General Condition During the Year. -The activity in manufactures which characterized 1912 was maintained during the first part of 1913. Trade journals recorded a steady conservative expansion. In the West and South there was apparent a spirit of optimism as to the future, based largely on the fine crop outlook for cotton and wheat. A conservative feeling developed in the early Spring, especially in the eastern states, where manufactures predominate. The renewed war in the Balkan Peninsula put a strain on international markets, but apparently had no effect on industrial conditions in the United States. The revolution in Mexico, the flood disasters in Ohio and Indiana, and the great storms throughout the Middle West during March temporarily interrupted trade, and had some retarding effect on manufactures. The hurricanes and floods, however, created an unusual demand for rails, bridge work, and other structural material to replace flood damage. With the assembling of the extra session of Congress there developed the usual tendency for consumers to curtail their orders pending tariff revision. There appeared to be a general opinion that there never had been a more convenient time for testing the effect on American manufactures of a low tariff. The prospects of a readjustment of the tariff, however, necessarily had a retarding effect on manufactures. There was a distinct slowing down noticeable in some industries during March. By the latter part of April manufacturers were glad to accept orders for prompt delivery where they were inclined to be independent 30 days earlier. By May there was a marked falling off in orders for iron and steel and an abate

ment of activity. The conservatism was more pronounced in the industrial and financial East, while in the agricultural West and South there was a marked feeling of confidence. During the summer a considerable proportion of the textile machinery was idle, pending an adjustment of the tariff. There was a falling off in imports of articles free of duty, many of which formed the raw material for manufactures. The tariff law was approved Oct. 3, but its effect had, apparently, been largely discounted, and there was no appreciable change in industrial activities. In the meantime the prospect of legislation regulating banking and currency had created a tendency among banking institutions to strengthen their resources. Interest rates were somewhat higher than in 1912, loans were not so freely made, and there was a tendency on the part of manufacturers to reduce their stock of goods. There seemed to be some decline in business confidence as the year advanced, which contrasted with the optimism that was evident during the preceding year. (See also I, American History; and XIII, Economic Conditions.)

The liabilities involved in the failures in manufacturing enterprises for each quarter were considerably in excess of those for the corresponding quarter of 1912. For the first quarter this excess amounted to $4,928,510, for the second to $5,450,638, for the third to $8,085.734. While the number and magnitude of the failures in manufacturing industries were greatest during the first three months, they were too large during the entire year to be viewed with equanimity. This, with the higher money rates, tariff trouble, uncertainties of

The increases in values as shown in this statement are affected by the change from currency to the gold standard between 1869 and 1879, and by the increase in prices during recent years. Prices per unit for manufactured products in 1913 were at a much higher level than for any of the preceding years. The number of wage earners employed and the horse power of the engines, electric motors, etc., however, show a marvelous increase since 1849, when the first representative statistics were collected for the entire country.

Increase in Population and Manufactures. A comparison of the value of manufactures with the population is necessarily affected by increase or decrease in prices. To some extent it is, therefore, misleading, but the per capita values and percentages of increase in population and value of manufactured products given in the following statement for the years 1850 to 1913, show, in a general way, that the manufactures of the country have increased at a much more rapid rate than the increase in the population:

The census of population and manufactures of 1850 gave a per capita value of $40. With the exception of 1880 over 1870, when the per capita value was affected by the change from the currency to the gold standard, there was a steady, and at times a very large, increase in this value. The largest amount, $261, is shown for

1913.

The Tariff and Manufactures.—The | tariff law approved Oct. 3 made a number of important reductions in the duty on the raw material used in manufactures, as well as on the finished products of many of the important industries. The free list has been greatly extended. The testimony of manufacturers and others before the Committee on Ways and Means shows a great diversity of opinion as to the effect the reduction in duties will have on domestic production. |

Many manufacturers contended that the cost of manufacture was so much less in European countries that any material reduction in the tariff would be destructive to their industry. Others thought the rates could be greatly reduced without serious effect. The difference in cost of production in foreign countries and the United States, however, was practically disregarded in fixing the rates of duty.

The statement on the opposite page, comparing the rates for a number of metal and textile products as fixed by the laws of 1909 and 1913, illustrates the changes that characterize the new law.

The Textile Industries. Of the important factory industries, the textiles are among the most sensitive to tariff legislation. The new law makes radical reductions in all of the principal products of the industry. There