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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 


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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 -icLurtry • 

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  Division1  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  Transacted 

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. 

Research  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  Industries 

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  year0 

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 
(ooo1 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,  lc. 
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 


-13- 

Chapter  III 
MATERIALS:  EAW  AND  SEMI-PROCESSED 


Principal  Materials  Used 

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- 


Sourccs  of  Principal  Materials 

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.,ttmay  "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  Code 

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  practice  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  Which  Have  Become  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  C0de  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, 

8840 


-25- 

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. 

Experts  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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