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Full text of "Evidence study"

sU-W- 



3 9999 06317 W* 

NATIONAL RECOVERY ADMINISTRATION 

- 



RESEARCH AND PLANNING DIVISION 



EVIDENCE STUDY 
NO. 21 

OF 



THE LEATHER INDUSTRY 



Prepared by 
WILLIAM P. FALLON 



September, 1935 






PRELIMINARY DRAFT 
(NOT FOR RELEASE: FOR USE FN DIVISION OXLT) 



THE EVIDENCE STUDY SERIES 



•The EVIDENCE STUDIES were originally farmed as a means of gathering 
evidence tearing upon various legal issues which arose unuer 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. 
2. 
3. 

A 

5. 

6. 

7. 

8. 

9. 

10. 

11. 

12. 

13. 

14. 

15. 

16. 

17. 

13. 

19. 

20. 

21. 

22. 



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. 

Pab, Metal Prod. Mfg. , etc. 34. 

Fishery Industry 35. 

Furniture Mfg. Ind. 36. 

General Contractors Ind. 37. 

Graphic Arts Ind. 38. 

Gray Iron Foundry Ind. 3S. 

Hosiery Ind, 40, 

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

Iron and Steel Ind, 42. 

Leather 43. 
Lumber & Timber Prod. Ind. 



Mason Contractors Industry 

Men's Clothing Industry 

Motion Picture Industry 

Motor Bus Mfg. Industry (Dropped) 

Needlework Ind. of Puerto Rico 

Painting ft Paperhanging & Decorating 

photo Engraving Industry 

Plumbing Contracting Industry 

Retail Food (See No. 42) 

Retail Lumber Industry 

Retail Solid Fuel (Dropped) 

Retail Trade Industry 

Rubber Mfg. Ind, 

Rubber Tire Mfg. Ind. 

Silk Textile Ind. 

Structural Clay Products Ind. 

Throwing Industry 

Trucking Industry 

Waste Materials Ind. 

Wnolesale & Retail Food Ind. (See No. 

Wholesale Fresh Fruit & Veg. 31) 



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 inclusion in Code plistories, as follows; 



44. Wool Textile Industry 

45. Automotive Parts & Equip. Ind. 

46 . Baking Industry 

47. Canning Industry 
43. Coat and Suit Ind. 



49. 
50. 
51. 
52. 



Household Goods & Storage, etc. (Drop- 
Motor Vehicle Retailing Trade Ind, ped) 
Retail Tire & Battery Trade Ind. 
Ship & Boat Bldg. & Repairing Ind, 
Wholesaling or Distributing Trad^- 



L. C. Marshall 
Director, Division of Review 




contents 



Pac;e 



Foreword 1 

CHAPTER I - DESCRIPTION AND SCOPE 2 

Definition of the Industry 2 

Historical Background and Development .... 2 

Founding of the Indus try 2 

Tanning Materials 2 

Tools and Machinery 3 

Die Tanning of Sole Leather 3 

The Tanning of Upper Leather 4 

The Tanning of Other Leathers 4 

Size of Units and Vertical 

Integration 4 

General Stability of the 

Industry 5 

Humber of Establishments 5 

Humber of Ilembers in the Industry 5 

Establishments Classified by Value 

of Output 6 

Number of Establishments ''oj States 7 

Capital Investment 8 

Volume and V a lue of Production 8 

Volume of Production by Kind of 

Leather 9 

Value of Production oy Type of 

Leather 10 

Productive Capacity 11 

Competing Materials 12 

Net Forth., Working Capital, and 
Profits of Representative Com- 
panies 12 

Failures and Liabilities 14 

CHAFIER II - LABOR STATISTICS 15 

Total Number of Employees 15 

Seasonality of Employment 15 

Number of Emplojrees by States 15 

Total Annual Wages 16 

Annual Wages by States 16 

Average Wages and Hours Worked 17 



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OOBTSSTS (Cont'd) 



Page 



Average 'lours and Earnings by 

States 17 

Weeks Worked Per Year 18 

Employees Under 16 Years of Age 18 

La"bor Cost 18 

CHAPTER III - MATERIALS: RAW AED SEMI-PROCESSED 20 

Principal Materials Used 20 

Cost of Materials 20 

Source of Materials 20 

Supply of Sar; Materials 2?. 

CHAPTER IV - PRODUCTION AMD DISTRIBUTION 22 

Production in Leading States 22 

Exports 22 

Value 22 

Volume 23 

ITature of Advertising 25 

Trade-Marks 25 

Methods of Distribution 25 

Wholesale Sales by l2 n ?^ of 

Wholesaler 26 

Wholesale Sales by States 25 

Methods of Shipment 27 

Evidence of Interstate Commerce 27 

CHAPTER V - GENERAL IIuDHUATIOH 28 

Unfair Tra.de Practices 28 

Price Competition 23 

Trade Associations 28 

Labor Conditions 29 

Imports 29 

Value 29 

Value by Types of Leather 30 

List of Erroerts 30 



-oOo- 



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TABLE 


IV 


TA3LE 


V 


TABLE 


VI 


TA3LE 


VII 


TABLE 


VIII 



TABLES 

Page 

TABLE I - Members of the Industry, by Hurler of 

Establishments Owned or Controlled, 1934 ... 2 

TABLE II - Establishments Classified by Value of 

Products, 1929 7 

TABLE III - Number of Establishments "by Principal 

btc,t63 ■•••••• • ■ •• • ■ • •• • • • a Q 

Volume and Value of Production 9 

Volume of Production, "by Principal Kinds 

of Leather 10 

Value of Production, "by Type of Leather 11 

Utilization of Productive Capacity ; 12 

Percentage Profit or Loss on Invested 
Capital, for Seven Leading Leather 
Manufacturers 13 

Net Income and Ilet Working Capital, 
American Hide and Leather Company 
(Upper Leather) 13 

TABLE IX-B - Net Income and Net Working Capital, 
United States Leather Company 
(Sole Leather) 14 

TABLE X - Number of E a ilures and Amount of 

Liabilities 14 

Uumber of Er.iplo.yees, by Principal States .... 15 

Annual Wage Payments, "by Principal States. ... 16 

Average Hourly and Weekly Wages and Average 

Hours Worked Per Week 17 

TABLE XIV - Average Hours and Average Earnings, by 

Principal States, 1932 17 



'TABLE IX-A - 



TABLE 


XI 


TABLE 


XII 


TABLE 


XIII 



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•in- 



TABLES (Cont'd) 

Page 

TABLE XV - Labor and 1 later ial Costs Compared with 

Total Value of Product 18 

TABLE XVI - Volume of Imports by Principal Kinds of 

Ran Hides and Skins 21 

TA3LE XVII - Value of Product, by Principal States .... 22 

TA3LE XVIII - Value of Exports, by Type of Leather 23 

TABLE XIX - Volume of Exports, by Principal Kinds 

of Leather, 1929-1934 24 

TABLE XX - Volume of Exports, by Type of Leather .... 24 

TA3LE XXI - Factory Sales, by Type of Distributing 

Agency, 1929 25 

TABLE XXII - Het Sales of Leather by Type of Wholesaler, 

1933 26 

'TABLE XXIII - Net Sales of Leather Wholesalers, by 

Principal States, 1923 27 

TABLE XXIV - Value of United States Imports of Leather 

for Consumption, 1929-1934 29 

TABLE XXV - Percentage Distribution of Value of 

Imports, by Type of Leather, 1929-1933 ... 30 



-0O0- 



3584 -iv- 



- I 



TIE LEATHER IEDUSTHY 
Foreword 

Almost all the statistical information in this report refers 
to the Leather Tanning, Currying, and Finishing Industry, which con- 
prises almost 90 per cent of the Industry as defined by the Code. 
Further information concerning the coverage of the data used appears 
in the first section of the report. 

Publications of three government bureaus — Census, Labor 
Statistics, and loreign and Domestic Commerce — supplied the bulk 
of the data included, ^hile special compilations were obtained from 
the Tanners' Council and from Dun and Bradstreet. Limitations of 
these data are indicated in table footnotes. 

The section dealing with trade practices, owing to the scarcity 
of data, has been combined with Chapter V. 



8534 



CHAPTER I 

DESCRIPTION AND SCOPE 

Definition of the Industry 

The Code definition of the Leather Industry includes all types of 
tanning and finishing as well as cutting and other partial fabrication of 
leather. As used in this report the term "Leather Industry" covers tan- 
neries — whether the hides and skins are owned, or tanned on a contract 
"basis for the account of others — and establishments engaged in currying 
and finishing leather. According to the Tanners' Council these concerns, 
in 1934, accounted for approximately 87 per cent of the employees of the 
Leather Industry as defined in the Code of Pair Competition. The remainder 
were employed by the producers of industrial belting, lace leather and 
leather laces; miscellaneous straps, packings and mechanical leathers for 
use on industrial machinery, excluding such leathers that a machinery 
manufacturer may make for equipment of his own production:: cut soles; 
grain insoles, counters, box toes, and heels; and leather welting used in 
shoe manufacturing. 

Historical Background and Development 

Pounding of the Industry . - The Leather Industry is one of the oldest 
of all industries, but where and when leather was first manufactured by white 
settlers in America is a disputed question. It is known, however, that at- 
tempts were made to establish tanneries in Massachusetts and Virginia prior 
to 1625. Salem and Lynn, Massachusetts, are generally considered the 
birth place of the domestic Leather Industry. Probably it was originally 

•blished in New England because the supply of hemlock bark (the chief 
source of tanning materials) available there seemed unlimited. Later, as 
this supply became depleted, the tanneries migrated to other sections. They 
sprang up all over the country with the growth of and spread of the popula- 
tion, but there is still a tendency to concentrate in certain localities. 
The more important of these so-called "leather centers" are Boston, Chicago, 

New York, Philadelphia, and Cincinnati probably in the order given. 

Chicago and New York are also the main hide markets of this country today. 

Tanning Materials . - Until the latter part of the eighteenth century, 

rule-of~thumb rather than scientific methods were used in tanning hides 

and. skins. At the beginning of the nineteenth centur r it was demonstrated 

that many trees and plants not previously utilized for the purpose provided 
vegetable tanning materials in abundant quantity. This enabled localities 

formerly dependent upon outside supplies of leather to set up their own 
tanneries. 

Por many decades vegetable tanning materials were used almost exclus- 
ively, although experiments had been conducted with mineral tannins. Fi- 
nally, toward the end of the nineteenth century, it was found that chromium 
salts produced a leather different from any which had ever been manufac- 
tured. This discovery was made in the United States, but it revolution- 
ized the Industry in all parts of the world, because a chrome-tanned 
leather wears longer and is cheaper to produce than the vegetable-tanned 
leathers. Today over 90 per cent of our shoe-upper leather is of chrome 
or other mineral tannage, while many other kinds of leather formerly of 

8584 



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vegetable, alum, or oil tannage are now produced by the chrome process. 
Only about 7 ner cent of oar sole leather is chrome-tanned, however, as 
tarmic-acid leather comes out thicker. 

During the last fifty years or so more progress has been made in the 
art of tanning and the science involved given more attention than in all 
previous time. Also, in this same period, there has been a marked increase 
in the varieties of leather used for different purposes. Nov; a new era has 
begun in which synthetic materials are finding application and becoming more 
and more important. 

Tools and Machinery . - The tools employed in tanning hides and skins 
remained practically unchanged through centuries. Improvements were 
mainly of American origin, and first put into practical use in this coun- 
try. The splitting machine and a few improved mechanical devices came 
into the industry in the early part of the nineteenth century, but real 
progress was not made until the latter half. American machines revolu- 
tionized the Industry, here and abroad, and made possible its organization 
on the basis of relatively low-cost, large-scale production, and the 
manufacture of a higher quality, more uniformly dependable product. 

In the production of leather, machines are few and simple, however, 
and there is not much need for manual labor except in the various lift- 
ings and lowerings of the hides and skins. The chief advantage of im- 
proved machinery lies in shortening the length of the process, for the 
tanner's principal concern is the direction of price changes between the 
time the hides and skins are bought and the time the leather is sold. 
(The speculative side of the business so far outweighs the operating side 
in importance that it is generally understood that no money can be made in 
the Leather Industry — particularly in the manufacture of sole leather — 
except on a rising market. 

The Tanning of Sole Leather . - T .Tncn hides for sole leather arrive at 
the tannery, they are sorted into various grades and piled for ease in 
handling and to keep them moist. After trimming off the undesirable por- 
tions, the hides are tied together in bundles and dropped into water. They 
are soaked to remove dirt, salt, and blood and to bring them back to as 
soft and pliable a condition as when they came from the animal's back. 
Then they are placed in a solution of milk of lime and sodium sulphide "'for 
several days to loosen the hair and epidermis. 

When the hides are hauled out of this solution, the hair is loose 
enough to come off readily in a dehairing machine; then they are worked 
over machines to scrape off the loose materials, clean the grain, and re- 
move the excess flesh from the -under side. Part of this work, particularly 
the finishing touches, is done by hand. Next the clean stock is returned 
to clear water to soak over night in order to remove the surface lime and 
to allow for a. slight "plumping." A small amount of some acid, such as 
lactic, is often employed to speed the removal of the lime and the plumping. 

The actual tanning operation is accomplished by suspending the hides 
in pits or vats containing a solution of tanning materials such as hemlock, 
chestnut, or quebracho extracts. The hides ere first lowered into weak, 

8584 



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later into strong solutions, (the first liouors are called "the rockers," 
the final liquors "the layers") and after soaking from one to three 
months, depending upon the materials and process used, they have made 
the transition from hides to leather. 

The Tanning of Uo 3er Leather . - In the manufacture of upper leather, 
hides are also used to some extent, handled in what are known as "sides," 
"but the most imoortant raw materials are calf, goat, kangaroo, and colt 
skins. The same general preliminary treatment as for sole leather is 
necessary. 

As stated earlier in this Chapter, over 90 per cent of all shoe- 
upper leather is chrome - or mineral-tanned. This is accomplished by 
treating the pickled skin with a solution containing the salts of chromium 
or other metals. 

There is more need here for skilled labor than in the making of heavy 
leather. Also the capital investment in machinery and equipment and the 
initial investment in raw materials are greater for an upper-leather plant. 
The total amount invested is, however, considerably less per unit of leather 
manufactured than for a sole-leather tannery, because the turnover of hides 
is more rapid — the tanning process for upper leather requiring at most only 
a few weeks. This, and the fact that upper-leather lends itself to pro- 
duction in a comparatively small plant, accounts for the larger number of 
such tanneries. 

The Tannine; of Other Leathers . - The automobile and upholstery leather 
manufacturers utilize "spready" hides, i. e., those with a large area. The 
tanning is done with vegetable tanning materials, but the time factor is 
of no great significance as the hides are split into layers — often as 
many as four — and this allows of rapid tannage. 3elting and harness leathers 
require a long tannage and processes very similar to sole leather. Fancy 
leathers may be of alum, chrome, or vegetable tannage depending upon whether 
they sxe to be used for pocketbooks, traveling cases, bill folds, book 
bindings, fancy shoes, or some other product. Here a great deal of skill 
is necessary and the labor employed is largely hi. -h-grade . Other classes 
of leather produced are bag and strap, raw hide of various kinds, lace, 
roller, whip, belt, chamois, hat-sweat, mechanical, piano, coat, washer, 
glove, and sporting. 

Size of Units and Vertical Integration . - Like many other old handi- 
craft industries, this Industry was originally composed of a large number 
of ver- r small, orivately-owned units. Just before the beginning of the 
t-zentieth century, however, a group of sole-leather tanners combined, be- 
lieving that a combination of tanneries would have a stabilizing effect 
on both the price of hides and the price of leather. 

The big packers found themselves at a disadvantage in dealing with 
large tanning companies, and in a short time Swift and Armour took over 
independent tanning outfits and proceeded to manufacture both upper and 
sole leather. In this way these packers not only protected themselves on 
hide prices, but also competed with the tanners in the sale of the finished 
product. Armour also went into the sole-cutting business, but the old- 
line tanners soon set up their own cutting departments in self defense. 

8584 



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Just as the packers started tanning to protect their hides, the shoe 
manufacturers began tanning to protect their leather prices. Thus, some 
of the tanners' best customers have made themselves not only practically- 
independent of the tanners' services, hut also real competitors of the 
regulrr tanners. It is not believed, however, that the packing tanner 
and the shoe-making tanner will ever tan sufficient hides to supply the 
country's needs. 

It is to the interest of the tanner to sell his leather in large 
pieces. He slices the tanned hides longitudinally down the middle, making 
two "sides" out of each hide; this is the unit he prefers to market be- 
cause there is no waste and no further work. Some shoe manufacturers buy 
"backs," which are sides with the heads and bellies trimmed off. The 
tanning industry also supoorts a "middle-man" called the sole-cutter. He 
buys backs from the tanner, cuts them into soles, and sells the ready-made 
soles to the shoe factory. The sole-cutter resents the packers having 
forced the tanners into establishing cutting departments, and for that 
reason buys his leather from concerns whose main business is tanning. 

General Stability of the Industr y. - Other materials have replaced 
leather from time to time, but the number and variety of its uses continue 
to increase. Leather has natural qualities which cannot be duplicated 
and, consequently, the Industry as a whole enjoys a "key" position and in 
some respects a more than average degree of stability. In 1929 the Tan- 
ning, Currying, and Finishing Industry ranked thirty-ninth in number of 
wage earners and thirty-fifth in value of products among manufacturing in- 
dustries. Two years later it was thirty-sixth in both number of wage earn- 
ers and dollar volume of production. 

Number of Establishments 

The manufacture and finishing of leather is one of the country's more 
important basic industries. In 1929 there were 471 tanning, currving and 
finishing establishments in 28 states, according to the Census of Manu- 
factures. The- declined to 418 in 1931 and 373 in 1933. The Tanners' 
Council places the 1934 figure at 385. (See Table III.) 

^lumber of Members in the Industry 

The number of members of the Industry (operating companies) has been 
given by the Tanners' Council of America as around 320 for both 1933 and 
1934. These are grouped in Table I according to the number of establish- 
ments they owned or controlled. From this table it can be seen that the 
vast majority of members own or control only one plant. 



8584 



•CI- 



TABLE I 

Members of the Industry, by Number 
of Establishments Ormed or Controlled, 1934 



Number of Number of Companies 

Establishments Controlling Specified 

Chmed or Number of 

Controlled Establishments 



Total 321 

One 304 

Two 4 

Three 3 

Four 2 

Five 4 

Six 1 

Seven 1 

Ten 1 

Over Ten 1 



Source: Tanners' Council, letter to NBA, Division of Beview, 
A igust 19, 1935. 

Establishments Classified by Value of Output 

The Census of Manufactures for 1929 shows the subjoined distribution 
of establishments according to value of products. No comparable informa- 
tion for later years is available. From Table II it can be seen that the 
largest number of establishments fall in the group producing 1,000,000 
to 2,499,999 dollars worth of product in 1929. Only about a fifth of all 
establishments reported an annual production of less than $100,000. 

More than half the total value produced by the Industrv came from 
establishments in the two groups, $1,000,000 to $2,499,999 and $2,500,000 
to $4,999,999. 



3584 



TABLE II 

Establishments Classified by Value 
of Products, 1029 



Value of Products 
Per Establishment 



Number of 

Establ i shment s 



Total 

$5,000 to 
20,000 to 
50,000 to 
100,000 to 
250,000 to 
500,000 to 
1,000,000 

2,499, 
2,500,000 

4,999, 
5,000,000 



$19,999 

49 , 999 

99,999 
243,999 
499,000 
999,999 

to 

999 

to 

999 

and over 



471 

18 
36 
44 
83 
67 
80 

90 

41 



Total Value 
of Products 
(Thousands) 



$ 481,340 

213 

1,188 

3,261 

14,093 

23,784 

56,963 

146,775 

138 , 514 
96,549 



Source: Census of Manu f acture s, 1923, "Leather Goods: Tanned, Curried, 
and Einished. " Census data do not cover establishments whose 
annual production is less than $5,000. 

Number of Establishments by Stgtes 

The distribution of establishments by principal producing states is 
shown in Table III. Tne ten states listed contained 82 per cent of the 
total number of establishments in 1929 and 1931, and these states exclu- 
sive of Delaware contained 80 -oer cent of the total in 1933. 



8584 



TABLE III 

Number of Establishments 

"by Principal States 



State 



U. S. Total 
Delaware 

Illinois 
Massachusetts 
Michigan 
New Jersey 
New York 
North Carolina 
Ohio 

Pennsylvania 
Wisconsin 

Other states 



1929 



1931 



1933 



471 


418 


373 


11 


9 


a/ 


26 


25 


23 


113 


98 


100 


13 


13 


11 


51 


44 


36 


67 


56 


43 


9 


8 


8 


18 


17 


14 


62 


57 


46 


18 


17 


17 



74 



75 



Source: Census of Manufactures , "Leather Goods: Tanned, Curried 
And Finished." Data do not include establishments whose 
annual production is less than $5,000. 

a/ Included in "Other States." 

Capital Investment 

The code application of the Leather Industry indicates a capital in- 
vestment of $475,000,000 in 1928, $400,000,000 in 1930, and $350,000,000 
in 1932 and 1933, hut the basis for these estimates is not stated. The 
Tanners' Council places the Industry's invested capital at $280,000,000 
for 1951 and about the same for 1934. This figure represents stock and. 
surplus, less outside investments, as reported on the balance sheets. 

The Census of Manufactures shows a capital investment of $332,180,000 
in 1914 compared with $671,342,000 in 1919, the latest year reported. These 
figures, while probably not comparable with those in the preceding para- 
graph, give a good idea of the tremendous growth of the tanning, currying, 
and finishing business during the war. 

Volume and Value of Production 

The United States is the largest single producer of leather in the 
world, accounting for about 35 per cent of the world total in 1931, ac- 
cording to data published by the Bureau of Foreign and Domestic Commerce 
in the Commerce Yearbook . It is also the largest consumer of leather, 
using approximately 90 per cent of the domestic output. 



3584 



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Total volume of production amounted to 1,414,000 square feet in 1929, 
as shown in Table IV. As already suggested, volume decline during the 
depression years was relatively slight in this Industry — amounting from 
1929 to 1935 to only about 14 per cent, and, by the end of 1934, much of 
this loss had "been regained. 

Table IV also presents data on value of production which shows that 
the decline, from 1929 to 1933, amounted to more than 50 per cent. It 
will be noted that a larger quantity of leather was marketed in 1933 than 
in 1931, but that the total value was smaller. The Tanners' Council es- 
timates the 1934 value figure at $260,000,000, which represents only about 
a 10 per cent recovery from the 1933 low. 

TABLE IV 

Volume and Value of Production 



Year 



Volume a/ 
(Thousands of Value b/ 

Square Feet) 



1929 1,414,000 $ 481,340,299 

1931 1,195,300 271,137,694 

1933 1,222,100 237,202,228 

1934 •• 1,313,800 260,000,000 E 



Source: As indicated in footnotes. 
E Estimated 



a/ From the Tanners' Council; Includes cattle hide leathers, calf 
and kip skin leathers, goat and kid, and sheep and lamb skin 
leathers, but excludes cabretta, a comparatively small item. 

b/ 1929, 1931, and 1933 figures from Census of Manufactures ; 

"Leather Goods: Tanned, Curried, and Finished." Data do not 
include "establishments with an annual production of less than 
$5,000. (Includes receipts for contract work, products not 
normally belonging to the Industry and by-products of tanning, 
currying, and finishing leather.) 1934 figure estimated by 
Tanners' Council. 

Volume of Production by Kind of Leather 

Production of the principal products of the Industry, by kind of 
leather for the years 1929, 1931, 1933, and 1934, is given in Table V. 
It will be noted that the trend of production was downward in the case 
of the three skin groups, but upward for hides and cabrettas. 



8584 



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Volume of Production, by Principal 

Kinds of Leothcr 

( In thousands) 



Kind of Leather 



1929 



1931 



1933 



1934 



Cattle Hides 2/ 
Calf and Thole Kip 

Skins 
Goat and Kid Skins 
Sheep and Lamb Skins^/ 
Cabrettas 



19,146 

15,364 

55,686 

38,985 

2,899 



16,234 

12,438 

48 , 637 

32,445 

3,144 



17,115 

13,049 

44 , 312 

53,881 

3,154 



19,771 

12,442 

44,982 

54,255 

3,358 



Source: 



a/ 



Tanners 1 Council, May 1955, special compilation for ERA, Re- 
search and Planning Division. 

Sauivalent hides. 
Pleshers not included. 



In terras of number of pieces, according to the Bureau of Foreign and 
Domestic Commerce, 77 oer cent of the 1931 total went into shoe leathers, 
10 per cent into glove leather, 2 per cent into fancy, bookbinding, and 
kindred lines, end the balance into belting, bag, harness, upholstery and 
miscellaneous leathers. 

Value of Production by Type of Lopther 

Table VI presents value of production data by type of leather produced, 
for the years 1929, 1931, and 1935. In the latter year up-oer leather — 
other than patent — accounted for nearly one-half the total value produced; 
and sole and belting leather, a little more than one-quarter. The groups 
in which the sharpest declines occurred from 1929 to 1933 were upholstery, 
and saddle ry and harness leathers. 



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TABLE VI 



Value of Production, by Type of Leather 
( In thousands) 



Type of Leather 



1929 



1931 



193: 



Uuper, Other than Patent $185,202 

Sole and Belting 139,496 

Glove and Garment 23,025 

Patent, Other than "Joholstery 24,840 

Upholstery 15,401 

Bag Case, and Strap 7,308 

Saddlery and Harness 6,092 

Other §7 56,944 

Total^/ 458,308 



$107,168 

74,579 

15,303 

11,289 

4,139 

3,397 

1,846 

35,961 

253,682 



$102,661 
60,551 
17 , 609 
7,400 
1,875 
2,634 
1,951 

22,289 

216,970 



Source: Census of Manufactures , "Leather Goods: Tanned, Curried, and 

Finished." Data do not include establishments whose annual pro- 
duction is less than $5,000. Data for 1934 not available. Values 
are based on f.o.b. tannery prices. 

a/ Consists of skirting, collar, lace, welting, fancy and bookbinders 

leather, side splits and other leather. 
b/ Does not include receipts for contract work on materials owned by 

others, by-products, and products not no rrially -belonging to the 

Industry. 

Productive Capacity 

No estimate of the productive capacity of the Industry is available, 
but it is generally agreed that it is excessive in view of the gradually 
declining market over the past decade. The May 22, 1935, issue of Standard 
Trade and Securities states, "The number of tanning establishments has been 
gradually reduced in line with the shrinking market for leather, but the 
Industry still possesses a productive capacity greatly exceeding present 
consumptive reauirements." An article in Fortune, February 1935, says, 
"During the war the tanning capacity of the country expanded so much that 
the Ind.ustry still has an overproduction hangover." 

In its code application, the Industry made estimates of the total pro- 
ductive capacity and aggregate annual sales of tanning, currying, and 
finishing establishments. These estimates, which also indicate excessive 
productive capacity, are the basis of the percentages given in Table VII, 
which show the extent to which productive capacity has been utilized in 
specified years since 1928. 



8584 



-12- 

TABLE VII 
Utilization of Prodactive Capacity- 



Year 



Per Cent 
Utilization 



1928 70 

1930 60 

1932 54 

1933 68 

Source: Computed by ERA, Division of Review, 
from data in code application. 

Competing Materials 

During leather's long history other materials , such as textiles, 
rubber, and cellulose have replaced it for certain purposes, but the 
uses for leather itself tend to increase rather than decrease. The In- 
dustry has, however, been forced to contend with a long-term downward trend 
in consumption, largely attributable to the increasing use of leather sub- 
stitutes. In addition, important markets for leather have disappeared be- 
cause of technical changes. For example, the use of harness leather has 
declined because of the development of the tractor and automobile; and 
in the factory, the utilization of individual motors has decreased the 
need for industrial belting. 

A specific and important example of serious competition from sxibsti- 
tute materials is found in the case of shoe soles. The price advantage 
of the composition sole — mostly rubber — makes it a potent competitor of the 
leather sole. Good leather soles for men's shoes run from 35 to 40 cents 
a pair; for women's, from 15 to 20 cents. Top price for composition soles 
is 15 cents for men's, 8 cents for women's. Inroads of the composition sole 
and other leather substitutes are shown by the fact that in 1923 the domes- 
tic consumption of cattlehide leathers — most of which axe used in making 
sole leather — totaled slightly more than 25 million hides, whereas, in 
1934 the number was only about 18g millions. 

Regarding the matter of using other materials in the place of leather, 
the Chairman of the Committee on Leather Substitutes of the Tanners' Coun- 
cil late in 1954 stated, "In the opinion of this committee, the Leather 
Industry is confronted with a real task if it is to nalt competition from 
substitutes." It was also stated that with a subnormal supply of hides 
during the next few years, increasing prices will allow substitutes a great- 
er opportunity to displace leather, 

Net Tforth, forking Capital, and Profits of Representative 
Companies 

The net worth of ten representative tanning companies on January 1, 
1934, aggregated $85,907,000, compared with $34,766,000 a year before, ac- 
cording to data contained in the l.Ionthl ir Letter of the National City Bank 
of New York for April 1935. The same concerns reported a deficit of 

8584 



-13- 

$2,560,000 for 1934, contrasted with a net profit of $7,869,000 for the 
previous year. 

The Standard Statistics Company in its May 22, 1935, issue of Standard 
Trade and Securities states that the seven leading concerns in the Leather 
Industry obtained satisfactory returns on combined invested capital in only 
two years since 1920, namely, 1927 and 1953, and that those periods coin- 
cided with intervals of sharply rising hide and leather prices. The per- 
centage profit or loss is shown in Table VIII. 

TABLE VIII 

Percentage Profit or Loss on Invested Capital, for 
Seven Leading Leather Manufacturers 



Year Percentage 

1929 D- 6.6 

1931 D- 7.3 

1933 8.3 

1934 D~ 3.3 

Source: Standard Statistics Company, S tandard 
Trade and Securities , Kay 22, 1935. 

D Deficit. 

The net income and net working capital of two leading leather concerns- 
one producing upper leather and the other sole leather — are shown in Tables 
IX-A and LX-3. for the years 1929, 1931, 1933, and 1934. 

TABLE IX-A 

Net Income and Net Working Capital, 
American Hide and Leather Company (Upper Leather) 

Year Net Working 
(Ending June 30) Net Income Capital 

1929 D~ $ 1,594,000 $ 3,345,000 

1931 D- 704,000 2,783,000 

1933 628,000 2,801,000 

1934 501,000 3,208,000 

Source: Standard Statistics Company, Standard 
Trade and Securities . May 22, 1935. 

D Deficit. 



8584 



-14- 

TABLE IX-B 

Net Income and Net Working Capital, 
United States Leather Conpany (Sole Leather) 



Year Net Working 

(Ending Oct. 31) Net Income Capital 

1929^/ D- $ 3,709,000 $ 26,489,000 

1931§/ D- 1,103,000 15,236,000 

1933b/ 981,000 11,896,000 

1934 D- 1,911,000 10,280,000 



Source: Standard Statistics Company, Standard 
Trade and Securities , May 22, 1935. 

D Deficit. 

a/ Year ending December 31. 

b/ Ten months ending October 31. 

Failures and Liabilities 

Tiie number of failures in the Industry and the amount of liabilities in- 
volved for the years 1929, 1931, 1933, and 1934, are set forth in Table X. 
Although the data in this table seem to indicate a marked decline in the 
size of the firms failing since 1931, no such conclusion may validly be drawn 
without further information about the individual concerns, in view of the 
small number involved. 

TABLE X 

Number of Failures and Amount 
of Liabilities 





Number 


of 


Amount of 


Year 


Failur* 


3S 


Liabilities 


1S29 


6 




$ 222,988 


1931 


3 




287,610 


1933 


5 




105,586 


1934 


3 




13,530 



Source: Dun and Bradstreet ; special com- 
pilation prepared for NRA, Re- 
search and Planning Division, 
May 1935. 



8584 



-15- 

CHAPTER II 

LABOR STATISTICS 



Total Number of Employees 



The average number of wage earners in the tanning, currying, and finish- 
ing establishments of the Leather Industry was 49,932 during 1929, 42,047 in 
1931, and 44,191 in 1933. The average for 1934 has been estimated at 49,600.1/ 

Seasonality of Employment 

Although it is generally understood that the demand for leather, parti- 
cularly sole leather, is seasonally slack in the spring months, no regular 
seasonal fluctuations in employment in the Industry as a whole are evident in 
the monthly data. 

Number of Employees by States 

The average number of wages earners employed in each of the ten leading 
states is given in Table XI, for the years 1929, 1931, and 1933. A breakdown 
by states is not available for 1934. These ten states contained 88 per cent 
of the total wage earners in 1929; 89 per cent in 1931; and the nine leading 
states accounted for 82 per cent of the total employees in 1933. The relative 
positions of the 3 most important states — Massachusetts, Pennsylvania, and 
New York — did not change during the years covered by the Table. Although the 
general trend was downward, the 1933 figures were higher than the 1931 figures 
in 4 states, namely, Massachusetts, Michigan, Wisconsin — and to a lesser ex- 
tent, in Ohio. 

TABLE XI 
Number of Employees, by Principal States 



State 



1929 



1931 



1933 



U. S. Total 

Delaware 

Illinois 

Mas sachuse 1 1 s 

Michigan 

New Jersey 

New York 

North Carolina 

Ohio 

Pennsylvania 

Wisconsin 

Other states 



= ,932 



42,047 



2,686 


1,964 


3,561 


3,479 


10,707 


8,657 


2,070 


1,990 


4,159 


3,380 


5,354 


4,715 


1,329 


1,008 


1,529 


1,361 


8,876 


7,924 


3,791 


2,-916 



5,770 



4,653 



44,191 

a/ 

3,403 
9,980 
2,511 
2,303 
4,684 
912 
1,384 
7,834 
• 3,381 

7,796 



(Continued on following page) 



1/ See Table XI. Basic data for 1334 estimate from Bureau of Labor Statis- 
tics, Trend of Employment. Index of factory employment for the Tanning, 
Currying, and Finishing Industry multiplied by the Census base figure and 
adjusted by NRA, Research and Planning Division, to the 1933 Census totals, 

8584 



-16- 
TABLE XI (Cont'd) 

Source; Census of Manufactures , "Leather Goods; Tanned, Curried, and Finish- 
ed." Data for establishments with an annual production of less than 
$5,000 are excluded. 1934 data are not available. 

a/ Included in "Other states." 



Total Annual Wages 

Total annual 
and $43,076,000 in 



wages paid were $63,413,707 in 1929, $49,541,526 in 1931, 
1933. The 1934 figure has been estimated at $5.3, 196, 000. ±' 



Annual Wages by States 

Annual wage payments in each of the ten leading states are shown for the 
years 1529, 1931, and 1933, in Table XII. A breakdown by states is not avail- 
able for 1934. The ten states listed accounted for about 90 per cent of total 
wage paid in 1929 and 1931. In 1933 the nine leading states accounted for 85 
per cent of the total. As in the case of number of employees, Massachusetts, 
Pennsylvania, and New York were the most important states — in the order 
mentioned — in each of the years for which the data are given. 

TABLE XII 

Annual Wage Payments, by Principal States 
(in thousands) 



State 



1929 



1931 



1933 



U. S. Total 


$ 63,414 


Delaware 


3,170 


Illinois 


4,946 


Massachusetts 


14,207 


Michigan 


2,534 


New Jersey 


6 , 004 


New York 


7,021 


North Carolina 


1,132 


Ohio 


2,198 


Pennsylvania 


11 , 324 


Wisconsin 


4,648 



$ 49,542 



$ 43,076 



2,239 


a/ 


4,076 


3,547 


10,698 


11,078 


2,068 


1,854 


4,478 


2,493 


6,497 


5,723 


721 


588 


1,693 


1,303 


9,463 


7,198 


3,059 


2,831 



Other states 



>,130 



4,549 



6,456 



Source; Census of Manufactures , "Leather Goods; Tanned, Curried, and Finished. ' 
Data for establishments with an annual production of less than $5,000 
are excluded. 1934 data are not available. 

a/ Included' in "Other states." 

1/ See Table XII. 3asic data for 1934 estimate from Bureau of Labor Statis- 
tics, Trend of Employment . Index of factory payrolls for the Tanning, 
Currying, and Finishing Industry multiplied by the Census base figure and 
adjusted by NRA, Research and Planning Division, to the 1933 Census totals. 



8584 



\ 



-17- 

Average Wages t '>nd Hours Worked 

The average hourly and weekly wage and the average hours worked per week 
per employee are given in the following tabulation. It will tie seen that 
although hourly rates were somewhat higher in 1934 than in 1929, weekly earn- 
ings were considerably lower, due to the shortened work week. 

TABLE XIII 

Average Hourly and Weekly Wages and 
Average Hours Worked Per Week 



Year 



Ave rage 
Hourly 
Wage s&/ 



Ave rage 
Weekly 
Wage s^/ 



Average Hours 
Worked Per 
WeelcS/ 



1929 
1931 

1933 
1934 



$ .505 
.485 
.438 
.536 



$25.50 
22.89 
18.94 
20.24 



47.5 
45.0 
41.6 
36.7 



Source: As indicated in footnotes. 

a/ 1929 and 1931 data from National Industrial Conference Board, Service 
Letter , adjusted by NRA, Research and Planning Division, to Bureau of 
Labor Statistics data. 1953 and 1934 data from Bureau of Labor 
Statistics Trend of Employment . 

b/ Bureau of Labor Statistics, Trend of Employment . 



Average Hours and Earnings by States 

A bulletin published by the Bureau of Labor Statistics provides data on 
average hours actually worked and average wages in the Industry for fifteen 
states. The unusually low weekly wages in North Carolina are due to a com- 
bination of a short work week (22 hours) and extremely low hourly wages — the 
lowest of any state surveyed. The highest wages were paid in New York, New 
Jersey, and New England, with hourly earnings of more than 52 cents and weekly 
wages of $22.00 or higher. (See Table XIV.) 

TABLE XIV 

Average Hours and Average Earnings, 
by Principal States, 1932 



State 



Average Hours 
Actually Worked 
Per Week 



Average Earnings 
Hourly 



Weekly 



Delaware 
Illinois and 
Missouri 



8584 



39.8 $.401 

39.7 .464 

(Continued on following page) 



$ 15.94 
18.45 



-13- 
TA3LE XIV (Cont'd) 

Ken tuck-/- and 

Tennessee 41.4 ..382 15.80 
Massachusetts and 

New Hampshire 42.8 .523 22.38 

Michigan 45.0 .359 16.16 

New Jersey 44.4 .524 23.25 

New York 42.5 .529 22.48 

North Carolina 23.0 .309 8.97 

Ohio 45.1 .477 21.51 

Pennsylvania 44.6 .468 20.89 

West Virginia 33.1 .372 12.29 

Wisconsin 40.0 .411 16.45 

Average, above 

states 42.0 .471 19.74 

Source; Bureau of Labor Statistics, Wages and Hours of Labor in the Leather 

Industry, 1932 (Bulletin No. 589). The study was based upon a 57 per 
cent sample of wage earners. 

Weeks Worked Per Year 

No accurate information is available on the rverage number of weeks 
actually worked in a year per employee, hut reliable estimates by members of 
the Industry place the average at approximately 45 weeks. 

Employees Under 16 Years of Age 

According to the general report on occupations in the Population Census, 
there were 186 employees under 16 years of age listed for the Industry in 
1930, the only recent year for which such data are available. Of this total, 
125 were classified as operatives and 61 as laborers. It should be noted that 
these data refer not to the number actually employed in that year, but to the 
number reporting themselves as belonging, l>y occupation, to this Industry. 

Labor Cost 

Wages in the Leather Industry constituted 13.2 per cent of the total 
value cf product in 1929, according to the Census of Manufactures, and in- 
creased to 18.2 per cent in 1931 and 1933. Detailed information is presented 
in Table XV. 

TABLE XV 

Labor and Material Costs Compared with Total 
Value of Product 





Total Value 
of Product 


Total Labo 


r Cost 


Total Material 
Costa/ 


Year 


Amount 


per Cent 
of Total 


Amount 


Per Cent 
of Total 


1929 
1931 

1933 


$431,340,299 
271,137,694 
237,202,000 


$63,413,707 
49,541,526 
43,075,000 


13.2 
18.2 
18.2 


$337,597,868 
172,785,669 

133,177,000 


70.1 
63.7 
58.3 



8584 (Continued on following page ) 



-19- 

TA3LE XV (Cont'd) 

Source: Census of Mar.uf £cturos , "Leather Goods; Tanned, Curried, and 

Finished." Data do not include establishments whose annual pro- 
duction is less than $5,000. 

a/ Includes "fuel and purchased electric energy." Cost of fuel and 

purchased electric energy constituted 2.3 per cent of total cost of 
materials in 1*927 and 2.0 per cent in 1929. 



8584 



-20- 

CHAPTER III 

MATERIALS: RAW A1ID SEMI-PROCESSED 

Frincipal l.iaterials Used 

The principal raw materials used in the manufacture of leather are 
steer, cow, "bull, and horse hides, and calf, kip, goat, kid, sheep, lamb, 
and other skins. (When referring to leatner, the raw material is referred 
to either as hides or skins. The pelts from large animals such as the cow 
and horse are termed hides, while those from the smaller animals are known 
as skins. There is a stage of growth, however, "between the calf and the 
cow when the covering is known as kip.) 

The more important tanning and other materials used "by the Industry- 
are tanning extracts; hemlock, chestnut, oak, spruce, quebracho, and 
various other "barks, woods, and plants from which tannic acid is derived; 
chromium salts and other mineral tannages; lime, sodium, sulphide, lactic 
and sulphuric acid, dyes, "bleaches, finishes, and other chemicals; and cod, 
menhaden, petroleum, linseed, sulphonated, and other oils. 

Cost of Materials 

The Industry's total cost of materials, including fuel and purchased 
electric energy (which amounted to 2.3 per cent of the aggregate in 1927 
and 2.0 per cent in 1929), fell off from $337,597,868 in 1929, according 
to the Census of Manufactures, to $172,785,669 in 1931 and $138,176,928 
in 1933. Materials represented 70.1 per cent of the total value of products 
in 1929, 63.7 per cent in 1931, and 58.3 per cent in 1933. Comparable data 
for 1934 are not available. (See Table XV.) 

The best estimates within the Industry place the value of tanning ex- 
tracts consumed by the Industry in a year at $9,000,000. Deducting this 
amount and two per cent for fuel and purchased electric energy leaves roughly 
$160,000,000 in" 1931 and $126,000,000 in 1933 as the aggregate spent for 
hides and skins, chemicals, and other materials. The amount expended for 
chemicals and other materials is, of course, quite small in relation to the 
cost of the raw stock. 

Source of Materials 

Hides and skins used in the manufacture of leather are produced in 
practically every state of the Union and a great many foreign countries. 
In spite of the large domestic supply of cattle hides, calfskins, and 
sheepskins, our tanning industry imports a considerable volume of raw 
stock, including almost the entire quantity of goat and kidskins tanned 
in the United States. Within comparatively recent years, this country 
has taken a place among the major importers of hides and skins. 

Imported cattle hides are received principally from Argentian, 
Canada, and Brazil, in the order named; calf and kip skins from Canada, 
France, C-eraany, Sweden, and other European Countries; sheep and lamb skins 
from ITew Zealand, Argentina, United Kingdom, Brazil, and British Africa; 
and goat and kid skins from British India, China, Hongkong, and Brazil. 

8584 



-21- 

The volume of the principal kinds of raw hides and skins imported is 
shown in Table XVI. These kinds show no increase during the recovery 
period, 1934 imports being markedly below 1933. 

TABLE XVI 

Volume of Imports by Principal Kinds of Raw Hides and Skins 

(in thousands) 



Kind 


1929 


1931 


1933 


1934 


Cattle Hides 


5,508 


1,880 


2,758 


1,341 


Calf and Kip 










Skins 


8 , 726 


5,323 


6,292 


2,084 


Goat and Kid 










Skins 


60,133 


48,864 


50,764 


40,304 


Sheep and Lamb 










Skins 


25,839 


16,323 


21,939 


14,229 


Source: Bureau o: 


f Foreign 


and Domestic 


Commerce, 




Commerce 


Yearbook, 









A large part of the tanning materials, such as bark and wood, ex- 
tracts, oils, dyes, and chemicals is produced in various parts of the 
United States. The remainder is imported from Great Britain and Conti- 
nental European Countries, Argentina, India, Asia Minor, Sicily, and 
Central America. 

Some tanners still make their own tannin, the active tanning in- 
gredient which is largely produced from bark, (except in chrome tanning 
where basic chromium sulphate is the active agent), but the majority of 
tanners buy their extracts ready for use. Most of the extracts today are 
manufactured from oak and hemlock bark, chestnut and spruce wood, and 
from cuebracho, which comes from the Argentine. Tannin is also derived 
from uyrobolan, a nut of India; valonia, a nut of Asia Minor; sumac bark 
from Sicily; divi divi pods from Central America; and other so^irces. The 
tanners purchase the extracts from the producers' domestic agents, who also 
usually handle tannin made in this country. 

Supply of Raw Materials 

The supply of raw materials is very largely governed by the operations 
of the meat-packing and livestock industries. Ulhile a few animals are killed 
solely for their skins, most hides and skins are by-products of the slaugh- 
tering and meat-packing business. The tanners buy practically all their 
domestic raw stock direct from the packers; and their imports through 
brokers located in this country. 

As already indicated domestic requirements for hides and skins are 
normally very much in excess of the number of animals slaughtered for food 
in the United States. As a result, while this country ranks second only to 
Germany as an exporter of leather, it is also one of the leading importers 
of hides and skins. 

8584 



-22- 
CEAPTEH IV 
PRODUCTION AKD DISTRIBUTION 
Production in Leading States 

The value of the leather produced in each of the ten leading states 
is given below. Comparable information regarding the volume of production 
is not obtainable. 

The ten states listed produced about 87 per cent of the total value 
in 1929, and 88 per cent in 1931. The nine leading states accounted for 
about 85 per cent of the 1953 total. 

TABLE XVII 

Value of Product, by Principal States 
(in thousands) 





State 


1929 


1931 


1955 


U. S. Total 


$481 , 340 


$271,138 


$257,202 


Delaware 


20,613 


10,360 


a/ 


Illinois 


37,479 


20,501 


20,586 


lias sachuset t s 


88 , 348 


50,051 


48,650 


Michigan 


19,250 


10,143 


10,116 


New Jersey 


39,565 


22,405 


13,355 


New York 


53,794 


33,288 


29,510 


ilorth Carolina 


13,017 


8,465 


6,562 


Ohio 


15,975 


9,379 


8,750 


Pennsylvania 


95,959 


60,282 


45,525 


Wisconsin 


30,015 


14,077 


15,655 



Other states 62,325 31,687 40,537 

Sorjrce: Census of Manufactures , "Leather Goods: Tanned, Curried, 
and Finished. " Data for establishments whose annual 
product is less than $5,000 are excluded. 

a/ Included in "Other states." 



Sxoorts 

Value . - Uhereas the United States is second only to the United 
Kingdom as an importer of leather, and second only to Germany as an export- 
er of leather, the balance of trade in this commodity is in our favor, 
roughly two to one. As shown in Table XVIII exports in 1934 were valued at 
$15,306,000, or only a little more than one- third the 1929 figure. 



8584 



-23- 

TABLE XVIII 

Value of Exports, "by Type of Leather 
(in thousands) 



Type of Leather 




1929 


1931 


1933 


1934 


Upper, Other than Patent 












Total 




$27 , 058 


$14,177 


$7,299 


$9,344 


Cattle Side-Grain 




3,103 


1,293 


1,013 


1,333 


Finished Splits 




610 


234 


105 


227 


Wax and Rough Splits 




1,636 


453 


111 


120 


Calf and Uhole Kip 




7,363 


2,409 


1,293 


1,990 


Sheeu and Lamb 




1,037 


682 


225 


451 


Coat and Kid a/ 




12 , 640 


8,733 


4,341 


4,913 


Other Upper, not Patent 


£/ 


616 


373 


211 


255 


Patent Upper 












Total 




8,247 


7,543 


4,424 


3,342 


Cattle Side 




6,856 


6,720 


4,273 


3,237 


Goat and Kid 




376 


456 


127 


62 


Horse and Colt 




269 


97 


6 


4 


Other Upper, Patent 




246 


70 


18 


39 


Sole 




2,736 


1 , 535 


310 


655 


Clove 




1,131 


697 


539 


760 


Other c/ 




3,771 


1,861 


1,207 


1,705 


Grand Total 




42,943 


25, 613 


13,779 


15,306 


Source: Bureau of Forei 


gn and 


Domestic 


Commerce: 


1929 and 1931 


data 


from Commerce Y 


earboo' 


I:, 1933 and 1934 dat; 


3. from l.ionthly 


Summary 


of Foreign Commerce. 










a/ Includes glazed 


kid. 










b/ Includes horse 


and colt. 








c/ Consists of harness, 


collar, saddlery, up: 


aolstery, automobile, 



fancy, case, bag, strap, raptilian, and other leathers and 
tanned skins. 



Volume. - Tables XIX and XX, present data showing volume of e;-;ports, 
by kind end type of leather, respectively, In neither table is the unit 
of measure the" same for all items listed, and it is therefore not possible 
to present totals. 

It will be noted from Table 7LV1 that exports of two of the groups 
were smallest in 1932; for the other two, they were smallest in 1933. 
In only one case— that' of cattle hides— was the 1934 figure lower than 
the 1933. She 1934 exports of calf and kip skins, and goat and kid 
skins, although higher than the 1933 figure, were still less than half 
the 1929 volume. 

8584 



-24- 



TABLE XIX 



Volume of Export-. , by Principal Kinds of Leather, 

1929-1934 
(in thousands) 



Kind of Leather 1929 1930 1931 1932 1933 1934 



Cattle Hides 1,061 1,079 1,163 857 895 770 

Calf said Kip Skins 2,027 1,469 939 621 684 898 

Goat and Kid Skins 8,754 J, 094 7,264 4,536 4,176 4,247 

Sheep and Lamb Skins 1,145 795 1,118 527 511 



685 



Source: Tanners' Council of America, special compilation for ERA, 
Research and Planning Division. 

As can "be seen from Table XX, the volume of certain types of leather 
exports was still declining in 1934. Three out of the four "patent upper" 
group exported less in that year than in 1933. Several items showed much 
less tnan half the 1929 volume. 

TABLE XX 
Volume of Exports, "by Type of Leather 



Uni t 
Type of Leather (OOC's) 1929 1931 193J 



1934 



Upper, Other than 
Patent 
Cattle Side 

Grain square feet 11,181 6,857 6,076 7 368 
Finished Splits » " 3,921 2,355 1,340 



2, 035 
406 



6 



Wax and Rough 

Splits pounds 3,465 1,370 344 

Calf and Uhole 

Si P square feet 20,245 9,582 6,827 3,98 

Sheep and Lamb square feet 8,218 8,494 3,997 s'203 

Goat and Kid a/ square feet 41,328 35^067 20^467 21* 058 

Other Upper, ~ ' 

not Patent b/ square feet 2,130 1,611 1,006 1 156 
Patent Upper ' 

Cattle Side square feet 22,710 34,391 27,322 19,4-12 

Goat and Kid square feet 1,935 1,249 406 ' 176 

Horse and Colt square feet 697 354 24 13 
Other Upper, 

Patent square feet 834 373 111 22^- 

S° le pounds 9,951 8,723 1,558 3,74-3 

Glove square feet 5,962 3,086 1,889 2,634 

Source: Bureau of Foreign and Bomestic Commerce: 1929 and 1931 data from 
Commerce Yearbook. 1933 and 1934 data from l.ionthly Summary of 
Foreign Commerce . '' 

a/ Includes glazed kid. 

b/ Includes horse and colt. 

8584 



-25- 

Nature of Advertising: 

Advertising by manufacturers of leather has been rather sporadic and 
more in the nature of publicity than of advertising, The Industry as a 
whole does not favor advertising by its individual members. The media gen- 
erally used are trade journals, magazines, newspapers, and window displays. 

Trade-Harks 

Practically all the products of the Leather Industry are trade-marked 
when they leave the tannery, but only a very small percentage — probabl3 r 
around one or two per cent — of these identifying marks are discernible after 
the leather has been cut and made into boots and shoes, gloves, luggage, and 
other articles. In the case of cut soles, however, probably about 50 per 
cent — the better quality grades produced by each establishment — carry the 
trade-mark of the manufacturer. 

Methods of Distribution 

Leather manufacturers distribute their product by direct sales contact 
with industrial and other large consumers, as well as with the wholesale 
dealers; and also through the manufacturers own sales branches to dealers 
and consumers. The relative importance of these outlets may be seen in 
Table XXI, which is based upon data for 1929, the latest available on this 
matter. It will be seen from this table that nearly one-half of all sales 
are made directly to industrial and other large consumers. The next most 
important type of agency is the wholesaler to whom nearly one- third of the 
sales are made. 

TABLE XXI 

Factory Sales, by Type of Distributing 
Agency, 1929 



Factory Sales Per Cent 
Type of Agency (000's) of Total 

Industrial and Other 

Large Consumers $ 190,052 47.6 

Wholesalers a/ 130,314 32.6 

Manufacturers' Own 

Wholesale Branches b/ 79,177 19.8 

Manufacturers' Agents, 

Brokers, etc. 61,590 15.4 

Total 399,543 100.0 

Source: Bureau of the Census, Distribution of Sales of Manufacturing 

Plants, 1923 . Data do not include establishments whose annual 
production is less than $5,000. Total sales are less than 
total value of production by amount of contract work, inter- 
plant transfers, and inventory changes. 

a/ Includes sales to retailers. 

b/ Inclua.es sales to manufacturers' retail branches. 



8534 



It nay "be well to state here that a large part of the Leather Industry's 
output is carried within the Industry to the point of finished soles and 
other cut-shoe stock. These are generally sold to the hoot and shoe manufac- 
turers directly or through sales branches, together with sides and backs, 
Uiey are also sold through jobbers to the shoe-rebuilding trade. The major 
portion of the remainder of the Industry's products is distributed directly 
or through its own branches, and by wholesalers, to manufacturers of such 
prod-acts as bags, luggage, and fancy leather goods, gloves, saddle r; r and 
harness, athletic goods, upholstery, automobiles, and furniture, 

Wholesale Sales b? r Type of Wholesaler 

In 1953 there were 425 wholesalers of all types handling leather, and 
their net sales totaled $106,992,000, of which $53,112,000 — or about half- 
was sold by 507 wholesalers proper. During 1929, net sales of the 559 whole- 
salers of leather amounted to $288,752,000, of which $129,861,000 was sold 
by wholesalers proper, who numbered 597 in that year. The 1933 net sales 
were accounted for as set forth in Table XXII. 

TABLE XXII 
Het Sales of Leather by Type of Wholesaler, 1933 



iraraber of Net Sales 

Type Establishments " (000' s) 

Wholesalers Proper 307 $ 55,112 
Manufacturers' Own Sales 

Branches with Stocks 31 25,316 

Commission Merchants 15 11,706 

Selling igents 16 8,652 

Manufacturers' Agents 27 4,110 
Manufacturers' Own Sales 

Branches without Stocks 22 3,461 

Brokers 5 2,635 

Total 423 106,992 



Sour c e : C ensus of American Business, Tfliolesale Distribution, 195 5. 
Data do not include wholesalers with an annual business of 
less than $1,000. 



Wholesale Sales by States 

Ike distribution of wholesale sales by leading states is shown in 
Table XXIII for the year 1933, Massachusetts alone accounted for more than 
half the total, hew York, Pennsylvania, and Illinois were the next most 
states, in the order mentioned. 



8584 



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.1 M.I II 



Net Sales of Leather Wholesalers, 

by Principal States, 1929 a/ 

(in thousands) 



State 






Net Sales 


U. S. Total 






$ 288,752 


California 






5,937 


Connecticut 






494 


Illinois 






18,074 


Massachusetts 






156,226 


Missouri 






7,701 


New York 






51,609 


Ohio 






7,663 


Pennsylvania 






19,990 


Other states 






21,053 


Census of Whole 


sale 


.Distribution, 


. 1929. Data 



include wholesalers with an annual business of less than $1,000. 

a/ "Leather wholesalers" are here defined to mean wholesale 
establishments whose major line business is leather. 

Methods of Shipment 

The Industry's products are shipped mostly by railroad freight, 
but an undetermined portion is also delivered by truck. Only a very small 
amount — largely samples and highly seasonal or styled merchandise — is for- 
warded by express or parcel post. 

Lvider.ce of Interstate Commerce 

Eegarding the interstate character of the Industry, it may "be worth- 
while to note the interstate character cf the operations of some leather 
concerns, as suggested by facts appearing in Moody's Manual of Industrials 
for 1934, A company with its headquarters in New York owned tanneries in 
9 states; extract companies in 3; lands growing bark and timber, and other 
properties in 4 states. A Philadelphia leather manufacturer had plants in 
2 states, while one in Ohio had subsidiaries or affiliated companies in 6 
states. 

A Maine leather producer owned plants in 3 other states, operated 
8 branches in leather centers of the United States, and maintained connec- 
tions in various foreign countries. A firm with its main office in Phila- 
delphia had tanneries and an extract company in another state, and ware- 
houses in 2 states. 



8584 



-28- 

CEAPTSH V 

GENEBAL INEOBMATION 

Unfair Trade Practices 

The most prevalent unfair trade practices prior to the inception of the 
Code were the imitation and simulation of designs, patterns, trade names, 
and trade-marks of other leather manufacturers; the allowance of excessive 
discounts and long-term credits to favored customers; the use of post- 
datings; the failure to penalize "buyers for overdue accounts; the abuse of 
forward ordering; and the anticipation of discounts by invoicing at equiva- 
lent net prices. 

Other unfair trade practices employed by members of the Industry were 
false and misleading advertising, mislabeling, and misbranding; substituting 
inferior materials without the purchaser's knowledge or permission; allowing 
secret rebates and refunds; giving free samples; granting advertising allow- 
ances which lower the price below the seller's cost; giving time guarantees; 
defaming competitors and their products; misappropriating competitor's busi- 
ness by inducing breach of contracts; espionage, and piracy of patents and 
copyrights; and excessive claims and unjustifiable returns on the part of 
the buyers, attributable mostly to the nature of leather. 

Standard Trade and Securities for May 22, 1935, states that the over- 
capacity of the Tanning, Currying, and Finishing Industry has led to intense 
competition, below cost selling, and generally unwholesome trade conditions. 

Price Competition 

There are no "areas" in the leather business and the tanners sell their 
products in all sections of the country in a highly competitive market. The 
old-line tanners fight each other, frequently giving the consumers the benefit 
of the sensitive price fluctuations to their own detriment, (while the packer- 
tanners do not engage in such "cut- throat" competition). In consequence, the 
prices of leading members of the Industry or of those in a certain region have 
a far-reaching influence on the national price structure of leather. 

Trade Associations 

The Tanners' Council of America includes in its membership practically the 
entire Tanning, Currying, and Finishing Industry. It was established in the 
latter part of 1917 through the amalgamation of the National Association of 
Tanners, the Morocco Manufacturers' Association, and the Patent and Enamel 
Leather Manufacturers' Association. Collateral trade organizations are the 
American Leather Belting, the Grain Insole, Box Toe and Counter Manufacturers' 
the Welting, the Cut Sole, the National Hat and Cap Leather, and the National 
Heel Manufacturers' Associations. 

The active members of the Council are classified into the following 
groups: 

Sole and Belting 
Harness and Collar 
Side Upper and Patent 

8584 



y 



-29- 

Bag, Case and Strap 
Calf and Kip 
Goat and Cabretta 
Sheep and Glove 
Fancy 
Upholstery 

These groups have complete autonomy. From among the membership of the Council 
any group may form any auxiliary or affiliated organization for the purpose 0:1 
serving specific or local group interests as well as the general objectives o'J 
the larger association. 

Any individual, partnership, or corporation engaged in tanning or the 
manufacture of leather is eligible to become an active member of the Tanners' 
Council. Exclusive selling agents of tanning firms may also become members 
provided their principals are members. Membership fees are ba.sed on annual 
production of leather by individual firms, adjusted among the various divi- 
sions to take into consideration selling values of leather. The minimum an- 
nual dues for tanners or exclusive selling agents are $100 per year, and for 
leather finishers, $50 per year. 

Labor Conditions 

The Industry is not nationally unionized, and hours and wages are usually 
determined either by local tanning associations or by individual companies. 

Much of the labor in a tannery is skilled or semi-skilled, and where the 
plant is located away from the big centers very little labor turnover is 
felt. In the larger centers, however, the turnover is more pronounced, due 
to the fact that the workers float from one plant to another. The Industry 
as a whole has been regarded as "backward" in developing machinery for certai; 
departments, attributable perhaps to its ability to obtain cheap labor for 
these departments. 

Imports 

Value . - It --as stated in the foregoing Chapter on production and Dis- 
tribution that the United States is the second largest importer of leather in 
the world. Table XXIV gives only the total value of imports for consumption. 
The 1934 imports, which were less than 15 per cent of the 1929 figure, were 
considerably lower than the 1933 imports and somewhat below those for 1932. 

TABLE XXIV 

Value of United States Imports of Leather for Consumption, 1929 - 1934. 

(in thousands) 



Years Value (OOP's) 

1929 $ 44,541 

1930 23,128 

1931 10,759 

1932 5,919 

1933 9,240 

1934 6,347 

Source: Bureau of Foreign and Domestic Commerce, Commerce Yearbook . 
8584 



3„8 


1.7 


0.6 


0.7 


0.4 


6.4 


10.5 


5.7 


4.9 


9.8 


0.1 


0.4 


1.3 


1.0 


1.4 


7.8 


10.6 


16,9 


15.9 


22.0 


7.6 


13.4 


3.9 


1.0 


2.5 



-30- 

Value by Types of Leather . - Table XXV gives a percentage "breakdown of the 
value of leather imports, by type of leather, showing that upper leather 
(except patent) usually accounts for approximately two— thirds to three-fourths 
of total imports. 

TABLE XXV 

Percentage Distribution of Value of Imports, 
by Type of Leather, 1929 - 1933 

Type of Leather 1929 1930 1931 1932 1933 

Upper, Except Patent 65.3 63,4 71.6 76.5 63.9 

Patent 

Sole 

C-love and Garment 

Other Finished 

Other Rough 

Total 100.0 100.0 100.0 100.0 100.0 

Source: Bureau of Foreign and Domestic Commerce, 
Commerce Yearbook , 

List of Experts 

A list of seven experts in the Industry follows, together with their 
addresses and affiliations. These persons were all members of the General 
Planning Committee of the Leather Industry under the Code. 

Mr. Harold Connett (Kid) 

Vice President, Surpass Leather Company, 
Kinth and Westmoreland Streets, 
Philadelphia, Pennsylvania, 

Mr. Carl F. Danner (Sole Leather) 

President, American Hide and Leather Company, 

17 East Street, 
Boston, Massachusetts. 

Mr. Percival E. Foerderer, 

President, P. H. Foerderer Company, 
Philadelphia, Pennsylvania. 

Mr, Willard Helburn ( Sheep) 

President, Helburn-Thompson Company, 

18 Goodhue Street, 
Salem, Massachusetts. 

Mr. V. G. Lumbar d (Calf) 

President, Ohio Leather Company, 
1052 North State Street, 
Girard, Ohio. 



8584 



-31- 

ivlr. David G-. Ong, (Sole Leather) 

President, United States Leather Company, 
27 Spruce Street, 
New York, New York. 

Mr. Merrill A. Watson, 

Director, Trade Survey Bureau, 
Tanners' Council of America, 
100 Gold Street, 
New York, New York. 



8584-#