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9999 06317 368 4 office of national recovery administration 

DIVISION of review 



some aspects of the WOMEN'S APPAREL INDUSTRY 

By 

Sherman Trowbridge 



WORK MATERIALS NO. 44 



INDUSTRY STUDIES SECTION 
March. 1936 



OFFICE OF NATIONAL 'EC OVERT ADMINISTRATION 
DIVISION OF REVIEW 



SOI IE ASPECTS OF THE yOMEN'S AJPP.tREL INDUSTRY 



3y 
Sherman TroTrbridge 



INDUSTRY STUDIES SECTION 
i larch, 1936 



9714 



POIIEITOHD 

This stud;;r on "Some Aspects of the TToMen's Apparel Industry" nas 
written hy Mr, Sherman Trorrhridge, of the Industry Studies Section, 
I;Ir. II. D. Vincent in chargea 

Tlie author wishes aclaaonledgenent riade of the assistarxce of Mr. Alex 
Thomson, whose work as former Administration Ilember on the Dress, Cotton 
Garment, and Coat and Suit Code Authorities provided a valuable oack- 
ground upon which to build the analyses of the code overlapping con- 
troversy and of the problem of delegated power which, respectively, 
form Parts 3 and C of the stud^'-. Aclaiovdedgement is also due the in- 
dividuals and organizations who have contributed valuable material to 
this study. The statistical data submitted by the International 
Association of Garment manufacturers and by the iJational Coat and Suit 
Industry Recovery Board deserve s-oecial mention. It is unfortunate that 
the restricted scope of the study, diie to reductions of personnel, pre- 
vented trea,tment of certain topics to which wich of this material applies, 
and full development of other topics. The valu.e of the material, and the 
cooperation of those responsible for its comjDilation, are not diminished 
or measured by the extent of its use in this study. 

At the back of this re;->ort will be found a brief stptement of the 
studies undertaken by the Division of Review. 



L. C. MARSHALL 
Director, Division of Review 



March 5, 1935 



9714 



IIA^LE OF CONTENTS 

Page 
rOEEWOED i 

SUMMARY TO PART A ix 

SUMMARY TO PART B xiv 

SUMMARY TO PART G xvii 

PART A - THE CONTRACT SYSTEM 

CHAPTER I. DESCRIPTION AND HISTORY OF THE 

DEVELOPMENT OF THE CONTRACT SYSTEM 

General Characteristics of the Women's 
Apparel Industry 1 



Description of the Contract Method of 
Production. Comparison with Other 
Industries and tj^pical contractor-joblDer 
relationship. Sut-Manufacturing. Various 
Relationships. The Corporation Shop. 
The Trading Relationship and the Contrac- 
tors' Wea];nesses 



Origin of the Contract System. Early Days 
of the Industry. 1859 to 1879. E:cpansion 
of Business and Immigration 1880 to 1890. 
Backgro-und of the Immigrants. The Sweat 
Shop. Exploitation of La"bor. Extent of 
Contract System in 1893 5 

Growth of Unionism 7 

First Attempts at Regulation of Contractor- 
Jother Relationships, Development of 
Suh-Manuf acturing V 

The First Proposals for Comprehensive 
Program of Reg-ulation 8 

The TJar Period 9 

The Post-T7ar Boom 9 



9714 • -ii- 



Page 
Depression of 1921 Iv"' 

Negotiations of 1923 - 1924 11 

The First ProDosal for Limitation of 
Contractors 11 

The Governor's Advisory Conmission. 
Preliminary PLeconmendations of the 
Commission. The Dickinson-JColchin 
Investigation. Pinal P.ecomraenda- 
tions. Basis of Commission's 
Recommendations 11 

The 1926 - 1929 Period. Mediation by 
G-overnor Roosevelt and Lieut. -Governor 
Lehman. The Pact-Pinding Commission 14 

Appraisal of Pactors Responsible for 
Continued Existence and Growth of the 
Contract System. T7hy Have Economic 
Processes Pailed to Mai:e Corrections? 
The Factor of Continued Growth. Racial 
Pactors. "Union Restrictions". Week- 
Work vs. Piece-TJork. The Jobbers' Re- 
sponsibility. The Necessity for Flexi- 
bility. Dominance of Herchandising vs. 
Manufacturing Considerations. The 
Competitive Advantage 17 

Economic Wastes 21 



CHAPTER II. REGUIATIOH OF COOTF^iCTOR-JOBBER 
RELATIONSHIPS UNDER NRA 

The Coat and Suit Code. The Bargain, - 
Piece-Work for Limitation of Contractors. 
The Interjoretation of Article VII re 
Limitation of Contractors. Proposed 
Modifications. The Legal Status of 
Article VII on Limitation. Proposal 
of the Contractors to Abolish Limita- 
tion 22 

The Dress Code. Difficulties in Obtain- 
ing Agreement on Code. Approval of Code. 
Provision for Regulation of Contractor- 
Jobber Relationships. Comparison With 
Coat and Suit Provisions. The Stoppage 



9714 -iii- 



of April, 19r^4, and Appointment of 

Commission. Eecomrjiendations of Page 

Special Commission 26 

Basic Elements of the Program of Regu- 
lation. General Attitudes of the 
Interested Parties 33 

Limitation of Contractors. The JoFoers' 
Point of View. l-Tecessit]^ for Flexibility. 
Potential A^buses. Legality. 
Limitation Unnecessary. The Contractors' 
Opportunities. Mortality Cannot "be Blomed 
on Auction System. The View- 
point of the Proponents 35 

Price Floors 38 

The Unit System 39 

Settlement of Prices on Premises of 
Jother 41 

Equitable Distribution of T7ork 41 



CHAPTER III. APPRAISAL 



Appraisal of Developments Under IIEA. 
Comparison of Accomtjlishment Under 
the Codes, - Coat and Su.it - Dress, 
Supplementary Functions of KRA 43 

Difficulties Facing the Problem of 
Regulation. The Trading Atmosphere. 
Trial and Frror. Ilecessity for Effec- 
tive Adi'/iini strati on and Popular 
Acceptance 45 



Regulation Directed at Basic Sources. 
Style Regulation. Seasonality. Control 
Through Improving Technique of Produ.ction 
and Distrihution 



Broad Aspects of the Problem of Regulation ... 



9714 -iv- 



APPENDIX TO PAET A 

Number of Shops and Kunber of Wor'rers 
Classified by Type of '^stablishraent. 
Table No. I , 51 

Dress Industry - Number of Shops a.nd 
Number of Workers Classified According 
to Tj^e of Establishment - 1932 and 1935. 
Table No. II 52-53 

Coat and Suit Industry - Number of Shops 
Classified According to Type of "Estab- 
lishment. 
Table No. Ill 54 

Coat and Suit Industry - Average and 
Maximum Number of 7orkers - Number of 
Man Hours, Payroll Dollars and 
Production Units, Classified According 
to Tirpe of Establishment. 
Table No. IV rr 



Size of Shops - Dress and 7aist 
Ind-ustry, 1925. Table Vo. Y 56-57 

Comparisons - Average Number of Worhers, 
Inside and Outside Shops. Tabic No. VI 58 

Classification of Shops According to 
Number of TJorhers, United States 
Mar'-et Area - Coat and Suit Industry. 
Table No. VII [ 59 _ 50 



Seasonality in TTomen's Aoparel Industry 
Compared to Seasonality in Other 
Industries. 
Table No. VIII. Table No. IX 61-62 

Seasonality in Coat and Suit Industry.... 63 

Dress Industry - Seasonal Variations in 
Employment and Payrolls in New York 
State - 1929-1932. Table No. X. 64 

Seasonal Variations in EraplojTnent - 
Women's Apparel Industry. 
Table No. XI. Table No. XII 65-66 

Comparisons of Wages Betv/een Inside and 
Outside Shops - Women's Axnmrel Industry. 
Table No. XIII V. 68 



9714 



Comparisons of EraplojTiient Between Page 

Inside and Outside Shops 67 

Comparisons of Earnings and Employment 
in Contract and Inside Shops - Dress 
Industry. Table No. XIV. Tahle No. XV. ..69-71-72 

Comparison Based on Coat and Suit Code 
Authority Data. 
Table No. XVI 73-75 

Mortality. Table No. XVII. 
Table No. XVIII. Table No. XIX. 
Table No. XX 76-77-78-79 

Comparison of PrinciiDa-l Contractor- 
Jobber Provisions - Tomen's Apparel 
Industry. Table ITo. XXI 80 

Nuiiber of Establishments, Value of 
Product, Number of 'Jage Earners, 
Average Annual V»'age, 1859 - 1933. 
Table No . XXII 81 

Principal Tre.de Associations of the 
Dress and the Coat and Suit Industries, 
Together with Industry Elements of Tllaich 
Membership is Chiefly Composed 82 

Advertisement, 'Joraen's Tear Daily, 
April 18, 1934, Inserted by 
United Association 83 

Extracts from Notice of Hearing, No. 20-M, 
February 2, 1955, Dress Industry. 
Schedule A, Proposed Amendments 87 

Schedule B, Proposed Pules and 
Pegulat ions 88 



PAST B - OVEELAPPIN& BETWEEN TIIE DRESS AND THE COTTON GAEIvIENT 
CODES. 

Importaiace of the Dress - Cotton Garment 
Controversjr 90 

Roots of the Problem 90 



9714 



Page 
Crystallization of Issues Under NEA. 91 

The Basis of Code Differentials 91 

Table No. XXIII. Dress Industry. 

Average Ueelirly Hours, 1933 and 1934 93 

The Basis of Industry Grour)ing Under 
the Codes . . .' 94 

Distinctions Between the "Hegular" 
Dress Industry and the T7ash Dress 
Industry , 95 

Appraisal of Development g Under NHA. 
The Principle of Product and Price 
Line Definitions. ■Exemptions. The 
Theor;'- of Weighted Averages. Proposed 
Inclusion of Both Industries Under One 
Code. Conclusion, - Solution via Basic, 
Uniform Standards 97 



PART C - DELEGATION OF POWER UNDER THE COAT AND SUIT CODE 

The Established fancies of Self-G-overn- 
ment in the Women's Apparel Industry. 
Geographic Concentration. I'echanism 
of the Established Agencies. The Prin- 
ciple of Solidarity, - The United Front 105 

The T7orl:ing Partnership Between NRA and 
The Established Agencies. Sections 4 
(a) and 7 (b) of the Nlili. Synchroni- 
zation of Agreements and Code 106 

Problems of the Working Partnership. 
Dominance of the New York Element. The 
Penalties of Efficiency. The Partisan 
Atmosphere of Code Authority Hearings. 
The Gorillas. The Implication of the 
Misuse of power 107 

The Charges Against the Coat and Suit 
Code Authority 109 



9714 



Appraisal and Conclusions. "Exoneration 
of the Codp Authority. Indictment of 
the System. Remedy through Limiting pa,<re 
Delegated Power 117 



APPEIIDIX TO PART C 

Statement in Affidavit yon of Benjamin 
Seldin of the Seldin Coat Company, 
New York City 124 

Affidavits of Complainant and 
Code Authority Agents in 
Colonial Kiddie Case 140-144 

Letter of Mack M. Ilussman in Form of 
Complaint Against Deputy Director of 
Boston imA Office. . 145 

Extract .7rom Brief of the Memhers of 
the Hew Jersey Coat and Suit Industry 146 



GEMEEAL APPSKDIX - L'ETEODOLOG-Y AED TIIE FIELD 

EOR PURTKER RESEARCH 148 



9714 



SUM'UBY TO PAl^T A 

.Hh-e^-tiorraal coapetitive pressures in the Women's Apparel Industry, 
casas€<i oy structural v.'er.laiesses and seasonal variations in demand for 
its pr'-»ducts, are aggravated and intensified by mal-adjustraents in the 
mechanism of the contract system employed for a large part of its pro- 
duction. (*) 

The ftmctions of r.holesale distribution are performed l\v tv;o 
principal types of establishment, - "inside" shops or raanufact-arcr s, 
who perform all the operations of production on their own premises, 
and jobbers, v/ho rely upon "outside" shops, contractors or sub-manu- 
factnj-ers, for the .'greater part of their production. The jobbers dif- 
fer from wholesalers in other industries, in that they do not buy fin- 
ished merchandise from the stock of manufacturers, but consign piece 
goods, usually cut into patterns by the jobbers, to the "outside" shops 
to be made into finished garments on a contract basis. Sub-manufac- 
turers differ from contractors primarily in the technical details of 
their relationships with their principals, and in the fact that they 
normally perform the cutting opera.tion, v/hereevS contractors do not, 
"Inside" shops often employ contractors for part of their production, 
and jobbers sometimes own or control one or more "inside" shop units. (**■), 

Work is awarded to "outside" shops on the basis of competitive 
bidding, the "auction system", and the powers of resistance of the 
"outside" shops are insufficient to withstand the pressures brought to 
bear upon them. Destructive competition sJiiong "outside" shops spreads 
throughout the Industry, affecting the welfare of all elements. (***) 

'The growth of the Women's Apparel Industry from the introduction 
of the sewing machine in 184S tn the present day has been 'a matter of 
progressive displacement rf garment making in the home or by seamstresses, 
and normal expansion due to the growth in population and purchasing- 
power in the United States. The contract system originated some time 
during the twenty-year period from 1859 to 1879, ?;hen a few independent 
"outside" shops of various types were organized. 3y 1882 the system 
was a recognized, established part of the Industry, (****^ 

The first major growth of the contract system occurred during 
the decade of 1880 to 1890, when a wide e:^cpansion of general business, 
together with a large influ:<: of Jevfish immigrants from Eastern Europe, 
took place. The background of these immigrants had fitted them for 
the individual, artisan t;-pe of operation, but had not prepatffd them 
for more elaborate forms of industrial endeavor. The "inside" shops 
absorbed a share of the incoming supply of labor, but the rapidly in- 
creasing demands of the market v/ere greater than the productive capa- 
city of the "inside" shops, and the ne\7ly formed "outside" shops found 

(*) See pp. 1 to 2. 

(**) See pp. 2 to 4. 

(***) See VV' 4 to 5. 

(**'*'*) See pp. 5 to '6. 



9714 



a ready market for their services. (*) 

The union movement in ths Industry was placed on a firm tasis 
for the first time in 1900 v/hcn the International Ladies Garment 
Workers Union \'ias issued a charter by the American Federation of 
Labor, The growing strength of the labor movement bore its first 
major fruit in the form of th? Protocol of 1910. (**) 

'The difficulty of contr.-»llin£ "outside" shops led to wa^e and 
labor cost differentials between organieed and unorganized establish- 
ments. Violations of the pr'stocol conditions becaine widespread, and 
the first efforts at regulating contractor-jobber relationships were 
made between 1911 and 1913, The Union was unsuccessful, however, in 
obtaining agreement with the employsrs on their proposals, (***) 

The contract system and its evils continued to grow through 
the war and post-war periods, and by 1924 conditions had becnrac so 
bad that under the threat of a general strike in the Coat and Suit 
Industry, and after failure t'^ negotiate new agreements, Governrr 
Alfred E, Smith of New York, intervened and appointed a special ad- 
visory commission to investigate and make recomi-iendations to the In- 
dustry. A comprehensive study v/as prepared under the commission, and 
its final recommendations v/ere issued in Ma.y, 192'^. The most impor- 
tant of thft commission's recommendations was endorsement ?if the pro- 
posal to require limitation of contractors, or the designation '^f 
specific troups of contractors y/ith whom each jobber was required to 
deal exclusively. (****) 

Between 192fl and lOoG very little was accomplished in the 
stabilization wf relations betv/een contractors and jobbers, due 
largely to temporary disorganisation and decline of strength of the 
Union, In 1929, Governor Franklin D. S«osevelt •t New York intervened 
to prevsnt a threatened strike. New collective agreements were signed, 
but no new developments were recorded in the regulation of contractor- 
jobber relationships, and the issue of week-work remained unsettled, 
Week-vrork had been established by collective agreement since 1919, 
but piecework prevailed as a bootleg method in the Ir.rgc body of un- 
regulated, small "outside" shops. The distressed business conditions 
which followed the collapse of 1929 paved the way for the adoption of 
regulatury prograias under i^IFlA more complete and far-reaching than had 
pr«5viously been attempted. (*****) 

(*T"See p".' (Tt'o"?"^ '^ 
(**; See -q- . ,7 
(***) See pp. 77 to 9 
(****) See pio. '3 U 14 
(*****) See pp. 4 to 17 



9714 



^e continued grov/th f>f the Industry, the ease of estal3lishing 
a small contract shop, and th<5 snail penalties of failure, have pre- 
vented the elimination of the unfit and the concentration of vrork in 
the hands of the strong. A/arious explanations, including the alleged 
amliition of the Jewish Race for economic independence and their will- 
ingness to speculate, union restrictions, and the week-work system, 
have "been advanced to explain the continued existence and growth of 
the contract system, but in the last analysis, its survival has been 
due to certain technical and "business conditions which have found the 
contract method of production peculiarly fitted to the needs of the 
Industry. (*) 

The conditions which woiild appear to be most responsible for the 
survival of the contract system are the necessity for flexibility in 
supplying the rapidly changing demands of style and seasona,lity, the 
dominance of merchandising over manufacturing considerations, and the 
lack of development of the teclinique of production and distribution, 
and, above all, the fact that tinder the contract s'-stem lower costs have 
been obtainable than under the "insiae" shop syste;,i. In spite of the 
competitive advantages of the contract system, its economic wastes out- 
weigh its economic advantages, measured by the sum total of general in- 
dustry v/elfare. The losses caused by destructive competition are aug- 
mented by the wastes due to duplications of effort in the performance 
of the productive processes by a multiplicity of small shops. (**) 

Under the Coat and Suit Code, members of the Industry v/ho em- 
ployed "outside" shops were reouired to designate the contractors ac- 
tually needed, to confine and distribute work couitably among such con- 
tractors, and to pay them amounts sufficient to cover code v/ages plus 
an allowa.nce for the contractors' overhead. This provision was inter- 
preted and administered by the code authority as a requirem-ent for 
strict "limitation of contractors", and both contractors and princi- 
pals v;ere limited to doing business with the concerns allotted by 
designation. (*** ) 

The Dress Code provisions on contractor-Jobber relationships 
differed from the Coat and Suit provisions chiefly in that strict 
limitation \/as not specified or implied. From earliest negotiations 
to the end of the code period, the question of lii'nitation of contract- 
ors v/as the focal point of heated controversy. A special coinmission 
v;as appointed by G-eneral Johnson to investigate and recommend remedial 
measures, and the contractors presented a proposed amendment, after 
failing to obtain approval of their program from the code authority. 
A public hearing v/as held on this proposed amendment on February 27, 
1935. In the following three months before the Schechter decision, 
the Recovery Adir.inistration attempted to compose the differences of 
the parties by mediation, but lacking powers of arbitration, failed 
to accomplish this objective. ('>'*** ) 

(*) s'ee pp.""i7"to""i9. 

(**) See pp. 19 to 21. 

(***) See pp. 22 to 26. 

(=^***) See pp. '26 to 33, 
9714 



During the code period there v/as little controvers'^ over the 
establishment nf price floors, the coui table distrihution of v/ork, 
or the principle of determining prices by scientific estimate, thougti 
there ?/ere practical difficulties in administering certain phases of 
these provisions. The proposal that prices should be settled on the 
premises of the jobber v/as opposed apparently because the jobbers 
feared union domination in price negotiations. Tiic greatest cliff er- 
enccs of o;oinion occu.rred over the form and extent of the limitation 
of contractors adopted under the Coa,t and Suit Code, and proposed as 
an amendment under the Dress Code. The jobbers feared that strict 
limitation vrould place a possibly excessive restriction on their neces- 
sary flexibility and freedom of action, ^hey feared that limitation 
would give rise to abuses, that it ^7as illegal and unnecessary, that 
large contractors could not be kept supplied with work when limited to 
one jobber, and that limitation v/ould not correct the basic evils of 
wealc financial structure and seasonal unemi^loyment. Tlie proponents of 
limitation believed that stringent measures ?/ere necessary to control 
the evil conditions arising from the contract system, and that if there 
were any loopholes in the program, its effectiveness would be nullified. 
They believed that looseness of limitation would permit wholesale dis- 
charge of contractors and would result in subsidiar;"- evils, such as 
kickbacks and other collusive violations of the agreem.ents and codes. (*) 

Under KRA certain deadlocks which had existed for many years were 
broken, and for the first time conTprehensive programs of regulation of 
contractor-jobber relationships y/ere adopted, IJj-lA contributed nothing 
new to the underlying principles of specific provisions adopted under 
the codes with respect to the contract problem, but served primarily as 
a central agency for the adrninistration of measures on behalf of the 
Industry as a v/hole, as a forum for the continuous discussion of indus- 
try problems, and as a vehicle through which the organized objectives 
of an industry could be given exi^ression and put into effect v.-ith the 
sponsorship of federal lav;, (**) 

Even thougih the obstacles of partisan interest were not en- 
tirely removed under the Coat and Suit Code, the Industry accomplished 
a significant gain in having subordinated these obstacles to the 
general industry objectives as e;qpressed in the code. It is difficult 
to explain satisfactorily A'/hy a similar unity of purpose was not ob- 
tained under the Dress Code. The escDlanation may lie in the existing 
state of evolutionary development of the tv.'o Industries, in the in- 
tangible factors determining the strength of v/ea^cness of industry or- 
ganization, or in the different degrees of pressure luider v/hich the 
two Industries operated. It is possible that the demands of style and 
the rapidity of stj'-le turnover, are greater in the Dress Industry than 
in the Coat and Suit Industry, The Dress Industry also labored under 

"*r*T"See :^."33To"42^ " " * ' ^ 

(**) See p-o. 43 to 44 

9714 - / ' ■ " 



great difficulties under the code laecauEe of the involved prolDlem 
of overlapping with the Cotton Garment Industry. Iii addition, the 
Dross Industry had a considerablj/ larp^er n-omoer and proportion of 
contractors to deal r/ith than the Coat and Suit Industry, and its 
problem v/as therefore of greater majjnitude and perhaps also of greater 
intensity than the problem of the Coat and Suit Industry. (*) 

The adoption and effective administration of rstsulatory 
measures calculated to stabilize contractor-jobber relationships and 
diminish their ill effects are i-npeded by the partisan aspects of the 
nature and procedure of collective bargaining; by the uncertainties 
and honest differences of opinion on proposed but untried remedies; 
by the status of organization and the psychological attitude of par- 
ticular branches of the Industry to\7ard regulation; and by the opera- 
tion of general economic influences beyond tlie control of the Indus- 
try. (**) 

The fact that relationships existing in the contract system 
are influenced by certain basic governing factors, including style, 
seasonality, and the technique of production and distribution, makes 
it desirable that at least part of the broad program of refiulation be 
directed at these basic factors in so far as they are subject to con- 
trol. (*='^*) 

'%ere is no magic foriTiula v;hich of itself may be expected 
to eliminate or mitigate the destructive forces and practices re- 
sponsible for the difficulties of the Women's Apnarel Industry. The 
contract problem is an integral part of the broader industry problem, 
and its solution lies partly in the field of regulation and partly in 
the field of evolution. The evolutionary process is subject in some 
measure to g:uidance. While problems rf the Industry are of long stand- 
ing, the organized attack upon these problems ha,s been confined to a 
relatively short period of time. The present period is one of testing 
remedial measures recently adopted. The measurement of accomplishment 
must av/ait the development of further evidence. (*--•**) 



(*) See pp. 44 to 45. 
(**) See pp. 45 to 47. 
(***) See pp. 47 to 48.- 
(****) See pp. 48 to 49. 



9714 



SULQ'IAHY 
PART B 



TTnile it is poesi'ble to malce rou^h. distinctions betv/een the i^iajor 
graxapings e-nd su"bdivisions of the Appa,rel Ind-astry, the lines of dena,rca- 
tion are seldom distinct. Definitions "based on prod'acts, markets, 
methods of production, or other factors, nay "be accurate as to the fa,ct" 
ors themselves, hut do not necessarily apply to the manufacturers con- 
posing specific f:roups, whose exact methods vary ^.7ith the individ-ual. 
Product definitions are often difficult or inpossiole to c'raft, in vie\7 
of the infinite variety of garment tyi^es produced, and the many "border- 
line hy'orids \7hich defy exact classification. (*) 

Jurisdictional pro"blems had existed prior to llRA., "but the scope of 
the codes, the differentials estahlished, and t'.ie opport-onity afforded 
for the voicing of complaints, focussed atte:.:tion upon them and "brought 
a"bout organized opposition hy groups v;ho considered that the codes uere 
operating to their disadvantage. (**) 

Code differentials nere "based upon the necessity of recognizing the 
pre-code status of low-wage groups "by limiting increases to the extent 
practicahle, to avoid the imposition of too great a "burden, and upon the 
"belief that the classified craft wage principle existing in other higher- 
wage groups should "be continued in the codes to avoid the possi"bility of 
causing the minimum to "become the maximum. (***) 

In accordance with the provisions of the Hational Industrial P.ecovery 
Act, code "boimdaries were largely determined "b:* industry, and in general 
these "bounde-ries followed the lines of trade s.ssociation organization. 
TThile the innediate determining factors responsi"ble for groupings under 
trade associations were usually other tha,n the factor of co:3non product, 
prodiict generally determines fne conditions of production, which in turn 
determines other factors siich as geographic location and union or non- 
union organization. Also, "fair competition" i:r:lies regulatory measures 
applica"ble to competitors grouped "by product. Imperfect as they were, 
product definitions, therefore, provided the most reac.ona"ble "basis for 
distinction between codified groups. They failed, however, to include 
all competitors on given products, and large groups of individual mami- 
facturers could not "be accurately/ classified "by specific product 
divisions, (****) 



(*) See -g-p. .90 - 91 
(**) See -0. -^1.- 
(***) See -op. 91 ■ - 93. 
(****) See -0-0. 34^ - 95. 



371^ 



SoT.ie years ago the dividing lines ■be-fcr/een the Dross and the '^ar.h 
Dress Industry nere more distinct tlian they are today. The reapproche- 
ment and overlapping of the two Industries was caused by the elahoration 
of the -jash dress fron its early utilitr,ri':.n forn to sn article of 
attractiveness and style, coincident \Tith a tendency in the Dress 
Industry to\7ard volume production in the lorer price ranges, and a re- 
vival of the fashion inportance of cotton. The "iTash Dress Industry, hy 
the general nature of its production reouirenents, is decentrallized, 
T^hereas the Dress Industry is heavily concentrated in and aro^ond Ne-.7 
York Citj', As union organisation is nost easily effected in concen- 
trated production areas, the Dress Industry is largely -ujiionized and 
the Wash Dress Industry is generally non-union. Distinctions l)et\7een 
the tv/o Industries on lines of prodviction racthods, product, price 
ranges, 3.nd channels of distrihution, are correct in the broadest 
sense only, and must "be q^ualified in a large nvj-:ber of specific 
instances, (*) 

In order to avoid needless duplication of effort, the chronologi- 
cal accTiunt of developnents in the controversy heti-'een the tv?o codes, 
which is adequately covered in the Plistory of the Dress Code, is omitted 
fron this study, A corjpilation of records hearing uoon the subject is 
also included in the Dress Code History as a supplemental appendl::. 
The subject is treated here in broad perspective only, for the purpose 
of obtaining guidance in the formulation of policy on possible future 
regulation fhrough federal law. 

Efforts to differentiate betv/een the two Industries by d.efinition, 
or by locating the zone of least conflict, resulted in failure, ^he 
subsequent history of the controversy is one of repeated unsuccessful 
attempts to establish a basis upon which exemptions could be granted to 
manufacturers for whom hardship had been created 'oy code definitions 
and by previous exemptions granted. 

Due to the lack of reliable statistical information, the zone of 
least conflict was never satisfactorily determined, but even if,- it had 
been, it is doubtful if any price line distinction would ha,ve been 
satisfactory. ITo matter where the attempt was made to establish a 
bound.ary, large groups of manufacturers on either side of the line 
were effected, (**) 

The principle of a weighted wage scale in proportion to the 
amo^j-nt of production in each individual shop represented by different 
price, ranges or other factors, is theoretically so"iind, but pre~ 
supposes an industry-wide knowledge of cost acco\:-nting which does not 
exist. It is possible that if the KM had adopted this principle and 
had insisted upon its application, the Industry night have been educated 
in the elements of cost accounting through necessity. But the de- 
centrallized nature of the Wash Dress Industry, and! certain other con- 
siderations, would have made an extremely complex administrative 
problem, (***) 



(*) See -ov. 95 - 97. 
(**) See pp. 97 - gg. 
(***)See pp. QQ.' - -ah. 



The^.proposal to include both Industries under one code might have 
simplified administrative treatment to some extent, "but this advantage 
would have been counter-balanced by the inherent diversity of interest 
and the antagonism between the two Indi^stries, making such an arrange- 
ment practically impossible of effective and smooth operation, t'oreover, 
the fundamental difficulty of establishing equitable wage rates for dif- 
ferent types of production would not have been solved. (*) 

It is evident that the principles aiid policies which gave rise to 
the overlapping problems under IjEA should be modified in certain particu- 
lars if these same difficulties are to be avoided in any future similar 
regulatory program. Siich modifications involve changed conceptions of 
the extent to which federal law may operate in the regulation of industry 
without introducing complications inimicable to effective administration, 
and of the role to be played by industry in the formulation and administra- 
tion of the provisions of the Ipv;. 

A proposal to adopt the principle of simple, uniform basic wage 
minima for broad divisions of industry, such as the needle trades, would 
have been opposed during the code period, but there are evidences that 
this principle would now receive support from -uaexpected quarters. Under 
the operation of such a principle, there v/ould te no need for the narrow 
division of industry on trade association lines as established by the codes. 
The administrative advantages and economies of such a simplified structure 
are obvious. It is by no means proven, m.oreover, that the result of such a 
program would inevitably be a net reduction in wages and purchasing power, 
or that it would create unfair competition. The -unions would continue to 
protect classified craft wages and there is a somewhat automatic check on 
minimum wages becoming the maxim.uin in the necessity for maintaining plant 
productivity. The factor of productivity also tends to equalize the unit 
costs of similar competitive garments produced in different areas where 
there are recognized differences in the productive ability of the average 
workers. While there would be exceptions, it is doubtful if the unfair 
competition resulting from such instances would cause as much, damage to 
the respect and confidence of industry in the federal program as was 
caused by the overlapping situation under N1A., and some measure of pro- 
tection against the worse type of sweat shop competition would certainly 
be gained. Perhaps it is a choice of evils, but as between following a 
formula whose weaknesses are known, and adopting a policy which reasonably 
may be expected to yield substantial benefits, and which at the same time 
is obviously more workable in practice and a};plication, there would seem to 
be no question as to which course v/ould be followed. (**) 



(*) See pp. 99 - 100. 
(**) See pp. IQO - 103. 



SULfiLASY 

In certain branches of the women's api^arel industry a highly 
developed form of self-goveriiment through collective agreements had 
"been in existence for mai:i;'' years prior to the advent of ViRA. The basic 
principle upon which the effectiveness of the system rests is that of 
solidarity, and a united front against outsiders is presented in the 
form of interlocking, reciprocal collective s.greements which require 
exclusive or preferential treatment of signatory imrtics. The coat 
and suit industry provides an example of this tjrpe of organization in 
fully developed form. (*) 

Sections 4 (a) and 7 (b) of the National Industrial Recovery Act 
implied tliat the tjrpe of regulation to be adopted night be ba,scd upon 
previously established forms of control as contained in existing 
collective agreements, and while for a number of reasons the coat 
and suit industry did not atteiiipt to have their collective agreements 
approved in place of a code, the collective agreements and the code 
were synchronized as a practical e;-rpedient to avoid duplication of 
effort. Many identical provisions were adopted Uiider both code and 
agreements, and much of the administrative ms'.chinery of the established 
agencies was incorporated bodily into the cede authority structure. 
The working partnership thus established proved decidedly effective, 
but it had many complications. (**) 

The concentration of the major branches of the apparel industry 
in the iJew York metropolitan area had the generel effect of giving the 
"Jew York groups preponderant majorities on the code authorities in 
many cases, and the conflict of interests between the Few York and the 
out-of-town groups, roughly representing the union and non-union 
elements respectively, created an atmosphere of distrust of the mo- 
tives and impartiality of the code authorities. Resistance wa.s 
greatest in those industries whose code authorities were most efficient 
and a,ggressive in their efforts to enforce the code, and the very 
success of the Coat and Suit Oode Authority was largely responsible for 
the ma-ny complaints registered against it. Moreover, the atmosphere 
of code authority compliance hearings, under the best of circumstances, 
was often far from th^t which is ex]pected of an impartial, judicial 
hearing. The situation was further complicated by the fact that 
illegal acts of violence and intim.idation were allegedly coiximitted in 
the name of industry regulation. The integration of the Code Authority 
with the established agencies imiDlied that the ERA and the Code Author- 
ity were responsible for such alleged illegal acts, and that powers 
delegated under the code were being misused for the pui^pose of 
furthering the separa.te objectives of the industry organizations. (***) 

1*1 See -p-p. 105 to" 106. """ 

(**) See p-o. 106 to 107. 

(***) See pp. 107 to 109. 



The charges ai^ainst the Coat and Suit Code Authority arose 
largely tlirough investigations conducted "by special agents of the 
I'evr York KRA Regional Office. The greater r'art of them are included 
in the transcript of the Senate Finance Coinraittee hearings held in 
April, 1935. Pertinent extracts are quoted in this study, and 
supplementary da,ta is contained in the Appendix to Part C. (*) 

Investigation failed to esta^olish the allegations of iirpropriety 
in the misuse of delegated power, hut the defects of the system es- 
tahli shed "fas'- the coordination of the industry's agencies of self- 
government with the code authority structure were clearly revealed. 
The issue was confused by the looseness of certain condemnatory terras 
apolied to recognized and specifically authorized forms and methods of 
regulation. Such terms as "monopoly", "op-^ression" , and "discrimination" 
are not accurately descriptive of any cooperative action tal^en to en- 
force the law on all elements of industr;;- hy an organization which 
happens to represent the preponderant majority of the industry. The 
interlocking, preferential agreements could "be considered discrimina- 
tory only if opportunity were denied to outsiders to join, or if in- 
equitable restrictions to admission were set up by the signatory 
associations. Ag a practical matter, the associations v;anted all the 
members they could get, and no conceivable purpose would have been 
served by establishing conditions to membership that could not be met 
by applicants. Nevertheless, it was necessP.ry tliat a, positive 
finding be made on this point in connection with the approval of the 
code authority by-laws and the recognition of a code authority member 
selected to fill a vacancy. Shortly before the invalidation of the 
codes, the Le^al Division officially absolved the associations of the 
charge of inequitable restrictions on admission. (**) 

The fact that the specific allegations of misuse of pov:cr were 
not sustained by investigation is of less present iirportance than the 
potentialities of abuse inherent in the system established. In this 
connection it is to be noted that the reiort of Special Agent Eaward, 
(which was the chief compilation of cliarges against the code authority), 
boils down in its conclusions to recommendations for revision of the 
method of selcctin^^ code authority representatives, and for the se- 
lection of a new code authority in view of the alleged misconduct of 
the incumbents. The first recommendation was recognized as valid, and 
was being worked out at the time of the Schechter decision. There was 
a small minority of members of the industry who were denied code author- 
ity representation because the;* were not members of any a,ssociation. 
By no concept of the tern "true representation", however, would the 
balance of power have been changed by a revised method of selection. 
As to the second recommendation, even if the charges liad been supported 
by investigation, the basic v/ealinesses of the sj'stera would not have 
been corrected by merely dismissing one group of individuals. (***) 

(*) "Sec p:7.~"i09 to 116. ' ~ ~ 

(**) See pp. 107 to 119. 

(***) See pp. 119 to 120. 



In the event that future atten^jts are made at industrial regu- 
lation under federal auspices, the form of a remodeled system would 
depend upon the ty^oe and scope of control provided by law. If the MA 
code structure v;ere rene^7ed on its previous lines, there would again 
he the necessity of workin;^ out an intetiTation of the existing agencies 
of self-government with the federal administrative agency, tut even 
under such circumstances the judicial function should he vested solely 
in responsible officials of the government, if the implication of 
partiality is to he removed from all acts under the la'.=r, however 
impartial the actual performance raay be. If a siniplified law were 
passed, providing basic minimum wage a.nd maximum hour standards only, 
the functions and fields of activity of the government and industry 
agencies would be more clearly distinguishable. Cooperation could be 
obtained without integration, without delegation of pov;er, and without 
limiting the legitimate powers of industry through collective agree- 
ments. Violence, oppression, combinations in restraint of tre.de, or 
other illegal acts would not be prevented, but the fact vrould be made 
clear that such matters are not an integral part of the federal pro- 
gram, but that they are under the jurisdiction of the criminal courts, 
the police, the anti-trust laws, and the Federal Trade Commission. 
Finally, the limitation of delegated power would serve the all- 
important purpose of obtaining the respect and confidence of all 
elements of industry in the iraipartiality of judicial determinations 
and other actions under the law. (*) 



(*) See -ji. 120 to 122. 



9714 



PAP-T A 
THE CONTPACT SYSTEM 



9714 



-1- 

D^ISCRIPTION MD HISTORY 0? Ti2 H'lYl.LZFd'ZlSf 0? T;IZ C'I-.'TPACT SYSTHu (*) 

GEi:Sr.AI- C'lARAJTZRISTICS ZF T " .vTiJLa:'' 3 APP.U^L IIO'jSTRY 

The lomen's Ap'parel Industry is ccrnpj=^ed of a lar^^e maiaber of 
small units, with a small amoojit of invested capital in proportion to 
sales vol-urae, and extremely siuple anl flexible teciinolcsical equip- 
ment. Its products and methods of operation are influenced "by the 
constantly fluctuating demands of style and seasonality. D-Jxing 
slack seasons, a large part of tue Industry and its workers are un- 
employed, or working at a small portion of peak ca;oecity. Competitive 
pressures within tae Industry \mder t'.iere circujn^tances are normally 
and perennially intense. 

To a large extent the Industry employs a system whereby most of 
the processes of production are perfor.iied by contractors or sub-manu- 
facturers who are supplied with cut or uncut piece goods by their 
"principals". Sometimes these "princi^oals" are "inside'" shop manu- 
facturers; more often they are jobbers. 



(*) Historical material on the sr^'-'^- of t_'.e contract system 
up to the year 1926 is drawn primarily from two sources: 
Levine, Louis, The ',7omen ' s Garment .Yorkers , (3. '.?. ^"cubsch, 
Inc., 1924; and publications issued by the C-cvernor' s' Au- 
visory Gommissicn, to the Cloalc, Suit and Slcirt Industry, 
(New York Cit;^y, including Preliminary Recommendations, dated 
July 8, 1924, Report of an Investigation, o:/ John Dickinson 
and Morris Kdlchin, dated I/Iarch 10, 1925, and the 
Commission's Final Hecoiimendatioa s, dated May 20, 1926. 
Descriptive material ajid interpretation of forces responsi- 
ble for the origin and growth of the cgi tract system are 
obtained partly from the above two sources, and partly from 
the author's knowledge of the garment trades, gained through 
several years of T/oiic in the Textile Industry, and througli 
having had charge as Assist^'jit Deputy A3jr.inistrator, of a 
number of the apparel codes, including Dress, Goat and Suit, 
and Blouse and Skirt. Xxile there may be academic differences 
of opinion as to tl^e evaluation • of t:Lie exact importance to be 
attached to specific facttcrs in the contract problem, it is 
felt that in general there is very little controversy ovsr the 
essential elements of the problem, and that in spite of a, 
certain lack of substantiating material, no qualifications 
need be made as to the autxienticity of the description of the 
contract system contained in this Chopter. T.ie brevity of 
tnis summaiy makes it undesirable to complicate the presenta- 
tion by excessive use of footnotes and page references. 
'(Vhere sources other than those mentioned above are drawn upon, 
or where for any reason it appears desirable to give addition- 
al or more specific references, footnotes are indicated by the 
(*) designation. 



The relationships between contractors and jVbbers have "been of such 
a nature that the nonnal competitive prassures within the Industry, 
sufficiently acute in thcraselvos to create an ahncr.nally high rate of 
business mortality, have "been aggravated and intensified to an alarming 
extent. (*) 

DESCHIPTIOlvT OF TE CONTZ,\GT i/3TH,D jF P:R0JUGTICN 



Coiiparison lith Other Industries and Typical Contractor-Jobber 
Relationship . The separation of the fiJiicticns of production and dis- 
tribution by means of job-contracting is not peculiar to the Women's 
Apparel 'Ind^is try. In certain pa.:.;tiGular5, however, the system employed 
in t.iis Industry is unique. The position of the jobber as wholesale 
distributor to the retail traae is siirdlar to that of the wholesaler in 
many related industries, but differs with respect to the source of his 
goods. Tiie wholesaler of women' s apparel perfonms the dual functions 
of manufacturer and distributor, buying a minor porti:in of his stock, 
if any, from manufacturers in completed f:vrm. His procedure is to pur- 
chase raw materials in the form of uncut piece goods, tc select t-ie 
styles which he wants mado for his stock, and to give out to contractors 
the woik of manufacturing piece goods into the desired articles of 
apparel. Ordinarily, the jobber cuts the ;nercu8Jidise into patterns and 
ships the cut goods to the contractor in bundles for sewing and finish- 
ing. (**) 



(*) The compilation of statistical inaterial on the 'lomen' s 
Apparel Industry has been sporadic and the results are 
fragmentary. A complete, consecutive, authentic picture 
cannot be assembled. The type of information gathered at 
one time often differs in vital respects from similar data 
■ gathered at a later date, so that accurate comparisons and 
measurement of trends are limited to relatively short per- 
iods of time and small samples. Such tests as have been 
made, however, have indica,teda general tmiformity in the 
conditions revealed at different times and in different 
branches of tne Industry. Vtoen the available statistical 
data is considered in connection wit'i the informed testi- 
mony of those who have been in close contact \vith the In- 
dustry, it is evident that the essential elements and 
factors in the contract system and its effects upon the 
Industry are couiraonly understood and fairly well substan- 
tiated. Appendix to Part One, pp. 52 to 88., contains 
tables and other material selected on the basis of the 
author' s opinion as to its validity and value as evidence 
pertinent to the problems of the Industry, with particular 
reference to tne problems arising directly or indirectly 
from the mal-adjust;nents of tie contract system. 

(**) In some cases general dry goods wliolesalers carry lines of 
women's wear, purchased from manufacturers or jobber-manu- 
facturers, but in ordinary usage in the garment trades, t::e 
term "jobber" applies to tae type of operator described 
above. 



9714 



-3- 

Sub-Manuf ac turing . A variation cf t'.iis process, known as sub-manu- 
facturing, closely parallels tlie usual manufacturer-wholesaler relation- 
ship of other industries. Tiie siniilarity is more tecnnical than actual, 
however, in that what appears to he a bona fide sale of finished gar- 
ments by the sub-manufacturer to the jobber, is in reality a bookkeeping 
transaction whereby the original owner of tlie jAece goods has them re- 
turned to him in finished garment form. To all intents and purposes the 
same process has been followed as though the sub-rrianuf acturer had been 
called a contractor, except tnat the sub-manufacturer noriTially performs 
all the operations of production, including cutting. The bookkeeping 
starts with a "sale" of piece goods by tl^e jobber to the s\\b-manufact\irer, 
as compared to the consignment of goods to the contractor. Tfxien tne 
garments are finished, they are re-soli to the jobber. 

The sub-iBan-ufacttirer' s status in tie productive mechanism of the 
Industry is analogous-, in all essential particulars to t":at of a con- 
tractor. He is in no sense an independent producer wio sells his wares 
in the open market. Tney are not actually his wares at any time, even 
though he has "bought" them from the jobber, and a sensation of no small 
proportions would be created if he tried t-. sell to anyone but the 
jobber. In fact, the jobber protects aimself a.'i'ain^t such unorthodox 
practices by selling to the sub-mani-if acturer at a price considerably 
above the market. For practical purposes , in discussing the problems 
arising from contractor-jobber relaticn s. .ips, no distinctions need be 
drawn between contractors and sub-man'of ac turers , and tie terms may be 
used interchangeably. (*) 

Various Helationsaips . Various combinations of "inside" shop- 
jobber - contractor of sub-manufacturer releticnships exist. There are 
straight "inside" snops tnat produce all 3i their own garments, "inside" 
shops that give out small amounts of work to contractors in pealc 
seasons,: jobbers who maintain their own ''inside" shops for a part of 
their production, and sub-jobbers wnc obtain orders from jobbers, cut 
the goods on their own premises, and have the cut goods made up by 
contractors. 

The Corporation Sliop . Tliere is also another type of shop differ- 
ing in structure and cccasicnally in function fr^m the usioal type of 
"outside" shop. This type is knnv.n as the "social" or "corporation" shop 



(*) Governor's Advisory Commission, Report of I nve stigation , 

pages 7 .and 8, loc . cit . note p. 1 supra, stated in effect 
that the jobber usually deals with sub-manufacturers, 
waereas the contractors are normally employed by "inside" 
shops, thus separating the Industry into two systems; "in- 
side" shop - contractor, and jobber - sub-:Tianufactxirer. 
No such distinction was made, to the author' s personal rec- 
ollection, during the FRA period. Sub-manufacturers are 
mentioned in Article VII of the Coat and Suit Cods, but the 
heading of this Article is siinply "Contractors". Sub-manu- 
facturers are not mentioned in the Dress Code, nor in the 
Biouse and Skirt Code. No doubt the distinction once ex- 
isted, but the term "contractor" today in coi^non usage is 
generally meant to include all "outside" snops. 



(Tiie term "corporation saop" is a ccrn^ption of "cooperative slicp" . 
The term "social shop" originated from the fact that in such shops the 
workers are often drawn from t:ie immediate family or from a circle of 
near relatives or friends.) The "corporation" shop is usually a 
profit-sharing arranger.ient among a fev7 workers, wao own and operate 
their own shop, sometimes employing additional workers not members of 
the "corporation". Ordinarily tiey act as contractors or sub-manu- 
facturers, and in rare instances t.j.ey take work from contractors or 
sub-manufacturers . 

Tile Tradinj; Relationship and the Contractors' Yeaknesses . Wo rk 
is awarded to "outride" shops '^n the basis of co.npetitive bidding. 
In slack seasons competitive pressures are acute. If there are wealc 
links in the chain they will yield to tliese pressures. In every way, 
structurally, financially, and strategicsdly, the contractors are 
weal?:, Structarally, they are too numerous and too small. A stronger 
structure would provide larger and fewer -units for the same amount of 
production. Tliey rarely have adeoua^te financial backing. Strategical- 
ly, tue:/ are in no position to combat the pressures brought to bear upon 
them. (*) They are the petitioners "witli hat in hand like beggars". 
The jobbers are in the ^addle, h.-.ving the pcv/er to give or deny work, 
and having a wide field of desperately competing contractors from w.iich 
to select. 

Levine gives a grapnic description of the trading- process. (**) 
He pictures the procession of sub-manufacturers to tue jobber's office, 
where they are inte.-viewed by tae production manager, or "bhij'^r" , whose 
vocabulary is reported in the following terms: "you do not know what 
you are talking at rat"; "You are crazy"; "I am not interested in 
what it costs you"; "Your labor is too nigh"; "Do what the next man 
is doing"; "I aave not time to argue"; "Get busy, or do not come 
here, if you cannot tal":e tue price". This metacd of transacting busi- 
ness has been variously characterized as the auction block system, the 
juggling of contractors, or tne playint=, off of one contractor against 
another. 

Tlie conditio! described above has been typical in :-npn:/ branches 
of the Industry at one time or another, varying in accordance with 
circumstances and the degree of regulation. Tiie focal point of the 
contract problem is contained in the inability of the contractors to 
withstand the pressures broug.ht to bear upon them, and the result has 
been a general disorganization of indiistrial stability through the 
spreading of the auction block competition between contractors through- 
out the Industry, endangering or destroying way standards and merchan- 
dise values. 



(*) Governor's Advisory Com.iiission, l^inal R ecommendations , page 5, 

loc . cit. note p. 1 supra. 
(**) Levine, pages 4£4 and 405, loc. cU. note p. 1 supra. 



9714 



-5- 



ORdm 0? THE 0:.OT,RA:T' 3Y5T: 



Early Days of tae In dustry. T-ie .Yomen's Ap^^arel Industry is of 
comparativsly recent origin. Its growth from tae introduction of tiie 
sewing .nachine in 1346 to t^.e present dcy lias been lar^'ely a matter of 
progressive displacement of gai-ment makin;^ in t.io Aome or by seam- 
stresses, and noriTal expansion due to tiie groivt^i of pooulatijn and 
purchasing power in tiie United States. In its early pnases, prior to 
1849, when the first Census Report on t-.e Industry was issued, hoop- 
skirt majiufacturing was the most important branch of f'.e Indxstry. 
Some time prior to 1859, a few manufacturers began senang out cut 
garments into the country towns and villages to be made up at home 
and returned to the dealers in tiie city. #j.ile this was e3sentia,lly 
a homework metxiod of operation, and cannot be considered the beginning 
of the contract system as it became .kno-.Ti in la,ter years, it neverthe- 
less marked the first cliange from the "inside" s.iop method of produc- ' 
tion and foreshadowed the development ^i tlie contract syste u. 

1359 to 1879 . In the twenty years from lo59 to 1379, tne new 
Industry grew rapidly and steadily, the Census fi^^ures indicating tha.t 
in terms of anniial volume and workers employed, it had increased almost 
five-fold, (*). The first major growth of the branch of the Industry 
later known as the C"'at and Suit Iniu=^-try, occurred at this time, 
largely in tlie productioh of cloa^cs on I nr^xitillas. During fciis period, 
a number of independent "outside" shops -f \'arious types ivere organized, 
and by 1882, tiie distinction oetwsen "inside" and"outside" shxips was 
clearly ectablisiiSd. ' 



(*) See Table No. XXII, Appendix to Part A^, 



-6- 

ErrpsAsion of Business and Immigra.tion 1880 to 1890 . During the de- 
cade from 1880 to 1890, ladies suits and skirts "becsme inrportant in the 
Industry for the first tine, and. a few dress shops V7ere opened. In addi- 
tion to the stimiiJ-ation given hy the production of these new items, the 
decade was characterized oj a wide expansion of generpl business throiigh- 
out the country, an increase in the demand for ready-made garments, and a 
large influ::: of Jewish immigrants from Eastern Europe, 

Background of the Immigrgjits . Many of the newly arrived immigrants 
came from Eouiiania, Austria, aiid Poland, These countries had taken little 
or no part in the industrial revolution which had "been gathering momentum 
since the Civil War periods The immigrants were equipped with a, laiowledge 
of the smallo individual^ artisan type of operation, but their backgrouiid 
had not provided an understanding of factory methods of production, or 
other more highly developed tyves of industrial endea^ror. They congre- 
gated in localities where their fellovr countrymen and co-religionists 
lived» Spealcing no English, they found it difficult, if not impossible, 
to obtain work except when sought out by employers. The existing "inside" 
shops absorbed a share of the incoming supply of labor, but the increase 
in the pro5u.ctive facilities of the Industry, created \)y the expansion of 
"inside" shops, was inadequate to meet the demands of the growing m.arket. 
The organization of contract shops, whose \vorkers were drawn from the 
ranks of the newly arrived immigrants, took place on an increasing scale, 
and the "outside" shops found a ready market for their services. 

The contractors made a practice of seeking employees by going di- 
rectly to certain districts where they knew the immigrants could be found, 
A sort of labor exchange v/as established in New York City around Essex and 
Hester Streets, which became known as the "pig market," and where the con- 
tractors were able to obtain all of the "hands" necessary to their tj'pe of 
operation. 

The Sweat Shop . The conditions existing in contract shops of this 
period v/ere almost uniformly bad. The "swea.t shop," with all of its bad 
social and sanitary implications, was the natural development of a system 
which brought about the installation of sewing machines, run by foot power, 
in the rooms of tenements, often the same rooms occupied by the family of 
the worker or employee, "Wages \Yere small, hours were long, pjid the great 
white plague of tuberculosis vras rife among the workers and a menace to 
society as a whole." (*) 

Exploitation of Labor . In addition to the sweat shop evil, the ma- 
jor problems of contractor-jobber relationships with respect to the ex- 
ploitation of labor and its influences upon the stability of the Industry, 
soon began to assume tangible and disturbing form. The contractor made 
his profit in proportion to the aiiount of the difference he was able to es- 
tablish between the total ^rice paid to hir.i by the jobber-manufacturer. 



(*) See Testimony of Raymond V. Ingersoll, Supreme Court, Kings Co-unty, 
New York, Suit of Brooklyn Ladies Garment Manufacturers Association, 
Inc., July 10, 1930, page 4. (lIRA Coat and Suit File, General 
Polder.) 



9714 



and tlie apo'ont paid oj?- xiin to the vorV.ers. The "orJ|ers were iinorganized> 
and ignorant of working conditions in their nev- surroundin,n:s . The con- 
tractor tool: ad.vantage of this situation, not only hy paying the "barest 
minimuin ra/jes, "but even "by charging a fee to the porker for the privilege 
of uorkinr;,. and by requiring- vorkers to "buy or rent their ovm machines 
and to sup-^lj'' their ovn needles p.nd thre?d. 

Extent of Contract S^^sten in lc9 rs. There is comparatively 
little evidence a.s to the actual extent of the contraxt systen in the 
various "branches of the Industry at this time, hut some indication of its 
importance is :];iven "by the rerjort of the TTe^- Yor]- Str.te Bure?-n. of Lr.oor 
in 18S3, "hich stated that there vere pro"ba""rily IOC wholesale cloak houses 
in V.ev York City, "but not over a half-dozen "inside" sho-os. A- sirTila.r 
situation existed in Chica^^o, "!:)ut development of the contract system in 
other -^ajjor centers, such as Philadelphia, Balti-iore, and Cleveland, was 
of no grert im/oortance for t"ne ne::t decade or so. 

&ro7/t:i 0.7 u::io";.:i 3i,i 

La."bor unions had appeared in the earl;'' eig;xities. The first 
unions were local or shoT organizations, for the most rjart in the Cloak 
Industry. , One craft vinion, the "Gotham I'":nife Cutters Association", had 
maintained a continuous existe;ice si-^ce its or-;ani:;ation in 1883, 'out 
most of the ujiions were short-lived, "Seeing active only e.t the "beginning 
of ea.ch season ^'hen it was the more or less casual custom to fix i^iece 
rates "by "seaso-..al strikes". It -ts not until If^ijC, '-hen a chrrter was 
issued to the Interna-tional Ladies Garment ¥or''-ers "Union bv the American 
Federation of La"bor, that the union mover.ent was placed upon a finn "basis. 

The International grew rapidly, a^d in spite of internal dis- 
sension and set-hacks attri''outa"ble to the econo" ic de--iression of 1907, 
"became a factor of increasing importance in the Industry durin'--; the de- 
cade of 1900 to 1910. . T'-o olr strikes in tne latter part of this decade, 
the first known s.s the ""Uprising of t^ie Twenty Thousand", a general strike 
of shirtwaist ma^:ers in "xlew Y"ork City, and the second a general strike 
of the ITew York cloalc makers, solidified the organization of the Inter- 
national, and paved tthe way for the ado2Dtion of the first large scale co- 
llective agreement, in the form of the Protocol of 1910. (*) 

riSST ATTB!:PTS at REGULATIOi? Ox^ C0^^THA.CT0R-J033ER Rr:LATIOrSIIIPS 

Contractors T'ere not nentio;i.ed in the Protocol, "'/iolations 
of Protocol provisions as to riiniiur; '"ages r,".d t]ie settlement of niece 
rates "bec:;-e prevalent, often "oy collusive arran'^e-'cnts "between workers 
and em-oloyers, -orimarily "because the conditio'-n of the Protocol could 
not be effectively enforced in the unoraani'^ed cp"atract shons in and 
around '"e''- Yor^'. The em.ployient of non-tuiion ?ind oiit-of-town contractors 
created a com.petitive situa,tion 'iiich undermined the rta.bilit'-'- of the 



(*) Levine, Chapters. XXITC',, XXIII/pM XX.V,-1:g.c. clt note p. J supra, 
?-overnor's Advisory Commasnion, Rernrt of Investl-?-ation . Sec- 
tion II, pages 15 to 17, loc . cit . note. p. 1 suiDra. 



whole nar^:et. 

In Tarch, 1911, the Board of ArlDitration, est-'^.ulished lay the 
Protocol, ruled that tlie practice of sendin-'; '-orh to ont-of-tonn con- 
tractors ras agjairist the spirit of the Protocol, and in 1912 the "'card 
of Grievances ruled thr.t all contractors ror'-inf for -'.embers of the 
Protective Association (*) should oe registered rith the Union for the 
punoose of enahlin,.]: the Union to supervise all contract shops and to see 
that Union nages plus a definite allowance for the contractor's ^aana^ie- 
nent fee nere paid. These rnJ.eG constituted the first definite noves, 
of -(Thich there is any record, toward the regulation of contractor-johher 
relationships. 

Develo-pnent of Suh-I'anufacturin,;:: . These reigulE.tions and 
their administration iiere insufficiently'' effective to relieve the lores- 
sures caused "by continued differentials in lahor costs hetrreen "inside" 
and "outside" shops. They served, horever, at lea.st in T)art, to foster 
the developraent of suh-manufa.cturinp-. In an effort to escape the re- 
sponsi"bilities of naintainin^'; Protocol conditions in re.-^^istered contract 
shops under Union supervision, attenots i^ere nade to estahlish suh- 
rnanufacturing shops as separate organisations, independent of the joh- 
hers or nanufacturers fron rhon ^-'or^: ^as obtained. On technical grounds 
it Tvas possible for a short period of tine to avoid the registra.tion of 
sub-Tianufacturers and to deny responsibility for labor conditions in 
sub-manufacturing shops. In this nanner the inequalities of '-'ages and 
labor costs betr/een "inside" anr", "outside" sho"os '"'ere continued and it 
soon becane apparent that contractor-.jobber relationships required a 
more comprehensive t3^e of control tho.n had hitherto been adopted. 

THE PiEST paopQSALS FOE co;??i:rii]usivE fhogra;: of eeguiatioit 

In 1913 the Union established as its platform a. group of 
proposals, among r'hich were the follor-ing: 

1. Registration of contractors 

2. Y.o T-ork to be given to contractors maintaining non-Protocol 
shop cortditions 

3. An eroTert price commission on piece rates 

4. ITo rork to be given to a contractor ixnless he ha.d at least 
ten machines rith electric power and unless his shop was 
aporoved by the Joint Board of Sanitary Control 

5. Sub-manufacturers were to be considered contractors 
(Th.is was latter changed to the prohibition of sending 

out uncut goods) 

6. Out-of-town shons v:ere to be organized muTer the Protocol 

7. Certain disciplinary measures were contemplated 

8. The idea of adopting a label as an indication of the condi- 
tions of manufacture ■.-.•as also taken up at this time. 

(*) Predecessor of the Industrial CoTincil of Cloak, Suit, and S^-irt 
Manufacturers, Inc. See Appendix to Part i, ■, p. "82 Data on 
Trade Associations. 



On ray 17, 1913, the Joint Board of the Uni-^n sutnitted 
"Fifteen Poir.ts" a? the laasis for negotiations '-ith the nanufacturers. 
Among these -noints irere the follo^in-^ s-oecii ically i-elated to the 
contractor-jo'b'ber protlen: 

1. Prices to he settled hy Joint Price ComM.ittes of 
"inside" p.nd "outside" shops 

2. "Inside" and "outside" shops rrorking in anv contra.c- 

tur.1 or suh-'nanufacturing reln.tionship r^ere to he 
considered departments of same firn 

3. ?.e"istrption of contractors 

4. A joboer-nanufacturer ras to he forhidc'en to t?,he on 
re;- contractors so long as his existing registered 
contractors uere not '^ori^ing full-time 

5. Suh-nanufacturers rjere to ha considered ir. the sane 
category as contractors for the purposes of regulation. 

A conference i^ith the enplo-ers "as held, lasting from 
July 8, to July 30, 1913, c-.t no a.greene -t r^as reached on the regulation 
of contractor-johher relo-tionshiiDS proposed h-^ the Union, although con- 
sideraole progress xras -i-^de on ofj-er "oro^^osals contained in the "Tifteen 
Points". 

TIE 'JAIL PERIOD 

The rapid advance in the rjrice of piece --oods duri-^g the rar 
period - 1914 to 1918 - sti:.iula.ted the 5ro''th nf the co^trrct system, 
primaril-A hecause of the charge r-nich tooh place in retail buying and 
merciiandising methods. Retailers found it desira.hle to abandon their 
previous "^olicy of T)urch?>,sing relatively ]ar~e rtoc.''s if goods in advance. 
The "had-to-nouth" buying practices of the retail rs ;'Taced the jobber, 
r.'ho "^s ^.jle to carry lar'^e stoc^:s of goods for immediate delivery, in 
an e.dvantageous position as comna.red to the "i'^.side" shop, vhose lorac— 
tice '/as to carry relatively kittle stocl: and to lamifacture against 
orders on hand. In addition, the general prosperit^^ '-hich folloTTed the 
entrance of the United Sta.tes into the 7ar increased consumer demand for 
a TTide variety of stj^les. The jobber, ■'.vho nas able to employ the ser- 
vices of a large num.ber of sme.ll sub-manufacturing or contract shops, 
ATas best fitted to supply this dema.nd. 

TH5 POST-WAR EOOL 

The general inflation of business r-hich follo^^ed the close 
of the '"ar continued the exoansion of tne contract S3^stem and brou,^lt 
prosperity/ to the Industry. Demands for -^.erchaidise outstri-cTed the 
productive capacitor of the marVet. Surplus labor "as a.bsorbed. The 
demands of the Union for adjustment of •■'cv~es a:ici iiours in i-eeping 
v'ith risi'ig mrices and increased cost of livin^r "ere obtained rith re- 
lative ease. 



9714 



-10- 

In iri9 a stri'-ie in the C^^a.t anc'. Suit Industry secured 
several far-rercning co?:cessi''ns fr^^"- tlie enplo^ers. Chief e.mon-z these 
v/ere the granting of a fort'^-four hour ^^ee!', rno. the abolition of the 
piece-^.-orh s-',^r,te~i in favor ".f" veei--vfor!:. (*) The collective agreements 
resulting iron this Ftri':e i-e-^:; ?-i.otp\ orthy a"! so in that contra.ctual re- 
lations rere establirhec for "^.':e fi:'st ti'-e -ith the nerly foried con- 
tractors' association, [The American Cloah and Suit i'e.nufacturers As- 
sociation. A^-^ong the -oiovisions of the agreement , rere the following: 

1. Equal distribution of -orh auong "oi\tside" sho-os 

2. "".egistration of contractors and responsiliility of 
jobher for rages joaic' in co'itraxt sho-os 

3. Ersioloy lent of contractors having a ninimui of ten 
nachines 

4. Prohibi-^ion of giving ^-or': to ner contractors unless 
contractors already engaged are supplied rith rork 
sufficient to i-eep ten ^^a.chines ful^ijr enolo"red 

5. Prohibition of e:rplo;-ient of non-union contractors 

DEP?J:SSI01I OJ 19?1 

"Then the "business tre'^.d '"as reversed oy the der)ression of 
1921 to 1924, co'/oetitive -oressures rithin the Industry nilits-ted 
against satisfactor-- co-roliance rith the j^rorisions of the col''-ective 
agreene'ots. The contrr.cts of the Union rith the associations remre- 
senti'ig nanufacturers, johoers, and contrpctors, rere renered in 1922. ' 



(*) C--vernor's Advisory Connis'~ion, '"e-port of Investigation . 

Section II, "oages 27 to 29, loc . cit . note p. 1 suTora. 
(**) C-overnor's Advisory Co'T"''isFion, !".e-oort of In^esti^r- tion . 

Section II, pages 30 anc 31, loc . cit . mte -^o. 1 supra. 



9714 



.11- 



iTi;:TOTIATIOi:S CF 192G - 1334 



In the sumiaor of 1323 the Ajucrican Association, (*) discontented 
with the terms on vrtiich the joboers were c.ealin v/ith thi m, voted to 
cease worii for the jofoers lontil certain atuscs v/ere reco;^nized and a 
•.uarantee .;^iven that they viroald he corrected. A ,;,eneral stop;3a;,.o of 
the entire Industry was threatened, and a conference was held which 
resulted in a somewhat inadequate stati :aer-t of " u-inci;_:>les, upon which 
the parties at interest a-xeRC-, uut which did not serve to ^illoviate 
che sittia-tion. Durin; the sprin,_, of 1924, the t.iffercnt ;_;rou-ps in 
the industi-y attem-itcd to ne<^'otiate new a Toenents. The old a'^recinents 
v;ere about to exijire. 



THE riHST PROPOSAL ?GS LILilTATIOi: Or C07T2AGTCHS 



The Union advanced certain "iro'osels for the re;\ilation of 
contractor-jobber relationshi;is, a-ion; wnich th: i.iost notev/orthy pro- 
vision was one which v/as essentially a reo;airement for strict limita- 
tion of contractors. It v/as irooosed that a .;rouo of sub-manui\actiixers, 
to be Iciown as "steax.y manufacturers", equal to the nuxAber of members 
of the licrchants Association nulti-,Dlied bv five, were to be apportioned 
among the ..lei.ibers of the Association on the ba,sis of volurae . No vfork 
was to be iven to "outside" chops ether than "steady manufacturers" 
unless the "steadj?- manufacturers" were employed at full capacity. 
Each "steady manufacturer" was to be desi^.nated bv one jobber only. 
Severa.l other subsidiary provisions were n-o^csee., such as equitable 
distribution of v.'orh aiiion^' " outsit. e" shops r,ivn].eyed by a jobber, and 
■:)rohibition of dischar.^e of re^^stered "steady riantif acturers" withoxit 
cause or revie".;. 



THE C-OV;jai^'GB'S ADVISGiiY C0LiL,JS3IGI; 



IJe^-^otiations continued from March to Jmie, 132^j.-, without 
a;?;reement bein^^- reached by the CLifferent fa,ctions. Ajain a /"general 
sto-rpage was threatened, and Governor Alfrcc. Z. Smith of ITew York 
intervened and apjointod a special a.dvisory coiaiiission of five members, 
consisting of Creor e Gordon Sattle, Bernarc. L. Shi-'nta-j,, lierbert H. 
Lehman, Arthur D. Wolf, and Lindsay Eocers. Pabiic hearings were held 
from June 17 to Juue 20, and from J\xae 23 to Jixie 2o, 1324. On Jime 27, 
the Commission submiited its preliininary recoiiivi:.ndations, which v/ere 
substantially accepted as the basis for now a; roe.aents . The Merchants 
Lc.dies Garraent Y/,irk:;rs Association, (job.-a-s), refus:e to acce-ot the 
Commission's recor.mendations until threatened with a strih-e, but 
finally, on July 7, 1924, si ,ned the apreanent. 



(*) See Appendix to Part Jc , p. 82 Daxa on Trade Associations 



prell}.:inar?/ Hecom-iienda tion u or the; Go-".iission . On Jvlj 8 , the 
Comnission auonitted its '.rritten recoimeudations to Governor Snith. 
These recoiirencations are "briefl;^ outlined as follov/s: (*) 

1. The principle of the ap,svir:ption of nutual oTDli^ations by all 
gro'o.ps in the Industry is necessary to the estaolislxnent of 
staoie relationships 

2. The principle of reduction of the nvinher of shops in the Indus- 
try-- is recognized, and it is reconnended that this "be accom- 
jjlished by a process of consolidation by neans of recognizing 
only those shops having a mininuri of fourteen r.iachines 

3. It is recoLmended thp.t vorl: be confined to Union shops 

4. The Union label is not recoranended, but it is reconnended that 
a label be adojrbtjd end issued b;^ t]ae Joint Board of Sanitaiy 
Control, signifying the labor and sanitary conditions under 
Tjhich garnonts are prodiiced 

5. It is reconnended thrt all factories in the Industiy be repre- 
sented on the Joint Eoard of Sanitary Control and pay expenses 
thereof 

5. It is reccrinended that an Vuienplojn-nent insurance fund be estab- 
lished for the benefit of the "'or]:ers 

7. It is reconnended that jobbers sha,ll be responsible for the 
pa;Tiient of '.7p.ges to contractor einp?.oyees, such liability 
United to one full v^eeh's '"ages in each instsjLce 

8. Seduction of hours of labor iron forty-four to forty, not 
reconnended 

9. The Comiaission is in frJl s^Tnpathy uith the denands of the 
Union for linitation of sub-nanuf acturers, but in vier: of 
the conplicated nature of the problems, it is reconmended 
that investigation and report be nade "oj J:muary 1, 1925 

10. Establislraent of impartial nachiner;^ for the settling of 
intra-industry disputes 

11. The Ajjerican Association should be recognized bj^ other fac- 
tors, and the uniforra order blank should be adopted. Farther 
recOi.inended that an inpartial conn.ittee be designated to 
formulate a code of trade pra.ctices on jobber-manufacturer 
relationships 

12. It is recoimended that the terras of present contract be for 
a period of one year in order that the Connission raaj'' 



(*) C-overnor' G Advisorj^ Com^iission, Renort of Investigation, 
Appendix, pages 157 to 164, loc .cit. note p. 1 supra. 

9714 



-13- 

have opiDOrtunity to conduct and act upon the investiga- 
tion recommended. 

13. Q,uestions of interpretation of above recommendations to 
be referred to the Commission, whose decision shall be 
final. 

Following the issuance of these recommendations, supDlemental 
recommendations were made by the Commission on July 15, and Au^^ust 1, 
1924, and Februarv 8, 1925, these supplemental recommendations being 
largely developments and interpretations of the original recommendations. 

On August 28, 1924, the Commission appointed V'r . Raymond V, inger- 
soll as Impartial Chairman of the Industry. 

The Pickinson-Kolchin Investigation . The investigation recommended 
by the Commission was conducted under the direction of John Dickinson 
and Lorris Kolchin, and was transmitted to the Trovernor's Advisory Com- 
mission on larch IC , 1925, the text of the investigation covers 163 
pages, and f irnishes a most comorehensive analysis of the contractor- 
jobber problem, supported bv evidence in the form of statistical tables 
on the extent, growth, and trend of the contract system, and the compari- 
son of employment and earnings of workers as betvreen "inside" and "out- 
side" shops. The attitudes of the different parties at interest were 
full-r presented, but no conclusions were attempted. 

Final Recommendations. The final recommenda.ti'^ns of the Governor's 
Advisorv Commission were ' issued under date of I' ay 2^, 1926, after ex- 
tended hearings UDOn the renort of the investigation. They included a 
summarv of the salient historical and existing conditions as revealed by 
the report of investigation. Thev reviewed the steps taken as a result 
of the Commission's preliminary report, and made certain recommendations, 
the most imoortant of which from the point of view of this study, was a 
recommendation for the adoption of limitation of sub-manufactures. The 
exact language of the Commission's recommendation is worth repeating at 
this point, in view of subsequent developments and interpretations of 
the principle and purposes of limitation. (*) 

i'***Bearing this in mind the Commission recommends that there be 
such structural modifications in the existing jobbing - sub-manu- 
facturing system as would tend to regularize the flow of work into 
sub-man-uf acturing shops, raise the level of competition between 
sub-manufacturers, cause closer relations between jobbers and sub- 
manufacturers, and stablize workin^^ conditions in the shops. 



(*) Governor's Advisory Commission, Final Recomm.endations , pages 
6 and 7, lac. cit . note p. 1. supra. 



9714 



■I'l- 



"Uit-h this in viev;, t^c i-oco.^ii^eiK' bhau ihr ?rrties ado'ot a 
systej.i of lii.dtatior uf si:.b-mc,m;.factiii-t rs with vhom a 
jo"biJor :;.ay c.o hucincss. At definite inL:rv.:Lls every joo- 
1)01- shall, in accori.ance ^.itli a stc,n''.^rC. to btT p.,'jreea u."icn 
bttv/ecn the '"^arties, Gf;l-ct and rle s i j.nc t e the suh-r.iani-i'ac- 
turers he ne'^as ;to hanc.li; his n-ohuctioxi, leavin^ hira the 
nsccssary freedom in securin , Sciviples a^id in chan ,in . svJo- 
man-af acturer-o for cause shown; he shall not -.ive worh to 
other suh-nmnufactiirerE v/hen hiLu desi nated siah-ma.nufac- 
turers are not ousy, anc- shall adhere, sc far as jractica- 
bla, to a policy of equitable distribution cf worl: araong ', 
the sab-inE,nufacturers desi;, nated by him. The ac-.iinistra,- 
tion 01 such a system would, as cases .rise, be subject te 
equitable in'i^erpretaticn t]ircu. :h the iraoertial machinery." 



Sasis. of Co; 


.m.ii; 


x'i'jn' 


Is R. 


ecoiiii 


compiled by the Lie. 


:inson-i:o: 


Ichii 


the differences . 


in . 


-ryjle: 


'"■ 1- n' 


t co: 


"outside" sho-)E, 


th- 


\\:i: 


ici :-: 


al b; 


tions was the fcj 


et V 


:hich 


' x; .d 




jobbers normally 


C.T. 


-Lcenti 


:._.t ■ 


\ t_ 


hcjids of a few c^ 


';nt. 


.•?Cucro, 


Zl C ' 


number than ncce 


ssai 


.•y ^.n 


.ve 


the 


ex-oressed its fi: 


nt ir 


I'S o: 


1 th: 


is SI 



nca^tions . Aside from the evidence 



Investigai^ion of 19-.J, respectin,-; 
litions between "i.".siee" and 
sis for 'che Coniird'or.ion ' s recommenda- 

cr,t;iblieh:;t. tJiet vdiereas inchvidaal 
j'c itcx' art of their worh in the 

e uall-/ >..;:alt with a far , -reater 
;--)urse of eacii sco.son. The Cormuission 
) ;ect as follows :(*) 

"It ihoald be remeinbered the.t wnile i.. this ..larhet there 
are only sli,_,htly more than 200 jobbers, they C'.o a yearly 
business of about ;^250,000,000, tnd liav- c:--.--.ro:-i:\m-.oly 
1200 shops \.-or::in,_. for them. TJhile there are, on an ave- 
rage, only sir. sub-manufacturin^;; shops for each jobber, 
even 'che siiallesu jobber deale with i.iany more. Lar^e jcb- 
bcrs often ceal with IOC or more sub-manufacturers each. 
These surprisin- f i, ures are p-axtly due to a ; reat cnscur- 
siveness in the ^rarchase of sanroles. They are ihirther ac- 
couuitcd for by the scattcrin\ cf small orders.*** 

"The investiyation shov/ed that in the case of jobbers whose 
records were examined, an averaf^e of 8C.3'/' of the \7orh for 
each jobber was t^irned out bv an avera.'O of 18.. j^. of the 
number of siib-Kianufactixi-ers doing work for him L.uring the 
year. This shows that even at present individual jobbers 
rely uoon a comparatively small number of sub-manufacturers 
for the bulk oi their outmt." 

THE 193G - 1929 FZ'JOD 

The final recoiijri^ndations of the C-ovcrnor's Advisory Commission, 
supported by the i.ateri-al coi.ipiled by th^ Ph: -h -en - I'olchin Inv^esti- 
gation of 1925, mi ^ht reasonably hrve b^;. : :. i e i. d through collective 
ai^Teements. It is possible that su-cn devoioJi/k nts i>h,ht have taken 
place it it had not been for circu.. stances that tti.i joi-ax ily cisrupted 
the ore;anization of tlie Industry between 1024 and 1329. 

(*) Governor's Advisory Comiidssion, Final Recom .i^-ndations , 'B^^q 7, 
loc . cit' . notu- 1 . 1. supra. 

9714 



- 15 - 

The depression of IQ,?! - 1924 vas over. Tlic nmmtinf: tide ox"" 
pros-oeritj^ that c-olninated in the "boon years of 1?28 - 29 ras gatherine 
rnomentir^.. Prices rere rising. The deiaand for goods nas groiring. As 
in the post-rar "boon, the demand for quick deliveries stinulated the 
grorrth of the contract nethod of production. Lore and nore of the 
"inside" shops took up jobhing, thu.3 spreading production among more 
units rather than less. At this tine, r;hen a rtrong union might have 
been instruu-ientol in stabilizing the Industry and in building upon the 
Commission's recommendations, the Union vas rreaiiened by troubles from 
rithin. In 1326, T/hen the agreement-;: of 1924 veve about to erroire, the 
Union '-^o^s terroorerily in the hands of the Com.iunist element. (*) A 
presettlement strike t/s.3 called psid. the agreementr 'jere renejed sub- 
stantially "unchanged, but the Industry was badly out of control. 

liembership in the International Laddies &a:.ment Uorljers Union de- 
clined from 91", 000 in 1924 to a lo- point of 52,300 in 1929. (**) The 
cause of this decline is ijrobably the seemingly contradictory combina- 
tion of increasing prosperitj^ with the general denoralir^ation of the 
organized elements of the Industry-. Prosperity was more a state of 
accelerated motion than of increased \/ell-bein.j'. S'-r )lo;^ent increased, 
and brought increased earnings to in6.ivicaral "orkers without the neces- 
sity of Union membership; but uncontrolled and destructive competition, 
due in no small part to the expajision 01 the contract s^J-stem, more than 
offset the ter.pora^rj'- .gains of individuaJs, and the Industry as a '"'hole 
was unable to reap the benefits obta,ined d\\ring the boom period by 
other industries. 

3y 1923 this internal warfare ha„d so -^ealiened the Industry tha-t 
"For the first time in fifteen years the representatives of all branches 
of the Indvtstry were unanimous in their diagnosis of ths ills that beset 
it. Even the jobbers' representatives i"t:.o, up to that time, ha^d ckung 
to the theor;' that the jobbers were not interested in lo.bor staJidards 
becaase the;- did not directly employ la.bor, were nov- willing to join in 
an arrangem.ent tn combat the grovdng menace of the sweat shop". (***) 

illDIATIOlT 3Y GOVSIgrOIi 2005EV3LT AlTD LIEUT. -qOVZEI'OH LEIliAlT 

A strike wa»s called by the Union, "''jriria.rilj" for organ.ization 
purposes, and Governor Eranklin D. koocevclt intervened. Represen- 
tatives of the Union and the associations -'ere invited to a co-nference 
in the Governor's chambers in Albe-.y on July 2, 1329. With Lieut. - 

(*) Ingersoll, page 3, loc . cit note p. 6 supra 

(**) Lorwin, Lewis, The A.ierican rederation of Labor , (The Brookings 
Institution, Washington, D. C, 1933), ;o.p.521 to 523. 



(***) Ingersoll, page 10, loc . cit note l.p. 6 



sirpra. 



-16- 



CTaveriior Herbert Le.lriaii actin;^ as inediator, the j)ositioiis of the 
ref.pGctive parties \v-3re oresented, aaid the basis laic- for new 
agreements . 

The spirit of willir.,;,ness to cooperatn for the betternent of 
conditions in the Incustry \Tas perhaps rcater than the actual ;2;ain 
in terms of remedial ..rovisions in the new a^^ree^uents . Th" principal 
new development on th- jobbin;_ sicu.s/oion was the establiskment of a 
Trade Co-uncil for the settlement of minimum prices to be paid to 
contractors .(*) \;!he limitation of contractors as reco.iii.^nded by the 
Covernor's Advisor:/ Ccnimission in its final reports, was not cdo jted, 
-.lo'ff was cinychin done to settle the issue of vieelc-work, Y/hich had 
been establishec. by collective agreement since 1919, (*) as against 
piece-work, v;hich n-evailed as a oootle;^ i..ethod in the lar e body of 
unre,2,ulated, sr.ia^ll "outside" sliops. 



(*) Se- Transcri ^t of Hearing , Coat and Suit Code, (July 20, 1935) 
pa;^e 23, Saimol I'lein. 



(**) Klein, pa' e 20, loc . cit . note p. 16 supra. 

G-ovc.-rnor's Advisor^'" Commission, Rojort of Investi^ration , 
pages ,37 to 39, loc . cit . note p. 1 supra. 



9714 



THE FACT-FIJTDETG CCKMISSK 



The agreements of 1929 also provided for a continmng commission, 
appointed by the Governor, for fact-finding and recommendations. (*) 
Lieut. -Governor Lelmian appointed George "T. Alger, a prominent attorney 
and subsequently Impartial Chairman of the Coat and Suit Indxistry and 
Cliairman of the Coat and Suit Code Authority, Dr. Sigismund S. Gold- 
wator, former Commissioner of Hcilth, Hew Yoirlc City, and Mrs. Florence 
G. Whitney, prominent philanthropist and civic worker, as menbers of 
the commission. The organizations of the Industry elected tvo re- 
presentatives each, and Raymond V. Ingersoll, Inpartial Chairman of 
the Industry, was appointed Executive Secretary. 

The Coitimission undertook to investigate conditions in the"outside" 
shops, and developed evidence of --iractically universal employment of 
the piece-work method of conriTensation and disregard of other provisions 
of the collective agreements, (**) 

1 929 - 1933 . The general business collapse of 1929 made it 
difficult if not impossible for the new a. reeraents or the new machinery 
created under them to better conditions in the Industry, The demand 
for merchandise fell off, unemployment i-:creased, and the scramble for 
the small amount of available remaining business accentuated still 
further the competitive ills of the Industry. The organization activi- 
ties of the International Ladies Garment ''^orhers Union were stimulated, 
however, and membership had increased to 40,000 by 1932. (***) Con- 
ditions were ripe for the adoption of a program of re, ulation under 
the National Industrial Recovery Act, more complete and far-reaching 
than had previously been attempted in the Coat and Suit Industry. The 
Union took the opportunity implied in the Act to push its organization 
campaign vigorously. ITo data is available on membership in 1933, but 
by 1934 the membership had groun to almost five times the 1932 figure, 
to a new high point of 198,131. (*=*=**) 



AFPRAISAL OF FACT ORS RFS POl^ S IEIE T?OR CO "TI--ngP FXIS F]t^"CF A^JD 
GROWTH OF THE COHTRACT SYSTE Li 

Why -.^jave Economic Processes Failed to Make Corrections? 



(*) Ingersoll, page 12, loc. cit . note p. S supra. 

(**^ Ingersoll, page's 16 and 17, loc,' cit. note p. 6 supra. 

(* '*) Lorwin, loc . ci_t. note p. 15 suora. 



(****) International Ladies Garment I'Jorkers Union, Membership Census 
(Feb. 1934) 



-18- 

In view of the manifest wealaiesses of the contract system, it might 
reasonatly ha.ve teen expected that after its early period 'of growth, 
when ^he contract system furnished the Industry with a simple means 
of rapidly ei'cpanding production, the /orocesscs of ecomomic law might 
hiave brought about structural ciia.nges favoring the relatively more 
stable "inside" shop system. 

The Factor of Continued Growth. The assumption LTOon which the 
above hyj^otheses is based is that the Industry grew rapidly only in 
its early stages, and tliat the influence of expansion diminished as 
the curve of growth levelled off. This assumption is not borne out 
by the facts. According to U. S. Census figures, (*) the Industry 
grew even more rapidly after the close of the century tlian it had dur- 
ing its earlier years, and its most specta,cular growth occurred in 
the war and post-war iieriods. Sales volume in 1899 is given as 
$159,000,000, in 1909 as $385,900,000, and in 1914 as $474,000,000. 
Five years later it had risen to $1,209,000,000, and it reached a peak 
of $1,710,000,000 in 1929. It is evident that very little time has 
been available for the free play of normal economic forces. 

The law of the elimination of the unfit and the survival of the 
fittest has not worke'l in the Women's Apparel Industry, or rather, its 
vrorlcing lias been co-uiiterbalanced ''oy a re-peated replacement of the 
margina.1 units that have been forced out of business. Year after year 
and season after season, heavy casus.lties have occurred in the ranks of 
the weaker establisl'Huents , but this elimination has not been permanent. 
"Jew groups of weak units have alvrays sprung up to fill the gaps. This 
phenomenon requires explanation other tloan that of the continiied 
growth of the Industry, 

Racial Factors . Various ercplanations liave been adva.nced from 
time to time that do not r-rovide entirely acceptable answers to the 
problem. For exanriile, it is sometimes stated that one of the ^ominant 
characteristics of the Jc-'ish Race is the ambition for economic in- 
dependence, - the O.esir-: of a y-'orlzev to boss his ovm shop. Even if 
this generalization is true, ambition is hardly an exclusively Jewish 
trait. The workers of other raced and inother industries are equally 
ambitious. To say tiia.t the Jewish Race lia.s a propensity for gambling, 
for taking chances at long odds, is equally inadequate, and for the 
same reason. Of course, the element of gambling plays a large part in 
the annual turnover of concerns in the Industrv, A small contract 
shop can be established on a very ragged shoe string, A minimum of 
capital is-.required. Machines can be rented and paid for out of 
current revenue. Workers are likewise compensated from receipts. If 
the landlord must be paid in advance, p.nd often this is unnecessary, 
that much. capita.l is required, but that is all. When the small shop 
is forced out of busiiicss there is a loss of money, and it is by no 
means stiggested that this loss is inconsiderable in the eyes of the 
loser; but it is ofter the case th^.t the contr-ctor returns to his 
former craft vdthout having lost more tlirin /le was vdlling to gamble on 
the venture, or, .through ba,nkruptcy proceedings, he manages to shift 



(*) See Table Jo. XXII, A'^-^endix to Part A , v. 81,, 



the "burden of debt to his creditors. The ease of entering business 
and the coirrparative'ly small penalties of failure are resioonsihle for 
supplying replacements for ttie i:^dustrial units eliminated hy the 
warfare of attrition, rather tlrnn any '^resumed racial chiiracteristics 
of Industry members. 

"Union Restrictions" . It is sdn.etiraes implied that some of the 
'blame for continuation of the contract system may he ascribed to 
"union restrictions", the implication being tha.t Union wage levels and 
other requirements have been unnecessarily high and have provided a 
"tent" under which it vfas possible for non-conformists to operate ad- 
vantageously. This explanation would a'opeal to be a case of misplaced 
emphasis. Unquestionable the growth of the contract system may be 
traced in'part to ?;age differentials existin;^- between union and non- 
union shops, and where such a differential exists, a drift of business 
toward lower ?;age levels is to be exoected. The essential fact, how- 
ever, is that the large number of smaU, scattered "outside" shops 
have been less ea.sily organized and controlled by the Union than the 
establisliments of the "inside" shop system. The responsibility of the 
Union is therefore not so much a matter of "restrictions" as of com- 
pliance and organization difficulties. 

Week-Vfork vs. Piece — 'ork . The week— v/or.k system in the Coat and 
Suit Industry remaii.ed in force fro'i its adoption in 1919 to its 
abolition in 1933. During this period non-compliance vdth the week - 
work provision was widcs^-^read, thus maintaining and i:-;creasing the 
differentials in cost between "inside" sho-is and their "outside" com- 
petitors, Week-vvorl: must be considered a. factor in the snread of the 
contract system, but it must be noted that as in the case of "union 
restrictions" the basic difficulty was one of enforcement and control. 
Regardless of the merits or demerits of the week-work system, the fact 
that uniform and complete control was not obtained throughout the In- 
dustry, and that regulation was less successful in "outside" than in 
"inside" shops, was responsible for the differentials. Under uni- 
form control in both types of shoxis, no advantage would have been 
created. 

The Jobbers' Re snonsib iljty. The explanation that the jobbers 
are responsible for stimulating;; the grov/th of the contract system and 
maintaining its evils for short-sighted and self isK purnoses , cannot 
be accepted as a basic rec^son for the survival of the contract system. 
Even if in some instances it may be true that rrorkers liave been en- 
couraged to open new shops on promises of work which could not be ful- 
filled, and even if the jobbers' desire to stimulate competition and 
beat down prices may have been a determining influence in such cases, 
it is too much to assume tho.t ^uch practices could liave been sufficierfly 
widespread to have played a substantial part in the grovrth of the con- 
tract system. 

In the last analysis the survival of the contract system has been 
due to certain technical and business conditions which have found the 
contract method of production caiDable of supplying the i^eculiar needs 
of the Industry, 



-20- 

The HecesGJty for Flexibility, A inarket dominanted by the exact- 
ing requirements of style and seasonxlity demands a mechanism suffici- 
ently flexible to exoand, contra.ct, and vary its production with groat 
rapidity, Throughout the history of the Industry the rate of style 
cliange and the dcuiand for style variety have sho'i'm. a steady increase. 
In recent years mere a^na more demands nave been ma.de upon the Industry 
for flexibility in the prodr.ctive meciianism, l-iot many years a.go it 
was possible to dispose of outmoded styles by distributing them^ through 
retail outlets in country toy/ns and villa.ges vifhich v/ere some distance 
from, the larger metro]'olitan shopping centers. The development of 
automobiles and roads, moving pictures p.nd magazines, lias not only 
tended to concentx'ate refdil selling in the larger centers, but has 
also had the eff ct of informing the consuTiers of style goods in the 
remote areas quickly and accurately on the latest variations in style. 

The contract system has given the necessary flexibility to the 
Industry, but it is nevertheless wrong to assume that adequate flex- 
ibility can be obtained through the contract system only, and it is 
possible that if it had not been for certain other fa.ctors, an en- 
tirely different industrial structure might have developed, ;, 

Domin ance of Merc han dis ing vs. ??anufa cturing Considerations, 
Levine believes that the f^atidcLmenta-l rea.son for the continued exist- 
ence of the contract system lies in the peculiar relationship between 
marketing and technical evolution in the Industry, (*) Production 
is dominated by market consideration to a degree unusual in other 
industries. To be successful or to snJTvive in this Industry, a man 
must be a stylist a>,nd a salesman. He must interpret style trends 
(or copy the "hot" numburs of his com-oetitors) accurately and quickly. 
He must dispose of his stock immediately to meet the weekly payroll 
if his capital is small, and to save his inventory from style obso- 
lescence in any case. The teclinique of production is a secondary 
matter. 

It is possible that there is little room fsr technological 
development. The vagaries of style reqiiire small unit production by 
small unit machines. Perhaps the existing machinerj'- has already 
reached its peak of development. It is also possible that factory 
management developed to the nighest degree of efficiency, might not 
result in stiff icicnt economics to give prono-onced advantages to well- 
managed shops. In any event, the fact is that such advantages feve 
not been created. The attention of the Industry has been concentrated 
on other matters, and development ir teclmology and management liave 
been more or less neglected, 

V/ithout minimizing the importance of this factor, it should at 
least be noted t"n£..t the above deduction is negative rather than posi- 
tive. In other v;ords , the fai lire or inahility of the Industry to 
produce management economios cannot be considered an active, moti- 
vating force for maintenance of the contract system, but is rather a 
contributing circumsta.nce in i^reventing the development of some other 



(*) Levine, page 409, loccit . note p. 1 supra. 
9714 



-21- 

more stable system. Taking the "inside" and the "outside" shop 
systems as they are, with the existing state of teclinological develop- 
ment, it is evident that there h;xve "been positive advrntagcs in favor 
of the contract system. Even if revolutionary advances Irnd been made 
in the technique of production, it does not necessarily follow that 
such developments would hjive favored exclusively the "in^-ic^e" shop 
system. 

The Gorr^etiti ve Adv antag e. The most satisfactory explanation 
of the contiact system's continued existence and groviith would seem to 
lie in the differentials in costs obtainable through the contract 
system in competition with the "inside" shop system on a dollar and 
cents basis. In the narrow sense, the Industry has found the contract 
system economically advantageous. It produced goods more cheaply. It 
is unnecessary to repeat the reasons v/hy this ha.s been possible, but 
the fact is inescELpablc that a mantifecturer or jobber, unwilling or 
unable to maintain an "inside" shop equipped for peak season production, 
has been able through the contract system not only to conduct his 
operations at a i.iinimum financial risk, to iaiov; his exact production 
costs by settling contract prices i' advance, to avoid the carrying 
cliarges on equipment which most necessarily remain idle for a large 
part of the year, but slso, under the lonregula.ted conditions which 
have prevailed, to obtain meas-fxable sa-vings in labor costs through 
the operation of the "juggling" of contractors, 

ECOHOMIC WASTES 

In spite of the manner in "'hich the contract system has met the 
peculiar requirements of the Industry and given competitive advantages 
to those who employed it, evaluD,tion of its effects indicates that the 
economic wastes outv/eit'-h the economic advantages, 

n The Governor's Advisory Commission in its Final Recomm.endations , 
makes the following comment: (*) 

"This oxitsidc system of -nroduction is fraught with waste 
to all concerned, Coimting a.ll of the i:artners in the 
sub -manufacturing shops, there are several thousand men 
whose energies are mostly spent in going from one jobber 
to another in search of orders. Their shops are, for the 
most part, too small for well-organised, systematic pro- 
duction methods. Yet in the at';gregate they occupy an 
enormous amount of floor space which is in active use 
for only about six months of the year". 

True economy must be measured by the sum total of general industry 
welfare, rather ttem by advantages gained by individ^jals or groups. 
By this standard, it is evident that the contract system has failed to 
give true economy. The economic wastes due to the duplications of 
effort in the performance of the productive processes by a imiltiplicity 
of small shops are perhaps less in actual importance than the immeasur- 
able losses caused by destructive competition. 



(*) Governor's Advisory Goinmission, Vinal Recommendationg , pages 
4 and 5, loc.cit. note v- 1 sug^ra. 



-22- 
CHAPTS II 
ZZGULATIOII OF CCIITHACTDR-J0B33~- ?I]LATI01ISHIFS UlTDER USA (*) 



TH3 COAT AlID SUIT CODI 



The Code of Pair Cor.r-;elition for tne Coat and Suit Industry was 
submitted on July 13, 10:i'^: , and ai ■roved on Anc;ust 4, l,:??, being the 
fifth code to r^c^ive the President '" a^jroval. Under the threat of 
an industry-i"ii'ie strike, {'*") nev' collective a:;r3'=',r.ent s had been si,''aied, 
v'hose provisions v/ere subetrut i-ll;/ the s'^ue as the -nrovision'^ of the 
pro-QOsed code. In the t.;su..crl :>t of the herrin; for consioer-t icn of the 
code, held on July 30, I'o?"^, tho , eneral iur^ri^ssicn r;ivfn is that the 
negotiations had been conducted in a spirit of r- uicabl^ coo'^orat ion, 
and that there had been little difficuliy in roachisig a:-;ree;r.-=nt . On 
page 42, Mr. Samuel Bluab e r;;; , Caans"l for the I.:ercVi:^xit 3 Ladies C-ar/aent 
Association (jobbers), rnalces the lollo-'-'in,:; stetei.ient : 



(*) '.Tnile the contract system is employed to some extent in nearly 
all of the branches of the Women's Ap"j3,rel Industry, the HSA 
exiaerience develovjed very little -pertinent information on the 
subject except uj.ider the Dress anc the Coat and Suit Codes. 
Table XXI , AoTendi- to Pert A, , ■:>. 80. indicates the provisions 
for regulation of the contr£ictor- jobber relationshi-os as a.dooted 
under the five -orinci^al women's ariarel codes. Viliile this Table 
¥70uld seem to indicate that the jrograia adopted by the Blouse and 
Skirt Industry was fairly com-orehensive, and v.hile jn fact the 
problems of the contract system i.^ere some'-ziiat active issues in 
the iSiouse and Skirt Industry during the code ■:)eriod, the state 
of organization of this branch of the Women's A'T^arel Industry, 
aaid the fact that its natural boundaries v/ere not clearly marked 
with respect to the contractors with wliom it dealt, made it 
impossible to develop information of value to this study. A 
similar situation existed under the Infants' and Children's I7ear 
Code. Tlie Cotton Garment Industry, of which the Housedress 
Division is the only brsjich connected with the '.'fomen's A>mrel 
Industry, is laiov/n to employ contractors to some extent. Tlie 
geographic diffusion of the Housedress Industry, however, and the 
relatively large- volune, section-work method of o-oeration normally 
employed, does not fit it "for a wide use of the contract method 
of produ-ction. It is therefore under the Dress and the Coat and 
Suit Industries alone that important develooment s in the regu- 
latio^i of the contractor- jobber relationshros occurred under 
the codes, and this Chaoter is limited to the recoimting of the 
ex";5eriences of these two codes. 

(**) Tlie IPiA "Tile record is incouplete on this -^oint. Alex Thomson, 
Administration Ki^mber on the Coat and Suit Code Authority, 
confirms the Y/riter's im-^ression "iven her^. 



9714 



-23- 

"It is significant-** that for the first time in the history 
of this industry, the three ihr^ortant I'^ctors *** li'we 
voluntarily collahorated anc" have foimd a -vay to solve their 
difficulties. Thpy have, thro-a^-h this code, agreed uoon a 
formula, disregardin;: completely their individxial ireference, 
and have considered this formula industry-wise only". 

The fact that relinouishing the Drinciple of Vi-eek-vjork had not 
been obtained by the manufacturers without o-o;":iosition from the Union, 
however, is borne out of the objections of the Union plpcec? into the 
record, "Da^^es 77 to 9S, si:2:iied by David Duuinsky, Prpsir'ent, Intern.-^tion- 
al Ladies Garment ""orkers Union, Isidore Hauler, Creneral ivkui'i, -er. 
Joint Board of the Cloalc, Suit, Skirt r-nd ^-leefer Kanufacttirers Union, 
and J.iorris Hillcuit , Counsel. This is r.n ,'-->,r,ruj:ient on -orinci-ile rs.ther 
than an attem-jt to alter the -provision of the code or of the collective 
agreement, which is demonstrated by the expression of the Union's 
attitude throiigh Ur. Dabinsl^'s statement, page 34-0: 

"I 'vant to say to you gentlemen thrt I nm rea.dy to tell you 
that the workers consider the -liece-wor]: system as a terrible 
bugaboo, but if there is a fair minimum guaranty of wages, 
and if there is the short woric-weck provided, then some of 
the dpjigerous teeth of this devil are being taken out, but 
it remains a devil anyhov.-". (Arplause) 

Tlie Bargain, - Pi e ce-'J ork for Li-it - ^t ion o f Co::t r actors . It is 
evident from statem^^nts subseouently made by Harry Uviller, representing 
the contractors, mid Isidore ITagler, of the Union, (*) that the' intro- 
duction of the piece-work system was obtrinc^d over the OT^osition of 
the Union only because limita.tion of contractors was provided. The 
Origins,! provisions appear as the llinth Article of the aT^roved code, 
and are identical with the provisions as finally ado-ited in the 
amended code, ap-oroved August 30, 19:'4, except that the final version 
contained the second paragraph re'miring net no discount , net yardage, 
and no charges against contractors exce-^t for materials furnished. 
Article VII of the ai.iended code reads as follov.-s: 

"ASTICLE VII— C01:TIl4CT0:xS 

"All members of the Industry who cause their garments to be 
made by contractors and sub-mFjiufacturers ^shall designate 
the contx'actors actually renuired, shall confine and dis- 
tribute their work equitably to and ajnong them, and shall 
adhere to the payment of rates for such -oroduction in 
an amount sufficient to enable the contractor or sub- 
manufacturer to 3ay the employees the wages and earnings 
provided for in this Code, together with an allowance for 
the contractor's overhead. 



(*) See Transcri-pt of Hear in.: , Coat and Suit Code, (;;ay •^-, 1934), 
pages 43 and 64. 

S714 



-24- 



'Transactions with contractor? and/or r.ub-r:ianufacti:.rers shall 
"be on a net basis subject to no discoimt. To charges shall 
be made to the contractors a.nd/or s-o.b-manufacturers or a^;ainst 
their accoiint er.ce'pt for materials f\ii-nished. Contractors 
and/or sub-manufacturers v/non charged will be charged for the 
net yard,at:.e of materials furnished them. 

'To insure t",ie observuice of this 'Trovision, the Cod.e Aii.thority 
named in this Code, together rdth the. Arijninistrator, shall 
formulate provisions to carry into effect the -ouroose and 
intent hereof. " 



Tlae Inter ?r e tat ion o 
The true intent of t^iese 
contractors is not arDare 
was never any oii-estion, h 
placed upon these provisi 
hearing held 'Jay 4, 1934, 
Article YII was interpr'jt 
limitation. Objections v 
Coat and Suit Industx-y (* 
wholesaler or manufacture 
designated, and does not 



f Arti cle YI I Ae Limitation of Contrr^ctors . 
provisions with respect to the limitation of 
nt from the laTiguage of Article YII. There 
owever, as to the interpretation and intent 
ons by all elements of the Inc^^U-stry. In the 

there is abundant testimonj'' to indicate that 
ed and a/o:^lied as a reouirement for strict 
ere raised by the m.embers of the llew Jprsey 
) to "the i.iterprr-tation * * * which limits 
r to the contractor or sub-manufacturer so 
allow aaiy change in * * * designation, * * *". 



Fro'osed Modifications . An atte:.vit -'as mp'^'.e by Ilr. Saimiel i^lumberg, 
representing the jobber.s' association, to introduce riialif ications to 
Article YII. S-abstantially the "jurjose of this Tro-iospl "'as to ^^ive 
flexibility of the -orovision to -jermit additions, subtractions, or 
changes in designated contractors for cause, in accord^aice with the 
business ren-i.irements, changes in tj^je of production, financigl condition, 
aiid increase or decrease in business, of the jobber, aiid the ability of 
his contractors to satisfactorily perform s-oecific types of vrork. 

Mr. Uviller, representing the contractors' association, objected 
emphatically to these proposals, stating that looseness of limitation 
would -oerrnit wholesale discharge of contractors in slack seasons, and 
cause kickbacks and other violations of the code and the agreeraent. (**) 
He further stated that before drafting Article YII in its present form, 
the question of malcing Qualifications as suggested by Lr. Blrunberg had 
been considered, but that at the suggestion of Deputy Administrator 
Howard, and Messrs. Hillman gnd Sogers, the nualifications had been 
omitted and the language of the "provision simplified, with latitude being 
provided for necessary exceptio2i:' by the general clau.se reruiring the 
code_authority and the Adriinistrator to forimalate provisions to carry 
into effect the -ouroose and intent of the provision. He further stated 

(*) See T ranscri-ot of Hearin ,;;. Coat and Suit Code, (May 4, 1934), 

pages 4 and 5. 
(**) See Transcript of Hearing , Coat and Suit Code, (May 4, 1934), 

page 44. 



9714 



-25- 



for the Aiiierican Association that if n-ualiiications of Ax-ticle VII were 
■oermitted, he v.-o^uJld -Dropose thnt all of Aiticle VII he eliminated from 
the Code. (*) 

The Legal Status of Article VII on Limitation . From a strictly 
legal staaidnoint, the issue as to whether or not the lan:^'aa:;e of the 
code could be so interr^reted as to rcuire absolute limitation vas 
never formally decided. It is the v.riter's recollection that shortly 
"before the Schechter Decision, this ouestion ras raised informally with 
the De-outy's office, and that in discussion with Division AiMinistrator 
M. D. Vincent, and Mr. S. E. Elwell , Le^al Advisor, it v;as determined 
that in order to clarify the intent of the code provision on this point, 
an amendment would be necessary. (**) It is probable that no action v/as 
taken toward the submission of this amendment, due to the expected re- 
submission of the code as a whole under legislation to succeed the 
National Industrial Recovery Act. 

Hegardless of the legal strength of Article VII, with res-oect to 
limitation, the essential fact is that under the operation of the Coat 
and Suit Code a jobber was limited to r, specific nimfoer of contractors 
allocated 'to him on th« basis of prodiiction uotas, aiul that he could 
neither change nor reduce the number of hir- contra.ctors without ujider- 
going a rigid investigation; lil;ewise, contractors were prevented from 
accepting work from any but the Jobbe- i-dio nad designated them. 

Vto^ooseaI of the Cont rac tox^s to Abolia h Limit ation. Vo amendments 
or changes in the original -provisions of Article VII were submitted to 
or acted upon by the A.^jnini strati on during the code period. A curious 
situation developed, however, in the siring of ISG'l. Tlie contractors 
in the Coat and Su-it Industry, v,-ho for twelve years or more had been 
fighting for the limitation of contractors, apparently decided that 
limitation under the Coat and Suit Code had been more of ah evil than 
a benefit from their viewpoint. 

At a meeting of the Coat and Suit Code Authority, held on February 
7, 1935, the American (contractors) Cloalc and S-ait Iia:mfacturers 
Association, InC. , through its representatives, Harry Uviller and 
Joseph Schwartz, iroiosed that an -imendment to the Code be adopted which 
would delete from the first laragra-^h of Article VII that portion which 
referred to the designation of contractors actually reruired. (***) 



(*) Trajiscri-ot of Hea ring , Coat and Suit Code, (liay 4, l'"-'34) , page 
64 et. sen. 

For further evidence on the manner in which the Coat and Suit 
Code Authority interpreted and adinini stored Article VII as a 
reouirement for strict limitation, see Proposed I.iaJiual for Deputy 
Directors , page 26, (1I?A Coat and Suit Code File); also Code 
Authority lan utes. dated Se'ot. 6, 1933, Jan. 4, aiid July 25, 1934, 
and Feb. 7, 1935. (illA. Coat and Suit Code File, Code Authority 
Minutes Folder.) 

(**) i'iessrs. Vincent and Slwell confirm the impression given here. 

(***) See Code Authority M i mites , Coat and Suit Code, Feb. 7, 1935. 
(1I3A Coat and Suit Code Files, Code Aiithority hinutes Folder) 

C714 



Accompanying: the proposal is a letter outlinin^j the position of 
the American Association. (*) In suoptance this letter st-tes that 
the one aaid one-half year's exoerience with lirnitn."'". ion of contra.ctors 
had encouraged rather than diminished the forces of discrimination and 
the po\7ers of the jobhers aiTainst the contractors to vhom they y/ere 
"wedded". 

It is difficult to draw from the many allpgations made in this 
letter any s'oecific complaint vv'hich would tend to condemn the limitation 
of contractors as such. It may even he inferred "by reading t-tween the 
lines that the ohjection of the contrcctors v^as not so much against 
limitation as acainst the manner in which code provisions in general, 
and contractor re.g'alations in particular, had "been enforced. This 
letter states that contractors ha.d not received their enuitahle share 
of ^^rork or adeouate -oa^z-ment for the work distributed, and that "with 
but one door open to him and in constant fear that that too may be 
closed, his resistance to pressure was far lower than "orior to the 
installation of the new system". JVirther statements a„rp made to the 
effect that the code a:athority had not effectively regulated the 
giving of work to undesignated soxirces, or the eouitable distribution 
of work, particularly in cases \idiere "inside" shops -ere involved. 

The seemingly inexplicable statements and attitudes of the 
representatives of different fa.ctions within the a'Toarel trades could 
sometimes be traced to the existing strategic and pplitical situation 
between the elements comprising the Industry. To what extent, if at 
all, the move of the coat and suit contractors to do awa,y vdth limi- 
tation may be attributed to some such strategic or political situation, 
there is no means of telling. ITnatever the real reason may have been, 
this reversal of position on the part of the contractors iTnist be 
considered a significant commentary u-oon a progr .m of strict limitation 
strictly enforced. It serves particularly to emphasize the necessity 
originally noted by the Governor's Advisory Commission for a certain 
degree of flexibility in the administration of any restrictive 
regulation. The principle of limitation may be entirely sound, but 
time and experience are necessary to the development of administrative 
policy and procedure, if the benefits to be derived from limitation 
are not to be counterbalanced by the evils of two great inflexibility. 



THE DRBSS CODS 

negotiations on the provisions to be contained in the Dress Code 
were commenced immediately following the 'lass^e of the Act. (**) 

(*) Latter signed by liarry Uviller and Joseph Schwartz, P^enresentatives 

01 the American Clo^k and Suit Hanuiacturers Association, Inc. 

(IIHA Coat and Suit Code File, Gener.-^l Code Authority Folder) 
(**) Simon, Walter, History of th e Code of Fair Corn-pet ition for th e 

Dress Indus try, (Sf.-ot. 23, 1955,- pages 14 to 16. 

(In N?>A Files, Dress Code) 

9714 



-27- 



Tlie first ou^blic hearing on the proposed code was held on August 23, 1933. 
A week or '^o ^^rior to this hearixir, the Union harl c.-'lled an industry- 
wide strike, the -primary mroose of vhich vas to consolidate the organ- 
isation of the Industry in the IJev York Area, tut which also had as its 
objective the revision of collective a,3reei.ients. Tlie strike v:as success- 
ful in the accomplishment of hoth of thess objectives. Certain matters 
were left open to te de"':eruined l)y the result of the final u%otiations 
for the code. Among these ?rere the -irovisions relating to contractor- 
jobber relationshros. It nas understood that the code provisions to "be 
adopted on this sx^bject would cOitcmatically become a "oart of the col- 
lective agreements. (*) 

At the hearing of August i3, 1033, (**) the chief point of con- 
troversy was on the Question of the decree of limitation of contractors 
to be provided for in the code. Tnis uestion was the chief bone of 
contention throughout all negotiations • riorto the adoption of the 
code aiid continuing until the Schechter Decision. 



(*) See Tr3.ngcri-ot of Hearing, Dress Code, (Feb. .7, 23, 1233), 

pages 13 and 14, E. H. G-itchell. 
(**) See Trajiscri-jt of Hear ing, Dress Code, (A-u^. 23, 1935), "oages 

111 - ino. 



9714 



- 28 - 

Difficu-lties in Obtaining Agreement on Code . iTnen the Code Tas 
su.'bi.iittsd. in fin?,l for-i for approval by I'dA. it rras returned for the 
purpose of havin;; representatives of the sponsoring associations ini- 
tial th:; subnitted draft. The contractors refused to accept the provi- 
sions as the:" stood, aiid a stoppage nas called hj'- the United Association 
in the early -ocrrt of Octoher, 1933. :To authentic records of negotia- 
tions condvicted during this stoppage are a.vailable. It is l-:no\7n that 
G-rover V.T.ialen, i'PA Adininistrator for "ev Yorh City, acted as nifediator, 
and that, the contrs.ctors "ere finally persuaded to call off the stoppage 
and to accept . the code provisions as proposed. (*) 

Suhsecuent developments indicate that the contractors had yielded 
in the "belief that changes could he i^mde at a later date iftthe provi- 
sions as adopted proved umsatisfactor;". 

l.Ir. T.'illiazi Davis, Co-'onsel to the United Association, nade the 
follo^-fing statenent on heha,li of his Association in a brief subnitted 
in connection -ith the proposed a".iendnent to Article VI, Section 2 (d), 
on the keeping of uniform tine rjid i-ja'^roll records: (**) 

"In spite cf rn alleged -Qiicerstcuiding and appreciation 
of our diihiculties --ith. the jobbers, the Administra- 
tion, b^' repeated conpronise unon conpronise, ejid 
patch-rorh provisions — in their attenpt to reconcile 
the opposition of the jobbers to our proposed renedj'- 
of li-.utation of contractors — brutally emasculated the 
renedies '.'e proposed to cure the ills of the industry'. 
We realized at the tir.e of their adoption the utter 
f-atilit;^ and ineffectiveness of the provisions of Article 
VII of the Code to fi:: responsibility upon the jobbers 
to eliminate the evils -orevniling in the industry. Tie 
Trere urged to ado;ot se.. le as an e:qjerinental neasure, 'jith 
the assurance that the provisions could and vrould be 
amended in the light of experience if they 6.id not accon- 
plish their puroose". 

Apiproval of the Code . 'Hhe Code of Pair Cor:petition for the Dress 
manufacturing Industr;"- vas ao iroved on October 31, 1933. 

Provision for lle.guLation of Contractor-Jobber Relationships . 

Article VII of the code, under the heading of "Hegulationships BetrrHen 
Uanufacturers and Contractors", reads as follo'Ts: 

1. (a) All manufacturers and/ or jobbers rrho cause their 
gar:.:ents to be made by contractors shall adhere to the payment 



(*) Letter dated Oct. 5, 1933, fron Sylven. Gotshal, Counsel, 
national Dress Manufacturers Association, to General Hugh 
S. Johnson, Administrator, IIBA. 
(In ITSA Piles, Dress Code) 

(**) henorandum, subnitted by The United Association of Dress Manufac- 
turers, Inc. , page 2, (In ITPA Files, Dress Code, General Amendment 
folder) 



-29- 



of rates for such production, in an amount sufficient to en- 
able the contractor to pay the omnloyr'^s the vfages and earn- 
ings provided in this Code and in addition a reasonable pay- 
ment to the contractors to cover overheau. 

"Where a contractor establishes th^t there has bep:n an under- 
payment made by any manufacourer and/'^r jobber under the pro- 
visions of this Article, such manufacturer and/or jobber 
shall be liable for such underi:)ayment , provided that claim for 
such underpayment shall have been made within two weeks of the 
next follov/ing customary accounting settlement- r)eriod. When 
any such claim for undcrpayiaent has been np^dc by a, contractor, 
such contractor shall open his boohs of account bearing on such 
claim for inspection. This clause shtll not be construed as 
diminishing the ri^-hts of any employee to an^'' claim for under- 
payment aij,ainst the parties who caused the und e .n^ayment . 

"(b) Manuf ' cturers and jobb'-^.s who ca.us'^ their fjarraents to 
be made 'oy contrrctors shall imraediately designate the number 
of contractors to meet their business requirements. Within 
one week of the "effective date of this Code the nianuf .-^cturers 
and jobbers shall re^^ister the contr.-^ctors so designated with 
the Code Authority, and thereafter re ;;ister any a.nd all sub- 
sequent changes. 

"(c) This does not abridge the rit_,ht of the manufacturers or 
jobbers to add to, subtract froiii, or change their contractors, 
provided that such additions, subtractions, or changes conform 
to the business reqiiireraents of the manufa.cturers or jobbers, 
and is not intended to discriminate against the contractors 
or workers; and nrovidcd further, that such chai\,'es or addi- 
tions, are not made for the ouroose of evadin^, the established 
wage scale provided for in this Code plus the contractor's 
overhead. 

"(d) - The Code Authority, subject to veto by the Administrator, 
shall have the power to "orevent a ■ir: ctico on the pa.rt of a 
jobber or manufacturer of unjustly or unreasonably di-scrimina- 
ting in the distribution of work .^^ s b'etwcen contractors which 
might unfairly deprive grcu-os of vrorkers of an opportunity to 
work. 

"(e) In the distribution of wol-kj ;p.anufactiircrs a.nd jobbers 
shall have the right to em-^.loy contr-ictcrs on the basis of 
type and the equality of the \7ork performed; on a competitive 
price basis, provided the priCo is sufficient to pay the 
minimum wages provided for ih this Code and a reasonable 
overhead to the contractoi*} and according to cx-oerience in 
obtaining deliveries on schedule; but this sh£:.ll not be exer- 
cised as a device to evade the "ournose of this Articl', 

"(f) After further study the Code Authority, with the ap- 
proval of the Adrainistrator, shall iiiake rules and regulations 



to further effectuate the piirnose of this Article as stated 
herein. 

"2. It shall be unfair competition for pny manufacturer and/ or 
jobber except by use of the uniform order blanl: to be pro- 
mulgated by the Code Authority after bein._- ap^^roved by the 
Administra,tor. " 

Comparison vyith Co -.t rnd Suit Provisions . The essential differ- 
ence betreen the provisions ador)ted unaer the Dress Coc'.e -nd those 
which haa previously been adopte.i under the Coat and Suit Code, v/as 
that the Dress Code did not require that v/orl: should be confined to 
designated contra,ctors, and th&t there were a number of qualif ica.tions 
introduced vhose effect was to permit considerable l::titudo and dis- 
cretion on the part of the jobbers in the chan^.in,^- of contractors. 

If the majority of the Industry a.s represented by the Code 
Authority had wished to intcrr)ret Article VII more strictly than the 
language of its provisions inioliea, a degree of limitation similar to 
that which was obtained under the Coat and Suit Coie might have been 
established. The fa.ct is, however, tliat a liiajority of the Code Author- 
ity was antagonistic to thp idea of strict limitation. In actual ap- 
plication, Article TII of tlic Dress Code on desi.piption: resulted in no 
more than registration of contra.ctors with no restrictions on changes 
of dcsigna,tion. The provision was a cor-nromise v/hich never sa.tisfied 
the contractors or the Union, and which led to continued controversy 
throughout the life of the code. lo was alleged by the contractors 
that: (*) 

"Contra.ctors were :alcen on a.id discarded by jobbers indiscrim- 
inately. The Code provisions for registration of contractors 
were openly violaGsd. The jobbers fj-mloyed as raany contractors 
as they felt would serve their pur-^oses. The old system of 
juggling of contractors for the -pur 10 so of bcatii\,' dov/n prices 
continued . as in the orc-Codo days. Hew contr ctors v/cre set 
up in business by the joboers while eld contractors and their 
workers were starving. Job 'crs through con2iiv;,ncG with favor- 
ed contractors sot up sham inside shor)s for the purpose of 
circumventing their obligations under the Collective Agreement 
afid the Code. 

"The raprehensible practice of "kick bncks" (secret rebates) 
crept into tlie industry, a premium was placed on cheatint^ and 
the hitjhest reward went to the most unscrupulous. Neither the 
impartial machinery set up in, our collective agreements not the 
adjustment agency of the Code Authority could check or al- 
leviate these i_,rowini^ evils. The number of cases invcf-ti.,,,^ted 



(*) Memor a ndum submitted by United Associrtion of Diess Manufacturers 
Inc. , page 3, 
(IN NRA, Files, Dress Code, General A'.aend:nent Folder.) 

9714 



-31- 



was inc.i45;;iif icfnt in contrp.st to tlie nunioor of violators; the 
few thousand dolla.rs refunded bj thr jobbors both' to the work- 
ers and contrctors for underpayraent s barely scratched the 
surface. Only one jobber v/as ;orosccuted criminall;- for code 
violations and that case is still -lending undct'-^rmincd. " 

The Stop v ^., e of A'-iril, 1 954, any. Ayioi nt .aont of Comraission. 
Durin^ tlic .: rll scr'son follov. 1;^, t c ado->tion of the code, the Dress In- 
dustry c.-Joyed a ton;oor.:ry a.nd short-live. •■>eriod of T)ros-)'.:rity, but 
the operation of the jorovisions ado:oted under Article VII was unsatis- 
factory 'CO tjic c out rr.'C tors. When no progress in the adjustment of the 
conflict vas niade throuiCi conferences with the jobbers' a,sPocistion, 
trie contractors attera-.-sted to ^ain their ezids by direct action, and on 
April 16, 1934, called ■, stoppage of all worh for jobbers. On April 31, 
1934, G-en'-ral Johnson telo .■ aphed to Samuel Oxhor:'. o." the ''nitcd Assoc- 
iation, l-equ'-^sti-.it, th'^t in the interest of Industry hari.iony, the stop- 
page be tormina^ted, ch-'t a corruAisJion consistin.i of -'Jyres H. C-itchell arx 
Adolph i'eldblum be a-'-noint'- ;i to rTial-re invest!,^ .-.tion and recommendations 
for remedial action within fifteen drxys, and statin^ that "you may 
count on the full support of the. 1. tional Hecovpry Ac'aninistration in 
eivinti' full effect to any proper dfterrnina.cioji.-.. (*) 

The United Association accepted Gen.^-r-'l Jolrison's proposal, the 
CoiTiiidssion was ■ p Tointed, and the ntoniF^.c vas ended on April 23,1934. 
(**) Under date of A n-il dC, 1934, the United As-' oci: tion had pub- 
lished an advert icni.iciit in th'" \7o,iion's Wea.r Daily, under the headin^i;, 
"lU THE. GOUllT OF PUBLIC OPI'IOr." A copy of tlds advertisement is in- 
cluded in the Appe;idi>:. (***) Aside from the char^-es made a.^^ainst the 
Fationa.l Associ.'.tion in this advertisement, v/hich comijlain of wholesale 
violations of the code and the collective agreement, certain .^emedial 
sU;^^estions, c-rc included which arc substantially the recommendations 
later proposed by the contrr.ctors as an amcr.d.mcnt to the code, upon 
which a y.xblic hearing was held on February 27 arid 38, 1935. It is in- 
teresting, to note that these -proposals a„re reoorted as iia.vin^ been first 
presented on l-Iarch 12, 1934, and thi-t nearly a yea.r had elapsed before 
they were loriinlly submitted to the National Hecov-- r;'- A'iministration. 

RecomiVicnL-'-'tions of t""'? S"ocia.l CoiTimis pion. The first reiort of 
the ComuniFsion was issued un.'.er date of ilay 15, 1934. It included 
recommendations for stran^thening the enf orcenicnt -a.chinery, for the use 



(*1 Te lo^.ram fron C-cn. Huj/h S. "johiison, IT ■A^Aex.iinistra.tor , to Samuel 
Oxhorn, Reprosentativa of United Associ tion of Dress L'anuf 'cturers, 
(dated Aaril 31, 1934). (in IJRA Files, Dress Code) 

(**) Tele, ram d' ted A:rril 33, 1934, Samuel Oxhorn to Gen. Ku^^h S. John- 
son. (Accoatin_. --roposal). 

Tele: ram wrt-.c. A^nril 13, 19[;4, iron "Syrcs H. Gitchell to Sol A. Rosen- 
blatt, F.la Division Administrator. (-:eportin United' s acceptance «f -jro- 
posal, ana recucstinti' official a.paointmcnt) » 

Tele gram da,tcd A .-ril 33, 193.-., fro.i Gen. ""'.ij: S. Johnson to Byres H. 
Gitchell and AdoliOh F'-ldblUi-n. (ap -jointip t'ncm ; s S-oeci..l Comnission)* 
iiemorand um d; teu Oct. 9, 1934, submitted by Yrilli.-;..i Davis, Counsel to 
the United Association, in connection with nro-oosed amencjiient to Ar- 
ticle VI, Section 2(d), ■^p.-^cs 5 rind 6. (in ITRA Files, Dress Code ) 



of uniform records and uniform order olanl:s, and for certain spcifica- 
tions as to procedure. The Commission submitted these preliminary 
recoramendc.tions to the Code Authority, but the contractors refused to 
participate in the meetin&s of the Code Authority without having more 
definite recommendations on the basic controversial question of limi- 
tation of contractors. 

A final report of the Commission was pres\-;nted at a meeting of the 
Code Authority on September 30, 1934, but again failed to maize definite 
recommen.;ations on the "specific matters contained in the contractors* 
proposals. (*) 

From May, 1934, until February, 1935, all activities of the Dress 
Code Authority were overshadowed in importance by the bitter .conflict 
over the contractors' proposals and the Comr.ussion' s recommendations. 
Meetings Y'lere held a^-ain and again to consider this subject, but a com- 
plete deadlock was the only result. It was finally decided by the con- 
tractors that they would submit the pro-iosrls to the Recovery Administra- 
tion in the form of a request for an amendment to the code. A public 
hearing was held on February 37 and 28, 1955. {**) 

The hearing wan called for the consideration not oi.ly of the con- 
tractors' proposals, but also of certain rules r-iid regul tions which 
had received the Code Authoricy's a-o'iroval, and which related to the 
procedure to "be adopted in the registration of contractors. (***) 

It is to be noted that these regulations were more than rules of 
procedure, in that tjiey prohibited the oivin._^ of work to a contractor 
or the acceptance of work by a conora.ctor until registration liad been 
approved. This constituted a concession on the -lart of the majority 
element of the Code Authority, in that it iraolied a degree of limita.tion 
not contained in the pcovisions of Article VII. 



(***) See Appendix to Part A . p. 83. 

(*) NRA Deputy's Dress Code File contains copy of the first, but not 
of the final report of the Commission. 

Transcript of Hoarinf^ , Dres-^^ Code, (Feb. 37 and 28, 1935), ho:v- 
ever, contains comilete testimony on the Commission's recommenda- 
tions. Pc-ges 1 - 53, Byres H. Gitchell. 

Final Recommendations arc reported on pages 17 and 18 of this 
Transcript. 

(**) See Appendix to Part A , pp. .87 - -88 for specific proposals 
at this he. ring. 

(***) See AiTDcudix to -^art A , p. 88 (Schedule B.) 



9714. 



-33- 



The contractors assumed that the !TM hf-d the ^ower of arbitration 
and of imposing such provisions as in its judgement were desirable in 
the interests of the Industry as a. whole. This impression may have 
been created by the active part olayed by NHA officials in persuading 
the contrc-ctors to accent Article VII in the first place, and by the 
assurrr.ce £,iven in J-eneral Johi'ison* s 'teled;ram of Ariril 21, 1D34, as to 
the supoort to be ^ivcn by the ¥RA in .riving full cffe t to any proper 
determinations of the Special Cormd. ision. (*) In the opinion of the 
Legal Division of VRk, howev'=>r, the EA did not ha.ve such power. (**) 

Following the herring of February 27 and 28, 1935, a number of con- 
ferences v/ere held by the Deputy's office vdth representatives of the 
contri.ctors, job -ers, and the Union, for the purpose of attempting to 
obtain agreement, \7ith the NRA. actiiifj as mediptor. These conferences 
failed in all res-iects except to em'ohasize the a-oioarcntly irreconcil- 
able differences of the conflicting groups. 

. Some time prior to the Suijreae Court Decision in the Schechter 
Case, instructions were issued to the Deputy's office to take no f'ar- 
ther o,ction on pending .?atte_s which v/erf not of the utmost immediate 
importance in the -nublic interest. Unless the position of the Legal 
Division had changed, it is doubtful if any action could have been taken 
by the Admini strati on on the;' contractor-jobber situation. It was de- 
cided thrt this question should be left in abeyance until the expected 
nev; legislation niic<.ht '"afford an op-iortunity for the !"ational Recovery 
Administration to take a.n active and influential part through its "dow- 
er to accept or reject the provisions of ^ new code, 

BASIC EL^E Iv EFTS OP TliZ PROGP-A:: 0? R FGULATIO'N. 

Under bath the Dress and the Coat and Suit Gides, there were cer- 
tain basic issues or proposals which fornied the framcv/ork of the gen- 
eral oro.-ram of regulation. Some of these proposals were aidopted und- 
er the codes, others v. ere imt into effect without specific code pro- 
visions, and others remained in an unsettled state of controversy. 



(*) Te legram^ , Jqhnson, loc. cit. note p. 30 supra. 

(**) No final rulin^ was obtrained on this point, but many confer- 
ences were held during the spring of 1935, between the Deputy's 
office and representatives of the LOf^al Division, at vAich 
Legal Division upheld the position that the NBA was ligiited to 
the powers of mediation only, and ch.at the oolicy of industrial 
self-goverruv.ent through raajority action of the Code Authority 
governed the adoiition of amendments. 



9714. 



-34- 



There were also a, numoer of rirocedi.iral, qualifyiiv:, acLninistr'^tive, 
and suirolementary proposals fna provisions, iiarticufo.rly under the 
Dress Code. This latter tjroup included such questions ;is the limi- 
tation of the jobbers' liability to a two-T;eeks -leriod, the retjistra- 
tion of contractors, the requirement for uniform order blan]cs, the 
submission of i^ayroll records, provision for trial periods, and reviev/ 
by the impartial machinery of contested requests for designation or 
cancellation of contractors. 'So irrplication is intended tliat these 
proposals were unimporta.t . A 1: r^^e -)art of the controversy over the 
program as a whole, in fact, hinged on the acceptance or rejection of 
these subordinate proposals. There was often substantial unanimity ofi 
the underlying principles of the general program, but agreement ?/as 
blocked on questions of the exact form and manner in which the prin- 
ciples were to be applied. The basic elements of the progr m of regu- 
lation, representing the de-iielopment of thought if not of action under 
both of the codes, may be condensed to the following five pro-oosals: 

1. Limitation of contractors. 

2. The establishment of i:)rico floors. 

3. The determination of prices by scientific 6stint-.tc, 
or "unit system." basis, rather than by competitive 
bidding, 

4. The settlement of prices on the premises of the jobber. 

5. Equitable distribution of work. 



-35- 

Th(> otji^ctive's of those prot)osals may "be classifieii under 
three headings; 

1, The objective of reiap dying the structural weakness 

of the system whereby t;he avpilahlp work is insuf- 
ficien-t to sUDoly the large number of small, weak 
units com-oeting for the business 

2, The objective, of limiting the extent of competition 

3, The objective of distri.^uting the burdea and minimizing 

the -orossiires of seasonalitv. 

General A ttitudes of t he In.terested Part ies. {*) V/hile gen- 
eralities on the attitudes of tho differnnt Industry pigments may 
seem to infply that one element or another is at fault, no such im- 
plication is intended, but it is necessary to report as clearly as 
possible the relative Tsositions occupied by the conflicting gfdups. 

In general, the major propooals of the -orogram of regulation >iave 
been sponsored by the combined forces of the Union and the contractors, 
and orposed by thp- joboers. Th;? "inside", shop manufacturers have 
occupied an interested neutral position, their general attitude having 
been 'constructive and syrapathctio to the establishment • of regulation 
calculated to stabilise conditions fcr the Industry as a whole, and 
to relieve thera of the competition of unregialated "outside" shops. 
Regardless of 'the chrTge.s somptimos made against the jobbers, which 
imply that they 'have occunied a w,ilfully obstruct! vt attitude to - 
industry staoilization, in fairness it must be said that the natural 
instincts oi self--or6-ser-vation and, of th-? desire to conduct one's 
business, venture on a -orofitabln basis, under the difficult conditions 
imposed by atylfe and seasonal r^guirements, will inevitably sharpen 
competitive practices to the degree r>crmitted by the relative powers 
of competing groups, and to the degree to which competitive practices 
are regulated and polic;>.d. It Hapnens that the interests of the 
jobbers as they see them have b^en generally o-snoosPd to the interests 
of other grouos, and the sincerity of thciir attitude on certain ' 
matters is beyond Question. 

LIl-iITATIOIJ OF COHTRACTORS 

The Jobbers' Point of View . TSThile it is difficult to describe 
in concrete terras the intangible factors which enter into" the success 



(*) The uns«5ttled status and continuous discussion of the problem 
under the-. Dress Code tended to produce relatively more testi- 
mony on the attitudes of the interested parties than was deve- 
loped in the adoption and administration of the Coat and Suit 
Code. The similarity of all essp^ntial elements of the problem 
in both branches of the Industry, however, permits discussion 
of this subject in general terms apx^lirable to either branch 
and to the Induatry as a '"hole. 



9714 



-36- 

or failure of negotiations lietvreen groups having conflicting points 
of view, it is nevertheless- re-latively easy to-. understand why the 
negotiations on limitation of contractors vrere prolonged over a 
considerahle length of time, and why the jobbers were reluctant to 
accept a strict form of limitation^, In generalj they may be said, to 
have accepted the princiT^le. of linitntion, but feared a possibly 
excessive restriction , on their necessary freedom of action. (*) The 
controversy was over the form, not the substance of the proposal for 
limitation. The jobbers' point of view may be summarized as 
follows: (**) 



(*) Transcript of Hear ing. Coat and Guit Code, (July 20, 1933), 
pages 187 and 188, Maxwell Copelof. 

(**) In order to present the composite vieiTpoint of the jobbers, it 
is desirable to draw upon severpJ different sources of informa- 
tion, many of which duplicate specific points, R;i.ther than 
complicate the summary by repeating a large number of references, 
attention is called to the following material on this subject; 

1. Letter dated Oct. 5, 1933, from Sylvan G-otshal, Counsel, 
National Associa^tion of Dress Manufacturers, to General 
Hugh S. Johnson, MA Administrator, (in NEA Eemity' s File) 
■ . ■ • (Dress Code) 

2; Report of Max Meyer j Industrial Advisor, on Proposed Dress 
Code Hearing, August 23 and 24, 1933, (iffiA Piles, Dress Code) 

3, Letter dated October 7, 1933, frpm C. H. D. Robbins, 
Acting Chairman of the National Association of Dress ■ 
Manufacturers, to General Hugh S. Johnson, 1^!RA Adminis- 
trator, (Enclosing memorandum on Limitation) (URA Piles 

Dress Code) 

4, Transcript of Hearing , Goat and Suit Code,, (July 20., 1935)^, 
pages 187 and 183., Maxwell Conelaf, 

5* Transcript of Hearing , Coat and Suit Code, (May 2, 1934), 

Supplement - .:.irief of Members of New Jersey Coat and Suit 

Industry, on the Code and Its Administration, pages 23 
to 25, 

64 Transcript of Hearin g, Coat and Suit Code, (May 4, 1934), 
pages 34 et seq,., Bliimberg, 

7* Transcript of Hearing , Dress Cede, (February 27, 1935)- 
pages 54 - 80, Mintz 

" 81 -150, Davis - ■. 

" 201 -230, Rubenstein- ..■■: 

" 231 -249, Lanzit ^ ■ , • 

" 249 -262, Rubin- 



9714 



-37- 

lilecessity for Flexibilit y. The jo'boer Relieves that there are 
le^^itiraate aiid necepsary reasons for changing contractors in ac- 
cordance v.'ith -oroduption schedules and s-oecific types of garments re- 
quired at di:fferent tines. He refers to the Governor's Advisory 
Com'iission's recomnendatxon as to the ■ "necessary freedom in securing 
samples and in chani^lng suh'-raanufacturers for cause shown." He states 
that there is a wide difference in the comToarative abilities of con- 
tractors in the i^roduction of s-necific types of garment. A jobber 
may oe operating on a silk line in the Fall and a cotton line in the 
Spring. Some of his contractors may be unaole to ^Tork on both types. 
Style chanA'es alao romiire flexibility in the selection of contrac- 
tors. Ti'iThen a jo'>bor is under tne necessity of experinenting with a 
large number of ;•, tylcoc he feels tnrt his ability to operate in the 
market would be cjeirioucily curtailed by confining his work to a limited 
number of outsidt ahop;;. It is al'^so undoubtedly the fact, even though 
it is not i.dvanued as an argument, that the joboer fears that too close 
a tie-up with a -umall group of limited contractors may place him at 
a competitive di-ondv.-^at^ge due, to unforeseen or unknown differentials 
in efficiency between his contract shops and the shops of his competi- 
tors. . 

.P otential, Abuse y . The, Jobber fears that if he is made 
responsible for the conditions existing in his designated contract 
shops, and is unable to effect reasonable changes for cause, the 
trading position ox the contractors will he so strengthened as to 
permit the contrrotors' to dictate- terrrts to the manufacturer. He 
also feels- that inf^fflciency and -.laxity, are encoixraged if the 
contractor has -nothi'hg to fear from the possibility of dismissal.' 
He points to the difficulty encountered in establishing the neces- 
sity foi^ discharging incompetent workers as an indication of what 
may happien under strict limitation. Under the codes it was also 
stated- that exercising the judicial function with resoect to the 
regulation of lii.iitation would pla,ce in the code authority a power of 
discrimination antagonistic to the interests of individual shops, and 
that this po^^'er mignt or abused by the code authority in enforcing the 
provisions of collect ivr-, agreements not contained in the codes. 

Le.'-ality . It was alleged by the jobbers that the prohibition 
contained in th'-' l-ition^l Industrial Hecovery Act against provisions 
tending to the o^tablisi.'iont of monopolies, made the inclusion of 
provisions for limitation in the codes . unlawful. 

Limitation Unn-ircsaar y. The jobbers maintained that the existing 
collective agroementa and other provisions ' in the codes, if properly 
enforced, would make it unnecessary that limitation be adopted. 

The Co ntrpc tora' Q- ^portun i t ies . The allegation was made that 
contractors, particularly , when the^^ had in their shops a large 
number of machines and workers, Mould not be .kept supplied with work 
by being limited bo one jobber as the sourci^ of all work. It is in-r 
teresting to note that the VJomen's Wear Daily (apparel trade paper) 
of November 5, 19?5, (page 9), contains editorial comment to the 
effect that in preparation of negotiations on agreements in the 
Dress Industry, erroiring January 31, 1956, the contractors are 
apparently divided in opinion on the subject of limitation. They are 

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reported to favor linitation of the Jobber to a specified group 

of contractors, but vrant the contractors ' to be free to take work from 

othejr sources. 

Mortality Ca nnot be Bl am ed on Auc t ion System . The Jobbers main- 
tain that the excessively high rate of business mortality existing in 
the Industry is a natural product of the '.7eak financial condition of 
the contractors, combined iTith the competitive pressures created by 
seasonality and' the rate of style change. The implication is that 
limitation r'ould not correct the basic evil. 

The VieTTpcint of the Pro-ponents . Those in favor of a strict 
degree of limitation, in addition to the logic of the recommendations 
presented by the Governor's Advisory Commission on the general 
theoretical benefits to be. obtained from limitation, state that evil 
conditions arising from the contract system require stringent 
measures of control, and that if there are any loopholes in the pro- 
gram, its effectiveness will be nullified. They allege, bad faith 
on the "Dart of the Jobbersj stating that the jobber desires to pro- 
mote and continue the juggling of contractors as a short-sighted 
policy calculated to yield benefits to the jobber at the exTDense o'f 
the Industry as a whole. They believe that looseness of limitation 
will permit and cause Ti'holesale discharge of contractors and will 
result in subsidiary evils such as kickbacks and other collusive 
violations of the. agreements and codes. (*) They state that the 
normal relationshio is in actual fact a limited and steady relation- 
ship between a joboer and a sijecific small grout) of contractors, and 
that "no decent jobber will stand for anything else". {**) They 
believe that the marginal contractor should .be eliminated and that 
the marginal contractor is the one who works for more than one job- 
ber. They state that the fear psychology created by unregulated 
powers of discharge is a basic source of instability and competitive 
pressures. 

PRICE FLOORS 

In general, the principle of establishing a price floor at 
which competition was to be checked has not been a matter of contro- 
versy. The provisions, in the various codes for the payment of an 
amount to contrp.ctors sufficient to cover labor costs and additional 
amounts for contractors' overhead, constituted the usual method of 
handling this problem. ' There were difficulties of administration 
and compliance., particularly on the question of a fixed percentage 
allowance for the contractors' overhead. It is obvious that an 



(*) Transcript of Hearing , Coat and Suit Code, (May 4, 1934) 
Page 44, Harry Uviller. 

(**) Transcript of Hearing . Dress Code, (February 27, 1935), 
page 176, Julius Hochman. 



9714 



-39" 
arbitrary T->ercentsi';e apiDlicaole to all orders and all shops, regard- 
less of the size of the order or the efficiency of the shox), is not 
an accurate or equitaole nethod of establishing a fair overhead. As 
a Toractical expedient , however, substantial agreement was obtained 
bet\7een the Parties on this method. Shortly before the Schechter 
Decision, the ^-^ritor discussed \7ith 1!. D, Vincent, then Division Ad- 
ministrator, IIHA, the possibility of establishing a sliding scale 
brsis for determination of contractors' overhead, different percentages 
being determined in ace^ordsnce T7ith the size of individual orders or 
the amount of production time represented by these orders. It is 
possible that further study along these lines might develop a method 
'•hich would be nore satisfactory than the method of single percentage 
adopted by the Dress Ir.dustr-- under the code. 

Another form of price floor which was adopted under collective 
agreeiA'ent, but 'lO^ i!'ier tl-ie, cole?, was the establishment of flat 
prices for givei rrioe range?, ci j,Krments„ Following a stoppage which 
occurred in the Dress Industry in February, 19S4, specific schedules 
of flat prices were agreed upon for price lines from $2.25 to $4,75. 
(*) The flat prices were intended to include labor costs plus Z5fo 
overheads The rigidity of these prices and their incapability of 
being adjusted to the v'ariations in style and workmanship existing in 
a given price range, -soon led to the development ■ of widespread "kick- 
back" pi-\-.o.r.ice5o iTrLe flat prices were no more tb,an.a temporary • 
expedient, introduced p.s a stop-gap pending agreement on the "Unit 
system''; (**) .. - . ■ , - . 

THE U lT.^ yilz'm'- "'- ^ ' 

yhile the settlemnnt of price'', h-' a scientific system cf expert 
analysis was' no i: conta^ned m eith'-r the Coat and Su'i u or the Dress 
Code, the Coat -^-iid SpI':. Code provisions requiring clas-jified average 
hourly earnings un a piece rate 0-^:3 is made it necessaiy that such a 
system be developed. In principle, the system placed into effect by 
the Coat and Suit Code Authority,, corresponded to the unit system 
proposed by the Union for adoption as a part of the Dress Industry 
prograrac (***) 

The evidence at hand is inspiff icient for the formula.tion of 



(*) Report of oPeci^l Con mission (Byres H, G-itchell and Adolph 
Feldblum) , dated Uay 15, 1934, pages 18 - 20, 
(ilRA Files, Dress Code) 

(**) Transcr ip t of Hearing , Dress Code, (February 27, 1934), 
page 35., 

(***)lt is interesting to note that as this is being written 

negotiations are under v;ay between the Union and the National 
Association of Dress Manufacturers, looking toward a renewal 
of agreements which expire on January 31, 1936, and that the 
three subjects receiving immediate attention are the limita- 
tion of contractors, the unit system, and the figuring of 
prices on the jobbers' premises. (Women's Wear Daily, October 
30, 1935, under heading "ILGW ASKS NE^/ PACTS III DEESS TRADE".) 



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def inite conclusions as to the practicability of ap^olying a iinit 
system formula to a, wide variety of styles, produced ty varying methods 
and under varying conditions of iDroductivity for -each shop and each 
individual work-:.r. The Coat and S\iit experience indicates that if 
sufficient money is available .for the necessary investigations and 
time studies, standards may be established whereby garments may be 
analyzed in terms of the productive capacities of average workers, 
and that the formulae by which estimates are made are relatively fool- 
proof in the Jiands of trained investigators. That is, the margin of 
error in the analysis of a particular garment is negligible as to 
the definiteness of result obtained by different investigators. It 
has not been conclusively demonstrated, however ;, that these definite, 
\iniform rate-measurements are necessarily uniformly equitable in 
aiDTDlica.tion. The limited "oeriod in \7hich the unit system has been 
tested can hardly be eroected to have nroduced an infallible technique, 
and further time and ex-oeriraentation are necessary before a true 
evaluation of the unit system can be made, (*) 



(*) The unsettled statu.s of this nroblem is indicated by develop- 
ments in the Coat and Suit Industry since the Code. In the 
Fall of 1935, Dr. IT. 'I. Stone vras an'oointed by the National 
Coat and S\iit Industry Recovery Board to make a study and 
recommendations on the' methods of settling -orices in various 
grades. His reT)ort v/as based on the time studies made oy the 
former code authority, and its publication on November 20, 
1935, raised a heated controversy between the labor and manage- 
ment groups of the Industry. :To op'oortunity ha.s been afforded 
for investigating the contentions of the opposing factions, 
and it is not believed advisable to attempt to analyze the 
situation from a study of trade paper articles only. Atten- 
tion is called, however, to articles in Women's Wear Daily, 
dated November 20, 21, and December 5, 1935. 



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SETTLEIvLEUT OF FIIIC.3S OK PR£i,iIS^S OF JO BBER 

The ijroposal of the Union that piece prices should he settled on the 
prenisps of the jobber is closely bound to the proposal for the scientific 
■■anit system of settling prices. Its purpose is to farther limit the scope 
of competition by practically elininating cometitive bidding between con- 
tractors on a given order, '»Tnile no exact rirocedure is described in MA 
records, it is the iitriter's impression that ne-^otiations would be con- 
ducted substantially as follows: 

Representatives of the Union, accmpanie d by one or more expert unit 
system analysis, woiild c;ai upon the jobber. The contractors or their 
representatives would nlso be present. After appraisal of a specific 
^"ament had been nade and trr^nslatcd in terns of unit piece rates, negotia- 
tions would be conducted for the , determination of a proper amoitnt in addi- 
tion to labor costs to be included in the total garment price as com- 
pensation for the contractors' overhead. 

The field of ne?,otiations v;ould be therebj? limited to the amount to 
be allowed to the contractors for ' overhead. Of course if the overhead 
item were determined on some baiiis other than bargaining, such as the flat 
35fo agreed upon in the Dress Industry, there would be no part of the total 
price open for negotiation, m d variations in total cost would be limited 
to the cost of material and the jobber's distribution expenses. Competi- 
tive bidding among contractors was to be eliminated by preliminary agree- 
ment upon the price applicable to any one of the contractors in the 
jobber's designated grouip, 

Trjie to the f'act that the negotiations on the question of settlement 
of pri'-es on the jobber's premises were conducted outside of ]\TRA auspices, 
ITBA records do not contain much information as to the reasons why the 
joboers were mlling to accept the unit system, b~at refused to accept the 
seti'l':" eat of orices on the jobber's premises. The impression gathered 
from c^ jv^f^rences and discussions of the question during the period of code 
admin 1 location, is tha.t the jobbers feared possibly excessive domination 
of their operations by'the Union in negotiations on the jobber's premises 
in which the Union v-ould talce a leading part, (*) 

EQUITABLE DISTHIBUTIOH 0? WORK 

The •.)rinciple of equitable distribution of work among "outside" 
shops working for an individual jobber was recognized by all parties, nnd 
only in its practical application were there any particular difficulties. 
Jobbers select contractors often on the basis of the particular type of 



Dress Code, (February 27, 1935), page 36, - 
Byres H. G-itchell s.-iys, "* * * there is an agreement in principle 
on the unit prices * * * , e:^:cept as to the important detail of 
where it should be fixed * * *, and the jobbers feel their rights 
are seriously jeopardized by such an agreement, and that is the 
issue on which negotiations broke," 



S714 



"42- 



vjork which the individual contractor can prodnce. Sometimes the type of 
work in production may not be fitted to the capabilities of all the de- 
signated contractors of a particular jobber. The technique of establish- 
ing quotas .and assigniiient of definite portions of these quotas to in- 
dividual contractors is still in the process of development. The Coat 
and Suit Code Authority made a study of the variations which occurred 
from the quotas established for equitable distribution of work based on 
68 manufacturing firms and 166 contractors, during the year February 
5, 1934, to February 2, 1935. (*) The chief fact disclosed by this study 
is that the over and under quota deviations represent very snail percent- 
ages of quota totals in most instances. Expressed in terras of numbers of 
garments, the percentage of deviation, including both over and under 
quotas, v;as sho\?n to be 19ol^, 

The demand of the dress contractors that the equitable distribution 
of work should extend also to include any "inside" shop owned or con- 
trolled by the jobber or manufacturer giving out work, and their further 
request for a provision forbidding the increase of "inside" shop facil- 
ities or the change of status from ' "outside" to "inside" shop d'oring the 
life of the code, was caused by what the contractors alleged to have been 
a fairly prevalent roractice of establishing "subterfuge" or "camouflage" 
shops. The camo-uflage shops were alleged to have been started by jobbers 
for the purpose of avoiding responsibility both as to equitable distri- 
bution of work and as to the payment Of the required 35^^ overhead. The 
jobbers maintained that the opening of "inside" shops is a matter of 
economy and to escape the possible penalties of having to deal with shops 
over which no direct control was exercised, 

Mr, Jack Kintz, of the Hational Association (jobbers), stated a.t the 
hearing on February 27, 1935, (**) that in addition to the reasons given 
above, the jobbers felt that the 355b overhead requirement was excessive 
and that a better cost couldbe obtained in an "inside" shop, and also 
that a more uniform production was obta-inable in an "inside" shop. 

The possibilities of obtaining agreement on provisions forbidding the 
opening of "inside" shops or change of status, would seem to be remote in 
view of the Union's traditional attitude toward favoring the growth of the 
"inside" shop system. As a matter of federal regulation, it is doubtful 
if policy would permit such a restriction upon the freedom of action of 
an individual m-mufacturer. This was a particularly sore point with the 
contractors, who felt throughout the negotiations that uiiless their 
proposed program were adopted in toto it was bound to be ineffective. 



(*) Coat and Suit Code Authority Table No.. 31, "A Study of Equal Dis- 
tribution of Work," (MA Files, Coat and Suit Code) 

(**) Transcript of Hearing . Dress Code, (February 27, 1935), Pages 78 
and 79. 

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CHAPTER III 

APPHAISAL 

AFPIIAISAL OF DEVELOPMENTS JJW DER Ulk 

Viewing the history of the contract system in tropd perspective, it 
is evident that the NEA period marked the c-almination of a develouinent 
toward regulation on the ^basis of comprehensive prograris. This develop- 
ment tov/ard reg^alation on the "basis of comprehensive programs. This de- 
velopment had covered a, considerahle period of time. The first efforts 
at stabilization had been made some t'lenty-tvra years "before the codes, 
in the form of more or less isolated measures calculated to cure or re- 
lieve specific phases of the problem. The application of these local 
remedies to the surfpce ills of the system, however, failed to cure the 
deep-rooted organic maladies, and as time passed it "became apparent that 
a stronger and "broader program of regulation was necessary. Ideas de- 
veloped slowly, pxid for years were de"bated, rejected, fought over, and 
finally accented' "by increasing n-um"bers of the Industry's members. The 
framework of the programs adopted -oiider the codes had been "oroposed nine 
years earlier, and h-^". been given the Etar.p of ap iroval by the Governor's 
Advisory Commission in i926. It was not ujitil the adoption of the codes, 
however, that thought was trmasf ormed into action, and the Commission's 
recommendations \Tere tested in practical application. 

It is, of course, a tenable hjrpothesis that the crystalliTiation of 
issties might have occurred if there had been no MA, It is possible that 
the disorganized state of the Industry in the early years of the depression 
might have forced t"iie adoption of reg^olation through the established 
channels of collective bargaining. There would seem to be good reason to 
believe, "nowever, t"hat the passage of the National Industrial Recovery 
Act created a situation under which the traditional conflicts between 
Industry groups were a.^ least temporarily r^legated.to the backgrouaid, thus 
facilita,ting cooperative efforts on a broader scale thsjn had previously 
been possible. 

There is no means of accuratelj'- evalu.ating the effect of the NIRA 
on the growth of Union strength, nor is it possible to appraise the 
general attitude of hopefvilness paid confidence with which the Women's 
Apparel Industry viewed the "TRA program. It cannot be denied, however, 
that in some measure, the prospect of a nev; era in stabilization of in- 
dustrial relations was responsible for the breaking of certa.in deadlock 
which had existed for n&ny years, and for producing in the codes the 
first joint expression of the composite mutual objectives of all elements 
of the Industry. 

Ho particular contributions were made by NRA to the underlying 
principles or specific provisions adopted under the codes with respect to 
the contract problem. The STLiA served primarily as a new element dn the 
mechanism of industrial <self-governm.ent. It provided a, central agency for 
the administration of measures on behalf of the Industry a.s a whole, 
rather than of partisan groups. It served as a forum for the discussion 
of Industry problems on a continuous basis, as against the situation 
existing prior tfi NRA, wherein issues were raised only during negotiations 



for new collective agreements. To some e::tent also, the role of super- 
visors and raediators played "by officials of the National Recovery 
Administration, and the atmosphere created "by Federal sponsorship of the 
measirres adopted, were imdou'otedly responsihle for a nore orderly treat- 
ment of controversial questions than might have resulted under other 
circumstances, 

-It cannot he said that ITEA abolished the traditional partisan aspects 
of negotiations "between groups in the apparel industries, - far from it, 
IJRA was no more than a vehicle through which the organized ohjectives of 
an industry could "be given expression and put into effect. The codes 
were essentially a new form of collective agreement, and were formulated 
largely as a result of collective bargaining. In certain branches of the 
Industry, the inability of opposing factions to agree upon the type of 
regulation desired acted as a deterrent to the adoption and administration 
of programs calculated to j^ield the most effective degree of stabiliza'oion* 

Comparison of Accomplishment Under the Codes - Coat and Suit - Dress, 
In spite of the controversial atmosphere that surrounded the a,dministration 
of the Coat and Suit Code, the essential fact is that the conflicting 
viewpoints and interests of the different elements within the Industry 
were merged into a definite expression of industry objectives, and ad- 
ministered with efficiency and unity of purpose. Qiaestions of the social 
or economic justification of the regulations 'adopted, of the measurement 
of their effectiveness, or of the means by \7hich the end was accomplished, 
are of relatively less historical importance than the fact of accomplish- 
ment itself. The program adopted under the Coat and Suit Code, and the 
administration of- this program, marked a new and significant development 
in the field of industry reg-olation. Even though the obstacles of partisan 
interests continued to exist, the Industry, through its code authority, 
managed to the general industry objectives as expressed in the code. 

It is difficiilt to expl.oi n satisfactorily why a similar unity of 
purpose was not obtained under the Dress Code, 

The Coat and S\iit Industry is older than the Dress Industry, Per- 
haps the existing state of evolutionary development in the two Industries 
may provide part of the answer to the question of their differing capabil- 
ities for cooper.ative action, Perhapd the failure of the Coat and Suit 
Industry to act upon the recommendations of the Governor's Advisory 
Commission in 1926, may be compa.red to the failure of the Dress Industry 
under the Code, to overcome the 'obstacles of partisan interests, Perhapd 
the years of thought and debate on the question of regulation in the 
Coat and Suit Industry had developed the psychological attitude of the 
Industry to a logical anoreciation of the necessity for joint action in 
the handling of mutual problems. Some pa.rt of the explanation may lis 
in the intangible factors determining the strength or weakness of in- 
dustry organiTiation, There may have existed in the Coat and Suit In- 
dustry a balance of power which made it imi^ossible for one g roup to check- 
mate the constructive proposals of opposing groups, or a preponderance of 
power in the hands of the elements sponsoring the program as expressed 
in .the code. Perhaps all of these factors played a part. 

It cannot be said that the escentiM,! elements of the contract pro- 
blem differ in any marked degree in the two Industries, It is possible, 

9714 



-45- 



howevRr, that the pressures under which the Dress Indtistry operated dur- 
ing the node ;-.sriod -ii'.y hr>.ve "been stron.^er pnd more difficult to com'bat 
than the pressures under nhich the Coat and Suit Industry operated. While 
there is no tangible evidence which would support a definite conclusion 
on this point, it is at least a possibilit-/ that the c^eMands of style and 
the rapidity of style turnover may "be f^reater in the Dress Industry than 
in the Coat and Suit Industry, In addition, the Dress Industry labored 
under great difficulties during the code period hecause of the unsolved 
problem of overlapping with the low-wa^e Cotton Garment Industry. The 
Dress Industry also had a, considerably larger nu-Tiber and proportion of 
contractors to deal with thoji the Coat and Suit Industry. Table II, 
Appendix.,to Part JL, ,pfige 53 gives the estimated number of contractors 
in the Dress Industry in the New York Metropolitan Market in 1935 as 
2250, em.plcyihg 82,000 workers, who represented 78^o of the total number 
of workers in that Market. Table III and IV Appendix to Part CAa, pp. 
54 and 55, give the number of "outside" shopsL in the Coat and Suit 
Industry in the Kew York Metropolitan Mn.rket on February 2, 19S5, and- 
S24; for the fiscal year Pebru-jry 5, 1S:34, to February 2, 1935, the 
average number of v;orkers in "outside" shops in this Market is given as 
24j710, or 54^ of the total. It is evident from these fig-ares that the 
problem of the Dr;esG Indiistry was of considerable greater magnitude and 
pe-rhaps also of greater intensity th-in the problem of the Coat and Suit 
Industry. 

5ut)-Qlementary Functions of MA. The codes covered areas over which 
the established agencies of industrial self-government hpd little or no 
control. While the associations mid the Union in many instances exercise 
an ef-fective neasare of control over all but a very small pp.rt of an in- 
dustry, the remaining small percentage of unoi-ganized and uncontrolled 
shops is "a source of constant pressure n,gainst the upholding of the pre- 
scribed l»,bor -inc trade practice conditions". (*) 

The control of the "recalcitrant 10;S" 'is not directly the objective 
of re^^lation of contractor-Jobber relationships, but it is. evident that 
so far .?s this was accomplished under the codesj the .effect was to 
diminish the competitive pressures under which the Industry oper.-ied, and 
thus indirectly to influence the degree of stability attained under the 
contract system. 

DIFFICULTIES FACIHC THJi; PhOBLJUM O F RS GULATigT 

, There are a number of difficulties caused by the state of development 
of organization in the Industry, pnd by the practices #iich are common to 
the negotiating relationships between the various factions, which act as 
obstacles to the adoption and effective administration of regulatory 
m.easures, where issues are as sharply drawn as those of the contract system. 
The accomplishments and the failures of the code period, and the maiy 
years of protracted negotiations preceding the codes, are m.ore readily 
understood when the nature of these difficulties is considered. 

The Trading Atmoso'here. The different elements in the Women's 
Apparel Industry are org-xnised for one jjurpose that transcends all others, 
- the purpose of collective bargaining. The trade associations nnd the 

(*). Printz, A]-exander, Chairman, National Coat and Suit Industry Recovery 
1-4 Board, Hew York Herald Tribune, (Kov^mber Z, 1935), \mder hearing 
"U.S. MUST HELP RULE IICDUSTRY7 PRIrlTZ ASSERTS". 



Union are openly partisan iDodies rhose cpo]:esnen are clifirged v,a th the 
duty of rei:resentini2 their particular groups as partisan advocates. For 
many years they have met with the representatives of the other groups, 
for the negotiation of collective agreoraentSo No matter now conscious 
an individual or a group mr^,^ be the necessity for cooperative actioh 
for the vrelfare of the Industry as a whole, the negotiating relation- 
ships 'bet\7een the associations aiid the Union are dotiinating by trading 
considerations. A bargain is a trade. A good bargain is one in which 
maxinum value has been obtainnd at niniraun cost, A good ba.rgairer is 
one who negotiates a good bargain. It is easy to -understpjid why the 
official political trading position talcen by individuals often varies 
ina.terially fron their personal "off the record" position, and why th3 
developnent of industry regulation through collective bargaining has 
been slow and halting. As Morris Kolchin said at the Dress Code Hearing, 
Febru: ry 27, 1955: (*) 

"The trouble is this, Mr. Chairman, we all have to bring home 
certain victories, "e are associations, we are managers, I 
have to make good before my association, and 1 try my darndest 
— not I, becxuse I am lazy by nature, but others do, and they 
have to bring home the ba.con''. 

In other words, the position of the leaders of each group is that of 
having to uphold an uncom:oro-.using, partisan attitude, to "bring home the 
bacon" in the form of adva,ntageous bargains, rather than to mal-ce con- 
cessions for which ,only irjdirect returns nay be foreseen in the nebulous 
form of industry welia^re^ It is one thing for an impartial commission to 
propound a formula for regulation^ Even if the Industry may be substantially 
unanimous, ("off the record"), on the proposed formula, it may be entirely 
another matter to get the formula into an agreement or a code. It is still 
another matter to enforce it once it is in. 

Trial and Error . It is not inferred that the reluctance of any 
particular group to accept a specific recommendation is necessarily always 
a question of trading. There are perfectly under staiidable, natur 1, and 
often entirely honest, differences of o-oinion and doubts as to the effect 
of a i^roposed regulatione The short period in which reguJLration has been 
applied in actual practice gives very little guidance or information as 
to what may happen upon the adoption of a particular program. Under these 
circumstances, the development of regulation is normally a matter of trial 
and error. It is easy to understand why a groiip may hesitate to adopt 
the trial for fear that the experiment may prove to have been in error, 

Mocessity for Effective Administration and Popixlar Acceptance . A 
further difficulty facing the program of stability through regulation, is 
the fact that as in laws of any kind, the degree of success is measured 
more by the popular acceptance of the laws and of the ^orinciples behind thera, 
and by the effectiveness of administration, than by the laws themselves. 
Certain situations exist wherein the psychological a,ttitude of the members 
of the Industry affected by proposed or adopted regiilatioas, may be of such 
nature that effective administration is impossible. Substantial acceptance 

(*) Transcript of Hr-aring, Dress Code, (February 27, 1935), Volume I, 
Part 2, pages 269 and 270. 



-47- 

of the necessity for regulation nust erdst in the ninc.s of those affect- 
ed, and an organization capable of efficiently acaninintering the program 
in essential, Hegulations adoptee'. Trithout organization and general 
acceptance iDy the In6xistry are foredoomed to failure. 

BEGUMTIOK DIUBCgLS AT BASIC SOUHCES 

The errtent to '.rhich the relationships ercisting in the contract 
system are influenced "by gi^^g-i^p^n "basic governing factors, not strictly 
confined to the contract/alone, makes it desira"ble to e::a:-iine the poss- 
i"bilities of directing at least part of the "board prograii of regulation 
at these "basic factors. To the extent that pressures nay "be relieved 
at tiie source, su'csidiary recxilting pressures ^rjxll "be relieved, and the 
task of re;gu.lating them v/ill "be simplified. 

extent 
Style ReiTulation . To some/there may "be possi"bilities, through reg- 
ulation, of relieving the intensity of pressure caused hy the influence 
of" stj^le. The rapidity of style c'nange, rather tha.n any "basic charact- 
eristic of style itself, is the primary factor to "be considered in conn- 
ection \7ith the effect of style on the productive mechanism of the 
Women's Apparel Industry. If the development of general style trends 
were to "be depicted in the form of a graph, the curve representing these 
trends rrould "be spread over considera"ble periods of time. In other 
•Tords, changes in general style trends tal'ze place relatively slcvly. 
Roughly spe?Icing, it may "be said that the consui:ier's actual requirements 
for style change likewise cover fairly long periods of time. On the 
other hand, the merchaadising methods which ha.ve developed in style in- 
dustries during the past few years have greatly accelerated the rate of 
style change. Competition for consumer's attention has developed prac- 
tices which cause retail stocks of st3'-le goods to "be in a more or less 
constant state of change. In addition, where style pira.cy e::ists the 
rate of style change is further accelerated. The tendency is for the 
"pirate" to copy a given style, prodticing the same, or al:".iost the same 
article in a lower price range. , Tiie original is forced from the market 
hefore it is "out of style", or "before its normal ter:-j of consumer acc- 
eptance has lUJi its co\u-S3. This process is repeated again and again, 
values of unsold inve/itories are c.epreciated, and- new styles must "be 
created to replace the old. In addition to the "broad curves of the "basic 
style trend line, a theoretical graoh of style changes would have to 
contain a su"bsidiary line to trace the many constant, high frequency 
varie-tions which take ;olace "because of the factors just mentioned. This 
line \70uld follow the general direction of the trend line, "bu.t would "be a 
series of s'narp angles rather than "broad curves. 

In the apparel industries very little has "been done -0:0 to the pre- 
sent tine in the way of actual accompli sliment in the regulation of style 
piracy. It is ii-.ipos5i"ble to give a full discussion of this su"bject at 
the present time, "but it is evident that one effect of such regulation 
would lie to greatly recuce the rate of style turnover. "Under such con- 
ditions the need for flexibility in the producing ?aechanism. of the In- 
dustry would "be greatly reduced. In addition, and perhaps of greater 
importance, is the probability that if style piracy were eliminated or 
curbed it would be far less simple to enter the apparel indastry and 
stay there. Production would tend to be confined to esta"'oli5hed and well- 
organized houses whose prima,ry strengt'h would lie in their ability to 



originate styles. To some degree also the competitive pi-essi\res nithin 
the Industry Tould "be relieved l)y diminishing the losser; of style o^bso- 
lescence. This v/ou-ld have the effect of indirectl;/ decreasing the 
acuteness of competition Ijet^Teen inside anc outside estajlisliments. 

Seasonality . As in the case of st;"le, so also is seasonality part- 
ly the result of necessity as Reasu.red "by consumer demand, and partly 
an artificial structure created hy merchandising pre.ctices. There iTould 
seem to oe no reason nhy efforts directed at spreading ' the seasonality 
curve should not, in the long ran, "be effective to some degree. The 
interlocking natiire of style and seaosonality mal:es it proLJa^ole that the 
conti'ol of seasonality depends to a large e:ctent upon the control of 
style. If the Industry is eventually a'ole to evolve meajis of decreas- 
ing the rate of sbyle turnover; the prolDlen of spreading the seasons rrill 
"be simplified. 

Control Throiir;h In-oroving Technique of Production g,nd_I)istri'bution . 
To the extent tli?,t style turnover and seasonality are artif icis-lly 
created as hy-prod-acts of the technique of production and merchandising, 
they may be su"bjectnd zo come degree of control !>;'■ Improvements in tec- 
hnique.- The merchaidisin/;: tiieor3- that the consiner's attention i:Tast "be 
constantly stimulated hy variety anc- cha.nge in t he articles presented 
for sale, is relcVuive .rather than a"bsolute. Possioly a. little less 
variety, a xev less frequent changes, Trould prove just as acceptable 
to the consumer. 

The teclinicue of merchandise control has had a nide development in 
recent years, particxilarly in t he rets-il market. There is no reason to 
suppose that this developm.ent is non complete, or that a similar dev- 
elopment shoiild not take place in the ijholesaie field. The spread of 
the production curve over a. relatively nide period of ti::e is partly 
a, ma.tter of the technique employed "by the manufactr.rer, '..dth "oarticular 
reference to his selling technioiie. Stanc'Lardization of production may 
not be feasi"ble to any appre'ciahle extent in a st3'-le industry, "bat it 
is possilDle that the field of e::periment and investiga.tion on this 
suhject ha.s not oeon conpletel:" explored. 

BHOAI) ASPECTS 0? T^:i] ?a03LEI.I OP 2EC-UIATI0K 

The strength or vreakness of any sj^sten of reg\ilation, horrever 
perfectly conceived and conscientiously a.dministered, is deterr.iined "by 
a nuniher of inter-dependent factors -fhich, taken together, from the 
composite stractxiro, :;iechanism, 8.nd character of the Industry- as a irhole, 
and affect its •.•.•e].ia.re. Some of these factors are siioject to control;' 
others are not. Some originate outside of the Industry; others are of 
the Industry's oun making. G-enera.1 economic infr-ae^ices, increasing or 
decreasing nationa-1 purchasing po'jer and the flo'i of credit and mer- 
chandise, play a part in accentuating or lessening internal pressures; 
and rrithin the Industry itself there are a nur-i"ber of forces, some mea- 
suraole and concrete, others incalculrble and intangihlo, rrhich contri- 
"bute to the success oi" failure of a specific program of regu.lation. 
Under these circxt.istances it is ohvioiis that ahsoliitc stabilization of 
contractor- jobber relationships -jould-not necessarily creat a Utopian 
condition. The neakness of the financial structure of the Industry, 

q7lU 



-49- 

conlDinec!. uith sca.nonality, style risli'G, anc. ^pressure fron retail buyers, 
nould probo-lily rnaintrdn plenty of sharo or even destnictive conpetition, 
anc vroulc. continue to trie annixal toll of the shoe Gtrin^:; capitalists. 

There is no r-ia^-ic for..mla v;aich of itself .lay "be e::pectec. to el- 
ininate or r.iitl^jate the socially anu econonically cestr.nictive forces and 
practices :.-cs or.siole for tj.e Lifficiilties of the ITonen's Apparel In- 
dustr:'. The coritract oroblen is an inte,''';rrl part of the hroader Industry 
problem, and its solution lies -oartl;. in the field of lavrs, collective 
a-^reenents, coder, o:- other instiiincnts, and partly in the field of 
evolution. E-/olucion Liplies chan:;i'es in stracture cjid nethod, brought 
by the operation of econonic forces rnd inprovemcnt in the operating 
technique of the Inducti-y, and chan;:;es in the attitudes of the partisan 
groups '.Tithin the Industry toward increasing- consciov.sness of the mutual 
inter- dependence of the different factions,. 

The evoliitionar;, process, houevor, is more than the blind trorking 
of fate. In som3 measure tlie course of evolution is subject to guid- 
ance, and its devclopnent nry be speeded by self-inpasod industry ad- 
justments. If any feelin,- of disco^\ra.";ersnt exists as to the tasks still 
ahead of tiie TJo^iev.'s Apparel Indust;y in brint:in,f:: order to its distress- 
ed interna.1 relationships, it is important to bear in nind that while 
the problems are of lonr; standin.:;, the or,=:anized attach upon these pro- 
blems in the for:.', of a comprehensive program, under capable central ad- 
ministration, has been confined to a relatively short period of time. 
In some respects, it may be saic to have ''jeen confined to onl;' one 
branch of the Industry. Evidence developed by the recent e.T;t3eriences 
of the Industry' is inconclusive as to the effects of the specific reg- 
ulatory measures a.dopted. The sif:nif ica.nt fact for consideration in the 
present period of the Industry's histor;;', horrever, is that remedial 
meo.sures have been adopted and placed into effect. The measurement of 
accom-olislxment mi,ist a\7ait the develo-oment of further evidence. 



APPENDIX TO PART A 



9714 



-51- 

tOffiEH or SHOPS A?TD ITUIfflEB OF Yf03KE-B£ CLi.SSlgIED BY TYPE OF 
SSTADLISHivZSNT . The U. S. Cmi?U3 figar^s fnr numlier of rPgalar and 
contract oliops in tlie United Staters in all "branches of thr Wv-^men's 
clothing industry fro;n 1909 to 1931, which appoar in thf! follvwing 
tahlcjllo. I, indicate that 35^ of all shops in 1931 wero contract 
shops. This represents an increase of 192^^ hstwoen 1909 and 1931. 
These figi-ires ■:>"• o "not available for the Dress or thp Coat and Suit 
Industry sopai'atoly. 



T^LE NO. I 



iravrap.li OF HI.C?TLi\?. Am GOrlTAA.CT SHOPS 



13C9 



YElil 


K^TAL HO. 


^ONTSACT 


Sf?J?S 


EEGULAE 


SHOPS 




(:T ■'■:'y?r 


l]\:m^rr ', 


/. ,-" Total 
12 


Huxnher % 
3,709 


of Total 


1909 


4,;jc5 


S-9 


88 


1914 


5,564 


1,094 


18 


4,470 


82 


1919 


7,711 


2,195 


27 


5,516 


73 


1921 


7,.)61 


1 , 590 


23 


5,471 


77 


1923 


7,C45 


1,590 


23 


5,456 


77 


1925 


6,127 


1,897 


31 


4,230 


69 


1927 


7,588 


2,660 


35 


4,928 


65 


1929 


8,082 


2,906 


35 


5,176 


65 


1931 


7,041 


2,487 


35 


4,554 


65 



Incl. 1909 - 1931 192f. 
(U. S. Census) 



-52— 

DHBSS INDUSTRY - ITOt/IBEE OF SHOPS AICD irOIvIBER OF WOEKERS CLASSIFIED 
ACCOPIHITC- TO TYPE OF EST.ABLIS IU'.MT - 1952 affd 1955 . The Union Censuc 
of 1952 indicates thnt in the Dress Industry 65fi of the nimiber of shops 
were contract shops, eraployin/j 54fo of .the nuiiilDer of workers in the 
industr:'. 

The composite estimate made Toy I.;r. Alex Thomson, former Adminis- 
tration KemlDer on tae Dress Code Authority, iDased on opinions of Union 
and association officials, indicates that in 1935, 69;^ of the shops were 
contract shops, and 78;^, of the -vorkcrs were employed in these shops. 
Wliile there is some doulit as to tlic a'osolute authenticity of these 
figures, they arc assuiiied to Tdo sufficiently accurate to indicate the 
decline of inside shop manufacturing and. the increase of the contract 
method of production during this short period. Tlie ntrnter of inside 
shop cstal^iishments declined from 650 in 1932 to 250 in 1935, and their 
employees declined from 17,000 to 12,000. Jotting shops increased from 
750 to 800, a^ad the employees of the Jotliers from 6,000 to 12,000. Tliis 
increase does not readily explain itself, and is probably accounted for 
by the existence of a lar^o number of inside shops controlled by jobbing 
cstablisliiTfients. It is unfortunate that we have no means of measuring the 
number of contractors included in tiie 1952 estimate who vi^ere located in 
Uew Jersey and Connecticut. In the opinion of the industry leaders, a 
large part of the increase in t.-c contract method of production during 
this period was crused by the sending of work to out-of-town contractors. 
(See Table Ho, II immediately following for detailed information on this 
subject.) 



COAT AI'ID SUIT II-IDUSTRY - InT EEP. OF SHOPS CLASSIFIED ACCOPDING TO 
TYPE OF ESTAELlSIIiiSl'IT . Tiie Statistical Department established by the Coat 
and Suit Code Authority, through tlie analysis of payroll reports, label 
sales, etc., submits tie following information on the number of shops in 
the Coat and Suit Industry on February 5, 1934, and February 2, 1955. 

Tliis table indicates that v/hereas the outsio.e shops in the New York 
Uetropplitaxi Market represented 61.6;t and 60-j respectively on the dates 
covered, the percentages in markets outside of hew York v/ere only 26.8^ 
and 24.4^ respectively. The manner in Trliic.i clmnges took place between 
1934 and 1955, as indicated by the .able(lTo. Ill), v/ill be> discussed in 
a subsequent part of this appendix. (See' pages 73 to 82 ). 



-53- 



^ n 

b .EH 



OJI t^ 



n; 
p^i ; i 
o iJ 

fn •- 



-^F) 



^\ 



P^ 



g^ 



-' I 



O r-l 
.-4 .H 



7^1 



9714 



-54- 



TA3LE wO. Ill 



lIUivn3ER OF C0HCE31TS CLASSIFIED BY TYPE 
OF ESTABLIStkiEKT 



COAT M^ SUIT INDUSTRY 
FEB. 5, 1934, and FSB. 2, 1935 



1/ 



2/5/34- 



fo of 

Total 



2/2/35 



)o of 

To tal 



S. MARKET 
Inside Shops 
Outside Shopt 



902 44.9 

1105 55.1 



934 47.7 

1025 52.3 



Total 



2008 



100 



1959 



100 



JI. Y. 1.;ET. I'lARKET 










Inside Shops 


626 


38.4 


622 


40 


Out side Shops 


1005 


61.6 


924 


60 


Total 


1651 


100 


1546 


100 


IviARICETS OUTSIDE 










OF 1^'. Y. 










Inside Shrps 


276 


73.2 


312 


75.6 


Outside Shops 


101 


26.8 


101 


24.4 


Total 


377 


100 


413 


100 



1./ Figures compiled from Coat and Suit Code Authority Tahle I'^o . 12.2. 
Composite figures for markets outside of Hew Yorl: obtained by 
deducting New York Metropolitan iJarkct Figures from U. S. iUarket 
Figures. Code Authority Table No. 12.2 gives additional breakdoira 

on markets outside of l]evr York. 



9714 





to VX> 




O r-t 


M to 




H ^1 


tAtA 


o iC 


^ LO 


fH r-l 


K^r— 


>r. H, 




ro d 


in r^ 


FM rt 


r<-N cvi 



to ^-^ 



S^ 



I — m 

GO OJ 

oj « 



^ o 

CVI o 

cr\ r— 
CO i-n 

rH I-— 



O LTn 
LOvO 
O C\J 



O 4^ 

Is; tti 



Pi o 
o ^ 
,c! en 



971' 



"^ 



PM 




6 


"^ 



EH 



,o 


,o 


!3 


1 


'A 


o 


ffl 




-P 




g 




^ 


1 


o 


=i; 




Ph 



I 






-56- 

COAT AND SUIT INDUSTRY - AY^Ud^ AMD UAXllUU FJi/JBSa OP ;70HK3HS - 
TOi£35H 07 i/iAN H'~'UaS, PAYHOLL DOLLARS Ml PX'DUJTI ON UNITS. 3LAS3irilJ:D 
ACCCHDIN:} to TYPS 'F :]3T_\5LIS-r-ia NT. Code authority tabulations indicate 
that the extent of tiu contract s/stera in tl'.e Coat and Suit Industry 
as measured hy the numhar of woncers is not as great as in the Dress 
Industry. Table No. IV was co:npiled from several separate CDde author- 
ity tables as described in tlie footnote -iinder that table. 

SIZE OF 3HCPS - DH55S AND MIST INDUSTaY - 1923. The Joint Board 
of Sanitary Control conducted an investic^ation in 1926 wiiich revealed 
that 61 percent of the dress and waist shops in the New York Market 
employed from one to fifteen workers, and 45 percent employed ten or 
less workers in taat year.. See Table No. Y. 

CCliPARISCNS - AYZRAC'S NUi^iBSH OF '.70ra<:aP:S -'INSIDB AND OUTSID E 
SHOPS. Data supplied in Tables Nos. II, III, and I?, make it possible 
for roug[i' fig-ares to be compiled as to the average numbers of workers 
in inside and outside slxops for the Dress and the Coat and Suit Indus- 
tries. (See Table No. VI)-. It is not felt that these 'figures are 
reliable except as an indication that in general the outside shops - 
are smaller than the inside shops. ', 



9714 



150 - 200 
Over 200 



■57- 



Ti\3L3 NO. V 

CLA.?iri:ATi„i^ :f 3i::p3 AC3osi::a to 

7AIST IJIJUsTaY - 19S5 - IZJ TO::lK M.OK3T 

(j.^rom 3eport of tlie Joint Board of 
3;jiitary Control) 



".VOHIvERo 3. :OPS 

1 - 5 386 

6-10 530 

11 - 15 ■ 513 

16 - 20 265 

21 - 25 115 

26 - 50 119 

51 - 75 18 

76 - 100 3 

100 - 150 1 



TCTAJ. S;.:0P3 - 2,006 



1-10 Ior::er3 - 4o6 

1 - 15 " 61 S 



971' 



-58- 

TAI3LS KTC . VI " 
:Gi.'lPAHI3CN3, AV3-U(>i: l^l^'SR OF .V-HIC-^HS, IIISIDS MD 
GUT3ID3 SKGPS l/ 



DHE3S IEDUST:^! 








YSAR 


iv'lAmJFACTUiERS 


J03BZRS 


GGNTRAGTGRS 


1932 


26 


8 


12 


1935 


-18 


15 


36 


CCAT m-D SUIT IKFJSTRY 








YSAIl 


IKSIDS 




OUTSIDE 


2/5/3^ - 2/2/35 


32 




26 



!_/ Figures co.npiled from dp.ta in Table No. II, Dress Industry, 
number of SliOp- and }Tu:nber of lorkers, Classified According 
to type of Establis.ii.ient; and fr^ra Tables ITos, III and IV, 
Coat and Suit Industry, llwuber of Concerns, and Average I'l-om- 
ber of 'Yoi^cers. 



9714 



.59- 



CLA.Sg I?ICATIO:T 0? SHOPS ACC0?J3I! TG TO ITULS'ia OF V/OMSRS. UlIITSD 
STAT::S ivIABKET ARM. - COAT MP SUIT IliDUS'jaY . Table No. VII shovvs that 
85';j of the shops in the Coat and Suit Industry Gmploy from one to 
thirty-nine workers, and that 33,i of tlie shoos em-oloy from one to 
nineteen v/orkers. 

SBASOMLITY I¥ V/OMJl-T'S APPAH3L IITOlJStP.Y COivIPAHi:D TO SZASOMLITY 
II'I 0TH3H INDUSTRI5S . Tatle Ho. VIII shows tlriat the women's apparel 
industry was hj- a. wide mareiin the most seasonal of the twenty-four 
industries reported during the ;oeriod of 1923 to 1931, inclusive, 
measured in terms of seasonal variations in payrolls. The range of 
seasonality, measured hy the difference between the index for the high 
looint of the season, compared to the index for the lov/ point of the 
season, is 55 points in the women's aoparel industry. The next most 
seasonal industry was aixtomobile manufacturing, with a. range of 35 
points, and the third most seasonal was cement manufacturing with a 
range of 35 points. 

Measured in terms of production anc". employment, (see Table IIo. IX) , 
the Yi/omen's apparel industry is one of the most seasonal of all industries, 
although not in the same degree as indicated by payrolls. It should be 
noted that employment flucVoations are typically more narrow, and produc- 
tion fluctuations wider, than payroll fluctuations. On the basis of 
production only fruits and vegetables and cotton seed oil show a wider 
seasonal range. On the basis of employgicnt, fruits and vegetables, 
cotton seed oil, butter, and ice cream, are the only industries show- 
ing a greater degree of seasonality than women's clothing. 



-60- 



TABL3 KO. VII 



CLASSIFICATIOII OF SHOPS ACCOBDIIIG TO IJUOEE OF W05[F:E2S 
COAT AiTD SUIT IliDUSTHY, U. S. LASIvET AREA l/ 



lliimber of 
5orlcers 



I-omber of Firms 
2/5/1934 


H-umI 


ber of Firms 
-/^/1935 


654 




656 


1038 




990 


164 




167 


80 




82 


31 




32 


31 




32 



1-19 
20 - 39 
40 - 59 
60 - 79 
80 - S9 
100 and Over 



Total Manufacturing 

Non-Manufacturing 
Kg Data 



;'008 

251 

93 



1959 
395 



Grand Total 



2352 



2423 



1-19 Workers 
1-39 Workers 



1/ Coat and Suit Code Authority Table No. 1< 



9714 



TA3LS liO. VIII 

IHDICSS OF S3/tG0NAL VAEIATIOIIS lil TIfi PAYROLL 
or rWElJTY-FOU"R SEL2CT2D IviAKJ^ACTUHIEG I_TDUSTItI'-]S ?GH IKS 
x'iAlOD or 1923 - IJSI 1/ 



Average Hi^h Point of Low Point P5.nge of 

fluinber the Seasonal of the Season- 

Siaployed Index for the Seasonal ality 

in 19C9 Year Index for (Points) 

the year SaEfc 



Wtracn's Clothing 137,500 128 ,i 73;^ 55 1 

Automohiles 236,116 116 81 35 2 

Cement 33,358 107 85 25 3 

B^ots and Shoes 205,540 112 89 23 4 
Autcmohile Tires and 

Tuhes 8-3,263 110 87 23 5 

Men's Clothing 149,868 109 88 21 6 

Clay Products 128,743 107 87 20 7 

Stcarafitting 39,521 110 91 19 8 

Furniture (Liunher) 193,399 109 90 19 9 

Cigars & Cigarettes 105,308 109 92 17 10 

Hosiery & Knit Goods 208,488 105 89 16 11 
Dyeing and Finishing 

Textiles 79,327 106 91 15 12 
Lujnher, Sawmills 419,084 105 90 15 13 
Steel Works and Roll- 
ing Mills, etc. 394,574 107 93 14 14 
Cane Siogar defining 13,912 105 91 14 15 
Flour 27,028 107 94 13 16 
Cotton Goods 424,316 105 92 13 17 
Silk Manufacturers 130,457 105 92 13 18 
Glass 67,527 104 92 12 19 
Structural Iron TJorks 54,947 ,.105 94 11 20 
Woolen cS: Worsted 

i/ianufacturers 146,959 105 94 11 21 
Slaughtering and 

Meat Packing 122,505 105 95 10 22 

Petroleum Refining 30,596 102 97 5 23 

Xeat.-iV 49,932 103 98 5 24 



source 



Simon Kuznotz, "Seasonal Variations in Industry and Trade", 
published 'oy the national Buroau of Lcnnomic Reaaarch, 1933, 



l/ In this tahle the smaller the range the steadier the work; the larger 
the range the greater the amoi'Jit '^i scarcnril uncmiployraent. 



9714 



TABLI ITO. IX 

COIvtFAHISOlT 01- 'JOIvrail'S CLOTHING WITH 0TH3R 
liTDUSTHISS lil A;,i?LIIULS of S3A.S01TAL VARIATIOI-IS III P30DUCTI01T 
AilD E:.iPL0YM31JT 

1920 - ig^"^! 

Saiifc^e from High to Lev; Index 



INDUSTEY 



PRODUCT I OK 
(POIIITS) 



EiVlPL0YM31TT ■ 
(POIITTS) 



V/omen's Clothiiag 

Flour 

Loat 

S-Q;:^ar 

Tobacco 

Butter 

Ice cream 

Fruits and 

Vegetables 
Cotton Seed Oil 
Cotton 

Finishing & Dyeing 
Knit Goods 
'.Toolen Goods 
Worsted Goods 
Silk 
Leather 
Shoes 

Men's clothing 
Automobiles 
Tires 
Glass 
Gasoline 
Luinb e r 
Cement 

Stri.ictural Steel 
Stell Ingots 
Fumi ture 



151 
29 
33 
40 
30 
74 

15G 

359 
165 
21 
34 
27 
10 
22 
12 
13 
43 
106 
31 
36 
24 
12 
21 
69 



13 



29 
12 
10 
17 
12 
o2 
35 

212 

126 

g 

7 

25 
6 
7 

5 
6 

10 
8 

18 

o 

10 
4 
d 

16 
6 
4 

11 



Source: Simon Kuznetz, "Seasonal Variations in 
Industry and Trade", 1933, pp. 209-11. 



9714 



-63- 

DIIESS IITOUSTEY - SIASOITAL VAaiATIO'iIS II T E.iPLOYt JEIIT AKD PAYROLLS 
I K WHW YOE: state - ?05q>~lQ32. 

Tatle llo. X slio\7S the fluct"aations in enplojnnent and pa3.'rolls in 
dress shops for tiie years I929 ^''■''■^^'- ^-^'32, the indices heing "brased on the 
0-verage for the years 19?S to 1932« I^^ 19=^91 'ti-T-e peak year, employj.ient 
fluct\iated from oS,2fi to ll'i'.l)j, a ran:.:e of 2c!. 9 points. In 1932, 
enplojTnent fluct^iated froia ^5«9'^ 'to 9£»2^"» ^- orange of US.3 points. 
Payrolls fluctuated in I929 fro:.i 126, Of. to S3.^'0,a range of '42.2 points; 
and in 1932, fron S5.0f to 36.Sfj, a rai\^;e of US.2 points. It should "he 
noted that the cstrljlisiffiients investigated represent the riore stable 
units in the industry as it -jould he impossible to obtain adequate 
conparative data fron shops in "'hich records ha.d not been kept over a 
sufficient number of yea.rs. 

SEASOl.'AL VAFJATIOJS IF IS IPLOY : J EITT >- 1701 SI" ' S . APPAISL IltPUSTP.Y . 

The Kerr York State Tepa-rtnent of Labor gives figures nhich differ 
from U. S. Departnent of Labor Pigrres on the fluctuations in enplo;^- 
ment in the wonen's aioparel industry for the year 1932. The deviation 
from peal<: to slnjnp as reported by the l!e\- York State Departnent of 
Labor T.Tas U1.7 points, and a.s reported by the U.S. Department of La.bor, 
32.1 points. ('See Tables XI and XII.) 

The difference ;:aay be due to the bases used, the Hew York State 
Department of Labor using the average, I925-I927, and the U. S. Depart- 
ment of La.bor using the average, 192b. 

SEASONALITY 11' COAT AID SUIT IIDUST HY. 

The Coat and Suit Code Authority Table llo. 2, entitled "TJeekly 
riuctu.aticns in RL'nbers of TTorkers, Han Hours, Payrolls, and Production, 
Total U. S. Harket Area, for the year Feb. 5, 193^^, to Peb. 2, 1335"j 
shows that employment as 'measured by niuibcr of -'orkers fluctu.ated 
fron a high of 60,319 in the week ending Oct. 13, 193^, to a low of 
19,Ul6 in the vreek ending June 2, 193^. , 

As measured by man hours, the high .point wa-s l,79^>97^j ^'^ the 
week ending Ilarch Zk, and the low point v/rs 360, 7U9, in the week ending 
June 2. The high point in payrolls was $2,137,679, in the week ending 
Ilarch 2h, and the low point was $393,13^j ^^ the week ending June 2, 

Production units were highest at 727,620 in the week ending March 2U, 
and Icest at 152,289, in the week ending July 7. 

Percentages of averages under 



iJumber Workers 
lian Hours 
Payrolls 
Production 



ich heading 


are as 


follows: 


High 


Low 


'Variation 


ihc.o 


36.5 


100.5 
1^1,3 


IGT.O 
173.0 


3^U7 
36.2 


153.3 
136.S 



971H 



-64- 



TA3LE 110, X 



SEASOiTAL VASIATIOIIS IN EI,IFL0r3i:T AilD PAYROLLS IN NEI7 YOBi: STATE 
DIffiSS lilDUSTHY - 1529 - I932 

(IT. Y. State Dept. of La.tor, I926-I932 z lOO) 



HONTH 


E UrLO' 

1929 


YiSKT 


1932 


PAYROLLS 

iqsq 


iq^>? 


January 


105.^ 








93r9 


112.2 






so, 3 


Fetru-ary 


117,1 








91.9 


121.3 






7U,3 


Liarch 


116.0 








97.2 


120,6 






S5,o 


April 


115,1 








9S,2 


119.5 






Si.U 


i.Iay 


109,5 








91. u 


107.3 






69.7 


June 


102.1 








75o 


9S.3 






5U,6 


July 


SS.2 








^9t9 


S3. 8 






36,S 


August 


96.2 








75.^ 


100.9 






5S.2 


SepteLiter 


111.7 








S9,S 


126,0 






72, s 


Octolier 


113,2 








9^.2 


121,S 






7U.0 


LToveiiber 


107,1 








go, 3 


103.0 






5orl 


Docen'ber 


101. G 








S5.1 


IO5.U 






60. U 


VAHLATIOK 
Eif:h to Lo-7 




EiffLOr. 


"•"■7 


r-, 


P. 


iYROLLS 






1929 -- 117.1 


to 


S3 


> c 


126, 


.0 - 


• S3 


.s 


Deviation 




2S, 


.9 Poi 


nts 




k2. 


2 ? 


oints 


Deviation 


1932- : 


9C:.2 

Us, 


to 
.3 


1+9 


,9 


S5, 


.0 - 
Us. 


• 36 

2 


c 



971U 



-65- 

TA3LE i:0. XI 

IKDSS 1TUI.BEE5 07 E.IPLOYIviEKT 

VrciEr'S CLOTilll'G- - IIEYJ YOEK STATE 

Average ISS^-l??-? = 100 

(H. Y. Dcpt. of Lator) 

^^i01^1TH EMPLOYIIEI'TT 

January 6S. 7 

Fel)nj.ary 72.1 

Ilarch 79 -S 

April ■ . 7^.7 

Hay . 63. U 

June 53 . 1 

July 32? 1 

AugiJ.st 55*6 

Septerfoer 71*9 

October 7S.6 

ITover.i'ber , bo.S 

Decen"ber 62.3 

k-^erSiSie for Year ^5. U 



100 - 65.U n: 3U.S 



High Point 79«S 

Lo'j Point 33? 1 

Deviation from 

Peak to Slmrp , Ul,7 



-66- 

TASLE xIO. XII 
I^TOEX iroi.ffiEIlS OF EJ.IPLOY;,iElMT 

ALL :roi;Ei'!'s cloteikg 

AveT8.Qe of I92S - 100 
(U.S. Bepr.rtuent of Lalaor) 



liOKTE 


1532 


ELiPLOYIIEKT 


January- 




71.5 


February 




7U.U 


I.Iarcli 




77.5 


April 




76.2 


Hay 




71.6 


June 




6I4.S 


July 




U5.I+ 


Au£,u.s t 




53.^ 


Septenter 




66, S 


October 




70,6 


Novealier 




6U.S 


Dec enter 




5^.3 


High Point 




77.5 


Lov7 Point 




U5.U 


Deviation from 




Pealc to Slunp 




32.1 Points 



971^ 



a67" 

Table lTo» 2 of the Copt nnd SUit tiode Authority is not reproduced 
here n.s it is very voluminous, pnd ^'e h-^.ve outlined aoove the 
essential points for our TDur^iose. 

Other tables and charts -oreoared hy the Code Authority show 
seasonal fluctuations for individiial markets. (*) 

C0i^P.^J50:r^S 0? -/ACrSS 3P.T-.'J'-'IT HTS^E A!D QTJrSISE SHOPS - VjOIIEII'S 
APPARSL lyDUSTRY . The U. S. Census for the years 1909 to 1931, as 
shoTO in Table Ho. XIII, indicates that in 1909 and 1914 wages in con- 
tract shops trere considerably belo'.T those in regular (inside) shops. 
From 1919 to 1927 they were about the sarae. In 1931, average ajinual 
earnincs in regular and contract shops were !i?1139 and $964 respectively. 

COLIPAaiSONS O:" EnPLOYiSnT BETVSEU IHSIDE aid outside SHOPS , ^/hile 
it seems to be a generally acce-oted fact th-t in the apnarel industry 
the continuity of emoloyment and the total number of weeks worked per 
year is less in the outside than in the inside shops, no statistical 
data is available except that which was prepared by the Governor's 
Advisory Comnission i,'n 1925. For the analysis made by the Bureau of 
Research from -ecords of the Unemployment Insurance Fund, for the 
Governor's Advisory Comnission, it appears that during 1925 the workers 
in sub-manufacturing shops had an average of 26.8 fiill weeks of 
employment, as against an average for the inside shops of 57,4 full 
weeks. (**) The sttidies conducted by the Governor's Advisory 
Commission developed the following: (***) 

"It appears thnt during only a part of 
the spring season (1924) -'ere there era- 
ployed more workers than the full comple- 
ment in any of the shops. At no time during 
the fall season "e^e all of the workers 
employed, ''Saen the percentages of full 
co'ipleraents of "orkers employed each week 
in the three groups of shops (American, 
Industrial, and Independent) are 
compared, it appears that the 



(*) Coat and Suit Code Authority Tables ITos. 22, 42, 62, 82, 102, 
122, 142, 162, 182, 202.1, and 202,2 . (HPA Coat and Suit Code 
File) 

(**) Governor's Advisory Commission, Report of Special Investigation, 
p. 6, loc , cit , note p. 1 supra, 

(***) Governor's Advisory Commission, Report on "Employment and 
Earnings of './orkers, 1925", Part III, p. 25, 



•68- 



1-1 K d 

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o o o 



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■0 


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LTi 


r^ 


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VJD 


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CM 


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K-^ 


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rH 


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VX) 


r— 


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f- 


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L£^ 


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■ rH 


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CO 




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r— 


to 


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VX> 


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hn 


Lr\ 


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ta 






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r^ 


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r^ 


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t. 


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CM 


u~\ 


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r^ 


aj • 


I^ 


m 


VD 






H 


r— 


CT^ 


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un 


H 


u^ 


<Ts 


t^, 


lO 


ci 


r* 


(D 


en 


r 


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■ ^ 


CM 


cn 


M3 


(0^ 


1^ 


W 




t\i 


r^ 


m 


r^ 


oj 


,H 


cn 


r-< 


>o 


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> 


CG 


r-H 


r-H 




rH 


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rH 


rH 


r-i 


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<< 
























fn' 


CD 


H 


to 


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to ■ 


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r<-. 


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-69- 



fl-j-ctuation is c'reatsst in Aiaerican 
?iio^Tp. Durine the second vrea]:. in June, 
the A.-nerican shops shov.' employment of 
only 13> of the full conrolemenb of 
\7orjcers; the lowest percentr-^e in the 
other tvo rroups is 43.3***. A com- 
pai-isor. of the employment of vorkers 
in the Inc'.ustrirl Council and American 
shops sho'-'s that 'the former had about 
22,0 more re^-j-lnrity of einploA^ment than 
the latter". 

A letter of transmittal from Lindsav ?.o?:ers to the G-overnor's Ad- 
vison^ Commission, (dated hcv. 15, 1926), attpched to a report on "^m- 
plo^Tiient and a^f rnin.:5s of T7or-ccrs, 192:^", indicates tnat bet'reen 1924 
and 1925 there had been a. treiic to^vard more an emplcment, as tae average 
number of full v/eeks of emplo-Tiient oer year ir. 1934 rra.r 40 for the in- 
side shops and 31 v for the sab-man^ifacturing shoips, a,s compared to the 
figures for 132'^ of 37.4 ;ind 26.8, res"?ectivoly, a- given above. 

This ssime letter of transmittal states further that in 1924 the in- 
side shops gave 2Z%, and in 1S25 they gave 23'i more emploj.'-ment than the 
outside shops. 

Mr. David Dubinsky stated at the Coat and Suit Hearing of July 30, 
1933, that at that time the season (presumably meaning the total period 
of r/ork) in outside shops lasted in many insta.nces only eight to t\7elve 
weeks per -"^ear. (*) He further stated that the average employment for 
the indust:^3^ in 1933 had dro'Toed to not more than 23 '.7eeks ver year, or 
43> of the total available rorking time. {**) 

It is possiole that the Statistical Department of the Coat and 
Stiit Code Aiithority mav have r.a.do com-oilatior.s of man hours, and other 
pertinent data as bet"7een inside and o\itside shops during the code 
period, but no such brea:cov/ns ^'cre suomitted to us '.7ith the other code 
authority tables, and no addition-l informs tion on this subject is an- 
parentl:-- available. (See Table j'o. XI ^0 

COMT-VRISf^F OF "JAR--i:Tr;E aIZ> Ei;gLOYl.:EN? Ill C0FTru4CT AIID lUSIDE SHOPS - 
DPS35 II'IjuTTT'". In IS'^^S the Union made a stud'''' of sixty representative 



sho-os, (35 CO trrcting and 24 manufacturing). Even tho'Jgh the sample 
cannot oe considered adequate as conclusive evidence, the information 
obtained b-- tuis stud"'-, (see Table i'o. XI V) , tends to su"oport other 
testimony to the effect that '-orlrers in contract shoos earn less and 
are emplo "ed less thsn ''.■orkers in insid-O shops. 



(*) Trsnscrirjt of ilearing. Goat and Suit Inrus'-r-, J'll^'- 20, 1933. Vol. 
II, p. 2F3. 

(**) Transcript of Eaaring, Coat and Suit Industr-, <July 20, 1935. Vol. 
I, p. 97. 



-70- 



A further stucy by th.e Union in 1932, covering 27 contract and 32 
maniifacturing shops, sho'Js a -Jiff e rent isl of $2.15 per ^-.-eelc in average 
TDeak earnings oetvieen the t-^o classes of shops. (See Tc.ble No. X7.) 



^71> 



TASLE WO. XIV 



COMPA-^ISO::' OIP "SARiai'GS AFD ElvIPLOYMErT 
IF C01:THACT AED i.IAi;U?ACTURirG SHOPS 



DRESS IillUST^Y - 1932 



COrTRACT SHOPS i>IAivU7AC TURING SHOPS 



Average T;eekly 

Earnings ' $ 17.49 $ 22.65 

Average Annual . ■ 

Earnings 791.80 945.60 

Average Peak 

Earnings 32.49 ^ , . 34.64 

^ \f 

ifumber of T'eeks 

TJorked. At Peak . 

Rate 26.7 34.9 

Uneraplo--ed Time 25.3 ' 17.1 



Union Investigation 



9714 



•■72- 



TABL" 510 V XV 



3A?:-TirCrS 3Y ClrLl^TS a:'u c-rades 



DR3SS irDTTSTTiT - 195 





U A .: U Y 


^ 


C 


T 


"J R E R S 


(32 S.4CPS) 




GRAD3 


OPSHATOIIS 




PR" 


ZS5ERS 


rij 


;:iSHZRS 


A'/E'lAGE PEA-I 
-3 Craf-bG 


$ 6.75 
10.75 
15.75 - up 


$38.51 
32.98 
27.11 






? 


46.31 
54.24 
48.91 


$ 


22.18 
21.79 
19 . 89 


$ 35.70 
36.33 
31.97 


Avera.^e all 
Grades 


32.87 








49.82 




21.09 


34.54 








COUTH 


A 


c 


rp 


R S 


(£' 


7 SHOPS) 




$ 6.75 
10.75 
15.75 


$ 30.17 
31.75 
51.50 






$ 


45.25 
42.59 
47 . 34 


$ 


19.90 
20.07 
19.37 


$ 32.11 
31.56 
32.74 


Avera,?e all 
Grades 


31.14 








45.43 




19.78 


32.49 





Avera'-:e 'ian-'ofpcturins; Shops $ 34.54 

Average Contract Shops 32.49 

Di:"ferential $ 2.15 



(Union Investigation) 



9714 



•73- 



C OuPaI-ISOIi' J: ASEp _0J COAT iUD SUIT COD.: AUTHQIIITY DATA 

By corattinin;;- figures contalnei in TablesIII and IV, certain ratios 
may Ije obtained TThich are indicE.tive 'but not conclusive as to the conrpe- 
titive positions of inside and outside shoos. In Tpole XVI are shown 
coroparisons "betrreen inside and outside shops as to payroll dollar ^er 
",7orker and per garment, raan hours -oer ^'ari.ient, find production units per 
:7orkt-:r,. 

The differentials "shorrn in payroll per -."/orker uetxreen inside and 
outside shops cannot he considered accurate in that tliey a,re not 
hroken doi,7n "by crafts. (The inside shop employs cutters, one of the 
high wa^e crafts, i7hereas outside shops In most instances do not em- 
ploy cutters.) 

The other items in 13.1)16 XVI, indicatin;«5- that less "oayroll dolla.rs 
and less nan hours go into the production of a fjarnent in outside than 
in inside shoos, and that there is less loroduction per n-orker in inside 
than in outside sho"os, cannot he talcen as evidence of uaderpajnnent or 
speed-up in oxxtside shops. The fLn,TLros are merely;- interesting as indi- 
cations that the outside shops in .-enerol are apparently en.'^ajed in the 
""DrodrLction of (garments in tho comparatively 1ot7 price ran(;es. These 
figures might also he erroneousl"- interpreted to indics.te greater effi- 
ciency per \7orker in the outside shops as compared to the inside shops. 

i.iORTAL irf . Data on discontinuation, oi' firms in the apparel indus- 
try is generally inadequate as a measure of distres s mortality, as the 
reasons for discontinuation of hii.sine js are not usiially given. That 
there is an ahnorma^lly high rete of turnover for one reason or another, 
however, cannot he denied, even though available evidence is fragmentary 

Tahle Ho. XVII shov.'S tnrt in 1920 and 19S0, 24)ii ajid 24.3^ respec- 
tively, of firms in the Dress Industry, of -yhich records were kept hy 
the national Credit Office, discontinued business. 

Table ilo. XVIII shov/s that of pxi original group of 1687 dress ma.nu- 
factiirers in 1925, 22. 2^5 discontinued in the year 1927-28; between 1925 
and 1929, 58.9^ had discontinued; and between 1925 and 1933, 83,6^i had 
discontinued, leaving onl;^ 16,4^ of the group in business after eight 
years of operation. 

Table XIX shows the restilts of a Union investigation of 927 dress 
contract shops from 192S to 193", and indicates that in three years 
68-1/6^0 had discontinued; in seven year 81-2/3-^. Comparison betvfeen 
inside and outside shops is not obtainable between Tables XVIII and 
XIX because the latter covers a perio^L of one less year. 

Table ITo. IS shows that in the year from Jeb. 5, 1934, to Peb. 2, 
1935, 20,7/5 of inside sho"5s and lo.O^o of outside shops discontinued 
bxisiness in the industry as a whole; for the lle^- York lietropolitan 
Market the figures '-^ere 21el^j and 14. Gfj respectively, ajid for markets 
outside of How York, 19.9yb and SO.Ovj, respectively. Incoming concerns 
replaced outgoing to the extent that in the market as a whole there was 
a net increase of 3.5p in inside shoos, and a net decrease of 7,3)o in 



■74- 



outside sl.o-os; in the IJe-- York Hetroriolitan lu'arket, inside rnc. outside 
shoTos deci-ep.sed 0«S,'d r,rj\ 8»Ofo, respectively; and in the markets orLtside 
ox" Ke-' York inside shops increased lofS, "hile the nunter of outside shops 
reraa.ined -unchanged. 

While there is an apjnrent trend indiccteu hj these figui-es in 
favor of the inside slio-o, the evidence is insufficient in time covered 
to 'vprrant conclusions, other thnn rs to turnover, and caution n ast "be 
exorcised against drawling deductions p.s to ths ap'oarently greater 
stability of the outside shops in the lie" York market. In Fehruary, 
1935, the codf; had "oeen in operation for sone time. Unf ortunr^.tely, rre 
ha.vo no data as to \?hat immediate effect the code provisions hnd on the 
ti,70 types of sho;DS. 'To explanation is offered rs to the high turnover 
in outside shoos ia m.- .rke t s outside of He'-- York, or as to the increase 
of inside sho^DS in these markets. 



9714 



:7S~ 



TilBLE. 110. XVI 

COtlP/iF.ISOlIS 3ETI7Eni IlISIDE AID OUTSIDE SHOPS 
AS TO PAYROLL DOLLAR PSIi VORKEi. Ai.'D PEIi C-AiiivIEi-iT , 1,'IAlJ HOURS 

PE... GARI.IEITT, aLD PHODUCTIOli UHITS PER WORKER l/ 





PAYROLL $ 
PER VJORICER 


PAYROLL $ 
PER G-A^liT. 


i,IAlJ-HRS. 
PER GARilT. 


PRODUCTION 
milTS PER WRIOl. 


U. S. liARKET 
Inside. Shops 


$ 


1193 


$ 


3,31 




3.25 


329 


Outside Shops 


888 




1.96 




1.71 


384 


N.Y. 13T. AREA 
I/IARKCT 

Inside Shops 




1305 




3.7? 




3.12 


350 


Outside ShoDs 


880 




2.64 




1.64 


456 



ly Com-oiled fron data in Ts.hles; III and IV. 



TABLE HO. XVII 
TURIIOVLR in THE DKESS IiZ)USTaY - 19>j9-1930 



Started in 



1929 1950 

Famter Percent llumoer percent 



Total Concerns 1,991 100 }i 2,072 100 % 

Concerns Dis- 
continued 478 ' ' 24 ' 504 24,3 



Business 


709 


35,5 


Moved 


347 


17.4 


Changed Price 
Range 


389 


19.5 



621 29.6 
353 17.0 

583 3o»0 



(national Credit Office) 



9714 



TABLE ilO. XVIII 
TUEIIOVEH Ai'iOIIG DPlESS LlALnjiViCTUEEES - 1925-1933 



'n:AR ORIGI'IAL ITLri.IbES DISCOI"TDIUED STILL Ii: BUSIIIESS 



Spring 1927 

to 
S:orinc 1928 1,621 360 1,261 



.22 1/5 ■•; .77 4/ 5)0 



Springs 1925 

to 
Spring 1928 ., 1,G87 994 693 



38 9/lOfo .41 1/lOfo 



Spring 1925 

to 
Spring 1933 1,687 1,411 276 



.83 3/5)0 .16 2/3^ 



9714 



(Pairchild' s Toraen's Uear Directory) 



July 1926 
July 1:329 



•78- 



TABLZ XIX 
lUBITOlTir. AllOla- 31^2.35 C01;K1ACT0R3 - 1926-1933 1/ 



OPJGIIIAL DISC01."TIi!U2D fi STILL III i 

YEiia IRJI.BZR 3USI1IESS 



1/5^ 295 31 5/0 



July 1926 
Jsn. 1933 



927 757 81 2/3 170 18 l/C 



1/ Submitted by I.L.G-.IT.U, in support of Labor Provisions to be 
embodied in Dress Code. 



9714 



EH O fl 






w 




o 


m 


1-H 


P 


W 


o 


F-i 


^cl 


t3 


CO 


o 






w 


u? 


-d 


t! 




s 


{i 



■^ Td 






ci 






o 03 


^ 










rQ S 


C(-l 




CO nj 


o 




EH -P 








9 




1 r-t 


-d 


i-H 


O 






+^ P- 


w 


0* 


(D O 


+= 


rH 




^ 




K; ffil^ 




O 



;?1 



-80^ 



^Oi.SIT'S APPAIGL lOUSmY Table XXI 
CO:.;pAK [SOII OF P P.Il'giP AL C0rT?ulCr0R-J033ga PH OVISIQI'S 

"'BLOUSE c",'GOAT ^c 'DPJSSS ' I i.'PAj.\'TS ' &' COTTOiM 
CODE ' SKI?.? ' SU IT ' I.gG-. 'CMILDPEhT'S'GAPi.El-TT 



(?,'i.:;e of 
( Code 
( 



613 Code 
5 Amend. 



13 Amen- 
ded 
Code 



S3-94 '521 Code 
Code ' 
""■.eorint' 



1 He- ' 

Reprint' 

Amen. Code 



PROVISION 
ivianufacturer/joboer pay con- 
tractor amount sufficient to 
cover code r--,^es 

Manufacturer/ Jobber pay con- 
tractor amount sufficient to 
cover code T.''ares, plus over 
head 

Designation of contractors 

Confine ■ uorfc-to' designated 
contractors 

Equitable distribution of 
TTorl: 

Limitation of manufacturer/ 
jobber liabilit""-, claim by 
contractor murt be made 
v'ithin (2 veelcs 
(3 v,'eekB 

Registration of contractor 
with Code Authorit:'' 

Contractor shall open 
boo^:s re claims 

Rights of employees not 
limited hereby 

Obligatory \miform order 
blank 

IJo \;orI: to contrrctor held 
in violrtion .b-- Code Autiij^. 

Ho uncut matorinls to 
contractor 

Ko charges against contrac- 
tor except for materials. 
Net no discount, llet yardog'e 

Provision for further inves- 
tigation and/or regulations 
to be adopted 



CLE AiCD 



:gtio]." (o:-. pa-^aCt^aph) 



III 8 



111^9 



III 9 



in 9 



VII 1 

VII 1 
VII 1 

VII 1 

VII 1 



VII 1(a)' 

VII 1 (a) 
VII 1 (b) 



VII 1 * 
(d) (e) 



Jni 1 Ca) 

VII 1 (b) 

^VII 1 (a) 

VII 1 (a) 
VII 2 



VII 



VII 5 'VII 1 (f) 



♦implied, but obligstory by infererce onl'^. C/ode Author 

to orevent discrimination. 

9714 



VI 4 



VI 2 



VI 3 



VI 5 'XIX 



t:' given pover 



-81- 



T/:BLE ho. XXII 
TTOLiEiT'S AP^iiREL IxjDUSTRY 



lluniber oi Estaolishments, Value of Product, ITurater 
of T7age Er>rners, Avera^;e Annual ^age, 1659-1933* 





Kumter of 


Value of Product 


Numter of 


Average 


Year 


Esta.Mishments 


(000 omitted) 


Wage Earners 




1859 


188 


$ 7,000 


5,739 


$ 208 


1869 


1,847 # 


13,000 


11,596 


215 


1879 


552 


32,000 ' 


25,192 


254 


1889 


1,224 


58,000 


39,149 


394 


1899 


2,701 


159,000 


83,739 


389 


1904 


3,351 


248,000 


115,705 


442 


1909 


4,558 


385,000 


153,743 


511 


1914 


5,564 


474,000 ■■ 


158,907 


548 


1919 


7,711 


1,209,000 • 


155,549 


1,179 


1921 


7,061 


1,023,000 


144,855 


1,280 


1923 


7,046 


1,407,000 


133,195 


1,325 


1925 


6,127 


1,294,000 


125,456 


1,384 


1927 


7,588 


1,494,000 


154,459 


1,359 


1929 


8,082 


1,710,000 


187,500 


1,301 


1931 


7,046 


1,292,000 


173,890 


1,088 


1953 


5,351 


846,000 


159,825 


797 



* Source: U. S. Census He^oorts. The 1933 data came from the 

Preliminary Census Report. 

# This figure is exaggerated, since it includes all establishments 
which manufacture women's garments, even through the hulk of their 
product consists of men's clothing or other articles. 



9714 



-82- 



??.I1ICIPAL 1^.KDZ AS30ClATI0i"3 OF THE Dl^ESS AJD THE 
COAT A'^ SUIT IHI)USTRI':S, TOGET'IER 'wITH IimUSTRY 
SLEiEIITS 0^ -.allCH laCBERSHIP IS CHIE7LY COITOSED 



TAIvlE 0? ASSCCIATIOII 



IlIDUSTr.Y ELEIEITT 7IEPPESE1ITED 



The Affiliated Dress I.Ianu- 
facturers, Inc. 

The National 'Thole^ale Dress 
Manufacturers Association, Inc. 

The United Association of Dress 
Manuf ac turers, Inc. 

The Industrial Council of Cloak, 
Suit and Skirt ..ianuf a c turers, 
Inc. 

Merchants Ladies Garment Asso- 
ciation, Inc. 

American Cloak and 'Suit I.lnnufac- 
turers Association, Inc. 



Inside Sho'D Dress MnnufacturerE 



Dress Jo^obers 



Dress Contractors 



Inside Shop Coat and Suit 
I "anuf acturers 



■Coat and Suit Jobbers 



'Coat and Suit Contractors 



~3i 



(iVOfOJ'S WZAE DAILY 
APRIL 18, 1934) 

IH TH":i CCU_-1T 0" PUBLIC OPIITIOIT 

UlIITZD ASSOC lATIOiJ 0? DIlZSo IvAiTOmCTUIGHS, IlIC. , 

for and on oelmlf of all dress conlractors, COLPLAniAlIT, 

-AGAIiJST- 

TKZ "NATIONAL DH3SS r/AuXTFACTuPERS' ASSOC lATIOlI, Inc., 

representing dross jobters and manufactiirers, DEPEITOAIIT. 

We cliarge the National Dress Manufacturers Association, Inc., 
and the johhers: 

1. That the joDDers are wilfully and selfishly, to the detriment 
and loss of all the contractors and Vvorhers, violating the collective 
agreements betreen the jobhers and contractors, in that 

A. They are not registeriiig their contractors either with the 
United Association or the Code Atithority, in violation of the 
first paragraph of Article V of our collective agrcomsnt. 

1. Each Johher is employin,^ as ma.ny nev; contractors as 
he feels will serve his purposes. 

3. To checV: ui and ■:)rosecute these violations pursuant 
to Article V would require the "ooli-e force of Hew York 
City — an army of clerks to adjust them, — and a number 
of Impartial Chairmen to fully dispose of them. 

3. The old system of juggling of contractors to b eat down 
prices ha.s been revived. 

B. They are not confining work to members of the United Asso- 
ciation, in violation of Article I of our collective agree- 
ment. 

1. Ueu contractors are set v:p in business by the jobbers 
to beat doATO standards. 

2. Jobbers are establishing their omi factories. 

3. A favored few contractors — "regular fellows" — arc 
bein,:: financed to extend their plants to starve out groups 
of contractors. 

C. No uniform order blank has been put into practice as yet — 
eight months after the collective agrceraents were adopted in 
Augrust, 1933. 



9714 



D. Price calculations on orders b.s provided in Article IV of 
tiie collective a,_,i'ee:iient ax'e not carried out !);> any joliljers. 

1. Imossitle to ascertain v/hat Trice vjac figured 
l)y tii3 Joliter for lator and for overhead. 

3. Joboers cliB.n^in,-; tlie price ranje of dresses in 
order to ^et th-a "benefit of lovrer wage scales and 
lower flat irices fixed by the Union with the jobbers. 

3. Contractors are not ;oaid thirty-five (35,j) for overiioad. 

1. In very many instances, tiicre is no allowance to the 
contractor for his overhead. 

2. Thirty-five (35)) insufxicie". t for contractors malcing 
dresses selling; for $10.75 and r:p. 

F. Secret rebates (popularly called "kick-backs") are obtained 
from contractors by any ironoer of ingenious devices. 

1. Some jobbers cash checks and refund only part in cash, 
retainin;^ the difference. 

P.. Contractors in cortai.i instances are comTiellcd to bring 
back the rebate in cash. 

5. Charges are ina,de by some jobbers for materials and 
trii7imin;;s which are never supplied. 

4. Charger are made by some jobbers for return of dresses 
never delivered. 

5. Promium is placed upon dishonesty. 

6. Some jobbers j.eep se;oarate sets of books to hide these 
rep rGhonsible n racti ces . 

7. Effect is to reduce tne i:>?.yments by the jobber for over- 
head — to wipe out claims for non-payment of miniraum labor 
costs — to ^et refunds on Impartial Cmirman decisions. 

G. Jobbers are discriminating against contractors by placin^ orders 
with contractors who arc the "regular fello^-'s". llo eoiiitable 
distribution of wori: in violation oi Article V. 

H. Contractors are discarded by jobbers for refusing to give "ld.ck- 
bac.-s" and for filing com,Dlaints. 

I. The machinery for the adjustment of complaints lias completely 
collapsed. Several weeks and in some cases 'even months, are re- 
quired to dis-'.osc of complaints. 



J. Jot'Ciers are v/ilf-ally delaying and hindering the hearing and 
determination of cases tefore the Impartial Chairman. 

II. Standards liave collapsed in all "branches of the dress industry, 
malcing it necessary to reorganize. 

1. Ho control of cost of production. 

2. Inside nB.nufacturers and many contractors vrorking more 
tlmn thirty-five (35) hours per week, including Saturdays 
and Sundays. 

3. See I. 

III. Impartial Chairman machiner;;/- clog.^ed with mass of complaints. 
Justice dela.yed is no justice. 

IV. La"bel distribution is ineffective, useless. 

1. Labels being distributed by jobbers to contractors 
irrespective of whether said contractors are conplying 
with the requirements ox the Code or not. 

2. Violations of v;agc scales and hours of work are legion 
in outlying districts. 

3. Label merely certifies that dress has been manufactured 
^ov a preferred contractor, (preferred by the jobber). 

BCAHD OF DIIGCTORS 

TOUTED ASSOCIATION OF DESSS MlTUFACTimERS, IITC. 



COHTMCTOHS IGI.IZDIAL SUC-GSSTICHS 

At a conference with the Committee of Jobbers as long ago as 
March 12th, 1934, we proposed remedies to improve the present impossible 
conditions for contractors, and to eliminate some of the flagrant 
violations by jobbers as follows: 

1. That jobbers and manufacturers shall not change, or add 
to or reduce their contra-ctors before approval is obtained 
from the impartial machinery. 

2. Provisions to be added to the collective agreement for 
penalties for violations of its terms. 

3. Jobbers shall not opor. inr i ^e factories during the life of 
the agreement; inside manufacturers erq^loying contractors 
shall not increase their plants during the life of the 
agreement. 



4. Work shall be distributed by jobbers equitably to and 
among the contractors and between the inside shop and the 
contractors at all tines. 

5. The adoption of a scientific system of settlement of 
piece prices for all price ranges. 

6. Improvement of our adjustment machinery so that complaints 
may be more efficiently and speedily adjusted. 

7. The immediate use of the uniform order bla.nk by jobbers. 

8. Tlmt labels be distributed to contractors directly by the 
Code Authority, upon certified orders from jobbers. 

The said Committee promised to t^ive us an answer in ten days, 
but no answer was received. 

At a nembershi;: meeting held on April 3rd, our mehibers voted 
to shut' do\im their factories not later than April 15th, in the event 
that we could not get together with the jobbers to work out a, con- 
structive program to improve conditions in the industry. 

On April 6th, we again wrote to the jobbers asking them to meet 
v-s in conference op. or before Tuesday, April 10th, to dispose of this 
matter. This letter was ignored. 

On Tuesday, April 10th, at a fnembership meeting, the then exist- 
ing status of negotiations was reported to OLir members and the unanimous 
sentiment expressed was that the jobbers were resorting to their cus~ 
ternary dilatory tactics to continue the nresent deplorable condition of 
affaird. There was no alternative left to the leaders of the United 
Association but to follow out the mandate of the members. 

After the telegrams ca,lling for the stoppage had been sent out to 
the members, the jobbers prevailed upon the Impartial Chairman to render 
a decision branding the stoppage a violation of the collective agreement. 
As indicated, the jobbers have violated practically every term of this 
same agreem.ent. 

They lia.vc not come to the Impartial Clmirmp.n with clean hands. 

They have no moral right to seek relief when they themselves have 
flouted every provision of the agreement. 



United Association of Dress Manufacturers, In 
2y SALi OXHOKI, 
President 
9714 



-87- 

SCHE33ULS "A" 

PROPOSED AI,eilDf.ENTS TO ARTICLE VII OP Tlffi 
CODE OP FAIR COIIPETITIOIT POP THE DRESS LIAIIUPACTIIRIITG IliDUSTPY 

1. Strike out the f ollOTrinif words in the necond paragraph of Section 1, 
subdivision "a" of Article VII: 

"provided thg.t claim for such underijayraent shall have 'been 
made v/itliivi t\70 -.'eckr, of the next f olloT/int;; customary ac- 
co\intin;-:; settlement period." 

2. Strike out present TDaraj^rpphs ""b", "c", "d" ,-ind "e" and insert nev? 
paragraph ""b" readirag as follovs: 

"I.Ianufacturers and jobbers who cause their garments to be 
made by contractors shall immediately designate the number 
of contractors to meet their business requirements, shall 
confine ajid distribute their uork equita.bly to and amongst 
the said contractors pnd/or aiaongst the said contractors and 
the inside factories rhere sucli inside factories are being 
operated. All contra.ctors de-;ignf:>,ted as herein provided must 
be immediately re_'7istered by the jobber and/ or manufacturer 
■.7ith the Dress Code Authority." 

3. Add new para.graph " c" reading as follows: 

"TJlien a jobber or raa.nufactiu'er desires to cancel a. registered 
contra.ctor or register a nevr contractor and before he gives 
work to the nev; contractor, hs must file a notice of such pro- 
posed cancellation or registration with the Dress Code Authority 
and the recognij^ed Association of contractors for the particular 
area, if there be any, with a statement showing the reason or 
ca\ise for the reqjaested cancellation or registration. Unless 
an objection to such cancellation or registration shall be filed 
with the Dress Code Authority within 48 hours after the receipt 
of said notice, the requested cancellation or registration shall 
be deemed confirmed. If such objection is filed, the issue 
siiall be heard aaid determined by such "oerson as may be de- 
signated for that purpose by the Dress Code Authority, within 
three days froi.: the filing of the objection, either apiDroving 
or rejecting the contested registraition." 

4. Change the designation of -oaragraph "f" to "d". 

5. Insert a new paragraph "e" under Section 1 of Article VII reading 
a.s follows: 

"Jobbers and outside maniJifacturers who nnnuf ac ture garments 
exclusively through contractors sliall not change their system 
for the period of the existence of this Code. Inside or out- 
side manufacture rr-, oper-^tin;,- inside factories F.nd era-'iloying con- 
tractors shall not increa.se their prer'.ent inside fa,cilities for 
a. like period of time," 



(notice of Hearing: IIo. ?^0-!' Pebruary 2, 1935 
Dress Manufacturing Industry Amendment Proposal) 



-88- 

SCHE3ULE "3" 

HEGISTRATIOl: QF COIITFACTORS 

1, TTnen n jolDoer or manufacturer desires to register a contractor 
and ■before vrork is given by the job ler or Liamifacturer to the con- 
tractor (not including bona fide duplicates) , the jobber or nanu- 
facturer must file a notice of such proposed registration with the 
Dress Code Authority and the Association of the contractor, if there be 
any, on forms Tjrescribed by the Dress Code Authority, stating the ground 
for the application." In case the. contractor is not a member of any 
Association, then the notice of the proposed registration shall be sent 
to all of the contractors of the jobber or rnantLfacturer intending to 
register the contractor. Unless an objection to such registration shall 
be. filed with the Dress Code Authority by the Association of the con- 
tractor, if there be any (or by the individual contrrctors -^here there 
is no such Association), ivithin forty-eight (48) hours thereof, the 
registration shall be deemed approved. If such objection is filed, the 
issue shall be heard aiid determined by such person as ma;'" be designated 
for that purpose by tho Dress Code A^^thority within three (3) days from 
the filing of the objection, either ap-nroving or rejecting the con- 
tested registration, subject to paragraph "3" of these Ilules and 
Regulations, 

. 2. i-Io work shall be given by a jobber or majiufacturer to a con- 
tractor, or accepted by a contractor from a jobber or manufactiirer un- 
til registration has been approved, except that a contractor may make 
bona fide duplicates for a jobber or manufacturer, 

3, After the approval of the registrrtion, as hereinabove set 
forth, copies of the first three regular orders shall be filed by the 
jobber or 'manufacturer with the Dress Code Authority and the Association 
of the contractor, if there be any, Before delivery of the third re- 
gular order to the contractor, the jobber may cancel the registration 
without cause. After the third re,galar order has been given by the 
jobber or maniofacturer to the contractor, the registration cannot be 
cancelled except for cause as set forth in the Code of Fair Competition 
for the Dress Ilanufac touring Industry, 

4, The term "regular order" as used herein means that ojuantity 
of work given to a contractor by a jobber or manufacturer as is usual 
in the established conduct of the manufacturer's or jobber's business 
at that tine and season. 



(Notice of Hearing: LIo, 2C-LI 

February 2, 1955, Dress Manufacturing Industry 

Approval of Rules a:id Regulations) 



0VEELA.7PIF& BETWEEN T-TE DRESS A'o) THE COTTOH '^-AP.'CEI'TT CODES 



-3714 



IMPOBTAITCE OP T}IE I'R SSS - COTTtvF qARiJEK T CO' TTHQ-y^HSY 

The overla"'pin^ betv/een tne ^'Dress Code and the Cotton Wash Dress 
Divi'^ion of the Cotto?iGarment Code ras only one of a ntunher of such 
problems Y/hich arose in the adniinistra,>l^ior: of the a""'parel codes vinder 
NEA, hut it assumed a position of ^-^reat inroortance in view of its dis'- 
tiorhing effects uno:- both of the Industries involves, the acrimonious 
nature of tne controversy, and the continued, strenuous, hut ireffective 
attemijts made at solving; the prohlem. At t/ie time the codes were form- 
ulated it was recOijnized that the definitions adopted were inadequate 
in determining the absolute dividing lines hetv/een the tv/o Industries, 
hut it is doubtful if there existed any realization of the extent of 
ovcrl-L-:'ping rdiich was soon to be revealer' , or of the difficulty or im- 
possibility of devising sufficiently flexible and practical adminis- 
trative policy and procedure to deal with all of its ramifications. 
It is impossible to evaluate the act^oal damage done by the conflict to 
either of the "oarticipants , but the psychological atmosnherc created 
by the belief tiiD-t the various solutions attempted were discriminatory 
and damaging to one side or the other, threat- :ied to u;:dermine the 
whole IIRA. program under both codes. 



ROOTS OF ThT PRCBLZM 



The Apoarel Industry is roughly divided into major groupings and 
subdivisions in accordance with the mar'^ets covered, the types of 
garments produced, the production and distribution methods followed, 
and tne degree of specialization practiced by individual establish- 
ments and groups. While there is sufficient uniformity of practice 
and community of interest to identify tne general areas covered by 
the different groups, the lines of demarcation are seldom, if ever, 
distinct. 

Soraeti les it is -ossible to formulate accurate definitions of one 
or more of the f-'>ctors which determine general industry groupings, 
but the boun.daries so established ?re not necessarily followed by in- 
dividual manufacturers. The Men's Clothing Industry, for example, is 
distinguishable from the Women's Apparel Industry on the basis of con- 
sumer marltets served, but this docs not fxirnish an absolvLte formula 
for the classifications of all m.anufacturers in the tvra Industries, 
There are makers oi coats, belts, garters, l:iats, and many other articles 
who produce lines of apparel for botn men and i7omen. Then too, it is 
the practice of many manufacturers to change their type of product 
seasonally, or during a season, in order to utilize their equipment to 
best advantage, or to follow sudden develtopments of f shion. In this 
manner, a shop making silk or cotton dresses in the spring may shift 
to twoed suits or cotton blouses in the fall. 

More often, it is difficult or impossible to define clearly the 
basis of classification. There is common under standirg of certain 
descriptive terms applying to general functional tj^pes of garments, 
such as coats, suits, dresses, blouses, or skirts, but it is not 
always easy to make written (definitions of these articles, and in the 
infinite variety of garment types produced there are many borderline 



hytridG which defy exact clapsif icntior.. The essential fact is that 
product definitions apnly to products, and not to the individ^l manu- 
facturers who compose the industry groups, and -'hose freedom of choice 
is relatively ur.limited iu d'stermininr: tlie exact nature of work to he 
performed. General groups may he loosclj^ hound together by certain 
common denominators, ^v.t there are individuals in each group whose 
interests or -oractices coincide 'in some measure with those of in- 
dividuals in other groups on the o-.sis of ubhcr cormon denominators, 
and clear-cut houiviarics cannot he located "by definition if they do 
not exist in fact, 

CRYSTALLIZATIO N OF I SSI^S JJ-^T.^ I'RA 

Jurisdictional disputes and difficulty in the administration of 
collective agreements, caused by overlapping hetY^een organized hranches 
of the Women's Apparel I?idustry, had existed prior to NEA. These 
prohlems were normally local matters to he settled hy the regular pro- •• 
cesses of adjustment hetween luiions and employers. The ^'Rk not only 
widened the scope of ii-dustry control and emhraced segments of industry 
whose activities had previously heen '.without regulation, hut also gave 
official recognition to each group that was ahle to make a showing of 
homogeneity, ajid, most important of all, TRA established differentials 
hetween codified grouos in v,ages, hours, terms of- sale, and other 
operating factors. Even though certain of these differentials had 
existed in previous years, they had heen more or less hidden from 
general view, and their puhlication, togetner with the opportunity for 
■encral discussion and the' vuicing of complaints at code authority 
meetings and hearings, focussed the attention of industry upon them, 
and hrought ahout organized opposition hy groups who considered that 
the codes were operating to their disadvantage. 

THE I AS IS OF CODI DIFFr.RTnTIALS 

In the adoption of wage scales for a particular code, there were 
a number of considerations to '7nich die weight liad to he ;?iven. Two 
of the prim.ary purposes of the National Industrial Recovery Act, of 
increasing purchasing povrcr and spreading employnnent , implied that wages 
he raised and hours decreased, hut too large an increase in wages or 
decrease in hom-s would have endangered the possibility of successfully 
accomplishing the tMrd primary purpose of the Act, - tlmt of stabiliz- 
ing industry. It Y;as necessary to recognize in some manner the status 
of each industry to pro-code wages and Jaours in order to avoid the im- 
position of too' great a hurdon. The increas of wages and the decrease 
in hours in each'^instance had to he limited to the extent practicable. 

Then, too, certsin unionized industries load operated for years 
under collective agreements which had provided elaborate, graduated 
wage schedules at various levels for the different crafts. The prin- 
ciple of classifif-d wa.-cs was continued uiider the codes. This did not 
apply to industries whose 'wages in pre-code days had been unclassified 
and on generally lorrer levels. In the case of the Wash Dress Division 
of the Cotton Garment' Code , the average hourly wages in March, 1935, 
are reported as 19,1^, the weekly wage as $8.85, and weekly hours as 
46.3. It is easy to see that the sinrple oasis minima established by 
the code, ($13 per week in the llorth and $12 in the South, or 36,l(zJ 

9714 



and 33.3^ respectively ^^er hoiir on n -PG hour week), a:i&. the code 
mazimtun hours of 40 and later 56,- represe;"ited a very con'siderahle 
increase in rates of" pay a,id decrease in hours. The actual accom- 
plishment was even more striking. In February, 1935, tinder code 
conditions, the averag-e hoiorly wage is reported as 41. 2';^, the weekly 
wage as $13.50, a,nd the y; ekly hours as 32.8, It should also he 
noted tliat the pre-code figures are averages. It is stated that "many 
individual plants submitted records to the Cotton Garment Code Author- 
ity admitting payrolls as low as 8rf an hour on a 54 hour week", (*) 

Ko exactly comparable data is available on the "rcgul-^.r" Dress 
Industry, but Table llo. X]QII (See p. 144), obtained from uaipubli shed 
data secured ''oy the Bureau of Labor Statistics in cooperation with 
the Division of Research and Tlanning, IIEA, serves to indicate that 
the pre-code hourly v/ages were about 3.87 times, and weekly v/ages 
about 2,2 times as high as in the Wash Dress Indxistry, while hours 
were about 25f5 less. 

The wage differe:itials between codes vrere the r-^sult of attempts 
to adjust each code to the capacities of its industry group. Too wide 
upward adjustments in v/ages would have endangered the stability of 
large bodies of industry, and perhaps unsettled the economic structure 
by causing violent shifts in the sources of goods and the channels of 
distribution. Equally, it v/as felt tliat high wage industries sho\ild 
not run the risk of breaking do\7n existing v/age ra.tes by simplifying 
code schedules on the principle of basic minima. 



(*) Data submitted by Statistical Service Dureau, International Asso- 
ciation of Garment Ilanuf acturers, April 19, 1935, compiled from 
reports of 155 identical Tfesh Dress Plpnts re^^resenting two-thirds 
of the workers in the Industry, (in iillA Files, Cotton Garment 
Code, Overlapping Polder) 



9714 



-93- 



tii;le m. sun 



DIffiSS IIIDUSTRY 



Average Eovxly Vago Hate, Avur^ye Xleelily Earnings, 

and Average Weekly Hours, 1933 and 1934 a/ 



Item 



1933 



1934 



Average Hourly Wage Rate 



.549 



,728 



Average Weekly Earnings 
Average Weekly Hours 



19.51 21,08 

34.9 27,3 



a/ Reporting establisiunents considered to be almost completely covered 
ty the Dress Code, Data reported for reek ending nearest 15th of 
the month, 

'hj Based upon a representative sample covering an average of the estah- 
lisiiraents and nearly 350 em"oloyees in 1933, end. a much larger group in 
1934. 

cj Based upon e representative sa.mple covering an average of 76 estab- 
lishnents and about G5C0 ernployeus in 1933, and a muclr larger group in 
1934. 



This Table is auotel from "History of the Code of Pair Competition 
for the Dress Manuf acturinj;; Industry", by Walter A. Simon, p. 65, 



9714 



TH3 BASIS OF IITSUST HY a3.0'(J?l"G immZ ^H3 C0D5S 

In retrospect it is easy to tuidei-stand the con-pjination of circwi- 
stances that permitted the codes to establish more or less artificially 
exact or rrhitrary dividing lines "betveen so-called "ind_ustrips" , v,h»se 
actiaal ■boimd:„ries were indefinite. 

Pandamentally, the explanation lies in the principle of a^xtomonous 
industrial self-iZoverninent established by the National Industrial 
Recovery Act. Section 3 (a) of Title I of the Act provided that, "Upon 
the application to the President by one or more trade or industrial 
associations or groups, the President may approve a code or codes of 
fair com-)etition for the industry or industries or subdivisions thereof, 
re^oresented by the aoolicsnt or applicsjtits * * *", ^-'ith provision that 
such ap^olicants should irroose no inequitable restrictions on nieinbershir) 
and should be truly rppresentative of the industries whose codes they 
sponsored, and further orovision against the oneration of codes in a 
mono-holistic or discriminatory m:anner. Sin'oly stated, this meant that 
industry was to determine the dividing lines between its subdivisions, 
and that in the majority of case.; these boundaries vould follow the 
lines of trade associa.tion organization. 

The factors res-oonsible for the organization of trade associations 
were often other than those bj/ v;hich an indu.stry coixld be identified 
under a code definition. At the time the codes were written, there 
were sponsoring trade associations v/hose raembership was determined 
perhaps ba^sicall?/' by siuila.rity of product, but the more immediate 
determining factors, the factors responsible for divergence of interest 
or active antagonism between groups, were geographic location, union 
or non-union affiliations, g-?nerpl differences in wa^e levels or'other 
operating factors, or similarity of functions performed., such as "inside" 
shop manufacturing, jobbing, or contr-^cting. Of course the s-Tecific 
na,ture of a given product has a lot to do with the cond.it ions ujider which 
it is made. The production of certain articles requires a higher degree 
of skilled worlmianship th.?jn others. Manufacturers of such articles find 
it necessary to be located in a community where aai adenuate sup-ily of 
skilled workers can be obtained a.t all times. On other articles, the 
influence of style and the rapidity of style change make it necessary 
or advantageous to be located in a central market vhere the latest 
patterns v;ill be submitted to manufa,cturers by designers, and where 
the latest developments in the fabric field will be seen as soon as they 
are brought out. If a ma:iufacturer lives b:,/' copying the successful 
creations of his competitors, and this is a very ;orevalent practice, 
it is essential that he be on hand to do his copying. Geographic 
location and methods of ■:)roduction are therefore detei-mined by product, 
and as union org: nization and control are most easily effected in con- 
centrated production areas, union affiliations are largely determined by 
geographic location. The establishjnent of dividing lines between groups 
on the '^asis of product wa.s therefor<r- rserhans as logical as any other 
conceivable basis. Moreover, one of the fundamental purposes of the codes 
was to establish enuality of competitive op-.ortunities as between manu- 
facturers of specific products. In a manufacturing industry the basic 
unit of competition is the article produced and sold. "Pai'J^ comt)etition" 
implied uniformity of such regulatory provisions as might be adopted 



affectinc the conditions of o-ieration in the ■^rodxiction or distribution 
of each ty;De of product. Invperf^ct ps were the industry definitions 
based u'oon -oroduct, no other hn.sis could reasonably have been ercpected 
to classify related grou-is of co..v-)etinj; manufacturers under the codes. 
Tae difficulty arose from the fact that -hatever definitions were adopted, 
they failed to include all the coriDetitors on a ;,iven tyoe of product. 
At best, the definitions were no more than £:ener;dizations, and when 
they attermoted to rnalce specific distinctions, it vas found that they 
did not a-oply to large and vociferous ^^rouis of rnaamfacturers whose oper- 
ations overlanoed the boujidaries so pstnblisned. 

DISTHINCTIOLIS BZT'.TCZiif TE'2 "?.Z;GULAR " DZ.i:3S ILiPUS TPJ AIID 
T HE ;7ASH.Da ES3 IiraUSTI-g 

Some years ago the dividing lines between the Dress Industry and 
the Wash Dress Industry were more distinct than they are today. The 
Wash Dress Industry is eJi ou.t.^rowth of the production of cotton house 
wrappers or aprons whose function was oriraarily utilitarian. Style 
was of little importance in the sale of these garments. Their simple 
construction and their freedom from the risks of style obsolescence 
permitted standardization, volume production methods, axid the spreading 
of production schedules over relatively long seasons, and made it un- 
necessary to employ skilled labor in thpir -:)roduction. Manufacturers 
were therefore able to take advantage of the lower operating costs 
to be obtained in the smaller towns and villages throughout the country. 
The result was that the '.7ash Dress Industry, from its earliest days, 
has been decentralized, and as a correlary result there has been very 
little uiiionization of its rae;nbershi;o. 

The Dress Industry, on the other hand, is heavily concentrated in 
and around llew York City, and the great majority of its members are in 
contractual relations with the International Ladies G-arment Vforkers 
Union. The Dress Code Authority estinated that in 1C34 over r:?-,) of the 
dollar voliuae of the Industry was "Droduced in Hew York. (*) Comparable 
data for IC'54 is not obtainable on the VJash Dress Industry, but it is 
reported that in 1S35, establi aliment ■.; of this Industry "ere located in 
39 states, and that only 3.. of the -production originated in Hew York.(**) 
There was little or no competition between the early products of the 
'Jash Dress Indxistry and the more highly styled gp.rments produced by the 
"regular" Dress Industry. In recent years, hwever, the develo■^ment of 
style consciousness on the part of women throughout the country, through , 
improvements in transportation, moving -oictures, advertising, and the 
publication of fashion maga.zines, created a dem.and for a more highly 
developed tj~oe of house dress which was attractive as well a.s useful. 
House dresses "moved .out of the kitchen",- aJid, not only became acceptable 
as informal daytime costumes, but, also entered higher -:)rice ranges than 
had ap'olied to their m.ore sim~le predecessors. 

(*) N3A Division of Heview Evidence Study 'So. 9, "The Dress Manufactur- 
ing Industry", by U. A. Gill, Ju.ly, 1935, Table XV, v. 15. 

(**) Statistical Service ?3ureau. International Association of Garment 
Manufacturers, 

9714 



This development i/vas coincident vitli a grov/iug tendency in the 
"regular" Dress Inc'ustry tor:ard the volMrae prod-action of dresses in the 
lower -jrices ranges. The develo-xnent oi loi"-priced synthetic fabrics , 
and the revival of the fashion iraportpnce of cotton in the middle 
'twenties, tended to hrinf'; th.^ two Indu-jtries into closer competitive 
relationship. Co.a^etition for the consiuner's dollar grew not only 
between silk dresses and cotton dresses in the s-'ime price category, "but 
also between identical cotton, linen, or synthetic dress tynes produced 
by manufacturers in both industries. Hew tjoes of garments were 
develo-oed, -oarticularly in the s^^orts field, and special de-oartments 
v/ere established in retail stores for the distribution of cotton and 
linen dresses in the higher price brackets. 

Textile men and garment manufacturers will recall that the re- 
ap^oroacliment of the two Industries develo-oed in two converging movements. 
The elaboration of the wash dress antedated the introduction of the 
high-style cotton or linen frock. It is reported that as early as 1.911 
the Wash Dress Indi^stry h^d branched out into the -production of better- 
QUality garraents. (*) About 19j0, as a result of this development, 
converters of cotton goods began to -;)??y a great deal of attention to 
the styling, the ''^election of ;}attems and colors, for printed goods 
in the medixira and lower ^oriced ranges which had previously been considered 
more or less startle items with little style importance, such as the 
80. X ZO percales and the combined yarn rint cloths, pongees, and 
broadcloths. If rafraory serves, the first really high style cotton 
dresses 'were introduced abou-t 1G34. liiiss Ilary Levds, Vice-President of 
Best c: Co. , a department store in Hew York, launched a series of suc- 
cessful annual promotions of cotton dresses of imported shirtings, 
ginghams, "Liberty La.wns", and -Di-ues. These dresses retailed for as 
much as Ol9. $25, or $3S each. (**) Manufacturers promptly followed ' ■ 
up these promotions by developing a volxune business in cottons of the 
lov/er price ranges. In a very short time fashion had -run its usual 
downward course, and the $22.50 per do^en vdiolesale cotton dresses, 
(retailing for about i}2.95 each) were considered high priced in a large 
part of the Industry! Liairafacturers of "reg^alar" dresses, house dresses, * 
blouses, coats and siiits, and even aen's shi'x-ts, all entered into the 
•production of cotton dresses, and the dividing lines between the differ- 
ent groups became m.ore and more nebulous. 

When it is said, therefore, that the -products of the "-regular" 
Dress Industry are normally made of silk, and the products of the Wash 
Dress Indust-ry of cotton or linen, that the former are i-n generally 
higher price ranges than the latter, that "regular dresses are usually 
made by the dresmalcer or unit method, whereas wash dresses are made by 
the section work method, (whereby the various sewing operations are 
divided among a 'niunber of workers), and that the two types are generally 
sold in different departments of retail stores, these generalizations are 
correct in the broadest sense only, and must be oualified in a large 
number of s-pecific instances. 

(*) Transcript of Heating, Cotton Garment Code, Axi.gust ,], 1335, 

Testimony of 'ife. J. Schminjce, t.' 466. 
(**) IJo opportunity has been a.fforded to check the author's recollections 

of the develo-oments of this period, but they are believed to be 

accurate. 



APPRAISAL O F DEVaLOPLiZ iri'S UIID22 IIRA 

A full chronoli/:ica.l a.ccount of the attenpts to distinf'];,-u.ish oetween 
the two Industries hy definition, and failing that, to establish 
principles, machinery, and technioue throuf:,h vhich enuitable adjustments 
might be made by exemption and administrative order, together with a 
comr)ilation of records hearing u^on the suoject, are included in the 
History of the Dress Code. (*) 

llo particu.lar lourpose is served by re-:>eatin2 here the fruitless 
moves and contermoves that were 'aade, or the detailed ar.'juments of the 
opposing groups. It is more in-oortant that the issues involved be 
viewed in the light of broad -perspective, to the end that the 
experience may provide the foundation for s, more workable 'olan, if 
at any time in the future the regulation of industry/' is again attem-oted 
through federal law administered by a federal agency. 



(*) See "History of the Code of Fair Com-o-^tition for the Dress 
Manufacturing Industry", by Walter A. Simon, "op. 52-59, and 
its Supplfiaental Ap::)endix, a Compilation of Records Concerning 
the Controversy between the Dress and the Cotton Garment Codes. 

9714 



-98- 



The Princinle of Product and Price Line Definitions . 
As indicated atove, the first efforts to differentiate Tsetrreen the trro 
Industries 'bj'- definition res\\lted in complete failure, in the sense that 
no formula could, "be devised, that did nore than state the very general 
characteristics of garment types riroduced,, Tfash dresses and sill: dresses 
could he separated hy definition, hut not their manufacturers. 

On the assTxiptipn that the actu?J zc^.e of overlai^ning r/as con- 
fined, to comparatively narrow limits above and helow certain "orice ranges, 
the next efforts '-'ere directed at determining the location of the line or 
area of least conflict in terns of price. After classifying a number of 
raanufo.cturerR under the Cotton Garment Code, and loroviding that they be 
permitted to manufs.cture dresses of chief content cotton or linen xm to 
$45 per dozen wholesale, and after a long oeriod of continuous discussion 
in hearings and conferences, the tro codes rere finally amended, estab- 
lishing the dividing line at 522.50 per dozen v.'holesale. The problem 
v;as by no -lea^ns settled by these amendxients, however, and the rema,ining 
history of the controversy is one of repeated unsuccessful attempts to 
establish a basis upon which exemptions coiiJLd be .p:ranted. to those manu- 
fact'orers for whom undue hardship had been crep.ted "oy the amended code 
definitions and by previous exemptions granted. 

Exem'otion . Sy the nature of the situation, exemptions usually 
took the form of -oermits to manufacture dresses under Cotton G-arment 
wage provisions, in r)rice ran^:es higher than the "^22.50 line established 
by code definitions, and therefore represented an encroachment upon 
Dress Code territory, and raised immediate protests, both from the Dress 
Cod.e Authority and from individual na.nufacturers in either Industr3'- who 
believed themselves equally eligible for exemption. 

One of the difficulties was the lack of statistical information 
which coi'-ld be considered either comiDrehe-^.si-re or reliable on the types 
of garments and -orice ranges produced throughout both Industries. The 
zone of least conflict wa,s never satisfactorily cetermined. Even if 
complete da.ta had. been available, however, it is doubtful if any price- 
line distinction ?rould haive gone unchallenged, cue to the fear that large 
groups of -manufacturers who pf^rhups had not ^ireviouslj'- operated in certain 
price ran-^es would change their price status, or in any case, that indi- 
viduals in either grour? would be discriminated aegainst. If the dividing 
line had been set at, say, S15.75 per dozen, perha-os the majority of the 
Dress Industry might have been satisfied, but the Hash Dress Industry 
would naturally hrve lorotested even more loudly than they did at the 
$22.50 boundary. A division at f^.45 would -lerel^^ have reversed the po- 
sitions of the contending factions. 

The rational Recovery Administration wrs in the uninviable 
position of having endorsed, by the original acceptance of codes, a 
fundamentally unsound basis of distinction between overlapping industries. 
Its subsequent efforts at compromise took the unfortunate but more or 
less inescapable form of grasping first ->ne and then the other horn of the 
dilemma. 

The Theory of Wei-^hted Avera."es . As an academic thesis, it is 
entirely reasonable to visualize a successful method of adjustment ^oy 



means of uei-lited avrra,-c v;a;i-e scales by \.'hicli the sclirdule paid in each 
shop would depend upon the proportions of production represented by 
different price ranges or other factors. The principle of the weighted 
average was applied ^successfully, in fact, in a nTnaber of individual 
e::eiir^tions, with the a:.proval of the Dress Code Authority. Su.ch a 
princi-ole, however, presuppo^ies an indtis try-wide Icnowledge of cost account- 
ing which docs not exist. To a manufacturer vdiose costing system is in 
any sense accurate, it is a simple niatter to allocate labor costs to the 
different grades of his product. If 40,j of his production is of a 
qua,lity upon which he must pay QQ(f: per hour for operators, and 60)^ is 
in a lower grade that reouires only 35^. per hour, his weighted average 
is 53^ per hour, and he iDays all his operators on this basis; but in 
figuring costs, he lino-.;s"that he can charge 80^^ and AO^ respectively for 
operating on his tv/o types of production v.dthout losing money. 

The unfort-unate lack of even elementary understanding of costing 
practice which exists in large sections of the apparel industries makes 
it improbable that even a simple forniula siich as has been described could 
be used in general practice. The majiuf acturcr who figures costs and prices 
on the v;all of his shop or an old scraps of wrapping paper, is totally 
incapable of understanding the allocation of labor costs on different levels 
in accordance with grades of product. In the above example, if he paid 
his operators 53^ per hour, he would feel that the cost of his lower grade 
line would have to be calculated at b^xf: for operating, and that he was 
placed at a competitive disadvantage as compared to a mantif acturer whose 
total production was in the lower grade, and vfho paid his operators a flat 
35^ per hour. Or even if he may understand the principals of costing, he 
balks at the possible expense and coirplication of maintaining additional 
books of account. 

It is possible of course tliat the picture of ignorance of costing 
theory and practice nra-y have been somevrhat overdrawn, for the purpose of 
obtaining the benefits of the simple basic minirapm v/agc of the Cotton 
Garment Code, and that if th: %tional Recovery Administration had adopted 
the principle of v/cighted averages in the beginning, and had insisted 
upon adherence to this ■^rinciple, it might have been more easily applied 
than was apparent, and the really ignorant members of industry might have 
been educated in the elements of cost accounting through necessity. The 
decentrallized nature of the Wash Dress Industry, however, and the diffi- 
culties which would have been caused by attempting to enforce a principle 
to which a large part of the Industry was ajitagonistic because of lack 
of understanding or other reasons, would hcive added complications to an 
alreadj'' complex administrative problem. 

Proposed Inclusion of Both Industries Under One Code . 

In the letter of transmittal, dated Hovember 7, 1933, from G-eneral 
Hugh S. Johnson, Administi-ator, to the President, and accompanying the 
proposed code for the Cotton Ga^^ment Industry, appears the following 
statement bearing upon the already recognized conflict bctv/een the Dress 
and the Cotton Garment Codes: (*) 



(*) Approved Code ilo . 113, Cotton Garment Industry, Heprint, Including 
'^j'oendment s 1 to 8, inclusive, p. 81 



"This difficulty will have to "be dealt with later ■by- 
putting all dresses under the saiac code with appro- 
priate wage differentials covering the manufacture 
of wash drosses which r equires less skill than does 
the manufact'arc of inorc dressy dresses." 

This suggestion continued to he advanced f rou t ime to time throiighout the 
code period. While a certain amo-unt of simplification of administrative 
treatment might he accomplished through the inclusion of both Industries 
ut:der one code, it is doubtful if the traditional and inherent diversity 
of interest between the unionized, metropolitan Dress Industry, and the 
non-union, dccentrallized V'ash Dress Industry, would be conducive to the 
smooth functioning of a central code authority. Such an arrangement 
v/ould do no more than to place the conflicting elements under the same 
roof, and nothing would be accornplished toward solution of the fundamental 
difficulty of differentiating equitably between the wage rates paid for the 
production of different types of garments iinder different conditions and 
in different parts of the counti-y. 

l/Vhile many codes contained area, craft, and price^line differentials . 
the unending strife tliat arose over these differentials bears v/itness to 
the fact that they were seldom if ever based upon absolutely sound con- 
siderations, Ifhere they were apparently successf-iol, in the sense that 
little protest was heard, any nui-iber of reasons could be advanced in 
explanation other than that they were dnfallably accurate. The state of 
organization of certain groups, their sirie, location, and the oco-nomic 
pressures under which they operated, may have prevented orgEUiized 
opposition to differentials in many instances. To have placed the 
Dress and the Wash Dress Industries under one code, retaining anything 
lil:c the Y/age schedtiles of the two Industries, would have merely 
changed the name of the battle-field, and created another intra-code 
civil war between union and non-union, iTew York and eut-of-town, high 
wage and low nagc forces. To those ¥/ho .had any part in the administration 
of either code, it is only too evidej.t that the clash of interests and 
the emotional intensity ef the controversy would have prevented any sort 
of effective industrial self-government throu,gh an amalgamated code 
authority. It is a mild simile to compare the situation to the imr- 
possibility of mixing oil and water. A more explosive comparison, such 
as gunpowder and fire, would be more accurate. 

Conclusion, - Solutio n v ia Ba.s i c, Uniform Standards . 

The National Industrial Recovery Act was an emergency Act. While its 
basic principles, and much of its specific content had their roots in 
earlier developments of thought and practice, its exact form was de- 
termined by existing circuiastanccs, and it was largely a venture into 
territory that had had only theoretical cxi-)loration. As previously 
indicated, it appeared desirable tlrnt tiic wishes of industry should 
be respected as to n'vt only the areas to be covered by the codes, but also 
so far as possible, asto the ^Y?g of wage structure to be established 
■under each code, it could not be foreseen that this entirely reasonable 
aoproach t' codification would have the unfortunate result of creating 
a hopeless tangle of overlappin:;, qua.rreling divisions of industry, 
or that practical administrative measures would fail to effect adjust- 
ments of such overlapping situations as might arise. 



IToTfi ho'-'ever, Ditter erperiencs has "Deen gained. It is possible to 
look back u-oon the coc.e oxn^riGncG analytical?Ly and objectively, and to 
weigh in the balance the theoretic-l value of the principles and 
policies which governed the structxire and procedure of IfflA, against the 
convincingly denoastrated 'orr.ctical disadvantages caused by certain of 
these principles and -"olicies. In a reraodelled ret for industry regula- 
tion there would be, or shoxild be, changes-. The exact nature of these 
changes would again depend upon existing circojnstances snd the -orevail- 
ing attitudes of ind\istry, labor, and the govern;aent , but it is incon- 
ceivable thrt past experience should be disregarded, and that specifi- 
cally, the overlapTDing oroblem should again be permfitted to foment 
strife of such intensity that the success of the general -Drogram would 
be endangered. 

As p, -Dractical raatter it would seem thrt the basic necessary 
modification of riolicy involves cnanged concent ions of, first, the scope 
and extent to which federal law may operate in the regulation of industry 
without introducing conolications inimicable to effective administration; 
and, second, the role to be pl-ayed by and the authority delegated to 
industry in the formulation and administration of the provisions of the 
law. 

The policy of protecting -'age r-'tes above the minimum by means of 
elaborately classified wage schedules in one segment of the industry, 
and of coincidenta.lly recognizing the low-wage sta,tus of a competitive 
industry group by adopting a simple basic minimuiii wage, and the policy 
of segregating the two groups on the indefinite oasis of self-determina- 
tion, trade associa.tion orgajiization, and entirely ina.dequate product 
distinctions, have proven unworkable. If a, recurrence of the unhappy 
experience of overlapping codes is to be avoided in future, these 
policies must be modified, even at the expense of aba^ndoning some of 
the potential gains, find of restricting the objectives of regulation 
to a limited but attainaole r.rea. 

It is recognized tha.t a proposal to adopt simple, uniform wage and 
hour provisions for broad divisions of industry such as the needle 
trades, would be opposed by those elements whose established wages are 
high and hours low, or at least such a proposal would have been 
strenuously opposed "ondar 1TRA» There have been evidences in recent 
months, however, tha.t sunport of the simple basic wage and hour principle 
would now be found in unexpected quarters. The author has heard direct- 
ly and at second hand from certain influential individuals that a chajige 
of attitiide has taicen place, (*) 

The administrative advajit-iges of such a simplified program are oovious. 
In the first place, there would be no necessity for attempting to draw 
narrow distinctions between allied industry groups. Broad group definitions 
might not eliminate all conflict between the needle trades and the knitting 
trades, for exanple, but even in that instance, if the basic wage and hour 
requirements were the sane, there would oe only minor Questions of jurisdiction 

(*) The confident inl nature of these ex-oressions, and the possibility 
that future circumstances might necessitate reversals of official 
attitudes, makes it impossible to state their origin, 

9714 



to be settled. " So ff^r as wpges r'nd hours rre concerned, in fact, there 
would be no need for codes or code ,-uthorities, except to the extent that 
the code authorities might act as statistical and compliance agencies. 
As to compliance, there is good reason to question the desirability of 
again delegating police and judicial powers to industry, in view of the 
potentialities or actualities of abuse wnen these powers are placed in 
the hands of individuals or groups who by the force of circumstance 
crnnot be considered impartial in their attitude toward other individuals 
or groups. Such functions as might be added to those performed by the 
federal agency charged with administration of the law, would be counter- 
balanced by practically eliminating the heavy load carried by the National 
Recovery Administration in handling exemptions, overlapi^ing problems, and 
controversies over differentials. It is no exaggeration to say that if 
these three tasks had been eliminated, the work of the Deputy's office 
in the Apparel Section would have been reduced by three-quarters, perhaps 
by nine-tenths, with a consequent reduction in personnel required, and 
that opportunity would have been afforded for other and perhaps more con- 
structive work. 

It is by no means a proven hypothesis, moreover, t?iat the result of 
such a sim.plified program would inevitably be a net reduction in wages 
and purcha.sing power, or that it i"Ould create unfair competition. It is 
at least tenable, on reasonable grounds, to assert that in general, 
classified craft wages would continue to be protected by the unions, and 
further, that there is a somewh£:t automatic check on minimum v.'ages 
becoming the maximum, in the necessity for. maintaining productivity in 
each plant. If a manufacturer fails to recognize this necessity and makes 
no provision for regarding the productivity of individual workers by 
piece rates, task and bonus, or other device, his production falls, his 
unit costs rise, and he is placed at a disadvantage in comparison to his 
competitors, of course, there will always be exceptions, but some evidence 
of the way this works is indicated by the data on Wash Dress Industry wages 
under the code, when the miniratim of about 34.7(jf per hour, (un-weighted 
average between 36.1* in the North and 33.3^ in the South, resulted in an 
average v/age of 41.2i;z5 per hour. (*) 

The factor of productivity also has a general equalizing effect upon 
unit costs of similar competitive garments produced in metropolitan, union- 
ized shops at higher wages and in out-of-town, non-union shops at lower 
wages. In so far as the two wage levels represent the productive abilities 
of two classes of workers, and there is abimdant evidence to indicate that 
metropolitan workers are more productive than workers in the less thickly 
populated areas, the labor costs of garmients produced by both classes 
of workers will tend to be equal. Naturally, this does not mean that 
any particular area differentials apply uniformly and equitably to all 
establishments in either area, but it implies that in terms of com- 
petitive costs, assuming a basic minim\am wage except where 'union 
agreements have created higher wages, the differentials so estab- 
lished are in some measure diminished by the unit production per worker 
in the different r,reas. In any event, it is doubtful if the unfair 



-lOC- 

cornpetition resiilting from such instar.ces of dis-ororortionate differentials 
as might exist would cause as much dania-;e to the morale of the industries 
and to their respect and confiuence in the federal program as was caused 
by the overlappin.5 sitiiation as it e::isted under IIEA; and some measure 
of protection against the worst t;/-oe of sweat-shop cora[3etition would 
certainly be gained. 

The importance of having the approval, support, and confidence of 
industry can hardly be over-stressed, as no law is effective v/ithout 
the essential element of public acceptance. 

In plotting a future course, the potential gains and losses must 
be weighed-^. Perha,ps it is a compromise; perhaps it is a choice of 
evils; but' as between following a forLiula whose weaknesses are known 
through past experience, and adopting a policy which may reasonably 
be ex-oected to yield substantial benefits, and which at the sane time 
is obviously far more workable in practical application, there v/onld 
seem to be no Question as to v^hich course should be followed. 



9714 



-104- 



DELZG-ATIOi" 0? PO''. 



FART G 
^.R UlT'E-^. THE COAT llfS SUIT CODE 



■105- 



DSLZGATIO:" or ?0V. 3?. J.Diir. TIS COAT AIT. SUIT CODE 
THE :q S Ti\BLISin:]D A CE'TCI 'S Oj - S-iILT-C ^v '^HTlE'/T IT TfIS 

•70};Ei''s APPAa:;:! ik'usTiY 

C-GOff:ra-,-ihi c Concent -at -. on ■ In ccvt^iv b•^-p.clK-•^ of the -omen's cv- 
parel indu^tr-' p iii'^li.!" develj-oe': f.^nn of ;-.-.lf- :o''.jrn:n-:'nt ii.fd "oL-cn in 
existence for man-'- -^oers ^rior to tlie :idvcnt of tii„ Tf-.tionrl Recovery Ad- 
ministration. Due to the heaAn- concentration of tiie m.-jor c'ivisions of 
the indupti--'- in the ■"ev,- York : Jetropolitf ii Area, and to the f-ct thrt or- 
ganizrtion is nore readily effected in concentrnted oroouction ar;£.s, 
the structure established for ret^lotion thro-a2':i collective agreements 
betrreen the diffe::-ent chartered 5u.bdi visions of the Intti-national Ladies 
Garment T/orkers Unioi: and the trace associations renresentin^^ various 
employer groups, is Icr^^el^r, though not entirely, confined geographically 
to the area in and immodiatel^r surrounding -t-er- York City 

Hechanism of the Established Agencies . Collective agreements betreen 
organized elements are administered by rn elaoorrte mechanism, including 
impartial machinery?- for the exercise of the judicial fu.nction in the ad- 
justment of intra-ir.chntr-' cif-f^ :renccs, and afield force of investiga- 
tors, organisers, st.-.:ti ^:ticians, rnd adjastors, 'ho perform the functions 
of enforcin- corn jli.">nce '"ith the orovisiois of the agreements, and of 
strengtnenii.g and e:: xm-'Tin - the or?,ni?;ation . Infrrctions of the -arovi- 
sions of collective " ;■■., ..r-iorjts ore puni shoble o',' penalties in the shape 
of fines, rismis'^els, or ^us-oonsio v.-,, provided in the by-lans of the union 
and the ps'ocirtion, pnd by the ddrect action of stri :es rnd lock-outs. 

Tlie Principle of SolidFrit^'^ - The United ?ront . The imoerlying 
;orinciole uoon r.ii.cn ta^ effectiveness of this mpchinsr^^ c'epends is that 
of solidr.rit-'-. If the ncjorit-^ of industrial unit'^' are parties to collec- 
tive pgreenents "r^.acli irr-ose re pf^ictive orovisions -ith respect to labor 
conditions and other cjerexting fpctors, a minority of non-conformists 
naturally constitutes a threct p -; iret the aiccessfue reolization of the 
majority "ororrrm. Th.e orinci'ile of eni united front against outsiders is 
therefore oponl-- recognized. Interlocking -orovisions in collective agree- 
ments bet Tetn rel: ted elements of industr;-, recaire exclusive or prefer- 
ential treatment b^' erch grotip of the rnemoors of the other signptor-r 
groups. In this manner, ; Manufacturers and jobbers agree to deal onlv v/ith 
contractors ern->lo'''i:':.s' ur,ion l"bo'^, contr ctor<" agree to accerit 'jork only 
from B'.anrefa.cturer'- or jobbers '"ho pre in contractual relationships ^'ith 
the union, ar.d the -anion agrexjs -chat its members shall be permitted to 
rork only for those concerns \/ho s-re recognized member"^ in good standing 
of the various em-'-^loyers' associations. The comrion objective of a.ll ele- 
ments is to extend the bo-andaries of organization as ^^ar as -possible, 
so txirt a minim.-am of competitive disadvantages vill be experienced by 
those '.Yho are operating -under the collective agreements. 

As has been notec in another oart of this stud"', the coat and suit 
industrv is the oldest branch of the --'omen s apparel industr;^, and pro- 
vides an example of the type of organization described aoove in fully de- 
veloped form. 

9714 



TH3 "jQailirG- PARTi:2:iSHI? TZTJl^J^ IvLl Al~) W~. ^STa3LISHEE AgsrciEs 

Sections 4 (a) end 7 (Tj) of tlie x:IjIA . The National Industrial Re- 
covary Act jrovided an altcrnEtive procedure to that of codifica.tion, 
uhich, ho:7ever, ^-^an seldom aclo-oted. Section 4 (a) of Title I stated 
that : 

"The President is authorizec" to enter into agreement p uith, 
and to approve volijintery agreements het'^een and among:, per- 
sons engaged in a trade or industry, laoor organizrtions, 
and trade or industrial organizations, associations, or groups, 
relating to an:,'- trade or industry, if in his judgment such 
agreem.ents '"11" aid in effecttiating the policy of this 
Title* * *". 

Section 7 (b) of Title I provided that: 

"The President phall, so fr.r r;.s ■Dractica.hle, afford every op- 
porturity to er/ol^yers and em-plo^'ees* * * to establish by mu- 
tu^.l agreement, tae st-^.noa-'ds rs to the ma:^iraum hours of labor, 
minimum rates of pa^^, and sucn other conditions of emplojnnent 
as ma^' be necessar-- * * * to effectuate the policy of this 
Title; and the strndr^rds estaolished in such agreement, rmen 
a-p-:-rov9d b^'- tae President, diall have the same effect as a code 
of fair competition* * *". 

If t'.e coat and suit industr-,^ had so derired, the e::i sting collec- 
tive agreements of the industr^'-, or the labor sections thereof, might 
have been ruomitted for a^'^'orovpl instead of the code. There is no evi- 
dence, hoATcve'", thpt this '"e.'^ either pro'oosec' or given serious considera- 
tion during the period in v'lich tho coa.t and suit code '"as being drafted, 
or at atty timtj thereafter. The roaTOns for this are obvious. Codes and 
collectivj agreements naturall''' differed in certain res"oects as to con- 
tent. Certain provisions in the trade Dractice field, for example, might 
appl3'' to a cods, but '-'ould hrve no pl.-ce in a collective agreement be- 
tween contractors and the ujiion. On the other hand, col''.ective agreements 
contained s.fininistrcotive and penalty provisions applica.ble to the mechanism 
and practices of the esta.blished agencies, \'hich naturall"'' differed from 
the administrative and penalty orovisions of codes. It may also have 
been felt that the code v.'as a more direct inst-noment, with greater author- 
ity, or greater semblance of authorit';^, and vdth o. greater chance of be- 
ing suToported in the courts than an approved la.bor contract, the provi- 
sions of vhich might be challenged on the basis of their origin in one 
group only, oven thou-h it "as the majorit'"' group of the Industrv. In 
any case, and for ■■Jiatever reasons, it a'ooeaxed more desirable tha.t re- 
gulation be effecttid t;,'.rough a code than through the alternative method 
of an a/Dproved a.gi-eemept. The significance of Sections 4 (a) c^ni 7 (b) 
of the Act li'es in the implication that the type of regula.tion to be 
ado-oted might be bared, vhere iDrf.ctica-ble, a::iOn previously established 
forms of inclnstr^r co:-.t- ol as contained in existing collective agreements. 

S:'/Tchroriiz5.tion of Agreements ggid Code . Lioreover, it "a'^ entirely 
logical, ■oractical, axir apparent^'- desirable, that the codes and the col- 
lective a.'^-reements be rvnchronized, so far as pos'-ible, in order that 



diralication of e:^fo-.-'t night lie n,voided, and that tlie erzistin;'^ ae^encies 
of the industrv rnivht su-oDlernent t'le -ore of the nationrl coae authorities. 
In several brancaes of the ao>r;rel tr. r es, tlierefore, aid oarticularl^/ in 
the coat anc suit brrnch, rot only '-ere a Irr^-e niuiiber of identical pro- 
visions adopted in cooes ''iid oolleci-.ivu p,;r;j^me:zt^ , but also much of the 
administrative rnd juoicial n^.c-iinciy of the er/trbli shoo p'-encies \7as in- 
corporated bodilv into the rtv.cture of tur code "iithorit"^, retaining its 
identit:/ only to the e::t£nt nece^.sarv to -)<.,rnit ; ctio,-. to be taken either 
uncer the codes or the collsciive ag-raemeirbs as night be determinjd by 
circumstrnces in each instrnci. The inpei^tial Ghrirmnnphip mrchirtery 
of the coat and suit industry becrme the pc'-justme-t ni-enc-^ of the' code 
puthorit",''. The Union nnd the as'^-ociations maintained olieir o'"'n field 
forces, sncl the coc^e r-ithorit"- sent out it'^. ovin corps of investigators 
to supplement their vorl:. Co'iplaints nnd cha?.-ges of violations rere re- 
ferrec" sometimes to the code authority anr sometimes to the industry or- 
gcinizrtions, depending uoon the nature of the violation anc" the type of 
disciplina-r:'- action or further investi.ration rtiich seemed to fit each 
particular case. It is no exaf:gc;rabion to sa"^ that v?ithovit the assistance 
of the established agencies, the code autnorities voulci have faced an 
over-helming ta.sh in rttem-oting to obtain compliance, rnd conversely the 
code authorities fulfilled the nccersa,r-'- function of extending the area-s 
of control be^'-cnd the boundaries establishecT by collective agreements. 

The v;ori'ing orrtnership thus established proved decidedly effective, 
but it, had msavr comoli cot ions. 

PROBLEMS OF TliE WOMCILG FARTrsaSHI? 

Dominance of the New York Element . Under many of the apparel codes, 
the code authorities rere shar^l-r divided into t'.7o antagonistic groups, 
reioresenting the he^j York and the out-of-to'r/n elements. The concentra- 
tion of the major branches of the apparel trades in the i«eu York area 
had the general effect of giving the I'ex! York groij.ps preponderant majori- 
ties of re-oresentatives on the core authorities, es no otner division 
would have provided "true representation". The conflict of interests 
between the Va^-' York and tue out-of-town groups was the natural result 
of the efforts of the loiiionized element to organize the non-union ele- 
ment, or at least to re'^uce coi-aoetitive pressures by raising labor 
standards in unorganized shops to levels approaoChing the levels established 
b""'- collective agreements. 

In man^- cases manufrcturers hrd left I'ew York to escaoe the control 
of t.ie Union. Others had estr?l:lir.her] and built .uo their businesses in 
communities where re;gulation wa,s un'rnown and lanwanteci. In such an atinos- 
phere interference was resented and resisted. Even if an individual 
manufacturer might understand and. a.porove of the i-RA. prGgrrjn, and be wil- 
ling- to cooperate with the federal government in the observance of code 
standards, he might not be so ^'illing to work ^7ith the representatives of 
a ivew York code a,uthorit--, vrhoce motives he distimsted, because of his 
conviction that the dominance of the he^' YorJc element on the code author- 
ity^ constituted in itself a barrier to imp; rtiality. 

■ The Penalities of Efficiency . Resistr'nce and resentment \'ere strongest 
in those industries whose code authorities were most efficient in their at- 
tempts to enforce the cod.es. Ag-'ressive a.ction broiv^ht a.ggressive orjioosi- 
9714 



-108- 



tion. The i^Tertei- thi ef fee civenesr of t.ie comolir.nce co,nToai.gn, the more 
difficulties encoiuntered. The ver^'- succe f of the coat and suit code ad- 
mini Ft rr tion throug'i it'^ coda authorit"- '"ap reppo-isible in no snail mea- 
s^ire for the lar.-^-e nunofcr of com-ulaints re-istered against it. 

T he Partisan AtrrosT'here of Code Autnoi-itv .■-leo.rin.TS . The traditional 
attitude of the organised elements of the rpoarel industi-"'' toward recal- 
cit"ranbs is not conducive to cs^'ru, orderly procedure. The "chiseler" is 
considered an outla''' and a raena'^e to the Irdustr/ as a v'hole. This atti- 
tude, together \7itn tan emotion,- 1 Intensity vdiich charr cterizes much of 
the procedvire on coi;trover?ial*MFtter_- in the apparel industr:y, combined 
to create an atmosphere in code r.uthority compliance herrin.'xs 'vhich nas 
far from that vhich is exi^ected of an imprrtial, judicial hearing. Even 
in comparatively nell-corjcucted hearin^;s, '.^here the presicing officer '"■as 
a paid official r'ho conscientiousl'- attempted to maintain a semblance of 
order, the atmosphere i.'rs often neither calm nor orderly. It is not 
hard to -understand horv pn out-of-tovn res-^ondent, after one e>roerience, 
might hav:2 misgivings as to the impartiality vith v,'hich such a court would 
treat his case. 

The G-orillas . Pinally, the intensity of the 'Warfare bet^^een the or- 
ganized and unorganized elements of the Industry.' hras led to the use of 
drastic discinlinarj'- and persimsive methods. Vhen negotiations fail, 
force is applied. Strikes and lockouts are of course the major veapons 
of the contending organizec groiros, and these stoppages are often marked 
by violence. Ko:^ is the violence merely a matter of clashes betneen ror- 
kers who are on strike and vcrkors r/ho are not. The iise of hired strong- 
a.rm men as strike-breakers, pickets, and "organizers" is an est£.blished 
custom, even though it ma^" not be o-fficially recognized. Sven in times 
of general industrial oeace, the under^'orld is called upon to supply per- 
suasive and disci"olin-'T"v action bv violence and threats of violence. The 
racketeers are iised r,ot onlv to bring ijin',7ill:,.ng manxifacturers into line, 
but also for "protection-! " agninst Union interf ere-nce and other real or 
threat ened d i f f i cult i 9 s . 

The methods of the gun-men rnd "gorillas" include intimidation of 
man'ofacturers and enolo^-ees, the thro^-'ing o -f "stink bombs", rrhich permeate 
merchandise, furs, ro'id thr- furnisningr. of sales rooms and factories ^dth 
an ineraoica-ble and decidedl ' unpleasant odor, the prevention o" trans- 
portation, end destruction of goods in trcnsit, and personal violence of 
all sorts from brass k3™.ckles and acid throning to dynamite. 

No aathortic data is av,-?il?ule on the extent of the alliance nith the 
■underworld. Of cotirse it is officially disavor?ed, and the res'oonsible 
officials of the as -ociation;; and the Union a.re probablv subject to much 
embarrassment and unjust criticism for the acts of irres-^^-^onsible sub- 
ordinates; but no informed ooserver can deir-r its existence, and the im- 
plication of organization responsibility is inescapaole so long as vio- 
lence and intimida.tion are used in the a.cco"rolishmont of organization ob- 
jectives. 

The Im-plication of the luisuse of Fono i'. Then a manufactarer T?as in 
trouble v'ith the Union for violation of the :7age or hour provisions of a 
collective a-reement, the chances i.-ere that he r,'as also -J n tro-able ''dth 



the code ai-thorii-^' -f'or the sn.m ofe.ire. At t'le srne ti le jerlia-os ne 
ras markec b"^' the Unior! ex\c c. trEcle ar-sociation a- a pros-^ect y'or member- 
ship. He mir^ht be visitec o^- ■hiior. ir.vesti'^atorp in the noming, b-;- the 
reorescntatiTes of th'3 tr.-ac'e r r- ■ociation at roo", and b" code authority 
agents in the pSterncxr . If ^'iol-tioBs '--cro loi-'.coverer", or if he refused 
to coo-oerate, •oo-'i^iros he •■ould receive a ::otice of viola.tioE and summons 
to a hearing- fron. the cod: .■■■:ithnri'- - ^\: . --:' ^t -:t^ pr^r^ \^ short!"'- there- 
after he or his em-^lovccs -eve -..tt- •- ' -■ ' ' s/yfiec thu^v., the chain 
of circuinstances rrturall" tor\0.-.C to Lr '.''-- , -;i- : the code aithoritv, 
the -union, and the associations -ere .-ot onl- ..orkin^ to:^ether closely 
for the acco :nlisiuier.t of their co^iron oojec-iv3s, but also that all 
objectives v,'ere ccin.on, arid all activitio;: ori'i;ii'ated from the same gen- 
eral soxxTce. If in the course of 'Up i,e-;oti.:. tiers the -<, nifpcturer had 
to deal directlv \7ith the hi.gher officirls of the Union or of an associa- 
tion, he discovered that bhese officials "ere also members of the code 
authority. Under these circunscrnces, rec^rcle-^s of the foct that an 
irvesti.-ation mi.rht reveal that the coca ruthorit.v agonts end officials 
had conducted tnems:;lves entireV- ^^ithin the bounds of la'- end pro"oriet7, 
their vindication could :oot oe received -xr the co-nplainant as a jast 
settlement of th- c.:se. ?nr '^a^ mo-^o, \±.-i'---^ instrncss of extra-legal vio- 
lence or intinidatio.^ ':ev3 orou ;o,t to litTiit, the Hatiorsl "^ecover-^ Ad- 
ministration '..-as ;lpced in an emocrras'^ii- -; Dositio^^. of having to accept 
en irTOlied responsibilit"- for the illegrl rrr ino.efensible acts of its 
'"orliin.? "oa-'-tners or their subordin'^tes. 

Tin. ca\:::r:5 agai-'st t^iz coat aI'd suit cod:; .lu?}io":ijy 

The -greater -:art of the rto":'"' o.-f the charges against the Coat and 
Suit Co'"c- Aiithorit" is contrir.er in a con:iil:-.tion of doc-jjnents submitted 
to the Committee on Tin^nce of tlxe U. S. Senate, and included in the 
•orintec' trcnscri-)t of iroceedii-gs of tlie committee in its investigrtior, 

of the Uetional "lecovery Admlni straoioi;, cnrf^-.cted in A;oril, 1935. (*) 
In adcitio.: to tnis material, 'J 'y-. ITile^ cov,t--in ^:everal otlie- -'r/nerrl and 
s-oecific corrplrints, er.tracts of •■.ilea ar?- co-;tai-ed in the AiD^Dendix. (**) 
A brief resune of the sto?:"^- r-veale: o- th.e material submitted to the 
Senete Uinance CoifJiitter- folio- --: 

Uncei- date o " J-'one 23, 1934, r^n I'ncn--: ous letter "as directed to 
General Hugh S. Jolm^'on, U^Ji. Aoministr-' to-^% riilegin':, that certain con- 
cerns in IsTe' ■ Yor;:, through h-^ving formed a:", alliance "'ith ra.cketeers, had 
been able to obt-iin concessions, or to re.'u'.ain from p?-^ing union or code 
ranges to their emolo^rees, witn the r:sult that these concerns -Jere tuider- 
biddirg the market on certain t^m^es of -product. 

As a result of this complai'.t, special agents for the he- Tori: Re- 
gional Office of l"Rzl "e:-e a.ssigned to investigate the situation. Their 
investigc^tion soOi- developec! into an inouir- into all of the operations 
of the coat and suit code authori+-.", anc f^irther charges "ere made by 
these agents a.!Tainst the code authorit'^ becnase of evidence ^"hich ttss 
developer^. 

(*) See Investigation of the National Uecove-^^- ^K^jnini strati on. Hearings 
before the Committee on ?:njnce. United States Senate, 74th Congress, 
rirst Session, Pvirsuant to S. ?.es. 79. Port 6, t30. 2^20 to 2587, a.nd 
2591 to 259 7. 
(**) See Aroendix to Fart C, -r,. 13'J to 2.3G. Particulai' attention is called 
to the cortradictor^,^ affidavits of the co -olainant anc' tne code author- 
ity a-^;ents in the Colonial liicoie ca.se, po. 2t-2 to 258, hihibits 3 to 
" inc. This is oinl"" one of man-- such cases of directl"- conflicting 



The report of Special Ae:ent Aclcison Smith, coverin.^ the 'OGriod from 
Jul.y 25 to AUf^ust 15, 1934, is prefaced by the following statement: ( *) 

"Preliminary investi.-;-c tion ma(|e in tliis matter -Drior to in- 
term-otion by trip to St. Louis tond-^- to show that this code 
authority is entirely dominated oy the imion and Mr. Hathan 
TTolfe. That labels are being withheld from many jobbers and 
contractors without definitel-r e^tabli shing yiolations of the 
code. That labels a^e used in the place of stin': bombs to 
force mer. into as^^ociations and to unionize them. That un- 
less a contractor belon^-s to an o^ssociation, he is unsble to 
secure desipgnationr. Thet when yiol-tions of the hour and 
wages "oroyision a""e fc-and, an arbitrary amount must be paid, 
by the responcient whetner it be -fair or not before he can 
agoin do business. That these a'^bitran'' amounts can be 
changed and rer'ucec by joining the association. That when 
restitutioi: is mac'e j-"^ firms, there is no evidence of the 
workers evev securing back pay out there is considera.ble 
evidence tha.t tney do not. That gorilla methods are used in 
examining books and emplo-Aees of firr.is by code authority in- 
vestigators. That small firms a-^e actually put out of busi- 
ness at the -ill of certain members of the code p.uthorit-r. " 

Under date of October 25, 1934, Special Agent John 0. Howard submit- 
ted a report covering the period from August 15 to October 15, 1934, whicl: 
expresses the comclaint a,s follov/s: (**) 

"The complaint is tn.-.t the above-named associations, the 
union, and the code a.uthoritv is a monopoly in the restraint 
of trade in violation of the She^-man Act and of the rational 
Industrial Recover^,- Act, and is using this mono-oolistic power (l) 
to discriminate against small enterorises and noniuiion manu- 
facturers, jobbers, and contractors; (2) to coerce said em- 
ployers to join one of these associations by withholding la- 
bels, delay in furnishing labels, threats of strikes, and 
by strikes; (3) that emplovees are being forced to join the 
union to obtain \7ork; (4) that in some cases, the code author- 
it3" has com^iromised labor-violation cases by allowing em- 
oloyers to -)ay le^s than the labor violations assessed against 
them on condition that the maiuif:\cturer or jobber join the 
Industrial Council of Merchants' Association and the con- 
tractor join the Am.erican Association, and that all nonnnion 
help be unionised. 

"That tno code author! t"' does not re^oresent the inrlustr^^ ; s 
a whole, but t]\e '■'ominant a.ssociations in the inr'ustr;'-. Tha.t 
members of these a.ssociatiors receive preferential treatment 
in the adjustment of labor violations because of the major- 
ity representation of these association?- in the code authorit^^, 

(*) Senate Investigation T-an'-^crijt , p. 2523, loc. cU. note p. 

109 su-ora. 
(**) Senate Investigc tion Transcript, p. 2537, loc . cit . note p. 

109 Bu-ora. 



.111> 



and ■because nan^- corrrolrintP: a.^.-inst r?.'^sociation members a.re 
turned over to tha a sscciffcions c-.nC. tlis -cmion for adjustment. 

"The charsss, i^ t'-ue, corstit'ite not onl-r a violation of the 
rational Incusti'ia.l Recover/ Act but of the Shermrn antitrust 
Lav Act as v:e] 1. " 

The follovinc ir, ta!:en from the co.^-clusion and recomiiendations of 
the Hopard Report: (*) 

"The code authorit"- is enforcii:,?; -.ot the code, but a series 
of inter.loc^.cin-'^ contracts entered into oy the nanufacturers, 
jobberp, and contractors a.-?socia.tions and the iiTxion nith the 
follO'.'ing results; 

"The code authority has deniec; to manufacturers and jobbers 
the ri.;:ht to. choose tJieir ovn contractors and the ri^ht of 
contractors to choose their Jobberr and naniifacturers. 

"The cod.e authoritv has '-itliield the issuance of labels to 
coerce maji-'ofacturers, jobbers, and contractors to enter into 
contracts. Kanufacturers, ; jobbers, a^id eontrr-ctors in some 
instances have been ;out oiit of business. 

"l.ia-nufacturers, jobbers, anc, contractors not members of 
. .^these a.EsociatioEs. and not erniloi'in^ union labor have been 

coerced oy the code a.uthorit;;'- and the union into joining 
• the^e associations, and emolc-ees li'cevise have be^n coerced 

into joining the i,mion. 

"The e:-t.ent of the domination and -control of the union and 
the code a.uthority , ca.n best be realized from the fact tha,t 
man-- contractor-?, ha.ve been forced to employ ex-union em- 
TDloyees, and noT" raic'ceteirs, to torotect them, from the union. 

"In vie':-- of th3.a.bo-''e, it aor-ea-^s that the code authority- 
is not fairl-'- renresentative- o:'"" the industr,^. The members 
of the code av.tJioritj'- haye t-^ro interests: Dealing; impartially 
\7ith all members of the incustr^-; oroiiiotir.g the interests of 
these associations and looking aJTter the '"elfare of the members. 
This mahes it impossible for the code authority to ,=:ive the 
same fair consideratior. to ccmoTaints instituted against non- 
associo.tion and nonrjiion emolo-ers as is given to association 
and union em-^lovers. Tae method of electing t^ie code arathor- 
ity sho-alc", therefore, be chanrod and some method devised which 
v.'ill be tr-j-ly representative of the inc'Ustr^^, and not of the 
dominant associations Hiich control the indust^:^^. 

"The code a-athorit-^^ in enforcing the contrrcts between the 
associations .ino the ixnion, -.set ou.t in the erhibitp. in this case, 



(*) Senate Investigation Transcript, -qo. 2='i43, 2'549, loc. 

note p. 109 supra. 
9714 



-112- 

instead of the code of fair competition, is a combination in re- 
straint of trade, as prohitited by the Shernan Antitrust Act. 
This is another reason for the election of another code authority 
to take the place of the nresent one. The national Recovery Admi- 
nistration should not te in a ocsition of countenancing the viola- 
tion of the Sherman Act, which is the very cornersttinej of the na- 
tional Recovery Administration set-up and without which we would 
have a governnent of industry by force imposed either by capital 
or labor; in other words, fascism or communism, such as prevails 
in many of the cotmtries of Europe." 

On page 2545 of the printed transcript (the Howard He-oort ), ref e- 
is made to "Exhibit P 2'", a statement in affidavit form of Benjamin 
Seldin of the Seldr.n Cost Corapanj'-. This exhibit is omitted from the 
transcript of the Sr^naie Comnittee Hearings, and is therefore included 
in Appendix to Part C, for the dual pur-oose of completing the record 
and of providing a striking example of the type of cliarges which were 
made relative to the use of racketeers. (*\ 

A letter dated September 12, 1934, from Alex Thomson, Administra- 
tion Member, to Dean G-. Edwards, Denuty Administrator, Division Five, 
K.3.A., reports Mr. Thomson's first efforts to determine the accuracy 
of charges made against the Code and Suit Code Authority. ■ The following 
is quoted from Hr. Thomson's letter as indicating the impression created 
by his first visits to the Code Authority: (**) 

"In general, the position that Mr. Wolfe takes, and I may say it 
is the position held by all members of the Code Authority with 
whom I have ts-lked, is that in this matter, and in ell similar mat- 
ters relating to these violators or 'chiselers,' the Code is the 
law and the Code Authority proposes to enforce it 10'^4. They feel 
that they have the cooperation of the Administration in this. 
They further feel that nothing can swerve them from this determi- 
nation neither political pull, pressure from unions or associations, 
unofficial pressures from government agencies, nor threats of per- 
sonal violence. " 

A memorandum dated October 22, 1934, from Ivlr. Thomson to Deputy 
Edwards gives light on Mr. Thomson's subsequent deductions after fur- 
ther investigation of specific charges contained in the Howard Report. 
The following is quoted from this meraorandiom: (***\ 

"I do not, of my own knowledge, know much about the cases referred 
to above as they were under consideration before ray appointment 
to this code. I may say, ho".vever, that v/herever I have investiga- 
ted these, or similar esses, I have been unable to find that the 

(*) See Appendix to part C Exhibit A pages 124 to 159. 
(**) Senate Investigation Transcript, p. 258^, loc. cit. note page 
109 supra. 
(***) Senate Investigation Transcript, page 2581, loc. cit . note 
•beige 109 sunra. 



respondents have been able to suonort svich st^.tenents as are set 
forth in this rp-oort. 

"If you can take th^ ti^ns to read the minutes of the Lo-Rane 
Coat Co. hen.rin^-, held oerore Actin.^ State Director Anna M. Rosen- 
berg in New ■York City on October 11, 19o4 (vrhich I regard as a ty- 
pical case as fsr as my own ooservaticns go), you will, I thinlc, 
have a clear idea of how most of there accusations and stateinents 
disapi:5ear when subjected to an impartial hearing at which both • 
sides have the opnortiinity to present their case. 

"I am very willin,^; to go on rscord as holding that if the state- 
ments nade by the indivldaals nentionsd in Ivlr. Howard's report are 
true, chat the siboation corfronti'ng .the Coat and Suit Code Autho- 
rity is serious and that a further investigation should be made. 
This would, of coui'se, mean that the code authority should be in- 
formed of the charges at'^ainst thorn and also that they be given ade- 
quate time to prepare an answer to such charges. 

"I believe that in reading I;;r. Howard's report, you should note 
that it is essentially an indictment such 8.s a grand jury would 
hand down, In that it presents but one side of the case and I feel, 
therefore, that Mr. Howard is net entitled to draw any such con- 
clusions as he has made in ending his. report. " 

The following is quoted from a letter dated December 1, 1934, of 
Mr. Thomson's to 1.'. D. Vincent, Deo\;.ty Administrator: (*). 

"May I at this time call your attention to my report of September 
12, 1934,.. to Mr. Dean G-. Edv;ards, and my memorandum of October 22, 
1954, also addresoed to him, which are on file in your office. 
These commujiications, together with this letter cover I feel the 
situation I was asked to investigate in this code. 

"I believe that the members of the Coat and Suit Code Authority, 
as at present constituted, ara earnastly trying to do a very dif- 
ficalt job, and iu my op", nicn cucce(^3.ing to a very large extent. 
Without exception they are earnest, cap^^ble gentlemen which whom 
it h-.\s been a pleasure for me to associate. I have found nothing 
to indicate that their acts have been influenced by anything more 
than a determination to enforce the provisions of their code to 
the limit, which they felt was necessary for the good of the in- 
dustry. 

"May I say, as I have stated verbally to liajor G-itchell, that I 
believe it is wise that investigation into the claims of abuse of 
power in the past by tne code authority should cease at this 
tine." 

The data submitted to the Senate Finance Ccmmittee concludes with a 
statement made to Special Agent Addison Smith by certain officers of the 
Ellis Coat Company. This case involved a tie-up between the truckmen's 



(*) Senate Investigation Transcript, p. 2582, loc. cit. note p. I'^S 
supra . 



union and the International Ladies Garment TTorlcers Union, wherein the 
complainant's truckmen refused to deliver merchandise for him "because 
he was not associated with the International Ladies Garment Workers 
Union. (*). 

In transmitting the /naterial to the Senate Finance Committee, Mr. 
W. A. Harriman, IJ.S.A. Administrative Officer, had stated that the Com- 
mittee would not obtain an accurate insight into the situation unless 
Mr. M. D. Vincent, Acting Division Administrator, and formerly Deputy 
Administrator in charge of the coat and suit code, were given an oppor- 
tunity to present his entire experience in the administration of this 
code. As llr. Vincent's testimony before the Senate Finance Committee 
Was curtailed "before it was possilile for him to conraent upon the Ho- 
ward Report, and the coat Dnd. suit situa,tion in general, a memorandum 
was su"bsequently forwarded bv ivir. Harriman to the Senate Finance Com- 
mittee, outlining Mr. Vincent's attitude. In view of the importance 
of Mr. Vincent's conclusions on this matter, his memorandum to Mr. Har- 
riman is reproduced here in full: (**). 

"i.Ei,.OEA:iDTJi.: April 15, 1935. 

"To; W. A. Harriman, Administrative Officer 
"From: H. D. Vincent, Acting Division Administrator, 

Textile Division 
Subject: John C. Howard, report on Coat and Suit Code Authority. 

"There are perhaps but two points that call for a statement. 

"The first is the following finding by Mr. Howard: 

"'The code authority is enforcing not the code, but a series of in- 
terlocking contracts entered into by the manufacturers, jobbers and 
contractors associations, and the union with the following re- 
sults: ' 

"Obviously lir . Howard failed to obtain an understanding of the col- 
lective agreement between the manufacturers, jobbers, contractors, 
and the union. The agreement adopts the rirovisions of the code re- 
lating to hours, wages, etc. 

"It is sufficient to say that the code authority is not enforcing 
this agreement but when it enforces code provisions which have 
been adopted as nart of the agreement the latter is, in consequence, 
made effective. The code authority is, however, enforcing code 
T3rovisions and not the agreement. 

"The other finding in the reoort to which attention is directed 
is as follows: 

'"The extent of the domination and control of the uxiion and the code 
authority can best be realized from the fact that many contractors 

(*) Senate Investigation Transcriijt, pp. 2584 to 2587, loc . citT 
note p. 109 supra. 
(**) Senate Investigation Transcript, p. 2592, loc. cit . note 
page 1^9 supra. 



have 'b-jen forced to eunloy ex-uni'on employees, and now racketeers, 
to protect tliera from the \inion. ' 

"Strio-oed of needless ira-olications, Mr. Howard fiiids that some 
members of the indii-stry are em-olcving racketeers to resist code 
administration. This is the actual fact and the cede authority has 
resolutely refused to submit to such tactics. 

"ffollowing oaj-ment ins 'ec -ions of scmo of these resisting raera1>ers, 
the home of iir. ITotiian Wolf, code compliance director, was "bombed. 
Proof that this bombing was the work of racketeers, employed by 
resisting industry members, is not available but I believe the de- 
duction can be left to the facts and circumstances. 

"Attached is the first page of the Brooklyn Daily Eagle of August 
23, 1934, reporting Mr. iTolf ' s exoerience. Atta.ched also is the 
New York J^iornal of the same date containing an account of the 
bombing of Mr. ITolf's house. 

"This is a highljr organised a.nd very much stabilized industry. It 
has made gratifying progress in code administration. There is a 
small resisting minority. With something like 2,800 members, how- 
ever, the issuance of labels has been suspended in only 91 cases. 
In most instances the noncompliance consisted in under-payment of 
wages or violations of both wage and hour oro visions of the code. 

"The code authority has been exceotionally successful in maintain- 
ing code standards, and is aided by a voluntary cooperation on the 
part of a large majority of the industry. There has occurred a 
very substantial spread in employment, an increase of approximate- 
ly 20 percent in volume of business during 1934, and a substantial 
increase in total pay rolls. 

"I am entirely justified in saying that code authority officials 
of this industry are men of integrity and have courageously carried 
their res-Donsibilitv for code enf orceiaent in the face of a small 
but determined and dangerous group. 

"I can understand Mr. Howard's re"oort only UDOn the theory that he 
is quite unacquainted with the organization of the industry, its 
nature and oroblems; otherwise, he would not have a.tteranted to jus- 
tify the racketeering opposition to the code authority, which he 
evidently fo-ond and recognized. 

"Attached is a photostat copy of an article in the Kew York Times 
of August 12, 1934, and an editorial which quite fully and graphi- 
cally nictures the code authority adjiiini strati on of this industry. 

"Inasmuch as this reoort has been Ic.id before the Senate Finance 
Committee I believe the facts above briefly stated, should also 
be placed in the committee's hands." 

As mentioned in the above m3mcr:j,ndui!i, the hearing transcript also 
contains an article from the Hew York Times of August 12, 1934, entitled, 



-116- 

"Coat and Suit Industry is at Best Under Code"; and also newspaper re- 
ports from the New York Jo^arnal, and the Brooklyn Eagle, both of Au- 
gust 23, 1934, reporting the bombing of the home of 5^. Eathan Wolf, 
Secretary of the coat and suit code authority. 



■117- 



APPRAISAL Aim COITCLUSIONS" 



Ex oneration of th e Goie A uthori ty. From the time the first 
chargns were forv/arded to Washineton to the end of the codes, the 
officios of the Code Adininistracion Director, the Division Administrator , 
the Deputy, and the Heiiional Office 'in Hew Yor't I'/ere engaged jointly 
and s'eparate3.y in mors or less constant efforts to determine the 
justice or injustice of the charges. Officials of the code authority 
and of the industry or; anizations were excxnined in detail with respect 
to each cliart,'e. 21. e rps:;on3iDi],ity of investi 'Ration and evaluation of 
evidence rested laiv:el;' wion Lir. LI. D. Vincent, as Deputy Administrator 
and latter as Actin^; Division Ad,:iinistrator, on Hr. Alex Thomson, 
Ad;ninistra,tiori Memher of the coat and suit code authority, and on the 
author of this study, who as Assistant Deputy Administrator had charge 
of the code from ITovephcr, 1934 until its -invalidation. 

The findings of the investigation were necessarily "based upon 
their knowledge of the circuvistances- and their judgment in the evalua- 
tion of evidence. The ehsolute truth is difficult to determine in any 
instance where directly contradictory evidence is introduced, and in 
almost every case' there ".Tas more or less flat contradiction of important 
testimony. Ileverthelecs, an expmiher is able to formulate general 
impressions as- to the validity of the testimony suhmitted hy each wit- 
ness, and on this "basis it was the conclusion of the investigating 
officials that the individuals charged with improper exercise of their 
delegated powers were innocent of these charges. Moreover, their 
exoneration v/as more than a dismissal of the charges for lack of con- 
clusive evidence of guilt.. It was the unanimous opinion of the three 
officials named that the officers of the coat and suit code authority 
were conscientiously attempting to render service to the industry 
fearlessl;- and impartially, under extraordinarily difficult circum- 
stances that could not "fail to"" inject an im-olication of partiality to 
any a.ction tal'en. ' ' 

Indictment of the System." Though the evidence did not support 
the ciia.rges that the code authority, or its officials were at fault, it 
revealed clearly the defects of the 'system esta"'oli'shed by the coordi- 
nation of the industry's agencies of self-government with the code author- 
ity structure. The ^7enkness of the system lay in its potentialities 
for a'buse, rather than in any actual abuses- ^vhich were uncovered. 

The issue was confused oy the' looseness of certain condcinnatory 
term.s applied to recognized and specifically authorized forms and 
methods of regulation. The "orinciple of solidarity and the united 
front v.hich .^overns the activities of the established agencies of 
ir.ij.stry v.ts essentially the sane as thu principle of controlling the 
"recalcitrant ICfj" through the codesJ The'penalties provided for non- 
coiiroliance with the provisions of collective agreements differed from 
those provided for code violations,' but there was nothing hidden or 
sinister about the fa.ct that both codes a:;.:- collective agreements con- 
templated cnforcin^: cooporaticn through z"m. ;- lic--tion of penalties. 
It was no secret that the coat and suit cr-V- ' ;,::J:ority was most effective- 
ly organized for nation-v/ide code onf orcor^cn:, ani that it was doing 
everything in its power to maJre all est-a-o-isiimor-ts in the industry live 
up to the code. If that was monopoly, tiicn the test of monoj)oly was the 

9714 



-118- 

extent and efficiency of code administration. If the harsh terras of 
discrimination and oiriression a;opl,y to an^^ action taken against violators 
of law, then the whole system of civilized lav/ o,nd order is oppressive 
and discriminatory. Majority rule under certain circumstances may 
conflict with minority interests, hut bhis does not merai that majority 
rule is necessarily monopolistic, o-^iiressive, or discriminatory, 

Q,uite franltiy, the interlochin:^ -oref erential agreements hetween 
the trade associations and the Union forbade dealing v/ith outsiders. 
This could be considered discriminatory only if opportunity were denied 
to outsiders to jjin one or aiiother of the associations and to subscribe 
to tlie standards estshlished by the a^-roements, or if harriers to member- 
ship were set up in the form of inequitable restrictions on admission. 
As a p.ractical matter, of course, the priiiciple of solidarity implied 
that the associations would onl.y defeat their major objective if they 
imposed barriers to membership. For every natural reason they wanted 
all the members they could get, and no conceivable purpose would have 
been served by establishiaig conditions to admission which could not be 
met by applicants. Nevertheless, in view of certain questions raised by 
the Let;al Division of Iffjl in connection with, first, approval of the 
code authority by-la.ws, and, later, with the recognition of a member of 
the code authority ?7ho had been selected to fill a vacancy, it was 
necessary tliat a positive finding be made on the question of inequitable 
restrictions. (*) 

(*) The following documents tell the story of the investigation of 
the by-laws of the code authority and of the trade associations. 
These documents .are found in VHA Lcj;al Division Piles, Coat and 
Suit Code, I'.Iiscellancous Polder. 

Memorandu m dated February 1, 1935, from E. E. ElxiJell, Assistant 
Counsel to J. C-. Scott, Managing Attorney, KHA, 

Memorandum dated February 31, 19r'.5,. from J. G-. Latimer, Division 
Counsel, to P. L. Cocnley, Division Administrator, 
Letter dated Ifey Z, 193G, from M. D. Vincent, Acting Division 
Administrator, to Gcor.'e ?/. Alger, Director of the Coat and 
Suit Code Authority. 

Memorandum dated May 9, 1935, reporting conference betv;cen members 
of the Legal Division and representatives of the Deputy's Office 
and of the Coat and Suit Industry".' ■••■'• . 

Memorandum dated May 10, 1935, reporting conference of repre- 
sentatives of Legal Division, a,t which final dctei'mination of 
question was made. 

Memorandum of May 15, 1935, from 'I. S. Elwcll, Division Counsel, 
to Sherman Trowbridge, Assistant Deputy Administrator, in con- 
nection with Order "Jo. 5-32, recognizing Samuel L. Deitsch vice 
Leo Del Monte, resi^^ned as representative of the Industrial 
Council on the Code Authority. 



-119- 

llr. Vincent's letter of Ihy 3, 19S5, to }J\r. Alger, in "brief stated 
that the Legfl Division questioned certain provisions of by-laws of 
the Industrial .Council, that this did not mean that the provisions were 
necessarily inequitable, but that it was incumbent upon the Council 
to show tijat they did noi; in fact constitute inequitable restrictions 
on meiabership. The letter fr^rther requested that a convenient day be 
selected for an inforr.icil conference on the subject. 

Mr. Alger advised ".Ir. Vincent by telephone that in his croinion it 
would be unfair to sin;:le oat the Industrial Council for questioning, 
and that it v.ould oe more de?irftble to treat the roattcr as a general 
question applyini^ to all of the coat r.nd suit associo-tions. This 
suggestion was followed, and on May 9, 1935, a conference was held in 
the author's office, at vhicli Messrs. Trowbridge and Peibol. for the 
Deputy's Office, Elwell and I.IcConncll for the Lggal Division, and 
Hilton Levy and Bertram Ileinerts for the coat and suit industry, viere 
present. Mr. Vincent also attended this conference for a short time 
neau: its conclusion. 

The representatives of the Industry cxjolained in detail that the 
by-laws of associations and of the code authority .had not been used in 
a discriminatory manner and were necessary to the functioning of the 
collective bargaining system. 

On the following day. May 10, 1935, a conference was held by 
Messrs. Scott, McConncll, Ansell, and El?/ell, the result of which is 
reported in the memorandum referred to in the. footnote on page 118 
from which the follo?/ing is quoted; 

"The facts presented were that as a condition of 
membership in this association s, member obligates 
himself to contracts providing for a 'closed shop'; 
further, the bo?rd of governors can ezpel members 
for any cause. The constitution for the code 
authority docs not provide for representation of 
non-association- meLibers of the industry. 

"After discussion it was determined that if the 
constitution Of the code authority is changed to 
provide for ■ representation of hon-association 
members of th.e industry, then such restrictions 
of the association- are not inequitable for the 
rea-sons that s 1. there is no obligation on a 
meuber of industry to join the association in 
ord^r to have voice in the activities of the 
coac; 2. to prevent the improper ex;oulsion of 
. members of such association, a decision by the 
■ board of governors csrpelling such me:iibers should 
be subject to review by the I'.I.R.S." 

The subsequent approval of the Legal Division of the recognition 
of L;Ir. Doitsch as a member of the code authori-iy constitutes the final 
evidence that the Industrial Council W8,s cleared of the implied charges 
as to inequitable restrictions on n.emb cr shi i , 



9714 



-120- 

Oi" course the charges against the Coat and Suit Code Authority- 
were more than merp generalizations of alleged monopoly, discrimina- 
tion, and oppression. They contained detailed, specific' allegations 
of individual acts which,, if true, constituted evidence of serious 
misuse of delegated power. The fact that these allegations were not 
sustf.ined by investigation is of less present im;5ortance than the fact 
that there was a^possihility that they rai;_,ht have "been true. Under 
the circiamstances, the dismissal of the charges against the code 
authority officials is an extraordinary tribute to the impression of 
personal integrity which they 'iresented, but it is no vindication of 
the system under which they o-i^erated. 

In this .connection it is interestint-, to note that the voluminous 
report of Special Agent. Howard boils down in its coiiclusions to a 
recommenda,tion for revision of the method of selecting code authority 
representatives, and to a further i*ecom;;iendation for the selection of a 
ncv/ code authority in view of the alleged misuse of power exercised by 
the incumbents. > 

The soundness; of the first recommendation was recognized by the 
Dejjuty's Office and by the code authority. The code was deficient in 
that no representation was provided for a small minority of members of 
the industry who had no connection with either the ITew York trade 
associations or the Western Council. A revision of the code for the 
correction of this defect had been under discussion for a long time, 
and was being vrorked out at the time of the Schcchtcr decision. By 
no concept of the term "true representation", however, would it have 
been possible to establish coual representation for union and non-union 
elements in an industry e.pproximately 9C^:-> of whose members are in the 
former group, or to make an;;^ iraport'ant change in the balance of power 
on the code authority. 

To have dismissed the existing code authority, filling the va- 
cancies ?dth other re")resentatives of the different industry elements, 
even if they had been found flagrantly guilty of the charges, would 
have done nothing to correct the basic wealcness of the system by which, 
regardless of the i.ntegrity of individual officers and members of the 
code authority, the implication of possible partiality and misuse of 
delegated powers would necessarily always be present. 

Remedy Through Limiting Delegated Power . The most carefully drawn 
legislation cannot provide impartiality to an atmosphere that is 
naturally, traditionally, and openly characterized by the cross-currents 
of partisan interest. Interested parties "do not malce impartial judges, 
and a system tlia.t allows them to exercise 'any powers other than the 
right to be heard on cases involving the interests of opposing parties 
is not likely to result in judicial determinations free from taint. 
So amount of strict supervision can correct the basic weakness of such 
a system. Regardless of the practical advantages of coordinating the 
fionctions of regulation between governmental and industrial agencies, 
and regardless of the theoretically praiseworthy principle of in- 
dustrial self-government as a basic policy in the administration of 
federal law, exjperience j \dicates that the working partnership between 
KRA and the established agciicies of the Ccat and Suit Industry contained 



•121- 



dan^ers and difficulties thnt make certain changes necessary in any 
future efforts at federal indiistrial regulation. 

It is perha-^s too 'orotA an ass^'oiTOtion to conclude from the coat 
and suit code experience alone that revised general policies may be 
or should be estaoiishod T;iiich would a-oxily to all industries alike, 
but it apiaears that there is ,-:ustif iable doubt of the advisability 
of permitting industry in certain instances to exercise the degree 
of delegated -oover pur^nittcd under 'JRA<, 

There is a natural feeling a'^iong raany business men that the 
less control exercised over their operations by government employees, 
who through lack of cxp ^jrience- mpy 'have little under st:?.nding of the 
intricate iDroblens of 'the industry, the better for all concerned, Mr, 
Alexander Printz, Chair.ian of the National Coat and Suit Industrj'- 
Recovery Boards ezcpresses this thought as follows: (*) 

"In many resnects the governing of the industry by the 
business men tueiselves, free of control "oy 'theoreti- 
cians' and the like, is infinitely more efficient. If 
some formal authority could be vested in those direct- 
ing tiie voluntary trade "oacts, the set-up would be 
ideal". 

This attitude is thoroughly understandable, and entitled to re- 
SToect. It does not necessarily follow, hov/ever, that the form of 
federal control adopted need include action by "theoreticians" on 
matters that are best handled by industry, lloreover, experience has 
indicated that there are certain functions for whose Derforrsance 
government officials are perhaps no better fitted i-n terras of per- 
sonal ability than industry members, but which cannot be performed 
.by industry without implications of partiality. 

The exact form of a remodeled system would depend, of course, 
upon the t;;rpe and scope of control provided by law. If the MIA. code 
stiTicture were renewed on its previous lines, with its narrow code 
divisions and complex wage coverage, there would obviously be the 
necessity ox again working out an integration of the existing agencies 
of self-government with the federal administrative agency, if effec- 
tive oper.'.tion viere to be obtained without unnecessary expense and 
duplication of effort. Even under such circumstances, however, one 
ira^Dortant chsjage would appear to be desirable and practical, namely, 
that the judicial fp.nction in so far as it is exercised in connec- 
tion '.7ith compliance cases under federal law, be vested solely and 
directly in responsible officials or agencies of the federal govern- 
ment. 

If, on the ether hand, ^. more simplified law were passed, pro- 
viding basic minimum wage and maximum hop.r standards only, covering 



(*) See How York Herald Tribxme, IIovDmber ;•., IGto, under heading, 
"U.S. Kust Help Rule Industry, Prints Asserts". 



"broader divisions of industry thaji those established by the IffiA codes, 
the ftinctions and fields of activity of the government and the in- 
dustry agencies v;ould be more clearly distinguishable. Under such 
circumstances it would be Dossible to have coo-oeration betv;een in- 
dustry and government without integration, without delegation of 
federal power to individuals or groups whose position in the struc- 
ture of industry iianlies a natural partiality toward other in- 
dividuals or groups, and without limiting in any way the legitimate 
loowers of the established agencies of industrial self-government. 
Collective agreements would operate in their recognized sphere with- 
out conflicting viith and overlaoping the area covered by the basic 
federal law. The Union and the asssociation could bring complaints 
of violations of the federal law; they could talce an active part 
in the presentation of evidence of violations; and they could con- 
duct their organizp.tion activities without the possibility that 
their motives would be misconstrued, or that irresponsible subor- 
dinates could bring disrepute upon them for improper use of delegat- 
ed PO"'er. 

To limit the delegation of power to that of initiating and 
proposing such regulation as night be necessary in the different 
branches of industry for the maintenance of fair trade practices, 
or for such variations or exceptions in the basic lav;^ as might be 
necessary on labor standards in particular instances, would not 
prevent violence, oppression, combinations in restraint of tra,de, 
or other indefensible and illegal acts, but it would clarify the 
fact that such matters are under the jurisdiction of the criminal 
courts, the police, the an,ti-tiTLst laws, and the Federal Trade Com- 
mission, and not an integral part of a system of national indus- 
trial regulation. 

Finally, such a limitation of delegated power would serve 
the all-important purpose of obtaijaing the respect and confidence of 
all elements of industry in the impartiality of judicial determi- 
nations and other actions under the law. 



9714 



-123- 



APPEITDIX TO PAP.T C 



9714 



-124- 



EHIIEIT "A" 

AiTiDAViT or :.iii:jAi:i!: snLDi\: oi' tiie seldiu coat CO 

Introduced as Sxiiitit P -2 of the reT?ort of 
special agent J dm C. Jlonard 

STATS C'J innv; ::oBi{ ) 

) S3: 
CO'JITTY 07 LZV: YOEK ) 

I, 3ErJA;:il' SELDIII, c-raer of the Sel.cir. Coat Co. of 256 TTest 38th 
Street, je^,' Yori- Cit"/, after 'bein.f? first dnJy srorn under oath, depose 
snd. sav ar, follo^/s: 

I started in "business in Baltimore in or about Janup.rjr the I5th, 
1922. I T-as in Ealtinore up to Jane 1^ 1331. On June 1, 1P31, I o-oened 
up a "bra-ich under the n-- le of the 'Outstanding^ Coat 'louse' at 250 7est 
39th Street in Te:^ Yor)' Cit", and I vc.s doing husiness under that na-ie 
through Janua.ry 1st, 1932. Uhile I iiad riy "branch oioen on 39th itreet, 

an official of the union had. \7ar:ed into ny "bre.nch, "by the name of 

of the Joint Zoard of the Ladies Garient Uor':ers Union, and he told ne 
that he will not let -le to '-.'or]: in Vev Yorh, as I p.n a IBaltinore manufac-^ 
turer, and he Trill insist I should, stay in Baltinore. I told hin at that 
ti'ie, that I ai still in 3altinore, c-nd I certainl" have a, ri-'^ht to run 
a "branch in j'e" Yorh, A couple of da-^s lat'^T, 5 nen valhed into ny place 
on 39 Street, and they rralhed over to :r'- cutter and to ny designer and 
they told tiien that unler.p they o.uit their Jo'ds than otherwise, they r^ill 
he carrifed out in stretcners. I ^^ent over to the telei^hone and wanted 
to call the police and the ninute they see :e get a hold of the tele-ohone 
they ran out and I ha,d never seen then after that 3,n;"nore. 

In 1932, there r;as a stri^re in Ye'J York, and I :7rs still rvmning ny 
"business in Baltinore, a-d. I \7as '■or'':ing u:.der the sane na,ne, the Out- 
standing Coat "louse, a.t t.^e sane address, and 13 nen Tral'-ed in around. 4:30 
tiio ninute they o'oened tl.e shovf roo;i. door, I war:ed over to then, and I 
as":ed the gentlenen, 'IThat is it', and one of the nen soc^:ed ne v/ith a 
"brass knuc'-le and ^:noc-:ed ne dovm. I had :vj nep^aeT? by the nane of Joe 
Paris rorhing for ne, and he ha,d jun-oed in to protect ne, a.nd as I ra.ised. 
myself fron the floor, I seen one felloif tahiig out a knife and cut his 
neck and sta'o hin tr'ice in the stona-ch, and I run into my private office, 
and I locked the door. Three men broke the door open and ran into riy of- 
fice; one fellov grabbed ne rith the left am and the other fel"'or graJbbed 
ne fro'-i. the legs and the third man '.7as getting read;- to do something to 
me, and njr niece Stella Paris got bet'jeen and st.-^rted to holler and the;^ 
ran away, but her hollering - n;- -olace was on the third floor and police 
on the outside heard it, and they watched around the back elevator door 
and the^r grabbed, two of then, a:id when they brought then upstairs, ny 
nephew Tra,s laying on the coiich, blood streaming from his stomach, and his 
neck, they brought over those two fellows to hin, and he '"'as told by a 

fellow that one of then that he was kil.led 'by a racketeer a ^'•ear 

later. The ra.c^-eteer t'v.t stabbed nv nephe" was fomid dead on Hester 
Street in 1333, a year l;iter. 

', y nephew had told that racketeer that 'You are big enough to use 
your fist, why did you ur.e the knife?' a.nd he tried to deny tha.t, and the 



'1?5- 



cop tliat Lac", hin pic':rd -j-t liis ar:- p'-d paid >I,ool- hf?re, ^^ou can't den;;- 
that tiecause 70U have dJJ. the tlood on •.•our r/rist', and the cop turned 
hin around, rxi/,. he had blood all over tlie hae'!: of his coa.t. 

The other fellon, , hir- hands v/cre full of 'blood, out he 

was the> one that liit '-^e rit>. .bl'e hrars "■-aachle, "-i:" tlip co"s had locked 
hin up and took hir to tl.e police str.tion. T]ie Ces''' B-^i'-^eant at tlie 
30th Street police station had turneC thcT over to the detective tureau 
and Detective Sheffield '/as a-o; jointed to t^'^'e ca./e of this care. 

After I had vnt in char;:;e?. o.""ainr/t the^' in the police court, valking 
out fro-i the -police station, rrl'-.ing up to Seventh Avenue and 30th Street, 
a nan ual':s over to ne, that I had never seen hi^: hefore, and sa;"-s to 
me 'Look here, -Lr. Seldin you ^:ot tvo innocent nen locked up.' I said, 
who are 3"oa, and he said 'I can't rive ■'ou- no naiie, hut I can only tell 
you that they -lade a nistake. They were sup-iored to go mo on the fourth 
floor, anri ~o^r mistake, they rent on the third floor, and we are sorry that 
they had rv^de that joo on ^rou. ' I said, vrho ai-e 3'ou? Ee said, 'you will 
find out after you tal]-: to ne,' I refused to talk to hira and left hin, 
and took a caoh and v;ent ha.ck' to tlie '/e^-' Yorker, Hotel. 

At the sa,ie ti^.e, ny nephew was taken away h;- an anhulance to the 
St. Vincent Hospital. The next uovRi^^.g I '^ent to the police station. 
They told ne to an^^ear in the 10th Street Court House, that is at 6th 
Avenue and 10th Street. As I reached 9:oO in the norninf: the court house, 
before I wa.lked in. the court room, I was stoprjed hy three -^en tha.t I had 
never seen hefore, a.nd they told :ie, 'if you dare to na^:e a.n}r cha-r^es 
against these two nen, that neans your life and --our family's with you ,' 
and I of course told the-: that I was'T-'t afraid of it pnC. nothing will 
stop le fron prosecu.tin'T thise :ie-a for trying to take ny life. 

Tl'ie case was called, p:.ic. tl<.e Judge nostponed it for another hearing, 
ujitil ny nephew will Of a.hle to ai-iriear. At txia.t tine, he was la^'-ing in 
the hospital. A couple of clvrrr, laJ;er, I had all ":inds of business people 
that I knew, coning over to see ne, not to protect against us, hut to 
protect TTf life, -:cllin-- --e tnnt I n: d started T'ith a had bunch, and the 
test thing is to turn thore two fellows loose, axid I insisted that I would 
still have thoce fellows sent to jail, and the:' had given ne a warning 
that it wouJa oe a best i-teio that I will na:e, if I put those two fellovrs 
loose. After the ca.se had cone up five ti i.es, I wa.s alwa,ys undecided. 
I kept rr.v ne-ohe^; away fr-m the business for 5 "ee'':s, for 3 ^-eel'S I had 
kept hir in Lon,": Beacii '■"'ith ne, -^'her? I spent nj su;.iner va.ca.tion, and on 
Septenber the 6th, 193":, I nad co ->r in v'ith thn idea to :orosecute those 

fellows. '"''_ reprecentiig tl:e union, liad called ne away on the 

side, and he as^-ied ne mt to r^n it, tlia.t he don't care for those racketeers, 
but he certainly cares for le arid :-iy fanily, and he had pity on ne, I 
told hin that he is just as reswonsible in this proposition as the racket- 
eers, and that if he -.-on't protect t len, they "ouldn't do that ^-ork. 
He told le he was- their attorney a.::d h.e -las to do the best he could. I 

hired a. la.-yer by the na''ie of , and as 'V/ attorney said 

"Seldin, I an going' to protect ^,-ou in any ''-ind of case you will be nir.ed 
up in, but in this case I an not goinw to reni-esent you. You '-'ill have to 
get jrourself another la,wyer, as this is not a ulace for -i.e, with gangsters, 
to have a.nything to do, and I never did wa.nt to be ni::ed up with then, and 

9714 



leave :ie out of it." And I uent on the stand "by myself, and I ras 
questioned "by the District Attorney rnd the Judf^e, r nd I decided just 
Taecause I '.'as afraid of my life, and as iv^ o^-n attorney advised '^e to 
be careful of pny renarh that I npl:e, that it may conflict on me later 
on, as I am starting in r'ith a bad .junch. The case ras called, and I 
denied to see those fellows, just for the reason I was afraid to sto,rt 
in \7ith them, and the same thin^ a.pplies to my nephew Kr. Paris, because 
that would mean for the future my life, if I would -ut those fellows in 
jail. To show that we did-n't had an innocent fellow mixed up, o 7/ear 
later, the saxie fellow that was locked up, was found I'illed on the street, 
and nobody ever knew who hilled him. 

After that, I had made arranf;ementc to move from ?9th Street to 
256 ITest 3Sth Street, and change ny name from the Outstandin;;^ Cost House, 
to the Seldin Coat Company, and. I had mr.de a comp].ete change in "iy business. 
I moved out my factory on Dece:mber 5th, 1932 to Perth Amboy, ¥.ev Jersey, 
and I had given up m;- business in Baltimore ,?nd the Taltimore peo^-ile was 
left without work. The union started to get r.ftf^r -"e, they wanted me to 
move my factory back to Baltimore, and I had refused to do so. 

On December HOth, 1S32, the c'.3.j that I opened \vo that place for 
operation in Perth Amboy, I was going or th.e 1 o'clock train to Perth 
Amboy, with an insura-nce man, pnd walkirg in one of the cars, I had found 
a man from Baltimore that was the shop chairma-; of my Baltimore sho"o, "by 

the na,me of . He was a leader in the union. TTnen I had. seen him 

in the train car with two other men, I walked out from that car, and I 
wal'-red in the front, about 4 or 5 cars a.way from him. I didn't vrant to 
see him. All the ti^ie the insurance ^van war '-'ith le, i"ho v;as Osca.r 
Nelson. I was taking him to Perth Amboy to insu.>"e mj- --ilace. 

TJlien I got off in Perth Aiboy -at 1:58, those tliree men war;ed out 
and got off the s.-^me time "ith me, I was \.aitin;-; in the sta,tion for about 
five minutes tratching them, what they a.re goinr-; to do. They wal'x.d awa3'' 
and I v.'as walk-ing in back of the.m to see w'lrt they are going to do. About 
15 m.inutes later, after that I left them \7r?lkir.g, and I went to my pla,ce 
of busiiess. Iiy place of business was just across the waj- from the station. 
To go into my place was a nublic mar'-et, and I '::ari, a stairway to "o up 
to the factory. About 15 linuten later, I was going out for lunch, I met 
one of the men walking or the steps and th.e sr,me man as I seen in the tradn, 

he is a leader of the Branch. I found th.is out a.f terwards. I 

asked him. wha.t he was doing uo here, and ho said, th."t he ctme aro\ind for a 
job, I had a sign outside advertising that wo '"ill on: Joy 300 people, and 
asking for help. The Chamber of Commerce gavn t a ^-rite u-o, a factor;?- 
with three hundred men, I told this mnn tsir-.t a' 1 m';' jots ^-ere filled, 
because I recogni::ed him. He walked out on tJie stret, a-id then I '-alked 
for about three bloclrs and I followed him, till he turned on corner Smith 
Street, and I waP-ed away a bloclc, and then I A7a,tchod .him on the corner, 
and he came out watching me, what I am going to do. Wljile I was standing 
on the corner, three men walked over to me and one fellow walk's over with 
his mocket lii:e this (indicating) and moints I'hat looT:s li'-e a gun, mag^be 
it wa;.n't a su.n, but it looked liV;e it, and pioints it right at me, and 
they said, 'Book here, we want 3'-ou to close up t'l.at ^olace. 'Te want j.'ou to 
go back to Ealtimnre'. I told them 'The best tni^g'-: for -^nu is to get the 
hell our of this town, because I wi].l lock youse u-').':. The minute I told 



■XC,7- 



then I '-'ill loci: then uo, tliei/e '/r.s r traffic cop refralatir.:^ traffic a 
hijjidrecl ie:-t av/s.y, and I -'al'jjc over to hi-', pncl told hi'i thp.t I iran 
threatened hy union r£c-f:tecr;^ to -;et ]:illcd. I told hin that they 
T7anted to ]:ill ne, and '-.; at , .e s'loa'd loch then up. He told ne that he 
couldn't leave tno trr'f''ic hut t!iere '.'as a con in an autoMohiDe, a.nd I 
should --^o over to hi.i aid tell hin al.oat it. He ':ot ou.t of his car, and 
ashed uhere are th.ose ■nen, and he started to f ol" o'^ those -len. One nan 
disappeared,, so he followed the tv?o to a delicatrssen store near Erunsrrick 
Avenue, and he stopped then there and searched their -Dockets, and he 
could only find papers and nothing elre on ther, and he tooh then over to 
the station anc he told then to take the ler.t train out of Perth Aratoy. 

I hnerr rhat T:as cov.inf;, "because I had a "'es'-on once hefore, and I 

T7ent and hired a f?;uard to -orotect ne, a fello^ "by the name of , 

and th-at chaffeu.r did ndt let ne go out hy r-'-self and everyrrhere tha,t I 
T7ent, I v.'as guarded "oy hin. .^ai6- I -ert o^.'-er to see the captain of the 
police station, and he offered to .5;ive ne -protection an:^-.'here I go, that 
they T.-ill -orotect -^e and I told hjn that it 'Touldn' t."be necessary as I 
have sonebodj- to protect ne, I onl^' --wanted hin to ta.^-e care of nj house, 
"because they are liaole to c.o rjonethinj; to my faiily. 

On January 4th, 1933, I had an openi vn. I had f-iven a dinner to all 
my custo:iers and over 450 people rere vicl'^i -i-'^ -r-r ;B"i.a.ce "betreen 12 a,nd 4 
o'clock. I vas told hy one of -vr friends that I should "be veiy careful as 
I am listed to f'^et a stink honh on that openi-^g day. I rent and hired 
two gua.rds, I p'ut one in the fro-nt lohhy and one in the rear, I told them 
not to leave anybody r.-no looks suspicious cone i-n, and every salesna.n in 
rajr place was watchin,-; thp.t nohod;/ should throw a ho'ih du.ri"g the day. 
At 4:30 I '-^ert to Palti lore. I had --;y fanily at that tine, still living 
in Ba:i tino-L-e. ,t took t.i'- 4j30 Co-vn-essicn.-^l. I spent in Baltimore Smiday 
and 'honday, and I'onday ni.eht I too'': .r nidn'ght trai'i and I got i"rito ny 
place around 10:30 in tic nornlng on Tuesd-y. After that I had a guard watch- 
ing my front door ^rh'^n -oeo-^le are co-ii^n- i-'<., and -13^ hac''-- coor, I went aiid 
piit a chain on the door, and n'n"boc'.y ooul.r iir.ve '-aJ.'-ec' i-;;.to th.r't place, un- 
less t/e co-nld ha-\rt; see.-: h-ivu ,;\s I •p.lk-'d at 11 = 30 to the stockroom, I see 
a hand stlc':ing out \^it 1 a glars '..o'.-.'! and thro'.^ it rig.t thro'agh tha.t door 
to my stockroom anc. I knew ri ::ht a'>'.ay it was a hon"b, .'a-xl while ,1 was told 
that I wrs -oin; -^o have a "00 :h thro- n ir , I had. prepared three harrels of 
green dust and 24 ouc]-ets of sand, an.d I went and covered iip that fuj.ie. 
It is like a gas coni'ng up, 

On the nest da.y, a. union leader, tho,t I. caainot mention his na.ne, "'oe- 
cau.se it is the s-ne gang, v.'alked into ne, Hs s.--'.ys, 'Listen, what kind a 
monkey husiness do you -al-ing here. Do yo'U think you can rule in Jlew 
York like yo-u did in Baltimore. You know ^--ou. can't do a. thing here unless 
you are unionized. I told you uefore, while I v^as in Baltimore, in 1930, 
that in Ba-ltinore -^ou caj?. get rway with anything ou.t in Fev.^ York ^--ou are just 
starting in 'ith th.e '..rong people, "ow listen, ''enny, do ne a favor, make 
the "best settle":ent -ith the union. I -vail go see the neople that I lia.ve to 
see, and J thi:hl- I can' straighten 3'-ou cut ajid gi've you the hest settlement.' 
I savs 'Libten what settlonent can you give ne. Iliey '.nant ne to go hack to 
Baltinore, I not a lease siried in p'-rth Anho", and I got a lease signed for 
two yerrs in 256 West 3Sth Street. I too]^ a,n apartne"t in Perth Anhoy for 
the f'^nil--, and if I move hack now, it neans fhat I '-ill go hroke in my 



•128- 



tusir.ess'. He s.-.ys 'Listt3-^. '"on't je stus^oorn, "becp/.ise I apA co-i? to cee 
:-ou as a T"riend. A sti:f: 'bo'-'h vps jjtist a r/arning. They are liable to 
do so'iething '-oi-Be than a t-ti-^'-: 1)0111''. I says 'Listen, I an not afraid. 
I am not T-fori-ied aoout a tiling of tliat kind. If I uas the o-^.l" o-e that 
got a stinh 1)0-10 I nould "be scared, "but the;'- have been throt'ing 12 and 
15 a day, end I 'light as \'ell have one too'. 

So he rent aray, a-^.d r.aic" "^All rifiit, you'll be sorry i . 

In two das'-s later, t^o nen r/alhed into ;.iy place. They said they 
rant- to see L'r, Seldin. The fellorr standirg in the hall nay told them 
that they cen't see I'r. Seldin 'an.less thcj gave their naries. They 
slioved liin aside and rralher!. right ir , r^nd the3'- told ne tliat they wanted 
to see i"r. Seldin. I said to then that hr. Seldin is oiit of tom. They 
sadd thr.t they seen hin coning in the place, and one of the'i say to me 
'You a,re Seldin, rrhat ' c- the use of telling us anything else', '■.'ell, I 
thought to T-'yself , thrt there vis no 'ise of any arguments. I tool: then 
in x' :3rivate of ."ice, and tolr" then to sit dorn, and gr.ve then tno drinks 
of licuor, rnd I asked the:: vhat they vant. Ke so.id 'Listen, j''ou are a 
guy tliat ir.es to liste-. to .nobody. "7e are friends of ^^ours. TTe can 
protect '"ou from al] jO'ir troubles'. I so.id, 'Hott can you do it?' he 
says 'TJe can givo ".-^u na^es tl..rt v.'e protect so and so, and so and so'. 
I said that I an not interested, bsca.use I an not the people you rrant to 
protect. You can't pro|;ect le because I an an out of tomi nan, and I 
don't like any kind of this nonkey business protection. Today you pro- 
tect one person, s.nd the next you. protect soiebodj- else, I don't want 
ny bii-si'iess to tui-n into -a racketeering proposition, and it will put 
ne out of business. I ^••orl:ed 13 j^ears to establish it, I can't just 
throTT it away for racketeeri'ig. ' Tlien thei' said 'Look here, we can pro- 
tect you for $5,000 a yea.r, I ;guarantee th.-'t the union won't cone close 
to you'. I sa,id 'In what '."ay. ' Ee said 'lefore c<n.Yood.y sends an^rthing 
to yojir place, we ■'.noi-f ab->ut it, because we '-orl: both ways'. I said, 
'How cp;a -'■ou be tru.thful if -'o-a '-orl: both wa.ys. Yhoever na^s ^^ou the nost 
gets the protection. You '-.now, after all the union ta::es their nenbers 
50^ a person, that bri.ngs then in .$100.,QOO. I can't "oay §100,000.' He 
said, 'TTell, a.ll we ask is ^5,000 and :foxi can give us "1,000 a ^^ear, and 
$75 a week fron the pa.yroll'. I asked tnen ''.Tlrio is goin.g to collect that 
noney'. They said ''We have sonebody that col"'.ects every week that noney 
fron 3i'ou' . I said 'You have -.our OT'n headaches here i.n town there is 
pleit3- of non union sho-os, whj^ pick vn out-of-tc-'n nan, who just nade an 
establishment in Yew York, and is trying to get along, I had plent;;- of 
trouble already, Yy teeth were k-.ocked out, and ny sister's onlj'- son was 
hurt, Ilaybe I would -nay o5,000 to prevent that, but business conditions 
aren't so .good now,.'indit would iDut ::ie right out of business if I were to 
pay tiia.t' . 

I'e said, 'Uell, yoix are naking a nistake, tha.t $5,000 is a bargain, 
I7e are charging $12,000 to son.e people. . If not, if '^ou don't want to pay 
us $5,000 a year, we '"'ill 'lak.e a better proT^osition, G-ive us 2A on everjr 
garment ^"ou produce', I said, »'7ell th-t will be nore, because it would 
aiount to $75000, because I npJ:e 100,000 a year'. He said 'Yell it is 
3''0ur choice', I S8.id 'I'll tell you '■•hat '•'.y ans^'er is, -'toxl ':now I'm a 
southern ne.n, and a southern nan never believes in racketeering. G-o to 
where you belong, and let ne run ny own affairs . I sair' if I pay ny o\7n 
peorile lOr^ a garnent nore, than I can have the union, and I don't need 



racketeers'. They r-rnlhed out rxd I never licard from them p^nsn^^ore. 

I nal^red in right o,fter I Uisod to £^0 nut to ea.t everj'- day to a cer- 
tain place, vhere most of the clotJ- people eat. Every do,y that I 
Tvalhed out fron the resbaurcmt a young fellor/ ras alraj'-s follovrin,^ ne, 
and I never paid any attention. 

Sitting about 4 wertrs later, with a, cloal: nan, liaving lunch to- 
gether, I said to him, I says: '¥hat is that nan F;itting over there, that 
haldheaded nan, looking at me? He don't tal'e his eyes off me'. He says,, 
'Don't you l-nou hin? ' ''le is a captain of the racketeers, they have cap- 
tains, you knoT/'. I Icolced at hin 'juen I v/alked out. He ralked over to 
the TTindo\7 for a cigar, and as I val'' ed oat, that young felloTr just 
passes hy -le and he disappeared, and I didn't knovf r^hat was coming on, 
see? I T'ent hack to the place :>nd forgot about it. In the evening, I 
had something cone u^t in iij raind. that sonething is wrong. I looked through 
my window. I got ny plo.ce on the second floor, and I seen the same man, 
the sane fellow standing around an autonohile and looking up, I called 
over my man pnd I said, 'Look here, I say, I seen this 3 or 4 times. 
Something is wrong'. T7e turned the lights out in the show room, and I was 
watching that nan, I didn't want hone that evening iintil 8 o'clock. 
He waited and waited and waited, and then vrent away. 

On the next day, I wa.s afraid to go out myself. . My chauffeur used 
to "bring ne to work. I told hin that it looks like sonething i s wrong 
and tlici-t lie shouldji't leave me out from the co,r, unless he follows me. 
I seen the same young fellow again, hut I thought he was one of the sales- 
men that are always arouiid the roor, end I didn't r)ajr 8,ny attention to 

him. At 12:30 a huyer, two Dn/ers walked in, a fellow hy the name of ^ 

of Hew York, and of Fittshurgh, and he sa.ys to ne, 'Come on, 

I want to "'•'■uy 3'-cu lunch''. I crid, 'ITo, I '"dll huy ^rou lunch'. 'All 
right I will go do\ n to lunch' I said, I said that we should eat across 
the way, that is where T alv:a-'-s eat. The3r said that the];- didn't want to 
eat there,. as a hunch of racketeers eat there. Then we decided to eat 

in restaurant, ^.'hich is on the sane place that I an. I "ent 

in the restaursjit and had my dinner '-ith them, hut walking out fron the 
restaurant, I was stopped hy a manufacturing nan, he asked ne certain in- 
forma.tion with reference to credit, and these tv/o huyers with ne excused 
themselves and le:t ne-. I walked out hy myself after that, and it is 
only ahout 25 feet away from ny door. As I was trying to walk into the 
huilding, a;nd as I W£!,s taming into the hiiilding, the sane j'^oung man that 
I seen a few ti-ies hefoT-e, was hiding in the loVoj, on the outside lohhy, 
and there vras another "i;:, 20 nen around in the lohhy, and it was raining 
a little on the outsido, and I seen a hand raising up, and the first thing 
I felt a wash in ny face and a hottle dropped. I made an attempt to 
catch hiiii hut I dicn't knov? thpt it I'as acid at that time. In a second 
later, it started to hurn so much that yiy hollering called, the attraction 
of 2 cops standing about 100 feet away from the place, and they ran over 
and they grahhed ne and they wanted, to icnow what happend., and I could, not 
explain, as I did not know what happsneo. to me, st that time, another fel- 
low hollered, and they grahhed hin, and he was also got a part of the acid 
in his eyes, and in a second, rinother fellow strrrted to holler. He wa.s 
spr8,3'-ed in the face witn acid. The crowd got together, and the cops tried 



-130" 

to keep them p.v;ay. The first thin;^ thoy -pvt me next door to 252 West 
38th to the engine room, -'nd t'noy c-.lled an ojifoiil-'.nce and they took 
me away to St. Vincjnt Hospit.-l, nnd t]iay alsotook those two men along. 
I s-oend in the hospital a fev; days, and I wan treated hy Dr. 

one of the biggest professors thei-e. Throv^h him, he had made 
arrangements for me - to send me home, tiecause mj-- vdfo at that time 
¥;as exoecting to ha.ve a bahy, and she did not kn0\7 v/ha.t had happened 
to me. ^jlhile I v.-as there I called her on the "phone and told her 
that I am calling from St. LoLiis, and th:?.t I will have to spend ten days 
there. She told me that she may have to go to the hospital, and that 
she felt tad. I tho-oght tha.t the 'best thing for me is to ma.ke arrange- 
ments to come home to Perth Amhoy to stay with the family. I called \vp 
a Dr. oy the name of , that v;as ts-king care of my wife 

and told him v.'hat ha/DTcnded to me, and he told me that he lia.d seen that 
in the papers, and he was surprised tlia.t my wife didn't laiow anything 
abov.t it. My boy had come home from, school, and he ha.d a clipping from 
the paper, tliat the teacher had shown him, and he was smart enough 
to keep it away from his mother. 

When Dr. Md come over from Perth Amboy with his machine 

and took me to my home, he took alon, a nurse • from St. Vincent Hospital. 
She spent Sv/eeks with me treating m^,'- face. In a day later, my wife had 
a baby, and I went to see her at the hos;)ital, under the care of the 
doctor, and she asked me to pi-omise her, for the new baby's sake, that 
I will quit the cloak business and be a father of the new child, and I 
made a promise at that time. 

In 4 weeks later, I went to lev; York, and a friend of mine, he happens 
to be in the same li-ne, ?/alked in to see me, and I told him just v/hat 
■my intentions is to do, and what promises I made at home. He said, 'Well 
there is no sense of any man swending so many of his years in biisiness, 
and as I understand you have a good size biisiness, it v'ould be a very 
foolish thing on your side to go out of business'. He said that he could 
work out a pro'oosition for me v.dth the Merciiants' Ladies Ga-rraent Ass'n., 
as he knev7 Mp. Co:'"^elof very well, and he said, 'If you want me, I will 
go over there with you, and we will see wlmt we can do'. 

My secretary called up Mr and made an aiToointment for me at 2 
o'clock. I went there a.nd when Mr. had seen me, tears came 

out of his eyes, as I wis so misfigured tlia.t any person that woxild see 
me at tliat time would save his expense of eating at least for a month. 
My a-rpearance made him so sick that he started to vomit. I told him ray 
trouble, and after we had talked for a while, he told me that the only 
salvation for me is "oy becoming a me nbsr of his Association, the Merchant's 
Ladies Garment Association. I asked him at tliat time what T/ould be his 
dues, and he told me that I would have to pay him $300 in '.advance and the 
balance according to each member, v/hat he pays on the amount of business 
it is determined. I asked him the question, that if I will give him the 
$300, if that v/ould save me from all that trouble that I went througli. 
Ho told me that cannot promise me anything, but he will try his best to 
S^^ and make arrangements, the beot arrangements he can 

\7ork out, and that he \7as sure enough tliat he will be able to do something 
for me at that time. He called and he told him tliat he 

has a very important case in front of him, and he told me tliat 

told him tliat he v/ill meet him a.t a certain meeting that they were 

9714 



-131- •- 

su-;oposed to have, and he Tdll talk to him about .it. He told me to go 
home, and not tc v/orry about it. Ke said that he v/ill see that nothini;;; 
Y.dll ia-Tpen from the day after I left nirn. Mr. told me tlia.t. 

He said tliat he was sure tmt he will he able to v/ork out something 
with the union. . ■ ■ 

A few days later, he called me and he told me to come over to see 
him. 1 did that. He said to me tiiat the best arrangement that he coxild 
have made with the union, is that the union will let me continue to 
my Perth Amboy factory till I finish out the spring season. After the 
spring, season, tliat factory will liave to be^ closed up in Perth Amboy. 
I told Mr. that this arrangement tmt he liad made will not: 

suit me, as I- liJtd moved nxy family to Perth Amooy, &.nd my children were 
going to school there, and I have a lease u;-. till February. 15, 1934^ 
and I have to pay rent for my Perth Amboy ;Tlant, and that is eno'ogh 
to ruin any man in business. Ke_ said "Seldin, you are luclcy you are 
here. You accept this arrangement, . and v/hen the day comes, we wiil tfy ' 
to get some other arrangements for you'. Well, I told him that I will ' 
accept his arrangements. , ■ : 

In the month of Jujie, the imion and the association started to work 
on a new contract, that is in 1933. I went over to se Mr. 
and I told i.Ir. according to my arrangements with you and ' 

the unio'-i tiia.t you had made, that I must give up the .place in Pfirth-. 
Amboy, so he told me,,, he says, 'You go ahead, you got business, you keep 
on Working till they vHX call me, and I will tell j.^ou what they are 
going to do. The \"inicn h--i.s enoiigh trouble on hand to.day +0 come to a 
new contract tha.t, they vzill forget about you for a v/hile. You go on 
and do business', ^ilell I did. 

The first thing in June, the truclai:ien called a strike and they stop- 
ped every transportation t;l:ia,t t!3.s made by a coat man, that nothing could 
have been moved from a.jiyfactory, from, any business place, to a different 
city. They v.-ere tearing u-i on the street goods, and cutting up piece 
goods, and I was fortunate enough, that about 4 or 5 days before they 
called a strike, that I was living in Perth- Amboy, and I had- transferred 
400 pieces of piece goods, and I did not come in to Eew York.. I stayed 
away from New York_ui^3 till August the 7th. I was conducting my business 
through Perth Amboy and I had my Hew York place practically closed 
except a girl was there jtist to take telephone messages. On August 4th, 
when P-resident Roosevelt signed a Code and it went to effect on Augu.st 
7th, our association notified me by ma^il, that their contract for all 
their members that 'they liad made with the union, that every manufacturer 
man will ha.v'e to register the contractors with the ujiion, for the ujiion 
approval I liad sent a register for my eight contractors and ray ovm place 
in Perth Anboy, and the union had rejected all my contractors, unless I 
will take bade my factory to Baltimore. 

I had ii?sisted throvigh my association, tliat, this is not the time to 
move, in the middle of the season, , They should giv.e me an opportunity to 
finish out the fall season, and after the fall season, I willbe able to 
do so. Mr. told 'me that "Seldin, I had done enough up to now. 

The union toeay is so strong that I don't think I will be able" to make any 
arrangements for you for the futu.ro. The best thing for you is to go over 
to , of the International Ladies Gannent Workers Union. 



-132- 

I called , and I told him that I have an important mat- 

ter to take vci with him, and he mxist cive me an a-.oointment. He told 
me that I should come over to see him. After I got through talking 
on the telephone, I v/ent dovvn there and I told him the story. He felt 
very sorry that I v;as nisfigured. Of course, I did not make any state- 
ment at that time to him that I rras a victim of the union. I told him 
that he had to do something for me, as my family lives in Perth Amboy, ray 
children are going to school, and it vfould he inpossitle fo.r me to make 
any arrangements to move "back to Baltimore, because ray home in'Baltiirore 
is rented out on a lease, and the people will refase-to move in the 
middle of the vyinter, and he has to do something; for me. His answer 
to me,' he says 'Listen Seldin, you know H'"-;,' York. Yoi.i \7ent through a 
lot of trouble. Why don't you listen to me and go back to Saltimore. 
You made all your money in Baltimore, and I thinlc you can do it, and we 
v;ill treat you right. You go back dovm there, and give the people 
back their jobs, and I am going to tell Mr. over there, who 

is a vice-president of the International in Baltimore, that you must 
be treated fair, and I think you will ha.ve a ciiance to make your money 
back, a.nd I v/ill see to it that yov. v/on't regret it, but do me a favor 
do go back to B.altimore't This conversation took -"lace with 
My ansv,'er to was th?.t as long as I cannot ms-ke any better 

arrangements, I will have to accept his proposition, and I will go back 
to Baltimore. He asked rae 'Vfnen v/ill you go, as I went to take it xxo 
with Mr. . I told him that as soon as I leave his office, 

I am going to make the next train to Baltimore and rent the floor space, 
and in a weeks time, I vdll start to operate rny factory in Baltimore. 
He said 'Listen Seldin, before you go aw.y, I A7ant to tell you something. 
When you go back to 3-aitimore, my understanding ydll be with the Balti- 
more Union that any' working can that you had left before you moved from 
Baltimore, you will have to take him back to \7ork'. I told him that he 
was foolish to ask stick a q^uestion, as it was the middle of the season, 
I wanted the workers that I lic'.d before, as I didn't want to start a 
new organization. He asked me if it was agreeable to me to take them back, 
I told him ths.t it was agreeable. 

I went and openad up the place and the ijnion lived np lOOp and they 
sent me everyone of the workers that worked for me, except the cutters. 
I asked Mir. '• ^Wiiy csn't you give me my cutters', 
said 'The cutters are working for different shops and it seems they v;ill 
not let them go. Those shops are not controlled by oiir union, and the 
only thing I can do is to talk to them for you. If they want to YJork. for 
you there aren't any objections to take them in the union. Wo won't make 
and discrimination if they have been working for non-union shops. But 
to make them go back, I don't think at the present time, we can make them 
do so'. So I went back to New York and I took Hew York cutters and brought 
them over to Baltimore and paid them their scale, $50, $55, and $60, and 
paid their eirpense of stopping in a Baltimore hotel. 

In a couple days later Mr, , walks in to see mo. He says 
'Listen, I got something to say. We had passed Sattirday to a meeting 
that you cannot keep any cutters from Hew York here. We lip.ve people 
going around idle here for a long while, V/q will give you Baltimore 
cutters-'. I' said 'Listen , that would be an unfair prop- 

osition to any manufacturer man., I have cutters Vv'orking and ma.rkers, 
and they know just how m\ich yardage to use, and just how to do it. It is 

9714 



^133- 

'the-'nlici^Ue of the seaso'n now, and it vdll caiise me a loss ' to' make a 
"ciianse in mj'' business now.' , ■ 

'• ?IeSaid '^Listen, if u'e can't do nothing els6, I am a cutter by 
■trade '"before I was elected vige president of the International, I 
will promise you two daj^s a week to rvin into your cutting department 
and sixp'ervise it', I says 'Hop q,re you going to do it 7' He said 
'Leave it to me, 'I v/ill do it', Vifell, I tried it out. He sent me a . 
couple of hoys.' They have.no erperiencei They were helpers. One 
fellow ?rorked for $32 a week and the other fellow worked' for $38 a 
week,' One of these cutters was paid, above the sccile and one below,, 
the seals. 'The ffian' that I paid $32 a week, was only entitled to $28, 
and the onQ I paid. $38 to should have gotten 339. 'I did not have any 
objections to pay that fellow $39, btit the uilipn had agreed that $38 would 
be a fair salary for that man. ' I ran the cutting department there 
till December, and I- found it a tremendous loss, because of myself not 
being„there- to take care, and because of the cutters. 

" After tiiat, about the. first of the year, I made a change with the 
union's api-iroval to open my cutting department back in I'ew York, and the 
Baltimore Union, insi-sted thi-.t those two cutters that worked for ne., mxist 
g6 to Hew York to work. I told them at that time , that just as much right 
tliat Mr. • had to give 24 hours notice to the iTew York cutters to 
leave Baltimore, that in View York they .give 24- hours to send the .Baltimore 
cutters back home. Llr, 'told me to leave to him,. , thsit he v/ill. 
straighten things out with Mr, , of the Cutters Union, and that 
everything he will tell Mr. ' . ■' : ■" ■ , will go. 

• The last I heard is from the Code Author.tty, when they examined my 
books and they took liiy payroll 'records .from December 2nd, 1933. T\76 
v/eeks later, they haA notified me, by mail that there is back pa,y that 
sho-al'd be paid to cutters. Sight after I got _ tliat letter from them, I 
went .ovei to see Mr, '. , cojay of mail can be offered as evidence, 
from Mr. , signed by Mr, , th-:.t I was over to see him, 

and told him tMt vdth the arrangements that he iiad made with me in 
August 1953, he told me that he vdll give me a concession of working my 
business in ".lev.' York, and I told him the same. story about the treatment 
that I got with the Cutting Department in Baltimore, He sent a wire to 
Mr. _. in, Baltimore: and he told him to be .over Thursday at 11 o'clcxik 
and he told me to be over at his office at that time. Tie told to 
look into the matter, and tlriat he wants Mr, to tcake more care of 
my business, and see th",t I should be treated right, as he made me a 
proposition that I would get a square deal. Mr. told' him that 

he T/ill try his best to do so. 

So Saturday I Y/ent back to Baltimore, and I got sick with a-ppendicitis, 
I vrent to the hospital and I spent 5 weeks a?ray from business as I was operatec 
on. During that time, the Code Authority was after me, and we wrote 
them and tol them tliat I am not in position to go to any hearings, as I 
liave to be a\/ay from business on accquiat of the operation of appendicitis, 
and this case was Tondo'r Mr, , and Mri bad mcade that 

arrangement for me tliat as I get well, I should come over to see him, 
'I went over to see him and he told me, he sayd 'Seldin, we v/ill have to 
stop your labels, providing you make a settlement v;ith the Code 
Authority', I said, 'Listen, ,1 



iiave an arranj^ement made v/itli , is the head ma.n cf 

the Code Autliority, and he told me thr t he is .voing to talk to Mr. Wolf, 
He is going to Wa3hint.-;ton ^7ith hiin toworrov;, and he ^7ill take it -up v.-ith 
him, and there is no reason T-hy you should now insist on making me trouble, 
a- I cannt -tar:d a:v' r: re tr:'iul=' ^'t the ;-ireBent time'. ?"e said 'Listen 
I am lookin.v iritz it cccorC'i-.ig tri rec-^rds. I ■'^■-ork for the Code Authority, 
Hr. is m;- "boss, he , i.istrr'.cted me, .to go a.nd collebt tli: t money', 

I sa,ys, 'l"ill yov. please do me a f:vor. I vrill show yov. a' copy of a letter 
th3.t I wrote', to , and there is no reason why j'-ou' should insist 

on me right hot;, if I liave to "oay that.mone.r, a,t least I could "be heard 
throu^gh a regular heari.a--;, and not to eiq-lain my story to you, as you 
won't give me any justice, as you told me tlia.t jov. have no a,uth6rity 
to make any decision, except lur, can do it'. He said the only 

thing he ca-n is to make an appointment for a hearing. 

At the same time, the c-i:.tters uxiion of Uew York sent me over g, 
man fro:- the Qutters* imion, hy the name of , He claims he is an 

agent for the vaiion. He vralked in in the middle of the day, and asked 
for me, aiiC". I toJd nim tn^'t I v/as Seldin, s.nd he said he v./aaits to go into 
the emitting c.Goartnent. I as]-:c;d ni^a what for. Ho took out a card signed 
by Lr.' , and ss.id tirat ne must take m.y cutters right now, down- 

stairs. I tol.' ki;v, tk: t he v;ili not go back there, "because I have arranged 
with ";ir, and kr, triat the cutters should-he left 

alone, anc' vs I have ari'anged vith the Code Authority with kr, 
that tiiere is a hea.ring pendin ,, and I iun ready to 'be called at any time 
and there is no reason he should insist on me to give him a check for 
$711, as t"n;.,-c money has' to be tiirned over to the Code Aut"nority, So he 
says 'The hell with the Cod? Authority,, if you don't pay the cutters, they 
can't work', I took-"nim into my office and I s id 'Lool; here, I have 
the corref;;>ToncLence with the Code Authority, witli , and Mr, 

ill Laltiriore ' , And I threw /lim out, The next morning, he comes 
aga.in ■ ?,nd s''" •-• tn-it nr, told liim tli k "ne must get cxitters out, 

or he mu:;t h' ve the o?ll, I -^ient and wired' tne minute he left, "Ir, 

= . I told i'r. that i -^m ni3-,ving tl-ouble with the 

cutters in the union in hew Tork, and tncre is no reason'why he shouldn't 
look ii-to this .proposition, '2\ier\ "ne sends him. a letter, and sends m^ a' 
copy, th'it Ih-ve for ' reference . ':'.<:: letter to is some- 

thing like this. De.ar " : I :!■■-" .^ n<" o '\i±th tne Seldin Com;ijany, Hr, 
Seldin, a.rrange::i.ents that r.fter the s ea.son 'ne.will transfer his cutting 
department "back'to "Balti-.'-ore, and I ?/ant you'to leave Mm alane. 

The next m.ornin. ■ ' t jiat fellov; called o;i me and I showed him the 
letters. He kept thte for a T.'ecl: imtil I h .d to write for my couies 
of letters, ' ' ' 

My.argioment was to. the Cot'.e Authority and to the u.iion, that I am 
a victim of circvanstances and they have iooh.ed into this proposition in 
a, ..different wn,. , 

This , after I -..'e .t over to see him said 'Listen Seldin, 

v/e ar§ interested-in the cuttCrs. 'Jchave passed tliat ' you liave got to 
pay';. .'I told ]k.^ ■ '. t the of^tlie International is 

higher f.ian hiu ■ ..'-' .x 'rko you :x letter, H.e said that he will report 
it to.-fae EnecutivL _o..,*'h on Tnursday night, anc I will hcan' frgm hiip. 
On Thursday I aidn't near from. him. On "Fri^iay I went • to Atl.antic City 



-13.5- 

for the holi'ays, and I ^^ot bac'': lost WecTnesda;;-^ . Ur. came over a.^;ain 

and he said ''YJe have yom- decisio7i. 2he Executive Board .saj^s he nust pay 
the cutters S47 a week, o the rrise I -dll have to take ' them dovm', I said 
'It is no use to fi^Uit, if I have to pay ity.I ran going to pay it', and 
I told him I am goiut" to r.ay it, 

Thursday evenir.5, on tne 20th 01 SeJ tenher , v/h=5n I got hack from the 
hearing, Mr. had visited :;:y place a^ain. He wanted to see me and he 
couldn't wait tiiat lo:ig, and left his card and telephone numher. I 
called him and he nays: 'Listen I want to ha.ve a letter in writing-;, that 
you are payii g the cutters $47 a week*. I said, ' I will not rive you 
any letters in v.Titin,j, My payroll is submitted to the Code Authority. 
If you v^rant to laiow anything, 70U can:3g:etit from them', T>i.',t was the end 
of ti1;T,t, 1 

I WJ.S notified hy registered iriail on Sei^temoer 17th, that a hearing 
will "be given to me on ?e,jtem'bi r 20th at 4:30, I went there and I v/aited 
for about ^valf an hom', A ^'i^'J- came out in the lobby, and call-d for Mr. 
Seldin. I told n.-^r thrt it v.".s ne. She asliedroe. to please v/alk into Mr, 
room. '.Then I wal'Sd into "h-. room, I firirred tMt I v/ill be jiven a 
regular liearing in front of the t':-o associations, and the union, v/ith 
representatives on all sides to listen to my story, I told that to Mr, 
a.nd he said it wouldn't be necessary. Ee asked i.Ir. for the 

file in this case of Seldin Coat Conpany. Mr. bad it with him 
and started to rea.d the story. I let Mr, pixt his statement in, 

and after that Mr. called on me to make my statement. Anything I liad 
mentioned in my statement as far as the union and racketeers, Mr. 
'.vasn't interested in and told the ;irl to keep it out of record. I also 
told Mr, that Mr. made a statement against me where 

the letters of complaint said 'Complaint: Violation against Coat and Suit 
Code charged against you and referred to above is as follows: Wages, Pay- 
roll regulations and labels'. And I t^li Mr, that tmt v^as short 
notice, and that did not {Ive me enough cxj-^lanation to clear myself of 
every charge tht i<?, j:v de againpt me by Mr, v/ith his records, as I 
think nis records are not correct, and I v,'Oixld like to be heard by people 
who would give me n. fair trial, and I Imd menti :ned that Mr, and Uv 

should be present pt anj' statement that I make, Mr. didn't 
give me a tumble. He just ivent and decided it oho way he wished, and I 
told him I shoulc] iiave an opporounity to bring over witnesses to show tliat 
the records are bawled up against me, and he is not giving me a fair hearing, 
as I understood it would be taking place in front of a group of people and 
not like I happened to go to Coney Island and see a sight seeing show, 
and they show me in front a few things, and then they asked for 50^ to shov; 
}.;e things I didn't want to see, and this hearing is just like a sight seeing 
shovi to me, Mr, did not like my s tat erne n J and the minute I told him, 
he ch^inged, and he was acting very sorry of course. I v/asn't sa,tisfied vdth 
it and I vfent back to m.y office, and tho-u.ght it over, and I vrasn't satisfied 
with my treatment, as I '..'asn't treated fair, oj\6 I 7/rote Mr. ■ two letters 
v.'ith checks, they were regi-i-tered letters, and the following moraing I re- 
ceived ail a/iswer from Mr. by ;:ieGsen^,'a- , and his answer and other 
letters concerning this :.r;tter, are an follows; 



-1Z6- 



"Seldin Gort Co. 

3bo WePt TiCtii Street, 

I'cw York City 



SeptemlDor 17, 1934 

Registered Hail 

He turn Receipt Reouested 



Ger^^leuen: 



"As tl-.e resvlt of ■: 
■ ou for the viol tion. oi 
ified below. 



:he Co^.e of 



comlaint h_as been file! against 
Coat :j,nd Suit Industry, as s-oec- 



,"The Code of l-'alr Conipetition- of the Coat' and Suit Industry 
ap-iroved by the President, is -At)w in force, a.Td u:ider Subdivision 
(f ) of Section u of the 'ational Recovery Act 'any violation of 
this' Code in any transaction affectiu;;; interstate or foreign commerce 
is a misdemeanor pimislK.ble hy a. fine of not more than five hundred dollars 
for each offense and e;;.ch day such violation continues is deemed 
p. separate offense" . 

"Under a str, tute enacted by the l^ew Yorl: State Legislat-uxe at the 
recent extraordinary session, it^jasTorovided b.y Ciiapter 781 of the 
sessio : laws that violation of 'any provision of a code of fair com- 
petition after it has been filed vdth the Secratary of State, sho-old 
lilcev/ise be a misdemeanor under the lav/s of this state and subject 
'to similar punishment for each offense, 

"The code of the Coat and Sr.it Industry lias been duly filed with 
the Secretary of State of xTev.' York and the above lav; is now in force 
and effect_and a; --"licable to our inc^astry. It is the duty of the Coat 
a.nd Suit Code Authority to enforce and maintain the provisions of this 
Code, 

"Before decidiv.g what action should be taken ?;ith reference to the 
complaint filed at;j,inst you, v.'e desire to give you a fair and fall op- 
port-unity to make any ansvrer or ejcpla,nation which you desire to make 
with reference to it. You are therefore requested to appear at this 
office on Thursday, Se]'temb-.r tJOth, 1934, at 4 p.m., for that piirpose. 
Please be present a.t that date and hoxir sirice in ca,S0 of your failiire- 
to attend v/ithout due excuse, we s'lall have no a.lternative but to 
pursue the remedies prescribed by haw. 

Yours vary truly 

COAT Aj:!D SUIT CODE AUTHORITY 

GEORGE W. ALGER 

DIRECTOR 

"Complaint: Violation against Coat and Smt Code cli;3.rged against you and 
referred, to above is, as follows: 



Yfages, payroll regnilations and labelc 



"September 20th, 1934 

"I'.r. Alt'er 

c/o Coat d Suit Code Avxthority 

132 \7est olst Street 

New lorl: City 

Dear Mr, Alger :- 

I pm hcrevitli eiiclosin;: you a check for $51,78 on the complaint 
that was m-.ue a^ai-ist j.ie tlis-t we I'^ave ms.de up -iSBQ coats v.dthout 
H, R, A, labels. 

This is a iiiistahe on the Coat crjl Suit Code Authority's part "by 
checkin£i' w_p o^jt -^rodixtion. 

Will ask yoj. please for a recheck in cur production from the day 
that you have issued tiie labels, and we will prove that not one 
garment, left cur -'remises without an IT.R.A, label on it, I -liave 
inspectors from the l',?..A, visiting my place in Baltimore three 
times a week, and they have :aot as yet- fo.und one garment without 
a label, T7e also hive insj-'cctors from the Coat and Suit Code 
Authority visiting ovr Tew York Place and they also failed to 
fiiid a coat without an I'.R.A, label on it. 

There must be som.e mistake somewheres for bringing up such a 
charge against me, as we are at all times reac.y to produce ovx 
books for the Code 'Authority's inspection. 

Very truly yours, 
3, Seldin" 
BS/SP 

RlgISS?>EI) ilAlL 



"September 30th, 1934 

"Mr. Alger 

c/o Coat & Suit Code Authority 

1G2 "'est 31st Street 

llew York City 

Dear Mr. Alger :- 

I vas quite excited v;hen I left your office this evening, Som^ehow 
I did not -.mdorstand exactly your decision, as I only heard lialf 
of v/liat you told me and there are a few things tiia^t I did not opoite 
understand on account of me being so excited. 

I recall one statement you have m-.de that you -.vill give me ten • 
days .from today time to give you a check of $cC'l,47 on back pay 
on the complai:;t ivliich is in yavr iia,nds again" c :;e. 

Taking this into consideration after I got bach to my office, I 
feel that I have ::ia.de a mista'rc in not taking up your decision. 
Therefore, I am herewith enclosing you a check for the full amount 



-138- 



of $831.47, a:au viill ask :v-ou to please not deposit this checl: iritil 
I will ta::e this "up with Mr. E. L. Fries, as I did not exi^ect to ■; 
have tliis charge put against me, othervase I v/ould have more records 
in writing and witnesses to prove that any s tateuent I have made 
before you is correct. 

■. ypry tr.uly yours, 
3. Seld'in" 



BS/SP 

BBGISTS.TiDD TAIL 



"Seldin Coat Co. 
356 ifTest 33th St., 
Hew Yorl: City. 

Gentlemen: 

"I have your t^-jo letters. If yoindesire the issut^nce of lahels 
to you, vie are ohli^ed to require a piayment nov; of the amount which 
under my decision is due your v/orhers and for the labels v/hich you have 
failed to use. 'iie will, however, if you vdsh' to have the case re- 
vie'ved in Yfeshington, agree' to withliold 'distribution of this raonej'' 
pending the deterndnation of your ayipeal, othervdse we sha.ll ha,ve to 
stLspend the issuance of labels and a.dvise Washiiigton tlia.t the case 
is sent to them for prosecution. 

"This appeal must be talcen, if it is to be tal;en, v/ithin ten days 
from this dpte.. Let me Imow ;^0Tir Tiishes. 

"In the meantime I return your checks, and remain., 

VQry truly yours, 

eOAT AlTD SUIT CODE AUTHORITY 

GEOUGE TT. ALff':R 

Director" 

GT/A/Ig 
end, 

Tflicn I went back to my office and I thourfit it over that during the 
time before I will be given another hearing he stopped my labels, and that 
Yi/ould practically put ;;ie out of business in the middle of the season, so 
I went back and sent him the full aiTiount of the claim against me, and 
I asked him to hold those checks until I will talce it vdth the N.R.A. 
headqua.rters, and they should give me a he;:Tir:g and consider my case 
carefully, and if I Imve to pay it, he will have the checks with him. 
The following morning, I got Ms ansv/er by messenger vdth the return of 
the past dated check a,nd also the check for the label, as quoted above. 

If there is another op:portu:'.ity to be given to me, I would be able 
to give evidence and to account for the 2S00 lauels that the Code 
Authority is clia,rgi ng me with. I callecl. Lir. on the telephone 



the same evening, and I told Mm tli't tliey ha.ve a mistake made on 
checking up those la^i^els, and his ansver to me v/as, that if I v/ant 
to have a recheck on ray hoolrs, I will hri.vc to send him a check for 
$50 in advance, and tr.en they v.dll send a, man over to recheck if they 
are correct or not, I insisted tkat I cannot pay for their mistakes 
and he didn't -give me a timhle. On the 21st, on Friday, I tried to 
get Tifolf over the telephone tliree tiiiies, and the ansver from the 
girl -vra-s that he will call me, aaid he never did, 

I woiild like to add this f-oi'ther statement, tliat my arrangement with 
the Baltimore Union heinti tlmt they liad made me to take Baltimore in- 
experienced cutters from Baltimore, is that everything that is cut 
in Ne'7 York "by the Baltimore helpers that they liad given to me, must 
he made hy the Baltimore Union people in Baltimore, We have quo- con- 
tractor in ITcw; Yodi-: t hit 'makes -us ;350 coat 3 a v/eek, This work is cut 
hy Hew York -anion cutters for the contracjt/or in i:e^ York, 

I s'"'ear that everything I saic? in this statement is nothing hut 
the truth. 

Sworn to hefore me this 

day of September, 1934, 



.140- 



EXHISIT "B' 



COLONIAL KIDDIE APP.'ffiEL CO. CASS. 
Af.'^id^.vit of llith,an Levine, Complainant, 

im\l YOKK, N. Y. ■ • . Karch 7, 1935 



I, i'lATHAK LEVINE, bein^: duly sworn deposes n.nd say: 

That I am in partnership with Isidor Edlit? and that since the 
formation of this partnership July I9th, 1934, we have "been engaged in 
the manufacture of children's ski suits, under the firm name of Colonial 
Kiddie Apparel Co. , 1261 Broadway, New York City. That about a month 
ago we started in to m/inufactui'e girls' coats for ages from seven to 
fourteen years \Thich ?;ould brinr"' us under the Code of Fair ComiDetition 
for the Coat and Suit Industry. 

le made apiDlication to the Code Authority of the Coat and Suit 
Industry for labels and were put off for four d-^ys and did not get 
labels until J'r. ilessler of the Kessler Coat Cornpanj'-, 476 Jefferson 
Street, Brooklyn, car contractor, visited the N.P..A. office at 45 
Broadway. 

On the 21st day of February, a Mr, recker and a ¥r. Krause 
visited our place of business ^nd showed credentials of the Coat and 
Suit Code Authority, stating tiiat they had come to settle -orices on 
garments. Vfe did not know v;hat answer to m-^ke to this request because 
we had not received a coraDlnint from emuloyees of the Kessler Coat 
Company or from any other source, and so far as we knew, the employees 
of the Kessler Coat Comoany ''rere receiving code wages. In any event, 
we were responsible and on proTjer showing, ve would be compelled to 
■pay to the contractor enough to cover his overhead and the minimum 
wages provided for in the Code. 

On February 2oth, lAr. Becker returned with a Tr, G-oodstein, 
ue desired more information as to why these t'"0 representatives of 
the Code Authority had been sent to fix prices and the only informa- 
tion we could get from Kir. Becker was that if we did not sign up and 
allow them ^o fix our prices, vre would have to join the Merchants' 
Association and have our help unionized. This st^temeafc was made at 
the first interview with I.'r. Becker and was repeated at subsequent 
interviews. 

On February 27th, we addressed o. letter to the Coat and Suit 
Code Authority and on iJarch 4th received a reply containing a partial 
answer to the questions contained ir.our letter of February 27th, 
larch 5th, we addressed another letter to the Code Authority '"hich has 
not been answered. Cooies of these three letters are attacned hereto 
and made a part of this affidavit. 

On Larch 5th, two representatives of the Code Authority, 



il41- 



h,T. Becker and Mr. Goocititein, .-)=■•;■' in pnoe-wed and demanded thnt ^e 
sign a price settlenent. They -ici vised us to si^n like '^ood 1:0,78' 
or wp would "be forc';d Into thp I.Vrchsnts' As«cci^tion throuf"h the 
Union. We then told t.ifm that /p .'ould not coirnly "ith their re- 
quest and that ive ™oii1l: like ^-o ha.ve, a hearing. 

On the morning of ;.nrch bth, there appeared to our olace 
of business a man vho refused to give his name out said he was a 
member of the Internptional Ladies Garment 'Workers' -Tnion. He asked 
Mr. Edlitz in my oresence if r^e '-^ere a union or an U.'^.-A. shop. ?''r. 
Edlitz said "an iJ.R.A. r.hoTi", This party said "you c-^n p"-ppct a lot 
of trouble this afternoon". l'.;r„ iidlits s-'nt our boy to the '-Oth 
Street Police Station and reiDorted this thrent. 

At nbout ?:3n P.Iv. the same d?y, f'arch 6th, five ' Jgourlllas' 
appeared in our place of business and ordered Sam Littraan, our de- 
sirner, out of the ol_ace, instructine him to go do'vn to the Union and 
see kr, P. luccigrosso. One of tixP 'men "^ho clled himself 'Dave' 
handed me r> card of P. lucci^rosoO vatu l-'r. ?LOsenthal "-ritten above 
it in pencil and 'Dave' written in one corner in uencil and told mp 
to go down to the Union and settle prices there. He also threatened 
to stop the trucionen who- handled our piece goods a.nd finished g---rments 
=Hid said they vould keeo what fei-' heltD '^e had aT^^ay from our Dlace of 
business so that T^e y ould not be able to operate and '"Ould disrunt 
our Spring Season so that we vould be forced out • of thp children's ' 
coat and suit buKinr-ss. 

¥t. Eudy Saivni^it?- of L. Si^ectorr., .57-20 3p..y pgrkw^y, Brooklyn, 
«as present during the second vit-it of Jr. Becker and overheard and 
after?''ards spoke to rae .-^ibout I'r. Becker's statement that if wp did not 
sign up and be 'good boys', -vtr- /"lould be forced to join the Merchants' 
Association and have p~ur help join the ITnion. 



Signed 



Sy.'Orn to before me this 
^day of iv'arch, 1925, 



-142- 



£XHIBIT "C" 

COLONIAL KIDDIE APPAH£L CO. CASE 
A-ffidavit of £d. H. Kraus snd Lou Becker, 
Investif^ators for the Coat 
ajid Suit Code Authority 



Co-unty of 'New York ) 

. : SS 
Stpte of Ne\" York ) 



Edward H, Kraus and Lou Becker being duly si"orn deoose and say: 

1. We are employed by the, Coat and Suit. Code Authority as 
investigators, 

2. On February 2nth, 19S5, Mr. S. S. Elingsberg, Chief Enforce- 
ment Officer of the Coat and Suit Code Authority for the Metropolitan 
Area directed us to investigate the Colonial Kiddie Apparel Coranany 
(hereinafter called Colonial), at 1261 Broadway, Borouirh of I'anhattan, 
City of New York for the purpose of determining whether or not the afore- 
said Colonial was complying with Article IV and A.rticle VII of the Code 
of Fair Competition for the Coat and Suit Industry. 

3. On February 21st, 1G35, we visited the Colonial and presented 
our credentials to I. r, Isidore Edlits, a member of Colonial. 

4. "e thereupon informed Mr. Edlitz the purpose of our investi- 
gation and requested permission to examine the garments manufactured 

by Colonial for the purpose of determining v.'hether or not the piece rates 
paid complied with Article IV. of the Code, Ir, Edlit? refused to permit 
us to examine the garments and/or any prices i*iich he paid to his con- 
tractor for manufacturing these garments, 

5. Mr» Edlitz challenged our authority for the ourpose of 
determining such piece work rates and started he wished the matter to be 
tal<en up with the Regional Compliance Board at 45 Broadway md further 
requested that we hold the matter in abeyance for several days. He also 
stated that he desired to consult his partner as to this matter. 

At no time, did we, individually or together, m,ake any mention 
of the International Ladies' Garment Uorkers' Union, or the Kerch^^nts' 
Ladies' Garment Association, or advise Hr. Edlite with respect to either 



of the above organizations. 



Sworn to before me 

this 15 day of April 1935. 



(Signed) E'dward H, Kraus 
Lew Becker 



(Seal) Harry Zaduk 

Notary Public, C<,ueens Co, "flo, 1795, 'deg. Bo, 5626 
Cert, filed in N. Y. Co. No, 71, Reg. No. 7 Z 40 
Commission expires March 30, 1937 



£:a{i3iT "D" 

CCLOFIAL rllDDIE .'\PP i-Rii:L CO. CAS':^ 

Afficavit of Sara-.iel Goodstpin and 

Lou Lecker, Ii-VPttitV-ntors, 



County of Hew York) 

: SS 
State 01' New York ) 



Sa;nuel Good stein 3nd Lou Pecker bein.f duly sworn deoose and 
say: 

1. '.Ve are enployed b:/ the Coat and Suit Code Autnority as 
invest ie;ators. 

2. On February co, 19?5, Vr. S.S. Klingsberg, Chief Enforce- 
ment Officer of the Coat and Suit Code Authority; for the TetroiDOlitan 
Area, directed us to investis^.te the Colonial Kiddie Auparel Conpany 
(nereinafter called Colonial) 3 at I'-ul j^ro'd'^ay , Porou^jh of ianha.ttan, 
City of I'ew Yox'k, for the purpose of determining ^-hether or not Colonial 
was comx)lying vfith Article IV of the Code of Fair CoFpetition for the 
Coat and Suit Indiistry. 

3. kr, Edlitp, a member of the firm of Colonial, requested 
that ve postpone the matter for 1. fe" days in order to rive him an 
oiDportunity to correspond 'vith .the Code Authority. VJe thereupon left 
the lolace of business of Colonial. 

4. February C3th, 1S35, ^'-p-'-^'-i'in visited Colonial, pxa^ ined 
the nine garments iivhich were submitted to us and calculated the Diece ' 
rates thereon in accordance with Article IV of tae Code. These were 
tabulated and submitted to I't. Edlit?. : r. Sdlit? stated that he 
'■Ished to comm^.Lnicate with the Code Autaority i^dth respect to these 
computations. 

At no time dui'ing our investi-patiois, to T"it: the one on 
Febru-^ry Soth and the on en F'^br'uary <3, 1'9?5, did we or either of 
us mention the International Ladies' Garment .Vcrkers' Union or the 
J/prchants' Ladies' Garment Associating, nor did wp supeest to I r, 
Edlit? that he tpccme affiliated '^ith eitner of these organizations. 



(cif^npd) Samuel Goodstein 
LeT Becker 

Sworn to before me 

this 15 day of April 1935. 

(Seal) Harry Zad^ak 

I'lotary Public, '^^ueens Co. IIo. 1795, ?-eg. rJo. 5626 
Cert, filed in IT. Y. Co. No. 71, Reg. No. 7 Z 40 
Commission e?rpires March SO, 1957 

S714 



-144- 

EXHIBI^ "£" 

COLONIAL KIDDIE APPARiil: CO. CASE 
Statement of Harry Morris 
Investigator 

CUAT AID SUIT CODS AUTHORITY 

March 7th., 19S5, I was assigned by F"r. S. S. Klingsherg to visit 
the Colonial Kiddie Apparel Company, Mr, Klingsoerg explained to rae 
that the firm had written to him and apparently did not understand 
Article IV of the Code or was using this means to postrjone compliance 
with this Article. 

I was instructed to explain in detail to the memhers of the 
firm hoth Article IV and Article VII of the Code and to tell the firm 
that I was there for that purpose, 

I visited Colonial Kiddie ApT^arel Company on I^arcli 8th, ]935 and 
introduced myself to ivr. iiathan Irvine and Mr. Edlitz, merahers of the 
firm and presented my credentials. I e-:plained to then in det^^il 
Article IV and Article ^n of the Code. I called their attention 
to the fact tnat the Kessler Gs^rnent Company and Colonial Kiddie 
Apparel Compa.ny were both violatina; the Code because the Kessler Coat 
Company was not riaying their workers sufficient to enable payment of 
piece work rates in accordance "ith Article lY of the Code, and that 
the Colonial Kiddie Apparel Company was not paying Kessler Coat Companjr, 
their contractor, sufficient to enable payment of Code wages plus 
overhead in accordance with Article' VII of the Code, 

I pointed out to them that Article IV of thp Code requires the 
fixing of piece work rates on garments on a tinsis to yield to the 
workers of average skill of the various crafts lor each hour of con- 
tinuous work, hourly earnings' a,s soecified under this Article, and 
that in order to determine wnether such rates wpre being paid, industrial 
engineers had made a study of the entire industry and had made thousands, 
of observations and based on this studj^, standards had been established ' 
which we wt^re using as a basis to deterraine whether -Droi^er Diece r-^tes 
were paid, I then requested L'r. Levine'and Jr.JLdlit? to sign the 
agreement as originally prepared 'bv lessrs, Goodstein and Becker. 
They both refused to sign that statement stating fiiat the Code Auth- 
ority did not have aCthcrity to tell them to p^ more than the Code 
minimum.. 

(Signed) Harry I.orris 



• 14[>- 



EXHI3IT "F' 



f.':ACK ¥, ¥TJSSMAN 

Cf.T.TlTSiiLLOR AT LIW 

333 WASHIi^fvTON STREET 

BOSTON, MASSACHUSETTS 



May 1, 1935 



Administrator, Apparel Section 

National Recovery Administration 

Washington, D. C. . ■ . 

Dear Sir: 

This letter is in the form of a cor.plaint against Harry Bergson, 
Deputy Director of the Coat and Suit Code Authority Board sitting in 
Boston, ^Massachusetts.' Mr. Bergson is a lawyer and is supposed to sit 
on the board as an impartial nemher. I have in the past reijresented 
manufacturers in Boston before the ooai'd on cpmplaints, and to my mind 
end in my opinion to every person who believes in fair play I think 
that Mr. Bergson sho-old be removed from tn^.b cap-city because of his 
connections with two bodies n-^.rcely the International Coat and Suit 
Union and the Manuf actarers Association composed of a fe^" manufacturers 
in Boston. To my mind it is not in accordance -with any code of ethics 
to be hired by a Union or Association and receive raonev for such, and 
on the other hand hear complaints brought by the Labor Union or the 
Manufacturers Association. It 'i's highly suspicious to say the least 
when his decisions and assessments are not in favor of non members of 
either body to say the least, by the way, two members of the Union 
.and one member of the Manufacturers Association sit on the board, and 
if you or anybody else thinks that a non member of either narty can 
^et justic^and fair pl^y 'f'ith the connectipns between Mr. Bergson and 
other parties, then miracles still happen in this day and age. 

To sum the whole 'situation up I think it is hi,t:hly improper 
for Mr. Bergson to sit on n. board and receive pay from the Union and 
the f anuf acturers Association for matters. He can't to ray mind, deal 
with matters before thf= board fairly especially v'.'hen the Union or the 
Manufacturers Association are interested in the same matter. Therefore, 
I shall appreciate an investigation into this matter so that somebody 
may obtain Justice and be sure that influence is not brought to bear 
in certain matters, and that the Deputy Director can deal with matters 
without fe.ar of losing a very lucrative job from the Union or other 
party mentioned. 

I will be glad' to furnish evidence of this Eitua.tion whenever 
yoa call upon me to do so and I shall expect to hear from this soon, 

' Yours truly, 

iv'ACP: M. MUSSMAN 
/S/ , . 



l . M. Mussraan, Attorney 
9714 



-146- •.■■■ 
EaHIBIT "G" 



COAT £-3 SUIT I':IDUSTRY 

Extract from: 

BRIEI CF TH£ t,£I3£::^b C? THE K£7 JSiiSEi (P. 16 Su;oplementriry 
COAT AiJ) SUIT r^USTRY C^ TU£ NATILUAL Peport, Con.t and Suit 

COAT AxiD SUIT CODE YD ITS AHLT'ISTRAt- Code Hearing, I/^ay 2 

TIGN BY THJi CLD.E AUIH^PITY. ^c 4, 1334.) 

TO: 

GENERAL HUGH S, JOHIJSOK, 

.llaticnal Recover,^'- Act Adininistrator 

1. THJi AGR££i.£HTS B£T,-;£j::i: THE AIEYIC/lN CLOAK MD SUIT KAl^TO-' ACTURER S 
ASSOCIATI02;, lYC, THE I/ERCH^YTS LaRIES GARI.IEIIT ASSOCIATICU, ITJC. , the 
THE IirauSTEIAL Co^^UCIL 0"' CLOiiZ SUIT iY:!D SYIRT fAlTURACT'TRERS, INC., 
AND THE lUTEUilATKlIAL LADIES GY^/EHT ./ORKERS UYilON, AI'O'^UTT TO A 
IviCNoPOLY ARE ARE lU RESTRAIUT UF TRADE. 

Thf-T^' are a set of agrer-ne.'its between said foar associations 
and these -^issociations include in their membership the major portion 
of the coat and suit industry. By the terras of said aereenents which. 
v/ere p-ec!ited. gfter the cog.t ano suit code was ar.onted, a manufacturer 
or jobber r^ust designate vitb nis association .thp nan^s of the contrac- 
tors or sub-n-inu'^cturr rs to vnoFi he "■'ill distribute his '"ork and such 
contractor or suu-manuf -^ctur^r r^uet be a meraber of the Arieric^n Cloak 
and Suit fan^ii'acturers AsB0Ci--tion, luc, "hicn is a 'oarty to the said 
agreements. The designated ccntr-'Ctor or sub-ra^nuf acturer in turn 
cpn only accept work from the jolopr or manufacturer 'J^ho has designated 
him pnd such jobuer cr ri^-iuf pcturer' T.ust be a member of the I'^r chants 
Ladies Garment Associ='tion, Toe, or of the Industrial Council of Cloak, 
Suit and Skirt ■M--nixf'-cturer£, Inc., "-hich are oarties to said agree- 
ment, Furthermore, -a contractor or sab-rannuf acturer, c-^.n only be des- 
ignated -by one joober or -aanuf ■-jct'j.rF r. All mprabers of the American 
Cloak and Suit ; inuf acturers Association, Inc., must fmt)loy only 
■ workers wnc.ai-e memberr, of the Intf--rnation.= l Ladies Garment Workers 
Union, which is a ^T^rty to s-'.io rv~TPement. 

The narpose and effect of these qgrepments is to restrict 
members cf thp» associations and union '-hich -^re parties to the 
agreement from doing any work or ha-', in.^; anjr relations with members 
of the industry who are not members of one of the associations or \mion, 
which are parties to said agreement. Although these agreements are 
signed by the association and not by any of the members thereof, the 
agreempnts provide that even if a member of one of thp associations 
resigns therr-irora, he is bound by thp agreement, ' p.ny members of 
the industry in Ne-r Jersey have no desire to become members of the 
American Cloal-: a,nc Suit Association, Inc., and those who have made 
application nave been held up and > refused, and in many cases where 
the p.p-olication wa.s submitted, they -ere advised that t'ley '"ould have 
to pay $1,160, on to the associatioti before the application could be 
considered, and they would also have to force their employees to 
join the International Lacies Garment Yorkers Union. 



-Il7- 



We submit that these agreeiments amount to a monopoly and 
certainly are in restraint of trade ari.d create unfair competition, 
and their purpose and ultimate effect will lie to ^Dut those members 
of the industry (which include the majority of those in Few Jersey) 
who are not members of the associations which are parties to the 
agreement ;' out of business. 



9714 



-148- 

rHJERAL ArPEl'DIX 

METHODOLOGY AllD THE EIELE ^03 ^^^-RTHEH KISEARCH 



The arep.s covered ''oy this stii.dj'- ai.cl the nethods used in its 
preparation- rare recess^-irily dctermi'ed hy the limitations of time and 
-personnel. It v/as ori:;;ir-ally pla./r.ed that there vrauld he full treat- 
ment of the econopiic a^^.d social prohlems of the v/omen's a'oparel industry^, 
as i.7ell as the operatior. and effect of the "_' .tioi.al Recovery Adrainis-^ 
tration vdth respect to the vjmen's a"'"\i."',rel codes. The personnel avail- 
able lor t.ixF study ui^it, h'^i--ever, \r\s inac-e--ai£.te for coiTTi^ilation of 
data coverin/ all r'ajor phases of the irdasti-y. The plan of the study 
v/as therefore revised to a limited treatnent of certe„i]-i selected topics. 

The suhjects selected for stxxdy vrere chosen on the hasis of tv/o 
primary conrjidsro/oions , - their importnnce to industry and to the govern- 
ment in the event of futuxe autem;'-its at industrial regulation through 
federal law, and the prestimed value of the contrihution to he made by the 
author and ivir, i-.lex Thomson as official eye-v/itnesses and participants 
in the administration of tlie a panel codes, tliro-o^di trea.traent of topics 
upon Tf.fhich their testimony could he considered authentic, or at least 
the exiDression of first-]ia,nd ersonal observations, 

?/ith these co. siderations in mind, the study v/as sliaped to cover 
one major industry prohlem and t'.vn major ac'jninistrative problems. There 
is perhaps no problem a:-- complex, or of as ^reat importance to the 
chief bro.nches of the vonen's o/poarcl industry as the problem of con- 
tractor-jobber rel'-'tionsjiips; ?nd from an admiristrative standpoint 
the problems of ovcrlaroping codes an^' of tn.e delegation of tfedera]. 
power to indu.stry throtvgh the code authority s- stem, were the cause of 
sufficient difficulty under ITHA to V7arra;:t their careful consideration 
in order to obtain guido,r.ce in the formulation of policy in any similar 
venture of the future. 

General and comprehensive treatment of even these limited subjects 
v;as impossible in the tine available, and --/ithout t?ie opportunity of 
con.sulting sources of information ot^ier than those to which access 
could be liad ii ■l7aKhi:-.gton. They vrere therefore "firepared in the form 
of specific case analysis. The study of the contra.ct system ?/as confined 
to the dress and the coat and suit branches of the Industry only; the 
overlaioping "roblem wo.s ill^^strated by recouiiting the eirperience of 
the conflict betvreon the Dress and the Cotton Garment Codes; aa'id the 
renort on the delegation of poi-er was limitedto the questions vhiich 
arose under the Coat and Suit Code. 

V/liile a fairly c -mplete analysis was made of material in NRA files 
bearing on t'le Sjoecific subjects selected for study, it cannot be stated 
with certai-.:ty that all availo,ble pertinent material v/as assembled, due 
to the fact that study uidts were using the files at the same time, 
and it was often difficult t • locate documents l-own to exist, but 
v/hich liad been tenTi;)orarily removed from the files for copying. It is 
not felt, however, that the miissions have been numerous or iniportant. 

The method of rooearch followed was partly selective, in tlaat 

9714 



-149- 



certain material could be located directly, ar-J. M.artly the method of 
pr Dspecting" ill imiciovni territory miicxi mifht or mifht iiDt yield per- 
tinent information. 

iTThile it v/as assumed th t vaiimDle natori \i was contained in the 
files of the former code authorities in Tew Yorl:, and tlie.t consu-ltation 
with trade association a.nd union officials vnuld ;iro'ba'bly lead to the 
u:ic-~verin:3 of a.dditi jn:J d3,ta, these assujiiptions r/ere too incx'olicit t^ 
permit authorization of field v'ork, Even if this had "been --^emitted, 
hov7Gver, any extensive field rnrh' would hcve heen imjo-rssihlo in view of 
the lact thj.t the limited pers:innel of fno study -Ji-.it was ra:re tlia,n 
fully occupied with work in Yfeshin^ton. 

An effort was made tj ohtain suppleinentp,ry dita on the contract 
system throUfSh an arrangement with L'essrs, i.Iorris "'olchin and Julius 
Hocliman, who v/ere to forward material :"btnincd irnr; tlie files of the 
former Dress Code Authority and of the International Ladies Garment 
Workers Union; Prohably due to the prolonged negotiations in the Dress 
Industry uiider the threat of a gencrol stri::e, Y/hich culminated in the 
signing of new collective agreements on iebr-oiiry 20, 1S36, this material 
?/as not received in time to ''oe iised. 

The national Coat and Suit Industry Secjvcry 5-^ard very kindly 
forwarded a large axiount of tabulated material prepared by the Statis- 
tical Department of the former Coat and Suit Code Au-thority. The re- 
stricted nature of this study unfortunately permitted only selected 
parts of these ta."bulations to he used. 

In addition to the soiirces of information .f^iven above, the vo.rious 
reports of the Governor's Advisory Commission, and Levinc's book, 
"The l^omen's C-e.rment Workers", (*) furnished much valua.ble data on the 
subject of the cor.tract system. 

The field for further research on the specific subjects and -.'ithin 
the narrow limited established by this study is relatively small, and 
it is doubtful if the additional material available tlirough a more thor- 
ough examination of iIRA files and a search of other sources, primarily 
code authority files, would prove to be of very great value. (**) The 
limitations of this study, however, con.stitute in themselves a guide to 
the ficPther areas which mp_y be profitably explored. 

In its broad aspects the roblem of contract or- jobber relationships 
is the problem of general industry stability. The con.tract system is so 
interwoven with the complex pattern of forces anx. ;-iressures v/hich com- 
bine to determine the structure and raeclTs/nism of tne wom.en's ap-oarel 
industry as a v/hole, tliat it should not be considered as an isolated 
subject. In this respect the present study is too limited in scope, 
and development of additional informati:n on the other major problems 
of the industry presents a wide field for further research. 'Jor is it 
necessary or desira.ble tlia.t fujrth-er study be crnfined to the womenAs 
a:"iparel industry. The ex;periences of the men's clothing industry, for 

(*) Levine, loc . cit . note p. 1 supra. 

Governor's Advisory Commission, loc . cit . note p. 1 supra. 
(**) See footnote p. 22 



example, considered in conrjerisou with tlis experiences of the vomen's 
a;.:"arel industry, v/ould "iiiu.ouotGdIy --■roduce v^lurblc findings. 

There is t\lso need for i::i jrmatio'i on the inc'ustries allied 
thro-Ut;;h comr/;ercial relationships v/ith the c.-pnarcl industries, Sixch 
questions ''.s ;/roup huyinf - rcisure ' . nd itu eficct u-'on ind\istry staloil- 
ity, and the -'nny complico,ted proTolens of style r.nd seasonality, cannot 
"be a,;;proached from bnc ;-:int of viev; ^f n-nuf - ctT:rers alone; and the 
techi^olo/;';y and distritutin/; ;;irs.ctices of the textile indu.stries must 
also "be considered viiVa rcs]-ect to t_.eir inil\^cnce upon t-ie ap-oarel 
t rade s . 

The present study is lihei=dse limited from the point of viev; of 
the time element. It is possible tnrt true vneasurenents of the effects 
of regulatory mea.sures ado^oted during; ar.d subsequent to the ITEA period 
must await further devclopnents , so thit a hroader perspective ma.y be 
obtained tlu'ou^h study of data cjverin,-; a stiff iciently lone period from 
before IIHA to and including a substantial loost-code period. 

On the administrative problems, final a,nd unqualified general con- 
clusions should n-t be dravrn from the limited ex:';eriences of the dress, 
cotton garment, a: d crat anc. s-.:lt codes covered by this study. Parts 
B and C of this study, in fact, are no mcr- t:ian isolated exairroles of 
particular instances of overl . ^ d::. codes and t.ie alleged irdsuse of 
delegated pov/er, Thero are a-i.ro rtlier administrative problems in 
adoition to those treated herein, e^uch as the problems of administering 
exerarptions , of bu'j.ets and assoEsnents , 3.""'d i^unoj'- others. 

A complete coverp.;c of t'lese s]-.ecific problems v.ould require 
analysis of the experience recorded in the odjainistration of a larger 
'.roup of codes. Other administrativ.-; rrob ems , nuchas the problems 
which arose i:\ the ach;ii.:istr::',tion of eo:cmptions a d of code authority 
budgets and assessments, are closely allied to the 'oroblems treated 
hereiri. If the evidence uoon vCiich fiiture policy may be based is to be 
considered eomplete, it is obvious tjia.t a conngTrehensive study of these 
and other rel.atcd r. .rainistrative -^-roblems is necessary. 



!714# 



OFFICE OF THE NATIONAL RECOVERY ADMINISTRATION 
THE DIVISION OF REVIEW 

THE WORK OF THE DIVISION OF REVIEW 

Executive Order No. 7075, dated June 15, 1935, established the Division of Review of the 
National Recovery Administration. The pertinent part of the Executive Order reads thus : 

The Division of Review shall assemble, analyze, and report upon the statistical 
information and records of experience of the operations cf the various trades and 
industries heretofore subject to codes of fair competition, shall study the ef- 
fects of such codes upon trade, industrial and labor conditions in general, and 
other related matters, shall make available for the protection and promotion of 
the public interest an adequate revie.v of the effects of the Administration of 
Title I of the National Industrial Recovery Act, and the principles and policies 
put into effect thereunder, and shall otherwise aid the President in carrying out 
his functions under the »said Title. I hereby appoint Leon C. Marshall, Director of 
the Division of Review. 

The study sections set up in the Division of Review covered these areas: industry 
studies, foreign trade studies, labor studies, trade practice studies, statistical studies, 
legal studies, administration studies, miscellaneous studies, and the writing of cede his- 
tories. The materials which were produced by these sections are indicated below. 

Except for the Code Histories, all items aentioned beloff are scheduled to be in mimeo- 
graphed form by April 1, 1936. 

THE CODE HISTORIES 

The Code Histories are documented accounts of the foriration and administration of the 
codes. They contain the definition of the industry and the principal products thereof; the 
classes of members in the industry; the history of code formation including an account of the 
sponsoring organizations, the conferences, negotiations and hearings which were held, and 
the activities in connection Aith obtaining approval of the code; the history of the ad- 
ministration of the code, covering the organization and operation of the code authority, 
the difficulties encountered in administration, the extent of compliance or non-compliance, 
and the general success or lack of success of the code; and an analysis of the operation of 
code provisions dealing sith wages, hours, trade practices, and other provisions. These 
and other matters are canvassed not only in terms of the materials to be found in the files, 
but also in terms of the experiences of the deputies and others concerned with code formation 
and administration. 

The Code Histories, (including histories of certain NRA units or agencies) are not 
mimeographed. They are to be turned over to the Department of Cojimerce in typewritten forji. 
All told, approximately eight hundred and fifty (850) histories will be completed. This 
number includes all of the approved codes and some of the unapproved codes. (In Work Mate- 
rials NO. 18, Contents of Code Histories , will be found the outline which governed the 
preparation of Code Histories.) 

(In the case of all approved codes and also in the case of some codes not carried to 
final approval, there are in NRA files further materials on industries. Particularly worthy 
of mention are the Volumes I, II and III vthich constitute the material oflicially submitted 
to the President in support of the recommendation for approval of each code. These volumes 
9768—1. 



,. li _ 

set forth the origination of the code, the sponsoring group, the evidence advanced to sup- 
port the proposal, the report of the Division of Research and Planning on the industry, the 
recomjiendations of the various Advisory Boards, certain types of official correspondence, 
the transcript of the formal hearing, and other pertinent matter. There is also much offi- 
cial information relating to amendments, interpretations, exemptions, and other rulings. The 
materials mentioned in this paragraph were of course not a part of the work of the Division 
of Review. ) 

THE WORK MATERIALS SERIES 

In the work of the Division of Review a considerable number of studies and compilations 
of data (other than those noted below in the Evidence Studies Series and the Statistical 
Material Series) have been made. These are listed belo*?, gr;uped according to the char- 
acter of the material. (In Work M aterials No. 17, T entative Outlines and Summaries of 
Studies in Process , these materials are fully described). 

Indust ry Studies 

Automobile Industry, An Economic Survey of 

Dituninous Coal Industry under Free Competition and Code Regulation, Economic Survey of 

Electrical Manufacturing Industry, The 

Fertilizer Industry, The 

Fishery Industry and the Fishery Codes 

Fishermen and Fishing Craft, Earnings of 

Foreign Trade under the National Industrial Recovery Act 

Part A - Competitive Position of the United States in International Trade 1927-29 through 

1934. 
Part B - Section 3 (e) of NIRA and its administration. 
Part C - Imports and Importing under NRA Codes. 
Part D - E.xports and Exporting under NRA Codes. 

Forest Products Industries, Foreign Trade Study of the 

Iron and Steel Industry, The 

Knitting Industries, The 

Leather and Shoe Industries, The 

Lumber and Timber Products Industry, Economic Problems of the 

Men's Clothing Industry, The 

Millinery Industry, The 

Motion Picture Industry, The 

Migration of Industry, The: The Shift of Twenty-Five Needle Trades Froji New York State, 
1926 to 1934 

National Labor Income by Months, 1929-35 

Paper Industry, The 

Production. Prices, Employment and Payrolls in Industry, Agriculture and Railway Trans- 
portation, January 1923, to date 

Retail Trades Study, The 

Rubber Industry Study, The 

Textile Industry in the United Kingdom, France, Germany, Italy, and Japan 

Textile Yarns and Fabrics 

Tobacco Industry, The 

Wholesale Trades Study, The 

Women's Neckwear and Scarf Industry, Financial and Labor Data on 

9768—2 



Women's Apparel Industry, Some Aspects of the 

Trade Prac tice Studies 

Commodities, Information Concerning; A Study of NRA and Related Experiences in Control 
Distribution, Manufacturers' Control of: Trade Practice Provisions in Selected NRA Codes 
Distributive Relations in the Asbestos Industry 
Design Piracy; The Problem and Its Treatment Under MRA Codes 
Electrical Mfg. Industry: Price Filing Study 
Fertilizer Industry: Price Filing Study 

Geographical Price Relations Under Codes of Fair Competition, Control of 
Minimum Price Regulation Under Codes of Fair Competition 
Multiple Basing Point System in the Lime Industry: Operation of the 
Price Control in the Coffee Industry 
Price Filing Under NRA Codes 
Production Control in the Ice Industry 
Production Control, Case Studies in 

Resale Price Maintenance Legislation in the United States 

Retail Price Cutting, Restriction of, with special Emphasis on The Drug Industry. 
T:ai5 Practice Rules of The Federal Trade Commission (1914-1936): A classification for 
comparison with Trade Practice Provisions of NRA Codes. 

Labor Studies 

Cap and Cloth Hat Industry, Commission Report on Wage Differentials in 

Earnings in Selected Manufacturing Industries, by States, 1933-35 

Employment, Payrolls, Hours, and Wages in 115 Selected Code Industries 1933-1935 

Fur Manufacturing, Commission Report on VJa^cs and Hours in 

Hours and Wages in American Industry 

Labor Program Under the National Industrial Recovery Act, The 

Part A. Introduction 

Part B. Control of Hours and Reemployment 

Part C. Control of Wages 

Part D. Control of Other Conditions of Employment 

Part E. Section 7(a) of the Recovery Act 
Materials in the Field of Industrial Relations 
PRA Census of Employment, June, October, 1933 
Puerto Rico Needlework, Homeworkers Survey 

Administrative Studies 

Administrative and Legal Aspects of Stays, Exemptions and Exceptions, Code Amendments, Con- 
ditional Orders of Approval 

Administrative Interpretations of NRA Codes 

Administrative Law and Procedure under the NIRA 

Agreements Under Sections 4(a) and 7(b) of the NIRA 

Approve Codes in Industry Groups, Classification of 

Basic Code, the — (Administrative Order X-61) 

Code Authorities and. Their Part in the Administration of the NIRA 
Part A. Introduction 
Part B. Nature, Composition and Organization of Code Authorities 

9768—2. 



- iv - 

Part C. Activities of the Code Authorities 

Part D. Code Authority Finances 

Part E. Summary and Evaluation 

Code Compliance Activities of the NRA 

Code Making Program of the NRA in the Territories, The 

Code Provisions and Related Subjects, Policy Statements Concerning 

Content of NIRA Administrative Legislation 

Part A. Executive and Administrative Orders 

Part B. Labor Provisions in the Codes 

Part C. Trade Practice Provisions in the Codes 

Part D. Administrative Provisions in the Codes 

Part E. Agreements under Sections 4(a) and 7(b) 

Part F. A Type Case: The Cotton Textile Code 
Labels Under NRA, A Study of 

Model Code and Model Provisions for Codes, Development of 

National Recovery Administration, The: A Review of its Organization and Activities 
NRA Insignia 

President's Reemployment Agreement, The 

President's Reemployment Agreement, Substitutions in Connection with the 
Prison Labor Problem under NRA and the Prison Compact, The 
Problems of Administration in the Overlapping cf Code Definitions of Industries and Trades, 

Multiple Code Coverage, Classifying Individual Members of Industries and Trades 
Relationship of NRA to Government Contracts and Contracts Involving the Use of Government 

Funds 
Relationship of NRA with States and Municipalities 
Sheltered Workshops Under NRA 
Uncodified Industries: A Study of Factors Limiting the Code Making Program 

Legal Studies 

Anti-Trust Laws and Unfair Competition 

Collective Bargaining Agreements, the Right of Individual Employees to Enforce 

Commerce Clause, Federal Regulation of the Employer-Employee Relationship Under the 

Delegation of Power, Certain Phases of the Principle of, with Reference to Federal Industrial 
Regulatory Legislation 

Enforcement, Extra-Judicial Methods of 

Federal Regulation through the Joint Employment of the Power of Taxation and the Spending 
Power 

Government Contract Provisions as a Means of Establishing Proper Economic Standards, Legal 
Memorandum on Possibility of 

Industrial Relations in Australia, Regulation of 

Intrastate Activities Which so Affect Interstate Commerce as to Bring them Under the Com- 
merce Clause, Cases on 

Legislative Possibilities of the State Constitutions 

Post Office and Post Road Power — Can it be Used as a Means of Federal Industrial Regula- 
tion? 

State Recovery Legislation in Aid of Federal Recovery Legislation History and Analysis 

Tariff Rates to Secure Proper Standards of Wages and Hours, the Possibility of Variation in 

Trade Practices and the Anti-Trust Laws 

Treaty Making Power of the United States 

War Power, Can it be Used as a Means of Federal Regulation of Child Labor? 

9768—4. 



THS EVIDENCE STUDIES SE RIES ■ 

The Evidence Studies were originally undertaken to gather material for pending court 
cases. After the Schechter decision the project Aas continued in order to assemble data for 
use in connection with tne studies of the Division of Review. The data are particularly 
concerned with the nature, size and operations of the industry; and ffith the relation of the 
industry to interstate commerce. The industries covered by the Evidence Studies account for 
Bore than one-half of the total number ot workers under codes. The list ol those studies 
follofs: 



Automobile Manufacturing Industry 
Automotive Parts and Equipment Industry 
Baking Industry 

Boot and Shoe Manufacturing Industry 
Bottled Soft Drink Industry 
Builders' Supplies Industry 
Canning Industry 
Chemical Manufacturing Industry 
Cigar Manufacturing Industry 
Coat and Suit Industry 
Construction Industry 
Cotton Garment Industry 
Dress Manufacturing Industry 
Electrical Contracting Industry 
Electrical Manufacturing Industry 
Fabricated Metal Products Mfg. and Metal Fin- 
ishing and Metal Coating Industry 
Fishery Industry 

Furniture Manufacturing Industry 
General Contractors Industry 
Graphic Arts Industry 
Gray Iron Foundry Industry 
Hosiery Industry 

Infant's and Children's Wear Industry 
Iron and Steel Industry 



Leather Industry 

Lumber and Timber Products Industry 
Mason Contractors Industry 
Men's Clothing Industry 
Motion Picture Industry 
Motor Vehicle Retailing Trade 
Needlework Industry of Puerto Rico 
Painting and Paperhanging Industry 
Photo Engraving Industry 
Plumbing Contracting Industry 
Retail Lumber Industry 
Retail Trade Industry 
Retail Tire and Battery Trade Industry 
Rubber Manufacturing Industry 
Rubber Tire Manufacturing Industry 
Shipbuilding Industry 
Silk Textile Industry 
Structural Clay Products Industry 
Throwing Industry 
Trucking Industry 
Waste Materials Industry 
Wholesale and Retail Food Industry 
Wholesale Fresh Fruit and Vegetable Indus- 
try 
Wool Textile Industry 



THE STATISTICAL MATERIALS SERIES 



This series is supplementary to the Evidence Studies Series. The reports include data 
on establishments, firms, employment, payrolls, wages, hours, production capacities, ship- 
ments, sales, consumption, stocks, prices, material costs, failures, exports and imports. 
They also include notes on the principal qualifications that should be observed in using the 
aata, the technical methods employed, and the applicability of the material to the study of 
the industries concerned. The following numbers appear in the series: 
9768—5. 



Asphalt Shingle and Roofing Industry Fertilizer Industry 

Business Furniture Funeral Supply Industry 

Candy Manufacturing Industry Glass Container Industry 

Carpet and Rug Industry Ice Manufacturing Industry 

Cement Industry Knitted Outerwear Industry 

Cleaning and Dyeing Trade Paint, Varnish, and Lacquer, Mfg. Industry 

Coffee Industry Plumbing Fixtures Industry 

Copper and Brass Mill Products Industry Rayon and Synthetic Yarn Producing Industry 

Cotton Textile Industry Salt Producing Industry 

Electrical Manufacturing Industry 

THE COVERAGE 

The original, and approved, plan of the Division of Review contemplated resources suf- 
ficient (a) to prepare some 1200 histories of codes and NRA units or agencies, (b) to con- 
solidate and index the NRA files containing some 40,000,000 pieces, (c) to engage in ex- 
tensive field work, (d) to secure much aid from established statistical agencies of govern- 
ment, (e) to assemble a considerable number of experts in various fields, (f) to conduct 
approximately 25% more studies than are listed above, and (g) to prepare a comprehensive 
summary report. 

Because of reductions made in personnel and in use of outside experts, limitation of 
access to field work and research agencies, and lack of jurisdiction over files, the pro- 
jected plan was necessarily curtailed. The most serious curtailments were the omission of 
the comprehensive summary report; the dropping of certain studies and the reduction in the 
coverage of other studies; and the abandonment of the consolidation and indexing of the 
files. Fortunately, there is reason to hope that the files may yet be cared for under other 
auspices. 

Notwithstanding these limitations, if the files are ultimately consolidated and in- 
dexed the exploration of the NRA materials will have been sufficient to make them accessible 
and highly useful. They constitute the largest and richest single body of information 
concerning the problems and operations of industry ever assembled in any nation. 

L. C. Marshall, 
Director, Division of Review.