XIX. MANUFACTURES W. M. STEUART INDUSTRIAL CONDITIONS Legislation Affecting Industries.There were many influences at work during the year that suggested caution and conservatism in all industrial undertakings, and almost the entire period was one of great irregularity in manufacturing activities. The feature that received the most serious consideration, and which apparently had the effect of retarding development, at least during the first half of the year, was the tendency to enact legislation to control or restrict industrial enterprises. The first year of the Democratic Administration was to an unusual degree a period of practical achievement in legislation that had a direct or indirect bearing on manufactures. It was the first year of operation under the new tariff. The reorganization of the finances of the country in conformity with the provisions of the Federal Reserve Act involved considerable readjustment of the banking system. The income tax was put in operation as a part of the scheme of Federal revenue. Trading in cotton on the exchanges was regulated and restricted by legislation. A Federal Trade Commission was established for the investigation and control of corporations engaged in interstate commerce, and the Sherman Act was extended by the Clayton AntiTrust Act, which makes guilt personal. The law granting exemption from tolls to coastwise shipping passing through the Panama Canal was rescinded. (See also I, American History.) It was claimed that the feeling of uncertainty during the period in which these laws were being tried out and investigations being made tended to retard development. The tendency of the Administration to foster legis а lation for the regulation of large industrial enterprises was commented on freely in the press, and in many instances adversely. There was great protest, especially in the eastern states and in business centers, in response to the President's statement that the depression of business was based on "psychological" reasons. The impression that legislative action, either in the enactment of laws or in the conduct of investigations, was having a depressing effect on manufactures became so pronounced in some branches of industry that certain organizations petitioned the President to postpone further action of this character until business had time for readjustment. The President replied that there was no material condition or substantial reason why business should not be in the most prosperous and expanding condition. General Conditions During the Year. The weekly commercial reports on industrial conditions do not indicate a profound or long continued depression during the year. The year 1913 was one of the most successful from an agricultural standpoint that the country has ever experienced, and the export trade in these products touched figures never before attained. At the close of that year the leading industries, except iron and steel, indicated fairly satisfactory conditions. The principal railroads petitioned the Interstate Commerce Commission for permission to increase freight rates. The decision on this petition was delayed and the railway companies deferred making purchases or entering upon new improvements. This action retarded activities in many branches of manufactures. During the winter and spring months industrial activities were characterized as irregular. The manufacturers of textiles were, as a rule, well engaged. The manu-viously been imported; with the exfacture of iron and steel was appar- ception of foodstuffs and war supplies ently the one important industry in there would be a rapid falling off in which there was a persistent tendency the European demand. toward depression. The production of all kinds of pig iron during the first half of the year was considerably less than during the last half of the preceding year and there was even a greater reduction when compared with the first half of 1913. The falling off in the production, however, does not measure the full extent of the loss sustained by the industry during the half year. In addition, the prices dropped to the lowest level reached in a long period of time. The situation in the majority of industries, how ever, was benefited by the absence of large stocks. As the spring season advanced there was a general tendency toward improvement, and greater optimism. The growth of confidence was especially manifest in the agricultural sections and was aided by the government reports indicating large crops in all the staple products. (See also XIII, Economic Conditions.) The industries in which dyestuffs are used and the manufacture of chemicals, druggists' preparations and similar products were among the first to be affected. A large proportion, probably 90 per cent., of the dyestuffs used in the United States, were imported from Germany, England, Switzerland, and France. By far the largest quantity of imported dyes, especially the newer and more desirable varieties, come from Germany. The blockade of the German ports stopped this supply completely. This was most disastrous to our carpet and rug factories, as well as to the wallpaper, linoleum, leather, upholstery, and other industries in which large quantities of dyes and coloring matter are used. There are a few prominent aniline-dye manufacturers in this country, and they were immediately urged to begin the manufacture of dyes similar to those heretofore imported. The United States is one of the Effect of the European War on largest drug-consuming, though the Manufactures.-The uncertainty at- smallest drug-producing, countries of tending industrial activity so pro- the world. The war, therefore, found nounced in the early months of the instant reflection in the drug industry year had been overcome to some ex- by halting the gathering and shipping tent, and the discontent incident to operations abroad at a time when a legislative activities largely counter- large percentage of the European boacted when the European political tanical drug crops were being harvestcomplications caused acute unsettle-ed, and those of Asia and Africa were ment there, and as a precautionary awaiting shipment. measure the security markets in this country were closed. On Aug. 4 Great Britain entered the European War. This action had more direct and serious effect on the industrial activities of the United States than any other event of the year. Foreign trade was immediately disorganized, very quickly the value of imports exceeded exports and the net balance of trade was against us. There was a great diversity of opinion in the technical and general press concerning the immediate as well as the ultimate effect of the European War on our manufactures. It was evident that the United States would be called on to supply a large part of the foodstuffs needed by Europe, as well as to fill a great many of our domestic requirements for finished goods that had pre The war should certainly stimulate the domestic manufacture of laces, veilings, trimmings, toys, silks, velvets, perfumes, and other articles which were largely made in France, Germany, or Austria. The consensus of opinion seems to be that in general the war would be of advantage to the American manufacturers; by the first of October orders were being received from the belligerent nations for various products, and manufacturers were beginning preparations to capture at least a part of the LatinAmerican trade which has been largely monopolized by European countries. Magnitude of Domestic Manufactures.-The Federal Government has been making arrangements for the next quinquennial census of manufactures which will cover the calendar Financial Failures in Manufactures. | Austria-Hungary, were purchasing -During the first nine months of the year there were 3,221 failures in manufacturing enterprises, with liabilities amounting to $94,195,478. During the corresponding period for 1913 there were 3,042 failures, with liabilities of $88,058,194. The failures by months for the two years, as reported in Dun's Review, were as follows: 1914 1913 1914 Jan.. 407 395 $16,780,939 374 340 6,335,413 March. 366 317 11,528,528 April. 347 341 6,424,059 10,340,189 297 343 9,568,017 9,474,100 16,168,970 1913 $8,762,357 7,990,054 11,254,770 7,575,263 13,320,101 military supplies, automobiles, cotton products and other commodities in large quantities. The balance of trade again shifted to the export side, which in September exceeded the imports by $16,247,722, against an excess of imports amounting to $19,398,776 in August. There was considerable improvement in the financial situation and plans were apparently maturing to handle the great commerce expected to come to the United States. (See also XIII, Economic Conditions.) Exports of Manufactures.-The partially manufactured and finished products exported during the first eight months of 1913 amounted to $1,016,177,575. The total for the same months of 1914 was $833,290,276. Considering each month of 1914, the value of the exports of manufactures was less than the value for the corresponding months of 1913. As Foreign Trade.-While the abnor- the year advanced these differences bemal business conditions created by the came more pronounced, until the war continued and caution and re- European War caused them to drop trenchment characterized manufac- to a most alarmingly low figure. tures, there was a slow but steady While the exports of manufactured tendency toward improvement. By products have never been sufficient to October representatives of the bellig- be a controlling factor in the induserent countries, except Germany and trial activities of the country, they $129,994,646 $111,137,599 $30,875,188 $29,179,696 $34,618,264 $29,522,534 125,132,610 102,330,715 31,267,405 22,153,990 31,643,366 28,491,259 132,584,703 119,585,317 28,759,084 22,989,066 35,216,394 32,856,618 133,886,701 113,990,379 26,178,111 19,588,017 37,044,590 31,844,607 133,250,762 109,112,916 24,937,913 20,117,749 37,050,329 30,431,865 120,940,209 109,900,929 23,737,499 20,075,216 31,453,499 31,755,039 117,680,583 100,091,674 23,138,221 17,988,203 33,730,895 29,584,204 122,694,871 67,162,412 23,957,583 18,596,504 34,026,345 16,208,545 The Textile Industries.—The textile | At the beginning of the year the manmanufacturers were among those most concerned in the new tariff regulations, and there was considerable uncertainty as to the effect of the reduction in duties. While there was some irregularity in the activity of the mills during the first half of the year and some reduction in output, by the middle of the year conditions were, on the whole, favorable. Interest was largely centered on cotton production and manufacture. ufactures, especially in New England, were depressed; the uncertainties attending the active competition of the foreign manufacturers, as well as other conditions, tended to curtail the production. Confidence was gradually being restored when the war demoralized the industry. Measured by the mill consumption and active spindles, the industry was wonderfully stable during the entire year, and, in fact, showed some advancement over 1913. The statistics indicate that for the country as a whole normal conditions prevailed in the industry. In some localities, however, there was at times considerable depression. Considering the commercial year, which ended Aug. 31, the consumption of cotton in manufactures exceeded all previous records, although it was reported that the cotton-mill business was less remunerative than during the preceding years. There was a considerable addition to the spindlage during the year, especially in the southern states. With the declaration of war the export of cotton ceased. The exports of raw cotton during the fiscal year 1914 amounted to $610,475,301, and formed 26 per cent. of the total exports. It exceeds in value that of manufactures of iron and steel, breadstuffs, and mineral oils combined, the next three classifications in the order of importance. The exports of raw cotton and linters during the year ending Aug. 31, 1914, was equal to 61 per cent. of the total production from the crop of 1913. The exports of cotton manufactures during the fiscal year 1914 amounted to $51,467,233; of cottonseed oil, $13,843,179; of cotton-seed cake and meal, $11,007,441; and of cotton seed, $215,115. The complete cessation of this enormous export trade necessarily demoralized the domestic industry. The price of cotton dropped from 13 to eight cents or less per pound. The exports cannot regain normal conditions while the European War continues. England is the principal purchaser of American cotton, and while her takings will probably increase notwithstanding the war, it will be necessary for the domestic mills greatly to increase their output in order to give permanent relief. During September the consumption of cotton by American establishments amounted to 442,583 bales, as compared with 408,960 bales in August and 470,132 bales in September, 1913. While the consumption was considerably less than during the same period of 1913, the tendency in 1914 was toward an increase. (See also XIII, Economic Conditions; and XVII, Agriculture.) The Iron and Steel Industry. The atistics of the production of pig on show that the annual output in creased from 53,908 long tons in 1810 to 30,966,152 long tons in 1913. The production was the largest annual output in the history of the industry, and exceeded that of 1912, which was the next largest, by 1,239,215 tons. Basic iron made with mineral fuel was the principal grade manufactured during 1913, the production amounting to 12,536,693 long tons. Of the total production 30,326,130 long tons, or 98 per cent., was bituminous, chiefly coke pig iron. A large production of steel was a concomitant of the unusual output of pig iron. The production of all kinds of steel ingots and castings for 1913 amounted to 31,300,874 long tons, while that of 1912 was 31,251,303 long tons. Notwithstanding this great activity, the year 1913 ended with numerous idle plants, and it was estimated that the steel works were being operated at barely 50 per cent. of their capacity. These conditions extended over the first part of 1914, and the lowest daily average production of pig iron was reached during January, when it amounted to about 60,808 tons; the highest average, 75,738 tons, was reported for March. These averages are very low as compared with those for prior years. The range during 1913 was from 82,057 tons in August to 92,369 in February. The production for the first half of 1914 amounted to 12,536,094 tons, as compared with 16,488,602 for the first half of 1913. Detailed figures are given on another page (see XIII, Economic Conditions). During January the industry experienced one of the longest and most extensive holiday shutdowns of its history. By the latter part of January there was some increase in the volume of business. The rolling-mill operations gradually increased, and the largest monthly production of pig iron, 2,347,867 tons, was reported for March. There was a decrease in the output during April, and the production continued to fall off. In June there were about 197 active furnaces representing a daily production of about 63,916 tons, or only slightly more than the rate in December, 1913, when the industry was at its lowest ebb. During September the industry was stimulated to some extent by in |