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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),
8321
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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
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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.
8321
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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.
8321
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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
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