one-half per cent in August to a ruling rate of 34, which continues at present, with a small volume of short paper selling at lower rates. In the foreign exchanges there was a sharp advance in rubles, more strength in francs, a slight decline in guilders, a new low price for marks, and practically no change in sterling. Imports of gold are continuing in large amounts, which have reached the total of $307,000,000 since May 11 last. DISTRICT NO. 3-PHILADELPHIA. There does not appear to be any falling off of orders or of business immediately in prospect in this district. The community, however, is ever confronted with the fact that business is being done under abnormal conditions, with the possibility of events taking place that will in due time restore business to normal conditions. This, together with the unsatisfactory crop reports, is inducing business men to act conservatively. Trade reports are becoming monotonous reading, because they tell the familiar story of mills and factories extended to the limit, prices rising to new heights, and profits that surpass all former records. Merchants and manufacturers are encouraged by the brisk demand for fall merchandise. The preliminary retail demand has shown an improvement that augurs well for the future, and wholesale distribution continues in large volume. Notable activity is still the most prominent feature in manufacturing departments, and though every effort is being made by the plants and mills to keep pace with orders, there is much complaint that an inadequate supply of labor renders it difficult to make deliveries as promptly as desired. There is a growing shortage of all kinds of labor, which is embarrassing many manufacturers in their efforts to complete their contracts. It is also a chief element of uncertainty in arranging new commitments. The return to schools and colleges of many students who have worked during the summer months will aggravate the situation. Iron and steel plants are working at full capacity, with orders which will carry them well into the coming year. Plate mills are generally sold up, the already heavy demand took a fresh spurt, and inquiries for large quantities are being received. It is assumed that consumers are seeking to cover their future requirements as a protection against the heavy demands of the Government naval program. Steel bars and structural material are scarce, and prices are firm. The steel supply seems inadequate to meet the demand, and there is a continuing firmness of prices in all lines. Pig iron prices, in which an increasing tendency has been noted for some weeks, were advanced in all grades by Philadelphia houses. The coal and coke markets are strong, and steel concerns are among the heaviest inquirers for bituminous coal. There is an active and increasing demand, in part owing to the prosperous conditions in industrial lines, but also to the desire on the part of numerous consumers to stock up in advance of requirements because of reports that the shortage of labor in the mining regions is keeping down production, and that later on there may be a deficiency in supplies. Prices are very firm, and most business is on a spot basis. Foreign inquiry is active, but an acute lack of bottoms, which has ruled for some time, is keeping shipments at a minimum. Coke production generally is far below the demand. The Lancaster County tobacco crop was hurt by hail in some sections, but prevailing high prices and large yields practically guarantee the best returns, as a whole, to growers in years. Generally speaking, the textile industries have an abundance of orders to fill, and steady employment for the winter is assured. In nearly all instances a restricted supply of labor is cutting down the volume of possible output. Following is a table showing the results of replies made to inquiries of large concerns in this district as to industrial and business conditions. These replies also indicate that production costs continued to increase during the past year, showing an average gain of about 18 per cent for labor and 44 per cent for materials, against 11 per cent and 46 per cent, respectively, the previous year. It is also noted that some manufacturers have deferred making improvements to property or replacements of equipment which, under normal conditions, probably would have been made. The commissioners of navigation report that during the month of August exports from the port of Philadelphia amounted to $36,000,000, the largest in its history, and a gain over August, 1915, of $27,000,000; $20,505,911 of these exports were war materials. Imports for the month amounted to $8,221,037, compared with $4,955,059 a year ago. The article showing the largest increase was raw sugar. In spite of the large amount of business being done throughout this district, the numA gratifying feature of the port's business ber of commercial failures during August is was the large number of American vessels rein excess of the number reported for any ported, 31 vessels flying the American flag month since April. It should be noted, how-arriving from foreign ports and 22 sailing. ever, that most of these failures affect the concerns with relatively small capital, and this condition of business has been referred to recently by the Federal Trade Commission, which reported that the leading industrial establishments usually make money and are continually improving manufacturing and working conditions, which the small trader is apparently unable to do. Bradstreet's report of commercial failures in this district, classified as to capital employed. The increase in business activity of this district is reflected in the following table of bank clearings: Norristown. $2,523,086 5, 204, 832 8, 188, 894 6,976,693 2,021, 880 998, 420, 106 8,776, 158 12,954,878 8,242,785 7,481, 135 11,740, 322 4,340,052 655,855,938 +2.2 + 3.5 +23.1 +18.5 96 Scranton. 1 103 Trenton. 101 Wilkes-Barre. 67 Wilmington. 48 York. 50 57 65 widespread domestic buying, steel manufacturers are expecting a general advance in wire, plates, bars, and other products of the mills. Business conditions in general throughout the entire district are exceedingly favorable, with +11.6 anticipated continued improvement throughout the balance of the year. Some changes are +18.8 reported in industrial conditions, largely due to the strain on railroads, inability to move +20.7 freight, and shortage of labor. +73.1 +16.5 +18.5 +53.0 +26. 4 - 3.2 + 6.9 +47.8 +11.9 Average +25.2 The money market presents no special features. Money is abundant, and rates show a tendency toward lower figures. DISTRICT NO. 4-CLEVELAND. In determining the trend of business in district No. 4, conditions in the steel trade furnish the principal barometer. In July and August there was some hesitancy among steel product makers in placing orders with producers because of uncertainty that the present level of prices would continue. Now that hesitancy has given way to confidence, and buying by manufacturers is insistent. The situation that existed between producers and manufacturers is now noticed between manufacturers and jobbers. The latter are not as confident in their buying as manufacturers assert they will be in a month. One favorable feature of the present situation is that for the last eight months the steel trade has been without fluctuations that are ordinarily so disturbing. One large company reports that in spite of large shipments during that period their obligations have not varied 100,000 tons up and down. This indicates the consuming power of the country and the consistent demand during all this period. The iron and steel situation, therefore, remains fully as strong as a month ago. Practically every plant in this district is sold up into next year. Owing to increased foreign demand and The retail mercantile trade is slightly less in volume. Interest in fall wear has increased, and better business is expected. Wholesalers report satisfactory business generally, and are looking forward to a good fall trade. The glass trade in the Pittsburgh district is operating to capacity of available labor, and glassmen throughout the district are looking forward to a good business. The pig-iron market is strong and running at a maximum pace. Sales are on a large scale, with prices stiffening. The following table shows a comparison of prices, using Pittsburgh quotations: Manufacturers of tin plate have reserved considerable tonnage for shipment next season, but no prices for 1917 delivery have been named. A general advance of 50 cents per ton has been realized in the Cincinnati iron and steel scrap market. The electrical business is keeping up in good volume, orders and contracts being above normal. Delays in making prompt shipment, due to difficulty in receiving raw material, are still being experienced, but collections continue good. Building operations are slower, especially in the way of residences, owing to the high cost of materials. In the six largest cities in this district there were 391 more building permits decrease. Per cent 1915. 38.4 .7 94.8 89.5 6.7 Total... 24, 399 1,074,578 Traction traffic is improving. Reports from traction companies show earnings far in excess of a year ago. Suburban railroad traffic re156.4 mains normal, but without marked improvement. Loads billed in this district on all the 801 principal trunk lines during August show an increase of 27.1 per cent over August, 1915, and an increase of 10.9 per cent as compared with July, 1916. The car situation is unsatisfactory in the larger shipping centers, forcing slower movement of raw materials and manufactured articles. Railroads report that all available cars are being used, and it is possible that additional contracts for new cars will be made. It is stated that the shortage will 38.0 probably be aggravated during the next two or three months, partly on account of inability of receivers to obtain sufficient labor promptly to unload freights. Per cent decrease. 11.5 1.7 10.0 The lumber business, which has been unsatisfactory during the summer, is better. Both hardwood and yellow-pine dealers are reporting increased sales and better prices. Paper manufacturers report a strong demand for finished goods, orders running away ahead of production. Raw material is scarce, hard to get, and high in price. Soap manufacturers are doing a tremendous business, especially those making glycerine and like products. One concern is reported to be doing a business of $100,000,000 gross this year, this being an increase of $25,000,000 over last year. Post-office receipts of the six largest cities in this district show an increase of 2.4 per cent for the month of August over July, 1916, and an increase of 11.2 per cent over August, 1915. Table of post-office receipts follows: Manufacturers report labor scarce, and competition between some industrial concerns is adding to the acuteness of the situation. It is reported that as high as $4 a day, in some cases, is being paid for the best common labor. Farming communities also complain of lack of help in harvesting crops. High-class horses in the Blue Grass region of Kentucky are now selling at the old-time high prices. Present prices for hogs, ranging almost 11 cents per pound, has resulted in unprecedented prosperity for the farmers. Although the rains improved the crop situation somewhat, they were a little late. Some sections report the crops will not be more than three-fourths of what they were last year. The Burley tobacco section reports a magnificent crop, both as to volume and quality, and it is probably the best crop that section has ever |