UC-NRLF 
 
 Our Situation Today A Country* 
 Wide Economic Survey 
 
 The Second Economic Survey of the American 
 
 Bankers Association, Reported at the Convention of the 
 
 Association in Los Angers, October 4, 1921, 
 
 by John S. Drum, President 
 
8 
 
 Our Situation Today A Country- 
 wide Economic Survey 
 
 American Bankers Association Second 
 Economic Survey, October, 1921 
 
 LAST SPRING, when I gathered the opinions of bank- 
 ers and business men throughout the country and 
 consolidated the information received in the Eco- 
 nomic Survey that was reported to the Executive Council, 
 the nation's business had just experienced a rapid fall 
 from the height of war-time activity. 
 
 The countries that for six years had been eager markets 
 for American products of all kinds had reached the point 
 at which they could no longer consume and pay for our 
 excess production. Costs of production had mounted stead- 
 ily for years, and at length had become so high that they 
 could not be absorbed by foreign consumers ; foreign coun- 
 tries, which had created great debts and destroyed great 
 wealth, simply did not have the means to pay. 
 
 The sudden decline of foreign demand inevitably re- 
 sulted in a reduction of the prices of our products, regard- 
 less of what the cost of producing them had been. This 
 reduction in values did not uniformly affect all products, 
 and brought about a reduction in domestic purchasing 
 power that resulted in decreased consumption, a reduction 
 of the output of manufactured goods, and unemployment. 
 
 The debt-making period had ended and the debt-paying 
 period had begun. Changed conditions had made neces- 
 sary a readjustment of the entire economic machine, and 
 readjustment had started. 
 
 In many quarters, naturally, there was a tendency to 
 resist the forces working toward readjustment. There was 
 a natural unwillingness to take losses, and men were 
 unwilling to give up favored positions that had come to 
 them through the flush of war-time prosperity. 
 
 Systems of taxation devised to meet war conditions, 
 but obstructive of business in normal times, were in effect. 
 
 N ' 
 
 452320 
 
Great industries were operating under restrictions and reg- 
 ulations that the Government had found it necessary to 
 impose for the successful conduct of the war. 
 
 Business, in short, was out of joint, and men contem- 
 plated its condition with uncertainty. They were groping 
 for the facts. 
 
 It was with the idea of getting at the facts, of getting 
 a true picture of conditions in this country today, that this 
 second survey was undertaken. I sought the opinions of 
 the bankers and men representative of the industries of 
 the country, and the information these men possessed by 
 reason of their close contact with the nation's business. 
 More than one thousand bankers and others replied to the 
 questionnaires sent out and, in addition to reporting the 
 progress of readjustment, discussed the situation in their 
 communities. 
 
 This picture of our situation is prepared from these 
 reports. They come from the ranges of New Mexico 
 and Wyoming and Texas, from the mines of Mon- 
 tana and Arizona and Utah, from the coal mining 
 regions of Pennsylvania and West Virginia and Ohio, 
 from the industrial centers in New York and Pennsylvania 
 and New England, from the tier of industrial and agricul- 
 tural and mining states extending from the Atlantic Ocean 
 to the Great Lakes, from the cotton regions of the South, 
 from the great grain states of the Middle West, from the 
 forests of the Northwest from every part of the country. 
 
 The Volume of Manufacturing. 
 
 The output of finished goods throughout the country is 
 considerably smaller than it was a year ago, and measur- 
 ably smaller than it was six months ago. Although pro- 
 duction as measured by employment has decreased pro- 
 gressively throughout the year, our reports show there 
 has been a slight increase in the output of some manu- 
 factured products in the last few months. This increase 
 has been most noticeable in industries devoted to the pro- 
 duction of essential articles of food and clothing, and is 
 commonly ascribed in reports received in this survey to 
 two causes : 
 
 First, the gradual depletion of surplus stocks of these 
 goods that had accumulated a year ago; and 
 
 Second, a seasonal increase in the demand for them. 
 
 Whatever slight increase in the output of finished 
 goods as a whole has taken place has not been shared by 
 iron and steel products, heavy machinery and farm imple- 
 
ments, if production of these commodities in the country 
 as a whole is considered as a unit. 
 
 The reasons commonly given by the men whose 
 reports make up this survey for the steady decline in the 
 output of these articles throughout the year are : 
 
 First, comparative stagnation of activity in construc- 
 tion; 
 
 Second, delay in railroad repair and replacement work; 
 
 Third, comparatively small reduction in the prices of 
 iron and steel and their products; and 
 
 Fourth, lessened purchases of new equipment and sup- 
 plies by farmers. 
 
 Surplus Stocks Reduced. 
 
 Taking the country as a whole and considering all 
 classes of finished goods there is a surplus of manufac- 
 tured commodities in the hands of the producers. These 
 surplus stocks have been reduced gradually throughout 
 the year and, as replacements have become increasingly 
 necessary, more rapidly in the last six months. In many 
 industrial centers manufacturers are limiting production 
 to orders received. This is reported to be due partly to 
 the inability to obtain credit to carry surplus stocks and 
 partly to uncertainty caused by fluctuations in the prices 
 of raw materials. 
 
 Costs of Manufacturing. 
 
 A progressive decline in the costs of manufacturing 
 has taken place during the year. In industry as a 
 whole, the costs of materials, labor and construction have 
 declined in the order named. 
 
 The larger part of the drop in the cost of materials 
 took place during the first six months of the year. Re- 
 cently this decline has been checked and prices have 
 steadied. The recent revival in the clothing industry in 
 New York presents a good example of the effects of re- 
 duced production. When activity in the clothing indus- 
 try declined production of wool textiles was decreased 
 accordingly. When the demand for clothing sharply in- 
 creased a short time ago, and manufacturing took an up- 
 ward turn, a shortage of woolen cloth soon developed. 
 The price of woolen textiles increased, but clothing manu- 
 facturers, unable to get cloth, found themselves after a 
 long period of reduced activity in a position where they 
 were unable to fill orders. 
 
 The reduction in the cost of labor, reports considered 
 in this survey show, has been due to two causes: 
 
First, reduced wages or longer hours for the same 
 wages; and 
 
 Second, increased efficiency. 
 
 Wages. 
 
 In industry as a whole the greater part of the wage 
 reduction has occurred in the last six months. Wage 
 reductions in many instances have been effected by the 
 voluntary acceptance by labor of decreased rates of pay 
 or longer hours of work. In other instances labor has 
 returned to work after trying by strikes to resist wage 
 cuts, and in still others manufacturers have shut down 
 their plants and then opened them again, re-employing 
 part of their forces at reduced wages. 
 
 Increased efficiency of labor has been the natural result 
 of unemployment on a large scale. Competition for em- 
 ployment, largely eliminated during the war and for 
 eighteen months after the armistice, has been restored dur- 
 ing the last year and particularly in the last six months, 
 and in many industries in which wage reductions have 
 been slight the cost of labor has been decreased by reason 
 of greater efficiency and a greater volume of per man 
 production. 
 
 Reports received in this survey are that notable excep- 
 tions to the common reduction of the cost of labor are 
 apparent in three great industries, railroading, coal mining 
 and the building trades. Railroad wage scales still are 
 fixed by the Railroad Labor Board, a Government agency, 
 and the continued enforcement of shop rules made during 
 the period of Government control have made difficult 
 an increase in the efficiency of skilled railroad labor. 
 These shop rules have compelled the use of a number of 
 men for work that could be performed by one. Besides 
 increasing costs by causing much lost motion, these rules, 
 in effect, limit the work a man is permitted to do and in 
 many cases force payment for work that actually is not 
 done. 
 
 In the coal mines wages are fixed by agreements that 
 will not expire until next spring and are kept at war 
 levels while wages in metal mining have come down. 
 There have been some slight reductions in the wages of 
 skilled laborers in the building trades, but in most cases 
 these have been made only after costly strikes that have 
 offset to a great degree any reduction in cost that might 
 have accrued from reduced wages. The efficiency of men 
 in the building trades in the country as a whole has not 
 increased, although there are exceptions to this. 
 
In neither railroading, coal mining nor the building 
 trades have the hours of work been increased. 
 
 The decreased price of lumber and some other building 
 materials, however, has been responsible for some slight 
 decline in construction costs. 
 
 Taxation and Transportation. 
 
 Taxation in the industrial sections has either increased 
 or remained stationary during the year; in no case is a 
 decrease reported. Increased taxation is due largely to 
 greater state, county and municipal levies. 
 
 On the whole, reports received in this survey attribute 
 no part of the reduction in the costs of production to any 
 decrease in the cost of transportation. Freight rates, of 
 course, follow the decisions of the Interstate Commerce 
 Commission and none but minor changes have taken 
 place since increased rates were made effective in August, 
 1920. 
 
 Prices of Finished Goods. 
 
 Wholesale prices of manufactured goods have decreased 
 steadily throughout the year. Food products, which de- 
 clined more rapidly than most other finished goods in the 
 early part of the year, have dropped in price at a less 
 rapid rate during the last six months, and recently the 
 fall has been checked altogether and there has been a 
 slight upward turn in some food products. Considering 
 manufactured goods as a whole, however, the price decline 
 has been uniform and progressive from month to month. 
 
 Retail prices on the whole also have declined steadily 
 throughout the year, although not in the same proportion 
 as wholesale prices. Costs of transportation and selling, 
 entering into retailing to a greater extent than into manu- 
 facturing and wholesaling, undoubtedly have been factors 
 in causing the disparity between the decline of wholesale 
 and retail prices. 
 
 Lumber and Metals. 
 
 Natural products such as lumber and metals, whose 
 output may be regulated at the will of the producer, are 
 produced in smaller quantities today than they were a 
 year ago and in smaller quantities than six months ago. 
 Reports in this survey attribute this decrease in produc- 
 tion to : 
 
 First, lack of demand; 
 
 Second, prices so low as to make production at pre- 
 vailing costs and prevailing freight rates unprofitable ; and 
 
Third, the existence of large surplus stocks that have 
 been reduced at a very slow rate during the year. 
 
 Inactivity in construction at home and a decided fall 
 in the foreign demand have greatly reduced the consump- 
 tion of copper, lead, iron and lumber. At the peak of 
 war-time and post-war activity all these metals and lum- 
 ber were produced in great quantities, and when the 
 demand slackened miners and lumber producers found 
 themselves overstocked. The metals had been mined and 
 the lumber had been cut at peak costs of labor and mate- 
 rials, and consequently when demand fell off and prices 
 declined it was impossible to sell these stocks except at 
 prices that would not net a profitable return over the costs 
 of production. 
 
 In view of these conditions continued production was 
 of course out of the question, and last year many mines 
 and lumber mills were shut down altogether, while the 
 output of those that remained in operation was greatly 
 reduced. During the year the surplus stocks of metals 
 and lumber have been gradually cut down, but they 
 remain abnormally large. 
 
 In the last few months an increasing Oriental demand 
 has operated to increase production in the lumber district 
 in the Pacific Northwest, but the output of lumber in the 
 Southeast remains low. Copper and zinc production is 
 very low. 
 
 Labor costs in the metal mines and in the lumber 
 industry have been reduced in the last year and in the 
 last six months, according to our reports. As in the 
 manufacturing industries, this has been due to competition 
 for work resulting from unemployment, and to the conse- 
 quent reduction in wages and increase of efficiency. Costs 
 of machinery and supplies used in metal mining and lum- 
 ber producing have declined during the year, but not as 
 much as the costs of labor. Transportation costs and 
 taxation, of course, remain high. 
 
 The prices received by producers for metals and lum- 
 ber, while considerably lower than they were in 1920, have 
 not declined greatly in the last six months. Retail prices 
 of lumber, however, have declined more rapidly in the last 
 six months than in the preceding half year. 
 
 Agricultural Products. 
 
 Except for a very much smaller output of cotton result- 
 ing from a great reduction in acreage, and eliminating from 
 consideration the effects of climatic conditions, the produc- 
 tion of agricultural products is as great as it was last 
 
 6 
 
year. Our reports are that surplus stocks that existed after 
 the harvest last autumn have been gradually decreased 
 throughout the year, but the new harvest, of course, pro- 
 duces another surplus. 
 
 The great carry-over of cotton has been steadily re- 
 duced, and the quickened demand that has developed quite 
 recently indicates reduction at a more rapid rate from 
 now on. 
 
 The sustained output of agricultural products does not 
 find a parallel in the livestock industry. Low prices and 
 curtailed markets for cattle, hogs, sheep and wool have 
 operated to decrease activity in breeding and fattening 
 livestock. Reports received in this survey are that in a 
 large number of cases the reduction in values and the diffi- 
 culty of obtaining adequate credit to finance their opera- 
 tions have forced livestock men to sell their cattle for 
 slaughter, breeding herds along with the rest. In some 
 ranging states this condition has been an important factor 
 in causing the accumulation of surplus stocks of hay and 
 other feed. The $50,000,000 livestock pool and the Agri- 
 cultural Relief Bill were largely designed to remedy these 
 conditions. 
 
 Labor costs in agriculture and stock-raising have de- 
 clined steadily throughout the year, more rapidly in the 
 last six months than in the first. Comparatively little of 
 this reduction had taken place at the time crops were 
 planted, but the steady and material decline in the costs 
 of labor for cultivating and harvesting have effected a 
 great reduction in agricultural costs as a whole. 
 
 Farm implements and supplies have not declined in 
 cost at a rate comparable to the reduction in labor costs, 
 and whatever reduction in these items has taken place 
 has come in the last six months. Transportation costs 
 have not been reduced. 
 
 While the prices received by farmers and ranchers for 
 agricultural products and livestock have, of course, fallen 
 greatly in the last year, the decline in the last few months 
 has not been appreciable, and common opinion is that 
 natural products on the whole have dropped about as far 
 as they are going to drop, and in some cases are tending 
 to rebound. Retail prices of these basic products and of 
 commodities manufactured from them have fallen steadily 
 in the last year and in the last six months, but the rate 
 of decline has not been commensurate with that of the 
 prices paid to the farmers. 
 
Credits. 
 
 Throughout the country the demand for short-time 
 credits has decreased in the last year and in the last six 
 months. This lessened demand is ascribed in reports 
 received in this survey to two causes : 
 
 First, the lessened volume of business; and 
 
 Second, the increase in the value of the dollar. 
 
 The volume of credits carried by the banks of the 
 country, both liquid and non-liquid, still is greater than 
 normal, but has declined steadily during the last year 
 and during the last six months. The volume of "frozen 
 credits" in the country as a whole has decreased sub- 
 stantially in the last six months, although the reduction 
 in agricultural, metal mining and livestock regions has 
 not been as great as that in the industrial districts, and 
 "frozen credits" growing out of export loans have been 
 reduced very little. 
 
 Credits that remain non-liquid consist chiefly of those 
 extended before 1920 and believed, at the time they were 
 extended, to be liquid. Sharp depressions in some lines, 
 however, have "frozen" credits that were extended this 
 year. 
 
 Exports of finished goods, taken as a whole, have 
 declined steadily throughout the year. Very recently 
 exports of cotton and certain other agricultural products 
 have taken an upward turn. 
 
 The Nation's Business. 
 
 That is the picture of our situation today, drawn along 
 national lines. To take the place of the chart that 
 accompanied the first Economic Survey, I have prepared 
 and appended to this report brief summaries of condi- 
 tions in each of the states from which reports were re- 
 ceived. Broadly, this is what the reports show: 
 
 In the great cotton states of the South, in the agri- 
 cultural states of the Middle West and the West, in the 
 Western mining and cattle-raising states, in the lumber 
 producing regions of the Northwest and the Southeast, 
 there has been a great reduction in buying power conse- 
 quent upon a slackened demand for natural products and 
 a reduction in their value without a commensurate de- 
 crease in the prices of finished goods. 
 
 In the industrial regions of New England, the Middle 
 Atlantic states and the tier of states extending from the 
 Atlantic Ocean to the Great Lakes and the Mississippi 
 River there has been a reduction of production conse- 
 
quent upon reduced foreign purchasing and reduced buy- 
 ing by producers of natural products at home. 
 
 This reduction in the output of manufactured goods in 
 the industrial centers has thrown millions of men out of 
 employment and consequently has operated to reduce 
 further the national buying power. Thus increased con- 
 sumption of natural products is prevented, increased pur- 
 chasing by producers of natural products is prevented, 
 increased production of finished goods is prevented, in- 
 creased employment of labor is prevented, and the circle 
 revolves. 
 
 Jones, the farmer, millions strong, is not getting enough 
 for his crops to enable him to buy the farm implements 
 and clothes and shoes and other finished goods that he 
 and his family need and normally consume. Brown, the 
 cattle man, and Smith, the miner, are in the same fix. 
 Green, the manufacturer, cannot sell the quantity of goods 
 he normally produces, so he has cut down production. 
 And White, the laborer, is out of work and cannot buy 
 either the farm products or the finished goods that he and 
 his family normally use. 
 
 Changed Problems. 
 
 What has caused this situation? To understand it 
 clearly it is well to consider briefly the development of 
 production and consumption and marketing in the United 
 States since the nation's birth. 
 
 We have a country that in one hundred and fifty years 
 has spread from thirteen colonies crowded together on the 
 Atlantic seaboard until now it stretches broadly across a 
 great continent, possessed of great natural wealth, a highly 
 developed industrial structure, and one hundred and five 
 millions of highly intelligent people. 
 
 Steadily for one hundred and fifty years the United 
 States has expanded, territorially, industrially, economic- 
 ally. Except for the South in the years after the Civil 
 War, every part of the country has developed steadily, 
 increasing its productivity, increasing its marketing facili- 
 ties, increasing its common prosperity from year to year. 
 Farms have grown out of the wilderness. Towns have 
 sprung into cities and great industrial centers. Railroads 
 have been built across the country and up and down. 
 Products of one part of the country have been traded for 
 those of other parts and for foreign products in an intricate 
 system of exchange that, for all its complexity, and for 
 all the factors of finance and transportation and marketing 
 
and production that were involved in it, in normal times 
 operated exceedingly smoothly. 
 
 True, the progress of prosperity has been halted at 
 times. We had our period of readjustment after the Civil 
 War. We have had poor crop years, followed by financial 
 stringencies and temporary business depression. We had 
 the period of railroad receiverships. Several times some 
 parts of our economic machine have broken, and we have 
 had to stop to repair them. 
 
 But on the whole, before the great war, the country 
 moved steadily forward, unperplexed by any except in- 
 ternal problems, producing more and more each year, 
 always trading products for one another at home and 
 abroad, and never concerned very much with foreign 
 affairs that had no direct effect on the United States. 
 
 We continued along this line until the great war broke 
 out. Then the world began to call on this country to take 
 a larger part in world production and a larger part in 
 world affairs. New conditions changed the old ways for 
 all time. Our country has become the great creditor 
 nation of the world, the reservoir of the world's gold and 
 the world's credit ability. Our problems are no longer 
 merely problems caused by bad weather and poor crops 
 and domestic financial stringencies. They are international 
 and world problems. 
 
 If world influences in the process of readjustment 
 could be divorced from domestic influences this country 
 would not now be considering the problems of readjust- 
 ment; it would have solved them and would be walking 
 in the old path. But this could not and cannot be; world 
 influences now and henceforth must have a powerful bear- 
 ing even on the problems that in former years were 
 considered purely domestic. 
 
 Fundamental Principles. 
 
 Intelligent study and discussion of conditions in our 
 country today must be based upon full recognition of 
 these fundamental principles: 
 
 ; First : The world is recovering from the most serious 
 and far-reaching economic and social upheaval in modern 
 times, and the most essential element in the restoration of 
 stable conditions is time. 
 
 1 Second: The United States is economically so inter- 
 dependent with the rest of the world that it cannot have 
 full and permanent prosperity without world prosperity. 
 Third: While time is the most essential element in 
 the restoration of normal conditions, it lies within the 
 
 10 
 
power of men and governments to assist the operation of 
 natural economic forces working toward readjustment by 
 removing artificial obstructions from their path and by so 
 conducting their affairs that they move with those forces 
 instead of vainly trying to oppose them. 
 
 Fourth : The power of one man or one small group of 
 men to aid the curative work of natural economic forces 
 is small ; if the full power of men to improve conditions 
 is to be exercised it must be through the awakening of a 
 universal economic consciousness and through actions 
 guided by that consciousness. 
 
 Fifth : There is no panacea for the economic ills of 
 the time, nor can artificial measures hasten the restoration 
 of normal conditions. 
 
 [_Sixth : Delay in the removal of legislative restrictions 
 on business that may have been necessary in time of war, 
 but serve now only to hamper and to harass, is preventing 
 the operation of natural economic laws that are working 
 to restore stable conditions. 
 
 [Seventh : The natural functioning of natural laws, and 
 not artificial legislation, will remedy business conditions. 
 Legislation that seeks to bolster any element in our 
 economic structure by artificial means, or is prompted by 
 political exigency rather than by economic requirement, 
 cannot improve the situation, but in the long run must 
 result harmfully. 
 
 Eighth : The "normal conditions" toward which the 
 country is progressing are not necessarily the same as 
 those that existed before the war. 
 
 Three Prerequisites of Stability. 
 
 In the light of these principles should be considered the 
 three principal prerequisites of stability and prosperity, as 
 they have been clearly recognized and forcefully stated by 
 the men whose opinions have been consolidated in this 
 survey : 
 
 First: There must be re-established such a harmonious 
 relationship between prices and costs, and between prices 
 of natural products on one hand and finished goods and 
 services on the other, as will give to each group of pro- 
 ducers the purchasing power which means simply the 
 ability to trade to which its product is naturally entitled. 
 
 Second : There must be a restoration of social, finan- 
 cial and economic order and stability in the nations of the 
 old world that were disrupted by the war. They must 
 reconstruct their productive machinery and restore the 
 wealth that was wasted and destroyed in the war, so that 
 
 11 
 
the normal exchange of products of one country for those 
 of another the normal international trade relations may 
 be resumed. 
 
 Third: When economic, financial and social stability 
 abroad shall have been restored, the United States must 
 find in those stabilized foreign countries markets for the 
 excess products of her farms and her forests, her mines 
 and her factories. 
 
 The simple fact is that the farmers and other producers 
 of raw materials do not receive enough for their products 
 to enable them to buy, at prevailing prices of manufactured 
 goods, the finished products that they need and normally 
 buy. In other words, the reduction in the price of fin- 
 ished goods has not been commensurate with the decline 
 in the price of natural products, and the purchasing power 
 of the farmer, the miner, the livestock man and the lumber 
 producer therefore has been greatly reduced. 
 
 Domestic Problems. 
 
 This survey has shown that the movement toward a 
 proper and equitable relationship between the prices of 
 natural products and finished goods, while slow 'and in 
 some cases erratic, nevertheless on the whole has pro- 
 ceeded steadily during the last year, and at an accelerated 
 rate during the last six months. The reports that I have 
 received have also shown that the three great domestic 
 influences that more than all others are retarding this 
 readjustment of prices and costs are these : 
 
 First: The delayed adjustment of the cost of labor, 
 which prevents adequate reduction of the prices of the 
 innumerable commodities and services in the cost of which 
 the cost of labor is the most important factor, and also 
 serves to prevent full employment of labor. This is due 
 both to slow adjustment of the compensation of labor and 
 to the continuation of shop rules that impair its efficiency. 
 
 Second : The sustained high costs of transportation, 
 which prevent the natural and normal movement of com- 
 modities of all kinds to market and operate to reduce the 
 net return for natural products at the same time that they 
 increase the costs and therefore the prices of finished 
 goods. 
 
 Third : The continuation of an unsound system of tax- 
 ation that diverts working capital from its proper channels 
 and thereby prevents the accumulation of working capital 
 that is necessary for increased production, for the installa- 
 tion of improved methods of production, and for full em- 
 ployment of labor. 
 
 12 
 
Common opinion, as it is expressed in the hundreds of 
 reports that make up this survey, is that when these three 
 deterrent influences have been eliminated the chief ob- 
 stacles to a restoration of a proper and equitable price 
 equilibrium will have been removed, trading between one 
 group of producers and the others will proceed naturally, 
 and labor and capital will be more fully employed in pro- 
 ductive enterprise. 
 
 The Railway Situation. 
 
 Whenever men get together and discuss the railway 
 situation, the question most frequently asked is this: 
 "When are railroad rates going to come down?" 
 
 Instead of that question, these might better be asked: 
 
 "When is the Government going to recognize the im- 
 portance of making the financial settlements to which the 
 railways are entitled? 
 
 "When is the policy of 'less Government in business' 
 going to be applied to the railways, which have suffered 
 more than any other industry from the effects of too much 
 Government in business? 
 
 "When are the labor costs that are the most important 
 factor in the costs of railway operation going to be ad- 
 justed to a point in keeping with the common reduction 
 in values of services, and when are shop rules that prevent 
 railway employes from giving full value for their wages 
 going to be eliminated?" 
 
 Upon the answers to these last three questions depends 
 the answer to the first. As long as the Government delays 
 the enactment of the railway relief legislation that com- 
 mon sense demands; just as long as the Government con- 
 tinues to control the operations of the railways in vital 
 respects, and just as long as the cost of railway labor 
 remains out of line with the common price tendency just 
 so long will it be before railroad rates come down. 
 
 In effect, this is what the Government said when it 
 took over the railways: 
 
 "The exigencies of war require that control of your 
 properties be centralized in the Government. The Inter- 
 state Commerce Commission says they are worth $18,900,- 
 000,000. Your average earnings in the last three years 
 have been $900,000,000 a year, and we shall guarantee to 
 you an annual return of that amount. The managers 
 whom we place in control of your properties will see that 
 they are properly maintained. From time to time we may 
 find it necessary or desirable to make certain additions or 
 betterments, and we shall do so at your expense. When 
 
 13 
 
the time comes we will do the fair thing in the way of 
 adjustments." 
 
 That was the understanding. The Government owes 
 the roads hundreds of millions of dollars, and Congress is 
 hesitating about paying the debt. The roads owe the 
 Government millions of dollars on account of additions 
 and betterments made during the period of Federal con- 
 trol, and in some quarters there is apparent a desire, based 
 on the assumption that capital expenditures should 
 be absorbed by current income, to offset the debt 
 of the roads to the Government against the Government's 
 debt to the roads. 
 
 The effects of withholding the payments to which the 
 railways are entitled are manifest. Many roads are forced 
 to borrow at high rates of interest to meet their current 
 expenses ; others must purchase supplies and equipment on 
 credit extended by the manufacturers, and very few have 
 been able to accumulate a sufficient surplus of working 
 capital to make necessary repairs and replacements. 
 
 The result has been unnecessarily to tie up huge 
 amounts of credits at a time when the banks of the coun- 
 try and business generally can ill afford to carry such an 
 additional burden. It has made it impossible for the roads 
 to make needed repairs, and has deprived thousands of 
 men of employment. There can be no doubt that the 
 employment of these men at this time would give an 
 impetus to business that would be reflected in greater 
 consumption, greater production, and a greater volume of 
 railway traffic. And it has been the experience of rail- 
 roading in this country that when the volume of traffic 
 increases rates decrease. 
 
 Railway Wages. 
 
 And while it has delayed paying its debts to the rail- 
 ways, the Government has continued to impose many 
 restrictions that take away from the railway management 
 the freedom of action that is necessary for efficient opera- 
 tion of any business. When the Government turned back 
 the railways to their owners it handed to them also the 
 burden of enormous wage increases that had been made 
 during the period of Federal operation. The Government 
 retained the Railroad Labor Board, a cost-determining 
 agency entirely divorced from the Interstate Commerce 
 Commission, the rate-fixing body. 
 
 After steadily rising for several years, railway wages 
 were reduced 12 per cent last July. Compared with the 
 decrease in the value of the commodities that the roads 
 
 14 
 
carry, that decrease is very small, and does not permit the 
 reduction of rates to a point in keeping with the lower 
 level of other services and commodities. 
 
 The common depression of trade, of which railway 
 rates are one of the causes, has reduced the volume of 
 railway traffic so considerably that a short time ago 25 to 
 30 per cent of railway workers were out of employment. 
 As the element in purchasing power is total wages and 
 not rates of wages, railway employes have therefore 
 already suffered the reduction in purchasing power which 
 they have been resisting. 
 
 What is true of railroad labor is true also of labor as a 
 whole. Attempts to maintain wage scales based on prices 
 and values that no longer exist cannot be permanently suc- 
 cessful, but while they continue they cannot do otherwise 
 than work injury to industry, to a very large part of the 
 employes themselves, and to the entire public. 
 
 Compensation of Labor. 
 
 I have received reports in this survey of groups of 
 workmen that have recognized that their full employment 
 depended upon reasonable compensation for their labor 
 and have voluntarily accepted wage reductions. This is 
 true notably of farm labor, of workmen in the metal 
 mines, and in some instances of men in manufacturing 
 industries, who have either accepted wage cuts or have 
 agreed voluntarily to work longer hours for the same 
 wage per day. 
 
 The common tendency, however, has been to resist 
 wage reductions, and it has been based on a natural un- 
 willingness to relinquish the "higher standard of living" 
 that inflated wages are supposed to have established, and 
 on the argument that the cost of living must come down 
 before wage rates can come down. 
 
 With regard to the first point, the position of labor is 
 fundamentally the same as that which for a long time 
 prompted some farmers to withhold their crops from 
 market because they believed prices would recover. It 
 is the same as the reasoning that made some retailers and 
 some manufacturers resist for many months the demand 
 for lower prices. 
 
 When those farmers found they could not sell at the 
 prices they wanted, they sold at the prices they could get ; 
 to a lesser degree the manufacturers and retailers marked 
 down their prices to a point nearer to that which the 
 public was able to pay. So it must naturally be with 
 labor. 
 
 15 
 
It is becoming more and more evident to labor, as 
 well as to the public in general, that labor cannot find 
 full employment at the wages it wants, and must accept 
 work at a wage proportionate to the value of the goods 
 it produces and in keeping with the average level of 
 values. 
 
 Wages are an integral and inseparable factor in the 
 cost of living, and both the common good and economic 
 law require that they come down together. Labor 
 occupies the dual position of producer and consumer, and 
 disproportionate rates of wages therefore have a double 
 effect upon labor itself: 
 
 First: They are a factor in causing unemployment, 
 and thereby reduce the consuming power of a large part 
 of labor. 
 
 Second: They keep up the prices of finished goods, 
 and thereby reduce the purchasing power of all labor, 
 employed or unemployed. 
 
 A general reduction in so important a factor in the 
 costs of production as the wages of labor could not fail 
 to bring about a corresponding decline in the costs of 
 manufactured goods. The purchasing power of the farm- 
 ers would be increased, workmen would find more employ- 
 ment, the cost of living would come down, and all business 
 would receive an impetus that would carry us far toward 
 normal conditions. Labor's standard of living would not 
 be impaired. 
 
 A notable example of the effects of disproportionately 
 high rates of wages is found in the building situation. A 
 shortage of hundreds of thousands of homes exists in the 
 United States. For social as well as economic reasons 
 relief from this shortage is necessary, but in spite of this 
 great need for new dwellings and in spite of the readiness 
 of hundreds of thousands of persons to build houses as 
 soon as the cost of construction resumes its proper rela- 
 tionship to other values and prices, a large percentage of 
 workmen in the building trades remain idle rather than 
 accept a reduction in the wage rate. 
 
 Wage rates are of course not the only factors that 
 require adjustment. Shop rules that impair the efficiency 
 of labor by restricting its output and increase the cost of 
 production in industry are an important influence working 
 to keep up the prices of finished goods. 
 
 The Excess Profits Tax. 
 
 The hundreds of well-informed and experienced men 
 throughout the country whose opinions I asked in prepar- 
 
 16 
 
ing the First Economic Survey that was made last spring 
 were almost unanimous in their condemnation of the 
 excess profits tax, and in this Second Survey it has been 
 shown that as the disastrous effects of the tax have been 
 more and more widely felt the protest against its continu- 
 ation is even more emphatic. 
 
 It is difficult to understand why, for the sake of raising 
 a relatively small amount of revenue, Congress should 
 disregard a promise that amounted almost to a party 
 pledge, the recommendations of the President and the 
 Secretary of the Treasury and the demands of public 
 opinion, and consider legislation that would continue this 
 universally harmful tax a year longer than is necessary. 
 
 The tax is actually not a tax on prcrfits, but a confisca- 
 tion of working capital. It is apparent to everyone who 
 has observed its operation that it impairs the working 
 capital of the country and makes impossible that full 
 development of productive enterprise which is essential to 
 reasonable and equitable prices and full employment of 
 labor. 
 
 The tax helps to maintain the higher cost of finished 
 products as compared with those of farm products and 
 raw materials. It restricts the volume of manufactured 
 goods that can profitably be made and sold, and therefore 
 it becomes another very potent cause of unemployment. 
 
 These three great obstacles to readjustment the rail- 
 way situation, the slow adjustment of the compensation 
 of labor and the continued enforcement of shop rules that 
 impair its efficiency, and the continuation of the excess 
 profits tax vary in importance, but the injury they work 
 is so widespread and they are so alike in their manifesta- 
 tions that a discussion of the effects of one parallels to a 
 large extent a discussion of the effects of the others. 
 
 Progress of Readjustment. 
 
 But in spite of these problems the process of readjust- 
 ment is going on, and there have been undeniable signs 
 of at least a modicum of improvement in the last few 
 months. Domestically, we are setting our house in order 
 and approaching the day when the restoration of normal 
 consuming power shall carry with it a return of normal 
 production, normal consumption and full employment of 
 labor. 
 
 The people of the United States need food, fuel, cloth- 
 ing, shelter, transportation, and many other commodities 
 and services that, with the social development of the 
 population, have come to be necessaries of life. It would 
 
 17 
 
be fantastic to assume that the maladjustments resulting 
 from the war would permanently lower the consuming 
 power of the people and the demand for these necessaries. 
 Every step in the process of readjustment is doing its bit 
 to restore the normal volume of purchasing power to the 
 entire people, and in the nature of things there is no room 
 for anything but confidence in the gradual improvement of 
 business. 
 
 In the extent of its recovery from the world-wide 
 stagnation that grew out of the waste and destruction of 
 w r ar the United States has fared better than any other 
 belligerent nation. It is free from the social disturbances 
 that stand in the way of restoration of stability in many 
 other countries. Its money has escaped the demoralizing 
 depreciation that the currencies of other nations have 
 suffered. Despite its own indebtedness it has become pre- 
 eminently the creditor nation of the world, while other 
 countries have accumulated huge national debts. Its loss 
 of man power resulting from the war has been small as 
 compared to the losses of other nations. There is room 
 within its borders for a greatly increased population and 
 there are almost unlimited sources of wealth to support 
 that population. 
 
 World Conditions and Our Production. 
 
 The United States is fortunate in the rapidity of its 
 recovery, but at the same time it is unfortunate in the 
 comparative slowness of the recovery of other nations. 
 The enhanced value of the dollar abroad may be a matter 
 for pride, but it is also an influence that makes it impos- 
 sible for the war-stricken foreign countries that are 
 struggling to restore their full productive powers to buy 
 and to pay for the quantities of American raw materials 
 and finished goods which they naturally would absorb. 
 
 Reports received in this survey show that as surplus 
 stocks of necessaries abroad are consumed, as European 
 conditions gradually improve, and as readjustment at 
 home proceeds, the value of exports of foodstuffs and 
 cotton is gradually increasing, and the partial restoration 
 of foreign markets undoubtedly has been a very potent 
 force in checking the decline of the prices of natural 
 products. 
 
 It has reacted to improve somewhat the condition of 
 the farmer, helping him to liquidate his products, and so 
 has been an influence tending to work an improvement in 
 business as a whole. The effect of the increase in the 
 volume of exports of foodstuffs illustrates very well the 
 
 18 
 
importance of foreign markets and their influence on 
 domestic prosperity. 
 
 The United States produces more than it consumes, 
 and it is essential to our full prosperity that our excess 
 production be absorbed in the markets of the world. And 
 upon the United States, as the pre-eminent creditor nation 
 of the world, rests a large part of the responsibility for 
 creating financial machinery that will help to restore 
 foreign markets for our goods. 
 
 There is nothing in either the domestic or the foreign 
 situation to give rise to the pessimistic conclusion that 
 the world is riding straight to ruin. Rational examination 
 of our condition today must prove to the greatest doubter 
 that our problems are but the natural manifestations of a 
 world-wide maladjustment that great natural forces are 
 working to remedy. 
 
 We can serve our interest best if, instead of cowering 
 in pessimistic fear or going to the other extreme and 
 preaching that everything will be all right if we think it 
 is all right, we recognize the facts, face them honestly 
 and courageously, and consider how we may best support 
 the forces that are operating to restore stable conditions. 
 
 False Gods. 
 
 Three influences whose effects have become more 
 pronounced in the last year have served more than all 
 others to obscure the facts, and, by obscuring them, to 
 prevent the proper functioning of that intelligent, united, 
 co-operative effort that is necessary to be made by the 
 American people if we are going to exercise our full 
 power to help in the solution of our problems. 
 
 The first is the mistaken idea that the process of 
 readjustment is a struggle between groups of producers, 
 and that each group is capable of improving its own condi- 
 tion at the expense of the others and is striving to attain 
 prosperity by keeping the other fellow down. 
 
 The second is the mistaken idea that legislation can 
 deflect the operation of economic laws so as to benefit 
 particular groups, and the tendency to let the enactment 
 of legislation be guided by political expediency rather 
 than by sound economic requirements. 
 
 The third is the tendency to coin slogans and catch- 
 phrases and to substitute them for sound reasoning, 
 preaching that they describe economic conditions and 
 pretending that they express fundamental economic forces 
 and movements which in the nature of things they cannot 
 express. These slogans serve only to obscure the vision 
 
 19 
 
and befog the reason, and their effects are evident in 
 antagonisms between producing groups that in the end 
 can only work to the common injury. 
 
 "Buyers' strike" has been a catch-phrase of the year. 
 It is popularly understood to mean that millions of people 
 in the United States are showing their displeasure at re- 
 tailers by refusing to buy, designing to force prices down 
 by their refusal to purchase commodities that they need. 
 It is as if some pervasive power had suddenly acted upon 
 the minds of millions of people, customers of retail stores, 
 and directed them not to buy. 
 
 Of course the phenomenon that resulted in reduced 
 purchasing was not a "buyers' strike" in any way. It was 
 not that the people did not want to buy; it was simply 
 that war-time prosperity was at an end, values were being 
 reduced, and people did not have the money to buy. 
 Nevertheless the phrase "buyers' strike" could not fail to 
 create a certain mistrust of and antagonism to retailers as 
 a group and the retailers themselves could not help looking 
 for the mysterious power that had caused the supposed 
 "strike." The natural tendency to personify forces made 
 the retailers believe some powerful "they" had caused it. 
 And not long ago some of them discovered who "they" 
 were; and in national publicity charged that the banks 
 had advised the people not to buy! 
 
 Thus the wide and thoughtless, not to say malicious, 
 use of one little phrase has created at least a measure of 
 antagonism in and toward three groups the retailers, the 
 banks and the entire consuming public. 
 
 We need look no farther than the halls of Congress 
 for illustrations of the mistaken ideas that this is a 
 struggle between groups and that legislation can change 
 the course of economic laws so as to help one class at 
 the same time as it injures others. 
 
 Intelligent and informed public opinion is aware of the 
 widespread harm that is done by the continuation of the 
 excess profits tax. The President is aware of it, the 
 Secretary of the Treasury is aware of it, and experts in 
 the Treasury Department are aware of it. And public 
 opinion and official advice demanded the retroactive repeal 
 of the tax, so that its harmful effects might end with the 
 year 1921, and not go on through the year 1922. 
 
 Uneconomic Legislation and Its Effect. 
 
 There exists in Congress, however, a group known as 
 "the agricultural bloc." It was organized to serve the 
 best interests of the farmer. This bloc is convinced, or 
 
 20 
 
at least asserts it is convinced, that the excess profits tax 
 is a just tax that places upon corporations their proper 
 share of the tax burden; that it does not hurt anybody in 
 particular or business in general, and that efforts to re- 
 peal it are an attempt to "put one over" on the farmer 
 whose interests it is the bloc's purpose to guard. 
 
 The agricultural bloc has turned deaf ears to the 
 arguments that the excess profits tax actually is not a 
 tax at all, but a confiscation of working capital ; that by 
 impairing capital it prevents that full development of 
 productive enterprise which is essential to reasonable and 
 equitable prices of manufactured goods and to full em- 
 ployment of labor; that by keeping up the costs of 
 production of manufactured goods it is restricting the 
 purchasing power of the farmers; that by restricting the 
 purchasing power of the farmers it is restricting the 
 volume of finished goods that profitably can be made and 
 sold ; that by restricting manufacturing it is restricting 
 employment-; and that by restricting employment it is 
 restricting the markets for the farmer's products. 
 
 These arguments have been iterated and reiterated until 
 all the members of the agricultural bloc must be aware of 
 them, and they have not been controverted. There were, 
 indeed, members of the Senate and House committees that 
 considered the tax bill who favored the repeal of the 
 excess profits tax so as to make it effective as of January 
 1, 1921. But "to prevent friction in the ranks," to use the 
 words of a member of the Senate committee, the com- 
 mittee gave way to the House and to the agricultural 
 bloc, and has recommended that a measure that must re- 
 sult in the infliction of higher prices for finished goods, 
 reduced purchasing power for the farmer, and a restricted 
 market for farm products be continued for a year longer 
 than is necessary. Thus, if the tax is continued another 
 year, the agricultural bloc will have defeated the very 
 purpose for which it was formed. 
 
 It is acts and policies like these that do more than 
 anything else to prevent the restoration of stable condi- 
 tions and common prosperity. It is this pitting of produc- 
 ing groups against groups, this following of delusive 
 standards, this shouting of misleading slogans, that pre- 
 vents the unified and co-operative effort of the entire 
 people of the country toward the common good. 
 
 21 
 
Action Based On the Facts. 
 
 In this survey I have tried to give you the facts as I 
 have learned them from the reports of bankers and others 
 in all parts of the country who are in close touch with 
 business of all kinds. I have tried to picture the progress 
 of readjustment and to outline the influences that are 
 retarding it. 
 
 But knowledge of the facts means nothing unless it is 
 made the basis for action. And our immediate concern 
 should be this: How can the American Bankers' Associa- 
 tion, with its 24,000 members in thousands of communities 
 in the United States, consolidate its strength and unify 
 its efforts so as to make the banking system of the 
 country an effective agent in the restoration of normal 
 conditions and common prosperity? 
 
 The intensely democratic development of the American 
 banking system has been such that we have not, as they 
 have in Europe, a banking strength consolidated in a few 
 large institutions, each with its branches spread among all 
 the communities of the nation. Fortunately or unfor- 
 tunately, the strength of our banks does not lie in the 
 hands of a few men, capable by their actions of exercising 
 a powerful and unified influence on financial and economic 
 affairs of the country. 
 
 We have instead a banking system that consists of 
 nearly 32,000 independent units dotted over an area of 
 more than three million square miles and operating under 
 half a hundred different systems of banking laws. These 
 32,000 banks range in strength from a few thousands of 
 dollars to a billion dollars, and nearly 24,000 of them, 
 representing fully 90 per cent of the banking strength of 
 the entire system, are included in the American Bankers' 
 Association. 
 
 As society has progressed through the period of barter 
 to present-day systems of currency, credit and exchange, 
 banking has become a more and more important factor in 
 the economic life of nations, and today it is so fundamental 
 a need that without it our whole economic structure would 
 break down. 
 
 Growth of Bankers' Responsibilities. 
 
 The increasing importance of the banking system has 
 carried with it a corresponding increase in the public 
 responsibilities of men engaged in banking. It is no longer 
 sufficient for them to stand behind the counter and make 
 loans and receive deposits. Be his bank a $50,000 bank 
 
 22 
 
or a $1,000,000 bank or a $1,000,000,000 bank, be the com- 
 munity in which it is situated ever so small or ever so 
 large, every banker in this country owes to that com- 
 munity a duty of economic education and economic lead- 
 ership that he must discharge in his own interest as well 
 as in the public interest. 
 
 The question is, how are we as bankers going to 
 discharge that responsibility? How are we going to get 
 that unified action that is necessary to make the force and 
 power of our banking system fully effective? 
 
 It is not enough to have 32,000 banks in widely sep- 
 arated communities working, each alone and each along 
 its own lines, ignorant of the thoughts of the thousands of 
 other bankers, ignorant perhaps of the direction which 
 their efforts are taking. To become fully effective, the 
 latent power for public good that lies in the 32,000 bank- 
 ing units must be united in a common policy and a 
 common effort that will find expression both in group 
 action and individual action. 
 
 We have today all the necessary media through which 
 the banking strength of the country may be consolidated 
 and made a great force in active economic leadership. 
 We have the American Bankers' Association, in which 
 the national strength of the banks is represented. We 
 have the various state associations, each with its intensive 
 machinery well equipped and ready for use in creating a 
 union of banking thought and action. We have the 
 State Secretaries' Section, establishing a contact between 
 the national organization and the state organizations 
 and thus between all the bankers of the country. 
 
 We have our commissions and committees, our sections 
 and divisions, our Executive Council meetings three times 
 a year and our convention once a year. All these agencies 
 are constantly giving careful consideration to the problems 
 that arise from time to time and to means of solving them. 
 They can work out policies, but they cannot put them into 
 effect. That can be done only by all the banks of the 
 country. 
 
 The Bankers' Opportunities. 
 
 Merely to indicate the possibilities that lie within our 
 bankers' associations, I want to say that in the last year I 
 have three times tried to make use of the unified banking 
 strength of the country in efforts of a public character. 
 Twice I have called on the banks, in connection with the 
 First Economic Survey and again in connection with this 
 Second Survey, to provide accurate information from which 
 
 23 
 
a country-wide picture of business conditions might be 
 prepared, so that facts on which to base action might be 
 obtained. 
 
 Both times the response was instant. The banks of 
 the country, recognizing the effort of public service that 
 was intended and in which they were asked to assist, gave 
 their best judgment and opinions in answers to question- 
 naires and in discussions of conditions in their communities. 
 
 Within the last six weeks I have asked the banks of 
 the country to join in a common effort to bring about the 
 repeal of the disastrous excess profits tax. The response 
 was again instant and country-wide, and the unified bank- 
 ing strength of the country expressed itself. Whether this 
 initial effort to consolidate the influence of the banks has 
 been or will be successful is immaterial ; the point is that 
 the banks have joined in a public effort ; the way has been 
 pointed; an indication of the possibilities that lie in union 
 of thought and action has been had, and we should now 
 press forward to exercise the full influence of our united 
 strength. 
 
 There has always been in this association an aversion 
 to going into "politics." If by "politics" is meant "par- 
 tisan politics," of course the aversion is well founded. 
 But in the larger sense of the word, in the sense of "the 
 science of government," there is no matter with which 
 the banks of the country might better concern themselves. 
 
 This great American Bankers Association should have 
 an eye always not to class welfare, but to the economic and 
 financial welfare of the entire people. We should go into 
 politics with the purpose of being helpful, of placing such 
 facts as we may be able to gather at the disposal of legis- 
 lative bodies, and of having them make such use as they 
 may wish of the information we provide, for upon them 
 rest the primary responsibilities of government. 
 
 The banks can have no greater duty than that of 
 acquainting the people and the legislative bodies of the 
 country with the facts, of guiding their own actions and 
 public actions as far as possible in the light of sane 
 consideration of those facts, of dispelling mistaken ideas 
 that any measure of prosperity can come to any class out 
 of class antagonisms, of preventing as far as possible by 
 educational methods the enactment of laws through polit- 
 ical expediency rather than for sound economic reasons. 
 
 And they can discharge that duty best not by sporadic 
 individual action, but by a community of action through 
 the medium of this, their great association. 
 
 24 
 
Conclusion. 
 
 In closing, it is well to say that there is nothing in 
 our domestic situation nor in the international situation 
 that can sustain a pessimistic outlook or a despondent 
 view that the world has sunk into permanent depression. 
 
 Gradually influences preventing the restoration of stable 
 conditions are disappearing. As prices move toward sta- 
 bility on an equitable basis the full purchasing power that 
 is a necessary prerequisite of normal prosperity is being 
 recovered. Steadily, as social and political conditions 
 abroad improve, the wealth wasted in war is being replaced 
 and foreign countries are working to rebuild the productive 
 capacity that measures their ability to consume, and as 
 foreign production increases world markets for American 
 goods are being reopened. 
 
 It is true that many problems, both domestic and 
 foreign, are standing in the way of a restoration of stable 
 conditions and normal domestic and world prosperity. 
 But the forces that are working to solve these problems 
 are irresistible. 
 
 If we face conditions as they are; if we consider our 
 situation in the light of sound fundamental economic 
 laws ; if we realize that our problems are but the natural 
 and necessary results of the world-wide disturbances at- 
 tendant upon the war; if we recognize that time after all 
 is the greatest healer ; if we do riot seek vainly to obstruct 
 natural forces by artificial measures designed to serve as 
 panaceas or palliatives; if we as bankers and as an 
 association use to the fullest degree our power to create 
 an enlightened public opinion and to awaken and direct 
 an economic consciousness that will wipe out producing 
 group antagonisms and political expediencies and bring 
 the country to work sanely, intelligently and in union 
 with the great economic forces that are operating to re- 
 store normal conditions and normal prosperity then we 
 need not fear the future, but may face it confidently 
 and may be sure that it holds no difficulties that we cannot 
 overcome. 
 
 25 
 
The Trend of Readjustment 
 
 as reported by 
 The Banks of the United States 
 
 The following brief summaries of conditions in the 
 various states are based upon answers to the question- 
 naire used in this Second Economic Survey and represent 
 the opinions and the best judgment of the bankers and a 
 number of men representative of the industries of those 
 states, as expressed both in the answers and in the com- 
 ments that accompanied them. 
 
 The statements contained in these summaries are not 
 intended to be statistically exact, and no attempt has been 
 made to use statistics compiled by various federal, state 
 and private agencies. Wherever percentages are used 
 they are approximate, indicating, however, as close an 
 estimate as could be obtained by the reporting bank after 
 careful observation. These reviews will accomplish the 
 purpose for which they are intended if they present a 
 broad picture of the trend of readjustment in the various 
 states. 
 
 The purpose in giving the rural and urban popula- 
 tion in each state is to give a definite idea of how large 
 a part of the population has been primarily affected by 
 the reduced purchasing power incident to the common de- 
 cline in the value of natural products. 
 
 Irregular changes in values have made it impossible 
 to determine exactly the relative financial importance of 
 either the manufactured or the natural products of a 
 given state, and for that reason no attempt is made to 
 list these products in the order of their value. Only the 
 more important products of each state are listed. 
 
 Statements in these summaries which are enclosed in 
 quotation marks are taken verbatim from reports received 
 in making this survey. 
 
 27 
 
ALABAMA 
 
 Population 
 
 Rural, 1,839,857 
 Urban, 509,317 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Cotton goods 
 
 b. Lumber products 
 
 c. Iron and steel products 
 
 d. Cottonseed oil and cake 
 
 Production of iron and steel, iron and steel products, 
 cotton goods and finished lumber in Alabama suffered a 
 60 per cent decline in the six months following the sharp 
 break in business last year, but the decline was checked 
 a few months ago and recently an improvement has been 
 noticeable. While there is a surplus of pig iron, coal by- 
 products and cotton and steel products in the hands of 
 manufacturers, the surplus has been reduced about ten 
 per cent in the last six months. 
 
 Manufacturing costs have decreased about one-fourth 
 in the last year, the greater part of the drop coming since 
 spring. Labor, material and construction costs have 
 decreased measurably in the order named, while interest 
 rates have dropped a little. There has been no decline in 
 taxation nor the cost of transportation. Average whole- 
 sale prices of manufactured goods produced in Alabama 
 dropped steadily throughout the last twelve months. Re- 
 tail prices of these goods showed an average decline of 
 25 per cent in the first six months and of 10 per cent in 
 the second six months. 
 
 There has been a decrease in the production of coal, cot- 
 ton, fruits and vegetables, cattle, hogs, sheep and hay 
 the principal natural products of the state and an in- 
 crease of 25 to 50 per cent in the production of corn, 
 which in many parts of the state was planted in acreage 
 formerly devoted to cotton. 
 
 On September 7 the price of cotton, of course the great 
 product of the state, was 80 per cent above the low point 
 it had reached six months before, and this increase was 
 being felt in a noticeable recovery of business. Improved 
 conditions in the last few months have been reflected in a 
 
 28 
 
greater demand for short-time credits, the volume of 
 which, however, was less at the end of September than 
 at the end of the same month in 1920. Country banks are 
 carrying a large volume of "frozen credits" on cotton, 
 lumber and coal. Opinion is, however, that sufficient 
 credit is available to take care of normal production. 
 
 Foreign sales of raw materials and manufactured goods 
 have been increased in the last six months "through the 
 organization of export corporations and the willingness of 
 strong financial concerns to back legitimate exports of 
 cotton and lumber." 
 
 ARIZONA 
 
 Population 
 Rural, 216,376 
 Urban, 117,527 
 
 PRODUCTS 
 Natural 
 
 a. Copper and other metals 
 
 b. Livestock 
 
 c. Cotton 
 
 d. Hay and grain 
 
 Southeastern Arizona is a section devoted largely to 
 copper, silver, gold and lead mining and to raising cattle. 
 At the end of August virtually no metals were being pro- 
 duced, but there had been no noticeable decline from a year 
 ago in cattle raising. Six months ago production of metals 
 was about one-half of normal. Considerable surpluses of 
 copper, lead and cattle are in the hands of the producers, 
 although in the last six months there has been a small reduc- 
 tion in copper stores. 
 
 There have been pronounced decreases in the cost of mine 
 labor and supplies, which have been offset to some extent by 
 increases in taxation. Copper could be produced now at a 
 cost 25 per cent lower than that of a year ago. Prices of 
 both copper and cattle have fallen sharply from the peak, 
 but the percentage of decrease in the last six months has 
 been less than that in the first six. 
 
 The volume of liquid credits carried by the banks has 
 decreased steadily for a year, but the demoralization of the 
 mining industries has resulted in an increase in the volume 
 of "frozen credits", most of which, however, consist of 
 loans extended in 1920. The feeling is that railroad rates 
 
 29 
 
and taxes are operating to keep the mines closed. The cost 
 of labor in this district has been adjusted. Increases in 
 foreign sales have been inconsiderable. 
 
 Southwestern Arizona is largely agricultural, producing 
 long and short staple cotton, alfalfa seed, hay and grain. 
 There has been a considerable reduction in the output of 
 cotton, but some increase in hay. The surplus of cotton that 
 existed a year ago has been reduced 75 per cent. Agricul- 
 tural costs are 50 per cent less than they were a year ago. 
 
 The demand for short-time commercial credits, while not 
 so great as it was a year ago, is greater than it was six 
 months ago. An indication of improved conditions is 
 found in the fact that while last year the banks had to 
 carry the alfalfa seed crop, this year's crop was sold. 
 
 In this part of the state "frozen credits," consisting 
 chiefly of those extended in 1920, have decreased, but the feel- 
 ing is that liquidation has not progressed to a point at which 
 sufficient credit exists to take care of normal production. 
 Railway rates and the comparatively slow decline in the 
 prices of finished goods are considered to be the principal 
 influences working against the farmers in this part of Ari- 
 zona. Encouragement is found in the recent upward turn in 
 cotton prices and steady improvement is expected in the next 
 year. 
 
 Conditions throughout the state correspond to those in 
 the southwestern and southeastern parts, as Arizona, except 
 for a few small manufactories, is entirely an agricultural, 
 mining and livestock-raising state. 
 
 ARKANSAS 
 
 Population 
 
 Rural, 1,461,707 
 Urban, 290,497 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Lumber products a. Cotton 
 
 b. Cotton-seed oil and cake b. Corn 
 
 c. Lumber 
 
 d. Livestock 
 
 A great reduction in the output of cotton and lumber 
 produced in Arkansas has been the natural consequence 
 of a lessened demand for these commodities. Considerable 
 surpluses of these two products are held in the state. 
 
 30 
 
Except for the output of a few industries of comparatively 
 small importance, the state produces none but natural 
 products. 
 
 The cost of production has been reduced considerably, 
 the principal decline taking place in labor and materials. 
 Cotton acreage throughout the state has been reduced 
 25 to 30 per cent, and fields formerly planted to cotton 
 have been planted to corn and other food and feed crops. 
 Corn now ranks as the second crop of the state. 
 
 Foreign sales of natural products have decreased in the 
 last year, and at a lesser rate in the last six months. 
 "Inasmuch as a large part of our production is exported, 
 we think the general demoralization of Europe is one of 
 the conditions holding back the readjustment of prices." 
 
 Demand for short-time commercial credits has de- 
 creased, but the volume of "frozen credits" remains large. 
 Production of finished lumber has decreased 35 per cent in 
 the last year ; of coal, zinc and bauxite 30 per cent, and of 
 manganese 60 per cent. Conditions in these industries in 
 the last six months, however, have shown some improve- 
 ment. 
 
 A measurable decline in costs of agricultural produc- 
 tion has taken place in the last year. Manufacture of 
 wood products has increased about 25 per cent in the last 
 six months. 
 
 CALIFORNIA 
 
 Population 
 
 Rural, 1,095,132 
 Urban, 2,331,729 
 
 PRODUCTS 
 
 Manufactured Natural 
 
 a. Canned Goods a. Fruits and vegetables 
 
 b. Petroleum products b. Petroleum 
 
 c. Iron and steel products c. Grains 
 
 d. Building materials d. Minerals 
 
 e. Flour e. Livestock 
 
 f. Lumber 
 
 Throughout California the volume of manufacturing, 
 although less than it was at the peak, is greater than it 
 was six months ago, except in the metal trades, shipbuild- 
 ing and oil refining. The considerable surplus of finished 
 goods that existed a year ago has been largely reduced to 
 
 31 
 
normal size, except in the case of canned goods and build- 
 ing materials. Costs of production have decreased ^as far 
 as labor and materials are concerned, but there has been 
 little decline in construction costs, and none in taxation 
 nor transportation. There has been a general decrease in 
 the wholesale prices of manufactured goods, the rate of 
 decline being more rapid in the last six months. 
 
 Natural products in the northern part of the state, 
 consisting largely of hay, fruit, grains, oil, cattle and 
 sheep, lumber and minerals, are produced on the average 
 in quantities very little, if any, below those of a year ago. 
 Surpluses of some fruits, wool, beans, rice and oil exist, 
 but they are less than they were a year ago and less 
 than they were six months ago. The costs of production 
 are 20 to 30 per cent below those of a year ago, the prin- 
 cipal decline coming in the last six months. Wholesale 
 prices of natural products, which are far below prices a 
 year ago, have declined very little in the last six months. 
 
 The demand for short-time credits is less than it was 
 a year ago and less than it was six months ago, although 
 recently the demand has shown a tendency to increase. 
 "Frozen credits" in northern California have been liqui- 
 dated to a large extent and those remaining consist chiefly 
 of loans extended last year. Foreign sales have increased 
 considerably in the last six months. 
 
 In southern California the principal natural products, 
 citrus fruits, petroleum, hay, cattle and garden crops, are 
 produced in virtually the same quantities as a year ago. 
 There is some surplus of olives and beans and a heavy 
 surplus of cotton, but these surpluses have been mate- 
 rially reduced, particularly in the last six months. Labor 
 costs are down about one-quarter, but other costs have 
 not been materially reduced. Wholesale price reductions 
 of natural products in the last year range up to 50 per 
 cent, but there has been no decline to speak of in the 
 last six months. 
 
 Surpluses of manufactured goods produced in southern 
 California have been reduced in the last year so that now 
 they are little greater than normal. Demand for short- 
 time credits has decreased and "frozen credits" have been 
 reduced approximately 30 per cent. "High railroad rates, 
 maladjustment between farm and retail prices, resisting of 
 wage reductions, foreign exchange situation," are charac- 
 terized as influences holding back readjustment. 
 
 There has been some increase in the exportation of raw 
 materials produced in southern California to the Orient 
 in the last few months. 
 
 32 
 
COLORADO 
 
 Population 
 
 Rural, 486,370 
 Urban, 453,259 
 
 PRODUCTS 
 
 Manufactured Natural 
 
 a. Metal products a. Sugar beet* 
 
 b. Canned Meats b. Livestock 
 
 c. Canned fruits c. Hay and grains 
 
 d. Flour mill products d. Gold, silver, lead, zinc 
 
 e. Beet sugar and copper 
 
 e. Fruits and vegetables 
 
 Colorado's production of beet sugar, meat products, 
 canned fruits and vegetables, flour and various other com- 
 modities is on the whole 60 to 80 per cent of the produc- 
 tion a year ago, but there has been a 20 per cent increase 
 in the last six months. The surpluses of finished goods 
 that existed a year ago have been largely wiped out. 
 There was a 10 per cent reduction in the cost of produc- 
 tion in the first six months of the last twelve, and a 15 
 per cent reduction in the last six. Taxation has increased, 
 but materials, construction costs, labor, and to a slight 
 extent money, have decreased. Wholesale prices of goods 
 produced in Colorado have decreased 20 per cent in the 
 last year and 10 per cent in the last six months. Meats 
 are down to pre-war prices and flour almost to pre-war 
 prices. 
 
 Livestock, sugar beets, hay, wheat, precious metals and 
 the other natural products of the state were produced in 
 1921 in the same volume on the whole as in 1920. Con- 
 siderable surpluses of wheat, corn and wool are in the 
 hands of producers. One-quarter of the 1920 wheat crop 
 remained unsold in the middle of August, 1921, and one- 
 half the 1920 corn crop was in the hands of the farmers. 
 Wholesale prices of natural products dropped steadily 
 throughout the year, but the rate of decline was not so 
 great in the last six months as in the first. 
 
 There has been . considerable liquidation of "frozen 
 credits" in agricultural loans, but not so much in wool 
 and livestock loans. "When people learn the difference 
 between true constructive credit and spending money 
 there will be enough credit in Colorado for all legitimate 
 credit demands. We are climbing the hill, but the grade 
 
 33 
 
is steep, the road is narrow and our vision is blurred by 
 our own interests and our lack of confidence in what the 
 other man is trying to do." 
 
 CONNECTICUT 
 
 Population 
 Rural, 444,292 
 Urban, 936,339 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Metal products a. Tobacco 
 
 b. Foundry products b. Corn 
 
 c. Arms and ammunition c. Hay and forage 
 
 d. Hardware d. Fruits and vegetables 
 
 Connecticut's metal products are reported to be manu- 
 factured this year in quantities 50 per cent smaller than a 
 year ago. Production is less than it was six months ago, 
 although the decline since spring has not been as rapid 
 as it was last fall and winter. Surpluses of manufactured 
 goods, except in the case of some kinds of machines and 
 parts and some sorts of tools, are not greater than normal. 
 Many large concerns, however, have adopted the policy of 
 producing only to order. 
 
 Declines in the prices of labor and materials and the 
 increased efficiency of labor have worked toward a reduc- 
 tion of the cost of production, which is less than it was a 
 year ago and less than it was six months ago. In Hart- 
 ford County "our average running time is 39 hours, com- 
 pared with the normal running time of 52 hours, with 
 corresponding reduction in working force." Production 
 of tobacco, fruit, garden truck and dairy products on the 
 whole is as great as it was a year ago. 
 
 In some parts of the state a slight decline in the 
 demand for short-time credits is reported, but "frozen 
 credits" have been gradually liquidated. 
 
 Connecticut, being largely a manufacturing state, feels, 
 generally speaking, all the conditions that lessened demand 
 has brought about in industry. 
 
 34 
 
DISTRICT OF COLUMBIA 
 Population 
 
 437,571 (entirely urban) 
 
 As the District of Columbia has little manufacturing 
 and no farming, except in a small way, most of the ques- 
 tions asked in connection with the Second Economic Sur- 
 vey were not applicable. 
 
 Those factories that do exist in the District, however, 
 are producing less than half the quantities of finished 
 goods that they manufactured a year ago, although there 
 has been no decline in the last six months. A 20 per cent 
 decrease in the cost of production, confined almost entirely 
 to the cost of materials, is reported. Wholesale and retail 
 prices of these products are reported to have dropped 
 about one-fourth in the last year. 
 
 FLORIDA 
 
 Population 
 
 Rural, 612,645 
 Urban, 355,825 
 
 PRODUCTS 
 
 Manufactured Natural 
 
 a. Naval stores a. Phosphates 
 
 b. Tobacco products b. Corn 
 
 c. Fertlizers c. Tobacco 
 
 d. Lumber 
 
 e. Fruits and vegetables 
 
 "Florida's phosphate mines and lumber mills are virtu- 
 ally all closed down because of the lack of export demand 
 in the phosphate business and of both export and domestic 
 demand in the lumber business." 
 
 In southern Florida, where the manufacture of cigars 
 is an industry of great importance, production has de- 
 creased more than one-half in the last year, although very 
 little change has taken place 'in the last six months. 
 Large surpluses of cigars, lumber, naval stores and phos- 
 phate are reported and these surpluses have increased in 
 the last year. 
 
 There have been material reductions in the cost of 
 labor in the sawmills and phosphate mines and a large re- 
 duction in the cost of production of naval stores, "but the 
 naval stores operators say they have not yet been able to 
 
 35 
 
reduce the cost of production so that they can operate on 
 the present market except at a loss. The surplus of phos- 
 phate is held for sale at practically any price at all." 
 Wholesale prices of naval stores, lumber and phosphate 
 are reported to be much less than half the prices a year 
 ago, "but there has been very little recession in 
 the prices of lumber and naval stores during the last six 
 months". Retail prices of these commodities are reported 
 to have been reduced 50 to 60 per cent in the last year 
 and less than 25 per cent in the last six months. 
 
 In western Florida- a large carry-over of many kinds of 
 farm products is reported. This surplus has not been 
 reduced considerably in the last year. In the agricultural 
 section is noted a fall of 40 per cent in the cost of pro- 
 duction, of which fully 90 per cent has taken place in the 
 last six months. Exports of lumber, naval stores and 
 phosphates have decreased steadily during the last year. 
 
 "The local situation is marked by a certain re-establish- 
 ment of public confidence in the future, a firm morale 
 among debtors with apparently hopeless indebtedness, sub- 
 stantial building operations incident to the low costs of 
 materials and labor, and the apparent certainty of a sure 
 market at more satisfactory prices than last fall for agri- 
 cultural products that were produced at a minimum of 
 cost." 
 
 GEORGIA 
 
 Population 
 Rural, 2,167,973 
 Urban, 727,859 
 
 PRODUCTS 
 
 Manufactured Natural 
 
 a. Cotton goods a. Cotton 
 
 b. Cotton-seed oil and cake b. Corn 
 
 c. Naval stores c. Lumber 
 
 d. Fertilizers d. Fruits 
 
 e. Phosphates 
 
 Like all southern states, Georgia has felt the serious 
 effects of the great decline in the price of cotton. A 40 per 
 cent decrease in the production of cotton in the central 
 part of the state, due chiefly to a reduction of cotton 
 acreage, has been offset to some extent by an increase of 
 25 per cent in the production of grain. In the last year 
 
 36 
 
there has been a considerable decrease in livestock, and in 
 production of timber and clays, with an increase of one- 
 third in horticultural products. In this central part of the 
 state there is a surplus of feedstuffs, of lumber, and, of 
 course, of cotton, but in the last six months the surplus 
 of cotton has been reduced 15 per cent. 
 
 Costs of production of agricultural commodities have 
 been reduced greatly in the last year. On the last of 
 August the sale price of cotton showed an increase of 30 
 per cent in six months and a similar improvement was 
 reported in the price of feedstuffs. 
 
 In southern Georgia an increase of 25 per cent in the 
 six months ending September 15 was reported to have 
 taken place in the production of lumber and lumber pro- 
 ducts, oil mill products, fertilizers and feed mill products. 
 The costs of production in these industries were reported 
 to have decreased 50 per cent. Surplus stocks of agricul- 
 tural products and lumber in this part of the state are re- 
 ported to have been reduced almost 50 per cent in the 
 last six months. "High taxes and low prices of commodi- 
 ties produced in Georgia, coupled with freight rates, are 
 holding us back." 
 
 The demand for short-time credits throughout the state 
 is reported to be less than a year ago, but the liquidation 
 of "frozen credits" has been inconsiderable. "The reduc- 
 tion of the cotton acreage and diversification of crops is 
 expected to prevent a recurrence of the demoralization that 
 in the past has accompanied a low price for cotton," 
 
 IDAHO 
 
 Population 
 
 Rural, 312,829 
 Urban, 119,037 
 
 PRODUCTS 
 Natural 
 
 a. Hay 
 
 b. Wheat and other grains 
 
 c. Lead, silver, gold and zinc 
 
 d. Lumber 
 
 e. Livestock 
 
 f . Fruits and vegetables 
 
 Productive Idaho is divided into three districts of 
 unequal size. The mining section lies in the north and 
 
 37 
 
the lumber producing district in the northwest; the 
 broader southern part of the state is largely devoted to 
 agriculture and livestock-raising. 
 
 Reports are that because of the state's distance from 
 primary markets, and the consequent effect of high freight 
 rates, farm prices of agricultural products in the last year 
 have fallen possibly to a greater degree than they have in 
 some other parts of the country. A report dated Septem- 
 ber 9 says : "Wheat is worth here about 40 per cent of the 
 price it commanded last year, hay about 30 per cent of last 
 year's price, cattle about 50 per cent and hogs about 60 
 per cent." 
 
 Another report is that "grain is moving slowly on 
 account of the high freight rate to Portland, Oregon, the 
 primary market. There is little market for hay at any 
 price, as sheep and cattle have been and are being shipped 
 out of the country." A large part of the 1920 wool clip 
 remains unsold in the warehouses. There are also sur- 
 pluses of grain and hay. 
 
 Conditions in the mining district are described as fol- 
 lows, in a report dated two weeks ago: "The lead pro- 
 ducer is selling his pig lead at pre-war prices, but is still 
 paying peak freight rates, and for white lead, manufac- 
 tured from his cheap pig, he still pays war prices. The 
 lead miner is working for $4.25 a day producing this com- 
 modity and paying the railroad worker $10 to $15 a day 
 for hauling it to market. When it is manufactured into 
 white lead he pays 13^ cents a pound wholesale for it 
 and $8 to $12 a day to a painter for spreading it on his 
 house. The mines, which normally produce one-third of 
 the income of the state, are working on a fifty per cent 
 basis." 
 
 The lumber mills in northwestern Idaho are operating 
 on a greatly reduced scale, but the surplus stocks of lum- 
 ber existing a year ago have been reduced considerably, 
 it is reported. 
 
 Costs of production throughout the state have been 
 greatly reduced, the principal decline being in the cost of 
 labor, with materials and construction costs following in 
 the order named. Transportation costs have remained 
 stationary and taxation has increased. 
 
 In many districts a shortage of credit is reported, 
 despite a lessened demand for short-time credits and a 
 gradual reduction in the volume of "frozen credits." 
 "Many of the credits which we thought were liquid a 
 year ago have become frozen. We have an abundance of 
 feed and little available credit to buy animals to feed it to." 
 
 38 
 
ILLINOIS 
 
 Population 
 Rural, 2,079,602 
 Urban, 4,405,678 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Packed meats and meat products 
 
 b. Iron and steel and their products 
 
 c. Agricultural implements 
 
 d. Wood products 
 
 e. Clothing 
 
 Virtually without exception the varied manufacturing 
 industries of Illinois have reduced production in the last 
 year. Common opinion is, however, that the rate of reduc- 
 tion in the last six months has not been as great as it was 
 last fall and winter. "Unusually large inventories, which are 
 not moving at the rate producers would like, are reported 
 in the case of farm implements, automobile tires and auto- 
 mobiles. About other commodities it is difficult to make 
 precise statements, although there are reports indicating 
 that there is a tendency for inventories to be reduced." 
 An authority in Chicago says, "There has been consider- 
 able sale of all types of goods so that the surplus in the 
 hands of manufacturers is not as large as it was six 
 months ago in most lines of industry." 
 
 The largest reduction in the cost of manufacturing has 
 been in the cost of materials. In the steel industry there 
 have been three successive reductions of wages, and in 
 many lines, while wage rates have not decreased, greater 
 efficiency of labor is reported to have reduced costs. Con- 
 struction costs in the Chicago district are reported not to 
 have declined to any material extent in the last year. 
 Transportation costs have not decreased. 
 
 "It is generally reported that wholesale prices of manu- 
 factured goods produced in this district have greatly 
 receded from the high point reached in the early part of 
 1920. The decrease has been gradual and steady. Retail 
 prices, on the other hand, have decreased on an average 
 only 20 per cent, and most of the reduction has come 
 within the last six months." 
 
 Surplus stocks of coal, corn, oats and other natural 
 products in Illinois have been gradually decreasing for a 
 year, more particularly in the last six months. "The 
 
 39 
 
extent of this liquidation is not exactly known, but we 
 do know that the farmers have been selling their corn in 
 fairly large quantities in recent months and as a result 
 have been liquidating their bank debts somewhat." Pro- 
 duction of agricultural products this year is expected to 
 equal that of 1920. 
 
 "Last year a hired man on the farm in this part of 
 the country received $60 to $75 a month, while at pres- 
 ent he is receiving $30 to $35. On the other hand, the 
 farmer is paying for everything except labor about as 
 much as he did a year ago or six months ago. In fact, 
 this is the chief difficulty of the situation: The farmer is 
 receiving only about pre-war prices for his products, while 
 in most cases he is still paying prices far above those he 
 was accustomed to paying before the war. In the last 
 month or so the prices of agricultural products have gone 
 up a little, although the price of livestock is still exceed- 
 ingly low." 
 
 Throughout the state a lessened demand for all kinds 
 of commercial credits is reported. The decrease in "frozen 
 credits" is reported to have been small. Taxation, the 
 railway situation, the tariff and government interference 
 with business are characterized as influences retarding 
 readjustment, "but fundamentally, the chief difficulty 
 which prevents speedier readjustment is still to be found 
 in the foreign situation." 
 
 INDIANA 
 
 Population 
 
 Rural, 1,447,535 
 Urban, 1,482,855 
 
 PRODUCTS 
 
 Manufactured Natural 
 
 a. Meats a. Corn 
 
 b. Automobiles and accessories b. Cattle 
 
 c. Metal castings, machinery and c. Hogs 
 
 tools d. Hay and forage 
 
 d. Flour and feeds e. Small grains 
 
 e. Lumber and wood products f . Petroleum 
 
 Conditions in the central part of the state and in the 
 highly developed industrial section in the northwest are 
 typical of those throughout Indiana. One report dealing 
 with finished goods says that in the last year there has 
 been a decline in production ranging from 15 to 50 
 
 40 
 
per cent. The last six months, however, have shown an 
 increase of 15 per cent in the quantity of meat products, 
 10 per cent in automobiles and accessories and 10 per cent 
 in drugs and chemicals and furniture. A small surplus of 
 automobiles and accessories that existed a year ago is 
 reported to have been absorbed, but a considerable sur- 
 plus of agricultural implements and many steel products 
 is reported in northwestern Indiana. 
 
 Costs of production in industry have declined steadily 
 throughout the year, but at a greater rate in the last six 
 months. Costs of materials, labor and construction are 
 reported to have declined in the order named, but taxes 
 have increased and transportation costs have not de- 
 clined. The decline of wholesale prices of finished goods 
 in the last year has ranged from 8 per cent to 45 per cent. 
 Reductions in retail prices of commodities produced in In- 
 diana range from 30 per cent in food products to an aver- 
 age of 15 per cent in other articles. Most of the decline 
 in food prices took place in the first six months of the 
 year, while two-thirds of the retail price decline of other 
 articles occurred in the last six months. 
 
 Decreases ranging from 3 per cent in wheat to 40 per 
 cent in oats are reported to have taken place in the out- 
 put of a number of agricultural products in the last year. 
 There has been no decrease in the production of cattle 
 and a slight increase in the production of hogs. A surplus 
 of corn, oats and wheat is reported. The greatest decrease 
 in the costs of agricultural production has been in the cost 
 of labor, although materials and construction costs have 
 declined somewhat. This reduction has been offset to a 
 considerable extent by an increase in taxation, transporta- 
 tion costs and interest rates. "There has been an average 
 decrease of about one-half in prices paid to the farmer, 
 but virtually none of this recession has taken place in the 
 last six months." 
 
 Banks are reported to be carrying a larger volume of 
 liquid credits than normal, but the demand for short-time 
 credits is less than it was a year ago and less than it was 
 six months ago. The volume of "frozen credits" has 
 steadily decreased. "The reduced cost of both labor and 
 materials, more economical methods of manufacturing, re- 
 duced overhead and increased efficiency," are characterized 
 as influences working to restore normal conditions, while 
 "high taxes, transportation costs, slow deflation of labor 
 costs and the continuation of government restrictions on 
 business," are named as deterrent influences. Foreign 
 sales of Indiana products have decreased in the last year. 
 
 41 
 
IOWA 
 
 Population 
 Rural, 1,528,526 
 Urban, 875,495 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Meat products a. Corn 
 
 b. Flour mill products b. Cattle 
 
 c. Foundry products and ma- c. Hogs 
 
 chinery d. Oats and other grains 
 
 d. Wood products e. Hay and small grains 
 
 f . Dairy products 
 
 A great reduction in the cost of labor, coupled with 
 the return of a large number of workmen from the cities 
 to the farms and an early and favorable season has 
 enabled the farmers of Iowa to harvest their crops this 
 year at a cost of production considerably less than that 
 which prevailed during the cultivating and harvesting 
 period last year. Farm rentals, which high values of farm 
 products had brought to a peak in the summer of 1920, 
 are reported to have decreased greatly. 
 
 Surpluses of corn and other farm products that existed 
 a year ago had not been entirely liquidated as the harvest 
 of 1921 approached. Cheaper production and the gradual 
 consumption of world surpluses of agricultural .commod- 
 ities, however, lend color to the opinion of one banker 
 "that the 1921 crops will move more readily than those of 
 last year and the farmers will be enabled to liquidate some 
 of their indebtedness and buy larger quantities of manu- 
 factured goods." 
 
 Natural products throughout the state will be equal in 
 volume to the production of last year, although a report 
 from the northwest corner of the state says that low 
 prices have resulted in a 15 per cent reduction in that 
 district. 
 
 Many reports from Iowa iterate the statement that 
 "our grains are selling at prices 50 to 75 per cent below 
 the peak, while virtually all the things our farmers buy 
 have fallen relatively little in price. We cannot catch up 
 until these price levels get together." Influences tending to 
 retard this price adjustment are enumerated as follows: 
 "Excessive transportation charges, excessive taxation and 
 lack of suitable financial organization to handle exports of 
 agricultural products." 
 
 42 
 
An average reduction of 25 to 30 per cent in the out- 
 put of manufactured goods produced in Iowa is reported. 
 Almost all this reduction, however, took place last fall 
 and winter, and in the last six months there has been vir- 
 tually no retrogression in industry. The surplus stocks 
 of manufactured goods are not excessive and were re- 
 ported to be less on September 1 than at any time in six 
 months. 
 
 Costs of production have decreased steadily through- 
 out the year, the decrease being apparent in materials, 
 labor and construction costs in the order named. Trans- 
 portation costs have not been reduced and taxation has 
 increased. Prices of manufactured goods produced in 
 Iowa are reported to have decreased steadily, but not in 
 the same proportion as those of agricultural products. The 
 price of coal in central Iowa is reported to be 50 cents a 
 ton higher than it was a year ago. 
 
 In the last six months, due to seasonal buying, the 
 demand for short-time credits has increased slightly and 
 the decrease of "frozen credits," consisting chiefly of loans 
 extended before 1921, is variously estimated at from 5 to 
 15 per cent. "Foreign sales of manufactured goods and 
 raw materials have decreased during the last year because 
 of lack of capital to extend long-time foreign credits and 
 because of unfavorable exchange rates." 
 
 KANSAS 
 
 Population 
 
 Rural, 1,151,293 
 Urban, 617,964 
 
 PRODUCTS 
 
 Manufactured Natural 
 
 a. Flour a. Wheat 
 
 b. Packed meats b. Corn 
 
 c. Butter c. Petroleum 
 
 d. Oats 
 
 e. Cattle 
 
 f. Hogs 
 
 A moderate surplus of agricultural products and a 
 large surplus of livestock is reported in central, southern* 
 and northwestern Kansas. Production is reported to be 
 as great in 1921 as in 1920. Reductions in the cost of 
 
 43 
 
labor, and to a smaller extent of materials are reported to 
 have brought about a decrease of about one-fourth in the 
 cost of agricultural products. Kansas farmers have expe- 
 rienced, of course, the common reduction in the price of 
 agricultural products. The reduced price of oil is reported 
 to have resulted in a curtailment of production. 
 
 An increase in the output of many flour mills and pack- 
 ing houses is reported to have taken place in the last few 
 months. Costs of production have declined in the last 
 year and in the last six months, the items decreasing in the 
 following order: materials, labor, money, construction 
 costs. An increase in taxation and stationary transporta- 
 tion costs are reported in the manufacturing districts. 
 High freight rates and taxes and slow adjustment of la- 
 bor conditions are characterized as "millstones around the 
 neck of business." 
 
 Foreign sales of wheat and flour are reported to have 
 increased about one-fourth in the last year, largely within 
 the last six months. The volume of ''frozen credits" has 
 been considerably reduced and the demand for short-time 
 credits is reported to be less than it was a year ago. 
 
 "There is a better feeling in business circles; there is 
 a gradual liquidation of loans and commodities, but few 
 retailers have taken their losses and are selling goods at 
 prices based on the present wholesale prices." 
 
 KENTUCKY 
 
 Population 
 
 Rural, 1,783,087 
 Urban, 633,543 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Flour mill products a. Corn 
 
 b. Lumber products b. Tobacco 
 
 c. Tobacco products c. Small grains 
 
 d. Foundry and machine-shop d. Hay 
 
 products e. Coal 
 
 f. Livestock 
 
 Production of tobacco, corn and livestock in western 
 Kentucky is reported to have been reduced to some extent 
 in the last year. Surpluses of corn and cattle existing a 
 year ago have not declined considerably. In the agricul- 
 
 44 
 
tural districts of the state a reduction of one-third in the 
 cost of production, due to declines in the costs of labor, 
 construction and materials in the order named is reported. 
 A 15 per cent increase in the volume of shoe manufactur- 
 ing is reported by one banker to have taken place in one 
 part of Kentucky within the last few months. Production 
 of cigars and other tobacco products has decreased in the 
 last year, but not very much in the last six months. Manu- 
 facturing costs are reported to have decreased in the fol- 
 lowing order: materials, construction costs, interest rates 
 and labor. 
 
 The demand for short-time credits is reported to be 
 less than it was a year ago, but greater than it was six 
 months ago. There has been no considerable decrease in 
 the volume of "frozen credits." An omen of better times 
 is seen by one banker in "a growing willingness on the 
 part of the public to forget the losses of the past and 
 work like fury to improve the present ; a tendency to come 
 after business instead of waiting for it to come as we did 
 at the peak. About 10 per cent of the people are still 
 holding back and endeavoring to avoid losses by getting 
 war-time prices for both goods and labor. When this is 
 eliminated we believe there will be a speedy readjust- 
 ment." 
 
 LOUISIANA 
 
 Population 
 
 Rural, 1,170,346 
 Urban, 628,163 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Oil products a. Sugar 
 
 b. Refined sugar and molasses b. Cotton 
 
 c. Canned goods c. Rice 
 
 d. Wood products d. Corn 
 
 e. Cotton goods e. Oil 
 
 f. Lumber 
 
 g. Livestock 
 
 In the last twelve months, it is reported, there has 
 been a reduction of about one-fourth in the output of 
 finished goods in Louisiana, but a slight increase in most 
 
 45 
 
lines has taken place in the last few months. Surpluses 
 of some products that existed a year ago have been almost 
 entirely eliminated. Almost three-fourths of the average 
 reduction of 25 per cent in the costs of manufacturing 
 has taken place in the last six months. Factors in the 
 cost of production have declined in the following order: 
 materials, labor and money; transportation costs have re- 
 mained stationary and taxation has increased. 
 
 Wholesale prices of goods made in Louisiana have 
 declined considerably in the last year and in the last six 
 months. Retail prices of these goods show a consider- 
 able decrease for the year, but not much of a decline for 
 the last six months. 
 
 Corn and sugar crops are reported to be very much 
 better this year than last, but there is a decline in the 
 production of cotton, rice, lumber and sulphur. A sur- 
 plus of naval stores, lumber, rice and cotton is reported, 
 but the surplus is smaller than it was a year ago and 
 smaller than it was six months ago. The costs of agricul- 
 tural production are reported to have decreased about 30 
 per cent, labor, material and money declining in the 
 order named. Wholesale prices of natural products of 
 Louisiana are very much lower than they were a year ago, 
 but not so much lower than they were six months ago. 
 
 Generally speaking, the demand for short-time credits 
 is less than it was a year ago and the volume of "frozen 
 credits" has decreased a little. Common opinion is that 
 sufficient credit is available to take care of normal pro- 
 duction. Foreign sales of Louisiana products have de- 
 clined in the last year. "High wages, high taxes and the 
 stagnation of foreign trade are injuring everybody in 
 Louisiana. The effect of extraordinary Federal taxation 
 discourages individual effort. As an example of this: 
 Last year there were two rice farmers side by side; one 
 with 200 acres of rice, the other with 1,000. Both made 
 good crops and received good prices, but by reason of 
 taxes imposed the man with the 1,000 acres made no more 
 than the man with 200 acres. Naturally, the 1,000 acre 
 man thereafter curtailed his activities." 
 
 46 
 
MAINE 
 
 Population 
 
 Rural, 468,445 
 Urban, 299,569 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Cotton and woolen a. Hay 
 
 cloth b. Potatoes and other veg- 
 
 b. Paper and pulp etables 
 
 c. Finished lumber c. Oats and other grains 
 
 d. Wood products d. Granite, lime and slate 
 
 e. Ships e. Fish 
 
 Maine has felt in company with the rest of New Eng- 
 land the industrial depression that resulted from decreased 
 purchasing, domestically and abroad. Woolen and felt 
 mills in the district bordering Penobscot Bay are reported 
 to be producing less than they were a year ago, but there 
 has been no reduction of output as compared with six 
 months ago. A large part of the goods produced in this 
 district are manufactured on order, and the fact that there 
 has been no decrease in production in the last few months 
 is taken to indicate a checking of the decrease in con- 
 sumption. 
 
 The paper industry is improving, although rather 
 slowly. Costs of materials, labor, money and construction 
 are reported to have decreased in the last year in the 
 order named. "The decrease in the cost of labor has been 
 apparent to some extent in reduced wages, but more par- 
 ticularly in increased efficiency." Production of lumber 
 and wood products has been reduced about one-fifth and 
 a surplus of long lumber, shingles and laths is reported. 
 The decrease in the cost of lumber production in Maine is 
 reported to be almost entirely in the item of labor. Trans- 
 portation costs remain stationary and taxation has in- 
 creased. A steady reduction in both wholesale and retail 
 prices of Maine products is reported. 
 
 Foreign sales have not increased in the last year. In 
 some parts of the state an increased demand for short- 
 time credits has been noticed in the last few months. The 
 volume of "frozen credits" in Maine is reported to be 
 inconsiderable. 
 
 47 
 
MARYLAND 
 Population 
 
 Rural, 580,239 
 Urban, 869,422 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Clothing a. Corn 
 
 b. Iron and steel b. Wheat 
 
 c. Ships c. Fruits and vegetables 
 
 d. Canned goods d. Livestock 
 
 e. Metal products e. Coal 
 
 f. Sea foods 
 
 "While the quantity of the 2,000 different commodities 
 manufactured in Maryland shows a marked reduction 
 since last year, the decrease is not so great as would be 
 indicated by the difference in value." It is reported that 
 the diminution of production has been "progressive from 
 month to month since January, but June and July pre- 
 sented an approach to equilibrium. August showed a 
 slight tendency to increase production in several lines, but 
 the output still is less than it was six months ago." A 
 surplus of manufactured goods in a great many lines has 
 grown appreciably less in the last few months. The hold- 
 over of canned goods, however, is reported to be very 
 large. 
 
 "There has been some reduction in wages and some 
 drop in the cost of basic raw materials, but the decline in 
 wages has not been commensurate with the decline in raw 
 materials." A reduction of from 10 to 60 per cent in the 
 cost of all materials used in Maryland factories, except 
 coal, is reported, compared with a reduction of 10 to 20 
 per cent in the wages of men employed in the various 
 industries. "There has been a reduction of 30 to 50 per 
 cent in the wholesale prices of goods produced in this 
 state in the last year, the greater part of the reduction 
 taking place in the first six months." Retail prices have 
 not dropped commensurately with wholesale prices. 
 
 On the whole, agricultural production in Maryland will 
 equal that of 1920, although the weather has been unfav- 
 orable to some crops. Surpluses of wheat and tobacco 
 existing a year ago have been reduced considerably. Farm 
 labor is reported to be more plentiful and its wage has 
 
 48 
 
been reduced one-fifth, "but prices of farm implements 
 have not some down enough and construction costs have 
 not been reduced to a point sufficiently low to induce 
 building operations." 
 
 The volume of "frozen credits" in the state has de- 
 creased somewhat and the demand for credits is less than 
 it was a year ago and less than it was six months ago. 
 
 MASSACHUSETTS 
 
 Population 
 Rural, 202,108 
 Urban, 3,650,248 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Textiles a. Hay and forage 
 
 b. Boots and shoes b. Fruits and vegetables 
 
 c. Leather goods c. Lumber 
 
 d. Electrical machinery d. Building and monu- 
 
 e. Foundry and machine shop mental stone 
 
 products 
 
 f . Paper products 
 
 Production in the cotton textile industry in Massa- 
 chusetts is reported to be on a basis 20 per cent below 
 that of a year ago, but the output of woolen and worsted 
 goods factories, which were suffering a great depression a 
 year ago, has been improved fully 75 per cent. Produc- 
 tion was at a high level in the boot and shoe industry in 
 September, 1920, but has since declined more than one- 
 fourth. "There may be some cause for optimism in the 
 showing of a 75 per cent increase in the cotton consump- 
 tion as compared with six months ago and in the fact 
 that our consumption of woolen is almost double what it 
 was six months ago and that production in the boot and 
 shoe industry shows an increase of 50 per cent during the 
 same period." 
 
 The textile industries have accumulated surplus stocks, 
 which during the last six months have been gradually 
 decreased. The absorption of surplus stocks of boots and 
 shoes has progressed at an increasingly rapid rate during 
 the past six months. "It may be stated broadly that the 
 greatest decrease as affecting the cost of production has 
 
 49 
 
occurred in the cost of raw materials. Labor would come 
 next, then money; while the items of transportation, taxa- 
 tion and construction costs have shown no decline. Wage 
 reductions on varying scales have been general through- 
 out the textile trade. There is also to be considered the 
 fact that limited production, which has been the rule dur- 
 ing the past six months, has been a factor in cost. It is, 
 of course, evident that mill operation on part time must 
 be uneconomical and result in increased cost per unit of 
 production." 
 
 Wholesale prices of manufactured products of Massa- 
 chusetts show a decline of 40 per cent in a year. "Cotton 
 goods prices, while they are 60 per cent below the level 
 one year ago, are 10 per cent above the low for the entire 
 year, which occurred about six months ago." Wholesale 
 prices of woolen goods, which reached the peak about the 
 middle of 1920, declined 50 per cent in the next six months 
 and there has been virtually no change in recent months. 
 The decline of boot and shoe prices has not been as great 
 as that of textiles, "but it should be noted that while there 
 has been a large shrinkage in the price of raw materials, 
 there ha.s been practically no reduction in labor costs, the 
 most important item in the manufacture of these goods." 
 
 Because a large part of its output consists of fruits and 
 vegetables agricultural Massachusetts has not suffered to 
 the same extent as many other states through the reduc- 
 tion of prices of farm products. "Fruits and vegetables 
 of all sorts stand at about the same wholesale price now 
 as a year ago." Production of lumber in Massachusetts is 
 reported to be about 50 per cent of normal. "Operating 
 costs have fallen about 40 per cent since 1919-20 and were 
 it not for increased freight rates, native lumber would sell 
 for practically pre-war prices." 
 
 An appreciable decrease in the volume of "frozen 
 credits" throughout Massachusetts is reported to have 
 taken place within the last year. "The European situa- 
 tion, the wage question, high freight rates and the excess 
 profits tax are working against speedy readjustment." 
 
 50 
 
MICHIGAN 
 
 Population 
 Rural, 1,426,852 
 Urban, 2,241,560 
 
 PRODUCTS 
 
 Manufactured Natural 
 
 a. Automobiles and accessories 
 
 b. Furniture and Wood products 
 
 c. Machinery 
 
 d. Drugs and chemicals 
 
 e. Pulp and paper 
 
 f. Prepared foods 
 
 The output of the many kinds of commodities produced 
 in the industrial part of Michigan is reported to have 
 increased one-fourth to one-half in the last six months, 
 and production on the whole is within 20 per cent of that 
 a year ago. Gradual reduction of surplus stocks of all 
 kinds is reported to have taken place within the last six 
 months, and at the beginning of September an increasing 
 demand for a large variety of manufactured articles pro- 
 duced in Michigan was noticeable. 
 
 "An average reduction in costs of about one-fifth has 
 been effected in the last six months. Labor has decreased 
 most, then materials, then construction costs ; transporta- 
 tion costs are as high and taxation higher than a year 
 ago." "Considering reduced wages and the increased 
 efficiency of labor, it is my opinion that labor is returning 
 to industry today perhaps 100 per cent more than a year 
 ago." A large part of the increased efficiency of labor and 
 a large percentage of wage decreases have occurred in the 
 last six months. 
 
 Wholesale prices of manufactured goods produced in 
 the Detroit district are reported to have decreased from 
 20 to 35 per cent in the last year, "excepting in the special 
 lines where the raw commodity has suffered a great 
 depression. The drop in copper and other metals, for 
 instance, has had a tremendous effect upon the prices of 
 all metal consuming industries." 
 
 Abnormal surpluses of agricultural and other natural 
 products of Michigan have been largely reduced, although 
 small holdings of cereals were in the hands of the farmers 
 before the 1920 crop was harvested, and the movement of 
 sugar was reported to be slow. Labor in the beet-growing 
 
 51 
 
district is much more plentiful than it was a year ago, 
 wages are lower and production costs as a whole are 
 reported to have fallen off more than 30 per cent. Copper 
 and metal prices "have not declined in the last six months 
 and now there is a prospect of advance." 
 
 The demand for short-time credits in some parts of 
 Michigan has strengthened considerably in the last six 
 months ; six months ago production was at a very low 
 ebb. Some decrease in the volume of "frozen credits" is 
 reported. "The foreign trade situation and the slow reduc- 
 tion of retail prices are holding back readjustment." 
 
 MINNESOTA 
 
 Population 
 Rural, 1,335,532 
 Urban, 1,051,593 
 
 PRODUCTS 
 
 Manufactured Natural 
 
 a. Flour and grist mill a. Wheat 
 
 products b. Corn 
 
 b. Wood products c. Iron ore 
 
 c. Steel products d. Lumber 
 
 d. Meat products e. Varied farm crops 
 
 f. Livestock 
 
 Production of virtually all natural products of Minne- 
 sota, except iron ore and lumber, is as great in 1921 as 
 in 1920. Reports from the northeastern part of the state 
 are that a demand for lumber and iron ore existing in 
 January has largely disappeared, and "now there is a large 
 surplus of ore and the yards are full of lumber that can- 
 not move." Mines are reported to be operating at about 
 one-third capacity. Costs in the mining and lumber pro- 
 ducing districts, which were the same six months ago as 
 they were a year ago, have since been reduced one-third. 
 A price of iron made last spring is reported not to have 
 been maintained and "if the producers wish to sell they 
 are cutting $1 a ton from the price made six months ago." 
 
 A surplus of grain, which has been steadily reduced 
 throughout the year, is reported in the agricultural sec- 
 tion. A report from the south central part of the state 
 is that crops will be smaller this year than last. The 
 cost of farm labor has declined greatly, materials a little 
 
 52 
 
and construction costs slightly. Stationary transportation 
 costs and higher taxes are reported. 
 
 Production of flour, meat products, agricultural imple- 
 ments and most other commodities manufactured in the 
 industrial districts is less than it was a year ago, but not 
 materially less than six months ago. Surplus stocks of 
 virtually all manufactured products are reported. Costs of 
 materials, construction and labor have decreased in the 
 order named, and wholesale prices of most finished goods 
 have declined steadily throughout the year. 
 
 "Among the factors that require readjustment I should 
 name first, taxes; second, the railroad situation; third, 
 labor costs, and fourth, the prices of natural products. 
 The government should leave legitimate business alone." 
 
 MISSISSIPPI 
 
 Population 
 
 Rural, 1,550,497 
 Urban, 240,121 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Cotton-seed oil and cake a. Cotton 
 
 b. Lumber products b. Corn 
 
 c. Lumber 
 
 d. Hay and small grains 
 
 e. Fruits and vegetables 
 
 The reduction of cotton acreage prevalent throughout 
 the south of course affected Mississippi. Fields formerly 
 sown to cotton were planted to corn this year and the 
 increased production of corn in most parts of the state 
 is reported to have offset the reduced size of the cotton 
 crop. Lack of demand has resulted in a great reduction 
 in the output of lumber. The surplus of cotton in south- 
 western Mississippi is reported to have been reduced 50 
 per cent during the last six months. "We believe the 
 recent entry of Great Britain into the cotton market, 
 together with unusually small crops, has strengthened 
 cotton prices and is an indication of permanently better 
 times for cotton planters." 
 
 Costs of production of cotton are reported to have 
 decreased greatly, the principal item being the reduced 
 cost of labor. A report dated September 9 said : "Cotton 
 
 53 
 
has more than doubled in price in six months and has 
 therefore doubled the value of Mississippi's great staple." 
 "Prices received by the farmer are ridiculously low. 
 However, after his products have passed through the 
 packing houses, factories and wholesalers and retailers the 
 price to the farmer is ridiculously high." 
 
 MISSOURI 
 
 Population 
 Rural, 1,817,152 
 Urban, 1,596,903 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Meat products a. Corn 
 
 b. Flour and grain products b. Livestock 
 
 c. Petroleum products c. Small grains 
 
 d. Metal products d. Fruits and vegetables 
 
 e. Wood products e. Lead and zinc 
 
 f. Shoes and leather products f. Lumber 
 
 g. Railway cars 
 
 A gradual decrease in the production of metal and 
 wood products has taken place during the year. Boot 
 and shoe factories and clothing manufacturers were re- 
 ported to be active at the end of August. Production of 
 building materials and wood products has decreased pro- 
 gressively throughout the year. The output of packing 
 houses, soap factories and flour and grist mills has been 
 steadily increasing in the last six months. Production of 
 oil refineries has been reduced. In most manufacturing 
 lines surplus stocks have been reduced greatly in the last 
 six months. 
 
 Costs of production and manufacturing are reported to 
 be 25 per cent lower than they were six months ago and 
 35 per* cent lower than a year ago. "This reduction is 
 based principally upon reductions in prices of raw mate- 
 rials and labor and upon the increased efficiency of labor. 
 Transportation and taxation remain high." A progressive 
 reduction in wholesale prices of finished goods has been 
 accelerated during the last six months, although a report 
 from the St. Louis district is that "there have been reduc- 
 tions in fewer lines in the last six months than in the 
 first six." Sixty per cent of the reduction in retail prices 
 of clothing, food and finished lumber in the last year has 
 
 54 
 
taken place in the last six months. Flour production in 
 the Kansas City district was very much larger in July 
 than in June. 
 
 Stocks of meats and packing products are reported to be 
 about normal, but "stocks of petroleum products at refin- 
 eries at this date are the largest of record." 
 
 Corn, wheat, oat and hay crops in 1921 are smaller than 
 those of last year and there has been a slight decrease in 
 the number of head of livestock on the farms and ranges. 
 Coal production is about one-fourth less and lead produc- 
 tion one-third less. Surpluses of wheat, corn, oats, barley, 
 crude oil, lead and zinc ore and coal are reported. Costs 
 of labor and materials used in agriculture and mining in 
 Missouri have decreased in the last year in the order 
 named, bringing about an average reduction ranging from 
 10 per cent in mining to 25 per cent in agriculture. "Farm 
 prices for wheat and corn are about 48 per cent less than 
 they were a year ago, but the price of corn is slightly 
 greater than it was six months ago. As this is written 
 hog prices are 15 per cent above the low level and sheep 
 prices 25 per cent above it. Prices of lead and zinc ores 
 are 50 per cent less than they were a year ago, but only 
 7 per cent less than they were six months ago." 
 
 The demand for short-time credits is reported to be 
 less than it was a year ago, but slightly heavier than it 
 was six months ago. "Missouri has sufficient credit avail- 
 able for all legitimate needs." "Frozen credits" have de- 
 creased considerably in the industrial sections, but an 
 increase is reported in some agricultural districts. "The 
 maljbr part of the 'frozen credits' are those which we had 
 to carry beginning in October, 1920, and I should say more 
 than half of them will have to be carried another eigh- 
 teen months." 
 
 "If the government will fund the railroad debt and 
 labor in the building trades will come down it will do 
 much to quicken business/' 
 
MONTANA 
 
 Population 
 Rural, 376,878 
 Urban, 172,011 
 
 PRODUCTS 
 
 Natural 
 
 a. Cattle 
 
 b. Sheep 
 
 c. Wool 
 
 d. Grain 
 
 e. Copper 
 
 f. Silver 
 
 g. Gold 
 
 A heavy reduction in the production of copper, Mon- 
 tana's great metal product, has been consequent upon con- 
 tracted markets at home and abroad and greatly reduced 
 prices. In some parts of the state a complete shut-down 
 of mines and smelters is reported, although on the whole 
 the decrease in production in the last six months has not 
 been great. "The output of metals is not 40 per cent as 
 large as it was last year." Low prices of virtually all 
 Montana's products and slow liquidation of these natural 
 products have resulted in holding up the volume of 
 "frozen credits", which consisted largely of credits ex- 
 tended in 1920. "Favorable changes are expected in the 
 next ninety days, due to sales of matured farm products." 
 
 Costs of production have been decreased 10 to 30 per 
 cent in the last year, the greater part of the decline tak- 
 ing place in the last six months. Factors in the cost of 
 production have decreased in the following order : labor, 
 materials and construction. Wholesale prices of metals, 
 cattle and agricultural products, of course, have declined 
 greatly from the peak, but many reports from various 
 parts of the state indicate that the decline in the last six 
 months has been relatively slight. 
 
 "Caring for the surplus production of Montana will 
 tax the ability of almost every bank in the state." 
 
 56 
 
NEBRASKA 
 
 Population 
 
 Rural, 891,066 
 Urban, 405,306 
 
 PRODUCTS 
 Manufactured Natural 
 
 a Meats and livestock a. Corn 
 
 products b. Wheat 
 
 b. Flour mill products c. Livestock 
 
 d. Hay and small grains 
 
 e. Dairy products. 
 
 The output of packing house, dairy and flour mill 
 products in Nebraska shows an increase over six months 
 ago, although the volume of flour and other mill products 
 is materially less than that produced a year ago. The sur- 
 plus stocks of manufactured goods that existed at the end 
 of 1920 are reported to have been disposed of. Cotton 
 goods and leather used in Omaha factories have declined 
 materially in cost in the last year and decreased costs of 
 labor and construction also are reported. "Freight rates 
 and taxes are excessively high." Wholesale prices of 
 Omaha products are considerably lower than they were a 
 year ago, but the rate of decline in the last six months 
 has not been as rapid as it was in the preceding six 
 months. "Retail prices of our products have been reduced 
 all along the line, but there has not been the same reduc- 
 tion in retail prices as there has been in wholesale prices." 
 
 Corn, wheat and oat crops throughout the state are 
 uniformly larger than they were last year, but in some 
 parts of Nebraska a decrease in the number of head of 
 cattle is reported. There is a surplus of corn larger than 
 the requirement for feeding and a surplus of oats also is 
 reported. Foreign sales of breadstuffs and meat products 
 havei increased. Costs of production in the agricultural 
 districts have been reduced one-fourth to one-half, the 
 items of materials, labor, construction costs and money 
 having declined in the order named. Land values have 
 also declined. 
 
 "This state does not need the amount of credit it has 
 used for the last five or six years. We believe there is a 
 sufficient amount of capital available within the state to 
 care for Nebraska's legitimate demands." "Frozen cred- 
 its" have decreased in volume and the demand for short- 
 
 57 
 
time credits is reported to be less than it was a year ago 
 and less than it was six months ago. 
 
 "The adjustment of international credit is necessary 
 before normal conditions can be restored. We are so 
 closely related to the rest of the world that one part of 
 the machine cannot operate unless the entire machine is 
 mechanically correct. We in Nebraska would be living in 
 sod houses, clothed in hemp and eating cornbread, meat 
 and potatoes if it were not for our relations with the rest 
 of the world." 
 
 NEW HAMPSHIRE 
 
 Population 
 Rural, 163,322 
 Urban, 279,761 
 
 PRODUCTS 
 
 Manufactured Natural 
 
 a. Cotton goods a. Hay 
 
 b. Woolen and felt goods b. Fruits and vegetables 
 
 c. Boots and shoes c. Grains 
 
 d. Wood products 
 
 e. Paper and pulp 
 
 Conditions in New Hampshire's cotton industries are 
 reported to have improved so much during the last six 
 months that production now is three-fourths of normal. 
 Large surpluses of cotton goods and shoes are reported 
 to be held in storehouses in the industrial district in the 
 southern part of the state. Wage cuts and increased effi- 
 ciency have greatly reduced the cost of labor, and prices 
 of materials have also fallen considerably. 
 
 In common with those of other New England states, 
 New Hampshire industries have been affected by in- 
 fluences felt in all industrial centers in the country. 
 
 58 
 
NEW MEXICO 
 
 Population 
 
 Rural, 295,390 
 Urban, 64,960 
 
 PRODUCTS 
 Natural 
 
 a. Cattle 
 
 b. Sheep and wool 
 
 c. Varied farm crops 
 
 d. Coal 
 
 e. Metals 
 
 A considerable surplus of wool is reported in the west- 
 ern and southwestern livestock sections, and abnormally 
 large numbers of beef cattle and sheep ready for sale can 
 find no market. There is also a surplus stock of hay and 
 other feeds. Farm crops larger than those of a year ago 
 are reported in this district. Prices of all the natural 
 products of New Mexico, except coal, of course have 
 declined greatly in the last year, but the decrease has 
 not been great in the last six months. In the Santa Fe 
 district a decline in the production of farm crops, wool, 
 sheep, cattle, coal and lumber is reported to have taken 
 place in the last year. 
 
 Costs of production in the agricultural and stock-rais- 
 ing districts have declined on the average one-third in the 
 last year. The decreases have taken place in the items 
 of labor, materials and construction costs in the order 
 named. Taxation has increased. 
 
 The great decline in the value of livestock and wool is 
 reported to have severely strained the available credit 
 within the state and the volume of "frozen credits" has 
 increased in the last year, but "we would be in good shape 
 to enter the new year if the ordinary channels would take 
 care of our products at reasonable figures." 
 
 "High freight rates are holding our products back more 
 than any other factor; it takes half a man receives for his 
 sheep and cows to pay the freight to market." 
 
 59 
 
NEW YORK 
 
 Population 
 Rural, 1,794,985 
 Urban, 8,589,844 
 
 PRODUCTS 
 
 Manufactured 
 
 a. Clothing 
 
 b. Printed matter 
 
 c. Textiles 
 
 d. Meat products 
 
 e. Foundry and machine-shop products 
 
 f. Varied finished goods of all kinds 
 
 g. Bakery products 
 
 Natural 
 
 a. Hay and forage 
 
 b. Fruits and veg- 
 
 etables 
 
 c. Cereals 
 
 d. Livestock 
 
 e. Minerals 
 
 Influences generated throughout the country and 
 throughout the world are reflected in conditions in New 
 York, the manufacturing and industrial center of the 
 country. So many kinds of commodities are manufactured 
 in New York, and the extent to which the various indus- 
 tries are affected by country-wide and world-wide condi- 
 tions varies so greatly, that in a brief summary anything 
 more than a general discussion of the industrial situation 
 is impossible. 
 
 As in all parts of the country, the output of goods 
 manufactured in New York has decreased greatly since 
 1920, although the output of some kinds of clothing and 
 furnishings is reported to have increased slightly very 
 recently. There are no great surpluses of these commod- 
 ities in the hands of manufacturers, and on the whole 
 surplus stocks of all kinds of manufactured goods have 
 been largely absorbed within the last year. Reduced out- 
 put, of course, has prevented the accumulation of large 
 surplus stocks. 
 
 Costs of production have declined steadily throughout 
 the year, the costs of materials, labor, money and con- 
 struction falling in the order named. There has been no 
 decrease in the cost of transportation, and taxes are 
 slightly higher. Wholesale prices have declined steadily 
 throughout the year, although the rate of reduction in 
 the last six months probably has been slightly less than 
 that in the preceding six months. Substantial reductions 
 in retail prices have been made in the last year and in 
 the last six months. 
 
 The demand for short-time credits is reported to be 
 less than it was a year ago and less than it was six 
 
 60 
 
months ago. The volume of "frozen credits" has been 
 decreased substantially in the last six months. Exports 
 have decreased in the last year and in the last six months. 
 "The main reason is that Europe already owes over 
 $4,000,000,000 in open account and we have difficulty in 
 extending more credits. There is no fundamental solution 
 except the financial monetary and industrial rehabilitation 
 of continental Europe." 
 
 The principal influences retarding readjustment are: 
 "(1) prices of finished manufactures as compared with 
 prices of raw materials, (2) retail prices, (3) wages, espe- 
 cially on the railroads, in the building trades and in the 
 coal fields, (4) costs of building materials, (5) steel prices, 
 and (6) railroad rates on bulky goods and especially on 
 building materials and steel." 
 
 Because of its proximity to great consuming centers, 
 agricultural New York has not suffered so much from 
 price declines as have the great farming sections of the 
 country. Costs of agricultural labor have been reduced 
 somewhat in the last year, but "the price of farm machin- 
 ery remains high." 
 
 NEVADA 
 
 Population 
 
 Rural, 62,153 
 Urban, 15,254 
 
 PRODUCTS 
 Natural 
 
 a. Livestock 
 
 b. Copper 
 
 c. Silver and gold 
 
 d. Hay and grain 
 
 In the last year copper production in many parts of 
 Nevada has virtually ceased. The surplus of copper is 
 reported to be almost twice as great as a year ago, 
 although the gradual reduction of production has, of 
 course, decreased the rate of accumulation in the last six 
 months. Copper could be produced at a cost one-third 
 lower than that of a year ago. 
 
 Hay, wheat and barley in the Carson Valley are re- 
 ported to have been produced in greater quantities this 
 year than last and there is a surplus of wheat and barley. 
 
 61 
 
Labor costs in agriculture have decreased more materially 
 than those of materials and construction. The decline in 
 the prices of Nevada cattle and hogs is reported to have 
 been checked within the last six months, but sheep prices 
 are still on the down grade. Retail prices of beef, pork 
 and mutton have declined at about one-half the rate of 
 decrease of cattle, hop and sheep prices. 
 
 In some localities the demand for short-time credits 
 is said to have increased in the last six months. "Long 
 and short-haul railroad rates prove a big detriment to local 
 production. Increased federal, state and county taxes, 
 coupled with increased assessment values, are not com- 
 mensurate with the earning capacity of the property." 
 
 NORTH CAROLINA 
 
 Population 
 Rural, 2,068,753 
 Urban, 490,370 
 
 PRODUCTS 
 
 Manufactured Natural 
 
 a. Cotton goods a. Cotton 
 
 b. Cotton-seed oil b. Tobacco 
 
 c. Wood products c. Lumber 
 
 d. Tobacco products d. Corn and other grains 
 
 Reduced values of cotton, tobacco and lumber, accom- 
 panied by a decrease in the demand for these commodities 
 as compared with that which existed last year, have oper- 
 ated to reduce the volume of production of North Caro- 
 lina's great natural products. As in a number of south- 
 ern states, acreage formerly devoted to cotton was planted 
 this year to corn. One of the cotton producing counties 
 in the southern part of the state reports a carry-over 
 decreased slightly in the last few months, a 40 per cent 
 reduction in the cost of production, due chiefly to the 
 reduced cost of labor, and a strengthening price just 
 beginning to be apparent at the time the report was pre- 
 pared. As the season progressed a greater demand for 
 short-time credits was noticeable in the southern part 
 of the state. In central North Carolina a slight decrease 
 in the volume of "frozen credits" has taken place in the 
 last six months, but a report from the southern part of 
 the state is that "frozen credits" have increased. 
 
 Great decreases in the price of cotton, tobacco and 
 
 62 
 
lumber have made possible materially reduced costs of 
 production in the woodworking, textile and tobacco indus- 
 tries, and the output in the central part of the state is 
 reported to be 20 per cent greater than it was six months 
 ago. Surplus stocks of cotton goods and hosiery are 
 reported to be smaller than a year ago and smaller than 
 six months ago. Wholesale prices of these manufactured 
 goods are reported to have fallen one-third in the last 
 year, most of the reduction taking place in the last six 
 months. "Recent advances in the price of tobacco and 
 cotton are helping greatly." 
 
 NORTH DAKOTA 
 
 Population 
 
 Rural, 557,446 
 Urban, 88,234 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Flour and grist mill a. Wheat 
 
 products b. Hay and forage 
 
 c. Livestock 
 
 d. Oats 
 
 e. Rice 
 
 f. Barley 
 
 North Dakota, as an essentially agricultural district 
 whose great products have uniformly declined sharply 
 in value in the last year, is typical of agricultural, live- 
 stock producing and metal mining sections throughout the 
 country. The following quotations from reports received 
 in this survey illustrate the situation throughout the state : 
 
 "There is too great a difference between the amount 
 our farmers are obliged to pay for manufactured articles 
 in comparison with the amount they receive for their 
 products. For example, North Dakota farmers get 9 to 10 
 cents a pound for hogs and must pay the butchers 65 to 70 
 cents a pound for bacon." 
 
 "Although wheat has fallen less than other farm pro- 
 ducts it does not return the cost of production. We must 
 have either less wages and lower freight rates or higher 
 prices for farm products." 
 
 "Too many persons are trying to pass the buck and 
 let the other fellow take the loss. We need a tremendous 
 educational program conducted by the big men of the 
 
 63 
 
country. Organization and intelligent effort did the busi^ 
 ness during the war. There is just as much reason for 
 such organization and effort now as then." 
 
 "Present costs and prices are so badly out of harmony 
 that the farmer is and has been losing money." 
 
 "Liquidation of loans to farmers is slow because prices 
 of the things they have to sell have decreased more than 
 one-half, while prices of commodities they have to buy 
 have remained comparatively too high." 
 
 Large reductions in the cost of farm labor throughout 
 the state are reported. There has been no substantial 
 reduction in the price of agricultural implements, and 
 taxes are higher than they were a year ago. The volume 
 of "frozen credits" in most parts of the state has increased 
 rather than decreased in the last six months. "Frozen 
 credits" consist in greater part, however, of loans extended 
 before 1921. 
 
 OHIO 
 
 Population 
 Rural, 2,082,258 
 Urban, 3,677,136 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Iron and steel a. Coal 
 
 b. Foundry and machine-shop products b. Iron 
 
 c. Packed meats and meat products c. Cereals 
 
 d. Automobiles and parts d. Dairy products 
 
 e. Rubber goods < e. Cattle 
 
 f. Clothing 
 
 The output of iron and steel and their products in 
 Ohio has been greatly decreased within the last year 
 and even during the last six months, and now is far below 
 the output a year ago. Production of automobiles and 
 rubber goods, however, has increased in the last six 
 months. Surplus stocks of tools, machinery, hardware and 
 many other kinds of metal products are reported, but the 
 surplus of manufactured metal goods, although greater 
 than it was a year ago, is less than it was six months ago. 
 
 Costs of production in the manufacturing districts have 
 been reduced steadily throughout the year, costs of mate- 
 rials, labor and construction falling in the order named. 
 Taxation and transportation costs are higher than they 
 
 64 
 
were a year ago. Wholesale prices of manufactured goods 
 have declined at a uniform rate throughout the year and 
 now average 40 per cent less than they did in the fall of 
 1920. Retail prices of these products are reported to have 
 decline about one-fourth, six-tenths of the drop coming 
 in the last six months. "Some articles produced in this 
 state have declined very little, but others have dropped 
 clear to the bottom." 
 
 Activity in the mining industries has slackened 
 throughout the year. Coal, iron and limestone production 
 is less than it was six months ago. The output of oil and 
 natural gas has not greatly decreased during the year. 
 In the agricultural districts some surplus stocks of corn, 
 wheat and wool are reported. Wholesale prices of farm 
 products, of course, have dropped greatly during the year, 
 but the rate of decrease in the last six months has not 
 been great. The principal item in the reduction of agri- 
 cultural costs has been the decreased cost of labor. 
 Foreign sales of commodities manufactured in Ohio have 
 decreased during the year and during the last six months. 
 
 Although the volume of "frozen credits" in the state 
 as a whole has decreased, some parts of Ohio report an 
 actual increase in the last six months. The demand for 
 short-time credits is less than it was a year ago and 
 slightly less than it was six months ago. 
 
 "The railroad situation, taxation, high labor costs in 
 some lines and lack of harmony in prices and costs" are 
 retarding the process of readjustment. 
 
 OKLAHOMA 
 
 Population 
 
 Rural, 1,488,803 
 Urban, 539,480 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Flour and mill products a. Petroleum 
 
 b. Refined petroleum b. Cotton 
 
 c. Cotton-seed oil and cake c. Wheat 
 
 d. Packed Meats d. Corn 
 
 e. Oats 
 
 f . Fruits and vegetables 
 
 g. Livestock 
 
 h. Lead and zinc 
 
 Slow movement of large surplus stocks of petroleum 
 and cotton have prevented any great reduction in the 
 
 65 
 
volume of "frozen credits" in Oklahoma banks within the 
 last six months, although in some parts of the state a 
 small reduction is reported. Because of reduced acreage, 
 this year's cotton crop is not much more than half as large 
 as that of 1920, but an increase of more than one-fifth in 
 the corn crop is reported. Because of climatic conditions 
 small grain production will be lower than that of last year. 
 
 In the agricultural and lead and zinc mining districts 
 a considerable fall in the costs of production is reported, 
 labor, materials and construction costs declining in the 
 order named. The oil industries report a very slight re- 
 duction in the cost of labor and a greater fall in the cost 
 of materials and construction. Transportation costs and 
 taxation have not decreased. 
 
 Meat packing and milling industries and factories mak- 
 ing cottonseed products have reduced their output one- 
 tenth to one-third in the last year, but there has been no 
 change in the last six months. Wholesale prices of com- 
 modities manufactured in Oklahoma have dropped stead- 
 ily at a uniform rate throughout the year. Costs of mate- 
 rials, money, construction and labor have fallen in the 
 order named. Wholesale prices of natural products de- 
 clined steadily until recently, but the fall is reported to 
 have been checked within the last few months. "We 
 recognize that the decreased demand for Oklahoma pro- 
 ducts is due to lessened purchasing power in domestic and 
 world markets, but if labor costs were reduced, the taxa- 
 tion system revised and transportation rates decreased 
 there would be an immediate revival of purchasing." 
 
 OREGON 
 
 Population 
 Rural, 392,370 
 Urban, 391,019 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Lumber and wood products a. Lumber 
 
 b. Flour and cereal products b. Wheat and other grains 
 
 c. Canned foods c. Fruits and vegetables 
 
 d. Woolen goods d. Livestock 
 
 e. Metal products e. Wool 
 
 f. Fish 
 
 g. Dairy products 
 
 While there have been great price declines in lumber, 
 grain and livestock, important natural products of the 
 
 66 
 
state, Oregon has experienced, during the depression in 
 the last year, increasing foreign sales of lumber, wheat and 
 barley and vastly greater domestic sales of wheat, barley, 
 oats and flour. 
 
 Oriental purchases of lumber have enlivened an indus- 
 try that not long ago was greatly depressed, and although 
 in some parts of the state mills are reported to be operat- 
 ing at one-half capacity, the average output is not more 
 than one-fourth below normal. Domestic shipments of 
 wheat out of Portland in the first eight months of this 
 year were ten times as large as in the first eight months 
 of 1920, and foreign shipments were more than four times 
 as large. An increase ranging from 150 per cent to 1000 
 per cent in domestic shipments of flour, barley and oats 
 is reported for the same period. 
 
 A uniform increase over 1920 in the production of all 
 Oregon grains and vegetables is reported. Grain receipts 
 in Portland, the shipping center, have been more than twice 
 as great this year as last. At the same time surplus sup- 
 plies of natural products that existed a year ago have been 
 almost entirely cleared, although in some sections a sur- 
 plus of lumber and livestock is reported. Fruit and berry 
 production in the Willamette Valley is reported to be 
 below normal, but counties bordering the Columbia River 
 in north central Oregon report larger fruit crops than 
 those of last year. 
 
 Reduced costs of labor and materials and increased effi- 
 ciency of labor are reported both in agriculture and in 
 industry. One lumber manufacturer reports "the greatest 
 output for August in the history of his business, with the 
 least number of men." Production in woodworking indus- 
 tries is less than normal, but in cereal milling, factories 
 making woolen goods and furniture factories production 
 is large. The salmon pack is below normal. 
 
 "Frozen credits" have decreased, but "banks have real- 
 ized within the year that many credits considered liquid a 
 year ago are not liquid." Demands for short-time credits 
 have decreased in the last year. 
 
 "Lumber is the predominating industry in Oregon, and, 
 excepting cotton, copper and livestock, has fallen to a 
 greater extent than most basic commodities. We feel that 
 the corner has been turned toward that point at which 
 prices and costs will be harmonious on a new and prob- 
 ably stable level." 
 
 "Exorbitant freight rates are holding back readjust- 
 ment in this part of the country. Prices of our products 
 are down to a proper level, but due to the distance from 
 
 67 
 
the center of population high freight rates make it impos- 
 sible for us to compete with other producing centers of 
 the country." 
 
 PENNSYLVANIA 
 
 Population 
 Rural, 3,112,202 
 Urban, 5,607,815 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Iron and steel products a. Coal 
 
 b. Cotton and wool textiles b. Wheat 
 
 c. Silk and silk goods c. Corn 
 
 d. Hosiery and knit goods d. Livestock 
 
 e. Leather goods e. Petroleum and 
 
 f. Tobacco products natural gas 
 
 Surplus stocks of many kinds of iron and steel pro- 
 ducts, electrical equipment and food products are reported 
 in the industrial centers of western Pennsylvania. Pro- 
 duction in these lines has decreased about one-fifth in the 
 last year. The reduction of output in the last six months 
 has been slight, and in some lines a revival has taken 
 place very recently. Costs of production in the industrial 
 centers are reported to have declined almost one-fifth in 
 the last six months, materials, labor and interest rates 
 dropping in the order named. Wholesale prices of manu- 
 factured goods produced in the Pittsburgh district have 
 decreased 15 per cent in the last six months and 25 per 
 cent in the last year. Retail prices of these products have 
 not decreased at the same rate. 
 
 Production of coal, natural gas, petroleum and sand 
 and gravel in western Pennsylvania has declined steadily 
 throughout the year. Costs of production have not de- 
 creased materially in the last six months, although slight 
 declines in the cost of materials and money are reported. 
 Exports of finished goods have decreased in the last year 
 and in the last six months. There has been a slight de- 
 crease in the volume of "frozen credits." 
 
 Although the output of locomotives, steel products, 
 street cars, textiles, hats and numerous other products 
 of the Philadelphia region is reported to be considerably 
 less than it was a year ago, some increase in production 
 in some lines has taken place in the last few months. 
 There are considerable surplus stocks of steel and steel 
 products. Costs of production have decreased steadily 
 throughout the year, principally in the item of materials. 
 
 68 
 
Taxation has increased. "Because of lack of credits 
 exports of products of this part of Pennsylvania have de- 
 creased in the last year and in the last six months." De- 
 mand for short-time credits is less than it was a year ago 
 and less than it was six months ago, but "frozen credits" 
 have decreased. 
 
 "Manufactured goods are too high in proportion to 
 farm products. Manufacturing costs must be lowered 
 very much. Retailers must dispose of their high-priced 
 stocks at replacement values and buy on a lower basis." 
 
 The output of coal in the anthracite region is on the 
 whole 25 per cent smaller than it was a year ago. There 
 is a surplus of "steam" sizes of anthracite and a small 
 surplus of prepared sizes. There was no surplus a year 
 ago. "The coal operators are under agreement to pay the 
 present scale of wages until April 1, 1922, but there has 
 been some slight decrease in the cost of production, by 
 reason of increased efficiency and lower material costs." 
 Wholesale and retail prices of coal are reported to be a 
 very little lower than they were a year ago. In this dis- 
 trict the volume of "frozen credits" has been reduced con- 
 siderably in the last six months. A recent increase in the 
 volume of silk manufacturing is reported. 
 
 In the agricultural sections a 30 per cent decrease in 
 the costs of production and almost complete elimination 
 of surplus stocks of farm products is reported to have 
 taken place since the first of the year. The decline in 
 prices paid to Pennsylvania farmers has been checked 
 within the last few months and the volume of "frozen 
 credits" is reported to have been substantially reduced. 
 
 RHODE ISLAND 
 
 Population 
 Rural, 15,217 
 Urban, 589,180 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Cotton goods a. Hay and forage 
 
 b. Woolen good* b. Fruit and vegetable* 
 
 c. Silk fabric* c. Milk 
 
 d. Machinery and tool* d. Poultry 
 
 e. Jewelry 
 
 f. Rubber good* 
 
 Production of cotton and woolen goods in Rhode 
 Island has increased nearly one-third in the last six 
 months. The output of woolens two weeks ago was as 
 
 69 
 
great as it was a year before, while cotton production 
 had recovered to three-fourths of its normal volume. Pro- 
 duction of silk fabrics and machine tools has declined 
 steadily during the year, but at a slower rate during the 
 last six months. Employment in Providence decreased 
 steadily from February to July and took an upward turn 
 in August. 
 
 There is a large surplus of machinery and machine 
 tools in the hands of manufacturers "because of cancel- 
 lation of orders and continued production after the de- 
 mand had fallen off." Costs of production have decreased 
 25 per cent during the year, the principal items being 
 materials and labor. "The only reduction in taxation is 
 that caused by the shrinkage in value of inventories. 
 There has been virtually no construction in Rhode Island 
 in the last year." 
 
 "The volume of 'frozen credits' seems to have re- 
 mained about the same, but their status has changed 
 somewhat. 'Frozen credits' representing loans to manu- 
 facturers and producers have decreased, but those con- 
 sisting of loans to small retailers have increased." 
 
 Natural products of Rhode Island, of course, are of 
 relatively small importance. Fruit crops this year are 
 smaller than in 1920, but other crops are about the same. 
 A considerable surplus of dairy products is reported. 
 Agricultural costs have decreased in the following order: 
 labor, materials and construction costs. 
 
 "The repeal of the excess profits tax will help as much 
 as any one thing to restore normal conditions in this 
 state. Readjustment of labor conditions has been slow." 
 
 SOUTH DAKOTA 
 
 Population 
 
 Rural, 534,675 
 Urban, 101,872 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Flour and mill products a. Corn 
 
 b. Meat products b. Wheat 
 
 c. Livestock 
 
 d. Various grains and 
 
 vegetables 
 
 e. Dairy products 
 
 Comparatively large surplus stocks of corn are re- 
 ported in most parts of South Dakota. The state nor- 
 
 70 
 
mally markets about one-fifth of its corn crop and feeds the 
 rest to cattle and hogs. Reports are that in most parts 
 of the state the number of head of livestock is unusually 
 small this year, and to this fact is ascribed the surplus 
 stock of corn. Grain crops in 1921 are as large, if not 
 larger, than those of 1920. The decrease in livestock in 
 the state as a whole is reported to range from 10 per cent 
 in sheep to one-fifth in hogs. The number of steers has 
 also declined. 
 
 In the last year there has been a reduction of more 
 than one-third in the cost of labor and of about one-tenth 
 in the cost of machinery and farm implements. One- 
 fourth of a 40 per cent decline in prices paid to South 
 Dakota farmers has taken place in the last six months. 
 "On account of high freight rates to Minneapolis, South 
 Dakota farmers are receiving considerably less for their 
 products than those in states nearer the milling centers." 
 "Oats at 15 to 18 cents are not worth hauling, while steers 
 at prices South Dakota livestock men receive hardly pay 
 the freight, commission and yardage charges when shipped 
 to market." 
 
 "The demand for farm credits is considerably greater 
 than it was a year ago, but it is not being supplied. Were 
 credit obtainable for the purchase of cattle, hogs and other 
 livestock there would be some use for the big amount of 
 rough feed and feed grains that remains in the farmers' 
 hands and is practically valueless on the market." The 
 reduction of "frozen credits" in the last six months is 
 reported to have been very slight. 
 
 Surplus stocks of meat products in the Sioux Falls 
 district are reported to have been absorbed within the 
 last year, most of the movement taking place in the last 
 six months. Costs have been reduced 15 per cent in the 
 last six months, materials, construction costs and labor 
 falling in the order named. Wholesale prices are reported 
 to have declined one-third in the last six months and about 
 40 per cent in the last year. 
 
TENNESSEE 
 
 Population 
 
 Rural, 1,726,659 
 Urban, 611,226 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Wood products a. Grains 
 
 b. Textiles and cotton products b. Cotton 
 
 c. Cotton-seed products c. Lumber 
 
 d. Metal products d. Minerals 
 
 e. Flour and mill products e. Tobacco 
 
 f. Livestock 
 
 Manufacturing industries in the Chattanooga district, 
 with the exception of those engaged in iron fabricating, 
 report an output one-fourth to one-half greater than that 
 of six months ago, although production of textiles and 
 furniture and other wood products still is considerably 
 less than it was at the peak in 1920. Surplus stocks of 
 most commodities produced in the Chattanooga region 
 have declined one-third to two-thirds in the last year. 
 The reduction on the whole has been steady from month 
 to month. In the northeastern part of the state there is 
 a surplus of textiles, although stocks are smaller than they 
 were a year ago and smaller than they were six months 
 ago. 
 
 Costs of production have dropped one-third, materials, 
 construction costs and labor declining in the order named. 
 Taxation has increased. Wholesale prices of manufac- 
 tured goods produced in the eastern part of the state have 
 declined on the average 50 per cent in the last year. The 
 fall in the price of cotton textiles has done much to bring 
 about this average reduction. Textile price declines have 
 been slight in the last six months. "The consensus of 
 opinion is that the reduction of retail prices of all products 
 has not kept pace with the reduction of wholesale prices." 
 
 Production of coal, iron ore, bauxite and other metals 
 in the Chattanooga district is about the same as it was six 
 months ago. "Coal production costs practically what it 
 did a year ago, on account of the fixed wages of labor and 
 the high cost of transportation." The cost of production 
 of clays, bauxite and other minerals is probably one-third 
 less, except where wages are fixed. Surplus stocks of 
 lumber, corn, cattle and wool considerably larger than 
 
 72 
 
those that were held a year ago are reported in the north- 
 eastern part of the state. 
 
 A slight increase in the output of wood products, grain 
 products and textiles in the last few months is reported in 
 central Tennessee. 
 
 "Virtually every manufacturer in this territory is over- 
 stocked. Most manufacturers have run their plants either 
 full time or part time, while sales were falling off. In 
 some lines there has recently been a noticeable improve- 
 ment in sales." 
 
 One report from Nashville is that "the cost of pro- 
 duction to manufacturers in this district is greater than 
 one year ago. The cost of labor remains the same, and 
 in some lines there has been a noticeable decline in per 
 man production. This, coupled with a slight increase in 
 freight rates and a material increase in taxes, has brought 
 costs to a point above the level of even one year ago. 
 Nevertheless, wholesale prices of commodities produced 
 in this section have declined somewhat." 
 
 Production of lumber and minerals in central Ten- 
 nessee is reported to have declined in the last year and in 
 the last six months. Surplus stocks of hay and corn are 
 held by the farmers. In agriculture costs of labor, mate- 
 rials and construction have declined in the order named. 
 
 All manufactories in the industrial district about Mem- 
 phis have decreased production in the last year, although 
 the output has not declined materially in the last six 
 months. Surplus stocks of finished lumber are reported. 
 Wholesale prices of finished products in this part of the 
 state have declined one-fourth to one-half in the last year, 
 although there has been no appreciable change in the last 
 few months. Retail prices of these products have declined 
 on the average a little more than one-fourth, most of the 
 decrease taking place in the last six months. Surplus 
 stocks of cotton and rough lumber are reported. A decline 
 in the items of labor and materials has reduced the cost of 
 agricultural production almost one-half in the last year. 
 
 In most parts of the state there has been a reduction 
 in the volume of "frozen credits" and a lessened demand 
 for short-time credits. "The lack of export demand, high 
 freight rates and high taxes are the principal problems of 
 Tennessee industries." 
 
 73 
 
TEXAS 
 
 Population 
 Rural, 3,150,539 
 Urban, 1,512,689 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Meat and meat products a. Oil and natural gas 
 
 b. Oil products b. Lumber 
 
 c. Cotton-seed oil and cake c. Cotton 
 
 d. Flour and mill products d. Livestock 
 
 e. Finished lumber e. Corn 
 
 f . Miscellaneous agricultural 
 products 
 
 In Texas as a whole a 40 per cent decrease in the out- 
 put of lumber and cotton and a reduction of one-tenth in 
 the production of rice and sulphur is reported to have 
 occurred in the last year. Crude oil production has not 
 changed materially, the output of salt has increased and 
 livestock on the ranges number more than they did a year 
 ago. Surplus stocks of lumber, cotton and rice, somewhat 
 greater than those of a year ago and about the same as 
 those of six months ago, are reported in many parts of 
 the state. 
 
 Labor costs in the agricultural districts of eastern 
 Texas have dropped two-fifths in the last year and "ap- 
 parently have reached the low level. This augurs well for 
 next year's crops, but small grain was largely put in 
 before wages declined and very few farms in this district 
 produced enough wheat to make a profit at present 
 prices." Throughout the agricultural and livestock dis- 
 tricts of the state costs of material and labor have declined 
 In the last year in the order named. Prices paid for 
 natural products of Texas have dropped almost 50 per cent 
 in the last year, but the decrease in the last six months 
 has been slight. Retail prices of these products have 
 declined about two-fifths, although the fall in the last six 
 months is reported to be slight. 
 
 The output of oil refineries, sugar refineries, packing 
 houses and cottonseed oil mills is reported to be one- 
 fourth to one-half less than it was a year ago. Production 
 of burlap and bags has fallen off amost one-third. On the 
 whole, however, the output of Texas industries has in- 
 creased slightly in the last six months. Surplus stocks 
 of packing house products, kerosene and fuel oil and some 
 
 74 
 
cottonseed products are reported in the northeastern part 
 of the state. Abnormal stocks of machinery used in the 
 oil fields, the oil refineries, the cotton mills and the cot- 
 tonseed oil mills have been gradually reduced in the last 
 six months. Costs of production in industry have declined 
 on the average one-fifth in the last year, two-thirds of the 
 fall taking place in the last six months. Wholesale prices 
 of the manufactured goods produced in Texas have de- 
 creased steadily throughout the year. Retail prices of 
 these products also have decreased steadily, but not at 
 the same rate. 
 
 The volume of "frozen credits" has been gradually 
 reduced during the last six months, the reduction being 
 chiefly in industrial loans. Large amounts of credit are 
 reported to be tied up in livestock and agriculture. The 
 demand for short-time credits has decreased in the last 
 year and in the last six months. "Through Congressional 
 legislation and the action of government boards extraordi- 
 nary and impossible scales of railroad wages have been 
 established and theoretical rules by which laborers obtain 
 compensation for work which is not done have been set 
 up. These standards have operated not only to injure 
 railroads, but their evil influence has extended to all 
 branches of industry, so increasing cost of production as 
 necessarily to retard industrial effort." Foreign sales of 
 some Texas products are reported to have increased 
 slightly in the last six months. 
 
 UTAH 
 
 Population 
 Rural, 233,812 
 Urban, 215,584 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Refined copper a. Hay and forage 
 
 b. Refined lead b. Cereals 
 
 c. Flour and grist c. Copper 
 
 d. Canned fruits and d. Lead 
 
 vegetables e. Sugar beets 
 
 f. Livestock 
 
 g. Fruits and vegetables 
 
 Utah has larger crops this year than in 1920, but pro- 
 duction of metals, cattle and cattle products, sheep and 
 wool is less, although there has been no decline in these 
 
 75 
 
items in the last six months. Surplus stocks of copper 
 and other metals, wool and cattle products are reported. 
 These surpluses represent accumulations during the last 
 year, although there has been no material increase in the 
 last six months. Large stocks of beet sugar also have 
 accumulated. Costs of production have declined one- 
 tenth to one-fifth in the last six months, the factors of 
 materials, labor and construction costs dropping in the 
 order named. 
 
 "High costs of transportation have tied us up in many 
 ways. We are unable profitably to ship cattle to market or 
 to bring building materials in at reasonable costs. Build- 
 ing this year was the lightest in years." Consensus of 
 opinion in Salt Lake City is that sufficient credit is avail- 
 able within the state to carry producers on a proper basis. 
 Except in a few cases "frozen credits" have not decreased 
 in the last six months. They consist largely of loans 
 extended before 1921. 
 
 VERMONT. 
 
 Population 
 
 Rural, 242,452 
 Urban, 109,976 
 
 PRODUCTS 
 
 Manufactured Natural N 
 
 a. Stone products a. Granite, marble and slate 
 
 b. Finished lumber and b. Dairy products 
 
 wood products c. Lumber 
 
 d. Varied agricultural products 
 
 Production of granite, marble, slate and lumber in 
 Vermont has decreased in the last year and in the last 
 six months. A surplus of roofing slate in the Rutland 
 district has been cut down steadily throughout the year. 
 Most products of the slate^ granite and marble districts 
 are manufactured to order and consequently no large sur- 
 pluses have been accumulated. Lumber production in the 
 state has decreased. A lessened demand for short-time 
 credits and a reduction of "frozen credits" is reported. 
 
 76 
 
VIRGINIA 
 
 Population 
 
 Rural, 1,635,203 
 Urban, 673,984 
 
 PRODUCTS 
 
 Manufactured Natural 
 
 a. Tobacco products a. Corn 
 
 b. Cotton textiles b. Tobacco 
 
 c. Wood products c. Coal 
 
 d. Paper and paper products d. Lumber 
 
 e. Shoes and leather goods e. Vegetables 
 
 f. Metal products f. Peanuts 
 
 g. Fertilizers g. Fruits 
 
 In nearly all parts of Virginia except the south central 
 a moderate increase in the output of manufactured com- 
 modities, not altogether due to seasonal influences, has 
 occurred within the last few months. 
 
 Increasing activity in the lumber business and a larger 
 output of iron and steel manufactures, cigars and cigar- 
 ettes, vegetable oils and creosoted products is reported in 
 the southeastern part of the state. There has been no 
 recent reduction of output in any of the industries in the 
 Richmond district, and production in some lines has 
 increased within the last few months. In central Virginia 
 an increase of more than 50 per cent in the output of shoe 
 factories is reported, and production of iron and steel, 
 while less than a year ago, is a little greater than six 
 months ago. Textile production is one-fifth greater than 
 it was six months ago and almost equal to that of a year 
 ago. 
 
 Surplus stocks of finished products are reported in 
 none of the industrial sections of Virginia except the 
 extreme southwestern, where abnormal stocks of furni- 
 ture, chemicals and alkali products are in the hands of 
 manufacturers, and the south central part of the state, 
 where surpluses of cotton goods and wood products are 
 held. 
 
 Wages in manufacturing have been reduced one-fifth 
 to one-third in the last year, except in tobacco factories, 
 and costs of raw materials are considerably lower, but 
 taxation and transportation costs have not been reduced. 
 Wholesale prices of goods manufactured in Virginia, 
 except tobacco products, have decreased in varying de- 
 
 77 
 
grees, but at uniformly steady rates throughout the year. 
 
 Surplus stocks of raw cotton, lumber, corn, cattle and 
 wool are reported in south central and southwestern Vir- 
 ginia, but abnormal supplies of natural products in the 
 eastern part of the state have been absorbed during the 
 year. Most crops are short this year as compared with 
 1920, and the output of lumber and wool has been cur- 
 tailed. 
 
 On the whole, prices received for natural products of 
 Virginia have declined little, if any, in the last six months, 
 although prices are uniformly much lower than in Octo- 
 ber, 1920. "Farm labor is materially cheaper than last 
 year, but other farm expenses were not much lower when 
 crops were planted. Farmers have made crops much more 
 cheaply by rigid economy and personal labor." 
 
 The volume of "frozen credits" has decreased some- 
 what, "but the banks are carrying a large volume of 
 credits that would normally be liquid but are not, because 
 of the severe decline in the value of farm products." 
 
 "It is commonly recognized that America must have 
 foreign markets for her surplus products, both manufac- 
 tured and agricultural." 
 
 WASHINGTON 
 
 Population 
 
 Rural, 607,886 
 Urban, 748,735 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Lumber products a. Lumber 
 
 b. Cereal products b. Wheat and other grains 
 
 c. Meat products c. Fruits and vegetables 
 
 d. Canned fruits d. Hay and forage 
 
 e. Canned fish e. Livestock 
 
 f. Metal products f. Fish 
 
 g. Dairy products 
 
 In the manufacturing section of western Washington, 
 which lies largely in the district bordering Puget Sound, 
 production of virtually all finished goods has increased 
 materially during the last few months. Improvement has 
 been noticeable in the clothing and textile industries, 
 which were operating on a very low plane a year ago. 
 "The volume is now larger than at any time during the 
 
 78 
 
.past year." Production of steel and iron goods, wood 
 products, meat products and confections has shown a 
 slight improvement recently. Prices of all finished goods 
 produced in the Puget Sound district are reported to have 
 declined about one-third in the last year, two-thirds of 
 the reduction taking place in the last six months. Retail 
 prices of these goods have declined about one-fifth, the 
 drop in the last six months being twice as great as that 
 in the preceding six months. Industrial costs have 
 dropped on an average 20 per cent, the items of materials, 
 construction and labor falling in the order named. In 
 some industries "absolutely no cut has been made in 
 wage scales." 
 
 A surplus of steel products and a stock of furniture 
 slightly greater than normal are reported, but "generally 
 speaking stocks have been worked down until at present 
 there is no great surplus." 
 
 During the summer of 1921 western Washington pro- 
 duced less lumber than in the summer of 1920, but "dur- 
 ing the past few weeks production has been increased and 
 there is now a better demand and a larger production than 
 six months ago. A marked increase in foreign demand for 
 lumber, salmon, flour, milk and canned goods has come in 
 the last two months." In the middle of September the 
 condition of all crops in western Washington was re- 
 ported to be uniformly good and at an output at least as 
 great as that of 1920 was expected. A surplus stock of 
 canned fruits that existed a year ago has been gradually 
 reduced. In the farming section a decline in the costs of 
 labor, materials and construction in the order named is 
 reported to have been progressive throughout the year, 
 while the rapid decline of prices paid to farmers for their 
 products has been checked. 
 
 The volume of "frozen credits" in western Washing- 
 ton is reported to have been decreased one-fifth to one- 
 third in the la,st six months. "The transportation problem 
 has been a material factor in producing the unsatisfactory 
 situation in the lumber industry. Some of the building 
 trades have been working on a reduced wage scale for 
 several months, and quite recently there has been a revival 
 of residence building." 
 
 There have been bumper crops in the fruit-raising 
 district in central Washington, and this year's production 
 will greatly exceed that of 1920. Agricultural costs in the 
 Yakima and Wenatchee valleys have been greatly re- 
 duced, while fruit prices have not declined in the last year, 
 and in some instances have increased. Hay and grain 
 
 79 
 
prices have decreased. The demand for short-time credits 
 has increased considerably as a consequence of the harv- 
 est. "There has been some decrease in the volume of 
 'frozen credits/ but the greatest reduction will be within 
 the next three months." Industrial production in eastern 
 Washington is about the same as it was six months ago, 
 although the output of wood products, packed meats, 
 flour, clothing and other commodities is less than it was 
 a year ago. Surplus stocks of manufactured goods are 
 about one-third less than they were a year ago and are 
 not much above normal. Wholesale prices of finished 
 goods produced in eastern Washington are reported to 
 have declined almost one-half in the last year, with no 
 considerable change in the last six months. Retail prices 
 of these goods have dropped one-third. 
 
 Agricultural production in eastern Washington is 10 
 per cent greater than a year ago. A surplus of soft wheat 
 very much greater than that a year ago is reported, but 
 this is largely seasonal. Agricultural costs are reported 
 to have declined one-fourth in the last year, the principal 
 reduction being in the cost of labor. While prices paid 
 for wheat on eastern Washington farms have been reduced 
 about one-half since August, 1920, there has been no 
 reduction in the last few months. 
 
 The output of lumber in eastern Washington is re- 
 ported to be less than one-half as large as that a year ago 
 and about 70 per cent of the production six months ago. 
 There is a considerable surplus of lumber. Copper and 
 zinc production, far less than it was a year ago, has not 
 decreased in the last six months and a slight improvement 
 in lead production is reported to have taken place recently. 
 There are large surplus stocks of copper and zinc and a 
 small surplus of lead. Generally speaking, the cost of 
 mining has been reduced steadily during the year, due 
 principally to wage reductions. Copper, zinc and lead 
 prices in eastern Washington have declined about 40 per 
 cent in the last year, but not more than 10 per cent in 
 the last six months. "Frozen credits" in this part of the 
 state have been reduced considerably in the last six 
 months. 
 
 80 
 
WEST VIRGINIA 
 
 Population 
 Rural, 1,094,694 
 Urban, 369,007 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Lumber products a. Coal 
 
 b. Steel products b. Natural gas 
 
 c. Glass c. Petroleum 
 
 d. Corn and other grains 
 
 e. Livestock 
 
 f. Lumber 
 
 g. Tobacco 
 
 Coal production throughout West Virginia is reported 
 to be less than half as great as it was a year ago. The 
 output of lumber also has been reduced about 50 per cent 
 and the decline in oil and gas production has been great, 
 although the output of all three commodities has not 
 fallen materially in the last six months. Surplus stocks 
 of oil and of lumber are reported in some parts of the 
 state. Rates of wages of mine labor fixed by the govern- 
 ment will be effective until the spring of 1922. The cost 
 of production of coal has not decreased in the last year, 
 although the price received by the operators at the mines 
 is reported to be much less than it was a year ago. Oil, 
 lumber and cattle prices in the state have been cut in two 
 in the last year, but have declined little in the last six 
 months. 
 
 Production of steel, tin-plate, window glass and pot- 
 teries has declined on the whole more than two-thirds 
 since the fall of 1920, but there has been no reduction in 
 the last few months. Reports from the Charleston district 
 are that nearly all chemical plants are closed and wood- 
 working plants have reduced their output 50 per cent. 
 Surpluses of chemicals and wood products are reported. 
 Costs of production in industry have declined in the fol- 
 lowing order: materials, construction and labor. Taxation 
 and transportation costs remain high, and in some parts of 
 the state the reduction in other items is reported to have 
 been very small. "One manufacturer has not made a 
 reduction in wages, but feels that the greater efficiency of 
 his employees is working to reduce his costs of produc- 
 tion." Wholesale and retail prices of goods manufactured 
 in West Virginia are reported to have dropped steadily 
 
 81 
 
throughout the year, the greater part of the retail decline 
 coming in the last six months. 
 
 "I believe the most serious thing we have to face is the 
 wage readjustment. Prices of all materials and of trans- 
 portation will drop as soon as a readjustment of the wage 
 scale becomes general in industry." 
 
 In some parts of the state a shortage of credit is 
 reported, although the volume of "frozen credits" has 
 decreased one-fifth in the last six months and the demand 
 for short-time credits is not so great as it was last spring. 
 
 WISCONSIN 
 
 Population 
 
 Rural, 1,387,499 
 Urban, 1,244,568 
 
 PRODUCTS 
 Manufactured . Natural 
 
 m.. Iron, steel and heavy machinery a. Hay and forage 
 
 b. Leather and leather products b. Cereals 
 
 c. Textiles c. Livestock 
 
 d. Meats and meat products d. Dairy products 
 
 e. Motor vehicles and accessories e. Vegetables and 
 
 f. Chemicals and drugs fruits 
 
 g. Wood products f. Lumber 
 h. Flour and cereal products 
 
 Production of motor vehicles and accessories, leather 
 and leather goods, knit and woven goods, clothing, flour 
 and cereals, and rubber goods has increased one-fourth to 
 three-fourths in the last six months, according to reports 
 from the industrial section centering in Milwaukee. The 
 output of iron, steel and heavy machinery and electrical 
 supplies has declined somewhat in the same period, and 
 production of agricultural implements, farm equipment, 
 motor vehicles and accessories and most other commod- 
 ities manufactured in this region is far lower than it was 
 a year ago. Surplus stocks of most kinds of goods pro- 
 duced in the Milwaukee district have been almost entirely 
 absorbed in the last six months. 
 
 On the whole, manufacturing costs have decreased 25 
 to 35 per cent, most of the reduction coming in the last 
 six months. Materials, labor and construction costs have 
 declined in the order named. An average reduction of 
 almost two-fifths in wholesale prices of manufactured 
 articles is reported. Retail prices of these commodities 
 have also declined, principally in the last six months. 
 
 82 
 
Production of lumber and metals in Wiscinsin is con- 
 siderably less than it was a year ago, but the dairying 
 industry throughout the state remains firm. Surplus 
 stocks of some grains and of wool are reported. Labor 
 costs in agriculture have been cut almost in half, and 
 materials have declined somewhat, although the costs of 
 farm machinery remain high. Taxation has increased. 
 Farm products of Wisconsin, of course, have shared the 
 common price decline, but prices have fallen very little in 
 the last few months. 
 
 "Wisconsin is a dairy state of the first magnitude, and 
 although the price of dairy products to the farmer has 
 shrunk about 50 per cent, there is no foundation for the 
 feeling that the farmers are going to slaughter or abandon 
 their herds, as is evidenced by the fact that the Milwaukee 
 market is receiving from 15 to 25 per cent more milk and 
 butter now than a year ago." 
 
 Throughout the state a material reduction in the 
 volume of "frozen credits" is reported, although in cer- 
 tain rural districts there has been an increase and some 
 of the larger industries "still lean heavily on the banks." 
 
 Factors working against readjustment are "slow read- 
 justment of wages to the prevailing price levels, the at- 
 tempt to maintain prices in certain lines, disproportionate 
 costs of transportation, continuation of high level of gov- 
 ernmental expenditure in the face of a drastic fall in 
 prices and difficulties in the way of export trade." Foreign 
 sales of products manufactured in Wisconsin have de- 
 creased in the last year and in the last six months. 
 
 WYOMING 
 
 Population 
 
 Rural, 137,054 
 Urban, 57,348 
 
 PRODUCTS 
 Manufactured Natural 
 
 a. Flour and grist a. Sheep and wool 
 
 b. Cattle 
 
 c. Hay 
 
 d. Wheat 
 
 e. Minerals 
 
 f. Dairy products 
 
 A severe drought that caused heavy shipments of live- 
 stock in the fall of 1919, a hard winter in 1919-20 and a 
 great depreciation in livestock values in the last eighteen 
 
 83 
 
months have demoralized cattle and sheep production 
 throughout Wyoming. "The shortage of breeding stock 
 is so acute that the whole industry will be greatly injured 
 unless some means is found to provide financial relief 
 that will save the cattle remaining on the ranges from the 
 market." 
 
 There are a large number of reports of forced sales of 
 cattle and sheep and wool at prices far below the costs of 
 production. Costs of production, however, are reported 
 to have declined greatly in the last year and particularly 
 in the last six months, and "if railroad rates would come 
 down it would be possible to sell at a profit." "With 
 hides selling here at 50 to 75 cents each and shoes little 
 below peak prices and with fat cattle at 8 cents a pound 
 and cuts of steak at 35 to 45 cents a pound, there is too 
 great a difference between the price the cattleman receives 
 for his products and the prices he has to pay for them 
 when he buys them back in other forms." 
 
 Surplus stocks of beet sugar and oil are reported in the 
 Big Horn Basin. Costs of materials and labor in the oil 
 fields of this district have been reduced in the order 
 named, while in the beet fields and on the farms the order 
 of reduction has been reversed. Oil production has fallen 
 off about one-half. The reduction in the number of head 
 of livestock has resulted in the accumulation of a large 
 surplus of hay. 
 
 Credit shortages are reported in virtually every part 
 of the state. On the whole the volume of "frozen credits" 
 has increased rather than decreased in the last year. 
 
 84 
 
UNIVEESITY OF CALIFOENIA LIBEAEY, 
 BEEKELEY 
 
 THIS BOOK IS DUE ON THE LAST DATE 
 STAMPED BELOW 
 
 Books not returned on time are subject to a fine of 
 50c per volume after the third day overdue, increasing 
 to 1.00 per volume after the sixth day. Books not in 
 demand may be renewed if application is made before 
 expiration of loan period. 
 
 A - 4 1930 
 
 MM 6 
 
 
 67J 
 
 
 50m-7,'29 
 
YC 27163 
 
 
 452320 
 
 UNIVERSITY OF CALIFORNIA LIBRARY