UNIVERSITY OF CALIFORNIA AT LOS ANGELES OWiVb: KSITY of CALIFORNM U>S ANGELEa UBRAKY / U. S. DEPARTMENT OF LABOR INFORMATION AND EDUCATIOxN SERVICE DIVISION OF PUBLIC WORKS AND CONSTRUCTION DEVELOPMENT ECONOMICS OF THE CONSTRUCTION INDUSTRY t\SE 3HINGT0N GOVERNMapt PRINTING OFFICE 1919 U. S. DEPARTMENT OF LABOR INFORMATION AND EDUCATION SERVICE DIVISION OF PUBLIC WORKS AND CONSTRUCTION DEVELOPMENT ECONOiMICS OF THE CONSTRUCTION INDUSTRY WASHINGTON GOVERNMENT PRINTING OFFICE 1919 i37i5t) William B. Wil30N', Secretary of Labor, KoGER W. Babsox, Director (•< niral Information and Education Sirricc. Franklin' T. Miller, Director Ditisicn of Fiddic Worls and Construction Development. =; 1 «t 155 i; 5 ^ A 5 CONTEXTS. Page. Letters of Transmittal 7 I. Summary 13-17 PiU'pose of Investigation 13 Scope and Methods 13 Findings 15 II. The Decrease in the Purchasixg Power of Money 19-39 ( '"The Xew Price Revolution," by Prof. Irving Fisher 19 I The Xew Commodity Price Level 23-39 ' ^^Tiy prices were expected to fail after the war 23 I The present situation 24 The role of inflation 25 The waiting policy of buyers 25 Production during the war 26 What the business man still fears 30 Costs of production 31 Increased efficiency 82 Efficiency and wages 33 Demand for construction materials 36 Demand for consumers' goods 37 Conclusion : 39 III. Cost and Supply of Construction Materials i 41-176 Summary of Findings 41 Acknowledgments 42 Comparison of prices of building materials with prices of other com^' modities 42 Comparison of prices of iron and steel products with prices of building materials 49 Comparison of war prices in America and certain foreign countries 54 Civil Vrar prices and the Civil War reconstruction period 73 Course of commodity prices during the six months foUo^A-ing the armistice. 80 Increase of cost of construction 86 Lumber 90 Iron and steel products used in construction 108 Clay iKoducts 110 Quarry products 126 Cement 137 Sand and gravel 145 Glass 154 Paint materials 161 Miscellaneous building materials 169 IV. Labor and Wages in the Construction Industry 177-203 Xew Conditions 17*' Attitude of the Government toward Labor in the Construction Industry. . . 179 Wages and the Cost of Living 180-187 Earnings in 1914 and 1918 ISO Union wage rates from 1913 to 1918 -' IS- L'nion wasre rates in the building trades in 1914 and 191S 1S3 4 CONTENTS. IV. Lahoh and Waoeh in the CoNSTRUcnov Jni.usthy— Ooniiiiu«<]. Wa^f^H and C<>hI of Living— Oontinufd. '"'^t'''- Union wii^'o nili-s anH<; in the cost of living '..!:!.'.:.. l^'S ' 'oHt of living and wages in 1918, with parlicnlar reference to the wage rate in the building trades 1)^6 Tite Wage Rale of ]!)in 1H7 i]Hifienmi)anies, building and loan lussociations, insurance companies 206 Secnirity required 210 Rate of interest 210 Duration of loans 211 Terms of renewal 212 Terms of principal reduction 212 Title insurance companies of New York 213 Torrens system in New York 214 New York law legalizing investments and certiticates when they cover unencumbered real estate 215 Supply of Cajiital Furnished by Each of the Chief Lending Institutions. 21G-227 Sources of real estate loans in 1913 216 Increase in real estate loans by banks, 1913-1918 216 Increase in combined real estate loans of banks, insurance companies, and building and loan associations, 1913-1918 219 Increase of real estate loans compared with various indices «.■' Liiiional expansion 220 Real estate loans of banks compared with their total resour* es 221 Resources of saving banks, insurance companies, and building and loan associations, compared with resources of banks other than sav- ings banks 221 Real estate loans of New York banking institutions 222 Developments during 1917 and 1918 227 Factors Tending to Restrict the Supply of Capital of Building Enterprises and Permanent Mortgage Loans 228-234 Introduction 228 War restrictions 229 Lack of standardized methods 229 State laws not to blame 229 Real estate loans suffer from discrimiuati<.>n in rediscounting 230 Need for improved facilities 233 Conclusions 234 VI. Rdnts and Land Values 235-240 Rents of Ilousea and Apartments 235 lousiness Rents . 237 Land Values 237 Real Estate Bookkeeping 238 Yll. Deferred Constrvctk.in • 241 VIII. Bibliography 249 CONTEXTS. LIST OF CHARTS. I. Comparison of rise in l>uilding materials and all oilier commodities. .... 43 II. Comparison of rise in building materials and other commodities 47 III. Comparison of rise in various )>iulding material groups 48 IV. Relative prices of pig iron, iron ore, and coke facing p. 52 V. Relative prices of steel rails facing p. 53 VI. Maximum rise of the price level in the Unitt-d Stales and other coun- tries 57 VII. Comparison of prices of 92 commodities, Civil War and i^rescnt ^var 72 VIII . Fluctuations of gold and commodity prices Civil War period ' 78 IX. Building materials prices, Civil War and present Avar 79 X. The fall of the price level during the period of readjustment 82 XI. Comparison of price fluctuations, Avheat, steel, and lumb^-r 107 XII. Relative prices of steel bars facing p. 110 XIII. Average annual hourly scale of building trades 202 XIV. Increase of c< et of living compared with union wage scale 203 LETTERS OF TRANSMITTAL. U. S. Department of Labor, IXFORMATIOX AND EDUCATION SERVICE, Washington, June 24, 1019. Sir: Immediately after the armistice was signed, you asked me to do what was possible to prepare the country for the readjustment period and see that work was provided for the returning soldiei^. You asked if this organization, which had been directing its energy to getting the country from a peace to a war basis, could not be also used for getting the country from a war to a peace basis. I immediately took the matter up with my associate, Mr. Ernest T. Gundlach, and my assistants. It was decided to organize a Division of Public Works and Construction Development and make Mr. Franlvlin T. Miller director thereof. Mr. Miller since early in August had been serving us in connection with some important work. His knowledge of the Department of Labor, combined with his other special qualifications, made him an ideal man for this task. The building industry was the one great industry in the country which offered the greatest opportunities for expansion, it having been the one industry which had been especially suppressed during the war. Moreover, the building of homes adds both to the per- manent wealth of the country and also has certain social features which are of inestimable value. I remember that you yourself once said: "A man was never known to hang the red flag of anarchy over his own hearthstone." Of course the Information and Education Service does not take the credit of reviving industry and bringing about the remarkably smooth change from war to peace work which the Nation has wit- nessed. Many individuals and organizations had a part in this great effort and the credit belongs to all jointly. I do, however, ^Ir. Secretary, feel that the greatest share of this belongs to you and the Department of Labor. As you were the greatest means in interesting labor in the war and keeping the boys at the front sup- plied with food, clothing, and ammunition, so you were likewise the greatest factor in the readjustment period following, supplying work for the boys upon their return. The work has now been completed and we arc to-day closing up the service. In connection with this work we have, however, col- lected some most valuable data which should be of great use in 8 LETTER OF TRANSMITTAL. \« JUS to ( .mic to j»ll iiitcrostod in tlio ImiUling of public works and oiistnntion f v.hich I can never overestimate. Let me also add my acknowledgments to Mr. Ernest T. Gundlach, Mr. George W. Coleman^ Dr. Davis R. Dewey, Mr. Frank T. Hawley, Mi-s. Clara Sears Taylor, and Mr. Robert C. Starr, who has most ' Jhciently served as chief clerk, and all division chiefs, assistants, lerks, and others who have been connected with the work. If it is :.ot out of place, I shotdd like also to take this opportimity of thank- ing Mr. H. L. Kerwin, Director of Conciliation, and Mr. Edward S. McGraw, yoiu' private secretary, and the other men in your office; hlso your most efficient chief clerk, Mr. Samuel J. Gompers, and Mi-. 31. A. Works, Chief of the Division of Publications and Supplies, to all of whom I am under the deepest obligations for aid in the j^ub- ijcation of this volume. Respectfully, yours, Roger W. Babson, Director General. 3Ion. W. E. Wilson, Secretary of Lalor, ^fas7(ingion, D. C. U. S. Department of Labor, Information and Education Service, Wasl(ln(jion, June 30, 1919. Sir: In accordance with a letter of instruction from the Secretary < ( Labor, the Division of Public Works and Construction Develop- ment was organized December 30, 1918, in the Information and Educa- tion Service «>f the War Labor Administration of the Department of Labor. The fundi- ►n «>f tlie Information and Education Service had been i«» facilitate by means of educational publicity the transfer of labor iiUtl industn^ from peace to war production. When the armistice LETTER OF TRAXSMITTAL. 9 was signed and hostilities ceased, it clearly became the duty of the Information and Education Service to employ its means of publicity toward a restoration of labor and industry to a peace footing. Of the larger industries of the countiy the one which had been most severely curtailed was the construction industiy, embracing public work and private building. Its prompt return to a condition of activity was a matter of public interest (1 ) in order to ameliorate the shortage of housing and of other private buildings, which was causing high rents and affecting the cost of living and of production; (2) in order to supply the deficiency in schools, hospitals, roads, water sup- plies, local transit, and other public and semipublic utilities, the con- struction of which and, in many cases, the repair of which had been wholly or partly discontinued during the war; (3) in order to furnish employment to demobilized soldiers and industrial workers during the period of readjustment of the manufacturing industries. The Secretaiy of Labor, therefore, in his letter of December 20, 1918, directed that particular effort be made through educational publicity to facilitate the rehabilitation of the construction industiy or, in the phrase of the letter, "to stimulate the interest of the Nation in public and private construction"'; and authorized the formation of the Division of Public Works and Construction Development for this purpose. Tlirough tlie cooperation of the Writers', Speakeis', Posters', and Industrial Plants Divisions, already in existence as luiits of the Information and Education Service, the new division was assured a staff of men and women experienced in the methods of popidar education, and it was necessary for the new division but to supple- ment the Writers' Section and to organize Correspondence "Own- Your-Own-Home " and Economics Sections. So that the work of education undertaken by the division might be soiind, complete, and of substantial value to the country, it was decided to investigate the economic conditions aft'ecting the construc- tion industry. The investigation was intrusted to the Economics Section, created for the purpose and containing the followmg per- sonnel: Edwin J. Clapp (Ph. D., formerly professor of economics in New York University) and Michael A. Mikkelsen (Ph. D., editor of the Architectural Record), associate directors; AVarren Case (civil engineer), Everett Dominick (A. B.), Thomas S. Holden (architect), Augustus P. Norton (A. M.), Catherine J. Paine (A. M.), L. A. Rufener (Ph. D.), and John Wliyte (Ph. D.), staff members. The various phases of the investigation of the staff' of the Economics Section were supplemented and checked by competent specialists. From the investigation by the Economics Section it became apparent that the general commodity price level as it stood lour 1Q I.KTIKH OK THANSMITTAL, iiumtlis aflor tlio armistice coiild not be expected to recede much, if at all, ill tlio luuir future; tliat the rise in the "cost of construction" was fully i20 ])cr cent less tliun t!io rise in the general commodity ])rice level; and that there luid i)ractically been no advance whatever ill urban land values. As soon as these iindings, with tiic evidence supporting them, were made known the chief obstacle to a prompt revival of the construction industry, namely, the exfjcctation of an impending fall in prices and wages, was removed; and construction activity rose in April to proportions comparable with the record for corresponding prewar months, and hjis since continued to rise. However, the present volume of constniction is n(jt sufficient to remedy the acute shortage of housing which has been brouglit about by more than four years of subnormal buikUng. A large part of it consists of the smaller classes and of remodeling work on existing, long neglected buildings; and in spite of relatively large expenditures in the construction industry, it may be doubted whether the pro- vision of new buildmgs this year wUl be adequate even to care for the current annual growth in population and industry. The required provision of new buildmgs is prevented by insuffi- •ciency of money available for real-estate loans. The investigation by the Economics Section brouglit out the disquiethig fact that the growth m resources of those savings and investment institutions which lend money on real estate has not kept pace either with the Sfrowth m resources of commercial banks or with the increase in national wealth. Furthermore, a large proportion of the resources of those savings and investment institutions which lend money on real estate has become fixed in Government securities. Insufficiency of mortgage-loan capital is mthout doubt the chief present obstacle to elimmation of the housing shortage. This insufficiency might be temporarily overcome by the exemption of limited amounts of mortgage loans from mcome taxation. The danger that the shortage may be contmued, if not, indeed, increased, induces me to recommend that a congressional committee be requested to investigate fidl^'' the causes of the insufficiency of mortgage loan capital to meet the country's need for new buildings and to devise remediid legislation. Meanwhile, hi order that a partial remed}* might be at once avail- able, the Division of Public Works and Construction Development has cooperated with the legislative committee of the United States League of Local Building and Loan Associations in preparing the horae-loau bank bill introduced in the Senate by Senator Calder. The budding and loan associations are an important factor in the constniction of small homes; and the facilities for rediscounting LETTER OF TRANSMITTAL. 11 mortgages which they ask for in the home-loan bank bill would greatly advance the cause promoted by the OwTi-Your-Own-IIome Section of the Division of Public Works and Construction Develop- ment. A more immediate though partial remedy would be the exemption from income tax of the interest received from real estate mortgages within proper limitations as to interest bearing rate of the mortgages and as to amounts for which exemption might be allowed to each individual. I beg leave to transmit herewith the report of the Economics Section and to. recommend its publication. Yours, very truly, F. T. Miller, Director, Division ofPuhlic Worlcs and Construction Development. Roger W. Babsok, Director General, Information and Education Service, U. S. Department of Labor, Washington, D. 0. * ECONOMICS OF THE CONSTRUCTION INDUSTRY. I. SUMMARY. PURPOSE OF INVESTIGATION. The iiistruc.tioiis received by the Economics Section cnllcii for an investigation of those general economic f actore which, taken together, determine the financial success or failure of a prospective investment in improved real estate and which, consequejitly, investors are in the habit of considering before undertaking the improvement of real estate. The division was organized to ''stimulate tlie interest of the Nation in public and private construction " with a view to the creation of buffer employment for labor during the period of transition of manufacturing industries from war to peace production. It was feasible and proper to stimulate interest in public construction on other grounds than financial profit; but as the responsibility for pro- viding buffer employment was a responsibility of swiety as a whole, it was felt that the individual investor should not be urged to build except in obedience to normal private considerations. These differ somewhat according to the type of construction contemplated, but the mxost important is financial profit. It v.-as decided, therefore, that stimulation of private construction should take the form of supplying authentic data to assist the individual investor to judge for himself whether or not it would be profitable for him to build. SCOPE AND METHODS. The provision of such data meant an investigation of the volume of deferred construction, of the recent com*se of construction-material prices, of wages in the construction industry, of land values and rents, and of mortgage-loan conditions. As the financial soundness of a present investment in improved real estate depends upon future earnings, an investigation of the economic factors just mentioned would have no practical value unless it revealed future tendencies. It was necessary therefore to compare prices and wages in the con- struction industry with prices and wages in general industry in order to show Vvhether the former were relatively high or low, and hence likely to recede or advance in the process of adjustment to the genertJ price level. It was necessary, further, to identify the principal causes of the rise in prices and wages during tlie war in order to balance 13 14 HCOXOMICS OF THK COXSTIirCTIOX IXDISTIIV. lli()>(' tlii\( ^v(•^(• imrcly Iciiiporary against tliosc lli:;t in the altered ocoiioniic, coiulitioiis ])?'()ii. Ak (o cost of ronslruction. The mcroasc i?i tlio ricos in general, as indicated hy commodity index numbers. 6. As to land values and rents. A cpiestionnaire sent ont in December brought rephcs from real estate boards hi 91 cities. In 52 of the cities rents of residence liousing (private dweUings, apartments, tenements) had advanced 10 per cent or more, in some instances 40 per cent to 50 per cent. Advances in rents of other kinds of property were unimportant. The market values of house sites had declined in six cities and had remained practically stationary in 72. Later information on rents and land values was sought through a |)f;in(l, ilic.-c |)rircH an' Ix-iiif; a'ljiiHtcd downward. A\Tieat in a case wlun- (Icinaiid iiicrcaxcd and al. tho name I iino rcrtain of the usual Hourccs of supply — KiiMHiu, AuHtralia, and Art,'fii(ina- diHapixan-d, with a rcKullant abnormal price increase. The doHod houhch of Hupply have opened again, and wheat prices in the world market have dropped. In Kome caseH, a.s in many of the indu.stries making buildiiit,' materiai.s, (he war meant a {,Tr<'at nlackening in demand, an enforced curtaU- nieiit in uhc by Government order. In Huch in.stances we are likely to eee an upward ewinp in prices an the euppreased demand again makes itnelf felt. To-day we are witneswing throughout the country such price readjustments, up and down, but the general price level has shown little sign of falling, as is evidenced by price index numbers. It is apparent to every thoughtful observer that some great force has affecti'd all prices, creating a new standard to which they are all conforming. The fundam/'utal practical question confronting business men is whether the general level of prices is going to fall. In my opinion, it is not going to fall much, if at all. We are on a i)ermanently higher price level, and the sooner the businessmen of the country take this view and adjust themselves to it the sooner will they save themselves and the Nation fnjm the misfortune which will come if we persist in our present false hope. Its dependence upon the circulating medium.— The general level of prices is dependent upon the volume and rapidity of turnover of the circulating medium in relation to the business to be transacted thereby. If the number of dollars circulated by ca.sh and by check doubles while the number of goods and services exchanged thereby remains constant, prices will about double. The great price changes in history have come about in just this manner. The "price revolution" of the sixteenth century came upon Europe as a result of the great influx of gold and silver from the mines of the New World. Europe was flooded with new money. More countere were used than before in effecting exchanges, and prices became "high." People talked then of temporary "inflation," just as tliey talk of it now. But it was not temporary-; it was a new price level. • A similar increase in prices all over the world occurred between 1896 and 1914, following the discovery of the rich gold fields of South Africa, Cripple Creek, and Alaska, the invention of the cyanide process in mining, and the va.st extension of the use of bank credit. Exten.sion of credits. — Circulating credit — that is, bank deposits subject to check and bank notes — is a multiple of the banking reserve behind these deposits and notes; and the essence of this reserve is gold. Our present monetary system is an inverted pyramid, gold being the small base and bank notes and deposits being the large super- structure. The superstructure grows even faster than the base. The deposits are the important elements. They are transfeiTed by check from one individual to another; that is, the circulation of checks is really the circulation of deposits. Thus any increase in the country- 's gold supply has a multiplied effect. The possible extent of that effect is dependent upon (1) the amount of gold available, and (2) the gold reserve requirements, determining the volume of credit that can be put into circulation based upon the gold. Over a billion dollars in gold has come into this country from abroad since 1914, and a large amount has disappeared from domestic circulation. The gold from both these sources has found its way into the United States Treasury and into bank reserves. On June 30, 1918, the portion of the gold reserve of the Federal reserve banking system wliich supported national bank deposits and Federal reserve notes was more than three times as large as the gold reserves under the old national banking system on June 30, 1914— $1,786,000,000, compared to $592,000,000. During the same period credit instruments (demand deposits and notes) increased about twofold— from $(5,100,000,000 to $11,700,000,000. This increase of credit instruments is typical of the banking situation for the country as a whole and largely explains the present high level of prices. The increase of gold has been ECONOMICS OF THE CONSTRUCTION INDUSTRY. 21 80 great, however, that the base has grown faster than the superstructure' — whieh ia contrary to the normal tendency. The ratio of gold to credit has risen from 9.G per cent to 15.3 per cent. The legal reserve requirements of the present system are such that for 1918 there is an excess of gold above these requirements of more than $700,000,000. The reserve required by law to support the $11,700,000,000 of credit instruments of 1918 is $1,070,000,000. The .$700,000,000 of free gold could support an additional superstructure 70 per cent as large as the existing one, which indicates that for the banking of the country as a whole a potential future expansion of 50 per cent is a conservative estimate. False views of inflation. — Many people, referring to this inflation in the circu- lating medium, and assuming that it is temporary, are waiting for this inflation to subside. When we speak of inflation we mean more circtdating medium than ia needed to transact the biisiness of the country on a given price level. But what price level? Some people mean the price level of 1913-14. Om* ctirrency is cer- tainly inflated in terms of the prices of that period, just as the currency in 1914 was inflated with respect to the prices of 1896, but our ctirrency is not inflated at the present time relative to the new level of prices in the world which the v/ar has brought. The countrj-'s volume of money will have to be judged in terms of this new price level, not in terms of a price level that is past. To speak of the present "inflation" as temporary is to assume the very thing about v.-hich we are contending — to assume that the normal prices are those of 1914. Basis of expectation as to future movement of prices. — Let us examine the factors tipon which any futiire price movements must depend. 1. Gold will not return to circulation. — No great effect in the direction of falling prices can be expected from any return of gold and other lawful money into daily iirculation. Such a reversion would be contrary to monetary experience every- where. When people have learned to leave their gold and silver in the banks and use paper money and checks instead they find the additional convenience bo great that they ^\ill never fully return to the old practice. 2. No great outflow of gold through international trade. — It should he noted that many of the former reasons foj* a flow of gold from America abroad have disappeared. We used to ow'e Europe a huge balance of interest payments upon American securities nhe held. The situation is reversed to-day. Moreover, Europe must pay us money for the materials we will send her for reconstruction, or at least pay us interest on credit we will extend her. Thus our exports will probably exceed our imports during the reconstruction period. We used to pay ocean freight money to foreign carriers; to-day the American merchant marine will keep in American hands tens of millions of dollars of ocean freight money. The huge volume of American tourist travel abroad, for whose expense we had to settle, has stopped and can not resume for a year at least. For all these reasons the lines are laid for a movement of gold from Europe here rather than a movement of gold from America to Europe. "Yes, but," people say, "wait until trade is resumed between the United States and Europe, then surely 'low-priced Ivaropean goods' ^^'ill flow over here in such enor- mous volume that they will liquidate all annxial obligations to us in goods." Ulti- mately Europe must pay her obligations to us in goods, but it Avill take many years. Meanwhile she needs our tools, machinery, and raw materials for immediate reconstruction. The fact: European prices have risen more than ours. — At the present time Eiu^opean goods are not "low priced'' (however little the money wages of European labor Avill btiy). Prices in Europe since the war began have risen more than they have in the United States. The price rise has been less the farther from the seat of h(>.sti]^ties. It was least in Aiustralia and New Zealand. It was next least in the United States, Canada, and Japan. Then came neutral Europe; then our present allies, and finally Germany and Russia. Gold tends usually to flow from high-priced 22 KCOXO.MICS OF THK COXSTRUCTION" INDUSTRY. (■\vcr prices is on a reduction of the Huperstrurture of credit resting upon our gold rather lli;iii on any reduction iji the volume of this gold itself. They look for a contraction of hiuik credit, a reduction iu the Aolume of deposits sul)jcct to check, which circidate lliniiiu'liniil till- country. KITcrt of (iovornmont loans on credits and prices. — But the main cause for tlic present extensi(m of bank credit is the liberty loan, and there is soon t/) be another. Subscribers for the new loan will not pay for their l)onds in full any more than they did in the })revioiis casea but rather le.ss. Many of them will deposit the bonds with the banks as security for loans to be repaid later. The effect on our circidating medium will be the same a!s if the Government were to impose a levy of $6,000,000,000 of credita u])on the Federal re.serve banks, and then order them to apportion these credits out among the banks of the countiy. This jirocess will certainly lead to an expansion of credits. The former issTies of liberty bonds are still carried by the banks to a considerable extent. It may be contended that the l)ank e sent abroad for rehabilitation. This continuance of vast loan issues, connected ^vith war and reconstruction throughout the world is a factor which will maintain the high i>rice le\el tem^iorarily, which means many months. It is also worth keeinng in mind that liberty bonds and other Government securitie.s held here do not wholly cease being a source of credit expansion when the indi\idual subscribers have completed their payments on the bonds and really own them. These new bonds are \inrivaled security for fiwther borrowings from banks for commercial purposes, and they ^^■ill continue to l)c so until the Government which issues them redeems them. The availability of the vast Issues of war bonds as l>ases for fiitiire credit expansion. coui>led with the fart that our banking system has still many unused reefs, sure to be taken out later, when business wishes to spread more sail, is the chief reason why l>rices will keep up permanently; that is, for many years. Between the period of temporary and the ])eriod of permanent effects, there may be a slight dip in the price level, say a year from now. If so, it is the more incumbent upon biisiness to proceed now; for it can not wait a year. ''' ECOXOMKS OF THi: CONSTRUCTION INDUSTRY. 23 Commercial loans must increase.— Duriag the war the flotation of stocks and bonds of commeixial concerns has been very greatly diminished. During the period upon which we are now entering, the issue of snch securities will increase greatly. Opposition of business men to credit contraction. — Against any con.siderable reduction in bank credit and hence in the general level of prices, we shall find the whole business community in arms. Falling prices mean hard times for the indiWdual and for the Nation and everyone resists the tendency. At the end of the Civil War the Treasiuy started to reduce the quantity of greenbacks. A start had hardlj- been made, however, before the business depression of 1866 and 1867 caused Congress to forbid by law any further reduction. Shoidd the Federal reserve banks attempt, by raising their discount rate or otherwise, to rediice the volume of l^ank credit out- standing, they \^'ill meet tvith the same sort of opposition. Moreover, the hostile attitude of labor toward the lowering of wages will deter legislators and bankers from any organized policy of contraction. Increase in deposit banking on the continent. — Looking into the still more remote futm-e, there wall be in Europe, particularly on the Continent, a vast increase in deposit banking. The need of the Governments there for fimds during war times hastened the introduction of deposit Ijanking. Money Vf ent out of circtdation into bank vaults , and there became the basis for circidating credits. This means a new hal)it wMch will lead to a gi-eat currency expansion. Far-away countries, like India and China, are also leai'ning to use deposit banking. It is as if a new soTirce of gold sujjply had been discovered. WTiat ha^ been discovered is a new way of using the gold stipply. The world, during the coiu'se of the war, has thus started, or has hastened, an equiva- lent of the price revolution of the sixteenth century. Go ahead on the new price level. — Business men should face the facts. Tu talk reverently of 1913-14 prices is to si)eak a dead language to-day. The buyers of the country, since the armistice, have made an unexampled attack upon i)rices through their waiting attitude, and yet price rece-ssions have been insignificant. The reason is that we are on a new high-price level, wliich will l»e found a stid^born reality. Business men are going to find out that the cdever man is not the man who waits, but the one who finds out the new price facts and acts accordingly. THE NEW COMMODITY PRICE LEVEL. Why prices were expected to fall with the end of the war. During the war most people believed that with the coming of peace there would come a great fall in prices. They saw prices rising to abnormal heights because of the war and expected that in the post- war period prices would find their prewar level, the cause of high prices — war — no longer existing. A more particular statement of this pomt of view was that war orders for commodities and the scarcity of these commodities relatively to the demand brought the high prices. Naturally with the end of the war, the abnormal demand for commodities would disappear and prices would conse- quently descend to their old level. But in many quartei-s it was feared that the transition from war to peace w^ould involve not only a return to prices as low as before the war, but an industrial crisis resulting in an utter collapse of values. Although no attempt will be made to give a complete catalogue of the reasons advanced for expecting such a disaster to ijidustry, some of the more common argimients will here be noted. It was pointed out that industrial 24 KCONOMICK OF TTTK CONSTRUCTION INDUSTRY. |)Iiiiils in tlio United States, stiimiliitod l)y war orders, developed an ]il)rionniil cupacify of ])ro(bietion. With tlio coming of peace the inujiu'^ei'S of these phuits, in order to retaiji tlie economics of full capacity production would slash ])rices to obtain business. It was fiirMiormon^ poijited out that indnstry in European countries had also been stimulnted and had achieved an abnormal caf)acity for ])roduction. It might be expected therefore that price cutting would lake j)lace in those countries among tlieir own manufacturers just as in this country, and a surplus of goods being ])roduced iji all the leading industrial countries, competition in prices would become international wheji the manufacturer of each coimtry tried to dispose of their suri)lus abroad. To add to the danger of cutthroat competition both on a jiatiojial and on an international scale was the fact that the demobilizatioji of vast armies might be expected to create armies of imemployed in all ijulustrial comitries on a scale never before equaled. These imemployed workmen it might be expected would be willing to work for any wage the manufacturei-s, driven to des- peration by cuttliroat competition, would see fit to offer. Finally, to make the pessimistic view complete, the attitude of buyers iji falling markets was cmpliasized. All buyers whether consumers, retailers, job])ci's. wholesalei'S, or producers have a tendency to pursue a hand- to-mouth policy in buyijig during periods of falling prices, putting off each ]nirchase as long as possible in the expectation of being able to buy more cheai)ly later on. Thus the abnormally large output of the manufacturers would be tlirown on a market which w^ould be abnormally small because of the watchful waiting policy of buyers. The present situation. Such having been the psychological attitude of most people in the United States, it is remarkable that with the armistice seven months old we find business no woi-se off than it is. Tlie dire turn of events prophesied has not come to pass. It is true that war ordei-s have largely come to an end, and this has reduced the market for the prod- ucts of many industries. It is true also that the policy of watcliful waiting for a fall in prices has been steadily pursued by millions of buyei-s and that as a consequence busijiess is halting. The iSTational Association of Majuifacturors issTuxl a report (April 14, 1919), based ui)on a canvass of 4,000 representative establishments in practically every line of iiulustry in the United States. Of 22 groups of industries comprised in the study, 5 reported busijicss good, 1 reported business fair to good, and 16 reported business conditions below 50 per cent of normal. But in spite of all this, commodity prices have fallen but little during the seven months since the armistice was signed. Wholesale food prices as reported by the .Vnnalist have risen consid- erably since February 1,1919, and the average price of 25 leading indus- ECONOMICS OF THE CONSTRUCTION INDUSTRY. 25 trial stocks as reported in the Ajmalist had reached in the first half of May a higher level than at any time since July, 1917. The price slashiiig and cutthroat competition, national and international, has not materialized. Let lis examme in a broad way the causes of the present condition and the prospects for the future. The role of inflation. The rise in prices during the war was not brought about simply by war orders for commodities and a scarcity of goods relatively to the abnormal demand. The various Governments of the world found it expedient in order to obtain the commodities required for v/aging war on a large scale to inflate the currency either directty by the issue of paper money or indirect!}^ by the issue of bonds which were used as a basis of credit. Now, although the war orders have largely come to an end, and the scarcity of commodities relatively to demand has some- what diminished, the inflation of the currejicy is still with us, and not a thing of the past. This matter is fully discussed in the section of this report called ''The New Price Revolution,' written by Prof. Irving Fisher. Prof. Fisher, after a careful survey of the whole problem of present and probable future expansion of money and credit, con- cluded that we are on a permanently higher price level and can not because of this expansion expect any substantial decline in prices. The watchful waiting policy of the buyer. The watchful waiting b}* buyers for lower prices which is char- acteristic in times of falling prices has not had the usual disastrous efi^ect because the period of rismg prices during the war differed in a vital respect from the usual period of rising prices. Ordinarily during a period of rising prices extending over a number of years production of commodities keeps nearly abreast of demand and finally outstrips consumption, an accumulated sm'plus being the result. Buyers, generaU}-, noting the constantly rising prices, lay in abnormal supplies. Consumers buy in advance of their real needs, arguing, for example, that although they do not need a new pair of shoes or a new suit just at present, it is a wise plan to buy because later the shoes will cost a dollar more or the suit $5 more. Likewise the retailer, the jobber, and the wholesaler note the advan- tage to be gained over their competitors by bu} ing early, ])efore the next advance in prices. Manufacturers, also, buy raw materials freely and manufacture stocks in advance of sales in the expectation of profiting by lower costs than are likely to prevail later on. Hence it happens that when the ordinary wave of high prices has reached its cr^st consumers are well supplied with goods of all kinds, retailers' shelvfes are laden, and warehouses of jol)bers, wholesalers, and manu- factm-ers are filled to tlie roof. Then when the turn comes and ])rices 20 i:(()N'().M I cs oi' 'I'iiK cox.sTKTrTrDX rxnrsTFiY. bojjjiii to fall, buyers uic not only inclined to defer puicluises, but are so well stocked up tlint if it seems wise they may |)ractically stop l)uying altogether. Jiut during the war, although prices were rising and it may have seemed wise to buyers to lay in supplies for future use, they flid not do KG. Consumers responding to the call of patriotism refrained not onlv from buying in advance of need ))ut even from buying their customary supplies. Some refrained from buying ])ecause they had spent their money for bonds or war saving stamps; others because tliey voluntarily refused to compete with the Government for sup- plies. Retailers, jobbers, and wholesalers either could not get large supplies or refrained from buying, for patriotic reasons. In the case of manufacturers those who manufactured nonessentials had their business regulated ])y Government orders and could not manufac- ture on a normal scale, let alone pile u]) a surplus. Those who manufactured for the Government had all they could do to turn out the goods demanded for immediate consumption. Hence there was not when the war ended a sm^plus of goods in the hands of any class — ^consumers, retailers, jobbers, wholesalers, or manufacturers. The watchful waiting for lower prices manifested itself, but it had the minimum capacity for mischief. When a man's best suit begins to go to pieces, pride and decency compel him to buy another, whatever he may think of the general level of prices in the future. When the retailer begins to lose sales because he has no goods on hand, he buys regardless of the possibility of a cheaper purchase, later on; and so do the jobber and w^holesaler. The manufacturer: also will keep his factory going regardless of the prediction of lower costs in the future if by closing down he loses present business. Production during the war. That the available stocks of commodities of all kmds are depleted is pretty generally acknowledged. This fact is emphasized in the report of the National Association of Manufacturers already referred to. In fact it could hardly be expected that any considerable stocks should exist at the end of the world war, with its giant capacity for consumption. That stocks of commodities in general are largely exhausted is hardly capable of statistical demonstration. But in so far as statistics of production are available for leading com- modities, they tend to show that it is useless to look for hoarded stores of commodities, cither raw materials or finished articles. In the accompanying table (Table I), ''Production of leading min- erals in the United States and the world," some light is thrown both on the probability of stocks of goods on hand and on the question of expansion of industry during the w^ar. ECONOMICS OF THE CONSTRUCTIOlSr INDUSTRY. 27 t- O CO C^l ir: cs CO o O CO CO -r X -; o5i 2 ^ sf ~ r3 -^ Ol u- CO t^ or- cc C5 CO 05 w cTo" o o — o o o o o o OC5 -r- OO —I et for its products, and that there is danger of a universal collapse in^^he industry of the world. ECONOMICS OF THE COXSTRUCTIOX INDUSTRY. 31 Costs of production. Now, what are the facts as to the prospect of a substantial recession of prices from month to month; a recession sufficient to cause a greater loss to the business man who goes full speed ahead than to the one who waits? Prices of commodities, mcluding agricultural prod- ucts, cover the costs of doing business and profits, and may be ana- lyzed into the following constituents: (1) Interest on borrowed money, (2) materials used, (3) taxes, (4) a fair return on the capital and labor of the owner, (5) excess profits, (6) wages. Prices can not fall unless costs decrease or business men, including farmers, are willing or compelled to forego their profits. What are the prospects of a decline of costs or profits? The interest rate advanced durmg the war and has played a part, therefore, in higher cost of production, though only a minor part. There is little prospect for a substantial reduction in the rate of interest, and still liess prospect of any appreciable reduction in the total cost of production from this source. The finished product of one industry may become the raw material of another. Hence analysis at this pomt is difficult. It may be maintained, however, that the cost of raw materials of any particular industry, including agriculture, will not decline until the costs of production or profits of other industries have declined. Hence, gen- erally speaking, any decline in the costs of raw materials must be the result of a decline in interest, wages, profits, or taxes. Taxes may be subdivided for our purpose into excess profits and income taxes and other taxes. Obvioush', if the excess profits or income of any industry decline, the excess-profits taxes and income taxes on such industry will also decline. Aside from that, no sul)- stantial decrease in taxation is to be expected in the near future. Even if Federal taxes grow less it is altogether likely that State and local taxation will grow heavier. It is not to be expected that business men, including farmers, will in the future lightly forego a fair return on their capital or their own labor. The only thing which would tend to compel them to do so is production far in excess of demand, which would compel producers to sacrifice their products for what they could get. This point will be discussed further under the head of future demand for goods. Excess profits, particularly where excess profits are due mainly to increased prices rather than to increased volume of production, will no doubt diminish and some decrease of prices may be expected from this source. Some industries during the war sold their products at exceedingly high prices and realized abnormally large profits for that rcasbn. It is probable that world shortage of many commodities will still enable some of these industries to realize abnormal profits in the after-war period. But they can not all hope to continue selling their 32 KCONOMICS OF THE CONSTRUCTION INDUSTRY. products at (op AViir ])ric<*s. Conipolit ion or Ciov<>n)iii<'nt iiit^ti'ference would bring down thoir profits, oven if no voluntary reduction wore made. It, should Ix^ ad(l(Hl hero that a largo part of what in some (|uartors is consid(u-ed cx(;ess profits of the farmc^r is only a fair return on his capital and labor, very inadequately compensated before the war. Wages are unlikely to bo generally reduced during the forthcoming months. Some reductions have occurred since the armistice, the most important of which have been reductions of overtime and bonuses, and little further decrease can be expected from this source. On the other hand, there have also been some increases in wages, notably in the building trades and in the case of railway employees. On the whole the attitude of employers in the Ignited States seems to be not to reduce wages until the cost of living is reduced. When this attitude of employers is taken into consideration along with the tremendous opposition of wage earners to a reduction, little reason can be seen for expecting lower costs of production through lower wages. The foregoing analysis although l^rief and impei"fect, seems to show pretty clearly that no substantial decrease in costs of production is in sight in the immediate future. Of course, if abundant stocks of goods were on hand and buyers enjoyed the strategic advantage over sellers of being able to hold off longer, then prices would break some- where I'egardless of costs of production. But as has already been pointed out, buyers at the present time do not have this strategic advantage over sellers. In this analysis of costs no account has been taken of the effect of increased efficiency, and increasetl efficiency can not be left out of account altogether. Even if the rate of interest, wages, cost of raw materials, and taxes were not reduced, cost of production per unit would be reduced by an increased efficiency in production which multiplied the number of units turned out in a given plant in a given time. But it is not the reduction in prices resulting from retluction in costs due to greater efficiency in the future that the business man fears in the months just ahead. It is the reduction resulting from low^er wages and lower raw materials that he fears. The possible reduction in costs due to increased efficiency lies a little farther in the future. Increased efficiency. It w^as pointed out above that there is a certain fear that a greatly increased capacity in production owing to lessons in efficiency learned during the war, will flood the world with, commodities beyond the capacity of the world market to absorb, and will bring about a. uni- vei-sal collapse of values. Although this expected gluttmg of the world market lies some distance in the future, the fact that it is ECONOMICS OF THE CONSTRUCTION INDUSTRY. 33 expected is already exercising a repressive influence on industry. Undoubtedly there are strong reasons for expecting a greatly increased volume of production, and some of these reasons will be enumerated. 1. Efficiency in industry through better organization and new inventions was stimulated during the war as never before. 2. The war necessarily brought into use tests for military fitness which were applied with good results. These included tests for physical fitness for the performance of a particular kind of work, tests of general mental ability by which a man could be placed in the proper station, and tests for technical training. It is altogether likely that wider use will be made of such tests in industry in the future than ever before. 3. Industrial training is being resorted to on a larger scale than before the war both in school and factory, and will increase industrial efiiciency. 4. The wider development of workmen's compensation laws and a more general campaign for better health for the workers will have a marked effect on efficiency. Now what will be the effects of such an increased efficiency in in- dustry ? Will it mean an extreme reduction in the cost of production on the one hand, and a glutting of the world markets on the other, so that even with his low costs of production the manufacturer will be compelled to sell at a loss ? To enter into the realm of prophecy to answer this question is dangerous. But a few facts bearing on the situation will be presented which should serve to free business men to some extent from the fear that this increased efficiency m pro- duction, which should be a blessing for the world, will prove an obstacle to their own prosperity. Efficiency and wages. Whatever increase in efficiency of production is achieved either in the immediate or the more remote future will appear to wage earners as an increase m the efficiency of labor. Factory managers may improve their system. Tests of fitness not devised by himself may make a certain laborer more efficient by puttmg him to the task best fitted to his ability. Marvellous new machines to increase produc- tion may be installed. But whatever the cause of the increased output may be, the result will be a greater output per man. Labor will strongly contend that it should benefit from this increased output per man. This is not prophecy but merely a statement of what will happen in the natural course of events. Now it appears from facts at present available in abundance that labor is altogether likely to receive a large share if not most of the benefit of this increased production. 121297°— 19 3 34 ECONOMICS or thk construction indlstky. Long boforo lli«i world war hihor Icudcus ohjocted si roiigly to having lal)or considoivd simply a pjissivo coniinodity to ho bought on the open markot by oniployers at prices yiolduig them whatever profit the uncoil trohed law of supply and demand might permit. These loaders were si riving and to a certain degn^e sucrfu^ling in obtaining for the wage earners a voic4) m uiduslrial management. The war has been won for the allied countries, and labor in western Europe and in the I'liilcid wStales is now striving more vigorously than ever to obtain for itself some share in the management of industry, while in Russia and apparently in central Europe it is striving to obtain not merely a share in control but absoUite control of industry. The wage earning class supplied most of the man power and sacrificed much in the war and therefore feels justified in asking for a comfortable living after the war. Labor's position is strengthened by the favor- able attitude of the Government, at least in the United States and in Great Britaui. It is further strengthened by the present shortage in man power, which is not likely to be offset by increased employment of women. There is much evidence that employers in the United States are desirous of approaching labor in a spirit of conciliation and coopera- tion. Many believe that labor should be better paid than ever beft>re. Charles M. Schwab, for example, one of the largest employei-s of labor, recently expressed himself publicly as doubting that labf>r has in tlie past received its due. The attitude of Jolm D. Rocke- feller, jr., is well knowTi. He believes that wage earners have a right to a high standard of living and has for yeare been laboring to bring about a spirit of cooperation with labor in the plants in which he is interested by organizing the employees in these plants and developing johit committees representing capital and labor. His plan has been severely criticized as being too narrow and placing control too largely in the hands of the employer. As stated in an address before the War Emergency Congress of the L^nited States Chamber of Commerce at Atlantic City (December, 1918), his plan does not seem so open to criticism as has been affirmed. To quote from this address: Tho most potoiit moasuro to Ijring about industrial harmonj- and prosperit}' is ade- quate representation of labor in industiy. The most effectlA'e structure of represen- tation is that which is built from the bottom up; which includes all employees; which starts with the election of joint committees in each industrial plant; proceelaced in a new environment, learnuig to wear dift'erent ap]")arel, learning to eat different food, learning the thrill of doing new thmgs and seeing new places. For some, of course, the range of new experiences was wider than for others. It may be said, perhaps with more grim humor than truth, that the soldiers of the central powers and the Russians probably learned little but privation with respect to food and clothes. 1371 0\} .38 ECONOMICS or TFIK COXSTItCCTION INDUSTRY. Kvcn if we. should ((Micedi^ that some soldiers tlirough lack of supplies lennied to like u<> new foods nor to like new kinds of clothing; from lirst-hand ex])ericrice, all must have seen unaccustomed articles of food, apparel, and olhcr articles to which thev took a fancy and which they will want in the future. It is j)articularly those soldiers of the allied armies who saw over- seas service and were at the same time sup})lied with the means of livinix fts well as war conditions permit who will be found in the future to have developed new desires which, if gratified, will involve on their part heavier consumption of goods. On November 1 1, 1918, the number of American soldiers hi Europe or on the way was 2,05;} ,347. Furthermore the number in the Navy was 529,544. Canada sent overseas 800,000 men, Australia sent abroad 336,000, and India sent to France, Mesopotamia, Egypt, Gallipoli, Saloniki, Aden, and to the Persian Gulf 953,374 native troops and 219,534 British troops. Then practically all the millions of British troops saw sen'ice in France or elsewhere under suiTomidings wholly new to most of them. Not only will these soldiers returning from the war be filled with new desires and demand a broader variety of commodities than they would ever have thought of if they had had no war experience, but they will infect their associates at home with this contagion of new wants. It is a matter of historical record how the mass movements of men at the time of the crusades and the migrations and voyages after the discovery of America stimulated the commerce and industr)- of the world. Tlie world war has involved mass movements of men on a vaster scale than the crusades and sent more men overseas in four yeai-s than the discovery of America sent in a hundred years and will have therefore a far greater effect on world industry. In addition to the 60,000,000 soldiers mobilized for the war there must be considered the millions of war workers in the belligerent countries turning in many cases to new occupations, meeting new people, seeing new places, learning the use of a great variety of new articles and services, and in many cases, earning higher wages than ever before, thus being able to enjoy immediate gratification of their newly discovered wants. Literally hundreds of thousands of young Americans lived in a large city for the first time in their lives dm'ing the war, and large cities with the manifold variety of food and clothing, services and amusements they offer are veritable schools for the diversification of desire. Thousands of Americans during the war coming from the countrs' or small villages to take up war work in tlio cities enjoyed the conveniences of modern improvements in hous- ing for the first time in their lives. There is absolutely no doubt that t(>ns of millions, one might say hundreds of millions, of people in the world in the postwar period will w ant — in fact are now wanting — ECJONOMICS OF THE COXSTRUCTIOX INDUSTRY. 89 very badly numberless things which they did not want before. Here is a potential market for consumers' goods, ofTering to manu- facturers and dealers such an opportunity for business as never before existed, provided only this potential demand can be made an effective demand — in plain words, provided the persons who want these new articles can get the money to pay for them. Since most consumers belong to the wage-earning or salaried classes this is mereh' a ques- tion of high wages or salaries and steady employment, accomi)anied by increased capacity for production. Conclusion. The foregoing facts and reasons, it would seem, warrant American business men in working and planning for an immediate period of business prosperity. No collapse of values and prostration of busi- ness has occurred in the half ^''ear following the armistice, and there is no reason to expect such a contingenc}" in the near future. The most tr5'ing period in the transition from war to peace is past. There is a world shortage of commodities and the man first ready to meet the demand will obtain the most business. Any decline in costs for production that may take place in the forthcoming months will not serve to compensate the man who delays business operations to take advantage of it for the loss of business he will suffer through his hesitating policj^ Much less will it give him an advantage over his more wide awake competitor. Not only is there a world shortage of commodities which must inevitably give rise to a great demand for commodities in the next few months but the demand for com- modities in the postwar period will undoubtedly grow to unheard of dimensions owing to the greater diversification of wants brought about as a result of the world war. The enormous expansion in human wants, the strong desire on the part of hundreds of millions for the enjoyment of numberless articles and services they did not enjoy before will result in a demand that will test the capacity of world industry to meet, even if the most optimistic hopes for in- creased efficiency of both labor and plant are realized. If industry- is properly organized, and if serious maladjustments can be avoided, manufacturers can safely banish all fear of overproduction and of falling prices. The consequences of falling prices are less to be feared than the consec|uences of continued increasmg prices, which, in the face of the demand, may be halted only through the greatest efficiency of plant, labor, and management. m. COST AND SUPPLY OF BUILDING MATERULSc SUMMARY OF FINDINGS. This study is an attempt to present a brief history of the building materials industries through the war period and, where possible, through the fh'st five months since the signing of the armistice. Completed in a few months, it can not pretend to be exhaustive; a thorough investigation of one industry alone — such as the lumber industry or of the clay products industry — might well occupy a year's time. Containing as it "does, however, a rather comprehensive survey of records of prices and production, and of cost data, it pro- vides a not inadequate basis for an underetanding of the price situ- ation as it affects the construction industry as a whole. A determination of the fairness of individual prices was not within its scope. Since the only standard of fairness of the price of a commodity is the cost of its production, the only absolutely safe basis upon which to predicate such fairness is by an examination of the books of producers. Without authority it is impossible to exam- ine these books, and this division has not had such authority. Production costs based upon an examination of books of producers were available through other investigations, particularly through that of the investigating committee of the Illinois Legislature. In addi- tion, in response to questionnaires and personal requests a large amount of material on wages, fuel, and transportation and other items that go to make up costs was received, with the result that a fairly reliable analysis of the industry as a whole could be presented. On the basis of this study, and after a consideration of the general economic situation (which is dwelt on elsewhere in this report), this division has reached the following conclusions : 1. Tliat production in most of the building materials industries was curtailed during the war. 2. That the increased prices of their products generally must ])e attributed to curtailed production and to increased cost of labor, fuel, transportation, and plant maintenance. 3. That any marked reduction in prices of l)uilding materials as a whole must depend upon reduction of these costs, which seems little likely to be realized in the near future. 4. That building materials are relatively low in price as compared with commodities in general. Tlie division believes therefore that construction in 1919 can be justified on financial grounds, and it looks to public officials and to private and speculative builders everywhere to resume building. 41 42 Ec^oNDMirs or Tin; coxsTitrcTiox industry. ACKNOWLEDGMENTS. 'Hk^ |)iiii(i|)iil sources of material Imvc Ixmmi other departments of the (iovi^niinenl, esjx'cially the price section of the War Industries Board, the I'nited .States Geolo<2;ical Survey, and the Bureau of La))or Statistics. The task has, however, heen rather more than an assem- hling of materials of other Itureaus. The tables have, in nearly all cases, heen rearranged in such a manner as to present effectively s])ecial facts, tendencies, and comparisons. Tn many cases it was not possible to carry the quotations of prices furnished by the War Industries Board forward into the year 1919. Prices for 1919 have been available from other sources, but it has been diflicult to match the quotations, as the different sets of prices are often quoted on different grades of materials, for different units of measure, and for different markets. Acknowledgment should be made of the valuable cooperation of the price section of the War Industries Board, the United States Geidogical Survey, the Bureau of Labor Statistics, the United States Housing Corporation, the United States Forest Service, the Bureau of Public Roads, the Interstate Commerce Commission, and the Library of Congress. Appreciation should also bo expressed for the courtesy shown by all those chaii'raen and secretaries of war-service committees and those individual producers of materials who have furnished valuable information and expressions of opinion to this division. Acknowledgment should also be made to those publishers who furnished copies of their periodicals from which much information of value has been obtained, and also to those architects and con- tract(>rs who furnished figures on construction costs. Information of a special nature was furnished to this division by the National Lumber Manufacturers' Association and its numerous allied organizations, and also by the National Association of Sand and Gravel Producers and b}' the Portland Cement Association. SECTION I. COMPARISON OF BUILDING MATERIALS PRICES WITH PRICES OF OTHER COMMODITIES. Explanation of index figures. Table 3 gives, for purposes of comparison, index numbers based on wholesale prices through the war period on the following groups of commodities: 1. Lumber. 2. Basic building materials (lime, cement, brick, paint ma- terials, etc.). EOOlSrOMICS OF THE COXSTRUCTIOISr INDUSTRY. 43 COMPARISON OF RISE I BUILDING MATERIALS //7z7///7^/^^//7^ SfEEl ) COMMODITIES U. 5 DEPARTMENT OF LABOR INFORMATION AND EDUCATION SERVICE DIVISION OF PUBLIC WORKS AND CONSTRUCTION DEVELOPMENT CHART I. 44 ECONOMICS OF THK CONSTRUCTION INDUSTRY. 3. l^iiinlxT and ])uil(lin<^ lUiitci'ijiU (in whicli tlic indices of 1 lUid 2 liuvo been coinl)incd 1)y a system of weighted uveniges). 4. Iron and stec^l ])ro(lu<;ts used in construction (consisting of structural steel, bars, nails, rivets and cast-iron pipe). 5. All building materials (the figure being combined from tlie scries 3 and 4 by a system of weighted averages). r». All commodities otlier than lumber and basic building materials. 7. Farm products. 8. AH commodities. The index numbers are expressed in terms of the average for the year preceding July 1, 1914, as base. Figures for the group of all commodities are those of the Bureau of Labor Statistics, which probably give the best indication of the rise in the general ])rice level of any of the various published index numbers. The lumber series is taken from figures compiled by the Price Section of the War Industries Board. These figures are based on series of quotations from a large number of mills and of a large number of markets in various localities throughout the country. In making this price survey the War Industries Board had the services of lumber experts of the Forest Service of the Department of Agri- culture. Their figures form probably the most comprehensive survey of the price situation with regard to the lumber industrj' during the war period that can be obtained. The figures for .September, 1918, are given because the price level of all commodities reached the maximum point in that month. It may be seen from the table that building materials, not including steel, did not in the first quarter of the cmTent year fall from the level reached in September, 1918, as have the other groups. Comparison of prices of building materials and of all other commodities. Table 3 shows that in the last quarter of 1918 Iniilding materials prices were 84 per cent above the prewar level, while all other commodities were 113 per cent aboA'e the prewar level. A comparison of the fluctuations of prices of building materials and of all other commodities is shown graphically in Chart I. In sununaiizing wartime i)rices of building materials the Price Section of the War Industries Board has stated: The prices of all building materials except steel responded in the main to the same causes of rising Avages and materials cost. Building materials, except steel, lagged slightly behind the prices of other commodities because of the abundance of common building materials and the competition between the numerous producers of building materials. Nevertheless, some prices of building materials advanced more rapidly than thuild- ing niiilciials. For convenience, these individual materials arc classified into the following groups: Lumber, iron and steel products used in construction, clay products, quarry products, cement, min- eral aggregate, glass, paint materials, and miscellaneous building materials. A comparison of the rise of jH'ices of various groups of building materials is shown in Chart III. Table :i. — C'omparisov, of index Ji'jures on build in[i malericls and other fjroups of commodities. [Figures based on wholesale prices. Base: Average July 1, iyi3, to June 30, lOU.] Period. 1. Lum- ber. 1913 1911 1915 1916 1917 19IS 1917: First ciuarter... Second quarter. Third quarter.. Fourth quarter. 191S: First quarter... Serond qunrter. Third quarter. . Fourth quarter. 191S: September'.., 1919: First quarter. 1919: April 105 96 94 109 UG 173 122 150 156 159 166 176 176 173 176 173 175 2. Basic building materials, 101 100 97 115 137 179 131 138 140 140 154 172 189 203 198 2a3 200 « T „™ 4. Con- ! beS stniciion 5. All bSdfns iron and , building mSds I steel materials. materidlb., pj-g^iucts.! 104 97 95 111 143 175 125 146 150 152 162 175 ISO 184 184 184 184 112 92 102 ISo 208 242 105 96 96 122 161 1S5 242 233 203 193 191 1S9 6. All other 7. Farm commod- products. ities. 100 98 99 101 101 103 126 120 l.SO 184 206 214 100 150 185 187 ISO 198 186 203 197 204 201 210 212 224 213 216 217 236 206 216 211 ■22i 8. All commod- ities. 100 99 100 12-3 175 197 155 179 184 ISl 187 192 202 205 207 200 203 1 Month of maximum level for prices of all commodities. Base: In all cases, average of indices for the year July 1, 1913, to June 30, 1914. 1. Lumber: Index figures of price section of War Industries Board. 2. Basic building materials: Does nnt include lumber or steel. 3. Lumber and building materials: Doe« not include steel. 4. Construction iivinand steel products: For method of obtaining figures, see Section VIII. 5. All building materials: V\>is:hted averages of figures in series 3 and 4. 6. All other commodities: Figures computed bv T. S. Uolden from data obtained from Bureau of Labor Statistica. 7. Farm product.^: Figures of Bureau of I.,-.')or Siaiistics reduced to new base. 8. All commodities: Figures of Bureau of Labor Statistics reduced to new base. ECONOMICS OF THE CONSTRUCTIOX IXDUSTRY FARM PROD. 116% OTHER COM 115% FIGURES FOR LAST QUARTER QFI9IB 1 BLDG. (NOT INCLUDING LUMBER 73% — ^ <<^ 1 i > Farm Prod. Blde. Mat Other Com. From the year precedinb July. i9I4. the dollar. expressed in terms of the above groups of commodities, shrunk to theam0unt5 indica ted in the shaded portions of the circles COMPARISON OF RISE IN OTHER COMMODITIES U.S. DEPARTMENT OF LABOR INFORMATION AND EDUCATION SERVICE DIVISION OF PUBLIC WORKS AND CONSTRUCTION DEVELOPMENT CHART II. 48 ECONOMICS OF THE CONSTRUCTION INDUSTRY. FIGURES FOR LAST QUARTER OF J91B Pf^e-Wdt" Level = Ave^^ge from July I. 1913 to June 30. 19 14 PORTLAND CEMENT (PIdnt Pr/cesJ MINERAL AGGREGATE fP/dnt Prices) COMMON BRICK OTHER CLAY PRODUCTS BUILDING LIME. STRUCTUALE-^'^'^.ll It -r fsr BLDG. GLASS (N.YMdrhEf.ApK 1919) COMPARISON OF RISE IN VARIOUS BUILOING MATERIAL GROUPS U.S. DEPARTMENT OF LABOR INFORMATION AND EDUCATION SERVICE DIVISION OF PUBLIC WORKS AND CONSTRUCTION DEVELOPMENT ;hart in. ECONOMICS OF THE CONSTRUCTION INDUSTRY. 49 SECTION II. COMPARISON OF PRICES OF IRON AND STEEL PRODUCTS WITH PRICES OF BUILDING MATERIALS. Importance of steel prices in comparison with building material prices. Prices of steel have been regarded with considerable interest both through the war period and during the period of readjustment. The subject of ])roduction and prices of iron and steel is by far too large a one to go into extensively within the scoj^e of this re])ort. Further- more, the iron and steel ])roducts used in construction form only a small part of the total amount of iron and steel jn-oducts. However, it is of great interest to make a brief smnrey of the history of the steel industry through the war period by way of contrast with the building materials industry. Various iron and steel products were regarded as essential for v\unning the war, and j^roduction had to be main- tained at the highest possible level. On the other hand, the manu- facture of building materials was regarded as unessential, and ])roduc- tion of these items was specifically curtailed by Government order. Brief survey of the steel industry through the war period. The year 1914 was one of the worst in the history of the trade. This is clearly shown in the low prices for that year, which was marked by dechning jjrices, reduced production, slack demand, and poor financial results. The "ear 1915 was the year of recovery. War orders for the enten*'" 'Jlies began to figure largely, the demands for steel produc- tior, e greatly increased and prices advanced in the second half of ibf ^ '^'"^. TL^ —XV 1916 was the most prosperous in the liistoiy of the indust)^--^!*) 'to that time. Prices advanced considerably, demand incrc. , earaings of the companies were very large. Labor also sLa,red he i>rosperity, and adAances in wages were fre<{uent. The year 1917 was marked by the entry of this countiy into the war. It soon developed that a very large i)ro])ortion of the steel outi:>ut of the country would be needed for war uses. Prices of steel, iron, and coke soared to unprecedented levels until the Government found it necessary to fix prices on these ]>roducts. The Government's fixed ]>rices ruled the markets from the last quarter of 1917 until the end of 1918. War-time production of steel. Statistics })ub]ished by the American Iron and Steel Institute in February, 1919, give figures for the production of steel up to and including the year 1917. A comparison of 1917 figures with those for 1913 is of considerable significance. They show an increase of 41 per cent in steel castings; 44 per cent in ])lates and sheets; 29 i)er cent in wire rods; 5 per cent in structural shapes; 57 ]>er < en tin merchant 1L'1L'07°— 10 4 50 ECONOMICS OF THE CONSTRUCTION INDUSTRY. })rtrs; 4S ]>c\- rent in coiki-cIc bars; mid u rcdurfion of 16 ]>er cent in iron and stool mils. Tlio total prodiKtion of all grades of ])ig iron in 1917 was 2.") ])or cont groator than in J9i;;, and in 1918 30 por cont greater tlian in l!)l.']; steel-making iron in 1918 was 4 ]jer cent groator in <-|nantity than iti 1017. Steel prices. A history of steel })rioes is shown fairly comjjlctely in Table 4. Prices advanced rapidly from the second half of the year 1915. With the entry of the I'nited States into the war, the market began to soar. The table shows that on the average finished, steel prices in Jniy, 1917, were 3.79 times the figure for the year preceding July, 1914. The month of Jidy. 1917, was the time of the highest steel prices. Prices declined by a small jimount until the Govern- ment assumed control in November. During the period of Govern- ment control, there were some slight fluctuations in the scale of prices. As shown in the table, the index figure at the time of the armistice was 228. The prices fixed by the Government were necessarily high, as the principal desire was to encourage maximum production; this end could be attained onl}- through guaranteeing a fair i^rofit to those producers whose costs were highest. Early in 1919 the industry announced reduotions on various items. Tliis reduction brought the index figure on steel products down to 217. The declines, however, were not considered by the buying public as sufficient to interest them. In February the amount of unfilled orders on the books of the United States Steel Corporation had fallen to a lower figure than for any jH'evious month since October, 191.">. Although the Inning pu])lic did not respond to the declines in prices early in the year, the steel companies adopted a j^olicy of waiting until such a time that further reductions would tend to increase business rather than to encourage the public to wait even longer. Finally, on March 20, after conference with the Industrial Board of the Department of Commerce, the committee representmg the steel companies announced a new schedule of steel prices. Tlie new schedule presented an all-round reduction of 14|- per cent from November, 1918, prices. The index for prices obtauiuig after the new schedule was announced, is, as shown in Table 4. 195. Rise in wages in the steel industry. Figures recently published give the average wages per employee per month paid by the Bethlehem Steel Corporation. These figures show that in 1918 the average earnings received were exactly double the average for 1914. This increase is believed to be typiciil of the entire industry. It is probable that these figures include a certain proportion of overtime pay, and that the average earnings per month ECONOMICS OF THE COXSTRUCTIOX INDUSTRY. 51 per employee were somewhat less after the armistice, without any reduction in the wage scale. Ou April 9, 1919, a statement was made by Judge Gary, spcakino- for the United States Steel Corporation, as follows: ''For 1913 the direct cost of labor for ore, coal, and stone through to the finished product, inclusive, but exclusive of labor in transportation, was $15.13 per ton, and at present, on the basis of March wage scales, it is $34.(31, or an increase of $19.48 per ton." Early m 1919, at the time the first reductions in steel were made. Judge Gary announced that it was the policy of the United States Steel Corporation to maintain the existing wage scale. On March 20, when the new schedule of steel prices was announced, the committee of steel men stated that the new schedule was the lowest consistent with production costs based on the current wage scale. Fuel and raw materials prices. Not only has labor cost increased, but the costs of fuel and of raw materials have gone up along with the other elements of produc- tion. The increase in prices of Connellsville coke and iron ore (Messabi, common, non-Bessemer, 51^ per cent) are shown in com- parison with the rise in pig iron (basic) in Table 5 and Chart IV. Chart V is appended showing the fluctuations in prices of steel rails (standard, open-hearth) . Comparison of building materials prices with prices of iron and steel. The comparative figures on the steel products group and the buildmg materials group (not including steel) are shown in the table below : Comparison of indices on finished steel products and buiidin'i materials 'not inclvding steel). Steol Building products, materi'als. Julv 1, 1913, to June 30, 1914 1 lOD IW July, 1917 379 a 150 November, 191S 22S 1S3 Mar. 1, 1919 217 1S4 Mar. 25, 1919 ' 195 1S4 a Figure for third quarter, 1917. There was this difference in the conditions that determined prices on steel and on basic building materials: In the case of materials regarded as not essential, such as most of the building materials other than steel, the price whether fixed by the Government or in the open market, was not sufficiently high to keep all producers in the market, simply because the maximum production was not required by the war-time needs of the country. In fact construction ('. 52 ECONOMICS OF THE CONSTRrcTION INDUSTRY. itself, as avcII as production of various ])uileo .,f,4^ ^4-44^ », t'iil" s i i i i Ji s < .4 13,4 I9.» L ""'— ECONOMICS OF THE CONSTRUCTION INDUSTRY. Table 4. — Prices of iron and steel products — Continued. 53 Commoditv. Prewar price. July, 1917. Novem- ber, 1918. Mar. 1. 1919. Mar. 25, 1919. 12. Sheets, V)lue annealed, No. 10: Quoted, per hundredweight J1.49S3 Relative 100 13. Galvanized sheets, No. 28: I Quoted, per hundredweight ' ?2. 98.W Relati ve \ 100 J4. Tin plate, 14 by 20 inches: j Quoted , per hundredweight $3. 4375 Relative 100 15. Hoops, base: ; Quoted, per hundredweight Sl.3917 Relative I 100 16. Rails, Stand. Bessemer: Quoted, per long ton i $28.00 Relative 100 17. Rails, Stand. O-H: I Quoted, per long ton ' $30.1467 Relative j 100 AVeighted average of finished steel products. . | 100 $8.23 551 $10. .50 352 $12. 00 349 $.5.50 395 $38.00 136 $40.00 133 379 $4.25 284 $6.25 209 $7. 75 225 $3.50 251 $55.00 196 $57.00 189 228 $5.90 261 $6.05 202 $7. 35 214 $3.30 237 $55. 00 196 $57.00 189 $3.55 237 $5. 70 191 $7.00 204 $3.05 219 $45.00 161 $47.00 156 Authorities: All except Nos. 7 and 10 from Bulletin No. 5, price section. War Industries Board, Novem- ber 1918; later figures from the Iron Age; Nos. 7 and 10 from the Iron Age. Table 5. — Comparison oj prices on iron ore. cole, and pi(j Iron. 1. Iron ore. 2. Coke. 3. Pig iron. Period. Price per ton. Relative price. Price per short ton. Relative price. Price per long ton. Relative price. Bfise 1913 ^ $3. 3083 3.4000 3. 0333 2.S250 3. 6750 5.0500 5.0500 5. 0500 5.0500 5.0500) 5. 0500 5.3500 5.7500 5.7500 5. 7500 5. 7500 5.7500 100 103 92 85 111 153 153 1.53 153 153 153 162 174 174 174 174 174 $2. 0625 2. 439f; I. ms3 1. 7.S.D4 . 3. 2458 :. 7,500 7.9167 11.3333 6.0000 6.0000 6.0000 6.0000 6.0000 5. 6500 4. 440CI 4. 1250 4.0000 100 lis 87 157 376 384 549 291 291 291 291 291 274 215 200 194 $13.3183 14.7058 12. .'<733 13. 7408 19.7600 30. 6923 42.9231 49.0000 33.0000 33.0000 32. 00f»0 32.0000 33.0000 30.0000 30. 000(1 30. 0000 27. 8750 IOC no 1914 97 1915 103 1M6 14S 1917, by quarters: First : Second Third Fourth 230 322 368 248 1918, by qu;u-ters: First 248 Second 240 Third 240 Fourth 248 1919, by months: 225 February March 11 225 225 March 27 209 1. Iron oic, Musalji, non- Bessemer, 5li per cent; market, Lower Lake Ports; source. Iron Trade Review, 2. Coke, Conriellsville, furnace; market, f. o. 1). ovens; .source. The Iron Age. 3. I'ig iron, basic; market, Malioning or Shenango Valley Furnace; source, The Iron Age. Base: In all cases base equals average of prices Irom July 1, 1913, to June 30, 1P14. 54 ECONOMICS OF THE CONSTRUCTION INDUSTRY. SECTION III. COMPARISON OF WAR PRK ES IN AMERICA AND CERTAIN FOREIGN COUNTRIES. Explanation of tables. Tables 6 and 7 show the index figures of the United States Bureau of Labor Statistics, the Canadian Labor Department, the London Economist, and the Statistic^ue Generale of France. In these tables all the indices are expressed as percentages of the 1013 average. It should be understood that these different series of figures are not absolutely comparable, since there is considerable variation in the number of commodities included in the different series, and also since there is considerable variation in the methods used for obtain- ing these average figures. However, these figures do give a concrete indication of the trend of wholesale prices in these countries, and comparison of the figures for the several countries does bring out certain facts of considerable significance. There are at hand some figures on Australia, taken from the Com- monwealth Bureau of Census and Statistics, the indices being aver- aged from wholesale prices of 92 commodities. These figures, being incomplete, are not included in the tables. The six tables (8 to 13) showing comparisons of actual prices in the United States and foreign countries have been based on quotations furnished to this division by the price section of the War Industries Board. These quotations haA^e been reduced to quotations in terms of American money. In the case of each quotation the change to American money was based on the actual rate of exchange that prevailed during the period in question. The great preponderance of prices of iron and steel products is explained by the fact that more quotations were available on these commodities than on other building materials. While no foreign quotations are available for 1919, it is unlikely that there have been considerable reductions, if any at all. In this connection, the reduc- tions in prices of American steel products that have taken place in 1919 should be considered. A comparison of indices. As might be expected, the countries nearest the scene of actual warfare show greater rises in the price level than have been evident in this country. It was also to be expected that the rises would begin earlier in the European countries than the}^ did in this coun- try. The figures for 1915 show a 40 per cent increase for France, 23 per cent for England, 10 per cent for Canada, while the price level in this country remained the same as for the year 1913. How- ever, this country began to feel the influence of war conditions early in the 3'ear 1916, more than a year before we became an active belUirerent. ECOK'OMICS OF THE CONSTSUCTI027 IXDUSTEY. 55 The Australian index for the first quarter of 1918 was 173, as com- pared with 187 in this country, 194 in Canada, 216 in England, and 320 in France. It is not surprising that the general level of prices should be affected in less degree in Australia than in other countries. Maximum levels reached. The highest point, 207, was reached in this country in September, 1918. In Canada, the November, 1918, figure, 215, is the maximum. Great Britain reached the maximinn in August, 1918, the mdex then being 233. Of the figures available for France at the time that Chart VI was made, the greatest is the one for May, 1918, 335, Figures obtained later showed the maximum for France, 360, to have been reached in October, 1918. These maximum price levels are sho^vn graphically in the accom- panying chart. It is significant that France, which resorted to inflation more extensively than did either England or the United States, exper- ienced a considerably larger increase in the general price level. Prices in Great Britain. Although each set of figures is referred to the 1913 figure of the particular country in question as base, it is impossible to say that a comparison of indices indicates more than the trend in the respective countries. If the figures of the London Economist and those of the United States Bureau of Labor Statistics were entirely comparable, then the indices for March, 1918, would show that prices for England, on the average, were 7 per cent higher than in this country. Perhaps this figure is somewhere near the correct indication of the difference in prices in the two countries. It is known that prices on a number of commodities were liigher in England at the beginning of the year 1919 than they were in the L^nited States. It was stated early in 1919 that prices on steel products ran from 5 to 40 per cent higher in England than in this country. That was before the reductions announced in this country in March. In the middle of the month of March there appeared statements in the daily press to the effect that the United States Army had been offered for certain supplies held in England higher prices than had been paid for them under war conditions. About May 1, 1919, it was stated in the press that the city of Birmingham, England, had placed orders for steel rails in the United States on account of more favorable prices and conditions of deliver}'. The British Ministry of Reconstruction has issued a painjjhlet stating that while it expected that prices would recede somewhat from war-time levels it was out of the question tliat they should fall to anything like the 1914 level in tlie near future. i6 ECONOMICS ()T THK COXSTllUCTION INDUSTRY. In the same pamphlet the causes assigned for the great increase of prices are reduced output, increased freight rates, limitation of imports, and issuance of paper money. Prices of building materials in Great Britain. The information at hand on building materials in the British markets is ratlier meager. The commodities comprised in the Lon- don Economist index figure do not include a building-materials group. It has been stated, however, on good authority that on the average the cost of building materials in England early in the year 1910 was more than double the prewar figure. This would indicate that building materials in the English markets have risen to prac- ticaUy the same levels as other commodities. The increase of more than 100 per cent indicated in the above statement, compared "with an increase in this country of only 84 per cent, shows that the buyer of building materials in England is to-day in a worse situation than the American buyer is. Some figm-es given in the report of a special investigatmg com- mittee of the British Government shows that as early as November 2, 1915, certain building materials showed very marked increases over the prices obtaining at the outbreak of the wa-. These figures are given in the following table: Percentage nf increase in prices of huildbK) materials in Sco{hni(l,from oalbreah of tear to Nov. ,?, l'J15. Material. Increase. Material. Increase. Per cent. 5 7.5 2.5 110 200 100 Iron Per cent. 50-100 Fire clay 50 Brick Galvanized tanlcs 75 Wood Wall paper 25 Zinc... . White lead. 100 Lead Oils 20-30 The building industry in Great Britain after the war. Great Britain's housing needs at the close of the war have been variously stated, the estimates running all the way from 300,000 to 500,000 houses. The Government is making its })lans for a national house-building project, subsidized by the State under arrangement with various local governments. It is considered necessary for the Government to assume part of the risk of declining prices, for other- wise private builders \vould hesitate to l)uy materials at prevaiHng figures. It was ascertained by a committee appointed l^y tlie Minister of Reconstruction in Great Britain * that sufficient building material > Report o( the Committee appointed by the Minister of Reconstruction to consider the position of the building industry after the war. London, 191.S, 13 pp. (c. d. 9197). ECONOMir? or the CONSTRUCTIOlSr indt'.=;tp.y, 57 /iufhcn'h'es U.S.- Bureau cf Leber Statist cs Lancda-Cdnadidn Labor Depi United KfnQdom-London EcDt:crr//sf Frcnce-StdfisfiQue Ce/ien/B FRANCE MAY 181 PRICE LEVEL IN THE U. S. AND OTHER COUNTRIES U.S. DEPARTMENT OF LABOR INFORMATION AND EDUCATION SERVICE DiVfSlON OF PUBLIC WORKS AND CONSTRUCTION DEVELOPMENT * price ievel in FiuDCt. iliiAvi o incK.ise of 2tU per tint in Ociobtr, I('l.<' CH/\RT VI. 58 ECONOMICS OF THE CONSTRUCTION INHUSTIIY. would not 1)0 available in that country to acle(|uat('ly meet tlie demand after the Avar. Tliis fact, the committee stated, would require a certain measure of control. Tlie policy of control contemplated was one which woidd fairly c((ualize supj)ly and demand and guarantee that works of national importance shoiJd receive essential supplies. The committee did not propose to regidate prices. The principal means of regulation advocated related to the labor situation and the form of taxation. The increase in the production of building materials was to be secTU'ed in various ways, among which are the following: 1. Priority of demobilization for men engaged in the professions and trades concerned in the building industry. 2. Similar priority of demobilization of men re((uired for the pro- duction of building materials. 3. Immediate provision of labor which is available for the making of standard bricks. 4. Immediate facilities for repairs, renewals, and restoration of building materials establishments. 5. Immediate release from Government control of brickyards and premises now occupied for storage. 6. The securing of adequate sup])lies of fuel and raw materials. 7. The scrapping of inefficient plants and introduction of more modern appliances and increased use of machinery. 8. The use of local materials wherever possible. 9. Institution of scientific and industrial research in the respective trades. 10. Financial assistance by the State in the extensions and equip- ment of work. 1 1 . Closer cooperation between employers and employees, such as may be secured by the joint industrial committees. 1 2. Early placing of contracts • wherever jwssible for postwar delivery of materials, such as brick, stone, etc., in order to estabUsh confidence in the various trades by the knowledge of a sufficiency of work for some time in advance. 13. Standardization of fittings in all trades, such as doors, sashes, windows, hardware, and the like; and, finally, 14. Immediate steps should be taken for the importation of 100,000 standards, 198,000 M a month, of softAvood in the first year after the war. The report suggests a rather elaborate machinery for the purpose of attaining the ends desired, with a system consisting of a central committee, regional committees, and field agents, the personnel of the committees to be made up of architects, civil engineers, sur- veyors, employers, manufacturers, distributors, and workmen. ECONOMICS OF THE C'OXSTRUC"TIOX INDUSTRY. 59 With reference to the causes of unduly high prices and the methods of controlling these, it was suggested that these matters would tenil to regulate themselves by increasmg the building productivity of the coimtry. As a means of increasing the building production of the country there was the increasmg demand for workmen's houses. The committee, however, looked upon the building of workmen's houses merely as a supplementary means of steadying the demand for labor and building material. Later reports from England state that the Government has agreed to guarantee all those who build houses in 1919 against decline in materials prices for a period of five years to the extent of 75 per cent of the depreciation in value of the buildings caused by such decline. It has also been stated that the Government does not expect any marked declines to take place during that period. Conclusions from study of foreign prices. This brief survey of foreign prices shows that the great rise in pi'ices during the war was a world-wide phenomenon. In all the countries studied the rise in prices has been accompanied by a great increase in the amount of money and credit mstruments m circula- tion. The fact that prices have risen all over the world makes it extremely unlikely that they will return to prewar levels for a con- siderable period of years, if ever. One large element in the rise of prices m the European countries was the great difficulty of importing raw materials under the condi- tions of war. With the signing of the peace treaty and the resump- tion of trade relations between nations on a normal basis, this diffi- culty should be, to a large extent, removed. That should tend to reduce the price levels in those countries somewhat. But America, havmg suffered less under this difficulty, will benefit k>ss by its removal. The very fact that the increases were so much greater in England and France than in this country would lead one to expect greater proportional declines. This has actually been the case m the period following the attamment of the maximum levels m this country and in England. From August, 191S, to February, 1919, the price mdox of the London Economist fell 7.5 per cent. Dun's mdex figures indicate a drop in the price level in this country of 5.7 per cent from September 1, 1918, to March 1, 1919. The Bureau of Labor Statis- tics figures indicate a drop of only 3.4 per cent for the same period. In this country, after March 1, 1919, commodity prices in general have reacted upward. 60 ECONOMICS OF THE CONSTRUCTION INDUSTRY. Tahm; 6. — Whohsah prices in the United Slates and certain foreii/n coiintriet. [Inflcx numlKTsrxprc'Ssod as percentages of the index ni!mV)er for 1913.] Yearly averages. 1. Tnited States. 2. Canada. 3. Creat nrilain. 4. France. 1913 KK) 99 100 12S 175 196 100 100 110 134 174 205 100 99 123 160 2W 225 100 1914 102 1915 140 1916 18J< 1917 262 1918 ; .• 339 Commodities. 1. From nuroau of Labor Statistic? 294 2. From Canadian I )epail mint of Labor 272 3. Fromthc l>ondon Economist 44 4. From the Statisliquc Ci6n6iale 45 T.\BLE 7. — ^Yholesnle prices in the United States and certain foreign countries. [Index numbers expressed as percentages of the index number for 1913.] 1914: 1916: First quiirtor. .. Second quart cr. Third quarter.. Fouilh quarter. First quarter... Second quartrr. Third quarter.. Fourth quarter. 1917: First quarter. . . Second quarter. Third quarter.. Fourth quarter. 1918: First quarter... Second quarter. Third quarter.. Fourth quarter. 1919: First quarter. . . Second quarter. Third quarter.. Fourth quarter. January. . February. March.... Highest level. Quarterly aA'erages. 1. Uniicd States. 2. Canada. 100 9S 101 98 99 991 100 ! 103 j 112 ! 117 I 123 141 I 155 179 184 181 187 192 203 204 202 197 200 100 100 100 102 a 103 a 108 a 111 112 a 127 132 al32 138 159 175 180 183 194 203 210 214 211 206 207 215 ^.Sept. '18) (Nov. -18) 3. -'£ S K 0.5 t3 -p. I- « ? S .t^ cot! ^" C.i3 s « « s w 3 C 3" = 3 §.2 62 ECONOMICS OF THE CONSTRUCTION INDUSTRY. tfi M ^1 CI t~i~. 'X. c 9) ^, ^, •n -rcoc* j: C , w ^ I'- CI CI Cl« w. 00 -r. Tj tr; to « C 1 "5— d X o g 1 St:- 1- till fijjris cicic^ci c<5s*'* P c c S c5 11 s 1 If =. a K S ^ coec CO w C O C i -1 CO CO CO CO ^ ccoe C C CI o oc c c o •1 CI CI CI c t~: t- 1^ r- CI CIO c 1^ 1- C I- C CJ C^ '.- 1 1- t^l'^ I-^ t/. ■S' 3 ci£ ^1 Si CO CO CO c^ CO COCO CO 1; :3 *- » t- £ 3 "^ cc ^ o ..^ i SoSfeS gSS5 K •c ||6| c3 :; i- 1 |i V, 5^co cc CO mS cc ai.-:..ci-: CO ^IC o 1 '-^' 1 c s: CO c ~aoea »^ 3 5 c a. i^ X ^ ^ _g X. ^ . c K a c gSSi 2 f2 CI S ??SS3 *& «l 00 OC X t= ■«■ ci coc ci ■* o cJ 3 Il c K CI CI CI CI c CICJCic C4 CI CI CO c ■s y. . _o c c c o c c CI c< » a: c = r c CI T -c -^ §2?.g C3 2 ^ . 5 r •£ M « 3 .2 — c; v£ -r cc — ci c cc coco ■* c ' Il c c « • ^ >> c-r=^^ £■" ~— 5-^=^^ c e a 1 i 1 3 t- rt CO ■♦ •o CO c C3 '"' c i % c w n S 5> s ECONOMICS OF THE CONSTRUCTION INDUSTRY. 63 t^QCC^O O^'^-OCt^ OOcCiC o CO r^ Ci CO li^ o '^r -^ -^ lo ci f-i CC CO CO cocc coco CO-: _ _CCO COQM :i.-:ai-; cioiri^i c^^^o ';Cwt>- i>.i>r*i-* o^;oi> ccuoiooc ir:u:)idO ^ojQ 5S TfiOiOiO lO^OiQiO *^55^^ ^ -^ (£ ^ o o ; CO O -^ O O CO 3^ Ci C C ■»*« OC i-t -X 8 SSi r-Cr-O .— CCi-OOO OCXXI^ "tf^iOua*© ^5t*30iO ir2ii:;»r3»0 ooco oooo oooc ■^ QC o -^ c: c. c '.o c c CI CI t--^ CO lO ^ Ci :ci O -^ C O TT X cc CO CO o cococoo oooo Ci i-O CS C» O CO 1^ O O O O CJ ^ lO "3 ^ r>- O :C -O *M ^ Xi CO t* -X) ■^ CI CO c« ^ *o c; -3^ cio coco ^H (M O CO ^ 30 00 O W5 CC — I »-» c^ C-J r-M r-C^ r So oo ; ,-^ Lo o' 5QO O soo ^ * o" o ■'icioto (ooocc^ < 2; ^ •7, y- £a o ao 64 ECONOMICS OF THE COXSTKUCTIOX INDUSTRY. [/; ~> MM C .>~ cr y ,^ •r .» t- a CO 3 » — c . — — — fC C ^* OC •? cooo •if 1 |,c-5 a a '■dd'z: c =-; T ; ir ■* CO If -tf' ^'^■5;S !£||§ c( X - « t< 1 E 1 a 1 Ik 3 j; « J' o 5 III a 9 :-- ^ a c 3< ;;?:et5 ?.^.:^S o ■g ^ i 1 'C ^ S ""■' ■>r •«•■» •»■ _»H c ' X K ? a c.g .- gs#.^ •r -r C-. u- c ^ »«.in x ot^o o C-. C. -r C »r: t * ai a: ri « 00 '^ >- ^ 1 •^ S c L? Li Li li Li L-i Li S S 32;^g SzSS o ■7, i:«5 O .« "o "" j: ai:-3 "5 a X <— a 0! ». 1 0^ „' a '-.3 c C-. C-. ~. c- 2^21^2 2?5gi2 ::?:E-'S < a c _ a •2 b^ -. rj ? ) ji c;_ c i ri c-< oj cc ci •£ ci W si — i-o "^ ^ ^ .' c = — = ccsici(i i-i-xcc ca g "3 c J3 £ i i S X c , Cl c c c c- c-i M c LO r~ c CI in t^ r^ -H fO . M -w c c c: -0 Tf -.c — 1- CO X X. -H 1 •c ""^' >i ^ -e -"^ « y c/i y: ••: i^ >-: d -r <» d d d oi } c is 2 ■"TTT-S'CO TOCO'TTr -wu-iUJUS l^KOOOO Q, -, ~ J= w c c|| 6^ f J i C ""x"^ rt " a § SSL^^S g?>f32 g?-?S tSSS o T? CJ C •d T3 ~i? •^ c- 1 - ic -^ L-: V -^ r r; r^ d d — 1-I1-; t-^ J * -^ L'; *c L* "^ uioj c a CO rococo ;3 e aS «% ■-i -03 v; ^ 2fc--£E2 Hilt M c-.c-.0-.r7. re M (-» 1.-5 c -"l- "5 if Oi OS C» § 5-4 oj e. c: — -^ tc -c 1 - ^1 c^ •£ t- i~ i« TT ■>?• t^ tc coco ■«•' Ti^ ?i -5 ci x t' -H N -T -o^ -^ T) S g po -v -v -v CO cowv^ ^-vtoto tcooocoo c Eh «^ "3 i ^ :5 K a ta'S s ^ fe 1 _j . li ■V. c-j , -. ccxo cc-.rc r-r -^ '£ CO a: CO ' s^ OC D X -"T TT M c-j lo — -.c X -.0 « cc CO ir i E£? 5 ffix -?^ ci d x ^ ^ oc -x 1- t^ — i oc -v c-i doci/ir-i ■ ^ 2 1^ I cccc^co o.-ii.'ius sci-ocao csojooc ' ~B •' N c ~ 5 ~ '^ 7-^ !?d X J: ^ 5 a \ ^~ -z ••^'S J-." cccM c•.c^50 CCO-.CCO tCMteto ■^ JC S,s 05 i -n ,, tccco OfflON ONOO toasoo '■^7-^ Vi/: — d oc'i i-^i-i^ d -d 00 06 CO d 06 1^ ! X, Z C-) c-5 CO to CO ci c^ (N P) n C) M CO LO U3 us CO \ g X II ^^ c CO CO 3 7^ 1- & u C t. 1- 5 t: u ^ rt !3 1: "5 a s a b a c5 a t: a s: 3 "S a c9 3 1 t'. Sc-a c - gc-a a ' Sc-a a 5"a ~j: t> a "u^ * ^ in 1^gl^ "S f.'S t t^iSI c •c «■ s 1 c- " ..;^l^;^ b CO t/. ct CO U5 CD J a c la — s c M » o> s a ECOXOMICS OF THE CONSTRUCTION INDUSTRY. 65 SOrr -H -^ — CO yf ci o o r-1 -r »f6 iC »C '-C (M cc *r ^ f-* f-H Oico . * CO C^ CN Oi e^ 1^51-* CO IC CO TT »C -^ m; CO lOIQIOir CO tc o -o oooc CO lococo oooc »o ' ^ S3 CCOyDCO oooc o-r rt t^ ' ■" ODCOOO ococoooc __ C3 c « cS cS s* c3 • tJ >H c O t- c s^t's fe t^i: S q; M 1^^^ i-t IPII .ti gx; o ..felXeHflH ^fecoEHf^H 1^ £.3 c so 121297°— 19- ee ECONOMICS OF THE C't)N.STnUCTION IXDUSTRY. Nails. OS - 1 c 'a o Chamber of ("ommeroe .Fournal. Yokohama. .-r .t':2'^,-r 3:^^- -:-:S!: -rj^r.^- S::?::?.-:? SSJL^;^ SfJ^2 sgS^ .3 1 1 13 a B C s CO a " C « = c S SS'^^S F-RS'ii S558 S?.?2 -. — „.,-__ — — ^ , , ^ 1 s ■ a> .is a. o 1 S Sg?S SSfi9. °^^^ S5:^3 ^ o :b ^r f-i ^ ^ ^ c ^ ^ ci QC 1.^ -! — -d eg coccc^m «r:^:?5 ccrjccm -T-r-.-o 1 a. 1 1 a 1 ■So c K 3 E- £32 •r » tc CO r- 00 -.c CI ~: K ^ c» <-- r~ ci — • c< C oc CO 1.-; — . -r -K «c c< — -r o; cr. ■«• ■.'^ o •-■; « rj I - oi e-j c t - ■--: •■•t oi c-^ c i '■-' !>i o i- •* o 1 t o C 1 III C5 t-OCCCO t~OI~0 COOt-M COKl^f^ f-1 -^ c^ — oi <-■; c: .-■: ..■: -r u'; 1 - u~ ;= i.-: c- -r CT CO « :<: ! X -! ^7 -»^ C-) c^ cq CM c-i e-i ^J ^ .-; m c-j m r< cs r-4 ro r5 ■ 1 1 1 ! 1 ,-i.' r- t-o cccrc c;oc= ct-ot- .S'oS '^ 22°"^ '-'SSS '^^jj^ ssgs "■^Jq-r 2 oooc5 SoSc cooc S-3SS «£| ^ ^sgs gss= ^sso ==1^4 S2« > 1 E 1 1 •if c 1 1 •5 a S >^ cc 5 > c •23 1913: First quarter Second quarter Third quarter Foui (h quarter First q uarter Third quarter 1915: First quarter Second quart er Third (|Uarter Foiu-th (| uarter 1910: First quarter Third (1 uarter ECONOMICS OF THE COK^STRUCTION ISTDUSTRY. (J7 r" o o ^ ^2-^3: CC' ^ o X « o 2 ' 01.40 70.20 SO. 00 73.40 70.00 70.00 70.00 70.00 XXXX t-(Tl !^ s :ii§ iiii XXXX 40.0000 40.0000 40.0000 40. (K)00 .53.0769 .57.0000 57.0000 57.0000 ^ M * S 3 a 3 3 ^' eg 5-0 ~A m O.b 5 .fc!g.3o ■■^Oji-'r^ X. o «0 68 ECONOMICS OF TIIIC ( OXSTRUCTION INDUSTRY. -6 8 sss g§gg gi'll 2z§3 1^ lO -£ IQ O C 0-. 'O I'l O O CO I- l~ 1~ >~ <= <= c; o e5co ci c o o cScS •OiOt-ifO irtC^-^iO CCa505'»»» i^t-ccoc oc c oc X* o o cc o M S,2 o CO a >< fe ^.a ^ .b a .•i^ :S3S^ 52^!= ~ — I o >rt t : — O -i -JS T 00 OE -^ J^ Oi 00-- 00 ocoioci c — CO cc»: Eh 5^ . Ills go 2 O ^^ --0 « OC I^ o ■ "^ 00 r^ oc o ic CO ■ IMOCO OOCr>- t^t^OO L-^ ;r »■: O 1^ t^ coc t; 3 2 3 . 5. :^. « ^ -^ -3 ~.a S~ o h = ^ 3 g -3 J .f^tgfHfe •■f=-^EHP=4 ..fe-ccefi" ••^a:e^f^ ECONOMK'S OF THE CONSXriUCTIOX INDUSTRY, 69 OS ■ ro^ ^ '(NfO OCC OPO oo oc^ 1.01 1.07 1.21 1.29 • 1.38 1.38 CO >0 r- CD (NO TT COOO O 1-1 CM OOOCOO QCCsOiCl tD Ci '-D •X> (N to iC 'O c;cr-oo ,-jw,-if-( 70 ECON-OMK'S (*F THK COXSTRUC'TIOX INI>USTRY. , , ^^ -hC3 oo 20 O •3» <3> o o ,_, ,^ ^ isss ci c i; coco Sec 3 SS33 a 55" a II iA o III III s >H o'-' 1 J4 1 '^ 1 ■p 8 sssg S^gs sU 05 "5| O -1 £7 S Ui:/ - £ -J" 2e| 3 3333 3333 3333 o 00 -c .o e - T :-: n a 1 fl SJ c^oicicj IN r4 c< c>i ?i rj i^ c^ r7 73 CO so 1 "So C a ■ 3 ^ s — > c; ft. a 1 2 31 I'll ■>r "^ -1" -3" •* -^CC ?Q cc?ic«co 1 i s ■§ S o 1 £ -^ rt 111 lis 9» >n oo!»oo CO 3 >o lO CMNCM -M :35U2 ^ «cococo cgot-cc T T OOO: ^ ^ ^ -|i i i s as iO -^ w Oi -r lO i^ u* "S J P3 ^-Hil c j < "3 W" a ^P2 1 1 • i i 1 ^ ; ,'^H -N ^ W u- 3»3;c«.- -r«3i '^c t ® . '. 1-- lO »^ oo o T t -r t ■^ -^o* c* o 1=1 — 1 "s i "^ 1 1 <=i S3 . o — 1 V", 1 '~ s '. '.CO coeoNco CO cc CO r^ 1 CC ««MM cococoro «•-< -j-ir ^!*^^" A c <3>CCC — V -§ e % oe ^r-;^^-; -;«-4-4 ^ , t i >^ 3 g ? c. ■g 5 "t^ __ ' ._- s CQ 1 oi "S ^ o g « !??2?« ■^^^•V i--sSS 1 ^ ^ g ^ tO-f -J ;C aD«s: 1 o" M a; fl H-a C (-* «-.' Cj 1- 0; C fcl w L ^ C . i- ._ s> « s siSs ssss Si§? J Ks§s !; S a = •S S d S i 3 * = : t- r « = > ^^ gs-sa - §c-= = « ^ - - «1 C" >. C-3-.C ■o-t) ^~ O-C-J: . ^- "--^ 1 E 1 1 a c 52 0-= .5 1 2 c 1 i 5 > i e § 3 ECONOMICS OF THE OOXSTKUOTieiir iifDUSTRY. tr>ct~-^ o -< ci ^ ooSo ooo •or:c<»ro loococ X G3CiC:<35 OiC50^ X •00 = 00^- ■•tO-— ■■» XOOC r- 5)^7 a J '.c — CM CO rfi -!r ^ rj; ;D :c :£ 0:300 oggs ^ r- • - ir 10 i--; ic ir idiO^Dtd cDt-^i-^t- «0:£M0 CM ?« ^ oc ^ — cie6-r!0 r-oooo 1 eOi^r^^o 0010 cs i c ^^ • c3 : a • tn : 9 Q>.— 5~ w ai a. u. Lh II r . a; !-■« C-e t.^ t^ c; t^ CJ ? £s3-e5 SSlf 3 *- i^ -^ 2 <- s =3 a fill c?-2j:3 i ijS 5 ..feo^£ifi '^ g 3 J 5 ^3 -■ cJ 0.9 I- o be 3 ECIONOMICS OF TTTK ('OXSTPaTCTTON INDUSTRY. ' Tl86S*Hol9t6~|l666W9l9 f t "? -« MEDIANS or relative: prices 92 COMMODITIES AT WHOLESALE! DURlNCi THE, CIVIL WAR -0 PRESENT WR --- CIVIL WAR PRE5EJ4T WAR. 1861 "<>> 1914 1862 ^""1915 leej-^-lBie r564»Hol9l7 (? 3 ^ o ■^ MOI . ■ I ' - 1 ■ ■ I ' ■ I " I ■ ' I ■ ■ I £00 !80 160 !«> iro 100 so s •- 5 K 5 *- i i 5 ^ I'T'I' S = S < 5: '(■■I "I"' I 4 I I 5 i a § t 5 i; i t i S 5 t, i ? 1 S 5 I! § Y '^ JS61 '^"o 1914 1 1862 ^= 1915 1 1865 ^"^ 1916 1 1864 "-^ 1917 1 1665 "" 1918 1 1866 ^1919 1 Chart furnished through courtesy of Price Section, Wi.r Industries Board. CHART VII. ECONOMICS OF THE CONSTEUCTION INDUSTRY. Y3 SECTION IV. CIVIL WAR PRICES AND THE CIVIL WAR RECONSTRUCTION PERIOD. Sources of information. The price section of the War Industries Board has made a study of Civil War prices in comparison witli prices during the World War. This work has been done under the direction of Dr. Wesley C. Mitchell, who is also the author of a book entitled ''Gold, Prices, and Wages under the Greenback Standard." An analysis of the War Industries Board Bulletin on Civil War prices and a further investigation of some of the statistical tables in Dr. Mitchell's book bring to light certain general facts of special interest in the year 1919. Description of tables. The figures in Tables 14 and 15 have been calculated for the pur- pose of comparison of Civil War prices with prices during the World War. The figures for the all-commodities group are the medians of relative prices of 92 commodities at wholesale, the relative prices for each commodity in the Civil War period being based on the average prices of 1860 as 100 per cent. The figures for the World War period are based on the year 1913 as the prewar standard. The prices for the years ISGO to 1874 were taken from tables in the well-known Aldrich report.' Of these 92 commodities, 19 fall within the building materials group. These articles have been matched with the same number of similar articles quoted in the markets to-day, or their nearest present-day equivalents, in order to obtain comparable figures for the recent war period. Medians of relative prices were used instead of averages. In making up the tables for the Civil War period, simple averages did not seem to give a correct indication of price relations, because the extremely high prices of some southern commodities (cotton, tm^pentine, tar, etc.), which were found in very small quantities in the markets, make the averages unduly high. There are no figures at hand which furnish a basis for a system of weighted averages. Consequently, medians have been chosen. The median is the figure so chosen that, as of the particular date, half of the prices of commodi- ties of the group are above it and the other half are below it. Fluctuations of prices of commodities in general during the two wars are shown graphically in Chart VII. Course of prices in general during the two wars. A comparison of the course of prices during the Civil War and the World War shows many points of similarity during the two war periods. The course of prices during the year of readjustment, 1919, and the corresponding period following the Civil War sliow more points of difference than of similarity. 1 Wholesale Prices, Wajes, and Transportation, report by Mr. Aldrich of the Commitloe on Finance; Mar. 3, 1893. Senate Report Xo. 1394, 42d Congress, 2d session, I'art II. 74 ECONOMiOS OF THE CONSTRUCTION INDUSTRY. During both wars the wholesale prices of comnioeriod of inflation of the currency. Owing to the pohcy of the Gk)vermnent with respect to the issue of large quantities of unredeemable paper money, gold was quoted at a premium in the money market. Prices based on. the greenback currency can not be regarded as otherwise than inflated. However, the statistics of tbe period show that comniodity prices remained about 20 points above the price of gold tltrough the year 1872. They remained ab^>ve the price of gold up to and including the year 1877. A comparison of fluctuation in commodity prices and gold prices is shown in Chart VIII. ECONOMICS OF THE CONSTRUCTION INDUSTRY. 75 The panic of 1873. The currency situation in the Civil War reconstruction period was partly responsible for the sharp fluctuations in prices that marked the period. Besides the money situation there were also the opportunities for development of unused land, rivers and harbors, railroads, building, all of which led to rapid expansion of business, accompanieil by wild speculation. The panic of 1873 can scarcely be looked upon as a result of the war; it did not occur until eight years after the cessation of hostili- ties. It was not the result of the ending of the great war, ])ut rather the result of an expansion too rapid to be economically sound and of an unsound financial system. Retail prices and wages. Retail prices show a more gradual decline than wholesale prices, while wages, which had lagged behind retail prices during the war, rose rather rapidly until January, 1867, when there was a slight break and the rising trend was resumed until the panic of 1873 caused widespread unemployment. In spite of the severe nature of the panic, th.ore was no sharp break in wholesale or retail prices or in wages at that time. The Civil War reconstruction period as a precedent. The similarity in the behavior of prices during the two wars is striking. It will be shown in Section V that durhig the first six months of the present readjustment period the decline that has taken place in prices has been slight in comparison with what took place after the Civil War, and also that it has taken place in a more orderly manner. It was 13 yeai-s after the Civil War before prices returned to the prewar level. The principal cause of the return to tlie prewar level was the fact that there was such abundant opportunity for the development of new and more economical methods of produc- tion in the shape of new forms of machinery and new kinds of business organization. These opportunities do not seem to exist for this postwar period in any measure comparable with tlie previous period. There seems to be no prospect of new economic factors entering into greatly lessen production costs. It should be noted on Table 15 that by January, 1871, commodity prices had readied a level 33 per cent above the prewar figure, and that they remained practi- cally stationary at that figure through the year 1874. Although the period 1865-1871 was marked by rather sharp price fluctuations, the same result would have been reached by January, 1871, had tliere been a steady decline of 8 per cent per year through those six years. 76 ECONOMICS OF THE CONSTRUCTION INDUSTRY. Building materials prices during the two wars. Building materials declined in price along with other commodities during the first half of the year 1865. However, the fall was less than in the case of other commodities. Whereas connnoditics in general (hopped 27 per cent, huilding materials dropped only 14^ per cent. The recovery during tlie second lialf of the year was more nnirked, prices of huihhng materials retuniing to tlie level of the last quarter of the year 1864, and remaining at that level for a period of a year })efore the decline set in. The index figure for the building materials group remained liigher than that for all commodities up to and including the year 1874. A comparison of building materials prices for the two wars is shown graphically in Chait IX. Prices of building materials after the Civil War. Building materials declined in price along with other commodities durmg the first haK of the year 1865. How^ever, the fall was less than in the case of other commodities. The average of building materials prices for the year 1865 is 14^ per cent less than for 1864, while for all commodities the fall for the same period is 27 per cent. The recovery durmg the last half of the year was more marked, prices on this class of commodities returning to the level of the last quarter of the year 1864 and remainhig at that level for a period of a year before the decline set in. The index figure for the buildmg materials group remains higher than that for the all-commodities group up to and includmg the year 1874. In January, 1871, prices of buildmg materials had reached a level 41 per cent above the antebellum figure. This result would have been attained had there been a steady decline of 5^ per cent per year from the January, 1865, level. If building materials had declined from the liigh point of January, 1865, at a uniform rate of 4 per cent per year, until 1874, they would have reached the level of 30 per cent above the prewar figure; which is the actual level attained at that time, when buildmg materials and commodities in general had reached the same level. ECOIsrOMICS OF THE COXSTEUCTIOX INDUSTRY. 77 Table 14. — Medians of relative prices of commodities at icholesale during the Civil War and the World War. All commodities. Building materials. Civil War. World War. Civil War. World War. Number of commodities 92 100 100 100 100 100 96 96 97 100 100 100 111 125 137 134 135 166 169 194 200 216 190 158 175 182 173 181 173 92 100 100 100 100 100 100 100 100 100 100 102 102 114 115 119 130 142 157 169 174 178 182 187 196 a 187 a 190 19 100 100 100 100 100 100 100 100 106 112 107 116 133 143 139 145 160 177 189 200 200 196 171 200 200 200 200 199 19 1860 and 1913: 100 \pril 100 Julv 100 Oct ol er 100 1861 and 1914: 100 100 Julv 100 October 100 1862 and 1915: 100 April 1(X) Julv 100 100 1863 and 1916: 104 April " 109 July 110 117 1864 and 1917: Januarj- 124 137 Julv 152 1865 and 191s: April 152 161 172 Jii] V 181 October 186 1866 and 1919: - a 186 April a 186 July a Estimated. Series discominued after December, 1918. Fiertiresfrom Bulletin of the War Industries Board. Relative prices for Civil War based on average for 1860= 100 per cent. Relative prices for World War based on average for 1913= 100 per cent. Table 15. -Medians of relative prices of commodities at icholesale in the period follou'ing the Civil War. All com- molities (92). Building materials (lOj. .Ml com- modities (92). Bmlding materials. (19). 18C7: 169 166 150 102 158 162 154 159 159 159 158 153 117 no 132 135 175 175 158 158 150 165 175 152 152 1.51 150 156 149 116 144 112 1871: January 133 131 130 129 133 110 130 133 135 137 1.30 131 130 120 130 130 141 April 142 Julv Julv 143 October October 144 1868: 1872: January 150 April. 150 Julv Julv 145 October 150 1869: 1873: Januarv 150 April 150 Julv Julv 152 October 150 1870: 1874: Januarv 146 April. ." Julv 146 Julv 142 October. October 135 > > 1 /^ » ^' \ * <• ' — 1 ^ -'-' ^ 8D 80 60 ,1. .1 . . 1 , , .. , J , . 1 . , 1 . , lit, ,l.,i. . L. 1.. 1. .1. . i. 1 ,.j_..j_.^ . . 1 . . I..I.. . . 1 . , I. . 1 , . 60 S ' : ru a 1- ' V S ; S g s ^ 5 ^ y- ■ 8 , lfi60 •-MSIS 1 1861-1914 i 1862 "» 1915 1 1865 - 1916 1 1864 " =1917 ! 1865 »-- 19161 1866- >]919 Chart fitnusht'd t lirougli courtesy of Price Section, Wur ludiistrics iJoard. CHART «X. 80 ECONOMICS OF THE CONSTRUCTION INDUSTRY. SECTION V. COURSE OF COMMODITY PRICES DURING THE SIX MONTHS FOLLOWING THE ARMISTICE. Basis of the study of the readjustment period. A study has been made of the course of commodity prices during the six months following the armistice, the study being based on the quotations of wholesale prices of 313 commodities which are published weekly in Dun's Review. Dun's index number stood at its highest level on October 1, 1918. Since this number is based on prices for the previous month, it is thus in agreement with the Bureau of Labor Statistics figure which shows the high level for the month of September. For the purpose of comparison in Table 16 the index figures of the London Economist have been placed in a column parallel to the figures from Dun's, and both sets of figures are given in separate columns reduced to the 1913 base. Since these figures on the 1913 base have been computed on a slightly different system from those shown in connection with Section III they are not comparable with those figures. The decline in the price level in the United States. Dun's index number stood at its highest level on October 1, 1918. From October 1, 1918, to March 1, 1919, the price level declined; after March 1 it took an upward turn. In order to make evident the orderly nature of the price adjustment, it is considered worth while to ])resent some figures on the nature and number of com- modities advancing and dechning from week to week. At first weekly quotations showed more advances than declines, although the price level fell by a small amount. From November 30, 1918, until March 22, 1919, there were each week more declines than advances. February 1 showed 59 declines and 9 advances, this being the smallest number of advances noted during that period and at the same time the largest number of decUnes. The month of January showed the greatest decUne in the price level of any month, about 4\ per cent. The excess in number of commodities shov»-ing declines over the commodities showing advances has steadily de- creased since February 1, until on March 22, the report shows 26 advances and 26 declines. March 29 figures show 20 advances and 54 declines. Of these 54 commodities showing declines 21 were on steel products, the declines announced being the result of action of the steel committee in conference with the Industrial Board of the Department of Commerce. Previous declines in steel at the begin, ning of the year had not brought the prices of these products low enough to stimulate business, as they were still considerably above the general price level of other commoilities. Tlu'ough the month of April and the first two weeks of May there were more advances than declines each week. ECONOMICS OF THE COXSTRUCTTON INDUSTRY. 81 Thus, it is seen that through the period from October 1, 1918, to May 1, 1919, commodity prices went through a more or less orderly process of readjustment. Although there were many dechning prices, at the same time there were others advancing. Of greater importance than the number of advances and dechnes from week to week are fluctuations of the index figure. On March 1, 1919, Dun's index figure showed a decline of 6.9 per cent from the high point of October 1, 1918. During the month of March, in spite t)f the con- siderable declines in steel, there were sufficient advances in other commodities, mainly foodstuffs, to cause a slight advance in the price level. The index for April 1 shows the price level onl}^ 5.7 per cent below the high point of October 1. The index for Maj^ 1 shows the price level 4.7 per cent below that of October 1, the continued rise being due mainly to further advances in foodstuffs. By July 1 the general level of prices had passed by a slight margin the previous maximum level of October 1, 1918. The index figures of the Bureau of Labor Statistics, computed ])y a different method from those of Dun's, indicate the same general trend of prices, although the percentages of reductions are not in exact agreement v/ith those indicated by Dun's. The Bureau of Labor Statistics indices (base, average for the year 1913, 100) are as follows: September, 1918 (maximum), 207; January, 1919, 203; February, 1919, 197; March, 1919, 201; April, 1919, 203; May, 1919, 207; June, 1919, 207. Figures for the numbers of commodities declining and advancing from week to week are shown in Table 17, and are also indicated graphically on Chart X. In figure 1 of the chart the abscissae of the single-line curve represent the numbers of advancing prices noted from week to week, while the abscissae of the triple-line curve repre- sent the numbers of declining prices from v/eek to week. Figure 2 indicates the change in Dun's index number for all commodities from month to month. The small arrow half-way up on figure 2 indicates the average index for the year 1913. Decline of the price level in England. Table 16 shows the London Economist index figures from Sep- tember 1, 1918, to March 1, 1919. The September 1 figure was the highest price level recorded in England. The reduction in the price level during the period September 1, 1918, to March 1, 1919, was 7.5 per cent. This figure is remarkably close to the percentage of reduction in the L^nited States, although the general advance in England over prewar prices has been somewhat higher than in this country. 121297°— 19 6 82 ECONOMffiS OF THK CONSTRUCTION INDUSTRY. THE FALL OF THE PRICE LEVEL DURING THE PERIOD OF READJUSTMENT Fl G. 1 - Number of Declines and Advances in Weekly Quofafions FIG. 2 "Dun's Index Number for 313 Commodities U.S. DEPARTMENT OF LABOR INFORMATION ANO EDUCATION SERVICE DIVISION OF PUBLIC WORKS ANO CONSTRUCTION DEVELOPMENT CHART X ECONOMICS OF THE CONSTEUGTIOX IXDUSTKY, 83 Comparison of March, 1919, prices with March, 1918, prices. Of 313 commodities quoted iii Duq's Review of March 8, 1919, 140 were quoted at prices lower than they were a year previous, and 126 were quoted liigher than they were the year previous. The index figures indicate a reduction in the price level from March 1 , 1918, to March 1, 1019, of 4.8 per cent. The commodities which were quoted at prices lower than the prices of the previous year consisted of certain foodstuffs, drugs and chemicals, wool, woolen and cotton textiles, metals, and oils. With the exception of steel products, no building materials were quoted at prices lower than in March, 1918. Of the commodities wliich were higher in price than they were at the same time in 1918, the principal ones were certain foodstuffs, lumber aad other building materials, drugs and chemicals, hides, naval stores, oils, paints, and tobacco. According to the figures of the London Economist the British price level was only 0.5 per cent lower on March 1, 1919, than on March 1, 1918. Exceptional commodities. An examination of the price records of the Bureau of Labor Statistics shows only two commodities, in the hst of nearly 300, that were lower in price in 1918 than they were in 1913. These two com- modities are onions and coffee (Rio No. 7). Both of these commodi- ties increased in prices after the armistice and have been quoted about 50 per cent above the prewar price. Of the commodities that have been included in the study of the price level, the most marked declines since the armistice occurred in the case of lake copper and pig lead. In November, copper was 69 per cent above the prewar price. After that time, it dropped practically to the prewar level. Pig lead in November was 79 per cent above the prewar price, and on April 12 it was only 11 per cent above it. The exceptional behavior of these prices is to be explained by exceptional circumstances. The average production of coj^per in the United States in the years 1912 to 1916 was 1,722,000,000 pounds; the average consumption was 932,000,000 pounds; the remainder of the product being exported to foreign countries. The 1918 production of copper in the United States was 2,450,000,000 pounds. The cessation of the war left the copper interests in a serious situation. Figures of the United States Bureau of Mines indicate that on January 1, 1919, stocks of copper in this country in excess of normal aggregated some 600,000,000 pounds. Li spite of price reductions, little export demand dovelop<^d during the first half of 1919, nor was there any considerable domestic demand. The drastic reductions did not sthniUate business, and it has been stated that the low prices quoted were under the cost of pro- 84 E(;ONOMICS OF THE CONSTRUCTION INDUSTRY. <] action. One feature of the- copper situation is the fact that copper can bo used over again more readily than any other metal, and conse- (puuitl}^ copper already worked into war materials can be used again. This is not true to any considcrabhi extent in the case of iron and steel; hence the markets have not been overstocked in this commodity to the extent that they were in the case of copper. The copper industry seems to have been more seriously disturbed during the period of readjustment than most others. The United States Government did not make an early disposition of its holdings of copper. It agreed to dispose of them through the deah^rs so that the placing of its stocks on the market would not tend to further disturb the market situation. The case of load is somewhat different from tliat of copper. This was not m such great demand during the war as the other metals, and was not controlled by the Goverrmient as the other metals were; however, at the beginning of the year, there were large stocks of pig lead on hand. At the time of the signing of the ai-mistice the Govern- ment was purchasing about 25,000 pounds monthly. This demand was eliminated from the situation Avith the cessation of war activities. The American Smelting & Refining Co, controls about half the product of this country, and it practically fixes the market prices. It would appear that this company reduced the price in order to stimulate business. It also appears that the desired result was not speedily attained, as no business developed for some time after the reductions were announced. One of the independent mining com- panies which produces about 5 per cent of the total output in this country shut down its mines early in 1919, stating that it could not afford to produce at the prices then current. It is to be noted that after that time the price of lead reacted upward. ReducticKS in steel, March 20, 1919. In Section II it was shown that the reductions in steel brought the average for finished steel products down to a figm'e 95 per cent above the prewar level. Since tliis average was obtained by a system of weighting similar to that used by the Bm'eau of Labor Statistics, it is comparable with the figures of that bureau. The bureau index nmn])er for wholesale prices of all commodities for the month of February, 1919, was 197 and for March, 1919, 200. It is thus seen that the action of the conference on steel prices had the effect of bringing these products doAvn very close to the general level of all commodities. The new price level. Examination of actual figures shows that the price level has declined only a ver}?^ fittle, and for the most part the declines have taken place in a gradual, orderly manner. In general, the course of prices since the armistice seems to bear out the theoiy that a new price level has been estabhshed. ECONOMICS OF THE COI67 231 231 " 233. 227 193 6,2:58 230. 529 191 6,210 230 230. 375 191 6,212 230 230. 146 190 6,094 22.5 220. OoO 183 5,8.51 216 217.037 179 5, 796 214 219. 973 182 5,723 211 222. 193 184 5,774 213 227,973 ISS 5,988 221 233,707 194 227. 977 1S8 5,828 1 215.5 Per cent. Per cent. 4.8 0.5 7.5 5.7 4.' a Highest figure reached. Table 17. — Number of declines and advances in tveeUij quotations during the period of readjustment. Number of advances. Numbor of declines. Numbor of advances over declines. Number of declines over advances. 191 N. Oct. 5 37 21 29 22 27 18 24 27 IS 23 16 10 11 15 16 18 14 9 15 16 16 26 22 2t 28 20 34 42 32 28' 43 33 ui 73 40 58 38 41 41 21 25 23 22 24 19 21 24 20 32 31 ;i9 31 29 32 53 55 59 45 44 46 36 42 35 26 54 29 40 29 19 26 20 25 17 2 24 31 15 19 16 Oct. 12 4 Oct. 19 6 Oct . 2 G Nov. 2 3 Nov. 9 1 Nov. 16 3 3 Nov. 23 Nov. 30 2 9 15 29 20 14 16 35 41 50 30 28 30 10 20 11 Dec. 7 Dec. 14 Dec. 21 Dee. 28 1910. Jan. 4 .Tan. 11 Jan. IS Jan. 25 Fob. 1 Feb. 8 Feb. 15 Feb. 22 Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 34 Apr. 5 5 2 3 9 17 13 33 56 38 34 7 25 22 Apr. 12 Apr. 19 A pr. 20 May 3 ... May 10 May 17 May 2) May 31 June 7 June 14 June 21 Juji-i 28 80 FXJONOMICS OF TlUi. CONSTRUCTION INDUSTKY. SECTION VI. INCREASE IN CONSTRUCTION COSTS. Introduction. Datii sufficient to estimato the average increase of constructiou costs all over the country would be an exticMH^y valuable addition to this report. In the brief time permitted for this investigation it has not been possible to secure sufficient data to be representative of ail types of construction in all parts of the country. However, jRgures have been secured for various types of buildings located in various parts of the country. Tliese figures are believed to be fairly representative of tlie present cost situation as compared with tbat of previous years. Comparative costs of typical wood-frame dwellings, 1915 and 1919. The experts of the United States Housing Corporation were asked to furnish an estimate on a tyi^ical wood-frame building. They pre- pared an estimate on a 12-room 2-family wood-frame-and-stucco house, based on material and labor costs prevailing in the neighbor- hood of New Y.ork during the first quarter of 1019. A comparative estimate of the cost of the same house in the year of 1915 was made in the office of the Division of Public Works and Construction Devel- opment. These figures show an increase of 48.4 per cent m the cost of constimction of this buildmg. i^ itemized summary of this com- parative estimate is given m Table 18. Comparative construction costs, 1911-1918, of reinforced-concrete hospital buildings. An architect m St. Paul, Minn., has furnished figures on the cost per cubic foot of a number of buildings actually constructed in dift'er- ent 3'ears. One was a hotel and the rest hospital buildings, but all were of substantially the same construction. The type of constnic- tion was reinforced concrete. All were designed by the same arcliitecfe and built by the same contractor. Tlie figures are given below: Cost of rein/ormd-concrete buildinfis in St. Paul. Mhni.. Year. Cost per cubic foot. Relative cast. VlMI. 1 Cost per Relative cubic foot. cost. l!»)l $0.21 .22 .24 .25 Per cent. 81 88 96 100 1916 1917 1918 so.rio 1 .39 .45 Per cart. 129 1012 1914 1915 VA 180 These figures show that the 1918 builduig cost 80 per cent more than the 1915 building. The 1918 building coidd probably be dupli- cated for a somewhat lower figure in Ai)ril, 1919, owing to reductions in prices of some materials and probable increased efficiency of labor. ECONOMICS OF THE COISTSTRUCTIOX INDUSTRY. a? Comparative costs of typical steel-frame office buildings, 1915 and 1919. Oil Februarj^ 20, 1919, the Engineering News-Record published fin estimate of the increase of the cost of construction of a typical steel-frame office buildhig in the city of Chicago as between Feb- ruary, 1919, and the year 1915. The comparative estimate was based on an actual building erected in 1915, the 1919 figures being estimated. Since these figures appear to be substantially, correct, the comparative estimate is given in Table 19. This estimate indicates an increase of 87 per cent on this type of building. Since these figures were published, reductions in some of the materials have taken place, and the increase over 1915 for the month of April, 1919', would probably he just a little more than 80 per cent. Other figures on construction costs. Otlier figures on increase of costs of buildings have been furnished by various New York architects and contractors. Some of these figures are based on actual building construction and some on c*»n- tractors' estimates. These figures are shown in Table 20. Average increase of cost of construction. On the basis of the figures at hand, and taking into consideration the relative importance of each type of construction represented with reference to the whole volume of building construction, indices representing average construction costs have been computed on the basis of the figures at hand. In these computations the relati^-e importance of each type of construction represented with reference to the total volume of building construction has been consideretl. Tliese figures are assumed to be only approximately e(»rreet. They are given below : Year. Tu(h'>:. Year. Index. 1911 100 100 117 1917 ... Vi'.i I'M.'t 1918 IS'* 1016 1919 a 16"' a Fir.st four month.;. Figures on the cost of road construction. Some comparative figures on costs of road construction have been obtained from the Bureau of Public Roads. The prices given under tiio caption of 1914 were obtained from annual reports of the various highway departments, and the prices under the caption (»f 1918 arc the average on the prices used in the estimates for the various Federal S8 K('ONOMTC.S OF TTFE CONSTRUCTION INDUSTRY. iiid projects submlKcd 1)\- llin rcsix'ctivc States. Tlic comparjitivo liiXuros are given below: 1014 191« Increa.sc. MASSACHrSKTTS Kxcavatlon: Karth cu. vd.. 80. 50 2.00 11.00 $0. 92 4. 50 10. (10 Ptr cent. SI Konk do.... 125 Concrete structures do.... cu. vd. . 45.5 OP.EGON. Kxcavntlon: Eart h '. 13. .50 .28 .77 1.5.00 21.42 .55 1. 50 2.5. 00 58.6 96.5 Rock do.... 9.5.0 Concrete .structures do.... : cu. vd.. do.... do.... 66.6 ■\VIPCONSIN. Kxcavation, earth Concrete si rnctiires Water-boniul macadam 10.05 .58 11.29 2.1.3 1. 15 27.05 .70 10. 00 4.20 1. .",0 68.5 20.7 42.0 97.5 Gravel surfacing do.... cu. vd.. do.... do 3.5 AI,A15AM A. Excavation, earth Sand ciay 1.-,. 45 .25 'J. 00 .30 22. 40 .35 16. 50 .50 45.0 40.0 83.4 66.6 NEW YORK. Kxcavation: Karth 9.55 .50 1.25 7.00 3. .50 17.35 .80 1..50 8. 50 5.25 81.6 60.0 Rock .... do 20.0 Concrete struct nro.s Waier-bound macadam do.... do.... 21.2 50.0 12.25 lo. C5 31.0 The average of these mereases is 57 per cent. The figures indicate a rather wide discrepancy as between the different localities. The average is given as an approximate indication of the general increase in cost of this type of construction. On April 11, 1919, the Railroad Administration announced a reduction of 10 cents per ton in the freight rates on sand, gravel, and crushed stone when consigned to States, counties, and munici- palities. The order provided for a minimum of 40 cents per net ton, except in cases where the regular commercial rates were lower than that amount, in which instance the regular rates still held. As a consequence of this reduction, the cost of public roads would be reduced somewhat from the figures given above. ECONOMICS OF THE COXSTRUCTIOX INDUSTRY, 89 Table IS. — Summary of estimate on tivclve-room. two-family house prices. Neir York market, 1915-1919. E>ca^ation Masonry Interior plaster ;^xterior plaster Kouffh carpentry . . . Finished flooring . . . Screens MJllwork (exterior) . Malhvork (interior) . Roofing Painting Plumbing Hot-air heating Electric work Finish hardware Kough hardware . . . Total Per cent oi increase 1919 over 1915. 191.5 199.23 573. 37 365. 80 284.77 1,199.50 170. 67 37.90 241.25 331.96 120. 57 138. 88 311. S4 373. 94 80.45 45. 70 42.80 4,518.C3 1919 293. 97 847.09 549. 47 458. 05 1,704.54 224. IS 48. 00 386. 08 544. 50 198. 96 243. 05 410.00 528. 00 118.00 80.00 75.00 6, 708. 89 Ratio. 1.48 1.48 1.50 1.60 1.42 1.31 1.27 1.60 1.64 1.65 1.75 1.35 1.41 1.47 1.75 1.75 1915 1919 Amount. Per cent of total. Amount. Per cent of total. 81,980.27 2, .538. 36 43 57 S2,710.68 3,998.21 41 Materials Total 4,518.63 100 6, 708. 89 IOC Table 19. — Summary of estimate on steel-frame office building .o^ (Prices: Chicago market, 1915-1919 (February ] Actual 1915 costs. Ratio. E.stimated 1919 costs. Alasonry Steel, material Steel , erection Foundations Elevators Carpentry Ornamental iron vvork Heating and ventilating Fireproofing Engines and generators Plumbing, drainage Elccirie wiring Terra cotta Various minor items, e. g., glazing, hardware, roofing, painting, light- ing, etc Architects' and engineers' fees S175,400 100.700 20,100 81,100 74,000 73,800 62,600 62,100 47,000 41,000 30,s00 29, .500 26,500 129, 200 46,200 1.52 3. 15 1.29 ' 1.54 ! 2.00 I 1.86 ' 2.20 1.92 1.70 2.00 1..54 2.00 1.70 1,50 8266,608 317,205 2.5,929 124, 894 148,000 137, 268 137, 720 119,232 79,900 82,000 47,432 59,000 45,050 193,. 800 89, 201 Total 1, 000, 000 1,873,239 a From the Engineering News Record. 90 ECONOMICS OF THK CONSTRUCTIOIT INDUSTRY. Tabli: 2'). — C'ompnrdi'iye crifitu of rnrinus I'/pefi of bvilfimf/s. [Figures I roiM various architects and contraictors.J NoXFIRKPROOF nUILniNOS. Kind of building Location. Ty-pe of construct ion. Dates of com(>ari- son. 1 Increase in cust. Store Bethleliem, Pa Lumlxir and brick Stone, brick, lumber Luml)er und plaster Stone and liunlH'r Brick and hnnfjer Stone, brick, lumber Brick and lumljer Stone, concrete, iumlwr. .. Brick, stone, lumber Lumber and plaster ..: 1900-1919 .. 1915-1919 .. 1915-1919 .. 1917-1919 ..' 1917-1919 .. 1917-1919 .., 1917-1919 .. 1918-1919 ..1 1918-1919 .. 1918-1919 Per cent. 96 Kesidences Do Baltimore Md G4 Staten Island, N. Y a Do Philadelphia Pa H Do do : 59 Do ...do 35 Do Do New York City (alterations) Monclair , N . J 39 is Do 29 Do Wilmington, Del 25 FIREPROOF BUILDINGS. Fiictories. Do Do Do Hospital OiTice building. Brooklyn, N. Y Newark, N. J , Long Island City, K. Y . New V'ork City St. I'auJ, Miim Cliicago,!!! Reinforced concrete, brick outer walls, sa^rtooth roof. do do do Reinforcetl concrete Steel frame 1915-1919 1915-1919 1918-1919 1918-1919 1915-1919 1915-1919 32 8*1 87 Vn. LUMBER. Importance of the lumber industry. The size and imj)ortciiice of the lumber industry and its relation t-o building malces the studj' of the conditions surrounding the produc- tion and marketing of this product of pi*ime importance m any survey of prices of building materials. The somewhat limited scope of the present study makes it possible to present here only a limited sMrxQj of the industry as affected by the war. Lumbering comes next to agriculture in im|)ortaiice among the basic industi'ies of the United States. It ranks third among manu- factures m the value of its products, according to the census of lOCMl, dropping behind the meat-inicking and metal industries only. It em- ploys api)roximately 10 i>er cent of all the wage earners in manu- facturing industries. The annual sales of this product aggregate one and one-half biUion dollai"s ])er year and the industry has a combined investment of approximately two and one-half bilhons. The amount of lumber entering, as raw material, into different forms of consti'uction work differs widely. In the average frame house this item forms a jiredominant ]>art, and in factor}- building or ajnirtment construction it becomes a factor in building cost, as it is used for scaffolding, forms for conci-ete work, interior tiim, special finish, wood block tlooring, and in many auxiliary ways. In spite of the great development of various forms of fireproof construction ECONOMICS OF THE CONSTRUCTIOZs' INDUSTRY, 91 within tlie past few years, lumber remains by far the most important group of building materials in the extent of its use and the value of the product. Stands of softwoods, by regions and species. For the purpose of studying the relationship between the lumber industry and building, we may consider chiefly the use of softwoods, as these comprise 00 per cent of the lumber used in coiisti-uction work. The principal soft^voods and their regional distribution hnve been estimated as follows: Table of standino tiroberA Re°:io!i. Species. Pacific Northwest . Southern States . California. Inland r.mpirn. Douglas fir Western pine . Sl>ruoe Cedar Miscellaneous. Feet in billionj. 688.47 92. IH 12.01 01. '.K) 14*. 26 ShorHeaf pine. Lon^loal pine. Cypress Hemlock Red cedar \S'!ute pine . . . Spruce Miscellaneous. Douglas fir Western pine . P.--d\vood Ileuilock Miscellaneous . 1.52. 11 160. ,52 2.3. 0.5 6.02 1.00 l.'jO 2.4^) .b2 30. 00 121.65 73. -X) .13 65. 96 Douglas fir Western pine . Miscellaneous . Lake •Statej Hemlock White }>ine . . . Spruc-e Mistellaneous. Northeastern States. Aliotiie Total stand. Wiiite pine . . . f^|)nice Ileinlo'k Noiuay pine . Miscellaneous . Douglas fir.. Hemlock nard\v(x>d . . 31.33 32. .58 11 4. .52 22.30 16.03 4.46 8.68 10. 63 1.5.64 2.ecies is as follows: Fci't in liillions. Douglas fir 762. 00 Miscellaneous wood 341. 04 Yellow pine 312. 03 Western pine 24fi. 41 Redwood 73. 90 ^edar G2. GO Hardwood 39. 15 Hemlock Spruce White Pine.. Cypress Norwav Pine Fivi! in liiHKwi.^. My 82 :v,. 11 28. 26 23.05 .50 Total stand 1,%I. 17 1)2 KCONOMICS or THE ('ONSTRUC 'TION INDUSTRY. Douglas fir is the species having the greatest stand, approximately three-quarters of a trillioji feet. This is measured according to exist- ing standards of cutting, which does not include a complete utilization of all waste products. The miscellaneous group imdoubtedly includes many species that might bo included imder the other headings; but they are located in patches so separated from any large holdings and in such small stands that no attempt could be made to show definite segregation of the various species. Southern yellow pine has a stand of somewhat over 300 billion feet. At the present rate of cutting and regrowth it is estimated that this stand will not be exhausted for 20 years to come. The gradual diminution in size of holdings, preventing large-scale oper- ations, however, causes the actual cutting to become less economi- cal. Consequently, it is extremely doubtful wliether yellow pijie can be cut for so long a time under existing conditions with a profit to the producer. At present the Southern pine industry has approximately 19,000 mills producing about 18 billion feet annually. Many of these mills are small portable mills put in by the farmers or by small operators to assist in clearing the land for agricultural purposes. The lumber product is of secondary' importance, as there is necessarily a large waste. Contrasted with this large number of mills are the nine hundred and odd mills of the Pacific Northwest, producing annually about 5 billion feet. In other words, the Pacific Northwest has one- eighteenth the number of mills of the Southern Pine region and it jiroducos one-third the amount of lumber the Southern pine region produces. It would appear, therefore, from the study of the distribution of standing timber that the coimtry must gradually turn to the North- west, just as in the past it has turned from the Northeast to the Lake States and from the Lake States to the South. As an illustration of the shifthig of the main source of lumber supply, it may be mteresting to note that in 1850 the New England States produced 54 per cent of our total supply of lumber. In 1914 they produced 9 per c«nt. In 1870 the Pacific States produced 3.1 per cent; in 1914 they produced 19.3 per cent; and to-day approximately 25 per cent. In 1860 the Southern States produced 16.5 per cent. To-day they produce 47.9 per cent. Tliis sliifting of the source of supply has involved various problems of increasing cost of transportation, utilization of cut-over lands, aridity, and waste. Annual production of lumber. The amounts of lumber cut in the United States for certain years, as computed by the Forest Service of the Ljiited States Department of Agricidtiire, are given in the following table: ECONOMICS OF THE CONSTRUCTIOX IXDUSTRY. 93 Production of lumber in the United States. Calendar year. Millions of feet. Calendar year. -^"/^"^ of 1S90 23,49-1.9 34,780.5 42,000.0 38,387.0 1915 37,011.7 1900 1916. 39 807. 2 1908 1917 3(1.000.0 1913 191S 32,400.0 1914 37, 346. a Estimated. The ma^cimum production of lumber was reached in the year 1908. The gradual increase in production up to that year had been encour- aged by the promise of fairly high profits that was held out by the prices that prevailed from 1895 to 1908. In 1908 conditions of over- production began to be apparent and competition between the West and the South for the markets of the Middle West had the effect of lov.'ering prices. Tlie consequent lessening of profits tended to decrease production. After 1908 production decreased somewhat each year, with the exception of the year 1916, when it showed a fair increase over the yeai-s immediately preceding. The slump in the years 1917 and 1918, however, was marked. The decrease after 1908 may be partially accounted for tiirough readily available timber becoming less and less accessible. It became increasingly necessary to build roads and to extend railroad facilities to bring the raw material to the miEs. The capacity production of the country has been variously esti- mated at 65 to 75 billion feet per annum. If these figures be accurate, the output has never approached the full capacity of the mills. From the production table it is seen that the timber cut in 1917 was 10 per cent less than the output of 1916, and that a further reduc- tion of 10 per cent in output was experienced in 1918. The 1918 pro- duction figure, as estimated, is 14 per cent under the average for the preceding five years. The 1918 production is seen to have been about half the total capacity of the industry. In a statement made before the Industi-ial Board of the Department of Commerce on March 22, 1918, Mr. John H. Kirby, president of the National Lumber Manufacturer' Association, stated that the war- time prices fixed by the Government on lumljer were such as to stimulate only a small proportion of the productive capacity of the industi'v. Ml. Kirby further stated that the existing capacity of the sawmills in the United States v:as, at the beginning of the war, far in excess of the quantity considered necessary for the efficient maintenance of the nation's war program; that, on accoimt of the restriction of general building activities, the normal markets and normal channels of trade of the industrv were in large measure closed to it; and that, had the 1)4 ECONOMICS OF THE CONSTRUCTION INDUSTRY. Will- long coritiiiued, the inevitable result would hh\e been general discontinuance of operations and widespread idleness of mills. Tha general leduced demand existed in spite of heavy demands for special kinds and sizes of timber for tlie Go^ernment s v.ar needs. In the < onstruction of cantonments in the South enonnous quantities of yellow ])iiic were used. There was also a great demand for sliip- ])uilding timbers. The latter demand, it has been stated, resulted iu a slight sur])lus in the production of fir. A demand for spruce was accentuated by the use of this wood in air])lane constniction. The demands were for special sizes and grades and much waste residted iu seeming the proper logs. This waste or by-product was of small utility and was left in the forests or mill yards, or sold locally, having little or no effect u])on general market conditions. The call of labor to service in the Army and to other industries undoubtedly criijpled lumber production to a very considerable extent in tliose regions where there was a great demand for the product. In the Southern pine region the labor shortage continued well into the first half of 1919. It is also likely that, influenced by the labor shortage, lowered efficiency of labor contributed to the decrease of the lumber output. Apparently there were sm-plus stocks of lumber in 1915 and 1916. These surplus stocks were largely used up in 1917 and 19 IS. Ques- tionnau-es sent to the retail trade thi'oughout the country in February, 1919, revealed the fact that stocks at that time were, for the most part, low. Most of the smaller yards of the country were fairly depleted. The stocks that were normal were those of the larger cities. Out of the 65 yiu'ds reporting from the State of Ohio, only 9 reported stocks above normal. Of 40 yards reporting from Connecticut, only 7 reported stocks above normal. Over 50 per cent in each of these States reported less than the usual supply on hand. In many other States the percentage ran about 50 per cent of normal. Prewar operating conditions. As an industry, lumbering is different from any other basic indus- tiy. The very abundance of standing timber in the hands of private owners lias been considered by some as being in itself a weakness. There are some economists who urge that the undeveloped timber- laud should be held by the Go^ ernment and the right to cut timber be sold as the needs of the country and condition of the market warrant. The amount of working ca])ital behind the timber holdings has a marked inlluence in the rai)idity with which the timber is marketed or the ])ohcy behind its retention. A good compaiison is offered in the States of Washington and Oregon. The former is a State of concentrated holdings, whereas Oregon is one of decentralized owuer- shi}>. Ill Washington the timber is being cou^ erted three times more ECOIS^OMICS OF THE CONSTKUCTIOX INDUSTRY. 9§ rapidh' tlian iu Oregon. There are many reasons fur tlus; among tliem, accessibility of shijipiug facilities, lack of capital on the part of small owners to exploit their holdings, and laws that prevent the pooUug of interests for the p^lrpose of exploitation. Assistant Forester WiUiam B. Greeley- has pointed out in his report on "Economic aspects of the lumber industr}" that competition in tliis industry is of two kinds — (1) within the producing region, and (2) between different regions in seUing their product in markets within common reach. In recent years there has also developed con- siderable competition with various substitute materials. The problem of transportation has been a diihcidt matter in the lumber industry;, because of the constant recession of som-ces of supply from the manufacturing centers and the ultimate consumer. In the earh^ da\'s of the industry the mills were built at the sources of supply and along the waterways, such as the Penobscot, the Hudson, and the Delaware Ri\ers. The Great Lakes were utilized in the development of the North Central regions, and the waterways of the South, and the Gulf ports have been of great service in the de^ elop- ment of that region. Graduall}^ the sujjply receded fui-ther from the waterways, making the construction of roads and raih'oads necessaiy. This added to the cost of production. The development of rail facilities led to the concentration of m.anufacturing and increase in the size of the mills. Freight rates increased and gi-aduaUy came to absorb one-fifth to one-fourth the retail price. This condition played a large part in the development of competitive markets. The Middle West became a hot-bed of competition for northern, southern, and western woods, while the markets of the east coast suffered from actual shortages at times, and rates higher than the average. The opening of the Panama Canal has served to equalize this condition and give the western woods a chance to enter into the eastern markets. The practice of shipping 'transit' cars to central markets in advance of any purchivse has tended somewhat to demorahze the markets. This condition has been in evidence since 190S. Close economy and exact business methods were unkno^\'n iu the earlier days of the industry, when liberal profits could be coimted upon to make up the deficiencies caused by ineflicient methods. In many cases increases in stumpage costs were capitalized; wliereas, iu accordance with safe accounting methods, the carrying exj)euses should have been provided for by charges against piofiu^. The profits, however, were meager in many cases, and the tendency was to capitalize this burden in the ho]>e of meeting the increased cost of stumi)age in more favoral>le years. The memory of large profits made in the earlier days of the iu(histry brought about an undesirable speculation in stumpage, particularly 96 ECONOMICS OF THE CONSTRUCTION INDUSTRY. in t'iio Nortliwost. This loci to overcapitalization and the consc(|ucnt burden of high interest charges and high taxes. In the West, par- ticularly, large amounts have been borrowed on the timber, adding further interest charges, wliich can never be realized imless the prioo of the manufactured product continues to increase. Although there has been great improvement in accounting methods, in many cases those of to-day are not altogether scientific. Much improvement, however, has been made in this respect within the past few years, due to the progressive spirit of the leaders of the industry, the careful study of its problems by trained economists, and the efforts of the various associations of manufacturers and dealers. These associations have not only studied accounting problems and standardized methods, but they have also given considerable study to the labor problem. The lumber producers on the west coast seem to have established a commendable cooperation between the mill ov/ner and the laborer. Sharp competition v/itlim the producing areas in the past led to overcapitalization and the necessity for cutting timber wastefully in order to pay interest, taxes, and other fixed charges. The history during the past decade has been one of small margins and close selling — so close, in fact, that in many cases, m hearings before such tribunals as the Federal Trade Commission and the Interstate Commerce Commission, it has been actually shown that operations were being conducted at a loss to many operators. Prior to the war the Forest Service had made a close analysis of representative operations from 1909'to 1914. Each year dm*uig that period shows a decrease m return on the operating investment, the decreases ranging from 3.3 per cent to 13.5 per cent. Dm-mg the latter part of the year 1915 the average cost per thousand feet was greater than the average realization. Before the panic year of 1907 there had been a general advance in the price of lumber and there was a general belief that prices were unduly high. Investigation shows that the rises in prices of lumber on the average, however, were only slightly in advance of the general rise in the price level of all comimodities. After 1907 lumber fell behind the general advance of other commocUties and continued to advance less rapidly than other commodities tlirough the war period. The price record, 1913-1919. Fom' tables of prices on lumber for the years 1913 to 1918 and for the first quarter of 1919 are presented herewith (Tables 21 to 24). Tables 21 and 22 give quotations of actual prices on particular grades and sizes of representative species of lumber. Tables 23 and 24 give average prices for various species, together with relative prices, referred to the year preceding Jul}*, 1914, as base. The composite indices in the ECONOMICS OF THE CONSTRUCTION INDUSTRY. 9? last column of Table 24 are those computed by the price section of the War Industries Board. The c[uotations used in these tables wore furnished by the price section of the War Industries Board. That organization made an extended study of the lumber prices through the war period, a study made by experts in the various phases of the lumber industry. The extensions of the War Industries Board's figures into the j-ear 1919 were made from figures obtained from various trade journals. The number of grades and sizes usually quoted in the trade journals and also in the report of the War Industries Board on lumber prices is so large that it has been considered advisable to reduce it in this presentation to an exhibit of representative grades and species. More extensive tables can be found in the two reports of the price section of the War Industries Board, one on lumber prices and the other on price fixing by Government agencies. The composite indices cover averages for species comprising over four-fifths of the total production of lumber. The figure for the lact quarter of 1918 indicates a general advance of 73 per cent over the prewar figure. This is rather less than the advances in most other building materials and in most of the other groups of basic commodities. The curve of the composite price index would follow the general tendency of the curve of the general price level througli the six-year period. (See Chart XI, following this section.) The real rise came with the second quarter of 1917, when the United States entered the war. The peak of the curve occurs in the third quarter of 1918, just as does the maximum of all other prices, but the distinguishing feature has been the fact that the lumber curve has lagged behind the other curves and that the decline from September, 1918, was very slight. Lumber prices reacted upward in the spring of 1919. An April index would be approximately 175. Southern yeUow pine and Douglas fir, for which species there was gTeater demand than for the others, show somewhat greater advances. The figures for the last quarter of 1918 show a rise of 85 per cent on southern yellow pine and a rise of 91 per cent on Douglas fir. Both species advanced somewhat during the first quarter of 1919. There wa.s a decline in production after the year 1908. At that time the conditions, as pointed out in the paragraph on production, were widely different from 1918 conditions. In 1908, in spite of the curtailment of output, prices of yellow pine declined on the average 45 per cent and those of Douglas fir declined 30 per cent. As the price tables show, decreased production of 1918 was at the same time accompanied by a general increase in prices of nearly 12 per cent over those prevailing during the previous year. Although the price of lumber began to show signs of increase early in 1916, the increase was to be expected as a result of increased war 121297°— 19 7 98 Eco"sro?*iF(S of the (;onstru<'TKin industry. domands and tlio jjjouoral li-o of prirc^^ of otb^T ha<^ir commodities. Ill 1917 the liimbor coinmittt'C' of tlio Council of National Dcf <*ii.s<' . in agreement with the Southern Pine Association, iind with the ai)i)roval of the wSecretary of War, fixed the first pric^ of al>out S24.85 for th« purchase of yellow-pino lumber for cantonment constnictiou. This price was approximately 60 per cent higher tiian thot <>f tli<' prewar period . This price was reduced 75 eents per tliousand feet on 3epleml>er 11, 1917; 50 cents per thousand feet on October 11, 1917: and 40 cents per thousand feet on November 11, 1917; making hi all a reduction of $1.65 per tliousand. Early in 1918 tlie commercial price aase price fixed ia June, 1918; whereas a% erage producing costs increased more than $3 per thousand feet during that period. (4) That in the South Atlantic States and North Carolina pine region average costs, as of the first part of the year 1919, were in substantial excess of the prices receiA'ed ikt thousand feet. Estimates have been prepared on the distribution of the average retail price as between tlie manufacturer, the wholesale dealer, tha railroads, and the retail dealer in tlie Middle Western market before the war and in 1919. These figures are presented in the following table: Distribution of average retail prim — Middle Western markets. [Comparit^on of prewar and 1919 prices.] Prewar. 1919 Per cont of in- crease. Amount. P«ro«nt of total. Amount. Per f ent '\ of total. «15.20 .99 6.15 6.77 52.2 S.4 21.2 23. 2 S28. 88 1.53 7.25 10.31 60.2 3.2 15.1 21.5 90. « 51.5 n.s Retailer 52.2 29. 11 100. 47.97 100.0 04.7 Prewar figures taken from OAerage.s compiled on operations of yards in 11 Middle Western States by Forest Servioe, 1912-1915. Report No. 114. Average freight rate to Central distributing points from Bogalusa, La. The foregoing table shows an increase in the cost of manufacturhig of 90 per cent over the pre%var cost. It should be noted that this is only on a comparatively small <'lass of operations in a few markets, and that, the average index of wholesale prices for the country at large is not so high. However, this series of operations shows a retail in- crease of only 64.7 per cent. Of the elements that combine to make up this cost, the cost of manufacturing is by far the greatest. In its relationship to the total price it has increased from 52.2 to 60.2 per cent. In this same relation the proportions accruing to the whole- salei', to the retailer, and to the railroad show an actual decrease. The relative importance of tiie factors that enter into manufac- turing costs has been estimated })y the West Coast Lumbermen's Association for prodncpfs in its territory as follov.'s: Per cent. Labor - -55 Materials and suppUes 1^ Repairs, depreciation, and general expenses 22 Stumpage, at $3.18 l-"' Total KK) 100 ECONOMICS or Till': CONSTRUCTION INDUSTRY. Tlio operations for the last lialf of 1918, according to figures pub- lished m annual reports of the West Coast Lumbermen's Association show a loss on 56 operations of $1 .93 per thousand feet, or 8.5 per cent. This includes cost of logging, manufacturing, and mercliandising. Machinery and supplies of all kinds, such as belting, tools, etc., probably advanced more, on the average, during the war period than did the average price of lumber. However, the largest element in manufacturing cost being the labor cost, tliat item is probably argely responsible for the increase in cost of production of lumber. Increase in labor cost, 1913-1919. Labor costs in the lumber industry, as in all others, liave mounted gradually, in sj^mpatliy \vith the rise in costs of food, clothing, and other necessities. While increases in wages were necessary on account of the rise in the cost of living, labor costs in the lumber industr}'^, according to statements made by representative producers, were also increased by the decrease in the efficiency of labor, due to competition for labor on account of the war-time shortage and the How of labor into more profitable channels. The following is a schedule of actual wages per day since 1913, furnished by one of the associations on the West Coast: 1913 $2.93 1914 2.75 1915 2.50 1916. 1917. 1918. $2. 92 3.64 5.53 This shows an increase of 88 per cent. When it is recalled that the item of labor comprises about 55 per cent of the total cost of manufacture, it seems probable that the marked increases in prices that have taken place have not netted excessive profits (o the producers. ■ Another interesting comparison is afforded from the southern pine country. A comparison furnished by one of the Delta Mills shows tiie follovrins increases in labor costs: Year. Cost per M. Wases in c-euts per hour. Hours pex Mfeet. 1913.. $5. 4308 4.5817 4. 2.579 4. 595ii 5. o2lS C. 7773 11.4791 22.46 21. S7 19. 04 20.38 23.76 29.20 37.81 24.18 1914 20.95 1915 21.68 191(1 22.55 1917.. . . 23.24 1918 23.21 February, 1919 30.36 The increase shown liere amounts in actual cost per thousand feet to 1 11 per cent ; whereas the actual rate per hour shows an increase of only 68.7 per cent. The increased number of hours required to pro- duce a thousand feet is 6.2, a rechiction in efficiency of 25 per cent. Chirt furnishiHl through courtesy of I CHAR' 121297°— 19. (To f;w<' pago 110.) 3TEELE.AR5 UANUAlTi;!915"CURReNT MONTUiaO ,9,r 1 ,9,. r 1 n i 5 ns ^ 19,5 ,9,4 i ,9,5 1 ,9,» ■,f -' J ' S J S i ! i S 4 ! i i / 1 \ J r" l 60 .. / ; \ ^ / I't's i i S ■ ! 1 s "i"i"i" "l"i"i i ! is ,91. ] ,L ECONOMICS OF THE ('OXSTRTTCTION INDUSTRY. 101 Most of the southern lumbermen claim a reductioji in ofluicnov of 50 to 60 per cent. With cotton selling at a price far in advance of that of former times, and the price of other farm products greatly increased, a great drain has been made upon the sawmill workers of the South in favor of the cotton plantation and the farm. The shipyards called their quota of workers from the Western timber belt. The draft of men for the Army and the epidemics of the 1918 season also contributed to scarcity of labor and the decline in its efRciency in the forests and in the sawmills. Tlie statement has been made that before the war men might be secured in the logging camps for S55 to $65 per month, whereas to-day they ask $150 to $160. The wages for men engaged in the lumber industry have followed the increase in the scale. of wages for relatively unskilled labor in all forms of industry. The wage scale can scarcely be reduced by any radical method in any quick or effective way. The problem for the future seems to resolve itself again into one of increased production and improve- ment of method. New machinery, new forms of organization, and scientific study by the associations of lumbermen may determine upon economies. The development of economic methods of timber renewal and reserve ownership may help to release the holdere of a great deal of the burden of nonproductive stumpage. Progi-essive lum])er manufacturers rely upon economies of this sort rather than upon attempts at reducing the wage scale for the profitable operation of their business in the future. Increase in transportation costs, 1914-1919. The table of freight rates (Table 25) shows increases from 1914 to 1919 on rates between certain markets and producing centers. As the points chosen are rather widely separated, the exhibit may be considered as a fairly representative one. If the average increase of 17.7 per cent on these lumber rates be fairly representative of the general increase in lumber rates, then this commodity came off rather better than most others in tlie general advance in rates. Perhaps tliis is one of the reasons why the prices of lumber on the average have risen somewhat less than the prices of most other building materials. The shorter hauls along tlie Atlantic coast seem to have had greater increases than the long hauls from the West, thus indicating a tendency to make the eastern markets somewhat more accessible to western producers than was formerly the case. The table given under the paragraph above, on increases of pro- duction costs, 1913-1919, shows that in the ultimate cost to the consumer freight has decreased from 21 per cent of the total to 15 1(12 ECOK"OMT<;S OF TIIK COXSTRUCTION ITTDrSTRY. pel- cent of ihe toliil. Frei^hl is to-da}' less a fsK-tor tfjan it was five years ago. These lads all seem to indicate evidence of dis- liru't, compel i (ion between markets, between roads, and between water and rail trans])orta(ion. It does not seem proba}>le that there can be any downward revision of the scale of rates under 1919 con- ditions of markets or rail costs, as the increases in rail rates have not kept pace in recent ,years with the increases in general costs. Future price tendencies. After the signing of the armistice on November 11. 1918, lum}>er prices showed for four montlis a tendency to adhere closeh' to the scliedule prevailing in November. In some markets the grades in more common use actually increased in price. The index for the month of April, J 91 9, is 175, which is two points above the figure for the preceding six months. So long as the general level of prices remains high, luml^er, which has advanced less than most other commodities, could scarcely be expected to decline in price. Factors tliat should either tend to maintain lumber prices at the general level of the first half of 1919, or cause them to increase, are the development of the domestic demand, which lay dormant for several years, and tlie possibilities of foreign demand for necessary works of I'econstruction in Europe. The conmiittee ou material cost mvestigation of the Illinois State Legislature, iu its report published May 6, 1919. discussed the various factors affecting lumber prices, such as wages, freight rates, com])arisons with prices of other commodities, the diminishing supply of timber, and the prospective increases in demand both in the Iiiited States and abroad, and stated as a conclusion that both stumpage values and kimber prices would go up rather than down iu the future. There are factors whicii should serve as brakes on coutmued increases m lumber prices. .Agencies are continually at work developmg more economic methods of transporting and manu- facturing lumber and its ]>roducts. New inventions and la1)or- saving devices are replacing more expensive forms of labor. Oomimct organizations are being effected \\hich prevent much of the waste in merchandising and iu distribution. There has been no cessation of the fierce c()m})etitiou between timber-producing areas, between the large distributors, and between small retail yards doing business withhi the same areas. Competition is keener than ever between lumber and materials offered as substitutes for wood ui various types of building construction. ECONOMICS OF THE COXSTRFGTIOjST USTDUSTRY. 103 Prospects for export trade m lumber. It hns been stated that our exports of lumber in tlic })ast have amounted to from 7 to 10 per cent of the total domestic production. There appear to be reasonable ex])ectatious of greatly increased demands for American lumber in European markets as the European countries develop their programs for reconstruction. In the years preceding the war, the world's lumber ]>roductioii was distributed approximately as follows: Per cent. Per cent. Paissia 33 United States 17 Austria 1 '^ Sweden 12 Canada 11 Finland 19 Russia has been practically put out of business as a ])roducer through its political uj^heaval. Austria's production, for some years following the ending of the war, will be seriously curtailed. Both have heretofore sup])iied large quantities of lumber to westeru Europe. Mr. Roger E. Simmons, one of the trade commissioners sent to Europe by the Bureau of Foreign and Domestic Commerce to invasti- gate the lumber markets, returned to this country early in 1919. He stated that early in 1919 there was not a sawmill running m Russia, except m the Archangel district, where the allies were in control, and that all the other mills were dismantled. He further stated that if the revolution should end at once, Russia would be unable to export any new lumber l^efore 1923. Exports of lumber in normal years before the war were as follows: M feet. M feet. Paissia 4, 6.50, 000 United States and Canada 3, 000. 000 Norway and Sweden 2. 575. 000 Austria 2. 202, 00© The total exports of all countries amounted approximately to 15 billion feet. Mr. Simmons has estimated that Russia's T)ro])ortion of exports of lumber for the years 1919-1923 should amount to seven billion feet per year, this figure being based on the percentage furnished by Russia to other countries before the war. Mr. Simmons considered Russia's probable actual supply to the rest of Euro])e for that period as negligible. England's housing shortage has ]>een variously estimated at from 300,000 to 500.000 houses; France's needs have been estimated at 578,000 houses. These figures give an indication of the demand for lumber tliat may be expected, a large part of wliich may be drawn, from the United States and Canada. The United States before the war imported some luml)er, al)out 4 l)er cent of the domestic production on the average. The greater part of this came from Canada. England will probably use all of 104 ECONOMICS OF THE CONSTRUCTION INDUSTRY, Canada's available suq)lus f(»r the next few years, Finland can probably make up part of Russia's deficiency. American lumber interests, already organized under the ])rovisions of the Webb law for foreign trade, will probably be called upon to furnish a great deal of lumber to Europe for the next five years. According to Mr. Simmons's statement, lumber was quoted at Archangel in January, 1919, at more than double the prices quoted in this country for the same grades and sizes, and in Sweden at slightly less than double American prices. The matter of favorable ocean freight rates will have considerable weight in determining the amount of American competition in European markets. All the facts behig considered, the expectation of lumber manu- facturers for a considerable foreign demand seems justified. The effect of such demand would be advances hi prices. If the demand develops to large proportions its effect would probably be greater than that of such otJier factors that might tend to cause declines. Tabi E 21 . — Tables of overages of crtual prices on particular grades and sizes. Species . Market. Grat'e an'l size. 1913. 1914. 1915. 1916. 1917. i91S. QuiUtcrly averages for 1917: First quarter Seconil (juarter Third quaitcr. Southern pellow pine. Alabama, -Vrkansas, Louisiana, Texas, Mississippi. Finish B and better 6 inches and wider. $23. 0312 23. 2227 22. 0-i22 24.6016 33.6094 37. !>906 27. 46S8 34. 3438 36. 3125 Fourth quarter 36. 312.5 Quarterly averages for 1918: i First quarter 37. 2500 Second quarter 38. 2500 Third quarter | 38.0625 l^ourth quartei- ; 38. 0000 Quarterly averages for 1919: First quarter 37. 9500 Common boards l-s2s 1 by 10 inches. Common boards No. 2 s2s 1 by 8 inches. Dimen- sion No. 1-slslE 2by8- 16. $16. 7604 15. 2656 15. 4363 IS. 043S 25. 7969 29. S125 20.12.50 26.2.500 as. S125 28.0000 29. 3125 31.3125 29.0000 29.0250 30. 1250 S12. 7354 11. 21SS 11.8.519 14.6172 21.4766 26. 3438 16. 46SS 23. 3125 22. 4375 23.6875 25. 5000 28. 4375 25. 6250 25. 8125 26.8750 S12. 4.537 11. 20S3 12. 3792 14. 9931 19. 9792 22.6000 16. .3.333 21.9722 20. son 20. 7oi.iO 21.4722 2J. 6(567 22.7500 22. 5556 25. 6250 Timbers slslE 6by 8- 16. S14.4643 12. S750 12. 9070 15. 7679 21.7500 25.5179 17.4286 22. 1429 23. 8929 23.5357 25.1429 25.9286 25. 4286 25. 5714 25. 6250 Douglas fir. F. 0. b. Washington mills. Common boards No. 1-sls 1 bv 10- 20. S9.20S3 7.9167 7. S7.50 10. 3750 15. S750 18. 2500 11.83.33 16.0000 18. .")0(X) 17. 1667 18-5000 18.5000 19.5000 16.5000 O19.5000 N0.2C and better drop siding Ibv 6- 15. 817.3333 14.2917 14. 2917 18.5833 23. 9167 28.0000 19.6607 2:5.6667 26.0000 26.3333 27.0000 27.0000 31.0000 27.0000 30.0000 a Dimension, S 1 S 1 E, 2 by 4 substituted. A>)ove fitnires from War Industries Board tables except 1918-1919 computed from published iu " Lumber" by Journal of Commerce Co. market quotation ECOXOMICS OF THE COXSTRTJCTIOX IXDUSTKY. 105 Tablf, 22. — Tables of averajes of actual prices on particular grades arid sizes. Species - Market. Grade and size. 1913 $31. 3519 1914 28. 4722 1915 27. 1972 1916 29. 2572 1917 34. 0264 1918 39. 5653 Quarterly averages for 191 First quarter Second quarter Tiurd cjuarter Fourth quarter I 35. 6111 Quarterly averages for 1918: First quarter Second quarter Thii-d quarter Fourth quarter Quarterly averages for 1919: First quarter Oak. Spruce. West Virginia, Tennes- see, Ken- tucky, Arkansas. Boston. No. 1 common jjlain white, 4/4. 30. 8889 3;^. 7222 35. 8833 37. 7611 40. 1667 39.9444 40. 3889 40.0000 Covering boards, 5inohes and up. S22. 9904 21.4832 19. 6202 21.2075 29. 0245 37.9519 24. 14.58 29. 3846 30. 5769 31.6154 33. 4615 3S. 4615 39. 9231 39. %15 39. 0000 Random, 2 by 10. Hemlock. Eastern white pine. Michigan and "Wisconsin. Common boards, SIS, 1 by 8-16. No. 1 fencing, 1 bv 6. ?24. 7933 23. 9a?8 23. 7115 27. 2500 35. 5480 44. 6538 33. 3077 35. 1154 34. 3750 39. 4792 41.6154 46.0000 4.5.5000 45.5000 S20.4445 18. 8333 IS. 1667 21.4792 27. 64-58 31. 1042 23.8333 2S. 7500 29. 1667 28. 83.33 29. 1667 30. 0000 32. 7500 32. 5000 4.5. .5000 : 33.5000 S19. 8056 18. 1458 17. 2500 20. 4792 26. 4583 30.1250 23. 1667 27.7500 27.4167 27.5000 27. 8333 29. 1667 32. 0000 31.5000 Minnesota and Wisconsin. No. 2 boards, 1 by 8-12. S23..T00O 22. 89.58 2:3. 4167 26. 0833 34. 0S33 40.3333 29. 3333 34. 0000 30. 3333 36. 6667 38.6667 40. 6667 41.0000 41.0000 32.0000 I I 41.0000 Dimen- sion, No. 1-SlSlE, 2 by 4-16. 520.5833 20.5000 17.9583 20. 7083 27. 1667 30.7083 22.8333 27.5000 29. 1667 29.1667 30. 1667 30. 6667 31.0000 31.0000 > 33.2500 1 Minneapolis market. Table 23. — Comparison of averages of actual prices and relative prices on most important species of lumber. Southern yellow Eastern white Hemlock. pine. pme. Average realiza- tion. Relative prices. Average realiza- tion. Relative prices. Average realiza- tion. Relative prices. Average realiza- tion. Relative prices. Base... SI 5. 2930 100 SI 1.. 5-11 7 100 $:51. 6328 100 $19. 0:395 100 1913 16.P576 14. a-lSi 14.6^12 17.4340 24. 46SS 2S. 1449 19. 4221 25. 5-383 26. 3a39 26. 4.568 27. 8332 29. 6730 28. 1391 28. 2920 29. 2000 105 13.1,575 114 96 96 125 177 205 138 177 200 192 203 203 222 191 214 31.9491 31.316-1 30. 3674 32.5817 42. 7042 51.2451 36.3777 42. 7042 45. 2349 45. 8675 48. 7145 51.5614 52. 8267 52. 1941 48. 3333 101 99 96 103 135 162 115 135 143 145 154 163 167 165 1.52 19. 9914 18. 2779 17. 5163 20. 75.30 26. 6553 30. 2728 23.0377 27. 7976 27.9SS0 27. 7976 27. 9880 29. 7016 31.6055 31.6055 32.8750 105 1914 95 11.0790 96 11.0790 114 14.4271 160 20.4288 186 23. 6604 96 1915 92 1916 109 1917 140 1918 1.59 Quarterly averages for 1917: First quarter 127 167 172 173 182 194 184 185 190 15.9275 20. 4288 23. 0834 22.1600 23.4296 23.4296 25. 6225 22. 0446 24. 7500 121 Second quarter Third quarter Fourth quarter Quarterly averages for 1918: First quarter 146 147 146 147 Second quarter Third quarter Fourth quarter Quarterly averages for 1919: First quarter 156 166 166 172 Note. — Southern yellow pine, average of prices on 5 grades and sizes. Douglas fir, average of prices on No. 1 common 1 by 8 and No. 2 and l)otter, drop siding. Eastern white pine, average of prices on 8 grades and sizes. Hemlock, average of prices on 4 grades and sizes. Base, in all cases: Average of prices for year July 1, 1913, to June 30, 1914. 106 E('oxo:\TTc?; of Tin: coxsTitrfTiox ixnusxr.Y, Taiu.k 21. — Coinparison of averages a/ orl ual prires and relalii p prices on mostimpuriit! species of hnnher. Species . ^priiei'. Cypress. < 'o<{ar sliingtes. AveraKC realiza- tion. Ba.sc % 1 . 2i • $41.8616 102 97 94 lOtj 140 177 125 139 142 l.w 161 180 184 184 178 42.7399 41.1203 40. 5857 42. 8933 49.30a3 61.0920 45.3974 46. 8726 52. 9769 53.8923 60.428.5 63.4200 (') f) 64.5000 Rela- tive prices. A verapc realiza- tion. $27.8000 102 98 97 103 118 146 108 112 126 129 144 151 f) ") l.>4 28.6340 26. UOO 25.0200 26.9660 31.4140 37.5300 28.3560 31. 1360 32. S040 33.3600 35.8620 38.fJ860 38.0860 38. :>(i40 37.;;750 Rila- livi- !)rices 100 103 95 90 97 113 13" 102 112 118 120 129 137 137 138 134 Average ! Rela- realizu- j ti\e tion. I prices $1.79.58 100 1.96ti7 1.7125 1.6642 i.rnw 2. 8175 2.7942 2.3900 3.0967 3.003-3 2.7800 2.8367 2. M07 2.S667 2. 4767 2.6500 1U9 95 93 106 157 1'6 133 172 167 154 158 167 160 138 148 I Com- posite iii'li' < . lOi 96 94 HH 14« 172 122' l.-WI VA Iwi ITd 17* 173 173 'No quotations obtainaljle. TCoTE. —Spruce, average of prices on 11 grades and sizes. Cypress, average of prices on 6 grad«*s and .sizi-. Oak, average of prices on 4 grades and sizes. Red cedar sliingles, average of orices on clear, raadoii;, 16-inch. ■' Base, in all cases: Average of pric-es for year, July 1, 1913, to June .".0, 1914. Table 25. — Comparison of freight rates on hnnher from producing minis to cerUers reg., to Kan.sas Citv, Mo Coeur d'Alene, Idaho, (o Kansks City, Mo. Wau.sau, Wis., to Kansiis (liy, Mo. ". Average increase .23 1 .30 32 II ..50 ..5-5 10 .47 1 ..52 10 -i ■■22 i .27 22 8 l.S 5 Bogalu.sa, La., to Minneapolis Portland, Oreg., to Minneapolis. . Wausau, Wis., to Mliuieapolis Coeur d'.Vlcne, Idaho, to Minneapolis. AA-erage increase ■■■) .38 1 18 S . ;" . .-.rt : 11 t : 1 1>! 25 a .42 .^7-: 11.^ Bogalusa, La., to Xew York Wausau, Wisconsin, to N'ew ^'ork. Norfolk, Va.. to New York Willianisport, Pa., to New York... Average Increase Bo,alusa, La , to St. Louis Wausau, Wis., to St. Louis Portland, Ore., to St. Louis Coeur d'Alene, Idaho, to St. Louis. Average increase Norfolk, Va., to Boston Willianisport, Pa., to Bostou. Average increase Norfolk, \'a., to Philadelphia Willianisport, Pa., to Philade X \erage increase lelphia. General averaso iuereus 360 340 320 EC0X0:^ITC3 OT THE CGXSTPvTCTIO^T I^DT'STTir. ■piTIIIU III Mf— I—— ■WW— in lOT LEGEND WHEAT — ^ Soiji'ce: Don's Rev.ew-fJa S Red) 5TEEL "■■ LUMBER gJC'LY 13! 7 A ' t a ! « 5 : * • MAYI9I7.^. 4. Rive s. 5. 6-inch cast- irca pipe. Com- Period. Price per c%vt. Rela- tive price. Price per cw-t. Rela- tive price. Price per cwt. Rela- tive price. Price per cwt. Rela- tive price. Price per short ton. Rela- tive price. posite index figure JrJvl, 1913, to June 30, 1914 1913 SI. 2675 1.50 1.15 1.30 2.73 .3.67 2.99 2.97 2.80 2.80 2.80 2.45 2.45 100 119 91 103 201 2S0 236 234 221 221 221 193 193 SI. 26 1. .38 1. 15 1.31 2.48 3.49 2.89 2.87 2.70 2.70 2.70 2.35 2.35 100 110 91 104 197 277 229 227 214 214 214 1.S7 187 -81. .5975 1.70 1..56 1.66 2. 53 3. .56 3.50 3.50 3.50 3.50 3.50 3.25 3.25 100 107 98 104 159 2:^3 219 219 219 219 219 203 203 SI. 7433 1.99 1.55 1.62 3.08 4. S4 4. .12 4.40 4.40 4.40 4.20 4.20 3 70 ICO 114 89 93 211 278 260 252 252 252 2^1 2^1 212 $22. 2258 23.37 20.90 22. 94 31.62 55. 31 00.65 67.70 66.10 62.70 62. 70 62.70 57. 70 100 105 94 103 142 249 273 304 296 282 282 282 259 100 112 92 102 185 268 242 245 237 235 233 210 208 1914 1915 1916 1917. 1918 Last quarter, 1918. . January, 1919 February, 1919 ..... March 11, 1919 March 25, 1919 April, 1919 1. Stnictiual steel: Market, Pittsburgh: source, the Iron Ago. 2. Steel bars: Market, Pittsburgh: source, W. I. B. Bulletin No. Sand tlie Iron A}:e. 3. Wire nails: Market, Pittsburgh; source, tlie Iron Age. 4. Rivets: ^Market, Pittsburgli; source^ W. I. B. Bulletin No. 5 and the Iron Age. 5. 6-inch cast-iion pipe: Market. New York; source, the Iron Age. Base: In all cases base equals average of prices from July 1, 1913, to June 30, 1914. Table 27. — Frevjht rates on pig iron. [Per ton in carload lots.] From— To— Increase. Mahoning and Shenango Val- ley. Buflalo, N. Y. Virginia himaces. . Birmingham, Ala. Average. Cleveland, Ohio. Newark, N. J. . Pittsburgh, Pa. St. Louis, Mo . . Albany.N.Y New England New York and Brooklyn, N. V New England Cincinnati, Ohio. Cliicaco, 111 Cleveland, Ohio. . New York, N. Y. Pittsburgh, Pa... SO. 95 2.85 .95 3.18 1.20 2. 45 2.40 3.25 2.90 4.00 4.00 6. 15 4.90 $1.40 4.80 1.40 4.60 1.75 3.90 3. 90 4.70 3.60 5.00 .5.00 7.70 5.70 Per cent. 47 68 47 45 46 59 62 45 24 25 25 25 17 41 Source: Iron Trade Review. 110 ECONOMICS OF TffE CONSTRUCTION INDUSTRY. Tahm', 28. — Freitihl ralea rm iron onfl r>lfel ' fmifihed vi'ilervilitS. [lii/cark)a<) i Source: Iron Trade T{<'\iow. SECTION IX. CL.\Y PRODUCTS. Introduction. The outstanding feature in the chiy-prochicts industry for the past decade has heen the dechne in t]\e relative importance of lirick. Common ])ri('k readied the ])e{ik in f(uantity of pnxkiction in t!i0 year 1906. This decline has heen accompanied by a considerable increase ia production of fire brick, hollow tile, architectural terra cotta, and sewer pipe. To a faiii}' considerable extent terra eotta and hollow tile have replaced ln-ick in construction. Perhaps to an even greater extent i^ tiie decline in importance of bricdv due to tlie vastly increased use of cement in construction. The number of lirms re})orting to the United vStates Geological Sur^'ey sales of day products was largest in 1S09, when 6,962 firms were listed. This numl)er declined steadily until 1917, when .3.162 firms reported. This decrease has probably been largely due to the elimination of many of the smaller ])lants, which has been ascribed to the encroachment of concrete construction ]>ractiee and to the con- solidation of plants for more efficient management. Imports have consisted chiefly of the higliest grades of ware.prin- cipall}' pottery, and have not been a factor in the ])rick and tile mar- kets. Except for kaolin and china day, ini]>orts of clay are unim- portant . Exports of day products are also relatively unimportant, fire brick being the most important member of the group in this respect. More than half of our exports of clay products go to Canada. Ex]>ort.s reached tlio maximum value in 1917, $6,953, 26o. This figure was 2. 3 per cent of the total \ alue of day products sold in this country iu that year. Production figures, 1908-1917. Production figures compiled by the United State.^^ Geological Sur- vey on tlie various groups of clay products are shown in Tables 29 ECONOMiaS OF THE GOK^STRUCTIOIf UST&USTRY. Ill to 32. Quantities and average prices are given only on coiimion, vitrified, and front brick. lu the case of the other products, figures on quantities are not available. Totals of values for each class of products are given, together with the percentage of the value of each product in terms of the total value of clay products manufactured dui-iug the period in question. These figures show that in the decade 1S98-1007 (ommon ])rick amounted to 89.6 per cent of the total. In the year 1917 common brick was 19.3 per cent of the total. Fiie brick amounted to 9.2 per cent of the total in the period 1898-1907; in 1917 they amounted to 23.4 per cent of the total. HoUow building tile accomited for 2.5 per cent in 189S-1907; in 1917 it was 5.3 per cent of the total. Pot- tery shows a slightly greater relative importance in 1917 than in tlie period 1898-1907. The 1917 figure for the total value of clay products is just about double the figure for the average of 1898-1907. This probably does not represent so great an increase in tlie quantity produced, as prices rose somewliat between 1908 and 1917. Production in 1917 and 1918. The production figures for 1918 are only roughly estimated, and are to be underetood as liable to a considerable margin of error. The quantity of common brick produced in 1917 was a little over 20 per cent less than m 1916. If the 1918 figures are somewhere near correct, then the produc- tion of common brick amounted to onl}'- 48 per cent of the previous year, and to 38 per cent of 1916. The year 1917 was characterized by miusual conditions m the clay-workmg industries. There were strikes, scarcity of labor and raw materials, and unfavorable transportation conditions to be contended with. The year 1918 was freer from strikes, but the. cui'tailment of building operations and the Government order cur- tailing production to 50 per cent of normal operatexi to reduce pro- duction very considerably. In fact, producers of common brick were almost put out of business b}' the adverse conditions with wliich they were confronted. Tlie order of the Fuel Achninistration curtailing production called for a reduction of 50 i>er cent in clay di'ain tile and clay roofing tile and 25 per cent m hollow buildkig tile. However, the figures do not mdicate that these products suffered quite so much as building brick in 1918. War-time production of refractory products. Tlie one product of this group which shows a marked increase in 1917 and 1918 is fire brick. 112 ECONOMICS OF THE CONSTRUCTION INDUSTRY. Vivo. ])rick increased in value 88i per cent jji 1017 as over 1916. This would probably represent an increase of about 17 per cent in quantity. The 1918 figures indicate an increase in value of 128 per cent over 1916, which would indicate a probable increase of 12 per cent in quantity produced. The reason for this increase wa,s the demand for fire brick for use in the munitions industries. Fh*e brick were in special demand in the erection of by-product coke ovens, which requii'e large quanti- ties of high-grade refractories. The iniportance of refractories has groA\'ii with the expansion of industry. Thoy are used in the iron and steel industry, in the manu- facture of lead and zinc and glass, in bakeries and tanneries, in kitchen stoves and ranges, and m the burning of many clay products. The increased demand for fire brick proved the salvation of many of the manufacturers of architectural terra cotta. Their product declined in total value more than 50 per cent in 1918. Such manu- facturers as had the facilities for the production of fire brick con- centrated theu- attention on this Ime and tided themselves over the period of depression in this manner. Regional production. Clay products are produced in varymg amounts in all the States. The States of greatest production, in 1916, were Pennsylvania, Ohio, Illinois, New Jersey, New York, and Indiana. They are named in the order of their importance. Those of least importance were Wyoming, Vermont, and Arizona. All the States produce common brick. Vitrified brick are pro- duced mainly in the Central West, with some in the Pacific Coast States. Drain tile, sewer pipe, and hoUov/ building tile are also produced mamly in the Central West. Illinois and New Jersey lead in architectm'al terra cotta. In the production of fii^e brick Penn- sylvania is the leading State, having produced about 36 per cent of the total in 1916. Following Pennsylvania, in the order of their importance, were Ohio, Missouri, Kentucky, and New Jei"sey, with small amounts in about a dozen other States. There is not much information available as to the way in which various sections were hit by the curtaihneut of production in the war period. The Hudson River and Raritan (New Jereey) dis- tricts, from which the supply of common brick for Nevr York City is largely drawn, appear to have sufl'ered the greatest decline in production m 1917 and 1918. The Central West probably suffered the least. This accounts for the relatively greater rise in the price of bricks aromid New York and Philadelphia than elsewhere. The shortage of brick in this region pereisted well hito the year 1919. ecoinomics of the coxstruction industry. 113 Some production figures on sand-lime brick are available. This particular type of brick is produced mainly in the Middle West. The figures follow: 1913. 1914. 1915. 5, 003, 300 6, 118, 500 4. 484, 000 1916 5,675,000 1917 6, 824, 000 1918 5, 403, 800 The 1918 figure is about 21 per cent under 1917. This may be t^-pical of the curtailment of production of clay products in the Middle West. The price record. In view of the fact that the production of clay products is so wide- spread and that the markets are, in the case of most of the products, strictly local, it has been considered advisable to exliibit a number of price series. (See Tables 33 to 40.) It is only in this manner that a comprehensive view of the price situation with respect to these commodities may be obtained. The attempt has been to secure figures more or less typical of various sections of the country and the various ]narkets. In the case of common brick it is readily seen that the rise has been greatest in eastern markets. This has been explained above in the statement concerning the decreased production in the Hudson River and Raritan districts. In Table 39 figures on fire clay and fire brick are showTi in parallel columns as illustratmg the comparative rise in a raw material and a finished product. From these figures it is seen that war con- ditions caused a rise of 158 per cent in fire brick, but that the raw material rose even more — 173 per cent. Figures on two grades of kaolin are shown in the same table for comparison with the figures on mosaic tile. The kaolin figures are also of interest in comparison with the figures on sanitary pottery, shown under the heading of plumbing supplies in the section on miscellaneous building materials (Section XV). Table 40 gives uidex figures on various clay products, as com- puted from the various price series available, together with a com- posite mdex for the clay-products group. This composite index is a weighted average, the weightmg factors being based on the average values of the different products for the 3^ears 1913 and 1914. The mdex on common brick is believed to be typical of the average rise over the country. At least the figure for the last c{uarter of 1918, showing a general advance of 92 per cent on common brick, is believed to represent accurately the general rise to that period. In computing the other indices there were not so many figures a^-aUable as in the 121297°— 19 8 114 ECONOMICS OP THE Cer cent in labor cost ; S3 per cent in traris- portation; 24 per cent in other elements. As a whole his production costs in 1918 were 57 per cent above the 1913 figure. Some producei's of sand-lime brick have furnished their figures on increases of production costs. Averages made from these figures are as follows: Item. 1918 over 191$. T.abor cost Percent. 66 FwiCost 13i Transjjortation 9» Other elements 7S Total production ci In tlie early part of 1919 it was stated that brick, hollow tile, and ceramic tile were being produced at from 25 to 35 per cent of capacity. The situation in the Central West was said to be less serious than in the East. Tlie producers of these commodities have claimed that ECONOMICS OF THK CONSTRUCTION INDUSTEY, 115 their prices were not liigh in coaiparisou witli other commodiiies, iior in comparison with the production costs. Report on brick prices by investigating committee of the IHinois Stare Legislature. The lUinois State Legislature appointed a committee on material cost investigation, the purpose of which was to investigate and report on prices of building materials prevailing in the State of Illinois. After an investigation covering several months the report of the committee was made public on May 6, 1919. Concerning common brick the report contains the following statement: Very exten.4ve investigations of the cost of the manufacture of common liuilding brick were made by the commission. We 6ul>|ectecl manufacturers to the mfieyond question, that these k>sse6 were sustained. The principal elements entering into the cost of manufacturing l>rick are labor, freight and hauling, and fuel. These items comprise nearly SO per cent of the cost of manufacture. The year 1916 was a favoral>le year for the brick induairy. In 1919 labor, constituting about 35 }ier cent of the manufacturing cost, has increased 35 per cent over the year 1916. Freight and delivery to job, constituting alwut 25 per cent of the cost of manufacture, has increased from 1916 to 1919 about 200 per cent on freight and 35 per cent for delivery. Fuel, constituting about 20 per cent of the cost of manufacture, has been increased from 1916 to 1919 al)out 100 per cent. We have been informed l)y the brick manufacturers that brick can not be sold for le^ than $12 per thousand in Chicago, delivered to the job, without depri\ ing the manufacturer of a reasonable profit. This we are not prepared to dispute. It is obviou-^, with over- head expenses remaining practically the same with a small or large j^roduction, that operating at full cajiacity would insure a lower price than would result if there was a limited production of brick. The commission has been unable to establish, by e\i- dence, that any illegal comlnnations exist to regulate the price of commt)n building brick. For a limited time during the war the Government permitted agrf'enieuts of brick manufacturers to be made establishing prices. The agency for this purp-oe, created Arith the Government's sanction, has ceased to exist. The Chicago price of $12 per thousand is the lowest price obtaining anywhere in the United States. The only assurance we can gi\'e the public is that, with practically capariiy production, there may be a slightly lower price for common building brick. The price for Chicagf.) common building Ijrick was established In' thllo\ving prii^es per thousand f.o. h. trucks or cars at plant; an additional charge of ?2 per thousand (o ],o allowed wtiore brick nnt^t be trucked or loaded on cars at nearest railroad siding outside plant: 116 EOONOMICft OF THE CONSTRUCTION INDUSTRY. • DislricI No. 1. - New England States and New York State north of Albany and east of ^fec^lanjf•.v villo: 1 fai fl hinnod $17. 50 Lijjht })iiincd or salmon 15. 50 Except Dufl'ney IJrick Co., Mcchanicsville, N. Y.: Hard burned 12. 50 Light burned or salmon 10. .50 District No. 3. -State of New Jersey nortb of Trenton: Hard burned 16.50 Light burned or salmon 14. 50 Long I.sland, N. Y.: Hard biuned 13. 50 Light burned or salmon 11. 50 District No. 5 — Slates of Virginia and North Carolina East of Asheville: Hard. Adams- Payne & G leaves, Roanoke, Va $12. 00 Asheville Brick A- Tile Co., Fletchers, N. C 12. 50 Yadkin Brick Yard, New London, N, C 12. 50 .\dams Bros., Payne Co., Lynchburg, Va 15. 00 Nunsemond Brick Corp., Norfolk, Va 16. 00 Cherokee Brick Co., Raleigh, N. C ; 11. GO Fulton Brick Works, Richmond, Va 14. 50 Lewis Larson, SulTolk, Va. (Sorooo Brick Co. ) 15. 00 District No. 6 — States of Tennessee, North Carolina west of and including Asheville, South Carolina, Georgia, P'lorida, and Alabama: W, B. Bush Si Co., N;vshvUle, Teun 10. 50 Dolores Brick Co., Molino, Fla 10. .50 Shepherds Bros., Columbus, Ga 10. .50 Bickerstaff Brick Co., Columbus, Ga 11. 00 Georgia-Carolina Brick Co., Augusta, Ga 11. 50 Geo. C. Berry, Columbus, Ga 12. 50 Pee Dee Brick & Tile Co., Marion, S. C 12. 50 Standard Brick Co., Macon, Ga 12. 50 Bibb Brick Co., Macon, Ga 12. 50 Cherokee Brick Co., Macon Ga 12. 50 E.xcelsior P)rick Co., Montgomery, Ala 13. 00 Guignard Brick Works, Columbia, S. C 13. 00 Carolina Brick Co., Kingston, N. C 15. 00 Chatahoochee Brick Co., Atlanta, Ga 15. 00 Birmingham Clay Products Co., Birmingham, Ala 18. 00 Southern Clay Mfg. Co., Birmingham, Ala 1& 00 District No. S— State of Peimsylvania, west of llarrisburg (including Metropolitan Brick Co., Can- ton, Ohio): Hard bmned 16. 00 Except Yingling-Martin Brick Co., I'itlsburgh, Pa.— Hard burned 18. 42 District No. 9— States of Ohio, Michigan, West Virginia, and eastern Kentucky: H;ird biu-ned 16. 00 Light burned or salmon 14. 00 Kx-cept Geo. H. Clippert & Son Brick Co., Detroit, Mich,— Hard burned 14. 50 Light burned or salmon 12. 50 District No. 10— States of Illinois, Indiana, western Kentucky, and southern Wisconsin, including Madison: Hard burned 15. 50 Light biu-ncd or salmon 13. 50 District No. 12— States of Mississippi, Louisiana, Arkansa.^, Kansas, and Texas, except El Vaso Coimty: Choctaw Brick A Gas Co., Mansfield, Ark., hard burned 15. 00 ColTeyville Vitrilicd Brick i Tile Co., Coffe>-%-iIle, ICans., hard biu-ned 12. 00 District No. H— States of California, Nevada, Arizona, New Mexico, and El Paso County, Tex.: Hard l.uriied 1 1. 00 District No. 10— States of Mi.ssouri, Iowa, Neiiraska, and Oklahoma: H;ird burned 16.50 District No. IS— Chicago district: Hard burned 11.00 Sand-lime brick 14. 50 ECOXOMICS OF THE COXSTKUCTION liSI^DUSTEY. 117 Concerning piiving brick the following brief statement was made: The committee finds no evidence of a combination of paving brick manufacturers. Competition between the paving brick and cement manufacturers has resulted in a price for paving brick at a point as low as paving brick can be sold at a reasonable profit. Three paving brick manufacturers of this State have offered to lease their plants to the State at an annual rental of 6 per cent on the fair cash value of their plant investment, or to contract their output to the State at actual cost plus a reasonable profit. Table 29. — Brick soldin the United States, 1S98-1918. [Figures from U. S. Geological Survey.] PericK?. Average 1S9S-1907.. Average 1908-1912. 1913 1914 1915 191C, 1917 Average 190.S-1917 1918' Common brick. Vitrified brick or block. | Front brick. Quan- tity (thou- sands). Value. Aver- age Quan- price ; tity per ! (thou- thou- j sands). sand. S,39S,.593S48,705,9.S(5 8,770,990 8, 088, 790 7, 14(5, 571 6,851,099 7,394,202 .5,864,909 7, 920, 052 2, 820, 000 51, 783. .562 50, 134', 757 43, 769, 524 42, 145, 292 49,357,411 47,936,344 $.5.81650,820 5. 90 966, 081 6. 20 958, 680 6. 12 931, 324 6.15,9.53,335 6. 68 941, .553 8.17 706,934 49, 22,>, 114 0. 22 932, 223 11, 474, 048 30, 000, 000 10. 65 400, 000 8, 000, 000 Value. •?6, 298, 707 10, 993, 809 12, 138, 221 12, 500, 866 12, 230, 899 12, 2:36, 890 10, 664, 5tX) Aver- age Quan- price I tity per (thou- tnou- I sands). sand, i $9.CS 11.38 12. 66 13.42 12. a3 450, 527 727, 484 827, 665 810, 395 a55. 668 13.001,002,762 15. 09 757, 618 12.31 19.70 789, 1.53 400,000 Value. S5, .552, 791 8, 668, 410 9, 614, 138 9, 289, 623 9, 535, 5.36 11,464,614 10, 391, 368 9, 363, 733 8,000,000 Aver- are price per thou- sand. S12. 16 11.92 11.62 11.46 11.14 11.43 13.72 11.87 20.00 ' Figures roughly estimated. Table "iO.—Clag products sold in the United States, 189S-1918. [Figures from U. S. Geological Survey.] Com- mon brick. Vitri- fied brick. Front brick. Fancy or orna- mental brick. Enameled brick. Fire brick. Period. Per cent of total. Per cent of total. Per cent of total. Value. Per cent of total. Value. Per cent of total. Value. Per cent of total. Average 1898-1907 Average 190S-1912 39.6 32.2 27.6 26.5 25.8 23.8 19.3 27.3 13.6 5.1 6.8 .6.7 7.6 7.5 5.9 4.3 6.5 3.0 4.5 5.4 5.3 5.6 .5.8 0.5 4.2 5.3 3.0 S332, 2.57 203, 103 109, 703 124, 459 109, 425 109, 072 192,072 166,025 0.3 .1 .1 .1 .1 :1 .1 S531, 111 910, 634 l,225,7as 1,075,026 835, 808 827,443 889,899 940, 705 400,000 0.4 .<) . 7 .6 . 5 .4 .4 . 5 .2 •511,352, .506 15,876,140 20,027,122 1.;, 427, 547 1S,,S:?9,931 30, 806, 129 58, 012, 264 22, 409, 369 70,000,000 9.2 9.8 1913 11.4 1914 10.0 1915 11.5 1916 14.9 1917 23.4 Average 1908-1917 12.7 I'JIS' 100, 000 . 31.7 » Figures roughly estimated. lis HCONOMICS or THK CON'STKUCTION INDUSTRY. T.A.K1.1: :'.l -''Iw/ pro&arU snhl in the Unit'''! Stairs, IS'^S-lOl^. [ Figuies f roin tlio ('. S. 'Jeological Survey.) 1 stove lining, j Drain tile. 1 Sewer i>\\n:. -Vrrhlteetaral terra cotta. Hollow buildijaii tile and firo- proofiug. Period. Value. Per cent of total. Value. Per cent ot total Value. Per cent of total Per Value, -f total t \alue. S3,0»l,818 5,11.5,932 8, 620. 216 8, 385, .337 7,800,938 9,042,912 13, 253, 433 7,358,450 10.000.000 Per cent of total. Average 1898-1907.. Average 1908-1912.. 1913 $564,223 517,671 635,667 520, .=85 459,341 601,776 0.5 .3 .3 .3 .3 .3 .2 .3 $4,566,921 9. 137. J05 8,5.'.8.320 .3.7 .5.7 4.7 $7,851,351 11,271,409 14.872.10;3 14,014,767 11,259,349 13,577,00«l 17,307,211 12. 738. 748 15,000.000 Ci. 3 7.0 8.2 8.5 6.9 6.5 6.0 7.2 6.8 $3,888,741 3.1 6, 180. 800 4. 7,7:33.306 4.3 6. 087. 652 3. 7 4,706.062 2.9 6. 466. 336 S. 1 6,173,5.30 2.5 6,366,091 3.6 ! 3.000.000 1.4 2.5 3.2 4.7 1914 8, .522, 039, 5.2 8,879,264'; 5.4 10.033,617 4.0 11,008,163 4.4 9.273.845 5.1 10,000,000i 4.5 5 1 1915 4H 1916 4.fi 1917 Average 1908-1917.. 1018 ' : 619,882 532,561 5.3 4.2 4.5 ' Figures roughly estimated. Table ?>2.—CIai/ products sold in the United States, 189S-191S. [Figures from the I'. S. Geological Survey.] Tile, not drain. Period. Value. Average 1898-1907 .... ,$3, 122, 553 Average 1908-1912... 1913 1914 1915 1916 1917 Average, 1908-1917. 5,115,213 6, 109, 180 5. 705, 583 5.186,055 6,475,464 6,821,221 5, 587,357 Per cent of total Z.2 3.4 3.5 3.2 3.1 2.7 1918' 5, 000, coo- Miscellaneous. Total hncl; and tile. .$3,488,256 2.663,915 3,018,316 3,165,814 3.716,944 7,094.149 8.588,879 3,890,368, 2.2 6,500.000 Per cent of total 2.8 1. 1. 1.9 2.3 3.4 3.5 Value. $99,230,953 738.001 296, 757 588. 822 704.841 042. 849 860,846 139,327.413 166.000.000 Per cent of total 80.5 80.0 70.1 78.6 77.0 76. 77.2 Potter v. Value. ! Per i cent of I total $23,832,693 19.5 32. 198. 489 37.902.37,51 a5, 398, 161 37, 325, 3S8 48.217,242. 56, 162, 522; 20.0 2l>. 21.4 23.0 2;?. 3 22 37,608.809 21.3 55,000,00* 24.9 Total. $123, 06:?, 646 160,936,431 181,289,152 164,936,93? 103,120.2:12 207.260,091 24S,023,30S 176,936,222 221.000,009 ' 1918 figures rougtily estimated. ECOXOMICS OY THE COXSTEUCTIOls^ INDUSTBY. 119 O W 10?^ « •-> .-' O J-. 3> d O •* O- ta £ i 1 tc ;^ III 3 1 1 «jO 1 (E 00 -r CI 5 o r* i£ — o '»t~OllM oco-.o ^— ,_4 ^H iNo o ,-^ O r or. -.; 'K - 2i, 4# . 13!! C-. :-: -r n ss It I'^liSSI --2S sSfig ?2 — 5l c^ c rt c: .^J (^ o o O ?C 3 T -.^ *-" i-t o r: ^ cs —. i^ ^4 irr r^ t5 00 35 ac — cr .i ji ii t-l O H g'-5^ c c: o ^ Sis: C Tf c ■..; :j » n F- cs C C 30 ac M -M - c ^3 a. ^ b..2 S " '- 2 iSII oc c: oi ri O = 3: 3-. — ■ gg 3 T»i30«- £2:5 = ..l^< 120 ECONOMKJS OF THE CONSTRUCTION INDUSTIIY. ■=9 o — a* rv P5 SSBSS's?, 8SS-2 Sfeggsi? s~2?; > t^ CO C^ iC Q CO J O CO CO o5 Q CO . O CO CO ^OO ) --o 00 00 o O w ^ O O -^ t-^ 00 o i|l§ r - CO o CO cc ^ O « O CO cc ! o cc o CO cc : »-H c/5 "^ CO CO : oi oi o -H -4 - cifl o oo o oo CO §0 O O Q O CO oSoiOO CO CC 00 00 00 Oi -J Oi Q O 1— ' -t- »0 o ^ S o So (M o OC t^ 00 OC CC Oi CO e ^ t> -U c p S tC a tl 7: u fS o vD in o 1^ ■ O CT> ^ — « cooco ;o ^ cOCOrf Oi-iOOOl ooc cico 8^ 28 ' c a 1- u ^ s J. 2 >3 S c; 3 5.—, ^_r1 w t^ 00 .^ c3 fc- g •- S c3 3 ^^^^ w P-- 3 i; g^ o .=• . C3 ECOXOMICS OF THE COXSTRUCTIOlSr INDUSTRY. 121 I- 3 .sr 5-^ c: • c: -c r •-*• -r O" 00 .— C^ CC CO ^ .-H CO 'O (N (N C^ C^ O O Ci o SSScSSS-S n' '^ oc r^ C Ol C-1 C ^. M 00 oc lo »rr cr. oc Ci t^ ■ C lO CO C M- -H 1.-5 c: c^ tj- ^ c: c c ■ — ■--: %o —44 =: = -■ C C O O C C — -( ^ • : =; Cn a: C-. C-J JC 'Jl' C^. w 5^ S £5 C C O C C '- 'O »Ci c o o o r^ r^ oc o r^ ci t~ ^ 3: :C t^ -■£ X X X CNI C CO C t^ ir: TO O X I- CC'O — I t. fe a III! 5-c ^.a ■U'i.a o 122 ECONOMICS OF THK CONSTRUCTIOX INDUSTBY. K~i3 P.5 .IS >- 2 P-.S Si?? c. r. I - >:tooc^ (n + c. — M- -5 '3 -^S o c-i CI c5 ''^ 3" ^ o-== c o c ■= c c — -' O a,' — lis C) MOO cj •.-5 i.^ CJ O C rj C S 1 - CJ "J- 't >-- Vj \r. ~. F-- N CI c-4 CI c-i c^ r^i ns • = 53 c -r r; 00 0-. c; o o o — »-~ »-t o rr ^>v •2> i; .IS P--C 'j-.-f.-Ji o — — '■: M — "" >, i;:U-;i A--C CI CI ». O C: O O O = C t~ »-■'' U-: I.* 1-* «c »it I- 1 - p-^ o j: o S c H = » S -c 00 t-^ t~ t-^ 00 00 c-i => — ■ O O -^1- cic" S o o ao ao a, 4> 'n o.s 3 J- o]^ ^ O^ (^ O: ^ EC0>70MICs OF THE CO^^STKU< TIOX IXX»USTR¥. 123 — — — . -.-CJ o o oo o o c: c: -c -- ( ^ 00 3: ct O C: <= O => 3 — S = o o ?l•^T ?T *^ »£: ;6 |0 r; ^ gc S'c^S o S S c=. P--H oi -M n ^) O O = :C!- I- < : — • oc 1 - •^ X — .-^ M u- — v: r: : ■?) -M ?; 7^ ^ -i ci ?4 c-i :s c■ «■> C-. 1 - i-: o O o -T" «o C^ O O Ci ^r -T ■-l i-i ri r-< r-crlr-iT-i r-. i-i 55 CS 1 oo: C^ C o.SS 8?5s .. 5 C c r^ o L^ CO 5 o >c Ci »o c sc o o t- 1 - M i« r,; ic lO -r -^ CS ^ -^ ,-< i-^ r-1 i-i(M to -i -i o -i .-Cl-I r-. -H C^< c oo o §§53 sz oc o cco^^ : ro--£ _ ro ^ o cco'-O o ci o CO »^ „rt,^rt r^NCMM .Tiilv 1, 1913, to June 30, 1914 1913 1914 c- c ECONOMICS OF THE COXSTRUCTIOX INDUSTRY. 125 5'§ •- 2 go O -- - 1^ — c: r-H ec ^ '-0 T- — . C) CJ 2^ s c o o o -^ oc* rt £■5 8S 5 OO C to CO ' — . C C CI CO CI CI C-1 CC CO C t< c c c H c o 0-. oicr. Oi c. c^ I- OOCQCO « £ ci C) --; C O Q C CiC CO c c: C C O CI CO C c c c: c; tc CO ic i" ir; to ic iC CO c5 CO eo C'j CO Tt^ ^ c c c Q e c: c S c c c o c c c; CO C C C CO o w c: CO C- 0> Q t-l .-1 to O c; C-- © c CI c -* --. i-lr-l .-< rtC^ g}0 OC'OO to c-ir- oc ci c. c< ci ft •c 5 CO o r^ CO t--. CO : CO O -^ CO ^ CO cc to CD o »— CO CO CJCJiMCICOtO --o c: -^ 2 £ C tc C: C X Tf d -^ gOOO'^OOi c c= £ — CO to r-H r-. 1-. 1-. 1-1 CS Cl 'T to X-i- g.5 ^1 ic "? S: to ci ^ cq t* t^ t^ l^ r- CO ^ e| ci ci ci CO «c r^ oc c — to 4 105 192 202 i 202 202 Fire brick. Hollow tile. 100 99 100 101 121 195 246 IS-i 210 218 218 2:35 242 247 258 100 100 100 93 118 1.5.5 177 l.^S 151 1(W) 167 172 171 1S3 IS-t ISO 175 Drain tile. 10(J UIO 100 100 129 143 193 U3 143 143 143 ir>3 1M) Com- ^io8ite index. 10i> :M 'H 111 14»i IW 147 15* 156 170 i7r 190 197 2«1 195 SECTION X. QUARRY PRODUCTS. General remarks on the stone industry. To quote the United States Geological Survey: Stone has suffered competition for several years past from various types of cheaper structural materials, and a large number of owners of small quarries have closed their works on accoui\t of lack of demand, stone having been replaced by concrete and brick. The demand for the more expensive grades of building stone has continued fairly regular, and the decrease caused by the closing of quarries furnishing the cheaper stone has been offset in the grand total by the increase in the output of crushed stone, which at one time was considered only a by-product. The stone industry is influenced largely by local demand. Construction such aa sea walls, river improvement work, construction of roads and reserv-oirs, etc., and other similar structui'al work may call for the opening of a quarry in riv> \ •'•i:nty of the work, to be abandoned as soon as this work is completed. Production figures on stone of all kinds. Table 41 gives the production figures on stone produced and sold in the United States, classifietl according to kinds. Table 42 gives production figures for stone classified according to uses. From the first table it is seen that granite and limestone are the most important; and, also, that limestone has grown in importance more than the other kinds. Granite reached its peak of production in the 3-ear 1913, A\hich was the maximum year for stone of all kinds, v.hile limestone increased up to and including the year 1917. For the decade 189S-1907 granite represented 20 per cent of the total stone produced and limestone 40 per cent. In 1917 granite was 19 per cent of the total and limestone was 56 per cent. Limestone was the only kind that was greater in total value in 1917 than in 1913. ECOXOMICS OF THE CONSTRUCTION INDUSTRY. 1'2T The second tabic shows tliat the most unportaiit form in which stone is used is crushed stoue. Orubhe^l stoue is considered along with sand and gravel in Section XII, on mineral ciggregate, and will jiot be treated in detail in this section. Second in importance to crushed stone, in normal years, is build- ing stone. This group, however, was overshadowed l>y that under the heading of "Others" in 1916 and 1917. The latter group in- cludes the limestone used in important metallurgical and chemical industries and as pulverized stone for agriculture; rough trap rock sold to paving cutters and crushing plants, marble used for flux^ terrazzo, marble dust, etc. Pavmg stone, curbing, flagging, rubble, and riprap have all de- creased continuously from 1913. Monumental stone increased somewhat in total value in 1917, but probably did not mcrease in quantity. Production figures on building stone. Table 43 gives figures on the production of building stx)neby kinds. This shows markt^d decreases in ail kinds, from 1913 to 1917; but limestone shows less decrease than the others. The building stone produced in 1913 was about 4 per cent less in value than in 1912. The 1914 figure indicates a decrease of 1§ per cent from the 1913 figure, which shows that the total production of building stone in 1914 was not greatly affected by the general busi- ness depression. Marble was the only kind of stone to show an in- crease in production for building purposes in 1914. The general depression which began m 1914 did not exert any severe effect on the building stone industry until 1915, in which year the total value was nearly IS per cent under the previous year. During the first half of 1915 many important quarries were idle. Although building activity was very great in 1916, there was not a large proportion of stone buildings. Limestone was the only kind of stone showing an increase; the total value of building stone decreased 2^ per cent from 1915. The output for 1917 decreased 30 per cent in quantity and 17 per cent in value from 1916. Estimates for the year 191S indicate a decrease from 1917 of 59 per cent in quantity and 44 per cent in value. Exports and imports of stone. In the year 1913 the total stone, including marble, exported from the United States was valued at $1,856,892, or 2.2 per cent of tho total value of stone produced. This was the record j'ear in exports. In the same year imports amounted to .$1,606,135. Most of tho stone imported is marble and onyx. About 85 per cent of the marble imported in ordinary times comes from Italy. 128 ECONOMICS OF THE COXSTRUCTION INDUSTRY. These flguros on exports and irn])orts arc so small in comparison with domestic production, that it is readily seen that they would scarcely affect the domestic markets. Conditions in Great Britain. The following is quoted from the United States Geological Survey: The British mineral .stalLstirs for 1010 are interesting as an index of v.-hat may happen to our own mineral industry, the United States having entered the war under conditioas similar to those of Great Britain — that is, both were essentially nonmili- tary nations — and both were obliged to withdraw from peaceful pureuits a large per- centage of the working population. Unfortunately, the mineral industry of Croat Britain is far less diverse than that of the United States, and in the produftion of metalliferous minerals is relatively unimportant, except for iron ore. The noteworthy feature of the British statistics is theii* exhibition of how the pro- duction of the essentials has been fairly well maintained, while the nonessentials have fallen off to a much larger extent. Thus, comparing the figiues for 1913 with those of 1916, we find that in the former year there was a production of 287,430,47.3 tons of coal, 15,997,328 tons of iron ore, and 3,280,143 tons of oil shale. In 1916 coal production had declined to 256,375,366 tons, iron ore to 13,494,658 tons, and oil shale to 3,009,232 tons. Turning now to nonessentials, if we may be permitted thus to characterize the rocks, we find that gravel and sand declined fi'om 2,409,152 tons to 1,961,650 tons. Igneous rock declined from 7,098,493 tons to 4,843,176 tons. Lime- stone declined from 12,740,664 tons to 10,541.573 tons. Sandstone declined from 3,977,303 tons to 1,999,308 tons. If our interpretation be correct, the decline in the production of sand and rock reflects curtailment in domestic building operation-S, things not immediately necessary having manifestly been postponed. On the other hand, attention has been concentrated on the production of coal and iron, which are indispensable, and their output has been pretty well maintained. Production figures on slate. Table 44 gives figures for production of slate in the United States from 1908 to 1918, inclusive. Production of roofing slate is seen to have undergone something of a decline during the years preceding the war. This is undoubtedly due to the severe competition of cheaper kinds of roofing material. In quantity roofing slate in 1913 was about 6 per cent under the average for 1908-1912; in 1917 it was 32 per cent under the average for 1908-1912. The quantity produced in 1918 was 69 per cent under the 1908-1912 average, and 46 per cent under the figure for 1917. On the other hand, mill stock, which includes slate used for struc- tural purposes and in connection with electrical work, during the years 1913-1917 averaged 5,502,208 scj[uare feet, or an increase of about 4 per cent over the preceding five-3'ear period. TLie quantity of mill stock produced in 1918 was 12 per cent under the figure for 1917. The decreases in 1917 and 1918 are to be attributed to the lessened demand occasioned by the inactivity in building. Slate is not used extensively in liastily constructed buildings, such as a large per- centage of the new buildinjrs were in 1917 and 1918. ECOXOMICS OF THE COXSTEUCTIOX INDUSTRY. 129 Imports of slate are quite insignificant. Total exports in 1916 amounted to $81,282, which was H Per cent of the value of the do- mestic production for that year. In 1917 exports amounted to $231,703, or 4 per cent of the total domestic production of the year. The principal increase was in slates of the mill-stock group. Production figores on lime. Table 45 shows figures on building lime and on all lime produced in the United States. Lime reached its maximum production in 1916, in building lime as well as in the other kinds. The total for 1917 was 7 per cent under 1916 in quantity, and 28^ per cent over 1916 in value; the total for 1918 was 20 per cent under 1917 in quantity, and 1.7 per cent over 1917 in value. Building lime in 1917 was 13 per cent under 1916 in quantity and 10 per cent over 1916 in value; in 1918, according to the estimated figures, it was 31| per cent under 1917 in quantity and 18 per cent under 1917 in value. In 1913 building lime was 38 per cent of the total lime produced; in 1916, 37 per cent; in 1917, 34 per cent; and in 1918 a little under 30 per cent. Other purposes than building for which lime is used are in chemical works, paper mills, sugar factories, tanneries, in fluxing, and in agri- culture. War demands caused increased sales of chemical lime. The explanation for the decreased production lies in the general curtailment of building operations following the spring of 1917, together with difficulties in securing lal>or and transportation. Some plants that supply only building lime were closed throughout the year 1918. Imports and exports of lime are quite insignificant in quantity and value as compared with the total domestic production. Regional production of stone. All the States produce some stone. Tlie ranking States, in the order of their importance, are Pennsylvania, Ohio, A^ermont, New York, and Indiana. Of the States and Territories listed in reports of the I'nited States Geological Survey on stone for the year 1917, 16 States east of the Mississippi showed increases in value of output and 11 showed de- creases; in the territory west of the Mississippi, 8 States showed an increase, and 11 showed a decrease. The most important States in the production of granite were, in 1916, Vermont, Massachusetts, North Carolina, California, Wisconsin, New Hampshire, Maine, and Minnesota. Nineteen other States pro- duce granite. 321 297°— 19 9 180 ECOXOMK^S OF THE COKSTRUCTION INDUSTRY. Sixteen States produced basalt and related rocks (trap rock) in 1916. Of those the most important were New Jtrsey, Pennsylvania, New York, California, Connecticut, and Washington. In 1916 marble was produced in 19 States and Temtories, Ibe most important of which were: V^ermont, Tennessee, Georgia, Alaska, Colorado, and New York. Tliii'ty-eiglit States produced sandstone in 1916. Of these, the tlu'ee leading States, Pennsylvania, Ohio, and New Y''ork, furnished together 59 per cent of the total. In the same year 45 States are reported as producers of limestone, the leading ones being: Pennsylvania, Ohio, Indiana, Illinois, New York, and Michigan. Detailed statistics for 1918 are not available for inclusion in this report. However, some figures are available on Indiana oolitic limestone m the Bedford-Bloomiugton district, as follows: Year. Value of output. 1 1 Year. Valu» of .oiitinit. 1913 $3,179,347 2,718,609 3,018,171 1916 1917 1918 S-3,4s<>,5.:5 1914 191.5 .3.S*4,IM l.C«l. ••^t - 1 These figures are given because the product of this district lias grown to be of such importance in the construction of the better types of buildings. The decrease in 1918 was 42 per cent as compared with 1917, the total value of output m 1918 being the lowest reported shice 1904. About 93 per cent of the 19 IS figure represents build- ing stone. The large decrease in production was due to railroad embargoes, scarcity of labor, and curtailment of building activities. Regional production of slate. In 1916, of the total value of the output of slate, Pennsylvania produced 58.7 per cent; in 1917, 57.7 per cent. In 1916, Vermont produced 30.1 per cent of the total value of the output: in 1917, 32.5 per cent. Virgmia produced 3.1 per cent of the total in 1916, and 2.4 per cent of the total in 1917. Figures on regional production for 1918 are not available. How- ever, early in 1919 one Pennsylvania producer reported his quarries as working at 20 per cent of capacity, and another at 75 per cent of capacity. At the same time a Vermont producer reported that his plant was operating at about 30 per cent of capacity. Regional production of lime. The production of lime is fairly widespread, 42 States and Territo- ries being listed by the United States Geological Survey in 1916. In that j^ear the most important producing States were Pennsylvania, Ohio, Virginia, West Mrginia, Wisconsin, and Missouri. ECOKOMICS OF THE CONSTRUCTION INDUSTRY. 131 In 1918 the total quantity of lime produced was 20 per cent less than in 1917. Production figures by districts for tlie years 1917 aud 1918 are shown in Table 46. The price record. Tables 47 to 50 attached give the record of prices for the yeara 1913-1919 on building and monumental granite; on flagging, curbing, and paving blocks; on limestone and slate; and on building lime. The figures in the last column of Table 50 are composite index figures on building lime, wliich are supposed to represent a fair average of the general rise of this product throughout the country. In computing these figures the average annual prices as published by the United States Geological Survey have been combined witli averages of the indices obtained from the Price Section of the War Industries Board. These figures show for the last quarter of 1918 a general advance of 97 per cent over the prewar figure for building lime. The figures in Table 51 are presented as representative indices of the rise in the various kinds of building stone. Those on limestone, granite, and marble are the ones chosen as representative figures by the Price Section of the War Industries Board. The figures on build- ing slate are simple averages of the tliree series of indices in Table 49. The final series on all building stone is a weighted average of the indices on limestone, granite, marble, and slate. The figm-e for the last quarter of 1918 indicates a general rise of 64 per cent on this class of materials during the war period, an increase which is small in comparison with other building materials, as well as in comparison with commodities other than building materials. In most cases the prices recorded have been f. o. b. point of origin. These index figures do not take into account increases in the cost of transportation. Cost of prodwction in the building limestone industry. The foregoing figures show that the building-stone industry was very seriously curtailed during the war. In response to the lessened demand, production decreased. Prices rose considerably, but rather less than the prices of most other building materials. Early in 1919 it was stated by a representative of the industry that prices were not due to drop. Increased prices were ascribed to increases in the cost of labor, fuel, raw materials, and transportation. An important producer of Indiana limestone has stated that during the war wages in the industiy increased in amounts ranging from 33^ to 120 per cent according to the different grades of labor, the average increase for all labor being 55 per cent. The same producer stated that the cost of steel, delivered at his plant, increased 340 per cent, fuel 220 per cent, and transportation from 30 per cent in some cases to 500 per cent in others. 132 IICOXO.MICS (IF TIIK ('OXSTIirCTIO.V IXIU'STRY. Fij^iiics on wagos of stonecutters have been furnished to this division. Thoy are as follows: Wafjes of stonecuUcrs in Indiana. Vi;ir. Waijp.s per hour. lii.lox. Year. Waces per hnur. Iridcx. J808 $0. 35 ..iO .5(>J fi2 89 19H $0.60 .r.7i . 75 108 190S 191') 111 1909 1917 120 1913 100 1918 133 a Sliding scale, $0.50, $0.56'„ $0,621. Wages of other classes of labor in the building-stone industry have been presented as follows: Ilourhj icufjes ui the buildin'j-slone industry in Indiana. Classififatifn. November, 191(1. November, 1918. Increase. P]an»smen $0. 35 .30 071. as' .32i .30 .24 $0. 62i .39 .37 .27 . »;2.i. . 39' .34 Pir cen' . 79 Traveler runnel's . 30 Sa«'yers 35 Laborers 50 Blacksmiths 92 30 Rock breakers 42 Average increase 51 Figures from stone producers in the northern Ohio district indi- cate an average wage increase of 42 per cent for 1918 over 1913; and an average increase in total cost of production of 40 per cent. The figures in the price tables show a smaller rise in ]) rices in this district than elsewhere. Cost of production in the marble industry. An important producer of marl^le in the State of Georgia has stated that from 1913 to 1918 wages increased 70 per cent; fuel, 110 per cent; transportation, 25 per cent; and other elements, 150 per cent; the increase in total production cost was 84 per cent. Labor increased from 40 per cent of this manufacturer s total production cost m 1913 to 60 per cent of the total in 1918. Another large producer of marble in the State of Missouri stated in March, 1919, that business in his section had suffered somewhat less than in the region east of the Mississippi River. He stated that wages of common labor had increased about 40 per cent from 1913 to 1918 and skilled labor about 30 per cent; fuel cost mcreased 92 per cent. On the whole, this manufacturer s production cost increased about 28 per cent. Cost of production in the slate industry. No detailed figm-es are at hand concernmg production cost in the slate industry. Increased prices have been attributed by producers ECONOMICS OF THE CONSTRUCTIOX INDUSTRY. 133 in Vermont and in Pennsylvania to wage increases, increase in fuel costs, and increases in transportation rates. One Pennsylvania producer lias stated tliat wages in his district increased 75 per cent. Table 41. — Vabic of the different linds of stone produced uwl sold in the United /States 1898-19 18. [Figures from U. S. Geological Survey.] Period. Granite. Basalt and related rocks (trap rock;. Sandstone. Marble. Limestone. Total. Average 1SS8-1907 §14,714,466 19,792,235 20,7:33,217 20, 160, 730 17,864,4.39 17,4.56,838 15,544,957 19,072,136 £2,476,228 6, 033. .516 9, 134, 494 7, 865, 998 8, 489. 222 7,666.297 7,570,885 7,089,448 18,623,829 7,631,809 7, 248, 965 7,501,808 6,095,800 o, 603, 778 5,512,421 7,012,182 85,612,897 7,321,7.56 7,870,890 8,121,412 6. 916, 025 7,033,171 6,330,387 7,288,066 §20,614,153 32,996.699 38, 745, 429 33,894,155 35.229,866 41, 309, .599 46,263,379 36, 012, .592 •S52,041,574 73,776,014 83, 732, 995 77,544.103 74,595,352 79,069,63 "82,215,671 70,003,787 t- 63,000,000 Average 1908-1912 1913 1914 1915 1916 1917 Average 1908-1917 1918 1 1 " Includes -?99:3,612 for miscellaneous quarry products. i> Very roughly estimated by Division of Public Works and Construction I^evelopment Table 42. — Vcdnf e>f stone sold from 1913 to 1918, hi/ kinds and uses. [Figures from U. S. Geological Survey.] Year. Bulldimr (roughi and dressed;. Monumental (rough and dressed,!. raving. Ciu-bing. Flagging. 1913 §18,097,219 17, 796, ,5,52 1.5,380,448 14,677.808 12, 102, 914 6, 750, 000 $7,212,648 7.150,293 6. 459, 439 7,372,620 8, 102, 493 $3,936,448 3, 772, 383 3,018,382 2, 730, 861 2.732,434 $2,077,919 1,869,676 1,654,764 1.611,001 1,402,980 $573,638 .594 9i0 1914 1915 500 732 1916 409 605 1917 356,327 1918 a ... Year. Rubble. Riprap. Crushed. Other. Total. 1913 $1,. 588. 714 1,256,213 1,094,445 ■ 825, 330 864,321 S4, 204. 857 3, 736, 432 4,193,672 3,635,167 2,208,373 $31,677,871 30,161,766 29,173,488 29,462,5,52 29,065,509 32,843,000 $14,363,681 11,2.59,818 13.089,982 18,344,5.52 25,380,320 $83, 732, 995 J9M 77,544,103 74,595,352 79, 069, 683 1915 1916 1917 82, 215, 671 1918 a 63,000,000 a Figures for 1918 eslimated. Table 43. — Building stone — Value of granite, trap roek, sandstone, limestone and marble {rough and dressed) used/or building, 1913-1918. [Figures from the U. S. Geological Survey Reports.] Kinds. j 1913 1914 1915 ' 19ir. ' 1917 1918 $6,662,428 6.S,690 1,874,299 4,509,339 4,982,403 $6,481,091 45, 134 1,825,179 3, 896, 8.54 5. 548 294 $4,702,627 ?4, 305, 517 52,307 (■)4,277 1,416,842 1,316,287 4,056,201 4,570,703 o4,8(;4,471 « 4,744,1,06 $3, Kil, 294 39,200 1, 043, 226 4,115,366 a 3, 702, .5(3 41,265 Trap rock Limestone . . Miscellaneous . . . Total 18, 097, 219 17. 796. 552 15,092,448 [ 15,001,390 12,102,914 b 0, 750, 000 ' ' a Marble for exterior building only. h Estimated. r.u KCOXO.M HS OK TDK COXSTItl'CTIOX IXDU&TRY. T.vui.K -14. SIdtr unld ',„ Ihc L'nitid States, IDOS-UflS. [Figures from U. S. Geological Survey.] Year. Average 1908-1912 1913 1914 1915 1916 1917 1918 Roofiiig slate. Number ofM)iuiifs Y.i.„ (lOOsiliiurel ^ •"'"'• feci). ' 1,209,894 1,113,944 1,010, 5.->3 9ti7,SS0 88.5, 873 70:5, 667 377,417 $4,682,033 4,461,0<)2 4,lf,(),832 3, 7 Hi, 334 3, 408, 934 3,411,740 2, 198, 179 Average price per square S3. 86 4.00 4.08 3.87 4.08 4.85 5.82 Mill stock. Qtiantity (siiuare feet). 5,319,610 6,312,011 5,361,925 4,. 576, 112 5, 782, 842 5,47,S, l.-.l 4,841,133 Value. S941,86t) 1,233,838 977, 930 819, 672 1,177,260 1,277,249 1,498,264 .Average price per square foot. SO. 176 .195 .182 .179 .20 .23 .309 Other uses (value). Total, valua. $329,360 480, 576 568, 025 392, 9f)9 a 752, 643 nl,0<.>0,9T7 6 600,000 S.5,95.3,3« 6, 175, 17ti 5,700,737 4,9r>s,915 5.;>i8,'ii7 5.749,'>W 4,29(j,4W n Includes, in 1916, 4.990,007 school slates, valued at ?52,561. and 3,182,159 .square feet of Macklvwrd material, valued at $403,502; in 1917, 4,378,490 school slates, valued at $48,828, and 2,650,563 squuie feet of bicK^kboard material, valued at $413, l(a. b Figures for "Other uses" roughly estimated by Division of Public Works and C'onstructiuu Develop- ment. Table 4.5. — Lime burned and sold in the United Slates, 190S-191S. [Figures from U. S. Geological Survey.) Building lime 1 Total lime. Year. Quantity i (short 1 Value." tons). Average price , per toil. Quantity (short tons). Value.a Average price per ton. Average 1908-1912 3,336,036 3, 395, 390 3,380,928 3,622,810 4, 073, 433 3,786,364 3,028,000 813,3-36,893 14,i;4S,3tj2 13,2t«,9;iS 14,424.0:}o IS, 509; 305 23,807,877 24,224,000 $4.0i) 1913 1,358,099 1,103,433 1,149,733 1,509; 908 1,313,597 900,000 $6,011,856 5,0(18,375 4,89(S990 7,8.59,614 8,713,845 7,160,000 $4.43 4.36 4.26 5.21 6.63 7.% 4.07 1914 3.92 1915 S.iH 1916 4.54 1917 6.29 1918 6 S.M a Vivlue given represents the value of bulk lime f. o. b. at point of shipment and does not include weight or co-t of b.'.nel or p;ickage. 6 Figiues for 1918 estimated. T.\Bi.E 4(>. — Production of lime of all hinds in 1911 and 191S, by districts. (Short tons.] District. New England States and narrow area east of Hudson River in New York All of New Yorkwest of Hudson River K.islcra Pennsylvania, New Jersev, and Maryland Western Pennsylvania and West V irginia. . .". \" irginia, N orth Carolina, and South Carolina Ohio Michisau Illinois, lit li;;na, and Missouri Iowa, Mimiooli Montana, South iJakota, and Wisconsin. , Tennessee and Kcntuekj- t ; eor'.;ia, Alabama, and Florida Arkansas. Colorado, Kansas, Nebraska, Oklahoma, and Wyo- ming Texas and New Mexico ""!!!!! Arizona, California, Idaho, Nevi\da, Oregon, U»ah,'and"Was&- inst on Unilistr ibnted Total Total, 1917. 394, 85, 816, 502, 307, 479, 135, 436, 206, 102. 66, 27.082 52,742 144,976 25, 328 3,786,3tH Total, lyis. 314.360 70,410 704, 250 346, 270 255; 880 350, 570 .133,410 379, 820 133, 520 119,300 49,730 15,700 44, 710 92,700 17,250 3,028,000 Decrease mcrease (-). I'cr anf. -20 -18 -13 -39 -15 -27 - 2 -13 -35 + 15 -38 -M -14 -2t) ecoxo:mics of the coxstructiox ixdustry. 135 T.VBLE 47. — Prices on ic foot. Rela- tive price. Price per citbic foot. Rela- tive price. Price per cubic foot. Rela- tive price. Price per culiic foot. Rela- tive price. Average Julv 1, 1913 to .Tune 30, 1914. 1913 1914 1915 1916 1917 191S 191 Fir.st quarter. . . Second quarter. Third quarter.. Fourth quarter. 1918: First quarter. . . Second quarter. Third quarter. . Fourth fiuarler. SO. 6500 .C.500 .0500 .7000 .7500 .8000 .9000 .8000 .8000 ..sooo .8000 .9000 .9000 .9000 .9000 100 100 100 108 115 123 1.38 123 12:i 123 123 138 138 138 138 SO. 5000 .5000 .5000 .5000 ..5.500 .6000 .6700 .6000 .6000 .6(X)0 .6000 .6000 .6400 .7200 .7200 TOO 100 100 100 110 120 134 120 120 120 120 120 128 144 144 SI. 3500 1. 3-1.58 1.3500 1. 3.508 1. 4208 1. 5250 1. 9458 1. 4.500 1. 4;-33 1. 5.500 1. 6167 1. 7333 1. 9000 2. 0500 2.1000 100 99 100 100 105 113 144 107 110 115 119 128 141 152 156 ?1. 1200 1. 1200 1. 1200 1. 2033 1. 2100 1.3750 2. 0650 1.2.500 1.2.500 1. 5000 1. 5000 1.7500 2.0700 2. 1900 2.2500 100 100 100 107 lOS 123 184 \n 112 134 134 1.5« 1S.5 201 Table 48. — Prices on quarry products. [Market prices. First four series from price section, War Industries Board;last two scries from the Engi- neering News- Record.] Stone flag- Stone curt)- ing, 4 Inches thick and imder. Granite pav- Granite pav- ing blocks, 4 inches, and 1-mch blocks, 7 inches to 10 inches long, 4 inches to 41 inches wide. Paving stone basalt block 4 by 7 by 8 inches. Paving stone 5 inches, dressed. ging, sawed. ing blocKs. Market Cleveland, Ohio. Cleveland, Ohio. New Bedford, Mass. Chicago, Kansas City, San Fran- Cleveland, Cisco. Detroit. New York. Period. Price per cubic foot. Rela- tive price. Price per cubic foot. Rela- tive price. Price per M. Rela- tive price. Price per square yard. Per sqiiare yai-d. Average July 1, 1913, to June 30, 1914 1913 «0.;5600 .3600 .3600 .3600 .3700 .4000 100 100 100 100 103 \\\ SO. 3000 .3000 . 30OO .3000 .3400 .4000 .5.375 .4000 .4000 .4000 .4000 ..5000 ..5.500 .5500 .5500 100 100 100 100 113 133 179 133 133 133 133 166 183 183 183 840.0000 40.0000 40. 0000 41.. 5000 41.5000 50.0000 50.0000 50.0000 50. 01)00 50. 0000 60.0000 50.0000 50. 0000 50. 0000 50.0000 100 100 100 104 104 125 125 125 125 125 125 125 125 125 125 $2.0300 2. 0900 1.9700 1.9200 1.9200 2.0800 2.1300 2.0800 2.0800 2.0800 2.0800 2.1300 2.1300 2. 1300 2. 1300 100 102 1914 97 95 95 102 105 102 102 102 102 105 10.5 105 105 1915 1916. $57.60 57.75 57.75 57.75 57.75 57.75 57.75 57.75 57. 75 57.75 57.75 57. 75 57.75 $2.37 1917. 2.48 1918 .5875 ' IRi 2.70 1917: First quarter Second quarter... Third quarter Fourth quarter. . . 1918: First quarter Second quarter. . . Thirdqnarter Fourth quarter. . . 1919: .4000 .4 stone.a Buildinc: granite. a Building marble. a Building slate. b' All building stone. & 1913 . 1914. 1915. 1916. 1917. 1918. 1917: First qutirlcr . . . Second quarter . Third quarter. . Fourth quarter. 1918: First quarter. . . Second quarter . Third quarter. . Fourih quarter. 100 100 100 105 1-13 lOS 140 140 140 153 160 160 160 193 100 100 110 110 120 134 120 120 120 120 120 128 144 14! 100 100 100 110 117 137 117 117 117 117 137 137 i:'.7 137 95 99 93 105 131 167 125 128 133 141 145 1.54 l'J2 179 100 100 107 127 154 125 126 128 133 135 140 159 164 1919: First quarter. a Figines of price section, War Industries Board. b Figui-es computed by IJivision of Public Works and Construction Pevelopment. SECTION XI. PORTLAND CEMENT. Introduction. The growth of the Portland cement industry in the United States since the year 1870 is very well indicated by the production figures given below. The average mill price per barrel for each period is given also. These figures show that the increased production was accompanied by a decrease in prices. The general decrease in prices is probably largely responsible for the greatly increased use of cement in all kinds of construction. The production figures follow : Porilund cement in (he United States.a Period. Quantity (barrels). Average price per barrel. Period. Quantity (barrels). Average price per barrel. 1870 1879 82,000 1,477,000 17, 282, 834 333,832,412 $3.00 1.98 1.60 .99 1910 76,549,951 78,.528,(i37 82, 438, 096 $0. 891 1880-1889 1911 .844 1890-1899 1912 .813 1900-1909 a Figures from the U. S. Geological Survey. Natural and puzzolan cements have decreased in importance in this country until, at the present time, they are insignificant as compared with Portland cement. In 1880 the production of natural cement amounted to 2,030,943 barrels, the average value being 85 cents per barrel. In that year the Portland cement produced amounted to 42,000 barrels, with an average value of $3. In 1917 138 KCOXD.MKS OF THi; COXSTKUCTION INDUSTRY. jiaturiil iiiid (>u/,z()laii cements coinl)ined amounted to 639,450 bairols, or less than 1 per cent of the amount of Porthind cement pro- duced in that ^ear. The av^erage value oi" natural and puzzolau cements in 1917 was 68 cents per barrel. In the year 1900 imports of cement amounted to about 14 per cent of the domestic production of cements of all kinds. In 1910 the imports amounted to about one-half of 1 per cent of the domestic production, and since 1910 the imports have been so small as to be practically negligible. Exports oJ" Portland cement in 1900 amounted to a little over 1 per cent of the total quantity produced. In 1917 thc}^ amounted to 2.8 per cent of the total cjuantity produced. While the amount of exports has grown somewhat, still the export trade is not yet sufTi- ciently large to materially affect prices of Portland cement in the A mcrican markets. Portland cement produced in the United States, 1913-1918. Table 52 gives the figures on production, value, and average price per barrel of Portland cement by years from 1913 to 1918. These figures show that production in 1918 was 11 per cent under the average for the preceding 10 years and 23 per cent under the figure for the year 1917. The stocks on hand at the mills at the close of the year 1918 amounted to 10,594,000 barrels, w^hich is practically the same as the a%'erage figure for the preceding five yeai's. Consequenth', the decrease in consumption amounted to practically the same as the decrease in production. The decline in production in 1918 varied in different sections of tlic country. In New England the decrease from 1917 was about 25 per cent, in the Middle Atlantic States about 18 per cent. In the Southern States east of the Mississippi the production was practi- cally the same as in 1917. In the Central West production dechned 28 per cent; in Louisiana and Arkansas, 9 per cent; in the Northwest, 30 per cent; in the Southwest, 21 per cent; in the Eocky Mountain States, 30 per cent; and on the Pacific coast, about 21 per cent.^ The fact that a high level of production was maintained in the Southern States in 1918 was probably due to the demands for various kinds of construction work for the Government. Mil! prices on Portland cement. As has been pointed out, Portland cement declined from $3 per barrel in 1880 to 81 cents per barrel in 1912. During this period practically all other materials advanced in price. Tlie decline in cement prices has been largely due to the development of large- scale production with improved methods. I These statemeuts are based on figures fiiniished by the Portbud Cement Association. ECOXOMICS OF THE COXSTItUCTlOX INDUSTRY. 139 The production table (Table 52) gives the yearly average price per barrel. These figures are based on net prices f. o. b. plants. They give the most representative figures for the country as a whole. The 1918 average price, $1.59 per barrel, was the highest yearly- average recorded since 1898. Table 53 gives price figures of the United States Geological Survey by districts. Index figui'es based on these prices have been com- puted. The average for the years 1913 and 1914 has been taken as the base, in order to make these index figures comparable with those furnished by the price section of the War Industries Board, for which the average for the year previous to July, 1914. has been taken as the base. This table shows a relatively greater increase in the eastern part of the United States than in the West, although actual prices have continued higher in the West than in the East. The averages of the index figures for districts I, 2, 3, 4, and 6 are given for the pm-pose of comparison with the average figures of the price section of the War Industries Board for the Eastern and Middle Western States. These figures are seen to be in ver\- close agreement. This average for the Eastern and Middle Western States has been chosen by the price section of the War Industries Board as tvpical of the whole country. The index figures are shown to be in close agreement with the averages for the whole country, as obtained from the figures of the Geological Survey. Table 54 gives quoted prices and index numbers from figures of the price section of the War Industries Board. One price series on natural cement is included. These are f . o. b. plant prices. Prices for the first quarter of 1919 have been, in general, the same as for the last quarter of 1918. Reductions in the net price (i. e., not includmg the charge for sacks, which is refunded when the sacks have been returned) of 15 cents per l>arrel in the East, 10 cents per barrel in the region suri'ounduig Pittsburgh, and 5 cents per baiTel in the region contiguous to Chicago, were made in the month of April. Market prices on Portland cement. Table 55 gives market prices on cement. One series of mill prices is mcluded also. In taking prices from trade journals some confusion is apt to arise as between v/holesale prices (carload lots to dealers) and retad prices (dealers' prices delivered on the job). It has been considered advis- able in this report to give only wholesale prices. Most cement is sold in cloth sacks, four to the barrel. Tlio market quotations usually include a charge for the sacks, the amoimt of this charge being refunded when the sacks are returned to the mill. Ou 140 KPONOMICS OF THE CONSTRUCTION INDUSTRY. tlie average the consumer loses about onc-ciglilh of tlic bag refund, owing to loss and damage of the bags. It has been considered best to report in these tables net prices (i. e., with the bag refund deducted from the quoted prices). In most markets the bag charge was 40 cents per barrel up to September, 1918; from September, 1918, to March, 1919, inclusive, it was SI per barrel; and in April, 1919, it was reduced to GO cents. Government control. In 1918 the fuel supply of the cement mills was restricted to 75 per cent of normal by the Fuel Administration. Cement prices to be paid by the Government on Government orders were fixed by the price-fixing committee of the War Industries Board in 1917 for the remainder of that year and the first four months of 1918. They were again fixed on May 4, 1918, and on August 23, 1918, for the remainder of the year. The August 23 schedule gave the same net prices as the May 4 schedule. These price schedules did not hold for private purchasers. The prices (per barrel, exclusive of packages'* adopted by the price-fixing conmiittee are given belov/ : Place. Hudson, N. Y Lehigh Valley, Pa.. Pittsburgi), Pa Northampton, Pa... Universal, Pa FordNvick, Va Klngsport, Term Richard City, Tenn. BcUevue, Mich Mitchell, Ind , Buffm?:ton, Ind La Salle, 111 , StecUou, Minn M;tson City, Iowa HiumiI)al,"Mo lola, Kaiis HaiTys, Tex , Ilouston, Tex San Antonio, Tex... El Paso, Tex New Orleans, La 1917 and first 4 months, 1318. Last 8 months, 191S. SI. So 1.75 1.75 1.70 1.65 1.05 1.80 1.70 1.00 1.70 1.70 1.70 1.70 1.75 1.70 .L.'iO 1.95 1.95 i'b.ce. Portland, Colo Trident, Mont Devil's Slide, Utali . . . Brigham, Utah Salt Lake City, Utah. Irvin, M'ash Concrete, Wash Se;ittle, Wash Tacoma, Wash Portland, Oreg Oswego, Oreg Stockton, Calif OakLand, Calif San Francisco, Calif... Santa Cruz, Calif Santa Barbara, Calif. . Los Angeles, Calif Cement, Calif Davenport, Calif Crestmore, Calif 1917 and fir.-t4 mviit^s, 1918. Last S months, 1918. SI. 70 1.70 1.70 l.'JO 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 SI. 7.5 1.90 1.90 1.90 1.90 1.95 L95 2.00 1.95 1.95 1.95 Cost of production. It has been stated that the prices of May 4, 191S, were fixed after considerable investigation by the Federal Trade Commission. In arguing for a higher price the War Service Committee of the cement industry maintained that manufacturers of cement w^ere operating at three-fourths normal capacity and, that, consequently, the over- head costs were relatively greater than in times of normal production. They further stressed the increased labor and fuel costs. The indus- try apparently adopted a policy of protecting all its members, so ECONOMICS OF THE CONSTRUCTION INDUSTRY. 141 that the prices were fixed at a high enough figure for all producers to operate. In the month of March, 1919, a producer in Michigan stated that prices would come down when the cost of labor and fuel lessened. At the same time a California firm stated that its prices had not increased as much as its production costs, claiming that wages had increased 75 per cent in the past two 3T-ars. A Missouri producer claimed to have lost money every month since August, 1918. A Texas producer stated that prices were not due to drop, owing to high prices of commodities in general, high wages, and high cost of fuel and supplies. The price concessions in April, 1919, may have been made in antici- pation of increased production, which would lower the relative amount of overhead charges. The cost of fuel had declined somewhat at that time. On the whole, the cement industry has steadfastly maintained its inability to make large concessions on prices. Concerning cement, the report of the investigatuig committee of the Illinois State Legislature, published May 6, 1919, contained the following statements: The commission encountered grave difficulties in investigating the cost of manu- facturing cement. The Lehigh Cement Co., operating 14 cement plants throughout the country, through its Aace president, stated that the actual cost of manufacturing cement per barrel v/as $1 .44(j6 in 1918 and $0.(5253 in 1913 ; that the profit per barrel in 1918 was $0,111 and in 1013 was SO. 1967; that the profit on invested capital in 1918 was 5.92 per cent and in 1913 was 11. (>6 per cent. This company offered to submit all of its cost sheets and audits to any reliable certified accountant apptointed by the commission. The records of this company are kept at Allentown, Pa., and it would require several months to make an examination to ascertain the cost of produc- tion of cement for the years named in the resolution. It took representatives of the Federal Trade Commission three months to examine the books of this company. An Illinois cement company presented its cost sheets and audits for the year 1918. It also furnished the conmiission with its monthly reports for the year 1918, sworn to, and being exact copies of the same reports furnished to the War Industries Board, These reports contain an itemization of the elements of production cost of cement, stating the total cost of the respective items, and the cost of each item per barrel. The table is as follows: Actual cost of plant operating at 4,000 barrels, year 191S. Summary-: Total number of men 333 Which equals 12 barrels cement per man employed. Mill superintendence and labor (including power labor) $0. 2594 Quarry labor 1085 .3679 Quarry: Labor for raw materials, including shale 1085 Dynamite 0510 Power and operation material 0223 . 1818 142 ECONO.MKS OF THE CONSTRUCTION INDUSTRY. Manufacturing cost \nT liurrt-l, iucUiding packmfi: Raw material $0. 1818 KupcriutciKk'nce and mill lalxir 2534 l'"uel for diviuif ". 0033 Kiln fuel . : . 2201 P< )wer coal 1342 (rypsum 0299 Ki'jKiirs and incidentals 0920 Oil and Avast.* 0007 Deprociation 1 l-i9 1.0413 Administration and o-s'orhead expenses: Executive ollicers (^including general officers) 1246 Insurance 0175 Selling 079S Taxes 00:1-5 Interest 0137 Legal 0044 Spec, mine expense 0599 Rock depletion -• 0092 Commissions 0205 Package expense 02^6 Discounts 0348 Allowances 00^*6 Consignment expense 0045 Interest, §4,000, 000, at 7 per cent 2126 . 6245 Total manufacturing, including packing and administration — 1. 6658 Freight rates on cement. The rate table (Table 50) gives some representative rates on cement together with percentages of increase. The increase of freight rates accounts for the rehitively greater increase in market prices than iu f. o. b. plant prices. Talle 52. — Portland cement produced in the United States. Year. Average, 190S-1912.. 1013 1914 191") 1916 1917 Average, 1013-1917 191S. . . Quantity (barrels). 70, 716,. 145 92,097,1S1 S8, 230, 170 So, 914, 907 91,521, 19S 92,S14,202 ;Ki. ll'i,.522 -!.6.32,000 Vaiue.o 59,575,515 SO. S43 92,-557.617 S1,7S9;36S 73. SS6. S20 100,947.*S1 125,670,429 94, 970. 423 6113,S94.S«> Average price MT tiarrel. 1.005 .927 .831 l.Wi 1.354 1.054 1.59 a Values btised on soiling price olcemeut in bulk at the mills, iucluding cost of labor aud packing, but Q;)t tlio value of the sacks or barrels. i> Kslimatcd. ECONOMICS OF THE CONSTRUCTION INDUSTRY. 143 Table 53. — Mill prices on Portland cement, hij districts. [Average prices per barrel f. o. b. plant, (Quotations fiom U. S. Geological Survey.] District 1. Lehigh Distiict (east- ern Pennsyl- vania and western New Jersey. 2. New York State. 3. Ohio and western Peim- 4. Michigan and north- 5. Southern Indiana and sylvania. Indiana. Keuiucky. Period . Price per barrel. Rela- tive price. Pi-ice per barrel. Rela- tive price. Price per barrel. Rela- tive price. Price per barrel. Rela- tive price. Price per barrel. Rela- tive price. Average, 1913 1914 1913. SO. 824 .838 .809 .699 .944 1.220 1.532 100 102 98 85 115 148 186 SO. 925 .934 .917 .766 1.027 1.304 1.616 100 101 99 83 111 141 175 10. 938 1.000 .876 .3.55 1.113 1..382 1.500 100 107 93 91 119 147 160 $0,995 1.030 .960 .944 1.168 1.427 1. 6.55 100 103 97 95 117 143 166 $0. 802 1.008 .717 .703 1.106 1.352 1.598 100 117 1914 83 1915. 81 1916. . .. 128 157 1918. 185 District 6. Illinois and north- western Indiana. 7. Maryland, ^'il•ginla, and West Virginia. 8. Tennes.see, Alabama^ and Georgia. 9. Iowa, Mi.ssouri, and Minnesota. 10. Nebraska, Kan.sas, and central Texas. Average, 191.3-1914 SO. 967 1.002 .932 .907 1.056 1.367 1.466 100 104 96 94 109 141 152 «0.871 .865 .877 .816 1.009 1.205 1.029 100 99 101 94 116 145 187 SO. 917 .899 .935 .756 .980 1.233 1.337 100 98 102 82 107 134 146 $1,007 1.074 .940 • .882 1.187 1.485 1.646 100 107 93 87 118 148 164 SO. 997 1.063 .9:50 .872 1.168 1.453 1.649 1(X) 1913 1914 1915 1916 1917 191S. . 107 93 87 117 146 165 District 11. Rocky Mountain States— Col- orado, Utah, Montana, and western Texas. 12. Pacific Coast States- California, ■Washington, and Oregon. Average for United States. Average, districts 1, 2, 3, 4, 6. Eastern and Middle Western States.a Average, 1913-1914 1913. 1914 1915 1917 191S SI. 312 1.319 1..306 1.289 1.527 1.664 1.818 100 101 99 9S 116 128 138 SI. 369 1.461 1.277 1.375 1.458 1. 399 1.899 100 107 93 101 107 102 139 «0.966 1.005 .927 .860 1.103 1.354 1.590 100 104 96 89 114 140 165 100 103 97 90 114 144 168 $0.9895 .9999 .9537 .8934 1. 1092 1. 4413 1.6671 100 101 96 90 113 146 16i( 'a Price section, War Industries Board. Base: Average, July 1, 1913, to June 30, 1914. 144 ECONOMICS OF THR f CONSTRUCTION INDUSTRY. Table 54. — Mill j/rices on Portland c/nnenl. [Average net prices f. o. b. plant. Quotations from price section, War Industries Board.] Market . Period. 1. New York and New England. Quoted price. Rela- tive pncc. 2. New England and Middle States. Quoted price. Rela- tive price. 3. Ohio, Indiana, Illinois, and Michigan. Quoted price. Rela- tive price. 4. Northern Ohio. Quoted price. Relative price. July 1, 1913, to June 30, 1914 1913 1914 1915 1916 1917 1918 • 1917: First quarter Second (|uartcr Third quarter , Fourth quarter , 1918: First quarter Second quarter , Third quarter Fourth quarter , Market July 1, 1913, to June 30, 1914 1913 1914 1915 1916 1917 1918 1917: First quarter Second quarter Third quarter Fourth quarter 1918: First quarter Second quarter Third quarter , Fourth quarter $1.0808 1.0442 1.0500 .8142 1.0342 1.3358 1.6733 1. 18r.7 1.40:53 1.4100 1.3433 1.5300 1.6333 1.7300 1.8000 100 97 97 75 96 124 155 110 130 130 124 141 151 160 166 SO. 9000 .9(KX) .9000 .8292 1.0917 1.4750 1.8333 1.4000 1.5000 1.5000 1.6330 1.9000 1.9000 1.9000 100 100 100 92 121 164 204 136 167 107 167 181 211 211 211 $1.0042 1.0408 .9600 .9617 1.2000 1..5725 1.7633 1.3867 1.6033 1. 6.567 1.6433 1.7000 1.7567 1. 7667 1.8300 100 104 96 96 119 1.57 176 138 160 165 164 169 175 176 182 $1.0270 1.0406 . ly as possible to the various other sets of figures which use the year preceding July, 1914, as base. These figures have been combined , weighting fa ctors propor- tional to the average production of each commodity for the years 1913 and 1914 being employed. In computhig the quarterly figm'es for 1917 and 1918 it has been assumed that the fluctuations would bo proportional to the fkictuations indicated by the average of all the indices computed ])y the price section of the War Industries Board. 148 ECONOMICS OF THE CONSTRUCTION INDUSTRY. 'i'hc liiial (ijjjuie, I7ii, is pi-obably a fairly accuiate index of the general price level of this gioup, based on f. o. b. ])hint prices throu<.!^hout the country. The iruU^K foi' the first quarter of the current year would probably be about 1 75. Increased production costs. Producers of sand, gi'avcl, and crushed stone maintain that their prices have not risen out of proportion to the rise in production costs; that production costs are not likely to decrease ; and that their prices are rather more likely to increase somewhat than to decrease. It is of some interest to present some figures on production costs. Actual production costs and prices ha^e been furnished by certain producers. The figures given below are averages from 28 plants in various localities in the Central States : Prices and production costs of sand and (jravel. Period. Average price i)er ton. Average production cost per ton. 1916 CerUs. 45.4 60.4 65.0 Cents. 34.5 1918 .. . . 58.5 1919 (first quarter; 58.5 lncre;xse, 1919 over 191C Per cent. 43 Per cent. 70 These figm'es would indicate that the 1918 prices were too low to allow for a sufTicient profit to the producers. It is impossible to state that these figures indicate the situation of the industry as a whole. With the cooperation of Mr. E.. Guy Sutton, secretary of the National Association of Sand and Gravel Producers, some interest- ing figures have been obtained from 93 representative producers whose plants are located in all parts of the country. As a result of averaging the figures obtained from questionnau'es sent out, it is possible to present some figures wliich may be taken as fairly representative of the industry as a whole. According to these figures administrative expenses (including costs of office supplies, rent, postage, salaries of office force, etc.) were 70 per cent gi-eater in 1918 than in 1913; selling expenses (including salaries and expenses of salesmen, etc.) were 58 per cent greater; operating expenses (including lal)or, salaries of superintendents, drayage, fuel, cost of repairs and supplies, etc.) were 105 per cent greater; replacement costs (including cost of necessary machinery, materials, and labor) in the first quarter of 1919 were estimated to be 1 14 per cent gi'eater than in 1913. ECONOMICS OF THE CONSTRUCTION INDUSTRY. 149 According to these 93 producers, iii normal times the labor cost is 41 per cent of the total production cost; while in 1918 it was 52 per cent of the total. In normal times the cost of fuel is 12 per cent of the total; in 1918 it was 16 per cent. The figui'es indicate an average rise in wages of 95 per cent from 1913 to 1918, and an increase of 105 per cent in the cost of fuel. Of the expenses discussed above, administrative expenses, selling expenses, and replacement costs come under the classification of overhead charges. With an increased volume of business these might become relatively smaller in proportion to the total produc- tion cost. The cost of fuel has declined. However, with wages permanently increased, the total cost of production seems likely to remain fairly close to the present figure. If it be true that 1918 prices were too close to the cost of production to permit a reasonable margin of profit, then the contention of the producers that, in gen- eral, prices can not be cut in 1919 seems fairly well justified. The following table gives an itemized statement prepared from actual figures of production costs in 1916 and 1918 in a representa- tive plant: Cost of production of sand and gravel in a representative plant. Item. 1916 Ton cost. Per cent of total. Labor , StriDping Fuel Supplies and repairs Depletion Depreciation Fixed charges Total $0.0756 .0235 .0345 .0:M7 .0067 .0124 . 0582 .2356 32.1 10.0 10.4 14.7 2.8 5.3 24.7 100.1 Ton cost. $0,163 .040 .043 .027 .010 .025 .099 .407 Per cent of total. 40.1 9.S 10.5 6.6 2.7 6.1 24. 2 100.0 Increase. Per cent. 107 79 75 22 102 70 Increases in elements of production costs, by regions. According to the figm-es furnished by the 93 producers mentioned above, administrative expenses, selling expenses, operating expenses, and replacement costs increased most in the Middle Atlantic States (New York, New Jersey, Pennsylvania). Operating expenses, however, show the same increase in the Southern States (Virginia, South Carolina, Georgia, Alabama, Ken- tucky, and Tennessee) as in the Middle Atlantic States. This is accounted for by the fact that the wage increase was greatest in the Southern States, with the Middle Atlantic States coming second. The Southwestern States (Missomi, Kansas, Oklahoma, Texas, Ai-kansas, and Louisiana) show the gi-eatest increase in cost of fuel, wdth the Middle Atlantic States second. 150 j:c'onomic;s of thk coNSTRrcTioN ixdustky. Ill general, costs, as reported by these producer.^, increased less in the West than in other sections. Freight rates on sand, gravel, and crushed stone. One of the important elements in the increase of cost of sand, jnavel, and crushed stone in constmction has been the increase in freight rates — the freight being a very large item in the final cosf. Since the beginning of the year 1919, the producers, through their organizations, made a determined effort to secure from the Railroad Administration some concessions on the rates. After careful consideration of the question the Railroad Adminis- tration fomid itself unable to meet the demands of these producers so far as rates to the general public were concerned. A conces- sion was made in the case of such materials for use in the construc- tion of public works by Federal, State, and municipal governments. This concession was made in an order, already referred to in Section VI, providing for a reduction of 10 cents per net ton on sand, gravel, and crushed stone, \A'ith a minimum rate of 40 cents per net ton, except in cases where the regular commercial rates are less than that figure, in which cases the regular rates still hold. As long as there seemed to be grounds for hoping for a general reduction in rates on these materials there seemed to be a promise of a reduction in ultimate prices to the public. At present, except in the case of public projects, there appears to be no chance of a reduc- tion in rates or prices in general. Tables 62 and 63 give examples of freight rates on sand, gravel, and ciTished stone from producing points to various representative markets. These should be considered as illustrations rather than as indications of the general rise in rates for the vdiolo countiy. The number of rates given is scarcely sufficient to use for an^-thing more than illustration. Somewhat more representative figures on sand and gravel rates have been fm^nished by the National Ajssociation of Sand and Gravel Producers. These figui'es are the results of a questionnaire sent out by the association early in March. They cover the increases in rat-es in effect in March, 1919, over those in effect in March, 1918, the increases having been effected by General Order No. 2? of the Rail- road Administration in June, 1918. An average of 1,951 rates shows an increase of ol x>or cent. This is perhapi- a fairly representative figm'e. It is true that over half the rates included in the average were between points in the Central West; but the average for this section is practically the same as for the remainder of the country. ECOiSrOMICS OF THE CONSTRUCTION INDUSTRY. 151 Table 57. — Production fifjures on sand , (jravel, and crushed stone, ]9} -1-1918. [Figures from U. S. Geological Survey. Short tons.] Building sand. Gravel. Crushed stone. Year. Quantity. \'^alue. Av- erage price per ton. Quantity. ^"alue. Av- erage price lier ton. Quantity. Value. Ar- erag» price per ton. 1913 1914 1915 1916 1917 191SO 2-5,397,383 24,003,962 22,921.426 27,193,462 2-5,374,987 25,-500,000 $8,007,949 7,688,774 6,884,267 8, 569, 675 9, 837, 688 11,000,000 $0.31 .32 .30 .31 .38 .43 40,861,694 41,329,287 40,661,314 46, 127, 754 35,573,819 27,000,000 S9, 109, 663 $0.22 9,721,637 .23 9,948,-516 .24 12, 220, 146 . 26 13, 508, 189 . 37 12,000,000 .44 48, .502, 501 49,364,476 49,(X)S,7()7 48,075,-581 40,285,377 33,0;}4,000 S2«,.592,.536 30,161,766 29, 173,4nS 29,462,9-52 29,065,-509 32,843,000 $0. -5) .61 .60 .61 .72 a Quantities and values for year 1918 estimated. Table 58. — Prices on sand and (jravel. [Figures from private sources. Prices per ton f. o. b. plant.] Place. Maine (1 series) , Eastern Massachusetts (average 2 series) New York City (1 series) Western New York (1 series) Western Pennsylvania (average 2 series) New Jersey (1 series) West \u-ginia (1 series) Eastern Maryland (1 series) Virginia ( 1 series) Ohio (average 2 series) Kentucky ( 1 series ) Tennessee (average 2 series) Indiana (average 19 series) Northern Illinois Michigan Iowa (average 21 series) , Wisconsin (average 7 series) Northern Minnesota (1 series) . .. Nebraska (1 series) Missouri (average 2 series) Kansas (average 2 series) Oklahoma ( 1 series) Central Texas (average 2 series) . Colorado (1 series) Western Washington Average Sand. 1916 price. 1918 price. SO. 50 .38 .43 .50 .93 .35 .95 .60 .60 .57 First quarter 1919 price. $0.50 .33 .43 .50 .93 .35 .75 ..50 -50 .65 .85 .64 .46 .40 .68 .67 .60 .56 . 75 .58 .58 .60 .50 .58 Increa.=;e, 1919 over 1916. Per cent. 11 38 Gravel. 191G price. $1. 05 .78 "".'zh' -43 .(>0 -.50 1.00 .90 .46 .44 .53 .55 .30 .55 .49 .35 .47 .65 .35 .40 .44 1918 price. .?1.25 1.10 .50 .83 1.40 .95 1.50 1.20 .65 .75 .63 .40 .75 .63 .56 .56 .75 .53 .00 .62 .90 .75 First quarter 1919 pric-e Increase, 1919 over 1916. Per cent. SI -25 19 1-05 .50 .83 1.20 .75 1.30 .95 .70 .75 .79 .63 .40 .58 .60 .71 .90 .70 95 UTi) 5,) 30 5 -54 7a 49 15 :« 3.) 37 71 1') 15 (W 52 EfJONOMICS OF THE CONSTRUCTION INDUSTRY. T.\DLK 59. — Sand and firnvel prices. I Trices f. o. b. plant. Quotations from price section, War Industries Board.) Sand. Sand, building, core, engine, and Sand, building and Sand and gravel, Clrav el. ?lass, grinding. locomotive. building. Market Eastern United States. Chicago. -Mton and surrounding district. Virginia and Ohio. Erie, Pa. Unit Short ton. Short ton. Short ton. Short ton. Short ton. Period. Quoted price. Rela- tive price. Quoted price. Rela- tive price. Quoted price. Rela- ti\-e price. Quoted price. Rela- tive price. Quoted price. Rela. tive price. July 1 , 1913, to June 30, 1914. . 191.3 10.6002 . 5973 .5993 .6003 .6-178 1.0917 1.4796 .9317 1.0360 1.1427 1.2565 1.4540 1.4540 1.4827 1.5276 100 99 100 100 108 182 246 1.55 172 190 209 242 242 246 254 SO. 1701 .1620 .1677 .18.54 .18.57 .2713 .3227 .22fX) .2466 ..3000 .3186 .3280 . 32.33 .3198 .3198 100 95 98 109 109 159 190 129 145 176 187 193 190 188 188 $0.2925 .2763 .2979 .3067 ..%394 .4465 .6388 .4217 .4094 .4617 .4933 .6367 . 6233 .6517 .6433 100 94 102 105 116 1.53 218 144 140 158 169 218 213 223 220 $0..3500 . 3.500 ..3.500 . 3.500 .3500 . 4.5IX) .7500 .4500 .4500 .4500 .4500 .7500 .7500 .7500 .7500 100 100 100 100 100 129 214 129 129 129 129 214 214 214 214 $0.6500 .6500 .6500 .6642 .7083 .7708 1.0375 .7333 .7500 .7,500 .8500 1.0000 1.0000 1.0000 1.1500 100 100 1914 100 1915 102 1916 109 1917 119 1918 160 113 Second quarter 115 115 131 1918: 154 Second quarter 154 154 Fourth quarter 177 Table 60.- [ Prices f. 0. b. plant. -Prices on sand, gravel, and crushed stone. Quotations from price section. War Industries Board.] Commodity. Sand and g^a^ el railway ballast. M;ii'ket Ohio. Crushed limestone railway ballast. Pennsylvania. Crushed trap rock railway ballast and road metal. Pennsylvania. Crushed granite, 5-inch and -'.-inch. Chicago, Detroit, and Cleveland. Min- eral aggre- gate.' United States. Short ton. Short ton. Short ton. Cubic yard. Period. Quoted price. July 1 , 1913, to June 30, 1914 1913 1914 1915 1916 1917 1918 1917: First q uarl er Second quarter Third q uarter Fourth quarter 1918: First quarter Second c| uarter Third quarter Fourth quarter $0. 1650 .1650 .16.50 .1650 .1650 .20(X) .2250 .2000 .2000 .2000 .2000 .2250 .2250 . 22.50 .2250 Rela- tive price. I Quoted price. Rela- tive price. Quoted price. 100 100 100 100 100 121 136 121 121 121 121 136 136 136 136 $0.6800 .6800 .6X00 .6.S00 .7325 .8167 1.0417 .7500 .8167 .8500 .8500 .8500 1.0167 1.1500 1.1500 100 100 100 100 108 120 153 110 120 125 125 125 ■149 169 169 SO. 6700 .6475 .6633 . 60.S3 .6683 .8275 1.1125 . tKS.33 .8100 .9167 .9000 .9667 1.1233 1.1233 1.2367 Rela- tive price. Quoted price. 100 97 99 91 100 124 166 102 121 137 134 144 168 168 1S.5 $1.2500 1.2.T00 1.2500 1.2500 1.2700 1.3000 1.3000 1.3000 1..3000 1.3000 1.3000 1.3000 1.3000 1.3000 1.3000 Rela- tive price. Com- posite index. KX) 100 100 100 102 104 104 104 104 104 104 104 104 104 104 100 98 102 101 104 129 167 118 125 134 140 161 165 168 173 1 Composite figure computed by T. S. Holden from all figures obtainable. E(JOXOMICS OF THE CONSTRUCTION INDUSTRY. 153 T.\iiLE 61. — Wholesale market prices on sand, gravel, and crushed stone. [ Prices per cubic yard in carload lots. Quotations from the EngiDeering News-Record.] Market New York Chicago. St. Louis. Date. Build- ing sand. Gravel, IVincli. Crushed stone, li-inch. .sand.i IHnch. Crushed ' Build- stone, ing li-inch- . sand. Gravel, IJ-inch. Crushed stone, IJ-inch. April 1913 $0.50 .50 $0.85 .90 .85 .80 1.20 2.00 2.00 $0.90 1.00 .85 .85 1.10 1.60 1.70 April, 1911 i \pril 1915 April, 191 6 .15 .50 1.25 1.25 $0. 90 $0. 90 1.10 1.40 1.50 1.50 1. 10 2. 00 80.90 1.40 1.50 1.60 SO. 60 i $0. 70 .91 1 .85 1.21 1.21 1.68 1.76 $1.00 Anril, 1917 1.25 April. 1918 1.35 April, 1919 1.35 Market - Cincinnati. Dallas. .''an Francisco. April, 1916 1 SO. 80 1.00 1.00 $0.90 1.00 1.00 $1.25 April, 1917 1 SO. 95 I 1. 75 $1.25 SI. 00 1. 10 2. 00 1.35 ; 2.2.5 SI. 36 1.51 2.25 1.00 April, 1918.. I 1. 65 2.85 I 1.65 -..85 1.00 April, 1919 1.15 1.15 1.15 ' Figure for preceding month. - Figure from " Rock products." T.\Bi.E 62. — Freifjht rates on sand and (jrurd. [Per 100 pounds.] Gravel. From Rhinecliff, N. Y Round Lake, N. Y Van Hoesen, N. Y Wemple, N. Y '< do iSouth Amboy, N.J do Corsackie, N. Y ' do Hemp.stead, N. Y do Marlboro, N. Y { do. Mechanicsville, N. Y do. New Hamburg, N. Y do Average increase Benton Harbor, Mich Chicago, 111 . Elgin, 111 I do Michigan ("it v, Ind . Ottawa, 111.." Rockdale, 111 Average Increase. Crystal City, Mo... Drake, Mo East J^t. Louis, 111. Klondyke, Mo Masselie, Mo Pacific, Mo Average increase. Grand Prairie, Tex. Lindsav, Tex Waco, Tex Average increase. Plca.'^nnton, Calif Antioch, Calif (^ampboU, Calif Niles, Calif Oakland, Calif Pacific Grove, Calif. Average increase. .do. .do. .do. St. Louis, Mo. do do do do do Dallas, Tex. do do San Francisco, Calif. do do do do do $0.0125 .015 .0125 .025 .036 $0. 025 .02.5 .025 .035 .0.50 P(r cent. 58 $0.01 .02 $0. 0.35 .015 .02 .03 .01 .035 Pir cent. 50 80.0145 I $0,025 .028 .015 .028 I .015 Per cent. 64 $0.06,5 .02 .02 .015 .02 .17 Per cent 17 $0. 07 .03 .03 .025 .03 .18 SO. 075 .015 .020 .025 .036 SO. 03 .025 .035 .035 .050 Per cent. 60 $0.01 $0,035 .045 .02 .04 .04 .035 Per cent. 50 SO. 014 I SO. 025 .•028 .015 .028 I .045 7Vr cent. 64 $0. 065 .02 .02 .015 .02 .17 Per cent 17 S0.07 .03 .03 .025 .03 .18 Source: Interstate Commerce Commission. 154 ECCtXoMIC'S OF THH COX.STRUCTIOX JNl>USTi:Y. Ta ill K Go. — Freiyhl rales on crushed sUnn'. I Per net ton.l Froni- To- SiifTorn,N. Y New York Nvack, N. V ' do .Kifhinoiul Hill, N. Y | do Nrw I)iirhaiii, N.,J j do Mf'iidcii, Conn .....do Midillelield, Conn do Mount Carinel, Coim i do KasI Ilaven, Conn do Average decrease, 4.2 i>er cent. KhnhnrsK III Chieaao, III Lenionl , III ' do .Vverage increase, 40 per cent. Sacramento, Calif. Oakland, Calif T)i(' 1.30 2. art raent . . . Pot-iualcing department . Yai'd labor 23. 5 20.0 10.0 20.5 15. 5 34.5 30.5 27.5 33.3 27.5 4o.S 52.5 71.9 63.4 77.4 Average increase . tvj. 4 WIRE, OBSCl-RED, AND ROUGH-ROLLED GLAS.S Occupation. Average earnings per bom- (cents). Per cent Of 1914 1917 1914-1917. Machine tenders 24.2 23.7 20.4 26.5 37.0 18.2 37.0 35.5 29. S 37.5 47.0 30.3 52.7 Furnace chargers 49.7 Batch mi.xers . - 46.1 Ladlers 41.5 Cntters 27.0 Common laborers 68.3 Average increase . 47.2 ECONOMICS OF THE COaSTSTRUCTIOX INDUSTRY.- 159 The average of all these increses is 51.8 per cent. These figures, it should be noted, show the increase to 1917 only. Some further figures on increases in production costs have been furnished to this division by two important manufacturei-s of plate glass. These figures are as follows: Element of cost. Increase, 191S over 1913. First manu- facturer. Second manu- facturer. Labor Per cent. 72 71 141 39 81 Per cent. 90 125 Fuel .51 27(» Total production cost . . . 80 IM a Not available. The first manufacturer also stated that during the years 1914 to 1918, inclusive, long freight hauls were eliminated where possible and careful attention was given to material stocks, with the result that the increase in manufacturing cost was not parallel with the increases in prices of raw materials, wages, and rates. No figures are available on production costs in the window glass industry for 1918. Early in 1919 a leading manufacturer in the illuminating glassware business stated the prices of his product were not unduly high, con- sidering production costs, and were not due to drop. High production costs were attributed partl}^ to increased wages, but in greater part to increased cost of materials which, it was stated, ran from 100 to 300 per cent above 1914 prices. Table 64. — QuanlUy and value of glass sand produced in the Untied Slates. 1909-1919. [Figures from U. S. Geological Survpy.] Year.';. Quanlity. Value. Averace price per Ion. K.'hilive price .a A verage 190S-1912 _ 1913 Short ton.t. 1,332,539 1,791.800 l,G19,fi49 1.884.044 2,018,317 1,942,075 I , 851 , 297 2,300,000 $1,357,778 1,895,991 1,568,030 l.«0(i,(M0 1 , 9.57. 797 2, 68.5, 014 1 , 942, (i94 4,200,000 $1.03 1.0.-, .97 .85 .97 1.3S 1.05 1.83 li>» 104 1914 95 1915 8:t 191G 9". 1917 . 135 Avprnge 11TI.VI917 1918 ft H) a Base: Average prices 1913 and 1914, $1.02—100. b 1918 figures roughly estimated by Division of Public Works and Construction Development. KiO ECONOMICS OK TlIK ('()XSTHr( 'TION INDT'STHY. Taim.io ()'). — Whnle.fiiile prices on iiUm-f atiml mul n'lndoir '/Ihsh. [(iuotutions from price section, War Industries Board.] roinmodily. Market. Period. July 1, 1913, to June 30, 1914. 1013 1914 1916. 1917. 1918. 1917: First quarter... Second quarter. Third quarter. . Fourtli quarter. 1918: First quarter... Second quarter. Tliird quarter.. Fourth quarter. 19: First quarter. April lass sand. Maryland. Price per short ton. SI . 22.50 1.2500 1.2000 1.2000 1.258.3 1 . 93.33 3.1875 1..5000 1.8167 2.0000 2.4167 2.9167 3.0833 3,4167 3.3333 Relative price. 100 102 98 98 103 1.58 200 122 148 163 197 238 252 278 272 Window glass. .Single, United, inches 40-A. New York. Price per 60 square feet. S2. 5500 2.5000 2. .5500 2. 80.50 :',. 4(5.50 4.. 5.3.53 6. 7903 3.9600 4.1800 4.6200 5.3812 6.0412 6. GOOO 6. 9:jOO 7.5900 7.. 5900 6. 6000 Relative price. 100 100 100 110 1.36 178 266 155 164 181 211 237 259 272 298 298 259 Window class Commodity. Double, United, inches 40-A. Single, United, inches 40- B. Double, United, inches 40-B. Market. New York. Period. Price per 50 square feet. Relative price. New York. Price per 50 square feet. Relative price. New York. Price per SOsquare feet. Relative price. July 1, 1913, to June 30, 1914 1913 1914 1915 1910 1917 1918 1917: First quarter Second q uartcr Third quarter Fourth quarter 1918: First q uarter Second quarter Third quarter Fourth quarter 1919: First quarter -\pril $3. 6400 3. 6400 3. 6400 3. SSOO 5. 912.5 7. .55.SS 10. 9505 6.6000 6. 9667 7. 71KK) 8.9687 10.0fi,S7 ll.lKHKI ll.lsiS 11.5500 10. ISOO 9.3200 100 100 100 107 102 208 301 182 192 212 246 276 302 307 317 279 253 $1.9550 1.9550 1.9550 2. 6350 2.7125 3.6167 6. 1204 3.1000 3.3067 3.7200 4.3400 4.9042 5. 9375 6.5100 7. 1300 7.1300 6.2000 100 100 100 135 139 185 313 158 169 190 222 251 .304 334 364 364 317 $3.3200 3.3200 3-3200 3.5600 4.72S.S 5.9473 8.4423 5.3350 5.5533 5.9898 6.9113 7.7374 8. 4681 8. 6249 8.9386 S.2O00 7.7700 100 100 100 107 142 179 254 161 168 181 208 2.33 255 260 269 247 234 Note.— Figures for 1919 from Oil, Paint, and Drug Reporter. ECONOMICS OF THE CONSTRUCTIOX INDUSTRY. 161 Table 66. — Wholesale 'market prices o-it ylass. [Quotations from price section, AVar ludusiries Board.] Commodilj- Market. Plate glass. Polished slazing area, 5-10 square feet. New York. Polished plazing area, 3-5 square feet. New York. Composite indices. Plate glass. New York. Window glass. New York. Period. Price per square foot. July 1, 1913, to June 30, 1914 1913 1914 1915 191(! 1917 1918 1917: First quarter Second quarter Third quarter Fomth quarter 1918: First quarter Second quarter Third quarter Fourth quarter 1919: o First quarter April $0. 3008 . 3183 . 2908 . 2533 . 3375 .392.5 .4525 .3800 .3800 .4000 .4100 .4200 . 4300 . 4(i(;7 .4933 . 5233 .5400 Relative price. Price per square foot. Relative price. Average of 2 series. 100 106 97 84 112 130 1.50 125 125 133 130 140 143 1.55 104 174 179 .2208 . 2307 .2108 .1807 .2917 ..3400 . 3608 .3400 .3400 .3400 .3400 .3400 . 3467 . 3700 . 3867 .4100 .420*) 100 107 95 85 132 1.54 163 154 1.54 1.54 154 154 157 168 175 i.sr, 190 100 107 96 85 122 142 157 140 140 143 145 147 150 161 169 1.80 185 Average of 4 series. 100 100 100 100 147 189 282 166 174 192 2.33 251 279 290 307 297 266 u Figures for 1919 from Oil, Paint, and Drug Reporter. SECTION XIV. PAINT MATERIALS. Introduction. Paint materia.s are so closely allied to drugs and chemicals, and so many of these materials are imported that any comprehensive study of them would go beyond the scope of this report. The yearbooks of the Oil, Paint, and Drug Reporter contain much information that is valuable on this subject. Production jBgures. From the figures on linseed oil (Table 67) it is seen that the gi'oss supply in 1917 was 131 per cent under 1916. In 1918 the gross sup- ply was 12§ per cent under 1917. Turpentine for the year ending April 1, 19 IS, was 11 1 per cent below the production for the previous je&r. (See Table 68.) For the year ending April 1, 1919, the estimated figure is .36^ per cent less than for the i)receding year. There are not at hand figures on production of white, lead or zinc oxide. Figui-es on lead and zinc are therefore given in their places (Table 69). 1212[)7' -10- -11 1 02 ECONOMICS OF THE CONSTRUCTIOIT INDUSTRY. The total supply of lead in 1918 was nearly 10 per cent under I he li^uro for the year 1917. Zinc in 1918 was about 16 J jier cent under the 1917 figure. Lead and zinc compounds available for use as paint materials probably declined even more than this, since other compounds were much in demand for war uses. Review of paint and varnish business during the war. In addition to the conditions of lessened demand due to inactivity in building, paints and varnishes were subject to the uncertainties of import trade and to the restrictions on this trade imposed by the War Trade Board. Many of the varnish materials were in great demand for war purposes. Many paint pigments suffered consider- able reductions in jjroduetion, due to the demands for allied chemical products. The following is quoted from the Oil, Paint, and Drug Reporter 1918 Yearbook as summarizing the conditions m the paint industry during 1918: Every branch of the paint industry during the year 1918 was affected by the same general conditions. In many different branches there were peculiar conditions, l>ut this does not alter the truth of the statement that general conditions affected all branches of the industry in very much the same manner. In the first place, there was to l>e considered a greatly increased cost of production, due in part to the highei- cost of labor and in part to the higher cost of raw materials. In some instances the higher cost of raw materials was the result of the higher labor cost, and in some cases a result of the shutting off of foreign supplies. High costs from any reason results in decreased con- sumption : but xmder war conditions the decrease in consumption incident to high \ iilues was not nearly as important a matter as the decrease in consumption which the Government found it necessary to arbitraiily command in order that men and material might be availal^le for the Avar uses of the Government. The restrictions upon general building operations were such as to make the general domestic demand almost nil. The orders that came in from the GoA-emment for actual war work were what ser\ed to keep the trade going during most of the yeai'. When hostilities finally ceased — at a time when the Government consumption was at its highest point — the paint industry was largely working for the Government. It was Government demand that made it possible for the industiy to continue in business at a time when war conditions were affecting the industry in every direct and indirect manner conceivable. The Government needed lead. This fact forced an advance of lead pigments. The Grovernment needed acids used in the manufacture of certain diy colors. There- fore, acids only became obtainable to color makera, if at all, at unusual prices. So it w:i3 ^nth other materials. To offset this the GoA-emment was a very heavy consumer of almost eA'erything the trade produced, and it was willing to pay the prices Avhich were forced by the situation. There was no opportunity for the consumption of much paint and paint materials in new priATite construction work, because this work was practically confined, by Government regulations, to essential war construction. The high cost of material made it inadvisable for repainting to be done, and the whole industry — when the fighting ceased— was doing its bit by deliAering as promptly as posr^ible on Govern- ment orders and neglecting general business. WTien the armistice came there was no industry which more quickly recognize*! that the period of a return to normalitj' must be a long one. There was no attempt EC0KOMIC3 OF THE COXSTKUCTIOIS" INDUSTRY. 1G3 made to force conditions which permitted of no forcing. There was no sudden let-up in Government ordera for this sort of goods, as there was in some used for more warlike purposes. There was a decrease in Go\ernment consimiption from the day the fighting ceased, but the decrease was a fairly gradual one. The fact that the Government's ambitious shipbuilding plans were to be carried out, at least to a very large extent, made the Government continue to be a heaw consumer of many sorts of paints and paint materials. In most lines there was no canceling of contracts pre%'ioiisly placed. At the same time there was no immediate improvement in the general domestic dem.and — nor ^\as such a thing expected. Most consumers looked for lower prices as a result of the end of the war, and were therefore inclined to withhold orders waiting for the price read- justment they so confidently anticipated. This position was a uatuial and logical one, and yet conditions were all against sudden price changes. The result was that the closing weeks of the year saw a verj^ dull market. The war was over, the restrictions were being rapidly withdrawn, the outlook for an active domestic and export business was good, and yet it was not a time to attempt to force matters, more especially not a time to in\dte demoralization by sudden radical changes based upon future possibilities. The end of hostilities was foUowed by a decline in the price of pig lead and some other basic raw materials in the paint indus- try, but there was no reduction in the cost of labor — a most important matter in all lines — and none was looked for. The producer, the middleman, and the retailer have l^een waiting since the close of the active warfare in Europe for the ultimate consumer to begin to express Ms needs in orders. The ultimate consiuner has beeen waiting for a price readjustment to meet his views of the situation. There has been no possibilitj' of an}' action that would force the situation, but the fact that there was, as a rule, no accumulation of stocks in any hands was a very strong feature of the situation. The producer was not stocked up. He had been working for the Government to a gieat extent, and the Govern- ment did not refuse delivery on its orders as a rule. The middleman had no incentive to accumulate stocks. The retailer, if he was at all a merchant, had a chance to sell his stocks clean at good profits, so that when the demand starts it will be reflected with wonderful promptness from the consumer to the producer or importer of the basic raw materials of the trade. A re\'iew of the prices of the years means little as a basis of comparison of normal values because general conditions have goA'erned the entire market. These condi- tions were of so unusual a natiue that they ^vill never be known again, and iu eack sepamte item of the trade there ha^■e been peculiar conditions, now forever things of the past. The price record. The price record of paint and varnish materials is shown in Tables 70 to 76. It is interesting to note that, up to the last quarter of 191S, basic lead carbonate, dj-y, had increased 87 per cent; linseed oil, 228 per cent; and white lead hi oU, 106 per cent. vSimilarly, it is noted for the same period that whiting advanced 178 per cent; linseeed oil, 228 per cent; and putty, 309 per cent. Two series of figures are given on turpentine, one for the New York market and one for the Savannah market. The difference ill prices between the two markets is probably due entirely to the transportation charges. In the New York market turpentine is seen 164 H(;()N()MI('S OF THE CONSTRXTCTION INDUSTRY. to have advanced Gl per cent up to the last quarter of 191S, while the advance was only 51 per cent m the Savannah market. The composite index figures shown in the last column of Table 76 arc weighted averages computed by the price section of the War Industries Board, as representing the general rise for the entire group of paints and varnishes. The 1918 price record for linseed oil is very clearly set forth in the following statement taken from the 1918 Yearbook of the Oil, Paint, and Drug Reporter: As a period of high prices, the year 1018 will be long remembered in the linseed oil trade. Quotations advanced steadily each month from the start of the year until the peak of the rise had been reached in August and prevailed until well along in September. Shutting off imports of linseed from the Argentine by the Gov- ernment in its desire to conserve shipping space for troop and supply movements to Europe, was the principal factor in bringing about the record price condition. \\Tiile it was true that all imports of the seed had not been absolutely cut off, cargoes being allowed to be brought in if proper licenses had been procured, it was true that no licenses were obtainable unless the prospective licensee could show that he had obtained actual shipping space for bringing in of the cargo. The finding of shipping space was so difficult a matter as to make the movement of the seed from the .South American country almost negligible so far as Iceeping abreast of actual requirements was concerned. Steamships were entirely out of the c|uestion and as a result the move- ment to this country was made wholly and solely by means of sailing vessels. These were of rather limited cargo capacity at best. Up to the close of hostilities the needs of the Government were so great that the amount of oil available for the general trade was very limited, and there was no exportation of oil permitted. The end of hostilities found crushers with very small stocks of either seed or oil on hand, and there was not much oil in the hands of mid- dlemen. The quantities of linseed received from Argentina were about sufficient to supply the current needs of the oil crushing mills in the Eastern States, while the seed from Canada and the Northwest had taken care ©f the immediate demands of the Western crushers. The receipt of linseed from the North Dakota fields was delayed by early snows which bmied the flax. In some sections indications were that the snow might prevent the threshing of linseed until the spring of 1919. The beginning of the year saw the cai"-lot price at $1.28 a gallon. This was the low price of the year. By the middle of ^larch the price had advanced to SI. 55 a gallon. This price was the highest ever known in the history of the trade ; but it did not remain a record price very long. By the end of June the price had advanced to $1.G0. The end of July saw it $1.84, and early in August it went to the extreme price of ?1.90 — holding at that level until the middle of September. An order forbidding imports created much consternation in the trade. The pro- tests that followed resulted in a close investigation by the authorities in Washington into the whole industry. The crushes turned over to the Government a complete statement giving all the inside facts of their business, and the showing made the shortage of oil so apparent that there never was a time when licenses to import could not be obtained. The linseed requirements of this country for the 1918-19 fiscal period were given as 2C>,000.000 bushels in the report of the linseed oil committee of the National Paint, Oil and Varnish Association at the convention of this organization in Boston, Decem- ber 2-4, 1918. Of the required amount, 10,000.000 bushels were expected from the American Northwest, but the official estimate of the linseed crop in the United ECONOMICS OF THE CONSTRUCTION INDUSTRY. 165 States was 14,057,000 bushels. More than 11.000.000 bushels, therefore, must be obtained from Canada, India, and Argentina. A government order for 500.000 bushels from India was announced. In view of an estimated export surplus of 800.000 tons or 31,000.000 bushels of lin- seed from the 1918-19 crop, Argentina faced a declining market wath the signing of the armistice. This had been preceded by wDd fluctuations in October, due to rumors of coming peace, and assurances of a bumper crop. \Mien the price of oil went to $1.90 a gallon in the United States demand was stopped, except for oil that had to be had at any price. It was impossible to bring down the price at once in the way that consumere seemed to expect. The result was that in the latter part of the year trade was very slow. Early in October there was a price of 11.60, and one day that was cut to $1.50. There was considerable business done at this level. The price was then jumped back to $1.00. The end of the year found it was $1.55, or about where it was early in April. Eastern crushers were forced to store the cake and meal they would have found an active foreign market for under normal conditions. The end of the year found stoclvs of oil in all hands small, few contracts for future delivery on the books of the pro- ducers, and the trade still buying only what the day-to-day necessities of the busi- ness forced them to purchase on the spot. Table 67. — Production figures on linseed oil in the United States. [Unit: Gallon. Figures from War Industries Board.] 1916 Domestic production 60,083.000 ; 58,095.000 71,816,000 68,371,000 57,224,000 50,060,133 Imports 162,000 1 580,000 88,000' 101,000 84,000 26,133 Gro,ss supplv ' 60, 245. 000 Exports j 2, 299, 000 58,675,000 266,000 71,904,000 I 66,475,000 1,497,000 ! 881,000 57,308,000 1,539,000 50, 086, 266 774, 133 Net supply ! 57, 946, 000 58, 409, 000 70, 407, 000 i 65, 651, 000 55,769, 000 49, 312, 133 a Figures for 1918 from Bureau of Markets. Table 68. — Production figures on turpentine in the United States. [Figures from Kaval Stores Review and Journal of Trade, April 6, 1919.] Year ended April 1 — Number of 50-gallon casks. Year ended April 1- 1913 680,000 191/ 1914 6)0.000 ! 1918. 1915 : 512,000 j 1919. 1916 470,000 Number of 50-gaHoQ Casks. 535,000 473,551 a 299, 688 a Estimated. Table 69. — Production figures on lead and zinc, 1914-1918. [Quantities in short tons. Figures from Oil, Paint, and Drug Reporter 1918 Yearbook.] Lead. Zinc. Year. Domestic production.!! Imports.6 Total supply. Domestic production.f Imports.rf Total supply. 1914 .522,864 601,417 622, 967 651,1.56 563,000 28, 338 51,496 35. 330 78,272 95,940 5.51,202 652,913 658,297 729,428 658,940 406,9.59 .586,491 702,610 711,192 627,000 1 12,132 419,191 1915 57,669 644,160 1916 148,147 850,757 1917 ■72,474 7S3.666 1918 24,200 i 651.20C 0, Lead content ofore mined in the T'nilod States. b Lead content ofore, liiiUioii, and refineil lead imported into the United States. c Recoverable zinc content of ore mined in the United States. d Zinc content of ore imported into the United States. l(j(; E(;ONOMI(;S OF THE dON.STUUCTIOX INDUSTRY. 'r.un.i; 70. WholcKcle iiitirl-cl prlrea on jxiint pi(iTnenls, drti crtlorx. [Quotations from price section, War Industries Board.] Commodity Bone black. Chrome green. Chrome yellow. (>cher. Paris green. A).|rl:ol New York. New York. New York. New York. New york. Period. Price per pouud. Rela- ti\e price. Price per pound. Rela- tive price. Price per pound. Rela- tx\e price. Price prr ton. Rela- tive price. Price per pound. Rela- tive I>rice. July 1, 1913, to June 30, 1914 1913 19M 1915 $0.0225 .0225 . 0225 .0225 .o;«i9 .0400 .0475 .0400 .0400 .0400 .0400 .0400 .0400 .ft550 .0550 .0550 .0550 100 100 100 100 164 178 211 178 178 178 178 178 178 244 244 244 244 80. 1700 .1700 .1825 .2375 .4875 .3400 .3950 .4000 .3200 . 3200 .3200 .3333 .3667 .4500 .4300 .3766 .3500 100 100 107 140 286 200 232 236 188 188 188 196 216 265 253 221 205 80.1100 .1100 . 1000 . 1190 .2875 .2413 .2742 .2500 .2367 .2400 .2383 .2333 .2633 .3000 .3000 . 2800 .2500 100 100 99 108 261 219 249 227 215 218 217 212 239 273 273 254 227 $12.0000 12.0000 12.0000 13.0000 18. 8333 21. 3333 30.0000 20.0000 20.0000 21.3:'.33 24. OOOO 30.0000 30.0000 30. OOOO 30.0000 30.0000 30.0000 100 100 100 108 157 17S 250 167 167 178 200 250 2.50 2.50 250 2.>0 2.50 .$0.1167 .1242 . 1133 . 1263 .2700 .3900 .41,83 .2600 .4200 ..50IX) .3800 .42.33 .4300 . 42U0 .4000 ..3900 .3700 lOO 107 97 lO^ 1916 1917 1918 162 335 359 1917: P'lrst quarter 22J Second quarter 369 Tliird quarter 429 Fourth quarter 1018: First quarter -in 363 Second quarter Third quarter Fourth quarter First fjuarter 36» 360 343 334 April SIT a Figures for 1919 from Oil, Paint, and Drug Reporter. 'P.\.BLE 71. — Wholesale market prices on paint pigments, dnj colors. [Quotations from price section, War Industries Board.] Commodity. Market. I'eriod. Prussian blue. New Yorii Price per pound. July 1, 1913, to June 30, 1914. . $0.2933 1913 3000 1914 3175 1915 8292 1916 1.6917 1917 I.:a75 191S 1.1300 1917 First Quarter Second quarter Third quarter Fourth quarter 1918: First quarter Second quarter. . Third quarter... Fourth quarter. 1919:a Fir.st quarter April 1.5000 1.5000 1. ,-,000 .8500 .9100 .9900 1.3500 1. 2700 .9300 .8000 Rela- tive price. 100 100 101 274 566 447 378 502 502 502 2S4 304 331 451 424 315 272 Lampblack. New York. Price per pound. .0300 .0300 .0300 .0363 .1163 .1317 .1375 .1200 .1400 .1400 .1207 .1200 .1:500 .1.500 .1500 . 1.500 .1500 Rela- tive price. 100 100 100 121 388 439 458 400 467 4G7 422 400 433 500 500 500 500 Ultramarine. New York. Price per pound. SO. 0383 .0400 .0358 .0388 .1075 . 21.33 .1550 .2000 . 23.5;5 .2.51X1 .1700 ,1700 .1700 ,1400 .1400 .1266 .0800 Rela- tive price. 100 105 94 101 281 522 609 6-53 444 414 441 3tW 366 330 209 Umber. Venetian red. New York, i New York. Price I Rela-' Price per 1 tive | per pound, j price, pound. $0.0200 .0200 .0200 .0200 .0202 .0-296 .0350 .0225 .0275 .0317 .0367 .0350 .03.50 . 03.50 .0350 .a3.->o .0350 100 '$0.0075 100 '' .0075 100 100 101 148 175 112 138 153 184 175 175 175 175 175 175 .0075 .0075 .0190 .0244 .0250 .0300 .0275 .0275 .0225 .0250 .02,50 .0250 .0250 .0250 .0^50 Rela- tive pricd. 100 too 100 100 253 325 333 267 367 367 300 33.1 333 333 333 33-i 333 o Figures for 1919 from Oil, Paint, and Drug Repwter. ECONOMICS OF THE CONSTRUCTION INDUSTRY. 167 Table 72. — Wholesale j)rices on paints and ■pvnnenls. [Quotations from price section, AVar Industries Board.] Outside white paint. Basic lead sulphate. Red load. Litharge. Lithor one. New York. New York, New York. New York. New "i 'ork. Ferio'l . Price per gallon. Rela- tive price. Price per pound. Rela- tive price. Price per pound. Rela- tive price. Price per pound. Rela- tive price. Price per pound. Rela- tive price. Julv 1,1913, to June 30,1914.... 1913 $1.4200 1.4200 1.4200 1. 4200 1.8967 2. 5.500 3. 3000 2. 2.500 2. 4.500 2. 7500 2. 7500 2. 7500 3. 2500 3. 6(KK) 3. 6(X10 100 100 100 100 134 180 232 1.58 173 194 194 194 229 2.54 254 «0. 0510 .0523 .0496 . 0540 .0817 .0940 .0894 .08.33 .0942 .1100 .0883 .0875 . 0858 .0917 .0925 . 08.57 .0825 100 103 97 106 160 184 175 163 185 216 173 172 168 180 181 108 162 $0.0629 ,06-54 . 05S.8 .0635 .0925 .1117 .1060 .1000 .1133 .1300 .io;33 .1000 .1008 . 1108 .1125 .10.58 .1025 100 104 93 101 147 178 169 159 180 207 164 159 160 176 179 168 163 SO. 0.594 .0644 . 0540 . 0581 .0875 . 1063 .1010 .09:53 . 1083 . 1250 .0983 .0950 .09.58 . 1058 .1075 . 1008 .0975 100 108 91 98 147 179 170 1-57 182 210 165 160 161 178 181 170 164 S0.a375 .0.375 .0375 .0508 .1094 .0623 .0733 .0608 .0625 .0642 .0617 .0650 .0717 .0767 .0800 . 0736 .0650 100 100 1914 lOO 1915 13.5 1916 292 1917 16f> 1918 195 1917: First quarter Third quarter Fourth quarter 1918: First quarter 162 167 171 167 173 191 Third quarter Fourth quarter 1919: First quarter 205 213 19« 173 Table 73. — Wholesale marlet prices on paint materials. [Quotations from price section, War Industries Board.] Basic lead carbonate, dry. White lead in oil. Zinc oxide, French Zinc oxide, standard. Barji domes floate es. tic process. d. New York. New Yrok. New York. New York. New Y Drk. Period . Price per pound. Rela- tive price. Price per pound. Rela- tive price. Price per pound. Rela- tive price. Price per pound. Rela- tive price. Price per ton. Rela- tive price. ■Tulv 1,1913, (0 June 30,1914.. 1913 m. 0533 . 0533 . 0.521 . 0.569 . 0829 .0992 .0956 .0892 . 0992 . 11.50 .0933 .0933 .OiJO.8 . 09.s;j .1000 . 0907 .0900 100 100 98 107 150 186 179 167 186 216 175 175 170 185 187 181 169 •SO. 0681 . 0675 .0675 .0698 . 0927 . 1121 .1268 .0992 .1108 . 1275 .1108 . 1075 .1210 . 1386 .1400 .1367 .1300 100 99 99 102 136 165 186 116 103 187 163 158 178 204 206 200 191 $0. 0667 .0692 .0658 . 1612 .1746 . 1.5.50 . 12*2 .1750 . 1,58:5 .1500 .1387 .1267 . 1:500 .1:500 .1300 . 12.*5 .11.30 100 104 99 242 262 232 194 262 238 225 205 190 195 195 195 192 172 SO. 0538 . 0.538 .0.538 .0667 .tVJ19 .1004 .0997 .0975 .0992 .1023 .1025 .1000 .1000 .1000 .0990 .0950 .0950 100 100 100 124 171 187 185 181 184 191 191 186 186 186 18-4 177 177 S17.0000 16. .8333 17. OOOO 16. 4792 25. 1667 27. 7500 31. 0833 25. OOOO 28. 0(M)0 28. OOOO 30.(X)00 28.0000 30. 6t')67 32. ti667 33.0000 33.0000 30. 5(KH) 100 m 1914 100 1915 luie 97 14? 1917 163 1918 183 1917: 147 Second quarter Third quarter 16.5 165 177 1918: Fii'st quarter 1S.5 Second quarter Third quarter 190 192 194 1919: a First quarter 194 179 a. Prices, 1919, from Oil, Paint, and Drug Reporter. HCONOMTaS OF THE COXSTRUCTION INDUSTRY. Taim.k 74. — Wholrsfilr. iixarhcl priren an paint iwileriah. |(Jiintiill()iis from jirico scflion, Wur Iiidu.strics Board.] Coininwllt V Turpe? tine. Turpentine. Whiting. Putty. Blanc f pulp ixe, Market New Yorlc. Savannah. New Yorl?. New York. New Y ork. IVriod. Price per gallon. Rela- tive price. Price l)er gallon. Rela- tive price. Price pnr cwt. Rela- tive price. Price per pound. Rela- tive price. Price per ton. Rela- tive price. July 1, 1913, to June 30, 1914 . . 1913 $0.4500 .4279 .4733 . 4594 .4910 . 4S77 . 5!,31 ..53)2 . 4S50 . 42;« . .5080 . 4692 .5156 . 6640 .7237 .7133 . 7500 100 95 105 102 109 108 132 119 108 94 113 104 115 148 161 1.59 167 $0. 4165 .3931 .4477 .4281 . 4544 . 4475 .5138 . 5033 .4325 .3808 .4733 . 42 12 .4108 ..5017 .6283 . 6700 100 94 107 103 109 107 123 121 104 91 114 102 99 142 151 163 $0.4500 .4.500 .4500 .4708 .7000 1.0667 1 . 2375 . 9500 .9.500 1.0.500 1.3167 1.2000 1.2500 1.2500 1.2500 1.2500 1.2500 100 100 100 105 155 275 211 211 2:53 292 267 278 278 278 27S 278 $0.0115 .0115 .0115 .0115 .0325 .04(J0 .0466 .0330 .0370 . 0150 .04.50 .04.50 .04.50 .0495 .0470 .0470 .0465 100 100 100 100 283 348 405 287 322 391 391 391 391 430 409 409 404 $40.0000 40.0000 40.0000 42. .5000 97.08;» 35. 4167 35.0000 36. 6667 35.0000 35.0000 35. (WOO 35.0000 35.0000 35.0000 3.5.0000 35.0000 35.0000 100 100 1914 100 1915 1916 1917 106 243 89 1918 88 1917: First quarter 92 S8 Third quarter 88 Fourth quarter 1918: First quarter Second qu;u-ter 88 88 88 88 Fourth quarter 88 1919:1 First quarter April 88 88 1 Figures for 1919 from Oil, Paint, and Drug Reporter. T.\BLE 75. — Wholesale prices on cdt-nish raw materinU. [Quotations from price section, War Industries Board.] Commodity ^^^IX"' Market New York Price per poimd. Rela- tive price Kauri gum, ordinary cliips. New York. Price per pound. Rela- tive price, Shellac, T. X. New York. Price per poimd. Rela- tive price. Camauba wax. New York. Price per pound. Rela- Casein. New York. Price Rela- per live pound, price. Julv 1, 1913, to Jime 30, 1914 1913 1914 1915 1916 1917 191S , 1917: First ciuarter Second quarter Third quarter Fourth quarter 1918: First quarter Second quarter Tliird quarter Fourth quarter 1919: » First quarter April $0. 0725 .0700 .0842 .0917 .0915 .0973 .1383 .0792 . 0900 .1000 .1200 .1200 .1233 .1500 .1600 .1466 .1400 100 97 116 126 126 134 191 109 124 138 166 166 170 207 221 202 193 $0. 1303 .1300 .1571 . 1,575 .1321 .1317 .2008 .1300 .1300 .1300 .1367 .1800 . 1800 .2133 .2300 .2300 .2300 100 95 115 116 97 95 95 95 100 132 132 1.56 169 169 169 SO. 1913 .2008 .1592 .1488 . 27.17 .5258 .6317 .4400 . 5767 ..5733 .5133 .5867 .6267 .6600 .6533 .5.S00 .4600 100 105 83 78 143 275 330 230 301 299 268 306 328 345 341 277 240 -SO. 4463 . 4567 . 4542 .3550 .3717 .4642 .7875 .4133 .4500 . 4700 .5233 .6000 .8467 .8667 .8367 .7466 .7200 100 102 101 79 83 104 176 92 101 105 117 134 190 194 1S7 167 161 SO. 07.50 .0750 .0178 .0891 .1925 .1983 .1754 .1667 .1900 .2200 .2167 .1800 .1567 .16,50 .2000 .1933 .1800 100 100 64 119 257 264 234 222 253 293 289 240 209 220 267 257 240 • Figures for 1919 from Oil, Paint, and Drug Reporter. ECONOMICS OF THE CONSTRUCTION INDUSTRY. 169 Table 76.— Wholesale marJeet prices on paird and varnish vmterials. [Quotation from price section, War Industries Board.] Commoditv. Period. July 1, 1913, to June 30, 191-} . 1913 1914 1915 1916 1917 1918 1917: First quarter Second quarter . Third quarter... Fourth quarter . 1918: First quarter Second quarter . Third quarter. . . Fourth quarter. 1910:' First quarter. April Inside oil varnish. New York. Price per gallon. SI. 6250 1. 6250 1. 6250 1. 0250 1. 6250 1. 7500 2. -1417 1. 7500 1. 7500 1. 7500 1. 7500 2.0000 2. 5000 2. 5667 2.7000 Rela- tive price. 100 100 100 100 100 108 150 108 108 108 108 123 154 158 166 Linseed oil. New York. Price per eallon. $0. 4863 .4621 .5017 .5617 . 7.508 1. 1067 1. 5920 . 9333 1. 1533 1. 1767 1. 1633 1. 3731 1. 5650 1. 8371 1. 5928 1. 4833 1. 5000 Rela- tive price. 100 95 103 116 154 228 327 192 237 242 239 282 322 378 328 305 308 Sova bean oil. F. o. b. mill. Price Rcla- per I five pound. I price, .0637 .0612 . 0630 .0625 . 0891 .1421 .1828 1233 , 1433 , 1379 ,1638 ,1821 , 1908 ,1808 .1775 . 1400 .1450 100 96 99 98 140 223 287 194 225 217 257 286 299 284 279 220 228 China wood oil. New York. Price per pound. ID. 0693 .0728 .0701 .0674 . 1154 .1677 . 25-42 .1292 . 1483 . 1767 .2167 .2000 .2500 . 2867 . 2.S00 . 2333 .1850 Rela- tive price. 100 105 101 97 167 242 367 186 214 255 313 289 361 414 404 337 271 Paints and var- nishes. Com- posite index.' 100 100 100 109 144 173 214 159 173 183 178 186 212 230 230 215 202 ' Index figure computed by price section, War Industries Board. s Prices for 1919 from Oil, Paint, and Drug Reporter. SECTION XV. MISCELLANEOUS BUILDING MATERIALS. Introduction. The principal basic building materials have been covered in the preceding sections of this study. There is at hand, however, a cer- tain amount of material on commodities which are not really classi- fiable in any of the preceding groups. These commodities are here considered under the heading of miscellaneous building materials. Roofing materials. Three price series on roofing papers are shown in Table 77. Except in the case of rubber roofing paper, prices for 1919 have not been found that are quoted on the same basis as the prices here shown. The table show^s reductions in prices of rubber roofing paper since the beginning of the year 1919. This kind of a material rose less rapidly than the others on account of the conspicuously small rise in prices of rubber as compared with other commodities. Another series of quotations not given here shows tarred felt paper in April, 1919, to have decUned about 19 per cent since the beginning of the year. Three manufacturers of prepared roofing materials have furnished some data on production costs. Averages of their figures indicate that in 1918 the labor cost was 8.7 per cent of the total production 170 E(?ON(lMI(;S OF THE CONSTRUCTION INDUSTRY. cost; niw materials accounted for 77.0 per cent: fuel, 2.7 per cent; (rnnsportntiou, 3.8 per cent; other elements, 7.2 per cent. It is thus seen that prices of these products are affected more by the prices of raw materials than by all other factojs combined, and that advances and declines in prices are mainly dependent upon corre- sponding advances and declines in the raw materials. According to figures furnished by the manufacturers mentioned above, the labor cost in 1918 was 80 per cent greater than in 1913; the cost of raw materials was 88 per cent greater: fuel, 170 per cent; transportation, 78 per cent; other elements, 77 per cent. The total production cost increased dming this period 87 per cent, accord- ing to these figures. In 1918, the Government ordered curtaUment of production of composition roofing by 60 per cent of normal capacity. Sanitary porcelain. Two series of prices on sanitary porcelain are given in Table 77. In both series the index for the last quarter of 1918 is less than for the previous quarter. This is due to considerable reductions in the month of Pecember. The porcelain sinks were quoted m November at $27.56, and in December at $21.20; this reduction amounted to 23 per cent. Urinals were quoted in November at S33.07, and in December at $25.44, this reduction amounting also to 23 per cent. Production conditions affecting sanitary porcelain were pretty much as described in Section IX (Clay products). In 1918 the Fuel Admmistration ordered curtailment of production of pottery to 50 per cent of normal. An important producer of sanitary pottery has furnished data on production costs. According to his figures, in 1918 labor accounted for 63 per cent of the total production cost; raw materials, 10 per cent; fuel, 6 per cent; other elements, 21 percent. In 1918 labor costs were 40 per cent greater than in 1913; raw materials increased 60 per cent; fuel cost, 60 per cent: transportation, 35 per cent: other elements, 60 per cent. The total production cost was 51 per cent greater in 1918 than in 1913. Plumbing and heating materials. Table 78 gives prices on nonferrous metal products which are used as })lumbing and electrical supplies. Figures on 6-hich cast-iron pipe are given in Section VIII. No attempt has been made to secure price series on the more higldy manufactured products in the plimib- iug and heating group. Production figures on lead and zinc are given in connection with Section XIV (Paint materials^ Many manufacturei"s of plimibing and heatuig specialties turned their attention to production of ordnance material and other war ECON"OMICS OF THE CONSTEUCTIOX INDUSTRY. 171 munitions. This involved a decrease in production of plumbing, heating, and ventilating materials. Decrease in production of. cast-iron boilers and radiators to the extent of 50 per cent of normal capacity was ordered by the Fuel Administration in 19 IS. The decreased production, together with increases in production costs, led to higher prices. Substantial reductions in these lines were announced early in 1919. Several important producers of plumbing materials furnished to the Division of Public Works and Construction Development data on production costs. Accordmg to averages obtained from these figures, in 1918 the labor cost was 37.2 per cent of the total production cost; raw materials, 43.5 per cent; fuel, 4.4 per cent; other elements^ 14.9 per cent. According to the same authorities the uicrease in labor cost from 1913 to 1918 was 78.5 per cent; in cost of raw materials, 76 per cent ; in fuel cost, 70 per cent; in other elements of production cost, 6*J per cent. The uicrease in total production cost was 76 per cent. An important firm which manufactures radiators has reported that in 1918 its production cost was divided as follows: Per cent. Labor 41. 7 Raw materials 4*i. 7 Fuel T . :' Transportation 1 • ' i <"h^her elements 2. 7 The same firm stated that its increases in elements of cost from 1914 to 1918 were as follows: Per cent. Labor "5 Raw materials 74 Fuel 175 Transportation 48 Other elements 5<' Total production cost increased 81 Naval stores and asphalt. Price series on rosin, pine tar, and asphalt are given in Table 79. In comiection -VN-ith naval stores, prices and production figures on turpentme, included m section XTV (paint materials), should bo considered. Production figures on rosm are as follows:'* Year ended April 1 — 1913. 1W4. 1915. 1916. 500-poimd !' rear ended April 1- 1 ^C>b!* barrels 2.266,000 i* 1917 l.TW.OM 2.131.000' 1918 1 . VJO. Gun 1.705.000" 1919!> , 91.'-., 9« 1,565,000;, i a Estimated. 6 Figures from XavalStores Reviewand Journalof Trade, Apr. 6, 1'.>J'.>. 172 KCONO.MICS OF THH < 'OXSTl! I'l 'TION IXDlSTllY. Ill I ho cas(^ of this commodity iho very considoraLlo docreaso in production, coupled with an increased demand occasioned by the shipbuilding program, caused a very considerable rise in prices. The April, lOlS-March, 1910, production figure is 40 per cent under the figure for the previous year, while prices during the first quarter of 1919 had advanced 224 per cent over the pre-war figure. The figures on asphalt are not complete. The fact that figures on the New York market for the greater part of 1918 are lacking is explained by the fact that there was practically no asphalt in stock in this market during the greater part of the year. Metal lath. Quotations on expanded metal lath are given in Table 80. wSince these figures do not extend over the six-year period that has been considered in connection with most of the other commodities that have been studied, indices have not been computed. Instead, the advances for April, 1919, over the first quarter of 1917 are given. The average of the advances for this period in the six markets is 65 per cent. The figures that are given for some of the markets for periods earher than 1917 show that the advance over the year pre- ceding July 1, 1914 would probably be considerably larger than this. Early in 1919 the chairman of the War Service Committee on Metal Lath stated that productive capacity in the mdustry was being employed at only 25 per cent of capacity, owmg to the slight demand for the product at that time. He attributed high prices to the increases in wages, and to increased cost of material, fuel, and transportation. Builders' hardware and lighting fixtures. No attempt has been made to secure price data on builders' hard- ware and lighting fixtures since these products scarcely come within the classification of basic materials. As in the case of producers of heating and plumbing materials, this group of manufacturers was able to utilize its plants for the production of war materials. In 1918 the Government ordered curtailment of production of builders' hardware by 60 per cent of the total capacity. Average figures based on statements made by representative manufacturers of builders' hardware mdicate that the 1918 cost of production was 83 per cent higher than the 1913 cost. According to these figures the labor cost increased 110 per cent; raw materials, 80 per cent; fuel cost, 100 per cent; other elements of cost, 50 per cent. The 1918 production cost was divided as follows: Labor, 41 per cent of total; raw materials, 24 per cent; fuel, 3 per cent; other elements, 32 per cent. Producers of lighting fixtures, particularh^ those who make goods of high quality, were scriousl}' affected by the war, except such of ECOXOMICS OF THE CONSTRUCTIOX INDUSTRY. 173 them as secured contracts for munitions. It was stated early in 1919 that factories producing this hne of goods were operating at only 40 per cent of capacity. Gypsum products. No price series has been included on this group of materials. However, the use of gypsum partition blocks and other gypsum materials has increased considerably within the past few years, and this is growing to bo a material of considerable importance. Four-mch partition tile was quoted in Chicago (dealer's price, delivered on the job) at 7^ cents per foot in January, 1917, and at 11 cents per foot in December, 1918; a rise of 47 per cent. Three- eighths mch plaster board was quoted in New York (dealer's price, delivered on the job) in November, 1917, at 20 cents per 32 by 36 inch sheet, and in December, 1918, at 30 cents per sheet; an increase of 50 per cent. Early in 1919 this industry was operating at 50 per cent of the average capacity of the years 1915, 1916, and 1917, and production costs were said at that time to have mcreased 100 per cent over 1913. This increase was due to an increased labor cost of 109 per cent; an increased fuel cost of 75 per cent, and an increase in other elements of production cost of 97 per cent. In 1918, the labor cost was said to represent 47 per cent of the total cost of production of gypsum products. Millwork. Lumber prices have been treated fairly comprehensively in Section VII. Certam figures on costs of production of millwork are of uitcrest and are given here. These figures were ob tamed from the millv/ork industry through the courtesy of the chairman of its War Service Committee. Averages of the figures presented show the 1918 produc- tion cost to have been distributed as follows: Labor, 30 per cent; raw materials, 58 per cent; transportation, 4 per cent; other ele- ments, 8 per cent. Most woodworking factories burn their own waste for power, and hence have no coal consumption. According to the statements furnished, from 1913 to 1918, the labor cost mcreased 66 per cent; raw materials, 103 per cent; transporta- tior, 50 per cent; other elements, 77 per cent. The total production coet increased 88 per cent. 174 ECONOMICS OK THE CpNSTRUCTION INDUSTRY. 'I'abi,e 77. — Whohmle innrht'l prices on rnofiiKi 'mdlfrhih anf) iianitar)j jMrcelam. (Qtioliitions from prici' scclinn, War Industries J'.oard.] CoiuniiKlitv . Maikcl. Unit. Period. July 1, 1913, to June 30, 1914. 1913 1914 191 J 1910 1917 1918 1917: 191S First quarter Second quarter.. Third quarter. . . P'oui'th quarter. First quarter Second quarter.. Third quarter. . . Fourth quarter. First quarter. April Kooflng materials. Porcelain sanitarv ware. lUiilding paix'r, rosin- si/ed, shcatlaing. New Yorlc. 25-pound roll. Price per roll. $0.4000 .4(XI0 . -1000 .4000 .6092 .9525 .9933 .9500 1.0167 .8500 .8333 . 8000 .8000 .8000 Rela- tive price. Tarred felt paper, 3-ply. New York. Roll. Price per roll. 100 lOO 100 100 152 238 202 248 238 254 212 209 200 200 200 SO. 6800 .6800 .6800 .6888 1.0171 1.1450 1. 2133 1. 1317 1. 1650 1. 1533 1. 1300 1. 1633 1.2300 1.2300 1.2300 Rela- tive price. 100 100 100 101 150 168 179 166 171 170 166 171 181 181 181 Rubber roofing pai>er, .^. , „! inches arst quality, •'° ■> .'^V^'^^s, 1-1'ly. New York. 108-square- foot rolls, 32 inches wide, 35 pounds. Price per roll. SI. 1500 1.1500 1.1500 1. 1375 1.3500 1. 5708 1.4500 1.5833 1.6500 1.6000 1.4500 1.4500 1.4500 1.4500 1.4500 1.3500 1.3500 Kitchen sinks, by 2-tincli high back, East of Mississippi River. Apiece. price. P"^'^' Rela tive price, 100 $13.9800 100 ; 13.9800 13. 9800 13. 9800 13.4133 15.9558 24. 2725 100 99 117 137 126 138 143 139 126 126 126 126 126 117 117 13.4667 14. •>867 17.5600 18.1100 18. 6.500 25.4400 27. .5600 25, 4400 100 100 100 100 96 114 174 96 105 126 130 134 182 197 182 UrinaLs, white, gla7,ed finish. East of Mississippi River. Apiece. Quoted price. $16. 1700 16.1700 16. 1700 16. 1700 16. 1700 17.3350 27.2042 16. 1700 16. 4333 18.0867 18.6500 18.6500 26.5700 33.0700 30.5267 Rela- tive prii*. 100 109 100 100 lOO 107 li.9 100 102 112 115 115 158 205 1S9 ECONOMICS OF THE CONSTRUCTION INDUSTRY. 175 T.\BLE 78. — Wholesale mariet jn-ices on nonferrom^ metol prod^icta. (Series 1, 2, and 3 from price secti«Mi, War Industries Board. Series 4 and 5 from Bureau o ( Labor Sta tistics4 Commodity 1. Lead pipe. 2. Sheet lead. 3. Solder, hall and half, case lots. 4. Zinc, sheet. 5. Copper wire, bare No. 8, B. & S. gauge, and heavier. Market New York. New York. New York. F. 0. b. La Salle and Peru, 111. AVaterl Con 3ury, u. Period. Price l>er c^^i;. Rela- tive price. Price per cwt. Rela- tive price. Price per pound. Rela- tive price. Price per cwt. Rela- tive price. Price per pound. Rela- tive price. July 1 , 1913, to June 30, 1914. 1913 84.8725 5.0708 4. 5175 5. 3650 7. 6708 10. 1217 8.8892 9.3067 11.3267 11.84^7 8.0067 8.2500 8. 6867 9. 3100 9. 3100 7.51.33 6l5170 100 104 93 110 157 208 182 191 233 243 164 169 178 191 191 154 134 $5.5750 5. 6767 5. 1983 6.1192 8.3550 10.6392 9.3792 9.9067 11.8167 12.:B67 8. 4967 8.7400 9. 1767 9.8000 9.800O 100 102 93 110 150 191 168 178 212 221 152 157 165 176 176 $0.2602 .2917 .2286 .2535 .2815 .3738 . 5S17 .3379 .3671 .39.3:3 .3967 .5100 .6200 .6267 .5700 100 112 88 97 108 143 224 130 141 1.51 152 196- 238 241 219 S6.7658 7. 2450 6. 9192 16. 1575 IS. 783=3 18. 0933 14. 2381 19.3200 18.0933 17.4KM 17.4800 13. .5524 13.8000 13.8000 13.8000 10. M32 9.2000 100 105 102 239 278 267 210 286 267 258 258 230 204 . 204 204 157 136 $0. 1616 .1673 .1465 .1850 .3052 .3300 .2762 .3675 .3475 .3175 .2875 .2625 .26.39 .2883 .2900 .301* .1748 100 104 1914 91 1915 114 1916 189 1917 204 1918 171 1917: First quarter . 227 215 Third quarter 197 17i 1918: First quarter 163 Second quarter 16;J Third quarter 179 Fourth quarter 1Ser ton. $21.2727 i < 23. 3333 S21.250O 30. 2500 23. 2250 122.0000 ' 22. 6667 < 24. 00f)0 * 24. 6667 25. 0000 25. 0(X)0 35. 5(X>0 < 35. 5000 * 35. 5000 ■' 35. 5000 18.0000 22. 0000 22. 5rand in packages. San Fran- cisco. Price per ton. S21. 37.50 30.7500 19.0000 19. (MK)0 22. .5000 25.0000 29.0000 30. 3.333 31. 6667 32.0000 32.0000 32.0000 SIO. 7273 15. 0833 1.5. 95S3 14.8333 14.5000 14.5000 16.5000 1.5.5000 15.5000 16. 3333 16.5000 17.0000 17.0000 ' Barrel, 280 pounds. 3 1913, 1914, 1915, barrel of 50 gallons; lOlfi, 1917, 191^ 1919, barrel of 48 gallons. 3 Figures for second half of year. < Mexican brand. * Stanolind brand. 6 Estimates based on New York jirices T.^Bi.E 80. — J^liolesale marlcet prices on expanded metal lath, Ga. 27; weight, 23S; painted, [Prices per 100 yards in carload lots. Figures from the Engineering News-Record.] Market . Period. New York. Pitts- burgh. ,St. Louis. Chicago. Dallas. San Francisco. 1915: Fourth quarter 1916; First quarter Second ciuarter Third quarter Fourth quarter 1917: First qu:TTter Second quarter Third ([uartor Fourth quiuter 1918: First quarter Second quarter Third quarter Foiutli quarter 1919: First quarter April Advance April, 1919, over first quarter 1917 ix;r cent.. -SU.4400 $13.3800 15. 1733 18.7000 19.8000 21. 0200 25. 4400 31.0000 31.0000 30.9900 30. 9700 34. 0700 33. 0467 34. 0700 34. 0700 16. 6900 1&.5000 18.5000 23.0000 27. I(i67 32.0000 33.0000 33.0000 33. O.'vJS 33.2.500 33.2500 33.2500 33.2500 '$18.0000 19.8000 19.8000 21.0000 26.0000 32. 6667 34.0000 34.0000 34.0000 34.0000 34.0000 34.0000 34.0000 S18.1500 17. 4767 21.0000 25. 3333 30.0000 31.0000 31.0000 31.0000 31.0000 31.0000 31.0000 31.0000 i 820. 0000 23.5000 31.0000 32.0000 32.0000 32.5000 32.5000 33.0556 33.8044 34.7500 $1& 1.500 17.8800 19.0000 25.6667 29.0000 29.0000 29.0000 29.0000 32.0000 38.0000 3&0000 38.0000 100 > Figure for June, 1916. Figure for March, 1917 IV. LABOR AND WAGES IN THE CONSTRUCTION INDUSTRY. NEW CONDITIONS. The exigencies of the war demanded both new types of construction and a new geogi^aphical distribution of construction. These new factors affected buikling tradesmen in a variety of ways. The new types of construction, while increasing the demand for certain groups of building craftsmen, lessened, sometimes to the point of elimination, the demand for certain other gi-oups. Tlie new geogxaphical distri- bution, at the same time that it favored many workmen, compelled others to pl}^ their trade away from home or to engage in other occu- pations. Conditions such as these make difficult a comparison of the status of building craftsmen in general in 1918 with their status in prewar years. Some idea of the adverse effect of the war on certain craftsmen may be gained from a report of the proceedings of the twelfth annual con- vention of the Buildings Trades Department of the American Feder- ation of Labor, held at St. Paul, Minn., June 5, 1918. On page 78 of this report is printed a resolution (which was adopted by the building trades department) to the following effect: Whereas our Government was compelled to declare war against Germany after n ffering many indignities at the hands of the Imperial Government of Germany; and WTiereas the declaration of war found our Government wholly unprepared and, in order to meet emergencies for the housing of enlisted men, was compelled to build cantonment buildings. The time to meet this emergency being limited compelled our Government to construct these buildings in a temporary manner, and naturally the haste required made it necessary to omit certain details in the construction of these buildings which would have a direct tendency to protect both the health and the comfort of our boys who are to fight the battles for the preservation of democracy and freedom; and "VSTiereas our Government can no ,v take the time and secure the men. to make these buildings more sanitary- and more comfortable for our boys by plastering the same; and AMiereas the plastering of these buildings means the saving of thousands of tons of coal in the heating, and as coal is one of the necessaiy essentials in the winning of the war, we feel it should be the plain duty of our Government to conserve the consumj)- tion of coal in every manner possi])!e: Therefore be it Resolved, That the delegates attending this convention are of the unanimous opinion that these buildings should be plastered and painted for the reason herein stated ; and h)e it further Resolved, That a committee of three be apiiointed by the president of the building trades department to act in conjunction with him in presenting this matter to the proper authorities in Washington. In addition to the patriotic concern evinced by this ri^solution, it is patent that the plasterers and painters, who had suffered through 121297°— 19 12 1"7 178 ECONOMICS OF THE CONSTRUCTION INDUSTRY. lack of employment in their trades, were desirous of the employnient which the concurrence hy the Government in their resolutions would insure. At least such is the interpretation that the annual report of 1 lie executive council of the huilding trades permits. On page 45 the executive council reports: There waa submitted to your couucil a .series t)i commuuication.s from President Uedricks, of the Brotherhood of Painters and Decorators, urging that necessary frteps 1)6 taken by the department in cooperation with the Brotherhood of Painters toward securing employment for the members of the brotherhood on cantonment camps, aa well as the general building program of the Government. The correspondence v.-aa supplemented by letters from the District Council of Painters of Indianapolis, Ind., in which a similar req uest was made . The importance of direct action on the subject was deemed to be advisable, and accordingly your executive council instructed the officers to take up the matter with the pro])er authorities and urge that all camps and other Government operations, especially frame structures, be treated to an application of paint. This coui'se was deemed necessary in order to prevent deterioration on account of changing climatic conditions and to make the quarters of the enlisted men comfortable and sanitary, as well as to alleviate the distress caused by the nonem- ployment of the Brotherhood of Painters generally. A discussion of the resolution introduced by the International Hod Carriers, Building, and Common Laborers* Union, on the question of chartering shipbuilding laborers is Ukewise illuminating as to the status of certain trades: Delegate Bowen, Bricklayers and Masons, oppo!5ed the recommendation of the committee. He stated that bricklayers, owing to conditions imposed upon the industries because of war activities, were working aa laborers, and insisted that they should not be compelled to become members of the Hod Carriers and Building Laborers, but should be allowed to retain their cards in the organization of the trade to which they belonged, in which they have pride, and which they spent years to learn. Delegate Leonard, Plumbers, stated that he would not oppose any program that would help to completely organize the building laborers, as he felt the real foundation of all future success of organized labor rested upon the thorough organization of com- mon labor. He spoke at length of the change in industiy since the beginning of the war, the necessity of skilled workers in some crafts taking positions where little or jio skill is required, sometimes because of a scarcity of common labor and in other instances because of a lack of employment in theii' own trades. But in spite of the abnormal conditions prevailing in the construction industry, building tradesmen did not suffer that woi"st. of all industrial evils — unemployment. Work ^uas procurable, if not in all interior sections, at least along the coasts, and in large industrial communities; and if not in the building trades, at least iu other trades. ECONOMICS OF THE CONSTEUCTIOX IKDUSTEY. 179 THE ATTITUDE OF THE GOVERNMENT TOWARD LABOR IN THE CONSTRUCTION INDUSTRY. The attitude of the Government toward labor in construction industry is briefly summarized in the statement of June 7, 1917. issued by the War Department and signed by Newton D. Baker and Samuel Gompers: For the adjustment and control oi wages, hours, and conditions of labor in the con- struction of cantomnenta there shall be created an adjustment commission of three persons, appointed by the Secretary of War; one to represent the Army, one the pub- lic, and one labor; the last to be nominated by Samuel Gompers, member of the advisory commission of the Council of National Defense, and i^resident of the American Federation of Labor. As basic standards with reference to each cantonment, such commission shall use the union scale of wages, hours, and conditions in force on June 1, 1917, in the locality where such cantonment is situated. Consideration shall be given to special circum- stances, if any, arising after said date which may require particular advances in wages or changes in other standards. Adjustments of wages, hours, or conditions made by such boards are to be treated as binding by all parties. The reference to conditions in force on June 7, 1917, was inter- preted by Mr. Gompers and the War Department as referring only to miion hours and wages and not to the closed or open shop. To what extent the union wage rate of the community was the prevailing rate on Government construction it is impossible as yet to determine. Industrial relations divisions of various govermental agencies that had to do with the employment of building trades lal>or made it, of course, their policy to engage labor at the most advan- tageous r'ate possible under the Government policy. That rate could be no lower than the union wage scale of the community concerned. The Building Trades Department of the American Federation of Labor registered protests against the action of certain contractoi-s who were paying less than the prevailing rate of wages, but such conditions were quickly remedied by governmental agencies to whose attention they were called. However, the ever increasing shortage in labor and the ever more insistent demand for emergency construction during the year 1918 developed in certain communities rivah'ies among contractors for building craftsmen. As a result wages in excess of the miion scale were paid and by the end of the year 1918 such wages were conmion. The report of the Industrial Relations Division of the United States Housing Corporation throws an interesting light on the de- velopment of the labor situation in the building trades in the latter part of 1918, The Housing Corporation began its work in August and found that common labor had been absorbed by other war in- dustries of the Government and that it had to enter into the market for labor with the supply almost completely exhausted. By November 1, after employing numerous field agents to scout for labor and call- 180 ECONOMICS OF THE CONSTRUCTION INDUSTRY. ing upon the United States Employment Sprvice, it was able to man its projects only to the extent of 50 per cent. The experiences of tlie Housing Corporation can not therefore be looked \ipon as typical — they show somewhat extreme conditions. To quote from Frank J. Wame, manager of the Industrial Relations Division : There being no centralized governmental control over wages, hours of work, and general working conditions, each contractor and each Government department was a law unto himself and itself. The hourly rate for common labor rose within a few months from 25 cents to as high as 60 cents in places. Hours of work were increased from 8 for each week day, excepting Saturday, to as high as 14. The Saturday after- noon holiday went a glimmering, work thereon ])eing paid for at time and a half and double for overtime above four hours. Sunday work with double pay in many instances became the rule, in order to secure and hold the men. The "stealing" of labor by one department of the Government from another was an almost daily occurrence. In the matter of wage scale the policy of the division has been to instruct the con- tractor to secure a copy of the rates of wages and working time in any particular locality from the examiner in charge of the nearest branch of the United States Em- ployment Service and not to vary from these established rates and conditions without instructions from the division. But in very few localities were the established rates being observed, and the Industrial Relations Division soon found itself involved in a contest of wage increase. In only two instances, so far as the manager of the division is aware, were the contractors of the Housing Corporation the first to vary from the established local rates. The difficulties of the United States Housing Corporation were further accentuated by the award of the Wage Adjustment Board of the United States Shipping Board. This award increased wages 15 per cent to meet the increase in the cost of living and as a result common labor was advanced from 46 cents to 54 cents. The Housing Corporation decided not to meet the increase of the Shipping Board and hence lost a large number of its carpenters and other craftsmen to the Emergency Fleet Corporation. WAGES AND THE COST OF LIVING. Earnings in 1914 and 1918. It is as 3'ct impossible to present an adequate sun-ey of the effect of the war on wages of American workmen, for statistics on wages are not yet sufficiently available. lu addition, the abnormal con- ditions which prevailed durmg 191S make necessary a much more carefid use of the available data of that year and render dangerous generalizations based on partial data. The latest and most com- prehensive survey of wages for the years 1914-191 S available is con- tained in the Labor Market Bulletins published by the Bureau of Labor Statistics of New York State. In these bulletins the average weekly earnings of New York State factories are given for the years 1914 to 1919. In Table SI only the years 1914 and 191S are used. The weeklv earnings of 1918 are those of the last week in December. ECONOMICS OF THE COXSTEUCTIOX INDUSTRY. 181 Comment on Table 81 : The workmen Avho gained most during these veai-s were those in the metals, machinery, and conveyance group, whose earnings increased from $14.24 to $27.39, or 92.3 per cent. In that group the workmen of the cars, locomotives, and railway repair shop group received the greatest increase, from $14.34 to $34.07, or 137.5 per cent. Tiie wages of workmen in the pig iron and roUing- mills product group v/ere advanced from $16.63 to $37.97, or 129.2 per cent. The workmen in the printing and paper-goods industry bene- fited least. Their wages were increased from $15.16 to $22.67, or 49.6 per cent. The varying increases in wages in these different groups re- sponded in a general way to the war demand on the industries repre- sented by these groups. Tke workmen in the metals group, whose industry was most in demand, enjoyed the greatest increase. The United States Bureau of Labor Statistics has computed index figures of average weeldy earnings in New York State factories, these indices being based on the average for June, 1914, as 100 per cent. The indices arc: Januar}-, 1919, 181; February, 1919, 174; March, 1919, 175; April, 1919, 174; May, 1919, 175; June, 1919, 177. The decrease from the 1918 average is probably largely due to the decrease in amounts of pay for overtime, etc. The Bethlehem Steel Corporation released to the press in April, 1919, a statement of the average number of its employees, the total wages paid, and the average wages paid per employee j^er month, for the 3'ears 1909 to 1918. In the table below the wages per month and per week for the 3-ears 1913 to 1918 are given and the percentage increase from 1913 to 1918 and from 1914 to 1918. Year. Average number of employees. Salaries and wages paid. Average per employee-- Per month. Per week. 1913 15,052 15, o)>ii 22,061 47,01-5 64, 782 93,964 S13,366,399.92 14,312,948. 7.S 21,300,664.91 51, 499, 773. 4r. 83,978,312.80 167,118,484.14 S74.00 76.53 82. ;•! 1 91. 2S 108. 0:5 148. 21 $17.07 1914 17.66 1915 19.00 1916 21.06 1917 24.93 191S 34.20 rereentageinprease, 191.3-1918, 100.3. I'tToentage increase, 1914-1918, 93.6. Comment: The increase hi weekly earning of the employees of the Bethlehem Steel Corporation from 1914 to 1918, 93.6 per cent, corresponds almost exactly to the increase m weekly earnings of the workmen in the metals, machmery, and conveyance group in New York State factories, 92.3 per cent. 182 ECONOMICS OF TUV: CJONSTRUCTTON INDUSTRY. Union wage rales from 1913 to 1918. TJio Bureau of Lal)oi' vStatislics piihlislicd in tlic Moiitiily Labor Kovicw of March, 1919, a scale of tlio changes in the union wage rates from 1907 to 191 S. The years that concern us here, 1913 to 191 S, are ;illa.s Tex. Denver, Colo. Detroit, Mich. Fall lUver, Ma.ss. Indianapolis, Ind. Jacksonville, Fla. Kansas City, Mo. Little Rock, Ark. Las Angeles, Calif. Louisville, Ky. Manchester, N. H. Memphis, Tenn. Milwaukee, Wis. Minneapolis, Minn. Newark, N. J. New Haven, Conn. New Orlean5, La. New York, N. Y. Omulia, Nebr. Pliiladelphia, Ph. Piti.sburgh, Pa. Portland, Oreg. Providence, R. I. Richmond, Va. St. Louis, Mo. St. Paul, Minn. Salt Lake City, Vulu San Francisco, Calif. Scranton, Pa. Seattle, Wash. Sprins,Tleld, III. Washington, D. C. ECOITOMICS OF THE COXSTEUCTIOX IXDUSTKY. 183 Granite cutters for tlie same cities received an increase of 27 per cent. Among the groups which obtained only shght increases in hourly wage rates are those in the newspaper, prmting and publishing, and book and job, printing and publishing, groups. Union wage rates in the building trades in 1914 and 1918. Table 82 gives figures on average union wage rates in the building trades. Table 83 gives figures in detail for 41 cities, and Table 84 gives a summar}' of Table 83. The average increase in the union wage rate of building trades labor from 1914 to 1918 is 28.5 per cent. This increase applies only to the 41 important American cities given above. Below is the table of the average increase of some of the trades in the building industry: Per cent. Per cent. Plasterers 18. -5 Plasterers' helpers 30. 2 Plumbera and gas fitters 31. 4 Sheet-metal -workers 33. 7 Steam fitters 32. 9 Steam fitters' helpers 40.8 Stonemasons 22. 1 Structm-al iron TTorkers 28. 8 Structural workers' helpers 30. 2 Tile layers 15. Tile lavers" helpers 19. 2 Bricklayers 19. 7 Building laborers 56. 7 Carpenters 36. 2 Cement workers and finishers, in- side." 29.1 Engineers, portable and hoisting. . 24. 9 Hod carriere 41. 1 Inside workmen 40. 3 Marble setters 13. 7 Marble setters' helpers 24. 7 Painters 34. 4 Sign painters 20. 4 An examination of these increases shows that unskilled labor — building laborers, hod carriers, and helpers — enjoyed as a rule far greater increases than skilled labor. Tlie average increase from year to year in the union wage rate of the building trades are shown graphically in Chart XIII. Union wage rates and the war. The union wage rates of Tables 82, 83, and 84 are those of May of each year. It must be remembered that union wage rates are mini- mum wage rates. A comparison of the union wage rates of one year vnih those of another would, in normal years, provide a fairly accurate index of the relative earnings of those yeai^s. However, conditions in 1918 were so different from those existing in 1913 that it is not safe to say that the index number of the earnings of 1918 corresponds with the index number of the rates of wages of 191 S. The reasons for assuming a dis]:)arity in the index number of the union wage scales and in the index number of earnings may be found in the following considerations: As a result of the ])ressure of war work and of the shortage of labor, it may safely l)e said of industry in general in 1918 (1) that employment was more continuous than in 1913; (2) that overtime figmcd more largely than in 1913; (3) 184 ECONOMICS OF TTl H CONSTRUCTION INDUSTRY. that Avagos in excess of the uiiioi) wage luiniiiium woi-e jjaid more frequentlN' than in ]9i;i; (4) that th(3 union wage rate of May, 191S, was far less frequently the wage rate of the whole j'ear than the cor- responding rate was in 1913. In those trades and in those communities in which one or more of these factors was oi)erative in 1918 (other conditions remaining the same) the index number of total earnings of 1 91 8 would be considerably above the index number of the rates of loages of 1918. It is certain that in some trades the general conditions of 1913 wath respect to overtime, continuity of employment, and observance of the union wage rate applied in 1918. In general it seems safe to assume that one or more of these factors was cfTectivc in 1918 and that hence tlie index number of earnings for 1918 ivas raised above that of wage rates. It is difRcult, however, on the basis of present information to hazard an estimate even as to the approximate position of that index number. Adjusting wages to the cost of living. The rapid rise in the cost of Hving dming the war necessitated the recognition on the part of the Goverimient of a policy of adjusting wages to meet the increase in the cost of Hving. By imphcation such a policy is contained in the principles adopted by the War Labor Conference Board and followed by the National War Labor Board, under the caption — ■ The Livixfi Wage. 1. The right of all v.-orkeis, including rommon laborers, to a liA-ing wage is hereby declared. 2. In fixing wages, minimum rates of pay shall be established which •vrill insure the subsistence of the worker and his family in health and reasonable comfort. The memorandmn creating the Shipbuilding Labor Adjustment Board provides stiU more clearly the ground for readjustment of w^ages: At any time after six months have elapsed following such ratilied agreement, or any such final decision by the adjustment board on any question as to wages, hours, or conditions in any plant or district, such question may be reopened by the adjust- ment board for adjustment upon the request of a majority of the craft or crafts at such plant affected by such agreement or decision, pro\-ided it can be shown that there has been a general and material increase in the cost of li\'ing. As a result of these pohcies on the part of governmental agencies, the demands of worlcmen were as never before considered with respect to the increase in the cost of Uving. In nonnal years the demands of workmen for higher wages are usually interpreted as demands for greater shares in the profits or for better standards of hving, or for both. Though those factors were still operative among workmen in 1918, it is obvious that with the rapid advances in the cost of living, ECOXOMICS OF THE COXSTRUCTIOX TXDrSTEY. 185 the compelling cause of an increase in wage rates among workers in general was the necessity for meeting the increase in the cost of living. In order to obtain reliable figures for the increase in the cost of living, upon which to base wage increases, the Shipping Board requested the Bureau of Labor Statistics of the United States Depart- ment of Labor to make a statistical investigation of the increase in the cost of living for workers. The Bureau of Labor Statistics under- took accordingly a sui-vey of living conditions in shipbuilding com- munities and pubhshed at certain intervals the increase in the cost of living reflected in those communities. The decisions of the Ship- buddmg Labor Adjustment Board were based on the findings of this bureau. The award of the Shipbuilding Labor Adjustment Board of October 1, 1918, however, did not apply the entire increase in the cost of living to all occupations. In the more higlily paid occupa- tions the Shipping Board felt justified in not granting the full increase for the reason quoted: ''We have not deemed it necessary or wise to apply this entire increase in the cost of living to occupations already above the base rate of the scale for the skilled trades. As in assessing the income tax, the Government exempts altogether small incomes while taking more than three-fourths of the income of the multi- milhonaire, so in adjusting v/ages, while granting an advance to laborers and helpers fully sufficient to offset the increase in the cost of living, we have not considered it proper to grant the full increase to the more highly paid occupations." Increase in the cost of living. The investigations of the Bureau of Labor Statistics into the increase in the cost of living for workers in shipbuilding communities show the following percentages of increase for December, 1917, and December, 1918, over December, 1914. City. December, 1917. December, 1918. ' f..^ December. 1 <^'f>- 1917. Decembar, 1918. Baltimore, Md .. Per cent. 51.27 38. 13 51. 13 41.78 42. 9.3 49.85 41.89 41.63 28.8.5 43.16 Per cent. 86.37 70.29 82. 33 74.14 73.90 79.80 74.61 79.88 58.88 72.39 1 New York, N. Y Per cent. 44.68 45. 15 43. 81 37. 96 31.23 28. 63 42. 49 31.0.H Per cent. 78.79 Norfolk, Va 80.73 IJulTalo, N. Y .. . Philadelphia, Pa 75.02 Chicago, III Port land , Me 72.38 Cleveland, Ohio. . . Portland, Orcg &5.50 Detroit, Mieh San Francisco and Oakkmd, Calif Houston, Tex 58.38 68. 63 Los Angeles, Calif. . Seattle, ^\ ash 7n. 47 Average 41.04 73.47 Cost of living computations upon which to base conclusions for the whole country have not yet been tabulated by tlie Bureau of Labor Statistics. It is not unlikely that the shipbuilcHng communities chosen are typical of industrial communities which benefited from 186 ECONOMICS or the constructiox industry. war activity. Additional figures indicate that the average increase in tlioso shipbuilding coiiuuunities for June, 1919, would be somewhat :ibc)Vo the figur(^ for ]>eceiii])er, 1918 — somewhere about 76 or 77 per cent, probably. The increases in 1919 are due to increases in cost of food in the second quarter of the year and also to increases m rents. The National Industrial Conference Board makes estimates of the increase in the cost of living for the whole country based upon prices gathered by the Bureau of Labor Statistics and upon its own investi- gation. It has pubhshed two sets of figures for 1918; one on the cost of living increase between July, 1914, and June, 1918, 50 to 55 per cent; the other, the increase between July, 1914, and November, 1918, 65 to 70 per cent. A comparison of the increase in the wage scale of the buikhng trade3 with increases in the various elements of the cost of li^ ing is shown graphically in Chart XIV. The cost of living and wages in 1918 with particular reference to the wage rate in the building trades. Workmen in the metals group, particularly', enjoyed mcreases greater than the increase in the cost of living. Workmen in many tether factory groups, if the New York factory statistics may be looked upon as t\^pical, enjoyed mcreases approximating the mcrease in the cost of living. Unskilled workers and common labor, as a result of the application of the living wage principle and of the shortage of this type of labor, seem usually to have increased their earnings at least in proportion with the increase in the cost of living. The index number of the wage rate for 1918 of many groups, among them the buildmg trades and the printing groups, is consid- erably helow that of the mdex nmnber of the cost of living. The disparity, however, between the index number of the cost of living of 1918 and that of the wage rate in the building trades of 1918, does not mean that there has not been a considerable readjustment of wage rates in the buUduig trades to meet the increase in the cost of living since America entered tlie war in 1917. The mdex numbers for the cost of living and the union wage rates all use a 1913 or a 1914 base. Many of the wage adjustments made dming the war, and notably those of the Sliipbuildiiig Labor -Vdjustment Board use the wage rate of 1917 as a base. The use of 1917 as a base for both the cost of living and the union wage rate of the building trades tells a different story. The index nimiber of the wage ratr» for Ma}', 1917 (with May, 1914, as the base) , is only 108 for the 41 cities mentioned above. But the index num- ber for May, 1918 (with May, 1914, as a biise), is over 128; in other words an increase over the new base of 1917 of 18 per cent in one ECONOMICS OF THE CONSTRUCTION INDU5TP.Y. 187 year. This increase corresponds fairly closeh- to the increase in the cost of hvmg for the whole country during the same year — 15 to 20 per cent. The great disparity in the index numbers of the cost of living and the union wage rate of the building trades {vdth 1914 as a base) is due to the fact that in the years 1914, 1915, and 1916 there had beeu practically no change in the wage rate. Even the year 1917 saw but a slight revision upward. Workmen in some other groups, particu- larly in the metals group, had then* wages considerabh^ increased before 1917 because of the tremendous demand for war matg:'ials by the entente aUies even before America entered the war. It must be emphasized again that the index number of wage rates in 1918 is not for many building craftsmen the ii\dex number of then- earnings for 1918 and that hence a comparison of the index number of the wage rate with that of the cost of living is not always fair. There is, however, in spite of this consideration, one not unimportant justification for the use of the 1918 index nmnber of wage rates both alone and in comparison with that of the cost of living. Li the discussion of a new wage rate for 1919, constant .reference is made to the wage rate of 1918. That wage rate is projected mto the j^ear 1919, a post ])ellum year, in which normal conditions are expected to prevail. Its sufficienc}'' or iiisuificiency is determhied more or less by a consideration of the pm'chasing power of that 1918 wage rate in 1919. Hence a comparison of the index number of the wage rate of 1918 with that of the cost of liv- ing — though partially to be rejected as pictmung inaccurately the conditions of 1918 — has its value. THE WAGE RATE OF 1919. In the light of these arguments, the following interpretations of the wage rate of 1919 are possible: 1. Those building craftsmen whose earnings were considerably above those indicated by the mdex number of their wage rate and who have asked for an increase in then' wage rate for 1919, have not necessarily asked for an increase over their earnhigs for 1918. They have asked in many instances for a wage rate based upon the rates they were actually paid in 1918 (or upon their total earnings). 2. If those same craftsmen have agreed to the 1918 vrage rate for 1919, then' earnings in 1919 are likel}" to be considerably less than their earnings were m 1918. In other words, they have accepted a reduction in their earnmg'S. 3. Building craftsmen for whom the war did not change tlie pre- war conditions with respect to overtime, continuity of employment, etc., and wlio find the purchashig power of the 1918 wag-e rate greatly 338 EC0N0M1(;.S OF THE CONSTRUCTION INDUSTRY. decreased as c()in|)aro,(l witli tliat of prewar years, may liave asked lor a new wage rate that shall provide only for a ]>etter adjustment ol' their earnings to the increased cost of living. EFFICIENCY OF THE BUILDING TRADES. As an inevitable result of war conditions, the efficiencj^ of building craftsmen suiTered. Overtime and general abnormal conditions of Gm])loyment produced their natural results. A great deal of skilled labor in the building trades was diverted to other fields and its i)lace was taken by less efficient labor. Inefficient common labor was brought into the building industry. Labor turnover, too, was high. How much efficiency was reduced and how widespread the reduction was it is difficult to say, for statistics on labor costs are. available in only small numbers, but toward the end of the war reduced efficiency was apparently making itself felt more and more. That this reduced efficiency, however, is looked upon as a natm-al result of war conditions and will not apply in post-war times is shown by the fact that only 74 questiomiaires on deferred building projects out of 6,472 returned to the Division of Public Works and Construc- tion Development mentioned inefficiency of labor as a deterrent fac- tor in the building program for 1910. This feeling is supported by the actual facts taken from a study of labor costs which were made by Mr. Morton Chase Tuttle, who served as a production manager for the United States Emergency Fleet Corporation. Ilis analysis of his findings is particularly pertinent at this time and desen-es to be quoted: That a reduced wage scale id not an indispensable preliminaiy to resumption of acti\itie3 in the building trades is the opinion of Mr. Morton Chase Tuttle, who has just returned to Boston, after more than a year of service as production manager for the United States Emergency Fleet Corporation. Mr. Tuttle leases his judgment on recent investigations of large construction entei-prises from New England to Florida, supplemented by studies carried out under his direction by a construction company in Boston, of which he is general manager. This indicated that increased efficiency of labor is bringing down costs even while wages remain at existing altitudes. "In the course of vievving numerous undertakings more or less closely associated with the interests of the Goverameut," says Mr. Tuttle, ' ' I have l)een lately impressed to find the statement commonly made that cost of operation was beginning to show a noticeable decline. And this almost without exception was attributed to increased efficiency of the labor force, due in part to the opportunity for weeding out the lesa dependable workers, in part to the growing desire of all members of the force to retain their* jobs. ''Cost studies. — Owing to inadequate or otherwise unsatisfactory cost studies main- tained in connection \vith most of these undertakings, I found it impossible fully to check the statement by actual figures. Accordingly, I asked my own company to make out the costs of any one process in an operation continued over a period of several weeks. That which was selected was a jnoce of concrete work. The costs studied were those for the common labor employed on this work from January 7 to February ECONOMICS OF THE CONSTRUCTION INDUSTRY. 189 4 of the prt^ent year (1919), inclusive. During thiy peri'xlthe wage scale remained unaltered, but the personnel of the lal)ur force underwent fre(]uent changes. "A graph of the lal)or cost of the work during the period noted shows a sharp and almost unde\'iating declin<} from day to day. On February 4 these costs were exactly 30 per cent less per unit than were those of January 7. It is my l^elief that the expe- rience of my company is by no means isolated, and that in almost any labor force there lies the opportunity of realizing economies ranging from 20 to 50 per cent without interfering with the wage scale. '^ Potent Jar.tor. — This implies, ot course, that there is now increased opportunity for selecting men according to their suitability for a given task and an increased eagerness on the part of the men to make good. The whole country ought soon to feel the effect of it in general improvement. It is a case of supplanting so-called liquidation of la])or by proper adaptation of labor as a means of keeping the cost of doing things within the Ix/unds of utility. "State of mind is often as potent a factor in ultimate labor cost as is the rate per hour. Any one experienced in handling workmen has recognized the difference in output between a cheerful, capable man, anxious to hold his place, and one who is a little disgruntled and quite conscious that he can get another job the mcmient he drops the present one. Multiply either case by thousands of individual instances, and I believe that there will be found, in shifts of mental attitude, the explanation of much of the variation which occurs in unit cost. And this, after all, is the element of labor which directly affects the profits of the employer." Conclusions: In the light of Mr. Tuttle's conclusions, which are borne out by the experience of the Housing Corporation and by other governmental builders, as well as by private builders, it ma}' ])e said that the efficiency of labor for 1919 will, other factors remaining the same, tend toward that of labor in its normal years. 190 ECONOMICS OF THl': COXSTRUCTIOX INDUSTRY. Tahi.e 81. — Arerafie vtelhi cnniinrm in Nev: York Stale fadnrics. [Includes all cmployeos in both oflBce and shop.] Industry. Stone, clay, and plass products Miscellaneous stone and mineral products Lime, cement, and plaster lirick, tile, and pottery Glass Metals, machinery, and conveyances Gold, silver, and precious stones Brass, copper, aluminum, etc Pig iron and ri)llini;-mill j)roduets Structural and ardiitcctural iron work Sheet-metal work and hardware Firearms, tools, and futlcry Cooking, heating, and vruiilating apparatus Machinery, including electrical apparatus Automobiles, carriages, and aeroplanes Cars, locomotives, and railway repair shops Boat and slup Imilding Instruments and appliances Wood manu fact ures Sawmill and planing-mill products Furniture and cabinetwork Pianos, organs, and other musical instruments.. Miscellaneous wood and allied products Furs, leather, and rubber goods Leather Furs and fur goods Boots and shoes Miscellaneous leather and canvas goods Rubber and gutta-percha goods Pearl, horn, bone, celluloid, hair, etc Chemicals, oils, paints, etc Drugs and chemicals Paints, dyes, and colors Animal and mineral oil products Miscellaneous chemical products Paper Printing and paper goods Paper boxes and tubes Miscellaneous paper goods Printing and lx)ok making Textiles Silk and silk goods Wool manufactures Cotton goods Cotton and woolen hosiery and knit goods Other textiles and allied products Clothing, millinery, laundering, etc Men's clothing Men's shirts and furnishings Women's clothing Women's underwear and furnishings Women's headwear Miscellaneous sewing Laundering, cleaning, dyeing, etc Food, liquors, and tobacco. ." Flour, feed, and other cereal products Fruit, and vegetable canning and preserving (Jroceries not elsewhere classified Slaughtering, meat packing, and dairy products Bread and other bakery products Conlectionery and ice cream Be\'er,ages . . ". Cigars and other tobacco products Water, light, and power General average $2.5.30 $13.94 2ti. 3.5 18. 47 27.32 13.38 2LSI 11.72 25.27 14.23 27.39 14.24 20. .52 14.21 2.5. 4.5 12.73 37.97 10.03 30.21 15. 31 22.44 12. 20 24.11 13.11 27.17 13.87 25.32 13.96 20.55 18.07 34.07 14.34 32.01 10.16 21.25 13.40 20.97 12.50 21.1! 12.00 20.91 12.73 22. 53 14.29 19. .52 10.81 22.19 11.88 22. 57 11.04 29. SO 14.33 23. 40 12.52 18.55 10.99 19.91 10. 93 17.80 9.02 21.81 13.64 19.97 14.57 21 . 00 14.13 22.91 13.35 21.89 13.17 25.05 13.49 22.09 15.10 17.02 10.59 18.38 11.75 24.00 17.03 17.21 9.47 15.50 9.20 17. 01 9.89 19.44 9.61 10.26 8.98 18.93 10.20 10. 45 10.00 18.77 11.02 13.13 8.51 20. 10 12.02 14.43 8.18 19.18 10.92 12. 89 8.30 14.90 8.86 20.25 11.72 24.71 15.10 17.54 9.62 21.92 13.20 26.41 14.88 21.48 11.19 14.94 9.W 27.19 18.58 16.30 8.96 26.89 15.48 23.13 12.56 ECONOMICS OF THE C'OXSTRUCTIOiS' INDUSTRY. 191 Table 82. — Arewie anmml union ucKie scales, hvildinn trades, oii per hovr ftn.'Jw, 191S-191S. inclusive. [All figures as of May 15 of each year in a minimum of 10 cities in all parts of the United States. C'ompiled by L. F. Summerall, statistician, Ordnance Salvage Board, AVar Department.] Building trades. 1913 1914 1915 1916 1917 ms Bricklayers $0. 6647 .3104 . 5040 .5706 .3955 .3785 $0. 6759 .3125 .5104 .5736 .3983 .3785 80.6590 ..3512 .5070 .4165 .3362 .4000 .3573 .2865 .5750 .3363 . .50.50 .5580 .46.57 .6582 .3935 .5628 .4341 . 5781 .3076 .6267 . 6145 .6216 .3753 SO. 7005 .3.579 .5406 . 6039 .4291 .3982 .4818 .3730 .6128 . 3863 . 5553 ..58S1 .4963 . 6867 .4.321 .6170 . 4554 .6117 . 3286 . 6653 .6260 .63.54 .3984 .$0. 7303 .3700 . 5707 .6436 .5187 .4376 .5083 . 3938 .6512 .4265 .5765 .6298 .5321 .7169 .4674 . 6431 .4946 .6428 . 3.548 . 7033 . 6574 .6599 . 41.38 *0. 80.52 Building laborers. .. . . t'O-.t .6700 Cement finishers .7381 Cement finishers' helpers .02.5<» .5600 Composition roofers . . .620-1 Composition roofers' helpers . .. . 4!)2i> .6023 .3571 .5136 . 5653 .4744 .6581 .41.50 .5992 .4616 . 5955 .3003 . 6069 . 5972 .5994 .3952 .6101 .3663 .5281 . 5793 .4761 .6678 .4256 .6055 .4719 .6034 .3104 .6198 .6103 .6175 .4005 .7082 Hod carriers . 5319 Inside wiremea . . .71H Latlicrs .7129 .6289 .8023 Plasterers' laborers . 5527 .7645 Sheet-metal workers .66tj7 Steam fitters . . 7M7 Steam fitters' helpers .4326 .7768 Structural-iron workers .7858 .7879 Structiu-al-iron workers: Finishers' helpers .5215 Annual average all above trades .5030 .5115 .4750 . 5208 .5540 .6584 Sources: U. S. Department of Labor and American Federation of Labor. Note. — The introduction in 1915 of the wage scales of the composition roofers and helj^i-s lowers the averages for 1915-1918 slightly. Table 83. — Percentage increase in hourly wage rate for building tradesmen in hrge American cities, 1914-191S. ATLANTA, GA. [Average increase, 47.4 per c«nt.] Hourly rate. Trades. Hourly rate. Trades. 1914 1918 Per cent in- crease, i 1914 1918 Per cent in- crease. Cmls. 45.0 20.0 40.0 62.5 45.0 28.1 Cents. 70.0 55 Painters Cents. 45.0 44.4 33.3 44.4 45.0 62.5 62.5 Cents. 50.0 .50 Plasterer? Carpenters Engineers (portable and hoisting): 60.0 62.5 62.5 50 39 Plumbers and gas fitters.... Sheet-metal workers Steam fitters. 68.8 65.0 68.8 70.0 75.0 55 95 55 Stoncma.'5ons 55 Hoist Stmctmal-irou workers Structural-iron workers (fin- ishei's) 20 55 Marble .setters 68.8 70.0 ' ! BALTIMORE, MD. [Average increase, 49 per cent.] Bricklayers Building laborers ! 20. Carpenters Engineers (portable and hoisting): Boom derrick. . . Hod carriers Inside wiremen Marble setters Painters Plasterers 62.5 100.0 GO 20.0 43.8 70.0 60 62.5 80.0 28 31.3 56.3 80 4:^.8 70.0 60 62.5 75.0 20 37.5 68.8 S3 62.5 75.0 20 1^ Pliuul)crs and ga.-^ fitters... Sheet-metal worker? Steam fitters Steam fitters' helpers Stonemasons Structural-iron workers Structural-iron workers (fin isiiersi Tili< lavoi 50.0 7.5.0 40.0 62.5 50.0 68.8 28.1 43.8 56.3 75.0 56.3 87.5 56. 3 87. 5 50.0 1 65.0 192 ECONOMICS OF THE CONSTRUCTION INDUSTRY. Taui.k 83. — Pcrccntuf/e increase in hourly vaye rale for buildiny tradesmen in larye American cities, 19 14- WIS — Continued. BIRMINGHAM, ALA. [Average increase, 2C.7 per cent.) Hourly r; l,t.C. Trades. Hourly rate. Trades. 1014 1918 Per cent in- crease. 1914 1918 Per cent in- crease. Bricklayers Cents. 70.0 45.0 50.0 62.5 56.3 30.0 62.5 Cents. 65.0 75.0 70.0 62.5 37.5 75.0 87. 5 62.5 25 44 50 12 11 25 20 39 Painters (sign) Cents. .56.3 62.5 30.0 68.8 5.5.0 6.8.8 70.0 62. 5 Cents. 75.0 7.5.0 37.5 87.5 6.5.0 87.5 87.5 33 Plasterers 25 Cement workers (finishers). . Eusinecrs (portable and hoisting): Boom derrick Plasterers' laborers Plumbers and gas fitters Sheet-metal workers 23 27 18 Steam fitters 27 Hoist 25 Structural-uon workers Structural-iron workers (fin- ishers) Alavi)lc setters 45.0 BOSTON, MASS. [Average increase, 29.2 per cent.] Bricklayers Building laljorers Carpenters Cement workers (finishers) Engineers (portable and hoisting) Hod carriers Inside wircmen M urble setters Marble setters' helpers Painters Painters (sign) 65.0 80.0 23! 35.0 40.0 14 55.0 75.0 36 62.5 75.0 20 62.5 75.0 20 35.0 42.5 21 55.0 70.0 27 56.3 75.0 33 30.0 42.5 42 5.5.0 7.5.0 36 62.5 68.8 10 Plasterers Plasterers' laborers Plumbers and gas fitters Sheet-metal workers Steam fitters Steam fitters' helpers Stonemasons Structural-iron workers .... Structural-iron workers (fin- ishers) Tile layers Tile layers' helpers 6.5.0 80.0 40.0 60.0 65.0 75.0 55.0 70.0 50.0 75.0 28.1 50.0 6-5.0 80.0 62.5 80.0 62.5 80.0 68.8 80.0 43.8 BUFFALO, N. Y. [Average increase, 26 per cent.] Bricklayers Building laborers Carpenters Cement workers (finishers).. Engineers (portable and hoisting) Inside wiremen Marljlc setters Pamters Painters (sign) 65.0 56.3 47.5 62.5 46.9 75.0 45.0 70.0 65.0 68. 8 70.0 75.0 56.3 75.0 Plasterers Plumbers and gas fitters . . . Sheet-metal workers Steam fitters Steam fitters' helpers Stonemasons Structural-iron workers Stnictmal-iron workers (fin- ishers) Tile lavers 60.0 70.0 56.3 68. 8 50.0 62.5 56.3 68.8 34.4 75.0 6.5.0 62.5 85.0 62. 5 8.5.0 56.3 62.5 CHARLESTON. S. C. [-Vverage increase, 47.4 per cent. 40.0 33.3 33.3 25.0 50.6 50.0 67.0 31.3 25 50 71 25 50.0 40.0 43.8 43.8 Plasterers 50.6 73.0 73.0 26 1 nside wiremen Plumbers and gas fitters Steam fitters 67 67 ECONOMICS OF THE COXSTRUCTIOX IXDUSTRY. 193 Table 8.3. — Pnccntage increase in hourhj vagc rate for building Iradesincn in large American cities, 1914-1918 — (,'ontinued. CHICAGO^ ILL. [Average increase, 13.6 per cent.] Hourly rate. Trades. Hourly rate. Trades. 1914 1918 Per cent in- crease. 1914 1918 Per cent in- crease. Bricklayers Cents. 7.5.0 57. 5 G5.0 65.0 7.5.0 40.0 75.0 71.9 42. 5 70.0 75. Cents. 81.3 70.0 80.0 75.0 87.5 50.0 81.3 75.0 50.0 75. 81.3 8 22 23 15 17 25 8 4 18 8 Plasterers . Cent,. 7.5.0 50.0 7.5.0 68. S 75. 40.0 7.5.0 68.0 Cents. 87. 5 56.3 81.3 75.0 8.5.0 45.0 81.3 87.5 80.0 81.3 50.0 17 13 Building laborers Carpenters Plumbers and gas fitters Sheet-metalworkers Cement workers (finishers) . . 9 Engineers (portable and Steam fitters 13 hoisting) Steam fitters' helpers Stonemasons Hod carriers }j Inside wiremen Structural-iron workers Structural-iron v.-orkers' helpers 29 Marble setters. Marble setters' helpers Painters Tile layers 7.5.0 43.8 g Painters (sign) Tile layers' helpers 14 CINCINNATI. OHIO. [Average increase, 20.2 per cent .] Bricklayers Building laborers Carpenters Cement workers (fliiishers) . Engineers (portable and hoisting) Hod carriers Inside wiremen Marble setters Marble setters' helpers Painters Painters (sign) 65. 90.0 3S! 2.5.0 3.5.0 40 50.0 65. 30 50.0 75.0 50 55.6 60.0 8 42.5 50.0 18 50.0 68.8 38 68.8 75.0 9 31.3 37.5 19 50.0 60.0 20 59.4 6.5.6 10 Plasterers Plasterers' laborers Plumbers and gas fitters Sheet-metal workers Steam fitters Steam fitters' helpers Stonemasons Structural-iron workers Structural-iron workers (finishers) Tile layers Tile layers' helpers 75.0 75. 45.0 50.0 61. S 6.5.6 4.5.0 52.5 60.0 65. 5 33. 5 70.0 60.0 62.5 75.0 56.3 7.5.0 62. 5 71.9 32.5 37.5 CLEVELAND, OHIO. [Average increase, 38.6 per cent. Bricklayers Building laborers f "arpenters Cement workers (finishers). . Engineers (portable and hoisting): Boom derrick Hoist Hod carriers 1 uside wiremen Marble setters Marble setters' helpers Painters 70.0 90.0 29 5.5.0 80.0 4.5 5.5.0 55.0 80.0 45 70.0 90.0 29 60.0 8.5.0 42 32.5 55.0 69 60.0 81.3 36 62.5 7.5.0 20 37. 5 50.0 67.5 35 1 Painters (sign) Plasterers Plasterers' laborers Plumbers and gas fitters Sheet-metal workers Steam fitters Steam fitters' helpers Stonemasons Structural-iron workers Structural-iron workers (finishers) Tile layers Tile layers' helpers 75.0 87.5 62. 5 3.5.0 5.5.0 62. 5 90.0 45.0 80.0 62. 5 81.3 31.3 43.8 70.0 90.0 70.0 90.0 70.0 90.0 59.4 7.5.0 31.3 37.5 DALLAS, TEX. [.Average increase, 21.0 per cent .] Bricklayers Carpenters Cement workers (finishers) . Engineers (portable and hoisting) Inside wiremen Marble setters Painters Painters (sign) Plasterers 87.5 87.5 i 1 5.5.0 80.0 45 62.5 75.0 20 62. 5 87. 5 40 56.3 87.5 55 68.8 68. S 50.0 70.0 40 62.5 7.5.0 20 87.5 100.0 14 Plasterers' laV)orers •. . I'lumbers and gas fitters Slicct-metal workers Steam fitters Steam fitters' helpers Stonem;i.sons Structural-iron workers Structural-iron workers (finishers) Tile layers 35. 75. 56.3 7.5.0 87.: ■62.; 100.0 7.5.0 100.0 50.0 87. 5 7.5.0 75.0 121297' -19- -13 194 ECONOMICS OF THE CONSTRUCTION [NDUSTRY. T\Bi.i-: S3. — Pprn'utnge increase in hourly vuge rate for hnnUUmi frnr1,:^,i>en in Wrtje Amerirnn cities, 19't4-l'*iK — Continiuvi. DKNVER. COLO. [Avemge inoreasc, 32.9 per c«it.) Trades BricVlayers Biiikling laborers Carpenters Cement workers (finishers) . En(,'ineers (portable and hoistins) Hod carriers Inside wiremen Marlde setters Marble setters' helpers Painters Painters (sign) Hourly rate. Cents. 75. "jo.'o' 62. j 62.0 40.6 56.3 68.8 37.5 50.0 62.5 Cents. 100.0 .53.1 75.0 7.5.0 81.3 56.3 82.5 75.0 68. Per cent in- crease. Trades. Plasterers Plasterers' laborers Pliimliers and gas fitters. Sheet -metal workers >Sicuni fitters Steam fitters' helpers Stonemasons Structural-iron workers. . fcjtructural-iroa workers (finishers) Tile layers Tile layers' helpers Hourly rate. 191S Per cent in- crease. Cents. Cents. 7.-. 87.5 43. S .59.4 62. 5 87.5 56.3 75.0 62. .'. 87.5 31.3 43. >. 62. 5 K7. 5 56.3 75.0 56.3 7.5.0 62. 5 7.5.0 34.4 43.8 DETROIT, MICH. [Average increase, 36.9 per cent.] Bricklayers Carpenters Cement workers (finishers). . Engineers (fwrtable and hoisting): Boom derrick Hoist Hod carriers Inside wiremen Marble setters Marble setters' helpers Painters Painters (sign) 65.0 50.0 50.0 65.0 62.5 3.5. 50.0 62.5 34.4 45.0 50.0 80.0 70.0 70.0 100.0 75.0 56.3 75.0 75.0 70.0 75.0 50 Plasterers Plasterers' laborers Plumbers and .cas fitters Sheet-metal workers Steam fitters Steam fitters' helpers Stonemasons Structural-iron workers Structural-irou workers (finishers) Tile layers Tile layers' helpers 6^..<« 75. •■) 43.0 50.0 16 56.3 75.0 33 50.0 70.0 40 56. .3 75.0 33 2.".. 4.5.0 SO 6.-,. SO.O K 6.5.0 80.0 23 6.5.0 80.0 23 .50.0 71.9 44 25. FALL RIVER, MASS. [Average increase, 40.7 per ceni .] Biickla.yers Carpenters Cement workers (finishers). Inside wiremen Painters Plasterers 60.0 42.0 37. 5 37.5 60.0 7.5.0 62.5 75.0 60.0 55.0 75.0 Plumbers and ga^; fit ters . . S t earn fl 1 1 e rs Steam fitters' helpers S t tmemasons 60. o Stmctiu-al-ii-on workers . . 67.5 60.0 4.5.0 75.0 62.5 INDIANAPOLIS. IND. [Average increase, 16.1 percent.] Bricklayers Carpenters Cement workers (fuushers). Engineers (portable and hoisting) •. . Hod carriers Insidi' wiremen iMurblo setters Painters Painters (sign) , Plasterers 85.0 60.0 62.5 72.5 50.0 67.5 75.0 55.0 62.5 75.0 Plasterers laborers Plumbers and gas fit ters Sheet -metal workers Steam fitters Steam fittei"?' helpers Stonemasons St ruci iiral-iron workers St ruct ui-al-iron workers ( ftn- isherst , Tile layers Tile laVers' helwi-s 62.0 50.0 62.5 70. o 63.0 68.0 62. 5 31.3 50.0 75. 60.0 75.0 37. 5 8.5.0 75.0 75.0 6!*. << ECONOMICS OF THE C02>rSTRUCTIOX INDUSTRY. 195 Table 83. — Percentage increase in hourly ivage rale for biiildinij tradesmen in largf American cities, 1914-1918 — Continued. JACKSONVILLE, FLA. [Average increase, 40.3 per cent.] Hourly rate. Trades. Hourly rate. Trades. 1914 Per 1918 <=fnt crease. 1 1914 1918 Per cent" in- crease. CenU. 62. .") 37.5 45. « 37.5 62.5 Cents. 75. 55. 75. 55.0 75.0 10 47 67 47 20 Plumbers and gas filters. . . . Sheet-metal workers Steam fitters Cents. 62.5 37.5 62. 5 62. 5 Cents. 75. 68. 75. 20 Carpenters 81 20 KANSAS CITY, MO. [.Vverage increase, 21.1 per ceni.] Bricklaj'ers Building laborers Carpenters Cement workers ( finishers). Engineers (portable and hoisting) Hod carriers Inside wiremen Marble setters Marble setters' helpers Painters Painters (sign) 7.5.0 87.5 17 30.0 47. 5 58 60.0 75. 25 65.0 75.0 15 70.0 81.3 16 37.5 55. 47 62.5 75. 20 6S. 8 75.0 9 37.5 60.0 75.0 25 70.0 81.3 16 Plasterers Plasterers laborers Plumbers and gas fitters . . . Sheet -metal workers Steam fitters Steam fitters' helpers Stonemasons Structural-iron workers Stnictmal-iron workers (fin- ishers) Tile layers Tile layers' helpers 75. 45. 68.8 60.0 68.8 62. 65.0 75. at..-) .55. 87.5 67.5 87.5 43.8 75. 75. 75.0 7.5. 43.8 LITTLE ROCK, ARK. [Average increase, 33.5 per cent.] Bricklayers Building laborers Carpenters Cement workers (finishers).. Engineers (portable and hoisting) Hod carriers Inside wiremen 7.5.0 50.0 55.6 50.0 37. 5 50.0 35.0 70.0 75.0 50.0 .55. 75.0 Painters Plasterers I'lumbers and gas fitter.s . Sheet-melal workers Sleam fitters Stonemasons Tile layers 50.0 65.0 62. 5 75.0 62.5 87. 5 52. 5 75. 62. 5 .87. 5 62. 5 87. 5 75.(1 LOS ANOELES, CAL. [Average increase, 17.4 per ceni .] Bricklayers Building laborers Car])enters Engineers (portable and hoist iug) Hod carriers Inside wiremen Marble setters Marble setters' helpers Painters Painters (sign ) 7.5.0 34.4 50.0 50.0 40. (i 50.0 68.8 37.5 43.8 62. 5 75.0 43. 8 62.5 62. 5 50. 62. 5 62. 5 68. S Plasterers Plasterers laborers Plumbers and gas fitters Sheet-metal workers Sleam fitters Stoneiiiasons Structural-iron workers Structural-iron workers din ishers) Tile layers Tile layers' helpers 75. 61.4 56. 3 56. 3 5P.3 62. 5 50.0 50.0 62. 5 34.4 75.0 62. 5 68.8 68.8 68.8 196 ECONOMICS OF THE CONSTRUCTION INDUSTRY. TArn;E 83. — Pirccntuxje, increasr in, honrh/ irar/f rate for buildiutj trnflmtnen in large Amcru-fiv cities, 191-ft-li)18 — Continued. T.OUrSVILI-E, KY. (Average inci'easo, 27.8 j)or cent.) Hourly rate. Trades. Hourly rate. Trades. 1914 l'.)18 Per rent in- crease. 1914 1918 Per cent in- creajjc. Bricklayers Building laborers Engincors (portable and hoistiiif,') Hod carriers CenU. 6.^>. 27.9 .SO. 3 as. 40.0 CenU. 7.5.0 30.0 75.0 50.0 60.0 6S. X 60.0 62.5 70.0 15 8 32 .50 25 8 Plasterers' laljorcrs Phimbers and gas fitters Sheet-metal workers Steam fitters Steam fitters' helpers Stonemasons CenU. 38.0 60.0 42. 5 .50.0 2.5.0 60.0 50.0 CenU. .50.0 70.0 50.0 75. 37.5 70.0 70.0 75. 75.0 32 17 18 .50 .50 17 Marble setters Structural-iron workers Structural-iron workers (fin- 40 Painters Painters (sign) .50. .50.0 65.0 Tile layers 50.0 50 MANCHESTER, N. H. Average increase, 64.5 per cent.] Bricklayers 60.0 40.0 "34.'4' 31.3 75. 60.0 7.5.0 60.0 50.0 25 50 74 60 Plasterers Plumbers and sjas fitters Slieet-metal workers Steam fitters .50.0 31.3 34.4 31.3 75.0 70.0 37.5 70.0 .50 Carpenters Cement workers (finishers). . 124 9 124 Painters MEMPHIS, TENN. [Average increase, 26.9 per cent.] 7.5.0 50.0 6.5.0 30.0 50.0 52.5 51.9 87 5 65.0 6.5.0 50.0 75.0 62.5 62.5 17 30 67 50 19 20 Pla.st^rer.s 75. 62.5 50.0 62.5 31.3 65.0 62. 5 87.5 81.3 62.5 81.3 40.6 75.0 17 Plumbers and gas fitters Sheet-metal workers Steam fitters 30 Engineers (portable and 25 30 Hod carriers Steam fitters' helpers Structural-iron workers Tile layers 30 13 Painters MILWAUKEE, WIS. [-\verage increase, 21.7 per cent.] Bricklayers Carpenters Cement workers (finishers). Engineers (portable and hoisting) Hod carriers Inside wiremen Marble set tors M;ul>le setters' helpers Painters Painters (sign) 67.5 75. 1 11 i 50. 62. 5 25 45.0 65.0 44 62.5 80.0 28 35.0 50.0 43 50.0 75.0 50 68.8 75.0 9 37.5 55. 60.0 9 62.5 68.8 10 Plasterers' helpers Phunbers and gas fitters . . . Sheet-metal workers Steam fitters Steam fitters' helpers Stonemasons Structural-iron workers Structural -iron workers helpers Tile layers Tile layers' helpers 35.0 50.0 62. 5 6S.S 45.0 60.0 56.3 62.5 28.1 31.3 67.5 7.5.0 62.5 70.0 62.5 70.0 62.5 71.9 34.4 43.8 ECONOMICS OF THE CONSTRUCTIOX INDUSTRY. 197 Table 83. — rrrcentage increase in hourly vaf/e rate for buildiny tradesnun in large American cities, 1914-1918 — Continued. MINNEAPOLIS, MINN. [Average increase, 20.5 per ceut.) Hourly rate. Trades. Hourly rate. Trades. 1914 1918 Per cent in- crease. ! 1914 1918 Per cent in- crease. Bricklayers Cents. 70.0 50.0 50.0 50.0 50.0 62. 5 37.5 50.0 .56.3 70.0 Cents. 75. 60.0 65.0 65.0 68.8 71.9 "'62.' .5' 6.5.0 75. 7 20 30 30 38 15 2.5 1.5 Plasterers' laborers. . . Cents. , 40.6 62. 5 50.0 62.5 31.3 1 55.0 1 62.5 1 j 62.5 1 62.5 i 31.3 j Cents. 55.0 75.0 56.3 7.5.0 40.0 70.0 75.0 7.5.0 68.8 37.5 35 Carpenters Plumbers and gas fitters Sheet-metal workers Steam fitters. . 20 Cement workers (finishers). . Engineers (portable and 13 20 hoisting) Steam fitters' helpers Stonemasons . ... 28 Inside wiremen 27 Marble setters. . . Structural-iron workers Structural-ironworkers (fln- 20 Marble setters' helpers Painters 20 Painters (sign) Tfle layers. . 10 Plasterers 19 NEWARK, N. J. Average increase, 26.4 per cent.] Bricklayers , Carpenters Cement workers (finishers) . Engineers (portable and hoisting) Hod carriers Inside wiremen Marble setters , Marble setters' helpers Painters Plasterers 65. 80.0 23 50.0 70.0 70.0 40 69.3 81.3 17 35.0 50.0 43 62.5 7.5.0 20 68. 8 75.0 9 40.6 44.0 62.5 42 65. 80.0 23 Plasterers' laborers Plumbers and gas fitters . . . Sheet-metal workers Steam fitters Steam fitters' helpers Stonemasons Structural-iron workers. . . . St rucl ural-irou workers (fin- ishers) Tile layers Tile layers' helpers 62.5 60.0 62.5 33.1 65.0 62.5 62. 5 62.5 50.0 75.0 75.0 75.0 42.5 .80.0 87.5 87.5 6S. 8 40.6 NEAV HAVEN, CONN. [Average increase, 26.4 per cent.] 60.0 50.0 70.0 6.5.0 70.0 75.0 6,0.0 70.0 53.1 17 30 38 30 Plasterers 60.0 50.0 47.7 70.0 62.6 59. i 62.5 70.0 80.0 80.0 17 Plumbers and gas fitters Sheet-meta! workers 25 24 Engineers (jjortable and 54.5 Steam fitters Stone masQns 55.0 62.5 62.5 27 Inside wiremen Structural-iron workers Structural-iron workers (fin- ishers) 28 Marble setters 40.9 28 Bricklayers Carpenters Cement workers (finishers) Engineers (portable and hoisting) , Inside wiremen Marble setters , Painters Plasterers , NEW ORLEANS, LA. [Average increase, 26.0 per cent.] 62.5 40.0 50.0 50.0 62.5 40.0 62.5 75. 54.0 65. 70.0 75. ,50.0 62.5 Plasterers' laborers Plumbers and gas fitters. . , Slicot-mctal workers Steam fitters Stone masons Structural-iron workers Structural-iron workers (fin ishers) 22.5 56.3 4p.O 56.3 62.5 62.5 62.5 28.3 68.8 68.8 75. 62.5 75.0 75. 198 ECON^OMICS OF THE CONSTRUCTION INDUSTRY. Table 8:i. — f'erantii'je increase in houiiy uage ruU fm' OitiUimj tifuhHinen in larq* American cities, 1914-1918 — Continued. NEW YORK, N. V. lAverage iucrease, 21.6 per cent.] Hourly rale. Trades. Tfourly rate. Trades. 1914 1918 Per cent in- crease. KM 4 1018 Per cent in- crease. Bricklayers Cents. 75.0 22.5 62.5 62.5 62.5 37.5 60.0 68.8 40.6 50.0 Cents. 81.3 40.5 68.8 70.0 81.1 50.0 75.0 75.0 43.8 70.0 75.0 8 80 10 12 30 33 25 9 8 40 Plasterers 68.8 40. e. 68.8 62.5 68.8 37.5 60.0 62.5 62.5 68.8 CctUs. 75.0 56.3 75.0 70.0 75.0 42.5 75.0 87.5 68.8 75.0 46.0 9 Building laborers .; Cari>i'utcrs Plumbers and gas fitters Sheet-metal workers Steam fitters Steam fitters' helpers Stone masons 9 Cement workers (finishers). . EnRiiieers (portable and hoisting): Foundation work 13 ,! 25 Hod carriers Structural-iron workers Structural-iron workers (fin- ishers) 49 Inside wiremen Marble setters 19 Marble .setter's helpers Painters Tile la vers 9 Tile la vers' helpers Painters (sign) OMAHA, NEBR. [.■Vverage increase, 24.5 per cent.] 70.0 75.0 50.0 60.0 75.0 75.0 55..0 70.0 68.8 62.5 7.5.0 7 20 36 33 46 25 36 Plasterers 7-5.0 6-S.3 42.5 68.3 87.5 87.5 65.0 87.5 43.8 75.0 75.0 75.0 71.9 40.0 17 Plumbers and gas fitters Sheet-metalworkers 2!J Carpenters 50.0 55.0 .56.3 53 Cement workers (finishers). . Steam fitters 2S Engineers (portable and hoisting) Steam fitfers' helpers Stone ma.sons 70.0 60.0 60.0 68.8 37.5 7 Hod carriers Structural-iron workers Structiual-iron workers (fin- ishers ) 25 Inside wiremen 50.0 Marble setters 25 Painters 50.0 55.0 Tile layers s Painters (sign) Tile layers' helt>ers 7 PHILADELPHIA. PA. [Average increase, 39.3 per cent.] Bricklayers 65.0 80.0 45.0 70.0 65.0 75.0 60.0 75.0 75.0 23 27 37 33 71 67 9 Plasterers 62.5 43.8 50.0 50.0 50.0 2S.1 ,55. 60.0 60.0 62. 5 75.0 50.0 75.0 70.0 75.0 50.0 70.0 92.5 92.5 70.0 42.0 2< Building laborers Plasterers' laborers... . 11 Carpenters 55. 47.5 56.3 35.0 45.0 68.8 Plumbers and gas fitters Sheet metalworkers 50 Cement workers (finishers) 44 Engineers (portable and Steam fitters. . ... 59 hoisting) Steam fitters' helpers Stonemasons Struct ural-irou workers Structural-ironworkers (fin- ishers^ 7« Hod carriers 27 Inside wiremen 54 Marble setters Marble setters' helpers 54 Painters 42. 5 60.0 68.8 41 12 Painters (sign) . . Tile layers' helper-; . PITTSBURGH. PA. (.\verage increase. 32.8 per cent.] Bricklayers Building laborers Carpenters Cement workers (finishers). . i^ngineers (portable and hoisting) Hod carriers Inside wiremen Marble setters Marble setters' helpers Painters Painters (sign) 70.0 37.5 56.3 50.0 56.3 40.0 57. 5 62.5 37.5 56.3 90.0 45.0 80.0 75.0 80. 60.0 75.0 75.0 67.5 Plasterers Plasterers' laliorers Pluml)ers and gas fitters . . . Sheet metalworkers Steam fitters Steam fitters' helpers Stonemasons St rucl lual-irou ^vorkers Structural-iron workers (fin- ishers) Tile layers Tile layers' helpers 6S. S 8.5.0 40. 60.0 55. 75.0 5.5.0 80.0 62.5 80.0 37.5 50.0 55.0 65.0 62.5 87.5 62. 5 87.5 62.5 67.5 43. S ECOifOMICS OF THE CONSTRUCTION INDUSTRY. 199 Table 83. — Percentage increase in hourly ivage rale for buildimj tradesmen in lau-ge Amei'ican cities, 1914-1918 — Continued. PORTLAND, OREG. [Average increase, 35.6 per cent.] Hourly rate. Trades. Hourlj' rate. Trades. 1914 1918 Per cent in- crease. 1914 1918 Per cent in- crease. Bricklayers Cents. 75.0 ?7.5 50.0 50.0 62.5 50.0 56.3 68.8 37.5 50.0 62.5 Cents. 100.0 62.5 75.0 62.5 87.5 75.0 72.2 75.0 33 67 50 25 40 50 28 9 Cents. Cents. 75. , 100. 50 j 7.S ft 3.1 Building laborers Palsterers' laborers 4) Plumljers and gas fitters Sheet-metal workers 75.0 56.3 75.0 75.0 62.5 62. 5' 68.3 40.6 90.0 82.5 90.0 100.0 87.5 87.5 81.3 56.3 -M Cement workers (finishers). 47 Engineers (portable and Steam fitters 20 hoisting) 33 Hod can iers Structiu-al-iron workers Structural-iron workers (fin- 40 Inside wtremen Marble setters 40 Marble setters' helpers Painters Tile layers 18 70.0 81.3 40 30 Tile layers' helpers 39 Painters (sign) PROVIDENCE, R. T. [Average increase, 29.8 per cent.] Bricklayers Building laborers Carpenters , Cement workers (finishers). Engineers (portable and hoisting) , Hod carriers , Inside wiremen Pa inters Plasterers 65.0 70.0 7 2.5.0 42.0 68 50.0 70.0 40 50.0 62.5 25 50.0 62.5 25 30.0 45.0 50 50.0 60.0 20 45.5 62. 5 37 62.5 68.8 10 ! j Plasterers' laborers Pluml>ers and gas fitters... Sheet-metal workers Steam fitters Stonemasons Stractural iron workers. . . . Stractural-iron workers (fin- ishers) , Tile layers Tile layers' helpers 48.0 48.0 43.8 65.0 62.5 62.5 62.5 50.0 75.0 57.0 65.0 70.0 80.0 80.0 68.8 37.5 RICHMOND, VA. [Average increase, 54.4 per cent. Bricklayers 65.0 37.5 43.8 30. tj 50.0 75.0 62.5 75.0 60.0 75.0 60.0 lo 67 71 96 50 1 1 Steam fitters 50.0 56.3 56.3 50.0 75.0 sao 80.0 50 Carpenters . . ... 1 Structural-ironworkers 1 Structural-iron workers (fin- ishers) 43 Painters 43 Plumbers and gas fitters Sheet metal workers Tile layers ST. LOUIS, MO. [Average increase, 18.9 per cent.) Bricklayers Building laborers Carpenters Cement workers (finishers). Engineers (portable and hoisting): One engine Two engines Hod curriers Inside wiremen Marble setters Marble setters' helpers Painters 75.0 85.0 13 25.0 50.0 100 62. 5 70.0 12 65.0 75.0 15 75.0 87.5 17 87.5 100.0 14 50.0 65.0 30 65.0 86.3 33 68.8 75.0 9 37.0 40.0 7 60.0 75.0 25 Painters (.sign ) Plasterers Plasterers' laborers Plumbers and gas fitters . . . Sheet metal workers Steam fitters Steam fitters' helpers Stonemasons Structural-iron workers Struclurai-iron workers (fin- ishers) Tile layers Tile layers' helpers fiS. N 7,-... 75.0 87.5 56. 3 62.5 75.0 SI. 3 ra.o 75.0 75.0 75.0 37.5 43.8 70.0 70.0 65.0 80.0 65.0 80.0 68.8 75.0 37.5 43. S 200 ECONOMICS (»F TMK COXSTIU'CTION INDUSTRY. Tabik 8:i. — Perccnta(je increaae in hourly vacjc rate for builtling Irndcsmm in large American cities, 1914-1018 — Continued. ST. PAUL, iMINN. [Average increase, 24.2 per cent.] Trades. Bricklayers Carp('iitors Cement workers (flnishcrs).. Kn^ineors (portable and hoisting') Hod earners , Inside wiremen , Marble setters , Marble setters' helpers Painters , I'ainters (sign) , Hourly rate. Cents. 70.0 50.0 50.0 55.5 50.0 62.5 31.3 50.0 56.3 1018 Cents. 75.0 (iO.O 75.0 67.5 50.0 68. Si. 3 Per cent 62. .5 87. .-. 43.. S 62. .5 62. .5 87. .i 62. .i 75.0 37. .) 56.3 56.3 7.5.0 62.0 87.5 Trades. Plasterers Plasterers' laborers Plumbers and gas fitters Sheet metal workers Steam fitters Stonemasons Structural-iron workers Structural-iron workers (fin- ishers) Tile layers Tile layers' helpers Hourly rate. Cenfi. 75. 50. 75.0 62.5 75.0 62. Cents. 100.0 75. 100.0 82.5 100.0 100.0 62. 5 ' 87. 68. 8 1 81 . 4K. Per cent in- crease. SPRINGFIELD, ILL. WASHINGTON, D. C. •Vverage increase, 38.7 ner cent.] Bricklayers Building laborers Cari^enters Engineers (portable and hoisting) Inside wiremen Marble setters Painters Plastcrere Plasterers' laborers 66.7 75.0 12 25,0 50.0 100 50.0 75.0 50 62.5 80.0 28 60.0 75.0 25 62.5 75.0 20 50.0 75.0 50 62.5 75.0 20 31.3 50.0 60 Phimbers and gas fitters Sheet metal workers Steam fitters S team fitters' helpers Stonemasons Structural-iron v/orkers Structural-ironworkers (fin- ishers) Tile layers Tile layers' helpers 56.3 75. 0. ' 50.0 75.0 .55.0 75. 30. 37.5 66. 7 87.5 62.5 92.5 62.5 92.5 56.3 68.8 37.5 33 50 33 32 33 Building laborers 37.5 Inside wiremen 55.0 50.0 66.3 Carpenters 55.0 56.3 Painters Cement workers (finishers).. Steam fitters Table 84. ^P«' cent increase of the wage rate r)f building trades. 1914-1918. City. .^.tlanta, Ga Baltimore, Md . . . Birmingham, Ala. Boston, Mass Buffalo, N.Y Charleston, S.C. Chicago, 111 Cincinnati, Ohio. . Cleveland, Ohio. . Dallas, Tex Denver, Colo , Detroit, Mich Fall River, Mass. Indianapolis, Ind. Jack.sonville, Fla. Kansas ''ity. Mo. Little Rock, Ark. Los Aneeles. Calif Louisville, Kv. . . Manchester, N. H Per cent, increase. 47.4 4.S. 7 27.7 29.8 26. 2 47.1 t.3.3 18.2 38. I 24.0 32. 1 :<(-.. 5 40.4 1.5.8 :«). 8 21.0 33. 17.2 27.7 64.2 Citv. Menij^his, Tenn Milwaukee, V/is Minneapolis, Minn. . Newark, N. J New Haven, Conn. . New ( )rleans. La New York, Ivf.Y.... Omaha, Nebr Philadelphia, Pa Piltstiurgh, Pa Por(l;in^ < X UJ .^1 65.9% illi-ii Z bJ 28.5% PERCENTAGES OF INCREASE OF COST OF LIVING freport ofNationdl Industrial Conference Board July l9l4-Nov.l9l8) COMPARED WITH UNION WAGE SCALE BUILDING TRAOESr'5'//:///f's-A&yW-A&//«{5y U.S. DEPARTMENT OF LABOR INFORMATION AND EDUCATION SERVICE DIVISION OF PUBLIC WORKS AND CONSTRUCTION DEVELOPMENT CHART XIV. V. SOURCES AND SUPPLY OF CAPITAL FOR THE CONSTRUC- TION LNDUSTRY. METHODS OF SUPPLY AND TERMS OF REAL ESTATE LOANS. Temporary and permanent loans. There are two principal methods of supplying capital to the building industry: The one of direct application may be termed the temporary method or building loan. The one of indirect application is the permanent or mortgage loan. The first method is peculiarly the basic principle of operation followed by the building and loan associations, and is resorted to by title insurance companies and by life insurance companies. For other financial institutions, the building loan, involv- ing as it does much technical detail, is not a popular investment. Building loans mider $100,000 are very commonly handled by build- ing-loan operators as individuals. In further explanation of the method by which building loans are created, a quotation is given from a letter written by a member of the firm of Charles T. Wills (Inc.), of New York City: The business of making building loans requii'cs a staff experienced in building con- struction and in the making of daily inspections of the work under construction. Only a few of the large instixance companies are so equipped ; quite a few of the mortgage and title companies are so equipped. The large insurance companies — for example the Metropolitan — doing any building loan business accept only loans of this character of approximately §200,000 or over. The mortgage and title companies making building loans accept loans of approximately §100.000 and over. Loans under §100,000 are generally handled through building loan operators as individuals and sometimes under the name of a mortgage company; they do the iinancing either with their own funds or sometimes, where the loan is a large one they associate themselves with one of the mortgage and title companies, who underwrite a part of the loan, the building loan operators financing the balance themselves. Some of the large insurance companies and mortgage and title companies make what is known as a combination and permanent loan. Tliis is principally done where the loan is a large one, as it saves the builder the expenses and fees of refinancing for the permanent loan. Small country homes are generally financed by building and loan associations and sometimes by iccal lawyers handling small funds. Beyond the spheres already spoken of, only one other loan is found that sufficiently conforms to the nature of a building loan to warrant mention. We refer to the financial paper of producers of building materials and supplies which origmates in cUrect relation to con- struction development. At times this type of paper undoubtedly forms a substantial investment in the portfolios of commercial banks (if discount and deposit, for it is said that there was discrimination against it by the rediscount committees of the Federal Eescrve banks 205 20G ecojN'Omics of the coxstruction industry. (luring [he war period, when fiiiaiicial loslnctious \\(*vi- impose*! upon uoiiossential activities. The permanent loan or mortgage investment, although of less direct a[)plication to the building industry, is of great importance because the volume of funds so invested has a controlling influence upon the prospects of the building industry. The reason is that no promoter, even though arrangements for a building loan were completely available, would venture to proceed upon construction development unless he had reasonable assurance that permanent accommodation also could be arranged for in advance with reasonable certaintv. Methods followed in making loans. Bank methods. — The following methods are generall\- employed by banks when they invest in real estate loans: First, there is a formal written apphcation made in detail by the intendmg borrower; second, there is an inspection of property by a representative of the lendmg institution. There is also a valuation made by a reputable appraiser and then there follows the amiual inspection for the purpose of keepmg track of the condition of the property, repairs, insurance, etc. The maimier in which this inspection is carried out is for the most part governed by State laws ; in someStates itis required that two trustees make an inspection and in others it is specified that the inspec- tion be made by the loan committee or the executive committee or such other part of the organization as is authorized by law to exercise this function. Before there is any continuance or any extension of a loan contract there must be a reappraisal. Acceptance of the loan depends in part upon the bank's policy as regards its zone of operations and preferred neighborhood. Sometmies the policy of an institution will restrict it to the purchase of none other than guaranteed mortgages which will run as long as six years. Other institutions insist that the property title be guaranteed before they nicike any loan at all. In contrast to an institution that purchases only guaranteed mortgages there are those that \\'ill not purchase guaranteed mortgages, because they have their owti facilities to determine whether the investment is likely to be satisfactory and amply secured. In these cases they prefer to give their depositors the benefit of fidl interest rates. Title guaranty and trust company metliods. — ^Vs a result of con- ferences with institutions of the title guaranty class this division is able to submit a tabulation of their general plan of procedure m the development of a market for a mortgage investment. A brief sum- mary follows: 1. Investigation of owner's title. 2. Guaranty for stated ciiarge if title is clear. 3. Appraisal of propert}' value. ECOJifOMICS OF THE COXSTRUC'TIOX INDUSTBY. 207 4. Actual investment in a mortgage on the property. (This step is considered as one operation and is not to be confused with the method followed by a commercial bank when it makes a loan against collateral security. In this case — of mortgage mvestment — the appraised value of the property apparently never appears as a book entry.) 5. Sale of the mortgage guaranteed by vendor to investor. Stated charge for guaranty is usually one-half of 1 per cent. It therefore follows that the investor is protected by — (a) Guaranteed title; (&) Margin of excess value; (c) Company's guaranty of the mortgage contract. 6. In case the amount is a very large one arrangements may be made to sell a participatuig mterest in this mortgage investment to severjil separate investors. In this case, the steps already referred to are consummated in tm-n with an additional step, that the origiuid uivestment is placed in the hands of a trustee appointed with the consent of the investor. It therefore follows that the investor's interest in common with the interests of his coinvestors is protected by — (a) Guaranteed title; (b) Excess margin of value; (c) Companj's guaranty of the mortgage contract; (d) Intervention of a competent trustee chosen to enforce performance of legal technicalities according to the nature and terms of the participation and the mort- gage. The point to be observed m all this procedure is that the method is one of resale, not one of rehi/potJiecatioii. Obvioush' these institutions combine two most important func- tions: on the one hand, that of guarantor of title and mortgage; and on the other, that of a distri})uting medium which reaches out into those sources of financial capital to be drawn upon only by means of direct appeal to the private investor. It is to the private investor that the title and trust companies offer real estate d(>bentures and real estate collateral trust bonds and it is due in a large measiu-e to the contribution of the small investor who acquires a partici[)ating hitorest in iaj-ge mortgages that these concerns can operate so successfully. To iiulicate what an important part the feature of title gnaianiy ])luys in real estate development, attention is cjdled to the following abstract from the Annual Report of the Federal Farm Loan Board for 1918, which states: It was found in many States that the abstracting of titles to farm laiula wud prac- ticallv an unknown business. The offices of an abstractor were usuallx- jHTformed by 208 KCONO.MUS OF TIllC CONSTRl'* TlOX INDUSTRY. a title searchiM' wlioso piartifo was to mako for liia client in oaf h instanfo eiuh search of the record as he deemed the case in liand to demand, and nsnally to report verhally thereon. It was properly felt hy the hanks that they must have ovifU'neo of ineonteetahle title. Early in the present year a plan was worked out hy which the leading surety com- panies of the country have united in writing honds guaranteeing the interested hanks from loss by reason of failure of title. This guarantee is based upon a search of the record for the period, the running of which, in the several States, vests title by posses- sion, this period varying from 8 to 21 years. This })ond is furninhed at a co.st of one- fourth of 1 per cent of the amount of the loan with a minimum charge of .'*2..50, which expense is borne by the borrower. Tt is found that this method reduces the cost of record search so much that the total expense to the borrower is much less than under the former system, while delays on account of title are largely eliminated and the security of the banks against failure of title is made absolute. As this business is profitable to the surety companies, the question naturally arises, could not the banks, which would have no expense in that connection, insure the same safety at a less cost to borrowers by collecting even a smaller sum and placing the same in a title guaranty fund to cover loss by possible failure of title. Building and loan association methods. — Operating methods of building and loan associations hare enabled them in some cases to go through 38 years of business experience v.ithout losing a doUar. The resources of the building and loan association consist of the stock subscription of its members and the moneys left with it by depositors who use it as a savings bank. A man applymg for a loan subscribes for stock equal to the loan which he desires to receire. He is then obligated to pay for his stock at a weekly rate per share. This method of installment payment upon shares really represents a method of installment payment of the mortgage loan. There are various procedures foEowed in respect to the method of issuing shares. The principal plans are still known as the tei-minating, serial, or continuous plan. Loans arc made to subscribers in the order of their apphcation, there being always a long waiting list. Before the loan is made the lot where construction is to take place and the type of builduig must be made known to the association and approved. If the subscriber o^vns his land, he may immediatc^h" obtam a loan of two-tliirds of the combined value of land and buildmg, provided there are funds available to lend him. If the subscriber does not ovm. the land, he can not obtain his loan until his share payments have created an ec|uity equal to one-third of the value of his future home. Sometimes he is able to build even earlier than this date, because he gets a contractor to take a second mortgage on his prospective home, the first mortgage going to the building and loan association. In general, then, a man who has small capital — and in some cjises no capital at all, only an earning power — is enabled to build by the help of the buildijig and loan association out of savings. The present limitation upon the effectiveness of these associations is the lack of ECONOMICS OF THE CONSTRUCTION INDUSTRY. 209 capital behind them. What they need is the mechanism for making liquid the real estate mortgages which are their assets — ability to rediscount them at a reasonable rate of interest. Insurance company methods, — To a large extent hisurance com- panies are able to deal direct with borrowers that apply for the use of mvestment fmids for real estate purposes, and these companies therefore maintain in each important city included in their lending field one of their own property inspectors and representatives. However, there are also two classes of independent agencies through which these institutions deal. Some of these agencies submit appli- cations received from private parties for proposed loans direct to an insurance company, so that in all cases where the security is satisfactory and the application is approved, the loans are made out by the lender to the borrower for the hitter's direct account. Also, there is always a number of agencies that make loans to bor- rowers on their own accomit in much the same way that private buildnig operators do, relying on their ability to sell this paper afterwards to insurance companies or other fu-ms. In this way substantial lines of mortgage loans are accumulated for ultimate resale, sometimes by the local banks and at other times by pro- prietors and partnerahips in this lijie of business. If, in the process of inspection and examination to which the insurance companies subject these mortgages, all these investments pass the standard requirements, the agency receives payment, and, thus provided with new resources, is able to continue the process by accumulating another line of mortgages. Whether the process be that of buying mortgages on commission or buying them outright for reassignment later, it is understood that under certain conditions any mortgage which is below the standard requirements may be returned to the agent for credit by the insurance company. This has been the prac- tice with respect to farm loans, and, on the authority of recent corre- spondence with insurance companies, essentially the same practice is found in respect to loans on real estate other than farm properties. Large projects whether adjacent or comparatively remote are always of interest as security for building loans, unless the lencHng insti- tutions are compelled by current conditions temporarily to refrain from offering their funds. In the case of smaller projects in remote cities, it has been possible at times for promotera to obtain reason- able assurance of funds from the big institutions iji New York hi such a way that they have been enabled to secure adrsince funds from their local banks, pending completion of the proposed building operations. In normal times this has been a method of procedure often resorted to, and will, of courae, be successfid so long as the borrower can rely on that other very important source of permanent capital supply, the mortgage loan. 121297°— 19 14 210 Ecoi^roMics or thk construction industry. Security required. With respect to the security required by all classes of ijistitutions which huA'e been addressed, including building ujid loan associations, it may be stated that no loan in exct^ss of 70 per cent of the value of the property upon which it is based has been reportetl. Replies to questionnaires which this division has sent out iiuUcate that in some instances the percentage of the amomit loaned to the value of the pro])erty has dropped from 60 per cent in 1913 to oO per cent in 1919 and that the range of percentages of loans to value between ojie locality and another will differ as much as 30 per cent, running from 40 per cent to 70 per cent of the value. In addition to the fact that iji some localities owing to certain local conditions the per cent has dropped to the figure indicated, it must be remembered that in other localities where they continue to quote a nominal percentage within the ranges of 50, 60, and 70 per cent loaned, the lenders admitted that they were valuing ail new construction at a discoimt from the original cost, ranging all the way from 5 to 30 per cent, because of the higher cost of construction prevailing in 1919 as compared with previous years. In coimection with this summary of security required, it will be of interest to quote from a letter written by the president of a large savings bank: Replying to the second question as to what per cent of the value of property waa the limit, this is purely and simply a hypothetical question which is determined by personal opinion or by the appraised value of property. ^^Tiile duiing our 30 yeai-a ol" experience it has been our endeavor to try to make them on what we consider a 50 per cent value of i:)roperty of all descriptions (except that we do not loan on indus- trial jilants), yet the true safety of a loan is that the loan must be small enough so that under foreclosure proceedings the debt would be collected. The Aar\-ing condi- tions existing from time to time make an o]nnion placed at one time not such as would govern at other periods. As to the question of loans made in 1919, and what proportions we consider the value of new liuildings, we endeavor to consider the value of new buildings on the l>aai3 of what the)' are worth through a period of years. There can be no fixed definite rule made as to the basis of a loan on property. The considerations entered into are so varying, both as to the location of property, the normal hazard connected there- with, the changing conditions aiising from changes in values in different sections of the city, the chai'acter of the property and its location, that each case has to be taken up by itself and determined from its characteristics as existing. Rate of interest. The rate of interest on real estate loans varied in 1913 with the section of the country. In thickly settled regions the rate was as low as 4^ per cent, but was much higher in the West and South. In general, the rate ranged from 4j per cent to 8 i)er cent in 1913. Tlie most common rate was apparently 5 to 6 ]>er cent. From 1913 to 1918 there appears to have been an increase of from one-half per cent to 1 per cent in rates the country' over. EG0X0MIC3 OF THE COXSTRUCTIOX IXDUSTKY. 211 Duraiioii of loans. Late in November, 1918, the savings bank section of the ^Vmerican Bankers' Association began an extensive inquiry, both at homo and abroad, into the lending methods of institutional investors in mort- gages and real estate loans. The original feature of this study will be a careful analysis of an un])ublished manuscript prepared abroad relating to the methods and practices followed in Germany and Austria up to 1914. The association also sent to England a special expert to investigate and report on the methods and practices devel- oped there. As earl}^ as November 28, 1918, the association sent out a letter to a selected list of representative State banks, trust companies, and msurance concerns asking the following questions: 1. What is the method employed by you in making and caring for real estate loans? 2. For how long a term do^ you make mortgage loans and what is your practice when the loans matiue? 3. Do you require any reduction of the principal diu-ing the life of the mortgage loans periodically or by call? If so, how and when? d should appreciate copies of forms used in calling of loans or a portion thereof and a description of the method pursued.) 4. Do you requiie a reduction of the principal before renewing a mortgage loan? 5. Do you believe in the amortization of mortgage loans? The secretary of the New York committee very kindly permitted an examination of all the correspondence which had been received m reply to the above questionnaire. Upon the basis of the interest and loiowledge evidenced \^ this correspondence, the committee selected six mortgage leadei-s' in each State to act as subcommittees through wliicti to cany on the association's educational work in stimulating support for more scientific methods of caring for real estate loans. By far the largest number of letters received by the American Bankers' Association indicated that three years was the usual time for a city real estate loan to run. Many of the institutions, how- ever, showed that they were accustomed to grant loans for five 3'ears, but no loans for a period in excess of five years appeared to be granted on city property. Many letters, in stating the duration of loans to be one, three, and five years, contained the following characteristic comments : One year and if security is satisfactory allowed to remain an open mortgage. One year and allowed to run as a due mortgage subject to inspection and reappraisal. One, three, fiA'e years; no longer than fi\e years. One year and continued indeiinitely if interest and taxes arc paid and pmiwrry is kept in repair. limit six years, when buying is guaranteed. Our mortgages are drawn for one to dye ^■ears, but are not paid when due. Wa prefer to limit oin- loans to one year for the reason that we can immediately thcreuftet demand partial payment or an increase in rate at any time. 212 KCONOMICS OF THE COXSTRUCTIOX IXliCSTItY. It is ospecially interesting to note tlie reply of one coucorn, which stated that it had ordinarily been accustomed to lend f<»r three yours, })ut rpxenthj liad reduced its lifnit to one year. No reason was given. The most surprising reply came from those institutions which' reported that "all their loans were made payable one day after date' so that all were 07i call and no renew^als were ever made." Terms of renewal. Some concerns invariably insist upon reduction of principal be- fore extending a loan. Others require reduction of principal only wlion the mortgage is not a very strong one; that is, if the property depreciates or the mortgage exceeds 60 per cent of the property value. In describing their so-called terms of renewal many of the concerns emphaticall}' stated that it was their practice not to renevj; that they allowed their loans to run, b}' continuing or extending tliem. These last two terms indicate that extension is an expedient for avoiding the expense of recording and other legal details that would accompany renewal. The following quotations relating to renew^al of loans are characteristic : "Do not renew loans; they really become demajid after lapse of one year. "Xever pretend to collect mortgage so long as interest is paid." "Seldom extend, unless mortgage is guaranteed at expiration." A very good indication of the extent^ which old-fashioned methods of real estate investmeiits have produced stagnation is found in the foUowdng quotation taken from the letter of one of the large Hart- ford insurance companies: We do not favor loans on oil}' properties, because the borrower has been falsely etjucated to think he has jilaced the mortgage in perpetuity. Terms of principal reduction. Only 18 per cent of the institutions addressed by the American Bankers' Association w^ere not in favor of amortization. The most characteristic objection to amortization given may be indicated by the following quotation: "Mortgage loans that come within the classification of securities prescribed as legal investments for trustees are especially stable; sometimes the land value alone will equal the amount of the loan. For this reason there is no need in tlicse cases of adopting an amortization schedule which would tend to amioy beneficiaries of estates with constant and recmring changes in se- curity held for their benefit." In sliort, the objection seemed to be that trust companies do not wish to be incumbered with the addi- tional detail of administration involved in amortization and there- fore are inclined to plead it would cause inconvenience to their customers. ECONOMICS OF THE CONSTRUCTION INDUSTRY. 213 Characteristic remarks of bankers on the reduction of prmcipal follow : "Reduction is at discretion whenever possible without incon- venience to mortgagor, but no stated periods specified and no special form used." ''Each mortgage treated separately; no rules." "Reduction requu-ed on one-year mortgage after it expires, if security is not satisfactory." "Purchase money mortgage subject to reduction by semiannual payment." "Require reductions annually or semiannually during the life of the mortgage, when surplus security is not fully satisfactory." "No reduction on three-year dwellmg house loans, but in case of large amounts on business or apartment property v,"e generally require annual payment of principal by installment." "No reduction necessary, as all our real estate loans are on demand with interest payable semiannually in advance." (Explanation: Due to Connecticut State laws.) " We re({uire annual payment of 5 to 10 per cent on account of prin- cipal." (Maine.) Title insiiraiice companies of New York. Title insurance companies are described by Cyril II. Burdett in Real Estate Record and Guide of May 18, 1918, as great lending institutions and clearing houses at w^hich the investor in mortgages on real estate is brought into contact with real estate owners desuing loans. Title insiurance companies, with theii* affiliated mortgage guaranty companies, have outstandmg in guaranteed mortgages at the present time over five hundred million doUars. Practically all loans made on real estate in New York City are made by either title insurance companies du-ectly or by lendera who obtain policies of title insurance issued by these companies. The four large companies guaranteeing mortgages have under guaranty at the present time in New York City mortgages amountmg to over four hundred and fifty million doUars. These mortgages have been made for periods of thi-ee years. (Frank Bailey, vice president of the Bond & ^Mortgage Guarantee Co., in Record and Guide, June 29, 1918.) 214 ECONOMICS OF THE OONSTBUCTIOK INDUSTRY. Tiie following statement of the Lawyers' Mortgage Co., of 59 Liberty Street, New York, indicates the distribution of mortgages guaranteed by title insurance companies: Oidstanding inortgayes of the Launjers' Mortgage Co. «.f title. Xfi appeal from the final order of the registrar can be taken after 30 daj-B, when the title becomes conclusive. EC0X0MIC3 OF THE COXSTRUCTIOX INDUSTRY. 215 Tiie costs under the Torrens law, as compared witli title iiisui'ance companies' costs, have been tabulated as follows by Edv.aid Polak, registrar of the County of Bronx (Record and Guide, ^fay IR, 1918) : Original issues. Reissues. Amount. Tide company fees. Torrens '^i*'" Torren.s feet. So, 000 ! $S.5.00 10,0(K) 115.00 25,000 205.00 .50,000 320.00 75.000 3S2.50 10f);000 445.00 841.00 $51.00 S3. 00 51.00 69.00 3.00 81.00 123.00 3.00 131.00 1 189.50 3.00 181.00 1 220.75 3.00 231.00 252.00 3.00 1 1 (A detailed accoimt of the official procedure under the Torrens law IS given by James A. Donegan, registrar of New York County, in Record and Guide of June 1, 1918.) The Torrens law is severely criticized by Cyril PI. Burdett, via'i president of the New York Title & Moi tgage Co. The objection he raises is the inadequate equipment of the offices of the coimty clerks and registrars in New York City for making title researches. They must use the old methods of digging out the chain of title — a long and cumbersome procedure. In connection with the initial registration, Mr. Burdett says, the registrar will be required, in addition to making a search in his own office, to search in the coimty clerk's office, iii. the United States courts, in the offices of the tax collector, the comptroller, and the county treasurer. He will also have to make an inspection of the property to determine all existing easements. In connection with the title examination by a title insurance com- pany, this constitutes a very important part of the service and makes up a considerable part of the expense. He asserts that taxpayei-s under the Torrens law will have to pay for this service. The great amount of detail involved in title examination makes it necessary to employ a large number of persons. The simplest title will require the work of a number of men many days to complete, and Mr. Burdett believes that the registration of a title luider the Torrens system can not be accomplished in 30 days. The New York law le^^&llzing investments and certificates when they cover unencumbered real estate. The Real Estate Record and Guide of May 11, 1918, states that the Gilchrist bill, providing that trust funds may be invested in paits of mortgages held by trust companies and title guaranty companies, was approved by Gov, Whitman. In addition to the investments now authorized by fiduciaries, thoy may invest in shares or parts of bonds and mortgages which themselves are authorized iiivostnuMits for trustees. The shares in which such investments are made are 216 ECONOMICS OF THE CONSTHUCTION INDUSTRY. Aot s\il)()r(liMaio to uii}' other shares and ai'o not subjeft to any prior interest. 'I'lio IxmkI mid mortgage and the insurance policies, guaranties of payment, and other instruments and evidences of title )-elating thereto shall ho hold for the ])enefifc of the poi-sons interested in the security hy a trust company or title guaranty company or- ganized under the laAVs of the State. The experience of tlio title companies and mortgage guaranty com- panies shows that trustees have sought this form of investment in niortgages. It frequently happens that trust funds aie not large enough to take an entire m.ortgage on large units, which are the safest because they affect the most modern huildings and best-constructed buildings. If trustees would make these investments, large sums of money would bo available for mortgage investments which now are not so available. SUPPLY OF CAPITAL FURNISHED BY EACH OF THE CHIEF LENDING INSTITUTIONS IN THE UNITED STATES. Sources of real estate loans in 1913. The following table shows the real estate loans of various classes of banks and of insurance companies and building and loan associations in 1913. Table 85. — Real estate loans. • [In millions oi dollars. 1 Per cent of total. Tnist companies Savings banks Stat e banks National banks Private banks Total banks, June 30 Insurance companies Jan. 1 liuilding and loan association assets Jan. 1 Grand total 576.3 2,303.7 555. 6 76.8 35.2 9.3 37.3 9.0 1.3 .6 3, .547. 6 1,485.1 1,137.6 57.5 24.1 18.4 6, 170. 3 It will be noted that of the total real estate loans shown in Table S5, amounting to $6,170,300,000, banks held 57.5 per cent ; insurance com- panies held 24.1 per cent, and buikUng and loan associations 18.4 per cent. Savings banks alone held 37.3 per cent, or more than either insurance companies or building and loan associations. In order of importance, savings banks rank first, insurance companies second, and building and loan associations third. Trust companies and State banks supplied approximately 9 per cent. National banks and private banks were practically of negligible importance. Increase in real-estate loans by banks, 1913-1918. In Table 80, based upon the annual reports of the Comptroller of the Currency, are shown loans secured by real estate (including mort- ECONOMICS OF THE CONSTRU("TIOX INDUSTRY. 217 gages owned) held by banks and trust companies in the United States in 1918, 1917, and 1918. In this table it was desu-ed to get compar- able statistics for those yejirs. The totals as they stand in the comp- troller's reports are not comparable because in 1913 the comptroller reported real estate loans by State banks in 46 States, by mutual savmgs banks in 17, by stock savings banks in 36, by private banks in 27, and by trust companies in 46, while in 1917 the comptroller reported real estate loans for State banks in only 19 States, for mutual savings banks in 13, for stock savings banks m 9, for private banks in 12, and for trust companies in 23. It is readily seen, therefore, that any conclusions which might be drawn by comparing the reports of tlie comptroller on real estate loans by aU banks in tlio United States in 1913 with the totals he gives for real estate loans in 1917 would be erroneous. To make these figures comparable, it is necessary to fuid for 1913 the total real estate loans by different classes of banks hi only those States which are reported in 1917. Table 86. — Loans secured by real estate (including mortqafjes owned) held bif b(inJ:s and trust companies in the United States. 1 2 In all States reported in 1913. LiaU States reported in 1917. 4 Per cent col- umn 3 is of col- umn 2. 5 InaU States reported in 1917. 6 In all States reported in 1918. Total for all States in 1917 on the assiunption that col- umn5 represents S3 per cent of total. 8 Total for all States in 1918 on the assumption that col- iunn6 represents 83 i>er cent of total. National banks 1913 $76,819,93.3 655,662,331 1,815,585,610 488,159,896 .35,172,653 576,3.34,682 1913 $76,819,933 246,636,479 1,791,901,491 307,340,896 25,-587,541 490,813,465 1917 $185,424,000 341,577,190 2,112,081,686 1918 $185,117,000 290,002,042 2.0a5.,T.53.6.5S State banks Mututa! savings banks Stock savings biinks . 387,312,979 26.4R5.117 Private banks. . 17,878,873 632,846,177 14,725,S&S 555,655,502 Ti-ust companies Total 3,547,695,105 2,939,099,805 83 .3,677,120,9(J5.3,137,o39,207 1 $4,430,266,151 *3,780,167,719 Source: Figures in columns 2, 3, .), and 6 as given in annual reports of the Comptroller of the Currency. In Table 86 the columns are numbered from 1 to 8, and in order to make the meaning of this table clear it is necessary to note lierc the significance of each of these columns. In column 2, under the heading of all States reported in 1913 the total of real estate loans reported by the Comptroller of the Currency for the different classes of banks is given. It wiH be seen that tliis amounts m the aggregate to $3,547,695,105. This represents prac- tically aU the banks in the United States. In column 3, imder the heading States reported in 1917, is given the real estate loans reported in 1913 by the Comptroller of the Cm- 218 ECONOMICS OF THE (CONSTRUCTION INDUSTRY. rency by tlic difTcriMit classes of l^unks in oiil\' those States iiiclufled ill the comptrollor's totals for 1917. In other -words, the figures iii column 3 for 1913 are comparable witli the figiu'es in column 5 for 1917, and do not represent the real estate loans of all banks. In comparing tlie totals of column 3 M'ith column 2, it was found that the former was 83 per cent of the latter as sliown in column 4. In column 5 is giren the total amount of real estate loans by different classes of banks as reported in 1917. As already stated, these totals represent real estate loans by tlie same class of lianks in the same States as figures in colunui 3. In column 6 are given the totals for real estate loans by the different classes of banks as reported by tlie comptroller in 1918. These totuLs were taken from Volume I of the comptroller's report, which does not indicate what States were included, Volume II, which would give this information, not having been printed at date of this writing. It is probable that the real estate loans reported in 1918 were for the same banks in the same States as for 1917 with one exception. That exception is in the case of stock savings banks, for the comptroller's report shows a decrease from $387,000,000 in 1917 to S26,000,000 in 1918. Such a large apparent decrease indicates that California, which reported $361,000,000 of real estate loans of stock savings banks in 1917 must have been dropped from the comptroller's report in 1918. In the case of other classes of banks there ma}' also have been States omitted in 1918 which were not omitted in 1917; but this is not very likely to have been the case. It has already been noted that the real estate loans held in 1013 by banks in those States which are included in the comptrollers 1917 report amount to only 83 per cent of the real estate loans held by all banks reported in 1913. The figure in column 7 was reached by the assumption that the total amount of real estate loans reported by the comptroller in 1917 amounted to the same percentage of total real estate loans held by banks in that year. The figure in column 8 is reached by the assumption that the comptroller's report in 1918 reported 83 per cent of all real estate loans held by banks. In view of the fact already pointed out in regard to stock savings banks that the comptroller did not report all the banks in 1918 that were reported in 1917, the total amount shown in column 8 is probably too low. To summarize what has been said in detail above: The comptroller's report in 1917 reported real estate loans by dif- ferent classes of banks in only part of the States. In these sain-' States in 1913 he reports real estate loans for the different classes o: banks amounting to only 83 per cent of the real estate loans reported for all banks in all States that year. Assuming that the real estate loans reported in 1917 were only S3 per cent of all real estate loana ECOXOMICS OF THE CONSTRUCTION INDUSTRY. 219 held b}' banks in that 3'ear, we arrive at the total amount of real estate loans heW by banks in 1917, $4,430,000,000. On the same assumption that the comptroller in 1913 reported 83 per cent of the real estate loans held by different classes of banks in all States, we arrive at the figure $3,780,000,000 of real estate loans held ny all banks in 1918. There is reason for tliinking, however, that the real estate loans reported in 1918 represent less than 83 per cent of all real estate loans and that the actual amount of real estate loans held by banks in 1918 probably amounted to $4,100,000,000. Increase in combined real estate loans of banks, insurance companies, and building and loan associations, 1913-1918. Table 87 gives the real estate loans of banks, trust companies, and insurance companies and the total assets of building and loan associations in the United States for 1913, 1917, and 1918. In this table the results reached in Table 8G were utilized except for the year 1918. For 1918 the figure $4,100,000,000 w^as taken as representing the total real estate loans held by banlvs and trust companies. Tliis figure is $320,000,000 larger than the figure reached on the assump- tion that the comptroller reported S3 per cent of all real estate loans held. This increase in the estimate is justified by the apparent fact that the California stock savings banks with real estate loans of 8361,000,000 in 1917 were not included in the 1918 report of the comptroller. The figures for insurance companies were taken from the Insm'ance Yearbook, published by the Spectator Co., and represent the amount of real estate loans held by insurance companies on January 1 of the years 1913, 1917, and 1918. Tlie statistics for building and loan associations were taken from the Proceedings of the Annual Convention of the I'nited States League of Local Building and Loan Associations and represent the total assets of these institutions on January 1, 1913, 1917, and 1918. By adding the loans of banks and insurance companies to the total assets of the building and loan associations, practically all of which represent real estate loans, a grand total in round num])ers was reached of $6,170,000,000 in 1913, $7,921,000,000 in 1917. and $7,890,000,000 in 1918. These figures show an increase in real estate loans held by these institutions of $1,751,000,000 in 1917 over the amount lu-ld in 1013, and an increase of $1,720,000,000 in 1918 over the figure for 1913. This represents an increase in both 1917 and 1918 of approximately 28 per cent over the figure for 1913. 220 ECONOMICS OF THE CONSTRUCTION INDUSTRY. Tabi.k 87. — Real estate loaaa of banks, trust companies, and insurance companies and total assets of building and loan associations in the United States. Hanks and trust companies, .Time 30 Insurancf" lompanies, Jan. 1 £uiIdLug uud loan association a^^sets, Jan. 1 r.rand total Increase over 19i:i Increase over 19i:j per cent. 1913 $3, .547, 695, 105 1,4&5, 108,814 1,137,600,648 6,170,404,567 $-l,t.'50, 266,151 1,892,607,910 1,. 598, 62.^1. '56 7,921,-502,203 1,751,097,636 28 $4,100,000,000 2,020,873,063 1,769,142,175 7,890,015,838 1,719,611,271 2% Sources: Bank and trust company statistics derived from the comptroller's report; iasorance statistics from Insuranc-e Yoarl)ook, published by the Spectator Co.; building and loan statistics from Proceedings of Annual Convention of the United States League of Local Building and Loan Associations. Increase of real estate loans compared with various indices of national expansion. It is interestiug to compare tlie increase in real estate loans held by the chief lendmg institutions ■with various indices of national expansion as shown m Table 88. Table 8S. — Increase in the real estate loans as compared v:ith various indices of national erpans-ion. [In millions of dollars.] Amount in 1913. Amount in 191S. Pcrcent- aj-'c i u- crpase from 1913 to 1018. Combhied real estate loans of hanks, insurance companies, and build- 6,171 3,548 4,513 14, 657 17,476 7,362 34,500 6. ax) 7.890 4,100 5,850 22, 575 27,808 12,362 45,000 (1917) 1>.,000 P(TC(nt. as 16 Bank loans secuied hy collateral other than real estate 30 54 59 68 Dr Friday's estimate of iiatioiialiucome of the United States... 30 Dr. Friday's estimate of savings in the X'nited States 200 It shoidd be noted in the table that the combined real estate loans of banks and insurance companies and building and loan associations increased only 28 per cent in five years, and bank loans secured by real estate mcreased only 16 per cent. During the same period bank loans secnred by collateral other than real estate increased 30 per cent. Total loans and discounts of banks in the United States increased 54 per cent. Individual bank deposits in the United States increased 69 per cent, stocks and bonds owned by banks and msurance companies increased 68 per cent, and sav- ings ill the United States are estimated to have increased 200 i>er cent. ECOXOMICS OF THE CONSTRUCTION INDUSTRY. 221 Real estate loans of banks compared with their total resources. The fact that real estate loans of banks in the United States have not kept i^ace with the total resources of banks is sliown clearly in Table 89. Table 89. — Real estate loans of hanks compared v.ith their total resources in 1913. 1917, and 19 IS. (In millions of dollars.] Total resources. Real estate loans in- cluding mortpases owned. Per cent real estate loans com- prised of total re- sources. 1913 25, 712 37,126 40, 726 3, 548 4.430 4,100 13.9 1917 11.9 191S 10.1 The foregoing statistics are from the annual reports of the Comp- troller of the Currency for the years 1913, 1917, and 1918. The ilgui'es for real estate loans as given by the comptroller were modified for reasons already explained in this chapter. The figures actually given for real estate loans by banks in the comptroller's reports were $3,677,000,000 in 1917 and $3,138,000,000 in 1918. It will be noted that Table 89 shows real estate loans by banks com- prised 13.9 per cent of their total resources m 1913; 11.9 per cent in 1917, and 10.1 per cent in 1918, If the figures given hi the comp- troller's reports for 1917 and 1918 had been taken the percentage of those 3"ears would have been considerabh' lower. If the real estate loans of banks in the United States had mcreased from 1913 to 1918 m proportion to the total resources of the banks tlicy would have amounted in 1918 to $5,620,000,000, or $1,520,000,000 more than in the estimate above and $2,482,000,000 more than the figure given in the Comptroller's Annual Report for 1918. Resources of savings banks, insurance companies, and building and loan associations compared with resources of banks other than savings banks. The total resources of mutual savings banks, insurance companies, and buildmg and loan associations, wliich are the principal source of real estate loans in the United States, have increased much less rapidly than the total resources of banks other than savings banks, as shown m Table 90. 222 ECONOMICS OF Ttii: CONSTRUCTION INDUSTRY. Tahi.k 00.- 7'ol(il nnourrrs of nnitnal aaviruia bfinl.t, innnrance comftanici^ an-d ImiJd- irifi and loan ussocintions compared ivHh the loUd. resources of banks oUicr Utcni itivlval sdoinijs banks in the United Stales. [In miUions of dollars.!^ 191S Increase. SaviiiKK banks, June 30 Insiuaiicc companies, .Ian. 1 Building; and loan a-s,sociations, Jan. 1 All banks, other than mutual .savings banks, June 30 4,«>19 5,941 1,709 35,907 Prrcfnf. 17 35 56 66 Tt will be noted in Table 90 that the resources of savings banks increased only 17 per cent from 1913 to 1018, whereas the resources of all other banks combined mcreased 66 per cent. Insurance companies did better than savings banks, but the relative increase was but little more than half as great as that of banks other than savhigs banks. Building and loan associations, howcA^er, increased in resources almost in proportion to the banks, but their total re- sources, as wOl be noted, are much smaller tlian the resources of savmgs banks and insurance companies. Real estate loans of New York banking institutions. The conclusions reached from a study of the banking statistics of the United States as a whole may be confirmed by a study of the banking statistics of the State of New York. The problem of sta- tistics that are not comparable for different 3'ears does not arise in the study of banking statistics for this one State. New York banks, exclusive of national banks in New York, hold nearly one-sixth of all the banking resources of the country. Tables 91, 92, and 93 are based on the New York State Bank Reports. Table 94 is from the annual reports of the Comptroller of the Currenc}'. From these four tables relating to New Yoik banks the following facts ma}' be noted: In 1917 there were reported in the report of banks of deposit and discount and private banks of New York 880 financial institutions. These institutions had resources in the aggregate of $6,410,016,000. This did not include the resources of the national 1>anks which do not report to the State banking department. The most important classes of financial institutions in New York are State banks, savings banks, trust com})anies, private banks, in- vestment companies, and savings and loan associations. These were the only groups reported in the New York banking reports in 1917, which held in the aggregate resources in excess of §10,000,000. Sav- ings banks, trust companies, and State banks held about 97 per cent of the total resources of financial institutions reportmg to the State. EC02^rOMICS OF THE COXSTRUCTIOX IXDUSTKY. 223 From (he New York banking reports, as showji in Table 93, it aj^pears that the mortgages owned by trust companies increased 3 per cent from 1914 to 1917, and that the loans and discounts secured b\' real estate collateral held ])y trust companies increased 2 per cent from 1914 to 1917. During the same period loans and discounts secured b}^ other collateral held l)y the trust companies of New York increased 55 per cent. Loans and discounts and bills })urchased, not secured by collateral, inci-eased 166 j)er cent. Stock and bond in- vestments increased 88 per cent, and the total resources of the New York trust companies increased 84 per cent. It should be mentioned that the mortgages owned by trust companies in 1917 amount to 894,000,000 as against loans and discounts secured by real estate, collateral amounting to S14,000,000. In the case of State banks, mortgages owned increased from vSep- tember, 1914, to September, 1917, 26 per cent, and loans and dis- counts secured by real estate collateral decreased 16 per cent. If the two figures are combined the increase is 4 per cent. Mortgages o\\^ied b}' State banks in 1917 amounted to 814,000,000 and loans and discounts secured by real estate collateral to $10,000,000. As against the increase of 4 j)er cent from 1914 to 1917 in the amount of mortgages owned and loans and discounts secured by real estate collateral, the loans and discounts of State banks secured by other collateral increased 21 per cent. Loans and discounts and bills pur- chased not secured by collateral increased 13 per cent. Pubhc se- curities owned by State banks increased 282 per cent, private securi- ties 55 per cent, and total resources 36 per cent. The conclusion to be drawTi from these statistics is that real estate loans by banks and trust companies in the State of New York have not increased in recent years in proportion to other assets of these institutions. Table 94 gives real estate loans and total loans and discounts, total investments, and total resources of State banks, mutual savings banks, private banks, and trust companies for each year from 1914 to 1917. It also shows the total increase in percentage in the various assets of the different classes of banks included, and the percentage of the total assets of the kinds included in the total held by each class of banks. It may be noted in this total that mutual savings banks in 1914 held 89.3 per cent and in 1917 89.1 per cent of all the real estate loans held by these four classes of banks. Trust companies held most of the remainder, 9 per cent in 1914 and 8.9 per cent in 1917. From 1914 to 1917, the table shows that State banks increased their real estate loans 38 per cent, mutual savings banks 11 i)cr cent, trust companies 12 per cent, and that the total real estate- loans shown by the four classes of institutions increased 11 per cent. (It may bo noted, at this point, that the increase in real estate loans shown for 224 ECONOMICS OF THE CONSTIIUCTIOX INDUSTRY. tho State banks is much larger tlian the increase shown for these banks in the table based on New York State banking statistics.) Table 91. — Number of financ'ud i institutions of different classes in Xen: Yorh State, VJ14-1017. 1914 1915 1916 1917 Tianks of dopasit, and discounts (State banks) . Siivings hanks Trnst companies I'rivato bank,-; , iSafc-tioposit companjos Invest meni companies .Security companies Savings and loan associations Build inf£ lot associations Land Bank of New York Credit unions , Personal loan companies Personal loan brokers 107 140 81 47 10 2 241 1 200 140 81 75 46 11 2 245 1 202 141 89 76 47 12 2 251 1 1 14 19 2 212 141 90 80 48 17 2 152 1 1 14 19 2 Source: Report on Banks of Discount and I'rivatc Bankers, Xew York, 1914-1917. T.^BLE 92. — Resources of different classes of financial institutions of New York State 191 4-1917. [In thousands of dollars.] Banks of deposit and discount (State banks) . Savings banks Trust companies Private banks Safe-deposit companies Investment companies Sesurity companies Saving and loan associations Builduit; lot associations Land Bank of New York Credit unions Personal loan companies Personal loan brokers 658,768 1,912,0^1 1,714,954 8,905 18.502 2. 174 04,250 27 091 671,142 930, .596 153,537 14,094 8,855 19,061 2,184 08,476 27 10 4,380,418 4,871,205 5,841,505 840,704 2, 053, 172 2, 026, 431 15,078 8.913 21,590 2, ISO 72,420 27 152 08 812 12 933,437 2,172,916 3, 164, 170 15,505 8,901 32,624 2,190 79,630 7 476 212 993 15 6,410,016 Source: Report on Baaks of Discoimt and I'rivate Bankers, New York, 1914-1917. ECOXOMICS OF THE COXSTRUCTIOX IXDUSTEY. 225 Table 93. — Real estate loans and oilier assets of trust companies and State banks of New York State. [In millions of dollars.] 1914, 191.5, 1916, 1917, Sept. Sept. Sept. Sept. 81 81 89 99 91.5 90.5 91.5 94.1 13.9 14.2 15.4 11.2 ,5.s2. 083.4 927.7 901.0 191.2 210.9 324.5 509.0 4.57.8 497.0 5S2.8 860.7 1.715.0 2,155.5 2,026.4 3,164.1 197 200 202 212 11.1 11.7 13.2 11.0 12.0 11.3 10.7 10.1 140.3 100.0 175.8 169.5 222.5 203.0 220.4 2.50.7 25.7 18.9 24.2 98.2 (11.7 75.2 102.9 95.5 085.8 671.1 840.7 952.4 Per cent increase, 1914-1917. TPUST COMPANIES. Number of companies Mortgages owned Loans and discount.^ secured by real estate collateral. . . I^oans and discounts secured by other collateral Loans and discounts and bills purchased not secured by collateral ". Stock and bond investments Total resources STATE BANKS. Nmnber of banks Mortgages o^\^led Loans and discounts secured by real estate collateral. . . Loans and discountssecured by other collateral Loans and discounts and bills ptirehased not secured by collateral Stock and bond investment public securities Private securities Total resources 3 2 55 166 »i 84 26 a 16 21 13 282 55 36 a Decrease. ?ourcc: P.oport on Banks of Discount and Private Banks, Xew York, 1914-1917. Table 94. — Real estate loans and other assets of banhs and trust companies in New York State, 1914-1917. [In thousands of dollars.] 1914 1915 1910 1917 Total increa.se, 1914-1917. Per cent of total iu 1914, by cl;is.ses of banks. Per cent of totaliii 1917, by classes of banks. Real estate loans: State banks 17,751 1,007,754 1,675 100, 700 21,022 1,008,414 1,8.S4 104, 534 23.790 1,059; 403 1,090 107, 707 24, 456 1, 113, 895 Ft r mil. 33 11 1.6 2.0 Mutual s;xvings banks 89. 3 .1 9.0 83.1 Tvii.^^t- nfimp,-|nir>s ^ 112,264 12 8.9 1,127,880 375, 700 1,010,374 4,299 &S8, 700 1,13.5,854 375. 243 1.02(;;902 3,927 959,919 1,191,990 407,529 1, 059, 570 2,040 1,374,775 1,250,614 462, 697 1,139,518 2,289 1,658,155 11 24 12 a 48 87 Total loans and discoimts: State banks 16.5 44.3 .2 39.0 14.2 Mutual savings banks Private banks 35.0 eo.i Trust companies 50.7 Total loans and dis- 2,279,1.39 S1,(W2 761, 105 7, 510 433, 829 2,365,991 92. 250 761,093 5,7S2 478, 628 2, 843, 914 127,345 793, 517 4,332 593, 330 3, 262, 559 145,974 &i5,722 4, 5.58 603, 4(.V} 43 79 11 " 40 10 Investments: State banks 6.4 59. 4 .6 33.6 9.1 Mutual savings banks Private banks 52.9 .3 Trust companies 37. 7 Total investments Total resources; State banks 1,284,076 091,668 1, 933. 803 23', 393 1,818,194 l,338,f03 701, 9.52 1, 955, 962 18.099 2, 02.5, .509 1,516,524 818,384 2,a5.3,172 14,044 2, 620, 8,58 1,599,718 898, 586 2,172.918 15.019 2.941.291 25 30 12 35 (3 1.5.5 43.3 .5 40.7 14.9 Mutual savings banks Private banks Trust companies 36.0 .2 4,0.9 ™ , 4,467,0.58 4,801,522 5, 512, 468 6,027,812 35 ' 1 Source: Amiuil Roiwrts of the 121297°— 19 15 a Pecrea.'=e. ("oniptroller of the Currency, 1914-1917. 226 ECONOMICS OF THE (JONSTltUCTIOX INDUSTUVT. T.vBi.io 95. — Real eslalc Inans anr] total ousels of Xnr Yorl: iSlate Jinancidl {nslitiditma, 1914-lOh. Jun. 1, 1011. Banks Trust compiinie.'- Savings liaiiks Private bankers Sul'e-dcposit companies Investment corapauios Savings and loan ai>soi'iation^ Mortgages o\meil and loan.s on real ostalc coHateral. $17, 701, S.51 107,470,322 983,790,702 Total. Jan. 1, lOl," Banks Trust companies. Savings banks Private Viankers Safe-depo.sit companies Investment companies Savings and loan associations Total. .Tan. 1, 191G. Banks Trust companies Savings banks Private bankers Safe-deposi t companies Investment companies Sa\lngs and loan associations Land bank Total. Jan. 1, 1917 Banks Trust companies Savings banks T'rivate bankers Safe-deposit companies Investment companies Savings and loan a^^iociations Land bank Total. Jan. 1, 1918. Banks Trust companies Savings banks Pri\-aie bankers Safe-deposit (H)ni panics Investment companies Sa\'ings and loan as?ociat ions Land bank Total. Jan. 1, 1919. Banks Trust companies Savings banks Private bankers Sale-deposit companies Investment companies Saxings and loaa a.ssoeiations Land banks Total. 137, 5A) 1."), 770, 1*8 57, 0r)2, tot 1, 189, SS7, r>S9 23,7Cl..r>30 108, 103; 04<^; 1,017,493,972 l,71.5,94o 141, (.CiO 1.5, 079, 2.54 01,119,001 1,228,014,348 23,330,370 104,. 338, 829 1,043,-325,012 1,435,524 ■ 272, 250 1-5,044,032 W, 440, 907 102, 250 Total a.ssets. $625. 80t\ 406 l,574,ii 296-035 13.887.124 70. 427. 790 631.875 8,9(>1,.5S3 18.-501,054 W, 249, 990 Peropnt«i« oltoiil a.Hset3 loaned on real estate security. .3. T2 0.'i2 51.. iS 1.3-23,772.408 4, 218, 573, 171 048,234,301 1,740,-598,437 1,912,204,573 18,402,092 8,8-5-5,201 19,fiCl,233 OS, 170, 499 4,41. 42 51-43 4-21 2.81 2!>-02 87. 8! 0-> Q7 2.21 '.;. jt 4-'. 47 3. .■2 2. 84 14. .5.'^ 94 01 NOTE. — While all the in.-se« of tabulatioii. ECONOMICS OV THE COXSTRUC'TIOK INDUSTRY. 2 '2 7 As against an increase of 11 per cent in the real estate loans of those four classes of banks from 1914 to 1917, their total loans and discounts increased 43 per cent; their total investments, 25 per cent, and their total resources, 35 per cent. A point of prime importance is that New York savings banks, the main source of real estate loans, increased much less rapidly in re- sources than trust companies and State banks. Whereas the resources of savings banks increased onl}'^ 12 per cent from 1914 to 1917, the resources of State banks increased 30 per cent and trust companies 63 per cent. (Aii even greater increase is shown in the statistics from the State banking department, in the case of State banking companies, 36 per cent, and in the case of trust companies, 84 per cent.) In 1914 the resources of savings banks comprised 43.3 per cent of the total resources of the State banks, trust companies, private banks and mutual savings banks, whereas the resources of trust companies comprised only 10.7 per cent, but in 1917 the percentage was 36 per cent for savings banks and 46.9 per cent for trust companies. Table 95 shows the real estate loans of all classes of New York banking institutions as compared with their total resources from 1914 to 1919. It shows the general tendency for the percentage of total resources invested in real estate loans to diminish from year to year. Developments during 1917 and 1918. As has been pointed out, real estate loans of the chief lending institutions have not kept pace in the last five years with the expan- sion of the country in general. Durmg 1917 and 1918 real estate loans appear not only not to have increased in proportion to the general growth of the country but to have actually decreased in amount, particularly during the latter part of this two-year period. The replies to questionnaires received from ten important savings banks in the New England States, Pennsylvania, New York, Mary- land, and Minnesota sliow real estate loans in December, 1916, of $131,591,000; in November, 1918, $132,661,000; and in February. 1919, $131,710,000. The increases from December, 1916, to Novem- ber, 1918, amounted to 0.8 per cent and from December, 1916, to February 1, 1919, to 0.09 per cent; that is to say, the decrease from November 1, 1918, to February 1, 1919, almost equaled the increase from December 31, 1916, to November 1, 1918. Returns from the State banking departments of Ohio, Misstuui, and New York for 1918 have been received. The Ohio report shows the following facts in regard to real estate loans of banks : The total of loans and discounts (on Dec. 31, 1918) was $54.3,041,830, :in inrreaso of $15,003,029 since August 31, 1918, and an increase as compaicd with Decoml^cr, 192 7, of SI 1,214,960. Loans on real e.-tate were reported at $195,849,270, or a further decline in such loans of $3,512,782 since August 31, 1918. The percentage of loans and did- 228 ECONOMICS OF THE CONSTRUCTION INDUSTRY. counts to total deposits in Rtato banks Deoembor ."11 [191S], was 03.28 as compart-d with G1.37 August 31 [lOlS], and G2.42 Bfccmber 31, 1917. The proportion of loana on real estate to capital, surplu.'<, and total depo-sita December 31 [191S], was 20.45 i)er cent as compared with 21.10 per cent on August 31 [1918], and 22.17 per cent as compared with December 31, a year ago. The decline in real estate loans during the year was approximately $11,500,000. The 1018 report of the Bunk Commissioner <»f Missouri shows that tlie real estate loans held by the bank and trust companies of ^lissouri amounted to $70,262,000 on November 4, 1918, as against $75,222,000 on NoYeml)er 20, 1917, a decrease of almost $5,000,000. During the same period ' the total resources of these banks increased from $667,546,000 to $761,992,000. The reader is referred to Table 95 for a comparison of real estate loans of New York banking institutions on January 1, 1918, and January 1, 1919. A considerable decrease is sho"\\Ti. FACTORS TENDING TO RESTRICT THE SUPPLY OF CAPITAL AVAILABLE FOR INVESTMENT IN BLTLDING ENTERPRISES AND PERMANTJNT MORTGAGE LOANS. Introduction. It is a difficult matter to weigh accurately each of the separate causes which since 1914 hare contributed to the changed conditions in the supply of real estate loans. Among the temporary causes have been the issue of Liberty bonds and the financial restrictions on nonessential construction; in fact, all the various modifications of control over manufactm-ing, transportation, banking and invest- ment. The permanent causes tending to prevent expansion of out- standing mortgages include lack of standard methods of issue, lack of marketability, and changes in the bankmg system which have led the flow of banking resources into the chamiels of conunerce and even of speculation and away from real estate mvestments. In the firet instance, as the Government increased its borrowings and the banking system gamed control of financial resources, investment funds were directed away from those activities which normally required an increasing amount of financial accommodation. One of the most ])rominent of these activities was the buildmg mdustry. Then, too, contracts for war equipment compelled reallocation of labor and materials until the forces of production as well as those of banking credit, were sliifted from less essential building activities to the needs of war. Some of these causes have contributed toward keeping down the volmne of loans offered whde others have operated toward reducing the demand for loans by making construction impossible. ECOXOMICS OF THE COXSTRUCTIOX IXDUSTKY. 229 War restrictions. It may be of interest to enumerate some of tlie restrictions that were imposed to limit activities in nonessential lines. The War Industries Board published regulations withdrawing priority assistance from projects not contributing to the processes of war. The Railroad Administration established priority shipment orders carrying preference in supply and movement to many com- modities and specifically excepted many other commodities, including that portion of building materials destined for nonessential construc- tion. ■ There was a 50 per cent to 75 per cent reduction in numbei-s of styles and sizes and in quantity of production in many lines of manufactured commodities. These no longer were available ror build- ing. The War Industries Board published a classified preference fist of industries and plants to be considered as war essentials and thereby specifically restricted normal activities in the building indus- try. The Capital Issues Committee of the Federal Reserve Board curtailed nonessential credits, thus discriminating against the activity of the title guaranty and mortgage sellers of real estate debentures and real estate collateral trust bonds, whUe on the other hand it became the duty of the War Finance Corporation to provide credit facilities for the support of war activities not othei-wise provided for. Lack of standardized methods. In discussmg the causes which may further restrict an increase in the amount of capital available for investment in budding loans and mortgages, it is important to note that real estate lending is a process of investment not subject to standardized conditions except those wiiich obtain to a limited extent wdthin the markets reached by the title guaranty and trust companies. This lack of standard conditions in the issue of most mortgage loans deprives the security f a very desirable quality, know^n as marketability. The person who invests in a real estate loan is subject to the incon- venience and expense of making dh'ectly or indirectly a special and often costly investigation of the security offered, and although the investment may be the most excellent security he has no open general market on which to sell and is likely to have to w-ait for the loan to matm-o before he can recover liis capital. This is a disadvantage which may tend to deflect the current of available funds for invest- ment away from real estate loans into other channels. For example, in the State of New York stock and bond investments of banks increased 25 per cent from 1914 to 1917, while real estate loans of these banks mcreased only 11 1 ])er cent. State laws not to blame. In this connection it is frequently asked, Are State laws to blame for reduced investment in mortgage loans ? In reply to this question, 2ci0 ECONOMIC-^ OF Till': CO-VsTRL'CTIuX INDUSTRY. wc refer to Mr. Coulter's reinarks ])efore the Rural CreiHts subcom- luittee, wherein he stated: It is a fact that practically every Slate i^ank ia the l.uit-ed Stares iiuw (uuld legally knd on real estate security. I have got the banking laws of cver\- State and hiue studied them to see to what extent the State Imnks and private banks could lend \\-ith real estate as security, and there is almost no limitation. But at the same time the State banks and privates banks do not lend to a very largf extent on mortgages, because they are in the same system with the national banking aesociationfl and have to do the same sort of business in order to keep in the same class and gd thfir paper discounted. They imitate the national bank because the national bank is the stand- ard; that is the style; that is the method ot doing busin'-ss. They have constant intercovu^e with and follow the lead of the national lianks. Mr. Coulter at that tune was evidently convinced by a study of the digests of State banking laws that State banks were allowed to loan money on real estate practically" without limitation. In addition the State lav.'s provide ade(puite security for mortgage loans in the event of default. In this connection we quote an excerpt from the Second Annual Report of the Federal Farm Loan Board: An examination of the laws of the several vStates. pro^-ided for in the thirtieth section of the act, to determine whether these laws were such as to assure the holder of a mortgage adequate safeguards against loss in the event oi default revealed great differ- ences, but with one exception (Texas) failed to disclose any State lav,- which denied adequate security to a mortgage. Real estate loans suffer from discrimination in rediscounting. Having treated of the changed conditions in the supply of real estate capital, and havmg attributed these changes mainly to causes connected with the war, which have now ceased to operate, we nat- urally turn to those other causes which lie witliin the banking system itself. Here we find a process of rearrangement tiiat promises eventually to bring about a marked change in the activities of the banks. Tliis opinion is baSed on the fact that nonmember banks are becoming more and more united in their efforts to gain member- sliip in the Federal Reserve system. Tu^o lines of activity are being applied to bring this about. One is the educational campaign being carried on by the American Bankere Association to secure State legislation enabling State institutions to join the Federal Reserve system, without firet haA'ing to become national banks. The other line of activit}' is the educational campaign bemg conducted by the United States Coimcil of State Banking Associations to interest ])oth State and National legislatm'es and the constituent members of the association in proposed amendments pertaining to the operation of the Federal Reser^-e act, aU of which amendments are drawn with a view toward creating greater bankmg uniformity. For the reason that national banks will be allowed to compete with State banks, it will be to the interest of State banks that State laws also shall allow their local institutions a similar latitude. The net result will ECONOMICS OF THE C'OXSTRUCTIOX IXDUSTRY. 231 be that each separate institution eventually will bo able to offer to its customers all the bankins; sei*viees that any other banking iusti- tution conducts. We ma}' look foi-^^ard to the time when each bank gradually will approach a new standard by developing a com- plete combination of all banking sei-vices until aU banking sei*vices win be offered by ah banks and each bank will be like eveiy other bank. To show to what additional length it is planned to carry this reconstruction process, we ciuote. from the Fifth Annual Report of the Federal Reserve Board, a proposal to amend section 23 of the act: The board has, on p>'evioiis occasions, recommended to Congress that the Federal Reserve act be amended so as to permit national banks under certain conditions to establish branches not to exceed ten in number ■vdthin the corporate limits of the city or t tighten up ou our commercial loans and see that these ai-e of such chaiucter that they are available ft.r rediscount and in this way avail ourselves of the rediscount privilege Arithout disposing of thr- piivilpgo of real estate mortgage loans business which we nu authorize them by law to do a certain tiling, .they know in practice they must IoILav the general system of national banks, because they must deal through national banks and have finally to turn to them; they kn(^w tliat their ]>aper nn land is not good; they are modeled after the national banks in their business forms and business methods and you can not get away from that. As excellent an authority as the Federal Reserve Annual Report of 1919 m reviewing the efforts of nonmember banks to join the system, states: That the entrance of mutual savings associations and stock sa^-ings banks into the Federal Reserve system will give an added impetus to the movement for State legis- lation authorizing such associations and banks to invest a larger proportion of their ?ssets in liquid securities. This same report continues: If these associations and banks are admitted tv membership, they will be aide to transfer to the Federal Reserve banks a fair proportion of their cash resources and of balances carried with other banks and will to that extent supplement the resources of the Federal Reser^-e banks. The banking power (,>f the Federal Reser\^e sj'stem vriU be still frnther increased when such associations and banks are authf;rized by State law to invest a large proportion of their assets in bills, notes, di-afts, and accept- ances eligible for rediscount or purchase by Federal Reserve banks. From the foregomg it may be inferred that if savmgs banks enter the Federal Reserve system, they will within a few years have a much smaller proportion of their assets invested in real estate loans tlian they have at present. An attempt to analyze the trend of developments that inevitably must accompany and foUow the internal reconstruction of the bank- hig system, gives rise to the belief that funds destined for invest- ment in real estate mortgages no longer will follow old channels in then- customary volimie. In fact the old channels and arteries of the new member banks are becoming adapted so rapidly to the ele- ments of commercial cumulation that many investment institutions ah"eady strongly advocate the apphcation of amortization principles to then' mortgage business. This is an important step toward standardized methods for handlmg mortgage secm'ities and should afford a sound basis upon which a Federal mortgage bank can safely issue on broad lines under Government supervision real estate debeutm-es and collateral trust bonds. ECOXOMICS OF THE COXSTRUCTIOX INDUSTRY. 233 In discussing the mortgage loans of institutional investors, !Mr. Harding, of the Federal Reserve Board, as early as 1914, said: The Federal Reseive banks can not with safety invest deposits on demand in non- liquid l(ians extending over several yeai-s. This is the function of mortgage banls which by means of their bonded obligations may secure for a longer period of years the funds which they propose to loan on long time mortgages. This same trend of thought is to be observed in a letter rccciA-cd from the Baltimore Trust Co., from which is quoted in part: Obviouslj- mortgages should have no place in the assets of Federal Reserve banks by reason of the relation of such banks to then" member institutions; such members should also refrain from accepting such collateral in any large way. The Federal land banLs limit their activities to country propertj'', with the result ultimately that a gi'eat number of the interior banks of the countrj^ should be relieved of congestion ever present %\'ith them by reason of the fact that they are carrjdng so many moilgages. 0^ving to war conditions the farm banks have not had a fair chance to fulfill their pur- pose, but this will come. I do not know of any economic or practical reason why land banks under an amended law should not be permitted to care for city mortgages, which if half well selected are surely as sound as is the average farm mortgage and especially so should cotton ever get down again to 8 cents a pound witli wheat at $1 a bushel. The need for improved facilities. In conclusion, it seems advisable that serious consideration be given tovrard devising some improved machinery for making and marketmg real estate loans. This woiud involve: first, a standardized and simj)li- fied method of examination of the secm-ity offered on real estate loans; and, second, a system of real estate mortgage banks wliich would rediscount real estate mortgage loans and issue thereon real estate mortgage bonds. It is believed that such a system would decrease the cost of loans to the borrower and by facilitatmg loans would increase the volume of building operations. Thus there woidd be a permanent addition to the wealth of the countr}^, and the small investor would gain another opportunity for safely investing liis savings at a fair rate of interest. One of the palliative measures that has been suggested seems to be vrorthy of consideration. Congress has been urged to exempt mortgages to the extent of $40,000 in any one person's hands from the Federal income tax so as to assure the average mortgage in- vestor a net return commensurate with that from municipal bonds, Government bonds, farm loan bonds, and other similar investments not subject to the Federal income tax. Any such measure that would divert the flow of investors' money back into the channel of mortgage loans would encourage building, which adds to the income produchig wealth of the Nation, so that, in the long run, the Govern- ment would probably recoup the loss suffered through the tax exemntions. 234 ECONOMICS or TUK COXSTnrCTTON IXDV-STRY. Coiidusioiis. The following conclusions inav be drawn from tlie foregoiug study: 1. The methods of maiving real estate loans are not sufficiontly standardized, and hence are more expensive than need be. Borrower and lender are not thi'own together in the present system. The cluumels tlu'ough which the funds from the lender to the borrower should flow freely are obstructed. 2. The main sources of real estate loans are sayings banks, title guarantee and trust companies, insurance com])anies, building and loan associations, and individual lenders. 3. Real estate loans b}' lending institutions did not increase in proportion to the growth of the country from 1913 to 191S. 4. Real estate loans of banks did not grow so rapidly as bank resom'ces in the United States from 1913 to 1918. 5. Saving's banks, insurance companies, and building and loan associations did not grow so rapidly in resources as banks other than savings banks in the United States. 6. Savings banks in New York State did not grov.- so rapidJy as other classes of banks in New York from 1914 to 1917. 7. Real estate loans of banks in New York State did not grow so rapidl}^ as the total resources of New York banks from 1914 to 1918. 8. Statistics indicate that diu'ing 1917 and 1918 there has been an absolute decrease in real estate loans held by financial institutions. 9. The main causes of the failure of real estate loans to increase in proportion to the general growth of the country during the last five years have been the lack of marketabilitv of real estate loans, lack of standardization in making loans, changes in the banking system. Government restrictions during the war, and the issue of Liberty bonds. 10. A general amortization system for real estate loans would be Ixnieficial. 11. Improved machinery is needed for making and marketing real estate loans. This woidd involve first a standardized and simplified method of examination of the security offered on real estate loans, and second a system of real estate mortgage banks with the rediscount privilege. VI. RENTS AND LAND VALUES. RENTS OF HOUSES AND APARTMENTS. As a basis for a tentative estimate of the advance in rents of vrorkingjnen's houses durmg the war, there are available two studies made by the National Industrial Conference Board, of Boston, Mass., besides the statistics on rents published by the Bureau of Labor vStatistics of the Department of Labor and the residts of a question- naire sent to real estate boards of 91 cities of the I'nitcd Stales by the Division of Public Works and Construction Development of the Department of Labor. From its first study, covering the period from July, 1914, to June, 1918, the National Industrial Conference Board concluded tliat rents had not advanced more than 15 per cent in a very large proportion of industrial communities. However, the increase varied greatly not only from city to city, but in different parts of the same city. In general, rents did not increase or increased A'ery little in cities or parts of cities m which no increased demand for accom.modations occurred because of war work; for example, in Fall River, Rochester, St. Louis, and the west end of Boston. On the other hand, m certain cities where an exceptional demand for housmg developed in consequence of war activities, a great advance in rents occurred; for example, in Bridgeport, Waterbury, Cleveland, Detroit, and the east end of Boston. In some cities no war work was carried on, and workers were attracted to other cities, leaving many vacant houses. In such cities rents (h'opped; for example, in East St. Louis and El Paso. From its later study, the National Industrial Conference Boaroj- from 91 cities served to confirm the general results of the studies of 235 236 KCOXOMICS OF THE ( OXSTRUCTIOX IXDUSTRY. tlic National Industrial Conforcnco Board. Some of tlio results obtainecl from tin; questionnaire arc slunm in tlie table below: Adiaacc in nnis of loir-pr'ux opaitiiunts and houses, from Junuani, 191G, to Junvury, 1919. Cities fhowinf; no in- crease. Ini-roa'^e 10 to 20 l)QT cent. IncTea.se more than 20 per cent. Tyow-prif e city apartments ]/0\v-price houses in ^hickly settled portions of citie; Low-price houses in suburbs It will ]>c observed from these statistics that the number of cities ]-eporting no increase was larger than the number reporting an increase of more than 20 per cent, but was less than the number i-eporting an increase of from 10 to 20 per cent. It should be noted that this table shows the increase from January, 1916; to Januar}', 1910, whereas the advances shown by the statistics of the National Industrial Conference Board represent the periods from' November, 1914, to Jmie and November, 1918, respectively. The following table, compiled from statistics gathered by the Bureau of Labor Statistics of the Department of Labor, shows for 18 h^hipbuilding centers the advance in rents at the end of both 1917 and 1918 over the end of 1914: Per cent of increase, in rents above December, 1914- December. 1917. December, 1918. December, 1917. December, 1918. 2.38 a. 06 2.63 2.60 2.96 1.72 n4.32 o 18.65 2. 48 2.76 6.47 8 00 13. 78 38.96 O.90 o. 89 11.16 "1.68 Los Auceles, Calif O0.64 4.02 a 22. 16 o .55 1 .36 32.64 4.43 Bor-tou, Mass Sau Francisco and Oak- land. Calif . ... New York N Y a 3. 93 Fhiladelpliiii Pa Portland, Ores; 12.28 Baltimore, Mfi Seattle, AVash". 44.31 Norfolk, Va Chicago, 111 2.55 Detroit, Mich 39.03 Cleveland. Ohio 11.29 16.49 Mobile, Ala Uouston, Tex O3.60 a 7. 72 Buffalo,N.Y 9.35 1 20.72 On the whole, these increases are somewhat less than the 20 per cent average advance arrived at by the National Industrial Confer- ence Board. The statistics and conclusions brought out in fore- going paragraphs apply e.xclusively to workmen's housing — low- price apartments and dwellings. For information concerning the better grades of housing, only the replies received from the ques- tionnaire of this division are available. These indicate that the advance in rents of the better grades of city apartments and houses ECONOMICS OF THE COXSTRUCTIOX INDUSTRY. 237 lias been somewhat more general than in the hnv-price grades, but the increases over 20 per cent are fewer. ^Uthough the increases up to January 1, 1919, were no greater than indicated in the preceding paragraph, rents increased appreci- ably in numerous localities after that date. The upward trend was a distinct indication of their tendency to advance by amounts bearing some relation to advances in price and wage levels. BUSINESS RENTS. The replies to the questionnaire sent out from tliis division showed that business rents had increased even less than residence rents. Advance in rents of stores and offices from January, 19-16, to January, 1919. Cities showing no increase. Increase 10 to 20 per cent. Increase more than 20 per cent. f?toio<; . . 43 42 14 10 9 Oilice^ S LAND VALUES. One of the questions asked in the questionnaire of this division read as follows: "^Yliat changes, if any smce 1916 has taken place in the prices of land suitable for (1) office buildings, (2) stores, (3) houses and apartments in residentiul districts ? ' ' Approximately two-thirds of the answers stated that no change had occurred in the value of land suitable for any of those three classes of buildings. A few replies stated that the value of land had decreased. Less than one-third of the replies stated that land values had increased, and in most cases where an increase was indicated it was less than 25 per cent. The conclusion that there was no general advance in city land values during the war is confirmed by statistics of tax assessment valuations. Although assessed valuations of real estate do not always accurately reflect the market values of the property, never- theless there has been a tendency in recent years for assessed values to approach more closely to market values, instead of remaining far below as was formerly the case. Consequently, if there had been any increase in the value of real j^roperty in recent yeai-s, it shoiUtl be sho^Mi by at least as great an increase in assessed valuations. The figures mdicate, however, that assessed valuations of real estate in cities of 30,000 or over increased from 1913 to 1915 (two years) by 7.09 per cent, on the average; from 1915 to 1916 by an average of 6.73 per cent; from 1916 to 1917 by an average of 4.14 per cent; and from 1917 to 1918 by an average of not over 4 per cent. (Tlie figures 238 KCOXOMICS OF THK (JONSTIIUCTION INDUSTRY. [<•!• 1018 tire not yvl j>ublislied., i)ut. were kiiuUy provided for tlie p-ur- pose of this iiu|uiiy by tlie Ceiisui^ Bureau.) In deriving; these figures allowance has l)een made for the increase in tb.e number of cities re- ])orted, but no allowance has been possible for increases in the areaa of individual cities. If the value of real estate had increased since IDlo at the same rate as the prices of commodities, and assessed valuations had risen just enough to coiTespond, the assessed A-aluation of real estate In all cities of the United States of 30,000 or over would have been at least $46,000,000,000 in the fiscal year ended June 30, 191S, in- stead of its actual amount, less than $31,000,000,000. REAL ESTATE BOOKKEEPING. The value of land is fundamentally determined )>v the demand for it. In cities this means the demand for buildings of all s(»rts, and this in turn results from the conditions or prospects of business and the gi-owtli of population (which to some extent continues irre- spective of fluctuations in prosperity). Besides the demand for buUdings, the cost of erecting and main- taming tliem comes into the determination of land values. This includes costs of material and of labor, the rate of interest, and taxes, including assessments for city improvements. Any attempt to foresee the future course of land values must consist in an anal\^is of each, of the above-mentioned factors. However, it was fomid that recent statistics bearing on a number of these factoi-s were not available. It was determined therefore to draw np a C|uestionnairc that would reveal not only the tendency of net rents in the last fi>ur years, but also the tendency as regards the several items affecting net rents from the point of view of sound real estate booklveepiiig. The questiomiaire is mainly the ^^-ork of Irving Alacomber, vice president of the United States Housing Corporation, in consultatioa with Mr. IngersoU, secretary of the National Association of Real Estate Boards. It was sent to 150 real estate boards b}- Mr. Inger- soU, with the request that each board appoint a committ-ee to pro- cure the desii'ed information. Although the rephes were received too late for tabidation, a portion of the questioimaire is reprinted here as an example of the classification of revenues and ex^xMises which sound real estate bookkeeping demands: ECOXO-MICS OV THE COX^TKUCTIOX IXDUsTKi'. 239 Classificatiox of Retexue axd Expexse Items, showing distribution- desired ox xoril a. EEVEXUES: Rent Eakn'ed— Accruals on occupancy, whether collected oruncollccteJ. Other Revenues— All profits on telephone service, elec- tricity, water, supplies, waste paper, janitor service, etc. OPERATIVE EXPEXSES: M.AIXTENAICCE— Upkeep of grounds: Walks, drives, fences and^ walls, lawn and garden, planting, general, etc. Upkeep of building: Roofs and down- spouts, porches and areas, halls and stair- ways, rooms and closets, laundries and lockers, general, etc. Upkeep of equipment: Screens and a^vn- ings, stoves and gas logs, furnishings, safety appliances, telephone and signals, lighting, tanks and cisterns, other plumbing, pumps and heaters, other heating, chutes and in- cinerators, machinery and tools, spriokler system, elevators, engines, generators, general, etc. Sermce — Electricity, water, supphes, coal, gas, steam, wages of all employees, disposal of ashes, of rubbish, of garbage, inspection, telephone, etc. Insurance— Fire protection on building, on furaish- tngs, on rents, etc.; liability protection on employees, on general public, on boilers, on elevators, etc.; plate-glass protection on windows, etc. Salaries— Building superintendent and his office employees. Taxes— I.evied on land, building, and equipment. Assessments — Levied wth taxes for street lighting, street cleaning, street maintenance, street improvements, etc. OPERATIVE EXPEX.SES— Continued. Depreciation— Reser\t:— Arbitrary amount, or iiredeierminiHl |>er cent of building cost and equipment cost, written off for physical deterioration an* obsolescence. ADMINISTRATIVE EXPEXSES: Office Overheai)— Cost of office equipment and appliance ■, rent for space occupied, janitor service, tele- phone and telegraph sernce, magazines anfi papers, reports and directories, supplies, postage, electricity, water, steam, gas; fin insurance on equipment and records, lia- bility insurance on office employees, indem- nity insurance on general jiulilie; U-gal sen- ices, legal counsel, and other legal items, advertising, general taxes on personal prop- erty, on moneys, on credits, etc.; deprecia- tion of equinmeni, etc.; commissions paid, salaries of building manager and employ- ees, or equivalent in o\vner"s time and attention, etc. Eent Conceded— Accruals on occuiiancy given to tenants as an inducement or bonus and for whicU they are not charged and do not pay. DouBTFU^L Accounts— Reserve— Actual amount or predetermined perceal of outstanding accounts receivable vrritiea oS as uncollectible and lost. Interest— Accruals, commissions, and expenses in effecting and renewing loans, etc. NOTE.— Per Cent Occupancy. Number of months of actual use or occupancy di\-ided by the number of months of posfibls occupancy. Or number of square feet of actual occupancy (averaged) divided liy iinmber of so"! ir.i f,'.'t of possible occupancy . 240 ECONOMICS OF THE CONSTRUCTION INDUSTRY. Form A. — Comparative Yearly Financial Statement. ( /u.vi (./ baitding City and State I'ropert y designation. Prewar prriorl. War period. Inerea.se, I91S over 1916. Decrease, 1918 over 1916, Code number. 1914 191.-. 1910 1917 191S Vpt Amount. ^^^ Amount. Per cent. licvennos: Kent earned 1 Other reveuues 1 • 1 1 i 1 I t i ! ' Total revenues I . ...1 . 1 1 , 1 j 1 Expenses: Maintenance 1 1 1 Service j ■ 1 Insurance 1 I""l ! Salaries i ■ 1 1 Taxes !... -■■■]■■■ 1 . i Assessments \ i Depreciation— reserve. . \ 1... i !"■" '"""1 Total operative 1 . 1 1 OfTicc overliead j . Kent conceded 1 1 Doubtful accounts— re- serve i . ! ■ 1 Total administrative. \ 1 ...: • ..i 1 1....! 1 1""" .... , , 1 I Total expenses 1 .! i i.. . 1 ...1 ... j 1 ••••! 1 1 1 Revenues less expenses 1 1 ! ' ! 1 Interest (deduct; ;...! 1 t i : i . 1 • ■' 1 Net earnings — amoimt j 1 i i i ^ ' i - ' == 1 = : 1 1 Per cent occupancy .Ti . i . .;■ _ _ i i __.' 1 ,.. .| Net earnings, per cent of equity i 1 ! ! ^ " Capital investment: Loan 1 1 1 i Equitv 1 ! 1'"" 1 ■••! '•■••. i Total investment I'll ==-.= == Tax value of property: Land 1 1 Building ...... !•■• Total tax value . - i ! i 1 J r ! l----j--— , 1 Tax rate per 1,000 .1 . -1 i . 1 1 ^= ■ 1 1 Population (best local esti- mate) Mill EXl»L.^X.\TOHY NOTES. VII. DEFERRED CONSTRUCTION. The Division of Public Works and Construction Development of the Information and Education Service of the Department of Labor sent out in January about 15,000 questionnaires, mainl}' to archi- tects, engineers, and State, county, and city officials throughout the United States. The questionnaired were asked to report on projects whicli had been planned but not constructed at the time of the armistice, to give the estimated cost of these projects, and to state why contracts for them had not been let since the armistice. Projects to the number of 6,472 were reported on, with a total valuation of $1,711,802,000. Some of the projects had been deferred for two years because of war restrictions and war conditions. The residts of this questionnau'e have been tabulated and are shown in Tables 96 to 104, inclusive. As reasons for postponmg building operati mi s. 1,781 question- nau'es, 29 per cent, reported materials too higli; 1,320, 20.5 per cent, reported wages too high; 401, 6 per cent, reported difficidty in ob- taining loans; 4 per cent reported shortage of materials; a compara- tively small number reported inefTiciency of labor. Conclusion: It is apparent that high costs of material and labor were the compellmg reasons for the hesitancy in builduig after the armistice. Shortage of materials and shortage of labor were local phenomena and not widespread. Difhcuity of obtammg loans was ill part a result of the high cost of building. The mam task that confronted the buildmg industry of the country was, tlierefore, citlicr the removal of these high costs or some readjustment to them. 121297°— 19 IG 241 242 ECOirOMICS OF THE COXSTRL'C'TIOX INDUSTRY. Tabi,e 90. — Drfrnrd construction projects. [Tabulated liom rejjlies Lo a questionnaire of the Division of Public Works and Construction Development.) Alabama Ala-ska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentuclo'' Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Niim- bor of proj- ects. 54 4 34 78 144 ()9 110 U 22 14 24 39 365 179 21S 139 92 100 49 58 227 230 150 39 231 63 So ^'ablations. 307,110,000 1,100,000 9,580,000 12,225,000 110,000,000 23,415,000 23,390.000 6,365,000 6,470,0(X) 1,140,000 10,675,(X)0 8,645,000 175,045,000 21,300,0) South'l)akota l.'^OO Utah 1.100 Wyoming 1 1 Total 1 2.T'(1 " , North Carolina 2:j I y;i.ii>w Table 104. — Deferred projects — public buildings and public utilities. MISCELLANEOUS. ^Tabulated from replies tea questionnaire of the Division of PubUc Works and Construction Development.] States. Alabama Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Number of projects. Value in thousands of dollars. l.i 1,060 300 2,175 1,300 4,910 3.50 2,000 100 9,190 50 8. 640 40 600 120 120 7,295 500 1,083 8, S85 18, 070 680 States. Number of projects. Missouri Montana New Jersey New York North Carolina North Dakota. Oliio Oklahoma Oregon Pemisyivania.. Rhode Island. . South Carolina South Dakota.. Temiessee Texas Utah Virginia Wusliiiigtoa . . . West Virginia. Wisconsin Total... 289 Value In thoiLsanils of dollars. 33, 60^ 20 2.26.3 6,87.5 3W 100 5,113 350 590 5,350 910 401) 300 3.^ 1.00") 1 :») 25, *)l| i,:io no 9, 950 164,068 A questiomiaii-e is seldom expected to bring out a full quota of replies. A glance at Tables 96 to 104 indicates that this ques- tionnaire was no exception to the rule. The proportion of replies from public officials was evidently larger than that from aichitects and others interested in private construction projects. Iiidcod, the replies concernmg private projects were so few tiiat it was nut thought w^orth while to classify them by States. For example, the total number of deferred dwellings rcA-ealed by the questionaire was only 729 for the country as a whole, yet it is knowTi that a smgle city of the first rank builds as many dwellings as that m a normal year. It is to be noted, therefore, that the foregoing statistics, particu- larly those relatmg to private construction, evidently do not endjrace all projects for which plans had been drawn but for which contracts 248 ECONOMICS OF THE (JONSTRUCTION INDUSTRY. liad not })cr and Imildinfr tnaferials group, with 27 commodities listed, together with iirice inerir>.l thiough 1917. 9. Bulletin of the Census Bm-eau of the Department of Commerce. Statistics of Iron and Steel Products. The tables present, in detail, the quantities in the hands of manufacturers of .specified iron and steel products, and also of dealers and manufacturers consuming iron and steel produc! s. III. Periodicals. 1. Dun's Review. Gives weekly report of wholesale prices, in most cases for the Xe-sv York market, on brick, cement, lathe, lime, shingles (cypress No. 1), lumber, hemlock, white pine, oak (plain), oak (white quartered), red poplar, white ash, beech, birch, chestnut, cypress, mahogany, maple, spruce, yellow pine, cherry, basswood. Also steel, rosin, tar, turpentine, linseed oil, paints. Also publishes monthly index of wholesale prices for all commodif ios, but no index on btTiMing materials. 2. Bradstreet's. Gives weekly report of wholesale prices, in most cases for New Yfirk market, on bnck, lime, cement, wire nails, window glass, yellow pine (12 inches and underV timber (eastern spruce;), timber (hemlock), linseed oil, rosin, turpentine, tar, steel products. Gives index of wholesale prices covering 9ar::. 5. The Iron Trade Review. Cleveland. The Penton Publishing Co. Weekly. Gives weekly quotations on all iron and steel products, as well as prices on other melals. Also gives freight rates on ores and finished products, and production statistics from time to time. 6. The American Iron and Steel Institute, Xew York. Compiles and publishes all kinds of statistical information concerning the iron and steel indus- tries, and production, imports, and exports, etc. 7. Engineering News-Record. New York. The McGraw-Hill Co. (Inc.). Weekly. Gives in the first issue of eacli month wholesale prices for a number of markets on inm and steel products, Including metal lath and reinforcing bars, railroad t ies, road and paving materials, sand, gravel, crushed stone, lime, cement, brick, hollow tile, drain and sewer pipe, prepared roofings, !Ln.seed oil, white and red lead, lumber, and contractors' miscellaneotis supplies. 8. American Contractor. Chicago. The American Contrar-tor Pii')lif:hiii? Co. Weekly. Contains weekly quotations for various markets on lumber, Portland cemeni, cimtiiou I>riclc, andiron and steel products. 9. Building Supply News. Chicago. Kenfield-Leach Co. Monthly. Gives prices, delivered on the job, of 5ti basic building materials fi)r 72 markets. 10. Rock Products. Tradespresa Publishing Corporation. Chicago. Published every other Wednesday. Gives quotations for a number of markets on agricultural limestone, crushed stone, sand, and gravel. Publishes occasional statistical information on these products. 11. Oil, Paint, and Drug Reporter. New York. The Oil, Paint, and r>rug Reporter (Inc.). Weekly. Gives weekly quotations for New York market on all kinds of paint and varnish materials, including oils, gums, pigments, naval stores, etc. Also gives quotations on window glass. 252 ECONOMICS OF TiriO CONSTRUCTION INDUSTRY. 11 F. rKitionicALS — Continued. \'2. Oil, Paint, aiiading.= : Accident Compensation and In- Labor Costs. eurance. Labor Demand and .'^upply. Accidents. Labor Organizations. Cost of Living. Occupational Diseases. Disputes and Settlements. Productivity of Labor. Employment. Unempli lynient. Employment Agencies. Vocational Education. Factory Inspection. Wages. Hours of Labor. Welfare Work. Housing. 3. Wages. Fifteenth Annual Report of the I'nited States Commissioner of Labor. Wages and Hours of Labor from 18 — to 1900. Washington. " In order to answer the very numerous demands for information relative to the rates of wages, hours of labor, etc., the department undertook, nearly seven years ago, the com]iilatiou of such information for the commercial countries of the world * * * The present compilation includes the lowest, highest, and average rates of wages per day and hours per week for the United States, and the lowest and highest rates and hours for foreign countries. It gives quo- tations for each country as far back as any definite official statement was to be found, and the quotations come down to the present year (1900)." — Carroll D. Wright. 4. ■ — . Xineteemh Annual Report of the Ignited States Cnmmi.'^sion) r oi Labor, 1904. Wages and Hours of I-abor, 1890 to 1903. "The present volume, the Nineteenth Annual report of the Bureau of Labor, presents the results of an extensive investigation info the wages and hours of labor in the leading manufactur- ing and mechanical industries of the United States during the periodfrom 1890 to 1903, inclusive." 5. United States Department of Labor, Bureau of Labor Statistics — {(i) Bulletin 131. Union scale of wages and hours of labor for 1907-1912. {b) Bulletin 143. Union scale of wages and hours of lalior for 1913. (r) BidletinlTl. Same for 1914. {(!) Bidletin 194. Same for 1915. (0 Bulletin 214. Same for 1916. G. The scale of wages for 1917 has not yet l)een published. The Monthly Labor Review for September, October, and November, 1918, give the union pcale of wages and hours of labor for 1918. The scale of wages and hours of labor for the years 1904 to 1906, inclusive, are not available. 7. Fniploijecs and War/( x. Washington, 100 1. Special report made for the Twelfth Census under the direction of rri.f. Travis R. Dewey, and known as the Dewey Report. It is a comprehensive study of classified wa;;e rates for the years 1890 and 1900. Do?s not contain wage rates of building tradesmen; "ihe inquiry was limited to 34 industries, nearly all of a permanent character, which are not violently affected by seasonal influences.' 254 ECONOMICS f>F THIO (•ONSTRUCTION INDUSTRY. A List of Lauur Statistics, etc. — Continued. 8. Tho minimum scale of ■wagf'3 in the l:»uiicUiig liudes on the eight-hour Jjasifl ig also contaiuod in the annual reports of the i)roceeding8 of the Building Trades Diipartmeut of the American l-'cdcration of Labor. The report for 1918 con- tained, for example, the minimum scale in i 14 different cities. 9. Wages and the War, a summai y of recent wage movements, by Hugh S. Hanna and W. Jett Lauck. Cleveland, Ohio, 1918. Contains a mass of material on wages in various trades for the years 1911-1917; in some trades the year 1907 is added. It contains numerous charts and tables showing the per cent of increase of rates prevailing in Pcccmlx'i-, 1917, over 1914 and over I'.tll. Pages 3j~47 contain the rate of increase of building vage rates prevailing I)ec-ember, 1917, over those prevailing! n 1914 and 1911. Pages 1.59.222 contain the union rates of jiay in the building trades in large cities, 1907-1917. Cost of Living. 10 (a). The Bureau oi Labor Statistics gathers data on the cost of living which it publishes in the Monthly Labor Review. Increases in the cost of living from December, 191 4, for shipbuilding districts are contained in this Re^-iew. The increases for many other cities are also published in it. Under the caption, Prices and the Cost of Living, this bureau publishes each month com- prehensive data. The Decemljer, 1918, issue of the Monthly Labor Review, for example, contains the following material: Prices and cost of living — Retail prices of food in the United States. Retail prices of dry goods in the United States. Price changes, wholesale and retail, in the United States. Index numbers of wholesale prices in the United States, 191.3 to October, 191*?. Changes in wholesale prices in the United States. "Wholesale prices in the L'nited States and foreign countries, 1890 to September, 191S. Consumption of food in shipbuilding districts. Index numbers of wholesale prices published by the Federal Re.serve Board. New cost of living regulations in Canada. Food prices in Great Britain. Increase in the cost of living in Sweden from 1914 to tlie end of July, 191S. (b). Cost of Living and the War, an analysis of recent changes, by W. Jett Laiu^k. Cleveland, Ohio, 1918. "This volume is a summarization and analysis of ofTicial and authoritative data bearing upon the cost of living, with special reference to the families of wage earners." It contains also a bibliography of publications on the cost of living. (c). The Possibility of Compiling a Cost of Living Index, by Royal Meeker, United States Commissioner of I>abor Statistics. Monthly Labor Re\-iew, March, 1919. Tills article is an analjsis of the questions connected with the compilation of the cost of living index. The plans of the Bureau of Labor Statistics for iXTfectiug and completing the cost of living surveys arc described by Commissioner Meeker. (d). The National Industrial Conference Board, a cooperative body cc)m])osed of representatives of national and industrial associations, publishes in Boston reports on changes in the cost of living. It pid)lished two reports on the war- time changes in the cost of living; one in August, 191S. and the other in Feb- ruary, 1919. 11. Building Tradesmen, whose organization in 1918 comprised 635,380 inem- ])ors, record their activities in the annual reports of the Building Trades Depart- ment of the American Federation of Labor. These reports contain a list of officers of the Building Trades Department, its constitution, the decisions with regard to jurisdictional disputes, the proceedings of the annual conwntions, reports of officers and etatistics with regard to membership and annual wage scales. ECONOMICS OF THE COXSTRUCTIO^' I'N'DUSTRY. 255 in. SOURCE AND SUPPLY OF CAPITAL FOR THE CONSTRUCTION INDUSTRY. I. GOVERXMEXT PUBLICATION'S. 1. Annual reports of the Comptroller of the Currency. Government Printings Office, Washington, D. C. These reports contain statistics ol the resources of banks of all classes and of trust companies of the United States, including the amount of loans secured by real estate and mortgages owned. The value of these reports in respect to real estate loans is diminished by the fact that since 191i>, the statistics of real estate loans are not comparable wiih the earUer figures. Up to 1910, the Comptroller of the Currency compiled real estate loan statistics from individual r.' ports of thd different classes of banks of the country. Since 1916, the comptroller lia5 received individual reports only from national banks and has compiled the statistics for other classes of banks from the State banking reports. Inasmuch as all the State banking reports do not segregate real estate loans from other bank resources, any compilation of real estate lotins based on State banking reports will be incomplete. 2. Reports of State Banking Departments. The banking departments of the different States issue annual reports on banking institutions reporting to them. These reports are of uneven quality. The most useful of the State banking department reports are those of New York. They contain considerable iiiCormation on real estate loans of New York banking institutions under State control and these represent about one-sixth of the banking resources of the United States. 3. Annual Reports of the Federal Farm Loan Board. Government Printing Office. These reports contain valuable information on the working of the Federal Land Bank System. 4. The Federal Farm Loan Act. Sixty-fourth Congress. First Session. Senate Document 500. This document is of particular interest since the Federal Farm Loan Act is the model of fue proposed Home Loan Bank Act. 5. Hearings before the subcommittee of the Joint Committee on Rural Credits. Sixty-fourth Congress, First Session. These hearings contain a mass of information relating to mortgage loans, relating more par- ticularly, of course, to rtu'al mortgage loans. 6. The National Bank Act as amended, the Federal Reserve Act, and other hiwa relating to national banks, Sixty-fourth Congress, First Session. Document 412. 7. The Federal Reserve Bulletin issued monthly by the Federal Reserve Board, Washington. This bulletin contains much very valuable information on the general financial conditionsof the country and in particular on the rate of interest. II. Books. 1 . W. H. Kniffin, jr., T!ie Savings Bank and its Practical Work. This book contains considerable information on real estate loans of savings banks and how they are managed. 2. Edward D. Jones, Investment. This book contains some valuable material on mortgage loans as investments, including a detailed analysis of 41 considerations which the assessors of Philadelphia are askod to take ini-* accoimt in making valuations. 3. Hardy and Lindner, Insurance and Real Estate. 4. Frank A. Fetter, Moden Economic Problems. This book contains a compact and u.sehil account of building and loan associaticmsrelnt.in^ particularly to their methods (pp. 1.56-101 1. 5. Loans and Discounts: Shaw Banking Series. Among other material on real estate loans, this book contains a description of a plan ofbank loans to home Iniildeis, providuig for repayment on the installment plan (p. 233). G. S. S. Huebner, Life Insurance. This book contains information on mortgage loans as invesimentsoiliio insurance compauiea. 256 ECONOMICJS OF TJTK CONSTRUCTIOX INDUSTRY. I IT. MiSCKI.LAN'KOU.S RkFEREVCES. 1. T'nx'oodini^s of the Annual Convention of the United States League of l/ocal Building and Loan Associations. American Building Assr^ciation News, Cincinnati, Ohio. In addition to much other iis(!ful rauttcr on building and loan associations, these proceedings C)nl-;iin statist ics on the real estate loans made during each yoar and on the total assets held by building and loan associations in the United States. 2. The Insurance Yearbook, Spectator Co., New York. This yearbook contains voliuninons statistics on life insurance companies in I he United States, including an itemized list of the assets of all of the leading companies. 3. Annual financial statements of the various life insurance companies. These small pamphlets may be had annually upon application to the different life insurance companies. Most of them give the amount of mortgage loans in the itemized list of assets. These little statements are available before the same information is published m the Insurance Yearbook. 4. K. V. Haymaker, Home Building and Citizenship, Address delivered at Detroit, Mich., and published by the American Building Association News, Cincinnati, Ohio, in pamphlet form in 1918. Contains a short description of building and loan association methods. 5. Tentative Draft of a Bill to Promote Home Building, Issued by the United States Department of Labor, Di^dsion of PuIjHc Works and Construction Development. Tliis biO if passed by Congress will provide a system of Federal Home l>oan Banks modeled upon the Federal Land Bank system. 6. Home Loan Banks LTrged to Stimulate Building Operations. Annalist, February 3, 1919. This article in the Amialist advocated a new law to enable an increase of mortgage credit that the treasuries of building and loan associations depicted by investments in Govcmment bonds might be replenished to meet the demands of peace reconstruction. 7. Real Estate Record and Builders' Gtiide has occasional articles on real estate loans. The following may be noted as of particular interest. (a) A Discussion pro and con of the Torrens Land Title Law as it operates in New York. In the issue of May 18, 1919. (b) X detailed account of the official procedure under the Torrens Law by James A. Donegan, registrar of New York County in the issue of June 1, 1918. (c) A aiscussion of the Gilchrist Bill which provides that trust bonds in New York may be invested in parts of mortgages held by title and guaranty companies. In the issue of ^lay 11, 1918. 8. The American Bankers' Association has gathered by means of a questionnaire and by other methods a consideral)le mass of information on amortization of real estate loans. This is available at the office of the American Bankers' Association, 5 Nassau Street, New York City. 9. The Department of Agriculture has received returns on a ciuestionnaire relating to real estate loans addressed to about 28,000 banks and Avill soon publish the results. 10. The American Bankers' Magazine, contains occasional items of interest relating to real estate loans. 11. Annual proceedings of the National Bankers' Association. These proceedings contain discussions of real estate loans and otlior related topics. ECONOMICS OF THE CONSTRUCTION INDUSTRY. 257 IV. BUILDING AND PUBLIC WORKS. A. Statistics on Building Operations. 1. Statistics of building and engineering contracts awarded. (a) The American Contractor. F. W. Dodge Co., New York. Engineering contracts awarded in the territory east of the Missouri and north of the Ohio Rivers have been published in this periodical since January 1, 1910. They are also given for each of six districts into which tliis territory is divided. The statistics for the New England district have been compiled since 1901. 2. Statistics of building permits. (a) Clay-working Industries in the United States and Building Operations in the Larger Cities. United States Geological Survey, Department of the Interior. This publication is a chapter of the volume Mineral Resources of the United States. It Is the only official publication of building permits statistics. About 144 cities arc included in the reports, being roughly those over 35,000 population. The number varies slightly from year to year on account of the failure of some cities to make a complete report. Mr. Jefferson Middleton, of the Geological Survey, has had charge of this compilation for a number of years, (b) Private agencies. The American Contractor, Dun's, Bradstreet's, and other agencies also compile information of this character. B. Current Building Operations. 1. Notes as to projects contemplated and contracts awarded for building. (a) Trade magazines. A number of trade magazines, among which are the American Contractor, the Architectural Record, and the Real Estate Record and Guide, all published by the F. W. Dodge Co., of New York; The American Architect, published by the Architect and Building Press, Inc., New York; the Manufacturers Record, Baltimore; the Engineering News Record, New York, and the Municipal Journal, New York, have departments in which up-to-dato information Is given as to work in the hands of architects and engineers, bids called for, and contracts awarded. C. Public Works. 1. Census reports. (a) Financial statistics of cities. United States Census Bureau of the Depart- ment of Commerce. (6) Financial statistics of States. United States Census Bureau of the Depart- ment of Commerce. These annual publications give, among other things, the "outlay" for cities of more than 30,000 population and for all States. Outlay means, in this connection, expenditures that add to the assets of the city or State concerned, repairs and replacements not being Included. 2. Reports of heads of executive departments, (a) Report of Secretary of State. (6) Report of Secretary of Treasury. (c) Report of Secretary of War. (d) Report of Secretary of Navy. (e) Report of Attorney General, (/) Report of Postmaster General. (f/) Report of Secretary of Agriculture. (h) Report of Secretary of the Interior, (t) Report of Secretary of Commerce. (j) Report of Secretary of I>abor. The reports of the Cabinet members include reports to them from the chiefs of bureaus and other services. Many of these subdivisions, as, for example, the Supervising Architect's office in the Treasury Department, the Engineering Division and the Construct ion Di\ision in the War Department, the Bureau of Yards and Docks in the Navy Department, the Bureau of 121297°— 19 17 258 ECONOMICS OF THE CONSTRUCTION INDUSTRY. C. Public Workh — Continued. 2. Reports of heads of executive departments — Continued. Public Roads and Rural Engineering in the Department of Agriculture, the Reclamation Service and the Bureau of Indian Affairs in the Department of the Interior, the Lighthouse Service and the Life Saving Service in the Department of rommerce, and, since organized, the United States Housing Corporation in the Department of Labor, all have a considerable amount of construction in their charge, and their respective reports give information as to what is being done in this line by the Federal Government. V. HOUSING. A selected bibliography of industrial housing during and after the war in America and Great Britain has been prepared for the United States Housing Corporation by Miss Theodora. Kimball, consulting librarian for the United States Housing Cor- poration, under the direction of Dr. James Ford, manager of the Homes Registration and Information Di\dsion. It contains a selection of 250 of the more important references from 1,000 or more books, articles, and pamphlets issued on this subject during the period of the war and made up of the following sections: General. Housing Agencies: Government: Federal — State and Municipal. Private Capital: Industrial Corporations — Cooperative Societies. War Emergency Problems: Labor and Housing, Labor Turnover — Real Estate Acquisition and Commandeering, Requisitioning, and Billeting — Registration Bureaus and Room Renting — Landlord and Tenant Relations, Rent Profiteer- ing — Transportation . Planning and Development of HousixVG Schemes: General — Technical Methods of United States Government Designers — Housing Standards — Tv-pes of Community Development — Construction of Housing Schemes. Houses: House Types and Types of Construction: House Types — Building Materials and Types of Construction. Home Ownership and Management Problems: Home Ownership — Renting and Management — Special Community Facilities. Housing Finance: General — Governmental Aid. Land Values and Taxation. Brief comments are submitted with the more important articles. INDEX. Page. Advancing prices 80 Agriculture commodities, production of 31 American Federation of Labor 177, 179 Apartments, rents on. See Rents on apart- ments. Asplialt, prices of. See Prices. Australia, prices in 55 Bars, steel, prices of. See Prices. Basic building materials, price indices on . . . 42-46 Bethlehem Steel Corporation 181 Brick, cost of production of Ill, 112, 115, 117 decline in importance of 110 prices of. See Prices. prices fixed by "War Industries Board . . . 115, 116 production of. See Production. sand-lime 113-114 Building and loan associations. 205, 208, 209, 221, 222 Building materials, pricesin Great Britain... 56 prices In Scotland 56 prices after the Civil TVar 76 prices during the Civil TVar 77 Building stone. See Stone, building. Building trades 177,178 elHciencyof 188,189 imion wage scale in 182, 183 Business conditions, spring of 1919 24, 25 Business rents. See Rents of stores and offices. Canada, prices in 54, 55 Cedar, stands of 91 Cement .natural and puzzolan 137, 138 Portland, cost of production of 140-145 freight rates on. See Freight rates. imports and exports of 138 indices on. See Prices. price fixing 139 prices of. See Prices, production of. See Production. regional production of 138 Circulating medium, inflation of 21 Civil War prices. Sec Prices, Civil "War. Clay products, imports and exports 110,111 prices and price indices. See Prices, production. See Production. regional production of 112 relative importance of 110, 111 Commodities, all, price indices on. See Prices. Competition in lumber industry 93 Concrete, reinforced, building, cost of 86 Construction, cost of. See Cost of construc- tion, deferred. See Deferred construction, recent 15 Page. Consumer's goods, demand for 37 Coal, world production oL See Production. productionin Great Britain 123 Coffee, price of 83 Coke, Connellsville, prices of. See Prices. Copper, abnormal stocks of 83, 84 prices of. See Prices, production of. See Production. Cost of buildings (Tables 18, 19, 20).... 86,87,89,90 Cost of construction 16 frame dwellings (Table 18) 86,89 hospitals 86 indices 86 office buildings (Table 19) 87, 89 roads 87,88 Cost of fuel 51 ofUving 184-187 of production 31 of production after the Civil War 74 reduction of 33 brick 113,114 builders' hardware 172, 173 cement, Portland 140,141 glass 157-159 gravel 148 gypsum products 173 illuminating glassware 159 limestone 131 lumber 98,99 marble 132 millwork 173 plumbing and heating materials 170, 171 sand 148 sanitary porcelain 170 slate 132 steel 51 stone, crushed 148 Credit, contraction of 23 Credit instruments 22 Crushed stone. See Stone, crushed. Cypress, stands of 91 Decline in prices 80, 81 Deferred construction (Tables 96-104) 15,2-11 bridges, canals, levees, and water fronts (Ta- ble97) 243 city halls, fire and police stations (Tabic 9S) . 244 hospitals, homes, and institutions ( Table 99) . 24 4 lighting plants (Table 100) 245 misceUaneous (Table 104) 247 private projects (Table 96) 242 railroads, tracks, and stations (Table 103). .. 247 schools (Table 101 ) 245 sewers ,streetimprovements,and waterworks (Table 102) - 246 Deferred construction questionnaire 242 259 200 INDEX. Deposit banking, increase of 2.3 Dollar, shrinkage of the 45 Dun's index number (Table 16) 80,81, 85 Duration of building loans 211 Dwelling, frame, cost of (Table 18) 86,89 Earnings. Sec Wages. ElRciency of labor 3.3, 188 Electrical supplies, prices of. Sec Prices. Emergency Fleet Corporation 180, 188 England. Sec Great Britain. Essential industries 49 Excess profits 31 Exports, clay products 110 glass 156j 157 linseed oil '. 164 lumber 103, 104 slate 129 stone 127 Farm products, priccindiceson. See Prices . Federal Farm Loan Board 207,208 Federal Reserve System 232, 233 Federal Trade Commission 115 Financial institutions, number of, in New York State (Table 91) 224 real estate loans by (Tables 8&-87, 89, 9S-95) . 216, 217,220,221.225,226 resources of (Tables 89, 90, 92) 221, 222, 224 Fir, Douglas, prices of. See Prices. standsof 91 Fire brick, production of. See Production. Foreign prices, conclusions concerning 59 Frame dwellings, cost of 86 France, prices in 55 Freight rates, cement (Table 56) 145 gravel (Table 62) 150, 153 lumber (Table 25) 101, 106 pig iron (Table 27) 109 road material 88 sand (Table 62) 150, 153 steel (Table 28) 109,110 stone,c>Tislaed (Table 63) 150, 153 Fuel Administration Ill, 140, 174 Fuel, cost of 51 Glass, cost of production of 157-159 production of. See Production. prices of. See Prices. imports and exports of 156, 157 world shortage of 157 Glassware, illuminating 159 cost of production 159 Glass sand, prices. See Prices. production of. See Production. Gold, flow of 21 reserve 20, 21 supply 20 Government-fixed prices, brick 115 cement 140 lumber 93, 98 steel 49, 50 Granite, importance of 126 prices of. See Prices. Gravel, cost of production of I4S, 149 freight rates on. See Freight rates. prices of. See Prices. production of. See Production. rago. (;ray forgo pig iron 108 fi rcat Britain, decline of price level in 81 prices in 55, 56 production of stone in 128 Gypsum l)lock, prices of. Sec I'rices. Gypsum products, cost of production of 173 Hardware, builders', cost of production of. . . 172 Hardwood, stands of 91 Keating materials, cost of production of 170, 171 prices of. See Prices. Hemlock, stands of 91 prices of. See Prices. Ilospital buildings, cost of 86 Uouse rents. See Rents. Housing in Great Britain 56 Hudson Riverdistrict, production of brick in . 112 Illinois State legislature, investigating com- mittee 102, 115, 141, 143 Illuminating glassware 109 Imports, clay products 110 glass 156, 157 linseed oil 165 stone 127 Industrial Board of Department of Com- merce 50,80,93,98 Inflation of circulating medium 21,25 Institutions, financial. See Financial insti- tutions. Insurance companies 209 Interest rate on building loans 210 Iron ore, prices. See Pricey. production in United States 29 production in Great Britain 128 Labor cost, in glass industry 158, 159 in Iimiber industry 100, 101 in steel industry 61 in stone industry 131 Labor, efficiency of 94, 188 of, in lumber industry 101 Labor, representation of, in management 34,35 Labor shortage in southern pine region 94 Land values, increase of 237, 238 Lath, metal. Sff Metal lath. Lay wers' Mortgage Co 214 Lead, carbonate. See Lead, white. prices of. See Prices. production of. See Production. stocks of 83 white, prices of. See Prices. Lime, prices of. See Prices. production of. See Production. regional production of 130 Limestone, cost of production of 131 importance of 126 prices of. See Prices. Linseed oil, imports and exports of 164, 165 prices of. See Prices. production of. Su Production. Living, cost of. See Coast of living. Loans, Government, foreign 22 Government, United States 22 realcstafe. Src Realcstate loans. Lumber, cost of production of 98,99 exports 103 , future price tendencies of 102 INDEX. 261 Page. Lumber, labor cost of 100, 101 prices and index numbers on. See- Prices, production of. See Production. stands of 91 surplus stocks of 94 transportation costs on. See also Freight rates 101 Lumber industry, competition in 95 importance of 90 operating conditions in 94 Marble, cost of production of 132 prices of. See Prices. Metal lath, prices of. See Prices. Mill work, cost of production of 173 Ministry of Reconstruction, British 65, 66 Money, stock of 21 Mortgage loans. See Real estate loans. Nails, wire, prices of. See Prices. Natural cement 137, 138 National War Labor Board. See War Labor Board. Naval stores, prices of. See Prices. Office buildings, cost of (Table 19) 87, 89 Oil, linseed. See Linseed oil. Onions, prices of 83 Operating conditions in lumber industry 94 Overproduction, probability of 39 Paints, prices of. See Prices. Paint and varnish business during the war . . . 162 Painters and Decorators, Brotherhood of 178 Panic of 1873 75 Pa\'ing block, prices of. See Prices. Petroleum, world production of. See Pro- duction. Pig iron, basic, prices of. See Prices. gray forge, prices of. See Prices, freight rates on. See Freight rates. Pigments, prices of. See Prices. Pine, Norway, Western White, and Yellow, stands of 91 Pipe, 6-inch cast-iron, prices of. See Prices. Plastering of Government buildings 117 Plumbing materials, cost of production of . 170, 171 prices of. See Prices. Porcelain, sanitary, cost of production of 170 prices of. See Prices. Portland cement. See Cement, Portland. Prices and price indices, aU building mate- rials (Tables 3, 14, 15) 46, 77 all commodities (Tables 3, 6, 7, 14-17) 44- 46,60,77,85 asphalt (Table 79) 171, 172, 176 bars, steel (Tables 4, 9, 26) 52, 62, 108, 109 barytes (Tables 73) 167 basic building materials (Table 3) 42,44,46 billets, 4-inch (Table4) 52 blanc fixe pulp (Table 74) 168 bone black (Table 70) 166 brick 44 common (Tables 13, 29, 33-36, 40) 70, 117,119-122,126 fire (Tables 39,40) 12.5, 126 front orface (Tables 28,38,40) 110,124,126 vitrified paving (Tables 29,38, 40). . 117, 124, 126 Page. Prices and price indices, camauba wax (Table 75) itiS casein (Table 75) 168 cement, Portland (Tables 13, 52-55) 45, 46,70,138-140,143,144 Chrome green (Table 70) 166 chrome yellow (Table 70) .' 166 clay, china (kaolin) (Table 39) 125 fire (Table 39) 125 clay products (Table 40) 113, 126 coke, Conucllsville (Table 5) 51, 63 construction iron and steel products (Ta- ble 3) 46,108 prices indices, construction materials 15 copper 83 copper wire (Table 78) 175 cost of construction 86, 87 cypress (Table 24) 106 electrical supplies ( Table 78) 172, 173, 175 farm products (Table 3) 44-46 fir, Douglas (Tables 21, 23) 104,105 galvanized iron (Table 9) 62 glass (Tables 65, 66) 157, 160, 161 granite (Tables 47, 48, 51) 131, 135, 137 gravel (Tables 57-59, 61) 147, 148, 151-153 gum, copal (Table 75) 168 kauri (Table 75) 168 gjT)sum blocks 173 heating materials 170, 171 hemlock (Tables 22, 23) 105 hoops, steel (Tables 4, 11) 52,66 iron ore (Table 5) 51, 53 iron and steel products 44, 45 lamp black (Table 71) 166 lead 83 red (Tables 12, 72) 68,167 sheet (Table 78) 175 sulphate (Table 72) 167 white (Table 73) 163, 167 lime (Tables 13, 45, 50) 70,131,134,136 limestone (Tables 49, 51) 131,136,137 linseed oil (Tables 12, 76) 68, 163-165, 169 litharge (Table 72) 167 lithopone (Table 72) 167 lumber (Tables 3, 24) 44-46, 96-98, 106 marble (Table 51) 137 metal lath (Table 80) 172, 176 mineral aggregate (Table 00) 141, 148, 152 nails, wire (Tables 4. 11) 52,66,108 naval stores (Table 79) 171, 172, 176 oak (Tables 22, 24; 105,106 oc her (Table 70) 166 oil. Cliina wood (Table 76) 169 linseed (Tables 12-76) 68, 163-1()5, 169 .soya bean (Table 76) 169 paint materials (Tables 70-74, 76) 163, 164, 166-169 paint, white (Table 72) 167 Paris green (Table 70) 166 pigiron(Tables4, 5, 8) 49,52,53,01,108 pine, eastern white (Tables 22, 23) 105 yellow (Tables 21, 23) 97, 104, 105 pipe, C I 6-inch (Table 26) 108,109 lead (Table 78) .• 175 vitrified (Tables 35-37, 40) 121-123, 126 plasterboard 173 plates, steel (Tables 4,9) 52, 62 2G2 INDEX. Page. Prices and price indices, plumbing mate- rials 170,171 porcelain sani Lary (TaMo 77) 17U, 17 1 I'russian blue (Table 71) 100 putty (Table 7-1) 163,108 rails, steel (Tables 4,11) 52, 06 rivets (Table 20) 108,109 roofing materials (Table 77) 45, 109, 174 rosin (Table 79) 171, 176 sand, building (Tables 57-61) . . . . 147, 148, 151-153 sand glass (Tables 64, 65) 157, 159, 160 slieetstoel (Tables 4, 10) 52,(4 sbellac (Table 75) 168 shingles, cedar (Table 24) 166 shelt , grooved (Table 4) 52 slate (Tables 44, 49, 51) 131, 134, 136, 137 solder (Table 78) 175 spruce (Tables 22, 24) 105, 106 steel 45,49-51,80,108 Steel, structural (Tables 4, 9, 26) 52, 62, 109 stone, building (Tables 49-51) 45, 131, 136, 137 Stone, crushed (Tables 57, 60, 61). 148, 149, 151-153 stone, curbing (Table 48) 131,135 stone, flagging (Table 48) 131,135 stone, paving (Table 48) 131,135 tar, pLae (Table 79) 171,172,176 tile, hollow building (Tables 13, 35-37, 40) . . 45, 70, 121-123 tile, ceramic (Tables 39, 40) 125, 126 tile, drain (Tables 37, 40) 123,126 tin plate (Table 4) 52 turpentine (Tables 12, 74) 68, 163, 164, 168 ultramarine (Table 71) 166 umber (Table 71) 166 varnish (Tables 75, 76) 164, 168, 169 Venetian red (Table 71) 166 whiting (Table 74) 163,168 wire, copper (Table 78) 175 wire, plain (Table 4) 52 wire, rods (Table 4) 52 zinc, oxide (Table 73) 167 zinc, sheet (Table 78) 175 Prices after the Civil "War 74 Prices, cause of rise 14 Civil War and World War 73 decline of, in England 81 expectation of falling 22 Price fixing 49,50,52,115,139,140 Price influences 19 Prices in terms of gold, Civil War 74 Pricelevel, decline of 80 new 84 Prices, March, 1919, and March, 1918, com- pared 84 Price readjustment SO Price revolutions 20 Prices, stability of 21, 22 Principal reduction of building loans . . 210, 212, 213 Production cost. See Cost of Production. Produrtion during the war 26 Production of brick, common (Tables 29,30). 117 fire (Tables 30) 111,112,117 front or face (Table 29, 30) 117 oraiunental (Table 30) 117 vitrified (Tables 29, 30) 117 Production, cement. Portland (Table 52).. 138,142 clay products (Tables 29-32) 110,111, 117, 118 Page. Production, coal (Table 1) 27, 29 copper (Table 1) 27,29,83 com(Tal)le2) 28 cotton (Table 2) 28 glass and glass sand granite (Tables 41, 43, 64) 133, l.'-)4-156, 159 gravel (Table 57) 146, 151 iron ore (Table 1) 27,29 lead (Tables 1, 69) 27, 29, 161, 162, 10.5 lime (Tables 45, 46) 130, 134 linseed oil (Table 67) 161, 105 himber 93 marble (Table 41, 43) 133 oats (Table 2) 28 petroleum (Table 1) 27, 29 pipe, vitrified (Table 31) 118 pottery (Table 32) 118 rice (Table 2) 28 riprap (Table 42) 133 rosin 171, 172 rubble (Table 42) 133 rye (Table 2) 28 sand (Table 57) 146, l.il sand-lime brick 113 slate ( Table 44) 128, 134 spelter (Table 1) 27, 29 steel 49, 50 stone, building (Tables 41-43) 127, 133 crushed (Tables 42, 57) 133, 146, 151 stove lining (Table 31) 118 sugar (Table 2) 28 terracotta (Table 31) 118 tile, building and drain (Table 31) 118 turpentine (Table 68) 161,165 whait (Table 2) 28 zinc (Table 69) 161, 162, 165 Production, regional, of cement 138 clay products 112, 113 gravel 146,147 lime (Table 46) 130,134 sand 146,147 slate 130 stone 129,146,147 Putty, prices of. See Prices. Puzzolan 137,138 Questioimaire on deferred construction 242-244 on real estate 16,238,240 on rents 235-237 Raritan district, production of biickin 112 Rate of interest. See Interest, rate cf. Readjustment of prices 80 Real estate loans by financial institutions (Tables 85-S7, 89, 93-95) 16, 17, 209, 210, 216-218, 222, 223, 225, 227 Beal-estate loans compared with indices of national expansion (Table 88) 220 Real-estate loans, developments during 1917 and 1918 227 Real-estate loans, improved facilities for 233 marketability of 227-231 rediscount of 227-231 sources of 216 tax exemption on 233, 234 Real-estate questionnaire 238-240 INDEX. 263 Reconstruction, Ci^^l War, period as prece- dent 75 European 21, 103 Redwood, stands of 91 Refractories , war-time production of Ill, 112 Regional production. See Production, regional. Renewals of building loans 212 Rents and land values 16 Rents of apartments 235-237 of houses 235-237 of stores and offices 237 Restrictions of capital supply 228 Resources of financial institutions (Tables 89, 90, 92) 209, 221, 222, 224 Retail prices after the Civil War 75 Rivets, prices of. See Prices. Road construction, cost of 87, 88 Road materials, freight rates on. Sfe Freight rates. Roofing materials, cost of production of 169, 170 prices of. See Prices. Rosin. See Prices and production. Sand, cost of production of 148, 149 See also Freight rates. Prices and produc- tion. Sand glass. See Glass sand. Sanitary porcelain. See Porcelain, Sanitary. Sand- lime brick, cost of production of 114 production of. See Production. Savings bank. See Financial institutions. Scotland, prices of building materials in 56 Shrinkage of the dollar 45 Slate, cost of production of 132 exports of 129 See also Prices, Production, and Produc- tion, regional. Softwoods, stands of 91 Sources of real estate loans. See Real-estate loans, sources of. Spelter, production of. See Production. Spruce, stands of 91 Standing timber 91 Steel, labor cost of 51 price fixing on 49,50,80 prices in England and United States 55 See also Freight rates. Prices and produc- tion. Steel-frame office building, cost of (Table 19) . 87, 89 Steel industry, survey of, in war period 49 Steel schedule of March 20, 1919 84 I 'age. Stone, building, cost of production of 131 imports and exports of 127 production of in Great Britain. See also Prices, Production, and Production, regional 128 crushed, cost of production of. See aha Freight rates, Prices, and Production.. 148,149 Tar, pine, prices of. See Prices. Taxes, reduction of 31 Tile, hollow building. See Prices and Produc- tion. Timber stands 91 Title guaranty and trust companies 206, 207 Title insurance companies of New York. . . 213, 214 Torrens system 214, 215 Trades, building. See Building trades. Transportation problems in lumberindustry. 94, 101 Turpentine. See Prices and Production. Unemployment 178 Unessential industries 49 Union wage scale (Tables 81-84) . . . 178-185, 191, 201 United States Employment Ser\-ice 180 United States Housing Corporation 86, 180, 189 United States Railroad Administration . . . 150, 229 United States Shipping Board 180, 185 United States Tarifl Commission 154 Values, land. S^e Land values. Varnishes. See also Prices. Wages after the Civil War 75, 164 Wages, indices of 182-184 in building stone industry 131 in building trades (Tables 82-84) 183, 191,201 Wages, indices of in construction industry. . . 15 glass industry 158 lumber industry 100, 101 New York State factories (Table 81) . 180, 181, 190 Steelindustry 50, 51, 181 Wage rate of 1919 187, 188 Wages, reduction of 32 Wage scale, union. See Union wage scale. AVaiting policy of buyers 25 War Finance Corporation 229 War Industries Board 229 War Trade Board 261 \ATiite lead. See Lead, white. ■VMiiting, prices of. See Prices. Yellow pine, prices of. Sec Prices, stands of 91 Zinc, production of. See Production. o .,#•' This book is DUE on the last date stamped below jUN 1 i ^^-i^ ^ .^ -;■'» I FEB 7 1934 FEB 1 1935 MAY 21 ««8 jut 4^ 1960. r JVJAIN- ^ I V E D LOAN DESK OCT 2 A.M. 71819110111 iJEC'D URL-LD ftECrDLD-ORC «AN 71967 JUL 2 6 1984 Form L-9-35m-8,"28 ljl.'t WAT V JUL 2 6 1984 1 1964 P.M. 12111213141516 3 1158 00906 1531 J HD 9715 U52A5 1919 UC SOUTHERN REGIONAL LIBRARY FACILITY mill" I'l II I" II' 'I ' 'I ' '" 'II '" ' 'I 'I 'II " AA 000 994 353 i UNIVERSITY of CALIFORNI> AT LOS ANGELES LDBRAKY m Ell