zi

*<?

78-1

NATIONAL RECOVERY ADMINISTRATION DIVISION OF REVIEW

EVIDENCE STUDY NO. 10

OF

THE ELECTRICAL CONTRACTING INDUSTRY

Prepared by E. M. MARSH AND J. C. HUMPHREY

October, 1935

PRELIMINARY DRAFT (NOT FOR RELEASE: FOR USE IN DIVISION ONLY)

■ .... -.;;.;!

aisei on wmoj

SWIVI3

J3MCJQ

suauwnsi Uc

NOI1V30

66

~£6 "% *i

*6

ON TIV3

■

NATIONAL RECOVERY ADMINISTRATION DIVISION OF REVIEW

EVIDENCE STUDY NO. 11

OF

THE ELECTRICAL MANUFACTURING INDUSTRY

Prepared by J. R. PIKE

December, 1935

PRELIMINARY DRAFT (NOT FOR RELEASE: FOR USE IN DIVISION ONLY)

THE EVIDENCE STUDY SERIES

The EVIDENCE STUDIES were originally planned as a means of gathering evidence ■Bring upon various legal issues which arose under the 'National Industrial Re- covery Act.

These studies have value quite aside from the use for which they were originally intended. Accordingly, they are now made available for confidential \ise within the Division of Review, and for inclusion in Code Histories.

The full list of the Evidence Studies is as follows:

Automobile Manufacturing Ind. 23.

.Boot and Shoe Mfg. Ind. 24.

Bottled Soft Drink Ind. 25.

Builders' Supplies Ind. 26.

Chemical Mfg. Ind. 27.

Cigar Mfg. Industry 28.

Construction Industry 29.

Cotton Garment Industry 30.

Dress Mfg. Ind. 31.

Electrical Contracting Ind. 32.

Electrical Mfg. Ind. 33.

Fab. Metal Prod. Mfg., etc. 34.

Fishery Industry 35.

Furniture Mfg. Ind. 36.

General Contractors Ind. 37.

Graphic Arts Ind. 33.

Gray Iron Foundry Ind. 39.

Hosiery Ind. 40. Infant's & Children's Wear Ind. 41.

Iron and Steel Ind. 42.

Leather 43. Lumber & Timber Frod. Ind.

Mason Contractors Industry

Men's Clothing Industry

Motion Ficture Industry

Motor Bus Mfg. Industry (Dropped)

Needlework Ind. of Puerto Rico

Fainting & Paperhanging & Decorating

Photo Engraving Industry

Plumbing Contracting Industry

Retail Food (See No. 42)

Retail Lumber Industry

Retail Solid Fuel (Dropped)

Retail Trade Industry

Rubber Mfg. Ind.

Rubber Tire Mfg. Ind.

Silk Textile Ind.

Structural Clay products Ind.

Throwing Industry

Trucking Industry

Waste Materials Ind.

Wholesale & Retail Food Ind. (See No. Si)

Wholesale Fresh Fruit & Veg.

In addition to the studies brought to completion, certain materials have been assembled for other industries. These MATERIALS are included in the series and^are also made available for confidential use within the Division of Review and for in- clusion in Code Histories, as follows:

44. Wool Textile Industry

45. Automotive Parts & Equip,

46. Baking Industry

47. Canning Industry

48. Coat and Suit Ind.

49. Household Goods & Storage, etc. (Dropped)

Ind. 50. Motor Vehicle Retailing Trade Ind.

51. Retail Tire & Battery Trade Ind.

52. Ship & Boat Bldg. & Repairing Ind.

53. Wholesaling or Distributing Trade

L. C. Marshall Director, Division of Review

y <\^\

CONTENTS Pa^e

Foreword 1

CHAPTER I - THE INDUSTRY 2

Definition of the Industry !

History and Development. 2

Competition with Other Industries 3

Manufacturing Operations 3

Total Number of Establishments 5

Number of Establishments by Principal

States 3

Size of Establishment 4

By Value of Product 4

By Number of ".Tage Earners 5

Capital Investment 6

Net Profit or Loss 6

Value of Production by Principal

Product Groups 6

Estimated Total Sales, by Principal

Types of Product 7

CHAPTER II - LABOR AND MATERIALS 9

To tal Annual Eroploymen t c-

Number of Wage Earners by Principal

States 9

Total Annual Payrolls 10

Annual Wages by Principal States 11

Hourly Wages 11

Weekly Hours 12

Weekly Earnings 12

Employment, Hours, and Earnings

Under the Code 12

Labor Cost 14

Materials Used 14

Cost of Materials. 14

CHAPTER III - PRODUCTION AND DISTRIBUTION 15

Value of Production by Principal States • 15

Distribution of Manufacturers' Sales 15

Wholesale Sales 1-

Exports I7

Advertising Media 12

8881 -i-

CONTENTS -(Concluded)

Page

CHAPTER IV - lEAEE PRACTICES 19

CHAPTER V - TUB INDUS THY - GENERAL INFORMATION 22

Trade Associations 22

Labor Organization 22

Imports 23

Effect of the Code 23

-oOo~

8331

TABLE I

TABLE II

TABLE III -

TABLE IV -

TABLE

V -

TABLE VI -

TABLE VII -

TABLE VIII -

TABLE IX -

TABLE X -

TABLE XI -

TABLE XII -

TABLE Ell -

TABLE XIV -

TABLE XV

TABLE XVI

TABLE XVII

TABLES

Faf.-e

Electrical Energy Produced in Central

Stations, for Selected. Tears, 1387-1933 3

Number of Establishments, by

Principal State s 4

Number of Establishments and Value of

Product, Classified by Value of

Product r>er Establishment, 1929.. 5

Number of Establishments and Number of

Wage Earners, Classified by Number of

Wage Earners per Establishment, 1929 5

Total Value of Product by Principal

Product Croups • 7

Estimated Total Sales, by

Principal Type of Product 8

Estimated Total Domestic Sales, by

Principal Type of Product, 1933 and 1934 8

Estimated Total Annual Number of All

Employees, and of Wage Earners 9

Annual Average Number of Wage

Earners, \>?j Principal States 9

Processing Employees, by

Principal States, 1934 and 1935 10

Estimated Total Annual Payrolls of

All Employees , and of Wage Earners 10

- Total Annual Wages, by Principal States 11

- Average Hourly Wages H

- Average Hours Worked per Week 12

- Average Weekly Earnings • 12

- Factory Employment, Payrolls, Hours and Wages, 1933-1934 15

- Relation of Labor Cost to Total Value

of Product 14

-iii-

TABLES (Concluded)

TABLE XVIII - Relation of Cost of Materials

to Total Value of Product 14

TABLE XIX - Value of Production, by

Principal States 15

TABLE XX - Distribution of Sales of

Manufacturing Plants, 1929 1G

TABLE XXI - lluraber of "Electrical" Wholesale Establishments and Value of llet Sales Reported by them, by Principal States, 1929 and 1933 17

TABLE XXII - Value of Exports 17

TABLE XXIII - Advertising Expenditures of Radio

Manufacturers for Radio Broadcasting

and Magazine Adver ti sements IS

ELECTRICAL LIAinJEACTURIilG IiTDUSTEY

Fore-word

The data contained in this Evidence Study have "been obtained chiefly from the Census of Manufactures, the Bureau of Labor Statistics, and the former Code Authority for the Electrical Manufacturing Industry.

As explained in Chapter I, the Census classification for this Industry is not identical with the Code definition, hut the Census data give a good general idea of the Industry as codified.

The Labor data in Tahle XVI (Chapter II ), which were specially compiled "by the Bureau of Labor Statistics in cooper- ation with the ISA, Research and Planning Division, and most of the tables based on information supplied by the former Code Authority, pertain to the Industry as defined by the Code.

Because of the small amount of data available in connec- tion with the section on raw materials, this section has been included in Chapter II.

8881

-2- Chapter I THE INDUSTRY

Definitions of the Industry

The Electrical Manuf acturing Industry is defined in the Code of Fair Competition for the Industry

"..,„. to mean the manufacture for sale of electrical apparatus, appliances, material or supplies and such other electrical or allied products as axe natural affiliates."

In the Census of Manufactures, the "Electrical Machinery. Apparatus, and Supplies" Industry is only roughly comparable with the Code Industry in scope. The Census classification does not cover establishments whose principal products are "electric lighting fixtures, electric signs, or motor driven tools, mechanical refrigerators, washing machines and other machines and appliances constructed with built-in motors." On the other hand, the Census data include establishments covered by codes other than that for the Electrical Manufacturing Industry, although approximately 05-90 per cent of the products in the Census classification in 1929 were covered by the Code. The usual limitation arising from the fact that the Census data do not in- clude establishments having an annual production of less than $5,000 must also be borne in mind.

History and Development

The Industry got its start in the latter part of the Nineteenth Century. Originally used primarily for telegraph and telephone communication, illumine tion, and electric transportation, electricity now plays a vital part in practically all of the activities of modern civilization. Each new use for electricity requires not only additional generating and distributing equip- ment resulting from the increased demand, but also additional electrical equipment and energy for use in the factories making the new electrical product. The growth of the Industry is indicated by the increased output of electrical energy. According to Table I, this has increased from less than 200 million kilowatt hours in 1887 to more than 80 billion in 1933, a four hundred-fold increase.

8881

-3-

TABLE I

Electrical Energy Proceed in Central Stations,

for Selected Years, 1087-1933

(in millions of kilowatt-hours)

Year				Output of Electrical Energy
1887				175
1897				800
1907				5,900
1917				25.400
1927				74,700
1929				91,400
1933				80^100 a/
Source:	Electrical.	florid.	Jamiary 6, 1934,

a/ Estimated on basis of 10 months' operations.

Competition with Other Industries

Competition with other industries is almost entirely limited to gas- operated devices, such as domestic refrigerators, cooking stoves, water heat- ers, industrial furnaces and ovens, and various small household appliances such as percolators and heaters.

Manufacturing; Operations

The Industry is so diversified that the manufacturing operations embrace practically all of the modern processes fcr working materials, and in many subdivisions of the Industry special manuf acturing processes have been de- veloped to meet problems that are peculiar to these subdivisions.

Total Number of Establishments

Although the data presented in Table II are not strictly comparable from year to year (see table footnotes) it may be stated that there has been a marked decline in the number of establishments from 1929 to 1933 with a slight increase in 1935.

Numbor of Establishments by Principal States

In 1933 about 60 per cent, and in 1935 over 75 per cent, of the total establishments were located in the eight states listed. The states having the largest number of establishments in 1935 were New York, Illinois, and Ohio in the order named.

8881

„4-

TAELE II

Number of Establishments, by Principal State

State	1939	1931	1933	1935 a/
U. S. T0hal	1,802	ls5rr3	1,363	1,411
Connecticut	59	58	53	66
Illinois	245	221	181	197
Indiana	57	44	37	34
Massachusetts	106	102	84	89
New Jersey	151	130	99	114
New York	287	268	213	274
Ohio	211	1(98	160	166
Pennsylvania	137	130	118	136
All Others	549	475	408	335
Source: Census	of Manufa	stores,	"Electrical	Machinery,

a/

Apparatus and Supplies," for 1929, 1931, and 1933, and. in addition, "Radio Apparatus and Phonographs" for 1931 and 1933; Code Authority for 1935. Data for 1929 are not exactly com- parable with 1931 and 1933 since phonographs are included in Census data for the latter two years: and since the Census and Code cover- ages are nob identical, the 1935 data supplied by the Code Authority are not strictly compar- able with those fo.." the previous years. Census data do not include establishments having an annual production of less then $5,000.

As of January, 1935„

Size of Establishment

By Value of Product. - Over 60 per cent of the dollar volume of the In- dustry in 1929 was turned out by the 81 plants having an annual production valued at more than $5,000,000. These plants constituted less than 5 per cent of all establishments. (See Table III.)

8881

TABLE III

Number of Establishments and Value of Product, Classify by Value of Product per Establishment, 1929

Value of Product	Establishments	Value of Product
per Establishment		Per Cent	Amount	Per Cent
	Number	of Total	(Thousands)	of Total
All Establishments	1,802	100.0	$2,300,916	100.0
$5,000 to $19,999	264	14,7	3,384	0.2
20,000 to 49,999	262	14.5	8,552	0.4
50,000 to 99,999	234	13,0	16.846	0.7
100,000 to 249,999	322	17.9	52,304	2.3
250,000 to 449,999	200	11.1	69,657	3.0
500,000 to 999,999	180	10.0	131,760	5,7
1,000,000 to 2,499,999	171	9.5	270,968	11.8
2,500,000 to 4,999,999	88	4.9	335,670	14.6
5,000,000 and over	81	4.5	1,411,776	61.4

Source: Census of Manufactures, 1929, "Electrical Machinery, Apparatus, and Supplies." Census data do not cover establishments having an annual production of less than $5,000.

By number of Wage Earners. - On the basis of wage earners, 3 per cent of the establishments — those employing over 1,000 wage earners — accounted for 57 per cent of the total number employed in 1929. (See Table IV.)

TABES IV

Number of Establishments and Mumber of Uage Earne^o,

Number of Wage Earners per Establishment, 1929

Classified

f3 t

Number of Wage Earners per Establishment

Establishments

Number

Per Cent of Total

Wage Earners per Cent of Total

Number

All Establishments

No Wage Earners

1-5

6-20

21 - 50

51 - 100

101 - 250

251 - 500

501 - 1,000

1,001 - 2,500

2,501 and more

1,802

100.0

328,722

100.0

5	0.3	0	0.0
418	23.2	1,496	0.5
486	27.0	5,710	1.7
267	14.8	8,994	2.8
184	10.2	13,269	4.1
224	12.4	34,789	10.6
109	6.1	38 , 834	11.8
53	2.9	36,928	11.3
37	2.0	54,945	16.5
19	1.1	133,757	40.7

Source: Census of Manufactures. 1929, "Electrical Machinery, Apparatus, and Supplies." Census data do not include establishments having an annual production of less than $5,000.

8881

-6-

Capital Investment

The capital investment of the Industry has been estimated by the National Electrical Manufacturers Association at from $1,000,000,000 to $1,250,000,000 in 1929, and from $900,000,000 to $1,150,000,000 in 1933. The estimate is based on reports from 125 companies which account for about two-thirds of the Industry' s sales and from 75 zo 80 per cent of the total number of employees.

Net Profit or Loss

The net profit or loss of the Industry is estimated by the National Electrical Manufacturers' Association to be as follows:

1929 $159,072,571

1932 - 25,987,048 (loss)

1933 - 13,432,046 (loss)

The estimate is based on reports of 125 companies who reported sales amounting to $425,963,000 for 1933, and 140,000 employees, in September, 1933.

Value of Production by Principal Product Groups

The value of production of the Industry as reported by the Census of Manufactures is given by principal product groups in Table V. These figure? show the decline of business in all sub-divisions of the Industry from 1929 through 1933, The most marked decline took place in the products used for industrial equipment.

8881

-7-

TABLE V

Total Value of Product by Principal Product Groups, (>.n thousands)

Product Group	1929		1931		1933
Total	$2,334,246		$1.-172,393		$015,307
Conduit s	53,270		32,835		18,323
Household Apparatus and
Appliances	845485		55,578		35,723
Insulated Tare and Cable	312,592		120,739		81,225
Lamps, Incandescent Filament	85,320		70,502		49,274
Motors	194,846		95,003		55,703
Radio Apparatus and Supplies	411,637		184,750		109,144
Switch Boards, Circuit
Breakers, and Switches	81,201		44,832		14,499
Transformers and Circuit -
Limiting Reactors	77,825		42,742		14,853
Generators	80,932		34,438		IS, 298
Wiring Devices		a/		sJ	16,465
Control Apparatus		a/		a/	14,853
All Others	949,138		490,923		208,931
Source: Census of Manufacture.	s; see source to Table II,	above, for furthe:

details regarding Census data.

a/ Included in "All Others."

Estimated Total Sales, by Principal Types of Product

In Table VI are shown estimates of sales of all products under the Code as prepared by the Code Authority from Census data. Although the items are grouped differently, this table indicates the same general decline shown in Table V. Domestic sales, as shown in Table VII for the years 1933 and 1934, increased from $598,000,000 in the former year to $706,000,000 in 1934,

8881

-8- TABLE VI

Estimated Total Sales "by Principal Type of Product (in thousands)

Type		1929	1931	1933
Total		$2,401,000	$1,235,000	$650,000
Refrigeration		136,000	128,000	89,000
Radio		412,000	163,000	100,000
Appliances		66,000	43,000	25,000a/
Incandescent Lamps	84,000	68,000	48,C0:/r/
Insulated Wire	and Cable	313,000	120,000	61,000a/
Motors and Generators	265,000	125,000	66,000
Telephone and	Telegraph	166,000	113,000	22,000
Electrical Supply	314,000	177,000	77,000a/
All Other		645,000	298,000	162,000

Source: Code Authority for the Electrical Manufacturing Industry.

a/ It will he seen that this figure for total sales is surlier

than the figure reported by the Code Authority (Table VII) for domestic sales.

TABLE VII

Estimated Total Domestic Sales, by Principal

Type of Product, 1933 and 1934

(in thousands)

Type	1933	1934
Total	$598,408	$765,538
Refrigeration	75,544	107,058
Radio	87,245	102,025
Appliances	29,529	45,290
Incandescent Lamps	53,916	59,534
Insulated Wire and Cable	63,000	84,341
Motors and Generators	61,624	73,463
Telephone and Telegraph	3,261	5,089
Electrical Supply	81,380	109,089
All Other	142,909	178,849

Source: Code Authority for the Electrical Manufacturing Industry.

8881

-9-

Cha .tor II

LABOR AID MATERIALS

Total Annual Emjloymen t

A decline of more thin 50 'jer cent was registered between 1929 and 1933 in both total employment and in number of wage earners, according to estimates "by the Code Authority. Abo at one-fourth of this loss was re- covered l^y 1934. Table VIII presents data for the years 1929, 1931, 1933, and 1934.

TABLE VIII

Estimated Total Annual Number of All Employees, and of Wage Earners

Year All Employees Wage Earners

1929 410,000 338,000

1931 265,000 215,000

1933 200,000 155,000

1934 250,000 200,000

Source: Code Authority for the Electrical Manufacturing Industry.

Number of TTage Earners by Principal States

The number of wage earners in the leading states in the years 1929, 1931, and 1933 is shoi.Ti in Table IX. The same concentration in the Northeastern States is indicated as in Tables II, above, and XIX, below. In 1933, over 80 per cent of all wage earners were reported in the eight states listed. Pennsylvania had the highest number, with Ohio, New York and Illinois following in the order mentioned.

TAELE IX Annual Average Number of Wage Earners,

by Princ ipal States

State 1929 1931 1933

	IT. S. Total		328,722		216,596	163,201
	Connecticut		15,225		10,927	9,627
	Illinois		57,347		34, 647	19,174
	Indiana		20,757		13,907	12,072	_/
	Massachusetts		28 , 844		20,055	14,285
	New Jersey		42,193		28,455	12,514	a/
	New York		43,979		27,844	19,272
	Ohio		36,267		22,972	21,243
	Pennsylvania		47,373		32,814	24,312
	All Others		36,737		24,975	30 , 402	_/
Source :	Census cf Manufactures;	see source	to Table II,	above, for further
	details regarding	Census	data.
a/	Data on ''Radios and Phonographs" not	included.
_/	Includes the wage	earners in "Radios	and Phonograwhs" omitted for
8881	Indiana and New Jersey.

Data showing the number of "processing employees, " i. ei, those engaged in direct labor, who constitute about 70 per cent of all employees in the Industry, are presented in Table X for leading states in 1934 end 1935. Although the states do not rank in quite the sane order as that shown for all enployees in the year 1933, the pro rortion accounted for by the eight leading states is about the saif.c,,

TABLE X

Processing Employees, by Principal States, 1934 and 1935

State	1934	1355 a/
U. S. Total	172,114	175,177
Connecticut	8,506	8,657
Illinois	18,157	18,480
Indiana	8,599	8,752
Massachusetts	13,369	13,607
Hew Jersey	20,451	20,815
Hew York	21,250	21,628
Ohio	26,012	26,475
Pennsylvania	25,258	25,703
All Others	30,512	31,055

Source: Cod.e Authority for the Electrical L'anufacturing Industry a/ As of January, 1935.

Total Annual Payrolls

Code Authority estimates of total payrolls of all employees and of wage earners for 1929-1934 are presented in Table XI. In both cases the drop from 1929 to 1933 was more* than two-thirds of the 1929 total. The increase reported in 1934 was slightly more marked for wage earners than for all emoloyees.

TABLE XI Estimated Total Annual Payrolls of All Employees, and of Wage Earners (in thousands)

Year

All Employees

Wage Earners

1929 1931 1933 1934

$620,000 320,000 183,000 255,000

$471,000 242,000 137,000 195,000

Source: Code Author it; Industry.

for Electrical i.ianuf acturing

8881

-11-

Anmial Wages by Principal States

Total traces r?Eid are shown for the eight leading states for 1929, 1931, and 1933 in Table XII. The relative positions of the states changed during the depression: Illinois and Pennsylvania ranked first and second, respectively, in 1929 and 1931. but by 19Z3 Pennsylvania was first and Illinois second.

				TABLE XII
	Total Annual	Wages, by Principal States
				[In thousands)
State			1929	1931	1933
U. S. Total			$456,378	$23-3,634	$144,948
Connecticut			17,732	10,963	7,427
Illinois				95,441	41,782	18,805
Indiana				25,783	14,474	11,090	a/
Massachusetts			41,012	22,752	13,263
Ken Jersejr			54, 639	32,735	11,423	a/
New York				63,718	31,155	16,994
Ohio				46,170	24,564	18,555
Pennsylvania			67,734	36,210	21,032
All Others			44, 149	24,999	26,359	5/
Source:	Census c	f 1	lanufactures; see	•source to Table II, regarding Census data.
	above, for	further details
a/	Data on	"Radi	os and Phonographs" not included.
5/	Includes t	le	wages in "Radios and Phonographs"
	omitted	fo	r Indiana and New	Jersey.
Hourly Wages

Hourly rates in the Industry were slightly higher in 1934 than in 1929, according to two separate sources — the National Industrial Confer- ence Board and the Code Authority. Very little change is indicated in hourly rates during the depression; the large drop in payrolls is apparently to be accoimted for rather by the reduction in employment and the prevalence of part-tine work. Hourly wages, as reported by the two sources, are shown below;

TABLE XIII Average Hourly Wages (Cents per hour)

As Re-oorted by

Year National Industrial Code

Conference Board Authority

1929 62~75 56.0

1951 63.2 57.0

1933 57.1 51.0

1934 64.4 57.0

Source: National Industrial Conference Board, Service Letter; and Code Authority for Electrical Manufacturing Industry.

8881

Weekly Hours

As sho\m in Table XIV, average hours worked per week declined nearly one-third from 1929 to 1934.

TABLE XIV Average Hours Worked per Week

Average Hours Year P9r Week

1929 47°5

1931 38.0

1933 33.5

1934 32.4

Source: Code Authority for the Electrical llanufacturing Industry.

Weekly E^

Although average weekly earnings declined from $26.80 in 1929 to $18.75 in 1934, the 1934 average was slightly greater than in 1933, as indicated in the following table.

	TABLE Average Wee'	XV :ly Earnings
Year				Weekly Earnings
1929 1931 1933 1934				$25.80 21.50 17.25 18.75

Source: Code Authority for the Electrical Manufacturing Industry.

Employment, Hours, and Earnings Under the Code

In addition to the annual data already given, monthly labor data for _

1933 and 1934 are presented in Table XVI, from which to judge the effect ^oi the Code in this field. These data, which were compiled by the Bureau of Labor Statistics in cooperation with the USA, Research and Planning : vision, pertain to the Industry as defined by the Code. The average employment for

1934 and total man-hours are shown to have increased 26 per cent over 1933, while payrolls increased 39 oer cent. During 1934 there was a slight upward change^ in the average hours worked per week, compared with the decrease siiown by the Code Authority figures in Table XIV, above. Average hourly wages in- creased from 55.1 to 58.6 cents, which is a somewhat smaller increase than that reported by the national Industrial Conference Board and the Code Author- ity in Table XIII, above. The increase in average weekly earnings of 60 cents was considerably less than that reported by the Code Authority, but the fig- ures for both 1933 and 1934 were higher than the Code Authority's. To tOu t extent these changes are directly due to the Code rather than other factors affecting the business situation in the latter part of 1933, and in 1934, can- not, of course, be stated.

8881

-13- TABL2 XVI Factory Employment, Payrolls, Hours and Wages, 1933-193'

	Indexes, 1933* >	00	Average Hours Worked Per Week		~	res
Month b/	Employ- ment c/	Pay- rolls c/	Man- Hours d/	Average e/Hourly e/	Average Weekly c/
1933
January	81.7	77.0	71.3	29.7	58.90*		$19.20
February	82.0	78.9	76.8	31.7	55;4'		19.60
March	80.7	75.6	71.6	30.0	56.5		18.72
April	82.0	73.0	79.6	32.8	54.0		18.97
May	86.8	84.8	91.4	55.6	52.. 6		19.48
June	91.9	92.2	102,2	37.6	50.8		19.93
July	96.7	95.9	105.0	36.7	51.4		18.68
August	105.7	107.8	111.2	35.6	54.8		19.27
September	116.5	117.2	114.7	33.3	56.3		19.85
October	126.4	132,1	129.6	34.7	57.3		20.77
November	128.0	134.6	128.6	34.0	56.8		20.66
December	121.6	125.9	117.6	32.7	56.3		19.18
Average	100.0	100.0	100.0	33.7	55.1		19.53
1934
January	113.9	112.0	103.1	32.1	56.8		18.34
February	114.1	115.4	110.6	32.8	56.9		18.60
March	118.6	123.2	117.5	33.5	56.8		19.15
April	123.3	133.5	123.6	33.9	57.7		19.90
May	126.6	142.4	129.5	34.6	58.7		20.69
June	129.2	148.1	133,0	34.8	59.5		20.94
July	128.9	144.2	128.4	33.7	59.7		20.37
August	130.3	147.8	132.2	34.3	59.8		20.68
September	131.8	145.3	129.0	33.1	59.0		2C05
October	131.6	151.3	135.8	34.9	59.2		20.90
November	130.3	148.1	132.1	34.3	59.7		20.60
December	129.2	152.6	133.7	35.0	59.8		21.37
Average	125.7	138.7	126.1	33.9	58.6		20.13
S o ur ce : Unpubl i	shed data	secured by	the Bureau of Labor Statistics	in coopera
tion wi	th the Division of Research and Planning, NRA.
a/ Reporting establi	shments considered to be almo	3t completely covered
by the	Electrical	Manufacturing Code.
b/ Figures	reported	were for the payroll	period nearest the 15th of the
month.
c/ Based upon a repr	esentative	sample covering an	average	of	234 e stab-
lishments and nearly 98,250	employees	in 1933.	The sample	was some-
what larger in 1934.
d/ Computed: Index	of employment times	average hours -.70 rl	:ed	per week
reduced	to 1933=100.
e/ Based upon a representative	sample covering an	average	of	153 estab-

lishments and nearly 61,000 employees in 1933. The sample was some- what larger in 1934.

8881

Labor Cost

The proportion of "hie;: antra; 1 i re of the total value of product

increased" from 19.6 per cent in V. 29 to 23,6 per cent in 1933. Table XVII presents the data as derived from the Census of Manufactures.

TABLE XVII

Relation of Labor Cost to Total Value of Product

Total Value Total Annual 'Japes

Year of Product Amount Per Cent of

(thousands) (thousands) Total Value

1929 $2,334,246 $456,379 19.6 1931 1,172,393 239,634 20.4

1933 615,307 144,948 23.6

Source; Census of Manuf a c ture £ ; see source to Table II, above, for details regarding Census data.

Materials Used

The Electrical Manufacturing Industry uses practically every known mate- rial in the manufacture of its products. The principal materials used are copper, iron, steel, paints and other covering materials, porcelain, and plastics.

Cost of Materials

As shown in Table XVI II the percentage which the cost of materials, in- cluding fuel and electrical energy, is of the total value of product declined somewhat from 1929 to 1951, and then increased to 1933.

TABLE XVIII

Relation of Cost of Materials to Total Value of Product

Total Value Cost of Material

Year of Product Amount Per Cent

(thousands) (thousands) of Total

1929 $2,334,246 $971,017 41.6

1931 1,172,393 425,527 36.3

1933 615,307 270,043 43.9

Source; Census of Manufactures; see source to Table II, above, for details re- garding Census data.

8381

-15-

Chapter III

PRODUCTION AND DISTRIBUTION

Value of Production by Principal States

Table XIX shows that the eight states listed accounted for over 80 per cent of the total value of production in 193?, although, as shown in table II, above, they accounted for only 60 per cent of the total estab- lishments in that year. Ohio was the most important state in 1933, although up until that time it had been outranked by other states.

TABLE XIX

Value of Production, by Principal States (In thousands)

State 1929 1931 1935

U. S. Total $2,300,917 $1,188,153 $668,257

Connecticut 86,894 46,579 31,453

Illinois 435,022 204,644 78,795

Indiana 133,353 73,725 50,380 a/

Massachusetts 184,787 104,326 52,628

New Jersey 292,785 145,663 61,299 a/

New York 280,139 124,081 74,128

Ohio 264,360 144,191 107,151

Pennsylvania 347,141 184,688 91,095

All Others 276,435 150,256 121,328 b/

Source: Census of Manufactures; see source to Table II, above, for

details regarding Census data.

a/

— ' Does not include -oroduction of "Radios and Phonograohs."

b/ Includes "Radios and Phonographs" omitted for Indiana and New Jersey.

Distribution of Manufacttirers1 Sales

The distribution of sales in the Industry for the year 1929 as reported by manufacturing plants to the Bureau of the Census is presented in Table XX. Sales to wholesale dealers and to industrial consumers constituted 70 per cent of the total.

8881

-16- TABLE XX Distribution of Sales of Manufacturing Plants, 1929

Sel1 in Per Cent Number of Plants

Value of Sales Selling

(F.Q.B. factory) Total Exclusively

as indicated

Total

$2,230,361,000 100.0 1,774^

Sales to manufacturers'

ovm wholesale branches 464,148,000 20.8 216 73

Sales to manufacturers'

own retail branches 67,762,000 3.0 49

Sales to dealers:

Uholesalers 700,335,000 31.4 963 370

Retailers 131,033,000 5.9 517 94

Sales to consumers:

Industrial (manufacturers, power companies, rail- roads, etc.) 359,957,000 38.6 857 381

Household 7,128,000 0.3 a 2 46

Source: Bureau of the Census, Distribution of Sales of Manufacturing Plants, 1929.

a/ The total number of manufacturing plants engaged primarily in making electrical machinery end apparatus is 1,802. Of these, 20 do only contract work, and 6 transfer their entire outout to other plants of the same company. Inasmuch as some of the other 1,776 plants sell to more than one type of customer, this figure is less than the total of the figures shown below it.

Wholesale Sales

The number of "electrical" wholesale establishments and the value of net sales made by them in each of ten leading states is given in Table XXI. These figures indicate that more than one-fourth of these establishments were located in the states shown in 1929 and in 1933, and that approximately the same -iroportion of total net sales were made in these states. New York is, of course, by far the most important state, both as to number of establishments and net sales, in each of the years shown.

In using these data it must be borne in mind that they do not cover all sales of electrical goods hut only those reported by the Census in the group labeled "electrical" wholesale establishments, and that not all of these sales as reported are necessarily confined to electrical goods.

8881

-17- TABLE XXI

Number of "Electrical" Wholesale Establishments and Value of Net Sales Reported by them, by Principal States, 1S29 and 1933 SJ

State

Numb p l- of E^tFDli r-nnents 1929 1933

Net Sales (OOP's)

1929

U. S. Total

California

Illinois

Massachusetts

Michigan

Missouri

New York

Ohio

Pennsylvania

Texas

Washington

3,870

392 319 186 169 174 711 264 380 106 98

,232

334 269 176 155 123 565 251 279

52,435,149	$705,411
175,245	47,533
294,329	62,244
109.122	41,579
111,877	40,538
93,763	24,°94
556,953	132,934
211,813	60,312
221 , 681	86,980
57,953	14,855
36,752	7,037

All Others

1,071

565,631

186,405

Source: Census of Wholesale Distribution. 1929. and Censi-.s of American Business, 1953. Wholpsale Distribution, U. S. Summary and State reoorts. The 1933 data do not include establishments having annual sales of less than $1,000.

sJ

"Electrical" wholesale establishments are here defined to include those the major -oart of whose sales are electrical goods and appli- ances, electrical equipment and supplies, radios and radio equipment, and 'electric refrigerators.

Exports

According to Table XXII, exports declined in 1933 to about one-third their 1929 value, but by 1934 had risen to about one-half the 1929 level.

TABLE XXII Value of Exports

Year

Amount

1929

1931 1933 1934

$130,062,818 85,080,455 43,580,279 66,524,800

Bureau of Foreign and Domestic Commerce, Monthly Summary of Foreign Commerce.

RRR1

•18.

Advertising Media

The nature of the advertising media varies with the different products of the industry. Many domestic appliances, for example, are advertised extensively "by the use of the radio, national magazines, sign "boards and newspapers. Other products are advertised only in trade journals or technical magazines. Table XXIII shows the dollar-volume of radio and magazine adver- tising used in the r>ast few years "by the radio manufacturers.

TABLE XXIII

Advertising Expenditures of Radio Manufacturers for Radio Broadcasting and Magazine Advertisements §/

Year Radio Broadcasting Magazine Advertisements

1929 $3,732,000 $5,618,000

1931 910,000 2,754,000

1933 566, uCO 1,296,000

1934 556,000 1,531,000

Source: Prepared from data published in Bureau of Foreign and Domestic Com- merce, Survey of Current Business, as compiled "by Denney Publishing Company, Inc.

a/ Radio data are for the National Broadcasting Oomoany and the Colum- bia Broadcasting System and include only national advertising; mag- azine data represent the cost of advertising of radio manufacturers in all classes of national magazines.

8881

-19-

Chapter IV HtADE PRACTICES

Tlie various unfair trade practices of certain members of the Industry have been outlined by Mr, A. L. Kress, formerly Code Administration Direc- tor of the national Electrical Manufacturers' Association. I3elow are excerpts from a letter to the HRA, dated June 4, 1^55:

"It is believed that the following unfair tra.de practices have, and in some cases still do avail in the industry. It is of course impossible to appraise their extent or magnitude.

A - Selling Below Cost:

"This being one of the provisions incorporated in the basic code, it is reasonable to assume that selling below cost must have been widely prevalent in the industry prior to the approval of the code. This industry was probably no different from other industries. That was the impression when the whole question of selling below cost became such a debated topic in any discussions of the elimination of unfair trade "oractices.

B - Terms and Conditions of Sale:

"The following -oractices having to do with terms and con- ditions of sale all apparently have existed in some degree as evidenced by the frequently erroressed desire to incorporate provisions in supplemental codes dealing with them,

(1) Giving of excessive cash discounts.

(2) The granting of excessive preferred terms of payment which were uneconomic, inconsistent with prevailing commercial terms, and which were obviously intended as a method of reducing the price itself.

(3) The granting of excessive trade discounts not war- ranted by the cost of doing business and the services rendered in return.

(4) The giving of excessive trade-in allowances on certain products, not warranted ~oy the scrap or re- sale value of the product traded in, and which were obviously intended as a method of price cutting.

(5) The practice of making lump sum bids on certain products, where the sub-total was less than the total for the individual items, where such reduc- tions were not warranted by the quantity purchased, and again where the intent was to offer an unbalanced bid or to cut trices.

8881

-20-

(6) The offer or giving of cash allowances or contri- butions towards the payment of advertising of cus- tomers, where such allowances or contributions were not warranted by the value received and which, in effect, served to improperly reduce prices.

C - Selling Methods:

"The following practices having to do with selling all a apparently have existed in some degree as evidenced by the fre- quently expressed desire to incorporate provisions in supple- mental codes dealing with them -

(1) The splitting of commissions by salesmen, particular- ly in the case of sales to municipalities.

(2) The acceptance of returned goods under conditions not warranted by any legal or moral responsibility incurred by the manufacturer.

(3) The giving of secret rebates.

(4) The policy of individual or multiple prices which in effect constitute a discrimination against cus- tomers of the same class through the granting of special concessions. Such special concessions were of course usually known only to the parties involved.

(5) The use of consignment methods or ledger balances, where such methods were used primarily to exclude competitors from certain areas,

(6) Improperly influencing the actions of employees or representatives of customers or potential customers through gifts or otherwise.

(7) The use of advertising which misled or was designed to mislead potential customers.

(8) The acceptance of blanket or requirement orders at prices not warranted ~by the size of the individual shipments made.

(9) Substitution of material in the case of competitive bids not equal to that required in the specif ications themselves, which constituted misrepresentation.

(10) The improper rental of equipment on terms which in effect simply evaded the price at which such equip- ment should have been sold.

(11) The giving of free service or the placing of equip- ment on trial or the unwarranted furnishing of samples all done with the intent of indirectly reducing the price at which such equipment should have been sold,

8331

-21-

(12) The making of lor-; term contracts which did not pro- vide for price adjustment in order to reflect changes in cost.

(13) The guaranteeing against price declines without a corresponding provision guaranteeing to the manu- facturer an adjustment in case of price increase,

(14) The use of an unsound warranty provision, D - Relations with Competitors:

(1) The defamation of competitors and products,

(2) The malting of derogatory statements rith regard to competitors and their policies.

E - Policy with respect to Products:

(1) The marketing of products which fail to conform with recognized standards of safety,

(2) The marketing of products which fail to conform to accepted ratings and performance requirements,

(3) The misbranding of products with intent to deceive customers or potential customers,

(4) The misrepresentation of products with regard to the quality, characteristics or performance,

(5) The imitation of competitors' trade marks for the purpose of misleading customers or potential customers,

(6) The selling of firsts as seconds, or seconds as firsts, with the intent either to cut prices or mislead customers,

"The above lists should, he understood as neither exhaustive nor as implying that all these practices have existed in all bran- ches of the industry at the same time,"

3831

Che >ter V THE INDUSTRY - GENERAL INFORMATION

Trade Associations

The National Electrical Manufacturer s! Association is the dominant trade association in this Industry. It was forned in 1926 by the merger of three then existing associations; nan Ly, El ctrical Manufacturers' Council, formed in 1905; Electric Power Club, formed in 1908; and Associated Manufactur- ers of Electrical Supplies, forned in 1915. Its membership includ.es over 500 companies, representing practically the entire field of electrical manufacture. It is estimated by the Association that its members produce 85 per cent of the production of the entire Industry. The Association was designated in the Code as the "agency for administering, supervising and promoting the performance of the provisions of the Code by the members of the Electrical Manufacturing In- dustry." In addition to its former Code activities, the staff of the Associa- tion renders the membership many other services.

There are a few smaller trade associations that cover only certain product groups, suchas Radio Manufacturers' Association, Electric Porcelain Manufactur- ers1 Association, national Lamp and Shade Manufacturers' Association, and In- candescent Lamp Manufacturers' Association.

Labor Organization

Mr. Avery Laiserson, of the NRA Labor Advisory Eoard Staff, has :re oared the following statement on labor organization in the Electrical Manufacturing Indus try;

"The recognized trade unions claiming jurisdiction in this Industry are: the electric workers, the machinists, the molders, pattern makers and metal polishers. The federal unions have experienced a considerable 3 wtl in numbers under the ISA, particularly in the radio division of the In- dustry. The latter organizations are local unions attached directly to th American Federation of Labor, rather than local chapters of a national craft organization. Federal unions are not restricted to members of one craft or closely allied crafts in an amalgamation, but cover the entire plant from top to bottom. As yet, they have not begun to spread over en- tire industries, but confine themselves to one plant of one company. Liany people in the labor movement believe that a combination of t unions into a national organization on a vertical basis is imminent.

"It is exceedingly difficult to quote any exact figures of union membership. Representation was claimed at the first public hearing on th< Electrical Code for something less than 10,000 workers in the five crafts mentioned above — i.e., that was the number in the unions who had jobs and were -under union agreements. Of course, that was not the only basis of representation. With the growth of -onion membership under the Act and the success of organizing several local federal unions, a much great r number of workers may be said to be directly affiliated with the Federation of Labor. This do«s not include those who might pr F. of L. to represent them rather than the company unions nliich have sps :n u; > in the industry "

8381

Imports

There is some competition from imported electrical goods, especially in the class of products sold in th li lit i '-price and chain stores.

Several months ago, the Code Authority was considering petitioning the President to use his powers under the National Industrial Recovery Act to Un- it the quantities of certain electrical . oods which it was felt were being i - ported to such an extent that domestic production was suffering. The Code Authority felt that there was danger that the increasing ratio to domestic production might "render ineffective or seriously (to) endanger the maintenance11 of the Code. No detailed data are available on this question.

Effect of the Code

Official expressions of opinion as to the effect of the Code were tainable. However, the unofficial consensus seems to be that the Co .e had a stabilizing effect on prices in general and that with a few exceptions, "destructive" price catting had "been graatly reduced. The tern "destructive price cutting" in this instance is considered to nean price cutting that de- moralizes the Industry and results in lowering wages and forcing operation foi long periods without -profit. The exceptions, in every case nentioned, in volved products which could "be produced with very little canital investment and which in nost cases were sold in linited-'orice or chain stores and which vere, therefore, subject to extreme -pressure fron the "buyers of these organi- zations.

fir If . r o r o o

1 m r IPP ■1 1. 0

J 78-4

?

. RECOVERY ADMINISTRATION )IVISION OF REVIEW

EVIDENCE STUDY NO. 12

OF

THE FABRICATED METAL PRODUCTS MANUFACTURING AND METAL FINISHING AND METAL COATING INDUSTRY

Prepared by TRISTRAM J. CAMPBELL

JULY, 1935

PRELIMINARY DRAFT (NOT FOR RELEASE: FOR USE IN DIVISION ONLY)

7)S: 06 08 Oi

\