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Full text of "Evidence study"

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NATIONAL RECOVERY ADMINISTRATION 

Arii tt lUJb 

DIVISION OF REVIEW 



EVIDENCE STUDY 
NO. 39 



OF 



THE THROWING INDUSTRY 



Prepared by 

W. A. GILL 



August, 1935 



PRELIMINARY DRAFT 
(NOT FOR RELEASE: FOR USE IN DIVISION ONLY) 



uitfiiiiSl ^ . ±ti^ 

f 9999 06317 5i>^ ^ c^^^\. \ /^ -^i^ 



NATIONAL RECOVERY ADMINISTRATION 

' Arn b 1036 

DIVISION OF REVIEW 



EVIDENCE STUDY 
NO. 39 



OF 



THE THROWING INDUSTRY 



Prepared by 

W. A. GILL 



August, 1935 



PRELIMINARY DRAFT 
(NOT FOR RELEASE: FOR USE IN DIVISION ONLY) 



I 



THE EVIDENCE STIOY SERIES 

The EVIDSITCE STUDIES were originally planned as a means of gathering evidence 
tearing upon various legal issues which arose under the National Industrial Ee- 
covcry Act. 

These studios have value quite aside from the use for which they were originally 
intended. Accordingly, they are now made availahle for confidential use within the 
rivision of Review, and for inclusion in Code Histories. 

The full list of the Evidence Studies is as follows: 



1. Automohile Manufac baring Ind. 23. 

2. Boot and Shoe Mfg. Ind. 24. 

3. Bottlpd Soft Drink Ind. 25. 

4. Builders' Supplies Ind. 26. 

5. Chenical Mfg. Ind. 27. 

6. Cigar Mfg. Industry 28, 

7. Construction Industry 29. 

8. Cotton C-arnent Industry 30. 

9. Dress Mfg. Ind. 31. 

10. Electrical Contracting Ind, 32. 

11. Electrical Mfg. Ind. 33. 

12. Eat. Metal prod, Mfg., etc. 34. 

13. Fishery Industry 35. 

14. Parnituje Mfg. Ind. 36. 

15. General Contractors Ind. 37. 

16. Craphic Arts Ind. 33. 

17. Cray Iron Eoundry Ind. 39. 

18. Hosiery Ind. 40. 
IS. Infant's & Children's Wear Ind. 41. 

20. Iron and Steel Ind, 42. 

21. Leather 43, 

22. L^'Jinoer & Timber prod. Ind, 



Mason Contractors Industry 

Men's Clothing Industry 

Motion Picture Industry 

Motor Biis Mfg. Industry (Dropped) 

Keedleuork Ind. of Puerto Eico 

painting & Paperhanging & Decorating 

Photo Engraving Industry 

Plumhing Contracting Industry 

Retail pood (See No. 42) 

Retail Laraher Industry 

Retail Solid Fuel (Dropped) 

Retail Trade Industry 

Rubber Mfg. Ind. 

Rubber Tire Mfg. Ind, 

Silk Tejitile Ind. 

Structural Clay products Ind. 

Throwing Industry 

Trucking Industry 

Waste Materials Ind. 

Wholesale & Retail Food Ind. (See No. 31) 

Wliolesale 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. 3akir.g Industry 

47. Canning Industry 
43. Coat and Suit Ind. 



49. Household Goods &■ Storage, etc, (Dropped) 

Ind. 50. Motor Vehicle Retailing Trade Ind. 

51. Retail Tire & Battery Trade Ind. 

52. Ship & Boat Bldg. & Repairing Ind. 

53. Wholesaling or Distributing Trade 



L. C. Marshall 
Director, Division of Review 



(^^V\. 



CONTENTS 

Fo rev.'O rd 1 

CliAPTZR I - DESCEIPTIOIT MD SCOPE 3 

Code Definition 2 

History S 

Description of the Industry 2 

llimiber of Concerns and Estab- 

li slnment s • 3 

GeoGrapIiical Distribution of 

Establishments 3 

Size of Concerns 3 

Capital Investment 4 

Return on Investment 5 

Eai lures o 6 

CHjffTER II - LifflOR STATISTICS 8 

llui:nber of liaployees. • •• 8 

'Tages 8 

Average Hourly Wage Fcate. 10 

Labor Cost Conrpared vjith 

Total Manufacturing Cost 12 

Labor and Material Cost as 

Percentage of Net Sales 12 

CHAPTEEl III - RAW MATERIALS 14 

Cost of Raw Materials...... 14 

Available Supply of 

Raw Mat eria.ls 14 

CHAPTER IV - PRODUCTION AND DISTRIBUTION 15 

Total Production 15 

Principal Products 15 

G-eograpiiical Distribtxtion 17 

CHAPTER V - TRADE PRACTICES 18 

Pre- Code Unfair Practices 18 

CHAPTER VI - GENERAL INFORMATION 19 

Advantag es of the Co de 19 

Tra.de Association Activity 19 

Lists of Erqperts 19 



oOo 



8321 -i- 



TiffiLES 



Pa^e 



TJfflLE 



TABLi 



TABLE 



TABLE 



I - 



II - 



TABLE III 



IV 



V - 



TABLE VI - 

TABLE VII - 

TABLE VIII _ 

TABLE IX _ 

TABLE X - 

TABLE XI - 

TABLE XII - 



TABLE XIII 



N-uraber of Establishments, 

By Principal States, 1934 3 

Concerns in the Industry 

Classified According to llumter 

of T^visting Spindles j 1934 4 

271 Concerns in the Industry 
Classified According to Numter 
of Plants, 1934 4 

Rates of Return for 43 Commission 

Throwsters for Specified Periods 5 

Total Cost of Goods Sold, Net Sales, 
and Net Profit on Sales of 43 Com- 
mission Throwsters, January 1933- 
June 1934 6 

Estimated Ilumter of Failures 6 

Estimated Productive Capacity 

and Capacity Utilized, 1934 7 

Average Numher of Employees, 

"by Principal States, 1934 8 

Index of Employment, Payrolls, 

and Man-Hours 1933 and 1934 9-10 

Total Wages for a Two-Week Period, 

"by Principal States, 1934 10 

Average Hourly Wage Rate, Average 
Weekly Wages and Average Hours 
Per Week, liy Months 1933 and 1934 11-12 

Per Cent Labor Cost is of Total 
Manufacturing Cost of 43 Cora- 
mission Throwsters January 1933- 
June 1934 12 

Per Cent Labor Cost and Material 
Cost are of Net Sales of 43 
Commission Throwsters January- 
jTine 1933, January-June 1934 13 



8321 



• 11- 



TABLES (Cont'd) 



PaiSie 



TABLE XIV - Per Cent 2ax7 Material Cost is of 
the Total Haniifacturing Cost 
of 43 Commission Throwsters, 
January, 19S3-Junc , 1934 1^ 

TABLE XV - Volume of Rayon and Silk 

Throrm on Comniscion 15 

TABLE XVI - Volume and Value of Sill: 

Thrown for Sale and Sil^: and 

Hayon Throrm on Connission, 

by Principal Products l6 

TABLE X\^II - Total Silk and Ifeyon Thrown imdor 
the Throwing Code, by Principal 
Uses, 1934 l6 

TABLE XVIII - Volume of Silk Thrown for Sale 
and Silk and Rayon Thrown on 
Commission, by Principal 
Producing States, 1929 * IJ 



oOo 



8321 -iii- 



_1_ 

TKE THH0T7I1TG IICDUSTEY 

?Qi-ev/orcL 

Foolished -ovenraent data regarding the Tliro^Ting Industry, as such, 
are e::trenel:' meagre. This is due to the fact that the varioas govern- 
ment h-ojeaus^have considared it an integral part of the Sill: Industry. 

Eie Bureau of the Census has gathered data relating to the volmie 
ajid vcJ-ue of sill: s^id rayon thro\7n on coraraission and silh thro\m for 
sale, raid these data a:,e presented in this report. Special BTJxeau of 
Lahor Statistics tahvlations covering laoor conditions in the Industry 
as defined hy the Code, for the years 1933 and 1934, are presented in 
Chapter II. 

Ycjrious data suhnittGd in this report - particularly tliat gathered 
■by the Pederal Trade Coniiission - cover only the comvnission throwing 
part of the Industry. In the ahsence of more comprehensive data, it v;as 
considered advisalDle to -oresent this, however, particiilarly since it has 
^oeen estimated that appr ordinate ly 60 per cent of all throwing is done 
on coix-iission. 

Il-och of the infomation called for could he obtained only from the 
records of the Code A^Jiiinistration Committee, and in such cases these have 
consec'viently he en used. 



8321 



-2- 

CHAPTER I 

LESCRIPTION AHD SCOPE 

Code Definition 

The Throwing Industry includes "All nlants of throwing; machinery ^vith- 
in the United States whether owned or operated hy commission throwsters or 
by those throwing material for sale or for their o-m use and made of silk, 
rayon, or acetate yarns." 

Due to an overlapping in the definitions of the Throwing and Cotton 
Textile Codes those manufacturers throwing rayon in cotton textile plants 
have refused to come under the Throwing Code and have continued to operate 
and report under that of the Cotton Textile Indxistry. The data from the 
Code Administration Committee records, therefore, exclude these manufacturers. 

History 

The growth of the Throwing Industry in this co-untry directly parallels 
that of its parent, the Silk Industry. The Silk Industry "began to assume 
significant proportions in the seventies, and has gro\7n rapidly since then. 
In 1871 about 1.000,000 pounds of raw silk were imported, while in 192S over 
87,000,000 pounds were imported. Since that year there has been a decline in 
the Silk Industry with resulting decline in throwing. 

The only noteworthy recent development in the Industry has been the in- 
crease in the throwing of rayon. Rayon was first developed as a practical 
textile fibre in Prance in 1884 by Count Heloise de Charbonnet and was known 
at that time as artificial silk. It was not until about 1918 that it began 
to assume real commercial significance and after the war the Industry accel- 
erated ra-oidly. ±/ About 1923 the Cotton Textile Industry was suffering from; 
the post-war depression and began experimenting with rayon as a way out. By 
1927 a definite rayon weaving section had developed in the Cotton Textile In- 
dustry, The Silk Industry subsequently followed the lead of the Cotton 
Textile Industry in the use of rayon which was oftentimes mixed with silk in 
weaving, and rayon therefore became increasingly important in that Industry, 

Descrj-otion of the Industry 

Silk yarns that are used in the manufacture of woven and l-cnitted fabrics 
must be twisted into the size or description desired. This twisting is known 
as throwing. Throwing is done on a commission basis by commission throwsters 
who do not own the raw material but merely process it for other manufacturers. 
Throwing is also done as an integral part of the business by nany textile "ilnnts 
which later weave or knit the product into cloth or other fabrics. Silk and 
rayon are also thrown by companies who buy the raw silk, process and sell it 
to the knitters and weavers. 



1/ VTc B. Darby, Rnyon and Other Synthetic Fibres (1929), 



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-3- 

HtunTDer of Concerns and Sstatlishments 

According to the Code Administration Committee records there vjere 285 
concerns ODerating 343 establishments in the Throwing Industry in 1934, 

Geographical Distribution of Estahlishments 

As shown in Table I, these establishments were distributed among 23 
states with the highest concentration of 199 establishments in Pennsylvania. 
Other important states are Hew Jersey, New York, and llorth Carolina, with 
44, 23, and 19 plants, restjectively. 

TABLE I 

lluraber of Establishments, by Principal States 

1934 



State Number of Establishments 



U. S. Total 343 

Connecticut 9 

Maryland 4 

Massachusetts 11 

New Jersey 44 

New York 23 

North Carolina 19 

Pennsylvania 199 

Rhode Island 7 

Tennessee 7 

Virginia 4 

Other States §/ 16 



Source: Code Administration Committee records 

aj Alabama, 1 establishment; California, 1; Georgia 2; Illinois, 2; 

Indiana, 1; Iowa, 1; Kentucky, 1; Louisiana, 1; Maine, 1; Michigan, 
1; Minnesota, 1; West Virginia, 2; Wisconsin, 1. 

Size of Concerns 

Most of the concerns in the Industry are small in size. Code Administra- 
tion Committee records show that more than two-thirds of the members of the 
Industry (192) have less than 10,000 spindles, and only two have more than 
100,000 spindles. 



8321 



-U- 



TABLE II 



Concerns in the Industry Classified Accordin-rr to 
Nvmber of Twisting Spindles, 1934 



N'um'ber of Snindles 



Niinter of 
Concerns 



Total 



285 



Per Cent 
of Total 



100.0 



Under 10,000 spindles 
Prom 10,000 to 25,000 spindles 
Prom 25,000 to 100,000 spindles 
Over 100,000 spindles 



192 


67.4 


58 


20.3 


33 


11.6 


2 


.7 



Source: Code Administration Committee records. 

Kot only are concerns small in size "but a large majority of them oper- 
ate only one plant. Tatle III sho¥/s that of 271 concerns in the Industry, 
230 operate one plant, 23 firms operate two plants, and only one operates 
10 plants. 

TABLE III 

271 Concerns in the Industry Classified According to 
Ilumter of Plants, 1934 



Number of Plants 



Number of Concerns 



Total 



271 



One Plant only 
Two planbs 
Three plants 
Pour plants 
Ten plants 



230 

23 

11 

6 

1 



Source: Code Administration Committee records. 

Ca-pital Investment 

Reliable figures on total capital investnent in the Throwing Industry 
are not available. In its application for a Code, the Industry estimated 
the total capital investment in 1933 at $97,000,000. It apnears, however, 
that this estimate is considerably too high. The Federal Trade Commission 
in its Textile Report. Part IV. Silk and Rayon Industry , found 54 companies 
with 1,037,738 srjindles, enga^red in both stock and commission throwing, to 
have an investment of $15,633,061 for the period January to June 1934. Since 
the total spindles in the Industry in 1934 amounted to 2,641,846, according 
to the Code Administration Committee records, the Federal Trade Commission 



8321 



„5- 

sainple covered more than a quarter of the Industry. The above estimate of 
total capital investment must therefore "be much too large, if the remainder 
of the Industry has the same proportionate value per spindle as those com- 
panies studied "by the Commission, 

According to the above-mentioned report, 43 concerns engaged exclusive- 
ly in commission throwing had a capital investment of $12,203,934 for the 
first half of 1934„ 

Return on Investment 

In view of the fact that commission throwsters do not own the materials 
they process their profits represent only the difference between the commis- 
sions they receive and the cost of labor plus other manufacturing costs. 
Profits or losses, therefore, tend to be small since opnortunities to gain 
or lose t"nrough changes in inventory values do not exist* Table I'V shows 
the rate of return in 43 commission-throwing concerns which comprised the 
representative sample recently studied by the Federal Trade Commission, 

TABLE 17 

Rates of Return for 43 Commission Throwsters 
for Specified Periods a/ 



Item 



January 


July- 


January- 


June 


December 


June 


1933 


1933 


1934 



On textile investment "b/ 3.33 0.48 1.97 
On total capital stock 

equity in textile business c/ 2.84 0.81 d/ 1.17 

On total investment e/ 3,25 0.60 2.01 

Source: Federal Trade Commission, Textile Report. Part I'V. Silk and Rayon 
Industry , 

a/ Computed on annual basis (eiccluding good will from investment). 

b/ Total income from the textile business before payment of interest 

and Federal taxes, based on total investment less good will and out- 
side investment « 

c/ Total net income, before payment of Federal taxes, less income from 
outside investment based on total investment less good will, outside 
investments, and borrowed money. 

d/ Loss. 

e/ Total income from all sources before payment of Federal taxes and 
interest. Based on total investment, less good will. 



8321 



-6- 



As shown in Table V, net sales of atout $4,100,000 were required to 
"bring a net profit of $198,167 in the first half of 1953. Slightly larger 
sales in the second half of that year res'-olted in a net profit of only 
$15,235. The first half of 1934 shows some improvement viith similar sales 



ret-urning $97,519. 



TABLE V 



Total Cost of Goods Sold, Net Sales, and Net 

Profit on Sales of 43 Commission Throwsters, 

January 1933 - June 1934 



Six-Month Total Cost of Net Net Profits 

Goods Sold Sales on Sales 



Janupry-June, 1933 $3,614,230 $3,812,397 $198,167 
July-December, 1933 4,002,975 4,018,210 15,235 
January-June, 1934 3,900,062 3,997,681 97,619 



Source: Federal Trade Commission, Textile Re-port. Fart IV. Silk and Rayon 
Industry . 

Failures 

Published data on the ntimber of failures or the liabilities involved 
in failures in the Throwing Industry over a period of years. are not avail- 
able. Table VI presents estimates of failures according to the best 
kno':^ledg'^ of Mr. Kelly of the Code Administration Committee. According to 
this estimate, the number of failures remained practically constant at two 
or three per year for the years 1929, 1931, and 1933, but increased to nine 
for the year 1934. It should be noted, however, that Dun and Bradstreet 
report no failures under this Code for 1934, 

TABL3 VI 

Estimated Number of Failures 



Year Number of Failures 

1929 2 

1931 3 

1933 2 

1934 9 

Source: Mr. Kelly, Code Administration Cor^mittee, 



8321 



/ 



-7- 
Productive Canacity 

Tatle VII shows estimates prepared "by the Code Administration Committee 
regarding availahle productive capacity. From this tahle it is seen that 
the availahle machine hours are almost three times the actual hours oioerated 
in 1934. 

TABLE VII 
Estimated Productive Capacity and Capacity Utilized, 1934 



Items Amount 



Numher of actual spindles 3,641,846 

Capacity machine hours of operation 20,467,993,100 a/ 

Actual machine ho\irs of operation 7,546,516,339 h/ 



Source: Estimates of the Code Administration Committee 

a/ Estinated "by multiplying nunher of twisting machines hy 121 hours 
per week; 5 B. machines ty 80 hours per week. 

h/ Based upon sample representing 89 per cent of the Industry covered 
hy the Code, 



8321 



CHAPTER II 
LASOR STATISTICS 

Him'ber of ItaT3loyees 

According to records of the Code Ad^ilnictration Coranittee, there were 
32,SS3 enployees in the Throning Industi";' in 193^' Pennsylvanir, us'.s the 
nost important state, 21,U0S persons - or al^out 65 per cent of the total - 
■faein^ employed there. Other important states with over 1,000 employees 
each were Ilassachusetts, New Jersey, ilortli Carolina, llew York, and Virginia. 
Table VIII shows the average number employed in each state in 193^» 

TABLE VIII 

Average Number of Emplo3''ees, 
by Principal States, 193^ sJ 



State 



Average Number 
of Enployees 



U. S. Total 

Connecticut 
Illinois 
Massachusetts 
Hew Jersey 
Kev/ York 
North Carolina 
Pennsylvajiia 
Rhode Island 
Tennessee 
Virginia 

Other States 



32,S93 

S92 

966 

i.SoU 

1,2143 

2,119 
i,U7i 

21,U0g 

505 

603 

1,051 

1,031 



Source: Code Administration Coni.uttee reports. 

a/ As of December 29, 133'+> ^oi' two-week period; 
reported by about 93 psr cent of the total 
spindles operating with the Industry operating 
at 50 per cent of capacity :.t that time. 



According to a special tabulation, shown in Table IX, made b;^ the 
Bureau of Labor Statistics in cooperation with the Division of Research 
and Planning, iUlA, employment in 193^ ^"'""S s,bout 2 per cent less than in 
1333; man-hours dropped nearly I6 per cent while payrolls increased by 
about 12 per cent. The decrease in man— hours is due largely to the de- 
crea.se in number of hours worked per week, as sho\7n in Table IX. 

TIages 

Ho information is available on total annual wages in this Industry. 
Parthermore, because of the seasonal nature of the Industry it would be 



S3 21 



-9- 

difilcult to naice a reliable estimate. Table X shows that total nages for 
a t\70-rreek period in Decenter 193^ anoinated to $692,628. This table also 
shov.'s total \7ages by principal producing states for the same period. About 
t\7c~thirds of the total wages paid c'uring this period - or 0^70,339 - v/ere 
paid in Pennsylvania. The second nost important state as to total wage 
pajaients was New York with a total payroll of only $35,107 for the two-weel: 
period. This amount is less than 5 per cent of the total payroll for the 
Industry'' for this period. 

The trend in payrolls has been upward in 133'^> ^s shown in Table IX. 

TABLE IX 

Index of Employment, Payrolls ajid Man-Hours 

1933 and I93U a/ 

(1933 = 100) 



Ye ex and 




ilonth b/ 


Employra 


1933 




Jaamary 


9^.5 


S'ebruary 


99.0 


March 


81.3 


A"oril 


S7.9 


May 


91.1 


June 


93.3 


July 


111.2 


Aug-ast 


116.6 


September 


10S.2 


October 


109.7 


November 


10S.2 


December 


9S.7 



Payrolls c/ 


Man-Hours d/ 


S3. 6 


10S.2 


93. s 


113.3 


70.2 


85.3 


77.9 


93.3 


Sg.S 


lOU.O 


91.2 


103.6 


109.7 


12U,U 


125. s 


103.5 


11U.3 


90.7 


125.3 


100. U 


121.0 


96.3 


93. u 


77.2 



Average 



100.0 



100.0 



100.0 



193H 

Januarj' 

February 

March 

A"Dril 

May 

June 

July 

August 

September 

October 

llovenber 

December 

Average 



93.0 

119.1 

112.7 

105.6 

90.1 

93.6 

95.6 

96. u 
82.6 

95. s 

9U.3 
96.7 

98. 



97.1 
1U3.8 
130.3 

115.9 

100.5 

102.0 

loU.o 

113.^ 

85.2 

lis. 9 

116.6 

lis. 3 
112.2 



7U.S 
110.7 

98.2 
85.6 
7U.S 

Ih.h 

76.9 
83.1 
61.0 
85.1+ 

S5.3 

85.0 

82. 9 



S3 21 



(Continued on following page) 



-10- 

TABLE IX 
( Cont « d) 

Source: UnpuTDlished data secured by the bureau of Labor Statistics in 
cooperation v/itli the Division of Research and Planning, HIUl. 

a/ Eeportins establishment r, considered to be almost completely 
covered by the Throwing Code, 

b/ Figures reportecT \7ere for payroll period nearest the 15th of 
the nonth. 

c] Based on c. representative sazrole covering an average of nearly 
50 establishments and 10,500 employees. 

d/ Con-Duted: Index of employment tines average hours per weeh 
reduced to 1933=100. 

TABLE X 

Total Wages for a Tv.'c-'Jeeh Period, 
by Principal States, 153^+ a/ 



State Wages Paid to 

Enployees 



U. S. Total $692, 62s 

Connecticut 12,7S6 

Illinois 2S,5US 

Massachusetts 23,312 

:Te-^uersey 32,33^ 

i.Ic\7 York 35,107 

JTorth Carolina 22,75^ 

Pennsylvania ^70,399 

Virginia 19,201 

Ovhsr States U2,1S5 

Source: Code Administration Coiriittee reports. 

a/ For t'jo-uee]: period as of December 29, 193^; 93 P^^ cent 
of spindles reporting, uith the Industry operating at 5O 
per cent of ce.pacity at that time. 

Average Hourly T7age Hate 

No published data are available on the average hourly ^7age rate in 
the Industry prior to 1933* I'l^- DeEin Hill, v;ho has been associated vdth 
the Te::tile Industry' for many years, has estimated that it nas about 27.5 
cents per hour in I929. According to Cole Acij.iinistration Committee 
records, the average hourly ra-te in 193^ "s-" 37-2 cents per hour, and 
averr^ge ueekl;/' earnings nere $12 per -jeel:. 



-11- 



A special tabulation made "by the Dureau of Labor Statistics in co- 
operation with the Division of Research. tmcL Plannint;,', IIEA, shov/s the average 
hourly wage to have been 2S.6 cents in 1933 ^^^^- 37.^ cents in 153^. Average 
neclcly v/ages increased from $10. Ul in 1933 ^° $11.59 in 193^> while average 
hovirs per rreek decreased fron 36*5 i^- 1933 'to 30.6 hours in 193^'-. Table XI 
shoTTs the average hourly '.7age rate, average \7ee!:ly vagc, and average hours 
per veek by months as well as the annual average for the years 1933 a--^"! 193^'-. 



Average 
193^ 



TABLE XI 

Average Hourl;/ I/age Rate, Average Weekly Uages 

and Average Hours Per TTeek, by Ilonths 

1933 and I93U a/ 



Year end 


Average Hourly 


Average Weekly 


Average Hours 


Month b/ 


ITage Rate 


c/ 


Wages 


i/ 


Per Week c/ 




(cents) 




(dollar 


s) 




1S33 












Jpssaary 


21. S 




9.26 




i|1.5 


February 


23.6 




9. S3 




41.5 


Llarch 


23.6 




9.00 




37, S 


AcTil 


23. C 




9. 29 




30.5 


May 


zk.o 




10.2s 




ki.k 


Jtme 


2I1.U 




10.26 




U0.3 


July 


2^.5 




10.35 




U0.6 


August 


33.9 




11.32 




32.2 


Septenber 


35.5 




11. OS 




30. U 


October 


35.0 




11.99 




33.2 


November 


36.0 




11.72 




32.3 


Decenber 


36.5 




10. UU 




2i3.U 



2o.6 



Januarj' 

February 

Ilarch 


36.7 

36.7 

36. s 


April 

I-Ia^' 

June 


37.2 
36.9 
37.9 


July 

August 

Se-otenber 


37.0 
37.5 

3S.6 


October 


37. S 


ITovenber 


37.7 


Decenber 


37.6 


Average 


37.U 



10.1+1 



10.92 

12. U9 
11.7s 
11.17 

11. Uo 
11.13 

11.02 

11.93 
10.27 

12.35 
12.29 
12.16 

11.59 



36.5 



29.2 

33.7 

31.6 

29. 5-^ 
30.1 

2n r* 
0.0 

29.2 

31.3 

26. s 

32.3 

32. s 

31.9 

30.6 



Source: Unijublished data secured oy the Bureau of Labor Statistics 

in cooperation Trith the Division of Research and Planning, IJEA. 



(Continued or. folloning page) 



5321 



-12- 

TA3LE XI 
( Cont ' d) 

a/ Reporting establishnents considered to "be alnost conpletely covered 
"oy the Throuin£- Code. 

"hj figures reported vrere for payroll period nearest the l^th of the month. 

c/ Based on a representative sample covering an average of 33 ectahlish- 
nents and about S,600 employees in 1S33 and a some^That larger portion 
of the Industry in IS3U. 

d/ Sased on a representative sanple covering an average of nearly ^O 
estp;olisl-ii.ients and 10,^00 esnployees. 



Lahor Cost Con-oared v/ith Total Hanufacmring Cost 

Since comaission throv/ing constitutes a service industry it ii: to he 
e:n)ected that lahor cost uill he relatively high. Tahle XII sho\7s that 
cost of labor in connission throwing pl?aits represents about tTTO-thirds of 
the total cost of nanufacturing. 

TABLE XII 

Per Cent Labor Cost is of Total Tanufacturing Cost 
of U3 Comuission Throwsters 
January I333 - June I93U 



Cost of Labor 
Si:c-I.ionth Period Total I.Ianufacturing Per Cent 

Cost Amount of Total 



J?jiuary-June, 1933 $3,1S1,1S7 $1,975,910 62.1 

July-December, 1333 3,565,Sl6 2,3S1,SU0 66.3 

January-- June, 193^ 3,^57,S7&' 2,360, S29 6C.3 

Source: Pederal Trade Coniaission, Ter.tile Be-port. Part IV . 
Silh and P.aYon Indiistr?- . 



Labor and Material Cost as Percentage of llet Sale s 

Table XIII, compiled from the Federal Trade Commission's Te::tile 
report, shows that in the comraission thro'.Ting concerns studied by it, total 
labor cost rnounted to 5I.S per cent of net sales in the first hrlf of 
1933, and 59.1 per cent for the first lir^lf of I33U. Thus, the relative 
labor cost was increased almost lU per cent under the Code. Over the sar.ie 
period relative material costs doubled, the percentage increasing froi-: .S 
to 1.16 -per cent of net sales. 



S3 21 



-13- 

TABLE XIII 

Per Cent Lator Cost and Material Cost are of ITet Sales 
of hj) CoianisGion Thronsters 
January-June 1933, Jcjmary-June I93U 



Si::-Iionth Period Per Cent Labor Cost Per Cent Ilaterial 

is of IJet Sales Cost is of llet 

Sales 



January- June, 193 J* ^l.S .S 

Januarj^- June , 193^ 59-1 1'° 



Source: federal Trad.e Cor.inission, Te::tile ?ce-oort. Part IV , 
Silk PJid Hayon Industry . 



S3 2: 



CHAPTER III 
HAW I.IATERIALS 

Cost of RavT Materials 

Readily available data on this subject pertain to the commission- 
thro\7in£ part of the Industry. Since this is in essence a service 
industry-- performing an operation on materials ovmed "by others, the ra\7 
material cost is naturally snail, the only expenditui-es "being for oil 
and sinilar incidental e?:penditures. According to the Jederal Trada 
Commission, raw material cost in the co;inission-thro\7ing concerns 
studied cXioimted to aliout 1 per cent of total maiiufacturing cost in the 
first half of 1933. Ta'ble XIV compares raw material cost with total 
manxifact-oring cost for this and other periods. 

TABLE XIV 

Per Cent Raw Material Cost is of the Total 
Manufacturing Cost of 43 Commission- Throwsters, 
January, 1933 - June, 1934 



Six-Month Period Total Mamrfacturing Raw Material Cost 

Cost Amount Per Cent of 

Total 

Janvmry-Jime, 1953 $3,149,715 $31,472 1.0 

July-Dec enter, 1933 3,518,447 47,453 1.3 

Januar3--JuJie, 1934 3,393,714 64,264 1.9 

Soiirce: Federal Trade Commission, Textile Reoort. Part IV , 
Silk and Rayon Industry . 

Availa,"ble S'l-c'cly of Raw Materials 

The amount of silk and rayon thrown depends upon the demand for 
fabrics req;airing these yarns. The availahle supply of silk and rayon 
com'bined that could be thrown if a demand existed is at least five times 
the ajiiount now heing thrown. The total available supply of silk, as 
roughlji- shoi.7n by imports, amounted to about 87,000,000 pounds 1/ for 1929, 
of rhich 82,000,000 pounds 2/ were consumed in that year. In the same year 
131,300,000 pounds 2/ of rayon were consumed. Since rayon is a synthetic 
product, more could readily have been produced if conditions had warranted. 



1/ B'oreau of Foreign and Domestic Comm.ercs, Foreign Commerce and 
navigation. 



2/ Textile Grganon , February 1935. 



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-15- 

CHAPTER IV 
PKODUCTION AMD DISTRIBUTION 



Total Production 



Data concerning the total volvane of production in the Throwing Indus- 
try are not available. To obtain such a total, data covering all the silk 
and rayon thro\m in the three following groups are necessary; namely, (1) 
amount' thrown on commission; (2) amount thrown for sale; and, (5) amount 
thrown on own account. Bureau of Census data for silk an.d rayon thrown 
on own acco^mt have not been gathered. Code Authority figures, on the 
other hand, which do include this category do not include any yarn thrown 
by those manufacturers who considered themselves under the Cotton Textile 
Code rather than the Throwing Code. 

Table XV shows the total volume of rayon and silk throm on commission 
for the Years 1929, 1931, 1935 and 1934, 

TABLE XV 

Volume of Rayon and Silk Thro\7n on Commission 



Year Number of Pounds 



1929 42,942,000 

1931 39,159,000 

1933 43,049,000 

1934 45,107,010 



Source: Census of Manufactures, "Silk and Rayon Goods;" establishments 
whose annual production is less than $5,000 are excluded. 1934 
data from Code Administration Committee. 

Frinci-Qgl Products 

The -orincipal products of the Throwing Industry are organzine, tram 
and crepe twist yarns. Tram is the common twist ordinarily given when 
silk yarn is thrown. It consists of five turns per inch. Organzine is 
a com-;oensating twist in which the thread is first twisted to the right 
and then twisted to the left, usually 16 turns to the right and 14 turns 
to the left. A crepe twist has a very high number of turns - from 58 to 
62 per inch - either to the right or to the left. 

Table XVI shows a product breakdown of the volume and value of silk 
thrown for sale and of the silk and rayon thrown on commission, for the 
years 1929, 1931, and 1933. 

Prom this table it is evident that tram and crepe twist are of abotit 
equ^l inroortance, 13,024,000 pounds of tram and 10,646,000 pounds of crepe 
having been thrown on commission in 1933. Attention is called to the de- 
creasing importance of organzine, the quantity thro^-n on commission having 
declined from 4, £62,000 pounds in 1929 to 955,000 in 1933. Hote'^orthy is 
the increr.se in rayon thro'Tn, the amount in 1933 having been nearly three 
times as great as that in either 1929 or 1931. 

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-i6- 



TABLE XVI 



Vol-iame and Value of Silk Throvm for Sale aj 
and Silk and Rayon Thrown on Commission, 
by Princi-pal Products 



Product 



3ua,ntity 



Value 



(Thou.sands of Pounds) 
1929 1931 1933 



(Thousands of Dollars) 
1929 1931 1933 



Silk throvm for sale 
U. S. Total 
Organs ine 
Tram 

Crepe t^vist 
Silk thrown on 
commission 
U. S. Total 
Organzine 
Tram 

Crepe t'vist 
Rayon throTm on 
commission 
Grand total 



12,121 9,753 

698 792 

8,556 6,301 

2,867 2,660 



7,544 $69,740 

290 4,431 

4,879 47,023 

2,375 18,286 



$32,177 $16,998 

2,845 848 

21,381 10,889 

7,951 5,261 



35,456 32,770 24,626 

4,862 1,569 955 

14,910 12,826 13,025 

16,684 18,355 10,646 

6,486 6,389 18,423 

55,063 48,912 50,593 



V 


t/ 


w 


V 


t/ 


^ 


V 


w 


w 


t/ 


u 


^ 



^ 



t/ 



^ 



Source: Census of Manufactures , "Silk and Rayon Goods" establishments 
rhose annual production is less than $5,000 are excluded, 

a/ Ho data have been collected for silk or rayon thrown for con- 
S'omption in these same establishments, 

b/ Hot called for on schedule. 

Table Xl""!! shows the total silk and rayon thrown under the Code according 
to the use later made of the yarn. By far the larger part of the silk thrown 
was subsequently used for knitting - presumably in the making of hosiery - 
while onlj'- a very small proportion of the rayon yarn was so used. 

TABLE XVII 

Total Silk and Rayon Thrown under the Throwing Code, 
by Principal Uses, 1934 a/ 



Product 



Bales 



Pounds 

31,400,730 
19,379,790 
12,020,940 
13,706,280 
497,745 
13,208,535 
45,107,010 



Total silk thrown 

Silk for knitting 

Silk for weaving 
Total rayon thrown 

Rayon for Iciiitting 

Rayon for weaving 
Grand total, silk and rayon thrown 



232,598 
143,554 

89,044 

101,528 

3,687 

97,841 
334,126 



(Cont'd on next page) 



8321 



1 



Source: 



a/ 



-17- 

< TAsifi kvii '(Cfont'a').-- 
Code Administration Committee Bulletins, 



No: 



1-4 and 50. 



Actual production for 50 '7eeks= Due to the jurisdictional 
dispute already referred to, raj'-on thro\7n by the members of 
the National Rayon Weavers Association '.yps not reported to the 
Code Authority for the Tnrowing Industry 



Geof:ra-i3hical Distribution 

Table XVIII sho'7s a breakdown of silk thrown for sale and of silk and 
rayon throun on commission in 1929 according to important producing areas, 
Pennsylvania is by far the most important, producing 26,707,761 pounds. 
New York and New Jersey are the next important areas producing 3,348,647 
and 2,390^040 pounds, respectively, 

TABLE XVIII 

Volrane of Silk Thro?.rn for Sale and Silk and Ea:/on Thrown 

on Commission, by Principal Producing States, 1929 

(in thousand pounds) 



State 



Total Organzine Tram Hard or 

Crepe Twist 



Silk thro^7n for sale 
U. S. Total 



12,121 



698 8,556 2,867 



Silk thrown on 
commission 



U« S. Total 
ITew Jersey 
New York 
Pennsylvania 
Other States 



36,457 


4,862 


14,910 


16,685 


2,390 


410 


610 


1,371 


3,349 


674 


1,833 


842 


26,708 


3,549 


10,108 


13,050 


4,010 


229 


2,359 


1,422 



Bajon thro'.7n on 
commissicn 



U. S. Total 
I'ew Jersey 
Pennsylvania 
Other States 



6,486 

324 

4,800 

1,362 



Grand Total 



55,064 



5,560 23,466 19,552 



Source: Census of Manufactures , "Silk and Rayon Goods;" establishments 
whose ann'oal production is less than 5,000 are excluded. 



8321 



-IS- 

CHiPTER V 

TMDE PrvACTICES 

Pre -Code Unfair Practices 

Pair trade practices are difficult to define in any open and freely co^^i- 
petitive market. I'ethods and practices that may "be considered unfair "by one 
manufacturer may be considered perfectly ethical by mother. Since the Throw- 
ing Industry is engaged, in the main, in the lorocessing of materials belonging 
to others, and thus has little or no part in the distribution of products, op- 
portunities for unfair trade practices pre not so great as in other industries. 

The outstanding unfair practice in the Throv/ing Industry was that of de- 
structive TDrice coranetition. This evil, ijhich v/as quite rridespr---iad, tras made 
possible by the relation of labor cost to total cost of manufac-ture. Since 
wages constitute the greatest part of the total expense of manufacture, it 
folloi7s that the throrrster nho paid the louest wages wap able to quote the los- 
est price. Throwsters located in areas where lo\7 wages were the standard were 
at an advantage over those located in high wage areas, Hot only was this pric 
competition possible between wage areas but within a given area the unscrupu- 
lous throwster found he could decrease his price ^y decreasing wage rates. 



8321 



I 

I 



-20- 



A. Coradi, 

Schwarzentach Euter Conpcny, 

Uqg 7th Avenue, 

Ne'.7 York, New York. 

R. K, Lnros, and A» H, Ilueller, 
R. K, Laros Silk Company, 
Bethlehem, 
F ennsylvania, 

Jomes Simpson, 

Col-um"biEi Silk Throv/ing Company, 

Bloomstjurg, 

Pennsylvania. 

Stanley Hunt, (Statistician) 
Tutize Chat ell ion Corporation, 
2 Park Avenue, 
Ke\7 York, New York. 

Paul Hemmerich, 
Duffy Silk Company, 
Buffalo, Nen York. 

D. E. Douty, 

United States Testing- Company, 

Ho token, 

New Jersey, 



8321-# 



-19- 

CKAFTEH VI 
GEIIERAL lEFOE/iATIOS 

Ac.vantages of the Code 

The Inbor-cpst floor crerted l3y the Code vfrs its greatest achievement. 
The ninira^am wrge'of $13 per -reek helped to decrease price-ciitting and to re- 
store confidence. 

The effect of the niniin-um r7age T7as endangered ho'TOver, hy the fact that 
the IJational Hayon 'ie-vers refused to recognize the Throwing Code and operatec 
under the Cotton Te:;tile Code which had a minim.-'Jii wage of $12 per week. This 
protlem might ultinatslj'- have "brought a"bout a complete hreaJcdown of the 
Throwing Code unlesr. steps were taken to inake the niinimuiii wage for the two 
Codes identical. 

Trade Association Activit?/- 

The Throwsters I.esearch Institute was orga.nized in January of 1932 to 
promote cooperative effort. Its functions are to promote trade research, 
conduct experiments with the view of improving nethods of production, collect 
statistics', and try to establish standards of quality. The Association was 
very active in obt"ining the Code and in its adjninistration after it was 
obtained. 

List of Bxoerts, 

Henry J. Tynan, 

Tynan Throwing Gor.:p."ny, 

Paterson, New Jersey, 

George Friedlander, 
Duplan Silk Company, 
1U5O Broadway, 
New York, New York. 

■J, R, Rossna.ssler, 

Sauquoit Silk liaiiufacturing Company, 

UO East 3Uth Street, 

New York, New York. 

Dean I-Iill, 

Mercerizers Association of America, 

kGS Uth Avenue, 

New York, New York, 

7ard Cheney, 
Cheney Brothers, 
179 Madison Avenue, 
New York, New Yor]:, 



8321