NATIONAL RECOVERY ADMINISTRATION
DIVISION OF REVIEW
THE ELECTRICAL MANUFACTURING INDUSTRY
J. R. PIKE
(NOT FOR RELEASE: FOR USE IN DIVISION ONLY)
THE EVIDENCE STUDY SERIES
The EVIDENCE STUDIES were originally planned as a means of gathering evidence
■Bring upon various legal issues which arose under the 'National Industrial Re-
These studies have value quite aside from the use for which they were originally
intended. Accordingly, they are now made available for confidential \ise within the
Division of Review, and for inclusion in Code Histories.
The full list of the Evidence Studies is as follows:
Automobile Manufacturing Ind. 23.
.Boot and Shoe Mfg. Ind. 24.
Bottled Soft Drink Ind. 25.
Builders' Supplies Ind. 26.
Chemical Mfg. Ind. 27.
Cigar Mfg. Industry 28.
Construction Industry 29.
Cotton Garment Industry 30.
Dress Mfg. Ind. 31.
Electrical Contracting Ind. 32.
Electrical Mfg. Ind. 33.
Fab. Metal Prod. Mfg., etc. 34.
Fishery Industry 35.
Furniture Mfg. Ind. 36.
General Contractors Ind. 37.
Graphic Arts Ind. 33.
Gray Iron Foundry Ind. 39.
Hosiery Ind. 40.
Infant's & Children's Wear Ind. 41.
Iron and Steel Ind. 42.
Lumber & Timber Frod. Ind.
Mason Contractors Industry
Men's Clothing Industry
Motion Ficture Industry
Motor Bus Mfg. Industry (Dropped)
Needlework Ind. of Puerto Rico
Fainting & Paperhanging & Decorating
Photo Engraving Industry
Plumbing Contracting Industry
Retail Food (See No. 42)
Retail Lumber Industry
Retail Solid Fuel (Dropped)
Retail Trade Industry
Rubber Mfg. Ind.
Rubber Tire Mfg. Ind.
Silk Textile Ind.
Structural Clay products Ind.
Waste Materials Ind.
Wholesale & Retail Food Ind. (See No. Si)
Wholesale Fresh Fruit & Veg.
In addition to the studies brought to completion, certain materials have been
assembled for other industries. These MATERIALS are included in the series and^are
also made available for confidential use within the Division of Review and for in-
clusion in Code Histories, as follows:
44. Wool Textile Industry
45. Automotive Parts & Equip,
46. Baking Industry
47. Canning Industry
48. Coat and Suit Ind.
49. Household Goods & Storage, etc. (Dropped)
Ind. 50. Motor Vehicle Retailing Trade Ind.
51. Retail Tire & Battery Trade Ind.
52. Ship & Boat Bldg. & Repairing Ind.
53. Wholesaling or Distributing Trade
L. C. Marshall
Director, Division of Review
CHAPTER I - THE INDUSTRY 2
Definition of the Industry !
History and Development. 2
Competition with Other Industries 3
Manufacturing Operations 3
Total Number of Establishments 5
Number of Establishments by Principal
Size of Establishment 4
By Value of Product 4
By Number of ".Tage Earners 5
Capital Investment 6
Net Profit or Loss 6
Value of Production by Principal
Product Groups 6
Estimated Total Sales, by Principal
Types of Product 7
CHAPTER II - LABOR AND MATERIALS 9
To tal Annual Eroploymen t c -
Number of Wage Earners by Principal
Total Annual Payrolls 10
Annual Wages by Principal States 11
Hourly Wages 11
Weekly Hours 12
Weekly Earnings 12
Employment, Hours, and Earnings
Under the Code 12
Labor Cost 14
Materials Used 14
Cost of Materials. 14
CHAPTER III - PRODUCTION AND DISTRIBUTION 15
Value of Production by Principal States • 15
Distribution of Manufacturers' Sales 15
Wholesale Sales 1-
Exports I 7
Advertising Media 12
CHAPTER IV - lEAEE PRACTICES 19
CHAPTER V - TUB INDUS THY - GENERAL INFORMATION 22
Trade Associations 22
Labor Organization 22
Effect of the Code 23
TABLE III -
TABLE IV -
TABLE VI -
TABLE VII -
TABLE VIII -
TABLE IX -
TABLE X -
TABLE XI -
TABLE XII -
TABLE Ell -
TABLE XIV -
Electrical Energy Produced in Central
Stations, for Selected. Tears, 1387-1933 3
Number of Establishments, by
Principal State s 4
Number of Establishments and Value of
Product, Classified by Value of
Product r>er Establishment, 1929.. 5
Number of Establishments and Number of
Wage Earners, Classified by Number of
Wage Earners per Establishment, 1929 5
Total Value of Product by Principal
Product Croups • 7
Estimated Total Sales, by
Principal Type of Product 8
Estimated Total Domestic Sales, by
Principal Type of Product, 1933 and 1934 8
Estimated Total Annual Number of All
Employees, and of Wage Earners 9
Annual Average Number of Wage
Earners, \>?j Principal States 9
Processing Employees, by
Principal States, 1934 and 1935 10
Estimated Total Annual Payrolls of
All Employees , and of Wage Earners 10
- Total Annual Wages, by Principal States 11
- Average Hourly Wages H
- Average Hours Worked per Week 12
- Average Weekly Earnings • 12
- Factory Employment, Payrolls, Hours
and Wages, 1933-1934 15
- Relation of Labor Cost to Total Value
of Product 14
TABLE XVIII - Relation of Cost of Materials
to Total Value of Product 14
TABLE XIX - Value of Production, by
Principal States 15
TABLE XX - Distribution of Sales of
Manufacturing Plants, 1929 1G
TABLE XXI - lluraber of "Electrical" Wholesale
Establishments and Value of llet
Sales Reported by them, by
Principal States, 1929 and 1933 17
TABLE XXII - Value of Exports 17
TABLE XXIII - Advertising Expenditures of Radio
Manufacturers for Radio Broadcasting
and Magazine Adver ti sements IS
ELECTRICAL LIAinJEACTURIilG IiTDUSTEY
The data contained in this Evidence Study have "been
obtained chiefly from the Census of Manufactures, the Bureau of
Labor Statistics, and the former Code Authority for the Electrical
As explained in Chapter I, the Census classification for
this Industry is not identical with the Code definition, hut the
Census data give a good general idea of the Industry as codified.
The Labor data in Tahle XVI (Chapter II ), which were
specially compiled "by the Bureau of Labor Statistics in cooper-
ation with the ISA, Research and Planning Division, and most of
the tables based on information supplied by the former Code
Authority, pertain to the Industry as defined by the Code.
Because of the small amount of data available in connec-
tion with the section on raw materials, this section has been
included in Chapter II.
Definitions of the I ndustry
The Electrical Manuf acturing Industry is defined in the Code of Fair
Competition for the Industry
"..,„. to mean the manufacture for sale of electrical
apparatus, appliances, material or supplies and such other
electrical or allied products as axe natural affiliates."
In the Census of Manufactures, the "Electrical Machinery. Apparatus,
and Supplies" Industry is only roughly comparable with the Code Industry in
scope. The Census classification does not cover establishments whose
principal products are "electric lighting fixtures, electric signs, or motor
driven tools, mechanical refrigerators, washing machines and other machines
and appliances constructed with built-in motors." On the other hand, the
Census data include establishments covered by codes other than that for the
Electrical Manufacturing Industry, although approximately 05-90 per cent of
the products in the Census classification in 1929 were covered by the Code.
The usual limitation arising from the fact that the Census data do not in-
clude establishments having an annual production of less than $5,000 must
also be borne in mind.
History and Development
The Industry got its start in the latter part of the Nineteenth Century.
Originally used primarily for telegraph and telephone communication, illumine
tion, and electric transportation, electricity now plays a vital part in
practically all of the activities of modern civilization. Each new use for
electricity requires not only additional generating and distributing equip-
ment resulting from the increased demand, but also additional electrical
equipment and energy for use in the factories making the new electrical
product. The growth of the Industry is indicated by the increased output
of electrical energy. According to Table I, this has increased from less
than 200 million kilowatt hours in 1887 to more than 80 billion in 1933, a
four hundred-fold increase.
Electrical Energy Proceed in Central Stations,
for Selected Years, 1087-1933
(in millions of kilowatt-hours)
Jamiary 6, 1934,
a/ Estimated on basis of 10 months'
Competition with Other Industries
Competition with other industries is almost entirely limited to gas-
operated devices, such as domestic refrigerators, cooking stoves, water heat-
ers, industrial furnaces and ovens, and various small household appliances
such as percolators and heaters.
The Industry is so diversified that the manufacturing operations embrace
practically all of the modern processes fcr working materials, and in many
subdivisions of the Industry special manuf acturing processes have been de-
veloped to meet problems that are peculiar to these subdivisions.
Total Number of Establishments
Although the data presented in Table II are not strictly comparable from
year to year (see table footnotes) it may be stated that there has been a
marked decline in the number of establishments from 1929 to 1933 with a slight
increase in 1935.
Numbor of Establishments by Principal States
In 1933 about 60 per cent, and in 1935 over 75 per cent, of the total
establishments were located in the eight states listed. The states having
the largest number of establishments in 1935 were New York, Illinois, and
Ohio in the order named.
Number of Establishments, by Principal State
U. S. T h a l
l s 5 r r3
Apparatus and Supplies," for 1929, 1931, and
1933, and. in addition, "Radio Apparatus and
Phonographs" for 1931 and 1933; Code Authority
for 1935. Data for 1929 are not exactly com-
parable with 1931 and 1933 since phonographs
are included in Census data for the latter
two years: and since the Census and Code cover-
ages are nob identical, the 1935 data supplied
by the Code Authority are not strictly compar-
able with those fo.." the previous years. Census
data do not include establishments having an
annual production of less then $5,000.
As of January, 1935„
Size of Establishment
By Value of Prod uct. - Over 60 per cent of the dollar volume of the In-
dustry in 1929 was turned out by the 81 plants having an annual production
valued at more than $5,000,000. These plants constituted less than 5 per
cent of all establishments. (See Table III.)
Number of Establishments and Value of Product, Classify
by Value of Product per Establishment, 1929
Value of Product
Value of Product
$5,000 to $19,999
20,000 to 49,999
50,000 to 99,999
100,000 to 249,999
250,000 to 449,999
500,000 to 999,999
1,000,000 to 2,499,999
2,500,000 to 4,999,999
5,000,000 and over
Source: Census of Manufactures, 1929, "Electrical Machinery, Apparatus, and
Supplies." Census data do not cover establishments having an
annual production of less than $5,000.
By number of Wage Earners . - On the basis of wage earners, 3 per cent
of the establishments — those employing over 1,000 wage earners — accounted
for 57 per cent of the total number employed in 1929. (See Table IV.)
Number of Establishments and Mumber of Uage Earne^o,
Number of Wage Earners per Establishment, 1929
f 3 t
No Wage Earners
21 - 50
51 - 100
101 - 250
251 - 500
501 - 1,000
1,001 - 2,500
2,501 and more
38 , 834
Source: Census of Manufactures. 1929 , "Electrical Machinery, Apparatus,
and Supplies." Census data do not include establishments having
an annual production of less than $5,000.
The capital investment of the Industry has been estimated by the
National Electrical Manufacturers Association at from $1,000,000,000 to
$1,250,000,000 in 1929, and from $900,000,000 to $1,150,000,000 in 1933.
The estimate is based on reports from 125 companies which account for about
two-thirds of the Industry' s sales and from 75 zo 80 per cent of the total
number of employees.
Net Profit or Loss
The net profit or loss of the Industry is estimated by the National
Electrical Manufacturers' Association to be as follows:
1932 - 25,987,048 (loss)
1933 - 13,432,046 (loss)
The estimate is based on reports of 125 companies who reported sales
amounting to $425,963,000 for 1933, and 140,000 employees, in September,
Value of Production by Principal Product Groups
The value of production of the Industry as reported by the Census of
Manufactures is given by principal product groups in Table V. These figure?
show the decline of business in all sub-divisions of the Industry from 1929
through 1933, The most marked decline took place in the products used for
Total Value of Product by Principal Product Groups,
Household Apparatus and
84 5 485
Insulated Tare and Cable
Lamps, Incandescent Filament
Radio Apparatus and Supplies
Switch Boards, Circuit
Breakers, and Switches
Transformers and Circuit -
Source: Census of Manufacture.
s; see source to Table II,
above, for furthe:
details regarding Census data.
a/ Included in "All Others."
Estimated Total Sales, by Principal Types of Product
In Table VI are shown estimates of sales of all products under the Code
as prepared by the Code Authority from Census data. Although the items are
grouped differently, this table indicates the same general decline shown in
Table V. Domestic sales, as shown in Table VII for the years 1933 and 1934,
increased from $598,000,000 in the former year to $706,000,000 in 1934,
Estimated Total Sales "by Principal Type of Product
Motors and Generators
Source: Code Authority for the Electrical Manufacturing Industry.
a/ It will he seen that this figure for total sales is surlier
than the figure reported by the Code Authority (Table VII) for
Estimated Total Domestic Sales, by Principal
Type of Product, 1933 and 1934
Insulated Wire and Cable
Motors and Generators
Telephone and Telegraph
Source: Code Authority for the Electrical Manufacturing
Cha .tor II
LABOR AID MATERIALS
Total Annual Emjloymen t
A decline of more thin 50 'jer cent was registered between 1929 and
1933 in both total employment and in number of wage earners, according to
estimates "by the Code Authority. Abo at one-fourth of this loss was re-
covered l^y 1934. Table VIII presents data for the years 1929, 1931, 1933,
Estimated Total Annual Number of All Employees,
and of Wage Earners
Year All Employees Wage Earners
1929 410,000 338,000
1931 265,000 215,000
1933 200,000 155,000
1934 250,000 200,000
Source: Code Authority for the Electrical
Number of TTage Earners by Principal State s
The number of wage earners in the leading states in the years 1929,
1931, and 1933 is shoi.Ti in Table IX. The same concentration in the
Northeastern States is indicated as in Tables II, above, and XIX, below.
In 1933, over 80 per cent of all wage earners were reported in the eight
states listed. Pennsylvania had the highest number, with Ohio, New York
and Illinois following in the order mentioned.
Annual Average Number of Wage Earners,
b y Princ ipal States
State 1929 1931 1933
IT. S. Total
28 , 844
30 , 402
Census cf Manufactures;
to Table II,
above, for further
Data on ''Radios and Phonographs" not
Includes the wage
earners in "Radios
and Phonograwhs" omitted for
Indiana and New Jersey.
Data showing the number of "processing employees, " i. ei, those
engaged in direct labor, who constitute about 70 per cent of all employees
in the Industry, are presented in Table X for leading states in 1934 end
1935. Although the states do not rank in quite the sane order as that
shown for all enployees in the year 1933, the pro rortion accounted for by
the eight leading states is about the saif.c,,
Processing Employees, by Principal States,
1934 and 1935
U. S. Total
Source: Cod.e Authority for the Electrical L'anufacturing Industry
a/ As of January, 1935.
Total Annual Payrolls
Code Authority estimates of total payrolls of all employees and of
wage earners for 1929-1934 are presented in Table XI. In both cases the
drop from 1929 to 1933 was more* than two-thirds of the 1929 total. The
increase reported in 1934 was slightly more marked for wage earners than
for all emoloyees.
Estimated Total Annual Payrolls of All Employees,
and of Wage Earners
Source: Code Author it;
for Electrical i.ianuf acturing
Anmial Wages by Principal State s
Total traces r? E id are shown for the eight leading states for 1929,
1931, and 1933 in Table XII. The relative positions of the states changed
during the depression: Illinois and Pennsylvania ranked first and second,
respectively, in 1929 and 1931. but by 19Z3 Pennsylvania was first and
Wages, by Principal States
U. S. Total
•source to Table II,
regarding Census data.
os and Phonographs" not included.
wages in "Radios and Phonographs"
r Indiana and New
Hourly rates in the Industry were slightly higher in 1934 than in
1929, according to two separate sources — the National Industrial Confer-
ence Board and the Code Authority. Very little change is indicated in
hourly rates during the depression; the large drop in payrolls is apparently
to be accoimted for rather by the reduction in employment and the prevalence
of part-tine work. Hourly wages, as reported by the two sources, are
Average Hourly Wages (Cents per hour)
As Re-oorted by
Year National Industrial Code
Confe rence Board Authority
1929 62~75 56.0
1951 63.2 57.0
1933 57.1 51.0
1934 64.4 57.0
Source: National Industrial Conference Board, Service Letter ; and Code
Authority for Electrical Manufacturing Industry.
As sho\m in Table XIV, average hours worked per week declined nearly
one-third from 1929 to 1934.
Average Hours Worked per Week
Year P 9r Week
1929 47 ° 5
Source: Code Authority for the Electrical llanufacturing
Although average weekly earnings declined from $26.80 in 1929 to
$18.75 in 1934, the 1934 average was slightly greater than in 1933, as
indicated in the following table.
Source: Code Authority for the Electrical
Employment, Hours, and Earnings Under the Code
In addition to the annual data already given, monthly labor data for _
1933 and 1934 are presented in Table XVI, from which to judge the effect ^oi
the Code in this field. These data, which were compiled by the Bureau of
Labor Statistics in cooperation with the USA, Research and Planning : vision,
pertain to the Industry as defined by the Code. The average employment for
1934 and total man-hours are shown to have increased 26 per cent over 1933,
while payrolls increased 39 oer cent. During 1934 there was a slight upward
change^ in the average hours worked per week, compared with the decrease siiown
by the Code Authority figures in Table XIV, above. Average hourly wages in-
creased from 55.1 to 58.6 cents, which is a somewhat smaller increase than
that reported by the national Industrial Conference Board and the Code Author-
ity in Table XIII, above. The increase in average weekly earnings of 60 cents
was considerably less than that reported by the Code Authority, but the fig-
ures for both 1933 and 1934 were higher than the Code Authority's. To tOu t
extent these changes are directly due to the Code rather than other factors
affecting the business situation in the latter part of 1933, and in 1934, can-
not, of course, be stated.
Factory Employment, Payrolls, Hours and Wages, 1933-193'
Indexes, 1933* >
55 ; 4'
S o ur ce : Unpubl i
the Bureau of Labor Statistics
th the Division of Research and Planning, NRA.
a/ Reporting establi
shments considered to be almo
3t completely covered
were for the payroll
period nearest the 15th of the
c/ Based upon a repr
sample covering an
234 e stab-
lishments and nearly 98,250
what larger in 1934.
d/ Computed: Index
of employment times
average hours -.70 rl
e/ Based upon a representative
sample covering an
lishments and nearly 61,000 employees in 1933. The sample was some-
what larger in 1934.
The proportion of "hie;: antra; 1 i re of the total value of product
increased" from 19.6 per cent in V. 29 to 23,6 per cent in 1933. Table XVII
presents the data as derived from the Census of Manufactures.
Relation of Labor Cost to Total Value of Product
Total Value Total Annual 'Japes
Year of Product Amount Per Cent of
(thousands) (thousands) Total Value
1929 $2,334,246 $456,379 19.6
1931 1,172,393 239,634 20.4
1933 615,307 144,948 23.6
Source; Census of Manuf a c ture £ ; see source to Table II, above, for details
regarding Census data.
The Electrical Manufacturing Industry uses practically every known mate-
rial in the manufacture of its products. The principal materials used are
copper, iron, steel, paints and other covering materials, porcelain, and
Cost of Materials
As shown in Table XVI II the percentage which the cost of materials, in-
cluding fuel and electrical energy, is of the total value of product declined
somewhat from 1929 to 1951, and then increased to 1933.
Relation of Cost of Materials to Total Value of Product
Total Value Cost of Material
Year of Product Amount Per Cent
(thousands) (thousands) of Total
1929 $2,334,246 $971,017 41.6
1931 1,172,393 425,527 36.3
1933 615,307 270,043 43.9
Source; Census of Manufactures; see source to Table II, above, for details re-
garding Census data.
PRODUCTION AND DISTRIBUTION
Value of Production by Principal States
Table XIX shows that the eight states listed accounted for over 80
per cent of the total value of production in 193?, although, as shown in
table II, above, they accounted for only 60 per cent of the total estab-
lishments in that year. Ohio was the most important state in 1933, although
up until that time it had been outranked by other states.
Value of Production, by Principal States
State 1929 1931 1935
U. S. Total $2,300,917 $1,188,153 $668,257
Connecticut 86,894 46,579 31,453
Illinois 435,022 204,644 78,795
Indiana 133,353 73,725 50,380 a/
Massachusetts 184,787 104,326 52,628
New Jersey 292,785 145,663 61,299 a/
New York 280,139 124,081 74,128
Ohio 264,360 144,191 107,151
Pennsylvania 347,141 184,688 91,095
All Others 276,435 150,256 121,328 b/
Source: Census of Manufactures ; see source to Table II, above, for
details regarding Census data.
— ' Does not include -oroduction of "Radios and Phonograohs."
b/ Includes "Radios and Phonographs" omitted for Indiana and
Distribution of Manufacttirers 1 Sales
The distribution of sales in the Industry for the year 1929 as reported
by manufacturing plants to the Bureau of the Census is presented in Table
XX. Sales to wholesale dealers and to industrial consumers constituted 70
per cent of the total.
Distribution of Sales of Manufacturing Plants, 1929
Sel 1 in Per Cent Number of Plants
Value of Sales Selling
(F.Q.B. factory) Total Exclusively
$2,230,361,000 100.0 1,774^
Sales to manufacturers'
ovm wholesale branches 464,148,000 20.8 216 73
Sales to manufacturers'
own retail branches 67,762,000 3.0 49
Sales to dealers:
Uholesalers 700,335,000 31.4 963 370
Retailers 131,033,000 5.9 517 94
Sales to consumers:
power companies, rail-
roads, etc.) 359,957,000 38.6 857 381
Household 7,128,000 0.3 a 2 46
Source: Bureau of the Census, Distribution of Sales of Manufacturing Plants ,
a/ The total number of manufacturing plants engaged primarily in making
electrical machinery end apparatus is 1,802. Of these, 20 do only
contract work, and 6 transfer their entire outout to other plants
of the same company. Inasmuch as some of the other 1,776 plants
sell to more than one type of customer, this figure is less than
the total of the figures shown below it.
The number of "electrical" wholesale establishments and the value of net
sales made by them in each of ten leading states is given in Table XXI.
These figures indicate that more than one-fourth of these establishments were
located in the states shown in 1929 and in 1933, and that approximately the
same -iroportion of total net sales were made in these states. New York is,
of course, by far the most important state, both as to number of establishments
and net sales, in each of the years shown.
In using these data it must be borne in mind that they do not cover all
sales of electrical goods hut only those reported by the Census in the group
labeled "electrical" wholesale establishments, and that not all of these sales
as reported are necessarily confined to electrical goods.
Number of "Electrical" Wholesale Establishments and Value
of Net Sales Reported by them, by Principal States, 1S29 and 1933 SJ
Numb p l- of E ^tFDli r-nnents
Net Sales (OOP's)
U. S. Total
221 , 681
Source: Census of Wholesale Distribution. 1929 . and Censi-.s of American
Business, 1953. Wholpsale Distribution , U. S. Summary and State
reoorts. The 1933 data do not include establishments having annual
sales of less than $1,000.
"Electrical" wholesale establishments are here defined to include
those the major -oart of whose sales are electrical goods and appli-
ances, electrical equipment and supplies, radios and radio equipment,
and 'electric refrigerators.
According to Table XXII, exports declined in 1933 to about one-third
their 1929 value, but by 1934 had risen to about one-half the 1929 level.
Value of Exports
Bureau of Foreign and Domestic Commerce,
Monthly Summary of Foreign Commerce .
The nature of the advertising media varies with the different products
of the industry. Many domestic appliances, for example, are advertised
extensively "by the use of the radio, national magazines, sign "boards and
newspapers. Other products are advertised only in trade journals or technical
magazines. Table XXIII shows the dollar-volume of radio and magazine adver-
tising used in the r>ast few years "by the radio manufacturers.
Advertising Expenditures of Radio Manufacturers for Radio
Broadcasting and Magazine Advertisements §/
Year Radio Broadcasting Magazine Advertisements
1929 $3,732,000 $5,618,000
1931 910,000 2,754,000
1933 566, uCO 1,296,000
1934 556,000 1,531,000
Source: Prepared from data published in Bureau of Foreign and Domestic Com-
merce, Survey of Current Business , as compiled "by Denney Publishing
a/ Radio data are for the National Broadcasting Oomoany and the Colum-
bia Broadcasting System and include only national advertising; mag-
azine data represent the cost of advertising of radio manufacturers
in all classes of national magazines.
Tlie various unfair trade practices of certain members of the Industry
have been outlined by Mr, A. L. Kress, formerly Code Administration Direc-
tor of the national Electrical Manufacturers' Association. I3elow are
excerpts from a letter to the HRA, dated June 4, 1^55:
"It is believed that the following unfair tra.de practices
have, and in some cases still do avail in the industry. It is
of course impossible to appraise their extent or magnitude.
A - Selling Below Cost:
"This being one of the provisions incorporated in the
basic code, it is reasonable to assume that selling below cost
must have been widely prevalent in the industry prior to the
approval of the code. This industry was probably no different
from other industries. That was the impression when the whole
question of selling below cost became such a debated topic in
any discussions of the elimination of unfair trade "oractices.
B - Terms and Conditions of Sale:
"The following -oractices having to do with terms and con-
ditions of sale all apparently have existed in some degree as
evidenced by the frequently erroressed desire to incorporate
provisions in supplemental codes dealing with them,
(1) Giving of excessive cash discounts.
(2) The granting of excessive preferred terms of payment
which were uneconomic, inconsistent with prevailing
commercial terms, and which were obviously intended
as a method of reducing the price itself.
(3) The granting of excessive trade discounts not war-
ranted by the cost of doing business and the services
rendered in return.
(4) The giving of excessive trade-in allowances on
certain products, not warranted ~oy the scrap or re-
sale value of the product traded in, and which were
obviously intended as a method of price cutting.
(5) The practice of making lump sum bids on certain
products, where the sub-total was less than the
total for the individual items, where such reduc-
tions were not warranted by the quantity purchased,
and again where the intent was to offer an unbalanced
bid or to cut trices.
(6) The offer or giving of cash allowances or contri-
butions towards the payment of advertising of cus-
tomers, where such allowances or contributions were
not warranted by the value received and which, in
effect, served to improperly reduce prices.
C - Selling Methods:
"The following practices having to do with selling all a
apparently have existed in some degree as evidenced by the fre-
quently expressed desire to incorporate provisions in supple-
mental codes dealing with them -
(1) The splitting of commissions by salesmen, particular-
ly in the case of sales to municipalities.
(2) The acceptance of returned goods under conditions
not warranted by any legal or moral responsibility
incurred by the manufacturer.
(3) The giving of secret rebates.
(4) The policy of individual or multiple prices which
in effect constitute a discrimination against cus-
tomers of the same class through the granting of
special concessions. Such special concessions were
of course usually known only to the parties involved.
(5) The use of consignment methods or ledger balances,
where such methods were used primarily to exclude
competitors from certain areas,
(6) Improperly influencing the actions of employees or
representatives of customers or potential customers
through gifts or otherwise.
(7) The use of advertising which misled or was designed
to mislead potential customers.
(8) The acceptance of blanket or requirement orders at
prices not warranted ~by the size of the individual
(9) Substitution of material in the case of competitive
bids not equal to that required in the specif ications
themselves, which constituted misrepresentation.
(10) The improper rental of equipment on terms which in
effect simply evaded the price at which such equip-
ment should have been sold.
(11) The giving of free service or the placing of equip-
ment on trial or the unwarranted furnishing of samples
all done with the intent of indirectly reducing the
price at which such equipment should have been sold,
(12) The making of lor-; term contracts which did not pro-
vide for price adjustment in order to reflect changes
(13) The guaranteeing against price declines without a
corresponding provision guaranteeing to the manu-
facturer an adjustment in case of price increase,
(14) The use of an unsound warranty provision,
D - Relations with Competitors:
(1) The defamation of competitors and products,
(2) The malting of derogatory statements rith regard
to competitors and their policies.
E - Policy with respect to Products:
(1) The marketing of products which fail to conform
with recognized standards of safety,
(2) The marketing of products which fail to conform
to accepted ratings and performance requirements,
(3) The misbranding of products with intent to deceive
customers or potential customers,
(4) The misrepresentation of products with regard to
the quality, characteristics or performance,
(5) The imitation of competitors' trade marks for the
purpose of misleading customers or potential
(6) The selling of firsts as seconds, or seconds as
firsts, with the intent either to cut prices or
"The above lists should, he understood as neither exhaustive
nor as implying that all these practices have existed in all bran-
ches of the industry at the same time,"
Che >ter V
THE INDUSTRY - GENERAL INFORMATION
The National Electrical Manufacturer s ! Association is the dominant
trade association in this Industry. It was forned in 1926 by the merger of
three then existing associations; nan Ly, El ctrical Manufacturers' Council,
formed in 1905; Electric Power Club, formed in 1908; and Associated Manufactur-
ers of Electrical Supplies, forned in 1915. Its membership includ.es over 500
companies, representing practically the entire field of electrical manufacture.
It is estimated by the Association that its members produce 85 per cent of the
production of the entire Industry. The Association was designated in the Code
as the "agency for administering, supervising and promoting the performance of
the provisions of the Code by the members of the Electrical Manufacturing In-
dustry." In addition to its former Code activities, the staff of the Associa-
tion renders the membership many other services.
There are a few smaller trade associations that cover only certain product
groups, suchas Radio Manufacturers' Association, Electric Porcelain Manufactur-
ers 1 Association, national Lamp and Shade Manufacturers' Association, and In-
candescent Lamp Manufacturers' Association.
Mr. Avery Laiserson, of the NRA Labor Advisory Eoard Staff, has :re oared
the following statement on labor organization in the Electrical Manufacturing
"The recognized trade unions claiming jurisdiction in this Industry
are: the electric workers, the machinists, the molders, pattern makers and
metal polishers. The federal unions have experienced a considerable 3 wtl
in numbers under the ISA, particularly in the radio division of the In-
dustry. The latter organizations are local unions attached directly to th
American Federation of Labor, rather than local chapters of a national
craft organization. Federal unions are not restricted to members of one
craft or closely allied crafts in an amalgamation, but cover the entire
plant from top to bottom. As yet, they have not begun to spread over en-
tire industries, but confine themselves to one plant of one company.
Liany people in the labor movement believe that a combination of t
unions into a national organization on a vertical basis is imminent.
"It is exceedingly difficult to quote any exact figures of union
membership. Representation was claimed at the first public hearing on th<
Electrical Code for something less than 10,000 workers in the five crafts
mentioned above — i.e., that was the number in the unions who had jobs
and were -under union agreements. Of course, that was not the only basis
of representation. With the growth of -onion membership under the Act and
the success of organizing several local federal unions, a much great r
number of workers may be said to be directly affiliated with the
Federation of Labor. This do«s not include those who might pr
F. of L. to represent them rather than the company unions nliich have sps :n
u; > in the industry "
There is some competition from imported electrical goods, especially in
the class of products sold in th li lit i '-price and chain stores.
Several months ago, the Code Authority was considering petitioning the
President to use his powers under the National Industrial Recovery Act to Un-
it the quantities of certain electrical . oods which it was felt were being i -
ported to such an extent that domestic production was suffering. The Code
Authority felt that there was danger that the increasing ratio to domestic
production might "render ineffective or seriously (to) endanger the
maintenance 11 of the Code. No detailed data are available on this question.
Effect of the Code
Official expressions of opinion as to the effect of the Code were
tainable. However, the unofficial consensus seems to be that the Co .e had a
stabilizing effect on prices in general and that with a few exceptions,
"destructive" price catting had "been graatly reduced. The tern "destructive
price cutting" in this instance is considered to nean price cutting that de-
moralizes the Industry and results in lowering wages and forcing operation foi
long periods without -profit. The exceptions, in every case nentioned, in
volved products which could "be produced with very little canital investment
and which in nost cases were sold in linited-'orice or chain stores and which
vere, therefore, subject to extreme -pressure fron the "buyers of these organi-