BOSTON PUBLIC LIBRARY
NATIONAL RECOVERY ADMINISTRATION
DIVISION OF REVIEW
THE ELECTRICAL CONTRACTING INDUSTRY
E. M. MARSH AND J. C. HUMPHREY
(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
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
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
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
Volume of Business Outside Home State .... 17
Productive Capacity 18
Per Cent of Productive Capacity Utilized . . 18
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
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,
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
ELECTRICAL CONTRACTING INDUSTRY
(A Division of the Construction Industry)
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.
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
"(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-
"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.
"(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,
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
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
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.
Number of Electrical Contractors, by Principal
States, 1929 and 1933
U. S. Total
Total, 1C states
Total, other states
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.
Number of Establishments and Value of Business, By Dollar Volume of
Business per Establishment, 1929
Value of Business
Less than $25,000
$25,000 and over
Construction Industry, 1929 , 'Electrical Sub-
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.
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.
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
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.
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
Number of Wage Earners, by Months, in Establishments Whose
Annual Volume of Business was $25,000 and Over, 1929 §J
Number of Wage
Per Cent of
24 , 447
28 , 303
Source: Census report, Construction Industry, 1929 , "Electrical
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
Prevailing Hourly Wage Rates of Electrical Workers
"by Principal Cities
City Prevailing Hourly Wage Rate
1329 1931 1933 1934
Average of 86 cities $ 1.20 $ 1.25 $ 1.08 $ 1.09
San Francisco, Calif.
Jersey City, N. J.
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."
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.
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
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.
Number of Wage Earners and Annual Wages Paid in Principal
States for Establishments Whose Annual Volume of Business
was $25,000 and Over, 1929
Maximum Number of
Wage Earners Re-
ported in any
Amount Per Cent
(ooo 1 s) of Total
U. S. Total
Total, 10 states 1,352
Total, other states 576
Census report, Construction Industry, l c .
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.
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.
Cost of Principal Llaterials, by Principal Product Groups,
for Establishments TTnose Annual Volume of Eusiness
Tfos $25,000 and Over, 1929 a/
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
Census report, Co n s t rue t ion I n cV_i:
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
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.
Value of Production of Electrical Machinery, Apparatus,
and Supplies, ^oy Principal States, 1929
U. S. Total
Total, 10 states
Total, other states
Value of Products
Source: Census of Manufactures, 1929 , "Electrical Machinery, Apparatus,
and Supplies. " Data do not include establishments having an
annual production of less than $5,000.
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.
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.
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
Number of Establishments and. Dollar Volume of Business,
by Principal States, 1929.
tin™ a Bu
1 i sh-
U. S. Total
Total, 10 states 8,561
Total, 39 other
Source: Census report, Construction Industry, 1929 ,
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.
Percentage Distribution of Number of Establishments
and Dollar Volume of Business, by Principal States,
onts Reporting a Bus
U. S. Total
Total, 10 states 67.9
Source: Census report, Construction Industry, 1929 , "Electrical Sub-
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.
Volume of Easiness Transacted Outside Home State,
by Establishments 7/hose Volume of Business
was $25,000 and Over, by Principal States, 1929
U. S. Total
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,
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.
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/
"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
"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)
"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
"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
Group II consists of rules condemning trade abuses, unethical and waste-
ful practices. 1/
'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
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-
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.
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
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.
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:
Membership in the International Brotherhood of
Electrical Workers, for Selected Years, 1397-1934
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
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.
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.
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
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,
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