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

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Federal Reserve Bank
OF BOSTON
Business and Money Conditions in the New England District
•• prepared by Frederic, H. CurtiM, Chairmen end Federal Reocne A1tea1.
Tllie report ie compiled oboul lhe lwentletla of eec,h month end l1 publi1hed for the info rmatioa
of membe r bank, and othen who h•"• ..,ieted in it• preperatioa

HosrnN, MAss., July 25 , 1919
There is apparently no abatement in the
general industrial acth·ity in New England.
The raw material market and labor unrest
have made the problems which our manufact urers face increasingly difficult.
The increased demands of labor for l;iighcr
wages, with increased inefficiency after these
demands arc m~•t, toget her with the ri ing _
cost of all material entering into our industries,
would be unsurmountable were it not for the
f.tct that orders contin ue In come in, the wholesaler, jobber, anti retailer h:ll"ing demands from
the public of such a character that t hey clo not
hesitate to place orders e,·en on the in crease<!
le,·cl. While the present condition of the
manufacturer is such that his profits arc somewhat curtaih:d, most retailers. on the other
hand, apparently arc able to procur.: an e,·cn
wider margin of profit than hcr.:tofor.:.
The high cost of buillling, owing to the
demand of bbor in the building trad.:, has
retarded construction. This has cau eel a considerable boom in real e tate where buildings can
be utilized without undue cost for alterations.
This is a p.:riod of the year when mon.:y
rates in this 1listrict are sea onably at their
lowest points. ll owe,·er, the indu trial acti\·ity,
together with the results of Go\'crnment fin:mcing, ha,·c kept money at a point where banks
arc only t:iking car,: of their ordinary commitments, and arc hesitating about taking on
new busine s calling for furt her advances.
Savings bank deposits in the district continue
to increase, and whtle it is impracticable to get
statistics covering the savings deposits in the
entir.: district, those of the Massachus.:tts
sa\·ings banks alo ne show an increase since the
first of the year of some $50,000,000, anti the
savings dcpo its of the Trust Companies, no
doubt, show a proportionate increase.
Eastern Massachu etts has probably
Labot been more affected by unsettled labor
condit ions than at any pr.:\·ious time. Strikcs
have occurn.'ll on the two larg.: t street railway
system aml at one large gas plant, shutting
consumers off from all supplies for three day .

There has been consid.:rable disturbance in
variou center . The shorta\(I! of skillt.•d labor
is becoming mor.: and more noticeable and there
docs not scem to be in any cente r much of a
surplus of unskilled workers.
Money rates ha\'e remained ex~I
' oney trcmely firm and have not reflected
the erratic con<lition pre,·ailing in the New
\'ork call rates. Call money is 6 per cent.,
with time money 5 1 _; per cent. to 6 per c.:nt.,
and commercial paper ranging around 5 p.:r
cent.. som.: at 5 •4 per cent. Prime bankers'
acceptances •JO days, 4 .36 per cent. cnclorsccl
and -I 1",; per cent. 11nenilorsed.
\V I
Sincc the suspension of Government
oo wool auctions, methods of doing busine s h:ll"e returned to almo t normal. The
demand , how.:,·er, is in excess of normal, with
mill buying all fine wool obtainable. Thcse
hea,·y purch:i cs of fine wool, which seem to be
for current need only, ha,·e caused prices to
:111'-ancc further and would indicate · an ever
growing shurtage in this grade of wool. Rel ief
from the e high price cannot be expected until
the Australian markets are open to the world
and suffici.:nt transportation becomes a,·ailable.
The medium grades of wool are in somewhat
greater demand with large upplie available,
which tend to pre\·ent such rapid ad\-ances
in prices as occurred in the case of fine wool.
The Western clip has been moved at prices
cqnsiclcr.1bly in advance of those a nticipatl!d
early this Spring. This clip probably will
excc.:d by an appreciable amount that of last
year.
Woolen mills, without notabl.: exception, re
operating to capacity, which is somewhat
limited on account of the difficulty in obtaining
skill.:d help. Go\'ernment orders have been
reduced to a negligible percentage of the
total production. Even with the entire capacity
used for commercial n.:eds; the demand is in
excess of the output.
Cotton mills are oversold and many
Cotton arc declini ng business for the future,
owing largely to the gn:at uncertainty of not

being able to obtain sufficient long staple
cotton. In general the mills wait until they
hav<: actually purchased the cotton before accepting order . Production is also limited by
a sh?r~ge of skilled labor. The difficulty in
o~tammg cotton of the de ired quality, together
with the fact that mills have been buying only
to cover order , has made the cotton market
Very quiet. Advances are continually beina
..
made, however, as ale occur.
The dem~nd for cotton good is extremely
hea,·y. e pecaally for the more fancy lines made
from long staple cotton. There have been
m_arked advances in prices for finished products,
w1~c sheetings being about the only line
which has lagged behind. Even this is
l>e_g in!'ing to show a decided improvement.
D1stnbutors arc loath to encourage speculation
and as a rule arc not buying largely in excess
of the demands of their normal trade.
Both retailers and distributor
G0 d
D
_of dry goods report little change
~
. ry
Sales
1n the s1tuat1o n from the past month.
continue ,·cry heavy, although increase over
the same period last yelr arc not quite as large
as in the Spring. The percentage increa e is
still considerable. Distributors find it difficult
to care for more than their regular trade.
Additional lines of good are becoming scarce
a the consumption is far in excess of current
production. The result of the silk hosiery
strike in the Sprihg is most apparent now, there
being a real vacuum in that line.
In the main reduction in output on the part
of manufacturers, due to shorter working hours
and Jes efficiency on the part of employee , has
neces arily increased the expen e. of producing
each article. Additions to plants are in some
cases under way in order to keep the capacity
up to the normal point.
Shoe manufacturer
Leather and Shoe• are producing at capacity,
with sales exceeding those of last year at th i
time, in unit pairs as well as in value. The
larger manufacturers seem to have provided
ufficient leather for their requirements and are
th us able to sell shoes on the basis wh ich
existed when present stocks were purcha ed.
In sor:ie lines, however, the demand is greater
than the supply, and salesmen have had to be
withdrawn. The pro pect is that both next
season's goods and th ose of the season after
will be sold at a considerable advance. Hides
continue to be very scarce and there is no
definite price at which a dealer may• obtain
them. Mo t purchasers are only too glad to
pay any price asked in order to supply their
needs.
While shipments of hides from South

America bid fair to be more free, this fact
does not cem likely to promise reduction in
prices, the hides having previously been purchased.
Wit h but few e. ceptions, reporting cit ie
Lumber and
Building Operations show appreciable iucrease in the ,-alue of new building permit
issued du ring June, both as compared with the
previou months and the ame month la t year.
This is e pecially noticeable in the case of the
cities of Worcester, New Bedford, Springfield,
and those in Connecticut, where number of
new dwelling houses arc under construction.
Although for the first ix months of this year
con truction in th is district is below the tenyear average, it is of such proportion as to have
caused an acute shortage in t he limited upply
of building material.
Price have jumped at frequent interval and
there seems no likelihood of the maximum
being reached in the immediate future. Grades
of lumber which fi,·c or six years ago sold for
twenty and twent y-three dollars per thou and
have reached forty-five and forty-eight dollar ,
and arc hard to obtain. T he mailer dealers
and tho e who old at low prices la t spring in
order to keep tock moving, are now without
lumber and must buy it wherever it is to be
•
fo und.
Recent showers were • a relief to
Crops some crop , but additional rain i till
needed in many parts of thi distri_c t. A good
hay crop was cut in Vermont and New I lampshirc, but in the re t of 1cw England it was
omcwhat lighter than usual Corn has made
excellent progre s, and potatoc , although below
normal in acreage, are in good condition. 1inor
crops promise good yields, while blueberric and
blackberries are abundant.
The following synopses from reports of
bankers outline local conditions in representative cities.
There is a great demand for
Bangor, Me. common laborers in the wood
arid at the mills. In the local money market
there is an active demand for money. Deposits
are growing in all the banks. Retail dealers
never have done such a volume of business.
Price is not a consideration if they have the
goods a customer wants. Paper manufacturen
are having a rather dull bu. ines
Local man ufacturing conPortland, Me. cerns re()<:>rt a nominal volume
of order and appear optimi tic as to the future.
The local labor situation is good with apparently little idlene s_ There bas been a good
demand for money with borrowing rate at
6 per cent.

There is no uncmployManchester, N. H. mcnt in this city other
than that caused by labor disturbances of a
comparati\'cly minor nature. There is, in fact,
a scarcity of skilled labor. Manufacturers arc
bu y except in ca cs where their output is
re trictcd by labor troubles. Retail merchants
report large sales. Money is in sufficient upply
to meet local demands.
.
Retailers are doing a good
Benamgton, Vt. business.
Manufacturer
am running along well and orders arc comi ng
fa ter. The local money market i somewhat
close. Labor is carcc and very un ettled.
Jewelry manufacturers
Attleboro, Mass. arc mrn ually bu y, omc
being months behind on their orde rs. There
is still a scarcity of help. Retailers appear to
be <loin::: excellent busi ness and a spirit of
optimism pn!\·ails. There is a strong local
demand for money.
Labor condi tions arc
Fall River, Mall. norm.illy quiet. There is
consi1ler.1hlc unnecessary unemployment, for the
mills :ire in many instance · short of th.: number
of hand nec1led. Mill are booked with onler
for en~ral month. ahead. The pre,·ailin"' rate
in the local moner market is 5¼ per cent. up.
:\lanu fac turers and retailers report a good and
profitable business. •
Manufacturer are all
Green6eld, Mau. busy and ar • m.1kin~ fair
profits. There is \'Cry little unemployment and
a demand for skillecl mechanics be,·ontl the
M1pply. Retail trade is excellen t and n1erchants
ay collection. arc satisfactory. There i a
good dcmaml for money.
The paper bu ·inc s i imHolyoke, l\la 51 • pro,·ing and most of the mills
.ire now running full time. The building of
hnusc • i gaining and money is much more
plent iful. There i not much unemployment,
c pccially on out ·ide work.
!\Iii! operatiws ha\'e
New Bedford, Mau. rcn•in:,1 an increase in
wages in the last two ye.1r air~rl·~a t in~ more
than So per cent., :rntl hours nf labor clecre;1sctl

.

'" ll•m1•shirr

\'trm on t
M ._.,•huoc:111

Rho.Jr hlaml
l ~nnnr,~i,-ut
Tot31

.......

:J/.l,J otl.13
1!!,h91.f,I

164, II!. 9S

9uildinl Permih

11eJ in Ilic Leadinl Cilie of
1hi1 Di tri<:t
J"t' ., I TO jn,· I

...

'"'' '-' 1111:1

::,,

ll. "l

U. 41

I

Pl'l

'"· c-,...

\ m,•ant

llrt,.. kton .
F:ill Ri,·rr .
Fi11:hhur~ .
Hartf,ml .
1.-:.,,rrn-.--t .

1, ... ,11
L,nn

Sis Month• S.lea of War Savini• Stamp
To Jt •~t W, 1919

M~int

from fifty.four to forty-eight a week. At pre ent
there is no labor unrc t. Mills ha\·c a hortagc
of labor and at present arc ha\'ing exceedingly
goo<l busincs . Just now there is quite a com •
petition for the purchase of house and a great
deal of new construction going on.
W
t
M
l ~1bor conditions are \'Cry
orces er, aH. uncertain. There i at pres•
ent a trike involving two thousand.
loulders
in foundries arc al o "all out ." The ga com•
pany recently had a strike wh ich is now citied.
Local money market i <]Uict but firm . Manufacturers are as a rule doing capacity bu inc s.
Retail trade is C\'Cn bet er than last year, which
was a record year.
P .
Business is good. Cotton
rovadence, R. 1• man ufacturers arc i;ctti ng
good prices, running fu ll, and only limited by
t he amount of labor a\'ailablc. In the machin•
cry trade there is a hortagc of skilled labor.
The same condition is reported by the mann•
facturer of hardware. l{ etail trade is fully up
to normal. There is a demand for se\·cr:il
hundred skilled worker · which cannot be suppliccl and farm laborcr • are hard to obtain.
•
::-.umba of unemployed is
Meriden, Conn. small an,I would ·eem to be
mostly incompetent or inellicicnt help. Cus•
tonwr arc buying freely. l\lanufacturcrs have
plcnty of order (1 11 their lwoks. and retailers
are doing a maximum amoun t of busincs .
,\ recent strike of un\Voterhury. Conn. :killed labor has been
satisfactorily ad justed with a .!5 per cent. wage
incrca c. A short~i:;c of labor exi!>ts, particularly unskille,I. .\ II concerns :ire \'ery busy and
the retailers report a ,·cry atisfactory rnlunu.!
nf lm~incs.. Local money rates are 6 per cent.

\\"o n.·tstrr

! ,'l •h,\.4. 9
;-11. ·\ . s1
~ 1!,0l I. " S

"·t. ...~U

Total Out1id~ of
Bo1ton .

0. 61,

Bo, ton

$~. 'tt,~. 1,,u. 11,,

so. -4

Tot ■I

.

.\ rft<>1tn1

lt>at11n

~ ;:, -. ~, 11•

!' .. 1, 0(,,

--·W.! . ....

~" . •H O

J;h,i:.:.t,

• 'Jt,. :,:,

l!ll, 11\
1, 31",<6!

- ! R. S/.
..,. ! I. 5S

~-.61 \
l,f,111. c;;(,
4 l "• .. ,,;

·~.!·-.-,'

/,,'1 , lh~

Cij_ j \

-;i:., '"";;

._ : 6 .tlS

.\ .!, ·h•o

.?iit~ • ., ...

Si-t, Ci~ ;

}, _:- ~ ,.tt4tl

1;#,, ';thl

-,i :-1:sn~

' ....... tit,

.!. -w:. ,l,c. .!
I<: , IS"

1, 166,Hh
l,IH.:•1•

r.1•J.'il ·W

SJll. 91
-.:1.! '111
•• !<6. 91
5. H
- 11. ~<
- l ;.!. ;s

I ~-. l~q

f,6 Ml

$IG,372,9S2 $7,ZSl,120

43.01
•~ - ;;
+ 26.18

J•H,"11

~1 and,r :n rr
Sr" llc~lfurtl
l'-t• ll» ·~n
l'nnl.u,d .
l-prini:tidJ

t ·H
tr.l(:\o>n

.! ,.? iS, 1-tS

.!, .. ◄ t. tn.!

IZ&ll ,467 $9.994.152

.
Bo ton Cleari & llou e fi&urH compare a followu
umber of Bank,
Capital
Circulation
Loans a.nJ Discounts
DcmanJ Deposits
Due to Hanl: s
Time Deposits
Exchangea for Clearinit
Due fro1u Banl:1 .
Cuh and Reserve with
Federal Reserve Bank,
Exceu Reserve and Cash,
Exchangu for eek

July 191 •111

)U<21. •111

11

...........

Joi, 20, •18

11

Sl4,200
4,703
557,693

(11 nouu.s.o10.u.n)

four Wttkl

Sll,200
4,966

69,532
21,HO

65,724
16,051

S7,563
12,977

416,129

402,914

316,791

11,803
21,304
IS,646

u lbc total c.Ur,a 10 "dr u,otkort' acaut11

11

Sll, 900
4,730
S80, 179
464,776
116,236
12,308
19,595
68,45S

46S,443
121,889

-

Cleuia& Route Baake ia Ill• lareer citiH ia dale diotrict

Cla-nou...i.o1Do11an}

Jut,

Bangor, Me . .
Fall River, M.as.
Hartford, Conn.
Holyoke, Mass.

481,S6S
424,263
123,353
14,945
15,888
90,lS7

Lowell, Mau.
ew Bedford, M

Fo■ rWt.tkl

Eadia,

r;t,'~ft

1, ., I~. •\ I}

f.U, 168
16,404
157,MS
19,819
23, 470
lS, 156
65,595
190,0ll
73, 7S7
29,175
77,270

11.

New Hann, Conn.
Providence, R. I.
Spring6eld, Mass.
Waterbury, Conn.
Worcester, Mau.

Total outoide ofBootoa
Bo•ton

$17,191
36,6 50
127, 1\5
11,0H
21,152
30,Hl
M,108
177,6H
61,460
i9, 118
61, 11111

-$649,985
--

$731,260
2,135,914

1,167,319

--$2.867,174

Total ell Citieo •

--$2,517,301
- - -

----

Condition of Forty-two Selected Member Banks
OH J LY 18, 1919
With Comparative Totals for June 20, 1919, and July 19, 1911
(In Tbo\lHlldl of l>ollart)
T.,e■t,•lhre•

1019

U. S. Bonds and otea
U. S. Certificates
Loans secured by . s. ohlig,ations,
Other loan, and inve tments
Re.em; F. R. B.
et Demand Deposiu
Time Deposi
Gov. Drpo,its

S27,08S
12,79S
16, 7S0
225,891
ll,532
1S9,450
72,401
11,490

Nin••••• l••II. • 111 llo1ton
Jt,alw l U
";, Ch:111rr
Jal, IS
Junt 20
1919
1919
la ,-ru
l" I~

B•••• oultlde of Boato•
Jun,20
% Chan1<
J•IJ 10
1019
191
la Jtar

1,1, Ill

SH,57♦

1S,896
7,15'1
8,584
224,6S7
13,491
1S4,424
6 ,811
12,427

20,749
16,619
228 , lll
13,920
156,9-0
71,809
19,SOO

+

SB,107
30,576
SS,734
S66,6SO
54,705
562,111
32,914
21,6H

70.ll
+ 78.15
+ 9S . IJ
. S4
+
+ . 30
+ 1.S9
+ 5.21

+

7 .S ♦

$14,693
ll, 707
50,341
586,5 ♦ 6

Sl,490
S19, 996
ll,357
62,890

.13,716
H,645
l , 3! 1
549,717
Sl, 163
495,04!
25 ,0! I

- 2.98
+JS .O!
+49.ll
+ 6.7 1
+ 2 90
+ 11 56
+11

♦ 9,821

- 5(,. 4'1

,.

Statement of Condition of the Federal Re~erve Bank of Boston
0 • Tllo•uodt of Doll,,.)

LIABILITIES

RESOUR~ES

/YIJ I •ID , ... 20. •to J•IY I . ·t•

1.i, t8, •10 I••• :IC. 111 l•IJ 19. •t
0

Gold Reserve against F. R. Note ,
Gold, Reuf1'e again t Deposita,
TotalGold .
Legid Tender and Silver
TotalRe11eneo
Diacounta secured by U. S. Sec.,
Discounts -Commercial Paper
Banken Acct. bought in open market,
U.S. Sec. pledged to secure circulation,
Other U. S. Securities owned
Total Earalq Aueta .
Uncqllected Item•
Other Reaourceo
Total ReauroH .

S7l,910 S70,56l
46,946
47,992
117,509
121,902
7,408
6,531
128,433 124,917
130,820 143,556
S, lSS
6,910
19,056
23,445
21,436
16,916
S61
S57
185,252
113,168
16,344
77,329
2,107
2,019
390,949 3911,619

F. R. Notes Net

SS9,616
Sl,160
110,846
2,953
113,799
57,809
28,164
24,68l

Ca.pita! .

Surplus .
All other Liabilitiea,

2,S ♦ S

113,401
4S,S4S
772
•273,517

$1 71, 961

!172,757 1121,466
16,631
44,023
IS ,Sll
101,514
93,439
S0,710
34,773
196,317
143,7«
6,4 4
6,177
6,177
2,996
S,206
75
3,034
1,104
1,751

F. R. Bank Notes Net, 16,668
Due Treasury U.S.,
13,643
106,6JS
Due Memben Net .
Collection ltema, etc. , 61,155
Groee Depolih, 182,133

"

Total U.bD\dn, 390,949

3911,619

273,517

OFFICERS
CHARLES

4.

FREDF.R(C H. CURTISS

MORSS

Grwn,1r

CHARLES E. SPENCER, J1..
Dq•t, Gl<Wn,.r

CHESTER C. BULLEN

Dq,-r,

c_,.,,.,.

CA,,i,...• ••d Ftdtr11/ Rt,- ,1,,.,
WILLIAM W(LLETT
CHARLF. f'. GETn:MY.
C111lli,,-

A1Ji,1at11 Ftdtr11/ Rt1tf"W

.1,,.,

A.11illll•I C:111/li,rt'

FRANK W . CHAS E
ERNEST M. LEAVITT
.,
L WALLACE SWEETSF.R
WILLIAM N. KENYON
HARRY A. SAUNDERS