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■ilgii^ . ^ 

OFFICE OF NATIONAL RECOVERY ADMINISTRATION 
DIVISION OF REVIEW 



THE MEN'S CLOTHING INDUSTRY 

By 

J.W. Hathcock 

Assisted By 

A. Palma Aaronson Geraldine Asmuth 
C.C. Boyden A. A. Fisher 

Walter E. Woodford, Jr. 



WORK MATERIALS NO. 58 



INDUSTRY STUDIES SECTION 
March, 1936 



OFFICE OF NATIONAL IffiCOVERY ADMINISTRATION 
DIVISIOH OF RE7IEI7 



THE I EN'S CLOTHING INDUSTRY 

3y 

J. 7J. Hath cock 

Assisted By 
A. Palma Aaronson Geraldine Asrauth 
C. C. Boyden A. A. Fisher 

¥alter E. Yloodford, Jr. 



INDUSTRY STUDIES SECTION 
March, 1935 



9782 



? OEE| OHD 

This Study of the Men's Clothing Industry was prepared by Mr. J. W. 
Hathcock of the Industry Studies Section, Mr e Ma D. Vincent in charge. 

The study as originally planned \?rs much broader in scope than 
the finished product. The field of study was narrowed particularly 
because of limitations in personnel and tine, A more detailed explana- 
tion of the circumstances shaping the charrcter of the study is found 
in Appendix A, along with suggestions for further study. 

While the study of the Men's Clothing Industry gives considerable 
attention the a statistical and general description of the outstanding 
characteristics of the industry, the major part of the study is given 
to the outlining of the industry's -oroblems and the attempt imder the 
code to correct these maladjustment s The principal problems given at- 
tention are those arising from decline in value of the industry's pro- 
duct, narrow profit margins, instability of employment, wages and hours, 
and home work. 

A review of KRA and other governmental files indicates, as shown 
by the study, that considerable progress was made toward the solution 
of many of the industry's -oroblems during the ERA ~->eriod,. It is like- 
wise revealed that significant administrative problems arose under the 
code, particularly as regards the overlapping of codal definitions and 
the application of the wape provisions providing for the maintenance 
of wage standards above the ninimumc 

Most of the statistical material in this study was prepared in 
cooperating with the Industry Statistics Unit, Statistics Section of 
the Division of Review. A number of the statistical tables, however, 
were prepared either within the study group or were obtained from other 
sources and have not been checked by the Industry Statistics Unit. 

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

L. C. Marshall 
Director, Division of Review. 



March 10, 1936. 



9782 -i- 



THE MSK : S CLOTHING INDUSTRY 
TJ^LF OF COICT^K TS 

Page 

SUMMARY 1 

CHAPTER I— DEFINITION AND SCOPE OF INDUSTRY 16 

I. Code Definition and Jurisdictional Disputes 16 

A. The Cotton Garment Industry 17 

1. The Codes as Originally Approved 18 

2. Amendments of December 18, 1933 19 

(a) Men' s Clothing Cede 20 

(b) Cotton Garment Coae 20 

3. The Inter- Code Committee 20 

4. Amendment to the Cotton Garment Code — 

March 15, 1334 21 

(a) Report of the Special Administrator 21 

5. Amendment to the Cotton Garment Code — 

August 21 , 1S34 21 

6. Developments from December 1, 1934, to 
Supreme Court Decision bay £7, 1935 < . . 

B. Merchant and Custom Tailoring Industry „ 24 

C. Textile Examining, Shrinking, and Refinish- 

ing Industry ..=..,.. 26 

D. Shoulder Pad Manufacturing Industry and 

Slit Faerie Manufacturing Industry 27 

E. Coat Front Manufact ;ring Industry 27 

F. Infants ' and Children 1 s Wear Industry 28 

G. Knitted Cut err/ear Industry 28 

E. Rainwear Division of the Rubber Industry 30 

I. Army and Navy Clothing Factories 30 

J. International Clothing Designers 31 

II. Relationship with Other Industrial and Trade 

Groups 31 

A. Piece Goods Division, Wool Textile Manu- 
facturing Indus try 31 

B. Retail and Wholesale Trade 32 

III. Brief Historical Sketch of Development of Men's 

Ready-Made Clothing Industry 32 

A. Ready-Made Garments 32 

B. Development of the Factory System 33 

C. Civil War Stimulus to Factory System 34 

IV. Present Day Scope of Men's Clothing Industry 34 

A. Number of Establishments 34 

B. Distribution of Establishments 35 

C. Garments Cut, by Principal States 37 

D. Wage Earners in the Industry 37 

E. Value and Volume of Production 37 



9782 -ii- 



Page 

CHAPTER I I—CHARACTERISTICS OF THE INDUSTRY 47 

I. Organization of Production * 47 

A. Types of Establishments 47 

1 . The Manufacturer-Distributor 47 

2. The "Integrated" Manufacturer 48 

3. The Tailor-to- the-Trade Establishment 48 

B. Technology 48 

1. Machinery 49 

II . Financial Aspects of the Industry 51 

A. Investment in Industry 51 

B. Mortality 51 

C. Capital and Turnover 54 

1. Contractor' a Investment 54 

2. Manufacturer-Wholesaler' s Investment 

Turnover 54 

3. Relationship of Sales Volume to Invested 

Capital 55 

4. Price Range in Relation to Turnover 57 

D. Financing 62 

1. Sources of Capital 62 

2. Sources of Credit — Merchandise Suppliers 

and Banks 62 

3. Terms Granted by Mills 62 

(a) Effect of Selling Policy of Mills 64 

4. Governmental Aid 64 

5. Selling Terms 66 

(a) Seasonal Activity Changes 66 

(b) Working Capital 66 

E. Labor Costs 67 

III. Raw and Semi-Processed Materials 68 

A. Cost of Materials 68 

B. Source of Materials 73 

C. Ratio of Materials' Cost to Value of Products 73 

IV, Employment 73 

A. Stability of Employment 77 

V. Wages and Hours 79 

A. Average Wages per Hour 79 

B. Average Weekly Wages 79 

C. Payrolls 79 

D. Distribution of Payrolls by States 80 

E. Distribution of Employment, Man Hours, and 

Earnings , by Marke b Areas 80 

F. Wage Earners Classified According to 
Average Hourly Wage Paid to All Employees in 
Establishments, for the Industry, and for 

Market Areas 85 



9782 -iii- 



Page 
G. Average Annual Uages in Men's Clothing 

Compared with All Other Manufacturing Industries 90 

H. Comparison of Changes in Average Weekly Wages 

and in Cost of Living * . 90 

VI. Prices: Rar; Materials and Finished Products 90 

VII. Exports and Imports 93 

VIII. Migration in the Men' s Clothing Industry 97 

IX. Ratio of Labor Cost to Value of Product 97 

X. Labor Relations 104 

XI. Description of Distribution Channels 107 

A. TJholesalers and Jobbers 107 

B. Retailers H° 

1. Department Stores 110 

(a) Direct to Consumer Ill 

2. Mail Order Houses 112 

C. Resident Buyers 114 

1. Attitude of Manufacturers 118 

XII. Material and Garment Standards in the Men's 

Clothing Industry 120 

A. Measurements 120 

3. Fibre Contents 122 

C. Shrinkage 126 

D. Color-Fastness 131 

E. Labeling 131 

CHAPTER III—PRE-CODE PROBLEMS OF THE INDUSTRY AND 

URITING OF TIE CODS 133 

I . Pre-Code Problems of the Industry 133 

A. Decline in Value of Industry Product 133 

B. Productive Capacity of Industry 133 

C. Employment and Hours 133 

D. Wages 134 

E. Extent of Unionisation 135 

P. Home Uork 135 

G. Profit Margins 136 

II. Writing of the Code 139 

A. Problems of the Industry Hot Covered by 

the Coae 144 

1. Trade Practices 144 

2. Apprentices 144 

3. Differences in Industrial Technique 145 

CHAPTER IV--C0DS ADMINISTRATION— ORGANIZATION AND 

PROCEDURE 146 

I . Membership of Code Authority 146 



9782 -iv- 



A. Formal Recognition and Establishment of Code 

Authority 148 

1. Peccgnition of Laoor Members 149 

2. Recognition of Industry Members 149 

3. Proposed Consumer i.enresentation on Cods 

Authority 153 

B. Code Authority Officials and General 

Organization 154 

II. Compliance Frocedure 156 

A. Industrial Adjustment Agency Contemplated 160 

III . Use of Labels 161 

A. Label Publicity 165 

B. Label Compliance 166 

C. Labels for Uniform Manufacturers 166 

D. Retailers' Labels 168 

E. Reduced Price of Laoels for Children 1 s Suits 168 

F. Proposed Reduction of Label Charge for Single 

P?nts 169 

IV. The Budget 169 

A. Summary of Financial Reports Covering the 

Budget ~ 176 

3. Cost of Code Authority to the Industry 180 

V. Interpretations and Interpretation Procedure 181 

A. Interpretations Submitted for Administrative 

Approval 182 

B. Interpretation Publicity 188 

C. Administrative Orders Approving Interpretations 189 

D. Suggested Interoretc.ticns Hot Approved by 
idninistration 195 

E. Classifications 198 

VI. Collection and Use of Statistics 199 

VII. Procedure Authorized but Hot Effected 200 

CHAPTER V— LABOR UNDER THE COLE 201 

I. Hour Provicions — Issues in TJriting 201 

II. Special Provisions for Overtime 202 

A. Overtime for Tailors-to-the-Trade 202 

B. Overtime for Uniform Manufacturers 204 

C. Right of Code Authority to Determine Over- 
Time period 205 

III. Exemptions and Denials of Exormtions 206 

A. Exemptions from Hour provisions Granted Small 

Groups and Individual Firms 208 

B. Denial cf Requested Exemptions from Hour 

Provisions 211 



9782 



-v- 



Page 

IV. Wage Provisions and Issues in Writing 213 

A. Proposed Amendments of Wage Provisions 215 

B. Arguments Favoring proponed Classified 

Wage Scales 222 

C. Advisers' Recommendations on Proposed 

Change in Wage Provisions 230 

D. Additional Arguments Opposing Proposed 

Classified Wage Scales 231 

V. Apprentices 235 

VI. Home Workers and Handicapped Workers 236 

VII. Exempt ions from Wage Provisions 239 

VIII. Compliance 239 

A. ~ The Greif Case 244 

B. The Pincinnati Cases 247 

IX. Employment and Wages under the Code 254 

CHAPTER VI— TRADE PRACTICES 256 

I. Codal Trade Practice Provisions 256 

II. Consignment Selling . , 257 

A. The Case of S. Makransky and Sons, Inc 259 

B. Cases cf Eickey-lreeman Co., New York, 

and Cohen-Goldman Co c , Hew Tori: 259 

C. Case oi iloritz and Winter Company 260 

D. Case of Levy Brothers and Adler Rochester 260 

E. Complaints Arising from Consignment 

Exemptions 260 

III. Cut , Make , and Trim 261 

A. Proposed Amendment to Cut, Make, and Trim 

Provision . „ 263 

B. The Sears-Roehuck Exsraption Case 266 

C. Proposed Interpretation of Cut, Make, and 

Trim provision 266 

IV. The Cost Formula 267 

A. Uniform Accounts 270 

V. Compliance with Trade Practice Provisions 270 

VI. Dropped Lines or Surplus Stocks 271 

VII. Proposed Amendments to Fair Trade Practice 

Provisions 272 

A. Lair Trade Practices under Consideration "by 

Commi btee on Fa.ir Trade Practices 272 

B. The Trade Fractice Hearing ''10~I» , 274 

1. The Executive Director' s Statement 274 

C. Trade Practice Amendments Scheduled for 

Hearing 275 



9782 -vi- 



Page 
1. Retailers' Objections to Proposed Trade 

Practice Amendments 277 

D. Proposed Trade Practices Submitted by Tailors- 

to-the-Trade and Eetailers ' Objections 279 

VIII. Proposed Fair Trade Frau^ices for Uniform 

Manufacturers 282 

X. Fair Trade Fractices for Uniform Manufacturers 

Approved by Feaeral Trade Commission 291 



Appendix A. "Methodolo^" — Explanation of Scope of 

Study and Suggestions for 'Further Study 299-314 

Appendix B. List of Division Administrators, Deptity 
Administrators, Assistant Feputy Admin- 
istrators, and Aides TTao Served in Con- 
nection with the hen'- s Clothing Code 315 

Appendix C. Production of "en's Clothing under the 

Cotton Garment Coce — ine Overlap Problem 316-473 



9782 

-vii- 



TABLES 



Table I. Number of Establishments in the Ken's tigg. 

Clothing Industry: Regular Factories 
and Contract Shops 35 

Table II. Number and Per Cent of Productive Units 

in Specified States 36 

Table III. Percentage of Total Garments Cut, by 

Principal States, 19S4 45 

Table IV. Number of Wage Earners in the Hen's Cloth- 
ing Industry Coiroared with that in all 
Other Manufacturing Industries, 1923-1933 46 

Tables V - X Establishments, Wage Earners, Wages, Cost 
of Materials, Value of Products and Value 
Added, "oy States, 1S23-1933 38-43 

Table XI. Principal Products, by Class and Value, 
1923 and 1925, and by Class, Quantity 
and Value , 1927-1934 44 

Table XII. Number of Business Embarrassments and 

Amount of Liabilities in "Embarrassments 53 

Table XIII. Net Worth and Net Sales of an Average 

Clothing : Ianufacturer 58 

Table XIV. per Cent Increase or Decrease over 1932 
in the Net Worth and Net Sales of an 
Average Clothing Manufacturer 59 

Table XV. Net Return on Investment and Per Cent 
Profit or Loss on Sales of An Average 
Clothing Manufacturer 60 

Table XVI. Operating Costs in the lien's Clothing 
Industry, according to Net Worth of 
Manufacturer 61 

Table XVII. Operating Costs in the lien's Clothing 
Industry, According to Price Range of 
Manufacturer 63 



9782 -viii- 



Table XVIII. 



Table XIX. 



Tables 1 '.XX.- 
XXII, 



Table XXIII. 

Table XXIV. 

Table XXV. 

Table XXVI. 

Table XXVII. 

Table XXVIII. 

Table XXIX. 

Table XXX. 

Table XXXI. 

Table XXXII. 



Table XXXIII. 



Table XXXIV. 



Reconstruction Finance Corooration Loans 
Authorized to lien's Clothing Manufactur- 
ers and Others 65 

Operating Costs in the "'en's Clothing 
Industry, According to Profitable end 
Unprofitable Manufacturing 69 

Production of Principal Materials Used, 

by Kind and State, 1929 and 1931, rnd 

by Kind, 1933 70-72 

Ratio of Labor Cost, and of Materials' 

Cost to Total Value of Product 74 

Factory Employment , 1926-1935 75 

Index of Employment, 1933 and 1934 77 

lluraber of Wage Earners, High and Lou 

Months and Yearly Average, 1923-1935 78 

Factory Wages, 1926-1935 81 

Factory Payrolls, 1926-1955 82 

Average Number of Wage Earners and Total 

Annual Wages b- Principal States, 1929- 

1934 83 

Employment, Han-'Hours and Earnings, by 

Market Areas, Last Six Months, 1934 84 

Factor- Hours, 1926-1935 86 

Frequency Table Showing Distribution of 
1,471 Establishments Classified Accord- 
ing to the Average Hourly Wage Paid to 
All Employees in Establishments 87 

Frequency Table Showing Distribution by 

Market Areas According to Average Hourly 

Wage Paid to All Employees (Excluding 

Office) ". 88 

Average Annual Wage in the Men's Cloth- 
ing Indus try Compared with that in All 
Other Manufacturing Industries, 1923-1933 89 



9782 



•ix- 



Ta"ble XXXV. 

Table XXXVI. 

Table XXXVII. 

Table XXXVIII. 
Table XXXIX. 



Table 



XL. 



Table XLI. 



Table XLI I. 



Table XLIII. 



Table XLIV. 



Table XLV. 



Table XLV I , 



Comparison of Changes in Average Weekly 

Wages in the Men's Clotning Industry 

and in the Cost of Living, 1923-1934 91 

T.holeoale Frices — Ran Materials, 1926- 

1935 92 

Wholesale Prices (index of Composite 

Wholesale Prices) 1935-1935 94 

Retail Prices ( Index) 1930-1935 95 

bearing Apparel Exports, Quantities, 

Values, and Index of Quantities 96 

Clothing and Articles of Fearing Apparel, 

Wool., (Except Wool-Pelt Hats and Hat 

Bodies), :T ot Knit or Crocheted: Imports 

for Corsuption into the United States 

from Principal Sources 98 

Establishments for the United States, 

the Five Major Cities, and Outside the 

Five Major Cities, by Census Years, 

1923-1929 99 

Wage Earners for the United States, the 
Five Major Cities, and Outside the Pive 
Major Cities, by Census Years, 1923-1929 100 

Wages for the United States, the Pive 

Major Cities, and Outside the Pive Major 

Cities, by Census Years, 1923-1929 101 

Value of Products for the United States, 

the Pive Major Cities, and Outside the 

Pive Major Cities, by Census Years, 1923- 

1929 102 

Cost of Materials for the United States, 

the Pive Major Cities, and Outside the 

Five Major Cities, by Census Years, 1923- 

1929 103 

Net Profit or Loss after All Charges, of 

3 Large Chicago Manufacturers 140 



9732 



-x- 



•Table XLVII. 
Table XLVIII. 



Table XLIX. 



Number and Value of Labels Sold by lien's 
Clothing Code Authority 

Number of Handicap-oed "Torkers Certifi- 
cates Issued, Refused, Revoked, and Can- 
celled, to and including May 27, 1935, 
According to State 

Special Certificates of Exceptions to 
Homework Prohibitions of the Codes 



179 



237 



238 



9782 



-XI- 



-1- 



TH£ MEN'S CLOTHING INDUSTRY 

SUMMARY 

DEFINITION AND SCOPE OF INDUSTRY 

The definition of the Men's Clothing Industry confined code 
activity to men's outer garments, principally those made of wool or 
part wool. Certain cotton garments, such as linen and cotton wash 
garments (summer wear) ordinarily made in establishments devoted 
solely to men's outerwear are included also under the Men's Clothing 
Code. 

The definition for the men's clothing industry was in conflict 
t with several proposed and accepted codal definitions for other in- 
dustries. Among the industries having codal defintions or suggested 
codal definitions in conflict with the definition of the Men's 
Clothing Industry are the Cotton Garment Industry, the Merchant and 
Custom Tailoring Industry, the Rainwear Division of the Rubber 
Manufacturing Industry, the Textile Examining, Shrinking, and Re- 
finishing Industry, the Shoulder Pad Manufacturing Industry, the 
Slit Fabric Manufacturing Industry, the Coat Front Manufacturing 
Industry, the Infants' and Children's 7/ear Industry, the Knitted 
Outerwear Industry, and tailoring shops operating under the author- 
ity of the United States Government. 

The jurisdictional conflict with the Cotton Garment Industry 
was of major consequence and was never settled to the satisfaction 
of the industries concerned. (This conflict is covered under 
Appendix C.) With respect to the other industry groups in conflict 
with the Men's Clothing Industry Code, in certain instances definitions 
were modified or so drawn as to minimize the possibility of serious 
jurisdictional disputes, yet there remained, the feeling that many of 
these grou >s might well have been included under the Fen' s Clothing 
Industry Cede. 

The Men's Clothing Industry found some difficulty in adjusting 
itself to new trade practices brought about by the Code for the Piece 
Goods Division of the Wool Textile Manufacturing Industry. The new 
practices related principally to methods of quotation on a semi-rigid 
discount basis, and f.o.b. shipments. Cn the selling side, the Men's 
Clothing Industry was unable to obtain complete cooperation of the 
"Retail and Fnolesale Trade" in respect to proposed fair trade practices 
relating to discounts, deliveries, etc. 

During the Colonial period of American history, most clothing was 
made a home or was bought as second-hand clothing from dealers in old 
clothing. Finally the ready-made clothing industry developed from 
the custom tailoring shops which began to nroduce for stock in order 
to keep employees busy. Increase in travel and the stimulus to home 
industry by a tariff placed upon the importation of cloth in 1832, 

9782 



encouraged the growth of the Industry. 3?y 1850, the ready-made cloth- 
ing industry had become import "ait, as is evidenced "by a product valued 
at $48,311,000. The present-day factory of the ready-made clothing 
industry did not develop until the invention and -perfection of the 
sewing machine around the micdle of the 19th century. 

During the spring of 1935, the Men's Clothing Industry had 3,225 
estabiisnments, including both regular, factories and contract shops. 
This number of establishments fell 466 short of the 1929 total, but 
represented an increase of 1,000 over the 1933 total. 

An analysis of the distribution of men's clothing establishments 
shows that a very few states, namely, Ilew York, Illinois, Maryland, Mass- 
achusetts, Hew Jersey^ and Pennsylvania, account for 88.6 per cent of 
the 1935 total. Hew York State along accounts for approximately 50 per 

cent. 

The principal products produced under the Men's Clothing Industry 
Code were: men' , suits, wholly or partly wool, mohair, and linen; men's 
separate trousers; men's overcoats and tooccats; men's odd coats; boys' 
suits; wool, cotton, etc; boys' separate ->ants; boys' overcoats; boys' 
mackinaws, reefers, and light coats; and uniforms 

The total value and volume of production in the Men's Clothing 
Industry declined sharply from 1929 to 1934, the total garments for the 
two years being 76 s 793~090 and 48., 171,000 with a value of $781,871,000 
and $397,875,000 respectively, 

A study of the distribution of wage earners in the Men's Clothing 
Industry by States for the years 1923-1933, inclusive, shows a steady 
decline, with the exception of the year 1939, from a high of 158,000 
employees in 1923 to a low of 119,000 employees in 1933. Also, there is 
noted a shift of employees during this period of time from the States 
of hew Yoik and Illinois to the States of Pennsylvania and Maryland. 

CHABACTjPJSTICS 07 THE IUDUSTSY 

.There are several different types of firms- in the Men's Clothing- 
Industry. Aside from the inside cr integrated shop, the two most 
distinctive types are: Pirst, establishments which buy material, cut 
the cloth, market the finished product, and finance the production from 
raw materials to finished garment, but which often do not cwn and oneratc 
the plant where the garments are ma.de. Lecchdly, there are establish- 
ments called "contract shops'! which take oat cloth and accessories from 
one who finances the business and --inform the remaining operations 
necessary to completing the garment on a ;oie'ce price basis. There is 
also found in the Industry the nnnuiVcturer-distributor, the "integrated" 
manufacturer, and the special order or tailor-to-the-trade establish- 
ment. 



9782 



•3- 



Although there may be aa many ^s 163 operations in the making 
of an overcoat, the operations in <* clotning factory can be divided 
into a few distinct occupational groups, the principal of which are 
cutters, f liters, sewing machine operators, pressers, basters, hand 
sewers, snrpers, bushelers, and tailors. The advantages of large 
scale production in the Men's Clothing Industry do not appear to be 
very great. A shop employing fifty people is likely to be as efficient 
as one employing a thousand. 

During the last half of the 19th century, a number of new machines 
resulted in a radical depar ture from old methods of production. These 
machines included the power sewing machine, the power cutting machine, 
^as Dressing irons, and machines for button-hole making, button sewing, 
pocket making, cloth examining and sponging. 

An aggregate investment in the Wen's Clothing Industry of 
$100,000,000 is conservatively approximated by application to 1934 
sales figures of a tested turnover ratio of 4 times net worth. 

A lower mortality than in the '-omen':, wear industries is indicated, 
but records disclose an increasing number of failures from 19?8 through 
1932, decreasing during 1933-1934, and slightly increasing in the first 
half of 1935. Causes of failure and numerous voluntary withdrawals 
by reason of financial losses and discouragement are generally laid to 
a profound lack of managerial ability; in part, to inadequate capital. 
Seven years is the average business life of the entrepreneur, with 
newcomers constantly filling the gaps and fading out through inefficiency. 

The amount of capi + "l needed for successful operation is relative. 
Credit is liberally supplied to well-managed concerns. The "inside 
shop" manufacturer-wholesaler should have a Jiet worth of $50,000 to 
$75,000, or more, tt> permit a volume turnover of 10 times and make a 
reasonable profit after overhead expenses. A 7 times turnover was 
considered the tire-depression average. It dropped to less than 4 times 
in 1933. Ine turnover base applies also to the manufacturer using 
contractors or "outside shops." With no investment in plant, his 
capital needs are less, and turnover higher. The contractor — approx- 
. imately equal in number to the manufacturing wholesalers — requires a 
minimum of capital for his investment in sewing machines, etc. He does 
no buying or selling, merely contracts laoor. 

Manufacturers with less than $25,000 capital, and. those operating 
in the lower price ranges, appear to have tne advantage in turnover. 

The proprietorship investment is supplemented bv merchandise 
credits and bank borrowing. A changed policy of woolen mills in weaving 
to order, rather than for stock, and a shortening of terms to the 
clothing manufacturer, have substantially increa.sed the latter' s 
financial burdens. Continuous bank loans, instead of the former twice- 
a-year liquidation, represent the current situation, made more tense 
by seasonal 'activity changes and higher labor costs. Investment in 
inventories has shown an increasing trend, tying up one-third more 



9782 



_4~ 



working . capital than formerly.; 

Capital within the Industry declined steadily from 1930 to 
the spring of 19.33. Speculation against rising prices commenced 
with the enactment of the National Industrial Eecovery Act. Sales 
increased, but net so fart as inventories. 1953 year-end statements 
showea sots profit against prior losses. Profits, however, were 
lessened by clumping of goods to lighten financial strain. Ton- 
h^avy inventories carried over into 1934 had to be marked down in that 
year, wnich for the average manufacturer showed even smaller rafofits 
than 193". The concern with smaller capital, forced to buy cautiously, 
fared, better than t,he competitor of medium size, who covered his entire 
requirements in tne pve-Code speculation. The larger, well-financed 
house was aole to carry the load and work inventory off gradually, during 
1934. 

The principal materials used in the Industry are woolen suitings 
and nnntings. flannel suitings and pantings, tea-coatings, overcoatings, 
worsted stable suitings and pantings. and fancy suitings and x>antings. 
These materials were valued at $3 r 'l . "42,000 in 1929, but declined to 
$157,602,000 in l Q o3. The- costs of these materials to the Industry, 
plus fuel and purchased electric energy, averaged around 50 percent of 
the value of the Industry's product for the years 1929-1933, inclusive. 

In terms of estimated employment the range for the period 1926- 
1935 is frcvi a hiah of apprcximat ely 156,300 in August, 1929, to a 
low of approximately 107 s 000 in f'ay s 1933. The gain following the 
improvement in employment in 1-933 is shown by an average employment 
for 1933 of' 116,600-; far 1934, an average of 121,900; and for the first 
ten months of 19Z5-, an average of 132,400 

Wages in the L'en's Clothing Industry declined sharply from an 
average of 75. cents an hour daring 1926 to a low point of 50.6 cents 
an hour for 1932, but improved considerably daring the Code period, 
from the fall of 1933 through the spring of 1935, to an hourly average 
of 57o7 cents for the year 1934 and an average of around 60.0 cents for 
the first months of 1935r The averare weekly wage in the Industry 
declined from .the relatively high figure o^ $24,15 in 1927 to a weekly 
average of $13,70 for 1232, Improv:.::-n J : followed in 1933, 1934, and 
in the first ten months of 1935, with average weekly wages of $14.14, 
$16.26, and $13.32, respectively.. 

Since 1923, the average annual wage in the Men's Clothing Industry 
has declined more than -the average annual- wa«:e in all other manufacturing 
industries. It likewise a/opears that the average annual wage in this 
Industry has declined faster than has the cost of living.' 

Of the large market areas, Chicago forj the last six months of 
1934 revealed the highest average wage rate per hour, that o^ 78 cents 
against an Industry average of 66.2 cents per hour. The market area 
of Cleveland led the ten large areas in average weekly man hours for 
the last half of 1934, with an average of 30 against the average for 



9782 



-5- 



the ten large areas of 25.7 hoars. Rochester, with 22.3 hours, was 
the lowest of tne large areas. 

A study of stability of employment in t he Fen's Clothing Industry 
by the U.S. Department of Labor for tne years 1923-1928, covering 
sixty-four establishments in various lines, showed that conditions 
were bad and that no improvement was made in the six years covered by 
the study. The average stability for the plants was only 87.9 percent 
in 1923 and in no subsequent year was the percentage that high. 

One of the most striking phases of the Fen's Clothing Industry 
during the period 1923-1929 is the movement of the Industry out of 
the major manufacturing centers 'into smaller cities and country 
districts. Figures from the U. S. Census of Manufactures arc cited 
to prove the point. 

Since 1911, the Amalgamated Clothing workers of America has 
been the dominant union in the Men's Clothing Industry, which is now 
about 80 to 85 percent organized. This union has been very aggressive 
in its efforts to improve the lot of the workers as a ^hole, and has 
at the same time, through cooperation with employers, made noteworthy 
efforts to stabilize conditions in the Industry. Such cooperative 
action has had as its objective the solving of the problems of "sta- 
bilizing production, reducing costs, eliminating waste, composing 
differences promptly and peaceably, and taking advantage of new technical 
advances in the Industry without impairing the workers' earnings." 

Manufacturers in this Industry frequently use a combination of 
channels to effect the distribution of their products. In the larger 
cities some manufacturers own or control their own retail outlets. In 
the smaller cities and towns they sell direct to the retailer. The 
manufacturer may sell direct to the large department and chain stores, 
and indirectly to retailers who purchase in small quantities. Direct 
selling occupies a dominant position in the distribution scheme due 
to the nature of the product and localization of the Industry — particular- 
ly in reference to style. 

Wholesalers of men's clothing find it advisable to develop their 
own brand, or act as a resident buyer for a group of retail stores, or 
organize and supply cooperative retail buying associations. 

Certain manufacturers of men's clothing, prodacing in large volume, 
offer their products to the consumer through their own retail stores. 
Attention is called to the Eond Stores in the Northern and Eastern 
States, owned and operated by the Aplo Company. Operating mainly in 
the Southern and Western States, Richmond Brothers sell through 
approximately sixty of their own retail stores. 

House-to-house selling appears to develop rapidly during and after 
periods of business depression. One concern, the Nash Tailoring Company, 
of Cincinnati, Ohio, is supposed to have sold over 500,000 suits and 



9732 



-6- 



overcoats in one year using this method. 

The importance of established uniform standards in all branches 
of industry has been recognized for many years. To date there have 
been none adopted by the I'en's Clothing Industry as regards measure- 
ments and sizes of garments; labeling to show fibre content of fabrics 
used; marking to show the guaranteed ore-shrinkage treatment to which 
the fabrics have been subjected; and what can be exnected as to the 
color fastness of the cloth used in the garments. This information, 
based on properly established standards, should be stated clearly and 
simply on a label attached, to the garments offered for sale. 

The importance of knowing the fibre contents of the cloth from 
which a garment is made is apparent when it is realized that the 
quality, strenth, appearance, warmth, elasticity, durability, etc., 
of the fabric depends on the fibres used in its construction. Each 
of the various fibres commonly used in the production of cloth has 
its individual characteristics, and they differ from one another due 
to having passed through different processes of manufacture. 

The consumer, if financially able, generally nrefers clothing 
of all wool construction but, without some standard method of labeling 
to show the true fibre contents of the cloth from which the garments 
are made, mast depend on the information given by the salesoeonle, 
who do not always know. 

The' Tailor-to- the-Trade Division of the Fen's Clothing Industry 
presented an amendment to the Code of Fair Competition for the Hen's 
Clothing .Industry at a hearing heir April 15, 1S35, regarding labeling 
to show the fibre content of the clcth used in the production of 
garments. No official action was taken on this orooosed amendment. 

■Resolutions ->doi3ted by the Board of Directors of the National 
Association of "Jool Manufacturers, February 15, 19S5, show the impor- 
tance attached to this matter of labeling by the producers of the 
cloth. 

Excerpts taken from the statements made in supoort of an amendment 
to the Code of Fair Comioetition for the Men's Clothing Industry, re- 
garding shrinkage, at a hearing held April 15, 1935, state the methods 
of shrinkage com'. only used, the results obtained, and the necessity 
for the practice. They looint out that the use of unsinrunk cloth in 
the manufacture of garments is increasing, as is the so-called practice 
of stretchage.' They show the efforts being made to overcome these 
bad practices and present evidence that- the equipment and organization 
to treat fabrics properly exists in the Industry. They also emphasize 
tne efforts the Industry is making to bring about a standard of cloth 
shrinkage and conditioning. 

Mucn important work and study is going on in the Industry regarding 
the subject of color fastness. 



9782 



■7- 



The statement of Dr. D.E.Douty, of the U. S. Testing Co., Inc., 
regarding labeling, is interesting: 

"In my opinion the chief value of., compulsory label- 
ing lies not in the "technical. Information given to 
and utilized by the ultimate consumer, but in the 
restraining influences it exercises over the pro- 
ducer and the direct obligation placed upon him in 
his relation to the regulatory agencies of tne State 
and Federal Government." 

The "Bureau of Standards is cooperating with various groups of 
manufacturers, distributors, and consumers, looking toward the 
standardization of sizes, measurements, shrinkage, color fastness, and 
other criteria indicating quality of garments and other apparel. 



PRE- CODE FFCBLEKB OF THE INDUSTRY AND 7/RITING OF THE CODE 

The Ken's Clothing Industry from 1923 to 1932 showed consistent 
declines in product value, employment, and rates of pay. In 1923 
the product value was around one billion collars, but for each of the 
years 1933 and 1934 was approximately $450,000 ,000. in 1923 the 
highest number of workers employed in the Industry was 168,771; it is 
estimated that around 118,000 were employed during 1933, although 
about 160,000 were attached to the Industry. Allowing for migration in 
the Industry and other factors, around 48,000 were unemployed in 
early 1933. 

'■".ages in the Industry for several years prior to the Code had 
been affected by the actual decline in wage rates and the decrease 
in employment. It is estimated that actual hours of work declined 
10 percent from 192? to 1952, while hourly earnings also declined. 
In 1922, the average hourly earnings were 72.8 cents and in 1932 
only 50.6 cents, thus unquestionably affecting average annual earnings. 

The average clothing manufacturer with a sales volume of less 
than $1,000,000, against a loss of 10.3$ in 1932, had an apparent 
profit of 9,2?o in 1953, reduced in 1934 to 5,1$. Profit and loss 
variations of larger manufacturers are indicated. 

The average manufacturer's operating control is sadly deficient 
through ignorance of actual costs. A true cost formula is seldom 
apolied, and expenses are not properly budgeted. 'Underselling of own 
product frequently results. 

From the manufacturers 1 viewpoint, the oust and ing problem relates 
to the high and mounting costs of labor. In tneir relation to the 
sales value of merchandise sold direct, labor costs have increased 
nearly 78^ in the oeriod from 19?9 to 1934 according to an independent 
study of random cases. Indirect costs are reflected in disturbances 



9782 



created in an effort to reduce the direct labor ratio to sales, 
complex si taati on creates unfair competitive conditions and the 
racketeering element creeps in. 

Two codes were proposed for the Men's Clothing Industry; one 
by the Clothing Manufacturers Association of the United States of 
America, and one by the Industrial Recovery Association of Clothing 
Manufacturers. The first-named group at tne outset appeared to 
represent about 75 percent of the industry. The real points of 
difference between the groups arose from the fact that the larger 
group had contracts with the Amalgamated Clothing "Vorkers of America, 
while the smaller group was almost entirely independent except for a few 
employers who dealt with the United Garment 'Workers' Union. 

The two rival groups in the Men' s Clothing' Industry could not 
resolve their differences with respect to a plan for administering 
the Code and for wage provisions for the skilled employees. The 
Industrial Recovery Association insisted en equal rights and cowers 
in zny administrative set-up and would not be satisfied with a minority 
representation upon any board of control. 7ith respect to wages above 
the lowest minimum, the minority group insisted upon a flat increase 
of 20 percent for those earning up to $30.00 x>er week. On the other 
hand, the Clothing Manufacturers Association, with labor support in- 
sisted upon a minimum for one of the highly skilled groups and a 
provision that "the existing amounts by which wages in the higher- 
paid classes, up to classes of employees receiving Thirty Dollars 
($30 00) per we<=k, exceed wages in the lowest-paid substantial 
classes shall be jnaintainede " "Shsse differences of opinion were irrecon- 
cilable and were resolved only through Administrative action in 
accepting the code prepared by the Clothing 1 anuf acturers Association. 

Trade practice provisions were designed to eliminate "evils" 
more or less peculiar to the Industry; that is, homework and the 
practices of consignment and "cut, make, and trim." The last-named 
prohibition is directed o'nly at retailers. Additional trade practices 
concerning methods of sale and credit terms, etc., were proposed but 
were never formally approved. It is significant that the Code made no 
provision for learners and apprentices despite some demand, and that 
no satisfactory method was evolved for recognizing the fact that 
somewhat dis-similar methods of production are employed in the Industry. 



CODE ADMINISTRATION— ORGANIZATION AND PROCEDURE 

The Men's Clothing Code provided for a Code Authority composed 
of twenty-tnree members, made up as follows: 

ten members frpm the Clothing Manufacturers Association; 
five members appointed by the last-named association 

from other than members of the Association; 



9782 



-3- - 



t : "0 members elected by the foregoing menbers representative 
of other employers; 

five members representative of labor; and 

one member appointed hy the Administration. 

The Deputy Administrator, in recommending the Code for aporoval, 
stated definitely that the "five members" to be apoointed by the 
Clothing Manufacturers Association were to be selected from the 
Industrial Recovery Association. 

The Clothing Manufacturers Association aoooirted its ten members, 
out could not prevail upon more th?n t"'0 of the minority grouo to 
accept membership. Hence, the remainder of the "five members were 
selected from the Industry at large. The "two" members were not 
selected, a-aiting, according to the Code Authority, some settlement 
of the Cotton Garment controversy. The labor representatives were 
selected bv the Labor Advisory Board and the Administration Member 
rs dulj/ appointed. 

Formal recognition of the Code Authority was lon^: delayed. The 
labor representatives were recognized by official order of July 6, 1334, 
although they had been serving since September of 1933. The labor 
group of five was made up of three officials of the Amalgamated 
Clothing "'.'orkers and t ,,T o officials of the United Garment Workers. 
Fifteen Industry memoers of the Code Authority were first recognized 
October 19, 1934, contingent upon a reorganization of the Code Authority. 
Upon request from the Code Authority, which pleaded probable change s 
in the Act, this recognition was extended until June 16, 1935. 

The Code Authority activities are somewhat departmentalized, The 
principal departments oeing the Label Division, the Compliance 
Division, and the Statistical Division. Much of the Code Authority 
work was carried on by special committees, typical of which were the 
executive Committee, the Compliance and Enforcement Committee, the 
Committee on Fair Trade Practices, and the II (c) Committee (wa£;e 
comoliance) . 

The Code Authority was given official authorization to handle 
"^11 complaints 'in the first instance" on January ??, 1934. Actually, 
the Code Authority at the very outset established its cmi compliance 
procedure raid ^ent about the adjustment of complaints and allegpd 
violations of the Code. The Code Authority's compliance procedure 
was very early the subject of .Administrative review and some question 
was raised regarding methods employed. No outward criticism ns 
made, however, of Code Authority compliance procedure. 

The label was used by the Code Authority as a device for raising 
funds and for gaining compliance. The label regulations did not conform 
in every particular with Administrative Orders X-38 an? X-135 relating 



9782 



-10- 



to the use of labels, and did not appear to have received formal 
approval "by the Administration. The label regulations provided for 
the filing of a compliance certificate which set forth information 
about methods of manufacture, Labels were required on individual 
garments and were to be attacaed daring the process of manufacture; 
they were sold to cover a four weeks' production period, and for cash. 
Labels were withheld or withdrawn only upon authorization of the 
Compliance Council. This last-named provision, which was closely 
adnered to, is significant in that the Code originally gave permission 
to the Code Authority to withdraw labels upon its own findings, subject 
to Administrative approval. 

The Code Autnority empnasized the imoortance of the label in 
raining Code compliance and consistently expended substantial sums 
of money in developing "label mindedness" among consumers. The Code 
Authority felt restrained in its label advertising by budgetary limi- 
tations set up by the Administration. 

The Code Authority first made plans for t'ie submission of a 
budget for Administrative approval in June, 1934. Action was taken 
in this regard in order to meet label requirements. Nevertheless, 
the Code Authority early after its inception made plans for an independent 
audit, at the same time covering employees with a blanket surety policy, 
and providing for the safekeeping of fanes. 

She Men's Clothing Cede Authority carried on its affairs from 
September 6, 1955, to June 30, 1S34, without an approved budget. A 
budget was submitted covering the period from July 1, 1954. to 
December 31, 1S34, and tentative approval of this budget was given 
on January S, 1955. No approval was given any subsequent budget for 
the period after December 31, 1S54, or for a budget covering the 
period from September b, 1933, to Jane 30, 1934. 

The budget for the period ^uly 1, 1934, to December 31, 1934, 
was approved contingent upon the submission by the Code Authority of 
a report with reference to the p'ore economi "il administration of the 
Code and a study of the equitability of the system of label charges 
then in effect. This approval was finally extended by Order No. 
15-50, pending farther order under the same provisions in order to 
give the Code Authority time to submit a new budget to cover the first 
half of 1935. Such a budget was finally submitted and '"=is the subject 
of conferences between the Administration and the Code Authority at 
the time of the Supreme Court decision relative to N. R. A. 

Subject to the conditions outlined in the Order approving the 
budget for the last half of 1954, the basis of contribution, that is, 
the label charge, was changed from $5.00 per thousand to $3. on per 
thousand to apply to labels for use on certain infants' and children's 
varments. 

The activities of the Code Authority, as already indicated, were 



9782 



-11- 



financed by the sale of labels which were purchased by the manufacturers 
of men's clothing. The total of labels sold from September 6, 1933, 
to April 30, 1935, was 137,700,579, yielding the sum of $682,368.77. 
For each of the six-month budgetary periods of July 1, 1934, to 
December 31, 1934, and January 1, 1935, to June 30, 1935, ^n estimated 
net income of $160, onn was provided. This was to provide for expen- 
ditures approxinat ing $30,000 per month. 

The price at which labels -ere sold (equal to h<t per single garment, 
plus the actual cost of sewing on the label) was so slow that the-re 
was no material addition to the cost of the garment. 

In keeping with the powers authorized by Article VIII of the Code, 
members of the Industry were required to furnish payroll and production 
data to the Cede Authority. An arrangement was entered into with the 
Bureau of Labor Statistics and the Census Bureau '-hereby the reports 
•^ent directly to thes° Bureaus for certain compilat ions and tabulations 
before being forwarded to the Code Authority. This arrangement appeal's 
to have been satisfactory to all concerned. The reports made to the 
Code Authority were used almost entirely for compliance purposes. 
Industry statistics were not reported regularly to theAdministrat ion. 

Most of the Interpretations recommended by the Code Authority 
and approved by the Administration had to do with the classification 
of workers between employee groups mentioned in the Code; that is, 
manufacturing, non-manufacturing, supervisory, cutter, and off-presser. 
These interpretations were found necessary because certain employees 
did not fall clearly into any one of the classif icat irns. The need 
oT1T~def ihiTe classification was further emphasized by the varying 
ratesof nay, methods of payment and hours of work peculiar to the 
respective groups. For example, Administrative Order No. 15-23, 
aated July 19, 1954, provided that: "A worker who cuts a piece of 
lining from the bolt and uses a pattern as a guide for cutting said 
lining, is a cutter within the definition." This interpretation 
placed the lining cutter in the category of the "cutter" — the highest- 
paid manufacturing class recognized in the Code, and entitled to 
pay of $1.00 per hour, otherwise, this lining cutter might have been 
paid in some plants at a lower rate of pay, with the 40 cents per hour 
minimum as the base rate. 

The most significant interpretation made by the Code Authority 
and belatedly given Administrative approval was that "the words 
'substantial classes' as used in article II, subdivision (b) are to 
include 20 percent of the total number of employees employed in any 
establishment." This interpretation found frequent use in the enforce- 
ment of the clause concerning wages above the minimum, and was the 
subject of much controversy and criticism within the Industry. 

The records indicate the lack of complete cooperation between 
the Administration and the Code Authority with respect to interpre- 
tation procedure. This was due in part to delay in working out 
general N.R.A. procedure and in part to neglect upon the part of the 



9782 



-12- 



Administration, For instance, certain interpretations recommended 
by the Code Authority early after its inception were not acted on by 
Administration officials until December, 1934. Others acted on by the 
Code Authority early in March, 1954, did not receive Administration 
approval until the middle of July» 1934. 



LABOR UNDER THE CODE 

The Men's Clothing Code provided for a 36-hour week except for 
certain grouos such as repair shop crews, engineers, office staff, 
etc. , who could not work in excess of an average of 40 hours per week 
during any year. The tailor-to-the-trade and uniform manufacturers 
branches of the Industry, because of the Industry, because of the 
highly seasonal character of their operation?, were allowed overtime 
at regular rates for specific periods determined by the Code Authority. 

Both codes originally proposed for the Industry asked for a 40- 
hour week maximum, on the assumption that this would absorb completely 
the unemployed attached to the Industry. The Research and Planning 
Division of N.R.A. , however, at the time of the writing of the Code, 
concluded that neither a 40-hour "-ee 1 : nor a 35-hour week would reemploy 
the idle attacned to the Industry, unless there was a considerable 
increase in demand. 

As provided in the Code, the Tailors-to-the-Trade and the 
Uniform Manufacturers were granted overtime regularly each' peak 
season. This overtime was extended ordinarily in the amount of four 
hours extra per week for a period of from eight to ten weeks at 
regular rates of Day on condition that the apulicant give evidence 
of running to capacity. 

The entire Men's Clothing Industry, excepting Tailors-to-the- 
Trade and Uniform Manufacturers, was granted overtime in the amount 
of four hours extra, per week beginning March 4, 1935, and ending 
April 6, 1935. This overtime was granted upon the request of the 
Code Authority and for the reasons (a) o^ late delivery of woolens 
and (b) the excess of fancy models which unbalanced highly skilled 
sections of the Industry. This exemption was protested by the 
Industrial Recovery Association. Also the Philadelphia Joint Board 
of the Amalgamated Clothing '.Yorkers protested the exemption on the 
grounds that the extra hours were not needed while workers were yet 
unemployed and that it was merely an opening wedge for a longer work 
week. 

In the few exemptions granted from hours provisions to groups 
and individuals no distinction was made between enraloyee hours and 
machine hours. All reauests for employee hours exemptions have 
carried automatically, of course, a request for machine hours ex- 
emptions. The Industry has operated customarily on a one-shift 
basis and the 36-hour week established has not created a demand for 



9782 



-13- 



a double shift. The Code Autnority consistently refused to recommend 
exemptions from the labor provisions : Of* the Code , with. but one or two 
exceptions. The most notable of which are 'the 'Cases, of Puerto Rico, 
where the competition meant little, and five Up "»' Orleans, firms which 
produced cotton garments in competition with firms operating under 
the Cotton G-arraent Code. Only a few additional exemptions were granted, 
and those for short periods covering emergency situations. Most of 
the denials of exemptions from hours provisions were denied on the 
grounds of the surplus man power in the Industry. 

The Men's Clothing Code as originally adopted provided for a 
minimum wage of forty cents per hour for manufacturing employees 
and $14.00 per week for non-manufacturing employees in the northern 
area and 37 cents wr hoar and $13.00 per week respectively for the 
Southern area. For two higher payed occupational groups, cutters 
and off-pressers, there were set minimoms of $1.00 and 75 cents per 
hoar respectively. Tne Code provided, furthermore, for the setting-up 
of a Committee to administer the wage provisions. 

The codal provisions respecting pay were pmended to alio 1 " 7 the 
employment of apprentices at 70 percent of Code wages for the period 
of tnree months from December 11, 1933, to permit readjustment to the 
Code's abolition of home work. Handicapped workers could be employed 
at 70 percent of the Code minimum wages. Also, the Code was amended 
to allow lower rates of -cay tnan originally provided for workers on 
certain cotton or part cotton garments. 

During the first week of February, 1935, a hearing was held in 
V.'ashi.igton relative to proposals from the Code Authority that classified 
rates of pay be set up in the Fen's Clothing Industry. The amendment 
as proposed by the management members of the Cede Authority would 
classify workers into about 15 classes with rates of pay, including 
those now in the Code, of $1.00, 75 cents, 65 cents, 50 cents, and 40 
cents. This amendment was designed chiefly as a substitute for the 
codal wage orcvision which was found most difficult to enforce; 
namely, that "the existing amounts by which wages in the higher-paid 
classes, up to classes of employees receiving Thirty Dollars ($20.00) 
per week,' exceed wages in the lowest-paid substantial classes shall 
be maintained. " 

As in th^ case of hour provisions, the Code Authority declined 
+o grant exemptions from the wage provisions of the Code. Puerto 
Pico ar-^in appears an exception, and the only one. The Code Authority 
steadfastly refused to consider an apprenticeship provision for the 
Code, arguing that the unemployed in the Industry must first be cared 
for. 

The ten's Clothing Code Autnority was very aggressive in the 
matter of enforcement and efforts tc gain compliance. A comprehensive 
analysis of compliance is not possible inasmuch aft the greater part 
of alleged violations wefe -adjusted. Dythe Code, Autnority. Deputy 



9782 



-14- 



Administrator Mi Di Vincent made a complete survey of the enforcement 
activities of the Code Authority up to August 30, 1934, and reported 
that that Code Authority's investigators had covered all the important 
markets impartially and that the provisions of the Code had been 
enforced without discrimination. The only adverse criticism was 
directed at the Gode Authority's strongly -vorded letters to alleged 
violators of the Code. 

In the matter of compliance the Code Authority experienced its 
greatest difficulty with the provision relating to wages of the higher- 
paid classes. I uch confusion and dissatisfaction developed in certain 
quarters of the Industry because of the somewhat arbitrary manner in 
which it was necessary for the Code Authority to interpret and apoly 
clause II (b) of the Code, '"hich relates to the wages of the most 
skilled groups. This confusion was increased by the fact that the 
Administration .was late in giving approval to interpretations relating 
to clause II (b). In trying to enforce II (b) , the Code Authority 
often had to resort to compromise ,or arbitration, sometimes with 
Administration aid, which in turn gave rise to the criticism that 
unusual and unjustifiable powers were assumed , as for instance in the 
case of L. Grief and Brother, of Baltimore, Maryland. 

Pre'-Code statistics on men's clothing are not directly comparahle 
to statistics collected under the Code , yet certain compilations 
based on payroll and oroduction .6 .ata give some indication of trends 
in the Industry. The Code Authority estimated that approximately 
140,000 workers were employed during the Karen peak season of 1934 
as against 108,000 for the same season of 1S33. ^rom March, 1934, 
to September, 1934 j ■ however, there was a reduction of about 15 percent 
in the number of oersons employed. 

Hourly wses f or al 1 manufacturing employees, including cutters 
and off-pressers, in July. 1934, averaged 67.1 cents per hour. In 
March, 1933, the average was approximate ely, 42 cents per hour. Hourly 
earnings reached their peak in the Industry during 1924 — 76 cents per 
hour. During August, 1934, manufacturing employees worked 27.8 hours 
per week on the average, while weekly earnings averaged $18.63. It 
is understood that the. Spring season of 1935 was 'comparable to that 
of 1934, witn around 140,000 employed. This is in part exolained by the 
slowness of the Fall season of 1934. 



TRADE PRACTICES 

The principal fair trade practice provisions of the Ten's Clothing 
Code relate to sale of garments on consignment, the oractice of "cut, 
make, and trim," and sellin? below cost. 

Consignment selling was pronibited in the Ten's Clothing Industry 
with the full approval of all branches of the Industry. It was generally 
agreed that consignment selling in the long run tended to injure both 



9782 



-15- 



the seller and buyer whether financially strong or weak and led to the 
breaking-down of labor standards. 

Five exemptions were granted from the provisions prohibiting 
consignment selling; the. -orincipal in point of dollar volume was 
that of S. I. a kr an sky and Sons, Inc., Phil ^delphia, Pa. All exemptions 
were granted for the purpose of allowing the participating firms to 
prepare in an orderly way for a change to normal selling. 

The "cut, mike, and trim" practice was outlawed by the Code 
insofar as retailers were concerned:. All branches of the Industry- 
were united in the opinion that, the "cut, make, and trim" practice 
was pernicious and should be stamped out. It was argued that the 
practice made impossible an orderly supervision of hours of work, 
wages and sanitar- working conditions in the plants so engaged. 

I;o exemptions «erp granted from the "cut, make, and trim" clause. 
On tne contrary, the Code Authority made reoeated efforts to strengthen 
this clause by making it applicable to wholesalers and jobbers as well 
as retailers. Sears, P.oebuck and Company made strenuous efforts to 
obtain exemption, but was denied after public hearing. 

Tne Code carried in Article X a prohibition against selling 
belo'v cost. Soon after its organization, the Code Authority after 
considerable study and investigation submitted for Administrative 
approval a cost formula designed for use throughout the Industry. 
The formula provided, with explanations, that the total cost of a 
garment should be arrived at by adding to the -prime cost -m amount 
ea^al to 5 percent of such prime costs for General I anuf acturing 
Overhead, and by adding to the new total so obtained, an amount 
equal to 11.11 per cent for Selling and Administrative Overhead. 
No provision was made for profit, but the percentages were to be 
mandatory. 

After considerable delay, the Administration finally advised 
with respect to the proposed cost formula tnat the Code would not 
permit the stipulation for tne entire Industry of a mandatory per- 
centage for overhead, regardless of the merit of the percentages 
chosen. The final outcome was that the Code Authority made no effort 
to enforce the selling below cost provisions. '..herever comol=ints 
of violations of trade practice provisions were filed, an investiga- 
tion of the alleged violation was made by the Code A-ithoritv to 
discover whether or not the labor orovisions of the Code were being 
observed. 

After many conferences wLtn retailers and wholesalers, the Ten's 
Clothing Code Authority was able to form ilate certain fair trade 
practice provisions which met -ith the aoaroval of the groups concerned. 
These proposed fair trade or^ctices were submitted to the Administration 
for consideration, and related in the main to: discounts, terms of 
sale, return of goods, sales at retail, labeling of goods (quality), and 
cash advertising allowances. 



9782 



-16- 

.. > .CHAPTER I 
DEFINITION A1I3 SCOPE 07 INDUSTRY 



I. CODE DEFIHITI01I AND JURISDICTIONAL DISPUTES 

The original codal definition of the Men's Clothing Industry reads: 

"The terra 'Clothing Industry' as used herein is defined 
to iraan the manufacture of. men's, "boys', and children's 
clothing, uniforms, single knee pants, single pants, 
and men's summer clothing (exclusive of cotton wash 
suits) a" 

The above definition was the result of several conferences colled 
to resolve the differences of opinion as to what the code for the Indus- 
try should properly cover. It early developed that the definition for 
the Lien's Clothing Industry was in conflict with proposed and oftentimes 
accepted codal definitions for other industries. Among the industries 
having codal definitions or suggested- codal definitions in conflict with 
the definition of the Hen's Clothing Industry are found the Cotton Gar- 
ment Industry, the Merchant and Custom Tailoring Industry, the Rainwear 
Division of the Rubber Industry, the Textile Examining, Shrinking and 
Refinishing .Industry, the Shoulder Pad Manufacturing Industry, the Slit 
Fabric Manufacturing Industry™ the Coat Front Manufacturing Industry, the 
Infants' 'and Children's Wear -Industry, the Knitted Outerwear Industry, 
and tailoring shops operating under the authority of the United States 
Government. 

The Men's Clothing Code Authority "became embroiled in many juris- 
dictional disputes and controversies, and. before proceeding to an analysis 
of individual conflicts, attention is directed to the following resolution 
drawn up March 2, 1934, by George L c Bell, Executive Director of the Men's 
Clotling Code Authority, and proposed to the- Code Authority at the "Sub- 
stance of Resolution for Code Authority to Submit at Conferences of Code 
Authorities at Washington NextlTeeko" (*) This resolution indicates rather 
clearly, a fter about six months' experience, the Code Authority's feelings 
with respect to the extent, nature, and general result of the many and 
seemingly interminable jurisdictional disputes. The resolution expres- 
sive of the Code Authority's oninion is as follows: 

"WHEREAS, this actual experience hp,s disclosed the 
fa.ct that practically all the difficulties and lack 
of ability to enforce the provisions of the Code 
have been brought about by jurisdictional disputes, 
which have permitted entire sections of the indus- 
try and large numbers of tianuf acturers to plead im- 
munity from enforcement of the Code because of largely 
unwarranted claims that they were subject to some 

(*) Bound Copy of Resolution Proposed by George L. Bell, Executive 
Director, (Men's Clothing Code Files.) 

978?. 



-17- 



*** 



other code that has been promulgated, or to some 
proposed code that is under consideration, and 

n THEREFORE, be it resolved that the Men's Clothing 
Code Authority, as a result of this actual exper- 
ience which cm be substantiated by factual evi- 
dence, strongly urges and recommends that these 
jurisdictional disputes and attempts to promulgate 
innumereble codes for small branches of the indus- 
try which are incapable of enforcing the provisions 
of a code, be terminated b 7 an excutive order desig- 
nating the Men's Clothing Code as the basic code 
covering all manufacturers of men's outer clothing; 
with the Men's Clothing Code Authority as the supreme 
administrative body; with special provisions, where 
necessory, for subdivisions of the industry; and with 
sub-committees, representing the interests of sucn 
subdivisions, for presenting and handling their pro- 
blems with the lien's Clothing Code Authority. 

"This resolution is tendered because we believe that 
it is highly impracticable, if not impossible, to de- 
fine -oro-oerly and clearly subdivisions of the industry 
that claim to be entitled to separate codes. 

"An unconscionable amount of time has been consumed 
by members of the Lien's Clothing Code Authority and 
by members of the staff in connection with innumer- 
able hearings and conferences on such proposed codes 
as the merchant tailors, the canvas coat front mak- 
ers, the shoulder pad makers, the infants' and chil- 
dren's -ear manufacturers, etc., etc. These hearings 
and conferences, stretching over many months, made 
it clear that the national Recovery Administration 
finds it -oractically impossible to make clear code 
definitions which will insure that everyone connec- 
ted with any uart of the ken's Clothing Industry is 
included under some fair competitive code. Further- 
more, the actual experience of attempting to classify 
various garments through the medium of the Inter-Code 
Committee with the Cotton Garment Code proves that 
months and months go by without any action and that 
in the interim literally hundreds of manufacturers 
escape the application of any code to their business, 

A. The Cotton Garment Indus try . (*) 

The jurisdictional conflict between the Men's Clothing Industry and 
the Cotton Garment Industry was of major consequence, and because of the 
complicated nature of the problem, as well as its importance to both indus 
tries, a detailed consideration of this problem with supporting da will 

be found in Aooendi:; C. 



(«) gre^re^ V Writer E. Woodford, Jr., member of the Men's Clothing 
Industry Study group, Sezctile Unit, Industry Studies Section, 
Division of Review, H3A» 

£782 



-18- 

Prior to the last few years, Cotton Garment plants confined their 
production mostly to overalls, work pants, and wash suits for use as 
work clothing only, and Hen's Clothing plants produced the great majority 
of separate trousers of wool or part wool materials. But the recent 
fashion trend toward the use cf separate costs and trousers, the narked 
improvement in appearance, style, ard durability of cotton and cotton 
mixture fabrics, at prices far below those of woolen fabrics, and the 
increased interest in sports and outdoor life throughout the entire 
country, have created a large demand for separate snorts and dress trou- 
sers, at the expense of the work pants and overalls of former days. 

Cotton Garment Manufacturers, to meet this lessening demand for 
overalls commenced the production of better line of separate trousers, 
in competition with the regular clothing factories. They found that 
such trousers, as well as ng,ckinaws, melton jackets, play suits, and 
similar garments, could "be made without changing their plant equipment, 
personnel, or organization, could be sold through the sane channels of 
distribution, and enabled then to keep their factories in operation 
throughout practically the entire year. 

When the Codes of Pair Competition were formulated and approved 
in 1933, this competitive and overlap >ing situation became a major -ore— 
blen to the manufacturers of both industries, due in a. large measure to 
the more favorable wage and hour provisions in the Cotton Garment Code 
as originally approved., and the production of work and dress pajits by 
prison labor at even- lower wages. 

This jurisdictional controversy, especially on single pants and wash 
suits, thus began with the effective dates of the Codes, aJid was never 
satisfactorily adjusted in spite of the continuous efforts of the national 
Recovery Administration, the Code Authorities, and the Industry members 
to settle the conflict by amending definitions, wages, hours, etc., of 
both Codes. 

This Study is aimed to trade, in chronological order, the various 
steps taken in attempting to adjust this problem, the viewooints of the 
interested factions, the objections raised to the amendments adopted, 
and the final plan proposed just before the Supreme Court decision of 
May 27, 1935, which from all indications would have met with the approval 
of the majority of both industries and. would have been successful in 
placing the production of these disputed garments on a fair and equitable 
basis under both Codes* 

1. The Cod.es as Originally Approved. 

The lien's Clothing Code, approved August 26, 1933, established a 
36-hour maximum week, a 37^ P er hour Southern and 40^ per hour northern 
minimum wage, with higher classified wages for cutters and off-pressers, 
and 37rf per hour rate for workers on single knee pants. 



9782 



-19- 

The Cotton Garment Code, aoprb've'd November 27, 1933, established 
a 40-hour maximum week, a 50^ per hour Southern, and 32-jfi per hour Nor- 
thern minimum wage, and no classified wages. 

, Definitions in both Codes were incomplete and conflicting, the 
Clothing Code including "single knee pants, single pants," and the Cotton 
Garment Code including "men's and boys' pants in chief content of cot- 
ton." 

Thus, with single pants included in both Codes, and hour and wage 
advantages permissible in the Cotton Garment Code, conflicts were in- 
evitable on pants and wash clothing. Clothing manufacturers immediately- 
protested that Cotton Garment manufacturers were producting pants and 
wash suits at much lower consts, and were seriously threatening their 
buisness on such garments. 

2. Amendments of December 18, 1933. 

. A Public Hearing was held November 27, 1933, on wash suits. A 
group of five New Orleans firms, manufacturing cotton and linen wash 
suits and operating under the Men's Clothing Code, claimed their gar- 
ments were actually sold in competition with cotton wash suits ma.de by 
Cotton Garment manufacturers, and that the higher wages and shorter 
hours of the Clothing Code imposed an unjust hardshin on them. The 
Goodall Company, manufacturers of "Palm Beach" suits, submitted similar 
arguments. 

The Cotton Garment manufacturers, on the other hand, claimed that 
their cheap wash suits, produced in quantity lots, like overalls and 
work clothing, did not compete with the higher-priced suits sold for 
dress use; and the Men's Clothing Code Authority argued that all wash 
suits of the better types \ised fdr dress purposes were summer clothing 
and should be made under the same conditions as all -other summer cloth- 
ing such as tro-oical worsteds, silks, silk and wool mixtures, etc. 

On November 23, 1933, a Public Hearing was held on single pants. 
Manufacturers of cotton single pajits argued that the low selling prices 
of their garments necessitated their production under the lower wage 
scales of the Cotton Garment Code. Manufacturers of wool pants, most of 
whom also made some cotton pants, claimed that all pants were articles 
of Men's Clothing, and should be under the Clothing Code; that a pants 
factory could not be successfully operated under two Codes; and that 
many cotton pants plants were greatly increasing their production of 
wool pants, to the decided detriment of those manufacturers operating 
under the Men's Clothing Code. 

These hearings and subsequent conferences failed to produce any 
satisfactory agreements between the two industries, and the ITatinal 
Recovery Administration inaugurated the following changes in the tr:Q 
Codes, approved on December 13, 1953. 



9732 



-BO 



(a) Men's Clothing Code. 

"Definition on these garments was changed to "single pants (except 
work pants or single pants when made in work«clothing factories) and 
men's summer clothing (except men' s w?.sh suits of 100$ cotton content, 
when made in work-clothing factories in conjunction with work clothing)." 
Minimum.. wage to workers on single pants was to be 34^ per hour in the 
South and 37 rf per hour in the North. Minimum wage "to workers on men's 
wash suits of 100$ cotton content was to be 34rf per hour in the South 
and 37f£ per hour in the North; to workers on other summer clothing, '37^ 
per hour in the South and 40^ per hour in the North, Minimum wage to 
cutters on all men's wash suits and/ or summer clothing was to be 85f£ 
per- hour and to of repressers of such garments 60^ per hour in the South- 
ern section of -the Industry. 

(b) Cotton Garment Code. 

Definitions on these garments were changed to "(10) men's and boys' 
pants, when made in work-clothing factories," and "(14) men's wash suits 
of 100$ cotton content, when made in i7ork~clothing factories in c onjunc- 
tion with work clothingr" Minimum wage to workers on men's wash. suits 
of 1 100$ cotton content and/ or men's and boys' pants when made in work-clothing 
factories in conjunction with work-clothing or work pants was to be 34j# 
per hour in South;, and 37.;* per hour in North. 

An Inter-Code Committee of seven (7). persons was appointed t o admin- 
ister and supervise enforcement in respect nf cotton wash suits, and/or 
single pants. 

It was hoped that these Code changes would tend to clear up this 
serious competitive situation between these industries, but further study 
and recommendation was deemed necessary, hence the appointment of the 
Inter-Code Committee. 

3. The Inter-Code Committee 

The Committee first met on Ja.nuar;/- 5, 1934, and the problem of 
classifying single pants was approached primarily from the standpoint 
of fabric. After numerous meetings and votes on disputed fabrics, this 
Committee recommended to the Administration a further amendment to the 
Cotton Garment Codec, 

The Inter-Code Committee devoted its entire time to the oants 
question, so the men's wash suit problem was handled in a different 
manner. After continued protests from the New Orleans manufa,cturers, 
Special Deputy Administrator Morris Greenberg was sent to New Orleans 
to make a complete survey of the situation, and submit recommendations. 
As a result, Administrative Order No 15-8 was approved February 23, 1934, 
permitting these firms to work an additional four (4) hours per week, and 
an agreement was made with the Men's Clothing Code Authority permitting 
them to employ up to 30$ sub-standa.rd workers and exempting their pla„nts from 
the application of Article II (b). 



9782 



-21- 

4. Amendment to the Cotton Garment Code — March 15, 1934. 

In accordance with the recommendations of the Inter-Code Committee, 
this amendment rras r -. proved setting up a minimum rate of 30rf er hour in 
the South, and 32-^/f per hour in the ITorth, for the production of pants 
of certain specified fabrics, such as denims, coverts, ducks, etc., and 
rates of 54rf and 37., J on certain shads of cnrduroy and all other fabrics 
except those listed under the other classification. It also abolished the 
Inter-Code Committee and transferred all its powers and duties to a Special 
Administrator for further study and recommendations, Godfrey Bloch was 
appointed ^s Special Administrator. 

It soon became apparent that this attempt to settle the question by 
classification of fabrics would not solve the difficulty, and that it 
would be impractical and impossible to 'attempt to force manufacturers to 
pay' higher wages on certain types of cloth than on others, when both were 
worked on by the same operators. Many manufacturers made no effort to 
differentiate between fabrics, and continued to -pry the lower wage scales 
on all garments. I'umerous comjladnts of unfair competition and objections 
to the new amendment were filed r with the Administration. 

(a) Report of the Special Administrator. 

Mr. Bloch and his staff found it impossible to a.cconuish much in 
administering or supervising enforcement, but they did make a careful in- 
vestigation and collecte:. very complete production statistics and data. 
He recommended that all single pants be put together, if oossible, under 
one Code or division of one Code, on a. 36-hour basis, imder Cotton Garment 
Code wages. If this should prove impractical , all wool pants should be 
m,- de under the Men's Clothing Code and all cotton pants under the Cotton 
Garment Code, at 34^ and 37^ minima and 36f!-hour maximum, and that men's 
wash suits be produced under these same provisions. 

5, Amendment to Cotton Garment Code — August 21, 1934. 

Article III of the Cotton Garment Code required a report within 
60 days as to whether the 40-hour week was resulting in sufficient in- 
creased employment. Because this report had not been made, and because 
the 40-hour weak of the Cotton Garment Industry had oeea subject to 
much criticism and complaint from the other garment trades, a Public 
Hearing wa.s called for June 18, 1934, to consider reducing the hours 
to 36 end also to consider the applications of the Men's Clothing Code 
Authority and the Dress Code Authority for changes in definitions on 
certain garments. The hearing continued for five days (the first two 
days devoted to the hours question, the remainder to the overlap prob- 
lem), and in view of the pronounced hostility of the Cotton Garment 
manufacturers it was not deemed advisable to make further changes in 
definitions, so no action was taken on the recommendations of Special 
Administrator Bloch as. to pants and --ash suits. 

A reduction in hours, however, was considered essential, so this 
Amendment of August 21, 1934, without the approval or consent of the 
Code Authority, placed the Cotton Garment Industry on a. 36-hour week 
basis, with minimum weekly wage rates of $12.00 in the South and $13.00 

9732 



-22- 

in the North, and raised piece rates by not less than 10$. This Amend- 
ment was to become effective October 1, 1934. This equalization of 
hours and wages should have been a most important factor in the settle- 
ment of the unfair competitive situation between the two industries on 
the -oroduction of pp.nts and wash suits. 

However, due to the flood of protests received from the Cotton 
Garment Industry, particularly the Southern manufacturer, two stays of 
this Amendment were issued by the Adninistrrt ion, delaying the effec- 
tive date until December lsto Then, on December 1, 1934, a certain 
group of Cotton Garment manufacturers filed an injunction suit against 
the National Recover:/ Adninistrr ti> n, seeking to restrain the enforce- 
ment of the new minimum wage and 36-hour week provisions. So that from 
the approval date of this Amendment, August 21, 1934, until the termi- 
nation of this' injunction suit on January 23, 1935, no actual progress 
was made towards the settlement of this overlaying competitive contro- 
versy between the two industries. 

6. Developments from December 1, 19' ~A t to Supreme 
Court Decision, Lfey 27, 1935. 

However, the Administration, full?/ realizing the seriousness of the 
situation and the need for some constructive action, worked on this pro- 
blem continuously from August, 1934, on, and Deputy Administrators 
Op jenheim and Greenberg devoted a great portion of their time to con- 
ferences with Industry members and Code Authority members in an effort 
to effect some solution. 

: In October, 1954, Deputy Administrator Greenberg submitted a pro- 
posal by which all wool pants should be made under the Llen'-s Clothing 
Code and all cotton pants under the Cotton Garment Code, with equalized 
working conditions as to hours and wages. 

In November, Deauty Administrator Oopenheim drew up .an order, 
similar in most respects to Depute Administrator Greenberg 1 s, and sub- 
mitted it to the industries. The Southern rnanuf acturers, as usual, ob- 
jected most strenuously, but the Associated Pants I lariuf acturers, repre- 
senting the majority of Cotton Garment plants manufacturing semi-dress 
pants, approved the pirn in most of its details. 

No definite action could be taken ixntil the 36-hour week for the 
Cotton Garment Industry was definitely made effective. But after the 
termination of the injimction suit, Dewuty Administrator O'openheim 
again submitted this pants order (with several other changes, includ- 
ing a provision for an Exemwtioa Committee), and the Cotton Garment 
Code Authority at their meeting on March 11, 1935, approved this order. 

Southern manufacturers again wrotested vigorous ly, and action was 
again held up. The Cotton Garment Code Authority, at its meeting on 
April 30, 1935, appointed a committee to confer with the ken's Cloth- 
ing Code Authority and work out the details of the order, so that same 
could be nut into effect at the earliest possible date. ■ 



9782 



-25- ■• - 

In the meantime, Deputy Administrator Oopenhein, after conferring 
with various Industry members, had suggested a further provision for 
this order which would allow Cotton Garment olonts to make a small 
percentage of their pants production of wool, and lien's Clothing plants 
to make a percentage of their pants production of cotton, and still 
operate under only their own Codes. ■ 

The majority of both industries ..-ere reacting so favorably to 
these latest proposals that, at the tine of the Supreme Court decision, 
it appeared to be only a quest ion of a few more weeks before these amend- 
ments would have been officially approved md added to these Codes, and 
this jurisdictional controversy over the production of single pants and 
wash suits finally and definitely settled in r n-nner satisfactory to 
all parties concerned. 

The inequality of the hour and wage provisions, of course, was the 
principal cruse of the controversy, and with incomplete definitions of 
the garments in question in the original codes, conflict was bound to 
occuri Some of the earlier changes madd, such as establishing different 
wage rates for different fabrics, were approved, it -'ould seem, without 
sufficient consideration of all an : ;les of the problem, and were soon 
found impractical and impossible of enforcement; but the final solution 
rlso, of course, was ouch easier to achieve after wages and hours had 
been equalized. 



9732 



-24- 

B. "Merchant And Custom Tailoring Industry. 

In the minds of members of the Hen's Clothing Code-Authority and 
the Administration there was some jurisdictional conflict "between the 
definitions of the Merchant and Custom Tailoring Industry Code and the 
Men*s Clothing Industry Code. On September 27, 1934, we find the 
Administrator writing the Code Authority: 

"You are doubtless aware that the definition of the in- 
■ dustry in the Merchant and Custom Ts j.lors' Code and 
the lien's Clothing Code are in conflict."* 

"It appears that the Men's Clothing Code should "be 
amended so that the definition of the industry will 
exclude those who are included in the definition .of 
the industry for the Merchant and Custom Tailors' 
Code. Will you kindl3 r inform me what action has "been 
taken or is contemplated "by the Code Authority in re- 
gard to this amendment ? " 

Also, as late as January 2, 1935, we find the Administration again 
advising the Code Authority that the hearingscheduled for January 21 
offers an opportunity to clear up differences "between the industries. 

The Men's Clothing Code Authority had opposed the granting of a 
code to the merchant tailors in the cutset, but seeing that such ob- 
jections were to no avail, insisted that the Merchant and Custom Tailors' 
Code provide a definition "so as not to allow anyone who is in fact a 
'tailor to the trade, ' or in reality a manufacturer to come under the 
provisions of that code. " ** 

The definition of the Merchant and Tailoring Industry as approved 
on July 31, 1934, in attempting to arrive at a clear-cut distinction 
between its membership and that of the Men's Clothing Industry, resorted 
to a simple statement that "the industry is not intended to include members 
of the Men's Clothing Industry generally known in that industry by the 
terms of s tailor s-to~the~trade, ' 'wholesale tailors,' or 'direct to the 
consider wholesale tailors,' or ' special order houses. 1 " This statement 
or the need for the statement calls attention to the fact that there is 
essentially little difference betwesn the operations and nature of the 
business carried on by merchant tailors and the aforementioned groups 
which belong to the Men's Clothing Industry. The essential but easily 
confr.sed or misjudged difference appears to lie in the assumption that 
the product of merchant tailors is almost entirely hand-made and hence 



(*) Letter dated September 27, 1934, from M. D. Vincent, 
Assistant De'outy Administrator, to David Drechsler, 
Secretary, Man's Clothing Code Authority. (Men's 
Clothing Code Files.) 

(**) Men's Clothing Code Authority report of Committee on 
Compliance and Enforcement, March 2, 1934. (Men's 
Clothing Code Files.) 

9782 



-25- 

of a superior quality and workmanship. * 

On the bther hand, it is recognized that the Merchant and Custom 
Tailoring definition' did attempt to exclude those recognized as owing 
allegiance to the Hen's Clothing Code, while the definition of the Lien's 
Clothing Industry was drawn so as to make no recognition or exclusion 
of the Merchant and Custom Tailors. 

This jurisdictional conflict was intensified hy the fact that 
functionally the Merchant and Custom Tailoring Industry overlaps not 
only with the Men's Clothing Industry, hut with the Retail Trade as 
well, 

"As a natter of fact, the average consumer is not aware, 
in most cases, when he purchases a so-called 'custom- 
made' suit, whether he is buying , f.rora the stock of the 
retailer, from a merchant tailor, from a tailor-to-the- 
trade house or a special order hoiise of the mass oro~ 
duct ion clothing factory. Actually, from the consumer's 
viewpoint, \inless he h?A some actual acquaintance with 
the industry, there is no substantial difference in the 
assemblage of the garment which he purchases from any 
one of the three sources mentioned above. Therefore, 
it becomes apparent that any code definition of the Mer- 
chant and Custom Tailoring Industry, must, of necessity, 
be arbitrary; and being arbitrary, must engender hard- 
ship and controversy somewhere. "** 

The Amalgamated Clothing Workers of America, at public hearings 
held January 27, 1934, in consideration of a proposed Merchant and 
Custom Tailors' Code, through their representative, Hyman Blumberg 
(member of the Men's Clothing Code Authority), objected to any pro- 
posal establishing a difference between the tailor-to-the-trade houses 
and the merchant tailors as defined in the code under consideration. 
The tailor»to-the-trade houses were recognized definitely as being under 
the Lien's Clothing Industry Code, but the point at issue so far as this 
union representative was concerned was that certain workers under both 
codes were 'doing similar work and to a certain extent were in direct 
competition with each other, and hence were considered subject to 
Amalgamated organization or affiliation if already organized. This 
bond of economic interest uoon the part of workers in custom tailoring 
shops and those -producing "ready-to-wear" clothing has been recognized 
subsequent to the termination of the codes by the announcement of a 
working agreement between the Amalgamated Clothing Workers and the 
Journeyman ' s Tailors Union. ; . 



(*) 

approval of the. Merchant and Custom Tailoring Code. 
See Approved Code ITo. 494, 

(**) Code History Volume I, Page 89-91, Merchant and Custom 
Tailoring Industry. 



5732 



-26- ■ -. 

The jurisdictional dispute 'between the Hen's Clothing Industry 
and the Merchant and Custom Tailoring Industry, it appears, sometimes 
lead to the disorganization of entire market areas. As evidence of 
this, attention is directed to the following extract from a letter of 
complaint written May 7, 19!35>- to Morris Greenberg, Executive Director 
of the Lien's Clothing Code Authority: by William Stanley, Executive 
Secretary, Contracting Tailors Association^ of California. 

"In this particular market, "because of the peculiar char- 
acter of the "business, we have here conditions entirely 
different from those in other sections of the country.; 

"In San Francisco and Oakland there are a few merchant 
end. custom tailors who for the reason that their, garments 
are "being cut with the use of patterns cut for each in- 
dividual customer and made according to the specifications 
of the lierchant and- Custom Tailor irig Code, are really jus- 
tified in operating under the jurisdiction of that code 
and use its 'labels. 

"With these few exceptions, the tailoring "business is 
done principally by what are known as 'so-called merchant 
tailors', who x in many instances cut their garments with 
the use of- 'block patterns and- who in. every instance have 
their garments made in contract shops where special ma- 
chines are in operation,. These tailors should operate 
under the jurisdiction of the Men's Clothing Code, "but 
in some instances they do not recognize or abide by any 
code and are continuing to free-lance. This is made pos- . 
sible due to the fact that there are two codes in one in- 
dustry and it allows, these tailors to switch from' one ' . 
code-to the other and at the same time recognizing' neither. 
This causes confusion and is very detrimental to the in- 
dustry in general, especially as one code is "being en- 
forced and the other is not." 

C, Textile Examini n g. Shrinking, and Hefinishing Industry . 

The Code for the Textile Examining, Shrinking, and Refinishing 
Industry, approved August 6, 1934, concerns an industry which is 
strictly of the service character -in its relations to the Hen's 
Clothing Industry. The possibility of conflict of definition arose 
from the fact tha.t certain clothing manufacturers performed in their 
own shops the functions covered by the code definition for textile 
examiners. The Textile Examiners' Code did not specifically exempt 
operations carried on in clothing factories, yet it implied a cover- 
age of independent establishments b~ r referring to operations on 
"woolen and other woven fabrics owned by others." It appears at any 
rate that difficulties arising between these two industries, if any, 
were not brought to the attention of the .administration. 



9782 



- .7- 

D. Shou lder Pad Manufact uring I ndastry and Slit Fabric 
i " anuf ac txn i ng I ndus t r; r , 

730 th the Shoulder Pad Industry and the Slit Fabric Industry are 
service industries to r.en's clothing manufacturing. As in the case of 
te::tile shrinking, certain of the -or o ducts or processes performed 
under these codes were likewise performed in the plants of men's 
clothing manufacturers. In the case of these codes, however, the 
men's clothing group influenced the writing of definitions of the 
industries in question so as to i corporate the following qualifi- 
cation: "Tie articles enumerated herein when made in clothing fac- 
tories and used in connection with the garments manufactured in such 
factories are exempted from the provisions of this code, "* In order 
that production of shoulder pades outside and inside men's clothing 
plants "be on the same competitive levels, the lien's Clothing Code 
Authority also used its influence in obtaining for the Shoulder Pad 
Code a maximum of 36 hours per week and one shift per day whereas 
longer hours and two shifts had been proposed by the Industry, ** 
The Slit Fabric Industry Code likewise provided for one shift of 
employees per day, but allowed 40 hours per week, 

Z. Coat Front Manufacturing Industry. 

A code for the -Coat Front Manufacturing Industry, supplemental 
.to the lien's Clothing Industry Code, was submitted to the Administration 
but was never approved. This code as revised for hearing on June 11, 
1934, was designed .to cover the "Coat Front Industry, " The term "coat 
front" was "defined to mean a combination of -some or all of the follow- 
ing materials: canvas, hymo, haircloth and felt, for the purpose of 
re— inforcing, shaping, and facilitating the tailoring of men's coats," 
The code definition likewise provided that such production of coat 
fronts as took place in clothing establishments for use in garments 
manufactured therein should be exempt from the Coat Front Code, 

Negotiations respecting this supplemental code were carried on 
for some time between its proponents and representatives of the Men's 
Clothing Code Authority ...... The Committee on Compliance and Enforcement 

of the Men's Clothing^Code Authority finally reported on March 2, 1934, 
that a successful arrangement had been completed whereby the coat front 
manufacturers agreed to come under the Men's Clothing Code, It was 
arranged that the Men's Clothing Code Authority should supervise the 
enforcement of this code in return for an income of one-tenth cent per 
pair of fronts to be collected by the Coat Front Industry's Association, 



(*) Report of Committee on Compliance and Enforcement of Men's 
Clothing Code Authority, March 2, 1934. (Men's Clothing 
Code files.) 

. . f . 

{**) Report of Committee on Compliance and Enforcement of Lien's 

Clothing Code Authority, December 8, 1933. (Men's Cloth- 
ing Code files. ) 



9732 



-28- 

Despite this seeming agreement "between the lien's Clothing Code 
Authority and the coat front manufacturers, we find on November 9, 
1934, the Empire Coat Front Association inquiring as to what the 
Administration intended to do about including its membership with 
that of the Hen's Clothing Code, stating that they still desired to 
be included in such code "with appropriate exceptions similar to those 
previously agreed upon." * This inquiry was acknowledged with the 
advice, "We are making a special study of codifying small industries 
and when finished shall be glad to consult with you," ** There appear 
to have been no subsequent developments in the direction of codifying 
the Coat' Front Manufacturing Industry. It is observed also that the 
N,Il,A t files show no complaints arising from friction, if any, between 
the Coat Front and the Lien's Clothing Industries. 

F Infants' and Children's T7ear Industry . 

As indicated by the definition of the lien's Clothing Industry, it 
was provided that certain children's wearing apoarel (among which were 
boys' Eton and Bugby suits) were to be manufactured under the Hen's 
Clothing Industry Code. The proposed Infants' and Children's T/ear Code 
originally claimed jurisdiction over the same products, but it was 
finally provided that manufacturers of Eton and lugby suits might elect 
to operate under the Infants' and Children's Wear Code, provided, how- 
ever, that they comply with all the labor provisions of the lien's Cloth- 
ing Code,*** It is clear that this arrangement was the outgrowth of 
efforts upon the part of certain manufacturers to select the Code with 
the most liberal labor provisions. The adequacy of the attempts to 
solve this overlap problem would appear to depend on the degree" of com«~ 
plicnce obtained by the respective Code Authorities.. 

G, Knitted Outerwear Industry . 

On June 1, 1934, the lien's Clothing Code Authority made a vigorous 
protest against the proposal to amend the Knitted Outerwear Industry 
Code definition to cover "the manufacturer of knitted outerwear apparel 

for men and/or the manufacture of ski suits—whether knitted or made 

of purchased knitted material or other material— etc. "**** The lien's 
Clothing Code Authority Secretary took the position that "this amendment 
seeks to take from the jurisdiction of the lien's* Clothing Code outer 



(*) Letter dated November 9, 1934, to Morris Greenberg, 
Deputy Administrator, from Lester Lyons, Secretary, 
Empire State Coat Front Association, (iien.'s Clothing 
Code Files). 

(**) Letter dated November 20, 1934, to Lester Lyons, 
from S, H. Ourbacker, Assistant De-outy Adminis- 
trator. (Hen's Clothing Code Files, ) 

(***) Letter dated April 23, 1934, from John R. Beecroft, 

Assistant Deputy Administrator, to George W, Elliott, 
Chamber of Bommeree, Philadelphia, Pa. (lien's Clothing 
Code Files. ) 

(****) Letter dated June 1, 1934, from David Drechsler, Secretary - ! 
9782 lien's Clothing Code Authority, to General Hugh S. Johnson, 
(Hen's Clothing Code files under Code Classification 0-Z) 



-29- 

garnents which pre manufactured by the members of the Lien's Clothing 
Industry under the Men's Clothing Code," The protest "is made formally 
in behalf of the lien's Clothing Code Authority' — "on the ground that the 
apparel quoted above, and made part of the proposed amendment, right— 
fully belongs under the Men's Clothing Code." 

This .jurisdictional dispute r 'as never entirely resolved it appears 
u">on examining the opinions, of members of the Legal Division of K.M.A. 
found in comments relative to the cla.ssifica.tion of a. firm "v/hich pur- 
chases fitted cloth from knitting mills and then manufactured this 
knitted cloth into men's and bo"rs ' sweaters," 

A member of the K.M.A. legal staff states with respect to the above 
classification, "subject to confirmation by the Classification Division 
•in Mashington": 

"I have eicamined the Codes for Knitted Outerwear Indus- 
try, hen's Clothing Industry and the Coat and Suit In- 
' dustry in an effort to find the Code applicable to the 
activities of the subject company. The Knitted Outer- 
wear Code exoressl;. r provides that it does not include 
the manufacture of garments made of purchased knitted 
fabrics and the Code for the Men's Clothing Industry 
a-^arently was intended to include only men's and boys' 
suits, coats and pants. 

n~_I doubt if there is any ao proved code applicable to 
the activities of the subject company." * 

„ review of this opinion by a member of the Legal Division of 
N.R.A, attached to the lien's Clothing Indust^ Code reveals the comment: 

"The definition of the irAoistr;" in the hen's Clothing 
Code does not exoressly exclude or include sweaters, 
such as mentioned in sa.id memorandum. However, I know 
that the hen's Clothing Code Authority and nenbers of 
the indu.st.ry would disclaim such sweaters because their 
code is cc-.ifined to coats, vests, pants and overcoats, 
and has never included any knitted garments or garments 
made from knitted fabrics."** 

hie last quoted ooinion would seem . to have added confusion to the 
jurisdictional issues between men's clothing and knitted outer-'ecr, as 
the hen's Clothing Code Authority did unqu.es tionably claim jurisdiction 
over certain a;ooarel (a.s mentioned above) made of knitted materials and 
produced for men and boys in men's clothing manufacturing establishments, 

(*) Memorandum dated April 2d, 1935, from Travis hrown, 

Counsel. (lien's Clothing Code files, Code Classifica- 
tion 0-Z. 

(**) Memorandum dated May 1, 1935, fro.: C. M. "right to 
M. Z. Hwell. (Men's Clothing Code files, Code 
Classification 0-2.) 

9732 



. -30- 

H. Rainwear Division of the Rubber Industry. 

The .uirisdictional disjute between the lien's: Clothing Industr; r and 
the ?- inwear Division of the Riibber Industr^ was settled by a dminis trac- 
tive Order 15-38. By way of ftu-ther explanation, it should be pointed 
out that the Code Authority of the Rainwear Division of the Rubber Llanu- 
factoring Industry claimed that certain garments manufactured of fabrics 
knovn as cravenette, scotch mist, mist proof or similarly treated fabrics 
which had been orocessed so as to be water-repellent belonged to the 
Rainwear Division, The industries orroosed to this claim, including the 
Men's Clothing Industry, contended that garments which do not include 
"coating, backing, impregnating, or combining fabrics with rubber, or 
gutta pertoha, paste or glue, should not be classed as rainwear," The 
Administrative ruling contained in Order 15-38 specified that "clothing 
when made of woven fabrics and sewn in the regular manner used in manu- 
facturing clothing definitely belongs under the wearing apparel codes." 

I. Army and Ifovy Clothing Factories. 

The Lien's Clothing Code Authority was concerned with the fact that 
clothing factories owned and oerated by the United States Government 
through the ¥ar and iTavy Departments did not comply with standards set 
up 'oj the Code of Fair Competition for the lien's Clothing Industry, 
The views of the Code Authority are set forth in the following extracts 
from two letters of protest from the Executive Director to the Admin- 
istration, 

"This is to inquire what action has been> taken by the 
Rational Recovery Administration following our confer- 
ence some few weeks ago with reference to the unfair 
comoetition that is brought about in our industry by 
the failure of both the Ar:^ and Havy to comply with 
the lien's Clothing Code in the operation of their sev- 
eral clothing factories, 

"You will recall that I explained that this matter had 
been taken up on several occasions in the past with va- 
rious members of the ITational Recovery Administration's 
staff, but seemingly nothing had ever been accomplished,"* 

"I. repeat that it seems to me unnecessary to await Con- 
gressional action because the President, as Commander- 
in-Chief of the Array end iTavyj could issue an executive 
order requiring not only clothing factories, but all 
factories operated by the Government to work under and 
observe the -orovisions of the codes applicable to the 
products manufactured in any government-owned and oper- 
ated plant. It probably would be well to include in 

(*) Letter dated June 1, 1934, from George L. Bell, 

Executive Director, lien's Clothing Code Authority, 
to . John R.' Beecroft, Assistant Denity Adminis- 
trator, (lien's Clothing Code files..) 

9782 



-31- 

the order a clause to the effect that the War and Navy 
Departments would not he required to "buy and use labels 
on their products, although I personally "believe they 
should he required to use such labels in order to popu- 
larize the NRA label and make the entire public "label 
conscious," It does seem to me most ominous, to be 
very moderate in the use of the adjective, that the 
Government plants should be working people at wages 
end hours that are in direct contradiction to the whole 
program of increasing employment and purchasing power,"* 

J. International Clothing Designers. 

A group known as the International Clothing Designers sought to 
be. affiliated with the Hen's Clothing Industry Code and to become 
subject to its jurisdiction and provisions. With respect to this 
attempted alignment, there is found in the November 8, 1933, Limit es 
of the Code Authority the following brief note: 

"Mr, Drechsler read a communication and a petition 
addressed to the Code Authority by the International 
Clothing Designers. After a brief discussion, the 
opinion of the meeting was to notify the Interna- 
tional Clothing Designers Association that the lien's 
Clothing Code made no provision for their inclusion 
and that a letter be sent to them to that effect." 

II RELATIONSHIP WITH OTHER INDUSTRIAL AND TRADE GROUPS 

A, Piece Goods Division, Wool Textile , 
I... nuf ac tur i nr I ndus t r Tr 

The lien's Clothing Industry as a purchaser of woolens is of course 
intimately associated with and directly affected by the Wool Textile 
Industry , especially -the Piece Goods Selling Division . It is not sur- 
prising, then, to find some grounds for disagreement between these 
industries in connection with proposed and adopted trade practices of 
the Piece Goods Division of the Wool Textile Industry, For example, 
the provision in the Piece Goods trade practices that "all freight, 
express and delivery charges shall be paid by or charged as a separate 
item to the buyer, " represented a break from the traditional practice 
of (tooting goods on a delivered price basis. The men's clothing mahur* 
facturers, as well as other apparel industries ooncerned, argued that 
this new procedure required the purchaser to pay numerous separate 
charges which could not be accurately figured in the calculation of the 
cost of the goods. This was caused in part, it was asserted, by the 
inability of the small, none too well organized manufacturers to handle 
the new problems from an administrative and accounting standpoint,** 

(*) Letter dated July 3, 1934, from George L. Bell, Executive 

Director, Hen's Clothing Code Authority, to John R. Beecroft, 
Assistant Deouty Administrator. (Aen's Clothing Code files) 

(**) Transcript of Hearing on the Wool Textile Industry, January 11, 
1935. Pages 4 and 5, (Code Records). 

9782 



-32- 

Further, the Piece Goods Division of the Wool Textile Code provided for 
somewhat rigid terms and restrictions on the granting of discounts. This 
new practice from the standpoint of the buyer meant increasing difficul- 
ties in the matter of adjusting losses from examining and sponging 'and 
loss of yardage through shrinkage to the computation of the market price 
on the new semi-rigid discount basis. ( *) 

Frequent conferences were held "between members of the Lien' s Cloth- 
ing Code and those of the Wool Textile group. There is no record, how- 
ever, of final adjustment of the problems arising out of changes in trade 
practices ~by -provisions in the wool Textile Code. 

B. Retail and Wh o lesale Trade . 

The Lien's Clothing Industry as a. seller of goods ran into serious 
difficulties in connection with attempting to establish trade practices 
relating to discounts, anticipations, f.o.b. shipments, standard sales, 
etc. Just as the Men' s Clothing Code Authorit2^ was unsuccessful in gett- 
ing adjustments, as buyers, with the woolen people, so in turn, no satis- 
factory agreements were reached with the buyers of men' s clothing. The 
nautr of the controversy between retailers and wholesalers and the Men' s 
Clothing Industry will be discussed somewhat at length in the chapter on 
"Trade Practices." The history of this conflict of interest is in a 
large mea.sure the history of the attempt of the Lien's Clothing Code 
Authority to amend their own fair trade 'practice provisions. 

III. BRIEF HISTORICAL SKETCH 01? DE7EL0F1 LEFT OP THE MSN' 5 READY-MADE 
CLOTIIIivG IHDUSTEY (**) 

During the Colonial period of American history most urban people 
made their clothing at home from cloth bought at stores or bought 
second-hand clothing from dealers in old clothing. The prevalence of 
home manufacture is evidenced by Alexander Hamilton's Report on Manufac- 
turers, presented to Congress in 1791, which states: "It is computed 
in a number of districts that two-thirds, three-fourths, and even four- 
fifths of all the clothing of the inhabitants are made by themselves. " 
This condition seems to have existed down through the first two decades 
of the nineteenth century. 

The well-to-do part of the population either imported its clothing 
from England or imported cloth which was made up by itinerant tailors. 
With the growth of villages and towns, some of the itinerant tailors set 
up shops. The tailor, with the aid of his wife, apprentice, and journey- 
men, often tailored garments from goods furnished by customers. 

A. Ready -Made Garments . 

The men' s ready-made garment industry started in the custom tailor- 
ing shop. The seasonal character of the trade gave incentive for the pro- 
duction for stock in order to keep employees busy. Hejected garments 

(*) Transcript of Hearing on the 'Tool Textile Industry, January 11, 

1935, Page 5. (Code Records) 
.(**) Extracts are from "The Amalgamated Clothing Workers of America" by 

Charles E. Zaretz (a comprehensive and well-authenticated study) 

(New York, 1934.) ' * 

9782 



-OCr- 

found their way to the display shelves. -Additionally the custom tailor 
took over the functions of the second-hand clothing dealer who had already 
extablished markets and methods of trading. 

The increase in traveling in the earl 1 / part of the nineteenth cen- 
turv caused by improved means of transportation stimulated a demand for 
read^-made garments. The levying of a 50 per cent ir.roort duty upon cloth 
in 1832 brought about an expansion of the home industry. Clothing es- 
tablishments employing 300 to 50^ workers appeared in New Yorh, Philadel- 
phia, and Baltimore. In most of these establishments garments were cut 
and materials assembled, and then riven out to women who made garments at 
home — the beginning of the sweating system in this Industry in the United 
States. 

The manufacture of ready-made clothing had become by 1B50 an impor- 
tant industry. 'The seventh census of the United States, 1850, reports: 
"There were 4,278 establishments employing 35,151 male and 61,500 female 
workers. The invested capital amounted to $12,509,000. The amounts 
spent for wages and materials were $15,032,000, and $25,730,000, respect- 
ively, and the value of the products amounted to $48,311,000." There 
were no factories in the oresent da;/- sense. The manufacturing establish- 
ments were engaged in assembling of materials, cutting and selling of the 
garments, while the sewing and finishing of the goods was done outside. 
The em-olo^ees were English, Irish, and German tailors who were trained 
in their native lands. 

3 . Development of the Factor^ System 

The invention of the sewing machine by Elias Howe in 1846 and its 
perfection b^ Isaac M* Singer in 1351 were the chief stimuli to the de- 
velopment of the factory system in. the clothing industry. The old sys- 
tem of giving out work for completion in homes gave way to the concen- 
tration of workers in shops and factories. The ease with which one 
could learn to operate a sewing machine enabled a great number of un- 
skilled persons to enter the garment industries. The newly-arrived 
immigrant readily found a place in the industry, although previously un- 
trained, and in fact, began to displace the skilled tailor who had spent 
3^ears in acquiring the art. 

The sewing machine was a great improvement over the old method of 
sewing by hand and soon after its invention clothing shops began to fill 
the Ghetto districts of New York, Boston, and Philadelphia, the 'centers 
of the ready-made clothing industry. The effect of the sewing machine 
u on the clothing industry is well described by a writer in 1850 who 
states: "Among the branches of industry which have been signally advanc- 
ed especially by the introduction of the sewing machine is the "manufac- 
ture of men's and women's clothing for sale, which has heretofore ranked 
with the cotton manufactures in the number of hands (two-thirds of them 
female) and the cost of labor employed. The increase of this manufac- 
ture has been general throughout the Union, and in the four cities of 
Hew York, Philadelphia, -Cincinnati, and Boston amounted in value to 40 
and one-quarter millions of dollars, or over r cent of the product 
of the whole Union in 1850. " 

The Census of Manufactures (Eighth Census, 1350) gives the size of 
ready-ma.de clothing industry in its four largest centers as follows: 

9782 



-=34-= 

Number of Number of 'workers 



City 


Esta 


blishments 


Male". 


Female 


Value of Products 


New York 




303 


10,954 


10,624 


$17,011,375 


Philadelphia 




352 


6,309 


8,078 


9,984,497 


Cincinnati 




222 


5,016 


4,965 


6,381,196 


Boston 




61 


1,324 


2, 693 


4,567,749 


C. Civi 


1 tfar 


Stimulus to 


Factory 


System. 





The demand for arn^ clothing during the Civil T Jar could not be 
supplied by the old type clothing shop, and '..he Government had to pxirchase 
some clothing from abroad. The Government set up its own shops and also 
gave large contracts to private concerns. Report No. 33 of the U. S. • 
Bureau of Foreign and Domestic Commerce states that at first the uniforms 
were, made at the homes of workers, but as the war went on a large number 
of shops '"ere set up to fill army contracts. In connection with the 
manufacture of loniforms an important discover 1 ' - to the industry was made. 
It was learned that there is a close relationship between the different 
parts of the male figure. For instance, it was observed that men who 
have a 40-inch chest usually have a 36-inch waist and legs 31 inches on 
the inseam, and that for every chest size there was a corresponding waist 
and leg size. This discovery of size relationship made factory production 
on a large scale possible. 

After the Civil "ar many of the newly-formed shops a~nd factories 
turned their attention to civilian clothing. The reouirements of sol- 
diers now returned to civil life and the acceleration given trade and. 
commerce in general by the opening up of the South and 7est created in- 
creasing demands for ready-made clotning, which the industry met with 
difficulty for a. time, despite improvements in methods, and technology. 
Chicago and St. Louis became import. -nt clothing centers in the Mid-West, 
and the industry gained a considerable foothold in New Orleans, in the 
South. In 1879, the Hart, Schaffner & Marx firm, the largest clothing 
establishment in the United States and doubtless in the world, was 
founded as Hart, Abt & Marx.. In 1887, Mr. Levi Abt withdrew from, and 
Mr. Josewh Schaffner joined, the organization, forming the partnership 
of Hart, Schaffner & Marx. The firm was incorporated in 1911. 

17. PRESENT BAY SCOPE OP MEN'S CLOTHING INDUSTRY. 

A. Number of Establishments . 

The Code Authority for the Lien's Clothing Inudstry estimated that 
there were 3,225 establishments in the Industry during the Spring season 
of 1935. This is an estimate of regular factories and contract shops, 
and represents an increase of slightly more than 1,000 establishments 
over the 1933 total of 2,219, but falls 463 short of the 1929 total of 
3,691. Attention is directed to the table immediately following, which 
gives for the -/ears 1923, 1925, 1927, .1329, 1931, 1933, and 1935 the 
number of clothing manufacturing establishments in the United States 
which could be classed as belonging to the Hen's Clothing Industry as 
aualified by the codal definition for this Industry. 

Mr. H. K. Her.vitz, Comptroller of the Jen's Clothing Code Authority 
has estimated that no one member of the Industry produces more than 3 
per cent of the volume of the Industry. A study by the same individual 
likewise reveals tha.t a. list of the 50 largest producers would range down 
9732 



-35- 

to include those firms which produce .3 of 1 per cent of the Industry 
vo lume . 

TABLE I 

Number of Establishments in the "en's C lothing Industry : 
5egulr r Factories and Con tract, Shoos 



* - 


Regular 


Year 


Factories 


1923 




1925 




1927 


2, 044 


1929 


2,157 


1931 


1,802 


1933 


1,470 


1935 


;• 



Contract 
Shop s 



1,518 

1,524 

1,143 

749 



Total 
Establishments 
4,024 
3,491 
3, 562 



3,691 

2, 945 

2, 219 

3, 225 



!a/ 



Source: Census of Manufactures, 1029, 1931, 1933; figures for 1935 
from Men's Clothing Code Autnorit}?-. 

a/ Due to chans.es in Census classifications, 1933 figures 
are not strictly comparable with those for -previous yerrs. 

S . Distribution of Establishments . 

The distribution of the establishments in the Industry by States for 
the years 1929, 1S31, and 1935, is indicated by Table II ( *) . It can be 
readily seen that a very few States; namely, New York, Illinois, Maryland, 
Massachusetts,. New Jersev, and Pennsylvania; account for the major portion 
of the Industry's establishments; to be er'act, 88.6 per cent of the 1935 
total. This heavy concentration of establishments is to be found in the 
cities of New York, Chicago,' Boston, Philadelphia, Rochester, and Baltimore, 
which have been centers of the Industry since its early development. It 
is of interest to note that Tew York State alone accounts for approximately 
50 per cent of the productive units in the Industry. This is accounted for 
by the large number of small contract shops found in the New York City area. 
Yet, a.s shown _ by Table III, percentage of Total Garments Cut, by Principal 
States, New York State also accounts for an outstandingly high percentage 
of the garments cut. 

Attention is drawn to the fact, as shown by Table II, that the New 
York area and likewise the Illinois area lost establishments in relation 
to the total during the period from 1929 to 1931, but reestablished a more 
favorable ratio ~by 1935. New York, in fact, exceeded its 1929 percentage 
of establishments in 1935 by 1 per cent of the total, having registered a 
rather large gain of 2.4 per cent of the total for the Industry between the 
years 1931 and 1935. A striking gain of 4.3 per cent of establishments is 
shown by Maryland in the years between 192 - 1935. 

(*) For a distribution of establishments among trie principal States for 
the years 1923, 1925, 1927, s?e ~- iM •. s V, VI, VII. 



9782 



—36— 
TABLE II 



BOMBER ALU) PER CENT 0? PRODUCTIVE UNITS III SPECIPI3D STATES^/ 





State 


1929 




1931 




1935 










Per 




Per 






Per 






Number 


cent 


Number 


cent 


lumber 


cent 




United States 


















Total 


3,591 


100.0 


2,945 


100 


3. 


,225 


100.0 




California 


88 


2.4 


54 


2.2 




105 






Colorado 


5 


0.1 


5 


0.2 




3 


0.1 




Connecticut 


<^L 


0.8 


16 


0.5 




7 


0.2 




Georgia 


7 


0.2 


8 


0.3 




5 


0.2 




Illinois 


319 


8.6 


204 


6.9 




269 


8.3 




Indiana 


25 


0.7 


18 


0.6 




5 


0.2 




Kentucky 


24 


0.7 


18 


0.6 




1® 


0.3 




Louisiana 


17 


0.5 


19 


0.6 




17 


0.5 




Maine 


9 


0.2 


7 


0.2 




5 


0.2 




Maryland 


217 


5.9 


257 


8.7 




329 


10.2 




Massachusetts 


161 


4.4 


146 


5.0 




117 


3.5 




Michigan 


22 


0.6 


13 


0.4 




10 


0.3 




Minnesota 


4-6 


1.2 


40 


1.4 




19 


0.6 




Missouri 


72 


2.0 


65 


2.2 




27 


0.8 




New Hampshire 


5 


0.1 


3 


0.1 




2 


0.1 




New Jersey 


168 


4.6 


145 


4.9 




190 


5.9 




New York 


1,817 


49.2 


1,404 


47.8 


1 


,622 


50.2 




Ohio 


130 


3.5 


102 


3.5 




97 


3.0 




Pennsylvania 


384 


10.4 


317 


10.7 




335 


10.4 




Tennessee • 


11 


0.3 


10 


0.3 




7 


0.2 




Texas 


18 


0.5 


11 


0.4 




3 


0.1 




Virginia 


17 


0.5 


11 


0.4 




5 


0.2 




Washington 


9 


0.2 


F"3 
( 


0.2 




3 


0.1 




Wisconsin 


37 


1.0 


28 


1.0 




19 


0.6 




Other- States 


53 


1.4 


27 


0.9 




13 


0.4 




Source: Census 


cf lianufc 


ctures, 


"Ken 1 s 


Clothing; 


" 19-35 figures 


estimate! 



by the Code Authority for Men's Clothing Industry 
a/ Regular factories and contract shops combined. 



9782 



-37- 

C . G arments Cut by Principal States . 

The percentage of garments cut by States is a good index of the dis- 
tribution of the Hen's Clothing Industry throughout the United States. 
Attention is directed to Table III, which indicates the Percentage of Gar- 
ments Cut, by Principal States, for the year 1934. The States leading in 
garments cut are New York, Pennsylv;:mia, Illinois; Ohio, Maryland, and 
Massachusetts. The Stake of blew Yovfc i f : outstaadvog in accounting for 
46.2 per cent of the total garments cut in tne Industry for 1934. 

D. T7age Earners in the Ind.ip tyy. 

Tfage earners in the Men's Clothing Industry approximated 150,000 
employees in 19 ?3. Employees ii tie Industry declined sharply from the 
high in 1923, with the exception of c reversal in trend for the years 1927 
and 1929, to a low of approximately 119,000 in 1933. A comparison of the 
number of vrge earners in the ken's Clothing Industry with all other manu- 
facturing industries (See Table IV), indicates little change in relative 
positions from 1923 to 1933. Men's Clothing represented 1.8 per cent of 
all other manufacturing industries in 1923 and 2.0 per cent in 1933. A 
distribution of wage earners in the Industry by States for the years 1923, 
1925, 1927, 1929, 1931, and 1933 is found in Tables V, VI, VII, VIII, IX, 
and X respectively. The clothing centers found in the States of New York, 
Pennsylvania, Illinois, Maryland, Massachusetts, and Ohio maintained their 
predominance in numbers employed over this ten-year period. A significant 
trend is noticed over this period in the shift of employees from the States 
of New York and Illinois and the gain in employees by the States of Penn- 
sylvania and Maryland. This appears to represent a shift in manufacturing 
activity within the Industry from large metropolitan centers to towns and 
cities of smaller populations. (*) 

E. Value and Volume of Production . 

The principal products produced under the Men's Clothing Industry 
Code were: men's suits, whooly or pertly wool, mohair, and linen; men's 
separate trousers; men's overcoats and topcoats; men's odd coats; boys' 
suits, wool cotton, etc.; boys' separate ponts; boys' overcoats; boys' 
mackinaws, reefers, and light coats; and uniforms. 

The volume and value of production of men's clothing for the Censxis 
years 1923, 1925, 1927, 1929, 1931, and 1933, together with estimates for 
1934 made by the Code Authority, is shown in Table XI. Value of garments 
produced declined by more than half from 1923 to 1934, as evidenced by the 
totals of $936,787,000 and $397,876,000 respectively. The decline in value 
of garments produced was unbroken in the eleven-year period from 1923 to 
1934. Total values for 1934 slightly exceeded the value of 1933 when 
allor/ance is made for uniforms. The Men's Clothing Code Authority esti- 
mated that the 1934 production of uniforms was about the same as for 1933 
and that the value at 1934 prices would be from $9,500,000 to $10,000,000, 

(*) Further statistical evidence of this trend will be found in a more 
detailed study of migration in the Industry found in Chapter II, 
Section VIII. 



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-45- 



TAiiLE III 
PERCENTAGE' OF TOTAL GARMENTS CUT, BY PRINCIPAL STATES, 1934 



State 



Per Cent Volume of Production 
of Total (Thousand Garments) 



Value of Production 
(in thousands) 



U. S. Total 

California 
Georgia 
Illinois 
Indiana 
Kentucky 
Louisiana 
Maryland 
Massachusetts 
Minnesota 
Mi ssouri 
Not Jersey- 
rev York State 
Ohio 
Oregon 

Pennsylvania 
Puerto Rico 
Tennessee 
Virginia 
Wisconsin 

Other Strtes 



100.0 

.4 
1.2 
9.1 

.9 

.7 
1.5 
7.2 
4.1 

.3 

2a 

.7 
45.2 
11.2 

.1 
11.7 

.1 
1.2 

.7 

.4 

.2 



45, 


,323 




195 




548 


4, 


,133 




421 




308 




671 


'7 

o 


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1 


,345 




113 




970 




317 


20, 


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5, 


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32 


5 


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32 




526 




295 




159 



123 



$397,876 

1,711 

4,814 

36,286 

3,700 

2,706 

5,889 

28 , 647 

16,194 

995 

8,514 

2,785 

184,336 

44,443 

279 

46,631 

279 

4,615 

2,586 

1,392 

1,074 



Source: Code Authority for Lien's Clothing Industry. 



9782 



-46- 

making a grand total value for all garments of approximately $407,000,000 
for 1934 as against tho 1933 total value of $401,711,000. 

Zigures on total number of garments produced in the Men's Clothing 
Industry are not available for the years 1923 and 1925. Eron the year 
1927, with the exception of 1929, the number of garments produced declined 
sharply until 1934, when an improvement over 1933 was registered. The 
decline in volume from the high figure of 75,795,000 in 1929 to the low 
point of 36,940,000 represented a shrinkage of approximately 52 per cent. 
The recovery in 1934 over 1933 in turn v/as very substpntial, as evidenced 
by the volume of 43,171,000 garments for 1934, as against 35,940,000 for 
1933. 

TABLE 

MEN 1 S CLOTHING- INDUSTRY 

Number of Wage Earners in the Men's Clothing Industry Com- 
" pared with that in All Other Manufacturing Industries 

1923 - 1933 







Men' s 






All 


Manufac 


turing 


P< 


srcentage Men' s 


Year 




Clothing 






Industries 


Less 


Cl< 


3 thing is of All 






Industry a/ 
( ThousE 


mds 


Hen 


' s Clothing: 


Other 


Manufac tur i ng 




of Workers) 




ldus tries 


1923 




158 








8,520 








1.8 


1925 




142 








8,242 








1.7 


1927 




146 








8,204 




• 




1.8 


1929 




150 








8,689 








1.7 


1931 




122 








6,401 








1.9 


1933 


s/ 


119 








5,935 








2.C 



SOURCE: Census of Manufactures, 1929, Vol. II, pp. 15 and 356; 1931, p. 
20; 1933, bearing Apparel, p. 5; mimeographed release, January 
23, 1935, p. 1. 

a/ Data are for Census classification "Clothing (Except Work Clothing), 
Men's, Youths', and Boys', Mot Elsewhere Classified." They do not 
include establishments with annual production valued at less than 

$5,000. 

b/ The figures for 1933 are not strictlv comparable with those for 
previous j^ears, because of changes in Census classifications. 



Prepared by 

Industry Statistics Unit 
Statistics Section 
Division of Review, N.R.A. 



9782 



-4,- 
• CHAPTER II 
CHARACTERISTICS OP THE IEDUSTBY 
I. OHG&iTIZATIOi: 0" PRODUCTION 

A. Types of "^stallish icnts 

There are .two distinct t^npes of fins in the Ten's Clothing 
Industry. First, there are establishments which buy material, out the 
cloth, market the finished mroduct, finance production from rati materials 
to finished ganents, "but which often do not own and operate the plant 
where the garments are made. Secondly, there are establishments called 
"contract shops" or contractors who take cut cloth and accessories from 
one who finances the business and perforn the remaining operations ne- 
cessary to completing the garment on a piece price basis. (*) This 
contractor is ordinarily responsible for his ovn force of worsen and 
usually owns machinery and a '-orkroom, Until the Code went into effect, 
a substantial part of the work war. done on a, hone work basis, in r- hich 
labor was performed in the homes of the employees themselves, and not 
in a factory o^ned and conducted by the employers. 

In a few cities, including Chicago, Rochester, Cleveland, and 
St. Louis, most production is found, in shops which complete the entire 
garment. In other cities, of which I T ew York is the most significant, 
the work for the most part is conducted in contract shops, having been 
let out by the manufacturers who cut the cloth and who, as above described, 
finance the entire procesr. The areas (not clearly defined) which employ 
the practice and use of the contract shop 'method of production are some~ 
times referred to as the "centralized areas" as distinguished from the 
plants, ordinarily found in small towns and cities, which -nrodtzce the 
entire ga.rment, and are described as the "decentralized areas." It is 
emphasized for certain purposes that the plants in the "decentralized 
areas" are highljr integrated and usually employ highly sub-divided pro- 
cesses of manufacture. 

In addtion to these two types of establishments which a.re 
most prevalent in the Ren's Clothing Industry, there are found other 
classifications of considerable importance. They are as follows: 

1. The I'anufacturer-Distributor. 

This t3poe of establishment , in addition to the manufacturing 
plant, owns and ome rates selling outlets through which it disposes: of its 
products direct to consumers. This distributing function is done either 
through ownership of chaines of clothing stores or by mail orcer sales. 

(*) Tor a breakdown of establishments between regular factories 
and contract shops, see Table I 



S782 



-48- 

2. The "Integrated" Manufacturer. 

In this type of esta.hlishn.ent the entire manufacturing pro- 
cess is usually carried out in one plant under a single management 
T'hich also sells the product to wholesaler or retailers. 

3. The Tailor-to-the~Tre.de Establishment. 

This type of establishment manufactures under factory methods 
clothing taken on order from retailers. The retailer either specializes 
in a special size, style end quality or takes orders from customers on 
a made-to-measure basis. The "special-order" houses met this demand ~by 
having developed an ability to produce special order garments a/t factory 
costs. 

3. Technology . 

The division of labor first developed in the Clothing Industry 
by German tailors around the middle of the nineteenth century has develop- 
ed in some of the present day manufacturing establishments until there 
are as many as 16S operations in the mailing of an overcoat. This develop- 
ment has me.de for greater efficiency in terms of labor output and has 
made possible the utilization of labor of varying degrees of skill. (*) 

While there are many operations in the making of a. garment, 
depending in part upon the type of manufacture em-oloved, these operations 
can be divided into a feu distinct occupational grouos, the principal 
groups being putters, fitters, searing machine operators, pressers, basters, 
hand severs, shapers, bushelers, and tailors. (**) 

Despite much progress in division of labor in the ken's Cloth- 
ing Industry, the advantages of large scale production do not appear very 
significant. The machinery, and 1 the methods of production do not vary 
greatly between the small and large establishments. A shop employing 
fifty people is likely to be found as efficient as a shop employing one 
thousand. (***) 

(*) I.iartin E. Popkin, "Organisation, Management, and Technology 
in the Manufacture of ken's Clothing." ' (lTev York, 1929). 
Page 257. 

(**) Bureau of Labor Statistics, "Wages and Hours of Labor in the 
ken's Clothing Industry, 1911 to 1930. (Bulletin 557) 

(***) Charles E. Zaretz, "The Amalgamated Clothing Workers of 
America." (ke" York, 1934.) Page 23 



J73; 



-49- 
1. Machine ry 

The last half of the nineteenth century witnessed the in- 
troduction of several ne - .' machines into the ready-made clothing industry, 
resulting in a radical departure from old methods of -orod.uction. (*) 

The early sewing nachines which had a speed of between 800 
and 900 stitches per minute, upon the adoption of mechanical oower were 
made to operrte at the rate of 1,200 to 1,500 stitches wer minute, and 
by the year 1900 had attained a speed of 4,000 stitches wer minute. 

In 1870 the cutting shears, were replaced by the knife which 
could be operated by one person and could exit through 18 or more thick- 
nesses of cloth. In 1872, the pover cutting machine was invented by 
Albion and Y.'rath of Staten Island. This machine ras operated by steam 
and consisted of a reciprocating vertical blade. Such cutting machines 
have been successively improved. The first electrically run vertical 
blade machine, which cuts a maximum thickness of 1-g inches of cloth, was 
turned out ~o~/ the Eastman Co. in 1897. 

Gas pressing irons were introduced, around 1903. These displaced 
the method of heating irons on a stove or by charcoal. There are now many 
kinds of pressing machines on the market heated by a compound of air and 
gas. The method of operation usually provides for a foot-pedal movement 
which assures by utilizing the weight of the presser, sufficient m-essure 
for the heaviest garment. 

Machines for buttonhole-making, button-sewing, pocket-making, 
cloth examining, sponging, and others have been developed to a high degree 
of efficiency. 

The manner in which' the adaptation of machinery to the clothing 
industry has simplified, the processes of manufacture and has increased, 
the efficiency of the manufacturing establishment can be appreciated by 
brief glimpse at the methods employed in a present day establishment. 
Following is a resume of the description of the orincipal operations in 
a modern establishment which "produces between 6,500 to 7,000 -suits psr 
week and employs from 650 to 675 employees": (**) 

(*) Charles E. Zaretz,' "The Amalgamated Clothing Workers of America." 
(New York, 1934) page 20. 

(**) M. E. Eosenmond, "Lias's Production Cuts Costs in Manufacture 

of ken's Suits." (Manufacturing Industries, July, 1927, Volume 
14, Pages 60-6.1.) 



9782 



-50- 

The departments are so coordinated that if one fa?.ls "behind 
it has to v:orh overt ime in order that the entire plant, is 
not held up on the following day. Around 6,000 yards of 
roolens are used ner day. Tool ens, on delivery, are in- 
spected, measured; and rewound, Woolens are then sponged 
a\id. shrunk in a machine large enough to handle the company' s 
requirements. After shrinking, the cloth is rewound "by a 
machine which also folds it lengthwise. 

Cloth is layed on cutting tables (four, 100 feet long, and 
.six, 60 feet long). As many as 40 double thicknesses of 
cloth are piled one on another. One man lays out, another 
chalks the patterns on a marker, a third puts the marker 
on the pile, and a fourth cuts the lay rith electrically 
driven cutting machines. A trimming department does the 
some rith the linings. The separate piles are taken to 
the thicketing department, where the different parts are 
raa.tched for shade, size, lot and corresponding numbers 
are sewed on each to assure proper assembly. The bundle 
of parts (coats) are fitted up and are given out for 
sewing- together. 

In the coat-gewing room are 400 sewing machines. Each 
croeratrr ;sews only one team. The different garments pass 
through the room in a steady stream. Pockets and -oocket 
facings are put together and sewed in another part of the 
room. A battery of 14 ironers iDress out und.erseams with 
perforated flat irons (gas-heated) served vf ith steam, which 
is forced through the bottom of the iron through the cloth. 
Steam and gas are piped directly to the ironing tables. 
Canvas fronts are basted on b; r hand and blind-stitched by 
machine. Two power-driven button-hole machines each cut 
and sew over 600 holes daily. One sews, then cuts; the 
other reverses the process by cutting, then sewing. 3ast~ 
* ings are removed in the cleaning department. The final pro- 
cess is that of inspection. 

Tor pants, practically the same system is used. The pants 
depart lent has 100 sewing machines and each worker does a 
single specific job. Here are four power-driven button- 
'. sewing machines. One man with one machine sews buttons on 

between 500 and 600 pairs of pants per 6^y. Also, there are 
three button-hole machines and twelve gas-fired steam irons 
for underseams. The pants department has twelve Hoffman 
pressers. (The two parts of the Hoffman presser are per- 
forated so tha.t when the garment is laid between and pressure 
applied, steam can be forced through-' the upper half and. wet 
cloth, and. suction draws the steam and noistenc through cloth 
and. lower half.) 

The coat-pressing department has 58 Hoffman pressBrs. Each 
coat posses through seven press ers, each operator 'Dressing 
only o ie part . 

Vests are made in a separate plant. 

9782 



-51- 

II. FIMLTC1AI ASFFCTS OF THE I1FDUSTFY (*) 

A. Investment in Industry 

Ho statistics pre available to portray accurately the relative 
standing of the Fen's Clothing Industry from the viewpoint of capital 
investment. Inferentia ly, it na ,r be determined by applying an accent- 
able ratio of capital turnover to volume, based upon an e::perience average 
obtained from a study of known operations of representative groups. Fy 
this process approximately a 4 tines turnover appears applicable to the 
year 1934, and an aggregate capital investment in the Industry may be 
conservatively estimated at not less than ?100, 000,000, notwithstanding 
the inroads on capital during the depression years. 

B. Fortalit- 

In five primary divisions of the Apparel Industry, manufacturers 
of men's wear, of which clothing as contemplated vithin this study is of 
major importance, ranked in the central position as reflected in the per- 
centage of failures in proportion to the number of concerns operating in 
the three '"■errs prior to 1931. 

Arranged in order of highest average failures in those years, 
the records of the broad industry subdivisions are: (**) 

1928 1959 1930 

Manufacturers - Coats and Suits - 5.2fo 5.7fo 7 ,9fo 

Manufacturers - Dresses and Ensembles - 4.2 4.9 8.3 

Manufacturers - Fen's Fear - 3.2 2.3 5.5 

Wholesalers - Dry and Knit Goods - 2.2 2.9 3.3 

miscellaneous Cottons - 1»6 1.3 2.4 

(*) Adapted from a survey made by A. A. Fisher (N.F..A. staff) during 
the fall of 1935. In view of the limited statistical data avail- 
able on certain financial aspects and problems of the Industry con- 
sidered herein, it was necessary for Fr. Fisher to rely principally 
upon authoritative statements made to him during a personal survey 
in New YorF. "Highly qualified and responsible sources contributed 
freely from their ovni studies and experience, with the implied 
understanding that nanes of individuals and institutions consulted 
rrould not be recorded unless specifically authorized. Those consulted 
were outstanding members of the Industry, trade association executives, 
bankers, factors' credit officers, and certified public accountants, 
especially conversant with the manufacturers 1 financial problems." 
(A. A. Fisher) 

(**) Twelve Discussions on Fun da >vF'. r Is ->:' Credit . ;':. G-. Dun 
and Company, New Fork, 1S31, p. 15. 



?782 



-53-- 

While the foregoing indicates an increase in percentages of 
failures in the men's wear group to 5,5$ in 1930, it must be understood 
that included therein were manufacturers of shirts, underwear, pajamas, 
etc. TToolen outer—clothing is the outstanding product of men's clothing 
manufacturers, with which this study is concerned, and their failures 
in proportion to number in the Industry are recorded at 7^ in 1930, 8fo 
in 1931, and higher in 1932. (*) 

Stable as the Lien's Clothing Industry is, compared '-'ith the 
more volatile women's garment industries, - infinitely more sensitive 
to the vagaries of style, - a fairly high mortality has evidenced itself 
in recent years. The number of financial embarrassments, resulting in 
bankruptcies, assignments, or liquidations by trustees, began increasing 
in the last quarter of 1929, and the trend continued throughout 1932. 
(**) A substantial drop in failures occurred in 1933 and remained about 
static during the period of the codes, with some increase noted during 
the first half of 1935 over the same period of the preceding year. 

With new concerns constantly entering the field to fill the 
gaps, it is estimated that the business life of the average manufacturing 
unit in the lien's Clothing Industry in seven years. The cause of failure — 
whether by bankruptcy, or voluntary liquidation by reason of losses and 
discouragement— is,, in the varjt majority of cases, a profound lack of 
ability on J :he part of management. It takes more than a good cutter and 
an able salesman to operate successfully in the clothing business. One 
or the other, or a third member of the firm, should be a capable executive 
experienced in financial management, or the enterprise is foredoomed to 
failure. A contributing cause of failure may be inadequate capital; 
but here again, efficient management would live kept a tighter control 
over what caoital was available and trimmed sails accordingly. 



(*) See Table XII, indicating a quarterly record of number of 
business embarrassments and the amount of liabilities of 
men's clothing manufacturers covering the period from 1928 
through the second quarter of 1935, prepared from data 
supplied by the Research Department, National Credit Office, 
Inc. , Hew York. 

(**) See Table XII. 



9782 



-F5 



do- 



table xii 

Men's Clothing Manufacturers 
ITumber of Business Embarrassments (*) 
(Bankruptcies - Assignments - Trustees) 















<fo of Total 


Year 


1st Qu. 


2nd Qu. 


3rd Qu. 


4th ■ Qu. 


Total 


in Industry 


1°23 


18 


20 


14 


33 


85 


3.83 


1929 


15 


11 


8 


24 


58 


2.6' 


1930 


49 


32 


17 


34 


132 


7.0 


1931 


35 


24 


53 


61 


153 


8.0 


1932 


56 


39 


52 


41 


168 




1953 


15 


25 


11 


9 


60 




1954 


o 


4 


10 


11 


34 




1935 


15 


11 











Amount of Liabilities in Embarrassments (*) 
(000 omitte'd) 



1928 


$880 


SI ,010 


$625 


$1,420 


$3,935 


1929 


722 


941 


217 


1 , 600 ' 


3,480 


1930 


3,727 


2,175 


590 


2,018 


8,510 


1931 


1 , 890 


827 


1,730 


2,555 


7,002 


1932 


2,754 


2,992 


1,742 


957 


8,455 


1933 


374 


596 


182 


212 


1,364 


1934 


334 


60 


346 


. 240 


980 


1935 


230 


250 









(*) (*) Source: Research Department, National Credit Office, In. 

Ner- York City 



9782 



-54- 



C. Ca pital and Tur nover. 

As in other needle industries, there is practically no mini- 
mum capital requirement for a manufacturing wholesaler of men's 
clothing to set himself up in business. With a rented loft, a 
pair of shears and a cutting table, a cutter and a salesman are 
in business. Piece goods may be obtained on credit from a com- 
mission house or jobber; samples" are cut and given to an outside 
manufacturer, or contractor, who is paid for his labor. If the 
samples are favorably received and orders result, more materials 
are obtained on credit and the process repeated with the contrac- 
tor. With no more than $2,000 to $5,000 capital such a small con- 
cern, if commitments are limited to business obtained from sample 
showing to sound retailers, may thrive in capable hands, 

1. Contractor's Investment. 

The investment of the contractor or sub-manufacturer 
may be even lower than that of the wholesaling cutter. Some con- 
tract shops hasre not over $500 invested in sewing machines, etc. 
These may be rented or purchased second-hand. The cut material 
is furnished by the wholesaler, who engages his services and pays 
for the labor operations, including the contractor's overhead ex- 
penses and profit, if any. The facility with which an experienced 
operator may enter the garment manufacturing business on very 
small capital gives him this election: If he has insufficient 
funds to establish an inside shop, and still an amount inadequate 
to form the base of a wholesaling cutter's credit with piece- 
goods suppliers, then he becomes a. contractor. There are many 
exceptions to the rule. The contractor may have a considerable 
investment in his plant, and in some cases even assist in finan- 
cing the manufacturer or cutter employing him, by not requiring 
prompt payment of the weeklv labor payroll. Most of the larger 
contract shops have been established in outlying districts adja- 
cent to metropolitan areas, with lower rents and expectancy of 
cheaper labor cost s. Without a comprehensive survey it would be 
difficult to place an estimate on the average or total capital 
employed by contractors in this Industry. 

2. Manufacturer-Wholesaler's Investment Turnover. 

Regular manufacturer-wholesalers are of two types: (a) Stock 
Houses, which manufacture quantities for their own stock and sell 
to retailers and jobbers as the goods are needed, and (b) Order 
Houses which manufacture only against orders secured in advance 
of the season. Most Stock Houses have their shops on their own 
premises or under their immediate control. These are frequently 
referred to as "iffiside" shops, as distinguished from the contrac- 
tors' "outside" shops. Order Houses, though some may operate "in- 
side" shops, usually restrict their manufacturing operations to 
cutting and utilize the contractors' "outside" shops for making 
the garments. 

9782 



-55- 

Obviously the stock Houses' capital needs a.re greater to carry- 
heavier inventories than are those of Order "-oases. So, too, the plant 

.- investment in the inside shop requires a larger capital 
than may be required by the manufacturer employing contractors or sub- 
manufacturers • 

To establish i side shop the . : n ;i' \cturer is unwip* to start 
with less than 3 , 10. Even then his success is doubtful except under 
most favorable c i Ltio s because oi inherent incidental expenses. 
$75,300 is considered none too much to start on in this business. Turn- 
in" his capital actively in each of two seasons, a siiccessful manufact- 
urer may do a 6 ross volume of $600,000 on an investment of 675,000. 
Tiie re are members of the Industry, however, manufacturing in their own 
factories, who nave a total capital investment in excess of $10,000,000. 

It is worthy of note that in the "boom" period -receding the recent 
degression, a movement developed, aided by investment bankers, for con- 
solidation oi various units ■••ifchin the Industry. Large scale production 
v;ae expected to .ring increased profits through 'the advantages of hulk 
purchasing, quantity production, national advertising, market study, 
scientific sales methods, ana establishment of retail branches. Evident- 
ly little consideration was given in this program to the disadvantage 
cf tying up a considerable portion of capital in real estate and plant 
equipment, which obviously slows down the turnover of total capital 
at the risk oi business. 

3. , Relationship of Sales Volume to Invested Capital. 
Turnover to capital or net worth in the period prior to the 
depression was considered in this Industry to average in the neigh- 
borhood oi 7 times. (*) While some producers may do better than that 
today, they are the exception. The concern of medium size appears to 
have the advantage. A study of financial reports of 229 manufacturers, 
each with sales less than $1,000,000, whose aggregate volume in 1933 
amounted to 351,913,217, or an average of $226,717, (**)' indicates a 
turnover of 3.7 times, nearly half of the theoretical average under 
normal conditions. For this grouo a ratio to fixed investment is not 
available. The rate of turnover seems to be in line, however, with 3.88 
times, determined as the average of another grouping of 238 manufacturers 
who in 1933 had an average fixed asset investment of 9.33$ of net worth.(***) 



(* D. Richard Young, in article entitled "Profits in the Clothing 
Industry," American Bankers Association Journal, June, 1923, 
states II .tional Cre-cit Office calculates inventory turnover for 
. factiirers of men's clothing at 7.24 times annually. 

(**) Behind t he Scenes. of B usines s, hoy A. Fouke , Manager, 

Analytical Report Department, Dun and Bradstreet, Inc., 
1935, pp. 144-145. 

(***) Analysis of Percentages in Robert Morris Associates Statement 
Studies, 1933. 



9732 



On the other hand n study of figures of 63 large concerns having a 37"; 
investment in fixed assets indicates a group turnover of only 2.75 times 
net worth, (*) 

The average ratio of profit to turnover varied only 4/10 of 1 per 
cent in each of the studies cited, whereas the profit' to net worth 
averaged* 9. 2$ in the first instance, 7,18$ in the second, and only 3.6^ 
for the smaller group of Larger manufacturers. In short, the large 
firms had all the incidental worries of conducting a large "business 
with a heavy fixed investment, "but did not secure a comparable return. 
The effect of the N.I.Ii.A., "both in the 1933 anticipation and the 1934 
operation, upon the not worth and volume of "business of 229 identical 
manufacturers spread throughout the United States, whose 1933 volume 
was hereinbefore stated, is indicated in part b? the following group 
summary: (**) 

1932 1935 1934 

Net Worth Total- 314,026,370 $15,089,441 $15,645,815 

Average- 61,250 65,893 68,322 

$ Increase over 

1932 Net Worth - 7.6$ 11.5$ 

Net Sales Total- $40,992,104 $51,918,217 $62,799,592 

Average- 179,005 226,717 ' 274,234 

$ Increase over 

1932 Sales- - 26.7$ 53.2$ 

A breakdown of the foregoing summary by large cities appears in 
four charts following. (***) 

It is noted that the trend was fairly consistent in all areas, ex- 
cept Chicago, where net worth declined 10.8$ in 1933, with little change 
in 1934. The Chicago tranche of the Industry was under an exceptional 
strain during this period when severe losses and readjustments occured 
among the 1-rger concerns in the entire Industry whose figures 



( *) Analysis of Percentages in ?.obert Morris Associates Statement 
Studies, 1933. 

(**) A Profit and Loss Survey of Clothing Manufacturers Prepared by the 
■ Research, and Statistical Division of Dun and Bradstreet , Inc. , 
and National Credit Off.ice, Inc. Tables XIII, XIV, and XV are 
reproduced from this survey. 



(***) See Tables XIII and XIV. 



9732 



-57- 

were included in the Cincinnati group shewed the largest two years' per- 
centage increase in net worth, with Boston second, and New York third. 
In increased percentage of volitne "business, 120 manufacturers in l\ T ew 
York had only a .7.j advantage over Cincinnati' s 5, who in turn bettered 
Baltimore's 12 manufacturers by .9$, 

That the ratio of sa-le^ to not worth varies inversely with the 
size of the concern as measured by net worth, .l^ farther illustrated 
in a breakdown study cf 243 manufacturers operating in 1923 with an 
average net worth cf ;?55,502, raid average volume of ;218,287, sum- 
marized as follows: (*) 



Net Vorth - Up to )25,000 '50,000 $75,000 Total 

$25,000 to to and up 

$49,000 $74,000 

No. of Cases 62 93 41 42 243 

Ave. Sales $70,927 $144,121 15237, 015 $590,592 $213,287 

Ave. N.Jorth 15,935 35,510 61,780 154,429 55,502 

Turnover 
Sales N.Jorth 4.45 4.06 3.34- 2.82 2.92 

4. Price flange in flelation to Turnover. 

Selection of >rice range of the product is important in 
relation to the manufacturer's available capital. Price range may 
also be determined by location. In recent years there has been a ten- 
dency of manufacturers in the higher price line to concentrate in 
flochester and eisewaere thai; New York, where perhaps 40 ■' of the Indus- 
try remains largely in the lower and medium clrssif ications. 

That turnover of capital is greater in the lower price 
ranges is indicated in the following breakdown of sales and net worth 
of 243 manufacturers whose operations in 1933 form part of this 
study: (**) 



(*) See Table XVI, prepared from Statements filed with National 
Credit Office, Inc., Hew York. 

(**) See Table XVII, prepared fro:; 1 , statements filed with National 
Credit Office, Inc., New York. 



9782 



-58- 
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-61- 



TABLE XVI 
OPERATING COSTS IN TliE IflM 1 3 CLOTHING INDUSTRY 
B.^SED ON A STUDY OF 243 MANUEACTU3E3S .VI Til SALES OF $53,043,862 FOR 1933 





Breakdown Accor 


ding to Net Jortli 




Net .'.'orth 


Up to 


$25,000 


$50,000 


$75,000 


Total 




•25,000 


to 
$49,000 


to 
.574,000 


and up 




No. of Cases 


62 


98 


41 


42 


243 


Ave. Sales 


$70,927 


$144,121 


$237,015 


$590,592 


$218,287 


Turnover 












(Sales IT.. 7.) 


4.45 


4.06 


3.84 


3.82 


3.93 


Ave. Net 












Worth 


$15,935 


$35,510 


$61,780 


$154,429 


$55 , 502 




Operating 


Costs in Tern: 


is of Percentage of Sal 


es 


Material 


49.16 


49.93 


51.98 


- 44.70 


51.57 


Labor 


KJtZi • -/O 


32.95 


31.78 


39.12 


31.85 


Cost of 












Goods Sold 


82.09 


82. 88 


83.76 


83.82 


83.42 



Gross Profit 

on Goods Sold 17.91 



17.12 



16.24 



16.18 



16.58 



expenses t : 












Salaries 


14.51 


13. 50 


12.54 


11.69 


13.56 


Bad Debts & 












Depreciation 


1.20 


1.34 


1 . 64 


1.50 


1.46 


Ctlier Income 


.10 


.18 


.19 


.31 


.24 


Other Expense 


.22 


.20 


.23 


.73 


.46 


Net Profit 


2.08 


2.26 


1.97 


2.57 


2.34 


Kc . Concerns 












Showing Profit 


49 


89 


39 


39 


216 


Percent of 












Concerns Show- 












ing Profit 


79.03 


90.82 


95.12 


92.36 


88.89 



Source: National Credit Dffice, Inc., 
New York City. 



37R2 



-62- 



Price Range- 



Up to 


: >10 . 30 


$15.50 


$22.50 


$10.00 


to 


to 


and 




'15.00 


$22.50 


up 



Total 



No. of Cases- 56 77 87 23 243 

Average Sales- $238,729 $228,045 $210,360 3165,833 $218,287 

Av. Net fforth- 49,554- 60,481 54,299 57,870 55,502 

Turnover 

Sales/Net Jorth- 4,83 3.77 3.87 2.87 3.93 



D. Fina ncing. 

1. Sources of Capital. 

Up to twenty or twenty-five years ago the men' s clothing 
manufacturers were mainly German immigrants who were capable business 
men with a thorough knowledge of tlieir craft. They invested their own 
money, developed their establishments carefully and well within their 
own control. Gradually immigrant infiltration brought many Russian 
Jews into the business, to a large extent replacing the more stolid 
German ele ent. Prior to 1928 investment bankers succeeded in 
effecting ■■• rumber of mergers of the old established businesses into 
some of ill larger units of today. The tendency, however, has been 
to keep Vii ■_. business under family control, but the majority of those 
in business today have proportionately less of their own and family 
funds at the risk of the business. 

2. Source.s of Credit — Merchandise Suppliers and Banks. 

There is a heavy leaning upon merchandise credits and 
bank loans. The latter formerly consisted cl short term borrowing, 
during the height of the selling season, to "Liquidate maturing mer- 
chandise bills and secure the advantages of discounts. Loans were 
promptly repaid as .customers' accounts "..:-- collected. For reasons 
hereinafter stated, the manufacture:, 's b> . 1 Soilay is practically a 
partner in the business through b.ue ccajtinucus holding of the concern's 
notes, usually endorsed by the principals. 

3. Terms Granted by uills. 

Woolens and worsteds were formerly bought by the clothing 
manufacturer on terms ranging from 30 days to 4 months. Usually 
season's d/.tings were given with Spring bills coming due in April or 
May, avid Pall bills in October or November. Cotton linings were 
purchased on a ten and sixty-day basis. Under the codes, the discount 
on woolens was withdrawn and terms fixed at sixty days net. As the 
cost of material represents approximately fifty percent of the selling 
price of a man's suit, it is obvious that the shortening of buying 
terms slows down the capital turnover and presents the manufacturer 
with the necessity of procuring longer a.nd more continuous banking 

9782 



-63- 
TABLE XVII 

OPE^ITING COSTS IK THE i.iEN' S CLOTHING INDU5THY 
3A5ED jN A STUDY jF S43 MAHUI'AOTtJHSRS .UTil SALES DF 553,043,862 FOH 

1932 

B ruakdown According to Price 3fo nge 

Price Range Up to $10.50 to $15.50 to $2?. 50 

$10.00 $15.00 $22.50 & Up Total 

Ho. of Cases 56 77 87 23 243 

Average Sales $238,729 ; 33,045 $210,360 $165,833 $210,287 

Turnover 
(Sales/K.7) 4.82 3.77 3.37 2.87 3.93 

Average Net 

Tortl. $49,554 $60,481 $54,299 $57,870 $55,502 

Operating Costs in Terms of Percentage of Sales 



.laterial 


55.93 


53.33 


43.76 


39.32 


51.57 


Labor 


30.93 


30.03 


33. 63 


35.00 


31.85 


Cost of Goods 












Sold 


86.85 


83.86 


82.39 


74.32 


83.42 



.97 


1.72 


1.55 


1.57 


1.46 


.16 


.23 


.20 


.70 


.24 


.21 


.68 


.42 


.49 


.46 



Gross Profit 

on Goods Sold 13.15 16.14 17.61 25.68 16.58 

Expenses £& 

Salaries 9.93 11.19 13.62 23.01 12.56 

Bad Debts C. 

Depreciation 

"tlier Income 

Other Expense 

let Profit 2.20 2.78 2.22 1.31 2.34 

V.' . Concerns 

Slowing Profit 54 69 75 18 216 

Percent of Con- 
cerns Shewing 
Profit 96.43 39.61 36.21 73.26 38.39 

Source: National Credit Office, Inc., New York 



9781 



-64- 

accommodation, or increasing his capital investment, which few have 
"been able to do. 

There have always "been variations in terms, even under the 
codes. To..ay some manufacturers are given extra dating on woolens "by 
special arrangement, and lining terms recently have become more 
liberalized at 2 off, 4 months, or 3 off 10 days for anticipation. 

(a) Effect cf Selling Policy of Mills. 

The selling policy of woolen mills in recent years has 
been an important factor in increasing the financial burdens of the 
clothing rnanuf ?.c curer. Fnereas the mill formerly manufactured for 
stock and assumed a larger share of financing the merchandising cycle 
from raw material to consumer goods; today, the mills put the raw wool 
in process only on orders from the piece goods buyers, such as the 
clothing manufacturers, which take six to eight v/eeks to fill. 

Jith his commitment made well in advance of receipt 
of retailers' orders and the requirement of paying for this material 
in 60 days from delivery, the clothing manufacturer has been obliged 
to increase his investment in inventory in order to show a full line 
of assorted styles and sizes to the retail buyer. In addition the 
clothing manufacturer must increase his payroll disbursements by start- 
ing cutting two to five weeks earlier than was necessary up to about 
two years ago, when the Code fixod a 36-iiour maximum working week. 
The average period for the production of a suit from the cutting opera- 
tion to the 'completion thereof has increased from about two weeks to 
nearer four weeks. 

While the regular mill terms are net sixty days, with 
one percent discount allowed for payment within ten days, the financial 
burdens of the average manufacturer are such that time for payment is 
more impo": lant than the discount,. Only those who are in a fortunate 
position a. e able to take advantage of the discount privilege. In 
fact, the -oncession made to a manufacturer of the Iiighest financial 
standing is an extra. sixty days which is granted by the mills subject 
to payment of an interest charge of six percent per annum. Those 
happily in funds or with available Ijnes of ban!;: credit are able to 
earn si:: percent by anticipating payment within the regular sixty day 
terras. 

4, Governmental Aid. 

During the depression, Governmental agencies were appealed 
to in numerous instances, but on the whole the nature of the assets were 
such that dependence rested mainly with the existing bank relationship. 
RecorO.s of the Reconstruction Finance Corporation (*) indicate- that 
from June 19, 1934, to June 30, 1935, loans were authorized to only 



(*) See Table XVIII. 



9782 



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9782 



OJ 



CTv 



-66- 

seven men's clothing manufacturers. This represented .6^ of the total 
number of borrowers from this Federal agency, in an authorized amount 
of $473,500, or less than .7 c o of the grand total of all authorized 
R. F.C. loans during this period. 

5 • S elling T erms 

The highly competitive nature of this Industry, and probably in 
part due to the four months' terms formerly granted by the fabric mills, 
has resulted in the extension of fairly long terms to retailers who 
have not been slow to seize their advantage. Usual selling terms to 
the average retailer are 2%, 60 days, but not infrequently the retail- 
er unfairly takes 30 days extra and still deducts 2^ discount. The 
manufacturer, fearing to lose business to competitors, accepts the 
added financing burden. Terms to large department stores and big chain 
buyers run from 5^ to 7^ discount for end-of-month payment. During the 
depression the manufacturer not selling in large volume to department 
stores and chains has had to absorb substantial bad debt losses through 
the failure of many small retailers. 

(a) Seasonal -Activity Changes. 

One of the important changes which has taken place in the Men's 
Clothing Industry is that of seasonal activity. Formerly the manu- 
facturers' producing as well as selling seasons were distinctly two 
a year. The factory working periods were of four months' duration 
twice a year; that is, the expenditure for materials and labor pro- 
duced finished merchandise which was sold and paid for by the retail- 
er within a period which enabled the liquidation of indebtedness and 
an accounting: of the season's net profit or loss twice each year. This 
fostered n generally high state of liquidity in a stable business. The 
successful manufacturer was a favored customer of his bank which ex- 
tended his credit requirements during the seasonal peaks and twice a 
year he was wholly out of debt, except for purchase commitments for 
the next season's required materials not as yet taken into his inven- 
tory figures. 

Today, with less favorable arrangements with the mills, higher 
labor costi.., and shorter working weeks, most manufacturers of men's 
clothing find themselves producing garments twelve months a year, 
largely for stock, with two selling seasons, and no period when the 
average plodding manufacturer is able to liquidate a sufficient pro- 
portion of his larger inventories to get out of debt to his bank. 

(b) Working Capital. 

An analysis of end-of-the-season statements submitted by 126 
manufacturers for 1931, 167 for 1932, and 238 for 1933, indicated a 
three-year average ratio of 56. 64 of the working capital represent- 
ed by inventory for the first two years, and 72^ at the end of 1933.* 



(*) Behind the Scenes of Business, Roy A. Foulke , Manager, Analytical 
Report Department, Dun and Bradstreet, Inc., pp. 144-145. 

9782 



-67- 

Under present conditions it is conservative to say there has 
been an increase over former periods of at least one-third of the 
average menuf actiirer ' s working capital constantly tied up in in- 
ventory, subject to the vagaries of markdowns due to competitive 
conditions or declining prices in woolens. In brief, he requires no 
less than one-third additional capital today to do the same volume 
of business 'as formerly, and operating results during recent years 
have not made that needed increase in capital available. 

The working capital problem may be epitomized thus: Prior to 
1933, at the peak of the two seasons, total indebtedness averaged 
two to three times working capital, and dropped in June and December 
substantially to an offset of one for one. In the Fall of 1935, lia- 
bilities ranged three to six times working capital for the average 
clothing manufacturer, with no indication under existing conditions 
that these ratios can be reduced. 

Frior to 1933, May ended the Spring operating season, which 
commenced about January 15. During June and half of July, there 
were no manufacturing operations at all. This month and a half re- 
presented the period during which liabilities were liquidated by 
funds collected from accounts receivable built up during the Spring 
operating season. With liabilities at the lowest point, Fall oper- 
ations began about June 15, and continued until just prior to Dec- 
ember 1st. December and the first half of January represented the 
second annual liquidation period. 

Today the cutting of Fall merchandise commences the first week 
in June and collections from accounts receivable, created by the 
Spring business, are used to finance Fall operations for merchandise, 
labor, and expenses. The same process occurs with advancing the 
Spring cutting to January and for the larger manufacturer, as early 
as October. This continuous operating process, with heavier inven- 
tories, results in a constant renewal of bank loans. - The larger 
manufacturer, using more than one bank, is able to maintain a high- 
er credit standing by rotating his bank loans, borrowing from one 
bank to pay off another. 

E . Labor Costs 

Since the practical elimination of the sweat shop, highly skill- 
ed garment workers in the concentrated and strongly unionized areas 
of New York, and certain other large producing localities, have en- 
joyed steady and substantial increased rates of pay. These are nat- 
urally reflected in the production costs -of the garment and must be 
provided for in the weekly payroll. As increased prime costs-mat- 
erial and labor-accentuate the financing requirements of the manu- 
facturer, so, too, they increase his burden when buying resistance 
develops to his attempt to increase prices. As there remain some 
important areas where labor is less highly organized, and rates of 
pay are lower, competition from such sources facilitates the sales 
resistance to the product of the unionized shop. 

It has been pointed out herein that the average gross profits 
on sales is around twelve per cent. That means the cost of production 

9762 



-68- 

alone is, on the average, approximately eighty-eight per cent of net 
sales. Operating figurers of 243 manufacturers previously referred to 
in this chapter* indicated that in 1933 the average cost of direct 
labor in relation to sales value of product, amounted to 31.85$, and 
ranged according to price -lines and other factors from 30.03 ? -> to 39.12$ 
in that year. An important effect of the codes was a further increase 
in labor costs. Evidence of the trend is found in a comparison of the 
"Common Size" Frofit and Loss Statements,** of men's clothing manufact- 
urers, computed from a limited number of operating statements sub- 
mitted for this purpose. Direct labor, which in 1929 figured 16.57$ 
of net sales, increased by 1934 to 29.50$, an indicated increase of 
nearly 78$ in five years. As a correlary, competitive conditions 
have caused many manufacturers to seek means of reducing labor costs. 
Attempts at downward reduction of rates or increased production per 
man hour for the established rates usually result in disturbances of 
production programs and incidental expenses which more than nullify 
any apparent success attending the employer ' s effort. His next thought 
is migration to a less highly organized area, where cheaper labor may 
be had.*** 

III. RAW AlID SEMI -PROCESSED MATERIALS 

The principal materials used in the Men's Clothing Industry are 
woolen suitings and pantings, flannel suitings and pantings, top-coat- 
ings, overcoatings, worsted staple suitings and pantings, and fancy 
suitings and pantings. 

A. Cost of Materials . 

The value and volume of the total production of the raw materials 
named above for the years 1929, 1931, and 1933, is snown in Tables 
XX, XXI, r id XXII, It is reasonable to assume that practically all the 
fabrics classified in these tables enter into the production of men's 
clothing; however, one cannot be certain of the exact amount which is 
utilized by that portion , of the Industry under survey. 

An analysis of the tables showing the production and distribu- 
tion of the fabrics used by the Men's Clothing Industry reveals a 
wide fluctuation in both volume and value of these raw materials be- 
tween the years 1929, 1931, and 1933. The total value of woolen and 
worsted fabrics declined from $321,242,000 in 1929 to pl79,772,000 in 
1931 and to $157,602,300 in- 1933: I;j torms'of a'qnaro yards the pro- 
duced y»->]"on rnd w.rstcid fribrics totaled 263,070,000 in 1929, but 
r'ogi stored^ a. sharp drop !•-. 170,2100,000 in 1951. Th; djclino in a 
yard.agc was reversed by 1933 r.s 



(*) See Tables XVI, XVII, and XIX. 

(**) Statement Studies, the Robert Morris Associates, 1929, 1930, 1932, 

1933, 1934. 
(***) See Section VIII of this Chapter. 



9782 



-GO- 
TABLE XIX _., - 

OESF&TIWG- COS TS IN THE CLOTHING INDUSTBY 
BASED ON A STUDY. OF 243 MAMUPACTU3EHS WITH SALES OF $53,043,862 

FOE 1933. 

COMPARISO N OF FF OFTT^LE AND UNFROFI^ ) LE MANUFACTURING 
NET WORTH Less Than 525,000 52 5 ,OP >Q and Up 

Losing Profiting Losing Frofiting 
No. of Cases 13 49 14 167 



Average Sales 


$47,904 


$77,282 


$165,291 


$277,445 


Turnover 


3.58 


4.54 


3.07 


3.94 


Sklee/M' 










Average Net 


$13,385 


$16 ,635 


$53 , 800 


$70,335 


Worth 










Opera 


tin.?; Costs 


in Tez'ir.s of Fercent; 


irf:e of Sales 




Material 


47.76 


49.39 


45.21 


52.12 


Labor 


32.00 


33.09 


35.16 


31.58 


Cost of Goods 










Sold 


79.76 


82.48 


80.37 


83.70 



Gross Profit on 
Goods Sold 20.24 17.52 19.63 16.30 

Expenses and 
Salaries 20.99 13.45 17.70 12.12 

Bad Debts and 



Depreciation 


2.13 






1.04 


Other Income 


.09 






.10 


Other Expense 


.20 






.22 


Net Frofit 








2.91 


Net Loss 


2.99 








Percent making 
Frofit 




79 


.03 




Percent suffering 
Loss 




20 


.97 





2.22 


1.44 


.33 


.24 


1.09 


.45 




2.53 



1.05 



92.27 



7.73 



Source: National Credit Office, Inc., New York 



9782 



-TO- 
TABLE XX 

MEN'S CLOTHING INDUSTRY 
Production of Principal Materials Used, by Kind and State, 1929 



1 






iq2q 








Kind and State 


Pounds 


Sauare 


Tai-ds 


Value 






Per Cent 




Per Cent 


Thousands 


Per Cent 




Thousands 


of Total 


Thousands 


of Total 


of Dollars 


of Total 


Men's fear Fabrics 














Woolen, total 


81,630 


100.0 


105,752 


100.0 


121,568 


100.0 


Suitings and pantlngs (except 














flannels), total 


34,802 


42. b 


51.49b 


48.7 


52.750 


43.4 


Connecticut 


3,423 


4.2 


4.b83 


4.4 


5.31b 


4.4 


Maine 


6.939 


8.5 


10,960 


10.4 


9.249 


7.6 


Massachusetts 


8.067 


9.9 


10,504 


9.9 


12.435 


10.2 


Michigan 


193 


.2 


237 


.2 


304 


.3 


New Hampshire 


3.09b 


3.8 


4.765 


"♦.5 


3.984 


3.3 


New Tork 


2.155 


2.6 


2,b44 


2.5 


4.30b 


3.5 


Pennsylvania 


1.4R0 


1.8 


2,243 


2.1 


1.773 


1.5 


Vermont 


543 


. .7 


730 


• 7 


793 


.b 


Other States 


8.93b 


10.9 


14.730 


14.0 


14,590 


12.0 


Flannel suitings and pantlngs. 














total 


2.099 


2.b 


3.929 


3.7 


4,204 


3.5 


Maine 


292 


.4 


521 


.5 


b67 


.6 


Massachusetts 


589 


• 7 


1.091 


1.0 


l.ObB 


•9 


Other States 


1.218 


1.5 


2.317 


2.2 


2.469 


2.0 


Topcoatings, total 


5.332 


6.5 


7.0b8 


6.7 


10,315 


8.5 


Connecticut 


1,1* 


1.4 


1.^37 


1.3 


2.251 


1.9 


Maine 


330 


.4 


382 


.4 


668 


.5 


Massachusetts 


909 


1.1 


1.2f0 


1.2 


1.590 


1.3 


Other States 


2.909 


3-b 


3.979 


3.8 


5.812 


4.8 


Overcoatings, total 


21.0&H 


2b. b 


18,b2b 


17.b 


25,019 


20. b 


Connecticut 


2,054 


2-5 


2.171 


2.1 


3,5b9 


2.9 


Maine 


1,420 


1.7 


1.103 


1.1 


2,885 


2.4 


Massachusetts 


11. A8 


14.4 


9.453 


8.9 


11,482 


9.5 


Oregon 


1.932 


2.4 


1,5/5 


1.5 


1.351 


1.1 


Rhode Island 


882 


1.1 


1,318 


1.2 


868 


-.7 


Vermont 


985 


1.2 


827 


.8 


907 


.8 


Wisconsin 


080 


.8 


540 


• 5 


632 


• 5 


Other States 


2.013 


2.5 


i.b39 


1.5 


3.325 


2-7 


Uniform cloths, total 


2,566 


3.1 


3. 52* 


3.3 


6.863 


5.6 


Massachusetts 


75* 


• 9 


9&5 


.9 


1,609 


1.3 


New Hampshire 


12 


s/ 


20 


A 


23 


s/ 


Other States 


1.800 


2.2 


2.539 


5.231 


4.3 



Other 



15.147 



18.b 



21,109 



20.0 



22,417 



18.4 



Worsted, total 


72.607 


100.0 


130. 318 


100.0 


199,674 


100.0 


Staple, suitings and pantlngs. 














total 


35,ioo 


48.3 


60,316 


4b. 3 


89.095 


44.6 


Massachusetts 


12,344 


17.0 


25.134 


19.3 


33.0bl 


16.5 


Pennsylvania 


3.502 


4.8 


6./S2 


5.2 


10,767 


5.4 


Rhode Island 


13.390 


18.4 


16.471 


12.6 


31,785 


15.9 


Other States 


5.8b4 


8.1 


11.929 


9.2 


13,482 


6.8 


Fancy suitings and pantlngs, 














total 


33.756 


4b.5 


b2,495 


48.0 


99.895 


50.0 


Connecticut 


2.275 


3.1 


4.033 


3.1 


7.121 


3.6 


Massachusetts 


ll,b04 


lb.O 


22,207 


17.0 


34.375 


17.2 


New Jersey 


2,010 


2.8 


3.978 


3.1 


6.398 


3.2 


New York 


2,bl4 


3.6 


5.326 


4.1 


7.496 


3.8 


Pennsylvania 


2,480 


3.4 


3.369 


2.b 


7.237 


3.b 


Rhode IiLul 


8.495 


11.7 


15.474 


11.9 


25.440 


12.7 


Other State . 


4.278 


5.9 


8,108 


b.2 


11.828 


5.9 


Uniform Cloths 


1,418 


1.9 


2.525 


1.9 


4,232 


2.1 


Topcoatings 


54 


.1 


9b 


.1 


153 


.1 


Overcoatings 


485 


.7 


b4 5 


.5 


1.095 


.b 


Other 


1. /94 


2.5 


4,241 


3.2 


5.204 


2.b 



SOuRUE: 



9782 



Census of Manufactures, 1^29, Vol. II, pp. 415, 4lb. Data are for CensuB classification 
■Woolen Goods and Worsted Goods.' They do not Include establishments with annual prod- 
uction valuel at less than $5,0J0. 

a/ Less than .1 per cent. 



Prepared by 

Industry Statistics Unit 
Statistics Section 
Division of Review, NRl 



-71- 
iriBT.it xxi 

IflEH'S CLOTHING INDUSTRY 
JToductlon of Principal Materials Used, by Kind and State, 1931 









i<m 






KIND AND STATI 


Poundj 


Square Yards 


yalue 






Per Cent 




Per Cent 


Thousands 


Per Cent 




thousands 


of Total 


Thousands 


of Total 


of Dollars 


of Total 


lien's fear Fabrics 














Woolen, total 


Ul, 814 


100.0 


58.723 


100.0 


55,080 


100.0 


Suitings, and pantlngs (except 














flannels), total 


i7.y*7 


•1.5 


29,401* 


50.1 


23,128 


42.0 


Connecticut 


l,2b( 


3-0 


2.333 


4.0 


2,040 


3-7 


Maine 


2.153 


5-1 


3.S91* 


b.b 


2,415 


4.4 


Massachusetts 


4,298 


10.3 


7.01b 


12.0 


5.858 


lO.b 


Pennsylvania 


(3b 


1.8 


1.005 


1.7 


1,178 


2.1 


Veraont 


gjl* 


2.0 


1,08b 


1.8 


524 


1.0 


Other States 


8.059 


19.3 


14,070 


24.0 


11.113 


20.2 


flannel suitings and pantlngs, 














total 


2,331 


0.8 


4,699 


8.0 


4,260 


7.7 


Massachusetts 


922 


2.2 


1,164 


2.0 


1.299 


2.3 


Other States 


1.909 


l*.b 


3.535 


b.O 


2.9bl 


5- 1 * 


Topcoat logs, total 


3.862 


9.2 


5.027 


8.6 


5.267 


9.6 


Connecticut 


826 


2.0 


1.136 


1.9 


1.405 


2.6 


Massachusetts 


660 


1.6 


818 


1.4 


80b 


1.5 


Other States 


2.3r6 


5-6 


3.073 


5-3 


3.056 


5.5 


Overcoatings, total 


9.879 


2 d 


8.213 


14.0 


10,666 


19.4 


Connecticut 


1,7>*1 


1,465 


2.5 


2.217 


4.0 


Maine 


705 


1.7 


633 


1.1 


1,218 


2.2 


Massachusetts 


4,479 


10.7 


3,578 


6.1 


3,949 


7.2 


Bhode Island 


3b8 


.9 


238 


.4 


306 


.8 


Other States 


2.586 


b.l 


2.299 


3.9 


2.976 


5.>* 


Uniforsi cloths, total 


1,900 


l*.b 


2,421 


4.1 


3.353 


6.1 


Massachusetts 


357 


.9 


435 


.7 


620 


1.1 


Other States 


1.5*3 


3.7 


1.98b 


3.4 


2, 733 


5.0 



Other 



5.995 



1"*.3 



8,959 



15.2 



8,406 



15.2 



Worsted, total 




61. 131 


100.0 


112.1 (7 


100.0 


124, b92 


100.0 


Staple, suitings 


and pantlngs. 














total 




29,08b 


47.6 


53. (96 


48.0 


55,856 


44.8 


Massachusetts 




12.5(8 


20.6 


23,t>2( 


21.1 


24,093 


19.3 


Bhode Island 




8.746 


14.3 


15.052 

I 1 *. 517 


14.0 


17,1(0 


13.8 


Other States 




7.762 


12.7 


12.9 


14.593 


11.7 


Taney suitings and pantlngs. 














total 




28,282 


46.3 


52,000 


4b.3 


62,049 


49.8 


Connecticut 




1.439 


2.4 


2,442 


2.2 


3.253 


2.b 


Massachusetts 




8.846 


14.5 


17.035 


15.2 


21.5^8 


17.3 


Sew Jersey 




629 


1.0 


1.133 


1.0 


1,461 


1.2 


Hew York 




1,486 


2.4 


2,890 


2.b 


2,981 


2.3 


Pennsylvania 




3,241 


5.3 


5.(58 


5.1 


7.579 


b.l 


Bhode Island 




8,t>37 


14.1 


15.031 


13- 1 * 


18,788 


15.1 


Other States 




4,004 


6.6 


7.711 


6.8 


6,1*09 


5.2 


Uniform cloths 




1.738 


2.8 


2,452 


2.2 


3.213 


2.b 


Topcoatlngs 




l.bl9a/ 


2.b 


3.127a/ 


2.8 


2. (91«/ 


2.2 


Other 




40b 


.7 


802 


.7 


783 


.b 


SOuRuE: Census of 


Manufactures. 


1931. P- 3b?. 


Data are 


for Census 


classification 


"Woolen Goods 



and Worsted Goods.* They do not Include establishments with annual production valued at 
less than $5,000. 

a/ Topcoatlngs, overcoatings, other worsted men's wear fabrics, and auto cloths. 



Prepared by 

Industry Statistics Unit 

Statistics Section 

Division of Review, RBI 

9782 



-72- 

TJLBLE XXII 

MEN'S CLOTHING INDUSTRY 

Production of Principal Materials Used, by Kind, 1933 



1933 



Pounds 



Kinds 



Per 
Cent 
of 
Thousands Total 



_S < mare Yards 
Per 
Cent 
Thou- of 
sands Total 



Value 



Thousands 
of Dollars 



Per Cent 
of Total 



Men's Wear Fabrics 
Woolen, total 

Suitings and 

pantings (except 
flannels) , 
total 



58,433 100.0 77,397 100.0 55,813 



20,526 



35.1 33,569 43.4 19,076 



100.0 



34.2 



Flannel suitings 














and pantings, 
total 


5,1.31 


8.8 


9,806 


12.7 


7,415 


13.3 


Topcoat ings, 
total 


7,184 


12.3 


9,350 


12.1 


8,387 


15.0 


Overcoatings, 
total 


20 , 233 


34.6 


15,415 


21.2 


14,084 


25.2 


Uniform cloths 

total 
Other 


1,634 
3,725 


2.8 
6.4 


2,662 
5,595 


3.4 
7.2 


3,211 
3,640 


5.8 
6.5 


Worsted, total 


58,157 


100.0 


105,331 


100.0 


101,789 


100.0 



Staple suitings 
and pantings, 
total 

Pancy suitings 
and pantings, 
total 

Uniform cloths 

Topcoat ings 

Overcoatings 

Other 



29,080 



27,613 
543 
133 
166 a/ 

622 " 



50.0 53,425 50.7 48,119 



.5 


49,227 46.7 


51,074 


.9 


750 .7 


889 


.2 


136 .2 


214 




278 a/ .3 


287 a/ 


.1 


1,465 1.4 


1,206 



47.3 



50.2 

.9 

.2 

.3 

1.1 



Source: Census of Manufactures. 1953 . "Woolen and Worsted Goods," td.4 

Data are for Census classification "Woolen Goods and Worsted Goods." 
They do not include establishments with annual production valued at 
less than $5,000. 

a/ Other worsted, including overcoating. 

Prepared by 

Industry Statistics Unit 
Statistics Section 
Division of Review, NRA 



9782 



shown by a total production of 182,728,000 square yards. 

B . Source of Materia ls 

A distribution by States of the fabrics used by the Men's 
Clothing Industry is shown for the years 1929 and 1931 in Tables 
XX and XXI, respective .y. It is readily observed that tne bulk of 
these materials is produced in the States of Massachusetts, Rhode 
Island, Connecticut, and Maine. 

C . Ratio of Materials' Cost to Value of Froducts . 

The percentage which the cost of materials is of the value of 
products is shown for the years 1929, 1931, and 1933 in Table XXIII. 
Attention is directed to the fact that "materials" in this table in- 
cludes fuel and purchased electric energy, as well as the fabrics 
discussed above. Further,' all figures in this table for the years 
1929, 1931, and 1933 relate to all types of men's clothing except 
work clothing, and hence do not conform to the Men's Clothing In- 
dustry codal classifications. An examination of the figures show- 
ing materials' cost in relation to the total value of product in- 
dicates little change in the ratios for the years 1929, 1931, and 
1933, which are 48. 9 per cent, 47.8 per cent, and 48.2 per cent, res- 
pectively. 

IV. EMPLOYMENT 

In Chapter III, "Fre-Code Problems of the Industry and Writing 
of the Code," there will be found a review and conclusions respect- 
ing employment, wages, and hours in the Men's Clothing Industry prior 
to the formation of the Code. Chapter V, "Labor Under the Code," 
contains a summary of changes in labor conditions brought about dur- 
ing the Code period. It is the purpose here to present statistical 
data showing somewhat in detail,, at least for recent years, the vary- 
ing conditions of employment in this Industry. 

Table XXIV, parts A, B, and C shows indexes of factory employ- 
ment and an estimated number employed for the years 1926-1935, in- 
clusive.* Using 1929 as the base year, it is seen that for the 



(*) "The Bureau of Labor Statistics indexes of employment and pay- 
rolls have not been adjusted to the 1933 Census. The Census 
classifications were revised in 1933 to include many operations 
which are not covered by the 3.L.S. sample. Current labor data 
from the B.L.S. are based upon a sample covering, for employment, 
payrolls, and average weekly wages, approximately 50 per cent, and 
for man hours, average hours and average hourly wages, approximat- 
ely 40 per cent of the wage earners reported under the Census class- 
ifications 'Clothing (except Work Clothing), Men' s, Youths' , and Boys J 
Not Elsewhere Classified' and 'Clothing, Work, Men's.' Approximate 
ely 65 per cent of the value of products under these Census Class- 
ifications were covered by the Men's Clothing Industry Code; the 
remaining products were covered for the most part by the Cotton 
(Foot-note continued on the following page) 

9782 



-74- 
TABLE XXIII 

RATIO OF LABOR COST, AND 0? MATERIALS' COST TO 
TOTAL VALUE OF PRODUCT 



Total Value Labor Cost a/ Materia l s' Cost b / 
Year of Product Amount Per Cent Amount Fer Cent 
(000' s) (000' s) of Total (OPO's) of Total 



$179,769 19.9 $440,505 48.9 c/ 

115,041 20.9 , 263,675 47.8 c/ 

92,265 20.7 214,639 48.2 c/ 

450,000 e/ 115,530 f/25.7 f/ 



Source: Census of Manufac turers, "Men's Clothing"; 1934 figures 
from Code Authority for Men's Clothing Industry. 

a/ Consists only of wages paid to wage, earners. 

b/ Cost of materials, fuel, and purchased electric energy. 

c/ These figures cover all men's clothing (except work) as 
classified by the Census of Manufacturers. 

d/ Because of changes in Census classifications, 1933 fig- 
ures are not comparable with those for previous years. 

e/ Code Authority estimate. 

f_/ Estimated on basis of Code Authority figure for value of 
products . 



1929 


$901 , 104 


1931 


551,416 


1933 d/ 


445 , 220 


1934 


450,000 



9782 











TABLE 


Sit 


















MEN'S CLOTHING 


















FACTORY 


EMPLOYMENT 










A 




Index of 


Employment (1923-25=100) a/ 










1926 


1927 


1928 


1929 


1930 


1931 


1932 


1933 


1934 


1935 


Jan. 


96.7 


100.7 


104.1 


99.4 


100.5 


80.9 


76.0 


70.8 


76.7 


83.9 


Feb. 


99.7 


104.4 


106.7 


102.8 


101.9 


86.1 


81.8 


77.7 


85.5 


91.8 


Mar. 


98.9 


103.3 


105.1 


104.5 


98.6 


88.2 


81.1 


75.9 


88.7 


94.6 


Apr. 


93.7 


97.8 


97.8 


99.5 


93.0 


86.6 


74.7 


75.2 


88.0 


94.7 


May 


92.0 


97.1 


95.7 


98.6 


89.4 


82.9 


68.2 


73.7 


81.5 


87.6 


June 


97.1 


102.2 


101.3 


105.1 


92.8 


83.4 


63.8 


79.6 


81.6 


86.6 


July 


95.3 


102.9 


99.5 


105.1 


90.6 


86.8 


64.3 


86.9 


81.4 


88.9 


Aug. 


99.3 


105.9 


102.9 


107.6 


90.6 


89.6 


71.0 


88.6 


88.4 


93.6 


Sep. 


99.0 


105.5 


102.7 


107.3 


92.4 


90.8 


77.8 


89.8 


89.5 


95.4 


Oct. 


99.3 


105.3 


101.5 


105.4 


37. 5 


87.6 


80.8 


87.8 


86.8 


94.8 


Nov. 


97.1 


101.8 


98.7 


102.1 


80.6 


79.4 


79.5 


81.2 


80.3 




Dec. 


101.1 


102.5 


99.3 


100.9 


78.3 


7*; 2 


74.1 


76.6 


79.1 




Average 


97.4 


102.5 


101.3 


103.2 


91.4 


84.9 


74.4 


80.3 


84.0 




B 






Index 


of Employment (1929=100) b/ 








Jan. 


93.7 


97.6 


100.9 


96.3 


97.4 


78.4 


73.6 


68.6 


74.3 


81.3 


Feb. 


96.6 


101.2 


103.4 


99.6 


98.7 


83.4 


79.3 


75.3 


82.8 


88.9 


Mar. 


95.8 


100.1 


101.8 


101.3 


95.5 


85.5 


78.6 


73.5 


85.9 


91.7 


Apr. 


90.8 


94.8 


94.8 


96.4 


90.1 


83.9 


72.4 


72.9 


85.3 


91.8 


May- 


89.1 


94.1 


92.7 


95.7 


86.6 


80.3 


66.1 


71.4 


79.0 


84.9 


June 


94.1 


99.0 


98.2 


101.8 


89.9 


80.8 


61.8 


77.1 


79.1 


83.9 


July 


92.3 


99.7 


96.4 


101.8 


87.8 


84.1 


62.3- 


84.2 


78.9 


86.1 


Aug. 


96.2 


102.6 


99.7 


104.3 


87.8 


86.8 


68.8 


85.8 


85.7 


90.7 


Sep. 


95.9 


102.2 


99.5 


104.0 


89.5 


88.0 


75.4 


87.0 


86.7 


92.4 


Oct. 


96.2 


102.0 


98.4 


102.1 


84.8 


84.9 


78.3 


85.1 


84.1 


91.9 


Nov. 


94.1 


98.6 


95.6 


98.9 


78.1 


76.9 


77.0 


78.7 


77.8 




Dec. 


98.0 


99.3 


96.2 


97.8 


75.9 


73.8 


71.8 


74.1 


76*6 




Average 


94.4 


99.3 


98.1 


100.0 


88.5 


82.2 


72.1 


77.8 


81.4 




C 




Estimated Number Employed 


(Thousands) c/ 






Jan. 


140.4 


146.3 


151.2 


144.3 


146.0 


117.5 


110.3 


102.8 


111.4 


121.8 


Feb. 


144.8 


151.7 


155.0 


149.3 


147.9 


125.0 


118.8 


112.9 


124.1 


133.2 


Mar. 


143.6 


150.0 


152.6 


151.8 


143.1 


128.1 


117.8 


110.2 


128.7 


137.4 


Apr. 


136.1 


142.1 


142.1 


144.5 


135.0 


125.7 


108.5 


109.3 


127.8 


137.6 


May 


133.5 


141.0 


138.9 


143.4 


129.8 


120.3 


99.1 


107.0 


118.4 


127.2 


June 


141.0 


148.4 


147.2 


152.6 


134.7 


121.1 


92.6 


115.5 


118.5 


125.7 


July 


138.3 


149.4 


144.5 


152.6 


131.6 


126.0 


93.4 


126.2 


118.2 


129.0 


Aug. 


144.2 


153.8 


149.4 


156.3 


131.6 


130.1 


103.1 


128.6 


128.4 


135.9 


Sep. 


143.7 


153.2 


149.1 


155.9 


134.1 


131.9 


113.0 


130.4 


129.9 


138.5 


Oct. 


144.2 


152.9 


147.5 


153.0 


127.1 


127.2 


117.3 


127.5 


126.0 


137.7 


Nov. 


141.0 


147.8 


143.3 


148.2 


117.0 


115.2 


115.4 


117.9 


116.6 




Dec. 


146.9 


148.8 


144.2 


146.6 


113.7 


110.6 


107.6 


111.1 


114.8 




Average 


141.5 


148.8 


147.0 


149.9 


132.6 


123.2 


108.1 


116.6 


121.9 





a/ Bureau of Labor Statistics index for Clothing, Men's. 

b/ Index of Employment (A) shifted to 1929 base. 

o/ Index of Employment (B) times 1929 Census figure 149,868. 

Division of Review NRA 

Industry Statistics Unit, -BJ R g /ll/55 R ev is e d E LG ll/ 3 0/ 36 

9782 



-76- 

period 1926-1935, the high point of employment came in August, 1929, 
as evidenced by the index 104.3. The low roint of employment for 
this period is reflected in the index 5] ", re ;• ■.-.■ i .ti a i -1" 
of over 40 per cent, and is found in the month of June, 1932. For 
recent years, it is notable that the average index of employment of 
77.8 for 1933 climbed to an average of 81,4 for 1934 and continued 
this gain to an average of 8S.4 for the first ten months of 1935. 
In terms of estimated employment the range for the period 1925-1935 
is from a high of approximately 156,300 in August, 1929, to a low 
of approximately 107,000 in May, 1933. The gain following the im- 
provement in employment in 1933 is shown by an average employment 
for 1933 of 116,600; for 1934, an average of 121,900; and for the 
first ten months of 1935, an average of 132,400. 



(Foot-note Cont'd) 



Garment Code. In December 1934, about 80 per cent of the employees 
included in the sample were covered by the Men's Clothing Code,' the 
greater portion of the remainder being covered by tne Cotton Gs^rw-aut 
Code." (Industry Statistics Unit, Division of Peview.) 



9782 



-77- 
A. Stability of Employment. 

The Men's Clothing Industry has two. distinct seasons, the summer 
and the winter. In the winter, clothing is produced for summer wear, 
and in the summer, for winter wear. (*) The following table shows the 
seasonality of employment within the years 1935 and 1934 and shows the 
1934 gain in employment over 1933. 

TABLE XXV.. 



IITDEX OE E EPLOYMENI a/ 
. (1933 = 100) i 



Month 



In.de:: of Employment 



1935 



1934 



January 

February 

March 

April 

May 

June 

July 

August 

September 

October 

November 

December 



90.9 


101.7 


103.2 


112.3 


101.6 


112.8 


94.8 


107.8 


87.8 


94.6 


93.7 


97.3 


104.9 


104.6 


108.0 


114.5 


110.4 


115.4 


108.2 


111.7 


99.9 


102.1 


96.4 


102.5 



Average 



100.0 



106.5 



Source: Unpublished data secured by the Bureau of Labor Statistics 

in cooperation with the Division of Research and Planning, BBA. 

a/ Reporting establishments almost completely identical with the 
Code definition of the Hen's Clothing Industry. 1934 data 
came from a much larger -proportion of the Industry than the 
1933 data. 



Attention is drawn to the fact, as shown by Table XXV that the 
high and low months of employment for 1933 and 1954 fell in the same 
respective months; namely, September and May. The range for 1933 was 
from 87.8 in May to 110.4 in September. For 1934, the range was from 
94.6 in May to 115.4 in September. It is, of course, significant to 
note that employment for 2934 averaged 6.5 points ahead of 1933. 

As further evidence of wide fluctuation in employment in this 
Industry, attention is directed to Table XXVI. It is seen that the 
range of employment between the high and low months of a year may 
fluctuate oy 10 to 20 thousand employees. This table likewise pic- 
tures the sharp decline from the average employment of 158,173 during 



(*) ' Evidence of the smoothing out of the extremes in production peaks 



in the industry was 



pages 



:ou: 



) 



nd by Mr. A.A. Eisner (sec this Chapter - 



9732 



-78- 

the year 1923 to 119,253 in 1933 and the subsequent increase in em- 
ployment to an average of 132,100 for eleven months of 1935. 

The Monthly Labor Review of January, 1929, published by the 
U. S. Department of Labor, presented the results of a study of Sta- 
bility of Employment in the Men's Clothing Industry. This Study 
covered for the years 1923 to October, 1928, sixty-four men's clothing 
establishments in various lines of the Industry, disregarding occu- 
pational differences and leaving out special products such as caps and 
overalls. The standard of measure of stability used was that "If a 
particular shop had a monthly average of 90 employees and a maximum 
number in any one month of 100, then the stability of employment may be 
fairly said to bo 90 per cent." 

TABLE XXVI 

MELT'S CLOTHING INDUSTRY 

Ilumber of Wage Earners, High and Low Months and Yearly Average, 1923-35 



Year 






High 




Low 


Average 




Month 


lumber 


Month 


ITumber 


ITumb er 


1923 




March 


168,771 


November 


149,259 


158,173 


1925 




February 


147,596 


May 


131,181 


141,511 


1927 




February 


153,550 


May 


139,086 


146,099 


1929 




S eat cmb er 


155,845 


December 


144,496 


149,868 


1931 




Seat ember 


130,883 


December 


110,235 


121,964 


1933 


a/ 


September 


131, 648 &/ 


December 


112,345b/ 


119,253 


1934 


si 


September 


129,900 


January 


111,400 


121,900 


1935 


c/ 


September 


138,500 


January 


121,800 


133,1001/ 



Source: Census of Manufactures, 1929, Vol. II, p. 356; 1931, p. 312; 
1933, Wearing Apparel, pp. 5 and 8, and unpublished Census 
data. .Figures are for Census classification "Clothing (Ex- 
cept Worl; Clothing), Men's, Youths', and Boys', Not Elsewhere 
Classified." Data are for regular factories and contract 
shops. They do not include establishments with annual pro- 
duction valued at less than $5,000. 



a/ Figures for 1933 are not strictly comparable with those for 
previous years because of changes in Census classifications. 
b_/ Quarterly figures arc used, since monthly digures are not 

available. 
cj Estimates computed by multiplying Bureau of Labor Statistics 
Index of Employment shifted to 1929 base by 1929 Census 
figure (149,868). 
d/ 11-months' Average. Figures for December, 1935, are not yet 
available. 

Prepared by 

Industry Statistics Unit 
Statistics Section 
Division of Review, LIRA. 



-79- 

The results of the Department of Labor Study arc summarized as 
follows: 

"1. Judging ~oy the averages, stability of employment in the 
lien's Clothing Industry is bad and conditions have shown no improve- 
ment in the sic years covered by the Study. Thus, the average sta-? 
bility for the plants reporting was only 37.9 per cent in 1923 and in 
no subsequent year was the percentage over that high. Also,***this 
continuous low average over the six-year period was the resultant 
of an increasing number of plants with improving records and a cor- 
responding increase in the number of plants with records which were 
growing worse. Thus, in 1923, the per cent of plants with employment 
stability rates of 95 per cent or over, was only 10.9 per cent, as 
against 28.1 and 15.6 per cent in 1927 and 1928, respectively. On 
the other hand, the number of plants with stability rates of less than 
80 per cent also increased from 15.6 per cent in 1923 to 21.9 in 1927 
and 23.4 in 1928. 

"2. While the general conditions of employment stability in 
the Industry were bad and did not improve over the six-year period, a 
number of establishments nevertheless had excellent records. Thus,, 
establishments 4 and 6 (Table attached to report) had an average of 
more than 96 per cent of full time employment for each of the six 
years, and several establishments show averages of more than 98 per 
cent in individual years." Hote ; Plants 4 and 6 above referred to 
were in New York and Boston, respectively. 

V. WAC-BS AID HOURS 

A. Average Wages ~oer Hour . 

Wages in the Lien's Clothing Industry averaged 75.0 cents an hour 
during the year 1926, according to the Bureau of Labor Statistics 
index (see Table XXYII-A). This average declined precipitately to a 
low point of 50.6 cents an hour for 1932, but rallied considerably 
during the Code- oeriod to show an average of 57.7 cents for the year 
1934. This improvement continued through the first ten months of 1935, 
as indicated by an average of 59.5 cents. 

3. Average Weekly Wag es. 

Average weekly wages for the period 1926-1935 (see Table XXVII-B) 
followed a course comparable to that for average hourly wages. The 
reltively high average of $24,15 per week in 1927 declined steadily and 
sharply to ■ L r weekly average of $13.70 for the year 1932. The 1932 
average weekly wage was improved upon somewhat in 1933, as shown by the 
average of $14.14. The sharpest advance took place during the beginning 
of the Code period in the last quarter of 1933. The year 1934 dis- 
played a still further average improvement to $16.26 per week and was 
bettered by an average weekly wage of $18.32 for the first ten months 
of 1935. 

C. Payrolls . 

Payrolls in the hen's Clothing Industry according to the Bureau 

9782 



-30- 

of Labor Statistics index (1929 base) declined in every year from 1929 
until a low of 44.1 was reached in 1932. » Subsequent to 1932, ;the 
improvement was substantial and consistent, as evidenced by the index 
49.3 and 60.4 for 1933 and 1934 respectively, and the average index 
of 74.8 for the first ten months of 1935. This represented an average 
monthly payroll of $3,457,000 for 1929, which declined to a monthly 
average of $1,525,000 in 1932 but subsequently improved to monthly 
averages of $1,705,000 and $2,087,000 respectively for 1933 and 1934 
and a monthly average of $2,585,000 for the first ten months of 1935. 

D • Dist ribution of Payrolls by States . 

The distribution of payrolls and wage earners in the Hen's 
Clothing Industry by principal States is shown in Table XXIX. It is 
readily seen that seven States account for practically the entire em- 
ployment and payrolls in the Industry, Hew York State leads by 
accounting for around 30 per cent of total employees (and a slightly 
higher percentage of total payrolls), and is followed in order by 
Pennsylvania, Illinois, Ohio, Maryland, New Jersey and Massachusetts. 

E. Distribution of Employment, I.Ian Hours, and 
Earnings, by Market Areag c 

A distribution of employment, man hours, and earnings is shown 
by market areas for the last six months of 1934 in Tabic XXX. The 
figures in this Table were obtained from the records of the Men's 
Clothing Code Authority in cooperation with the U. S. Bureau of Labor 
Statistics and doubtless are the most complete available for any full 
season of the Industry. This Table shows a concentration of 69 per 
cent of the Industry's employees in the. ten important market areas. 
Of the ten most important market areas, Hew York leads with 22.4 per 
cent of the total .of the Industry's employees. The remaining nine 
areas in order of number of employees are Chicago, Philadelphia, 
Rochester, Baltimore, Cincinnati, Cleveland, .Boston, St. Louis, and 
Buffalo. Of the 31 per cent of the employees not found in the ten 
large market areas, it is interesting to note that around 18 Per cent 
are found in cities below 50,000 in population. 

Column three of Table XXX shows average hourly earnings by market 
areas. The Industry's average is 66.2 cents per hour. Of the large 
areas, Chicago leads with an average of 78 cents per hour, and the 
range downward is to 56.2 cents paid in Baltimore. The average for the 
ten large areas is 71.2 cents. The lowest average hourly earnings rate 
in the Industry, of 52.7 cents per hour, is found in the cities under 
50,000 in population. 

The market area of Cleveland leads the ten large areas in average 
weekly man hours for the last half of 1934, with an average of 30. 
This was approximately 5 hours better than the average for the ten 
large areas, which was 25.7. Rochester, with 22.3 hours, is lowest 
of the large areas. Cleveland, leading in weekly man hours, also leads 

(*) See Table XXVI I I-B 



9782 



-si- 
table ssyii 

UEIT'.S CL02HIHG INDUSTRY 
FACTORY WAGES 



A 



1926. 1927 



Average Hourly TTagcs (Cents) a/ 
1928 1929 1950 1931 1932 ~ 1933 



Jan. 

Feb. 

Mar. 

Apr. 

May 

June 

July 

Aug. 

Sep. 

Oct. 

i T OV. 

Dec. 
Average 



(75.0 



(73.1 



(70.1 



(50.6 



1934 


1'935 




60.1 


54.3 


61.4 


52.7 


62.1 


52.3 


62.9 


53,0 


58.3 


53. 5 


59.0 


56.2 


57.8 


68.6 


58.1 


61.7 


58.1 


60-. 7 


57.4 


60.8 




61.7 




57.7* 





Average Weekly Wages (Dollars) b/ 



Jan. 


24.54 


24.33 


24.35 


23.16 


22.24 


18.06 


1^» 7o 


12.58 


15.50 


16.04 


Feb. 


24.94 


24.97 


24.5? 


24.38 


22.31 


20.05 


16.32 


13.96 


17.01 


18.53 


Liar. 


24.69 


24-90 


iz,*D » y & 


24.86 


21.70 


20.54 


16.14 


12.69 


17. 61 


20.39 


Aor . 


22.73 


22. 38 


21.13 


21.42 


19.19 


18.50 


13.23 


11.71 


16. 38 


20.45 


May 


22.19 


22.66 


21.89 


22.41 


13.45 


16.69 


12.16 


11.65 


15.51 


16.83 


June 


24.05 


24.82 


23.36 


23.57 


20.39 


18.34 


11.42 


12.72 


15.73 


17.06 


July 


24.12 


25. 4C 


23.97 


23.12 


21.02 


19.55 


11.27 


14.57 


15.76 


17.00 


Aug. 


24.94 


25.30 


23.89 


23.72 


21.28 


20.16 


13.71 


16.10 


17.51 


18.61 


Sep. 


23.66 


25.01 


23.50 


22.84 


20.36 


17.39 


15.07 


17.11 


16.51 


19.71 


Oct. 


23.46 


24.08 


22.87 


21.98 


13.59 


17.28 


14.87 


17.21 


16.90 


18.56 


Nov. 


22.41 


22.14 


21.78 


20.73 


16.97 


14.98 


13.04 


15.39 


15.19 




Dec. 


23.93 


23.73 


23.61 


21.83 


17.49 


15.. 53 


11.41 


13.96 


15.46 




Average 


23.81 


24.15 


23.27 


22.84 


20.00 


18.13 


15.70 


14.14 


16.26 





a/ Bureau of Labor Statistics scries for "Clothing, Men's." Prior to 1934, 
. ■ :au of Labor Stations Bulletins 435, 503- 557 and 594. 

b/ Bureau of Labor Statistics scries for "Clothing, Men's." 

(*) 11-month average. 

Division of Review 1IRA 
Industry Statistics Unit 



9782 



-82- 



TABLE XXVIII 
MEET'S CLOTEIFG INDUSTRY 
FACTORY PAYROLLS 



A 






Index c 


if Payrolls (19; 


23-25=100) a/ 













1926 
96.8 


1927 
99.9 


1928 
101.7 


1929 


1930 


1931 


1932 


1933 


1934 


1935 




Jan. 


94.0 


90.4 


59.9 


49.1 


35.4 


43.8 


57.0 




Feb. 


101.2 


106.6 


105.7 


102.5 


91.3 


69.7 


54.1 


44,3 


60.6 


71.8 




Mar. 


99.6 


103.9 


101.2 


105.8 


86.6 


73.5 


53.6 


40.4 


65.9 


82.0 




Apr. 


87.0 


88.2 


83.2 


87.1 


73.8 


64.8 


40.9 


36.8 


61.4 


32.5 




May- 


83.6 


88.8 


84.5 


89.8 


67.5 


56.6 


54.2 


35.2 


53.3 


64.4 




June 


94.3 


101.0 


96.9 


100.8 


76.1 


62.1 


29.3 


41.8 


54.6 


63.7 




July 


94.1 


104.0 


95.8 


98.2 


77.3 


69.2 


29.4 


51.3 


54.5 


65.6 




Aug. 


101.1 


106.6 


99.5 


103.4 


79.2 


72.4 


40.4 


58.7 


65.5 


74.3 




S ep, 


96.0 


104.4 


97.7 


100.2 


76.2 


6G.3 


48.6 


63.9 


62.2 


80.4 




Oct. 


95.8 


101.2 


95.5 


93.0 


6 ; 3. 3 


61.4 


49.6 


62.6 


62.6 


74.8 




y.ov. 


89.3 


92.0 


87.7 


85.7 


55.2 


48.6 


43.0 


52.4 


52.1 






Dec. 


99.2 


97.9 


96.2 


89.4 


55.4 


48.5 


34.8 


44.4 


52.6 






Average 


94.8 


99.5 


95.5- 


95.8 


74.7 


62.8 


42.3 


47.3 


57.8 






B 






Index 


of Payrolls (1929=100") 


V 










Jan. 


101.0 


104.3 


106.2 


93.1 


94.4 


62.5 


51.2 


36.9 


50.9 


59.5 




Feb. 


105.6 


111.3 


110.3 


107.0 


95.3 


72.7 


56.5 


46.2 


63.2 


74.9 




Mar . 


104.0 


108.5 


105.6 


110.4 


90.4 


76.7 


55.9 


42.2 


68.8 


35.6 




Apr. 


90.8 


92.1 


86.8 


90.9 


77.0 


67.6 


42.7 


38.4 


64.1 


86.1 




May 


87.3 


92.7 


88.2 


93.7 


70.5 


59.1 


35.7 


36.7 


55.6 


67.2 




June 


98.4 


105.4 


101.1 


105.2 


79.4 


64.8 


30.6 


43.6 


57.0 


66.5 




July 


98.2 


108.6 


100.0 


102. £ 


80.7 


72.2 


30.7 


53.5 


56.9 


68.5 




Aug. 


105.5 


111.3 


103.9 


107.9 


32.7 


75.6 


42.2 


61.3 


68.5 


77.5 




Sep. 


100.2 


109.0 


102.0 


104.6 


79.5 


69.2 


50.7 


66. '7 


64.9 


83.9 




Oct. 


100. 


105.6 


99.7 


97.1 


69.2 


64.1 


51. '8 


65.3 


65.3 


78.1 




JMOV. 


93.2 


96.0 


91.5 


89.5 


58.7 


50.7 


44.9 


54.7 


54.4 






Dec. 


103.5 


102.2 


100.4 


93.3 


57.8 


50.6 


36.3 


46.3 


54.9 






Average 


99.0 


103.9 


99.6 


100.0 


78.0 


65.5 


44.1 


49.3 


60.4 






C 




Estimated To 


tal Payroll (Thousands 


of Do] 


.lars') 
1276 


5/_ 

1760 


2057 




Jan. 


3492 


3606 


3671 


3391 


3262 


2161 


1770 




Feb. 


3651 


3848 


3813 


3699 


3295 


2513 


1953 


159V 


2185 


2589 




Mar". 


3595 


3751 


3651 


3817 


3125 


2652 


1933 


1459 


2378 


2959 




Apr. 


3139 


3184 


3001 


3142 


2662 


2337 


1476 


1328 


2216 


2977 




May 


3018 


3205 


3049 


3239 


2437 


2043 


1234 


1269 


1922 


2323 




June 


3402 


3644 


3495 


3637 


2745 


2240 


1058 


1507 


1971 


2299 




- July 


3395 


3754 


3457 


3544 


2790" ' 


249 £ 


1061 


1850 


1967 


2568 




Aug. 


3647 


3848 


3592 


3730 


2359 


2514 


1459 


2119 


2368 


2679 




Sep. 


3464 


3768 


3526 


3616 


2748 


2392 


1753 


2306 


2244 


2901 




Oct. 


3457 


3651 


3447 


3357 


2392 


2216 


1791 


2257 


2257 


2700 




Nov. 


3222 


3319 


3163 


3,094 


2029 


1753 


1552 


1891 


18S1 






Dec. 


3578 


3533 


3471 


3225 


1998 


1749 


1255 


1601 


1898 






Average 


3423 


3592 


3443 


3457 


2697 


2264 


1525 


1705 


2087 







a/ Bureau of Labor Statistics Index for "Clothing, Men's". 

b/ Index of Payrolls (a) shifted to 1929 base. 

c/ Index of Payrolls (B) times 1929 Census figure $3,457,092. 

Division of Review I~RA 
Industry Statistics Unit 



9782 



£31 



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-35- 



with the highest average weekly earnings, which were $-21.15. The lor in 
average weekly earnings was shorn by Baltimore, with $14.72, against 
and Industry average of $17.01 and en average for the large market areas 
of $18.30. 

Table XXXI, "based on Bureau of Labor Statistics data, summarizes 
for the entire Inc I ustr; r for the -'leriod 1C26-1935 average hours worked 
per reek and estimated total man hours per neek. Average h-urs worked 
per week declined steadily from a high of 41.0 in 1926 to a low of 
28.2 in 1254.. The average of 30.4 for the first ten months of 1935 • 
reflects a ;ain of 2.2 hours tier week over the low noint of 1934. Ero- 
cept for an increase in number of man hours worked in 1928 over 1925, 
the decline in man hours from l^S to 1934 closely parallels the trend 
evidenced by average hours worked ner reek. The very substantial in- 
crease to the average of 4,324,000 man hours worked for the first ten- 
months of 1935 over the 3,464, 00C man hour average for eleven months 
of 1934 is net able. 

F . T7age larhers Classified According to Average 

Hourly v <8 ^e Pake to Al l Snnloyees in Estab- 
lishments, .for the Industry,, ,aq.d .for Market -Areas . 

The Men's Clothing Code Authority made a wage analysis of some 
1,471 establishments in the Industry, emoloying 99,107 workers. (*) 
The establishments included (a) all of the larger units; (b) over 650 
smaller manufacturers, ranging from the smallest establishments, em- 
ploying some 300 workers, and averaging less th- n 40 workers ner es- 
tablishment; (c) over 700 contractors employing about one-third of the 
total. This analysis is -presented in Table XXXII, entitled "Frequency 
Table Showing Distribution of 1,471 Establishments Classified According 
to Average hourly *,7age Paid to All Employees in Establishments." 

It was found in this analysis of 1,471 establishments that more 
than one-half of the workers " r ere emoloyed in establishments where the 
average —age was 65 cents or more ner hour, and over 60 ner cent of the 
workers were emoloyed in establishments "here the average "as over 6C 
cents per hour. On the other hand, 6.5 ner cent of the workers rere 
emoloyed in establishments where the average was between 40 cents and 45 
cents per hour; and 7.8 ner cent of the workers were emoloyed in establish- 
ments where the average was between 45 cents and 50 cents per hour. 

The averages for these establishments included rages naid to cutters, 
who had a minimum provided for in the Code of $1.00 ner hour, and wages 
naid to off-nresserr, whose ninimum was fixed at 75 cents per hour, 
so that it appears the average for other manufacturing emnloyees in the 
low-wage establishments was close to the Code minimum of 40 cents ner 
hour . 

In Table XXXIII, is presented data similar to that in Table XXXII, 
classified for the ten orincipal clothing markets. Here again, in 

( * ) Statement Submitted in Suroort of the Amendments to the i^en's 

Clothing Code Proposed by the ; anager.ent kenbers of the Code Authority .- 
(Men's Clothing Code Piles.) 

9782 



-86- 



MEN'S CLOTHING INDUSTRY 
FACTORY HOURS 



Average Hours Worked Per Week a/ 
1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 



Jan. 

Feb. 

Mar . 

Apr. 

May 

June 

July 

Aug. 

Seio. 

Oct. 

Nov. 

Dec. 

Average 



(41.0 



(40.6 



(37.8 



(.37.3 





26.5 


30.4 


30.2 


32.2 


79 Q 


30.5 


32.7 


29.2 


28.3 


29.3 


28.6 


28.3 


29.1 


25.9 


31.5 


26.7 


33.2 


27.4 


31.4 


24.8 




25.1 




28.2* 


30. 4 : 



B 



Estimated Total Man Hours Per Week b/ 
(Thousands) 



Jan. 




Feb. 




Mar . 




Apr. 




May 




June 


( 


July 


(58( 


Aug. 


( 


Sep. 




Oct. 




Nov. 




Dec. 




Average 





(5968 



(5012 



(4032 



3775 

4144 

3898 . 

3457 

3472 

3345 

3326 

3468 

3452 

2892 

2881 

3464* 



3228 
4C23 
4520 
4500 
3600 
3595 
3754 
4281 
4598 
4324 



4042 



a/ Bureau of Labor Statistics series for "Clothing, Men's." Prior to 
1934, Bureau of Labor Statistics Bulletins 435, 503, 557, and 594. 

b/ Estimated Number Employed (Table XXIV - C) times Average Hours Worked 
per week, (Table XXXI - A). 

* 11-month average. 

** 10-month average. 



Division of Review NRA 
Industry Statistics Unit 



9782 



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-90- 

greater or lesser degree, the same disparity in wage conditions is shown. 

G. Average Annual Wages in Ken 's Clo thi ng Compared 
with All Other Manufacturing Industries . 

An analysis of Table XXXIV, reveals that the average annual wage 
in the Men's Clothing Industry has shown a greater decline since 1923 
than has the average annual wage in all other manufacturing industries. 
In 1923 the average annual wage of $1,310 in the Men's Clothing Industry 
was 4.5 per cent higher than that for all other manufacturing industries; 
namely, $1,253. This supremacy was lost by 1925 and by 1933 it is found 
that the average annual wage in Men's Clothing was only 88.7 per cent of 
that in all other manufacturing Industries. 

H. Comparison of Change s in Average -Weekly Wages 
and in Cost of Living. 

A comparison of changes in average weekly wages in the Men's Cloth- 
ing Industry with changes "in the cost of living (see Table XXXV, reveals 
that real wages in the Industry suffered materially in the change from 
1923 to 1924 and continued to lose ground slowly until a considerable 
disparity is witnessed daring the year 1932, when dollar wages declined 
from 100 in 1929 to 60 in 1932, while at the same time the cost of living 
declined from 100 only to 74.9. The year 1934, however, shows a much im- 
proved situation for the Men's Clothing wage earners, as at this time 
there existed a difference of only around 6 points between the average 
weekly wage index and the index of the cost of living as against a differ- 
ence of 14.9 points in 1932. 

VI. PRICES: RAW MATERIALS AND FINISHED PRODUCTS 

It is not possible,, from records available, to make an accurate 
survey of the changes and interrelationships in prices (raw materials and 
finished products) at wholesale and retail in the Men's Clothing Industry. 
Nevertheless, some realization of the price trends in the Industry dur- 
ing recent years may be obtained from a survey of certain Bureau of 
Labor Statistics indexes and records of actual -prices. 

The movement in the price of raw materials is pictured in Table 
XXXVI, using as an index the wholesale price per yard of 16 ounce serge 
quoted at a single plant or factory considered by B.L.S. to be represen- 
tative of the whole country. It is observed that the price of this 16 
ounce serge in the 1926-1935 period declined steadily from the 1926 
yearly average of $3.76 per yard to a low average of $2.27 for the year 
1932. This represents a fall in price of approximately 40 per cent. The 
averages for the years 1933 and 1934 show an improvement over the 1932 
low as evidenced by the prices per yard of $2.59 and $2.89, respectively. 

The increase from 1932 to 1934 amounted to about 27 per cent. The 
first six months of 1935 show an average of $2.72 per yard, which re- 
presents a slight decline from the $2.89 average ofL934. The advance in 
price from the low point average for 1932 to the T935 six months' average 
approximated 20 per cent. 



9782 



-91- 



TABL*; X3CCV 
LAST'S CLOTJiIIJG INDUSTRY 



Comparison of Changes in Average Weekly Wages in the Men's Clothing 
Industry and in tne Cost of Living, 1923-1034 



Average 
Weekly 
Wage s 
(Dollars^ 



Index of 
Weekly 
Wage s 
(1 929 z ion ) 



Index of 
Cost of 
Living b/ 
(19 29 Z. 100) 



1923 
1924 
•1925 
1926 
1927 
1928 
1929 
1930 
1931 
1932 
1933 
1934 



24. 97a/ 

24.15a/ 

24. 17a/ 

23,81 

24.15 

23.' 27 

22.84 

20.00 

18.13 

13.70 

14.14 

16.26 



109.3 

105.7 

105.8 

104.2 

105.7 

101.9 

100,0 

87.6 

79.4 

60.0 

61.9 

71.2 



99.4 

100.9 

103.7 

103.9 

101.5 

100.3 

100.0 

95.6 

84.9 

74.9 

72.1 

77.3 



SOURCE: Bureau of Labor Statistics, National Industrial Conference 
Board, National Recovery Administration. 

a/ Derived from B.L.S. employment and payroll indexes and ad- 
justed to B.L.S, current published weekly wages. 

b/ National Industrial Conference Board index of cost of liv- 
ing as weighted and shifted to a 1929 base by the Division 
of Research and Planning, 1T.R.A. 



Frepared by 

Industry Statistics Unit 
Statistics Section 
Division of Review, H.R.A. 



9782 



-92- 

TABLE XXXVI 
MEN'S CLOTHING INDUSTRY 
Wholesale Prices - Raw Materials a/ 









Serge 


, 16 ounce - 


Per Yard 


, Mill 


(Dollars) 








1926 


1927 


1928 


1929 


1930 


1931 


1932 


1933 


1934 


193fe 


Jan. 


4. OS 


3.63 


3.69 


3.61 


3.45 


2.96 


2.66 


2.10 


3.10 


2.67 


Feb. 


3.87 


3.65 


3.71 


3.61 


3.35 


2.96 


2.66 


2.10 


3.10 


2.67 


Mar. 


3.87 


3.65 


3.71 


3.61 


3.35 


2.92 


2.66 


2.10 


3.06 


2.71 


Apr. 


3.87 


3.65 


3.71 


3.61 


3.35 


2.78 


2.33 


2.11 


2.93 


2.72 


May 


3.87 


3.65 


3.71 


3.61 


3.35 


2.78 


2.33 


2.45 


2.90 


2.74 


June 


3.87 


3.65 


3.71 


3.61 


o» oO 


2.78 


2.05 


2.55 


2.90 


2.82 


July 


3.66 


3.65 


3.67 


3.60 


3.20 


2.78 


2.05 


2.59 


2.90 




Aug. 


' 3.62 


3.65 


3.61 


3.49 


2.96 


2.69 


2.06 


2.86 


2.90 




Sept, 


3.62 


3.65 


3.61 


3.49 


2.96 


2.66 


2.10 


2.97 


2.90 




Oct. 


3.62 


3.65 


3.61 


3.49 


2.96 


2.66 


2.10 


3.10 


2.62 




Nov. 


3.62 


3.65 


3.61 


3.49 


2.96 


2.66 


2.10 


3.10 


2.65 




Dec. 


3.62 


3.68 


3.61 


3.49 


2c 'a*6 


2.66 


2.10 


3.10 


2.67 




Average 


3.76 


3.65 


3. 66 


3.56 


3.18 


2.77 


2.27 


2.59 


2.89 





a/ Bureau of Labor Statistics. Series represents prices quoted at a 
single factory or plant considered "by B.L.S. to be representative 
of the whole country. 



Division of Review NRA 
Industry Statistics Unit 



9781 



The fluctuations in the index of composite wholesale prices of fin- 
ished goods in the Men's Clothing Industry (see Table XXXVII, follow a 
course closely approximating the changes in the wholesale price of raw 
material above outlined. The decline i n the wholesale p rice of finished 
products from the high point of 1926 to the low point of 1932 approximat- 
ed 36 per cent as against the decline in raw materials of about 40 per 
cent. The increase in the wholesale price of finished products from 1932 
through 1934 (yearly averages) amounted to around 32 per cent as against 
the increase in raw materials of arount 27 per cent. The advance in the 
wholesale price of finished goods from the low yearly average of 1932 to 
the ten months' average for 1935 amounted to 25 per cent as against an 
advance in raw' materials for. the same period approximating 20 per cent. 

The Fairchild index of retail prices for "lien's Apparel," found ' 
in Table XXXVIII, is based upon the prices for a great variety of garments, 
including hosiery, underwear, shirts, hats, caps, and overalls, and hence 
is not. directly comparable with the index of wholesale prices for finished 
products in the lien's Clothing Industry above ciscussed. It may.be worth 
noting, however, and it is not unexpected; to find as revealed by the' 
Fairchild index that- retail prices in nen's clothing are at their low 
point in 1933" as against the low point for wholesale prices found in the 
preceding year. It is likewise of interest that the fluctuation in re- 
tail prices were not as extreme, neither falling nor advancing to the 
degree and as rapidly as did wholesale prices of raw materials and finish- 
ed products. 

VII. EXPORTS A1ID IMPORTS 

In terms of Industry totals, the quantity of men's clothing exported 
and imported is of little consequence. Table XXXIX, shows that the aver- 
age number of men's and boys' overcoats, suits, and pants exported per 
year for the years 1926-1930 is 148, 0(T). While direct comparisons are not 
possible, this amount would appear to represent from 1 to 2 per cent of 
the Industry's total production. During the year 1931, garments in the 
amount of 54,000 pieces were exported, representing less than 1 per cent 
of the Industry total for that year. No subsequent year through 1934 had 
equaled the 1931 year in export volume. The export volume has declined 
steadily from 88,000 pieces in 1930, with the exception of 1933, to a 
volume of only 18,000 pieces in 1934. Value of exports declined compar- 
ably from $440,000 in 1930 to $85,000 in 1934. The 1934 value of exports 
represented less than 1 per cent of the total value of the Industry's 
products. 

Import f ir-mres for men's clothing are available only in combina- 
tion with "Clotning and .Articles of Wearing Apparel, of Wool, (Except Wool- 
Pelt Hats and Hat Bodies) , Hot Knit or Crocheted," (See Table XL, and 
hence are not directly comparable with exports or Industry totals. With 
respect to the category above mentioned, for the years 1929 through nine 
months of 1935, it is observed that 1929 is the peah year for imports, with 
574,948 lbs. and that 1932 shows the lowest importation, with 172,134 lbs. 
Imports in pounds increased considerably from the low point of 1932 to a 
total of 279,937 lbs. for the first nine months of 1935. The 1929 importa- 
tions were valued at $2,548,204 and declined to 3432,883 in 1932, but 
increased from this level by approximately ion per cent to imports for the 
first nine months of 1935, valued at $875,r71. 

9782 



-94- 

table xr:vn 

MEN'S CLOTHING IEDUSTRY 
WHOLESALE PRICES 



A 




Index of C 


lomposite 


Whole: 


sale Pr 


ices (1929=100) a/ 






1926 


1927 


1928 


1929 


1930 


1931 


1932 1933 


1934 


1935 


Jan. 


113.7 


112.2 


108.6 


101.9 


98.5 


87.1 


76.3 69.8 


104.7 


87.6 


Feb. 


113.7 


112.2 


108.6 


101.9 


98.5 


87.1 


76.1 69.8 


104.0 


87.8 


Mar. 


113.7 


111.7 


104.7 


101.9 


98.5 


86.1 


74.2 69.8 


104.0 


87.8 


Apr.' 


113.7 


111.7 


104.7 


99„5 


97.9 


36.1 


73,4 71.2 


100.9 


87.8 


May- 


113.7 


111.7 


104.7 


. 99.5 


97.9 


86.1 


71.6 72.9 


95.3 


87.8 


June 


113.7 


111.7 


104.7 


99.5 


97.4 


85.3 


70.4 75.9 


95.2 


92.5 


July 


113.7 


111.7 


104,7 


99.5 


97.4 


85.3 


69.3 78.8 


95.8 


92.5 


Aug. 


113.7 


111.7 


104.7 


99,5 


97.4 


85.3 


69.3 84.7 


88.4 


92.5 


Sep. 


112.9 


111.1 


103.4 


99.5 


94.3 


85.3 


70.1 93.7 


88.4 


92.5 


Oct. 


112.9 


109.3 


' 102.2 


99,2 


93.6 


82.2 


71,0 101.7 


87.7 


92.8 


Nov. 


112.9 


109.3 


102.2 


99.2 


93.2 


31,8 


71.0 105.2 


86.9 




Dec. 


112.2 


108.6 


101.9 


98.8 


93,2 


78.8 


70..8 105.2 


86.9 




Average 


113.3 


111.1 


104.6 


100.0 


96.5 


84.7 


72.0 83.2 


94.7 






B 


11 


;ems and 


. Weight 


,s for Index of 


Men' s 


Clothing Price 


s b/ 








Item 








Weight 










Overcoats, Mer 


l 1 s and Youths' 




.09 










Suits , 


Boys' , 


4-piece 






.05 










Suits, 


Men' s, 


3-piece 






.19 










Suit s , 


Men' s, 


4-piece 






.19 






- 




Suits, 


Youths' 


, 4-piece 




.25 










Topcoat 


s 








.09 










Trousers, Boys 


>' knee 






.04 










Trousers, Men' 


s dress 






.10 








1.00 







Note: The composite index of wholesale prices was computed by MA from Bu- 
reau of Labor Statistics price quotations for eight Men's Clothing 
items. In combining these price quotations weights based upon the 
quantity produced as shown in the 1931 Census of Manufactures were 
used. Quotations on overcoats are factory prices. All other quo- 
tations are New York prices except men's three-piece suits and top- 
coats which are Chicago prices. The 3.L.S. price series and their 
respective weights are shown in Table B. 

a/ Composite of eight Bureau of Labor Statistics indexes on 1929 base 
weighted as shown in Table B. 

b/ Weights are based upon quantities produced as shown in 1931 Census 
of Manufactures. 

Division of Review NBA 
Industry Statistics Unit 

9782 



Average 



-95- 



Lffll'S CLOTHIJIG IKS - > SY 
&STAIL PPJOES 



Index of Retail Prices (Deo. 1930rlOO) a/ 

1926 1927 1928 1928 1930 1931 1932 1933 1934 1935 



Jan. 

Feb. 

Mar. 

Apr. 

May 

June 

July 

Aug. 

Sep. 

Oct. 

Nov. 

Dec. 100.0 



93.4 


33.3 


72.4 


36.5 


87.4 


97.5 


31.7 


71.6 


88.4 


87;4 


97.6 


80.9 


71.2 


38.9 


87.3 


97.0 


30 . 2 


70. 7 


87.9 


87.4 


3 O* i^' 


79.4 


71.0 


88.1 


37.3 


94.4 


77.2 


71.3 


37.7 


87.2 


93.2 


75.8 


75.1 


38.3 


87.1 


92.0 


74.7 


80.4 


37.7 


87.1 


90.6 


74.6 


82.9 


37.7 


87.2 


88.8 


74.5 


85.6 


37.7 




87.6 


73.9 


86.2 


37.3 




,0 86.1 


73.0 


86.2 


87.4 




93.2 


77.4 


77.1 


37.3 





a/ Fairchil&'s Index for "lien's Apparel," taken from Survey of Current 
Business. Prices are as of the 1st of the following month. 



Division of Review SEA 
Industry Statistics Unit 



9782 



-96- 



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-97- 

Of the countries selling clothing end articles of wearing aoparel 
to the United States, the United Kingdom accounts for the greater por- 
tion in terras of "both quantity and value, ranging from 63 Der cent to 
86 per cent of the total iraoorts. 

VIII. MIGRATION IN THE ME' T, S CLOTHING INDUSTRY 

0n° of th° most striking phas°s of the economic development of 
the Men's Clothirg Industry during the reri^d 1923-1929 was the movement 
of the Industry out of the major manufacturing centers, into smaller 
cities and country districts. In support of this observation attention 
is directed to the following statistics which are "based on United States 
Census of Manufactures data. (S*= Tahles XLI, 30,11, SLIII, XLIV, and 
3CLV. 

: Establishments in the fiv» major manufacturing cities declined 
from 3,047 in 1923 to 2,54? in 1929, or ahout 16 tier cent; while the 
establishments outside these centers increased "by 100 from 1,560 in 
1923, or ahout 6 x>er cent. 

The wage earners in the five major manufacturing centers "between 
1923 and 1S29 declined from 97,086 to 77,841, or ahout 20 per cent; where- 
as the wage earners outside the five manufacturing centers increased from 
97,754 to 110,228, or ahout 13 per cent. 

Wages uaid in the five major manufacturing centers declined from 
$145,356,000 in 1923 to $108,450,000 in 1929, or ahout 25 per cent; 
whereas the wages naid in the Ri Qri s outside the five major manufacturing 
cities increased from $90,131,000 to 397,956,000, or ahout 9 per cent. 

Value of uroduct for the five major manufacturing citi°s declined 
from $774,195,000 in 1923 to ->f 03 : 299, 000 in 1920, cr ahout 21 r>er 
cent; whereas the value of nroduet of the areas outside the five major 
manufacturing cities increased from $4t04, 520,000 to $431,256,000, or 
ahout 7 p°r cent. 

A similar situation prevailed with resuect to cost of materials. 
The five major manufacturing cities declined, in cost of materials from 
$345,124,000 in 1925 to 3293,454,000 in 1929 or ahout 15 r)er cent; where- 
as the areas outside the five major manufacturing cities advanced from 
$212,347,000 in 1925 to $230,695,000 in 1929, or ahout 9 -oer cent. 

IX. RATIO OF LABOR COST TO VALUE OF PRODUCT 

Tahle XXIII, indicates for the years 1929, 1931, 1933, and 1934, 
the ratio of lahor cost to the total value of the Industry's product. 
It is ohserved that the ratio of lahor cost to total value of product 
increased consistently from 1909 through 1934 and that a sharo increase 
is registered "between the years 1933 and 1934. The ratio increased from 
19.9 for 1929 to 21.4 for 1933 and Eh^n moved sharply to 25.7 for the 
year 1934. 



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-100- 



TA3LE XIII 



MEN'S CLOTHING- INDUSTRY 

Wage Earners for tlie United States, the Vive Major Cities and 

Outside the Eive Major Cities, by Census Years 1S23 - 1929 



United States ITive Major Cities a/ Out si tie Pive Major Cities 

Per Cent of Per Cent of 

United States United States 

Number Number Total Mur.ber Total 



1923 


19^,320 


97,066 




'+9.8 


97,754 




50.2 


1925 


17^,332 


80,588 




46.2 


93,7^1 




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1927 


186,711 


82,5^1 




44.2 


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1929 


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77.SU1 




4i.4 


110,228 




58.6 


SOURCE: 


Census of Manuf 


clotures. 


1929 


, Vol. 


II, 'OV» 35S 


and 


368; 



Vol. Ill, pp. 15s, 225, 378, 3S0, 466. Data are a combination 
of Census classifications (l) "Clothing (E::cept Uork Clothing), 
Men's, Youths' and Boys' Not Elsewhere Classified" and (2) 
"Clothing, TJorh (including Sheep-lined and Blanket-lined Work 
Coats but Not Including Shirts), Men*s." They do not include 
establishments with annual production valued at less than 

$5,000. 

a/ Data are for establishments located within the city limits 

rather than within the respective industrial areas of New York 
City, Rochester, Chicago, Baltimore and Philadelphia. 

Prepared by 

Industry Statistics Unit, 
Statistics Section, 
Division of Review, NRA 
November 13, I935 



9782 



-101- 

TA3LE XLIII 

MEN'S CLOTHING INDUSTRY 

Wages for the United States, the Five Major Cities, and Outside 

the Five Major Cities, by Census Years, 1923 - 1929 





United Sta 


tes 


Five 


Ma jar Cities 
Per Cent 


a/ 

of 


Outside F 


ive M 
Per 


ajor Cities 
Cent of 




Wages 




Wages 


United St 


ates 


Wages 


Uni 


ted States 




($1,000) 




($ 1,000) 


Total 




($1,000) 


Total 


1923 


235,48? 




145,356 


61.7 




90,131 




38.3 


1925 


203,847 




117,914 


57.8 




85 , 933 




42.2 


1927 


214,559 




121,982 


56.9 




92,577 




43.1 


1929 


206,416 




108,450 


52.5 




97,966 




47.5 


Source: 


Census of M 


anuf 


acturers, 


1929, Vol. II 


pp. 


356 and 368; 


Vol. 


III, ' 



pp. 158, 225, 578, 380, 466. Data are a combination of Census 
classifications ( l) "Clothing (Except Work Clothing), Men's, 
Youths', and Boys', Not Elsewhere Classified" and (2) "Clothing, 
Work (Including Sheep-lined and Blanket-lined Work Coats but Not 
Including Shirts), Men's." They do not include establishments 
with annual production valued at less than $5,000. 

a/ Data are for establishments located within the city limits rather 
than within the respective industrial areas of New York City, 
Rochester, Chicago, Baltimore, and Philadelphia. 

Prepared by 

Industry Statistics Unit, 
Statistics Section, 
Division of Review, NRA 
November 13, 1935 



-102- . 

TABLE XLIV ■ 

MEi:'S CLOTHIHG INDUSTRY 
Value: of Products:- for the United States, the Five Major Cities, 
and Outside- the Five Major Cities- By Census Years, 1923-1929 



Un ited S taves Five Major Pi ti es a / O utside Five Major Cities 

Percent of Percent of 

Amount . Amount United States Amount United States 

($1,000) ($1,000) Total ($1,000) Total 



1923 1,178,715 774,195 55.7 404,520 34.3 

1925 1,087,238 691,287 63.6 395,951 36.4 

1927 1,079,471 670,514 62.1 408,957 37.9 

1929 1,039,554 608,298 58.5 431,256 41.5 



Source: Census of Manufactures,' 1929, Vol. II, pp. 356 and 368; Vol. Ill, 
■pp. 158, 225,. 378, 380, 466, Data are a combination of Census 
classifications (l) 'Clothing (Except 'Jo rk Clothing), Men's, 
Youths', .and Boys', "Jot elsewhere classified" and (2) "Clothing, 
Work (including Sheep-lined and Blanket-lined Uork Coats but 
Ivot including Shirts), Men ! s." They do not include establishments 
with annual production valued at less than $5,000. 

a/ Data are for establishments located within the city limits rather 

than within the respective indur trial areas of l>7ew York City, 
Rochester, Chicago, Baltimore and Philadelphia. 

Prepared by . 

Industry Statistics Unit, 
Statistics Section, 
Division of Review, HRA 
Pov ember 13, 1935. 



noon 



-103- 



TABLE XLV 

LIEN' S CLOTHING INDUSTRY 
Cost of Materials a/ for tie United States, the Pive Major Cities 
and Outside the rive Major Cities, by Census Years, 1925-1929. 



United State s rive Major Citie s b/ Outside Five Major Ci ties 

Percent ©f Percent of 
Amount Amount United States Amount United States 
( M.QOC) (51.000) Total ('51,000) Total 



1925 557,471 
1927 53 J, 379 
1929 524,057 



345 , 1 34 


61.9 


212,347 


33.1 


317,162 


59.6 


215,217 


40.4 


293,454 


56.0 


230,603 


44.0 



Source: Census of Manufactures, 1929 , Vol. II, pp* 356 and 368; 

Vol. Ill, pp. 158, 225, 378, 330, 466. Data are a combina- 
tion of Census Classifications (l) "Clothing (Except V/ork 
Clothing), lien's, Youths' , and Boys' , Not Elsewhere 
Classified" and (3) "Clothing, ,7orh, (including Sheep-lined 
and Blanket-lined 7/ork Coats but Not Including Shirts), 
Men's." They do not include establishments with annual pro- 
duction valued at less than ;5,000. 

a/ Including containers, fuel and purchased electric energy. 

Data are for establishments located within the city limits 
rather than v/ithin the respective industrial areas of 
New York City, Rochester, Chicago, Baltimore and Philadelphia. 

Prepared 'o:j 

Industry Statistics Unit, 
Statistics Section, 
Division of Review, N3A 

November 13, 1935. 



9732 



-104- 

X. LABG3 HELAIIGNS 

Two labor -unions operate in tie lien 1 s Clothing Industry — the 
United Garment Workers of America, and the Amalgamated Clothing 
Workers of America. Mr. Sidney "Tillman, president of the last-named 
grou , stated at the pre-Code hearing cf July 26, 1933, that tie In- 
dustry ?ra.s 80 percent organized. One group cf plants in the Industry, 
located principally in the urban "centralized" areas, is almost entire- 
ly unionised, having working agreements with the Amalgamated Clothing 
"Vorkers. Another group, located mainly in the small cities and country 
areas, operates under working agreements with the United Garment 
.Vorkers of America. 

Until around 1910-1911, the United ferment .Vorkers, affiliated 
with the American Federation of Labor, was the only' union in the Indus- 
try. Labor, in 1911, struck against both management and labor leader- 
ship. The Amalgamated Clothing '.Vorkers 1 Union was founded and has 
since become the dominant union of the Industry. The Chicago strike of 
1911, headed by the Amalgamated group, led to the recognition of a mere 
responsible relationship of manufacturers to employees. The irresponsi- 
ble contractor control system in Chicago was eliminated. The aggressive 
Amalgamated Union by 1919 had achieved unionization of the entire .- I.- 
Chicago market and of other large markets throughout the country. The 
important New York market has had agreements with the Amalgamated 
since 1914; the last strike -was in 19.-30. 

According to Charles E.-Zaretz (*), "It was only with the or- 
ganization of the Amalgamated in 1914 that an upward swing in wages 
and a downward trend in hours began and continued steadily from 1914 
until 1924..." His investigations and analyses of other studies indi- 
cated that: 

b" ...while in the men's clothing industry the working week 
has been reduced 14.6 percent in the 10-year period be- 
tween 1314 and 1924, it was reduced only 9.3, percent in 

. . .24 manufacturing industries and 3.3 percent in 

eight 'union manufacturing industries' during the same 
period. A similar comparison in fill time earnings of 
the throe groups shows that wb.il e in tie men's clothing 
industry the weekly earnings increased 156 percent be- 
tween 1914 and 1924, during tie seme period the increase 

for eight 'union manufacturing 1 industries was 109 

percent and for 24 manufacturing industries only 

103 percent. These comparisons indicate that since the 
organization of tbe Amalgamated the working hours and 
earnings of the clothing workers have improved in a much 
greater degree than the working hours and earnings of 
the worker in both the unorganized and partly organized 
manuf ac taring indus tr i e s . " 



(*) "The Amalgamated Clothing Jorkers cf America," (Hew York, 
1934) Pages 245-246. 

9782 



-105- 

In considering tlie above improvements in hours and wages in the 
lien 1 s Clothing Industry attributed to effort? of the Amalgamated Union, 
it must be remeiribered as pointed out by Lir.' Zaretz that in 1914 and 
prior thereto the Industry "was notorious for the low wages and long 
hours that prevailed in it." In 1914, according to TJ. S. Bureau of 
Labor Statistics reports, the average full time hours per week was 
51.3 and average full time earnings per week was )13.06. 

The Amalgamated 1 s efforts toward stabilizing conditions in the 
hen's Clothing Industry can best be presented by a summary of a 
harch 1, 1932, article appearing in the Survey, by Sidney 'Tillman, 
President, Amalgamated Clothing Workers of America, entitled "Labor 
Leads Toward Planning." i.ir. Hillman described the efforts and aims of 
the Amalgamated as follows: 

The Amalgamated from its inception recognized that 

an attack on the hen's Clothing Industry's problems 

was a concern of both employers and employees. 

"This meant joint employer and employee attach 
on the specific problems of stabilizing pro- 
duction, reducing costs, eliminating waste, com- 
posing difference promptly and peaceably, and 
taking advantage of new technical advances in 
the industry without impairing the worker's 
earnings. " 

It is pointed out that the problem of individual 
production and wages lead to insistence on piece- 
rates. All of tie Industry except hew York was 
on a piece-rate basis in 19.23, and five years later 
New York adopted the practice. It is asserted by 
hr. hillman that the adoption of piece rates by 
the Industry standardized output and made a minimum 
of earnings certain. 

Loss from strikes was offset by setting up impar- ' 
tial machinery for continuous arbitration. The 
impartial chairmen of the various market areas be- 
came both mediators and 'conciliators. 

The mechanization problem was' attached jointly by 
employers and employees. The Union recognized 
tl at resistence to new machinery and labor-saving 
devices weakens the competitive position of union 
employers and dLainish.es employment by the effect 
of - -igh prices on consumer demand, hence, the 
Union encourage - , improvements but maintained a 
measure of control over them as oy "permitting 
the introduction of pressing machines only in re- 
lation to the capacity of tie Industry or of a 
particular shop to abosrb the displaced workers." 
Arrangements for payment of dismissal wages some- 
ti... s amounted to 5-500 for a displaced worker. 



?732 



-106- 

In this. connection, Lir. hillman recalls the in- 
stance of a displacement of IjO workers in one 
Chicago plant over a five-year period by tech- 
nological improvements. 

The problem of waste and overhead was attacked,. 
Attempts were made to eliminate waste and unnec- 
essary overhead and to pro- rate the benefits to 
workers. The workers assumed mora and more re- 
sponsibility for increased quantity and quality 
of output. This led to a changed attitude upon 
tie part of the worker to his job, and even led 
to the setting-up of a few shops run by the 
Union. 

The Amalgamated established a measure of security 
for the workers at the time of a falling in vol- 
ume of production by an equal division of work 
principle. Also, factories having contractual 
relations with unions usually provide for tenure 
of employment, i.e., a worker is usually perman- 
ently attached to a factory, after a probationary 
period, and may not be discharged except for 
cause. 

In order to meet the basic insecurity of business 
unemployment insurance was provided for by the Amal- 
gamated. This began in 1923 in Chicago, and five 
years later was established in Hew York and Roch- 
ester. The Chicago plan, says lir. Hillman, was 
"originally thought of as an incentive to greater 
stability as well as a relief measure." 

Lir. Hillman concludes: " ,'e have succeeded in mak- 
ing both production and employment more regular in 
normal times and in protecting employers and workers 
to some degree from the worst effects of the de- 
pression. .. .The 25 percent in the industry which 
stayed out from union influence materially inter- 
fered with the program which taree-f ourths of the 

industry accepted and found workable 

This proves first that voluntary cooperation in 
economic planning is not enoughs and second, that 
no one industry can stabilise itself entirely by 
its own efforts." 

"It is tie responsibility of the government to 
create an instrumentality that will guide a 
national economic plan. ". . .The problems calling 
for large-scale planning are: "The length of 
the working day and week, jobs for all people 
willing and able to work, technologican unem- 
ployment. ..A minimum wage to be paid in all in- 
dustries. ..." 



9782 



-107- 
XI. LLSCHIPTIOI Oj wISTLIBUTIC: CHAlil LS* 

In men's clothin;, the ? rinelw.l 6ha els of distributioii include 
Sre" ^consumer, and buying offices (fee and commxssion houses). 

A. 7:o1'"-gs1c^s and J obbe rs, 

"There is no single orthodox method of distribution. 
Frequently manufacturers utilize a combination 01 trade 
channels. ?cr example, in large cities manufacturers 
of clothin- may find it desirable to own, *r at least 
control in part their retail outlets. In smaller ci- 
ties, they may find it best to use available, regular 
retail channels or work through wholesalers who cater 
to retailers in a particular vicinity. Manufacturers 
may sell direct to large departmnet stores ana chain 
stores, and distribute indirectly to retailers who 
purchase in smaller quantities. 

»***Iiirect selling has become the dominant method of 
distributing men's apparel. In clothing end hats it 
is usee, almost e::ciusi. ely***. The practice of c.irect 
selling raises the related problem, the exclusive 
agency. In other words, direct selling has mac,e ior_ 
selective selling. The -.ominanee of direct selling is 
somewhat obscure; , because of the fret that many former 
wholesalers of men's wear have become manufacturers, 
and are distributing their ngres direct to retailers. 
This is true of some prominent concerns in the men s 
clotl-ir- trade vhi . h have been lookec upon as the 
classi ^examples of wholesalers and jobbers. This move- 
ment toward direct selling has tended to integrate the 
market, e:^ today manufacturers control of retail out 
lets is not uncommon. "(* *) 

1. Seasons for Direct Selling K Manufacturers. 

n***Fny is it that direct selling occupies so dominant 
a position? Perhaps the basic reason is the nature of 
the -oroduct. Most items of men's wear are of such a 
seasonable nature, and possess such style elements, as 
lenc themselves to this form of selling. Couplecx witn 
this- is the localization of the men's apparel mcustry, 
which makes it easy for retail buyers to go to the mar- 
ket and uurchase a large portion of their oraers direct. 



(*) Prepared by A. Prima Aaronnon, membei of the Men' s Clothing 
Industry Stud; group, TextileU.it, Industry Studies Section, 
Division of Review, ERA. 

(**) Xenneth ^npmn- l,: fi r,; s "ear Mer chandising— The Ronald Press 
Co. , New dork, 1930. Pages 370-371. 



9732 



-108- 

Further, the style risk is so great in some lines that whole- 
salers cannot afford to carry a large supply. It is held in 
some quarters that controlled buying may reinstate the im- 
portance of the retailer. This will not happen in men's 
wear. This "buying will continue to "be done "by resident "buy- 
ers, by cooperative "buying associations and by retail buy- 
ers, who go to the market.*** 

"One would normally expect such items as work clothing, where 
the style element is lacking, to be distributed through whole- 
salers, but instead of a large system of sectional wholesale 
houses distributing these products we have system of section- 
al manufacturing plants supplying directly the needs of re- 
tailers of a particular district. There still remain, how- 
ever, a considerable number of products which wholesalers do 
distribute.*** 

"Many wholesalers, while still operating under the business 
name of wholesaler, are also engaged in manufacturing, and 
they sell their products direct to the retailer. In only a 
few cases do they sell to other wholesalers.*** 

"Many of these concerns started out as manufacturers of a 
very few items, and were -known to the trade as wholesalers. 
In more recent years, seme of these firms have gone back to 
manufacturing exclusively, Other concerns interviewed 
started cut as retailers, later went to wholesaling, then to 
manufacturing . *** 

"Most of these former wholesalers have turned to manufactur- 
ing because of competitive conditions, opportunities for 
greater profit, ease of selling goods of their own manufac- 
ture; in some cases, they turned to the manufacture of cer- 
tain items which had been discontinued by producers for ^hom 
they themselves were distributing. 

"Wholesalers of men's apparel are finding it advisable to 
(1) develop their own brand; (2) establish' control of their 
outlets; (3) act as resident buyers for a group of retail 
stores; and (4) organize and supply cooperative retail buy- 
ing associations." ( *) 

Jp to the end of the nineteenth century, or at least prior to the 
advent of the automobile, wholesalers as a* class constituted perhaps the 
most powerful single factor in the business.. They knew the needs of their 
trade, bargained with the producers for their stocks, often financed the 
manufacturers, sold the major staples of their line under their private 
label, sent their emis aries over far-flung territories, financed their 
customers and in manifold directions wielded a tremendous influence. 



( *) Clark, FredE., Readings in Marketing, New York, The Macmillan Co 
1933, pages 311-312. (Adapted .from ..Kenneth Dameron, Men's Tear 
Merchandi s ing . ) 

9782 



-109- 

"With the darn of the twentieth century, two comparatively new forces "be- 
gan to e::ert a definite and unfavorable influence uuon the fortunes of 
the wholesaler — the automobile and advertising. ***The automobile served 
to eliminate the chief denendence uoon railroads for transportation of 
persons and goods. ***Re,;'istration of motor vehicles in the Unitea States 
jumped from 8,000 in 1900 to 450,000 in 1910, to 8,225,000 in 1920, to 
23,000,000 in 1930.*** 

"*** Individual consumers as well as retailers found it increasingly poss- 
ible and profitable to explore nearby towns and more distant cities. Such 
excursions developed new tastes, new desires, left the consumer less will- 
ing to be satisfied with what the local stores provided and the retailer 
less ready to submit to the dictates of the distant wholesaler as to 
quality, style, and brand of the goods he wa.s to handle. 

"That new independence found a. ready ally in the rising popularity of 
national advertising***. 

"Wholesalers found it no longer possible to hold the -..esires of their re- 
tailers ana their consumers within the narrow limits of their own lines. 
Instead, with increasing frequency, they found themselves confronted with 
the demand for a specific brand of goods, in specific sizes, often a.t a. 
specified price. Advertising was beginning to change and sh pe the demand 
of the American Consumer. 

"The wholesalers were rapidly losing control over their market, losing the 
freedom to choose what goods they would handle*** the majority of whole- 
salers***simply disregarded what was going on around them and continued to 
do business in the same old way. 

"As the direct result of their lethargy, many were forced out of business. 
In some lines the process of elimination was speeded by other factors.*** 
Shoe, hat, clothing wholesalers all saw chains invading their field and 
capturing an ever-increasing -oortion of available business.*** 

"Wherever wholesalers have survived, their places of business, their busi- 
ness psychology, their internal business metnods and procedures of today 
generally bear but a fleeting resemblance to the old establishments of the 
former days. These modern wholesalers have learned to recognize that re- 
gardless of what name a system of distribution may carry, so long as goods 
are not consumed at the point of their final productions there must ensue 
certain processes of handling, transportation, warehousing, etc., which 
become increasingly more indispensable and complicated as the distance be- 
tween point of production and consumntion widens. ***"* 



(*) 0. Fred Host, Distribution Today (New York, 1933) pages 30-32. 



9732 



-110- 

B. Retailers . 

1. Lepartment Stores(*) 

"Department stores as a group registered a reasonable and 
wholesome rate of growth ap to' trie period of the World War. 
During the ten_.ye'ars following the war they expanded in 
numbers as -.ell as size of individual units in a manner 
that reflected a state of unbounded, perhaps even wild, 
optimism on the pert of department store executives, as 
to the future opportunities of such type of retail estab- 
1 i shmen t . 

"i.iany nev/ and larger buildings v/ere erecteo.. Existing 
buildings were enlarged, modernized, recontrncted or re- 
furni shed. *** 

"These increases in physical plants and equipment were 
paralleled by growth's in the development of more com- 
plicated methods of organization, procedure and customer 
services. *** 

'Thus department stores reached the end of the boom era 
while carrying an unprecedented burden of new expenses. 
Their cost cf maintenance of plant and equipment had mounted 
through increased interest charges, higher taxes, more 
insurance, repairs anc re ilacements, and the operating ex- 
penses of each department nad grown suostar-tia.lly through 
the addition af new functions anc more elaborate customer 
service. " 

■Distribution methods were changing in all industries, but 
in men's clothing ?ven more than others. 

"The details are most interesting, they reflect the power- 
ful forces at work in manufacturing today; namely the 

"1. fight for control of distribution, 

"2. the centrifugal forces leading to mergers, particularly 
' di s t r i but ion me rg c i ■ s ' , 

"3. the apparently contradictory double tendency of priSe 
levels both downward and upward, 

"4. the tendency to 'jet closer to the consumer, 

"5. the dominance of chains. 

"There have been radical changes from the early rays up to the 

present. 

"Today a. famous old-time advertiser like Kuppenheimer is so 
hard put in the struggle that the best he can to in a great 



(*)0. Fred Eost, Distribution Tot ay(Hew York, 1933) pages 43-44. 
9782 



-111- 

city of ilew York is to distribute through Bloomingdale' s; 
while Fashion Park Associates, using the new tool of the 
distribution merger to shape a vertical trust of immense 
sine, have cone to dominate Hew York and Chicago." (*) 

T7e also find that large retailers are making financial alliances 
with manufacturers of men's clothing, developing a vertical organization 

of their own, "both sides using every means within their power to obtain 
control of the metropolitan markets. 

The idea of clothing manufacturers' owning or having an interest in 
large retail establishments or of retailers' having an interest in manu- 
facturing plants is not new. Up to comparatively recent months, John 
David, A Slew York retailer, has had a financial interest in Stein-Bloch, 
and TTallach 3rothers in Hart, Schaffner & Tar::. (**) 

The chief reason for exclusive agencies in the men's clothing in- 
dustry is that if a high degree of efficienc-' is to be reached between 
the retailer and manufacturer a close relation is called for. This is 
true in the small cities as "ell. 

Hart, Schaffner & Harx are reputed to own or have a financial in- 
terest in almost 400 stores throughout the country. This is not known 
by the general public and it is because of this that the "double-label" 
system is used; i. e., retailer and manufacturer label. 

The ? L ichmond Clothing Company (Richmond Brothers) is one of the 
largest manafacturers of men's clothing in the world, having (***) 
62 of its own retail outlets, located mainly in the Kiddle T7est and South, 
Another large manufacturer similarly situated is the Aplo Company, of 
Rochester, Hew York, best known as the Bond Stores, with locations in 
the East and ITorth Central states, gach of these firms, as '"/ell as 
several others, operates on a single price unit; i, e., the cost of the 
same qualitj' merchandise is the same in all of the company's retail 
outlets; usually the various concerns offer two or more grades for con- 
sumer choice. 

These firms operate on the mass production or "Ford" system and 
offer to merchandise men's clothing at lower prices than known hereto- 
fore. Their stores are not pretentious or "showy" places, but sell the 
consumer the idea that his money goes into the suit and not fimture-;. 
It is for this reason that increasing numbers of men in the middle class- 
es prefer to buy their clothing on the "Ford" principle. 

(a) Direct to Consumer 

This same principle is also employed in the house-to-house or di- 
rect- to-consumer method of distribution of men's clothing. This 

(*) Paul Freeman, "Changes in the Ken's Clothing Industry." Adver- 
tising and Selling . (May 15, 1929). 
(**) Freeman, supra. 
(***) Fairchild's Retail Book (Fairchild Publications. 1934) 



9782 



-112-- 

method of selling has enjoyed a healthy growth in recent years. The most 
fertile field for this business is in the Southern and Western states 
where several hundreds of thousands of garments are being sola each year. 
In all probability this is due to the greater style consciousness of men 
inthe cmallcrcities and towns who reac , hear, and see more of their city 
brothers via. motion pictures, radio, automobile, and magazines. Then, too, 
the local stores do not have the finances nor space that would enable 
them tj stock a complete line of a. well-known brand. 

House— to-house selling is one of the oldest methods of i istribution, 
varying greatly in volume from year -to year. 

"It seems that house-to-house selling of the ordinary staple 
forme of merchandise, including food and clothing, develops 
very rapidly curing and after a period of business depressions. 
When business improves employment is greater and money is more 
free, and house-to-house selling apparently declines. 

"Baring the past 40 years there have ueen three active periods 
of house-to-house selling; that is, periods in which this method 
of i istribution to consu/iers has assumed proportions sufficiently 
large to threaten the regular retail chaunels. These three 
period::, were from 1894 to 1899, 1908 to 1912, and again from 
■1921 ta 192"'. In each case the period of active development of 
house-to-house selling followed a business depression. If this 
explm tion is correct, it may be assumed that whenever there is 
another business depression a. period of active house-to-house 
selling will follow and that as business improves this method 
of distribution may again decline in importance. (* ) 

Cincinnati is, or seems to be, the center of manufacture for the 
house-to-house type of business. 

An example of well-known companies to sell direct to consumer is 
the Nash Tailoring Company of Cincinnati, Ohio, selling over 500,000 
garments annually, having a price range from $18.50 to $50.00. Richmond 
Brothers also use this method of distribution as well as through their 
retail stores, the purchaser making his selection from sample, swatches 
and being measured by the manufacturer's agent, who follows the manu- 
facturer's printed directions on the subject. 

2. Mail Order Houses. 

The mail order business is the brain child of A. Montgomery 
Ward, who in 1872 started sending out catalogues to farmers. 

Montgomery Ward was a buying agent for the national Grange, a 
fraternal and economic farmers-ran organization offering its members, among 
other .things, the benefits of cooperative buying. 

It was realized by the founder of this company that it was with 



(*) Fred E. Clark, Readings in Marketing (Hew York, The Macmillan C*. , 
1933) page 51,. 

9782 



-113- 

difficulty that the farmer 30 t into town to shop. Also that in the 
stores in snail towns stocks were ratr.rally limited because of their 
loaation and the area of distribution served. By 1830 Montgomery Ward 
& Company was doing a business in excess of two million dollars. 

"In 18S0 Richard Seers and A. C. Roebuck, who had run a mail 
order watch company formed the Sears,' Roebuck ■& Company. In 
1908 Sears had caught up to Montgomery Ward and in 1920 was 
over twice the size of its competitor. The mail order plan 
proved extremely popular with those consumers who lived in 
small towns, villages and on farms, for it gave them the 
opportunity to' secure a wide variety of merchandise not 
generally stocked by the merchants of their community. 

"Another boon to the mail order business was the inaugura- 
tion of the U. S. Post Office Department's rural free deli- 
very service and parcel post service. 

"Competition comes from manufacturers and smaller co-celled 
mail order houses handling only a few specialized lines 
such as wearing apparel, stoves, implements, etc. "(*) 

"The decline of the mail-order business began with the ad- 
vent of the low-priced automobile, . causing the dissappearance 
of frontiers, and it gained momentum substantially in 
direct proportion ""fcdh the increase in the number of motor 
cars in public use and the increase in the mileage of the 
improved country roads and paved highways. This meant that 
the rural consumers, who up to then had been accustomed to 
select their needs from the alluring pages of the mail-order 
catalogues, were now riding in their automobiles over im- 
proved roads to the nearest shopping town or city in in- 
creasing lumbers. There they were spending their cash in 
a store, while at the same time they could enjoy the thrill 
of actually seeing, touching and trying on the things they 
wanted to buy, end seeing the sights of the town in the 
bargain. "(**) 

Then, too, "the chain stores were crowding into the smaller towns as 
well as the aetropolitan centers. Firms like J. C. Penny, W. T. Grant, 
Woolworth 1 s and Kroger were expanding a.t a rapid rate. 

Certain circumstances caused the two large mail-order firms to 
look for business outside of their usual channels and to open up retail 
stores. One was that if one of them bought a large amount of high- 
priced goods and put out a catalogue setting prices for six months and 
■their market falls, that firm is in for a drubbing. The decision to 
open retail stores was first made b; Sears, Roebuck & Company (first 
opened in 1225 in Chicago). Montgomery Ward countered with a plan to 
open 1500 stores. They had 36 stores by the end. of 1927. Ileither of the 



(*, -crru-.e, Jbnuary, 193C . 

(**) 0. Fred Rose, Distribution Today (New York, 1933) page 86. 



782 



-114- 

concerns established the number of stores they originally planned. The 
maximum number of stores report ec' by Montgomery Ward & Company (*) was 
556 at the end of 1930, and by Sears, Roebuck & Company, 378 stores at the 
end of 1931. 

The two companies experienced a number of difficulties due to their 

newness in the retail business and because it was difficult to divorce 

themselves entirely from mail-order -ideas and adapt themselves to retail 

selling in a short space of tine. 

Both mail-order houses have reduced the number of stores in opera- 
tion, Montgomery Ward £. Comoany reporting 439 in 1933 as compared with 
556 in 1930, and Sears, Roebuck & Company having approximately 352 stores ■ 
as compared with 373 in 1931. Meil order and store sales by Montgomery 
Ward & Company may be accepted as reflecting the trend of proportions for 
both companies.. (**•') 

Hail Order Retail 

1926 183,300,000 

1927 138,680,000 27,002,400 
1923 130,200,000 58,100,000 

1929 „ 10,800,000 116,500,000 

1930 111,700,000 137,400,000 

1931 81,300,000 113,900,000 

1932 68 .tOO, 000 107,900,000 

1933 78,000,000 109,600,000 

1934 106,000,000 (est.) 144,000,000 (est.) 

Compared with the total shown by the 1930 Census of Distribution, 
the combined 1929 sales volume of Seers, Roebuck & Company and Montgomery 
Ward £, Company represented approximately 1.3 per cent of the total 
retail sales in the Inited States. 

C. Resident Buyers . 

There are bout three thousand department and specialty stores in the 
United States which have Few York buying affiliations of some kind. 

The Association of Buying Offices, Inc., is an organization of 
central buying for department arid specialty stores doing well over a 
billion dollai s annually. Its membership is composed of three types of 
buying offices; those representing s store yr group of stores having 
joint ownership, those cooperatively functioning for a group of independent 
stores, and those privately owned whose services are offered to independent 
stores on a fee basis, (***) 



(*) 0. Fred Rost, B i s t r i b ut i o n To day (New 'fork, 1933) page S3. 

(**) Fortune , January, 1935. 

(***) II. I. Kleinhaus, Executive Secretary, Association of Buying Offices, Inc. 



9782 



-115- 

"The purpose of the Association in port is to inculcate just, 
ethical principles of trade ant promote fair dealings in all 
matters relating to the business, trade and affairs of the 
members and/ or their principles; to secure freedom from and 
abolish unjust anc unlawful practices, abuses and exactions 
of every kind, $tc. "(*) 

I 
"The largest and most important operators, from the viewpoint 
of manufacturers distributing nationally, are the 1£ leading 
group and resident buying organizations which represent ap- 
proximately 460 stores, exclusive of duplication. The total 
volume of purchases of these organizations is unknown, but 
the proportion of total purchases of any one store placed 
through the central office varies greatly—with the merchan- 
dise, with the store, "and with the character of service main- 
tained by the central office. 

"Contrary to popular impressions^ resident and group buying 
associations do not buy the majority of goods purchased by 
member stores. The percentage of certain houses ranges from 
around two per cert for ready-to-wear to as high as 75 per 
cent for some staple lines. Unless the central office is 
buying for a true chain organization, a substantial propor- 
tion of all important lines of merchandise is still purcha- 
sed by the individual store buyer. 

"Likewise contrary to general impression, the action of the 
central ofiice in purchasing any line of merchandise does not 
take the place of wholesalers and mill agents in the distri- 
bution scheme as a whole, or in the selling to individual 
stores who subscribe to the services of a market represen- 
tative; and the action of the central offices does not sty- 
mie the buying arc selling opi ms as it is thought to do. 

"It is also a fallacy that manufacturers' salesmen cannot 
go direct to the store buyer and sell him the sane character 
of merchandise as is being purchased to greater or less 
extent by the Hew York office of that store. They can and 
they do. 

"There are no clearly- defined lines dividing the proportion 
of orders placed through the central office and those placed 
in the market or with road salesmen by store buyers. The 
proportion of an;; merchandise purchased through the market 
representatives, end the number of departments for which 
such purchasing is done depends upon (l) the character of 
central office, (2) the character and location of the client 
and .stores, and (o) the facilities of the central office, 
or the. type of agreement v?ith tin member stores. 



(*) H. I. Kleinhaus, Executive Secretary, Association of Buying 
Offices, Inc. 

9732 



-116- ... 

"Kinds of Central Offices 

"The resident buyer is a market expert selling his services 
in the location, appraisal, end' selection of merchandise for 
independent stores on a salaried or commission oasis, and is 
limited in his purchasing to the individual.. orders of, or 
the acceptance of his selections jy the client stores. 

"The group, or syndicate, association is generally owned out- 
right by a group oi stores and is empo'.3red to buy for the 
r;roup such portion of any line or such amount nf any merchandise 

as the member stores a ree upon. 

a 
"The her; York office of one or more corporate «af filiated 
stores functions much as the group association, and differs 
only in its smaller size and lesser power.*** 

"Centralized buying originated with the realization that 
staple merchandise could be purchased through a central 
source to the aavartage of individual retail merchants. It 
was later extended to include style merchandise in order 
that retailers might lessen the chance of loss from excessive 
markdovns on improperly purchased goods, from high adverti- 
sing costs to sell the mistakes of buyers' judgments, and 
from public fickleness. 

"The central office system has developed, not from a desire 
to - ? change sources oi purchasing, but because of an economic 
need on the part of large stoves to place some of their pur- 
chases more directly, pnd to obtain certain services not 
provided by the old-line systems of distribution. 

"■Limitations which develop in the system of market represen- 
tatives come, not so much from fruits in the method itself, 
as from the conformity of all stores to one standard of 

merchant" i sing. 

"It was natural that the system should preserve its identity 
and justify its early intentions bj extending its operation 
to include practically all kinds of merchandise ssld by depart- 
ment and dry goods- stores. This brought centralized buying 
organizations into what appears as competition with some', 
but not all, of the business of the wholesaler. Mare lately 
ifxhas' indicated duplication with the salesman's functions 
before the retail store buyer. 

The group 'buying association is outstanding today because . 
of its unique purchasing power. What group association 
elects to yurchase is purchased for- each member stire, 
while what the resident buyer selects to recommend tn his 
clients is not sold to then unless they, in turn, are wil- 
ling to accept it. 



9782 



-117- 

"Generally speakin ;, what the group ouys is taken by all of 
its member stores, while the resident buyer generally places 
individu rders for Lis respective clients, or purchases 
quantities under favorable conditions end makes them availa- 
ble to his clients as Hhey. 'needs arise; rarely does be buy 
for all of his stores in one operation. 

"Both the resident buyer and the group or syndicate in many 
cases have developed to such en extent that they can buy any 
merchandise they want, from practically any source, and in 
any quantity. Their units of purchase, representing the 

,^e needs of several very large stores, are of such 
tremendous market significance that the group is, by rights, 
a preferred ci'stomer of the manufacturer anc" established 
relations are highly important. 

"As the central buying office increases its operations, •' 
which is the intention of these organizations, its impor- 
tance in the distributive system must be reflected in the 
policies of manufacturers. Resident buyers and group as- 
sociations must be recognized as economically justified parts 
of the orthodox distributive sys-tem,' 'hot as competitive to 
it nor as predatory to its older components. 

"But it should also be remembered that while central offices 
are powerful f; ctors in the distribution of department store 
merchandise, thej have not succeeded is displacing the store 
buyer and they are not functioning 1> per cent in the pur- 
chase of department store lines. 

"Whether the central office buys 75 per cent, or two per 
cent, of risj line of goods for 'any one or several of its 
member stores, the remainder is purchased as usual by the 
individual action of the store buyer — either from lis desk 
in the store or upon his visit to the market centers. This 
fact is not always known or appreciated by the manufacturer's 
or wholesaler 1 s salesman. 

"Over— emphasis of the extent ana importance of central office 
purchasing has caused many to lose sight of these facts. While 
there are some 2500 stores affiliated with central offices 
of various hinds, and their purchases through those offices 
are indisputably important ones, there are over 30,000 addi- 
tional worthwhile independent stores which do not have central 
office connections. 

"Some of these purchase only a quarter of their goods from 
wholesaler.; oirchase practically all from the jobber; 
all use many sources of information and supply other than 
market repx'esentatives« 

"T . se are the merchants wl am manufacturers must sell 
through wholesalers. They, like their big brothers in the 
group associations, must be contacted and served in much the 
seme -.ir-j chat they have been curing the last quarter century.. 

/ 

9782 



-113- 

"We do not, therefore, have in centralized buying a form of 
distribution talcing the place of established systems, un- 
economically competing with established systems, nor incom- 
patible with the long- established and successful relation- 
ships of manufacturers with their customers. 

1. "The Attitude of Manufacturers. 

"There is no doubt but that the growth on centralized buy- 
ing in its many forms is sn established fact; likewise, 
that, from every responsible indication tocia.y, distribution 
through central offices will become even more coi uuon in the 
future. Complications in distributive policy and dealer 
relations will naturally present themselves an manufacturers 
learn to recognize this factor in distribution; but the 
newer buying methods are entirely sound, and are here to 
stay. They cannot be successfully combated nor ignored 
by producers. 

"Harmonious relation 1 ; with all distributive factors must 
be developed er.o. maintained . 

"Dissatisfaction occasionally is expressed by wholesale 
distributors, ant' manufacturers distributing the bulk of 
their goofs through jobbers often feci that to sell to 
resident a nc" .roui buying houses constitutes direct compe- 
tition with jobbers and with that portion of goods, which pas- 
ses (or is intenc.ed to pass) through the hands of whole- 
salers. 

"The manufacturer naturally wishes to feel that he is pro- 
tecting his wholesale representatives, because they long 
have been and still are the chief ..'art of his selling orga- 
nization. There are reasons, however, wiry the central 
"buying office should not be frownec upon, and why the pro- 
tection of .'jobbers cannot be carried to an extreme. Just as 
in those cases where the largest retailers are not properly 
served by wholesalers, and demand the right to purchase di- 
rect from the manufacturer, stores which have assigned the 
buying of any lines of merchandise — or the purchase of any 
jiven quantity — to a central office present a situation 
which must be accepted by the producer. 

"If the resident or group association is the established 
custom with certain retailers, and if it is remembered that 
neither the resident nor group buying office affiliation 
really stymies the purchase of ,-oods by the store buyer, it 
is clear that for the manufacturer to discriminate against 
the sale or his goods through central offices would be un- 
sound. 

"It would be no more justifies! for the producer to contest 
the presence of the central office than for him to forego 
the v'oltane obtainable by selling direct 'Ito large department 



9782 



-119- 

stores, merel; L rder to favor a complaining jobber who 
feels that the large store is his customer because it is 
in his territory.'' 

"To refuse to sell to central offices, to placate whole- 
saie distributors with promise of discrimination against 
the groups to feel that manufacturer's salesmen cannot ap- 
proach the buyer whose store has central office connections, 
or to assume that all pro dn.ee rs do not have an equal chance 
to sell the central office, is wrong. To take the attitude 
that centralizing is equivalent to mechani zalizing, and that 
th e orthodox methods of contacting, developing, advertising 
to and cultivr.tin--; customers are becoming obsolete is an un- 
gual i f i ex. m i s t rk e . • 

"To react in any of the above ways to the central office 
factor in distribution cm result only in harm to the manu- 
facturer. It will limit his outlets, obstruct the consum- 
mation of ri htful business volume, narrow his opportunities 
fore ale?, occasion open opposition, or mere disregard, from 
the central office organisations; and resistance will not 
result in the development cf more pleasant or profitable 
representation by the old-line cistribivtive factors. 

"I have found no attitude toward manufacturers on the part 
of the central buying offices which would justify the fear 
of them that some manufacturers seem to hold. 

"I an of the opinio that more of the fear of selling through 
resident and group «,r v ing associations is occasioned by over- 
emphasis of the theoretical contingencies of doing so than 
Qj actual fa.ct. 

"The central offices which occasion the worry of those manu- 
facturers ' accustomec to uninterrupted distribution through 
wholesalers display a genuine appreciation of the necessity 
of maintaining mutually satisfactory relations with manufactu- 
rers end their selling agents, and of the manufacturers' 
maintaing r i C entity with all distributors and purcha- 
sing factors. They recognize that there is enough business 
obtau.-c . . rough each of the many channels of distribution 
to assure the continuation of each to make each useful to 
the manufacturer am" the retailer.. "(*) 



(*) Gordonh. Bush, "How the Resident Buyer Functions, n Advertising 
and 6 ell in- , Volume 13, ITo. 4 (June 12, 1929) page 17. 

9782 



-120- 

XII. MATERIAL AND GARMENT STANDARDS IN THE MEN'S CLOTHING INDUSTRY. (*) 

The records show no uniform material and garment standards for this 
Industry. That standards are necessary for the protection of the honest 
manufacturer and the customer has teen fully recognized by the manufactu- 
rer, retailer, and consumer. 

Reliable manufacturers are insistent upon knowing how their raw 
materials will behave during the manufacturing process. The consumer 
likewise wants to know how an article will perform and how durable it is. 

The following standards have been suggested as a start; and the 
acceptance by this Industry of even one of these would be a long step in 
the right direction and, it is hoped, lead to the full and proper standard- 
ization of the Industry: 

1. Measurements 

II. Fibre Contents 

III. Shrinkage 

IV. Color Fastness 

V. Proper labeling to cover the above. 

A . ' Measurements . 

"The purpose is to provide standard methods of 
measurement, standard measurements and tolerances for 
the guidance of producers, distributors, and users, in 
order to eliminate confusion resulting from a diversity 
of measurements and methods, and to provide a uniform 
basis for guaranteeing correct size." (**) 

Miss Ruth O'Brien, of the Bureau of Home Eco.nomics, United States 
Department of Agriculture, has given this problem a great deal of study. 
The following excerpts have been taken from her article, "An Annotated 
List of Literature References on Garment Sizes and Body Measurements" :( ***) 

"The marked growth of ready-to-wear clothing has 
brought with it many difficulties in the proper sizing 
of garments. (Fage 1.) 



(*) Prepared by C. C. Boyden, member of the Men's Clothing Industry 
Study group, Textile Unit, Industry Studies Section, Division of 
Review, N.R.A. 

(**) Recommended commercial standard for circular flat knit rayon under- 
wear adopted by the General Conference of June 24, 1931. (Men's 
Clothing Code Files.) 

(***) United States Department of Agriculture Miscellaneous Publication 
No. 78, May, 1930. 



9782 



-131- 

"Some of the difficulty is due to the practice 
of "skimp-cutting" garments in order to undersell 
competitors. Some is due to the lack "f uniformity 
in the sets of measurements used by different manu- 
facturers for the same specified sice of ago. The 
greatest trouble of all, however, lies in the fact 
that, with the exception of one study made by the 
United States War Department (Ireland, Davenport, 
and Love "Statistics Fart One, Army Anthropology") 
in an effort to establish proper sii'es for uniforms 
(during demobilization after the World War) they 
directed the measurements of 100,000 men, taking 
those measurements necessary for uniforms. This was 
done according to scientific methods, and is the only 
published report of a study of this kind made with clo- 
thing construction definitely in view) , no scientifically 
determined measurements have ever been published wnich 
could be used for clothing construction. (Fages 2 and 3) 

"The measurements now in use are apparently the 
result of traditional practices somewhat modified in 
accordance with complaints received by manufacturers 
and influenced more or less by data of doubtful value 
that have come from various sources, although some 
clothing firms may have conducted investigations from 
time to time and perhaps are holding the results as 
trade secrets, it is unlikely that any considerable 
number of these were maae by trained anthropometrists 
and the results properly analyzed by statisticians. 
In fact there are many indications that ancient ideas 
of -proportions are still being relied upon. (Fage 2) 

The great importance of taking all body measure- 
ments according to the best anthropcmetricr.l methods 
cannot be too strongly urged. If tne examiner has not 
been trained in locating body landmarks and taking 
measurements, and if the instruments used are not accu- 
rate and suitable, the results are worthless.** 
The methods and instruments of the science have been 
very carefully worked out, and it would be necessary 
only to decide upon different body landmarks to make 
them applicable to the studies needed to establish 
measurements for clotning construction. (Fages 3 and 4) 

Measurements Now Used in the 
Clothing Trade. 

"The publications on measurements used in the 
clothing trade are apparently limited to discussions 
of proportions and systems of drafting devised by 
various workers. The proportions recommended seem 
to be based entirely on traditional ideas and not on 
actual measurements of individuals. In the few cases 
in which such studies are mentioned, no details of pro- 
cedure or data are reported. It is therefore impossible 
to evaluate the conclusions drawn. *** » (Fage o) 



J?82 



-122- 

That a start toward garment standardization has already been made 
is shown by the following excerpt: (*) 

"Garment Sizes 

"A number of Commercial Standards relating to 
dimensions of ready-made clothing have been established 
under the auspices of the Bursa of Standards: Minimum 
measurements for boys' blouses, waists, shirts, and 
junior shirts (95); (**) knit underwear (other than 
rayon) (102); (***) and men' s pajamas (89). (****) 
The measurements agreed upon by the manufacturers 
and issued as these standards were bpsed upon surveys 
made of the measurements being usei by manufacturers 
before the standards were established." 

B . Fibre Contents . 

For the protection of the grower, manufacturer, retailer, and con- 
sumer, it is important that the fibre contents of the material from which 
the garments are made should be shown on the garment, at least as to the 
basic product (wool, cotton, etc.). 

It should be -possible for the clothing manufacturer to know the 
composition of the cloth h« purchases. In lieu of any definite "Service" 
standard, a statement of the percentage of wool and cotton would seem a 
minimum requirement which need add practically nothing to the cost of 
the clothing. 

(*) "Present Guides for Household Buying" by Ruth O'Brien, Chief, 

Textiles and Clothing Division, and Madera M. Ward, Assistant 

Econcmist, Economics Division; Bureau of Home Economics. U. S. 

Department of Agriculture, Miscellaneous Publication No. 193, 

April 1934- (Fa>?e 16) 
(**) (95) - Bureau 'of Standards - 1931, Boys' Blouses, Button-On 

Waists, Shirts, and Junior Shirts. U.S. Dept . Com., Bur. Standards 

Com. Standard CS14-31, 16 pp., illus. 
(***) (10?) - Bureau cf Standards-— 1332.. Knit Underwear (Exclusive of 

Rayon). U. S. Deit. Com., Bur. Standards Com. Standard CS33-32, 

49 pp. , illus • 
(****) (89) - Bureau of Standards — 1930. lien's Pajamas. (Made from 

Woven Fabrics.) U.S. Dept. Com., Bur. Standards Com. Standard 

CS15-29, 12 pp. , illus. 



9782 



-12S- 

The consumer, as a general rule, if financially able, prefers 
clothes of all wool construction, as against inferior fabrics. Without 
the proper labeling of the fibre contents of the goods from which the 
garments are made, the consumer is forced to depend for his information 
regarding the quality of the clothing he is buying on the salespeople, 
who may know very little regarding that which they are offering the 
customer. 

In vool fabrics, the fibres used generally characterise the aprear- 
ance and durability of the finished goods. EfcibriSs made of wool, cotton, 
shoddy, and other substances differ from each other due to having passed 
through different processes of manufacture. There also arises a differ- 
ence in the several fabrics due to the individual characteristics of the 
fibres of which they have been separately made. 

Marking fibre contents would tend to bring the price between all 
wool fabrics and those with less or no wool and those containing re- 
worked or reclaimed' wool into closer price adjustment. 

The use of substitutes for wool affects the quality of the cloth 
produced as to the warmth, elasticity, durability, and strength. Tne 
showing of the fibre contents will aid and protect the consumer in the 
selection of his clothing, and afford the manufacturer, retailer, and 
all others in the Industry an opportunity to sell their garments on 
their true fibre contents. 

Theoretically the most effective agencies, and they are many in 
number, are naturally those created by the Federal, State and Municipal 
Governments, the reason being that they are answerable only to their 
governments. Their duties and activities are defined by law. In the 
Spring of 1935 there was introduced into Congress the following: 

"A Bill 

"To protest procuders, manufacturers, and consumers 
from the unrevealed presence of substitutes and mixtures 
in woven or knitted fabrics and in garments or articles 
of apparel made therefrom, manufactured in any Territory 
of the United States or the District of Columbia, or trans- 
ported or intended to be transported in interstate or 
foreign commerce, and providing penalties for the violation 
of the provisions of this Act, and for other purposes. 

"Be it enacted by the Senate and House of Representa- 
tives of the United States of America in Congress assembled, 
that this Act may be cited as 'The Truth in Fabric Act 
of 1935.'" (*) 

This bill is still before Congress, and will come up for consider- 
ation again. 

The Industry proposed an amendment to the Code of Fair Competition 

(*) H. 7166 In the House of Representatives 

S. 2318 In the Senate of the United States 

9782 



-124- 

for the Wen's Clothing Industry, on which a hearing was held in Washing- 
ton, April 15, 1935, as follows: (*) 

"Article XII, Subdivision (d) 

"The following provisions snail apply only to 
'Tailors-to-the-Trade' and/or special order houses 
of the Wen's Clotning Industry: 

"1 - All samples of cloth shall be so labeled 
as to show the content of the cloth so labeled. 

"Fabrics labeled 'all wool' shall mean that the 
fabric so labeled is 100 per cent wool. 

"Fabrics labeled 'wool with silk decorations' 
shall mean that the fabric so labeled shall be all 
wool with the exception of the decoration, which 
shall be silk. 

"Fabrics labeled 'wool with rayon decorations' 
shall mean that the fabric so labeled snail be all 
wool with the exception of the decoration, which 
shall be rayon or celaneise. 

"Fabrics labeled 'wool with cotton mercerized 
decorations' snail mean that the fabric so labeled 
shall be all wool with the exception of the decoration, 
which shall be mercerized cotton. 

"All other fabrics not specifically included 
above and containing wool and other fabric substance, 
such as cotton, shall be labeled 'not all wool'." 

No official action was taken on this proposed amendment. 

The importance of marking garments to show the true fibre content 
is brought out very forcibly in the following statement (**) of Mr. 
Peter a Grossman of the Born Company of Chicago, Illinois, made in con- 
nection with the proposed amendment to the Code covering labeling of 
fabrics. 

*** "The direct beneficiaries of such a provision 
are that class which both this Administration and the 
responsible leadership of our Industry have a duty to 

(*) Transcript of hearing on amendments to the Code of Fair Competition 
for the Men's Clothing Industry, held April 15,1935. Fage 23 
(Men's Clothing Code Files) 

(**) Transcript of Hearing on Amendments to the Code of Fair Competition 
for the Men's Clothing Industry, held April 15, 1935. Fages 125, 
126 and 127. (Men's Clothing Code Files) 



9782 



-12! - 

protect; namely, the buyi ng ' pub 1 i c . 

"Only a very small percentage of that 
public has even semi-uxr..rt knowledge of 
textiles. The average man is .completely in tue 
hands of the seller in this regard, if a fabric 
is sold to nim as wool, he accepts it as wool. 
We feel that it is our obligation to sec: that he 
gets wool when that is what he thinks he buys.*** 

"The aforesaid ignorance of the nublic as to 
cloth content, its aforesaid dependence on the 
representations of the vendor, make this a par- 
ticularly easy field for sharp practice. And this- 
the unfairest of nil fori;.s of unfair trade practice- 
is definitely on the increase - due, as I see it, to 
two factors. One is, of course, the depression, vhich 
has made competition so desperately intense, and has 
put added temptations on tnose wnose business principles 
are not of the soundest, and at the same time has made the 
public more than ever susceptiole to ostensible 'Bargains'. 
The other is that the introduction of new fabrics, par- 
ticularly the styling of cottons to look more and more 
like woolens, nas made it narder than ever for the lay- 
man to know vhat he is buying. I have seen so-called 
'cotton worsteds' which ore the most remarkable imita- 
tions of worsted cloth, yet which do not contain a 
single fibre that was ever on a sneep's back. When 
a line made from these cloths, advertised to be 'worsteds', 
is offered to the public, it is little 'wonder that the 
masses are taken in, and believe they are getting a sensa- 
tional buy, when really the whole transaction is a miserable 
sell. I feel I need scarcely say more on this topic. 
The concrete provisions of our article speak for them- 
selves. The purpose of them all is the same; that the 
purchaser shall be told what he is buying. In a word, 
we aim to give the public the same protection as it gets 
from the Fure Food Act.***" 

The following excerpts from a circular of tne Associated Wool Indus- 
tries are also of interest: (*) 

"WE CALL ATTENTION 

"1. To a resolution adopted by the Board of Directors 
of the National Association of Wool Manufacturers, 
February 5, 1935, as follows: 



(*) Circular of August 15, 1935. "Imitation is the Sincerest Form of 

Flattery" by Associated Wool Industries. (Men's Clothing Code Files) 



9782 



-126- 

"The use of a label on wool or part wool 
fabrics is not obligatory, but if in labeling 
or otherwise referring to such fr.brics the terms 
'100$ wool', 'all wool' or 'wool' are used, the 
following limitations must be observed. 

" ' 100p wool' and 'all wool' are synonymous 
terms and may be utilized only on fabrics made 
entirely of wool with a 2$ tolerance for foreign 
matter . 

"The term 'wool' when used without qualifica- 
tion may apply only to fabrics sometimes known as 
'commercially all wool', containing not less than 
95$ of wool ay weight, with a 2*fo tolerance. 

"The use of the v/ord 'wool' in reference to 
fabrics containing less than 95$ of wool by weight 
is prohibited unless a guaranteed percentage of 
wool by weight is stated. ***" 

"WE URGE 

our members to capitalize the superiority of 
WOOL by properly marking piece goods tickets to in- 
dicate the fibres used in the fabric. When the 
fabric is allwool or largely wool, this information 
should be given on the tickets, in accordance with 
the standards adopted by the Association. Not only 
is it worthwhile for the manufacturer to emphasize 
the wool content himself but he should urge and, if 
possible, insist that the dress, coat or suit manu- 
facturer do likewise. 

"The emphasis on the use of wool fibre will help 
to increase consumer demand for wool fabrics. It will 
help us also to successfully meet the competition of 
other fibres." 

6. Shrinkage 

The importance of proper marking of garments to show to 
what shrinkage treatment the goods have been subjected, is shown by the 
statement of Mr. Herman Moritz, of the Manhattan Cloth Finishing Company 
of New York City: (*) 



(*) Transcript of hearing on amendments to the Code of Fair Competition 
for the Men's Clothing Industry, held April 15, 1935. Fage 83. 
(Men's Clothing Code Files) 



3782 



-127- 

■ "The average piece of woolen material delivered 
by the mills to the manufacturers of men's, toys' and 
women's clothing contains from sixty to sixty-five 
linear yards. This means that in the average piece 
of material there are approximately one hundred square 
yards. 

"Wool is a live substance. Its natural tendency 
is to contract when exposed to moisture. Exposing it 
to the moisture of the air will cause it to shrink. 
For this reason, manufacturers have found it necessary 
to shrink the cloth made by them into garments. They 
realize that a garment made from un shrunk material can 
not possibly retain its dimensions. 

"There are two universal forms of shrinking. 
Ninety per cent of all woolen fabrics are shrunk by 
steam. Where material is placed in garments of very 
high value, and there is a desire on the part of the 
manufacturer to obtain the maximum of shrinkage, the 
serial is subjected to cold water shrinkage, which 
will reduce the fabric so treated at at least twice 
as much contraction as that which is obtained by steam 
shrinkage. 

"Shrinking materials by steam, which is called 
sponging, will' show a contracting in length and width 
of approximately 5 per cent. Cold wat er shrinking 
will develop a contraction of about 10 per cent. This 
rtitans that the average piece of woolen material contain- 
: originally one hundred square yards will be reduced 
irea by steam sponging to ninety-five square yards, 
jold water shrinking is employed, only ninety square 
.; . : Is will remain after shrinking. It is, therefore, 
■ent that the unfair manufacturer effects a saving 
. ' yardage which would be lost to him if the material 
were shrunk." 

Later in the hearing, Mr. Moritz stated: (*) 

"When you just spoke about a different method of 
shrinkage, other -than Sanforizing or sponging, it is 
cold water shrinking of linens and cotton goods." 

The Industry proposed the following amendment to the Code of Fair 
Competition for the Ken's Clothing Industry, on which a hearing was held 
April 15, 1335: 

Transcript of hearing on amendments to the Code of Fair Competition 
for the Men's Clothing Industry, held April 15, 1935. Page 92. 
(Men's Clothing Code Files) 



9782 



-128- 

"Schedule A — Froposed Amendments to the Code 
of Fair Competition for the Men s Clothing Industry. 

"7. No garment shall he manufactured of woolen or 
worsted material or of summer and washable fabrics, 
which have not been sponged in the piece." 

This amendment as approved by the Code Authority reads: (•*) 

"No men's or young men's garments shall be 
manufact\ired of woolen or worsted material, or of 
summer or washable fabrics, which have not been 
sponged in the piece." 

Excerpts from the statement (**) of Mr. Frank Stutz, Fresident, 
Better Fabrics Testing Bureau, call attention to the increasing use of 
unshrunk fabrics and also to the problem of stretchage. 

"*** Tnis habit of the garment manufacturing 
industry to cut up unshrunk fabrics is growing into 
an evil trade practice that must be stamped out, in 
order that the trade will return to the original 
system of conditioning wool fabrics before manufacture 
into clothing. 

"The test records of this Bureau, which is the 
official testing laboratory of the National Retail 
Dry Goods Association, a trade organization of 5,400 
stores, show that shrinkage of fabrics in consumer 
use, cleaning, pressing, or laundering is the biggest 
. probl'em of the consuming public today. It is an out- 
right fraud; selling unshrunk fabrics and garments to 
the consumer, because the customer cannot protect him- 
self against selection of stretched fabrics for the 
reason that it is impossible to determine whether a 
fabric has been conditioned until used. 

"The truth about shrinkage is that the problem is 
really one of stretchage. Unscrupulous fabric firms 
stretch their fabrics to gain extra yardage, and when 
the consumer presses, cleans or launders such fabrics 
the stretchage is lost, thereby creating a condition 
commonly called shrinkage. Actually, the fabric has 
simply returned to its original length and width, or 



(*) Transcript of Hearing on Amendments to the Code of Fair Competition 
for the Men's Clothing ■ Industry, held April 15, 1935. Page 69. 
(Men's Clothing Code Files) 

(**) Transcript of Hearing on Amendments to the Code of Fair Competition 
for the Men's Clothing Industry, held April 15, 1935. Pages 109, 
110 and' 111. (Wen's Clothing Code Files) 



9782 



-129- 

natural dimensions of the cloth. ***Every consumer 
is fully justified in asking sales people whether or n 
not the fabric in any garment has been pre- shrunk 
for normal service. If a merchrnt does not know 
whether his merchandise is serviceable or not, he 
has no right to serve as the purchasing agent for 
the consumer in his community." 

The statement (*) of Mr. Henry Moskowitz, Impartial Chairman for 
the Textile Examining, Shrinking and Refinishing Industry, both National 
and in the City of New York, gave his opinion as to the necessity of 
proper shrinkage of the cloth and the position taken on shrinkage by an 
important distributor of women's garments: 

**** "I desire merely to state that disinterested 
opinion has always regarded the examining and shrinking 
of ?/oolen and worsted cloth as an absolute necessity for 
its prorer conditioning before such clotn can be turned 
into a manufactured garment. ***" 

Mr. Moskowitz called attention to the following! 

"This is an advertisement of the Textile Refinishers' 
Association, Inc., of New York City, and refers to a 
letter from the J. C. Penney Company of New Terk City... 
(The Advertisement follows) 

"J. C. Fenney Company states: 

"'This organization has been exerting every possible 
pressure on the manufacturers supplying us with women' s 
garments made of woolens and worsteds to the end that 
all of these goods used in our merchandise be properly 
sponged and shrunk.'***" 

That facilities for the proper shrinkage and conditioning of the 
cloth, together with the organization to handle the work exists is brought 
out in the statement C.**) of Mr. T. R. Trilling of tne American London 
Shr inkers' Corporation: 

"*** 'What are the standards of shrinking and conditioning, 
as practiced today, and do they afford the proper protect- 
ion to the ultimate consumer? 

"As a member of the Committee of Standards, I can answer 
that question "briefly and concisely. Shrinking and con- 
ditioning, as performed today, has reached a standard of 

(*) Transcript of Hearing on Amendments to the Code of Fair Competition 

for the Men's Clothing Industry, held April 15, 1935. Fages 71, 

72, 101 and 102. (Men' s* Clothing Code Files.) 

(**) Transcript of Hearing on Amendments to the Code of Fair Competition 

for the Men's Clothing Industry, held April 15, 1935. Pages 97,98, 

99. (Men's Clothing Code Files.) 



9782 



-130- 

such efficiency and perfection that I can honestly 
say that such cloths, as are properly shrunk, can be 
positively guaranteed against any further shrinkage, 
in the ready-made garment, to within a shrinkage tol- 
erance of one per cent. *** 

"I can further state both truthfully and knowingly, 
that never in the history of cloth shrinking and condi- 
tioning has the Industry been so well organized and in 
s\ich an advantageous position to carry on the uniformity 
of the standards of shrinkage as is fulfilled today. 

"I will even go a step further and state that never 
in the history of clotn shrinking and conditioning has 
there been such a concerted action, consistent effort 
and definite move made on the part of any industry in 
the country towards the establishment of a scientific 
standardization of cloth shrinking and conditioning. 

"With the able assistance of the Better Fabrics 
Testing Laboratories, which is the official testing 
laboratory for the National Retail Dry Goods Associa- 
tion, and under the guidance of Mr. Frank Stutz, the 
highly .efficient managing director*, the committee on 
standardization hns' labored.' unceasingly and. conscien- 
tiously to bring about a standard of cloth shrinking 
and conditioning that we hope to have established and 
recognised throughout the width and length of the entire 
United States." 

Shrinkage has been one of the problems of the Cleaning Industry. 
Mr. George G. Gaubatz, Jr. analyst in charge of Research of the National 
Association of Dyers and Cleaners of the United States and Canada, with 
offices at Silver Spring, Maryland (*■)■ . writes as follows regarding 
their position: 

"In accord with your request after our conversation 
the other day, we are pleased to set down briefly our 
position as dry cleaners, on the question of shrinkage 
in men's suitings. 

"Shrinkage in men's woolens has never presented as 
serious a problem to the dry cleaner as has woolens in 
ladies' suitings and other similar materials. Cases 
where shrinkage has taken place in ordinary dry cleaning 
and finishing, have not been great in number, although 
there seems to have been a tendency in this direction in 
the last several years. Of course, when garments of this 
kind are sufficiently soiled to require a water or wet 
cleaning treatment, shrinkage is often encountered. 



(*) Letter to C. C. Eoyden, October 12, 1935. (Men's Clothing Code 
Files) 



9782 



-131- 

"In any event, it has long been our impression that 
cases of shrinkage in men's as. well as other garments, have 
in a large measure "been due in many cases to failure on the 
part of the manufacturer to properly .pre-shrink the material. 
This has been further complicated by the practice on the part 
of some manufacturers to actually r over-stretch the material 
in original manufacture, and it is to this practice, especially, 
that we feel the specifications should be aimed. 

"In other words', we, as dry cleaners, feel that speci- 
fications for proper pre-shrinking are most essential, but 
believe that these should also be so worded as to eliminate 
the practice of re-stretching the material after the shrinkage." 

The statements quoted above show the necessity for the. 'adoption of 
some "standard" method of marking garments, which would .show a guaranteed 
pre-shrinkage treatment. This could be accomplished by some satisfactory 
form of grading, as, for instance, 

"A" - for full cold water snrinkage. 

"B" - for steam treatment according to some definite procedure. 

"C" - to show some minimum treatment. 

D. Color-Eastnnss . 

— is self-explanatory and would ref er : to all phases of color- 
fastness to be expected from the fabric from which the garment is made,. : 
under ordinary wear and exposure. '• 

E. Labeling . ' 

La^ge, expensive labels are not necessary. It would be, suffic- 
ient to use labels large enough to be easily seen, on which size, fibre 
contents, quality of shrinkage and statement that the goods are or are 
not color-fast are clearly marked so that the purchaser will know what 
he is buying. 

In this connection, it is interesting to note the following: 

"Dr. D. E. Douty, Fresident of the U. S. Testing Co., Inc., 
speaking (*) before the_American Association of Textile 
Chemists and Colorists at the Chemists' Club in New York 
of 'Consumer Technical Information; Its Preparation and 
Distribution' : 

" 'In my opinion' , said Dr. Douty, 'the chief value of 
compulsory labeling lies not in the technical information 
given to and utilized by the ultimate consumer, but in 
the restraining influences it exercises over the producer 
and the direct obligation placed upon him in his relation ' 
to the regulatory agencies of the State and Federal Government.' 

(*) Daily News Record, New York, New York, 10-28-35. 
9782 



-132- 

"When the ultimate consumer is willing to pay the 
premium for quality insurance, just a s he does his 
life, fire or automobile insurance, he will obtain 
the protection willingly and readily. 

" 'He must be educated to the value of quality 
insurance', Dr. Douty declared." 

As indicating the great amount of work necessary to bring about the 
establishment of standards, the following is noted: (*) 

"Discussing the progress made to date in the movement 
to establish commercial standards for women's dress 
fabrics, in testing, reporting and rating for service- 
ability, William D. Appel, Chief of the Textile Section 
of the U. S. Bureau of Standards, in a brief address 
delivered before the October meeting of the New York 
section of the American Association of Textile Chemists 
and Colorists at the Chemists' Club on Friday night, 
stated that 25 sub-committees of the various scientific 
and lay bodies involved in the work were contributing 
their services in the effort to arrive at mutually 
satisfactory standards, but that 'seme weaknesses had 
been indicated and the need for much more work emphasized.' " 

Much work is being done by the various groups making up the differ- 
ent branches of the Industry looking towaid the standardization of their 
particular operations. It is also interesting to note that the United 
States Bureau of Standards is cooperating with various groups of manu- 
facturers, distributors, and consumers,' locking toward the standardization 
of size, measurements, shrinkage, color-fastness, and other criteria 
indicating quality of garments and other apparel. It is therefore 
reasonable to expect that at least some standards will be adopted by the 
Industry. 



(*) Daily News Record, New York, New York, October 28, 1935, 



9782 



-133- 

CHAPTER III 

PHE-CODE PROBLEMS OF THE INDUSTRY AND tfRITlFG- OF THE CODE 
I. FRE->CODE PROBLEMS OF THE INDUSTRY 

A . Decline in Value of Industry Product . 

In 1923 the value of men's, youths' and boys' clothing produced in 
the United States amounts 6 to more than a billion dollars. (*) Since 
then there has been a consistent decline in value of output, until the 
estimated value of production for each of the years 1933 end 1934 ap- 
proximated $450,000,000. (**) 

B. Productive Capacity of Industry . 

"America's Capacity to Produce", published bv Brookings Institution, 
quotes e correspondent to the effect that in 1929 the Lien's Clothing In- 
dustry worked 30 to 35 full weeks out of 52. The analysis made of rea- 
sons for the slack period is: SO per cent due to seasonal variation, 
and 40 per cent due to lack of business. This publication gives an 
operating ratio (men's and women's clothing industries combined) of: 63 
per cent, not adjusting for seasonal variations, and 85 per cent, ad- 
justing for seasonal variation. The 1923 Census places the operating 
ratio for the Industry at 73 per cent. 

The Brookings' study estimates that the per cent of practical capa- 
city utilized in the lien's Clothing Industry was 73 per cent for the 
period 1925-1929, and 76 ^er cent for 1929. 

C. Employment an: Hours (***) 

The lien's Clothing Industry, which is fairly "ell unionized, main- 
tains two practices with respect to work. First, there is generally 
practiced an eoual division of work in factories. Second, factories 
having contractual relations with unions usually provide for tenure of 
employment. That is, a worker is usually permanently attached to a 
factory, after a probationary period, and ma _r not be discharged except 
for cause. Because of these rules and due to the highly- seasonal 
character of the Industry, an estimate of employment must be based on 
the average number employed. 

(*) Bulletin of United States Bureau of Labor Statistics, No. 557, page 
33ff. 

(**) Letter dated January 18, 1935, from George L. Bell, Executive 
Director, Lien's Clothing Code Authority, to Deputy Administrator. 
(Lien's Clothing Code Files.) 

(***) Extracts from Affidavit of " r . S. vor Szeliski on Lien's Clothing 
Industry, September 21, 1934. Bases on comprehensive and fully- 
authenticated study by iiorris Kolchin. (Both in Lien's- Clothing Code 
Piles.) 



9782 



,* -134" 

In 1923, the highest number of workers employed by the Industry 
was loo, 771. Prom 192' T until 1^29, the Industry employed fever workers 
although the -ohvsical output was increasing. There were 147,595 workers 
employed in 1925 end 153,550 in 1927. Although the United States Census 
of Manufactures reports 12,926 fewer employed in 1929 than in 1923, some 
of this number probably/- rep.iained attached to the Industry. Therefore, 
it is reasonable to rsnume that half of the unemployed between 1923 and 
1929; that is, 6,4S3; remained attached to the Industry in addition to 
the 155,845 reported to oe employed at the height of the 1929 season, 
thus indicating an available labor force of 162,308. Since few workers 
are likely to have left the Industry since 1929, it appears that the 
number of workers attached to the Industry in 1933 amounted to around 
160,000. Also, since the greatest number employed in an v one month of 
1933 was 111,745 for February, the probable excess supply of labor un- 
employed (prior to the N.R.A.) in 1933 was around 48,000. ( *) 

It is generally agreed that the above estimate of totally unem- 
ployed in the Industry for 1933 is conservative because of the very sig- 
nificant migratory movement taking place in the Industry during the 
period in question. Plants moved or were discontinued in the large in- 
dustrial centers and became established in rural areas. Workers often 
did not follow the slants but remained idle while new workers were being 
trained and employed. It ras estimated that 12,926 fewer workers were 
employed ii 1929 than in 1923. In ITew York alone the m-imber of enroloyed 
declined. 9,150. Tae total reported unemployed for ^ew York and Chicago 
exceeded the indicated rational total, hence it is obvious that the 
estimate of 160,000 attached to the Industry in 1933 is small. There 
are not enough data, respecting the effect of plant migration on employ- 
ment to make a close approximation. 

It must be observed, of course, that the depression years not only 
resulted in less employment but also in less work for the enroloyed. The 
Bureau of Labor Statistics reported, more factories idle in 1932 than in 
1929. "The operating factories snowed a greater degree of under- employ- 
ment in 1932 than in normal years. In 1928 there were only 2.2 per cent 
of the workers who had less than 20 hours of work during the sample week 
and in 1932 almost four times as many, 8.7 per cent." 

D. 7fa~e s . (**) 

The wages of clothing workers for several years prior to the Code 
had been affected by the actual decline in wages and the decrease in em- 
ployment. "The actual nours of work declined 10 per cent from 1922 to 
1932, thus affording less earnings even if the hourly rates had remained 
the sajne. ."But the hourly earnings have adso declined. In 1922 the 
average hourly earnings were 72.8 cents and in 1932 only 50.6 cent." 

(*) Author's Note: This estimated was based upon 3.L.S. figures for the 
first five months of 1933. Census figures now available show an aver- 
age employment for 1933 of 119,253, the highest month being September 
with an employment of 131,648. 

(**) Extracts from Affidavit of 7. S. von Szeliski on Lien's Clothing 
Industry, September 21, 1934. Men's Clothir.^ Code Files.) 

9782 



-135-. 



Average annual earnings were thus unquestioncblv affected. 

"The downward movement of the earnings of the clothing workers 
outstripped all industries. It has boen continuous since 1923, so that 
even in the prosperous years the purchasing power of the workers was 
diminishing; with a decrease of 11 per cent in value of product from 
1925 to 1929 the payroll decreased 13 per cent. The average annual 
earnings during this period declined ah out 9 per cent. In 1923 the 
wages of the clothing workers were higher than the wages in all other 
industries combined, but in 1931 they were 15 per cent lower." 

A comparison of the movement of wages in this Industry with the 
cost of living, also shows up to the disadvantage of the wage earner. 
"During the ten-yea- period, 1923-1932, wages declined 45 per cent, 
whereas the cost of living declined only 2E per cent. Tims the index 
of earnings of the clothing workers in 1932, in terms of cost of living 
dollars, was about 00." 

S. Extent of Unionisation. 



One group in the Men's Clothing Industry, located principally in 
the urban "centralized" areas is almost entirely unionized, having 
working agreements with the Amalgamcted Clothing '."orkers of America. 
The other group, located mainly in the small cities and country areas, 
the "decentralized" areas, operate for the most part under working 
agreements with the United Garment 'Jorkers of America^ To the last- 
named, group belong a number of unorganized independent manufacturers 
who operate open shops. (*) !.Ir. Sidne-/- Hi 1 Irian, President of the -Amal- 
gamated Clothing "orkers, a.t the public hearing of July 25, 1933, testi- 
fied that the Industry was SO per cent organized. As is pointed out in 
Chapter IV, Code Administration — Organization and Procedure, the impor- 
tance of union influence in this Industry is recognized by the extent of 
representation on the ken's Clothing Code Authority. 

F. Home T, r ork . 

All proponents of codes for the .'en's Clothing Industry united in 
a common understanding that the practice of home work was vicious and 
demoralizing and should go. Mr. F. M. Curlee, of the Industrial Re- 
covery Association, stated in the July 25-27, 1933 hearing that "...both 
sides condemn this practice — all agree that it should be utterly stamped 
out at the earliest possible time. The practice lends itself to evasions 
and abuses, and is destructive of the reforms contemplated by the In- 
dustrial Recovery Act." 

"At the request of the Division of Research and Planning of 
the H.R.A., the Men's Clothing Code Authority in August, 1934, 
collected data with respect to the home work situation in the 
Men's Clothing Industry, before September 11, 1933, the date 
the Code became effective, and after its enactment. The 

clothing markets of Rochester, Pnilo^c'i vi'da, and, hew York are 

(*) "Statement - Industrial Recovery Association of Clothing Manufacturers J 1 
February 2, 1935, page 2. (lien's Clothing Code Files.) 

9782 



-136- 

represented in the data presented, which, while not complete, 
are accurate so far as they go. 

"In April, 1935, which was prior to the effective date of 
the Code, there were 7,310 home workers employed in the 
clothing markets mentioned. In August, 1933, there were 2,381 
home workers in the same markets; and in April, 1934, the 
amount of home work done was nil." (*) 

G. Profit Margins . 

Professor Nerlove's stud;'' of ore-Code conditions in the Lien's Cloth- 
ing Industrjr concluded with res'oect to profit margins in the Industry 
that: (**) 

"Treasury Department figures show the narrowness of these 
profit-margins even in prosperous years. In 1927 net in- 
come of corporations in the Leu's Clothing Industry was 
about 2.3 per cent of gross income; in 1923, it was ap- 
proximately 5 per cent; and in 1929, it was about 2.8 per 
cent. In view of the relatively high capital turnover of 
this Industry, these figures indicate that on the average 
the return on invested capital of corporations in this 
Industry was only between 5 per cent and 6 per cnet at the 
peack of industrial activity and national income, 1927 to 1929." 

"Both the number and the size of failures during these 
peak years were large. Dun's figures show that failures 
measured in liabilities of 'clothing and millinery firms' 
were approximately from 4 per cent to 6 per cent of the 
total number of failures measured in liabilities of all 
manufacturing concerns daring this period, 1927 to 1929, ' • 
whereas the value of product of this Industry was only 
1-g per cent of the value of product of all manufacturing 
industries in 1929." 

While the Men's Clothing Industry generally has been more stable 
from the standpoint of maintenance of investment and return on capital 
than the women's wear field, infinitely more sensitive to changing styles, 
it would appear that for various causes capital began a systematic de- 
cline in 1930, which continued until the fall of 1933 when the Industry 
was codified under the ERA. (***) 

(*) Statement prepared by the Code Authority for the Men's Clothing In- 
dustry, as a "Memorandum regarding Homework, " April 30, 1935. 

(**) Statistical and Economic Analysis Related to Sections II and V of 
"Code of Fair Competition for the Men's Clothing Industry" — Clothing 
Manufacturers Association of the United States of America., (Men's 
Clothing Code Piles.) 

(***) Remainder of this discussion of Profit Margins adapted from sur- 
vey of A. A. Fisher. See explanatory note on page 59. 



9782 



-137- 



In anticipation of effective date of G , ■■ d expected rise in the 
price of raw materials, particularly woolens, in the Spring of 1933 there 
developed a scramble of manufacturers to cover their anticipated re- 
quirement? for the ifell season. Thosf "acturers "it 1 ; sufficient 
capital, or credit, in April placed substantial orders with the distri- 
butors of piece goods against the trend of rising wool costs and tied 
up an unusual amount of crpita.1 in inventory. The usual practice there- 
tofore had been to buy fifty per cent of the estimated requirements in 
April for June and July delivery, and subsequently place fill-in orders 
as reouired. Those manufacturers, however, who in April, 1933, placed 
orders for woolens for one. hundred :>er cent of their season's require- 
ments for payment -within sixty days, or sixty extra for those with 
larger caoital, showed a satisfactory profit : r or the jrear 1933. This 
was due to the steadily rising price of woolens which enabled the manu- 
facturer, thus covered, to reap the advantage of a larger mark-up. The 
advantage, however, was relatively shortlived, for it built a substantial 
inventory at the end of 1933 Which in 1934 had to be sold at falling 
prices. During this period an advantage ultimatelv occurred to the 
manufacturer with limited capital who had been unable to acquire his 
full season's requirements at the lower cost of woolens.' He had been 
corn-celled, perforce, to buy in accordance with the former practice of 
making commitments in April not in excess of fifty per cent of his re- 
quirements, and, as the season progressed, paid the higher prices for 
woolens reouired during the balance of the season. The result r; as that 
while he did not make as much none:'- a.s his larger competitor in 1933, 
his mark-downs in 1934 were materially less. The small manufacturer 
who had stretched his credit to cover his total requirements in the 
Spring of 1933 lost money when the volume' of sales fell off in the 
latter months of that -"-ear, for he had to slash prices to rid himself 
of excess inventory in order to avoid financial disaster. The manufacturer 
with more substantial capital was affected by the same conditions "out 
was better able to absorb his losses through a carry-over of merchandise 
into 1934 and, with increasing demand, reduced his losses or showed a 
small profit in that year. Thus, generally speaking, the small manu- 
facturer with a capital of from $25,000 to $30,000, if careful in his 
purchases, made a little profit in 1933; the medium- si sed concern with 
a capital of from $50,000 to 100,000, which covered merchandise require- 
ments one hundred, per cent in April, sust; ined a ret loss for the -ear; 
while the larger concerns, with capital in excess of $100,00 were, with 
some exceptions, able to show a net profit at the year-end. 

Partial confirmation of the stated results may be obtained, by 
analysis of the breakdown of operating figures of 243 manufacturers. (*) 
Of 52 concerns operating with a capital less than $25,000, 49, or 79.03^, 
reported an average net profit of 2.91$, the remaining 13, for one cause 
or another, showing an average net loss in 1933 of 2.99;o. '.There capital 
of $25,000 and xco was employed, 167 concerns, or 52.273, reported an 
average net profit of 2.53 .>, while 14 others averaged a net loss of 
l.Q5,L (**) ■ 

(*) See Tables XVI and XVII. 
(**) See Table XIX. 



9782 



-138- 



A further breakdown of the entire r-roup in6_icated varying results in 
1933, as follows: (*) 

Net "Torth - 



No. of Cases 



Up to 


$2 r ,0C0 


$50,000 


$75,000 


Total 


$25, 000 


to 
$49 , 000 


to 
$74,000 


and up 




62 


98 


41 


42 


243 


315,535 


$35,510 


$51,780 


$154,429 


$55,502 


2.03$ 


n nr 1 

2. oo > 


1.97,5 


2.57$ 


2.34$ 


49 


89 


39 


39 


216 



No. Concerns 

Showing Profit 
$ of Concerns 

Showing Profit 79.03,1 90.32$ 95.12$ 92.861 88.89,1 

In considering 1933 operating figures, it should he kept in mind 
that the relatively favorable showing of high percentages of concerns 
reporting profits, however small, had these profits invested in year- 
end inventories, the losses on which were taken in 1934. The picture 
is better visualized from a study of three years' comparable results of 
229 identical manufacturers whose year-end statements submitted to the 
National Credit Office are summarized in the following composite review: (**) 

Net 7orth 1932' 

End of Year $14,026,270 

No. of Concerns 229 

Net Profit— Total -$1,439,009 

Rate of Return -10.3$ 

(Loss) 
,1 of Profit on Sales -3.5$ 

(Loss) 

$ of Concerns Showing Profit 37.6$ 

$ of Concerns Showing Loss 62.4$ 

That losses of recent years in the clothing industry have not been 
confined to the small or medium size manufacturer, but have been a heavy 
drain on most large and well-financed organizations, is evident from an 
examination of published figures of several large operators of "inside" 
shops. 

The accorapanving tabulation of profit ana loss figures of three of 
the largest and best known manu fa c turing-wholesalers in Chicago eloquently 
(*) See Table XVI. 
(**) See Table XV. 

9782 



1933 






1934 


$15,089. 


441 


$1! 


5,545,815 




229 




229 


$1,393, 


995 




$791,546 




9.2$ 




5.1$ 




2.7$ 




1.3$ 


• 


90.4$ 




78.2$ 




9.6$ 




21 . 8$ 



-139- 



testifies to the loss trend in the Industry, which began to manifest 
itself in 1930. (*) 

That there are outstanding exceptions to the loss record, without 
belying the indicated trend of diminishing profits, is evidenced by the 
record of annual net profits of one of the largest manufacturers — Rich- 
mond .Bros. Company, in Cleveland, Ohio — (**) which operates also a 
chain of retail shops, necessitating an investment of over $3,000,000 in 
fixed assets. 

II. TTRITII'G OF THE CODE 

On -August 26, 1933, the President, upon recommendation of the Ad- 
ministrator, approved a Code of lair Competition for the lien's Clothing 
Industry The provisions of this Code as approved are summarized as 
follows: 

Section I defines the term "Clothing Industry. " 

Section II provides a minimum rage o^ 40 cents oer hour in the 
northern section of the Industry, and 37 cents per hour in the southern 
section. Subsections a, b, c, d, e, and. f provide for the saf eouarding 
of differentials above the rnininum, prevent increases in amount of work 
to avoid benefits to employees, and authorizes the Code Authority to 
appoint a committee to supervise execution of the wage provisions. 

Section III abolishes home rork. 

Section IV establishes a 35-hour week for manufacturing employees 
and a 40-hour week for non-manufacturing emplo-/ees and provides for over- 
time in the subdivision of the Industry known as "tailoring-to-the-trade" 
and uniform manufacturers. 

Section V provider for the use of an F.H.A. label to be attached to 
all garments manufactured under the Code. 

Section VI forbids employment of any person under sixteen years of 
age. 

Section VII provides for compliance with conditions of sanitation, 
etc. , as specified in factor;/ laws of the respective states. 

Section VIII provides for collection and publication b" - the Code 
Authority of certain information. 

Section IX authorizes the Code Authority to aid in making equitable 
adjustments in respect to contracts entered into before the adoption of 
the Code. 

Sections X and XI provide against selling 1 below cost. 

(*) See Table XLVI . 
(**) See Table XLVI. 

9782 



-140- 



TA3LS XLVI 



Net Profit or Loss after ail charges /a °^ 3 la.rge Chicago Manu- 
facturers of Lien's Clothing. 

Alfred Decker 







Hart, Schaffner 






& Marx 


1935 




$ 273,824 


1934 


d 


668,259 


1933 


#d 


2,238,567 


1932 


d 


3,915,729 


1931 


d 


2,994,580 


IS 30 


X 


504,142 


1929 




2,514,576 


1928 




2,583,798 



d 
d 
d 
d 



B, 


, Kuppenheimer 




& 


Cohn, Ii 


& 


Company, 


Inc. 








$ 


25,735 




d 


$ 


182,570 




222,121 




d 




122,158 




776,980 




+d 




877,182 




138,314 




*d 




474, 103 




278,970 




d 




263,131 




641,016 








302,924 




514,892 








249,672 



d - Fet Loss 

# - Including $1,555,012 in respect of capital assests, etc., written 

off by subsidiaries liquidated during year and provision for antici- 
pated losses on capital assets, etc., of subsidiaries to be liouidated. 

x - After $1,000,000 reserve against investments. 

+ - Before $213,061 write-off of investments and advances. Additional 

reserves therefor and other charges and $150,000 contingency reserve, 
both charged to surplus. 

£ - Before $578,538 extraordinary charges carried to surplus. 



/a - Figures published by Fairchild's Financial Manual issued I. lay, 1935, 
pages 26 and 27. 

let Profits 
Richmond Bros. Co., Cleveland, Ohio Jjo 



1934 


$1,320,574 


1930 


$3,085,216 


1933 


1,719,551 


1929 


4,203,037 


1932 


1,460,379 


1928 


3,571,146 


1931 


2,025,639 







/b - Figures published by Fairchild's Financial L'ianual issued May, 1935, 
page 29. 



9782 



-1- bi- 



section XII prohibits scles on "consignment" and the practice of 
"cut, make, and trim. " 

Section XIII provides for the establishment of a Code Authority 
and confers upon it certain powers. 

Section XIV incorporates the mandatory provision of Section 7 (a) 
of the Act. 

Section XV states the President's rights to c; ncel or amend any 
provision of the Code. 

Section XVI provides that the National Association of Uniform 
Manufacturers shall be given administrative powers in respect to uni- 
form apparel. 

Section XVII provides for the eliminating or changing of codal 
orovisionc, with the approval of the President, shoulc circumstances or 
experience indicate the need. 

The lien's Clothing Code vas adopted after public hearings before 
Deputy Administrator Lindsay Rogers, and after numerous and prolonged 
conferences oetueen two groups Tr el!-organized but divergent in interests. 
The history of the pre-Code conferences and the issues drawn between the 
"oroponents of two separate codes for the Industry is well set forth by 
Deputy Rogers in his report on the Code. The following extracts from 
this report should serve our immediate purposes, although the entire re- 
port is bound, with the printed cop"' - of the approved Code: 

"For this industry two codes were submitted. One was pre- 
sented by the Clothing Manufacturers Association of the United 
States of America, and one by the Industrial Recovery Asso- 
ciation of Clothing Manufacturers. On July 19, 1933, the 
codes were published s,s submitted to the Administrator. Pub- 
lic hearings r 'ere held on July 26 and 27. rumerous confer- 
ences then took place between the interested, parties and the 
Administrator and on August 17, 1933, a code drastically 
revised by the Clothing Manufacturers Association was re- 
submitted to the Administrator and published.. This code is 
now recommended for approval. The delay resulted from the 
fact that there were material differences between the two 
codes in respect of the wrotection above the minimum which was 
to be afforded to semiskilled and skilled workers and in res- 
pect of the administrative machinery to carry out the provi- 
sions of the code. 

"A fundamental! difference in the points of view of the two 

Associations appeared in respect of Section VII (a). The 
code submitted, by the Clothing Manufacturers Association did 
no more than cuote the mandator;'- Drovisions of the National 
Industrial Recovery Act. On the other hand, the Industrial 
Recover:/ Association pro-oosed the addition to Section VII (a) 
of the following language: 'Employees not members of a 

9732 



-142- 



labor union shrll be free from interference, restraint, or 
coercion by any labor onion, its members or agents. Em- 
ployers and employees may bargain individually or collectively 
as may be mutual ly satisfactory to them. 1 The fact that this 
Code sought in effect to interpret and possible amend an Act 
of Congress discloses the principal reason why two codes '"'ere 
presented by the two associations in the lien's Clothing Indus- 
try. One association--the Clothing Manufacturers Association — 
is composed largely of union manufacturers. The Industrial 
Recovery Association is composed of non-union manufacturers. 
Immediately after the passage of the National industrial Re- 
covery Act there had been negotiations between the two asso- 
ciations looking to agreement on a single code but the nego- 
tiations had failed and in the hearings the associations were 
arrayed against each other. 

"'There is no difference between the hinds of clothing made 
by the manufacturers in the two associations. From testi- 
mony at the hearings it would appear that the Clothing Manu- 
facturers Association represents between sixty-five per cent 
(65,o) and seventy-five per cent (75,5) of the industry. The 
testimony, however, failed to disclose any valid ground on 
which it might be concluded that the minority association 
represented a subdivision of ^n industry within the meaning 
of the National Industrial Recovery Act (Section 3 (a)). 

"The real cleavage — which appeared clearly in the hearings — 
resulted from the fact that the Amalgamated Clothing TTorkers 
of America have collective agreements with the bulk of the 
employers in the Clothing Manufacturers Association, while 
the bulk of the employers in the Industrial Recovery Asso- 
ciation are non-union. It seems clear, however, that be- 
cause a. union has bean recognized by one group of employers 
and has not been recognized ~o~j another group of employers 
is no valid reason for dividing an industry into t v o parts. 
There must be one code for the industry and one agency to 
administer this code. The administrative agency must be 
absolutely neutral in respect of the cleavage' referred, to 
and must show a proper regard for the fact that adminis- 
tration in the large centers — particularly in respect of the 
manufacturer-contractor system — presents wroblems different 
from the problems of administration in other sections of the 
country where manufacturing is direct and where labor may be 
less skilled. Neither of the two groups — between which, as 
has been said, save for labor relations, only artificial 
divergencies of interest exist — should be in a position to 
dictate to the other group. 

"After the conclusion of the hearings, there were a number 
of conferences between representatives of the two associa- 
tions. It appeared, however, that no matter how extended 
the conferences became, it would not be possible for the 
two associations to agree on a single code. The Industrial 

9782 



1 I T 

— I. ... I 



Recover^ Association • i 1 ", '& its >.ro >s i ' iti f i S c- 
tion VII (a), but 0:1 wages above the minimum and on administra- 
tive machinery its representatives were .adamant . Indeed, they 
"ere compelled to be adamant because they die not have suffi- 
cient authority from the membership of their Association freely 
to negotiate. Under its b'--la: s, moreover, tae Industrial Re- 
covery Association refused admission to manufacturers v, ho had 
collective agreements with the Amal jai ;ed Clothing h'or!:ers of 
America and this it was argued nas an 'ineoui table restric- 
tion on admission to membership' within the meaning of the 
national Industrial Recovery Act (Section 3 (;.)). 

"In view of these circumstances, the wise course appeared to 
be for the Clothing Manufacturers Association to revise its 
code on the basis of the co. si derations adduced at the hear- 
ings and at subseauent conferences with representatives of the 
Industrial Recovery Association. Such a revised code would oe 
resubmitted to the Administrator. Discussions with labor re- 
presentatives on wages and hours would trite place and the 
Industrial Recovery Association 1 s members "ould be invited to 
give their approval to the ne ,v code as submitted and recommended. 
This -orocedui-e was followed. "he revisions r~s<:\ drafting ''.'ere 
greatly aided by representatives of important neutral factors 
in the industr - ", that is, factors which die not belong to 
either of the rroposii iciations. The revised code was 
resubmitted and published on August 16, 1933, and is herewith 
recomnend.ed for executive approval." 

"ith resrject to the controversies over 3ro _ oosed codal provisions, 
further attention is now called to certain outstanding differences 
between the Industrial Recovery Association and the Clothing Manu- 
facturers Association not elaborated apon in the extracts from Deuuty 
Rogers' report, although certain of these issues will be discussed more 
fully in sections of this Stud;/ '."here appropriate. 

The Industrial Recovery Association agreed to withdraw its -orooosed 
addition to the mandatory Section 7 (a) on the grounds th t such addi- 
tion was 'merely interpretive 1 ajid therefore unnecessary. 

Regarding the scale of wares above the minimum, the Industrial Re- 
covery Association '-ould. not yield beyond its recommended provisions 
that there be a minimum increase of 20 per cert in earnings of each 
class of workers but to apply onJr r to employees earning I-30.00 a week or 
less for full time employment prior to July 1, 193-'", and that no other 
wage rates than the lowest minimum (to be determined by the Administra- 
tor) be prescribed in the Code. The Clothing Manufacturers Association, 
on the other hand, had insisted that the Code provide a minimum for one 
of the advanced wage grouos (cutters. — at the race of 3(V- per hour), and 
tha.t "the existing amounts by which wages in the highe] — priced, classes, 
up to workers receiving 330 per wee 1 :, exceed ws -es in the lowest paid 
classes, shall be maintained." This difference of opinion was irrecon- 
cilable and v/as resolved only through Administrative action. This con- 
troversy is emphasized inasmuch as the views expressed here erqolsin in 
great measure the controversies which have developed respecting enforcement 

9782 



-14a- 

of wage provisions of the Code. 

In the matter of an agenc?r to administer the Code, the Industrial 
Recovery Association insisted to the last upon eoual rights with the op- 
posing Association, liven after the esta.bli shment of the Code, the In- 
dustrial Recovery Association addressed a letter to its nembershi-o ad- 
vising compliance with the Code but stating that such compliance is "not 
to be construed as an admission that the Clothing Manufacturers Associa- 
tion of the United States of America, the applicant for said Code, im- 
poses no inequitable restriction on admission to membership therein or 
is truly representative of the clothing industry of the United States..." 
Further consideration will be given this controversy in connection with 
Chanter IV — "Code Administration — Organization and Procedure." 

The Clothing Manufacturers As-ociation had proposed the mandatory 
use of labels with power of wi th.dra.wal given to the administrative 
agency of the Code. This provision was protected by the Industrial Re- 
covery Association as giving, unjustifiably, "the power of life and 
death over any institution. " 

A. Problems of the Industry Mot Covered 1 b~ r the Code . 

1. Trade Practices 

Both Codes originally proposed for the hen's Clothing Industry made 
some provision for the setting up of fair trade practices, especially 
with regard to sales terms and conditions, contracts, cancellations, 
and returns. There is little evidence but that the opposing groups 
could hsve agreed upon provisions covering these subjects; however, no 
provisions were adopted and the reasons therefor are set forth in deta.il 
in the discussion of fair trace practices. At the moment, it should be 
recalled that proponents of the Code showed an inclination and willing- 
ness to consult with industries which might be concerned before proposing 
definite trade practices. The Clothing Industry as a whole was anxious 
to get a code and there appeared no general insistence uoon the working 
out of complete details relative thereto prior to formal adoption of a 
code. This attitude is evidenced by the provision in Article XVI that 
the National Association of Uniform Manufacturers "shall make recom- 
mendations to the Administrator in respect of the trade practices desir- 
able for this branch of the Industry." 

2. Apprentices. 

As will be pointed out in connection with the labor provisions of 
the Code discussed, in Chapter V, there was evidenced within the Lien's 
Clothing Industry a considerable demand J or apprenticeship provisions. 
The Code as adopted, made no provisions for learners. The Industrial Re- 
covery Association urged that a certain latitude in the wage provisions 
be allowed in favor of beginners. This group rea.soned that outside of 
the congested centers of population women are largely employed and that 
during the depression years the supply of workers is depleted, b"" - marriage, 
death, and other causes, and that "with a return of recovery a large 
number of new recruits would be required," ( *) The opposing Trout) argued 
(*) Statement of Industrial Recover 11- Association of Clothing Manufac- 
turers, February 2, 1935, Page 10. 
9782 



•145- 



that the large reservoir of unemployed in the urban centers be absorbed 
bofore concessions he made for learners. The Administratis concurred 
in the latter view. There yet remains, however, the criticism that such 
a discrimination against the establishment of slants in rural areas. 

3. Differences in Industrial Technique. 

Doubtless the last-discussed problem, not solved by the Code, was 
only one aspect of the larger problem of the Industry which was mani- 
fested by the antagonistic views expressed by the two opposing groups 
in this Industry. The minority grouo in the Industry continued to in- 
sist most vigorously that fundamental technological and economic facts 
divided the Industry into opposing camps to which the Code gave little 
consideration. This minority group, when confronted with the possibility 
of additional classified wage scales in the Code, -orotested bitterly on 
the grounds that this would *»ork a hardship because of the nature of 
production in the decentralised areas. I.t was explained that "by neces- 
sity, due to lack of trained halp, the manufacturing operati~ns are 
divided and subdivided so that an;' unskilled person is able to perform 
after proper training, one minor operation; but such an employee had no 
facility or skill in performing other operations. In short, an operator 
in a centralized market, like Hew York, can handle with equal facility 
almost any tailoring job in a clothing plant. On the other hand, an 
operator in the decentralized markets is unemployable, except at his 
own operation." (*) 



Note: 



The above assertion respecting differences between two types of 
production in the Industry, if true, dov.btless should have been 
given adequate consideration in the drafting of provisions res- 
pecting the entire Industry. It should be noted that no evidence 
as to this matter exists in the Administration's files aside from 
bare assertions made by interested parties to the controversy. 



(*) Extract from Brief presented on behalf of the Bloch Co. against pro- 
posed amendments to the ken's Clothing Code, February 15, 1935. (Men's 
Clothing Code Files.) 



9782 



-146- 

CHAPTSR IV 

CODE ADMINISTRATION— ORGANIZATION AND PROCEDURE (*) 

1. MEHBERSHIP OP CODE AUTHORITY 

The Men's Clothing Code provided as follows for the establishment 
and organization of a Code Authority: 

"A board known as The Men's Clothing Code Authority shall 
be established, and for the purpose of effecting member- 
ship therein representative of the entire industry, such • . 
Board shall be constituted as follows: 

"Ten (3 0) members representative of members of The Cloth» 
ing Manufacturers Association of The United States of 
America, and 

"Five (5) members representative of employers in the 
Clothing Industry who are not members of The Clothing 
Manufacturers Association of the United States of America, 
shall be appointed by this Association. 

"Two (2) members representative of other employers may be 
chosen by the foregoing members. 

"Five (5) members representative of labor shall be appointed 
by the Administrator on nomination by the Labor Advisory 
Board. 

"One (l) member may be appointed by the Administrator." 

The above codal provisions were adopted after considerable con- 
troversy between the Industrial Recovery Association and the Clothing 
Manufacturers Association, and were largely the restilt of Administra- 
tive determination. The code presented by the Industrial Recovery 
Association recommended an Administrative and Advisory Agency, such 
Agency to consist of five members to oe elected. by the Industrial 
Recovery Association, and five members to be elected by the Clothing 
Manufacturers Association, and one member to be appointed by the 
National Industrial Recovery Administrator. The last-named member was 
to have no vote except in case of tie and was to act as chairman of the 
Agency. (**) 

To carry out the provisions of the Code, the Clothing Manufacturers 



(*) For a list o^ Division Administrators, Deputy Administrators, 
Assistant Deputy Administrators, and Aides, who served in 
connection with this Code, see Appendix B. 

(**) Printed copy of codes recommended by Industrial Recovery Associa- 
tion and Clothing Manufacturers Association (Men's Clothing 
Code Files.) 

9782 



-147r 

Association recommended the establishment of a Planning and Fair 
Practice Agency, to consist of the Executive Committee of the 'Clothing 
Manufacturers Association and that three members appointed ay the 
Administrator should have no vote. (*) 

With respect to the recommendations for establishment of a govern- 
ing "body in the Hen's Clothing Industry, Deputy Administrator Lindsay 
Rogers, in recommending the Code to the President, states: 

"When the codes we^e submitted to the Administrator, 
administration by a trade association was contemplated. 
The device of administration by a Code Authority had not 
yet evolved. The Code 'as recommended provides for a Code 
Authority, but with proper representation for divergent 
interests in the industry on a basis which "ill be discussed 
later in this report, and which it is believed will quiet 
the fears of the Industrial Recovery Association. » (**) 

The basis of representation contemplated and understood by 
Deouty Administrator Rogers, but not elaborated in the final codal 
provisions, is set forth more definitely in the latter part of his 
report to the President under the heading "Constitution of Code 
Authority." It is explained thati 

"Pive (5) memoers of the Code Authority are to be selected 
by the Clothing Manufacturers Association to represent 
manufacturers who are not members of that Association, i.e., 
the manufacturers "/ho pre members of the Industrial Recovery 
Association. These five (5) representatives will, it is 
believed, be more than the Industrial 5-ecovery Association 
is entitled to under the basis of the number of workers its 
members enroloy or the total annual value of production. 
Designation of these representatives vy the Clothing Manu- 
facturers Association will, it is anticipated., nut the 
responsibility on that Association to give the fairest kind 
of representation to the part of the industry which is not 
within its membership." 

The Question of representation on the Hen's Clothing Code Authority 
was not settled to the satisfaction of either the Administration or the 
industry. Although the codal provisions do not expressly require the 
anointment of members of the Industrial Recovery Association to the 
Code Authority, the members of the Code Authority representing the 
Clothing Manufacturers Association nave repeatedly invited leading 
members of the Industrial Recovery Association to assume memoership, 
but only two accepted. 



(*) Printed copy of codes recommended 'oy Industrial Recovery 
Association and Clothing Manufacturers Association. (Men's 
Clothing Code Piles.) 

(**) Printed Code No. 15, Page 11. 



9782 



'-148- 

Officials of the Hen's Clothing Code Authority, in explanation of 
the lack of representation of the Industrial Recovery Association on 
the Code Authority have called attention to the fact that Mr. Mark \J. 
Cresao, President of the Clothing Manuf r cturers Association of the 
United States, addressed a letter under date of August 18, 1933, to all 
members of the Industrial Recovery Association requesting nominations 
for membership on the Code Authority. Upon receiving few responses to 
this invitation, it is asserted that Mr, Cresao "did the next best 
thing" by selecting for personal invitation representatives from the 
Industrial Recovery Association whom i-,s membership had chosen for 
officials, with one exception. 

The men representative of the Industrial Recovery Association who 
were given personal invitation to sevve on the Code Authority were 
S. H. Curlee, L. L. Grief, Sol Heuman, J. Schoeneman, and George Henry. 
"Messrs. Heuman and Henry accepted f;he invitation, joined the Code 
Authority. . ..The other three men, Messrs, Curlee, Greif, and Schoeneman, 
refused the invitation." (*) 

The Administration on the ot-ner hand, without questioning the con- 
duct of the membership of the Cor\e Authority as originally constituted, 
granted tentative recognition to that Code Autnority with the under- 
standing of the need and intention of a future remodeling of the pro- 
visions for membership and representation. 

A * Formal Recogni t ion, and Sst-flblishuent of Code Authorit y. 

In accordance with coda\ provisions, on November 27, 1933, 
Administrator Hugh S. Johnson appointed B. H. Gitchell, formerly Deouty 
Administrator in the Apparel Section of the N.R.A. , to the place of 
Administration Member on tlie Code Authority. Mr. Gitchell served in 
this capacity until March 11, 1935, at which time he -e signed, giving 
the reason that the responsibilities as Chairman of the Dress Code 
Authority made it difficult to devote time required of the Administra- 
tion Member. (**) Even a year earlier on March 2, 1934, we find the 
Code Authority submitting a resolution to the Administration expressing 
satisfaction with the rtenresentative of the Administration, but point- 
ing out that his burdensome duties and assignments had retarded "the 
securing of -orompt anr'i decisive action from the National Recovery 
Administration." (***/) 

It is noted from minutes of the Code Authority's first meeting 



Memorandum-*, n Organization, Character, and Method of Selection 
of the Code Authority" (Men's Clothing Files) 

(**) Letter datfed March 3, 1935, to M. D. Vincent, Deouty Administrator. 
(Men's Clo thing Code Files.) 

(***) Bound Copy of Resolutions, March 2, 1934, Directed to 

Conference of Code Authorities. (Men's Clothing Code Files.) 

9782 



-149- 

that Deputy Administrator 'Lindsay Rogers attended as Administration 
Member* 

1. Recognition of Labor Members. 

Aside from the official appointment of the Administration Member 
on November 27, 1933, no formal recognition was accorded any member of 
the Code Authority until July 6, 1934, when ~ay Administrative Order five 
representatives of labor who had been serving on the Code, Authority , 
apparently since its inception early in September, 1933, were given 
approval. The omission of this act of formal recognition had been 
called to the attention of the Deputy administering the Code by the 
Labor Advisory Board. The labor representatives approved as members 
of the Code Authority were as follows: (*) 

Sidney Hillman, President, Amalgamated Clothing Workers 

of America. 
Hyman Blumberg, Amalgamated Clothing Workers of America, 

"Jew York City. 
Samuel Levine, Chicago Joint Board, Amalgamated Clothing 

Workers of Am°rica. 
Thomas A. Rickert, United Garment Workers of America, 

Hew York City. 
Abraham Gordon, United Garment Workers of America, 

! T ew York City. 

It is noted that Mr. Abraham Gordon, of the United Garment 
Workers, succeeded, on approval of the Labor Advisory Boa.rd, Mr. J. L. 
Wines, about June 15, 1934. Mr. Wines, a former executive of the 
United Garment Workers, had served on the Code Authority from 
September, 1933, until his death about June, 1934. 

2. Recognition of Industry Members. 

Despite formal approval of labor representrtives on the Men's 
Clothing Code Authority on July 6, 1934, the recognition of Industry 
members was not acted upon until October 19, 1934, through Administra- 
tive Order No. 15-36. In recognizing fifteen industry members and in 
approving their method of election it wa.s stipulated (not in Order 
15-36) that a plan of reorganization be submitted to the Administration 
within forty-five days. (**) 

The Code Authority gave consideration to this request and on 
November 3, 1934, by unanimous resolution asked that membership and 



(*) Administrative Order No. 15-16, appointing Labor 

Representatives to Code Authority, dated July 6, 1934. 

(**) Letter dated November 15, 1934, from George L. Bell, 
Executive Director, Men 1 s Clothing Code Authority, to 
M. D. Vincent, Deputy Administrator. (Ken's Clothing 
Code Piles.) 



9782 



-150- 

raethod of selection "be extended until June 16, 1935. (*) The reason 
given for this requested extension wa,s that the Act would probably be 
revised and amended and that changes would likely have a bearing on the 
question of membership of Code Authorities; hence, it was not felt 
advisable to take a definite stand rarior to such revision. U'obn this 
reouest of the Code Authority, S. H. Ourbacker, Assistant Deputy 
Administrator, recommended to Prentiss L. Coonley, Acting Division 
Administrator, that the membership of the Code Authority be extended to 
June 16, 1935, at the same time making the following comments relative 
thereto: (**) 

"This particular Code Authority has performed its functions 
admirably, and there have been no objections to the method 
of their selection or any of the Code Authority members 
brought to the attention of the Administration. The men 
making up this Code Authority are all representative of the 
industry, coming from various important markets." 

In turn, Mr. Coonley in memorandum of November 5, 1934, advised 
Blackwell Smith, Chief Counsel of H.R.A. , that: (***) 

"The Men's Clothing Code Authority has been functioning as 
a de facto Code Authority for many months. There has not 
been a single nrotest from any Industry Member regarding the 
personnel of the Code Authority Membership as constituted, 
and, from an administrative point of view, the present 
constituted Code Authority has functioned smoothly and well." 

"I believe that as a practical matter the Code Authority 
should be recognized as such, pending election of a new Code 
Authority in accordance with plans now being formulated and 
before the Administration. Failure to grant this recognition 
can only result in decreased confidence in the Code Authority 
and would necessarily be reflected in added difficulties in 
Compliance. " 

In compliance with the Code Authority's rectuest and in line with 
the above-quoted recommendation, Administrative 'Order No. 15-44 was 
promulgated, recognizing the following-named persons, i'n addition to 
labor representatives and the Administration Member already approved, 
as constituting the Men's Clothing Code Authority up to June 16, 1935: 



(*) Letter dated November 16, 1934, from George L. Bell, 
Executive Director, Men's Clothing Code Authority, to 
M. D. Vincent, Deputy Administrator. (Hen's Clothing Code 
Files.) 

(**) Memorandum dated December 12, 1934. (Men's Clothing Code Files.) 

(***) Memorandum dated November 5, 1934. (Men's Clothing Code Files 
under Code Authority Members.) 



9782 



Name I 

Karl: U. C re sap 
Chas. D. Jaffee 
Maurice Gordon 
Benjamin J. Lsbow 
Bertram J. Cahn 
Max L. Holtz 
Raymond H. Reiss 
Victor S. Riesenfeld 
Sol Heumann 
Frank C. Lewman 
George Henry 
Elmer L. Ward 
Louis A. Hirsch 
Rudolf Greef 

Louis Sus sman 



1 -151- 
Af filiation 

"art, Schaffner & "■ - 
Jaffee, Cohen & Lang, Inc. 
Trimount Clothing Co. , Inc. 
Lebow Bros. 

3. Kiippenheiraer Co., Inc. 
Louis Holtz & Sons, Inc. 
International Tailoring Co. 
Cohen, G-olcjnan & Co c 
Kelle"r s Heumahn, Thompson Co, 
Ri-chman Brothers 
II. A. Seinsheimer « Co. 
Goodall Co„ 

Hirsch, ffeintraub & Co. 
Greater Clothing Contrac- 
tors Association, Inc. 
The tiid&ishade Co. 



Address 

Chicago, 111, 

New York, N. Y. 
Boston, Mass 
Baltimore, Md, 
Chicago, 111. 
Rochester, H. Y. 
lieu York, II, Y. 
New York, II. Y. 
Rochester, II. Y. 
Cleveland, Ohio. 
Cincinnati, Ohio. 
Knoxville, Tenn. 
Philadelphia, Pa. 

New York, N. Y. 
Philadelphia, Pa. 



On January 2, 1935, George L. Bell, Executive Director of the Men's 
Clothing Code Authority, advised the Administration that Prank P. Zurn, 
of the Alco zander Co., Philadelphia, Pa. . was designated successor, to 
Mr. Sussman "by the Chairman of the Code Authority on March 2, 1934. It 
was explained that Mr. Sussman had resigned and that Mr. Zurn was 
appointed in his place as a representative of the Clothing Manufacturers 
Association. This belated notice of appointment was duly acknowledged 
by the Administration and approved December 28, 1934, by Administrative 
Order Ho. 15-46. The acknowledgment of the appointment explains that 
the Code Authority's request to change the records to make the appoint- 
ment stand as of March 2, 1934, could not be met "as the order approving 
this succession could not be made retroactive." (*) 

In connection with Code Authority membership, it should be pointed 
out that the Code provision, "Two members representative of other 
employers may be chosen by the foregoing members — " was never put into 
effect. TThile the matter would appear to have' been optional with the 
Code Authority, judging from the terminology of the provision, the Code 
Authority was asked by the Administration to take the question of 
electing two additional members under consideration. Administration 
Member B. H. Gitchell on June 14, 1934, advised Deputy Administrator 
M. D. Vincent that the cuestion "as considered "but it is being held 
in abeyance. .... If boys' wash suits should be transferred from the 
Cotton Garment Code to the Men's Clothing Code, it would mean that 
additional representation would be required on the code. Just as soon 
as this matter is settled the representation on the Code Authority will 
be finally completed." (**) 



(*) Letter dated January 7, 1935, from S. H. Ourbacker, Assistant 

Deputy Administrator, to George L. Bell, Exec. Dir. , Men's. Cloth- 
ing Code Authority. (Men's Clothing Code Piles.) 

(**) Letter dated June 14, 1934, from 3. H. Gitchell to Deputy Administra- 
tor M. D. Vincent. (Men's Clothing Code files.) 



9782 



4 -152- 

Approximately a year later, on May 14, 1935, the Executive 
Director of the Code Authority advised the Administration that action 
had been taken with respect to giving recognition on the Code Authority 
to single pants manufacturers. The Executive Director quotes from a 
decision of the Code Authority Executive Committee as follows: (*) 

"¥e are quoting 'below that portion of the summary of the 

minutes of that meeting having to do with the decisions of 

the Executive Committee on which we seek Administrative approval: 

"'The request of the National Boys' Pants Manufacturers 
,. Association, Inc., as transmitted hy Mr. J. E. Brill, that 
this Association he granted representation on the Code 
Authority, was discussed. It was unanimously decided that 
the Executive Committee recommend to the Code Authority at 
its next meeting that an invitation be extended to Mr. I. 
Wolrich, President of the National Boys' Pants Manufacturers 
Association, Inc. , to become a member of the Code Authority 
in his capacity as President of this Association, representing 
the single pants group.'" 

There is no record of Administrative action upon the part of 
N.R.A. officials with respect to this contemplated addition to the 
membership of the Code Authority. 

The question of tenure of membership on the Code Authority was the 
matter of some misunderstanding between the Code Authority and the 
Administration until temporarily settled by the Administrative Order 
granting extension of membership until June 16, 1935. On September 13, 
1934, prior to approval of industry members, Deputy Administrator 
Dean G-. Edwards wrote George L. Bell, Executive Director of the Code 
Authority, calling attention to the fact that terms of office had 
expired for ten members appointed by the Clothing Manufacturers 
Association September 6, 1933, to serve one year, and that a new election 
was in order. Deputy Administrator Edwards also advised that five other 
members had been appointed, two on September 6, 1933, two on November 
8, 1933, and one on December 8, 1933, but for whom no terms of office 
were mentioned. It was requested that a new selection of all fifteen 
members be arranged "specifying the terms of office (not exceeding one 
year) and in accordance with Code provisions and the policy of the 
Administration that Code Authority members shall be truly representative 
of the industry." (**) 



(*) Letter dated May 14, 1935 from Morris Greenberg, Executive 

Director, Men's Clothing Code Authority, to Walter E. Woodford, Jr.,. 
Assistant Deputy Administrator. (Men's Clothing Code Files, under 
Budgets and Assessments.) 

(**) Letter dated September 13, 1934, from Deputy Administrator 

Dean G. Edwards, to George L. Bell, Executive Director of the 
Men's Clothing Code Authority. (Men's Clothing Code Files.) 



9732 



-153- 

In response to Deputy Administrator Edwards' request for a new 
election of industry members of the Code Authority, Dpvid Drechsler, 
Secretary of the Code Authority, on September 27, 1934, re quested with- 
drawal of the certification of the list of members in which it was 
stated that the ten members were elected for a term of one year. (*) 
He explained that the Code placed no limitation on the terra of office 
and that the suggestion of one year came uc for discussion in 
connection with the writing of by-laws. That a one-year term of member- 
ship on the Code Authority had been definitely considered at one time 
is clear from a letter from Mr. Drechsler to the 1T.R.A. on April 3 S 1934, 
in which he states: 

"By-laws are now being written, in which the term of office 
of" each member of the Code Authority will be definitely fixed. 
Such term not to exceed one year from date of appointment." (**) 

3« Propos e Consumer Hopr:.nano. t lo n on C^do ^uthoi'it" .- 

Although no codal provision relates thereto, the Men's Clothing 
Code Authority gave consideration to the recognition of a "consumer 
advisory member" of the Code Authority. The minutes of the March .2 and 
3, 1934, meeting of the Code Authority report that an official of the 
Code Authority conferred with Mr. W. Jett Lauck of Washington, 
"recently designated as the Consumer Advisory Member of the Code 
Authority.". The Question of compensation arose and the matter was 
referred to the Code Authority. Members of the Code Authority expressed 
doubt as to the wisdom of paying a' Consumer Adviser from funds collected 
fr.om the Industry. The services of Consumer Adviser were compared 
with those of a government official and it was agreed that the Govern- 
ment likely would refuse permission to pay a Consumer Adviser from 
Code Authority funds. "The matter was left open for further considera- 
tion," but the records do not disclose further action., 

Certain Code Authority officials had previously expressed a keen 
interest in the possibility of consumer representation on the Code 
Authority. The following, extract from a letter of the Chairman of the 
Code Authority is of particular significance in that it shows a willing- 
ness to admit the reasonableness of a consumer voice in the matter of 
contemplated price advances. The opinion of the Code Authority Chair- 
man is indicated by the' following quotation: 

"My attitude on consumer member of Code Authority is that 
we cannot submit amendment to Code without meeting of Code 



(*) Letter dated September 27, 1934, from David Drechsler, Secretary, 
Men's Clothing Code Authority, to Deputy Administrator 
Dean G. Edwards. (l«en'*s Clothing Code Files.) 

(**) Letter dated April 3, 1934, from David Drechsler to II.R.A. 
(Men's Clothing Code Files under Code Authority Members.) 



9782 



-154- 

Authority nor do I think it is province of chairman to 
name member, ",/hat I did have in mind was that sending 
later action "by Code Authority we could suggest to 
General Johnson that consumer representative be designated 
to sit with us in Advisory capacity and later "become 
member of Code Authority and this action taken quickly 
would show readiness of clothing industry to cooperate 
immediately on subject of price advances. I think it 
would "be perfectly proper for us to suggest to General 
Johnson name of some conspicuous person truly representa- 
tive of consumer interests "but feel it would "be mistake 
to suggest anyone engaged in manufacture or distribution 
of clothing as. was done at time of our hearing.***" (*) 

The office of Code Records reveals that "by Administrative Order 
No. 15-39, dated December 6, 1934, Alexander Thomson was assigned to 
duty with the Men's Clothing Code Authority in the capacity of 
Special Representative of the Deputy. The files do not indicate the 
nature of the. duties performedo 

B. Code Authority Offi c ials, and General Organization '•■ 

The principal executive offices of the Code Authority were those 
of Executive Director, Secretary and General Counsel, and Comptroller. 

The Executive Director was charged with the general supervision 
of all activities of the Code Authority. He was responsible for 
contact with Washington on all affairs affecting the administration of 
the Code. This office was held until February, 1935, by George L. Bell. 
The announcement of Mr, Bell's selection for the position of 
Executive Director and the listing of his qualifications is found in 
the statement of Mr. David Drechsler "before the Code Authority, 
December 8, 1933: (**) 

"***The man chosen is George L. Bell. I found him 
acceptable to every one with whom I talked and I have 
talked to practically all of the members of the Code 
Authority. Mr. Bell is now with the Caterpillar Tractor Co. 
of Peoria. His background is all that could 'be asked for. 
He graduated from Harvard La.w School in 1912. He practiced 
law in San Francisco for a few 'years. He became a member 
of the Housing and Immigration Committee in California, and 



(*) Letter dated December 20, 1933, from Mark 7. Cresap, Chairman 
of Men's Clothing Code Authority, to David Drechsler, 
Secretary of Men's Clothing Code Authority. (Men's Clothing 
Code Piles, under Code Authority Members.) 

(**) Minutes of Fourth Meeting of the Men's Clothing Code 

Authority. (Men's Clothing Code Piles, under Code Authority 
Meetings. ) 



9782 



was counsel to that Committee. He was Secretary to the 
Nat ion§. Labor Policies 3c ird Ln U shington during the 
war. He tnen came on to Nevs York end oted as Impartial 
Chairman for the clothing industry, for something like 

two years. After that he went bs 3k to the Industrial Rela- 
tions work. He has been with the Cater filler Tractor 
Co. and acted as Vice President and Director for the last 
six or seven years.***" 

Upon the resignation of Mr. Bell, the Code Authority elected as 
his successor Morris G-reenberg, who has been recognized for several 
years as a technical expert in the Clothing Industry and who has been 
serving as Deputy Administrator in the Textile Division of the N.R.A. 

The Secretary and General Counsel of the Code Authority was 
charged with the keeping of proper records and minutes of Code 
Authority meetings and was general legal adviser to the Code Authority, 
handling all cases before the Compliance Council.. This office was 
held from the inception of the Code Authority by David Drechsler, a 
lawyer of twenty-five years' experience in New fork City, experienced 
in legal problems of clothing manufacturing, having been counsel for 
the New York Clothier's Exchange — an association of clothing manufac- 
turers. Mr. Drechsler was at one time a member of the New York State 
legislature. 

The Comptroller of the Code Authority was responsible for the 
control of finances with respect to both receipts and expenditures. 
Also, he was charged with the computation and analysis of statistical 
reports required of industry members; was responsible for investigators, 
and assisted the Executive Director in interviewing persons accused of 
code violations. This position was occupied from the establishment of 
the Code Authority by H. K. Herwitz, who had twenty years' experience 
in financial and statistical affairs; formerly connected with the Muni- 
cipal Research Bureau of Chicago; Vice-President in charge of statistics 
and financial research for the Amalgamated Bank in New York, and en- 
gaged in research for a New York brokerage house for five years. 

The Code Authority, for the execution of its functions, was to a 
certain extent departmentalized, although the matter of policy and 
course of procedure was determined for tne most part by standing and 
special committees usually appointed ~oy the Chairman of the Code 
Authority. The principal departments of the Code Authority were the 
Label Divisions, the Compliance Division, and the Statistical Division. 
The chief committees were as follows: 

Executive Committee 

Committee on Amendments and Interpretations 

Tne II (d) Committee 

Compliance and Enforcement Committee 

Finance Committee 

Labor Committee 

Committee on publicity 

Committee on P.elations between Manufacturers and Contractors 

Committee on Fair Trade Practices 

9782 



-156- 

II. COMPLIANCE PROCEDURE 

The actual handling of certain compliance cases, the methods 
employed and criticisms arising therefrom will be discussed some- 
what in detail in the chapter "Labor Under the Code." The present 
purpose is to describe in brief the machinery of compliance and the 
authorization by which the Code Authority took action on compliance 
cases in the first instance. 

Officially the Men's Clothing Code Authority was given authori- 
zation to handle "all complaints in the first instance" by memo- 
randum of January 22, 1C34, to Division Administrator A. D. White- 
side, in which Wilson Compton, Chairman of the Code Authority Or- 
ganization Committee, with the approval of W. H. David, national 
Compliance Director, states:* 

"The Code Authority Organization Committee, after consultation 
with the National Compliance Director, recommends that the Men's 
Clothing- Industry Code Authority be given temporary qualification to 
administer its Code including both Fair Trade Practice and Labor 
complaints in the first instance. 

"Since the District Comoliance Director has already 
been notified by Field Letter Ho. 28 that this Code 
Authority has been authorized to handle all complaints 
in the first instance, this approval is given 'nunc pro 
tunc. "' 

A memorandum was forwarded to W. K. Davis, National Compli- 
ance Director, by A« J. Altme5rer, Chief, Labor Branch of Compli- 
ance, on January 11, 1934, stating that the Code Authority was 
qualified to handle labor complaints in the dirst instance and 
that formal authorization should be recommended. This communica- 
tion, however, concluded:* v 

"As a matter of fact I am advised that notice has already been 
sent to the District Compliance Directors that this Code Authority 
is authorized to handle all complaints in the first instance. There- 
fore, formal authorization is only for the purpose of completing the 
record. " 



(*) Memorandum dated January 22, 1934. (ken's Clothing Code Files, 
uno.er Code Authority Committees. ) 

(**) Memorandum dated January 11, 1S34. (Men's Clothing Code piles, 
under Code Authority Committees.) 



9782 



-157- 

It is true that District Compliance Directors had been au- 
thorized by Field Letter No. 28, December 22, 1933, from the 
National Compliance Director, to "refer all complaints without 
time limit notice to the Lien's Clothing Code Authority" for the 
reason that Deputy Administrator B. H. Gitchell (Administration 
Member) "had instructed us that the Men's Clothing Code Author- 
ity is authorised to handle all complaints of violations of the 
Ivien's Clothing Code in the first instance." 

Deputy Administrator B. H. Gitchell, by letter of Decem- 
ber 19, 1933, had advised the National Compliance Director that: 

"***the Men's Clothing Code Authority is organized 
with proper labor representation and is functioning 
in such a manner that it would be appropriate to have 
all complaints referred to it without limit. "* 

Deputy Administrator Gitchell 's letter, above quoted, was 
in response to a suggestion from David D'rechsler, Secretary of 
the Code Authority, that a recommendation from Mr. Gitchell was 
awaited in order that the Code Authority obtain permission to 
handle its labor problems.* 

On February 12, 1934, Deputy Administrator Earl Dean Howard 
directed a memorandum to the head of the Code Authority Organiza- 
tion Committee, stating that the Code Authority had ample funds 
to carry on their work thoroughly, that qualifications of labor 
representation had been met, that the Administration was represented 
on the Code Authority, and recommending that authorization to deal 
with non-compliance cases be given the Code Authority. 

In the meantime, while this belated activity with respect to 
formal authorization of the Code Authority to be handle complaints 
was being indulged in, the Code Authority had already ji-oceeded 
to set up compliance machinery and was engaged in the actual hand- 
ling of complaints, apparently with the knowledge and approval of 
Administration officials. 



(*) Letter dated December 19, 1933, from B. H- Gitchell, Deputy- 
Administrator, to ".",'. H. Davis, National Compliance Director. 
(Men's Clothing Code Files, under Code Authority Committees.) 

(**) Letter dated December 9, 1933, from Dcvid Drechsler, Secretary 
of the Code Authority, to 1 Deputy Administrator B. H. Gitchell. 
(Men's Clothing Code Files, under Code Authority Committees.) 



9732 



-158- 

In the December 8, 1933, report of B. J. Cahn, Chairman of the 
Code Authority Compliance and Enforcement Committee, we find a 
statement of the Committee's understanding of its authority and 
obligations and the events leading up to the Administration's 
first official recognition of the Code Authority's compliance 
activity. The report of the Compliance and Enforcement Committee 
in part reads: 

"General Johnson gives to his Deputy the power to pass 

upon the ability of self determination of the part of a s 

Code Authority, where such Code Authority is fully 

equipped to secure compliance with labor- provisions of 

code and where such Code Authority provides for adequate 

labor representation. All complaints will then be 

adjusted within the industry and only such complaints 

as the Industry is unable to adjust, the Code Authority 

will refer for action to the Compliance Division of the 

N.H.A. 

"On Friday, December 1st, Mr. Robert Strauss of the Dis- 
trict Compliance Division, (not being familiar with the 
work of our Code Authority) in a telephone conversation 
with Mr. Drechsler asked tnat we send to the Compliance 
Division at the Custom House in New Yoric all com- 
plaints filed with us. Mr. Strauss was thereupon in- 
vited to visit our offices. On the following day Mr. 
Strauss called and conferred with Mr. Drechsler 
and Mr. Herwitz. A comprehensive statement was made of 
the organization of the Code .Authority, its compliance 
and enforcement committee and the manner in which investi- 
gations, reports, and adjustments were made by it. At 
the close of the conference Mr. Strauss requested a / 
written report upon which he could base his conclusion. 
Such report was made and filed with him on December 5th. 
(Copy annexed.) This report was submitted by Mr. Drechsler 
in person. I am informed that Mr. Strauss expressed 
complete satisfaction with the manner in which the com- 
pliance committee of the Code Authority handled its labor 
problems and was quite impressed with its entire set-up. 
It was his opinion that with the approval of the Deputy 
Administrator the Code Authortiy should continue as hereto- 
for." 

Procedure of the Men's Clothing Code Authority in the handling 
of complaints did not seem to be a matter for Administrative review 
again until around the middle of May, 1934, when in reply to a request 
from Assistant Deputy Administrator John R. Beecroft, the Comptroller 
of the Code Authority, H. K. Herwitz, advises as to the method used in 
handling labor complaints in detail, as follows;* 



(*) Letter dated May 11, 1934, from H. K. Herv/itz, Men's Clothing Code 
Authority, to John R. Beecroft, Assistant Deputy Administrator. 
(Men's Clothing Code Files, under Code Authority Committees.) 



9782 



— 1 p n — 

"As yon. are doubtless aware, the Lien's Clothing Code 
Authority makes investigation on complaint and on its 
oun initiative. We have at the present time approx- 
imately thirty investigators in the field, covering 
the important sections of the countr \ 

"The reports of the investigators with respect to a 
specific establishment are not confinod to the specific 
complaint hut cover all questions of observance or non- 
observance of the standards of operation sections of 
our Code. These reports, when 'received, are analyzed 
hy our report division and all computations as to de- 
ficiencies or underpayments are made in the office hy 
the accounting section of this division, 

"On the basis of the analysis of reports a statement 
is given to the firm, which is in violation of the Code, 
specifying in the fullest detail the nature of the offense, 
the amount of underpayment, if any, the period covered 
£ id other pertinent information. Opportunity is then af- 
forded to the firm charged with the violation to either 
maize written reply or to come in for a hearing at the 
offices of the Code Authority in ±Tew York. In some cases, 
we have arranged to have either I.ir, Bell, our Executive 
Director, Mr. Drechsler, our Counsel, or myself, hold 
hearings in other centers. Recently I.ir. Drechsler held 
hearings in Baltimore and in Cincinnati. 

"Failure to make adjustment either by letter or at personal 
conference, or at hearing, the firm is notified that if no 
settlement is reached, the case will then be certified to 
the national Compliance Board. 

"I am happy to state that relatively few cases have had 
to be referred to the National Compliance Board. We have 
been able to adjust by payment of the amount due or in 
some other satisfactory way, cases involving violation of 
standards of operation either after notification by mail 
or through our adjustment machinery, and we have relatively 
few cases referred to ~a:'hinyton on appeal. 

"The hen's Clothing Code Authority has never had regional 
industrial agencies. All matters have been handled through 
the office at New York. We have no branch offices. We 
have investigators in all important section, s but they are 
from time to time transferred from one territory to another. 
We do not permit investigators to make adjustment, interpre- 
tations, or decisions in the field. 



9782 



-160- 



"Ue have not adopted the method of regional agencies 
hecau.se we feel that all decisions should he made by 
a single agency so that the interpretation may he 
iniform in all parts of the country. " 

Assistant Deputy Administrator Beecroft appears to have been some- 
what skeptical of the compliance procedure of the Code Authority, "because 
a month subsequent to receiving the outline of methods employed, a memoran- 
dum relating thereto is addressed to the N.R.A. Legal Division, requesting 
an opinion at the same time saying:* 

"So far as I know, while official authorization has 
been granted the Code Authority to handle labor com- 
plaints in the first instance, I do not believe any 
method of procedure has been formally approved. This 
authorization was granted in Dr. Rogers' time, and is 
probably highly irregular according to our present re- 
quirements. " 

Whether or not the procedure in question was irregular, there is no 
record in Administration files that any further action was taken at this 
time. 

(a) Industrial Adjustment Agency Contemplated. 

It is a matter of interest that the Men's Clothing Code Authority, 
apparently at the suggestion of the Deputy Administrator in charge of the 
Code, gave some consideration to the possibility of compliance machinery 
of an "impartial" character. Evidence of this is found in a letter from 
the Executive Director of the Code Authority, which reads as follows:** 



(*) liemorandum dated June 9, 1934, from John R. 'Beecroft, 
Assistant Deputy Administrator, to Hilton Levy, Legal 
Division. (lien's Clothing Code Files, under Code 
Authority Committees, Trade Practice Complaints.) 

(**) Letter dated June 5, 1954, from George L. Bell, 

Executive Director, Men's Clothing Code Authority, 
to John R. Beecroft, Assistant Deputy Administrator. 
(Men's Clothing Code Piles, under Code Authority 
Committees, Trade Practice Complaints.) 



9782 



-161- 

"We have been giving further consideration to yours 
of May 7 and 14 regarding the creation of an Indus- 
trial Adjustment Agency with an Imperial Chairman 
to hear later complaints and disputes. 

"After discussing this matter thoroughly with our 
counsel, ue telieve that no such action is necessary. 
I think you and I have "both overlooked the fact that 
we proceeded under Bulletin #7, Part 3, Section III, 
and that we were granted the authority to receive and 
act on complaints in the first instance. Before we 
were granted this authority, we had made a formal re 
port to the Administration, as provided in that manual, 
setting forth the methods and required data. It seems 
evident, therefore, that the Administration approved 
of our general set-up and procedure, or we would not 
have teen granted the right to handle complaints in 
the first instance, " 

III. USE 0? LABELS 

Hie L'en's Clothing Code Authority from the beginning emphasized 
the importance of the latel a.s a device for raising funds and gaining 
compliance with code provisions. The former function of the latel 
will te discussed later in this chapter, in connection with the general 
financing of the Code Authority under the heading of "the Code Authority 
Budget." The procedure relative to the issuing and use of labels in 
connection with compliance functions is the matter of immediate 
consideration. 

The procedure in issuance of labels, and requirements respect- 
ing their use, was fully outlined in the September 25, 1934, letter 
from H. K. Herwitz, Comptroller of the Code Authoritj r , to Deputy 
Administrator M. D. Vincent. Following is a summary of such regula- 
tions: 



9732 



1- - Labels are issued to all manufacturers upon 
filing of signed application and statement of 
compliance. Additional iafor nation relating to 
character of shop as — inside chop or contract 
shop or both.— Is required Require siunature 
on order card indicating persons who are author- 
ized to order. Labels for r.-tocc on hand issued 
at the time ij.bei system \ a.s out in.Vj effect about 
October 10, 1933. ivlanufao triers required to maize 
a sworn statement of number of finished garments 
on hafid, Labels are issued only to manufacturers* 
Manufacturers who employ aontrap.tcr3 are required to 
furnish the labels to said contractors. 

2 - Labels issued cover a four peeks' production • 
period. No credit is eKtehded ana no accounts re- 
ceivable allowed. 

3 - LabiS required on each iidi v id ial' garment , that is, 
on a three-piece suit, on the coat, vest, and pants. 

4 - Code Authority, on Eecembcr 3, 1933, ruled that 
labels must be attached when suits are in the process 
of manufacture. 

5 - Code Authority does not withhold labels un- 
less the iJat/onal Compliance >nuicil or Administrator 
has ordered the Code Authority to- do so. 

6 - Code Authority does not authorize and give 
publicity to withdrawal of labels "unless ordered- by 
National Compliance Council of N.B..A. 

7 - Money collected from sale of labels deposited in 
bank designated by Code Authority and subject to 
withdrawal by persona designated by Code Autnority. 
All accounts of Code Authority are subject to inde- 
pendent audit and all employees of Code Authority 
covered by blanket surety bond. 

To the above-outlined label regulrtions should be added 
that in January, 1934, the Code Authority ruled that a manufac- 
turer failing to use labels should pay to the Code Authority 
one-half cent for the label he should have used, and one-half 
cent for what would have been the cost of attaching the label.* 



(*) March, 1934, .Report of Committee on Compliance and Enforce- 
ment of Code Authority. (Lien's Clothing Code Files.) 



9782 



-J.DO" 

The above regulations, agreed upon and ilaeed into effect by the 
Code Authority, appear to be entirely in heriaonv with codal provision?. 
relating to labels which are found in Section V of the Code, as follows: 

"All garments manufactured or distributed shall be,;r an 
U.S.. A. label, which shall remain attached to such garments. 
Such labels shall beer a registration number specially 
assigned to each manufacturer in the industry. The privi- 
lege of using such labels shell be granted and such labels 
shall be issued to any manufacturer from time to time en- 
gaged in the Clothing Industry upon application therefor 
to the Code Authority, accompanied by a statement of 
compliance with the standards of operation prescribed by 
this code. The privilege of using each labels and the 
issuance thereof may be withdrawn and cease or may be sus- 
pended in respect of an/- such manufacturer whose operations, 
after appropriate hearing by The hen's Clothing Code 
Authority and review by the Administrator, snail be found to 
be in substantial violation of such standards. Manufacturers 
shall be entitled to obtain and use such labels if they comply 
with the provisions of this code. 

"The Men's Clothing Code Authority may establish 
appropriate machinery for the issuance of such labels 
in accordance with the foregoing provisions." 

From the foregoing provisions it could appear that the Code 
Authority did not exercise the full measure of its authority in the 
important matter of suspending the right of use of labels to violators 
of codal provisions. The Code Authority awaited decisions of the 
Compliance Council before taking action in this matter in which it is 
rather clear that authority existed for direct action, although subject 
to review. 

While the Code Authority's label regulations appear well within 
the bounds of codal provisions relating thereto, it is not clear that 
they comply in every particular with Administrative Orders X-38 and 
£-135, issued May 28, 1334, and February 25, 1935, respectively, which 
set forth general label procedure and regulations. There is no 
evidence that label regulations were submitted for the approval of the 
Administration 



9752 



-164- 



in the time specified prior to promulgation \ s required "by Order 
X-38. Likewise, the charge for labels, as. in case of the penalty- 
charge mentioned above , was not approved "by the Administration, and 
^as in violation of both Grdar-s X-38 and X-135. 

Administrative order X-135, promulgated on February 25, 1935, 
required the drawing up of label regulations in accord with rules 
set forth therein. The Men's Clothing Coue Authority revised their 
label regulations and submitted them for Administrative approval 
under date of April 2, 1935. For the mostpart the old regulations 
were restated. The extent to which they fell short of official ex- 
pectations can be best set forth by listing certain criticisms made 
by the Label Review Officer of N.R.A. The criticisms, as follow, 
are significant in that they make suggestions for more adequate 
label control in the Men's Clothing Industry, based upon experience 
derived from similarly situated industries. (*) 

"There is no provision within these Regulations for 
the suspension or removal of labels, and no refer- 
ence to Administrative Order X-135. Inasmuch as 
this Code has never used the machinery provided for 
the suspension of issuance of labels, but has al- 
ways resorted to final action by the Compliance 
Council in the first instance, any reference to 
suspension of issuance of labels is probably 
unnecessary. 

"Paragraph VI T I of the Regulations states that the 
Code Authority delegates the oower to hold hear- 
ings, concerning any of the provisions of the Code, 
to the Executive Director. Is this the proper in- 
str ment for inci uding such a provision for dele- 
gation of power ' 

"Paragraph IX and the following paragraphs state that 
a contractor shall not be entitled to purchase or 
receive labels from the Code Authority, and that 
all such labels shall be furnished for him and sup- 
plied to him by the manufacturer upon whose work 
such contractor is engaged. I consider this an un- 
fortunate provision unless definite routine is pre- 
scribed and power delegated for the removal of the 
labels by the manufacturer from the contractor, on 
orders by the Code Authority, and the further stipu- 
lation that the manufacturer shall not receive any 
unlabeled goods from a contractor whose labels have 



(*) Letter dated May 3, 1935, from Dean G. Edwards, 

Label Review Officer of N.R.A. , to M. D. Vincent, 
Division Administrator. (Men's Clothing Code Files, 
under Insignia and Label Regulations.) 



9782 



-165- 

beon suspended or withdrawn bv direction of the 'Code 
Authority, it seems to rae that the la c ;t sentence 
of Paragraph IX does not sufficiently control the 
situation. In my opinion a "better control of the 
label situation, from the point of the Code Author- 
its, exists under the arrangement now in effect by 
the Coat and Suit. Code Authority and the Cotton Gar- 
ment. Code Authority. In these cases the contractor 
receives the labels direct from the Code Authority 
on ord^r countersigned "by the jobber, or some simi- 
lar procedure. In this manner the removal of labels 
is direct and co^cl isive and the jobber is under ob- ■ 
ligation to receive no unlabeled goods from his 
contractor. " 

The Code Authority's practice of making an extra charge for 
labels which wore left off suits by manuf act jrers, ' celled to the at- 
tention of the Administration by Administration Member B. H. G-itchell, 
although having previously apoeared in Code Author itv records as above 
indicated; wrs r.ade the subject of inauiry and explanation was re- 
quested of the Code Authority. (*) The Code Authority does not 
appear to have officially reported on this matter bat it should be 
mentioned, that no protests were made to the Administration concern- 
ins the penalty charge, and the Code Authority Committee on Compliance 
and Enforcement in its Inarch, -.193-1, report states that "the ruling' 
of the Code Authority has not been contested by any violator." - 

A. Label Publicity . 

The larch 2, 1934, report of the Publicity Committee- of the 
Code Authority states that the Committee had definitely decided against 
the furtn.r expenditure of money for oaid advertising of the label in 
anv media whatsoever. It was agreed that trade publication or news- 
paper advertising was futile unless followed up over a long period of 
time and unless sums larger than the Code Authority's total income 
were expended. The Committee - thereupon devoted its efforts to the 
securing of publicity by means .other than pa.id advertising. The Com- 
mittee called the Code Authority's attention to the National Garment 
Label Association campaign headed by Mrs. Franklin D.Roosevelt, which 
had as a plan the idea of enlightening -men and women, especially 
women, on the meaning of labels and the necessity for customers re- 
quiring' them on garments. The Committee, indicated its willingness to 
participate in a campaign of +his sort and suggested that a fair share 
of cost to the Code Authority might be around $10,000. Action on this 
plan was deferred but continued interest in cooperative action of the 
general type ■ suggested was maintained by the Code Authority. 



Letter dated March 5, 1935, from Assistant 
Depaty Administrator Walter E. Woodford, Jr. , 
to ...orris Grec-nberg, Executive Director, Men 1, 
Clothing Code Authority. (Men's Clothing- 
Code Piles. ) 

9782 



-166- 



In the June 8, 1934, report of the Publicity Committee of the 
Code Authority we find a protest against the stand of certain N.R.A. 
officials who are opposed to the use of Code Authority funds for 
labelspublicitv and who have doubts as to the propriety or legality 
of using such funds in publicising labels. It was agreed that the 
Men's Clothing Code Autnority should join with other' code authorities 
protesting this limitation. It is brought out in this Committee reoort 
that Administration officials advised that code authorities would 
have to cooperate in a proposal for the use of funds in this con- 
nection, with a budget subject to Administrative aporoval. The Com- 
mittee oro'oos'ed that the ken's Clothing Code Authority follow the 
lead of other large label code authorities in allocating two per cent 
of total jroposed budget exoenditures to a joint label publicity 
movement. 

Out of the above-indicated experience of the fen's Clothing Code 
Authority and that of similar label-using code authorities, there 
was evolved a olan for an Apoarel Codes Label Council. This Council, 
subject to Administrative control, was to be made up of representa- 
tives of code authorities subject to codes having mandatory label 
provisions. Joint action was to consist in the establishment of a 
central bureau of shoppers, and the education of customers in the 
meaning of the label. The aim was to secure publicity for the label 
activities of participating code authorities, "though without using 
paid advertising." This proposed Apparel Codes Label Council had not 
as yet received official approval when the Executive Director of the 
Men's Clothing Code Authority, on January 18, 1935, wrote Assistant 
Deputy Administrator S. H. Ourbacker that since such a plan had the 
endorsement of the Administration the Code Authority reauests aporoval 
of budget expenditures under that heading, pointing out that the 
Council was organized November 1, 1934, and that the Code Authority 
had 3aid $600.00 per month for the months of November and December and 
had set up in the proposed budget for the first six months of 1935, the 
sum of $600.00 per month for the same ouroose, 

B. Label Compliance . 

The March 2, 1934, report of the Committee on Compliance and 
Enforcement of the Men's Clothing Code Authority' states: "about the 
middle of Januarv (1934)' it. became apparent from the original survey 
that a considerable number of manufacturers and contractors were fail- 
ing to use the labels from the Code Authority. In order to correct this 
situation, practically the entire staff of investigators were concen- 
trated on a check-up of labels. The result's have been very gratifying." 
The Committee goes on to explain that at this time was instituted the 
rale providing an additional cost for attaching labels which had been 
left off suits. The September 14, 1934, report of the Executive Direc- 
tor of the Code Authority states that "the number of reports of fail- 
ure to use labels had rapidly decreased until today we have only rare 
instances where investigators discover an absence of labels." 

C. L abels -f or Unif orm^femrfaj^jirers^ 

The Men's Clothing Code Authority made special arrangement whereby 
9782 



-167- 



the Uniform Manufacturers, a serai-autonomous group and r the Cole, 
co aid sapervice the distribution of their own labels. This arrange- 
ment and reasons therefor arc explained in the following excerpt from 
the report of the Label Committee, dated November 8, 1933: (*) 

"The Label Committee estimates that not more than a 
million and a half labels mould be used on uniforms 
daring the current year. Sales of such a number of 
labels would bring a gross income of $?,500 and 
a net income of approximately $6,0u0.00. Off- 
setting the net income of $5,000.00 would be an 
expense of, in the opinion of the label commit- 
tee, between -115,000.00 ar.d $2^,000.00 to ade- 
quately police the -uniform industry b cause of 
the large number of indivld lal manufacturers. It 
is therefore concluded an agreement w.th the Nation- 
al Association of Uniform Manufacturers whereby 
labels arc sold to the Association at cost. The 
National Association of Uniform I anufncturers oavs 
the hen's Clothing Code A-tnori*-y $125.00 per month 
for the necessary clerical work. The National As- 

' sociation of Uniform ! ^-nufacturers sells the labels 
to uniform manufacturers at the regular price of 
$5.00 per thoasand, re^ainin? the lifference to 

■ oay for the cost of administering; and enforcing 
the Code amor_~ uniform manuf '■ ct orers. " 

The National Association of Uniform i anuf act jers created an in- 
tra-codal compliance problem around Larch 15, 1P34, by increasing the 
price of labels from $5 per thousand to $12.50 per thousand for the 
regular label and $15 per thousand for the uniform label. This action 
was explained as necessary due to *"he precarious financial state of 
the Association. (**) The Code Authorit-r did. not. aprrove this in- 
creased charge for labels and uoon ins + r actions from Washington the 
National Association of Uniform Manufacturers immediately reduced the 
price to- $5. 



(*) Report of the Label Committee of the len's Cloth- 
ing. Code Authority, November 8, 1933. (lien's Cloth- 
ing Code Files, under Committee Reports. ) 

(**) Letter dated June 5, 1934, from Harold W. Schwab, 

Executive Secretary, National Association of Uniform 
Lanuf act orers, to John R. Seecroft, Assistant Deputy 
Administrator. (hen's Clothing Code files.) 



9782 



-168- 
D. Retailers' Labels. 

The use of the Hen's Clothin t Code label, or. goods manufactured 
prior to the effective date of the Code, f?s protested on September 20, 
1933, by R. H. Macy & Company of he'-' York City, as misleading and as 
likely to lead to malpractices in the hen's:-: Clothing Industry and others. 
(*) This protest was acknowledged o^ Deputy Administrator Rogers, who 
state. , "I agree with you that for the labels to re?d 'Manufactured 
under the Lien's Clothing Code Authority' is misrepresentation and I have 
so informed the Code Authority." 

Label sales to retailers for goods in stock" and transit assumed 
considerable proportions. A reference to the Table XLVII on page 179 
showing label sales and values, reveals that from September 6, 1933, the 
beginning of sales, through the quarter ending June 30,1934, retail 
labels were sold in the amount of 3,242,617, returning to the Code 
Authority $16,213.12. The bulk of these labels, as would be expected, 
were sold in the early period of the Code Authority operations. The 
Chairman of the Label Committee of the Code Authority reported that up to 
December 7, 1933, retailers numbering 1,045 had applied for labels and 
that many of the orders received were for chain stores. 

There appears no definite authority under which the Men's Clothing 
Code Authority sold labels to retailers as such. The Retail Code, which 
was signed by the President on October 21, 1933, and which became 
effective the second Monday thereafter, provided that goods produced 
under Codes requiring labels must have such labels attached when pur- 
chased by retailers. Public opinion alone in its demand for label- 
marked goods at the outset seems to have given both the authority and 
means for selling labels to retailers. As a practical problem, had not 
such sales been made, a compliance problem could have developed from 
the impossibility of differentiating between goods ma.de under codes and 
those already in stock or in transit. 

3 . Reduced Price of Labels for Children's Suits 

The Executive Director of the Men's Clothing Code Authority advised 
the Administration on December 27, 1S34, that the Label Committee agreed 
with the Code Authority's approval that certain suits and garments com- 
parable with those manufactured under the Infants' and Children's '.Tear 
Code be allowed labels at $3 per thousand instead of the usual charge of 
$5 per thousand. Administrative approval was requested. This matter was 
noticed for objections from January 21, 1935, through February 11, 1935, 
as a possible alteration in the budget. The files show no criticisms 
or objections to the proposal to charge $ r/ . for labels to be used on 
children's suits. Prior to the time when official sanction could be given 
this new label charge, the Administration approved a plan for continued 
sale of labels at $5, "upon the agreement to impound $2, to be refunded 
to the purchasers of such labels if and -.'hen the final order for' the new 
budget is approved, fixing the new label charge . " (**) 



(*) Telegram dated September 20, 1933, from R. H. Macy to Administrator 
General Hugh S. Johnson; (Men's Clothing Code Piles). 

(**) Letter dated Jan. 9, 1935, from S. H. Ourbacker, Assistant Deputy 

Administrator, to George L. 3ell, 3xec. Director, Men's Clothing Code 

Authority. (Men's Clothing Code Files.) 

9782 



-169- 

Under date of February 11, 1935, Executive Director Sell reminded 
the Administrator thr 1 raanufact-arers -ere eornplaining about I e ira r>und- 
ing of the $2 differential and that "a., soon as the budget can be acted 
on^.ve should have specific directions from you permitting the sale of the 
labels direct at $3 per thousand." 

P . Proposed deduction of Label Char^ for Single Pants . 

Some time after the Code Authority's actio:: respecting a reduced 
.charge for labels for children's garments, the issue of a preferred rate 
for labels on single nants arose. Administrative approval was requested 
of the Code Authority's decision, described by the following extract 
from the minutes of the Executive Committee: (*) 

11 ' The Executive Director brought up for consideration the re- 
quest made by I'.v. J. E. Brill, representing the National Boys' 
Pants Manufacturers Association, Inc., for a reduction in the 
price of labels on single ants, which request v/as referred 
to the Executive Committee ~oy the Code Authority at its meet- 
in. on April 1", 193h; After much discussion it was unanimous- 
ly decided that the Code Authority issue a special label for 
use on single ants only, to be sold at the price of two 
dollars ($3.00) per thousand; that this -rice be made retro- 
active to a-; ly on all labels sole to single pants manufactur- 
ers for use on single pants on and after April 15, 1933. '" 

IV. THE BUDGET 

The Men's Clothing Code Authority first ras.de definite plans for the 
submission of a budget for Administrative approval around the first of 
June, 1934. The Executive Director, in reporting to the Code Authority 
at that time, called attention to the Administrative Order applying to 
the use of labels, which was "to become effective June 13, 1934," stat- 
ing that one of the requirements oi the Order is that the Code Authorities 
concerned should submit a budget. (**) Ee concludes': "'"e have been in 
hearty accord with this requirement, ana the b >t for the remainder of 
the year will be submitted today for consideration." (***) 



(*) Letter dated hay 14, 1933, from horrid G-reenberg, Executive Director 
of the Lien's Clothing Code Authority, to waiter E. Voodford, Jr., 
Assistant Deputy Administrator. (Lien's Clotnin^ Code Piles, under 
Budgets and Assessments.) 

(**) The Executive Director is referring doubtless to Administrative Oi-der 
X-38, signed May 13, 1934, -?.nd which became effective 15 days there- 
after. 

(***)Code Authority He-'ort of Executive Director, June 8, 1934. (hen's 
Clothing Piles. ) 



9733 



-170- 

A more detailed explan ,tion of the delay in submitting a budget 
for Administrative approval is found in a. letter of Kay 17, 1934, 
directed to the Assistant Deputy Administrator in charge of the Code, 

which reads in part as follows: (*) 

"Together with the other Code Authorities that issue labels, 
we have been withholding t le transmission of our budget 
pending the issuance of the proposed regulations covering all 
Code Authorities issuing labels, ~s the drafts of the pro- 
posed regulations have specific clause- dealing with budget 
requirements and report^ of expenditures , -and we wanted to 
be sure that our budget would conform with these regulations, 

"We now understand that these regulations will be finally 
decided upon within the next few days, and promptly there- 
after we shall file with you our budget together with the 
report of our expenditures to date, and a. statement as to 
the plan for raising the requisite money through the 



Prior to the above-indicated plans for the submission of a budget 
the Code Authority as reported by its Finance Committee on Kovember 8, 
1933, and on June S, 1934, had made plans for independent audits, had 
covered employees for a blanket surety policy and had provided for the 
safe- keeping of funds in various bank accounts, jiving right of with- 
drawal to only properly-authorized officials. 

The first official Administrative recognition of the budget is 
found in Order hoi 15-35 dated October 13, 1934, and covers a notice of 
opportunity to be heard on the budget period from July 1, 1934, to 
December 31, 1934. The total amount for the period was $225,000 and 
it was proposed that labels be sole 1 at the rate of 35 per thousand. 
Earlier, on September 14, 1934, the Executive Director advised the 
Code Authority that the budget in general had been approved, but that 
certain additional information was desired by the Research and Planning 
Division of 1T.R.A. This information appears to have related to al- 
location of funds for label publicity and to duties, salaries, and back- 
ground of the Code Authority officials. The controversy concerning 
the use of funds for label publicity lias been discussed above under 
the heading "Labels." 

On January 9, 1933, by Administrative Order 15-49, the budget for 
the period July 1, 1934, to December 31, 1934, was approved. The 
total amount provided in the budget was $225,000 and a label charge 
of S5 per thousand was approved. The approval of this budget attached 
certain provisos as follows: The Code Authority must submit not later 
than January 31, 1935, a report with reference to (a) the more econom- 
ical administration of the code through consolidation of Administrative 
agencies whereever practicable, and (b) such other economies, in local 
and national administration as appear desirable. It was further pro- 
vided that the Code Authority commence a study and report on the 



(*) Letter dated May 17, 1934, from George L. Bell, Executive Direc- 
tor of the Hen's Clothing Code Authority, to John R. Beecroft, 
Assistant Deputy Administrator. (Men's Clothing Code Piles, under 
Budgets and Assessments.) 



97R2 



-171- 

equitability of the present system of label c tar ;es, — consideration 
to be given volume of business dene in various ">ric ' es, etc. The 
Code Authority \ r i ) I -• ■ ■•'- ■ PS t bmifc a 

jet, in proper form covering o era.tions. subsequent to this budget, 
net later than Janu ry , I 5. It was further provided that S3, 600 
collected under this bu '. for the ir -e of 1 be] v rtisin; to 
be held in trust subject fo further oder oi the H.I.R.A. 

The Dudget plan for the last half of 193' nd the basis of 
assessment was extended Janu ry S, , Order Mo. L5-5 , pending 
further order. This extension v/as "on a pro rata basis" subject to 
conditions contained in the Order approving the July 1, 1934 — December 
31, 1934, budget. This action was requested by telegram of January 2, 
1933, by the Code Authority, in or r t time might be had for sub- 
mission of a new budget to cover the first half of 1935. 

Shortly after the extension ^J the b ' ■■ t on a pro rata basis, 
the basis of contribution, i. e., the label charge , was noticed 
for hearing under Administrative Order No. 13-55, dated January 33, 
1955. dor the guidance of the Administration, the views of members 
of the industry and all others concerned were desired relative to the 
proposal to charge $3 ^er thousand for labels to be used on the 
following children's garment ;, - Labels to be sold at 35 per thou- 
sand for use on all jther garments: 

Rugby Suits 

Eton Suits 

Reefers 

Overcoats 

Knickers 

Eoys ' long pants suits 

Topcoats and overcoat.; 

Mackinaws 

In compliance with the Administration's request both in respect 
to previsions of Administrative Order :!o. 15-49 and a reminder tele- 
gram from Assistant Deputy Administrate] Ourbaclcer on January 15, 1935, 
the Code Authority submitted to the Administration around January 15, 
1935, a budget covering the first six months of 1935. Accompanying 
this budget were extracts from the minutes of the Code Authority's 
Executive Committee which read as follows: 

"Further discussion was had concerning the budget for the first 
six months of 1935, and it was decided unanimously that, although 
an amended budget may have to be filed later on, there should 
now "be submitted a budget with an estii net income from the 
sale of lace 1 .- of 3180,000 for the sin months' period from 
January 1, to July 1, 1935, or an average of $50,000 per month. 

"It was also unanimously decided, that the budget submitted at this 
time for the first six months of 1935, with specific allotments 
mired, be for a total of $180,000. In the allotments of the 
various functions as required in the budget form of the Admini- 
stration it was decided that the present actual rate of expenditures 



3732 



sir.es 


4 to 10 


it 


••', to 10 


ii 


3 to 10 


« . 


:: to 10 


ii 


G to 16 


ii 


10 to 16 


n 


11 to 15 


ii 


6 to 16 



-172- 

"be set. out, the total of which will avr-roximate $39,0 T) average 
per month, and that the balance between that average per month 
' and $30,000 "be entered as a reserve for oontingencies, such as 
hearings on proposed amendments to the Code, hearings on inter- 
pretations, etc., for legal expenses and retainer of attorneys in 
connection with litigation that may "be instituted, research study 
and general unforseeable incidentals." 

An examination of the proposed budget for the first six months 
of 1935 shows no change in the Code Authority'.: estimate for the need 
of funds as compared with the last si:; months of 1934. Both budgets 
estimate a net total sum of $130,0 X) for each of the respective periods. 
The matter of "equitability of label charges" already reported 'on to 
the Administration as above indicated, is specif ically. allowed for... 
in the new budget in estimating revenues upon the basis of $3 labels 
for certain children's wear. (Also see below under Cost of Cede 
Aut ho r i t y to t he I ndus try.) 

A summary of the issues in this budget problem as outlined on 
February 28, 1935, by an Administration official to the Assistant 
Deputy Administrator in charge of the Code, will present the chief 
points and types of criticism which actuated Administrative conduct 
in this matter. (*) The survey points out: 

"The Lien's Clothing Code was adopted on September 6, 1933, and the 
Code Administration organized thereunder carried on its affairs 
without an approved budget from September 6, 1933, to June 30, 
1934. A budget was submitted covering the period from July 1, 
1934, to December 31, 1934, and formal approval of this budget 
was given on January 9, 1335. do formal a; roval has been given 
for any subsequent budget for the period after December 31, 1934, 
or for a budget covering the period from September 6, 1933, to 
June 30, 1934. 

"An audit report has been submitted which indicates income re- 
ceived and expenses incurred for the budgetary period from 
July 1, to December 31, 1934. These incurred expenses for this 
budgetary period a.re in excess of the budget provisions in t.ie 
total amount of $6,058.56." 

The author of the above goes on to argue that iundamental theory 
on budget expenses "resupposes that actual or incurred expenses must 
conform to the previously-determined amount provided for in the budget, 
thus building up a case in favor of withholding funds which have been 
saved on certain items, as against "aging them our on certain accounts 
which overran the budget estimate. He conduces that four problems 
stand out in the Men's Clothing Code Authority Budget, as follows: 

(1) The accounts payable a.s of December 31, 1934* 

(2) The revision of the budget for the period July 1, to Decem- 
ber 31, 1934, to include all incurred expenses over and above 

t he app roved budge t . 

(*) Memorandum dated February 28, 1932, from 3. L. Iberts to 

■Assistant deputy Administrator Walter E. Woodford, Jr., (Hen's 
Clotni'ng Code Files.) 

9782 



-173- 

(3) The submission of a budget and an audit for the period 
Sept ciber ', 1933, to June 30, 1934. 

(4) Bucket for period after December 31, 133' . 

3*01 loving, ir a s i lary of the remarks made res lecting the four 
problems abover-out lined: (*) 

(1) Suggests that all items of accounts payable be remitted 

immediately to creditors oecause tin . • du are not in 

excess of the budget revisions, with one exception* specifically legal 
enses. 

( .'• ) Susies ts that for the period July 1, to December 31, 1934, 
the proper procedure for the Code ■- ' i ilstrator is to submit 
at the earlies ] JssibL i be a revised bud et and request ap- 
proval. In so doing, full and accurate explanations must oe 
set forth stating the r sasons for the variance from the items 
of expense contained in the original' budget. "That is, the 
exces: o: salaries of Sll,340.06 over the amount provided in the 
budget." "The item of legal expense of $13,896.92 which was 
included in the xudit report of general expenses, must be ex- 
plained iully in all detail and justified as necessary in all 
particulars." Explanation must be riven as to why two associate 
counsel were employed i:i Ealtimore on the !-r'eif case. Explana.- 
tion should be made oj : the 37,500 to be paid firm of General 
Counsel in view of Counsel's capacity a-- Secretary and Counsel 
for the Code Authority on a s I irj basis, 

(3) In order to meet with all necessary formalities the Code 
Authority should arrange to submit a budget of expenses for the 
period September 6, 1933, to June 30, 1934. Likewise an audit 
re >ort should be submitted and should "bo similar in form to the 
audit report submitted for the period July 1, to December 31, 
1934. 

(4) The Code Authority is now functioning without an approved 
budget. It is suggested that the O Le Authority take immediate 
steps to give full attention to all items pending upon budget 
and audit in order th t they may be clarified and 'placed in order 
at. the earliest possible dace. This is in the interest of 
effecient management and is necessary to allay and forestall 

the possibility of criticisms and adverse publicity. 

In the meanwhile creditors of the Code Authority were pressing 
for payment and the Executive Director in letter of February 9, 1935, 
ashed permission of the Administrator Co meet bills payable as of 
December 31, 1934, statin that the Code Authority had plenty of funds 
and submitting Administration Member Mitchell's rec mmendation support- 
ing the request. (Mr. Mitchell's approval was qualified with respect 
to extra legal fees above mentioned.) This matter was called to the 
attention of the Code Authorities Accounts Section, which advised 
the Administrator that the Code Authority should determine which of the 

(*) Conclusions drawn by Mr. Eberts in reporting to the Deputy 
Administrator on the -en's Clothing Code Authority Budget. 



9732 



-174- 

accounts may be paid without exceeding the budget Hither in the indiv- 
idual items or in total. It was likewise s ggested that the Code 
Authority submit immediately a revised budget covering the period 
ended December 31, 1934, re-allocating the amounts in such fashion that 
the other excess may be paid. 

Certain irregularities in the budget indicated by the above re- 
view were forcibly brought to the attention of the Executive Director 
of the Code Authority on March 23, 1935, in a letter from the Deputy 
Administrator in charge of the Code. The Deputy Administrator stated: 

"Items that are the subject of chief criticism of the Code 
Authorities Accounts Section are the following: 

"1. Over-payment of two months' salary to Executive Director 
Bell upon his. resignation. 

"2. Extra legal services in the sum of $5,000 paid in Grief 
case. 

"3. Extra legal services paid to Mr. Drechsler over fixed 
annual retainer or salary. 

"Obviouslv the need for over-payments should have been stated 
with adequate covering or supporting information to justify. 
Instead they were paid without submission for approval and are 
now pending under criticism and objections mentioned. 

"May I take this opportunity to say that we understand, of 
course, that in the day to day services and activities of the 
Code Authority it is possible the need for expense not antici- 
pated ^y the Budget will be encountered. When this situation 
arises, however, it is very easy to report it with the ac- 
companying facts and circumstances. 

"Sound business practice dictates that budget limitations must 
be observed." (*) 

In connection with criticism of specific items of the Men's 
Clothing Code Authority Budget , it is significant that on the 
occasion of the temporary vacancy in the office of Executive Di- 
rector, Deputy Administrator Vincent suggested to the Administrative 
Division concerned, that the salary of this office be brought in 
line with sound policy. (**) Mr. Vincent set forth his recommenda- 
tion and reasons therefor as follows: 

"I recommend that the Director's salary item be reduced to $12,000 
per year. ( Note : Director's salary budgeted at ^25,000 per year). 
In malhng this recommendation, I do not wish to be understood as 
suggesting this amount as an inflexible maximum. I do believe 



(*) Letter dated March 23, 1235, from Deputy Administrator M. D. 
Vincent, to Morris Greenberg, Executive Director, gen's Clothing Code 
Authority. (Men's Clothing Code Files, under Budgets and Assessments) 
(**) Memorandum dated february 28, 1235, from Deputy Administrator M. 
D. Vincent to Research and Planning Division. (Men's Clothing Code 
Piles. ) 



-175- 

- t $12,000 or at most $15^000 per ann-um takes into account the 
importance and res si-M'lit.v of- the office in a re?.s ■ Slj 
liberal way. $1, , ) is equal to the salaries paid by the 
government to executives in most responsible positions, including 
members of the Cabinet. 7or fche National Recovery Administration 
to -allow salaries, greatly in excess of sue a a lount lias aln d; 
aroused and will doubtless continue to call fortli criticism.". 



9732 



-176- 

A. Summary of the Financial Re-ports Covering the Budget . 

The activities of the Men's Clothing Code Authority were financed 
by the sale of labels which were purchased, "by the manufacturers from 
the Code Authority. The total of labels sold to April 30, 1935, was 
137,700,579, yielding the sum of $688,368.77. (*) The Code Authority 
estimated that their requirement for one year was 90,000,000 labels. (**) 
An examination of the reports made shows: (***) 

Gross Income from September 6, 1933, 

to April 30, 1935, amounted to $706,164.55 1/ 
Cost of printing labels 131,666.62 



Net Income $574,497.93 2/ 

1/ Including return from labels and other income (service income 
from uniform labels, fines, etc.) 

2/ Net income before operating costs. 

Cost of operation from September 6, 

1933, to April 30, 1935 499,207.41 



Surplus for period $ 75,290.52 (****) 

The financial activities of the Men's Clothing Code Authority were 
divided into three periods: 

September 6, 1933, to June 30, 1934, for which no budget 
was ever submitted. 

July 1, 1934, to December 31, 1934, for which the budget 
was approved January 9, 1935. 



(*) See Table XLVII. Number and Value of Labels Sold by Men's 
Clothing Code Authority. 

(**) Review of N.R.A. Label Agency Activities, by Dean G. Edwards, 
N.R.A. Label Agent. 

(***) (a) Report Upon Examination of Income and ^xpenses for period 
ended June 30, 193 A , by Lybrand, Ross Pros., and "ontgomery. 

(b) Report Upon Examination of Accounts as at December 31, 
1934, by Lybrand, Ross Bros., and '■'ontgomery. 

(c) M. C. C. A. Report for the "onth of April, 1935. 

(****) The surplus on the Men's Clothing Code Authority Report for 
the Month of April, 1935, shows $74,784.38 due to a balance 
of $43,460.33 being used in the Report for the Month of January 
instead of $43,966.47 shown in the Report upon 'Examination of 
Accounts a s at December 31, 1934, by Lybrand, Ross Bros., and 
Montgomery. 



9782 



-177- 

January 1, 1955, to June 30, 1935, for which the "budget 
was submitted hut rr'ver a-v-.rovecL The budget a^- 
-oroved for the last half of 1934 and the "basis of 
assessment was extended January 9, 193!% "by Ad- 
ministrative Order ^ T o. 15-50, Toen&Ang further Ord^r. 

The first period ret>ort sho-vs: (*) 

Gross Income Seotember 6, 1933, to June 

30, 1934 *345 } 810.90 

Cost of Labels 67,355.06 



Net Income $278,454.84 

Cost -of Oneration 

Accounting 8- Lahel Dent. $16,775.76 

"Enforcement ' " v 79 ,489 „ 32 

Publicity 8,514,99 

Statistical 10Jl72.09 

•General Office Expense' ' 67,289.56' 182,241.72 



Excess of Eecerots over Expenses $ 96,213.12 

A budget for 'the period from July 1, 1954, to December 31, 1934, 
was axroroved January 9, 1935, for 

Estimated Gross Income $225,000.00 

Estimated Cost of Printing Labels 45,000.00 



Estimated Net Income $180,000.00 

Budget Exclusive of Label Cost $180,000.00 

The second neriod report shows: (**) 

Gross Income $178,991.91 

Cost of Printing Labels 30,880.46 



Net Income $148,111.45 



(*) Re-oort uoon Examination of Income and ""xnenses of the Men's 
Clothing Code Authority for neriod ending June 30, 1934, by 
' Lyb'rand, Ross Bros., and Montgomery. 

(**) " Reptirt uoon Examination of Accounts as at December 31, 1934, 
by Lybrand, Ross Bros., and Montgomery. 



9782 



Cost of Operation 

Salaries $124,088.66 

Office Expenses 25,300.07 

Travel Expenses 31,423. _8 

General Senses 14,864.22 , m ... .. 

Other Special Outlay 4,681.67 200,358.10 

Excess of Expenditures over Receipts * 52,246.65 

Showing expenditures of $20,358.10 over the approved Budget . 

Surplus as of June 30, 1934 * ll'lll'lt 

Less Deficit for the period -x.,-.-b.oD 

Surplus December 31, 1934 $ 43,966.47 

The budget for January 1, 1935, to June 30, 1935, was never approved, 
Administrative Order No. 15-50, extending budget ^J?' 6 ^ .^^'^ 
15-49, dated January 9, 1935, on a pro rata basis until further order hy 
the National Industrial Recovery Board, was signed January 9, 1935. 
Code Authority operated under this Order up to the decision of the 
Supreme Court! The net amount of the proposed budget ™ **° J^^ 
that for the previous period, i. e., $180,000 exclusive of the cost of 
labels.. The estimate on income was somewhat changed, as follows. 

$221,000.00 
Estimated Gross Income * » 

' Estimated Cost of Printing Labels _i.uuu.uu 

. v _ t $180,000.00 

Estimated Net Income + ' 

The third period report for the first four months ending April 30, 

1935, shows: (*) 

$181,361.74 
Gross Income 33,430.10 

Cost of Labels • 

_ . T $147,931.64 

Net Income 

Cost of Operations 

General Administration $21,371.66 

Compliance 74,958/24 

Finance — Shipping 5,871.61 

Publicity 67.50 

General -xpense 14,338.58 116 . 607 . 59 

Excess of Receipts over Expenses * ^ *° .' 

Surplus December 31, 1934 -A,»bb.-r 

Surplus April 30, 1935 $ 75,290.52 



(*) Men's Clothing Code Authority Report for the Month of April, 1935. 



9782 



-130- 

The cost of operation was $3,3.92*41 -under the amount called for 
under the "budget for the four months ending April 30, 1935. 

B . Cost of Code Authority to the Industry- . 

• In, considering'the expense of operating the .Fen' s Clothing Code ■ 
Authority, it is of Interest to note that the thrice at which the labels 
were sold was so low (eaual to \i rer single , garment plus the actual 
cost of sewing on the label) that there was no material charge to be 
added to ■ the cost of manufacturing the individual garment or to the 
selling -orices of same. 



■ " The Men's Clothing Code Authority in presenting their proposed 
budget for July 1, 1934, to December 31. 1934, on September 27, 1934, 
under "Income Estimate Based on Label Sales, Gross and Net Income" 
stated:, 

■ "I.t is estimated that, we would sell during the six-month period 
approximately 45 s 000, 000 labels. The price of the label was there- 
fore fixed as l/2i per label to yield the gross revenue required. 

"The gross amount of business of the Clothing Industry at wholesale 
amounts to approximately 5 500 .000, 000 <, 00 per year. In 1931, 
according to the Census reports, gros-s value of product was 

• $513,792,000.00 and in 1929, $841,101., 000 »-00;. On the basis of the 

• gross value of business estimated, the-^Label, charge represents 9/10 
of a mill per dollar of product. 

"The assessment on the industry in the purcha.se of labels repre- 
sents, on the average, therefore, 90c* per $1000.00 value of pro- 
ducts sold. In the case of a concern doing a $1,000,000 worth of 
J* . business, the charge , for labels for the year would be on the aver- 
age, $900.00. Th,e charge of the industry for administering the 
Code, can, therefore,, be considered as a very reasonable one. 

"The relation of' .the, cost of the label to Che wholesale price of a 
suit is indicated as follows: 



Suit .Selling at Thole sale 



Percent' Label Cost 
of Selling Price 
expressed in 1000' s 



$13.50 


($22.50)* 


.110 


$15.00 


($25,001*. 


.100 


$16.50 


($27.50)* 


.090 


$18.00 


(<*30.00)* 


.083 


$21.00 


($35.00)* 


.071 



*Figures in parentheses represent retail prices. 

"In 1931, according to United States Census reports, the average 
wholesale price of a suit was $16.15. The bulk of the suits sold 
today average approximately this figure. 



9782 



-181- 

"***The consensus of opinion among manufacturers is that a eystom 
of separate labels' for variously priced garments would create con- 
fusion and result in errors. It would also involve imposing con- 
siderable administration expense on the Code Authority and a check- 
up of the books of the individual manufacturer's invoices, shipping 
records, etc., to determine whether the proper label had been placed 
on a given 'garment » The eroense involved would far out-weigh any 
saving even to the manufacturer of the cheaoer garment. Moreover, 
sinc^e the cost of orintins; the label is a fixed charge, the net 
revenue-available for administration would be, reduced more than 
proportionately with the reduction of the orice of the label for 
the lower oriced garment, . . 

"The attitude of the manufacturers is in favor of the oresent 
system. This is indicated in the vote at the last meeting of the 
Code Authority on a proposal that manufacturers should use one type 
• of label for the coat, a different .type of label for the pants and 
still another for the vest. The manufacturer representatives were r. 
unanimous that it would out a considerable burden on them in the 
routing and handling of three different types of labels in their 
shops, even if the manufacture of clothing were carried on in a 
separate unit for the manufacture of coats,, another for oants, and 
a third, for vests. . . . 

"The administration eroense for handling of labels has been held to 
a minimum by the Code Authority. It is estimated that approximately 
3fc of the gross revenue has been required to operate this depart- 
men t . " ( * ) 

The table "Principal Products, .by Class and Value, 1923 and 1925, 
and by Class, Quantity and Value, 1927-1934" on page 51, Chapter I, 
indicated a product value for the Men's Clothing Industry of $397,876,000 
for the year 1934. Compared with the actual cost of the Code Authority 
for the calendar year 1934, . estimated in the auditor's reports at 
$399,860,. 68 (including cost of labels), this shows a cost, of approxi- 
mately one mill per dollar of garments produced. Incidentally, the 
auditor's reports show an excess of income over expenses of $8,945.92 
for the calendar year 1934. ;■;.' 

V. Il'TPEPH'ETATIOITS AMD INT T TRPR^TATIOK PROC^URE 

It was discovered soon after the adoption of the Men's Clothing 
Code that interpretations of many of its provisions were necessary to 
its proper execution. Most of these interpretations and especially the 
more significant ones have to do with wage and hour provisions, and can 
be discussed to^etner conveniently^ Moreover, the procedure in connection 
with the framing of these interpretations and their presentation for 

(*) "Income Estimate Based on Label Sales, Gross and Net Income," 

Code Authority Budget for Period .from July 1, 1934, ( tq December 
31, 1934. (Men's Clothing Code Files.) 



"i 



9782 



-183- 

Administrative cnnsideration is an excellent commentary upon the manner 
and character of cooperation between the. Code Authority and the Adminis- 
tration and appears to justify the discussion of "interpretations" 
separately and apart from related aspects of developments under the 
Code. 

A. Interpretations Submitted for Administrative Approval . ,, 

Eight interpretations relating to separate and distinct problems 
are stated bythe'Code Authority to have been given oral appraval as 
early as September 26, 1933, by Dr, Lindsay Rogers, who was at that 
time the Deputy Administrator and Administration Member on the Code 
Authority, 
(These interpretations are quoted below.,) 

These interpretations were first submitted to the Administration 
f or *tnxmal ap >roval on October 15, 1934, by Administration Member B.H. 
Gitchell, who explained that oral approval had been given earlier, 
"At that time the only .approval necessary in' connection with Code inter- 
pretations. (* ) These- interpretations are now sent yov. in accordance 
with the present procedure so that the records can be thoroughly 
clear." . The -submission, of these interpretations was acknowledged 
October 15, 1934, by Deputy Administrator Dean G. Edwards with the 
comment, "We will act upon these interpretations as 'promptly a3 poss- 
ible so' that the records can be entirely clear in this regard. " 

•With but five exceptions, .it seems that the above-mentioned in- 
terpretations had not obtained official approval prior to December 
28, 1934, at which time the entire list said to have been approved 
orally by Deputy Administrator Rogers, together with eleven additional 
interpretations, were submitted to the Administrator by the Code 
Authority. In submitting these interpretations for approval, * the 

Comptroller of the Code Authority states', " : we have, not yet had 

official approval of interpretations Number 1, 2, 4, 5, 6, 8, 9,10, 
11, 14, and 18 - — -would appreciate hearing from you as soon as poss- 
ible about these interpretations. " i~ t ■ '•' .• • . nr .■;. !' 
The list of, these interpretations follows, together with the date 
of approval by the Code Authority: 

"1. Tailors- to- the- trade-hours of labor 

"On behalf of the branch of the Clothing Industry 
known as tailors- to- the-trade, conferences were held 



(*) "Office Order 47, issued on D e cember 11, 1933, required inter- 
pretations to be a proved by 1J.R.A*. This Order was finally 
supplemented by Office Order 1I . 60, issued January 16, 1934, 
which approved an order of procedure for the approval of inter- 
pretations involving their submission before approval to the 
various II. R. A. Advisory Boards." (J. G. Latimer, Legal Division 
K.R. A. ) Men's Clothing Code Piles, .under Senate Hearing.) 



9782 



«183b 

with . sentatives of labor, and as a result of such 

I ;cnces, it was the intent of the conferees that 
before any extra hours of work would be permitted to a 
tailor-to- the- trade, he would be required to satisfy 
the Code Authority that he had taken on additional 
employees to full plant capacity, and that in such event 
he would be permitted to operate his plant and employ 
the manufacturing employees on the basis of 4C hours 
each week, for a period not to exceed 6 weeks of the 
full season of 1933 and up to and not later than November 

30, 1953* *• ■ 

Approved September 6, 1935 

"2. ITon-manufacturing employees as used in Article II, 
shall be construed to refer to the excepted employees 

mentioned in Article IV. 

Approved September 6, 1933. 

"3. Cleaners and basting pullers have ''jecn defined as 
' manuf ac tur ing emp 1 o y e e s . ' 

A p roved September 26, 1933. 

"4, The word "cutters' as used in Article II, Sub- 
difision (a) is defined as follows: 

"Cutters on cloth include those cutters that make, lay, aid 
I 9V mark, cut by hand or machine, fit or chop. 

"Cutters on linings shall include only markers, and hand or 

machine cutters on coats, body linings and vest back linings. 

Approved September 26, 1933. 

"5. The word 'eff-pressers' as used in Article II, Subdivision 
A, is defined as follow;;: 

''Sff-Pressers on coats will include all hand or machine pressing 
performed on the coat after the lining is felled. 3ff-pressers 
on vests by hand or machine on the body and lining presser after 
the vest is finished. Off-presser on pants and knee-pants by 
hand or machines or the top presser and leg presser. Off - 
pressers do not include under pressors commonly known as part or 

piece pressers. 

Approved September 26, 1933. 

"6, The words 'substantial classes' as used in Article II, Sub- 
division 3, a:, e to include 20 per cent of the total number of 
employees employed in any establishment. 

"If however, there is any individual case in which 20 per cent 
seems inequitable, the full facts of such case are to be com- 
municated to the committee provided for in Article II, Sub- 
division E, for their further consideration. 

Approved September 26, 1933, 



9782 



-184- 

"7. Subdivision B of Article XII shall not apply to such manu- 
facturers who' make "garments for tailors- to- the- trade or special 
orders houses where such garments are made to measure for indi- 
vidual customers. 
Approved September. 26, 1933. 



"8. Ho provision for' close-outs or clearance sales for topcoats 
is f ound "':i Article" X. The decision of the Code Authority is that 
topcoats, either for the spring or fall, may be closed out at 

such periods as the manufacturer deems desirable. 

Approved September 26, 1933. 

"9. In interoretating the words 'average of 40 hours' used in the 
second paragraph of Article IV for certain employees, the inter- 
pretation committee of the Code Authority will advise each manu- 
facturer to arrange his hours in such a manner which will be most 
convenient for his business provided that they do not exceed an 

average of 40 hours per week during enj yer-r. 

Approved September 26, 1933. 

"10. With respect to making up "time -for holidays, the interpre- 
tation committee advised that if the employer can arrange with 
the employee to put in 36 hours in anj one week, with not more 
than 8 hours in any one day, such arrangement would be consistent 

with the provisions of the 'Code. ■ 

Approved September 26, 1933. 

"11. Application Article II, paragraph ( b) - (The interpretation 
No. 6) - the words 'substantial classes' as used in Article II, 
Subdivision (b.) are to include 20 per cent of the total number 
of employees employed in any establishment. 

"If, however, there is any individual case in 'which 20 per cent 
seems inequitable, the full facts of such case are to be commun- 
icated to the committee provided for in Article II, Subdivision 
(d) for their further consideration. 

"This interpretation shall become effective with the first 
payroll following U vember 20, 1933, and shall not be retroactive. 

(illustration annexed hereto.) 

Approved ITovember 8, 1933. 

"12. Lining pressing after off-pressing' is classified as 'off- 
pressing, ' 

Approved December 8, 1933. 

"13. Undei-collar cutting is not cutting as defined by the Code, 

Approved December 8, 1933. ' 

"14. A non-manufacturing employee working less than a full week 
should be paid at an hourly rate for the number of hours worked, — 
Approved December* 8, 1933 

"15. Where customer's labels are sewn on in the stock room they 
should be classified as non-manufacturing employees; labels put 

9782 



-185- 

on by machine or hand in the factory, should be classified as manu- 
facturing employees. 

Approved December 3, 1933. 

"16, Bundle boys end packers are to be classified as non-manufact- 
uring employees. 

Approved December 3, 1932. 

"17. Bu.shelmen, not including final inspectors or final examiners, 
are considered as manufacturing employees; final inspectors and final 

examiners are non-manufacturing employees.-; 

Approved December 8, 1933. 

"18. Interpretation re' Article V - The Committee rules that N.R.A. 

labels must be attached to Rach garment when the same is in the 

process- of manufacture vr] et er said garment is mace in an inside 

shop or in a contract shop. 

I : r 8, 1933. " 

As already indicated, certain of the above-listed interpretations 
had received Administrative approval in one form or another. Eight of 
this group, by number as above-listed, 3, 4, 5, 6, 7, 8, 9, and 10, were 
understood to have 'been approved orally by. Deputy Administrator Eogers. 
Number 8 of this group of eight had ot<en written into the Code as an 
amendment on December 15, 1953. Of the group, only five, specifically, 
ICos. 5, 11, 12, 14, and 16, had been approved by Administrative Orders. 

The list of interpretations submitted by the Code Authority on 
December 23, 1954, above-listed, was acknowledged on January 3, 1935, 
with the following comments and suggestions, referring to interpreta- 
tions by number: 

"1. This is not the prop.er topic for an interpretation but should 
be handled in the form of an amendment. The Code Provisions clear- 
ly give the Code Authority specific powers to set the week and hours 
of overtime during peak seasons, but does not present any other 
restrictions. These provisions may- be for an entire industry, 
individual group or for a section of the country. The cjde 
is also silent on the determination of the -peak season. 

"2. This tends to amend the Code ant! should be submitted as an 
amendment. Makes direct interpretation and not by reference. 

"*'. This tends to amend the Code a:iC should be submitted as an 
amendment, 

"5. This tends to amend the Cod<4 and should be submitted as an 
amendment, 

"6. This interpretation is almost a reiteration of interpretation 
Ho. 11 one. it is not necessary to approve both interpretations, 
I would recommend that the Code Authority state which interpre- 
tation it prefers. 

"10. I T, the first paragraph under the interpretation the words 
•the interpretation committee advises that' are being deleted. 

9732 



-186- 

This is being put through as an explanation as the language of 
the Code is not in sufficient doubt to warrant an interpretation. 

"11. See interpretation lIo„ 6 above. 

"14. This should be changed so that under the heading, facts, 
should be included the provisions of the Code which refer to 
the fourteen dollar weekly rate and also that there be quoted 
from provision (e) of Article II that portion of the provision 
guaranteeing the minimum rate of pay whether by piece rate or 
other basis. The paragraph in the interpretation under the 
heading 'question' should be changed to read: 

'If a non-manufacturing employee is employed for less than a 
full week, he may be compensated at an hourly rate which would 
yield for a full time week of the number of hours as provided 
for in the Code, the weekly minimum- established by the Code.' 

"However, the Code should be amended to provide for a weekly wage 
which shall be 'at the rate of $14.00.'" 

During the time that the Code Authority and the Administrator were 
attempting to "clear the records" witlrrespect to interpretations for- 
mulated by the Code Authority early in" its experience, another group- 
of interpretations had been approved by the Code Authority in its meet- 
ing of March 2, 1934, and were brought to the attention of the Adminis- 
tration soon thereafter. It is interesting to note that Administrative 
approval of these interpretations was delayed until around the middle 
of July, 1934, at which time thirteen out of the fourteen submitted 
were formally approved. On being reminded by the Code Authority, the 
Administrator on June 7, 1934, explained delay up until that time by 
writing, "I regret very much that in the press of other matters these 
interpretations have been slightly neglected. This is not entirely due 
to negligence, but mainly because of the form in which these interpre- 
tations were submitted." The letter then goes on to explain the proper 
form of transmittal, indicating that each interpretation should be on 
a separate sheet with a certain number of copies and carrying the re- 
commendation of the Administration Member. By June 12, 1934, the in- 
terpretations had been submitted in the form requested, and by July 
19, 1934, had been acted upon. 

The interpretations approved by the Code Authority on March 2, 1934, 
and later approved by the Administration (with one exception, No. 14), 
are as follows: 

1. "A worker who is employed in the cutting of master patterns 
if such work is done in a department wholly segregated from any 
manufacturing operations is classified a non-manufacturing em- 
ployee, A person who cuts a paper pattern from a block pattern 
is a cutter within the definition." 

2, "Routing of work from cutting room to the various shops, after 
parts are assembled and tied, is a non-manufacturing occupation." 



9782 



-187- 

3. "A person who checks the lay and/or the cut, and neither marks, 
cuts or fits, shall be classified as a supervisory employee." 

4. "A worker who checks the lay after it has been marked by the 
cutter, and/or cuts and/ or assembles or fits the various parts 
after they have been cut by the cutter, is a cutter within the 
definition. " 

5. "A worker, engaged in the sponging and shrinking of cloth, 
shall be classified as non-manufacfruxing, provided, however, 
that this work is done before the cloth is cut, " 

6. "A worker who carries patterns to and from the racks, shall 
be classified as n~on~manuf acturing. " 

7. "An employee engaged in the printing of joker tickets shall 
be classified as non-manufacturing. " 

8. "A worker who cuts canvas and selicia as -well as vestbacks 
and body linings shall be compensated at the . rate of not less 
than $1.00 per hour for the time spent in cutting vest backs 
and body linings and may be compensated at a lower rate for the 
time spent in cutting canvas and selicia, on condition that the 
employer shall keep an adequate and proper record which will 
disclose the number of hours worked on each of the several 
operations, the amount of earnings received per hour, and if 
the work is on a piece work basis, the piece work rates." 

9. "An employee who wots cloths for the off-presser., shall be 
classified as a non-manufacturing employee, and not as an off- 
presser. " 

1C. "An employee whose work is divided between operations which 
are classified as manufacturing and non-manufacturing,, shall 
be compensated on the basis of the number of hours worked on 
each of the several operations, on condition that the employer 
shall keep an adequate and proper record which shall disclose 
the number of hours worked on each of the several operations, 
the amount of earnings received per hour, and' if the work is on 
a piece work basis, the piece work rate." 

11. "Brsheling on garments sold at retail direct to the consumer 
and returned for alteration by the consumer, is a non-manufactur- 
ing operation only when such cperations are carried on in a 
separate department wholly distinct from manufacturing operations." 

12. "The earnings of any worker shall be determined on the basis 
of the number of hours worked in any one week. " 

13. " A worker who cuts a piece of lining from the bold and uses 

a pattern as a guide for cutting said lining, is a cutter within the 
definition. " 

14. "Wrier e two or more persons, engaged in the manufacture of cloth- 
ing, perform productive labor in the manufacture of such clothing 
such persons come within the province of the lien's Clothing Code. " 



:-i88-. 

B. Interpretation Publicity. [Ho 

The Code Authority made known to the Industry i-ts various inter- 
pretations including those approved "by the Administration in the manner 
and on the dates indicated by the following!-' 

"Interpretations 1 to 18 inclusive, were distributed to all members 
of the Hen's Clothing Industry by the Code Authority in a circular. 
letter "dated January 6, 1934. Attached hereto- is a copy of a letter 
sent to 'the industry- transmitting these interpretations, iJSee last 
paragraph of this letter.) Prior to being circularized throughout 
the Industry, these interpretations appeared in the trade Journal of 
the Ken' s" Clothing Industry, the- DAILY HEWS RECORD, issues of 
November 11, 1933, November 13, 1933, and December 20, 1933, 
respectively.*** 

"An additional number of interpretations approved by the Admin- 
istrator on August 7, 1934, August 8, 1934, and August 9, 1934, and 
August 15, 1934, respectively, was published in the DAILY NEWS RECORD 
of August 22. 3.934; ****«<(*) 



(*) Letter dated February 27, 1935, from Morris Creenberg, Executive 
Director, Hen's Clothing Code Authority, to M. D. Vincent, Deputy 
Administrator. (H e n's .Clothing Code Files.) 



9782 



-139- 
C'. Administrative Orders Approving Interpretations 

Out cf the entire list of around thirty-two interpretations ap- 
proved by the Code Authority, and -oossibly two or three others to he 
mentioned below, only eighteen received a.Tynrova.1 by Administrative 
Order. One additional interpretation as above -oointed out, had been 
placed in the Code by amendment. 

In order to ^resent a clearer picture of the nature of the inter- 
pretations approved by Administrative Order they are summarized at 
this uoint with brief comments, where aToronria te, upon their sig- 
nificance: 

Order No. 15-14-A, signed June 9, 1934, provided that: 

"The words 'substantial classes' as used in Article 
II, subdivision (b) are to include 20 -oer cent of 
the total number of employees employed in any estab- 
lishment. 

"If, however, there is any individual case in which 
20 per cent seems ineaui table, the full facts of such 
case- are to be communicated to the committee provided, 
for in Article II, subdivision (d), for t.~:eir further 
consideration. 

"This interoretation shall become effective with the 
first Toayroll following November 30, 1933, but shall 
net be retroactive." 

ILLUSTRATION (NOP.T") 

Kow to arrive at the Amounts of Increase 
to be given to the Higher Paid Classes 
Under Article II - ( b) 

Total of Manufacturing employees in your factory 100 

Employees of "lowest -oaid substantial classes 

201 of total" SO 

Average earnings cf the said 20 employees in 

the "lowest naid substantial classes" for 
one full week immediately r>ricr to July 14, 
1933, which, for the Tour^ose of illustra- 
tion, we shall say are il0.40 

This was arrived at as follows: 

8 earning $9.00 - $73.00 

4 earning 10.00 - 40.00 
8 earning 12.00 - 96.00 

Grand Total 1208.00 



9782 



-190- 

Divided by 20 

(number of "lowest -naid employees") $10.40 

Cede Minim-urn (Northern Section) $14.40 

Average difference therefore to be maintained is $4.00 

So that the wage of each worker whose earnings 
prior to September 11, 1933, was $10.40 or 
over, and wo to $26.00, shall be increased 
by $$2000 

Those who had earned 527.00 shall be increased 

by $3.00 

Those who had earned $28.00 shall be increased 

by $2.00 

Those \«rho had earned $28.00 shall be increased 

by $1.00 

The above illustration is to be used by you 
as a guide only . 

« 
If the average for the 20^ "low'est Daid substantial 
classes" is higher than that given in t he illustra- 
tion, then the average difference to be maintained 
would be correspondingl.y lower. 

If the average for the 20^ "lowest t>aid substantial 
classes" is lo"rer than that given in the illustra- 
tion, then the average difference to be maintained 
would be correspondingly higher. 



0782 



- : .! • -191- 

ILLUSTRATION 
( SOUTHED SECTIOII ) 

How-to Arrive at the JLnourits of Increases to be Given 

• to Higher Paid Classes Under Srticle II — Section (b) . 

Total of manufacturing employees in your factory 100 

Employees of "lowest -oaid substantial classes" 

2(A of total" 20 

Average earnings of the s;iid 20 employees in the 
"lowest naid substantial classes" v for one full 
week immediately nrior to July 14, 1933, which, 
for the purpose of illustration, we shall say 
are ft 10. 40 

This was arrived at as follows: 

8 earning ' $9.00 - $72.00 
4 earning 10.00 - 40.00 
8 earning 12.00 - 96.00 

Grand Total .- $208.00 

Divided by 20 

(" T umber "lowest -oaid employees") $10.40 

Code Minimum (Southern Section) :;13.32 

Average difference therefore to be maintained is $,2.92 

So that the wage, of each worker -whose earn- 
ings nrior to- September 11, 1933, was 
$10.40 car over, and un to $27.08, shall , . 
be increased by $ 2.92 

Those who had earned $28.00 shall be increased. 

by ' $2.00 

Those who' had earned $29.00 shall be increased 

by ' $ 1.00 

The above illustration is to be used by 

you as a guide only. ", • .".. . 

If the average for the 201 "lowest -oaid substantial 
classes" is higher than that given in the illustra- 
tion, then the average difference to be maintained 
would be correspondingly lower. 

If the average for the 30*^ "lowest rjai'd substantial 
classes" is lo'^er than that given in the illustra- 
tion, then the average difference to be maintained 
would be corresnongingly higher." 
9782 



' .) > ; 



This interpretation respecting "substantial Classes" is signifi- 
cant because the Code Authority has based thereon its enforcement of 
the entire clause concerning wages above the minimum. The enforcement 
of Article II, Subdivision. (b) has been the major administrative 
problem of the Code Authority, .as will be shown more particularly in 
tiie Chanter "Labor Under the Code." It should be recorded here, 
however, that the Industrial "Recovery Association has assailed, the 
Administration and the Code Authority for acting under "this interpre- 
tation, which the Industrial Recover;/ Association came to regard an 
outstanding instance of modification of the Code by -power unjust if iably 
assumed. 

Order !> T o. 15-18, signed July 19, 1934, Provided that: 

"Busheling on garments, sold at retail direct to the 
consumer and returned for alterations by the consumer,- 
is a non-manufacturing operation only when such operations 
are carried on in a separate department wholly distinct 
from manufacturing operations." 

This interpretation relating to Article II of the Code allows com- 
pensation to non-manufacturing employees on a basis of a weekly 
minimum of $14.00 in the Northern area and S13 in the Southern area. 

Order 7o. 15-19, approved July 19, 1934, provided that: 

"An employee whose work is divided between operations 
xvhich a-r-e classified as manufacturing and n on- manufacturing, 
shall be compensated on the basis of the number of hours 
worked on each of the several operations, on condition that 
the employer keep an adeauate and proper record which will 
disclose the number of hours worked on each of the several 
operations, the amount of earnings received per hcur, and 
if the wsrk is on a piece work basis, the piece work rates." 

This interpretation of Article II Prevented the classification of a 
worker in a lowest paid class when employed on various types of work 
with differences in rates of pay. Article II makes no provision for 
a combination of two types of work in one job. 

Order Ho. 15-30, approved July 19, 1934, provided that: 

"A worker who carries patterns to and from the racks, 
■shall be classified as non-manufacturing." 

In some plants this work is done by cutters who are skilled and who 
are paid relatively high wages. A carrier or cutter's assistant under 
this interpretation was definitely not a cutter, and could be placed 
on a weekly wage basis. 

Ordrr Fo> 15-21, signed July 19, 1934, provided that: 

"A person who checks the lay and/or cut and neither marks, 
cuts or fits, shall be classified as a supervisory employee." 



-193- • 

This inter-ore tat ion definitely removed the "checker" from the "cutter" 
class, which was -naif 1 on the hourly wage basis' and was subject to the 
more rigid hour provisions of the Code,. 

Order No. 15-22, signed July 19, 1934, provided that: 

"An employee wno wets cloths for the off-presser shall be 
classified as a manufacturing employee and not as an off- 
presser. " 

This interpretation placed the "cloth wetter" in the class paid on a 
40 cents v>er hour minimum basis, fs against 75 cents for the off- 
presser. 

Order "o. 15-23, signed July 19, 1934, provided that: 

"A worker who cuts a niece of lining from the bolt and 

uses a pattern as a guide, is a cutter within the' definition. " 

This interpretation placed the lining cutter, as described, in the 
category of the "cutter," the- highest paid manufacturing class 
recognized in the Code, and -entitled to minimum pay of ,; ;i.^0 per hour. 

Order I"o. 15-24, siened July 19, 1934, provided that: 

"touting of work from cutting room to. the various shops, 
after -oarts are assembled and tied, is a non-manufac- 
turing occupation. " 

This allowed for payment to workers so engaged on the basis of the 
';i4.00 minimum ->er week. 

Order l T o. 15-25, signed J8h$_Y 19, 1934, provided that: 

"A worker who is employed in the cutting of master patterns, 
if such worrc is done in a ienartment wholly segregated from 
any manufacturing operations, is classified as a non-manufac- 
turing employee. A person '"ho cuts a -oaper pattern from a 
block pattern is a cutter within the definition." 

Cutting master patterns is usually done before the manufacturing 
season begins, and nrecedes the manufacturing process. 

Order No. 15-26, signed July 21, 1934, provided that: 

"A worker engaged in the sponging and shrinking of cloth 
shall be classified ar non-manufacturing; nrovided, however, 
that this work is done before t. .e cloth is cut." 

The processes mentioned here are done in separate departments of 
certain establishments and are technically not part of the manufacturing 
process, but a textile finishing -process. The classification made, as 
for other non-manufacturing employees, makes possible pay on a weekly 
basis as nrovided in Article IT. 



9782 



-194- 
Order No. 15-27, signed July 21, 1934, Provided that: 

"A worker who checks the lay after it has been marked 
by the cutter and/or cuts, and/or assembles or fits ■ ■ 
the various parts after thay have been cut by the 
cutter is a Cutter within the definition." 

Checking of the lay requires a high degree of skill and the inter- 
pretation insures pay for a job equivalent to that of cutters. 

Order No. 15-28, approved July 23, 1934, provided that: 

"An employee engaged in the printing of joker tickets 
shall be classified as non-manufacturing." 

This process is usually done in the stock room, is a printing 
operation separate and apart from the process of manufacturing 
clothing. 

Order Mo. 15-29, signed July 23, 1934, provided for the com- 
pensation of workers cutting canvas and selicia as well as vest back 
and body linings at rates of pay customary to both processes — R1.00 
per hour for vest. backs, etc., and less for canvas and selicia — pro- 
vided proper records are kept by the employer. This interpretation 
involves the same 'principle as No. 15-19 above. 

Order Mo.. 15-30, signed July 23, 1934, provided that: 

"The earnings of any worker shall be determined on the 
basis of the nunber of hours worked in any one week." 

Some factories had been paying workers on the basis of average number 
of tickets turned in during a four-week period. The Code Authority 
thought this could make possible evasion and thought tickets should 
be turned, in weekly. 

Order i!o. 15-40, signed December 7, 1934, provided that: 

"Lining pressing, after off-pressing, is classified as 
off-pressing. " 

In some plants lining pressing is done before the lining is felled 
and hence is considered pa.rt of piece pressing, which is compensated 
for at a lower rate than off-pressing. 

Order No. 15-41, signed December 7, 1934, provided that: 

"Bundle boys and packers are to be classified as non-manufac- 
turing employees." 

Order No. 15-42, signed December 12, 1934, provided that: 

"Cleaners and basting pullers, are considered manufac- 
turing employees." 



9782 



-195- 

Order No. 15-60, signed February 19, 1935, provided that: 

"Bushelmen, not including final inspectors or final 
examiners, are considered as Manufacturing Employees, 
except that bushelmen working on garments sold at 
retail direct to consumer and returned for altera- 
tions by the consumer are nan-manufacturing employees when 
working ir a separate" department wholly distinct from manu- 
facturing departments; final inspectors and final examiners 
are nnn-manuf acturing employees. " 

The facts upon which the above interpretation wfs based are as 
follows: 

"Bushelmen repair or correct imperfections in the manu- 
facture of a garment and as such nerform work done by 
manufacturing employees in the shop. Final inspectors 
or final examiners merely determine whether the work 
has been pronerly done and inspect same; they do no re- 
pairing or correcting of imperfections and their work 
is frequently done in the stock room and not in the 
factory. " 

Suggested Interpretations Not Ap-nroved By Administration 

Among the interpretations approved by the Code Authority 
March 2, 1934, is found the following: 

"Where two or more -persons, engaged in the manufacture 
of clothing, perform -productive labor in the manufac- 
ture of such clothing, such persons come within the 
province of the Men's Clothing Code." 

The Administration did not see. fit to recommend approval of 
this requested interpretation, giving as the reason, "***the foregoing 
attempts to impose an obligation on an entrepreneur to pay himself 
a minimum salary and is therefore objectionable. ***A restriction 
as to hours of labor would not be objectionable."* The Code Authority 
urged further consideration on the grounds that the lack of such 
interpretation ^ould encourage or make -possible cooperative organisa- 
tions of serious conseouence-. 

Finally, on January 29, 1935, the Code Authority followed the 
Administrator's suggestion and submitted an interpretation for 
approval which followed the wording of the above-quoted interpretation, 
except it provided: "***such persons shall be subject to the pro- 
visions with respect to the limitations of hours as defined by 
Article IV of the Hen's Clothing Code." Acknowledging this new inter- 

(*) Letter dated September 17, 1934, from M'.'D. Vincent, Deputy 
Administrator, to George L. Bell, Executive Director, Men's 
Clothing Code Authority. (Men's Clothing Code Files). 



9782 



-196- 

pretation, the Administrator advised Me Code Authority that' such 
should take the form of an amendment, to the Code and, should be 
offered for public hearing." (*) 

The Code Authority propose^ on October 15, 1934, through the 
Administration '"ember the following interpretations which were 
designed to clarify the definition of "cutter:" 

"Cutters on cloth include those cutters that make 
lays and /or mark, cut by hand or machine , fit or 
chop. " ... . 

"Cutters on linings shall include only markers and. 
hand or machine cutters. of coat body lining and 
vest back lining." 

F.R.A. Counsel advised' the Administrator'" that "the effect of 
this interpretation is to amend the Cot* and it therefore should be 
noticed for opportunity to file objections or hearing." Even prior 
to this advice, when tue Code Authority made inouiries about defining 
the term "cutter," the Administrator gave the opinion that the 
definition of tie wage rate for cutters was clear and free from 
abiguity and that the interpretation already approved in Administrative 
Order No. 15-29 seemed to be a classification of work. It was further 
suggested that the "classification" might stand unless objections were 
made to it. (*.*,) 

In line with the action of the Administration just rioted the 
proposed interpretation: "TJnder-collar cutting is not cutting as 
defined by the. Code," was not given Administrative approval, although 
the records indicate that such interpretation received the approval of 
all Advisory Boards, Research and Planning, and the Legal Division. 
The He vie™ Division made the suggestion that "As the term cutting is 
not defined by the Code it would oe better to state that under-collar 
cutting is not cutting as understood by the industry." 

On September 6, 1933, the Co^e Authority recommended for 
Administrative approval the following interpretation: 

-"Non-manufacturing employees as used in Article II 
shall be construed to refer to the excepted employees 
mentioned in Article IV. " 

The "excepted" group included the repair crews, office force, etc. 
This interpretation appears to have been rejected on the basis of 
counsel's advice that such would amend the Code and hence could not 
be approved. , r 

("*") Letter dated January 39, 1935, from Assistant Deputy Administrator 
Walter S. Woodford, Jr., to the Hen's Clothing Code Authority, 
(lien's, Clothing. Code Files). 

(**) Letter dated September" 18, 1934, from Assistant Deputy Administrator 

'.., D. Vincent, to 3, H, G-itchell, Administration Member. ('fen's 
g7gg Clothing Code Files). 



-19?- 

The Cleveland, Ohio, ".^.A. Conroliance Office on 'Tovember 20, 1934, 
inquired of the Washington Conroliance Office: 

; 'Is an outside salesman employed by a men's clothing 
manufacturer guaranteed a weekly salary or may he he 
naid strictly on a commission has is, 'low many hours 
may he work, " 

An official of the T.R.k. Textile Division advised in response 
to this inquiry that: 

"There is no official interpretation covering outside salesmen, 
hut it is the o-oinion of this office that outside salesmen em- 
ployed on a weekly salary or commission basis are not subject 
to the provisions of the Code." (*) 

Various interpretations relating to the use of labels have been 
proposed by the Code Authority and submitter? for Administrative approval. 
One such interpretation provided for the classification of employees 
sewing on labels as manufacturing or non-manufacturing depending upon 
location of the operation in the factory. The Review 'Division ob- 
jected on the grounds that employees should not be classified by the 
location of identical operations. Another label interpretation was 
asked providing that labels should be attached to garments wnen in 
orocess of manufacture. Counsel of M.3.A. advised that this was not 
a proper subject for interpretation but should be submitted as a 
requested change in label regulations which could then be approved by 
the Administration. 

Similar to the last-mentioned interpretation submitted for ap- 
proval by the Code Authority was one -oroviding that employers could 
arrange with employees in making up holiday time to -out in 36 hours 
in any one week, with not more than 8 hours in any one day. This 
interpretation, submitted on October 15, 1934, was approved as an 
"explanation" under date of January 10, 1935. (**) 

With respect to interpretations relating to Article II (b) it is 
worthy of note that on January 17, 1935, Deputy Administrator 
M. D. Vincent explained the term : ' existing'" in this Article as 
follows: (***) 



(*) Memorandum from S. H. Ourbacker, Acting Assistant Deputy 

Administrator, to y.M.A. Compliance Division. ( :'en ' s Clothing 
Code Files, under Classifications). 

(**)' Letter dated January 10, 1935, from S. H. Ourbacker, Acting 

Assistant Deputy Administrator, to George L. 3ell, Executive 

Director, Men's Clothing Code Authority. (Men's Clothing Code 
Files). 

(***) Memorandum dated January 17, 1935, from "h D. Vincent, Deputy 

Administrator, to R, W. Fuchs, N.R,A. Counsel. (Men's Clothing 
Code Files, under' Code Exolanations) . 



9782 



-198- 



"Any normal representative week before July 14, 1933, 
may be agreed upon — as a basis for ore-Code calculations 
in order t« determine whether the differential as it 
then existed is being maintained in a normal repre- 
sentative post-Code week." 

The Code Authority in it? meeting of August 11, 1934, debated the 
advisability of issuing an interoretation concerning' Sections (e) and 

(f) of Article II of the Code, which provided: "(e) minimum wage 

established, in this Code shall constitute a. guaranteed minimum rate 

of -Day ;" and "(f) No increase in the amount of production or work 

shall be required of employees for the purnose of avoiding the 
benefits prescribed by this Code ." 

It wa.s suggested that the following interpretation be agreed 
uoon: 

"It is proper therefore to infer that the emoloyee shall 
not give any less work -oer hour than that given by him 
before the Codf. 

"If after the Code went into effect the -niece rates in 
your shop were established so as to yield to the worker 
at least the minimum wage without requiring him to do 
more work -oer hour than he had done heretofore, he 
should be paid the actual earnings on the basis of the 
piece-work rates so adjusted." 

Opposition to this interpretation was expressed by Mr. Fillman, 
labor representative on the Cone Authority, for the reasons indicated 
in the following excerpt from the minutes of the meeting: 

"Mr. Hillman opposed, such inter-ore tation, holding that 
an amendment to the Code was necessary; the Code pro- 
viding for a factual minimum. TT e was frank in stating 
that if the amendment was proposed he would op-nose 
such amendment because it would break down the minimum 
wage -orovisions of the Code. He said that the position 
of the union in the organized markets was made very 
clear and that the union at an Executive Session de- 
cided that they would not countenance any laydowns in 
any of the unionized markets. In the non-union 
markets, ir. "illman's opinion was that the employer 
could enforce production under the minimum wage by 
lay-off or discharge." 

E . Classific a tions . 

There is a record of only one instance of the official classifi- 
cation of a firm in connection with the lien's Clothing Code and that 
instance is covered by Administrative Order T o. 15-43, relating to 
the United Woolen Company, Columbus, Ohio. (The only other classifi- 
cation order outstanding is Administrative Order ho. 15-38, relating 
to "Cravenette, " etc., discussed in Chapter I). 



9782 



-199- 

The United w oolen Corroany sold products tc customers through 
outlet stores and advertised "custom- tailored suits, overcoats and 
uniforms." The Conroany had 10'"> factory employees, produced around 
500 suits a week, and operated on a 35-hour schedule, paying a 
minimum wage of 40 cents ier hour, and a minimum wage of 80 cents 
per hcur to journeymen. The Code Authority asserted that the 
Company's methods are identical with those of " tailor-to- the-tradp" 
firms under the Deri's Clothing Co^e, while the Company insisted that 
it came under the Merchant and Custom Tailoring Code, although the 
Code ATitnority of the latter had rejected tiie Company's membership. 
The Administration ruled -that the Comoany in its manufacturing 
activities fell under the Men 1 s Clothing Code. Its outlet stores, 
however, it was ruled, fell under the Retail Code. 

VI. COLLECTIO N ATJP US" 7 : 0?,-. STA TISTICS ■'•'•• 

In keening with the powers conferred u^on the Code Authority by 
Article VIII of the Code, members of the Industry were required to 
furnish nay roll data "showing by sex and occupation, number of 
people employed, and the rotes of wages naid," and Production data 
showing the number and tyoe of garments cut and made un. " Since 
May 21, 1934, members of the Industry have been requested to furnish 
a "Summary of Payroll Renorts" or a total of each page, in order to 
simnlify the large and complex task of compilation of such data. 

Under date of June 13, 1934, the Industry was advised that the 
Code Authority had entered into a cooperative arrangement with the 
Bureau of Labor Statistics of the United States Department of Labor 
for the collection of employment and nay roll da.ta. It was explained 
that under this arrangement pay roll reports which had been previously 
sent to the Code Authority were to be sent to the Bureau of Labor 
Statistics, Washington, D. C, where the reports were to be tabulated 
and then forwarded to the Code Authority. Likewise, it was arranged 
that renorts were to be filed on yellow sheets for uffice employees 
and on white sheets for manufacturing employees. This device was to 
simplify the compilation of the data and was to harmonize with the 
practice of certain states, thus making unnecessary the filing of 
many reports. 

An arrangement similar to that described above, but respecting 
production statistics, was entered into with the Bureau of the Census. 
The Code Authority Committee on Statistics reported, under date of 
March ?, 1934, that: (*) 

" - "rly in January a joint arrangement was consummated 
between the Bureau of Census and the Men's Clothing 
Code Authority, whereby all production statistics would 
be gathered jointly. The Bureau of Census sends out the 
schedules in franked envelopes to all manuf acturers on 
our list and on their list and receives the return in 



(*) Report of Committee on Statistics, dated March 2, 1934. (Men 1 
Clothing Code Files, under Committee Reports.) 



9782 



-200- 

in franked envelopes furnished each manufacturer. The Bureau 
of Census has undertaken to tabulate this data and supply the. 
results to the lien 1 s Clothing' Code Authority. Toward the ex- 
penses of this joint undertaking, the Bureau of Census con- 
tributes $2,360 a year end furnishes the franked envelopes. 
The Code Authority as its part pays $1,500 a year and furnishes 
the schedules. The schedules , adopted pre the schedules pre- 
viously approved by the Men's Clothing Code Authority." 

The data collected "by the Code Authority was used chiefly in its 
enforcement of various Code provisions, especially those having to do 
with wages. The most extensive compilati ons of general data covering 
the Industry were made in connection with the proposal to. add wage 
classifications to the original Code provisions. 

VII. Procedure Authorized But Hot Effected 

It is observed that the Code Authority made no recommendations with 
respect to the setting-up of a Service Bureau for engineering, account- 
ing, credit, etc., as it is empowered to do by Article XIII, Section D, 
Subsection (2) of the Code. Likewise, no action was taken under powers 
granted in Article XIII, Section B, Subdivision (5) which allows for 
establishment of an agency for supplying credit information. * 



(*) Letter dated February 8, 1935, from David Drechsler, Secretary, 

Men's Clothing Code Authority, to C. H. James, Executive Assistant, 
Textile Division, K.R.A. (Men's Clothing Code Files) 



9782 



-201- 

CHAPTSS V 

LABOH UNDER KEE CODE 

I. HOUR PHOYISIOi:S--ISSUES 15 T7RITI5G 

The lien's Clothing Industry Code provided in Article IV that 
hours of viork in the Industry except for certain designated groups 
"shall not exceed thirty-si:: (36) hours per reel: nor eight (8) hours 
per day. 1 ] Also, "employees shall not operate productive machinery in 
the Clothing Industry more than one shift of thirty-six (36) hours 
per we el:." 

The groups excepted from the 36-hour provision and for which 
it was provided that .vork shall -not be "in excess of an average of 
forty (40) hours per '/eel: during any year beginning with the effective 
date," were "repair shop crews, engineers, electricians, firemen, of- 
fice and supervisory staff, stock clerks, shipping clerks, truck drivers, 
porters, and watchmen." ( Code Authority estimated that this excepted 
class totaled approximately 35,000 during 1934.)* 

Article IV also provided that " tailoring- to-th'e-trade and manu- 
facturers of uniforms shall "be permitted overtime at regular rates dur- 
ing pepk seasons, the number of hours and the number of weeks to be 
determine-"- by the lien's Clothing Code Authority." 

Both codes proposed for the '/en's Clothing Industry favored a 
40-hour week. Proffcssor Herlove, adviser to the Clothing Manufac- 
turers Association, asserted that: 

"Government figures on wage earners, hours and volume of 
physical output indicate clearly that weekly hour maximum 
should be a maximum of 40 hours per week. It is firmly 
believed that the proposed weekly 40-hour maximum standard 
attains one of the principal objectives of the Industrial 
Recovery Act, that of absorbing completely the existing 
unemployed workers normally attached to the Industry."** 

'.forris Kolchin, of the Research and Planning Division, 1IRA, 
reached the conclusion that "It is evident that they cannot all be 
reemployed, either on a 40-hour week maximum or a 35-hour week maxi- 
mum, unless there is a considerable increased demand." Estimating 



(*) Letter feted January 23, 1935, from George L. Eell, Executive 
Director, lien's Clothing Code Authority, to S. H. Ourbacker, 
Acting Assistant Deputy Administrator, (lien's Clothing Code 
Piles.) 

(**) "Statistical and Economic, Analysis Related To Sections 11 and 
IV of the Code of Pair Competition for the lien's Clothing In- 
dustry," ~b:j S. E. i T crlove. Page 4. (lien's Clothing Code Files.) 



9732 



-202- 



that 48,000 were unemployed during the best month of 1935, Mr. Kolchin 
concluded that a 40-hour maximum might give employment to 3,150 unem- 
ployed, assuming an average of 27. 5 hours per week worked in 1932, and 
that a 35-hour maximum might give employment to 19,503 people.* 

In the course of hearings on the proposed codes, Labor Advisers 
urged the necessity of a shorter maximum hour provision than the 40 
hours asked by .members of the Industry. The final determination ap- 
pears to have been influenced by the National Recovery Administration. 

II. SPECIAL PRO 7ISI01IS FOE OVERTIME 

The two codes as originally proposed for the Industry made no 
provision for the exceptions finally provided for the Tailors- to- the- 
Trade Division and Uniform lianufacturers, although the codes were in 
close agreement respecting the special provision for the "excepted" 
occupational groups above listed. The Tailors-to-the-Trade group from 
the outset insisted that selling direct to the consumer on special order 
necessitated special provision in hours. Accordingly, the codal provi- 
sion agreed upon was a definite recognition that the business of Tailors- 
to-the-Trado is more highly seasonal than that of the Industry in gen- 
eral and does warrant longer /hours during the peak season. Uniform 
manufacturers similarly demonstrated that theirs was a special order 
business exit, highly seasonal. 

A . Overtime for Tailors-To-The-Trad c . * * 

Following are summaries of the Code Authority's resolutions 
respecting overtime in the Tailors-to-the-Trade Division for the peak 
seasons of 1933 and 1934 and for the spring season of 1935. 

Fall 193 3; After conferences with representatives 
of labor, the .ion's Clothing Code Authority agreed 
to give Tailors-to-the-Trade extra hours on the 
basis of 40 hours per week for a period not to ex- 
ceed six week's of the Fall season of 1933 up to 
and not later than November 30, 1933, provided 
plants satisfied the Code Authority that they had 
taken on additional employees to full plant capa- 
city. 

Spring 1934 ; Tailoring houses allowed to work 40 
hours a week during the month of ''arch for weeks 
ending March 1G, 23, and 30. During months of April 
and hay, tailoring houses may work up to 40 hours 

(*) "Material 3 ea ring on hen' s' Clothing Industry," by Liorris Kolchin, 

Division of Research and planning, NKA, dated August 10, 1933. 
(hen's Clothing Code Files.) 

(**•) Granted by the Code Authority in accordance with, Article IV 
of the Code; sue above and page 291. 



9782 



-203- 

a week during any four weeks of the two months in 
question, the privilege terminating on Decoration 
Day. Houses may petition Code Authority for privi- 
lege of working not in excess of 40 hours one addi- 
tional week during the month of May. Same regula- 
tions with respect to such overtime as prevailed 
during the Fall season were agreed upon. 

On ; arch 2, 1934, the L'en's Clothing Code Authority 
amended the Tailor s-to-the-Trade resolution as 
follows: 

"Due to the emergency the tailoring houses can work 
up to' 48 hours a week during the weeks ending March 24, 
and Larch 31, it being understood, however, that rates 
of pay would be tine and one-half for such hours worked 
in excess of an average of 42 hours during the two 
weeks ending L'arch 31." 

Puling on extra hours for tailoring houses insofar 
as it relates to contract shops: 

"The privilege to operate 40 hours under said con- 
ditions given to Tailors-to-thc -Trade houses under 
authority of the resolution passed by the Code Au- 
thority is limited to inside shops. This privi- 
lege cannot be extended when a manufacturer is hav- 
ing his work done on special orders in contract 
shops because, if conditions warrant, the manufac- 
turer can arrange to send additional work to addi- 
tional contract shops. For that reason, the privi- 
lege of operating extra hours granted to Tailor s-to- 
the-Trade houses refers only to inside shops." 

Fall 1534 ; Tailoring houses allowed to work 40 
hours per week any seven weeks beginning September 
17 and ending December 25. 7, r ork under same gen- 
eral terms as applied to Fall and Spring for 1933 
and 1934. This was approved by the Code Authority 
September 14, 1934. 

Above resolutions were amended to provide for any 
eight weeks instead of seven weeks during the 
present season ending December 25. Same condi- 
tions and requirements to apuly. 

Under date of I larch 2, 1935, the Tail or s-to-the-Trade 
group, applied to the Code Authority for overtime, stating a 
desire for 40 extra hours, beginning with March 15, and end- 
ing gay 30 at the regular rates of pay; further requested 
that the privilege be limited to inside shops and that privi- 
lege be confined to those operating at plant capacity and to 



9732 



-204- 

shops working solely in the making of garments to individual measure. 

This request for overtime during the Spring peak of 1935 was 
not approved in the particulars requested. The Executive Director 
of the Code Authority advised the Administrator on darch 13, 1935, 
that the previous ruling (confining overtime to inside shops) had 
received protests from contractors and their employers, so that the 
Code Authority finally agreed upon the following resolution on 
i arch 12, 1935: 

"Resolved, that Tailoring-to-the-Trade houses' 
may work 40 extra hours beginning with the 
15th day of darch, and ending the 30th day of 
day, 1935, at regular rates of pay providing, 
however, that no more than 3 hours in excess of 
36 hours may be worked in any one calendar week. 

"A Tailor-to-the-Trade house which wishes to 
ajvail itself of this privilege shall certify 
to the Code Authority that it has taken on ad- 
ditional employees to the full plant capacity 
and that the shop or shops in which overtime is 
used is engaged solely in the making of garments 
to individual measure." 

B. Overtime for Uniform danufacturers . 

Following are summaries of the Code Authority's resolu- 
tions respecting overtime for the Uniform danufacturing branch of 
the Industry for the peak seasons of 1953 and 1934 and for the 
spring season of 1935. ' 

Fall 1935 : After arrangements with labor, uni- 
form manufacturers allowed overtime of four hours 
per week for eight consecutive weeks commencing 
September 25 at the regular rates of pay. To ap- 
ply to manufacturers having their own .shops or in- 
side contract shops and in special cases where 
they have outside contract shops which work' ex- 
clusively for the individual uniform manufacturer. 
In this connection, the Executive Director advises 
that "At the time this arrangement was entered into, 
:' t was the pra.ctice of the Code Authority to accept 
the recommendation of its Labor members." 

Lpring 1934 : On darch 2, 1934, rational Associa- 
tion of Uniform danufacturers, after agreement 
with Labor Committee, requested a period of eight 
weeks of overtime at the rate of 40 hours per week 



9782 



-205- 



at the regular rates of pay. Overtime to begin 
April 2 and to encl the reek of May 26, applying 
to manufacturers' own shops and where contracting 
work is solely foi then. 3odo Authority agreed 
with the provision that additional employees 
would first be taken on to full plant capacity before 
before petition for overtime would be granted, 
and such petition must conform to the require- 
ments adopted by the Tailors-to-the-Trade In- 
dustry. 

Fall 1954 ; Uniform manufacturers were given 
privilege to work eight consecutive weeks 40 
hours per week, starting the week of September 
2d and ending November 19 under the same gen- 
eral terms and conditions as for Fall 1933 and 
Spring 1954. 

Under date of February 26, 1935, Harold U. Schwab, 
Executive Secretary, National Association of Uniform Manu- 
facturers, petitioned for overtime beginning April 1, for 
a period of eight weeks out of twelve weeks following under 
the sane general terms previously granted. It was explained 
that the preference for eight weeks out of twelve rather 
than consecutive weeks was in conformity to the Administra- 
tor ' s sugge s ti on . * 

C. Right of Dode Authority to Determine Overtime period . 

It should be recorded here that certain clothing manu- 
facturers questioned the right of the Code Authority to de- 
termine "just what shall be considered as their peak season." 
The Deputy Administrator, after receiving the complaint, ad- 
vised the Code Authority that "until the Code is amended to 
care for this situation, the Code Authority have all of their 
regulations in this connection approved by the MRA prior to 
their attempt to enforce them."** 



(*) Letter dated March 8, 1935, from Morris Greenberg, Executive 
Director of the lien's Clothing Code Authority, to Assistant 
Deputy Administrator Walter E. Woodford, Jr., (lien's Clothing 
Code Files.) 

(**) Letter dated November 5, 1934, from S. H. Ourbacker, Acting 
Assistant Deputy Administrator, to George L. Bell, Executive 
Director, Men's Clothing Code Authority. (Men's Clothing Code 
Files, under Employment.) 



97S2 



-206- 

III. EXEMPTIONS A1ID DENIALS OP ERUPTIONS 

On Eebruary 23, 1935, the Men's Clothing Code Authority ap*. 
plied to the Administrator for exemption from the hours provisions 
of the Code for the entire Industry excepting Tailors-to-the-Trade 
and Uniform Manufacturers. It was requested ths.t 40 hours per week 
be allowed for five consecutive payroll weeks "beginning March 4, 
1935, and ending April 6, 1935. In reouesting the exemption, the 
Executive Director of the Code Authority advised that the (a) late 
delivery of woolens and (b) excess of fancy models which have un- 
balanced highly skilled sections, were reasons justifying the over- 
time. The Administrator granted a ten-day emergency exemption pend- 
ing the submission of a formal order to the various Adnivory Boards. 
The formal order No, 15-61, dated March 12, 1935, was later issued, 
granting the exemption as requested. A supplementary Order No. 15- 
65, dated March 22, 1935, granted to the Tailors-to-the-Trade houses 
eight hours overtime, in addition to the peak season overtime already 
granted, to be used between April 6 and April 19, 1935, provided that 
wages be paid at the rate of time and one-half. 

Certain protests arose concerning the general hours exemption 
granted the Men's Clothing Industry for the period above indicated. 
Colonel E. M. Curlee, Counsel for the Industrial Recovery Asso- 
ciation, indirectly expressed his disapproval of at least the manner 
in which the exemption was handled by addressing the following ques- 
tions to the Deputy Administrator on February 2V, 1935, having read 
of the proposed request for exemption in the Daily News Record: 

"Was any notice given to the Industry of an application 
for this exemption and have there been any hearings 
held? If so, will you tell me where I can get the 
transcript of the record of the hearing. Have you any 
knowledge of whetner or not certain institutions have 
been operating on a schedule of more than 36 hours in 
anticipation of an order authorizing it?" 

Later, on March 15, 1935, Colonel Curlee, expressing further 
his opposition to the granting of the overtime period to the entire 
Industry, wrote to Deputy Administrator Vincent as follows: 

"Seasonal peak production is a curse- of the Men's 
Clothing Industry and prevails to the greatest extent 
in the Code Authority area. Members of our Association, 
at no. little inconvenience, risk, and expense, made 
their plans' for continuous production on a 36-hour 
basis. It affords an unfair competitive advantage to 
producers in the Code Authority area to permit them to 
evade the hazards of merchandising and then receive an 
indulgence which legalizes their historical vice, of peak 
production. If this is to be regarded as a precedent and 
is to become an established practice, certainly the 
method should be changed so that Producers not enjoy- 
ing the confidence of the Code Authority should be 



9782 



-207- 



advised a sufficient time in advance to avail 
thenselves of the benefits of these suspensions of the 
law. 

"I am instructed by the Industrial Recovery Asso- 
ciation of Clothing Manufacturers to protest to you 

against this so-called 'stay' as vicious in principle 
and as having been improperly hranted without notice 
to the industry." 

The Administrator replied to Colonel Curlee on March 5, 1935, 
advising of the granting of an emergency exemption pending approval 
of a formal order, adding, "no hearing on the application was held 
for the reason that the overtime exemption was granted for the entire 
industry...." Again, on March 23, 1935, Deputy Administrator Vincent 
stated in a letter to Colonel Curlee: 

"The facts before the National Recovery Administration 
appear to clearly justify the exemption. Briefly, for 
your information, the situation appears to be that pro- 
duction in February sharply increased over January, 
this year. The emoloyment figures are perhaps the 
best indication of the industry's need for overtime. 
At this time employment is at the highest peak since 
approval of the Code, 

"My recommendation of approval of the exemption is 
based broadly uoon the fact that neither the Code Author- 
ity nor the national Recovery Administration should 
retard or limit production in the face of market demands. "(*) 

A more direct protest against the granting of the general hours 
exemption came from the Philadelphia Joint Board of the Amalgamated 
Clothing VJorkers of America. This group urged that the Order be with- 
drawn and that no repetition of 'such action take place in the future. 
Reasons for this stand were expressed as follows: 

"...There is no shortage 'of labor because we are in 
a position to supply all help necessary from our 
unemployed membership and whereas there are a number of 
firms in the city not availing themselves of these 
extra hours, among them being three of our largest man- 
ufacturers... we feel the granting of a forty hour week - 



(*) Letter dated I Larch 23, 1935, from II. D. Vincent, Deputy 
Administrator, to Colonel F, M. Curlee, Industrial Re- 
covery Association of Clothing Manufacturers. (Men's 
Clothing Code Files, under Employment, Overtime Exemp- 
tions. ) 



9782 



•203- 



to the Men's Clothing Industry for even a tem- 
porary period of two to five weeks is a move on the 
part of same employers to introduce the ofrty hour 
reek. " 

Whether or not the suspicions of this labor group were war- 
ranted is not known. The files dp not show any evidence that 
members of the Industry were desirous of a change in the hour pro- 
visions of the Code. There were to be sure, individual firms which 
desired exceptions and exemptions, which situation is the subject 
of the following division of this Chapter. 

A. Exemptions From Hour Provisions Granted Small Groups and 
Individual Firms. 

It is significiant that the Men's Clothing Code Authority- 
consistently took the position that it did not have the authority 
to grant exemptions under the Code. All requests for hours exemptions, 
as well as others, were directed to the Administration, sometimes 
with a recommendation from the Code Authority. 

In the" survey of hours cases oelow, it is important to remem- 
ber that all hours exemptions both granted and requested have had to 
do with employee hours. It is of course understood that a request 
for or a grant of exemption from employee hours automatically carries 
a request for or exemption from machine hours. There is not dis- 
covered, however, in the Administration's files a request for exemp- 
tion from that section of Article IV of the Code which provides, 
"Employers shall not operate productive machinery in the Clothing 
Industry mure than one shift of thirty-six (06) hours per week." In 
the Men's olothing Industry prior to the Code, the single shift was 
customary and the peak seasons were taken care of by long employee- 
hours. ^Eyen with the codal restriction of employee hours to 36 per 
week, there did not develop in the Industry a demand for a double 
shift. 

Order Wo. 15-8 , dated February 23, 1934, granted four hours 
overtime, upon the recommendation of the Code Authority, to five 
New Orleans, La. , firms, namely: Leon Godchaux Clothing Company, 
Haspel Bros., Inc., Famous' Sternberg, Inc., Hirsch & 3aar, and A. 
Solomon. These firms were manufacturers of summer clothing. Reasons 
for the granting of the exemption were: (l) Firms were in competi- 
tion with men's work clothes manufacturers working under the Cotton 
Garment Code, which had a maximum work week of 40- hours (at that 
time). (2) Firms accustomed to 58 hours per week and new 36-hour 
schedule would create shortage in labor market. (3) No unemployment 
in this branch of the Industry, and no surplus labor market. 

Order No. 15-59 , dat'ed February* 12, 1935, terminated Order 
Ho. 15-8 discussed above. This termination was effected at the re- 
quest of the Hen's Clothing Code Authorit]' on the grounds that the 
exemption had been granted originally to allow the Ne^ Orleans firms 
to compete with the Cotton Garment people on a comparable basis of 
40 hours and, "now that the prevailing hours under the Cotton Garment 

9782 



-209- 

Code have been changed to 36, exemption from the Men's Clothing Code 
rith like hours is unnecessary to fair competition." 

Order Ho. 15-11 .dated April 27, 1934, provided for exemption 
of all Puerto Mean manufacturers from hours and wage provisions of 
the Lien's Clothing Code. For the two or three firms ship-Ding to 
Continental United States, 40 hours maximum per week was allowed. 
(For firms not shipping to Continental United States, complete 
exemption from this Code was provided.) The Puerto Ricans, in pe- 
titioning for relief, argued that workers in their country could 
not produce comparably to workers on the mainland; that workers with 
approval of the Commissioner of Labor of Puerto Rico were satisfied 
with much lo^er wage and hour standards than provided by the Code; 
that linen suits produced did not offer unfair competition to makers 
in the United States. 

Representatives of the Hen's Clothing Code Authority favored the 
general exemption for Puerto Rico, and Executive Director 3ell, on 
March 2, 1934, advised the Code Authority: 

"...The volume of clothing exported from Puerto 
Rico appears to be grossly exaggerated, and the re- 
ports of the Bureau of Foreign and Domestic Commerce 
"ere apparently incorrect. \Je are informed that the 
Government report included men's underwear as men's 
clothing. The indications are that at present there is 
no real competition from Puerto Rican markets." 

By Order I>To. 15-54 , d^ ted January 16, 1935, the provisions of 
Order Ho. 15-11 -ere extended to June 1, 1935. The Code Authority 
gave approval with the suggestion that the Order- should not be made 
permanent and that by June 1 a plan could be worked. out on a per- 
manent basis. 

Order Ho. 15-12 , dated May 10, 1934, granted the G-oodall 
Company, of Knoxville, Tenn. , the privilege of working four hours 
overtime weekly until July 1, 1934. This Company engaged in the man- 
ufacture of Palm 3each clothing and was granted the exemption upon 
fundamentally the same grounds as was granted the exemption to the 
New Orleans manufacturers discussed under Order Ho. 15-8. above. 

On October 17, 1934, the Perry and Juden Company, New Orleans, 
was granted an emergency exemption by telegram, allowing the Company 
to work 15 hours overtime during the eight days from the date of the 
telegram. The reouest for this exemption came from the Uniform Man- 
ufacturers Division of ■ the Men ' s Clothing Code Authority, and was for 
the purpose of enabling the Company to complete its contract with the 
Louisiana Sta.te University .which requested uniforms for a demonstration 
planned for a certain day. 

The Louisiana State Director of Compliance objected to the ex- 
emption under date of October _25, 1934, asserting that undue political 
influence had been exerted by Senator Euey.Long. The Administrator in 
replying to this criticism explained the origin and nature of the 

9782 



-210- 

request for exemption, saying that Senator Long's name had not 
ap-oeared in the transaction. (*) 

On January 25, 1935, the Division Administrator granted a 
ten-day emergency exemption to Joseph & Feiss Co., Cleveland, Ohio, 
permitting the Convoany to work fifteen employees 8 hours daily 
for 6 days for a period not to exceed two weeks. This exemption 
was granted "because incorrect sewing machines had been supplied the 
Company, and had delayed operations and handicapped enroloyment 
throughout the entire factory. 

For some reason, the formal Order approving the exemption for 
a two-week Period as requested, from January 25, 1935, up to and 
including I abruary 7, 1935, was mailed out to Joseph & Feiss under 
date of February 18, 1935. Relative to which, Mr. Paul Feiss wrote 
"while appreciating the evidence of cooperation of the Recovery Board, 
regret that the authorization arrived too late to be of any help to 
us, so that we did not avail ourselves of the permission granted. (**) 

On March 2, 1935, the Division Administrator granted by 
telegram a ten-day emergency exemption to DeMoulin Brothers, Co., 
Greenville, 111. , permitting the company to work twenty-five- em- 
ployees of various occupations for forty hours per week for a per- 
iod of three weeks beginning March 4, 1935, pending formal ruling. 

This exemption was extended by formal order No. 15-62, March 3, 
1935, on the grounds that the company had secured several orders for 
band uniforms requiring immediate delivery 

Order Ho. 15-60 A, dated March 7, 1935, granted to Bradford 
College Clothes Co. , New York City, exemption from the hours pro- 
visions of the Code in order. that the Company be enabled to com- • 
pete on time a CCC contract for 20,000 pairs of trousers. It was 
asserted that this contract was delayed in fulfillment because of a 
breakdown in machinery. 

On March 15, 1935, the Division Administrator granted to the 
Mcintosh Studio Clothes Manufacturers, Los Angeles, California, an: 
emergency exemption of ten dnys by telegram. The petitioner claimed 
and was supported by the Label Review Officer for the Pacific' Coast, 
that special motion picture wardrobe orders created an emergency. 



(*) Letter dated November 1, 1934, from Deputy Adrainis- 
trr ior Dean G. Edwards, to Director S. J. Gay, State 
Director of Compliance for Louisiana. (Men's Clothing 
Code Files. ) ' . 

(**) Letter dated March 6, 1935, from Paul Feiss to 
National Recovery Administration. (Men's 
Clothing Code Files.) 



9782 



-211- 

This exemption, "by Order No. 15-63, dated March 15, 1935, was ex- 
tended to allow four hours weekly overtime at time and one-half, 
or the privilege of an extra shift at the usual rates of pay. 

Order No. 15-64 A, dated April 12, 1935, granted to Sheuerman 
Bros., Inc., Des Moines, Iowa, an exemption from the codal hours 
provisions for ten days, because of a "breakdown of certain machin- 
ery. This exemption allowed the Company to work twelve pressers 
one hour overtime each day for ten days at time and one-half pay. 

Order Fo. 15-65 A , dated May 3, 1935, granted to H. A. 
Seinsheimer Co., Cincinnati, Ohio, the privilege of working twelve 
basters, twenty-five hand workers, including fellers, ten pressers 
and ten operators, six hours over time on Saturday, May 4, 1935, 
on sample work only, providing time and one-half was paid for 
overtime. 

Order Fo. 15-65 B , dated May 11, 1935, granted to Rose 
Brothers, New York City, the privilege of working fifty cutters 
one hour overtime each day for ten days, provided time and one- 
half he paid for overtime. The request for exemption was "based 
on threatened cancellations due to delay in cutting. It was 
asserted that the Comaony normally employed 50 cutters, hut now 
had 100 with no room for expansion of the plant. 

Order No. 15-68 A , dated May 22, 1935 granted to I.tort0a»Brc;3; New 
York City, the privilege of working its entire force one hour over- 
time each day for a ten-day period beginning May 23, provided time 
and one-half he paid for overtime. This Order, which carries no 
reason for the granting of the exemption, was recommended by the 
Code Authority and was approved by the Labor Advisory Board. 

Order Fo. 15-68 3, dated May 22, 1935, granted an exemption to 
the Champion Pants Manufacturing Co., New York City, allowing the 
Company to operate its cutting room at Perkasie, Pa. , one hour 
overtime each day for a ten-day period beginning May 23, 1935, pro- 
vided time and one-half be paid for overtime. This Order states 
no reason for the exemption, but carries the recommendation of the 
Code Authority and the Labor Advisory Board. 

B. Denial of Requested Exemptions from Hour Provisions . 

The Sigmund Eisner Co., of Redbank, New Jersey, on November 15, 
1934, requested an exemption from the hours provisions of the Code 
for a period of two weeks beyond the eight weeks overtime period 
accorded the Uniform Manufacturers. The request for extension of 
the overtime period was based solely on the contention that the 
textile strike had delayed delivery of piece goods. On March 16,1934, 
the Administrator advised that the condition cited by the applicant 
applied to the entire Industry and constituted no grounds for special 
consideration. 

Order No. 15-47 , dated January 3, 1935, denied the application 
of the William Bradford plant of Kling Bros. & Co. , Chicago. The 

9782 



-213- 

Conroany's appeal was based on the asserted impossibility of meet- 
ing orders with lack of experienced workers in Eavenport, Iowa. The 
Code Authority opposed this reouest for exemption on the grounds 
that the Company had deliberately left Chicago where it had oper- 
ated for several years and where a surplus of labor existed. Code 
Authority argued that surplus work could be sent to available con- 
tract shops and that bo gran!; the Company's request would create a 
precedent in the direction of 'Breaking down the codal provisions. 
When requested by the Administration, the Company failed to sup- 
port its contention that more continuous employment was afforded at 
the Bradford plant than prevailed throughout the Industry. 

Orde r No. 15-56, dated January 30, 1935, denied to N. Snellenber^ 
& Co., of Philadelphia, Pa., a reouest for four hours overtime for 
period from November 22 9 1934. to December 15, 1934. The Conroany 
gave as reasons for the request "several municipal contracts for 
police overcoats are now past due, 1 ' and that the plant had been 
running to capacity since the beginning cf the season. The Code 
Authority opposed this request, stating .that the Company had 
already had 40 hoars for eight consecutive weeks as allowed other 
members of the Uniform branch of + h^ Industry, and that no special 
grounds existed bo. justify an extension. 

Order JTo, IF 57, dated February 2, 1935, denied to Wender 
and G-oldsfein, Lnce, Kew York City, a request for four hours 
overtime for four weeks from December 5, 1954. No reasons for 
denial are -given in the Order., The Code Authority favored de- 
nial, however, on the grounds that there was an "adequate labor 
supply in New York City to meet any emergency — no special cir- 
cumstances seem to warrant exemption* " 

Order No, 15-37 , dated November 13, 1934, denied overtime 
to the Neptune Manufacturing Co., Louisville, Ky. , on the grounds 
(l) Mis-statement of fact by the applicant as to permission grant- 
ed by the labor union; (2) Failure to show facts indicating that 
conditions or circumstances were exceptional; (2>) Setting of pre- 
cedent of granting overtime will tend to break down codal pro- 
visions. This denial was approved by the Legal Adviser with the 
suggestion that the applicant be infarmed of his rights and proper 
procedure and that the Cede Authority was remiss in not so ad- 
vising the applicants, The Research and Planning Division suggest- 
ed that the applicant be given opportunity to present information 
sufficient to form basis of judgment. 

On January 19. 1935, the E. E, Smith Co., of Bethel, Ohio, 
petitioned for an hours exemption, claiming that lack of off- 
pressing machines necessitated additional employees to work over- 
time. Company also stressed need of employing "green" help from 
time to time c The petition was made direct to Washington but 
upon reference to the Code Authority elicited tne recommendation 
that petition be denied. Administrator advised of method of appeal 
to Administration and suggested that the plant would be investigated 
by the Code Authority. When the petitioner advised on February 28, 

9782 



513- 



1935, as to the impossibility of specifying his exact requirements 
Tor overtime, the administrator then called attention to the fact 
that the entire Industry was being granted overtime and it was hoped 
that this would solve the Company's difficulty in production. The 
Company was further advised that the learner problem had not been 
settled by N.ReA. 

Order No* 15- 1G, dated May 14, 1935 denied overtime to 
Kurtzman Bros., Los Angeles, California. The applicant claimed 
that it could not use the extra hours previously granted the In- 
dustry; also claimed that its season did not correspond to that 
of Eastern markets. The Code Authority had recommended denial on 
the grounds that the Company was confronted with no peculiar con- 
ditions placing it at a disadvantage with other members of the 
Industry and that the overtime granted the Industry had been 
used by this firm. 

Order No. lS-o' 7 , dated May 17, 1935, denied the North Chicago 
Clothing Company permission to operate a coat shop forty hours 
for one week. The Company had based its request for overtime on 
the need to meet a number of special rush orders. The Code Au- 
thority advised the Administration that the applicant was suc- 
cessor to a company held to be in violation of wage provisions of 
the Code. 

IV. WAGS PROVISIONS AMD ISSUES IN WRITING 

The Men's Clothing Code as adopted on August 26, 1933, pro- 
vided in Article II, for a minimum wage of 40 cents per hour for 
manufacturing employees in the Northern area and 37 cents in the 
Southern area; for non-manufacturing employees a minimum wage of 
$14 per week in the Northern section and $13 in the Southern sec- 
tion. Employees working on single knee pants were to be paid at 
the rate of 37 cents per hour. A minimum wage for cutters was 
established at $1.00 per hour, and a minimum for off-pressers at 
75 cents per hour. It was further provided that "the existing 
amounts by which wages in the higher-paid classes, up to classes 
of employees receiving $30 per week, exceed wages in the lowest- 
paid substantial classes shall be maintained." 

In sub-section (d) of Article II it was provided that the 
Code Authority "nay appoint a committee to supervi se the execu- 
tion of the foregoing provisions." 

The above provisions of the Code respecting rates of pay were 
amended as follows: On December 15, 1933, by Executive Order, 
Article III of the Code was amended to allow the employment of 
learners for a period of three months after December 11, 1933, 
to be paid not less than 70 per cent of the Code minimum wage; 
on the same date it was -provided that handicapped workers may be 
employed at a compensation not less than 70 per cent of the Code 
minimum wage. The proportion of such persons was not to exceed 
5 per cent of the total employed in any one plant, and all ex- 
emptions were subject to review and denial by the Code Authority. 

9782. 



-214- 

On December 18, 19133, the wage provision regarding workers on 
knee pants was deleted and a provision was substituted there- 
for providing a wage for such workers of 37 cents per hour in the 
Northern area, and 34 cents in the Southern area. On the same 
date, it was provided that employees working on wash suits of 
100 per cent cotton content be paid 34 cents per hour in the 
Southern area, and 37 cents in the Northern area. The wage rates 
respecting cutters and off-pressers were similarly changed to 
provide a rate of $1,00 per hour and 75 cents per hour respectively 
in the Nortnern area as against 85 cents and 65 cents respective- 
ly in the Southern area. 

The two codes first prepared for the Men's Clothing Industry 
were fairly well in agreement respecting minimum wages, out their 
positions were irreconcilable with regard to rages above the 
basic minimum. The Code proposed by the Clothing Manufacturers 
Association recommended a basic minimum of 35 cents per hour in 
the Northern area, and 32* cents in the Southern area; a minimum 
for cutters at the rate of 80 cents per hour; and that "e xisting 
amounts by which wages in the higher-priced cl a sses, up to work- 
ers receiving $50 -per week , ex ceed wages in the l o west paid class - 
es, shall be maintained. ". The Industrial Recovery Association's 
proposed Code recommended that wages of all e m ployees be raised 
20 per cent above the rates prevailing July 1, 1933 ; a minimum of 
35 cents per hour in the North and 32^- cents per hour in the South, 
It was suggested also that apprentices be employed at a mrnimum wage 
not less than 75 per cent of the established minimum; payments 
at the rate of time and one-half was recommended for repair crews, 
engineers, and similar groups for overtime in excess of forty 
hours per week. 

With respect to w-^ges above the minimum, the Industrial 
Recovery Association would not yield, but protested the general 
provision of the opposing group for the "higher paid cla.sses" on 
the ground "that it was vague, indefinite, and uncertain, and 
incapaole of definite interpretation and application." (*) The 
proponents of the finally adopted provision for -"'ages above the 
minimum replied, together with the Deputy 'Administrator in charge, 
that where the application of this provision would result in 
hardship, +he Code Authority could give relief. This suggestion 
was objected to on the ground that the higher wage bracket of each 
manufacturer would be dependent upon the discretion of the Code 
Authority. 

In support of its suggested provision for apprentices, the 
Industrial Recovery Association argued that there is little or 
no trained labor to be recruited in the smaller communities and 



(*) Statement of Industrial Recovery Association of 

Clothing Manufacturers, February 2, 1935. Page 9, 
(The "Green Book" — Men's Clothing Code Files). 

9782 



-215- 

t some allowance in wages should be made for the training of 
raw c eg inn e'rs. (* ) •. 

In the final determination of the Code vage rates, the De- 
puty Administrator seems to have relied principally upon a Report 
of the Research and Planning Division, which is mentioned in the 
Deputy's recommendation of the Code for approval. The Research 
and Planning Division had concluded that the establishment of a 
40-cent minimum hourly rate in conjunction with a 36-hour week 
would result in a 28 per cent increase in the total payroll of 
the Industry, estimated to represent an increase of around 
$100,000,000 a year. (**) The Clothing Manufacturers Association 
had estimated on the other hand that a 35-cent minimum wage com- 
bined with a 40-hour week (allowing for a possible rise of 50 per 
cent in raw material prices) would approximate -a 35 per cent rise 
in the cost of suits. (***) 

A. Proposed Amendments of ffa"e Provisions. 

During the period of February 2-4, 1935, hearings were held 
in Washington on two separate amendments, each classifying work- 
ers for the purpose of setting up additional minimum wage rates. 
One amendment proposed by the management members of the Code 
Authority classified workers in the Industry into about fifteen 
classes, with separate wage scales ranging from 4) cents per hour 
(the existing minimum) to Si. 00 per hour. The labor members of 
the Code Authority proposed an amendment similar in principle to 
management's proposal, but providing for about thirty different 
classes of workers, with separate wage scales ranging from 40 cents 
per hour to $1.00 per hour. Management's proposal, but not labor's, 
included a twenty per cent tolerance for sub-normal workers. 

To understand the nature and extent of worker classification, 
which would have resulted with the adoption of management's pro- 
posal, it should be noted that, excluding cotton suits and single 
pants, where a 37-cent rate prevailed for all operators (except 
cutters and off-pressers) , only five minimum rates of pay would 



(*) Statement of Industrial Recovery Association of 

Clothing Manufacturers, February 2, 1935. Page 107. 
(The "G-reen Book" — Men's Clothing Code Files). 

(**) "Material Bearing on the Men's Clothing Industry," 
August 10, 1933, by Morris Kolchin. (Men's Cloth- 
ing Code Files. ) 

(***) Statistical and Economic Analysis Related to 

Sections II and V of "Code of Fair Competition for 
the Men's Clothing Industry", by S. K. Nerlove. 
Page 45. (Men's Clothing Code Files.) 



9782. 



-216- 

resu.lt, including those provided for in the Code, namely: $1.00, 
75 cents, 65 cents, 50 cents, and 40 cents. The Code Authority- 
estimated that of the manufacturing employees classified by type 
of operation and by management's amendment proposal, the 40-cent 
minimum \?as applicable to 34.9 per cent of the total, the 50-cent 
minimum was applicable to 51.8 r>er cent, the 65-cent minimum was 
applicable to 3.5 per cent and the 75-cent minimum and above 
was applicable to 9.8 per sent. 

It was generally agreed that the proposals to add new mini- 
mum wage rates to the Men's Clothing Code arose from the consider- 
able difficulty which the Code Authority experienced in attempting 
to enforce Article II (b), which dealt with ' ,r 7ages in the higher- 
paid classes. " The management members of the Code Authority, in 
support of their amendment, submitted statistical data purpoting 
to prove that unfair competition in labor costs was occuring in 
the Industry at wage's above the minimum. It was indicated that (*) 
"although the number of workers receiving the minimum for all es- 
tablishments combined is 19.7 per cent, some establishments pay 
over 50 per cent of their workers only the minimum, and in indi- 
vidual cases as many as 80 perf cent are at the minimunu " The 
Code Authority further argued that the new rates were necessary as 
an administrative means of enforcing Article II (b); would make un- 
necessary continued reference to July, 1933, for purposes of 
estimating wages; would simplify compliance in that employers and 
employees (through posted rates) would be definitely informed as 
to proper wage rates; would be applicable to firms organized sub- 
sequent to adoption of the Code, not subject to Article II (b). 
It was additionally asserted that the- wages as proposed would 
affect only a small proportion of the Industry and would have no ef- 
fect on clothing prices and that the rates were not designed to 
equalize hourly wage rates throughout the Industry. 

The minimum rates proposed by the labor group of the Code 
Authority agreed in principle with the proposals of the manage- 
ment group. Labor, however, favored a higher average minimum than 
did management, and desired the recognition of more occupational 
classes including workers in pants establishments. Labor expressed a 
fear that the tolerance provision of management's .proposal would 
result in an unfair disciplinary device. 

The arguments presented against these amendments by the Indus- 
trial Recovery Association were that the plan for classified rates 
was contrary to general F.F..A. policy; would place a burden in wage 
costs upon certain members of the Industry; would favor unionized 
contract establishments as against integrated non-union establish- 
ments; would increase the cost of clothing to consumers and react 
against the Industry as a whole; that present lower wage rates make 
for greater continuity of employment; would stimulate further mass 



(*) See Transcript of Hearing on Amendments to Hen's 
Clothing Code, February 2 — 4, 1935. 

9782. 



-217- 

production by mechanical inprovements to disadvantage of workers; 

id would make for added confusion in attemnting to adjust an hour- 
ly base rate to niece rate method of payment prevailing in the 
Industry. (*) 

In this February 2 — 4, 1935, wage hearing, the Industrial 
Recovery Association, in addition to opposing the amendments offer- 
ed by the grouos on the Code Authority, recommended counter amend- 
ments of their own to provide: (l) "that all wage provisions other 
than that for the minimum be deleted." (2) "that Article II be 
so amended as to make the definition of North and South conform 
with economic, historic and geographic realities." 

Regarding the last-mentioned amendment proposal, it should 
be recorded that the issue of the North-South areas had been raised 
before in this Industry. The codal definition placed the State 
of Virginia in the Northern area. As early as September, 1933, we 
find the Friedman-Harry Harks Clothing Company, of Richmond, Virginia, 
protesting this arrangement on the grounds that the .system of pro- 
duction in Virginia is different from that in the North, and that 
trained workers were not so plentiful in Virginia as in Northern 
cities. (**) Similar protests were lodged with J the Administration 
by Sam Finkelstein and Comuany, Norfolk, Virginia. 

Following the February 2 — 4, 1935, hearing on the proposal to 
amend the wage provisions of the Code, there was submitted on April 
4, 1935, to the various Advisory Boards of N.R.A. for consideration and 
recommendation, the following Order designed to put into effect upon 
Administrative approval new codal wage provisions: 



."AMENDMENTS 

"ARTICLE II OF THE CODE OF FAIR 
COMPETITION FOR THE MEN'S CLOTH- 
ING INDUSTRY BE AMENDED TO READ 
AS FOLLOWS: 

"Section A- 

"1. The minimum -vage which shall be paid by em- 
ployers in the clothing industry to their employees 
employed as cutters, shall be at the rate of one dol- 



(*) See "Statement of Industrial Recovery Association of 
Clothing Manufacturers" ("G-reen Book") before the 
N.I.R.3. and K.D.Vincent, Deputy Administrator, Feoruary 
2, 1935. (Men's Clothing Code Files.) 

(**) Letter dated September 14, 1933, from Senator Harry 
E. 3yrd, to Deputy Administrator Lindsay Rogers. 
(Men's Clothing Code Files.) 



9782. 



-218- 

lar ($1.00) r>er hour "hen employed in the northern 
section of the industry, and at the rate of ninety 
cents (90<£) per hour when enroloyed in the southern 
section of the industry. 

"2. The minimum wage rhich shall be paid by em- 
ployers in the clothing industry to their employees 
enroloyed as cutters of men's wash suits of one hundred 
ner cent (lOO;^) cotton content, when enroloyed in the 
southern section of the industry, shall be at the rate 
of eighty-five cents (85r) per hour. 

"3. The minimum wage which shall be paid by em- 
ployers in the clothing industry to their employees 
employed as off-pressers, shall be at the rate of 
seventy-five (75^) per hour when employed in the 
northern section of the industry, and at the rate 
of sixty-seven and a half cents (67-^rf) per hour 
when employed in the southern section of the industry. 

"4. The minimum wage which shall "ie paid by em- 
ployers in the clothing industry to their employees 
employed as off-pressers of Men's wash suits of one 
hundred per cent (lOOfo) cotton content, when enroloyed 
in the southern section of the industry, shall be at 
the rate of sixty cents (60^) per hour. 

"5. The minimum wage which shall be paid by em- 
ployers in the clothing industry to their employees 
engaged in operations requiring the use of a machine 
for sewing, basting, padding, tacking, stitching, but- 
tonhole making or button sewing, or of any other ma- 
chine requiring the use of thread, shall be at the 
rate of fifty-five cents (55«0 per hour when employed 
in the northern section of the industry, and at the 
rate of fifty-cents (50rf) per ho\ir when employed in 
the southern section of the industry. 

"6. The minimum wage which shall be paid by em- 
ployers in the clothing industry to their employees 
employed in any operation (other than off-pressing) 
requiring the use of a hand pressing iron or a press- 
ing machine, shall be at the rate of fifty-five cents 
(55<#) per hour when employed in the northern section 
of the industry, and at the rate of fifty cents (50rf) 
per hour when employed in the southern section of the 
industry. 

"7. The minimum wage which shall be paid .by em- 
ployers in the clothing industry to !their employees 
employed in all hand operations, shall be at the rate 
of fifty-five cents (55<£) per hour when employed in 
the northern section of the industry, and at the rate 
of fifty cents ( 50^) per hour when employed in' the 



9782. 



-219- 



southern section of the industry, (following to be printed in 
italics) except thread-makr catting; turning, paring or trim- 
ming away of surplus materials; finishing or felling of any 
kind; buttonhole marking, cutting and making; button marking, 
button sewing, ticket sewing; cleaning; basting pulling; marking; 
measuring, and that as to such excepted operations the minimum 
wage rhich shall be paid by employers in the clothing industry 
to their employees, shall be at the rate of forty cents (40(0 
per hour when employed in the northern section of the industry, 
and at the rate of thirty-seven cents (37$) per hour when em- 
ployed in the southern section of the industry. It is intended 
that 'paring or trimming a^ay of surolus materials' and 'marking, 
measuring' shall not include shaping fronts, collars and bottoms. 

"8. The minimum wage which shall be paid to all manu- 
facturing employees (other than cutters and offpressers herein- 
before provided for N , working on men's wash suits of one hundred 
per cent (100$) cotton content, shall be at the rate of thirty- 
seven cents (37$) per hour when employed in the northern section 
of the industry, and at the rate of thirty-four cents (34$) per 
hour when employed in the southern section of the industry. 

"S. The minimum rage which shall be paid by employers 
in the clothing industry to any of their manufacturing employees 
who have not been hereinbefore classified, and have not been 
identified by the operations to be performed by them, or the 
nature or kind of garment upon which they are employed, shall 
be at the rate of forty cents (40$) per hour when employed in 
the northern section of the industry, and at the rate of thirty- 
seven cents (37$) per hour when employed in the southern section 
of the industry. . 

"10. The minimum wage rrhich shall be paid by employers 
in the clothing industry to any of their non-manufacturing em- 
ployees, shall be fourteen dollars (314.00) per week when em- 
ployed in the northern section of the industry, and thirteen 
dollars ($13.00) per week when employed in the southern section 
of the industry. 

"11. 'Southern section' of the industry shall included 
Alabama, Arkansas, C-eorgia, Louisiana, ' 'ississippi, North Carolina, 
Oklahoma, South Carolina, Tennessee, Texas, and Florida. The 
'northern section of the industry shall include all other states 
in the United States. 



9782 



-220- 

"Se tion 3 - 

"The provisions for the minimum wage established in this 
Code shall constitute a guaranteed minimum rate of pay in con- 
nection with Loth a tine rate or s piece-work hasis of com- 
pensation. 

"Section G - 

"'Jo increases in the amount of production or work shall 
he required of employees for the purpose of avoiding the ben- 
efits to employees prescribed by this Code in respect of rr ages 
and hours of employment. All requirements in respect of such 
increases shall he reported to the '."en's Clothing Code Authority. 

"Section D - 

"Persons whose earning capacity is limited because of phys- 
ical or mental handicap, may be employed at a wage below the 
minimum established by this Code, provided — 

"1. That they shall be paid proportionately no less than 
the other employees receive for similar work, but in no ca.se 
shall their compensation amount to less than seventy per cent 
(700) of the amount required by the I.inimum Wage Provisions of 
this Code. 

"2. That the proportion of such excepted persons to the 
total number of employees in any plant shall not at any tine 
exceed five per cent (5^). 

"3. The Code Authority shall have the right to investi- 
gate and disallow any claims for exemption. The decision of 
the Code Author it - " - shall be final and the employer shall comply 
therewith, unless and until the National Industrial Recovery 
Board shall upon appeal dj an employer or employee, disapprove 
the decision of the Cod.e Authority. 

"4. That where it has been the custom of an employer to 
maintain a proportion of such employees in excess of five per 
ce ".t (5^1) of the total number of employees in his plant, the 
Code Authority may, upon application and proof, allow the em- 
ployer to employ more than five per cent (5fj) of excepted per- 
sons, subject to these provisions. 

"5. That on or before the tenth (10th) day of ea.ch month, 
the employer shall prepare and transmit to the Code Authority a 
list for the preceding month of such excepted persons, stating 
names, class of occupation, wage rating, length of service, and 
reasons for exception. 

"6. These exceptions shall not be used by employers as a. 
device to evade the provisions of this Code. 



9732 



-221- 

"7. 'The Code Authority shall report to the national ' 
Ini stria] Recover;' Board within three (3) r.ionths, and 
fron tine to tine thereafter, as to the effect of these 
provisions, both generally and in cases of individual hard- 
shin, so that the National Industrial Recovery Sor.rd nay 
determine,, in its discretion, whether or not the provisions ■■ •. 
of this amendment shall he continued or changed.' 

"Section S. - 

"Znployees em-ployed in the OT>~rations included in Sub- 
divisions 5, 6, and 7^ of Section A of this Article:, hwhose. • ( ■ 
speed of production is' subnormal and who are rated by the 
• employer as 'slow workers 1 , nay be employed at a vwage:. be- 
low the nirina established in said Subdivisions 5, 6, and 7 
-of Section A of this Article, provided: 

"1.. That they shall be paid proportionately* no., less .• 
: than the other employees- receive" for sinilar work,\but in 
no case shall their compensation anount to less than forty 
.cents (40$*) per hour when emoloved in the northern section, 
of the industry, and thirty-seven cents (37V*) ner hour when 
erroloyed in the southern section of the industry. 

"2. That the -proportion of such (slow workers' to the ■ 
total employed on operations included in Subdivisions 3, 5, 
6, and 7^ of" Section A of this Article shall not at any tine 
e;:ceed twenty -per cent (20',j) of such total enployed in the 
making of coats, and twenty per cent (20$) of such rtotal 
enployed' in the making of vests, and twenty ner cent (20$) of 
such total en-oloyed in the mailing of pants in any shop or 
shoos :.iahing such coats, vests, or pants, where such shop or 
shcos are located in one municipality. 

"3. The enployer shall report on separate payroll 
.sheets, and transmit to. the Code Authority, together with pay- 
roll re-oorts as required under Article VIII, such 'slow work- 
ers' excepted under this Section, stating names of workers or 
their clod: nunbers (whichever is used in the filing of pay- 
roll reports); name of operation; whether by hand or machine; 
hours worked per week for the period reported; earnings ner 
week for the period reported. ; 

"On and after the effective date of this amendment, Sections 
b. c. and d of Article II of the Code of Fair Conpet.ition for 
the hen's Clothing Industry, as approved by the President on 
August 26, 1933, and known as Axroroved Code No. 15, Registry 
No. 216-1-06, shall cease to be in effect, except that: 

"1. The rights and obligations of any enployee and em- • • 
ployer in the industry under Sections b. c. and d, and. any and 
all interpretations of said Sections b. c. and dof Article II, 
which have accrued prior to the effective date of this amend- 
ment, shall not in any way be affected. 



9732 



"2. Anj' penalty or liability tinder or arising out of 
said Sections b, c. and d of Article II, Thich have accrued 
prior to the effective date of this amendment, shall not 
"be extinguished." 

It was provided in the above Order, aside fron amendments as quoted 
above, that "the firm of Lee, McClain anc n Scalzo, of Shelbyville, 
Kentucky, be exempted from the provisions of this amendment until a hear- 
ing has been duly held and decision rendered. " It ma.s further provided 
that the amendments "shall become effective as of June 15, 1955." 

B, Arguments Pavoring; Proposed Classified TJe^e Scales . 

As has already been indicated, the proposal for r/riting into the 
Code provisions setting up additional classified vrage scales brought about 
a sharp division of o-oini^n in tfte Industry. The Code Authority as a group 
favored in substance the proposed amendments, although as Has explained 
above, Pages 215-217. there mere some differences of ooinion betreen the 
management members and the lahor members. Opposition to the amendments 
centered in the Industrial Recovery Association grouo, This group for the 
most part mas opnosed to the amendments specifically and on principle. 
Because of the great Mnoortance of this controversy over mages to the 
Industry in general, it appears appropriate to present in more detail the 
arguments advanced for and against the proposed amendments, 

The arguments favoring the amendments eve best set forth in the May 
10, 1935, report of Acting Division Administrator II, D. Vincent to the 
National Industrial Recover Board recommencing their. adoption. The 
report folloms: (*) 

"MEMORANDUM May 10, 1935. 

"TO: 1'ational Industrial Recovery Board 

"FROM: II, D. Vincent, Acting Division Administrator 

"SUBJECT; Proposed Amendments of Article II of the Code of 
Pair Competition for the Men's Clothing Industry, 

"At the time of the public hearing on the proposed amendments 
above mentioned I mas Deputy Administrator in the Apparel 
Section of the Textile Division, national Recovery Administration, 
in charge of the Men's Clothing Industry Code of Pair Competi- 
tion, and conducted the hearing on the proposed amendments men- 
tioned, I am nailing the following report, findings and recom- 
mendation because I am familiar rrith all of the facts, circum- 
stances, proceedings, hearing and record relating to the proposed 
amendments. 

(*) Memorandum dated ; ay 10, 1935, from Acting Division Administrator 
M» D, Vincent to the national Industrial Recovery Board. (Men's 
Clothing Code Piles, under Amendments). 



973; 



-223- - 

"A niblic hearing was held on the proposed amendments above 
mention, February 1, 2 aid 4, 1935, in the Hall of rations of 
the Wash.ir.gtoh Hotel, Washington, D.. C. 

"Every person who requested an appearance was fairly heard in 
accordance with the regulations of the national Recovery Admin- 
istration. There were present duly authorized representatives 
of the Code Authority, Research and Planning Division, Legal 
Division, Industrial Advisory Board, Labor Advisor;' Board and 
Consumers' Advisory Board. In addition there were present re- 
presentatives of the Industrial Recovery Association of Cloth- 
ing Manufacturers and the Amalgamated Clothing Workers) Union. 

"At the tine of adjourning the hearing, the Deputy Administrator 
at the request of parties appearing and participating granted' 1 
fifteen (15) days additional tine within vrhich such parties and 
any other interested parties night file written statements or 
"briefs. Written statements or briefs were filed 'by Counsel for 
the Industrial Recovery Association of Clothing'Manufacturers, 
the Bloch Company of Cincinnati, Ohio, the Merit Clothing Manu- 
facturing Company of ilayfield, Kentucky, Frank Brothers of 
Lawrence, Massachusetts, the Standard Tailoring Company of 
Columbus, Georgia, the Goodall Manufacturing Company of Ohio and 
Tennessee, the Uniform Manufacturers, the rational Grange, the 
Chanters of Commerce of Cleveland, Ohio, Lawrence, Massachusetts 
and Aurora, Illinois, and Congressman Haines of Pennsylvania. 

"Upon the testimony and all other evidence contained in the 
record of this nearing, I find as follows; 

"1. Two .amendments of Article II, containing the" wage -pro- 
■visions of the Code, are proposed by the Men's Clothing In- 
dustry Code Authority, One of these amendments was proposed by 
the management members of the Wage Rate Committee of the Code 
Authority and one "by the labor members of the Committee. 

"2. The .Industrial Recovery Association of Clothing Manu- 
facturers also proposed three amendments of Article Ho 

"3. The amendment proposed by the management members of the 
Wage Rate Committee of the Code Authority proposes classified 
hourly rates which include some existing rates, establish 
other and new rates, and in a few instances increase exist- 
ing rates. This amendment also proposes a 'slow workers' tol- 
erance of 20^ of specified classes of employees, subject to 
stated minimum compensation and other conditions of employment. 

"4. The amendment proposed by the labor members of the Wage 
Rate Committee follows closely the classified hourly wage 
rates proposed by the management members out also proposes cer- 
tain new rates and increases of some existing rates. 

'5. The three amendments proposed by the Industrial Recovery 
Association of Clothing Manufacturers propose: 



9782 



-225- 



"10. At the hearing, the Code Authority submitted this ' compilation 
and ansl?/sis of wage data in support of its proposed amendments, 
together with testimony of witnesses to market, labor and working 
conditions in the Industry. 

"11. The revised amencnent proposed by the Code Authority will es- 
tablish some new classified v/age rates and will increase some of 
the existing minima as appears from Section (.O, Subsections (1^ 
to (7) inclusive. Other minimum rates for men's wash suits of lOO'o 
cotton and unclassified manufacturing employees are not changed. 
Existing North and South differentials are not disturbed. Weekly 
minima, for non-manuf ncturi lg enroloyees are not changed. 

"12. The Research and Planning Division's compilation and analy- 
sis show the average earnings of all employees throughout the In- 
dustry for the period July to November, 1934, inclusive, to be 
66.2^ per hour, which substantially exceeds the proposed new basic 
minima of 50^,i55<i, and 60,^- .per hour (excluding basic minima of 4/V 
per hour and underV In centralized markets and in some decen- 
tralized markets the- average hourly earnings substantially exceed 
'.the general average of 66.2^ per hour. 

"13. The labor cost of a large section of the Industry will not 
be substantially affected by the new rates proposed. A minor part 
of the Industry will be affected. The object of the proposed rates 
is to diminish certain existing unfair ineoualities in wages and 
direct labor cost. 

"14. The amendment also includes provision for employing physical- 
ly and mentally handicapped workers at wage rates below the minima 
but at not less than other employees receive for similar work, and 
in no case for less than 70$ of the minimum wage provisions. 
Such exempted persons may net number more than 5fo of the total num- 
ber of employees in any plant. 

"15. There is in addition a 'slow workers' provision authorizing 
employment of such a class, which shall not at any time exceed 20^ 
of the workers on operations included in Subsections 3, 5, 6, and 
7 of Section (a) of Article II. This limitation will operate to 
prevent such tolerances exceeding more than a small percentage of 
the total number of employees in any plant. 

"16. The existing Section (b^ of Article II which maintains exist- 
ing differentials between the lowest paid and the highest paid 
classes up to $30.00 per week, and the supplementary Sections (c^ 
and (d") are eliminated, subject to a provision that the rights and 
obligations of any employee and employer which have accrued under 
Sections (b), (c), and (&) prior to the effective date of this 
amendment shall net be affected. 

"17. The Association mentioned objected to the amendments proposed 
by the Code Authority and offered the testimony and statements of 



9782 



-226- 

several witnesses to support its objection and also in behalf of 
the three amendments above quoted which the Association itself 
proocsed. The Association offered no representative or detailed 
wage data. Its chief showing consisted of the exoert testimony 
and deductions of Dr. Willford I. King, Professor of Economics in 
the School of Commerce, New York University. 

"Dr. King's testimony was theoretical and based uoon hyoothetical 
premises. He professed no knowledge of this Industry but declared 
that all Industry, including the Men's Clothing Industry, should 
be free from production and cost controls bylaw or otherwise. 
Freedom of production and distribution, he stated, is desirable 
and in fact necessary to the widest use of resources and labor. 
Such freedom with unrestricted competition, he stated, justifies 
competitive freedom in labor markets. For these reasons he said 
that fixed minimum wage rates whether imposed by law or by col- 
lective agreement were undesirable and uneconomic. Dr. King's ob- 
servations fail to take into account certain economic facts of do- 
minating importance. When wage rates are not fixed by law or by 
collective agreement they nevertheless rest unon a contractual 
basis. If the contract is not formal it is implied. It is quite 
imoossible to free Industry and labor from some form of contrac- 
tual relationship. The necessary existence of such a basis for 
wage rates unaviodably imposes some degree of restraint upon or 
control over wage rates and direct labor cost as a factor in pro- 
duction. 

"there is nothing new in minimum. wage rates. Code minima rates are 
distinguished from agreed minima chiefly in the fact that the law 
declares certain minima rates economically indisoensable to nub- 
ile and orivate security. 

"Subsequent to the hearing the Association filed a statistical ana- 
lysis by Dr. King of wage data compiled and analyzed by the Divi- 
sion of Research and Planning. Dr. King's conclusion, briefly sta- 
ted, is that the data does not support the results derived by the 
Research and Planning Division. His deductions, however, depend so 
largely upon presumptions and implications .that they are of little 
if any nractical value. 

"As an instance, Dr. King in his statistical analysis said: ' It 
will be observed that the establishments having the fewer employ- 
ees appear to have the larger proportion of workers receiving less 
than 50^ per hour. ' He also infers that the small emoloyers are 
in the decentralized areas. This is not the fact. The small fac- 
tories and shops are chiefly found in the large cities. It also 
appears that by far the larger number of small shops are in the 
higher paid wage areas some of which are the so-called centralized 
areas. The larger establishments are more widely dispersed. Nine 
of the fifty larest establishments are in small towns and very few 
small establishments are found in small towns. Dr. King's deduc- 
tion is not in accord with these clearly-established facts. 

"In six of the fifty largest establishments, excluding cutter and 
off-pressers, 40.3fi, 40.6f , 41. 1$, 50.7$, 61. 5^, and80.4f 



9702 



-227- 

respectively of the total number of employees receive only the mini- 
mum of forty cents per hour. In eight other of the fifty largest 
plants only" .0$, 0.7^, 1.1$, 1.1$, 1.2$, 2.5$, and 2.7^ respective- 
ly of the '■jtal number of emnloyees are >aid as little as the mini- 
mum of forty cents ner hour. Again seven of the fiftv largest firms 
pay fror. 41. 21 to 64.5$ of their employees over seventy-five cents 
oer hour, while five others of these fifty largest establishments 
Day only ">.2l, 1.1$, 1.2$, 1.5$, and 2.5-1 of their employees over 
seventy-five cents oer hour. It is to correct and in some degree 
iron out these ineqxxalities in wages and direct labor cost that the 
Industry seeks to establish the higher minima rates. Such a change 
of wage rates seems essential to give security to established In- 
dustry members in both the centralized and decentralized areas. 

"18. These increased minimum rates will bv no means equalize exist- 
ing wage di soar i ties but they will tend to measurably reduce the 
unfair competitive advantages in direct labor cost now enjoyed by 
some members of the Industry. Inasmuch as these rates will appre- 
ciably affect only a few factories employing approximately 14$ of 
the workers of the Industry, the price of clothing to the consumer 
should not be affected. 

"19. I have examined the statements and briefs filed bv Counsel 
for the Association and by others objecting to the amendments pro- 
posed by the Code Authority. These do not answer the very convinc- 
ing proof offured by the Code Author it - " - in support of its amendments. 

"The brief of Mr. Leonard Weinberg, Counsel for the Association, con- 
tends that if the amendments are adopted 'They will make it impos- 
sible or impracticable for those manufacturing under mass produc- 
tion methods to continue to compete with the craft manufacturers 
in the centralized markets.' 

"The centralized markets, it is asserted, are Philadelphia, New 
York, Chicago and lo Chester, but certain of the so-called decentra- 
lized markets are equally important production centers. 

"It is an interesting fact that the largest manufacturer in the In- 
dustry is in a so-called decentralized market, and several other 
of the largest are likewise in the decentralized fields. Equally 
important is the fact that among these largest establishments in the 
decentralized areas are found both the highest and the lowest ave- 
rage wage rates. It is obvious that a higher degree of fair compe- 
tition cannot be established or maintained until existing variations 
in competitive labor costs are diminished. 

"20. In proposing these ainendnents the Code Authority represents a 
very large majority of large, medium sized and small manufacturers. 
Of approximately 3,500 members, the protestants number less than 
sixty, of whom only a few are small manufacturers. 

"The Code Authority, in proposing and assenting to the amendments, 
represents manufacturers in the Men's Clothing Industry producing 
approximately 801 of the total production. 

"21. Frotests were made by representatives of one small concern 



-228- 

in Shelbyville, Kentucky, moderate sized plants in Columbus, Geor- 
gia, Richmond, Virginia, and four or five others in scattered mar- 
kets in the Industry. They testified in general terms without sub- 
mitting cast data showing a need for relief from existing wage 
rates. If in exceptional instances exemptions or other forms of 
relief are needed, these should be granted upon appropriate show- 
ing and limited to such individual instances of need. 

"I am recommending a stay of these rates for the Shelhyville, Ken- 
tucky plant until a hearing can he held. . Respecting claims of a 
need for relief by a few other plants mentioned, I am causing a 
public hearing to be held to enable them to present proof of any 
exceptional circumstances affecting their inability, if any exists, 
to pay Code rates. 

"22. The first of the three amendments proposed by the Associa- 
tion nroTioses a deletion of all wage provisions except the mini- 
mum wage. Obviously this would destroy much of the security of a 
large part of this Industry. As piece-work rates are a long es- 
tablished system in the Industry, classified hourly minima should 
be maintained to safe-guard fairly competitive labor costs, for 
it is in wage rates above the basic minimum that inequalities in 
labor cost exist, and in which there is a definite tendency in 
some instances to make the minimum the maximum rate. 

"23. The second Association amendment pronosed is to define Worth 
and South to conform 'with ecomomic, historic and geographic rea- 
lities.' It is enough to say that economic and historic realities 
conflict. Geographic considerations should be considered to the 
extent that the demands of economic equality dictate. Provision 
is made by existing differentials 'for these factors. These dif- 
ferentials should be adjusted from time to time as experience and 
authentic data may suggest. 

"24. The third amendment proposed by the Association would delete 
Article II (f) 'limiting (as the Association states' 1 the amount 
of production.' This Code provision is not in any sense a limi- 
tation upon or control of production. Its- purpose is to safeguard 
employees against an increased task requirement to avoid or de- 
feat the wage and work time benefits prescribed by the Code. 

"25. Previous to the approval of the Men' s Clothing Industry Code 
there had occurred during the depression years a progressive de- 
cline in number of workers employed, in wage rates paid in most, 
if not all, markets of the Industry, and in production. Since the 
adoption of the Code and the organization of the Code Authority 
these trends have been gradually reversed. The shorter work week 
of 36 hours has spread employment. Code wage rates have substan- 
tially increased earnings. By November, 1934, average weekly earn- 
ings had increased 25$ over June, 1933. In many markets the sur- 
plus skilled labor has been absorbed. The Code Authority in be- 
half of the entire Indus trv, excepting tailors-to-the- trade and 
manufacturers of uniforms, has recently asked for four (4") hours 
overtime per week for a period of five weeks to meet market demands 
for production. Only three or four important markets show a surplus 



9782 



-229- 

of skilled labor available this current season. Uniform hours and 
minimum wage rates have combined to make a substantial ■ d needed 
progress toward stabilized competitive labor costs. The Industry- 
is unquestionably in a much healthier state since the approval 
and administration of Code controls. 

"26. It is significant that management representing a very large 
section of the Industry and the representatives of employees have 
joined in proposing rates, some of which are increases of exist- 
ing rates. 

"27. I further find that: 

11 (a) The amendments to the said Code and the Code as amended 
are well designed to promote the policies and purposes of Title 
I of the national Industrial Recovery Act including the removal 
of obstructions to the free flow of interstate and foreign com- 
merce which tend to diminish the amount thereof, and will provide 
for the general welfare by promoting the organization of Industry 
for the purpose of cooperative action of labor and management un- 
der adequate governmental sanction and supervision, by eliminating 
unfair competitive practices, by promoting the fullest possible 
utilization of the present productive capacity of industry by avoid- 
ing undue restriction of production (except as may be temporari- 
ly required), by increasing the consumption of industrial and ag- 
ricultural products through increasing purchasing power, by re- 
ducing and relieving unemployment, by improving standards of la- 
bor, and by otherwise rehabilitating industry. 

"(b^ The Code as amended complies in all respects with the 
pertinent provisions of said Title of said Act, including without 
limitation subsection (a** of Section 3, subsection (a) of Section 
7, and subsection (b) of Section 10 thereof. 

"(c) The Code Authority is empowered to present the aforesaid 
amendments on behalf of the Industry as a whole 

"(d) The amendments and the Code as amended are not designed 
to and will not permit monopolies or monopelistic practices. 

"(e) The amendments and the Code as amended are not designed 
to and will not eliminate or oppress small enterprises and will 
not operate to discriminate against them. 

"(f) Those engaged in other steps of the economic process 
have not been deprived of the right to be heard prior to the ap- 
proval of said amendments. 

"For these reasons I recommend approval of the amendments 
proposed by the Code Authority as revised, effective as of 12:01 
o'clock June 15, 1935. I also recommend disapproval of the three 
amendments proposed by the Industrial Recovery Association of 
Clothing Manufacturers. 

"M. D. Vincent 

Acting Division Administrator 
Textile Division" 



-230- 

C. ADVISERS' RECOMMENDATIONS OH PROPOSED C?IANGE IN WAGE PROVISIONS . 

The aporoval of the wage amendments was strongly -urged upon the Na- 
tional Industrial Recovery Board by C-ustav Peck, Special Adviser, on 
May 22, 1935, in a memorandum to W A. Karriman, Administrative Officer. 
Mr. Peck stated that- the inadecuacies of the Code's "II .(b)' 1 clause were 
largely the fault of the Administration and that the Code Authority had 
"made valiant efforts to enforce the clause without success" and that 
the proposed amendment is only a substitute of definite minimums for 
the "II (bV' clause. It was urged that "we shall be letting down the 
industry if we do not accept definite minimums for this trade." This 
adviser discouraged the postponement of action counseled by others be- 
cause of impending legislative action concerning H.R.A. (*). 

The Legal Division, through A. II. Barenboim, Assistant Counsel, 
on -February 12, 1955, advised Deputy Administrator Vincent that the 
statistics furnished by the Code Authority in support of the amendments, 
"if left undisputed and uncontradicted, make it mandatory that the Ad- 
ministration approve the amendments in substantially the form as sub- 
mitted. .... It is my honest belief that at least a good prima facie 
case was presented by proponents." (**). 

The Consumers' Advisory Board on Anril 25, 1935, advised Deputy Ad- 
ministrator B. E. Oppenheim with respect to the proposed wage amend- 
ments that no action should be taken "at the present time." Attention 
is directed to the April 18, 1935, minutes of the National Industrial 
Recovery Board "to the effect that amendments of Codes should be defer- 
red until after the enactment of new N.R.A. legislation by the Con- 
gress, unless special circumstances require immediate action in the pub- 
lic interest." The Consumers' Advisory Board indicated that further stu- 
dy of the amendments would be made, and made no definite recommendation 
other than indicated above. (***). 

The Research and Planning Division, relative to the proposed wage 

(*) Memorandum dated May 22, 1935, from Gustav Peck, Special Advi- 
ser, to ',7. A. Harriman, Administrative Officer, Code Records, 
Men's Clothing Files, under Amendments. 

(**) Memorandum of February 12, 1935, from A. H. Barenboim, Legal Di- 
vision, to M. D. Vincent, Deputy Administrator. (Men's Clo- 
thing Code Files, under Amendments — 17age Provisions, Deputy's 
Cony Volumes I and II.) 

(***0 Memorandum dated April 25, 1935, from Raymond Kenny, Consumers' 
Advisory Board, to Deputy Administrator B. E. Oppenheim, (Men's 
Clothing Code Files, under Amendments'! . 



9782 



-231- 

araendments, advised on Kay 2, 1935: (*V 

"The Research and Planning Division is of the opinion that the time 
is not propitious for amending the Men's Clothing Code setting up many 
additional wage mimmums in line with the proposed order submitted for 
consideration under date of Aoril 9, 1935. Inasmuch as the N.R.A. is at 
nresent the subject of legislative and judicial survey which may result 
in changes in administrative policies it would aopear unwise to bring 
about far-reaching changes in the lien's Clothing Industry which may 
■Drove to be only temporary. 

"The setting up by codes of complex classified wage scales has been 
contrary to established policy of both the N.I.R.B. and the Research and 
Flanning Division, although there are exceotions. It appears to have 
been recognized that the establishment of classified wage scales is a 
matter too difficult and complex, carrying the danger of handicapoing 
industry by inflexible machinery, to be provided for and administered 
through codes. This assertion of present policy is in no sense a denial 
of the fact that in \,he Lien's Clothing Industry unfair competition does 
exist with respect to wages above the basic minimums. 

"In time, with clarification of U.S.A. policy, if it should be found 
desirable to amend the Men's Clothing Code respecting wages of the high- 
er paid classes, the Research and Flanning Division suggests that con- 
sideration be given to the possibility of allowing members of the indus- 
try option as "between classified wage scales as proposed and a weighted 
average wage rate somewhat below the industry average, applicable to se- 
parate plants. This suggestion is made in view of the fact that a sub- 
stantial minority group in the industry insists that dissimilar proces- 
ses of manufacture employed in the industry make impossible, without un- 
due hardship, the inroosition of classified wage scales applicable to the 
entire industry." 

No action was taken by the National Industrial Recovery Board upon 
the proposed Order regarding wages. A memorandum of L. C. Marshall, Exe- 
cutive Secretary of the N.I.R.B. . to W. A. Harriman, Administrative Of- 
.ficer, on May 28, 1935, states: "In view of the recent court decision, 
I am returning the file of material in connection with the above men- 
tioned subject." (**). 

D. ADDITIONAL ARGUMENTS OPPOSING PROPOSED CLASSIFIED WAGE SCALES . 

It should be recorded that the files .of the Men's Clothing Industry 

Memorandum dated May 2, 1935, from J. ".'. Hathcock, Research and 
Planning Division, to Walter E. Woodford, Jr., Assistant Deputy 
Administrator. (Men's Clothing Code Files, under Amendments). 

(**) Memorandum dated May 28, 1935, from L. C. Marshall, Executive Sec- 
retary, N.I.R.B., to V7. A. Harriman, Administrative Officer. 
(Men's Clothing Code Files, under Amendments. ^ 



9782. 



Code contain over a hundred letters of objection to tlie proposed classi- 
fied wage rates. Host of these protests are from Chamber's of Commerce, 
Senators, Congressmen, and almost without exception pretest in general 
terms that the proposed amendments will place small plants in the de- 
centralized areas at a disadvantage with respect to plants in large 
cities. The following protests appear to he outstrnding and hence are 
presented in some detail. 

Governor Eugene Talmadge of Georgia wired the N.R.A. " on February 2, 
1935, that "The Chamber of Commerce of Columbus, Georgia, is strenuously 
opposing the proposed amendment to the Lien' s Clothing Code which would 
have the effect of putting small clothing manufacturers in the South 
out of business. Will appreciate it if you will see that there is no 
discrimination against the small clothing manufacturers of Georgia and 
other Southern states. "(*) 

On December 29-, 1934, John E. Edgerton, President of the Southern 
States Industrial Council, commented that the proposed amendments "have 
in them a serious threat tc the Southern elements of that industry, 
due to the radical differences in the conditions of life which govern 
that industry" ... .Postponement of the hearing is asked until sufficient 
time for the Southern part of the industry "to gather the necessary 
factual information, and prepare their case." (**) 

General R. E. 'food, President of Sears-Roebuck Company, Chicago, 
Illinois, wrote Deputy Administrator 1,1. D. Vincent on February 1, 1935, 
stating: 

"We feel that the proposed change? in the "..en's Cloth- 
ing Code are of such vital importance tc the general 
policy of the K.R.A. that no decision should be rea.ch.ed 
until general policies are decided. We feel that the 
proposed amendments tend to centralize Industry and 
throw it into large cities and will ruin the smaller 
manuf a.cturers in smaller towns and cities. We feel 
that this will tend to defeat decentralization of in- 
dustry. 1 ^***) 



(*) Telegram elated February 2, 1935, to N.H.A. from Governor 
Eugene Talmadge, of Georgia. (hen's Clothing Code Files, 
under Amendments, Protests.) 

(**) Letter dated December 29, 1935, to Clay lilliams, 

Chairman, N.I.R.B. , from John E. Edgerton, Southern 
States Industrial Council, (hen's Clothing Code Files, 
under Amendments — Protests. ) 

(***) Letter dated February 1, 1935, from General R. E. Wood, 
President, 3 ears- Roebuck Company, to 1,1. D. Vincent, 
Deputy Administrator. (Men's Clothing Code Files, un- 
der Amendments. ) 



9782 



-233- 

A protest filed by The Fechheimer Bros. Cc . , of Cincinnati, Ohio, 
is ;f interest in that an alternative proposition is suggested, namely: 
"...we would favor (in order that all manufacturers whether employing 
union Dr non-union help be placed upon the same basis of manufacturing 
costs) a. fixed and established rate for piece work upon a scale of 
wages per operation whether performed by male or female, or skilled 
or unskilled operatives." (*) 

Objection filed by the Merit Clothing Cc . , Inc., of Llayfield, 
Kentucky, on February 21, 1935, struck a similar note in stating: 

"TJhat you want, is a higher minimum wage, while what 
we want and what we feel that in justice we are en- 
titled to is that in determining this minimum, how- 
ever high or low, it shall be expressed in terms of 
piece work or production rather than a stipulated 
hourly rate regardless of the production," (**) 

LIr. "J. D. 3. Dodson, 3x. Vice President of the Portland, Oregon, 
Chamber of Commerce, indicated a fear tiiat the proposed wage amend- 
ments would injure the small manufacturer located away from metropoli- 
tan areas. In arguing "the case of the small manufacturers" he 
asserts: (***) 

"Among our advantages may be listed the following: 

"1. Lower living costs for the labor as compared with 
great industrial centers. 

"2. Less turmoil and destructive interference with 
operations. 

"3. Reasonable proximity to the raw material supplies 

from which cloth is made and also a near situa- 

ticn to cloth manufacturing mills of our western . 
territory. 

"-1. A willingness of labor because of these lower 
living costs and better living conditions to 
accept a lower wage than is possible for him 
to accept in the larger and most costly living 
centers. 



(*) Letter dated January 9, 1935, from The Fechheimer Pros. Co., 
Cincinnati, Ohio, to Acting Assistant Deputy Administrator 
S. P.. Curbacker. (lien's Clothing Code Piles, under Amendments.) 

(**) Letter dated February 21, 1935, tc Deputy Administrator 
LI. D. Vincent, from the P.erit Clothing Co., llayfield, ICy. 
(hen's Clothing Code Piles, under Amendments — General Corres- 
pondence. ) 

(***) Letter dated February 4, 1935, from tir. J.B.D. Dodson, Execu- 
tive Vice President of the r:rtland, Ore., Chamber of Commerce, 
to Li. D. Vincent, Deputy Administrator. (..on 1 ? Clothing Code 
Piles, under Amendments, Protests.) 

9732 



-234- 

"Gur disadvantages may be listed as follows: 

"1. Distance from the larger labor centers wliere the 
most efficient and trained help is found. 

"2. Transportation costs in finding a market for a 
majority of the products made by cur smaller 
operators in the distant locations. 

"3. Increased selling costs forced upon our opera- 
tors through the necessity of having salesmen . 
make long journeys to seel: the buying centers. 

"4. Lack of immediate touch with the centers where 

new patterns and styles are created, with greater 
delay in getting informa.tion as to these styles 
and patterns and the inability to manuf acture 
clothing ahead of the establishment of such 
styles and patterns. 

"....Because of the terrific massing cf production in 
a few centers where there is no opportunity for labor 
to acquire land, ^oy means of whicL. he can aid in his 
living costs, and due to the high rents and prices of 
property in these mass centers and because of the tre- 
mendous relief problems now faced in such centers by 
the na.tion and the states, the deliberate policy is 
being fostered of trying to decentralize in a modest, 
progressive and economic way certain industrial opera- 
tions. Included in such operations we may very proper- 
ly cite the lien' s and Boys' Clothing Industry. 

"This decentralization can be made gradual and will be 
for the benefit of the workers and society. An in- 
creasing percentage of these workers through subsist- 
ence homestead movements may be encouraged to acquire 
small acreages of producing land. This would pat 
them on a safer and sounder footing for society a.s a. 
whole. 

"As a general argument we would also ask you to con- 
sider the national aspects of the economic situation. 
If codes undertake to force conditions whereby the 
great ma,ss centers may be permanently protected in 
their present unhealthy development, k._ere will be no 
chance whatever for the development of industry out- 
side of such centers. There v/ill be no opportunity 
whatever for the great producing regions of the na.- 
tion outside of these artifically developed mass 
centers to errand in t.ieir industrial life. There 
will be no opportunity under such a program to bal- 
ance the productive business of the nation, to get 
it on e. more healthy basis, to avoid the excessive 



9782 



-235- 



ccsts of shipping the food and materials required by 
labor long distances at great charge and otherwise 
attain what we term a wholesome, more economical order." 



V. APPRENTICES 

The Men' s Clothing Code as originally approved carried no provi- 
sions respecting apprentices. It soon developed, however, that the 
areas particularly affected ay the prohibition of home work desired a 
learner provision for a definite period so that the home work problem 
could be met without injury. After considerable controversy within the 
Code Authority it was finally agreed that learners could be employed 
at rates 70 percent of the mini .xuu fcr a period of three months from 
December 11, 1933. The Code ?/as so amended on December 15, 1933. 
From the outset, as above indicated (see page 214), the decentralized 
areas of the Industry had wished a learner provision in the Code. 

P.. is learner problem became somewhat involved after the issuance 
of Executive Order No. 6750 C, dated June 27, 1934, which gave the 
Secretary of Labor authority to introduce apprentices to all industries 
irrespective of Code provisions. The Hen's Clothing Code Authority 
urged the Secretary of Labor to provide for no system of apprentices 
in the hen' s Clothing Industry until all available skilled workers had 
been reemployed. (*) Shortly thereafter the Code Authority made arrange- 
ments with the Department of Labor whereby all applications for 
apprentices were to be submitted to the Code Authority for recommenda- 
tion. 

On February 11, 1936, the Federal Committee on Apprentice Training 
advised that no apprentices were indentured in the lien' s Clothing In- 
dustry, and therefore n^ Apprentice Exemption Certificates were granted 
to members of that Industry. (**) 

Three requests for apprentices which cane to the attention of the 
Administration were referred to the Code Authority. Their final dis- 
position is not known. Code records disclose one Order, ho. 15-53, 



(*) Report of Executive Director of the hen's Clothing Code 
Authority, dated September 14, 1934. (hen 1 s Clothing 
Code Files. ) 

(**) Letter of February 11, 1936, from Mary Curran, Secretary 
to Wm. F. Patterson, Executive Secretary, Federal Com- 
mittee on Apprentice Training, to J. ".7. hathcock, Assist- 
ant Unit Chief, Textile Unit, Division of Review, LT.R.A. 
(hen's Clothing Code Files.) 



9782 



-236- 

dated Janua.ry 12, 1935, denying an application of Prosterman- 
Spiesberger Company, Chicago, Illinois, to employ apprentices at less 
than Cede rates. The firm claimed that a shortage of skilled workers 
existed at the Company' s plant in Jacksonville, Illinois. The denial 
of the Company' s request was based on an investigation by certain 
Code Authority members, who reported a supply of skilled labor avail- 
able in Chicago and who advised that another company in Jacksonville 
had not made a similar request. 

VI. HOME "JOHKERS AND IIANDI CAPPED WORKERS . 

As indicated en page 214, this chapter, the Code for the Lien's 
Clothing Industry v/ as amended to allow handicapped workers employment 
under certain special conditions. The President, by Executive Order 
No. 6606 P, dated February 17, 1934, made provisions whereby workers 
in all industries falling in this category should be allowed exemp- 
tion from usual codal wage provisions, subject to the Department of 
Labor regulations. 

For all industries, 17,203 handicapped workers certificates 
were issued under the Executive Order. Twenty-three Codes accounted 
for not less than 14,245 certificates. Of these Codes, Men's Cloth- 
ing held third place, following Cotton Garment and Canning. The 
Lien' s Clothing Code accounted for 370 certificates issued, 458 appli- 
cations refused, 5 certificates revoked, and 24 certificates can- 
celled. Table XLVIII on page 237 indicates the distribution of the 
above data by States. (*) 

A provision similar to that described above for handicapped 
workers was made possible for home workers by Executive Order No. 6711 
A, dated May 15, 1934. Of a total of 2,603 certificates for home 
work granted, only 16 are accounted for by the Men' s Clothing Indus- 
try, which was generally recognized prior to the Code as the largest 
industrial home work industry. The following Table indicates the dis- 
tribution of applications and certificates granted by States: 



(*) United States Department of Labor, Division of Labor Standards, 
Exceptions to Wage Provisions of N.R.A. Codes in Cases of 
r.andi capped 'Jo rke r s (Mimeographed Bulletin No. 244, 
December 9, 1935. ) 



9782 



-237- 



TA3LE XLVIII 



NUMBEH CP HANDICAPPED iTOHKEHS CERTIFICATES ISSUED, REFUSED, 
REVOKED, AND CANCELLED TO AND INCLUDING MAY 37, 1935, 
ACCORDING TO CODS AND STATE REPORTING (*) 



CERTIFI- 


APPLI- 


CEETIFI- 


CERTIFI- 


CATES 


CATIONS 


L/.M.J. JLO 


CATES 


ISSUED 


EFFUSED 


REVOKED 


CANCELLED 



Totals 



870 



458 



24 



Colorado 


9 






Illinois 


140 


125 




Indiana 


65 






Iowa 


14 


21 




Kentucky 


1 






Louisiana 


9 






Maryland 


78 


11 




Mas s aclius e 1 1 s 


12 




1 


Minnesota 


6 






Missouri 


4 


2 


2 


New Hampshire 


2 






Few Jersey 


35 


12 




New York 


204 


209 




Oiiio 


154 


24 


1 


Pennsylvania 


127 


52 


1 


Rhode Island 


1 






Tennessee 


11 






"icconsin 




2 





.1 

12 
2 
1 
1 



(*) U. S. Department of Labor, Division of Labor Standards, 
Exceptions to Wage Provisions of IT. R.A. Codes in Cases 
of Handicapped Workers (Mimeographed Bulletin No. 244, 
December 9, 1935.) 



9782 



-238- 



TABLE XLIX 

SPECIAL CERTIFICATES OF EXCBxTIGITS TO HOMEWORK PROHIBITIONS 

OF THE CODES l/ 

ifflJ'S CLOTHING* 

Certificates Applications 

Issued Refused 



Totals 16 27 

Maryland 2 

Hew Jersey 5 6 

Hew York 4 19 

Pennsylvania 5 2 

(*) Ho certificates were revoked for violations of provisions of 
certificates; three certificates were cancelled in the State 
of Pennsylvania because they were no longer needed. 

l/ United States Department of Labor, Division of Labor Standards, 
Exceptions to the Industrial Homo VJork Prohibitions of H.R.A. 
Codes (Mimeographed Bulletin Ho. 243, December 9, 1935). 



-239- 

VII. EEUPTIOI ?2C ;. r AC-S PHOVISI01TS. 

As has been indicated already, the Code Authority tool: the 
position consistent 1 .;: that it had no power to make exemptions to the 
CoJ.e and that it vac disposed to discourage the granting of exemp- 
tions by the Administration. The Code Authority, however, approved 
Order ITo. 15-11, dated April 27, 1934, which save certain exemptions 
to Puerto P.ican manufacturers. As explained in our discussion of 
hours exemptions, the Puerto Eican manufacturers shipping to 
the Continental United States were allored 40 hours per reek, Addi- 
tionally, these firms were allowed to pay employees 50 per cent of 
the minimum rages mrovided for the northern area of the Industry. 

The Administration supported the Code Authority in its position 
that the wage provisions of the Code he maintained without exception. 
iJo emempt-ions re re granted hy the Administration from the codal rage 
provisions except in the case of Puerto Pico. Considerable pressure 
ras brought upon both the Code Authority and the Administration for 
a general relaxation of Code minimum rages, in the form of apprentice- 
ship provisions, but with the exception of the three-month exemption 
to the entire Industry, discussed, on page 214 of this chapter, no 
exemptions "ere allowed. 

VIII COiZPLIAITCS 

Attention is called at the outset to the special investigation 
of Code enforcement activities made by Deputy Administrator i . D. 
Vincent, covering the period up to August 30, 1934, the date of the 
report. This report is available in the i en's Clothing Code files 
and is described in the September 9, 1934, report of the Executive 
Director of the Code Authority as follows: 

"ilr. Pobert Straus, Special Assistant to General Johnson, 
was ashed to make a special investigation of the entire 
enforcer lent activities of our Code Authority uit to date, 
and, chiefly, to study the records of actions of both 
staff and the II-D Committee in the application of II-B. 
hr. P. P. Vincent, one of the ablest Deputy Administra- 
tors in the Apparel Section, was delegated by Lir. Straus 
said hajor G-itchell to make this investigation. L'r. Vincent 
spent several days going through our files and reading 
the records of the headings held before the II-D Committee. 
He placed special emphasis in his investigation on every 
detailed subject in connection rith the G-reif case. On 
August 30, (.1334) he made his report, a copy of -hich has 
been r.ade available to us. His conclusions are most flat- 
tering in that he finds that '-e have covered all of the 
important markets in the country in our investigations 
thoroughly and impartially, and that in the application 
of all the provisions of the Code there has been no dis- 
crimination betreen markets or betreen individual firms. 
In fact, his only adverse comment was that re rere pro- 
bably too strict in the rording of some of our letters 
to aJ-leged violators of the Code. This thorough-going 

3782 



-240- 

report should "be the final answer to the charges and 
rumors that you are all familiar with to the effect 
that the Code Authority has discriminated against certain 
sections and Members of the Industry." 

The investigation of the enforcement methods of the Code Author- 
ity "by Deputy Administrator , . D. Vincent was the outgrowth of a com- 
plaint handled "by the Ken "for... State Compliance Office, originated "by 
Rartin E. Popkin, Executive Director of the Industrial Recovery Asso- 
ciation of Clothing Lanufacturers, who, under date of Ray 23, 1934, 
wrote "complaining that the Code Authority nas partisan and using its 
power to discriminate against members of his Association." hr. Popkin 
charged "that Article II (b) was being enforced by the Code Authority 
against members of his Association and not against members of the 
Clothing Manufacturers Association of the United States, which Asso- 
ciation had a collective agreement with the Amalgamated Union." 

Rrs. Anna R. Rosenberg, ilew York State Complaince Director, dis- 
cussed this complaint with ]':.■:. Robert R. Straus, Special Assistant to 
the Administrator, and thereafter Rr. Howard, a sijecial agent, was 
assigned to make an investigation. L'r. Horard spent some time on the 
investigation and upon reporting that he was not receiving the coopera- 
tion he expected from the Code Authority, was superseded ^oy Deputy 
Administrator Gitchell, who tool; charge of the matter. , , (Subse- 
quently, Rr. Vincent was assigned to make the investigation, and he 
reported thereupon to Sol A. Rosenblat, Division Administrator, on 
August 30, 1934. (*) 

Rr. Vincent's report came to the attention of the Industrial 

Recovery Association around the first of February, 1935, during the 

course oi the public hearings on the proposed wage amendments. The 

report '-as severely criticized upon both the scope of the investigation 
and the findings. (**) 

The records of the Washington Compliance -Office throw some light 
upon the extent of complaints of Code violations and the manner of their 
disposition. For the period from September 15, 1934, to January 19,1935, 

(*) Memorandum dated Ray 6, 1935, from Mrs. Anna R. Rosenberg, 
ITew York State Compliance Director, to L. R. C. Smith, 
k.R.A. Legal Division. (Ren's Clothing Code Files, under 
(Code Authority Complaints). 

(**) Pamphlet dated February' 11, 1935, entitled Re: 

Proposed Amendments to Code of Pair Competition for 
the lien's Clothing Industry with Special Reference 
to The Secret Report. (Ren's Clothing Code Piles.) 



9782 



-241- 

ve find on hand and docketed (allotting for bookkeeping rejections) 779 
labor complaints and 157 trade practice complaints. Of the labor con- 
plaints, 520 vere adjusted, and in 68 cases no violation vas fotind, 
leaving 191 on hand, of viiic'.i 23 had been referred to the Compliance 
Division. 

The Stield Office Report Summary of the Compliance Division, cover- 
in- the period from June 16, 1934 to February 2, 1935, covers relative- 

'ev cases (101 labor complaints and 8 trade practice complaints) 
and is for that reason of little value in measuring compliance in this 
Industry, but for the very reason of the small number of cases reported 
it might be assumed that the Code Authority has been particularly 
aggressive in policing the Industry. In this 80-per-cent-unicnized 
Industry, with labor representation on the Code Authority, it is not 
surprising to discover that most complaints of violations found their 
■- - directly tc' the' Code Authority. 

In the general enforcement procedure of the Code Authority chief 
reliance was placed upon the payroll and productions reports of members 
of the Industry. These reports are sampled to determine the extent of 
observance or non-observance. Also, general investigations r:ere made 
throughout the various industry areas. Upon the discovery of a wage viola- 
tion, the extent of the violation vas tabulated and a bill sent to the 
violator, and restitution vas ashed. If the violation v;as acknowledged 
and the bill paid, the sun in cuestion vas paid by the Code Authority 
to the employee or employees. If the bill vas disputed, the Industry 
member was requested to appear before the Committee provided in 
Article II (d) to present his case. TTnen the member did not appear or 
if an adjustment could not be made after appearance, the member vas 
cited to the Compliance Division. Occasionally, arbitration of a case 
vas arranged, to which an Administration official or Division vas a 
party as veil rs the Industry member and the Code Authority. (See 
pages 156 - 160 • Chapter IV, regarding Compliance Procedure.) 

At the outset, the Code Authority divided the country into five 
districts vith a chief investigator in charge of each district. It 
vas later found expedient to route all natters of investigation through 
the central office. Provision vas made, hovever, for hearing cases in 
cities o\-.tside of Ken York. Certain Boston Industry members in par- 
ticular vere met in Boston upon their request. 

The Code Authority in certain instances arranged for having ac- 
countants visit shops, especially in ITev York, and assist in estab- 
lishing a s3 r stem of keening production and payroll records which vere 
essential to enforcement purposes. Also, Code Authority officials 
met with large groups of Industry members and instructed them in 
methods of keeping records. (*) 

(*) September 20, 1934, Report of Executive Director of the 

hen's Clothing Code Authority, (lien's Clothing Code Piles). 



)702 



-242- 

The compliance officials of the Code Authority soon discovered, as 
r,'as expected, tliat the greatest number of Code violations had to do with 
wages. Likewise, they discovered that "the most serious problem facing us 
in connection with the violation of the wage provisions of the Code, has 
to do with Clause II (b) (wages of the most skilled groups." The Com- 
pliance Committee explained the nature of their difficulty in a measure 
as follows: (*) 

"In the first place, the securing of facts upon which to base 
the application of II (b) is not always an easy task and requires 
the attention of a man more or loss skilled in piece rate fixing 
within this industry. Even when the facts are determined the 
application of the clause frequently presents an even more difficult 

problem Time is of the essence in this connection, because 

it obviously would be impractical to consider making adjustments in 
the fall season of 1934, that would relate back to conditions ex- 
isting in July, 193,3." 

The full measure of the difficulty which the Code Authority anti- 
cipated early in its experience and realised ever since in the attempts 
to enforce Article II (b), can be best appreciated, doubtless, by a 
close examination of the interpretation and formula by which this pro- 
vision was administered. Let us recall that Article II (b) reads as 
follows: 

"The existing amounts by which the wages in the higher-paid 
classes, up to classes of employees receiving $30.00 per week, ex- 
ceed wages in the lowest-paid substantial classes shall be main- 
tained. " 

The Code Authority (See Chapter IV, under Section Interpretations 
and Interpretation Procedure". ) interpreted the words "substantial classes" 
as used in II (b) to include 20 per cent of the total number of emplojrees 
in any establishment, this interpretation to become effective with the first 
payroll following November 20, 1933. Along with the interpretation, the 
Code Authority drew up for both the Northern and Southern areas an illus- 
tration of the way in which it was to be applied. The illustration of the 
way in which the interpretation was to be applied is found on pages 181 - 133 
Chapter IV, under Section "Interpretations and Interpretation Procedure." 

As early as March, 1934, Mr. Sidney Hillman informed the Code Author- 
ity in meeting that the Administration was whole-heartedly behind them 
in the enforcement program and that in his judgment enforcement of II (b) 
in the method provided was fair. He warned the Authority, however, that 
if industry did not respond to the methods provided for increasing the 
wages of the classes of workers above the minimum that he would ask for 
an amendment to the Code to provide for classification, although, as 
explained, he personally was opposed to classification because the rule 
would then be too strict. He concluded by saying that if the Code Authority 



(*) March 2, 1934, Report of Committee on Compliance and Enforcement 

of the Men's Clothing Code Authority. (Men's Clothing Code Piles.) 



9782 



-243- 

were a bit more liberal in hiring the right kind of investigators the pro- 
blem of II (b) would be solved. 

Mr. Hillman's implied fears and warning were indeed prophetic, judg- 
ing from the final resolution of the Code Authority to present amendments 
to the Code providing for additional classifications of labor and wage 
minima. (See page 21 5 , this Chapter.) 

Although complete figures are not available respecting the number 
and types of violations of codal provisions, the records do disclose the 
amounts of money assessed and collected against violations. On the dates 
February 27, 1935, and March 1, 1935, the Executive Director of the Code 
Authority supplied the following information to Assistant Deputy Adminis- 
trator "alter E. Woodford, Jr.: (*) 

"Out of the total of $9S,715 collected from all sources 
approximately $35,400 was collected on II (b) adjustments. (G-reif 
payment of $25,000 is included in these totals.)" "the amount re- 
maining due on these unpaid installments is $13,419.93, making 
a total amount of money collected and. assessed $104,134.93." 

In connection with giving the above information, it was explained 
that in addition to cash payments <*f back pay, there were in many cases 
increases in piece rates and labor costs for the future. Typical of this 
was mentioned the Curlee case, "where the adjustment was effected by the 
firm mailing general percentage increases to all workers by an amount more 
than sufficient to put them in compliance with II (b)." It was added that 
"out of a total of 33 II (b) charges marked dismissed for the Industry as 
a whole, there was a reasonable number of cases which were settled on the 
same basis as the Curlee case, namely, by an increase in cost, but without 
cash payment. " 

A summary of the handling of certain specific wage violation cases 
under the Code will add somewhat to the explanation of the Code Authority 
manner of enforcement, will indicate more fully the difficulties encount- 
ered and will show the nature of Administration cooperation. 



(*) Letter dated March 1, 1935, Morris Greenberg, Executive Director, 
Men's Clothing Code Authority, to Halter S. '.Toodford, Jr., Assis- 
tant Deputy ■Administrator. (Men's Clothing Code Files.) 



9782 



-244- 
Ac The Gr^if Case , 

The Lv Greif & Ire Company of Baltimore; Maryland, was investiga- 
ted by the Code Authority.- An analysis of the investigation revealed 
non-eoimliance with Article II (b), and on April 24. 1934, the Company 
was billed for bad: wages amounting to $35 5,785,. 91. The Code Authority 
could not get the Greif Company tc appear before the II (d) Committee. 
The Company demanded assurance that its right to challenge the validity 
of the Code Authority's action or to challenge the constitutionality of 
the H.I.R.A., would not be waived,. Such assurance, the Code Authority 
did not assume power to give* The case was cited to the Compliance 
Council of the Comdip.nce Division in Tashington, and was heard July 5, 
1934.(*) 

The Compliance Council voted unanimously to give the Greif Co. two 
weeks' grace,, during which time it might contact the Code Authority and 
the Deputy Administrator and he heard on its claim that the interpreta- 
tion of Article II (b) had been a.olied against it in a discriminatory 
manner. It was further agreed that if the Code Authority end the Deputy 
Administrator made no recommendation to the contrary and if the respon- 
dent had not agreed within two weeks to make full restitution of back 
wages that the Compliance Council would recommend removal of the "Hue 
Eagle and withholding of JJoR„A;, labels, and would refer the case to 
the Litigation Division.,. (**). 

The Greif Company brought suit in the Federal Court at Baltimore 
to stop action of the 1T.R.A. in ordering the Cede Authority to cease 
issuing labels to the Company. In the meanwhile r the Department of 
Justice suggested an investigation by the Research and Planning Divi- 
sion. At the outset, the Research and Planning Division was concerned, 
solely as a fact-finding agency.. Later, as will be shown below, offi- 
cials of the Administration became involved in the case as arbitrators. 
The investigation was conducted by Mr. Prank Taggart, Research and Plan- 
ning Division, and Dewuty Administrator Morris Greenberg, under the dir- 
ection of Mr. Leon Henderson, Director of Research and Planning. The 
part placed by the Administration can best be presented by the follow- 
ing resume of the proceedings by an official who was narty to the in- 
vestigations,! (***) 



(*) Minutes, of Compliance. Council, Jul-' 11, 1934 9 Memorandum from John 
Hopper, Executive Assistant, to Sol A. Rosenblatt, Division Admin- 
istrator. (Men's Clothing Code Piles.) 

(**) Minutes of Compliance Council, July 11, 1934. Memornadum, John Uopper 
Executive Assistant, to Sol A, Rosenblatt, Division Administrator, 
(Men's Clothing Code Piles.) 

(***) Memornadum dated March 8, 1935, from H, P. Taggart to Leon Henderson. 
(Men's Clothing "Code Piles, under Heo.rings, Senate Pinance Committee.) 



9782 



9762 



-245^ 

"This is a resume; of the activities of the Research ■ 
and Planning Division,' with the technical assistance 
of their Deputy Administrator Greenberg, in the Greif 
case. 

•"At out August 1, 1934, Greif had been found in viola- 
tion of Section. II (b) of the Hen' s' Clothing Code by 
the 'Code Authority and the Conpliance Division had 
upheld the findings. Greif had also gone into the' 
Federal Court in Baltimore arid obtained a temporary 
' injunction, seeking thereby to retain the Blue Eagle 
! and their* stock' of labels. Hearing on a permanent, in- 
junction was pending. In order to avoid further liti- 
gation the suggestion was made by yourself (lieon Hen- 
dreson) to see (l) whether the Code Authority's 'ampli- 
cation of II (b),had been properly made and (2) whe- 
'ther there were any circumstances which should modify 
the application.. Grief claimed .(l) that the interpre- 
tation" and application of II (b)werc both discrimina- 
tory and illogical and (2) that their operating" • carats' 
and conditions were such that .the application proposed 
was unfair. 

"The commission wrs undertaken as a purely fact find- 
ing^ job,, •. The Greif records were made available and we 
determined their costs with what seemed" to lie substan- 
tial exactness. TTe obtained competitive garments and 
figures indicated their costs, also. Our findings 
were (l) that Greif had not complied with Section II 
(b) and (2) that their costs, while substantially* high- 
er than they were pro-code, -'ere, nevertheless, decidedly 
'lower than those their nearest competitors. They should, 
therefore, be expected to make a real effort to comply 
with Section II ~(b>, a thing which they had not 'done -at 
all. 

"These findings were made .some time in the latter part 
cf August. When they were reported to Greif and the At- 
torneys for both sides, Greif seemed willing to accept 
them and to take some action to comply. They were un- 
willing, however, to accede to the award arid 'the proced- 
ure of the Code Authority. The Code Authority in turn 
would be willing to accept some-, compromise if the principle 
' of Section II (b) were upheld, naturally we -'ere asked 
to suggest the remedy. Thus you were put in the position 
of mediator or arbitrator and the second phase of our con- 
nection with the case began. 

"Cur proposal consisted of three parts: (l) that Greif 
abandon its time work and bonus' "system of. pay and adopt 
a piece-work system; (2) that the piece-work cost of 
Greif 's basic garments.be set at a figure which- would be 
more nearly in line with their competitors, and (3) that 
pay restoration to employees be on the basis of a recoiw 
putation of their wages on the ne^ piece rates rather 



-246- 

than by the scheme proposed "by the Code Authority. These 
suggestions were accented in principle, but the manner of 
setting the piece rates, the level of basic costs, and the 
degree of pay restoration had to be settled by negotiations. 

"Agreements on the points were arrived at as follows: (l) 
Piece rates were to be established by joint efforts of 
Greif and ourselves, we making the original proposals and 
having the final say; (2) basic costs were to be approxi.- 
mately 7% higher than the post-Code costs as determined by 
our findings; (3) nay recomputation was to date back to 
approximately June 9, 1934. 

"These matters were settled on Augist 31, 1934, In about 
a week we made our ^irst proposals of piece rates, but it 
was not until October 15th, that final agreement was reached 
as to the piece rates for the eight plants included in the 
Code Authority's original bill. Rates for the other two 
plants were set even later. As the rat^s were set computa- 
tions were made of the earnings which all employees would 
have made since June 9th, if the niece rates had been in 
effect as of that date. These computations were audited by 
Messrs e Chavin and Ollis* From the ea^nina-s which would 
have been made deducted the wages actually paid in each 
case. Any excess of the computed wage over the actual 
wage was to be paid to the employees in question. The 
total amount of such -oayment was $24,699 41 , The payment 
of the individual amounts was audited ^ by Mr. 511is, 
This part of the i^ork being completed on December 13, 1934. 
His report indicates that he examined receipts from all but 
three of the employees entitled to share in th-^ distribu- 
tion. Of these three one had died and two could not be 
located. 

"Full records of the case are in possession of the Cost 
Accounting Unit or are in your files. The Code Authority 
has been furnished with the piece rates and the names of 
th= operations. Greif gave us complete specifications 
for each operation as well, but these specifications were 
not, by agreement with greif, transmitted to the Code 
Authority. 

"Neither has the Code Authority been furnished any cost 
information except that basic costs decided upon in the 
agreement of August 31, 1934, and the same basic costs 
as worked out in piece rates. Neither names or recipi- 
ents nor amounts of pay adjustments have been disclosed 
to the Code Authority. 

"We are informed by Greif s representatives that the 
new piece rate system is working satisfactorily at the 
present time, with minor exceptions. Apparently, a 
very few of the hundreds of individual rates set are 
not quite what we hoped for, but the company has made 
no application to change them. 



9782 



-247- 

"The Compliance Division received one complaint from 
■a Greif employee who evidently did not understand why 
some employees received a substantial pay adjustment 
others got nothing. This remployee also complained that 
the Company was driving those who were unable to earn 
the- minimum under the piece rates. This is probable. 
However, from all information in our possession, we 
have no reason to believe that the settlement has not 
worked out substantially as expected." 

The Executive Director of the Code Authority, 'in reporting 
the settlement of the Greif case to the Code Authority, asked to be 
excused from reading the text of the agreement, as it had been arranged 
that the terms of the agreement were to be withheld from the public. 
He further explained that the settlement of the case compensated the 
employees as reauired by the codel provisions and other II (b) cases 
need have no other basis of settlement.^*) 

B. The Cincinnati Cases. 



The Cincinnati cases are worthy of considerable attention if a full 
understanding of the difficulties attending the enforcement of II (b) is 
desired. Here again, as in the case of the G-reif Company, we find an 
active part played by officials of the National Recovery Administration. 
The philosophy underlying the proposed settlement "in maps" of the Cin- 
cinnati cases is an excellent commentary upon the aims of both the Code 
Authority and the Administration, and the means employed under codal^ 
provisions to attain their desired ends. Also a resume of the handling 
of these cases reflects the attitudes and lines of defense of the re- 
spondents. Following is a resume of the Administration's part in the 
handling of the Cincinnati compliance cases: (**) 

"A hearing- was held on October 12, 1934, lefore the Compliance 
Council, in respect to Five Men's Clothing Manufacturers, all 
of Cincinnati, Ohio, for violation of Article II, Section (b) 
of the Men's Clothing Code. Following are the five firms in- 
volved, namely: 

1. P. H. Davis Company 

2. Levine Brothers, Inc. 

3. H. A. Seinsheimer Company 

4. Storrs Schaeffer Company 

5. Silverstein and Sons Company 



(*) Minutes of Meeting of the Code Authority, dated September 14, 1934. 

(**) Memorandum dated March 22, 1935, from Edward Chavin, Research and P 
Planning Division, to R. H. Lansburgh, Associate Director, Research 
and Planning Division. (Men's Clothing Code Files, under Compliance.) 



9782 



-248- 

"As a r°sult of this hiring an agreement was entered into 
on October 19, 1934, a copy of which is herewith appended. 

"The above five firms all sie-ned the agreement and Mr, 
F. C. Williams, Attorney of the Law Firm of Feck, Schaefer 
and Williams, of Cincinnati, representing these five firms, 
signed for the following additional seven firms who were 
to be included in the aforesaid agreement, namely: 

6. Herbert Tailoring Company 

7. Schwartz Tailoring Company 

8. Valerio and Company 

9. Hamilton Tailoring Company 

10. Ohio Tailoring Company 

11. I. and S. Bing Company 

12. Superior Tailoring Company 

"The seven firms, six to twelve, inclusive, were included 
in the picture because of the fact that Mr. F. C. Williams 
represented them all, and while they were not cited for 
violation of Article II, Section (b) of the Men's Clothing- 
Code, were in the process of investigation. 

"Upon examination of all available papers in the files of 
the Compliance Council it was found that no deficiencies 
were entered against the Herbert Tailoring Company and 
Ohio Tailoring Company by the Code Authorities and in view 
of which these two firms were not investigated and were 
considered by the investigators, Morris G-reenberg and 
Edward Chavin, to be in compliance with Article II, Section 
(b) of the Men's Clothing Code. The remaining ten firms 
were investigated by us. 

"The scope of investigation covered by the aforementioned 
agreement could be classified as follows; namely: 

1. Were underpayments made - 

2. If so, to what extent - 

3. Other Questions relating thereto. 

4. Other auestions before the Code 
Authority or Compliance Council 
pertaining to alleged violations 
of the Men's Clothing Code, 

"In strict conformity with Article II, Section (b) of 
the Men's Clothing Code, all of the firms cited with 
deficiency bills can be said to have violated the Code 
provisions referred to. 

"The method and formula used by the Code Authority in 
arriving at and computing the deficiencies in general can 
be said to be sound, even though they appear to be more or 
less artificial. 



9782 



-249- 

"However, when r>re-code records of hours wor v ed are missing 
it is necessary to make some assumptions in order to get at 
pre-code wages -per hour. This, in itself ,' would weaken the 
basis uioon which these deficiencies are determined as fixed 
to individual workers. In some instances, this' resulted in 
absurd conclusions. Th? only really satisfactory and equit- 
able solution, for both the past and future, is a reconstructed 
piece rate schedule similar to that worked cut for the Greif. 
case. 

"Bearing this in mind and also the broad t>urooses and intent 
of the Code provisions involved in this situation, we made a 
study of the direct labor costs of the basic products manufac- 
tured for each of the firms affected, and then comuared these 
basic costs with the costs of -products having strictly com- 
parable labor content, in order to ascertain whether convpli- 
ance existed in each case, with Article II, Section (b ) of the 
Men's Clothin? Code. We com-oared these results with those 
based upon the ao-olication of the method adopted by the Code 
Authority to see whether they would, result in competitive 
inequity. 

"We disregarded the artificial method approved by the Code 
Authority, mainly because of the varying results that could 
be obtained by allying it to concerns in equal competitive 
positions. The deficiencies resulting from t he Code Authority 
method would differ defending upon the 'labor spread' . The 
wider the spread the greater the deficiency, and the narrower 
the spread the smaller the deficiency. For example, firms 1 
having an average of sixty-four cents -oer hour, direct labor 
cost r and having wide labor spread, could have the costs in- 
creased more than a firm with an average of forty-four cents 
per hour, direct If bar cost, and possibly a narrower labor 
s-pread. 

"Therefore, we based our investigations on comuarable -oiece 
rate structures, always having the 'G-reif set-un in mind. 

"Where the labor costs for the products manufactured were, 
at the time, equal to or greater than the direct labor costs 
of the -products having a strictly comparable labor content, 
we recommended that those firms be declared in compliance 
with Article II, Section (b) of the Men's Clothing Code and 
be relieved of any -payment or assment in connection therewith. 
A further increase in their direct labor costs would raise 
their costs to a non-competitive level. 

"Where the dir ;ct labor costs were lower than the direct 
labor costs for products having comparable direct labor con- 
tent, we recommended specific awards in each case, depending 
upon whether the amount by which these direct labor costs 
were less than those in products having a corn-parable direct 
labor content. 

"S-pecific awards were recommended in the following six cases: 



9762 



-250- 

1. H. A. Seinsheimer Company 

2. Levins Brothers, Inc. 

3. • Sunerior Tailoring Company 

4. Schwartz Tailoring Comnany 

5. I. and S. Bing Company 

6. Silverst in and Sons Comnany 

"In formulating the recommendation for the award,. the 
following facts were borne in min-^ , to wit: 

"1. The six firms against whom the awards were made 

could pay the entire Code Authority Bills and in doing 

so would not raise their costs to a non-comnetitive level. 

"2. To ask some of these firms, to nay the Code Authority 
"bills as rendered when revised to cover the full neriod 
would he impracticable since the large sums. which some of 
the firms would have to nay might seriously affect their 
set-uo, or jeopardize their continuance in "business. 

"3. The "back nayment made by 'Greif comnrised annroxi- 
mately one- third of the Code Authority Billings. There- 
fore, the use of such anoroximate amount was made. Further- 
more, at the time the recommendations were made, the Code 
Authority Billings, to date, were not available; neither 
was the -oeriod to be covered by back nayments known. 

"4. Some degree of latitude had to be allowed in the 
fixing of the awards because of the fact that all the 
concerns involved had different tyoes of records and 
systems and would not lend themselves very easily to 
any one method of nrocedure to be followed in the dis- 
tribution of back nay. 

"5. The raising of the piece rate structure to the level 
in our findings of fact, as being the n -arest comparable 
competitive direct labor cost, was to take care of future 
compliance, and do away with the possible recurrence of 
the same situation that would eventually result; and in 
fact, that condition is nresent today. 

"6 These increases in direct labor cost for the future 
were in some cases slightly greater than the increases 
that would result were th3 Code Authority Billings met 
in full, but in no case would they place the firms in- 
volved in an inequitable competitive position. These 
slightly additional increases would nartly coiro^nsate 
the workers in future basic costs, for the substantial 
reductions recommended in the amount of the back nay as 
determined by the Code Authority. 

"7. In the case of Levine Brothers ■, the snecial recom- 
mendation that was made to ?et up piece rates was due to 
the fact that that firm had nothing that could be con- 
strued as a piece rate structure. 



9782 



-251- 

"On December 22, 1934, the awards as nco-nm ended by us 
and atrorovod "by Mr. Leon Henderson and Blackwell Smith 
wera presented to Mr.. F.. C. Williams, Attorney for all 
the Cincinnati firms. T ->n days were given to the resnond- 
ent firms to file statements or "briefs in relation thereto, 
after which the awards wer^ to go in effect, viz: January 
2, 19-5. 

"In the interim th3 six firms against whom awards w^re 
issued retain id a new counsel. 

"The n w counsel, Mr. Kusworm, requested time to study 
the facts in the cose and acauaint hims If with th n sit- 
uation. Time was granted, hut the awards were not changed. 

"On February 20, 1935, a hearing was held before the 
Advisory Council of the Co-nroliance Division to show cause 
as to whv the r soondents in these cases should not he de- 
prived of the use of tin 3ST. R. A. Blue 3asle and Cede Label 
for failure to comply m ith the terms of the award. The awards 
as rendered had b_ -n aeoroved by the Compliance Council. 

"Objections were raised by the respondents' new Attorney, 
Mr. T \uswor;n, at this hearing, to the entire oroce^dings 
on legal grounds and methods of procedure. Futhermore, 
he entered a motion that the Compliance Council set 
aside and hold for naught the arbitrator's Findings 
or awards made and to re-refer the matters to be arbi- 
trated r--soecting the said six firms to the arbitrators 
heretofore selected for the following reasons, namely: 

"First, Finding (A) of the award, to the effect 
that the Code Authority billing be re- 
duced to a-p-proximately one-third, is 
ambiguous. 

"Second, Said Finding (A) is contrary to law for 
th^. reason that the arbitrators did not 
make, with reference to Finding (A), a 
definite specific Finding. 

"Third, That said award is contrary to the Code 
of Laws of the United States, Article 9, 
in Statute of February 12, 1S25, C-213, 
Section 1043, Statute 885. 

"Fourth, That Finding (B) which raises the costs 

in all six concerns aforesaid of sack coats, 
vests, and/or cants, is not in conformity 
with the agreement cf arbitration and is 
uron matters not submitted to said arbi- 
trators. It is unfair and not for any 
specified time. 



9782 



-252- 

"Fifth, Said awards (B) are contrary to Code of Laws 
of the United States, Article 9, Section 11, 
Subsection B, being; also found in Statute of 
February 1?, 1925, C-213, Sction 1143, Sta- 
tute 885. 

"Sixth, That the Finding or award against Levine 
Brothers, Inc., marked (C) , to wit: 

"That the costs be put on a complete new 
piece rate basis, be set aside and held for 
naught, because of the same reasons set 
forth in th ; preceding paragraph marked 
'Fourth' ." 

It is not surprising to find tciat officials of the N. R. A. were not 
in perfect accord and were none too sut. of their ground in the -oart -clay- 
ed in hel-ohing the Code Authority with its II (b) c^ses. The following 
extracts from an opinion from the Legal Division of N. H. A. ap-oears 
rather conclusive evidence 'that the Administration was often filing its 
way and traveling -oaths none too well-charted in matters of Code enforce- 
ment* The following comments are directed particularly to the handling 
of the Cincinnati cases: (*) 

"Under the agreement dated October 19,' 1934, entered into 
between the Men's Clothing Code Authority and the Cincinnati' 
concerns, Blackwell Smith and Leon Henderson were to make 
•findings' and these findings 'shall be final, binding, and 
conclusive upon the parties hereto, and the firms listed 
therein will make such restitution of the amounts so found, 
; ' if any, to their workers forthwith.' 

"Under this agreement Messrs. Smith and Henderson 
were limited to two findings, (l) that the Cincinnati concerns 
had either complied or nad not complied with Article II, Sub- 
division (b) of the M'-n's Clothing Code, and (2) that in the 
event that th? arbitrators found violations of Article II, 
Subdivision (b) the concerns be required to pay th^ir employees 
the amount of back Day found to be du. 

"The awards maue by the arbitrators with respect to four of 
the concerns were proper in form and substance. 

"With regard to the following concerns the situation is quite 
different. ..... 



(*) Memorandum dated May 6, 1935, from Louis J. Altkrug, Assistant 
Counsel, to R. E. El well, Division Counsel. (Men's Clothing 
Co<?e Fil-->s, under Employment - - - Wag-:s and Hours - - - - 
Interpretations. ) 



9782 



-253- 

"In thr j case of each of these concerns the award made by 
the arbitrators was in the following form: 

"'(a) That the hack ray be reduced to approximately 
one-third. 

111 (b) That their cost be increased to the figures we 
have indicated in our findings of fact as b^ing 
the cost of fch - nearest comparable product, 
namely, ' (Here certain costs are set forth 
in each case for different articles made by 
the concerns in question.) 

"It is my contention . that the arbitrators had absolutely 
no authority to make any such awards in the case of the 
concerns found to hav< violated the Code. All that 
Messrs o Smivb and Henderson could do was to find (l) 
that each one of these concerns had violated the Code, 
and (2) the amount that they would be reauired to nay 
by way of restitution to each employee. Under the ar- 
bitration agreement it was not within the scone of the 
arbitrator to enter into the equities of the situation. 
I therefore do not think that the awards made by the 
arbitrators in the case of the second group of concerns 
can hold water 

"The next question is: What are we to do in view of the 
present state of the record? 

"Although the arbitrators may not have carried out their 
arbitration in a proper manner and although their awards 
may be subject to attach for that reason, I do not think 
that we ought to do anything that would jeopardize the 
fact that we have an agreement in writing from these 
p ople to arbitrate. I think that the arbitrators should 
call on both parties concerned, i.e,, the Men's Clothing Code 
Autnority and the six Cincinnati concerns and advise them that 
hearings will be held and each side may introduce such testi- 
mony as they see fit in support of their respective positions. 
The arbitrators can then examine these reports and the reports 
submitted by Messrs. Chavin and G-reenberg and they can then 
make their findings (l) that the six concerns have complied 
or not complied with Article II , Subdivision (b) of the Code" 
in view of the interpretation made by Lindsay Rogers on 
November 3, 1953, and approved on June 9, 1934, and (2) if the 
Cincinnati concerns have not complied, the amount due to each 
employee as calculated in accordance with the interpretation 
in auestion. 

"If the Cincinnati concerns feel that these awards are in- 
equitable they may then r^auest that th ' full facts of each 
case be submitted to the Committe. provided for in Article II, 
Subdivision (d) for their -further consideration in accordance 
with interpretation approved on S.ptemb r 26, 1933, referred 
to above. That Committ3e may then make its recommendations 



9782 



-254^ 
and awards on the basis of ecruities of the' situation. 

"I think that it would he very dangerous to go into 
court on the record we have "before us and I would 
recommend that steps be taken to insure an arbitration 
within the terms of agreement of October 19, V934. We 
ought not to do anything that would annul this agreement. " 

The Men's Clothing Code files do not reveal further evidence con- 
cerning the Cincinnati cases. Apparently the Supreme Court decision 
invalidating the Codes brought an end to all negotiations. 

IX. "EMPLOYMENT AND WAGES UNDER THE CODE 

The Code Authority under provisions of +he Code accumulated 
valuable records which were used chiefly in connection with enforcement, 
Nevertheless, certain compilations of interest have been made of -pay- 
roll and production data '"itch give a fair indication of trends within 
the industry 

March was the height of the 1934 s-oring season in the Men's 
Clothing Industry. Code Authority payroll records show that 127,919 ' 
workers were employed during the month, by 1,950 establishments. In- 
cluding workers employed by uniform manufacturers, who report sepa- 
rately, and those employed by small manufacturers and contractors 
not reporting, it was estimated by Code Authority officials that 
140,000 workers were employed at the peak of this season. It was es- 
timated that 108,000 were employed in. March, 1933. Accordingly, employ- 
ment in March, 1934, represents a gain of around 30$ over March, 1933. 
From March, 1934, .to .September., 1934, however,, there was a reduction 
of about 15% in the number of. oersons employed. This was due to the 
slackening of production during the. summer, season. ■(*) 

Hourly wages for all manufacturing employees,-; including cutters 
and pressers, in July, 1934, averaged 67,1 cents per hour. In March, 
1933, the average wage was approximately 42 cents per. hour. (Hourly 
earnings in the Industry reached their peak in 1934, when they were 76 
cents per hour.) The gain in weekly wages from 1933 to 1934 was not so 
large as the gain in hourly wages because of the reduction in number of 
hours worked^ for a full time worked period. During August, 1934, the 
peak month of the summer season, ■ manufacturing employees worked 27.8 
hours per week on the average, while weekly earnings averaged $18.63. 
Because of the practice- of division of work in the Industry, the 
figure of the number of hours worked is mor? than the number of persons 
listed on the payroll. (**) , 



(*). Report of Men's Clothing Code Authority Committee on Statistics, 
dated September 13, 1934. (Men's Clothing Code Files) 

(**) Report of the Mm' 3 Clothing Code Authority Committee on Statistics, 
dated September 13, 1934. (Men's Clothing Code Files) 



9782 



~255- 

To what extent the M^n's Clothing C->de or for that matter N..R.A. 
was responsible for improved conditions of employment and wag^s during 
the Code t> riod one cannot estimate with any degree of accuracy. Yet, 
it r- mains a fact that there was 1 marked improvement, a considerable 
measure of ^hich resnoncihle members *f the Industry are willing to at- 
tribute to N.'R.A. and the Men's Clothing Industry Code in particular. • 

On May 22, 1935, Mr, Mark 1. Cresap, President of the Clothing 
Manufacturers Associati a of the United States, made nublic a statement 
favoring the continuation of F.R.A.; in which ho summarized the experi- 
ence of employees in the Men'? Clothing Industry under the Code by 
citing the following figures: (*) 



Number of Total Man- 
Workers Hours Worked 
Period Em-cloyed Per Week 

March' 1929 154,135 5,548,360 

March 1933 109,610 3,157,729 

March 1935 147,066 4,897,298 



Average 
Weekly 

"Samings 

$24.82 
*12.68 
$22.04 



Total 
? Weekly 
Fay roll 



$3,825,631 
$1,389,855 
$3,242,011 



(For additional statistical data bearing uoon employment, 
wages and hours during the Code period, see Chanter II, pages 93-111.) 



(*) Source: . Code Authority estimates based on U. S. Census and Bureau 
of Labor Statistics figures. 



97S2 



-256- 

chapter vi 
eia.de practices 
i. codal trade practice provisions 

The Men's Clothing Code as originally approved carried provisions 
regarding only two practices under the title "fair trade practices" and 
these are found in Article XII as follows: 

"The following rules of fair trade practices are hereby established 
for the clothing industry: 

"(a) The sale of garments on consignment is prohibited as an unfair 
method of competition. The term "consignment" as herein used shall 
include the delivery by a manufacturer to any distributor, as 
agent, purchaser, or otherwise 9 under any agreement or understand- 
ing, expressed or implied, pursuant to which the seller retains 
any lien upon or title to or interest in the goods delivered, or 
pursuant to which the distributor may at his<'Option return any of 
the goods or claim any credits with: respect thereto. This pro- 
hibition shall not apply to contracts entered into prior to July 
14, 1933, the term of which expires within one year from the date 
of the enactment of the National Industrial Recovery Act. 

"(b) A manufacturer or a contractor shall not make garments from 
fabrics, trimmings, and/or other materials owned or supplied by a 
retail distributor or the agent, representative, or corporate sub- 
sidiary or affiliate of such retail distributor; nor shall he 
manufacture garments from fabrics, trimmings, and/or other mater- 
ials, the purchase of which is made upon the credit of or the pay- 
ment for which is guaranteed by such retail distributor or the 
agent, representative, or corporate subsidiary or affiliate of such 
retail distributor. This section shall not prohibit the operations 
of retail distributors owning and operating their own plants, 
shops, or factories who distribute products manufactured therein 
directly to consumers." 

There was added by Administrative Order on April 14, 1934, a new 
section to Article XII, known as Section (c), which read as follows: 

"No member of the Industry shall publish advertising (whether 
printed, radio, display of any other nature), which is misleading 
or inaccurate in any material particular, nor shall any member, in 
any way misrepresent any goods (including but without limitation 
its use, trademark, grade, quality, quantity, origin, size, sub- 
stance, character, nature, finish, material content or preparation) 
or credit terms, values, policies, services, or the nature of form 
of the business conducted." 

Article X of the Code reads as follows: 

" On and after the effective date, it shall be unfair competition 
for any manufacturer in the Clothing Industry, either directly or 
indirectly, to sell its manufactured product at a price below its 

9782 



-257- 

cost as determined, wituout any subterfuge in accordance 
with sound accounting practice. Cost shall include the cost of 
piece goods consumed, trimmings, cutting, and making; and 
, a percentage on the selling price to cover all overhead." 

Article X additionally provided for exemptions in the case of 
"seasonal clearances of merchandise" specifically defined and the 
closing out c£ '-'dro eel linos or surplus stocks" upon report to 
the Code Authority * 

II. CONSIGNMENT SELLIITG 

The above-quoted provision of the Code in prohibition of consign- 
ment selling in the Industry met with the full approval of "both groups 
which proposed Codes to the Administration. The wording of the pro- 
vision is almost identical with that suggested by the Industrial Re- 
covery Association » The Clothing Manufacturers Association did not re- 
commend a specific cor^'gnment provision, but expressed itself as 
opposed to consignment selling and described the practice in the' follow- 
ing language: 

"(a) There has developed a growing evil in the clothing industry 
commonly kr.ora as ''Lelivery of merchandise on consignment 
or memoranda" by the manufacturer to the distributor. This 
was accomplished by- any of the following methods: (l) By being 
billed on consignment- or memorandum. (2) By malting the distri- 
butor an agent of the manufacturer in the sale of the product. 
(3) By agreement- to take merchandise back that remained-unused 
after a given timer (4) By agreement that merchandise unsold 
after a given time may be exchanged for other goods. (5) 
By agreement that merchandise unpaid for within a given time 
may be reclaimed or returned and other and various agreements 
designed to weaken or modify the usual terms upon which an 
order for the maiv.v^ctui-e and sale of merchandise to cover the 
requirements of the distributer is given to the manufacturer. "(**) 

The Clothing Manufacturers Association; in further support of the 
proposal to eliminate consignment selling from the Industry, argued 
in the pre-Ccde hearings that consignment selling was unfair to both the 
retailer and the manufacturer. It was contended that a manuf ac ture r 
selling on consignment in a case where the retailer got into financial 
difficulty could withdraw his merchandise without risk of great loss 
whereas the manufacturer selling outright stands to lose to a greater 
extent. If the retailer was strong financially and bought on con- 
signment, it was asserted that this had a tendency to encourage the 
accumulation of unmanageable surpluses. Finally, it was asserted that 
the practice of shipping goods for a few days for special sales usually 

(*) For a discussion of machine hour provisions in the Code, see 
Chapter V, page ■ 

(**) Code submitted by the Clothing Manufacturers Association to the 

Administration, -July 13, 1933. (hen's Clothing Code Files.) 

9782 



-258- 

resulted in a very low price with the consequent , forcing-down of 
rates. (*) 

While no organized objection to a codal provision outlawing con- 
signment selling was in evidence during the writing of the Code, later 
the Woolens and Trimmings Distributing Trade made some effort to obtain 
modification of the adopted provision especially as concerned the Tailor s- 
to-the-Trade "branch of the industry. (** ) 

The Woolens and Trimmings Distributing Trade was anxious to con- 
tinue a practice existing prior to the Code which made possible sales 
in large quantities to individual manufacturers with widespread outlets 
built up by consignment selling. Nevertheless, the Code Authority 
advised the Administration that no change was favored "in view of the 
unanimous opinion of that branch of our Industry ( Tailor s-to-the-Trade) . 

By Administrative Order, five separate firms have been granted 
exemption in the consignment selling provision of the Code. These 
firms, with date of exemption and number of Administrative Order re- 
lating thereto, are listed as follows: 

S. Makransky & Son, Inc., Philadelphia, Pa. August 2, 1934, 
Administrative Order No. 15-32 

Hickey-Freeman Co. and Cohen Goldman Co., Hew York City. August 
28, 1934, Administrative Order No. 15-34 

Moritz and Winter Co., Milwaukee, Wisconsin. January 8, 1935, 
Administrative Order Ho. 15-48 

Levy Bros. & Adler Rochester, Eochester, N. Y. January 12, 
1935, Administrative Order No. 15-32 

The Men's Clothing Code Authority has consistently refused to 
approve any requests for exemption under the consignment selling prov- 
ision of the Code. The one and only slight deviation from this policy 
is noted in connection with the Code Authority's approval of the propos- 
ed extension of the exemption granted to Hickey- Freeman Co. and Cohen, 
Goldman Co.,'ronder Administrative Order No. 15-34. (****) 



(*) Testimony of J. G. Eickey, Men's Clothing Hearing of July 
26, 1933, Transcript, Pages 53 a nd 64. 

(*•*) Transcript of "Informal Conference between Eepresent- 
atives of Men's Clothing Industry and 7/oolens and Trimmings 
Distributing Trade, October 11, 1934." (Men's Clothing Code Files.) 

(***) Letter dated December 6, 1934, from George L. Bell, Execu- 
tive Director, Men's Clothing Code Authority, to Deputy Adminis- 
trator M. D. Vincent. (Men's Clothing Code Files.) 

(****) Letter dated March 3, 1935, from Morris Greenberg, 
Executive Director, Men's Clothing Code Authority, to Walter E. 
Woodford, Jr., Assistant Deputy Administrator. (Men's Clothing 
Code Files.) 



-259- 

A brief review of the exemptions granted under Article XII, Section 
(a) of the Code, as listed above, will present wore definitely the ex- 
tent and character of consignment selling in the Industry. 

A. The case of S. Lakransk" and Sons. Incorporated . 

The Kakransky c; < Ls Lm tortant in that it established a precedent 
in -the Industry, and concerns more individual establishments than all the 
other cases combined. The Administrative Order of August 2, 1934, granted 
the firm's Application on condition that sales be continued only to re- 
gular customers and that pending an investigation into all aspects of 
the ap-olication, The applicant ted suggested complete exemption for a 
period" of one year., stating that it had approximately 240 consignment 
accounts which could not be reduced to an open credit plan. It was. 
asserted that consignment selling represented $1,200,000 out of a total 
of $3,345,000, and that to. change the methods of operation immediately 
would result in distress merchandise being thrown on the market and 
would Cause the unemployment of 500 or 600 manufacturing employees. 

The investigation provided for in Order No. 15-32 was completed 
prior to September 14, 1934, according to Report of Executive Director 
Bell to the Code Authority in which he stated, "The facts as produced 
in the reports seem not to warrant the granting of any further exemption, 
and we filed a formal request for Hearing on the matter, should the 
Administrator decide that there should be an exemption granted. 1 ! The 
Code Authority's views did not prevail, however, as on December 24, 
1934, through Administrative Order No. 15-45 the exemption of the Mak- 
ransky firm was continued to June 15, 1935, and provided that 133 firms, 
the names of which were, filed with the National Industrial Recovery 
Soard, might be sold goods on consignment, these being accounts which 
could not be liquidated by June 15, 1935, "without undue hardship and 
financial loss." 

B. Cases of Hicke--- Freeman Co., Few York,- and Cohen -Goldman Co., 
Few York. 

The Rickey- Freeman Company and the Cohen-Op ldman Company were 
granted permission by Administrative Order To. 15-34, dated August 28, 
1934, to ship goods on consignment, with the right to petition for a 
further period of six months. The petitioners indicated that they 
favored the consignment provision of the Code and believed that as a 
rule merchandisers should assume retailers' risks. They asked an ex- 
emption, however, in the case of the one firm to whom they had been 

.ing on consignment for two years. The firm was represented to be 
old and of excellent reputation, slowly recovering from financial em- 
barrassment due to the depression, but for which additional time was 
necessary for it to demonstrate its worth and possibly attract new 
capital.- Early in March 1935, the interested parties requested a sir- 
months' extension of the original exemption and presented in support 



9732 



-260- \ 

thereof the recommendation of the Code Authority. (*) This e:;tention 
was granted by Administrative Order ho. 15-64, dated April 1, 1935, : 
upon the same terms as the original exemption. 

C . Case of Horitz and Winte r Company . 

Moritz and Winter, through Administr tive Order ho. 15-48, dated 
January 8, 1935, was privileged to ship on consignment to nine firms, 
the names of which are on file with the National. Industrial Recovery 
Board, to June 15, 1935. There nine accounts were found by the Ad- 
ministration to be those "which could not be liquidated by June 15, 1935, 
without undue hardship and financial loss." This finding was made after 
the Company had submitted a detailed analysis and description of each 
account . 

D . Case of Lev"/' Brothers and Adler Rochest er. 

Levy Brothers and Adler Rochester uoon application was granted ex- 
emption from Article XII, Section (a) by Order No. 15-52, dated January 
12, 1935. The Order provided that consignments could be made to the one 
firm named in the Order up to June 15, 1935. The applicant, as in the 
other cases, presented details concerning its business relations with 
its customer showing the latter' s need of financial assistance. 

On March 5, 1935, the Administration was asked to grant an exemption 
from the consignment provision of the Code to Waldman & Sons, New York 
City. In accordance with usual Administrative procedure, the case was 
referred to the Code Authority for recommendation. (**) On March 11, 1935, 
the Executive Director of the Code Authority advised: "The attitude of 
our Code Authority has been consistent on this point. It has disapproved 
similar requests and feels that it qannot, in fairness, approve this 
request, nor does it wish to establish a precedent by recommending the 
granting of this petition." The Administrator, relative to this request 
for exemption directed an inquiry to the petitioner asking that the firm 
"advise us when you last sold this firm goods on consignment. Will .you 
please also indicate what, if any, newly developed circumstances justify 
an exemption be granted at this time." 

E. Complaints Arising From Consignment Exemptions. 

On March 1, 1935, Mr. F. M. Curlee, Counsel to the Industrial Re- 
covery Association, made a. complaint relative to the exemptions from 
Article XII, Section (a) by the Administration. The complaints were that 
there was no legal justification for keeping secret the names of the 
133 firms filed with the National Industrial Recovery Board, to which 
Makransky was selling on consignment and that orders of members of the 
Industrial Recovery Association had been cancelled by retailers who had 

(*) Letter dated March 2, 1935, from Morris Greenberg, Executive 
Director, Men's Clothing Code Authority, to Walter E. Wood- 
ford, Jr., Assistant Deputy Administrator. (Men's Clothing 
Code Files.) 

(**) Letter dated March 5, 1935, to Morris Greenberg, Executive 
Director, Men's Clothing Code Authority, (lien's Clothing 
Code Files.) 

9782 



-261- 

snecial arrangements with the Hakransky firm not available to retailers 
generally. 

In reply to the above complaints on March 5, 1935, Deputy Adminis- 
trator M. D. Vincent advised Mr. Curlee that the matter of making public 
the names of the ilak: y firms customers had been referred to the Legal 
Division, which adviued chat the names were confidential. Additionally, 
it was explained that ii the facts are as reoortcrd by Mr. Curlee, they 
constitute the baris for an abdication to terminate or modify the 
llakransky exemption. I J :- was suggested that the members of the Industrial 
Recovery Association make such application without delay. 

Relative to this complaint a letter was addressed to the Hakransky 
firm by the Administration advising of the general complaint and reauesting 
that the Company report as to how many of the 133 firms still remain 
on the Company's books and the number 'Of firms without a. source of 
credit and to which consignment shipments are still made.(*) 

III. CUT, MAKE, AND T tli 

Article XII, Section (b) of the Code, above-quoted, was designed 
to outlaw a practice which had developed in the Industry, relative to 
which there was close agreement between the exponents of the two Codes 
offered for Administrative approval. This practice is generally re- 
ferred to as manufacturing on a "cut, make , and trim basis," and is 
described and criticized b^ the provision relating thereto and found 
in the Code proposed by the Clothing Manufacturers Association, as 
follows: (**) 

"There has developed in the clothing industry a pernicious 
practice on the part of a certain class of distributors to man- 
ufacture clothing without the usual responsibility and obli- 
gations that a producer in the industry owes to labor of giving 
labor decent hours of work, fair wages, and sanitary working 
conditions. A distributor "by exerting price pressure on these 
operators, forces the price of labor down to a point which has 
become a menace to the industry and labor. This is accomp- 
lished by: 

(l) The distributor buys the cloth and farms it out to fly- 
by-night and irresponsible persons v. ho carry no annual over- 
head and who shift their plant from place to place, making or- 
derly supervision of hours of work, wages, and sanitary labor 
conditions in their plants impossible* The cloth is cut by 
these irresponsible contractors, trimmed and made up into 
garments. This evil has grown and threatens the legitimate 
distributor and producer. (2) The establishment of credit 

(*) Letter dated March 12, 1935, to S. Makransky & Sons, Inc., from 
"alter E. "Toodford, Jr., assistant Deputy Administrator. (Hen's 
Clothing Code Files.) 

(**) Code submitted ~oy the Clothing Manufacturers Association to the 

Administration, Jul" 19, 1933. (Men's Clothing Code Files.) 
9782 



-262- 

lr r the distributor for the "benefit of the so-called manufac- 
turer with the woolen mills so that while in theory the .goods 
are charged to the manufacturer they are in fact p\ir chased and 
paid for by the distributor or with none 1 " advanced bv the 
distributor to the manufacturer with which to Day for sxich 
merchandise, (o) Or any subterfuge which results in a- contract 
for manufacturing on a "cut, make, and trim basis" pje unfair 
practices. ' 

"The foregoing provisions shall sot be construed to prevent 
a retailer from selecting or ordering any cloth for the ac- 
count of a manufacturer, but the cloth so ordered or selected 
must be -oaid for by the manufacturer, and the price for which 
the cloth was purchased must be included in the cost of the 
completed garment, subject to the uniform cost accounting 
practices provided by the code." 

As above stated, both associations proposing codes condemned the 
practice of "cut, make, and trim." r Jith respect to the last paragraph 
of the proposed clause above-quoted, the Industrial Recovery Associa- 
tion states: " r /e believe that the concluding sentence of the U.S.A. 
Code provision emasculates the section. !7e believe the prohibition 
should be made unqualifiedly as in the Industrial Recovery Code."(*) 

The Industrial Recover" Code had suggested an "unqualified" pro- 
hibition of the "cut, make, and trim" practice in the following pro- 
vision: (**) 

"The manufacture of garments from fabrics, trimmings, and 
other materials owned or supplied by a retail distributor, or 
the agent, representative, or corporate subsidiary or affiliate 
of such retail distributor, is prohibited. The manufacture 
of garments from fabrics, trimmings and/ or other materials 
the purcna.se of which is made upon the credit of, or the pay- 
ment for which is guaranteed by, such retail distributor, or 
the agent, representative, or corporate subsidiary or af- 
filiate of such retail distributor, is prohibited. This sec- 
tion shall not prohibit the operations of retail distributors 
owning and Operating their own plants, shops or factories 
who distribute products manufactured therein directly to 
consumers ." 

In the July 26, 1933, hearing pursuant to the adoption of a Code, 
Mr. Victor Riesenfeld, spokesman for the Clothing I.ianufacturers As- 



(*) Statement of the Industrial Recovery .-issociation to Adminis- 
tration, February 2, 1935, Sxhibit 6, page io? • (lien's 
Clothing Code Files.) 

(**) Code submitted to the Administration by the Industrial Re- 
covery Association of Clothing iianufacturers, July 19, 1933. 
(Men's Clothing Code Files.) 

9782 



-363- 

sociation, summarized the reasons for prohibition of the "cut, make, 
and triii" practice as follows :(*) 

"It has been indulged in in most instances by retailers 
for the purpose of undersell ,.n, ; their competitors, or where 
the lover selling price than the generally accepted standard 
is the main consideration for getting business. The pre- 
ssure of competition in forcing down the cost of cutting, 
making, and trir" iv; has become a menace to labor and to 
industrj'". The special type of contractor or manufacturer 
doing this type of work has been for the most part the 
most irresponsible." 

A. Proposed Amendment ^o Cut, Make, and Trim Provision. 

For several months after the adoption of the Code, no complaints 
were made to the Administration respecting the codal provision which 
had presumably outlawed the "cut, make, and trim" practice. On recommen- 
dation of the Code Authority, however, a public hearing was held in 
Washington, January S, 1934, with the view. to broadening and strength- 
ening this claiise cf the Code, The Code Authority suggested an amend- 
ment to Article XII, Section (b) which was designed to bring jobbers 
and wholesalers cf men's clothing under the same restrictions which the 
existing codal provision olaced upon retailers, giving the same reasons 
therefor as had been offered in behalf of the original provision. It 
was further asserted that "the clothing industry is subject to unfair 
competition and this is one. of the elements we have discovered should 
be amended and corrected. "(**) 

As a further reason for asking the amendment, counsel of the Code 
Authority stated "*** without authoritatively stating so, the Code Auth- 
ority has discouraged in a large number of instances the practice of cut, 
make, and trim. The only reason I come before you now and ask for the 
amendment is because i feel that the legal language of the Code might 
not be sufficient to warrant the interpretation placed upon it.(***) 

It developed in the course of this hearing that the proposed amend- 
ment would effect the operations of not more than thirty-five firms at 
the most, and counsel for the Code Authority testified that "the cut, 
make, and trim business in the Clothing Industry is not yet tfide- 

(*) Transcript of Hearing on Men's Clothing Code, July 26 and 27, 
1S33, Pages 93 ar.a.94. 

(**) Transcript of Hearing on Men's Clothing Code, January Z, 1934, 

Statement of David Drechsler, Counsel, Men's Clothing Code Auth- 
ority, Page 7 # 

(***) Transcript .of Hearing on Men's Clothing Code, January 3, 1934, 
Statement of David Drechsler, Counsel, Lien's Clothing Code 
Authority, page 45 # . 

9732 



' -264- 

spread."(*) 

Inasmuch as the chief argument advanced in favor of the proposed 
amendment was that the jobbers and wholesalers engaged in the iflanu- 
facture of clothing were not economically responsible for the main- 
tenance of labor standards, the question of resionsibilitjr under the 
Code definition from a legal standpoint ,-rose and was the subject of 
much debate. The legal adviser to the A&iuinistr tion gave the opinion 
that "whether he is called a contractor or a wholesaler, or v.hatever 
he may be called, so long as he is engaged in making these garments, 
he is covered by the Coc'e."(**) 

Counsel for the jobbers and wholesalers present tool: a like view 
and reasoned that they had subscribed to the Code provisions "in the 
;oast and considered themselves legally bound to do so. They contended 
that the proposed amendment v.mild result in making illega.l their bus- 
iness of "manufacturing" which consisted only in planning and directing 
the production, whereas all technical operations were performed b- ; - hired 
contractors or manufacturers. 

The labor adviser to the administrator argued that the jobbers 
and wholesalers were not manufacturers as they claimed — but simply 
merchants — and that it was ~oy reason and experience impossible to hold 
these people effectively responsible for labor provisions of the Code. 
(***•) The labor adviser also argued that it was labor's understanding 
from the inception of the Code that the "cut, make and trim ;orovision 
was intended to cover the whole field. "(****) 

The consumers' adviser to the Administration expressed opinions 
in opposition to the proposed amendment on the grounds that its adop- 
tion would remove "a very preferential price differential in this 
industry, as the contractors certainly could produce garments at a 
lower price than the conventional manufacturer. "(***** ) it v/as added 
that the amendment would restrict the production of garments which are 
probably favorable in price to the public. 

The Administrator toward the close of the hearing gave expression 
to his views in stating that "this Amendment suggested will do harm to 
small producers ji(******) 



(*) Transcript of Hearing on ken's Clothing Code, January 3, 1934, 
statement of David Drechsler, Counsel, lien's Clothing Code 
Authority, pages, 

(**) Transcript of Hearing on ken's Clothing Code, Jan. 3, 1934, 
Page 19 o 

(***) Transcript of Hearing January 3, 1934, Page 30. 

(****) Transcript of Hearing January 3, 1954, Page 45. 

(*****) Transcript of Hearing January 3, 1934, Page 74 > 

(******) Transcript of Hearing January 3, 1934, Page 75, 
9782 



-265- 

It was suggested also by the Administrator that the evils aimed at 
were still "hypothetical dangers" which could be dealt with when the 
occasion actually arose. 

The final outcome of this hearing on the "cut, make, and trim" 
provision of the Code is best explained in the words of the Deputy 
Administrator in charge, as found in a memorandum addressed to' the 
Administration Member of the lien's Clothing Code Authority, as follows: (*) 

"The result of the hearing on the Cut, Make and Trim Amendment to 
the weu's Clothing Code authority was a reference back to the 
Code Author it,-'. 

"At the hearing it developed that certain concerns having con- 
tracts with Hillman would be out out of business. This was not 
the intent of the node Authority, nor the desire of either 
Hillman or Drechsler. 

"It seemed satisfactory to all, therefore, that the matter be re- 
ferred back to the Code Authority and that some other way be 
devised to accomplish the purpose desired without possibly 
doing wanton injury to any business." 



(*) memorandum of January 4, 1934, from Earl De:n Howard, Demitv 
Administrator, to 3. H. Gitchell, Administration Member. 
(Wen's Clothing Code Files, under Amendments A-H.) 



9782 



. -266- 

B. TIIE SZARS ROEBUCK EXEMPTION- CAS'2 . .(Lower Case) 

Upon the application of Sears Roebuck Company, of Chicago,, for 
exemption from the "cut, make, and trim" provisions of the Code a 
public hearing on . the matter was held in Washington May 29. 1934. The 
Company based its appeal on the contention that hardshipswould.be 
suffered if wcolcns could not be bought for contractors; that the 
company did not desire to give up its old manufacturers, especially 
in that th'es^ "small manufacturers are better sources of supply for 
us because of the fact that our business is more valuable to, them, 
and therefore they are willing to adapt their patterns, sizes, styles 
and manufacturing details to our requirements;" that through- present 
arrangements, the company has been able to supply the low income 
class of customers with good quality clothing at low prices — ; ' " 
that it is necessary "to place orders for large quantities of cloth 
before mills make their regular showing to the trade;" that catalogue 
commitments must be protected by the company itself since the manu- 
facturer would not know what quantities to buy even though financially 
able." (*) In the testimony of Sears Roebuck it was brought out that 
60 per cent of their clothing business would be affected by this codal 
provision. The tail Order Association of America, Inc. , Joined with 
Sears Roebn.ck, not in; requesting an exeni tion, but i. contending that 
the entire codal provision should be remov d from the Code, pointing 
out that confusion in the early writing of codes had caused them to 
overlook protests at that time, but that as early as March, 1934, verbal 
and written protests had been made to the Administrator stating that 
the codal -provision was considered "unfair and discriminatory" and that 
an amendment was in order. (**) 

By Administrative Order'No. 15-17, dated July 19, 1934, Sears Ree- 
buck was denied the requested exemption. The D e puty Administrator ad- 
vised in support of this order that the hardship suffered by Sears Roe- 
buck did not jeopardize their clothing business and that other dis- 
tributors have the same claim to exemptions, which, if granted, would 
impair the codal provision. Thus, it was pointed out that the only 
issue heard was that of the requested exemption -aid that the codal 
provision was not on trial. The report of the consumers' adviser 
attached to the Order of denial recommends the granting of the 
requested exemption on the grounus that a denial would work a 
hardship. The Research and Planning Division advised in favor of ex- 
empting the applicant and others similarly situated on the ground 
of Research and Planning' s objection to the original incorporation of 
the provision in the Code. 

C. PROPOSED irTIRPRETATIOl! OF CUT, MAKE, APD TRIM PROVISION (Lpwer-case) 
The Administration Member of the Men's Clothing Code Authority, on 



(*) Transcript of Hearing May 29, 1934, Sears Roebuck Co. Application 
for Exemption, Pages 16, 19 and 20. 

(**) Transcript of Hearing May 29, 1934, Sears Roebuck Applicant for 
Exemption, P a ge 12. 



9782 



-267- ... 

October 15, 1934, advised the Administrator that the Code Authority wished 
to amend Section (b) of Article XII of the Code, so that "It should not 
apply to such manufacturers' who make garments for tailors-to-the-trade 
and special order houses when such garments are made to measure for the 
individual customer!^*) This proposed amendment carried the approval of 
the Administration Member, Hie Deputy Administrator referred this matter 
to the legal adviser, who reported thereon as follows: I agree with the 
principle involved in this interpretation. Nevertheless, I feel that 
this interpretation in effect amends the Code provision and I "believe 
that the proper remedy is an amendment to the Code rather than the in- 
terpretation. ''(**) Subsequently this proposed interpretation was sub- 
mitted as an amendment and was noticed to be heard April 15, 1935, 

IV THE COST FOBiraiA 

As indicated at the beginning of this Chapter, the Code carries a 
selling below cost prohibition. The Code Authority, early after its 
establishment, appointed a Committee on Cost Accounting charged with the 
responsibility of devising a cost formula upon the basis of which 
Article X could be enforced. This Committee consisted of the following 
representatives of the Industry! 

Julius H, Lev;' - , Executive Secretary, , New York 
Clothing Manufacturers Exchange. 

Samuel Browne, Comptroller, Hart, Schaffner & 
I.iarx, Chicago. 

TJh, B, Flickstein, Secretary, Philadelphia Cloth- 
ing Manufacturers Association, Inc. 

Jerome I. Udell, Max Udell Sons and Co., Hew York. 

Isadore Wolrich, Hew York Knee Pants Co. 

Harry C, Freneau, Secretary and Treasurer, B. 
Euppenheimer and Co., Inc., Chicago. 

John D. Stevenson, Secretary and Treasurer, Fashion 
Park Manufacturing Co, 

On November 8, 1933, the above Committee reported to the Code Au- 
thority that various markets and records had been studied with extreme 
care aiid that recognized firms of certified public accountants had 
cooperated by making analyses from their statistical records. The 
results of the investigation and report were summarized as 



(*) Letter from 3. H. Gitchell, Administration Member, To Dean G. Edwards 
Deputy Adninistrator, dated October 15, 1934. (Men's Clothing Code 
Files, ) 

(**) Memorandum dated October 26, 1534, from A. H. Barenboim, Assistant 
Counsel, to Dean G. Edwards, Deputy Administrator, (Men's Clothing 
Code Piles. ) 

9732 



-363- 

follows: (*) 

"In determining the ' irreducible minimum, ' the committee has "been 
guided "by "the "belief that it was not the intention of the Code 
to protect inefficient manufacturers operating under the high- 
est overhead, or to base the formula on the records of a small 
number of manufacturers who may be operating at the lowest 
overhead, but to use as a basis the average by and large of a 
fair cross -section of th e entire indust ry over a -period of t he 
last five year's . " 

"A study of all of the figures led to the decision that the 
'irreducible minimum 1 for the computing the total cost of a 
garment should be arrived at by adding to the prime cost (woolens, 
trimmings, tailoring, cutting and sponging) an amount equal to 
5 per cent of such prime costs for General I.ianufacturing Overhead , 
and by adding to the new total so obtained an amount equal to 
11.11 per cent for Selling and Administrative Overhead ." 

In order to place contract shops and inside shops upon a fair 
competitive cost basis the Committee further recommended: 

n***as a preliminary step, in order to enable inside shop 
manufacturers to properly compute the prime costs — that 
a minimum, 'of 20 per cent be officially approved as the 
overhead that shall be added to productive labor by an in- 
side shcp manufacturer in a rriving lat the cost of tailoring. 
Cost of 'sewing 1 ' shall then be added as a component part of 
the total tailoring costn." 

The Committee recommended that the figure 5 per cent for General 
Manufacturing Overhead and the fig-are 11.11 per cent for Selling. and 
Administrative Overhead be mandatory. . Attention was especially direct- 
ed to the fact that S G lling and Administrative Overhead classifica- 
tions did not include advertising and that the formula "makes no pro- 
vision whatsoever for profit and is therefore not to be considered as 
a recommended sales price. 11 

It is not clear exactly when the Code Authority's cost .formula 
was submitted for Administrative approval., Howe.ver, the Executive 
Director reported to the Code Authority on January 8, 1934, that the 
formula had not been approved, adding:" (•**) 



(*) Report of Cost Accounting Committee of the Lien's Clothing Code 
Authority. . (Ken's Clothing Code Files.) 

(**) Report of Executive Director to the Code Authority, January 8, 
1934. (lien's Clothing Code Piles.) 



9732 



-269- 

"***I brought the matter to the attention of several of the 
higher officials pointing out that it was unfair to leave us 
in our present situation as the 'selling below cost' nrovision 
in our Code is practically meaningless unless we nave" some 
formula." 

Again on September 14, 197A, the Sxecutive Director reported 
to the Code Authority: (*) 

"As you know they disapproved the formula we submitted and 
also informed us that they were going to rewrite our entire 
clause on the subject. I have had the matter un with every- 
body concerned at Washington but the only response that I can 
get is that the whole matter of selling below cost in our 
code, and in many other codes, is still being considered by 
the Legal Department." 

* , Jl l f e ^ onse to various Inquiries made of the Administration as 
to what had been done relative to re-drafting the cost provisions of 

;- ens Clothing Code, the Deputy Administrator on September 17 
1934, advised Mr. Dell, Executive Director, of the general Administra- 
tive policy m regard to costs by forwarding release, No. 5600 with 
the comments: "I question whether or not the open price filing oro- 
visions would be practicable in the Lien's Clothing" Industry. It appears 
however that an application of the cost and .rice cutting "revisions 
as outlined m Po. 228 (office memorandum), should be of great v^ue 
to you." One week later the Deputy Administrator advised an official 
of tne Coae Authority that "your code contains the provision regarding 
selling below cost and we feel that you should attempt to enforS thif 
Provisions and if this should prove inadequate, it snould be tended 
« accordance with the latest policy of administration." (**) 

of the\,°f °+r, 8 ' X f 4 ' thG Admin "trator in reviewing the history 
tL t^! C ? St acco ^ tin S system summed u, the opposition to 
tne proposed, formula, as follows: (***) 



55* ri 2 ^ 1 !?. 01 ™ * ' t0 th ° CodG Authority, January 8, 
±y---4. (Men's Clothing Code Files) 

(**) Letter dated September 25, 1934, from M. D. Vincent, Deuuty 

Co^niesT' t0 C0raptr ° ller H - K ' Herwitz « CMen's dotning 

^^ St^tor ? '1o ° Ct t- 3r % 19Z4 ' fr ° m H ' D - Vincsnt ' ^puty Admin- 
"7> 4 " riK f Horowitz, Assistant Co-ansel Men's Cloth- 
ing Coae Autnonty. (Pen's Clothing Code Files) 



9782 



-270- 

"I see nothing in the Ken's Clothing Code which would 
permit the Code Authority- to stipulate a mandatory 
overhead percentage. Regardless of the merit of the 
particular percentages chosen, the procedure would, 
appear to be ultra vires." 

This statement of the Deouty Administrator was in line with opinions 
expressed by his advisers. The Research and Planning Division as early as 
January 29, 1934, had expressed this view and the Consumer Adviser on 
January 30, 1934, stated: "Article X refers to cost elements which are 
those of the manufacturer himself, thus, the standard rate of overhead 
which is recommended by the reports of the committee on cost accounting 
should not be made mandatory on every member of the industry. " 

(a) Uniform Ac counts 

The executive Director of the Code Authority, on August 29, 1934, 
pointed out to the Administration the difficulty of securing adequate 
information from certain manufacturers and contractors who failed to 
keep time cards for more than one or two months, and inquired whether 
or not the Administration would not order manufacturers and contractors 
to keep records for a period of one year based upon the eodal provision 
Article XIII, Section (d) clause 1 which empowered the Administrator to 
require "***the keeping of uniform accounts as may be required to secure 
the proper observance of the Code***." The Executive Director argued 
that such a requirement would not be as drastic as an order "requiring 
the keeping of uniform accounts. "* 

This inquiry from the Code Authority elicited from the Adminis- 
tration the response that "If the Code Authority will formally recom- 
mend a ruling in this regard, this office will attempt to obtain a 
final determination. "** 

7. COMPLIANCE 7ITII TRADE PRACTICE PROVISIONS 

The hen's Clothing Code Authority early recognized the impos- 
sibility of attempting to enforce Article X of the Code especially 
in that the proposed cost formula was not approved by the Admin- 
istration. On July 12, 1934, the Code Authority advised the Compli- 
ance Division that "Our investigators with reference to this provi- 
sion are concerned largely with whether the manufacturer lives up 
to the labor provisions of the code. We have not attempted to enforce 



(*) Letter dated August 29, 1934, to John R. Beecroft, Assistant 
Deputy Administrator, from Ge.orge L. Bell, Executive Director, 
Hen's Clothing Code Authority. (Men's Clothing Code Files.) 

(**) Letter dated September 15, 1934, from II. D. Vincent, Assistant 
Deputy Administrator, to Code Authority. (Men's Clothing Code 
Piles.) 



9782 



the selling-below-cost provisions of the code as such." (*). At this time, 
it uas reported by the Code Authority that approximately 1C6 complaints 
on selling below cost had been received up to July 12, 1934. 

71. DH0PF2D LUTES OR SURPLUS STOCKS 

On February 8, 1755, the Code Authority advised the N.H.A. Textile 
Division that inasmuch as the Code Authority's cost formula had not been 
approved, the Code Authority could not proceed with its report under Ar- 
ticle X with respect to dropped lines or surplus stocks. 

Complirnce witn the consignment and "cut, make, and trim" clauses of 
the Code have been covered in this Chapter. Nevertheless, an examination 
of the total number of trade practice complaints as reported by the Code 
Authority to the Washington Corroliance Office ma- r prove of some interest. 
The Code Authority's report to the Washington Compliance Office for the 
period fro.: September 15, 1934, to January 19, 1S35, reveals that of the 
157 trade practice complaints on hand and docketed (allowing for bookkeep- 
ing rejections), in 11 cases no violations had been found, 114 were re- 
ported adjusted, leaving 32 on hand, none having been referred to the 
Compliance Division. 

As explained above, the Code Authority made no attempt to enforce 
the selling below cost provisions of the Code, but used complaints re- 
lative thereto as a. basis for investigating the likelihood of wage and 
hour violations. Accordingly, many of the trade practice complaints 
reported to the Compliance office might have shown up finally as wage or 
hour complaints. The Code Authority reported on February 2, 1935, that 
the bulk of old complaints, labor and trade practice, were of a jurisdic- 
tional nature arising oat of conflicts with the Cotton Garment Code, the 
Merchant Tailors' Code, and other Codes. 

Conroliajice procedure of the Code Authority is discussed in the Chap- 
ters "Code Administration Organization and Procedure" and"Labor Under 

the Code." 



(*) Letter dated July 12, 1934, from Hen's Clothing Code Authority to 
Stanley I. posner; Compliance Division Piles. 



S782 



-272- 

VII. PROPOSED AiJEHBLIEITOS 'TO PAIR TRADE PRACTICE PROVISIONS (Prepared 
by A. Palna Aaronscn) 

The Lien's Clothing Code Authority early in 1934 appointed a com- 
mittee on fair trade practicec. This cora.iittee spent much time confer- 
ring with the retail and wholesale groups which were directly concerned 
with the practices under consideration. 

The trade practices being considered and the issues involved can 
"be best set forth by the following summary of the commit tee' s report to 
the Code Authority on June 8, 1934.* 

A. Fair Trade Practices under Consideration by Committee 



on Pair Trade Practices 



tL. 



Committee reports that conference was held with the National As- 
sociation of Wholesale Clothing Salesmen, Inc. The last named 
group urged upon this Committee the necessity of emending the 
Code to establish fair trade practices in the interests of sales- 
men. Committee ao.vises Code Authority that it is not incumbent 
upon Code Authority to act upon the petition of the Wholesale 
Clothing Salesmen before a decision is made by Administrator 
Johnson himself upon the matter of traveling salesmen. 

This Wholesale Clothing Salesmen's Association likewise urged 
upon the Code Authority the following amendment to the Code: 

"It is an unfair trade practice for a manufacturer to make or 
grant bonuses, discovmts or allowances of any nature to persons, 
corporations or associations, organized for the purpose of se- 
curing member retailers to make purchases for them and in con- 
cert for a profit in return for which services such person, cor- 
poration, or association are to receive or share any part of 
such bonuses, discounts or allowances." 

The Committee with respect to the last named proposal only com- 
ments that we are not certain whether we should again take up 
with the Administration a proposal that has been rejected. 

The Committee on Pair Trade Practices conferred with the na- 
tional Retail Code Authority regarding the following proposed 
amendment to the hen's Clothing Code: 

1. An amendment designed to prevent the manufacturer from op- 
erating from his own loft. Giving consideration to the fact 
that the manufacturer possibly did have the privilege of sell- 
ing to his own employees and also allowing the manufacturer to 
deliver to the customer or consumer certain merchandise on a re- 
tailer' s order. 

The committee advises that they see no objection to the prin- 
ciple involved in this amendment but comments that many re- 
tailers throughout the country do not think that such a fair 

'*) Report of Committee on Pair Trade Practices, June 8, 1934. (Men's 
Clothing Code Piles.) 

9782 



trade practice would have teeth in it. But, they would be just as 
dissatisfied as they are at present if the amendment were put into 
the Code. 

2. It was unanimously agreed "between the two committees at least 
in principle, that an amendment such as follows should be incorpor- 
ated in the Code. 

"If because of the imp o s i t i on of taxes, excises or governmental 
charges not now existing, or new laws governing the working hours 
or compensation of labor or of codes, agreements, regulations, pro- 
clamations or orders made pursuant to any existing or new laws, 
the cost to the seller of filling this order is increased, the buyer 
agrees to pay such increased cost to the seller." 

3. It was agreed between the two committees that final delivery 
dates should be provided for in the Code, fixing definite dates for 
spring men's three and four-piece suits, fall overcoats, spring 
topcoats, and fall topcoats. It was agreed that equitable dates 
.could be worked out between the two groups concerned, 

4. The two committees agreed that provision should be made requir- 
ing manufacturers to complete spring and summer shipments to the 
house 50 days earlier than the dates agreed upon in the foregoing 
proposal, and to ship at least 50 per cent of suits and topcoats 

to all sections of the country 30 days prior to the final delivery 
dates specified,, 

5. The committees unanimously agreed that the Code should be 
amended to provide that all clothing is to be sold f. o.b. from the 
city of manufacture. 

5. t The Men's Clothing Code Authority Committee recommends am amend- 
ment to the. Code somewhat standard in character relative to the 
defamation or disparagement of competing manufacturers by falsely 
imputing to them dishonorable conduct, etc. 

7. The Clothing Committee recommends an amendment providing that 
an order is a bona fide order unless otherwise specified in writ- 
ing on the face of the order at the time it is given. 

8, The committee recommends that if the Code Authority agrees the 
Joint Committee should set a definite limit of tine either 10, 20 or 
30 days from the date an order is placed for revisions to be made. 

9. , Agreed by the two committees to recommend an amendment to the 
Code which would set a fixed extra charge price on special garments 
made for customers. "The changes among wholesalers vary, and in 
some instances retailers pay no extra charge although to cut a gar- 
ment specially costs the manufacturer between 15 per cent and 20 per 
cent extra." 

10. Agreed by the t* T committees that there should be an amendment 
requiring manufacturers to charge customers for the furnishing of 



9782 



-274- 

labels when the cost of such labels exceeds 4 cents per label, pro- 
vided that './hen combinations "manufacturer and customer" labels are 
used, no charge should bo made the customer, irrespective of cost, 

11. The Clothing Committee recommends an amendment to the Code pro- 
viding for uniform liberal terns, within say 6 per cent for all past 
due accounts. One definite suggestion made Mas: "Terms of payment 
shall not exceed cash discounts of 7-10 e.o.m, from date of ship- 
ment." Comment by the committee was to the fact that "we can work 
out with the National Retail Code Authority the exact phraseology 
of terms* We do not care to ask them to make a final determination 
.in this until our Code Authority had approved on the principle of 
. such an amendment." 

Conferences of the nature above-indicated continued intermittently 
throughout 1934. On September 14, 1934, Executive Director Bell reported 
that the Pair Trade Practice Committee had conducted correspondence with 
various retail organizations concerning practices which the Code Authority 
had authorized presented to the Administration. Some of the practices 
were favored and some not. Besides, he reported that visits to offices of 
some twenty different Code Authorities were made concerning fair trade 
practice provisions and their workings. 

B. The Trade Practice Hearing "10-1." 

Certain of the above-discussed trade practices were submitted to 
the Administration, and on llovenber 20, 1934, the original notice of 
hearing Ho, 10-1 was sent out. Partner notices of adjournment and ad- 
ditions are as follows:* 

Hot ice of Adjournment ITo. 10-1, December 1, 1934. 
Hotice of Adjournment Ho. 10-1, December 29, 1934. 
Supplementary Hotice of Hearing Ho. 10- I, December 31, 1934. 
Supplemental Hotice of Hearing Ho. 10- I, January 11, 1935. 
Revised Hotice of Hearing and Hotice of Adjourned Hearing Ho. 

10-1, Superseding all previous notices, January 31, 1935. 
Supplemental Hotice -of Hearing 10-1, February 9, 1935. 
Hotice of Adjourned Hearing 10-1, February 21, 1935. 

These several adjournments were the results of requests made by both 
the retailers and manufacturers d:a.e to the Christmas holiday season, the 
inventory period, the spring showing, and also due to the conflict with 
the Price and Labor hearings. 

Finally on April 15, 1935, a hearing was held in the Raleigh Hotel, 
Assistant Deputy Administrator Walter E. Woodford, Jr., presiding. 

1. The Executive Director's Statement. 

Mr, Morris Greenberg, Executive Director of the Hen's Clothing Code 
Authority, successor to George L. Bell, made the following statement at 
the Hearing:** 

(* ) Volume I of Transcript of Hearing on Hen's Clothing Industry Amend- 
ment Proposal, April 15, 1935, Page 2. 

(**) Volume 1, Transcript of Hearing on lien's Clothing Industry, Auril 
15, 1935, Page 29. 

9782 



"I, this much-postponed hearing had cone off at any of the earlier 
dates for which it was set, it would have been necessary for ne to 
clair, much more of your tine than there is now any occasion for me 
to do. For as we cone before you here, we are in the happy joosi- 
tion of having secured agreement to the proposals affecting the 
ready-to-wear division from the associations which comprise the. 
bull: of the nation's clothing distributors..... 

"We are proud, Mr. Administrator, to have achieved this triumph 
of accord with the retailers of our product... fe had conferences, 
repeated conferences, with representatives of the retailers' asso- 
ciations, sometimes with a single official or two, sometimes with 
a committee, and in those conferences we obtained the retailer's 
point of view. 

"...TTlien we met in Chicago Ten days ago with a committee of the 
national Retail Clothiers and Furnishers, including its president, 
Mr. Maurice L c Rothchild, its Executive Secretary, Mr. Allen 
Sinsheimer, and several prominent members of the Association, we 
were able to reach complete agreement with them in the course of a 
couple of hours of extraordinarily frank and friendly give-and- 
take. " 

C. grade_ Pract ice Amendments Scheduled for Hearing . 

A list of the fair trade practices as set down in the Notice of 
Hearing "go. 10-1, November 20, 1934 is as follows: 

"SCHEDULE 'A' PROPOSED AMENDMENTS TO THE CODE OF FAIR COMPETITION 
FOR THE MEN'S CLOTH IITG INDUSTRY 

"For all purposes of this code, the provisions hereinafter set 
forth shall constitute unfair trade practices. Any member of the 
industry, who shall directly or indirectly, through any officer, 
employee, agent, or representative knowingly use, employ or permit 
to be employed, or be engaged in any such unfair trade practices, 
shall be guilty of violation of the code, and be subject to the 
penalties provided in the Act. The articles of the Fair Trade Prac- 
tices contained in this code shall constitute uniform conditions of 
sale of the industry, and it shall be an unfair trade practice to 
sell in violation of any of such trade practice regulations. 

"1. No manufacturer in the industry shall accept returned merchan- 
dise for credit, except for defects in materials and/or manufacture; 
delay in delivers'-; errors in shipments; or non-conformity to the 
specifications of the order. 

"2. (a) It shall be unfair trade practice to sell merchandise at 
a cash discount in excess of 7$, ten days E.O.M. (end of month), or 
6,o, seventy days from date of delivery as specified in the order, or 
if de liverj"- shall be made later than the date specified in the order, 
then seventy days from the date of actual delivery; provided, ho\7- 
ever, that an extension, not to exceed 50 days nay be granted to 
buyers of merchandise for shipment to the following states; Arizona, 
California, Colorado, Idaho ,.. Montana, Nevada, New Mexico, Oregon, 



-27S- 

Utah, Washington, and Wyoming. 

"(b) Anticipation shall not be allowed, at a rate in excess of 
o c i per annum. 

"3. All members of the industry shall sell merchandise on the 
Shipping terms of F.O.3., city of manufacture; or when a 
different method of transportation, such r>s Express, parcel 
post or airmail, is designated, or made necessary through no 
fault of the manufncturer, such transportation cost shall 
be charged to the buyer. 

"4. Customer's labels shall not be supplied by the manufacturer, 
but if furnished to him by the customer, the latter may be 
credited with the actual cost of the label, but not to ex- 
ceed two cents (2$) . Where combination 'manufacturer -and 
customer' labels are used, they shall be supplied by the 
manufacturer without charge to the customer. 

"5. Every sales contrrct or orc'er snail contain the following 
provisions: 

"(a) 'Prices on the undelivered balance of this order 
are subject to increase due to any Federal or State 
Law taxing processed or raw materials, or decrensing 
working hours or increasing compensation of labor.' 

"(b N 'This order when accepted is not subject. to 
. rev is.: on. or cancellation except for failure to deliver 
in accordance with conditions of sale or unless so 
specified on the free hereof.' 

"6. Ho member of this industry shall sell his products at re- 
tail unles:-: he operates a separate establishment main- 
tained frr Lhis purpose and regulated by the provisions 
of the Hetail Code. To constitute 'a separate establish- 
ment', such an outlet must be stocked with merchandise 
specifically assembled for distribution to the consuming 
public, and must employ the services of one or more em- 
ployees exclusively engnged in selling such merchandise 
to the consumer trade. 

"The foregoing prohibition of selling at retail shall not apply 
to (a) the ' Tyiiors-to~the~Trade' or 'Special Order Houses' of 
the ciolh'bjg industry, (b) to retail distribution of clothing 
on contract bid in wholesale quantities; or to (c) the sale of 
uniforms to individuals in the military or navpl establishments 
of the U. S. Government , or in the uniformed departments of 
any govern pent al agency; or (d) to sales made direct to the 
consumer by outside salesmen or canvassers; or (e) to bona fide 
sales to o manufacturer's own employees of garments for the 
personal use of such employees. 

"7. No garment shall be manufactured of woolen or worsted material 

or of summer and washable fabrics, which have not been sponged 

„ in the piece." ' > , 

9782 F 



-; 77- 



The original Notice -10-1, dated Novenber 20, 1934, contained no 
Schedule "B", However, in the December 31, 1934, Supplemental Notice 
of Hearing No. 10-1 Schedule "A" was an additional amendment proposed 
by the Labor Advisory Board that requested Article VII be deleted and 
the standard clause 

"that every employer make reasonable provisions for the safety and 
health of his employees. " 

be inserted in lieu thereof. 

In January 11, 1935, Notice, we find a further Labor Advisory Board 
proposal that 

"No person under eighteen years of age shall be employed at opera- 
tions or occupations which are hazardous or dangerous to the health". 

It was in the Revised Notice of Hearing and Notice of Adjournment 
of the Adjourned Hearing 10-1 (Superseding all previous Notices) 
January 31, 1935, that the two, above-mentioned proposals by the Labor 
Advisory Board were incorporated into the Notice as Schedule "B". (*) 

1. Retailers' Objections to Proposed Trade Practice Amendments. 

The amendments as proposed and submitted caused a great number of 
letters of protest to be sent in by retailers. The National Association 
of Retail Clothiers and Furnishers published in the "National Clothier, " 
a trade journal, their opinion of what the effect of the proposed amend- 
ments would have upon the retail clothing merchants of the country. As 
a result, a great number of letters of protest were sent to the Deputy 
Administrator in charge of the Code. 

A typical letter of protest is cited below: (**) 

"We urgently protest proposed amendments to the clothing manufac- 
turers code believing they are inequitable and unfair; that they 
would increase costs to the retail clothier and lead to higher 
prices to the consumer. 

".The only provision taking the retailers problems into consideration 
fails to give adequate protection to the retail store against manu- 
facturers selling at retail, 

"The provision permitting manufacturers to raise prices after con- 
tracts have been made would cause great uncertainty to confusion in 
the industry and '-ould make the placing of advance orders almost 
impossible. 



(*) Transcript of Hearing on Lien's Qlo thing Indus try, April 15, 1935, 

Page 19. 
(**) J. F, Gregory & Sons, Rockland, Me., to S. H. Ourbacker, Assistant 

Deputy Administrator, October 31, 1934, (Lien's Clothing Code Files) 

9732 



-278- 

"Limits of term, and discounts, label and shipping provisions would 
increase costs that cannot fee borne "by the merchant' today. 

"We protest these provisions most vigorously as we believe that 

the average merchant has about all he can bear at the present time,"' 

Those fair trade practices actually presented for consideration at 
the hearing "As Revided in Conference with the National Association of 
Retail Clothiers and Furnishers, April 5, 1935," are as follows: (*) 



I! 



"For all purposes of this Code, the provisions hereinafter set forth 
shall constitute unfair trade practices* Any mcraoer of the industry 
who shall directly or indirectly, through any officer, employee, agent, 
or representative, knowingly use, employ or permit to be employed, or 
be engaged in any such unfair trade practices, shall be quilty of vio- 
lation of the Code, and he subject to the penalties provided in the 
Act. The articles of the Fair Trade Practices contained in this Code 
shall constitute uniform conditions of sale of the appropriate division 
of the Industry, and it shall bo an unfair trade practice to sell in 
violation of any such trade practice regulations. 

"1. (a) No manufacturer in the industry shall accept returned mer- 
chandise for credit, except for defects in materials and/or manufat- 
ture; delay in delivery; errors in shipment; or non-conformity to the 
specifications of the order,, 

(b) The merits of each case of returns shall be determined by 
the manufacturer and retailer involved; but in the event of their 
failure to agree, dispute shall be referred to arbitration. Each 
party to the dispute shall appoint one representative to an arbitrat- 
ing committee, and agreement between them shall be binding. In case 
of disagreement the two arbitrators shall select a third as referee, 
and his decision shall be binding; provided, however, that returns 
totalling less than $100. from a single shipment shall not be subject 
to arbitration, 

"2„ Customer's labels shall not be supplied by the manufacturer, 
but if f irnishod to him by the customer, the -latter may be credited 
with the actual cost of the label, but not to exceed four cents (4^) f 
Where combination 'manufacturer and customer' labels are used, they 
shall be supplied by the manufacturer without charge to the customer. 

"3. Every sales contract or order shall contain the following pro- 
visions 

'This order is subject to the Fair Trade Practice provisions of the 
Men's Clothing Code.' 

"4. No member of this industry shall sell his products at retail 
unless he operates a separate establishment for this purpose and 
regulated by the provisions of the Retail Code. To constitute a 
'separate establishment', ,s.uch an outlet must be stocked -with 

(*) Transcript of Hearing on Men's clothing Industry, April 15, 1935. 

Pages 32-38-54-69. 
9782 



-■.79- 

merchandise specif ically assembled for distribution to the consuming 
public, and must employ the services of one or more employees ex- 
clusively engaged in selling such merchandise' to the consumer trade. 

"The foregoing prohibition of selli i at retail shall r.ot ap n 
to (a) the 'Tailors-to-the-Trade' or 'S ecial Order Houses' of 
clothing industry; (b) to retail distribution of clothing on con- 
tract bid in wholesale quantities; or to (c) the sale of uniforms 
to individuals in the military or naval, establishments of the U. S. 
Government, or in the uniformed departments of •, \yj governmental 
agency; or (d) to sales made direct to th : consu er by outside sales- 
men or canvassers; or (e) to bona fide sales to a manufacturer's 
own employees of garments for the per -oral use of such employees. 

"5. "_ T o men's or young men's a/ar -il sh- 11 be. manufactured of r oolen 
or worsted material or of sum ier ana washable fabrics, which have 
not ^OQ^n sponged in the piece." 

D • Proposed Trade Practic es Sub mitted ^r Ta ilors-t o-the-Trade 
e: .". ".£•: t ilers 1 O bject ions. 

At the same hearing i'r. "'. C. Furscott, President, of the Kahn 
Tailoring Co., Indianapolis, Dad., offeree the following amendments for 
consideration; (*) to apply only " tailors- to-the-trade." a -a/or ".specirl 
order houses of the lien's Clothing Industry: 

"(1) Transportation charges and insurance shall be added to each 
bill as a seprrate item, aid paid by the dealer. On C.O.D. 
shipments, money order fees shall likewise be paid by the 
dealer. 

"(2) Swatch lines put out by 'tailors~to-the~trade« shall not be 
larger than 77 square inches, nor shall card line samples be 
larger than 33 3/8 square inches. 

"(3) All samples of cloth shall b\e- so labeled as 'to show the content 
of cloth so labeled. 

"Fabrics labeled 'all wool' shall mean that the fabric so 
labeled is 10C$ wool. 

"Fabrics labeled 'wool and silk' decorations' shall mean that 
the fabric so labeled shall be all wool pith the exception of 
the decoration, which shall be sill:. 

L'JTabricsliLabelad'wool with rayon decorations ' shall mean that 
the fabric so 1 labeled shall be all wopi wi.th the exception 
of the decoration, which shall be ra rr on or celanese, 

"~ brics ls.be led 'wool With' cotton mercerized decorations' 
shall mean that the fabric so labeled .shall be all wool with 
the exception of the decoration, which shall be mercerized 
cotton. 



978? (*) Transcript of Hearing On Ken's Clothing Industry, April 15, 
1935, Page 113. 



-23C-- 

"All other fabrics not specifically included above and con- 
taining wool and other fabric substance such as cotton, shall he 
labeled 'not all wool*. 

" (4-) Paying money or the equivalent of money to salesmen employed 
by competing firms for the purpose of enticing them away from the 
firm of their employment is hereby prohibited. 

"(5) Ha cash advertising allowance shall be made to dealers, but 
this provision shall not preclude the furnishing of advertising 
natter for distribution either by the manufacturer or ''oy the. dealer." 

A cop;- of the above-listed amendments was sent to the Executive 
Director of the National Association of Retail Clothiers and Furnishers 
by Assistant Deputy Administrator Waletr E. Wo'odford, Jr., requesting 
consideration by them. 

On April 22, 1935, the Association replied: (*) 

"Than 1 : you for your letter of April 19, 

"Within the past week our committee has had an opportunity 
to consider the proposed fair trade practice amendments sub- 
mitted by the Tailors-to-tlie-Trade group and to be added to 
the ::en's Clothing Code. : 

"Tie believe that, in the main, these provisions are not objec- 
tionable. In large part they will prehaps be of value in im- 
proving the position of the industry. 

"On general principles, however, some of the members of our 
Committee object to the inclusion of the word ' insurance • in 
the suggested practice #1, on the theory that retailers should 
have the right to say whether or not insurance shall be added 
to their invoices. 

"With reference to practice #5, some members of our committee 
believe that cooperative advertising is a matter that should 
bake care of itself — a matter that should be governed by 
negotiations directly between the manufacturer and the retailer, 
since all communities are not alike and all advertising condi- 
tions are not the same. There inay be instances in which manu- 
facturers may find it to their advantage to engage in cooperative 
advertising with the retailer or retailers in a given community. 

"Other than these suggestions ••'hich we lay before you, our 
committee lends its approval." 



(*) Letter 

to Walter E. Woodford, Jr., dated April 22, 1935. Consumers" 
Advisory Board Files, Central xiecords. 



9782 



-281- 

The foregoing fair trade practices that were presented for herring 
on April 15, 1.35, were never submitted to the various Advisory Boards 
for their cou :ents, nor V7ere they approved by the jfeti'onal Recovery 
Administra,tion. 



9782 



-282- 

VIII. PHOFOSIH "AIP FADE ?PACTIC"S PC?. UlTI-QP: HAi^lFACTUHEHS (Pre- 
pared 'by A. Falma Aarongon) 

The national Association 01 Uniform ; ^.nufacturers was formed some 
time prior to the date the National Industrial Hecovery Act was passed 
"by the Congress of the United States oi America. 

Immediately after its formation, tiie Association drew up a set 
of fair trade practice rules which were submitted to the Federal 
Trade Commission. Some of tiie fair trade practices v;ere approved and 
some rejected by the Commission. These rules were never made effective 
"because oi the ado tion by Congress of recovery legislation. The 
Association, upon approval of the Act, made application for approval 
of a Code of Pair Competition for the Uniform Manufacturing Industry 
with its accompanying fair trade practice section. 

After the hearing, the Association agreed to a merger with the 
Hen'? Clothing Industry Code am a section malrin,; special provision 
for administrative autonomy for uniform manufacturers under the lien's 
Clothing Code Authority was written into the Code as Section XVI: (*) 

"The Men's Clothing Cede Authority shall o.esignate the national 
Association of Uniform Manufacturers to aid the Administrator in 
the administration of this Code in rcsnect of the manufacture 
and distribution of uniform apparel and shall make recommendations 
to the Administrator in respect of the trade practices desirable 
for that branch of the industry." 

In a letter to Dr. Lindsay Rogers, Deputy Administrator, written 
by Harold 77. Schwab, Executive Secretary of the National Association 
of Uniform Manufacturers, July 28, 1933, is a "Summary of Association 
Protests Establishing lifferences Uniform vs. Clothing Industry," 
for the purpose of providing the essential data describing the basic 
differences existing between the Uniform Apparel Manufacturing Industry 
and the Men's Clothing Industry." ('**) 

The following comments refer to that part of the letter concern- 
ing fair trade practices only. (National Association of Uniform 
Manufacturers Code as compared with Hen's Clothing Code.) 

"Article IV — Labels, protests against use of same labels as 
Men's Clothing Code Authority. Asks for own distinctive labels. 

Article IX — Sales below Cost. Associations' system varies from 
Code, due to additional items, as special designing, sketching, 
higher wages, slower production, and uniform accessories." 

The Summary also points out that the Men's Clothing Code does not 
contain a ny fair trade practices providing for terms of sale, substitu - 

(*) Men's Clothing Code. 

(**) Letter dated July 28, 193S, frorn Harold 77. Schwab , ■Executive 

Secretary, National Association of Uniform Manufacturers, to Dr. 
Lindsay Rogers, Deputy Administrator, (item's Clothing Code Files). 

9782 



-283- 

tion of product?, misbrahdi . , pir by of 6 isi a, commercial briber' ', " 

. t Unifori : rcrs ar vitl 'ecial probli s 

that • . ,; jturers of men's clothing are not, and t ore ask that 
'due to the following evils, which 'ore steadily increasing, they pro- 
vide: 

"1. That secon - L or obsolete unifor: c lot be accepted 
rt of the purchase price of new uniforms. 

" .:. That a manufacturer cannot as s co sider; tion to or induce- 

ent for a sale, agree to service , press, or retailor the uniform 
throughout its life. 

"Z. That uniforms cannot be altered, cleaned; or pressed be lev 
cost. 

B-'.-. Uniforms cannot be 3et, hired, or rented by a manufacturer. 

"5. To enter into an agreement with a mill to disguise a certain 
f .brie so that the mill will ask a higher rice for it of com- 
petitors . 



■ o. To have a police department or any purchaser specify a 



"( 

fabric for its uniforms unltnown to other uniform manufacturers. 



"7. To sell for resale to another who violates the terms of our 
Code. 

"This is a very important provision, as often retailors 
compete direct!" with the manufacturers. 

"'"e feel that we need, in general the following provisions 
and nave provided accordingly: 

"(1) In regard to false ana misleading statement?. 

"(2) Espionage. 

"(3) Imitation to competitor's marks. 

11 (4) Repudiation of contracts. 

"(d) Inducing breach of contract. 

11 (6) Defamation of competitor and disparagement of his pro- 
ducts . 

"The Executive or Control Committee of the 'Clothing Manufacturers, 
in particular, coraposi i ai ily of civilian clothing men, totally 
unfamiliar with the Uniform Industry, would be called upon to 
decide on technical production - i istributive problems about 
which they knew little or nothing. What possible aid or control 
could they exercise in the circumstances? Ch »s and confusion 
would inevitably result in the Uniform Industry. 

"In general, it 'will prove disastrous to us if we have to submit 
confidential data and vital statistics which represent our life- 
time's,, experiences to another industry that competes with us and 
we not with it." 

9782 



Harold W, Schwab, Executive Secretary of the Uniform ilanufactur- 
£!§ Assqciation, submitted a list of fair trade practices to 
esistant Deputy Administrator John R. Beecroft, under date of 
August 31, 1954, with a request that a public hearing he held "at 
earliest possible moment." (*) The letter reads in po.rt as follows: 

"By approval of Mr. George Bell, Executive Director, of the lien's 
Clothing Code Authority, we are submitting herewith a list of 
trad.e practices which have been approved by the Lien's Clothing 
Code Authority for submission to you to be added to the Men's 
Clothing Code, when and if approved by the N.R.A. , under the 
terns of Article XVI, and applicable only to the manufacture of 
vni forms. 

"If the lien's Clothing Code Authority have madde application for 
any similar trade practices to be added to the Cod.e, we will 
accept their ">ractices and withdraw ours." 

The tra.de practices approved by the Men's Clothing Code Authority 
for submission to the H.R.A. under the provisions of Article XVI of 
the Men's Clothing Code, are: 

(Applicable to Uniform Manufacturers only) 

"1. To sell accessories below cost; cost shall include a fair 
percentage to cover all overhead. 

"2. To sell obsolete or misfit uniform apparel in excess of 3'"j 
of the annual sales in the preceding calendar year or more than 
$5,000.00 in amount in any one ye " r at prices necessary for 
disposal. Sales exceeding the stated amounts must be reported 
to the national Association of Uniform M-nufacturers prior to 
disposal below cost. 

"3. To cut and make Liniform apparel, excepting shirts, or 
blouses, from fabrics, trimmings and/or other materials furnished 
by or ordered on the credit guarantee of the buyer excepting on 
Federal Government contracts. 

"4. Substi tilt ion of one proci.uct for another . Shipping or 
delivering of products which do not conform to the samples sub- 
mitted or the specifications prescribed or representations made 
prior to the securing of orders without the consent of the pur- 
chaser thereto. 

"5. Terns: To sell uniform apparel as herein ciefineo. and/or 
accessories upon terms other than a maximum of thirty days net, 
or the allowance of a discount in excess of one per cent for cash 
payment within ten days from the date of shipment, provided, 
however, that on direct sales by m?nufacturer to the consumer 
an additional period not in excess of 90 days, may be allowed 

. the_jQurchaser for the payment of invoices. 

(*) Letter from Harold W. Schwab, Executive Secretary, National 
Association of Uniform Manufacturers, to John R. Beecroft, Assistant 
Deputy Administrator, dated August 31, 1954. (Men's Clothing Code Files). 

9782 



-285- 



"6. To offer for sale merchandise at a price re- 
duced from a marked-up or fictitious price, with 
the tendency and capacity to mislead or deceive pur- 
chasers or prospective purchasers. 

"7, Secret Rebates : The secret payment or allow- 
ance of rebates, refunds, commissions, or unearned 
discounts, whether in the form of money or otherwise, 
or secretly extending to certain purchasers special 
services or privileges not extended to all purchasers 
under like terms and conditions. 

"3. Misbranding . Falsely marking or branding of 
products of the industry with respect to the 
quality, quantity, grade, or substance of the 
goods purchased. 

"9, False or Misleading Statements . Making or 
causing or permitting to be made or published, any 
false, untrue, or deceptive statement, in the 
form of advertisement or otherwise, concerning 
the grade, quality, quantity, substance, char- 
acter, nature, origin, size, or preparation of 
a.ny product of the industry. 

"10. Enticing Employees . To maliciously entice 
the employees of competitors, with the purpose 
and effect of unduly hampering, injuring, or em- 
barrassing competitors in their business. 

"11. Imitation of Competitors' I&irks. To imi- 
tate the labels, trade marks, trade names, slo- 
gans, cr other marks of identification of com- 
petitors. 

"12. Espionage . To secure information from com- 
petitors concerning their business by false or 
misleading statements or representations, or by 
false impersonations of one in authority, and by 
the wrongful use thereof, to unduly hinder or 
stifle the fair competition of such competitors. 

"13. Commercial 3ribery . Directly or indirectly 
to give or permit to be given or offer to give 
money or any thing of value to agents, employees, 
or representatives of customers or prospective 
customers, or to the agents, employees, or repre- 
sentatives of competitors' customers or prospec- 
tive customers, without the knowledge of their 
employers or principals, as an inducment to in- 
fluence their employers or principals to purchase . 
or contract to purchase industry products from 



9732 



-286- 



the maker of such, gift or offer, or to influence 
such employers or principals to refrain from deal- 
ing or contracting to deal with competitors. 

"14. To maliciously induce or attempt to induce 
the breach of existing contracts between competi- 
tors and their customers by any false or deceptive 
means whatsoever, or to interfere with or ob- 
struct the performance of any such contractual 
duties or services by any such means. 

"15. Defamation of Co mpet itor and D isparage- 
ment of Products . To defame competitors by 
falsely imputing to them dishonorable conduct, 
inability to perform. contracts, questionable 
credit standing, or by other false representa- 
tions to disparage the grade or quality of a 
competitor's goods. 

"16. Confined Fabrics. 



(a) To enter into an agreement with a mill 
to disguise by any special number any standard 
or special fabric known generally to the trade 
by a given number and to establish for the 
fabric identified by the disguised number 

a price in excess of the current established 
price for the fabric identified with a number 
by which it is generally known to the trade. 

(b) To induce a contractee or purchaser 
to use and apply in specifications a number to 
denote a style of fabric upon which bidding 

shall be let publicly, which number is not generally, 
used and known to the members of this industry,', 
to denote a known fabric, unless immediately 
following the date upon which the manufacturer 
has obtained the consent of the contractee to 
specify the aforesaid number and said manu- 
facturer (l) submits in writing to the na- 
tional Association of Uniform Manufacturers 
the name of the mill manufacturing the product 
and full information concerning the style thereof, 
and (2) unless such uniform manufacturer shall, 
as aforesaid in writing, inform the mill that 
it may, upon the same price and terms and deliv- 
eries, without recourse, liability, or other 
obligations, quote to all manufacturers bidding, 
the same price, terms, and/ or delivery, and fur- 
nish the said fabric to the successful bidder 
whomsoever he, or it may be. . 

"17. Piracy of Design . To adopt for one's own 
use, by photostatic, photographic, or other means 

9782 



-267- 

of reproduction, the plates, cuts, or other il- 
lustrations contained in catalogues, publications, 

measure "boohs, folders and/or "blanks originated 
by a competitor. 

''18. For a manufacturer of uniform apparel, 

v.'here two or mere manufacturers have been asked 
to bid, to submit to a prospective purchaser 
samples of uniform apparel made specially for 
or to the specifications of a prospective buyer, 
unless paid for, where the manufacturer has; 
reason to believe or can ascertain that the 
total quantity of uniform apparel required by 
the purchaser rill not exceed one hundred units; 
provided, however, that after 'the successful 
bidder has been ascertained, he may furnish 
the necessary sample garments, 

"19. To charge less than cost for services 
rendered to a customer for pressing. . cleaning, 
re-building, repairing, or rc-taiZoring uniforns. 

"20. To accept uniforms of discontinued or ob- 
solete styles ?r old and socond-hr.nd uniforms 
in part consideration for the purchase price of 
newly manufactured uniforms, or for merchandise 
credit or cash. 

"21. As a consideration to or inducement for a 
sale, to service, press, renovate, or re-tailor, 
throughout the life of the uniform. ; 

"22. Tc alter and re-build or repair, below cost 
old uniforms so that the same will be adaptable 
for use by persons of size' other than those for 
whom their use was originally intended. 

"23. By agreement t^ accent "for" merchandise or 
cash credit, or for e;<:chan e, uniform "apparel as 
herein defined and/or accessories thereto if 
once paid for by the "buyer. 

"24. To manufacture any of the articles defined 
as. "uniform apparel" and to let, and/or rent the 
sa;;.e to anather. 



"25. Repudiation of contracts. To repudiate 
contracts whether written or oral are business 
obligations impressed with legal and moral re- 
sponsibilities and are not to "be repudiated by 
either buyers,' sellers, and/or employers.' 

"26. For any person, firm, or corporation 



9782 



-288- 



knowingly to aid or 'a"bet another in the use 
of unfair trade practices'." 

It was the opinion of Assistant Deputy Administrator M, D. 
Vincent (*) that the foregoing fair trade practices were "almost 
without exception applicable to the entire Men's Clothing In- 
dustry," and he had suggested to Executive Director of the Men's 
Clothing Code Authority that fair trade practices "be adopted 
by that body to be applicable to the entire Men's Clothing In- 
dustry. The Assistant Deputy Administrator saw the possibility 
that some of the practices would be applicable to the uniform 
manufacturers only, but that these could be considered at the 
same hearing as the generally-applicable provisions. 

A brief comment on each of the 26 fair trade practices 
submitted was made by the Assistant Deputy Administrator at 
the same time. 

On the same date, Assistant Deputy Administrator Vincent 
in a letter 'to George L. 3ell, Executive Director, Men's 
Clothing Code Authority, made the statement that "The present 
trade practice provisions appearing in the Men's Clothing 
Code seem to be inadequate," and asks to have the Code Author- 
ity's reaction to the submitted trade -oractices for the uniform 
manufacturers. He also mentions the fact that these (the uniform 
manufacturers') trade practice almost without exception would 
apply to the other members of the Men's Clothing Industry. 

The national Association of Uniform Manufacturers peti- 
tioned the N.H.A. on October 26, 1934, (**) requesting an 
interpretation of Article XVI of the Men's Clothing Code to 
the end that the policies and purposes of the National Recovery 
Act be made more effective by giving the uniform manufacturers 
autonomy. The Petition contains 41 paragraphs, each paragraph 
setting forth some general information concerning the Uniform 
Manufacturers Association, i. e., (l) representing 95,'j of the 
total production of uniform manufacturers, (2)' that of the 130 
manufacturers specializing in uniforms, 99 are members of the 
Association, representing 81.7$o of the volume of production, etc., 
and a running account of the Code 'as it pertains to the Uniform 



— ttv— >-* — » 

(*) Letter dated September 25, 1934, from M. D. Vincent, Assistant 
Deputy Administrator, to Harold W. Schwab, Executive Director, 
National Association of Uniform Manufacturers. (Men's Clothing 
Code Files.) 

(**) Petition of National Association of Uniform Manufacturers. 
(Men's Clothing Code Files, under Uniform Manufacturers.) 



9782 



-23C- 

Manufacturers in its attempt to secure autonomy under Section XVI, 
and its difficulties v/ith civilian manufacturers who occasionally 
manufacture uniforms. Further, that the Association had secured 

>roval "by the Federal Trade Coi.imission of twenty-four fair trade 
practices to which civilian clothing manufacturers were not com- 
plying; also objected to the charge for labels ($5.00 ->or K) 
by the Men's Clothing Code Authority, stating that it was not 
sufficient to operate the Uniform Manufacturing subdivision of 
the Men's Clothing Code, requesting that the charge of $10.30 per 
M for regular uniform labels and $15.00 per M for the special order 
labels be made. 

In connection with the foregoing, attention is directed 
to the recommendations of the Special Committee on Uniform 
Manufactv.rers, Branch of the Men's Clothing Industry. (*) 

"3. That the enforcement of the trade practice 
provisions of the uniform mr.nufacturers ' branch 
of the industry be carried on by the Uniform Manu- 
facturers Association, since they -?re proposing 
a number of separate trade practices applicable 
only to their branch of the industry „ Out of the 
income frtrn the sale of uniform labels, tne Men's 
Clothing Code Authority will pay monthly to the 
. Uniform Manufacturers Association s reasonable 
amount for the cost of enforcing trade practice 
provisions. If the Code Authority and the Uniform 
Manufactxirers Association cannot agree upon what 
is a reasonable amount for this ;uirpose, the amount 
should be determined by the Administrator. 

"4. Tit. t'the amendment to the Men's Clothing Code 
proposed by the Uniform Manufacturers Association 
to grant more or les3 com 'let e autonomy to the 
uniform manufacturers' branch of the industry be 
denied by the Administrator. The Ccmmittue believes 
that effective code r nforcument demands that there 
should be more centralization rather than decentra- 
lization. So far as the actual provisions of the 
Code are concerned, the Committee feels that its 
proposals regarding charges for labels and methods 
of enforcement of the labor ^revisions and trade 
practice provisions could be made effective ~oy the 
Code Authority since these moot questions have heen 
brought to the attention of the Ac-ministration, and 
since all actions of the Code Authority are subject 
to review by the .Administration, it is felt that 



(*) See grdiibit "I" — Recommendation of Special 

Committee, September 6, 1934, signed by 3. H. 
C-itchell, Chairman. (Men's Clothing Code files.) 

9782 



-290- 



thcse matters should be submitted to the Adminis- 
tration for approval before formal action is taken ■ 
by the Code Authority." 

- Attention .is called by B. H. Gitcholl as Chairman of the 
Special Committee to the fact that one member, Mr. L. A. Hirsch, 
did not vote on the recommendations as he was in Europe and had 
attended only the first meeting of the Committee. 

Mention has been made above of the twenty-four traie prac- 
tices that were approved by the F G deral Trade Commission, ef- 
fective March 16, 1934. 

• 

In a release for newspapers for March 13, 1234, the Federal 
Trade Commission announced the approval of fifteen trade prac- 
tice conference rules and nine others were accepted by the Com- 
mission as expressions of industry policies. 

By approval, it is understood that the Federal Trade bom- 
mission is of the o-oinion that the several trade practices 
"setting forth principles of law are enforceable" by the 
Commission. 

By acceptance is meant (in Federal Trade Commission 
parlance) that the industry has expressed itself, before the 
Commission, as believing certain practices ethical and desir- 
able. Failure to comply with the accepted practices, however, 
is not a violation of la?/. 

In its statement to the Industry, the Commission includes 
the following paragraph. (*) 

"The Commission has directed that notice bo given 
that in referring to or quoting trade practice 
conference rules, the form in which they appear 
in the Commission's Official Statement should be 
followed with reference to 'wording, grouping, 
numbering and lettering." 

The National Association of Uniform Manufacturers submitted 
to the Administration a list of Fair Trade Practices applicable 
only to uniform manufacturers, ancte petitioned for an early hear- 
ing. (**) This was evidently done in order to comply with the sug 



(*) Statement by the Commission, Trade Practice Conference, 
Manufacturers of Uniforms, March 15, 1934. 

(**) Petition and letter to Dean G,. Edwards, Deputy Administrator, 
from National Association of Uniform Manufacturers, dated Novem- 
ber 7, 1954. (Men's Clothing Code files.) 



9782 






gestions made "by Assistant Deput; Administrator i. : . D. Vincent 
in Ms letter of September 25, 1934, mentioned above, that the 
Men's Clothing Code Authority submit its reactions to the 
proposed fair trade practices, as he (YJ icent) thought them 
applicable to "both branches of the Industry. 

Then, on January 29, 1935, after the national Association 
of Uniform Manufacturers had proposed a supplementary Code to the 
Men's Clothing Industry Code, 3. K. Gitchell, the Administration 
Member of the Men's Clothing Code Authority, advised Acting Assis- 
tant Deputy Administrator S. H. Ourbacker that the Men's Clothing 
Code Authority had formally disapproved the pro >oae<? supplementary 
Code to the Men's Clothing Code submitted by the national. Association 
of Uniform Manufacturers, paying that the Code Authority ratified 
the report of the Special Committee that had studied the subject. 
This report recommended that the enforcement of the labor, provi- 
sions affecting uniform manufacturers be taken over by the Men's 
Clothing Code Authority staff and only the enforcement of fair 
trade pra.c»icos applying to uniform manufacturers be handled by 
their Association. 

He also recommended that the fair trade practices for- 
mally submitted by the national Association of Uniform Manufac- 
turers be submitted for hearing and determination by the Adminis- 
tration at the same time that the~general fair trade practices 
applying to the entire industry are taken up for consideration. 

A . Fair T rade F r acticos for Uniform Manufacturers approved 
by Pcci-rral T rac e Commission . 

A comparison of the fair trade practices as submitted by 
the ITational Association of Uniform Manufacturers as compared 
with those practices approved or accepted by the Federal Trade 
Commission is hereinafter set forth. 

PROPOSED UHA TRADE PRACTICE COMPARABLE F.T-C. TRADE PRAC- 

110. 1. TICE RULE, CROUP 1, PULE 1. 

Trade Practice Prohibited) 

To sell accessories below cost; Selling uniforms or accessor- 
cost shall include a fair per- ies below cost with the intent 
centage to cover all overhead. and with the effect of injuring 

a competitor and where the ef- 

(As suggested, we hereby with- feet may be to substantially 

dravr our proposed 1T.R.A. Trade lessen competition or tend to 

Fractice Ho. 1 and in its stead, create a monopoly or to unrea- 

offer the F. T. C. Trade Era ctieu= sonably restrain trade is an 

Group 1, Rule 1.) unfair trade practice. 



9782 



^ya- 



As 



(This rule was submitted, to the 
Federal Trade Commission and de- 
nied on the grounds that it was 
contrary to the antitrust laws. 
suggested, we have stricken out 
the words "National Association 
of Uniform Manufacturers "and in- 
serted the words "Code Authority. 11 ) 



PROPOSED 1IRA TRADE PRACTICE 
110. 2. 
(Trade Practice Prohibited) 

To sell oboslete or misfit 
uniform apparel in excess of 
3,j of the annual sales in the 
preceding calendar year or 
more than $5,000.00 in amount 
in any one year at rj rices 
necessary for disposal. Sales 
exceeding the stated amounts 
must be reported to the Code 
Authority prior to disposal 
below cost. 

PROPOSED ITPA TRADE PRACTICE 
HO. 3 
(Trade Practice Prohibited) 

To cut and make uniform apparel, (This rule was submitted to the 
excepting shirts, or blouses, from Federal Trade Commission and de- 
fabrics, trimmings and/or other nied on the grounds that it was 
materials furnished by or ordered contrary to the antitrust laws, 
on the credit guarantee of the 
buyer excepting on Federal 
Government contracts. 



PROPOSED NRA TRADE PRACTICE 
NO. 4 
(Trade Practice Prohibited) 
Ship-->in b or delivering of pro- 
ducts which do not conform to 
the samples submitted or the 
specifications Trescribed or 
representations made -orior to 
securing of orders without the 
consent of the purchaser 
thereto. 



COMPARABLE F.T.C. TRADE PRAC- 
TICE RULE, GROUP 1, RULE 2. ■ 

The practice of shipping or de- 
livering products which do not 
conform to the samples submitted 
or representations made -:>rior to 
securing the orders, without the 
consent of the purchasers to such 
substitutions, and with the ef- 
fect of deceiving or misleading 
purchasers, is an unfair trade 
practice* 



PROPOSED 1TRA TRADE PRACTICE 
ITO. 5 
(Trade Practice Prohibited) 

To sell uniform apparel as here- 
in defined and/or accessories 
upon terms other than a maximum 
of thirty days net, or the allow- 
ance of a discount in excess of 
one per cent for c a sh payment 
within ten days from the date of 



(This rule -.as submitted to the 
Federal Trade Commission and de- 
nied on the grounds that it was 
contrary to antitrust laws. 



9782 



-39; 



shipment, provided, however, that 
on direct sales by manufacturer 

to the consumer an additional 
period, not in excess of ninety 
days, may be allowed the pur- 
chaser T "or the payment of 
invoices. 

PROPOSED NBA. TRADE PRACTICE 
" lTo. 6. ' 
(Trade Practice Prohibited) 

To offer for sale merchandise at 
a price reduced from a marked-up 
or fictitious price, with' the 
tendency and capacity to mislead 
or deceive purchasers, or pros- 
pective' purchasers. 



COMPARABLE F.T.C. TRADE PRAC- 
TICE RULE, GROUP 1, RULE 13. - 



Offering for sale merchandise at 
a Trice reduced from a marked-up 
or fictitious price, with the 
tendency and capacity to mislead 
or deceive' purchasers or pros- 
pective purchasers, is an unfair 
trade practice. 



PROPOSED TRA TRADE PRACTICE 
Ho. 7, 



C0LPARA3LE F.T.C. TRADE PRAC- 
TICE RULE, GROUP 1, RULE 3. 



No member of the industry' shall se- 
cretly offer or make ar L y payment 
or alio van ce of a ret? l e, re: fund, 



commisEZ'.u cr; 



nefe.meo. dis- 



count or c::cess allowance, whether 
in the form of money , >r otherwise, 
nor shall a mam! er of the industry 
secretly offer a'r ertend to any 
customer any S] ~.:\:1 privilege 
or service not extended to 
all customers of the same class 
for the purpose of influencing 
a sale. 



The secret payment or allowance 
of rebates, refunds, commis- 
sions, or unearned discounts, 
whether in the form of money or 
otherwise, or secretly eztend- 
ing to certain purchasers 
spec al services or privileges 
no t witendod to all purchasers 
under like terras and conditions, 
with the intent and with the ef- 
fect of injuring a competitor 
and where the effect may be to 
substantially lessen competi- 
tion or tend to create a monopoly 
or to unreasonably restrain trade, 
is an unfair trade practice. 



PROPOSED NRA TRADE PEACTICI 
No. 8. 



COMPARABLE F.T.C. TRADE PRAC- 
TICE RULE, GROUP 1, RULE 4. 



No member of the industry shall 
brand or mark or pack any goods 
in any manner which is intended 
to or dues deceive or mislead 
purchasers with respect to the 
brand, grade, quality, quantity, 
origin, size, substance, character, 
rature, finish, iraterial content 
or preparation of such goods. 
9782 



The false marking or branding 
of products of the industry, 
with the effect of misleading 
or deceiving purchasers with 
respect to quantity, qual- 
ity, grade or substance of the 
goods purchased, is an unfair 
trade practice. 



■294- 



PROPOSAL ERA TRADE PRACTICE 

ilo. 9. 
(Trade Practice Prohibited) 

Making or causing or permitting 
to be made or published, ary false, 
untrue, or deceptive- statement, in 
the form of 'advertisement or other- 
wise, concerning the grade, quality, 
quantity substance, character, na- 
ture, origin, size or preparation: 
of any product of the industry. > 



PROPOSED ERA TRADE PRACTICE 

Ho. 10 
(Trade Practice Prohibited) 
To imitate the labels, trade marks 
trade names, slogans, or other 
marks of identification or com- 
petitors. 



PROPOSED ERA TRADE PRACTICE 

ITo. 11. 
(Trade Practice Prohibited) 

To secure information from com- 
petitors concerning their business 
by false or misleading statements 
or representations, or by false im- 
personations of one in authority, 
and by the wrongful use thereof, to 
unduly hinder or stifle the fair 
competition of such competitors. 



PROPOSED ERA TRA3 E PRACTICE 
ilo. 12. 

No member of the industry ahall 
give, or permit to be given, or of- 
fer to give, anything of value for 
the purpose of irflTiencing or re- 
warding the action of any employee, 
agent, or representative in rela- . 
tion to the business of the employer 
of such employee, the principal of 
such agent or the represented party, 
without the knowledge of such em- 



COiJF ARABLE F. T. C. TRADE PRAC- 
TICE RULE, GROUP 1, RULE 5. 

The making, or causing or per- 
mitting to be made or published, of 
any false, untrue, or deceptive 
statement, by way of advertisement j 
or otherwise, concerning the grade, 
quality, quantity, substance, 
character, nature, origin, size or 
preparation of any product of the 
industry, having the tendency and ■ 
capacity to mislead or 6.eceive pur- 
chasers or prospective purchasers, 
is an unfair trade practice. ; 

COLD? ARABLE E. T. C. TRADE PRAC- 
TICE RULE, GROUP 1, RULE 7. 

The imitations of the trademarks 
trade names, slogans, or other 
marks of identification of com- 
petitors, having the tendency 
and capacity to mislead or de- 
ceive purchasers or prosi^ective 
purchasers, is .an unfair trade 
practice. 

COMPARABLE E. T. C. TRADE PRAC- 
TICE RULE, GROUP 1, RULE 8. 

Securing information from compet- 
itors concerning their busi- 
nesses by false or misleading 
statements or representations, 
or by false impersonations of 
one in authority, or the wrong- 
ful use thereof to unduly hin- 
der or stifle the competition 
of such competitors, is an un- 
fair trade practice. 

COMPARABLE F. T. C. TRADE PRAC- 
TICE RULE, GROUP 1 RULE 9. 

Directly -or. indirectly to give 
or permit to be given or offer 
to give money or anything of 
value to agents, employees, or 
representatives of customers or 
prospective customers, or to 
agents, employees, or represen- 
tatives of competitors customers 
or prospective customers, 
without the knowledge of their 



9782 



-295- 



ployer, principal, or party. This 
provision shall not be construed to 
prohibit free and general distribu- 
tion of articles commonly used for 
advertising except so far as such 
articles are actually used for com- 
mercial bribery as hereinabove 
defined. 



PROPOSED PA TEAL: 
No* 13 



PRACTICE 



No member of the industry shall 
wilfully induce or attempt to in- 
duce the breach of existing con- 
tracts between competitors and their 
customers by any false and deceptive 
means, or to in x - fere with or ob- 
struct the perfc.".ance of any such 
contractual duties or services by 
any such means, for the purpose of 
hampering, injuring or embarrassing 
corroetitors in their businesso 



PROPOSED ERA TRADE PRACTICE 
No. 14 

No member of the industry shall defame 
a competitor by falsely imputing to 
him dishonorable conduct, inability 
to perform contracts, questionable 
credit standing, or by other false • 
representations or by falsely dispar- 
aging the gre.de or quality of his 
goods. 



PROPOSED NBA TRADE PRACTICE 

No. 15 (a) 
(Trade Practice Prohibited) 
To enter in bo an agreement with a mill 
to disguise by any special number any 
standard or special fabric, knovn gen- 
erally to the trade by a given number 
and to establish for the fabric iden- 
tified by the disguised number a ■ 
price in excess of the current es- 
tablished price for the fabric iden- 
tified with a number by which it is 
generally known to the. trade. 



employers or principals, as an 
inducement to influence ■ their 
employers or principals to pur- 
chase gift or offer, or to in- 
fluence such employers or prin- 
cipals to refrain from dealing 
or contracting to deal with com- 
petitors, is an unfair trade 
practice* 

COMPARABLE EcT„C. TRADE PRAC- 
TICE RULE, GROUP 1, RULE 10. 

Maliciously inducing or attempt- 
ing to induce the breach of ex- 
isting contracts between competi- 
tors and their customers by any 
false or deceptive means whatso- 
ever, or interfering with or ob- 
structing the performance of any 
such contractual duties or ser- 
vices by any such means, with the 
purpose and effect of unduly ham- 
pering, injuring, or embarrassing 
competitors in their businesses, 
is an unfair trade practice. 



COLiPAEABLE 
TICE RULE, 



PoT.C. TRADE PRAC- 
GROUP 1, RULE 11. 



The defamation of competitors by 
falsely imputing to them dishonor- 
able conduct, inability to perform 
contracts, questionable credit 
standing, or by other false repre- 
sentations, or the false disparage- 
ment of the grade of quality of their 
goods, with the tendency and capa- 
city to mislead or deceive purchas- 
ers or prospective purchasers, is 
an unfair trade practice. 

COMPARABLE E T C TRADE PRACTICE 
RULE, GROUP lj RULE 12. 

Conspiring with a manufacturer to 
disguise by any special number any 
standard of special fabric known 
generally to the trade by a given 
number, and to establish for the 
fabric identified by the disguised 
number a price in excess of the 
current established price of the 
fabric identified by the number by 
which it is generally known to the 



3732 



-296- 



trade, for the purpose of deceiving 
purchasers intonfche belief that they 
are purchasing a superior fabric 
when such is not a fact, is ah unn 
f ai r t ra de v> r a c t i c e. 



PROPOSED KRA TRADE PRACTICE 

Ho. 15 (b). 
(Trade Practice Prohibited) 
To induce e, contractee or purchaser 
to use and apply in specifications 
a number to denote a style of fab- 
ric upon which bidding shall be let 
publicly, which number is not gene- * 
rally used and knov/n to the members 
of this industry, to denote a knovm 
fabric, unless immediately following 
the date upon which the manufacturer 
has obtained the consent of the con-, 
tractee to specify the aforesaid num- 
ber and said manufacturer (l) submits 
in writing to the Code Authority the 
name of the mill manufacturing the 
product and full information concern- 
ing the style thereof, and (2) unless 
such uniform manufacturer shall, as 
aforesaid in writing inform the mill 
thai it may, upon the same price end 
terms and deliveries, without re- 
courje, liability, or other obliga- 
tions, quote to all rnanuf- cturers 
bidding, the same price, terms, and/ 
or delivery, and to furnish the said 
fabric to the successful bidder whon- 
soever he, or.it may be. 

PROPOSED ERA. TRADE PRACTICE 

Eo. 16. 
( Traac. Practice Prohibited) 
To adopt fcr one's own use, by photo- 
static, photographic, or other means 
of reproduction, the plates, cuts, 
or other illustrations contained in * 
catalogues, publications, mea-sure 
books, folders and/or blanks origin- 
ated by a competitor. 



PROPOSED ERA TRADE PRACTICE 

No. 17. 
(Trade Practice Prohibited) 
For a manufacturer of uniform ap- 
parel, where two or more manufac- 
turers have been asked to bid,, to 
submit to a prospective purchaser 



COI.IPARABLE P. T. C. TRACE PRAC- 
TICE RULE, GROUP 1, RULE IS, 

Eor a, uniform manufacturer to in'- 
duce a contractee "or purchaser 1 ' 
to use and apply in specifica.- 
ti.ns a number to denote a style 
of fabric upon which bidding 
shall be let publicly, which num- 
ber is not generally used and 
known to the members of the industry 
to denote a known faibric, with the 
.intent and purpose of deceiving 
competitors as to the style, qual- 
ity, and source of the fabric, and 
withholding other necessary informa- 
tion to enable competitors to in- 
telligently bid on the contract, 
is an unfair trade prac+ice. 



COMPARABLE P. T. C. TRACE PRAC- 
TICE RULEi 'GROUP 2, RULE 3. ' 

To adopt for one's own use, by photo- 
static, photographic, or other means 
of reproduction, the plaies, cuts, or 
other illustrations contained in catar 
logues-, publications, mea.sure books, 
folders, and/or blanks originated by 
a competitors, is condemned by the 
industry. 

COS a' ARABLE F, T. C TRADE PRAC- 
TICE RILE, GRCUP 2, RULE I. 

The industry condemns the prac- 
tice of a manufa.cturer of uni- 
form apparel, where two or more 
manufacturers have been asked to 



9782 



-' ~7~ 



samples of uniform apparel made 
specially for or to the specif ica- 
tions of a prospective "buyer, unless 
paid for, where the manufacturer has 
reason to "believe or can ascertain 
that the total quantity of uniform 
apparel required "by the purchaser uill 
not exceed one hundred units; provided, 
however, that after the successful 
"bidder has "been ascertained, he may 
furnish the necessary sample garments* 



bid, of submitting to a prospec- 
tive purchaser samples of uni- 
form apparel made especially for 
or to the specifications of a 
prospective buyer, unless paid 
for, where the manufacturer has 
reason to believe or can ascer- 
tain that the total quantity of 
uniform apparel required by the 
purchaser uill not exceed one 
hundred units; provided, however, 
that after the successful bidder 
has 'oeen ascertained, he may fur- 
nish the necessary sample garments. 



PROPOSED ERA TEASE PRACTICE 

No. 18. 
(Trade Practice Prohibited) 
To charge less than cost for ser- 
vices rendered to a customer for 
pressing, cleaning, re-building, 
repairing, or retailoring uniforms. 



This rule was submitted to the 
Federal Trade Commission and de- 
nied on the grounds that it was 
contrary to antitrust laws. 



PROPOSED ERA TRADE PRACTICE 

Eo, 19. 
(Trade Practice Prohibited) 
To accept uniforms of discontinued 
and obsolete styles or old and sec- 
ond-hand uniforms in part considera- 
tion for the purchase price of newly 
manufactured uniforms, or for mer- 
chandise credit or cash. 



Tliis rule was submitted to the 
Federal Trade Commission and de- 
nied on the grounds that it was 
contrary to antitrust laws. 



PROPOSED ERA TRADE PRAC m ICE 

.No. 20. 
(Trade Practice Prohibited) 
As a consideration to or inducement 
for a sale, to service, press, reno- 
vate, or retailor, throughout the 
life of the uniform, unless an ade- 
quate charge is made therefor. 



This rule was submitted to the 
Federal Tra.de Commission and de- 
nied on the grounds that it was 
contrary to antitrust laws. 



PROPOSED E?A TRADE PRACTICE 

No, 21 
(Tra.de Practice Prohibited) 
To alter end re-build or repair, 
below cost, old uniforms so that 
the same will be adaptable for 
use by persons of size other than 
those for whom their use was ori- 
ginally intended, provided, how- 
ever, the new made to measure shall 
be altered to the customer's satis- 
faction without charge. 



COI.IFARABIE F«T„C. TRADE PRAC- 
TICE RULE, CROUP 2, RULE C. 



Altering, repair 
old uniforms so 
be adaptable for 
size other than 
said uniforms we 
tended, and sell- 
disclosing that 
by the industry. 



ing, or rebuilding 
that the same will 
use by persons of 
those for whom the 
re originally in- 
ing same without 
fact, is condemned 



9782 



-298- 



PROPOSED ERA TRADE PRACTICE 

Ho. 22. 
(Trade Practice- Prohibited) 
By agreement to accept merchandise 
or cash credit, or for exchange, 
uniform apparel as herein defined 
and/or accessories thereto if once 
paid for by the buyer. 

(As agreed, we withdraw Trade Practice 
#22 and offer in its stead:) 



This rule wan submitted to the 
Federal Trade Commission and de- 
nied on the grounds that it was 
contrary bo antitrust laws. 



He returned merchandise shall be 
accepted for credit except by rea- 
son of defects in materials and/ or 
manufacture; delay in delivery; er- 
rors in shipment, or non- conformity 
to the specifications of the order. 
No allowance shall be granted save 
on the ground of the same exceptions. 

PROPOSED ERA TRADE PRACTICE 

xiO# CiOo 

(Trade Practice Prohibited) 

To manufacture any of the articles 

defined as "uniform apparel" and to 



This rule was submitted to the 
Federal Trade Commission and de- 
let, and /or rent the same to another, nied on the grounds that it was 

contrary to antitrust laws. 



PROPOSED ITRA TRADE PRACTICE 

Ho. 24. 
(Trade Practice Prohibited) 
Por any person, firm, or corpora- 
tion knowingly to aid or abet 
another in the use of unfair trade 
practices. 



COMPARABLE P. T. C. TRADE PRAC- 
TICE RULE, GROUP 1, RULE 14. 

Por any person, firm, or corpora- 
tion knowingly to aid or abet 
another in the use of unfair trr.de 
practices is an unfair trade practice. 



There was no action taken by the National Recovery Administrate n 
on these trade practices. 



9782 



-29 ; J- 



APP3IDIX A 



9782 



-300- 
APPENDIX A 

" METHODOLOGY" 

EXPLANATION' OF SCOPE OP STUDY AND 
SUGGESTIONS POR FURTHER STUDY 

The Men's Clothing Industry Study would scarcely "be recognized if 
approached with the expectation of discovering a study "built along the 
lines of the comprehensive and "idealistic" outline worked out and adopt- 
ed during the "planning period.," The original outline is attached hereto 
for what value it may have, either as an indication of first efforts on 
the Study or as a possible aid in suggesting unexplored aspects of the 
Industry. The many developments accounting for the change in the origi- 
nal plan and scope of the Study will "be touched upon here as an explanation 
of the final character of the Study. 

The chief circumstances limiting and moulding the character of the 
Study, as attempted in the Industry Studies Section of the Division of 
Review, were as follows: 

1. Limitations in personnel and loss of time in allocation of per- 
sonnel. 

2. Lack of expected cooperation from advisory and service units. 

3. The necessity of acting in service and advisory capacities for 
other groups in the Division and. in "being responsible for survey 
of N.R.A. files. 

Number 3 above was of most consequence in determining the final out- 
line and character of the Study, in that investigation and research was 
of necessity confined almost entirely to records and data found in N.R.A. 
and other C- cvernment files. It is believed that a fairly good, survey of 
the files has been made and that the result presents a fairly good picture 
of the Men"' 1 -: '"'Lettin g Industry under the Cod e. True, certain secondary 
sources have Leer, examined in an effort to throw light upon broad industry 
characteristics r.uch as distribution, organization' of production, and labor 
relations. Such efforts of necessity have been superficial and must be so 
recognized. 

-■egret that circumstances surrounding this Study 
;•; i :" into the field to gather data on certain funda~ 
■ "•-_ " ; s Clothing Industry not adequately covered by 
other authoritative records. Obviously, it would 
: bo visit every known source of information, such as 
;oJe authority records, trade unions, commercial and 
scientific o: ations, experts and leading industrialists in the Industry. 

A thorough study of the Men 1 s Clothing Industry or any of the larger 
apparel groups would require the development and analysis of material bear- 
ing upon the "subject of study" suggested below. Many of these ftmdamen- 
tally important subjects were merely touched upon in the Men's Clothing 
Industry Study for reasons already indicated. In many instances, however, 
the importance of these subjects to a clear understanding of the Industry's 

9782 



It is a 


??'jr>3 of 


have made i ■ 


■- i ~. ■ .'.'■' j f~ 


mental aspe^ ; 


. ■-'} .'■-■: 


present Gove: 


■■ " " .': Oj" 


have been wc 


. ■' "■■'...:■ c 


trade associ.. 


n ',.. CO 



-301- 

characteri sties and problems is suggested in the Study. The development 
of material bearing upon these "subjects of study" would in most instances 
require extensive field work. Only by such field work and original inves- . 
tigation could' be developed the original plan of study as indicated by the , 
attached outline entitled "Study of the Men's Clothing Industry." 

Selected Subjects of -Study Not Adequately Covered by the 

Men's Clothing; Industry Study 

1. Inter-relations Between Suppliers of Eaw Materials and 
the Manufacturers of Finished Apparel ' 

' '.'■ i .. ■ 
Little statistical information or literature exists regarding the 
technique cf supplying raw materials to the apparel trades. There are 
various methods of selling and purchasing raw materials but to understand 
thoroughly the relative advantage of each in terms of cost and bargaining - 
relationships, ' it would be necessary to go into the field and collect data , 
at the original sources. It would be necessary to visit various. manufac- 
turers of raw materials and middle-men of various sorts, and manufacturers 
who might employ the various methods of purchasing the raw materials, in 
order to. get full and complete information about the organization of the 
raw materials markets. Such subjects as ;orice, standardization, bargain 
power, credit terms, etc., would be kept in mind in connection with this 
field study. 

2. Study of Manufacturing Technique 

Code experience has taught that the technique employed in the manu- 
facture of apparels is fundamentally similar throughout the various indus- 
tries; however, sufficient differences exist even in one industry to make 
it impossible or very difficult to cpmly sj^stems of control. Little in- 
formation is' available in the records as to these differences in manufac- 
turing technique. Por example, a study of the integrated shop system as 
against the contract shop system as employed in the Men's Clothing Industry 
would necessitate a technical examination of shops of the different types. 
It would be necessary to collect data in such a case on operations, occu- 
pations, and variations in productivity and cost. 

3. Study of Industry Cost and Account Keeping Methods 

Such a study would require visits to and consultation with account- 
ants who specialize in apuarel industry problems and an examination of 
systems in operation in specific plants. Likewise, there might be gathered 
the results of efforts on the part of various branches of individual in- 
dustries to develop accounting systems and to encourage their use within 
these industries. Such a study would appear essential to a thorough under- 
standing of apparel costs and would have a very definite bearing on price 
systems and variations in price within the industry. Likewise, this study 
would be invaluable in throwing light on wage differentials which exist in 
various areas of the industry. 

4. Banker (credit) - Manufacturer Relationship 

In connection with the establishment of certain trade practice rules 
9782 



for certain of the apparel industries which were codified, it was often 
asserted that lack of credit facilities or the peculiar character of those 
which existed explained the development of such practices as consignment 
selling and cut/ make, and trim systems, which were recognized as having 
certain undesirable features. The records are not clear as to the various 
credit systems which are available in the apparel industries and it would 
appear, because of lack of systematized information, that visits would have 
to be made to credit granting agencies as well as to borrowers to ascer- 
tain the character of the credit relationship and its bearing on both manu- 
facturing and selling activity, 

5. Study of Large vs. Small Scale Production 

It is often asserted with respect to firms in the apparel industries 
as well as to firms in other industries that certain advantages are pe- 
culiar to size of the plant or establishment. It is usually stated that 
the small firm is at a distinct disadvantage in competing with the large 
firm. It would appear to be desirable to make case studies with the view 
of finding out whether or not certain decided advantages do go along with 
size — the features to be kept in mind are financial stability, labor re- 
lationships, and distribution methods, etc. 

6. Labor Unions - Manufacturer Relationships 

A considerable body of literature exists depicting the activities^ 
of labor unions in connection with the efforts to improve labor conditions 
in various of the apparel industries; however, the I'.R.A. records are in- 
complete on recent labor activity in many of the industries and do not^ 
satisfactorily portray the very active part which labor unions played in 
operation under the codes. It would be necessary, to complete this pic-^ 
ture, to visit both the head-quarters of national unions and to confer with 
local labor leaders and to get the benefit of such information as may be 
in their files. In this connection, of course, it is essential that the 
viewpoint of various manufacturers or groups of manufacturers in certain 
organized areas or areas which have been subjected to the efforts of labor 
organizers, be obtained. 

7. Trade Association - Manufacturer Relationships 

Trade associations have, for a long while, played an important part 
in organized control of industry. During the N.R.A. days the influence 
of trade associations increased substantially and association efforts 
played a great part in both the formulation of Codes and the control of 
industry under Codes. In many instances the associations have not been 
recognized as Federal agencies and hence the H.R.A. files are incomplete 
in reflecting trade association activity. A thorough study of trade asso- 
ciation activity can be gained only by visits to the national trade 
associations and especially to the local or regional trade associations 
which represent group and area interests often neglected and sub-ordinated 
to the greater influence of national groups. To get a clear impression of 
the workings of the local association it would appear necessary to visit 
areas concerned and not to rely upon second-hand information obtained from 
a national headquarters group. 



9782 



-303- 

8. Labor - Area Differentials 

The groups responsible for the formation cf apparel industry Codes 
almost invariably insisted that wage area, differentials should be estab- 
lished. It was usually argued that such differentials were justified uoon 
such general considerations as cost of living and labor efficiency. Rarely 
have careful studies been made to determine whether or not these differen- 
tials were justified in fact, and if justified, what area lines should be 
drawn in recognition of such facts. It would appear that field studies 
would be necessary to ascertain whether or not there are area differentials 
which justified codal differentials and whether or not such differentials 
should be strived for in further efforts to obtain either voluntary codal 
agreements or future use under a possible new N.R.A. A study and examination 
of facts obtained at the source, within the area in auestion,. should be 
considered in the drawing of definite conclusions. It is recognized that 
the problem of area differentials is not peculiar to the apparel industries 
and no reason is seen why data bearing upon this problem could not be se- 
cured by some special group in the interests of all industries concerned. 

9. Distribution of Finished Product 

Industry records are deficient in carefully organised material bear- 
ing on the distribution of apparels. It is recognized that various methods 
of distribution are employed, but careful studies of each from the stand- 
point of cost, service standards, consumer relationships, etc., have not-ibeen 
made. It would appear that a study should be made of this problem especi- 
ally as it has a direct bearing on the interstate character of the business 
in question. The sources here which would need to be visited seem to be 
retail and wholesale organizations, individual retail and wholesale estab- 
lishments, and members of industry who employ one method or another of dis- 
tributing goods, whether it be through wholesalers, retailers, direct-to- 
consumer, or retail outlet. It is known that apparel code authorities did 
not gather material on this aspect of industry and to acquire sufficient 
data to understand thoroughly the processes involved would necessitate 
visiting the sources above referred to. 

Conclusion 

The above list of suggested industry problems for study is not intend- 
ed to be all-inclusive but merely suggestive of some of the major problem 
which fell within our study plans. It should be readily seen, however, 
that a great amount of field work would be required to develop and under- 
stand the various remif ications of the apparel industries business. Ind- 
sutry statistics and literature is sadly deficient, especially in connection 
with the various relationships between suppliers of raw materials and manu- 
facturers on the one side and the relationships between the manufacturers 
and the distributors or the consumers on the other side. The gathering cf 
material of a character which would allow the development of the tentative 
outline such as prepared for the study of the Men's Clothing Industry would 
require the efforts of many competent observers, over a considerable per- 
iod of time, who are familiar with the problems of the industry being 
studied. 



9782 



-304- 

0RIGINA1 OUTLINE FOR 

STUDY OF THE ilEN'S CLOTHING INDUSTRY 
(Emphasis on Lien's Factory-Hade Dress Clothing) 



I. Development and Scope of the Various Divisions of the Industry 
Selected for Study. 

A. Definition of industries and codes covered by the Study. 

1. Reasons for limiting stud:/ to certain branches of the 
Clothing Industry. 

2. Description of the industry branches by products. 

3. Code definitions by products and processes. 

4. E;rplanation of codal jurisdictions and indication of 
conflict or overlap as related to manufacturing processes, 
distribution, and consumption. 

B. Brief historical sketch of industry's beginning and develop- 
ment to the present, touching u'oon: 

1. Types of products manufactured. 

2. Types of raw materials and equipment used. 

3. Processes. 

4. Customs and styles. 

5. Distribution problems. 

6. Nature of competition. 

7. Character and type of labor employed. 

8. Labor relations with employers. 

9. Trade association growth. 

10. Government influence and control. 

C. Present scope of industry. 

1. Number of individual establishments and capital invest- 
ment by: 

(a) individual proprietorship, partnership, corpora- 
tion, cooperative . 

(b) products. 

(c) inside shoos and contract shops. 

(d) market and geographical areas. 

(e) size of firms. 

(f) profits, losses, embarrassments. 

2. Employees by: 

^ (a) market and geographical area. 

(b) age and sex. 

(c) total wages and wage rates. 

3. Value and volume of -oroducts by: 

(a) type. 
9782 



-305- 

(b) inside and contract shops. 

(c) geographical and narket areas (production) 

(d) distribution by states. 



II. Haw Materials and Equipment. 

A. Sources, kinds, and value of row material and eouipment. 

1* Kinds of raw material and equipment used in branches of 
the industry by: 

( p ) type s . 

(b) value in relation to total cost of product. 

(c) value in relation to value of total supply of raw 
materials. 

(d) technical improvements — related to employee pro- 
ductivity and employment. 

2. Origin of raw materials and equipment by geographical 
areas. 

(a) origin of raw material and equipment in relation to 
location of clothing manufacturers. 

(b) foreign competition. 

(c) seasonability — effect on production schedules and 
prices. 

B. Raw material and equipment market organization and price. 

la Types of manufacturers and distributors of materials and 
equipment. 

(a) manufacturers and processors. 

(b) distributors and various kinds of middlemen. 

2. Methods of sale and purchase of raw materials and equip- 
ment. 

(a) variations in methods of purchase and sale (related 
to various types of sellers and buyers). 

la terms of sale. 

a. discounts and rebates. 

b. guarantees: quality and service. 

c. allowances. 

d. related to terms granted by clothing manu- 
facturers. 

2. credit problems. 

a. proportion of credit sales to cash sales. 

b. credit standing and needs of purchasers. 

c. bargaining relations between purchaser and 
seller. 

9782 



-306- 

d. credit conditions requiring unusual fac- 
ilities or terns. 

3. competition. 

a. price of raw materials and equipment. 

(1) related to trices-, of clothing. 

(2) evidence of lack of free corn-petition. 
(o) price fluctuations and cost changes 

(example — effect of increased wages 
under N.H.A. on price). 
(4) influence on raw material prices of 
association and governmental action. 



III. Organization of production. 

A. Description of manufacturing processes: growth and develop- 
ment to present. 

1, Plant layout and technique. 

(a) section work. 

(b) unit system. 

(c) difference between inside and contract shop. 

(d) area or market differences. 

(e) types of machines and equipment. 

(f) systems of production control. 

2. Comparison of varying processes and methods of manufac- 
ture as to effects upon the following.: 

(a) productivity. 

ft) working conditions. 

(c) methods of wage payments. 

(d) costs and cost keeping methods. 

(e) quality of product. 

(f) labor-management relations. 

(g) capital and credit requirements and terms, 
(h) prices and pricing systems. 

(i) responsibility for and method of controlling the 
organization of production. 

(j) location of manufacturing establishment. 

(k) adaptation to style and seasonality. 
- (l) standardization' of product — raw material and fin- 
ished product. 

5. Cooperative control of- manufacturing methods and proces- 
ses — development and present status. 



, a) labor union — 



9782 



-307- 

1. collective agreements relating to processes and 
methods of production. 

a. adaptation to area and market variations 
in methods of production. 

b. effect on methods of production and work- 
ing conditions in organized and unorgan- 
ized plants. 

(b) trade associations. 

1. local and national agreements relative to 
manufacturing processes and methods. 

2. effects of association activity upon methods 
of production. 

(c) governmental. 

1. local and state governments. 

a. history tracing cause of intervention 
'and legal basis of intervention. 

b. nature and extent of control. 

c. effects of local and state action — state 
vs. interstate problems. 

2. federal. 

a. K.H.A, activity relating to control of 
production processes. 

(1) reasons for intervention. 

(2) experience and effects on industry 
under codes. 

(3) problems of production in need of 
federal control. 

4. Large vs. small scale production. 

(a) financial stability. 

(b) labor relationships. 

(c) distribution methods. 

(d) methods of production. 



IV. Finances. 

A. Historical — general survey. 

1. Capital investment. 

(a) origin, growth, present. 

2. Fortunes of the industry. 
9732 



-'603- 

(a) profits, losses, and embarrassments. 

(b) dividendr.. 

( c) taxes. 

3. Financial'' development and fortunes of the. indus- 
try, contrasted with-: 

(a) other major industries. 

(b) foreign textile industries. 

Financial structure. 

1. Development and organization. 

(a) origin or capital. 

1. geographical. 

2. new capital vs. plowed-in profits. 

(b) development and extent of various forms of 
capital structure. 

1. individual proprietorship. 

2. partnership. 

3. corporation (and puramided structures) 

(c) factors influencing capital development and 
financial structure. 

1. entrepreneurs within the industry. 

2. investment banker. 

3. wholesaler — retailer — jobber. 

4. cooperatives. 

5. enterprises in allied industries. 

6. governmental agencies and regulations. 

(d) control 

1. financial control — in whom vested? 

2. financial control — relationshi-o to 
management control. 

2. Fixed capital. 

(a) interest rate. 

1. geographical variations. 

2. variations by type of "enterprise. - 

3. risk variations. 

4. ebsolescence and depreciation. 

(b) cost and extent of financing and refinancing. 



9782 



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3. Working capital and commercial credit. 

(a) ratio working camtal to fixed camtal. 

(b) ratio credit to fixed and working ca-oital. 

( c) agencies granting credit or advancing work- 
ing capital — tynes and methods. 

1. commercial banks. 

2. wholesaler- -retailer — jobber. 

3. enterprises in allied industries. 

4. selling agents. 

5. government agencies. 

(d) cost of various types of credit and borrowed 
working camtal. 

( e.) relationship of various tyoes of credit to 
managerial policies. 

(f) geographical variations in credit availability, 
■methods and rates. 

(g) discount and credit terms granted customers — 
relationship to borrowed working camtal and. 
credit granted industry. 

1. tynes of discount and credit granted 
customers. 

2. relationshit) of tynes of credit granted 
industry to tyoes of credit granted by 
industry. 

V. Labor. 

A. Conroarative distribution of employees by years and 
monthly by: 

1. Markets, geographical, and -oolitical areas. 

2. Age and sex. 

3. Occuoations and wage rates. 

4. Seasons. 

5. Size of ulant. 

3. Hours of employment. 

1. Distribution by market, geographical and 
-political areas. 

2. Distribution by occupations. 

3. Distribution by size of nlant. 

4. Distribution by methods of -production. • 

5. Comparison with other and allied industries. 

6. Ejme workers. 

7. Effect on re-enrol *>yraent. 



-310- 

C. Wages. 

1. Industry totals for years and months. 

2. Heal wages. 

3. Wage rates — distribution by 

(a) type of shop of plant — inside and contract. 

(b) size of shops. 

(c) market and geogranhical areas. 

(d) union shops and non-union shops. 

(e) occupations by individual establishments. 

(f) related to man-hour productivity. 

(g) relation to unemployment. 

(h) comparison with other industries. 

4. Methods of wage payments, 
(a) variations by: 

1. manufacturing methods or processes. 

2. market and area customs. 

3. effect on productivity and wage outlays, 

5. Compared with allied and other industries. 

6. Methods of handling learner and handicapped 
workers Toroblem. 

D. Ozeneral labor conditions. 

1. Standards of safety and health. 

(a) in large -olants and small plants. 

(b) methods of production. 

(c) by market areas and geographical regions. 

(d) union and non-union employees 

2. Vacations and holidays, recreation. 

3. Sick benefits, insurance, pensions. 

(a) management. 

(b) association and union. 

4. Technological changes related to labor 
standards and conditions. 

5. Adjustment to shifts in location of industry. 

6. Training. 

E. Collective activity. 



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1. Nature and extent of labor unions* 

(a) type of union. 

(b) size of union. 

( c) - membership by market areas and type of manu- 
facturing establishment. 

(d) membershit) by occupations. 

(e) membership by concerns and establishments. 

• 2. Union activity — wages and working conditions. 
: (a) collective agreements. 

1. number and character of agreements with 
: individual members of industry. 

2. number and character of agreements with 
enrol oyer groups. 

(b) methods of bargaining. 

(c) organizing methods. 

(d) union wages compared with non-union wages. 

(e) working conditions in union shops co-roared 
with conditions in non-union shops. 

(f) union welfare -plans. 

3. Union -participation in governmental control. 

(a) local and state. 

(b) federal 

VI. Distribution and Consumntion. 

A. Markets and marketing organization. 

1. Distribution channels — description of 

(a) wholesalers and jobbers. 

(b) retailers. 

( c) buying officer. 

(d) direct to consumer. 

(e) retail cutlet. 

(f) ex-porters and importers. 

2. Conroariscn of methods of distribution, explanation 
of development and use in terms of: 

(a) costs in relation tc -orice to consumer. 

(b) margin of profits — manufacturer and dis- 
tributor. 

(c) -product of standards (consumer). 

(d) methods of obtaining business from 



9782 



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1. manufacturer. 

a. discounts, terms, concessions. 

b. bargaining advantages due to nature 
of market mechanism. 

P. ultimate consumer. 

a. advertising and soliciting, 
trade marks and trade names. 

3. The "distribution area" as evidenced by: 

(a) advertising. 

(b) transportation statistics: shipments 
and agencies. 

(c) production areas corn-oared with 
.consumer distribution. 

(d) location of offices, stores, ware- 
houses engaged in distribution. 

General aspects cf consumption. 

1. Variations in consumer demand. 

(a) dollar competition with other products. 

(b) influence through style. 

(c) potential capacity to consume, 

(d) unexploited markets. 

(e) influence on duality standards 



Influence of Work Clothing on Men's Clothing 
A. Pants Conflict. 

1. Describe evolution of work-pants from 
overall to semi-dress pants — causes therefor. 

a. Changes in material. 

b. Changes in buying habits caused by 
style in men's clothing industry. 

(l) 2-pants suit. 
.(•2) ; odd coat and slacks. 

2. Describe relationship of pants to manufacture 
of work clothing. 

a. Proportion made in same plant as other 
work clothing. 

b. Proportion made in separate plants. 

c. Proportion made separately by men's 
9782 clothing manufacturers. 



-313- 

(■l) trade volume of separate -pants sold by 
men's clothing manufacturers. 

3. Describe differences in methods of manufacture 
between work-clothing and men's clothing, with 
particular reference to 

a. Location of plants. 

b. Unionization. 

c. Manufacturing costs. 

d. Marketing and distributing policies. 

4. Describe influence of government contracts on 
situation. 

a. Types of bidders — differentiating between men's 
clothing and work-clothing manufacturers. 

Mackinaws and melton jackets and their influence on 
overcoats. 

1. Show importance of mackinaw production as related 
to other articles of work clothing with particular 
reference to amount manufactured in shops making 
other items of work-clothing or leather garments. 

2. Show amount of mackinaws manufactured by men's 
clothing manufacturers making other articles of 
men's clothing. 

3. Describe differences in costs in the manufacture of 
mackinaws in men's clothing factories and in work- 
clothing factories. 

4. Trace effect of sales of mackinaws on sales of 
lower priced overcoats by compiling statistics on 

a. Production of cheap overcoats over a. period of 
years. 

b. Production of mackinaws over a period of years. 

5. Describe influence of government contracts on 
situation. 

a. Types of bidders — differentiating between men's 
clothing and work-clothing manufacturers. 

6. Describe the union situation in the mackinaws 
industry. 

a. In non-union work-clothing plants. 

b. In union wurk-clothing plants and leather 
garment plants. 



3782 



-514- 

c. In men's clothing factories. 
7. Show corn-oar? tive costs for a, b, and c of 6. 
C. Wash Suits. 

1. Extent, number, and costs of wash suits manufactured 
by work-clothing manufacturers. 

2. Wash suits as an item of men's clothing manufactured 
by men's clothing manufacturers.' 

3. Conraare the sales trend of the two grouns above as 
to volume, -oroduction, terms, and outlets. 



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APPENDIX B 



DI VI SI Oil A33 II IH STRAT0R3 

A. D. Whiteside, from June, 1933, to April, 1934 

Sol A. Rosenblatt, from April, 1934, to Octiber, 1934. 
Prentiss L. Coonley, from October, 1934, to April, 1935. 
id. D, Vincent, from April, 1955, to May, 1935 

DEPUTY ADMINISTRATORS 

Lindsay Rogers, from June, 1933, to December, 1933 

B. II. Gitchell, from December, 1933, to March, 1934. 
Earl Dean Howard, from M a rch, 1934, to June, 1934. 
Dean G. Edwards, from June, 1934, to September, 1934 
M. D. Vincent, from September, 193-4, to April, 1955 
Burton E. Oppenheim, from. April. 1955, to Ma/, 1954 

ASSISTANT DEPUTY ADMINISTRATORS 

H ndled by Deputy Administrator until J 8 .nuary, 1934 
John R. Beecroft, from January, 1934, to September, 1934. 
S. II. Ourbackdr, from September, 1934, to January, 1935. 
Walter E. Woodford, Jr., from January, 1935, to Ma.?, 1935. 



AIDES 



S. II. Ourbacker, from June, 1934, to September, 1934 
Robert L. Brandt, from August, 1934, tc /lay, 1935. 
Walter A. Simon, from August, 1934, to October, 1934. 



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APP'SKDIX 



Production of Men's Clothing Und=>r 
th° Cotton Garment Code — The Over- 
lap Pro Diem 



9782 



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TABLE OF contents 

APPENDIX C OF THE MEN'S CLOTHING INDUSTRY STUDY' 

PRODUCT I OK OF LIEN'S CLOTHING WIDER TliE 
COTTON GARMENT CODE — THE OVERLAP PR03LEM 



SUMMARY will be. found, "beginning. Page 4, Chapter I, Hen's Page 

Clothing. Industry Study. No. 

CHAPTER I--0RIGIN OF THE' CONTROVERSY . . . ' 320 

I. Development .in Style, Appearance, and Durability 

of Cotton anc'i Cotton Mixture Fabrics 3-0 

II. Decreased Purchasing Power of Consumers 320 

III. Decreased Demand for Overalls 320 

IV. Necessity for Lower Selling Prices to Consumers 321 

V. Widespread Establishment of Plants in Raral 
Communities to Permit Payment of LoT7er 

. . Wage Rates 321 

VI. Style Trend Towards Separate Coats and Trousers 321 

VII. Increased Interest in Sports, Particularly Golf 321 

VIII. Style Consciousness of Men in Rural Communities 321 

IX. Wage and Hour Advantages under Cotton Garment Code 322 

X. Price Levels Undermined ''oy Prison Labor Production 322 

A. Statistics on Prison Labor Production 322 

. B. Statement of Judge Adkins 324 

CHAPTER II--THE CODES AS ORIGINALLY APPROVED 325 

I . Men' s Clothing Code 325 

A. Proposed Definitions 325 

B. Objections by Wash Suit Manufacturers 325 

C. Approved Definitions 326 

D. . Approved Wage Provisions 327 

E. Approved Hour Provisions 327 

II . Cotton Garment Code 327 

A. . Public Hearings — Delay in Approval 327 

3. , Early Protests on Overlap Problem 328 

C. . Deputy Administrator Gitchell's Statement on 

.Actions Proposed and Actually Taken. 328 

D. . Approved .Definitions 331 

E. Approved Hour Provisions 332 

F. Approved Wa e provisions 332 



9782 



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Page 

CHAPTER III— AMENDMENTS TO BOTH CODES, DECEMBER 18, 1933 334 

I. Public Hearing November 27, 1933, on T7ash Suits 334 

A. Objections of Cotton Garment Industry 334 

B. Arguments of lash. Suit Manufacturers 336 

C. Arguments of Men 1 s Clothing Industry 337 

II. Public Hearing November 28, 1933, on Single Pants 342 

A. Report of George P. Dowling 342 

B. Arguments of Men' s Clothing Industry . 344 

C. Arguments of Cotton Garment Industry . . . 349 

III . Code Changes Approved 357 

A. -Men's- Clothing Code Definitions and Yfeges 357 

B. Cotton Garment Code Definitions and Wages 358 

C. Conditions in the Order of Approval 359 

CHAPTER IV— THE INTER-CODE COMMITTEE 360 

I . Appointment of the- Committee 360 

II . Recommendations of the Committee - 361 

A. Report of Meetings and Votes on Fabric 

Classification 362 

III. Men's Yfash Suit Problem 364 

A. Protest of New Orleans Eirms 364 

B. Investigation by Deputy Administrator Morris 

Greenberg » 367 

C. Agreements with New Orleans Firms 367 

D. Order No. 15-8 — Hours Exemption to These 

Manufacturers 373 

CHAPTER V— AMENDMENT TO COTTON GARMENT CODE, MARCH 15, 1934 375 



I . Code Changes Approved 375 

A. Deputy Administrator Gitchell'.s Letter of 

Transmittal - 375 

B. Different- lagt Rates for Different Fabrics 

Approved ...... 377 

C. Special Administrator -Succeeding Inter-Code 

■Committee .- 378 

II . Effects- of this Amendment 379 

A. Fri/-- v-.i-o Classification Proved Impractical 379 

B. Pro-vests from Southern Manufacturers 380 

C. Protest from Associated Pants Manufacturers 383 

III. -He-port -::■:-• -Special Administrator Godfrey Bloch 387 

A. -Tar.'tes Submitted with Report , 391 



9782 



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Page 

CHAPTER VI—AMENDMEiJT TO COTTOF GAHMENT CODE, AUGUST 21, 1934 398 

I. .Contributing Merits Prior to This Amendment 398 

A. Notice 'of Public Hearing June 18, 1934 398 

B. Protest Letter to Industry by Cotton Garment 

Code Authority 400 

C. .Protest Letters and' Testimony Regarding the 

Calling of this Hearing 402 

II. Public Hearing June 18 to 22, 1934 405 

A. Arguments of Lien' s Clothing Industry 405 

. B. . Arguments of' Cotton' Garment Industry 410 

C. Testimony Regarding Mackinaws, Melton Jackets, etc 414 

III. Post-Hearing Developments Prior to Approval 421 

A. Letters of Protest from Cotton Garment Industry 421 

B. Deputy Administrator Dean G. Edwards ' Letter 

of Recommendation of the Amendment 424 

IV. Effects of This Amendment 426 

A. 36-Hour Ueek as of October 1, 1934, Approved 

for Cotton Garment Industry 426 

B. Ttto Stays Issued, Delaying Effective Date to 

December 1, 1934 426 

CHAPTER VII—DEVELOPIIEI'TS PROM AMENDMENT 110. 7 TO SUPREME 

COURT DECISION, MAY 27 , 1935 427 

I. Progress up to December 1, 1934 427 

A. Correspondence re Overlap Settlement (in September) .... 427 

B. Order Suggested by Deputy Administrator 

Greenberg, October 12, 1934 428 

C. Proposed Order Dram by Deputy Administrator 

Oppenheim, November, 1934 435 

II. Delay Due to Injunction Suit 439 

A. Letters from Associated Pants Manufacturers, 

Approving Proposed Order 439 

B. Injunction Suit filed December 1, 1934 441 

C. Changes in Cotton Garment Code Authority 441 

D. Exemption Granted Associated Pants Manufacturers 441 

E. Injunction Suit Terminated, January 23, 1935 443 

III. Pinal Efforts Up to Supreme Court Decision 443 

A. Men 1 s Clothing Industry Urges Prompt Action 443 

B. Changes in Proposed Pants Order Suggested 

by Stanley A. Sveet, Chairman of the 

Cotton Garment Code Authority 444 

C. Request of Associated Pants Manufacturers for 

Four Hours Weekly Overtime, Similar to 
Overtime Granted Men's Clothing Manu- 
facturers 450 



9782 



--319-A- 



Page 

D. Cotton Garment Code Authority Approves Proposed 

. . . .Pants. Order, March 11, 1955 451 

E. Protests from Southern llanufacturers 451 

F. Letters, from Associated Pants Manufacturers, 

Approving Proposed Order 454 

G. Changes Proposed by Deputy Administrator Oppenheim 453 

H. Committee. Appointed by Cotton Garment Code Author- 

, . ity,. Classified Wages for Cutters and Cff- 

Pressexs. Approved, April 30, 1935 461 

I. Pinal Proposal by Deputy Administrator Oppenheim 463 

J. Southern Manufacturers Still Object 466 

K. Supreme .Court Decision 471 

L. Brief Summary and Findings on Overlap Problem 473 



9782 



-320« 

APF'SEXJIX C 

TH1 ivniv > S CLOT; II N& P f D r S TEY 
PROD T TGTION_OF V~I'S ' D EI G.I^j''^ 
CQ 'TOiv ^M TT CODE— TE : OVERLAP PROBLEM 

CHAPTER I. 



ORIGIN CF THE CpyT flOVSRSY 

Only within recent years has the competition in the manufacture 
and distritution of men's and hoys': single pants, summer wash suits, 
mackinaws, melton jackets, etc., become actually acute and serious 
between the Men's Clothing Industry and the Cotton Garment Industry. 
Frevious to the present -pronounced fashion trend toward the wearing 
of odd trousers of "both wool an' 1 cotton, cotton garment plants con- 
fined their production mostly to overalls, i^ork pants, and wash suits 
for use as <-ork clothes only, and clothing plants produced th« great 
hulk of separate trousers of wool or part wool materials. 

During the -oast fiv? or six years, this situation has changed 
entirely, and competition between these grouos, aggravated greatly in 
1933 and 1934 by the more advantageous wage and hour provisions of the 
Cotton Garment Code, has become very severe, primarily due to: 

I. Development in Style, Appearance, Durability of Cotton and Cotton 
Mixture Fabrics. 

Development in appearance, design, style, an^ durability of cotton 
and cotton mixture fabrics, to compete with and substitute for the more 
expensive woolen and -orsted fabrics. This fabric improvement has been 
so~ marked that cotton trousers "are now desind by the millionaire golfer 
as well as by the working man." (*) 

II. Decreased Purchasing Powir of Consumers. 

Inability, due to the depression, of many consumers to pay former 
-prices for woolen trousers, greatly increasing the market for cheaper 
cotton or cotton and wool trousers. 

III. Decreased Demand for Overalls. 

Most work clothing plants originally produced overalls and some 
work pants. Then, because of the tremendous decrease in the demand for 
overalls (**) they began to make icor? work pants, separate pants, slacks, 
mackinaws, melton jackets, play suits, ;tc, These lines of msrchandise 
could be made without changing their plant equipment, personnel, or or- 
ganization, and enabled them to maintain greater continuity of employment. 



(*) Transcript of Hearing on Men's Clothing, Cotton Garment and Dress 

Manufacturing Industries, June 20, 1934, Volume 3, Page 640. 

(**) Transcript of Hearing on Men's Clothing, Cotton Garment and Dress 

Manufacturing Industries, June 18, 1934, Volume 1, Page 80 and 81. 



9782 



-321- 

They were also sold largely through the same channels of distribution. 
Through this development, what were former nr 1 -- pants, hy sales-promo- 
tion and improvements in fabric, style, and design, "became extensively 
used for sport and dress purposes. And "because of the change in fashion 
and the downward trend in prices, men's wash suits, made. in work clothing 
factories, which were mostly of the seersucker tyre, b ??an to compete with 
pants and summer wash clothing produced by the Men's Clothing Industry. 

17. Necessity for Lower Selling Prices to Consumers. 

Lower selling price range for separate trousers forced many 
clothing manufacturers to the production of the chea-oer cotton and cotton 
mixture articles. 

V. Widespread Establishment of Plants in Rural Communities to Permit 
Payment of Lower Wage Rates. 

Formerly most single pants were maddein the centralized clothing 
centers in the large cities. With the entrance into this field of the 
overall and work clothing plants, the industries spread over the entire 
country, under wage rates considerably below the union scales. It there- 
fore became necessary for the manufacturer, in New York, Chicago, and other 
clothing centers, to find new places where they could produce these gar- 
ments at a lower cost. Forty or fifty such shops, with a production cauac- 
ity of from 120,000 to 150,000 pairs per week, were established in Penn- 
sylvania and other outlying districts close to New York, in some of Hiich, 
prior to the Codes, employees' worked sixty-five' hours per week, at v^ry 
low weekly wages. (*) 

VI. Style Trend Towards Separate Coats and Trousers. 

The style of wearing separate coats and trousers has ra-oidly 
increased, especially amoung young men of school and college ages. Hence, 
the separate pants have become very important items of the clothing In- 
dustry. 

VII. Increased Interest in Sports, Particularly Golf. 

The construction of one or more golf courses in about every 
town in the country, the vast number of people now playing this game, 
and the universal interest in recreation and snorts of all kinds, have j 
greatly increased the demand for separate trousers for sports use. 

VIII. Style Consciousness of Men in Rural Communities. 

Greater style consciousness of men in the smaller outlying 
rural communities has inoreased their demand for better and fancier 

clothing, even the present style trend of separate co ats and trouser s. 

(*) Transcript of Hearing on the Cotton Garment Industry, November 28, 
1953, Page 83. 



9732 



-322- 

IXi Uage and Hour Advantages under Cotton Garment Code. 

After the approval of the two Codes, Men's Clothing — August 
26, 193.3, and Cotton Garment — November 17, 1933, the competitive situa- 
tion "became much more critical, as in the strongly-unionized lien's 
Clothing Industry, the wages were higher, the hours permitted were 
shorter, and there were higher classified wage rates for cutters and 
of f— pressers, against a minimum wage only in the Cotton Garment Industry, 
This set-up, of , course, afforded those slants operating under the Cotton 
Garment Industry Code on the same garments a ver^ marked cost of pro- 
duction advantage. 

X. Price Levels Undermined by Prison labor Production. 

One of the main contributing factors to this competitive 
controversy was the production of work pants and single pants by prison 
labor. Pants manufacturers operating under the Cotton" Garment Code, 
at all hearings and conferences on the overlapping problems, objected 
. most emphatically to any proposed raise' in the minimum wage rates, or 
the introduction of any classified wage scales e claiming that any 
further advance in the selling prices of their garments would be most 
detrimental and eventually force them to close their plants. Low sell- 
ing-prices, they argued, were absolutely essential on their products, 
due primarily to the competition they were receiving from the prison- 
made pants, overalls, work shirts, etc. 

Previous to the Codes this prison labor situation was very 
serious ana had a marked effect on the general price structure of the 
Cotton Garment Industry. As many as forty states at one time or another 
produced cotton garments in prisons for the open market. Control over 
this production was virtually impossible, and numerous unscrupulous 
manufacturers, operating prison shops and exploiting the prison labor, 
were often able to undersell and demoralize completely the entire market. 

The Cotton Garment Code exoressly prohibited any of the in- 
dustry members from employing prison labor, and this provision iracti- 
felly eliminated this under-selling evil in the industry, so that the 
complaints of these cotton garment manufacturers that they could not 
increase their prices due to prison competition were, in most cases 9 
not based on the actual conditions and facts. A Compact of Pair Com- 
petition for ths Prison Industries of the United States was also 
approved by the President on April 19, 1934. 

A. Statistics on Prison Labor Productio n 

The following excerpts from a study made in Hay, 1935, by 
Dr* Alfred Cahen, Ph. D. , Cotton Garment Code Authority statistician, 
and the statistical sui.ima.ry of a questionnaire set out ^oy the Code 
Authority in April, 1935, give a brief picture of this Prison Labor 
problem, 

"Prison employment on cotton garments increased from 6,000 
in 1385 to 16,000 in 1932. Of these 16,000, 2,000 were working on 
garments for state use, 2,000 for open market sales by the states, and 

9782 



-32 ■; ~ 

12,000 for private contractors. 

"In 1385- — 3fo of prison laborers worked on cotton garments. 

"In 1932 — 19$ of orison laborers worked on cotton garnents, 
(a greater oercent than any other industry), 

"In 1952 — 7,000 prisoners orod.iced work shirts. 
— 4,000 -prisoners produced vjor 1 : pants. . 

"In 1954 — 1,000 prisoners iroduced work shirts. 
— 1,600 prisoners ix'odaced work oants. 

"The reason for this sharp decline was that five large com- 
panies fron 1933 to 1954 ceosed contracting their work to -orison labor, 
and recorded en increase of 5,000 free eiroloyees in eight new factories. 

"At one time or another, 40 states produced cotton garnents 
in prisons for the open market. The Ion,-,- fight for free labor lias 
reduced this to 9 states now." * 

"]Pifty-two -oroducers of war).: nants re>ort they ere affected 
by prison competition. 

"Pron label sales of the Prison Labor Authority, Deputy Ad- 
ministrator Collins estimated that 1934 -orison jroduction was slightly 
under 2,250,000 work prints and overalls, and that approximately 3,100 
prisoners were working on all tj'pes of cotton, garments. -. 

"Deported prices per dozen of prison-made garnents are as 
low as $6.00 for work pants. 

"median prices :>er dozen on work pants — Free factories, 
$13,36; Prison factories, $7.50, ' . 

"Questionnaire replies report cotton garment prison pro- 
duction in 17 states; that 43 old distributors and 20 new ones are 
carrying orison goods in their localities, and 11 nanufacturers, 16 
retailers, and 25 wholesalers are distributing >rison goods. 

"Pe^ort sale of prison oroducts in 28 states, including 9 
states where such sales are -prohibited legally," ** 



(*) "Trends ir Cotton Garment Prison Labor 1885 to 1934" 

By Dr. Alfred Cahen, Llay 17, 1955. (; esearch and Planning 
Division Library,) 

(**) Statistical Summary af Prison L; bor questionnaire 
sent out April 5, 1935; dated April 25, 1935; by 
Ir. Alfred Cahen. (Pese; rch and Planning Division 
Library. ) 



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3 . Statement of Judre Adkins. 

The following statement of Judge Jesse C. Adkins, of the 
Supreme Court of the District of Columbia, in his decision rendered 
January 22, 1935, in the case of Alabama Textile Products Co., et al., 
vs. Honer S. Cunnings, the Attorney General, et al., also shows the 
improvement in this prison situation, 

"o. The weight of the evidence shows that the 
competition ^ith -prison-made goods has decidedly 
decreased. In 1932, 13,948 prisoners were em- 
ployed in manufacturing cotton garments; in No- 
vember, 1934, this number was reduced to 3,098. 

"T7ork shirts and work pants are the principal if 
not the only cotton garments made in prisons, 

"In 1952, 22,000,000 work shirts and 9,000,000 
work pants were so made. 

"Blue Eagle la Dels were first used on cotton 
garments about May 1, 1934. Between that date 
and December 1 about 600,000 labels were issued 
for shirts made in prisons and about 43,000,000 
labels were issued for shirts made elsewhere. 

, "During the same period about 1,100,000 labels 
were issued for work pants made in prisons and 
nearly 30,000,000 such labels were issued for 
work pants made by the rest of the industry. 

"c. The -orison competition otherwise is less 
severe than it was before the adoption of the 
'orison corroact." 



9782 



CHAPTER II 

TIIE POPES AS ORIGINALLY APPROVED 

I. MM'S CLOTHING CODE. 

During the many days and weeks of negotiations, conferences, 
and hearings prior to the approval of this Code, tlie main issues ■ 
at stake were the widely- different points of vie-; of the two as- 
sociations of the Industry, the Clothing Manufacturers Association 
of the united States of America, and the Industrial Recovery Associa- 
tion of Clothing Manufacturers, especially in respect to wages above, 
the minimum and the administrative machinery to be set up for oper- 
ating the Code. In the determined but mostly unsuccessful effort 
to settle these differences and .submit for final approval a Code 
satisfactory to both factions, sufficient consideration was not 
given to definitions of the products of the Industry, especially in 
relation to future jurisdictional conflicts with ether industries 
which mgiht produce articles of a similar or closely- related nature. 

A. ;• Pro-nosed Definitions. 



Article I of the Code proposed by the 1 blothing Manufacturers 
Association cf the United States of America read: 

"Definitions: The term' Clothing Industry 1 as used 
herein is defined to mean the manufacture of. men's and 
boys 1 and children' s -clothing, summer clothing, -uniforms, 
single knee pants, single pants, men' s and boys' leather 

coats and raincoats. "(*) 

B. Objections by Wash S ait h fl uuf ■ ctu rgrs. ' • 

Mr. Elmer W a rd, of the Goodall Company, manufacturers of ■ 
"Palm Beach 6uits" asked that special consideration and provisions 
be made for this branch of the Industry producing simmer, clothing. 

"The suit manufactured hy this subdivision is a highly seasonal 
product — it does not require tailoring or any special ability to 
make it up— - the skill required is mot comparable' to the higher de- 
gree required in the manufacture of wollen suits. The bulk of the 
work is now done in the South, where the worker is generally of 
slower temperament, ., is not keyed up to systematic production 
of the North and produces on the average few units per individual. — ■ 
The purpose and intent of the National Recovery Act will best be 
effectuated if a minimum' wage of thirteen collars per week for the 
Northern A ea and twelve dollars for the Southern Area be applied 



(*) Transcript of Hearing en's Clothing Industry, July 26, 1933, 
Volume, 1 Pages 10-:.' 



9782 



_7,Off_ 

to this subdivision. — At least fifty per cent of the employees are now 
working for less than the proposed minimum, and this would he a fifty 
per cent advance over the present wage scale. 

— The maximum hours per week should be more equitably applied to 
this subdivision, and some additional working time allowed during 
the peak season, — The manufactured garment has always brought a low 
price -in- the consumer's market and any hgihger. scale of wages other 
than that proposed would raise costs all out of proportion to the 
possible sale price, arid probably result i . the elimination of this 
industry and those employed therein. "(*) 

Mr. Leon G-odchaux, of Mew Orleans, La., representing the Men's 
W a sh Suit Manufacturers National Association, a group of ]>T e w Orleans 
firms, exclusive wash suit manufacturers, the largest single group 
in this Industry, asked for a separate Code for these manuf acturers. 

S7e urge, first, that within the intent and meaning of the 
National Industrial Pecovery Act, not being within the same 
competitive group, we do not belo g and should not be placed 
under the same Code as that governing the manuf actur err, of 
woolen garments. Second, being a separate and distinct industry 
we are, primarily, entitled to promulgate our own Coda. Third, 
because of the methods adopted by \\s in the manufacture of wash suits, 
and because of the materials used and labor employed therin 
finding ourselves closely allied to the various groups comprised 
within the I. A, 5, M. and because of our sincere desire to cooper- 
ate with the Administrator, we have voluntarily place oxirselves 
under the Code -of the I.A.G.M. — We therefore respectfully urge 
that our position be maintained and that we >bw permitted to 
refrain from associating ourselves with the manufacturers of 
woolen clothing." (»*) 

C. Approval " Dif initions . 

No question was raised by any of the single pants manufacturers 
as to the possible inadequacy of the definition of "pants" or as to 
the probability of feter overlapping trouble with other garment codes. 
As a result of the statements of Messrs. W a rd and Godchaux at the Code 
hearings, and later arguments and testimony (documentary evidence 
of which is not available) at the post-hearing conferences, the defin- 
ition section was slightly changed, and as finally approved on 
August 26. 1933, read as follows: 

"I. Definitions. — Ther term 'Clothing Industry' as used 
herein is defined to mean the manufacture of men^ s boys' and children's 
clothing, uniforms, single knee pants, single pants, and men's 
summer clothing (exclusive of cotton wash suits)." 



Transcript of Hearing on Men's Clothing Industry, July 27. , 1933, 
Volume 2, Pages 67-91. 

(**) Transcript of Hearing on Men's Clothing Industry, July 27, 1933, 
Volume 2, P a ges 334-343. 



9782 



-327- 

D . Approved W -ge ^ rov isi oils. 

Hie following minimum and classified wages were established: 

"II. Minimum wages to manufacturing employees shall be at the 

rate of 40^ per hour in the North, and 37<£ per hour in the South 

"The minimum wage paid by employers to employees working on single 
knee pants shall be at the rate of 37^ per hour. 

(a) On mid after the effective date, the minimum wage which 
shall be paid to cutters shall be at the rate of $1.00 per hour, and 

the minimum wage which shall be paid to off-pressers shall be at the rate 
of 75 cents per hour. 

(b) The existing amounts by which v- ;es in the higher-paid 
classes, up to classes of employees receiving $30.00 per week, exceed 
wages in the lowest paid substantial classes shall be maintained." 

E . Approved Hour Provisions. 

The following maximum hours were established: 

"Qn and after the effective d-te, the hours of employment for em- 
ployees in the Clothing Industry, except repair shop crews, engineers, 
electricians, firemen, office and supervisory staff, stock clerks, ship- 
ping clerks, truck drivers, porters rnd watchmen* nnd except employees 
engaged in bona fide managerial or executive capacities shall not exceed 
thirty-six (38) hours per week nor eight ( 8) hoxirs per day. Employers 
shall not operate productive machinery in the Clothing Industry more 
than one shift of thirty-six (36) hours per week 

"Repair shop crews, engineers, electricians, firemen, office and 
supervisory staff, stock clerks, shipping clerks, truck drivers, porters, 
rnd watchmen shall not work in excess of an average of forty (40) hours 
per week during any year beginning with the effective date." 

II. 'THE COTTOi: GARMENT CODE 

A. Public Herrin :s - Dala.7 in Approval. 

Fublic hearings on this Code were held on August 2 and 3, 1933, 
but the Code was not actually approved until November 17, 1933. This 
was in reality a trade association code rather than an industry code, 
and was based not on the product but on the type of material used in 
the product and was inevitably due to conflict in many cases with the 
product classifications of other needle trade industry codes, especially 
as the hours proposed were relatively high and the wages proposed were 
relatively low. The long delay before final approval was chiefly be- 
cause of the many diversified types of garments to be included, nnd the 
early realization thnt many cases of overlapping and unfair competition 
with other codes were bound to arise. Single pants and men's cotton 
wash suits were two of those most important problems. 



9782 



-328- 

E. Early Protests on Overlap Problem . 

Immediately after the effective elate cf the Men's Clothing Code, 
September 11,1953, a number of complaints rare filed by manufacturers 
operating under that Code that other manufacturers making precisely 
similar garments claimec that they rere chiefly of cotton content, 
and therefore could be produced under the more, favorable hour and v/age 
provisions of the proposed Cotton Garment Code. Al r 'o, a number of pants 
manufacturers withdrew from the Industrial Recovery Association of 
Clothing I.lanuf acturers and affiliated themselves with, the Interuationel 
Association of Garment Manufacturers, the sponsoring organization for- 
the Cotton Garment Code. 

C. Depv.ty Administrator Citchell'r Statement on Actions Proposed 

and Actually Taken . 

A number" of conferences and hearings on the' e problems were held, 
induing a Public Hearing on September 26, 1933, Deputy Admini strator 
B. II. Gitchell's statement at the opening of the Public Hearing held 
November 27, 1933, gives a, very good summary of the various steps pro- 
posed or actually taken by the Administration and the Code Authorities 
on tnis particular jurisdictional problem subseauent to the approval 
of the Men's Clothing Code on August 20, 1933. 

| "There is. something of a history of" this; after the Men's 
Clqthing Code went into effect the hearing was arranged and 
held, I believe, on the ori phial ap lica.tion of a group of 
-manufacturers in New Orleans, which" was later supported by 
a number of other people, and a hea.ring on the subject was 
held on September 26th, 1933. 

"As a result of that hearing, I believe an agreement was 
ma.de betveen various^ factors of the industry for the inclu- 
sion of Men's Wash' Suits of the chief' content of cotton, 
under the Clothing Code, and it was intended that an exe- 
cutive oner should be issued making the necessary amend- 
ments to the Men's Clothing Code to cover that agreement. 

"For the purposes of the record, and to give the history of 
the matter before you, I am ..ping to read the report pre- 
pared by Dr. Rogers, and also the rough draft of the pro- 
posed Executive Order. 

"Dr. Rogers says in this memorandum: 

"'As pointed out in my report recommending approval of the 
Code for the Men's Clothing Industry, difficulties are in- 
evitable in respect of definitions as to what a code for an 
industry could cover. As an example, I cit.ee summer clothing 
for men and stated that "the oulk of the production of men's 
wash si-.its is by firms who are jjrimarily cotton garment' 
manufacturers. The class of labor and methods of production 
are entirely different from the class of labor and methods of 
production of woolen men's clothing." The question of what 

9782 



~: 29- 

ald be done was debated at length and this arrangement was 
to: T3 '■ ct r ■ if Cott n : sfc suits si ; d ;>■ p t 

under the. Cott :. - nt Cod- which was then and still is pend- 

. All other wash clothing should come under tin Men's 
Clothing Code. This de-finitj d to by represen- 

tatives of the Hen's Wash Suit Mauufactur •?. Rational Associati 
(largely a, groue f Rev Drleans manufacturers) and representa- 
tives of the Clothing . . facturers Association of the United 
States of America (one of tin propos: i s iCia.tions of the Men's 
Clothing Code. ) 

"'The Men's Clothing Code went into effect on September 11, 1933:, 
and difficult: s wi r Immediately apparent. The New Orleans 

nufacturers had consid rable production of linen suits which 
-. re cut and made at the same time and by the same workers as 
cotton wash suits.. Manifestly it would irap< se an unnecessary 
hardship on such manufacturers to arrange for different wages 
and hours for employees when engaged in the manufacture of sum:', r 
was clothing of different fabrics. The Hew Orleans .manufacturers 
protested, and askei :' r relief, C'oincidentally, manufacturers, 
the builk of -' s i u tier, is in wollcn clothing, protested 

that in respect at their -.ash clothing th did not have the ad- 
vantage of longer hoars and' lower rages as tl ■ He 1 . Orleans manu- 
facturers would. have (they com; so was Lnt n< c under the Cotton 
Garment Code. ) 



"A hearing was therefore had on September 26, 1933,' and the 
matter was gone into fully. Excellent spirit was shown at the 
hearings and no interested party had any disposition to chal- 
lenge the two pre li'ses which. th< Deputy Administrator -suggested 
as determining the settl -mentj 

"1. That manufacturers who' were voluntarily under the Men's 
Clothing Code and willing to stay there with shorter hours and 
higher minimum rages should not be taken out . from under that code 
in respect to their manufacture of wash cl thin ; and 

"2. That if tl y stay > under the hen's Clothing Code they 
should not be subject to unfair competition from ether manufacturers 
who wore under a code more favorable in its hours and minimum 
wage provisions. 

"In conferences subsequent to the public hearing, agreements 
were entered into by which the members of the lien's Wash Suit 
Manufacturers Nati nal Association will come under the Men's 
Clothing Code but with r cognition of the feet that this branch 
of the Men's Clothing Industry is more seasonal and is entitled 
to overtime at the peak periods of t . :r; and with recogni- 
tion also of the fact that minimum w; - • guaranteed to workers 
of a somewhat different type from thos w ■:' k ; primarily on 
Lcn clothing cannot be as high as .h ' s originally in- 
serted in the hen's Clothin 

"'I therefore- recommem thai the Men* s Clothing Code as ?$- 

97S2 



-330- 

proved by the President on August 26, 1933, "be amended in 
order to carry out this agreement. When the Executive Order 
is issued, all manufacturers of men's summer clothing will' 
he under the same code subject to wage and hour provisions 
to which they all agree, whether they are located in New 
Orleans or in the rest of the southern section and are ex- 
clusively manufecturors of wash clothing or whether they 
are in the northern section of the country and only manu- 
facture wash clothing during certain periods of the year. * 

"The memorandum of Executive Order which TJr. Rogers has 
drawn up for the Executive Order is as follows: 

"'An explication having been made by the Men's Clothing 
Code Authority and the Men's Y/ash Sivit Manufacturers' 
rational Association, pursuant to and in full compliance 
with the provisions of Title I of the National Industrial 
Recovery Act, approved June 16, 1933, for modification 
and amendment of the Code of Eair Competition for the Men s 
Clothing Industry, as heretofore approved by me on August 
26, 1933, and for the modification cf my approval of said 
Code of Eair .Competition accordingly, and the Administrator 
having recommended the granting of such approval, such 
proposed modifications and amendments to be in accordance 
wi th th e folio wi ng p ropo s al s : 

"'(a) That in the definition of the term cloth- 
ing industry in Article I of the said Code, there be dele- 
ted the words "exclusive cf cotton wash suits" after the 
term "men's summer clothing" so that the complete defini- 
tion shall read: 

"'"The term 'clothing industry 1 as used therein is defined 
to mean the manufacture of men's, boys', and children's 
clothing, uniforms, single i:nee pants, single pants, and 
men's srmmer clothing." 

"'(b) That there be added to Article II of the 
Code, a new paragraph to be known as paragraph (g) as 

follows: 

,M "(l) In the State of Louisiana, the minimum wage paid by 
employers to employees working on wash suits of 100 per cent 
cotton content shall be a.t the rate of 35 certs ( 35(£) ; the 
minimum wage which shall be paid to cutters of wash suits 
of 100 per cunt cotton content shall be at the rate of 85 
cents (85(0 per hour, and the minimum wa ,e which shall be 
paid to off-Dressers of wash suits of 100 per cent cotton 
content shall be at the rate of 60 cents (60^) per ho\ir. 

'""(2) In the 'southern section' as previously defined, 
(except Louisiana) the minimum wage which shall be paid to 
cutters of Palm 3eache3,' lines, and similar wash fabrics 
shall be at the rate of 90 cents (90?!) per hour; the minimum 

97C2 



which shall be paid to off-pressers of Palm Beaches, lin- 
3ns and similar wash ■'■ Ics shall bi at the rati if sixty-five 
(65$) cents per hour." 

'"(c) That in the last p; f Article IV of the 

C &e there be inserted after thi i r< "trade" following: 

"Makers of sv. ds", so that th< c i pars ;raph 
shall read as folio 1 ;: 

"'"Tailoring to the trad< , makers of summer -;o'ods and manu- 
facturers of uniforms shall be permitted overtime at regular 
rates during peak seasons, the number of h iurs and number of 
eks to be determined by. the Men's Clothing Code Authority."' 

"I would like to say that for the purpose of this hearing tli 
is associated v:i th the Deputy Administrator in charge, Mr. ¥. B. 
Himes, of the Industri; : . Conference Board, en my extreme left; 
M-r. ;;. S. l.Iassel, of the Consumers' Advisory Board, and Mr. 
Sidney Hillman, of the Labor Advisor;/ Board. Br. Earl B. Howard, 
by Administrator, is associated with me in the cons ice rati en 
of this natter. 

"Dr. Sogers withhold the issuance of that 3: i cutive Order until 
the cotton Garment Cod.e was approved ~uy the President, so that 

amended Clothing Code and the Cotton Garment Cede would 
agree in their definitions. When the time came for the sub- 
mission of the Cotton Garment Ci di , Mr. Hunte ', representing 
the proponents of that Code, claimed that they had not received 
adequate notice of the learing which was held in September 
25 and 26, in that whili they were notified. )f thi ".caring, they 
were net notified as t< xactly what was to be considered at 
that hear ng, and he held that their members were not repre- 
sented at and wen n t ■ and by, the c el .ions reached or 
reements reached as to the result if that hearing, and. he 
declined to assent to thi Code as submitted unless the defini- 
tion of men's wash suits was included in the code as submit- 
ted to the President. The definition was included, with 3 
provision thaet the matter could be determined by the Admini- 
strator, as I read in ning remarks. 

"The real purpose, theref re, of this hearing is to have 
those interested, if the:- wish, show cruse -why the Executive 
Order as proposed by Br. Rogers, drawn up for submission to 
the President in accordance with the agreements reached after 
the hearings on September 25 and 26, should not bi issued." 

B. Approved Be f i ni tie r. s . 

Howev r, no really satisfactory solution ar decision was reached, 
and definite ns on the- ;; rment: as finally inserted in the approved 
~ tton Garmcnt'C . ... the nature of c : surrounded 

qualifications. 



9782 



-332- 



"Articlc II — Definitions 



"A. Ac c.siu in this Code the terra 'Cotton Garment Industry' 
means r.nd included the production oy any of the following 
processes:****, of any article or garment "mown as 

"(l) work clothing, work garments, work pants and 
children's plry suits. *** 

"(lO) men's rnd boys' pants in chief content if 
cotton. 

"(14) men's cotton wa.sh suits. 



"The products covered by Section A, paragraphs 8, 10, rnd 14, 
are included in this Cede pending the prompt holding of such 
further herring en such notice as the Administrator in his 
.discretion may fix, and the final extermination of whether the 
definitions ;f rny of them shall be modified or eliminated' 
or whether any of the subdivisions' shall continue to be in- 
cluded in this Code. 

"D. If and when, becau.se of the character of rny product 
made by rny employer or by any sub&i visional industry, there 
arises any dispute as to v/hether such product is covered by 
the provisions of this or another code, the code authorities 
concerned will report to the Administrator the code under 
which such product properly belongs- anc' in the event that 
the code authorities are unable to agree within a reasonable 
time, the Administrator, may, after notice and hearing, de- 
cide under which code the product of subdi visional industry 
manufacturing the same is covered. " 

E. Air. .'roved Hou r Prev isions* 

"Article III. — Hours 

"A. Ho manufactuering employees shall be permitted to work 
in excess of 40 hours in rny one week, or more than 8 hours 
in rny one day.***" 

P. Approved Waj°;e Provisions. ' '» 

__i_i _ . , — t — . ^ , 

"Article IV— Wages 

"A. Except as hereinafter provided, no employee (except 
actual learners, etc.***) shall be paid at less than the 
rate of 30 cents per hour per 4-0 hour week***in the 
Southern section***, n r at less than the rate of 32g cents 
per hor.r oer -'0 hour week***in the Northern section. " 



9782 



•-333— 



Article III r.lso required an iramei L?ti i vesti - tiou .„■ the 
Code t i '3 tc ivl'.f.tl c I '-. ir w« 1: v/r.s re suit in in 

sufficient r sea em; ym , so bhi t ehe Acini iintr; iion mi -at 

determine if t or; si ; L< be reduced further, So it v/rs ap- 

parent tl\j i -0110 Cotton Q-f.rment Code vrs r proved "by' the Administration 
with r ;reat i ?n; ais ;ivin^s as to itr successful operation and with 
the i\di:/, that mmy changes and amendments nbul< have to be mai - 
almost immediately. 



9782 



~334~ 
CHAPT2R III 

AMENDMENTS TO BOTH CODES, DECEMBER 13, 1933 

After the approval of the Cotton Garment Code, this competitive sit- 
uation, especially on single pants, grew even more severe, many of the 
Men's Clothing manufacturers insisting that their business uas very ser- 
iously threatened by the difference in wages, hours, and classifications 
provided in the two Codes, and the Admini stra.tion decided that immediate 
further public hearings on the question were necessary, and notices were 
sent out for November 27th and 28th. 

I. Public Hearing November 27, 1933. on TTash Suits. 

A. Objections of Cotton Garment Industry. 



Mr. Hunter, of the Cotton Garment Code Authority, 
manufacturers of work pants and overalls who also made 
suits, claimed that these cheap cotton wash suits, who 
$31. 5H a dozen, were produced in quantity lots in the 
manner and were in no way competitive with wash suits 
made by the New Orleans firms and others and soli for 
they should be made at the same minimum wages and maxi 
and all other Cotton Garment Industry products. (*) He 
tion data from eleven (ll) of the twenty to thirty cot 
turers of these suits. 



speaking for the 
men' s cotton wash 
lesaling at $24 and 
cheapest possible 
of seersuckers, etc., 
dress use, and that 
mum hours as overalls 

submitted produc- 
ton garment manufac- 



Pirst Nine (9) Months of 1933 
Men's Wash Suit Production and Dollar Volume ( **) 



"Suits 



Dollars 



Percentage 
wash suits to 
Production 



25, DO® 
14,400 
40,500 
65,900 

6,000 
36,100 

1,164 

116,000 

10,320 

2,875 
18,000 

336,800 



$75, 
46, 

101, 

145, 

14, 

72, 

4, 

203, 

17, 
11, 
90, 



OOn.00 
800.00 
280.00 
550.00 
000.00 
000.00 
380.00 
000.00 
200.00 
500.00 
000.00 



78J,70~.00 



7> 
6$ 

33$ 

66$ 
48$ 

16$ 
60$ 

Ts^' 1 



(*) Transcript of Hearing on Cotton Garment Industry, November 27, 1933, 
pages 13 to 26. 

(**) Transcript of Hearing on Cotton Garment Industry, November 27, 1933, 
Page 178, AND Page 13. 



9782 



Mr. " : . G. Urban, of Stahl-Urban Conpany, stated: (*) 

"The type of men's rash suits made in work clotlr.ng plants 
in the main are not in direct competition with the type of 
wash suits made under the clothing code for this reason. 
Our means of distribution are through the jobbing or whole- 
sale trade principally, and these garments: — these garments 
are sold in these wholesale-jobbing plants through their 
work-clothing divisions, and by their work-clothing salesmen 
in all rural stores, and the snail agricultural general stores, 
for the low income class. 

"I believe it is generally true the garments sold by the cloth- 
ing people under a clothing code is sold direct ~by their agents 
or their own men to clothing stores, men's specialty shops, and 
clothing departments of department stores. 

"These are for the medium and higher income classes; one is a. 
semi-tailored garment aid the other is a pure machine-made pro- 
position. 

"I know from errperience in trying to sell these garments in 
stores where the garments made by the clothing people are sold, 
that we absolutely have no standing or no consideration. They 
tell us it is work clothing and they could. not use it at any 
price, and we have never been able to. sell that type of store 
even if we so desired. 

"I feel that the criticism of unfair competition which I believe, 
has been mr.de, in view of the above, or the conditions as out- 
lined there, from our own experience, is incorrect, and it is 
vital that they stay as they are now classified,, under the Men's 
Cotton Garment Code; otherwise, there would be — well, we just 
cannot make the suits and. compete. under the increased costs 
necessary under the clothing code. 

"There is still another factor that is vital — and I think that 
is the consumer's angle, this being produced primarily for the 
low income class-^-but- with all die regard for the labor involved, 
the cost should be kept as low, on as low a plane, for that type 
of garments, as possible. " 

lir. Sidney Hillman, of the *T.R.A. Labor Advisory 3oard, claimed that 
the direct labor cost on this type of cheap wash suit would only be about 
40 cents per suit, and that even if t ey were produced under the wages and. 
hours of the Ten's Clothing Code, the increased cost per suit would only 
amount to about S cents. I'r. Hunter vigorously denied this, claiming that 
the ultimate price increase to the consumer would be. much greater. (**) 
(*) Transcript of Hearing on Cotton Garment Industry, Tovember 27, 1933, 
Pages 26 and 27. 

(**', Transcript of Hearing on Cotton Garment Industry, Tovember 27, 1933, 
Pages 28 to 30. - 



9782 



. -336- 

3. Arguments of Wash Suit Manufacturers 

Mr. Joseph Hasoel, representing the New Orleans rash suit manufacturers, 
claimed that these wash suits were in no way competitive with woolen suits, 
that they were really a separate industry, and again asked for a separate 
code; as a large proportion of their production was linen suits, they 
were arguing for "both cotton and linen garments, and believed that their 
position was fully understood "by the Administration. "When this brief 
was prepared by us giving our reasons for entitling us to a separate code, 
independent of the clothing code, because wash suits were not in competi- 
tion with woolen clothing, we had no reason to suppose that our request 
would not be granted. As a natter of fact, we were led to believe that 
we had won our case and we were amazed to find that linen suits had been 
taken away from the wash suit group and put into the clothing code." (*) 
But linen suits were placed under the Ken's clothing Code, and they then 
attended the hearing of September 26, 1933, as a result of which Dr. 
Lindsay Rogers drew up the proposed Executive Order on this overlapping 
problem. 

"At the termination of the hearing, while the Administration 
made no direct ruling, it was very apparent that he was going 
to place all wash suits in the men's clothing code, and we 
might add that informally he so stated to members of our group, 
and suggested that we get together with the representatives of 
the three manufacturers who were present, who were members of 
the Men's Clothing Code, and with the Labor Adviser, and work 
out an agreement under the clothing code.. 

"We then .went- into a conference lasting from about 7 p. m. until 
well after midnight. 

"Certain terms were offered to us by the representatives of 
the three manufacturers in the Ken's Clothing Code, from which 
they refused to recede whatever, and we, believing that there 
was no recourse to be had from the ruling which we loiew tha.t 
the Administrator intended to make, placing us in the Men's 
Clothing Code, and believing these to be the best terms pos- 
sible attainable, and much against our better judgment, capit- 
ulated, and accepted their terms. However, before finally con- 
senting thereto we asked that the matter bo held up until the 
foiling morning, when we might confer with the Administrator. 

"We were informed that unless this offer were accepted, then- 
they would withdraw it. Under these conditions we accepted." (**) 

Mr. Elmer L. Ward, of the Goodall Company, objected 1 that the proposed 
differentials in the Executive Order were not- sufficient to be of any as- 
sistance to his company, manufacturers of "Palm I! each" suits, and also 

asked that a separate wash clothing: code be established. 

(*) Transcript of Hearing on Cotton Garment Industry, November 27, 1933, 
Page 39. 

(**) Transcript of Hearing on Cotton Garment Industry, November 27, 1933, 
Pages 42 and 43. 



9782 



-337- 

:;r. HasiDel stated that rates of ^ipy in these Few Orleans plants had 
already been increased 85^,. and eny further increase over the 30 cent an 
hour rate would be an almost fatal hardship. 

"Ue have increased the rates of raj' in my particular factory, 
and that is typical of every other factors'- in Few Orleans,^ 85 
per cent over the pay that previously existed, before the pas- 
sage of. the iT.R.A. 

"T7e feel that if we are changed f r ^m a 30 cent an hour basis to 
a 35 cent basis, that is a difference of one-si:cth or 16-2/3 per 
cent. Our cost of labor today is 185 ner cent of what it was 
previous to the IT.R.A. , and this 31 per cent will increase our 
cost — -will make out cost 216 per cent of what it was before the 
N.R.A. In addition to that, when we cut down the number of hours 
we calculate 40 per cent of the cost is that cost effected by a 
change in hours, which would increase that 4fS, which would make 
our pay 22C -ner cent of what (what) it 'was -orevious to the IT.R.A.; 
in other words, we have substantially increased our pay. " (*) 

C. A^ruments of Men's Clothing: Industry . 

Mr. Leonard T/einberg, appearing for the Men's Clothing Code Authority, 
claimed that these men's wash suits' were competitive with tropical worsteds 
and other summer clothing produced by men's clothing manufacturers. 

"Are, or not, these garments which our friends talk about competi- 
tive with those manufactured of other materials? 

"First, we say they are competitive, in the manner of their manu- 
facture, and in the manner of their sale by the manufacturer, tha.t 
the materials, .whether tney by seersucker, Toalm beach,' tropical 
.worsted, crashes,, silk, or whatnot, they enter into the manufacture 
of summer clothes, and as summer clothing, are considered as one 
class by the manufacturer. . / 

"They are considered by him as 'one class in the laying out of his 
line, not only that, but in the method of manufacture, and they go 
through the same method <cf manufacture in the plant, regardless of 
whether they happen to be made out of cotton or silk or crash or 
whatnot. 

"The difference, if any, in the manufacture of clothing, we re- 
spectfully submit, are differences based on the standards that the 
particular manufacturer may care to set up for himself; in other 
~ords, whether he wants to manufacture fine clothing, or moderate 
priced clothing, or cheap clothing, but it is determined entirely 
by the standard, and not by the type of material which he happens 
to be using. 

(*) Transcript of Hearing on Cotton Garment Industry, November 27, 1933, 
Page 81. 



9782 



-338- 

"If he wants to make fine seersucker, or palm "beach, he lays 
out one method; if he wants_ to manufacture palm beach suits, 
or cheap seersucker, or linen, he lays out a cheaper method 
of manufacture, so that the difference, if any, is only a dif- 
ference in the standard that the manufacturer himself sets. 

"In relation to the sale of this line of clothes., and we are 
talking here of summer clothing, as distinguished from winter 
clothing, yet when we come to examine it, it is all clothing, 
all one article, whether it happens to "be made of one material 
or not, but when we come to talk about the sale of this line 
of clothes to a retailer, against a summer line of clothes, 
it is displayed in exactly the same manner to the prospective 
retail purchaser by the manufacturer as any other line of 
clothes, there is no mark of differentiation between the two— 
the seersucker, the linen, poplins, or whatnot, or the tropical 
worsted. They are different manufacturers of a summer line of 
clothes. They differ in price, yet as I shall point out to 
you later, that very difference in price is an overlapping, 
because seersuckers and linens and poplins and worsted in 
wholesale and retail prices overlap, and there is no near line 
of distinction marked between them." (*) 

"We say that ■cutting them under this Code grants them an 
absolutely unfair competitive advantage and in direct violation, 
if you. please, of the spirit and of the letter of the National 
Industrial Recovery Act, first, because it gives them this dif- 
ferential in price. I am not talking about the differential 
because of the locality, South or North. We make no complaint 
about that, but we say the differential they should suggest by 
coming under the Cotton Garment Industry gives them a very de- 
finite differential in price, which is in direct violation, of the 
spirit and intent of this Act, which was to see to it that there 
should be no unfair conroetitive disadvantages or advantages be- 
tween people in the same industry. 

"These differentials result in an increase in the selling ;orice 
of at least $1 to $1.50 per garment, or from 10 to 20 per cent. 
There is not any doubt a,bout that, 

"Secondly, to seciire this other advantage by coming into the 
Cotton Garment Cod.e — -under that code, apprentices, 10 per rent 
of the total force, are permitted, with a wage of 25 -oer cent 
less than the minimum, for a period of six weeks. Ho learners 
are permitted under the Clothing Code. 

"They get the other advantage where all employees under the 
Men's Clothing Code, earning in excess of the minimum, must be 
continuous. They escape that. 

(*) Transcript of Hearing on Cotton Garment Industry, November 27, 1933, 
Pages 91-92. 



9782 



-339- 

"In addition to that, cotton garmer.t manufacture rs under their 
code may operate machinery for more than one shift. Under the 
Clothing Code they may not;. and if they are to be given all of 
these advantages, we submit th-t they are "being put in a position 
where they can compete with us unfairly in price, in manufacture, 
and in every other direction and situation." (*) 

Mr. Weinberg also made the following statement, claiming codes were 
"In id out to cover industries, and that all manufacturers of the article 
should be included under the Codes. — We contend that it is not the mat- 
erial — it is not the material which characterizes under which Code the 
article must go, but the article, not the material." (**') 

Mr. Malcolm Lauchheimer, representing!. Greif and 3ro. , J. 
Schoeneman, Cohen, Goldman •& Co., etc. all manufacturers of summer cloth- 
ing, further claimed that these firms directly competed with the New 
Orleans group. (***) 

"Mr. Administrator, Mr. Godchaux has made the mistake of 
classifying clothing as woolen and cotton goods. Clothing 
is classified into heavy and summer clothing. We are re- 
presenting the summer clothing manufacturers. 

"Those summer clothing manufacturers do manufacture, in the 
same factories and with the same employees, cotton wash suits 
and woolen summer goods. They are directly competitive, and 
these manufacturers sell in competition with Mr, Godchaux. 
We have here manufacturers who can testify that their methods 
of manufacture are the same and their factories are used for 
the same purpose. 

"We also have a retailer from Baltimore who will testify that ' 
he purchases cotton and cummer woolen clothing as part of the 
same schedule. We sell at one time cotton goods and woolen 
goods as one line. 

"There is no other industry in the cotton garment code which 
competes with men's summer suits— men's wash suits. They do 
compete with every manufacturer covered by the men's clothing 
cod^. 

".Judge Walsh spoke of utilitarian garments. What he means by 
that I do not know. There is a separate heading under the 
Cotton Garment Code of work garments which is in there, and we 
do not ask that it come out. We are speaking only of dress suits 
that are not competitive. It does not require testimony to show 

they are competitive. 

(*) Transcript of hearing on Cotton Garment Industry, November 27, 
1S33, Pages 98 and 99, 

(**) Transcript of Hearing on Cotton Garment Industry, November 38, 
1933, Page 25. 

(***) Transcript of Hearing on Cotton Garment Industry, November 27, 
1933, Pages 170 to 172. 

2782 



-340- 

"There are three things in the Act that are required in 
■promulgating a code. The code must 'be on© "of -fair com- 
petition, to do away with unfair competitive practices. 
That is the first thing. I say that T 'r.-" Godchauskx in- 
dustry is directly competitive with the summe-r goods trade 
in the clothing industry. 

"The second point is that the code must he truly representa- 
tive of the trade or industry. I cannot conceive that cot- 
ton wash goods are a separate trade and industry. Certainly 
if I huy a cotton wash suit I will buy one less woolen suit 
for summer wear, and I am typical of millions of other men 
in the north. Cotton wa.sh goods, it is true, are new things 
in the north, hut they are established and they are estab- 
lished ae competitive of linens and of tropical worsteds. 
•Three years ago I had never worn a '.''ash. suit. I do now. I • 
wear tropical worsteds. Last jrear I bought no summer worsteds 
but bought a seersucker. 

"The third point is that the code must be -oromultated so as 
to induce and maintain united action of management under 
Government' sanction and supervision. You' cannot do that ex- 
cept with a unified code — one code over two industries and 
not two codes over one industry." 

Mr. L. S. Goldsmith, representing the Goodall Company, presented the 
following arguments for the wash 1 suit grouri: • ■ 

"The main contentions that re have to make are,' Very briefly, 
as follows: 

"1. That professor Rogers clearly expressed his views that 
special consideration be given the wash suit industry. This 
was done after a day-long interchange of arguments. 

"2. That Mr. Hillman expressed a willingness .to consider 
that contention. 

"3. That the chief reasons for this special consideration 
are 

"A. Manufacturing differences; unskilled operators 
doing unskil n ed and sectional work; differences due to wash 
construction. l 

"B. Fabric differences — '50 per cent of our output is 
white; 85 per cent of our output is light-colors, entailing 
additional laundry tax. .•..'. ■•' ■• 

"C. Short season as compared with worsteds, etc. Since 
our suit does not take the place of wool or worsted, hence the 
consumer is not willing to bay the ;orice he will pay for 'a 
suit that can be worn for a longer season. 



9782 



-341- 

"D. A new industry giving new employment to mills, 
manufacturers, retail merchants, and laundries is in the 
making, growing steadily, and should not be throttled by 
conditions that do not apply to it. 

"Finally, that there should be no discrimination in re- 
gard to the type of fabric or suit entitled to such con- 
cessions other than that they be wash suits." (*) 



(*) Transcript of Hearing on Cotton Garment Industry, llovember 27, 
1933, Pages 175 and 176. 



,78: 



II. Public Hearing November 28,. 1933, on Single Pants - Deputy 
Administrator 3. H. Gitchell, presiding* opened the hearing 
with the following statement: 

"Hoping to get some light on the subject, I ashed 
for an informal conference in Hew Yorh last week. 
Mr. Hunter organized a small group of his people, 
and Mr. Drechsler organized a small group from the 
Men's industry to see if we could find some common 
ground fcr a settlement of this problem, and a 
recommendation which might be submitted at this 
hearing. The rearest wo were able to get to a 
solution was the general agreement on the part of 
those representing the Men's Clothing Industry that 
single pants made of denim undoubtedly should be 
administered by the Cotton Garment Industry, and the 
general agreement on the part of those speaking for 
the Cotton Garment Industry that pants which are 
made as part of a suit should be administered by 
the Ci6thing Industry; so that we are confronted to- 
day with a problem of trying to allocate everything 
between those two extremes to the two Codes."*' 

Prior to this hearing, Deputy Administrator Lindsay Eo & ers had 
appointed George P. Dowling, of Strawbridgc and Clothier, Philadelphia, 
Pennsylvania, to make a limited investigation of this pants con- 
troversy. 

A. He-oort of George P. Dowling 

Mr. Dowling read the following report at the hearing held 
November 28, 1933: 

"The following report is the result of my 
survey for investigation of the manufacturers 
sent me by your assistant. 

"I have contracted most of those on my list, 
having spent one day in Scranton and two days 
in Hew York City. I find that the men's and 
boy's trouser industry are somewhat mixed up. 
For instance, I find, in investigating the 
plant of Halpern and Chiistenfeld of Hew York 
City, that at least 95 per cent of their out- 
put is manufactured of cotton fabrics, yet 
they are listed under the men's clothing code 
and we compare them to, for example, the 
Hercules Manufacturing Company of Hew York, 
who make at least 35 per cent of their products 
from woolen fabrics, yet they are under" the 
cotton code. 

"I am going to use these names here, because 
the names were on my list, and these are the 
people that I visited. 



(*) Transcript of Hearing on the Cotton Garment Industry, November 28, 
1933, Page 7. 



Q7ftS> 



-343- 

"That condition exists all along the line, and I, 
myself, would "be unable to place any manufacturer 
in any particular code under these circumstances. 
My recommendation to you is that the entire in- 
dustry of men' s and boys' trousers, whose prod- 
ucts exceed 60 per cent made from cotton fabrics, 
should be placed under the cotton code. If that 
were done, I think you would find that the entire 
industry would be placed in that code, but I find 
in my investigation that the manufacturers as a 
whole, would like the entire industry placed 
under the code, regardless of whether it would 
be clothing or cotton, and they would be satisfied. 

"On this code, with the contact I made of the 
several manufacturers that I called on, some are 
on the. ..co"tton cede and some are on the clothing 
code, and I. think the concensus of opinion given 
then was to give them one code regardless, and 
: they would be satisfied, as I said heretofore. 

"As it is now, it would take a concern, such as 
Happ Brothers of Macqn,. Georgia. In the boys' 
knicker line, they are; highly competitive with a 
house known as the ,0,'. TC,. , .Knee Pans Company, 
Louis Rosenblatt, or '.'any other" knee pants manu- 
facturer that' I have 'come in contact with, and 
yet, they being under the cotton code, are in a. 
position to undersell these three manufacturers 
which I have named, who. are under the men's 
clothing code, at a difference of at least 20 
per cent, which to my mind, makes very unfair 
competition. 

"I can cite the same instance in the men's trouser 
manufacture and would compare the Hercules, Meyer, 
Isaacs, with Hr.lpern and Christ enf eld, Kalikow, 
Brothers, Greenstone-Stern, Berman and Rafkin, 
Most of those manufacturers are operating under 
the Men's Clothing Code, and Isaacs, Hercules, 
Moyer, Kalamazoo, Oberman a re" operating under the 
men's cotton code, and they are all engaged in 
practically the same line of business. 

"The Anthracite Overall Company and the Lackawanna 
Pants Company of Scranton, I understand, are- owned 
and operated under the same owner. One was placed 
under the Cotton Code, and the other under the 
Clothing Code, but recently the Lackawanna Pants 
Company has, I understand, been temporarily placed 
under the Cotton Code, and I feel that if the ^ 
Anthracite Overall Company is under the Cottdn 
Code, then the Lackawanna Pants Company certainly— 

belongs there, also. A .V 

" - . ■ 



9782 



-344- 

"I would be very glad to come to Washington to go 
into this matter with you in mere detail, but I 
certainly cannot see how this particular industry 
can operate under two separate codes. It means 
that those under the Clothin,! Code would not be 
able to compete- with those under the Cotton Code 
because of the difference in trie cost of at least 
20 per cent or 25 per cent, and they all manu- 
facture practically the same grade of garment, 

"Therefore, if my recommendation or suggestion is 
worthy of consideration by you, I most certainly 
would recommend, as stated in another part of this 
le.tter, that this entire industry, regardless of 
who or where they may be, be placed under one 
uniform code which gives them an opportunity of 
meeting their competitors on a fair basis. Other- 
wise, I am afraid that as it is now, those operating 
under the Men's Clothing Code would be unable to 
compete with those operating under the Cotton Code, 
and the result will be that some of them will have 
to close up their plants. 

"I trust that this report will reach you in due 
time and that a personal conference might be more 
satisfactory. If so, please notify me and I can 
assure you that I am at your service." 

B. ArgmeBfcfcs of Men's Clothing Industry . 

Mr. Joseph E. Brill, of the National Boys 1 Pants Manufacturers 
Association, Inc., spoke as follows: 

Rolls of fabrics, "one containing some -percentage of 
wool, the other being all cotton, are laid on the 
table on top of each other, marked at the same time, 
and cut at the same time.*** ***lt is .quite obviously 
impossible to apply two codes to the pants industry.*** 
The factor which determines the nature of the fabric 
upon which the operations are conducted is the 
season of the year: — December to June manufacturers 
made practically all cotton fabric products, July to 
November products consist of cotton, mixed cotton, 
and a small percentage of ?/ool.***This pants business 
does a volume of about $95,000,000 per year.***The 
difference that exists today in the cost of manu- 
facturin & between the two codes is between 20 and 
25 per cent.***It is impractical and impossible to 
operate a pants factory under two codes. All manu- 
facturers- in the industry are in agreement that its 
best interests can be served only by the application 
of one code to the industry,"* 

I*') Transcript of Hearing on Cotton Garment Industry, November 28, 
1933, Pages 10 and 16. 

9782 



-345- 

Mr. David Drechsler, Secretary of the Men's Clothing Code 
Authority, submitted the following table of single pants production 
for 1931: 

"Reported under Men's, Youths' and Boys' Clothing 
(other than work clothing) — Census of Manufacturing 

1931 

Fairs 
"Men's and Youths' Suit Trousers 24,651,398 

"Boys' Suit Trousers 8,850,629 

"lien's and Youths' White Duck Uniform Trousers 4,040,862 
"Uniform Trousers 748,925 

"Hen's and Youths' Separate Trousers 18,523,055 

"Boys' Separate. Trcusers and Knee Pants 12,806,088 
"Snort Knickers '1,855,648 

"Riding Breeches 1,383,132 



72,859,738 



"Work Pants 
"Denim Pairs 

'Overalls 49,402 ,596 

Mork Pants 6,653,208 



"Total Denim 56,055,804 

"Overalls (of other cotton cloth) 

10,566,464 

"Total Denim and Overalls 

(of other cotton cloth) 66,622,268 

"Work Pants 

"Khaki, Corduroy, Drills, and Woolens, 20,403, 824 pairs. " 

And the following is a summary of his arguments for the 
Clothing Manufacturers. 

"I dare say there is not a clothing manufacturer in 
the country that at some time or other docs not 
manufacture single pants - one-third of the clothing 
industry is the manufacture of pants. Is there any 
line of demarcation between single pants anu. pants of 
a suit? 

"How you are going to put this clothing industry, 
employing hundreds of thousands of workers, all 
over the country, whose capital investment rates 
in the billions, in an unfair competitive position, 
because there are some twenty million single pants 
that arc manufactured, which perchance you and I 
cannot tell whether they are going to be used for 
clothing, dress purposes, or for work. You know 
hat I refused to put or comply with any request 
to differentiate between suits unit pants and 

9782 



-346- 

single pants, the figure is 68,000,000 some 33,000,000 
pants made which are part of suits units, and 30,000,000 
single pants, but those are all wool content pants. 
Then there is a well-defined group to which the clothing 
industry makes no claim - these arc pants made of denim 
cloth and commonly known as work pants. Census figure 
for 1931 shows total work pants was 56 million. So 
you have 68,000,000 pair of pants where there is no 
dispute that they belong to the Men's Clothing Code, 
and you have 56,000,000 pants where we do not dispute 
they belong to the Cotton Garment Industry. 

"The pure labor cost of a pair of pants, in the men's 
clothing shops, is about 35 cents. The differential, 
as found by Mr. Dowling, in the cotton garment shops, 
is 20 or 25 per cent. It would make a difference of 
8 cents on a pair of -pants. You have 24,000,000 (in- 
cluding 4,000,000 duck pants) pants in the so-called 
'twilight' zone, and the people of this country would 
be compelled to pay as a penalty for nutting these 
24,000,000 pants in the clothing code, a penalty of 
8 cents per pair - some $2,000,000. It will save the 
standard of practice, hours and labor where it is 
under the entire clothing industry and I say it will 
bolster up the entire industry. You cannot cut l/3 
of it and expect to have the other 2/3 stand up. You 
will create a larger purchasing power of some 32 
million single pants workers, and you will not hurt 
those manufacturers of pants in the country who work 
on denim. This 8 cents per pair will be spread over 
the entire country and will create a larger con- 
suming power. This is not profit, it is additional 
wages that circulate throughout the country, and it 
amounts to $2,000,000. 

"There are some 6,000 workers that operate under the 
Men's Clothing Code that make men's single pants, 
and single knee pants." 

Summary of Points Submitted Brief of Men's 
Clothin Code Authority 

1. Two codes cannot successfully operate in one factory. 

2. There is no distinction in the skill of the worker, 

nor the nlant and machinery, in making suit pants 
and single pants. 

3. There would be no means of identifying the two classes 

of work. The workers would not know which they were 
actually making. Enforcement of compliance would be 
very difficult. 

4. Any hour basis over thirty-six would tend to further 

reduce the number of employees that can and should 
be re-employed. 



9782 



-347- 

5. Large numbers of workers haye already been put out 

of work by the unfair conroetition of the Cotton Garment 
Cole, and many more will be unless this condition is 
c erected. 

6. Ac iitional cost, per pants would be only eight cents 
and permit thousands of workers to retain their jobs. 

7. Skill and machinery, etc., required to make denim 
pants and overalls, are different, and these should 
remain under Cotton Garment Code. 

Mr. Hyman Blumberg, representing the Amalgamated Clothing Workers 
of America, said: 

"The argument that you cannot adapt yourselves to 
40 cents an hour ere only arguments that involve 
prices. Price, if you are today living up to your 
32% cent an hour — if you are paying 33§ cents an 
hour, then the problem would cone to from 5 to l\ 
cents additional labor cost on a pair of pants. 

"The 40 hour week does not enter into it, because 
if you pay 40 cents an hour the 40 hour week does not 
remain a problem, becs.use after all I question 
whether all of the pants that are needed in this 
country cannot be made by the factories you gentlemen 
operate, and made at the convenience of the public on 
a 36 hour week, so the oroblem is one of cost, and I 
will say the cost problem would not exceed from 5 to 
l\ cents on a direct labor cost of a pair of pants, 
and for the Administrator to permit you gentlemen to 
operate on a 40 hour week and 32jjr cent minimum in the 
North and 30 cents in the South will be sewing the 
seed for complete disintegration of a number of pants 
shops today, mailing both men's suits and pants, and 
j in & lc pants. " 

In Baltimore there are from 15,000 to 18,000 pairs of 
pants made a week that are made by single pants manu- 
facturers and a number of them make about 90^ cotton, 
about 10 c i woolen. They are operating under the Lien's 
Clothing Code, and they do not belong to any particu- 
lar group — Mr. Brill's or Mr. Drechsler's. The shops 
happen to be union shoxis. They went through this 
season, but I question whether they will open up the 
next season. They cannot stand the competition of 
single pants manufacturers working under a Cotton 
Garment Code. 

"So, summing up, pants are conceded to be clothing, 
leaving out denims, overalls, that mechanics wear. 
In the Clothing Industry, the overwhelming majority 
are under the Men's Clothing Code. The difference 
is the cniestion of price;, the manufacturers want 
to be fair to the public, and tack on the labor cost. 
The labor cost only ".:ould mean from 5 to 8 cents in 

9732 



-348- 

addition to the cost, depending on the efficiency of 
the shop. That would be at the top, taking the com- 
pletely inefficient shop, would be $1 a dozen in 
labor, assuming you are paying 32y cents an hour. 

"The worker will not object to payin^ that 10 cents, 
if he knows by doing that he avoids confusion in 
an industry employing 150,000 people." * 

Mr. Miller, also of the Amalgamated Clothing Workers of America, 
speaking in reference to the unfair competition by the Cotton Garment 
Code plants, said: 

"About fourteen or fifteen months ago we organized 
thirty-five or forty shops in Brooks, Lehigh and 
Montgomery Counties, Pennsylvania, host of these 
snops are making pants. They do not discriminate 
whether these pants come from one branch or another. 
They make pants. 

"In the springtime mostly they make them for 
different cotton cloth manufacturers, because they 
get what they call White Sanforized stuff. Some 
shops make a. very high priced woolen stuff. They 
make all kinds of pants, all branches. How you 
can differentiate and how you can subdivide them, 
I do not know, A number of them, I might state, 
who also make ~ants for people in Few York or 
Philadelphia who are legitimate suit houses. 

"The shop in Pennsylvania, that I refer to, with a 
capacity of about 9,000 to 10,000 pants per week, 
is a shop that has been working full force for a 
long time. The shop was working for Hew York 
manufacturers and was v/orking under the Clothing 
Code, 3,000 per week for the last two months, ITow 
that shop, for the first time in a long while, has 
been closed just because the manufacturer who lias 
been supplying them with about 6.000 pants per vTcek 
told me, "I can no longer supply their shop with 
work beceuse I can get my stuff mad" up by con- 
tractors all oxer the Southwest and TiTest ''ay manu- 
facturers members of the I.A.G-.ii. ', ^.rid. if necessary, 
I will tell you the names of the manufacturers in 
priva/fce, and mention the name of the shop in question."* 

The following letter indicates the competitive situation as 
affecting those plants operating under union agreements with the 
Amalgamated: 

"We manufacture pants, the same type of pants that 
virtually every other' pants manufacturer in this 
vicinity makes, namely — all cotton pants, part ?/ool, 
and all wnol . 



(*) Statement of Mr. Killer, of the Amalgamated Clothing Workers of 
America, Transcript of Hearing, November 28, 1935, Page 85. 



9782 



-34-9- 

• 'understand that any garment that has any wool 
content whatsoever comes under the Men's Clothing 
Colo, and that the manufacture of cotton pants at 
the present time has been assigned by Executive 
Order of the President of the United States under 
the Cotton Garment Code, with a $1? per week mini- 
mum for 40 hours. 

"We have, at the present time, a contract with the 
.Amalgamated Clothing Workers of America, and in 
view of that contract, the Amalgamated in our 
contract shops is compelling us to pay a minimum 
wage of $14.40 in accordance with the Men's Clothing 
Code, on all types of product that we manufacture. 
We are perfectly willing to do this if our cor- 
petitors do the same, hut we understand that our 
competing manufacturers are working under the 
Cotton Garment Code, which requires them to nay 
only a minimum of $12.00 per week for 40 hours, 
thus giving them a decided advantage over us in 
the price of manufactured goods, as the type of 
employee in our contract shops is identical with 
our competitors." * 

0. Arguments of Cotton Garment Industry. 

Mr. Sidney Moyer, Secretary of the Association Pants Manu- 
facturers of America, said: 

''We came down here on August 7th and spoke to 
Dr. Rogers, and wanted to find out the situation 
as to the pants situation. 

"We believed that we belonged some place in the 
picture. He told us to tell our story, and we 
told our story, and we told them how much cotton 
pants we made, and how many wool pants. 

"we could not tell them exactly, and, as I am on the 
staff of the Associated Pants Manufacturers of America, 
Dr. Rogers told us to go out and find out just how 
many were made, and bring in a report, and that we 
would hear from him the next week. 

"We sent out a lot of wires and got a lot of in- 
formation. I want this report put into this record, 
because I think it is very important. 

"This report shows that the pants manufacturers make 
not only pants, but overalls, coveralls, overall coats, 
blanket-lined coats, play suits, work shirts, and 
semi-dress shirts, blazers, lumberjacks, and a. great 

ay other garments, all of which arc set forth on this 
tabu lation. 

(*) Letter dated October 23,1933, from the Hew York Pants Manu- 

fac turing Co., Baltimore, Md. , to George S. Robertson, Jr. , Men's 
Cloth-' ng Code Authority for Md.and Va. , Baltimore, Md. (Men 1 s 
Cloth-' ng Code Piles.) 

3782 



-350- 

"In this long list of garments set forth here, I might 
say that these are all manufactured on the same ma- 
chines, and by the same workmen, and on a quantity 
production basis, low priced, and sold to the lower 
income classes. 

"In practically no instances are these peonle who arc 
employed in these slants skilled T'orkers in the or- 
dinary sense, "out they are simply machine operators, 
or a little above that. 

"These are made for the lower income classes, a.s I 
said, and they are purely production goods for such 
purposes. 

"When we submitted these facts to Dr. Rogers, and to 
the other proper authorities, they told us that we 
belonged in the Cotton Garment Code, and there we 
were." ** 

In reply to the questionnaire sent out by this Association, re- 
plies were received from 130 of their members, giving data for 1931 
on quantity 2">roduction, dollar volume, and percentage of pants by 
materials. It is interesting to note that 45 of these firms reported 
that they manufactured pants exclusively. The summary of these re- 
ports is as follows: 

" "Pants Production for 1931: 

130 companies, except 69, 70 and 94. 

Humber of dozens 3,098,760 

Value of T^ants $36,346,219 

"Percentage of Pants by Material's: 

All cotton 86 * 
Part cotton , 7.5 * 

Wool 6.5 

"Pants Production for 1931; 
Average 

Tumber of dozens ' 24,500 

Value of Pants $300, 000 

"Percentage of Pants by Materials: 

All cotton 86 * 

Part Cotton 7.5 * 

Wool 6.5 



(**) Telegraph reply reported total cf all cotton and part cotton as 
cotton. If these had reported pants of part cotton it is es- 
timated tha.t the average for all concerns listed would be 83.5 
per cent all cotton, 10 per cent part cotton, and 6.5 per cent 
wool. 



(*) Transcript of Hearing on Cotton Garment Industry, November 28,1933, 
pages 127 and 128. 



-351- 

"Pants Production for 1931: 
Total U. S. 

dumber of Dozens 5,151,600 (61,819,200 pants) 

Value of Pants $85,562,000 

"Pants Productions for 19.31: 
Percent of U. S. 

Number of Dozens 60^> 

Value of P»nts 42.5^ 

"Pants Production for 1931: 
Non-v7iol pants: 
Associated 

Number of Dozens 2,928,460 (35,141,520 pants) 
U. S. 

Number of Dozens 3,502,000 (42,024,000 pants) 
Per Cent of U. S. 83.6'' 

420,000 dozen "'ool r nd part "'ool pants made by Ne-"* York grout). 
5,000,000 -oants vool and part vool made by He^ York grout). 

"Pants Prodtiction for 1931: 
40 Concerns, P-°nts Only 

Clumber of Dozens 1,013,321 

Value of Pants ^11,639,529 

"Percentage of Pants by Materials, 1931: 

All Cotton 81 

Part Cotton 10 

TTool 9 

" Pants Production for 1931: 
90 Concerns 

Number "of 'Dozens 2,085,439 

Value of Pants $24,706,690 

"Percentage of Pants by Materials, 1931: 

All Cotton 88 

Part Cotton 7 

TJool 5* 

Mr. 3enjamin 3erman, representing the Crorm Overall Company, of 
Cincinnati, Ohio, "-nd the International Association of Garment Manu- 
facturers, suggested the fcllo-'ing solution of this problem: 

"I maintain there should be no change in the hours for the 

cotton garment industry, '"hether or not those operators ^re working 

on cotton pants or the cotton parment code. 



(*) Atnendix of Transcript of Hearing on Cotton garment Industry, Nov, 
28, 1933, Pages 

9782 



"Summing it up, we have selected ps the dividing line 100 
percent all cotton -cants to be made on the cotton code prices, 
and we suggest that woolen pants and cart woolen pants which 
may he made by our manufacturers may be made on clothing price 
of 40 cents and 37? cents : that the hours remain in the 
cotton garment industry 40 hours. 

( "Deputy Gitchell. Even ?s applied to wool or part wool 
trousers?") 

"Even as applied to wool and part wool trousers, for- this 
reason, that the percentage of " r oolen and cart woolen 
trousers manufactured by those operating under the cotton 
garment code is small, and is net in my personal estimate 
a vital factor to disrupt the whole industry. 

("Deputy Gitchell. Tould that include the work cants made 
of cheap shoddy? 11 ) 

"There is a definite line easily determined, the source of 
supply of the material. All cotton garment code, anything 
else wool code prices, 40 cents and 37- cents. 

"There you eliminate the competition that is being com- 
plained about for woolen cants.. The clothing peocle never 
did make any cotton-cants- to the percentage they are to 
claim to the Administrator. 

("Deputy Gitchell. Are you authorized to make these pro- 
posals for then?") 

"Yes, I am authorized to make that proposal. "(*) 

Mr. Herman A. Speh,' of the Drybak Corp., 3inghamton, N. Y. , sug- 
gested a clearer definition of work pants, and filed the following brief 
in support of his arguments: 

"Mr. Administrator: 'Referring to our reauest of November 
24, to you on hearing No. 15-13 to be held November 28 at 
10 o'clock A.M., ve propose that paragraph 10, Section A, 
•Hen's and Boys' Pants in Chief Content of Cotton' be elim- 
inated entirely, 

1. 3ecau.se this defines only one type of pants and 
is ambiguous. Its only interpret- tion could be pants 
of a material of which the value of the cotton is more 
th"n 50 Per cent of the tot.-l value. It is impossible 
in the ordinary course of business to determine the 
ex ct cotton-value content of piece-goods, and it is 
possible to conceive of r .re ter-ial mora than 50 per 
cent cotton by weight but whose chief content or principal 
value is in wool or r; yon. This paragraph, as it is, 



(*) Transcript of Hearing on Cotton Garment Industry, November 28, 
193 r :, Pages 156 and 157. 



9782 



I— r- i-t 

**353»" 

therefore, would be the cauee of many disnutes. 

""o pants manufacturer deals exclusive in the materials 
describe^ in paragraph 10, Section A. They constitute 
only'n trrt of output and there is no reason why this part 
should receive special consideration in the Code, In our 
case, materials whose chief content is anything but cotton 
are almost nonexistent. 

""Ve call attention to the fact that 'work pants' are included 
in paragraph 1, Section A, of the Code and that nants in 
cnief content of cotton may be cither work nants or dress 
n^nts, the distinction being in the r,tyle, tailoring skill, 
and method of manufacture. Paragraph 10 is, therefore, in- 
herently a -oart of naragranh 1 and should be eliminated. 
We consider that this was recognized by Administrator John- 
son in his recommendation to the President of this Code, 
d' ted November 7, 1923. (See United States Printing Office 
cony of the Code, Page 3, second paragranh.) 

"On this nremise we argue that a work nant is a type of 
uroduct which had been made and distributed for years in 
large volume and is usually recognizable by (a) its mater- 
ial, (b) by its method of production, (c) tyne of con- 
struction (d) by the channels of distribution through which 
it moves and (e) by the tyne of consumers who nurchase it 
and the use to which it is Put. 

( n ) Material may be all cotton such as cottonadcs, 
khakis, denim, -prints and ducks. It may be oart wool 
usually "'ith a cotton warn, and a small percentage 
(25^ to 40^) of shoddy "-ool filling. It is easy to 
recognize material used for work nants. 

(b) The characteristic method of -production of work 
■o~nts is a table lay, cut a? high as 96-nly, of as- 
sorted sizes on standard patterns or stencils and 
defending upon the length of the cutting .tables, in 
auantities as large as ninety-six dozen on one table 
and at one time by oo'-er driven knives. The cut 
nieces are then bundled in lots of one or t-"o dozen 
garments, denending unon the weight, which the machine 
onerator has to handle without nrotection of the gar- 
ments ag-'inst outside damage. 

Prom this noint they move to the sewing rooms, where 
they aire processed on po—er driven machines arr-nged sec- 
tionally and moved through a regular series of stitching 
onerations to comnletion. Operators are usually skilled- 
only in the narticular cneration and machines on ""hich they 
work and are reouired to have no tailoring skill. No hand 
onerations are performed. Pressing is done by nower-driven 
machines ^nd oractically all onerations Pre na id by niece- 
work ner dozen or ner hundred. Almost all ooerators em- 
ployed in this nroduction are women. 

9732 



*354~ 

(c) As to type of construction, the patterns are crude 
and inexact as to line compared to dress pants. Trim- 
ming materials such as buttons and pocketing are less 
expensive. Methods of seaming not -remitted in dress 
pants, such as. double or triple 'seams; are used; raw 
out edges ore not trimmed to the extent of dress oants. 
Speed of production and strength of "/erring ouklities 
are the principal aims. 

Hone of the pants are made to match other garments, 
such as coats or vests, hut are made'ris single garments 
to serve a particular purpose in work or Play. On such 
an understanding, there disappears most of the difficulty 
outlined oy General Johnson on Page 7 of the printed copy 
of the Code, second and third paragraphs. 

(d) The distribution of '"ot:: pants has characteristics 
very distinct from that of Press pants. Work pants 
liave always been distributed either through the whole- 
saler ci dry goods or general merchandise to retailers 
on the side streets of lar^e cities or in rural towns. 
It distributes direct to the 'retailer, they have been 
sold to the small side street 'retailers and not to the 
department o^ first-class men's clothing stores. The 
common unit of sale by manufacturers and jobbers is one 
dozen. 

(e) Work pants are pnrch sed by and worn by the farmer 
and the working man pnfl the retail stores which sell 

it to him are located in the railroad rnd industria.l 
centers and in the smaller cities nd villages n djacpnt 
to the farming area. 

"We point out that the Department of Commerce has associated 
work pants always -"i.th the types fof articles also listed 
in Section A, paragraph 1. (See Surea.u of Census Form 308 
for 1931, Page: 3, line 39,) ' "V argue also that this same 
Department has always associ* ted, fs competitors for the 
Consumers' favor, work pants and overalls. (See their re- 
ports for the last three years on work clothing.) There- 
fore, work pants and overalls must be in the same Code and 
produced under similar conditions of wages and work weeks. 

"From IG-20 Q Department of Commerce, "Bureau of Census, re- 
leased January 22, 1932, Page 2, last two paragraphs, in- 
dicates that Bureau has always regarded the work pants and 
other articles listed in the Cotton Q-arment Code as a dis- 
tinct industry from men's, youths'' and boys' outer clothing. 

"Because w e believe that a work pant is easily recognizable 
once the general conditions surrounding it are understood, 
we, therefore, propose that paragraph 10 be eliminated and 

9782 



-355- 

That the Question rt issue be settler 1 by a definition of 
;i 7ork: Pants' in paragraph 1, to be added to the Code along 
the following lines: 

"'"ork pnnts, as used herein, Cleans and includes men's and 
boys' pants of cotton, or ""hose chief content by weight is 
cotton, produced in substc'nti^ll ,r the same rarnner as the 
other garments specified in Section A by oner- tors employed 
on sectionr.l ioo'-er machine work, ;, nd which garments do not 
reauire tailoring skill.' 

"In this brief v, e rre speaking primarily for our own com- 
pany. Because of our long experience 3 nd acaualntance in 
the trade, " r e believe that our proposals would be subst^n- 
tially approved by our cormetitors. "( *) 

Mr. J. L. Wines, of the M.R.A. Labor Advisory Board Pnd of the 
United Torment Workers of America; spoke as follows in suggesting tha.t 
pants of all cotton be placed under the Cotton Garment Code, and those 
made with part shoddy r nd/or wool be placed under the Men's Clothing 
Code: 

"Speaking as n represent; tive of nn international labor 
organization that has agreements with •" number of employers 
in the work clothes industry, work clothes and shirts, I 
am of the opinion tha.t two codes in the industry will 
not work out satisfactorily. I am ashamed, however, of 
the wage rates that -"e in the Cotton Garment Industry 
Code. They mean nothing at "11 to our membership that are 
employed in this industry where we have union agreements. 
Directly they mean nothing to cur membership because w e 
do not receive one Denny incre? se in wages; their hours 
'"ere not shortened because we have in our agreement the 
forty hour week since 1931. We contended in 1931 with the 
union-ma.de association committee that there was not enough 
work to ever keen their factories operating eight hours per 
day, five days a week. There has nothing happened in the 
industry since tlv t time thf t "'ill cause us to change our 
minds. I T o one of our plants, not one, have operated forty 
hours p week since 1931, averaged forty hours per week. 
Many of them may hnve a fe^ weeks at a time thr-t they have 
worked full time, but the mrjority h^ ve not worked more 
than thirty hours per week, or thirty-five rt the most. 
Indirectly our membership and employers whom we hrve had 
the pleasure of dealing with, rre benefited even by the 
minimum, and even if that is only thirty cents oer hour 
in the South and thirty-two cents in the Forth. They have 



( *) Brief present?" by the Dryb ;: >: Corpora tion, Inc., Singhampton, 
". Y. Transcript of Hearing on Cotton Garment Industry, 
November 28, 1933-, Pages 179 to 184. 

9732 



-356- 

benefited because of the unfair competition of the non- 
union manufacturer who, in many localities, ha.s been oaying 
as low as $2.00 and '3.00 -oer Week and working as :iiany 
hours as the state lows would "Hermit them to work women 
employees. 

"TTe are of the opinion that the minimum scale on nants 
that are made of all cotton shall be, as now, in the 
Cotton Garment Code, and that the minimum scale on t)rnts, 
the material of which they are made is of shoddy or of wool, 
be changed to forty cent- in tie jTorth : nd thirty-seven 
and a half cents in the South. 

"The question of hours should be taken U" as the Code pro- 
vides for, within a period of sixty days from last Monday. 
I do not think we are going to solve the unermlo'inent 
problem unless we --dont r thirty or thirty-five hour v 'eek 
and increase the minimums of our Code."(*) 

Judge Raymond A. Walsh, counsel for the Cotton Garment Code 
Authority, expressed similar views, r s follows: 

"You must realize that you are dealing v, ith a utilitarian 
g rment again, and it is going to a certain class of cit- 
izenship, and these goods "■re the stock of the poorer class 
of merchants, and are to be sold to those "ho can only af- 
ford a few cents to oay for a ->air of -iants. If you can 
take cotton oants from t e Cotton Garment Code it will 
have the most injurious .and disastrous results, as sho^n 
by the lengthy table submitted here; r> n nts have been manu- 
factured in a number of factories where" they "or odu.ee goods 
of a utilitarian workman char cter, Work clothes, "ork 
pants, and so forth. That is "L't those factories special- 
ize in, en^ these ,r 'ork oants are produced merely along with 
the other tyoe of goods so' produced, "nd for the same 
general utilitarian, low cost-, 'low resale value tyne of goods 

"I thin: th; t if you tjI; ce the cotton garment minima on 
pants in 100 wr cent of cottor, or oants chief in content 
of cotton, as you will, and vlr ce n differential, as I 
said, in the Cottor: Garment Code on wool w nts and on wool 
mixtures, th? t will settle that situ; tion. Then, as I 
said, you can take un the hours under the orovisions of 
the Code ■ 

ir ' T e asked the clothing manufacturers to assist us in 
fighting convict labor five years ago. I think Mr. Punter 
will testify th; t they never contributed five cents to the 
camoaign, and they showed absolutely no interest in it, 
because they did not feel this great competition from the 
cotton clothing, they did not feel the conmetition of these 
thousands and hundreds of -thousands of dozens of oants that. 



(*) Transcript of Hearing on Cotton Garment Industry, Nov. 2R, 1933, 

Pages 212 and 213. 
97R2 



-357- 

h ■ vc been dumped on the market ~'or the last twenty-five 
years. They did not feel that • ny more from the convict 
labor, thin they have felt it from the work in our plants." 

Deputy Administrator Gitchell closed the hearing with the follow- 
ing statement: 

"The Question to be settled is involved and difficult, 
and there Questions will receive our best and most earnest 
and careful consideration. 

m "e would be extremely grateful, and I believe the indus- 
tries win be better served, if it were still oossible for 
those representing the clothing industry and the pro- 
ponents of the Cotton Garment Code to find it -oossible to 
get together and recommend a solution which they believed 
would enable the industries to operate to the best rdvnntage 
for themselves and their employees find the consumers whom 
they are serving. 

"If you do not get together in that manner, of course the 
duty is then upon the Administr tor to make a decision 
which can not, I believe, be ■" r wise :i s th' t which you are 
capable of making by negotiation, conference and agreement 
for yourselves. "( *) 

III. Changes in the Two Codes as Approved on December 1R, 1933. 

All these public he' rings and subseouent conferences between the 
various groups failed to produce any agreements satisfactory to the 
Code Authorities and the manufacturers of these disputed articles. 
It therefore devolved upon the Administration to inaugurate the 
changes in definitions pnd w?.ge and hour provisions which would appear 
to offer the most satisf ictory immec i te relief to the very tense 
c ompe t itive s i tua t i on . 

G-ener; 1 Johnson's letter of transmittal to the President, dated 
December 1-;, 1933, gives a, very complete picture of the controversy 
and the various phases of it up to that time. 

A. lien's Clothing Code Definitions and Wages. 

The Men's Clothing Code was changed as follows: 

Article I. (Definition), which read: "The term 'Clothing Indus- 
try' as used herein, is defined to mean the manufacture of men's, boys' 
and children's clothing, uniforms, single knee pants, single p : nts , 
and men's summer clothing (exclusive of cotton wash suits}," was 
amended so that the expression "single pants, men's summer clothing 
(exclusive of cotton wash suits)" wrs changed to read: "single pants 



(*) Tr-nscri-nt of Hearing on Cotton 5j rment Industry, November 28, 
1933, Page 226. 

9732 



."358- 

(rxcrnt wor< n->nts or single pants v hen w de in work-clothing factor- 
ies) and men's summer clothing (except men's wash suits of 100 '"■ cotton 
content, when mft.de in work-clothing factories in conjunction' with work 
clothing) . " 

The second paragraph of Article IT, which re- f' as follows: 
"The minimum wage paid by employers to employees working 'on single 
knee pants shall be at the r te of thirty-seven cents (374) ner hour," 
was deleted, and in its place ,5r s inserted.: "The minimum wage naid 
by employers to emoloyees working on single knee pants and/or single 
pants shall be at the rate of thirty-four cents (344) ne^ hour when 
employed in the southern section of the industry, and thirty-seven 
cents (37(0 tier hour when employed in the northern section of the in- 
dustry. " 

The following wording w; s < dded ; s the third naragranh: 

"The minimum wage paid by employers to employees working on 
men's wash suits of one hundred ner cent (i.00i) cotton 
content, shall be at the r te of thirty-four cents (344) 
per hour in the southern section of the industry rnd thirty- 
seven cents (374) -per hour in the northern section of the 
industry; the minimum wage naid 'oy employers to emnloyees 
working on men's summer clothing (other th; n men's wash 
suits of one hundred ner cent ( lOCyt) cotton content) shall 
be at the r- te of thirty-seven cents (374) ner hour in the 
southern section of the industry, and forty cents (404) 
ner hour in the northern section of the industry." 

At the end of paragraph (a) of Article II, which read ' s follows: 

"(< r ) On and after the effective date, the minimum wage 
which shall oe naid to cutters shall De ' t the. r' ; te of One 
Dollar (Al.G'v ner hour, ' 3 nd the minimum wage which shall be 
naid to off-r>res c ers sha.ll be at the r te of seventy-five 
cents (754) r>er hour," 

was added the following expression: 

"except that in the southern section of the industry the 
minimuTi wage which sha.ll be paid to cutters of r, ll men's 
wash suits and/or summer clothing shall be at the rate of 
eighty-five cents (354) ner hour, and the minimum wage which 
shrill be naid to off-pressers of such garments shall be at 
the rate of sixty cents (604) ner hour." 

3.. Cotton G- rment Code Definitions and '"'ages. 

The Cotton Garment- Code was changed as follows: 

before Article II was amended, Section A, Subsections 10 and" 14 
read: "(10) Lien's and Boys' Puts in chief content of cotton," and 
"(14) lien's cotton wash suits." As amended, tnese subsections were 
made to read: "(10) lien's and Boys' pants, when made in work-cloth- 

9782 



-359- 

ing factories, and ''(14; Men's wash suits of VW- cotton content, when 
m-dc in work-clot, .ing f; ctories in conjunction with -or): clothing.' 1 

C . Conditions in the Or^cr of AttovI. 

"1. it no mamif." cturing employee eng ge<^ in the production 
of men's rash suit? of one hundred Der cent (l'~o') cotton 
content Find /or men's r.nd boys' writs -hen cither of the fore- 
going is ran.de in work clothing f- ctories in conjunction with 
work clothing o^ ^ork pants, shall be -oriel Ft less than the 
rate- of" thirty-four cents (3<A) per hour in the southern 
section of the industry, or less than thirty-seven cents (37#) 
^er hour in the northern section of the industry. 

"2. It is hereby orders that an Inter-Code committee of 
seven (7) T>»rsons shall be axroointed by the Administrator, 
three (3) of whom shall be chosen from the Cotton Garment 
Industry, with the advice of' the chairman of its Code Auth- 
ority, and three (?) of "'ho .1 shall be chosen from the hen's 
Clothing Industry, with the advice of the chairman of its 
Code authority, and the seventh (7th) aember shall be chair- 
man of the said committee. The com.iittee is hereby ; uth- 
orized to administer and supervise enforcement in respect 
of cotton to sh suits ; n ; /or single prnts. The said com- 
mittee, any, on its own initiative, or unon reference by 
either Code Authority concerned, recommend to the Administra- 
tor, changes in maximum hours or differentials or changes 
in the mini nun wage to be p; i -1 e..icloyees engaged in the 
production of single writs pnd/or cotton wash suits, and 
issue interpretations of this order with rescect to such gar- 
ments. All ouestions "rising from 1 the operation of this 
Order shall be referr* to the Inter-Code Committee for 
determination. Interpretations or determinations ma.de by 
the s? id committee she'll be subject to an armeal to the 
Administrator. 

''On or before -June 30, 1934, the Inter-Code Committee 
shall report to the t'-o Code Authorities concerned, r.n(t 

to the Administrator, as to whether these provisions 
should be changed or modified by the Administrator. 

"Tlie Administrator shall arrange with the t ; -'o Code Au- 
thorities for an eoui.table basis of contribution to cover 
the necessary expenditures for administration by the Inter- 
Code Committee. "(*) 



(*) Executive Order approving Amendment ho. °. to hen's Clothing Code 
and Amendment So.- 1 to the Cotton Garment Code, drted December l°>, 
193". Page "■ of printed copy of amendments. 



9782 



CHaF TER IV 
THE INTER-CODE COMITTEE 



1. Appointment of the Committee. 

Fursuant to the conditions of the Amendment, December 18, 1933, re- 
vising the Cotton Garment and Men's Clothing Codes, the Inter-Code Com- 
mittee was officially appointed thiough the issuance of Order No. 118-10 
and 15-5, dated January 5, 1S34. 

In order to make it possible for the Committee to begin functioning 
at once, temporary appointments' were made vrith Mr. G-itchell as Government 
representative and chairman. This Committee included seven members, three 
of whom wore selected from the Cotton Garment Industry, three from the 
Men' s Clothing Industry, and the seventh a Government representative who 
was made Chairman, and met first on January 5, 1934. 

The following temporary appointments were made: 

Oscar Berman, of the Crown Overall Company, 

Cincinnati, Ohio 

Representing the Cotton Garment Industry 

Ralph Hunter, of Kail, Eartwell & Company, 

Troy, New ir -,rk 

Representing the Cotton Garment. Industry 

Victor Rafkin, of Rafkin Brothers, 

New York, N. Y. 

Representing the Men's Clothing Industry 

Elmer Ward, of Goodall Company, 

New York, N. Y. 

Representing the Men's Clothing Industry 

I. Welrich, of the New York Knee Fants Company, . 

New York, N. Y. 

Representing the Men's Clothing Industry. 

B. H. Gitcnoll, Deputy alministrntor , 
to act as Cnairman 

Lester Rosenbaum, of the Kalamazoo rants Company, 

Kalamazoo, Michigan 

Representing the Cotton Garment Industry 

Because of the necessity for a sub-committee and the need of further 
representation of the manufacturers of wash suits, there were certain 
changes in the Con-mi ttee, and this new Committee begem to function as 
early as January 18, l.)34. On February 5, 1934, entire new personnel 
was officially appointed on 'the Inter-Code Committee, with Mr. Godfrey 
Bloch as Chairman to succeed Mr. Gitchell. The following men were appoin- 
ted on this new Committee: 



9782 



-361- 



J. 0. Fly, of the Fly Manufacturing Company, 
Shelbyville, Tennessee, 

representing the Cotton Garment Industry, 
to succeed Lester Rosenbaum 

S. C. Van Winkle, of Sweet-Orr & Company, 
New York City, 

representing the Cotton Garment Industry, 
to succeed Oscar Berman 

R. Smith Payne, 

representing the Cotton Garment Industry, 

to succeed Ralph Hunter 

Morris Green berg, 

representing the Men's Clothing Industry, 

to succeed Victor Rafkin 

Godfrey Bloch, as Chairman, 
to succeed B. H. Gitchell 

II. Recommendations of the Committee. 

The findings of these committees are briefly stated in the following 
two documents: 

"Memorandum "January 18, 1934. 

"After the adjournment of the Inter-Code Committee on 
Pants and Men's Wash Suits, it was thought best to call 
a special smaller Committee to handle the Men's Wash Suits. 
The reason for this being that there was only one of the 
Committee who was vitally interested in the question of 
Wash Suits, namely, Mr. Ward of the Men's Clothing Code 
Authority. Therefore, the Chairman of the Cotton Garment 
Code Authority was requested to have one or two men from 
the Men's Wash Suit and Work Suit Industry to meet with 
Mr. Ward in the Administrator's office on January 15, 1934. 

"Mr. Rosenblcom of Baltimore, and Mr. Urban of Terre Haute, 
Indiana, met with Assistant Deputy Administrator Fayne and 
Mr. Ward for the meeting. 

"In the interim between January 5 and 15, our experience 
in the Administrator's office had taught us that a smaller 
committee might be able to function better as an Inter-Code 
Committee on Pants so a thought was advanced that a Committee 
of Mr. Godfrey Bloch, Mr. Greenberg and Mr. Payne might be 
able to work faster in bringing the matter to a conclusion. 
However, the technique of substituting this Committee was 
so ramified that it was thought best to request the Cotton 
Garment Code Authority and the Men's Clotning Code Authority 
to reduce their representation by one man and substituting 
Mr. Greenberg on the Men's Clothing Code Authority and Mr. 



9782 



-3S2-- 

Payne on the Cotton Garment Codo Authority to assist 
Mr. Wooirich and Mr. Ward and Mr. Van Winkle and Mr. 
Fly who had replaced Mr. Rosenbaum and Mr. Berman on 
the original Committee. 

"Mr. Bloch took the chair in ylace of Mr. Gitchell 
and will act as Chairman. 

"To date the Committee as above outlined has, called a 
meeting for Monday- January 22, 1934, at 2 p.m. in 
room 1370, 14^0 Bioadway, New York City. 

"Mr. Bloch and Mr. Oreenberg and Mr. -Payne will, in 
the meantime, gather all data pertaining to the question 
involved and present their findings at this meeting in 
hopes that a satisfactory conclusion mr.y be reached. 

R. S. Payne" (*) 

A . Report of Meetings and Votes on ? ibric Classification 

"This report is to cover inter-Code questions with respect to pants 
as related to the Code of the Cotton Garment Industry and the Men'.s 
Clothing Code. 

"Under Executive Order a"P7 roved December 18, 1933, the Inter-Code 
Committee was established 'to administer and supervise enforcement in 
respect of cotton wash suits and/or single pants'. Under the Order 'all 
questions arising from the operation cf the Order shall be referred to 
the ■ Inter-Code Committee for determination'. 

"Under its duties the Committee convened January 5, 1934, to classify 
pants under the Order. 

"The Administrator's letter transmitting the above order refers to 
the conclusion cf the Administrator in part as follows: 

' 1. Work pants as included in Sub-division 1; 
Paragraph A, of Article II, covers a field 
of merchandise not ir competition. with the 
Men's Clothing Industry, and can te... defined 
for the purposes of administration. 

'2. There are linen of one hundred per cent (100%) 
cotton trousers manufactured in work clothing 
factories which are used in substantial quantities 
for sport and dress occasions and do constitute an 
important fpctor of competition with trousers now 
made as a part of the ken's Clothing Industry. 
Manufacturers shoi^ld be allowed to continue raanu- 
facture under both Codes, with an increased mini- 
mum in the Cotton Garment Code which will, in effect, 
operate to reduce the difference in minima between 
the tv.o Codes. ' 

(*) Memorandum re Inter-Code Committee on Pants and Men's Wash Suits, 
1/15/34 meeting, signed by R. S. Payne, dated January 18, 1934. (Cotton 
Garment Code Piles.) 
9782 



-363- 

"It was held to "be the function of the Committee to classify single 
pants as far as .passible between 'work pants, not in competition with 
the Men's Clothing Industry' and 'cotton trousers used in substantial 
quantities for sport and dress occasions which do constitute an import- 
ant factor of competition with trousers made as part of the Men's Cloth- 
ing Industry' , in order that a condition approaching as far as possible 
to fair competition be established. 

"The problem of classifying was approached primarily from the 
standpoint of fabric and the vote taken on January 5, 1934, is recorded 
herewith* 

"On January 22, 23, 24, 1934 a committee consisting of the follow- 
ing newly appointed personnel met: Mr. Hafkin, Mr. Wolrich, Mr. Ward, 
Mr. Van Winkle, Mr. Fly, Mr. Fayne, Mr. Bloch, and balloted at inter- 
vals on each of three days. The conclusions of that Committee with 
respect to classification are set forth as follows: 

"Fants made under the Cotton Garment Code work clothing provisions 
shall be confined to cloths made entirely from carded all cotton yarns 
without silk, rayon or mercerized yarn decorations. All cloths classi- 
fied as eligible are so classified with the above limitation. 

"The following were unanimously voted as eligible for classification 
a s work clothing for 30-32^- cents rate both at the final meeting and 
previously: 

Denims, plain or printed or woven (including those known as 

Hickory or express stripes) 

Moleskins 

Fin checks 

Carded Seersuckers 

Coverts 

Cottonades, but excluding goods known in the trade as 

cotton worsted 

Fiece-Dyed Twills, Drills and Ducks (excepting bleached whites) 

Corduroys, drab, seal and navy blue. 

"At the final meeting it was voted that the following be made only 
at the rate of 34 cents in the South, and 37 cents per hour in the North. 
Bleached goods with colored yarn, woven stripe, vote five to one; goods 
bleached and printed, vote four to two. 

"The vote was evenly divided three to three on the following items 
but unanimous consent was given that the chairman could cast his deciding 
vote subsequently and so announce at the conclusion of the Committee. 

Bleached white drills, twills, ducks, and Carded Cotton Whipcord 

Corduroys, other than drabs, seal, brown and navy blue. 

"Inasmuch as the Committee of January 5, unanimously voted that all 
of the other snades of corduroy should be put in the 34-37 cents per 
hour category, the chairman's vote is cast to reaffirm what previously 
had been agreed upon. 

9782 



-364- 

11 With respect to the other two items, the chairman's vote is cast 
to put these goods in the 30-32i- cents per hour class. 

"Ho other clothes' were requested by any other committeemen to be 
classed in the 30-32^ cents category it being understood that all cloths 
not mentioned were to be put in the 34-37 cents category." (*) 

III The Men's Wash Suit Froblem. 

A. Protest of New Orleans Firms . 

While the Inter-Code Coinittee devoted practically all of their 
efforts to the pants problem, this wash suit altercation was handled by 
the Administration in a different way. Immediately after the publication 
of the Executive Order of December 18, 1933, the New Orleans group, the 
Men's Wash Suit Manufacturers Association, sent to General Johnson, under 
date of December 27, 1933, a letter of protest and request for a stay of 
this Order, the principal arguments of which were as follows: 

^Protest of Men's Wash Suit Manufacturers National 
Association against Executive Order of December 18, 
1933, and Request for a Stay of its Application. 

Members— Haspel Brothers, Inc. ) 
Godchaux Clothing Co , ) 

Famous-Sternberg Co. ) New Orleans, La. 
Hirsch & Baar ) 
A. Solomon ) 

"This Association manufacturers the great bulk of men's 
cotton wash suits produced in this country, and protests 
against this Order transferring the manufacture of men's 
cotton wash suits, when made by clothing manufacturers, 
to the Men's Clothing Code. 

"It compels them to pay minimum wages of 85^ per hour 
for cutters and SOrf for of f-pressers, as against a mini- 
mum wage of 34rf, without distinction as to the classes 
of labor for manufacturers of cotton wash suits when 
made in work clothing factories — same services must be 
performed — and same class of labor used. These manufactu- 
rers will pay 51(# per hour minimum, more for cutters, and 
26^ more for off-pressers than their direct competitors 
manufacturing an identical garment under the Cotton Gar- 
ment Code. Cotton Garment Code has 40 hour week, vs. 36 
hour; 30<# per hour minimum vs. $13.00 per week; learners 
vs. no learners allowed; 10$ inefficients with no minimum 
vs. 5$ inefficients with 70$ minimum. 



(*) Memorandum dated January 30, 1934, to Byres H. Gitchell, Deputy 
Administrator, from Godfrey Bloch, Special Administrator. 
(Cotton Garment Code files.) 



9782 



-365- 



This distinction is based, not on the article itself nor 
conditions and methods surrounding its manufacture, but 
on the fact that something else is manufactured under the 
same roof, and these manufacturers are discriminated 
against because they make the manufacture of these gar- 
ments their principal rather than their partial activity. 

Claims that the New Orleans group never agreed to (letter of 
transmittal mentions agreement between New Orleans manufactu- 
rers and Men's Clothing Code Authority) any such distinction 
as is made in this Order. Asks for an immediate stay. (*) 

Then, 1 on January 11, 1934, in the following letter, this Asso- 
ciation requested another hearing on this question: 

"Hon. Hugh S. Johnson 
N.R.A. Administrator 
Washington, D. C. 

' "Dear Sir: 

" Request for hearing by Men s Wash Suit Manufacturers 
National Association under terms of the Executive Orde r 
of July 15, 1935 . 

"On benalf of the above Association we respectfully re- 
quest a hearing on the Executive Order of December 18, 
1933, transferring manufacturers of men's cotton wash 
suits not engaged in the manufacture of work clothing 
tc the fen's Clothing Code, and leaving manufacturers 
of such clothing who also manufacture work clothing 
subject to the Cotton Garment Code. 

"It is respectfully submitted that this Association nor 
its representatives neither participated in the establish- 
ment of -or consented to the Executive Order involved. 

"The record clearly shows that the Executive Order pro- 
posed upon which notice was given and hearings held on 
November 27, 1933, contemplated the transfer of all 
manufacturers of cotton wash suits to the jurisdiction 
of the Men's Clothing Code (?.. Page 2, 3, 6, 9, 44, 53, 
and 54). No notice was given then nor thereafter prior 
to the actual signing of the Executive Order of December 
18, 1933, of any proposal to divide the manufacturers 
of cotton wash suits into two groups with different 
standards set up for the manufacture of identical gar- 
ments manufactured by the same methods and in direct 
competition with each other. Of such competition, General 
Johnson in his report on the Cotton Garment Code (Page VII) 
makes the following observation. 



(*) Letter dated December 27, 1933, from Men's Wash Suit Manufacturers 
National Association to General Johnson. 

9782 



-366- 



11 'Manifestly also* employers could not "be expected to 
continue under the Men's Clothing Code, if other employers 
in direct competition and producing the -same articles 
were permitted to operate under a code which was more fav- 
orable to them. That would he unfair competition of a most 
vicious character.' 

"If the competition there referred to "by General Johnson 
may be characterized as 'vicious 1 , 'what may not with pro- 
priety be said with reference to the unfair competition 
created by this Executive Order? 

"We attach herewith as a Part of this request for a hear- 
ing, copy of our protest filed with you under date of 
December 27, 1933, which sets forth in detail the discrim- 
inatory conditions created by the Executive Order involved. 

"The extent of the unfair competition ,-, hich our manufacturers 
would be compelled to face from manufacturers of cotton wash 
suits under the Cotton Garment Code is indicated by the state- 
ment of Mr. Hunter of the I.A.u.M. (R.Page 14) wherein he 
estimates that mr-nuf acturers of work clothing produce at least 
$1,000,000 worth of cotton wash suits in the last year. The 
garments chiefly invovled ara seersucker suits and they are 
so identical that it is impossible for even the trained eye 
to determine whether or not a particular garment has been 
manufactured in a work clothing shop or a shop engaged ex- 
clusively in the manufacture of men's wash suits. Naturally,, 
all such suits corns in direct competition with each other. 
If granted a hearing we offer to prove that the Executive 
Order of December 18, 1933, is grossly unjust and prejudicial , 
to the manufacturers composing this Association in requiring 
of them higher standards in the manufacture of an identical 
garment than is provided for their direct competitors in the 
Cotton Garment Code. We have been advised that unless our 
manufacturers can be relieved from- this situation it will be 
necessary for them to shut down their plants, thus causing 
large losses of invested capital and unemployment to approxi- 
mately 2,000 employees. 

"Very respectfully yours, 
(signed) "J. Bruce Kremer 

"Guilford S. Jameson 
"Attorneys for Men's Wash Suit Mfrs. Nat'l Ass'n 
"Kaspel Brothers, Inc. 
"Godchaux Clothing Co. 
"Famous-Sternberg Co. 
"Hirsch 8c Baar 
"A. Solomon" 



(*) Letter dated January 11, 1934, from Men's Wash Suit Manufacturers 
National Association to Gen. Hugh S. Johnson. (Cotton Garment Files, 
under Code Amendment ifl.) 

9782 



-367- 

3. Investigation by Deputy Administrator Morris Greenbcr- . 

As • result of numerous conferences ana negotiations between 
the Atiuinistration, the Lien's Clothing Code Authority, and the peti- 
tioners immediately subsequent to the receipt of these letter-,, it v;as 
i.ecided that an investigation of these plants and their particular 

ble.ns was desirable, and Special Deputy Administrator Morris Green- 
ber was sent to Few Orleans for that purpose. After nearly a reek, 
uty Greenuerg arraj ed a satisfactory solution, and the following 
ent was drawn up on January 23, 1934, and signed by this her 
Orl. ,>:. 

"Roosevelt Hotel, 
i i w Orleans, La. 

"Dear Major Gitchell: 

"I am enclosing two (3) signee copies of the Agreement I 
finrlly reached here, to ;ct i r with , a signed copy of a. 
covering letter. 

"As you rill see, these papers definitely bind these parties 
as soon as you anc the Code Authority sign the Agreement. 
'•ill you please arrange to have one- of these copies signed 
,^y yourself and Mr. 3cil, and return it to Mr. Edward Has- 
t L, 912 Union Bldg. , Few Orleans. 

"Before I finrlly agreed to the 30p* and the form of this 
Agreement, and the method of signing etc. - I took the 
liberty of phoning Mr. Drechsler, and this has his approval. 

"This was finrlly completed at about 11:30 tonight — too 
late to catch the 10: IE train to Dallas, so I go 7 oy plane to- 
morrow and will be in Dallas by Tuesday P.M. 

"I ho v this solution of th ITow Orleans situation meets 
with your approval. I think it is fair and meets the 
si tuation. 

"With kindest personal regards, 

"Morris Greenberg"(*) 

C. ATree-.c-rcs with hev: Orleans Firms. 



(*) Letter undatci , in Men's Clot] In Code Files, under Employ- 
ment, Wages and hour Exemptions) ' aux Clothing, Haspel 
Brothers, Sternberg, Etc. 



>732 



-368- 



m-_t CV7 Orleans, Louisiana 
January 22, 1934. 

"The Code Authority, 
Lien's Clothing Industry, 
Pew York City. 

"Gentlemen: 

"V.'c arc enclosing herewith the tentative agreement entered 
into between Mr. Morris Greenberg, Assistant to the Deputy 
Administrator, and ourselves in reference to interpretations 
and exceptions to the Men's Clothing Code as applicable to 
ourselves, 

"V/'c agree to the terms hereof, and they shall be in full 
ti'i cct and binding upon us when and as soon as they have 
''occn approved by you and the Deputy Administrator, Mr. 
Gitchcll, and we have received notification thereof. 

"Yours very truly, 

GODCIIAUX CLOTHING COPPANY, LTD. 

B y (Si .ricd) LLON GODCHAUX, PELS. 

IIASPLLBi.OTlL.HS, INC. 

B y (Sp-ned) JOS. HASPLL, PPBSIDLPT 



FAi.ru S-STLHB13LHG, IPC. 

B y (Si-ncd) JLS PL, S. POSF/PFELD, TLZAS . 

ETIBSCH & BAKR ' 

P y (Signed) PAUL IIIPSCH 

(Signed) A. SOLOMON "(*) 

"•• LP.SAS the parties hereinafter named have filed a 
protest against the placing of wash suits of one hundred 
(lOGp) per cent cotton content in the Men' s Clothing Code 
and have otherwise protested against the inclusion of any 
wash suits in the Men's Clothing Code, and 

"'v/HLHEAS it now appears that there is a solution of the 
problem that will io substantial justice to all parties 
without working hardship or discrimination against any, 

"POY; THEREFORE the undersigned: 

LLOP GODCHAUX CLOTHING COMPANY, LTD. , 

PA3PEL BROTHERS, IPC. , 

FAMOUS- STERNBERG, IPC. , 

IIIPSCH d BARE, p partnership, and 

A. SOLOMON, 



(*) Letter dated January 22, 1934, in Pen's Clothing Code Files, under 
Employment, '.ir es and Hour Exemptions, Godchaux Clothing, Haspel Bros., 
Sternberg, Ptc, 



S78J 



-369- 

all of Hew Orleans, Louisiana, and hereinafter designated 
. lUfacturers, and 3yres H. G-itcholl, representing th 
dnistratpr of the National Recovery Administration, and 
George Bell, representing the Code Authority for the Men's 
Clothing Industr; , -\ agreed and do hereby agree to the 
follovin ■ int t< Lions and exceptions to the Men's Clo- 

thing Code and > in rid i< its and regulations in connection 
rewith as applying to the said Manufacturers hereinabove 
led.-, to-wit: 

"(a) . During the re ular operating season the s-^ic 1 manu- 

cturers will be permitted to opera.te four (*-) hours over- 
timi .■ . k at normal rates. 

"(b) All ",7agcs, ar set forth in the Men's Clothing Code 
ts tl.tr_.tc, shall be maintained. 

"(c) Clause II (b) is held not to apply to said manu- 
f ct re rs. 

"(d) Each manufacturer is allpwcd to employ sub-standard 
help rs provided under Article II, Section G, of the Lien's 
Clot: ;ing Code, as amended, up to thirty (30^) per cent' of 
its employees, including sub- standard cutters and pros- 
scr _. 

"(b) Each of said manufacturers shall file its list of sub- 

r< ..../: oyee.s with the Code Authority, or the proper 
subdivision- thereof , ant it shall be revised semi-monthly 
~oy the withdrawal of some names and the inclusion of others. 

"(f) In view of the confusion that might result from the 

loyment of certain employees a portion of the time on 
linin and at other .times on cotton, and in order to pro- 
vide for s uniform minimum for ail employees, each manu- 
facturer shall arrive at a proportional intermediate mini- 
mum :>n the basis' of the proportion of cotton versus linen 
actually manufactured according to its records fur the 
i vious year, which said minimum so determined shall be 
b aimed until ruch time as the said manufacturer is 
able to determine accurately that the proportion existing 
for t - • rvious year "/ill n«.t be applicable to the 

ar, at which tine the said minimum shall be ad- 
--d in rccorwi-c. with the information so obtained. 

In : i ting - 11 payrolls to the Code Authority special 
mention shall be mace of the intermediate minimum used. 

"This: agreement shall be \indin;? and effective immediately 
upon the signing hereof . , L] artioc, ant ; ' certificate 
of compliance will be signed ane til .. ane Labels as pro- 
vided by Article V of the Hen's Clot: i ■ ' will be furn- 



b?82 



-370- 



ished to said Manufacturers for all merchandise thereto- 
fore manufactured and presently held in stock by said 
manufacturers. 

"LEON GODCHAUX CLOTHING COMPANY, LTD. 

By (Signed) Leon Godchaux, Jr., Pres . 
"HASFEL BROTHERS, INC. - 

By (Signed) Jos. Haspel, Pres. 

"FAMOUS-STERNBEPG, INC. 

By (Signed) Jesse S. P.osenfeld, Trea s . 
11 HI PS CH & BAPR 

By (Signed) Paul Hirsch 

A. Solomon 



(Signed) A. SOLOMON 

M. GREENBEPG" 

Apparently the "en's Clothing Code Authority never actually signed 
a copy of this agreement, hut in the following letter dated February 
3, 1934, from Executive Director George L. Bell to Leon Godchaux, they 
did confirm all articles of said agreement, except the one respecting 
overtime. 

On February 2, 1934, Deputy Administrator Gitchell wrote the 
following letter to Mr, Edward Haspel, advising him to reouest this 
overtime frcm the Administration: 

"This will confirm our conversation today in conference 
between yourself, Mr. Leon Godchaux, Mr, George Bell, 
Mr. Morris Greenberg, and the writer in respect to over- 
time for the New Orleans manufacturers whom vou represent, 

"If you will submit an application in proper form, and 
the same meets with the approval of Mr. Bell as Director 
for the Men's Clothing Code Authority, I '"ill be very 
glad to recommend an administrative order be issued 
by the National Recovery Administration allowing 
overtime four (4) hours per week at regular rates 
of compensation. This assurance based upon investi- 
gation made by Mr. Morris Greenberg on the ground. 

"This Administrative Order vou unoerstand, requires 
approval as to form and content by the Legal Divi- 
sion and Advisory Boards. I know of no reason why 
we snould expect a refusal by the administration to 
act favorablv on this recommendation." (*) 



(*) Letter dated February 2, 1934, from Byres Gitchell to Edward Haspel. 
(Men's Clothing Code Files, under Employment, l.ages and Hours 
Exemptions, Godchaux Clothing Co., Haspel Bros., Etc,) 



9782 



-371- 

The letter iron George L. Jell, Executive Director, Lien's 
Clothin; Code Authority, to Leon GodchauX, mentioned above, is 
as follows: 

"Mr. Morris Grc* nber ■;, an assistant to B. H. Gitchell, 

I by Administrator of the 1J.R.A. , was sent to New 
Orleans to make an investigation in behalf of our Code 
A thority and Mr. Gitchell, of the shops of 

Leon Got chaux Clothing Company, Ltd. 

Kaspcl Brothers, Inc. 

?;..im-.s- S t ernb er % , I nc. 

Hirsch & Barr, a partnership, anei 

A. Solomon 

"Mr. Greene, r: has made a brief written report, and on 
his return from Hew Orleans made a lengthy oral report 
of his findings. 

"Based on Mr. Greenberg' s findings, and his recommenda- 
tions, the Code Authority has determined that in.- all 
the different shops the provisions of Article. II, para- 
graph (b) have ban substantially complied with. This 
will serve as confirmation of my oral statement to you, 
that tliis action has been taken in accordance -with the, 
)rovisibn contained in Article II, paragraph (cl). 

"Mr. Greenbcr : also made an investigation in connection 
with your application to employ in excess of five per 
cent (5p) of excepted persons, under the i^rovisions of 
Amendment fl to the Code of Fair Competition for the 
Men 1 a Clothing Industry, as set forth, in clause ( d) of 
seid. Amendment, adding a new paragraph (g) to Article 

II of said Code. The Code Authority, acting upon the 
findings and recommendations of Mr. Greenberg, has 
ruled that the above shops shall be allowed to employ 
such excepted persons to a number not to exceed; thirty 
per cent (3C .) of the total number of employees in each 
of the respective shops or plants named above. 

"Also acting upon Mr. Greenberg 1 s findings and recom- 
mendations, the Code Authority has determined that your 
proposed method of fixing the minimum rates of pay for 

Losses who are working a portion of their time on 
lir , i ' Dther times on cotton, is fair and equitable, 
ate from the statement signed by the various firms 
the following section of this method: 

iit**j_ n prefer to provide for a uniform mini- 
mum for all employees, each manufacturer shall 
arrive at a proportional intermediate mini- 
' mum "on the- -basis of the" proportion of cotton 
V' reus linen actually maiiufact) rcrd • ccording. 
to its records for t te revicus year, which 



1782 



-372- 

said minimum so determined shall be main- 
tained until such time as the said manu- 
facturer is able to determine accurately 
that the proportion existing for the previous 
year will not be applicable to the current 
year, at which tine the said minimum shall 
be adjusted in accordance with the -infor- 
mation so obtained. In - submitting all pry- 
rolls to the Code Authority special men- 
tion shall be made of the intermediate mini- 
mum used. ' 

"171 th respect to your petition for permission to operate 
an extra four hours overtime per -week, this cannot be acted 
upon hy our Code Authority, as no provision is made in the 
Code giving the Code Authority such powers. Any relief on 
this matter must be secured by an administrative order 
from the IT.R.A. 

"Of course, it is our understanding that all the firms named 
above intend to sign certificates of compliance and observe 
all requirements of the Oode of Pair Competition . for the 
Men's Clothing Industry. Upon signing such certificates. 
of compliance, all firms will be entitled to labels as pro- 
vided in Article V of the Code, and we understand that all 
garments heretofore manufactured and presently held in 
stock by the above firms will be labeled, as well as 
garments manufactured in the future. "( *) 

On February 3, 1934, Mr. Bell wrote the following letter to 
Deputy Administrator Gitchell, giving the Code Authority's approval 
t# this requested overtime, if the H.R.A. saw fit to allow it: 

"Confirming our conversation yesterday, I wish to state that 
the Code Authority has determined that it has -no power to 
grant to the petitioned Men's Clothing Manufacturers of 
Hew Orleans, Louisiana, the j^rivilege of working any extra 
number of hours per week. The powers granted to our Code 
Authority under Article IV of our Code to give such permis- 
sion is limited to 'Tailoring to the Trade and 'manufacturers 
of uniforms. ' 'I understand that you. concur with our inter- 
pretation on this point. 

"Accordingly, ony relief granted the petitioners must come 
as a result of the Administrative Order from the 1T.R.A. We 
have no objection to your granting permission to operate 
overtime during a reasonable period, but would strongly 
urge that the amount of such overtime should not exceed 
four hours per week, "(**) 



(*) Letter dated February 3,1934, from George L. Bell, Exec. Director, 
li.CC. A., to Leon Godchaux. (Men's Clothing Code files, under Employ- 
ment, WaSes.and Hours Exemptions, Godchaux Clothing Co. ,Haspel Bros. Etc.) 

(**)Lotter dated February 3, 1934, from George L. Bell, Exec. Director," 
M.C.C.A. , to 3yres H, Gitchell, Deputy Administrator, (Men' s Clothing 
Code files, under Employment, Wages and Hours Exempt ions, Godchaux 
Clothing, Etc. ) 
9782 



-373- 

Undcr date of February 2, 1934, Mr. Edward Haspel, as attorney 
for n Orleans firms, filed the following petition requesting 
their four (4) hours weekly overtime: 

"The under,- led, i s attorney for Loon C-odchaux Clothing 
Company, Limited, Haspel Brothers, Incorporated, Famous - 
Sternberg, Incorporated, Kirsch and Baar, a partnership, 
'-. S 1 ion, hereby submits an application for an al- 
lowance of overtime of four (4) hours per week at regular 
rates of compensation during the regular operating season 
for :' .. following reasons," to wit: 

"1. Should the above named manufacturers operate under 
the Men's Clothing Code, they villi be in competition with 
manufacturers of cotton wash suits operating under the 
Ootton Garment Code providing for r maximum of forty (4C) 
urs per 

"2. Prior to the enactment of the N. I.R. A. , s^id manu- 
facturers were accustomed to operate an average of more 
than fifty- eight ( C3) hours per week, and in ord^r to 

intain production is line with prior years at thirty- 
six (36) hours will have to increp.se the number of ; emplc~. 

s :o a point where, because of a scarcity of labor in 
this particular market, it will be impossible for them 
to obtain sufficient help. 

"3. "here is no unemployment in the industry and no 

iket from" which the above r.-med. manufacturers can draw 
additional help, and the amount of work they presently 
have on hand will Justify your granting then the relief 
requested. 

"In our conference toda.y these, matters were all discussed 
with you, Mr. George Bell, Mr. Morris Greonberg, and Mr. 
Leon Godchaua, when we went into some detail in connection 
with the points hereinabove set forth. 

"I therefore respectfully urge that you recommend an 

inistrative order granting to the above nrmed manu- 
facturers the right to operrte fon.r (4) hours per week 
overtime at regular rates of compensation. "( *) 

D. Drce r "To. 15-8--Hours Exemption to these Mmuf aeturcrs . 

Therefore, on February 23, 1934, the following Administrative 
Order (ho. 15-8) granting this overtim< , wa.s duly approved ^nd signed: 



(*) Letter dated February 2, 1334, to Zy?<-3 11. Gitchell, Deputy Ad- 
ministrator, from Edward Haspel, Attorney. (M n's Clothing Code Files, 
under Employment, Hours and Wages Exempti >ns, Godchrux Clothing Co., 
Haspel Brothers, Itc. ) 



9782 



-374- 

"Excmption from Article IV of the Code of Fair Competition 
for the Hen's Clothing Industry. 



Order No. 15 



"The Code Authority for the Men's Clothing Industry 
having recommended that 

Leon G-odchaux Clothing Company. Ltd. 

Easpel Brothers, Inc. 

I imous- Sternberg, Inc. 

Hirsch & Barr, p. partnership, raid 

A. Solonion, 

all of New Orleans, Louisiana, be allowed four (4) hours 
per week over the weekly limitations set forth in Article 
IV of the Code of Fair Competition for the lien's Clothing 
Industry, at normal rates of pay, and good and sufficient 
cause having been shown therefor, and approval of said 
recommendation of the Code Authority having been given by 
the Deputy: 

"Now, therefore, approval is hereby given of the recom- 
mendation of the Code Authority, and said exemption is 
hereby granted. 

"A. D. Whiteside, 
Division Administrator. 

"February 23, 1954. 

"Approval recommended: 

B. II. Gitchell, 

Deputy Administrator. "(*) 



(*) Ore or No. 15-8, Men's Clothing Code Files. 



9732 



-375- 



CHAPT2P V 

AMENDMENT 110. 3 TO COTTON GAUMENT CODE..MAHCH 15, 1934 

I. Changes in tiie Code as approved March 15, 1934. 

The Executive Order of December 18, 1933, failed to improve to any 
real extent the "age and hour competitive situation on the single pants 
and wash suits, vifhile some companies revised their rates to the specified 
34 cents per hour in the South, and 57 cents per hour in the Worth, many 
of the cotton garment manufacturers failed to make any attempt to comply, 
and continued to produce these garments at the old 30 cents and 32-- cents 
rates. The Industry as a "hole was very much dissatisfied with the Decem- 
ber 18th amendment, and the Cotton Garment Code Authority made only a half- 
hearted gesture to enforce compliance. 

A. De'out' r Ac'Turistr-'toi" Gitcaell' s Letter of Tr: nsnittal . 

In order to speedily improve existing conditions, if possible, and 
r study and consideration of the I nter-C ode' Commit+u:' s investigations 
nnd recommendations, on February 25, 1934, Deputy Administrator Gitchell 
wrote the following letter of transmittal to General Johnson: 

"This report is to cover inter-Code Questions rith respect to 
pants as related to the Code of the Cotton Garment Industry and 
the].; en's Clothing Code. 

"Under the Executive Order approved December 1G, 1933, the 
Inter-Code Committee was established 'to administer and super- 
vise enforcement in respect of cotton trash suits and/or single 
pants.' Under the Order 'all questions arising from the opera- 
tion of the order shall be referred to the Inter-Code Committee 
for determination. 

"Und.er its duties the Committee convened. Januarv 5, 1934, to 
classify pants under the Order. 

"The Administrator's letter transmitting the above order refers 
to the conclusion of the Administrator in 'Dart as follows! 

"'I. TTork Pants as included, in Subdivision 1, Paragraph A, of 
Article II, covers a field of merchandise not in competition 
' ith t l ide; 's Clothing Industry, and can be defined for the 
purposes of administration. 

"*2. There are lines of one hundred ver cent ( 100.1) cotton 
trousers manufactured in work clothing factories, which are 
used in substantial Quantities for sport and d.ress occasions 
and do constitute an important factor of coi petition with 
trousers nov made as a >art of the ...'en'- Clot d i Industry. 

nufacturers should be allowed bo con-tin '• cture under 
both Codes, with an increase:" iiinimuir in the Cotton Garment 
Code which will, in effect, o _ oer< te to reduce the difference 



9782 



-376- 



"It was held to be the function of the Comnittee to classify 
single pants as far as possible between 'work pants, not in 
competition with the Len's Clothing Industry' and 'cotton 
trousers used in substantial Quantities for sport and dress 
occasions which do constitute an imoort.-nt factor of compe- 
tition v/ith trousers made as mart of the i.ien' s Clothing In- 
dustry, * in orcer that a condition ao-oroa.ching as far as 
possible to fair competition be established. 

"The 'iroblem of classifying '"as approached from the stand- 
point of faoric and the vote taken on January 5, 1934, is 
recorded herewith. 

"On Jrnuary 22, 23, 24, 1934, a committee consisting of the 
following newly a-nointed personnel met: i.ir. Rafkin, Mr. 
" 7 olrich, i.'r. ~Tarc! , L~r. VanT/lnkle, L'r. Ill', i- 1 "- Payne, Mr. 
Block, and balloted at intervals on each of the three daj^s. 
The conclusions of that Comnittee with respect to classifi- 
es bion are set forth a.s follows: 

"Pants made under the Cotton Garment Code pork clothing 
provisions shell be confinec to cloths made entirely from 
carded all cotton yarns "'ithout silk, rayon or mercerized 
j^arn decorations and containing no wool fiber. All. cloths 
classified as eligible are so classified '"-ith the above 
limitrtion. 

"The following "ere unanimourly voted as eligible for 
classif icrtion wa work clothing for 30 - 32-;(* rate both 
at the final meeting and "oreviously: 

"Denims, plain or printed or -oven (including those denims 

known as Hickory or express stri;oes) , 

Moleskins, 

Pin Checks, 

Carded Seersuckers, 

Coverts, 

Cottonodes, but excluding goods known in the trade as 

cotton worsteds, 
Piece-Dye<?' Twills, Drills end Ducks ( e.pce'oting bleached 
white--) , 
Corduroys, dark drab, seal bro v n and navy blue. 

"At the final meeting it -as voted that the following be 
made only at the rate of 34rf -oar hour in the South, rnd 37r* 
per hour in the Forth. 31eached goods with colored yarn 
woven stripe, vote five to one; goods bleached and printed, 
vote four to one. 

"The vote was evenl}?- divided three to three on the follow- 
ing items but unanimous consent wa^ given that the chair- 
man could cast his deciding vote subseauently and so an- 
nounce a.s the conclusion of tae Committee. 



9782 



-377- 



" Corduroys, other than dark drcb, seal brown & navy blue, 
31eached white drills, trills, dunks, anc 
Carded Cotton T7hip,eord. 

"Inasmuch as the Co mittee of Jan-oar 7 - 5 unanimously voted 
that rll of th - ..• is of corduroy other then car!: drab, 
seal bro' n and ns • blue i iould oe put in the 34 - 37j# per 
hour category, the chairman's vote i<= cast to reaffirm what 
previousl3' hrd been agreed upor. . 

"TTitn respect to the latter t 1 o items, the chairman's vote 
is cast to -rat these goods in the 30 - 32\d per hour class. 

"ITo other cloths were reouested oj any other committeeman 
to be classed in the 30 - 32 ■/■ category, it being under- 
stood that all cloths not mentioned rere to be put in the 
34 - : "V' category. 

"The -proposed administrative order submitted herewith is 
drafted to a;ive effect go the conclusions of the Committee. 



O 



•Chile the inter— Code -problem involved is very similar to 
thj t between the Cotton Garment and Dress Industries, the 
procedure followed differed, inasmuch as an Inter-Code 
Committee handled this problem, whereas a Special Adminis- 
trj tor handled the other. 

"A" 1 thoujh the inter-Code cress problem was substantially 
solved in some three weeks, the Inter-Code Committee on 

ts and vash suits did not even convene until about 
three weeks after the order, end then only with temporary 
appointees. The necessit T ' of committeemen arranging their 
schedules to travel rreat distances has made the procedure 
cumbersome. Furthermore, the Cotton Garment Code Authority 
at the last co- mittee meeting specifically reauested 
a more specific order and more workable procedure. Accord- 
ingly, it is recommended that the Inter-Code Committee's 
functions be turned over to a. Special Administrator. The 
proposed order is drafted to effect this change also and is 
recommended for 3'our approval." (*) 

3. Dif -"--rent TTr^e Rates for Different Fabrics Arroroved - 

On ;' rch 15, 1934, the following amendment to the Cotton Garment 
Code, Amendment No. 3, "r? officially approved. 

"Schedule 'A' 

"The Executive Order of "ece'iu^r 18, 1933, amending the 
Code of Frir Competition for the Cotton Garment Industry, 
is amended as follows: Conditions i r umh rs 1 and 2 of the 

■ ■ - — — - — — — ■ -■■ ..,■■—...-■ ■ - - .... 

(*) Deputy's Report to the Administrator, d; bed 7ebruary 25, 1934, 
attached to Amendment I'o. 3 to Cotton Garment Code. 

9782 



— o co- 



said Order are abrogated", and the following substituted 
refor: 

"1. l T o manufacturing employee engaged in the production 
of men's and boys' pants when mace of (a) corduroy, other 
then those shades set forth below, or (b) cloths other 
than those set forth below, whether or not made in work 
clothing factories, shall be paid at less than the rate of 
thirty-four cents (34rf) per hour in the southern section 
of the Industry, or less than thirty-seven cents (37^) per 
hour in the northern section of the Industry, as such sec- 
tions are defined in the Cotton Garment Code and amendments 
thereto. 

"Ho manufacturing employee engaged in the production of 
men's and boys' pants made in work clothing factories in 
conjunction with work clothing or work pants, when made of 
100$ cotton content and when made entirel"' from carded 
cotton yarns without synthetic yarn, silk or mercerized 
yarn decoration, and when such pants are made of (3) denims, 
plain or printed or woven, including those denims known 
as Hickory or express stripes, or (b) moleskins, or (c) pin 
checks, or (d) carded seersuckers, or (e) coverts, or (f) 
plain dyed or bleached ducks, twills or drills, or (g) 
cottonades, exce-ot cotton worsteds, or (h) dark drab, seal 
brown or navy blue corduroys, or (i) heavy carded cotton 
vrtiipcords, shall be paid less than at the rate of thirty 
cents (30<0 wr hour in the southern section of the Indus- 
try, or less than thirty-two and one-half cents (32V) P er 
hour in the northern section of the Industry, as such 
sections are defined in the Cotton Garment Code and amend- 
ments thereto, " 

C. S'oecir.l Administrator Succeeding; Inter-Code Committee . 

"2. The Inter-Code Committee provided for in Condition 
Number 2 of the Executive Order of December 18, 1933, 
amending the Cotton Garment Code, is hereby terminated and 
all powers and duties delegated to the Committee in said 
Condition are herebjr transferred to the Special Administra- 
tor hereinafter provided. It is hereby ordered that a 
Soecial Administrator shall be designated to serve until 
July 1, 1934, who shall administer and supervise enforce- 
ment in respect of cotton wash suits of 100$ cotton content 
and/or single pants, shall determine all ouestions in respect 
of the appropriate minimum wage to be paid by any member of 
the Industry pursuant to this Order, shall make interpre- 
tations of the provisions of this Order, shall have the power 
to add. to, alter, or reclassify any of the definitions or 
classes of materials set forth in this Order, and shall de- 
termine all ouestions arising from the operation of this 
Order. His determination and findings shall be final, and 
pending an appeal to the Administrator shall be binding until 
disapproved. 



9782 



-379- 



"The Special Administrator shall mc.':e n survey and study 
of the Pants Industry, and shall prepare a report and 
recommendations prior to Jvaie 30, 1934, with resnect to 
changes in maximum hours, differentials, or chances in the 
minimum wa ge to be paid employees engaged in the production 
of men's and boys' pant?, and -ita repsvsct to amendments 
to the Cotton Garment Coae concerning definitions, wage 
rates and/or maximum hours. 

"3. Po manufacturing em?lo--ee engaged in the production 

i ij ■- 

of men s '.vash suits of 100' cotton content when made, in 
work clothing factories in conjunction with "or'c clothing 
shall be paid at less than the rate of thirty-Tour cents 
(34.?) per hour Then employed in the southern section of the 
Industry, or less than thirty-seven cents 037 rf) per hour 
when employed in the northern section o^ the Industry, as 
such sections are defined in the Cotton Garment Code and 
amendments thereto. The Special Administrator hereinabove 
provided for shall have the same powers end duties with 
respect to such cotton wash suits as .are delegated to him 
by this Order with respect to men's rnd boys' parts." (*) 

In accordance with condition To. 2 of the ne - ' amendment, terminating 
the Inter-Code Committee and ordering the designation of a Special Ad- 
ministrator to administer, supervise, end study the production of these 
particular garments, Deputy Administrator Gitchell, in a letter to 

leral Johnson, dated March 17, 1SZ4, recommended the appointment of 
i.'r. "Godfrey 131och as such Special Administrator, and Administrative Order 
l"o. 113-37, appointing Mr. 31och, was duly signed on March 28, 1934, 
calling for ds report and recommendations prior to June 30, 1934. 

II. effects of Amendment Po. 3 to Cotton Garment Code. 

A. Fabric Classification Proved Impractical . 

It soon became apparent that this further attempt to settle the 
auestior. by classifications of faeries wa.s not solving the -problem in 
?n - ' manner. Manufacturers found, it impossible to pay higher wages on 
certain bolts of cloth than on others, ''hen both were worked on b _r the 
same operators. At least, those who attempted this found it so, for, as 
before, most of the plants made no effort to differentiate between 
different fabrics and continued paying the lower wage scales on all gar- 
ments. 

All evidence produced pointed to the fact that probabl" the equali- 
zation of wages in the t"o Codes was the only way in which a satisfactory 
solution could be achieved.. 

Pumerous complaints rega.rding the new rulings were filed with the 
Administration and the Code Authorities concerned., and once again no real 
effort was made by the Industry to comply with the provisions of this 
amendment. 

(*) Amendment Pc. 3 to the Cot';on Garment Code. 
9782 



-380- 



3 . Protect- from Southern Manufacturers . 

Tlie Southern Garment Manufacturers Association's protest and reouest 
for a stay, dated March 24, 1934, as shown b*- the following copies of 
the correspondence on the matter, was a typical example of how many 
members of the Industry felt about this latest amendment. 

"A resolution, passed by the 3oard o*" Directors of the 
Southern Garment i Manufacturers Association in a special 
session in Atlanta, Georgia on Saturday, March 24, was 
sent i'ou Wednesday, March 28, from the office of this 
Association. 

"This Association has at present a membership of 267 Gar- 
ment Manufacturers in the South and has affiliated with the 
Southwestern Garment Manufacturers Association made up of 
48 members in the Southwest. Let it be understood that all 
of these majiufacturers hpv? tried from the first to comply 
with the "orf and spirit ox the Industrial Recovery Act. 
Ye have formed ourselves into an association the orincipal 
purpose of which is to promote and further industrial re- 
cover-*. It is a fact that our own Code Authority located 
in Few York Git"*, even though it is ma.de up almost entirely 
of Northern and Eastern Manufacturers, has said that the 
South is far ahead of the Forth and Bast in Code corrroliance, 
and b - ' comparison has been almost free -from violation. Let 
it also oe understood that ,T e are organized for out mutual 
protection, . und since we are almost entire]. - * without represen- 
tation on our own Code Authorit 1 *, we have perhaps given more 
time and. study to the welfare of industry in our section than 
any other section or group. 

"The resolution which was sent to you set forth at length 
the very unfair situation ''inch the Administration is seek- 
ing to create and -out upon the Southern Manufacturers. This 
situation has been. brought about by the ruling and decisions 
of a. Committee which was entirely unrepresentative of the in- 
dustry and. which v r e feel violated, the oldest principle of the 
American people who stand for Government only. 

"Decisions such as the one referred to can not help but break 
do 1 'n and destroy our faith in the Recovery Act and the Re- 
covery Administration. Regardless of the legal status and. 
penalties attached, to the Recovery Law, it can not succeed 
without the proper cooperation from all who are affected. De- 
cisions which are unfair to any one section of any industry 
can not be conducive to this necessary cooperation. 

"We are writing you because so far we hrve felt v .'e are 
governed by adeouate representation and because you are our 
representative. You have, I am sure, the ultimate v "ell- 
beinr of T *our section in mine.. Ye ask that after you have 
a.couainted yourself with the facts of this case that you 

9782 



- 1- 



tahe immediate steps to see that the situation is corrected, 
and that a similar situation is not allowed to again occur. 
The South nmatnot be allowed to be forced entirelv off the 
industrial horirron." (*) 

"'.Thereas, The Cotton Ffnrr Industry in the South, consist- 
ing of 214 oants manufi : u ■ irs operating 28,423 machines, 
located in 14 ■ : ' 'n states, lies been unduly discriminated 
against by the rational Recovery Administration in its deci- 
sion ^lacing under a prohibitiv ; ; scale the manufacture 
of -cants of certain cotton frbrics, resulting in forcing the 
cost of sue i ;arment beyond the uurc^asir - ~>ower of the av- 
erage workin ■ nan, inasmuch as working jrcole are unable to 
afford wool or semi -wool pants, thus ignoring entirely the 
interest of thos^ consumers deserving the greatest considera- 
tion, namely, the working man ,' nc the farmer; and 

"Where; s, The said all cotton pants manufacturers represent- 
ing 93-o of the industry ar -e entered into contracts to cell 
the retail trsde hundreds of t tousands of dozens of these 
cotton oants at tli< rage rates heretofore in effect under 
the Cotton Garment Coze, thus forcing conf iscatory costs 
upon the southern pants manufacturer; ant? 

"Whereas, Although the southern manufacturers presented to 
the Inter-Code Committee for the Cotton Garment Industry 
and the Clothing Industry voluminous end uncontroverted 
evidence of the inescapable fret that all cotton content 
pants consisting of all cotton fabrics known as printed 
anf woven twills, drills and ducks and similar fabrics T "'ere 
manufactured, sold and • orn a.s cotton work pants; and 

"Whereas, the Inter-Code Committee responsible for the de- 
cision and controversy was not representative of the Cotton 
Pants Industry as a whole, only one member thereof being a 
southern pants manufacturer; and 

"Whereas, There can be no justification for charging a 
higher wage in, the manufacture of cotton pants than in the 
production of overalls, dress shirts, work shirts, cotton 
dresses, which are allowed to be made at basic rates named 
in the original Cotton Garment Code, and which contain no 
more cotton than do the above mentioned fabrics used in the 
manufacture of cotton pants; and 

""'.-'rear, The greater volume of the southern pants manu- 
facturer consists of those fabrics that have now been placed 
under the higher -are rates o^ 34 cents per hour, thus making 
it impossible for the manufacturer to segregate his labor in 
the factory in sue.: a r r~ r - ~ to pay each worker the wage rate 

(*) Letter dated April 2, 1934, to Senator .Zenneth iicKellar, from T. P. 

Kennedy, Jr., of O'Bryan Bros. , Inc., ITashville, Tear.. (Cotton Garment 

Code Files.) 
9782 



-382- 



called for according to the classification of the garments, 
- • •" further creating a condition whereby one manufacturer 
of pants "ill consider a piece of cloth under the 30-cent 
rate and another manufacturer "ill consider the same -oiece 
of cloth under the 34-cent rate, thus creating unbounded 
confusion among the workers and the management, leading to 
labor difficulties; and 

'TJhereas, The Special Acini nist rat or placed in charge of 
this matter, and ether Recovery Administration officials 
•-ere and are unaole to Differentiate between the work 
■oant consisting of the fabric, the-*- have classified as 
b; king the 34-cent rate end the fabrics they have classi- 
fied as takin : the 30-cent rate, thus indicating the un- 
certainty of the position taken by the rational Recovery 
Administration: 

" ie it resolved by the Southern Garment Manufacturers 
Association, Inc., representing and speaking for the 214 
manufacturers of cotton pants in the southern states, 
operating 28,423 machines, that the dicision hereinbefore 
referred to be protested to the Cotton Garment Code 
Authority, the National Recovery Administration and the 
Senators and Representatives in Congress from the 14 
Southern states, as being .holly unfair and discrimina- 
tory against these manufacturers representing 93a of the 
industry as well as to the consumer of these pants, the 
working classes of the people and the farmers whom the 
Recovery Administration is endeavoring to aid; and 

"3e it further resolved that the Cotton Garment Code 
Authoritv be requested to secure a stay of the Order re- 
ferred to, entered on March 16, 1934, modifying the re- 
lated order of December 18, 1933, and that the Cotton 
Garment Code Authoritv be requested to secure a. further 
hearing with General Hugh S. Johnson, the Recovery Ad- 
ministrator and allow an opportunity of placing- before 
the Administrator such facts depicting the injustices 
placed upon the Southern industr"- and the economic hard- 
ships imposed upon the working man and the farmers con- 
suming these cotton pants. 

"Certified to be a true an'" correct covy of Resolution 
adopted by the Board of Directors of the Southern Garment 
Manufacturers Association, Atlanta, Georgia, March 24, 1934. 

"W. Gordon KcKelvey, Secretary, Southern Garment Manufac- 
turers Association, Inc." (*) 



(*) Resolution dated i larch 24, 1934, from the Southern Garment Manu- 
facturers Association, Inc. (Cotton Garment Code Files.) 



9782 



-383- 



"I an enclosing for ; r our consideration a letter from V.v. 
T. P. Kennedy, Jr., O'Bryan 3rothers, Uashville, Tennessee, 
relative to the Southern Garment Manufacturers association 
Code. 

''I will appreciate it if yo\i "'ill advise me lion I may answer 
his letter." (*) 

"le: Resolution of Southern Garment Manufacturers' Asso- 
ciation protesting Administrative Order of i arch 15, 
1J34, and a^iin^ a stay of its operation. 

"Your letter of April 5 enclosing a copy of the resolution 
above mentioned hi c Deen called to in:' attention. 

"The resolution a'oove mentioned relates to the classifica- 
tion of 'cotton wa c h suits and pants' and the application of 
appropriate wage rates to establish fair competition, which 
is the subject and ouroose of the Administrative Order of 
March I s . This is a very complex and difficult "oroblem. It 
involves both the Cotton Garment and the Men's Clothing In- 
dustries which have different code r/age rates for garments 
which compete in the same markets. 

"In this overlapping field of production, a failure to make 
accurate classifications can produce widely variable labor 
costs and serious injur" and damage to competing units in 
these Industries. Unfortunately, efforts of representatives 
of the c"o Industries failed to reach practicable agree- 
ments on the subject. In these circumstances the national 
Recover-^ Administration is making a special study of the 
subject and is making classifications for current use. 

"It is hoped operating under these current classifi cations 
will be corrective and ■oroduce cost data which will enable 
the Industries themselves to determine what further adjust- 
ments may be necessary to establish fair competitive condi- 
tions of operation. A final arsctical solution of the problem, 
as you will readily see, must achieve this object. 

"You. may be assured that until this object is attained the 

ject will remain one for searching stud:' - and. consideration. 1 ^**) 

G. Protest from Associated Pants Manufacturers . 

The Associated Pants Manufacturers of America 'held 'a special meeting 
in Chicago on Ma- 5, 1934, and submitted to the Admini strati on the fol- 
lowing resolution protesting the amendment, • sting certain '-age raffces 
and reouesting another hearing on the subject. 

(*) Letter dated Aoril 5, 19 , *c .M . : ' afcj 3lla,r, 'J. 3. Senate, to 
General Hu::h S. Johnson. (Cotton Ga -ment Code files.) 

(**) Letter date< Ap«rLl 11. 1S34, from fu i S. Johnson, Administrr.tor, 
to Senator Menneta Mcliellar. (Cot to - : ~ nt Code Piles.) 

9782 



384 

"A special meeting of the Associated Pants Manufacturers of 
Anerica, one of the truly representative trade associations 
legally recognized, as such, under paragraph B of Article IX 
of the Code of F^lv Competition of the cotton garment in- 
dustry, was held at Chicago on May 5, 1934, for the purpose 
of considering the executive order of the national Recovery 
Administration, modifying the cotton garment code with respect 
to the pants industry, which said order was effective March 
22, 1S34, running to July 1, 1934. The above published order 
was read and offered for debate at the meeting. After full 
discussion thereof the following resolution was offered, ap- 
proved and declared to be the unanimous resolve of the as- 
sociation and directed to be transmitted through the proper 
authorities to the Special Administrator appointed under the 
order above mentioned, for consideration by him: 

"WHEREAS the association desires to go on record as fully 
approving the general aims and purposes of the order -under, 
consideration, insofar as it tends to benefit the industry as 
a whole, and 

"WHEREAS the association after a close analysis of said order 
and full debate thereon, questions its enforceability for the 
following reasons: 

"The words 'work and 'dress', referring to pants and pant 
factories as used in the order, obviously refer to the use to 
which the garment is to be put by the consumer, and, to the 
factories producing a particular type of pant, respectively. 

"The association asserts that the division of the industry, by 
classification of its products on the basis of use to which the 
garment is to be put by the consumer, is impractical because 
of varying geographical, economic and elimatic conditions 
throughout the country, which influence the use to which the 
garment is to be put, and fur liter because o'f the obvious in- 
ability of any enforcing officer to definitely ascertain, from 
the manufacturers' records, the proper compensation nr rate of 
compensation to be paid for labor on any particular clas- 
sification nf materials, as defined in the order, or to ac- 
curately determine the proper use of the garment manufactured, 
or to determine its proper classification under the «rder. To 
exemplify the above objection: 

"Most manufacturers make 'work' and 'dress' pants. In such 
factories, the workers operate indiscriminately on whatever 
'wcrk' or 'dress' materials may be then in work throughout 
the shop. At. '.the end of a given payroll period a worker is 
entitled to compensation, but may not have earned enough to 
bring him up to the thirty- two and one- half cent (32^) minimum 
as fixed in the order. In such case it is impossible for the 
enforcing officer, the worker, or the manufacturer to 



9782 



-3^5- 



determine upon v:h?t basic minimum r< te such compensation 
sh oul c b e c omput e d . 

"The order attempts to classify materials or the basis of 
content, description, or words in common use in the trace. 
The history of the industr*' lead.s the association to the 
conclusion that new fabrics will be introduced or net/ or 
alternate uses found for present frorics. At such time it 
•.."ill be necessary to obtain an executive decision on each 
nor frbrdc that mp" be so introduced or on the change of 
usage of the existing fabric, which, obviously, will in- 
volve -reat expense, inconvenience, tine and oela - ", and it 
is also apparent that such decision cannot be rendered 
until after a prolonged use of such fabric by the manu- 
facturers during r ?hich time the members of the industry will 
have suffered many months of unfrir competition. 

"The association is unanimously committed to e polic3' r of 

cooperation "ith the administration in the promulgation and 
enforcement of all proper orders ?nd '"ill assist to the 
fullest extent collectively and individually in the enforce- 
ment thereof. 

"The association, comprising as it does, members of long ex- 
perience and excellent refutation, is o^ the opinion, iowever, 
that the executive order as vrritten rill not accomplish the 
purpose for which it ".as drawn anc. as a uractical' matter is 
incrpable of enforcement. 

"T7HEEEAS further, it is not the purpose of the ' association 
to point out theoretical anc practical objections to the 
order es written, without offering suggestions based upon 
the experience of its members which mi at lend to a proper, 
fair and enforceable order; 

"NOtf", THEEEFOHS, we respectfullv submit that in order to 
obviate the necessity for the classification of "jp.rmer.ts, 
according to the use to which the - * will be put o'- the con- 
ramer, to remove the necessitv of complicated, expensive and 
unnecessary bookkeeping paid production records designed to 
prove, or attempt to reflect, which, garments "ere made, sn<~ 
by what employees, and "or '."hat period of time they operated 
thereon during an - ' - -iven payroll period, and to overcome the 
objectionable necessity of paying t~-o scales for various 
classes of materials manufactured in the seme factories, end 
to obviate the necessity of special recurrent hearings' before 
the Administrator concerning ne r fabrics and new uses of 
existing fabrics that will be introduced into the trade in the 
future, it is. our recommendation thpt all men's and bo2''s l pants 
should oe manufactured on one basic minimum ?r.C thgt the scale 
recommended be thirty-five cents (35,:) per hour for the nor- 
thern section of the industry end thirty-two (32rf) ner hoar 
for the southern section of the industry. This, basic rate is 



9782 



. -386- 

to apply indiscriminately in all pant factories without 
regard to any classification of materials used or of the 
use to which such garments will oe put "by the ultimate con- 
sumer, and in accordance with prevailing Code Regulations as 
t o hours , 

"It is the, belief of the association that any division of the 
industry on a basis of the use to which the garment is put 
will he unsatisfactory, 'out if the single minimum rate for 
all pants cannot be agreed upon and no other similar proposi- 
tion can be substitute^ then it becomes evident that a solu- 
tion on a basis of classification will be necessary. In that 
event the association believes that the only practical classifi- 
cation which will eliminate future misunderstandings and the 
necessity of future hearings on new fabrics and which will 
simplify policing of the industry is the classification of the 
industry on a basis of the content of the cloth that goes into 
the garment, i.e. pants made of one hundred per cent (100$) 
all cotton content on the thirty cent (30(0 rate in the south 
and the thirty-two and one-half cent (32^) rate in the north 
and all other trousers to be on the thirty-four cent (34(0 rate 
in the south and the thirty-seven cent (37^) rate in the north. 
Regardless of the basis of the classification agreed upon, the 
association is of the opinion that for the purpose of removing 
and eliminating unfair competition, that the thirty-two and one- 
naif cent (32-g-tff) rate fixed for the north and the thirty cent 
- (30(0 rate fixed for the south shall apply only to those factor- 
ies manufacturing pants which fall exclusively in the lower 
bracket of said classification and that wherever a manufacturer 
also makes pants which would require the higher rate (thirty- 
seven cents, 37(* for the north and thirty-four cents, 34^, for 
the south) he must pay labor at that rate for all garments 
manufactured in his factory, regardless of the type of garment 
made or descriptions of the fabric used. Any manufacturers 
desiring to make pants upon which the thirty-seven cent (37(0 
scale is fixed in the north and the thirty-four cent (54(0 rate 
in the south, and also desiring to make pants upon which the 
thirty-two and one-half cent (32-|(0 rate for the north and the 
thirty cent (30(0 rate for the south is fixed, may do so pro- 
viding his operations are performed in separate manufacturing 
units, separated in fact and by records, which said separation 
must be approved bv, the Administrator or his deputies. In the 
event a manufacturer 1ms separate units operating under both 
classifications and requires the services of any worker in 
both units, such worker so used shall receive the highest 
guaranteed minimum wage for all hours of labor in both units 
during such payroll period, and 

"Wherever any minimum wage scale is set forth, recommended, 
referred to or used in this resolution, such wage scale is 
fixed with reference to a forty-hour week under Article III, 
Section A «f the Code of Fair Competition for the Cotton 
Garment Industry, 

"WHEREAS further, the association believes it to be imperative 
9782 



-337- 

that the matters herein set forth be determined forthwith 
since the manufacturers of the fall pant lines of 1933 and 
of. the spring pant lines of 1934 have teen subjected to a 
considerable a.mount and degree of unfair competition in the 
trade due to varying interpretations and conco--a.ions among 
the trade itseli of the previous orders, an' -Vac to the delay 
in the promulga.tion of such orders and due to general mis- 
understandings, and 

"WHEREAS the V'-anufactacrers arc how about to introduce their 
.fail pant lines of 1934 to the trade, it is imperative that 
these matters "be giv:n immediate consideration. 

"KOW, THEREFORE, he it resolved that the administrator he 

ad he is hereby requested to summon a meeting of all pant 
manufactuerers to be held in Washington at the earliest 
possible moment, after giving due notice thereof to all 
of such -sr.rufactr.rers , the purpose of such meeting being to 
the:", and there fix a definite method, cither of enforcing 
the present executive ord.r or to promulgate a ney order 
according to the suggestions herein contained, or to suggest- 
ions to be made at such meeting for the protection of all 
members of the industry and in furtherance of the principles 
of the national Industrial Recover;' Act." (*) 

III. Report of Special Administrator Godfrey Eloch. 

hr. Bloch, in the course of his investigation, visited nearly 
ail sections of the country, discussing the question with the manu- 
facturers, checking production problems in. their plants, etc. He 
found general unwillingness to comply with the new amendment, with no 
genuine attempt by the Cotton Garment Code Authority to enforce such 
compliance. So' he and his stafi were able to do very little in admin- 
instering or supervising enforcement in respect to single pants and 
"ash suits, and his work actually became merely a fact-finding in- 
vestigation. He collected co L production statistics and data on 
the basis of an annual -oroductien of 55,000,000 pants, and based his 
report (ccmrlete report follows) on information obtained from the 
analysis of these figures. 

General Hugh S. Johnson 
Administ rater. 

Report of Special d&ffiiriistrator appointed pursuant to 

rutive Order of ; arch 15, 1334, being amendment No* 3 
to the Code of Fair Competition of the Cotton Garment In- 
;.stry, with resrect to lien's and Boys' Pant s and Wash Suits* 

Both at the time of p'iic original order of December 13, 1933, amend- 
ing codes for the hen's Clothing Industry and Cotton Garment Industry 



(*) Resolution of Associated Pants 'fanufacturers of Anerica, dated 
hay 5, 1934* (Cotton Garment Coco Piles.) 



9732 



-58 3** " 

and at the 'time of -the amendment to the Coda of the Cotton Garment ■* 
Industry of March 15, 1934, many firms were operating on Doth pants and 
v;ash suits at the minimum prescribed by the Cotton Garment Code, namely 
30{* South and 32-?$ ilorth, instead of at the wa^es prescribed by these 
amendments, namely 34^ South and 37^ North, 

At the time that each of these orders v/as promulgated a substantial 
section of the industry was paying the newly prescribed rates or better. 
Other sections of the industry were willing to comply and did comply.. 
Still other sections of the industry fravkly failed altogether to com- 
ply with these rates, and naturally, such non-compliance forced some of 
the firms in most direct competition with the violators to abandon their 
own positions of compliance in order to continue operations on a com- 
petitive basis. 

The first order was an attempt to put into efiect a compromise 
betv/cen the positions of the two contending Code Authorities. 

While not directly concurred in by them, it did represent middle 
ground between them. The second order embodied carrying out of the 
substance of the earlier' one. 

These solutions representing middle ground were not necessarily 
the most practical or easiest possible solutions to comply with. 

Further, being the' result of contention between the parties there " 
was serious unwillingness to comply with same. It may properly be said 
that however poorly conceived, these orders never had a fair chance, 
as at no time did the cotton Garment Code Authority vigorously under- 
tafce* t$ »rtfoi»ce suo'h fiomnlianee. 

It has been Fep^pted in the ■Jess that fallowing the i-.susuae.i3 of 
the earlier order, the Board of the Southern Garment iianufacturers 
passed a resolution to continue the production of cotton pants on the 
basic minimum wage of 3C$ per hour. 

The Special Administrator had occasion to travel over most of the 
country, beginning shortly after the issurance of the second amendment. 
He did not find clear indication to the Trade by the Cotton Garment 
Code Authority that the amendment had to be complied with. On the 
contrary, the emphasis put on application for stay rather than on the 
provisions of the amendment, left most of the trade interviewed under 
the impression that the matter was in abeyance and that immediate 
compliance was not required. 

Furthermore, when the label provision of the "Cotton Garment Code 
became effective, labels were issued freely to firms whose payrolls 
did not indicate any compliance with the 34 - 37^ wage level where 
required. 

No valid conclusions arc therefore to be drawn with respect to 
the enforcibility of this type of provision cither as drafted, or such 
improved provision as might be made effective. 

The reaction of the cheaper manufacturers tu the orders, wac hjrwo-vor^ 

9732 



-389- 

clcarly adverse. 

Unable in the face of these circumstances to effect compliance, 
the " T ^w York office of the Special Administrator "became almost entirely 
-re pr.ee* to the ants situation a fact finding office. 

The Government having furnished no staff, the personnel of the 
various Code Authorities was freely used or "borrowed from. 

She s cific infor lation compiled on pants was accomplished with 
the assistance of s statistician paid jointly "by the Cotton Garment and 
lien's Clothing Code Authorities; a Secretary loaned "by the Dress Code 
Authority, The information was collected by the field men of the Cotton 
Garment Code Authority and "by eight full time investigators loaned "by 
the Lien's Clothing Code Authority and was compiled "by some six compto- 
meter operators and typists borrowed from Code Authorities. 

The information compiled was on the basis of an annual production 
of 55,000,000 pants and represents probably more detail than previously 
collected on this subject. 

The statistics indicate that the line of division drawn in the 
executive orders which were the result of negotiations* and compromise, 
is probably the least practical line of division that could have been 
chosen. 

The material appended which needs close study for drawing con- 
clusions therefrom indicates in general terms: 

1. That there is nc line of division between the lower and, 
higher wage level branches of the industry that will not 
cut through some homogeneous businesses. 

2. That if a division is made, if all pants are treated in 
one category and a special wage level established for them 
different from other cotton garments, such wage level should 
not seriously inconvenience ir cut through greater than 20$ 
of the industry affected. 

3. That if the proposed line of division were on the basis of 
all cotton fabrics versus other fabrics, such line would 

cut through approximately 70s of all the production involved. 

4. That the present line setting the lower wage rate for 
certain "lower cottons" at a higher rate for all other 

ids, cuts through approximately 92$ of the production. 

If the 36 hours should be adopted for the Cotton Garment Industry 
and rates proportionately raised, the simplest solution would of course 
be to have pants and wash suits t nanufactured at such increased 
rate. This would represent only a slight reduction from the present 
unenforced rates, but would by virtue of the uniformity in the provis- 
ions be as rwa&ily enforcible as the general minimum wage. 

It is therefore recommended that 

97S2 



-390- 

1. For Administrative purpose all single pants be put 
together if possible under one code or a division oi one code. 

2. That the provisions of such code have the minimum wage and 
hour provisions of the Cotton Garment Code if such Code shall 
have been put on a 36 hour basis with proportionate wage increase. 

3. That otherwise such code be ' on a 35 hour maximum with minimum 
wages of Z'7<h in the North and 34{* in the South. 

4. That if the Administration does not see fit to unify code 
status of all single pants as recommended, the wage provisions 
be as above, and jurisdiction be settled as follows: 

All wool and part wool pants to be put under hen's Clothing 
Code, All cotton pants to be under a Cotton Garment Code divi- 
sion at the 34-37..' minimum wage rates and 36 hour maximum; and 
further. 

That rigid enforcement of the above provisions be required as 
a condition of maintenance of any jurisdiction by the Cotton 
Garment Code . 

5. That a study of men's and boys' wash suits as somprehen- 
sive as that just made on pants be undertaken at once. And 
that jurisdiction be determined following the results of such 
study. 

6. That the wages and hours for wash suits be identical with 
those set forth above for single pants, and not ':ubject to the 
minima for cutters and pressors now in the Clothing Code. 

7. That wherever the above solution shall result in necessity 
for duplicating reports and inspections, arrangements be made 
as far as practicable for the furnishing of such reports to 
one source, and the relaying of same to the Code Authorities 
entitled to receive same. 

i 

Appended herewith are cojDies of work-sheets and tables showing 
findings of the statistical survey made and copies of the preliminary 
reports leading up to the second Executive Order. 



Respectfully submitted, 



Godfrey Bloch ( signed) 
GODFREY BLOCH 
Special Administrator 



Approved by 
SOL ROSENBLATT 
Division Administrator 



9782 



-391- 

A. TABLES SJEMITTED WITH REPORT 
TABL3 I 
BHEAKDOWN. OF PANTS MANUFACTURED ACCORDING TO 

fabrics used: 



Firms Pants 

Number ^ Quantity ^ 

1. - Firms making only cotton pants (Fars ) 

and quantity of pants produced 83 24.06 15,645,893 28.14 

(a) Manufacture of cotton pants 

in lower bracket only 56 16.23 4,062,575 7.31 

(b) Manufacture of pants in 
higher and lower bracket 

cottons 27 7.83 11,583,318 20.83 

2. _ Firms making cotton pants and 

also wool and part wool pants. ... • • 

and quantity of pants produced 235 68.12 39,343,890 70.75 



9782 



-392- 



TABLE II 



BREAKDOWN OP FIRMS IIAKING ECKEB GRADE COTTONS 
(EITHER EXCLUSIVELY OH ALONG I7ITH OTHSH FAB- 
RICS) TO SHOT/ PERCENTAGE OP THE TOT.iL PROMO- 
TION (QUANTITY) REPRESENTEE 3Y THE LOTJER BRAC- 
KET COTTONS 



No. of 
Firms 

1« - Less than 25$ ».*.. » . . . •> •> ■> 53 

2. - 25$ to 50$ ...... *•• 54 

3. - 51$ to 75$ ....... » > . 55 

4. - Over 75$ ....... <-.°° HI 



9782 



-393- 



TABL2 III 



HR3AKD0W1I OP FIRMS LIAEE1IG WOOL AMU PART WOOL 
PANTS TO DETSRI.IIHE PERCSNI'AGIS OF THE TOTAL 
PRODUCTION MSPRESEITTED 3Y WOOL AID PART TOOL. 



Pirms Pants 

Number fo Quantity fo 

1. - I7ool or Dart tooI less (Pairs) 

than 25jf 111 32.16 22,447,643 40.36 

2. - Wool or part ttoo1 from 

25$ to 50$ 78 22.61 11,065,693 19.90 

3. - Wool or part v/ool from 

51$ to 75$ 33 9.57 4,337,755 7.80 

4. - Wool or part vool over 

75$ 28 8.12 1,521,482 2.74 



9732 



-3P4- 



TA3LL IV 



Sheet No. I 

TOTAL QUANTITY OP PANTS LIAiJUTACTUBED ACCORDING TO GEOGRAPHICAL DISTRI- 
BUTION: (PAIRS) 





Wool and 


Lo i .7er 




Higher 


Total 




Part Wool 


Cottons 




Cottons 


Pants 


Louisiana 


— 


582 s 513 




13,476 


595,989 


Mississippi 


— 


495,481 




62,712 


558,193 


Tennessee 


14,839 


521,744 




341,243 


877,826 


Alabama 


61,099 


545 ,'841 




143,340 


750,280 


Georgia 


233,289 


1,619,298 


1 


,215,617 


3,068,204 


N. Crrolina 


100 


2,776 




_ 


2,876 


S. Carolina 


.60.000 


— 




„_ 


60.000 


Southeast 


369,327 


3,767,653 


1 


,776,388 


5,913,368 


S. E. Percent. 


3.80$ 


13.39$ 




10.29$ 


10.63$ 


Texas 


188,506 


2,755,655 




973,175 


3,938,540 * 21, 204 


Arkansas 


4.128 


113.293 




178.896 


296.317 


Southweat 


192,634 


2,868,948 


1 


,152,071 


4,234,857 


S« y. Percent 


1.98$ 


10.19$ 




6. 68$ 


7.62$ 


Virginia 


9,531 


1,262,597 


2 


,412,408 


3,684,536 


Kenticky 


— 


24,000 




— 


24,000 


17. Virginia 


518,258 


427,125 




100,618 


1,046,001 


Maryland 


436,756 


2,350,922 


1 


,896,129 


4,743,877 


Missouri 


40.046 


1,456.046 


1 


.012.838 


2.508.930 


Border States 


1,054,591 


5,530,760 


5 


,421,993 


12,007,344 


Bo. St. Perc. 


10.85$ 


19.65$ 




31.43$ 


21.59$ 


Pennsylvania 


640,329 


2,351,765 


1 


,745,969 


. 4,738,063 


New Jersey 


135,156 


623,278 




562,620 


1,321,054 


Ner; York 


4.302.052 


6,064.205 


3 


.043.262 


13.409.519 


Mid. Atlantic 


5,077,537 


9,039,248 


5 


,351,851 


19,468,636 


M* A. Perc. 


52.26$ 


32.12$ 




31.02$ 


35.01$ 


Ohio 


528,892 


710,310 




925,297 


2,164,499 


Indiana 


318,452 


1,418,590 




780,872 


2,793,632 *275,718 


Michigan 


456,760 


406,601 




369,035 


1,232,396 


Illinois 


855,977 


1,110,380 




400,856 


2,396,853 *29,640 


Wisconsin 


1,728 


76,848 




2,436 


81,012 


Minnesota 


— 


5,857 




— 


5,857 


Iowa 


996 


62,553 




4,500 


68,059 


Nebraska 


— 


3,780 




__ 


3,780 


Kansas 


— _ 


57.012 




__ 


57.012 


Mid West St. 


2,162,805 


3,851,941 


2 


,482,996 


8,803,100 


M, W. S. Perc. 


22.26-1 


13.68$ 




... 14*39$ 


. 15.83$ ._ 



9782 



Sheet II 



-395- 



TOTAL QJJAL'TITY Op PAIITS i.IAlnJTACTin^D ACCORDING TO 
GEOGRAPHICAL EISTRITUTIO".:: (PATHS) 



Colorado 

Calofirnia 

Washington 

Uta . 



Wool and 
Fart Wool 

3,235 

104,944 

64,554 

4.044 



Loner 
Cottons 

30,291 
145,843 
293,706 

85.944 



Higher 
Cottons 

59,412 
28,748 



555,784 
1.97? 



88,160 



Total 
Pp.nt s 

92,938 
279,535 
358,270 

89.938 



820,731 
1.43£ 



Western States 176,787 
West. Percentp ye \ e 2>2% 



■ 51# 



Mas s achus e 1 1 s 

Maine 

Connecticut 

Vermont 

i'levr Hano shire 



610 , 907 

25,138 

25,049 

300 

1.332 



1,759,230 

7 24, 648 

51,328 

300 

40^596 



594,904 

17,625 

2,853 

7.644 



2,965,041 

68,461 

79,230 

600 

49.572 



ITew Eng. States 
H. E. Percentage 



653,776 
3« 85, j 



l,u75,102 
6. S7', j 



523,026 
3.61',j 



3,162,904 



5.69$ 



1,197,390 
S.15# 



"165, 700 



List. Columbia 
D. C. Percentage 



19.286 

.20^ 



655, 760 

2.32*£ 



357,144 
2.07;.j 



GEAHD TOTAL %716,743 23,146,196 17,254,629 55,608,830 *492,262 



Hote: 



*Totals only, no breakdowns given as to woolens and cotton: 



9782 



,396» 



I^JLZ, V 



ITU1.IBIE Or COIJP.4ITKS HjCLUSEE) III THE PUTTS 
SURVEY OBLIGED TO PAY THE 34^-37^ LIIHIiIUl.1: 



Violation - • Coirrglir-nce Total 

90 56 145 

62$ Z3fo lOOfo 



9782 



-397- 



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-398- 



A..EOJ-EJT ,10. 7 TO CPTTOil GA3LEICT CODE, AUGUST 21,1934 . 
I. Contributing Events Prior to this Amendment. 

The more favorable hour and wago provisions of the Cotton 
Garment Industry Code had been subject to steadily increasing 
criticism and complaint from all the other garment industries. 
Up to now the Administration had in reality been "ducking the 
issue," and talcing no steps, as provided for in the original Cotton 
Garment Code, to officially consider the desirability of reducing 
the hours permitted by this Code. However, in view of these uni- 
versal and pronounced protests, it was deemed necessary to call a 
public hearing for full discussion of these provisions, and both the 
Ken's Clothing Code Authority and the Dress Manufacturing Code Au- 
thority submitted applications for amendment or modification of their 
Codes in relation to garments on which there had been serious over- 
lapping controversies with the Cotton Garment Code. 

A. rotice of Public Hearing June 18, 1924 . 

So on May 31, 1934, the Administration issued a notice of pub- 
lic hearing to be held on Jane 15, 1934 (Later notice of June 7, 1934, 
postponed this hearing until June 18, 1934,), Schedules A and C read- 
ing as follows: 

"Schedule 'A' 

" Cotton Garment Industry 
"1. 
"Whether Article II, Section (a) of the Cotton Garment 
Code shall be amended to read as follows: 

"A. As used in this Code the term 'Cotton Garment In- 
dustry' means and includes the production by any of the 
following processes: (a) cutting, (b) creasing, ( c) 
sewing (all or part of the garment), ( d) trimming, (c) 
pressing, (f) finishing, (g) examining and inspecting, 
(h) boxing, or all of them of any article or garment, 
and known as (l) overalls, dungarees, overall jackets, 
and coveralls; (2) men's shirts, including knitted outer 
shirts and polo shirts; (3) boys' shirts and blouses; 
(4) work shirts of any material, including flannel 
shirts; (5) pajamas and night shirts; (6) men's col- 
lars; (7) oiled cotton garments; (3) nurses' and maids' 
aprons and uniforms; (9) washable service apparel. 



9782 



-399- 



"Whether Article II, Section (b) of the Cotton Garment 
Code shall be deleted. t '• 

it % 

"Whether all references to any of the products not here- 
inabove defined in Article II, Section (a) and all refer- 
ences to 'cotton wash dresses', shall be deleted from 
every Section of the Code of F a i r Competition for the 
Cotton Garment -Industry wherein so referred to. 

"Whether the hours of labor shall be reduced from the 
present forty-hour maximum and if so, whether the basic 
o rates shall be changed. 



"Whether wage rate provisions of the Code should be modi- 
fied to provide for 

"(a) Minimum wa ~:c for cutters; 

"(b) Scries for other skilled workers."* 

"Schedule 'C' 

"Amendment to the 

Code of Fair Competition for the 
Ken' s ■ Clo thing Industry - 

"Paragraph 1 of Article I shall be amended to read as 
follows: 

"'The term "Men's Clothing Industry" as used herein 
is defined to mean the manufacture of men's, boys', 
and children's clothing, uniforms, single knee-pants, 
men's and boys' pants, men's and boys' wash suits, 
men' s and boys' summer clothing, ma.clzinaws, lumber- 
jacks, Melton jackets, sheep-lined and leather (in- 
cluding imitation leather fabric) garments, play and 
sport garments. 



(*) Schedule "A" attached to notice of public hearing To. 15-11, 
20-E an<? 10-3, dated may 51, 1934. 



9782 



-400- 



" Article XIII shall be amended to read as follows: 

"'The membership of the .ien's Clothing Code Author- 
ity shall be increased by two members who shall be 
representatives of the. groups or associations and/or 
manufacturers who shall be found to be truly repre- 
sentative of the members of those industries which 
have been added to this Code pursuant to the amend- 
ment of Paragraph! of Article I." 1 * 

3 . Protest Letter to Industry by Cotton Garment Code Authority . 

The Cotton Garment Industry, as always, opposed to any re- 
duction in hours, strenuously objected to the calling of this hearing, 
and the inclusion of the proposed changes in the other two Codes which 
would seriously affect their Industry. On June 6, 1934, Mr. H.C.Morgan, 
Executive Director cf the International Association of Garment Manufac- 
turers, sent the following letter to all members of the Cotton Garment 
Industry, urging concerted action, in opposition to these proposed amend- 
ments. 

"TO ALL hShBERS OF COTTOh GARhEt'T DEDUSTRY : 

"On June 4, 1934, a copy of the Notice of a 
Public Hearing to be held in Washington, D. C. 
. on June 15, 1934,- was mailed to you by the 
Code Authority. 

"The following action is proposed by the national 
Recovery Administration, subject to aforesaid pub- 
lic hearing: 

1. Place 'cotton wash dress' manufacturers 
under press Manufacturing Code. 

2. Restrict work clothes manufacturers: to 
'overalls, dungarees, overall jackets, and cover- 
alls' under Cotton Garment Code and place balance '• 
of' their products under lien's Clothing Code. 

3. Place 'boys' wash suits' under Lien' s 
Clothing Code. : 

.4. Place 'men's and boys' pants, when made 
in work clothing factories' under Men. 1 s Clothing 
Code. 

5, Place 'sheep lined end leather garments' 
under lien's Clothing Code. 



(*) Schedule "C" attached to notice of public hearing ITo. 15-11, 
20-a, and 10-E, dated i lay 31, 1934." 



973^ 



.- l~ 



6. Place 'men's cotton wash suits' under 
.'.en's Clothing Code. 

7. Propose a reduction in maximum hours 
and an increase in basic wage rates in entire 
Cotton Garment Industry. 

Establish separate higher minimum 
wage rates for cutters and ether skilled wor):- 
ers in entire Cotton Garment Industry. 

"We are convinced that any attempts to.effectu 
ate such radical and dan serous pro-oosals as 
above enumerated wcxild result in: 

1. A serious and drastic curtailment of 
employment in the industries affected. 

2. A curtailment of production . to the 
extent. of. loss to the manufacturers affected. 

3. ■aaising retail prices to a point where 
s- les will become stagnant. 

4. A consumer's buying strike due to their 
inability to absorb increased costs for these types 
of wearing apparel. 

"We believe it is ex-tremely important and urgent 
ti-iat you register active protest to the above pro- 
posals through any channels available to you, and 
especially: 

1 . Senators 
o 



^ . 



congressmen 

3. Chamber of Commerce 

4. national and LccO. 

Tra.de Associations 

5. Consumer organizations 

(Women's Clubs, etc.) 

!, 7c. desire to impress upon you the importance of 
arranging to appear personally at the public hear- 
- . .io- ever, whether or not you can do this, you 
s.-oulc immediately notify the NSA that 'you desire 
to be personally heard at this hearing. Do this 
by either wirttcn or telegraphic reouest, to be 
auc'rensed to: 

:.'r. William p._ p a r isworth, 
' • • • Acting Division Administrator., Room 4221 
Depart:.. ent of Co:., ;crcc Duilding, ' 
Washington! D. C. 



9732 



-402- 



"In your letter, advise him of your desire to 
be personally heard. Advise him what subjects 
you will cover. Send a copy' of this letter to 
the Cotton Garment Code Authority, 40 Worth St., 
hew York City. Then make up a statement cover- 
ing that which you will discuss. Lay emphasis 
on facts, figures and statistics. Send an advance 
copy of this document to the Code Authority. 

"We especially desire that you shall appreciate 
that this forthcoming hearing is absolutely 
vital to this Industry and that volume repre- 
sentation by our members, at the hearing, to- 
gether with the filing of a large number of re- 
quests to be heard, is paramount. Please, there- 
fore, carefully consider our suggestions above 
and act at once. 

"We assure you that it is our intention to co- 
operate to the fullest extent with you and 
that we will enlist all available forces to 
circumvent the adoption of these amendatory 
proposals which, if made effective, would re- 
sult in a chaotic rather than an improved in- 
dustrial situation in our Industry. 

"This letter is written at the direction cf 
Mr. Stanley A. Sweet, Chairman of the Board 
of Directors of the International Association 
of Garment Manufacturers."* 

C. Protest Letters and Testimony Regarding the Calling 
of This Hearing . 

Mr. Ralph Hunter, Chairman of the Cotton' Garment Code Au- 
thority, protested at the hearing as follows: 

"During May Mr, Morris Greenbcrg from HRA called 
and stated that he had been sent to Hew York to co- 
ordinate the apparel codes and the administration of 
the codes and asked the Executive Director and myself, 
as chairman of the Code Authority, whether we would 
agree to a hearing on shorter hours and with compensa- 
tory higher wages. The request was brought before the 
Code Authority on May 18th and upon resolution made and 
duly passed the Administrator was advised that wc would 
agree to such a hearing. 

(*) Letter dated June 6, 1934, to All ivi embers of Cotton Garment In- 
dustry, from W. C. Morgan, Executive Manager, I.A.G.ivi. (Cotton 
Garment Code files.) 



9732 



-403- 



"go mention was made at the time that such sweeping 
changes in the definitions of our code would be under- 
taken at this hearing, nor where the so-called requests 
of the dress code and clothing code divulged to members 
of our industry until we received a notice of the hear- 
ing, dated May 31."* 

Division Administrator Rosenblatt, who conducted the hearing, 
said in his opening remarks: 

"Tow, there may have been some question heretofore 
with respect to the purpose of this hearing and the 
choice of this particular time at which to hold such 
hearing. Apparently, a -;rcat misconception exists 
as to the reasons for this hearing, and that raiscon- 
ception,, unfortunately, is not confined solely to 
members of the three industries whose codes are be- 
fore \xs today, but .also to those who purport to have 
an interest representing other persons within or 
without the industry, although they themselves are 
not members of the industry. 11 ** 

He also referred at length to the qualifying statements as to 
definitions and possible future overlapping questions in General 
Johnson's letter of transmittal, dated ho vember 7, 1933, accom- 
panying the Cotton Garment Industry Code. Ee stated as follows: 

"Farther, with respect to the consideration of pos- 
sible amendments with respect to hour and wage pro- 
visions in the Cotton Garment Code, I desire to read 
into the record the following wire under cate of 
April 10, 1934, addressed to the Cotton Garment 
Code Authority, 40 Worth, Street, Mew York City, 
signed by Earl Scan Howard, 'then Deputy Adminis- 
trator: 



(*) Transcript of Hearing on the Men's Clothing, Cotton Garment and 
Dress Manufacturing Industries, Volume 4, Page 1001. June 22, 
1934, D a y Session. 

(**) Transcript of hearing on the Men's Clothing, Cotton Garment, 
--"-Dress "Manufacturing Industries, Volume 1, Page 3. 
June 13, 1934. 



9782 



-404- 



" 'Division Administrator advises that an amendment be 
offered by your Code Authority reducing maximum hours 
from 40 to 56 with equitable wage adjustments to "bring 
your Code into better alignment with other Apparel 
Code. Please reply. 

"And the following wire, rlated April 11, from R. B. 
Paddock, Executive Director, of the Code Authority, 
addressed to Dr. Earl Dean Howard: 

" 'Betel following form letter Administrator statistical 
studies now being made to determine readjustment of 
hours (stop) request for detail meaning your clause 
quote to bring your Code into better alignment with 
other Apparel Codes unquote."'* 

"A few Administrative Orders were made by the Adminis- 
tration respecting the classification of the wash dress 
manufacturers, or their establishments, rather, and the 
men's pants establishments. The Special Administrator 
appointed with respect to those considerations is bound 
to report by July 1st to the Administrator. The situa- 
tion has proved, although enlightening, rather discourag- 
ing from the standpoint of having a construction program 
if the same arrangement were to continue as under those 
few Administrative Orders. They were temporary and merely 
proposed to be for the purpose of alleviating temporary 
questions respecting conflicts of definitions and over- 
lapping codes, and it was also in view of the fact that 
these orders arc about to expire by their very terms, and 
because cotton dress manufacturers throughout the United 
States are faced with the necessity of keeping their fac- 
tories open and not closed with respect to the coming 
fall season, that it was determined that these hearings 
should proceed forthwith, and without further delay."** 



(*) Transcript of Hearing on Men's Clothing, Cotton Garment and 
Dress Manufacturing Industries, June 18, 1934, Volume 1, 
Page 7. 

(**) Transcript of Hearing on Men's Clothing, Cotton Garment and 
Dress Manufacturing Industries, June 13, 1934, Volume 1, 
Page 8. 



3782 



~-U>C- 



II. Public Hearings of Juno 18 to 32, 1934. 

A vast mass of testimony was presented at this four-day 
hearing, including statements and briefs from many Senators, Con- 
gressmen', Code Authority members and Industry members of the Cotton 
Garment, hen's Clothing and Dress trades.. 7o are not primarily in- 
terested here in the subject of the reduction in hours, but merely 
in statements pertinent to the jurisdictional conflict on single 
pants and wash suits. 

A. . Arguments of the hen's Clothing .Industry . ' 

L-Ir. George L. Pell, Executive Director of the uen' s Cloth- 
in ; Code Authority, briefly pictured the current situation as 
follows! 

"Ail attempt was -made to define the distinction (be- 
tween pants and so-called work pants) by an Execu- 
tive Order in Dc ; ce:aber, 0.933. The Intor-Code Com- 
mittee, create d at ' tha t tin; c , so o n found, 'itself 
utterly unable to interpret and carry into practical 
effect the Executive Order. The result was that 
some manufacturers of pants worked under the hen's 
Clothing Cocie, some under 1 the Co tton Garment Code, 
and I .am sorry to say that- too large a. number worked 
under no Code at all. It became apparent that the 
attempt to clarify had led only to chaos, or at least 
more chaos. 

,r ln an effort to remedy this situation, another Execu- 
tive 'Order issued in Karch, 1934, which attempted to 
segrcgat-e and classify pants on the basis of fabrics, 
^ut "again, everyone in the pants industry' was confused 
and dissatisfied. Since the issuance of the Executive 
Order on h'arch 15, l~ think I am safe in saying that 
the status of the pants question has been worse- rather 
than better."* 

An 'analysis of the statement of H. K. Ecrwitz, Comptroller 
cf the hen's Clothing Code Authority, at the hearing of June 20, 
1934, is as folloivs: 

heports for. 345 firms who manufactured during the 
past. year over 55,000,000 pairs of single pants, 
were received- and tabulated (truly representative, 
as U. S. Census of hanuf actures, in 1931, > reported 
30,341,000 pairs of men's and boys' .single pants, 
and in 1929, 66,000,000 t>airs). 



(*) Transcript of Public Hearing on hen's Clothing, Cotton Garment, 
and Dress Manufacturing Industries, June 20, 1934, Volume 3, 
Page 620. 

9782 



-406- 



Tabulation disclosed that 74,1 of all the single 
pants manufactured "by these establishments were 
made "by firms who either specialized in the making 
of single pants and made no other product, or who 
made their single pants output in separate shops 
or factories wholly segregated from shops or fac- 
tories making any other product. 

Firms specializing only in the making of single 
pants manufacture 5c'/o of all single pants,' and 
firms having separate snop or shops for the making 
of single pants, wholly segregated from other shops 
in the same establishment making other products, 
manufacture 2lf of all single pants. 

In other words, 74^ of the single pants made in this 
country arc made by workers who do not make any other 
product. In the establishments of firms mailing Vp 
of all single pants, there is occasional overlapping 
of products manufactured. In some of these shops 
single pants may be made during one season of the 
year, and other products in the other season of the 
year, or 'there may be no rigid division between shops 
or sections of the establishments working on single 
pants and on other products (which he says are macki- 
naws, shirts, and overalls) . 

Only 19$ of the single pants manufactured are manu- 
factured in establishments where the workers are 
employed on more than one product. Claim is fre- 
quently made that single pants are manufactured in 
appreciable quantities in work clothing factories 
in conjunction with work clothing, that is, by the 
same workers who make overalls and work shirts. 
This claim is .not borne out by the results of the 
summary made under the direction of the Special 
Administrator. 

I repeat — three- fourths of all single pants are 
made by workers who do not make any other product. ' 

On the questionnaire sent out by Godfrey Eloch, 169 
firms reported number of workers employed. 57 firms, 
making 14,000,000 apirs of single pants, employing 
7,700 workers, are paying the higher minimum rates — 
34;/- in the South and 37ff in the North. 112 firms, 
making 19,000,000 apirs of single, pants, employing 
16,400 workers, are paying the lower minimums — 30$ 
in the South and 32;.,-c in the llorth. " 



9782 



-4C7- 



32fi of these workers arc paid at the higher rate. 
Many plants, paying the lower rates, arc manufac- 
turing single pants of wool or part wool and of fab- 
rics covered in Executive Order of March 15, 1934, 
requiring the higher rates of S4 ( v and 37^. 

Summarizing, therefore, firms paying the higher rates 
employ 32fb of the total number of workers and their 
output constitutes >Vi °f the total manufactured by 
these reporting firms. Only 26fo of all firms report- 
ing made cotton single pants exclusively, and 74$ in- 
clude!' wool and part-wool pants among their products.* 

Mr. David Drechsler, Counsel for the Lien's Clothing C 0( ie 
Authority, stated the views of that body as follows: 

"On the pants question there must be one mini- 
mum for the North and one minimum for the South, 
no matter whether they be members of the hen's 
Clothing Code, or whether they be members of the 
Cotton Gar lent Industry. That issue is square. 
But if you put the members of the pants industry 
under the Cotton Garment Industry, you are faced 
then with the situation that thirty per cent of 
the workers in this land in the industry making 
pants will have their wages reduced. 

"And therefore we say to you that the entire 
Industry should be put under the Lien's Clo til- 
ing Code as it has originally been put in the 
Code when the President signed it on August 26, 
1933. 

"The hen's Clo thin'; Industry wants this In- 
dustry under their Code, because there is un- 
fair competition. The articles are inter- 
changeable and are used by the same consumer 
for the same purpose. The article is made by 
the same workman, trained in the same tools, 
and in the art of clothing people. The arti- 
cles arc made in the same shops, similar shops, 
I should say, and the machinery is the same 
kind of machinery. .They are sold to the same 
consumers, and the distributor displays them 
on the same counter. A suit worn in July is 
just as much a suit as one that is ?;orn in 
December. A coat worn for protection against 
the cold is just as.much clothing, whether you 
• call it an overcoat in Baltimore, or a nackinaw 
or h' el ton in Duluth. (Then quotes figures given 



(*) See Transcript of He ring on Men's Clothing, Cotton Garment, 
and Dress Lianufacturing Industries, June 20, 1934, Volume 3, 
Pages 526 to 630. 

9782 



-408- 

"by Her'witz,- fifty-three percent of production 
made by .manufacturers who make nothing but 
pants, etc.) That makes the total .problem less 
.than twenty percent who do not operate their 
factories as separate pants units."* 

: 'r. George Hexter, of the Clothing Code .Authority staff, said: 

"Our next .and chief contention is that the 
way out of this involved situation is simply 
to. establish one minimum with sectional dif- 
ferentials, for all odd pants, irrespective 
of fabric, of construction, or of use, A 
gror/ing number of pants manufacturers in all 
sections of the industry has come to this con- 
clusion. 

. "The Associated Pants Manufacturers, as a body 

adopted the sane position, as we learn from 
the following account of the meeting held by 
this group in Chicago on May 6, 1934. - The 
manufacturers at the session included several 
from the East and South, and the general feel- 
ing was that instead of one minimum scale for 
certain pants and a higher for others, there 
should be one minimum with a southern differ- 
ential applying to all factories. This plan 
would maize enforcement much easier and elim- 
inate much chiseling. 

"From all this it is evident that the insis- 
tence on a single minimum for all pants in- 
stead of being confined, as has been charged, 
to the group of manufacturers located in Hew 
• York City is shared by representative pants 
manufacturers in all sections of the country, 
and has been endorsed by the pants association 
having the widest geographical coverage. 

"From statement in Daily News Record of 
February 16, 1934, by Mr. Oscar Bcrman of 
Cincinnati - 'Tie cry and hullabaloo that an 
increase of four cents an hour on these gar- 
ments is going to put the Southern manufacturers 
out of business is certainly without foundation 
of fact. The additional cost is about thirty- 
five cents a dozen, less than three cents a pair, 

(*) Transcript of Hearing on Men's Clothing, Cotton Garment, and 

Dress Manufacturing Industries, June 20, 1934, Volume 3, Page 705. 



9782 



- - 



or the equivalent of enc and one-half cents 
a yard for thirty-six inch goods. They will 
advance their, selling prices - this may or 
may not create a little more sales resistance, 
"but since the law forbids men to go without 
pants, they will eventually buy them anyway'" * 

A-n analysis of the statement o,f f.ir. Joseph E. Brill, of the 
National Boys' Pants Manufacturers Association, follows: 

« 

"Fifty- two manufacturers of men 1 s and boys' 
single knee pants and long pants in this Asso- 
ciation. 

"Majority of offices in New York City and_ man- 
ufacturing done outside in New York, Hew jersey, 
Pennsylvania, and Connecticut, produce 8,500,000 
pair, fifteen per cent pf total pants production. 

60fj cf production of pure cotton pants 
30$ cf production cf mixed cotton 
10$ of production of woolen 

"Operated under lien's Clothing Code and urged 
that all pants be put under this Code; objected 
to unfair competition of those manufacturers under 
under the Cotton Garment Code, many cf whom did 
not even comply with that Code.. 

"Average additional cost of four and one-half 
cents per pair of pants to Lien's Clothing manu- 
facturers over Cotton Garment manufacturers. 
Results in increased cost of six cents to seven 
cents per pair to the consumer. This means total 
ccsts of this Association's members arc about 
$400,000 more than costs of their competitors. 

Price Ranges Manufactured by this Assn ' . 

Boys' Pants Wholesale Retail 

$4.25 to $22.50 $.50 to $2.40 
per dozen per pair 

hen's Pants Wholesale Retail 

$10.50 to $39.00 $1.29 to $4.50 
per dozen per pair ** 

(*) Transcript of Searing on Men's Clothing, Cotton Garment and Dress 
Manufacturing Industries, June 20, 1934, Volume 3, Page 647. 

(**) See Transcript of "earing on hen's Clothing, Cotton Garment, and 
'Dress Manufacturing Industries, June 20, 1934, Volume 3, Pages 
651 to 634 and 653. 

9782 



r41Q~ 



B. Arguments of the Cotton Garment Industr;/ 

Opposing any change in the classification, Congresswoman 
Florence P. Kahn of California spoke for the manufacturers of her 
state as follows: 

"~e have no large clothing manufacturers such as 
exist in the East, in California. *.7e have, how- 
ever, 135 cotton garment factories scattered all 
over the Coast, but principally concentrated in 
San Francisco and Los Angeles. . .The particular 
item of largest volume in importance "both to the 
manufacturers and the consumer involved is this 
cotton pants or working pants of 100 per cent cot- 
ton content. . .This comprises a large industry giv- 
ing employment to several thousand persons — con- 
sumers of comparatively low purchasing power, and 
could not afford, in any event, to substitute the 
type of garment primarily made in the men's cloth- 
ing shop... Any change would increase by 20 or 25 
percent the cost of such cotton pants. "(*) 

The Philadelphia Overall and ".York Pants Manufacturers Asso- 
ciation filed the following brief: 

"I represent the Philadelphia Overalls and Work 
Pants Manufacturers Association, whose member- 
ship includes thirteen (13) of sixteen manu- 
facturers in our City - all of whom manufa.cture 
cotton work clothes and under the Cotton Gar- 
ment Code. 

"Our membership represents over 85^ of the em- 
ployees engaged in these shops and over 85/o of 
the manufacturing output. We employ approx- 
imately 1200 men and women. 

"One of t^e contemplated changes affects our 
Industry to such a degree that unfavorable 
consideration may mean the death of an Industry 
which has as much right to live unmolested and 
unrestricted as does the Lien's" Clothing Industry. 

"The Notices sent to the Cotton Garment In- 
/ dustry advises that you will consider restrict- 
ing work clothes manufacturers to .' overalls., 
dungare.es, overall jackets and coveralls' under 
the Cotton Garment Code and place the balenca 
of their uroducts under the lien's Clothing Code. 



(*) Transcript of Hearing on the :en's Clothing Cotton Garment, 
and Dress Manufacturing Industries, June 18, 1934, Volume 1, 
Pages 12 and 13* 

9782 



"411- 



"In considering this contemplated change it i,s 
necessary to see the purpose thereof and then 
to consider the results of such a change. 

"From the very adoption and approval of the 
Cotton Garment Code it was evident that the 
lien's Clothing Industry wan malicious^ seek- 
ing to make serious inroads and to secure un- 
warranted control of on Industry tot-illy un- 
connected with i't from time immemorial and in 
which they were never interested until the in- 
ception of U.S.A. The only' purpose which can 
he deduced for this contemplated change seems 
to be to increase and '-'iden the market for 
lien's Clothing i -nufacturers at the expense 
and financial ruin of the Cotton Garment In- 
dustry." 

"Let us consider the t ,_ o • Industries and we 
shall see that this is a fa t. hen's Cloth- 
ing manufacturers produce .roolen garments or 
garments with an overwhelming --oolen content. 

"Their products were never intended for the 
laboring class' to he used as work clothes. 
They were intended for sport or dress. Their 
employees are ill skilled employees whose 
- - e scale wfss always materially higher than 
in our Industry, hen's Clothing -err and are 
handled by distinguished and exclusive cloth 
in stores and the better departments of de- . 
partment stores. ^lexy rarely, if ever, • ill 
you find work clothes and dress or sports 
clothes displayed together in the same retail 
or department store. 

"The contrary is true of the fork Clothes In- 
dustry. Its employees are unskilled. Their 
"•age scale has been materially, and justly so, 
lo^er than that of the -"en's Clothing Industry. 
Its products are sold in separate departments 
(usually in the basement) of department stores 
and in distinct retail stores. '. T ork Clothes 
are intended solely for working purposes for 
the laborer - not for the 'white collar man'. 
The sales prices of work clothes has been 
materially lo^er than men'; pants or suits, 
'.ork Clothing have never been, and are not, 
intended for sports or dress. 

"It is inconceivable, therefore, from the 
foregoing distinctions to justify this attempt 
by the hen's Clothing Industry to usurp con- 

S782 



-412- 



trol over ',7ork Clothing except on the ground 
of a malicious intent to kill the Industry 
for its (The Ken's Clothing Industry's) 
betterment. 

"If the purpose is so odious, the results are 
obviously more serious. It cannot be dis- 
puted by anyone that the manufacturer of '-'ork 
clothes today finds it very difficult to sell 
his product since the recent price increases. 
A buyers strike already exists and adds to 
this difficulty. 

"Let us assume, for the sake of argument, 
that a change is made, and for iast.-mce, the 
manufacture of work pants is controlled by the 
regulations of the hen's Clothing Code. There 
would be very little difference in the selling 
price of Cotton and woolen Trousers. The con- 
sumer wo^ld naturally pay the slightly higher 
orice and purchase tne "oclen troiisers. The 
market for work pants would be serious cur- 
tailed. The result would be that irmumer-'.ble 
manufacturers of work clothes would, shut down 
and. many employees would be out of employment. 
For let us not forget that '-rork clothes factories 



in our Industry 


manufacture 80$ of those gar- 


nents, which the 


coiitemnl^.ted change seeks to 


transfer to the 


clothing Code. And 30,^ of our 



employees are also affec ted there by. The bur- 
den, therefore, is upon practically our entire 
Industry. 

"The remaining manufacturers would eliminate 
and cease the manufacture of Cotton Puits and 
products and change their factories to men's' 
clothing establishments. This would mean 
laying off all the unskilled laborers now em- 
ployed and the hiring of skilled laborers for 
the manufacturing of men's clothing. The 
effect ,-r ould be a bommerangj In time individual 
men's clothing factory sales would decrease 
because of the resulting competition - entire^ 
destructive. 

"And are we not reasonable in supposing and. 
anticipating that the work clothes manufacturer 
in restricting his business to the manufacture 
of overalls and coverals '.'ill meet the ser- 
ious competition of the South? 

"It is, for the facts and reasons set forth 
hereinabove, respectfully submitted that i 

9782 



-415- 



(1) The purpose of the contemplated 
change is both unsound and maliciously de- 
structive to one Industry for the exclusive 
advantage of another Industry foreign there- 
to; and 

(2) That the results of such a change 
would defeat the fundamental purposes of the 
N.R.A. by destroying an old Industry, causing 
serious unemployment , and the possible ruin 

of the Industry seeking to benefit by the change. 

"We, the Philadelphia Overall and ./ork Pants 
Manufacturers Association, composed of the 
following members who join in this protest, 
oppose the contemplated change which would 
limit and restrict work clotnes manufactur- 
ing under the Cotton Garment Code to 'over- 
alls, dungarees, overall jackets and cover- 
alls' and place the balance of their (Work 
Clothes Manufacturers) products under the 
Men's Clothing Code." (*) 

Mr. Harry Johnson, of Obermann cc Company, Springfield, Mo., 
claimed ttrt any higher selling prices would, be very disastrous 
to manufacturers of cotton pants. 

"I am speaking for the following five regional groups 
of the Cotton Garment Industry: 



Southern C-arment Mfrs. Ass'n. 
Central 'Vest " " " 
Ohio-India.na " " " 

New England " " " 

Southwest Work Clothes Mfrs. Ass'n. 41 



"Principally located in simll rural communities . 
It is our opinion that the prices we are now 
obliged to quote are too high for the consumer 



Firms 


1 achines 


Employees 


310 


35,400 


45, eon 


57 


3,100 


4,2on 


26 


2,200 


2,900 


76 


8,400 


s,eon 


.. 41 


4,o00 


5,700 


51 n 


53,700 


68,200 



(*) Statement of Facts nd :.i ,vnt Ag"inst the Changes Contemplated 

in the Cotton Garment Cdoe submitted on Behalf of the Philadelphia 
Overalls ic JorkJ?ants ? anuf acturers Association, Cotton Garment 
Cede Hearing, Monday, June 18, 1934. 



9782 



-414- 



to pay with their present income. The demand 
for low-priced garments in every direction in 
our industry is the proof of this statement. 
If any move is made over our protests to in- 
crease the prices that the consumer must pay, 
we h?ive no alternative bat to protect ourselves 
in the courts. The fantastic claim of the 
Clothing Code to the cotton pants industry, a 
group which cuts three percent of the cloth 
used in the cotton pants industry aspires to 
govern the other ninety-seven percent. 

"It may be noted that the cotton pants industry 
has uniformly ignored the so-called pants or- 
der for several reasons- first- that the or- 
der itself was unintelligible and it was an 
impossibility to get an interpretation that 
was not in the realm of metaphysics; second - 
had a sensible intprpreta.tion been available 
it would have been obviously imoossible to 
carry it into practice in our industry; third - 
the Cotton Garment Industry does not recognize 
the authority of R.ny outside bureaucratic or 
gariization to set basic rates in our industry 
any more thf>n they can do so in the automobilp 
or steel industry. T 7e may be smaller but our 
rights are th^ s^me. The Cotton Garment In- 
dustry is a sf= If -governing body and p>ny deci- 
sions ^s to rates and hours can only be en- 
forced with the consent of the Cotton Garment 
Code Authority. " (*) 

C. Testimony Regarding Mackinaws, Felt on 'Jackets, Etc. 

While the total volume of production of mackinaws, melton 
jackets, sheeplined and leather co»ts, lumberjacks, and similar 
garments was comparatively small, the jurisdictional conflict 
of the two Codes as to their manufacture had been pronortionately 
as acute as on the pants 'and wash suits. At this hearing, the 
ken's Clothing Code requested complete jurisdiction over such 
garments, and the following testimony was offered both orb and con 
on this question. 

"This Association founded twenty-six years ago, 
among past presidents have been manufacturers 
of sheeplined and leather garments, pants and 

(*) Transcript of Public Hearing, on Lien's Clothing, Cotton 

Garment, and Dress f'anufac taring Industries, June 2<~>, 1934, 
Volume 3, Page 847. 



9782 



-415- 



raackinaws. 

"The Cotton G~rment Industry is ~lso in industry 
representing clothes to work in for mpn, women ->nd 
children. 

"Sheeolined and leather coats ire TDrinarily working 
clothes ind there is no satisfactory reason why they 
should be classed otherwise or be moved from where thpy 
^re .- 1 present. 

"Kackinaws , meltons, and lumberj-ckets hive for decides 
been nil integral p-rt of ^ny line which features overalls, 
work shirts, flannel shirts, work pints, ind similar poods. 
From time to time', garments such as these, develoned 
for work use, qre adopted by clothing houses, dressed. ut> n 
little, ind for a reason or t< r o sho^n as style orooositions, 
This is the only argument, and i feeble one at that, which 
^n be advanced to claim that they m»y be identified, is 
Clothing. 

"I quote from Sweet -Or r ~nd Company's urice list, dated 
Spring, 1913, showing three and one-half pigfs devoted 
to nacv'lnaw conts alone, and listing seventy- three 
different styles. Also orice lists of October, 1926, 
showin." eirht pages of so-c°lled knit-bottom jackets, 
cossack jackets, meltons, etc. 

"Separate pints of ^11 styles have alwys been an 
integral part of " cotton garment line. The manufacture 
of separate pants, even of woolens and worsteds, his 
always been r part of the cotton g"rment industry until 
the time, some 'years ago, when clothing houses began 
making two pants suits. This gradually took away from 
the cotton garment industry - good part -of the higher 
grade classes of pants. Cotton pants of any kind, however, 
properly belong where they now pre." (*) 

"About one hundred plants scattered throughout the United 
States - employing sever"! thousand people', producing 
garments known as mackinnws, stag shirts, snow suits, 
suece ".nd Kelton blouses, etc., designed and. used for 
rough outdoor work and plav, and orod\iced and sold in 
conjunction with work coats, work pints, =ind overalls. 

"Statement as to why they should remain under the Cotton 
Garment Code: 



(*) Tr^nscriDt of Rearing on fen's Clothing, Cotton Garment, 
and Dress ' --nuf acturing Industries, Volume 3, Page 814, 
June 20, 1934. (Stanley A. S"-eet) 

Chaironn of the Bo=rd- International Association of Garment 
i ' 'iuf f'ctarers. 



978^ 



-416- 



1. H-ve been origin-ted by some producers as 
work garments for strenuous outdoor activities 
under severe climatic conditions. These garments 
f or t""=lve yPTs or ".ore have been grouoed by the 
Department of Commerce with 'ork garments such -s 
overalls and work o-nts.:' 

2. Style ind metnods of construction and 
materials -re so crude - s to be-r no comparison 
with the oroducts under the 'I'en'b Clothing Code. 
Principal objects of the manufacturers have 
always been soeed of production -nJ durable 
weiring qualities -=t the e-pense of style, ^nd 

- low cost to the workman consumer wno had to 
use them. 

3. Distribution has been through entirely 

different cnannels thin Men's Clothing 

The work Clothing departments of wholesale dry 
goods houses, chain stores, and main order 
houses, and through the ret-iler of work cloth- 
ing -nd the rural merch-nt. 

4. As use of these garments is confined 

to limited se-sons of the year, need flexibility 
in hours at peak seasons". (*) 

The following is ti analysis of I r, Louis Cohen's statement: 

"Manufactures overcoats, ir^ckinaws, mplton jackets. 
In clothing business for past twelve years, emnloys 
ninety-seven persons, continuous emolovment forty- 
eight weeks, sixty-five of the employees have been 
with the firm eight or ten years. Pre-Code worked 
forty-nine and =i half hours. 1923 Volume of 
business $25,000; 1S32 - $188, nnO; 1933 - $23? r 00n ; 
first five months 1934 - twenty percent increase' 
over 1933. 

"An overcct is an outer garment made of wool and p,art 
wool fabrics, worn for protection against the elements. 

"A rnckinaw is an outer irarmejit mnde of wool and part 
wool fabrics, '"orn for protection against the elements. 

"The material in their mackina.ws is very often 
inter-changeable with the materi.pl used in their 
overcoats. 



(*) Letter from H.A. S-peh, Chairman, Hough Outdoor Garment Group, 
National Work Clothes Kanuf cturers Association, to ".m. P. 
Farnsworth. .Tra.nscr.ip of Hearing on ien's Clothing, Cotton 
Garment, a n d Dress ! anufacturing Industries, June 20, 1934, 
Supplement Mo. 1, page 1. 

9782 



417- 



"The majority of consuners, if they, buy n ijnckinaw, 
■"ill not buy -n overcoat. 

"A nplton jacket is ^n outer garment nrde of the cloth 
from which it derives its name, which is n smobth- 
finished all w ool and part wool cloth, conp">r n ble to 
the cloth usee for overcoats 'and mackiha T " ; s, ^ind is 
worn largely for the same purpose as overcoats ^nd 
"i-ckin o '"s , that is, for urotection against the cold. 
It is generally made into n blouse effect, "nd very 
often has q sipper instead of buttons; it is shorter 
thin q mackinaW| and in order to fit tightly about 
the w-dst, a lcnit-bottora is sewed on, or the bottom 
is provided with stracs. It is used by the consumer 
for fishing, outdoor sports, hunting and golfing, 
A large oroo-^rtion of the population in their s~les 
territory wear melton jackets as a substitute for 
m^ckina'-'s '^nd ove\rco^ts, °nd in the last few years, 
the younger element, students, prefer melton j-ckets. • 

"Since the Cotton Garment Code went into effect 
(in November, 1952) their melton jackets h-^ve shown 
price resistance , because retailer can buy cheaper from 
those manufacturing under the Cotton Garment Code. 

Product Prod act ion 

19^9 1932 ' 1935 1954 

Overco-ts 1<Y$ 60'b 801 9C,% 

Mackinaws & Felton — 40? 3 ?n% m% 

J-ackets 



"?efore the depression this firm made one hundred 
percent overcoats. When depression lessened purchasing 
power of the consumer, tney h"d to start manuf ~cturinfr 
m^ckin^ws. In 195?, mackinavrs r, nd melton jacket comprised 
nearly fifty percent of their business." (*) 

An analysis of the statement of Julius C. I.'orse, President of 
Leopold Morse Company, Boston, Mass.", follows: 

"This company manufactures clothing and distributes 
through eight retail stores in I.'ew England, fully or 
partly-owned. Cvercoats retail from $15.00 ^p; while 



(*) Statement of Louis Cohen, of Conen Bros. Jilwaukep, Jisconsin, 
Transcript of Hearing, I en's Clothing, Cotton Garment, a nc i 
Dress I ~nuf acturing Industries, June 20, 1954, Volume 5, pa^-es 
678-66 _ 



9782 



*4TB*» 



imckinaw is m^de of the s^me cloth,. and in reality is 
nothine; bat a different type of overcoat. -*, 
They are sold to customers who come into the stores 
looking for lr»e>r- -priced overcoats.. ' 

"In their stores they display in the s^me section single 
p^nts of all wool, part wool, -ind 100* cotton content. 
Tney manufacture some of their ""oolen pants, but buy 
n ll the cotton, much cheaper than they could afford to 
make them under the Ten's Clothing Code. The cotton 
sanforized trousers sold in their stores ire not sold 
to men who use them for work purposes — tney are sold in 
conjunction with knickers, flannel trousers, or garments 
used for sport purposes. 

"If imckinans were under the Ten's Clothing Code, I 

do not think it 'vould affect the retail price ovpt $1.00 

in those now made under the Cotton Garment Code.'" (*) 

A resolution of the lie" 1 York Sheeplined ^>nd Leather Clothing 
Manufacturers, d^ted June 14, 1S34, w s read by f'r. Greef : 

"Ne" 1 York rnnuf acturers cons* itute n l^rge percentage 
of the entire industry -nd existing piece r^tes in 
lie'"' York City -^re uo to 5 r >^ higher than those under 
the Cotton Garment Code. Very little cotton in the 
garments. That conditions in these firms tp in line 
with those provided for under the "en's Clothing Code 
— Resolved that they be brought under the Fen's Cloth- 
ing Code. " 

Mr. Greef also read a quotation from the Daily News Record of 
August 5 (1933): 

"The National Association of Sheeplined and Leather Garment 
Fanuf acturers , Inc., is composed of 53 firms, .employing 
4,000, volume $10,000,000 annually. Cotton constitutes 
n very small component value in the manufacture of their 
garments, a basic horsehide garment contains — one yard all 
wool plaid lining, 26 feet horsehide leather, l/2 yard cotton 
sleeve lining and -Docketing, 1/2 do?en bone or composition 
buttons, and 1 metal buckle. Actual, value of cotton content, 
2% of materials used, is 12 cents." (**) 

(*) Transcript of Hearing on I en's Clothing, Cotton Garment, and 

Dress Lanuf acturing Industries, June 20, 1934, Volume 3, Pages 

682 to 684. 

(**) Transcript of Hearing on Ken's Clothing, Cotton Garment, arid 

Dress !'- anuf acturing Industries, June 20, 1934, Volume 3, Page 

685 to 692. 



9782 



-419- 



The following: letter to Congress^om^n Florence P. K"hn, from 
filoesser-Heynemann Company, of San Fmncisco, California, ^r.p of 
the representative pacific Coast manufacturers, was filod at this 
hearing. 

"Your telerram of June 11th requesting facts and arguments 
for the hearing before the NRA administrator on the Cotton 
Garment Code has already been anticipated to a gre^t extent 
by my letter to you of June 8th. 

"The proposed changes i"ill result in very much higher costs 
of manufacture. Costs to the consumer of manuf actored 
articles have already advanced very much faster than his 
earning power. The result is that retoi 1 tr-->de is at 
the present time very seriously effected ^no retailers are 
comwen:.ing to l-.y oi'f comoloyees. Similarly the retailers' 
purcir :es from manufacturers, even at current levels, h^ve 
shown a, very important falling off. The sm^.il orders 
ol^cec. with m nuf --ict are rs indicate that the present r^te 
of manufacture "ill not be maintained, vliich involves 
l^y-offs qid more unemployment, To ignore this situation 
and insist on a orocedure which ^ill very materially 
increase costs «nd "rill materially further raise prices 
to the consumer is si mnly suicidal. 

"The argument is freouently presented by the Clothing 
Code that the increased rates which exist under their 
Code will not make an important difference in the cost 
of work garments. This argument is inconsistent '"ith 
the presentation th^t they cannot meet the competition 
from '-'ork clothing garments if they -^re not manufactured 
on the s^me basis as clothing. 

"It is a well recognized practice among retailers to 
operate ~t specific retail prices, ''hich produce the 
best volume of business. To use ^n illustration: 
Cordaroy Pant s ^_re being sold for $2.95. I'anuf acturers 
naturally are furrushinr the best product th->t i"ill fit 
into this retail price. They are forced by competition 
to sell on ? close margin and any additional cost must 
increase the wholesale price. The retailer is already 
paying the highest wholesale price at ■'hich he c°n 
n-int^in a re-sale of $2,95. Any increase in his 
wholesale price will involve on increase in the retail 
price. There is no s^tisf --ctory retail price between 
$2.95 and J.3.50. In otiier words, the change of 
Corduroys from the Cotton Garment Code to the Clothing Code 
will increase the orice of the $2.95 Corduroys to at 
le = st --/..SO. This garment formerly sold for S2.45 and 
work men's ^ages have not been advanced sufficiently 
to en-ble them to pay •-p.5.5 r > for garments which formerly 
cost them $2.45. 

9782 



-420" 



"The St ite of C-liforni- 1 has 185 factories manufacturing 
all cotton parraents, and r-mi:s sixtn among the States of 
the Union in the number of plants'. The products of its 
factories are great ly diversified, a condition made necessary 
by the relatively sparse oopu^: ion. "Thile a factory with 
a sufficiently large output in different lines can be seg- 
regated into deportments, e^ch department operating under 
separ-te Codes., it is not nracticable for the s^me operators 
in one deoartnent to work on " variety of items under 
separate Codes with conflicting provisions. The large 
eastern pianos wo.J.d tnerefore be only too well oleased 
to deorive the smaller institutions in California of the 
opportunity for existence; by denying them the right to 
manufacture any of the various products which are used 
in their own community, under tne only conditions which 
are oracticable under the circumstances. 

"The Cotton Garment Code Authority h"s as its director, 
Colonel -.B. Paddock. I have advised Colonel Paddock 
that he can couit on your' support; and have requested 
him to place the data of the Cotton Garment Code Authority 
at your disposal. 

"I want again to express the very sincere ^looreciation 
of every member of our industry for tne interest that 
vou have t-4'en in this extremely important cause." 



9782 



-421- 

III. Post Hearing Developments -"rior to the Ac roval 

of the Amendment 

A. 'Let:-rs of Protest, fro:-. Cotton G-arnont In^ustr?- 

Definite action by t the Administration on the proposals presented 

at these hearings was delayed for two months until August 21, 

193d-. Great numbers of protests from all trances of the Cotton 

r e t Industry were received. The following letters from the 

: erne Ifenuf acturing Co . , Berne, Indiana, are indicative of the 

general feeling of many industry menders: 

"Your letter of June 13 in answer to my letter of June 8. was 
relaid from my office to the Hetf Yorker Hotel in "Jew York Cifcy, 
hut unfortunately Uncle Sam failed to deliver the mail to me 
on time and it wasn't until this morning that it -was returned 
to me here at home. 

"I, of course, regret now that I didn't get a cliance to chat 
with you in the quiet way which you suggested. It was my 
personal feeling all through the Washington hearing that pub- 
licity given to the cause would do very little .good and possibly 
a lot of harm to everyone concerned. 

"I think we get a great deal more done when we can sit down 
quietly to discuss our problems without any feeling of an- 
tagonir i and rivalry. It is then that we do our best work. 

"In the future, if it is at all possible to work these things 
out without n lit of fever and demonstration, I feel that the 
industry could be saved a tremendous amount of money and time 
• hich is now being squandered. Any number of manufacturers 
who came to Washington at the last hearing went away in dis- 
gust. All they could do was to listen to a lot of things 
that seemed utterly foolish to them - express their private 
opinions among each other - and then go home after spending from 
$150.00 to $300.00 or 3-1-00. 00. 

"The rational Recovery Administration cannot afford to alien- 
ate the cooperative sentiment of the rank and file manufacturers 
in this country in any industry. After helping to formulate our 
code from the very beginning, I can truthfully say that up to 
the recent hearing, most manufacturers talked, argued, and 
operated in favor of our code. There is practically no ob- 
jection to control of hours and wages and to the elimination 
of dishonest business practices. But when the administration 
tries to go farther or when it imposes impractical regulations 
with respect to hours and wages, or with respect to the natural 
association c: :afacturers , then the Administration breeds 

2782 






stubborn resistance which will lead to wholesale non-com- 
pliance. If you will re-read my brief which I presented 
at the luiaring, I believe you will get a pretty fair slant, 
not only at the "background w. .ich has "brought us to the point 
where we are today, but also to the sentiment that exists in 
the industry wheia impractical, unworkable rules anc regula- 
tions are forced upon our induscry, 

"It is undoubedly true that our present code is somewhat in 
conflict with two or three other apparel codes, However, it 
isn't :)ur fault that these other apparel codes are operating 
under rules r-s^. regulations quite different from ours. Person- 
ally, I feel they originally should have had the same hour' and 
wage regulations that we have. Because they haven't, they 
shouldn't ask our association now - at this particular moment - 
to make the changes that are bound to lead to higher prices 
when the public already is on a buyers strike. Personally, I 
feel that our industry will be read" to cooperate with the 
other apparel industries a year iron now in building a more 
uniform set of codec, which comply with the new regulations 
that will be made by Uncle Sam at the expiration of the present 
]>TIRA act. With two years of experience, Uncle Sam will be in 
position to write a basic law which will remove some of the 
argumentative details while he retains the practical and the 
workable . 

"Everything should be done to retain the gains we have registered. 
These must Dot be lost. If at all possible, we should yet see 
to it that prison competition is completely eliminated.- Then 
the foundation will have oeen laid to reconstruct the Utility 
Garment Industry on a healthy foundation,"* 

"In reviewi