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 an<l the war • - - 183
AdjuHtinn wa^M« U) th«! <-o8t of living - : . • ... l'S4
lniT<\>H<; 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]Hifien<y of Labor in the Building TradcH 188
V. Sources and Supply op Capital for the (Jonstruction Industry.. 205-234
Methods of Supply and Terms of Real Estate Loans 205-215
Temporary and permanent loans 205
]Vlethod.s followed in making luaii.s by banks, title <<>mi)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 <rriHMjiJly. TJiis <lata Ims hoon collaboratod and put
n ]»oinirtn<'Mt form \*\ Mr. MiJlor and his assistants, Dr. M. A. Mikkol-
<*'u, Dr. E. J. Clapp, Dr. John Whyto, Mr. T. S. Holdrn, and others.
]t is this data whi<h I herewith submit to you as the last act of the
Information and Edu* ation Service. I believe that tlie book should
be in the ha)ids of every Federal, State, municipal, and town ofFicial
who ])as ill contemplation ajiy public work, as well as in the hands
<'f jdl arrhite* ts. })uilders, and others i))terested in construction
<lcv<'lopment.
1 also take this ^H(•s^^i(.]^ of thanking you for the privilege of work-
.,g with the department during the past year. You have given
iiic the pleasantest year of my life, for I have been able to feel that
jt Inis been a year of usefulness. Furthermore I have learned much
from you the value <>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<j:lit iilx.iil ])y llio var must Ix' poinianent
or scinipormaruMit.
Tlioinvostigation,vliile covering' a ratlicrwide field, required neither
minute nor exacting roscarcli. It was extensive rather than inten-
sive, desiirned <o meet a definite trade demand for the latest informa-
tion of a kind whicli (lie trade habitually uses. Most of the desired
inrormalion, principally of a statistictil nature, was already in exist-
ence, collected by departments and bureaus of the Government but
not selected and compiled for our special purpose; and the rest was
obtainable tlnough questionnaires. Reeognizing the urgent nature
of the investigation by this section, the various Government depart-
ments and bureaus rendered assistance freely, in not a few instances
permitting transcripts to be made of statistics and reports awaiting
publication. Tliis section, in turn, promptly released for pubhcity
by the division all information of value which it received.
The chief diiTiculty connected with the investigation was the short
time available. If it was to serve the purpose set for it, the essentials
of the investigation would have to be finished in two months, by the
1st of ]\rarch. This was accomplished, and the present report is sub-
stantially a collection of papers, extended and amphficd, which were
used as sources for publicity by the division before March 1, 1919.
In the course of the investigation, it became apparent that the
principal cause of the rise in prices since the beginning of the war in
Europe, and particularly since the entry of the United States into the
war, is the depreciation which has taken place in the value of money,
and that this depreciation is relatively permanent. The high cost of
everything, all over the world, is primarily a monetary phenomenon.
As to this matter, the opinion of Prof. Irving Fisher was sought; and
and upon request Prof. Fisher supplemented his oral confirmation ^\•ith
a paper entitled ''The New Price Revolution," which pointed out the
war changes in the circulating media of this and other countries, ex-
plained their effect upon the price levels here and abroad, and de-
clared his conviction that the general level of prices as it stood on
March 1, 1919, "is not going to fall much, if at all" (The price levels
reached upward in March and continued to advance up to July 1,
1919, when this report went to press.) A higher price level of course
means a higher wage level, because it means a higher cost of living.
Prof. Fisher's paper was ready for release on March 3, 1919, and
owing to the great weight of his authority on prices, the daily news-
papers and trade papei^s gave wide pubhcity to the substance of his
statement. Within six weeks the division had sent out 200,000 copies
of this paper, mostly in response to requests by bankers, manu-
facturei-s, and business men who had seen reference to it and who
wished to distribute it among their customei-s. Prof. Fisher's mono-
ECONOMICS OF THE COXSTRUCTIOX INDrSTRY,
15
graph has done much to dissipate fallacies as to the temporary nature
of the present price level.
FINDINGS.
The more important findings of the investigation are the following :
1. As to deferred construction.
A questionnaire relating to projects for which plans had been drawn
but for vrhich contracts had not been let prior to the armistico was
sent out in January to 15,000 architects, engineers, public officials,
and others. The replies disclosed 6,472 deferred projects, estimated
to cost $1,711,802,000, divided into 3,378 projects, valued at
$481,062,000, for private owners, and 3,094 projects, valued at
$1,230,740,000, for political and public-utilities corporations.
2. As to recent construction.
The most complete construction statistics available cover contracts
let for engineering and building construction north of the Ohio and
east of the Missouri, together with some adjacent area, containing
four-sevenths of the population of the country.
The contracts let in the first six months of 1919, compared with
1915 and 1916, run as follows:
January . .
February.
March
April
May
Jane
1919
$51,000,000
95, 000, 000
110,000,000
192.000,000
245,000,000
299,000,000
1915 «
1916 a
$70,000,000
79, 000, 000
122,600,000
124,000.000
125,000,000
149.000,000
$87, 000, 000
92, 000, OtIO
131,000,00<J
140.000,000
1X2,000.0-10
195.000,000
a Costs brought up to 1919 price level.
3. As to prices of construction materials.
In April, 1919, the index number of construction materials, includ-
ing steel, was 98 per cent higher than in the year ended June 30, 1914 ;
excluding steel, it was 84 per cent higher.
Tlie mdex number for commodities in general was 10 ])er cent
higher in April, 1919, than in the year preceding the war.
Tliat is, building-materials prices have risen less rapidly than the
general price level. If the price level stays up, the cost of building
materials can not well fall.
4. As to wages in the construction industry.
The mdex number for union wage scales in 41 leading cities shows
an advance of 28.5 per cent since 1914. This percentage of advance
is less than the percentage of advance in the cost of livmg or iu
wages in certain other industries.
That is, if the cost of living and the general wage scale stay up, the
cost of buildmo'-construction labor can not well fall.
16 EiONOMK'."^ OF THi: CONSTRUCTION INDI'STRY.
r>. Ak (o cost of ronslruction.
The mcroasc i?i tlio <ost <»f «-oiistni( tiou varies with the type of
projcrt. It is s<.m(\vliiit, more tliaii SO per cent for a liigh-^ade steel
skeleton ollice building iiixlsoiiH'Avliiit less than .jO per cent for (hvelling
limises and otlicr builjlings in wliich tlie metals group of materials is
not, so largely represented. It should ])e noted that neither of tliese
increases is so great as the increase in ]>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
<luestionnaire sent to 150 real estate boards throughout the country.
Replies to this questionnaire were not returned in time to be of use
in this report.
In general, it appears tliat rents, which have risen less rapidly
:]ian constniction costs, are continuing to rise because of shortage
of buildings.
7. As to mortgage loans.
Tlie main sources of real e.state loans are savings banks, insurance
companies, and building and loan associations. Savings banks, in-
surance companies, and building and loan associations have not
gi'own so rapidly in resources as banks, other tlian savings banks,
since 1913.
The country's finances are well organized to serve (a) commercial
needs, by commercial loans, the process being facilitated by the redis-
coimt privileges of the Federal Reserve banks; and (&) long-terra
investment needs, by securities of guaranteed worth and of universal
salabihty.
The <ountry's finances are not well organized to supph* tlie demand
for building capital through mortgages, the type of security almost
iniiversally used for obtaining such capital. The average mortgage
is not of guaranteed worth, nor is it readily salable. Properly to
finance the building industry, the standard form of long-term invest^
ment, namely, bonds, should be utilized more freely. Institutions
nre needed to hypothecate real estate mortgages and issue bonds
against them. This has been done for farm mortgages tlirough the
Federal farm loan banks; it is proposed for buildmg mortgages
ECONOMICS OF THE CONSTEUCTION INDUSTRY. 17
tiirougli liome loan banks and a proposed Federal mortgage bank.
In that direction lies t\m best hope of the building industry for
recovering the use of its former share of the Nation's capital. Another
measure that has been urged on Congress is the exemption of limited
am omits of mortgage loans from the operation of the income tax,
to the end that these securities shall net as great a return to the in-
vestor as municipal bonds, Government bonds, farm loan bonds, and
other similarly exempted investments.
121297°— 19 2
Jlir.
II, THE DECREASE IN THE PURCHASING POWER OF MONEY.
THE NEW PRICE REVOLUTION."
By Irving Fisher,
Professor of Political Economii , Yale University.
At the present time there is a marked halt in production. Industry is slowing down.
Unemployment of labor increases. Some industrial concerns are failing to earn
profits and others are suffering the dissipation of their accrued profits, because even
by shutting theu- plants down, they can not save certain of their expenses or any of
their fixed charges. The Government's revenues, dependent as they are upon the
national income, may fall short at the very time we need them most. In brief, we are
threatened with a widespread business depression, and from peculiar causes, for the
unsound conditions usually preceding a widespread business depression are absent.
Belief that prices must drop. — The main reason why business is not going ahead
better is that most people expect prices to drop. The merchant is selling, but not
buying. The manufacturer holds up the purchase of his raw materials. People
quote the disparity between present prices and those prevailing "before the war,"
and decide they will not buy much until present prices get down to ' 'normal. " This
general conviction that prices are sure to drop is putting a brake upon the entire
machinery of production and distribution. Readjustment waits because we keep
on waiting for it. ' We have waited in vain for over three months. It is interesting
to observe that many manufacturers think that prices must come down, including
the price of labor; but they are ready to demonstrate to you that their own prices
can not come down, nor can they pay lower wages. Almost everything they buy
somehow costs twice as much as before the war, and their labor is twice as dear. They
can not pay then' labor less if labor is to meet the increased cost of living. Now, as a
matter of fact, when we investigate almost any individual one of the so-called high
prices for industrial products we are likely to find that individually it is not high;
that is, it is not high relatively to the rest. Our quan-el is with the general level of
prices.
The general price level.^ Variations in the general price level may be compared
to the tides of the sea, while individual prices may be compared to waves. Individual
prices may vary from this general level of prices for specific reasons peculiar to indiv-
idual industries, just as the height and depth of waves vary from the general level
established by the tide. The causes controlling the general price level are as distinct
from those controlling individual prices as the causes controlling the tides are distinct
from those controlling individual waves.
Individual versus universal price influences. -AH prices ha\e risen, but some
have risen more, some less, than the average, for particular reasons affecting each
industry. In some cases an improved organization of both employers and employees
has enabled them to combine against the public and take full advantage of the price
advance. The war brought about an abnormal demand for certain products, like
copper and steel, and they advanced faster than the average. The abnormal demand
' Written for the U. S. Department of Lafxir and originally published as a separate bulletin of the
Di\-ision of I'ublic Works and Construction Development.
19
20 KCONOMirS OF TIIK CONSTRUCTION INDUSTRY.
liiiviiiu' (lisn|>|)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.
(■<innlrie.s to l«»w-prico(l countries, so that, until "Innatefl" Eiiropcjan prices fall f(old
is not likoly to (l(»w thitlicr. TricnM are no more likely to fall there than here, and for
tlio Harno reiusons, which will be exi)lained l)elow.
:'.. Jicduf.lioa of oiiLHtandin.g credit. — The chief (lependen<;e of those who predict
J< >\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 <Tedit expansion repre-
.sented by the new victory notes has already occurred in the form of Treasury certifi-
cates, which are merely to be funded In* the victory notes. The victory note issued
tlius represents only a shifting of the obligation to pay credits advanced to the Govern-
ment, a shifting from the shoidders of the banks to the shoulders of the ^ictory note
Iniyers. The volume of outstanding bank credit remains the same. To a certain
degree this contention is triie. But a portion of the April Aictoiy note iasue will go
to pay fntiu'e expenditures, not accriied expenditures. Then as soon aa the Govern-
ment needs additional money, it will issue new Treasury certificates, resulting in
new extension of bank credit. Moreover, there is little doubt that there "will be at
least one more Government bond is.sue during the reconstruction j'eriod, and this
v,-i\\ tend to further increase our present credit structiu'e.
Foreign government borrowings, same effect. — The banks must lend credit and
create deposits to meet the expenditiu'es not only of oxir own Government, biit of
foreign Governments as well. The same thing residts even if these Governments
are served directly by private investors here instead of \-ia the United States Treasurj-.
These investors pay for foreign Government bonds as they do for our liberty bonds —
on the installment plan — paying a small part down and borrowing the rest from the
bank. Tliis increased purchasing power will be mostly spent in this country for
supplies to l>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
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ECONOMICS OF THI-: CONSTRUCTION INDUSTRY.
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ECONOMICS OF THE CONSTRUCTION INDUSTRY. 29
World production of coal in 1913 was greater than in any year
since that time. Not only was there not an abnormal expansion of
the coal industry from 1913 to 1918 but not even a normal increase.
Here, then, in the development of this fundamental industry durmg
the war there is no indication of an expansion of industry as a whole.
In the United States coal production in 1918 exceeded that of 1913
by about 20 per cent, but this was a smaller relative increase than
from 1908 to 1913. In 1914, 1915, and 1917 the production of coal
in tlie United States was less than m 1913.
Petroleum production showed a large increase from 1913 to 1917,
both m the United States and in tlie world as a whole. Figures for
1918 are not given in the table, but there was doubtless a further
increase in 1918. Tlie increase from 383,753,547 barrels in 1913 to
500,229,929 barrels m 1917, was relatively but little larger than the
increase in the four years from 1909 to 1913. For the United States
alone also the increase during the four years 1913 to 1917 was rela-
tively about tlie same as from 1909 to 1913. Production of petroleum
therefore does not indicate an abnormal expansion of industry as a
v\"hole.
Iron ore production statistics for the world are not available. But
in the United States, which produced more than one-third of the
world's iron ore in 1913, production increased only from 61,780,437
tons m 1913 to 75,288,851 tons m 1917, an mcrease of less than 25
per cent. This also could hardly be called an abnormal expansion.
Production of coj)per both in the world as a whole and in the United
States increased more rapidly. From a production of 2,198,733,223
pounds in 1913 the world's output increased to 3,020,654,736 pounds
in 1918, an mcrease of 37 per cent. During the same period pro-
duction of copper in the United States mcreased about 50 per cent.
During the live years from 1908 to 1913 production of copper both in
the world as a whole and in the United States alone increased approxi-
mately 30 per cent. When the abnormal consumption of copper in
the manufacture of munitions is considered in the light of tliis uicrease
in production, it becomes evident that no considerable surplus of
articles contauiing copper cotdd have existed when the armistice was
signed. Since then tlie copper companies haA'c accumulated a con-
siderable siu'plus of copper. Whatever surplus the copper companies
liave accumulated since the cessation of war orders will probably fall
far short of covering the present shortage of copper iji the coinitries
which during the war have been cut off from normal supplies.
Lead production statistics for the world aie not available. Pro-
duction in the United States increased about 33 per cent during the
four years from 1913 to 1917. Production of spelter almost doubled
in the United States from 1913 to 1918. This no doubt represents an
increase considerably above the increase that would have occurred
30 KcoNOMrrs or Trrr, constructfox industry.
if (licrc ]iu(l Ix'cii IK) w'.'U', iuid it is douljirnl wlicthcr the markets will
uhsojl) tlie cupucit y production of our \on(\ and ziiic industries in the
iiciiv future.
'I'lic foic^oiiiL!; statistics taken us a whole indicate two tliinj^s: (1)
That lU) suj|)his of tliosc minerals was accumulated during the war;
(2 ) that thert^has })een no such large increase in the productive capac-
ity of industry as a whole as is apparently widely assumed. It is
only certain ijidustries concerned primarily with war production that
liave e.\j)anded far above nonnal. The end of the war did not so
niuch necessitate cutting down of production as a whole as a read-
justment of production from a war to a peace basis. Tliis read-
justment is no doubt a costly process, but the cost has been largely
liquidated by the large corporations in the way of abnormal deduc-
tions from profits under the head of amortization or depreciation.
In agricidture theie has been not only no a})normal increase in
production, but on the contrary an absolute decrease. As sho\vii in
the accomptmying table on "World production of agricultural com-
modities ' (Table 2) the production of wheat, corn, rye, oats, sugar,
and cotton during the war fell below the prewar average. In the case
of rice only was there an hicrease. No surplus of foodstuffs nor of
cotton is available in the world, and productive capacity of the year
1919 is hardly great enough to meet the needs of the w^orld. A
collapse of prices resulting from an unmarketable surplus of agri-
cultural products is an event that need not be feared.
What the business man stili fears.
Although no sharp fall in prices has occurred, or perhaps because
no sharp fall has occurred, the business man still fears to go full
speed ahead. To point out to him that inflation still exists and
will tend to maintain high prices, that stocks of commodities are
exhausted and must be replaced, and that the present productive
capacity of the world mdustry is probably not large enough to glut
the market, does not remove his imeasiness. Two thoughts in the
minds of busmess men are exercising a repressive influence upon
hulustry. The first is that prices inevitably are going to move down-
ward tow^ard the prewar level, and that this movement will be sub-
stantial enough to give the producer or dealer who defers operations
for some time an important advantage over his competitor who goes
ahead at present. This is the immetliate cause of the halting condi-
tion of business at present. Lurkhig in the background is the second
thought of the business man, namely, that the productive capacity of
world industry is going to expand more rapidly than the world marl>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; procee<ls to the
foniiation of joint district councils and annual joint conferences in a single industrial
corjwration; and admit.s of extension to all corporations in the same industry as well
as to all industries in a community, in a nation, and in the various nations.
This form of organization would probably be opposed by advocates
of trade-unionism as destroyhig trade-union organization in favor of
industrial miionism. But it is not the pm'pose of this report to point
ECONOMICS OF THE CONSTRUCTION INDUSTRY. 35
out what form of organization is to be desired, but merely to show
that it is becoming apparent that empk^yers feel the need of cooper-
ating with organized labor and are willmg to meet labor halfway in
some provision for representation of labor in industry. There are,
still, of course, exceptions, and some employers would inhnitely prefer
to come to terms with labor by holdmg over labor's head the club of
unemployment rather than by inviting its representatives to par-
ticipate in the management of industry. But with, labor unions
strongly intrenched, havmg both economic and political weapons at
hand; with liberal governments favoring the organization of labor
and its representation in mdustiry; with pu])lic opinion, as expressed
by such a conservative spokesman as William H. Taft, favoring
unionization and collective bargaining as against the outworn system
of individual bargainings; and wdth the fear that bolshevism is lurk-
ing in the background ready to advance if the laboring class as a whole
is not given an opportunity for not merely a living but a comfort-
able living and a chance for savings, the autocratic emploj^er of
labor can not long survive. And with labor having a stronger voice
in industrial management it is naturally to be expected that with
increased efhciency in production labor will receive increased wages.
That is to say, labor cost, the greatest single factor in cost of produc-
tion, will not decline in proportion to the increase in output per man
per day, but instead wages per day or week will tend to rise. Con-
sequently there will not be the same tendency to slash prices in
competition for business as there would be if mcreased efficiency in
production were accompanied by an extreme decline in the costs of
production.
To conclude this section, it may be said that wage earners as a
whole in the United States have not in the past received wages suffi-
cient to provide them w^th a comfortable living with a little left over
for recreation and old age. This has been sufficiently discussed by
many WTiters. Some have accused big business of paying labor less
than it was able and accumulatmg enormous profits for the few.
Defenders of the few have replied that these accumulated fortunes
even if distributed among the many would not materially improve
the conditions of the masses and that the main trouble has been
insufficieiit production, rather than unjust distribution. Now there
is the hope of much more efficient producti<m. All — labt)r, capital,
and the public — seem to agree that if it is possible labor should
receive more. It is therefore to be expected that labor will receive
higher wages than ever before if the expected increase in efficiency
is realized, provided of course the employer can find a market for
his product. Even if higher wages are paid as production increases
per man and the costs of production are thus largely stabilized, will
prices of the product not have to be cut in order to find a market^
30 KCONOMKS or Tin-: f;ONSTRUCTION INDUSTRY.
Without attcuiptiiig here the tusk of prophosyhig the exact course
of prices as affected by increased volume of production, we desire to
point out a few ])er(iMetit facts relating to the probable demand for
coinniodities in the forthcoming mcmths and years.
Abnormal demand for construction materials.
There arc many reasons for expecting a demand for commodities
in the after-war period greater than normal. Only some of the most
important reasons will be touched upon here.
There will be a tremendous demand for commodities for rebuilding
the regions devastated by the war. Buildings, bridges, roads, and
other improvements have been destroyed and must be replaced in
France, Belgium, Serbia, Roumania, Poland, and in other countries.
It is neither p()ssil)le nor necessary here to attempt a statistical com-
putation of the tons of material or the thousands of men required
for this reconstruction work. It is evident that here alone is a work
of great magnitude calling for abnormal activity of postwar industry.
In the nondevastated regions of the belligerent countries production
of durable goods not necessary for military purpose was largely
neglected durhig the \var and in many instances prohibited. The
nations of the world are suffering a shortage of houses running into
])illions of dollars. Accordmg to Jacques Greber, chairman of the
French commission on reconstruction, visiting the United States in
June, 1919, sixteen billions of dollars will be required to replace the
structures destroyed in France, makmg no allowance for the con-
struction deferred by the war. Roads and railways have deteriorated
dm-mg the war and must be improved. In the United States par-
ticularly a campaign for good roads under way before the war wOl
now be pressed with renewed vigor. For this purpose not only great
quantities of sand and gravel and other raw materials but much road-
constnictuig macliinery will be needed, and the railway's will be called
upon to transport road-makmg material m unprecedented quantities.
Industrial equipment m some industries has not been kept in a state of
repair and wiU need to be repaired or renewed and increased. The
shipbuilding activity rei)airing the losses inflicted by the submarine
as well as to permanently strengthen our Navy will require the labor
of many tliousands of men more than were formerly engaged in this
industry in peace times and great c^uan titles of iron and steel and other
commodities. In many countries the development of water power
was seriously being contemplated before the war and wiU now m the
post-war period receive renewed attention. In the United States Con-
gress will hardly delay longer in making possible the utilization of our
enormous water power nt)w largely going to waste. Switzerland,
which suft'ered greatly durhig the war for lack of fuel, will lose no
time in getting under way the development of its magnificent water
power, and in other countries, as, for example, in Italy, great activity
ECOlSrOMICS OF THE COISTSTRUCTION INDUSTRY.
37
in electrification may be expected not in the remote but in the imme-
diate future. Development of waterways also may be expected to be
pushed with vigor. These pomts need only to be mentioned to bring
the realization of a tremendous potential demand for commodities
which will become active once the burden of doubt and uncertainty
is removed from the shoulders of the industry of the world. It should
not be forgotten also that the mdustries called upon to supply mater-
ials for the building of houses, roads, railways, bridges, factories, ships,
power plants, etc., will themselves need materials in turn. Steel
mills, lumber mills, smelters, cement mills, etc., will require coal and
machinery on an enormous scale.
Abnormal demand for consumers' goods.
But not only will there be an unprecedented demand for materials
for the construction of tools of industry w4th which to mcrease pro-
duction such as houses, railways, factories, water powers, and ships,
but an exceptional demand for consumers' goods uidess checked by
incidcated habits of thrift. The war waged upon such a tremendous
scale has given new experiences to a large share of the world's inhab-
itants, has tauglit them new wants which they will strive to satisfy
in the future. This is a matter of such importance that it deserves
somewhat detailed consideration. It is a subject concernmg which
doubtless many books will be written in the next generation. Let
us consider first the case of the men mobilized during the war. The
Current History Magazine for February, 1919, gives the following
figures as representing the mobilized strength of the belligerents
during the war:
United States 4, 272, 521
British Empire 7, 500, 000
France 7, 500, 000
Italy 5, 500, 000
Belgium 267, 000
Russia. 12, 000, 000
Japan
Roumania. .
Serbia
Montenegro .
Greece
800, 000
750, 000
707, 34.3
50, 000
230, 000
Portugal .
100,000
Total allies 39, 676, 864
Germany 11, 000, 000
Austria-Hungary 6, 500, 000
Bulgaria 400, 000
Turkey 1, GOO, 000
Total central powers. . 19, 500, 000
Grand total 59, 176, 864
Consider this: A number of men greater than the total pojnilation
of either France, Great Britam, or Italy or three-fifths that of the
United States lifted out of the customary round of thmgs and ]>laced
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 th<i.«e of otliers. Common brick prices, despite the competitive character of
ECONOMICS OF THE CONSTRUCTION INDUSTRY. 45
the brick industry', advanced more rapidly than cement. This was due to the fact
that the chief cost of producing common brick is labor and that when the demand
is not suflicient to cover rising wages cost, the brick manufacturers will close their
plants and thereby curtail production and prevent the overstocking of the market.
Cement producers, on the other hand, with their high overhead costs are tempted
to run their plants at full capacity even though they must lower their prices to sell
their entire output. Stone prices exhibited several tendencies. Indiana limestone
maintained a high level of prices, but building gianite lagged far behind other
building materials because of the competition with granite of stone, cement,
brick, and hollow t,ile. Structural steel prices, of course, far outstripped prices
of all the building materials because of the heavy demand for eteel during
the war. In sharp contrast to steel is the price of rubber roofing, which remained
almost stationary on account of the relatively low price of rubber during the
war. Lumber prices, on the whole, did not rise quite as fast as those of other building
materials, but if yellow pine and Douglas fir, the chief building woods, be considered
the rise in the price of lumber was almost the same as that of other commodities.
Prices of lumber, hollow building tile, and sanitary ware all advanced in proportion
to the average rise in the cost of labor and other building materials.
Comparison of prices of lumber and of farm products.
Lumber, as a group, during the last quarter of 1918 was 73 per cent
higher than in the prewar year. The farm products group showed
an increase of 116 per cent at the same time. The indices show that
at the beginning of the year 1919 a farmer could exchange a certain
amount of his produce for 25 per cent more of lumber than the same
amount of produce would have brought him in the year preceding
the war.
Shrinkage of the prewar dollar in terms of commodities.
Chart II shows graphically tlie increases in price indices of the
following four groups: Farm products, lumber, building materials
(not including steel), and all commodities other than building mate-
rials. The circles in the center of the chart represent the siirinkage of
the prewar dollar, expressed in terms of these groups of commodities,
the shaded portions representing the residual values of the dollar
in terms of these several price levels. Roughly speaking, by the
end of 1918 the prewar dollar, as expressed in terms of farm products,
had shrunk to 46 cents; as expressed in terms of lumber, it had fallen
to 58 cents; in terms of building materials (not including steel), to
54 cents; and in terms of all commodities other than building
materials, to 47 cents.
Building materials prices compared with prices of iron and steel products.
A comparison of conditions in the building materials industries
and the iron and steel industry is of so nmcli interest that it has
been made the subject of the second section of this chapter, where this
comparison is presented in some detail.
46
ECONOMICS or TIIK CONSTRUCTION INDUSTRy.
Prices of individual commodities in the buildings materials group.
Sections VII to X\' of this chapter give summaries of the informa-
tion on pioduc-tion niul prices for a great nunil^er of individual }>uild-
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 ])uil<ling materials, was
specifically curtailed ])y governmental order.
Figures of tho United States Geological Survey s]\(t\\' that actual
production of common lime in 1018 was 20 per cent less than in 1917.
Portland cement pro(hued in 1918 was 23 per cent inider the 1917
figure. Lumber production in 1918 was 10 per cent less than in
1917 and 19 per cent less than in 1910. Common brick in 1917 was
21 per cent under 191(5. It has been estimated that in 1918 the
production of common brick was less than half the 1917 figure.
As a consequence, the markets have been understocked rather than
overstocked in these commodities. If any one of these commodities
had been considered as essential as steel, the Government would have
been obliged to fix the prices on them at figures high enough to
encourage every producer in the countr}' to run his }tlant at maximum
capacity with a guarantee of a reasonable profit on his output. In
that case the prices on these commodities would have reached much
higher levels than they actually did.
Iron and steel products used in construction.
Iron and steel products used in construction are considered in
Section VIII of this chapter, together with some figures on the increase
in freight rates on pig iron and finished steel.
Table 4. — Prices of iron and steel products.
[Prewar prices=average July 1, 1913, to June 30, 191-1.]
Commodity.
Prewar
price.
Julv,
1917.
Novem-
ber, 191S.
Mar. 1,
1919.
$33.00
24S
$30.00
225
$47. .50
21S
$43.50
199
$.51.00
225
$47.00
207
S2.90
230
$2. 70
214
$2.90
230
$2.70
214
$3. 2.5
2.58
$3.00
238
$3.00
237
$2.80
221
$57.00
226
$57.00
236
$3.2.5
230
$3.25
230
$3.50
219
$3.50
219
$5.00
253
$4.70
237
Mar. 25,
1919.
1. Pig iron, basic:
Quoted . per long ton
Relative
2. Billets, 4-inch:
Quoted, per long ton
Relative
3. Sheet bars:
Quoted, per long ton
Relative
4. Pkelp, grooved:
Quoted . per hundredweight
Relative
5. Merchant bars, base:
Quoted, per hundredweight
Relative
6. Plates, tank:
Quoted, per hundredweight
Relative
7. Structural steel, base:
Quoted, per hundredweight
Relative
8. Wire rods:
Quoted, per long ton $25.20S3
$13.3183
100
$21. 8333
100
?22. b750
100
$1.26
100
$1.26
ICO
$1.26
100
$1. 2675
100
Relative.
9. liain wire:
Quoted . per hundredweight .
Relati ve ,
10. Nails, wire:
Quoted, per hundredweight.
Relative
11. Blacksheets, No. 2,s:
Quoted, per hundredweight.
Relative ,
100
$1.4125
100
$1.5975
100
$1.9.*'
100
$52. .50
394
$95.00
435
$105.00
463
$6.00
476
$4. .50
357
$9.00
714
$4.50
356
$96.25
3'52
$3.95
280
$4.00
250
$s.00
404
S25.75
193
$38.50
176
$42.00
185
$2.45
194
$2.35
187
$2.65
210
S2.45
193
$52.00
206
$3.00
213
$3.25
204
$4.35
220
I
121297"— 19, (To fac« pas** 52.)
1
r
w 1 *^
■-,-=:,- -r-.B,-.-
1
- 1 *
! i i
i
!
"•
1
•
iiil
...
''1:
ill
i^i
1 1
1 1
1 ;
i!^
Si 1
i K\
MO
KELATIVEPRlCMOr
1; 1
PIG IRON
IRON ORE COKE
ii !
CY MONTHS
AURAflE oyoreDPRlcesdUaias"^
_
LM^E«4-100(
i
»
^-
1S.5 1 .914 1 19,5 1 ,9.» II
S 3 4
! J i
! j i
^ ^ 'J
i
L
^ r
I
J
I
■"1
1
f
„.
A
—
— 1
,
i
Y
i»
^
/^
i(
^
^r
^^
..
V
^
■
s i ii i i Si
i'i'j'.
I'i'sV
ii i
'i U
U
.9,5 1 ,9K
.9.6
.9.7 .9l8
>eo
.,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. <ire;»t
Britain.
a 97
o96
o95
olOl
oll2
124
a 122
al25
143
a lo6
o 156
171
190
204
209
214
216
224
231
227
217
215
212
4. France.
(-\u{
233
18;
100
100
101
107
124
135
142
158
179
190
223
257
273
292
320
332
347
357
349
360
(Oct. 18)
Figures for first month of each quarter.
ECONOMICS OF THE CONSTRUCTION INDUSTRY.
61
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62
ECONOMICS OF THE CONSTRUCTION INDUSTRY.
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ECONOMICS OF THE CONSTRUCTION INDUSTRY.
63
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ECONOMICS OF THE COXSTKUCTIOX INDUSTRY.
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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
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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 comnio<litie3 in general
rose steadily througli the war period. The rise during tlic Civil War
period, with the year 1860 as the base, runs up to a somewhat liigher
level than the rise during the World War. In both wars, building
materials rose in price, but they did not at either time reach leveU
so high as tlie price levels of other commodities.
In short, the com'se of prices during the Civil War showed the same
general trend as during the Vforld War, following the same rising
spiral, viz, increase of the amount of money in cir^julation, increase.!
cost of living, increased wages, and increased prices of commodities
in general, each factor reacting upon the rest.
Course of commodity prices after the Civil War.
At the beghining of the year 1865, the end of the Civil War being
in sight, wholesale prices broke suddenly and violently. During the
first six months of the year, prices in general fell oil 27 per cent frorrt
the high level of January. However, the break in wholesale prices,
though unprecedented in violence and accompanied by the unsettling
influence of the end of the great war, produced no business crisis or
depression. Through the latter half of 1865 prices recovered from
the low point until in January, 1866, they stood just 16 per cent
below the level of January, 1865.
From the beginning of 1866 prices dropped slowly downward.
The downward movement was quite gradual; the median for prices
of 92 commodities did not reach the prewar (1860) level until the
year 1878.
The cessation of hostilities did not, of itself, bring about a return
of prices to prewar levels. Indeed, prices did not return to prewar
levels until after other economic factors, such as the opening up of
new land by railway construction, the utilization of improved agri-
cultural implements and other labor-saving machinery, the develop-
ment of foreign trade, and the organization of industries for large-
scale production, had operated to reduce production costs, and, in
consequence, wholesale prices.
Commodity prices compared with prices of gold.
As is well known, the period following the Civil War was a i>eriod
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
<orD piled by T. S. Ilolden, from
Mitchell.
•Cold, Prices, and Wages under the Greenlrc'- Standard," by W. C.
TS
KCONOMK'S or THK OOXSTRUCTION INDUSTRY,
ECONOMICS or THE CONSTRUCTION' INDUSTRY
79
|1664"
1917
1865 "'IS 18| 1866-
1919 r 1
; '.
5 4 1
§ -
? M § i ^ ^
iio
MEDIAN5 OF R£LAT[VC PRICES
1 ' 1 ■ ' 1
' 1 ' ■
OF
BUILDING MfflTRFALS
300
\
MADE FROM A LI5T
19 IDEMTICAL COMMODITIES
239
' DURING T«t
'
CIVIL WAR - PRLSENTlftRR
--- civ'n_ WM3
240
I860 '"^ISlSl 1361 A"=19:4 1 1862 '""ISlSl 1865'"ol916
1 1 S S 1 ? 1 5 1 ^ § § 1 1 5 §
240
"r'i"i"
■•\'-\"\"
"I"!"!"
"I"!"!"
e?o
zro
roo
. —
1
1
/
---
200
130
1
»
1 1
180
r
/
1
/
/
/■'■
/
/
160
140
1^
leo
1
1
1
«
/
>
>
>
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 COI<rSTKUCTION INDUSTRY.
85
Table 16. — Covrr.c of commodity prices during the 1919 readjustment period.
[Base: Average of figures for the year 1913.]
Period
Sept. 1
Oct. 1,
Nov. 1,
Dee. 1,
Jan. 1,
Feb.l,
Mar. 1,
Apr. 1,
May 1,
June 1,
Juiy 1,
, 1918.
1918..
1918.
1918..
1919. .
1919.,
1919.
1919.,
r,U9..
1919.
1919..
Mar. 1,1918.
Fall, Mar. 1, 1018, to Mar. 1, 1919.
Fall, Sopt. 1, 1918, to Mar. 1, 1919.
Fall, Oct. 1, 1918, to Apr. 1, 1919..
Fall, Oct. 1, 1918, to May 1, 1919..
United States.
Orcat Britain.
Dun's
Reduced
London
Reduced
index
to 1913
Economist
to 1913
figure.
base.
index.
base.
a '>67
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.<i0
.-50
3.iX»
2.60
39; 1.5
Total.
1,002.52
347.92
'298.24
181.43
32.37
47. 52
1,961.47
o From Forest Service. I'. S. I)epartment of Agriculture.
The stand of timber by s]>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 a<lvanced
and by May was several dollars per thousand feet liiglier tlian the
Government price. On June 14, 1918, after studying carefully infor-
mation regarding lumber costs, the price-fixhig committee estab-
lished a maximum price of approximately $4.80 per thousand feet
over the former fixed price. This amounted to about $29.65, or
about 90 per cent higher than the prewar l)ase price.
This price continued in force on Southern pine until December 30,
1918. After that time the fluctuations were scarcely appreciable.
Some of the heavier timbers declined slightly, whereas buiidiug
lumber ads'anced in many locahties so that the average remained
practically the same for the first quarter of 1919 as for the last quarter
of 1918.
Increases in production costs, 1913-1919.
In the paragraph on prewar operating conditions, above, it was
shown that a numbei of factors combined to cut the profits on lumber
to a fairly small margin on the average, even before war conditions
brought increases in production costs.
A chart ^ prepared by accountants of the Soutiiern Pine Association,
covering a number of years up to and including the first part of 1919,
presents a curve showing the fluctuations of the average realization
per thousand feet of lumber in comparison with a curve showing the
fluctuations of the average cost of production. The divergence
between the two curves varies considerabh', but on the average it
indicates a margin of 6 to 8 per cent of realization over cost.
Mr. John H. Kirby, president of the National Lum])er ]\[anufa<'-
turei"s' Association, in his statement to the Industrial T^oard of the
Department of Commerce on March 22, 1919, said —
(1) That, if the prices of himber had been so lix^d as to set ure maxiuiuni productioa
and not to secure the continued production by only that relatively small proportion oi
the more efficient mills whose product was necessary to the ^var program, the base price
on ordinaiy lumber of iir or pine would have been fixed at more than $4() per thousand
feet instead of $2G and $28. respectively.
' Exhibit No. 5. Aonuul Report of SouUiero riueCoHvontion. vy.).
ec'0^o:mic.s of the coxstructiox industky.
99
(2) Thai the net increase of I'lmber prices a!t^?r the beginning of the war, but prior
to the entrance of the United States into it. had been but little more than the increase
in production costs.
(3; That in the South the average prire received at the beginning of 1919 for lumbei'
by more thUuU 100 mills was $28.60, only 60 cents more than the J>ase 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 •<!
1913
1914
1915
1916
1917
1918
1917, by quarters
First
Second
I .Jot)
5402
S122
7243
9756
9548
30.3353
33.7329
Third i 34.4009
6158
Fourth
1918, bv cinaiters:
First
Second
Third
Fourth
1919, by quarters: First.
0719
6829
6536
6536
3181
I^r-la-
tive
prices.
.V vorapc
realiza-
tion.
!tM> $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 <tf
, distrihation .
[Carload lots per 100 pounds.]
Bogalusa, I a., to Chicago
Portland, Greg., to Chicago
Coeur d'Alene, Idaho, to Chicago.
V\'ausau, Wis., to Chicago. .......
• Average increase
Bogalusa, T,a., to Kansas City, Mo
Portland, ' >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.<S \
i
1 i
• i
1 }
2 1
-:! 1
^ 1
< 1
ll..„.-:
60
340
320
300
230
2S0
COMPARISON OF PRICE
FLUCTUATIONS
WHEAT- STEEL- LUMBER
1913-1919
U.S. DEPARTMENT OF LABOR
INFORMATION AND EDUCATION SERViCE
OIVI5I0N OF PUSLiC WORKS AND CON5Tr?UCTI0'"^J OEvElOPMEMT
CHART XI
108 ECONOMICS OF THE CONSTRU(^TION INDUSTRY.
SECTION VIII. IRON AND STEEL PRODUCTS USED IN CONSTRUCTION.
General iiiforniatioii on the steel industry.
The various conditions afTecting war-time prices and production in
the steel industry in general are set forth in Section If of this chapter.
Explanation of price table.
Price Table 20 gives quoted and relative prices on structural
steel, steel bars, wire nails, rivets, and 6-inch cast-iron pipe. In
the absence of price data on concrete reinforcing bars, the price
series on mei'chant's bars is included as being typical of this general
class of steel products. The composite index figures given are
averages made by a somewhat arbitrai-y weighting system, structuial
steel indices having been counted twice to once for each of the others,
as indicating in a rough way, its relative importance in construction.
Fluctuations of structural steel prices in comparison with those of
lumber and of vdieat are shown on Chart XL Chart XII shows
fluctuations of prices of steel bars.
It is interesting to compare the increase in prices on 6-inch cast-iron
pipe mth the prices of gray-forge pig iron, the raw material from
which most cast-iron pipe is made. Comparative figures are given
in the table below:
Gray forge
pig iron
(per gross
lea).
6-mch pipe
(per net
ton).
July 1, 1913, to June 30, 1914: |
Qnoied price : I .?14. 33")
Relative price '■ 100
December, 1918:
Quoted price : 1 S36. 900
Relative price ! 2."8
April 8 1919 S29. a50
Rclat ive price 20"
$22. 22,iS
100
?67. 7000
304
557.7000
259
The funires for frray-forgc pi^ iron are for tlv,- I'liil.^delphia market, the source of infoiTnation Iwing tlie
Iron Age.
In the year 1914 a net ton of pipe cost 55 per cent more than a
gi'oss ton of pig iron; in December, 1918, a net ton of pipe cost 84
per cent more than a gi'oss ton of pig iron; and in April, 1919, a net
ton of cast-iron pipe cost 94 per cent more than a gi'oss ton of pig
iron. The increase in the differential of pipe prices over pig h'on
prices is probably due, in considerable measure, to the greatly
increased labor cost of the manufacture of pipe.
Early in the year 1019 there seemed to be a verv large potential
demand for cast-iron pipe for various public works projects. Buyers,
however, were not willing to make contracts at the prices prevailing
and not much activity was displayed in the market. In view of the
needs for this product it is possible that the reduced price may be
followed by considerable purchases of pipe for these pwjjects that
have been delaved.
ECONOMICS OF THE CONSTRUCTION INDUSTRY.
109
Freight rates on iron and steel products.
Tables 27 and 28 give freight rates on pig iron and on finished
iron and steel materials. These rates are more or less repre-
sentative. Although the average of the increase in rates is given, it
can not necessarily be taken as indicating the average increase in
rates the country over, but it may stand as an indication, with a
considerable margin of error. It is beyond the scope of this investi-
gation to make any complete sm*vey of freight rates.
Table 20. — Prices of iron and steel products used in construction.
1. Structural.
steel.
2. Steel bars.
3. Wire nail.>^.
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<l lots, per lOOpoumt^.]
From I'
iltsbiugh, Pa., li<—
1914
1919
Incroa-w.
80.16
.IS
.30
SO. 27
.27
. 33.-.
1.25
Pfr cent.
6^
M
f^l . JylUlls, \i(l
13
2<l
54
r><)
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 C<JNSTRUCTION INDUSTRY.
case of brick. As a whole, the figmcs. icprcsciit as i'<<irl\- as ftossihln,
the situation in general.
The fact llinl vitrified brick showb less iiu;i(';i,sc than common
brick is probal)ly due to that fact that the greater part of this product
is manufactured in the Middle West, where conditions were less drastic
than in the East. The same explanation probably holds good for
hollow tile.
Cost of production.
There is but little information available on production costs in
these industries. Such information of a comprehensive nature would
be extremely difficult to get.
The secretary of the War Service Committee on Brick, Mr. R. D,
T. HoUowell, attributed increased prices during the war on the
product he represented to increased ANages, increased cc^ts of raw
material and fuel, mcreased taxes, increased sales expense, and the
greatly reduced production in 1917 and 1918. He stated that the
increase in transportation costs alone would amount, on the average,
to about $1 per thousand. In the same statement Mr. Hollo well said :
''Prices on brick have for the last generation been notoriously low.
The industry as a whole is said to have made little or no money."
A producer of brick in Minnesota has stated that his 1918 produc-
tion costs were 83 per cent over the costs in 1913. According to liis
statement, the labor cost increased 75 per cent; raw materials, 143
per cent; fuel, 123 per cent; transportation, 24 per cent; other ele-
ments. 32 per cent. Another producer, in Michigan, reported some-
what sjualler increases; 35 i>er cent in labor cost ; S3 per cent in traris-
portation; 24 per cent in other elements. As a whole his production
costs in 1918 were 57 per cent above the 1913 figure.
Some producei's of sand-lime brick have furnished their figures on
increases of production costs. Averages made from these figures are
as follows:
Item.
1918 over
191$.
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 mfi<t iTgid
examinations as to the cost of manufacture of the product. The Ijrick manufacturers
furnished the committee with all data, books, accounts, reports, and calculations
asked for. In addition they furnished, upon request, manufacturers' cost sheets and
audits of cei-tified accountants for the years 1912, 1913, 1916, 1917, and 1918 for the
information of the comnussion and for comparative purposes. Estimates of the cost
of manufacture for the year 1919 were also submitted. These documents have been
carefully studied by the commission. Being one of the industries whose production
was repressed liy the Government during the war for the purpose of conserving fuel
the brick industry suffered exceedingly great losses for the years 1917 and 1918. An
examination of the audits of the company made l)y reputable certified accountants in
the usual course of business for these years show, l>eyond 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' th<? Federal Trade CouuuLs.sion al $12 per
thousand. The Price Fixing Committee of the War Industries Board, at a meetin»
held on February 27, 1919, fixed the f<>llo\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
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ECONOMKJS OF THE CONSTRUCTION INDUSTIIY.
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a* rv
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ECOXOMICS OF THE COXSTRUCTIOlSr INDUSTRY.
121
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c: • c: -c r
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5-c ^.a
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122
ECONOMICS OF THK CONSTRUCTIOX INDUSTBY.
K~i3
P.5
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>- 2
P-.S
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c. r. I -
>:tooc^ (n + c. —
M- -5 '3 -^S o c-i CI c5 ''^ 3" ^
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• = 53 c -r r;
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p-^ o
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t-^ t~ t-^ 00 00 c-i => — ■
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cic" S
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ao ao
a, 4>
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EC0>70MICs OF THE CO^^STKU< TIOX IXX»USTR¥.
123
— — — . -.-CJ
o o oo o o c:
c: -c -- ( ^ 00 3: ct
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124
ECONOMICS OF THE COXttTRUCTlOX IXDUSTLY.
O S
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tZ
ssgssg?^
c< o O cr o '>■ «■>
C-. 1 - i-: o O o -T"
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cco'-O o
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„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 -- <M •* S5
S O O CI "O X
8 c o c o t>- 1^
— c: r-H ec ^ '-0
T- — . C) CJ
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rt
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C O Q C CiC CO
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to c-ir- oc
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r-H r-. 1-. 1-. 1-1 CS Cl
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126 KCOXO.MIC.S OF THE CO N'STU LECTION INDUSTUZ.
Table 40. — Jielative jmce.^oft^iiious clai/ proo'vci;.
.Tulv 1, 1913, to June 30, 1914
1913
1911
191."i
1916
1917 .•
1918
1917:
P'irsl quarlor
Second quarter
Thiid quarter
Fourth quarter
1918:
First quarter
Second quarter
Third quarter
Fourth quarter
1919:
First quarter
April
Coramodily.
C;om-
nion
brick.
100
100
98
96
111
137
172
12S
13f.
141
146
154
lol
ISO
192
199
194
\"itri-
fiod
l)rick.
103
98
100
116
l.-l
10.5
113
117
129
140
144
L56
164
166
161
Front
In'iclc.
100
101
102
105
106
133 J
1
119
138
138
13S
i:>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
1<I3
1:^3
Sewer
1)11)0.
100
99
98
98
116
139
172
131
i:$6
146
in
170
17^
175
175
170
Ce-
ramic
tile.
100
100
100
101
122
1.56
189
137
14.5
170
170
1^.7
ls9
200
2>M)
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 <iu(irnj products.
[F. o. b. quarry prices. Quotations from price section, ^Va^ Industries Board.]
Commoditv
Granite
l)uilding,
red, white,
and blue.
Granite
liiiilding,
light bkie.
Granite,
dark
monumental.
Granite,
monumental,
red and gray.
M:irli:et
United
States.
Middle
West.
United States
and Canada.
United
States.
I'eriod.
Price
per
cul>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<M)0
. 4000
.401)0
.5000
. 55(X)
. 6500
. (i500
111
111
111
111
139
1.53
181
181
2.40
2.50
2.50
2.50
2.50
2.70
2.80
2.80
2. SO
\ iiril !
1
1
] :i()
K(X)NOMICS f)F THE CONSTRUCTION INDUSTRY.
'Patu.!': '19. — Prices on qiinrnj proihirls.
[Quotations from price section, War Industries Board.]
CdinitKxlily .
Market.
Tcriod.
A vorage July 1, 191.3, to Jimc 30,
1914
iyi:j
1911 :
191.")
1916
1917
1918
191T:
First quarter
Seeoiui quarter
Third quarter
P'oujth quarter
191S:
First quarter. . .
Second quarter.
Thii-d quarter..
Fourth quaiter.
Indiana
building
limestone,
buff.
United
States.
Price
per
cubic
foot.
SO. 2500
. 2o00
. 2.500
. 2.J00
. 2625
.3.383
.4208
. 3500
.3.")00
.3500
.3.S33
.4000
.4000
.4000
.4S33
Rela-
tive
price.
100
100
100
100
105
143
168
140
140
140
153
160
160
160
197
nin'ldinK
stone, griiy
bluck^toue.
Cleveland,
Ohio.
T'ricc
per
cubic
foot.
$0. 34.50
.34.50
.3200
.3200
. 3275
.37.50
. 4250
.3.500
. 3.500
.4000
.4000
.4000
. 4000
.4.500
.4500
Rela-
tive
price.
100
100
92
92
95
109
123
101
101
lit)
lit;
iiii
116
130
130
Slate, green
roofing, No. 1
grades 20 by 10
inches.
United
States.
Price
per
100
square
feet.
$4.7708
4.6250
4.89.58
5. 00(K)
5. 2083
6. 5000
7. .3833
6.0000
6. ■.USi
6. 6667
7. 0000
7.0000
7. :i3:i3
8. 0000
8.0000
Rela-
tive
price.
100
97
103
105
109
159
126
133
110
147
147
151
168
108
Plate, ril),
structural,
1 inch Itiick.
T'nited
States.
Price
per
square
foot.
. 1369
. 126)9
.1310
.1112
. 1396
.1741
. 2399
.1700
, 16;)4
.1730
. 1.S42
.19.53
.2100
. 29.55
. 2.589
Rela-
tive
price,
100
93
96
81
101
127
173
124
124
123
1.35
i;3
1.51
21)
ISJ
."^late. blue
blackboard,
§ iuch thick.
United
States.
Price
per
square
foot.
$0. 1384
.1290
.1415
.U4.S
.1306
. 1.543
.1605
.1.530
.1488
.1.597
.1555
.li;41
. 15S3
. 1.597
.1597
Table 50. — M^holesale prices on buildin^j liinc.
[Quotations from price section. War Industries Board.]
Commodity.
Adam.s lime, com-
mon or masonry.
Lime in bulk.
Lime, eastern
common, standard
BuiMing
lime.
Market .
Xew England,
New York, and
New Jersey.
Chicago.
New York.
L^nited
States.
Period.
Price
ixjr barrel
280
pound
ner.
Avora-e, July 1, 1913, to June 30,
1914
1913
1914
1915
191fi
1917
1918
1917
First quarter . . .
Pi'Cund qiiiirter.
Tliird quarter...
Fourth quarter .
1918:
First quarfer...
Second quarter .
Third quarter . .
Fourth quarter .
SO. 9658
. 950O
1. 0133
1.01,50
1. 1083
1. 4290
1.9258
1.3.300
1. 3300
1. 4883
1. 5675
1. 6467
1.8.842
2.0425
2.1300
1919:
First quarter .
Apiil
Rela-
tive
price.
Price
per short
ton.
100
98
105
108
115
M8
199
1.38
138
154
162
171
195
211
221
$4. 3750
4.38:33
4.0000
3. 5(XX)
4. 608:5
6. 1667
7.2500
5.7000
5.9667
6.5000
6.5000
6.5000
7.5000
7. 50i)0
7.5000
6 9.0000
6 9.0000
Rela-
tive
price.
Price
per barrel
300
pounds
net.
100
100
91
80
105
111
166
130
136
149
149
149
171
171
171
206
206
$1.2500
1.2500
1.2396
1. 4050
1.7604
2.2948
1.5917
1. 6.500
1.9000
1.9000
L9625
2.1500
2.5000
2.5667
2.7000
2.7000
Rela-
tive
price.
Com-
posite
index, a
100
99
112
141
184
127
132
152
152
157
172
200
205
216
216
100
101
99
97
108
151
181
139
142
160
163
157
177
192
197
6 211
6 211
o Figures computed from all figures available.
6 Estimated.
ECONOMICS OF THE CONSTRUCTION INDUSTRY.
137
Table 51.^ — Composite index /inures.
[Base: Average for year July 1, 1913, to June 30, 19M.]
Period .
BuiHing
lini'>
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
. <iH'M
.9.545
1. 122')
1.4472
1.0374
1.2947
1. 44.53
1. 4.5.30
1. 5957
1.5150
1. 6837
1.6S;?7
1.6673
100
102
%
93
109
141
159
126
141
142
156
148
164
164
162
5. Dlinois.
6. Upper
New York
State.
7. Average for
Eastern and
Middle Western
States.
8. Natural cement.
Kansas,
Missouri, Oklahoma,
Nebraska.
$0. 9.595
.9906
.9052
.8821
1.1144
1.3975
1.5500
1.2930
1.41(30
1.4.5.57
1. 4313
1. 4953
1. 5787
1.5610
1.5650
100
103
94
92
119
146
162
1.35
147
152
149
156
■164
163
163
$0. 9658
.9833
.9240
.9191
1.0929
1.4199
1.5453
1.2873
1.4163
1.5020
1.4740
1.4467
1.5740
1.5973
1.5630
100
102
96
95
113
147
160
133
146
155
152
150
163
165
162
SO. 9895
100
.9999
101
.9.5.37
96
.8934
90
1.1092
113
1.4413
146
1.6671
168
1. .3081
132
1. 4030
148
1.4962
151
1.4979
151
1.5533
157
1.6877
170
1.7064
172
1.7209
174
$0.5000
.5000
.5000
.5000
.6000
.6500
.8500
.6.500
.6500
.6.500
.6500
.8500
.8500
.8.500
.8500
100
100
100
100
120
130
170
130
130
130
130
170
170
170
170
Table 55. — Wholesale prices on Portland cement.
[Net prices for carload lots.]
Market.
F. o. b. plant
western
Washington.a
New Yorfc.b
Chiea
go.c
Quoted
Rela-
tive
price.
price.
SI. 1.500
100
dl.OoOO
91
1.1,500
100
1.1.500
100
1. 38.50
120
1.7807
1.55
1.9C75
171
1. 5930
139
1.8100
157
1.9100
166
1.8100
157
1.8100
157
1.96C0
170
2.0500
178
2.0500
178
2.05
178
2.00
174
St.
Louis.c
Cin.
cin-
nati.":
Dal-
las.c
San
Fran-
cisoo.e
Period.
Quoted
price.
July 1, 1913, to June 30, 1914 .
1913
1914
1915
1916
1917
1918
1917:
First quarter
Senond q uarter
Third quarter
Fourth quarter
1918:
First quarter
Second quarter
Third quarter
Fourth quarter
1919:
First quarter
April
$1.3842
1. 5218
1.2750
1.5150
1. 5467
1.7158
1. 8742
1.6333
1. 6W)7
1.6533
1.9100
1. 8633
1.9S0O
1.85<i6
1. 7967
Rela-
tive
price.
Quoted
price
100 !$1. ISOO
1. IS(X)
1.1800
1.0300
1. 2950
1. 6740
2.0800
110
92
109
112
124
136
118
120
119
13S
135
143
134
130
1. .5.366
1.7200
1.7200
1.7200
1.7400
2. 1760
2.2000
2.2000
2.2000
2.0500
Rela-
tive
price.
100
100
100
87
109
141
176
130
146
146
146
148
184
186
ISO
186
174
Q"«*^dReT
P"^- price
Quoted Quoted
price. I price.
$1.45
1.85
2. 26 $2. 40
$2.29
1.75
2.05
2.05
2.05
2.15
2.29
2.30
2.30
2.30
1.93
2.30
2.47
2.47
2.27
2.40
2.44
1.75
2.07
2. 27
2.20
2.20
2.48
2. .53
2.03
$1.89
1.97
2.37
1.90
2.20
L90
1.90
2.10
2.43
2.45
2.48
2.77
3.00
a From price section. War Industries Board.
6 From private somces.
c From the Engineering News-Record,
d Figure for Jime, 1913.
ECONOMICS OF THE CONSTRUCTION INDUSTRY.
145
Table 56. — Freight rates on Portland cement.
[Per 100 pounds.]
To—
1914
1919
Buffington. Ind.
La Salle, 111....
Bufflngton, Ind . . .
La Salle, lU
Hannibal, Mo
Mason City, Iowa .
Mason City, Iowa .
Hannibal, Mo
La Salle, lU ,
Tola, Kans ,
Buffington, Ind...
Mason City, Iowa .
Haiinihal, Mo
La Salle, 111
Ida, Kans
Buffington, Ind. . ,
Mitchell, Ind...
Bellevue, Mich .
Stroh, Ind
Buffington, Ind.
Mitchell, Ind...
Stroh, Ind
Bellevue, Mich.
Buffington, Ind.
Alpena, Mich. . .
Mitchell, Ind.
Mitchell, Ind.
Cementon, N. Y. . .
Howes Cave, N. Y.
Glenn Falls, N.Y.
AUentown, Pa
Coplay, Pa
Mitchell, Ind...
Buffington, Ind.
Oglesbv, 111
La Salle, 111
Dixon, III
Hannibal, Mo..
Slilwaukee, Wis
....do
Average increase, 05 per cent.
La Crosse, Wis
....do
....do
....do
Average increase, 57 per cent.
Des Moines, Iowa
....do
....do
....do
....do
Average increase, 13 per cent.
Sioux City, Iowa
....do......
....do
do
....do
Average increase, 13 per cent.
Detroit, Mich
do
....do
do
Average increase, 49 per cent.
Battle Creek, Mich
do
....do
do
do
Average increase, 56 per cent.
Louisville, Ky
Increase, 70 per cent.
Indianapolis, Ind
Increase, 41 per cent.
New York ,
do
do
do
do
Average increase, 23 per cent.
Chicago, HI
do
do
do
do
do
Average increase, 40.7 i)er cent.
$0.
05
$0.08
05
.085
08
.115
08
.11
08
.13
05
.10
063
.085
10
.115
10
.115
125
.135
12
.125
084
.105
13
.145
13
.14
13
.14
13
.15
095
.13
05
.085
05
.085
08
.U
09
.125
05
.085
025
.055
(K)
.095
08
.115
.06
.085
.085
09
.11
10
.12
10
.12
095
.115
095
.115
065
.085
03
.05
(V45
.005
045
.005
045
.065
005
.085
Source: Interstate Commerce Commission; Portland Cement Association.
SECTION Xn. MINER.\L AGGREGATE.
Introduction.
If the classification followed in writing this chapter were based
solely on the origin of the various products, crushed stone should
be more properly treated under the heading of "Quarry Products."
However, in this case, it seems more logical, from the point of view
of use of the material, to include crushed stone in the same category
with sand and gravel.
Relative importance of sand, gravel, and crushed stone.
It has been stated by the United States Geological Survey that only
foui* natural nonmetallic minerals produced in the United States —
not including clay products and cement (manufactured products) —
show a greater value than sand and gravel; these are petroleum,
121297°— 19 10.
14G ECONOMICS OF THE CONSTRUCTION INUUSTKY.
nalural gas, coal, and stone, llie production of sand and gravel
in 1917 was valued at more than $35,000,000, which is probably an
iHidorvalyation, l)ocauso it is impossible to get complete returns.
The Geological Survey reports on various kinds of sands and
gravels, according to uses, including glass sand, l)uilding sand,
grinding and polishing sand, fire or furnace sand, engine sand,
paving sand, filter sand, other sands, railroatl-ballast sand and gi'avel,
and gravel.
In the year 1916, of the total ciuantity of sand and gravel produced,
47 per cent was building sand, 7 per cent paving sand, and 24 per cent
sand and gravel for railroad ballast. In the same year the average
price per short ton of all sand and gravel was 33.4 cents; of building
sand, 31.5 cents; of paving sand, 35.7 cents; and of railroad ballast
sand and gravel, 13.1 cents.
In 1916 crushed stone represented in value 37 per cent of the total
output of stone in the country. Of the total quantity of crushed
stone produced in that year 10 per cent was granite, 19 per cent
basalt and related rocks (trap rock), 67 per cent limestone, and
4 per cent sandstone. In that year the average price per short ton,
f. o. b. plant, of crushed stone of all kinds was 61 cents; of crushed
granite, 75 cents; of basalt and related rocks (trap rock), 73 cents;
of crushed limestone, 55 cents; of crushed sandstone, 77 cents.
Imports and exports of these materials are insignificant. Small
amounts are exported to Canada each year, and small amounts
are brought into the United States from Canada and from other
countries as ballast.
No figures are at hand on chats, chert, or slag, which are used
fairly extensively in some localities, but which are considerably less
important than sand, giravel, and crushed stone.
Production figures.
Production figures on building sand, graAel, and crushed stone for
the years 1913-1918 are given in Table 57. The figures show that
production of building sand in 1918 was 2 per cent above the average
for the preceding five years. Gravel in 1918 was 34 per cent under
the average for the preceding five years. Crushed stone in 1918
was 30 per cent mider the average for 1913-1917.
Regional production.
Regional })roduction of crushed stone, as affected hj war conditions
and as affecting war-time prices, has been considered in Section X
of this chapter.
Sand and gravel are so widely distributed and so abundant that
any consideration of then" regional distriimtion seems scarcely
necessary. The markets are strictly local, and are largely deter-
mined by existing schedules of freight rates. The supplies being
ECONOMICS OF THE CONSTRUCTION INDUSTRY. 147
plentiful, the quantity produced is usually measured h}'^ the effective
demand.
During the war the demand for sand and gravel was greatly
accentuated in certain localities on and near the Atlantic coast,
on account of increased requirements for the construction of can-
tonments, shipyards, and factories engaged in the manufactui^e of
munitions and other war necessities. In some cases, on account of
unprecedented needs, sand and gravel were shipped as far as 300
miles by sea in coal barges. This accounts for the fact that these
products, along with certain other basic materials, rose rather more
in the eastern part of the United States than elsewhere.
The price record.
Since the prices on the products treated in this section are so largely
determined by local conditions, it has been considered advisable to
present a considerable number of representative figures.
The first three tables (Tables 58 to 60) give f. o. b. plant prices
from various sources. Table 61 gives prices in the following
representative markets: New York, Chicago, St. Louis, Cincinnati,
Dallas, and San Francisco. These figures are taken from files of the
Engineering News-Record.
The figures of the first series of Table 59 indicate that the
rise in the eastern part of the country was considerably higher than
in other sections.
Some additional figures on prices of crushed stone have been
furnished by plants in Kansas and Oklahoma. These prices are
f . o. b. plants. The average for 1916 was 85 cents per ton ; for 1918,
$1.22 per ton ; and for the first quarter of 1919, $1.25 per ton. Tlie
increase shown by these figures is 47 per cent.
The most representative price figures for the whole country are
yearly averages given in Table 57. It is largely from these figm'es
that the composite index for the mineral aggregate group has been
computed.
In computing this index, given in the last column of Table 60, the
index figures for building sand, gravel, and crushed stone were first
computed, the average price for the years 1913-14 being taken as a
base, so that the figures would correspond as neai>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('<prson, Md..
Mill l-ane, Pa...
Norristown, Pa.
C.len Wills, Pa.
Birdsboro, Pa..
Clin''au,Pa
Riislilaud, Pa.
S;i,n California, Calif
do
Avei'age increase, 8 per cent .
Philadelphia, Pa
do
do
do
do
do
do
Pottstowii, Pa I do.
-V verage increase, 76 per cent .
1919
SI. 70
S2. .V)
1.10
l.6<)
1.00
i.V>
1.30
2. <W
2.40
l.fiO
2.40
I.M
2.20
1.50
2.20
1.70
.78
1.00
.40
.62
1.90
2. la
,70
.70
1.00
1.50
.60
.90
.00
.90
.50
.90
.65
l.OiJ
.65
I.IJI)
.60
."W
.65
2. (ir,
Source: Interstate Commerce Commission.
SECTION XIII. GLASS.
Introduction.
A very \'aluable source of inforiuiition on the subject of glass is
the pamplilet pubhshed by the United States Tariff Commission iii
1918 \\dth the title, "The Glass Industiy as Affected by the War."
This pamplilet has been used extensiveh' iii the preparation of
this brief resume of the subject.
Production of glass sand and glass.
It has been considered advisable to present some figures on glass
sand as well as on glass, especially as tliere are no complete tables of
figiu'es on glass production at hand.
The figures in Table 64 on production of glass sand indicate a con-
tinued increase in production, even tiirough the year 1918, which is
exceptional among the production figures of the building materials
group. The reason for this will be shown later to lie in the growth
of tlie export demand during the war, and the development of vaiious
kinds of glass which were essential for M'ar piu'poses. The production
figures on glass sand are probably fairly indicative of the growth of the
glass industry in the United States during the period covered in the table.
The total production of glass in this country in 1914 was valued at
$123,085,019. Taking into accoimt the increase in production of
glass sand and the relative increases in prices of both sand and glass
during the period 1914-1918, the 191S production may be veiy
roughly estimated at somewhere in the neighborliood of $350,000,000.
The 1914 product iDii was (iividcl as shown on following page.
E(!ONOMICS OF THE CONSTEUCJTIOls INDUHTllY.
Glass /jroduction in 191 i.
155
Product.
Square feet.
Value.
.\ vera^e
pnep per
square
foot.
Percent-
age of
total
value.
A\'!iiflow glass
Plate glass, polished
Plate glass, rough
Obscured glass
Wire glass, polished
Wire glass, rough
^Vllo/lier buildmg glass.
Total building glass .
\ 1 1 other glass
400, 998, 893
60,383,516
131, 492
43,040,079
1,707,S18
13,980,906
.$17,495,956
14, 773, 787
25,859
2,417,253
534, 322
1,056,612
620, 280
" S2. 18
.24
.20
.056
.31
.076
14.22
12. 02
.02
1.9S
.44
.86
.42
36,824,069
86, 260, 950
29.94
70.0ft
Total glass .
123,085,019
100.00
1 This price only is figured for 50 square feet: all the others, per square fool .
Further figures have lieen given on production of plate glass,
being estimates made by the Pittsburgh Plate Glass Co., one of the
leading producers. These figiu'es are as follows:
Production of plate glass in the United States.
Year.
Square feel .
Year.
Sfiuarefeet.
]!M4 .. ..
60, 383, 516
66, 600, 000
19)7
75, 000, OOO
19tli
1918
49.000.000
The decrease in production in 1918 would be accounted for by the
decreased demand occasioned by inactivity in building. The 1918
figure is 19 per cent imder the 1914 figure. Early in 1919 it was
stated that the plate-glass industry was operating at about 50 per
cent of normal capacity.
Early in 1919 it was stated by a prominent glass firm that during
the blast of 1917-18 the season's total output of window glass was
about 6,300,000 50-foot boxes. This would be a total of 815,000,000
feet, as against 400,998,893 feet for the year 1914, a decrease of 21-i
per cent. This firm anticipated that the 1919 production of window
glass would be about the same as that of 1918.
It was stated, earlv in 1919, that the manufacture of iihim mating
glassw^are was proceeding at about 60 per cent of capacity.
These figures all show a decrease in production of building glass,
although there was an increase in production of glass sand.
The destructive effect of the war on tlie glass industry of Belgium
and France and the shutting off of imports from Germany and
Austria made it necessary for the progressive glass manufacturers of
America to develop processes fo!r the manufacture of various kinds
of glass not produced commercially in this coimtry before the war.
During the war absolutely new branches of the glass industry were
developed in the United States for the production of the following
156
KCONOMICS OF rilK < O.XSTi; Tf TION IXDl'STHY.
articles: Optical goods, lahoratoiy or cliomical Avare, glass gauge
tubing, watch crystals, glazing glass, oven glass, glass brick, siphon
l)ottles, photographic glass, and high-gnulc picture glass.
Imports and exports of glass.
Tn addition to the development of the new branches of the glass
in(histry, as referred to in the preceding paragi-aph, the other out-
standing fact in the industry has been the growth of the export
business.
Raw materials used in the domestic production of glass are all
produced in this country, and consequently do not figure in any
consideration of exports and imports.
In 1889 imports of glass of all kinds amounted in value to about
19 per cent, and exports to a little more than 2 per cent of the total
domestic production. In 1914 imports for consumption amounted
to .18,219,112, or 6.7 per cent of the total domestic production
(S123,085,019); and exports amounted to S3, 729, 623, which was 3
per cent of the total domestic production.
Imports and exports for the years 1914 to 1917 are shown in the
following tables:
Glass imporla of the Un! led Slates, 1914 lo 1917 fl
Year.
Window
glas.s.
Plato gla.ss.
Total
Iniilding
glass.
Porcentaco
total.
Total.
1914
$1,356,218
722, 483
197,549
328, 100
?727, 889
98, 171
3,.V,3
13, 406
$2, 084, 107
820, 6M
201, 102
341,596
Per cent.
25.4
17.9
8.9
86, 120, 6%
3,771,705
2. 047. 8a9
$8,204,803
4, 592, 359
1915
1916
2, 249, 001
1917
15.4 1 1.883.582
2,225,178
'
n From " The Gla.ss Industry as Affected by the War," U. S. Tariff Commission, 1918.
Glass er ports of the United States, 1914 to 1917 fl
Year.
Window
glass.
Plate glass.
Total
building
glass.
Percentage
of building
glass to
total.
All other
glass.
Total.
1914
$311,339
1,443,113
3, 123; 911
3, 483, 5%
$35,767
831,727
1,568,181
2,223,329
S347, 106
2, 274, 840
4,692,092
5, 706, 925
Percent.
9.3
40.8
38.0
42.1
S3, 382, .517
3; 283, 877
7, 629, 241
7,847,605
S.3.729,623
5,558,717
1915
1916
12,321,333
1917
13,5^,530
1 1'^'roin " The 01a.ss Industry as Affected by the War," I'. S. Tariff Commission, 1918.
From these tables it is seen that the 1917 imports had decreased
73 per cent from 1914, while exports increased 263 per cent during
the same period. Imports of building glass dui'ing this period
decreased 83 per cent, while exports in 1917 were 16 J times the 1914
figure.
ECOXOAIICS OF THE COXSTRUCTIOX INDUSTRY. 157
The prexvjir glass trade was mainly domestic, and it is only sinc«
the war began that the export trade developed into a factor of con-
siderable importance. Belgium was, before the war, the greatest
exporter of window and plate glass to this country. France, Ger-
many, and Austria-Hungary were also, in the past, large exporters
of glass products. The development of our trade has been largely
the result of the cutting off of supplies of glass from these countries.
In a commercial report from Consul General Robert B. Skinner,
of London, dated November 25, 1918, it was stated that the supply
of glass in England was very low, and that it would be a considerable
time before production could return to normal. American glass
producers have expected to find extensive markets for their products
in the European countries as soon as normal trade and building
activities are reestablished in those countries. They have antici-
pated further development of export business and a maintenance
of comparatively high prices on glass as a consequence of the world
shortage of this material.
The price record.
Records of prices on glass sand, window glass, and plate glass are
given in Tables 65 and 66. The figures on sand are given as
representing the principal raw material from which glass is made.
The composite indices on window glass are simple averages of the
indices of the four price series, and those on plate glass are simple
averages of the indices of the two series on that product.
The final indices for the last quarter of 1918 are 272 for glass sand,
169 for plate glass, and 307 for window glass. If the figures for
plate glass and window glass be combined, according to their rela-
tive importance, a composite index of 244 is obtained, which might
be said to indicate the price level of building glass for the last quarter
of 1918.
The April figures show a iise of 9^ per cent on plate glass over the
last quarter of 1918 and a decline of 13.3 per cent on window glass
prices; the April indices being 185 and 266, respectively.
A composite building-glass index for April would be 229, which is
6 per cent less than the figure for the last quarter of 1918.
Cost of production.
In addition to the two factors described above which have made
for rises in prices of building glass, there was a third, of equal if not
gi'eater importance, the increase in cost of production.
The price figm'es on glass sand give an indication of the rise in
costs of raw materials. This material constitutes about 52 per cent
of the total raw materials used.
One item. of increased expense was that ol the fire clay used in
making tank furnace blocks or pots in which the glass is melted.
158
ECONOMICS OF THE CONSTRUCTION INDUSTRY.
Formerly a very lii<:;b {^radr of clay was inijiorli'd from Clermaiiy
for this purpose. Aft(M- this supply was cut (»(T domestic clay had
to he substituted. An important manufacturer stated that the pots
and blocks made from tlie domestic fire clay do not hist so long as
those made from the imported (;lay, which results in a fpeat increase
in the cost of replacement and also in the cost of production.
Comparative figures on wages in three branches of building-glass
pioduction aie shown in the following tables, taken from the Tariff
Commission's pamphlet:
Conparaliie figures on vages in three branches of bmlding^glass pro/hirtiov..
WINDOW OT,ASS, HAND AND MACHINE.
Oocupalion.
Ave r:\Kp earnings
jx'r week.
Per c«int
of
1011
1917
1914-1917.
$25. 00
34.74
27.83
42. 17
13. .50
15. M
13.30
13.03
10.23
11.11
^n.no
50.13
39.fi5
ss.n
20.00
21.10
2i.ri0
17. 95
19.80
15. 75
60.0
44.3
C.ntherer'
42.4
27. 'i
4S.2
34.9
62.4
37.7
Couunon laboreis, machme
U3.5
41.7
1
49.3
PLATE GLASS— AVERAGE EARNINGS PER HOUR, 1914-1917
Occupation.
Average earnings
per hour (cents).
Per cent
of
Increase,
1914-1917.
Casting depart raent
Grinding doparl uient
Polisliing dt'V>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
1S<J
1919:
Fir.-;t quarter
125
April
,
lOti
. . . .j.. .
1
176
ECONOMICS OF THE CONSTRUCTION INDUSTRY.
Tabi.k 79.— Wholesale viarkct prices on nnvnl stores and asphalt.
ISeries 1 and 2from price section. War Industries Board. Series 3 to 7 from the Engineering News- Record.)
ronimodil V
Miirkel
Julv 1, 1913, to June
30, 1914
1913
1914
1915
1910
1917
1918
1917:
First quarter . . .
Second ([uarter .
Third quarter. .
Fourth (juarter .
191S:
First quarter . . .
Second quarter.
Third quarter...
Foui'tli quarter .
1919:
First quarter . . .
April
Naval stores.
1. Rosin,
grade F.
Savannah.
Price per
barrel.!
$3. 9150
4. 6500
3. 8063
3. 5621
5. 50S3
5. 795S
9. 2917
6.1167
5. 7000
5.2333
6.1333
6. 0167
6.2500
10. 9333
13. 9667
5 12. 7667
5 10. 9500
■Rela-
tive
price.
100
119
97
91
141
148
237
156
146
1.34
157
154
160
280
357
324
280
2. Tar, pine.
3. Texaco
brand in
packages.
Wilmington,
N. C.
Price Rela-
perl)ar- tivc
rcl.2 price.
Asphalt.
4. Texaco
brand in
New
York.
5. Mexi-
can
packages, packages.
Chicago.
Price per
ton.
$2. 2292
100
2. 2250
100
2. 1875
98
1. 7.333
78
2. 2542
101
3.1917
143
3. 6730
105
2.7000
121
3. 0667
1.38
3. rmo
157
3.5000
157.
3. 2364
145
3. 2773
147
3. 9909
179
4. 1875
188
4. 2708
190
4.2500
189
3S14. 7.500
18. 0909
< 21. 2917
* 19. 1667
< 19. 0000
* 19. 0000
< 28. 0000
30.0000
30.0000
22. 0000
Price per
ton.
St. Louis,
Price p>er
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. 5<XK)
22.5000
21.0000
24. 0000
22. 50(W
5 25. 4000
5 29. 0667
s 26. 4000
6. Mexi-
can and
Texaco
in pack-
ages.
Pallas.
Price per
ton.
7. Califor-
nia
l>rand 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 <i;iven in the tiil)le helow:
[191;}, 100 per cent.]
Year.
Rates of
vages
per hour.
Full-timp
hoiUM
perwet'k.
Kutea of
per week,
full timo.
191.i. . .
100
102
103
107
114
133
100
99
99
98
97
100
1011
lOJ
1915
102
lOH)
10«i
KU"
112
lOlS
1:50
The following trades are covered by the report of the Bureau of
Labor Statistics on uni(ui wage rates:
1. Buildhig trades.
2. Granite and stone trades.
3. Metal trades.
4. Laundry workers.
5. Theatrical employment.
6. Waiters.
7. Printing and publishing: Book and job.
S. Chauffeurs, teamsters, and drivers.
9. Bakery trades.
10. Mill work.
11. Printhig and publishing: Newspaper.
The metal trades show a rather large increase in the union wage
rate of 1918 over 1914. A comparison of the houi'ly rate of 191S
with that of 1914 for 41 important American cities ^ gives the
following results :
Per cent.
Machinists, railroad and shop 75
Metal i)ulishers and buffers 51
Iron molders 59
Per cent.
Pattern makei"s 69
Blacksmiths, manufacturing shop? . . . 66
Blacksmiths, railroad shops 74
' The cities are:
Athmta, (ia.
Baltimore, Md.
Birmiugham, Ala.
Bo.ston, Mass.
Buflalo, N. Y.
Ciiarleston. S. C.
Chicago, 111.
Cincinnati, Ohio.
Cleveland, Ohio.
I>;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. <S
75.0
62.0
65.0
Per
cent
Trades.
Plasterers
Plumbers and k;i.s fitters...
Sheet metal workers
Steam fitters ,
Steam fitters' helpers
Stonemasons ,
Structural-iron workers
Structural-iron workers (fin
ishers)
Tile hiyers
Tile layers' helpers ,
Hourly rate.
Centi.
62. r,
02. 5
50.0
50.0
30.0
65.
62.5
62.5
62.5
31.3
1918
Cents.
75.
75.
CJ.O
75.0
40.0
75.0
75.0
75.0
fiS.8
37.5
SALT LAKE CITY, UTAH.
[Average increase, 23.2 per cent.]
80.0
62.5
62.5
62.5
."iO.
56,3
87.5
82. 5
75.0
81.3
62.5
75.0
75.0
75.0
68.8
100.0
9
32
20
30
25
33
33
10
33
Plasterers' laborers
56.3
75.0
57. 5
75.0
62.5
62.5
62.5
08.8
87. 5
75.0
87.5
62. 5
81.3
81.3
75.0
40.6
22
Plumbers and gas fitters
Sheet metal workers
Steam fitters
17
Cement workers (linishers). .
Engineers (portable and
30
17
Stonemasons
Hod carriers
Structural-ironworkers
Structural-iron workers (fln-
ishers)
30
30
66.3
62.5
75.0
Tile layers
Tile la vers' helpers
Plasterers
SAN FRANCISCO, CALIF.
[Average increase, 23.2 per cent.]
Bricklayers
Building laborers
Can^cnters
Cement workers (finishers) .
Engineers (portable and
hoisting)
Hod carriers
Inside wiremen
Marble setters
Marble setters' helpers
Painters
Painters (sign)
87.5
100.0
14
31.3
50.0
60
62. 5
87.5
40
75.0
87.5
17
75.0
87.5
17
50.0
62.5
o-,
62.5
75.0
20
62. 5
75.0
20
37.5
50.0
33
59.4
75.
26
6S.8
81.3
IS
Plast erers
Plasterers' laborers
Plumbers and gas fitters
Sheet metalworkers
St cam fitters
Steam fitters' helpers
Structural-iron workers
St ruct ural-iron workers (fin-
ishers)
Tile layers
Tile layers' helpers
87. 5
62.5
75.0
6S.8
75.0
37.5
75.0
62.5
75.0
37.5
100.0
68.8
87.5
82.5
87.5
87.5
87.5
81.3
50.0
SCRANTON, PA.
[Average incraase. 39.0 per cent.)
Bricklayers .
60.0
25.0
47.5
50.0
32.5
46.9
7.5.0
50.0
60.0
62.5
50.0
62.5
68.8
5.5.0
70.0
50.0
2".
100
26
25
54
33
38
27
Plumbers and pas fitters
Sheet metal workers
46.9
46.9
46.9
2.-..
50.0
56.3
62.5
62.5
62.5
43.8
75.0
68.8
6S.8
60.0
31.3
33
33
Carpenters. .
Steam fitters. .
33
Engineers (portable and
hoisting)
Steam fitters' helpers
75
Sionemasons
50
Hod carriers
Structural-iron workers
St ructural-iron workers (fin-
ishers).
22
Inside wiremen
Marble setters
Painters
40.0
55.0
Tile layers
Tile layers' helpers
.50.0
20
Plasterers
riasterers' laborei"s
ECOXOMICS OF THE COXSTRUCTIOX IXDUSTRY. 201
Table 83. — Percentage Ino'ease in Jiourlt/ uagc rate for building trades-nun in large
Ameriran cities, 1914-1918 — Continued.
SEATTLE, WASH.
[Average increase, 37.0 per cent.]
Trades.
Bricklayers
B iiildinj; laborers
Carpenters
Cement workers (finishers).
En'dneers (portaljle and
hoislinf;)
Hod carriers
Inside wirenien
MarWe setters
Marble setters' helpers
Painters
Painters (sign)
Hourlj' rate.
Cent3.
75.
37. .5
5t).3
62. -5
1918
Cents.
100.
56.3
82. .■>
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<i, Oreg
I'roviiloMce, R. I
RichiiKiiKl, V;i
St. Louis, Klo
St. Paul, iMina
Salt Lake Citv, Utah
San Franci.sco, Calif .
Sciaiilon, Pa
Seattle, Wash
Washington, D. C ..
Per cent
increase.
26.6
21.6
20.8
26. .3
25. 9
25. .s
20.7
24.2
.39. (■)
32.7
35.3
29.8
54.0
18.7
24.0
23.0
22.9
39.4
37.0
38.5
202 ECONOMICS OF THE COXSTRUC'TION INDUSTRY.
%
180
160
180
160
SOURCES
us. LABOR OEPT. unj A F. jf L.
140
140
.€584
151
120
.554-0
120
102
100
■Q /I
—.5030
.5115
5208
103
100
.4-750
80
80
YEARS
1913
1914
1915
1916
1917
1918
%
AVERAGE ANNUAL HOURLY
SCALE OF BUILDING TRAOES
MAY 1913- MAY 1918
WITH INDEX NUMBERS
U.S. DEPARTMENT OF LABOR
INFORMATION AND EDUCATION SERVICE
DIVISION OF PUBLIC WORKS AND CONSTRUCTION DEVELOPMENT
CHART XIII.
Ecoxo:\rTcs of the coxstruc'Tio:^: industry.
'203
'"4
i
I
m
y,^/.
1
I
CD
Ll
UJ
LJJ
93%
'y'^M!""'
20%
X
A
iLJi
55/0 55 >^
<
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. «.<? dlilded (unong the ctmji/ang'a
customer.^.
45 savings banks ^io, 12G, 000
l,570trustecy 35,485.000
4, 715 indi\dduals fio, 040. 000
243 charitable institutions 12, 267, 000
16 insurance companies 6, 919, 000
2S tru^t coinpanio- 7. 932, 000
Total mortgages ontstandinc, Dec. 31, 1918 142, 775, 000
Total mortgages outstanding, July ] , 1918 144, 083, 000
It will be obseiTed from the above table that individuals hold
nearly one-half of all the mortgages guaranteed by this company.
It might be noted also that the total amount of mortgages guaranteed
by this company decreased nearly $2,000,000 from July 1, 1918, to
December 31, 1918. The companj^ stated that since August, 1914,
it has paid off mortgages amounting to $55,657,000, or nearly 40
per cent of all outstanding mortgages.
The Torrens system in New York.
The efficacy of the Torrens land title system in reducing the cost
of real estate loans has long been a subject of controversy. It has
recently come more prominently intp the public eye in New York.
On May 9, 1918, Gov. "VMiitman signed the Torrens title bill, amending
the law as it had been operating in New York. (Record and Guide,
May 11, 1918.) Advocates of this law assert that it enables property
owners in NeAv York '' to free themselves from the grip of title com-
panies'' and that every property owner v/ill find it to his advantage
to avail himself of the benefits of this law. Under the new law, it
is asserted, the registration of land titles can be made at moderate
expense and in a short period of tune, unless there is a contested title.
Waiter Fairchild, secretary of the Torrens Title League, outlines
the methods of operating under tliis law as follows (Record and
Guide, May 18, 1918):
For first registration, the title is Examined xmder order of the court. Tlii? oflRcial
examination is done by an examiner in the registrar's office although the comt may,
if applicant requests, accept a report from a title company in lieu of the oflicial
examiner's report. A survey must be furnished by the petitioner. The court set-3
a day when the petitions will 1)e heard, and notices of the hearing f»re sent out by tho
registrar. On the return day, if no objections are found, the title is ordered registered,
and assurance premium is then paid to the registrar and the owner receives a certificate
i>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,<w6,207
1,920,:«4,-331
1,2-52.889,174
23, 746, 556
100,048,728
1,091,549,464
1,277,1.77
203,025
1.5,305,724
70, 400, 200
379, 725
1, 309, 702, 705
24,083,905
108,341,088
1,114, 120. 585
653,405
277. 190
15, 985, 534
75. 580. 810
704.675
1, 339, 756, 192
22,619,909
ia5, ISO. 9}8
1.104,0(S.Sl'5
653.7f>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<vl92,4-5.i
79-3, 425, ■SS4
2, 532, -^92, "SO
1.974,040,375
■ 14.n0,5"<5
8, 912, tHKi
21 •"*9. 870
72^ 419! fi58
151 ; 777
5,417,-5.52,517
901.845,248
2,744,317,081
2,139,299.037
10,070.993
8, 900, -505
32,024,312
79, 029. 881
47.5, 570
5, 923, 1C2, 627
932,437.232
3.164.170,014
2.105,939,081
15,505,206
9, 855. .540
55,079,104
80,072.8-29
757, f«2
0. 429. 816. ^♦44
1,020,241.730
3,221,371.809
2,231,461.928
19,670,50:5
10, 40ii. $^,2
a5, 400. 400
89,017,871
(■in. 002
«i. 6S8. 238, 235
1. .'3
«8. 71
3.66
0. :i
S.i. 21
9.2*
1. .50
79.74
«?. 24
4.11
52. A
10. IT
3.05
72. J<.
8S. M
07- r. 7
3. «S
51.02
7.95
S.01
47. 0"."
88. »■.»
79.S.-i
%>. 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.-<titiitions subject to the supervision of Hie New i ork banking department
ot roiiort as of January 1, tlie reports nearest that date have been taken for purp^>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<Avn in 'vrhich it is located, provided the State lavrs extend a similar pri\-ilege t<j
competing State corporations. As the law now stands national banks are at a serious
disadvantage in meeting the competition of State banks vath branches. In the
opinion of the board the proper development of the Federal Reserve system makes
it necessary to coordinate as far as possible the powers of all member banks. Under the
existing laws State banks and trust companies in many cases are permitted to operate
branches even after conversion into national banks with the result that some member
banks have advantages which others do not enjoy. The board therefore renews its
recommendation that this amendment be adopted, being confident that it Avill prove
beneficial to the Federal Reserve system, as well as to the communities concerned.
Now it is argued that these proposed changes have not affected and
will not affect the amount of financial capital ordinarily a\-ailable ior
investment in real estate mortgages because eligible State banks
will join the system only when their busmess of deposit and discount
is of such a nature and volume as to benefit b}' the new facilities.
Logically, therefore, to other types of banks, devoting theii' attention
to real estate loans, membership would be of slight advantage.
These will not join. Therefore the increase in number of member
State banks, even if occuring at a time of reduced investment in real
estate mortgages, would not necessarily be the cause of this reduction.
This view is held for example by C. S. McCain, vice president of the
Bankers Trust Co., Little Rock. Ark., who A\Tites as foUows:
There is no question that the rediscount privilege will have a tendency to iiicreaseour
loans that are available for rediscount. In this State the liusinoss of the trust comjia-
niesis not segregated to the extent it is in the eastern or even the middle Avestern State.^,
so that we have very broad powers under our trust company charlers and do a commer-
cial as well as a trust company business. I think, therefore, that the tendency will
be, rather than restricting the real estate loans, 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 n<iw enjoy.
However, in spite of all argmnents in support of the poptdarity
of mortgage loan investments there is much official testimony of a
contrudictorv nature. Our own statistics show that financial capital
282 ECOXO.MICS OF THE CONSTRUCTION INDUSTRY.
has ))Ocoino relatively loss available for investment in temporary
{)iiilding loans and mortgage loans. Mr. Walter Stabler, comptroller
of the Metropolitan Life, has -warned the public that large lenders
Averc temporarily out of the market and borrowers would have to
seek accommodation elsewhere. In 1914 Mr. J. Lee Coulter, testify-
iiijr before the Rural Credits Subcommittee, said:
As an illustration, you \nll find by a study of State laws that State banks are allowed
to loan money on real estate and yet in all States the practice is that they have imi-
tated the precedent of the national banks. Even if yf>u 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 Boar<l
concluded that the average advance in rents from July, 1914, to
-November, 1918, was 20 per cent, ])ut as in the earlier study great
variations were pointed out in different cities. For examj^le, the
increase in rents paid by wage earners was over 40 per cent in
Portland (Oreg.), Seattle, and Flint, and over 20 per cent hi Detroit,
Ivockford, and IMadison, but the hicrease was 10 per cent or less ui
Columbus, ProA'idence, and Los .Vngeles.
The replies to a questionnaire received by the Division of Publi<'
Works and Construction Development of the Department of Lal>oj-
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<X)
26,390,000
34,295,000
13,155,000
38,030,000
4,775,000
14,615,000
44,390,000
131,285,000
36,710,000
11,500.000
126,185,000
5,830,000
16.710.000
States.
Novadu
New Hami».shire.
New Jersey
New Mexico
New York
North Carolina..
North Dakota...
Ohio
Oklahoma
Orpgon
Permsylvania
Rhode Island
South Carolina. .
South Dakota.. .
Tcnnpsseo
To.Ka,'i
Utah
Vermont
Virginia
Washington
^\est Virginia. . .
Wisconsin
Wyoming
Miscellaneous
Num-
ber of
proj-
ects.
3
20
328
26
673
31
38
805
77
34
WJ2
22
46
65
52
89
78
15
97
105
92
224
17
35
Total 6.472
Valuations.
$1,860,000
2,166,000
62,995,000
4,000,000
164,46-5,000
4.100,000
3,040,000
171,335,000
9,275,000
6,875,000
127,345,000
14,830,0«)O
28,250, JOO
5,225, XK)
6, 720,. 100
23,290,000
19,275 000
1,350,000
34,530,000
46,615,000
16,. 355, 000
32,090,000
3.355,000
5,445.009
1,711,802,009
PRH'ATE.
Classes.
Num-
Ijer of
proj-
ects.
Apartments
Amusements
Business | 766
Dwellings 729
Educational 95
Hospitals and homes | 85
Hotels
Valuatiou.s.
821,485,000
8,850,000
100,787.000
34,675,000
10,120,000
14,190,000
33,940.000
Classes.
Num-
ber of
proj-
ects.
Manufacturing
Religious
Social
Miscellaneous..
Total....
388
318
117
197
3.378
Valuations.
$79,740,000
17,655.000
15,345.000
52,3-15,000
481,062,000
PUBLIC.
Classes
Bridges
Canals, levees, and water
fronts
City halls
Fire and police stations
Hospitals, institutions, and
homes
Lighting plants
School.-?
Num-
ber of
proj-
ects.
178
203
30
508
Valuations.
§-19,090.000
88. .870. 000
10.755.000
4,200,000
63,870,000
14,660.000
113,260.000
Classes.
Sewers
Street improvements and
road work
Water works
Railroad work
Miscellaneous
Total
Num-
ber of
proj-
ects.
294
1.396
348
289
3.094
Valuations
§81,755,000
448.155,000
204,3.50,000
93,690,000
164.068.000
1,230,740,000
EC02srOMICS OF THE COXSTRUCTIOX i:Js'DUSTRY.
243
Table 97. — Deferred projects — public buildings and public utilities.
BRIDGES, CANALS, LEVEES, AND WATER FRONTS.
[Talmlated from replies to a questionnaire of the Division of Public Works and Const ruction Development .J
States.
Bridges.
Canak, lovee.';, and
waterfronts.
Numl)er
of
projects.
Value in
thousaJKi-S
of dollars.
Number
of
projects.
Value In
thousands
of dollars.
AlaV)ama
Arkansas
California
Colorado
Connecticut
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts. .
Michigan
Minnesota
Mississippi
Missouii
Montana
Nebraska
New Jersey
New Mexico
New York
North Dakota..
Ohio
Oklahoma
Oregon
Pennsylvania . .
Rhode Island . .
South Carolina.
South Dakota. .
Tennessee
Texas
Utah
Virginia
Washington
West Virginia. .
Wisconsin
Wyoming
Miscellaneous..
500
113
65
520
3.50
10,550
80
1,210
9O0
2,500
250
30
870
1,220
35
8:50
1,3.50
200
90
2, .500
10
2,100
2.50
8,S90
450
900
4,615
1,000
150
250
Total.
CO
1^5
3,r)00
800
1,515
100
CO
411,0'JO
l.OfW
154
8«15
100
CM)
10
1,200
8fW
2,C!'<)
101)
im)
20,000
10
15
"m
30<J
3,9.50
I2.O1W
13,709
6,100
30
1,409
fi,120
1.210
5,000
l.SOO
300
10
70
4,660
1,900
210
3,000
244
ECONOMICS OF TTIK COXSTTtT'CTION INDUSTRY.
Tabi.b !)S. — Di'Jnred prnjccls — public buildings and public utilities.
CITY HALLS, FIUK AND POLICE STATIONS.
[Tabulalid from roplios I o a questionnaire of tho Division of I'uhlic Works and ( 'on.st ruction Devrlopmrnt.]
Slates.
Cilv halls.
Number
of
projects.
Value in
thousand.s
of dollars.
Fire and police sta-
tions.
Number
of
projects.
Value in
thou.'iands
of dollars.
Alabama
Arkansas
California
Colorado
Georgia
Indiana
Iowa
Kansas
Kentucky
Maine
Massachusetts.
Michigan
Minnesota
Mississippi
Missouii
Montana
Nebraska
New Mexico...
New York
Ohio
Oklahoma
Pennsylvania.
South Dakota.
Texas
Utah
Virginia
Washington...
West Virginia.
Wisconsin
Wyoming
Total.
150
10
6.50
100
200
775
lo
5.M
25
400
10
70
100
1,100
150
230
50
735
50
4.270
20
60
6.^
10
15
230
100
30
10, 755
50
'ioo
40
2,350
70
10
200
560
740
25
4,200
Table 99. — Deferred projects — public buildings and public ulilities.
HOSPITAI-S, INSTITUTIONS, AND HOMES.
[Tabulated from replies to a questionnaire of the Division of Public Works and Construction Development.!
Alabama
California
Colorado
Connecticut
District of Columbia
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Massachusetts
Michigan
Minnesota
Missouri
Montana
10
1,750
1,400
25
2,100
40
3,020
735
1,035
275
80
100
150
3.720
4,300
5.50
100
15
NcV)raska
New Jersey
New Mexico...
New York
North Carolina
Oliio
Oklahoma
Oregon
Pennsylvania. .
Rhode" Island..
Tennessee
Texas
Utah
Wasliington . . .
West Virginia .
Wisconsin
Total....
203
1,200
695
40
20,485
250
10,310
550
210
6, ISO
900
1,350
IOO
700
950
50
595
63,870
ECONOMICS OF THE COXSTEUCTIOX INDUSTRY.
245
Table 100. — Dejcrred projects — public buildings and public r(tilities.
LIGHTING PLANTS.
[Tabulated from k plies to a questionnaire of the Division of Public Works and Construction Development.)
States.
California...
Colorado
I.linois
Indiana
Kansas
Maine
Michigan . . .
Minnesota . .
Missouri
New Mexico
Number
of
projects.
Value in
thousands
of dollars.
SO
50
920
25
20
40
1,050
3.50
500
90
5"tates.
Ohio
Oklahoma
South Carolina
South Dakota.
I'tah
Washington . . .
Wisconsin
Total....
Number
of
projects.
Value In
thou.sanda
Of dollars.
5,250
10
300
140
500
5,000
335
11,060
T.4.BLE 101. — Deferred projects — public buildings and public utilities.
SCHOOLS.
[Tabulated from replies to a questionnaire of the Di%ision of Public Works and Construction Development.)
States.
Alabama
Arizona
Arkansas
California
Colorado
Connecticut . .
Delaware
Georgia
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Number
of
projects.
Value in
thousands
of dollars.
2, .575
290
85
2, 2.55
8, 335
3,230
500
75
340
9,455
1,430
1,495
820
445
800
480
115
3,660
12.400
0,820
80
850
240
States.
Nebra.ska
New Hampshire
New Jersey
New Mexico
New York
North Carolina.
North Dakota..
Ohio
Oklahoma
Oregon
Pennsylvania...
South Carolina.
South Dakota..
Tennessee
Texa.s
Utah
Vermont
Virginia
Washington
Wc.'^t Virginia . .
Wisconsin
Total
Number
of
projects.
Value in
thoasands
of dollars.
4G5
2G0
195
75
25,895
300
910
10,490
1,350
80
9,165
100
530
635
900
1,090
20
28.5
890
21.5
2,5S5
113,260
246
ECONOMICS OF THE COXfeTRUC'TION INDUSTR.Y.
Taeji.ic 102. — Deferred 'projects — public huildings and puhHc utilitiet.
SEWERS, STREET IMPROVEMENTS, AND WATERWORKS.
(Pal miateil from re|)lios to a questiormaire of tlip, DivLsion of Tulilic Works and ( onstruction 1 'evelopmentj
■
Sewers.
Street improvements.
Walerworics.
states.
Number
of
projects.
Value in
thousands
of dollars.
Num»)er
of
projects.
Value in
thousands
of dollars.
Number
of
projects
Value in
thousands
of dollarit.
Alabama
2
120
18
2
13
36
34
16
17
8
4
5
19
106
67
60
48
29
19
8
35
60
29
15
60
19
17
3
6
41
14
68
13
13
172
17
2
52
2
12
15
10
37
19
3
20
32
31
79
6
9
1,570
500
4,8K()
K, 300
2fJ, x?;5
(i.K'.O
5,735
5 , 355
220
435
7.0 25
38, s:jO
6, •i.l^
11,125
23, 815
2,560
4,800
1,300
6,150
11,450
21,065
16,395
5, 130
22, 480
3,140
5,155
1,860
1,025
9,160
3, 175
10,295
1,765
1,100
04,595
1,160
1,840
27,440
270
25,700
745
1,400
6,735
7,855
1,020
3,045
17,590
4,300
10, 835
1,700
1, i:o
1
26a
Arltona.
3
7
6
1
6
600
1,580
1,275
10
1,020
2
7
11
7
1
1
3
6
31
6
7
12
2
2
1,000
466
California
59,330
Colorado
1,670
Connecticut
2,080
100
Florida . .
30
700
1
20
8
10
5
3
i
1
15
15
10
'J
14
40
10,235
1,070
1,220
630
35
130
10
1,000
3,480
4,495
1,595
1,970
15,265
860
Illinois
9,790
535
Iowa
330
Kansas .
650
Kentucky
800
Louisiana
326
Maryland
3
13
20
11
1
11
3
3
240
Massachusetts .
965
27,455
Minnesota
1,130
10
Missouri
11,370
750
Nebraska
5
370
35
7
415
5
3
23
1
1
40
19
3
13
4
2,975
210
18
5,905
33,325
350
10
Ohio
46
4
12,460
2S0
9,«U0
Oregon
2,310
1,110
25
6,455
9,515
11,010
2
1
4
160
760
420
2,485
1,175
South Dakota
8
13
m
Texas. .
235
2,190
1,310
3
- 5
1
16
140
3,325
60
1,505
4
6
5
16
1
250
Washington
4,919
1,875
Wisconsin
1,115
200
1
10
i
Total
294
81,755
1,396
41^.155
1 348
204,350
ECO^'OMICS OF THE C'O^'STRUCTIOX IXDUSTRY.
247
Table 103.— Deferred 2)rojects — public buildings and jnihUc lUilities.
RAILROADS, TRACKS, AND STATIONS.
[Tabulated from replie.s to a questionnaire of the Division of i'ulbio Works and Construction D<^ velotiineiu.l
States.
Number
of
project?.
Value in
thousands
of dollars.
States.
Numlier
of
projicl?.
Value in
thousands
of doUiu-s.
California
1
2
1
2
1
5
1
1
1,000
60,300
1,688
1,320
250
20.4<t7
2,000
65
Ohio
Oklahoma..
i
2
1
1
2
M
f^i
ll>)
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 })<M'ii let {it the tiinc! of tho armistice. Furtlicnnoj-c, (ncii if
iliey liad cinbraccd all such projects, tlioy would not bo in any sense
an exact measure of the present need for building. However, with
these considerations in mind, the deferred construction which they
record at the time of the armistice is notably large.
Kcspectfully submitted.
(Signed) Edwin J. Cusj-p,
M. A. Mikkelsen,
Directors,
Warren Case,
Everett Domixick,
TlIOMAS S. IIOLDEX,
Augustus P. Norton,
Catherine J. Paine,
l. a. rufener,
John Wiiyte,
Staff Memhers, Economic Section;
Division of Public Worlds and Construction Develoimienb.
SELECTR E BIBLIOGRAPHY.
This bibliography has been compiled "svith a view to acquainting architects, con-
trartors, engineers, manufacturers of building materials, and others interested in
the construction industry with some of the main sources of information concerning
their industry. It has therefore been made selective and descriptive rather than
exhaustive.
I. COST AND SUPPLY OF BUILDING MATERIALS.
I. General Information on Prices.
1. V\liolesale Prices, Wages, and Transportation; report by Mr. Aldrich from
the Committee on Finance. March 3, 1893. Senate Report Xo. 1394, forty-
second Congress, Second Session, Part II. (Known as the Aldrich Report.)
Gives price records on a large number of articles, extending, in some cases, as far back as
the 1810's and tip to the year 1S93.
2. Gold, Prices, and Wages Under the Greenback Standard, by Dr. Wesley C.
Mitchell (Berkeley, 1908).
Covers the Civil War jieriod and the reconstruction period following. The price tables used
were taken from the Aldiich Report.
3. Equation of Exchange for 191G, by Irving Fisher. American Economic
Review, December, 1917, p. 934.
4. Appraisals and Rate Making, by Cecil F. Elmes, of the Engineering Staff of
Sanderson ik Porter, Chicago.
A paper read at the fifteenth annual meeting of the Illinois Gas Association, March 20, 1919.
Discusses problems of valuation of public utilities and rate making brought about by the new
price level. Gives curves of prices in England for sLx centuries on wheat, iron, lead, cattle,
.sheep; also, ciu-ves of artisans' wages for six centuries in England. A valuable contribution
to the study of the 1919 price situation.
5. Prices During the War and the Readjustment Period, by T. S. Ilolden.
Pamphlet issued by the United States Department of I.abor, April, 1919. Summarizes
briefly the price situation as affecting the building outlook for 1919.
6. Lumber and Its Uses, by R. S. Kellogg. Radford Architectural Co. Chicago,
1914.
This is a study of the economic uses of lumber and lumber products. This was used as an
exhibit before the Interstate Commerce Commission.
7. The Price Problem in the Lumber Industry, by Dr. Wilson Compton, Ameri-
can Economic Pteview, September, 1917.
II. Government Publications.
1. Bulletins of the Geological Survey.
The Siu'vey Lssues annually bulletins on the produciion of various mineral products. Of
special interest in connection with building materials are those on stone, cement, lime, slate,
sand, and gravel, and clay-working industries in the United States. The last-named also
gives data on building operations in ilie United .'^tates.
In each of these bulletins there is presented, in addition to production statistics, a general sur-
vey of the industry in question for the year, together with, in most eases, average prices of the
product for the various years included in the production tables. Production statistics are given
by regions, as well as by totals for the whole eoimtry. Statistics of imports and exports are
given.
On the whole, these bidlelins conlaiii a large mass of very valuable information.
249
250 KCONO.MK^S OF THK (^OXSTRUCTIO^^ INDUSTRY.
II. Government Publications — Contimipd.
2. Bulletins of the United States Bureau of T,nl)or Stntistir-H.
Wholesale Prices. iHsued annually.
Gives tnontlily ((uofntions on 29* comniodilios, together v. itli jirino indices, by groups and
for nil commodides, from the year IS'JO to date. Contains a lnra)>cr and Imildinfr tnaferials
group, with 27 commodities listed, together with iirice in<licc.s for the fa"oii|«.
Monthly Labor Reviev.
Gives indices for wholesale prices, by groups and for all commodities, toj.'elher wilhstatktics
of retail prices of the commodities that make up the cost of li\iii!;, statistics on wage*;, and
other general information connected with labor snltjecls.
3. Federal Reserve Bulletin. Issued monthly.
Gives review of business coTidllions, reprintin'^ prici- indices compiled by varioiLS statistical
organizations.
4. Bulletins of the Price Section, War Industries Board.
These bulletins (57 in number) give quoted and relative prices on nmncrous commo<iities
by months, by quarters, and by years, for the period 1913-1919. Of special interest in con-
nection with biulding materials are the following:
No. 1. Summary.
No. 2. International Trice Comparisons.
No. 3. Government Control 0^ er I'rices.
No. 6. Prices of Building Materials.
No. 33. Prices of Iron, Steel, and their Products.
No. 38. Prices of Clay Products.
No. 39. Prices of Sand and Gravel.
No. 40. Prices of Quarry Products.
No. 41. Prices of Cement .
No. 42. Prices of Gla,ss.
No. 43. Prices of Lumber.
No. 41. I'rices of Paints and Varnishes.
No. 51. Prices of Wood-Distillation I*roducts and Naval Stores.
The Price Section of the War Industries Board has on file the vrholeiale market quotations
by months from January, 191.?, to December, 191S, on about one himdred grades of light hard-
ware.
The Price Section has also issued a bulletin, Comparison of Prices Diu-Lng the Civil War
and the Present War.
5. Bulletins of the United States Forest Service.
Some Economic Aspects of the Lumber Industry, by William S. Greeley,
United States Forest Service Bulletin No. 114.
Treats of the organization, the value of lumber products and lamiK-r costs, foreign trade,
etc.
The Export Lumber Trade of the L^uited States.
Handbook of suggestions for developing foreign commerce and study of the present needs
and future possibilities of extending the lumber industry in foreign markets.
6. Bulletins of the War Ti-ade Board.
Effect of War on the Glass Industry of the World. (With tables.)
Lumber Production, Plant Capacity, Labor Situation, etc., in the United
States.
Steel: Production in European Countries Since 1913.
Lumber: Effect of War on the World Situation.
Iron and Steel Products: Exports to Allies, Neutrals, and Ct- nt.ral Power.3 and
to Acti\e Belligerents, to Europe and to the Worid, 1912-1918.
7. liullotins of the Federal Trade Commission.
Hemlock and Hardwood Lumber.
Cost accounting s( iidy.
Building Hardware.
Cost accounting study. ,
ECONOMICS OF THE CONSTRUCTION lUDUSTBY. 251
II. Government Publications — Continued.
8. Bulletins of the Tariff Commission.
The Glass Industry as Affected by the War.
127-page report. A comprehensive report coveriru; production, coosimiption, imports,
exports, wages of labor, and other data on all kind? of glass product^. Data covers j>erir>.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 9<i commodities. This includes an index for a build-
ing materials group, which, however, is not very comprehensive, only eight commodities Ijeing
included.
3. The Iron Age. Xew York, The Iron Age Publishing Co. Weekly.
Gives weekly quotations and market reviews on iron, steel, and other metal products, and
also production figures from time to time. Very complete and thoroughly reliable.
4. The Iron Age. Annual Review Number, January 2, 1919.
Gives a number of price series on iron and steel products, covering a period of 22 y<>ar::.
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, aii<l Dni;^: llcpijilcr, J!)l« Yearbook. Oil, Paint, and I)rng
lleporter (Inc.).
"A completf^ t;il)ular prcsoutiition of production, distribution, prices of commoditips, imports
and exports, in tho Reporter markets with abstracts of legislation affecting the same, together
with price comparisons since tho beginning of the war, August, 1014, to December, 1018, inclusive;
as W(^I1 as related matter having to do with tho changes incident to the conduct of business in
war time and tho development of new industries to meet war-time demands, with special analyses
of tho movement of tho more important comraodit ies, and a general r^snm(5 of all markets which
tho Reporter represents."
13. Liimbei'. Manufacturcra and Dealers Kdilion. The Journal of Conamerce
Co. St. Louis, Mo,
Quotations (m lumber.
14. American Lumberman. Chicago, 111. "\\'eekly.
rdves review of current market condition-s. Current prices.
15. Southern Lumberman. Published weekly.
Editorial comment on market conditions. Market reports.
16. Commercial Bulletin. Boston.
Quotations on lumber from the Boston market.
17. Other joiu-nals giving prices are:
On Paints, Naval Stores, etc. —
American Paint JoiU'nal.
Journal of Commerce.
Naval Stores Review.
Di-ugs, Oils, and Paints.
On Iron and Steel Products —
Hardware Age.
Journal of Commerce.
American Machinist.
"Waste Trade Journal.
II. LABOR AND WAGES IN THE CONSTRUCTION INDUSTRY.
The Bureau of Labor Statistic.«i.
1. The Bureau of Labor Statistics is the nucleus around which the Department of
Labor itself has been built up. Its present functions are almost wholly gtatis-
tical and educational.
The Monthly Labor Review. — The Monthly Labor Review, formerly The
Monthly Review, begun in July, 1915, is the principal publication of the
bureau. In the three years of its existence it has come to be recognized as the
authoritative publication dealing with matters of current interest relating to
industry. It gives information concerning the current work of the Bureau of
Labor Statistics and of other bureaus of the Department of Labor, and al?o the
work of other Government agencies dealing directly with labor matters.
Special articles and brief reports of original investigations appear in its i.-sues.
Statements of the employment and conciliation work of the department and
statistics on immigration are printed each month. Reviews of the work of
State labor bureaus, workmen's compensation commissions, minimum wage
commissions, and arbitration boards are given, together with information con-
cerning the legislation of Congress and of the several States, and summaries
and analyses of important court decisions relating to lal)or. Retail and whole-
sale i)rices of commodities appear each month, and various phases of the labor
situation in this and foreign countries as affected by the war arc considered in
detail. Up-to-date information as to the various Government war boards and
ECONOMICS OF THE CONSTRUCTION INDUSTRY. 253
The Bureau of Labor Statistics — Continued.
bureaus dealing with lalxT mat tors and their per~onnf4 and work i< puLlinhcd
ear-h month.
" Frequent reference is made to the annual and biennial reports of the various state Depart-
ments of Labor. Copies of all State reports are on file in the library of the United States Depart-
ment of Labor. In addition, the Bureau of Labor Statistics receives many unpublished State
reports which appear in the Monthly Labor Review published by the Bureau. For this reason
the Bureau of Labor Statistics is frequently given as the source of statistical information which
has its origin in the various State departments.
" ^Vhen statistical reports are issued periodically by any agency, the data in the last report
has been listed. Special Reports of the Federal Government running back to 1910 are listed
but special State reports are not included."
A List of Labor Statistics Issued by the Statistical Ci.earinc House, Cextral
Bureau oii* Planning and Statistics.
2. This bibliography contains material under the I'dllnwing h(>ading.= :
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
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This book is DUE on the last date stamped below
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