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Full text of "Evidence study"

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 th e 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 Distribu ti on. 1929 , U. S. Summary, and State 
reports, Table 2; and Census of American Business. 1933, Whole- 
sale Distribution . U. S. Summary, and State reports, T a ble 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 o f 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 $444,000 s 000 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 Ra gs c an d 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 f 


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, emploj r ees 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 Sale s 

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. 

Area s 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\ 


r ision 










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 Scra p - 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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-33- 

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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