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Full text of "Evidence study"

BOSTON PUBLIC LIBRARY 



3 9999063175374 



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 TN DIVISION ONLY) 



TEE EVIDENCE S ": : IES 

The EVIDENCE STUDIES were originally planned as a ;athering 
evidence bearing upon various legal issues which arose under the National 
Industrial Recovery Act. 

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

The full list of the Evidence Studies is as follows; 



1. Automobile Manufacturing Ind. 23. 

2. Loot and Shoe Mfg. Ind. 24. 

3. Bottled Soft Drink Ind. 25. 

4. Builders' Supplies Ind. 25. 

5. Chemical Mfg. Ind. 27. 

6. Cigar Mfg. Industry 28. 

7. Construction Industry 2'3 . 

8. Cotton Garaent Industry 33. 

9. Dress Mfg. Ind. 31. 

10. Electrical Contracting Ind. 32. 

11. Electrical Mfg. Ind. 33. 

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

13. Fishery Industry 35. 

14. Furniture Mfg. Ind. 36. 

15. General Contractors Ind. 37. 

16. Graphic Arts Ind. 33. 

17. Gray Iron Foundry Ind. 3g. 
13. Hosiery Ind. - . 

19. Infant's & Children's Wear Ind. 41. 

20. Iron and Steel Ind. 42. 

21. Leather 43. 

22. Lumber & Timber Prod. Ind. 



Mason Contractors Industry 

| n's Clothing Industry 

Motion Picture Industry 

Motor Bus Mfg. Industry (Dropped) 

Needlework Ind. of Puerto Rico 

Painting & Paperhanging & Decorating 

Photo Engraving Industry 

Plumbing Contracting Industry 

Retail Pooa (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. 

> wing Industry 
Trucking Industry 
Waste Materials Ind. 

Wholesale & Retail Food Ind. (See No, 
Wholesale Fresh Fruit & Veg. 31) 



In addition to the studies brought to conmletion, 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 inclusion in Code Histories, as follows; 



44. Wool Textile Industry 

45. Automotive Parts & Equip. 

46. Baking Industry 

47. Canning Industry 
43. Coat and Suit Ind. 



49. Household Goods & Storage, etc. (Drop-' 

Ind. 50. Motor Vehicle Retailing Trade Ind, ped) 

51. Retail Tire 4 Battery Trade Ind. 

52. Ship & Boat 31dg. & Repairing Ind. 

53. Wholesaling or Distributing Trade 



L. C. Marshall 
Director, Division of Review 



CONTENTS 

Pa 



Foreword , . . . 1 

Chapter I - THE NATUBE OF THE INDUSTRY 2 

Definition of the Industry 2 

Number of Contractors 3 

Trade Association Data 3 

Code Authority Data 3 

Census Data • 3 

Number of Contractors by Principal States . . 3 

Size of Establishments 4 

Multi-Plant Operations 5 

Capital Investment 5 

Number of Failures 5 

Dollar Volume of Business Transacted .... 5 

Code Authority Data 5 

Census Data ...... 5 

Research and planning Data 5 

Competitive Industries 

Products cf the Industry 

Chapter II - LABOR STATISTICS . 

Number of Employees 7 

Code Authority Data 7 

Census Data 7 

Seasonality of Employment 7 

Estimated Total Annual Wages 8 

Hourly Wage Rates 8 

Hours Worked 9 

Employees Under 16 Years of Age 10 

Employment and Wages by principal States . . 10 
Cost of Labor as a Percentage of Value 

of Business * o . . . . 11 

Chanter III - MATERIALS: RAW AND SEMI-PROCESSED 12 

Principal Materials Used 12 

Cost of Materials 12 

Sources of Principal Materials 13 

Purchases of Equipment 14 

Source of Equipment 14 

Cost of Materials as a Percentage of 

Value of Business 14 

Chapter IV - PRODUCTION AND DISTRIBUTION 15 

Dollar Volume of Business by Principal 

States 15 

Volume of Business Outside Home State .... 17 

Productive Capacity 18 

Per Cent of Productive Capacity Utilized . . 18 

(Continued) 

8840 -i- 



CONTENTS (Cont'd) 

Pa~e 

Chapter V - TRADE PRACTICES 19 

tlnfair Tx'ade practices Prevalent 

Prior to Code 19 

Unfair Tra.de Practices Under the Code 21 

Unfair Trade Practices Thich Have 

Bec^r.e Detrimental . , 21 

Spread of Unfair Trade Practices From 

One Area to Another 21 

Effect of Unfair Practices 21 

Chapter VI - TIF, INDUSTRY - GENERAL INF0FJ1ATI0N 22 

History of Industry 22 

Operations of the Industry 22 

History of Trade Associations 22 

History of Relationship Between Labor 

and Management „ 23 

Financial Condition 24 

Effect of Code 24 

Ercperts in the Industry 25 



TABLES 

Page 
Table I - Number of Electrical Contractors, 

by Principal States, 1929 and 1933 4 

Table II - Number of Establishments and Value 
of Business, by Dollar Volume of 
Business oer Establishment, 1929 4 

Table III - Number of Wage Earners, by Months, in 
Establishments Whose Annual Volume of 
Business was $25,000 and Over, 1929 ! 

Table IV - Prevailing Hourly Wage Rates of 

Electrical Workers by Principal Cities 9 

Table V - ITumber of Wage Earners and Annual 
Wages Paid in Principal States for 
Establishments Whose Annual Volume 
of Business was $25,000 and Over, 1929 .... 11 

Table VI - Cost of Principal Materials, by 
Principal Product Groups, for 
Establishments Whose Annual Volume of 
Business was $25,000 and Over, 1929 12 

Table VII - Value of production of Electrical 

Machinery, Apparatus, and Supplies, 

by Principal States, 1929 13 

Table VIII - Relationship of Total Labor Cost and 

Total Cost of Materials to Total Value 

of Business for Establishments Whose 

Annual Volume of Business was 025,000 

and Over, 1929 14 

Table IX - Number of Establishments and Dollar 

Volume of Business, by Principal States, 

1929 16 

Table X - Percentage Distribution of Number of 
Establishments and Dollar Volume of 
Business, by Principal States, 1929 17 

Table XI - Volume of Business Transacted Outside 
Home State, by Establishments Whose 
Volume of Business was $25,000 and Over, 
by Principal States, 1929 18 

Table XII - Membership in the International Brother- 
hood of Electrical Workers, for Selected 
Years, 1897-1934 23 



8840 



ELECTRICAL CONTRACTING INDUSTRY 
(A Division of the Construction Industry) 

Fore-.'ord 

The statistical data available for the Electrical Contracting 
Industry are rather limited, and should be considered largely in the 
nature of estimates rather than statements of fact. The discussion 
which accompanies each table in the study will sarve to explain the 
defects in the data. 

Three sources of information were used in the study; the Census 
report on the Construction Industry, 1929 (Electrical Sub-Contractors 
Group), Codo Authority data, and two surveys (1929 and 1933( made by the 
Electrical Trade Publishing Company, an affiliate of the Electrical Con- 
tractors Association, which sponsored the Code. For all practical pur- 
poses the respective Code and Census classifications of the Industry 
are closely comparable. 



8840 



-IP- 
Chapter I 
THE NATURE OF TFE IFDURTRY 
p;efi yitiv - i of I -i cLurtry • 

The Electrical Contracting Industry, a Division of the Construction 
Industry, is defined in the Code of Fair Competition for that Industry, 
approved April 19, 1934, Article I, as foliov/s: 

"The term 'Electrical Contracting Division 1 or 'this Division' as used 
herein is defined to mean the erecting, installing, altering, repairing, 
servicing, or maintaining electric wiring, devices, appliances, or equip- 
ment, including the purchasing from suppliers and tne selling of manu- 
factured parts and products incorporated in such installation, provided 
that; 

"(a) The provisions of this Chapter shall not apply to work for 
telephone or telegraph service where such work is an integral part of the 
communication system owned and operated "by a telephone or telegraph company 
in rendering its duly authorized service as a telephone and telegraph com- 
pany. 

"The provisions of this Chapter shall apply to the installing of tele- 
phone and telegraph caoles and wires in raceways or conduits in "buildings 
in the process of construction where, pursuant to existing or future agree- 
ments or understandings, such work is performed "by others than telephone 
or telegraph operating companies. 

"Should controversies arise as to whether or not such agreements or 
understandings exist such controversies shall "be referred for decision to 
such "board in the national Recovery Administration as may have "been, or 
may "be designated "by the Administrator. 

»("b) The provisions of this Chapter shall not apply to electrical 
work for the generation and primary distribution of electric current, or 
the secondary distribution system ahead of the meter, where such work 
is an integral part of the system owned and operated "by an electric 
light and power company in rendering its duly authorized service, is 
done "by such a company's own employees and/or is work on customer's 
premises necessary for the rendering of safe and continuous service, 
"but the provisions of this Chapter shall apply to the installation, 
permanent alteration or repair, or maintenance of electric wiring, de- 
vices, appliances or equipment of private owners other than an electric 
light and power company not elsewhere excluded in this Section. 

"(c) -The provisions; of this Chapter shall not apply to the sale 
or rental of electrical signalling apparatus or systems for protection 
against fire, "burglary or robbery, or to the servicing of such signalling 
apparatus or systems, where such work is an integral part of such a sys- 
tem owned and serviced or maintained "by an individual firm, corporation, 
or other form of enterprise engaged in such "business. 



8840 



"(d) The provisions of this Chapter shall not apply to manufacturing 
or assembling in the manufacturer's plant, nor to servicing or repairing 
of electrical apparatus, appliances or equipment "by a manufacturer or by 
an electric repair shop, but the provisions of this Chapter shall apply 
to the installation of all new electrical work on the customer's premises 
not elsewhere excluded in this Section. 

"An electric repair shop, for the purposes of this paragraph, shall 
mean an establishment engaged in the repairing, rewinding and recondition- 
ing of motors, generators, transformers and other electrical apparatus. 

"(e) The provisions of this Chapter shall not apply to the main- 
taining, servicing or repairing of existing installations of electric 
wiring, devices or equipment, or the moving and relocating of equipment 
within a plant or property, performed by an owner or tenant (not for hire), 
individually or with his permanent employee or employees for electrical 
maintenance work within his own property, but the provisions of this 
Chapter shall apply to the installation of all new electrical work not • 
elsewhere excluded in this Section." 

Number of Contractors 

Trade Association Data . - According to data prepared by the Electrical 
Trade publishing Company, the total number of Electrical Contractors in 
1929 was 25,004. By 1933 this number had fallen to 17,002. (See Table I, 
below. ) 

The decline in the number of contractors is probably not so great as 
these figures suggest, for they are not strictly comparable. It is prob- 
lematical whether the 1933 survey data adequately covered the smaller 
contractors. Due to the decrease in the volume of business, many con- 
tractors who in 1929 employed wage earners were, in 1933, performing 
practically all their work themselves, and many electricians who were 
formerly employed by electrical contractors had gone into business for 
themselves. 

Code Authority Data . - These data, which show 27,379 electrical con- 
tractors in 1935 (14,247 registered and 13,132 unregistered), of which 
approximately 10,000 were inactive, appear to substantiate to some degree 
the data just cited for 1933. However, these data were also prepared by 
the Electrical Trade Publishing Company and were presumably compiled from 
the same records as were used for the 1929 and 1933 figures. 

Census Data. . - The Census of Construction figure showing 12,615 
electrical contracting establishments in 1929 is considered low, due 
mainly to incomplete coverage among establishments, especially among the 
smaller ones. 

Number of Contractors By Frincipal States 

Table I shows the approximate number of Electrical Contractors in 
the ten leading states for 1929 and 1933, as compiled by the Electrical 
Trade publishing Company. More than 60 per cent of all contractors were 
located in these ten states in each of the years shown. 



TABLE I 

Number of Electrical Contractors, by Principal 
States, 1929 and 1933 



State 



1S29 



Number 



Per Cent 
of Total 



1933 



Number 



per Cent 
of Total 



U. S. Total 

California 
Illinois 
Massachusetts 
Michigan 
New Jersey- 
New York 
Ohio 

Pennsylvania 
Texas 
Wisconsin 

Total, 1C states 

Total, other states 



25,004 

1,645 
1,801 
1,429 
1,418 

999 
3,303 
1,029 
2,149 

667 
1,066 

15,506 

9,498 



100.0 



17,002 



6.6 


1,118 


7.2 


1,224 


5.7 


971 


5.7 


964 


4.0 


679 


13.2 


2,246 


4.1 


699 


8.5 


1,461 


2.7 


453 


4.3 


725 


62.0 


10,540 


38.0 


6,462 



100.0 

6.5 
7.2 
5.7 
5.7 
4.C 
13.2 
4.1 
8.6 
2.7 
4.3 

62.0 

38.0 



Source: Electrical Trade Publishing Company, Electrical Contracting , 
February, 1931, and statistics presented at Code Hearing, 
January 22, 1934. 



Size of Establishments 



Table II shows establishments classified as to whether their dollar 
sales in 1929 were more or less than $25,000, according to Census of Con- 
struction data. Due to the incompleteness of the Census data, these figures 
can be considered as designating only roughly the proportion of the total 
number of establishments doing an indicated dollar volume of business in 
1929. No comparable data are available for a subsequent period. 

TABLE II 

Number of Establishments and Value of Business, By Dollar Volume of 
Business per Establishment, 1929 



Dollar Volume 


Number 


of 


Establishments 


Value of Business 


of Business 


Number 




Per Cent 


Amount 


Per Cent 


per Establishment 






of Total 


(000' s) 


of Total 


Total 


12,615 




100.0 


8291,550 a/ 


100.0 


Less than $25,000 


10,687 




84.7 


93,063 a/ 


31.9 


$25,000 and over 


1,928 




15.5 


198,487 


68.1 



Census report, 
contractors." 



Construction Industry, 1929 , 'Electrical Sub- 



a/ 



8840 



Dollar volume of business of establishments in the "Less than $25,000 
group" was estimated for each state on the basis of averages per estab- 
lishment as developed from a smaller number of establishments which re- 
ported dollar volume. 



Multi-Plant Q-oorat ions 

There are few instances in the Electrical Contracting Industry where 
more than one office or shop is ] bly maintained "by a member. The 
concern which is reputed to be the largest in the Industry maintains a 
regular office in four cities in four different states (New York, Chicago, 
Detroit, and Boston); and a few other concerns sre known to have one or 
two branch offices, hut the practice is not general. 

Capital Investment 

Ho statistics are available relating to the capital investment in 
the Electrical Contracting Industry. It is difficult to collect reliable 
data on this subject because of the large number of small concerns and 
single individuals engaged in the Industry, many of which have practically 
no capital invested. 

Some indication of the capital investment may be obtained from the 
value of equipment reported by the Census of Construction for establishments 
whose dollar volume of business was $25,000 and over in 1929. The booh, 
value of equipment, as of December 31, 1929, for the 1,923 establishments 
whose dollar volume was $25,000 and over, amounted to approximately 
$5,241,000. These establishments also reported a volume of business of 
$198,487,000, thus indicating that they averaged sales of approximately 
$38.00 in 1929 for every dollar of equipment on hand at the end of the year. 

Number of Failures . 

No data are available on the number of failures in the Industry or 
the amount of liabilities involved. 

Dollar Volume of Business Transacte d 

Code Authority Data . - There are no thoroughly reliable data on the 
dollar volume of business transacted in this Industry. Laurence W. Davis, 
Executive Director of the former Electrical Contractors Code Authority, 
has estimated the 1929 volume at $400,000,000, without, however, indicating 
the basis of this estimate. 

Censtis Data . - The dollar volume of business estimated for the 
12,615 establishments which reported in the Census of Construction, am nts 
to ^291,550,000. This amount cannot be considered as representing the 
total volume of the Industry, due to the inadequate coverage of establish- 
ments ^'j the Census. 

R esearch and Planning Data . - Prom data collected by the Research 
and Planning Division relative to collective bargaining (area) agreements 
for this Industry, a volume of $6.14 per capita of population in 1929 has 
been obtained as applicable to urban communities. Arbitrarily selecting 
$2.00 per capita as reasonable for the small communities not classified as 
urban and for the strictly rural population, and applying these per capita 
figures to the respective urban and rural population as of 1930, we arrive 
at a total volume of business for ID: 9 of $ . 1,000,000. 

8840 



This figure is believed to be more nearly correct than the Code Author- 
ity estimate because the total annual wages which are derived from a volume 
of" $531,000,000 by a? lyin : I Le ratio of wages to value of business, 1/ 
is sufficient to provide the 125,000 iployees of th Industry' (as estimat- 
ed by the Code Authority and supported oy other data) with an average annual 
wage, in 1929, of $1,320. A volume of $400,000,000, using the same ratio,, 
yields an average wage of only $391, which is lower than it is reasonable 
to believe was received. 

Competitive In dustries 

This Industr: r does not compete directly with other industries in 
the usual sense of the word. However, the Industry would find itself at 
times in contact with Industries such as the Railway Safety Appliance Indus- 
try, the members of which insisted that the" do their own installation work. 
One such instance was in connection with the installation of safety 
appliances in the new New York Subway. When the jurisdiction dispute 
arose it was taken to the national Recovery Board which decided that 
the -provisions of the Railway Safety Appliance Industry Code should 
govern, except as to a few minor details. Otherwise, the competition 
existing between electrical equipment and appliances is rather among manu- 
facturers, wholesalers and retailers, than among contractors who make 
installations. There is a form of competition encountered by contractors, 
however, involving home owners, industrial and commercial establishments, 
and other groups which ■perform: electrical work themselves or with their 
own employees. It was with the intention of restricting this practice 
that the Code for the Electrical Contracting Industry was designed to 
cover all installation work, with certain specific exceptions, so that 
contractors would be in a. position to meet this competition. 

Products of the .Industry 

There is practically no industry in the country which does not 
utilize the services of the Electrical Contracting Industry, Being a 
service industry it has no "-products" except completed electrical 
installations. 



1_/ From Census of Construction data this ratio was found to be approxi- 
mately 31 per cent for establishments reporting in the "over 25,000" 
group in 1929. 



8S40 



Chapter II 
LABOR STATISTICS 



Number of Employees 



Code Authority Data . - Statistical data for the total number of wage 
earners in the Industry must also b3 based largely upon estimates. The 
former Code Authority estimated 125,000 wage earners in 1931. Rough checks 
on the relation of labor cost to the total value of product and membership 
records of the International Brocherhood o^ .Electrical Workers seem to sub- 
stantiate such a figure. 

Census Data . - The Census of Construction, 1929, showed that the maxi- 
mum number of wage earners employed in the Industry in any one month was 
approximately 28,400 for establishments whose volume of business was $25,000 
and over. This figure is subject to the qualif ications of the Census data 
as previously explained, 

Seasonality of Employment 

The available data on seasonal employment are limited to the Census of 
Construction data for 1929 on the number of wage earners in establishments 
whose volume of business was $25,000 and o\er. flhile there are definite 
limitations to the Census data for the purpose of showing Industry totals, 
comparisons between related parts of the same data are statistically sound. 
The relation of the number of wage earners in oach of the months to the 
number in the maximum month, when generalized in the form of a "per cent of 
maximum month" (see column so headed in Table III), show the relative changes 
in number of wage earners which took place among the larger establishmentr 
in 1929. 



TABLE III 

Number of Wage Earners, by Months, in Establishments Whose 
Annual Volume of Business was $25,000 and Over, 1929 §J 



Month 



Number of Wage 
Earners a/ 



Per Cent of 
Maximum Month 



Average 

January 

February 

March 

April 

May 

June 

July 

August 

September 

October 

November 

December 



26,608 

24,524 
23,849 
24 , 447 
26,414 
27,127 
27,821 
28,168 
28 , 303 
28,419 
28,226 
26,780 
25,218 



93.6 

86.3 
83.9 
86.0 
92.9 
95.4 
97.9 
99.1 
99.6 
100. C 
99.3 
94.2 
88.7 



Source: Census report, Construction Industry, 1929 , "Electrical 
Subcontractors. " 

a/ Number of wage earners for each month for the 1,928 establish- 
ments reporting an annual business of more than $25,000 were 
estimated from data furnished by 1,748 of these establishments. 
The figures represent the number employed on the 15th day of 
the month or the nearest representative day. 

Estimated Total Annual Wages 

The wages paid to wage earners in 1929 by establishments whose dollar 
volume was $25,000 and over, as reported in the Census of Construction, 
amounted to $61,683,000. By relating the above wages to the value of busi- 
ness of these establishments ($198,487,000) it is possible to estimate the 
total wage bill for the Industry, assuming that the NBA, Research and Plan- 
ning Division estimate of $531,000,000 adequately measures the Industry's 
total value of production. On this basis, total wages in 1929 are estimated 
to have amounted to approximately $165,000,000. 

Hourly Wage Rates 

Prevailing hourly wages rates usually are not so reliable as average 
hourly earnings, because in arriving at an hourly wage rate representative 
of one city or a group of cities no consideration is given to the number 
of wage earners receiving the different wage rates. In the absence of any 
data on average hourly earnings, it is necessary, however, to use prevailing 
hourly wage rates. These rates are given for ten principal cities in Table 
IV. 



8840 



TABLE IV 

Prevailing Hourly Wage Rates of Electrical Workers 
"by Principal Cities 



1.13 


1.13 


1.00 


.90 


1.63 


1.70 


1.50 


1.50 


1.50 


1.50 


1.25 


1.25 


1.50 


1.50 


1.G0 


1.33 


1,63 


1=81 


1.81 


1.50 


1.50 


1.50 


1.19 


1,38 


1.13 


1.31 


1.25 


1.25 


1.13 


1.38 


1.33 


1.38 


1.20 


1,25 


1.25 


1.25 


1.65 


1.65 


1.40 


1.40 



City Prevailing Hourly Wage Rate 

1329 1931 1933 1934 

Average of 86 cities $ 1.20 $ 1.25 $ 1.08 $ 1.09 

San Francisco, Calif. 
Chicago, 111. 
Boston, Mass, 
Detroit, Mich. 
Jersey City, N. J. 
Cleveland, Ohio 
Philadelphia, Pa. 
Dallas, Texas 
Milwaukee, Wise. 
Hew York City 

Average of above 

10 cities 1.40 1.47 1.30 1.31 

Average of other 

7» cities 1.18 1.22 1.05 1.06 

Source: Builders' Association annual report, "Wage Rates Per Hour for Build- 
ing Trades in the Principal Cities." 

Hours Worked 

Because of the seasonal nature of employment in this Industry and the 
irregularity of employment even during the rush periods, it is impossible to 
secure data on the number of hours worked per week or the number of weeks 
worked per year 

From studies made by the Research and Planning Division, NRA, in con- 
nection with a number of collective bargaining agreements in this Industry, 
representing, in 1929, a volume cf business of $75,720,000 and involving 
14,839 employees, it is estimated that the average number of hours worked 
per year were as follows: t 

1929 - 1,057 (20.3 per week U) 

1933 - 371 ( 7.13 per week!/) 

The figure for 1933 is based upon equal distribution of employment 
among all those who were employed in 1929. The actual number of hours 
worked by those who were employed in 1933 averaged considerably more than 
371 since many employees were totally unemployed during that year. 

1/ The total number of hours divided by 52. 

8840 



-l'J- 



Employees under 15 Years of Af 



There is believed to be practically no employment of persons under the 
age of 16 in this Industry. Since more than 75 per cent of the wage earners 
are skilled workers, and the balance are apprentices or helpers who have 
some degree of skill, there is little opportunity for child labor to exist. 
The only work for which children could be used is office work and a small 
number of boys might be found on the clerical force as office boys. 

Employment and Tfcges by Principal States 

The only available statistics of employment and wages, by states, 
were those presented in the Census of Construction, 1929, for establishments 
whose dollar volume was $25,000 and over. Table V shows the proportion of 
total wage earners and of total wages paid among the larger establishments 
in the ten principal states during 1929. Data for subsequent years are 
not available. 

Average wages derived from data in the following table are of no prac- 
tical value except insofar as they represent the maximum which those partic- 
ular employees averaged while in the employ of the reporting establishments. 
Because of the large turnover of labor in this Industry, and the fact that 
the wages of part-time employees cannot be separated from those of full-time 
employees, the number of employees reported on a given day of any month is 
not necessarily representative of the total number employed during the month. 
Furthermore, the maximum monthly figure reported during the year does not 
necessarily represent the total number of individuals employed and sharing 
in the total wage bill. Paradoxically, the maximum number of employees shown 
during the year merely represents the minimum number of individuals employed 
by the reporting firms. 



8840 



-11- 



TA3LE V 



Number of Wage Earners and Annual Wages Paid in Principal 

States for Establishments Whose Annual Volume of Business 

was $25,000 and Over, 1929 



State 



Number of 
Establishments 



Maximum Number of 
Wage Earners Re- 
ported in any 

Month a/ 



lumber 



Per Cent 
of Total 



Total Annual 
Wages Paid 



Amount Per Cent 
(ooo 1 s) of Total 



U. S. Total 



1,928 



28,419 



100,0 



$61,683 



100.0 



California 

Illinois 

Massachusetts 

Michigan 

New Jersey 

New York 

Ohio 

Pennsylvania 

Texas 

Wisconsin 



195 

180 

128 

109 

35 

266 

119 

140 

65 

65 



Total, 10 states 1,352 
Total, other states 576 



2,090 


7.4 


3,698 


6,0 


3,860 


13.6 


9,333 


15,1 


1,775 


6.3 


3,610 


5.9 


2,080 


7.3 


3,917 


6.3 


823 


2.9 


1,836 


3.0 


6,880 


24.2 


17,586 


28.5 


1,455 


5.1 


2,813 


4.6 


2,200 


7.8 


3,949 


6.4 


326 


2.9 


1,425 


2.3 


717 


2.5 


1,196 


1.9 


32,706 


79.9 


49,363 


80,0 


5,713 


20.1 


12,320 


20,0 



Source: 



Census report, Construction Industry, l c . 
tors." 



'Electrical Subcontrac- 



a/ Maximum number of employees for the 1,928 establishments reporting 
an annual business of more than $25,000 was estimated from data 
furnished by 1,748 of these establishments, which show the number 
employed as of the 15th, or nearest representative day, of each 
month. The month of maximum employment was not the same in all 
states, due to varying seasonal conditions. 

Cost of Labor as a Percentage of Value of Business 

From the data supplied the Census by the 1,923 establishments reporting 
an annual volume fo $25,000 and over in 192S, the wage payments were found 
to constitute 31 per cent of the total value of work done. (See Table 
VIII below. While no specific data are available for subsequent years, it 
is the opinion of Laurence W. Eavis of the former Electrical Contractors 
Code Authority, and of the Research and planning Division, NRA, that there 
has not been any appreciable change in this relationship. 



8840 



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Chapter III 
MATERIALS: EAW AND SEMI-PROCESSED 



Principal Materials Us ed 

All the materials used in the Electrical Contracting Industry are 
serai-processed in the sense that they are manufactured products used in 
the fabrication of complete electrical installations. Practically all fcl 
materials purchased, as reported by the Census of Construction, are in- 
cluded in the group of materials "Electrical Appliances and Supplies, " 
which includes such items as wiring fixtures, lamps, telephones, radios, 
and annunciator systems. 

Cost of Materials 

The total cost of materials in the Industry in 1929 is estimated at 
approximately $232,000,000. This estimate was obtained by talcing the 
ratio of cost of materials to value of business for the establishments 
with an annual volume of $25,000 and over (Census of Construction data), 
and applying this ratio to the ICA Research and Planning Division's 
estimated volume of $531,000,000 for the entire Industry. 

Table VI shows expenditures by principal product groups for the 
establishments whose annual volume in 1929 was $25,000 and over. As 
already indicated the principal materials used were included in the 
"Electrical Appliances and Supplies" group, which accounted for 96 per 
cent of the cost of all materials purchased. Ho details are available, 
however, on a division of this group into individual products. 



TABLE VI 
Cost of Principal Llaterials, by Principal Product Groups, 
for Establishments TTnose Annual Volume of Eusiness 
Tfos $25,000 and Over, 1929 a/ 



Product Grouo 



Cost of 

Materials a/ 

(000 's) 



Per Cent 
of Total 
Cost of 
laterials 



Total 
Electrical appliances and supplies 
Heading and ventilating equipment 
Pipe, cast iron, sheet and tube steel 
Plumbing and gas fitting equipment 
Wire cable, guards, and fencing 



All others 



$87,768 
84,355 

1,049 
947 
340 
291 

786 



100.0 
96.1 
1.2 
1.1 
0.4 
0.3 

0.9 



Source: 



Census report, Co n s t rue t ion I n cV_i: 
contractors. " 



"Electrical Sub- 



8840 



a/ "Jot all the 1,923 establishments falling in the "$25,000 and over" group 
reported data showing the distribution of the total cost of materials 
among the various -oroduct groups. Those establishments which did report 
such data accounted for 95.6 per cent of the total cost of materials, 
and on the basis of these reports the breakdown for the entire 1,926 lias 
been estimated. 



-13- 



Sour ccs of P rinc ipal M aterials 

An approximate indication of the sources of the principal materials 
used by the Electrical Contracting Industry, and included in the "Electri- 
cal Appliances and Supplies ;roup., tt may "be obtained "by showing the distri- 
bution, by states, of the manufacture of similar products as indicated by 
the Census of Manufactures group, "Electrical Machinery, Apparatus, and 
Supplies." (See Table VII.) 

There are, however, two factors which seriously limit the use of these 
data for this purpose. In the first -olace, the group of products used by 
this Industry is not so inclusive as the Census of Manufactures grouo of 
products with which it is most nearly comparable. In addition, the -oroducts 
actually used by this Industry account for only a relatively small propor- 
tion — estimated at from 5 to 10 per cent — of the total value of such 
products turned out. 

TABLE VII 

Value of Production of Electrical Machinery, Apparatus, 
and Supplies, ^oy Principal States, 1929 



U. S. Total 

California 

Illinois 

Massachusetts 

Michigan 

New Jersey 

New York 

Ohio 

Pennsylvania 

Texas 

Wisconsin 

Total, 10 states 

Total, other states 



Value of Products 


Per Cent 


(000's) 


of Total 


$2,300,916 


100.0 


42,131 


1.8 


435,022 


18.9 


184,787 


8.0 


62,394 


2.7 


292,786 


12.7 


280,139 


12.2 


264,360 


11.5 


347,141 


15.1 


917 


0.1 


43,533 


2.1 


1,953,210 


85.1 


342,706 


14.9 



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



8840 



-14- 

Purchases of Equipment 

Equipment -purchases reported to the Census of Construction by the 
1,928 establishments whose annual volume of business was $25,000 or over 
in 1929 grossed $1,256,000. lib statistics have been collected regarding 
equipment purchases in more recent --ears. 

As will he noted from the inventory value of equipment reported hy 
these 1,928 establishments, which was $5,241,000 at the end of 1929, equip- 
ment is not a major element of cost in this Industry. It consists mostly 
of hand tools such as pliers, screw drivers, saws, hammers, soldering irons, 
and the like. Some automotive equipment, battery charging apparatus, and 
other miscellaneous equipment is used hy certain members of the Industry, 
but major items of machinery are not usually required. 

Source of Ecurnnent 

The greater part of the equipment which is used in the Industry 
probably is purchased from dealers within the trade area of the user, and 
data bearing on the source of such equipment are not available. 

Cost of Materials as a Percentage of Value of business 

Based on the Census of Construction reported from the 1,928 establish- 
ments in the"$25,000 and over" group which reported a total volume of busi- 
ness in 1929 of $198,437,000, cost of materials constituted 44 per cent of 
the value of construction work. (See Table VIII.) While no reliable sta- 
tistics are available for more recent years, it is the opinion of Laurence 
¥. Davis of the former Electrical Contractors Code Authority that the 
relationship between the respective costs of labor, materials, and overhead 
has not changed appreciably during the last six years. 

TABLE VIII 

Relationship of Total Labor Cost and Total Cost of Materials 

to Total Value of Business For Establishments Whose Annual 

Volume of Business Was $25,000 and Over, 1929 



Amount Per Cent of Total 
(COO's) Value of Business 



Total Value of Business $198,437 

Total Wages Paid 61,683 31.1 

Total Cost of Materials 87,768 44.2 



Source: Census report, Construction Industry 1929 , "Electrical 

Subcontractors." Based upon data for 1,928 establishments. 



8840 



-15- 

Chapter IV 

PRODUCTION AND DISTRIBUTION 

Dollar Volume of Business by Principal States 

In this Industry, "production" is represented by contracts made and 
performed and the best measure of "production" is therefore the dollar 
volume of these contracts. 

The dollar volume of business, by states, for 1929 is presented in 
Table IX, and a percentage distribution is given in Table X. For allocating 
the volume of business to states, the Census Bureau used the post-office 
addresses of reporting establishments and the volume of business in any 
state consequently represents the amount of business of establishments whose 
business offices were located in that state, regardless of whether all their 
business was transacted in that state. (See also Table XI, below.) 

Although the total volume of business as reported by the Census of Con- 
struction amounted to approximately only 55 per cent of the NBA, Research and 
Planning Division's estimate for the Industry, the relative proportion of the 
dollar volume transacted in the different states is believed to be represent- 
ative of the Industry as a whole. The total value of business transacted by 
establishments whose volume was less than $25,000 in 1929 was estimated on 
the basis of averages per establishments, as developed from a sample number 
of establishments which reported such data. 

The Electrical Contracting Industry, being highly decentralized, has no 
centers of activity other than those caused by concentration of population. 
The relative volume of work in various states roughly approximates the pro- 
portion of the population in those states, with the industrial states having 
a somewhat higher- than^average volume per capita, and agricultural states a 
lower one. 



8840 



.16- 



TABLE IX 



Number of Establishments and. Dollar Volume of Business, 
by Principal States, 1929. 









Establishments Re"oor 


tin™ a Bu 


siness of 




Total 


Less 
Number 


than $25,000 
Value a/ 


$25, CCO 
Numbe r 


and Over 




Number 


Value a/ 


Value of 


State 


of 


(C00»s) 


of 


of Busi- 


of 


Business 




Estab- 




Estab- 


ness 


Estab- 


(CCO's) 




1 i sh- 




lish- 


(CCO's) 


lish- 






ments 




ments 




ments 




U. S. Total 


12,615 


$291,550 


10,687 


$93,063 


1,928 


$193,437 


California 


1,129 


24,380 


934 


8,953 


195 


15,427 


Illinois 


775 


32,698 


595 


5,757 


130 


26,941 


Massachusetts 


954 


17,147 


826 


6,348 


128 


10,299 


Michigan 


811 


18,239 


702 


5,434 


109 


12,805 


New Jersey- 


592 


11,021 


507 


4,666 


85 


6,355 


New York 


1,747 


59,661 


1,431 


12,064 


266 


47,597 


Ohio 


715 


15,515 


596 


5,461 


119 


10,054 


Pennsylvania 


1,075 


22,630 


935 


8,574 


140 


14,053 


Texas 


331 


8,390 


266 


2,715 


65 


5,675 


"Jisconsin 


432 


7,928 


367 


3,186 


65 


4,742 



Total, 10 states 8,561 
4,054 



Total, 39 other 
states 



217,509 7,209 



73.941 3,478 



63,659 



1,352 153,948 



576 44,539 



Source: Census report, Construction Industry, 1929 , 
ors." 



"Electrical Subcontract- 



i/ Dollar volume of business of establishments in the "Less than 

$25,000" group was estimated for each state on the basis of aver- 
ages per establishment as developed from a smaller number of 
establishments which reported dollar volume. 



8840 



-17- 
TABLE X 

Percentage Distribution of Number of Establishments 

and Dollar Volume of Business, by Principal States, 

1929 a/ 





T< 


jtal 


Establishm 


onts Reporting a Bus 


iness of 




Less than 
Number 


$25,000 
Value of 


$25,000 
Number 


and Over 


State 


Numbe r 


Value of 


Value of 




of 


Busi- 


of 


Busi- 


of 


Busi- 




Estab- 


ness 


Estab- 


ness 


Estab- 


ness 




lishments 




lishments 




lishments 




U. S. Total 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


California 


9.0 


3.4 


8.7 


9.6 


10.1 


7.8 


Illinois 


5.1 


11.2 


5.6 


6.2 


9.3 


13.6 


Massachusetts 


7.6 


5.9 


7.7 


7.4 


6.6 


5.2 


Michigan 


6.4 


6.2 


6.5 


5.8 


5.6 


6.4 


New Jersey- 


4.7 


3.8 


4.7 


5.0 


4.4 


3,2 


New York 


13.9 


20.5 


13. 9 


13.0 


13.8 


24.0 


Ohio 


5.7 


5,3 


5.6 


5.9 


6.2 


5.1 


Pennsylvania 


8.5 


7.7 


8.8 


9.2 


7.3 


7.1 


Texas 


2.6 


2.9 


2.5 


2.9 


3.4 


2.8 


Wisconsin 


3.4 


2.7 


3.4 


3.4 


3.4 


2.4 



Total, 10 states 67.9 



67.5 



63.4 



70.1 



Total, other 
states 



31.5 



22.4 



Source: Census report, Construction Industry, 1929 , "Electrical Sub- 
contractors." 

a/ The basic data for which the percentage distribution is shown in 
this table are those presented in Table IX, just above. 



Volume of Business Outside Home State 

Data showing the amount of business transacted outside the home state 
during 1929, by establishments whose annual volume was $25,000 and over, are 
shown in Table XI. 

Business transacted outside the home state, that is, outside the state 
wherein the home office of the contractor is located, consists generally of 
work done in adjacent states or work done by branches located in other 
states, but covered by the parent company's report. Since in this Industry 
the number of establishments having branches is snail, work done under the 
latter arrangement is considered of minor importance for this Study. 



8840 



-18- 

TABLE XI 

Volume of Easiness Transacted Outside Home State, 

by Establishments 7/hose Volume of Business 

was $25,000 and Over, by Principal States, 1929 



■ 


Number 


Dol.Ur Volume 


(000' s) 


per Cent 


State 


of 


Total 


In Home 


Outside 


of Total 




Estab- 




State 


Home 


Dollar 




lishments 






State 


Vo lurae 
Outside Home 
State 


U. S. Total 


1,928 


$198,487 


$181,666 


$16,821 


8.5 


California 


195 


15,427 


15,251 


176 


1.1 


Illinois 


180 


26,941 


23,958 


2,983 


11.1 


Massachusetts 


128 


10,299 


9,280 


1,019 


9.9 


Michigan 


109 


12,805 


12,376 


429 


3.4 


New Jersey 


85 


G.355 


6,208 


147 


2.3 


New York 


26 o 


4^,397 


41,233 


6,364 


13.4 


Ohio 


119 


10,054 


9,562 


492 


4.9 


Pennsylvania 


140 


14,053 


13,152 


901 


6.4 


Texas 


C5 


5,675 


5,482 


193 


3.4 


'Tisconsin 


65 


4,742 


4,634 


108 


2.3 



Total, 10 states 1,352 
Total, other states 576 



153,948 141,136 12,012 8.3 

44,539 40,530 4,009 9.0 



Source: Census report, 
tractors. " 

Productive Capacity 



Construction Industry, 1929, "Electrical Subcon- 



The productive capacity of the Industry is limited only by the man- 
power available. Since equipment and machinery, and consequently, capital, 
are not the important factors which they are in manufacturing industries, 
the capacity of the Electrical Contracting Industry is measured rather by 
the available labor supply. The Industry is capable of performing an annual 
volume far in excess of that performed in any past year, providing sufficient 
labor power is available. 

Per Cont of Productive Capacity ?&ilized 

Since the man-power which may be capable of performing the work of the 
Industry is not known, and productive capacity can therefore not be measured, 
the per cent of productive capacity utilized can not bo stated. It will vary 
considerably from one locality to another, depending upon the character of 
the area, climate, and other factors. 



884 



-19- 

Chapter V 

TRADE PRACTICES 

Unfair Trade Practices Prevalent Prior to Co de 

On March 18, 1931, members of the Electrical Contracting Industry met 
in Kansas City in a conference authorized by the Federal Trade Commission 
to discuss unfair trade practices and plans for their elimination. There 
resulted the follo?)if,g rule s( Group I) which became legally binding upon the 
members of the Industry, l/ 

"Group I" 

"Rule 1. ..Vilfully inducing or attempting to induce the breach 
of existing contracts between competitors and their customers by any 
false or deceptive means whatsoever, or interfering with or obstruct- 
ing the performance of any such contractual duties or services by any 
such means, with the purpose and effect of unduly hampering, injuring, 
or embarrassing competitors in their businesses, is an unfair trade 
practice. 

"Rule 2. Tllfully enticing away the employees of competitors 
vith the purpose and effect of unduly hampering, injuring, or embarrass- 
ing competitors in their businesses is an unfair trade practice. 

"Rule 3. The defamation of competitors by falsely imputing to 
them dishonorable conduct, inability to perform contracts, question- 
able credit standing, or by other false representations, or the false 
disparagement of the grade or quality of their goods, with the tendency 
and capacity to mislead or deceive purchasers or prospective purchasers 
and the tendency to injuriously affect the business of such competitors, 
is an unfair trade practice. 

"Rule 4. The selling of goods below cost with the intent and with 
the effect of injuring a competitor and where the effect may be to sub- 
stantially lessen competition or tend to create a monopoly or to un- 
reasonably restrain trade is an unfair trade practice. 

"Rule 5. The practice of shipping or delivering products which do 
not conform to the samples submitted or representations made prior to 
securing the orders, without the consent of the purchasers to such sub- 
stitutions, and with the effect of deceiving or misleading purchasers 
and the tendency to injuriously affect the business of competitors, 
is an unfair trade practice. 



T] Federal Trade Commission, Tro.de prac tice Conferences (June 30, 1933) 
p. 106, 

8840 



-20- 

"Rule 6. The practice of using materials or methods of installation 
not in accordance with the applicable governmental laws, rules, and 
regulations obtaining in the territory affected, with the tendency in 
injuriously affect the business of competitors, is an unfair trade 
practice. 

"Rule 7. The secret oayment or allowance of rebates, refunds, 
commissions, or unearned discounts, whether in the form of money or 
otherwise, or secretly extending to certain purchasers special services 
or privileges not extended to all purchasers under like terms and con- 
ditions, with the intent and with the effect of injuring a competitor 
and where the effect may be to substantially lessen competition or 
tend to create a monopoly or to unreasonably restrain trade, is an 
unfair trade practice. 

"Rule 8. For ?ny person, firm, or corporation knowingly to aid or 
abet another in the use of unfair trade practices is an -unfair trade 
practice. " 

Group II consists of rules condemning trade abuses, unethical and waste- 
ful practices. 1/ 

•Group II 

'1. .The inducing o r attempting to induce an architect, owner, or 
builder to reveal to any bidder on a competitive job information rela- 
tive to bids already received — which infornation would give the 
favored bidder an advantage in the preparation of his own "bid. 

2. To induce or attempt to induce an architect, O'-'ner, or builder 
to reveal to a bidder the amounts and conditions of any bid received on 
a competitive job, with a view to giving the favored concern an oppor- 
tunity to meet or cut below the lowest bid, whether the favored concern 
was one of the original bidders or not. 

3. To mislead or deceive any bidder as to the amounts and conditions 
of other bids or with any other false information for the purpose of in- 
ducing him to cut his own. 

4. Surreptitiously obtaining information relative to competitors' 
bids in the preparation of one's own bids. 

5. The making of fake or fictitious bids for the purpose of de- 
ceiving competitors and securing undue advantage. 

6. It is a frequent practice for electrical contractors to submit 
bids to general contractors who in turn use the lowest acceptable price 
from the several trades in making up their bids on a general contract. 
Many general contractors after sec iring the general contract then reopen 
the bidding for the same operation, commonly known as 'shopping', which 
practice involves deception and misrepresentation lowering the standard 
and quality of electrical installation and bailding construction. 



17 For the full statement of which this is a paraphrasing, see Federal 

Trade Commission, Trade Practice Conferences (June 30, 1933), pp. 106-107 



-21- 

Unfair Trade Practices Under the Code 

To some extent the above practices continued under the Code, but rep- 
resentatives of the former Code Authority and of its New York City Adminis- 
trative Committee have stated that there was a considerable improvement 
under the Code. 

Unfair Trade practices W hich Have Be come Detrimental 

Those unfair trade practices which were most detrimental to the 
Industry in the opinion of such men as Laurence W. Davis, Executive Director 
of the former Code Authority, and Mr. Allan Coggeshall of Hatzel & Buehler, 
Inc., and Mr, J. G, Livingston, president of J. G. Livingston Company, 
both of New York, and representing two of the oldest electrical contracting 
firms in the country, have been; bid-shopping, bid-peddling, and price- 
cutting. 

Spread of Unfair Trade practices From One Area to Another 

There are no known instances of a specific unfair trade practice 
originating in a particular area and spreading to others. Those practices 
which are prevalent have grown up within the Industry over a long period 
of time and can hardly be traced to any one region. They probably started 
in the larger cities where the competition has been the greatest, and it 
is there that they have continued to be most harmful. 

Effect of Unfair Practices 

The effect of all those practices which involve unfair bidding practices 
such as price-cutting, has been to reduce the profits of both those that re- 
sort to the unfair methods and all other contractors in the field, with the 
natural result of unsatisfactory work, poor materials, and the like. 



-23- 

Chapter VI 

THE INDUSTRY - GENERAL INFORMATION 

History of Industry 

The Electrical Contracting Industry is hardly more than fifty years 
old, having had its beginning shortly after the invention of the electric 
lamp "by Thomas Edison in 1878, and the erection of the first central power 
station in New York in 1882. 

For a time practically all the installation work involved in the early 
domestic and industrial systems was performed "by employees of the utility 
companies, tut it was not long before individuals entered into the business 
of making electrical installations. 

The growth of the ElQCtrical Contracting Industry can be measured some- 
what by the increase in electrical energy production, which amounted to 
2,500,000,000 kilowatt hours in 1902, 1/ and by 1929 had risen to 
90,084,000,000 kilowatt hours. 2/ Data collected by the Edison Electric 
Institute show that during this same period the number of wired homes multi- 
plied 42 times until ;iow over 7(?< par ceat.af-ail homc-'s i'n the'' o.:lte.\ States 
:.-^.'.U-ed. 

No radical changes in methods employed by the Industry have been made 
since its inception. Such changes as have occurred in methods are the re- 
sult of gradual improvement in technique, equipment, and materials. Since 
the Industry depends largely upon individual skill with hand tools, there 
has not beon great opportunity for broad change in the method of speration. 

Operations of the Industry 

The operation of the Industry consists of the assembling and installa- 
tion on the premises of customers of electric wiring, apparatus, or appli- 
ances, and the repairing and servicing of existing installations. 

History of Trade Associations 

The only national trade association in this Industry is the National 
Electrical Contractors' Association, with headquarters at 420 Lexington 
Avenue, New York City. This organization sponsored the "ode for the Indus- 
try, and its General Manager, Laurence 17. Davis held the office of Execu- 
tive Director of the former Code Authority. 

The Association was organized in 1901, with 47 charter members, and by 
1920 had increased its membership to about 2,000. Due to the practice of 
dropping members who were delinquent in dues at the end of each yaar, the 
membership of the Association has been limited to those who were willing to 
take an active interest in the affairs of tho Industry. In May, 1935, the 
rolls of the organization contained only 1,200 names, of whom nearly half 
would have been dropped at the end of the year for non-payment of dues 

1/ Bureau of the Census. 

2/ Edison Electric Institute. 

8840 



-23- 

except for the revived interest resulting from Code formulation. In Janu- 
ary, 1934, the membership had increased to 2, 133, and in January, 1935, 
there were 2,826 dues-paying members. 

History of Relationship Between Labor and Management 

The International Brotherhood of Electrical Workers, organized in St. 
Louis in 1891, is the only national organization of workers in this Indus- 
try. It is the second largest union in the building trade, "being exceeded 
in membership only by- the Carpenters' Union. Tht? growth in membership of 
the Brotherhood is shown in the following table: 

TABLE XII 

Membership in the International Brotherhood of 
Electrical Workers, for Selected Years, 1397-1934 



Year 



Membership 



1897 
1905 
1915 
1920 
1925 
1929 
1933 
1934 



1,700 

21,000 

30,300 

139,200 

142,000 

142,000 

94,100 

113,500 



Source: Eor years 1897 to 1925 from W. Haber, 
Industrial Relations in the Building 
Industry (1930); 1929 data from Bureau 
of Labor Statistics, Handbook wf American 
Trade Unions ; 1933 and 1934 data as re- 
ported by the American Eedoration of Labor 
in its Reports of proceedings of Annual 
Conventions. 

Only about half of the present membershipof the union is estimated to 
be engaged in the work of the Electrical Contracting Industry in the United 
States, the balance being either Canadian members, or linemen, cable splic- 
ers, power-house employees, telephone operators, and other groups whose 
work is outside the contracting field. 

On January 26, 1920, afiser about two years of preliminary negotiations, 
a joint committee composed of five representatives from the International 
Brotherhood of Electrical Workers and five from the National Association of 
Electrical Contractors and Dealers 1/ met to formulate a plan to improve the 
relationship between employers and employees. 



The result of this action was the organization of the "Council on In- 
dustrial Relations for the Electrical Construction Industry of the United 
States and Canada." In a pamphlet, the Second and Revised Edition of which 

1/ How known as the National Electrical Contractors' Association. 
C840 



-24- 

was authorised March 30, 1931, the Council e:cplained its policy as differing 
from so-Called arbitration "boards, "in that it professes to "be a court of 
justice and not merely a court of arbitration. It proceeds on the theory 
that arbitration involves compromise, which seems to mean in some minds 
adding up the claims on both sides of a dispute and dividing the sum by 
two, while judicial settlement involves the application of definite and 
certain principles without any accomodation between the parties." 

TJhile leaving the settlement of controversies to the local unions and 
contractors where possible, the Council undertakes the adjustment of dis- 
putes on appeal by these agencies. It is composed, as originally, of five 
members from each of the two participating organizations. These have equal 
vote, and there is no so-called "impartial" chairman. To be binding on the 
disputants, decisions of the Council must be unanimous, although in cases of 
disagreement the opinions of the majority and minority are made available 
for the guidance of the involved parties in future negotiations. 

At the present time, only the union shop employers of the rational 
Electrical Contractors' Association who are associated in a subsidiary 
organization known as the Electrical Guild of North America, participate 
in and support the Council. 

It is difficult to describe the relations between employers and em- 
ployees in the Industry as a whole, since they have not been uniform through- 
out the country. Each city or locality has had its special problems. In 
some regions relations have been cordial and in others, numerous disputes 
and strikes have occurred, but it is probable that, as in the case of some 
other building trades, there has been a greater degree of cooperation in 
this Industry than in industries outside the building trades. This is 
largely because of the fact that a great number of employers have been em- 
ployees in the past, and, in many cases, continue to perform manual work 
under their employer status. 

Financial Condition 

The financial condition of the Industry is difficult to measure because 
of the great number of small units. There are no data available relating to 
net income, although the Census of Construction reports for 1,718 firms, 
whose gross volume of business in 1929 was $184,289,366, indicate a balance 
of $11,857,000 for miscellaneous items of overhead and profit after all 
major expenses have been paid. It is probable that this margin was consid- 
erably reduced during the years of the depression prior to HRA, and that 
some part of that loss has been restored as a result of previsions in the 
Electrical Contracting Industry Code, which prohibited selling below individ- 
ual cost. However no data on this point are available for years subscouent 
to 1929* 

Effect of Code 

Because this Industry is so closely related to the Construction Industry 
as a whole, the C de had little effect on the volume of business which is 
largely dependent on the activity in the building field. The establishment 
of a minimum skilled wage rate, maximum hours of work, and other labor condi- 
tions, tended somewhat to stabilize working conditions in the Industry, and, 

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in the opinion of Laurence Davis of the former* Code Authority, the trade 
practice provisions curtailed the price-cutting and other unfair practice: 
which were prevalent before the Cede was adopted. 

Ex perts in the Industry 

The following persons, all with long experience in the Industry, are 
familiar with conditions in the Industry and are known as experts: 

Laurence W. Davis, Executive Director, 
Former Electrical Contractors Code Authority, 
420 Lexington Avenue, New York City 

J. G. Livingston, President, 

J. G. Livingston Company, 

420 Lexington Avenue, New York City 

John L. Flagg, Fresident, 
~atson~Flagg Engineering Corporation, 
140 Cedar Street, New York City 

1.1. H. Hedges, Director of Research, 
International Brotherhood »f Electrical Workers, 
1200 15th Street, N. W. , . Washington, D. C. 

L. K. Comstock, president, Council on Industrial Relations 

for the Electrical Construction Industry, 
71 Broadway, New York City 



8840* 



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