Y3.A/ai/?;a3/^/
BOSTON PUBLIC LIBRARY
3 9999 06317 557 2
NATIONAL RECOVERY ADMINISTRATION
DIVISION OF REVIEW
EVIDENCE STUDY
NO. 41
OF
THE WASTE MATERIALS TRADE
Prepared by
R. H. HOWARD
October, 1935
PRELIMINARY DRAFT
(NOT FOR RELEASE: FOR USE IN DIVISION ONLY)
THE EVIDENCE STUDY SERIES
The EVIDENCE STUDIES were originally planned as a means of gathering evidence
bearing upon various legal issues which arose under the National Industrial Re-
covery Act.
These studies have value quite aside from the use for which they were originally
intended. Accordingly, they are now made available for confidential use within the
Division of Review, and for inclusion in Code Histories.
The full list of the Evidence Studies is as follows:
1. 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.
6. Cigar Mfg. Industry 28.
7. Construction Industry 29.
8. Cotton Garment Industry 30.
9. Dress 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. Lumber & Timber prod. Ind.
Mason Contractors Industry
Men's Clothing Industry
Motion Picture Industry
Motor Bus Mfg. Industry (Dropped)
Needlework Ind. of Puerto Rico
Painting & Paperhanging & Decorating
Photo Engraving Industry
Plumbing Contracting Industry
Retail Food (See No. 42)
Retail Lumber Industry
Retail Solid Fuel (Dropped)
Retail Trade Industry
Rubber Mfg. Ind.
Rubber Tire Mfg. Ind.
Silk Textile Ind.
Structural Clay Products Ind.
Throwing Industry
Trucking Industry
Waste Materials Ind.
Wholesale & Retail Food Ind. (See No. SI)
Wholesale Fresh Fruit & Veg.
In addition to the studies brought to completion, certain materials have be©n
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 49.
45. Automotive parts & Equip. Ind. 50.
46. Baking Industry 51.
47. Canning Industry 52.
48. Coat and Suit Ind. 53.
Household Goods & Storage, etc. (Dropped)
Motor Vehicle Retailing Trade Ind.
Retail Tire & Battery Trade Ind.
Ship & Boat Bldg. & Repairing Ind.
Wholesaling or Distributing Trade
L. C. Marshall
Director, Division of Review
CONTENTS
Page
Foreword 1
CHAPTER I - NATURE OE THE INDUSTRY 2
Code Definition of the Trade 2
Description of the Trade
Total Number of Establishments 3
Number of Wholesalers Proper "oy States 3
Establishments Classified by Value of
Sales per Establishment . . 4
Establishments Classified by Type of
Distributor , • « 5
Establishments Classified by Chief Divisions
of the Trade, by Principal States
Total Volume of Sales .
New Establishments Opened, 1930-1933 •. 8
Disappearance of Establishments 10
Principal Competitors • 11
principal Products Used by Other Industries . 11
Principal Customers , 11
CHAPTER II - LABOR STATISTICS 13
Total Number of Employees 13
Average Number of Employees 'oy Principal States . . . • 13
Average Number of Employees by Chief Divisions
of the Wholesale Trade, by Principal States 14
Seasonality of Employment 14
Total Annual Payrolls 15
Annual Payrolls by Principal States 15
Annual Payrolls by Chiof Divisions of the
Wholesale Trade, by Principal States IS
Per Cent Which Wages are of Net Sales IV
Hourly Wage Rates 17
Weekly Wages 18
Average Hours Worked per Week 19
CHAPTER III - MATERIALS: RAW AND SEMI- PROCESSED ..... 21
Principal Materials Handled by the Trade 21
Areas of Production 21
Imports 21
Machinery and Equipment 21
CHAPTER IV - PRODUCTION AND DISTRIBUTION 23
Value of Products Sold in Each State 23
Net Sales by Chief Divisions of the Wholesale
Trade, by Principal States . ■. 23
8793 -i-
CONTENTS (Cont'd)
Page
CHAPTER IV - PRODUCTION AND DISTRIBUTION (Cont'd)
Consumption of Waste 24
Non-Ferrous Scrap 24
Reclaimed Rubber 25
Iron and Steel Scrap 26
Distribution 27
General 27
Recent Development of Direct Dealing 27
Ercports 33
Value 33
Volume 33
General 34
Advertising 34
CHAPTER V - TRADE PRACTICES 35
Unfair Trade Practices 35
CHAPTER VI - THE INDUSTRY - GENERAL INFORMATION 37
General Characteristics . 37
Outstanding Problems 37
Favorable Developments 37
Effect of the Code on the Trade 38
Trade Associations 38
8793 -ii-
TABLES
Page
TABLE I Number of Establishments of Wholesalers
Prober, by Six Principal States, 1929 and
1933 . 4
TABLE II Wholesale Merchants Classified by Value
of Net Sales Per Establishment, 1933 5
TABLE III Number of Wholesale Establishments and
Net Sales Classified by Type of Distribut-
or, 1929 and 1933 6
TABLE IV Number of Wholesale Establishments Clas-
sified by Chief Divisions of the Trade,
by Six Principal States, 1929 7
TABLE V "Wholesale Proper" Establishments Started
1930-1933, Compared with Total Such Estab-
lishments in 1933, for Selected States 9
TABLE VI Number of Establishments of Wholesalers
Proper Which Opened, 1930-1933, by Period
During Which Opened 10
TABLE VII Disappearance of Wholesale Establishments;
of all types and of Wholesalers Proper,
1929-1933 11
TABLE VIII Average Number of Employees of Wholesalers
Proper, by Six Principal States, 1929 and
1933 13
TABLE IX Average Number of Employees of Wholesalers
proper, by Chief Divisions of the Trade, by
Six Principal States, 1929 14
TABLE X Seasonality of Employment in All Types of
Wholesale Establishments, 1933 15
TABLE XI Annual Payrolls of Wholesalers Proper, by
Six Principal States, 1929 and 1933 16
TABLE XII Annual Payrolls of Wholesalers Proper, by
Chief Divisions of the Trade, by Six
Principal States, 1929 17
TABLE XIII Average Weekly Wages Paid by Wholesale
Merchants, by Chief Divisions of the Trade,
by Principal States, 1933 18
8793
•iii-
TABLES (Cont'd)
Page
TABLE XIV Average Hours Worked per Week, "by Sex,
for Two Groups of Employees, for
Selected Dates, 1929* and 1933 19
TABLE XV Warehouse and Yard Employees Classified
According to the Number of Hours Worked
in the Week Including June 15, 1933 20
TABLE XVI Volume and Value of Imports, "by Principal
Groups, 1929-1934 (in thousands) 22
TABLE XVII Net Sales of Wholesalers Proper, by Six
Principal States, 1929 and 1*933 23
TABLE XVIII Net Sales of Wholesalers Prober, "by Chief
Divisions of the Trade, "by Six Principal
States, 1929 24
TABLE XIX The Proportion of Secondary Non-Ferrous
Scrap, by Principal Kinds, Consumed or
Available for Consumption, 1931-1933 25
TABLE XX Consumption of Total Rubber and of Re-
claimed Rubber, and Wholesale Price Index
of Crude Rubber, 1926 - 1934 26
TABLE XXI Volume and Value of Exports, by Principal
Groups, 1929-1934. . 33
8793
-IV—
CHARTS
Page
CHART I Waste Material Trade
1. Scrap Iron and Steel Division. ..... 28
2. Non-Ferrous Scrao Metals Division. ... 29
3. Waste Paper Division 30
4. Textile Waste Div: sion, Wool Stock,
Cotton Hag 31
5. Scrap Rubber Division 32
CHART II Paperboard and Waste Paper Price Indexes:
1919 - 1955 36
8793 -v-
„1_
"JASTE MATERIALS TRADE
Foreword
The chief sources of information used in the writing of this study
are the Census reports on the Wholesale Trade for the yeers 1Q29 and 1933*
Additional labor data presented in Chapter II were obtained from an analysis
of questionnaires sent out in 1933 "by the KRA, Research and Planning
Division, through the Bureau of the Census, covering a small out representa-
tive sample of the Trade. The export and import data used were trken from
publications of the Bureau of Foreign and Domestic Commerce, and additional
material has occasionally been taken from private sources.
It should be noted that there are -oractically no data available which
are comprehensive enough to apply to the Trade as defined by the Code. It
has apparently not been possible for the Code Authority to assemble such
information, and the Census materials obviously are not sufficiently com-
prehensive because of the significant differences in the Trade as defined
''oj the Code and by the Census classification. As explained in Chapter I
herein, the former covers both retell and wholesale establishments while the
Census classification for the Waste liatorials Trade covers only the whole-
sale branch of the Trade. Furthermore, the 1933 Census dnta do not in-
clude establishments with annual sales of less than £1,000 (or less than
$500 in the case of assemblers and country buyers, of whom there are only
a negligible number in this trade). Since the 1929 data do not er.clude these
smaller establishments, a comparison of the 1929 and 1933 data for any given
series must be understood somewhat to overstate the decline which occurred
from 1S29 to 1933.
In general, the Census data ^resented in this study apply not to the
entire wholesale trade in waste materials but only to "wholesalers proper."
In some cases data for all types of wholesale establishments were available,
but since complete state breakdowns were not always available, the less
comprehensive series on wholesalers proper were used instead in order to
retain general comparability of the data from one table to another. As
indicated in the text, the wholesale proper group is so important both as
to number of establishments and as to sales that it may confidently be
regarded as representative of all t""">es of wholesale establishments in the
Trade.
133
-2-
Chapter I
NATURE OP THE INDUSTRY
Code Definition of the Trade
The Trade was defined "by the Scrap Iron, Nonferrous Scrap Metals and
Waste Materials Trade Code as follows:
"The term ' Scrap Iron, Nonferrous Scrap Metal and Waste
Materials Trade'' or 'Trade' as used herein, and as subdivided
in the following specific commodity trades, includes the buy-
ing and/ or handling for resale purposes on commission, or
otherwise, of scrap iron and steel, nonferrous scrap metal,
cotton and woolen rags, scrap rubber, waste paper, and other
commodities commercially classified as waste materials. It
shall also include the buying and/or handling for resale purpos-
es on commission or otherwise , cf textile waste insofar as the
members of that division of the trade, as hereinafter defined,
shall signify their intentions in writing to the Waste Trade
Committee to be governed by this Code."
Seven commodity subdivisions were covered by the Code as follows: the
Scrap Iron and Steel Trade, the Non-Perrcus Scrap Metal Trade, the Wool
Stock Trade, the Scrap Rubber Trade, the Waste Paper Trade (which later came
under a supplementary Code), the Cotton Rag Trade, and the Textile Waste
Trade.
Description of the Trade
The Trade includes the buying and handling for resale purposes on com-
mission or otherwise of various sorts of waste materials. As Administrator
Hugh S. Johnson indicated in his report to the President, March 0, 1934,
recommending approval of the Code, the Trade
"«.... is one of collection, the wholesaler buys from the
retailer and sells to the industrial consumer. The organiza-
tion of this trade is complicated by the fact that the usual
distinction between wholesaler and retailer is blurred. Firms
which are retailers of certain commodities included in this
trade are often wholesalers of other commodities."
The direction of the services usually performed by retailers and whole-
salers is just reversed in this Trade, for the retailer, instead of dis-
tributing goods to the ultimate consumer, collects material from him, and the
wholesaler instead of selling to the retailer, buys from him, and so on.
Any attempt to distinguish between wholesale and retail operations, and
to set up a separate code for each was abandoned because of this lack of a
clear line of demarcation between the two, and the Code covers both retail-
ers and wholesalers. It consists, at the retail end, of an indeterminate
number of one-man junk collectors or peddlers, many of whom are crippled or
unfortunates who cannot otherwise make a living. These individuals gather
all types of waste, including rags, scrap iron, waste paper., and scrap rubber
8793
-3-
from homes, junk heaps, public dumps, garages, and other sources. This
waste material is then sorted and resold to "both large and small dealers.
The smaller, or "mixed" dealer usually resells each different type of waste
to wholesalers specializing in that particular type of waste product. The
wholesaler completes the sorting, grading, or treating of the waste and re-
sells it to the industrial consumer.
Total Number of Establishments
The total number of establishments in the wholesale Trade as reported
by the Wholesale Censuses for 1929 and 1933 was 4,000 in the former year and
3,417 in the latter. (See Table III, hereinafter.)
Uumber of Wholesalers Proper by States
Data on the number of wholesalers proper l/ which include "wholesale
merchants, exporters, importers, and limited function wholesalers" are pre-
sented for the six leading states in Table I. Although state data on number
of establishments are available for all types of wholesalers in the Trade,
data on "wholesalers proper" have been presented in order to retain compara-
bility with later tables on sales and wage earners where complete state
breakdowns are not available for all types of establishments. It may also
be noted that in this Trade the total number of establishments reported is
in most cases only slightly larger than the number reported for "wholesalers
proper." Table III, below, shows in fact that approximately 98 per cent of
all establishments fell in the "wholesalers proper" group in 1929 and 1933.
Table I, below, shows that approximately half the total number of estab-
lishments were situated in the six states listed, in 1929 and 1933. The
three states, New York, Ohio, and Pennsylvania accounted for about a third
of the total in each of these years.
1/ This term as used in the 1933 Census is comparable with the term "whole-
salers only" as used in the 1929 Census.
8793.
-4-
TABLE I
Number of Establishments of Wholesalers Proper, by Six
Principal States, 1929 and 1933
State 1929 1933
Number
Per Cent
of
Total
U. S. Total
3
,919
100.0
California
158
4.0
Illinois
223
5.7
Massachusetts
236
6.0
New York
600
15.3
Ohio
325
8.3
Pennsylvania
481
12.3
All Others
1
,896
48.4
Number
Per Cent
of
Total
3,360
100.0
153
4.5
227
6.8
146
4.3
459
13.7
326
9.7
331
9.9
1,718 51.1
Source: Census of Wholesale Distribution. 1929, U. S. Summary, and State
reports, Table 2; and Census of American Business. 1933, Whole-
sale Distribution. U. S. Summary, and State reports, Table 2A.
The 1933 data do not include establishments with annual sales of
less than $1,000.
Establishments Classified by Value of Sales per Establishment.
Data classifying establishments by value of sales per establishment are
presented in Table II below, for wholesale merchants in the Trade. Similar
data are not available for all wholesale establishments, but the group
covered constituted 93 per cent of all establishments in 1933 and accounted
for 55 per cent of net sales in that year.
The table shows that about 83 per cent of all wholesale merchants did
a business valued at less than $50,000 in 1933, but that this group account-
ed for only 18 per cent of total net sales for the Trade, while less than 1
per cent of the merchants accounted for more than 20 per cent of the business.
8793
-5-
TABLE II
'.iholesale Merchants Classified "by Value of Net Sales
Per Establishment, 1933
Value of Net
Establishments
Total Value
Amount
of
Per
Sales
Sales Per
Per Cent
• Cent
Est abli shraent
Number
of Total
(000' s)
of
Total
Total
3,343 a/
100.0
$155,661 b/
100.0
Under $50,000
2,771
82.8
27,934
18.0
$50,000 - $99,999
255
7,6
17,739
11.4
$100,000 - $199,
,999
163
4.9
22,460
14.4
$200,000 ~ $299,
,999
66
2,0
15,884
10.2
$300,000 - $499,
,999
39
1.2
15,001
9.6
$500,000 - $999,
,999
32
1.0
23,342
15.0
$1,000,000 and over
17
.5
33,301
21.4
Source: Census
of American
Business,
, 1933. WhoL
Bsale Distribut
ion,
U. S.
Summary, Table 7. The 1933 data do not include establishments
with annual sales of less than .31,000.
a/ This figure is not consistent with a total of 3,342 for wholesale
merchants elsewhere reported by the Census. See Table III, below.
b/ This figure is not consistent with a total of $155,574 for whole-
sale merchants elsewhere reported by the Census. See Table III,
below.
Establishments Classified by Type of Distributer
A breakdown of the total number of wholesale establishments and total
net sales by type of distributor is given in Table III for the years 1929
and 1933.
As already noted, wholesalers proper, consisting of four sub-groups,
represented by far the most important types of distributors in both years.
They constituted about 98 per cent of all establishments in each year, and
accounted for about 86 per cent of the net sales in 1929 and 96 per cent in
1933. The most important sub-group, wholesale merchants, accounted for
nearly all the group's establishments in both years, and most of the sales
in 1929. In 1933, horever, the sales of exporters, who were only six in
number as compared with thirteen in 1929, reported an almost eight-fold in-
crease in sales. There was, meanwhile, a decline of about 65 per cent in the
sales reported by wholesale merchants, with the result that the sales figures
for these two sub-groups, merchants and exporters, were not very different
in 1933 — $156,000,000 for the former, and $108,000,000 for the latter. The
corresponding figures for 1929 were $444,000s000 and $14,000,000.
8793
-6-
TABLE III
Number of Wholesale Establishments and llet Sales Classified by-
Type of Distributor. 1929 and 1933
Type of Distributor
Number of
Establishments
1929 a/ 1933
Net Sales
(000' s)
1929
1933
All Types
4,000
3,417
$552,280
$282,602
Wholesalers Proper
3.919
3.360
474.453
272.173
Wholesale Merchants
3,873
3,342 b/
444,284
155,574 c/
Exporters
13
6
13,604
108,145
Importers
6
1 §J
2,117
87 d/
Limited Function WhDlesalers
27
11
14,448
8.367
Manufacturer' s Sales Branches
3
4,572
73,255
53,890
169
Agents and Brokers
78
48
35
10,260 d/ e/
Brokers
53
8,593
Commission Merchants
8
4
3,944
522
Manufacturer s ' Agent s
2
6
1,235
408
Other Agents
15
3
14,186
1/
Assemblers and Country Buyers
—
7
tl
Source: Census of Wholesale Distribution. 1929, U.
7: and Census of American Business. 1933,
, S. Summary,
Wholesale Di
Table 5, 6,
stribution.
U. S. Summary, Table 33. The 1933 data do not include establish-
ments with annual sales of less than $1,000 or less than $500 in
the case of assemblers and country buyers.
a/ 'Hie 1929 figures as taken from the 1929 Census report do not check
throughout with those given for that year in the 1933 Census.
b/ This figure is not consistent with a total of 3,343 for wholesale
merchants elsewhere reported by the Census. See Table II, above.
c/ This figure is not consistent with a total of $155,661 for wholesale
merchants elsewhere reported by the Census. See Table II, above,
d/ This figure is not published in the U. S. Summary report for 1933,
but has been derived through comparison of State and Summary reports.
e/ Includes sales of assemblers and country buyers.
f/ Not published separately but included in the total sales for agents
and brokers.
8793
-7-
Establishments Classified "by Chief Divisions of the Trade, "by Principal States
Of the three chief divisions of the wholesale trade the Junk and Scrap
Division was "by far the most important, for the country as a whole, on the
"basic of number of establishments. Out of the total 4,000 in 1929, there
were 3,083 in this category. (See Table IV below.)
Junl: and Scrap establishments were likewise the most numerous in each
of the six leading states, and in the "all others" group. There was not so
high a degree of concentration in this Division within these six states, how-
ever, as was the case with waste rubber, rags and paper, since 75 per cent of
all establishments were in these states,
per cent of the total in this Division.
New York State alone reported 42
TABLE IV
Number of Wholesale Establishments Classified by Chief Divisions of the
Trade, by Six Principal States, 1929
Division
State
All Divisions Junk and Scrau
Number
Per
Cent
Number
per
Cent
Iron and Steel Waste Rubber,
Scrap Rags c and Paper
Per «.._-l. Per
Number
Number
Cent Cent
U. S. Total
4
,000
100.0
California
161
4.0
Illinois
236
5.9
Massachusetts
237
5.9
New York
623
15.6
Ohio
334
8.4
Pennsylvania
500
12.5
All Others
1
,909
47.7
3,083
132
170
197
414
257
365
1,548
100.0
50.3
644
29^
100.0
45.4
273 100.0
4.3
18
2.8
11
4.0
5.5
51
7.9
15
5.5
6.4
18
2.8
22
8.0
13.4
95
14.7
114
41.7
8.3
65
10.1
12
4.4
11.8
105
16.3
30
11.0
69
25.4
Source: Census of Wholesale Distribution. 1929. U. S. Summary and State re-
ports, Table 5.
Total Volume of Sales
As shown in Table III, above, total net sales reported by the wholesale
Census amounted to $552,280,000 in 1929 and $282,602,000 in 1933. Actually
the decline was presumably somewhat less than the 1933 figure indicates be-
cause of the fact that the Census report in that year did not cover estab-
lishments having annual sales of less than $1,000 or less than $500 in the
case of assemblers and country buyers, whereas the 1929 canvass included
both these groups.
8793
_8~
New Establishments Opened. 1950-1933
"TTholesale proper" establishments started during 1930-1933 comprised 25
per cent of all tne establishments in the Trade in 1933, hut accounted for
only 6«2 per cent of the total sales. It may be significant that for the
country as a whole the ratio of expenses and of payrolls to net sales for
new establishments was nearly twice what it was for all establishments.
Tabic V below which gives this information, also shows data on new estab-
lishments for the sir states selected by the Census to represent the various
geographic regions of the country.
8793
-9-
TABLE V
"Wholesale Proper" Establishments Started 1930-1933, Compared with
Total Such Establishments in 1933, for Selected States.
Number
of
Net
Sales
Total
. Expenses
Payrolls
State and
Amount
Per Cent o
f Amount
Per Cent of
Establishments
Estab—
(000 »s)
(000 is)
Net Sales
(000's)
Net Sales
]
.ishments
U. S. Total
Total
3,360
$272,173
$29,499
10.8
$12,825
4.7
New
850
$16,904
$3,401
20.1
$1,474
8.7
New as fo
of Total
25.3
6.2
11.5
11.5
Massachusetts
Total
145
$8,860
$1,832
20.7
$867
9.8
Hew
19
$865
$152
17.6
$72
8.5
New as f0
of Total
13.1
9.8
8.3
8.3
_ —
Rhode Island
Total
22
$273
$82
30.0
$36
15.2
New
3
$24
$7
29.2
$4
16.7
New as fo
of Total
13.6
8.8
8.5
11.1
, . .. .
Ohio
Total
326
$2S,258
$3,888
13.8
$1,550
5.5
New
76
$1,939
$387
20.0
$165
8.5
New as fo
of Total
23. 3
£.9
10.0
10.6
„_
Indiana
Total
118
$5,610
$819
22.7
$381
10.6
New
20
$328
$76
23.2
$39
11.9
New as fo
of Total
16.9
9.1
9.3
10.2
......
South Carolina
Total
22
$1,427
$118
8.3
$55
3.9
New
7
$218
$32
14.7
$16
7.3
New as fo
of Total
31.8
15.3
27.1
29.1
_ — .
Texas
Total
93
$1,374
$393
21.0
$183
9.8
New
29
$136
$39
28.7
$20
14.7
New as fo
of Total
31.2
7.3
9.9
10.9
___
California
Total
153
$6,971
$1,723
24.7
$777
11.1
New
51
$1.
$236
23.1
$108
10.6
New as fo
of Total
33.3
14.7
13.7
13.9
— -
Oregon
Total
21
$1,409
$515
22.4
$128
9.1
New
6
$46
$15
32.6
$6
13.0
New as fo
of Total
28.6
3.3
4.8
— — —
4.7
—
Source: Data for total estab]
.ishments
from Census of Arae
rican Business, 1935,
Who
desale Di
stribution, U. S.
Summary
and State
reports, Table 2B;
data on new
establish
iments from Ibid. ,
report on
New and Old Estab-
lishments, Appendix B; and percentage of new to total computed.
The 1935 data do not include establishments with annual sales of
less than $1,000.
8795
-10-
The number of new establishments of wholesalers proper opening in 1933
is shown in Table VI, below, to have been about 43 per cent of that total
opened during the four-year period 1930-1933, while the average rate of the
three previous years was only about 19 per cent of the total. A breakdown for
the year 1933 by quarters shows that the largest number of openings occurred
in the third quarter.
TABLE VI
Number of Establishments of Wholesalers Proper Which Opened,
1930-1933, by Period During Which Opened
Period During Which Opened
Establishments
Number
Per Cent of Total
Total Opened
850
100.0
1930 to Jan. 1, 1933
Year 1933
482
368
56.7
43.3
First quarter
Second quarter
Third quarter
Fourth quarter
36
101
131
100
4.2
11.9
15.4
11.8
Source: Census of American Business, 1935, Wholesale Distribution, New and
Old Establishments, Table 8. The 1933 data do not include estab-
lishments having annual sales of less than $1,000,
Disappearance of Establishments
In 1933, the reported number of "old" establishments of all types of
wholesalers and of wholesalers proper was approximately 64 per cent of the
1929 total number, this indicate rig that some 36 per cent went out of busi-
ness far one reason or another during this period. However, the decline
is presumably not so great as the 1933 figure indicates because of the fact,
already noted, that the Census coverage for that year was less complete than
in 1929.
8793
-11-
TABLE VII
Disappearance of Wholesale Establishments: of all Types
and of Wholesalers Proper, 1929-1933 a/
Item
Establishments of all Establishments of
Types of Distributors Wholesalers Proper
Uumber Per Cent Number Per Cent
of 1929 Total of 1929 Total
1929
1933
Old
New
Decline in old, 1929
to 1933 c/
4,000
3,410 b/
2,547
863
1,453
100.0
85.2
63.7
21.5
36.3
3,919
3,360
2,510
850
1,409
100.0
85.7
64.0
21.7
36.0
Source: Census of American Business, 1953, Wholesale Distribution, New and
Old Establishments; basic data from Table 1 and Appendix A. The
1933 data do not include establishments with annual sales of less
than $1,000 or less than $500 in the case of assemblers and country
buyers.
a/ "Old" establishments refer to those which started operation prior to
1930 and "new" refers to those establishments which started opera-
tions subsequent to 1929.
b/ This total is not consistent with the total of 3,417 establishments
elsewhere reported by the Census.
c/ Obtained by subtracting the figures for "old" establishments, in
1933, from the total in business in 1929.
Principal Competitors
The principal groups whose products compete with the products handled
by this Trade are producers of the various materials in their primary state
— suoh as railroads and other large producers of waste materials — who sell
their waste direct to reclaiming mills and smelters.
Principal Products Used by Other Industries
All of the products handled by this Trade are used by other industries
in the preparation, manufacture, production, or marketing of various products.
Principal Customers
Some of the principal users of the products of this Trade are:
Blast furnaces
Metal smelters
Paper mills
8793
-12-
Woolen mills
Waste and cotton shoddy mills
Mattress and stuffing manufacturers
Eag rug mills
Rubber mills and reclaimers
Cotton buff manufacturers
879.r
-13-
Ohapter II
LABOii statistics
Total Number of Employees
It is stated in the "Report to the President" on this Code that in 1929
the Trade employed 180,000 workers.
The 1929 Census reported the average number of full and part-tine enploy-
ees in all types of establishments as 32,277 and, in 1933, the figure was
15,501. 1/ The Census figure for 1929 is thus much loner than the total as
reported to the President. This is due in part, no doubt, to differences in
coverage, but also to the fact that the President's report figure is an esti-
raat e .
Average Number of Employees by principal States
In the absence of complete data by states on the total number of employees
in the Trade, data are presented in Table VIII, below, for wholesalers proper
in the six states having the largest sales. In 1929, these states accounted
for about 50 per cent of the total employees reported by wholesalers proper.
By 1933 other states appear to have gained relatively since the six leading
states accounted for only 46 per cent of the total, but such a statement can
not be made definite because the 1933 data do not include part-time employees
as do the 1929 data.
TABLE VIII
Average Number of Employees S/ of Wholesalers Proper,
by Six Principal States, 1929 and 1933
1929
1933
State
Number
Per Cent
of Total
Number
Per Cent
of Total
U. S. Total 21,679
California 1,062
Illinois 1,669
Massachusetts 1,091
New York 2,007
Ohio 2,4:5
Pe nn syl van i a 2 , 444
All Others 10,981
100.0
4.9
7.7
5.0
S . '■'>
11.2
11.3
50.6
12,683
785
882
671
906
1,391
1,133
6,759
100.0
6.3
7.0
5.4
7.2
11.1
9.0
54.0
Source: Census of Wholesale Distribution, 1929, U. S. Summary and State re-
ports, Table 2; and Census of American Business, 1933, Wholesale
Distribution, U. S. Summary and State reports, Table 2B. The 1933
data do not include establishments with annual sales of less than
$1,000.
a/ Pigures include both full and part-time employees in 1929 and full-
tine only in 1933.
1/ Total of full and part-time obtained by adding figures for these two
groups as reported in the preliminary Census release, dated November, 30,
1934, for the Wholesale Trade for 1933.
8793
-14-
Avo r. .re Tumber of Employees b"r Chief Divisions of the Wholesale Trade, by
principal States
The different divisions of the Trace are not equally important within
these si:: states. As data for wholesalers proper (Table IX, below) indicate,
a given state nay account for a large proportion of the total employment in
one line but only a small proportion in another. Thus, in 1929, emplojrees of
wholesalers proper in Pennsylvania and also in Ohio each constituted more than
15 per cent of total employment in iron and steel scran, ~-"-\i ' nly about 7 r:..\'c
of employment in waste ruboer, rags, and paper. In this latter Division, New
York and Massachusetts ^ere the leading states, accounting together for nearly
30 per cent of the total reported for this group.
TABLE IX
Average Number of Employees a/ of Wholesalers Proper, by
Chief Divisions of the Trade, by Six Principal States, 1929
Divi
sion
Iron &
Steel
Waste Rubber,
All Di-v
Number
isions
Per
Junk ft
Scrao
Scrap
Rags & 3
Number
paper
Number
per
Numbe r
Per
Per
States
Cent
of
Total
Cent
of
Total
i
Cent
of
Total
Cent
of
Total
U. S. Total
21,679
100.0
11,868
100.0
6 , 160
100.0
3,651
100.0
California
1,062
4.9
780
6.6
118
1.9
164
4.5
Illinois
1,669
7.7
565
8.1
434
7.1
270
7.4
Massachusetts
1,091
5.0
405
3.4
285
4.6
401
11.0
New York
2 , 007
9.2
839
7.5
439
7.1
679
18.6
Ohio
2,425
11.2
1,176
9.9
988
16.0
261
7.1
Pennsylvania
2,444
11.3
1,057
8.9
1 , 108
13.0
279
7.6
All Others
10,981
50.7
5,596
55.6
2,788
45.3
1,597
43.3
Sotirce: Census of Wholesale
Distribution, 1929, U.
S. Summary and
State re-
ports, Table 2.
a/ Figures include both full and part-time employees.
Seasonality of Employment
For full-time employment in all establishments, a seasonal variation of
from 82 tier cent of average monthly employment in January to 115 per cent in
September is indicated for 1933 in Table X. The entire last half of the year
showed employment which was above the average for the year for both full and
part-time employees.
8793
-15-
TABLE X
Seasonality of Employment in All Types of Wholesale Establishments, 1933
Week endi
ng
15
nearest Full-tine employees
th
Part-Tine
employees
the
Number
Per Cent of
Average
Number
Per Cent of
Average
January
10,450
82
2,371
84
February
10 , 548
83
2,376
84
Liarch
10,588
84
2,502
89
April
11,121
88
2,577
91
Hay
12,098
95
2,752
98
Juno
13,044
103
2,825
100
July
13,819
109
2,998
106
Augus t
14,485
114
3,172
113
September
14,534
115
3,284
117
October
14,247
112
3,016
107
November
13,676
108
3,039
108
TJe cumber
13,585
107
2,898
103
Ave rage
12,683
100
2,818
100
Source; Census
of
Ame i
•ican Business
, 1S33, Whole ss
ile Distribution, U. S.
Summary, Table 6. The 1953 deta do not include establishments with
annual sales of less than $1,000 or less than $500 in the case of
assemblers and country buyers.
Total Annual Payrolls
Total annual payrolls for both full and part-time employees in the Whole-
sale Trade, as reported by the Census, were $30,426,000 in 1929 and $13,131,000
in 1935. This showing of a decline, which amounts to about 57 per cent, is
probably somewhat exaggerated due tc the fact — already noted — that the 1933
Census canvass did not cover the smaller establishments whereas the 1929 can-
vass did.
Annual Payrolls by Principal States
In the absence of complete breakdowns by states on total payrolls, Table
XI, bolow, has been prepared to present payrolls of wholesalers proper for the
six leading states. These states together accounted for about 55 per cent of
the total payrolls reported by wholesalers proper in both 1929 and 1933,
8793
-16-
IABLE XI
Annual Payrolls §/ of '.Tholesalers Proper, "by Six Principal
States, 1929 and 1933
State
1929 1933
Amount
Per Cent
Amount
Per Cent
(000' s)
of Total
(000' s)
of Total
U. S. Total
$28,732
100.0
$12,825
100.0
California
1,598
5.6
777
6.0
Illinois
2,772
9.6
1,153
9,0
Massachusetts
1,525
5.3
867
6.7
New York
3,186
11.1
1,099
8.6
Ohio
3,474
12.1
1,550
12.1
Pennsylvania
3,481
12.1
1,520
11.9
All Others
12,696
44.2
5,859
45.7
Source: Census of Whole;
sale
Distribut
ion, 1929, U.
S.
Summary
and State re-
ports, Table
U
and
. S.
Census of
American Business, 1933,
Wholesale
Distribution,
Summary and
State reports
, Table 2B. The 1933
data do not include establishments with annual sales of less than
$1,000.
a/ Figures cover both full and -oart-time employees in both years.
Annual Payrolls by Chief Divisions of the Wholesale Trade, by Principal States
Table XII, below, gives payroll data comparable with the employment data
presented above in Teble IX. In general, the states rank about the same as in
the case of employment, but the concentration is somewhat more marked, with the
result that a somewhat smaller proportion of the total is accounted for by
"other states" — a condition which holds true for each of the chief divi-
sions. This indicates higher wage rates in the principal states and/or a
larger proportion of full-time employees.
8793
-17-
TABLE XII
Annual Payrolls BJ of Wholesalers Proper, by Chief Divisions of
the Trade, by Six Principal States, 1929
Division
Iron and
Steel
Waste Rubber
All Divisions
Amount Per
Junk &
Amount
S cra^
Per
Scrap
Hags 8z
Amount
Paoer
Amount
Per
Per
States
(OOOi s)
Cent
of
Total
(000' s)
Cent 1
of
Total
[OOO's)
Cent
of
Total
(OOO's)
Cent
of
Total
U. 3. Total
$28,732
100.0
$14,125
100.0
$10,067
100.0
$4,540
100.0
California
1,598
5.6
1,123
7.9
206
2.1
269
5.9
Illinois
2,772
9.6
1,521
10.8
349
8.4
402
3.8
Massachusetts
1,525
5.3
520
3.7
507
5.0
498
11.0
New York
3,186
11.1
1 , 243
8.8
840
8.3
1,103
24.3
Ohio
3,474
12.1
1,422
10*1
1,772
17.6
280
6.2
Pennsylvania
3,481
12.1
1,218
8.6
1,932
19.2
331
7.3
All Others
12,696
44. 2
7,078
50.1
3,961
39.4
1,657
55.5
Source: Census
of Wholes
ale Dis
tribution
, 1929.
, U. S. Summary
and Sta
te Re-
ports, Table 2.
a/ Figures cover both full and part-time employees
Per Cent which Wages are of I'et Sales
As reported by the Wholesale Census for 1933, the total wages paid in the
Trade were $13,131,000 and total, net sales amounted to $282,602,000, thus in-
dicating that wages are approximately 5 per cent of total net sales.
Hourly Wa-^e Rates
Prom about 200 questionnaires received and analyzed in 1933 by the ERA,
Research and Planning Division, it was found that on June 15, 1933, 80 per cent
of the employees covered by the sample ^ere receiving less than 35 cents per
hour, 50 per cent were receiving less than 25 cents per hour, while rates as
low as 5 cents per hour were reported. U
The Code established minimum rates as follows:
Male labor, per hour
Female labor, per hour
North
3.32.
.2?I
Sputh
$.27*
1/ For further details see ERA, Research and Planning Report, "Scrap Iron,
Nonferrous Scrap Metals and Waste Materials Trade," by F. C. Reich (Jan-
uary 16, 1934), Chapter III.
8793
-18-
Weekl.T Wages
Table XIII "below, gives average weekly ^pges paid by wholesale merchants
for the United States and the si.: leading states in 1933, For the Country as
a whole, weekly average wages in all divisions of the Trade was $17.51 in 1933.
It was somewhat higher than this for the six states listed, viz., $20.37. The
average was highest in Massachusetts and lowest in California.
Among the chief divisions of the Trade, the Iron and Steel Scrap Division
usually — but not always — reported the highest averages. The two excep-
tions --ore in Massachusetts and New York, in which states the highest wages
were reported in the Waste Paper, Rags, and Rubher Division.
The statement was made by a meraber of the Trade that, for four or five
years preceding 1S33 and especially during the depression, employees of retail
waste dealers earned an average of $6 to $8 for working 60 to 65 hours a week,
making 13 cents an hour. 1/
TABLE XIII
Average Weekly Wages Paid by Wholesale Merchants, "by
Chief Divisions of the Trade, by Principal States, 1933
All
Division
State
Iron and
Junk and
Waste Rubber,
Divisions
Steel Scrap
Scrap
Hags, and Paper
U. S. Total
$17.51
$19.45
$16.53
$17.16
Cal if o rnia
18.10
20.98
16.20
20.53
Illinois
22.24
38. IS
18.30
16.13
Massachusetts
23.62
17.74
14.49
28.06
New York
21.47
17.20
20.57
oO • Ok/
Ohio
19.31
25.32
16.52
14.75
Pennsylvania
16.86
22.41
18.56
14.81
Averape, Six States
20.37
24,87
17.7C
20.16
Average, All Other
States
15.06
15,46
15.59
13.89
Source; Computed from the average number of full-time employees and the
annual full-tine payrolls, as reported in, or derived from, the
Census of American Business, 1953, Wholesale Distribution, U. S.
Summary and State reports, Table 2B.
The 1933 data do not include establishments having annual sales
of less than $1,000.
1/ Hearing on Scrap Iron, Honfcrrous Scrap Lietals and Waste Materials
Industry, November 22, 1933, p„ 25.4 of transcript.
8793
-19-
Averc-re Hours Worked ner 7eek
Table XIV, below, based upon data obtained from answers to questionnaires
as received in 1953 by HRA, Research and planning; Division, indicates that
average weekly hours in the group covered in June, 1929, were 51.1 for men and
46.5 for women who were classed as warehouse and yard employees. Office em-
ployees worked a shorter week, the men here also putting in longer hours than
the iTonen. In June, 1933, the average for both sexes in both groups had
fallen off slightly and by October of the sarue year hours had been further re-
duced under the President's Reemployment Agreement — particularly for the
warehouse and yard group. The averages for this group then stood at 38.5 for
men and 37.9 for women.
TABLE XIV
Average Hours Worked per week, by Sex, for Two Groups
of Employees, for Selected Dates, 1929 and 1933 a/
Week Including
Average Eours Worked
Warehouse Yard Employees Office Employees
June 15, 1929
Male
Female
51.1
46.5
42.9
39.0
June 15, 1933
Male
Female
49.6
44.7
39.8
38.6
October 15, 1933
Male
Female
38.5
37.9
37.1
35.0
Source: ERA, Research and Planning Report, "Scrap Iron, Nonferrous Scrap
petals and Waste Materials Trade," by F. C. Reich (January 16,
1934), Chapter II, Table I.
a/ The number of reporting establishments ranged from 129 in June,
1933, to 166 in October, 1933. The average of hours worked was ob-
tained by dividing total man-hours reported by the number of employ-
ees.
Table XV, below, classifies the warehouse and yard employees covered
by the Research and Planning Division sample by the number of hours worked in
the week including June 15, 1933. Persons in the classification having the
largest number of workers, or 24 per cent of the total, were reported to be
working 45.1 to 50 hours, The data show that nearly half the total workers
covered were at this time working more than 50 hoiirs per week, and more than
80 per cent were working more than 40 hours, the maximum prescribed, with ex-
ceptions, by the Code.
8793
-: -
TABLE XV
Wr.rehou.se and Yard Employees Classified According to
the Number of Hours Worked in the Week Including
June 15, 1933 a/
Hours Worked
Number of Employees
Per Cent
of Total
Cumulative
Per Cent
20 or under
20.1 to 25
25.1 to 30
30.1 to 35
35.1 to 40
40.1 to 45
45.1 to 50
50.1 to 55
55.1 to 60
Over cO
46
28
27
36
123
199
575
275
306
138
2.9
2.9
1.8
4.7
1.7
6.4
2.3
8.7
7.8
16.5
12.6
29.1
23.7
52.8
17.4
70.2
19.3
89.5
10,: 6
100.0
To tal
1,533
100.0
1C0.0
Source; ERA, Research and PI tinning Report, "Scrap Iron, Nonferrous Scrap
Metals and Waste Materials Trade," "by P. C. Reich (January 16, 1934),
Chapter II, Table II.
The number of reporting establishments was 160.
8793
-21-
Chapter HI
MATERIALS: RAW AND SEMI-PROCESSED
Principal Materials Handled "by the Trade
The principal materials handled "by this Trade are waste metals,
textiles, rubber, and paper. In addition, a miscellaneous assortment of
waste materials is handled "by the Trade.
Areas of Production
TTaste materials are produced in every state; as suggested by the
statistics on sales for the Trade, production is, however, considerably
concentrated in industrial centers because of the waste products of
factories and mills.
Imports
Value. - Total imports of waste materials declined from a value of
$41,745,000 in 1929 to $4,500,000 in 1932, but by 1934 had recovered to
$10,801,000, as shown in Table XVI, below. The extent of the decline and
recovery in each of the three chief groups was of roughly similar propor-
tions, except in the case of scrap iron and steel where the changes were
sharper.
Volume. - The total volume of imports, as also given in Table XVI,
below, for the same years, showed a much more moderate decline and a
somewhat less pronounced recovery, with the situation for the various
groups similar to that noted just above under value of imports.
Machinery and Equipment
The equipment used in this Trade consists chiefly of trucks, balers,
metal cutters and cranes.
8793
-22-
TABLE XVI
Volume and Value of Imports, by Principal Groups, 1929-1934
( In thousands)
Item
Grou.
AH Scrap Iron Fon-Ferrous Other
Groups and Steel Scrap 1 etals Commodities
1929
1930
1931
1932
1933
1934
Volume
Value
(pounds)
983,202
$41,745
201,600
$1,467
i
Volume
Value
(pounds)
472,803
$20,214
60,480
$395
Volume
Value
(pounds)
271,519
$8,460
35,840
$118
*
Volume
Value
(pounds)
209,675
$4,532
22,400
$59
Volume
Value
(pounds)
437,399
$10,074
127,680
$438
Volume
Value
(pounds)
361,838
$10 , eoi
98,560
$358
79,391
$12,313
39 , 562
$5,831
23,347
$2,864
13,139
$1,427
20,548
$3,215
19,105
$3,578
702,211
$27,965
372,761
$13,988
212,332
$5,478
174,136
$3,046
289,171
$6,421
244,173
$6,855
Source: Foreign Commerce and Navigation of the United States, 1929, 1530,
1951; and Monthly Summary of Foreign Commerce in the United States,
1932, 1933, and 1954.
8793
-23-
Chapter IV
PRODUCTIOIT AIT! DI STBI3UTI0II
Value of Products Solo, in 5ach State
The amount of net salss of wholesalers proper in the si:: principal
states is shown in Table XVTi, below, for 1929 and 1933. It is a natter of
interest that the proportion of the nation's waste sold in each of the si:c
largest producing states declined materially between 1929 and 1933. The
proportion of the national total accounted for by these six states was about
63 per cent in 1929 but only 35. 5 per cent in 1933, This indicates that
sales of waste fell off more rapidly in the industrial states than in the
country as a whole during these years.
TA3LE XVII
llet Sales of Wholesalers Proper, by Si:-: Principal States,
1929 and 1933
State
1929
Amount
(000's)
Per Cent
of Total
193:
Amount
(000's)
Per Cent
of Total
U. S. Total
California
Illinois
Mas sachus et t s
Hew York
Ohio
Pennsylvania
All Others
$474,.
:Sa
100.0
19,635
4.1
44, 597
9.4
22,092
4.7
62,239
13.1
80,752
17.0
70, 205
14.8
174, 933
36.9
$272,173
100.0
6,971
2.5
18,459
6.8
8,860
3.3
16,947
6.2
28,258
10.4
19,794
7.3
172,384
oo.D
Source:
Census of Wholesale Distribution, 1929. U. S. Sur.ir.iary and State
reports, Table 2; and Census of American Business. 1953. Wholesale
Distribution, U. S. Summary and State reports, Table 2B. The 1933
data do not include establishments with annual sales of less than
$1,000.
IIet Sales by Chief Divisions of the Wholesale Trade, by Principal States
llet seJ.es of wholesalers proper are given for the chief divisions of the
Trade for 1929 in Table XVIII, below. Striking features of this table are
found in the facts that one-third of the nation's sales of waste rubber, rags
and paper are made in Hew York State; that Ohio and Pennsylvania together
supplied 47,1 per cent of the nation's sales of Iron and Steel Scrap; and that
Hew York, Ohio, and Illinois accounted for nearly 35 per cent of total sales
of junk and scrap.
8793
-24-
TABLE XVIII
ITet Sales of Wholesalers Proper, by Chief Divisions of the Trade,
by Six Principal States, 1929
All Divis:
Ions
Di\
rision
Junk & Scrap
Iron & Steel
Waste
Rubber,
State
Scrao
Hags £
Amount
: P
Pe
aoer
Amount
Per Cent
AmoTuit Per Cent
Amount
Per Cent
r Cent
( OOO's)
of
Total
(000's) oi
' Total
(OOO'-s)
of Total
(000's)
of
Total
U.S.
Total
3474,453
100.0
$213,703
100.0
$207,759
100.0
$52,911
100.0
Calif.
19,636
4.1
13,251
6. 2
9.,S95
1.3
3,690
7.0
111.
44,597
9.4
23,636
11.0
16,402
7.9
4,559
8.6
I.lass.
*~>£-> y J *s (C
4.7
10,334
5.1
7,421
3.6
3,357
7.5
H. T.
62,239
13.1
25, 340
11.9
19,373
9.3
17,526
33.1
Ohio
30,752
17.0
24,901
11.6
52,545
05 7
3,303
6.3
Penna.
70,205
14.3
20,493
9.6
45,265
21.3
4,44-7
3.4
All Othe:
cs
174,932
36.9
95,328
44.6
64,060
30.8
15,544
29.3
Source :
Census of
TTho
lesaie
Distribut
ion, 1929, II. S
. Sunna:r;
' and Sta
t,e
reports, Table 2.
Consumption of T/ast e
ITon-Perrous Scran. - The consumption of nonferrous metals occ-u^s in
about the proportion of 2 to 1 as to -primary and secondary 1/ metals. Table
aIX, oelor, shot's that consumption of secondary metals rose from 51.5 -ier
cent of the total to 57.3 per cent during the period 1951-1933.
1/ It is not IrniOTm -hat percentage of this secondary metal acutally was
Handled by waste material dealers.
3793
TA3LH XIX
The Proportion of Seconda^ iJon-Perrous Scrap, by
Principal Kinds, Consumed or Available for
Co nsump t i on , 1 931-1933
(in per cent)
ii.ina
1331 1932
Total 31.5 36.4 37.3
Copper a/ 36.7 4-1.1 43.4
Lead b/ 41.3 49.6 51.1
Zinc (slab) b/ 10.0 8.6 13.0
Aluminum sJ 24.3 50.5 41.5
Tin d/ 21.9 27.1 24.8
Source: Bureau of i.Iines, I liberals Yearbook 1935-54.
a/ Available for domestic consumption,
b/ Do nest ic consumption.
cj Production plus imports, less e:roorts. Stocks not available
for calculation of actual consumption.
d/ Apparent consumption. Stocks not available for calculation
of actual consumption,
Reclained Rubber. - The data given in Table XX, belcrc, on consumption
of new and reclained l/ rubber over a series of years indicate that, in
general, the relative ■■jroportion of reclained rubber consumed rises as the
price of crude rubber rises, and vice versa. The relative proportion of
reclained rubber declined 45 per cent from 1929 to 1955, uhile the price of
crude rubber declined about 70 per cent, TTith the increase in crude rubber
price the consumption of reclained rubber has been stimulated.
1/ The proportion of this rubber actually handled by v/aste material dealers
is not knoun.
8795
-26-
TABLE XX
Consumption of Total Rubber and of Reclaimed Rubber, and
Wliolesale Price Index of Crude Rubber, 1926-1934
Rubber
Consumption
Wholesale Price
Total
Reclaimed
Index of Crude
Year
Amount
Per Cent
Rubber
(Long tons)
(Long tons)
of Total
(1926 = 100)
1926
530 , 500
164,500
31.0
100.0
1927
552,500
189,500
33.7
77.9
1928
660,000
223,000
33.3
46.4
1029
634,400
217,000
31.7
42.3
1930
529 , 500
153,500
29.0
24.5
1931
473,000
123,000
26.0
12.8
1932
409 , 500
77,500
13.9
7.3
1933
486,000 a/
85,000 a/
17.5 a/
12.2
1934
554,078 a/
100,355 a/
18.2 a/
26.5
Source: Rubber consumption data, 1926-1932, from Bureau of Foreign and
Domestic Commerce, Rubber Division, Special Circular, No. 3420, p.l;
price data as published in Bureau of Labor Statistics, Wholesale
Prices bulletins.
a/ Estimated.
Iron and Steel Scrap - The National Association of Waste Material
Dealers has contributed the following statement and data:
"According to the 1929 Census of Lenuf actuje ;?. , the total
scrap iron and scrap steel consumed in the United States in 1929 (exclusive
of that used by the manufacturers of motor vehicle-; and railroad repair
shops) totaled" 39, 127,848 gross tons valued at $540,662,524. Of this amount
13,988,393 gross tons were produced and reworked in tiie same steel and roll-
ing mills; 953,170 gross tons were produced and t ransf erred to other steel
and rolling mills under the same ownership; 1,871,891 gross tons were trans-
ferred to steel and rolling mills of different ownership; and it was esti-
mated at a conference with the Census Bureau that an additional 5,673,176
gross tons of the total consumption by other industries did not pass through
the hands of scrap iron and steel dealers. This leaves a total of 16,636,212
gross tons of scra-o iron and steel which passed through the hands of waste
material dealers.
"The average price of scrap iron and steel for 1929, as reported in the
Survey of Current Business (published by the Department of Commerce) was
$14.79 per gross ton. At this price the total volume of scrap iron and steel
handled by the waste material dealers in 1929 was valued at $246,049,575.
"Assuming that the amount of scrap iron and steel consumed in the
steel industry (in the absence of actual figures such as are available for
1929) followed the same trend as the production of iron and steel as reported
8793
-27-
in the Federal Reserve Bulletin, and using the average price per gross
ton as reported in the Survey of Current Business, the following table shows
the value of the scrap iron and steel consumed which passed through the
hands of waste material dealers from 1929 through 1932.
1929 1950 1931 1932
Computed value of
scrap iron and steel
passing through hands
of waste material
dealers (dollars) 246,049,575 145,072,888 67,121,998 24,794,356"
Distribution
General.- The small junk dealer is the first stopping place for the
peddler or collector. It is here that the peddler unloads all the merchan-
dise that he has accumulated during the day. From the peddler's wagon, the
merchandise is placed in boxes, weighed, and taken to bins where some grad-
ing and sorting is done. It is then baled and is ready for delivery to the
wholesaler who, in turn, sells it to the mill. These processes cost the
junk dealer from $3.50 to $4.00 ner ton for fairly clean waste paper. Costs
for sorting other materials are not known.
The following flow charts (Charts I - 1, 2, 3, 4, and 5) show graph-
ically the steps in the production and distribution of waste materials for
each of five chief divisions of the Trade.
Recent Development of Direct Dealing. - A type of "direct dealing"
competition which has increased since and during the course of the depres-
sion, and which serves to reduce the volume passing through the hands of
established dealers, is that offered by the one-man trucking operator.
This individual picks up waste material from the producers or the small
"mixed" dealer, and trucks it to the yards of the industrial consumer,
where it is disposed of, in many cases, for little more than cost. This
type of operator has served to make the problem of control over prices,
wages, or hours an almost impossible one in the Trade.
Another direct result of the depression has been the increase of
salvaging operations by large producers and consumers of waste material.
For example, in an attempt to reduce costs, railroads have established
salvage departments which collect for re-use such xvaste as wiping cloths
and the rags used as journal box packing with a consequent increase in
the amount of re-used material. This has naturally resulted in a decrease
in their purchases of this type of material from established dealers.
Another instance of a slightly different sort is the case of textile mills
which sort and grade their own waste and sell it direct to manufacturers
of re-work products such as rag- rug concerns and mattress manufacturers,
"Direct dealing" appears in another form in the Waste Paper Trade —
namely, that of the mill-owned or controlled waste paper dealer.
8793
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Exports
Value. - As shown in Table XXI, below, the total value of export
shipments of waste materials, from 1929 to 1932, declined over 70 per cent.
However, in 1934 approximately the same value was received from waste ma-
terials exported as was received in 1929. Most of this recovery was
accounted for "by the enormous increase in the volume of scrap iron and
steel exported from 1932 to 1934.
Volume. - The total volume of exports declined about 50 per cent
from 1929 to 1932, but the 1934 total almost tripled the 1929 figures. The
extent of the decline and recovery varied considerably from one group to
another as indicated in the following table. For example, the volume of
exports in the scrap iron and steel group declined more than 50 per cent and
then came bach to a point more than three times its 1929 total, while non-
ferrous scrap metals declined only about 25 per cent and then rose to a
point just above the 1929 level,
TABLE XXI
Volume and Value of Exports, by Principal Groups, 1929-1934
(in thousands)
All
Group
Scran Iron
Non-
-Ferrous
Other
Item
Group s
& Steel
Scrap Metals
Commodities
1929
Volume
Value
(pounds)
1,595,408
$32,987
1,247,680
$7,748
91,982
$11,692
255,746
$13,547
1930
Volume
Value
(pounds)
1,067,801
$21,976
804,160
$5,562
79,720
$7,985
183,921
$8,429
1931
Volume
Value
(pounds)
575,715
$14,887
304,640
$1,957
91,872
$7,149
179,203
$5,781
1932
Volume
Value
(pounds)
763,127
$9,657
508,480
$1,859
68 , 640
$3,589
186,007
$4,209
1933
Volume
Value
(pounds)
1,999,772
$14,896
1,749,440
$6,365
64,647
$3,554
185,685
$4,477
1934
Volume
Value
(pounds)
4,443,607
$32,465
4,110,400
$19,214
93,636
$6,256
239,571
$6,995
Source: Foreign Commerce and Navigation of the United States,
1929, 1930,
a:
id 1931; and
tates, 1932,
Monthly Summary of Foreign
Commerce of
the United
S
1933, and
1934.
8793
-34-
C-eneral. - The following excerpts were taken from an Article "by
R. L. Ha.rd.ing, Chief of the Iron and Steel Division of the Department of
Commerce, in the Waste Trade Journal, March 30, 1935.
"Exports of scrap iron and steel increased rapidly in 1933.
From 1915 to 1S27 exports amounted to one and one-third million tons.
For the seven years since 1937 exports amounted to 4,400,000 tons and
for the year 1934 exports amounted to 1,835,000 tons.
"In relation to our total production of scrap, all except recent
export totals seem surprisingly small. If scrap which the steel mills
create and use themselves is included, our total exports since 1914
are probably less than 1.7 per cent of all production. From 1928 to
1934 the amount leaving the country was about 3.2 per cent of the total
produced, and in 1934 it was 12.3 of that year's prodiiction. The ex-
ports for 1934 represent about 18 per cent of total scrap iron and
steel collected and sold by the scrap dealers of the country.
"In 1934 shipments to Japan constituted 64 per cent of total
exports. Italy, Great Britain and Poland took the bulk of the remainder.
It has been notable that through the years the large increases in scrap
exports have coincided with periods of low domestic prices.
"As a rule scrap does not move far by rail; freight charges
limit the distances over which it can be economically exported in corqpe-
tition with other sources of supply. The chief sources of supply, of
course, are the large industrial and manufacturing centers of the
country. The principal points of shipment, therefore, for oxir exports
of scrap are those parts which are adjacent to large industrial and
manufacturing areas and at the same time reasonably remote from the
principal centers of domestic consumption, the steel plants in the
interior of our country. The Atlantic and G-ulf Coast customs districts
took care of about 84 ner cent of the entire exports. 27 per cent of
the total exports were made from New York."
Advertising
Advertising in this Trade is largely confined to trade journals.
8793
-35-
Chapter V
TEADE PRACTICES
Unfair Trade practices
Various unfair trade practices were complained of "by the members of this
Trade both before the adoption of the Code and during its operation. The
most important of these are: (1) the control of prices "by buyers; (2) mis-
representation of products by some members of the Trade; and (3) unjust claims
and deductions made by some purchasers.
It is alleged that the paper board mills establish the prices for their
product by agreement between themselves. The widening margin between prices
for paper board and for waste paper is cited in support of this contention.
Chart II gives the trend of prices for these two commodities over a number
of years.
The same charge is made against the consumers of scrap iron and steel
and of non-ferrous scrap metals.
Another unfair practice is said to be the inclusion in the bale of
foreign matter to add weight. The charge is also made that bribery and
corruption are used by some dealers.
It is charged that some buyers take advantage of the Trade by making
unreasonable demands for deductions with the threat of making no more pur-
chases unless their demands are accepted.
8793.
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-37-
Chapter VI
THE IUDUSTHY - GEHERAL INF0F1IA.TI0N
General Characteristics
Pree and unrestricted competition has for years characterized the
Waste I.iaterial Trade, numerous factors have contributed to this situation,
chief of which is the widely scattered nature of the Trade, and its failure
until recent years to recognize itself as an integrated Trade with common
problems, the solution of which were possible only through cooperative
action within and between the various divisions of which the Trade is com-
posed.
This is exemplified by the fact tlia.t, with the exception of the last
decade, the vo/rious groups operated independently of each other and without
particular regard to their common problems; and even the larger concerns
have been unwilling to provide a basis for effective cooperation within the
Trade by supplying their Association with pertinent trade data. A joicture
of the Trade therefore defends on the meagre information gathered by such
agencies as the Department of Commerce, the Bureau of Labor Statistics, and
the several trade publications dealing with the waste material business.
Outstanding Problems
The history of the Waste Materials Trade is that of a Trade with a
multiplicity of problems, the most difficult of which may be summarized
as follows:
1. Perhaps the most outstanding problem of the Trade
in recent years is the fact that it operates in a
buyers' market. Waste materials exist in abundance.
However, these materials have no value until they
are gathered, sorted, bundled, treated, or other-
wise made ready for the market.
2. The impossibility of obtaining cooperative or
concerted action by the Trade as a whole.
3. The increase in "direct dealing" within the
Trade, which is of two different kinds: first,
the one-man trucker who works unlimited hours
and -oays little or no wages and who picks up
material from the smaller dealer and lays it
down at the door of the consumer for what it
will bring; second, the new type commission
merchant who arranges sales by large producers
of scrap direct to consumers.
4. The alleged fixing of prices for scrap by the
consuming industries at low levels.
Favorable Developments
A favorable development of the last few years is the large increase
in the exoort of scrap iron and steel. In 1934, a total of 4,110,000,000
pounds of scrap iron and steel were exported, which is eight times the
8793
-38-
amount exported in 1932, and t^entjr times the amount exported in 1931.
Dealers in the interior have failed to profit from foreign sales, hovrever,
as freight rates prevented them from getting reasonahle prices at ports.
(See Table XXI above.)
Effect of the Code on the Trade
Data on the effect of the Code on this Trade are not available.
However, the following describes to some extent its effect on the Waste
Paper Division of the Trade:
Eo.stern prices cf the principal product, Ho. 1 mixed waste paper, were
$10.00 a ton in 1S29; $4.00 a ton in May, 1933, increasing to $15.00 per ton
on June 15; finally reaching $16.00 per ton in July; and by December, 1933,
falling to $5.00 per ton. After further ups and downs in 1934, prices fell
in 1935 to record lows — even to $1.00 per ton. An index of waste paper
prices in Hew York and Chicago combined is presented above in Chart II, from
which it may be seen that considerable improvement has occurred in recent
months.
An emergency in the Waste Paper Trade was declared by ERA and prices
were fixed August 21, 1934 to be effective for ninety (90) days. The
emergency period was indefinitely extended by an Order issued on Nobember 19,
1934. The emergency was declared terminated December 28, 1934.
In the opinion of the 1JPA Economic adviser for this Code, it was
evident, that: (l) price fixing had afforded no relief to the Trade; (2) it
had induced the collection of stocks of paper beyond the consumption capacity
of the consuming mills; (3) the provisions of the price-fixing order were
consistently violated by the Trade.
Prices fixed in the original Order were $5.50 a ton for Ho. 1 mixed
paper, P.O.B., plant, and $8.50 a ton for folded newspapers, F.O.B., plant.
On Page 9, the Order was modified to make the price F.O.B., packer's plant,
and for sales of dealers to dealers, the trices were fixed at $6.00 and $7.50
a ton, respectively.
Trade Associations
The national Association of Waste material Dealers, Inc., is the one
association representative of the entire Trade, though there are a number of
smaller associations representing various branches of the Trade. It is
national in scope, and is estimated that its members are responsible for 75
per cent by value of waste materials handled by the Trade. This Association,
organized in 1913, was for many years the only national organization of the
Trade. As of August 1, 1933, it had 400 members. It is organized with the
following divisions: 1/
1/ Special report on Representation of national Association of Waste
Material Dealers, Incoroorated, prepared by ERA, Research and
Planning Division, llovember 21, 1933.
87S3
-39-
Scrap Rubber Division
Cotton Waste Division
Scrap Iron Division
Woolen Eag Division
Waste Paper Institute
Association Rag Industries
Secondary Metal Institute
National Wiping Cloth Standardization Association
Otiier organizations serving various divisions of the Trade are:
Institute of Scrap Iron and Steel, New York City
Aluminum Research Association, Chicago
lion-Ferrous Ingot Metals Institute, Chicago
national Scrap Metal Dealers Association, New York City
Sanitary Institute, Chicago
National Association of Waste Material Producers, New York City
Wool Stock Council, New York City
American Paper Mill Suppliers Institute, New York
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