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BOSTON PUBLIC LIBRARY 



3 9999 06317 375 9 



OFFICE OF NATIONAL RECOVERY ADMINISTRATION 
DIVISION OF REVIEW 



MIGRATION OF SELECTED INDUSTRIES AS INFLUENCED 
BY AREA WAGE DIFFERENTIALS IN THE CODES OF FAIR COMPETITION 



(a) Boot and Shoe Industry 

(b) Cotton Textile Industry 



J. Lane 



LABOR STUDIES SECTION 
February 1936. 



f\0M< 



AO.i 



9724 



i 



FOREWORD 



This Study of "Migration of Selected Industries as Influenced by 
Area Wage Differentials in the Code of Fair Competition: (a) Boot and 
Shoe; (b) Cotton Textile" was prepared by Mr» J. J. Lane and revised "by 
Mr. Robert M. Woodbury of the Labor Studies Section, Mr. Solomon Barkin 
in charge. 

The study was designed to assemble and make available to students 
of the problem samples of the 1IRA data bearing upon the effects of code 
wage differentials upon the location of industry. No pretense is made 
that the available data are sufficient to justify definite conclusions. 
The study does, however, indicate the trends in the geographical distri- 
bution of the two industries studied; describe the provisions in the 
codes on minimum wages and wages-above-the-minimum; discuss the effect 
of these provisions governing regional differentials in actual earnings; 
and give considerable information on the geographical distribution of 
business within the industries before and during the NRA. 

The original plan called for an examination of a large group of 
industries and the gathering of data through field work. Limitations 
of time and personnel prevented this original plan from being realized. 

At the back of this reaort will be found a brief statement of the 
studies undertaken by the Division of Review. 



L Co Marshall, Director 
Division of Review. 



February 29, 1936, 



9724 -i~ 



STUDIES CF I :i SEAT ION 0? INDUSTRY 

TABLE OF COTiEIITS 

Page 
INTRODUCTION v 

CHAPTER I. BOOT AID SHOT MANUFACTURING INDUSTRY 1 

I. Trends in the Industry Prior to 1933 1 

II. Wage Provisions of the Boot and Shoe Manu- 
facturing Industry Code 3 

III. Effect of the Code in Altering Existing 

Differentials, ....... „ 10 

IV. Effect of the Code Upon Migration in the 

Industry 20 

CHAPTER II. COTTON TEXTILE I.IANUFACTURING INDUSTRY 25 

I. Trends in the Industry, 1921-22 to 1933-34 25 

II. Wage Provisions of the Cotton Textile Manu- 
facturing Industry Code 32 

III. Effect of Code Provisions Upon Migration 

in the Indus try. 36 

APPENDIX 1 40 



9724 



-li- 



SUMMARY 
CHAPTER I 
Boot and Shoe Manufacturing Industry- 
Trends in the industry prior to the Code showed marked migration 
movements away from Massachusetts and Wisconsin toward Maine, New Hamp- 
shire, and other States, and from the middle sized or larger cities to 
smaller communities. 

The code minimum wage provision set up a differential for cities 
under 30,000 in population and for all the cities in the South of 1-^rf 
an hour lover than in cities of 20,000 to 250,000 population; and for 
the latter, of l\sf: lower than in cities of over 250,000 population. 
The clause regulating wages above the minimum specified that no re- 
duction in rates of pay for unskilled employees should be made. In 
case of all employees receiving more than minimum rates, "equitable 
adjustments" of pay schedules were required. The vague phrasing 
made this provision unenforceable. 

The effect of the code provisions on already existing differen- 
tials in the industry was apparently in the direction of lessening 
such differentials, which evidently existed in favor of the South and 
the smaller communities prior to the codes. The operation of raising 
wages up to code minimum affected a much larger proportion of employees 
in the South and in the smaller communities than in the large or 
medium sized communities. Marked differentials were found in wages 
above the minimum. The code differentials in minimum rates were con- 
siderably less than the differentials in average wages. 

Migration movements from Massachusetts and Wisconsin towards other 
communities already under way before the code went into effect apparent- 
ly continued under the code, though perhaps at a diminished rate. 
Specific data are lacking on actual movement of firms from one commun- 
ity to another. Evidence was also not collected with respect to the 
size of the community from which they went, the size of the community 
to which they migrated, and the specific factors which determined or 
influenced migration. 

The most pertinent data on the effect of the code differential 
upon migration movements indicated a relative increase in employment 
in the cities of over 250,000 population and a relative decrease in 
employment in cities under 20,000 in population. The Southern states 
showed substantially, no shifts in employment in spite of the fact that 
the differential had diminished. Apparently the code differential was 
but a single factor in migration, the net result of which was perhaps 
favorable to the expansion of industry and employment in the larger 
cities as compared with other communities. 



9724 



•-in- 



CHAPTER II 



Cotton Textile Manufacturing Industry 



The trends in the industry from 1921 to 1923 showed a marked 
movement from New England to the South. In the latter part of the 
period, Southern mills had virtually a monopoly of certain of the 
coarser kinds of cloth, while the ITorthern mills were able to com- 
pete and maintain their position in the manufacture of finer weaves. 

The code provision specified a $1 differential per week in the 
minimum weekly wage for 40 hours in favor of the South. The pro- 
vision of wages above the minimum tended to result in a smaller 
differential in the higher wage grouos. 

The effect of the code provision was clearly to lessen the 
existing differentials in wages in the industry. The statistics 
showed that the code minimum meant a larger increase up to the min- 
imum in the South than in the North, and also that the relative in- 
creases in wages in each occupation were considerably higher in the 
South than in the ITorth. Absolute wage rates per hour were lower in 
the South than in the Forth after as well as before the 6ode. 

The code provisions seem to have increa.scd the proportion of active 
spindle hours in Hew England as compared with those of the cotton grow- 
ing states. Part of this change, however, may have been due to a 
curtailment order adopted for the summer months which resulted in a 
greater decrease in hours worked in the South than in the North. 



9724 „ iv _ 



INTRODUCTION 



The study of migration of industry is closely related to that of 
wage differentials. In the process of code making a_-f reryient argument in pre- 
senting the case for or against a specific differential was that the 
presence or absence of the differential (as the case might be) would 
tend to favor one section as against another, and would encourage 
migration of the industry. This argument was offered so frequently 
and evidence that migration was talcing place appeared in some cases 
to be so convincing that considerable weight was given to them in 
determining minimum code rates. Consequently one aspect of the wage 
question concerned the effects of code differentials as measured by 
changes in location of industry. 

Migration of industry for the purpose of this study was not 
defined narrowly as mere physical moving of equipment, dismantling of 
plants in one area and setting up new plants in another. Any evidence 
of shifting of business, changes in orders or transfer of jobs or of 
employment from one section to another was considered germane to the 
subject. The object was to trace the effects of the code wage 
differential in causing or retarding change in the relative position 
of different areas or sections with respect to specific industries. 
The problem was complicated by the fact that relocation of industry 
was influenced by a variety of factors. 

The code differential on minimum wages was a single, and perhaps 
minor, element among the forces affecting the migration of industry 
during the NBA period. Provisions for wages above the minimum were 
also in effect, differentials. However, they were vague and sub- 
stantially unenforceable in many codes, so that their a.ctual effects 
were problematical. In such cases, any existing differentials were 
probably continued. In some codes the wages-above-the-mi:iimum pro- 
visions were more definite. There were effective if observed along 
with the differential at the minimum and with previously existing 
di f f er ent i al s . 

A few cedes had definite methods of pegging wages and wage rates 
for different areas, for specific occupations, or for classes of work 
above the & eneral minimum rate. The establishment of these wage rates 
might be a determining factor in elimination of cut-throat competition 
threatening the industry in its previous locations. In the millinery 
industry, for example, where labor was a large factor in the total 
price, the determination of the proper wage differentials at the min- 
imum and above the minimum was a. major element in regulating competitive 
conditions in. the industry, since alteration of conditions between 

regions might cause migration toward the more favcred areas. 

v 

In some cases the differential provisions, or the absence of a 
differential were written into the code to check threatened demoralization 
of the industry. In no case was the differential written for the purpose 
of introducing changes or forcing a new location of industry; on the 
contrary, in most, if not in all cases the differentials were designed to 
cause no marked changes in the existing location of industry. 



9724 -v- 



Other factors had bearing upon the significance of MA. codes for 
migration. Labor cost was not a controlling clement in many industries, 
particularly in those which were highly mechanized where the overhead 
investment per worker was relatively high. The location of such in- 
dustries was "based upon ether considerations. These industries were 
frequently the least mobile. It was in the industries in which labor 
cost was a major element in cost that migration was found generally. 
In those industries in the wage differentials were more apt to affect 
the location and influence the migration of industry. 

Also the period of MA was characterized by excess of productive 
capacity and infrequent plant expansion. Business was reviving. Only 
in industries where permanent plant equipment was small could one ex- 
pect real plant movement. In most cases, therefore, the major shifts 
were changes in the relative proportions of total production in the 
respective areas. 

Furthermore, since the ERA period was short, the effects were not 
sharply defined nor easily isolated. The MA, too, ushered in a 
period of revival and reversal of previous tendencies was to be ex- 
pected. Consequently the trends and changes in their direction re- 
sulting from code differentials required separation. 

This study was limited to available materials to the MA, and to 
certain special studies which had been made by the ERA. 

The conclusions are mainly negative. In some cases the evidence 
indicated that whatever the effect the code had was opposite to that 
alleged by opponents of the wage differentials. In other cases the 
evidence was too meager for definite conclusion. In general, the 
problem is so intricate as to require for answer exhaustive special 
investigation. 



9724 -vi- 



-1- 

CHAPT3H I 

MIGBATI01T IN TIL "OCT AID -SHOE UAKUF&QTURISG IiDUSTRY 

I. ER31IDS III TEL] IIIDUSTHY PRIOR TO 1933. 

The manufacture of Loots and shoes ^rs one of the first industries 
developed in the United States, ]?rom small individually owned and operated 
shops in Massachusetts the industry progressed until hoots and shoes are 
not manufactured in thirty of the forty-eight states of the Union. 

In 1929 the industry ranked tenth in the number of wage earners em- 
ployed, and eighteenth. in the Value added by manufacture. The importance 
and growth of the industry in establishments, number and v^lue of output, 
wage earners aM^os is- inaica ted in Table I. During the period from 1899 
to 1933 there was notable decrease in the number of establishments and 
increase in pairs of shoes produced. The average number of wage earners 
decreased, the drop in employment between 1925 and 1953 being 7.8 per 
cent, although production increased 8 per cent at the same time. 

According to Table II the number of wage jobs in the states of 
Massachusetts, Hew Hampshire, Ohio, Pennsylvania, and New Jersey declined 
appreciably between 1900 - 1929, Correspondingly, there was an increase 
in the number of wage earners in New York, Missouri, Illinois, Wisconsin, 
and Maine. In general -there -'■ s s westward movement which started before 
the turn of the century 

The decline of the industry in Massachusetts and its expansion in 
other .sections of the country is shown hy the comparison in Table III of 
output from 1899 - 1934 in the principal shoe producing states. 

Detailed data on oroduction for specific years in the nine nrinci- 
pal shoe producing states given in Table IV show further changes in the 
industry. 

The figures for 1927 and 1933 show a decrease in the number and per- 
centage of pairs manufactured in Massachusetts, Ohio, Wisconsin, and 
Missouri* Illinois, New York, and Pennsylvania show slight declines in 
percentage but small increases in actual numbers. Maine, New Hampshire 
and "all others" show an appreciable advance in both number and percent- 
age. The greatest gain both in percentage and pairs produced is in the 
"all others" classification. 

In comparison with the NBA and Census data relative to the shift 
in the industry according to type of locality Table V gives the results 
of Daniel B. Creamer for the Study of Population Distribution. His data 
show a decrease of 7.2 per cent between 1923 and 1933 in the number of 
workers on wage jobs in the Loot and shoe manufacturing industry. The 
changes in the percentage distribution of these wage jobs show the shifts 
in the industry. During this period covered by this table the number and 
proportion of wage jobs decreased appreciably in the principal and satel- 
lite cities and somewhat in the peripheries of (D) cities. There was a 
slight percentage increase in wage jobs in the "industrial peripheries" 
area, in the cities of 100,000 population, and in the industrial counties 
but a substantial gain in both numbers and percentages of wage jobs in 
the "all-the-rest" area, comprising predominantly small cities, towns and 
villages. 



-2- 



IA3LE I 



,001 ALT) :T10E lUHJTACIlRIlTG: Growth of the 
Industry,, 1399-1933 





Number of 


Production, 


Average 




Value 




Establish- 


ITunber of 


JTumber of 


TJages 


of 


Year 


ments 


Pairs 
349,572,751 


Wase Earners 

190.914 


Paid 
$142,054,152 


Products 


1C33 


1,132 


$553,426,166 


1931 


1,156 


515,057,030 


181,374 


153,271,281 


653,879,746 


1929 


1,341 


371.207,607 


205,640 


222,407,732 


965,922,694 


1927 


1,357 


367,067,065 


203,110 


225,090,242 


994,714,463 


1925 


1,460 


323, 555 ,,055 


206,992 


225,787,981 


925,383,422 


1923 


1,605 


351 ,114', 373 


225,216 


'250,345,922 


1,000,078,022 


1921 


1,505 


2£6p771-101 


105,502 


204,954,095 


867,475,896 


1919 


1,449 


331,224,628 


211,049 


210,734,610 


1,155,041,436 


1914 


1,355 


292,656,458 


191,555 


105,695,404 


501,760,458 


1909 


1,343 


285,017,181 


185,116 


92,359,152 


442,630,726 


19C4 


1,315 


242,110,035 


149,924 


69,059,680 


320,107,458 


1899 


1,599 


217,955,419 


141,850 


58,440,883 


258,969,580 



Source: national Recovery Adnini strati on ; Division of Revieu, . 
Report of Survey C0..1 rl btee on the Che rat ion of the Code 
for the Boot and Shoe Manufacturing Industry - July 16, 
1935 - Table I. p. 3„ 



9724 



-3~ 



TA3LE II 

Boot mil Shoe L!aauf acturingS Migration of the Industry 
as Shorm in Civ n ■: s by States, in the Percent Distri- 
bution of T7; , ;-e Earners, 1850-1923. 



Percentage Distribution: Uage Earners 



State 



18 30 1370 1880 1890 1900 1909 1919 1929 



United Strtes 1C0.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 
ilassachussets ' 50'. 5 55 9 7 55.4 50.4 41.4 40.3 38.0 26.8 



iTe-T' York 


11'. 2 


12.4 


12.1 


11.5 


11.1 


11.1 


16.4 


18.0 


Ilissouri 


018 


1.0 


'lei 


lcS 


4.2 


3.8 


8.3 


12.1 


Illinois 


1.0 


1.4 


1.3 


2.0 


3.9 


5.0 


3.6 


7.2 


He 1 .? Hampshire 


3i9 


3.0 


'4.0 


5.9 


3.5 


7.0 


5.3 


7.1 


Ohio 


' 3.8 


2.2 


"2.9 


4.1 


9.0 


OjO 


6.7 


6.0 


■Wisconsin 


0^8 


1.0 


"l.O 


1.4 


1.8 


2.7 


3.5 


5.2 


Pennsylvania 


' 10.9 


9.1 


'7.0 


5.4 


5.4 


5.7 


6.3 


5.7 


Maine 


' 2.4 


2.3 


rr. k 


A P 


4.5 


5.5 


4.7 


4.8 


ITew 'Jersey 


' 2.3 


n o 


3.0 


3.7 


3.1 


2.4 


1.3 


0.7 


All "other ■•■ 


' 12.4 


9.7 


3.2 


8.1 


6.1 


7.0 


5.3 


7.0 



Source: Hoover, E. h. Jr., The Location of the Shoe Industry 
in the United States, in Quarterly; Journal of Eco- 
nomies', Vol, 47, ho. 2, Deb. 1933, p. 255. (The 
table is computed fron data of the U. S. Census of 
i.Irnufrcturen. ) 



9724 



_4- 



tabll; hi 



Boot and Shoe Manufacturing: Changes in Pro-' 
dtuction in Selected States, 1899 to 1934 







Prodi 


iction 






1899 


Per Cent 
Distri- 


1934 


Per Cent 
Distri- 


State 


Pairs 


bution 


Pairs 


t>ut i on 


Total 


217„965,419 


100. 00$ 


357,119,401 


100.00$ 


Massachusetts 


102,732,545 


47.13^ 


71,514,123 


20.05 


Maine „ 


10,748,890 


4.93 


20,966,348 


5.87 


Hew York 


19,453,923 


8.93 


80,529,709 


22.58 


Hew Hampshire 


21,172,691 


9.71 


24,284,602 


6.80 


Pennsylvania 


12 3 473, 055 


5.74 


18,568,868 


5.20 


Ohio 


13,349,679 


6.35 


14,074,679 


3.94 


Illinois 


6,061,982 


2.78 


27,758,929 


7.77 


Wisconsin 


3,552,227 


1,62 


15,797,703 


4.42 


Missouri 


8 i 247, 247 


3.78 


43,798,084 


12.27 


All Other States ■ 


19j 688,179 


9.03 


39,625,356 


11.10 



Source: national Recovery Administration, Division of Review, 
Re-port of Survey Committee on the Operation of the 
Code for the Boot and Shoe Manufacturing Industry, 
July 16, 1935 - Pinal Report, p. 82. 



9724 



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9724 



-6- 



TiffiLE IV (Cont'd.) 



State 



Production (Pairs) 





19 3 5 




Number. 




Per Cent 


(000) 






383,751 




100.00 


26,932 




7.02 


25,541 




6.66 


75,033 




19.55 


43,570 




11.35 


29,954 




7.81 


83,419 




21.74 


16,562 




4.32 


21,345 




5.69 


16,920 




4.41 


43,986 




11.46 



United States 
Illinois 
Maine 

Mas sachus sets 
Missouri 
lew Hampshire 
New York 
Ohio 

Pennsylvania 
Wisconsin 
All Others 



9724 



-7- 

TADLE V 

3 >ot and Shoe Manufacturing: 

Changes in Distribution of Wage Jobs by Type of 
Locality 1329 - 1953 



Uage Jobs 



1929 1933 



Tyne of 
Locality 


Ilumber 


Percent 
Distribution 


Number 


Percent 
Distribution 


United Stater, 


20 5,634 


100.0 


190,314 


100.0 


A-Principal cities 


56,792 


27 e 6 


42,451 


22.2 


B-Satellite cities 


10 s 493 


5.1 


7,444 


3.9 


C-Industrial peripheries 


25,439 


12.9 


25,430 


13.3 


D-Cities of 100 9 000 
population 


6,114 


3.0 


5.843 


3.1 


E-Peripheries of (d) cities 500 


0.3 


394 


0.2 


F-Indus trial counties 


5;. ,429 


25.5 


.50,708 


26.6 


G-All the rest . 


52,706 


25.6 


53,594 


30.7 



Source: Creamer, De i? n . 3= Is Industry Decentralizing? A Statis- 
tic?! Analysis cf Locational Changes in Manufacturing Em- 
ployment 1899-1933. University of Pennsylvania Press, 
Philadelphia, 1935, P. 89. 

NOTE: For the definition of the several area groups 
the reader is referred to the source, p. 6. 
For the pur noses of the present study the shift 
in the industry as shown by the change in dis- 
tribution of wage jobs is the important point 
shoun by the table. 



9724 



-S- 

II. WAGE PROVISIONS OF THE BOOT AND SHOE LAITuFACTURING- 

INDUSTRY CODE. 

The Code of Eair Competition for the Boot and Shoe Industry 
was approved by the President 'on October 3, 1933, and became effective 
ten days thereafter. Article V, Section 2, of the Code prescribed the 
following minirruri hourly rates of pay: 

hales Females 

In cities of over 250,000 population 37 2 ;^ 32-jf 
In cities of from 20,000 to 250,000 popu- 
lation o&-rJ ol\<l: 
In cities of less than 20,000 population 35.^ 30^ 

It provided also that the 35; J ' male rate, and 30^ female rate should 
apply to all cities and towns regardless of size in the following states: 
Virginia, West Virginia, ITorth Carolina, Georgia, Florida, Kentucky, 
Tennessee, Alabama, Lississippi, Louisiana, Arkansas, Oklahoma, and 
Texas.' 

A relatively small proportion, perhaps 5 per cent, of the total pro- 
duct of the industry was produced in these Southern states. A relative- 
ly large proportion, 46 per cent, was produced in cities or communities 
of less than 20,000 population, which were entitled with the Southern 
States, to the lowest minimum rates. Approximately 27 per cent of the 
product was manufactured in cities between 20,000 and 250,000 population, 
while only 22 per cent was subject to the highest differential applicable 
to cities o± over 250,000 population. (See Table VI). 

The adjustment of wages above the minimum was regulated by Article 
V, Section 4 of the Code. (*) This provision merely prevented reduction : 
in hourly rates of unskilled employees receiving more than the minimum 
and prescribed an "equitable" adjustment for all employees receiving more 
than the minimum unless it had already been made. In the absence of any 
clear or legally enforceable definition of eouitable adjustment, the mat- 
ter was left to the good will or interpretation of the employer or to : - 
agreement between the employer and the union. At best the clause proba- 
bly intended maintenance of weekly wages to compensate for the decrease 
in hours; in practice adjustments meant anything between maintenance of 
hourly rates and preservation of weekly pay. 



(*) This Section of the code read: 

"Unskilled employees receiving in excess of the foregoing mini- 
mum ra.tes of pay shall not be reduced; and equitable adjustments 
in all nay schedules of employees receiving more than the mini- 
mum rates shall be made not later 'than 30 days after approval of 
this code by any employers in the industry who have not hereto- 
fore made such adjustments under the President's Reemployment 
Agreement . " 



3724 



-9- 

TA3L2 VI 

BOOT AliD SHOE UMTUFACTURIIIG INDUSTRY 

Trends in Employment as Shoma by Number of Percent of 
Employees, by Size of Cities and by ?.e£icn 



employees 

In all Except Southern States 





ITo. of 
Estab- 
lish- 
ments 


TOTAL 


















onth 


Ivi Citi 
over 2c 


es 
0,000 


In Cit: 
20,000- 


Les 

-250,000 


In Communities 

Under 20,000 


In Southern 
States 


•jar 


No. 


jO 


No. 


-1 

/0 


Us. 


> 


ITo. 


s 


934 


















an. 


675 


150,955 


23335 


18.8 


42194 


23.0 


72854 


48.3 


7522 


05.0 


ab. 


657 


171,614 




20.0 


46904 


27.3 


81282 


47.4 


9045 


05.3 


ar . 


682 


134,158 


36140 


13.6 


50002 


27.2 


88606 


48.1 


9410 


05.1 


■>r. 


723 


139,017 


3698? 


19.6 


51115 


27.0 


21,515 


48.4 


9406 


05.0 


ay 


722 


132,502 


37890 


20.8 


50717 


27.8 


84,530 


46.3 


9357': 


05.1 


une 


743 


180,309 


37205 


20.3 


43257 


26.7 


86 , 232 


4-7.7 


9215 


05.1 


lily 


741 


188,086 


40309 


21.4 


50275 


25.7 


83,050 


46.8 


9442 


05.0 


tug. 


763 


195,765 


41553 


21.2 


52117 


27 . 1 


91,446 


45.7 


3657 


04.9 


•ept . 


722 


132,256 


39124 


21.4 


49496 


27.1 


85,283 


46.6 


9053 


04.9 


let. 


760 


173,129 


39177 


21.0 


47439 


26. 6 


82,433 


46.3 


3 030 


05.1 


"ov. 


748 


169,857 


37175 


21.3 


45862 


27.0 


78,017 


45.3 


8805 


05.2 


«c. 


753 


177,559 


32052 


21 . 


46580 


26.2 


82,857 


46 . 7 


9070 


05.1 


935 

in. 


746 


188,393 


42516 


22.5 


50506 


26.7 


86,351 


45.7 


9520 


05.0 


2eb . 


770 


128,454 


45235 


22.8 


53030 


25.7 


90,408 


45.6 


9751 


04.9 


r. 


751 


192,910 


44530 




54255 


27.1 


91 , 470 


45.8 


9605 


04.8 



Source: National Recovery Administration, Division of Review: Report of 
Survey Committee on the Operrtion of the Code for the Boot and 
Shoe Manufacturing Industry- July 16, 1335 - Final Report. Com- 
piled from Exhibits 3-2. Data one for one week in each month 
specified. The Southern States comprise those listed in the 
code. Ibid. t>. 65 

9724 



-10- 

The influence of this "equitable adjustment" provision upon exist- 
ing differentials in rages above the minimum between unionized and non- 
unionized plants or between plants in larger or smaller cities, and of 
code minimum rates upon existing rage differentials indicated the ef- 
fect of the code upon migration in the industry. 

III. EFFECT OE THE CODE IN ALTERING EXISTING DIF.7EHENTIALS 

Data bearing directly uijon the effect of the code upon exist- 
ing differentials are not available. Wage data taken before the code 
are not classified by size of community. Horever, data shoring differ- 
ences in average rage rates by states and the relation betreen the 
minima and the rage distributions in the different classes of communi- 
ties thror light upon the problem. 

The Report of the Survey Committee on the Operation of the Code for 
the 3oot and Shoe Manufacturing Industry gives the average hourly earn- 
ings for selected states in 1930, 1932, and 1934 (Table VII). (*) 

According to these figures the differential in average hourly earn- 
ings betreen Massachusetts, for example, where the industry is highly 
unionized, and Maine, rith little or no unionization, decreased for both 
males and females. Also the spread betreen the highest and lorest 
states ras less in 1934 than in 1930. (**) Recovery in 1934 under the 
Code brought further reduction in the differential as compared rith 1932 
beyond that occurring betreen 1930 and 1932. 

Data shoring actual differentials under the code are also present- 
ed by the Survey Committee. Average hourly earnings for factory em- 
ployees in the several areas shored marked differentials in cities and 
torns under 20,000. Betreen the cities of over 250,000 and those in the 
intermediate class, the difference in average rates of pay for factory 
workers ras not great (Table VIII). These differences in average rages 
v, T ere greater than the code difierentials in minimum rages and suggest the 
influence of other factors than the code rates. No corresponding data 
are available for the pre-code period. 

The ,_ ide variation in estimated average hourly earnings in cities 
of different classes in the important boot and shoe manufacturing states 
is shorn in Table IX. Thus Massachusetts rith a high average hourly 

(*) Report of the Survey Committee on the Operation of the Code 
for the Boot and Shoe Manufacturing Industry, July 16, 1935, 
p. 86. 



Final Report, Ibid. p. 86. 



3724 



-11- 

TABLE'VII 
BOOT AND SHOE MANUFACTURING INDUSTRY 
AVERAGE HOURLY EARNINGS, BY SEX AND BY STATES, 1930, 1932, 1934 







AVERAGE 


KOTffiLY ■ 


EARNINGS 




1 








M 


ALE 




F E I 


,1 A L E 










1934 


1932 


1930 


1934 


1932 


1930 : 




assachusetts 


57. 5p 


55.7 


67.1^ 


42. 4{* 


35. 4(£ 


44.6$* : 






3W Hampshire 


58.7 


43.9 


50.5 


45.0 


29.1 


34.9 






line 




49.7 


44.7 


51.1 


38.9 


29.9 


36.0 






m York 




61.4 


53.6 


66.6 


44.9 


34.0 


41.1 






do 




54.2 


43.5 


59.0 


39.3 


29.2 


36.1 






mnsylvania 




47.4 


40.8 


51.2 


35.9 


24.8 


33.1 






.sconsin 




56.5 


48.1 


60.2 


• 41.0 


33.6 


40.9 






l ssouri 




52.2 


47.3 


54.8 


- 37.7 


27.3 


32.1 






Llinois 




• 50.5 


42.7 


62.4 


: 37.4 


27.2 


37.6 






SOURCE: 


Report of Survey Committee on the Operation of the Code 
for the Boot and Shoe Manufacturing Industry, NRA Division 
of Review, July. 16, 1935, p. 86. The figures for 1934 are 
based on the special census of wages made for the Survey 
Committee, and those for 1930 and 1932 are derived from 
the B.L.S. Reports on the Boot and Shoe Industry for these 
years. Bulletin No. 579, Wages and Hours, Boot and Shoe 
Industry, 1932, p. 22. 




24 












• 





-12- ' 

rate fpr nales exhibited a range of 4.9^, while Pennsylvania, with the 
lowest state average £o-r ; males, showed "a variation of 14,8tf. Between 
the States the variation in average wages in the largest cities was only 
3.2^, while the variation in average wages in the smallest cities was 
16.9cf, ranging from -45.1$ i in Pennsylvania to 62. u,y. in Hew York. How- 
ever, the averages did not graduate with the size of city. Thus the 
average was higher in the medium than in the large cities in Massachu- 
setts and in Hew York.,., the average was 'highest in the small cities and 
towns. There peculiarities had bearing upon study of migration trends. 

The 'Survey Committee summarized t-ie evidence on migration from 
Massachusetts as follows: 

"The principal shoe centers in Massachusetts from which 
migration has occurred, fell in the code population classi- 
fications of cities from 20,000 to 250,000 end when firms 
move from these cities into locations of less than 20,000 
population, they obtain' an advantage of 1%6 per hour, or 
approximately 4^, in the minimum rate." (*) 

The Committee concludes that: 

"The payroll advantages to be obtained from such moves 
(sde above quotation) were not because of differences 
in the minimum rate, but to lower rates in the higher 
wage classification." (**) \ 

The Committee; estimated that the effect of the differential of l§rf 
per hour applied uniformly throughout all wage classifications for a 
full 40-hour week would amount' to only $50 per week per 100 employees 
affected. 'This sum, they believed "to be insufficient to induce a 
manufacturer to migrate." 

Perhaos the strongest evidence of the effect of code differentials 
upon relative wages in the different classes of community was given in 
Table X, taken from the Report of the Survey Committee. In the boot 
and shoe industry wages were distributed over a considerable range. The 
imposition of minimum rate raised the low paid groups up to that mini- 
mum. The lower the previously existing wages, the larger was the group 
lifted up to the minimum and appearing in the table as a peal: in the 
wage group at or just above the minimum. Evidence, therefore, of a 
large "heaping-up" of wages at or just above the minimum for certain 
communities indicated previously existing low wages. 

Data on wages in relation to the code minimum rates for certain 
post-code period are available from the Survey Committee's report. 
These figures, according to Table X, also show a significant "heaping- 
up" of cases at or just above the minimum rates. Thus, in March 1934, 



(*) Ibid. p. 85. 
(**) Ibid. p. 85." 

9727 



-13- 



TA3LE VIII 



BOOT AID SHOE hAlIUEACTURIE" INDUSTRY 

AVERAGE HOURLY EAEEI1TG-S, 3Y SEX, AED 2Y AREA, TJEEK ENDED JAH.12..1935. 

(In Cents) 



TOTAL 

Cities over 250,000 

Cities 20,000 to 
250,000 

Cities, touns under 
20, 000 ■ 

Six Southern States 



A V E R A -G- E-H-I U R 



I.I ALE 



ALL : 
Emloyees 



Regular 
Factory 
Sr/ployees 



LY EAHHINGS 



i; A L E 



: : Regular 

Office : All rPactory 

Emp loyee s ; Employee s : Employee s 



Office 

Ervoloyee 



56.1 

60.9 
53.5 

. 53.4 

46. 5 



56.9 


57.1 


39.7 


39.9 


42.1 


61.8 


55.3 


42.5 


42.4 


43.9 


50.3 


57.9 


40.7 


40.9 


41.7 



55.7 



46 . 9 



60.3 



51.0 



38.3 



35.3 



38.7 



35.8 



41 . 3 



34.9 



SOURCI 



Pinal Report, Survey Comaittee on the Operation of the Code for the 
Boot and Shoe Manufacturing Industry, July 16, 1935. p. 80 
ERA. Division of Review. 



9724 



-14- 
TA3LE NO IX 

BOOT AID SHOE I ANUFACTURING INDUSTRY 
AVERAGE EARNINGS PER HOUR (ESTIMATED) 3Y SEX, STATE, AND 

SIZE OE COMMUNITY 



State, and 
Sex 



Average Earnings Per Hour 



In Cities of In Cities In Cities Average 

250,000 popu- of 20,000 and Towns All 

lation and 'over to 250,000 Under 20,000 Ccnrrunities 



Eor Hales 
Massachusetts 
Ke" Rs&ra shire 



58.8$* 



uame 


~ 


New York 


61.7 


Ohio 


58.6 


Pennsylvania 


59.9 


Wisconsin 


59.7 


Missouri 


61.8 


Illinois 


56. 5 


For Penal es 





59 . 3$* 


54.4$? 


57.5$* 


64.4 


49.2 


58.7 


53.2 


49.5 


49.7 


58.2 


• 62.0 


61.4 


55.7 


48.1 


54.2 


45.5 


45.1 


47.4 


56.8 


' 50.6 


56.5 


50.3 


49 . 3 


52.2 


49.4 


48.9 


50.5 



Massachusetts 
New Hampshire 
Maine 

Ne-~ York 

Ohio 

Pennsylvania 

Wisconsin 

Missouri 

Illinois 



43.74 



42.6 

42.6 
45.2 
43.7 
42.7 



43.3,? 


40.6$* 


42. 4(. 


49.8 


38.4 


45.0 


43.5 


38.8 


38.9 


41.6 


47.1 


44. 9 


38.7 


34.9 


39.3 


35.7 


34.5 


35.9 


39.0 


37.5 


41 . 


34.6 


35.7 


37.7 


35.9 


36.8 


37.4 



Source : 



Pinal Report, Survey Connittee on the operation of the Code for 
the Boot and Shoe Manufacturing Industry, pp. 73-74. NRA Division 
of Review, July 16, 1935. 



9724 



-15- 

in the large cities 13. op of the male employees "ere in the peak wage 
group of 57: -r to 40,;;, while in medium sized cities the "heapin^-up" of 
12.07-s appeared in the 56ig ; to 37pg class, in the - sf/jall cities and towns 
16. 9$ received 35^ to 36%$, while in the South the percentage was 30. SI 
for the same wage group. This showed the effect of the code provision 
in drawing iot7 wages up to the minimum . 

These percentages indicated also that a. much larger proportion of 
employees ir the South ^ere raised to the minimum than in the North: 
in other words, that prior to the code, a larger proportion of employees 
had heen receiving less than code minimum rates. A somewhat larger per- 
centage of employees in the cities and towns of less than 20,000 were 
raised to the minimum than in the larger cities. As between the medium 
sized and the larger cities very slight differences appeared. 

These detailed figures of Table X furnished evidence also that the 
code minimum provision tended to lessen existing differentials. (*) 
The fact that a much larger proportion of employees in the South than 
in the ITorth had their wages raised to the minimum meant reduction of 
the wages differential as between the two sections. The same was true 
of differences between the smaller and the larger cities. 

Table X also shoved that a, large proportion of wage earners in the 
industry received more than the code minimum rates. This fact suggest- 
ed the relatively minor effect upon the industry of the code minimum 
differentials. In the large cities, where the minimum was 37g^ an 
hour, 32. 5;o of the male earners received more than z .t0^, and the general 
average wage for males './as 56. lr'. (*) 

The Survey Committee's conclusion was that, 

"wage differentials above the minimum have always existed, and 
that the Code was in no way responsible for this situation, 
and if any effect is perceptible it has been to lessen these 
differences." (***) 

All in all, these data showed that the Code differentials at the 
minimum tended to lessen previously existing differentials between 
the Horth and So\ith, and also between the smallest cities and towns and 
the larger urban centres. Probably, therefore, whatever migration move- 
ments were influenced by wage differentials, were affected by the code 
provisions. However, the code differentials at the minimum appeared 
to constitute but one element in a complex of factors that determined 
migration in the industry. 



(*) Its effect was apparently in the same direction with respect 
to wages above the minimum. 



(**) See Table VIII. 
(***) Op. cit. pp. 35-86 
9724 



-16- 



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-20- 

IV. EFFECT OF THE CODE UPON MIGRATION IN THE INDUSTRY 

Uoon the auestion whether the differentials introduced into the 
code for the Boot and Shoe Manufacturing Industry exercised any effect 
upon migration in the industry there were t r, '0 sources of evidence. 
There was testimony of cases in which establishments moved from one 
locality to another and there was evidence from statistics of changes 
in volume of production. 

At a hearing on the effects of the code held by the Code Authority 
of the Boot and Shoe Industry at Washington in January, 1935, the 
statement was repeatedly made that the minimum wage differentials of the 
Code were a basic cause of migration of the industry from Massachusetts. 
Other testimony indicated that movement away from large shoe centers to 
more sparsely settled communities was influenced also by offers of free 
buildings, tax exemption, and in some instances, outright gifts of 
money. 

The detailed evidence showed that in 1934 fifteen slants moved 
from various cities in Massachusetts to smaller communities in 
New Hampshire. The latter State of New Hampshire had only four cities 
with a population of over 20,000. Only two of them, Manchester and 
Nashua, were shoe manufacturing towns. Many shoe manufacturers moved 
from Massachusetts to Maine, where the Union was weaker than in 
Massachusetts and where cheat) labor was available. The movement was 
apparently away from shoe centers with fairly strong labor organiza- 
tions to communities that ^ere relatively unorganized. 

In Missouri, Ohio, and 7/isconsin there "as a movement away from 
the recognized shoe centers into rural communities, where the companies 
were assured of cheap labor costs and "protection" from labor organizers. 

The industry was also beginning to develop in Tennessee, Virginia 
and West Virginia, previously not shoe producing states. Inducements 
by small town civic organizations and chambers of commerce were added 
inducements to manufacturers to go there. 

The evidence at the Hearings was presented by interested parties 
who wished to show that the large shoe producing centers of Massachusetts 
were handicapped by the differential. Specific evidence upon the 
actual effect of the code differential, however, was meager. The fact 
of other inducements besides the wage differential, sometimes of them- 
selves sufficient to account for the migration, must be taken into 
account in drawing conclusions. Furthermore, these migration movements 
towards the Western States and the smaller centers were in the same 
general direction as the trends prior to the code. Hence it is diffi- 
cult to isolate code influences from those antidating the code 
provisions. 

Other factors in or inducements to migration from Massachusetts 
cities to other areas were listed by the Survey Committee on the 
Operation of the Code for the Boot and Shoe Manufacturing Industry as: 
(l) labor disturbances, (2) the necessity to reduce manufacturing 
expenses and obtain lower labor costs in order to meet severe price 
competition, (3) the location of manufacturing plants from the long 

9724 



-21- 

range point of view, in or near the principal market, and (4) induce- 
ments' offered to Massachusetts manufacturers by cities and towns 
located in otner states. (*) With regard to the last mentioned point 
the Committee stated, 

"These inducements usually vary in form, "but comprise 
among others, free taxes, free rent, donations of factory 
'sites and/or property, and frequently outright cash sub- 
sidies. Also, in many cases capital is contributed by the 
townspeople by subscription to the firm's securities. The 
Committee does not believe this to be very significant when 
viewing the industry as a whole." 

The Survey Committee reached the general conclusion, already noted 
above, that they "did not believe that the Code differential in mini- 
mum wages was a very significant factor contributing to migration from 
Massachusetts. They held that the possible difference in costs was 
insufficient to induce a manufacturer to migrate." (**) 

This conclusion seems mo^e cautious than the facts seemed to 
warrant. The evidence indicated that the Code differential was not a 
new handicap to the larger cities. On the contrary, because it was 
less than the existing differential, it tended, if anything, to retard 
migration to the smaller cities and towns by requiring of them greater 
wage increases than in the larger cities. This effect of the code 
was borne out by the previously mentioned fa,ct that the post-code 
'differentials as" between States were less than the pre-code. Though 
these changes may not hive been sufficient entirely to stop the migra- 
tion movement away from Massachusetts, their effect was apparently to 
make conditions less unequal. 

Had the code been written without differentials, however, the 
restraint upon migration from Massachusetts might have been greater, 
although other factors tended to encourage transfer. The Administration 
policy gave evidence of awareness of the effect the differential was to 
have. The letter of transmittal for the Boot and Shoe Code states, 

"IThile the differential in wage rates for cities of 
different size is not common to codes, the amount of the 
differential provided in the Code is far less than the 
differential which, as a fact, has existed. It is believed 
that failure to recognize certain cost disadvantages of smaller 
communities "'ill disrupt materially the competitive situation in 
the industry and might result in an appreciable shift in the 
industry. " (***) 



(*) Ibid, pp. 87-89 

(**) Ibid, pp. 86-87. 

(***)Codes of Fair Competition, Vol. I., p. 543. 

9724 



-22- 

The differential was apparently included in the code in order not to 
impair the competitive position of the smaller towns and pities. So 
far as a differential to protect the industry in Massachusetts was 
concerned, the Administration was presumably not ready to approve a 
differential for a single state. . •• '■•'■ 

Statistical evidence of shifts in production as an indication of 
migration of the industry have been presented above in Table IV. The 
table shows that the trends in production for 1932, 1933, and 1934, . 
followed previous tendencies. Massachusetts lost further ground, her 
share in production for the three years covered in the table falling 
from 23.64 to 21.40$, to 20. 06^, and continuing to drop to 19.55 in 
1935. Maine, a state <"ith small centers, increased its percentage dur- 
ing the same period from 5.72 to 5.77, to 5.87 and to 6.66. 
New Hampshire increased its percentage slightly between 1932 and 1934, 
but the next season in 1935 reached 7.81 per cent. Hew York fluctuated, 
decreasing its percentage in 1933 as against 1932, arising again in 
1934, and falling off again in 1935. Wisconsin increased between 1932 
and 1933, but lost ground in 1934 and 1935. 

Of greater significance were figures given* by the Survey Committee 
showing changes mcnth by month in the numbers and proportions of 
employees in different community classes from January, 1934, to March, 
1935 (Table Vl), This table indicated that in the Southern States 
which appeared to enjoy the largest differential advantage prior to the 
Code, and continued to have some differential under the code provision, 
the number of employees increased from January, 1934, to March, 1935, 
but the proportion of the total wage earners in the industry who were 
located in the South actually dropped. Relatively the South did not 
hold its own as the industry expanded in its recovery from the de- 
pression. 

The small-sized cities which had a differential under the code 
apparently somewhat smaller than the pre-code differential experienced 
a proportional decline in employees from January, 1934, to March, 1935. 
The largest centers increased their proportion of employees correspond- 
ingly, during the same period. (*) 



(*) The question presents itself whether the trend and percentages 
shown in Table VI could be due to a biased selection of data in 
the statistics obtained by the Survey Committee. If the data in 
the early period, January-March, 1934, were a smaller proportion 
of the total than the data in the later period, and the data in 
the early period were biased in the direction of including too 
large a proportion of the industry in the small cities and in the 
South, part of the trend away from the small cities and away from 
the South might be due to the more complete coverage of the in- 
dustry in the later months. The data in the early period were 
apparently a slightly smaller proportion of the industry than in 
the later period. The number of -establishments covered varied 
from 676 in January, 1934, to 657, 682, 723, 722, and 749 in suc- 
cessive months, but after June varied between 729 and 730. If 
(Footnote continued on following page) 

9724 



-23- 

(*) Footnote Continued 



the coverage during the later period may be estimated at nine-tenths, 
that during the early period to May, 1934, may be estimated at between 
four-fifths and nine-tentns. So far as concerns bias in the direction 
of including relatively too large a proportion of the industry in the 
South and in the smaller citier in the early months as compared with the 
later, this is improbable; it would appear to be' easier, statistically 
speaking, to obtain full coverage of the industry in the larger centres 
than in the small citier. or in the South. 

The Census Bureau estimates that after the first three months the 
coverage of the industry remained approximately stationary at about 90 
per cent. (The 756 establishments included in the report for April, 
1935, employed 138,-785 workers. The 1929 Census of Manufactures listed 
1,340 establishments in the industry, of which 574 had 11,015 employees 
and 766 had 194,625 emoloyees. Final Report, Survey Committee, pp. 60-61.) 

Estimates of the Bureau of labor Statistics on change in volume of 
employment based on a sample comprising roughly between 55-6J per cent 
of the industry show the following figures for employment by months 
beginning with January, 1934: 171, 80C; 190,500; 196,000; 196,000; 
194,100; 184,500; 189,200; 195,400; 131,800; 175,000; 169,700; and 
176,200. 

The figures for the first three months of 1935 were 185,000, 192,800; 
and 195,800. These figures are ba,sed on a series of chain relatives 
which have to be adjusted from time to time to accord with the results 
of the biennial censuses: they need to be raised by approximately 10.8 
per cent to agree with the 1933 census results. Comparing these 
unadjusted figures "vit h the totals of Table VI indicates that beginning 
With perhaps June and certainly with July, 1934, the two tables sub- 
stantially agree and that the -Census Bureau estimate of 90 per cent 
coverage (91,92$) was approximately correct. 

From June, 1934, the number of establishments covered by this Survey 
varies slightly,' as follows, 749, 741, 763, 729, 760, 748, 753, 746, 
770, 751, 756, , — the maximum range of variation during this period be- 
ing only 41 establishments, and the first figure for April, 1935, being 
only 7 greater than the initial figure for June, 1934. TThile the 
figures disclosed some fluctuations, it appears that the group of 
establishments reporting to the Census had become substantially stabi- 
lized. Ho large increases in number of establishments occured after 
June, 1934, nor werb there any large decreases. For this period, there- 
fore, the possibility of confusion arising from addition of a large 
./roup of establishments to those reporting for the large cities seems 
remote. 

So far as evidence of the increasing coverage of the industry is concerned, 
the weakness of the evidence is that the total employment in the 
industry has to be estimated from the 55 or 60 per cent sample, and cor- 
rected by the aforementioned adjustment. On this basis, the percentages 
of coverage beginning with January, 1934, were 81.0; 35.5; 87.0; 89.2; 
37.1; 91.0; 92.1; 92.~9; 93.3; 94.1; 93.0; 93.8; 94.5; 95.3; and 94.4. 
Beginning with June and July, 1934, the change in percentages is slight. 
Furthermore, such change as appears is probably well within the margin 

(Footnote continued on following page) 
9724 



-24- 

This evidence confirmed the conclusion that the code 
differentials lessened the previously existing differentials and 
dis nosed of the claim that the wage differentials of the code were 
harmful to those narts of the industry that were located in the large 
cities of the North, There was no evidence that they were injured by 
the code. On the contrary there is some evidence that they prospered 
relatively more than the other sections of the industry. 

The net result of the code rates was to lessen the differential 
previously existing in favor of the small towns and villages and against 
the larger cities. The code differential "by requiring more wage in- 
creases in the smaller cities operated, to lessen their advantages and 
tended to restrain the movement of the industry toward these centers. 
Though the industry in the largest centers would doubtless have bene- 
fited more by the complete absence of a differential, the reduction in 
the existing differential served to lessen the disadvantages under 
which these centers had been operating. 

However, the migration of the industry from Massachusetts 
persisted. This continued a long historical trend and. was doubtless 
due to a number of causes. The evidBnce as to whether it was exclusive- 
ly or mainly from the larger cities of Massachusetts or partly, eaually 
or preponderantly from the smaller cities was inconclusive. Detailed 
data other than labor costs were needed to determine the extent and 
causes of such migration movements. 



(*) Footnote Continued 

of error in the basic figures, which, as already noted, required a 
ten per cent adjustment between the 1931 and the 1933 censuses. 

The point to be eirohasized is that the conclusions already drawn as 
of the -period beginning with January, 1934, are also true of the 
■period beginning with June and July, .1934, though the changes are 
less marked; the percentage of the industry, as measured by employ- 
ment, in the South and in the smaller centers, declined while the 
percentage in the large cities increased. There is no evidence of 
any shift toward the South or towards smaller cities and towns; the 
evidence, such as it is, points rather in the other direction. 



9724 



-25- 

CHAPTER II 

MIGRATION IS THE COTTON TEXTILE INDUSTRY 

I. TRENDS IN THE INDUSTRY, 1921-22 to 1933-34 

The cotton textile industry was centered in the Southern States 
and in Ne^ England, with a gradual drift from He-' England to the South. 
vThereas the South produced about 50 percent of the value of cotton 
products in 1922, it produced about 70 percent 10 years later. (*) 

The total number of active spindles in the United States declined 
from about 36,000, OQO in the crop year 1921-22 to 27,000,000 in 
1932-33, as shown in Table I. Regionally the entire decline was con- 
centrated in New England and the Middle Atlantic States. In New 
England, the number of active spindles fell from about 18,000,000 in 
the former period to less than 8,000,000 in the latter. On the other 
hand, active spindles in the cotton .growing states increased during 
the same time from about 16,000,000, to around : 18, 000 ,000. 

The total number of spindles in place in' the United States also 
declined between 1921-22 and 1933-34 (Table II). There was the same 
pronounced decrease in the Hew England area and increase in the cotton 
growing states as in the case of active spindles. 

The number of wage earners in the cotton textile industry was 
reduced by 20 percent d iring the 6-year period 1923-1931 (Table III). 
From an annual maximum of 471,000 workers in 1923, the number of em- 
ployees dropped to 330,000 in 1931, increasing again to 379,000 in 
1953. The decrease in He- England was 53.8 percent during the period 
under consideration, w.iile in the South there was an actual increase 
over the same period of 17.4 percent. 

The detailed changes in employment for five He" England States 
and five states in the South, given in Table IV, represented qualita- 
tive as well as quantitative changes. The Southern mills were gradually 
taking over an increasingly larger proportion of the simpler and cheaper 
cloths, while the- Nothern mills tended to concentrate upon the more 
intricate and fancy products. 

The. situation in tine pre-depression period was summed up by 
Professor !urchison in the following terms: 

"Hew England has retained the manufacture of the finer constructions. 
This is not to say that the South does not turn out fine goods in 
large volume. There are many Southern mills "hose ability to make 
the finest goods is no less than that of the best Ne 1 " 7 England mills; 
but in the manufacture of these fine goods the labor cost differ- 
ential is of less importance than the skill of management and the 
quality of the machinery. Hence their drift southward will be at a 
slower rate, awaiting the training of personnel and the develop- 
ment of techniques." 



(*) Cotton Textile Industry. Message from the President of the United 
States transmitting a Report on the Conditions, etc.; Senate Doc- 
ument No. 126, 74th Congress, 1st Session, p. S7, 

9724 



-26- 

■-.. TA3LE I .. 
COTTCIJ TEXTILE HiDUSTItY 
ACTIVE SP I IDLES,. 3Y HEGIpIIS, 1921-34 



Active Spindles (in thousands) 



Crop Year 



United 

States 



ije^ 
England 
States 



Cotton- 
growing 

States 



All Other 
States 



1921-22 
1922-23 
1923-24 
1924-25 
1925-26 
1926-27 
1927-28 
1928-29 
1929-30 
1930-31 
1931-32 
1932-33 
1933-34 



35,707 
.36,260 
35,849 
35,032 
34,750 
34,409 
33,569 
32,417 
31,245 
28 , 979 
27,271 
26,894 
27,742 



17,938 
18,053 

17,066 

15,975 

15,525 

14,b95 

13,815 

12, 557 

11 , 351 

9,655 

8 , 565 

8,205 

8,457 



15,906 
16,310 
16,944 
17,292 
17,574 
17,893 
18,281 
18,540 
18,585 
18,073 
17,629 
17,928 
18,511 



1,862 
1,895 
1,839 
1,764 
1,650 
1,520 
1,472 
1,338 
1,307 
1 , 251 
1,076 
760 
773 



Source: Cotton Textile Industry, Message from the President of the 
United States, transmitting a report on the conditions and 
problems of the Cotton Textile Industry, made by the 
Cabinet Committee appointed by him. Senate Document 
Ho. 126 (74th Congress, 1st Session) Table 12, page 48. 



9724 



-27- 

- " TABLE II 

COTTOli TE XTILE INDUSTR Y 

S? I IDLES IN PLACE 
1921 - 1934 



1921 - 


22 


1922 - 


23 


1923 - 


24 


1924 - 


25 


1925 - 


26 


1926 - 


27 


1927 - 


23 


1928 - 




1929 - 


30 


1930 - 


31 


1931 - 


32 


1932 - 


35 


1933 - 


34 



SPI NDLES IF PLACE I F THOUSA NDS 

United : New England : Cotton-groping : All other 
States : States : States : States 



36,945 


18,856 


16,074 


2,014 


37,408 


13,930 


16,458 


2,020 


37,804 


18,575 


17,226 


2,002 


37,928 


15,332 


17,634 


1,951 


37,586 


17,946 


17,874 


1,765 


36 , 695 


16,871 


18,169 


1,555 


oo , o«j>y 


15,463 


18 , 508 


1 , 568 


34,319 


14,548 


18,348 


1,422 


34,024 , 


13,478 


19,122 


1 , 423 


32, 573 


12,167 


19,103 


1,396 


21 , 708 


11,373 


19,137 


1,197 


50,892 


10,810 


19,052 


1,030 


30,942 


10,582 


19 , 330 


1,029 



SOURCE: Cotton Textile Industry, Message from thp President of the 
U.S., transmitting a report on the conditions and problems 
of the Cotton Textile Industry, made by the Cabinet Committee 
appointed by him. Senate Document No. 126 (74th Congress, 1st 
Session) Table 11, page 46. 



9724 



-28- 

TA3LE III 

■ COTTON TEXTILE MILLS 

/AGE EA3HERS £1 PLOYED, 3Y REGIONS, 
CENSUS YEARS 1921-33 



United Hew The All 
Year Stp.tes England South Other 



1921 412,058 185,941 178,732 47,385 

1923 471,503 194,891 219,207 57,405 

1925 445,184 154,074 228,771 52,339 

1927 467,596 154,634 260,713 52,249 

1929 424,916 127,041 254,839 43,036 

1931 329,962 90,127 208,664 31,171 

1933 579,445 90,596 256,838 32,011 



Source: Cotton Textile Industry, Message from the President of 
the United States, transmitting a report on the condi- 
tions and problems of the Cotton Textile Industry, made 
by the Cabinet Committee appointed by him. Senate Docu- 
ment No. 126 (74th Congress, 1st Session). Table 17, 
page 52. 



9724 



Year 



-29- 

MBLE IV 

COTTON TEXTILE MILLS 

WAGE EARNERS EMPLOYED, BY SELECTED STATES, 
CENSUS YEARS 1921-1953 



Connecti- 
cut 



ame 



Massa- 
chusetts 



New Hamp- 
shire 



"Rhode 
Island 



14,279 
14,865 
12,020 
12,639 
10,789 
10,165 
9,667 



22,733 
18,516 
14,745 
14,722 
13,769 
10,663 
10,983 



29 , 328 
33,993 
29 , 275 
26,203 
21,833 
13,089 
13,077 



1921 
1923 
1925 
1927 
1929 
1931 
1933 



13,264 
13,810 
11,851 
10,195 
(1) 9,862 
9 , 220 
11,446 



106,337 
113,707 
96,182 
90,875 
70,788 
46,990 
45,418 









North Car- 


South Car- 


Vir- 


Year 


Alabama 


Georgia 


olina 


olina 


ginia 


1921 


18,275 


35,237 


66,316 


51,509 


7,395 


1923 


20,325 


47,479 


81,041 


62,479 


7,883 


1925 


21,607 


48,612 


84,139 


66,378 


8,035 


1927 


24,825 


56,607 


95,786 


75,069 


8,426 


1929 


27,724 


55,368 


91,844 


71,731 


7,672 


1931 


24,097 


44,102 


73,508 


53,777 


7,130 


1933 


28,762 


57,238 


87,709 


74,593 


8,536 



(1) Maine, lb establishments, Vermont, 3 establishments. 

Note: The figures for the South are compiled from the data of the 5 
Southern States shown. The figures for New Englmd are com- 
piled from the data of the New England States shown. The 
figures quoted for all other States ore compiled by deducting 
the sum of the data for the South and New England from the 
total for the United States. 



Source: Cotton Textile Industry, Message from the President of the 
United States, transmitting a report on the conditions and 
problems of the Cotton Textile Industry, made by the Cabin- 
et Committee appointed by him. Senate Document No, 126 
(74th Congress, 1st Session) Table 17, page 52, 



9724 



-30- 



"The South was in 1923 mailing 84 percent of 
the shirtings in yards; 82 percent of the 
print cloths; 74 pprcent of the shirtings; 
71 percent of the ginghams; 87 percent of 
the denims; 94 percent of the drills; 83 
percent of the yarns made for sale." (*) 

A graphic picture of the closing down of mills in Hew England 
painted "by the editor of The American ",7ocl and Cotton Reporter, and 
quoted "by Professor Murchison showed migration movements in the 
industry prior to 1929, It painted conditions in Fall River, New 
Bedford, and Lowell, Massachusetts, during the pre-depr'ession period 
in the following terms: 

"Fall River, once the richest cotton manufacturing 
city in the United States with more than four mil- 
lion spindles and the equivalent of more than 10.0,000 
looms, is now operating a good deal less than 25. 
percent. Thousands of operatives have been thrown 
out of work, hundreds of thousands of spindles have 
been scrapped or abandoned. " 

"The Ancona Company with nearly 1^00 looms and 

complementary spindles the Arkwright Mills of 

about 70 J 90Q^5.pindlas-^nd- about -1500 looms " 

"Conanicut Mills, one of the old Fall River cor- 
porations the Globe Yarn Company,' with 54,000 

spindles the Granite Mills with about 125,000 

spindles and about 3,000 loons " 

"The Mechanic Mills with 60,000 spindles 

and 1,500 looms... the Merchants Manufacturing 
Company. . . " 

"The Pocasset Manufacturing Company with 
125,000 spindles and 3,000 looms.. the Sanford 
Spinning Company with ne-u-ly 50,000 spindles... 
the Seaconnet Mill with about 75,000 spindles 
and 1,700 looms... the Stafford Mills with 115, 
000 spindles and 2,700 looms... the Tecumseh 
Mills with 80,000 spindles and 1,700 looms... 
(are all) out of business." 

"In Fall River in addition to those mills named 
above that have actually gone out of business, 
there are other large mills that are running 
very slack or have partially liquidated." (**) 



(*) Murchison, Claudius T. King Cotton is Sick, p. 36, 

University of North Carolina Press, Chapel Hill, 1930. 
(**) Ibid, p. 24. 

9724 



-31-. .. 

"l T ew Bedford used to be the great fine cotton 
goods manufacturing center of the country.... 
Today, however, conditions in Nen Bedford have 
changed. The great Fairhaven J ills with more 
than 2001,000 spindles on fine combed yarns is 
"holly out of business. The great i anomet 1 'ill 
with something like 450,000 spindles is wholly 
out of business — not a spindle remains, not an 
operative is employed. 

"The Penrod Mills, manufacturing fine, combed 
yarns and fabrics, is wholly out of business... 
the Totch tails with 100,000 spindles on fine 
combed yarns is out of business and the machin- 
ery sold — all that could be sold." (*) 

"Lowell used to be one of the very richest cotton 
manufacturing centers in the United States. Today 
the great Appleton Company, whose shares used 
to sell for l 750 each, regularly paid large 
dividends and employed about 1,500 people oper- 
ating 110,000 spindles and 3,500 looms is wholly 
out of business in Massachusetts, Two thousand 
operatives are out of work. live hundred 
tenements are vacant. "eek by week wages of ^40,000 
are unpaid. , 

"The Bay State Cotton Corporation of Lowell, 
a fine reinforced concrete mill, set up at 
a cost of about ''4,000,000 -ith nearly a 
thousand wide looms for the production of 
sheetings. .. is absolutely empty, the machin- 
ery has been sold, the pay roll is non-existent... 
Some of the machinery was sold to go South, 
some to go west — all of it was dispersed. 

"The great Massachusetts Cotton ! ills that 
used to operate 175,000 spindles and 5,000 
looms... the most efficient high pressure steam 
plant in the industry is absolutely vacant. 
Some of the machinery "as shipped to liaine, 
Some to Alabama, some broken ua for junk, 
"."ages of -30., 000 a week are missed here and 
4,500 horse-power of water is unused." (.**) 

"This melancholy chronicle could be continued 

to include the tragic fates of approximately 

500 mills, many of them the nation's finest." ( i<::< ) 



(*) Ibid, p. 25. 

(**) Ibid, pp. 26-28. 

(***) Ibid, p. 28. 

9724 



-32- 



II. 7>JAG£ PROVISIONS OF THE COTTON TEXTILE MANUFACTURING 

INDUSTRY CODE 

The Cotton Textile Code established minimum wage rates or 
30 cents per hour in the South and 32-;.: cents in the North for a 
40-hour week. The Southern mills had asked for a still greater 
differential, basing their claims on alleged differences in the 
cost of living in the t ,_ '0 sections and also on expenditures by 
the mills in the South to support company towns. Northern mills 
asked for a uniform minimum '."/age. The differential in the code 
was a compromise, reached between the sections of the industry, 
since the code must be presented ''ay a body that was "truly repre- 
sentative" of the industry. 

The Code provision for wages-above-the-rainimum may also have 
affected the differential ability to compete in the two sections. 
The essence of that provision was that weekly wages above the minimum 
were not to be reduced with the cutting of hours to 40 from the pre- 
vailing week of 48 hours or more prior to the code. This provision 
was that : 

"The amount of differences existing prior to July 17, 1S33, 
between the wage rates paid various classes of employees 
classified according to occupations (receiving more than 
the established minimum wage), shall not be decreased — 
in no event, however, shall any employer pay any employee 
a wage rate which will yield a less wage for a work week 
of 40 hours than such employee was receiving for the same 
class of work for the longer week of 48 hours or more pre- 
vailing prior to July 17, 1933, It shall be a function 
of the Planning and Pair Practice Agency provided for in 
Section VI of the Code to observe the operation of these 
provisions and recommend such further provisions as ex- 
perience may indicate to be appropriate to effectuate 
their purposes." 

The effect of these wage provisions apparently was to increase 
wages in the South relatively more than in the North. Evidence on 
this point was given in a study of minimum wage rates paid to between 
10 and 20 percent of the workers in sample mills in North and South. 
The conclusions cited by the Administrator in his letter of trans- 
mittal of the code, (*) showed minimum wages of $8 and $8. 50 for a 
week of 50 hours in the South, and $9 anc $L-.50 for a week of 48 hours 
in the North, or 16 to 17 c°nts an hour in the South as compared with 
18,7 to 19 cents in the North. Increasing these to 30 cents in the 
South and to 32y cents in the North meant an increase of 87 percent 
in the South and 73 oercent in the North the lower of the two respective 
rates. Though the differences between these percentages were not 
great in view of the limited evidence upon which they were made, they 
indicated relatively greater increase in hourly rates in the South. 



(*) Codes of Pair Competition, Vol. I, p. 9. 
9724 



-33- 

Average hourly earnings for male ,r eavers in Hew England rose 
from 29.9 to 43.9 cents between July and August, 1933, while the 
corresponding increase in the South was from S3, 8 to 39.6 cents. 
Wages of female frame spinners in New England increased from 23.6 
cents to 37.3 cents and in the South from 16.2 cents to 32.2 cents. (*) 
The weignted average hourly earnings were 38.5 percent higher in 
New England mills in July, 1933, before the code than in Southern 
mills, and only 15.9 percent higher in August, 1933, after the code. (**) 
Another calculation showed increases in median hourly earnings in 
the North of 44.5 percent for males and 56.3 percent for females as 
compared with advances in the South of 66.8 percent for males and 
98.8 percent for females. (***) 

The percentage increase in average wages for selected occupations 
in the Northern and Southern "branches of the. industry "between July, 
1933, and August, 1933, i.e., "before and after adoption of the code, 
as given in Table V showed that in every case the percentage increase 
was greater for the South than for the .lorth. The actual rates, 
however, remained higher for the ilorth than for the South both before 
and. after the Code. 

The wage provisions of the code seemingly reduced existing 
Southern wage differentials. 

Code provisions materially increased hourly wages in all branches 
of the cotton textile industry. The code resulted in a spreading of 
employment with higher hourly wages for the time worked. Evidence 
as to increase in total annual income per worker was lacking except 
perhaps in those mills which through the operation of the code were 
able to give more continuous employment than before. 

Employment in the cotton goods industry, increased from about 
315,000 workers in the first 4 months of 1953 to an average of 
417,000 during 1934, excluding the month of September when the strike 
was in progress. 

, , » 

The average weekly pay roll increased from. $3,055,000 in 1932 . 
to $5,170,000 (excluding the strike month of September) un 1954, or 
69 percent. Although still 17 percent below the 1929 level, the 
purchasing power of the (total) weekly^pay roll during 1934 under the 
code was substantially equivalent to that of, 1929. 



(*) U.S. Department of Labor, Bureau of Labor Statistics, Monthly 
Labor Review, May, 1935, p. 1171. 

(**) Ibid, p. 1173. 

(***) Computed from data given in Table 2, A. F. Hinrichs, lage 

Hates and Weekly Earnings in the Cotton Textile Industry, 1933- 
34 in Monthly Labor Review, March, 1935, p. 617. Between 
August, 1933, and August, 1934 the corresponding increases 
were 2.9J&, 3.3/b, 2.1$, and 0,3,? ( resppctively, being relatively 
slight though a little higher in the North than in the South. 



9724 



-34- 
. . . TABLE V. 
COTTON TEXTILE INDUSTRY 
RELATIVE INCREASE III HOURLY WAGE HATES FOR SELECTED OCCUPATIONS? 
NORTH AND SOUTH; JULY, 1933 to AUGUST, 1933 







Average Hour 


ly Eari 


lin^s 


Percent ag 


e of Increase 


• (4) ' 


Sex 




(cen 


ts) 




July, 19 33 
North 


-August, 1933 


Occupation 


July , 19 33 : Augus t , 


1933 


South 




Male 


North Si 
50. 3 


xith::: 

" 40. 1 " 


orth South 
61.3 57.2 


23 




7/orking foremen 


43 


Loom fixers 


it 


45.3 


3~.4 


. 53. 1 


49.9 


36 


54 ■ 


Second hands 


ii 


44/2 


oOi f 


61.5 


53.6 


39 


50 


Card grinders 


ii 


34.1 


27.3 


47.9 


44.0 


40 


61 


Warp- tying machine 
















tenders 


it 


34.0 


25.5 


47.7 


42.4 


40 


66 


Section hands 


n 


33.7 


28.9 


47.6- 


45.5 


41 


57 


Fixers, machinery 


ii 


32. 9 


25.1 


46.2 


40.3 


40 


61 


Smash hands 


n 


31.6 


22.3 


42.3 


35.9 


34 


61 


Drawers-in, hand 


Female 


30.8 


23.2 


42.7 


38*3 


39 


65 


Slubber tenders 


Hale 


30.3 


21.3 


46.1 


37.2 


52 


75 


Weavers 


n 


30.1 


23.5 


43.9 


39.5 


46 


68 


Speeder tenders 


ii 


29.6 


21.5 


43.5 


36.5 


47 


70 


Card tenders and 










• 






strippers (l) 


n 


2S.4 


19.4 


40.2 


32.4 


42 


67 


Weavers 


Female 


28.3 


21.5 


42.5 


38.4 


50 


79 


Smash hands 


it 


27.9 


18.7 


39.6 ■ 


■ 33.3 


42 


78 


Picker tenders 


Male 


27.9 


17.3 


40.3 


30.9 


44 


79 


Warper tenders(2) 


Female 


27.8 


19.4 


44.9 


34.0 


62 


75 


Spinners, frame 


Male 


27.3 


19.7 


42.3 


34.3 


55 


74 


Helpers, general, 
















factory 


1! 


dOmO 


18. 3 


38.1 


31.5 


42 


73 


Coffers 


It 


26.4 


19.5 


41.3 


34.4 


56 


76 


Watchmen 


II 


26.2 


18.3 


41.9 


30. 3 


60 


68 


Drawing-frame 
















tenders 


II 


25. 6 


19.4 


r7 Q n 

OO . Cm 


34.0 


49 


75 


Truckers, hand 


II 


25. 3 


16.6 






45 


80 


Speeders tenders 


Female 


24. 7 


IS. 6 


39.6 


34.6 


60 


77 


Doffers (3) 


n 


24. 7 


- 


55. 2 


- 


45 


- 


Laborers, white 


Male 


24. 5 


15.6 


34.5 


26.4 


41 


69 


Spinners, frame 


Female 


23.9 


16.1 


37.3 


32.2 


56 


100 


Oilers 


Male 


23.7 


18.0 


35.3 


31.3 


49 


74 


Drawing-frame 
















tenders 


Female 


25.7 


18.0 


35.4 


31.5 


49 


75 ' 


Roving men 


Male 


22.6 


16.3 


35. 5 


30.4 


57 


81 


Spooler tenders 


Female 


22.1 


16.2 


36.4 


32.8 


65 


102 


Cleaners, machinery 


Male 


21.4 


16.1 


51.6 


26.0 


48 


51 


Trimmers and 
















inspectors 


Female 


20.9 


16.0 


33. 2 


30. 9 


59 


93 


Filling hands 


Male 


20.5 


16. 5 


, 7 r Z C 


30.3 


64 


87 


Cleaners, machiner 


yFemale 


• 20.5 


14. 9 


32.7 


25.9 


SO 


74 


Filling hands 


1! 


20.2 


13.7 


33.4 


■ 30.6 


65 


123 


Laborers, white (4) 


n 


18.4 


14.0 


31.3 


26.3 


70 


88 


Learners and 
















apprentices 


Male 


17.0 


13.4 


26.4 


22.3 


55 


66 


n it 


Female 


11.5 


10.8 


24,1 


22.0 


110 


104 



9724 



-35- 

TABLE V (continued) 
COTTON TEXTILE INDUSTRY 



(1) Carders and strippers in South. 

(2) In the South, "ufarper tenders, male, received 2A.P/:, showing an 
increase of 51'd« ITo "warper tenders, male, rate is given for the 

worth, 

(3) In the South, Doffers, nale, hod rates of 19.5fi in July, and 
34. Ad in August, 1933, or 76^ increase. 

(4) In the South, the occupation of Creelers, female, is shown with 
rates of 16, Od in July, 31.5' in August, 1933, ^n increase of 
97^; also, laborers, colored, male, 14,3rf in July, 20.4^ in 
August, 1933, an increase of 43. 3 , and laborers, colored, female, 
10. 5i in July, 17.0rf in August , 1933, an increase of 62^. 



Source: Rearranged from Table 1, in "'./age Rates and iTeekly Earnings 
in the Cotton- Textile Industry', 1935-34," by A. F. Hinrichs, 
U.S. Bureau of Labor Statistics' Lonthly Labor Review, 
March, 1935, pp. 615-616. 



97?4 



-36- 

III. EFFECT OF CODE PROVISIONS UPON MIGRATION IN 
THE INDUSTRY 

Prior to approval of the Cotton Textile Code, New England ex- 
perienced a decline in the manufacturing activities of the nills which 
remained, <as well as mi?;rat ion of her cotton mills. The effect uoon 
these tendencies of the code, the resulting proportionately greater in- 
crease in hourly wage rates ir. the South than in the North, was difficult 
to measure. The evidence concerning the influence of wage differentials 
upon migration of the industry was meager, partly contradictory, and com- 
plicated by measures restricting hours of production under the code. 

The decline in activity of spindles was checked and the trend 
reversed in 1933-34, as shown in Table VI. This resumption of spindles 
appeared slightly greater in New England than in the South. While in 
1932-33 only 20.2ffo of the active swindle hours in the 'industry were in 
New England, in 1933-34 the percentage had increased to 24. 1$. The fig- 
ures of Table I, based not on active spindle hours but on active spindles, 
also indicate a revival of the industry in New England, though somewhat 
less proportionately than in the cotton growing states in the South. 
Of these two measures, however, probably that of active spindle hours was 
the more significant. 

Determination of the effect of wage differentials upon migration 
in the industry was complicated by measures taken toward reduction of hours. 
A curtailment order of May 22, 1934, (■*) established a general maximum of 
30 hours for 12 wee v s in place of the 40 hours provided in the code. This 
order and its effects were summarised in the Monthly Labor Review in the 
following terms: 

"To this curtailment order there were the following exceptions: 
(1) All mills operating on a single shift; (2) certain mills 
engaged in fulfilling certain United States Government con- 
tracts; and (3) the manufacture of nine special fabrics, of 
which tire yarn and fabrics were the most important. In the 
North, in August 1933 the aver? re (median) number of hours 
worked by both males and females was 40. In the South the 
average was 40 hours for males and 34 for. females. Under the 
curtailment order average hours dropped more in the South 
than in the North. In the northern samples the average 
(median) for males in August 1934 was 36.6 hours and for fe- 
males 32.8. In the South, on the other hand, the median wa.s 
31.3 hours for males and 30.2 for females. 1 * (**) 

This reduction in hours, greater in the South than in the North 
would have accounted for the relative decrease in active spindle hours in 
the South as compared with the North after about June of 1934. 



(*) NBA Release, Administrative Order No. 1-60. Codes of Fair 

Competition, Vol. X, p. 980-1, l T o. 5252. 
(**) Monthly Labor Review, I'arch, 1935, Op. Cit. p. 625. 



-37- 

TAIiLE VI 

COTTOii TEXTILE i: PASTRY 
ACTIVE SPITTLE '.lor'HS 3Y ilEC-IOiTS; 1928-34 



.IE AS 



Her England 



Percent 



Cotton-grovring 

States 



Percent 



Other States 



Percent 



1928 - 29 



28.; 



68.5 



3.1 



1931 - 32 



19.3 



78.0 



2.7 



1932 



20.2 



77.8 



2.0 



1933 - 34 



24.1 



73.7 



2.2 



SOURCE: Cotton Textile Industry, liessage fron the President of the 

U.S. transmitting a report on the conditions and problems of 
the Cotton Textile Industry, nade by the Cabinet Committee 
appointed "by him. Senate Document Ho. 126 (74 Congress, lot 
Session) Page 126. 



3724 



-38- 

Another available "bit of evidence was the relative return on 
investment in the textile "business as shown in a study "by the Federal 
Trade Commission. The important point in these figures, shorn in Table 
VII, was the change in relative positions, since the relative rates them- 
selves might have been influenced by differences in valuation of the in- 
vestment or other changes or practices in the industry affecting "oossible 
returns on investment. During the first six months of operation of the 
codes, the rate of return wp.s quadrupled in the Porth and about doubled 
in the South. During the second six months of code history, on the other 
hand, the rote of return in the Porth dropped below the rate of the first 
half of 1933. In the South the decline was- relatively less, the low point 
being somewhat higher than the rate for the first half of the ^receding 
year. During July and August of l n "4, the northern mills gained relatively 
sharply, perhaps because of the nreviousl"* mentioned curtailment order 
which resulted in greater decrease in hours of operation in the South 
than in the Porth. 

The total evidence available seemed to justify a~tentative 3 
statement that the code's effect was to retard the tendency toward mi- 
gration to the South. However, the evidence is too scant for other than 
tentative conclusions. 






5724 



-39- 



TABLE VII 



cottq- textile iittjstry 
relative rates op return on invssti.reet; northern and southern 

COTTON hILLS, JAI-I. 1. 19'." to AUG. 31 T 1934 



Annual Rates of Ret\irn on Textile In- 
vestment in Cotton Kills 
(Per Cent) 
Period 



northern "ills (1) Southern "ills (?' 



Jan. 1 - June 30, 1033 

July 1 - Dec. 31, 1933 

Jan. 1 - June 30, 1934 

July 1 - Aug. 31, 1934 



1.62 

— • -. - 

6.65 
1.20 
3. 65 



o. 



42 



12.44 

7.59 
.97 



(1) Based on 104 mills 

(2) Eased on 230 mills 



SOURCE: Rearranged from Taole 2, Reuort of the Federal Trade Cornis^ion 
on Textile Industries, Part I. Investment and Profit, (December 
31, 1934) pp. 10, 11. 



9724 



-40- 



APFE.DIX I 



The general effect of the wage differentials upon migration 
raises many questions of fact. The differentials in the code minimum 
are but one of the aspects of the results of waje differentials upon 
the migration of industry. Adequate analysis demands detailed exami- 
nation of the whole problem of migration of industry to determine: (a) 
the causes of migration in specific industries, and (b) the relative 
importance of the factors contributing to the shifting or transfer of 
individual plants or their volume of business. Among the specific 
issues involved are the relative importance of labor costs in these 
industries end the relation between wage differentials and labor costs. 
A thorough analysis of the situation in each of a number of industries 
varying with respect to such matters as labor costs, union labor con- 
ditions and degree of mechanization is requisite for an answer of the 
problem. 

The whole matter is broader than the specific Question raised. 
Beyond the effect of the specific differential upon migration of in- 
dustry lies the problem of administrative policy with reference to 
wage differentials. If migration was taking place at a certain rate 
prior to the code, the question is whether administrative policy should 
favor a wage differential in the expectation of allowing migration to 
continue at the same rate or whether it should favor taking steps to 
check migration or to reverse it. Should new wage differentials be 
introduced in situations that are already stabilized? The issue includes: 
(a) the question of administrative policy, and (b) the appraisal of 
actual results to industries of the code differentials. 

Information is needed upon migration movements in other industries 
where differentials were in the codes, inchudin , bituminous coal, fur, 
cloth cap and hat, and millinery. The industries should be chosen to 
include: (a) different types of conditions as to labor cost, mechani- 
zation, type of product, markets and s lecial characteristics of the in- 
dustry; and (b) cases with ranges of differentials at -the minimum anii 
various types of wages-above- the-mininiam provisions. Studies of in- 
dustries like millinery where the labor cost is a large factor in total 
price are desirable, for these industries seem more prone to move in 
response to differentials in wages. These studies should separate out 
the characteristics of the industry which give weight to wage differen- 
tials in migration movements. 

Facts are needed to throw light upon general conditions which de- 
termine the location of industry, and to the relation between these and 
the wage differentials. 

Data showing actual migration and its causes are essential. Case 
histories of individual establishments closed in certain localities to 
reopen elsewhere should be collected and examined to determine the 
specific grounds for transfer. A satisfactory analysis of this problem 
of wage differentials in relation to migration of industry means detailed 
studies of each industry with special reference to actual migration move- 
ments, labor costs, relative wages, relative labor costs, and the specific 

9724 



-41- 



factors in the industry outside the payroll and labor costs which 
enter into encouragement or retardation of ,.d^retion. Cost analysis 
are also needed with respect to the simpler and .rare prevalent trans- 
fer of business, in order to understand the reasons why establishments 
in certain regions can undersell others or can expand their share of 
the total sales in conroetition with other areas. 



9724# 



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 of 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 
ot.ier related matters, sha'l make available for the protection and promotion of 
the public interest an adequate review of the effects of the Administration of 
Title I of the National Inc. istrial Recovery Act, and ti.j principles and policies 
put into effect thereunder, and shall otherwise aid the "resident in carrying out 
nis functions under the said Title. 

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 code his- 
tories. The materials which were produced by these sections are indicated below. 

Except for the Code Histories, all items mentioned below are scheduled to be in mimeo- 
graphed form by April 1, 1936. 

THE CODE HISTORIES 

The Code Histories are documented accounts of the formation 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 cede formation including an account of the 
sp )ns ring organizations, the conferences, negotiations and hearings which were aeld, and 
the activities in connection with 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 with 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 Commerce in typewritten form. 
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 - 
ri als 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 which c nstitute the material officially submitted 
to the President in support of the recommendation for approval of each code. These volumes 
9675—1 . 



- ii - 

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 
recommendations 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 FORK 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 
Materials Series) have been made. These are listed below, grouped according to the char- 
acter of the material. (In Work M aterials No 17, Te ntative O utlines and Summaries of 
Studies in P rocess , these materials are fully described). 

Indus t ry Studies 

Automobile Industry, An Economic Survey of 

Bituminous Coal Industry under Free Competition and Code Regulation, Economic Survey of 

Construction Industry and NRA Construction Codes, the 

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 - Exports 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 From New York State, 
1926 to 1934 

National Income, A study of. 
Paper Industry, The 

Froduction, Prices, Employment and Payrolls in Industry, Agriculture and Railway Trans- 
portation, January 1923, to date 
Retail Trades Study, The 
Rubber Industry Study, The 
Statistical Background of NRA 

Textile Industry in the United Kingdom, France, Geruany, Italy, and Japan 
Textile Yarns and Fabrics 
Tobacco Industry, The 
Wholesale Trades Study, The 
9675. 



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Women's Apparel Industry, Some Aspects of the 

Trade P ractic e Stu dies 

Commodities, Information Concerning: A Study of NRA and Related Experiences in Control 
Distribution, Manufacturers' Control of: A Study of Trade Practice Provisions in Selected 

NRA Codes 
Design Piracy: The Problem and Its Treatment Under NRA 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 Under NRA Codes, Some Aspects of, 
Resale Price Maintenance Legislation in the United States 

Retail Price Cutting, Restriction of, with special Emphasis on The Drug Industry. 
Trade Practice Rules of The Federal Trade Commission (1914-1936): A classification for 

comparison with Trade Practice Provisions of NRA Codes. 

Labo r Studies 

Employment, Payrolls, Hours, and Wages in 115 Selected Code Industries 1933-1935 

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 
PRA Census of Employment, June, October, 1933 
Puerto Rico Needlework, Homeworkers Survey 

A dministrativ e 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 

Approved 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 
Part C. Activities of the Code Authorities 
Part D. Code Authority Finances 
Part C. Summary and Evaluation 

9675. 



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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 and Evaluation of its Organization and 

Activities 
NRA Insignia 

President's Reemployment Agreement, Th9 

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 of Code Definitions of Industries and Trades, 

Multiple Code Coverage, Classifying Individual Members of Industries and Trades 
Relationship f NRA to Government Contracts and Contracts Involving the Use of Government 

Funds 
Relationship of NRA with other Federal Agencies 
Relationship of NRA with States and Muncipalities 
Sheltered Workshops Under NRA 
Uncodified Industries: A Study of Factors Limiting the Code Making Program 

Legal St udies 

Anti-Trust Laws and Unfair Competition 

Collective Bargaining Agreements, the Right of Individual Employees to Enforce Provisions of 

ommerce Clause, Possible 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 Econ mic Standards, Legal 
Memorandum on Possibility 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 

irade 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? 

9675. 



THE EV IDEN CE STUDIES SERIE S 

The Evidence Studies were originally undertaken to gather material for pending court 
cases. After the Schechter decision the project was continued in order to assemble data for 
use in connection with the studies of the Division of Review. The data are particularly 
concerned with the nature, size and operations of the industry; and with the relation of the 
industry to interstate commerce. The industries covered by the Evidence Studies account for 
more than one-half of the total number of workers under codes. The list of these studies 
follows : 



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. Industry and 
Metal Finishing and Metal Coating Industry 
Fishery Industry 
Furniture Manufacturing Industry 
General Contractors Industry 
General Contractors Industry 
Graphic Arts Industry 
Graphic Arts Industry 
Gray Iron Foundry Industry 
Hosiery Industry 

Infant's and Children's Wear Industry 
Iron and Steel Industry 



Leather Industry 

Lu-i_ar and Timber Products Industry 
Mason Contractors Industry 
Men' 3 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 
Rut'j9r Tire Manufacturing Industry 
Shipbuilding Industry 
Silk Textile Industry 
Structural Clay Products Industry- 
Throwing Industry 
Trucking Industry 
Waste Materials Industry 
Wholesale and Retail Food 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 qualificat. jns that should be observed in using the 
data, the technical methods employed, and the applicability of the material to the study of 
the industries concerned. The following numbers appear in the series : 
9675. 



- vi - 

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 Ray. a and Synthetic Yarn Producing Industry 

Cotton Textile Industry Salt Producing Industry 

Electrical Manufacturing Industry 

9675. 



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