGUST

No.

No.

Pcrmit1

!9S
119
110
478
171
290

Brockton

Lowell
Lynn
Mancheste r
N,:w Bedford .
New Haven
Portland
Sprin,-fi eld

207

212
l18
71 4
191
ISO
798

Worcester

Total Outside Boston,

4,387

Total .

Amount
422.142
411.481
166.710
1.601,S26
bl9.b41
1,011.711
480.28!
110.71>4
2.609,7~
1.111.947
712.117
1. 744. 786
1.919.~14

- --

741

$15,871 ,052
7.827.987

. 5,130

$23,699,039

Bolton

=

1
1918

1919

Lawrence

1920
Per Cent.

Maine .
.
New Hampshire
Vermont
.
Massachusetts
Rhode Island
Connecticut
Total

Buildina& Permits for New Conotruetion ls■aed in
the Leading Cities of thi■ Di■triet

Fall River
Fitc:hbur1
Hartford

Sales of Certificate, of lndebtednesa
SERIES

labor being fully employed where willing to
work ; but strikes being troublesome in some
quarters. Building is quite active notwithstanding material is high. The tobacco crop looks
especially promisin g.
There is practically
New Britain, Conn. no unrest apparent on
the part of labor in this city ; in fact, there is a
shortage of labor. The demand for money is
greater than for the past two or three years,
both for commercial purposes and for building
purposes. Manufacturers and retailers are
doing a record business, and have been for the
past two or three months.
Business conditions
New Haven, Conn. are excellent, most
facto ries bei ng unable to take care of all the
business offered. There seems to be little, if
any, unemployment. The local money market
shows a decided tendency towards stringency,
most of the banks being short of money and
large borrowers, with very little, if any, outlook
for any easing-off.
.
Woolen and cotton mills
Norwich, Conn. are running on full time.
One of t he successful sporting arms plants is
doi ng a good business, while the largest "munit ion" plant has been closed since J uly first.
The money in the banks seems to be very fully
loaned up. Aside from men out on strike, the
number of unemployed men is small.
•
Business conditions in a
Providence, R. I. general way are good. The
st reet car strike which lasted about 18 days
and involved the tie-up of all cars operating in
the city and State has been settled with an increase of wages from 48 cents to 56 cents an
hour. The textile business continues good,
especially in woolen lines ; but the machinery
business is not showing any special improvement over a previous report. The jewelry business continues excellent, with a scarcity of help.

Permit,
79
88
19
2!9
77
lib
';fl
121
11 1
400
91
240
449

%

Amount Chanr e
81. 111
196
216.791
71
121.772
16
21
1. 117.162
721.011 - 11
748.001 + ll
47.410 +918
99.IS l
414
411. 717
110
2,482.911
41
211.! S2
2~
119.0'IO
212
811.881
128

1
!
i

$7,927,854
l.082.162

+ 100
+rn

2,484 $11 ,010,216

+ 115

2,177
107

- - - -- -

Boato11 Clearin& Route fiiure1 compare

H

ClearinC House Baab in the lar,er oitiea in thia cliatriet

follows;

Repon the fello•iDL o lbe lotal cbariee to tbelr depoth.on' a«oaDII,

(la Thooundl of Dollan)

10. •19

Aur. 17, •18

11
$33,200

112,777
11,688
19,217
85, 366

11
$34, 200
4,703
557,693
465,443
121,889
11, 803
21, 304
85,646

68,550
21, 790

69,53 2
21,140

61,392
14,909

350,067

416, 129

300,1 50

Aur. 10. •19

Number of Banks
Capital
Circulation
Loans and Discounts
Demand Deposits
Due to Banks
Time Deposiu
Exchanges for Clearing
Due from Banks .
Cash and Reserve with
Federal Reserve Bank,
Excess Reserve and Cash,
Exchanges for week

July

11
$34, 200
'1,7 37
541 , 999
455,909

Un Tbouun.dt or Dollars)

Foor Weeki

Fou.r Wu.Ju

Endinr
Aar. 13, •10

July 16. •19

$19, 603
33,832
156,178
20, 471
21,539
34,875
68, 65 8
192,063
90,022
29,17S
65,026

!122,1 68
36,404
157,6-H
19,889
23 ,4 70
35, 156
6S,59S
190,031
73, 757
29, 875
77,270

$731,442
2,023,546

$731,260
2,135,914

, $2,754,988

$2,867,174

Bangor, Me. .
Fall River, Mass.
Hartford, Conn.
Holyoke, Mass.
Lowell, Mass.
New Bedford, Mass.
New Haven, Conn.
Providence, R. I.
Springfield, Mass.
Waterbury, Conn.
Worcester, Mass.

4,741
495,295
441,073
117,911
16,556
16,858
82,261

Total outside of Booton
Boston
Total all Citiea .

Eodiae

Condition of Forty•two Selected Member Banks
ON AUGUST 15, 1919
With Comparative Totals for July 18, 1919, and Augus1 16, 1918
(In Tbou1and1 of Dollan)

Tweat y•thrce
Aur. 15

1919

$26,312
16,936
15,221
179,240
13,867
168, 568
73,659
12,253

U. S. Bonds and Notes
U. S. Certi6cates
Loans secured by U. S. obligations,
Other loans and investments
Reserve F. R. B.
Net Demand Deposits
Time Deposits
Gov. Depo&its

Baak ■

July 18

1919

$27,085
12,795
16,750
225, 891
13,532
159, 450
72,401
11,490

Nineteen Banik• ia Bo•ton
July 18
Aar. 16
% Chan,.
1919
19 18
in year

out1id e of Boeton
Aur. 10

1918

$15,811
15,883
8, 168
225,520
12,91S
157,487
69,863
18,281

% Cbanr•

Aur. 15

1910

in year

+

$ 14, 383
38,859
42,683
439,212
57,83S
554,182
33,083
42,924

66. 41

+ 6.62
+ 86. 34
- 25. 82
+ 7. 37
7.03
+ 5.43
- 32.91

+

$13,307
30, 576
55, 734
566, 650
54,705
562, 181
32,994
21,674

$13,95 2
38,706
31,617
552,670
54,5 21
495,037
27,058
68,662

+

3.08
. 39
. 35
-2 5.8 3
+ 6.07
+11 . 94
+22 .26
-S9.96

+
+

Statement of Condition of the Federal Reserve Bank of Boston
Un TboaHndt of Dollul)

LIABILITIES

RESOURCES
Aor. Hi, •19 July 18, •19 ,. ••. 16. •18

Gold Reserve against F. R. Notes,
Gold Reserve against Deposits,
TotalGold .
Legal Tender and Silver
Total Reaenu
Discounts secured by U. S. Sec.,
Discounts- Commercial Paper
Bankers Acct. bought in open market,
U.S. Sec. pledged to secure obligation,
Other U. S. Securities owned
Total Earninll A11et1 .
Uncollected Items
Other Resources
Total Reaoureea .

$87,1 24
72, 202
159,326
8,820
168,146
111,748
8,433
25,184
21,436
553
167,354
70,341
2,284
408,125

$73,910
47,992
121,902
6,531
128,433
130,820
6,910
23,445
21,436
557
183,168
77,329
2,019
390,949

Aor. 15. •19 Jaly 18, •19 Aur. 10. •18

F. R. Notes Net
$191,077 $178,961 $112,857
F. R. Bank Notes Net, 21,376
16,668
Due Treasury U. S. ,
5,54 2
13,643
9,166
Due Members Net .
108,523
106,635
93,769
38,664
Collection Items, etc., 67,871
61,855
Gro11 Depo1i11, 181,936 182,133
141,599
Capital
6,937
6, 877
6,474
Surplus .
5, 206
5,206
7S
All other Liabilities,
1,593
1,104
2, 104

$64,361
73,327
137,688
2,629
140,317
·42,813
22,168
21 ,61 6
2,362
88,959
53,066
767
283,109

Total Liabilities, 408,125

390,949

283,109

OFFICERS
CHARL ES A. MORSS

FREDERIC H. CURTISS

Go'1Jtrt1or

Cltairmat1 and Federal RtJe~ /lgent

CHARLES E. SPENCER, Ja.
Deputy GO'Wrnor

CHESTER C. BULLEN

WILLIAM WILLETT

Dq,uty Go<u,rnor
/IJ1i1tant Casltitri

Ca1/ti,r

CHARLES F. GETTEMY
llufrtant Federal R,11r<t11 llgtt1t

FRANK W . CHASE
ERNEST M. LEAvrrr
L. w ALLACE SWEETSER
WILLIAM N. KENYON
HARRY A . SAUNDERS