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
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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
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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
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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
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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
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^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,
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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
9714
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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
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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".)
9714
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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.
9714
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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-
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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
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9
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-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
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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
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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
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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
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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.
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