jjfifto —
NATIONAL RECOVERY ADMINISTRATION
■
DIVISION OF REVIEW
EVIDENCE STUDY
NO. 37
OF
THE SILK TEXTILE INDUSTRY
Prepared by
W. C. HENDERSON
September, 1935
PRELIMINARY DRAFT
(NOT FOR RELEASE: FOR USE IN DIVISION ONLY)
i
THE EVIDENCE STUDY SERIES
The EVIDENCE STUDIES were originally planned as a means of gathering evidence
tearing upon various legal issues which arose under the national Industrial Re-
covery Act.
These studies have value quite aside fron the use for which they wore originally
intended. Accordingly, they are now made available for confidential use within the
Division of Review, and for inclusion in Code Histories.
The full list of the Evidence Studies is as follows:
1. Automobile Manufacturing Ind. 23.
2. .Boot and Shoe Mfg. Ind. 24.
3. Bottled Soft Drink Ind. 25.
4. Builders' Supplies Ind. 26.
5. Chemical Mfg. Ind. 27.
G. Cigar Mfg. Industry 28.
7. Construction Industry 29.
8. Cotton Garment Industry 30.
9. Press Mfg. Ind. 31.
10. Electrical Contracting Ind. 32.
11. Electrical Mfg. Ind. 33.
12. Fab. Metal Prod. Mfg. , etc. 34.
13. Fishery Industry 35.
14. Furniture Mfg. Ind. 36.
15. General Contractors Ind. 37.
16. Graphic Arts Ind. 38.
17. Gray Iron Foundry Ind. 39.
18. Hosiery Ind. 40.
19. Infant's & Children's Wear Ind. 41.
20. Iron and Steel Ind. 42.
21. Leather 43.
22. I/umber & Timber prod. Ind.
Mason Contractors Industry
Men's Clothing Industry
Motion picture Industry
Motor Bus Mfg. Industry (Propped)
needlework Ind. of Puerto Rico
Fainting & Paperhanging & Decorating
photo Engraving Industry
plumbing Contracting Industry
Retail Food (See Ho. 42)
Retail Lumber Industry
Retail Solid Fuel (propped)
Retail Trade Industry
Rubber Mfg. Ind.
Rubber Tire Mfg. Ind.
Silk Textile Ind.
Structural Clay products Ind.
Throw i ng I ndus try
Trucking Industry
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
i7. 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 31dg. & Repairing Ind.
53. Wholesaling or Distributing Trade
L. C. Marshall
Director, Division of Review
CONTENTS
Page
Foreword 1
CHAPTER I - THE NATURE OF THE INDUSTRY AND
HISTORICAL BACKGROUND 2
Definitions of the Industry
History of the Industry 2
Operations of the Industry 3
Imoortation of the Raw Silk 3
Irepar,'.-.tion of the Yarn 3
leaving and finishing the
Cloth 3
Number of Establishments 4
Size of Establishments 4
Number of Establishments by States 5
Mills Operating in More than
One State 6
Caotial Investment and Financial Condition. . . .
Failures
Volume and Value of Troduction. ....
Estimated Total froductive Capacity
Estimated Unused Iroductive
Capacity 10
Comr.etition from Other Industries ........ 10
Troductf Used by Other Industries H
CHAFTER II - LABOR 1
o
Total Number of Employees 12
Number of Emoloyees by States ■L-
Tctal Annaul Wages 12
Annual Wages by States 1^
Percentage Labor Cost is of
Total Value 13
Average Hourly and Weekly Wages,
and Hours Worked "
Effect of the Code on Wages and Hours 15
Number of Weeks Worked 1?
Child Labor i3
8647
CONTENTS (Cont'd)
lage
CHAPTER III - MATERIALS - RAJ AND SEMI-PROCESSED 20
Total Cost of Raw Materials 20
Per cent Cost of Materials is of
Total Value 20
Principal Materials Used. .... 23
Exnenditures for Principal Raw
Materials . 23
Source of Saw Materials 24
Machinery and "Equinraarrt 24
CHAPTER IV - PRODUCTION AND DISTRIBUTION 25
Value of Production in Principal
States " 25
Shift in Centers of Production 25
Exports 25
Advertising 28
Comparison of Production and Retail
Sales by States 28
CHAPTER V - TRADE PRACTICES 31
Unfair Trade Practices Prevalent
Before Code 31
Methods of Unfair Competition Now
Prevalent 32
Effect of Price:' of Individual
Members on the National Price
Structure • 32
CHAPTER VI - GENERAL INFORMATION 33
Manufacturers' Organizations 33
National Federation of
Textiles, Inc , 33
Broad Silk Manufacturers of
Faterson, N. J 33
Master Ueavers Institute °3
Blackstone Valley Manufacturers
Association, Providence, R. 1 3,i
- -. .. . _ Silk Manufacturers of
Allentown, Pa 33
Relationship Between Labor and
Management 34
List of Ejrperts 34
~o0o-
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-li—
TABIDS
Page
TABLE V -
TABLE I - Fuucer 01' Establishments in the
Silk Industry a 3 a Whole, l>y
Frincipal States. ....
TABLE II - Eumber of Looms Installed, by
Principal States, 1934
TABLE III - dumber of Sill" and Rayon Companies
Having Mills in More than One
State, Classified by Number of
Stages in Which "hey Operate,
1930 ".
TABLE IV - Capital Investment of 1C7 Silk
Weaving and Throwing Companies,
1933 and the First Si:: Months of
". or? a
L30*t,
Total Net Income Before Interest
and ITet Income Transferred to
Surplus of 107 Silk Weaving and
Throwing Companies, 1933 and
First Si?: Months of 1934
TABLE 71 - Bate of Return on Capital Stock
Equity in Specified Divisions of
the Textile Industries, 1933 and
1934
TABLE VII - Value and Volume of Production of
Broad Goods, and Value of Ribbons
Produced
TABLE VIII - Activity of Broad Looms Owned by
Stock— Carrying Mills and Commission
Weavers, 1929-1934
Average Number of Wage Earners in
the Silk Industry as a Whole, "by
Principal States
Annual Wages in the Silk Industry
as a Whole, by Principal States ......
TA33
TABLE X -
13
14
8647
-in-
TABLES (Cont'd)
Page_
TABLE XI - Average Hourly and Weekly Wages
and Average Hours Worked Per
Week in the Silk Industry as
a Whole 14
TABLE XII - Employment, Payrolls, Hours and
Wages in the Industry as De-
fined "by the Code, 1933-1934 16
TABLE XIII - Average Hours and Earnings "by
States in the Industry as a
Whole, 1931 and 1934 17
TABLE XIV - Hourly Earnings in the Silk and
Rayon Industry, "by Sex and Region,
August, 1933 18
TABLE XV - Hourly Earnings in the Silk and
Rayon Industry, "by Sex and Region,
August, 1934 19
TABLE XVI - Percentage Labor and Raw Material
Costs Are of Total Value in the
Silk Industry as a Whole 2C
TABLE XVII - Quantity and Cost of Principal
Materials Consumed "by the Silk
Industry as a Whole, 1929 and
1931 23
TABLE XVIII - Value of Products in the Silk
Industry as a Whole, "by Prin-
cipal States 25
TABLE XIX - Volume and Value of Various Silk
and Rayon Products Exported 27
TABLE XX - Volume and Value of Exports of
Broad G-oods Made Wholly or
Chiefly of Silk, "by Country of
Destination, in 1930, 1931, 1933,
and 1934 28
TABLE XXI - Value of Production and Estimated
Retail Sales of Silk and Rayon
Broad Goods, By States, 1929 30
-oOo-
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-IV-
CHARTS
Page
CHART I - TEXTILE FIBER PRICES IN THE
UNITED STATES 21
CHART II - TEXTILE FIBER COITSULIPTION IN
THE UNITED STATES 22
-o0o~
8647 -v-
-1-
THE SILK TEXTILE INDUSTRY
Foreword
The "basic statistical materials contained in this report were taken
from publi cations of the Bureau of the Census, the Bureau of Foreign and
Domestic Commerce, the Bureau of Labor Statistics, and the Federal Trade
Commission. Some additional statistical information has been secured from
non-governmental sources. The principal non-governmental publications
utilized were production and Distribution of Silk and Rayon, a study
published in 1935 by The National Federation of Textiles, Inc., which is
the leading trade association in the Industry; Textile Qrganon, a monthly
publication of Tubize Chatillon Corporation, which manufactures rayon;
and Current Insolvency Trends, issued monthly by Dun and Bradstreet.
The most serious limitations of the statistical material arise from
the fact that the Census of Manufactures data cover both the preparation
and weaving of the yarns, whereas under the codes the throwing of silk
and rayon yarns is considered a separate industry and does not come under
the Code for the Silk Textile Industry. Therefore, all Census data cited
in this report are, to some extent, overstatements since they cover work
which would properly come under the Code for the Throwing Industry. How-
ever, there is no means of accurately allocating the Census figures between
the Silk Textile and Throwing Industries. Whether the data used apply to
the Silk Textile Industry as defined by the Code, or to the Silk Industry
as a whole as defined by the Census Bureau has been noted throughout the
report.
A minor limitation arises from the fact that Census figures do not
cover establishments whose annual value of production was less than $5,000.
It is the author's opinion, however, that there are very few establishments
of that size in the Silk Textile Industry.
Parts of Chapter V and all of Chapter VI are presented as prepared
by the National Federation of Textiles, Inc. , except for minor editorial
changes.
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CHAP TEE I
THE NATURE OF THE INDUSTRY
AND HISTORICAL BACKGROUND
Definitions of the Industry
The Code of Pair Connetition for the Silk Textile Industry defined the
Industry as follows:
"The term 'industry,' ..., means the manufacture of silk and/or rayon
and/or acetate yarn (or any combination thereof) woven fabrics or any
of the processes of such manufacturing except throwing, "but it shall not
not include such manufacturing of rayon and/or acetate yarn fabrics as
are governed "by the provisions of the Cotton Textile Code. The term
shall include also the converting of the woven fabrics enumerated above ,
the manufacture of silk, rayon, and/or acetate yarn sewing threads, spun
silk, woven labels, and shall include such other related branches whether
engaged in merchandising or manufacturing as may from time to time be
brought within the provisions of this Code."
The Census of Manufactures definition of the Silk and Rayon Manufactures
Industry is;
"This industry embraces two classes of establishments; (1) Those en-
gaged primarily in the manufacture of silk a.nd rayon fabrics and other
finished silk and rayon products, not including knit fabrics, hosiery,
and other knit goods made of silk and rayon, which are treated as a part
of the 'Knit Goods' industry and covered by a separate report; (2) those
engaged primarily in the Manufacture of silk yarn (known technically as
organzine, tram, and hard or crepe twist), spun silk, and rayon yarn
(thrown, twisted, or otherwise changed into different forms from those
in vhich purchased) and in the dressing of warps...."
The principal difference between these definitions is the exclusion of
the throwing of silk from the Code definition of the Industry. As was stated
in the Foreword, that portion of the Census data which should be classified
under the Throwing Industry cannot be accurately determined.
History of the Industry
Silk is one of the oldest textile fibres. Chinese myths date the culture
of silk back to 2,640 B. C. , almost 3,200 years before its nature was under-
stood in Europe. One of the three emperors to whom the Chinese ascribe the
beginning of their ancient customs was Huang-Ti, who is said to have introduc-
ed the making of garments of silk. He instructed his Empress, Si-Ling-Chi,
to experiment "ith wild silk worms which lived on mulberry-tree leaves, and
she learned ho-' to feed and raise them, and, what is much more important, how
to reel or unwind the silk filaments from their cocoons. 1/
The first silk mill in the United States seems to have been started by
Rodney and Horatio Hanks, at Mansfield, Connecticut, in 1810. In this mill,
which was 12 feet square, the Hankses made sewing silk and twist on a machine
of their own construction, but the venture never assumed commercial signifi-
cance because the machinery was too crude to produce satisfactory results.
1/ Manchester, H. H. , The Story of Silk and Cheney Silks (1916) revised 1924).
8647
In 1815 William H. Horstnann built a mill in Philadelphia to make trimmings
and ribbons, and he also experimented, with partial success, with machines
for plaiting, braiding, and fringe cutting. A Jacquard loom was imported by
him in 1824. No record has been found of the length of time Korstmann was in
business, but apparently- it was not long.
What has been considered the first really successful silk factory in the
United States was founded on January 2, 1838, by Balph, Ward, and Frank Cheney,
and S. H. Arnold (Cheney Brothers) at South Manchester, Connecticut. In 1844
Cheney Brothers learned the main points of silk dyeing from a Mr. Valentine of
Northamption, Massachusetts, but the process was necessarily crude. In 1847
the first practical machine was patented for the manufacture of sewing silk,
which introduced the doubling, twisting and winding equipment.
Records of 1843 show that the average pay in the Cheney silk mill, which
employed both men and women, was 51 cents a day. Wage rates apparently in-
creased during the next five years, for in 1348 the wages of men in the Cheney
mill averaged $1.14 a day, and those of women, 68 cents a day. The combined
average for all employees was 72 cents.
The tariff placed on silk goods during the Civil War made it possible
to develop the weaving of silk extensively in this country. In 1860 the value
of manufactured silk was $6,600,000, and by 1921 it had increased to $533,-
000,000. 1/
Operations of the Industry
Importation of the Raw Silk. - Silk is received from Japan at the ports
of entry of Seattle, San Francisco, and New York City, by importin-; concerns
which in most instances are owned or controlled by Japanese firms — notably
Mitsui, Mitsubishi, Katakura, and C-unze. The leading American importing firm
is E. Gerli and Company of New York, which is affiliated with the Japanese
Ashia. Conroa.ny. There are, however, some importations by individual manufac-
turing Cu:.Tp-;r.ies whose requirements are sufficiently large to enable them to
have direct connections with Japanese filatures and to function as importers.
Notably among these err Cheney Brothers and Duplan Silk Company.
Preparation of the Yarn. - Raw silk is received in skeins packed in
bales weighing from 130 to 133 pounds. The raw silk must first be put through
certain preliminary steyis in preparation for throwing it into the size of yarn
desired, and after the throwing has been completed the yarn is put up in the
required type of package, i.e., cones for knitting; tubes, spools, cops, warps,
or beams for weaving.
That portion of the silk yarn which is knitted into hosiery and underwear
usually passes through the dyeing and finishing processes in the individual
knitting mill and the resulting protract is sold either by its own sales de-
partment or by appointed selling agents or brokers, to the wholesale and re-
tail trades. The silk yarn which ii; ,</ovon or otherwise processed in the Silk
Textile Indiistry, however, usually does not reach the ultimate consumer by
such direct methods.
Weaving and Finishing the Cloth. - The Silk Textile Industry is divided
from the production standpoint i ito two groups; — stock-carrying mills and
1/ Manchester, H. H. , The Soory 3f Silk and Cheney Silks (1916; revised 1924).
8647
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comraission weavers. The former purchase raw materials, weave their own cloth,
and sell the products to the cutting-un and converting trades or directly to
the wholesale and retail trades. A stock-carrying mill may or may not finish
its own cloth. Commission weavers are those who weave goods on commission as
a usual practice, and seldom, if ever, purchase raw stocks on their own account
or finish the clotb they weave.
During the last few years commission weaving has assumed a new importance.
The falling prices of raw materials, particularly since 1929, were accompanied
"by large inventory losses and price cutting. In this demoralizing situation
some stock- carrying mills began to employ commission weavers, rather than
one rate their own looms, in the expectation of cutting costs. Other mills
that normally operated on their own accounts accepted commission weaving or-
ders. The supply of second-hand looms available for purchase at low prices
from 19S0 to 1933, and the lack of other opportunities for employment, kept
many small operators in business who worked on commission at cut rates.
Aii accompanying development in this situation has been the rising im-
portance of a group known as converters. Their activities consist chiefly of
buying cloth in the greige (unfinished) and finishing or "converting" it
(dyeing, printing, etc.), but they also buy raw materials and have the goods
woven by commission weavers.
For a short time the converters' relations with the commission weavers
were -pofcsi'H.y a. boon tqths industry __ particularly the small mills. The
abundance of commission weavers, however, offered the converters an oppor-
tunity for trading around, especially since the converter would * iu yoently
not onlv buy the raw material and style the fabrics, but also advance money
for payrolls.
This centralization of activities in the hands of the converter has re-
sulted in a shifting of the control of the Industry from the manufacturer to
the merchandiser. Despite this acquisition of power, the, converters have re-
mained very mobile for they have no investment in plants or equipment, and
consequently the;'' are able to move from weaver to weaver, wherever they can
get the work done most cheanly.
Number of Establishments
In 1929 1/ there were approximately 1,491 establishments in the Silk In-
dustry as a whole. In 1931 these had decreased to 1,211, and in 1933 to
1,087, cue perhaps to the failure of a number of small enterprises. (See
table I). The boom in the Industry at the inception of the codes brought the
number back to 1,250 in 1934. 2/
Size of Establishments
The Silk Industry as a whole is comprised of approximately twice as many
small enterprises as large ones, in terms of looms operated and amounts of
money invested. The turn-over among these small firms is very high, a condi-
tion which, it has been asserted, has been due in most instances to unscrupu-
lous converters upon whom this groun is very dependent.
1/ From 1921 to 1929, 1,218 concerns with 61,987 looms entered business, while
1,093 concerns with 61,363 looms went out of business. National Federation
of textiles, Inc ., Production and Distribution of Silk and Hay on Broad
Goods (1935), p. 22
2/ Number registered with the Code Authority.
RP.AT>
Included in the silk and rayon industry are 35 mills with 1,000 looms or
more each, which own 35 per cent of the total number of installed looms. There
is another group of mills — about 325 — which owns from 100 to 1,000 looms
each, or 48 per cent of the total installed looms. A still larger group of
840 mills owns less than 100 looms each., or 17 per cent of the total installed
loomage. 1/
Number of Establishments "by States
The Industry is centered primarily in the Northeastern area of the United
States, with Pennsylvania and New Jersey the most important centers. The
greatest concentration of companies and looms is in the Paterson, Few Jersey,
section, which accounted for 19,500 of New Jersey's 25,000 looms in 1954. The
migration of looms from there to small Pennsylvania towns since 1929 placed the
latter state first, however, with respect to number of establishments and looms
in 1933 end 1934. Tables I and II give a distribution of establishments and
looms, o-y principal states. The six leading states shown in Table I comprised
94 per cent of the total number of establishments in 1929, 92 per cent in 1931,
and 93 -oer cent in 1933.
TABLE I
Number of Establishments in the Silk Industry as a
Whole, by Principal States
State Number of Establishments
1929 1931 1933
U. S. Total 1,431 1,211 1,087
Connecticut 38 37 36
Massachusetts 42 38 42
New Jersey 631 448 378
New York 157 129 107
Pennsylvania 497 430 397
Rhode Island 43 41 36
All Other States 83 88 91
Source: Census of Manufactures, "Silk and Rayon Manufactures". Data for es-
tablishments with an annual production of less than $5,000 in value
are not included.
TABLE II
Number of Looms Installed, by Principal States, 1934
State Number of Looms
Total 92,355 a/
(Continued on following page)
1/ Statement of Peter Van Horn, Chairman of the Silk Code Authority, at a
public hearing, "Tashington, 1,1 y ';1, 1935.
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TABLE II
(Cont
id)
New Jersey
25 , 000
Pennsylvania
37 , 713
Massachusetts
3 , 012
PJioc'.e Island
5,036
Connecticut
4,764
New York
8,544
Virginia
1,998
North Carolina
2,542
South Carolina
753
Georgia and Alabama
565
Tennessee
273
Other 2,155
Source: The National Federation of Textiles, Inc., Production and Distribu-
tion of Silk and Rayon Broad Goods (1935).
a/ The National Federation of Textiles estimated in the transcript of
the hearing for the Code in September, 1933, that there were 105,000
looms in operation or available; this number is at variance with the
above data.
Mills Operating in More than One State
Table III shows that there were at least 304 mills in 1930 which were
owned by companies operating in more than one state. Nearly two- thirds of
these mills, which were owned by a total of 79 comnanies, belonged to com-
panies operating mills in two states.
TABLE III
Number of Silk and Rayon Companies Having Mills in More
than One State, Classified by Number of States in
Which They Operate, 1930
Number of States in i/hich Number of Number of
Mills are located Companies Mills
Total 79 304
Two States 59 195
Three States 13 56
Four States 4 28
Five States 3 25
Source; NRA Research and planning Division, special report of May 2, 1935, by
Victor von Szeliski. Compiled from Davison's Textile Blue Book, 193C.
Capital Investment and Financial Condition
The total capital investment in the Industry is unknown. However, a
8647
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rough estimate would possibly place it at about $545,000,000 for the Silk. In-
dustry as a whole. 1/
The capital investment of a sample of 107 silk companies, as reported in
1934 to the Federal Trade Commission, is shown in Table IV. Table V shows the
financial condition of the same 107 companies. Additional evidence, though
fragmentary, of the- financial condition of the Silk Industry is presented in
Table VI, which compares the rate of return on capital stock equity in silk
and other textile industries. According to the Federal Trade Commission re-
raort from which this table is also taken, it is based upon a somewhat larger
sample of the Industry than are Tables IV and V.
TABLE IV
Capital Investment of 107 Silk Weaving and Throwing
Companies, 1933 and the First Six Months of 1934 a/
Six-Month Period
Total Investment b/
January to June, 1933
July to December, 1933
January to June, 1934
$63,576,875
63,491,623
63,196,362
Source: Federal Trade Commission, Textile Report Part IV, Silk and Rayon
Industry.
a/ The sample consists of 107 companies which constitute 15.7 per cent
of the total number of establishments, as reported by the Census for
1933. It includes 41 companies weaving silk and rayon on commission
and 66 comoanies throwing and weaving their own silk and rayon.
b/ Total investment is inclusive of good will.
TABLE V
Total Net Income Before Interest and Net Income Trans-
ferred to Surplus of 107 Silk Weaving and Throwing
Companies, 1933 and First Six Months of 1934 a/
Six-Month Period
Total Net Income
Before Interest
Net Income
Transferred
to Surplus
January to June , 1933
July to December, 1933
January to June , 1934
$284,881
1,640,592
D - 442,458
D - $548,866
873,707
D -1,030,51V
D - indicates deficit.
Source: Federal Trade Commission, Textile Report, Part IV, Silk and Rayon Ind.
a/ The sample consists of 107 companies which constitute 15.7 per cent of
the- total number of establishments, as reported by the Census for 193'
It includes 41 companies weaving silk and rayon on commission, and 66
cormanies throwing and weaving; their own silk and, rayon.
1/ Estimated by the NRA, Research and Planning Division from Federal Trade
Commission Report; the estimate was made on the basis of the ratio of
looms and spindles in the Trace Commission sample to the total in the In-
dustry.
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TABLE VI
Rate of Return on Capital Stock Equity in Specified
Divisions of the Textile Industries, 1933 and 1934
Division
fber of
Per Cent
; Return
Nun
F
irst
Second
F;
irst
July-
Companies
Half
Half
Half
Augus t
1933
1933
1934
1934
Spinning
Cotton
84
1.43
8.97
3.84
D- 3.67
Wool
33
7.50
13.55
2.81
D-11.25
Silk and Rayon
(Throwing)
11
7.10
D- 1.34
2.50
D- 4.03
Silk and Rayon
( Commission
Throwing)
43
2.84
D- 0.81
1.07
D- 2.56
Weaving
Cotton
44
1.05
8.54
0.59
D- 4.85
Wool
12
D-
6.01
29.79
D-
8.05
D-21.47
Sill: and Rayon
43
D-
3.16
14.48
D-
7.21
D-12.44
Silk and Rayon
(Commission)
41
D-
7.32
2.75
D-
4.62
7.60
Spinning and Weaving
Cotton
206
4.71
11.55
5.36
D- 2.08
Wool
79
0.73
16.25
0.36
D- 8.18
Sill: and Rayon
12
D-
3.19
3.97
jy.
5.20
D- 1.40
Silk and Rayon
( Commission)
5
0.06
1.53
D-
3.10
D- 2.19
Dye in;-; and Finishing
Cotton
4
6.81
15.16
3.87
D- 5.59
Cotton (Commission)
71
4.98
3.19
4.94
D-15.56
Wool
5
D~
0.80
17.85
D-
7.88
D- 3.13
Silk and Rayon
(Commission)
46
D-
5.37
D-11.80
D~
1.67
D-16.81
Average for Industries
Cotton
409
4.33
10.41
5.01
D- 3.64
Northern Mills
104
0.62
6.84
D~
0.02
D- 6.10
Southern Mills
230
6.48
13.82
8.07
D- 0.10
Dyeing and Finish-
ing
75
5.13
4.18
4.85
D-14.69
Wool
129
1.62
16.03
D-
0.04
D~ 8.70
Silk
201
D-
3.15
D- 2,ia
D-
2.76
D- 9.U6
Thre ad
19
12.81
12.24
:
13.33
5.51
Cordage
7
12.11
12.70
13.40
2.21
Total
765
3.93
10.45
4.21
D- 4.21
D
indicates deficit,
Source: Federal Trade Commissi -n, Textile Report, (1934 - 1935).
Figures compiled from InrtG I - IV.
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Fai lures
Bun and Bradstreet, Inc., l/ reported that 10 companies failed in the Silk
Textile Industry as defined "by the Code, in 193^» "°"at gave no statement as to
the amount of liabilities. The number, however, would appear to be underesti-
mated, particularly in view of the fact that so many small shops are constantly
entering and leaving the field 2/
Volume and Value of Production
It is interesting to note from Table VII that although the total volume of
production of "broad goods apparently declined only slightly from 1929 to 1933}
the value of the product dropped tremendously. For example, the yardage prod-
uction of "broad goods declined less than 7 Per cent, "but the value fell a"bout
62 percent. The volume of production in ribbons is not shown, "but the value,
is approximately 57 Per cent lower. One cause for this situation, aside from
the general depression and the drop in raw sill: prices, has "been the terrific
competition from rayon. (Cf. Chart I, Chapter III).
TABLE VII
Value and Volume of Production of Broad Goods, and Value
of Ribbons Produced
(in thousands)
Broad Goods a/ Ribbons
Year Value _ Volume Value Volume
(square yards)
1929 $UHs,30S 597, llU $25,008
1931 2Si,6i7 566, S6H 15,3SS
1933 ISk.^Gk 558.881 10,SU7
Source: Census of Manufactures, "Silk and Rayon Manufactures"; data for estab-
lishments with an annual production of less than $5,000 in value are
not included. It is possible that tie fabrics, hat bands, and labels
ma.y be included in the tabulations. However, the per cent represent-
ed b;r these items would probably be snail.
a/ Except velvets, plushes, upholsteries, tapestries, etc.
Estimated Total Productive Capacity
It is estimated that the potential yardage capacity of the Industry, for
a standard weight and length of cloth (such as can be produced at the rate of
2q- yards per loom hour), for 50 weeks a year (allowing 2 weeks for a normal
shut-down period for repairing equipment ant" vacations) , at Uo hours per week,
would be 525 million yards, and at SO hours per week, 1,050 million yards. 3/
It must be pointed out that this production estinate would vary greatly accord-
ing to the construction of the cloth. The peal: consumption year was 192S, when
U25 million yards of silk were sold.
l/ Current Analysis of Insolvency Trends, February 3S, 1935*
2/ National Federation of Textiles, Inc., Production of Silk ana Raynn Bioad Gocc
3/ As estimated in NBA, Research and Planning Division, preliminary report on
the Silk Textile Industry, by W. C. Henderson, April, 1935*
S6U7
■• m ■"■*' ■ .:•: - -■ ■-..,■ . ..■■■■'
-10-
Estimated Unused Productive Capacity
Table VIII is indicative of the unused capacity in the Industry. This
table shous that the hours of operation per loon omed (which ^ould appear to
take into consideration the idle looms) declined from an average of 4S.1 hours
per neek in 1929 to 32.2 hours in 1932. The average uas 36. 4 hours during the
first 10 months of 1934.
Over the ten-year period, 1923 to 1933, there was an average monthly ex-
cess of goods -oroduced over normal sales and stocks of about 23 million yards.
1/
TABLE VIII
Activity of Broad Looms Owned "by Stock-Carrying
Hills and Commission Weavers, 1929 - 193^
Month
January
February
March
April
May
June
Average Weekly Hours of Machine Operations,
Per Loom Otrned
1929 1930
46.0
47. s
1+8.1
4s. 1
Us. 5
48.4
50.7
52.6
53-3
42.2
37-9
1951
1932
45.1
46. 3
U5.0
U3.6 U3.6
36.6
36.3
42.7
35.3
2 0. 7
19.0
1933
43.0
3S-7
27.2
28.4
36.2
35r9
1934 a/
39-5
49.2
48.4
43! s
29.4
36.0
July
August
September
47.9
4S.9
4S.3
38.0
35.1
38.4
3br7
3S.1
43.5
dd,o
32.4
40.2
39,3
33.5
25.6
32,5
35.1
27.7
October
November
December
49.2
48.6
47.2
42.3
46:3
4r.i
44. 7
4o.3
42.9
40 ; 6
36.6
39*9
30.3
33-2
35.0
22.4
Average
48.1
44.2 41.6
32.;
33.9
Source: The National Federation of Textiles, Inc., Production and Distribu-
tion of Silk and Payon Broad Goods ( lr 3 n) . ^
a/ Average for first 10 months of 1934 -jar. 36.4 hours; series has since
"been discontinued.
Conroetition from Other Industries
The Silk Textile Industry feels the effect of direct competition from
cotton-mi1.! products made of silk, or rayon, or other synthetic fibres, end
garments made from the same fi"bres. Indirect competition comes from fabrics
of cotton or wool, or combinations thereof.
1/ Henderson report cited above, and statement of Prank Schweitzer represent-
ing the United Textile Workers at Code Hearing September 12, 1933.
8647
-11-
The keenest and perhaps the most destructive competition this Industry
has had, both before and during the period of Code operation, has resulted
from the weaving of rayon and silk in the Cotton Textile Industry which paid
lower wages and could consequently offer the market substantially the same
fabrics at more attractive prices..
Products Used by Other Industries
The Code for the Silk Textile Industry divided the Industry into several
divisions and stipulated standard terms of sale for each division. A good
portion of the output of each division is sold to other industries; the divi-
sions, together with the principal industries which use their products, are
indicated below.
1. The largest division is composed of the weavers and converters of
broad goods - plain and Jacquard. The stock-carrying mills in this
grout) sell to the cutting-up trade - that is, to dress and garment
manufacturers and furriers. They also sell, of course, to converters
and to the wholesale and retail trades. The commission weaving mills
sell only their services, and those for whom they weave - chiefly the
converters - must in turn dispose of the cloth approximately as the
stock-carrying mills do.
2. The special-fabrics group, which makes only fancy and novelty mater-
ials, disposes of its production to the same group of purchasers as
the ordinary broad-goods manufacturers.
3. The ribbon group, which weaves ribbon material usually 18 inches or
less in width, depends almost entirely upon garment manufacturers,
milliners, typewriting ribbon manufacturers, florists, and the like
for its business.
4. The woven-label group is practically entirely dependent upon other
industries for existence - underwear, garment, millinery, hat, cloth-
ing, dress, shoe, and numerous others.
5. The hat-bank group, naturally, sells its nroducts to the hat and
millinery industries.
6. Sewing threads are sold to the dress, cloak and suit trades, and
other industries; flosses are sold to machine and handknitting es-
tablishments.
7. The tie-fabrics group, as its name implies, sells its product to
the neckwear industry.
8. The spun-yarn group derives a good portion of its business from other
industries, such as hosiery, underwear, outerwear, and other knit
goods industries. The Code also specifies trade terms for a group
"Thrown silk, thrown rayon, and synthetic yarn dealers", which sells
materials to the same industries as tha- snun silk group.
8647
-12-
CHAPTER II
LABOR
Total Number of Employees
According to Census data the average number of wage earners employed
in the Silk Industry as a whole declined from 130,467 in 1929 to 109,225 in
1931, and rose in 1933 to 110,322. (See Ta"ble IX). The estimate for 1934
is 116,200 wage earners 1/ .
A monthly index of employment in 1933 and 1934 is shown in Table XII,
There appears to be a wide fluctuation in employment — the index ranging in
1933 from 84,5 in April, to 123 in August and in 1934 from 77 in September to
117 in February — but the seasonal pattern is not very definite for these
two years at least.
Number of Employees by States
Table IX shows the average number of wage earners in the Industry as a
whole, by principal states. It is interesting to note that the decline in
employment in the principal manufacturing states - Pennsylvania, New Jersey
and New York - has been rather severe, whereas there have been slight in-
creases in Massachusetts and Rhode Island, and approximately a 45 per cent
increase in "All Other States," which are principally in the south. This
movement may be attributed to several causes, among which are the attempts
of manufacturers in the former states to seek lower wage levels and to es-
cape labor-union activity.
Evidence of this shift may be summarized as follows: the six leading
states comprised 91 per cent of the total number of wage earners in 1929, 87
per cent in 1931, and 84 per cent in 1933,
Total Annual Wages
The total annual wages paid by the Industry as a whole declined from
$137,547,146 in 1929 to $97,409,000 in 1931 and to $74,098,215 in 1933 (See
Table X) . It is estimated that in 1934 wage payments rose to $05,384,000. 2/
Annual Wages by States
Annual wage payments in the principal silk-manufacturing states are shown
in Table X, It is significant that total wages in "All Other States," which
are principally in the south, were little higher in 1933 than in 1929, al-
though the number of wage earners in these states had increased from 40 to
45 per cent,
1/ Estimate for 1934 is based up^n Bureau of Labor Statistics index of factory
employment of "Silk and Rayon Goods" adjusted to 1933 Census totals by NRA,
Research and Planning Division.
2/ Estimate for 1934 is based upen Bureau of Labor Statistics index of factory
payrolls for "Silk and Rayon Goods," adjusted to 1933 Census totals by NRA,
Research and Planning Division.
8647
-13-
The proportion of the total wages paid in the six leading states has
declined from 93 per cent in 1929 to 89 per cent in 1931 and 06 per cent in
1933.
Percentage Labor Cost is of Total Value
The percentage which labor cost is of total value of products in the
Silk Industry increased from about 19 per cent in 1929 to 25.5 per cent in
1933, This increase in relative proportion which labor forms of the total
value, is due in large part to the decline in raw material costs (cf. Table
XVI).
TABLE IX
Average Number of Wage Earners in the Silk Industry as
a Whole, by Principal States
Number of Wage Earners a/
10,501
9,662
8,527
7,390
6,939
9,270
21,419
13,626
10,705
10,261
7,290
6,114
61,544
49,938
49,215
7,589
7,060
9,187
State 1929 1931 1933
TJ. S. Total 130,467 109,225 110,322
Connecticut
Massachusetts
New Jersey
New York
Pennsylvania
Rhode Island
All Other States 12,063 14,710 17,295
Source: Census of Manufactures, "Silk and Rayon Manufactures." Data for
establishments with an annual production of less than $5,000 are
not included.
a/ Employees include skilled and unskilled workers on payrolls during
week including the 15th of each month. Averages for 1929 and 1931
cover 12 months; for 1933 iha averages cover March, June, September,
and December.
S647
-lH-
TABLE X
Annual Wages in the Silk Industry as a Whole, by Prin-
cipal States (In thousands)
■ .
Total
Annual Wa^es
State
1929
1931
1933
U. S. Total
$137,547
$97,409
074,
,098
Connecticut
12.046
10,208
7,
,049
Massachusetts
7.105
5,810
*>i
,515
New Jersey
28 , 100
15,009
8,
,522
New York
11,621
7,419
4
,548
Pennsylvania
59,013
40,815
30,
,259
Rhode Island
8,558
6,952
6,
,629
All Other Stai
;es
10,304
11,197
10,
,576
Source: Census
of
J'anuf actur
es, "Silk and Rayon Manuf
actures."
Data for
establishments with an annual production of less than $5,000 are
not included.
Average Hourly and Weekly Wapes, and Hours Worked
The changes in average hourly earnings in the Industry as a whole since
1929 are summarized in Table XI. It appears from this that average hourly
earnings in 1934 were higher than in 1929 - 44.9 cents as compared with 42. S
cents. However, during the same period the hours worked per *.7eek were re-
duced from 48 to 33, with the result that average weekly earnings which were
$21.16 in 1929 dropped to $14.85 in 1934.
TABLE XI
Average Hourly and Weekly Wages and Average Hours Worked
Per Week in the Silk Industry as a Whole
Year
Average
Hourly
Wage a/
Average
Weekly
Wage b/
Average Hourj
Worked
Per Week a/
1929
1931
1933
1934
$
.426
.409
.353
.449
$21.16
17.88
13,14
14.85
40.0
44.2
37.6
33.0
Source: As indicated in footnotes.
a/ 1929 and 1931 data are from National Industrial Conference Board,
Service Letters, with adjustment downward so as to he comparable
with Bureau of Labor Statistics series. 1933 and 1934 data from
Bureau of Labor Statistics, Trend of Employment.
b/ Bureau of Labor Statistics, Trend of Employment.
8647
-15*
Effect of the Code on Wages and Hours
The monthly variations in working time and earnings in the Industry as
defined "by the Code, for the years 1933 and 1934, are shown in Table XII.
The figures are unpublished data obtained by the Bureau of Labor Statistics
from a representative sample, the size of which is indicated in the foot-
notes of the table. These data differ slightly from those shown in Table
XI, due, presumably, to the fact that the samples are not identical, but the
discrepancies are slight. The effect of the NBA on hours and wages is
evident from Table XII, which shows that from August, 1933 on, hours of work
were reduced and hourly earnings were increased.
Similar information by states for 1931 and 1934 is shown in Table XIII.
The figures in this table are from two different sources (see footnotes) and
are probably not strictly comparable. 1/ Nevertheless, they are indicative
of the effect of the Code in different sections of the country. The Southern
States, for instance, had a longer working week in 1931, but, with the ex-
ception of North Carolina, had much lower weekly earnings than the Northern
States because of the low wage rates in the south. In February, 1934, how-
ever, the working week in the Southern States was about the same as in the
Northern States. Weekly wages in the south were still lower than in the north,
but the disparity was much narrower than in 1931 because wage rates had been
raised.
1/ The earnings and hours, in February, 1934, as shown in Table XIII, are
higher than those shown for February in Table XII. Even though the figures
in Table XIII may have an upward bias, they no doubt reflect geographic
differences with sufficient accuracy to be useful.
8647
-16-
TAELE XII
Employment, Payrolls, Hours and Wages in the Industry
as Defined "by the Code, 1933 - 1934 a/
Month b/ Indexes, 1933 = 100
1933 Employ- Pay- Man-
ment c/ rolls c/ hours d/
Average
Hours
Worked
Per Week
Wages
Average
Hourly ej
Average
Weekly c/
Jan.
Peh.
Mar.
Apr.
May
June
July
Aug.
Sept,
Oct.
Nov.
Dec,
Average
1934
Jan.
Peh.
Mar.
Apr.
May
June
Ju.ly
Aug.
Sept.
Oct.
Nov.
Dec.
Average
96.2
94.3
85.4
84.5
93.2
97.6
108.6
123.2
115.8
94.8
102.9
103.6
100.0
100.7
117.3
117.5
111.3
102.8
108.6
105.7
101.5
77.0
100.8
102.9
105.0
104.9
87.7
87.4
73.8
72.4
85.7
89.0
107.4
138.9
118.2
108.4
116.9
114.1
102.6
102.4
86.8
84.6
94.5
101.0
116.1
123.6
105.2
91.6
97.0
93,3
100.0 100.0
115.2
140.0
140.8
132,9
113.4
123.5
115.3
116.2
77.2
120.9
120.4
126.4
120.2
94.4
113.1
111.4
103,7
91.2
100.1
92.4
92.7
59.6
95.1
96.0
99.8
95.8
40.4
41.1
38.5
37.9
38.4
39.5
40.7
38.0
34.4
36.6
35.7
34.1
37,9
32.9
36.5
35.9
35.3
33.6
34.9
33.1
34.6
29.3
35.7
35.3
36.0
34t4
31.5^
30.9
32.0
33.0
32.1
31.0
32.9
41.2
42.2
44.1
44.0
44.0
36.6
44.1
44.4
44.8
45.8
44.8
44.8
44.8
44.0
47.1
45.8
45.7
45.3
45.)
$12.75
12.95
12.07
11.97
12.80
12.69
13.05
15.02
14.30
16.02
15.75
15.10
13,84
14.61
16.34
16.44
16.40
15.18
15.63
14.98
15.69
13.65
16.33
15,96
16.41
15,64
Source:
a/
V
at
8647
Unpublished data secured hy the Bureau of Labor Stati.-.tics in coopera-
tion with the Division of Research and Planning, NBA,
Haporting establishments considered to be almost completely covered
by the Silk Textile Code.
Pigures reported were for the payroll period nearest the 15th of the
month.
Based upon a representative s-mple covering an average of 108 estab-
lishments and more than 19,000 employees in 1933. The sample was
somewhat larger in 1934.
Computed: Index of employment times average hours worked per week re-
duced to 1933 = 100,
Based upon a representative sample covering an average of 58 estab-
lishments and nearly 12,800 employees in 1933, The sample was much
larger in 1934,
-17-
TABLE XIII
Average Hours and Earnings "by States in the Industry as a Whole,
1931 and 1934
Averages in 1931 a/
State
Hours
Worked
Per Week
Earnings
Per Hour
Actual
Earnings
Per Week
Averages in February, 1934.
Hours Earnings Per Week
Worked On 40- Esti-
Per Hour mated
Week b/ Basis b/ Actual c/
Connecticut 47.8
Massachusetts 42.7
New Jersey 42.4
New York 45.8
Pennsylvania 45.4
Rhode Island 45.0
Maryland 46.3
North Carolina 49.9
South Carolina
Alabama &
Georgia 50.4
Tennessee 49,9
Virginia 48.0
Total 45.5
5.459
.367
.500
.400
.392
.495
• 253
.382
.268
.196
.292
.406
$23.04
17.95
23.60
19.88
20.07
24.75
13.03
21.09
14.85
11.05
15.77
20.58
38.2
36.1
37.9
38.9
37. S
39.7
35.1
39.5
39.2
38.3
37.9
>20.15
20.45
20.92
17.75
18.43
18.73
17.03
15.53
15.01
15.79
19.03
$19.24
18.45
19.82
17.26
17.32
18.59
14.94
15.34
14.71
15.12
18.03
Source: As indicated in footnotes.
a/ Bureau of Labor Statistics, Wages and Hours of Labor in the Manu-
facture of Silk and Ravon Goods. 1931 (Bulletin No. 568). Figures
were collected for a representative week in the period of March,
April, May and June.
b/ National Federation of Textiles, Inc., Production and Distribution
of Silk and Ravon Broad Goods (1935), p. 29.
c/ Estimated by multiplying the average weekly wages on a 40-hour
basis by the ratio of the average hours worked per week to 40 hours,
Tables XIV and XV furnish a comparison of hourly earnings of male and
female employees in the leading manufacturing centers of the Silk and Rayon
Goods Industry in August, 1933, and August, 1934. Tha number of workers in
all sections receiving less than 30 cen'js an hour was greatly diminished in
1934, In the south the greatest concentration of workers in 1934 was in the
wage classification 30- to 32.5 cents, but in the other sections larger pro-
portions of the workors were grouped in the higher wage brackets.
Number of Weeks Workfid
No information is readily available on the number of. weeks worked. per1
year in the Silk Industry.
8647
-IS-
Child Labor
For the Silk Industry as a whole the Census of Occupations in 1930
listed 3,596 children under 16 years of age. It should be noted that this
figure refers not to the number actually employed but rather to the number
reporting themselves as belonging, by occupation, to this Industry. Al-
though it is undoubtedly true that child labor still exists to some extent,
it seems reasonable to believe that it has been greatly reduced.
TABLE XIV
Hourly Earnings in the Silk and Rayon Industry, by Sex and Region,
August 1933
Number of
Employees
Hourly
Earnings
South a/
Middle
Atlantic b/
Paterson
S/
New
England d/
Male Female Male
Female
Male
Female
Male
Female
Less than
$.225
100
141
333
336
28
40
51
107
$•225 "• $,
.275
46
35
132
269
25
33
46
81
.275 - ,
.300
31
34
59
65
6
7
21
44
.300 - ;
.325
.239
296
128
131
18
20
35
52
.325 - ,
.350
98
143
891
3424
78
466
417
1108
.350 - ,
,400
184
216
602
1338
113
158
438
936
.400 - ,
.450
232
127
883
522
115
96
339
585
.450 - ,
.500
187
70
501
225
188
60
345
515
.500 - ,
.600
214
48
766
230
199
76
545
528
.600 - ,
,700
137
9
469
100
95
23
365
179
.700 and
over
44
1
364
31
165
7
413
76
Total Number
of Employees
in Sample
1512
1170
5128
6671
1030
936
3015
4211
Source:
Bureau of Labor Statistics, Textile Report, Part II, "Wage Rates
and Weekly Earnings in the Silk and Rayon Goods Industry from April
1933 to August 1934," p. 28.
The largest figure in each column is underscored.
a/
22/
Si
Alabama, North Carolina- Virginia.
Pennsylvania, Upstate New York, Philipsburgh and Burlington, N.
Paterson, N. J., and environs.
New York City and New England.
J.
-19-
TABLE XV
Hourly Earnings in the Silk and Rayon Industry, "by Sex and Region,
August 1934
y
11
umber of
Employ
ses
Hourly
Earnings
South a/ M
iddle
Atlantic
5/
Pater son c/
Hew England d/
Male
Female
Male
Female
Male Female
Male
Female
Less than
$.
225
6
2
32
20
2
8
4
3
$.225 -
$.275
21
25
147
86
13
21
22
23
.275 -
.300
37
7
30
26
5
5
5
11
.300 -
.325
299
599
41
58
16
20
17
20
.325 -
.350
65
132
1084
4385
70
267
391
891
.350 -
.400
226
169
848
2236
91
272
519
995
.400 -
.450
224
149
1055
1088
134
114
459
660
.450 -
.500
198
67
1071
645
173
88
429
444
.500 -
.600
247
101
1143
534
233
122
622
481
.600 -
.700
162
29
800
238
124
34
601
241
/ .700 and over
66
5
907
88
221
19
S77
94
Total Number
of Employees
in Sampl
.e
1551
1285
7158
9404
1082
970
3646
3863
Source: Bureau of Labor Statistics, Textile Report, Part II, "Wage Rates and
Weekly Earnings in the Silk and Rayon Goods Industry from April 1933
to August 1934", p. 28.
The largest figure in each column is underscored.
a/ Alabama, North Carolina, Virginia.
b/ Pennsylvania, Upstate Ne\7 York, Philipsburgh and Burlington, H. J.
c/ Paterson, N. J. and environs.
d/ Hew York City and New England.
8647
-20-
CHAPTER III
MATERIALS - RAT/ A1ID SEMI -PROCESSED
Total Cost of Raw Materials
The amounts spent for raw materials by the Silk Industry as a whole have
declined from $412,181,260 in 1929 to $212,846,607 in 1931, and to $143,611,-
431 in 1933. l/ The sharp decline in raw silk prices and the increasing
amounts of rayon used, which are indicated in Charts I and II, 2_/ account for
a large part of decrease in raw material costs.
Per Cent Cost of Materials is of Total Value
The proportion which raw materials costs represents of the total value
of products in the Industry as a whole is shown in Table XVI to have declined
from 56.4 per cent in 1929 to 49.4 per cent in 1933. l/
TABLE XVI
Percentage Labor and Raw Material Costs Are of Total
Value in the Silk Industry as a Whole
Total Value Total Factory Total Materials
Year of payroll Cost a/
Products Amount Per Cent Amount Per Cent
of Total of Total
1929 $731,200,231 $137,547,146 18.8 $412,181,260 56.4
1931 422,771,960 97,409,008 23.0 212,846,607 50.3
1933 290,577,662 74,098,215 25.5 143,611,431 49.4
Source: Census of Manufactures, "Silk and Rayon Manufactures". Data for
establishments with an annual production of less than $5,000 are
not included.
a/ Total cost of materials includes fuel and purchased electrical
energy which amounted to 2.1 per cent of the total in 1927 and
1929.
1_/ These figures include expenditures for fuel and purchased electrical
energy which amounted to 2.1 per cent of the total in 1927 and 1929.
2/ Chart II depicts total textile fibre consumption and is not limited
to consumption by the Silk Textile Industry.
8647
UbU
OOSI
Sc«c
1
, 8
S
o
o
8 S $
2 o o
O CN «p
o o a
ft. vB ">
o
n i itoqaV nv n Av~a m-us "aoi 3T-os I
1 1 1 1 1 1 1
# jq § ^cs-.Qo'08 o 8 !S
Noiio nos aiv.s
O
<
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Principal ' later i?.ls Used
The principal materials user in the Silk Textile Industry as a whole are
shown in Table XVII. Silk, of course, is by far the most important material,
but increasing quantities of rayon are being used. Silk mills increased their
rayon consumption from 1,900,000 pounds in I91U to 40,700,000 pounds in 1931,
and to 60,000,000 pounds in 193!+« The consumption, of raw, thrown, and spun
silk has increased from 29,500,000 pounds in 1914 to 64, 200,000 pounds in 1929.
Consumption has since declined to 5?, 700,000 pounds in 1931, and to an estimat-
ed 45, 500,000 pounds in 193^« *n addition to silk and rayon, the Industry uses
small quantities of cotton yarn and other fibres.
TAEL2 XVII
Quantity and. Cost of Principal Materials Consumed by
the Silk Industry as a 'Jhole, 1929 and 1931
Kind of Material 1Q29 1931
Quantity Cost Quantity Cost
(Founds) (Pounds)
Silk ~~
Raw 54, 1+73,331 $267,027,248 ' 47,436,042 $116,091,275
Organizine 1,666,070 10,07^,253 902,430 3,065,417
Tram 7^5,865 2,97S,3lU 369, 3°6 1,135,353
Hard and Crepe
twist 6,180,199 35,410,495 .3,707,593 26,232,^97
3-o,:i 1,152,224 3,912,537 1.2.96,^57 3,365,145
piorcec Cocoons,
etc. 2,227,122 7,622,627 . 3,7.1S,'57l* 1,459, 5hd
Rayon Yarns 32,551,60* 44,937,707 •. 40,742,062 36,732,072
Cotton Yarns 13,26Q,609 2,121,631 12,233,932 1^813,349
Other Yarns 2,217, 004 3,659,629 . 2,452,790 3,236,792
s
Total, above
items 121,129,029 $383,768,528 117 = 915. 192 $196,757,542
Source: Census of Manufactures. "Silk and Rayon Manufactureis" .
Data, for establishments with sn annual production of less than $5,000
are excluded.
Expenditures for Principal Raw Materials
The Industry's expenditures for various raw materials cannot be shown in
detail. The amount spent for raw silk, which is the principal raw material 0.
the Industry, declined from $267,000,000 in 1929 to $116,000,000 in 1951 for
the Industry as a. whole. Although the quantity of rayon yarns consumed has i:
creased, the expenditures for r; yon nave decreased from $44,900,000 in 19'- 9
to $36,700,000 in 1931. Comparable data am not available for later years.
(See Table XVII>.
2647
Source of Bay.' Materials
A"bout SO per cent of the raw silk usee, in this country in 1933 was import-
ed from Japan. Host of the remainder came from China and Italy, l/ Practically
all of the' rayon used is produced domestically — in Pennsylvania, New York,
Virginia, T7est Virginia, and Ohio.
Machinery and Equipment
No data are available on recent expenditures made hy the Industry for
machinery and equipment. It is the author's opinion, however, that such out-
lays must have "been relatively small.
According to Census data, the leading machinery and equipment manufactur-
ers are located in New York, Pennsylvania, Rhode Island, New Hampshire, and
Illinois. A very small amount of equipment is imported from England and Ger-
many.
1/ Bureau of Foreign and Domestic Commerce, Porcim Commerce and Navigation
of the United States. 1931.
S6U7
-25-
CHATTSR IV
PRODUCTION AND DISTRIBUTION
Value of Production in Principal States
Table XVIII shows the value of goods produced in the Industry as a
whole, "by leading states. In 193.3 Pennsylvania produced silk and rayon
goods valued at almost $110,0^0.000, and Nov; Jersey, which was second in
importance, $31,555,000. The percentage decline in value of products be-
tween 1929 and 1935 has varied widely among the leading states. In Pennsyl-
vania the decrease was about 66 per cent; in New York, 73 per cent; in New
Jersey, 75 per cent; but in Rhode Island the decrease was only about 30 per
cent.
The six states shown in Table XVIII produced 91 per cent of the total
value of products in 1929, 83 per cent in 1931, and 82 per cent in 1933.
TABLE XVIII
Value of Products in the Silk Industry as a Whole, by Principal States
(in thousands)
State
1929
1931
1933
U. S. Total
Connecticut
Massachusetts
New Jersey
New York
Pennsylvania
Rhode Island
All Other States
$731,200
54,298
37,413
126,308
90,238
320,956
35,658
66,355
^422,772
56,756
22,920
58,050
49,457
167,520
26,475
71 , 654
$290,578
25,245
25,937
51 \ 555
25,966
109,925
24,965
55,009
Source: Census of Manufactures. "Silk and Rayon Manufactures". Data
for establishments with an annual Production of less than
$5,000 are not included.
Shift in Centers of Production
There have been some changes in the relative importance of the various
centers of production, although the Paterson, New Jersey, area and the Pennsyl-
vania sections still maintain the lead. However, in the last decade several
of the Southern states — North Carolina particularly — have grown in
prominence as producing areas, although practically all of the dyeing and
finishing is still done in New Jersey and the adjacent New York Sectiono
(cf. Chapter II, section entitled ""lumber of Smplo?/ees by States").
8647
-26-
Exports
The amount of silk goods and silk yarn exported from the United
States has never been very large, out exports in 1933 and 1934 were small-
er than at any time for at least the past 15 years. As shown in Table XIX,
both the volume and value of practically all types of silk products ex-
ported decreased "between 1929 and 1934. However, the exportation of tram
(silk yarn) increased slightly in volume, although the value greatly de-
creased. Both the volume and value of exports of rayon products have
increased since 1929.
8647
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S6U7
-PS-
Table XX shows the principal countries to which silk fabrics are
exported* The only country which showed an increase in the amount import-
ed from the United States between 1930 and 1934 was the Philippines.
TABLE XX
Volume and Value of Exports of Broad Goods Made TTholly or Chiefly of
Silk, by Country of Destination, in 1930, 1931, 1933, and 1934
(in thousands)
Country
IS
130
193]
1
.933
1934
a/
Quantity Value
Quant i t
y Value
Quantity
■ Value
Quantity Value
(yards)
(yards)
(yards)
(yards)
Canada
1,448
$1,709
1,534
$1,
583
229
$ 202
260
$196
Cuba
697
667
343
259
153
61
134
64
Australia
186
267
100
110
84
47
177
119
Philippines
111
117
194
128
768
324
421
208
Mexico
50
90
25
42
18
25
5
7
United
Kingdom
76
139
76
78
56
50
50
44
Dominican
Republic
25
23
25
18
16
11
10
6
Colunbia
23
22
46
21
8
9
9
10
Argentina
51
79
31
43
5
9
5
2
Hawai i
270
148
186
111
Puerto Rico
194
65
161
66
Other
Countries
221
308
170
154
119
72
78
51
Total
2,887
$3,423
2,594
$2;
,365
1,980
$1,023
1,493
ijjOOO
Source: Nat
■ ional Federation
of Text
iles, Inc
. , Production and Distribution
of
Silk and
Rayon B
road Goo
ds
(1935
), p. 41,
1
a/
Nine months only.
Advertising
Various advertising media are used, but there are no available data as
to the amount of expenditures. A few of the leading producers who advertise
and sell under their own brands are Cheney Brothers, Stehli Silk Corporation,
Julius Kayser and Company, Belting-Heminway-Corticelli, Inc., and Van Raalte
Company, Inc. Not many others sell trade-marked goods.
Comparison of Production and Retail Sales by States
A comparison of the value of production of silk and rayon broad goods
with the retail distribution of these products for specified states is given
in Table XXI. The value of products represents the total value of silk and
rayon broad goods (exclusive of velvets, plushes, and upholsteries) produced
in establishments classified in the Census of Manufactures under "Silk and
8647
-29-
Rayon Manufactures". The estimated value of retail soles for each of the
states shown consists only of sales made in the three types of stores —
department, dry-goods, and general merchandise — hut the hulk of silk and
rayon goods is sold in such stores, (See footnote d/ of Tahle XXI). Be-
cause the sales figures cover velvets, etc., while the production figures
do not, and because the Census data on retail sales are for various reasons
not completely satisfactory for deriving commodity sales, the comparison
is necessarily rough.
The limitations of the data require that conclusions drawn from
them he guarded. It is evident, he 'ever, that the manufacture of silk hroad
goods is concentrated in a few st? tes in the Eastern part of the country,
hut that retail sales are net concentrated to anything like the same e;:tent.
For example, in 19£9 Pennsylvania produced about 48 per cent of the total
output, but consumed something in the neighborhood of only about 8 per cent.
Similarly Her Jersey produced abort 19 per cert of the total, but used only
about 2 per cent. At the other end of the scrle are found states like
Missouri, Washington, Kansas, Iowa, Louisiana, and many others that are not
shown, where consumption amounts to one or more per cent, all of which has
to be brought in from outside the state, since there is no production with-
in these states.
8647
-30-
TABLE XXI
Value of Production and Estimated Retail Sales of Silk and Rayon
Broad Goods, by States, 1929
State
Total Production a/ Estimated Total Retail Sales b/
Value of
Production Per Cent
(Thousands) of Total
Number of Value of
Establish- Sales cj Per Cent
ments (Thousands) of Total
U. S. Total
$483,208
ICO
41,702
$236,634
300
Connecticut
18,577
1
631
1,828
1
Massachusetts
22 , 943
4
1,394
8,960
4
New Jersey
92, 132
19
2,053
5,537
2
New York
45,337
9
4,956
29,960
13
Pennsylvania
231,375
43
3,117
17,717
8
Rhode Island
23,341
5
294
978
Washington
562
3,317
1
Kansas
616
2,580
1
Iowa
633
2,952
1
Missouri
1,389
6,906
3
Louisiana
605
3,358
1
Other States
53,203
11
25,397
152,541
65
Source:
a/
6/
2/
Census of Manufactures, 1929; and Census of Retail Distribution,
1929.
Silk and Rayon broad goods exclusive of velvets, plushes, etc.
Data for establishments v,ith an annual production of less than
$5,000 are not included.
As reported bv three kinds of retail establishments:
(1) Department stores with and without food
departments.
(2) Dry goods stores (dry goods and piece goods) and
(3) General merchandise stores (with and without
food departments).
Value of sales has been estimated by multiplying the total
net sales of department, dry goods, and general merchandise
stores by the per cent which sales of rayon and silk and
velvet piece goods were of total sales of all stores in
these categories.
8647
CHAPTER V
TRADE PRACTICES
Unfair Trade Practices prevalent Before Code 1/
The Sill: Textile Industry, like most of the other textile industries,
was plagued by unfair trade practices "before the Codes were adopted.
Possibly the nost widespread unfair practice has been the exploitation
of commission weavers by the converters. Many of the commission weavers
operate on a very small scale with from 10 to 50 looms. As a group they
have practically no "business training nor knowledge of costs, and they are
not responsible enough financially oven to "be able to purchase raw materials.
In addition, their looms in virtually all instances are anticipated. The
converters advance enough money to the commission weavers to meet the small
payroll, and in return for these advances they receive silk yardage from the
commission weaver at very low cost. It frequently happened that the small
weaver soon found himself unable to pay for such items as his rent and the
carrying charges on his machinery, and was forced to accept foreclosure. The
holder of the machinery lien, who was usually the converter, would then either
set the weaver up in business again or move the machinery to another small
operator. This cycle might be repeated time after time and the effects
were far reaching. In addition to the effects of this method of operation
on the commission, weaver and his employees, it enabled the converter to
offer low-priced goods which demoralized the markets in which the more
responsible and the more efficient operators had to compete. Although the
quantities offered may not have been large, they were sufficient to establish
price levels which could be considered unfair to the stock-carrying mills.
Excessive weighting of silk materials, for the purpose of giving body to
a sleazy fabric, was -practiced by some manufacturers. Such weighting, which
greatly reduces the durability of the cloth, is believed to be much less
widespread than formerly.
Design piracy, or the stealing of patterns and styles, has long been a
problem for which no adequate and effective remedies have as yet been found.
There are two schools of thought in regard to the use of designs: one school
demands strict governmental protection similar to the patent laws; the other
favors liberal and unrestricted use of all created designs.
1/ It must be noted that the statements made in this section, unless other-
wise noted, are generalities based only on the author's knowledge of the
Industry and not on any factual material that can now be presented.
8647
As already indicated, the above discussion of trade practices was drama
from the author's knowledge of the Industry. The "balance of this chapter is
based on material prepared by tfce national Federation of Textiles, Inc.
According to the iteration, unfair trade practices prevalent in the
Silk Textile IndusW prior to the Code were:
1. Exc-^sive terns given under pressure from buyers.
2. returns made for other than reasons of unsatisfactory
merchandise.
3. Excessive claims for damaged merchandise including the
making of claims by dress manufacturers against several
manufacturers in one lot of dresses - the fabric not
being identifiable after having been put into the dresses.
4. Lack of definite understanding between buyer and seller as
to conditions of sales, due to lack of contracts or other
order confirmations.
5. Secret rebates.
6. Commercial bribery in the form of gifts to buyers or buyer's
representatives.
7. Allowances for advertising which constituted in most cases
nothing more than allowances on the price.
3. Selling below cost.
The extensive use made of these practices so broke down the price
structure that it was almost impossible for manufacturers to compete on the
basis of the actual value of the merchandise. In other words, purchases and
sales became a matter of barter on price concessions without much relation
to the quality or cost of producing the merchandise. The seller had to try
to keep in mind at the time of the sale how many ways the buyer could bring
pressure on him on subsequent allowances through claims, returns, advertis-
ing allowances, extra datings, cash rebates, and the like.
Methods of Unfair Competition Now Prevalent
According to the national Federation of Textiles, Inc., selling below
cost is still considered prevalent and there is still complaint about return-
ing merchandise after too long an interval, but the abuses which resulted
from secret rebates, advertising allowances, trading down on terms, etc., are
thought to have more or less disappeared.
Effect of Prices of Individual Members on the national Price Structure
In the opinion of the National Federation of Textiles, Inc., the fact
that so much buying and selling in the Silk Industry is done within the Hew
York City area — either through representatives of out-of-town firms or by
dress manufacturers whose plants are in New York — means that any action
taken hj an individual member of the Industry with respect to trices quickly
spreads throughout the Industry. The condition is aggravated by the over-
supply of merchandise, which constantly exists, and the fact that most of the
merchandise is not sold under the manufacturer's name or trade-mark, but simply
goes into the general pool of fabrics supplied by the several hundred manu-
facturers in the Industry.
8647
CHAPTER VI
GENERAL INFOaiATION 1/
Manufacturer s ' Qrgani zatioiis
national Federation of Textiles, Inc. - Silk manufacturers realized the
need of cooperative handling of their problems at an early date, and con-
sequently organized the Silk Association of America in June, 1872. This
organization was one of the earliest trade associations in this country
and included in its membership all of the early manufacturers and dis-
tributors of silk fabrics, as well as the importers of raw materials.
The organization has a long, uninterrupted history. In 1934, because of
the increasing importance of rayon in the making of finer dress fabrics,
the name of the Association was changed to the National Federation of
Textiles, Inc. Through this organization the Silk Industry handles such
problems as: competition of foreign fabrics which are manufactured at
much lower wage levels; encouragement of production of increased quantities
and better qualities of raw silk; development of high-speed machinery to
bring greater variety of fabrics to American consumers at prices not pos-
sible in the costly imported lines; settlement of disputes by arbitration
instead of by relying on the more expensive and often unsatisfactory
method of settlement by jury trial in the public courts; establishment of
standard forms of contract to minimize misunderstanding between buyers and
sellers and to make available to all trade customs that have developed
through years of experience; standardization not only of trade customs and
methods of manufacture, but also methods of merchandising, including grad-
ing and testing of raw silk; prevention of misrepresentation of silk goods
through cooperation with the Federal Trade Commission; and extensive tech-
nical and scientific research on matters affecting the Industry.
Broad Silk Manufacturers of Paterson, N. J. - This is a local organiza-
tion of small manufacturers in Paterson who operate what are known as "family
shops", in which the owner runs his own looms with the aid of his family and
possibly a few outsiders. The group is composed almost entirely of commission
weavers who simply perform the service of weaving for a converter who supplies
the raw material and sells the fabric.
Master Weavers Institute. - This organization, which is also confined
to paterson, consists of owners of Jacquard looms. It was formed primarily
for the purpose of putting through a special labor agreement, the details of
which are not known to the author. The employees of this group are skilled
and therefore receive relatively high wages.
Blackstone Valley Manufacturers Association, providence, R. I. - This is
an organization of manufacturers in the Rhode Island territory who, with few
exceptions, are of about the same class as the commission weavers forming
the Broad Silk Manufacturers Association of Paterson.
Silk Manufacturers of Allertowr, Pa. - The silk manufacturers in the
Allentown section, many of wnom came originally from Paterson, are not very
formally organized but do hold occasional meetings.
1/ The information in this chapter is, with minor editorial changes, as
prepared by the National Federation of Textiles, Inc.
8647
Relationship Between Labor and Management
Dae to the comparatively small size of the individual enterprises in
the Silk Industry, the relationship "between labor and management has "been
relatively close. The only difficulties of any consequence have "been
centered around Paterson, Hew Jersey. A very serious strike occurred in
1913, and strike activities in other years — together with the higher
wage level there — have caused a number of manufacturers to move their
mills to smaller communities where the workers were not organized.
In 1918 an Industry-wide movement for trie inauguration of the 48-hour
week was attempted through the United Textile Workers of America. It was
found, however, that silk workers were not "anxious" to join the movement
and that except in the Allentown, Pennsylvania, and paterson, New Jersey,
centers there was little or no difficulty in adjusting the hours.
No significant labor difficulties occurred from 1918 until subsequent
to the adoption of the NBA Code. In the intervening years wages were in
general comparatively high until the depression. When the wage market
broke the workers most seriously affected were those in the "family shops"
and in other shops operated without proper regard to costs. The principal
t method of reducing costs was cutting wages, and wages in such shops were
reduced to "unheard of" levels, despite the fact that the average in the
well-established mills remained high.
It was to be expected that the Code — particularly the 7 (a) clause —
would encourage workers to strike for better wages. The Code provided for
a minimum wage for all workers, with a clause regarding differentials which
was not specific with respect to the various crafts. In August, 1933, a
general strike was called in protest of the proposed Code; it lasted about
twelve weeks. The center of the strike was in the Paterson, New Jersey,
area. The strike was considered unsuccessful to the extent that the Code
minimum wage was not changed and the compromise agreement effected by the
National Industrial Labor Board was not carried out.
List of Exoei-ts
Peter Van Horn, Chairman,
The National Federation of
Textiles, Inc. ,
10 East MOth Street,
New York City.
Nathan Lewis,
Nairn & Peldman, Inc. ,
40 E. 29th Street,
New York City.
K. E. Blake,
Cheney Brothers,
1S1 l.Iadison Avenue,
New York City.
Alexander P. Ix,
Frank Ix & Sons., Inc.
1410 Broadway,
New York City.
Edward H. Schniewind,
Susquehanna Silk Hills,
lH9 lladison Avenue,
New York City.
Paul C. Debrj'-,
Duplan Silk Corp.
1H5O Broadway,
New York City.
8647
•35"
Raymond C. Kramer,
The Bel&ing**£ieminT7ay
Corticelli Co.,
119 17. Uoth Street,
Ne'7 York City.
Henry Z. Stehli,
Stelili Silks Corp,
1372 Broadway,
lie- York City.
John R. LicG-inley,
Phillip sTmrg Silk Co.,
FhillipsTrurg, l"en Jersey
ilotjusulce Egawa,
'..orimuira, Arai & Co. , Inc.,
2 Pari: Avenue,
He- York City.
R. K. Laros,
R. K. Leros Sill: Co.,
Bethlehem, Pennsylvania.
S6U7#